SECOND SUPPLEMENTAL AGREEMENT
SECOND SUPPLEMENTAL AGREEMENT ("Agreement") made as of October
____ , 1996 between CHRYSLER PROPERTIES INC, a California corporation having an
office at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx Xxx Xxxx 00000 ("Landlord") and MERIT
BEHAVIORAL CARE CORPORATION, a Delaware corporation having an office at Xxx
Xxxxxxx Xxxxx Xxxx Xxxxx, Xxx Xxxxxx 00000 ("Tenant").
W I T N E S S E T H
WHEREAS:
A. Landlord and Tenant heretofore entered into a certain lease
dated as of August 14, 1991 and a First Supplemental Agreement dated May 31,
1996 ("Lease") with respect to the entire 5th floor and the entire 6th floor as
more particularly described in the Lease ("Demised Premises") in the building
known as The Kent Building, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
("Building"); and
B. The parties hereto desire to modify the Lease to provide for,
among other things, an addition to the Demised Premises on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and mutual
covenants hereinafter contained, the parties hereto agree as follows:
1. All terms contained in this Agreement, unless otherwise
defined herein, shall, for the purposes hereof, have the same meaning ascribed
to them in the Lease.
2. All of the terms, covenants and provisions of this Agreement
shall be effective October 1, 1996 ("Effective Date").
3. Section 1.2 of the Lease is hereby modified to provide that
the Demised Premises shall include the following additional space in the
building known as the Chrysler Building, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 ("Chrysler Building"):
A portion of the 47th floor containing approximately four
thousand four hundred (4,400) square feet, substantially as
shown hatched on the floor plan annexed hereto as Exhibit "A"
("Second Added Space").
Tenant acknowledges that Tenant has examined the Second Added
Space and accepts the Second Added Space "as is", in the condition and state of
repair existing on the date hereof subject to normal wear and tear. Tenant
acknowledges that no work is to be performed, or materials supplied by Landlord
in connection therewith, except for (i) the "Tenant's Second Construction Work"
as hereinafter defined) and (ii) that Landlord shall provide to Tenant an ACP-5
form for filing with respect to the Tenant's Construction Work to the Second
Added Space.
4. Section 1.4 (a) of the Lease is hereby modified to provide
that the annual fixed rent payable for the Second Added Space pursuant to the
Lease shall be as follows:
a) for the period October 1, 1996 through October 31,
2002, one hundred twenty five thousand four hundred
dollars and no cents ($125,400.00) per annum; and
b) for the period from November 1, 2002 through the
Expiration Date, one hundred thirty eight thousand
six hundred dollars and no cents ($138,600.00) per
annum.
5. Article 5 of the Lease is hereby modified to provide the
following with respect to the Second Added Space only:
a) Tenant's Proportionate Share as set forth in subsection
5.1 (c) shall mean .00469.
b) the following shall be added as subsection 5.1 (d); "Area of
the Premises" shall mean the rentable square foot area of the
Demised Premises (which the parties have agreed, for the
purposes of this Article 5 shall be 4,400 rentable squre feet).
c) the following shall be added as subsection 5.1 (h);
"Hourly Wage Rate" as respects any Operation Year shall mean
(A) as to porters, the minimum hourly wage rate prescribed to be
paid to porters appropriately by applicable labor agreements and
computed on an hourly basis, in major office buildings
(hereinafter called "Class A Office Buildings") and in effect as
of January 1 in such Operation Year (or if such rate shall be
subject to change during an Operation Year then the average
thereof for such Operation Year as reasonably estimated or
calculated by Landlord) pursuant to an agreement between the
Realty Advisory Board on Labor Relations, Incorporated (or any
successor thereto) and Local 32B of the Service Employees
International Union, AFL-CIO (or any successor thereto) covering
the wage rates of porters in Class A Office Buildings, and
(B) as to female cleaners, the minimum hourly wage prescribed to
be paid to female cleaners by applicable labor agreements and
computed on an hourly basis, in Class A Office Buildings and in
effect as of January 1 in such Operation Year (or if such rate
shall be subject to change during an Operation Year then the
average thereof for such Operation Year as reasonably estimated
or calculated by Landlord) pursuant to an agreement between said
Board (or any successor thereto) and Local 32J of said Union (or
any successor thereto) covering the wage rates of female cleaners
in Class A Office Buildings;
which said minimum hourly wage rates shall be computed on
the basis of the total weekly amount required to be paid to said
porters and female cleaners in the Building for regular work
weeks with respect to porters and with respect to female cleaners
(exclusive of any overtime or premium pay work in such regular
work weeks). Such total weekly amounts shall be exclusive of all
payments or benefits of every nature and kind (including those
required to be paid by the employer directly to the taxing
authorities or others on account of the employment) such as, but
without limiting the generality of the foregoing, social
security, unemployment and all other similar taxes, holiday and
vacation pay, incentive pay, accident, health and welfare
insurance programs, pension plans, guarantee pay plans and
supplemental unemployment benefit programs, and fringe benefits,
payments, plans or programs of a similar or dissimilar nature,
irrespective of whether they may be required or provided for in
any applicable law or regulation or otherwise. If there is no
such agreement in effect as of any such January 1 by which the
Hourly Wage Rate for porters or for female cleaners is
determinable, computations and payments shall thereupon be made
upon the basis of the Hourly Wage Rate being paid by Landlord or
by the contractor performing the cleaning services for Landlord
on such January 1 for said porters or female cleaners, as the
case may be, and appropriate retroactive adjustment shall
thereafter be made when the Hourly Wage Rate paid on such January
1 pursuant to such agreement for porters or for female cleaners
is finally determined and provided further that if as of the last
day of such Operation Year no such agreement covering the January
1 occurring in such Operation Year shall have been in effect, the
Hourly Wage Rate paid by Landlord or by the contractor performing
the cleaning services for Landlord on such January 1 for said
porters and female cleaners, as the case may be, shall be for all
purposes hereof deemed to be such Hourly Wage Rate prescribed by
such an agreement and in effect as of such January 1. As used
herein, the term "porters" shall mean that classification of
employee engaged in the general maintenance and operation of
office buildings most nearly comparable to that classification
now applicable to porters in the current agreement with said
Local 32B (which classification is presently termed "others" in
said agreement).
d) the following shall be added as subsection 5.1 (i);
"Labor Rate" for any Operation Year shall mean the sum of the
Hourly Wage Rate for the category of employees defined in the
contract above as "others".
e) the following shall be added as subsection 5.1
(j); "Base Labor Rate" shall mean the Labor Rate in effect
on December 31, 1997.
f) the following shall be added as subsection 5.1 (l);
"Ground Rent" shall mean any ground rent payable by Landlord
pursuant to any ground lease or ground leases or modification
thereof affecting the Land and/or the Chrysler Building.
g) the following shall be added as subsection 5.1
(m); "Ground Rent Base Year" shall mean the calendar year
1997.
5.2. If the Real Estate Taxes for any Tax Year shall be greater
than the Real Estate Tax Base, then Tenant shall pay to Landlord
as additional rent for such Tax Year, an amount equal to the
Tenant's Proportionate Share of such excess. Tenant hereby
acknowledges that Landlord is obligated to make a tax equivalent
payment or payments in lieu of Real Estate Taxes pursuant to an
existing ground lease affecting the Land and/or Chrysler Building
(or any modifications or amendments thereof) or new ground
lease(s). Tenant shall make payment of additional rent on account
of Real Estate Taxes pursuant to this Section 5.2,
notwithstanding the amount or amounts Landlord pays or is
obligated to pay pursuant to the aforesaid ground lease or ground
leases except that if the tax equivalent payment or payments in
lieu of Real Estate Taxes for any Tax Year shall exceed the Real
Estate Taxes for such Tax Year such payment or payments shall be
deemed to be Real Estate Taxes for the purpose of determining any
excess thereof over the Real Estate Tax Base pursuant to this
Section 5.2.
5.3. If the Labor Rate for any Operation Year shall be greater
(resulting in an excess) than the Base Labor Rate, then Tenant
shall pay to Landlord as additional rent for such Operation Year
an amount equal to the product obtained by multiplying (a) the
Area of the Premises, times (b) 1.0, times (c) the number of
cents (including any fraction of a cent) by which the Labor Rate
for such Operation Year exceeds the Base Labor Rate.
5.12. If the Ground Rent for any calendar year in which occurs
any part of the term of this Lease shall be more than the Ground
Rent for the Ground Rent Base Year, Tenant shall pay as
additional rent for such calendar year an amount equal to
Tenant's Proportionate Share of the amount by which the Ground
Rent for such calendar year is greater than the Ground Rent for
the Ground Rent Base Year (such amount is hereinafter called the
"Ground Rent Payment"). The Ground Rent Payment shall be payable
by Tenant to Landlord within ten (10) days after receipt of a
demand from Landlord therefor, which demand shall be accompanied
by a statement showing Landlord's computation of the Ground Rent
Payment."
6. The amount in Section 16.3(a) and in Section 16.4 for the
Electric Charge shall be $11,000.00 per annum for the Second Added Space.
7. Provided that Tenant shall not then be in default of any of the terms
and conditions of the Lease, Tenant shall receive a rental credit of (i)
$9,533.33 per month for the period October 1, 1996 through September 30, 1997;
(ii) a rental credit of $9,533.33 per month for the months of December of 1997,
January and February of 1998; and (iii) a rental credit of $10,633.33 per month
for the months of November and December of 2002 and for the period of January 1,
2003 thru October 31, 2003.
Tenant acknowledges that Landlord's agreement to provide to
Tenant the rent credit provided in this paragraph 7 has been granted to Tenant
as a material part of the consideration for Tenant's entering into this
Agreement, timely paying the rentals reserved in the Lease and otherwise timely
performing and observing the terms and conditions to be performed and observed
by Tenant under the Lease. Accordingly, if after having received the benefit of
all or any part of this rent credit, Tenant shall default in performing and
observing the terms and conditions to be performed and observed by Tenant under
the Lease, Landlord may, in addition to any other remedies Landlord may have
under this Lease, at its option, elect that Tenant shall immediately become
obligated to pay to Landlord all rent theretofore credited to Tenant pursuant to
this paragraph 7. In addition, if this Lease shall be terminated pursuant to the
provisions of Article 25 or Article 26, all rent credited to Tenant pursuant to
this paragraph 7 and including the date of termination, shall, at Landlord's
option, be deemed immediately due and payable.
8. Tenant acknowledges that Landlord has entered into an agreement with
XxXxxxx Corporate Real Estate ("XxXxxxx"), one of the brokers identified in
paragraph 17 of this Agreement, which provides, among other things, that at the
request of Landlord and XxXxxxx, one or more installments of the brokerage
commission payable by Landlord to XxXxxxx shall be paid by Tenant, in
consideration of which Tenant shall receive a rent credit in the amount of the
payment made by Tenant to XxXxxxx on Landlord's behalf. Tenant agrees that if
Landlord and XxXxxxx shall so request payment by Tenant of commissions payable
by Landlord to XxXxxxx, Tenant shall make the requested payment and upon such
payment shall be entitled to an unconditional and automatic rent credit equal to
the amount of such payment, such credit to be provided to Tenant with respect to
the rent installment payable for the month in which the payment by Tenant to
XxXxxxx shall have been made.
9. Landlord agrees that it shall cause the improvements to the Second
Added Space to be constructed in accordance with detailed plans and
specifications (walls, doors, ceiling, lighting, paint, carpet, HVAC,
electrical, millwork, class E devices, etc., but excluding furniture,
furnishings, office equipment, telephone equipment, etc.) prepared by and at the
expense of Tenant in accordance with Article 13 of the Lease (the construction
of such improvements herein, the "Tenant's Second Construction Work"); provided,
however, that Landlord shall not be obligated to fund any part of the cost of
the Tenant's Second Construction Work in excess of two hundred thousand dollars
and no cents ($200,000.00)("Tenant Improvement Allowance Two"). Tenant shall
submit complete, detailed architectural and mechanical drawings to Landlord
within thirty (30) days of the execution of this Agreement for Landlord's review
and comment as provided in Section 13.1. Tenant's architect shall be subject to
Landlord's reasonable approval. Upon Landlord's approval of the detailed plans
and specifications, Landlord shall seek competitive bids on the Tenant's Second
Construction Work from reputable, responsible general contractors who shall
comply with the requirements of the Lease, including the provisions of Section
13.3. Within five (5) days after receipt of the bids, Landlord and Tenant shall
select for the performance of Tenant's Second Construction Work, the single
qualified contractor which shall have submitted the lowest bid ("Bid"). If the
total cost of the Tenant's Second Construction Work, based upon the accepted Bid
exceeds the amount of the Tenant Improvement Allowance Two, then in such event,
Tenant shall, within five (5) days of receipt of the bid, either pay the amount
of the overage to Landlord ("Tenant Improvement Payment Two"), or revise the
scope of the Tenant's Second Construction Work to achieve a cost less than the
Tenant Improvement Allowance Two by revising the detailed plans and
specifications so that Landlord may seek revised pricing from the acceptable
contractor, which will be presented once more to Tenant for Tenant's reasonable
acceptance of price. Notwithstanding that the amount of the Bid may be less than
the amount of the Tenant Improvement Allowance Two, the Tenant Improvement
Allowance Two shall remain at the amount of two hundred thousand dollars and no
cents ($200,000.00). The difference between the amount of the Bid and the Tenant
Improvement Allowance Two shall be deemed to be a fund which shall be the first
sums used to pay for any additional Tenant Improvements requested by Tenant.
Upon final acceptance of the Bid either at a price which does not exceed
the Tenant Improvement Allowance Two, or upon revision of the scope of work or
the payment of the Tenant Improvement Payment Two, as appropriate, Landlord will
enter in to a contract or contracts with the contractor or contractors awarded
the Tenant's Second Construction Work. Thereafter, work will commence under the
direction of Landlord and Tenant's architect. Tenant agrees to cooperate with
Landlord in causing the Tenant's Second Construction Work to be completed
expeditiously.
Landlord and Tenant recognize that during the course of construction of
the Tenant's Second Construction Work, Tenant may desire to amend or revise the
plans and specifications and scope of the work. If such amendments or revisions
cause an increase in the project cost in excess of the Tenant Improvement
Allowance Two (as same may have been supplemented by the Tenant Improvement
Payment Two), then the increase shall be payable by Tenant to Landlord upon
Tenant's request to Landlord to issue a change order to the contractor for the
revised scope of work. Landlord shall not be obligated to issue a change order
until the payment for the cost thereof is received by Landlord.
Upon the completion of Tenant's Second Construction Work, in the event
the cost is less than the Tenant Improvement Allowance Two, Landlord will credit
the difference to Tenant in the form of a rent credit, in a monthly amount not
exceeding the monthly rent due hereunder, until the difference between the
actual cost of the Tenant's Second Construction Work and the Tenant Improvement
Allowance Two is met, once all invoices have been submitted to Landlord and paid
and Landlord has been provided general releases and waivers of lien from all
contractors, subcontractors and materialmen involved in the performance of
Tenant's Second Construction Work and the materials furnished in connection
therewith, and a certificate from Tenant's architect certifying that (i) in his
or her opinion, Tenant's Second Construction Work has been completed in a good
and workmanlike manner and completed in accordance with the final detailed plans
and specifications as approved by Landlord, and (ii) all contractors,
subcontractors and materialmen have been paid in full.
10. Simultaneously with the execution of this Agreement, Tenant shall
pay to Landlord as additional rent, two hundred thousand dollars and no cents
($200,000.00).
11. Tenant covenants, represents and warrants that Tenant has had no
dealings or negotiations with any broker or agent other than Xxxxxxx &
Xxxxxxxxx, Inc and XxXxxxx Corporate Real Estate, in connection with the
consummation of this Agreement and Tenant covenants and agrees to pay, hold
harmless and indemnify Landlord and Xxxxxxx & Xxxxxxxxx, Inc, from and against
any and all cost, expense (including reasonable attorneys' fees) or liability
for any compensation, commissions or charges claimed by any other broker or
agent other than Xxxxxxx & Wakefield, Inc and XxXxxxx Corporate Real Estate,
with respect to this Agreement or the negotiation thereof.
12. This Agreement may not be changed orally, but only by an agreement
in writing signed by the party against which enforcement of any waiver, change,
modification or discharge is sought.
13. Except as modified by this Agreement, the Lease and all covenants,
agreements, terms and conditions thereof shall remain in full force and effect
and are hereby in all respects ratified and confirmed.
14. The covenants, agreements, terms and conditions contained in
this Agreement shall bind and inure to the benefit of the parties hereto and
their respective successors and, except as otherwise provided in the Lease as
hereby supplemented, their respective assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
LANDLORD:
CHRYSLER PROPERTIES INC
By: /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx, Vice President
TENANT:
MERIT BEHAVIORAL CARE CORPORATION
By: /s/ Xxxxx X. Haggis
Xxxxx X. Haggis, Vice President - Treasury Operations
EXHIBIT A
Floor Plan
All areas, dimensions and conditions are approximate
[Diagram- Floor Plan]
