INDUSTRIAL BUILDING LEASE
Exhibit
99.1
THIS LEASE, made as of this 28th day of October, 1996 between CENTERPOINT REALTY SERVICES
CORPORATION, an Illinois corporation (hereinafter referred to as “Landlord”), and FACTORY CARD
OUTLET OF AMERICA LTD. an Illinois corporation (hereinafter referred to as “Tenant”).
ARTICLE I
Lease Terms
Section 1.1. Definitions. In addition to the other terms, which are elsewhere defined
in this Lease, the following terms and phrases, whenever used in this Lease shall have the meanings
set forth in this Subsection, and only such meanings, unless such meanings are expressly
contradicted, limited or expanded elsewhere herein.
| A. | Area of the Premises: 440,343 square feet. | ||
| B. | Base Rent Schedule: |
| Period | Annual Base Rent | |||
Commencement
Date - Lease Year 5 |
$ | 1,836,230.28 | ||
Lease Years - 6-10 |
$ | 2,109,242.76 | ||
| C. | Estimated Commencement Date: October 1, 1997. | ||
| D. | Estimated Termination Date: September 30, 2007. | ||
| E. | Force Majeure: any event or circumstance which is beyond the control of Landlord including, without limitation, any delay in securing a building permit or in obtaining all required approvals from any Governmental Authority, strikes, lockouts, picketing (legal or illegal), acts of God or the public enemy, governmental restrictions or actions, fire or other casualty, accidents, unavailability of fuel, power, supplies or materials, unusual adverse weather conditions, acts or omissions of any labor or material contractor or the passage or application of any Legal Requirements or moratorium of any Governmental Authority which is not now in effect which has the effect of preventing or delaying progress on the Initial Improvements and Tenant Delay. | ||
| F. | Force Majeure Delay: any interruption or delay in the progress of the Initial Improvements which is the result of Force Majeure. Any delay which is the result of Force Majeure shall be deemed to be a Force Majeure Delay notwithstanding that Landlord or its contractor with respect to the time period for which the Force Majeure Delay is being claimed is concurrently delayed by events within its control. |
| G. | Governmental Authority: any federal, regional, state, county or municipal government (including, without limitation, any agency, authority, subdivision, department or bureau thereof. | ||
| H. | Initial Improvements: collectively, the improvements contemplated in the Plans, consisting of (i) the Building containing approximately 440,343 square feet of space and related improvements to be constructed on the Land approximately as depicted on the site plan attached hereto as Exhibit “A” and by this reference incorporated herein. | ||
| I. | Initial Monthly Rent Adjustment Deposit: $25,990.00 |
| (i) | Initial Tax Deposit: $24,890.00 |
||
| (ii) | Initial Insurance Deposit: $1,100.00 |
| J. | Initial Term: the period commencing as of the Commencement Date and ending on the last day of the tenth (10th) Lease Year thereafter which will result in an Initial Term of approximately ten (10) years and three (3) months. | ||
| K. | Landlord’s Broker: None. | ||
| L. | Landlord’s Mailing Address: | ||
| c/o 000 Xxxxx Xxxxxxxx Xxxxxx | |||
| Xxxxxxx, Xxxxxxxx 00000 | |||
| Attn: Xx. Xxxxxx X. Xxxxxxx | |||
| Chief Operations Officer | |||
| M. | Legal Requirements: (i) any and all laws, codes, ordinances, requirements, standards, plats, plans, criteria, orders, directives, rules and regulations of any Governmental Authority affecting the improvement, alteration, use, maintenance, operation, occupancy, security, health, safety and environmental condition of the Premises or any part thereof (or any occupants therein, as the context requires), including, without limitation any Environmental Laws (as hereinafter defined), and (ii) provided copies of same have been given to Tenant or Tenant has knowledge of same any and all covenants, restrictions, conditions, easements and other agreements of record affecting the Premises and the Reciprocal Easement Agreement, as amended from time to time, and any documents, rules, regulations, standards or criteria set forth or referenced therein or promulgated by the Landlord or any governing body or entity exercising jurisdiction over the Premises, in any case, whether in force at the Commencement Date or passed, enacted or imposed at some time in the future, and shall include all permits, licenses, certificates, authorizations and approvals required in connection with any of the foregoing. | ||
| N. | Plans: the plans and specifications to be prepared by the Project Architect for the construction of the Building. |
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| O. | Project Architect: | ||
| P. | Reciprocal Easement Agreement: such easements over, upon and across the Premises as are reasonably required to provide for ingress, egress, drainage, detention, access to utilities and services, maintenance of secured common elements and services and the sharing of expenses thereof, existence of immaterial encroachment and similar rights customary among several parcels comprising a single commercial development. | ||
| Q. | Rental Rate: the amount of $4.17 for the period commencing on the Commencement Date and ending on the last day of Lease Year 5 and the amount of $4.79 for the period commencing on the first day of Lease Year 6 and ending on the last day of Lease Year 10. | ||
| R. | Specifications: the Preliminary Specifications dated October 25, 1996 attached hereto as Exhibit “D” and by this reference made a part hereof. | ||
| S. | Substantial Completion or Substantial Completion Date: the earlier to occur of (i) the date on which Landlord receives a permanent, temporary or conditional certificate of occupancy from the Village permitting the use of the Premises for the Use; provided, however, if such certificate is not issued solely due to the failure to complete any work not a part of the Plans or the Landlord’s obligation under this Lease, such certificate shall be deemed to have issued, (ii) the date the Project Architect states in writing that the Initial Improvements are substantially completed in accordance with the Plans (as such Plans may be revised from time to time in accordance with the terms of this Lease), or (iii) the date on which Tenant occupies the Premises or any portion thereof for the conduct of its business. In the event there is a dispute as to Substantial Completion, the Project Architect shall determine, in the exercise of its reasonable judgment, whether or not the Initial Improvements are substantially completed as required herein, and the parties hereto agree to be bound by such decision. | ||
| T. | Tenant Delay: any interruption or delay in the progress of the Initial Improvements which is the result of: (i) the failure of Tenant to approve or comment on the Plans or any portion thereof within the required time limits; (ii) changes in construction requested by Tenant or any member of the Tenant Group; (iii) the performance or non-performance by Tenant of any work at, or services with respect to, the Premises; or (iv) any other act or omission of Tenant, any member of the Tenant Group or any person, firm or entity claiming by, through or under any of them. | ||
| U. | Tenant Group: any or all of Tenant’s agents, employees, representatives, contractors, workmen, mechanics, suppliers, customers, guests, licensees, invitees, sublessees, assignees and all of their respective successors and assigns or any party acting by, through or under any of them. |
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| V. | Tenant’s Broker: Xxxxxxxx and Associates. | ||
| W. | Tenant’s Mailing Address: | ||
| 000 Xxxxxxxx Xxxxx | |||
| Xxxxxxxxxxx, Xxxxxxxx 00000 | |||
| Attention: Xx. Xxx Xxxxx | |||
| Vice President of Distribution | |||
| X. | Term: The Initial Term as same may be extended or sooner terminated. | ||
| Y. | Use: Storage and distribution of greeting cards, gifts and related items and related office use. | ||
| Z. | Village: The Village of Naperville, Illinois. |
Section 1.2. Significance of Definitions. Each reference in this Lease to any of the
Definitions contained in Section 1.1 of this Article shall be deemed and construed to incorporate
all of the terms provided under each such Definitions.
Section 1.3. Enumeration of Exhibits. The exhibits in this Section and attached to this Lease
are incorporated in this Lease by this reference and are to be construed as a part of this Lease.
| Exhibit “A” - Site Plan | |||
| Exhibit “B” - Legal Description of Land | |||
| Exhibit “C” - Form of Estoppel Certificate | |||
| Exhibit “D” - Specifications |
ARTICLE II
Premises
Section 2.1. Lease. Landlord, for and in consideration of the rents herein reserved
and of the covenants and agreements herein contained on the part of Tenant to be kept, observed and
performed, does by these presents, lease to Tenant, and Tenant hereby leases from Landlord, the
building (hereinafter referred to as the “Building”) and Initial Improvements being depicted on the
site plan attached hereto as Exhibit “A” to be constructed on the real estate located at Xxxxx Road
in Naperville, DuPage County, Illinois legally described on Exhibit “B” attached hereto and by this
reference incorporated herein (all of said real estate is hereinafter referred to as the “Land”).
The Land, Initial Improvements and other improvements now or hereafter constructed on the Land are
hereinafter collectively referred to as the “Premises”. The demise of the Premises is subject to
the Legal Requirements.
ARTICLE III
Term
Section 3.1. Term. The Initial Term of this Lease shall commence on the date
(hereinafter referred to as the “Commencement Date”) which is the later of (i) the Estimated
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Commencement Date or (ii) the Substantial Completion Date, which date is estimated to be the
Estimated Commencement Date, and shall end on the last day of the tenth (10th) Lease Year
thereafter unless sooner terminated as herein set forth. The term “Lease Year” when used in this
Lease shall mean a twelve (12) month period commencing (i) as to the first Lease Year, on the date
(hereinafter referred to as the “First Lease Year
Commencement Date”) which is ninety (90) days
after the Commencement Date if same is the first (1st) day of a calendar month or the first (1st)
day of the fourth (4th) full calendar month after the Commencement Date if same does not occur on
the first (1st) day of a calendar month, and (ii) as to subsequent Lease Years, on the annual
anniversary date of the First Lease Year Commencement Date. Concurrent with the actual
Commencement Date of this Lease, Tenant shall deliver to Landlord an estoppel certificate in
accordance with Article XVII hereof.
Section 3.2. Memorandum of Lease Term. Landlord and Tenant shall execute an
instrument fixing the actual Commencement Date and termination of the Initial Term of this Lease at
the request of either Landlord or Tenant.
ARTICLE IV
Construction of Improvements
Section 4.1. Landlord’s Construction Obligation. Subject to the terms and conditions
of this Article IV, Landlord shall, at its sole cost and expense, construct or cause to be
constructed the Initial Improvements on the Land in accordance with the Plans and the
Specifications. Landlord agrees that all services and work performed in connection with the
Initial Improvements shall be done in a good and workmanlike manner using only new material, and
shall be performed substantially in accordance with applicable Legal Requirements.
Section 4.2. Plans Approval. Landlord shall cause the Project Architect to prepare
Plans acceptable to Landlord. The Plans are subject to Tenant’s approval (which shall not be
unreasonably withheld or delayed), and if Tenant does not approve same, Tenant shall advise
Landlord in reasonable detail of the reasons for such disapproval. Tenant shall comment on the
Plans (or any component thereof submitted to Tenant) and each revision thereof within five (5)
business days after receipt from Landlord; provided, however, that Tenant shall have ten (10)
business days within which to comment on the final Plans. In the event that Tenant does not
disapprove of the Plans (or any component thereof submitted to Tenant) within said time periods, as
applicable, the Plans (or applicable component thereof) shall be deemed approved. Tenant may not
object to any changes as may be incorporated in the Plans necessary to obtain the approval of the
Village, provided Tenant is promptly notified of same, and so long as such changes do not
materially affect Tenant’s intended use of the Premises.
Section 4.3. Completion. Landlord shall diligently proceed with the necessary
approvals for and the construction of the Initial Improvements upon approval of Landlord, Tenant
and the Village. Landlord shall use its best efforts to substantially complete the Initial
Improvements and deliver possession thereof to Tenant on or before the Estimated Commencement Date;
provided, however, if construction is delayed because of any Force Majeure Delays, then the time of
completion of such construction shall be extended for the additional time caused by such Force
Majeure Delays without liability on the part of Landlord.
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Section 4.4. Tenant’s Inspection Rights. Landlord shall exercise reasonable efforts
to keep Tenant advised with respect to the progress of the construction of the Initial Improvements
and the estimated date of Substantial Completion, and Landlord shall notify Tenant in writing as
soon as Substantial Completion occurs as provided herein. During the construction of the Initial
Improvements and subject to Landlord’s reasonable scheduling requirements, Tenant shall have the
right to inspect to Premises to monitor the progress of construction of the Initial Improvements;
provided, however, that such right may not be exercised unless Tenant has: (i) given Landlord
prior notice of the date and time Tenant intends to exercise such inspection right; and (ii) Tenant
and/or Tenant’s architect are accompanied at all times during the course of said inspection by
Landlord and Landlord’s representative or the Project Architect.
Section 4.5. Changes. Tenant may propose one or more changes to the Plans, consistent
with the scope of the work described in the Plans, to Landlord any time before the Substantial
Completion Date, subject to the reasonable approval of Landlord and the Village. As promptly as
reasonably practicable after the receipt and approval thereof, Landlord shall provide Tenant with a
written estimate of the Force Majeure Delay in the Substantial Completion Date and the amount of
the additional cost to complete the Initial Improvements which will result from such change
(whether hard costs or soft costs), which costs shall be: (i) the cost of all materials, supplies,
equipment and labor used or supplied in making the proposed change, including general conditions
and any contractor’s fees (which general conditions and contractor’s fees shall together total
fifteen percent (15%) of such costs); (ii) any architect and engineer fees; (iii) soft costs; and
(iv) fees and expenses of architects, engineers and other third party consultants in connection
with review or approval of changes in Plans. If Tenant fails to approve of the revised Plans and
associated estimate within five (5) days after delivery of the same, Tenant shall be deemed to have
abandoned its request for such change, and the Initial Improvements shall be constructed in
accordance with the then existing Plans. If Tenant approves the revised Plans and associated
estimate within said five (5)-day period by signing and returning a copy of Landlord’s estimate,
Landlord shall cause the Initial Improvements to be constructed in accordance with the Plans as so
revised. Tenant shall, at Tenant’s option (hereinafter referred to as the “Change Option”), to be
exercised by written notice to Landlord within ten (10) days after Tenant’s receipt of the cost
estimate from Landlord, either (i) pay Landlord the amount of such additional costs within five (5)
days after Landlord submits to Tenant a xxxx for such additional costs as are then due and payable
from time to lime or (ii) agree that the Annual Base Rent shall be increased (hereinafter referred
to as the “Increased Rent”) by an amount equal to the actual cost of completing the change as
referenced above multiplied by .1050. The Increased Rent shall be further increased by fifteen
percent (15%) on the first day of the sixth (6th) Lease Year. In the event that Tenant fails to
send a notice to Landlord exercising the Change Option, Tenant shall be deemed to have elected to
pay Landlord the cost of completing the change in cash. In no event shall Landlord have any
obligation to commence any work relating to such changes until Landlord has been paid the cost of
the estimate in full and in the event that the additional costs are not paid within said five
(5)-day period, Tenant shall be deemed to have abandoned its request for such changes and the
Initial Improvements shall be constructed in accordance with the then existing Plans. Unless
requested in writing by Tenant to the contrary, Landlord shall continue with construction of the
Initial Improvements according to the then existing Plans during the pendency of any proposed
change in the Plans until such change and cost estimate are approved by Landlord and Tenant as
provided above. Any halt in construction requested in writing by Tenant shall constitute a Tenant
Delay hereunder. If Tenant
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requests a change to the Plans pursuant to this Section 4.5, and Tenant does not ultimately
approve of the resulting revised Plans or cost estimates, Tenant shall promptly reimburse Landlord,
as Additional Rent, for any reasonable costs and expenses resulting from such requested changes
incurred by Landlord. In the event a change in the Plans proposed by Tenant results in a reduction
in actual cost to complete the Initial Improvements, the Annual Base Rent shall be reduced by an
amount equal to the net cost savings multiplied by .1050. For example, if the actual net cost
savings is $200,000.00, the Annual Base Rent shall be reduced by $21,000.00. Landlord may make
changes to the Plans without Tenant’s consent, provided that: (i) such changes (a) will not create
any additional monetary obligation for Tenant under this Lease, (b) are in material conformity with
the Plans (as may have been previously revised by permissible Tenant and/or Landlord changes
thereto), and (c) will not decrease the quality of any component of the Initial Improvements; or
(ii) such changes are required by any applicable Legal Requirements so long as such changes do not
materially affect Tenant’s use of the Premises.
Section 4.6. Punchlist. Before Tenant takes occupancy of the Premises but no later
than five (5) business days after the Substantial Completion Date, Landlord, the Project Architect
and Tenant shall conduct an inspection of the Premises, and work in good faith to jointly prepare a
punchlist (hereinafter referred to as the “Pre-Occupancy Punchlist”). Within ten (10) days
following the date Tenant first occupies all or any portion of the Premises, Landlord, the Project
Architect and Tenant shall conduct an additional inspection of the Premises, and work in good faith
to jointly prepare a supplement to the Pre-Occupancy Punchlist containing such items as may be
difficult to discover or ascertain prior to Tenant’s occupancy, but excluding: (i) any items
theretofore corrected by Landlord; and (ii) any damage caused by any act or omission of Tenant or
any member of the Tenant Group or any party claiming by, through or under any of them (the
Pre-Occupancy Punchlist, as so supplemented is collectively referred to as the “Final Punchlist”).
Except as otherwise expressly provided in this Lease and except for latent defects, any items not
on the Final Punchlist shall be deemed accepted by Tenant. Tenant shall provide reasonable access
to Landlord, its employees, agents and contractors for purposes of the repay and correction of any
punchlist items. Landlord shall complete all Final Punchlist items and proceed to obtain a
permanent certificate of occupancy as soon as is reasonably practicable after such Final Punchlist
items are finally determined subject to extension due to any Force Majeure Delays. If a temporary
occupancy certificate is revoked and Tenant is required to and vacates the Premises, Rent shall
xxxxx until the temporary occupancy certificate (or similar authorization) is reinstated or a
permanent occupancy certificate (or similar authorization) is issued.
Section 4.7. Representatives. Landlord designates Xxxxxxx X. Xxxxxx or Xxxx Xxxxxxxx
as its representative for all purposes of this Article IV. Tenant designates Xxxxxx Xxxxx or Xxxx
X. Xxxxxxx as its representative for all purposes of this Article IV. Wherever the terms of this
Article IV require any notice to be given to or by a party, or any determination or action to be
made or taken by a party, the representative of each party shall act for and on behalf of such
party, and the other party shall be entitled to rely thereon. Either party may designate one or
more substitute representatives for all or a specified portion of the provisions of this Article
IV, subject to notice to the other party of the identity of such substitute representative.
Section 4.8. Warranty. Landlord represents that it shall obtain (i) a warranty
against defective materials and workmanship with respect to the Initial Improvements from FCL
Builders, Inc., for a period of one (1) year from Substantial Completion of the Initial
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Improvements; and (ii) a warranty against defects in the roof for a period of fifteen (15)
years from Substantial Completion thereof from the roof manufacturer. Tenant shall notify Landlord
in writing of any defective condition occurring with respect to the Initial Improvements promptly
following Tenant’s discovery thereof and Landlord shall request that the party issuing the warranty
referenced above and any warranty from any other subcontractor or material supplier, if any,
perform any remedial work required to be performed under such warranty.
Section 4.9. Late Completion. In the event that the Initial Improvements are not
Substantially Complete on or before November 1, 1997 (hereinafter referred to as the “Penalty
Date”) once Substantial Completion occurs, Base Rent shall xxxxx one day for each day after the
Penalty Date until Substantial Completion occurs. In the event that the Initial Improvements are
not complete on or before April 1, 1998 (hereinafter referred to as the “Termination Date”) Tenant
may terminate this Lease upon written notice to Landlord within ten (10) days after the Termination
Date unless Substantial Completion occurs prior to the receipt of such notice by Landlord.
Notwithstanding the foregoing, if construction is delayed because of any Force Majeure Delays, then
the Penalty Date and Termination Date shall be extended for additional time caused by such Force
Majeure Delays.
ARTICLE V
Rent
Section 5.1. Base Rent. In consideration of the leasing aforesaid, Tenant agrees to
pay Landlord, without offset or deduction, base rent for the Initial Term (hereinafter referred to
as “Base Rent”) in the amount of the Annual Base Rent set forth in the Base Rent Schedule. The
Annual Base Rent shall be paid in advance, in twelve (12) equal monthly installments, commencing on
the Commencement Date (prorated for any partial month) and continuing on the first (1st) day of
each month thereafter for the balance of the Term of this Lease, and in addition thereto, shall pay
such charges as are herein described as “Additional Rent”. The term “Rent” when used in this Lease
shall include all Base Rent payable under this Section 5.1, as well as the charges herein described
as Additional Rent, and all other sums due from Tenant to Landlord hereunder. All Rent payable
hereunder shall be payable to Landlord and Landlord’s Mailing Address, or as Landlord may otherwise
from time to time designate in writing.
Section 5.2. Interest and Late Charges on Late Payments. Tenant acknowledges that its
late payment of any Rent will cause Landlord to incur certain costs and expenses not contemplated
under this Lease, the exact amount of which is extremely difficult or impracticable to fix. Such
costs and expenses will include, without limitation, loss of use of money, administrative and
collection costs and processing and accounting expenses. Therefore, if any installment of monthly
Base Rent is not received by Landlord within five (5) days after the date when due or any other sum
due hereunder is not paid within five (5) days after the date when due, Tenant shall immediately
pay to Landlord a late charge equal to two percent (2%) of the unpaid amount. Such late charge is
in addition to any interest due pursuant to the first sentence of this Section 5.3. Landlord and
Tenant agree that this late charge represents a reasonable estimate of costs and expenses incurred
by Landlord from, and is fair compensation to Landlord for, its loss suffered, by such non-payment
by Tenant. Acceptance of the late charge shall not constitute a waiver of Tenant’s default with
respect to such non-payment by Tenant or
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prevent Landlord from exercising any other rights and remedies available to Landlord under
this Lease. Rent not paid within thirty (30) days of the date when due shall bear interest from
the date when the same is payable under the terms of this Lease until the same shall be paid at an
annual rate of interest equal to the rate of interest announced from time to time by The First
National Bank of Chicago as its Corporate Base Rate, plus three percent (3%), unless a lesser rate
shall then be the maximum rate permissible by law, in which event said lesser rate shall be charged
(“Lease Interest Rate”). The term “Corporate Base Rate” means that rate of interest announced by
The First National Bank of Chicago (“First”) from time to time as its “Corporate Base Rate” of
interest, changing automatically and simultaneously with each change in the Corporate Base Rate
made by First from time to time. Any publication issued or published by First from time to time or
a certificate signed by an officer of First stating its Corporate Base Rate as of a date shall be
conclusive evidence of the Corporate Base Rate on that date. Failure to pay the late charge and
interest shall constitute a default under this Lease.
Section 5.3. Rent Abatement. Notwithstanding the anything to the contrary contained in
this Article 5, so long as Tenant is not in default under the terms and conditions of this Lease as
of the date any monthly installment of Base Rent would otherwise be due and owing during the
Abatement Period (as hereinafter defined), Tenant shall be entitled to an abatement of Base Rent
for the first three (3) months of the Initial Term (hereinafter referred to as the “Abatement
Period”). In the event Tenant is in default (after any applicable grace or cure periods) under the
terms and conditions of this Lease on the day any installment of Base Rent would have been due
hereunder but for the abatement of Base Rent during the Abatement Period, then, in such event, the
rent abatements attributable to Base Rent, as set forth above, shall no longer be in effect and
Tenant shall be obligated, during the period of such uncured default, to pay the monthly
installment of Base Rent that would have been due and owing hereunder but for the abatement of said
components of Rent (hereinafter referred to as the “Rent Default Payments”). Tenant shall not be
entitled to a proration of any Rent Default Payments so paid whether or not Tenant cures the
default at any time prior to the last day of the calendar month for which such installments were
paid. Tenant shall further be obligated to make all required Rent Default Payments until the
subject default is cured.
ARTICLE VI
Taxes and Impositions
Section 6.1. Taxes. Tenant further agrees to pay before any fine, penalty, interest
or cost may be added thereto for the nonpayment thereof, as Additional Rent for the Premises, all
Taxes (as hereinafter defined) levied, assessed or imposed upon the Premises or any part thereof
accruing during the Term of this Lease, notwithstanding that such Taxes may not be due and payable
until after the expiration of the Term of this Lease; provided, however, that the Taxes levied
against the Premises shall be prorated between Landlord and Tenant for the first year of the
Initial Term hereof as of the Commencement Date, and as of the date of expiration of the Term of
this Lease for the last year of said Term. After the expiration of the Term hereof, including any
extensions thereof, Tenant hereby agrees to reprorate Taxes upon issuance of the actual tax xxxx
for the last year of the Term. In the event of any increase in Taxes from the Taxes reflected on
the proration made upon the expiration of the Term of this Lease, Tenant agrees to immediately pay
to Landlord such sums as reflected by such reproration. Benefit may be taken by Tenant of the
provisions of any statute or ordinance permitting any special assessment to be
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paid over a period of years; provided, however, that Tenant shall pay all installments of
special assessments due during the Term hereof. Tenant shall, in addition to the foregoing, pay
any new Tax of a nature not presently in effect but which may hereafter be levied, assessed or
imposed upon Landlord or upon the Premises, if such Tax shall be based upon or arise out of the
ownership, use or operation of the Premises; provided, however, that for the purpose of computing
Tenant’s liability for such new type of Tax, the Premises shall be deemed the only property of
Landlord. As used herein, the term “Taxes” shall mean real estate taxes, assessments, sewer rents,
rates and charges, permit and license fees, transit taxes, taxes based upon the receipt of rent,
and any other federal, state or local governmental charge, general, special, ordinary or
extraordinary, which may now or hereafter be assessed against the Premises or any portion thereof
in any year during the Term hereof, and shall also include any personal property taxes
(attributable to the year in which paid) imposed upon the furniture, fixtures, machinery,
equipment, apparatus, systems and appurtenances used in connection with the operation of the
Premises.
Nothing contained herein shall be construed to require Tenant to pay any franchise,
inheritance, estate, succession or transfer tax of Landlord or any income or excess profits tax
assessed upon or in respect of all income of Landlord or chargeable to or required to be paid by
Landlord unless such tax shall be specifically levied against the rental income of Landlord derived
hereunder (as opposed to a general income tax), which tax shall be paid by Tenant as part of Taxes
hereunder provided said rental income shall be considered as the sole income of Landlord.
Section 6.2. Utilities. Tenant shall pay, directly to the appropriate supplier, all
costs of natural gas, electricity, beat, light, power, sewer service, telephone, water, refuse
disposal and other utilities and services supplied to the Premises. Landlord shall, at Landlord’s
sole cost and expense, separately meter the Premises. If, however, at any time, any services or
utilities are jointly metered, Landlord shall make a reasonable determination of Tenant’s share
thereof and Tenant shall pay its share, as Additional Rent hereunder, within fifteen (15) days
after receipt of Landlord’s written statement. Landlord shall not in any way be liable or
responsible to Tenant for any cost or damage or expense which Tenant may sustain or incur if either
the quality or character of such service is changed or is no longer available or suitable for
Tenant’s requirements, unless caused by Landlord’s negligence or intentional acts.
Section 6.3. Additional Tenant Obligations. Tenant father agrees to (i) perform
sprinkler inspections required by any insurance carrier or by any Legal Requirement from time to
time during the Term; (ii) pay any and all ADT charges for ADT services reasonably required by the
Landlord for the Premises; and (iii) perform roof inspections required by the roof warranty or any
Legal Requirements, from time to time. Tenant shall provide Landlord with evidence reasonably
acceptable to Landlord reflecting Tenant’s compliance with its obligations as set forth in this
Section 6.3.
Section 6.4. Deposits. As security for the obligations contained in Sections 6.1. and
9.7. hereof, Tenant shall deposit monthly with Landlord, or such other entity as Landlord may
designate, on the first (1st) day of each and every month of the Term, a sum equal to one twelfth
(1/12) of Landlord’s estimate of the current amount of Taxes levied with respect to the Premises,
Insurance Premiums (as hereinafter defined) and Expenses. All monthly deposits need not be kept
separate and apart by Landlord and shall be held by Landlord in such account or
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accounts as may be authorized by the then current state or federal banking laws, rules or
regulations. The monthly deposits shall be used as a fund to be applied, to the extent thereof, to
the payment of Taxes, Expenses and Insurance Premiums, as the same become due and payable. The
existence of said fund shall not limit or alter Tenant’s obligation to pay the Taxes, Expenses and
Insurance Premiums for which the fund was created. Tenant shall not be entitled to interest on
said fund. Tenant shall pay Landlord as its monthly deposit for the period commencing on the
Commencement Date and terminating on the December 31st immediately thereafter the Initial Monthly
Rent Adjustment Deposit. On or prior to each December 31st occurring within the Term, Landlord
shall advise Tenant as to Landlord’s reasonable estimate of the Monthly Rent Adjustment Deposits
that will be required for the next Calendar Year (as hereinafter defined).
Section 6.5. Adjustment Statement. As soon as reasonably feasible after the
expiration of each calendar year contained within the Term (hereinafter referred to as the
“Calendar Year”), Landlord will furnish Tenant a statement (hereinafter referred to as the
“Adjustment Statement”) showing the following:
(i) Actual Taxes and Insurance Premiums for the Calendar Year last ended and
the amount of Taxes and Insurance Premiums payable by Tenant for such Calendar Year;
(ii) The amount of Additional Rent due Landlord for the Calendar Year last
ended, less credits for monthly deposits paid, if any; and
(iii) The monthly deposits due in the current Calendar Year.
Section 6.6. Payments. Within thirty (30) days after Tenant’s receipt of each
Adjustment Statement, Tenant shall pay to Landlord:
(i) The amount of Additional Rent shown on said Adjustment Statement to be due
Landlord for the Calendar Year last ended; plus
(ii) The amount, which when added to the monthly deposits theretofore paid in
the current Calendar Year would provide that Landlord has then received such portion
of the monthly deposits as would have theretofore been paid to Landlord had Tenant
paid one twelfth (1/12) of the monthly deposits, for the current Calendar Year, to
Landlord monthly on the fist day of each month of such Calendar Year.
During the last Calendar Year, Landlord may include in the monthly deposits its estimate of the
Additional Rent which may not be finally determined until after the expiration of the Term.
Tenant’s obligation to pay such Additional Rent shall survive the Term.
Section 6.7. Payment Adjustments. Tenant’s payment of the monthly deposits for each
Calendar Year shall be credited against the Additional Rent for such Calendar Year. If the monthly
deposits paid by Tenant for any Calendar Year exceed the Additional Rent due for such Calendar
Year, then Landlord shall give a credit to Tenant in an amount equal to such excess against the
Additional Rent due for the next succeeding Calendar Year, except that if
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any such excess relates to the last Calendar Year of the Term, then, provided that no default
of Tenant exists hereunder, Landlord shall refund such excess to Tenant.
Section 6.8. Right to Pay. Landlord shall, at its option, have the right, without
notice to Tenant, at all times during the Term to pay any such Taxes not timely paid by Tenant, and
the amounts so paid, including reasonable expenses, shall be so much Additional Rent due at the
next rent day after any such payments, with interest at the Lease Interest Rate from the date of
payment thereof.
Section 6.9. Landlord’s Contest of Taxes. Landlord shall, on an annual basis, contest
the imposition of any Taxes against the Land and Improvements, in accordance with applicable law.
Tenant agrees Taxes shall include all of Landlord’s reasonable costs and expenses, including legal
fees and court costs, in pursuing any such contest provided Landlord is successful in obtaining a
reduction in the Taxes. There shall be deducted from Taxes the amount of any Taxes refunded in any
Calendar Year, provided said refund relates to an assessment year included within the Term of the
Lease. If a refund is received by Landlord after the termination of the Term relating to an
assessment year included within the Term, provided all of Tenant’s obligations under the Lease have
been satisfied, Landlord shall refund to Tenant Tenant’s share of such refund. In the event
Landlord elects not to contest the imposition of Taxes, Tenant may do so at Tenant’s sole cost and
expense.
ARTICLE VII
Use
Section 7.1. Use. The Premises shall be used for the Use only, and for no other
purpose.
Section 7.2. Prohibited Uses. Tenant shall not permit the Premises, to be used in
such manner which impairs Landlord’s right, title or interest in the Premises or any portion
thereof, or in such manner which gives rise to a claim or claims of adverse possession or of a
dedication of the Premises or any portion thereof for public use. Tenant shall not use or occupy
the Premises, in whole or in part, to be used or occupied, or do or permit anything to be done in
or on the Premises, in whole or in part, in a manner which would in any way violate any certificate
of occupancy affecting the Premises, or make void or voidable any insurance then in force with
respect thereto, or which may make it impossible to obtain fire or other insurance thereon or which
would render the insurance risk more hazardous, or which will cause or be apt to cause the
structural injury to the Premises or any pan thereof, or which would cause the value or usefulness
of the Premises or any part thereof to diminish, and shall not use or occupy or permit the Premises
to be used or occupied, in whole or in part, in a manner which may violate and shall comply with
any present or future, ordinary or extraordinary, foreseen or unforeseen, Legal Requirements,
whether or not Landlord also is liable for compliance. Tenant will not do or permit or suffer any
public or private waste, damage, impairment or injury to or upon the Premises or any part thereof.
Section 7.3. No Implied Permission. Except as otherwise expressly provided herein,
nothing in this Lease contained shall authorize Tenant to do or permit or suffer any act which
shall in any way encumber the fee title of Landlord in and to the Premises or any interest
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therein. The title, interest or estate of Landlord in the Premises shall not be in any way
subject to any claim by way of lien or encumbrance, whether arising by operation of law or by
virtue of an express or implied contract by Tenant. Any claim to a lien or encumbrance upon the
Premises arising from any act of omission of Tenant shall accrue only against the Tenant’s
leasehold estate and shall in all respects be subject and subordinate to the paramount title and
right of Landlord in and to the Premises. Every person furnishing, manufacturing or preparing any
material, fixtures, apparatus or machinery for, or on account of, the Premises or any other
improvements now or hereafter erected, or the appurtenances or furnishings therein, or performing
any labor or services in, upon or about the Premises, or the improvements or appurtenances, or
dealing in any way with Tenant or anyone claiming by, through or under Tenant shall take and be
held charged with notice of this condition, and shall have and acquire no lien upon Landlord’s
estate or interest through the furnishing of such material, fixtures, apparatus, machinery, labor
or services.
Section 7.4. Adverse Claims. In amplification and not in limitation of the foregoing
provisions of Article VII, Tenant shall not permit any portion of the Premises to be used by any
person or persons or by the public, as such, at any time or times during the Term in such manner as
might reasonably tend to impair title to the Premises or any portion thereof, or in such manner as
might reasonably make possible a claim or claims of adverse use, adverse possession, prescription,
dedication or other similar claims of, in, to or with respect to the Premises or any part thereof
or estate therein.
ARTICLE VIII
Maintenance of Premises
Section 8.1. Maintenance. Tenants agree at Tenant’s sole cost and expense, to take
good care of the Premises and keep and maintain same and all pans ‘thereof, including, but not
limited to, the Initial Improvements, the entire interior and exterior thereto, alters, floor
coverings, roof, structure, windows, glass, plate glass, ceilings, skylights, interior and exterior
and demising walls, doors, electrical systems, lighting fixtures and equipment, plumbing systems
and fixtures, sprinkler systems, heating, ventilating and air conditioning systems, loading docks,
areas and doors, rail space areas, fences and signs, and all other pipes, mains, water, sewer and
gas connections and all other fixtures, machinery, apparatus, equipment and appurtenances now or
hereafter belonging to, connected with or used in conjunction with the Premises together with any
and all alterations and additions thereto, in good order, condition and repair, suffering no waste
or injury. Tenant shall, at its sole cost and expense, promptly make all necessary repairs and
replacements, ordinary as well as extraordinary, foreseen as well as unforeseen, in and to the
Premises, including, but not limited to the entire interior and exterior of the Initial
Improvements, any equipment now or hereafter located in or on the Premises, all floors, floor
coverings, roof, structure, windows, glass, plate glass, ceilings, skylights, interior and demising
walls, doors, electrical systems, lighting fixtures and equipment, plumbing systems and fixture,
sprinkler systems, heating, ventilating and air conditioning systems, loading docks, areas and
doors, rail space areas, fences and signs, connections, pipes, mains, water, sewer and connections,
and all other fixtures, machinery, apparatus, equipment and appurtenances now or hereafter
belonging to, connected with or used in conjunction with the Premises. All such maintenance,
repairs and replacements shall be of first class quality and sufficient for the proper maintenance
and operation of the Premises. Tenant shall keep and maintain the Premises safe, secure and clean,
specifically including, but not by way of limitation, removal of waste and
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refuse matter. Tenant shall not permit anything to be done upon the Premises (and shall
perform all maintenance and repairs thereto so as not) to invalidate, in whole or in pan, or
prevent the procurement of any insurance policies which may, at any time, be required under the
provisions of this Lease. Tenant shall not obstruct or permit the obstruction of any parking area,
adjoining street or sidewalk. The foregoing obligations of Tenant shall not be deemed to be a
waiver of Tenant’s rights under Section 4.8 hereof.
Section 8.2. Governmental Requirements. Tenant at its own cost and expense also shall
promptly comply with any and all requirements of any Governmental Authority to or affecting the
Premises or any part thereof, irrespective of the nature of the work required to be done,
extraordinary as well as ordinary, whether or not the same involve or require any structural
changes or additions in or to the Building and irrespective of whether or not such changes or
additions be required on account of any particular use to which the Premises or any part thereof
are being put; provided, however that Tenant’s compliance with any and all requirements of any
Governmental Authority requiring structural changes or additions to the Building shall only be
required of Tenant to the extent required due to Tenant’s particular use, occupancy or alteration
of the Premises. Included in the obligations set forth above, but not in limitation thereof,
Tenant, at its own cost and expense, shall promptly comply with OSHA regulations relating to
overhead cranes (CFR 1910-179(j)(2) and 184(d), CFR 1910-179(j)(3), CFR 1910-l79(e)(l) through (4)
and CFR 1910-179(b)(5)).
Section 8.3. Tenant’s Responsibilities. Landlord shall not be required to furnish any
services or facilities whatsoever to the Premises. Tenant hereby assumes full and sole
responsibility for condition, operation, repair, alteration, improvement, replacement and
maintenance of the Premises. Landlord shall not be responsible for any loss or damage to the
person or property of Tenant, any guests or invitees, any persons using or working on the Premises,
or any persons claiming by, through or under, or any agents, employees, heirs, legal
representatives, successors or assigns of, any of the foregoing.
Section 8.4. Maintenance Contract. At Landlord’s option, Tenant shall enter into a
maintenance contract, in form and substance and with a firm reasonably satisfactory to Landlord,
for the maintenance of the HVAC system in the Building.
ARTICLE IX
Insurance
Section 9.1. Coverage Required. Tenant shall procure and maintain, or cause to be
maintained, at all times during the term of this Lease, at Tenant’s sole cost and expense, and
until each and every obligation of Tenant contained in the Lease has been fully performed, the
types of insurance specified below, with insurance companies authorized to do business in the State
of Illinois covering all operations of Tenant or any member of the Tenant Group under this Lease,
whether performed by Tenant or by Tenant’s contractors. For purposes of this Article IX,
“Contractors” shall mean Tenant and contractors and subcontractors and materialmen or any tier
providing services, material, labor, operation or maintenance on or about the Premises.
A. In General. Upon execution of the Lease, Tenant shall procure and maintain
the following kinds and amounts of insurance:
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(i) Worker’s Compensation and Occupational Disease Insurance. Worker’s
Compensation and Occupational Disease Insurance, in statutory amounts, covering all
Tenant’s employees who provide a service under this Lease. Employer’s liability
coverage with limits of not less than $100,000 each accident or illness
shall be included.
(ii) Commercial Liability Insurance (Primary and Umbrella). Commercial
Liability Insurance or equivalent with limits of not less than $5,000,000
per occurrence, combined single limit, for bodily injury, personal injury, and
property damage liability. Products/completed operation, independent contractors,
broad form property damage and contractual liability coverages are to be included.
Landlord is to be named as additional insureds, on a primary basis for any
liability, arising directly or indirectly from this Lease.
(iii) Automobile Liability Insurance. When any motor vehicles are used
in connection with this Lease, Tenant shall provide Automobile Liability Insurance
with limits of not less than S2,000,000 per occurrence combined single
limit, for bodily and property damage.
(iv) Contents Insurance. Insurance against fire, sprinkler leakage,
vandalism, and the extended coverage perils for the full insurable value of all
contents of Tenant within the Premises, and of all office furniture, trade fixtures,
office equipment, merchandise and all other items of Tenant’s property on the
Premises and business interruption insurance.
B. Construction. During any construction costing in excess of $25,000.00
(other than with respect to the construction of the Initial Improvements by Landlord, but
including improvements, betterments or repairs). Tenant shall procure and maintain, or
cause to be maintained, the following kinds and amounts of insurance:
(i) Worker’s Compensation and Occupational Disease Insurance. Worker’s
Compensation and Occupational Disease Insurance, in statutory amounts, covering all
employees who are to provide a service under this construction. Employer’s
liability coverage with limits of not less than $500,000 for each accident
or illness shall be included.
(ii) Commercial Liability Insurance (Primary and Umbrella). Commercial
Liability Insurance or equivalent with limits of not less than $10,000,000
per occurrence, combined single limit, for bodily injury, personal injury, and
property liability. Products/completed operations, explosion, collapse,
underground, independent contractors, broad form property damage and contractual
liability coverages are to be included. Landlord and Tenant are to be named as
additional insureds on a primary non-contributory basis for any liability arising
directly or indirectly from the Lease.
(iii) Automobile Liability Insurance (Primary and Umbrella). When any
motor vehicles are used in connection with work to be performed, Tenant’s contractor
shall provide Automobile Liability Insurance with
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limits of not less than $5,000,000 per occurrence combined single
limit, for bodily injury and property damage. Landlord is to be named as an
additional insured on a primary non-contributory basis.
(iv) All Risk Builders Risk Insurance. Tenant or Contractor shall
provide All Risk Blanket Builder’s Risk Insurance to cover the materials, supplies,
equipment, machinery and fixtures that are or will be part of the Premises.
Coverage extensions shall include the following: right to partial occupancy,
material stored off-site and in-transit, boiler and machinery, earthquake, flood
(including surface water backup), collapse, water damage, debris removal,
mechanical-electrical breakdown and failure, business interruption, extra expense,
loss of revenue, loss of rents and loss of use of property, as applicable, Landlord
shall be named as loss payee.
(v) Professional Liability. When any architects, engineers, or
consulting firms perform work in connection with this Lease, Professional Liability
Insurance shall be maintained by the applicable architect, engineer or consultant
with limits of $1,000,000. The policy shall have an extended reporting
period of two (2) years. When policies are renewed or replaced, the policy
retroactive date must coincide with, or precede, start of work.
Tenant shall deliver to Landlord, at least fifteen (15) days prior to the earlier of (1) the
Commencement Date of this Lease or (2) the date Tenant takes possession of the Premises, duplicate
copies of policies (or certificates evidencing such policies) of the insurance required by this
Section 9.1. Such policies of insurance shall be renewed and duplicate copies of the new policies
(or new certificates) shall be deposited with Landlord at least forty-five (45) days prior to the
expiration of the old policies.
Section 9.2. Policies. All insurance policies shall be written with insurance
companies and shall be in form reasonably satisfactory to Landlord. All general liability
insurance policies shall name Landlord as an additional insured and shall provide that they may not
be terminated or modified without thirty (30) days’ advance written notice to Landlord. All
policies shall also contain an endorsement that Landlord, although named as additional insured,
shall nevertheless be entitled to recover for damages caused by the negligence of Tenant. The
minimum limits of insurance specified in this Section shall in no way limit or diminish Tenant’s
liability under this Lease. Tenant shall furnish to Landlord, not less than fifteen (15) days
prior to the date such insurance is first required to be carried by Tenant, and thereafter at least
fifteen (15) days prior to the expiration of each such policy, true and correct certificates of
insurance, and such other evidence of coverages as Landlord may reasonably request, and evidence of
payment of all premiums and other expenses owed in connection therewith. Upon Tenant’s default in
obtaining or delivering the certificates for any such insurance or Tenant’s failure to pay the
charges therefor, Landlord may, at its option, on or after the tenth (10th) day after written
notice thereof is given to Tenant, procure or pay the charges for any such policy or policies and
the total cost and expense (including attorneys’ fees) thereof shall be immediately paid by Tenant
to Landlord as Additional Rent upon receipt of a xxxx therefor.
Section 9.3. Subrogation. Landlord and Tenant agree to have all property and material
damage insurance which may be carried by either of them endorsed with a clause
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providing that any release from liability of or waiver of claim for recovery from the other
party or any of the parties named in Section 9.2 above entered into in writing by the insured
thereunder prior to any loss or damage shall not affect the validity of said policy or the right of
the insured to recover thereunder, and providing further that the insurer waives all rights of
subrogation which such insurer might have against the other party or any of the parties named in
Section 9.2 above. Without limiting any release or waiver of liability or recovery contained in
any other Section of this Lease but rather in confirmation and furtherance thereof, Landlord and
any beneficiaries of Landlord waive all claims for recovery from Tenant, and Tenant waives all
claims for recovery from Landlord, any beneficiaries of Landlord and the managing agent for the
Premises and their respective agents, partners and employees, for any loss or damage to any of its
property insurable under valid and collectible insurance policies to the extent of any recovery
collectible under such insurance policies. Notwithstanding the foregoing or anything contained in
this Lease to the contrary, any release or any waiver of claims shall not be operative, nor shall
the foregoing endorsements be required, in any case where the effect of such release or waiver is
to increase the cost thereof (provided that in the case of increased cost the other party shall
have the right, within ten (10) days following written notice, to pay such increased cost, thereby
keeping such release or waiver in full force and effect).
Section 9.4. Miscellaneous Insurance Provisions. Landlord and Tenant further agree as
follows:
A. Tenant and Contractors expressly understand and agree that any insurance coverages
and limits furnished by the Tenant and Contractors shall in no way limit the Tenant’s and
Contractor’s liabilities and responsibilities specified under the Lease, or contracts
executed relating to the Premises, or by law.
B. The failure of Landlord to obtain such evidence from Tenant or Contractors before
permitting Tenant or Contractors to commence work shall not be deemed to be a waiver by
Landlord, and Tenant or contractors shall remain under continuing obligation to maintain the
insurance coverage.
C. Any and all deductibles on referenced insurance coverages shall be borne by Tenant
and Contractors.
D. Tenant expressly understands and agrees that any insurance maintained by Landlord
shall apply in excess of and not contribute with insurance provided by the Tenant or
Contractor under the Lease.
E. If Tenant or any Contractors desire additional coverage, higher limits of liability,
or other modifications for their own protection, Tenant and such Contractors shall be
responsible for the acquisition and cost of such additional protection.
F. Tenant and Contractors shall not violate or permit to be violated any of the
conditions or provisions of any of the insurance policies, and Tenant and Contractors shall
so perform and satisfy or cause to be performed and satisfied the requirements of the
companies writing such policies so that at all times companies of good standing,
satisfactory to Landlord shall be willing to write and continue such insurance.
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G. Landlord shall not be limited in the proof of any damages which Landlord may claim
against Tenant and Contractors arising out of or by reason of Tenant’s and Contractor’s
failure to provide and keep in force insurance, as aforesaid, to the amount of the insurance
premium or premiums not paid or incurred by Tenant and Contractors and which would have been
payable under such insurance, but Landlord shall also be entitled to recover as damages for
such breach the uninsured amount of any loss, to the extent of any deficiency in the
insurance required by the provisions of this Lease, and damages, costs and expenses of suit
suffered or incurred by reason of damage to, or destruction of, the Premises occurring
during any period when Tenant or Contractors shall have failed or neglected to provide
insurance as aforesaid.
H. The insurance required by this Lease, at the option of Tenant or Contractors, may be
effected by blanket or umbrella policies issued to Tenant or Contractors covering the
Premises and other properties owned or leased by Tenant or Contractors, provided that the
policies otherwise comply with the provisions of this Lease and allocate to the Premises the
specified coverage, without possibility of reduction or coinsurance by reason of, or damage
to, any other premises covered therein.
I. All insurance companies shall have a Best rating of not less than A/VII, or an
equivalent rating in the event Best ceases to exist or provide a rating.
J. Tenant and Contractors shall provide and keep in force such other insurance in such
amounts as may from time to time be reasonably required by Landlord or a holder of a
Mortgage (defined in Section 23.1 hereof) against such other insurable hazards as at the
time are commonly insured against in the case of prudent owners of properties similar to the
Premises, and in that connection Landlord may require changes in the forms, types and
amounts of insurance required pursuant to this Section or add to, modify or delete other
requirements.
K. The required insurance to be carried shall not be limited by any limitations
expressed in the indemnification language herein or any limitation placed on the indemnity
therein given as a matter of law.
Section 9.5. Kinds and Amounts. Landlord shall at all times during the Term of this
Lease keep in effect insurance on all improvements now or hereafter a part of the Premises against
loss by fire and lightning, the risks covered by what is commonly known as extended coverage,
malicious mischief and vandalism, and all other risks of direct physical loss (other than the
insurance provided by Tenant hereunder) in an amount equal to the full replacement value on the
replacement form basis, of such improvements. The policy or policies evidencing such insurance
shall be written by a company or companies reasonably satisfactory to Landlord and to Landlord’s
mortgagee, if any, and authorized to do business in the state where the Premises are located, shall
name Landlord as insured thereunder, and shall provide that losses shall be paid to Landlord or its
mortgagee, if applicable. At the request of Landlord, a mortgage clause may be included in said
policies covering Landlord’s mortgagee, if any. Tenant further agrees that if and when obtainable,
Landlord will procure and maintain so-called war risk and war damage insurance, earthquake and
flood insurance on said improvements for not less than one hundred percent (100%) of the full
insurance value above foundation. Such insurance shall provide for payment of loss thereunder to
Landlord and shall, at Landlord’s request, contain a
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mortgage clause in favor of Landlord’s mortgagee, if any. Landlord shall also obtain boiler
and machinery insurance in an amount equal to the full replacement value of the improvements and
insurance against loss of Rents in the amount of all Base Rent payments, taxes, assessments and
insurance premiums required hereunder for a twelve (12)-month period, and shall obtain insurance
against breakage of all plate glass used in the improvements. Landlord shall also maintain such
other insurance required by Landlord under the terms customarily carried by Landlord for other
buildings owned by Landlord in the Chicago metropolitan area.
Section 9.6. Insurance Appraisals. From time to time during the Term hereof upon the
request of Landlord, or Landlord’s mortgagee, if any, Landlord shall obtain insurance appraisals
reasonably satisfactory to Landlord and Tenant, as such are regularly and ordinarily made by or for
the benefit of insurance companies, in order to determine the then replacement value of the
improvements. Such insurance appraisals shall not be required more frequently than once in each
Lease Year during the Term hereof. The cost of such insurance shall be deemed to be a part of the
Insurance Premium (defined below).
Section 9.7. Tenant Payments. All such insurance described in Section 9.5 shall be
kept in full force throughout the Term of this Lease, and any amounts paid therefor by Landlord
(hereinafter collectively referred to as “Insurance
Premiums”) shall be payable by Tenant, as
Additional Rent, in accordance with Sections 6.4. and 6.6. hereof.
ARTICLE X
Damage or Destruction
Section 10.1. Property Demise. In the event the Premises are damaged by fire or other
casualty, then Landlord shall, except during the last year of the Term hereof, proceed with all due
diligence to repair and restore the Premises, subject, however, to extension for Force Majeure
Delays. In such event, Rent shall xxxxx in proportion to the non-useability of the Premises during
the period while repairs are in progress. If the Premises are made untenantable during the last
year of the Term hereof, provided Tenant has not exercised the Renewal Option (defined below),
Landlord shall have the right to terminate this Lease as of the date of fire or other casualty upon
sixty (60) days’ prior notice to Tenant, in which event, Rent shall be apportioned on a per diem
basis and paid to the date of such fire or other casualty.
Section 10.2. Insurance Deductible. In the event of either a total or partial demise
of the Premises, provided Landlord intends to repair or restore the Premises, Tenant shall pay to
Landlord the amount of the deductible under Landlord’s property insurance for the Premises.
ARTICLE XI
Liens
Section 11.1. Lien Claims. Tenant shall not do any act which shall in any way
encumber the interest or estate of Landlord in and to the Premises or any portion thereof, nor
shall any interest or estate of Landlord in the Premises or any portion thereof be in any way
subject to any claim by way of lien or encumbrance, whether by operation of law or by virtue of
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any express or implied contract by Tenant, and any claim to or lien upon the Premises or any
portion thereof arising from any act or omission of Tenant shall accrue only against the leasehold
estate of Tenant and shall in all respects be subject and subordinate to the paramount title and
rights of Landlord in and to the Premises or any portion thereof. Tenant will not permit the
Premises or any portion thereof to become subject to any mechanics’, laborers’ or materialmen’s
lien on account of labor or material furnished to Tenant or claimed to have been furnished to
Tenant in connection with work of any character performed or claimed to have been performed on the
Premises by or at the direction of sufferance of Tenant; provided, however that Tenant shall have
the right to contest in good faith and with reasonable diligence, the validity of any such lien or
claimed lien if Tenant shall first give to Landlord an amount equal to one hundred twenty percent
(120%) of the amount of the lied or claimed lien which, together with interest earned thereon,
shall be held by Landlord as security to insure payment thereof and to prevent any sale,
foreclosure or forfeiture of the Premises by reason of non-payment thereof. The amount so
deposited with Landlord shall be held by Landlord in an account established at a federally insured
banking institution until satisfactory removal of said lien or claim of lien. On any final
determination of the lien or claim for lien, Tenant will immediately pay any judgment rendered,
with all proper costs and charges, and will, at its own expense, have the lien released and any
judgment satisfied. Should Tenant fail to diligently contest and pursue such lien contest,
Landlord may, at its option, use the sums so deposited to discharge any such lien upon the renewal
of such lien or encumbrance Landlord shall pay all such sums remaining on deposit to Tenant.
Section 11.2. Landlord’s Right to Cure. If Tenant shall fail to contest the validity
of any lien or claimed lien or fail to give security to Landlord to insure payment thereof, or
shall fail to prosecute such contest with diligence, or shall fail to have the same released and
satisfy any judgment rendered thereon, then Landlord may, at its election (but shall not be so
required) remove or discharge such lien or claim for lien (with the right, in its discretion, to
settle or compromise the same), and any amounts advanced by Landlord, including reasonable
attorneys’ fees, for such purposes shall be so much additional rent due from Tenant to Landlord at
the next rent date after any such payment, with interest thereon at the Lease Interest Rate from
the date so advanced.
ARTICLE XII
Tenant Alterations
Section 12.1. Alterations. Tenant shall not at any time during the Term of this Lease
make any openings in or other alteration or improvement to the roof or exterior walls of the
Building or make any alteration, addition or improvement to the Premises or any portion thereof
(hereinafter collectively referred to as “Alterations”) without in each instance, the prior written
consent of Landlord; provided, however, upon notice to, but without the requirement of the written
consent of Landlord, Tenant shall have the right to make Alterations to the interior of the
Premises where same are non-structural, do not require openings in or other alteration or
improvement to the roof, exterior walls or other structural components of the Building, do not
adversely affect any Building system, and do not exceed FIFTY THOUSAND AND NO/100 DOLLARS
(550,000.(X)) in the aggregate in any twelve (12)-month period. In the event Tenant requests
Landlord’s consent to make any Alteration which does not involve openings in or other alterations
or improvements to the roof, Landlord shall not unreasonably withhold its consent to
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the Alteration. No Alterations to the Premises for which Landlord’s consent is required shall
be commenced by Tenant until Tenant has furnished Landlord with a satisfactory certificate or
certificates from an insurance company acceptable to Landlord, evidencing insurance coverage
required under Section 9.2 hereof. Any Alterations by Tenant hereunder shall be done in a good and
workmanlike manner in compliance with any Legal Requirements. Upon completion of any Alteration by
Tenant hereunder, Tenant shall furnish Landlord with a copy of the “as built” plans covering such
construction. Tenant, at its sole cost and expense, will make all Alterations on the Premises
which may be necessary by the act or neglect of any other person or corporation (public or
private), except Landlord, its agents, employees or contractors. Before commencing any
Alterations, involving an estimated cost of more than FIFTY THOUSAND AND NO/100 DOLLARS
($50,000.00): (a) plans and specifications therefor, prepared by a licensed architect, shall be
submitted to and approved by Landlord (such approval shall not be unreasonably withheld or
delayed); (b) Tenant shall furnish to Landlord an estimate of the cost of the proposed work,
certified by the architect who prepared such plans and specifications; (c) all contracts for any
proposed work shall be submitted to and subject to the reasonable approval of Landlord; (d)
evidence of insurance as required by Article IX hereof; and (f) such other requirements as Landlord
may reasonably require to be satisfied. Prior to the commencement of any construction activity for
which Landlord’s consent shall be required, certificates of such insurance coverages shall be
provided to Landlord and renewal certificates shall be delivered to Landlord prior to the
expiration date of the respective policies.
Notwithstanding the foregoing, no Alterations of any kind shall be made which would (i) change
the general design, use, character or structure of the Premises or any part thereof; (ii) decrease
the size of the Premises or any part thereof; (iii) reduce or impair, to any material extent, the
value, rentability or usefulness of the Premises or constitute waste; or (iv) give to any owner,
lessee or occupant of any other property or to any other person or corporation any easement,
right-of-way or any other right over the Premises.
Any Alteration shall be made with reasonable dispatch and in a good and workmanlike manner and
in compliance with all applicable permits and authorizations and buildings and zoning laws and with
all other Legal Requirements. If any work does not comply with the provisions of this Lease,
Landlord may, by notice to Tenant, require that Tenant stop the work and take steps necessary to
cause corrections to be made, or Landlord may, itself, perform the work, at Tenant’s cost.
Section 12.2. Ownership of Alterations. All Alterations (except Tenant’s Equipment,
as defined in Section 19.2 hereof), put in at the expense of Tenant shall become the property of
Landlord and shall remain upon and be surrendered with the Premises as a part thereof at the
termination of this Lease, or at Landlord’s option, provided Landlord shall have advised Tenant in
writing at the time of its consent to said Alteration is sought that same must be removed and
restored to its original condition.
Section 12.3. Signs. Tenant shall not place any signs on any part of the Building or
Land without the prior written consent of Landlord which consent shall not be unreasonably
withheld. Upon notice to and with the consent of Landlord, which consent shall not be unreasonably
withheld, Tenant may place exterior signs on the Premises, provided that (i) the installation and
dimensions of said signs are in strict accordance with Legal Requirements and any Reciprocal
Easement Agreements; (ii) Tenant continually maintains said signs in a first-class
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manner and (iii) Tenant, at Tenant’s sole cost and expense, pays the costs associated with the
installation and maintenance of the signs and removes said signs at the expiration of the Term and
restores the area in which said signs are placed to its condition prior to the installation of said
signs.
ARTICLE XIII
Condemnation
Section 13.1. Taking: Lease to Terminate. If a portion of the Premises shall be
lawfully taken or condemned for any public or quasi-public use or purpose, or conveyed under threat
of such condemnation and as a result thereof the Premises cannot be used for the same purpose and
with the same utility as before such taking or conveyance, the Term of this Lease shall end upon,
and not before, the date of the taking of possession by the condemning authority, and without
apportionment of the award. Tenant hereby assigns to Landlord, Tenant’s interest in such award, if
any. Current Rent shall be apportioned as of the date of such termination. If any part of the
Premises shall be so taken or condemned, or if the grade of any street or alley adjacent to the
Premises is changed by any competent authority and such taking or change of grade makes it
necessary to demolish, substantially remodel, or restore the Building, the Landlord shall have the
right to cancel this Lease upon not less than ninety (90) days’ prior notice to the date of
cancellation designed in the notice.
Section 13.2. Taking: Lease to Continue. Except as provided in Section 13.1, in the
event only a part of the Premises shall be taken as a result of the exercise of the power of
eminent domain or condemned for a public or quasi-public use or purpose by any competent authority
or sold to the condemning authority under threat of condemnation, and as a result thereof the
balance of the Premises can be used for the same purpose as before such taking, sale or
condemnation, this Lease shall not terminate and Landlord shall promptly repair and restore the
Premises, subject to Force Majeure Delays; provided that in no event shall Landlord be obligated to
spend in excess of the amount of the Award in restoring the Premises. In the event of a minor
taking for road widening (or similar) no restoration shall be required. Any award paid as a
consequence of such taking, sale or condemnation, shall be paid to Landlord. Any sums not so
disbursed shall be retained by Landlord. In the event of a partial taking of the Building there
shall be an equitable adjustment of the Base Rent.
Section 13.3. Tenant’s Claim. To the extent permitted by law and subject to the
rights of any lender with respect to the Premises, Tenant shall be allowed to pursue a claim
against the condemning authority (hereinafter referred to as the
“Tenant’s Claim”) that shall be
independent of and wholly separate from arty action, suit or proceeding relating to any award to
Landlord for reimbursement of relocation expenses, or for Tenant’s Equipment and personal property,
provided: (i) Tenant’s Claim shall in no way limit, affect, alter or diminish in any kind or way
whatsoever Landlord’s award as a result of such taking, sale or condemnation; (ii) Tenant’s Claim
shall in no event include any claim for any interest in real property, it being expressly
understood and agreed that all sums paid with respect to the real property interests taken, sold or
condemned shall be the sole property of Landlord; and Tenant’s Claim shall in no event be joined
with Landlord’s proceeding or argued or heard concurrently therewith and if the tribunal hearing
Tenant’s Claim orders such joinder, Tenant agrees to voluntarily dismiss or stay Tenant’s Claim
without prejudice until such time as Landlord has received its award for such
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taking, sale or condemnation. Tenant may also pursue a claim against the condemning authority
for the unamortized value of non-removable leasehold improvements installed by Tenant at Tenant’s
sole cost and expense so long as the balance of the award is sufficient to satisfy the sums secured
by any Mortgage.
ARTICLE XIV
Assignment — Subletting by Tenant
Section 14.1. No Assignment, Subletting or Other Transfer. Tenant shall not assign
this Lease or any interest hereunder, nor shall Tenant sublet or permit the use or occupancy of the
Premises or any part thereof by anyone other than Tenant, without the express prior written consent
of Landlord which consent shall not be unreasonably withheld or delayed. Notwithstanding the
foregoing, so long as Tenant is not in default hereunder, Tenant may, upon written notice to
Landlord, (i) assign this Lease to an affiliate or (ii) sublease any unimproved portion of the Land
for agricultural purposes subject to compliance with all Legal Requirements and Reciprocal Easement
Agreements. An “affiliate”, as such term is used herein shall mean an entity which owns or is
owned by Tenant. No assignment or subletting shall relieve Tenant of its obligations hereunder,
and Tenant shall continue to be liable as a principal and not as a guarantor or surety, to the same
extent as though no assignment or sublease had been made, unless specifically provided to the
contrary in Landlord’s consent. Consent by Landlord pursuant to this Article shall not be deemed,
construed or held to be consent to any additional assignment or subletting, but each successive act
shall require similar consent of Landlord. Landlord shall be reimbursed by Tenant for any
reasonable out-of-pocket costs or expenses incurred pursuant to any request by Tenant for consent
to any such assignment or subletting. In the consideration of the granting or denying of consent,
Landlord may, at its option, take into consideration: (i) the business reputation and credit
worthiness of the proposed subtenant or assignee; (ii) any required alteration of the Premises;
(iii) the intended use of the Premises by the proposed subtenant or assignee; and any other factors
which Landlord shall reasonably deem relevant.
Section 14.2. Operation of Law. Tenant shall not allow or permit any transfer of this
Lease, or any interest hereunder, by operation of law, or convey, mortgage, pledge or encumber
(other than in connection with a Tenant corporate asset based financing) this Lease or any interest
hereunder.
Section 14.3. Excess Rental. If Tenant shall, with Landlord’s prior consent as herein
required, sublet the Premises, an amount equal to fifty percent (50%) of the rental (after
deducting reasonable cost of subletting) in excess of the Base Rent and any Additional Rent herein
provided to be paid shall be for benefit of Landlord and shall be paid to Landlord promptly when
due under any such subletting as Additional Rent due hereunder.
Section 14.4. Merger or Consolidation. If Tenant is a corporation whose stock is not
publicly traded, any transaction or series of transactions (including, without limitation, any
dissolution, merger, consolidation or other reorganization of Tenant, or any issuance, sale, gift,
transfer or redemption of any capital stock of Tenant, whether voluntary, involuntary or by
operation of law, or any combination of any of the foregoing transactions) resulting in the
transfer of control of Tenant, shall be deemed to be a voluntary assignment of this Lease by Tenant
subject to the provisions of this Article XIV. If Tenant is a partnership or limited liability
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company, any transaction or series of transactions (including without limitation any
withdrawal or admittance of a partner or member or a change in any partner’s or member’s interest
in Tenant, whether voluntary, involuntary or by operation of law, or any combination of any of the
foregoing transactions) resulting in the transfer of control of Tenant, shall be deemed to be a
voluntary assignment of this Lease by Tenant subject to the provisions of this assignment of this
Lease by Tenant subject to the provisions of this Article XIV. If Tenant is a corporation, a change
or series of changes in ownership of stock which would result in direct or indirect change in
ownership by the stockholders or an affiliated group of stockholders of less than twenty-five
percent (25%) of the outstanding stock as of the date of the execution and delivery of this Lease
shall not be considered a change of control. Notwithstanding the immediately foregoing, Tenant
may, upon notice to, but without Landlord’s consent, assign this Lease to any corporation resulting
from a merger or consolidation of Tenant or the sale of substantially all of the assets or capital
stock of Tenant, provided that the total assets and the total net worth of such assignee after such
consolidation or merger shall be in excess of the greater of (i) the net worth of Tenant
immediately prior to such consolidation or merger, or (ii) the net worth of Tenant as of the date
hereof, determined by generally accepted accounting principles and provided that Tenant is not at
such time in default hereunder, and provided further that such successor shall execute an
instrument in writing, acceptable to Landlord in its reasonable discretion, fully assuming all of
the obligations and liabilities imposed upon Tenant hereunder and deliver the same to Landlord.
Tenant shall provide in its notice to Landlord such information as may be reasonably required by
Landlord to determine that the requirements of this Section 14.4 have been satisfied. As used in
this Section 144, the term “control” means possession of the power to vote not less than a majority
interest of any class of voting securities and partnership or limited liability company interests
or to direct or cause the direction of the management or policies of a corporation, or partnership
or limited liability company through the ownership of voting securities, partnership interests or
limited liability company interests, respectively.
Section 14.5. Unpermitted Transaction. Any assignment, subletting, use, occupancy,
transfer or encumbrance of this Lease or the Premises without Landlord’s prior written consent
shall be of no effect and shall, at the option of Landlord, constitute a default under this Lease.
ARTICLE XV
Financial Statements
Section 15.1. Financial Statements. Tenant agrees to furnish Landlord annually,
within ninety (90) days of the end of such fiscal year with a copy of its annual audited
statements, together with applicable footnotes and any other financial information reasonably
requested by Landlord (hereinafter collectively referred to as the
“Financial Information”) and
agrees that Landlord may deliver such Financial Information to any institutional mortgagee,
prospective institutional mortgagee, prospective purchaser, auditor or security analyst on a
confidential basis.
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ARTICLE XVI
Indemnity for Litigation
Section 16.1. Indemnity for Litigation. Tenant agrees to pay, and to indemnify and
defend Landlord against, all costs and expenses (including reasonable attorneys’ fees) incurred by
or imposed upon Landlord by or in connection with any litigation to which Landlord becomes or is
made a party without fault on Landlord’s part, whether commenced by or against Tenant, or any other
person or entity or that may be incurred by Landlord in enforcing any of the covenants and
agreements of this Lease with or without the institution of any action or proceeding relating to
the Premises or this Lease, or in obtaining possession of the Premises after an Event of Default
hereunder or upon expiration or earlier termination of this Lease. The foregoing notwithstanding,
Tenant’s responsibility under this Section 16.1 to pay Landlord’s costs and expenses (including
reasonable attorneys’ fees) shall not extend to such costs and expenses incurred in defending an
action brought by Tenant to enforce the terms of this Lease in which there is a court determination
that Landlord failed to perform its obligations under this Lease. The provisions of this Section
16.1 shall survive the expiration or earlier termination of this Lease.
Section 16.2. Landlord’s Indemnity. Landlord agrees to pay, and to indemnify and
defend Tenant against all costs and expenses (including reasonable attorney’s fees) incurred by or
imposed upon Tenant by or in connection with any litigation by Tenant to enforce Landlord’s
obligations under this Lease in which Tenant is the prevailing party.
ARTICLE XVII
Estoppel Certificates
Section 17.1. Estoppel Certificate. Tenant agrees that on the Commencement Date and
at any time and from time to time thereafter, upon not less than ten (10) days’ prior written
request by Landlord, it will execute, acknowledge and deliver to Landlord, or Landlord’s mortgagee
to the extent factually accurate, a statement in writing in the form of Exhibit “D” attached hereto
and by this reference incorporated herein; provided, however, Tenant agrees to certify to any
prospective purchaser or mortgagee any other reasonable information specifically requested by such
prospective purchaser or mortgagee. Landlord agrees that, upon not less than ten (10) days’ prior
written request of Tenant, it will execute and deliver to Tenant, to the extent factually accurate,
a statement indicating (i) whether or not this Lease is in full force and effect, (u) the amount of
Base Rent and Rent Adjustment Deposits, (iii) to Landlord’s knowledge whether or not Tenant is in
default under this Lease, and (iv) the date through which Rent has been paid.
ARTICLE XVIII
Inspection of Premises
Section 18.1. Inspections. Tenant agrees to permit Landlord and any authorized
representatives of Landlord, to enter the Premises at all reasonable times on reasonable advance
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notice, for the purpose of inspecting the same. Any such inspections shall be solely for
Landlord’s purposes and may not be relied upon by Tenant or any other person.
Section 18.2. Signs. Tenant agrees to permit landlord and any authorized
representative of Landlord to enter the Premises at all reasonable times during business hours on
reasonable advance notice to exhibit the same for the purpose of sale, mortgage or lease. Landlord
may display on the Premises customary “For Sale” signs and during the final year of the Term hereof
or any extension thereof, Landlord may display on the Premises customary “For Rent” signs.
ARTICLE XIX
Fixtures
Section 19.1. Building Fixtures. All improvements and all plumbing, heating,
lighting, electrical and air-conditioning fixtures and equipment, and other articles of personal
property installed by Landlord and used in the operation of the Premises (as distinguished from
operations incident to the business of Tenant), whether or not attached or affixed to the Premises
(hereinafter referred to as “Building Fixtures”), shall be and remain a part of the Premises and
shall constitute the property of Landlord.
Section 19.2. Tenant’s Equipment. All of Tenant’s trade fixtures and all personal
property, fixtures, apparatus, machinery and equipment now or hereafter located upon the Premises,
other than Building Fixtures, as shall be and remain the personal property of Tenant, and the same
are herein referred to as “Tenant’s Equipment.”
Section 19.3. Removal of Tenant’s Equipment. Tenant’s Equipment may be removed from
time to time by Tenant; provided, however, that if such removal shall injure or damage the
Premises, Tenant shall repair the damage and place the Premises in the same condition as it would
have been if such Tenant’s Equipment had not been installed.
ARTICLE XX
Default
Section 20.1. Events of Default. Tenant agrees that any one or more of the following
events shall be considered “Events of Default” as said term is used herein:
A. If an order, judgment or decree shall be entered by any court adjudicating Tenant a
bankrupt or insolvent, or approving a petition seeking reorganization of Tenant or
appointing a receiver, trustee or liquidator of Tenant, or of all or a substantial part of
its assets, and such order, judgment or decree shall continue unstayed and in effect for any
period of sixty (60) days; or
B. Tenant shall file an answer admitting the material allegations of a petition filed
against Tenant in any bankruptcy, reorganization or insolvency proceeding or under any laws
relating to the relief of debtors, readjustment or indebtedness, reorganization,
arrangements, composition or extension; or
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C. Tenant shall make any assignment for the benefit of creditors or shall apply for or
consent to the appointment of a receiver, trustee or liquidator of Tenant, or of the assets
of Tenant; or
D. Tenant shall file a voluntary petition in bankruptcy, or shall admit in writing its
inability to pay its debts as they come due, or shall file a petition or an answer seeking
reorganization or arrangement with creditors or take advantage of any insolvency law; or
E. A decree or order appointing a receiver of the property of Tenant shall be made and
such decree or order shall not have been vacated within sixty (60) days from the date of
entry or granting thereof; or
F. Tenant shall abandon the Premises during the Term hereof; or
G. Tenant shall default in making any payment of Rent or other payment required to be
made by Tenant hereunder and such default shall continue for a period of five (5) days after
written notice from Landlord to Tenant; or
H. If Tenant shall suffer or permit any lien or encumbrance (subject to Tenant’s right
to contest liens as provided in Section 11.1 hereof) to attach to the Landlord’s interest in
the Premises, and Tenant shall not discharge said lien or encumbrance within thirty (30)
days or within ten (10) days prior to any sale or disposition or forfeiture pursuant to such
execution, whichever date shall first occur; or
I. If Tenant shall fail to carry all required insurance under this Lease; or
J. Any material misrepresentation (including by omission) made by Tenant in this Lease;
or
K. If Tenant shall fail to comply with an order of a court of competent jurisdiction or
proper order of a Governmental Authority within the required time period;
L. Tenant shall repeatedly default in the timely payment of Rent or any portion
thereof, whether or not Tenant shall timely cure any such payment. For purpose of the
foregoing, the occurrence of similar defaults two (2) times during any twelve month period
shall constitute a repeated default; or
M. If Tenant shall default in the performance of any covenant, promise or agreement on
the part of Tenant contained in this Lease not otherwise specified in this Section 20.1 and
such default shall continue for thirty (30) days after notice thereof in writing by Landlord
to Tenant, or if such default or condition which gives rise thereto cannot with due
diligence and good faith be cured within such twenty (30)-day period, if Tenant shall not in
good faith and within the period of thirty (30) days commence the curing of such default and
pursue the curing of such default continuously and diligently and in good faith to the end
that such default shall be cured within such minimum period in excess of thirty (30) days as
may be reasonably necessary to cure such default through pursuing such cure promptly,
diligently, continuously and in good faith; provided, however, that such additional period
beyond thirty (30) days shall not apply to a default
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that creates a clear and present danger to persons or property or materially adversely
affects the Premises, or if the failure or default by Tenant is one for which Landlord (or
any officer or other agent or beneficial or other owner thereof) may be subject to fine or
imprisonment.
Upon the occurrence of any one or more of such Events of Default, Landlord may at its election
terminate this Lease or terminate Tenant’s right to possession only, without terminating this
Lease. Upon termination of this Lease or of Tenant’s right to possession, Tenant shall immediately
surrender possession and vacate the Premises, and deliver possession thereof to Landlord, and
Landlord or Landlord’s agents may immediately or any time thereafter without notice, re-enter the
Premises and remove all persons and all or any property therefrom, either by any suitable action or
proceeding at law or equity, without being liable in indictment, prosecution or damages, therefor,
and repossess and enjoy the Premises, together with the right to receive all income of, and from,
the Premises.
Upon termination of this Lease, Landlord shall be entitled to recover as liquidated damages,
because the parties hereto recognize that as of the date hereof actual damages are not
ascertainable and are of imprecise calculation and not as a penalty, (i) all Rent and other sums
due and payable by Tenant through the date of termination plus (ii) an amount (the “Liquidated
Damage Amount”) equal to the difference between (a) the then present value of the aggregate Rent
and other sums provided herein to be paid by Tenant for the residue of the Term (assuming Landlord
had not terminated this Lease) minus (b) the then present value of the aggregate then rental value
of the Premises for the remainder of the term of the Lease (taking into consideration the time and
expense to relet the Premises) plus (iii) the costs of performing any other covenants to be
performed by Tenant and Landlord’s costs to decorate or make any repairs, changes, alterations or
additions in or to the Premises as may be necessary or desirable. The present value referenced to
herein shall be computed based upon a discount rate equal to the Corporate Base Rate.
If Landlord elects to terminate Tenant’s right to possession only, without terminating this
Lease, Landlord may, at Landlord’s option, enter into the Premises, remove Tenant’s signs and other
evidences of tenancy, and take and hold possession thereof as hereinabove provided, without such
entry and possession terminating this Lease or releasing Tenant, in whole or in part, from Tenant’s
obligations to pay the Rent hereunder for the full Term or from any other obligations of Tenant
under this Lease. Landlord shall use commercially reasonable efforts to relet all or any part of
the Premises for such rent and upon terms as are commercially reasonable (including the right to
relet the Premises for a term greater or lesser than that remaining of the Term and the right to
relet the Premises as a part of a larger area, the right to change the character or use made of the
Premises and the right to grant concessions of free rent). For the purpose of such reletting,
Landlord may decorate or make any repairs, changes, alterations, or additions in or to the Premises
that may be necessary or desirable. If Landlord is unable to relet the Premises after using such
commercially reasonable efforts to do so, Landlord shall have the right to terminate this Lease, in
which event, Tenant shall pay to Landlord liquidated damages (because the parties hereto recognize
that as of the date hereof actual damages are not ascertainable and are of imprecise calculation
and not as a penalty) equal to the Liquidated Damage Amount. If the Premises are relet and
sufficient sums shall not be realized from such reletting after payment of all expenses of such
decorations, repairs, changes, alterations, additions and the expenses of repossession and such
reletting, and the collection of
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the Rent herein provided and other payments required to be made by Tenant under the provisions
of this Lease for the remainder of the Term of this Lease then, in such event, Tenant shall pay to
Landlord on demand any such deficiency and Tenant agrees that Landlord may file suit to recover any
sums falling due under the terms of this Section from time to time, and all costs and expenses of
Landlord, including attorneys’ fees, incurred in connection with any such suit shall be paid by
Tenant.
If the Premises are relet and sufficient sums shall not be realized from such reletting after
payment of all expenses of such decorations, repairs, changes, alterations, additions and the
expenses of repossession and such reletting, and the collection of the Rent herein provided and
other payments required to be made by Tenant under the provisions of this Lease for the remainder
of the Term of this Lease then, in such event, Tenant shall pay to Landlord on demand any such
deficiency and Tenant agrees that Landlord may file suit to recover any sums falling due under the
terms of this Section from time to time, and all costs and expenses of Landlord, including
attorneys’ fees, incurred in connection with any such suit shall be paid by Tenant.
Section 20.2. Waivers. Tenant hereby expressly waives, so far as permitted by law,
the service of any notice of intention to re-enter provided for in any statute, and except as is
herein otherwise provided. Tenant for and on behalf of itself and all persons claiming through or
under Tenant, also waives any and all rights of redemption or re-entry or repossession in case
Tenant shall be dispossessed by a judgment or by warrant of any court or judge or in case of
re-entry or repossession by Landlord or in case of any expiration or termination of this Lease.
The terms “enter”, “re-enter”, “entry” or “re-entry”, as used in this Lease, are not restricted to
their technical legal meanings.
Section 20.3. Bankruptcy. If Landlord shall not be permitted to terminate this Lease,
as provided in this Article XX because of the provisions of the United States Code relating to
Bankruptcy, as amended (hereinafter referred to as the “Bankruptcy Code”), then Tenant as a
debtor-in-possession or any trustee for Tenant agrees promptly, within no more than sixty (60) days
after the filing of the bankruptcy petition, to assume or reject this Lease. In such event, Tenant
or any trustee for Tenant may only assume this Lease if: (a) it cures or provides adequate
assurances that the trustee will promptly cure any default hereunder; (b) compensates or provides
adequate assurance that Tenant will promptly compensate Landlord of any actual pecuniary loss to
Landlord resulting from Tenant’s default; and (c) provides adequate assurance of performance during
the fully stated term hereof of all of the terms, covenants, and provisions of this Lease to be
performed by Tenant. In no event after the assumption of this Lease shall any then-existing
default remain uncured for a period in excess of the earlier of ten (10) days or the time period
set forth herein. Adequate assurance of performance of this Lease, as set forth hereinabove, shall
include, without limitation, adequate assurance: (i) of the source of rent reserved hereunder; and
(ii) that the assumption of this Lease will not breach any provision hereunder.
If Tenant assumes this Lease and proposes to assign the same pursuant to the provisions of the
Bankruptcy Code to any person or entity who shall have made a bona fide offer to accept an
assignment of this Lease on terms acceptable to Tenant, then notice of such proposed assignment,
setting forth: (i) the name and address of such person; (ii) all of the terms and conditions of
such offer, and (iii) the adequate assurance to be provided Landlord to assure
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such person’s future performance under the Lease, including, without limitation, the assurance
referred to in Section 365(b)(3) of the Bankruptcy Code, shall be given to Landlord by the Tenant
no later than twenty (20) days after receipt by the Tenant but in any event no later than ten (10)
days prior to the date that the Tenant shall make application to a court of competent jurisdiction
for authority and approval to enter into such assignment and assumption, and Landlord shall
thereupon have the prior right and option, to be exercised by notice to the Tenant given at any
time prior to the effective date of such proposed assignment, to accept an assignment of this Lease
upon the same terms and conditions and for the same consideration, if any, as the bona fide offer
made by such person, less any brokerage commissions which may be payable out of the consideration
to be paid by such person for the assignment of this Lease.
If this Lease is assigned to any person or entity pursuant to the provisions of the Bankruptcy
Code any and all monies or other considerations payable or otherwise to be delivered to Landlord,
shall be and remain the exclusive property of Landlord and shall not constitute property of Tenant
or of the estate of the Tenant within the meaning of the Bankruptcy Code. Any and all monies or
other considerations constituting the Landlord’s property under the preceding sentence not paid or
delivered to the Landlord shall be held in trust for the benefit of Landlord and shall be promptly
paid to the Landlord.
Any person or entity to which this Lease is assigned pursuant to the provisions of the
Bankruptcy Code shall be conclusively deemed without further act or deed to have assumed all of the
obligations arising under this Lease on and after the date of such assignment. Any such assignee
shall upon demand execute and deliver to Landlord an instrument confirming such assumption. Any
such assignee shall be permitted to use the Leased Premises only for the Use.
Nothing contained in this Section shall, in any way, constitute a waiver of the provisions of
Article XIV of this Lease relating to alienation. Tenant shall not, by virtue of this Section,
have any further rights relating to assignment other than those granted in the Bankruptcy Code.
Notwithstanding anything in this Lease to the contrary, all amounts payable by Tenant to or on
behalf of Landlord under this Lease, whether or not expressly denominated as rent, shall constitute
rent for the purpose of Section 501(b)(6) or any successive section of the Bankruptcy Code.
Section 20.4. Re-entry. Tenant agrees, upon receipt of notice of termination, to at
once surrender possession of the Premises, and related improvements to Landlord. Tenant expressly
waives (to the full extent permitted by law) the service of any other notice of intention to
terminate this Lease or of intention to re-enter which may be presently provided for by any statute
or other law or any future amendment or similar statute or law (so long as, in the case of a future
amendment or statute or law, the remedies to be exercised by Landlord are not substantially
different than remedies presently available to Landlord). No receipt of money by Landlord from
Tenant after any termination, howsoever occurring, of this Lease shall reinstate, continue or
extend the Term of this Lease.
Section 20.5. No Waiver. The specified remedies to which Landlord may resort under
the terms of this Lease are cumulative and are not intended to be exclusive of any other remedies
or means of redress to which Landlord may be lawfully entitled in case of any breach or threatened
breach by Tenant of any provision of this Lease. The failure of Landlord to insist in any one or
more cases upon the strict performance of any of the covenants of this Lease or to
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exercise any option herein contained or right to approval or consent shall not be construed as
a waiver or a relinquishment for the future application and enforcement of such covenant or option
or right to approve or consent. A receipt by Landlord of Rent or any other charges payable by
Tenant hereunder with knowledge of the breach of any covenant hereof shall not be deemed a waiver
of such breach, and no waiver by Landlord of any provision of this Lease shall be deemed to have
been made unless expressed in writing and signed by Landlord. In addition to the other remedies in
this Lease provided, Landlord shall be entitled to the restraint by injunction of the violation, or
attempted or threatened violation, of any of the covenants, conditions or provisions of this Lease
or to a decree compelling performance of any of the covenants, conditions or provisions of this
Lease.
ARTICLE XXI
Landlord’s Performance of Tenant’s Covenants
Section 21.1. Landlord’s Right to Perform Tenant’s Obligations. In the event Tenant
shall fail to maintain any insurance required to be paid by it under the terms hereof, or in an
Emergency Situation or upon occurrence of an Event of Default, Landlord may (but shall not be
obligated so to do), and without waiving or releasing Tenant from any obligation of Tenant
hereunder, make any payment or perform any other act which Tenant is obligated to make or perform
under this Lease in such manner and to such extent as Landlord may deem desirable; and in so doing
Landlord shall also have the right to enter upon the Premises for any purpose reasonably necessary
in connection therewith and to pay or incur any other necessary and incidental costs and expenses,
including reasonable attorneys’ fees. All sums so paid and all liabilities so incurred by
Landlord, together with interest thereon at the rate per annum which is the lesser of (i) the Lease
interest Rate or (ii) the highest rate permitted by law shall be deemed Additional Rent hereunder
and shall be payable to Landlord upon demand as Additional Rent. Landlord shall use reasonable
efforts to give prior notice (which may be oral) of its performance, if reasonably feasible under
the circumstances. The performance of any such obligation by Landlord shall not constitute a waiver
of Tenant’s default in failing to perform the same. Inaction of Landlord shall never be considered
as a waiver of any right accruing to it pursuant to this Lease. Landlord, in making any payment
hereby authorized: (a) relating to Taxes, may do so according to any xxxx, statement or estimate,
without inquiry into the validity of any tax, assessment, sale, forfeiture, tax lien or title or
claim thereof; (b) for the discharge, compromise or settlement of any lien, may do so without
inquiry as to the validity or amount of any claim for lien which may be asserted; or (c) in
connection with the completion of construction of improvements to the Premises or the repair,
maintenance or the payment of operating costs thereof, may do so in such amounts and to such
persons as Landlord reasonably may deem appropriate. Nothing contained herein shall be construed
to require Landlord to advance monies for any purpose. Landlord shall not in any event be liable
for inconvenience, annoyance, disturbance, loss of business or other damage of Tenant or any other
occupant of the Premises or any part thereof, by reason of making repairs or the performance of any
work on the Premises or on account of bringing materials, supplies and equipment into or through
the Premises during the course thereof and the obligations of Tenant under this Lease shall not
thereby be affected in any manner. In doing so, however, Landlord shall use reasonable efforts not
to interfere with the normal operation of the Premises. The term “Emergency Situation” shall mean
a situation which has caused or is likely to cause bodily injury to persons, contamination of or
physical damage to the Premises or adjoining property or criminal jeopardy to Landlord.
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ARTICLE XXII
Exercise of Remedies
Section 22.1. Cumulative Remedies. No remedy contained herein or otherwise conferred
upon or reserved to Landlord, shall be considered exclusive of any other remedy, but the same shall
be cumulative and shall be in addition to every other remedy given herein, now or hereafter
existing at law or in equity or by statute, and every power and remedy given by this Lease to
Landlord may be exercised from time to time and as often as occasion may arise or as may be deemed
expedient. No delay or omission of Landlord to exercise any right or power arising from any
default shall impair any such right or power or shall be construed to be a waiver of any such
default or an acquiescence therein.
Section 22.2. No Waiver. No waiver of any breach of any of the covenants of this
Lease shall be construed, taken or held to be a waiver of any other breach, or a waiver,
acquiescence in or consent to any further or succeeding breach of the same covenant. The
acceptance by Landlord of any payment of Rent or other sums payable hereunder after the termination
by Landlord of this Lease or of Tenant’s right to possession hereunder shall not, in the absence of
agreement in writing to the contrary by Landlord, be deemed to restore this Lease or Tenant’s right
to possession hereunder, as the case may be, but shall be construed as a payment on account and not
in satisfaction of damages due from Tenant to Landlord. Receipt of Rent by Landlord, with
knowledge of any breach of this Lease by Tenant or of any default by Tenant in the observance or
performance of any of the conditions or covenants of this Lease, shall not be deemed to be a waiver
of any provision of this Lease.
Section 22.3. Equitable Relief. In the event of any breach or threatened breach by
Tenant of any of the agreements, terms, covenants or conditions contained in this Lease, Landlord
shall be entitled to enjoin such breach or threatened breach and shall have the right to invoke any
right and remedy allowed at law or in equity or by statute or otherwise as though re-entry, summary
proceedings, and other remedies were not provided for in this Lease.
ARTICLE XXIII
Subordination to Mortgages
Section 23.1. Subordination. Landlord may execute and deliver a mortgage or trust
deed in the nature of a mortgage (“Mortgage”) against its interest in the Premises or any portion
thereof. This Lease and all of the rights of Tenant hereunder, shall automatically, and without
the requirement of the execution of any further documents, be and are hereby made expressly subject
and subordinate at all times to the lien of any Mortgage and to all advances made or hereafter to
be made upon the security thereof; provided the holder of said Mortgage agrees in writing not to
disturb the rights of Tenant under this Lease so long as Tenant is not in default hereunder.
Notwithstanding the foregoing, Tenant agrees to execute and deliver such instruments subordinating
this Lease to the lien of any such Mortgage as may be requested in writing by Landlord from time to
time. Notwithstanding anything to the contrary contained herein, any mortgagee under a Mortgage
may, by notice in writing to the Tenant, subordinate its Mortgage to this Lease.
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Section 23.2. Mortgage Protection. Tenant agrees to give the holder of any Mortgage,
by registered or certified mail, a copy of any notice of default served upon the Landlord by
Tenant, provided that prior to such notice Tenant has received notice (by way of service on Tenant
of a copy of an assignment of rents and leases, or otherwise) of the address of such mortgagee and
containing a request therefor. Tenant further agrees that if Landlord shall have failed to cure
such default within the time provided for in this Lease, then said mortgagee shall have an
additional thirty (30) days after receipt of notice thereof within which to cure such default or,
if such default cannot be cured within that time, then such additional time as may be necessary,
if, within such thirty (30) days, any mortgagee has commenced and is diligently pursuing the
remedies necessary to cure such default (including but not limited to commencement of foreclosure
proceedings, if necessary to effect such cure). Such period of time shall be extended by any
period within which such mortgagee is prevented from commencing or pursuing such foreclosure
proceedings by reason of Landlord’s bankruptcy. Until the time allowed as aforesaid for said
mortgagee to cure such defaults has expired without cure, Tenant shall have no right to, and shall
not, terminate this Lease on account of default. This Lease may not be modified or amended so as
to reduce the Rent or shorten the Term, or so as to adversely affect in any other respect to any
material extent the rights of the Landlord, nor shall this Lease be cancelled (except as a result
of the exercise of remedies after an event of default as provided in this Lease) or surrendered,
without the prior written consent, in each instance, of the mortgagee.
ARTICLE XXIV
Indemnity and Waiver
Section 24.1. Indemnity. Tenant shall not do or permit any act or thing to be done or
omit to do any act or thing upon the Premises which may subject Landlord to any liability or
responsibility for injury, damage to persons or property, or to any liability by reason of any
violation of Legal Requirements and shall exercise such control over the Premises so as to fully
protect Landlord against any such liability. Tenant shall defend, indemnify and save Landlord, and
any official, agent, beneficiary, contractor, director, employee, lessor, mortgagee, officer,
parent, partner, shareholder and trustee of Landlord (each an “Indemnified Party”) representatives,
successors and assigns harmless from and against any and all liabilities, suits, judgments,
settlements, obligations, fines, damages, penalties, claims, costs, charges and expenses,
including, without limitation, engineers’, architects’ and attorneys’ fees, court costs and
disbursements, which may be imposed upon or incurred by or asserted against any Indemnified Party
by reason of any of the following occurring during or after (but attributable to a period of time
falling within) the Term:
A. any demolition or razing or construction of any improvements or any other work or
thing done in, on or about the Premises or any part thereof by Tenant or any member of the
Tenant Group;
B. any use, nonuse, possession, occupation, alteration, repair, condition, operation,
maintenance or management of the Premises or any part thereof or of any tunnel, creek,
ditch, detention area, sidewalk, curb or vault adjacent thereto by Tenant or any member of
the Tenant Group;
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C. any act or failure to act on the part of Tenant or any member of the Tenant Group;
D. any accident, injury (including death) or damage to any person or property occurring
in, on or about the Premises or any part thereof or in, on or about any tunnel, creek,
ditch, detention area, sidewalk, curb or vault adjacent thereto as a result of the act or
neglect of Tenant or any member of the Tenant Group;
E. any failure to perform or comply with any of the covenants, agreements, terms or
conditions in this Lease on Tenant’s part to be performed or complied with (other than the
payment of money);
F. any lien or claim which may be alleged to have arisen against or on the Premises, or
any lien or claim which may be alleged to have arisen out of this Lease and created or
permitted to be created by Tenant or any member of the Tenant Group against any assets of
Landlord, or any liability which may be asserted against Landlord with respect thereto;
G. any failure on the part of Tenant to keep, observe and perform any of the terms,
covenants, agreements, provisions, conditions or limitations contained in the contracts and
agreements affecting the Premises on Tenant’s part to be kept, observed or performed; and
H. any contest permitted pursuant to the provisions of this Lease.
No agreement or covenant of Tenant in this Section 24.1 shall be deemed to exempt Landlord
from, and Tenant’s obligations under this Section 24.1 shall not include liability or damages for
injury to persons or damage to property caused by or resulting from the negligence of Landlord, its
agents or employees, in the operation or maintenance of the Premises.
The obligations of Tenant under this Section 24.1 shall not be affected in any way by the
absence in any case of covering insurance or by the failure or refusal of any insurance carrier to
perform any obligation on its part under insurance policies affecting the Premises or arty part
thereof.
Section 24.2. Waiver of Claims. Tenant waives all claims it may have against Landlord
and Landlord’s agents for damage or injury to person or property sustained by Tenant or any member
of the Tenant Group or by any occupant of the Premises resulting from any part of the Premises
becoming out of repair, or resulting from any accident on or about the Premises or resulting
directly or indirectly from any act or neglect of any person (excluding Landlord). This Section
24.2 shall include, but not by way of limitation, damage caused by water, snow, frost, steam,
excessive heat or cold, sewage, gas, odors, or noise, or caused by bursting or leaking pipes or
plumbing fixtures, and shall apply equally whether any such damage results from the act or neglect
of Tenant (excluding Landlord), and whether such damage be caused or result from anything or
circumstance above mentioned or referred to, or to any other thing or circumstance whether of a
like nature or of a wholly different nature. All Tenant’s Equipment and other personal property
belonging to Tenant or any occupant of the Premises that is in or on
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any part of the Premises shall be there at the risk of Tenant or of such other person only,
and Landlord shall not be liable for any damage thereto or for the theft or misappropriation
thereof.
ARTICLE XXV
Surrender
Section 25.1. Condition. Upon the termination of this Lease whether by forfeiture,
lapse of time or otherwise, or upon the termination of Tenant’s right to possession of the
Premises, Tenant will at once surrender and deliver up the Premises to Landlord, broom clean, in
good order, condition and repair, reasonable wear and tear and damage by casualty excepted. “Broom
clean” means free from all debris, dirt, rubbish, personal property of Tenant, inside and outside
of the Building and on the grounds comprising the Premises. Any damage caused by removal of Tenant
from the Premises, including any damages caused by removal of Tenant’s Equipment, as herein
defined, shall be repaired and paid for by Tenant prior to the expiration of the Term.
All Alterations temporary or permanent, excluding Tenant’s Equipment, in or upon the Premises
placed there by Tenant, shall become Landlord’s property and shall remain upon the Premises upon
such termination of this Lease by lapse of time or otherwise, without compensation or allowance or
credit to Tenant, unless Landlord has requested their removal pursuant to Section 12.2. If
Landlord so requests removal of said additions, hardware, alterations or improvements and Tenant
does not make such removal by the termination of this Lease, or within ten (10) days after such
request, whichever is later, Landlord may remove the same and deliver the same to any other place
of business of Tenant or warehouse same, and Tenant shall pay the cost of such removal, delivery
and warehousing to Landlord on demand.
Section 25.2. Removal of Tenant’s Equipment. Upon the termination of this Lease by
lapse of time, or otherwise, Tenant may remove Tenant’s Equipment provided, however, that Tenant
shall repair any injury or damage to the Premises which may result from such removal. If Tenant
does not remove Tenant’s Equipment from the Premises prior to the end of the Term, however ended,
Landlord may, at its option, remove the same and deliver the same to any other place of business of
Tenant or warehouse the same, and Tenant shall pay the cost of such removal (including the repair
of any injury or damage to the Premises resulting from such removal), delivery and warehousing to
Landlord on demand, or Landlord may treat tenant’s equipment as having been conveyed to Landlord
with this Lease as a Xxxx of Sale, without further payment or credit by Landlord to Tenant.
Section 25.3. Holdover. If Tenant retains possession of the Premises or any part
thereof after the termination of the Term, by lapse of time and otherwise, then Tenant shall pay to
Landlord monthly rent, for the first thirty (30) days at one hundred twenty percent (120%) of the
rate payable for the month immediately preceding said holding over (including increases for
Additional Rent which Landlord may reasonably estimate) and thereafter at one hundred fifty percent
(150%) of the rate payable for the month immediately preceding said holding over (including
increases for Additional Rent which Landlord may reasonably estimate). All such rent shall be
computed on a per-month basis, for each month or part thereof (without reduction for any such
partial month) that Tenant thus remains in possession, and in addition thereto, Tenant shall pay
Landlord all damages, consequential as well as direct, sustained by reason of
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Tenant’s retention of possession. Alternatively, at the election of Landlord expressed in a
written notice to Tenant and not otherwise, in the event that Tenant retains possession of the
Premises for more than sixty (60) days after the expiration of the Term, such retention of
possession shall constitute a renewal of this Lease for six (6) months, at a rental equal to one
hundred twenty percent (120%) of the Rent during the previous year. The provisions of this
paragraph do not exclude the Landlord’s rights of re-entry or any other right hereunder. Any such
extension or renewal shall be subject to all other terms and conditions herein contained.
ARTICLE XXVI
Covenant of Quiet Enjoyment
Section 26.1. Covenant of Quiet Enjoyment. Landlord covenants that Tenant, on paying
the Rent and all other charges payable by Tenant hereunder, and on keeping, observing and
performing all the other terms, covenants, conditions, provisions and agreements herein contained
on the part of Tenant to be kept, observed and performed, all of which obligations of Tenant are
independent of Landlord’s obligations hereunder, shall, during the Term, peaceably and quietly
have, hold and enjoy the Premises subject to the terms, covenants, conditions, provisions and
agreement hereof free from hindrance by Landlord or any person claiming by, through or under
Landlord.
ARTICLE XXVII
Recording
Section 27.1. Recording. Tenant may, at its sole cost and expense, record a
memorandum hereof in a form reasonably acceptable to Landlord and Landlord agrees to sign any such
memorandum.
ARTICLE XXVIII
Notices
Section 28.1. Notices. All notices, consents, approvals to or demands upon or by
Landlord or Tenant desired or required to be given under the provisions hereof, shall be in
writing. Any notices or demands from Landlord to Tenant shall be deemed to have been duly and
sufficiently given if a copy thereof has been personally served, forwarded by expedited messenger
or recognized overnight courier service with evidence of delivery or mailed by United States
registered or certified mail in an envelope properly stamped and addressed to Tenant at Tenant’s
Mailing Address, or at such other address as Tenant may theretofore have furnished by written
notice to Landlord. Any notices or demands from Tenant to Landlord shall be deemed to have been
duly and sufficiently given if forwarded by expedited messenger or recognized overnight courier
service with evidence of delivery or mailed by United States registered or certified mail in an
envelope properly stamped and addressed to Landlord at Landlord’s Mailing Address, with a copy to
Xxxx X. Xxxxxxxx, Xxxx Xxxxxxx & Xxxxxxxx, 000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx
00000, or at such other address as Landlord may theretofore have furnished by written notice to
Tenant. The effective date of any such notice shall be the date of
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actual delivery, except that if delivery is refused, the effective date of notice shall be the
date delivery is refused.
ARTICLE XXIX
Covenants Run with Land
Section 29.1. Covenants. All of the covenants, agreements, conditions and
undertakings in this Lease contained shall extend and inure to and be binding upon the heirs,
executors, administrators, successors and assigns of the respective parties hereto, the same as if
they were in every case specifically named, and shall be construed as covenants running with the
Land, and wherever in this Lease reference is made to either of the parties hereto, it shall be
held to include and apply to, wherever applicable, the heirs, executors, administrators, successors
and assigns of such party. Nothing herein contained shall be construed to grant or confer upon any
person or persons, firm, corporation or governmental authority, other than the parties hereto,
their heirs, executors, administrators, successors and assigns, any right, claim or privilege by
virtue of any covenant, agreement, condition or undertaking in this Lease contained.
Section 29.2. Release of Landlord. The term “Landlord” as used in this Lease, so far
as covenants or obligations on the part of Landlord are concerned, shall be limited to mean and
include only the owner or owners at the time in question of fee title to the Premises, and in the
event of any transfer or transfers of the title, Landlord herein named (and in the case of any
subsequent transfers or conveyances, the then grantor) shall be automatically freed and relieved,
from and after the date of such transfer or conveyance, of all personal liability as respects the
performance of any covenants or obligations on the part of Landlord contained in this Lease
thereafter to be performed; provided that any funds in the hands of such landlord or the then
grantor at the time of such transfer, in which Tenant has an interest, shall be turned over to the
grantee.
ARTICLE XXX
Environmental Matters
Section 30.1. Defined Terms.
A. The term “Hazardous Materials”, when used herein, shall include, but shall not be limited
to, any substances, materials or wastes that are regulated by any local governmental authority, the
state where the Premises or the Premises is located, or the United States of America because of
toxic, flammable, explosive, corrosive, reactive, radioactive or other properties that may be
hazardous to human health or the environment, including without limitation, above or underground
storage tanks, flammables, explosives, radioactive materials, radon, petroleum and petroleum
products, petroleum products (other than petroleum products that are normally contained in motor
vehicles to the extent such products are not released), urea formaldehyde foam insulation, methane,
lead-based paint, polychlorinated biphenyl compounds, hydrocarbons or like substances and their
additives or constituents, pesticides and any other special, toxic or hazardous materials, wastes,
substances or materials of any kind, including without limitation, those now or hereafter defined,
determined or identified as “hazardous
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substances,” “hazardous materials,” “toxic substances” or “hazardous wastes” in any
Environmental Law.
B. “Environmental Law” shall mean any Federal, state or local law, statute, ordinance, code,
rule, regulation, policy, common law, license, authorization, decision, order, injunction, which
pertains to health, safety, any Hazardous Material, or the environment (including but not limited
to ground or air or water or noise pollution or contamination, and underground or above-ground
tanks) and shall include, without limitation, the Resource Conservation and Recovery Act (“RCRA”),
42 U.S.C. §6901 et seq., as amended by the Hazardous and Solid Waste Amendments of 1984;
the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. §9601
et seq. (“CERCLA”), as amended by the Superfund Amendments and Reauthorization Act of 1986
(“XXXX”); the Hazardous Materials Transportation Act, 49 U.S.C. § 1801 e t seq.; the Federal Water
Pollution Xxxxxxx Xxx, 00 X.X.X. §0000 et seq.; the Clean Air Act, 42 U.S.C. §7401 et
seq.; the Toxic Substances Xxxxxxx Xxx, 00 X.X.X. §0000 et seq.; the Safe Drinking
Xxxxx Xxx, 00 X.X.X. §000x et seq.; the Illinois Environmental Protective Act, 415 ILSC
4/1 et seq.; the Clean Air Act (42 X.X.X. §0000 et seq., “CAA”); the Rivers and Harbors
Act, (33 U.S.C. §401 et seq., “RHA”); the Emergency Planning and Community Right-to-Know
Act of 1986 (41 U.S.C. 11001 et seq., “EPCRA”), the Federal Insecticide, Fungicide and
Rodenticide Act (7 U.S.C. 136 to 136y); the Oil Pollution Act of 1990 (33 U.S.C. 2701 et
seq., “OPA”); and the Occupational Safety and Health Act (29 U.S.C. 651 et seq.,
“OSHA”); and any other local, state or federal environmental statutes, and all rules, regulations,
orders and decrees now or hereafter promulgated under any of the foregoing, as any of the foregoing
now exist or may be changed or amended or come into effect in the future.
C. “Environmental Claim” shall mean and include any demand, notice of violation, inquiry,
cause of action, proceeding or suit for damages (including reasonable attorneys’ and experts’
fees), losses, injuries to person or property, damages to natural resources, fines, penalties,
interest, cost recovery, compensation, or contribution resulting from or in any way arising in
connection with any Hazardous Material or any Environmental Law.
D. “Pre-Existing Condition” shall mean the presence of any Hazardous Material on the Premises,
to the extent such Hazardous Material was not introduced onto the Premises after the Commencement
Date.
E. “Environmental Condition” shall mean the existence of any Hazardous Material on the
Premises other than a Pre-Existing Condition, (i) in violation of, or requiring cleanup under, any
Environmental Law or the provisions of this Article XXX; or (ii) which subjects Landlord to
liability for any Environmental Claim or which must be remediated to prevent Landlord from
incurring liability as a result of such Environmental Claim.
F. “Environmental Remediation” shall mean any investigative, cleanup, removal, containment,
remedial or other action relating to an Environmental Condition (i) required pursuant to any
Environmental Law, or (ii) necessary to prevent Landlord from incurring, or relieve Landlord from,
liability as a result of an Environmental Claim.
G. “Remediating Party” shall mean that party which has elected (or is deemed to have elected)
to perform any Environmental Remediation.
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Section 30.2. Tenant’s Covenants with Respect to Environmental Matters. During the
Term, Tenant, at its sole cost and expense, shall:
A. comply with all Environmental Laws relating to the use and operation of the
Premises;
B. keep the Premises free of Hazardous Materials; provided, however, that Tenant may
use Hazardous Materials incidental to the operation of Tenant’s business used in accordance
with all Environmental Laws and this Lease;
C. not exacerbate a Pre-Existing Condition of which Landlord has notified Tenant;
D. in the case of an Environmental Condition:
(1) promptly, but not later than ten (10) business days after the discovery of
an Environmental Condition, notify Landlord of the Environmental Condition;
(2) furnish a letter of credit, personal guaranty, escrow of funds or other
security reasonably acceptable to Landlord to secure performance of Environmental
Remediation and to assure Landlord that all necessary funds are readily available to
Landlord to pay the costs and expenses of Environmental Remediation;
(3) submit to Landlord for review and approval prior to commencement of any
Environmental Remediation, a proposed scope of work and timetable therefor, and
provide Landlord with a cost estimate for same;
(4) diligently perform Environmental Remediation, as approved by Landlord which
approval shall not be unreasonably withheld;
(5) submit to Landlord in a timely manner for review and comment the
documentation and information required by Sections 30.5 and 30.6 relating to each
phase of the Environmental Remediation, including proof satisfactory to Landlord at
the conclusion of the work of proper implementation, and pay all costs of Landlord
described in Section 30.12(C); and
(6) comply with applicable release reporting requirements and provide Landlord
with any information necessary to comply;
E. not install or operate any above or below ground tank, sump, pit, pond, lagoon or
other storage or treatment vessel or device on the Premises without first obtaining
Landlord’s prior written consent;
F. not handle, use, generate, treat, dispose of or permit the use, handling,
generation, treatment, storage or disposal of any Hazardous Materials in, on, under, around
or above the Premises at any time during the Term, except for Hazardous
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Materials incidental to the operation of Tenant’s business used in accordance with all
Environmental Laws and this Lease.
Section 30.3. Conduct of Tenant. If Tenant, with the prior written authorization of
Landlord, which authorization may be granted or denied by Landlord in its sole and absolute
discretion, and as otherwise permitted by Section 30.2 F, generates, uses, transports, stores,
treats or disposes of any Hazardous Materials:
A. Tenant shall, at its own cost and expense, comply with all Environmental Laws
relating to Hazardous Materials;
B. Tenant shall (i) not dispose of any Hazardous Materials in dumpsters or trash
containers or at any other location at the Premises; (ii) not discharge any Hazardous
Materials into drains or sewers; (iii) not cause or allow the release, discharge, emission
or run-off of any Hazardous Materials to air, to surface waters, to the land, to ground
water, whether directly or indirectly; (iv) at Tenant’s own cost and expense, arrange for
the lawful transportation and off-site disposal of all Hazardous Materials generated by
Tenant; (v) provide secondary containment around all Hazardous Materials storage containers,
storage facilities and above ground storage tanks; (vi) conduct all necessary environmental
inspections, such as, but not limited to, asbestos inspections prior to any renovation or
demolition, as required by 40 CFR Part 61 and provide copies of all such reports to the
Landlord; (vii) comply with all reporting requirements under any local, state or federal
ordinance, statute or regulation, such as, but not limited to, toxics inventory reporting
under the Emergency Planning and Community Right-to-Know Act, the provisions under 40 CFR
Part 61, or various regulations controlling the emissions into the atmosphere of volatile
organic compounds and provide copies of all such reports and notifications to Landlord; and
(viii) use only highly skilled people to address all environmental issues associated with
the leasehold, that such people and all employees of the Tenant shall receive all required
training or certification under any local, state or federal law specifically mentioned or
alluded to in Section 30.1 of this Lease;
C. Tenant shall promptly provide Landlord with copies of all communications, permits or
agreements with any governmental authority or agency (federal, state or local) or any
private entity relating in any way to the violation or alleged violation of any
Environmental Laws or to any violation of Tenant’s obligations under subparagraph (B) above;
D. Landlord and Landlord’s agents and employees shall have the right to enter the
Premises on reasonable prior notice to Tenant and/or conduct appropriate tests for the
purpose of ascertaining that Tenant complies with all applicable laws, rules or permits
relating in any way to the presence of Hazardous Materials on the Premises; and
E. Upon the written request of Landlord no more frequently than once every year, or on
any other occasion in the event that Landlord has reason to believe an environmental problem
exists at the Premises, Tenant shall provide Landlord the results of appropriate tests of
air, water and soil to demonstrate (i) that Tenant is in compliance with all applicable
laws, rules or permits relating in any way to the presence of any
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Hazardous Materials on the Premises and (ii) the lack of any releases, discharges or
emissions.
If the presence, release, threat of release, placement on or in the Premises occurs or is
caused in whole or in part during the Term of this Lease, or the generation, transportation,
storage, treatment, or disposal at the Premises occurs or is caused in whole or in part during the
Term of this Lease of any Hazardous Materials gives rise to liability (including, but not limited
to, a response action, remedial action, or removal action) under any Environmental Laws or common
law theory, including, but not limited to nuisance, strict liability, negligence and trespass,
Tenant shall promptly take any and all remedial and removal action necessary to clean up the
Premises containing such Hazardous Materials and mitigate exposure to liability arising from the
Hazardous Materials, whether or not required by law.
Section 30.4. Exacerbation. If Tenant exacerbates a Pre-Existing Condition of which
Landlord notifies Tenant (including as a result of Tenant’s investigative or remediation
activities) during the Lease term, that the provisions of this Article XXX shall apply to such
exacerbation of the Pre-Existing Condition, and Tenant shall perform Environmental Remediation as
to such exacerbation. Tenant shall be responsible for all fines and penalties caused by Tenant or
to the extent exacerbated by Tenant (including Tenant’s environmental investigation or remediation
activities) at any time during the Lease Term.
Section 30.5. Rights of inspection. Landlord and their respective agents and
representatives shall have a right of entry and access to the Premises upon reasonable prior notice
to Tenant for the purposes of (i) inspection of the documentation relating to Hazardous Materials
or environmental matters maintained by Tenant or occupant of the Premises; (ii) ascertaining the
nature of the activities being conducted on the Premises and investigating whether Tenant is in
compliance with its obligations under Article XXX of this Lease; and (iii) determining the type,
kind and quantity of all products, materials and substances brought onto the Premises, or made or
produced thereon. Landlord’s entry shall not unreasonably interfere with the operation of Tenant’s
business. Landlord and its agents and representatives shall have the right to take samples in
quantities sufficient for analysis of all products, materials and substances present on the
Premises including, but not limited to, samples, products, materials or substances brought onto or
made or produced on the Premises by Tenant or occupant of the Premises or their respective agents,
employees, contractors or invitees and shall also have the right to conduct other tests and studies
as may be reasonably determined by Landlord to be appropriate in order to investigate whether
Tenant is in compliance with its obligations under Article XXX.
Section 30.6. Copies of Notices. During the term of this Lease, Tenant and Landlord
shall each provide the other promptly with copies of all summons, citations, directives,
information inquiries or requests, notices of potential responsibility, notices of violation or
deficiency, orders or decrees, Environmental Claims, complaints, investigations, judgments,
letters, notices of environmental liens or response actions in progress, and other communications,
written or oral, actual or threatened, received in the case of Tenant, by Tenant or occupant of the
Premises, or in the case of Landlord, by Landlord, from the United States Environmental Protection
Agency, Occupational Safety and Health Administration, Illinois Environmental Protection Agency, or
other federal, state or local agency or authority, or any other entity or individual (including
both governmental and non-governmental entities and individuals),
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concerning (a) any actual or alleged release of a Hazardous Material on, to or from the
Premises; (b) the imposition of any lien on the Premises relating to any Hazardous Material; (c)
any actual or alleged violation of or responsibility under Environmental Laws; or (d) any actual or
alleged liability under any theory of common law tort or toxic tort, including without limitation,
negligence, trespass, nuisance, strict liability or ultrahazardous activity.
Section 30.7. Tests and Reports.
A. Upon written request of either party to this Lease, the other party shall provide: (i)
copies of all environmental reports and tests prepared or obtained by or for such first party; (ii)
copies of transportation and disposal contracts (and related manifests, schedules, reports and
other information) entered into or obtained by such first party with respect to any Hazardous
Materials; (iii) copies of any permits issued to such first party under Environmental Laws with
respect to the Premises; (iv) prior to filing, copies of any and all reports, notifications and
other filings to be made by such rust party to any federal, state or local environmental
authorities or agencies and after filing, copies of such filings; and (v) any other applicable
documents and information with respect to environmental matters relating to the Premises. The
parties to this Lease shall be obligated to provide such documentation only to the extent within
their possession or control.
B. In addition, Landlord shall ever reasonably believe that there exists any breach by Tenant
of the terms of this Article XXX, or if any Environmental Claim is made or threatened, or if a
default shall have occurred under the Lease, or at Landlord’s discretion, one (I) time per Lease
Year, Landlord shall have the right, but not the duty, to enter upon the Premises and conduct an
environmental assessment of the Premises, including but not limited to a visual site inspection,
review of records pertaining to the site and interviews of Tenant’s representatives or others
concerning the site use and history and other matters. The investigation may also include
reasonable subsurface or other invasive investigation of the Premises including but not limited to
soil borings and sampling of site soil and ground or surface water for laboratory analysis, as may
be recommended by the consultant as part of its inspection of the Premises or based upon such other
reasonable evidence of Environmental Conditions warranting such subsurface or other invasive
investigation. Landlord shall have the right, but not the duty, to retain any independent
professional consultant to conduct any such environmental assessment; provided, however, that
Landlord agrees to limit, in the absence of an Environmental Claim or default under this Article
XXX, the number of such environmental assessments to one (1) per Lease Year for the Lease Term.
Tenant will cooperate with the Landlord’s consultant and will supply to the consultant, promptly
upon request, any information reasonably requested by Landlord to facilitate the completion of the
environmental assessment. Landlord and its designees are hereby granted access to the Premises at
any time or times, upon reasonable notice (which may be written or oral) to perform such
environmental assessment. In exercising its right, Landlord shall use its reasonable efforts to
minimize disruption of operations at the Premises. Any costs associated with performance of the
environmental assessment, including but not limited to the consultant fees and restoration of any
property damaged by such environmental assessment, shall be paid by Landlord, unless such
investigation discloses an Environmental Condition, in which case Tenant shall pay such costs.
C. Tenant shall pay Tenant’s Proportion of all costs incurred by Landlord for consultant fees
to review and comment on all reports, and other documentation and information
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required by Sections 30.5 and 30.6 concerning the work, and to monitor the performance of any
Environmental Remediation performed by Tenant.
Section 30.8. Indemnification. Tenant shall reimburse, defend, indemnify and hold
Landlord and any other Indemnified Party free and harmless from and against any and all
Environmental Claims, response costs, losses, liabilities, damages, costs and expenses, including,
without limitation, loss of rental income, loss due to business interruption, and reasonable
attorneys’ fees and costs, arising out of or in any way connected with any or all of the following:
A. any Hazardous Materials (other than a Pre-Existing Condition) which, at any time
during the Term, are or were actually or allegedly generated, stored, treated, released,
disposed of or otherwise located on or at the Premises as a result of the act or omission of
Tenant or any member of the Tenant Group (regardless of the location at which such Hazardous
Materials are now or may in the future be located or disposed of), including, but not
limited to any and all (i) liabilities under any common law theory of tort, nuisance,
strict liability, ultrahazardous activity, negligence or otherwise based upon, resulting
from or in connection with any Hazardous Material; (ii) obligations to take response,
cleanup or corrective action pursuant to any Environmental Laws; and (iii) the costs and
expenses of investigation or remediation in connection with the decontamination, removal,
transportation, incineration or disposal of any of the foregoing; and
B. any actual or alleged illness, disability, injury or death of any person, in any
manner arising out of or allegedly arising out of exposure to Hazardous Materials or other
substances or conditions present at the Premises as a result of the act or omission of
Tenant or any member of the Tenant Group (including, but not limited to, ownership,
operation and disposal of any equipment which generates, creates or uses electromagnetic
files, x-rays, other forms of radiation and radioactive materials), regardless of when any
such illness, disability, injury or death shall have occurred or been incurred or manifested
itself; and
C. any actual or alleged failure of Tenant or any member of the Tenant Group at any
time and from time to time to comply with all applicable Environmental Laws;
D. any failure by Tenant to comply with its obligations under this Article XXX relating
to an Environmental Condition for which Tenant is Remediating Party;
E. Tenant’s failure to provide all information, make all submissions, and take all
steps required by all applicable governmental authorities;
F. the imposition of any lien for damages caused by, or the recovery of any costs for,
the remediation cleanup of Hazardous Material as a result of events that took place during
the Term of this Lease as a result of the act or omission of Tenant or any member of the
Tenant Group;
G. costs of removal of any and all Hazardous Material from all or any portion of the
Premises, which Hazardous Material were placed on the Premises during the Term of this Lease
to the extent caused as a result of the act or omission of Tenant or any member of the
Tenant Group;
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H. costs incurred to comply, in connection with all or any portion of the Premises,
with all governmental regulations with respect to Hazardous Materials on, in, under or
affecting the Premises, which Hazardous Materials were placed on the Premises during the
Term of this Lease to the extent caused as a result of the act or omission of Tenant or any
member of the Tenant Group;
I. any spills, discharges, leaks, escapes, releases, dumping, transportation, storage,
treatment or disposal of any Hazardous Materials which occur during the Term of this Lease,
but only to the extent that such Hazardous Materials originated from or were or are located
on the Premises due to the act or omission of Tenant or any member of the Tenant Group.
In the event Environmental Claims or other assertion of liability shall be made against any
Indemnified Party for which the Indemnified Party is entitled to indemnity hereunder, the procedure
set forth in Section 24.1 shall apply. The obligations of Tenant under this Section 30.8 shall
survive any termination or expiration of this Lease.
Section 30.9. Tenant Representations with respect to Environmental Matters. Subject
to Section 4.8, Tenant acknowledges that the Premises are being leased in their present “as is”
condition. Tenant further acknowledges that Landlord has made no representation whatsoever
regarding Hazardous Materials on or about the Premises.
ARTICLE XXXI
Security Deposit
INTENTIONALLY OMITTED.
ARTICLE XXXII
Renewal Options
Section 32.1. First Renewal Option. Tenant shall have the option (hereinafter
referred to as the “First Renewal Option”) to renew the Initial Term for all of the Premises as of
the expiration date of the Initial Term, for one (1) additional period of five (5) years
(hereinafter referred to as the “First Renewal Term”) upon the following terms and conditions:
A. Tenant gives Landlord written notice of its exercise of the Renewal Option at least
twelve (12) months prior to the expiration of the First Renewal Term.
B. An Event of Default has not occurred and is continuing either on the date Tenant
delivers the notice required under subparagraph 32.1A. above or at any time thereafter prior
to the commencement of the First Renewal Term.
C. All of the terms and provisions of this Lease (except this Section 32.1) shall be
applicable to the First Renewal Term, except that Base Rent for the First Renewal Term shall
be determined as follows: Base Rent for the First Renewal Term shall be equal to the
greater of: (i) one hundred percent (100%) of the Base Rent and Addition Rent, if any, for
the last year of the Initial Term, or (ii) Landlord’s
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determination of the Fair Value (as hereinafter defined). For purposes of this Lease,
“Fair Value” shall mean Landlord’s determination, utilizing its reasonable judgment, of an
annual amount per rentable square foot for each year of the First Renewal Term for which
Fair Value is being determined beginning with the first (1st) day of the subject period that
a willing, creditworthy, new non-equity tenant leasing comparable space to Tenant’s would
pay and a willing, comparable landlord of an industrial building comparable to the Building
in the Chicago metropolitan area (hereinafter referred to as the “Market”) would accept at
arm’s length, giving appropriate consideration to annual rental rate per rentable square
foot, rental escalations, length of lease term, size and location of the premises being
leased, and other generally applicable terms and conditions prevailing for comparable space
in comparable buildings located in the Market. In determining Fair Value, the parties shall
not consider improvements installed by Tenant at Tenant’s sole cost and expense. Tenant
shall notify Landlord within ten (10) days after receipt of notice of Landlord’s
determination of Fair Value whether or not Tenant disagrees with Landlord’s determination.
If Tenant agrees with Landlord’s determination, Base Rent for the First Renewal Term shall
be the amount determined by Landlord. If Tenant disagrees with Landlord’s determination,
Tenant shall indicate whether or not it is revoking its exercise of the First Renewal Option
or that the dispute shall be resolved by arbitration as hereinafter provided. If Tenant
does not respond within the required time period or fails to elect, Tenant shall be deemed
to have elected arbitration. Landlord and Tenant will each select an arbitrator who shall
be disinterested and shall be a person that has been actively engaged in the development or
leasing of industrial buildings in the Chicago Metropolitan area for a period not less than
seven (7) years immediately preceding his or her appointment. Landlord and Tenant shall
each simultaneously submit to the arbitrators a determination of Fair Value. (If no
submittal is made, the parties shall be deemed to have approved the other party’s
submission.) The arbitrators shall be directed as promptly as possible to select from the
two determinations submitted by Landlord and Tenant the one that is closer to the Fair Value
as determined by the arbitrators, and said selection shall thereafter be deemed the Fair
Value. If the two arbitrators so appointed fail to agree as to which of the determinations
submitted by Landlord and Tenant is closest to the actual Fair Value, the two arbitrators
shall appoint a third arbitrator, using the criteria described above, to decide upon which
of the two determinations submitted is closest to the actual Fair Value. The cost of the
foregoing arbitration process shall be borne by the losing party. If no determination is
made prior to the date for commencement of payment of rent for which Fair Value must be
determined, then Landlord’s determination shall be used until the arbitration is completed.
If Tenant’s determination is later selected, Landlord shall refund any overpayments to
Tenant.
Section 32.2. Second Renewal Option. Tenant shall have the option (hereinafter
referred to as the “Second Renewal Option”) to renew the Initial Term for all of the Premises as of
the expiration date of the Initial Term, for one (1) additional period of five (5) years
(hereinafter referred to as the “Second Renewal Term”) upon the following terms and conditions:
A. Tenant gives Landlord written notice of its exercise of the Renewal Option at least
twelve (12) months prior to the expiration of the Second Renewal Term.
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B. An Event of Default has not occurred and is continuing either on the date Tenant
delivers the notice required under subparagraph 32.IA. above or at any time thereafter prior
to the commencement of the Second Renewal Term.
C. All of the terms and provisions of this Lease (except this Section 32.1) shall be
applicable to the Second Renewal Term, except that Base Rent for the Second Renewal Term
shall be determined as follows: Base Rent for the Second Renewal Term shall be equal to the
greater of: (i) one hundred percent (100%) of the Base Rent and Addition Rent, if any, for
the last year of the Initial Term, or (ii) Landlord’s determination of the Fair Value (as
hereinafter defined). For purposes of this Lease, “Fair Value” shall mean Landlord’s
determination, utilizing its reasonable judgment, of an annual amount per rentable square
foot for each year of the Second Renewal Term for which Fair Value is being determined
beginning with the first (1st) day of the subject period drat a willing, creditworthy, new
non-equity tenant leasing comparable space to Tenant’s would pay and a willing, comparable
landlord of an industrial building comparable to the Building in the Market would accept at
arm’s length, giving appropriate consideration to annual rental rate per rentable square
foot, rental escalations, length of lease term, size and location of the premises being
leased, and other generally applicable terms and conditions prevailing for comparable space
in comparable buildings located in the Market. In determining Fair Value, the parties shall
not consider improvements installed by Tenant at Tenant’s sole cost and expense. Tenant
shall notify Landlord within ten (10) days after receipt of notice of Landlord’s
determination of Fair Value whether or not Tenant disagrees with Landlord’s determination.
If Tenant agrees with Landlord’s determination, Base Rent for the Second Renewal Term shall
be the amount determined by Landlord. If Tenant disagrees with Landlord’s determination,
Tenant shall indicate whether or not it is revoking its exercise of the Second Renewal
Option or that the dispute shall be resolved by arbitration as hereinafter provided. If
Tenant does not respond within the required time period or fails to elect, Tenant shall be
deemed to have elected arbitration. Landlord and Tenant will each select an arbitrator who
shall be disinterested and shall be a person that has been actively engaged in the
development or leasing of industrial buildings in the Chicago Metropolitan area for a period
not less than seven (7) years immediately preceding his or her appointment. Landlord and
Tenant shall each simultaneously submit to the arbitrators a determination of Fair Value.
(If no submittal is made, the parties shall be deemed to have approved the other party’s
submission.) The arbitrators shall be directed as promptly as possible to select from the
two determinations submitted by Landlord and Tenant the one that is closer to the Fair Value
as determined by the arbitrators, and said selection shall thereafter be deemed the Fair
Value. If the two arbitrators so appointed fail to agree as to which of the determinations
submitted by Landlord and Tenant is closest to the actual Fair Value, the two arbitrators
shall appoint a third arbitrator, using the criteria described above, to decide upon which
of the two determinations submitted is closest to the actual Fair Value. The cost of the
foregoing arbitration process shall be borne by the losing party. If no determination is
made prior to the date for commencement of payment of rent for which Fair Value must be
determined, then Landlord’s determination shall be used until the arbitration is completed.
If Tenant’s determination is later selected, Landlord shall refund any overpayments to
Tenant.
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Section 32.3. “As Is” Condition. Tenant agrees to accept the Premises to be covered by
this Lease during the First Renewal Term and the Second Renewal Term in an “as is” physical
condition and Tenant shall not be entitled to receive any allowance, credit, concession or payment
from Landlord for the improvement thereof.
Section 32.4. Amendment. In the event that Tenant exercises the Renewal Option, then
Landlord and Tenant shall mutually execute and deliver an amendment to this Lease reflecting the
renewal of the Term on the terms herein provided, which amendment shall be executed and delivered
promptly after the determination of Base Rent to be applicable to the First Renewal Term and again
with respect to the Second Renewal Term as hereinabove provided.
Section 32.5. Termination. The Renewal Options herein granted shall automatically
terminate upon the earliest to occur of (i) the expiration or termination of this Lease, (ii) the
termination of Tenant’s right to possession of the Premises, or (iii) the failure of Tenant to
timely or properly exercise either the Fast Renewal Option or the Second Renewal Option.
ARTICLE XXXIII
Expansion of Improvements
Section 33.1. Construction of Addition. Upon written request from Tenant from time to
time, and upon satisfaction of the conditions hereinafter set forth, Landlord agrees, subject to
and to the extent permitted under all Legal Requirements and Reciprocal Easement Agreements, to
construct an addition or additions, from time to time, to the Initial Improvements of up to the
floor area permitted by all Legal Requirements (hereinafter referred to as the “Addition”). Each
Addition shall, in Landlord’s reasonable determination, be architecturally compatible with the
Initial Improvements and constructed to be used as an office warehouse facility. Landlord’s
obligation to construct each Addition shall be subject to satisfaction of the following conditions:
(a) Tenant shall not be in default hereunder at the time of Tenant’s request for an
Addition and thereafter and no event shall have occurred during such time which would, with
the passage of time or the giving of notice, or both, constitute such a default.
(b) This Lease shall not have been terminated.
(c) The Tenant has not sublet in excess of fifty percent (50%) of the Premises and has
not assigned its rights hereunder.
(d) All trade fixtures of Tenant and other equipment necessary for the operation of
Tenant’s business shall not be included in the Plans and shall be paid for by Tenant; and
(e) This Lease shall be amended to incorporate the increase in Rent hereinafter
provided and other terms herein contained.
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Section 33.2. Addition Plans. Landlord, at Tenant’s sole cost and expense, shall
furnish plans and specifications for each Addition (hereinafter referred to as the “Addition
Plans”) prepared by an architect licensed in Illinois. The Addition Plans shall be approved in
accordance with the process described in Section 4.2 hereof. Within forty-five (45) days after
Tenant’s approval of the Addition Plans, Landlord shall obtain and deliver to Tenant a bid from a
general contractor for the construction of the Addition, based on the approved Addition Plans, if
such bid is not acceptable to Tenant, Tenant may, subject to the approval of Landlord, make
revisions to the Plans, and thereupon, Landlord will obtain a further bid based on the revised
Plans. Provided the bid for construction of the Addition is accepted by Tenant, Landlord shall
cause the Addition to be constructed substantially in accordance with the Addition Plans.
Section 33.3. Addition Rent. On the date of Substantial Completion of each Addition
(hereinafter with respect to each Addition referred to as the “Addition Date”), Tenant shall pay to
Landlord annually during the Term, as Addition Rent, an amount (hereinafter referred to as the
“Addition Rent”) equal to the product of the “Addition Cost” (as hereinafter defined) with respect
to each Addition, multiplied by the “the Percentage Factor” (as hereinafter defined). The Addition
Rent shall be payable in equal monthly installments in the manner provided in Sections 5.1 hereof.
The Addition Rent with respect to each Addition shall be increased by two and five tenths percent
(2.5%) on each anniversary of the Addition Date with respect to each Addition during the Term.
Section 33.4. Extension Term. Notwithstanding anything to the contrary contained
herein, if there is less than seven (7) years remaining in the Initial Term of this Lease on the
applicable Addition Date (or the Renewal Term of this Lease if an Addition Date occurs in a Renewal
Term), then the Term of this Lease shall be automatically extended so that the expiration of the
Term is the last day of the eighty-fourth (84th) full calendar month following the most recent
Addition Date, without the requirement of any written amendment to this Lease. All of the terms and
provisions hereof shall be applicable during any such additional extension period except that the
Annual Base Rent shall be increased on each anniversary of the first day of the 10th Lease Year to
an amount equal to 1.0250% of the Annual Base Rent during the month (on an annualized basis)
immediately preceding the date of said increase.
Section 33.5. Further Definitions. The phrase “Addition Cost” as used herein shall
mean one hundred ten percent (110%) of the aggregate of all soft and hard costs and expenses of any
nature whatsoever including, but not limited to the cost of debt (whether or not financed and if
not financed the Percentage Factor shall be used as the deemed rate of interest incurred by
Landlord) and permit fees required directly or indirectly to design and construct the Addition in
accordance with the Plans. The phrase “Percentage Factor” as used herein shall mean 375 basis
points in excess of the yield on a United States 30 year Treasury Bond as of the Addition Date, as
such yield is reported in The Wall Street Journal, or if such publication is discontinued,
then any other nationally recognized financial publication.
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ARTICLE XXXIV
Miscellaneous
Section 34.1. Captions. The captions of this Lease are for convenience only and are
not to be construed as part of this Lease and shall not be construed as defining or limiting in any
way the scope or intent of the provisions hereof.
Section 34.2. Severability. If any covenant, agreement or condition of this Lease or
the application thereof to any person, firm or corporation or to any circumstances, shall to any
extent be invalid or unenforceable, the remainder of this Lease, or the application of such
covenant, agreement or condition to persons, firms or corporations or to circumstances other than
those as to which it is invalid or unenforceable, shall not be affected thereby. Each covenant,
agreement or condition of this Lease shall be valid and enforceable to the fullest extent permitted
by law.
Section 34.3. Applicable Law. This Lease shall be construed and enforced in
accordance with the laws of the state where the Premises are located.
Section 34.4. Amendments in Writing. None of the covenants, terms or conditions of
this Lease, to be kept and performed by either party, shall in any manner be altered, waived,
modified, changed or abandoned, except by a written instrument, duly signed, acknowledged and
delivered by the other party.
Section 34.5. Relationship of Parties. Nothing contained herein shall be deemed or
construed by the parties hereto, nor by any third party, as creating the relationship of principal
and agent or of partnership, or of joint venture by the parties hereto, it being understood and
agreed that no provision contained in this Lease nor any acts of the parties hereto shall be deemed
to create any relationship other than the relationship of Landlord and Tenant.
Section 34.6. Brokerage. Landlord and Tenant warrant to each other that they had no
dealings with any real estate broker or agent in connection with this lease other than Landlord’s
Broker and Tenant’s Broker, and Landlord and Tenant covenants to the other to pay, bold harmless
and indemnify the other from and against any and all cost, expense or liability for any
compensation, commissions and charges claimed by any other broker or other agent with respect to
this Lease or the negotiation thereof arising out of any acts of their respective acts. Landlord
shall pay any commission due Tenant’s Broker pursuant to the written agreement between Landlord and
Tenant’s Broker, if any and Landlord hereby indemnifies and holds Tenant harmless from and against
all cost, expense and liability for any commission due Tenant’s Broker. Landlord shall further
give Tenant’s Broker the listing on the building Tenant is vacating at 745 Birginal, Bensenville,
Illinois on terms reasonably acceptable to Landlord.
Section 34.7. No Accord and Satisfaction. No payment by Tenant or receipt by Landlord
of a lesser amount than the monthly rent herein stipulated and additional rent shall be deemed to
be other than on account of the earliest stipulated rent, nor shall any endorsement or statement on
any check or any letter accompanying any check or payment as rent be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
- 49 -
Landlord’s right to recover the balance of such rent or pursue any other remedy in this Lease
provided.
Section 34.8. Joint Effort. The preparation of this Lease has been a joint effort of
the parties hereto and the resulting documents shall not, solely as a matter of judicial
construction, be construed more severely against one of the parties than the other.
Section 34.9. Waiver of Jury Trial. Landlord and Tenant hereby waive a jury trial in
any action brought by the other hereunder.
Section 34.10. Time. Time is of the essence of this Lease, and all provisions herein
relating thereto shall be strictly construed.
Section 34.11. Consent. The granting of any consent under this Lease, or the failure
to object to any action taken by a party to this Lease without the other party’s consent to the
extent requited under this Lease, shall not be deemed a waiver of any right to require such consent
for any further similar act. No waiver of any other breach of the covenants of this Lease shall be
construed, taken or held to be a waiver of any other breach or to be a waiver, acquiescence in or
consent to any further or succeeding breach of the same covenant. None of the covenants under this
Lease, and no breach thereof, shall be waived, altered or modified except by a written instrument
executed by the non-breaching party.
Section 34.12. No Partnership. Landlord is not, and shall not be deemed to be, in any
way or for any purpose, the partner, employer, principal, master or agent of or with Tenant.
Section 34.13. Landlord’s Liability. Notwithstanding anything to the contrary herein
contained, after the Commencement Date there shall be absolutely no personal liability asserted or
enforceable against Landlord or on any persons, firms or entities who constitute Landlord with
respect to any of the terms, covenants, conditions and provisions of this Lease, other than with
respect to the Security Deposit and Rent Adjustment Deposits actually paid to Landlord, and Tenant
shall, subject to the rights of any mortgagee, look solely to the interest of Landlord, its
successors and assigns in the Premises for the satisfaction of each and every remedy of Tenant in
the event of default by Landlord hereunder, such exculpation of personal liability is absolute and
without any exception whatsoever. If the entity constituting Landlord is a partnership, Tenant
agrees that the deficit capital account of any such partner shall not be deemed an asset or
property of said partnership.
Section 34.14. Landlord Rights. Landlord specifically excepts and reserves to itself
the non-exclusive right to install, use, maintain and access cellular (or similar) antennas, towers
and related equipment and utility service for same on the Premises or any portion thereof
designated by Landlord, provided the designation of such location shall be subject to Tenant’s
approval, which approval shall not be unreasonably withheld or delayed.
Section 34.15. Rent Absolute. Except as otherwise expressly provided herein, this
Lease shall be deemed and construed to be a “net lease” and Tenant agrees to pay all costs and
expenses of every kind and nature whatsoever, ordinary and extraordinary, arising out of or in
connection with the ownership, maintenance, repair, replacement, use and occupancy of the
- 50 -
Premises during the Term of this Lease, which, except for the execution and delivery hereof,
would otherwise have been payable by Landlord.
Section 34.16. Authority. Simultaneously with the execution and delivery of this
Lease, Tenant shall deliver to Landlord and Landlord shall deliver to Tenant:
A. Certified resolutions of its board of directors authorizing the execution and
delivery of this Lease.
B. A certificate of incumbency executed by its secretary identifying by name, office
and facsimile signature the officers executing this Lease.
C. A current certificate of good standing issued by the Secretary of State of the state
of incorporation of Tenant and the State of Illinois.
Section 34.17. Entire Agreement. It is understood and agreed that all understandings
and agreements heretofore had between the parties hereto are merged in this Lease, the exhibits
annexed hereto and the instruments and documents referred to herein, which alone fully and
completely express their agreements, and that no party hereto is relying upon any statement or
representation, not embodied in this Lease, made by the other. Each party expressly acknowledges
that, except as expressly provided in this Lease, the other party and the agents and
representatives of the other party have not made, and the other party is not liable for or bound in
any manner by, any express or implied warranties, guaranties, promises, statements, inducements,
representations or information pertaining to the transactions contemplated hereby.
Section 34.18. Purchase Contingency. Landlord and Tenant acknowledge and agree that
Landlord’s obligations under this Lease are expressly contingent upon Landlord’s purchase of the
Premises and the closing of such purchase by which Landlord obtains fee simple title to the Land.
In the event that said events have not occurred on or before November 30, 1996, either party may
terminate this Lease upon notice to the other at any time prior to the closing of such purchase.
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IN WITNESS WHEREOF, the parties have executed this Lease as of the date set forth above.
| LANDLORD: | CENTERPOINT REALTY SERVICES CORPORATION, an Illinois corporation | |||||
| By: | ||||||
| Its: Chief Investment Officer | ||||||
| By: | ||||||
| Its: Chief Financial Officer | ||||||
| TENANT: | FACTORY CARD OUTLET OF AMERICA LTD, an Illinois corporation | |||||
| By: | ||||||
| Its: | ||||||
| By: | ||||||
| Its: Executive Vice President | ||||||
- 52 -
