EXHIBIT 10.18
000 XXXX XXXXXX XXXXX
XXXXXXX, XXXXXXXX
OFFICE LEASE
BETWEEN
303 XXXXXX REALTY L.L.C.
LANDLORD
AND
IMANAGE, INC.
TENANT
DATED AS OF MARCH 17, 2003
TABLE OF CONTENTS
Page
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1. CERTAIN PROVISIONS AND DEFINITIONS ............................... 1
2. GRANT AND ACCEPTANCE OF LEASE .................................... 3
3. RENT ............................................................. 3
4. BASE RENT ........................................................ 4
5. ADDITIONAL RENT .................................................. 4
6. USE OF PREMISES .................................................. 9
7. DELIVERY OF POSSESSION; TENANT'S WORK; LANDLORD'S WORK ........... 10
8. SERVICES ......................................................... 12
9. CONDITION AND CARE OF PREMISES ................................... 16
10. SURRENDER OF PREMISES ............................................ 20
11. HOLDING OVER ..................................................... 22
12. RULES AND REGULATIONS ............................................ 22
13. RIGHTS RESERVED TO LANDLORD ...................................... 23
14. ALTERATIONS ...................................................... 26
15. ASSIGNMENT AND SUBLETTING ........................................ 28
16. WAIVER OF CERTAIN CLAIMS, INDEMNITY BY TENANT .................... 32
17. DAMAGE OR DESTRUCTION BY CASUALTY ................................ 33
18. EMINENT DOMAIN ................................................... 36
19. DEFAULT; LANDLORD'S RIGHTS AND REMEDIES .......................... 37
20. RIGHTS OF MORTGAGEES AND GROUND LESSORS .......................... 42
21. DEFAULT UNDER OTHER LEASES ....................................... 45
22. INSURANCE AND SUBROGATION ........................................ 45
23. NONWAIVER ........................................................ 47
24. ESTOPPEL CERTIFICATE ............................................. 47
25. TENANT CORPORATION, LIMITED LIABILITY COMPANY OR PARTNERSHIP ..... 47
26. REAL ESTATE BROKERS .............................................. 48
27. NOTICES .......................................................... 48
28. MISCELLANEOUS .................................................... 49
29. SECURITY DEPOSIT ................................................. 53
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30. SUBSTITUTION FOR PARTIAL FLOOR PREMISES .......................... 56
31. LANDLORD ......................................................... 58
32. TITLE AND COVENANT AGAINST LIENS ................................. 58
33. COVENANT OF QUIET ENJOYMENT ...................................... 58
34. RIGHT OF FIRST OFFER ............................................. 58
35. RENEWAL OPTION ................................................... 62
36. MARKET RENTAL RATE ............................................... 63
37. BUILDING DIRECTORY ............................................... 65
38. PARKING .......................................................... 65
39. SIGNAGE .......................................................... 66
40. SATELLITE DISH ................................................... 67
41. ERISA MATTERS .................................................... 68
42. PRE-OCCUPANCY CONTRACTION/EXPANSION OPTION ....................... 69
43. STORAGE CLOSET/STORAGE AREA ...................................... 71
44. EXCULPATORY PROVISIONS ........................................... 72
EXHIBITS
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A Floor Plan(s) of Premises
B Workletter
C Other Definitions
D Rules and Regulations
E Cleaning Specifications
F Existing 10% Plans
G Description of Existing FF&E
ii
OFFICE LEASE
DATED AS OF: March 17, 2003
BETWEEN: 303 Xxxxxx Realty L.L.C. ("LANDLORD")
(Address) 000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
AND: iManage, Inc. ("TENANT")
(Address) 000 Xxxxx Xxxx - Xxxxx 000
Xxxxxx Xxxx, Xxxxxxxxxx 00000
LOCATION: Entire 28th Floor and a portion of the 27th Floor, 000 Xxxx
Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000-0000
Landlord and Tenant hereby covenant and agree as follows:
1. CERTAIN PROVISIONS AND DEFINITIONS. The following provisions and
definitions are an integral part of this lease:
(a) "BASE RENT": The respective amounts for each Lease Year of the
Initial Term set forth in the following table (based on the respective
rates of Base Rent per square foot of Rentable Area set forth in the
following table):
ANNUAL BASE RENT
PER SQUARE FOOT OF
LEASE ANNUAL MONTHLY RENTABLE AREA OF
YEAR BASE RENT BASE RENT THE PREMISES
---- ----------- ----------- ------------------
1 $588,495.00 $ 49,041.25 $15.00
2 $606,149.85 $ 50,512.49 $15.45
3 $624,197.03 $ 52,016.42 $15.91
4 $643,028.87 $ 53,585.74 $16.39
5 $662,253.04 $ 55,187.75 $16.88
6 $682,261.87 $ 56,855.16 $17.39
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7 $702,663.03 $ 58,555.25 $17.91
8 $723,848.85 $ 60,320.74 $18.45
9 $745,427.00 $ 62,118.92 $19.00
10 $767,789.81 $ 63,982.48 $19.57
11 $790,937.28 $ 65,911.44 $20.16
12 $814,477.08 $ 67,873.09 $20.76
13 (through end
of Initial Term) $839,193.87 $ 69,932.82 $21.39
(b) "BROKER(S)": Xxxxxxx & Wakefield of Illinois, Inc.
(c) "BUILDING": The office building located at 000 Xxxx Xxxxxx
Xxxxx, Xxxxxxx, Xxxxxxxx 00000-0000.
(d) "COMMENCEMENT DATE": The first to occur of (i) August 1, 2003,
and (ii) the date Tenant occupies the Premises for the conduct of any
business operations therefrom..
(e) "EXPIRATION DATE": July 31, 2016.
(f) "INITIAL TERM": The period beginning on the Commencement Date
and ending on the Expiration Date.
(g) "LAND": The parcel(s) of real estate on which the Building is
located.
(h) "LANDLORD'S WORK": The work to be performed by or on behalf of
Landlord to ready the Premises for initial occupancy by Tenant, as more
particularly described in Section 7(c) hereof.
(i) "LEASE YEAR": If the Commencement Date is the first day of a
calendar month, the period of twelve (12) consecutive months commencing on
the Commencement Date; if the Commencement Date is not the first day of a
calendar month, the period commencing on the Commencement Date and ending
on the last day of the twelfth (12th) full calendar month of the Term;
and, in either case, each consecutive twelve (12) month period thereafter
which falls in whole or in part during the Term.
(j) "PREMISES": The area indicated on Exhibit A on the 27th and 28th
floors of the Building, deemed to consist of 39,233 square feet of
Rentable Area (being 30,919 square feet of Rentable Area on
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the 28th floor and 8,314 square feet of Rentable Area on the 27th floor),
subject to pre-occupancy contraction or expansion as described in Section
42 hereof.
(k) "PROJECT": The Land and the Building, together with any other
improvements located on the Land, all equipment, fixtures, machinery,
systems, apparatus and personal property of Landlord located at or used in
connection with the Land or the Building from time to time.
(l) "SECURITY DEPOSIT": See Section 29.
(m) "TENANT ALTERATIONS": Any alteration, improvements or additions
(including decorations) to the Premises performed or to be performed by or
on behalf of Tenant, including, without limitation, the Tenant's Work, but
excluding any of Landlord's Work to be performed by or on behalf of
Landlord hereunder.
(n) "TENANT'S WORK": The work to be performed by or on behalf of
Tenant to ready the Premises for initial occupancy by Tenant, as more
particularly described in Section 7(b) hereof and in the Workletter.
(o) "TERM": The Initial Term and any extension or renewal of the
Initial Term specifically provided herein.
(p) "USE": General office use and other ancillary legally permitted
uses compatible and consistent with office usage at first-class office
buildings in Chicago, Illinois.
(q) "WORKLETTER": The Workletter attached hereto as Exhibit B.
SEE EXHIBIT C AND THE WORKLETTER FOR OTHER DEFINITIONS OF TERMS USED
HEREIN.
2. GRANT AND ACCEPTANCE OF LEASE. Landlord hereby leases the Premises to
Tenant and Tenant hereby accepts and leases the Premises from Landlord to have
and to hold during the Term, subject to the terms and conditions of this lease.
3. RENT. Base Rent, Additional Rent, Additional Rent Estimate and all
other amounts becoming due from Tenant to Landlord hereunder (collectively
"RENT") shall be paid in lawful money of the United States to Landlord at the
following address: 000 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000 or such other
address as Landlord shall designate in writing to Tenant from time to time,
without any demand and without any reduction, abatement, counterclaim, deduction
or set-off whatsoever, except as expressly provided herein, at the times and in
the manner hereinafter provided. Unpaid Rent which remains unpaid for five (5)
days after the due date shall bear interest at the Default Rate from the date
due until paid. The payment of Rent hereunder is independent of each and every
other covenant and agreement contained in this lease.
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4. BASE RENT.
(a) MONTHLY BASE RENT. Tenant shall pay Base Rent to Landlord in
equal monthly installments (herein called "MONTHLY BASE Rent"), in
advance, on or before the Commencement Date and on or before the first day
of each and every subsequent calendar month during the Term. If the Term
shall begin on any day other than the first day of a calendar month or end
on any day other than the last day of a calendar month, then the Monthly
Base Rent for any partial calendar month within the Term shall be prorated
on a per diem basis.
(b) BASE RENT ABATEMENT. Notwithstanding the terms of Section 4(a)
above, it is agreed that, so long as Tenant is not in default under this
lease beyond any applicable notice and cure period during any applicable
Abatement Month (as hereinafter defined), then, subject to the terms of
the last sentence of this subclause (b), Tenant shall be entitled to an
abatement of Monthly Base Rent attributable to the initial Premises being
leased hereunder for each of the following full calendar months (each such
month, an "ABATEMENT MONTH"): (i) the first twelve (12) full calendar
months of the Term, and (ii) the last two (2) full calendar months of
Lease Years 2, 3 and 4 (as the term "Lease Year" is defined in Section 1
above). The foregoing abatement of Base Rent shall not otherwise affect
Tenant's obligation to pay all other rentals due and owing during each
such respective Abatement Month, nor shall it affect any other obligations
of Tenant hereunder; and provided further, that Tenant shall not be
entitled to any such Base Rent abatement for any Abatement Month during
which Tenant is in default under this lease beyond any applicable notice
and cure period. The rental abatements described in this Section 4 shall
not apply with respect to any first offer space leased by Tenant under
Section 34 hereinbelow. Notwithstanding anything herein to the contrary,
Landlord shall have the right, at any time and from time to time during
the Term, to elect, by written notice to Tenant, to make a cash payment to
Tenant equal to the Monthly Base Rent attributable to the initial Premises
being leased hereunder for any one or more Abatement Months which have not
theretofore occurred, discounted to present value as of the date Landlord
makes such payment using a discount factor equal to one and one-half
percent (1 1/2%), in which case Tenant shall no longer be entitled to the
aforementioned abatement of Base Rent for the applicable Abatement
Month(s) for which Landlord has made such cash payment. Further,
notwithstanding anything herein to the contrary, if Tenant is in default
during any applicable Abatement Month, which default is not cured within
applicable notice and cure periods hereunder, then Tenant shall no longer
be entitled to any abatement of Monthly Base Rent under this subclause (b)
relative to such month, and such Monthly Base Rent shall be immediately
due and payable upon Landlord's demand therefor.
5. ADDITIONAL RENT. In addition to paying the Base Rent, Tenant shall also
pay as additional rent the amounts (collectively "ADDITIONAL RENT") determined
to be Tax Adjustment and Expense Adjustment in accordance with this Section 5:
(a) COMPUTATION OF ADDITIONAL RENT. Tenant shall pay as Additional
Rent for each Calculation Year the following amounts:
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(i) Tenant's Proportionate Share of Taxes for such Calculation
Year (the "TAX ADJUSTMENT"); plus
(ii) Tenant's Proportionate Share of Expenses for such
Calculation Year (the "EXPENSE ADJUSTMENT").
(b) PAYMENTS OF ADDITIONAL RENT; ADDITIONAL RENT ESTIMATE;
PROJECTIONS. Tenant shall pay Additional Rent to Landlord in the manner
hereinafter provided. The aggregate of payments required to be made by
Tenant on account of Additional Rent for any Calculation Year until actual
Additional Rent is determined is herein called "ADDITIONAL RENT ESTIMATE".
(i) Landlord may, at any time and from time to time prior to
the first Calculation Date and during the Term, deliver to Tenant a
written notice or notices ("PROJECTION NOTICE") setting forth:
(A) Landlord's reasonable estimates, forecasts or
projections (collectively, the "PROJECTIONS") of any or all of
Taxes and Expenses for such Calculation Year, and
(B) Tenant's Additional Rent Estimate (setting forth the
Expense Adjustment component and Tax Adjustment component
separately) based upon the Projections, being the Tenant's
Proportionate Share of the Projections. For information
purposes, it is hereby confirmed that, as of the date hereof,
Tenant's Additional Rent Estimate for the 2003 Calculation
Year is $13.84 per square foot of Rentable Area of the
Premises (subject to adjustment as permitted hereunder).
(ii) On or before the first (1st) day of the next calendar
month following Landlord's service of a Projection Notice, and on or
before the first day of each month thereafter, Tenant shall pay to
Landlord one-twelfth (1/12) of the Additional Rent Estimate shown in
the Projection Notice. Within thirty (30) days following Landlord's
service of a Projection Notice, to bring Tenant's payments of
Additional Rent Estimate current, Tenant shall also pay Landlord the
amount set forth in the Projection Notice, which shall equal the
Additional Rent Estimate shown in the Projection Notice less (A) any
previous payments on account of Additional Rent Estimate made for
such Calculation Year, and (B) total monthly installments on account
of Additional Rent Estimate not yet due and payable for the
remainder of such Calculation Year. Until such time as Landlord
furnishes a Projection Notice for a Calculation Year, Tenant shall
pay to Landlord a monthly installment of Additional Rent Estimate on
the first day of each month equal to the greater of the latest
monthly installment of Additional Rent Estimate or one-twelfth
(1/12) of Tenant's latest determined Additional Rent.
(c) READJUSTMENTS.
(i) Within one hundred eighty (180) days following the end of
each Calculation Year (or as soon thereafter as is reasonably
practicable), Landlord
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shall notify Tenant in writing (any such notice of Expenses and
Expense Adjustment herein called "LANDLORD'S EXPENSE STATEMENT") of
the amount of Expenses to be used in calculating the Expense
Adjustment for such Calculation Year, and of Tenant's Expense
Adjustment for such Calculation Year. If the Expense Adjustment owed
for such Calculation Year exceeds the Expense Adjustment component
of the Additional Rent Estimate paid by Tenant during such
Calculation Year, then Tenant shall, within thirty (30) days after
the date of Landlord's Expense Statement, pay to Landlord an amount
equal to the excess of the Expense Adjustment over the Expense
Adjustment component of the Additional Rent Estimate paid by Tenant
during such Calculation Year. If the Expense Adjustment component of
the Additional Rent Estimate paid by Tenant during such Calculation
Year exceeds the Expense Adjustment owed for such Calculation Year,
then Landlord shall credit such excess to Rent payable after the
date of Landlord's Expense Statement until such excess has been
exhausted, or may, at its option, pay such excess to Tenant within
thirty (30) days after delivery of Landlord's Expense Statement. If
this lease shall expire or be terminated prior to full application
of such excess, Landlord shall, within thirty (30) days thereafter,
pay to Tenant the balance thereof not theretofore applied against
Rent and not reasonably required for payment of Rent for the
Calculation Year in which the lease expires, subject to Tenant's
obligations under Section 5(e) hereof, provided Tenant shall have
vacated the Premises and otherwise surrendered the Premises to
Landlord in accordance with this lease and Tenant is not then in
default under this lease (provided that if any such default is cured
within applicable cure periods, then Tenant shall again be entitled
to such excess). Landlord's obligation to refund any such unapplied
excess shall survive the expiration or earlier termination of this
lease.
(ii) Following the end of each Calculation Year and within a
reasonable time period after Landlord shall have determined the
actual amount of Taxes to be used in calculating the Tax Adjustment
for such Calculation Year, Landlord shall notify Tenant in writing
(any such notice of Taxes and Tax Adjustment herein called
"LANDLORD'S TAX STATEMENT") of such Taxes for such Calculation Year.
If the Tax Adjustment owed for such Calculation Year exceeds the Tax
Adjustment component of the Additional Rent Estimate paid by Tenant
during such Calculation Year, then Tenant shall, within thirty (30)
days after the date of Landlord's Tax Statement, pay to Landlord an
amount equal to the excess of the Tax Adjustment over the Tax
Adjustment component of the Additional Rent Estimate paid by Tenant
during such Calculation Year. If the Tax Adjustment component of the
Additional Rent Estimate paid by Tenant during such Calculation Year
exceeds the Tax Adjustment owed for such Calculation Year, then
Landlord shall credit such excess to Rent payable after the date of
Landlord's Tax Statement until such excess has been exhausted, or
may, at its option, pay such excess to Tenant within thirty (30)
days after delivery of Landlord's Tax Statement. If this lease shall
expire or be terminated prior to full application of such excess,
Landlord shall, within thirty (30) days thereafter, pay to Tenant
the balance thereof not theretofore applied against Rent and not
reasonably required for payment of Rent for the Calculation Year in
which the
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lease expires, subject to Tenant's obligations under Section 5(e)
hereof, provided Tenant shall have vacated the Premises and
otherwise surrendered the Premises to Landlord in accordance with
this lease and Tenant is not then in default under this lease
(provided that if any such default is cured within applicable cure
periods, then Tenant shall again be entitled to such excess).
Landlord's obligation to refund any such unapplied excess shall
survive the expiration or earlier termination of this lease.
(d) BOOKS AND RECORDS. Landlord shall maintain books and
records showing Taxes and Expenses in accordance with sound
accounting and management practices. Tenant and its Representative
(as hereinafter defined) shall have the right to examine such books
and records showing Taxes and Expenses upon reasonable prior notice
and during normal business hours at any time within thirty (30) days
following Tenant's receipt of Landlord's Expense Statement (as it
relates to an examination of Expenses) or Landlord's Tax Statement
(as it relates to an examination of Taxes) provided for in Section
5(c). Unless Tenant shall take written exception to any item of
Taxes or Expenses, specifying in detail the reasons for such
exception as to a particular item within sixty (60) days after
Tenant's receipt of Landlord's Expense Statement or Landlord's Tax
Statement (as the case may be), Landlord's Expense Statement and
Landlord's Tax Statement, as applicable, shall be considered as
final and accepted by Tenant. Notwithstanding any exception made by
Tenant, Tenant shall pay Landlord the full amount of its Additional
Rent Estimate and its Additional Rent as determined by Landlord,
subject to readjustment at such time as any such exception may be
resolved in favor of Tenant. For purposes of the foregoing, the term
"REPRESENTATIVE" shall mean either a nationally recognized
independent certified public accounting firm licensed to do business
in the State of Illinois, or another accounting firm reasonably
acceptable to Landlord. For each examination of Landlord's books and
records, the employees of Tenant's Representative who personally
examine such books and records shall include a certified public
accountant, but if deemed necessary or appropriate by the accountant
may also include other real estate professionals who are experienced
in management of first-class office buildings. Tenant shall not
retain its Representative on a contingent fee basis. In the event
any audit conducted by Tenant's Representative determines that
Landlord's Expense Statement and Landlords Tax Statement overstated
Tenant's Additional Rent from the actual amount so required
hereunder for any Calculation Year by an amount in excess of five
percent (5%), Landlord shall be responsible for the prompt payment
of reasonable audit fees incurred by Tenant under this Section 5(d);
otherwise (i) Tenant shall be responsible for the prompt payment of
all audit and examination fees incurred under this Section 5(d), and
(ii) Tenant shall pay Landlord all out-of-pocket costs and expenses
incurred by Landlord in connection with such audit.
(e) PRORATION AND SURVIVAL. With respect to any Calculation
Year which does not fall entirely within the Term, Tenant shall be
obligated to pay as Additional Rent for such Calculation Year only a
pro rata share of Additional Rent as hereinabove determined, based
upon the number of days of the Term falling within the Calculation
Year. Following expiration or termination of this lease, Tenant
shall pay any Additional Rent due to Landlord within thirty (30)
days after the date of Landlord's Expense Statement or Landlord's
Tax Statement (as the case may be) sent to Tenant. Without
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limiting other obligations of Tenant which survive the expiration or
termination of this lease, the obligations of Tenant to pay
Additional Rent provided for in this Section 5 shall survive the
expiration or earlier termination of this lease. No interest or
penalties shall accrue on any amounts which Landlord is obligated to
credit or pay to Tenant by reason of this Section 5.
(f) NO DECREASE IN BASE RENT. In no event shall any Additional
Rent result in a decrease of the Base Rent payable hereunder.
(g) NO REPRESENTATION OR WARRANTY. Tenant acknowledges that
neither Landlord, nor any of its respective agents or employees, has
made or does hereby make any representation or warranty whatsoever
to Tenant as to the amount of Taxes, Expenses, Tax Adjustment or
Expense Adjustment or any component thereof which may become payable
during the Term.
(h) ADDITIONAL RENT ABATEMENT. Notwithstanding the terms set
forth above in this Section 5, it is agreed that, so long as Tenant
is not in default under this lease beyond any applicable notice and
cure period during any applicable Additional Rent Abatement Month
(as hereinafter defined), then, subject to the terms of the last
sentence of this subclause (h), Tenant shall be entitled to an
abatement of Additional Rent attributable to the initial Premises
being leased hereunder for each of the following full calendar
months (each such month, an "ADDITIONAL RENT ABATEMENT MONTH": the
first twelve (12) full calendar months of the Term. The foregoing
abatement of Additional Rent shall not otherwise affect Tenant's
obligation to pay all other amounts due and owing under this lease
during each such respective Additional Rent Abatement Month, nor
shall it affect any other obligations of Tenant hereunder; and
provided further, that Tenant shall not be entitled to any such
Additional Rent abatement for any Additional Rent Abatement Month
during which Tenant is in default under this lease beyond any
applicable notice and cure period. The rental abatements described
in this Section 5 shall not apply with respect to any first offer
space leased by Tenant under Section 34 hereinbelow. Notwithstanding
anything herein to the contrary, Landlord shall have the right, at
any time and from time to time during the Term, to elect, by written
notice to Tenant, to make a cash payment to Tenant equal to the
Additional Rent attributable to the initial Premises being leased
hereunder for any one or more Additional Rent Abatement Months which
have not theretofore occurred, using the then Additional Rent
Estimate in effect at the time of such payment, all discounted to
present value as of the date Landlord makes such payment using a
discount factor equal to one and one-half percent (1 1/2%), in which
case Tenant shall no longer be entitled to the aforementioned
abatement of Additional Rent for the applicable Additional Rent
Abatement Month(s) for which Landlord has made such cash payment;
provided further, that Tenant's Additional Rent obligations under
this lease relative to any such Additional Rent Abatement Month(s)
for which Landlord has made such cash payment shall be fixed at the
monthly "Additional Rent Estimate" amount used as the basis for such
cash payment calculation, and there shall be no adjustment or
reconciliation on account of actual Expenses or Taxes relative to
such month(s) under Section 5(c) above. Further, notwithstanding
anything herein to the contrary, if Tenant is in default during any
applicable Additional Rent Abatement Month, which default is not
cured within applicable notice and cure periods hereunder,
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then Tenant shall no longer be entitled to any abatement of
Additional Rent under this subclause (h) relative to such month, and
such Additional Rent payable for such Additional Rent Abatement
Month shall be immediately due and payable upon Landlord's demand
therefor.
6. USE OF PREMISES.
(a) USE. Tenant shall use and occupy the Premises as set forth in
Section 1(p) hereof only and for no other use or purpose.
(b) COMPLIANCE WITH REQUIREMENTS. Subject to the terms of the next
succeeding sentence, Tenant shall comply, in all material respects, with
all applicable Laws (hereinafter defined) now or hereafter in force, and
with all applicable insurance underwriters regulations and other
requirements, respecting all matters of occupancy, condition or
maintenance of the Premises, whether any of the foregoing shall be
directed to Tenant or Landlord and whether imposed on the owner or
occupant of the Premises. Notwithstanding the foregoing, but subject to
the provisions of Section 9(e) and 9(f) regarding Tenant's obligations
with respect to "Hazardous Substances" and "ADA" (as such terms are
defined therein), Tenant shall not be obligated to make any structural
alterations or capital improvements required by changes in Laws following
the Commencement Date, to the extent similar alterations or improvements
will be required to be made in the Building as a whole as a result of such
changes in Law (i.e., as distinguished from alterations or improvements
made necessary by Tenant's particular use of the Premises or required to
be made to, or made necessary by, Tenant's Work or other Tenant
Alterations), and all such structural alterations or capital improvements
which are not so required to be made by Tenant shall instead be made by
Landlord (subject to reimbursement as part of "Expenses", as and to the
extent permitted in Exhibit C hereto). "LAWS" means all statutes, laws,
ordinances, codes, rules and regulations, orders and directions of public
officials or other acts having the force or effect of law, of all federal,
state, county, municipal and other agencies, authorities or bodies having
jurisdiction over the Premises. Tenant shall not make or permit any use of
the Premises or the Building, or do or permit to be done anything in or
upon the Premises or the Building, or bring or keep anything in the
Premises or the Building, which directly or indirectly is forbidden by any
of the foregoing or which may be dangerous to persons or property, or
which may invalidate or increase the rate of insurance on the Building,
its appurtenances, contents or operations, or which would tend to create
or continue a nuisance or which is contrary to or prohibited by the terms
and conditions of this lease.
(c) LANDLORD COMPLIANCE. Without limiting Landlord's obligations
under Section 6(a) above (i.e., as it relates to certain structural or
capital improvements required based on changes in Laws following the
Commencement Date) and under Section 9 hereof, but subject to Section 16
and Section 17 below, Landlord shall comply, in all materials respect,
with all applicable Laws pertaining to the "core and shell" of the
Building (as defined in Section 17(e) below), including the public areas
of the Building, or otherwise relating to Landlord's performance of any
maintenance or repair obligations imposed upon Landlord hereunder. For
purposes of this Section 6(c), it is understood and agreed that (i) any
costs incurred by Landlord relative to such compliance activities under
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this Section 6(c) may be included as part of "Expenses" hereunder (subject
to the terms of Section 9 hereof and subject to the limitations expressly
provided in the definition of Expenses in Exhibit C hereto), and (ii)
Tenant shall have no claim against Landlord relative to noncompliance of
Laws under this Section 6(c) or Section 6(b) above or Section 9 below if
any such noncompliance of Laws does not materially adversely impact
Tenant's use and quiet enjoyment of any portion of the Premises in
accordance with the terms of this lease, and (iii) Tenant shall reasonably
cooperate with Landlord in allowing access to the Premises, subject to
prior scheduling with Tenant, to enable Landlord to perform any compliance
work under this Section 6(c) or under Section 6(b) above which is required
within the Premises.
7. DELIVERY OF POSSESSION; TENANT'S WORK; LANDLORD'S WORK.
(a) DELIVERY OF POSSESSION. Landlord shall deliver possession of the
Premises to Tenant within three (3) business days following the date of
mutual execution of this lease by Landlord and Tenant, in order for Tenant
to commence with the Tenant's Work as described in Section 7(b) below. The
date Landlord so delivers possession of the Premises to Tenant is referred
to herein as the "TURNOVER DATE".
(b) TENANT'S WORK.
(i) Subject to the terms of Section 7(c) below pertaining to
Landlord's Work and the terms of the Workletter pertaining to
Landlord's disbursement of the "Allowance" and the "Space Plan
Allowance" described therein, Tenant shall, at its sole cost and
expense, perform such work as may be necessary or desired by Tenant
to improve the Premises for occupancy, all subject to and in
accordance with the provisions of this lease, including, without
limitation, the provisions of the Workletter attached hereto. All
work referred to in this subparagraph, which work is to be
constructed prior to the Commencement Date hereof, is hereinafter
referred to as "TENANT'S WORK". Tenant, at Tenant's option, may
retain Landlord as construction manager for all or any portion of
the Tenant's Work, if Landlord agrees to perform such construction
management services. In the event Tenant elects to retain Landlord
as construction manager, and Landlord agrees to perform such
construction management services, Tenant and Landlord shall, at
Landlord's request, enter Landlord's standard form of Tenant
Construction Agreement for similar work in the Building, including
such fees payable to Landlord as may be mutually agreed-upon by the
parties. In the event Tenant does not elect to engage Landlord as
construction manager, then Tenant shall have the right to retain its
own general contractor for construction of the Tenant's Work, which
general contractor shall be subject to Landlord's approval, not to
be unreasonably withheld), as provided in the Workletter. Tenant
hereby acknowledges and agrees that, in connection with the Tenant's
Work, Tenant and any and all contractors performing Tenant's Work
shall comply, in all respects, with Landlord's construction-related
rules and regulations for the Building, a copy of the current draft
of which having heretofore been made available to Tenant for review
(it being understood that Landlord may hereafter revise, finalize
and/or update said
10
rules and regulations from time to time and Tenant shall comply with
all such revised construction-related rules and regulations so long
as any material changes from the draft thereof heretofore made
available to Tenant are uniformly imposed, in general, upon other
tenants performing construction work at the Building).
(ii) In the event Tenant elects to employ an engineer
designated by Landlord in the preparation of any portion of the
plans, or for the performance of any portion of Tenant's Work,
Tenant shall employ and be responsible for all fees of said engineer
in preparing the plans or portion thereof and for any portion of
Tenant's Work performed by said engineer. In the event Tenant has
elected not to employ Landlord's designated engineer in the
preparation of the plans, Landlord reserves the right to have the
plans reviewed by Landlord's designated engineer and Tenant shall
reimburse Landlord for all out-of-pocket expenses incurred by
Landlord for such review. Landlord's approval shall be required of
engineering plans and specifications, whether prepared by Landlord's
designated engineer or another engineer, which approval shall not be
unreasonably withheld, conditioned or delayed as provided in the
Workletter. Tenant shall not permit noise from construction of
Tenant's Work to disturb other tenants in the Building. Tenant's
Work which does so disturb other tenants shall be performed after
regular working hours.
(iii) During any occupancy of the Premises from and after the
date Landlord delivers possession thereof to Tenant and prior to the
Commencement Date, all of the terms and provisions of this lease
shall govern and control, except that (A) Tenant shall have no
obligation to pay Base Rent or Additional Rent during any such
period prior to the Commencement Date, and (B) except for HVAC as
provided in the Workletter, Landlord shall have no obligation to
perform any cleaning, janitorial or other Building services within
any such portion of the Premises during any such period prior to the
Commencement Date.
(c) LANDLORD'S WORK. Landlord hereby agrees to build out a common
area corridor on Floor 27 (the "CORRIDOR WORK"), and to separately demise
(i.e., install building standard demising walls) that portion of Floor 27
included as part of the Premises (the "DEMISING WALL WORK") (collectively,
the "LANDLORD'S WORK"). Landlord shall be responsible for the cost of the
Corridor Work, which cost shall not be deducted from the Allowance (as
defined in Exhibit B attached hereto). Landlord and Tenant shall each be
responsible for one-half of the cost of the Demising Wall Work, with
Tenant's portion being payable within ten (10) business days after
Landlord's demand therefor from time to time (which amount payable by
Tenant may, at Landlord's option, be deducted and disbursed from said
Allowance). The Landlord's Work shall include installation of a separate
electric meter for that portion of the Premises located on Floor 27 (or in
the alternative, Landlord may allow Tenant to utilize the existing meter
controlling the 27th Floor which is located on Floor 28 as of the date of
this lease), at no cost to Tenant; provided that, in either such case,
Tenant shall make all necessary arrangements with the electric utility
company and shall be responsible for all costs associated with subdividing
the distribution of electricity so that any such meter only
monitors/controls electricity distribution to the Premises, and assuring
that the balance of
11
the 27th floor continues to have electrical service separate and apart
from Tenant's meter(s). Without limitation of other rights of Landlord set
forth herein, it is acknowledged and agreed that Tenant shall allow
Landlord and its representatives, upon reasonable notice to Tenant, to
have reasonable access to any electrical closets located within the
Premises, so that Landlord can coordinate the hook-up and servicing of
electrical requirements of other occupants at the Building. The Landlord's
Work shall be performed in a good and workmanlike manner and in
compliance, in all material respects, with all applicable Laws. It is
acknowledged that the Landlord's Work may be performed following the date
Landlord delivers possession of the Premises to Tenant under Section 7(a)
above, and Tenant shall cooperate with Landlord in all reasonable respects
to coordinate and schedule such Landlord's Work with Tenant's on-going
activities at the Premises. Landlord shall use reasonable efforts to
substantially complete the Landlord's Work within the "Landlord Work
Period" (as hereinafter defined), subject to delays caused by Tenant or
other delays beyond Landlord's reasonable control. For purposes of the
foregoing, the term "LANDLORD WORK PERIOD" shall mean the period
commencing on the date hereof and continuing through the forty-fifth
(45th) day following final determination of the Rentable Area of the 27th
Floor Space under Section 42 below (provided that if Tenant does not
exercise its contraction or expansion rights under Section 42, then the
Landlord Work Period shall end on the 45th day following the "Outside
Exercise Date" described in said Section 42).
8. SERVICES.
(a) GENERAL DESCRIPTION OF SERVICES. During the Term, Landlord shall
furnish the following services (the cost of which may be included in
Expenses):
(i) Air conditioning and heat when necessary to provide a
temperature condition required, in Landlord's reasonable judgment,
for comfortable occupancy of the Premises under normal business
operations, Monday through Friday from 8:00 A.M. to 6:00 P.M. and
Saturdays from 9:00 A.M. to 1:00 P.M., Holidays excepted. Levels of
heating and air conditioning are subject to adjustments pursuant to
mandatory and voluntary compliance by Landlord with Laws and
guidelines relating to energy use.
(ii) Domestic water in common with other tenants for drinking,
lavatory and toilet purposes drawn through fixtures installed by
Landlord within the core of the Building, and warm water in common
with other tenants for lavatory purposes from the same regular
Building supply and fixtures.
(iii) Customary janitor and cleaning service in and about the
Premises and common areas of the Building in accordance with the
specifications attached hereto as Exhibit E. Tenant shall not
provide or use any other janitor or cleaning service.
(iv) Passenger elevator service in common with Landlord and
other persons, Monday through Friday from 8:00 A.M. to 6:00 P.M.
(Saturdays from 8:00 A.M. to 1:00 P.M.), Sundays and Holidays
excepted; and freight elevator
12
service in common with Landlord and other persons, and subject to
prior scheduling with Landlord, Monday through Friday from 8:00 A.M.
to 4:00 P.M., Saturdays, Sundays and Holidays excepted. Limited
passenger elevator service shall be provided daily at all times
(i.e., 24 hours a day, seven days a week) when the aforesaid
passenger elevator service is not furnished.
(b) ELECTRICITY. Except as hereinafter provided, electricity shall
not be furnished by Landlord, but shall be furnished by Commonwealth
Edison Company or another electric utility company serving the area
selected by Landlord. Landlord shall permit Tenant to receive such service
direct from such utility company at Tenant's cost, and shall permit
Landlord's wire and conduits, to the extent available, suitable and safely
capable, to be used for such purposes. Except as provided in Section 7(c)
above, Tenant shall make all necessary arrangements with the utility
company for metering and paying for electric current furnished by it to
Tenant, and Tenant shall pay for all charges for electric current consumed
on the Premises during Tenant's occupancy thereof. Tenant shall make no
alterations or additions to the electric equipment or systems in the
Premises or the Building without the prior written consent of Landlord in
each instance (which consent shall not be unreasonably withheld as more
particularly described in Article 14 hereinbelow). Tenant also agrees to
purchase from Landlord or its agents, as Landlord shall direct, all lamps,
bulbs, ballasts and starters used in the Premises during the Term so long
as the charges therefor are at reasonably competitive rates. Tenant
covenants and agrees that at all times its use of electric current shall
never exceed the capacity of the feeders to the Building or the risers or
wiring installed thereon. Notwithstanding the foregoing, Landlord reserves
the right to provide electricity to the Premises in whole or in part, and
in such event Tenant agrees to purchase such electricity from Landlord, at
Landlord's then current charges (which rates charged by Landlord shall not
exceed the reasonably competitive rates for such service charged to
tenants by other electrical utility providers in downtown Chicago,
Illinois for space comparable in size to the space leased to Tenant).
(c) TELEPHONE. All telegraph, telephone, and electric connections
which Tenant may desire shall be first approved by Landlord in writing
(which approval shall not be unreasonably withheld), before the same are
installed, and the location of all wires and the work in connection
therewith shall be performed by contractors approved by Landlord (which
approval shall not be unreasonably withheld) and shall be subject to the
direction of Landlord. Tenant reserves the right to designate the entity
or entities providing telephone or other communication cable installation,
repair and maintenance for the Premises subject to obtaining Landlord's
prior consent thereto (which consent shall not be unreasonably withheld or
delayed so long as the Tenant's use of such service provider would not, in
Landlord's reasonable judgment, materially adversely affect operations at
the Building or otherwise result in any increase in Landlord's cost or
expenses); provided that Landlord shall have the right to impose
reasonable controls upon such entity or entities and to restrict and
control access to telephone cabinets and risers at the Building. Tenant
shall abide by any and all reasonable rules and regulations established by
Landlord from time to time relative to telephone riser management at the
Building. Tenant shall be responsible for and shall pay all costs incurred
in connection with the installation of telephone cables and related wiring
in the Premises, including,
13
without limitation, any hook-up, access and maintenance fees related to
the installation of such wires and cables in the Premises and the
commencement of service therein, and the maintenance thereafter of such
wire and cables; and there shall be included in Expenses for the Building
all installation, hook-up or maintenance costs incurred by Landlord in
connection with telephone cables and related wiring in the Building which
are not allocable to any individual users of such service but are
allocable to the Building generally. If Tenant fails to maintain all
telephone cables and related wiring in the Premises and such failure
affects or interferes with the operation or maintenance of any other
telephone cables or related wiring in the Building, Landlord or any vendor
hired by Landlord may enter into and upon the Premises forthwith and
perform such repairs, restorations or alterations as Landlord deems
necessary in order to eliminate any such interference (and Landlord may
recover from Tenant all of Landlord's costs in connection therewith and
Landlord shall have no liability to Tenant by reason thereof). Upon the
expiration or earlier termination of the term of this lease or Tenant's
right to possession, Tenant agrees to remove all telephone cables and
related wiring installed by Tenant for and during Tenant's occupancy,
which Landlord shall request Tenant to remove. Tenant agrees that neither
Landlord nor any of its agents or employees shall be liable to Tenant, or
any of Tenant's employees, agents customers or invitees or anyone claiming
through, by or under Tenant, for any damages, injuries, losses, expenses,
claims or causes of action because of any interruption, diminution, delay
or discontinuance at any time for any reason in the furnishing of any
telephone service to the Premises and the Building.
(d) EXTRA OR ADDITIONAL SERVICES. Tenant may request Landlord to
provide services which are extra or additional services to those described
in Section 8(a), by delivery to Landlord of an advance written request
therefor. If Landlord shall agree to so provide any such services which
are extra or in addition to those services described in Section 8(a),
Tenant shall pay for any such extra or additional services so provided by
Landlord at Landlord's established rates therefor from time to time, or if
there are no established rates, then at the rate of 115% of the cost of
providing such service, or as otherwise agreed by Landlord and Tenant. All
charges for any such extra or additional services so provided by Landlord
shall be deemed to be additional Rent hereunder and shall be due and
payable within ten (10) business days after Tenant receives Landlord's
xxxx therefor, or in installments as may be designated by Landlord to
Tenant in writing. If Tenant fails to pay when due Landlord's proper
charges for any such extra or additional services, Landlord shall have the
right, in addition to all other rights and remedies available to Landlord,
to discontinue furnishing any such extra or additional services for which
Tenant has failed to pay. If Landlord discontinues any such extra or
additional services as provided in this Section 8(d), no such
discontinuance shall be deemed an eviction or disturbance of Tenant's use
of the Premises or render Landlord liable for damages or relieve Tenant
from performance of Tenant's obligations under this lease. Without
limiting the foregoing, if Tenant desires air conditioning or heat during
times or on days on which Landlord is not required to provide such service
pursuant to Section 8(a)(i) above, Landlord shall provide such service to
Tenant provided that (i) Tenant notifies Landlord on or before 5:00 p.m.
on any business day on which Tenant desires air conditioning or heat after
hours on such business day, or before 5:00 p.m. on the business day
immediately preceding any holiday or weekend day for which Tenant desires
such service, and (ii) Tenant shall pay Landlord, Landlord's then
after-hours HVAC charges in
14
connection with such after-hours service. The current charges by Landlord
to Tenant and payable by Tenant hereunder for after-hours air conditioning
are $140.00 per hour per floor for all or any portion of any one tenant
floor at the Building for which such service is furnished, and the current
charges by Landlord to Tenant and payable by Tenant hereunder for
after-hours heat are $118.00 per hour per floor for all or any portion of
any one tenant floor at the Building for which such service is furnished;
all subject to adjustment based upon Landlord's actual costs from time to
time; provided, however, that if adjusted, the charges shall not exceed
115% of Landlord's actual costs.
(e) HOLIDAYS. For purposes of this Section 8, "HOLIDAYS" means New
Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
Christmas Day and any other day designated as a Building Holiday by
Landlord (so long as any such other day so designated as a Building
Holiday is customarily designated as a holiday by other landlords
operating first-class office buildings in downtown Chicago, Illinois).
(f) INTERRUPTION OF SERVICES. Tenant agrees that neither Landlord,
nor any of Landlord's constituent members, nor any of their respective
agents, partners or employees, shall be liable for damage or injury to
person, property or business or for loss or interruption of business, or
for any other matter, in the event there is any failure, delay,
interruption or diminution in furnishing any service. No such failure,
delay, interruption or diminution shall be deemed to constitute an
eviction or disturbance of Tenant's use or possession of the Premises, in
whole or in part, actual or constructive, nor entitle Tenant to any claim
for set-off, abatement (except as hereinafter expressly provided) or
reduction of Rent, nor render Landlord liable for damages, nor relieve
Tenant from the performance of or affect any of Tenant's obligations under
this lease. Notwithstanding the foregoing, if due to Landlord's negligence
or willful misconduct, any of the services described in Section 8(a)(i),
(ii) (limited to water supplied to base building washrooms) or (iv) above,
are interrupted, so that Tenant is not able and actually ceases to conduct
any business activities in the Premises for a period of five (5)
consecutive business days, then, as Tenant's sole recourse therefor, Base
Rent and Additional Rent shall xxxxx as of the sixth (6th) consecutive
business day and thereafter until such time as service is restored so that
Tenant is able to or actually resumes occupancy of the Premises for any of
its customary business activities. Landlord shall use commercially
reasonable efforts to minimize any failure, delay, interruption or
diminution in furnishing any of the services described in this Section 8.
(g) TENANT'S COOPERATION. Tenant agrees to cooperate fully with
Landlord, at all times, in abiding by all regulations and requirements
which Landlord may prescribe for the proper functioning and protection of
all utilities and services reasonably necessary for the operation of the
Premises or the Project. Landlord and its contractors shall have free
access to any and all mechanical installations in the Premises, and Tenant
agrees that there shall be no construction of partitions or other
obstructions which might interfere with the moving of the servicing
equipment of Landlord to or from the enclosures containing said
installations. Tenant further agrees that neither Tenant nor its
employees, agents, licensees, invitees or contractors shall at any time
tamper with, adjust or otherwise in any manner adversely affect Landlord's
mechanical installations in the Premises or the Project.
15
(h) SUPPLEMENTAL HEATING OR COOLING. Whenever, in Landlord's
reasonable judgment, Tenant's use or occupation of the Premises, including
lighting, personnel, heat generating machines or equipment, or airborne
emissions of smoke or other particulates, individually or cumulatively,
causes the design loads for the system providing heat and air-cooling to
be exceeded, or otherwise affects adversely the temperature, humidity or
air quality otherwise maintained by the heating, ventilating and air
handling or conditioning system in the Premises or the Building, and
Tenant fails to cure such effect by adjusting Tenant's loads or installing
supplementary heating or air handling or conditioning units within thirty
(30) days after written notice from Landlord (provided that no such notice
or cure period shall be required in the case of an emergency), Landlord
may, but shall not be obligated to, temper such excess loads by installing
supplementary heating or air handling or conditioning units in the
Premises or elsewhere where necessary. In such event, the cost of such
units and the expense of installation, including, without limitation, the
cost of preparing working drawings and specifications, plus ten percent
(10%) of such cost as an overhead and supervision fee, shall be paid by
Tenant as additional Rent within ten (10) business days after Landlord's
demand therefor. Alternatively, Landlord may require Tenant to install
such supplementary heating or air handling or conditioning units at
Tenant's sole expense. Landlord may operate and maintain any such
supplementary units, but shall have no continuing obligation to do so or
liability in connection therewith. The expense resulting from the
operation and maintenance of any such supplementary heating or air
handling or conditioning units, including utility charges, charges for
condenser water, repair costs, labor costs and rent for space occupied by
any supplementary heating or air handling or conditioning units installed
in Rentable Area outside the Premises, shall be paid by Tenant to Landlord
as additional rent at rates fixed by Landlord. Alternatively, Landlord may
require Tenant to operate and maintain any such supplementary units, also
at Tenant's sole expense.
9. CONDITION AND CARE OF PREMISES.
(a) CONDITION OF PREMISES. Tenant's taking possession of the
Premises or any portion thereof shall be conclusive evidence against
Tenant that such portion of the Premises was then in good order and
satisfactory condition, subject to Landlord's obligation to complete the
Landlord's Work as described in Section 7(c) above, and subject to
Landlord's continuing obligation to maintain base-Building items in good
order, condition and repair, as and to the extent described in Section
9(c) below. Tenant acknowledges that, except as expressly set forth
herein, the Premises shall be accepted by Tenant in their "AS-IS"
condition, and that no promise by or on behalf of Landlord, any of
Landlord's constituent members, the leasing agent of the Project or any of
their respective agents, partners or employees, to alter, remodel,
improve, repair, decorate or clean the Premises has been made to or relied
upon by Tenant, and that no representation respecting the condition of the
Premises or the Project by or on behalf of Landlord, its constituent
members, or any of their respective agents, partners or employees has been
made to or relied upon by Tenant, except to the extent expressly set forth
in this lease. Without limitation of the foregoing, it is acknowledged and
agreed that Landlord shall deliver the Premises to Tenant inclusive of
those items described in Exhibit G attached hereto, to the extent (and
only to the extent) currently owned by Landlord and located in the
Premises or elsewhere on the 27th Floor at the Building (collectively, the
"EXISTING
16
FF&E"), for use by Tenant in connection with its business operations at
the Premises during the entire Term hereof. Landlord gives no
representations or warranties, whatsoever, regarding ownership, liens,
encumbrances, condition or any other matter pertaining to the Existing
FF&E, all of which shall be delivered in its "as-is" condition and shall
remain the property of Landlord during the entire Term, and shall be
maintained by Tenant in good working order during the Term (subject to
ordinary wear and tear), and such Existing FF&E shall be surrendered to
Landlord at the end of the Term (or the end of Tenant's right to
possession of the Premises) as provided in Section 10(d) hereinbelow. If
any of the Existing FF&E is located outside of the Premises and outside of
the "Storage Closet" (as defined in Section 43 below) on the 27th floor as
of the date hereof (which items so located outside of the Premises and
outside of the Storage Closet are identified as being located on the "27th
Floor outside premises" on Exhibit G), Tenant shall be responsible, at its
expense, for moving such items to the Premises within thirty (30) days
following the date of this lease, and Tenant shall promptly repair and/or
restore any damage to any areas at the Building caused or resulting during
the course of such moving activities, all at Tenant's cost and expense.
Notwithstanding anything to the contrary in this Section 9(a), Tenant
shall be entitled, at any time prior to the Commencement Date, to provide
Landlord a written "punch-list" of items regarding any structural
component(s) of the Premises or air conditioning, heating, electrical and
plumbing systems serving the Premises (including the Landlord's Work but
expressly excluding the Tenant's Work and any Existing FF&E), which
consist of items for which Landlord is responsible for maintenance and
repair under Section 9(c) below and which were not in good working order
and/or in material compliance with applicable Laws as of the Turnover Date
through no fault of Tenant, and Landlord shall thereafter repair such
component(s) of the Premises or remedy such noncompliance with applicable
Laws, at no cost to Tenant, within a reasonable period of time after
receipt of Tenant's punch-list.
(b) TENANT'S REPAIRS. Subject to the provisions regarding fire and
other casualty losses set forth in Section 17 hereof, Tenant, at its
expense, shall (i) keep the Premises (including all Tenant Alterations) in
good order, repair and condition at all times during the Term, and (ii)
promptly and adequately repair all damage to the Premises, including
damage to interior windows and to any portion of the Building air
conditioning, heating, electrical and plumbing systems which run through
the Premises and which serve the Premises, caused by Tenant or its
contractors, agents, employees or invitees. Tenant shall give prompt
notice to Landlord of any material repair, maintenance or replacement
items required under this Section 9(b). All work with respect to any such
maintenance, repair or replacement shall be performed within a reasonable
period after the need for such action arises and shall be subject to the
provisions of Section 14 hereof. If Tenant fails to perform such work
within a period of ten (10) days after written or oral notice to Tenant
from Landlord (except in the case of an emergency, when no such notice or
cure period shall be required), or if Tenant otherwise requests Landlord
to perform such work prior to the expiration of any such 10-business day
period, then, Landlord may, in its sole discretion, elect to effect such
repairs and, in such case, Tenant shall pay Landlord the cost thereof plus
a coordination and management fee equal to ten percent (10%) of such cost,
within ten (10) business days after Landlord's written demand.
17
(c) LANDLORD'S REPAIRS. Subject to the provisions regarding fire and
other casualty losses set forth in Section 17 hereof, Landlord shall (i)
keep the foundations, roofs, exterior walls, and the structural elements
of the Building, and the public areas in the Building, exclusive of the
Premises and other tenant spaces occupied by or under the control of
tenants, in good order, repair and condition at all times during the Term,
and (ii) keep in good order, condition and repair all outside windows of
the Premises and the electrical, plumbing, heating, ventilating and air
conditioning systems servicing the Premises (other than as set forth in
Section 9(b) above). Notwithstanding the foregoing, (A) Landlord shall not
be responsible for the maintenance or repair of any floor or wall
coverings in the Premises or any of such systems which are located within
the Premises and are supplemental or special to the Building's standard
systems which are located within the Premises and are supplemental or
special to the Building's standard systems; and (B) the cost of performing
any of said maintenance or repairs, whether to the Premises or to the
Building, caused by the negligence of Tenant, its employees, agents,
servants, licensees, subtenants, contractors or invitees, shall be paid by
Tenant within ten (10) business days after Landlord's demand therefor.
Upon reasonable notice (except in the case of an emergency, where no such
notice shall be required), and so long as Landlord uses good faith efforts
to maintain reasonable access to the Premises and to minimize unreasonable
interference with the conduct of Tenant's business, Landlord may, but
shall not be required to, enter the Premises at all reasonable times to
make repairs, alterations, improvements and additions to the Premises or
to the Building or to any equipment located in the Building as Landlord
shall deem necessary or desirable or as Landlord may be required to make
by governmental authority or court order or decree.
(d) NO RIGHTS TO LIGHT, AIR OR VIEW. This lease does not grant any
rights to light, air or view over or about the real property of Landlord
or any other real property. Landlord specifically excepts and reserves to
itself all rights to and the use of any roofs, the exterior portions of
the Premises, the land, improvements and air and other rights below the
improved floor level of the Premises, the improvements and air and other
rights above the improved ceiling of Premises, the improvements and air
and other rights located outside the demising walls of the Premises and
such areas within the Premises as are required for installation of utility
lines and other installations required to serve the Building or any
occupants of the Building, and Landlord specifically reserves to itself
the right to use, maintain and repair same, and no rights with respect
thereto are conferred upon Tenant, unless otherwise specifically provided
herein.
(e) HAZARDOUS SUBSTANCES.
(i) Tenant shall comply, at its sole expense, with all Laws
relating to the protection of public health, safety and welfare and
with all environmental Laws in the use, occupancy and operation of
the Premises. Tenant agrees that no Hazardous Substances (as
hereinafter defined) shall be used, located, stored or processed on
the Premises or be brought into the Building by Tenant (except for
minor quantities of cleaning materials and other items consistent
with office usage at first class office buildings and, in any event,
in compliance with all applicable Laws), and Tenant further agrees
that no Hazardous Substances will be released or discharged from the
Premises (including, but not limited to, ground water
18
contamination). The term "HAZARDOUS SUBSTANCES" shall mean and
include all hazardous and toxic substances, waste or materials, any
pollutant or contaminant, including, without limitation, PCB's,
asbestos and raw materials that include hazardous constituents or
any other similar substances or materials that are now or hereafter
included under or regulated by any environmental Laws or that would
pose a health, safety or environmental hazard. In the event that
Tenant is notified of any investigation or violation of any
environmental Law arising from Tenant's activities at the Premises,
Tenant shall immediately deliver to Landlord a copy of such notice
(herein, a "HAZARDOUS SUBSTANCES NOTICE"). In the event (a) Tenant
so receives a Hazardous Substances Notice, or (b) Landlord
reasonably believes that a violation of environmental Law exists,
Landlord may conduct such tests and studies relating to compliance
by Tenant with environmental Laws or the alleged presence of
Hazardous Substances upon the Premises as Landlord deems necessary
or desirable, which, in the case of any tests or studies following a
Hazardous Substances Notice, or in any event in the case that such
tests or reports indicate that a violation of environmental Law by
Tenant exists at the Premises, shall be completed at Tenant's
expense. Landlord's inspection and testing rights are for Landlord's
own protection only, and Landlord has not, and shall not be deemed
to have assumed any responsibility to Tenant or any other party for
compliance with environmental Laws, as a result of the exercise, or
non-exercise of such rights. Tenant shall indemnify, defend, protect
and hold harmless Landlord, its constituent members, and their
respective officers, directors, members, partners, agents,
employees, successors and assigns (collectively, the "LANDLORD
PARTIES"), from and against any and all loss, claim, expense,
liability and cost (including attorneys' fees) arising out of or in
any way related to the presence of any Hazardous Substance
introduced to the Premises during the Term by Tenant, its agents,
employees, contractors or other representatives or invitees.
(ii) Landlord agrees, (A) as to any Hazardous Substances (as
now defined) existing in the common areas of the Building as of the
Commencement Date and in violation of environmental Laws existing as
of said Commencement Date, and (B) as to any Hazardous Substances
hereafter brought to the Building by Landlord or its agents or
employees and in violation of environmental Laws existing as of the
date so brought to the Building by any such parties, to remove or
otherwise remediate such Hazardous Substances if and to the extent
required by Law as existing as of the Commencement Date (as it
relates to matters described in subclause (A) above) or as of the
date such Hazardous Substances are brought to the Building by
Landlord, its agents or employees (as it relates to matters
described in subclause (B) above), at Landlord's sole cost and
expense. Tenant shall cooperate with Landlord in allowing proper
access to the Premises to perform the foregoing removal or
remediation activities, and, without limiting Landlord's obligations
under this Section 9(e)(ii), shall use reasonable efforts not to
take any action which may worsen any such environmental condition
once discovered. Landlord shall restore any damage caused to the
Premises as a result of such access by Landlord under this Section
9(e)(ii), to the extent such damage was not caused by Tenant's
negligence or willful misconduct or Tenant's breach of its
obligations hereunder. In any entry into the Premises under this
19
Section 9(e)(ii), Landlord shall use commercially reasonable efforts
to minimize interference with Tenant's business operations
therefrom. Tenant shall have no claim against Landlord under this
Section 9(e)(ii) with respect to any Hazardous Substances located
within the Building but external to the Premises, unless such
Hazardous Materials materially adversely impact Tenant's use and
enjoyment of the Premises in accordance with the terms of this
lease.
(f) AMERICANS WITH DISABILITIES ACT. Landlord and Tenant acknowledge
that the Americans With Disabilities Act of 1990 (42 U.S.C.ss.12101 et
seq.) and regulations and guidelines promulgated thereunder, as all of the
same may be amended and supplemented from time to time (collectively
referred to herein as the "ADA") establish requirements for business
operations, accessibility and barrier removal, and that such requirements
may or may not apply to the Premises and the Building depending on, among
other things: (1) whether Tenant's business is deemed a "PUBLIC
ACCOMMODATION" or "COMMERCIAL FACILITY", (2) whether such requirements are
"READILY ACHIEVABLE", and (3) whether a given alteration affects a primary
function area or triggers "PATH OF TRAVEL" requirements. The parties
hereby agree that: (a) Landlord shall be responsible for ADA Title III
compliance in the common areas of the Building, except as provided below,
(b) Tenant shall be responsible for ADA Title III compliance in the
Premises to the extent Tenant is responsible for compliance with Laws
under Section 6(b) above, including any leasehold improvements or other
work to be performed in the Premises under or in connection with this
lease, (c) Landlord may perform, or require that Tenant perform, and
Tenant shall be responsible for the cost of, ADA Title III "path of
travel" requirements triggered by alterations in the Premises performed by
Tenant, and (d) Landlord may perform, or require Tenant to perform, and
Tenant shall be responsible for the cost of, ADA Title III compliance in
the common areas of the Building necessitated by the Premises or the
Building being deemed to be a "PUBLIC ACCOMMODATION" instead of a
"COMMERCIAL FACILITY" solely as a result of Tenant's particular use of the
Premises. Tenant shall be solely responsible for requirements under Title
I of the ADA relating to Tenant's employees.
10. SURRENDER OF PREMISES.
(a) SURRENDER. Upon the termination of this lease by lapse of time
or otherwise or upon the earlier termination of Tenant's right of
possession, Tenant shall surrender possession of the Premises to Landlord
and deliver all keys, computer cards or codes and other entry devices to
the Premises to Landlord and make known to Landlord the combinations of
all locks of vaults then remaining in the Premises, and shall, subject to
the following subparagraphs, return the Premises and all equipment and
fixtures of Landlord therein to Landlord in as good condition as when
Tenant originally took possession, except for ordinary wear and tear, and
except for any Tenant Alterations which are to remain at the Premises as
described in Section 10(b) below, and except for loss or damage by fire or
other insured casualty or condemnation (which Tenant is not required to
restore pursuant to Section 17 of this lease), failing which Landlord may
restore the Premises and such equipment and fixtures to such condition,
and Tenant shall pay the cost thereof to Landlord on demand.
20
(b) OWNERSHIP OF IMPROVEMENTS. All installations, additions,
partitions, hardware, fixtures and improvements, temporary or permanent
(including Landlord's Work and Tenant Alterations), except movable
furniture and equipment and other personal property or trade fixtures
belonging to Tenant, in or upon the Premises, whether placed there by
Tenant or Landlord, shall, upon the termination of this lease by lapse of
time or otherwise or upon the earlier termination of Tenant's right of
possession, become Landlord's property and shall remain upon the Premises,
all without compensation, allowance or credit to Tenant; provided,
however, that if at the time Landlord consents to Tenant's installation of
Tenant Alterations or other installations, additions, partitions,
hardware, fixtures and improvements or at any other time prior to
termination of this lease or Tenant's right to possession (but subject, in
any event, to the terms set forth in the last sentence of this Section
10(b) hereinbelow), Landlord provides written notice to Tenant requiring
removal of the same upon termination, then Tenant, at Tenant's sole cost
and expense, upon termination of this lease by lapse of time or otherwise
or upon the earlier termination of Tenant's right of possession, shall
promptly remove such designated items, and Tenant shall thereafter repair
any damage to the Premises or the Project caused by such removal, failing
which Landlord may remove the same and repair the Premises or the Project,
as the case may be, and Tenant shall pay the cost thereof to Landlord
within ten (10) business days after written demand. Without limitation of
the foregoing, if any of the Tenant Alterations or Landlord's Work
involved the lowering of ceilings, raising of floors or the installation
of specialized wall or floor coverings or lights, then Tenant, at
Landlord's written request given to Tenant at any time prior to
termination of this lease or Tenant's right to possession (but subject, in
any event, to the terms set forth in the last sentence of this Section
10(b) hereinbelow), shall also be obligated to return such surfaces to
their condition prior to the date of this lease. Further, at Landlord's
written request given to Tenant at any time prior to termination of this
lease or Tenant's right to possession (but subject, in any event, to the
terms set forth in the last sentence of this Section 10(b) hereinbelow),
Tenant shall be required to close any staircases or other openings between
floors within the Premises. Tenant's failure to perform the work described
in this Section 10(b) on or before the expiration or earlier termination
of this lease or Tenant's right of possession hereunder, shall, without
limitation on other rights or remedies available to Landlord, give rise to
the right of Landlord to perform such work, and Tenant shall pay the costs
thereof to Landlord within ten (10) business days after written demand.
Notwithstanding the foregoing, Tenant shall have the right, at such time
as Tenant is requesting Landlord's consent to any Tenant Alterations, to
specifically request, in writing, a waiver of Landlord's right to require
Tenant's removal of any particular item included in such Landlord's Work
or Tenant Alterations at the end of the Term hereof, and/or a waiver of
any restoration obligations described in this Section 10(b) relating
thereto, and any such waiver granted in writing by Landlord shall be
binding on Landlord at expiration or termination of this lease.
(c) REMOVAL OF PERSONAL PROPERTY. Upon the termination of this lease
by lapse of time or otherwise or upon the earlier termination of Tenant's
right of possession, Tenant shall remove from the Premises Tenant's
furniture, machinery, safes and other items of movable personal property
of every kind and description and Tenant's trade fixtures, and Tenant
shall restore any damage to the Premises or the Project caused thereby
(such removal and restoration to be performed prior to the expiration of
the Term
21
or earlier termination of this lease or Tenant's right of possession),
failing which Landlord may do so and thereupon the provisions of Section
19(b)(iv) shall apply; provided, however, if this lease or Tenant's
possession terminates prior to the then stated expiration date hereunder
as a result of a Default hereunder, Tenant may not, without Landlord's
prior written consent, remove any of its furniture, trade fixtures or
other personal property for which Landlord paid or gave Tenant an
allowance, in whole or in part, in which case, at Landlord's election,
such property shall be deemed to have been conveyed to Landlord as by xxxx
of sale without further payment or credit by Landlord to Tenant.
(d) EXISTING FF&E. It is acknowledged and agreed that the "Existing
FF&E", as defined in Section 9(a) above, shall remain the sole property of
Landlord, and such Existing FF&E shall not be removed by Tenant at any
time during the Term, and shall be surrendered to Landlord upon the
expiration or termination of this lease (or Tenant's right to possession
hereunder) in the same condition as existing on the Turnover Date
hereunder, except for ordinary wear and tear and except for loss or damage
by fire or other insured casualty or condemnation (to the extent Tenant is
not required to restore pursuant to Section 17 of this lease).
(e) SURVIVAL. Without limitation of any other obligations of Tenant
which shall survive the expiration or termination of this lease, all
obligations of Tenant under this Section 10 shall survive the expiration
or earlier termination of this lease.
11. HOLDING OVER. If Tenant retains possession of the Premises or any part
thereof after the termination of this lease by lapse of time or otherwise or
after the earlier termination of Tenant's right of possession, Tenant shall pay
to Landlord as Rent during such holdover period an amount equal to one hundred
fifty percent (150%) of the Rent (based on the Base Rent plus the most current
Additional Rent Estimate owed by Tenant during the most recent year for the
entire Premises) or one hundred fifty percent (150%) of the prevailing market
rent (as determined by Landlord), if greater, on a per diem basis. In addition
to and without limiting any other rights and remedies which Landlord may have on
account of such holding over by Tenant, Tenant shall indemnify Landlord from and
against any and all damages suffered by Landlord on account of such holding over
by Tenant, including any damages and claims by tenants entitled to future
possession. Upon Tenant's written request, made at any time within the last six
(6) months of the Term, Landlord shall notify Tenant, within five (5) business
days after Landlord's receipt of such written request, of any then current
leasing agreements relative to the Premises (or any portion thereof) for a term
commencing following the termination of this lease, which may give rise to
indemnification obligations of Tenant pursuant to this Section 11. No occupancy
by Tenant after the expiration or other termination of this lease shall be
construed to extend the Term. The provisions of this Section 11 shall not be
deemed to limit or constitute a waiver of any rights or remedies of Landlord as
provided herein or at law or equity.
12. RULES AND REGULATIONS. Tenant agrees to observe and not to interfere
with the rights reserved to Landlord contained in Section 13 hereof and
elsewhere in this lease and agrees, for itself, its employees, agents, invitees,
licensees and contractors, to accept and comply with the rules and regulations
set forth in Exhibit D attached to this lease, and elsewhere in this lease, and
such other rules and regulations as may be adopted from time to time by
22
Landlord pursuant to Section 13(o) or any other Section of this lease. The rules
and regulations in Exhibit D and all other rules and regulations made in
accordance with this lease are intended and shall be construed to supplement and
not limit or restrict in any way any of Landlord's rights or Tenant's
obligations contained in Section 13 or any other Section of this lease. Nothing
contained in this lease shall be construed to impose upon Landlord any duty or
obligation to enforce any of said rules and regulations or the terms, covenants
or conditions of any other lease against any other tenant or any other person.
Landlord shall not, however, discriminatorily enforce against Tenant rules and
regulations applicable to office tenants of the Building generally.
13. RIGHTS RESERVED TO LANDLORD. Landlord reserves and shall have the
following rights, each of which shall, unless expressly provided otherwise, be
exercisable without notice and without liability of Landlord, its constituent
members, or any of their respective agents, partners or employees, to Tenant for
damage or injury to property, person or business or for loss or interruption of
business, or for any other matter, and without effecting an eviction or
disturbance of Tenant's use or possession, in whole or in part, actual or
constructive, or giving rise or entitling Tenant to any claim for set-off,
abatement or reduction of Rent or relieving Tenant from the performance of or
affecting any of Tenant's obligations under this lease:
(a) To change the name or, upon not less than sixty (60) days'
notice, the street address of the Building; provided that if Landlord
voluntarily changes the Building's street address (i.e., as opposed to
being directed to do so by the United States Postal Service or other
governmental agency) it shall reimburse Tenant for any reasonable printing
costs incurred by Tenant to replace obsolete stationery and business
cards, not exceeding, in any event, the sum of $5,000.00.
(b) To install and maintain or remove signs on the exterior and
interior of the Building and the Project (provided that Landlord shall
have no right to install or maintain signage within the Premises except as
otherwise may be required by applicable law).
(c) To prescribe the location and style of the suite number and
identification sign or lettering for the Premises (except for Tenant's
signage located wholly within the Premises and not readily visible from
common corridors or from external portions of the Building).
(d) To retain at all times, and to use in appropriate instances,
pass keys and other entry devices for all doors into and within the
Premises.
(e) To grant to anyone the right to conduct any business or render
any service in any part of the Project.
(f) To enter the Premises for supplying janitor service or other
services to be provided to Tenant hereunder, or in the exercise of
Landlord's rights hereunder, and upon reasonable prior notice (except for
routine services to be performed by Landlord hereunder, or where this
lease otherwise permits entry without notice or in the event of an
23
emergency, in which case immediate entry shall be permitted) for other
reasonable purposes.
(g) To require all persons entering or leaving the Project or any
part thereof during such hours as Landlord may from time to time
reasonably determine to identify themselves to security personnel by
registration or otherwise and to establish their right to enter or leave
in accordance with Landlord's security controls. Landlord shall not be
liable in damages or otherwise for any error with respect to admission to
or eviction or exclusion from the Project or any part thereof of any
person. Notwithstanding anything contained herein to the contrary, in case
of fire, casualty, invasion, insurrection, mob, riot, act of terrorism,
civil disorder, public excitement or other commotion, or threat thereof,
Landlord reserves the right to limit or prevent access to the Project or
any part thereof during the continuance of the same, halt elevator
service, activate elevator emergency controls, or otherwise take such
action or preventive measures reasonably deemed necessary by Landlord for
the safety or security of the tenants or other occupants of the Project or
the protection of the Project and the property in or about the Project.
Tenant agrees to cooperate in any reasonable safety or security program
developed by Landlord from time to time.
(h) To control, restrict and prevent access to any areas of the
Project, provided that reasonable access to the Premises shall be
maintained.
(i) To rearrange, relocate, enlarge, reduce or change corridors,
exits, elevators, stairs, lavatories, doors, entrances in or to the
Building (but not within any portion of the Premises, unless required by
applicable law or by an emergency situation or as expressly provided
elsewhere in this lease) and to decorate and to make repairs, alterations,
additions and improvements, structural or otherwise, in or to the Land or
the Project or any part thereof (but not within any portion of the
Premises, unless required by applicable law or by an emergency situation
or as expressly provided elsewhere in this lease) and any adjacent
building, land, street or alley, including for the purpose of connection
with or entrance into or use of the Land or the Project in conjunction
with any adjoining or adjacent building or buildings or pedestrian ways,
now existing or hereafter constructed, provided that Landlord uses good
faith efforts to maintain reasonable access to the Premises and to
minimize unreasonable interference with the conduct of Tenant's business.
In that regard, Landlord may erect scaffolding and other structures
reasonably required by the character of the work to be performed, and
during such operations to enter upon the Premises upon reasonable prior
notice and take into and upon or through any part of the Project,
including the Premises, all materials that may be required to do such work
or make such decorations, repairs, alterations, improvements or additions,
and in connection with any of the foregoing, to close public entryways,
other public spaces, stairways or corridors and interrupt or temporarily
suspend any services or facilities agreed to be furnished by Landlord.
Landlord may at its option do any such work and make any such decorations,
repairs, alterations, improvements and additions in and about the Project
and the Premises during ordinary business hours and, if Tenant desires to
have the same done during other than ordinary business hours, Tenant shall
pay all overtime and additional expenses resulting therefrom.
24
(j) To establish controls for the purpose of regulating all property
and packages to be taken into or removed from the Building and Premises.
(k) To regulate delivery of supplies and services in order to ensure
the cleanliness and security of the Project and to avoid congestion of the
loading docks, receiving areas and freight elevators.
(l) To approve the weight, size and location of safes, vaults,
books, files and other heavy equipment and articles in and about the
Premises and the Building so as not to exceed the design live load per
square foot designated by the structural engineers for the Building, and
to require all such items and furniture and similar items to be moved into
or out of the Building and Premises only at such times and in such manner
as Landlord shall direct in writing. Tenant shall not install or operate
machinery or any mechanical devises of a nature not directly related to
Tenant's ordinary use of the Premises without the prior written consent of
Landlord.
(m) To show the Premises to prospective tenants at reasonable hours
during the last twelve (12) months of the Term or to prospective
mortgagees, ground lessors or purchasers of the Land or Building or both
at any time upon prior written or oral notice to Tenant and, if vacated or
abandoned, to show the Premises to prospective tenants at any time and to
demolish, alter, remodel or otherwise prepare the Premises for
re-occupancy.
(n) To erect, use and maintain concealed pipes, ducts, wiring and
conduits, and appurtenances thereto, in and through the Premises in walls,
below the floor and above the suspended ceiling (provided that in
performing any such work, Landlord shall use reasonable efforts to
minimize disruption of Tenant's business activities at the Premises and
provided further, that Landlord shall restore any damage to the Premises
caused by any such work, to the extent such damage was not caused by
Tenant's negligence or willful misconduct or Tenant's breach of its
obligations hereunder).
(o) From time to time to make and adopt such rules and regulations,
in addition to or as an amendment to rules and regulations contained in
Exhibit D attached to this lease or other Sections of this lease, or
adopted pursuant to this or other Sections of this lease, for the use,
entry, operation or management of the Premises or the Project or for the
protection or welfare of the Project or its tenants or occupants, or any
property therein, as Landlord may reasonably determine, all subject to the
terms of Article 12 hereof, and Tenant agrees to accept, abide by and
comply with all such rules and regulations.
(p) To designate and/or approve, prior to installation, all types of
window shades, blinds, drapes, awnings or other similar items, and all
internal lighting that may be visible from the exterior of the Premises.
(q) To have access for Landlord and other tenants of the Building to
any mail chute and boxes located in or on the Premises as required by any
applicable rules of the Building or of the United States Post Office.
25
14. ALTERATIONS.
(a) CONSENT; CONDITIONS. Tenant shall not perform any Tenant
Alterations without first obtaining the prior written consent of Landlord;
provided that such consent shall not be required for "Decorating
Improvements" as hereinafter described. Without limitation on the
foregoing, Landlord may impose such conditions with respect to Tenant
Alterations as Landlord deems appropriate, including, without limitation,
requiring Tenant to furnish to Landlord for its approval prior to
commencement of any work or entry by Tenant's contractors into the
Premises or the Building, security for the payment of all costs to be in
connection with any such Tenant Alterations, insurance against liabilities
which may arise out of the Tenant Alterations and plans and specifications
and permits necessary for the Tenant Alterations.
Landlord agrees not to unreasonably withhold or delay its consent to any
Tenant Alterations; provided, however, that Landlord shall not be deemed
to have acted unreasonably if it withholds its consent because, in
Landlord's opinion, such work: could adversely affect building systems,
the structure of the Building or the safety of its occupants; would
increase Landlord's cost of repairs, insurance or furnishing services or
otherwise adversely affect Landlord's ability to efficiently operate the
Building or furnish services to Tenant or other tenants; involves toxic or
hazardous materials; could be costly or hazardous to remove or demolish;
requires entry into another tenant's premises or use of public areas; or
is prohibited by any mortgage on the Building. The foregoing reasons,
however, shall not be exclusive of the reasons for which Landlord may
reasonably withhold consent, whether or not such other reasons are similar
or dissimilar to the foregoing.
In addition, Tenant may perform certain interior decorating or other
non-structural alterations to the Premises such as carpeting, painting (so
long as the odors from the same do not interfere with any other tenant's
operations), hanging artwork or wall coverings, installing furniture
systems, or other similar interior decorating improvements, without
obtaining Landlord's consent therefor (but subject to the remaining
requirements of this Section 14), but only if (i) such items do not affect
the Building structure or systems, the public areas of the Building or any
other tenant space, (ii) the cost of such items does not exceed, in any
twelve-month period, $50,000.00 and (iii) Tenant gives prior written
notice to Landlord of such items, including a description of the
contemplated work and the types of materials being used. Neither delivery
nor approval of plans and specifications shall be required for the
foregoing interior decorating items (herein, the "DECORATING
IMPROVEMENTS") where plans and specifications are not reasonably
appropriate for the work to be performed.
(b) CONTRACTORS. Tenant Alterations shall be done at Tenant's
expense by agents or contractors hired by Tenant who are reasonably
acceptable to Landlord and whose work will not cause or threaten to cause
disharmony or interference with Landlord or other tenants, contractors or
service providers at the Building, or at Landlord's election, by
Landlord's employees or contractors hired by Landlord. Before employing
any such contractors, Tenant shall submit to Landlord the names and
addresses of such contractors.
26
(c) COSTS; MECHANIC LIENS. Tenant shall promptly pay the cost, when
due, of all Tenant Alterations. In addition to the cost of such Tenant
Alterations, Tenant shall also pay to Landlord or to its designated agent,
as Landlord shall direct, an amount equal to five percent (5%) of the
costs of all Tenant Alterations, as a supervisory fee and overhead charge
allocable to any Tenant Alterations; provided that such fee shall be in an
amount as mutually agreed upon by the parties to the extent Landlord is
requested by Tenant, and Landlord so agrees, to perform construction
management services with respect thereto. No fee as described in the
previous sentence shall be due Landlord with respect to any Decorating
Improvements performed by Tenant or with respect to any Tenant Alterations
installed prior to the Commencement Date (provided that with respect to
the "Tenant's Work", the terms of the Workletter shall govern and control
relative to any amounts due to Landlord in connection therewith). Upon
completion of any Tenant Alterations, Tenant shall deliver to Landlord, if
payment is made directly to contractors, evidence of payment, contractors'
affidavits and full and final waivers of all liens for labor, services and
materials sufficient to waive all rights to liens under the Illinois
Mechanic's Lien law arising or from the work done. Tenant shall not permit
any lien or claim for lien of any mechanic, labor or supplier or any other
lien to be filed against the Building, the Land or the Premises or any
part thereof, arising out of any Tenant Alterations or other work
performed or alleged to be performed, by or at the direction of Tenant. If
any such lien or claim for lien is filed, Tenant shall, within ten (10)
business days of receiving notice of such lien or claim, (i) have such
lien or claim for lien released of record, or (ii) deliver to Landlord a
bond or other security in form, content, and amount satisfactory to
Landlord relative to such lien or claim for lien (provided that, if Tenant
elects this option (ii), Tenant shall, in any event, have such lien or
claim for lien discharged and released of record prior to final
enforcement thereof). Without limitation of the foregoing, Tenant shall
indemnify, defend and hold harmless, Landlord and the other Landlord
Parties, from and against any such lien or claim for lien, and the
foreclosure or attempted foreclosure thereof. If Tenant fails to take the
actions described in subclause (i) or subclause (ii) above, then Landlord,
without investigating the validity of such lien or claim for lien, may,
upon ten (10) days prior written or oral notice to Tenant, pay or
discharge the same, and Tenant shall, as payment of additional Rent
hereunder, reimburse Landlord upon demand for the payment so paid by
Landlord, including Landlord's expenses and attorneys' fees related
thereto.
(d) GENERAL. Tenant agrees to indemnify, defend by counsel
reasonably acceptable to Landlord and hold Landlord and the other Landlord
Parties, and the Project, harmless of, from and against any and all
losses, damages, liabilities, claims, liens, costs and expenses, including
without limitation court costs and reasonable attorneys' fees and
expenses, arising in connection with any Tenant Alterations. All Tenant
Alterations done by Tenant or its contractors, including work done
pursuant to Section 9, shall be performed in a first class workerlike
manner using only good grades of materials and shall comply with all
insurance requirements of Landlord and all Laws. Within thirty (30) days
after substantial completion of any Tenant Alterations (other than
Decorating Improvements, if the terms of the last sentence of Section
14(a) above shall apply) by or on behalf of Tenant, Tenant shall furnish
to Landlord "as built" drawings of such Tenant Alterations. All Tenant
Alterations shall be performed in accordance with Landlord's standard
construction rules and regulations for the Building. In no event shall any
27
supervision or right to supervise by Landlord, nor shall any approvals
given by Landlord hereunder, constitute any warranty by Landlord to Tenant
of the adequacy of the design, workmanship or quality of the Tenant
Alterations, or impose any liability upon Landlord in connection with the
performance of such work.
15. ASSIGNMENT AND SUBLETTING.
(a) PROHIBITIONS. Except as provided in Section 15(h) below, Tenant
shall not, either prior or subsequent to the commencement of the Term, (i)
assign, transfer, mortgage, pledge, hypothecate or encumber or subject to
or permit to exist upon or be subjected to any lien or charge, this lease
or any interest under it, (ii) allow to exist or occur any transfer of or
lien upon this lease or Tenant's interest herein by operation of law,
(iii) sublet the Premises or any part thereof, or (iv) permit the use or
occupancy of the Premises or any part thereof for any purpose not provided
for under Section 6 of this lease or by anyone other than Tenant and
Tenant's employees. Landlord has the absolute right to withhold its
consent to any of such acts without giving any reason whatsoever, except
as herein expressly provided to the contrary in Section 15(d) or Section
15(h) below. In no event shall this lease be assigned or assignable by
voluntary or involuntary bankruptcy proceedings or otherwise, except as
provided by law, and in no event shall this lease or any rights or
privileges hereunder be an asset of Tenant under any bankruptcy,
insolvency or reorganization proceedings, except as provided by law. Any
of the foregoing performed or attempted in violation of the provisions of
this Section shall be null and void.
(b) CONTINUING LIABILITY. No assignment, subletting, use, occupancy,
transfer or encumbrance by Tenant shall operate to relieve Tenant from any
covenant, liability or obligation hereunder except to the extent, if any,
expressly provided for in any such written consent of Landlord to the
foregoing, and none of the foregoing, and no consent to any of the
foregoing, shall be deemed to be a consent to or relieve Tenant from
obtaining Landlord's consent to any subsequent assignment, subletting,
use, occupancy, transfer or encumbrance. Tenant shall pay all of
Landlord's reasonable costs, charges and expenses, including, without
limitation, reasonable attorneys' fees and expenses, incurred in
connection with any assignment, subletting, use, occupancy, transfer or
encumbrance made or requested by Tenant.
(c) NOTICE OF PROPOSED ASSIGNMENT OR SUBLEASE; RECAPTURE. Tenant
shall, by notice in writing, advise Landlord of its intention from, on and
after a stated date (which shall not be less than thirty (30) nor more
than one hundred eighty (180) days after the date of the giving of
Tenant's notice to Landlord) to assign this lease or sublet all or any
part of the Premises for the balance or any part of the Term, and, in such
event, Landlord shall have the right, to be exercised by giving written
notice to Tenant within fifteen (15) days after its receipt of Tenant's
notice, (1) to terminate this lease with respect to the space described in
Tenant's notice as of the date stated in Tenant's notice for the
commencement of the proposed sublease (provided that Landlord shall only
have the right to exercise the termination right under this option (1)
with respect to a transaction involving a proposed sublease for space on
any floor where Tenant is not leasing the entirety of such floor
hereunder, and then only if the term of the proposed sublease,
28
inclusive
of options, is three years or more and the subleased premises under the
proposed sublease does not also include the entirety of any full floor
being leased by Tenant hereunder), or (2) to consent or refuse to consent
to the proposed assignment or sublease, as described in Section 15(d)
below. Landlord's failure to respond within said 15-day period shall be
deemed an election to refuse to consent, as described in option (2) above.
Tenant's notice shall include the name and address of the proposed
assignee or subtenant, a true and complete copy of the proposed assignment
or sublease and sufficient information, as Landlord deems reasonably
necessary, to permit Landlord to determine (i) the financial
responsibility and character and the nature of the business of the
proposed assignee or subtenant, and (ii) whether Landlord has the right
under this lease to withhold consent to the proposed assignment or
sublease. If Landlord exercises its right to terminate this lease with
respect to such space described in Tenant's notice, then as of the date
stated in Tenant's notice for the commencement of the proposed sublease,
the Base Rent and Tenant's Proportionate Share shall be adjusted on the
basis of the number of square feet of Rentable Area retained by Tenant,
and this lease as so amended, shall continue thereafter in full force and
effect. Notwithstanding any of the foregoing to the contrary, if Landlord
notifies Tenant that Landlord has elected to terminate this lease with
respect to the space described in a notice from Tenant regarding a
prospective sublease transaction, as described in clause (1) above, Tenant
shall have the right, at its election, to rescind its earlier notice to
Landlord regarding such transaction, which rescission shall be exercised
by notice to Landlord no later than five (5) days following Tenant's
receipt of Landlord's election (time being of the essence), whereupon this
lease shall continue in full force and effect, and Tenant's earlier notice
to Landlord of a desire to make the subject sublease shall be deemed null
and void.
(d) GROUNDS FOR WITHHOLDING CONSENT. If Landlord, upon receiving Tenant's
notice with respect to any such space, does not exercise its right to
terminate as aforesaid, Landlord will not unreasonably withhold or delay
its consent to Tenant's assignment of this lease or subletting the space
covered by Tenant's notice. Landlord shall not be deemed to have
unreasonably withheld its consent to a proposed assignment of this lease
or to a proposed sublease of part or all of the Premises if its consent is
withheld because: (i) Tenant is then in default beyond applicable notice
and cure periods hereunder (provided that if Tenant is then in default
under this lease, Landlord shall have the right to condition any consent
to a proposed assignment or subletting to Tenant first having cured such
default); (ii) any notice of termination of this lease or termination of
Tenant's right of possession shall have been given under Section 19; (iii)
either the portion of the Premises which Tenant proposes to sublease, or
the remaining portion of the Premises, or the means of ingress or egress
to either the portion of the Premises which Tenant proposes to sublease or
the remaining portion of the Premises is of such nature that it will
violate any applicable Law, is of such accessibility, size or irregular
shape so as not to be suitable for normal renting purposes as space on a
multi-tenant floor within the Building; (iv) the proposed use of the
Premises by the proposed assignee or subtenant does not conform with the
use set forth in Section 6 hereof, or will violate any applicable Law,
will impose any obligation upon Landlord or increase Landlord's
obligations under or cost of compliance with any Laws, or will violate any
exclusive right Landlord has granted or contemplates granting in the
future to any tenant of any part of the Project; (v) in the reasonable
judgment of Landlord the proposed assignee or subtenant is of a
29
character or is engaged in a business which would be deleterious to the
reputation of the Project, Landlord or any of the constituent members of
Landlord; (vi) in the reasonable judgment of Landlord, the proposed
assignee or subtenant is not sufficiently financially responsible to
perform its obligations under the proposed assignment or sublease; (vii)
the proposed assignee or subtenant is a government (or subdivision or
agency thereof); or (viii) the proposed assignee or subtenant is an
occupant of the Building (or a "control group affiliate", as hereinafter
defined, of such occupant) or is a person or entity (or a control group
affiliate thereof) that Landlord is then in "active negotiations" (as
hereinafter defined) with or has been in "active negotiations" with during
the prior four (4) months with regard to leasing of space in the Building
and Landlord has space available and suitable for it in the Building;
provided, however, that the foregoing are merely examples of reasons for
which Landlord may withhold its consent and shall not be deemed exclusive
of any permitted reasons for reasonably withholding consent, whether
similar or dissimilar to the foregoing examples, and Landlord may consider
all relevant factors in determining whether to give or withhold its
consent. For purposes of the foregoing, the term "ACTIVE NEGOTIATIONS"
shall mean either that (1) Landlord and the prospective tenant have
entered into a written letter of intent for the leasing of space in the
Building, or (2) Landlord or the prospective tenant (as the case may be)
has submitted a proposed lease draft to the other relative to the leasing
of space at the Building, and the other has responded with written
comments to such lease draft, which have been delivered to the party
originally presenting the proposed lease. Further, for purposes of the
foregoing, the term "CONTROL GROUP AFFILIATE" shall mean any person or
entity which results from a merger or consolidation with the subject
party, or which acquires all or substantially all of the assets of the
subject party, or which is controlled by, controls, or is under common
control with, the subject party (with "CONTROL" for purpose of the
foregoing, meaning the power to directly or indirectly direct or cause the
direction of the management and policies of the subject party, through the
ownership of voting securities or other ownership interests, or
otherwise). Tenant agrees that all publicly disseminated advertisements
(as opposed to simply listing the Premises for assignment or subletting
with a listing broker) by Tenant or on Tenant's behalf with respect to the
assignment of this lease or subletting of any part of the Premises must be
approved in writing by Landlord prior to publication (which approval shall
not be unreasonably withheld, delayed or conditioned).
(e) EXCESS RENT PAYMENT. If Tenant (as Tenant or
debtor-in-possession) shall assign this lease or sublet the Premises, or
any part thereof, at a rental or for other consideration in excess of the
Rent or pro rata portion thereof due and payable by Tenant under this
lease, then Tenant shall pay to Landlord as additional Rent one-half (1/2)
of any such excess rent or other consideration immediately upon receipt
under any such assignment or, in the case of a sublease, (i) on the later
of the first day of each month during the term of any sublease, or the
fifth (5th) day following receipt from such subtenant, one-half (1/2) of
the excess of all rent and other consideration paid by the subtenant for
such month over the Rent then payable to Landlord pursuant to the
provisions of this lease for said month (or if only a portion of the
Premises is being sublet, one-half (1/2) of the excess of all rent and
other consideration due from the subtenant for such month over the portion
of the Rent then payable to Landlord pursuant to the provisions of this
lease for said month which is allocable on a Rentable Area
30
basis to the space sublet), and (ii) immediately following the receipt
thereof, one-half (1/2) of any other consideration realized by Tenant from
such subletting. Landlord shall not be responsible for any deficiency if
Tenant shall assign this lease or sublet the Premises or any part thereof
at a rental less than that provided for herein. Whenever reference is made
to the "excess" of rent or other consideration, such excess shall be
reduced by charging (i.e., on an amortized basis over the term of the
sublease or assignment) against the rent or other consideration paid by
such assignee or subtenant, reasonable brokerage commissions, advertising
expenses, reasonable attorneys' fees and leasehold improvements which
Tenant has paid in connection with assigning this lease or subleasing the
applicable portion of the Premises.
(f) LEASE ASSUMPTION; SUBTENANT ATTORNMENT. If Tenant shall assign
this lease, the assignee shall expressly assume all of the obligations of
Tenant hereunder in a written instrument provided by Landlord and
delivered to Landlord not later than ten (10) days prior to the effective
date of the assignment. If Tenant shall sublease any part of the Premises,
Tenant shall obtain and furnish to Landlord, not later than ten (10) days
prior to the effective date of such sublease and in form reasonably
satisfactory to Landlord, the written agreement of such subtenant to the
effect that the subtenant will attorn to Landlord, at Landlord's option
and written request (at Landlord's sole election), if this lease
terminates before the expiration of the sublease. Tenant shall, not later
than fifteen (15) days after the effective date of any such assignment or
sublease, deliver to Landlord a certified copy of the instrument of
assignment or sublease.
(g) CORPORATION, PARTNERSHIP AND LIMITED LIABILITY COMPANY
TRANSFERS. If Tenant is a corporation, 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, other than by reason of death, shall be deemed to be a voluntary
assignment of this lease by Tenant subject to the provisions of this
Section 15; provided, however, if the stock of Tenant is publicly traded,
then any changes in control of Tenant arising from the sale of Tenant's
stock on any nationally recognized public stock exchange shall not be
deemed to be a voluntary assignment hereunder. If Tenant is a partnership
or limited liability company, any transaction or series of transactions
(including without limitation any withdrawal or admittance of a partner or
member or any 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, other than by reason of death, shall be deemed to be a
voluntary assignment of this lease by Tenant subject to the provisions of
this Section 15. The term "control" as used in this lease means the power
to directly or indirectly direct or cause the direction of the management
and policies of Tenant, through the ownership of voting securities or
other ownership interests.
(h) PERMITTED TRANSFERS. Notwithstanding any of the foregoing,
Landlord's consent shall not be required for an assignment or sublet to a
Tenant Affiliate (as hereinafter defined), and Landlord shall not
terminate this lease with respect to the
31
Premises or any portion of the Premises or otherwise collect any excess
rent under subparagraph (e) above as a result of such assignment or sublet
to a Tenant Affiliate, as long as (i) Tenant gives reasonable prior notice
to Landlord of the proposed assignment or sublet (unless such disclosure
is prohibited by applicable State and/or Federal securities laws, in which
case such notice shall be given to Landlord as soon as legally permitted);
and (ii) if an assignment, such assignee assumes the obligations of Tenant
under this lease. As used herein, the term "TENANT AFFILIATE" shall mean
any entity (i) which results from a merger or consolidation with the
Tenant under this lease or (ii) which acquires all or substantially all of
the assets of the Tenant under this lease for a purpose other than to
circumvent the provisions of this Article 15; or (iii) which is controlled
by, controls, or is under common control with the Tenant under this lease.
For purposes of the foregoing, the term "control" shall have the meaning
described in Section 15(g) above. Except as provided in this subparagraph
(h), all of the terms and conditions described in Section 15 above shall
apply with respect to any assignment or subletting to a Tenant Affiliate
(including, without limitation, the terms of Section 15(b) above regarding
the continuing liability of the original named Tenant and each such
subsequent permitted Tenant Affiliate assignee hereunder).
16. WAIVER OF CERTAIN CLAIMS, INDEMNITY BY TENANT.
(a) GENERAL WAIVER. In addition to and without limiting or being
limited by any other releases or waivers of claims in this lease, but
rather in confirmation and furtherance thereof, to the extent not
prohibited by law, Landlord and Tenant each releases and waives any and
all claims for, and rights to recover, damages against and from the other,
and the other's respective agents, members, partners, shareholders,
officers and employees (collectively, the "RELEASED PARTIES"), for loss,
damage or destruction to any of its property (including the Premises, the
Building and their contents), the elements of which are insured against or
which would have been insured against had such party suffering such loss,
damage or destruction maintained the property or physical damage insurance
policies required under Section 22 hereof. In no event shall this clause
be deemed, construed or asserted (i) to affect or limit any claims or
rights against any Released Parties other than the right to recover
damages for loss, damage or destruction to property, or (ii) to benefit
any third party other than the Released Parties.
(b) INDEMNITY. In addition to and without limiting or being limited
by any other indemnity in this lease, but rather in confirmation and
furtherance thereof, to the extent not prohibited by law, Tenant agrees to
indemnify, defend by counsel reasonably acceptable to Landlord and hold
Landlord and the Landlord Parties, and the Project, harmless of, from and
against any and all losses, damages, liabilities, claims, liens, costs and
expenses, including court costs and reasonable attorneys' fees and
expenses, in connection with injury to or death of any person occurring
within the Premises or elsewhere at the Project, or with respect to damage
to or theft, loss or loss of the use of any property, occurring in or
about the Premises or elsewhere at the Project, but only to the extent
that the foregoing losses, damages, liabilities, claims, liens, costs and
expenses arise from or are caused by the undertaking by Tenant or its
agents, employees or contractors of Tenant Alterations (including, without
limitation, the Tenant's Work) or repairs at the Premises, or from any
breach or default on the part of Tenant in the
32
performance of any covenant or agreement on the part of Tenant to be
performed pursuant to the terms of this lease, or from any other negligent
act or omission or willful misconduct of Tenant, or any of its employees,
agents, licensees, invitees or contractors.
(c) WAIVER. To the extent permitted by law, Tenant releases Landlord
and the Landlord Parties from, and waives all claims for, damage or injury
to person or property sustained by the Tenant or any occupant of the
Building or Premises resulting directly or indirectly from any existing or
future condition, defect, matter or thing in and about the Project or the
Premises or any part of either or any equipment or appurtenance therein,
or resulting from any accident in or about the Project or resulting
directly or indirectly from any act or neglect of any tenant or occupant
of the Building or of any other person, including Landlord's agents and
servants, except where resulting from the neglect or willful act of
Landlord or any of the Landlord Parties. Tenant hereby waives any
consequential damages, compensation or claims for inconvenience or loss of
business, rents, or profits as a result of any injury or damage occurring
at or about the Building.
(d) LANDLORD'S NEGLIGENCE. Subject to the provisions of Section
16(a) and Section 16(c) to the extent permitted by law, no agreement of
Tenant in this lease shall be deemed to exempt Landlord from liability or
damages for injury to persons or damage to property caused by or resulting
from the negligence of Landlord, its agents, servants or employees, in the
operation or maintenance of the Premises or Building.
(e) LANDLORD INDEMNITY. In addition to and without limiting or being
limited by any other indemnity in this lease, but rather in confirmation
and furtherance thereof, to the extent not prohibited by law, Landlord
agrees to indemnify, defend by counsel reasonably acceptable to Tenant and
hold Tenant, its constituent members, and their respective officers,
directors, members, partners, agents, employees, successors and assigns
(collectively, the "TENANT PARTIES") harmless of, from and against any and
all losses, damages, liabilities, claims, liens, costs and expenses,
including court costs and reasonable attorneys' fees and expenses, imposed
on them in connection with injury to or death of any person occurring in
connection with Landlord's performance of the Landlord's Work or any other
activities by or on behalf of Landlord in the Premises, or otherwise
occurring within the common areas of the Building, or with respect to
damage to or theft, loss or loss of the use of property of any person
occurring within the common areas of the Building, but only to the extent
that the foregoing losses, damages, liabilities, claims, liens, costs and
expenses arise from or are caused directly or indirectly by any negligent
act or omission or willful misconduct of Landlord, or any of its
employees, agents, officers, directors or partners, or from any breach of
Landlord's obligations under this lease.
17. DAMAGE OR DESTRUCTION BY CASUALTY.
(a) TERMINATION OF LEASE; REPAIR BY LANDLORD. If the Premises or the
Building shall be damaged by fire or other casualty and if such damage
does not render all or a substantial portion of the Premises or the
Building untenantable, then Landlord shall proceed with reasonable
promptness to repair and restore the core and shell of the Building and
the Premises so as to render the Premises tenantable, subject to
reasonable
33
delays for insurance adjustments and delays caused by matters beyond
Landlord's reasonable control, and also subject to zoning laws and
building codes then in effect. If any such damage renders all or a
substantial portion of the Premises or the Building untenantable, Landlord
shall, with reasonable promptness after the occurrence of such damage,
estimate the length of time that will be required to substantially
complete the repair and restoration of the core and shell of the Building
and the Premises, as the case may be, necessitated by such damage and
shall by notice advise Tenant of such estimate. If it is so estimated that
the amount of time required to substantially complete such repair and
restoration will exceed two hundred forty (240) days from the date such
damage occurred, then either Landlord or Tenant (but Tenant shall have
such right only if the damage was not caused by the neglect or willful act
of Tenant, its agents, employees, contractors, or invitees, and only if
all or a substantial portion of the Premises is rendered untenantable and
the estimated time required for Landlord to substantially complete such
repair or restoration to render the Premises tenantable will exceed such
two hundred forty (240) day period) shall have the right to terminate this
lease as of the date of notice of such election by giving notice to the
other at anytime within twenty (20) days after Landlord gives Tenant the
notice containing said estimate (it being understood that Landlord may, if
it elects to do so, also give such notice of termination together with the
notice containing said estimate); provided, however, that Landlord shall
not have the right to so terminate this lease on account of any such fire
or other casualty unless Landlord also terminates the leases of all
similarly affected office tenants at the Building. Unless this lease is
terminated as provided in the preceding sentence, Landlord shall proceed
with reasonable promptness to repair and restore the core and shell of the
Building or the Premises so as to render the Premises tenantable, subject
to reasonable delays for insurance adjustments and delays caused by
matters beyond Landlord's reasonable control, and also subject to zoning
laws and building codes then in effect. Landlord shall have no liability
to Tenant, and Tenant shall not be entitled to terminate this lease
(except as hereinafter provided) if such repairs and restoration are not
in fact completed within the time period estimated by Landlord, as
aforesaid, or within said two hundred forty (240) days. However, if such
repairs and restoration are not completed by a date ("OUTSIDE DATE") which
is twelve (12) months after the date of such fire or other casualty (or
one hundred twenty-five (125) days after the expiration of the time period
estimated by Landlord as aforesaid, if longer than two hundred forty (240)
days and neither party terminated this lease as permitted), which Outside
Date shall be extended (as to Tenant's ability to terminate only) by all
periods of delay attributable to the acts or omissions of Tenant or
Tenant's agents, employees or contractors, for any reason whatsoever, then
either party may terminate this lease, effective as of the date of notice
of such election, by giving written notice to the other party within
thirty (30) day period after said Outside Date as extended as aforesaid,
but prior to substantial completion of repair or restoration.
Notwithstanding anything to the contrary herein set forth: (i) Landlord
shall have no duty pursuant to this Section 17 to repair or restore any
portion of Tenant's Alterations or by other improvements, additions or
alterations made by or on behalf of Tenant in the Premises, including
improvements performed by Landlord or Tenant pursuant to this lease and/or
the Workletter, if any; (ii) Landlord shall not be obligated (but may, at
its option, so elect) to repair or restore the Premises or Building if the
damage is due to an uninsurable casualty or if insurance proceeds are
insufficient to
34
pay for such repair or restoration, or if any Mortgagee applies proceeds
of insurance to reduce its loan balance, and the remaining proceeds, if
any, available to Landlord are not sufficient to pay for such repair or
restoration; or (iii) if any such damage rendering all or substantial
portion of the Premises or Building untenantable shall occur during the
last eighteen (18) months of the Term, either party (but as to Tenant's
right, only if all or a substantial portion of the Premises is rendered
untenantable) shall have the option to terminate this lease by giving
written notice to the other within thirty (30) days after the date such
damage occurred, and if such option is so exercised, this lease shall
terminate as of the date of such notice.
(b) REPAIR BY TENANT. If this lease is not terminated pursuant to
this Section 17, Tenant shall, in accordance with Section 14, proceed with
reasonable promptness to repair and restore all Tenant's Alterations and
all other alterations, additions and improvements in the Premises, other
than any repairs or restoration required to be made by Landlord pursuant
to Section 17(a) above, to as near the condition which existed prior to
the fire or other casualty as is reasonably possible. Tenant agrees and
acknowledges that Landlord shall be entitled to the proceeds of any
insurance coverage carried by Tenant relating to improvements and
betterments to the Premises, to the extent Landlord is obligated under
this Section 17 to repair or restore damage to those items covered by such
insurance or if this lease terminates.
(c) ABATEMENT OF RENT. Except to the extent arising from the
negligence or willful acts of Tenant or its agents, employees, contractors
or invitees, in the event any such fire or casualty damage renders the
Premises untenantable and if this lease shall not be terminated pursuant
to the foregoing provisions of this Section 17 by reason of such damage,
then Rent shall xxxxx during the period beginning with the date of such
damage and ending with the date when Landlord substantially completes its
repair or restoration required hereunder. Such abatement shall be in an
amount bearing the same ratio to the total amount of Rent for such period
as the portion of the Rentable Area of the Premises which is untenantable
and not used by Tenant from time to time bears to the Rentable Area of the
entire Premises. In the event of termination of this lease pursuant to
this Section 17, Rent shall be apportioned on a per diem basis and be paid
to the date of the termination.
(d) UNTENANTABILITY. As used in this lease, the term "untenantable"
means reasonably incapable of being occupied for its intended use due to
damage to the Premises or Building. Notwithstanding anything contained to
the contrary in this Section 17, neither the Premises nor any portion of
the Premises shall be deemed untenantable if Landlord is not required to
repair or restore same (or if Landlord is required to repair or restore
same, then following such time as Landlord has substantially completed the
repair and restoration work required to be performed by Landlord under
this Section 17), or if Tenant continues to actually occupy the subject
portion of the Premises.
(e) CORE AND SHELL. The term "CORE AND SHELL" shall include all base
Building improvements at the Building or within the Premises (as the case
may be), but specifically excludes any work related to tenant improvements
constructed or to be
35
constructed by or for Tenant or other tenants or installed within the
Premises or within any other tenant's premises.
18. EMINENT DOMAIN.
(a) SUBSTANTIAL TAKING. If the entire Project or the entire
Building, or a substantial part of either of them, or any part of the
Project which includes all or a substantial part of the Premises, shall be
taken or condemned by any competent authority for any public or
quasi-public use or purpose, the Term of this lease shall end upon and not
before the earlier of the date when the possession of the part so taken
shall be required for such use or purpose or the effective date of the
taking. If any condemnation proceeding shall be instituted in which it is
sought to take or damage any part of the Project, the taking or damaging
of which would, in Landlord's reasonable opinion, prevent the economical
operation of the Project, or if the grade of any street or alley adjacent
to the Land or the Building is changed or any such street or alley is
closed by any competent authority, and such taking, damage, change of
grade or closing makes it necessary or desirable to remodel the Building
to conform to the taking, damage, change of grade or closing, Landlord
shall have the right to terminate this lease upon written notice to Tenant
given not less than one hundred twenty (120) days prior to the date of
termination designated in the notice. In either of the events above
referred to, Rent shall be apportioned on a per diem basis and be payable
to the date of the termination.
(b) TAKING OF PART. In the event a part of the Building or the
Premises is taken or condemned by any competent authority and this lease
is not terminated as provided in Section 18(a) above, this lease shall be
amended to reduce or increase, as the case may be, the Monthly Base Rent
and Tenant's Proportionate Share to reflect the Rentable Area of the
Premises or Building, as the case may be, remaining after any such taking
or condemnation. Landlord, upon receipt and to the extent of the award in
condemnation (or proceeds of sale) shall make necessary repairs and
restorations to the Premises (exclusive of any Tenant's Alterations, or
any other improvements made by or on behalf of Landlord or Tenant) and to
the Building to the extent necessary to constitute the portion of the
Building not so taken or condemned as a complete architectural and
economically efficient unit.
(c) COMPENSATION. Landlord shall be entitled to receive the entire
award (or sale proceeds) from any such taking, condemnation or sale
without any payment to Tenant, and Tenant hereby assigns to Landlord all
of Tenant's interest, if any, in such award; provided, however, Tenant
shall have the right separately to pursue against the condemning authority
a separate award in respect of the loss, if any, to Tenant Alterations
paid for by Tenant without any credit or allowance from Landlord and with
respect to Tenant's trade fixtures and moving expenses, so long as there
is no diminution of Landlord's award as a result, and subject to the
rights of any ground lessor or mortgagee of Landlord with respect thereto.
36
19. DEFAULT; LANDLORD'S RIGHTS AND REMEDIES.
(a) DEFAULT. The occurrence of any one or more of the following
matters constitutes a "Default" by Tenant under this lease:
(i) Failure by Tenant to pay any Rent when due, if such
failure continues for five (5) business days after written notice to
Tenant that such payment was not received when due;
(ii) Failure by Tenant to pay any other money required to be
paid by Tenant under this lease when due, if such failure continues
for ten (10) business days after written notice to Tenant of such
failure;
(iii) Failure by Tenant to observe or perform any of the
covenants in respect of assignment and subletting set forth in
Section 15;
(iv) Failure by Tenant to cure forthwith, promptly after
receipt of notice from Landlord, any hazardous condition which
Tenant has created or permitted in violation of law or of this
lease;
(v) Failure by Tenant to complete, execute and deliver any
instrument or document required to be completed, executed and
delivered by Tenant pursuant to Section 20 or Section 24 of this
lease, within the time required for such instrument or document in
accordance with such Sections;
(vi) Failure by Tenant to observe or perform any other
covenant, agreement, condition or provision of this lease, if such
failure shall continue for fifteen (15) business days after written
notice thereof from Landlord to Tenant; provided that such 15
business day period shall be extended for the time reasonably
required to complete such cure (not to exceed, in any event, an
additional 75-day period), if such failure cannot reasonably be
cured within said 15 business day period and Tenant commences to
cure such failure within said 15 business day period and thereafter
diligently and continuously proceeds to cure such failure;
(vii) The levy upon execution or the attachment by legal
process of the leasehold interest of Tenant, or the filing or
creation of a lien in respect of such leasehold interest, which lien
shall not be released or discharged within thirty (30) days from the
date of such filing;
(viii) Tenant vacates or abandons the Premises for a period in
excess of ten (10) business days, or fails to take possession of the
Premises, within thirty (30) days after notice from Landlord that
the Premises are available for occupancy. The transfer of a
substantial part of the operations, business and personnel of Tenant
to some other location shall be deemed, without limiting the meaning
of the term "vacates or abandons", to be a vacation or abandonment
within the meaning of this clause (viii), whether or not Tenant
thereafter continues to pay the Rent due under this lease;
37
(ix) Tenant becomes insolvent or bankrupt or admits in writing
its inability to pay its debts as they mature, or makes an
assignment for the benefit of creditors, or applies for or consents
to the appointment of a trustee or receiver for Tenant or for the
major part of its property;
(x) A trustee or receiver is appointed for Tenant or for a
major part of its property, without Tenant's application therefor or
consent thereto, and is not discharged within sixty (60) days after
such appointment; or
(xi) Any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceeding, or other proceeding for relief under any
bankruptcy law or similar law for the relief of debtors, is
instituted (A) by Tenant, or (B) against Tenant and is allowed
against it or is consented to by it or is not dismissed within sixty
(60) days after such institution.
(b) LANDLORD'S RIGHTS AND REMEDIES. If a Default occurs, Landlord
shall have the rights and remedies hereinafter set forth, which shall be
distinct, separate and cumulative and shall not operate to exclude or
deprive Landlord of any other right or remedy allowed it at law or in
equity:
(i) Landlord may terminate this lease, in which event the Term
of this lease shall end, and all right, title and interest of Tenant
hereunder shall expire, on the date stated in such notice;
(ii) Landlord may terminate the right of Tenant to possession
of the Premises without terminating this lease, whereupon the right
of Tenant to possession of the Premises or any part thereof shall
cease on the date stated in such notice; and
(iii) Landlord may enforce the provisions of this lease and
may enforce and protect the rights of Landlord hereunder by a suit
or suits in equity or at law for the specific performance of any
covenant or agreement contained herein, and for the enforcement of
any other appropriate legal or equitable remedy, including without
limitation distraint for rent, injunctive relief, recovery of all
money due or to become due from Tenant under any of the provisions
of this lease and recovery of damages incurred by Landlord by reason
of the Default.
(iv) Landlord may cure or correct such Default or take steps
to perform any covenant, agreement, condition or provisions of this
lease, and all costs and expenses incurred by Landlord in so doing
(including reasonable attorneys' fees) shall be paid by Tenant to
Landlord as additional rent upon demand plus interest at the Default
Rate (defined in Section 28(i)) from the date of expenditure.
Landlord's proceeding under the rights reserved to Landlord under
this Section 19(b)(iv) shall not in any way prejudice or waive any
rights as Landlord might otherwise have against Tenant by reason of
that or any other Default.
(c) SURRENDER. If Landlord exercises any of the remedies provided
for in subparagraphs (i) and (ii) of Section 19(b), Tenant shall surrender
possession of and
38
vacate the Premises and immediately deliver possession thereof to
Landlord, and Landlord may re-enter and take complete and peaceful
possession of the Premises, with process of law, full and complete license
so to do being hereby granted to Landlord, and Landlord may remove all
occupants and property therefrom, using such force as may be necessary in
compliance with applicable law, without being deemed in any manner guilty
of trespass, eviction or forcible entry and detainer, and without
relinquishing Landlord's right to Rent or any other right given to
Landlord hereunder or by law or in equity.
(d) TERMINATION OF RIGHT OF POSSESSION. If Landlord terminates the
right of Tenant to possession of the Premises without terminating this
lease, as provided for by subparagraph (ii) of Section 19(b), then
Landlord shall be entitled to recover from Tenant all the fixed dollar
amounts of Rent accrued and unpaid for the period up to and including such
termination date, as well as all other additional sums payable by Tenant,
or for which Tenant is liable or in respect of which Tenant has agreed to
indemnify Landlord under any of the provisions of this lease, which may be
then owing and unpaid, and all costs and expenses, including without
limitation court costs and reasonable attorneys' fees and expenses
incurred by Landlord in the enforcement of its rights and remedies
hereunder, and in addition, Landlord shall be entitled to recover from
Tenant from time to time, and Tenant shall remain liable for, all Rent and
all other additional sums thereafter accruing as they become due under
this lease during the period from the date of such notice of termination
of possession to the stated end of the Term. In any such case, Landlord
shall use reasonable efforts as required by applicable law to mitigate
damages by reletting the Premises for the account of Tenant for such rent,
for such time (which may be for a term extending beyond the Term of this
lease), in such portions and upon such terms as Landlord in Landlord's
discretion shall determine, and Landlord shall not be required to accept
any tenant offered by Tenant or to observe any instructions given by
Tenant relative to such reletting. Landlord may give priority over leasing
the Premises to any other space Landlord desires to lease in the Building
and shall not be required in any case to offer rent, length of terms or
other terms for the Premises which are or would be less favorable to
Landlord than being offered for comparable space of Landlord in the
Building. Also, in any such case, Landlord may make repairs, alterations
and additions in or to the Premises and redecorate the same to the extent
deemed by Landlord necessary or desirable, and in connection therewith
Landlord may change the locks to the Premises, and Tenant shall upon
written demand pay the cost thereof together with Landlord's expenses of
reletting. Landlord may collect the rents from any such reletting and
shall apply the same first to the payment of the expenses of reentry,
redecoration, repair, alterations and reletting and second to the payment
of Rent herein provided to be paid by Tenant, and any excess or residue
shall operate only as an offsetting credit against the amount of Rent, if
any, due and owing or as the same thereafter becomes due and payable
hereunder, but the use of such offsetting credit to reduce the amount of
Rent due Landlord, if any, shall not be deemed to give Tenant any right,
title or interest in or to such excess or residue, and any such excess or
residue shall belong to Landlord solely; provided that in no event shall
Tenant be entitled to such a credit against Rent in excess of the
aggregate sum (including Base Rent and Additional Rent) which would have
been paid by Tenant for the period for which the credit to Tenant is being
determined had no Default occurred. No such re-entry, repossession,
repairs, alterations, additions or reletting shall be construed as an
eviction or ouster of Tenant or as an election on
39
Landlord's part to terminate this lease, unless a written notice of such
intention is given to Tenant, or shall operate to release Tenant in whole
or in part from any of Tenant's obligations hereunder, and Landlord may,
at any time and from time to time, xxx and recover judgment for any
deficiencies from time to time remaining after the application from time
to time of the proceeds of any such reletting.
(e) TERMINATION OF LEASE. In the event of the termination of this
lease by Landlord as provided for by subparagraph (i) of Section 19(b),
Landlord shall be entitled to recover from Tenant all the fixed dollar
amounts of Rent accrued and unpaid for the period up to and including such
termination date, as well as all other additional sums payable by Tenant,
or for which Tenant is liable or in respect of which Tenant has agreed to
indemnify Landlord under any of the provisions of this lease, which may be
then owing and unpaid, and all costs and expenses, including without
limitation court costs and reasonable attorneys' fees and expenses
incurred by Landlord in the enforcement of its rights and remedies
hereunder, and in addition, Landlord shall be entitled to recover an
amount equal to the present value (calculated using a discount rate equal
to seven percent (7%) per annum) of the aggregate Base Rent and Additional
Rent payable for the period from the termination date stated in Landlord's
notice terminating this lease until the date which would have been the
Expiration Date but for such termination, less the present value
(calculated using a discount rate equal to seven percent (7%) per annum)
of the fair rental value of the Premises for the same period (which fair
rental value shall be calculated so as to include a reasonable vacancy
period for reletting the Premises and deductions for reasonable expenses
and inducements incurred by Landlord to achieve such reletting, including
without limitation attorneys' fees and expenses, brokerage fees,
advertising costs, rent abatements, tenant improvement allowances and the
like).
(f) TENANT'S PROPERTY. All property of Tenant removed from the
Premises by Landlord or which becomes Landlord's property pursuant to any
provisions of this lease or by law may be handled, removed or stored by
Landlord at the cost and expense of Tenant, and Landlord shall in no event
be responsible for the value, preservation or safekeeping thereof. Tenant
shall pay Landlord for all expenses incurred by Landlord in such removal
and for storage charges for such property so long as the same shall be in
Landlord's possession or under Landlord's control. Without limitation of
other rights or remedies available to Landlord on account of Tenant's
default hereunder, it is understood and agreed that all property of Tenant
which is not removed from the Premises or retaken from storage by Tenant
on or before the end of the Term, however terminated, or the termination
of Tenant's right of possession, shall, at Landlord's option, be
conclusively deemed to have been conveyed by Tenant to Landlord as by xxxx
of sale, without further payment or credit by Landlord to Tenant.
(g) BANKRUPTCY ACCEPTANCE OR REJECTION. If Landlord shall not be
permitted to terminate this lease or Tenant's right of possession of the
Premises under the Bankruptcy Code, Tenant on behalf of itself as a
tenant-in-possession or on behalf of any bankruptcy trustee for Tenant
(alternatively referred to as "Tenant" in this Section 19(e)) agrees,
within sixty (60) days after request by Landlord to the bankruptcy court
having jurisdiction over Tenant's bankrupt estate (the "BANKRUPTCY
COURT"), to assume or reject
40
this lease, and Tenant agrees not to seek or request any extension or
continuation of such time in any bankruptcy proceeding to assume or reject
this lease.
Tenant's right to assume this lease as aforesaid shall be expressly
conditioned upon Tenant fully satisfying the requirements under Section
365(b)(1) of the Bankruptcy Code, as such Section may be amended from time
to time. In no event after such assumption of this lease shall any then
existing Default remain uncured for a period in excess of the earlier of
ten (10) business days or the time period for curing such default as set
forth herein. Failure to cure such default within such time shall
constitute a Default hereunder.
Landlord and Tenant agree that adequate assurance of performance of
this lease, as set forth in Section 365(b)(1) of the Bankruptcy Code, as
such Section may be amended from time to time, with respect to any
monetary Default under this lease, shall be in the form of cash or
immediately available funds in an amount equal to at least the amount of
such monetary Default so as to assure the Landlord that it will realize
the amount of such Default.
If Tenant assumes this lease and proposes to assign this lease
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, then notice of such proposed assignment, setting forth (i) the name
and address of such person or entity, (ii) all of the terms and conditions
of such offer, and (iii) the adequate assurance to be provided Landlord to
assure such person's or entity's future performance under this lease,
shall be given to Landlord by Tenant within twenty (20) days after receipt
of such offer by Tenant and in no event later than ten (10) business days
prior to the date that Tenant shall make application to the Bankruptcy
Court for authority and approval to enter into such assumption and
assignment. In addition, Landlord shall thereupon have the right of first
refusal, to be exercised by notice to Tenant given within ten (10)
business days 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 or entity, less any brokerage commissions which may be payable out
of any consideration to be paid by such person or entity for the
assignment of this lease.
Any person or entity to which this lease is assigned pursuant to the
provisions of the Bankruptcy Code shall be 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; provided, however, that any options
to renew or extend the Term of this lease, and any right of offer or
refusal or other options or rights to lease additional space in the
Building shall be terminated effective as of the date on which such
petition was filed with the Bankruptcy Court. Any such assignee shall upon
demand execute and deliver to Landlord an instrument confirming such
assumption of this lease on such terms. Nothing contained in this Section
shall, in any way, constitute a waiver of any provisions of this lease
relating to assignment or subletting.
41
All monies or other considerations payable by Tenant or otherwise to
be delivered to or on behalf of Landlord under this lease, whether or not
expressly denominated as Rent hereunder, shall constitute rent for the
purposes of Section 502(b)(6) of the Bankruptcy Code, as such Section may
be amended from time to time, and be the sole property of Landlord.
From and after the date of the filing of any petition with the
Bankruptcy Court, to the extent permitted by applicable law, Landlord
shall have no obligation to provide any services or utilities to the
Premises as herein required, unless and until Tenant shall have paid and
be current in all payments or other charges therefor. Such payments and
charges shall constitute administrative charges or expenses under Section
507(a)(1) of the Bankruptcy Code, as such Section may be amended from time
to time.
(h) WAIVER OF NOTICES NOT PROVIDED FOR IN THIS LEASE. Except for
notices specifically required hereunder, Tenant expressly waives the
service of any notice of intention to terminate this lease or to reenter
the Premises and waives the service of any demand for payment of rent or
for possession and waives the service of any and every other notice or
demand prescribed by any ordinance, statute or other law (except as
expressly otherwise provided in this lease) and agrees that the breach of
any covenants or agreements provided in this lease shall, in and of
itself, without the service of any notice or demand whatever (except as
expressly otherwise provided in this lease), constitute a forcible
detainer by Tenant of the Premises.
(i) WAIVER OF TRIAL BY JURY. Landlord and Tenant hereby do waive
trial by jury in any action, proceeding or counterclaim brought by either
of the parties hereto against the other on any matter whatsoever arising
out of or in any way connected with this lease, the relationship of
Landlord and Tenant, Tenant's use of or occupancy of the Premises or any
claim of injury or damage and any emergency statutory or any other
statutory remedy. If Landlord commences any summary proceeding for
non-payment of rent, Tenant will not interpose any counterclaim of
whatever nature or description in any such proceeding, except that Tenant
may interpose any mandatory counterclaim (i.e., any claim that Tenant may
not lawfully pursue in any other or separate proceedings).
20. RIGHTS OF MORTGAGEES AND GROUND LESSORS .
(a) SUBORDINATION OF LEASE. Landlord may have heretofore or may
hereafter encumber with a mortgage or trust deed the Building, the Land,
the Project, any part thereof or any interest therein, may sell and lease
back the Land, or any part of the Project, and may encumber the leasehold
estate under such a sale and leaseback arrangement with a mortgage or
trust deed. (Any such mortgage or trust deed is herein called a "MORTGAGE"
and the holder of any such mortgage or the beneficiary under any such
trust deed is herein called a "MORTGAGEE." Any such lease of the Land or
other part of the Project is herein called a "GROUND LEASE" and the lessor
under any such lease is herein called a "GROUND LESSOR.") This lease and
the rights of Tenant hereunder shall be and are hereby expressly made
subject to and subordinate at all times to any Mortgage and to any Ground
Lease now or hereafter existing, and to all amendments, modifications,
renewals, extensions, consolidations and replacements thereof, and to all
42
advances made or hereafter to be made upon the security thereof. Tenant
agrees to execute and deliver to Landlord such further instruments
consenting to or confirming the subordination of this lease to any
Mortgage and to any Ground Lease and containing such other provisions
which may be requested in writing by Landlord within ten (10) business
days after Tenant's receipt of such written request; provided that any
such instrument with respect to future Mortgages or Ground Leases shall
also include recognition and non-disturbance provisions to the effect that
the Mortgagee or Ground Lessor, as the case may be, will not disturb
Tenant's continued occupancy of the Premises under this lease so long as
Tenant is not in Default (i.e., meaning beyond applicable notice and cure
period) hereunder, which recognition and non-disturbance provisions may
contain such other terms and conditions as are contained in the
Mortgagee's or Ground Lessor's customary form of subordination,
non-disturbance and attornment agreement (which may include the provisions
set forth below in this Section 20). Without limitation of the foregoing,
Tenant hereby agrees to execute and deliver to Landlord, upon Landlord's
or Tenant's request, three (3) originals of the existing Mortgagee's
standard form of Subordination Nondisturbance and Attornment Agreement,
subject to any commercially reasonable modifications as are mutually
agreeable to Tenant and such Mortgagee (herein, the "INITIAL SNDA").
Landlord shall use commercially reasonable efforts to cause the existing
Mortgagee to execute and return one (1) fully executed original of the
Initial SNDA to Tenant within thirty (30) days following the date hereof.
(b) NOTICE OF AND OPPORTUNITY TO CURE DEFAULTS. Tenant agrees that
if Landlord defaults in the performance or observance of any covenant or
condition of this lease required to be performed or observed by Landlord
hereunder, Tenant will give written notice specifying such default by
certified or registered mail, postage prepaid, to any Mortgagee or Ground
Lessor of which Tenant has been notified in writing, and before Tenant
exercises any right to terminate this lease which Tenant may have on
account of any such default of Landlord, such Mortgagee or Ground Lessor
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 or Ground Lessor has commenced
and is diligently pursuing the remedies necessary to cure such default,
including but not limited to commencement of foreclosure proceedings or
other proceedings to acquire possession of the mortgaged or leased estate,
if necessary to effect such cure). Such period of time shall be extended
by any period within which such Mortgagee or Ground Lessor is prevented
from commencing or pursuing such foreclosure proceedings or other
proceedings to acquire possession of the mortgaged or leased estate by
reason of Landlord's bankruptcy.
(c) RIGHTS OF SUCCESSORS. If any Mortgage is foreclosed, or
Landlord's interest under this lease is conveyed or transferred in lieu of
foreclosure, or if any Ground Lease is terminated:
(i) No person or entity which as the result of any of the
foregoing has succeeded to the interest of Landlord in this lease
(any such person or entity being hereafter called a "Successor")
shall be liable for any default by Landlord or any other matter
which occurred prior to the date such Successor succeeded to
43
Landlord's interest in this lease, nor shall such Successor be bound
by or subject to any offsets or defenses which Tenant may have
against Landlord or any other predecessor in interest to such
Successor (provided, however, that except as expressly provided in
this Section 20, nothing herein shall be deemed to limit such
Successor's obligations under this lease which are required to be
performed and which first arise or accrue from and after the date
such Successor succeeds to Landlord's interest hereunder, as well as
obligations under this lease which have not been performed by any
prior owner and which continue to be unperformed at the time of the
succession and which directly affect, in any material respect,
Tenant's quiet enjoyment of the Premises and are reasonably curable
by the Successor, such as required maintenance, repairs, restoration
and furnishing of service).
(ii) Upon request of any Successor, Tenant will attorn to such
Successor, as Landlord under this lease, subject to the provisions
of this Section 20(c) and Section 20(e), and will execute and
deliver such instruments as may be necessary or appropriate to
evidence such attornment within ten (10) days after receipt of a
written request to do so.
(iii) No Successor shall be bound to recognize any prepayment
by more than thirty (30) days of Base Rent or Additional Rent.
(iv) No Successor shall be bound to recognize any amendment or
modification of this lease made without the written consent of the
Mortgagee or Ground Lessor (as the case may be), to the extent such
consent was required pursuant to any agreement between Landlord and
any Mortgagee or Ground Lessor.
(d) SUBORDINATION OF MORTGAGE. Notwithstanding anything to the
contrary contained herein, any Mortgagee may subordinate, in whole or in
part, its Mortgage to this lease by sending Tenant notice in writing
subordinating all or any part of such Mortgage to this lease, and Tenant
agrees to execute and deliver to such Mortgagee such further instruments
consenting to or confirming the subordination of all or any portion of its
Mortgage to this lease and containing such other provisions which may be
requested in writing by such Mortgagee within ten (10) business days after
Tenant's receipt of such written request.
(e) LIABILITY OF MORTGAGEE AND GROUND LESSOR. Whether or not any
Mortgage is foreclosed or any Ground Lease is terminated, or any Mortgagee
or Ground Lessor succeeds to any interest of Landlord under this lease, no
Mortgagee or Ground Lessor shall have any liability to Tenant for any
security deposit paid to Landlord by Tenant hereunder, unless such
security deposit has actually been received by such Mortgagee or Ground
Lessor. Without limitation of the foregoing, Landlord agrees to deliver
any security deposit held by Landlord hereunder to the respective
Mortgagee or Ground Lessor, on or before such time as said Mortgagee or
Ground Lessor (as the case may be) succeeds to the interest of Landlord
under this lease.
44
(f) REQUESTS BY MORTGAGEE OR GROUND LESSOR. Should any prospective
Mortgagee or Ground Lessor require a modification or modifications of this
lease, which modification or modifications will not cause an increased
cost or expense to Tenant or in any other way materially and adversely
change the rights and obligations of Tenant hereunder, in the reasonable
judgment of Tenant, then and in such event, Tenant agrees that this lease
may be so modified and agrees to execute whatever documents are required
therefor and deliver the same to Landlord within ten (10) business days
following written request therefor. Should any prospective Mortgagee or
Ground Lessor require execution of a memorandum of this lease for
recording (containing, among other customary provisions, the names of the
parties, a description of the Premises and the Term of this lease), Tenant
agrees to execute such memorandum of lease and deliver the same to
Landlord within ten (10) business days following the request therefor.
21. DEFAULT UNDER OTHER LEASES. If the term of any lease, other than this
lease, heretofore or hereafter made by Tenant for any space in the Building
shall be terminated or terminable after the making of this lease because of any
default by Tenant under such other lease, such fact shall empower Landlord, at
Landlord's sole option, to terminate this lease by written notice to Tenant or
to exercise any of the rights or remedies set forth in Section 19.
22. INSURANCE AND SUBROGATION.
(a) TENANT'S INSURANCE. Tenant shall carry insurance during the
entire Term hereof insuring Tenant, and insuring Landlord, Landlord's
constituent members and agents, all Mortgagees and Ground Lessors and
their respective agents, partners and employees, with terms, coverages and
in companies satisfactory to Landlord, and with such changes in insured
parties and increase in limits as Landlord may from time to time request,
but initially Tenant shall maintain the following coverages in the
following amounts:
(i) Public liability insurance with the broad form commercial
liability endorsement, including contractual liability insurance
covering Tenant's indemnity obligations hereunder, insuring against
claims for death, bodily injury, personal injury and property damage
occurring upon, in or about the Premises in an amount not less than
$1,000,000.00 per occurrence and having a general aggregate amount
on a per location basis of not less than $2,000,000.00, together
with an "umbrella" policy having an aggregate amount of not less
than $5,000,000.00. Landlord shall be named as an additional insured
on such policy.
(ii) "All risk" physical damage insurance including fire,
sprinkler leakage, vandalism and extended coverage for the full
replacement cost of all Landlord's Work, Tenant's Alterations, and
all other additions, improvements and alterations to the Premises
(providing that Landlord is an additional named insured as its
interest may appear) and of all office furniture, trade fixtures,
office equipment, merchandise and all other items of Tenant's
property on the Premises.
45
(iii) Workers' Compensation and Employers' Liability insurance
in an amount of not less than $1,000,000.00, both in accordance with
the laws of the State of Illinois.
(iv) Such other insurance or coverage as Landlord reasonably
requests.
Tenant shall, prior to the commencement of the Term and from time to
time during the Term (and, in any event, not less than ten days prior to
the expiration of any such policy), furnish to Landlord certificates of
insurance (with proof of payment) and, if requested by Landlord, copies of
all policies, evidencing the foregoing insurance coverage. Except for the
insurance coverage described in Section 22(a)(iii) above, Tenant's
policies shall state that such insurance coverage may not be amended,
cancelled or not renewed without at least thirty (30) days' prior written
notice to Tenant (except for non-payment of premiums, for which ten days'
notice shall be sufficient), and shall further provide that the policy
shall not be invalidated should the insured party have waived in writing
prior to a loss, any and all rights of the insured party against any other
party for losses covered by such policy. Tenant shall provide copies to
Landlord of any and all written notices from its insurer or insurance
company agent of any amendment, cancellation or non-renewal, promptly
after Tenant's receipt thereof.
Notwithstanding anything to the contrary contained in this Section
22(a), Tenant's obligations to carry the insurance provided for herein
may, to the extent permitted by law, be brought within the coverage of a
so-called blanket policy or policies of insurance carried and maintained
by Tenant; provided, however, that the coverage afforded Landlord will not
be reduced or diminished or otherwise be different from that which would
exist under a separate policy meeting all other requirements of this lease
by reason of the use of such blanket policy of insurance, and provided
further that the requirements of this Section 22 are otherwise satisfied.
The amount of the total insurance allocated to the Premises, which amount
shall be not less than the amounts required pursuant to this Section
22(a), shall be specified either (i) in each such "blanket" policy or (ii)
in a written statement, which Tenant shall deliver to Landlord from the
insurer thereunder.
(b) WAIVER OF SUBROGATION. Landlord and Tenant each agree to have
all property or physical damage insurance which it may carry endorsed with
a clause 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
22(a) above or Released Parties described in Section 16(a) 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. Tenant's policy shall provide further that the insurer waives
all rights of subrogation which such insurer might have against any of the
parties named in Section 22(a) above. Tenant further agrees to first seek
recovery under any applicable insurance policy before proceeding against
Landlord. Notwithstanding the foregoing or anything contained in this
lease to the contrary, any release or 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 invalidate insurance
coverage or invalidate the right of the insured to recover thereunder or
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
46
notice, to pay such increased cost, thereby keeping such release or waiver
in full force and effect).
(c) LANDLORD'S INSURANCE. Landlord shall carry during the Term
hereof replacement cost property insurance on the Building core and shell
(including all base Building improvements at the Building but excluding
Landlord's Work, Tenant Alterations and all other alterations, additions
or improvements to the Premises) against fire and other extended coverage
perils in an amount sufficient to prevent Landlord from being deemed a
co-insurer of the risks insured under the policy.
23. NONWAIVER. No waiver of any condition expressed in this lease shall be
implied by any neglect of Landlord to enforce any remedy on account of the
violation of such condition, whether or not such violation be continued or
repeated subsequently, and no express waiver shall affect any condition other
than the one specified in such waiver and that one only for the time and in the
manner specifically stated. Without limiting Landlord's rights under the
provisions of Section 11, it is agreed that no receipt of money by Landlord from
Tenant after the termination in any way of the Term or of Tenant's right of
possession hereunder or after the giving any notice shall reinstate, continue or
extend the Term or affect any notice given to Tenant prior to the receipt of
such money. It is also agreed that after the service of notice or the
commencement of a suit or after final judgment for possession of the Premises,
Landlord may receive and collect any money due, and Landlord's receipt and
collection of said money shall not waive or affect any said notice, suit or
judgment.
24. ESTOPPEL CERTIFICATE. Tenant agrees that from time to time upon not
less than ten (10) business days' prior request by Landlord, or any existing or
prospective Mortgagee or Ground Lessor, Tenant will, and Tenant will cause any
subtenant, licensee, concessionaire or other occupant of the Premises claiming
by, through or under Tenant, to complete, execute and deliver to Landlord or
Landlord's designee or to any existing or prospective Mortgagee or Ground
Lessor, a written estoppel certificate certifying (a) that this lease is
unmodified and is in full force and effect (or if there have been modifications,
that this lease, as modified, is in full force and effect and setting forth the
modifications); (b) the amounts of the monthly installments of Base Rent and
Additional Rent Estimate then required to be paid under this lease; (c) the date
to which Rent has been paid; (d) that to the best of Tenant's knowledge,
Landlord is not in default under any of the provisions of this lease, or if in
default, the nature thereof in detail and what is required to cure same; and (e)
such other information concerning the status of this lease or the parties'
performance hereunder reasonably requested by Landlord or the party to whom such
estoppel certificate is to be addressed. Tenant hereby appoints any one of
Landlord or any of Landlord's beneficiaries as attorney-in-fact for Tenant (such
power of attorney being coupled with an interest) with full power and authority
to execute and deliver for and in the name of Tenant any such estoppel
certificate so requested by Landlord or any existing or prospective Mortgagee or
Ground Lessor if not executed and delivered by Tenant within such ten (10)
business day period. Tenant's failure to complete, execute and deliver such
estoppel certificate within the aforesaid 10 business day period, shall be
deemed to be a Default under Section 19 of this lease.
25. TENANT CORPORATION, LIMITED LIABILITY COMPANY OR PARTNERSHIP. In case
Tenant is a corporation or a limited liability company, (a) Tenant
47
represents and warrants that this lease has been duly authorized, executed and
delivered by and on behalf of Tenant and constitutes the valid and binding
agreement of Tenant in accordance with the terms hereof, and (b) if Landlord so
requests, Tenant shall deliver to Landlord, concurrently with the delivery of
this lease executed by Tenant, resolutions of the board of directors or board of
managers (and shareholders and/or members, if required) of Tenant authorizing
Tenant's execution and delivery of this lease and the performance of Tenant's
obligations hereunder, certified as true and correct by any authorized
representative of Tenant. In case Tenant is a partnership, (a) Tenant represents
and warrants that all of the persons who are general or managing partners in
said partnership have executed this lease on behalf of Tenant, or that this
lease has been executed and delivered pursuant to and in conformity with a valid
and effective authorization therefor by all of the general or managing partners
of such partnership, and is and constitutes the valid and binding agreement of
the partnership and each and every partner therein in accordance with its terms,
to the extent permitted by law, and (b) if Landlord so requests, Tenant shall
deliver to Landlord, concurrently with the delivery of this lease executed by
Tenant, authorization of the general partners (and limited partners, if
required) of Tenant authorizing Tenant's execution and delivery of this lease
and the performance of Tenant's obligations hereunder, certified as true and
correct by a general partner of Tenant. Also, it is agreed that each and every
present and future individual general partner, if Tenant is a partnership, in
Tenant shall be and remain at all times jointly and severally liable hereunder,
to the extent permitted by law, and that the death, resignation or withdrawal of
any such partner shall not release the liability of such partner under the terms
of this lease unless and until Landlord shall have consented in writing to such
release. If Tenant is a partnership, limited liability company or corporation
whose stock is not publicly traded, Tenant represents and warrants to Landlord
that it has disclosed in writing to Landlord the persons or entities who
individually or collectively own a controlling interest in Tenant as of the date
of the execution of this lease.
26. REAL ESTATE BROKERS. Tenant represents and warrants to Landlord that
Tenant did not deal with any broker in connection with this lease other than the
Brokers identified in Section 1(b). Landlord hereby agrees to pay the brokerage
commissions payable to said Brokers in accordance with a written agreement
between Landlord and such Broker. Tenant shall indemnify, defend and hold
Landlord, its agents and their respective partners and employees, and the
Project, harmless of, from and against any and all losses, damages, liabilities,
claims, liens, costs and expenses, including without limitation court costs and
reasonable attorneys' fees and expenses, arising from any claims or demands of
any other broker or brokers or finders for any commission alleged to be due such
other broker or brokers or finders claiming to have dealt with Tenant in
connection with this lease or with whom Tenant hereafter deals or whom Tenant
employs.
27. NOTICES. All notices, waivers, demands, requests or other
communications required or permitted hereunder shall, unless otherwise expressly
provided, be in writing and be deemed to have been properly given, served and
received (a) if delivered personally or by same-day courier messenger, when
delivered, (b) if sent by nationally required overnight courier, on the first
(1st) business day after deposit with said courier, and (c) if mailed, on the
third (3rd) business day after deposit in the United States Mail, certified or
registered, postage prepaid, return receipt requested.
48
If to Landlord: 303 Xxxxxx Realty L.L.C.
c/x Xxxxx
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Property Manager
with an additional copy to:
Xxxxx Interests Limited Partnership
00 Xxxx Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
and to 303 Xxxxxx Realty L.L.C.
c/o X.X. Xxxxxx Xxxxxxx Asset Management Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxx
If to Tenant: iManage, Inc.
000 Xxxxx Xxxx - Xxxxx 000
Xxxxxx Xxxx, Xxxxxxxxxx 00000
Attn: General Counsel
And to: Xxxxxxx & Xxxxxxxxx of Illinois, Inc.
000 Xxxxx Xxxxxxxxx Xxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: J. Xxxxx Xxxxxxxx
or to such other address(es) or addressee(s) as any party entitled to receive
notice hereunder shall designate to the others in the manner provided herein for
the service of notices. Rejection or refusal to accept or inability to deliver
because of changed address or because no notice of changed address was given,
shall be deemed receipt.
28. MISCELLANEOUS.
(a) SUCCESSORS AND ASSIGNS. Each provision of this lease shall
extend to and shall bind and inure to the benefit not only of Landlord and
Tenant, but also their respective heirs, legal representatives, successors
and assigns, but this provision shall not operate to permit any
assignment, subletting, mortgage, lien, charge, or other transfer or
encumbrance contrary to the provisions of this lease.
49
(b) AMENDMENT. No modification, waiver or amendment of this lease or
of any of its conditions or provisions shall be binding upon Landlord
unless the same shall be in writing and signed by Landlord.
(c) OFFER. Submission of this instrument for examination shall not
constitute a reservation of or option for the Premises or in any manner
bind Landlord, and no lease or obligation on Landlord shall arise until
this instrument is signed and delivered by Landlord and Tenant; provided,
however, the execution and delivery by Tenant of this lease to Landlord,
or its agents, shall constitute an irrevocable offer by Tenant to lease
the Premises on the terms and conditions herein contained, which offer may
not be revoked for fifteen (15) days after such delivery.
(d) TENANT. The word "TENANT" whenever used herein shall be
construed to mean Tenants or any one or more of them in all cases where
there is more than one Tenant; and the necessary grammatical changes
required to make the provisions hereof apply either to corporations or
other organizations, partnerships or other entities, or individuals, shall
in all cases be assumed as though in each case fully expressed. In all
cases where there is more than one Tenant, (a) the liability of each shall
be joint and several and (b) any one person or entity comprising Tenant
may give any notice or approval required or permitted to be given by
Tenant under this lease and such notice or approval shall be deemed
binding upon all persons or entities comprising Tenant and may be relied
upon by Landlord as if such notice or approval had been given by all
persons or entities comprising Tenant.
(e) EXPENSES OF ENFORCEMENT. The non-prevailing party shall pay upon
demand all of the reasonable costs, charges and expenses (including the
court costs and fees and out-of-pocket expenses of counsel, agents and
others retained by the prevailing party) incurred by the prevailing party
in enforcing the terms of this lease, and a party shall also pay such
costs and expenses incurred by the other party in any litigation,
negotiation or transaction in which said party causes the other party
without the other party's fault to become involved or concerned. Any
amount due from Tenant to Landlord pursuant to this Section shall be
deemed to be additional Rent due under this lease.
(f) EXHIBITS AND RIDERS. Exhibits and riders, if any, referred to in
or affixed to this lease are made an integral part hereof.
(g) APPROVAL OF PLANS AND SPECIFICATIONS. Neither review nor
approval by or on behalf of Landlord of any plans and specifications for
any Tenant Alterations or any other work by Tenant or its agents,
employees and contractors shall constitute a representation or warranty by
Landlord, any of Landlord's constituent members, or any of their
respective agents, partners or employees, that such plans and
specifications either (i) are complete or suitable for their intended
purpose, or (ii) comply with applicable Laws, it being expressly agreed by
Tenant that neither Landlord, nor any of Landlord's constituent members,
nor any of their respective agents, partners or employees, assume any
responsibility or liability whatsoever to Tenant or to any other person or
entity for such completeness, suitability or compliance.
50
(h) TIME OF ESSENCE. Time is of the essence of this lease and of
each and all provisions hereof.
(i) DUE DATE; INTEREST. Except as otherwise specifically provided in
this lease, all amounts owed by Tenant to Landlord pursuant to any
provision of this lease shall be paid by Tenant within five (5) business
days after Landlord's written demand, and all such amounts (including,
without limitation, Base Rent and Additional Rent) shall bear interest
from the date due until paid at the annual rate equal to the Default Rate
(hereinafter defined), unless a lesser rate shall then be the maximum rate
permissible by law with respect thereto, in which event such lesser rate
shall be charged. The term "Default Rate" means of the rate of interest
announced from time to time by The First National Bank of Chicago,
Chicago, Illinois (or any successor), as its "prime rate" or "corporate
base rate," changing as and when such rate changes, or if such rate is no
longer in existence, then such other "prime rate" as may be designated by
Landlord (herein, the "PRIME RATE"), plus three (3) percentage points. The
provisions of this subparagraph shall in no way relieve Tenant of the
obligation to pay Rent or any other sums due hereunder on or before the
date on which payment is due, nor shall the collection by Landlord of any
amount under this subparagraph impair the ability of Landlord to collect
any amount under Section 19 of this lease.
(j) INTERPRETATION. The invalidity of any provision of this lease
shall not, to the extent commercially reasonable, impair or affect in any
manner the validity, enforceability or effect of the rest of this lease.
(k) FORCE MAJEURE. If either party fails to perform timely any of
the terms, covenants or conditions of this lease on such party's part to
be performed, and such failure is due in whole or in part to any strike,
lockout, labor trouble, civil disorder, riot, insurrection, act of
terrorism, war, accident, fire or other casualty, adverse weather
condition, act of God, governmental inaction, restrictive governmental law
or regulation, inability to procure materials, electricity, gas, other
fuel or water or other utilities at the Building after reasonable effort
to do so, act or event caused directly or indirectly by or by default of
the other party or any of the other party's employees or agents, or any
cause beyond the reasonable control of such party, then such party shall
not be deemed in default under this lease as a result of such failure so
long as such party continues to take all commercially reasonable efforts
to cure such failure. Nothing in this Section 28(k) shall affect, in any
manner, such party's obligations to pay amounts otherwise due and owing
under this lease as and when due, and failure to timely pay such amounts
shall not be subject to "force majeure" delays or extensions.
(l) APPLICATION OF PAYMENTS. Landlord shall have the right to apply
payments received from Tenant pursuant to this lease (regardless of
Tenant's designation of such payments) to satisfy any obligations of
Tenant hereunder, in such order and amounts as Landlord, in its sole
discretion, may elect.
(m) CUMULATIVE REMEDIES; ILLINOIS LAW. The rights and remedies of
Landlord under this lease are cumulative and none shall exclude any other
rights or remedies allowed by law or equity. This lease is for the lease
of space in a building
51
located in the State of Illinois and is declared to be an Illinois
contract, and all of its terms shall be construed according to the laws of
the State of Illinois.
(n) COUNTERPARTS. This lease may be simultaneously executed in
several counterparts, each of which shall be an original and all of which
shall constitute but one and the same instrument.
(o) RELATIONSHIP. Landlord and Tenant disclaim any intention to
create a joint venture, partnership or agency relationship.
(p) ACTION ON BEHALF OF LANDLORD. Any service which may be provided
by Landlord under this lease may be provided by Landlord, any of its
constituent members, or any agent or contractor of any of them, and the
cost to Landlord of any such agent or contractor shall be included in any
charge to Tenant for such service. Except as provided in the following
sentence, any right reserved to Landlord under this lease may be exercised
by Landlord, any of its constituent members, or any agent, contractor or
designee of any of them. Any notice, demand, consent or approval which may
be given by Landlord under this lease may be given only by Landlord, any
constituent member of Landlord, or any agent or attorney of any of them.
(q) ENTIRE AGREEMENT. This lease contains the entire agreement
between Landlord, and Tenant with respect to its subject matter, and all
negotiations, considerations, representations, understandings and
agreements, oral or written, which may have been previously made between
any of the foregoing parties are incorporated and merged into this lease.
In executing and delivering this lease, Tenant has not relied on any
representation, warranty or statement by Landlord, any of Landlord's
constituent members, or any of their respective agents, partners or
employees, which is not set forth in this lease, including without
limitation any representation as to the amount of any Additional Rent, or
any component thereof, or any representation that Landlord is furnishing
the same services to other tenants, at all, on the same level or on the
same basis.
(r) FINANCIAL STATEMENTS. At Landlord's request (which request, in
the absence of any default by Tenant hereunder, shall be made no more than
once in any calendar year), Tenant shall deliver to Landlord, within
thirty (30) days after written request by Landlord, Tenant's most recent
then available annual financial statements and any more recent financial
statements then available, including balance sheets and income statements,
prepared in accordance with generally accepted accounting principles
consistently applied; provided, however, that without limitation of the
financial information and Audited Statement requirements set forth below
in this Section 28(r), it is agreed that Tenant shall not be required to
deliver to Landlord such reports as described above in this Section 28(r)
so long as Tenant is a publicly traded company on a nationally recognized
stock exchange and Tenant's financial reports are publicly available. Such
financial statements shall be certified by the chief financial officer of
Tenant as being true, accurate and complete in all material respects.
Tenant shall also, upon Landlord's reasonable request from time to time,
deliver to Landlord such other financial information regarding Tenant as
may be reasonably available. Without
52
limitation of the foregoing, Tenant shall deliver to Landlord, no later
than thirty (30) days prior to any "Security Deposit Reduction Date" under
Section 29 below, and as a condition to any "Permitted Security Deposit
Reduction" described in Section 29 below, an audited annual financial
statement (the "AUDITED STATEMENT") for the most recent concluded fiscal
year of Tenant preceding the respective "Security Deposit Reduction Date",
prepared in accordance with generally accepted accounting principles
consistently applied, and prepared based on the "Statement of Operations"
format currently in use by Tenant in its reporting as of the date hereof
(a copy of which Statement of Operations having heretofore been delivered
to Landlord in assessing the financial strength of Tenant), evidencing a
positive net earnings for the fiscal year at issue, all as and to the
extent more particularly described in Section 29 below.. Landlord shall
not disclose any financial information disclosed in financial statements
delivered under this Section 28(r) to any third party other than its
lenders, partners, members, agents, consultants, advisors, attorneys,
accountants and other representatives, or as may be otherwise required by
a government or governmental agency or pursuant to court order. For
purposes hereof, it is acknowledged and agreed that Tenant is on a
[calendar year?] fiscal year, and Tenant shall not, during the Term,
change its fiscal year for reporting purposes under this Section 28(r)
without Landlord's consent, at its discretion.
(s) LANDLORD RIGHT TO PERFORM TENANT'S DUTIES. If Tenant fails to
timely perform any of its duties under this lease, then, subject to the
terms and conditions expressly set forth in this lease, Landlord shall
have the right (but not the obligation), and without limiting any other
rights or remedies available to Landlord, to perform such duty on behalf
and at the expense of Tenant without further prior notice to Tenant, and
all sums expended or expenses incurred by Landlord in performing such
duty, together with interest thereon at the Default Rate accruing from and
after the time so expended or incurred by Landlord until repaid by Tenant,
shall be deemed to be additional Rent under this lease and shall be due
and payable upon demand by Landlord.
29. SECURITY DEPOSIT. Within three (3) business days after Tenant's
execution and delivery of this lease to Landlord (time being of the essence),
and as an express condition of Landlord's obligation to fund any portion of the
"Allowance" or the "Space Plan Allowance" under the Workletter or Tenant's right
to perform any Tenant's Work at the Premises, Tenant shall deposit with Landlord
an unconditional and irrevocable letter of credit (as the same may be increased
or decreased as hereinafter provided, the "LETTER OF CREDIT SECURITY DEPOSIT")
in the amount of $1,000,000.00 in form and issued by a bank with a Chicago,
Illinois office (i.e. wherein said letter of credit may be drawn) reasonably
satisfactory to Landlord, as security for the full and faithful performance of
every provision of this lease to be thereafter performed by Tenant (the Letter
of Credit Security Deposit, as the same may be increased or decreased as
expressly provided in this Section 29, together with (1) any cash from time to
time held by Landlord as part of the security deposit following a draw on the
Letter of Credit Security Deposit or (2) any cash from time to time held by
Landlord as part of the security deposit under this Section 29 and Landlord's
agreement, at its sole discretion, to accept such cash deposit, is sometimes
referred to herein as the "SECURITY DEPOSIT"). The Security Deposit shall be
increased, either by delivery to Landlord of an amendment to the existing Letter
of Credit Security Deposit, or by delivery to Landlord of an additional or
replacement Letter of Credit Security Deposit, all to the extent provided in
Sections 34 or 35 below or as otherwise included
53
as part of any "Market Rental Rate" determinations thereunder. If Tenant
defaults with respect to any provision of this lease, including but not limited
to the provisions relating to the payment of Rent, and such default remains
uncured beyond applicable cure periods provided under this lease, then Landlord
may, as applicable, (i) use, apply or retain all or any part of the Security
Deposit which is then held by Landlord in the form of cash (herein, the "CASH
SECURITY DEPOSIT"), or (ii) draw on any Letter of Credit Security Deposit, in
whole or in part, in either case to the extent necessary in Landlord's
reasonable judgment to cure such default (provided that Landlord may draw upon
any Letter of Credit Security Deposit in whole in the event Tenant defaults in
its obligation to timely deliver a replacement letter of credit as required
hereunder), and Landlord may use, apply or retain all or any part of the
proceeds thereof, for the payment of any Rent and any other sum in default, or
for the payment of any other amount which Landlord is entitled to spend by
reason of Tenant's default or to compensate Landlord for any other loss or
damage which Landlord may suffer by reason of Tenant's default. If any portion
of the Cash Security Deposit or proceeds from a draw on any Letter of Credit
Security Deposit is so used or applied, Tenant shall, within thirty (30) days
after written demand therefor, as applicable, deposit cash with Landlord in an
amount sufficient to restore the Cash Security Deposit to its original amount or
cause the issuing bank to restore any Letter of Credit Security Deposit to its
original amount, and Tenant's failure to do such shall be a material breach of
this lease. Landlord shall not be obligated to keep any Cash Security Deposit or
any proceeds from a draw on the Letter of Credit Security Deposit separate from
its general funds, and Tenant shall not be entitled to interest on either. If
Tenant shall fully and faithfully perform every provision of this lease to be
performed by it, the Cash Security Deposit, the Letter of Credit Security
Deposit, or any balance thereof, as applicable, shall be returned to Tenant (or
at Landlord's option to the last assignee of Tenant's interest hereunder) within
fifteen (15) business days after the expiration of the Term of this lease and
Tenant's vacation of the Premises being leased hereunder.
Landlord shall deliver the Cash Security Deposit or the Letter of Credit
Security Deposit to the purchaser of Landlord's interest in the Building, in the
event that such interest is sold, and thereupon Landlord shall be discharged
from any further liability with respect to same. Tenant hereby agrees not to
look to any Mortgagee as mortgagee, mortgagee in possession, or Successor in
title to the Building for any Cash Security Deposit or Letter of Credit Security
Deposit required by Tenant hereunder, unless such items have actually been
received by said mortgagee as security for Tenant's performance of this lease.
Landlord agrees to deliver the Security Deposit required to be held by Landlord
hereunder to any such Mortgagee on or before such time as the Mortgagee succeeds
to Landlord's interest hereunder.
Nothing in this Section 29 shall be construed to limit the amount of
damages recoverable by Landlord or any other remedy to the Security Deposit.
Further, nothing herein shall be construed to require Landlord to accept any
portion of the Security Deposit in the form of a Cash Security Deposit (i.e., as
opposed to the form of a Letter of Credit Security Deposit), and Landlord shall
have the right, at any time, to require Tenant to convert any then Cash Security
Deposit held by Landlord to the form of a Letter of Credit Security Deposit
meeting the requirements set forth herein.
Any letter of credit delivered by Tenant hereunder as the Letter of Credit
Security Deposit shall expire no earlier than twelve (12) months after issuance
and shall provide for automatic renewals of one-year periods unless the issuer
has provided Landlord written notice of
54
non-renewal at least forty-five (45) days prior to the then expiration date
(whereupon Tenant shall be obligated to provide a replacement letter of credit
meeting the requirements of this Section 29 no later than thirty (30) days prior
to the expiration date of the then outstanding and expiring letter of credit as
provided below). Any subsequent replacement letter of credit shall expire no
earlier than twelve (12) months from the expiration date of the then outstanding
and expiring letter of credit and shall provide for automatic 1-year renewals as
described above. Subject to the terms of the next succeeding paragraph relative
to permitted reductions in the amount of the Security Deposit, Tenant shall
ensure that at all times during the Term of this lease and for fifteen (15)
business days after expiration of the Term, cash or one or more unexpired
letters of credit in the aggregate amount of the Security Deposit required
hereunder shall have been delivered by Tenant to Landlord. To the extent that
Tenant is obligated to furnish a replacement Letter of Credit Security Deposit
hereunder, Tenant shall deliver cash or a replacement letter of credit to
Landlord no later than thirty (30) days prior to the expiration date of the then
outstanding and expiring letter of credit; provided, however, that the
replacement letter of credit shall not be required to have an effective date
earlier than the expiration date of the then existing letter of credit being so
replaced (it being the intent that Tenant not be required to have two
outstanding letters of credit covering the same required Security Deposit amount
at any one time). Failure by Tenant to deliver cash or any replacement letter of
credit as required above shall entitle Landlord to draw under the outstanding
letter(s) of credit and to retain the entire proceeds thereof for application as
the Security Deposit under this lease (provided that Tenant shall thereafter
continue to have the right to substitute a Letter of Credit Security Deposit for
such Cash Security Deposit then being held by Landlord, and Landlord may
thereafter demand such substitution, all in accordance with the requirements of
this Section 29). Each letter of credit shall be for the benefit of Landlord and
its successors and assigns, shall be expressly transferable, and shall entitle
Landlord or its successors or assigns to draw from time to time under the letter
of credit in portions or in whole upon presentation of (i) a sight draft, and
(ii) a statement executed by Landlord stating that Landlord is entitled to make
the subject draw pursuant to the terms of this lease.
In the event that (A) Tenant is not in default with respect to any
provision of this lease as of any respective "Security Deposit Reduction Date,"
hereinafter described, and (B) Tenant has met the "Positive Net Earnings Test"
(as defined in the next succeeding paragraph) as of any such respective
"Security Deposit Reduction Date" hereinafter described, then, notwithstanding
anything contained hereinabove to the contrary, but subject to the terms of the
next succeeding paragraph in this Section 29, (i) Landlord shall return to
Tenant, upon Tenant's request therefor, that portion of any Cash Security
Deposit then being held by Landlord hereunder corresponding to the amount of the
"Permitted Security Deposit Reduction" permitted as of such Security Deposit
Reduction Date (as hereinafter set forth), or (ii) Tenant shall have the right
to deliver a replacement letter of credit as a substitute for any Letter of
Credit Security Deposit then being held by Landlord hereunder, which replacement
letter of credit (together with any other letter(s) of credit which remain in
Landlord's possession) shall be in the amount of the "Remaining Balance of
Security Deposit" corresponding to such Security Deposit Reduction Date (as
hereinafter set forth), or (iii) Tenant can elect a combination of items (i) and
(ii) such that Landlord retains, as the Security Deposit hereunder, cash and one
or more letter(s) of credit which in the aggregate is in an amount which is not
less than the "Remaining Balance of Security Deposit" described below.
55
SECURITY DEPOSIT PERMITTED SECURITY REMAINING BALANCE
REDUCTION DATE DEPOSIT REDUCTION OF SECURITY DEPOSIT
-------------- ----------------- -------------------
August 1, 2006 $300,000.00 $700,000.00
August 1, 2007 $200,000.00 $500,000.00
August 1, 2008 $200,000.00 $300,000.00
August 1, 2009 $100,000.00 $200,000.00
August 1, 2010 $100,000.00 $100,000.00
For purposes hereof, the term "POSITIVE NET EARNINGS TEST" shall mean that
Tenant has realized a positive net earnings in the most recent concluded fiscal
year preceding the respective Security Deposit Reduction Date, as evidenced by
the Audited Statement delivered to Landlord pertaining to such fiscal year as
described in Section 28(r) above. If Tenant is not entitled to a reduction in
the Security Deposit solely because Tenant is in default under this lease as
described in the preceding paragraph, then Tenant shall not be entitled to any
further reduction in the Security Deposit amount required hereunder; provided,
however, that notwithstanding the foregoing, Tenant may again take the benefit
of such reduction if and when such default and all other subsequent defaults
have been cured within applicable cure periods provided under this lease. If
Tenant is not entitled to a reduction in the Security Deposit as of any
respective Security Deposit Reduction Date as a result of Tenant not satisfying
the corresponding Positive Net Earnings Test, then the corresponding Permitted
Security Deposit Reduction for which Tenant did not receive, and each subsequent
Permitted Security Deposit Reduction set forth in the above-described schedule,
shall be deferred by one year, and the schedule described above shall be deemed
to be automatically modified accordingly. To illustrate the foregoing, if Tenant
is not entitled to the first scheduled Permitted Security Deposit Reduction as
of August 1, 2006 as a result of Tenant not meeting the Positive Net Earnings
Test as of such date, then the $300,000 Permitted Security Deposit Reduction
shall be deferred until the next succeeding Security Deposit Reduction Date
(i.e., meaning August 1, 2007) and each of the subsequent scheduled Permitted
Security Deposit Reductions shall be deferred for one year, accordingly, such
that the final Permitted Security Deposit Reduction of $100,000.00, scheduled
above for August 1, 2010, shall instead occur on August 1, 2011, assuming that
there are no further deferrals of the schedule based upon subsequent failures of
Tenant to satisfy the Positive Net Earnings Test as of any subsequent Security
Deposit Reduction Date.
30. SUBSTITUTION FOR PARTIAL FLOOR PREMISES.
(a) RIGHT OF SUBSTITUTION. At any time hereafter, Landlord shall
have the right to substitute for any portion of the Premises which is less
than a full floor of the Building ("PARTIAL FLOOR PREMISES") other
premises within the Building (the "NEW PREMISES"), provided that the New
Premises (i) shall be of substantially comparable size as the Partial
Floor Premises, (ii) shall be in a substantially comparable location on
the floor in the Building as that of the Partial Floor Premises, (iii)
shall be on the same or higher floor in the Building as the floor in which
the Partial Floor Premises is located, (iv) shall have an amount of First
Offer Space (as defined in Section 34 below and as contemplated by Section
34(i) below) located on the floor in which the New Premises is located
which is substantially comparable to the then remaining First Offer Space
located
56
on the floor in which the Partial Floor Premises is located, determined as
of the date Landlord gives notice of substitution under this Section 30,
and (v) shall either have substantially the same configuration of the
Partial Floor Premises or a configuration substantially as usable for the
purposes for which the Partial Floor Premises are being used by Tenant
(or, if possession of the Partial Floor Premises has not yet been
delivered to Tenant, then for the purposes for which the Partial Floor
Premises are to be used by Tenant).
(b) SUBSTITUTION PRIOR TO TENANT'S POSSESSION. If possession of the
Partial Floor Premises has not yet been delivered to Tenant, then a
substitution shall be effective as of the date Landlord gives notice of
such substitution.
(c) SUBSTITUTION AFTER TENANT'S POSSESSION. Without limitation of
the other provisions set forth in this Section 30, the following
additional provisions of this subsection (c) shall also apply if
possession of the Partial Floor Premises has already been delivered to
Tenant as of the date Landlord gives notice of substitution. Tenant shall
vacate and surrender the Partial Floor Premises on or before the later of
(A) the ninetieth (90th) day after the date Landlord gives notice of
substitution or (B) the fifteenth (15th) business day after Landlord has
substantially completed the work to be done by Landlord in the New
Premises pursuant to this subsection (c), and the substitution shall be
effective as of the earlier of the date of such vacation and surrender or
the date when such vacation and surrender is required. Landlord shall (i)
pay the actual and reasonable out-of-pocket expenses incurred by Tenant in
connection with moving its property from the Partial Floor Premises to the
New Premises, and (ii) improve the New Premises so that they are
substantially similar to the Partial Floor Premises and promptly reimburse
Tenant for its actual and reasonable out-of-pocket costs incurred in
connection with the relocation of any telephone or other communications
equipment from the Partial Floor Premises to the New Premises. However,
instead of paying Tenant's expenses incurred in connection with moving its
property, Landlord may elect to either move Tenant's property or provide
personnel to do so under Tenant's direction, in which event such move may
not be made except during evenings, weekends or holidays, so as to incur
the least inconvenience to Tenant.
(d) NO COMPENSATION OR DAMAGES. Tenant shall not be entitled to any
compensation for any inconvenience or interference with Tenant's business,
nor to any abatement or reduction in Rent, nor shall Tenant's obligations
under this lease be otherwise affected, as a result of the substitution of
the New Premises, except as otherwise expressly provided in this Section
30. Tenant agrees to cooperate with Landlord so as to facilitate the
prompt completion by Landlord of its obligations under this Section 30.
Without limiting the generality of the preceding sentence, Tenant agrees
to promptly provide to Landlord such approvals, instructions, plans,
specifications and other information as may be reasonably requested by
Landlord in connection with such obligations.
(e) MISCELLANEOUS. Upon substitution of the New Premises for the
Partial Floor Premises, the Rentable Area of the New Premises shall be
substituted for the Rentable Area of
57
the Partial Floor Premises. Further, in the event the Rentable Area of the
New Premises is less than the Rentable Area of the Partial Floor Premises,
Tenant's Proportionate Share and Base Rent shall be recalculated and
adjusted based on the new Rentable Area of the New Premises (it being
understood that there will be no such recalculation if the New Premises
are larger than the Partial Floor Premises). At Landlord's request, Tenant
shall execute a supplement to this lease confirming the substitution of
the New Premises for the Partial Floor Premises. Any failure of Tenant to
surrender possession of the Partial Floor Premises as and when required by
this Section 30 shall be deemed a holding over by Tenant pursuant to
Section 11 of this lease.
31. LANDLORD. The term "LANDLORD" as used in this lease means only the
owner of Landlord's interest in the Premises from time to time. In the event of
any assignment, conveyance or sale, once or successively, of Landlord's interest
in the Premises or any assignment of this lease by Landlord, said Landlord
making such assignment, conveyance or sale shall be and hereby is entirely freed
and relieved of all covenants and obligations of Landlord hereunder accruing
after such assignment, conveyance or sale, and Tenant agrees to look solely to
such assignee, grantee or purchaser with respect thereto. The holder of a
Mortgage (or assignment in connection with a Mortgage) shall not be deemed such
an assignee, grantee or purchaser under this Section 31 unless and until the
foreclosure of the Mortgage or the conveyance or transfer of Landlord's interest
under this lease in lieu of foreclosure, and then subject to the provisions of
Section 20. This lease shall not be affected by any such assignment, conveyance
or sale, and Tenant agrees to attorn to the assignee, grantee or purchaser.
32. TITLE AND COVENANT AGAINST LIENS. Landlord's title is and always shall
be paramount to the title of Tenant, and nothing in this lease contained shall
empower Tenant to do any act which can, shall or may encumber the title of
Landlord. Tenant has no authority or power to cause or permit any lien or
encumbrance of any kind whatsoever, whether created by act of Tenant, operation
of law or otherwise, to attach to or be placed upon Landlord's title or interest
in the Premises or any part of the Project, and any and all liens and
encumbrances created by Tenant shall attach to Tenant's interest only.
33. COVENANT OF QUIET ENJOYMENT. Landlord agrees that Tenant, on paying
the Rent and other payments herein reserved 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,
shall, during the Term, peaceably and quietly have, hold and enjoy the Premises,
subject to the terms, covenants, conditions, provisions and agreements of this
lease, free from hindrance by Landlord or any person claiming by, through or
under Landlord.
34. RIGHT OF FIRST OFFER. Subject to the provisions hereinafter set forth
(including, without limitation, the terms of Section 34(g) below regarding
certain rights which are superior to Tenant's first offer rights hereunder),
Landlord hereby grants to Tenant the right to lease, on the terms and conditions
hereinafter set forth, each portion of space on the 26th floor of the Building
and on the 27th floor of the Building (collectively, the "FIRST OFFER SPACE"),
which Landlord proposes to lease for any term commencing during the First Offer
Period (as hereinafter defined).
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(a) If Landlord is in serious discussions with a party other than
Tenant concerning a lease of any portion of the First Offer Space for a
term commencing during the First Offer Period (which shall include, in
order to constitute serious discussions, delivery by Landlord to such
party of an initial proposal for the leasing of such portion of the First
Offer Space), and in any event prior to leasing any portion of the First
Offer Space for a term commencing during the First Offer Period, Landlord
shall give Tenant written notice (herein, a "LANDLORD NOTICE") of the
location and Rentable Area of such portion of the First Offer Space, the
date of commencement of the term of the demise, as determined by Landlord,
with respect to such portion of the First Offer Space (the "FIRST OFFER
SPACE COMMENCEMENT DATE") and the rental rate (including any proposed
improvements and/or concessions) for such portion of the First Offer Space
(determined as hereinafter provided). The First Offer Space Commencement
Date shall not be less than forty-five (45) days after the date such
Landlord Notice is given by Landlord. In no event shall the First Offer
Space Commencement Date be earlier than the Commencement Date of the Term
hereof.
(b) Tenant's right to lease the First Offer Space described in such
a Landlord Notice from Landlord shall be exercisable by written notice
from Tenant to Landlord of Tenant's election to exercise said right (a
"FIRST OFFER EXERCISE NOTICE") given not later than seven (7) business
days after the applicable Landlord Notice is given, time being of the
essence. If such right is not so exercised, Tenant's right of first offer
shall thereupon terminate as to such portion of the First Offer Space, and
Landlord may thereafter lease and re-lease and/or grant options to lease
all or any portion of such First Offer Space without notice to Tenant and
free of any right in Tenant (and in such event, such applicable portion of
the First Offer Space shall thereafter be deleted from the definition of
"First Offer Space" for all purposes hereof);
(c) Tenant may only exercise its right to lease a portion of the
First Offer Space, and an exercise thereof shall only be effective, if at
the time of Tenant's exercise of said right and on the pertinent First
Offer Space Commencement Date this lease is in full force and effect and
Tenant is not in monetary default (i.e., irrespective of whether any
applicable notice or cure periods have then elapsed) or non-monetary
"Default" (i.e., beyond any applicable notice and cure periods hereunder)
under this lease (provided that if Tenant is in non-monetary default as of
either such date, then the effectiveness of any exercise by Tenant of its
first offer option hereunder shall, at Landlord's option, be conditioned
upon Tenant curing such default within applicable cure periods under this
lease), and (inasmuch as this right of first offer is intended only for
the benefit of the original Tenant named in this lease) not less than
seventy-five percent (75%) of the Rentable Area of the Premises are
occupied by the original Tenant named herein and/or a permitted Tenant
Affiliate under Section 15 hereof, and said Tenant has not assigned this
lease (other than to a permitted Tenant Affiliate) or sublet greater than
twenty-five percent (25%) of the Rentable Area of the Premises (other than
to a permitted Tenant Affiliate). Without limitation of the foregoing, no
sublessee or assignee (other than an assignee which is a permitted Tenant
Affiliate under Section 15 hereof) shall be entitled to exercise any right
hereunder, and no exercise of any right hereunder by the original Tenant
named herein or by a permitted Tenant Affiliate assignee shall be
effective in the event said Tenant assigns this lease (other than to a
permitted Tenant Affiliate) or
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subleases all or greater than twenty-five percent (25%) of the Rentable
Area of the Premises (other than to a permitted Tenant Affiliate) prior to
the pertinent First Offer Space Commencement Date. If the original Tenant
named in this lease has assigned the lease to any permitted Tenant
Affiliate assignee under this lease as of the time of Tenant's exercise of
any first offer rights under this Section 34 or as of the pertinent First
Offer Space Commencement Date, then, at Landlord's option, any such
exercise of the first offer right under this Section 34 shall need to be
executed by the original named Tenant in this lease and each such
permitted Tenant Affiliate assignee in order to be effective for purposes
hereof (unless, however, the original named Tenant no longer exists as a
separate and distinct entity as a direct result of the transaction giving
rise to the assignment to such permitted Tenant Affiliate assignee, such
as is the case of a merger, in which event only the permitted Tenant
Affiliate assignee shall be obligated to execute such first offer exercise
notice hereunder). Notwithstanding anything herein to the contrary,
Landlord shall have the right, at its election, to waive any of the
conditions precedent to Tenant's valid exercise of its first offer rights
under this Section 34, as such conditions are described above in this
Section 34, whereupon Tenant's prior exercise of such first offer rights
shall be valid and in full force and effect in all respects. Any such
waiver by Landlord must be in writing in order to be effective for
purposes of the preceding sentence.
(d) If Tenant has validly exercised its right to lease a portion of
the First Offer Space, then effective as of the First Offer Space
Commencement Date such portion of the First Offer Space shall be included
in the Premises, subject to all of the terms, conditions and provisions of
this lease, except that:
(i) Base Rent per square foot of Rentable Area for such
portion of the First Offer Space shall be equal to the Market Rental
Rate (as defined in Section 36 below) for such First Offer Space;
(ii) the Rentable Area of the Premises shall, for all purposes
(including for purposes of determining Tenant's Proportionate Share
hereunder), be increased by the Rentable Area of such portion of the
First Offer Space;
(iii) the term of the demise covering such portion of the
First Offer Space shall commence on the First Offer Space
Commencement Date and shall expire simultaneously with the
expiration of the Term of this lease, including any extension or
renewal thereof; and
(iv) the First Offer Space shall be rented in its "as is"
condition as of the First Offer Space Commencement Date (inasmuch as
tenant improvement work and allowances, if any, will be reflected in
the Market Rental Rate pursuant to Section 36 below).
(e) If Tenant has validly exercised its right to lease a portion of
the First Offer Space, within thirty (30) days after request by either
party hereto Landlord and Tenant shall enter into a written amendment to
this lease confirming the terms, conditions and
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provisions applicable to such portion of the First Offer Space as
determined in accordance herewith.
(f) In the event Landlord should be unable for any reason to deliver
possession on the pertinent First Offer Space Commencement Date of a
portion of the First Offer Space which Tenant has exercised its right to
lease, Landlord shall not be subject to any liability for failure to
deliver possession. Such failure to deliver possession shall not affect
either the validity of this lease or the obligations of either Landlord or
Tenant hereunder or be construed to extend the expiration of the Term of
this lease either as to such portion of the First Offer Space or the
balance of the Premises; provided, however, that under such circumstances,
rent shall not commence as to such portion of the First Offer Space until
Landlord is able to deliver possession, and provided further, however,
that Tenant shall have the right to terminate its earlier election to
lease such First Offer Space if possession thereof is not delivered within
one hundred twenty (120) days following the pertinent First Offer Space
Commencement Date (which termination right shall be exercised, if at all,
by delivery of written notice thereof to Landlord within ten (10) days
following such 120-day period and prior to delivery of possession of such
space, time being of the essence). Landlord shall use commercially
reasonable efforts to deliver possession of any given First Offer Space as
of the pertinent First Offer Space Commencement Date.
(g) Tenant's rights to lease the First Offer Space are subject and
subordinate to any expansion or other lease rights existing under any
lease for space at the Building in effect as of the date hereof (as each
such lease may be amended from time to time) relative to all or any
portion of the First Offer Space, and to Landlord's right to extend or
renew any lease of a current or future occupant of all or any portion of
the First Offer Space or of any tenant which has superior option rights
relative to all or any portion of the First Offer Space, even if such
extension or renewal is not pursuant to an option contained in the subject
lease.
(h) As used herein, the term "FIRST OFFER PERIOD" shall mean the
Term of this lease (i.e., commencing on the Commencement Date) and all
extensions and renewals thereof, provided, however, that the First Offer
Period shall not include the last two (2) years of the initial or any
extension or renewal term unless, as to the Initial Term, Tenant has then
exercised the option granted to Tenant in this lease to extend the Term
hereof or renew this lease for the additional period following such
Initial Term (in which case, the First Offer Period shall not include the
last two (2) years of such renewal period).
(i) In the event Landlord, pursuant to Section 30 hereof, elects to
relocate Tenant's premises located on the 27th floor of the Building to
any other floor (herein, the "RELOCATION FLOOR") at the Building, then,
from and after the date of such election, the First Offer Space shall no
longer include the 27th floor of the Building, and, in lieu thereof, the
First Offer Space shall include all space on the Relocation Floor, all
subject to any then existing lease or option rights relative to such
space, and to Landlord's right to extend or renew leases as provided in
Section 34(g) above.
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35. RENEWAL OPTION. Subject to the provisions hereinafter set forth,
Landlord hereby grants to Tenant an option to extend the Term of this lease on
the same terms, conditions and provisions as contained in this lease, except as
otherwise provided herein, for one period of five (5) years (the "RENEWAL
PERIOD") after the expiration of the Initial Term, which Renewal Period shall
commence on the first day of the fourteenth (14th) Lease Year (the "RENEWAL
PERIOD COMMENCEMENT DATE") and end on the last day of the eighteenth (18th)
Lease Year.
(a) Said option shall be exercisable by written notice from Tenant
to Landlord of Tenant's election to exercise said option given not later
than the date which is twelve (12) months prior to the Renewal Period
Commencement Date, time being of the essence. If Tenant's option is not so
exercised, said option shall thereupon expire.
(b) Tenant may only exercise said option, and an exercise thereof
shall only be effective, if at the time of Tenant's exercise of said
option and on the Renewal Period Commencement Date this lease is in full
force and effect and Tenant is not in "Default" (i.e., beyond any
applicable notice and cure periods hereunder) under this lease (provided
that if Tenant is in default under this lease as of either such date, then
the effectiveness of any exercise by Tenant of its renewal option
hereunder shall, at Landlord's option, be conditioned upon Tenant curing
such default with applicable cure periods under this lease), and (inasmuch
as said option is intended only for the benefit of the original Tenant
named in this lease) not less than seventy-five percent (75%) of the
Rentable Area of the Premises are occupied by the original Tenant named
herein and/or a permitted Tenant Affiliate under Section 15 hereof, and
said Tenant has not assigned this lease (other than an assignee which is a
permitted Tenant Affiliate under Section 15 hereof) or sublet greater than
twenty-five percent (25%) of the Rentable Area of the Premises (other than
to a permitted Tenant Affiliate). Without limitation of the foregoing, no
sublessee or assignee (other than an assignee which is a permitted Tenant
Affiliate under Section 15 hereof) shall be entitled to exercise said
option, and no exercise of said option by the original Tenant named herein
or by a permitted Tenant Affiliate assignee shall be effective in the
event said Tenant assigns this lease (other than to a permitted Tenant
Affiliate) or subleases all or greater than twenty-five percent (25%) of
the Rentable Area of the Premises (other than to a permitted Tenant
Affiliate) prior to the Renewal Period Commencement Date. In the event of
an assignment to a permitted Tenant Affiliate assignee under this lease as
of the time of Tenant's exercise of said option under this Section 35 or
as of the Renewal Period Commencement Date, then, at Landlord's election,
any exercise of said option under this Section 35 must be signed by both
the original named Tenant and each such permitted Tenant Affiliate
assignee in order to be effective (unless, however, the original named
Tenant no longer exists as a separate and distinct entity as a direct
result of the transaction giving rise to the assignment to such permitted
Tenant Affiliate assignee, such as is the case of a merger, in which event
only the permitted Tenant Affiliate assignee shall be obligated to execute
such renewal exercise notice hereunder). Notwithstanding anything herein
to the contrary, Landlord shall have the right, at its election, to waive
any of the conditions precedent to Tenant's valid exercise of its renewal
rights under this Section 35, as such conditions are described above in
this Paragraph 35(d), whereupon Tenant's prior exercise of such renewal
rights shall be valid and in full force and effect in all respects. Any
such waiver by Landlord must be in writing to be effective for purposes of
the preceding sentence.
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(c) Rent per square foot of Rentable Area of the Premises payable
during the Renewal Period with respect to all space included in the
Premises as of the Renewal Period Commencement Date shall be equal to the
Market Rental Rate for the Premises. Landlord shall give Tenant written
notice of the Market Rental Rate within thirty (30) days following written
request by Tenant made not earlier than fifteen (15) months prior to the
Renewal Period Commencement Date.
(d) If Tenant has validly exercised said option, within thirty (30)
days after request by either party hereto Landlord and Tenant shall enter
into a written amendment to this lease confirming the terms, conditions
and provisions applicable to the Renewal Period as determined in
accordance herewith, with such revisions to the rental provisions of this
lease as may be necessary to conform such provisions to the Market Rental
Rate.
(e) Tenant shall not have any option to extend the Term of this
lease beyond the expiration of the Renewal Period.
36. MARKET RENTAL RATE.
(a) As used herein, the term "MARKET RENTAL RATE" per square foot of
Rentable Area shall mean (i) the annual rate of net or base rent
reasonably determined by Landlord to be the prevailing market net or base
rental rate for comparable space in the downtown Chicago, Illinois area
which has been built out for occupancy (taking into consideration, when
comparing the same against the Premises hereunder, the age and scope of
the then existing tenant build-out at the other comparable space, the
duration of the terms for which such space is being leased, the location
and/or floor level within the applicable building, when the applicable
rate becomes effective, and the quality and location of the applicable
building), and reflecting (i.e., reduced, if applicable, to reflect any
prevailing concessions which are not being provided to Tenant in kind)
prevailing concessions such as, but not limited to, rental concessions,
tenant improvement work, allowances, brokerage commissions, time for
construction of tenant improvements, etc, for terms commencing on or about
the commencement date for the term for which Market Rental Rate is being
determined hereunder, plus (ii) additional components of the Market Rental
Rate reasonably determined by Landlord consistent with additional
components of rent charged for comparable space in the downtown Chicago,
Illinois area, which may include, among the other then prevailing
components of rent, periodic adjustments or additions to a fixed rent
based on a share of real estate taxes and other expenses (such as Tenant's
Proportionate Share of Expenses and Taxes) and increases to adjust for
inflation, and which may also include an additional market-level security
deposit based upon security deposits being imposed upon other tenants at
comparable first-class office buildings in downtown Chicago leasing
comparable space and having comparable concession packages and being of
comparable credit worthiness as that of Tenant. Comparable arms length
lease transactions (and, as it relates to a determination under Section 35
above, renewal transactions) at the Building and/or bona fide written
proposals or offers to lease comparable space at the Building (and, as it
relates to a determination under Section 35 above, to renew leases of
comparable space) received by Landlord from third parties (at arm's
length) or given by Landlord to third parties (at
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arm's length) may be used by Landlord as an indication of Landlord's
position as to the Market Rental Rate.
(b) If Tenant disagrees with Landlord's determination of Market
Rental Rate with respect to Tenant's renewal option under Section 35 above
(which Tenant must do, if at all, in writing setting forth Tenant's
determination of Market Rental Rate within thirty (30) days after Tenant's
receipt of notice of Landlord's determination of Market Rental Rate), and
if the parties cannot agree on the Market Rental Rate within thirty (30)
days thereafter (the "Discussion Period"), then, at Tenant's election, and
provided that Tenant has theretofore exercised its renewal option under
Section 35 for which Market Rental Rate is being determined, such dispute
shall be determined by arbitration as hereinafter provided (it being
understood and agreed that the binding arbitration process described in
this Section 36(b) may only commence if and to the extent Tenant has
validly exercised its renewal option for which Market Rental Rate is being
so determined). Tenant may initiate the arbitration process by written
notice to that effect given to Landlord within thirty (30) days after the
expiration of such 30-day Discussion Period (time being of the essence),
and if Tenant fails to so timely deliver such notice so initiating the
arbitration process, then Tenant shall be deemed to have waived such
right, and Landlord's determination of Market Rental Rate shall be deemed
the applicable Market Rental Rate for all purposes. If Tenant timely
exercises such right to initiate the foregoing arbitration process, as
described in the preceding sentence, then, within twenty (20) business
days after the giving of such notice, 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 first-class office
buildings in the downtown Chicago area for a period not less than seven
(7) years immediately preceding his or her appointment. Within five (5)
business days after the selection of both arbitrators, Landlord and Tenant
shall each simultaneously submit to the arbitrators a determination of
Market Rental Rate with such supporting materials as they deem appropriate
("MARKET RATE SUPPORTING MATERIALS:). (If no submittal is made by a part,
that party shall be deemed to have submitted its original determination.)
The arbitrators shall be directed to select, within fifteen (15) business
days after the receipt of such submittals, from the two determinations
submitted by Landlord and Tenant the one that is closer to the Market
Rental Rate as determined by the arbitrators, and said selection shall
thereafter be deemed the Market Rental Rate. If the two arbitrators so
appointed failt o agree, within such fifteen (15) business day period, as
to which of the determinations submitted by Landlord and Tenant is closer
to the actual Market Rental Rate, the two arbitrators shall, within ten
(10) business days thereafter, appoint a third arbitrator, using the
criteria described above, to decide upon which of the two determinations
submitted is closest to the actual Market Rental Rate. In the event the
two arbitrators are not able to so agree upon a third arbitrator within
such ten (10) business day period, then either party may request that the
third arbitrator be appointed by the American Arbitration Association,
using the criteria described above. The third arbitrator shall be directed
to select, within ten (10) business days after his or her appointment,
from the two determinations submitted by the parties the one that is
closer to the Market Rental Rate as determined by the third arbitrator,
and that selection shall thereafter be deemed the Market Rental Rate. The
cost of the foregoing arbitration process shall be borne by the losing
party. The determination made by the two arbitrators or the third
arbitrator, as the case may be, will be final and binding
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upon Landlord and Tenant, and will not be subject to reconsideration by
the two arbitrators or the third arbitrator, as the case may be, or to
review, appeal, or challenge in any court. The determination made by the
two arbitrators or the third arbitrator, as the case may be, will have the
same force and effect as if a court of final resort had entered a final
and binding and unappealable judgment enforcing that determination, and
the determination will be an enforceable term of this lease. If no
determination is made prior to the date for commencement of payment of
rent for which Market Rental Rate must be determined, then Landlord's
determination shall be used until the arbitration process is completed. If
Tenant's determination is later selected, Landlord shall promptly refund
any overpayments to Tenant.
37. BUILDING DIRECTORY. At no cost or expense to Tenant, Landlord shall
provide Tenant with space on any Building directory existing from time to time
in the lobby of the Building for entries for the name of Tenant and a reasonable
number of Tenant's designated personnel (but with total entries not exceeding
Tenant's Proportionate Share of total available directory space unless Landlord
otherwise agrees in its sole discretion). Tenant shall pay Landlord for
Landlord's cost (if any) of any substitution in name entries following the
initial installation of Tenant's directory entries (i.e., meaning any
substitutions occurring later than three (3) months following the Commencement
Date).
38. PARKING. During the Term, Tenant shall be entitled to have up to six
(6) cars parked in the garage below the concourse level of the Building, at no
charge, (the "PRIMARY SPACES"), all subject to the terms and conditions,
including parking rules and regulations, applicable from time to time to parking
in the garage. In addition, Tenant shall have the right, during the Term, to use
up to ten (10) additional parking spaces in said garage (the "ADDITIONAL
SPACES") subject at all times to availability, and so long as Tenant pays the
parking charges in effect from time to time (at monthly rates, if monthly rates
are then being charged), and all subject to the terms and conditions, including
parking rules and regulations, applicable from time to time to parking in the
garage. In connection with the Primary Spaces and any Additional Spaces, Tenant
may be required to periodically execute parking agreements. If Tenant elects to
use one or more of the Additional Spaces, and Landlord has availability in the
garage to accommodate such request, then Tenant shall pay parking charges for
all such Additional Spaces provided for hereunder, whether or not Tenant does,
in fact, utilize such parking. Thereafter, if Tenant, at any time, fails to
contract for, or otherwise pay the parking charges relating to, any one or more
of the Additional Spaces being made available to Tenant under this Section (each
such parking space being referred to as a "WAIVED SPACE"), then Tenant shall
forfeit its rights relative to each such Waived Space, and Landlord shall have
no further obligation to offer such Waived Space to Tenant during the balance of
the Term hereof. Landlord shall not be liable to Tenant in damages or otherwise
under any circumstances for failure to provide parking if at any time Landlord
or the garage operator is legally restricted from operating a parking garage or
providing parking below the concourse level of the Building or otherwise unable
to do so for reasons beyond its reasonable control, and in no event shall Tenant
have any right to terminate this lease due to Landlord's failure to make parking
available as required under this Section. Spaces will not be reserved for
Tenant.
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39. SIGNAGE.
(a) LOBBY/EXTERIOR SIGNAGE. So long as the original named Tenant
and/or any permitted Tenant Affiliates continue to occupy not less than
seventy-five percent (75%) of the Rentable Area of the Premises for the
conduct of business operations therefrom, then (i) Tenant shall have the
non-exclusive right to install and maintain interior identification
signage for Tenant located at the elevators serving the Premises in the
first floor lobby of the Building (and, if Tenant so installs such
signage, Landlord shall reimburse Tenant for the reasonable documented
out-of-pocket initial cost incurred by Tenant for materials used on and
the installation of such signage) and (ii) if Landlord, at any time during
the Term, at its sole discretion, installs an additional monument base on
the exterior of the Building for identification of one or more tenants at
the Building, and if Landlord allows any "Comparable Sized Tenant" (as
hereinafter defined) to install identification signage thereon, Tenant
shall have the non-exclusive right to install and maintain, at Tenant's
expense, identification signage for Tenant located on such exterior
monument (herein, in any case under subclause (i) or (ii) above, the
"IDENTIFICATION SIGNAGE"), all in accordance with the following terms and
conditions. The parties hereby agree that (i) the foregoing Identification
Signage permitted hereunder shall be limited to the name of the original
named Tenant or the name of a permitted Tenant Affiliate assignee under
Section 15 designated by Tenant in writing to Landlord (it being
understood that only one such party shall have the right, at any given
time, to have Identification Signage hereunder and if Tenant or any such
Tenant Affiliate assignee replaces signage previously installed, Tenant
(or such assignee, as applicable) shall be fully responsible for removing,
at its sole cost and expense, any then existing signage being so
replaced), (ii) the width and length of the letters comprising the
Identification Signage permitted hereunder shall, as it relates to
exterior signage, be equal to or otherwise reasonably consistent with (and
no larger than) the length and width of the letters comprising the
identification signage installed by any other Comparable Sized Tenant on
such monument, (iii) unless otherwise mutually agreed upon by Landlord and
Tenant (at their discretion), the length and width of the letters
comprising the Identification Signage permitted in the lobby of the
Building and the design and color of and materials used for any
Identification Signage in the lobby of the Building shall be consistent
with Landlord's building-standard lobby signage requirements, and the
design and color of and materials used for any Identification Signage
located external to the Building shall be consistent with Landlord's
building standard exterior identification signage requirements; and (iv)
all Identification Signage shall otherwise be located at an exact area
designated by Landlord. Upon Tenant's request for Identification Signage,
and provided that the conditions for Tenant's signage rights under this
Section 39(a) have then been satisfied, Tenant shall cause its architect
to prepare plans and specifications relative to the Identification Signage
(which plans and specifications shall be consistent with the requirements
specified above), which plans and specifications shall be delivered to
Landlord for its review and approval. All work performed under this
Section 39(a) shall comply with the terms and conditions described in the
Workletter (i.e., if included as part of the Tenant's Work) or in Section
14 of this Lease (i.e., if included as subsequent Alterations); provided
however, that Landlord reserves the right, at is discretion, to install
any such Identification Signage on Tenant's behalf, using Landlord's
designated contractors, agents or employees, all at Tenant's cost and
expense (other than the initial
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cost of the interior lobby signage for which Landlord was otherwise
required to reimburse Tenant as described above in this subclause (a), the
cost of which shall instead be paid by Landlord). The signage rights of
Tenant set forth in this Section 39(a) are personal to the original named
Tenant hereunder and any permitted Tenant Affiliate assignee under Section
15 and may not be exercised by any assignee (other than a Tenant Affiliate
assignee under Section 15 hereof and so designated by Tenant in writing to
Landlord) or sublessee, or any other party, unless Landlord otherwise
consents thereto (at Landlord's sole discretion). For purposes hereof, the
term "COMPARABLE SIZED TENANT" shall mean any tenant at the Building
which, at the time such tenant installs any exterior signage on a new
exterior Building monument installed by Landlord, is leasing rentable
space at the Building which is of a size which is less than or equal to or
no larger than 110% of the Rentable Area of the Premises then being leased
by Tenant hereunder.
(b) DOOR SIGNAGE. Tenant shall have the right to install and
maintain, during the Term, at Tenant's expense, identification signage for
Tenant and/or any of its permitted assignee(s) or subtenant(s) located on
the entry doors of the Premises hereunder ("ENTRY DOOR IDENTIFICATION").
Such Entry Door Identification shall be designed, and use materials, and
be of size and color, consistent with Landlord's building-standard entry
door signage requirements, and plans and specifications therefor shall be
subject to the review and approval of Landlord, such approval not to be
unreasonably withheld. All work performed under this Section 39(b) shall
comply and be performed in accordance with the terms and conditions
described in the Workletter (i.e., if included as part of the Tenant's
Work) or in Section 14 of this Lease (i.e., if included as subsequent
Alterations), in either case subject to the terms and conditions therein
described; provided, however, that Landlord reserves the right, at its
discretion, to install any such Entry Door Identification on Tenant's
behalf, using Landlord's designated contractors, agents or employees, all
at Tenant's cost and expense.
40. SATELLITE DISH. Subject to the terms and conditions hereinafter set
forth, Landlord grants to Tenant, during the Term, the right to install,
maintain, repair and replace one (1) satellite dish relating to Tenant's
business in the Premises on the roof of the Building where designated by
Landlord, for receiving signals relayed by satellite and, except as otherwise
provided, to connect such equipment through existing mechanical shafts to the
Premises. Such satellite dish or microwave dish shall be no greater than
eighteen (18) inches in diameter.
(a) If Tenant desires to exercise such right, Tenant shall give a
written notice to that effect to Landlord (a "SATELLITE NOTICE"). The
Satellite Notice shall specify in detail the requirements of such
installation, all of which shall be subject to the approval of Landlord.
Landlord shall not unreasonably withhold its approval provided that the
use of the roof for such purposes shall (i) be compatible with Landlord's
use of the roof, (ii) be subject to Landlord's supervision, (iii) be
non-penetrating and shall not adversely affect the structural safety or
integrity of the Building, (iv) meet reasonable aesthetic and other
standards of Landlord and Landlord's architect and (v) satisfy other
conditions hereinafter set forth. If Landlord approves Tenant's use of the
roof for such purposes, Landlord shall designate by written notice to
Tenant an appropriate area for such installation ("INSTALLATION AREA").
Landlord shall use good faith efforts to select an Installation Area which
will be consistent with adequate reception. The right granted to
67
Tenant under this Section shall be subject to the following conditions
precedent: (1) there must be available space on the roof and existing
mechanical shafts from the roof to the Premises for Tenant's proposed
installation; (2) Landlord's architect shall approve of the location of
the Installation Area (acting reasonably) and the appearance of those
portions of the equipment to be visible to the public; (3) Landlord's
structural engineer shall approve of the location of the Installation Area
(acting reasonably), the design and specifications of the equipment, the
load caused on the roof of the Building by such equipment, and other
structural requirements of the installation; (4) the installation must
comply with the applicable requirements of any covenant, condition or
restriction of record and any municipal, county, state, federal or other
governmental ordinance, law, rule or regulation including, but not limited
to zoning ordinances; (5) the installation and operation of such equipment
shall not interfere with the safety or operations of the Building or
reduce or affect its structural integrity, and shall comply with the terms
of this lease; and (6) at Landlord's election, Tenant shall enter into
Landlord's standard lease or license agreement used at the Building for
roof-top satellite dish purposes.
(b) Tenant shall pay all costs and expenses of any kind related to
the installation, operation, maintenance or removal of its communication
equipment, including any out-of-pocket costs incurred by Landlord for
architect's or engineering fees incurred in connection with required
approvals, but Tenant shall not be obligated to pay any fee for the roof
or access thereto. Tenant shall maintain all such equipment in good
repair. Tenant shall be responsible for any damage, loss or injury to the
Building or other property and for any injury to persons caused by
installation, operation, maintenance or removal of such equipment. Upon
the expiration or earlier termination of this Lease or Tenant's right to
possession hereunder, Tenant shall, at its sole cost and expense, (i)
remove the communication equipment and restore that portion of the roof of
the Building where the communications equipment was located to its
condition existing prior to the installation thereof, ordinary wear and
tear excepted, and (ii) repair any damage or destruction caused by such
removal. Restoration and repair herein required to be performed by Tenant
shall be completed under the supervision of Landlord or Landlord's
representative. Notwithstanding the foregoing, Tenant shall not remove,
and shall not be reimbursed for the cost thereof, any portion of the
communication equipment which is embedded or permanently attached in or to
the Building including, but not limited to, cables and other wiring,
unless Landlord so directs otherwise.
41. ERISA MATTERS.
(a) EMPLOYEE BENEFIT PLANS/RETIREMENT AGREEMENTS. Tenant
acknowledges that it has been advised that an affiliate of Landlord is a
collective investment fund (the "FUND") which holds the assets of one or
more employee benefit plans or retirement arrangements which are subject
to Title I the Employee Retirement Income Security Act of 1974, as amended
("ERISA") and/or Section 4975 of the Internal Revenue Code of 1986, as
amended (the "CODE") (each a "PLAN"), and with respect to which Xxxxxx
Guaranty Trust Company of New York ("MGT") is the Trustee and that, as a
result, Landlord may be prohibited by law from engaging in certain
transactions.
68
(b) EXISTING 10% PLAN. Landlord hereby represents and warrants to
Tenant that, as of the date hereof, the only Plans whose assets are
invested in the Fund which, together with the interests of any other Plans
maintained by the same employer or employee organization, represent a
collective interest in the Fund in excess of ten percent (10%) of the
total interests in the Fund (each, a "10% PLAN") are referenced on EXHIBIT
F (collectively, the "EXISTING 10% PLAN").
(c) PARTY IN INTEREST. Tenant represents and warrants that as of the
date hereof, and at all times while it is a Tenant under this Lease, one
of the following statements is, and will continue to be, true: (1) Tenant
is not a "PARTY IN INTEREST" (as defined in Section 3(14) of ERISA) or a
"DISQUALIFIED PERSON" (as defined in Section 4975 of the Code) (each a
"PARTY IN INTEREST") with respect to the Existing 10% Plan or, (2) if
Tenant is a Party in Interest, that:
(i) neither Tenant nor its "AFFILIATE" (as defined in Section
V(c) of PTCE 84-14, "AFFILIATE") has, or during the immediately
preceding one (1) year has, exercised the authority to either: (i)
appoint or terminate MGT as the qualified professional asset manager
(as defined in Section V(a) of PTCE 84-14, "QPAM") of any of the
assets of the Existing 10% Plan with respect to which Tenant or its
Affiliate is a Party in Interest; or (ii) negotiate the terms of the
management agreement with MGT, including renewals or modifications
thereof, on behalf of the Existing 10% Plan; and
(ii) neither Tenant nor any entity controlling, or controlled
by, Tenant owns a five percent (5%) or more interest (within the
meaning of PTCE 84-14, "5% INTEREST") in MGT or XX Xxxxxx & Co.
Incorporated.
(d) PROSPECTIVE 10% PLAN. In the event that Landlord or the Fund
notifies Tenant in writing that a Plan other than the Existing 10% Plan
may become a 10% Plan, Tenant will, within 10 days of such notification,
inform the Fund in writing as to whether it can make the same
representations which it made in subsection (c) of this Section with
respect to such prospective 10% Plan. Thereafter, if based on such
representations made by Tenant such Plan becomes a 10% Plan, Tenant
represents and warrants that, at all times during the period Tenant is a
tenant under the Lease, one of the statements set forth in subsection (c)
will be true with respect to such 10% Plan.
42. PRE-OCCUPANCY CONTRACTION/EXPANSION OPTION. Landlord and Tenant each
acknowledge that the total Rentable Area of the portion of the Premises located
on the 27th Floor (for purposes of this Section 42, the "27TH FLOOR SPACE") of
the Building as of the date hereof is 8,314 square feet and that such Rentable
Area may decrease by as much as 1,733 square feet and may increase by as much as
2,767 square feet, subject to and in accordance with the following terms and
conditions.
(a) Tenant shall have the one-time right to either delete space (the
"CONTRACTION SPACE") from the 27th Floor Space or to add space (the
"EXPANSION SPACE") to the 27th Floor Space, in either case by delivering
written notice thereof to Landlord on or before the first to occur of (i)
twenty-one (21) days after the date of
69
Tenant's execution and delivery of this lease to Landlord (herein, the
"OUTSIDE EXERCISE DATE"), or (ii) the date Tenant takes "Physical
Occupancy" of any portion of the 27th Floor Space (i.e., the term
"PHYSICAL OCCUPANCY" meaning the first to occur of (A) the date Tenant or
its contractors, agents or other representatives move any significant
amount of materials, equipment or other items into any portion of the 27th
Floor Space, or (B) the date any such parties commence performance of any
of Tenant's Work within the 27th Floor Space), time being of the essence.
The notice delivered by Tenant (herein, the "EXERCISE NOTICE") shall
specify the exact area, configuration and location of the 27th Floor
Space, as adjusted by the Contraction Space or Expansion Space (as the
case may be), which Tenant desires to be included as part of the initial
Premises hereunder; provided, however, that:
(i) the total Rentable Area of the 27th Floor Space, as
adjusted by the deletion of any Contraction Space, shall not be less
than 6,581 square feet;
(ii) the total Rentable Area of the 27th Floor Space, as
adjusted by the addition of any Expansion Space, shall not be
greater than 11,081 square feet;
(iii) the 27th Floor Space included as part of the initial
Premises hereunder, after deletion of any such Contraction Space or
addition of any such Expansion Space (as the case may be), shall be
fully contiguous (i.e., without separation by any other leaseable
office space) and the configuration of the balance of the 27th floor
not then being leased by Tenant hereunder shall be reasonably
marketable to other potential tenants; and
(iv) the adjustment of the total Rentable Area of the 27th
Floor Space shall be reflected in the Plans (as defined in the
Workletter), and the exact area, configuration and location of the
27th Floor Space (as adjusted by the Contraction Space or Expansion
Space, as the case may be) shall be subject to the review and
reasonable approval of Landlord (which approval or disapproval shall
be given by Landlord within five (5) business days after Tenant's
delivery of its Exercise Notice under this Section 42, and in the
absence of such approval or disapproval within said 5-business day
period, Landlord shall be deemed to have disapproved the same).
(b) If and to the extent that Tenant validly exercises its rights
under this Section 42, then Landlord and Tenant shall enter into an
amendment to this lease confirming the terms and provisions applicable to
the Premises (after adjustment for deletion of any such Contraction Space
or addition of any such Expansion Space, as the case may be) determined in
accordance herewith, pursuant to which:
(i) The Rentable Area of the Premises shall be amended to
reflect the actual Rentable Area of the Premises as adjusted by the
deletion of the Contraction Space or addition of the Expansion
Space, as the case may be (as determined by Landlord's architect);
70
(ii) The Tenant's Proportionate Share shall be adjusted in
accordance with the definition thereof set forth in Exhibit C;
(iii) Base Rent described in Section 1(a) of this lease shall
be amended based on the actual Rentable Area of the Premises after
adjusting for deletion of the Contraction Space or addition of the
Expansion Space, as the case may be; and
(iv) The total amount of the Allowance and the Space Plan
Allowance described in the Workletter, as well as the minimum
portion of the Allowance which may be utilized as a rental credit
under Paragraph 9(g) of the Workletter, shall be adjusted to reflect
the adjustment to the total Rentable Area of the Premises.
(c) If Tenant does not exercise its rights under this Section 42 on
or before the first to occur of (i) the Outside Exercise Date described
above in this Section 42, or (ii) the date Tenant takes "Physical
Occupancy" of any portion of the 27th Floor Space (as defined in Section
42(a) above), then such rights shall terminate as of such date and the
provisions of this Section 42 shall thereafter be null and void.
(d) Tenant shall not have the right to exercise both the expansion
and the contraction right under this Section 42, and if Tenant exercises
either such right it shall thereupon be precluded from exercising the
other such right.
43. STORAGE CLOSET/STORAGE AREA. Subject to the terms and conditions
hereinafter set forth, Landlord grants to Tenant, during the Term, (i) the right
to store furnishings, equipment and other personal property within that certain
storage area ("STORAGE AREA") located on the 28th floor and identified on
Exhibit A, and (ii) the right to operate, maintain, repair and replace certain
items of Existing FF&E currently located within that certain storage closet
("STORAGE CLOSET") located on the 27th floor and identified on Exhibit A.
(a) The rights granted to Tenant under this Section shall be subject
to the following conditions precedent: (1) the use of the Storage Area and
Storage Closet must comply with the applicable requirements of any rules
and regulations of the Building from time to time relating thereto and of
any municipal, county, state, federal or other governmental ordinance,
law, rule or regulation existing from time to time; (2) the use of the
Storage Area and Storage Closet, and the operation, repair, maintenance
and replacement of any Existing FF&E located within the Storage Closet
shall not interfere with the safety or operations of the Building or
reduce or affect its structural integrity, and shall comply with the terms
of this lease; and (3) at Landlord's election, Tenant shall enter into
Landlord's standard license agreement used at the Building for comparable
purposes.
(b) Tenant's use of the Storage Closet and the Storage Area shall be
subject to all of the same terms and conditions as otherwise set forth in
this Lease relative to the "Premises" hereunder; provided, however, that
(i) Tenant shall have no responsibility to pay any fees or rentals in
connection with such Storage Closet and such Storage Area,
71
and (ii) Landlord shall not be obligated to perform any repairs or
services relative to either such space.
44. EXCULPATORY PROVISIONS. The liability of any Landlord under this lease
or any amendment to this lease, or any instrument or document executed in
connection with this lease, shall be limited to and enforceable solely against
the assets of such Landlord constituting an interest in the Land or Building and
not other assets of such Landlord. Assets of a Landlord which is a partnership
or limited liability company do not include the assets of the partners or
members of such Landlord, and any negative capital account of a partner or
member in a partnership or limited liability company which is a Landlord, and
any obligation of a partner or member to contribute capital to the partnership
or limited liability company which is Landlord, shall not be deemed to be assets
of the partnership or limited liability company which is the Landlord. No
directors, officers, employees, managers, members, or shareholders of any
corporation or limited liability company which is Landlord shall have any
personal liability arising from or in connection with this lease. At any time
during which Landlord is trustee of a land trust, all of the representations,
warranties, covenants and conditions to be performed by it under this lease or
any documents or instruments executed in connection with this lease are
undertaken solely as trustee, as aforesaid, and not individually, and no
personal liability shall be asserted or be enforceable against it or any of the
beneficiaries under said trust agreement by reason of any of the
representations, warranties, covenants or conditions contained in this lease or
any documents or instruments executed in connection with this lease.
[Signature Page Follows]
72
IN WITNESS WHEREOF, the parties have caused this lease to be executed as
of the date first written above.
LANDLORD: TENANT:
303 XXXXXX REALTY L.L.C., IMANAGE, INC., a Delaware
a Delaware limited liability corporation
company
By: XXXXX THREE ILLINOIS CENTER ASSOCIATES
LIMITED PARTNERSHIP, its managing member By:
------------------------
By: XXXXX THREE ILLINOIS CENTER L.L.C., a
general partner Name:
------------------
Title:
------------------
By: XXXXX INTERESTS LIMITED ATTEST:
PARTNERSHIP, a member
By: XXXXX HOLDINGS, INC., its By:
general partner ------------------------
Name:
------------------
Title:
------------------
By:
----------------------
Name:
---------------
Title:
---------------
73
EXHIBIT A
FLOOR PLAN(S) OF PREMISES
[XXXXX FLOOR PLAN 27TH FLOOR]
A-1
[XXXXX FLOOR PLAN 28TH FLOOR]
A-2
EXHIBIT B
WORKLETTER
THIS WORKLETTER is attached to and incorporated as part of that certain
Office Lease by and between 303 XXXXXX REALTY L.L.C., a Delaware limited
liability company ("Landlord"), and IMANAGE, INC., a Delaware corporation
("Tenant"), for space at the Building described below.
W I T N E S S E T H:
WHEREAS, Landlord and Tenant have entered into an Office Lease (the
"Lease") for certain Premises (as defined in the Lease) in the office building
located at 000 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx (the "Building"); and
WHEREAS, certain tenant improvement work is to be completed on the
Premises;
NOW, THEREFORE, for and in consideration of the agreement to lease the
Premises and pay rent and the mutual covenants contained herein, the parties
agree as follows:
1. DELIVERY OF POSSESSION. Landlord shall deliver possession of the
Premises to Tenant for performance of Tenant's Work on or before the Turnover
Date described in Section 7 of the Lease.
2. TENANT'S WORK. Tenant, at its sole cost and expense, but subject to
payment of the Allowance (as hereinafter defined) as provided under Paragraph 9
below, shall perform, or cause to be performed, the Tenant's Work (as defined in
the Lease) in the Premises provided for in the Plans (as hereafter defined)
submitted to and approved by Landlord (which approval shall not be unreasonably
withheld or delayed as described in paragraph 3(b) below). The Tenant's Work
shall be constructed in a good and workmanlike fashion, in accordance with the
requirements set forth herein and in compliance with all applicable statutes,
laws, ordinances, orders, codes, rules, regulations, building and fire codes and
other governmental requirements, including, without limitation, the ADA (as
defined in the Lease), as well as with all building construction rules and
regulations in effect from time to time. Landlord's review and approval of the
Plans or any other submission of Tenant shall create no responsibility or
liability on the part of Landlord for such compliance or for their completeness
or design sufficiency. Tenant shall commence the construction of the Tenant's
Work promptly following completion of the pre-construction activities provided
for in Paragraph 3 below and shall diligently proceed with all such construction
in order to endeavor to complete the Tenant's Work on or about the Commencement
Date. Tenant shall coordinate the Tenant's Work so as avoid interference with
any other work being performed by or on behalf of Landlord and other tenants at
the Building.
B-1
3. PRE-CONSTRUCTION ACTIVITIES.
(a) On or before the commencement of construction of the Tenant's Work
(and, in any event, on or before the Commencement Date), Tenant shall submit the
following information and items to Landlord for Landlord's review and approval
(which approval shall not be unreasonably withheld or delayed as described in
paragraph 3(b) below):
(i) A detailed construction schedule containing the major
components of the Tenant's Work and the estimated time
required for each, including the scheduled commencement date
of construction of the Tenant's Work, milestone dates and the
estimated date of completion of construction.
(ii) An itemized statement of estimated construction costs,
including permits and architectural and engineering fees.
(iii) The names and addresses of Tenant's contractors (and the
contractor's subcontractors and vendors) to be engaged by
Tenant for the Tenant's Work and of any construction manager
proposed to be engaged by Tenant for the Tenant's Work
(collectively, "Tenant's Contractors"). Landlord has the right
to approve or disapprove Tenant's Contractors, which approval
shall not be unreasonably withheld or delayed. Tenant shall
not employ as Tenant's Contractors any persons or entities so
disapproved by Landlord. If Landlord has affirmatively
approved only certain contractor(s) and/or subcontractor(s)
from Tenant's list, Tenant shall employ as Tenant's
Contractors only those persons or entities so approved.
Without limitation of the foregoing, Landlord hereby
pre-approves those contractors and/or subcontractors listed on
Attachment 2 hereto for performance of the Tenant's Work or
portions thereof.
(iv) Tenant's Architect's (as hereinafter defined) written
statement that Tenant's Architect has visited the site,
inspected and verified existing conditions as such conditions
affect the Plans and construction of the Tenant's Work and
that Tenant's Architect has verified and confirmed the
itemized statement of estimated construction costs delivered
under Paragraph 3(a)(ii) above.
(v) Security in form and substance acceptable to Landlord in order
to secure Tenant's ability to pay any excess costs for the
Tenant's Work above the Net Allowance (as defined in Paragraph
9 below) being provided by Landlord hereunder, but only if the
cost of the Tenant's Work is estimated to cost more than 125%
of said Net Allowance.
(vi) Certified copies of insurance policies or certificates of
insurance as hereinafter described. Tenant shall not permit
Tenant's Contractors to commence work until the required
insurance has been obtained and certified copies of policies
or certificates have been delivered to Landlord.
B-2
(vii) The Plans for the Tenant's Work, which Plans shall be subject
to Landlord's approval in accordance with Paragraph 3(b)
below.
Tenant will update such information and items by notice to Landlord of any
changes. Landlord shall promptly (or as otherwise required by this Workletter)
review all submissions made by Tenant.
(b) As used herein the term "Plans" shall mean full and detailed
architectural and engineering plans and specifications covering the Tenant's
Work (including, without limitation, architectural, mechanical, electrical, life
safety, fire protection and plumbing working drawings for the Tenant's Work).
The Plans shall include the minimum information shown on Attachment 1 attached
hereto and incorporated herein. Subject to Landlord's payment of the Allowance
(as hereinafter defined), Tenant shall pay all costs and expenses of preparing
the Plans. The Plans shall be subject to Landlord's approval (not to be
unreasonably withheld or delayed, as hereinafter described) and the approval of
all local governmental authorities requiring approval, if any. Landlord shall
give its approval or disapproval (giving reasons in case of disapproval) of the
Plans within seven (7) business days after their delivery to Landlord. Landlord
agrees not to unreasonably withhold its approval of said Plans; provided,
however, that Landlord shall not be deemed to have acted unreasonably if it
withholds its consent because, in Landlord's opinion: (i) the Tenant's Work are
likely to adversely affect Building systems, the structure of the Building or
the safety of the Building and its occupants; (ii) the Tenant's Work would
adversely affect Landlord's ability to furnish services to Tenant or other
tenants; (iii) the Tenant's Work would increase the cost of operating the
Building; (iv) the Tenant's Work would violate any governmental laws, rules or
ordinances; (v) the Tenant's Work contains or would require the use of hazardous
or toxic material in any unlawful manner; (vi) the Tenant's Work would adversely
affect the appearance of the Building; or (vii) the Tenant's Work would require
entry into, or otherwise affect, another tenant's premises or the public area of
the Building. The foregoing reasons, however, shall not be exclusive of the
reasons for which Landlord may withhold consent, whether or not such other
reasons are similar or dissimilar to the foregoing. Landlord shall cooperate
with Tenant by discussing or reviewing preliminary plans and specifications at
Tenant's request prior to completion of the full, final detailed Plans in order
to expedite the preparation of and the subsequent approval process concerning
the final Plans. If Landlord notifies Tenant that changes are required to the
final Plans submitted by Tenant, then Landlord shall provide a written response
to Tenant describing the nature of such changes required by Landlord, and Tenant
shall submit to Landlord, for its approval, the Plans amended in accordance with
the changes so required. Such submission of revised Plans shall be accompanied
by a written point by point response from Tenant specifically responding to any
disapprovals or other responses delivered by Landlord to Tenant. Landlord shall
give its approval or disapproval (giving reasons in case of disapproval) of any
such revised Plans within five (5) business days after their delivery to
Landlord. The Plans shall also be revised, and the Tenant's Work shall be
changed, to incorporate any work required in the Premises by any local
governmental field inspector. Landlord's approval of the Plans shall in no way
be deemed to be acceptance or approval of any element therein contained which is
in violation of any applicable statutes, laws, ordinances, orders, codes, rules,
regulations, building or fire codes or other governmental requirements.
B-3
(c) At Tenant's request, upon Landlord's approval of the Plans, Landlord
and Tenant shall agree in writing on any affixed appurtenances which are part of
Tenant's Work which Tenant shall be allowed or required to remove upon the
expiration of the Lease.
(d) No Tenant's Work shall be undertaken or commenced by Tenant in the
Premises until:
(i) The Plans for the Premises have been submitted to and approved
by Landlord (which approval shall not be unreasonably withheld
or delayed as provided in Section 3(b) hereinabove).
(ii) All necessary building permits have been obtained by Tenant.
(iii) All required insurance coverages have been obtained by Tenant,
it being understood that failure of Landlord to receive
evidence of such coverage upon commencement of the Tenant's
Work shall not waive Tenant's obligations to obtain such
coverages.
(iv) Items described in Paragraph 3(a) above or elsewhere in the
Workletter which are required to be submitted to Landlord
prior to commencement of construction of the Tenant's Work
have been so submitted and have been approved, where required
(which approval shall not be unreasonably withheld or delayed,
as provided herein).
(e) Tenant, at Tenant's option, may retain Landlord as construction
manager for all or any portion of Tenant's Work, if Landlord agrees to perform
such construction management services. In the event that Tenant elects to retain
Landlord as construction manager and Landlord agrees to perform such
construction management services, Tenant and Landlord shall, at Landlord's
request, enter into Landlord's standard form of workletter or tenant
construction agreement for similar work in the Building, subject to Tenant's
approval thereof and with mutually agreed upon changes thereto and mutually
agreed-upon fees payable to Landlord in connection therewith. In the event
Tenant does not so engage Landlord as construction manager, then Tenant shall
have the right to retain its own construction manager or general contractor for
construction of the Tenant's Work, subject to Landlord's reasonable approval as
provided herein, whereupon Landlord shall not be entitled to any general
coordination/supervision fee relative to the Tenant's Work, provided that, in
lieu thereof, Tenant shall reimburse Landlord for Landlord's actual
out-of-pocket costs paid or otherwise due and owing to third parties (e.g.,
including third-party engineer review costs, copying charges, other
out-of-pocket disbursements, etc.) in connection with Landlord's general review
and supervision of the Tenant's Work and for review of the Plans and other
submittals hereunder (which amounts payable by Tenant shall not exceed
$3,000.00, and shall be payable within ten (10) business days after Landlord's
demand therefor from time to time).
4. DELAYS. In the event Tenant fails to deliver or deliver in sufficient
and accurate detail the information required under Paragraph 3 on or before the
respective dates specified in said paragraph, or in the event Tenant, for any
reason (other than Landlord Delay as
B-4
hereinafter described), fails to complete the Tenant's Work on or before the
Commencement Date, Tenant shall be responsible for Rent and all other
obligations as set forth in the Lease from the Commencement Date, regardless of
the degree of completion of the Tenant's Work on such date, and no such delay in
completion of the Tenant's Work shall affect the Commencement Date, or relieve
Tenant of any of its obligations under said Lease. Notwithstanding any of the
foregoing, if the Tenant's Work within the Premises is not substantially
completed on or before the later of (i) the Commencement Date set forth in the
Lease and (ii) the date set forth in Tenant's construction schedule delivered
under Section 3(a)(i) as the scheduled date for completion of such Tenant's Work
within the Premises (herein, in each case, the "TARGET DATE"), and if any such
delay in substantial completion of the Tenant's Work is attributable to Landlord
Delay (as herein defined), then the Commencement Date shall be extended by the
period of delay in substantial completion of the Tenant's Work beyond the
corresponding Target Date which was attributable to the Landlord Delay (i.e., as
opposed to being attributable to any other matter causing such delay), but not
beyond the number of actual days of Landlord Delay, and in any event, not beyond
the day Tenant first begins to conduct any portion of its business operations in
the Premises. As used herein, the term "LANDLORD DELAY" means any delay in
Landlord responding with its approval or disapproval of the Plans when required
under Paragraph 3(b) above, or any delay in Tenant's substantial completion of
the Tenant's Work resulting from Landlord's concurrent occupancy of space on the
28th floor to perform the Landlord's Work while Tenant is performing the
Tenant's Work, in each case only to the extent delaying substantial completion
of the Tenant's Work. Landlord Delay shall not include any delay that would in
any event (i.e., even if the Landlord Delay had not occurred) have resulted from
other causes. Tenant shall notify Landlord, in writing, of any claim for
Landlord Delay, which notice shall be delivered within five (5) business days
following the occurrence of the event claimed by Tenant to give rise to such
Landlord Delay (time being of the essence); Tenant's failure to notify Landlord
within said 5-business day period shall be deemed a waiver of the subject claim
of delay.
5. CHARGES AND FEES. Subject to Paragraph 9 below and the overall cap to
Landlord of $3,000.00 described in Paragraph 3(e) above, Tenant shall be
responsible for all costs and expenses attributable to the Tenant's Work,
including payment to Landlord all of Landlord's actual out-of-pocket expenses
for third-party consultant or engineering review (e.g.. structural and MEP) of
the Tenant's Work, which payments to Landlord shall be made within ten (10)
business days following Landlord's request therefor from time to time). Except
as provided in the preceding sentence, or as provided in Paragraph 3(e) above,
Landlord shall not be entitled to any supervision or other fee relative to the
Tenant's Work.
6. CHANGE ORDERS. All changes (other than deminimums changes based on
field conditions which do not, in any event, affect Building structure or
systems) to the final Plans requested by Tenant must be approved by Landlord in
advance of the implementation of such changes as part of the Tenant's Work. If
and to the extent that Tenant is not required hereunder to obtain Landlord's
approval to a given change (i.e., for "deminimus" field-condition changes as
provided above in this Section 6), Tenant shall, nonetheless, deliver the
applicable change order to Landlord within five (5) business days after issuance
of same. Subject to Paragraph 9 below, Tenant shall be responsible for all costs
and expenses attributable to any changes (including, without limitation,
reimbursement to Landlord for Landlord's actual out-of-pocket costs paid or
otherwise due and owing to third parties in connection with Landlord's
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supervision and review of the change order and corresponding work, as provided
in Section 3(e) above, but subject to the overall cap of $3,000.00 as described
in said Section 3(e), unless Landlord is acting as construction manager pursuant
to Section 3(e) above, in which case such fees for the change order work shall
be as mutually agreed to by the parties as contemplated by said Section 3(e)).
All delays caused by Tenant initiated change orders, including, without
limitation, any stoppage of work during the change order review process, are
solely the responsibility of Tenant and shall cause no delay in the Commencement
Date, or payment of Rent and performance of other obligations set forth in the
Lease.
7. STANDARDS OF DESIGN AND CONSTRUCTION AND CONDITIONS OF TENANT'S
PERFORMANCE. All work done in or upon the Premises by Tenant shall be done
according to the standards set forth in this Paragraph 7, except as the same may
be modified in the Plans approved by both Landlord and Tenant.
(a) Tenant's Plans and all design and construction of the Tenant's Work
shall comply with all applicable statutes, ordinances, regulations, laws, codes
and industry standards, including, but not limited to, requirements of
Landlord's fire insurance underwriters and the requirements of the ADA, and with
all Building related construction rules and regulations in effect from time to
time. Approval by Landlord of the Plans shall not constitute a waiver of this
requirement or assumption by Landlord of responsibility for compliance. Where
several sets of the foregoing laws, codes and standards must be met, the
strictest shall apply where not prohibited by another law, code or standard.
(b) Tenant shall, at its own cost and expense, but subject to payment by
Landlord of the Allowance under Paragraph 9 below, obtain all required building
permits and, when construction has been completed, shall, at its own cost and
expense, obtain an occupancy permit for the Premises, which shall be delivered
to Landlord. Tenant's failure to obtain such permits shall not cause a delay in
the Commencement Date, or the payment of Rent and performance of other
obligations under the Lease.
(c) Tenant's Contractors shall be licensed contractors, possessing good
labor relations, capable of performing quality workmanship and working in
harmony with Landlord's contractors and subcontractors and with other
contractors and subcontractors in the Building. All work shall be coordinated
with any other construction or other work in the Building in order not to
adversely affect construction work being performed by or for Landlord or its
tenants, it being understood that in the event of any conflict, Landlord and its
contractors and subcontractors shall have priority over Tenant and Tenant's
Contractors; provided, however, notwithstanding such priority, Landlord shall
not unreasonably inhibit Tenant's Contractors from performing their work and
Landlord shall cooperate with Tenant and Tenant's Contractors in all reasonable
respects relative to work coordination matters.
(d) Landlord shall have the right, but not the obligation, to perform, on
behalf of and for the account of Tenant, subject to reimbursement by Tenant
(subject to application of the Allowance to the extent thereof), any work (i)
which Landlord deems necessary to be done on an emergency basis or (ii) which
pertains to structural components, building systems, the general utility systems
for the Building or connecting the Tenant's Work with any other work in the
Building. Landlord shall obtain Tenant's prior approval of the cost of work
referred to in
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clause (ii), which approval shall not be unreasonably withheld, and shall not
unduly interfere with or delay the performance of Tenant's Work by reason of
undertaking any such work.
(e) Tenant shall use only new, quality materials in the Tenant's Work,
except where explicitly shown in the Plans approved by Landlord and Tenant.
Tenant shall obtain, promptly after completion of the Tenant's Work, warranties
of at least one (1) year duration from the completion of the Tenant's Work
against defects in workmanship and materials on all work performed and equipment
installed in the Premises as part of the Tenant's Work, a copy of which
warranties shall be delivered to Landlord upon Tenant's receipt of the same.
(f) Tenant and Tenant's Contractors, in performing work, shall do so in
conformance with the "303 East Xxxxxx Drive Contractor Regulations and
Guidelines for Tenant Improvements" (a copy of which has heretofore been made
available to Tenant) and shall not unreasonably interfere with other tenants and
occupants of the Building. Tenant and Tenant's Contractors shall make all
reasonable efforts and take all reasonable steps appropriate to construction
activities undertaken in a fully-occupied first-class office building so as not
to interfere with the operation of the Building and shall, in any event, comply
with all other construction-related rules and regulations existing from time to
time at the Building. Tenant and Tenant's Contractors shall take all reasonable
precautionary steps to minimize dust, noise and construction traffic, and to
protect their facilities and the facilities of others affected by the Tenant's
Work and to properly police same. Tenant shall not permit noise or odors from
construction of Tenant's Work to disturb other tenants in the Building. Tenant's
Work which does so disturb other tenants shall be performed after regular
working hours. Construction equipment and materials are to be kept within the
Premises and delivery and loading of equipment and materials shall be done at
such locations and at such time as Landlord shall reasonably direct so as not to
burden the construction or operation of the Building.
(g) Upon not less than twenty-four (24) hours' written or oral notice to
Tenant and Tenant's failure to cure such matter within such 24-hour period
(provided that no such notice or cure period shall be required in the case of an
emergency), Landlord shall have the right to order Tenant or any of Tenant's
Contractors who violate the requirements imposed on Tenant or Tenant's
Contractors in performing work to cease work and remove its equipment and
employees from the Building, to the extent Landlord determines that such
violation is likely to have an adverse affect on the Building systems, structure
or operations, the safety of the Building's occupants, or to otherwise create
any other type of hazardous condition. A violation will be curable unless the
particular violation by the particular Tenant's Contractor has previously been
the basis for a notice to cease work. The foregoing cure period shall not limit
the Landlord's right to require that violations cease immediately. No such
action by Landlord shall delay the Commencement Date, or the payment of Rent and
performance of other obligations under the Lease.
(h) Except as expressly provided below in this subparagraph (h), utility
costs or charges for any service (including, but not limited to, electrical) to
the Premises shall be the responsibility of Tenant from the date Tenant is
obligated to commence or commences the Tenant's Work and shall be paid for by
Tenant at Landlord's rates. Use of freight elevators is subject to reasonable
scheduling by Landlord. Any use of the freight elevators outside of normal
business hours of the Building will be at Tenant's expense, in an amount equal
to the out-of-
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pocket expenses incurred by Landlord relative to security personnel and/or
elevator attendant(s) necessitated by such after-hours freight elevator usage.
Tenant shall also be responsible for HVAC charges for use of HVAC services
outside of normal business hours of the Building, payable at rates fixed by
Landlord for such after-hours HVAC services. Tenant shall have no responsibility
for payment of HVAC charges or for charges for freight elevator usage during
normal business hours of the Building prior to the Commencement Date of the
Lease in connection with performance of the Tenant's Work and Tenant's initial
move into the Premises. Tenant shall arrange and pay for removal of construction
debris and shall not place debris in the Building's waste containers.
(i) Tenant shall permit access to the Premises upon reasonable notice
(except that no notice shall be required in the case of an emergency, and the
Tenant's Work shall be subject to inspection, by Landlord and Landlord's
architects, engineers, contractors and other representatives, at all times
during the period in which the Tenant's Work are being constructed and installed
and within a reasonable period following completion of the Tenant's Work.
(j) Tenant shall proceed with its work expeditiously, continuously and
efficiently, from the date Landlord tenders possession of the Premises to Tenant
for the construction of the Tenant's Work. Tenant shall notify Landlord upon
completion of the Tenant's Work and shall furnish Landlord and Landlord's title
insurance company with such further documentation as may be necessary under
Paragraph 9 below.
(k) Tenant shall have no authority to deviate from the Plans (other than
in a deminimus manner) in performance of the Tenant's Work, except as authorized
by Landlord and its designated representative in writing (which authorization
shall not be unreasonably withheld or delayed in accordance with the same
standards for approval as described in Section 3(b) above). Tenant shall furnish
to Landlord "as-built" drawings of the Tenant's Work consisting of record
drawings of the installed condition of each component of the Tenant's Work
completed from the Plans marked up daily in the field by the various trades.
Such record drawings shall be submitted in a final package by Tenant's general
contractor to Landlord within ninety (90) days after completion of the Tenant's
Work. Final disbursement of any remaining amounts of the Allowance will not
occur until such record drawing have been received by Landlord.
(l) In connection with its approval of the Plans, Landlord shall have the
right to require Tenant to install and maintain proper access panels to utility
lines, pipes, conduits, duct work and component parts of mechanical and
electrical systems existing or installed in the Premises to the extent required
by applicable laws or otherwise identified by Landlord as part of its approval
of the Plans.
(m) Tenant shall impose on and enforce all applicable terms of this
Workletter against Tenant's architect, Tenant's engineer and Tenant's
Contractors.
8. INSURANCE AND INDEMNIFICATION.
(a) In addition to any insurance which may be required under the Lease,
Tenant shall secure, pay for and maintain or cause Tenant's Contractors to
secure, pay for and maintain during
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the continuance of construction and fixturing work within the Building or
Premises, insurance in the following minimum coverages and limits of liability:
(i) Worker's Compensation and Employer's Liability Insurance with
limits of not less than $1,000,000.00, or such higher amounts
as may be required from time to time by any employee benefit
acts or other statutes applicable where the work is to be
performed, and in any event sufficient to protect Tenant's
Contractors from liability under the aforementioned acts.
(ii) Commercial General Liability Insurance including Broad Form
Contractual, Broad Form Property Damage, Personal Injury,
Completed Operations and Products coverages (such Completed
Operations and Products shall be provided for a period of
three (3) years after the date of final acceptance of the
Tenant's Work), and deletion of any exclusion pertaining to
explosion, collapse and underground property damage hazards,
with limits of not less than $10,000,000.00 per occurrence and
having a general aggregate amount on a per location basis of
not less than $10,000,000.00.
(iii) Comprehensive Automobile Liability Insurance including Owned,
Non-Owned and Hired Car coverages, with limits of not less
than $2,000,000.00 combined single limit for both bodily
injury and property damage.
(iv) "All-risk" builder's risk insurance upon the entire Tenant's
Work to the full insurable value thereof. This insurance shall
include the interests of Landlord and Tenant (and their
respective contractors and subcontractors of any tier to the
extent of any insurable interest therein) in the Tenant's Work
and shall insure against the perils of fire and extended
coverage and shall include "all-risk" builder's risk insurance
for physical loss or damage including, without duplication of
coverage, theft, vandalism and malicious mischief. If portions
of the Tenant's Work are stored off the site of the Building
or in transit to said site and are not covered under said
"all-risk" builder's risk insurance, then Tenant shall secure
and maintain similar property insurance on such portions of
the Tenant's Work. Any loss insured under said "all-risk"
builder's risk insurance is to be adjusted between Landlord
and Tenant and made payable to Landlord as trustee for the
insureds, as their interests may appear.
All policies (except the worker's compensation policy) shall be endorsed to
include as additional insured parties Landlord and its partners, directors,
officers, members, employees and agents, Landlord's contractors, Landlord's
architects, and such additional persons as Landlord may designate in writing to
Tenant. The waiver of subrogation provisions contained in the Lease shall apply
to all insurance policies (except the worker's compensation policy) to be
obtained by Tenant pursuant to this paragraph. The insurance policy endorsements
shall also provide that the insurer and/or the insurance company agent on behalf
of the insurer shall provide Tenant with thirty (30) days' prior written notice
of any reduction, cancellation or non-renewal of coverage
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(except that ten (10) days' notice shall be sufficient in the case of
cancellation for non-payment of premium) and shall provide that the insurance
coverage afforded to the additional insured parties thereunder shall be primary
to any insurance carried independently by said additional insured parties.
Additionally, where applicable, each policy shall contain a cross-liability and
severability of interest clause. Tenant shall provide copies to Landlord of any
and all written notices from its insurer or the insurance company agent of any
amendment, cancellation or non-renewal promptly after Tenant's receipt thereof.
(b) Without limitation of the indemnification provisions contained in the
Lease, to the fullest extent permitted by law Tenant agrees to indemnify,
protect, defend and hold harmless Landlord, Landlord's contractors and
Landlord's architects and their partners, directors, officers, employees and
agents, from and against all claims, liabilities, losses, damages and expenses
of whatever nature arising out of or in connection with the Tenant's Work or the
entry of Tenant or Tenant's Contractors into the Building and the Premises,
including, without limitation, mechanic's liens or the cost of any repairs to
the Premises or Building necessitated by activities of Tenant or Tenant's
Contractors and bodily injury to persons or damage to the property of Tenant,
its employees, agents, invitees, licensees or others, except and to the extent
that such claims, liabilities, losses, damages and expenses arise out of the
negligent act or omission of Landlord, or from Landlord's breach of its
obligations hereunder or under the Lease. It is understood and agreed that the
foregoing indemnity shall be in addition to the insurance requirements set forth
above and shall not be in discharge of or in substitution for same or any other
indemnity or insurance provision of the Lease.
9. ALLOWANCE; PERIODIC PAYMENTS.
(a) Landlord shall make a contribution (the "Allowance") towards the cost
of Tenant's Work (including, without limitation, the costs of construction,
permits and inspections, space plans and design drawings, architectural
drawings, mechanical, electrical and plumbing drawings, architectural,
engineering and consultants' fees, signage costs, costs of equipment and
furnishings, and Landlord's charges described in Paragraph 3(e) and Paragraph 5
above) and toward (i) moving costs ("Moving Costs") and (ii) the termination fee
payable by Tenant to its existing landlord in connection with the early
termination of its existing lease for premises located at 55 X. Xxxxxx in
Chicago, Illinois (the "Termination Fee") and (iii) attorneys' fees in
connection with the negotiation of this lease or otherwise relating to the lease
transaction being effectuated hereby (the "Attorneys' Fees"), which overall
Allowance shall be in the amount of $2,275,514.00 (which is $58.00 per square
foot of Rentable Area of the Premises), all on the terms and conditions
hereinafter set forth. In no event shall the portion of the Allowance to be
disbursed (or which may be requested by Tenant to be disbursed) toward the
Termination Fee exceed the sum of $1,000,000.00 and in no event shall the
portion of the Allowance to be disbursed (or which may be requested by Tenant to
be disbursed) toward the Attorneys' Fees exceed the sum of $20,000.00. The
overall Allowance required hereunder, less the amount of the Allowance which
Tenant, in accordance herewith, requests to be disbursed toward Moving Costs,
Attorneys' Fees and the Termination Fee, is referred to herein as the "Net
Allowance". If the cost of the Tenant's Work exceeds the Net Allowance, Tenant
shall have sole responsibility for the payment of such excess cost, and shall,
at Landlord's sole election, pay any such excess (based on the then most current
estimate of the cost of the Tenant's Work submitted to and approved by Landlord
under Paragraph 3(a) above or, in any event, based on certified cost
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statements delivered by Tenant to Landlord upon Landlord's request therefor from
time to time) prior to disbursement or further disbursement of the Net
Allowance. Further, if the actual Termination Fee exceeds the maximum portion of
the Allowance required to be made available toward the Termination Fee hereunder
(as described above), Tenant shall have the sole responsibility for the payment
of such excess cost, and shall, and Landlord's sole election, pay any such
excess to its existing landlord prior to Landlord's disbursement of the portion
of the Allowance allocated as a contribution toward the Termination Fee.
Provided that Tenant has delivered the Security Deposit required under the
Lease, then Landlord agrees to disburse the portion of the Allowance allocated
toward the Termination Fee within seven (7) days following Tenant's written
request therefor setting forth reasonable direction to Landlord of where payment
is to be made, and delivery to Landlord of (i) a statement from Tenant's
existing landlord setting forth the amount of the Termination Fee due and owing
under Tenant's existing lease, and (ii) either (A) evidence that Tenant has paid
such amount to its existing landlord as the requisite termination fee under
Tenant's existing lease (in which case, Landlord shall pay such portion of the
Allowance allocated toward the Termination Fee directly to Tenant, as
reimbursement for its payment to its existing landlord), or (B) a direction to
pay the Termination Fee directly to Tenant's existing landlord (in which case,
Landlord shall pay such portion of the Allowance allocated toward the
Termination Fee directly to Tenant's existing landlord as direct payment of said
Termination Fee); subject, in any event, to the terms and conditions described
in the preceding sentence and in Paragraph 9(e) below. The balance of the
Allowance not otherwise attributable to the Termination Fee shall be disbursed
in accordance with the remaining terms and conditions of this Paragraph 9.
(b) Periodically, but not more frequently than once per month, Tenant may
submit to Landlord a payment request for costs of the Tenant's Work incurred and
not previously paid naming the parties to be paid and the respective amounts of
such payments, which payment request shall be accompanied by:
(i) A statement in writing under oath signed by Tenant stating the
various contracts entered into by Tenant for the Tenant's Work
and with respect to each: the total contract price of all
labor, work, services and materials; the amounts theretofore
paid thereon; the amount requested for the current
disbursement; and the balance due for such labor, work,
services and materials, after payment of the current
disbursement, to complete the Tenant's Work in accordance with
the Plans;
(ii) A written application for payment from each of Tenant's
Contractors disclosed in the aforesaid sworn Tenant's
statement wherein each of Tenant's Contractors certifies
completion and the cost of that portion of the Tenant's Work
for which payment is requested and further certifies that the
cost to complete the Tenant's Work remaining to be done under
said contract will not exceed the balance due thereunder
(without including in such balance any required retainages)
and a statement in writing under oath or verified by affidavit
of Tenant's Contractor stating: the names of all persons,
firms, associations, corporations or other parties by whom
labor, materials, services or work will be rendered or
furnished pursuant to the contract with Tenant's Contractor;
the nature of labor,
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work, services and materials to be rendered or furnished by
each of the foregoing; the amounts (in the case of firm
subcontracts) and estimated amounts (in other cases) to be
paid for such labor, work, services and materials; the amounts
theretofore paid thereon; the amount requested for the current
disbursement; and the balance due for such labor, work,
services and materials, after payment of the current
disbursement, to complete the work described in such
subcontract;
(iii) A statement from each of the subcontractors and materialmen
disclosed in the aforesaid Tenant's Contractor's sworn
statement, in writing under oath or verified by affidavit of a
duly authorized agent of such subcontractor of the parties
furnishing materials and labor to it or for their account, and
of the amounts due or to become due each;
(iv) Certificate for payment executed by an architect acceptable to
Landlord on American Institute of Architect's Form G-703; and
(v) Originals of partial waivers of lien from each of Tenant's
Contractors and all materialmen and vendors requesting payment
covering such requested payment.
Provided that the foregoing deliveries have been made, and so long as Tenant is
not then in default hereunder, under the Lease, or under any separate Tenant
Construction Agreement entered into with Landlord, as construction manager,
Landlord shall disburse portions of the Allowance in the amount of the requested
disbursement no later than thirty (30) days after each such request therefor
(provided that if Tenant cures any such default within applicable notice or cure
periods under such instruments, then Tenant shall again be entitled to
disbursement of the Allowance in accordance with the other terms and conditions
set forth in this Paragraph 9).
(c) Except for the portion of the Allowance being disbursed toward Moving
Costs, Attorneys' Fees or the Termination Fee, Landlord may make payments of the
Allowance through a construction escrow established with Landlord's title
insurance company pursuant to which escrow said title company shall examine the
sworn statements and lien waivers provided by Tenant and Tenant's Contractors
and, if so required by Landlord, insure against mechanic lien claims for work
done through the date of Tenant's Contractors' most recent request for payment,
in which case Tenant agrees to comply with the reasonable terms and conditions
of such construction escrow. The escrowee's charges therefor shall be deemed
part of the costs of the Tenant's Work. Notwithstanding anything to the contrary
contained herein or in the Lease, in the event Landlord makes payments of the
Allowance through a construction escrow as provided in this paragraph, Tenant's
Contractors may, at their own expense, arrange to provide "trailing" waivers
(lien waivers which are dated up to thirty (30) days earlier than the
contractor's request for payment) if Landlord's lender so permits and Landlord's
title insurance company nevertheless provides the insurance called for by this
paragraph.
(d) Within thirty (30) days after final completion and installation of the
Tenant's Work, Tenant shall submit to Landlord a detailed breakdown of the total
amount of the costs of the Tenant's Work, together with final waivers of liens,
contractors' affidavits, and architects'
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certificates in such form as may be reasonably required by Landlord, Landlord's
title insurance company and Landlord's lender, if any, from all parties
performing labor or supplying materials or services in connection with the
Tenant's Work, showing that all of said parties have been compensated in full
and waiving all liens in connection with the Premises and Building.
(e) Landlord has no obligation to disburse any portion of the Allowance
during any period when Tenant is in default hereunder, under the Lease or under
any tenant construction agreement or workletter agreement entered into with
Landlord, as construction manager, applicable to the Tenant's Work (provided
that if Tenant cures any such default within applicable notice or cure periods
under such instruments, then Tenant shall again be entitled to disbursement of
the Allowance in accordance with the other terms and conditions set forth in
this Paragraph 9). Disbursement of any portion of the Allowance shall not be
deemed a waiver of Tenant's obligation to comply with such provisions. Tenant
shall be responsible for the appropriateness and completeness of the
contractors' affidavits and waivers of lien and approval of any of such work;
Landlord shall have no responsibility for any of the foregoing.
(f) Except for that portion of the Allowance being disbursed toward Moving
Costs, Attorneys' Fees or the Termination Fee, Landlord shall have the right to
withhold a ten percent (10%) retainage from any Allowance payment requests
submitted by Tenant from time to time. Landlord shall disburse such retainage,
together with the balance of the Allowance, upon Tenant's satisfaction of the
terms of Paragraph 9(b) and 9(d) above and Tenant's final request for payment
(which request shall be made no earlier than the Commencement Date) and
certification that the entire Tenant's Work has been performed and that the
amounts for which payment is requested are due and owing, which disbursement
shall be made within thirty (30) days after presentation by Tenant to Landlord
of request for payment and appropriate and complete contractor's affidavits and
waivers of lien showing that the work covered thereby has been performed in the
Premises.
(g) In the event that the cost of Tenant's Work and such other items for
which the Allowance may be applied should for any reason be less than the full
amount of the Allowance, Tenant shall be entitled to receive such difference as
a credit against Base Rent next coming due under the Lease; provided that Tenant
shall not be so entitled to any portion of such difference exceeding $196,165.00
(which is $5.00 per square foot of Rentable Area of the Premises).
(h) Without limitation of the foregoing terms regarding the "Allowance"
due and owing from Landlord hereunder, Landlord hereby agrees to make the
following contribution (the "Space Plan Allowance") pursuant to the following
terms and conditions:
(i) A contribution toward the fees and costs due and owing from
Tenant to its space planner in connection with the preparation
of the initial space plans for Tenant's Work in the amount not
to exceed $3,923.30 (i.e., being $.10 per square foot of
Rentable Area of the Premises).
Within thirty (30) days following submission by Tenant to Landlord of a
payment request with respect to the Space Plan Allowance, which request shall
include a copy of the invoice(s) showing amounts due and owing to Tenant's space
planner in connection with said space plans, and, if requested by Landlord, a
lien waiver from said space planner showing that all amounts so
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due and owing in connection with the preparation of the space plans have been
fully paid, Landlord shall disburse the Space Plan Allowance to Tenant or, at
Tenant's direction, directly to the aforedescribed space planner. Landlord has
no obligation to disburse any portion of the Space Plan Allowance during any
period when Tenant is in default hereunder or under the Lease or under any
Tenant Construction Agreement applicable to the Tenant's Work (provided that if
Tenant cures any such default within applicable notice or cure periods under
such instruments, then Tenant shall again be entitled to disbursement of the
Space Plan Allowance in accordance with the other terms and conditions set forth
herein). Disbursement of any portion of the Space Plan Allowance shall not be
deemed a waiver of Tenant's obligation to comply with such provisions. In the
event that the fees and costs payable by Tenant to its space planner in
connection with preparation of the foregoing space plans is, for any reason,
less than the full amount of the Space Plan Allowance, then Tenant shall not be
entitled to receive any such difference. In the event that the foregoing fees
and costs are greater than the Space Plan Allowance, Tenant shall be fully
responsible for the payment of all such excess costs and fees.
10. MISCELLANEOUS.
(a) Except as expressly set forth herein or in the Lease, Landlord has no
agreement with Tenant and has no obligation to do any work with respect to the
Premises.
(b) Time is of the essence under this Workletter.
(c) If Tenant fails to make any payment relating to the Tenant's Work as
required hereunder, Landlord, at its option, may complete the Tenant's Work
pursuant to the approved Plans and continue to hold Tenant liable for the costs
thereof and all other costs due to Landlord. Tenant's failure to pay any amounts
owed by Tenant hereunder when due, which failure continues for five (5) business
days after written notice to Tenant of such failure, or Tenant's failure to
perform any other obligations hereunder, which failure continues for thirty (30)
days after written notice to Tenant of such failure, shall, in each such case,
also constitute a Default under the Lease and Landlord shall have all the rights
and remedies granted to Landlord under the Lease for nonpayment of any amounts
owed thereunder or failure by Tenant to perform its obligations thereunder.
(d) Notices under this Workletter shall be given in the same manner as
under the Lease.
(e) The liability of Landlord hereunder or under any amendment hereto or
any instrument or document executed in connection herewith shall be limited as
provided in Section 44 of the Lease.
(f) The headings set forth herein are for convenience only.
(g) This Workletter, together with the Lease, sets forth the entire
agreement of Tenant and Landlord regarding the Tenant's Work. This Workletter
may only be amended if in writing, duly executed by both Landlord and Tenant.
(h) Tenant has designated _______________________ (whose address is
___________________________, __________, Illinois) as its architect ("Tenant's
Architect")
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for purposes of preparing the architectural portions of the Plans for the
Tenant's Work and Tenant shall use ___________________________ (whose address is
____________________________, ___________________, Illinois) as its engineer
("Tenant's Engineer) for preparing the mechanical, plumbing, electrical, fire
protection and life safety portions of the Plans.
(i) This Agreement shall not be deemed applicable to any additional space
added to the original Premises at any time or from time to time, whether by any
options under the Lease or otherwise, or to any portion of the original Premises
or any additions thereto in the event of a renewal or extension of the original
term of the Lease, whether by any options under the Lease or otherwise, except
as expressly provided in any amendment or supplement to the Lease.
11. DESIGNATED REPRESENTATIVES; COOPERATION.
(a) Landlord and Tenant shall each appoint one qualified and readily
available representative with the authority to give and receive notices, other
materials and information relating to the Tenant's Work, and approvals under
this Agreement. Initially, Landlord's representative shall be Xxxxxxx Xxxxxx,
whose address is c/x Xxxxx, 000 X. Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx and
whose telephone number is (000) 000-0000, and Tenant's representative shall be
____________________________________, whose address is ________________________
__________________________, _____________________________, Illinois and whose
telephone number is (___) ____________________.
(b) Tenant and Landlord agree to make their respective architects and
engineers available to the other to answer questions and provide clarifications
and additional information as is reasonable for the timely progress and
completion of the Tenant's Work.
[WORKLETTER ATTACHMENTS FOLLOW]
B-15
ATTACHMENT 1 TO WORKLETTER
MINIMUM INFORMATION FOR PLANS
Plans and specifications (including architectural, engineering and
structural, as applicable, working drawings) required for the supply,
installation and finishing of the Tenant's Work and including, without
limitation: finish schedule; material submittals; graphics and signage; interior
and demising partitions; doors, frames and hardware; ceilings; wiring; lights
and switches; telephone and electrical outlets; floor coverings; wall coverings;
all millwork and built-ins; appliances; plumbing fixtures; HVAC systems and
equipment; refrigeration equipment; reflected ceiling plans; and other
equipment, equipment connections and facilities attached to and forming a part
of the Building.
Attachment 1-1
ATTACHMENT 2 TO WORKLETTER
PREAPPROVED CONTRACTORS/SUBCONTRACTORS
- Xxxxx Construction Company
- Xxxxxx Construction
- Tishman Construction
- Development Solutions, Inc.
Attachment 2-1
EXHIBIT C
OTHER DEFINITIONS
1. "ADA" shall have the meaning described in Section 9(f).
2. "ADDITIONAL RENT" shall have the meaning described in Section 5.
3. "ADDITIONAL RENT ESTIMATE" shall have the meaning described in Section
5(b).
4. "ALLOWANCE" shall have the meaning described in the Workletter.
5. "CALCULATION DATE" means the first day of the Term and each January 1
thereafter falling within the Term.
6. "CALCULATION YEAR" means each calendar year during which a Calculation
Date falls.
7. "DEFAULT" shall have the meaning described in Section 19.
8. "DEFAULT RATE" shall have the meaning described in Section 28(i).
9. "EXPENSE ADJUSTMENT" shall have the meaning described in Section 5(a).
10. "EXPENSES" shall mean all costs and expenses paid or incurred by or on
behalf of Landlord for owning, managing, operating, maintaining, replacing
and/or repairing the Building, the Land and the personal property used in
conjunction therewith, including without limitation: the cost of maintaining
adjoining pedestrian tunnels and walkways and related lighting, the cost of
security and security devices and systems, snow and ice and trash removal,
cleaning and sweeping, planting and replacing decorations, flowers and
landscaping, maintenance, repair and replacement of utility systems, telephone
building riser cable, elevators and escalators; electricity, gas, steam, water,
sewers, fuel, heating, lighting, air conditioning; window cleaning; janitorial
service; insurance (including but not limited to, fire, extended coverage, all
risk, liability, worker's compensation, elevator, or any other insurance carried
by the Landlord and applicable to the Project); painting; management fees;
supplies; sundries; sales or use taxes on supplies or services; rent, telephone
service, postage, office supplies, maintenance and repair of office equipment
and similar costs related to operation of the building manager's office;
licenses, permits and similar fees and charges related to ownership, management,
operation, repair, replacement and/or maintenance of the Project; the share of
costs and expenses allocated to the Building and the Land relating to the
management, maintenance, operation and repair of any common lobby or other
facilities connecting the Building or any of its facilities to any other
adjoining building, facilities or land; cost of wages and salaries of all
persons engaged in the operation, management, maintenance and repair of the
Project, and so-called fringe benefits (including social security taxes,
unemployment insurance taxes, cost for providing coverage for disability
benefits, cost of any pensions, hospitalization, welfare or retirement plans, or
any other similar or like expenses incurred under the provisions of any
collective bargaining agreement, or
C-1
any other cost or expense which Landlord pays or incurs to provide benefits for
employees so engaged in the operation, management, maintenance and repair of the
Project); the charges of any independent contractor who, under contract with the
Landlord or its representatives, does any of the work of operating, managing,
maintaining, replacing and/or repairing of the Project; legal and accounting
expenses (including, but not limited to, such expenses as relate to preparation
of statements of Expenses and Taxes and seeking or obtaining reductions in and
refunds of real estate taxes); sales and excise taxes; or any other expense or
charge which would be considered as an expense of owning, managing, operating,
maintaining, replacing and/or repairing the Project.
Expenses shall not include: costs or other items included within the
meaning of the term "Taxes" (as hereinafter defined); costs of alterations and
relocations of the premises of tenants of the Building; costs of capital
improvements to the Building (including, without limitation, capital
improvements made to cure violations of Laws existing at the Building as of the
date of this lease) other than those specifically included in Expenses as set
forth below; depreciation charges; interest and principal payments on mortgages;
ground rental payments; legal fees in connection with negotiating leases with
other tenants in the Building or in connection with enforcing lease obligations
of other tenants in the Building; fines and penalties on late payments; real
estate brokerage and leasing commissions; any expenditures for which Landlord
has been reimbursed by tenants (other than pursuant to rent escalation or tax
and operating expense reimbursement provisions in leases); salaries, wages or
other benefits paid to any executive employee above the grade of regional
building manager and regional building engineer (which are includable only to
the extent that such regional building manager and regional building engineer,
as the case may be, is engaged in servicing the Building); legal fees, space
planners' fees, leasing commissions and advertising expenses incurred in
connection with leasing space in the Building; expenses for repairs, maintenance
or replacements for which Landlord is reimbursed from or pursuant to insurance
or condemnation proceeds; costs of providing services to other tenants of the
Building without a charge (other than through payment by such tenants of
operating expenses and taxes, such as Expenses and Taxes) that are in excess of
those services provided or made available to Tenant without a charge (other than
through payment of Expenses and Taxes hereunder), to the extent of such excess;
appraisal and accounting fees, disbursements and charges incurred in connection
with disputes with tenants or other occupants of the Building; costs for which
Landlord has received the direct actual reimbursement from any source (other
than reimbursement through payment by tenants of operating expenses and taxes,
such as Expenses and Taxes), to the extent of such actual direct reimbursement;
costs of removal or other remediation of Hazardous Substances (as currently
defined) existing in the Building on the date hereof and required by
environmental Laws in effect on the date hereof; costs incurred by Landlord
resulting directly from Landlord's tortious or negligent or other unlawful
conduct; rental costs relating to leasing Building systems, elevators or other
equipment ordinarily considered to be of a capital nature, except to the extent
such amounts would otherwise have been included as Expenses under Paragraph (a)
below had such systems, elevators or other equipment been purchased by Landlord;
and fines or penalties incurred as a result of any violation by Landlord of any
Law, provided the same is not caused by or the result of any acts or failure to
act on the part of Tenant.
Notwithstanding anything contained in the above definition of Expenses to
the contrary:
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(a) The cost of any capital improvements to the Building (i) which
are intended to reduce Expenses, or (ii) which are required under the ADA,
or (iii) which are required under any other governmental laws, regulations
or ordinances (collectively, the "Governmental Laws"), or (iv) which are
intended to enhance the safety of the Building or its occupants, shall be
included in Expenses in the year of installation and subsequent
Calculation Years as hereinafter set forth; provided that if the Building
is in violation of any such Governmental Laws (as now existing) as of the
date of this lease (i.e., meaning that the Building was obligated to take
action to comply with such Governmental Laws on or before the date of this
lease, and has failed to do so), then the costs of any capital
improvements made to the Building after the date of this lease in order to
cure such violations of Governmental Laws shall not be so included in
Expenses. In any Calculation Year, the portion of the cost of any capital
improvements includable in Expenses as provided in the preceding sentence
shall be the annual amortization of such cost using as the amortization
period such reasonable period as Landlord shall determine, together with
interest on the unamortized cost of any such improvements (at an annual
rate equal to the greater of (i) 11%, or (ii) 2% over the "Prime Rate"
described in Section 28(i) of the lease calculated as of the date the cost
of such improvements was incurred). In the case of loss or damage to the
Project due to fire or other casualty, the costs of repairing, restoring
or replacing any portion of the Project which constitute capital
improvements shall be included in Expenses to the extent of deductible
amounts under insurance policies.
(b) If the office area of the Building is not fully (at least 95%
for the purposes of this paragraph) occupied by tenants during all or a
portion of any Calculation Year, or if during all or a portion of any
Calculation Year, Landlord is not furnishing to any tenant or tenants any
particular service, the cost of which, if furnished by Landlord, would be
included in Expenses, then Landlord may elect to make an appropriate
adjustment in Expenses for the year, by adjusting those components of
Expenses which vary with the occupancy level of the Building, to reflect
the Expenses that would have been paid or incurred by Landlord for such
year had the office area of the Building been 95% occupied by tenants and
services been furnished to all such tenants during such entire Calculation
Year. Any such adjustments shall be deemed costs and expenses paid or
incurred by Landlord and included in Expenses for such year.
(c) If any item of Expenses, though paid or incurred in one calendar
year, relates to more than one calendar year, at the option of Landlord,
such item may be proportionately allocated among such related calendar
years.
11. "GROUND LEASE" and "GROUND LESSOR" shall have the meanings described
in Section 20.
12. "HAZARDOUS SUBSTANCES" shall have the meaning described in Section
9(e).
13. "HOLIDAYS" shall have the meaning described in Section 8(e).
14. "LANDLORD PARTIES" shall have the meaning described in Section 9(e).
C-3
15. "LANDLORD'S EXPENSE STATEMENT" shall have the meaning described in
Section 5(c)(i).
16. "LANDLORD'S TAX STATEMENT" shall have the meaning described in Section
5(c)(ii).
17. "LAWS" shall have the meaning described in Section 6.
18. "MONTHLY BASE RENT" shall have the meaning described in Section 4(a).
19. "MORTGAGE" and "MORTGAGEE" shall have the meanings described in
Section 20.
20. "NEW PREMISES" shall have the meaning described in Section 30.
21. "OUTSIDE DATE" shall have the meaning described in Section 17(a).
22. "PROJECTION NOTICE" shall have the meaning described in Section 5(b).
23. "PROJECTIONS" shall have the meaning described in Section 5(b).
24. "RELEASED PARTIES" shall have the meaning described in Section 16(a).
25. "RENT" shall have the meaning described in Section 3.
26. "RENTABLE AREA" with respect to the Building means the rentable area
of office space at the Building, on a square footage basis, measured in
accordance with the Building Owners and Managers Association International
method of measurement ("BOMA") existing as of the date of this lease (with such
changes to said measurement standards as may be adopted by BOMA from time to
time and as may be utilized, at Landlord's election, for measurement
calculations at the Building).
27. "RENTABLE AREA" with respect to any tenant space at the Building means
rentable area of the applicable tenant space, on a square footage basis,
measured in accordance with the BOMA method of measurement existing as of the
date of this lease (with such changes to such measurement standards as may be
adopted by BOMA from time to time and as may be utilized, at Landlord's
election, for measurement calculations at the Building). Notwithstanding the
foregoing, it is acknowledged and agreed that the Rentable Area of the "27th
Floor Space" (as defined and described in Section 42) includes a full allocation
of the usable area of that certain public corridor area identified on Exhibit A
as "public corridor (tenant excess)", and such full allocation shall apply
notwithstanding anything contained herein or in BOMA to the contrary. Based on
the foregoing, and notwithstanding anything contained herein or in BOMA to the
contrary, the Rentable Area of the Premises as of the date hereof is hereby
stipulated by the parties to be the number of square feet set forth in Section 1
of this lease.
28. "SUCCESSOR" shall have the meaning described in Section 20(c).
29. "TAX ADJUSTMENT" shall have the meaning described in Section 5(a).
C-4
30. "TAXES" shall mean real estate taxes, assessments (whether they be
general or special), sewer rents, rates and charges (to the extent not included
as Expenses), transit taxes, taxes based upon leases or the receipt of rent, and
any other federal, state or local governmental charge, general, special,
ordinary or extraordinary (but not including estate, gift, succession or
inheritance taxes, or any transfer taxes imposed upon Landlord's sale of the
Building, or any income or franchise taxes or any other taxes imposed upon or
measured by the Landlord's income or profits, except as provided herein), which
may now or hereafter be levied, assessed or imposed against the Land or the
Building or Landlord as a result of its ownership of the Project.
Notwithstanding anything contained in the above definition of Taxes to the
contrary:
(a) If at any time the method of taxation then prevailing shall be altered
so that any new or additional tax, assessment, levy, imposition or charge or any
part thereof shall be imposed upon Landlord in place or partly in place of any
Taxes or contemplated increase therein, or in addition to Taxes, and shall be
measured by or be based in whole or in part upon the Project, the rents or other
income therefrom or any leases of any part thereof, then all such new taxes,
assessments, levies, impositions or charges or part thereof, to the extent that
they are so measured or based, shall be included in Taxes levied, assessed or
imposed against the Project to the extent that such items would be payable if
the Project were the only property of Landlord subject thereto and the income
received by Landlord from the Project were the only income of Landlord.
(b) Notwithstanding the year for which any such taxes or assessments are
levied, (i) in the case of special taxes or assessments which may be payable in
installments, the amount of each installment, plus any interest payable thereon,
paid during a Calculation Year shall be included in Taxes for that year and (ii)
if any taxes or assessments payable during any Calculation Year shall be
computed with respect to a period in excess of twelve (12) calendar months, then
taxes or assessments applicable to the excess period shall be included in Taxes
for the Calculation Year when payable. Except as provided in the preceding
sentence, all references to Taxes "for" a particular Calculation Year shall be
deemed to refer to Taxes levied, assessed or otherwise imposed during such
Calculation Year without regard to when such Taxes are payable.
(c) Taxes shall also include any personal property taxes (attributable to
the Calculation Year in which paid) imposed upon the furniture, fixtures,
machinery, equipment, apparatus, systems or appurtenances used in connection
with the Building or the operation thereof.
31. "TENANT'S PROPORTIONATE SHARE" shall mean a fraction, the numerator of
which is the Rentable Area of the Premises, and the denominator of which is the
greater of (i) ninety-five percent (95%) of the Rentable Area of the Building,
and (ii) the total Rentable Area of the Building leased to tenants (with the
calculation under clause (ii) being made by Landlord on a weighted average basis
over the calendar year at issue). If changes are made to this lease, the
Premises, the Building, or BOMA measurement standards utilized for the Building,
changing the rentable area of the Premises or the Building, Landlord may make an
appropriate adjustment to Tenant's Proportionate Share (i.e., based upon the
formula used in calculating Tenant's Proportionate Share as described in the
preceding sentence).
C-5
EXHIBIT D
RULES AND REGULATIONS
(1) No sign, lettering, picture, notice or advertisement shall be placed
on any outside window or in a position to be visible from outside the Premises
and if visible from the outside or public corridors within the Building shall be
installed in such manner and be of such character and style as Landlord shall
approve in writing.
(2) Tenant shall not use the name of the Building for any purpose other
than Tenant's business address; Tenant shall not use the name of the Building
for Tenant's business address after Tenant vacates the Premises; nor shall
Tenant use any picture or likeness of the Building in any circulars, notices,
advertisements or correspondence.
(3) No article which is explosive or inherently dangerous is allowed in
the Building.
(4) Tenant shall not represent itself as being associated with any company
or corporation by which the Building may be known or named.
(5) Sidewalks, entrances, passages, courts, corridors, halls, elevators
and stairways in and about the Premises shall not be obstructed.
(6) No animals (except for dogs in the company of a blind person), pets,
bicycles or other vehicles shall be brought or permitted to be in the Building
or the Premises.
(7) Room-to-room canvasses to solicit business from other tenants of the
Building are not permitted; Tenant shall not advertise the business, profession
or activities of Tenant conducted in the Building in any manner which violates
any code of ethics by any recognized association or organization pertaining to
such business, profession or activities.
(8) Tenant shall not waste electricity, water or air-conditioning and
shall cooperate fully with Landlord to assure the most effective and efficient
operation of the Building's heating and air-conditioning systems.
(9) No locks or similar devices shall be attached to any door except by
Landlord and Landlord shall have the right to retain a key to all such locks.
Tenant may not install any locks without Landlord's prior approval.
(10) Tenant assumes full responsibility of protecting the Premises from
theft, robbery and pilferage; the Indemnitees shall not be liable for damage
thereto or theft or misappropriation thereof. Except during Tenant's normal
business hours, Tenant shall keep all doors to the Premises locked and other
means of entry to the Premises closed and secured. All corridor doors shall
remain closed at all times. If Tenant desires telegraphic, telephones, burglar
alarms or other electronic mechanical devices, then Landlord will, upon request,
direct where and how connections and all wiring for such services shall be
installed and no boring, cutting or installing of wires or cables is permitted
without Landlord's approval.
D-1
(11) Except with the prior approval of Landlord, all cleaning, repairing,
janitorial, decorating, painting or other services and work in and about the
Premises shall be done only by authorized Building personnel.
(12) The weight, size and location of safes, furniture, equipment,
machines and other large or bulky articles shall be subject to Landlord's
approval and shall be brought to the Building and into and out of the Premises
at such times and in such manner as the Landlord shall direct and at Tenant's
sole risk and cost. Prior to Tenant's removal of any of such articles from the
Building, Tenant shall obtain written authorization of the Office of the
Building and shall present such authorization to a designated employee of
Landlord.
(13) Tenant shall not overload the safe capacity of the electrical wiring
of the Building and the Premises or exceed the capacity of the feeders to the
Building or risers.
(14) To the extent permitted by law, Tenant shall not cause or permit
picketing or other activity which would interfere with the business of Landlord
or any other tenant or occupant of the Building, or distribution of written
materials involving its employees in or about the Building, except in those
locations and subject to time and other limitations as to which Landlord may
give prior written consent.
(15) Tenant shall not xxxx, otherwise prepare or sell any food or
beverages in or from the Premises or use the Premises for housing accommodations
or lodging or sleeping purposes except that Tenant may install and maintain
vending machines, coffee/beverage stations and food warming equipment and eating
facilities for the benefit of its employees or guests, provided the same are
maintained in compliance with applicable laws and regulations and do not disturb
other tenants in the Building with odor, refuse or pests.
(16) Tenant shall not permit the use of any apparatus for sound production
or transmission in such manner that the sound so transmitted or produced shall
be audible or vibrations therefrom shall be detectable beyond the Premises; nor
permit objectionable odors or vapors to emanate from the Premises
(17) No floor covering shall be affixed to any floor in the Premises by
means of glue or other adhesive without Landlord's prior written consent.
(18) Tenant shall at all time maintain the window blinds in the lowered
position, though Tenant may keep the louvers open.
(19) Tenant shall only use the freight elevator for mail carts, dollies
and other similar devices for delivering material between floors that Tenant may
occupy.
(20) No smoking, eating, drinking, loitering or laying is permitted in the
common areas of the Building except in designated areas.
(21) Landlord may require that all persons who enter or leave the Building
identify themselves to security guards, by registration or otherwise. Landlord,
however, shall have no
D-2
responsibility or liability for any theft, robbery or other crime in the
Building. Tenant shall assume full responsibility for protecting the Premises,
including keeping all doors to the Premises locked after the close of business.
(22) Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency
and shall cooperate and participate in all reasonable security and safety
programs affecting the Building.
(23) Tenant shall cooperate and participate in all recycling programs
established for the Building by Landlord or any governmental agency.
D-3
EXHIBIT E
CLEANING SPECIFICATIONS
[Attached]
E-1
000 XXXX XXXXXX XXXXX
LEASE CLEANING SPECIFICATIONS
The following are the Building Standard Janitorial Services. Landlord, at his
sole discretion, reserves the right to make adjustments to the schedule of
services:
A. Daily Services - General
1. Empty trash receptacles and remove trash from Premises.
2. Dust all horizontal surfaces, desks, chairs, files, telephones, picture
frames, etc.
3. Damp wash and wipe dry all plastic or formica desk tops.
4. Clean and sanitize drinking fountains.
5. Dust mop and spot clean all tiled areas.
6. Vacuum all carpeted areas.
7. Spot clean glass partitions and glass entry doors.
8. Police stairways.
B. Daily Services - Restrooms
1. Remove trash and clean receptacles.
2. Clean and sanitize lavatories, commodes, powder rooms, and urinals.
3. Clean out corners and edges.
4. Clean mirrors and all metal surfaces.
5. Spot clean wall tile and partitions.
6. Replenish supplies.
7. Sweep floors.
8. Mop and disinfect floors.
C. Daily Services - Elevators
1. Vacuum and spot clean carpets.
2. Clean edges, corners and tracks.
3. Wipe down walls and doors.
4. Clean call buttons.
D. Daily Services - Plaza and Concourse
1. Vacuum carpet areas nightly.
2. Dust mop and damp mop all public areas.
3. Spot clean walls, columns, directory boards, signs, and security
console.
4. Empty and clean cigarette urns.
5. Dust all horizontal surfaces.
6. Clean escalators.
7. Clean glass entry doors, spot clean windows.
E-2
E. Weekly Services - General
1. Damp mop all tile floors.
F. Weekly Services - Elevators
1. Shampoo carpets.
G. Weekly Services - Plaza and Concourse
1. Machine buff all hard surfaced floors.
2. Clean escalators.
H. Weekly Services - Stairwells
1. Sweep all stairs and landings.
2. Dust doors, handrails, fire equipment, and communication devices.
I. Monthly Services - General
1. Buff all uncarpeted areas
2. High dusting of all vertical surfaces.
J. Monthly Services - Restrooms
1. Buff all tiled floors.
2. Spot clean walls, partitions and fixtures for water marks.
3. High dusting of all vertical surfaces.
K. Quarterly Services - General
1. Strip and recoat all the floors.
2. Clean all venetian blinds.
L. Quarterly Services - Restrooms
1. Wash down all restroom walls and partitions.
M. Quarterly Services - Stairwells
1. High dusting of door closures, smoke dampers, etc.
N. Annual Services
1. Clean all fluorescent light fixtures.
2. Wet mop and dry all stairwells.
O. Exterior
1. Police building perimeter for trash daily.
2. Clean benches daily.
E-3
3. Wash down sidewalks daily or as needed.
4. Machine scrub sidewalks weekly.
5. Clean exterior stairwells weekly.
P. Day Cleaning
1. Spot clean doors, directory board and windows in Plaza.
2. Sweep and pick up litter in elevator cabs.
3. Police restrooms and replenish restrooms supplies.
4. Police dock.
5. Clean cigarette urns.
Q. Window Cleaning
1. Clean exterior windows four (4) times per year.
2. Clean Plaza windows once per week.
R. Services as Required
1. Spot clean carpeted areas.
2. Shampoo public areas outside tenant space.
3. Shampoo elevator carpets.
E-4
EXHIBIT F
EXISTING 10% PLANS
None.
F-1
EXHIBIT G
DESCRIPTION OF EXISTING FF&E
28th Floor
(45) Steelcase "Answer" workstations (4 workspaces each)
(4) Steelcase "Answer" workstations (3 workspaces each)
(187) Steelcase 2 drawer file cabinets
(3) Steelcase lateral filing cabinets
(21) Conference chairs (rolling)
(2) Office chairs (non-rolling)
(2) 3'x6' (4' tall) tables
(5) 3-Wall office desks
(1) Round office table
(4) Telecom racks
(1) Ice maker
(1) GE Dishwasher
(2) Fire Extinguishers
(2) 3 ton XxXxxx supplemental HVAC units (SE side)
(2) Powersmith current conditioner transformers (NW & SE sides)
27th Floor within premises
(18) Steelcase "Answer" workstations (4 workspaces each) - dismantled
(1) Steelcase "Answer" workstations (3 workspaces each) - dismantled
(17) Steelcase lateral filing cabinets
(1) Boardroom conference table (3 pieces)
(2) Conference room tables
(25) Conference chairs (rolling)
(3) Office chairs (non-rolling)
(2) Fire extinguishers
(1) 5 ton Liebert supplemental HVAC unit (server room)
(1) Cardkey access system (server room)
(1) Notifier Pre-Action System (storage room - serving server room)
27th Floor outside premises
(18) Steelcase "Answer" workstations (4 workspaces each)
(1) Steelcase "Answer" workstations (3 workspaces each)
(133) Steelcase 2 drawer file cabinets
(1) Steelcase lateral filing cabinets
(58) Conference chairs (rolling)
(12) Office chairs (non-rolling)
(13) Conference room tables
(6) 3-Wall office desks
(11) Round office tables
G-1
(1) Tall round breakroom table
(1) Freestanding shelf
(5) Telecom racks
(1) GE Refrigerator
(5) Fire extinguishers
(2) Current Technology 150 current conditioner (NE & SW sides) -
Possible relocation pending evaluation of impact and Landlord approval.
G-2
