Exhibit 10.11
LEASE
--------------------
GREAT LAKES REIT, INC., LANDLORD
and
AKSYS, LTD., TENANT
TABLE OF CONTENTS
ARTICLE
1. USE AND RESTRICTIONS ON USE..............................................
2. TERM.....................................................................
3. RENT.....................................................................
4. RENT ADJUSTMENTS.........................................................
5. SECURITY DEPOSIT.........................................................
6. ALTERATIONS..............................................................
7. REPAIR...................................................................
8. LIENS....................................................................
9. ASSIGNMENT AND SUBLETTING................................................
10. INDEMNIFICATION..........................................................
11. INSURANCE................................................................
12. WAIVER OF SUBROGATION....................................................
13. SERVICES AND UTILITIES...................................................
14. HOLDING OVER.............................................................
15. SUBORDINATION............................................................
16. RULES AND REGULATIONS....................................................
17. REENTRY BY LANDLORD......................................................
18. DEFAULT..................................................................
19. REMEDIES..................................................................
20. TENANT'S BANKRUPTCY OR INSOLVENCY.........................................
21. QUIET ENJOYMENT...........................................................
22. DAMAGE BY FIRE, ETC.......................................................
23. EMINENT DOMAIN............................................................
24. SALE BY LANDLORD..........................................................
25. ESTOPPEL CERTIFICATES.....................................................
26. SURRENDER OF PREMISES.....................................................
27. NOTICES...................................................................
28. TAXES PAYABLE BY TENANT...................................................
29. OPTION TO TERMINATE.......................................................
30. DEFINED TERMS AND HEADINGS................................................
31. TENANT'S AUTHORITY........................................................
32. COMMISSIONS...............................................................
33. TIME AND APPLICABLE LAW...................................................
34. SUCCESSORS AND ASSIGNS....................................................
35. ENTIRE AGREEMENT..........................................................
36. EXAMINATION NOT OPTION....................................................
37. RECORDATION...............................................................
38. LIMITATION OF LANDLORD'S LIABILITY........................................
39. GOVERNMENTAL APPROVALS....................................................
EXHIBIT A - PREMISES
EXHIBIT B - INITIAL ALTERATIONS
EXHIBIT C - RULES AND REGULATIONS
NET OFFICE LEASE
REFERENCE PAGE
BUILDING: Two Marriott Drive
Lincolnshire, Illinois
LANDLORD: Great Lakes REIT, Inc., a Maryland
corporation
LANDLORD'S ADDRESS: 000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
LANDLORD'S FAX NUMBER: (000) 000 0000
LEASE REFERENCE DATE: July 15, 1996
TENANT: Aksys, Ltd., a Delaware corporation
TENANT'S ADDRESS: Xxx Xxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxx
TENANT'S FAX NUMBER: (000) 000 0000
PREMISES RENTABLE AREA: Approximately 41,500 sq. ft.
SCHEDULED COMMENCEMENT DATE: September 1, 1996
TERMINATION DATE: August 31, 2006
TERM OF LEASE: 10 years and 0 months beginning on the
Commencement Date and ending on the
Termination Date (unless sooner terminated
pursuant to the Lease)
SCHEDULE OF BASE RENT:
Period Annual Rent Monthly Installment of Annual Rent
------ ----------- ----------------------------------
9/1/96 - 8/31/97 $337,500.00 $28,125.00
9/1/97 - 8/31/98 $341,250.00 $28,437.50
9/1/98 - 8/31/99 $369,350.00 $30,779.17
9/1/99 - 8/31/00 $380,555.00 $31,712.92
9/1/00 - 8/31/01 $391,760.00 $32,646.67
9/1/01 - 8/31/02 $403,795.00 $33,649.58
9/1/02 - 8/31/03 $415,830.00 $34,652.50
9/1/03 - 8/31/04 $428,280.00 $35,690.00
9/1/04 - 8/31/05 $441,145.00 $36,762.08
9/1/05 - 8/31/06 $454,425.00 $37,868.75
SECURITY DEPOSIT: $780,000 (subject to reduction as provided
in Article 5)
ASSIGNMENT/SUBLETTING FEE $500.00
REAL ESTATE BROKER DUE COMMISSION: Xxxxxxx & Xxxxxxxxx
The Reference Page information is incorporated into and made a part of the
Lease. In the event of any conflict between any Reference Page information and
the Lease, the Lease shall control. This Lease includes Exhibits A through C,
all of which are made a part of this Lease.
LANDLORD: TENANT:
Great Lakes REIT, Inc., a Maryland Aksys, Ltd., a Delaware corporation
corporation
By: /s/Great Lakes REIT, Inc. By: /s/ Xxxxxx X. Xxxxxx
------------------------- ---------------------
Title: Senior Vice President Title: President and COO
--------------------- -----------------
Dated: July 24, 1996 Dated: July 27, 1996
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LEASE
By this Lease Landlord leases to Tenant and Tenant leases from Landlord the
Premises in the Building as set forth and described on the Reference Page. The
Reference Page, including all terms defined thereon, is incorporated as part of
this Lease.
1. USE AND RESTRICTIONS ON USE
1.1 The Premises are to be used solely for general office purposes except
that not more than 10,000 square feet may be used for laboratory purposes unless
otherwise agreed in writing. Tenant shall not allow the Premises to be used for
any improper, immoral, unlawful, or objectionable purpose. Tenant shall not do,
permit or suffer in, on, or about the Premises the sale of any alcoholic liquor
without the written consent of Landlord first obtained, or the commission of any
waste. Tenant shall comply with all governmental laws, ordinances and
regulations applicable to the use of the Premises and its occupancy and shall
promptly comply with all governmental orders and directions for the correction,
prevention and abatement of any violations in or upon, or in connection with,
the Premises, all at Tenant's sole expense. Tenant shall not do or permit
anything to be done on or about the Premises or bring or keep anything into the
Premises which will in any way increase the rate of, invalidate or prevent the
procuring of any insurance protecting against loss or damage to the Building or
any of its contents by fire or other casualty or against liability for damage to
property or injury to persons in or about the Building or any part thereof.
1.2 Tenant agrees that Tenant, its agents and contractors, licensees, or
invitees shall not handle, use, manufacture, store or dispose of any flammables,
explosives, radioactive materials, hazardous wastes or materials, toxic wastes
or materials, medical wastes or other similar substances, petroleum products or
derivatives (collectively "Hazardous Materials") on, under, or about the
Premises, without Landlord's prior written consent (which consent shall not be
unreasonably withheld as long as Tenant demonstrates and documents to Landlord's
reasonable satisfaction (i) that such Hazardous Materials (A) are necessary or
useful to Tenant's business; and (B) will be used, kept, and stored in
compliance with all laws relating to any Hazardous Materials so brought or used
or kept in or about the Premises; and (ii) that Tenant will give all required
notices concerning the presence in or on the Premises or the release of such
Hazardous Materials from the Premises) provided that Tenant may handle, store,
use or dispose of products containing small quantities of Hazardous Materials,
which products are of a type customarily found in offices and households (such
as aerosol cans containing insecticides, toner for copies, paints, paint
remover, and the like), provided further that Tenant shall handle, store, use
and dispose of any such Hazardous Materials in a safe and lawful manner and
shall not allow such Hazardous Materials to contaminate the Premises or the
environment.
Tenant further agrees that Tenant will not permit any substance to come
into contact with groundwater under the Premises. Any such substance coming
into contact with groundwater shall, regardless of its inherent hazardous
characteristics, be considered a Hazardous Material for purposes of this Lease.
Notwithstanding the provisions of Paragraph 1.2, Tenant may handle, store,
and use Hazardous Materials, limited to the types, amounts, and use identified
in the Hazardous Materials Exhibit attached hereto. If no Hazardous Materials
Exhibit is attached to this Lease, then this paragraph of Paragraph 1.2 shall be
of no force and effect. Tenant hereby certifies to Landlord that the
information provided by Tenant pursuant to this paragraph is true, correct, and
complete. Tenant covenants to comply with the use restrictions shown on the
attached Hazardous Materials Exhibit. Tenant's business and operations, and
more especially its handling, storage, use and disposal of Hazardous Materials
shall at all times comply with all applicable laws pertaining to Hazardous
Materials. Tenant shall secure and abide by all permits necessary for Tenant's
operations on the Premises. Tenant shall give or post all notices required by
all applicable laws pertaining to Hazardous Materials. If Tenant shall at any
time fail to comply with this Paragraph, Tenant shall immediately notify
Landlord in writing of such noncompliance.
Tenant shall provide Landlord with copies of any Material Safety Data
Sheets (as required by the Occupational Safety and Health Act) relating to any
Hazardous Materials to be used, kept, or stored at or on the Premises, at least
5 business days prior to the first use, placement, or storage of such Hazardous
Material on the Premises (except in the case of an emergency). Landlord shall
have 5 business days (except in the case of an emergency in which case Landlord
shall have 24 hours) following delivery of such Material Safety Data Sheets to
approve or forbid, in its sole discretion subject to the limitation contained
above, such use, placement, or storage of a Hazardous Material on the Premises.
Tenant shall not store hazardous wastes on the premises for more than 90
days; "hazardous waste" has the meaning given it by the Resource Conservation
and Recovery Act of 1976, as amended. Tenant shall not install any underground
or above ground storage tanks on the Premises. Tenant shall not dispose of any
Hazardous Material or solid waste on the Premises. In performing any
alterations of the Premises permitted by the Lease, Tenant shall not install any
Hazardous Material in the Premises without the specific consent of Landlord
attached as an exhibit to this Lease.
Any increase in the premiums for necessary insurance on the Property which
arises from Tenant's use and/or storage of Hazardous Materials shall be solely
at Tenant's expense. Tenant shall procure and maintain at its sole expense such
additional insurance as may be necessary to comply with any requirement of any
Federal, State or local governmental agency with jurisdiction.
If Landlord, in its sole discretion, believes that the Premises or the
environment have become contaminated with Hazardous Materials or similar
materials that must be removed under
the laws of the state where the Premises are located, in breach of the
provisions of this Lease, Landlord, in addition to its other rights under this
Lease, may enter upon the Premises and obtain samples from the Premises,
including without limitation the soil and groundwater under the Premises, for
the purposes of analyzing the same to determine whether and to what extent the
Premises or the environment have become so contaminated. Tenant shall reimburse
Landlord for the costs of any inspection, sampling and analysis that discloses
contamination for which Tenant is liable under the terms of this Lease. Tenant
may not perform any sampling, testing, or drilling to locate any Hazardous
Materials on the Premises without Landlord's prior written consent.
Without limiting the above, Tenant shall reimburse, defend, indemnify and
hold Landlord harmless from and against any and all claims, losses, liabilities,
damages, costs and expenses, including without limitation, loss of rental
income, loss due to business interruption, and attorneys fees and costs, arising
out of or in any way connected with the use, manufacture, storage, or disposal
of Hazardous Materials by Tenant, its agents or contractors on, under or about
the Premises including, without limitation, the costs of any required or
necessary investigation, repair, cleanup or detoxification and the preparation
of any closure or other required plans in connection herewith, whether voluntary
or compelled by governmental authority. The indemnity obligations of Tenant
under this clause shall survive any termination of the Lease. At Landlord's
option, Tenant shall perform any required or necessary investigation, repair,
cleanup, or detoxification of the Premises. In such case, Landlord shall have
the right, in its sole discretion, to approve all plans, consultants, and
cleanup standards. Tenant shall provide Landlord on a timely basis with (i)
copies of all documents, reports, and communications with governmental
authorities; and (ii) notice and an opportunity to attend all meetings with
regulatory authorities. Tenant shall comply with all notice requirements and
Landlord and Tenant agree to cooperate with governmental authorities seeking
access to the Premises for purposes of sampling or inspection. No disturbance
of Tenant's use of the Premises resulting from activities conducted pursuant to
this Paragraph shall constitute an actual or constructive eviction of Tenant
from the Premises. In the event that such cleanup extends beyond the
termination of the Lease, Tenant's obligation to pay rent (including additional
rent and percentage rent, if any) shall continue until such cleanup is completed
and any certificate of clearance or similar document has been delivered to
Landlord. Rent during such holdover period shall be at market rent; if the
parties are unable to agree upon the amount of such market rent, then Landlord
shall have the option of (a) increasing the rent for the period of such holdover
based upon the increase in the cost-of-living from the third month preceding the
commencement date to the third month preceding the start of the holdover period,
using such indices and assumptions and calculations as Landlord in its sole
reasonable judgement shall determine are necessary; or (b) having Landlord and
Tenant each appoint a qualified MAI appraiser doing business in the area; in
turn, these two independent MAI appraisers shall appoint a third MAI appraiser
and the majority shall decide upon the fair market rental for Premises as of the
expiration of the then current term. Landlord and Tenant shall equally share in
the expense of this appraisal except that in the event the rent is found to be
within fifteen percent of the original rate quoted by Landlord, then Tenant
shall bear the full cost of all the appraisal process. In no event shall the
rent be subject to determination or modification by any person, entity, court,
or
authority other than as set forth expressly herein, and in no event shall the
rent for any holdover period be less that the rent due in the preceding period.
Notwithstanding anything set forth in this Lease, Tenant shall only be
responsible for contamination of Hazardous Materials or any cleanup resulting
directly therefrom, resulting directly from matters occurring or Hazardous
Materials deposited (other than by contractors, agents or representatives
controlled by Landlord) during the Lease term, and any other period of time
during which Tenant is in actual or constructive occupancy of the Premises.
Tenant shall take reasonable precautions to prevent the contamination of the
Premise with Hazardous Materials by third parties.
It shall not be unreasonable for Landlord to withhold its consent to any
proposed assignment or sublease if (i) the proposed assignee's or sublessee's
anticipated use of the premises involves the generation, storage, use, treatment
or disposal of Hazardous Materials; (ii) the proposed assignee or sublessee has
been required by any prior landlord, lender, or governmental authority to take
remedial action in connection with Hazardous Materials contaminating a property
if the contamination resulted from such assignee's or sublessee's actions or use
of the property in question; or (iii) the proposed assignee or sublessee is
subject to an enforcement order issued by any governmental authority in
connection with the use, disposal, or storage of a hazardous material.
Any of Tenant's insurance insuring against claims of the type dealt with in
this Paragraph 1.2 shall be considered primary coverage for claims against the
Property arising out of or under this paragraph.
In the event of (i) any transfer of Tenant's interest under this Lease; or
(ii) the termination of this Lease, by lapse of time or otherwise, Tenant shall
be solely responsible for compliance with any and all then effective federal,
state or local laws concerning (i) the physical condition of the Premises,
Building, or Property; or (ii) the presence of hazardous or toxic materials in
or on the Premises, Building, or Property (for example, the New Jersey
Environmental Cleanup Responsibility Act, the Illinois Responsible Property
Transfer Act, or similar applicable state laws), including but not limited to
any reporting or filing requirements imposed by such laws. Tenant's duty to pay
rent, additional rent, and percentage rent shall continue until the obligations
imposed by such laws are satisfied in full and any certificate of clearance or
similar document has been delivered to Landlord.
All consents given by Landlord pursuant to this Paragraph 1.2 shall be in
writing and shall be attached as amendments to this Lease. If such consents are
not attached to this Lease, then such consents will be deemed withheld.
2. TERM.
2.1 The Term of this Lease shall begin on the date ("Commencement Date")
which shall be the later of the Scheduled Commencement Date as shown on the
Reference Page and the date that Landlord shall tender possession of the
Premises to Tenant. Landlord shall tender possession of the Premises with all
the work, if any, to be performed by Landlord pursuant to Exhibit B to this
Lease substantially completed. Landlord and Tenant shall execute a memorandum
setting forth the actual Commencement Date and Termination Date.
2.2 In the event Landlord shall permit Tenant to occupy the Premises
prior to the Commencement Date, such occupancy shall be subject to all the
provisions of this Lease. Said early possession shall not advance the
Termination Date.
3. RENT.
3.1 Tenant agrees to pay to Landlord the Annual Rent in effect from time
to time by paying the Monthly Installment of Rent then in effect on or before
the first day of each full calendar month during the Term, except that the first
month's rent shall be paid upon the execution of this Lease. The Monthly
Installment of Rent in effect at any time shall be one-twelfth of the Annual
Rent in effect at such time. Rent for any period during the Term which is less
than a full month shall be a prorated portion of the Monthly Installment of Rent
based upon a thirty (30) day month. Said rent shall be paid to Landlord,
without deduction or offset and without notice or demand, at the Landlord's
address, as set forth on the Reference Page, or to such other person or at such
other place as Landlord may from time to time designate in writing.
3.2 Tenant recognizes that late payment of any rent or other sum due
under this Lease will result in administrative expense to Landlord, the extent
of which additional expense is extremely difficult and economically impractical
to ascertain. Tenant therefore agrees that if rent or any other sum is not paid
when due and payable pursuant to this Lease, a late charge shall be imposed in
an amount equal to the greater of: (a) Fifty Dollars ($50.00), or (b) a sum
equal to five percent (5%) per month of the unpaid rent or other payment. The
amount of the late charge to be paid by Tenant shall be reassessed and added to
Tenant's obligation for each successive monthly period until paid. The
provisions of this Section 3.2 in no way relieve Tenant of the obligation to pay
rent or other payments on or before the date on which they are due, nor do the
terms of this Section 3.2 in any way affect Landlord's remedies pursuant to
Article 19 of this Lease in the event said rent or other payment is unpaid after
date due.
4. RENT ADJUSTMENTS.
4.1 For the purpose of this Article 4, the following terms are defined as
follows:
4.1.1 Lease Year: Each calendar year falling partly or wholly
within the Term.
4.1.2 Direct Expenses: All direct costs of operation, maintenance,
repair and management of the Building (including the amount of any credits which
Landlord may grant to particular tenants of the Building in lieu of providing
any standard services or paying any standard costs described in this Section
4.1.2 for similar tenants), as determined in accordance with generally accepted
accounting principles, including the following costs by way of illustration, but
not limitation: water and sewer charges; insurance charges of or relating to
all insurance policies and endorsements deemed by Landlord to be reasonably
necessary or desirable and relating in any manner to the protection,
preservation, or operation of the Building or any part thereof; utility costs,
including, but not limited to, the cost of heat, light, power, steam, gas, and
waste disposal; the cost of security and alarm services; window cleaning costs;
labor costs (including Landlord's employees at Landlord's then standard hourly
charge for time spent at the Building); costs and expenses of managing the
Building including management fees (at the rate of 2% of Annual Rent); air
conditioning maintenance costs; elevator maintenance fees and supplies; material
costs; equipment costs including the cost of maintenance, repair and service
agreements and rental and leasing costs; purchase costs of equipment other than
capital items; current rental and leasing costs of items which would be
amortizable capital items if purchased; tool costs; licenses, permits and
inspection fees; wages, salaries; employee benefits and payroll taxes (at
Landlord's then standard rates for time spent at the Building); accounting and
legal fees; any sales, use or service taxes incurred in connection therewith.
Direct Expenses shall not include depreciation or amortization of the Building
or equipment in the Building except as provided herein, loan principal payments,
costs of alterations of tenants' premises, leasing commissions, interest
expenses on long-term borrowings, advertising costs or management salaries for
executive personnel other than personnel located at the Building. In addition,
Landlord shall be entitled to amortize and include as an additional rental
adjustment: (i) an allocable portion of the cost of capital improvement items
which are reasonably calculated to reduce operating expenses; (ii) fire
sprinklers and suppression systems and other life safety systems; and (iii)
other capital expenses which are required under any governmental laws,
regulations or ordinances which were not applicable to the Building at the time
it was constructed. All such costs shall be amortized over the reasonable life
of such improvements in accordance with such reasonable life and amortization
schedules as shall be determined by Landlord in accordance with generally
accepted accounting principles, with interest on the unamortized amount at one
percent (1%) in excess of the prime lending rate announced from time to time as
such by The Northern Trust Company of Chicago, Illinois. Landlord will, at
Tenant's request, provide Tenant on or before December 1 of any year during the
Term with a budget of expected Direct Expenses for the following year for
Tenant's approval and will consult with Tenant thereafter concerning the budget.
Tenant agrees that its approval will not be unreasonably withheld or delayed.
If Landlord and Tenant cannot agree on the budget, Landlord may proceed on the
basis of its original budget proposal (as it may have been modified in the
course of consultations with Tenant) provided the budgeted Direct Expenses on a
per square foot basis are reasonably equivalent to similar charges for other
comparable buildings in the market area of the Building. Once approved,
Landlord may not exceed the total budgeted Direct Expenses by more than 5%
without the approval of Tenant,
which approval will not be unreasonably withheld or delayed.
4.1.3 Taxes: Real estate taxes and any other taxes, charges and
assessments which are levied with respect to the Building or the land
appurtenant to the Building, or with respect to any improvements, fixtures and
equipment or other property of Landlord, real or personal, located in the
Building and used in connection with the operation of the Building and said
land, any payments to any ground lessor in reimbursement of tax payments made by
such lessor; and all fees, expenses and costs incurred by Landlord in
investigating, protesting, contesting or in any way seeking to reduce or avoid
increase in any assessments, levies or the tax rate pertaining to any Taxes to
be paid by Landlord in any Lease Year. Landlord agrees that it will protest or
contest Taxes if Tenant so requests. Taxes shall not include any corporate
franchise, or estate, inheritance or net income tax, or tax imposed upon any
transfer by Landlord of its interest in this Lease or the Building.
4.2 Tenant shall pay as additional rent for each Lease Year all Direct
Expenses and Taxes incurred for such Lease Year.
4.3 The annual determination of Direct Expenses shall be made by Landlord
and if certified by a nationally recognized firm of public accountants selected
by Landlord shall be binding upon Landlord and Tenant. Tenant may review the
books and records supporting such determination in the office of Landlord, or
Landlord's agent, during normal business hours, upon giving Landlord five (5)
days advance written notice within sixty (60) days after receipt of such
determination, but in no event more often than once in any one year period. In
the event that during all or any portion of any Lease Year, the Building is not
fully rented and occupied Landlord may make any appropriate adjustment in
occupancy-related Direct Expenses for such year for the purpose of avoiding
distortion of the amount of such Direct Expenses to be attributed to Tenant by
reason of variation in total occupancy of the Building, by employing sound
accounting and management principles to determine Direct Expenses that would
have been paid or incurred by Landlord had the Building been fully rented and
occupied, and the amount so determined shall be deemed to have been Direct
Expenses for such Lease Year.
4.4 Prior to the actual determination thereof for a Lease Year, Landlord
may from time to time estimate Tenant's liability for Direct Expenses and/or
Taxes under Section 4.2, Article 6 and Article 29 for the Lease Year or portion
thereof. Landlord will give Tenant written notification of the amount of such
estimate and Tenant agrees that it will pay, by increase of its Monthly
Installments of Rent due in such Lease Year, additional rent in the amount of
such estimate. Any such increased rate of Monthly Installments of Rent pursuant
to this Section 4.4 shall remain in effect until further written notification to
Tenant pursuant hereto.
4.5 When the above mentioned actual determination of Tenant's liability
for Direct Expenses and/or Taxes is made for any Lease Year and when Tenant is
so notified in writing, then:
4.5.1 If the total additional rent Tenant actually paid pursuant to
Section 4.3 on
account of Direct Expenses and/or Taxes for the Lease Year is less than Tenant's
liability for Direct Expenses and/or Taxes, then Tenant shall pay such
deficiency to Landlord as additional rent in one lump sum within thirty (30)
days of receipt of Landlord's xxxx therefor; and
4.5.2 If the total additional rent Tenant actually paid pursuant to
Section 4.3 on account of Direct Expenses and/or Taxes for the Lease Year is
more than Tenant's liability for Direct Expenses and/or Taxes, then Landlord
shall credit the difference against the then next due payments to be made by
Tenant under this Article 4.
4.6 If the Commencement Date is other than January 1 or if the
Termination Date is other than December 31, Tenant's liability for Direct
Expenses and Taxes for the Lease Year in which said Date occurs shall be
prorated based upon a three hundred sixty-five (365) day year.
5. SECURITY DEPOSIT. Tenant shall deposit the Security Deposit in the form of
cash or a letter of credit with Landlord upon the execution of this Lease. Said
sum shall be held by Landlord as security for the faithful performance by Tenant
of all the terms, covenants and conditions of this Lease to be kept and
performed by Tenant and not as an advance rental deposit or as a measure of
Landlord's damage in case of Tenant's default. If Tenant defaults with respect
to any provision of this Lease, Landlord may use any part of the Security
Deposit (or draw such amount under the letter of credit) for the payment of any
rent or any other sum in default, or for the payment of any amount which
Landlord may spend or become obligated 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 is so used, Tenant shall within
five (5) days after written demand therefor, deposit with Landlord an amount
sufficient to restore the Security Deposit to its original amount (or restore
the balance of the letter of credit) and Tenant's failure to do so shall be a
material breach of this Lease. Except to such extent, if any, as shall be
required by law, Landlord shall not be required to keep the Security Deposit
separate from its general funds, and Tenant shall not be entitled to interest on
such deposit. If Tenant shall fully and faithfully perform every provision of
this Lease to be performed by it, the Security Deposit or any balance thereof
shall be returned to Tenant at such time after termination of this Lease when
Landlord shall have determined that all of Tenant's obligations under this Lease
have been fulfilled.
Any letter of credit shall be issued by a bank reasonably acceptable to
Landlord, shall be drawable by Landlord solely upon presentation of a statement
from Landlord that the amount drawn is due and payable under the Lease, shall
allow for partial draws, and shall otherwise be in form and substance reasonably
acceptable to Landlord. The letter of credit shall have an expiry date not
earlier than one month after the Termination Date of the Lease or shall be
replaced by Tenant not less than thirty (30) days prior to its expiry date with
another letter having an expiry date at least one year later. If Tenant fails to
replace an expiring letter of credit or restore the letter of credit to its full
amount following a draw by Landlord, Landlord may draw the full amount of the
letter of credit and treat such amount as cash Security Deposit. In the event
of a
transfer of Landlord's interest in the Lease, Tenant will promptly deposit
a replacement letter of credit drawable by Landlord's successor and if Tenant
shall fail to do so within ten (10) days of Landlord's request, Landlord may
draw the full amount of the letter of credit and treat such amount as a cash
Security Deposit.
Notwithstanding the above, if Tenant shall fully and faithfully perform
every provision of this Lease to be performed by it as of each of the applicable
dates set forth below, the Security Deposit shall be reduced (or the maximum
amount drawable under the letter of credit shall be reduced) on each applicable
date as follows:
(i) On the date which is ten (10) days after Tenant delivers to Landlord
evidence reasonably satisfactory to Landlord that Tenant has obtained all
required Federal Drug Administration approvals to begin marketing a new medical
device which includes the Aksys PHD system (as described in its Form S-1 filed
with the Securities and Exchange Commission on March 18, 1996), the Security
Deposit shall be reduced to $600,000; and
(ii) For each fiscal year of Tenant beginning thereafter in which Tenant's
net income from continuing operations is greater than $2,000,000 (as evidenced
by its audited financial statement), the Security Deposit shall be reduced by
$150,000 for each $2,000,000 increment of net income from continuing operations,
such reduction to be effective as the of date which is ten (10) days after such
financial statements are delivered to Landlord.
6. ALTERATIONS.
6.1 Except for those, if any, specifically provided for in Exhibit B to
this Lease, Tenant shall not make or suffer to be made any alterations,
additions, or improvements, including, but not limited to, the attachment of any
fixtures or equipment in, on, or to the Premises or any part thereof or the
making of any improvements as required by Article 7, without the prior written
consent of Landlord. When applying for such consent, Tenant shall, if requested
by Landlord, furnish complete plans and specifications for such alterations,
additions and improvements.
6.2 In the event Landlord consents to the making of any such alteration,
addition or improvement by Tenant, the same shall be made using a contractor
reasonably acceptable to Landlord at Tenant's sole cost and expense. If Tenant
shall employ any Contractor other than Landlord's Contractor and such other
Contractor or any Subcontractor of such other Contractor shall employ any non-
union labor or supplier, Tenant shall be responsible for and hold Landlord
harmless from any and all delays, damages and extra costs suffered by Landlord
as a result of any dispute with any labor unions concerning the wage, hours,
terms or conditions of the employment of any such labor. In any event Landlord
may charge Tenant a reasonable charge to cover its overhead as it relates to
such proposed work.
6.3 All alterations, additions or improvements proposed by Tenant shall
be constructed
in accordance with all government laws, ordinances, rules and regulations and
Tenant shall, prior to construction, provide the additional insurance required
under Article 11 in such case, and also all such assurances to Landlord,
including but not limited to, waivers of lien, surety company performance bonds
and personal guaranties of individuals of substance as Landlord shall require to
assure payment of the costs thereof and to protect Landlord and the Building and
appurtenant land against any loss from any mechanic's, materialmen's or other
liens. Tenant shall pay in addition to any sums due pursuant to Article 4, any
increase in real estate taxes attributable to any such alteration, addition or
improvement for so long, during the Term, as such increase is ascertainable; at
Landlord's election said sums shall be paid in the same way as sums due under
Article 4.
6.4 All alterations, additions, and improvements in, on, or to the
Premises made or installed by Tenant, including carpeting, shall be and remain
the property of Tenant during the Term but, excepting furniture, furnishings,
movable partitions of less than full height from floor to ceiling and other
trade fixtures, shall become a part of the realty and belong to Landlord without
compensation to Tenant upon the expiration or sooner termination of the Term, at
which time title shall pass to Landlord under this Lease as by a xxxx of sale,
unless Landlord elects otherwise. Upon such election by Landlord, Tenant shall
upon demand by Landlord, at Tenant's sole cost and expense, forthwith and with
all due diligence remove any such alterations, additions or improvements which
are designated by Landlord to be removed, and Tenant shall forthwith and with
all due diligence, at its sole cost and expense, repair and restore the Premises
to their original condition, reasonable wear and tear and damage by fire or
other casualty excepted. Landlord will, if requested by Tenant at the time
Tenant seeks Landlord's approval of any alterations, additions, and
improvements, inform Tenant at the time of granting its approval whether such
alterations, additions, and improvements will be required to be removed at the
end of the Term. Notwithstanding the above, Landlord agrees that Tenant shall
have no obligation to remove any installations, additions, or improvements which
are of a type customarily found in offices and which are part of the tenant
improvements initially constructed by Tenant; Tenant shall remove, if Landlord
so requests, all voice and data cabling and all improvements connected with any
laboratories and will level and restore the floors.
7. REPAIR.
7.1 Landlord shall have no obligation to alter, remodel, improve, repair,
decorate or paint the Premises, except as specified in Exhibit B if attached to
this Lease and except that Landlord shall repair and maintain the structural
portions of the Building, including the basic plumbing, roof, air conditioning,
heating and electrical systems installed or furnished by Landlord. By taking
possession of the Premises, Tenant accepts them as being in good order,
condition and repair and in the condition in which Landlord is obligated to
deliver them. It is hereby understood and agreed that no representations
respecting the condition of the Premises or the Building have been made by
Landlord to Tenant, except as specifically set forth in this Lease. Tenant has
no authority to go upon the roof or make any cuts or holes in the roof without
the
prior written consent of the Landlord.
7.2 Tenant shall, at all times during the Term, keep the Premises in good
condition and repair excepting damage by fire, or other casualty, and in
compliance with all applicable governmental laws, ordinances and regulations,
promptly complying with all governmental orders and directives for the
correction, prevention and abatement of any violations or nuisances in or upon,
or connected with, the Premises, all at Tenant's sole expense.
7.3 Landlord shall not be liable for any failure to make any repairs or
to perform any maintenance unless such failure shall persist for an unreasonable
time after written notice of the need of such repairs or maintenance is given to
Landlord by Tenant.
7.4 Except as provided in Article 22, there shall be no abatement of rent
and no liability of Landlord by reason of any injury to or interference with
Tenant's business arising from the making of any repairs, alterations or
improvements in or to any portion of the Building or the Premises or to
fixtures, appurtenances and equipment in the Building. Except to the extent, if
any, prohibited by law, Tenant waives the right to make repairs at Landlord's
expense under any law, statute or ordinance now or hereafter in effect.
8. LIENS. Tenant shall keep the Premises, the Building and appurtenant land
and Tenant's leasehold interest in the Premises free from any liens arising out
of any services, work or materials performed, furnished, or contracted for by
Tenant, or obligations incurred by Tenant. In the event that Tenant shall not,
within ten (10) days following the imposition of any such lien, either cause the
same to be released of record or provide Landlord with insurance against the
same issued by a major title insurance company or such other protection against
the same as Landlord shall accept, Landlord shall have the right to cause the
same to be released by such means as it shall deem proper, including payment of
the claim giving rise to such lien. All such sums paid by Landlord and all
expenses incurred by it in connection therewith shall be considered additional
rent and shall be payable to it by Tenant on demand.
9. ASSIGNMENT AND SUBLETTING.
9.1 Tenant shall not have the right to assign or pledge this Lease or to
sublet the whole or any part of the Premises whether voluntarily or by operation
of law, or permit the use or occupancy of the Premises by anyone other than
Tenant, and shall not make, suffer or permit such assignment, subleasing or
occupancy without the prior written consent of Landlord, which shall not be
unreasonably withheld, and said restrictions shall be binding upon any and all
assignees of the Lease and subtenants of the Premises. In the event Tenant
desires to sublet, or permit such occupancy of, the Premises, or any portion
thereof, or assign this Lease, Tenant shall give written notice thereof to
Landlord at least thirty (30) days but no more than one hundred eighty (180)
days prior to the proposed commencement date of such subletting or assignment,
which notice shall set forth the name of the proposed subtenant or assignee, the
relevant terms of any sublease or assignment and copies of financial reports and
other relevant financial reports and other relevant financial information of the
proposed subtenant or assignee.
9.2 Notwithstanding any assignment or subletting, permitted or otherwise,
Tenant shall at all times remain directly, primarily and fully responsible and
liable for the payment of the rent specified in this Lease and for compliance
with all of its other obligations under the terms, provisions and covenants of
this Lease. Upon the occurrence of an Event of Default, if the Premises or any
part of them are then assigned or sublet, Landlord, in addition to any other
remedies provided in this Lease or provided by law, may, at its option, collect
directly from such assignee or subtenant all rents due and becoming due to
Tenant under such assignment or sublease and apply such rent against any sums
due to Landlord from Tenant under this Lease, and no such collection shall be
construed to constitute a novation or release of Tenant from the further
performance of Tenant's obligations under this Lease.
9.3 In addition to Landlord's right to approve of any subtenant or
assignee, Landlord shall have the option, in its sole discretion, in the event
of any proposed subletting or assignment, to terminate this Lease, or in the
case of a proposed subletting of less than the entire Premises, to recapture the
portion of the Premises to be sublet, as of the date the subletting or
assignment is to be effective. The option shall be exercised, if at all, by
Landlord giving Tenant written notice given by Landlord to Tenant within sixty
(60) days following Landlord's receipt of Tenant's written notice as required
above. If this Lease shall be terminated with respect to the entire Premises
pursuant to this Section, the Term of this Lease shall end on the date stated in
Tenant's notice as the effective date of the sublease or assignment as if that
date had been originally fixed in this Lease for the expiration of the Term. If
Landlord recaptures under this Section only a portion of the Premises, the rent
to be paid from time to time during the unexpired Term shall xxxxx
proportionately based on the proportion by which the approximate square footage
of the remaining portion of the Premises shall be less than that of the Premises
as of the date immediately prior to such recapture. Tenant shall, at Tenant's
own cost and expense, discharge in full any outstanding commission obligation on
the part of Landlord with respect to this Lease, and any commissions which may
be due and owing as a result of any proposed assignment or subletting, whether
or not the Premises are recaptured pursuant to this Section 9.3 and rented by
Landlord to the proposed tenant or any other tenant.
9.4 In the event that Tenant sells, sublets, assigns or transfers this
Lease, Tenant shall pay to Landlord as additional rent an amount equal to fifty
percent (50%) of any Increased Rent (as defined below) when and as such
Increased Rent is received by Tenant. As used in this Section, "Increased Rent"
shall mean the excess of (a) all rent and other consideration which Tenant is
entitled to receive by reason of any sale, sublease, assignment or other
transfer of this Lease, over (b) the sum of (i) the rent otherwise payable by
Tenant under this Lease at such time, (ii) the cost of tenant improvements paid
for by Tenant in order to prepare the space for the occupancy of the subtenant,
assignee or transferee, and (iii) reasonable and customary leasing commissions
paid for by Tenant in connection with the sublet, assignment or transfer. For
purposes of the foregoing, any consideration received by Tenant in form other
than cash shall be valued at its fair market value as determined by Landlord in
good faith.
9.5 Notwithstanding any other provision hereof, Tenant shall have no
right to make (and Landlord shall have the absolute right to refuse consent to)
any assignment of this Lease or sublease of any portion of the Premises if at
the time of either Tenant's notice of the proposed assignment or sublease or the
proposed commencement date thereof, there shall exist any uncured default of
Tenant or matter which will become a default of Tenant with passage of time
unless cured, or if the proposed assignee or sublessee is an entity: (a) with
which Landlord is already in negotiation as evidenced by the issuance of a
written proposal; (b) is a governmental agency; (c) is incompatible with the
character of occupancy of the Building; or (d) would subject the Premises to a
use which would: (i) involve increased personnel or wear upon the Building;
(ii) violate any exclusive right granted to another tenant of the Building;
(iii) require any addition to or modification of the Premises or the Building in
order to comply with building code or other governmental requirements; or, (iv)
involve a violation of Section 1.2. Tenant expressly agrees that Landlord shall
have the absolute right to refuse consent to any such assignment or sublease and
that for the purposes of any statutory or other requirement of reasonableness on
the part of Landlord such refusal shall be reasonable.
9.6 Upon any request to assign or sublet, Tenant will pay to Landlord the
Assignment/Subletting Fee plus, on demand, a sum equal to all of Landlord's
reasonable costs, including attorney's fees, incurred in investigating and
considering any proposed or purported assignment or pledge of this Lease or
sublease of any of the Premises, regardless of whether Landlord shall consent
to, refuse consent, or determine that Landlord's consent is not required for,
such assignment, pledge or sublease. Any purported sale, assignment, mortgage,
transfer of this Lease or subletting which does not comply with the provisions
of this Article 9 shall be void.
9.7 If Tenant is a corporation, partnership or trust, any transfer or
transfers of or change or changes within any twelve month period in the number
of the outstanding voting shares of the corporation, the general partnership
interests in the partnership or the identity of the persons or entities
controlling the activities of such partnership or trust resulting in the persons
or entities owning or controlling a majority of such shares, partnership
interests or activities of such partnership or trust at the beginning of such
period no longer having such ownership or control shall be regarded as
equivalent to an assignment of this Lease to the persons or entities acquiring
such ownership or control and shall be subject to all the provisions of this
Article 9 to the same extent and for all intents and purposes as though such an
assignment. Notwithstanding the above, this provision shall not apply as long
as Tenant is a corporation whose shares are publicly traded on a nationally
recognized exchange or over-the-counter market.
10. INDEMNIFICATION. None of the Landlord Entities shall be liable and Tenant
hereby waives all claims against them for any damage to any property or any
injury to any person in or about the Premises or the Building by or from any
cause whatsoever (including without limiting
the foregoing, rain or water leakage of any character from the roof, windows,
walls, basement, pipes, plumbing works or appliances, the Building not being in
good condition or repair, gas, fire, oil, electricity or theft), except to the
extent caused by or arising from the gross negligence or willful misconduct of
Landlord or its agents, employees or contractors. Tenant shall protect,
indemnify and hold the Landlord Entities harmless from and against any and all
loss, claims, liability or costs (including court costs and attorney's fees)
incurred by reason of (a) any damage to any property (including but not limited
to property of any Landlord Entity) or any injury (including but not limited to
death) to any person occurring in, on or about the Premises or the Building to
the extent that such injury or damage shall be caused by or arise from any
actual or alleged act, neglect, fault, or omission by or of Tenant, its agents,
servants, employees, invitees, or visitors to meet any standards imposed by any
duty with respect to the injury or damage; (b) the conduct or management of any
work or thing whatsoever done by the Tenant in or about the Premises or from
transactions of the Tenant concerning the Premises; (c) Tenant's failure to
comply with any and all governmental laws, ordinances and regulations applicable
to the condition or use of the Premises or its occupancy; or (d) any breach or
default on the part of Tenant in the performance of any covenant or agreement on
the part of the Tenant to be performed pursuant to this Lease. The provisions of
this Article shall survive the termination of this Lease with respect to any
claims or liability accruing prior to such termination.
11. INSURANCE.
11.1 Tenant shall keep in force throughout the Term: (a) a Commercial
General Liability insurance policy or policies to protect the Landlord Entities
against any liability to the public or to any invitee of Tenant or a Landlord
Entity incidental to the use of or resulting from any accident occurring in or
upon the Premises with a limit of not less than $1,000,000.00 per occurrence and
not less than $2,000,000.00 in the annual aggregate, or such larger amount as
Landlord may prudently require from time to time, covering bodily injury and
property damage liability and $1,000,000 products/completed operations
aggregate; (b) Business Auto Liability covering owned, non-owned and hired
vehicles with a limit of not less than $1,000,000 per accident; (c) insurance
protecting against liability under Worker's Compensation Laws with limits at
least as required by statute; (d) Employers Liability with limits of $500,000
each accident, $500,000 disease policy limit, $500,000 disease--each employee;
(e) All Risk or Special Form coverage protecting Tenant against loss of or
damage to Tenant's alterations, additions, improvements, carpeting, floor
coverings, panelings, decorations, fixtures, inventory and other business
personal property situated in or about the Premises to the full replacement
value of the property so insured; and, (f) Business Interruption Insurance with
limit of liability representing loss of at least approximately six months of
income.
11.2 Each of the aforesaid policies shall (a) be provided at Tenant's
expense; (b) name the Landlord Entities as additional insureds; (c) be issued by
an insurance company with a minimum Best's rating of "A:VII" during the Term;
and (d) provide that said insurance shall not be canceled unless thirty (30)
days prior written notice (ten days for non-payment of premium)
shall have been given to Landlord; and said policy or policies or certificates
thereof shall be delivered to Landlord by Tenant upon the Commencement Date and
at least thirty (30) days prior to each renewal of said insurance.
11.3 Whenever Tenant shall undertake any alterations, additions or
improvements in, to or about the Premises ("Work") the aforesaid insurance
protection must extend to and include injuries to persons and damage to property
arising in connection with such Work, without limitation including liability
under any applicable structural work act, and such other insurance as Landlord
shall require; and the policies of or certificates evidencing such insurance
must be delivered to Landlord prior to the commencement of any such Work.
12. WAIVER OF SUBROGATION. So long as their respective insurers so permit,
Tenant and Landlord hereby mutually waive their respective rights of recovery
against each other for any loss insured by fire, extended coverage, All Risks or
other insurance now or hereafter existing for the benefit of the respective
party but only to the extent of the net insurance proceeds payable under such
policies. Each party shall obtain any special endorsements required by their
insurer to evidence compliance with the aforementioned waiver.
13. SERVICES AND UTILITIES.
13.1 Provided Tenant shall not be in default under this Lease, and
subject to the other provisions of this Lease, Landlord agrees to furnish to the
Premises, the following services and utilities subject to the rules and
regulations of the Building prescribed from time to time: (a) water suitable
for normal office use of the Premises; (b) heat and air conditioning required
for the use and occupation of the Premises; (c) elevator service by nonattended
automatic elevators; (d) such window washing as may from time to time in
Landlord's judgment be reasonably required; and, (e) equipment to bring to
Tenant's meter, electricity for lighting, convenience outlets and other normal
office use. To the extent that Tenant is not billed directly by a public
utility, Tenant shall pay, upon demand, as additional rent, for all electricity
used by Tenant in the Premises. The charge shall be at the rates charged for
such services by the local public utility. Landlord shall not be liable for,
and Tenant shall not be entitled to, any abatement or reduction of rental by
reason of Landlord's failure to furnish any of the foregoing, unless such
failure shall persist for an unreasonable time after written notice of such
failure is given to Landlord by Tenant and provided further that Landlord shall
not be liable when such failure is caused by accident, breakage, repairs, labor
disputes of any character, energy usage restrictions or by any other cause,
similar or dissimilar, beyond the reasonable control of Landlord. Landlord
shall use reasonable efforts to remedy any interruption in the furnishing of
services and utilities. Tenant shall contract for its own janitorial services
which services shall be in accordance with specifications to be proposed by
Tenant and approved by Landlord, which approval shall not be unreasonably
withheld provided such services are reasonably equivalent to similar services
provided to other comparable buildings in the market area of the Building
13.2 Tenant, as the sole tenant of the Building, may control the hours
and amounts of HVAC service to the Premises, subject to the normal capacity
limits of the equipment. Wherever heat-generating machines or equipment are
used by Tenant in the Premises which affect the temperature otherwise maintained
by the air conditioning system, Landlord reserves the right to install
supplementary air conditioning units in or for the benefit of the Premises and
the cost thereof, including the cost of installation and the cost of operations
and maintenance, shall be paid by Tenant to Landlord upon demand as such
additional rent. Tenant shall supply its own janitorial service using a
contractor reasonably acceptable to Landlord.
13.3 Tenant will not, without the written consent of Landlord, connect
with electric current, except through existing electrical outlets in the
Premises, or water pipes, any apparatus or device for the purposes of using
electrical current or water. 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.
14. HOLDING OVER. Tenant shall pay Landlord for each day Tenant retains
possession of the Premises or part of them after termination of this Lease by
lapse of time or otherwise at the rate ("Holdover Rate") which shall be 150% of
the greater of: (a) the amount of the Annual Rent for the last period prior to
the date of such termination plus all Rent Adjustments under Article 4; and, (b)
the then market rental value of the Premises as determined by Landlord assuming
a new lease of the Premises of the then usual duration and other terms, in
either case prorated on a daily basis, and also pay all damages sustained by
Landlord by reason of such retention. If Landlord gives notice to Tenant of
Landlord's election to that effect, such holding over shall constitute renewal
of this Lease for a period from month to month at the Holdover Rate, but if the
Landlord does not so elect, no such renewal shall result notwithstanding
acceptance by Landlord of any sums due hereunder after such termination; and
instead, a tenancy at sufferance at the Holdover Rate shall be deemed to have
been created. In any event, no provision of this Article 14 shall be deemed to
waive Landlord's right of reentry or any other right under this Lease or at law.
15. SUBORDINATION. Without the necessity of any additional document being
executed by Tenant for the purpose of effecting a subordination, this Lease
shall be subject and subordinate at all times to ground or underlying leases and
to the lien of any mortgages or deeds of trust now or hereafter placed on,
against or affecting the Building, Landlord's interest or estate in the
Building, or any ground or underlying lease; provided, however, that if the
lessor, mortgagee, trustee, or holder of any such mortgage or deed of trust
elects to have Tenant's interest in this Lease be superior to any such
instrument, then, by notice to Tenant, this Lease shall be deemed superior,
whether this Lease was executed before or after said instrument. Notwithstanding
the foregoing, Tenant covenants and agrees to execute and deliver upon demand
such further instruments evidencing such subordination or superiority of this
Lease as may be required by Landlord.
16. RULES AND REGULATIONS. Tenant shall faithfully observe and comply with
all the rules and regulations as set forth in Exhibit C to this Lease and all
reasonable modifications of and additions to them from time to time put into
effect by Landlord. Landlord shall not be responsible to Tenant for the non-
performance by any other tenant or occupant of the Building of any such rules
and regulations.
17. REENTRY BY LANDLORD.
17.1 Landlord reserves and shall at all times have the right to re-enter
the Premises during normal business hours (except in the case of emergencies) to
inspect the same, to supply janitor service and any other service to be provided
by Landlord to Tenant under this Lease, to show said Premises to prospective
purchasers, mortgagees or tenants, and to alter, improve or repair the Premises
and any portion of the Building, without abatement of rent, and may for that
purpose erect, use and maintain scaffolding, pipes, conduits and other necessary
structures and open any wall, ceiling or floor in and through the Building and
Premises where reasonably required by the character of the work to be performed,
provided entrance to the Premises shall not be blocked thereby, and further
provided that the business of Tenant shall not be interfered with unreasonably.
17.2 Landlord shall have the right at any time, if required by applicable
law, to change the arrangement and/or locations of entrances, or passageways,
doors and doorways, and corridors, windows, elevators, stairs, toilets or other
public parts of the Building and to change the name, number or designation by
which the Building is commonly known. In the event that Landlord damages any
portion of any wall or wall covering, ceiling, or floor or floor covering within
the Premises, Landlord shall repair or replace the damaged portion to match the
original as nearly as commercially reasonable but shall not be required to
repair or replace more than the portion actually damaged.
17.3 Tenant hereby waives any claim for damages for any injury or
inconvenience to or interference with Tenant's business, any loss of occupancy
or quiet enjoyment of the Premises, and any other loss occasioned by any action
of Landlord authorized by this Article 17. Tenant agrees to reimburse Landlord,
on demand, as additional rent, for any expenses which Landlord may incur in thus
effecting compliance with Tenant's obligations under this Lease.
17.4 For each of the aforesaid purposes, Landlord shall at all times have
and retain a key with which to unlock all of the doors in the Premises,
excluding Tenant's vaults and safes or special security areas (designated in
advance), and Landlord shall have the right to use any and all means which
Landlord may deem proper to open said doors in an emergency to obtain entry to
any portion of the Premises. As to any portion to which access cannot be had by
means of a key or keys in Landlord's possession, Landlord is authorized to gain
access by such means as
Landlord shall elect and the cost of repairing any damage occurring in doing so
shall be borne by Tenant and paid to Landlord as additional rent upon demand.
18. DEFAULT.
18.1 Except as otherwise provided in Article 20, the following events
shall be deemed to be Events of Default under this Lease:
18.1.1 Tenant shall have failed to pay an installment of Annual
Rent and such failure shall be continuing for a period of more than five (5)
days after such installment was due or Tenant shall have failed to pay any other
amount payable hereunder, and such failure shall be continuing for a period of
more than five (5) days after written notice to Tenant that such amount was due.
18.1.2 Tenant shall fail to comply with any term, provision or
covenant of this Lease which is not provided for in another Section of this
Article and shall not cure such failure within twenty (20) days (forthwith, if
the failure involves a hazardous condition) after written notice of such failure
to Tenant, provided, however, Tenant shall not be in default if such failure
cannot reasonably be cured within twenty (20) days and Tenant commences promptly
to cure and prosecutes diligently such cure to completion.
18.1.3 Tenant shall fail to vacate the Premises immediately upon
termination of this Lease, by lapse of time or otherwise, or upon termination of
Tenant's right to possession only.
18.1.4 Tenant shall become insolvent, admit in writing its inability
to pay its debts generally as they become due, file a petition in bankruptcy or
a petition to take advantage of any insolvency statute, make an assignment for
the benefit of creditors, make a transfer in fraud of creditors, apply for or
consent to the appointment of a receiver of itself or of the whole or any
substantial part of its property, or file a petition or answer seeking
reorganization or arrangement under the federal bankruptcy laws, as now in
effect or hereafter amended, or any other applicable law or statute of the
United States or any state thereof.
18.1.5 A court of competent jurisdiction shall enter an order,
judgment or decree adjudicating Tenant bankrupt, or appointing a receiver of
Tenant, or of the whole or any substantial part of its property, without the
consent of Tenant, or approving a petition filed against Tenant seeking
reorganization or arrangement of Tenant under the bankruptcy laws of the United
States, as now in effect or hereafter amended, or any state thereof, and such
order, judgment or decree shall not be vacated or set aside or stayed within
thirty (30) days from the date of entry thereof.
19. REMEDIES.
19.1 Except as otherwise provided in Article 20, upon the occurrence of
any of the Events of Default described or referred to in Article 18, Landlord
shall have the option to pursue any one or more of the following remedies
without any notice or demand whatsoever, concurrently or consecutively and not
alternatively:
19.1.1 Landlord may, at its election, terminate this Lease or
terminate Tenant's right to possession only, without terminating the Lease.
19.1.2 Upon any termination of this Lease, whether by lapse of time
or otherwise, or upon any termination of Tenant's right to possession without
termination of the Lease, Tenant shall surrender possession and vacate the
Premises immediately, and deliver possession thereof to Landlord, and Tenant
hereby grants to Landlord full and free license to enter into and upon the
Premises in such event and to repossess Landlord of the Premises as of
Landlord's former estate and to expel or remove Tenant and any others who may be
occupying or be within the Premises and to remove Tenant's signs and other
evidence of tenancy and all other property of Tenant therefrom without being
deemed in any manner guilty of trespass, eviction or forcible entry or detainer,
and without incurring any liability for any damage resulting therefrom, Tenant
waiving any right to claim damages for such re-entry and expulsion, and without
relinquishing Landlord's right to rent or any other right given to Landlord
under this Lease or by operation of law.
19.1.3 Upon any termination of this Lease, whether by lapse of time
or otherwise, Landlord shall be entitled to recover as damages, all rent,
including any amounts treated as additional rent under this Lease, and other
sums due and payable by Tenant on the date of termination, plus as liquidated
damages and not as a penalty, an amount equal to the sum of: (a) an amount
equal to the then present value of the rent reserved in this Lease for the
residue of the stated Term of this Lease including any amounts treated as
additional rent under this Lease and all other sums provided in this Lease to be
paid by Tenant, minus the fair rental value of the Premises for such residue;
(b) the value of the time and expense necessary to obtain a replacement tenant
or tenants, and the estimated expenses described in Section 19.1.4 relating to
recovery of the Premises, preparation for reletting and for reletting itself;
and (c) the cost of performing any other covenants which would have otherwise
been performed by Tenant.
19.1.4 Upon any termination of Tenant's right to possession only
without termination of the Lease:
19.1.4.1 Neither such termination of Tenant's right to
possession nor Landlord's taking and holding possession thereof as provided in
Section 19.1.2 shall terminate the Lease or release Tenant, in whole or in part,
from any obligation, including Tenant's obligation to pay the rent, including
any amounts treated as additional rent, under this Lease for the full Term, and
if Landlord so elects Tenant shall pay forthwith to Landlord the sum equal to
the
entire amount of the rent, including any amounts treated as additional rent
under this Lease, for the remainder of the Term plus any other sums provided in
this Lease to be paid by Tenant for the remainder of the Term.
19.1.4.2 Landlord may, but need not, relet the Premises or any
part thereof for such rent and upon such terms as Landlord, in its sole
discretion, shall determine (including the right to relet the premises for a
greater or lesser term than that remaining under this Lease, the right to relet
the Premises as a part of a larger area, and the right to change the character
or use made of the Premises). In connection with or in preparation for any
reletting, Landlord may, but shall not be required to, make repairs, alterations
and additions in or to the Premises and redecorate the same to the extent
Landlord deems necessary or desirable, and Tenant shall, upon demand, pay the
cost thereof, together with Landlord's expenses of reletting, including, without
limitation, any commission incurred by Landlord. If Landlord decides to relet
the Premises or a duty to relet is imposed upon Landlord by law, Landlord and
Tenant agree that nevertheless Landlord shall at most be required to use only
the same efforts Landlord then uses to lease premises in the Building generally
and that in any case that Landlord shall not be required to give any preference
or priority to the showing or leasing of the Premises over any other space that
Landlord may be leasing or have available and may place a suitable prospective
tenant in any such other space regardless of when such other space becomes
available. Landlord shall not be required to observe any instruction given by
Tenant about any reletting or accept any tenant offered by Tenant unless such
offered tenant has a credit-worthiness acceptable to Landlord and leases the
entire Premises upon terms and conditions including a rate of rent (after giving
effect to all expenditures by Landlord for tenant improvements, broker's
commissions and other leasing costs) all no less favorable to Landlord than as
called for in this Lease, nor shall Landlord be required to make or permit any
assignment or sublease for more than the current term or which Landlord would
not be required to permit under the provisions of Article 9.
19.1.4.3 Until such time as Landlord shall elect to terminate
the Lease and shall thereupon be entitled to recover the amounts specified in
such case in Section 19.1.3, Tenant shall pay to Landlord upon demand the full
amount of all rent, including any amounts treated as additional rent under this
Lease and other sums reserved in this Lease for the remaining Term, together
with the costs of repairs, alterations, additions, redecorating and Landlord's
expenses of reletting and the collection of the rent accruing therefrom
(including reasonable attorney's fees and broker's commissions), as the same
shall then be due or become due from time to time, less only such consideration
as Landlord may have received from any reletting of the Premises; and Tenant
agrees that Landlord may file suits from time to time to recover any sums
falling due under this Article 19 as they become due. Any proceeds of reletting
by Landlord in excess of the amount then owed by Tenant to Landlord from time to
time shall be credited against Tenant's future obligations under this Lease but
shall not otherwise be refunded to Tenant or inure to Tenant's benefit.
19.2 Landlord may, at Landlord's option, enter into and upon the Premises
if Landlord determines in its sole discretion that Tenant is not acting within a
commercially reasonable time
to maintain, repair or replace anything for which Tenant is responsible under
this Lease and correct the same, without being deemed in any manner guilty of
trespass, eviction or forcible entry and detainer and without incurring any
liability for any damage or interruption of Tenant's business resulting
therefrom. If Tenant shall have vacated the Premises, Landlord may at Landlord's
option re-enter the Premises at any time during the last six months of the then
current Term of this Lease and make any and all such changes, alterations,
revisions, additions and tenant and other improvements in or about the Premises
as Landlord shall elect, all without any abatement of any of the rent otherwise
to be paid by Tenant under this Lease.
19.3 If, on account of any breach or default by Tenant in Tenant's
obligations under the terms and conditions of this Lease, it shall become
necessary or appropriate for Landlord to employ or consult with an attorney
concerning or to enforce or defend any of Landlord's rights or remedies arising
under this Lease, Tenant agrees to pay all Landlord's reasonable attorney's fees
so incurred. Landlord and Tenant each expressly waives any right to trial by
jury.
19.4 Pursuit of any of the foregoing remedies shall not preclude pursuit
of any of the other remedies provided in this Lease or any other remedies
provided by law (all such remedies being cumulative), nor shall pursuit of any
remedy provided in this Lease constitute a forfeiture or waiver of any rent due
to Landlord under this Lease or of any damages accruing to Landlord by reason of
the violation of any of the terms, provisions and covenants contained in this
Lease.
19.5 No act or thing done by Landlord or its agents during the Term shall
be deemed a termination of this Lease or an acceptance of the surrender of the
Premises, and no agreement to terminate this Lease or accept a surrender of said
Premises shall be valid, unless in writing signed by Landlord. No waiver by
Landlord of any violation or breach of any of the terms, provisions and
covenants contained in this Lease shall be deemed or construed to constitute a
waiver of any other violation or breach of any of the terms, provisions and
covenants contained in this Lease. Landlord's acceptance of the payment of
rental or other payments after the occurrence of an Event of Default shall not
be construed as a waiver of such Default, unless Landlord so notifies Tenant in
writing. Forbearance by Landlord in enforcing one or more of the remedies
provided in this Lease upon an Event of Default shall not be deemed or construed
to constitute a waiver of such Default or of Landlord's right to enforce any
such remedies with respect to such Default or any subsequent Default.
19.6 To secure the payment of all rentals and other sums of money becoming
due from Tenant under this Lease, Landlord shall have and Tenant grants to
Landlord a first lien upon the leasehold interest of Tenant under this Lease,
which lien may be enforced in equity, and a continuing security interest upon
all goods, wares, equipment, fixtures, furniture, inventory, accounts, contract
rights, chattel paper and other personal property of Tenant situated on the
Premises, and such property shall not be removed therefrom without the consent
of Landlord until all arrearages in rent as well as any and all other sums of
money then due to Landlord under this Lease shall first have been paid and
discharged. In the event of a default under this Lease, Landlord shall have, in
addition to any other remedies provided in this Lease or by law, all rights and
remedies under the Uniform Commercial Code, including without limitation the
right to sell
the property described in this Section 19.6 at public or private sale upon five
(5) days' notice to Tenant. Tenant shall execute all such financing statements
and other instruments as shall be deemed necessary or desirable in Landlord's
discretion to perfect the security interest hereby created.
19.7 Any and all property which may be removed from the Premises by
Landlord pursuant to the authority of this Lease or of law, to which Tenant is
or may be entitled, may be handled, removed and/or stored, as the case may be,
by or at the direction of Landlord but at the risk, cost and expense of Tenant,
and Landlord shall in no event be responsible for the value, preservation or
safekeeping thereof. Tenant shall pay to Landlord, upon demand, any and all
expenses incurred in such removal and all storage charges against such property
so long as the same shall be in Landlord's possession or under Landlord's
control. Any such property of Tenant not retaken by Tenant from storage within
thirty (30) days after removal from the Premises shall, at Landlord's option, be
deemed conveyed by Tenant to Landlord under this Lease as by a xxxx of sale
without further payment or credit by Landlord to Tenant.
20. TENANT'S BANKRUPTCY OR INSOLVENCY.
20.1 If at any time and for so long as Tenant shall be subjected to the
provisions of the United States Bankruptcy Code or other law of the United
States or any state thereof for the protection of debtors as in effect at such
time (each a "Debtor's Law"):
20.1.1 Tenant, Tenant as debtor-in-possession, and any trustee or
receiver of Tenant's assets (each a "Tenant's Representative") shall have no
greater right to assume or assign this Lease or any interest in this Lease, or
to sublease any of the Premises than accorded to Tenant in Article 9, except to
the extent Landlord shall be required to permit such assumption, assignment or
sublease by the provisions of such Debtor's Law. Without limitation of the
generality of the foregoing, any right of any Tenant's Representative to assume
or assign this Lease or to sublease any of the Premises shall be subject to the
conditions that:
20.1.1.1 Such Debtor's Law shall provide to Tenant's
Representative a right of assumption of this Lease which Tenant's Representative
shall have timely exercised and Tenant's Representative shall have fully cured
any default of Tenant under this Lease.
20.1.1.2 Tenant's Representative or the proposed assignee, as
the case shall be, shall have deposited with Landlord as security for the timely
payment of rent an amount equal to the larger of: (a) three months' rent and
other monetary charges accruing under this Lease; and (b) any sum specified in
Article 5; and shall have provided Landlord with adequate other assurance of the
future performance of the obligations of the Tenant under this Lease. Without
limitation, such assurances shall include, at least, in the case of assumption
of this Lease, demonstration to the satisfaction of the Landlord that Tenant's
Representative has and will continue to have sufficient unencumbered assets
after the payment of all secured obligations and administrative expenses to
assure Landlord that Tenant's Representative will have sufficient
funds to fulfill the obligations of Tenant under this Lease; and, in the case of
assignment, submission of current financial statements of the proposed assignee,
audited by an independent certified public accountant reasonably acceptable to
Landlord and showing a net worth and working capital in amounts determined by
Landlord to be sufficient to assure the future performance by such assignee of
all of the Tenant's obligations under this Lease.
20.1.1.3 The assumption or any contemplated assignment of this
Lease or subleasing any part of the Premises, as shall be the case, will not
breach any provision in any other lease, mortgage, financing agreement or other
agreement by which Landlord is bound.
20.1.1.4 Landlord shall have, or would have had absent the
Debtor's Law, no right under Article 9 to refuse consent to the proposed
assignment or sublease by reason of the identity or nature of the proposed
assignee or sublessee or the proposed use of the Premises concerned.
21. QUIET ENJOYMENT. Landlord represents and warrants that it has full right
and authority to enter into this Lease and that Tenant, while paying the rental
and performing its other covenants and agreements contained in this Lease, shall
peaceably and quietly have, hold and enjoy the Premises for the Term without
hindrance or molestation from Landlord subject to the terms and provisions of
this Lease. Landlord shall not be liable for any interference or disturbance by
other tenants or third persons, nor shall Tenant be released from any of the
obligations of this Lease because of such interference or disturbance.
22. DAMAGE BY FIRE, ETC.
22.1 In the event the Premises or the Building are damaged by fire or
other cause and in Landlord's reasonable estimation such damage can be
materially restored within ninety (90) days, Landlord shall forthwith repair the
same and this Lease shall remain in full force and effect, except that Tenant
shall be entitled to a proportionate abatement in rent from the date of such
damage. Such abatement of rent shall be made pro rata in accordance with the
extent to which the damage and the making of such repairs shall interfere with
the use and occupancy by Tenant of the Premises from time to time. Within
forty-five (45) days from the date of such damage, Landlord shall notify Tenant,
in writing, of Landlord's reasonable estimation of the length of time within
which material restoration can be made, and Landlord's determination shall be
binding on Tenant. For purposes of this Lease, the Building or Premises shall
be deemed "materially restored" if they are in such condition as would not
prevent or materially interfere with Tenant's use of the Premises for the
purpose for which it was being used immediately before such damage.
22.2 If such repairs cannot, in Landlord's reasonable estimation, be made
within ninety (90) days, Landlord and Tenant shall each have the option of
giving the other, at any time within
sixty (60) days after such damage, notice terminating this Lease as of the date
of such damage. In the event of the giving of such notice, this Lease shall
expire and all interest of the Tenant in the Premises shall terminate as of the
date of such damage as if such date had been originally fixed in this Lease for
the expiration of the Term. In the event that neither Landlord nor Tenant
exercises its option to terminate this Lease, then Landlord shall repair or
restore such damage, this Lease continuing in full force and effect, and the
rent hereunder shall be proportionately abated as provided in Section 22.1.
22.3 Landlord shall not be required to repair or replace any damage or
loss by or from fire or other cause to any panelings, decorations, partitions,
additions, railings, ceilings, floor coverings, office fixtures or any other
property or improvements installed on the Premises or belonging to Tenant. Any
insurance which may be carried by Landlord or Tenant against loss or damage to
the Building or Premises shall be for the sole benefit of the party carrying
such insurance and under its sole control.
22.4 In the event that Landlord should fail to complete such repairs and
material restoration within sixty (60) days after the date estimated by Landlord
therefor as extended by this Section 22.4, Tenant may at its option and as its
sole remedy terminate this Lease by delivering written notice to Landlord,
within fifteen (15) days after the expiration of said period of time, whereupon
the Lease shall end on the date of such notice or such later date fixed in such
notice as if the date of such notice was the date originally fixed in this Lease
for the expiration of the Term; provided, however, that if construction is
delayed because of changes, deletions or additions in construction requested by
Tenant, strikes, lockouts, casualties, Acts of God, war, material or labor
shortages, government regulation or control or other causes beyond the
reasonable control of Landlord, the period for restoration, repair or rebuilding
shall be extended for the amount of time Landlord is so delayed.
22.5 Notwithstanding anything to the contrary contained in this Article:
(a) Landlord shall not have any obligation whatsoever to repair, reconstruct, or
restore the Premises when the damages resulting from any casualty covered by the
provisions of this Article 22 occur during the last six (6) months of the Term
or any extension thereof, but if Landlord determines not to repair such damages
Landlord shall notify Tenant and if such damages shall render any material
portion of the Premises untenantable Tenant shall have the right to terminate
this Lease by notice to Landlord within fifteen (15) days after receipt of
Landlord's notice; and (b) in the event the holder of any indebtedness secured
by a mortgage or deed of trust covering the Premises or Building requires that
any insurance proceeds be applied to such indebtedness, then Landlord shall have
the right to terminate this Lease by delivering written notice of termination to
Tenant within fifteen (15) days after such requirement is made by any such
holder, whereupon this Lease shall end on the date of such damage as if the date
of such damage were the date originally fixed in this Lease for the expiration
of the Term.
22.6 In the event of any damage or destruction to the Building or Premises
by any peril covered by the provisions of this Article 22, it shall be Tenant's
responsibility to properly secure
the Premises and upon notice from Landlord to remove forthwith, at its sole cost
and expense, such portion of all of the property belonging to Tenant or its
licensees from such portion or all of the Building or Premises as Landlord shall
request.
23. EMINENT DOMAIN. If all or any substantial part of the Premises shall be
taken or appropriated by any public or quasi-public authority under the power of
eminent domain, or conveyance in lieu of such appropriation, either party to
this Lease shall have the right, at its option, of giving the other, at any time
within thirty (30) days after such taking, notice terminating this Lease, except
that Tenant may only terminate this Lease by reason of taking or appropriation,
if such taking or appropriation shall be so substantial as to materially
interfere with Tenant's use and occupancy of the Premises. If neither party to
this Lease shall so elect to terminate this Lease, the rental thereafter to be
paid shall be adjusted on a fair and equitable basis under the circumstances. In
addition to the rights of Landlord above, if any substantial part of the
Building shall be taken or appropriated by any public or quasi-public authority
under the power of eminent domain or conveyance in lieu thereof, and regardless
of whether the Premises or any part thereof are so taken or appropriated,
Landlord shall have the right, at its sole option, to terminate this Lease.
Landlord shall be entitled to any and all income, rent, award, or any interest
whatsoever in or upon any such sum, which may be paid or made in connection with
any such public or quasi-public use or purpose, and Tenant hereby assigns to
Landlord any interest it may have in or claim to all or any part of such sums,
other than any separate award which may be made with respect to Tenant's trade
fixtures and moving expenses; Tenant shall make no claim for the value of any
unexpired Term.
24. SALE BY LANDLORD. In event of a sale or conveyance by Landlord of the
Building, the same shall operate to release Landlord from any future liability
upon any of the covenants or conditions, expressed or implied, contained in this
Lease in favor of Tenant, and in such event Tenant agrees to look solely to the
responsibility of the successor in interest of Landlord in and to this Lease.
Except as set forth in this Article 24, this Lease shall not be affected by any
such sale and Tenant agrees to attorn to the purchaser or assignee. If any
security has been given by Tenant to secure the faithful performance of any of
the covenants of this Lease, Landlord may transfer or deliver said security, as
such, to Landlord's successor in interest and thereupon Landlord shall be
discharged from any further liability with regard to said security.
25. ESTOPPEL CERTIFICATES. Within ten (10) days following any written request
which Landlord may make from time to time, Tenant shall execute and deliver to
Landlord or mortgagee or prospective mortgagee a sworn statement certifying: (a)
the date of commencement of this Lease; (b) the fact that this Lease is
unmodified and in full force and effect (or, if there have been modifications to
this Lease, that this lease is in full force and effect, as modified, and
stating the date and nature of such modifications); (c) the date to which the
rent and other sums payable under this Lease have been paid; (d) the fact that
there are no current defaults
under this Lease by either Landlord or Tenant except as specified in Tenant's
statement; and (e) such other matters as may be requested by Landlord. Landlord
and Tenant intend that any statement delivered pursuant to this Article 25 may
be relied upon by any mortgagee, beneficiary or purchaser and Tenant shall be
liable for all loss, cost or expense resulting from the failure of any sale or
funding of any loan caused by any material misstatement contained in such
estoppel certificate. Tenant irrevocably agrees that if Tenant fails to execute
and deliver such certificate within such ten (10) day period Landlord or
Landlord's beneficiary or agent may execute and deliver such certificate on
Tenant's behalf, and that such certificate shall be fully binding on Tenant.
26. SURRENDER OF PREMISES.
26.1 Tenant shall, at least thirty (30) days before the last day of the
Term, arrange to meet Landlord for a joint inspection of the Premises. In the
event of Tenant's failure to arrange such joint inspection to be held prior to
vacating the Premises, Landlord's inspection at or after Tenant's vacating the
Premises shall be conclusively deemed correct for purposes of determining
Tenant's responsibility for repairs and restoration.
26.2 At the end of the Term or any renewal of the Term or other sooner
termination of this Lease, Tenant will peaceably deliver up to Landlord
possession of the Premises, together with all improvements or additions upon or
belonging to the same, by whomsoever made, in the same conditions received or
first installed, broom clean and free of all debris, excepting only ordinary
wear and tear and damage by fire or other casualty. Tenant may, and at
Landlord's request shall, at Tenant's sole cost, remove upon termination of this
Lease, any and all furniture, furnishings, movable partitions of less than full
height from floor to ceiling, trade fixtures and other property installed by
Tenant, title to which shall not be in or pass automatically to Landlord upon
such termination, repairing all damage caused by such removal. Property not so
removed shall, unless requested to be removed, be deemed abandoned by the Tenant
and title to the same shall thereupon pass to Landlord under this Lease as by a
xxxx of sale. All other alterations, additions and improvements in, on or to
the Premises shall be dealt with and disposed of as provided in Article 6
hereof.
26.3 All obligations of Tenant under this Lease not fully performed as of
the expiration or earlier termination of the Term shall survive the expiration
or earlier termination of the Term. In the event that Tenant's failure to
perform prevents Landlord from releasing the Premises, Tenant shall continue to
pay rent pursuant to the provisions of Article 14 until such performance is
complete. Upon the expiration or earlier termination of the Term, Tenant shall
pay to Landlord the amount, as estimated by Landlord, necessary to repair and
restore the Premises as provided in this Lease and/or to discharge Tenant's
obligation for unpaid amounts due or to become due to Landlord. All such
amounts shall be used and held by Landlord for payment of such obligations of
Tenant, with Tenant being liable for any additional costs upon demand by
Landlord, or with any excess to be returned to Tenant after all such obligations
have been
determined and satisfied. Any otherwise unused Security Deposit shall be
credited against the amount payable by Tenant under this Lease.
27. NOTICES. Any notice or document required or permitted to be delivered
under this Lease shall be addressed to the intended recipient, shall be
transmitted personally, by facsimile transmission (followed by delivery of an
original by a method specified herein), by fully prepaid registered or certified
United States Mail return receipt requested, or by reputable independent
contract delivery service furnishing a written record of attempted or actual
delivery, and shall be deemed to be delivered when tendered for delivery to the
addressee at its address set forth on the Reference Page, or at such other
address as it has then last specified by written notice delivered in accordance
with this Article 27, or if to Tenant at either its aforesaid address or its
last known registered office or home of a general partner or individual owner,
whether or not actually accepted or received by the addressee.
28. TAXES PAYABLE BY TENANT. In addition to rent and other charges to be paid
by Tenant under this Lease, Tenant shall reimburse to Landlord, upon demand, any
and all taxes payable by Landlord (other than net income taxes) whether or not
now customary or within the contemplation of the parties to this Lease: (a)
upon, allocable to, or measured by or on the gross or net rent payable under
this Lease, including without limitation any gross income tax or excise tax
levied by the State, any political subdivision thereof, or the Federal
Government with respect to the receipt of such rent; (b) upon or with respect to
the possession, leasing, operation, management, maintenance, alteration, repair,
use or occupancy of the Premises or any portion thereof, including any sales,
use or service tax imposed as a result thereof; (c) upon or measured by the
Tenant's gross receipts or payroll or the value of Tenant's equipment,
furniture, fixtures and other personal property of Tenant or leasehold
improvements, alterations or additions located in the Premises; or (d) upon this
transaction or any document to which Tenant is a party creating or transferring
any interest of Tenant in this Lease or the Premises. In addition to the
foregoing, Tenant agrees to pay, before delinquency, any and all taxes levied or
assessed against Tenant and which become payable during the term hereof upon
Tenant's equipment, furniture, fixtures and other personal property of Tenant
located in the Premises.
29. OPTION TO TERMINATE. Provided (a) the Lease is in full force and effect,
and (b) Tenant is not in default hereunder at the time of notification or
termination, Tenant shall have one (1) option to terminate the Lease as of the
seventh anniversary of the Commencement Date, by notice in writing delivered to
Landlord not later than the sixth anniversary of the Commencement Date. To be
effective, Tenant's notice of termination must be accompanied by a termination
payment equal to $346,550.
30. DEFINED TERMS AND HEADINGS. The Article headings shown in this Lease are
for
convenience of reference and shall in no way define, increase, limit or describe
the scope or intent of any provision of this Lease. Any indemnification or
insurance of Landlord shall apply to and inure to the benefit of all the
following "Landlord Entities", being Landlord, Landlord's investment manager,
and the trustees, boards of directors, officers, general partners,
beneficiaries, stockholders, employees and agents of each of them. Any option
granted to Landlord shall also include or be exercisable by Landlord's trustee,
beneficiary, agents and employees, as the case may be. In any case where this
Lease is signed by more than one person, the obligations under this Lease shall
be joint and several. The terms "Tenant" and "Landlord" or any pronoun used in
place thereof shall indicate and include the masculine or feminine, the singular
or plural number, individuals, firms or corporations, and their and each of
their respective successors, executors, administrators and permitted assigns,
according to the context hereof. The term "rentable area" shall mean the
rentable area of the Premises or the Building as calculated by the Landlord on
the basis of the plans and specifications of the Building including a
proportionate share of any common areas. Tenant hereby accepts and agrees to be
bound by the figures for the rentable space footage of the Premises shown on the
Reference Page.
31. TENANT'S AUTHORITY. If Tenant signs as a corporation each of the persons
executing this Lease on behalf of Tenant represents and warrants that Tenant has
been and is qualified to do business in the state in which the Building is
located, that the corporation has full right and authority to enter into this
Lease, and that all persons signing on behalf of the corporation were authorized
to do so by appropriate corporate actions. Tenant agrees to furnish promptly
upon request a corporate resolution, proof of due authorization by partners, or
other appropriate documentation evidencing the due authorization of Tenant to
enter into this Lease.
32. COMMISSIONS. Each of the parties represents and warrants to the other that
it has not dealt with any broker or finder in connection with this Lease, except
as described on the Reference Page.
33. TIME AND APPLICABLE LAW. Time is of the essence of this Lease and all of
its provisions. This Lease shall in all respects be governed by the laws of the
state in which the Building is located.
34. SUCCESSORS AND ASSIGNS. Subject to the provisions of Article 9, the terms,
covenants and conditions contained in this Lease shall be binding upon and inure
to the benefit of the heirs, successors, executors, administrators and assigns
of the parties to this Lease.
35. ENTIRE AGREEMENT. This Lease, together with its exhibits, contains all
agreements of the parties to this Lease and supersedes any previous
negotiations. There have been no
representations made by the Landlord or understandings made between the parties
other than those set forth in this Lease and its exhibits. This Lease may not be
modified except by a written instrument duly executed by the parties to this
Lease.
36. EXAMINATION NOT OPTION. Submission of this Lease shall not be deemed to be
a reservation of the Premises. Landlord shall not be bound by this Lease until
it has received a copy of this Lease duly executed by Tenant and has delivered
to Tenant a copy of this Lease duly executed by Landlord, and until such
delivery Landlord reserves the right to exhibit and lease the Premises to other
prospective tenants. Notwithstanding anything contained in this Lease to the
contrary, Landlord may withhold delivery of possession of the Premises from
Tenant until such time as Tenant has paid to Landlord any security deposit
required by Article 5, the first month's rent as set forth in Article 3 and any
sum owed pursuant to this Lease.
37. RECORDATION. Tenant shall not record or register this Lease or a short
form memorandum hereof without the prior written consent of Landlord, and then
shall pay all charges and taxes incident such recording or registration.
38. LIMITATION OF LANDLORD'S LIABILITY. Redress for any claim against Landlord
under this Lease shall be limited to and enforceable only against and to the
extent of Landlord's interest in the Building. The obligations of Landlord under
this Lease are not intended to and shall not be personally binding on, nor shall
any resort be had to the private properties of, any of its trustees or board of
directors and officers, as the case may be, its investment manager, the general
partners thereof, or any beneficiaries, stockholders, employees, or agents of
Landlord or the investment manager.
39. GOVERNMENTAL APPROVALS. Tenant is responsible for obtaining all necessary
permits and governmental approvals to construct improvements in the Premises and
otherwise make use of the Premises for its intended purposes. Landlord has not
made, and does not make. any representation or warranty as to the availability
of such permits or approvals. Tenant acknowledges that at the time of executing
this Lease, Tenant has not obtained all necessary permits and governmental
approvals to construct improvements in the Premises and otherwise make use of
the Premises for its intended purposes. Tenant has, however, requested that
Landlord purchase the Building and execute this Lease. Tenant recognizes that
Landlord would not purchase the Building but for this Lease. Tenant, therefore,
agrees that its obligations under this Lease shall not be affected by Tenant's
inability to obtain necessary permits or governmental approvals and that its
obligation to pay rent and otherwise perform its obligations under this Lease
shall be effective even if Tenant is not able to construct improvements in the
Premises or otherwise make use of the Premises for its intended purposes.
LANDLORD: TENANT:
Great Lakes REIT, Inc., a Maryland Aksys, Ltd., a Delaware,
corporation corporation
By: /s/ Great Lakes REIT, Inc. By: /s/ Xxxxxx X. Xxxxxx
-------------------------- --------------------
Title: Senior Vice President Title: President and COO
---------------------- -----------------
Dated: July 24, 1996 Dated: July 27, 1996
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EXHIBIT A
attached to and made a part of Lease bearing the
Lease Reference Date of July 15, 1996 between
Great Lakes REIT, Inc., as Landlord and
Aksys, Ltd., a Delaware, corporation, as Tenant
PREMISES
Tenant is leasing all of the rentable area of the Building.
EXHIBIT B
attached to and made a part of Lease bearing the
Lease Reference Date of July 15, 1996 between
Great Lakes REIT, Inc., as Landlord and
Aksys, Ltd., a Delaware, corporation, as Tenant
INITIAL ALTERATIONS
Tenant is leasing the Premises in its current "AS IS" condition and will
construct all improvements in the Premises at its own cost, subject to
compliance with the Lease, except as follows:
1. Landlord will place the existing HVAC roof top units in operable
condition prior to September 1, 1996.
2. Landlord will cause a reputable roofing contractor to inspect the roof
as promptly as possible. On or before September 1, 1996, Landlord will
repair any leaks in the roof identified by such contractor. Tenant will
be responsible for any leaks or other damage to the roof caused by its
improvement work.
3. Landlord will cause a reputable paving contractor to inspect the parking
lot as promptly as possible and give a firm quote for resealing and
restriping the parking lot. On a date acceptable to the Landlord, Tenant
and the contractor, such contractor will reseal and restripe the parking
lot. If there is any additional charge beyond initial quote as a result
of damage to the parking lot caused by Tenant's contractors in
performing Tenant's improvement work, then such additional charge shall
be paid by Tenant.
EXHIBIT C
attached to and made a part of Lease bearing the
Lease Reference Date of July 15, 1996 between
Great Lakes REIT, Inc., as Landlord and
Aksys, Ltd., a Delaware, corporation, as Tenant
RULES AND REGULATIONS
1. No sign, placard, picture, advertisement, name or notice shall be installed
or displayed on any part of the outside of the Building without the prior
written consent of the Landlord.
2. If Landlord objects in writing to any curtains, blinds, shades or screens
attached to or hung in or used in connection with any window or door of the
Premises, Tenant shall immediately discontinue such use. No awning shall be
permitted on any part of the Premises. Tenant shall not place anything or allow
anything to be placed against or near any glass partitions or doors or windows
which may appear unsightly, in the opinion of Landlord, from outside the
Premises.
3. Tenant shall not obstruct any sidewalks, halls, passages, exits, entrances,
elevators, escalators or stairways of the Building. The halls, passages, exits,
entrances, shopping malls, elevators, escalators and stairways are not for the
general public, and Landlord shall in all cases retain the right to control and
prevent access to the Building of all persons whose presence in the judgment of
Landlord would be prejudicial to the safety, character, reputation and interests
of the Building and its tenants provided that nothing contained in this rule
shall be construed to prevent such access to persons with whom any tenant
normally deals in the ordinary course of its business, unless such persons are
engaged in illegal activities. No tenant and no employee or invitee of any
tenant shall go upon the roof of the Building.
4. If Tenant requires telegraphic, telephonic, burglar alarm or similar
services, it shall first obtain, and comply with, Landlord's instructions in
their installation.
5. Tenant shall not place a load upon any floor which exceeds the load per
square foot which such floor was designed to carry and which is allowed by law.
Landlord shall have the right to prescribe the weight, size and position to all
equipment, materials, furniture or other property brought into the Building.
Heavy objects shall, stand on such platforms as determined by Landlord to be
necessary to properly distribute the weight. Business machines and mechanical
equipment belonging to Tenant which cause noise or vibration that may be
transmitted to the structure of the Building or to any space in the Building to
such a degree as to be objectionable to Landlord or to any tenants shall be
placed and maintained by Tenant, at Tenant's expense, on vibration eliminators
or other devices sufficient to eliminate noise or vibration. The persons
employed to move such equipment in or out of the Building must be acceptable to
Landlord. Landlord will not be responsible for loss of, or damage to, any such
equipment or other property from any cause, and all damage done to the
Building by maintaining or moving such equipment or other property shall be
repaired at the expense of Tenant.
6. The toilet rooms, toilets, urinals, wash bowls and other apparatus shall not
be used for any purpose other than that for which they were constructed, no
foreign substance of any kind whatsoever shall be thrown into any of them, and
the expense of any breakage, stoppage or damage resulting from the violation of
this rule shall be borne by the Tenant who, or whose employees or invitees,
shall have caused it.
7. Tenant shall not install any radio or television antenna, satellite dish,
loudspeaker or other device on the roof or exterior walls of the Building.
Tenant shall not interfere with radio or television broadcasting or reception
from or in the Building or elsewhere.
8. Except as approved by Landlord, Tenant shall not xxxx, drive nails, screw or
drill into the partitions, woodwork or plaster or in any way deface the
Premises. Tenant shall not cut or bore holes for wires. Tenant shall not affix
any floor covering to the floor of the Premises in any manner except as approved
by Landlord. Tenant shall repair any damage resulting from noncompliance with
this rule.
9. Tenant shall not use the name of the Building in connection with or in
promoting or advertising the business of Tenant except as Tenant's address.
10. Landlord may waive any one or more of these Rules and Regulations for the
benefit of any particular tenant or tenants, but no such waiver by Landlord
shall be construed as a waiver of such Rules and Regulations in favor of any
other tenant or tenants, nor prevent Landlord from thereafter enforcing any such
Rules and Regulations against any or all of the tenants of the Building.
11. These Rules and Regulations are in addition to, and shall not be construed
to in any way modify or amend, in whole or in part, the terms, covenants,
agreements and conditions of any lease of premises in the Building.
12. Landlord reserves the right to make such other and reasonable rules and
regulations as in its judgment may from time to time be needed for safety and
security, for care and cleanliness of the Building and for the preservation of
good order in and about the Building. Tenant agrees to abide by all such rules
and regulations in this Exhibit C stated and any additional rules and
regulations which are reasonably adopted.
13. Tenant shall be responsible for the observance of all of the foregoing
rules by Tenant's employees, agents, clients, customers, invitees and guests.
