EXHIBIT 10.28
MARFIELD, BELGARDE & XXXXX COMPANIES
MANAGED PROPERTIES
OFFICE BUILDING LEASE
This LEASE is made this ~day of November 1996, between Red Circle L.L.P. (as
LANDLORD) and Chronimed Inc. (as TENANT).
WITNESSETH:
In Consideration of the mutual Covenants, promises, and agreements herein
contained, the parties agree as follows:
1. DESCRIPTION OF THE PREMISES
TENANT hereby leases from LANDLORD Certain Premises (Leased Premises) within the
building (Building), identified as 0000X Xxx Xxxxxx Xxxxx, Xxxxxxxxxx, XX. The
Lease Premises is identified as Suite 300 and is more specifically designated in
Exhibit "A" and "B" which are made a part hereof. The Lease Premises is measured
from the outside of all demising exterior walls to the center of tenant division
and common area walls.
and the leased premises
TENANT agrees to accept the building/in "as is" Condition, not withstanding the
items specifically listed in Exhibit "C" and those improvements represented in
Exhibit "A" and "B".
The Leased Premises Contains:
Office, rest room, entry, truck dock and finished spaces 23,621 S.F.
For informational purposes only, the whole building consists approximately of
the following square footage sizes:
Chronimed 23,621
Summit main area 54,451
Summit storage 502
Summit total 55,953
Vacancy 18,120
Common area 2,890
Total 99,584
2. RENT
TENANT Covenants to pay annual Base Rent for the Leased Premises of One Hundred
Ninety-One-Thousand Three Hundred Thirty and 10/100 Dollars ($191,330.10)
payable to the LANDLORD, or to any other entity designated by LANDLORD, without
further notice, in equal monthly installments, sublect to pro-ration in the case
of the first and last months of the Lease term, of Fifteen Thousand Nine Hundred
Forty-four 18/100 Dollars ($ 15,944. 18) on the first business day of each month
during the full term hereof. This was calculated by multiplying 23,621 sq. ft
times $8.10 per sq. ft. See Section 7 for TENANT'S Additional Rent obligations.
TENANT'S obligation to pay Base and Additional Rent is unconditional and
independent of any other provision of this Lease. TENANT agrees not to with hold
Base and Additional Rent for any reason. TENANT agrees to pay a ten percent
(10%) late charge fee each month on any sums due LANDLORD which are owing to the
LANDLORD by the tenth day of that month, if notified by LANDLORD, in writing
that the payment has not been received by the fifth of the month. month's Base
Rent is included with this Lease as Check #050007, dated 11/25/96, $36,888.36,
issued by
3. TERM OF LEASE
The Lease is five (5) years no (O) months commencing on the first day of April,
1997 and expiring on the last day of March, 2002. TENANT shall have the right of
access to the space to construct its leasehold improvements starting on February
1, 1 997.
4. USE OF PREMISES
TENANT agrees to use the Leased Premises for office, pharmacy and lab space and
no other purpose; subject to all local, state, and federal laws regulating such
use. Such use shall not cause excessive odors, humidity, noise or vibrations
which may iniure the building, cause harm to, or disrupt other tenants.
LANDLORD will use its best efforts to obtain all zoning approvals or waivers
needed from the City to allow TENANT to lawfully use the Leased Premises as
described above. If LANDLORD fails to obtain such approvals or waivers within
forty-five (45) days after the parties fully execute this Lease, the Lease will
automatically terminate, without further obligation on either party's part.
5. PARKING AND COMMON AREAS
The TENANT, its employees and invitees shall have the non-exclusive right to use
the common areas, driveways and parking lots along with the other tenants of the
Building and their employees and invitees. The use of common areas, and the
portion of the land set aside by LANDLORD for non-exclusive use of tenants, is
subject to such reasonable rules and regulations as the LANDLORD may impose from
time to time. No more than 3.3 parking spaces per 1 ,000
square feet are to be occupied at any one time by the TENANT, its employees and
invitees. Overnight parking of vehicles is prohibited; except private vehicles
on a non-recurring basis, not longer than seven continuous days. LANDLORD
reserves the right to move or remove any vehicle remaining after seven days
during the snow removal season. The storage, at any time, of any property in the
common areas is prohibited.
TENANT will have no right to use the upper level parking area.
TENANT has the right, (at any time, by giving LANDLORD written notice specifying
the number of additional parking stalls desired) to require LANDLORD to Create
up to forty (40) parking stalls on the property in addition to those existing as
of the date of the Lease. Upon receiving the notice, LANDLORD will diIigently
undertake reasonable efforts to do all things necessary to Create the stalls,
including applying for all necessary City approvals. If LANDLORD Cannot, despite
reasonable efforts, obtain all such approvals, LANDLORD will have no obligation
to Create the stalls, notwithstanding anything herein to the Contrary. LANDLORD
will have no obligation to bring suit against the City to obtain any such
approval, and "reasonable efforts" shall not be Construed to require any such
suit. If LANDLORD can obtain approval for some but not all of the desired
stalls, LANDLORD will so notify TENANT, who will have the right, by notice given
within the following five (5) days, to Cancel its notice calling for additional
stalls, or accept the number of new stalls available, or appeal to the City of
Minnetonka.
The location of the stalls will be decided by mutual agreement among LANDLORD,
TENANT, and to the extent the law allows. LANDLORD will fund all expenses
(including, without limitation, city applications fees) incurred in creating the
stalls, but will be entitled to invoice TENANT for such expenses, starting on
completion of the stalls, amortized over the number of months remaining in the
current lease term, at the rate of 10% per annum, simple interest. This invoice
amortized amount will be treated as base rent, and TENANT will, on request,
execute a lease amendment reflecting the increase in monthly base rent to
include the amortized monthly installment.
LANDLORD shall have the right to construct additional parking at any time
Upon completion of the stalls, TENANT will have the right to occupy, at any one
time, stalls on the property (except the upper parking lot) equal in number to
80 plus the number of new stalls created pursuant to this provision. TENANT will
have no right, however, to require LANDLORD to designate any stalls, except all
stalls created in the area marked on Exhibit A & B as Parking Area for the
exclusive use of the TENANT.
Any default, while uncured, will suspend TENANT'S rights under this provision.
TENANT may exercise its right under this provision only once.
6. NET LEASE
This is a "net" Lease, and LANDLORD shall not be required to provide any
services or do any acts in connection with the Leased Premises not specifically
set forth in this Lease. As hereinafter further described in this Lease, the
TENANT is responsible for and shall pay its utility charges, trash removal,
interior cleaning and maintenance, its proportionate share of real estate taxes
including installments of assessments and its proportionate share of the
Building's operating expenses.
7. ADDITIONAL RENT
The net rentable area of the building is 96,951 sq. ft. and accordingly, the
TENANT'S proportionate share for purposes of allocating real estate taxes,
assessments and operating expenses is 24.36 %.
8. REAL ESTATE TAXES
Real estate taxes include the following:
(a) all real estate taxes
(b) all installments of assessments, general or special, levied
against the property
9. OPERATING EXPENSES
Operating Expenses include the following:
(a) City water and sewer Charges, except where used by tenants in
substantial amounts for production and is therefore separately
metered, and the monitoring surveillance of the fire
protection system.
(b) Lawn Care, snow and litter removal, and the repair and
maintenance as reasonably required for: parking lots, drives,
sidewalks, landscaped areas, roof, H.V.A.C. systems, garage
doors and garage door openers, and exterior panes of exterior
windows and foyer glass.
(c) Electrical service for the trash room (if any) and mechanical
rooms and for exterior lighting, replacement of bulbs used for
exterior Iighting and trash removal from the common area trash
room serving the TENANT, if any.
(d) Insurance for fire and extended coverage, Ioss of rents and
business interruptions and general liability.
(e) All other maintenance, replacement, repair and miscellaneous
operating expenses except structural maintenance and roof
replacement and that which is covered by manufacturer or
subcontractor warranties.
(f) Property management expenses of four percent of the Base Rents
and Additional Rents collected.
(g) Such other expenses incurred in operating the Building
generally, if of a type normally incurred in the operating of
similar buildings.
(h) Maintenance of vestibules and common areas.
Commencing with the operating expenses incurred and real estate taxes payable in
the year this Lease commences and each subsequent year during the Lease term.
TENANT will pay, in equal monthly installments, payable in advance on the first
day of each calendar month, its estimated monthly proportionate share of all
such real estate taxes and operating expenses. As the actual amount will not be
known at the beginning of each calendar year, LANDLORD shall make a reasonable
estimate, to the best of its knowledge, of what the amount will be for that
year, and TENANT will pay its estimated proportionate share each month. In no
way should LANDLORD'S estimate be construed as actual or as a guarantee.
After the actual real estate tax statement is received, LANDLORD shall have the
right to make adjustments for any difference between that which TENANT has paid
and that which it should have paid. TENANT shall then start paying its
proportionate share based upon the actual tax statement.
LANDLORD shall have the right to make adlustments periodically (at least
annually but no more than quarterly) to the operating expenses, and adjust
accordingly. When actual operating expenses have been compiled, a final year-end
adjustment wilI be made, and either a Charge or Credit will be issued. LANDLORD
agrees to exercise due care and diligence to obtain operating expenses, services
and supplies at Competitive and reasonable market costs with acceptable quality
and service standards.
TENANT may have been given projections for real estate taxes by LANDLORD OR
LANDLORD'S agents. LANDLORD, or its agent, does not warrant that these
projections are correct or that they even approximate the amounts shown. The
TENANT is encouraged to call the city assessor to verify the real estate tax
projections before executing the lease.
10. UTILITIES
TENANT is responsible and shall pay for all of its utility services. The TENANT
is separately metered for non-HVAC expenses of gas and electricity and will
contract with the utility companies for service requirements and billing. TENANT
is also responsible for its own telephone service.
TENANT agrees and acknowledges that the Building is served by a single
integrated HVAC system. Accordingly, LANDLORD will furnish heating and cooling
to each tenant in the Building, and charge back its collective expense in so
doing as an Operating Expense (as to which TENANT is responsible for paying its
"proportionate share"), and will treat the HVAC system as a non-structural item
for purposes of Section 9(e).
TENANT has the right, at any time, by giving LANDLORD written notice specifying
the additional Cooling capacity desired, to require LANDLORD to increase the
cooling capacity of the HVAC system serving the Leased Premises to reasonable
degree beyond its capacity as of the commencement date of this Lease. LANDLORD
warrants that the capacity as of that commencement date will be at Ieast 1 ton
per approximately 470 square feet. Upon receiving the notice, LANDLORD will
diligently undertake reasonable efforts to increase the capacity accordingly.
LANDLORD will have no obligation to increase the Capacity to any unreasonable or
impossible extent. LANDLORD will fund all expenses incurred in increasing this
capacity, but will be entitled to invoice TENANT for such expenses, starting on
completion of the work, amortized over the number of months remaining in the
current lease term, at the rate of 10% per annum, simple interest. This invoiced
amortized amount will be treated as base rent, and TENANT will, on request,
execute a lease amendment reflecting the increase in monthly base rent to
include the amortized monthly installment.
Any default, while uncured, will suspend TENANT'S rights under this provision.
TENANT may exercise its right under this provision only once.
LANDLORD reserves the right to protect its property and interest with respect to
utilities in any way it sees fit should TENANT not pay utility charges.
In the event the TENANT uses water and sewer in substantial amounts or for
production purposes, the LANDLORD shall install at TENANT'S expense a water
meter to sub-meter said water, and shall Charge TENANT for said water and sewer
at rates as charged by the City. TENANT shall pay to the City any water
availabiiity charge (WAC) and sewer availability charge (SAC) charges due to its
high usage.
LANDLORD shall, under no circumstances, be liable for; a) physical loss arising
from any failure to furnish heating, cooling, water, electricity, telephone, or
any other utility; b) any consequential damages, regardless of the cause; or c)
any loss or damages of any kind not resulting from the LANDLORD'S willful
non-performance or grossly negligent performance of its duties hereunder.
11. INSURANCE
The TENANT shall maintain in full force and effect during the term hereof, a
policy of public liability insurance under which LANDLORD and TENANT are named
insured. The minimum limits of liability of such insurance shall be
$1,000,000.00 combined single Iimit for bodily
injury and property damage, and in addition the TENANT shall carry a policy of
property insurance for fire and extended coverage including an all leasehold
improvements to the premises on a replacement cost value. TENANT agrees to
deliver a duplicate copy of said policy, or a certificate of insurance
evidencing such coverage, to LANDLORD. Such policy shall contain a provision
requiring ten (10) days written notice to the LANDLORD before cancellation of
the policy can be effected.
The LANDLORD shall carry and cause to be in full force and effect a fire and
extended coverage insurance policy on the Building and leasehold improvements;
but not on TENANT'S personal property, trade fixtures, contents or improvements
owned, or otherwise in possession of the TENANT, or any improvements to the
premises which improvement and contents are to be insured by the TENANT. Such
policy shall contain a provision that the policy shall not be canceled except
upon ten (10) days written notice to the TENANT.
Each insurance policy carried by either the LANDLORD or TENANT covering the
Lease Premises or its contents shall provide that the insured party has
relinquished all rights to recover against the other party for loss or damage
resulting from perils insured against by the policy. LANDLORD and TENANT each
hereby waive any claim based upon liability which may arise against the other so
far as the claim relates to loss or damage to the premises or contents which is
coverable by insurance or covered under the aforementioned insurance policies,
whether maintained, or not.
12. MAINTENANCE
The TENANT shall be wholly responsible for the maintenance and repair of the
interior of the Leased Premises, and will keep it in as good condition as when
turned over to tenant, reasonable wear and tear and damage by fire and the
elements excepted.
The TENANT agrees to keep the Leased Premises in a clean, orderly and sanitary
Condition and will neither do nor permit to be done therein anything which is in
violation of insurance polices on the building or that is contrary to law. The
TENANT will neither commit nor suffer waste to the Building or to the Leased
Premises.
The maintenance and repair obligations of the TENANT specifically extend to all
demising walls of the leased premises, interior doors, interior windows,
plumbing and electrical fixtures within the Leased Premises, except as these
obligations may be covered by manufacturer or Contractor warranties. The
LANDLORD agrees to Cooperate with and reasonably assist TENANT in pursuing such
warranties which are still in effect.
The LANDLORD shall at its own expense keep in good order, safe condition and
repair the structural integrity of the Building, except where repairs to the
structural parts are required due to the fault or negligence of the TENANT, its
employees or invitees, in which case the TENANT shall be responsible.
13. APPEARANCE AND ACCESS
LANDLORD and TENANT mutualIy agree to keep the grounds, Building, Leased
Premises and common areas in a condition of good repair and appearance as their
respective responsibilities and rights may allow. LANDLORD shall provide general
access to TENANT and its invitees to the common areas except as reasonable
security requirements and temporary conditions may prevent, and shall make a
reasonable effort to keep the common areas well maintained and free of nuisance.
LANDLORD may establish form time to time and TENANT will abide by reasonable
rules for parking, security, handling of trash and like procedures.
TENANT agrees to keep all of its trash containers, palIets, dumpsters, refuse
and waste within its Leased Premises and not outside or ins common areas and
agrees not to litter any of the grounds or entries. TENANT is responsible for
the cost of the removal of its trash.
L~ TENANT to Initial
---
Window coverings, if desired by TENANT, are to be installed by TENANT at
TENANT'S expense and must be horizontal levelour type made of metal. TENANT
shall also provide and maintain fire extinguishers as required foCr its
particular use by the City.
TENANT'S bathroom is contiguous to the bathroom of an adjoining tenant and
LANDLORD will instalI a common hallway serving these bathrooms, TENANT agrees to
allow the adjoining tenant the use of its bathroom, and shall have the right to
use the adjoining tenant's bathroom. TENANT agrees to keep in good order,
cleanliness and repair the contiguous bathroom, as does the adjoining tenant.
TENANT agrees not to have or keep any animals, including dogs and/or cats,
within the Leased Premises.
14. LANDLORD'S RESPONSIBILITY
LANDLORD agrees that prior to the Commencement of the term hereof, at its sole
cost and expense, it will finish the Leased Premises substantially in accordance
with Exhibits "A" and "B". It is understood and agreed that minor changes from
any plans or specifications which may be necessary during construction of the
Leased Premises shall not affect or invalidate this Lease.
TENANT agrees that, upon occupancy hereof, it will inspect the Leased Premises
in order to ascertain the condition thereof; that any objections (except for
latent deficiencies not then discoverable) thereto not delivered in writing to
LANDLORD within 60 days after occupancy shalI be deemed waived; and that no
representations, either expressed or implied, have been made regarding the
quality or condition thereof except as specifically stated below:
(a) The Leased Premises, at the time of initial occupancy, shall
comply with applicable building codes; and the Americans with
Disabilities Act.
(b) The Leased Premises will be completed substantially as agreed
to in this Lease; and
(c) The mechanical system serving the Leased Premises will have
been checked and found to be operating satisfactorily.
LANDLORD will be responsible for repair or replacement during
the first year of the lease, except normal maintenance
15. CONDEMNATION LOSS
Should all the Leased Premises to be taken in condemnation proceedings or by
exercise of any right of eminent domain, then this Lease shall automaTically
terminate as of the date the condemning authority or the authority exercising
its right of eminent domain takes possession of the Leased Premises. If, as a
result of a partial taking, the Leased Premises is no longer useable for the
purposes specified in of this Lease, then, in any such case, the TENANT or
LANDLORD may terminate this Lease as of the date the condemning authority or the
authority exercising its right of eminent domain takes possession of the
property. lf this Lease is not terminated, LANDLORD will immediately make all
repairs necessary to make the Leased Premises complete and tenable. The LANDLORD
shall be specifically entitled to all awards for condemnation, except in the
case of awards made specifically for loss or damage to TENANT'S property or
TENANT'S relocation expenses.
16. TENANT ASSIGNMENT
The TENANT shall not assign this Lease, and shall not sublet any part of the
Leased Premises without the prior written consent of the LANDLORD, provided
however, TENANT may assign the lease without LANDLORD'S prior consent to any
successor entity of the business created as the result of a merger or
consolidation. Said consent will not be unreasonably withheld or delayed. Any
such assignment or subletting will not release the TENANT from its
responsibilities under this Lease, unless expressly agreed to in writing by the
LANDLORD. TENANT shall pay LANDLORD'S reasonable attorneys fees for reviewing
the sublease.
If the TENANT shall be declared bankrupt, shall have a receiver appointed of its
property, shall make an assignment for the benefit of creditors, or its rights
hereunder shall be taken under execution; it shall be construed as an assignment
of this Lease within the meaning hereof, and the LANDLORD shall have the right
to terminate this Lease.
TENANT specifically reserves the right to assign the lease or to sub-lease to
any related corporate entity.
17. DEFAULT BY TENANT
It is a Default for TENANT: (a) if Base Rent, Additional Rent, or any other sum
due by TENANT under this Lease shall be unpaid as of the date payment is
required; (b) if TENANT fails to perform any of the other terms, conditions,
covenants and obligations of this Lease to be observed or performed by the
TENANT for more than (10) days after LANDLORD gives TENANT written notice of
such Default ( it being agreed that a Default, other than failure to pay Base
Rent, Additional Rent or other sums due, which is of such character that the
cure thereof reasonably requires longer than (10) ten days, shall be deemed
cured within said period, if TENANT in good faith commences a cure within the
(10) ten day period and diligently undertakes to complete the cure with
reasonable dispatch); (c) if TENANT abandons the Leased Premises (it being
agreed that the Leased Premises shall be considered abandoned should TENANT fail
to openly conduct business from the aforementioned premises for a period of (7)
seven Calendar days after October 31, 1997) (d) if TENANT or guarantor knowingly
misrepresents any material fact in any written statement provided to the
LANDLORD or at its request, pursuant to or in connection with this Lease; or (e)
if TENANT, any guarantor, general partner, joint venture, or majority
shareholder becomes insolvent or the subject of a bankruptcy petition.
A Default gives LANDLORD the right (without further notice except as hereinafter
expressly provided) to: (a) immediately reenter the Leased Premises, change the
locks, and remove all persons and property; (b) at TENANT'S expense, store or
sell said property for TENANT'S account; (c) treat said property as abandoned
upon TENANT'S failure to remove it within (10) ten days of written demand to
remove; (d) make alterations and repairs; (e) without terminating the Lease,
relet all or part of the Leased Premises, at TENANT'S expense and for its
account, on such terms, for such rentals, and for such a term as LANDLORD in its
sole discretion deems advisable and/or (f) resort to any other remedy authorized
by this Lease or by statute, law or equity.
Whether or not LANDLORD reenters and/or relets the Leased Premises, TENANT will
remain liable, for all periods in which this Lease is in full force and not
terminated, for the Base Rent, Additional Rent and utilities due hereunder,
subject only to a credit for rental received from a substitute tenant over and
above expenses of reletting and other sums due hereunder. Additionally, whether
or not LANDLORD has already resorted to any other above-mentioned right,
LANDLORD may elect, by giving a written notice, to terminate the Lease effective
as of any date specified in the notice. No act, including the re-entering and/or
reletting, except the giving of such notice, shall be deemed a termination, or
acceptance of surrender of the Lease. Upon said effective date, TENANT will
comply with any surrender provisions.
TENANT will be liable for (a) all expenses and damages incurred by LANDLORD
resulting, whether before or after termination, from a Default, including
without limitation attorney's fees and brokers' fees to obtain a new tenant,
reclaiming possession and alteration or repair costs to obtain a new tenant and
(b) 10% interest on any sum due under the Lease, from the date due.
18. ALTERATIONS
The TENANT shall not make any alterations to the Lease Premises without the
written consent of the LANDLORD, such consent not to be unreasonably withheld or
delayed. If the TENANT shall desire to make any such alterations, it shall
furnish plans and specifications of the work to be so performed together with a
construction statement Containing a complete breakdown of the cost of all labor
and material included therein, and together with an escrow of cash with Title
Services, Inc. in an amount equal to the estimated cost of all such work, if it
should exceed one thousand dollars ($1,0OO.OO). TENANT agrees to obtain a
building permit from the city for any alterations exceeding fifty dollars
($SO.OO) in cost. TENANT agrees that all such work shall be done in a good,
workmanlike manner, and in compliance with applicable building codes and all
applicable Iaws, including, without limitation, the American Disabilities Act,
that the structural integrity of the Building shall not be impaired, and that no
liens shall attach to the Building or Leased Premises by reason thereof. No such
alteration(s) shall change the office/finish area to storage/service area ratio
without LANDLORD'S permission.
The TENANT shall, before the expiration of the Lease, restore the Leased
Premises to its original condition unless the LANDLORD elects that all or a part
of the alterations may remain. Any such alterations shall become the property of
LANDLORD as soon as they are affixed to the Leased Premises and all right, title
and interest therein of the TENANT shall immediately cease unless otherwise
stated in writing. The TENANT however, shall remain the owner of any installed
trade fixtures and shall have the right to remove such trade fixtures at the
expiration of this Lease Agreement, so long as the Lease Premises and/or
Building is restored to its original conditions.
TENANT agrees that, if by reason of TENANT'S operations, the use to which TENANT
puts the space, or any alterations made by TENANT (whether or not approved
unconditionally by LANDLORD), applicable law, including, without limitation, the
American Disabilities Act, requires further alterations or modifications of the
lease premises or the building(s), that the TENANT will make such alterations or
modifications so as to promptly address such requirements; or, if TENANT fails
to do so, that TENANT will reimburse LANDLORD promptly for the cost of such
alterations or modifications as LANDLORD may make upon TENANT'S default
(LANDLORD having the right but not the obligation to make such alterations or
modifications under that circumstance); and that this provision shall survive
termination or expiration of the lease.
19. SIGNS
The LANDLORD shall allow TENANT, at its sole expense, to install one building
standard exterior entry sign at the TENANT'S front entry and lettering on the
entry door. LANDLORD shall install, at its sole expense, TENANT'S identification
on the lower monument sign. No other signage, including no soliciting or other
directional type signage, promotional material, or identification of any type
shall be placed in, on, or externally visible from, any entry, window, outer
door, or exterior surface without the written consent of LANDLORD. TENANT agrees
that no visitor parking or other parking sign age will be installed on any part
of the parking or
common areas without the written consent of the LANDLORD. Exceptions to this are
security system signs not to exceed sixty (60) square inches in size.
20. ENTRY
LANDLORD, its agents, and its employees shall have the right to enter the
premises at all reasonable times subject to 24 hour notice and during normal
business hours, except in the case of an emergency (life or property threatened)
to inspect them, to make repairs, and to maintain the Building of which the
Leases Premises are part. During the one hundred and eighty (180) days prior to
the expiration of the term, the LANDLORD or its agents may exhibit the Leased
Premises during normal business hours, with appropriate advance notice of at
least 24 hours, to prospective tenant. LANDLORD shall also have the right of
entry as provided in Paragraph 1 7. Any non-emergency entry will be conducted in
a manner Consistent with federal and state laws governing the practice of
pharmacy and due protection of confidential medical information.
LANDLORD will have the specific right to enter the area identified as the
vestibule to service the elevator equipment and rest room. TENANT wilI provide
LANDLORD with the appropriate pass Card or key to this area.
21. SUBORDINATION
It is mutually agreed that this Lease shall be subordinate to any and all
mortgages, ground leases, or other securities, including any renewals,
modifications, consolidations, replacements and extensions thereof now or
hereafter recorded against the Leased Premises by the LANDLORD. TENANT'S right
to quiet possession of the Leased Premises shall not be disturbed if TENANT is
not in Default and so long as TENANT shall pay the Base and Additional Rents and
observe and perform all of the provisions of this Lease, unless this Lease is
otherwise terminated pursuant to its terms.
22. NOTICES
All notices, consents, demands and requests which may be or are required to be
given by either party of the other, shall be in writing, and sent by United
States registered or certified mail, with return receipt requested, addressed to
the TENANT at the street address set forth in Paragraph 1 with a copy sent by
United States registered or certified mail to: Chronimed, Inc., Attn: Vice
President of Operations 00000 Xxxxxxxxx Xxxxx, Xxxxx 000 Xxxxxxxxxx, XX 00000 or
other such address as TENANT may direct in writing in the future and to the
LANDLORD in care of Marfield, Belgarde and Xxxxx Companies, 0000 Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000 or to such other address as LANDLORD may
direct in writing in the future.
The date which said registered or certified mail is mailed by the LANDLORD or
TENANT shalI be conclusively deemed to be the date on which a notice, consent,
demand, or request is given or made.
The above address of a party may be changed at any time or from time to time by
notice given by said party to the other party in the manner herein above
provided.
23. SHORT FORM LEASE
The parties hereto shall, at the option of either party, execute a short form of
Lease for recording purposes and, in such event, the terms thereof shall
constitute a part of this Lease as fully as though recited at length herein.
24. LANDLORD ASSIGNMENT
The LANDLORD may assign its right , title and interest in this Lease, and such
assignment shall then terminate all the LANDLORD'S obligations so long as the
LANDLORD is not in default when such assignment is made and the assignee assumes
the LANDLORD'S responsibilities thereafter.
25. OCCUPANCY
If the Leased Premises is not ready for occupancy on the Lease commencement
date, then the lease term shall commence on the date of TENANT'S possession but
still terminate on the date previously shown. LANDLORD( shall not be liable to
TENANT for any loss or damage resulting if the Leased Premises is not ready for
occupancy on the commencement date of this Lease. TENANT agrees to take
possession within ten (10) days after the Leased Premises is substantially ready
for occupancy and permission, or temporary permission, to occupy is granted by
the City. All TENANT'S obligations hereunder will commence on the first day
TENANT occupies any portion of the Leased Premises.
26. FIRE REPAIR
In the event of damage to the premises by fire, the elements or other casualty,
LANDLORD shall repair the damage with reasonable dispatch (with Base Rent to
xxxxx in the meantime), unless any mortgagee or financial participant, who from
time to time might have an interest in on the demised premises, shall require
that the fire insurance proceeds to be used to reduce its interest or the
indebtedness on the premises.
If the damage renders the Leased Premises untenantable in part but TENANT
continues to occupy them in part, the Base and Additional Rent shall be reduced
in an equitable manner.
27. QUIET ENJOYMENT
TENANT, upon payment of the Base and Additional Rent herein reserved and upon
performance of all of the terms, covenants and conditions of this Lease by it to
be kept and performed, shall at all times during the term hereof or during any
extension or renewal hereof, peaceably and quietly enjoy the Leased Premises
without any disturbance from LANDLORD or from any other person claiming through
LANDLORD. Upon expiration or sooner termination of the term hereof, TENANT shall
surrender the Leased Premises in good condition and repair, except for
reasonable wear and tear, Condemnation and casualty.
28. HOLDlNG OVER
If TENANT shall hold over the Leased Premises or any part thereof after the
expiration of the term hereof, or any extension thereof, such holding over shall
be construed only to be a tenancy from day to day subject to all of the
covenants, conditions and obligations hereof except that the Base Rent shall be
1 50% of the rent normally due. Nothing herein shall be construed to give TENANT
any rights to holdover and to continue in possession of the Leased Premises
after expiration of the term hereof.
29. DEPOSIT
TENANT has deposited with LANDLORD a security deposit equal to the amount of one
full month's Base Rent. Said sum shall be held by LANDLORD as security for the
faithful performance by TENANT of all the terms, covenants, and conditions of
this Lease to be kept and performed by TENANT. The deposit shall not bear
interest. If TENANT shall fully and faithfully perform every provision of this
Lease, the security deposit or any balance thereof shall be returned to TENANT
at the expiration of the Lease term. Said deposit was
made by check #_____, dated______________, for $_____________________________
30. RENEWAL
TENANT will have a right to renew the term of the Lease in accordance with this
section. Any such renewal will be on an "as-is" basis, subject to all the terms
of the Lease, except as to the amount of base rent (addressed below), as to
further renewal rights (of which there will be none), and as to any rent
concessions (of which there will be none).
If TENANT wishes to renew the Lease term for an additional five (5) years,
TENANT must (to preserve this right) give LANDLORD, no Iater than 210 days prior
to expiration date of the initial term, written notice of TENANT'S intent to
exercise the option contained in this section. The notice, to be affective, must
state the base rent TENANT proposes to pay, which rent must be fixed and fIat
throughout the renewal term and must be not less than the base rent payable
immediately prior to the expiration of the initial five (5) year term (excluding
any portion attributable to the amortized cost of any parking lot improvements
or HVAC cooling capacity improvements discussed elsewhere).
Within ten (10) days after receiving that notice, LANDLORD will offer the Leased
Premises to Summit Medical Systems, Inc. ("Summit") pursuant to the expansion
option in Summit's lease. Summit's lease requires Summit to exercise its option,
if at all, within thirty (30) days after receiving LANDLORD'S offer. If Summit
exercises its option, LANDLORD will promptly notify TENANT and TENANT'S notice
under the previous paragraph will be null and void. If Summit fails to exercise
its option, LANDLORD will promptly give TENANT written notice of that fact and
the base rent LANDLORD proposes to charge during the renewal term.
If the parties' respective proposals for base rent differ, LANDLORD and TENANT
will negotiate in good faith the rent for the five (5) year renewal term. The
date TENANT receives the notice described in the last sentence of the previous
paragraph is hereinafter described as the Negotiation Starting Date. If the
parities have failed to agree on the rent within thirty (30) days after the
Negotiation Starting Date, either party may, within the following five (5) days
notify the other party of its intent to have a third party mediate their
disagreement. The mediator's expenses will be paid by the party calling for
mediation. If neither party makes a timely request for mediation, the parties'
negotiation period will end 45 days after the Negotiation Starting Date. If
either party makes a timely request for mediation, the parties' negotiation
period will end sixty (60) days after the Negotiation Starting Date.
31. EXECUTIVE COMMITTEE APPROVAL
TENANT will have the right to cancel the Lease, without further obligation on
either party's part, if its executive committee votes not to approve the Lease
and if TENANT so notifies LANDLORD in writing no later than five (5) days after
the date the last party executes this lease. Landlord will return all pre-paid
rent and/or security deposits made before Iease cancellation.
32. OTHER PROVISIONS
The invalidity or unenforceability of any provisions hereof shall not affect or
impair the validity of any other provision. The headings herein are inserted
only for convenience and reference and shall have no substantive import. Where
necessary, the singular imports the plural and vice versa, and masculine,
feminine and neuter pronouns and expressions are interchangeable. The Lease
shall bind and inure to the benefit of the LANDLORD and TENANT, their respective
heirs, administrators, legal representatives, successors and assigns.
During the term of the Lease, LANDLORD'S acceptance of an amount which is less
then the amount due at that time, will be deemed partial payment only, not
payment in fulI.
This Lease shall be governed by Minnesota Law.
One or more waivers of any provision by either party shall not be construed as a
waiver of subsequent breach of same. Failure to enforce or delay in enforcing
any right hereunder will not
be construed as a waiver thereof. Each party expressly (a) consents to the
maintaining of any such action in any court of competent subject matter
jurisdiction, and (b) agrees that the mailing, with postage pre-paid, registered
or certified mail, of any complaint or other legal process to it, at the address
stated in this Lease for notices, as updated by subsequent written notice of a
new address.
TENANT and any guarantors agree to provide LANDLORD with a current financial
statement on or before (4) months after the end of their fiscal year. The
financial statement shall meet generally accepted accounting principles.
TENANT hereby agrees that in the event of a purchase of the Leased Premises by
another party, TENANT will sign a Lease Estoppel Agreement, stating that this
Lease agreement between TENANT and LANDLORD is in full force and effect and that
all covenants herein have been met. Any uncompleted covenants should be noted
and listed on the Lease Estoppel Agreement.
33. ADDlTIONAL SPACE
Exhibit "A" and "B" identifies a portion of the building as space "G" with
approximately 1680 sq. ft. which is not included in Summit Medical's obligated
expansion space. TENANT shall have the obligation to expand into said space,
during its lease term, or extended lease term, if any other tenant or Summit
Medical does not wish to lease said space during the terms of their leases. In
no event shall TENANT be required to take said space before Summit Medical is
obligated to expand or declines to expand into its expansion space which is on
the same floor and contiguous to the south. The terms of the lease on the
expansion space shall be the same as then exists in the TENANT'S lease and shall
remain a part of the lease. The space shall be taken "as is", but shall have an
acoustical ceiling and the same level of Iighting as TENANT'S Contiguous space,
and shall be accompanied by a certificate of occupancy from the City of
Minnetonka. LANDLORD shall provide a doorway to said expansion at its sole
expense.
34. RIGHT TO EXPAND
Right of First Offer . TENANT shall have a right of first offer ("ROFO
Right") on all available space in the building, subject to rights previously
granted to Summit Medical, Inc., as Iisted bn Exhibit "F".
A. Upon written request by TENANT ("TENANT'S ROFO Notice") LANDLORD
shall within ten (10) days thereafter give written notice to TENANT ("LANDLORD'S
ROFO Notice") stating: (1) any portion of the ROFO Space ("Subject ROFO Space")
which is, or will during the following twelve (12) months become available for
lease; (2) the estimated date of availability ("Target Delivery Date"); (3) the
market rate for the Subject ROFO Space (which shall be based on prevailing net
market rental rates and finish allowances for comparable space as reasonably
determined by LANDLORD and TENANT. (4) The TENANT finish allowance, the LANDLORD
will provide for subject space. Before or after TENANT'S ROFO Notice, if
LANDLORD desires to offer any portion of the ROFO Space for lease, LANDLORD
shall first deliver a LANDLORD'S ROFO Notice relating to the Subject ROFO Space.
TENANT shall
notify LANDLORD within ten (10) days after LANDLORD'S ROFO Notice is given
whether it desires to exercise its right to lease the Subject ROFO Space.
B. If TENANT exercises the ROFO Right with respect to the Subject ROFO
Space, such space shall be added to and become part of the Leased Premises for
the remaining term of the Lease (including any Extension Terms) on all of the
terms and conditions of this Lease, except that:
1. The Subject ROFO Space shall be added to the Leased Premises
effective on the earlier of (the "Delivery Date"): (a) the date TENANT
occupies the Subject ROFO Space, or (b) the date on which LANDLORD
delivers the Subject ROFO Space to TENANT in the condition provided in
this Paragraph (which, without TENANT'S consent, shall not be before
the Target Delivery Date).
2. Effective on the Delivery Date, (a) the Base Net Rent for the
Subject ROFO Space shall be a payable at the Market Rate determined by
LANDLORD and TENANT as provided above; (b) TENANT'S proportionate
share of Operating Costs shall be adjusted appropriately to take into
account the area, in the Subject ROFO Space, and Operating Costs shall
thereafter be payable at the same rate per square foot as then payable
for the Initial Leased Premises and shall thereafter be subject to the
same adjustments as provided in this Lease; and (c) there shall be no
period of rent abatement or free rent with respect to the Subject ROFO
Space.
3. The Subject ROFO Space shall be delivered in an as is condition,
except that LANDLORD shall furnish the TENANT Finish Allowance
specified in LANDLORD'S ROF0 Notice, which shall be taken into account
by LANDLORD and TENANT in determining the Market Rate for the Subject
ROFO Space. The TENANT Finish Allowance shall be applied to TENANT
Finish Costs relating to the Subject ROFO Space. No refund or credit
shall be made for any unused portion of the TENANT Finish Allowance.
4. As of the Delivery Date, the term "Leased Premises" shall be deemed
to refer to and include the Subject ROFO Space, except as expressly
provided otherwise in this Lease.
5. Notwithstanding anything to the contrary contained in this Lease,
any ROFO Space added to the Leased Premises during the Iast three (3)
years of the Extension term, the LANDLORD, at it's sole discretion,
may require the TENANT to sign a lease for the ROFO for a term to be
specified, but in no case Ionger than three years from the date the
ROFO right is exercised; determination of the Market Rate shall take
into account the need to fully amortize any TENANT Finish Allowance,
leasehold improvements, leasing commissions, and other transaction
costs of LANDLORD over the remaining Extension Term.
If TENANT fails to timely exercise the ROFO Right, LANDLORD shall be
free to lease such space on any term (including any renewal or
extension of any such lease); provided,
that if a lease or letter of intent is executed but expires or
terminates during the period the ROFO Right is in effect, then such
space shall again be subject to the ROFO Right as provided in this
Paragraph.
C. Tenant's right to exercise the ROFO Right with respect for any portion of the
ROFO Space is subject to the condition that, at the time that TENANT delivers
its written notice of exercise with respect to such portion of the ROFO Space,
TENANT is not in default under any of the terms or conditions of this Lease.
Further, the ROFO Right shall automatically terminate upon the earliest to occur
of (1) the expiration of termination of this Lease; (2) the termination of
TENANT'S right to possession of the Leased Premises; or (3) the assignment of
this Lease by TENANT or the sublease by TENANT of all or any part of the Leased
Premises.
D. Within ten (10) days after written request by LANDLORD, TENANT shall execute
and deliver an instrument in form reasonably satisfactory to LANDLORD confirming
any exercise or termination of the ROFO Right.
E. The ROFO Right shall only continue until March 31, 1998, and, unless
previously exercised, shall thereupon automatically terminate. Notwithstanding
anything to the contrary contained herein, the ROFO Right shall be subordinate
to (1) all leases, renewals, extensions or expansions under letters of intent or
rights or options in leases existing as of; the date of this Amendment or the
date TENANT'S ROFO notice was received by LANDLORD and (2) any renewals or
extensions of any leases for space in the Building existing as of the date of
this Amendment or the date TENANT'S ROFO notice was received by LANDLORD or
entered into after TENANT fails to exercise its ROFO Right, whether or not
pursuant to an option or right in such lease.
35. EXHIBITS AND ADDENDUMS
This instrument contains all of the agreements made between the parties and may
not be modified orally or in any manner other than by agreement in writing
signed by all parties to this Lease. The following exhibits and addendums are
attached and hereby made a part of this Lease:
_____ Exhibit "A & B" Building Floor Plan, Detailed Floor Plan or
Blueprint and LANDLORD Finishing Schedule
_____ Exhibit "C" LANDLORD'S Improvements
_____ Exhibit "D" TENANT'S and/or Guarantor(s)
Financial Statement Rider
_____ Exhibit "E" Material Use Rider
_____ Exhibit "F" Summit Medical's rights to expand/extend
The signatories below warrant that they are duly authorized to enter into this
Lease representing the parties hereto.
IN WITNESS WHEREOF, the parties heretq have Caused this Lease to be executed the
day and year first above written.
LANDLORD TENANT
RED CIRCLE L.L.P. CHRONIMED INC.
By: By:
XXXXXX S MARFlEL XXXXX X. XXXXXXXXXX
Its General Partner Its Vice President of Operations
Date Date
EXHIBIT "C"
LANDLORD IMPROVEMENTS
Upgrade
Existing rest rooms: paint the walls, clean the ceramic tile, repair as
needed and generally clean.
Remove large wash sinks in restrooms and replace with typical
Iavatories
Existing ceiling; replace tile (broken, mismatched Or dirty) and light
fixtures (defective or damaged), where needed. LANIDLORD may paint
tiIes tO match.
Hallway tO existing restrooms
New door at vestibule (area between restroOms and elavatOr)
Ceiling at 11' or current height throughout space.
Ceiling tile to match or painted to match design of existing
ceiling Ught fixtures to be similar to existing fixtures
Existing sprinkIer heads raised Or lOwered to correct height
(coordinated with TENANT work).
HVAC duct work raised or lowered to correct height and air diffusers to
match current space.
New men's and women's restroom
2 stalls, one handicap access in women's; one handIcap access
stall, one urinal in men's. Location to be determined Install
slop sink.
Install all windows marked as `existing' on Exhibit A & B attached
LANDLORD AGREES TO COORDINATE THE ABOVE WORK WITH TENANT'S REMODEL WORK IN ORDER
TO AVOID DUPLICATION OR WASTE OF EFFORT AND RESOURCES.
LANDLORD AGREES TO CREDIT TENANT WITH THE DIFFERENCE BETWEEN THE COST OF
PARABOLIC LIGHTS AND NORMAL FLOURESCENT LIGHTS IN THE AREA THAT DOES NOT HAVE
LIGHTS NOW.
EXHIBIT "D"
FINANCIAL STATEMENT RIDER
I hereby Certify that the attached financial statements titled Chronimed Annual
Report 1996, Chronimed First Quarter Interim Report and Chronimed For 10-Q
quarter ending Seotember 27. 1996 dated _________________, is true and correct
and has been prepared with my knowledge using Generally Accepted Accounting
Principles. I have signed and dated that attached financial statement.
Signature
Xxxxxx X. Xxxxx
Name (Please Print)
CHRONIMED INC.
Company Name
Senior Vice President and Chief Financial Officer
Company Title
00000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx. XX 00000
Address
(000)000-0000
Phone Number
Date
EXHIBIT "E"
MATERIAL USE RIDER
The TENANT, its employees and/or invitees will not, without the LANDLORD'S prior
written consent , bring onto the Leased Premises, common area, or allow thereon,
any "hazardous substance" within the meaning of any federal or state statute,
within the meaning of the Minnesota Environmental Response and Liability Act, or
any successor statute, thereon or within 200 feet thereof any "hazardous
substance" except in amounts not requiring any Federal or State EPA permit and
only in amounts aooropriate to (and products required in) the normal practice of
pharmacy and pharmaceutical compounding or natural gas or petroleum product, or
refuel any vehicle thereon or within 200 feet thereof.
The LANDLORD may withhold or condition consent as it sees fit, in its absolute
discretion. Notwithstanding any termination of the Lease, the TENANT will
indemnify and hold the LANDLORD harmless from any cost, expense, or damage
resulting from a violation of this paragraph, and will, upon request from the
LANDLORD promptly remove, at its sole expense, any material so brought or
released in violation of this paragraph. The LANDLORD may, from time to time
inspect the Leased Premises to determine compliance with this paragraph, and
require the TENANT to certify to such compliance. A violation of this paragraph,
is a breach for which the LANDLORD need not provide notice or a period to cure,
and any contrary provision in this Lease is hereby modified to so provide.
EACH ITEM ON THE FOLLOWING CHECKLIST MUST BE ANSWERED.
1. Will any chemicals be used or stored on the premises? YES. If yes, list
all chemicals that are to be used or stored in the premises:
Various chemicals and chemical combinations will be stored in the facility.
These chemicals and chemical compounds represent products typically found in the
practice of pharmacy, and in relatively small quantities.
2. Will any materials be used or stored on the premises that appear on any
local, state or federal list of "HAZARDOUS SUBSTANCES"? YES. If yes,
list all items in the space provided.
Hazardous substances, stored in the facility, will be in amounts not requiring
any Federal or State EPA permit and only in amounts required for the practice of
pharmacy.
3. Do you have any permits to handle, use or store "HAZARDOUS SUBSTANCES"?
NO. If yes, attach copies of these permits to this exhibit.
Permits are not required for the quantities or amounts used in the practice of
pharmacy.
4. Will any fIammable be used or stored on premises? YES. If yes, list
type, quantities and how the flammable will be stored.
Alcohol and other solvents are used in the practice of pharmacy and will be
stored in a fire resistant cabinet.
Exhibit "E"
Material Use Rider
Exhibit "E"
Material Use Rider
Page 2
I certify that the above information is true, complete and correct. Further, I
understand and agree that no substance other than those listed above and
approved by the LANDLORD may be used or stored on the premises and that any
additions to the above list must be approved in writing by the LANDLORD or its
authorized agent.
Xxxxx Xxxxxxxxxx
----------------
(Please Print)
Its Vice President of Operations
----------------------------
(Please Print)
36. EXPANSION OPTIONS
TENANT shall have options to lease all or part of the space in the
Building not then included in the Leased Premises, as provided in this Section
36. LANDLORD agrees to offer to TENANT, some time between the beginning of the
fourth Lease Year and the end of the sixth Lease Year, all of the space in the
Building not included in the Leased Premises (provided LANDLORD need not offer
common area space unless it is otherwise offering, at that time, all of the
remainder of the space in the Building). LANDLORD need not offer all of such
space to TENANT at one time. LANDLORD agrees not to enter into any leases with
third parties for such space for a term (including extension ootions) in excess
of five years, except as provided below. Upon request by TEl'lANT, LANDLORD will
notify TENANT, with respect to any leases for such space, of the expiration
dates of such ieases so that TENANT will be able to anticipate when such space
will be available LANDLORD will offer all or a portion of such space to TENANT
by wriften notice to TENANT, identifying the anticipated date of delIvery.
TENANT will have until the later of 30 days after rece!pt of LANDLORD'5 notice
or the date 60 days prior to the beginning of the fourth Lease Year to accept
such space as part of the Leased Premises, which acceptance xxxxx be in wnting.
If TENANT accepts LANDLORD's offer of any of the remaining space in the
Building, TENANT shall lease such space for a term equal to the greater of 5
years or the remaining term of this Lease at such time, upon the same terms and
conditions as contained in this Lease
If the term for the Leased Premises prior to the exercise of an
expansion option would expire prior to the expiration of the term with respect
to the space added by exencise of an expansion option, the term for the Leased
Premises prior to the exercise of an expansion option shall be automatically
extended to coincide with the term with respect to the expansion option space,
and the Base Rent per rentable square foot shall be computed on the same basis
as for the expansion option space. The rent and the term with respect to the
expansion option space will commence upon LANDLORD's delivery of exclusive
possession to TENANT after LANDLORD's completion of the tenant improvements
required by TENANT and delivery to TENANT of LANDLORD's architect's certificate
of completion and a certificate of occupancy by the City of Minnetonlta. If
TENANT accepts LANDLORD's offer with respect of any of the expansion option
space and LANDLORD is unable to deliver exclusive possession of such space to
TENANT in the condition required, together with the two required certificates,
on or before the date 180 days after LANDLORD's anticipated date of delivery set
forth in LANDLORD's offer, TENANT may terminate this Lease by giving 150 days'
prior wrirten notice to LANDLORD within 90 davs after the end of such 180-dav
period, in which event neither parry shall have any farther obligations under
this Lease, except for LANDLORD's obligation to return the seccrity deposit as
required herein and other obligations which expressly sur'vive the termination
or expiration of this Lease. If TENANT does not exercise its option as to any
portion of the expansion option space within the penod provided above or if
TENANT terminates its expansion option with respect to the Expansion Space
pursuant to Section 1 above, LANDLORD may offer such space to third parties for
any term desired by LANDLORD. If LANDLORD does not lease a portion of the
expansion option space
(including the Expansion Space) not accepted by TENANT within 6 months after the
expiration of TENANT's period to exercise its option, LANDLORD shall again offer
such space to TENANT on the same terms and conditions set forth above. except
TENANT must exercise its option within 10 days after LANDLORD's offer. LANDLORD
shall also offer any portion of the expansion option space (including the
Expansion Space) not accepted by TENANT which LANDLORD leases to third parties
when such space again becomes available on the sarrie terms and conditions set
forth above. except TENANT must exercise its option within 10 days after
LANDLORD's offer. Notwithstanding az'ytriitig to the contrary contained in this
Section 36, the Base Rent for all of the Leased Poses will be computed based on
the Market Rate Rent, as defined in Section 38 below, if this Lease rernains in
existence (other than by reason of an extension pursuant to Section 37 below)
after the end of the fourteenthi~ase Year. If TENANT exercises any expansion
option,
37. E"';I'ENSION OPTIONS
TENANT has two (2) extension ootions to extend the Lease term for five
(5) years each, if TENANT notifies LANDLbRD in writing at least one hundred
twenty (120) days prior to the expiration of the Lease term, as the same may
have been previously extended. TENANT may not exercise its second extension
option for the second extension term if it has not exercised its first extension
option for the first extension term. If TENANT exercises any of its extension
options, this Lease will be in full force and effect during the Lease term, as
so extended, subiect to all of the terms and conditions of this Lease, except
that the inriual Base Rent will be the Market Rate Rent. Any exercise of any
such option applies to the entirety of the Leased Premises, and TENANT shall
have no right to exercise any such option as to only a part thereof. If TENANT
exercises one of its extension options pursuant to this Section 37 and LANDLORD
thereafter offers space to TENANT pursuant to Section 36 which TENANT accepts
prior to what would have been the expiration of the Lease term prior to TENANT's
extension under this Section 37, the extension pursuant to Section 36 shall
apply and TENANT'5 extension pursuant to this Section 37 shall be deemed
rescihded, provided such extension option pursuant to this Section 37 shall
remain available at the end of the Lease term, as so extended pursuant to
Section 36.
