EXHIBIT 10.6
SEVENTH AMENDMENT TO LEASE
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SEVENTH AMENDMENT TO LEASE dated as of this 29/th/ day of March, 1999, by
and between BP PRUCENTER ACQUISITION, LLC, a Delaware limited liability company
(as successor-in-interest to The Prudential Insurance Company of America)
("Landlord") and XXXXXXX XXXXXXXX XXXXXXXX, LLC, a Delaware limited liability
company, as successor-in-interest to Xxxxxxx Xxxxxxxx Xxxxxxxx, Inc. ("Tenant").
RECITALS
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By Lease dated May 31, 1995 (as amended by a First Amendment of Lease dated
June 21, 1996, a Second Amendment of Lease dated September 1, 1996, a Third
Amendment of Lease dated November 5, 1996, a Fourth Amendment of Lease dated
January 22, 1997, a Fifth Amendment and Partial Termination of Lease dated July
11, 1997 and a Sixth Amendment and Partial Termination of Lease dated May 15,
1998, the "Lease"), Landlord's predecessor-in-interest did lease to Tenant and
Tenant did hire and lease from Landlord's predecessor-in-interest certain
premises (the "Initial Premises") located in the Tower Building (the
"Building"), Prudential Center, Boston, Massachusetts, which Initial Premises
are described with greater particularity in the Lease.
Tenant has determined to Lease from Landlord an additional 25,676 square
feet of rentable floor area, consisting of the entirety of the twenty-ninth
(29th) floor of the Building, which space is shown on Exhibit A attached hereto
(the "Seventh Amendment Space").
Landlord and Tenant are entering into this instrument to set forth said
leasing of the Seventh Amendment Space, to integrate the Seventh Amendment Space
into the Lease and to amend the Lease.
NOW THEREFORE, in consideration of One Dollar ($1.00) and other good and
valuable consideration in hand this date paid by each of the parties to the
other, the receipt and sufficiency of which are hereby severally acknowledged,
and in further consideration of the mutual promises herein contained, Landlord
and Tenant hereby agree to and with each other as follows:
1. Effective as of the "Seventh Amendment Space Commencement Date" (as
defined in Section 2 hereof) the Seventh Amendment Space shall
constitute a part of the "Premises" (as defined and used in the
Lease), so that the Premises (as defined and used in the Lease) shall
include both the Initial Premises and the Seventh Amendment Space.
2. The Seventh Amendment Space Commencement Date shall be earlier to
occur of (a) the date on which the Seventh Amendment Space is ready
for occupancy as provided below or (b) the date on which Tenant
commences beneficial use of the
Seventh Amendment Space (Tenant shall be treated as having commenced
beneficial use when it begins to move furniture and equipment into the
Seventh Amendment Space for its regular business operation). The
Seventh Amendment Space shall be deemed to be ready for occupancy at
such time as Landlord shall have completed the "Asbestos Abatement
Work" as described on Exhibit B attached hereto and placed the Seventh
Amendment Space in "shell condition" as described in Exhibit C to the
above-referenced Fourth Amendment of Lease. Landlord shall give Tenant
at least thirty (30) days prior written notice of the date on which
Landlord anticipates that the work to be performed by Landlord
hereunder will be completed and the Seventh Amendment Space deemed
ready for occupancy. Notwithstanding the foregoing, under no
circumstances shall the Seventh Amendment Space Commencement Date be
deemed to occur prior to March 1, 2001 (unless Tenant has commenced
beneficial use of the Seventh Amendment Space prior to that date).
In the event that Landlord shall fail to deliver possession of the
Seventh Amendment Space with the Asbestos Abatement Work complete and
the Seventh Amendment Space in shell condition by July 1, 2001 (as
such date shall automatically be extended for such periods of time as
Landlord is prevented from delivering the Seventh Amendment Space as
contemplated herein by reason of events beyond Landlord's reasonable
control), Tenant shall have the right to terminate the Lease with
respect to the Seventh Amendment Space only, by giving notice to
Landlord of Tenant's desire to do so within thirty (30) days after
such date; and, upon the giving of such notice, the Lease shall
terminate with respect to the Seventh Amendment Space only, without
further liability or obligation on the part of either party, unless
within thirty (30) days after receipt of such termination notice from
Tenant, Landlord shall so deliver the Seventh Amendment Space in the
condition required above. Such right of termination shall be Tenant's
sole and exclusive remedy at law or in equity or otherwise for
Landlord's failure to deliver the Seventh Amendment Space by July 1,
2001.
3. The Term of the Lease for the Seventh Amendment Space shall commence
on the Seventh Amendment Space Commencement Date and (notwithstanding
the fact that the Term of the Lease with respect to the Initial
Premises may have previously expired as set forth in the Lease) shall
expire on the last day of the sixtieth (60th) full calendar month
subsequent to the Seventh Amendment Space Commencement Date (plus the
partial month, if any, following the Seventh Amendment Space
Commencement Date) (the "Seventh Amendment Space Lease Term"), unless
sooner terminated in accordance with the provisions of the Lease as
herein amended, upon all the same terms and conditions contained in
the Lease as herein amended.
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4. Rent for the Seventh Amendment Space from the Seventh Amendment Space
Commencement Date through the expiration of the Seventh Amendment
Space Lease Term shall be payable at the annual rate of $1,347,990.00
(being the product of (i) $52.50 and (ii) the rentable floor area of
the Seventh Amendment Space (being 25,676 square feet)).
5. Commencing on the Seventh Amendment Space Commencement Date, Tenant
shall reimburse Landlord for Increased Operating Expenses (pursuant to
Section 3.2 of the Lease) for the Seventh Amendment Space in excess of
the Operating Expenses incurred by Landlord during calendar year 2000
(being January 1, 2000 through December 31, 2000).
6. Commencing on the Seventh Amendment Space Commencement Date, Tenant
shall reimburse Landlord for increased Real Estate Taxes (pursuant to
Section 3.4 of the Lease) for the Seventh Amendment Space in excess of
the Real Estate Taxes paid by Landlord in fiscal year 2001 (being July
1, 2000 through June 30, 2001).
7. Tenant's Share with respect to the Seventh Amendment Space consisting
of a total of 25,676 rentable square feet will be 2.09%.
8. Landlord shall provide approximately four hundred (400) AMPS of
120/208 volts of electrical power to be used in the Seventh Amendment
Space and shall, at its sole expense, bring such power to the
electrical panel serving the Seventh Amendment Space. Tenant shall pay
for any upgrades to said electric power and shall pay directly to
Boston Edison Company or other provider of electrical service to the
Seventh Amendment Space the cost as billed to Tenant for electricity
used in the Seventh Amendment Space for lighting and office
receptacles. Notwithstanding the foregoing, Landlord reserves the
right, to be exercised upon at least thirty (30) days prior written
notice to Tenant, to install a check meter to measure the consumption
of electricity in the Seventh Amendment Space. If Landlord shall
install a check meter as aforesaid, in lieu of making payment directly
to the utility company, Tenant shall reimburse Landlord monthly in
arrears within thirty (30) days of receipt of Landlord's invoice for
the cost of electricity consumed in the Seventh Amendment Space as
determined by such check meter and Landlord's cost of electricity from
time to time.
9. As provided in the Lease, on the Seventh Amendment Space Commencement
Date, Tenant shall be entitled to lease, at the then current monthly
rates, up to thirteen (13) additional parking spaces from the
Prudential Center garage operator in excess of those currently leased.
The rate for monthly parking spaces as of
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January 1, 1999 is $290.00 per month.
10. (A) Landlord shall provide to Tenant an allowance of $30.00 per
square foot of rentable floor area of the Seventh Amendment Space (the
"Tenant Allowance") which may be applied by Tenant upon written notice
to Landlord to (i) the cost of improvements (including architectural
and engineering fees in connection therewith) in any portion of the
Seventh Amendment Space performed by Tenant in accordance with the
terms of the Lease after Tenant delivers to Landlord paid invoices
indicating the actual cost of such improvements reasonably
satisfactory to Landlord or (ii) the actual costs incurred by Landlord
in connection with any improvement work in the Seventh Amendment Space
in the event Tenant shall elect to have Landlord perform such work. To
the extent that the costs of any such work undertaken by Landlord
exceed the Tenant Allowance, Tenant shall reimburse Landlord, as
Additional Rent, for such excess upon Tenant's authorization for
Landlord to proceed with the work attributable thereto.
If Tenant shall elect for Landlord to perform the improvement work,
Landlord shall use good faith efforts to perform such work at a
commercially reasonable cost.
(B) Notwithstanding the foregoing, Landlord shall be under no
obligation to apply any portion of the Tenant Allowance for any
purposes other than as provided in this Seventh Amendment, nor shall
Landlord be deemed to have assumed any obligations, in whole or in
part, of Tenant to any contractors, subcontractors, suppliers, workmen
or materialmen. In addition, Landlord shall not be obligated to make
any application of any portion of the Tenant Allowance if (i) there
shall be existing any default of Tenant under the Lease (as defined in
Section 8.1) or (ii) there are any liens which are not bonded to the
reasonable satisfaction of the Landlord against Tenant's interest in
the Lease or against the Premises, the Building, or the Prudential
Center arising out of any work performed pursuant to the Lease by
Tenant or any litigation in which Tenant is a party.
11. In accordance with Section 1(F) of the Third Amendment of Lease,
Tenant has delivered to Landlord an irrevocable standby letter of
credit in the original face amount of One Million Three Hundred
Seventy-Five Thousand and 00/100 Dollars ($1,375,000.00) (the "Third
Amendment LC") to secure, among other obligations of Tenant under the
Lease, a portion of the transaction costs incurred by Landlord in
connection with the twenty-fifth (25th) floor of the Building (the
"Twenty-Fifth Floor"). Section 1(F) also provides in part for the
yearly reductions of the Third Amendment LC subject to the conditions
contained in Section 1(F).
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Landlord and Tenant agree that Landlord may utilize the Third
Amendment LC as additional security for Tenant's obligations with
respect to up to fifty percent (50%) of the Transaction Costs (as
hereinafter defined) to be incurred by Landlord for the Seventh
Amendment Space. In order to provide Landlord with sufficient
additional security for the Transaction Costs for the Seventh
Amendment Space while preserving Landlord's security for the Twenty-
Fifth Floor, Landlord and Tenant agree that the Third Amendment LC
reduction procedures in Section 1(F) are hereby amended to provide
that, in lieu of the annual fourteen percent (14%) reduction scheduled
to commence in the first quarter of calendar year 1999, provided the
Third Amendment Security Reduction Conditions (as that term is defined
in the Third Amendment of Lease) have been satisfied, the Third
Amendment LC shall be reduced in each year starting three (3) years
after the Initial Third Amendment Security Reduction Date specified in
Section 1(F) (i.e. during the first quarter of calendar year 2002) in
accordance with the terms and provisions of Section 1(F). For the
purposes of this Seventh Amendment, the term "Transaction Costs" shall
mean all costs incurred by Landlord in (i) the negotiation and
execution of this Seventh Amendment (including, without limitation,
attorneys' fees), (ii) the preparation of the Seventh Amendment Space
for Tenant's use and occupancy, including but not limited to the
Tenant Allowance (but specifically excluding the costs of performing
the Asbestos Abatement Work and placing the Seventh Amendment Space in
shell condition, as described in Section 2 above), (iii) real estate
brokerage commissions and (iv) any unreimbursed costs incurred by
Landlord's Contract Manager. The Transaction Costs for the Seventh
Amendment Space are currently calculated to be approximately $36.00
per rentable square foot of floor area of the Seventh Amendment Space.
Tenant understands that the exercise of its future expansion rights
may require a further modification of the terms regarding the
reduction of the Third Amendment LC and/or an increase in the Third
Amendment LC to secure a portion of Transaction Costs for such space
incurred by Landlord. In addition, in the event that Tenant does not
exercise its option to terminate the Lease with respect to the Seventh
Amendment Space in accordance with Section 12 below and consequently
the Seventh Amendment Space Lease Term shall exceed the Term of the
Lease with respect to the Initial Premises, Landlord shall be entitled
to retain the then-remaining portion of the Third Amendment LC
(subject to further reduction in accordance with the terms and
provisions of Section 1(F) of the Third Amendment of Lease) for the
balance of the Seventh Amendment Space Lease Term.
Notwithstanding anything contained herein or in the Third Amendment to
Lease to the contrary: (i) condition #3 of the Third Amendment
Security Reduction
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Conditions is hereby deleted in its entirety; (ii) the last sentence
of condition #5(b) of the Third Amendment Security Reduction
Conditions is hereby deleted in its entirety and the following
language substituted therefor: "Operating Income is defined as net
income or loss, excluding one time extraneous items related to the
recapitalization that occurred in January 1999, plus depreciation,
interest expenses, amortization, and all Federal, state, local and
foreign income taxes."; and (iii) condition #5(c) of the Third
Amendment Security Reduction Conditions is hereby deleted in its
entirety and the following language substituted therefor: "TENANT'S
third party debt service expense exceeds 25% of TENANT'S net income on
an annual basis."
12. In accordance with Section 12.14 of the Lease (as amended by Section 9
of the First Amendment of Lease), Tenant has delivered to Landlord an
irrevocable standby letter of credit in the original face amount of
Four Million Seventy-Eight Thousand and 00/100 Dollars ($4,078,000.00)
(the "Original LC") to secure, among other things, a portion of the
Lease Transaction Costs incurred by Landlord in connection with the
Initial Premises and the First Amendment Spaces. Section 12.14 (as
amended by Section 9 of the First Amendment of Lease) also provides in
part for yearly reductions of the Original LC subject to the
conditions contained in Section 12.14 and Section 9.
Notwithstanding anything contained in said Section 12.14 and Section 9
to the contrary, Landlord and Tenant hereby agree that: (i) the
Original LC shall be reduced by Eight Hundred Thousand and 00/100
Dollars ($800,000.00) on or about the date of this Seventh Amendment,
which such reduction shall be in lieu of any other reductions to the
Original LC contemplated by or scheduled to take place under the Lease
prior to December 31, 1998; (ii) the Original LC shall be further
reduced by an additional Eight Hundred Thousand and 00/100 Dollars
($800,000.00) during the second quarter of calendar year 1999, which
such reduction shall be in lieu of any other reduction to the Original
LC contemplated by or scheduled to take place under the Lease during
calendar year 1999; and (iii) commencing in the first quarter of
calendar year 2000, and provided that in each instance the L.C.
Reduction Conditions (as that term is defined in the Lease) have been
satisfied, the Original LC shall be reduced in each year by the amount
shown for each applicable lease year on the schedule set forth in
Exhibit LCR attached to and made a part of this Seventh Amendment
(which such Exhibit LCR shall replace and supercede Exhibit LCR
attached to the First Amendment of Lease).
Notwithstanding anything contained herein or in the Lease to the
contrary: (i) condition #3 of the L.C. Reduction Conditions is hereby
deleted in its entirety; (ii) the last sentence of condition #5(b) of
the L.C. Reduction Conditions is hereby deleted in its entirety and
the following language substituted therefor: "Operating Income is
defined as net income or loss, excluding one time extraneous items
related to the recapitalization that occurred in January 1999, plus
depreciation, interest expenses, amortization, and all Federal, state,
local and foreign income taxes."; and (iii)
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condition #5(c) of the L.C. Reduction Conditions is hereby deleted in
its entirety and the following language substituted therefor:
"TENANT'S third party debt service expense exceeds 25% of TENANT'S net
income on an annual basis."
13. By written notice ("Tenant's Termination Notice") given by Tenant to
Landlord at any time during the Seventh Amendment Space Lease Term on
or before the last day of the month which is twelve (12) months prior
to the expiration of the Lease Term with respect to the Initial
Premises, Tenant may elect to cancel and terminate the Lease with
respect to the Seventh Amendment Space effective on the last day of
the Lease Term with respect to the Initial Premises (the "Seventh
Amendment Space Early Termination Date") but not before or after said
date; provided, however, that as a condition precedent to such
cancellation and termination, Tenant must deliver to Landlord together
with Tenant's Termination Notice good funds in an amount equal to
"Tenant's Termination Payment" (as defined below) and provided further
that notwithstanding such termination and as a further condition
precedent thereto, (i) Tenant shall pay to Landlord on a timely basis
all Rent and payments on account of Increased Operating Expenses,
increased Real Estate Taxes, utility charges and all additional rent
and other amounts due from Tenant (including, but not limited to, all
past due amounts thereof) through the Seventh Amendment Space Early
Termination Date (it being acknowledged and agreed that Tenant's
Termination Payment is in addition to such amounts and no credit shall
be given towards the payment of such amount on account of the payment
of Tenant's Termination Payment), (ii) there shall be no default
(beyond any applicable notice and cure period) on the part of Tenant
under the Lease on either the date Tenant gives Tenant's Termination
Notice or on the Seventh Amendment Space Early Termination Date and
(iii) Tenant shall quit and vacate the Seventh Amendment Space as of
the Seventh Amendment Space Early Termination Date and surrender the
same in the condition required by the applicable provisions of the
Lease. In the event that Tenant's share of such Increased Operating
Expenses, increased Real Estate Taxes, utility charges and such other
additional rent and other amounts due through the Seventh Amendment
Space Early Termination Date is not finally determined as of the
Seventh Amendment Space Early Termination Date, Tenant shall make
payment on account as reasonably estimated by Landlord if so requested
by Landlord and in any event Tenant shall make final payment of
amounts due through the Seventh Amendment Space Early Termination Date
within thirty (30) days after final billing therefor by Landlord. The
obligations of Tenant set forth in this Section 12 shall survive the
termination of the Lease. If Tenant shall not give to Landlord
Tenant's Termination Notice as provided in this Section 13 (time being
of the essence), the provisions of this Section 13 shall be deemed
null and void. "Tenant's Termination Payment" shall be equal to the
product of(a) the "Fixed Monthly Amortization Amount" as defined
hereinbelow and (b) the number of
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months that would have remained in the Seventh Amendment Space Lease
Term from and after the Seventh Amendment Space Early Termination Date
but for the giving by Tenant of the Tenant's Termination Notice. The
"Fixed Monthly Amortization Amount" shall equal the monthly payment on
a direct reduction loan basis amortized monthly where (i) the
principal amount is equal to the Tenant Allowance plus the commission
paid by Landlord to the Recognized Broker (as hereinafter defined) in
connection with this Seventh Amendment (the "Broker's Commission"),
(ii) the term is sixty (60) calendar months and (iii) the monthly
interest rate is 0.8333%.
14. Landlord shall have the right, at any time prior to the Seventh
Amendment Space Commencement Date, to substitute for the Seventh
Amendment Space either the twenty-fourth (24th), twenty-sixth (26th)
or twenty-seventh (27th) floor of the Building in accordance with the
following:
a.. Landlord shall give Tenant at least one hundred twenty (120) days
written notice of Landlord's intention to substitute one of the
aforesaid floors for the Seventh Amendment Space.
b. Landlord shall reimburse Tenant for any reasonable costs incurred
by Tenant in readapting Tenant's architectural and engineering
plans to the extent necessary as a result of the substitution of
a different floor of the Building for the original Seventh
Amendment Space described herein.
c. Upon the delivery of the notice described in subsection (a)
above, the new premises shall become the "Seventh Amendment
Space" for the purposes of the Lease as amended by this Seventh
Amendment, and the parties hereto shall execute an amendment to
the Lease setting forth the substitution for the original Seventh
Amendment Space.
d. Notwithstanding the provisions of Section 2 above, in the event
that the new Seventh Amendment Space is to be located on a floor
in the Building on which Asbestos Abatement Work has already been
performed prior to the date of Landlord's notice of substitution,
Landlord shall deliver such space to Tenant in "as is" condition,
broom clean and clear of all occupants. If the new Seventh
Amendment Space is to be located on a floor in the Building in
which Asbestos Abatement Work has not already been performed,
Landlord shall deliver such space after performing the work
described in Section 2.
e. The rentable floor area of the new Seventh Amendment Space shall
not vary by more than five hundred (500) square feet from the
rentable floor
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area of the original Seventh Amendment Space (being 25,676 square
feet). Rent and additional rent for the new Seventh Amendment
Space shall in any event be based on the actual rentable floor
area of such space.
15. Tenant hereby acknowledges and confirms that the indemnity set forth
in Section 11.1 of the Lease shall apply, and always has applied, to
the use or occupancy by Tenant of the Premises in its entirety and to
the acts or omissions of Tenant, its agents, employees or any
contractors brought onto the Premises in its entirety by Tenant.
16. (A) Tenant warrants and represents that Tenant has not dealt with any
broker in connection with the consummation of this Seventh Amendment
other than Xxxxxxxx & Grew, Incorporated (the "Recognized Broker");
and in the event any claim is made against Landlord relative to
dealings by Tenant with brokers other than the Recognized Broker,
Tenant shall defend the claim against Landlord with counsel of
Tenant's selection first approved by Landlord (which approval will not
be unreasonably withheld) and save harmless and indemnify Landlord on
account of loss, cost or damage which may arise by reason of such
claim.
(B) Landlord warrants and represents that Landlord has not dealt with
any broker in connection with the consummation of this Seventh
Amendment other than the Recognized Broker; and in the event any claim
is made against Tenant relative to dealings by Landlord with brokers
other than the Recognized Broker, Landlord shall defend the claim
against Tenant with counsel of Landlord's selection and save harmless
and indemnify Tenant on account of loss, cost or damage which may
arise by reason of such claim. Landlord shall be responsible for
paying the commission due to the Recognized Broker in connection with
this Seventh Amendment.
17. Except as otherwise expressly provided herein, all capitalized terms
used herein without definition shall have the same meanings as are set
forth in the Lease.
18. Except as herein amended the Lease shall remain unchanged and in full
force and effect. All references to the "Lease" shall be deemed to be
references to the Lease as herein amended.
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??? as a sealed instrument as of the date and year first above written.
LANDLORD:
Cameron
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BP PRUCENTER ACQUISITION, LLC
By: BOSTON PROPERTIES LIMITED PARTNERSHIP, its Manager
By: BOSTON PROPERTIES, INC.,
its general partner
By /s/ Xxxxxx X. Xxxxxx
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Name Xxxxxx X. Xxxxxx
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Title Vice President
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TENANT:
XXXXXXX XXXXXXXX
XXXXXXXX LLC
By: BSH Holding, LLC, its manager
By: Xxxxxxx Xxxxxxxx Xxxxxxxx Co., its Manager
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By /s/ Xxxxx X. Xxxxxxxxxx
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Name Xxxxx X. Xxxxxxxxxx
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Title SVP/CFO
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EXHIBIT B
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1. Overview
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A. This agreement consists of providing the work required for selective
demolition, asbestos removal, and replacement fireproofing at the
00/xx/ xxxxx Xxxxxxxxxx Xxxxx, Xxxxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx
0. Description of Work
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The following is a brief description of the work included under this
agreement.
Work covered by Contract Documents:
1. Selective Demolition:
a.) Removal of carpet
b.) Removal of below ceiling wall partitions
c.) Removal of freight and passenger elevator lobby ceilings
d.) Removal of core storage room ceiling
e.) Removal of travertine wall panels in passenger elevator
lobby
2. Removal of Asbestos and Hazardous Materials:
a.) Removal of all suspended ceiling as acm
b.) Removal of all light fixtures as acm
c.) Removal of light fixtures ballasts as PCB-containing
d.) Removal of all HVAC ductwork and related mechanical
components located above ceiling as acm
e.) Removal of abandoned electrical and communication system
wiring, conduit, etc.
f.) Removal of all insulation on building mechanical systems
located above ceiling as acm
g.) Removal of structural fireproofing as acm (--80% amosite)
h.) Removal of all interior column enclosures and associated
masonry blocks as acm
i.) Removal of all floor tile and associated mastic as acm
using chemical stripping methods
j.) Cleaning of all surfaces
3. Replacements
a.) Replacement of structural fireproofing
4. Firewatch
a.) Provide 24-hour firewatch throughout the Contract Period.
EXHIBIT LCR
Original LC LC Total LC
Year Balance Reduction Balance
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1999 4,078,000 1,600,000 2,478,000
2000 2,478,000 450,000 2,028,000
2001 2,028,000 450,000 1,578,000
2002 1,578,000 450,000 1,128,000
2003 1,128,000 450,000 678,000
2004 678,000 450,000 228,000
2005 228,000 228,000 0
1. Original Standby letter of Credit
2. Straightline declining balance over life of lease
3. Original Standby letter of Credit Balance for lease year.
