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EXHIBIT 10.2
OFFICE LEASE
000 XXXX XXXXX XXXXXX
XXXXXXX, XXXXXXXX
THIS OFFICE LEASE is made as of the 28th day of March, 1997 (hereinafter
referred to as this "Lease") between XXXXX FAMILY, L.L.C., a Delaware limited
liability company, beneficiary of Xxxx Xxxxxx Bank, not personally, but solely
as Trustee under Trust Agreement dated June 26, 1995 and known as Trust No.
95-6300 (hereinafter referred to as "Landlord"), and SAPIENT CORPORATION, a
Delaware corporation, whose present address is Xxx Xxxxxxxx Xxxxx, Xxxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxxxxxxx 00000 (hereinafter referred to as "Tenant").
WITNESSETH:
Landlord hereby leases to Tenant, and Tenant hereby accepts from Landlord,
the premises (hereinafter referred to as the "Premises") containing
approximately 40,000 square feet of rentable area on the 27th and 28th floors in
the building known as 000 Xxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx (hereinafter
referred to as the "Building"; the land owned by Landlord underlying and
adjacent to the Building is hereinafter referred to as the "Land" and the
Building and the Land are sometimes hereinafter collectively referred to as the
"Property"), as designated on the plans attached hereto as Exhibit "A", subject
to the covenants, terms, provisions and conditions of this Lease.
In consideration thereof, Landlord and Tenant covenant and agree as
follows:
1. PREMISES AND TERM
(a) The Premises consists of four separate spaces (each a "Space"), as
hereinafter described. "Space No. 1" consists of that certain space on the 27th
floor of the Building containing approximately 10,000 square feet of rentable
area and designated as "Space No. 1" on Exhibit "A:. "Space No. 2" consists of
that certain space on the 27th floor of the Building containing approximately
10,000 square feet of rentable area and designated as "Space No. 2" on Exhibit
"A." "Space No. 3" consists of space on
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the 27th and 28th floors of the Building, containing approximately 4,000 square
feet of rentable area on the 27th floor as designated as "Space No. 3" on
Exhibit "A," and approximately 6,000 square feet of rentable area on the 28th
floor at a location designated by Landlord. "Space No. 4" consists of space on
the 28th floor of the Building containing approximately 10,000 square feet of
rentable area at a location designated by Landlord. Notwithstanding the
foregoing, the rentable areas of each of the Spaces and/or the rentable area of
all of the Spaces, in the aggregate, may vary from the amounts stated above by
up to 5% (i.e., Space No. 1 shall be between 9,500 and 10,5000 rentable square
feet and the rentable area of all of the Spaces, in the aggregate, shall be
between 38,000 and 42,000 rentable square feet). The actual rentable area of
each of the foregoing Spaces shall be determined by Landlord based upon the
application of the proportion (x) that the usable area of such Space bears to
the usable area of all tenant space on the applicable floor (such usable areas
to be determined in accordance with the Standard Method of Measuring Floor Area
in Office Buildings promulgated by the Building Owners and Changers Association
International [reprinted August 1990]) to (y) the total rentable area of such
floor (which the parties agree shall be deemed to be 24,143 square feet).
(b) The lease term for Space No. 1 shall commence on the date (the "Space
No. 1 Commencement Date") that is the last to occur of (i) the date Tenant first
takes occupancy of Space No. 1 for the conduct of business and (ii) May 15,
1997. Notwithstanding the foregoing, in no event shall the Space No. 1
Commencement Date be later than June 15, 1997 (the "Outside Space No. 1
Commencement Date"). Notwithstanding the foregoing, if Tenant is delayed in
completing the Work (as defined in the Work Letter Agreement attached hereto as
Exhibit "B" [the "Work Letter"]) in Space No. 1 by reason of a delay
attributable to (x) Landlord or (y) an event of force majeure (as defined
below), and as a result of such delay Space No. 1 is not ready for Tenant to
conduct its business operations therein by the Outside Space No. 1 Commencement
Date, then the Outside Space No. 1 Commencement Date shall be extended for a
period of time equal to period of time that the Work was actually delayed on
account of such Landlord Delay or event of force majeure. For purposes of this
Paragraph 1(b), an "event of force majeure" shall mean any war, insurrection,
civil commotion, riot, act of God or the enemy, failure of power or reduction or
interruption in the furnishing of power, electricity or utilities, strike,
material shortage, lockout, picketing, fuel shortage, accident or other cause
beyond the reasonable control of Tenant.
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(c) The lease term for Space No. 2 shall commence on the date (the "Space
No. 2 Commencement Date") that is the first to occur of (i) the date Tenant
first takes occupancy of Space No. 2 for the conduct of business, (ii) May 1,
1998 or (iii) if applicable, the Early Space Commencement Date (as hereinafter
defined) for Space No. 2.
(d) The lease term for Space No. 3 shall commence on the date (the "Space
No. 3 Commencement Date") that is the first to occur of (i) the date Tenant
first takes occupancy of Space No. 3 for the conduct of business, (ii) January
1, 1999 or (iii) if applicable, the Early Space Commencement Date for Space No.
3.
(e) The lease term for Space No. 4 shall commence on the date (the "Space
No. 4 Commencement Date") that is the first to occur of (i) the date Tenant
first takes occupancy of Space No. 4 for the conduct of business, (ii) May 1,
1999 or (iii) if applicable, the Early Space Commencement Date for Space No. 4.
(f) For purposes of this lease, the "Term" shall commence on the Space No.
1 Commencement Date and, unless sooner terminated as provided herein, shall end,
absolutely and without the need for notice from either party to the other, on
the last day of the eighty-fourth (84th) full calendar month following the Space
No. 1 Commencement Date (the "Termination Date"). For purposes of this Lease, at
any time the "Premises" shall constitute those portions of Space Xx. 0, Xxxxx
Xx. 0, Xxxxx Xx. 0, and Space No. 4 that are then leased by Landlord to Tenant.
(g) Notwithstanding the previous provisions of this Xxxxxxxxx 0, Xxxxxx may
elect to lease all or portions of the Spaces prior to the respective dates set
forth above, as follows:
(i) Immediately after written notice to Landlord, Tenant may lease
that portion of Space No. 2 containing approximately 2,000 square feet of
rentable area on the 27th floor and designated as the "Space No. 2 Early Space"
on Exhibit "A", at any time from and after the Space No. 1 Commencement Date;
(ii) Immediately after written notice to Landlord, Tenant may lease
any portion of Space No. 2 or any portion of Space No. 3 located on the 27th
floor from and after January 1, 1998; and
(iii) Upon not less than five (5) months prior written
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notice to Landlord, Tenant may lease any portion of Space No. 3 located on the
28th floor or any portion of Space No. 4 from and after July 1, 1998.
Tenant's notice specifying the portion of the Space Tenant desires to lease
early ("Early Space") shall designate the date Tenant desires the lease term for
such Early Space to commence (the "Early Space Commencement Date"). If Tenant
elects to lease any such Early Space, then (w) Landlord shall make the
applicable early space available for Tenant to perform construction activities
therein (in accordance with the terms and conditions of the Work Letter) at
least three (3) months prior to the applicable Early Space Commencement Date
(such date when Landlord is to deliver possession of a Space [or an Early Space]
is hereinafter referred to as a "Delivery Date"), provided that the Delivery
Date for Space No. 1 shall be the date that this Lease is fully executed and
delivered); (x) commencing on the applicable Early Space Commencement Date,
Tenant shall pay Rent (as hereinafter defined) for such Early Space at a rental
rate per rentable square foot of such Early Space equal to the rental rate then
payable per rentable square foot of Space No. 1; (y) within thirty (30) days
after Tenant's election to lease such Early Space, Landlord and Tenant shall
execute an instrument confirming Tenant's lease of such Early Space; and (z) if
the Early Space is less than an entire Space, Tenant, at its expense, shall
install gates, temporary walls or other barriers reasonably satisfactory to
Landlord separating such Early Space from the balance of the Space.
2. BASE RENT. Tenant shall pay Base Rent to Landlord as follows:
Payable in Monthly
Year of Term Annual Amount Installments of
------------ ------------- ---------------
For Space No. 1 228,000.00 19,000.00
2 231,999.96 19.333.33
3 236,000.04 19,666.67
4 240,000.00 20,000.00
5 243,999.96 20,333.33
6 248,012.04 20,666.67
7 252,000.00 21,000.00
For Space No. 2** 231,999.99 19,333.33
3 236,000.04 19,666.67
4 240,000.00 20,000.00
5 243,999.96 20,333.33
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6 248,012.04 20,666.67
7 252,000.00 21,000.00
For Space 3** 2 231,999.96 19,333.33
3 236,000.04 19,666.67
4 240,000.00 20,000.00
5 243,999.96 20,333.33
6 248,012.04 29,666.67
7 252,000.00 21,000.00
For Space 4** 3 236,000.04 19,666.67
4 240,000.00 20,000.00
5 243,999.96 20,333.33
6 248,012.04 29,666.67
7 252,000.00 21,000.00
* Commencing on the Space No. 1 Commencement
Date
** Subject to the early lease of a portion of such Space as
described in Paragraph 1 (g) above.
Base rent shall be paid in advance on or before the first day of each calendar
month during the Term. If the lease term for any Space (or any portion thereof)
commences other than on the first day of a month or ends other than on the last
day of a month, the Base Rent (including any holdover rent) for such Space (or
portion thereof) for such month shall be prorated.
3. IMPROVEMENT AND FIXTURING OF PREMISES; DELIVERY OF POSSESSION.
(a) LANDLORD'S WORK. Landlord covenants that upon the applicable
Delivery Date for each space such Space shall include the Base Building
improvements listed on Exhibit "F" attached hereto. Except as otherwise provided
in the immediately preceding sentence, Tenant shall accept each Space in its
then "as is" physical condition. Tenant shall construct each Space for Tenant's
use and occupancy in accordance with the Work Letter. Landlord shall contribute,
in accordance with the terms of the Work Letter, an amount equal to $40.00 per
square foot of rentable space in the Premises ("Landlord's Contribution")
towards the cost of the Work. Tenant shall pay all costs of the Work in excess
of Landlord's Contribution.
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(b) DELIVERY OF POSSESSION. Landlord shall use reasonable efforts to
receive exclusive possession of each space from the current tenants in a timely
manner so that Landlord can meet the requirements of Pargraph1 above. If
Landlord shall, for any reason, fail to make available to Tenant possession of
any Space (or any portion thereof) on or before the Delivery Date for such Space
(or such portion thereof), Landlord shall not be subject to any liability for
such failure except as expressly set forth herein. Under such circumstances, the
Space No. 1 Commencement Date, Space No. 2 Commencement Date, Space No. 3
Commencement date or Space No. 4 Commencement Date, as applicable (or, if
relating to Early Space, the applicable Early Space Commencement Date), shall be
deferred by a number of days equal to the number of days that Landlord was
delayed in delivering possession of such Space (or portion thereof) to Tenant
(the Space No.1 Commencement Date, Space No. 2 Commencement Date, Space No. 3
Commencement Date, Space No. 4 Commencement Date, and each Early Space
Commencement Date, are sometimes hereinafter referred to as a "Commencement
Date"), but not beyond the date that Tenant first takes occupancy of the
applicable Space for the conduct of business. Furthermore, if Landlord shall,
for any reason, fail to make available to Tenant possession of any Space within
ninety (90) days after the scheduled Delivery Date, then Tenant shall be
entitled to abatement of Base Rent next coming due in an amount equal to the
product of (x) the number of days in the period commencing upon the expiration
of the foregoing 90-day period and expiring on the date immediately preceding
the day Landlord makes available to Tenant possession of the applicable Space
(but not to exceed the number of days that the scheduled Commencement Date of
the applicable Space is actually delayed due to Landlord's failure to timely
deliver possession of such Space) multiplied by (y) the product of (I) the
monthly installment of Base Rent initially payable for such Space divided by
(II) thirty (30) (the "Scheduled Daily Rent"). Furthermore, if delivery of
possession of any Space is delayed more than one hundred fifty (150) days beyond
the scheduled Delivery Date the scheduled Daily Rent shall thereafter be
increased to 150% of the prior amount. Furthermore, if Landlord shall, for any
reason, fail to make available to Tenant possession of any Space within ninety
(90) days after the scheduled Delivery Date, in lieu of incurring the abatement
liability described above, to the extent suitable space reasonably acceptable to
Tenant is available in the Building, Landlord shall provide Tenant with
temporary space (the "Temporary Space") in the Building at locations designated
by Landlord for Tenant to conduct its business. Tenant's occupancy of the
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Temporary Space shall be upon all of the same terms and provisions as are
contained in this Lease, except as follows:
(i) Tenant shall not be obligated to pay Base Rent or Additional
Rent for the Temporary Space, but Tenant shall pay for all electricity used in
the Temporary Space.
(ii) Tenant's right to occupy the Temporary Space shall commence
on the date such Temporary Space is delivered by Landlord and shall expire on
the first to occur of (a) the Commencement Date of the applicable Space (as
deferred pursuant to the provisions of this Paragraph 3) or (b) the date that
this Lease or Tenant's right to possession of the Premises is terminated.
(iii) Tenant shall accept the Temporary Space, if at all, in an
"as-is", "where is" physical condition, without any representation, credit or
allowance from Landlord with respect to the condition or improvement thereof.
(iv) It shall be a condition of Tenant's right to occupy the
Temporary Space that Tenant is not in Default under this Lease at any time while
Tenant is so occupying the Temporary Space.
Such deferral of the Commencement Date, abatement of Rent and delivery of
temporary space shall constitute Tenant's sole and exclusive rights and remedies
with respect to any such failure to timely deliver possession of a Space. There
shall be no deferral of a Commencement Date, abatement of Rent or delivery of
temporary space, however, if any such failure is caused in whole or part by a
delay caused by Tenant.
4. ADDITIONAL RENT. In addition to paying the Base Rent specified in
Paragraph 2 hereof, Tenant shall pay as "additional rent" the amounts determined
as hereinafter set forth in this Paragraph 4. Any and all sums, expenses and
charges due or payable by Tenant under this Lease besides Base Rent, and any and
all costs, expenses and attorneys' fees incurred by Landlord in collecting any
and all Base Rent, amounts due pursuant to this Paragraph 4, and such other
sums, expenses, charges, or in enforcing any of Tenant's obligations under this
Lease, shall constitute "additional rent." The Base Rent and such additional
rent are sometimes herein collectively referred to as "Rent". All amounts due
under this Lease as additional rent shall be payable in the same manner and at
the same place as the Base Rent.
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(a) DEFINITIONS. As used in this Paragraph 4, the terms:
(i) "Base Year" shall mean the calendar year 1997.
(ii) "Calendar Year" shall mean each calendar year in which any
part of the Term falls, through and including the year in which the Term
expires.
(iii) "Tenant's Proportionate Share" at any time shall mean the
percentage obtained by dividing the rentable area of the Premises at such time
by the rentable area of the Building. Subject to Tenant's ability to lease a
portion of a Space early as provided in Paragraph 1 (g) above, effective as of
the Commencement Date set forth below, "Tenant's Proportionate Share" shall be
the corresponding cumulative amounts set forth below:
Space Commencement Date Tenant's Proportionate Share
----------------------- ----------------------------
Space No. 1 1.540%
Space No. 2 3.081%
Space No. 3 4.621%
Space No. 4 6.161%
(iv) "Taxes" shall mean all real estate taxes and assessments
(general, extraordinary, special or otherwise) transit taxes, water and sewer
rents, taxes based upon the receipt of rent, including gross receipts or sales
taxes, or similar impositions and expenses, levied or assessed upon or with
respect to the Land and/or Building and ad valorem taxes for any personal
property used in connection therewith and all taxes levied or assessed upon or
with respect to the leasing, use or occupancy of the Property or any part
thereof or the rents or receipts paid or payable to Landlord therefrom
(including, without limitation, any general gross receipts tax and any income
tax levied or assessed especially with respect to real property or any type of
real property which includes the Property), which Landlord shall become
obligated to pay with respect to the Property during any Calendar Year, and
portion of which occurs during the Term (without regard to any different fiscal
year by the respective governmental or municipal authority). Should the State of
Illinois, or any political subdivision thereof, or any other governmental
authority having jurisdiction over the Property, impose a tax, assessment,
charge or
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fee, which Landlord shall be required to pay, wholly or partially in
substitution for or in addition to any of the above Taxes, all such taxes,
assessments, fees or charges shall be deemed to constitute Taxes hereunder.
"Taxes" for each Calendar Year subsequent to the Base Year shall include all
fees and costs, including attorneys' fees, appraisals and consultants' fees,
reasonably incurred by Landlord in seeking to obtain a reduction of, or a limit
on, any increase in any Taxes (regardless of whether any reduction or limitation
is obtained). "Taxes" shall not include Landlord's net income taxes (except as
otherwise expressly provided in the Paragraph 4 (a) (iv) with respect to new
Taxes as a substitution for or in addition to any of the above Taxes) or
franchise taxes.
(v) "Operating Expenses" shall mean all reasonable expenses,
costs and disbursements (other than Taxes) of every kind and nature (determined
for the applicable Calendar Year on an accrual basis and, to the extent
applicable, in accordance with generally accepted accounting principles
consistently applied) paid or incurred by or on behalf of Landlord in connection
with the ownership, management, operation, maintenance or repair of the
Property, except the following:
(A) Costs of alterations of any tenant's premises;
(B) Principal or interest payments on loans secured by mortgages
or trust deeds on the Building and/or on the land.
(C) Costs of capital improvements (as determined in accordance
with generally accepted accounting principles), except that Operating Expenses
shall include the cost as amortized over such number of years as Landlord may
reasonably determine, with interest at the rate of 15% per annum on the
unamortized amount, of any capital improvements made or installed after the Base
Year which, (1) Landlord reasonably determines will have the effect of reducing
(or limiting an expected increase of) any component cost included within
Operating Expenses (provided the amount of such costs included in Operating
Expenses in any Calendar Year shall not exceed the amount that Operating
Expenses were reduced (or an expected increase was limited) for such Calendar
Year, as reasonably determined by Landlord), (2) are made or installed to keep
the Property in compliance with all governmental rules and regulations
applicable from time to time thereto, or (3) under generally accepted accounting
practices maybe expenses or treated as deferred expenses (and the amortization
and interest so
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determined for each Calendar Year shall be included in Operating Expenses for
that Calendar Year);
(D) Leasing commissions for space in the Building;
(E) The cost of any work performed or services provided (such as
separately metered electricity) for any tenant (including Tenant) at such
tenant's cost, or provided by Landlord without charge as a concession (such as
free rent or improvement allowances);
(F) The cost of installing, operating and maintaining any
specialty service, such as an observatory, broadcasting facility, luncheon club,
retail store, sundry shop, newsstand, concession, or athletic or recreational
club, unless provided as an amenity to all tenants without additional charge;
(G) The salaries of Landlord's personnel above the level of
Building Manager (provided portions of the salaries and other employment costs
of off-site personnel of all levels who provide accounting services for the
Building, as reasonably allocated by Landlord to the Building, may be included
in Operating Expenses);
(H) The cost of any work performed or service provided for any
tenant of the Building (other than Tenant) to a materially greater extent or in
a materially more favorable manner than that made available to Tenant;
(I) The cost of any work performed or service provided (such as
electricity) for any facility other than the Building (such as a garage) for
which fees are charged;
(J) The cost of any items for which Landlord is reimbursed by
insurance proceeds, condemnation awards, a tenant of the Building other than
through payments comparable to the payments required of Tenant hereunder
pursuant to this Paragraph 4), or otherwise;
(K) Depreciation and rental under any ground lease or other
underlying lease;
(L) Costs incurred in procuring new tenants, or any fee in lieu
of real estate brokerage commissions;
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(M) Any advertising expenses;
(N) Any costs representing an amount paid to an affiliate of
Landlord which is in excess of the amount which would have been paid in the
absence of such relationship;
(O) Payments for rented equipment, the cost of which equipment
would constitute a capital expenditure which Landlord could not include in
Operating Expenses if such equipment were purchased;
(P) Any expenses for repairs or maintenance which are covered by
warranties, guarantees or service contracts, to the extent such warranties,
guarantees and service contracts are actually honored; and
(Q) Legal expenses arising out of the enforcement of the
provisions of any lease, including this Lease, or out of negotiating leases.
(b) EXPENSE ADJUSTMENT
(i) Tenant shall pay as additional rent for each Calendar Year,
that amount ("Expense Adjustment Amount") which is Tenant's Proportionate Share
of the amount of by which the Operating Expenses incurred with respect to such
Calendar Year exceed the amount thereof incurred with respect to the Base Year.
If the occupancy at anytime during the Base Year or any Calendar Year is less
than ninety-five percent (95%), then Operating Expenses for that Base Year or
Calendar Year shall be "grossed up" to that amount of Operating Expenses that
Landlord reasonably projects would normally be expected to be incurred during
the Base Year or Calendar Year if the Building were ninety-five percent (95%)
occupied during the entire Base Year or Calendar Year. Landlord shall provide in
Landlord's annual statement of the Expense Adjustment Amount a reasonably
detailed description of the methodology employed by Landlord to achieve the
gross up of the Operating Expenses. Only those component expenses that are
affected by variations in occupancy levels shall be grossed up. Taking account
of the different Base Year Operating Expenses for the tenants of the Building,
if during any Calendar Year, as a result of the foregoing "gross up" provision,
the total increases charged to tenants in the Building exceed one hundred
percent (110%) of the actual increase in Operating Expenses paid by the Landlord
over the Base Year Operating Expenses, then Tenant's
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Proportionate Share of the amount in excess of one hundred percent (100%), as
grossed up, shall be returned to Tenant.
(ii) The Expense Adjustment Amount with respect to each Calendar
Year shall be paid in monthly installments, payable in advance on the first day
of each calendar month during the course of such year, in amounts estimated from
time to time by Landlord and communicated by written notice to Tenant. Landlord
shall cause to be kept books and records showing Operating Expenses in
accordance with generally accepted accounting principles. Following the close of
each Calendar Year, Landlord shall cause the amount of the Expense Adjustment
Amount for such Calendar Year to be computed based on Operating Expenses for
such Calendar Year, and Landlord shall deliver to Tenant a statement of such
amount (based upon generally accepted accounting principles, to the extent
applicable) and Tenant shall pay any deficiency as shown by such statement to
Landlord within 30 days after receipt of such statement. Landlord shall use
reasonable efforts to deliver such statement by April 1 of the immediately
following Calendar Year (provided Landlord's failure to deliver the statement by
such date shall not affect Landlord's or Tenant's obligations in this clause
(ii)). If the total of the estimated monthly installments paid by Tenant during
any Calendar Year exceed the actual Expense Adjustment Amount due from Tenant
for such Calendar Year, then, at Landlord's option, such excess shall be either
credited against payments next due hereunder or refunded by Landlord, provided
Tenant is not then in Default hereunder. Tenant's obligations to pay the Expense
Adjustment Amount and Landlord's obligations to refund any excess amount shall
survive the expiration or earlier termination of this Lease.
(c) ADJUSTMENT FOR SERVICES NOT RENDERED BY LANDLORD. If Landlord is
not furnishing any particular work or service (the cost of which, if furnished
by Landlord would be included in Operating Expenses) to a tenant who had
undertaken to itself to perform or obtain such work or service in lieu of the
furnishing thereof by Landlord, Operating Expenses shall be deemed for purposes
of this Paragraph 4 to be increased by an amount equal to the additional
Operating Expenses, as reasonably determined by Landlord, which would have been
incurred during such period if Landlord had at its own expense furnished such
work or service to such tenant.
(d) TAX ADJUSTMENT. Tenant shall pay as additional rent, in addition
to the Base Rent required by Paragraph 2 hereof,
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an amount ("Tax Adjustment Amount") equal to Tenant's Proportionate Share of the
amount by which the Taxes with respect to each Calendar Year exceeds the Taxes
with respect to the Base Year. The Tax Adjustment Amount with respect to each
Calendar Year shall be paid in monthly installments, payable in advance on the
first day of each calendar month during the course of such year in amounts
estimated from time to time by Landlord and communicated by written notice to
Tenant. Following the close of each Calendar Year, Landlord shall cause the
amount of the Tax Adjustment Amount for such Calendar Year to be computed based
on Taxes for such Calendar Year and Landlord shall deliver to Tenant a statement
of such amount and Tenant shall pay any deficiency as shown by such statement to
Landlord within 30 days after receipt of such statement. If the total of the
estimated monthly installments paid by Tenant during any Calendar Year exceeds
the actual Tax Adjustment Amount due from Tenant for such Calendar Year, then,
at Landlord's option such excess shall be either credited against payments next
due hereunder or refunded by Landlord, provided Tenant is not then in Default
hereunder (provided that if such excess exceeds the monthly installment of Rent
next coming due, such excess shall be refunded to Tenant, rather than credited
against Rent, by Landlord). The amount of any refund of Taxes received by
Landlord shall be credited against Taxes for the year in which such refund is
received. In determining the amount of Taxes for any year, the amount of special
assessments to be included shall be limited to the amount of the installment
(plus any interest payable thereon) of such special assessment required to be
paid during such year as if Landlord had elected to have such special assessment
paid over the maximum period of time permitted by law; if the authority to whom
such assessment is to b paid shall not permit such assessment to be paid in
installments, the amount of such assessment shall be treated as being amortized
over such number of calendar years, beginning with the Calendar Year in which
the assessment is payable, as Landlord shall reasonably determine, with interest
at the rate of 15% per annum on the unamortized amount, and such amortization
and interest for each Calendar Year shall be included in Taxes for that Calendar
Year.
(e) PARTIAL YEAR. If only part of any Calendar Year shall fall within
the Term, the amounts computed as additional rent, with respect to such Calendar
Year under the foregoing provisions of this Paragraph 4 shall be prorated in
proportion to the portion of such Calendar Year falling within the Term, but the
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expiration or termination of this Lease prior to the end of such Calendar Year
shall not impair Tenant's obligation hereunder to pay such prorated portion of
such additional rent with respect to that portion of such year falling within
the Term, and such obligation shall survive the expiration or termination of
this Lease.
(f) DISPUTES. Any statement furnished to Tenant by Landlord under the
provisions of this Paragraph 4 shall constitute a final determination as between
Landlord and Tenant as to the rent set forth therein due from Tenant for the
period represented thereby, unless Tenant, within ninety (90) days after such
statement is furnished, shall give a notice to Landlord that it disputes the
correctness thereof, specifying in detail the basis for such assertion. Pending
resolution of such dispute, Tenant shall pay all disputed amounts in accordance
with the statement furnished by Landlord. Landlord agrees, upon prior written
request, during normal business hours to make available for Tenant's inspection,
at Landlord's offices, Landlord's books and records which are relevant to any
items in dispute. If Tenant makes such timely written exception, a certification
as to the proper amount of Expense Adjustment Amount and Tax Adjustment Amount
shall be made by an independent certified public accountant selected by Landlord
(but reasonably acceptable to Tenant), which shall be final and conclusive.
Tenant agrees to pay the cost of such certification unless it is determined that
Landlord's original determination of the Expense Adjustment Amount and Tax
Adjustment Amount was in error by more than five percent (5%), in the aggregate,
in which case Landlord agrees to pay the cost of such certification.
(g) PLACE OF PAYMENT. Tenant shall, without any demand therefor and
without setoff, reduction or recoupment, pay, to landlord's agent, Amerimar
Xxxxx Management Co., Inc. at 000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxxx 00000 Attention: Accounts Payable ("Agent") or to such other person
and/or at such other place as Landlord may from time to time direct by notice
given to Tenant, the Base Rent as well as all other sums which may become due
by Tenant under this Lease. All such other sums shall be payable as additional
rent. All checks shall be made payable to XXXXX FAMILY, L.L.C. Tenant hereby
covenants and acknowledges that Tenant's obligation to pay Base Rent and all
additional rent pursuant to this Paragraph 4 is independent of each and every of
Landlord's covenants and agreements contained in this Lease.
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(h) DELAY IN COMPUTATION. Delay in computation of the Expense
Adjustment Amount or the Tax Adjustment Amount shall not be deemed a default
hereunder or a waiver of Landlord's right to collect any of such amounts.
Notwithstanding the foregoing, if Landlord fails to provide Tenant with a
statement of Tenant's Expense Adjustment Amount for any Calendar Year by April 1
of the immediately following Calendar Year, any deficiency owed by Tenant to
Landlord shall be payable by Tenant in equal monthly installments over the
balance of such Calendar Year. Furthermore, if Landlord fails to notify Tenant
of any deficiency owed by Tenant with respect to Tenant's Expense Adjustment
Amount or Tax Adjustment Amount for any calendar Year within two (2) years after
the expiration of such Calendar Year, Landlord shall be deemed to have waived
its right to collect such deficiency.
(i) NO CREDIT. Tenant shall not be entitled to any rebate or credit in
the event either Taxes or Operating Expenses for any Calendar Year is lower than
the Base Year.
5. USE OF PREMISES. Tenant shall use and occupy the Premises solely for
general office purposes, including occasional client seminars, in keeping with
the general use of the other tenants of the Building, and for no other purpose.
The maximum permitted occupancy of the Premises is one person for each 175
rentable square feet of the Premises (excluding (i) occasional, short-term
occupancy by a reasonably greater number of persons in connection with
presentations to Tenant's customers and (ii) occupancy by a greater number of
persons necessitated by Landlord's failure to deliver any Space to tenant when
required under this Lease).
6. CONDITION OF PREMISES. Tenant's taking possession of the Premises or any
portion thereof shall be conclusive evidence that the Premises or any such
portion was in good order and satisfactory condition when Tenant took
possession, subject to Landlord's obligation to provide the Base Building
improvements described in Exhibit "F" attached hereto. At the expiration or
other termination of this Lease or of Tenant's right of possession, Tenant shall
leave the Premises, and during the Term will keep the same, in good order and
condition, ordinary wear and tear, damage by fire or other casualty (which fire
or other casualty has not occurred through the negligence of Tenant or those
claiming under Tenant or their employees or invitees respectively) alone
excepted; and for that purpose, Tenant shall make all necessary repairs and
16
replacements. Tenant shall give Landlord prompt notice of any damage to or
accident upon the Premises and of any breakage or defects in the window glass,
wires or plumbing, heating, ventilating or cooling or electrical apparatus or
systems on or serving the Premises. Landlord shall comply with all laws, rules,
orders, ordinances and regulations at anytime issued or in force by any lawful
authority, applicable to any common areas of the Building to which Tenant has
access and to the Base Building mechanical, electricity and plumbing systems
serving the Premises. Tenant shall at the expiration or termination of this
Lease or of Tenant's right of possession, remove from the Premises all
furniture, trade fixtures, office equipment and all other items of Tenant's
property so that Landlord may again have and repossess the Premises. Tenant
shall comply with all laws, rules, orders, ordinances and regulations at anytime
issued or in force by any lawful authority, applicable to Tenant or any other
occupant of the Premises, or to the Premises, or to the use or occupancy of the
Premises. Tenant shall repair, at or before expiration or termination of this
Lease or of Tenant's right of possession, all damage done to the Premises or any
other part of the Building by installation or removal of furniture and property
by Tenant or any subtenant or any agent, employee or invitee of Tenant or any
subtenant. Tenant shall, upon demand, pay to Landlord the amount of any damages
suffered or incurred by Landlord as a result of any injury to any part of the
Property other than the Premises, done by Tenant or any subtenant or any agent,
employee or invitee of Tenant or any subtenant.
7. SERVICES.
(a) LIST OF SERVICES. Landlord shall provide the following services,
and no others, on all days during the Term, except Sundays and holidays, unless
otherwise stated:
(i) Landlord shall provide heating and air conditioning when
necessary for normal comfort in the Premises (but Landlord shall not be required
to provide heating or air conditioning to any extent in excess of that which is
within the parameters of any federal, state or local requirements or
recommendations which may be applicable or with which Landlord in good faith may
decide to comply) from Monday through Friday, during the period from 8 a.m. to 6
p.m. and on Saturday during the period from 8 a.m. to 1 p.m., holidays excepted.
Tenant, within ten days after its receipt of each xxxx therefor, will pay for
all heating and air conditioning requested and furnished at other times (the
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current after-hours charge for heating and air conditioning is $100 per hour per
floor, which charge is subject to change from time to time) or required due to
heat producing equipment, or equipment requiring a controlled climate, installed
by or for Tenant, at reasonable and non-discriminatory rates to be established
from time to time by Landlord. "Holidays" means: Thanksgiving Day, Christmas
Day, New Year's Day, Memorial Day, Independence Day, Labor Day and any other day
recognized as a holiday by the service unions representing workers providing
services to the Building or customarily designated as a holiday by landlords
operating first-class office buildings in the downtown area of the City of
Chicago. If the Building standard air conditioning facilities serving the
Premises are not sufficient to meet the requirements specified above or if
Landlord's ability to provide sufficient air conditioning services to any other
occupant in the Building is adversely affected because (i) the Premises are
occupied by more than one person for each 200 rentable square feet of the
Premises; (ii) the connected electrical load of lighting fixtures and desk-top
portable office equipment operated in the Premises exceeds the limits stated in
the first sentence of subparagraph 7(a)(ii) below; or (iii) Tenant's activities
in the Premises (other than normal business office activities) materially and
adversely affect the temperature in the Premises or the Building, then Tenant,
at its sole expense, shall either (i) furnish, install, maintain and operate
sufficient supplemental air conditioning facilities in the Premises to eliminate
such condition or (ii) modify its occupancy, its use of electricity or its
activities to eliminate such condition. If Tenant fails to eliminate such
condition as required above within thirty (30) days after written notice from
Landlord, Landlord, at Tenant's expense, may install such supplementary air
conditioning facilities in the Premises.
(ii) Subject to subparagraph 7(b) hereof, Landlord shall provide
electrical energy for standard building lighting fixtures provided by Landlord
and for the operation of desk-top portable office equipment, provided that (A)
the connected electrical load of such equipment does not exceed an average of
one watt per square foot of the Premises and (B) the electricity so furnished
for equipment uses will be at a nominal 120 volts and no electrical circuit for
the supply of such use need have a current capacity exceeding 20 amperes. If
Tenant's requirements for electricity are in excess of those set forth in the
preceding sentence, and if, in Landlord's sole judgment, Landlord's facilities
are inadequate for such additional requirements and if electrical energy for
such additional requirements is available to
18
Landlord, Landlord upon written request and at the sole cost and expense of
Tenant will furnish and install, or, at Landlord's sole discretion, permit
Tenant to furnish and install, such additional wires, risers, conduits, feeders
and switchboards as reasonably may be required to supply such additional
requirements of Tenant provided (1) that the same shall be permitted by
applicable laws and insurance regulations, (2) that, in Landlord's sole
judgment, the same are necessary and will not cause permanent damage or injury
to the building or the Premises or cause or create a dangerous or hazardous
condition or entail excessive or unreasonable alterations or repairs or
interfere with or disturb other tenants or occupants of the Building, (3) that,
in Landlord's sole judgment, the same will not in any way diminish or adversely
affect the electricity which Landlord deems should remain available for other
tenants, and (4) that Tenant, at Tenant's expense, shall concurrently with the
making of such written request, execute and deliver to Landlord, Tenant's
written undertaking, in form and substance satisfactory to Landlord, obligating
Tenant to fully and promptly pay the entire cost and expense of so furnishing
and installing any additional wires, risers, conduits, feeders and/or
switchboards.
Tenant shall bear the reasonable and non-discriminatory cost of replacement of
lamps, starters and ballasts for lighting fixtures, and shall reimburse Landlord
therefor within 15 days of Landlord's submission of each xxxx therefor.
(iii) City water from the regular Building outlets for drinking,
lavatory and toilet purposes.
(iv) Janitorial services Monday through Friday in and about the
Premises (except holidays), generally in accordance with the specifications
attached hereto as Exhibit "D". If any material use made of the Premises after 6
p.m. shall by reason of work force scheduling or security, overtime, union
rules, general security or otherwise cause any increase in Landlord's cost for
providing janitorial services, Tenant shall, as additional rent, pay all bills
for reimbursement of Landlord for such increase, within 10 days after Tenant's
receipt of such xxxx.
(v) Automatic passenger elevator service at all times for
authorized building personnel.
(b) BILLING FOR ELECTRICITY. Tenant's use of electric service shall be
separately metered and Tenant shall pay the costs
19
of all electricity used in the Premises directly to the utility company
providing the same.
(c) INTERRUPTION OF SERVICES. Tenant agrees that Landlord shall not be
liable for damages (by abatement of rent or otherwise) for failure to furnish or
any delay in furnishing any service, or for any diminution in the quality of
quantity thereof, when such failure or delay or diminution is occasioned, in
whole or in part, by repairs, renewals, or improvements, by any strike, lockout
or other labor trouble, by inability to secure electricity, gas, water, or other
fuel at the Building after reasonable effort do to do, by any accident or
casualty whatsoever, by act or default of Tenant or other parties, or by any
other cause beyond Landlord's reasonable control; and such failures or delays or
diminution shall never be deemed to constitute an eviction or disturbance of the
Tenant's use and possession of the Premises or to relieve Tenant from paying
Rent or performing any of its obligations under this Lease. Notwithstanding the
foregoing, if for any reason other than as a result of an act or omission of
Tenant or any of its subtenants, assignees, agents, employees, contractors or
invitees, or other than as a result of a fire or casualty as described in
Paragraph 11 below, any service is not furnished to the Premises and if as a
result thereof the Premises, or a "material part" (as defined below) of the
Premises, is rendered untenantable or inaccessible for a period of five (5)
consecutive business days, and Tenant does not occupy the Premises, or such
material part thereof which is rendered untenantable or inaccessible, during
such 5-business day period, then as Tenant's sole remedy for such failure to
furnish such service during such period, the Base Rent, Expense Adjustment
Amount and Tax Adjustment Amount payable for such portion of the Premises which
Tenant does not so occupy shall xxxxx for the period commencing on the
expiration of said five (5) business day period and expiring on the date such
service is restored or Tenant is able to resume occupancy of the Premises or
such material part thereof, as the case may be. Furthermore, if for any reason
other than as a result of an act or omission of Tenant or any of its subtenants,
assignees, agents, employees, contractors or invitees, or other than as a result
of a fire or casualty as described in Paragraph 11 below, any service is not
furnished to the Premises and if as a result thereof all of the Premises is
rendered untenantable or inaccessible for a period of two hundred forty (240)
consecutive days, and Tenant does not occupy the Premises during such 240-day
periods, then in lieu of continuing the abatement described in the preceding
sentence, Tenant may elect to terminate this Lease effective as of the date
20
the Premises were rendered untenantable by delivering written notice to Landlord
within thirty (30) days after the expiration of such 240-day period, in which
case neither party shall have any further liabilities or obligations hereunder,
except those liabilities and obligations that are intended to survive the
expiration or termination of this Lease. (As used herein, the phrase "material
part" shall mean an amount in excess of thirty-three percent [33%] of the
rentable area of the Premises which has been tendered to Tenant for occupancy as
of the time of such interruption.)
(d) EXISTING SUPPLEMENTAL HVAC. Five (5) supplemental cooling units
(the "Supplemental Units") are currently located on the 27th floor of the
Building. When Tenant leases a Space which includes any Supplement Units, Tenant
shall have the right, at no additional charge, to use such Supplement Units.
Tenant shall accept each Supplemental Unit in its "as is" condition. Tenant
shall be responsible for all costs incurred to operate and maintain the
Supplemental Units and shall enter into a contract, with a competent contractor,
for the regular and preventative maintenance of the Supplemental Units. The
Supplemental Units shall remain the property of Landlord and Tenant shall
surrender each Supplemental Unit to Landlord at the Termination Date in the same
condition as when Tenant first received the right to use such Supplement Unit,
subject to reasonable wear and tear (provided Tenant may return a Supplemental
Unit in a non-functioning state if its economic useful life has expired).
8. ALTERATIONS
(a) Tenant shall not, without the prior written consent of Landlord
(which consent shall not be unreasonably withheld), make any alterations,
improvements or additions to the Premises. Landlord shall notify Tenant whether
it consents to a proposed alteration, improvement or addition (1) within three
business days after receipt of all plans, specifications, and other items
required by Landlord with respect to an alteration, improvement or addition that
will cost less than $10,000 or (ii) within ten (10) days after receipt of all
such items with respect to an alteration, improvement or addition that will cost
$10,000 or more. If Landlord consents to any alterations, improvements or
additions, it may impose such conditions with respect thereto as Landlord deems
appropriate, including, without limitation, Landlord's approval of the
contractors to perform the work, contractor's lien waivers, insurance against
liabilities which may arise out of such work,
21
plans, specifications and permits necessary for such work and as-build drawings
upon completion of such work. Notwithstanding the foregoing, no consent shall be
necessary for any alteration (i) if the cost of such alteration plus the cost of
all other such decorative or cosmetic alterations on the particular floor during
the preceding twelve (12) month period is less than $1.00 per rentable square
foot of the Premises on such floor, (ii) that does not require the issuance of a
building permit and (iii) that does not adversely affect the structural elements
of the Building or the base Building mechanical, electrical or plumbing systems,
the exterior of the Building, the common areas of the Building or the use by
other tenants in the Building of their demised premises. Tenant shall notify
Landlord of the performance of any such alteration promptly after completion.
All work done by Tenant or its contractors pursuant to and in accordance with
this Paragraph 8, or otherwise shall be done in a first-class workmanlike
manner, using only good grades of materials and without disturbing other
tenants, shall be done in compliance with all insurance requirements and all
applicable laws or ordinances and rules and regulations of governmental
departments or agencies and shall be done by responsible contractors and
subcontractors approved by Landlord in advance (which approval shall not be
unreasonably withheld or delayed) whose engagement will not in Landlord's
reasonable opinion, and in fact does not, result in any labor dispute at the
Building, whether in connection with any construction at the Building, the
operation of the Building or otherwise.
(b) All alterations, additions or improvements made by Tenant and all
fixtures attached to the Premises shall become the property of Landlord and
remain at the Premises or, at Landlord's option, any or all of the foregoing
shall be removed at the cost of Tenant before the expiration or sooner
termination of this lease and in such event Tenant shall repair all damage to
the Premises caused by the installation and/or removal thereof. Notwithstanding
the foregoing, at the time that Tenant request Landlord to consent to any
alterations, additions or improvements (including the alterations, additions and
improvements to be constructed by Tenant pursuant to the Work Letter Agreement),
Tenant may request in writing that Landlord (i) identify which of such
alterations, additions and improvements Landlord will be reserving its right to
require Tenant to remove upon the expiration or sooner termination of this lease
and/or (ii) allow tenant to remove specified alterations, additions and
improvements upon such expiration or sooner termination of this Lease, and in
the event of any such
22
request, Landlord agrees to notify Tenant in writing of its response to the
applicable request within fifteen (15) days after Tenant's request. Tenant shall
not permit or suffer any signs, advertisements or notices to be displayed,
inscribed upon or affixed on any part of the outside of the Premises, or in the
Building, except on the directory board to be provided by Landlord and on the
entrance doors of the Premises, provided, however, that Tenant shall not
display, inscribe or affix any sign on such directory board or on the entrance
doors of the Premises without, in each instance, obtaining the prior written
approval from Landlord as to the size, color and style of such sign. Landlord
shall have the right to remove unauthorized signs at Tenant's expense.
9. LIENS. Tenant shall not permit there to be filed of record against the
Property or Landlord's interest therein or any part of either, and shall
forthwith remove or have removed, any mechanics' or materialmens' or other lien,
or claim thereof, filed by reason of work, labor, services or materials provided
for or at the request of Tenant (other than work, labor, services or materials
provided by Landlord) or any subtenant or occupant or for any contractor or
subcontractor employed by Tenant or any subtenant or occupant, and shall
exonerate, protect, defend and hold free and harmless landlord against and from
any and all such claims or liens. Without limitation of the foregoing, if any
such claim or lien be filed of record and Tenant shall not cause such claim or
lien to be released within five (5) business days after written notice from
Landlord, Landlord may, but shall not be obligated to, discharge it either by
paying the amount claimed to be due in the claim or lien or by procuring the
discharge of such lien or claim by deposit or by bonding proceedings, and in any
such event, Landlord shall be entitled, if Landlord so elects, to compel the
prosecution of any action for the foreclosure of such lien by the claimant or
lienor and to pay the amount of any judgment in favor of the lienor with
interest, costs and allowances. Any amount so paid by Landlord and all costs and
expenses, including, without limitation, reasonable attorneys' fees, in
connection therewith, together with interest thereon at the Lease Interest Rate
(hereinafter defined) from the respective dates of Landlord's making of the
payments and incurring of the costs and expenses, shall constitute additional
rent payable by Tenant under this Lease and shall be paid by Tenant to Landlord
on demand.
10. INSURANCE AND WAIVER OF SUBROGATION
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(a) During the Term, Tenant at its sole cost shall maintain, with
responsible insurance companies reasonably acceptable to Landlord and qualified
to do business in the State of Illinois, general comprehensive public liability
insurance with the broad form commercial liability endorsement including
contractual liability insurance covering Tenant's indemnity obligations
hereunder, insuring against claims for personal injury (including death) and
property damage, with respect to Tenant's activities and property in, on and
about the Premises, and with respect to occurrences arising out of or related to
this Lease and/or Tenant's use or occupancy of the Premises and the Property and
the activities therein, there on and thereabout of Tenant and any subtenants and
their respective servants, employees, agents, invitees and licensees, with
coverage on an occurrence basis in all cases of not less than a combined single
limit of $2,000,000 per occurrence. Landlord, Landlord's beneficiary
("Beneficiary") (if at any time Landlord is a trustee under a land trust),
Amerimar Xxxxx Management Company, Inc. ("Manager"), or any other manager of the
Building, any Mortgagee (as hereinafter defined) and, if Landlord requires,
Landlord's architect or contractor who may perform services or work in, on,
about or in connection with the Premises, and the respective agents, partners
and employees of the foregoing, all as their interest may appear, shall be
designated additional insureds in the policies for such insurance (provided
Landlord has notified Tenant in writing of the identify of such parties). Said
policies shall contain endorsements providing that the naming of additional
insureds shall not operate to limit or void the coverage of any named insured or
additional insured relating to claims by another named insured or additional
insured. Tenant shall, prior to the commencement of the Term, and at least 30
days prior to the expiration date of each policy which Tenant is required by
this Lease to maintain, furnish to Landlord certificates evidencing the coverage
required hereinabove in this Paragraph and the renewal thereof, which
certificates shall state that such insurance coverage may not be materially
changed or cancelled without at least twenty (20) days prior written notice to
Landlord. The aforesaid amount of required insurance coverage may, from time to
time, be increased, in Landlord's reasonable discretion, effective upon the 60th
day after Landlord shall have given Tenant notice specifying the new amount.
During the Term, Tenant, at its sole cost, shall maintain "all risk" physical
damage insurance including fire, sprinkler, leakage, vandalism and extended
coverage for the full replacement cost of all additions, improvements and
alterations to the Premises and of all office furniture, trade fixtures, office
equipment, merchandise and all
24
other items of Tenant's property on the Premises.
(b) Tenant shall not do or commit, or suffer or permit to be done of
committed, any act or thing as a result of which any policy of insurance of any
kind on or in connection with the Property shall become void or suspended, or
any insurance risk on or in connection with the Building or any other portion of
the Property (other than risks inherent in the operation of a general business
office) shall (in the opinion of the insuring companies or any insurance
organization) be rendered more hazardous. Tenant shall pay as additional rent
the amount of any increase of premiums for such insurance, resulting from any
breach of this covenant.
(c) Landlord agrees to maintain in force and effect during the Term
all-risk fire and extended coverage insurance (or a reasonable equivalent
thereof) in an amount equal to at least 80% of the replacement cost of the
Building (insuring the shell and core on the Building and the Building systems).
Landlord shall also carry commercial general liability insurance with respect to
the Building in amounts and with coverages deemed prudent by Landlord.
Landlord's liability insurance policies shall be excess and non-contributory of
Tenant's liability insurance policies. The cost and expense of all such
insurance shall be included in the Operating Expenses. Notwithstanding the
foregoing, Landlord reserves the right to self-insure any risks which it elects
to self-insure pursuant to a bona fide self-insurance program (including,
without limitation, the risks that would otherwise be covered by the policies
described above).
(d) As used in this Paragraph 10(d) and in Paragraph 12 hereof only,
"Landlord" shall mean Landlord, Beneficiary (if Landlord is a trustee under a
land trust), Manager, any other manager of the Building, any Mortgagee, and the
respective partners, shareholders, agents, employees, officers and directors of
the foregoing. Notwithstanding anything herein to the contrary, and to the
extent permitted by law, Tenant and Landlord hereby release the other party from
any and all liability for any loss, damage or injury to such party's property
which is covered by insurance carried (or required hereunder to be carried) by
such party (and each party shall be responsible for the deductibles under its
own insurance policies, notwithstanding that such loss, damage or injury shall
have arisen out of the negligence of the other party. The policies of insurance
which Landlord and Tenant are required to maintain under this Lease shall
contain a clause to the effect that such release shall not affect said policy or
the
25
right of the insured to recover thereunder and that the insurer waives all
rights of subrogation which such insurer may have against Tenant and Landlord,
respectively.
11. FIRE OR CASUALTY.
(a) If the Premises or the Building (including machinery or equipment
used in the operation of the Building) shall be damaged by fire or other
casualty and if such damage does not render all or a substantial portion of the
Premises (in the case of the Premises, substantial shall mean 20% or more of the
area of the Premises) or Building untenantable, then Landlord shall repair and
restore the Premises (exclusive of tenant finishes and/or build-outs) or the
core and shell of the Building with reasonable promptness, subject to reasonable
delays for insurance adjustments and delays caused by matters beyond Landlord's
reasonable control. If any such damage renders all or a substantial portion of
the Premises or Building untenantable, Landlord shall within ninety (90) days
after such casualty give written notice (the "Repair Notice") to Tenant of
whether Landlord intends to repair and restore the Building and Premises and, if
Landlord elects to repair and restore, Landlord's reasonable estimate of the
time necessary to complete such work (the "Estimated Restoration Period"). If
the Estimated Restoration Period expires more than two hundred forty (240) days
from the date of the Repair Notice, Tenant or Landlord shall have the right to
terminate this Lease (with appropriate prorations of rent being made for
Tenant's possession subsequent to the date of such damage of those tenantable
portions of the Premises) upon giving written notice to the other party at
anytime within thirty (30) days after the date Landlord delivers the Repair
Notice and thereafter Landlord shall have no obligation to repair or restore. If
the Estimated Restoration Period expires less than two hundred forty (240) days
from the date of the Repair Notice, this Lease shall continue in full force and
effect. Rent shall xxxxx from the date of such casualty until the earlier to
occur of (i) substantial completion of the restoration of the Premises or (ii)
Tenant's occupancy thereof, on those portions of the Premises as are, from time
to time, untenantable as a result of such damage.
(b) Notwithstanding anything contained in Paragraph 11(a) of this
Lease to the contrary, if all or a part of the Premises is damaged by any
casualty and Landlord elects to repair the Premises but fails to substantially
complete such repairs within sixty (60) days after the expiration of the
Estimated Restoration Period, subject to force majeure delays, then as
26
Tenant's sole and exclusive remedy therefor, Tenant may terminate this Lease by
delivery of written notice thereof to Landlord within ten (10) days after the
expiration of the aforesaid 60-day period. Notwithstanding the foregoing, Tenant
shall not have the right to terminate this Lease as aforesaid if Tenant, or any
assignee or subtenant of Tenant, or any of Tenant's officers, directors,
employees, invitees, agents or contractors causes, in whole or in part, (i) such
damage to the Premises or (ii) any delay in the repair of such damage to the
Premises.
(c) Notwithstanding anything to the contrary herein set forth,
Landlord shall have no duty pursuant to this Paragraph 11 to repair or restore
any portion of any alterations, additions or improvements in the Premises or the
decorations thereto except to the extent that such alterations, additions,
improvements and decorations were provided by Landlord, at Landlord's cost, at
the beginning of the Term.
12. WAIVER OF CLAIMS - INDEMNIFICATION.
(a) To the extent not prohibited by law, Landlord shall not be liable
for, and Landlord is hereby released by Tenant from all liability for, any
damage either to person or property or resulting from the loss of use thereof
sustained by Tenant or by other persons claiming through Tenant due to the
Property or any part thereof or any appurtenances thereof becoming out of
repair, or due to the happening or any accident or event in, on or about the
Property, or due to any act or neglect of any tenant or occupant of the Building
or of any other person. This provision shall apply particularly, but not
exclusively, to damage caused by gas, electricity, snow, frost, steam, sewage,
sewer gas or odors, fire, water or by the bursting or leaking of pipes, faucets,
sprinklers, plumbing fixtures and windows, and shall apply without distinction
as to the person whose act or neglect was responsible for the damage and whether
or not such act or neglect occurred before, at or after the execution of this
Lease, and whether the damage was due to any of the causes specifically
enumerated above or to some other cause of an entirely different kind. Tenant
further agrees that all personal property of Tenant upon the Premises, or upon
receiving and holding areas, or elsewhere in, on or about the Property, shall be
at the risk of Tenant only, and that Landlord shall not be liable for any loss
or damage thereto or theft thereof. Tenant acknowledges and agrees that the
parties have carefully analyzed all risks to persons and property associated
with this Lease and Tenant's occupation of the Premises and that
27
the parties have sought to have all such risks protected by adequate insurance.
Accordingly, each party has the burden to maintain specific types of insurance
as provided in Paragraph 10 above and the parties have allocated the risks among
such insurance policies as provided by the mutual waiver in Paragraph 10(d)
above. Thus, to the extent permitted by law, and to the extent covered by
insurance (or required pursuant to this lease to be covered by insurance), the
foregoing waivers in this Paragraph 12 (a) shall apply to liability, damage,
loss or claims arising out of or in connection with the negligence or wilful
misconduct of Landlord, its agents, employees, contractors and invitees (without
limitation to the application of the foregoing waivers to all other
circumstances not involving the negligence or wilful misconduct of Landlord, its
agents, employees, contractors and invitees).
(b) Without limitation of any other provisions hereof, Tenant agrees
to defend, protect, indemnify and save harmless Landlord from and against all
liability to third parties arising out of the acts of Tenant or any subtenant or
the servants, agents, employees, contractors, suppliers, workmen and invitees of
Tenant or any subtenant.
Tenant agrees to indemnify and save harmless, and upon request defend,
Landlord against and from any and all claims by or on behalf of any person,
arising out of or related to
(a) Tenant's use or occupancy of the Premises or the conduct of
its business, or any activity, work, or thing, permitted or suffered by Tenant,
in, on or about the Premises or the Property,
(b) any occurrence, in, on or about the Premises,
(c) any breach or default on Tenant's part in the performance or
observance of, or compliance with, any term, covenant or condition on Tenant's
part to be performed pursuant to the terms of this Lease, or
(d) any act or negligence of Tenant or any subtenant, or any of
their respective agents, contractors, servants, employees, invitees or
licensees,and from and against all costs, counsel fees, expenses penalties,
fines and liabilities which Landlord may suffer or incur in connection with any
such claim and any action or proceeding brought
28
with respect thereto. In the event that any action or proceeding shall be
brought by reason of any such claim, against any party to be indemnified
hereunder, Tenant covenants that Tenant, upon notice from such party and at
Tenant's expense, shall resist and defend such action or proceeding by counsel
reasonably satisfactory to such party. Without limiting the generality of the
foregoing, Tenant specifically acknowledges that the indemnity undertaking
herein shall apply to the transportation, use, storage, maintenance, generation,
manufacturing, handling, disposal, release or discharge by Tenant of any
Hazardous Material (as defined in Paragraph 28 below). All of Tenant's
obligations under this Paragraph 12, and any and all sums due from Tenant
hereunder shall survive the expiration or termination of this Lease.
Notwithstanding anything in this Paragraph 12(b) to the contrary, Tenant shall
not be obligated to indemnify Landlord with respect to claims arising out of
Landlord's negligence or wilful misconduct except, and to the extent, such
indemnity is covered by Tenant's liability insurance.
(c) Except with respect to liabilities, costs and claims that are
waived pursuant to Paragraphs 10(d) or 12(a) above, Landlord agrees to defend,
protect, indemnify and save harmless Tenant from and against all liability to
third parties arising out of or related to any negligence or wilful misconduct
of Landlord or any of its agents, contractors, servants or employees and from
and against all costs, counsel fees, expenses, penalties, fines and liabilities
which Tenant may suffer or incur in connection with any such claim and any
action or proceeding brought with respect thereto. All of Landlord's obligations
under this Paragraph 12(c) and any and all sums due from Landlord hereunder
shall survive the expiration or termination of this Lese.
13. NONWAIVER. No waiver of any provision of this Lease shall be implied by
any failure of a party to enforce any remedy on account of the violation of such
provision, even if such violation be continued or repeated subsequently, and no
express waiver shall affect any provision other than the one specified in such
waiver and that one only for the time and in the manner specifically stated. No
payment by a party or receipt by the other party of a lesser amount that the
amount required herein shall be deemed to be other than on account of the amount
owed, nor shall any endorsement or statement on any check or any letter
accompanying any check or payment due from either party be deemed an accord and
satisfaction, and the other party may accept such check or payment without
prejudice to the other party's right to recover the balance of such
29
amount owed or pursue any other remedy provided in this Lease. No receipt of
moneys by Landlord from Tenant after the termination of this Lease shall in any
way alter the length of the Term or of Tenant's right of possession hereunder or
after the giving of any notice shall reinstate, continue or extend the Term or
affect any notice given Tenant prior to the receipt of such moneys, it being
agreed that after the service of notice or the commencement of a suit or after
final judgment for possession of the Premises, Landlord may receive and collect
any rent due, and the payment of said rent shall not waive or affect said
notice, suit or judgment.
14. CONDEMNATION. In the event that the whole of the Premises shall be
lawfully condemned or taken for a public or quasi-public use, this Lease shall
terminate as of the date that possession is to be surrendered to the condemnor
or taking authority. In the event that there shall be a lawful condemnation or
taking for any public or quasi-public use of any part of the Building, without
there being condemned or taken a material part of the Premises, then, at the
option of Landlord, exercisable by notice given to Tenant not later than 90 days
after the date upon which Landlord receives notice of the taking or
condemnation, this Lease shall terminate as of the date that possession of the
Premises taken is required to be surrendered to the condemnor or taking
authority. In the event that there shall be a lawful condemnation or taking for
any public or quasi-public use of all or a material part of the Premises, then,
at the option of either party, exercisable by notice given to the other party
not later than ninety (90) days after the date upon which Landlord receives
notice of the taking or condemnation, this Lease shall terminate as of the date
that possession of the Premises taken is required to be surrendered to the
condemning or taking authority. In the event of any such taking or condemnation,
of all or any part of the Premises or of all or any part of the Property, Tenant
shall have no claim against Landlord and shall not have any claim or right to
any portion of the amount that may be awarded as damages or paid as a result of
such taking or condemnation; and all rights of Tenant to damages therefore are
hereby assigned by Tenant to Landlord and Tenant shall have no claim against
Landlord or the condemnor for the value of the unexpired term of this Lease.
However, the foregoing provisions of this section shall not be construed to
deprive Tenant of the right to claim and receive payment from the condemnor or
taking authority for the then bookvalue of Tenant's trade fixtures and
improvements installed at Tenant's expense and moving and related expenses as
long as such claim or the payment thereof does not reduce the award which
Landlord would otherwise be
30
entitled to receive. In the event of any such taking or condemnation of part of
he Premises, the Base Rent, the Tax Adjustment and the Operating Expense
Adjustment shall be proportionately reduced from the date that possession is
required to be surrendered to the condemnor or taking authority.
15. ASSIGNMENT AND SUBLETTING.
(a) Tenant shall not, without the prior written consent of Landlord
(which consent with respect to an assignment or subletting shall not be
unreasonably withheld as provided in Paragraph 15(f) below, (i) assign,
transfer, convey or mortgage this Lease of any interest hereunder; (ii) suffer
to occur or permit to exist any assignment of this Lease, or any lien or charge
upon Tenant's interest, involuntarily or by operation of law; (iii) sublet the
Premises or any part thereof, or (iv) permit the use of the Premises or any part
thereof by any parties other than Tenant and its employees. Any such action on
the part of Tenant shall be void and of no effect. Landlord's consent to any
transfer or Landlord's election to accept any transferee as the tenant hereunder
and to collect rent from such transferee shall be at Landlord's sole and
exclusive discretion (provided Landlord shall not unreasonably withhold its
consent to any assignment or subletting, as provided is subparagraph 15(f)
below) and shall not release Tenant or any subsequent tenant from any covenant
or obligation under this Lease. Landlord's consent to any assignment, subletting
or transfer shall not constitute a waiver of Landlord's right to withhold its
consent to any future assignment, subletting, or transfer. In no event shall
this Lease be assigned or assignable by voluntary or involuntary bankruptcy
proceedings or otherwise, and in no event shall this Lease or any rights or
privileges hereunder be an asset of Tenant under any bankruptcy, insolvency or
reorganization proceedings, except as provided by law.
(b) At least thirty (30) days prior to any proposed subletting or
assignment, Tenant shall submit to Landlord a statement seeking Landlord's
consent and containing the name and address of the proposed subtenant or
assignee, the terms of the proposed sublease or assignment and such financial
and other information with respect to the proposed subtenant as Landlord
reasonably may request. Landlord shall indicate its consent or non-consent
within ten (10) days of its receipt of said statement.
(c) If Landlord consents to any assignment or sublease
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of any portion of the Premises, as a condition of Landlord's consent, Tenant
shall pay to Landlord 50% of all profit derived by Tenant from such assignment
or sublease. Any rent in excess of that paid by Tenant hereunder realized by
reason of such assignment or sub-lease (after initially deducting therefrom the
amount of all reasonable brokerage commissions, cash allowances, tenant
improvement costs and legal fees actually paid by Tenant in connection with such
transfer) shall be deemed an item of such profit. Tenant shall furnish Landlord
with a sworn statement, certified by an officer of Tenant, setting forth in
detail the computation of profit (which computation shall be based upon
generally accepted accounting principles), and Landlord, or its representatives,
shall have access to the books, records and papers of Tenant in relation
thereto, and to make copies thereof. If a part of the consideration for such
assignment shall be payable other than in cash, the payment to Landlord shall be
payable in accordance with the foregoing percentage of the cash and other
non-cash considerations in such form as is satisfactory to Landlord. Such
percentage of Tenant's profits shall be paid to Landlord promptly by Tenant upon
Tenant's receipt from time to time of periodic payments from such assignee or
subtenant or at such other earlier time a Tenant shall realize its profits from
such assignment or sublease.
(d) If Tenant shall assign this Lease as permitted herein, the
assignee shall expressly assume all of the obligations of Tenant hereunder in a
written instrument satisfactory to Landlord and furnished to Landlord not later
than fifteen (15) days prior to the effective date of the assignment. If Tenant
shall sublease the Premises as permitted herein, Tenant shall obtain and furnish
to Landlord, not later than fifteen (15) days prior to the effective date of
such sublease and in form satisfactory to Landlord, the written agreement of
such subtenant to the effect that the subtenant will attorn to Landlord, at
Landlord's option and written request, in the event this Lease terminates before
the expiration of the sublease.
(e) If Tenant is a corporation (other than a corporation whose shares
are traded on a public securities exchange), a change or series of changes in
ownership of stock which would result in direct or indirect change in ownership
by the stockholders or an affiliated group of stockholders of more than forty
nine percent (49%) of the outstanding stock as of the date of the execution and
delivery of this Lease shall be deemed to be a transfer of this Lease for the
purpose of Paragraph 15(a). If Tenant is a
32
partnership, joint venture, or a limited liability company, any transaction or
series of transactions (including, without limitation, any withdrawal or
admittance of a partner, or a member, as the case may be, or any change in any
partner's or member's interest, as the case my be in Tenant, whether voluntary,
involuntary or by operation of law, or any combination of any of the foregoing
transactions) resulting in the transfer of control of Tenant, shall be deemed to
be a transfer of Tenant's interest under this Lease for the purposes of
Paragraph 15(a). The term "control" as used in this Paragraph 15(e) means the
power to directly or indirectly direct or cause the direction of the management
or policies of Tenant.
(f) Notwithstanding anything contained in this Paragraph 15 to the
contrary, Landlord shall not unreasonably withhold its consent to any assignment
or sublease. In addition to any other reasonable basis Landlord may have for
withholding its consent to a proposed assignment or sublease, Landlord shall not
be deemed to have unreasonably withheld its consent if: (i) the transferee is of
a character or engaged in a business that is not in keeping with the standards
or criteria used by Landlord in leasing the Building; (ii) the financial
condition of the transferee is such that it may not be able to perform its
obligations in connection with this Lease; (iii) the purpose for which the
transferee intends to use the Premises or portion thereof is in violation of the
terms of this Lease or the lease of any other tenant in the Building; (iv) the
transferee (whether or not a tenant of the Building) has received a written
proposal from Landlord to lease space in the Building similar to the space
Tenant proposed to assign or sublease; (v) the transferee's business operations
will result in materially and substantially increase traffic in the Building; or
(vi) the transferee's business operations will result in a requirement for
significant (in Landlord's reasonable judgment) alterations or improvements to
the Building to comply with any applicable law, code, rule or regulation. If
Landlord wrongfully withholds its consent to any proposed assignment or
sublease, Tenant's sole and exclusive remedy therefor shall be to seek specific
performance of Landlord's obligation to consent to such assignment or sublease
(plus, if Tenant prevails, reimbursement for its reasonable fees and
out-of-pocket expenses of its counsel in connection with such dispute).
(g) Notwithstanding anything contained in this Paragraph 15 to the
contrary, provided Tenant is not then in Default under this Lease, Tenant shall
have the right to assign this Lease or
33
sublease the Premises, or any part thereof, to an "Affiliate" (as defined below)
without prior written consent of Landlord and without Landlord having the right
to receive any profit, but only upon at least ten (10) days prior written notice
to Landlord and subject to all of the other provisions of this Lease,
specifically including, without limitation, the continuation of liability of
Tenant under this Lease. In the event of an assignment of this Lease to an
Affiliate, the Affiliate shall assume the obligations of the tenant under this
Lease from and after the effective date of such assignment pursuant to a written
assumption agreement executed and delivered to Landlord prior to the effective
date of such assignment. For purposes of this Section 15(g), the term
"Affiliate" shall mean any corporation or other entity controlling, controlled
by or under the common control with Tenant or the surviving entity formed as a
result of a merger of consolidation with Tenant. The word "control", as used
herein, shall mean the power to direct or cause the direction of the management
and policies of the controlled entity through ownership of more than fifty
percent (50%) of the voting securities in such controlled entity (or, with
respect to a company whose shares are traded on a public securities exchange,
the ownership of a sufficient percentage of the voting securities in such
company to direct the management and policies of the company). Nothing contained
in this Section 15(g) shall permit an assignment of this Lease or the subleasing
of the Premises to any Affiliate that is disreputable, non-creditworthy or
otherwise not in keeping with the nature or class of tenants in the Building, as
reasonably determined by Landlord.
16. HOLDOVER. If Tenant or any person claiming through Tenant shall retain
possession of the Premises or any part thereof, after the expiration or earlier
termination of the Term or of Tenant's right of possession, Tenant shall pay
Landlord (a) for the first thirty (30) days of such period during which such
possession continues, an amount equal to one hundred twenty-five percent (125%)
of the monthly installment of Base Rent applicable at the end of the Term and
one hundred twenty-five percent (125%) of the monthly installment of Tax
Adjustment Amount and Expense Adjustment Amount due for the last year of the
Term, and thereafter one hundred fifty percent (150%) of such monthly
installments of Base Rent, Tax Adjustment Amount and Expense Adjustment Amount,
and in all events plus all other sums which would have been payable hereunder
had the term continued during such retention of possession and (b) all other
damages sustained by Landlord, whether direct or consequential, by reason of
such retention of possession
34
(including, without limitation, consequential damages sustained by Landlord as a
consequence of Landlord's inability to timely deliver any part of the Premises
to a successor tenant), provided, however, that Tenant shall have no liability
for damages referred to in clause (b) above if Tenant properly surrenders
possession of the Premises to Landlord in the condition required under this
Lease within thirty (30) days after written notice from Landlord requesting
Tenant to vacate the Premises and specifying the identity of another tenant that
has signed a letter of intent to lease all or a portion of the Premises. During
any such holdover period, all of Tenant's obligations with respect to the use,
occupancy and maintenance of the Premises shall continue. The provisions of this
Paragraph shall not be deemed to limit or constitute a waiver of any other
rights or remedies of Landlord provided herein or at law or in equity and
applicable to unlawful retention of possession or otherwise.
17. ESTOPPEL CERTIFICATE. Tenant shall from time to time, within ten days
after Tenant's receipt of Landlord's request therefor, execute, enseal,
acknowledge and deliver to Landlord, or as Landlord may direct, a written
instrument in recordable form (a) certifying (i) that this Lease is in full
force and effect and has not been modified, supplemented or amended in any way
(or, if there have been modifications, supplements or amendments thereto, that
it is in full force and effect as modified, supplemented or amended, and stating
such modifications, supplements and amendments) and that this Lease (as
modified, supplemented or amended, as aforesaid) represents the entire agreement
among Landlord and Tenant as to the Premises and the leasehold; (ii) the dates
to which the Base Rent, additional rent and other charges arising hereunder have
been paid; (iii) the amount of any prepaid rents or credits due to tenant, if
any; (iv) that if applicable, Tenant has entered into occupancy of the Premises;
(v) the date on which the Term shall have commenced and the corresponding
expiration date; and (b) stating, to the best knowledge of Tenant, whether or
not all conditions under this Lease to be performed by Landlord prior the date
of such certificate have been satisfied and whether or not Landlord is then in
default in the performance of any covenant, agreement or condition contained in
this Lease and specifying, if any, each such unsatisfied condition and each such
default; and (c) stating any other fact or certifying any other condition
reasonably requested by Landlord or by any mortgagee or prospective mortgagee or
purchaser of the Property or of any interest therein. In the event that Tenant
shall fail to complete, execute and deliver any such instrument within twenty
(20) days after Landlord's request
35
therefor, in addition to constituting a Default hereunder, Tenant shall be
deemed to have irrevocably appointed Landlord or Beneficiary (if Landlord is a
trustee of a land trust) as Tenant's attorney-in-fact to execute and deliver any
such instrument or instruments in Tenant's name.
18. SUBORDINATION
(a) This Lease shall be subject and subordinate at all times to the
lien of any mortgage or deed of trust, heretofore or hereafter placed by
Landlord upon any or all of the Premises or the Building, the Land, the
Property, or any interest therein and of all renewals, modifications,
consolidations, replacements and extensions thereof (all of which are
hereinafter referred to collectively as a "Mortgage"), all automatically and
without the necessity of any further act on the part of Tenant to effectuate
such subordination. Tenant shall, at the request of the holder of a Mortgage
(the "Mortgagee"), upon foreclosure thereof attorn to the Mortgagee. Tenant
shall also execute, enseal, acknowledge and deliver, within twenty (20) days
after Tenant's receipt of demand from Landlord or the Mortgagee such further
instrument or instruments evidencing such subordination of Tenant's right, title
and interest under this Lease to the lien of the Mortgage, and such further
instrument or instruments of attornment, as shall be desired by the Mortgagee,
provided such instruments contain the agreement of the Mortgagee not to disturb
Tenant's right to possession of the Premises for so long as Tenant is not in
Default under this Lease. In the event that Tenant shall fail to complete,
execute and deliver any such instrument within twenty (20) days after Landlord's
request therefor, in addition to constituting a Default hereunder, Tenant shall
be deemed to have irrevocably appointed Landlord or Beneficiary (if Landlord is
a trustee of a land trust) as Tenant's attorney-in-fact to execute and deliver
any such instrument or instruments in Tenant's name.
(b) Anything contained in the foregoing provisions of this Paragraph
to the contrary notwithstanding, any Mortgagee may at any time subordinate its
Mortgage to this Lease, without the necessity of obtaining Tenant's consent, by
giving notice of the same in writing to Tenant, and thereupon the Lease shall be
deemed to be prior to such mortgage without regard to their respective dates of
execution, delivery or recordation and/or the date of commencement of Tenant's
possession, and in that event the Mortgagee shall have the same rights with
respect to this Lease as though this Lease shall have been executed, delivered
and recorded
36
prior to the execution and delivery of the Mortgage.
(c) If Landlord is or becomes lessee of premises of which the Premises
are a part, Tenant agrees that, automatically and without the necessity of any
further act, Tenant's possession shall be as a subtenant and shall be
subordinate to the interest of Landlord's lessor, its heirs, personal
representatives, successors and assigns (which lessor, its heirs, personal
representatives, successors and assigns, or any of them, is hereinafter called
"Paramount Lessor"), but notwithstanding the foregoing, if Landlord's tenancy
shall terminate by expiration, by forfeiture or otherwise, then Tenant hereby
agrees, upon request of Paramount Lessor, to attorn to Paramount Lessor, and to
recognize such lessor as Tenant's landlord for the balance of the term of this
Lease and any extensions or renewals hereof (provided Tenant's rights hereunder
are not diminished by such subordination or attornment). Tenant shall execute,
enseal, acknowledge and deliver, upon demand by Landlord or Paramount Lessor,
such further instrument or instruments evidencing such subordination of Tenant's
right, title and interest under this Lease to the interest of such lessor, and
such further instrument or instruments of attornment, as shall be prescribed by
the Paramount Lessor, provided such instruments contain the agreement of the
Paramount Lessor not to disturb Tenant's right to possession of the Premises for
so long as Tenant is not in Default under this Lease.
(d) It is further agreed that if any Mortgage shall be foreclosed, or
if the lease of the Paramount Lessor be terminated, (A) the liability of the
Mortgagee or purchaser at such foreclosure sale, or the Paramount Lessor, as the
case may be, or the liability of a subsequent owner designated as landlord under
this Lease shall exist only so long as such Mortgagee, Paramount Lessor, or such
subsequent owner, as the case may be, is the owner of the Property, of any
portion thereof, and such liability shall not continue or survive after further
transfer of ownership; (B) the Mortgagee, or Paramount Lessor, or such
subsequent owner, as the case may be, and their respective successors or assigns
that succeed to the interest of Landlord in the Building or the Land, or
acquires the right to possession of the Property, or any portion thereof, shall
not be (1) liable for any act or omission of the party names above or any other
prior landlord as the Landlord under this Lease; (2) liable for the performance
of Landlord's covenants pursuant to the provisions of this Lease which arise and
accrue prior to such entity succeeding to the interest of Landlord under this
Lease or acquiring such right to possession; (3) subject to any offsets or
37
defenses which Tenant may have at anytime against Landlord; and (4) bound by any
rent which Tenant may have paid previously for more than one month (provided
such Mortgagee shall be obligated to return to Tenant any security deposit
actually received by such Mortgagee, in accordance with, and subject to,
Paragraph 24 below); and (C) upon request of the Mortgagee, if the Mortgage
shall be foreclosed, Tenant will attorn, as Tenant under this Lease, to the
purchaser at any foreclosure sale under any Mortgage.
(e) Notwithstanding anything in this Paragraph 18 to the contrary,
Landlord agrees to procure a non-disturbance agreement from the present first
Mortgagee of the Building, in the form attached hereto as Exhibit "G," within
thirty (30) days after the date of full execution and delivery of this Lease.
19. CERTAIN RIGHTS RESERVED BY LANDLORD. Landlord shall have the following
rights, each of which Landlord may exercise without notice to Tenant (except as
otherwise specified herein) and without liability to Tenant for damage or injury
to property, person or business on account of the exercise thereof, and the
exercise of any such rights shall not be deemed to constitute an eviction or
disturbance of Tenant's use or possession of the Premises and shall not give
rise to any claim for set-off or abatement or any other claim: (a) To change the
Building's name or street address.
(b) To install, affix, and maintain any and all signs on the exterior
and on the interior of the Building.
(c) To decorate or to make repairs, alterations, additions, or
improvements, whether structural or otherwise (including alterations in the
configuration of the common area), in and about the Building, or any part
thereof, and for such purposes, upon not less than twenty-four (24) hours prior
notice to Tenant at the Premises (excluding emergencies, when no such notice
shall be required), to enter upon the Premises, and during the continuance of
any of said work, to temporarily close doors, entry ways, public space and
corridors in the Building and to interrupt or temporarily suspend services or
use of facilities. Landlord shall use reasonable efforts to minimize
interference with Tenant's business operations in connection with the exercise
of the rights described in this subparagraph (c).
(d) To furnish door keys for the entry door(s) in the Premises at the
commencement of this lease and to retain at all
38
times, and to use in appropriate instances, keys to all doors within and into
the Premises. Tenant agrees to purchase only from Landlord or Landlord's
designee, additional duplicate keys as required, to change no locks, and to
affix no locks on doors without the prior written consent of Landlord.
Notwithstanding the provisions for Landlord's access to Premises, Tenant
relieves and releases Landlord of all responsibility arising out of theft,
robbery and pilferage (unless such theft, robbery or pilferage is due to
Landlord's negligence or wilful misconduct [but subject in all events to
Paragraph 10(d) above]). Upon the expiration of the Term or of Lessee's right to
possession, Tenant shall return all keys to Landlord and shall disclose to
Landlord the combination of any safes, cabinets or vaults left in the Premises.
(e) To designate and approve all window coverings used in the
Building.
(f) To approve (in the plans for the Work [as described in the Work
Letter Agreement] if set forth therein in particularity, or otherwise) the
weight, size and location of safes, vaults and other heavy equipment and
articles in and about the Premises and the Building so as not to exceed the live
load per square foot designated by the structural engineers for the Building,
and to require all such items and furniture and similar items to be moved into
or out of the Building and Premises only at such times and in such manner as
Landlord shall direct in writing. Tenant shall not install or operate machinery
or any mechanical devices of a nature not related to general office uses or
customarily found in general business offices without the prior written consent
of Landlord. Tenant's movements of property into or out of the Building or
Premises and within the Building are entirely at the risk and responsibility of
Tenant, and Landlord reserves the right to require permits before allowing any
property to be moved out of the Building or Premises.
(g) To establish controls for the purpose of regulating all property
and packages, both personal and otherwise, to be moved into or out of the
Building and Premises and all persons using the Building after normal office
hours.
(h) To regulate delivery and service of supplies in order to insure
the cleanliness and security of the Premises and to avoid congestion of
receiving areas and freight elevators.
(i) Upon not less than twenty-four (24) hours prior
39
notice to Tenant at the Premises, to show the Premises to prospective lenders,
purchasers and investors at reasonable hours at any time during the Term and to
prospective tenants at reasonable hours during the last twelve months of the
Term and, if vacated or abandoned, to show the Premises at any time without
notice and to prepare the Premises for re-occupancy without notice.
(j) To erect, use and maintain pipes, ducts, wiring and conduits, and
appurtenances thereto, in and through the Premises at reasonable locations.
(k) To enter the Premises at any reasonable time upon not less than
twenty-four (24) hours prior notice to Tenant at the Premises (excluding
emergencies, when no such notice shall be required), to inspect the Premises.
(l) To grant to any person or to reserve unto itself the exclusive
right to conduct any business or render any service in the Building, so long as
the granting of any such right does not materially and adversely affect Tenant's
ability to conduct its business in the Premises as permitted pursuant to
Paragraph 5 above. If Landlord elects to make available to tenants in the
Building any services relating to facilities available through the Building (for
example, cable television service or building riser management service) or any
supplies (for example bottled water), or arranges a master contract therefor,
Tenant agrees to obtain its requirements, if any, therefore from Landlord or
under any such contact, provided that the charges therefor are reasonable.
(m) To prescribe the location and style of the suite number and
identification sign or lettering for the Premises.
(n) To grant to anyone the right to conduct any business or render any
service in the Building, whether or not it is the same as or similar to the use
expressly permitted to Tenant by Paragraph 5 hereof.
(o) To require all persons entering or leaving the Building during
such hours as Landlord may from time to time reasonably determine to identify
themselves to security personnel by registration or otherwise in accordance with
Building security controls, and to establish their right to enter or leave in
accordance with Exhibit C attached to this Lease.
20. RULES AND REGULATIONS. Tenant shall, and shall cause all
40
of its subtenants and occupants, its and their agents, employees, invitees and
licensees to, observe faithfully, and comply strictly with, the rules and
regulations attached to this Lease as Exhibit "C" (the "Rules"), as they may be
supplemented and revised by Landlord from time to time, and such other rules and
regulations promulgated from time to time by Landlord, as in Landlord's judgment
may be desirable to the safety, care and cleanliness of the Building and the
Premises, or for the preservation of good order therein, which do not materially
affect Tenant's use and enjoyment of the Premises for general office use.
Landlord shall not be liable to Tenant for violation of such rules and
regulations by, or for Landlord's failure to enforce the same against, any other
tenant, its subtenants and occupants and its and their agents, employees,
invitees or licensees, nor shall any violation or failure constitute, or be
treated as contributing to, an eviction, actual or constructive, or affect
Tenant's covenants and obligations hereunder, or allow Tenant to reduce, xxxxx
or offset the payment of any rent under this Lease. Landlord shall not
unreasonably discriminate against Tenant in the enforcement of the rules and
regulations.
21. LANDLORD'S REMEDIES
(a) The occurrence of any one or more of the following events shall
constitute a "Default" by Tenant, which shall give rise to Landlord's remedies
set forth in Paragraph (b) below: (i) failure by Tenant to make when due any
payment of rent, unless such failure is cured within five (5) business days
after notice; provided, however, that once Landlord has given Tenant two (2)
such notices during any twelve (12)-month period, Tenant shall only be entitled
to three (3) days after notice to cure such a default; (ii) failure by Tenant to
observe or perform any of the terms or conditions of this Lease to be observed
or performed by Tenant other than the payment of rent, or as provided below,
unless such failure is cured within thirty (30) days after notice, or such
shorter period expressly provided elsewhere in this Lease (provided, if the
nature of Tenant's failure is such that more time is reasonably required in
order to cure, Tenant shall not be in Default if Tenant commences to cure within
such period and thereafter reasonably seeks to cure such failure to completion
and in all events completes such cure within ninety (90) days); (iii) failure by
Tenant to immediately remove any hazardous condition which Tenant has created or
permitted; (iv) vacation of all or a substantial portion of the Premises for
more than thirty (30) consecutive days, or the failure to take possession of, or
to
41
commence construction of tenant improvements in any part of, the Premises within
sixty (60) days after the Space No. 1 Commencement Date; (v) (a) making by
Tenant or any guarantor of this Lease ("Guarantor") of any general assignment
for the benefit of creditors; (b) filing by or against Tenant or any Guarantor
of a petition to have Tenant or such Guarantor adjudged a bankrupt or a petition
for reorganization or arrangement under any law relating to bankruptcy (unless,
in the case of a petition filed against Tenant or such Guarantor, the same is
dismissed within sixty (60) days), (c) appointment of a trustee or receiver to
take possession of substantially all of Tenant's assets located on the Premises
or of Tenant's interest in this Lease, where possession is not restored to
Tenant within thirty (30) days, (d) attachment, execution or other judicial
seizure of substantially all of Tenant's assets located on the Premises or of
Tenant's interest in this Lease, (e) Tenant's or any Guarantor's convening of a
meeting of its creditors or any class thereof for the purpose of effecting a
moratorium upon or composition of its debts, or (f) Tenant's or any Guarantor's
insolvency or admission of an inability to pay its debts as they mature; (vi)
any material misrepresentation herein, or material misrepresentation or omission
in any financial statements or other materials provided by Tenant or any
Guarantor in connection with negotiating or entering this Lease or in connection
with any assignment or sub-letting under Paragraph 15, which in any case has a
material adverse affect upon Landlord; or (vii) cancellation of any guaranty of
this Lease by an Guarantor. The notice and cure periods provided herein are in
lieu of, and not in addition to, any notice and cure periods provided by law.
(b) If a Default occurs, Landlord shall have the rights and remedies
hereinafter set forth, which shall be distinct, separate and cumulative with and
in addition to any other right or remedy allowed under any law or, other
provisions of this Lease:
(i) Landlord may terminate this Lease, in which event the Term of
this Lease shall end, and repossess the Premises by detainer suit, summary
proceedings or other lawful means, and recover from Tenant all the fixed dollar
amounts of rent accrued and unpaid for the period up to and including such
termination date, as well as all other additional sums payable by Tenant, or for
which Tenant is liable or in respect of which Tenant has agreed to indemnify
Landlord under any of the provisions of this Lease, which may be then owing or
unpaid, and all costs and expenses, including without limitation court costs and
reasonable attorney's fees incurred by Landlord in the enforcement of its rights
and
42
remedies hereunder, and, in addition, Landlord shall be entitled to recover as
damages for loss of the bargain and not as a penalty (i) the unamortized cost
(assuming level amortization at 10% interest over the Term) of leasehold
improvements, additions and alterations, if any, made by or paid for by Landlord
and/or construction allowance made pursuant to this Lease and the Work Letter,
(ii) the aggregate sum which at the time of such termination represents the
excess, if any, of the present value on the aggregate rents at the same annual
rate for the remainder of the Term pursuant to the applicable provisions of
Paragraph 2 and Paragraph 3 of this Lease, over the then present value of the
then aggregate fair rental value of the Premises for the balance of the Term
(taking into account any period required to re-lease the Premises and prepare
the Premises for occupancy for a new tenant), such present value to be computed
in each case on the basis of a six percent (6%) per annum discount from the
respective dates upon which such rentals would have been payable hereunder had
this Lease not been terminated, and (iii) any damages in addition thereto,
including the costs of re-letting (as defined below), reasonable attorneys' fees
and court costs, which Landlord shall have sustained by reason of the breach of
any of the covenants of this lease other than for the payment of rent. For
purposes of computing such damages, Tenant's Proportionate Share of Taxes and
Operating Expenses shall be projected, based upon the average rate in increase,
if any in such items from the Space No. 1 Commencement Date through the time of
termination.
(ii) If applicable law permits, Landlord may terminate Tenant's
right of possession and repossess the Premises by detainer suit, summary
proceedings or other lawful means, without terminating this Lease (and if such
Law permits, and Landlord shall not have expressly terminated this Lease in
writing, any termination shall be deemed a termination of Tenant's right of
possession only). In such event, Landlord may recover: (a) any unpaid rent as of
the date possession is terminated, including interest at the Default Rate, (b)
any unpaid rent which accrues during the Term from the date possession is
terminated through the time of award (or which may have accrued from the time of
any earlier award obtained by Landlord through the time of award), including
interest at the Default Rate, less any Net Re-Letting Proceeds (as defined in
Paragraph (g) received by Landlord during such period, and less such loss of
rent that Tenant proves could have been reasonably avoided, and (c) any other
amounts necessary to compensate Landlord for all damages proximately caused by
Tenant's failure to perform its obligations under this Lease,
43
including without limitation, all Costs of Reletting (as defined in Paragraph
(g). Landlord may bring suits for such amounts or portions thereof, at anytime
or times as the same accrue or after the same have accrued, and no suit or
recovery of any portion due hereunder shall be deemed a waiver of Landlord's
right to collect all amounts to which Landlord is entitled hereunder, nor shall
the same serve as any defense to any subsequent suit brought for any amount not
theretofore reduced to judgment.
(iii) Remove from the Premises any furniture, fixtures, equipment
or personal property of Tenant, without liability for trespass or conversion,
and store such items either in the Building or elsewhere at the sole cost of
Tenant and without liability to Landlord. Any of such furniture, fixtures,
equipment and personal property not claimed within thirty (30) days from the
date of removal shall be deemed abandoned.
(c) If Landlord terminates this Lease or Tenant's right to possession,
Landlord shall attempt to mitigate Landlord's damages to the extent required by
applicable Law; provided, however, Landlord shall not be required to accept any
tenant offered by Tenant or to observe any instructions given by Tenant relative
to such reletting. Landlord is not obligated to give priority to leasing the
Premises over any other space Landlord desires to lease in the Building and
shall not be required in any case to offer rent, length of term or other term
for the Premises which are or would be less favorable to Landlord than being
offered for comparable space of Landlord in the Building. If Landlord has not
terminated this Lease or Tenant's right to possession, Landlord shall have no
obligation to mitigate, and may permit the Premises to remain vacant or
abandoned; in such case, Tenant may seek to mitigate damages by attempting to
sublease the Premises or assign this Lease (subject to Paragraph 15).
(d) Landlord shall at all times have the rights and remedies (which
shall be cumulative with each other and cumulative and in addition to those
rights and remedies available under Paragraph (b), above or any Law or other
provision of this Lease), without prior demand or notice except as required by
applicable law; (i) to seek any declaratory, injunctive or other equitable
relief, and specifically enforce this Lease, or restrain or enjoin a violation
or breach of any provision hereof, and (ii) to xxx for and collect any unpaid
rent which has accrued.
(e) Tenant expressly waives the service of any notice of
44
intention to terminate this Lease or to reenter the Premises and waives the
service of any demand for payment of rent or for possession and waives the
service of any and every other notice or demand prescribed by any ordinance,
statute or other law (except as expressly otherwise provided in this Lease) and
agrees that the breach of any covenants or agreements provided in this Lease
shall, in and of itself, without the service of any notice or demand whatever
(except as expressly otherwise provided in this Lease), constitute a forcible
detainer by Tenant of the Premises.
(f) Tenant shall pay, as additional rent, a service charge of Two
Hundred Dollars ($200.00) for bookkeeping and administrative expenses, if rent
is not received within five (5) business days after its due date. In addition,
any rent paid more than five (5) days after due shall accrue interest from the
due date at an annual rate (the "Default Rate") equal to three percent (3%) in
excess of the rate of interest announced from time to time by the First National
Bank of Chicago (or by any other bank selected by Landlord), as its prime,
reference or corporate base rate, changing as and when said rate changes as
announced by such bank, or the highest rate permitted by law, whichever is less,
until payment is received by Landlord. Landlord's acceptance of such service
charge and interest payments shall not be deemed consent by Landlord to late
payments, nor a waiver of Landlord's right to insist upon timely payments at
anytime, nor a waiver of any remedies to which Landlord is entitled as a result
of the late payment of rent.
(g) "Net Re-Letting Proceeds" shall mean the total amount of rent and
other consideration paid by any Replacement Tenants, less all Costs of
Re-Letting, during a given period of time. "Costs of Re-Letting" shall include
without limitation, all reasonable costs and expenses incurred by Landlord for
any repairs, maintenance, changes, alterations and improvements to the Premises,
brokerage commissions, advertising costs, attorneys' fees, any customary free
rent periods or credits, tenant improvement allowances, take-over lease
obligations and other customary, necessary or appropriate economic incentives
required to enter leases with Replacement Tenants, and costs of collecting rent
from Replacement Tenants. "Replacement Tenants" shall mean any persons to whom
Landlord relets the Premises or any portion thereof pursuant to this Paragraph.
(h) No re-entry or repossession, repairs, changes, alterations and
additions, reletting, acceptance of keys from
45
Tenant, or any other action or omission by Landlord shall be construed as an
election by Landlord to terminate this Lease or Tenant's right to possession, or
accept a surrender of the Premises, nor shall the same operate to release Tenant
in whole or in part from any of Tenant's obligations hereunder, unless express
written notice of such intention is sent by Landlord or its agent to Tenant. To
the fullest extent permitted by law, all rent and other consideration paid by
any Replacement Tenants shall be applied: first to the Costs of Re-Letting,
second, to the payment of any rent theretofore accrued, and the residue, if any,
shall be held by Landlord and applied to the payment of other obligations of
Tenant to landlord as the same become due (with any remaining residue to be
retained by Landlord). Rent shall be paid without any prior demand or notice
therefor (except as expressly provided herein) and without any deduction,
set-off or counterclaim, or relief from any valuation or appraisement laws.
Landlord may apply payments received from Tenant to any obligations of Tenant
then accrued, without regard to such obligations as may be designated by Tenant.
Landlord shall be under no obligation to observe or perform any provision of
this Lease on its part to be observed or performed which accrues after the date
of any Default by Tenant hereunder. The times set forth herein for the curing of
defaults by Tenant are of the essence of this Lease. Tenant hereby irrevocably
waives any right otherwise available under any law to redeem or reinstate this
Lease.
22. EXPENSES OF ENFORCEMENT. The nonprevailing party shall pay the
prevailing party all costs and expenses, including reasonable attorneys' fees,
incurred by such prevailing party in successfully enforcing the nonprevailing
party's obligations or successfully defending the prevailing party's rights
under this Lease against the nonprevailing party. Each party hereto shall pay
the costs and expenses, including reasonable attorneys' fees, incurred by the
other party as a result of any litigation in which such first party causes such
second party, without such second party's fault to become involved as a result
of this Lease.
23. COVENANT OF QUIET ENJOYMENT. Landlord covenants that Tenant, on paying
the rent, charges for services and other payments herein reserved or required
and on keeping, observing and performing all the other material terms,
covenants, conditions, provisions and agreements herein contained on the part of
Tenant to be kept, observed and performed, shall, during the Term, peaceably and
quietly have, hold and enjoy the Premises subject to the terms, covenants,
conditions, provisions and agreements hereof.
46
24. SECURITY DEPOSIT.
(a) Tenant shall not initially be required to pay a security deposit.
Not later than one (1) month prior to each Commencement Date (other than the
Space No. 1 Commencement Date), Tenant shall furnish Landlord with Tenant's then
most recent annual and quarterly financial statements. If such financial
statements reveal either (i) Tenant's market capitalization is less than
$200,000,000 or (ii) the ratio of Tenant's debts to the value of its tangible
assets is greater than 65:100, then Tenant shall promptly post a letter of
credit (a "LOC") in favor of Landlord in the amount (the "LOC Amount") of the
sum of (x) the Landlord's Contribution payable by Landlord for the applicable
Space (or portion thereof) to be leased, (y) amounts Landlord reasonably expects
to incur in connection with the leasehold improvements to be made to the
applicable Space (or portion thereof), plus (z) leasing commissions payable with
respect to the lease of the applicable Space (or portion thereof). If Tenant
fails to timely deposit a LOC as required herein, notwithstanding Landlord's
other available remedies, Landlord shall not be obligated to furnish any portion
of Landlord's Contribution unless and until Tenant deposits the applicable LOC.
The LOC shall be unconditional, irrevocable, freely assignable by Landlord,
issued by a "Qualified Issuer" approved by Landlord and in the form of the
letter of credit attached hereto as Exhibit "E".
(b) The LOC is to be retained by Landlord as security for the faithful
performance and observance by Tenant of the covenants, agreements and conditions
of this Lease. The LOC and any proceeds drawn thereunder or any other cash or
security deposited by Tenant with Landlord under this Lease is hereinafter
collectively called the "Security Deposit." Tenant grants to Landlord a security
interest in any cash portion of the Security Deposit to secure the payment of
all Rent and the performance of all covenants and obligations of Tenant under
this Lease owing under this Lease. This Lease shall constitute a security
agreement between Landlord and Tenant for the purpose of creating such security
interest. If and to the extent permitted by applicable law, (a) Tenant shall not
be entitled to any interest on the Security Deposit, (b) Landlord shall not be
obligated to hold the Security Deposit in trust or in a separate account, and
(c) Landlord shall have the right to commingle the Security Deposit with its
other funds. Landlord may use, apply or retain the whole or any part of the
Security Deposit to the extent required for the
47
payment of any Rent payable hereunder as to which Tenant is in Default or to the
extent required for the reimbursement to Landlord of any sum which Landlord may
expend or may be required to expend by reason of Tenant's Default. Upon notice
by Landlord of Landlord's application of all or any portion of the Security
Deposit as aforesaid, with a reasonably detailed accounting of the amount of the
Security Deposit used by Landlord for the specific Default, Tenant shall
replenish the Security Deposit in full by promptly paying to Landlord in cash
the amount so applied.
(c) If Tenant shall fully and faithfully comply with all of the
covenants, agreements and conditions of this Lease, the Security Deposit (or
balance thereof) shall be returned to Tenant after the Termination Date and
surrender of the Premises to Landlord. If the Building is sold, Landlord shall
transfer the Security Deposit to the purchaser, and upon such transfer Landlord
shall be released from all liability for the return thereof, and Tenant shall
look solely to the new landlord for the return thereof. Landlord shall give
Tenant a written notice of any such transfer promptly thereafter, together with
an acknowledgment from the transferee of its receipt thereof.
(d) Tenant shall deposit with Landlord, not later than thirty (30)
days prior to the expiration date of the original LOC deposited by Tenant
hereunder (and not later than thirty (30) days prior to the expiration date of
each replacement LOC deposited by Tenant hereunder), a replacement LOC in form,
content and amount identical to the original LOC and issued by a "Qualified
Issuer" approved by Landlord. If Tenant fails to timely deposit any such
replacement LOC with Landlord and such failure continues for ten (10) days after
written notice to Tenant. (Tenant acknowledges that such failure is not subject
to any notice or cure period under Paragraph 21), then Landlord may draw the
entire proceeds of the LOC then on deposit with Landlord and the proceeds so
drawn shall constitute and comprise part of the Security deposit and may be
held, transferred and applied by Landlord in accordance with the provisions of
this Paragraph 24.
(e) Commencing on the first day of the month following the date that
Landlord has paid the entirety of the Landlord's Contribution for the applicable
Space (or portion thereof) to Tenant (a "First Reduction Date"), and on the
first day of each calendar month thereafter, the LOC Amount may reduce monthly,
by an amount equal to the quotient of (x) the LOC Amount divided by (y)
48
the number of calendar months in the period commencing on the First Reduction
Date and expiring on the Termination Date.
(f) For purposes of this Lease, "Qualified Issuer" means any
commercial bank which, at the particular time its status as a Qualified Issuer
is relevant hereunder, has total assets of at least U.S. $5 billion and has an
overall financial rating of "B" or better from the Lace Company (and the Lace
Company has not given notice that such bank is on its "watch list" or that its
rating is under reconsideration or reevaluation). If at anytime after issuance
of the LOC (or any replacement LOC), the issuing bank fails to be a Qualified
Issuer or is not otherwise financially sound in Landlord's reasonable judgment,
the LOC or replacement LOC, as the case may be, upon written notice from
Landlord to Tenant, shall be immediately reissued by a Qualified Issuer approved
by Landlord, which reissuance shall be in accordance with the provisions of this
Lease.
25. REAL ESTATE BROKER. Tenant represents that Tenant has dealt with (and
only with) Xxxxxx Xxxxx & X'Xxxxxx ("FHO"), Tanquay-Xxxxx-Xxxxxxxx ("TBS") and
Amerimar Xxxxx Management Company, Inc. ("Amerimar") as brokers in connection
with this Lease, and that insofar as Tenant knows, no other broker negotiated
this Lease or is entitled to any commission in connection therewith. Tenant
agrees to indemnify, defend and hold Landlord harmless from and against any
claims, for a commission or other compensation in connection with this Lease
(including, without limitation, any claim arising in connection with a broker's
lien), made by any broker or finder other than the brokers named above who
claims to have dealt with or communicated to Tenant in connection with this
Lease, provided that Landlord has not in fact retained such broker or finder.
Landlord represents that Landlord has dealt with (and only with) FHO, TBS and
Amerimar as brokers in connection with this Lease, and that insofar as Landlord
knows, no other broker negotiated this Lease or is entitled to any commission in
connection therewith. Landlord agrees to indemnify, defend and hold Tenant
harmless from and against any claims, for a commission or other compensation in
connection with this Lease (including, without limitation, any claim arising in
connection with a broker's lien), made by any broker, including FHO, TBS and
Amerimar, who claims to have dealt with or communicated to Landlord in
connection with this Lease, provided that Tenant has not in fact retained such
broker or finder.
26. MISCELLANEOUS.
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(a) RIGHTS CUMULATIVE. All rights and remedies of Landlord under this
Lease shall be cumulative and none shall exclude any other rights or remedies
allowed by law, in equity or otherwise.
(b) CAPTIONS AND USAGE. The titles appearing in connection with the
various sections and paragraphs of this lease are for convenience only; they are
not intended to indicate all of the subject matter in the text and they are not
to be used in interpreting this Lease nor for any purpose in the event of any
controversy. As used herein (i) the term "person" shall be deemed to include a
natural person, a trustee, a corporation, a joint venture, a partnership, a
limited liability company, a governmental unit and any other form of legal
entity; (ii) all usages in the singular or plural number shall be deemed to have
been made, respectively, in the plural or singular number as well; the use of
any gender includes all genders.
(c) BINDING EFFECT. Each of the provisions of this Lease shall extend
to and shall, as the case may require, bind or inure to the benefit not only of
Landlord and of Tenant, but also of their respective successors or assigns,
provided this clause shall not permit any assignment by Tenant contrary to the
provisions of Paragraph 15 hereof.
(d) LEASE CONTAINS ALL TERMS. All of the representations and
obligations of Landlord are contained herein, and no modification, waiver or
amendment of this Lease or of any of its conditions or provisions shall be
binding upon Landlord unless in writing signed by Landlord or by a duly
authorized agent of Landlord empowered by a written authority signed by
Landlord.
(e) DELIVERY FOR EXAMINATION. Submission of the form of this Lease for
examination shall not bind Landlord in any manner, and no Lease or obligations
of Landlord shall arise until this instrument is signed by both Landlord and
Tenant and delivery is made to each; provided, however, the execution and
delivery by Tenant of this Lease to Landlord or Manager, or the leasing agent of
the Building shall constitute an irrevocable offer by Tenant to lease the
Premises on the terms and conditions herein contained, which offer may not be
revoked for five (5) business days after such delivery.
(f) NO AIR RIGHTS. No rights to any view or to light or
50
air over any property, whether belonging to Landlord or any other person, are
granted to Tenant by this Lease.
(g) MODIFICATION OF LEASE. If any prospective Mortgagee or Paramount
Lessor requires that certain modifications be made to this Lease, which
modifications will not require Tenant to pay any additional amounts or otherwise
detrimentally change the rights or obligations of Tenant hereunder, Tenant
shall, within thirty (30) days following Landlord's request, execute and deliver
appropriate instruments effecting such modifications. Tenants failure to
complete, execute and deliver any such modifications within five (5) days after
Landlord's second request therefor shall, at Landlord's sole option (i) be
deemed a material Default under Paragraph 21 hereof or (ii) Tenant shall be
deemed to have irrevocably appointed Landlord or Beneficiary (if Landlord is a
trustee of a land trust) as Tenant's attorney-in-fact to execute and deliver
such modification in Tenant's name.
(h) INTENTIONALLY DELETED
(i) TRANSFER OF LANDLORD'S INTEREST. Notwithstanding anything
contained herein to the contrary, Tenant agrees that neither Landlord nor any
partner in Landlord or Beneficiary, as the case may be, nor any other person
having any interest, direct or indirect, immediate or more removed than
immediate, in Landlord or Beneficiary, as the case may be, shall have any
personal liability with respect to any of the provisions of this Lease and
Tenant shall look solely to the estate and property of Landlord in the Land and
the Building for the satisfaction of Tenant's remedies, including without
limitation, the collection of any judgment or the enforcement of other judicial
process requiring the payment or expenditure of money by Landlord, subject,
however, to the prior rights of any Mortgagee, and no other assets of Landlord
and Beneficiary (if Landlord is a trustee of a land trust) or its partners, or
of any other aforesaid person having an interest in Landlord or Beneficiary, as
the case may be, shall be subject to levy, execution or other judicial process
for the satisfaction of Tenant's claims. Without limitation of the foregoing,
upon each transfer of the Land and the Building and the landlord's interest in
this Lease, the transferor shall automatically be released from all liability
under this Lease. Tenant further acknowledges that Landlord may assign its
interest in this Lease to a mortgage lender as additional security and agrees
that such an assignment shall not release Landlord from its obligations
hereunder and that, subject to the other provisions of
51
this Section, Tenant shall continue to look to Landlord for the performance of
its obligations hereunder.
(j) PROHIBITION AGAINST RECORDING
Neither this Lease, nor any memorandum, affidavit or other writing with respect
thereto, shall be recorded by Tenant or by anyone acting through, under or on
behalf of Tenant, and the recording thereof in violation of this provision shall
make this Lease null and void at Landlord's election.
(k) INTENTIONALLY DELETED
(l) RELATIONSHIP OF PARTIES. Nothing contained in this Lease shall be
deemed or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, joint venturer or any
association between Landlord and Tenant, it being expressly understood and
agreed that neither the method of computation of rent nor any act of the parties
hereto shall be deemed to create any relationship between Landlord and Tenant
other than the relationship of landlord and tenant.
(m) APPLICATION OF PAYMENTS.
Landlord shall have the right to apply payments received from Tenant pursuant to
this Lease (regardless of Tenant's designation of such payments) to satisfy any
obligations of Tenant hereunder, in such order and amounts, as Landlord in its
sole discretion, may elect.
(n) PARTIAL INVALIDITY. If any term, provision or condition contained
in this Lease shall, to any extent, be invalid or unenforceable, the remainder
of this Lease (or the application of such term, provision or condition to
persons or circumstances other than those in respect of which it is invalid or
unenforceable) shall not be affected thereby, and each and every other term,
provision and condition of this Lease shall be valid and enforceable to the
fullest extent possible permitted by law.
(o) WAIVER OF TRIAL BY JURY; VENUE. LANDLORD AND TENANT HEREBY DO EACH
WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTER CLAIM BROUGHT BY EITHER
OF THE PARTIES HERETO AGAINST THE OTHER ON ANY MATTER WHATSOEVER ARISING OUT OF,
OR IN ANY WAY CONNECTED WITH, THIS LEASE, THE RELATIONSHIP OF LANDLORD AND
TENANT, TENANT'S USE OF OR OCCUPANCY OF THE PREMISES, OR ANY CLAIM
52
OF INJURY OR DAMAGE IN ANY EMERGENCY STATUTORY OR ANY OTHER STATUTORY REMEDY. IF
LANDLORD COMMENCES ANY SUMMARY PROCEEDING FOR NON-PAYMENT OF RENT, TENANT WILL
NOT INTERPOSE ANY NON-COMPULSORY COUNTERCLAIM OF WHATEVER NATURE OR DESCRIPTION
IN ANY SUCH PROCEEDING (EXCLUDING ANY AFFIRMATIVE DEFENSE THAT MUST BE ASSERTED
IN SUCH PROCEEDING). IF EITHER LANDLORD OR TENANT DESIRES TO BRING AN ACTION
AGAINST THE OTHER IN CONNECTION WITH THIS LEASE, SUCH ACTION SHALL BE BROUGHT IN
THE FEDERAL OR STATE COURTS LOCATED IN CHICAGO, ILLINOIS. LANDLORD AND TENANT
CONSENT TO THE JURISDICTION OF SUCH COURTS AND WAIVE ANY RIGHT TO HAVE SUCH
ACTION TRANSFERRED FROM SUCH COURTS ON THE GROUNDS OF IMPROPER VENUE OR
INCONVENIENT FORUM.
(p) TENANT'S AUTHORITY. Tenant hereby represents that Tenant is a
corporation, duly organized pursuant to the laws of the State of Delaware, and
is authorized to conduct business in the State of Illinois. Upon the execution
of this Lease, Tenant shall furnish Landlord with a certified copy of
resolutions, certified by Tenant's Secretary as being a true and correct copy of
such resolutions, authorizing the actual signatories to execute leases. The
persons executing this Lease on behalf of Tenant further represent and warrant
that they are duly authorized to do so, and that they occupy the positions with
Tenant as delineated on the signature page(s) of this Lease.
27. NOTICES. All notices to be given under this Lease shall be in writing
and delivered personally or deposited in the United State mail, certified or
registered mail with return receipt requested, postage prepaid, addressed as
follows:
If to Landlord:
c/o Amerimar Xxxxx Management Company, Inc.
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Building Manager
or to such other person or such other address designated by notice sent by
Landlord or Tenant.
If to Tenant:
Sapient Corporation
000 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
00
Xxxxxxx, Xxxxxxxx 00000
with a copy (in case of notices of default) to:
Sapient Corporation
Xxx Xxxxxxxx Xxxxx
Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention Director of Operations
with a copy (in case of notices of default) to:
MacKenzie & Xxxxxxxxx
Xxx Xxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx
or to such other address as is designated by Tenant in a notice to Landlord.
Notice by mail shall be deemed to have been given when deposited in the United
States mail as aforesaid. Notice from the building or property manager shall be
deemed to be notice from Landlord. If Tenant vacates the Premises and Landlord
has no other current notice address for Tenant, then notices maybe served on
Tenant's registered agent, or if there be no agent, then notices may be by
publication.
28. HAZARDOUS MATERIALS.
(a) Tenant shall not transport, use, store, maintain, generate,
manufacture, handle, dispose, release or discharge any "Hazardous Material" (as
defined below) upon or about the Property, nor permit Tenant's employees,
agents, contractors, and other occupants of the Premises to engage in such
activities upon or about the Property. However, the foregoing provisions shall
not prohibit the transportation to and from, and use, storage, maintenance and
handling within, the Premises of substances customarily used in offices (or such
other business or activity expressly permitted to be undertaken in the Premises
under Paragraph 5); provided that such substances shall be used and maintained
only in such quantities as are reasonably necessary for such permitted use of
the Premises, strictly in accordance with applicable law and the manufacturers'
instructions thereto, and any remaining such substances shall be completely,
properly and
54
lawfully removed from the Property upon expiration or earlier termination of
this Lease.
(b) Tenant shall promptly notify Landlord of: (i) any enforcement,
cleanup or other regulatory action taken or threatened by any governmental or
regulatory authority with respect to the presence of any Hazardous Material on
the Premises or the migration thereof from or to other property, (ii) any
demands or claims made or threatened by any party against Tenant or the Premises
relating to any loss or injury resulting from any Hazardous Material, (iii) any
release, discharge or nonroutine, improper or unlawful disposal or
transportation of any Hazardous Material on or from the Premises, and (iv) any
matters where Tenant is required by law to give a notice to any governmental
regulatory authority respecting any Hazardous Materials on the Premises.
Landlord shall have the right (but not the obligation) to join and participate,
as a party, in any legal proceedings or actions affecting the Premises initiated
in connection with any environmental, health or safety law. At such times as
Landlord may reasonably request, Tenant shall provide Landlord with a written
list identifying any Hazardous Material then used, stored, or maintained upon
the Premises, the use and approximate quantity of each such material, a copy of
any material safety data sheet ("MSDS") issued by the manufacturer therefor,
written information concerning the removal, transportation and disposal of the
same, and such other information as Landlord may reasonably require or as may be
required by law. The term "Hazardous Material" for purposes hereof shall mean
any chemical, substance, material or waste or component thereof which is now or
hereafter listed, defined or regulated as a hazardous toxic chemical, substance,
material or waste or component thereof by any federal, state or local governing
or regulatory body having jurisdiction, or which would trigger any employee or
community "right-to-know" requirements adopted by any such body, for which any
such body has adopted any requirements of the preparation or distribution of an
MSDS.
(c) If any Hazardous Material is released, discharged or disposed of
by Tenant or any other occupant of the Premises, or their employees, agents or
contractors, on or about the Property in violation of the foregoing provisions,
Tenant shall immediately, properly and in compliance with applicable laws clean
up and remove the Hazardous Material from the Property and any other affected
property and clean or replace any affected personal property (whether or not
owned by Landlord), at Tenant's expense. Such clean up and removal work shall be
subject to Landlord's prior
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written approval (except in emergencies), and shall include, without limitation,
any testing, investigation, and the preparation and implementation of any
remedial action plan required by any governmental body having jurisdiction or
reasonably required by Landlord. If Tenant shall fail to comply with the
provisions of this Paragraph within five (5) days after written notice by
Landlord, or such shorter time as may be required by law or in order to minimize
any hazard to persons or property, Landlord may (but shall not be obligated to)
arrange for such compliance directly or as Tenant's agent through contractors or
other parties selected by Landlord, at Tenant's expense (without limiting
Landlord's other remedies under this Lease or applicable law).
(d) Landlord represents, warrants and agrees that (1) neither Landlord
nor, to Landlord's actual knowledge, any third party, has used, generated,
stored or disposed of, or permitted the use, generation, storage or disposal of,
any Hazardous Material on, under, about or within the Property in violation of
any law or regulation that has not heretofore been remedied, and (2) that
Landlord will not, and will not knowingly permit any third party to, use,
generate, store or dispose of any hazardous Material on, under, about or within
the Property in violation of any law or regulation.
29. ADA. The parties acknowledge that the Americans With Disabilities Act
of 1990 (42 U.S.C. 12101 et seq.) and regulations and guideline promulgated
thereunder, as amended and supplemented from time to time (collectively referred
to herein as the "ADA") establish requirements under Title III of the ADA
("Title III") pertaining to business operations, accessibility and barrier
removal, and that such requirements may be unclear and may or may not apply to
the Premises and the Building. The parties acknowledge and agree that Tenant has
been provided an opportunity to inspect the Premises and the Building sufficient
to determine whether or not the Premises and the Building in their condition as
of the date hereof deviate in any manner from the ADA Accessibility Guidelines
("ADAAG") or any other requirements under the ADA pertaining to the
accessibility of the Premises or the Building. Tenant further acknowledges and
agrees that except as may otherwise be specifically provided herein, Tenant
accepts the Premises and the Building in "as-is" condition and agrees that
Landlord makes no representation or warranty as to whether the Premises or the
Building conform to the requirements of the ADAAG or any other requirements
under the ADA pertaining to the accessibility of the Premises or the Building.
Tenant has prepared or reviewed the
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plans and specifications for the Work and has independently determined that such
plans and specifications are in conformance with the ADAAG and any other
requirements of the ADA. Tenant further acknowledges and agrees that to the
extent that Landlord prepared, reviewed or approved any of those plans and
specifications, such action shall in no event be deemed any representation or
warranty that the same comply with any requirements of the ADA. Notwithstanding
anything to the contrary in this Lease, the parties hereby agree to allocate
responsibility for Title III compliance as follows: (a) Tenant shall be
responsible for all Title III compliance and costs in connection with the
Premises, including structural work, if any, and including any leasehold
improvements or other work to be performed in the Premises under or in
connection with this Lease, and (b) Landlord shall perform, at Landlord's cost
(subject to inclusion in Operating Expenses to the extent allowed), any
so-called Title III "path of travel" requirements triggered by any construction
activities or alterations in the Premises. Except as set forth above with
respect to Landlord's Title III obligations, Tenant shall be solely responsible
for all other requirements under the ADA relating to Tenant or any affiliates or
persons or entities related to Tenant (collectively, "Affiliates"), operations
of Tenant or Affiliates, or the Premises, including, without limitation,
requirements under Title I of the ADA pertaining to Tenant's employees. Without
limiting the foregoing, Landlord shall be responsible for complying with the ADA
with respect to the common areas of the Building (and the costs thereof shall be
included in Operating Expenses to the extent otherwise allowed, excluding the
costs of remedying any violations existing as of the date hereof of the ADA as
enacted, interpreted and enforced as of the date hereof).
30 EXPANSION OPTION
(a) Tenant shall have the option (the "Expansion Option") to lease
certain additional space in the building contiguous to the Premises and
designated by Landlord (the "Expansion Space"), containing, at Landlord's
option, either (i) approximately 8,300 rentable square feet of space or (ii) a
rentable area such that the sum of the rentable areas of the Expansion Space and
the initial Premises is 48,286 rentable square feet, for a lease term to
commence effective as the date (the "Expansion Date") that is the day
immediately following the fifth (5th) anniversary of the Space No. 1
Commencement Date (providing that if Landlord shall, for any reason, be unable
to deliver
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possession of the Expansion Space to Tenant on such date, Landlord shall have no
liability for such failure (except as expressly provided in the last sentence of
this Paragraph 30(a)), but the lease term for the Expansion space shall not
commence until Landlord is able to deliver possession of the Expansion Space to
Tenant [unless the delay is attributable to Tenant]), and expiring on the
Termination Date. Tenant shall notify Landlord in writing of its exercise of the
Expansion Option not later than nine (9) months prior to the Expansion Date. If
Landlord shall, for any reason not attributable to Tenant, fail to make
available to Tenant possession of the Expansion Space within ninety (90) days
after the scheduled Expansion Date, then Tenant shall be entitled to abatement
of rent and possible delivery of temporary space as described in, and subject to
the terms and conditions of, Paragraph 3(b) above, as if the Expansion Space
were a Space described therein.
(b) If Tenant timely and properly exercises the Expansion Option:
(i) The Rent payable for the Expansion shall be equal to the
"market rate of rent" that Landlord reasonably anticipates will be in effect for
the Expansion Space as of the Expansion Date. "Market rate of rent" shall mean
the total rate of rent, as reasonably determined by Landlord, including
component parts of such rate of rent such as base rent, fixed and/or indexed
rental adjustments and all rental adjustments for Taxes and Operating Expenses
for the Building, taking into account Landlord contributions, if any, to Taxes
and Operating Expenses for the Building (and base years or stops), and tenant
concessions, if any, such as rent abatements and tenant improvement allowances,
which Landlord is offering to third party tenants for office space in the
Building comparable to the Expansion Space (taking into account the lengths of
the terms and the sizes and levels of improvement of the spaces). The Base Rent
payable for the Expansion Space shall be subject to adjustment during the Terms
as provided in Landlord's written notice setting forth the market rate of rent.
There shall be no abatement of Base Rent or Additional Rent for the Expansion
Space, except as may be specifically included in the market rate of rent for the
Expansion Space.
(ii) Landlord shall not be obligated to perform any leasehold
improvement work in the Expansion Space or give Tenant any allowance for any
such work or any other purposes, except as to any allowance which may be
specifically included in the market rate
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of rent for the Expansion Space.
(iii) Except for the rate of rent and except as otherwise
provided herein, all the terms and provisions of this Lease shall remain the
same and in full force and effect with respect to Tenant's lease of the
Expansion Space.
(c) It shall be a condition of Tenant's right to exercise the
Expansion Option that Tenant is not in Default under this Lease, either on the
date Tenant exercises the Expansion Option or on the Expansion Date, and this
Lease is in full force and effect both on the date Tenant exercises the
Expansion Option and on the Expansion Date. It shall be a further condition of
Tenant's right to lease the Expansion Space that if (i) Landlord is obligated to
perform any leasehold improvement work in the Expansion Space or to give Tenant
any allowance for any such work or any other purposes and (ii) Tenant's most
recent financial statements (which may be Tenant's annual report, if Tenant's
stock is traded on a public securities exchange) reveal either (I) Tenant's
market capitalization is less than $200,000,000 or (II) the ratio of Tenant's
debts to the value of its tangible assets is greater than 65:100, then Tenant
shall promptly deliver to Landlord a LOC in the LOC Amount, as described in
Paragraph 24, as if the Expansion Space were a Space (and Landlord shall not be
obligated to perform such work or disburse such allowance until Tenant has
delivered such LOC).
(d) If Tenant exercises the Expansion Option, Landlord and Tenant
shall execute and deliver an amendment to this Lease reflecting the lease of the
Expansion Space by Landlord to Tenant on the terms provided above, which
amendment shall be executed and delivered within thirty (30) days after Tenant
exercises the Expansion Option.
(e) The Expansion Option shall automatically terminate and become null
and void upon the first to occur of (i) the expiration or termination of this
Lease, (ii) the termination of Tenant's right to possession of all or any part
of the Premises, (iii) the assignment of this Lease by Tenant, in whole or in
part (other than to an Affiliate), (iv) the sublease by Tenant of all or any
part of the Premises (other than to an Affiliate), or (v) the failure of Tenant
to timely or properly exercise the Expansion Option.
31. RIGHT OF FIRST OPPORTUNITY.
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(a) For purposes of this Lease, at anytime the "Option Space" shall
mean any space in the Building that is (i) on the same floor and contiguous to
any part of the Premises at such time or (ii) on a contiguous floor and
immediately above or below any part of the Premises at such time.
(b) With respect to any lease which Landlord hereafter intends to
enter into with a third-party tenant for either (i) all or any portion of the
Option Space, or (ii) the space described in clause (i) above, plus any other
space in the Building (for purposes hereof, any such other space shall be deemed
to be part of the Option Space) and which has a lease term commencing at any
time prior to the fifth (5th) anniversary of the Space No. 1 Commencement Date
(but excluding any new or renewal lease or lease expansion with any then
existing tenant of all or any portion of the Option Space), Landlord shall give
Tenant written notice of such intent ("Landlord's Notice") prior to Landlord
entering into such lease. Landlord's Notice shall specify (i) the location and
rentable area of the portion of the Option Space which Landlord desires to lease
(which is henceforth referred to as the "Actual Option Space"), (ii) the
proposed lease term for the Actual Option Space, (iii) the date upon which the
Actual Option Space shall be available for occupancy, and (iv) the market rate
of rent for the Actual Option Space (which shall be determined by Landlord using
the same factors specified in Paragraph 30(b)(i) above with respect to the
Expansion Space). Item (iv) shall be quoted by Landlord in Landlord's Notice for
a lease having a lease term which would expire on the Termination Date.
Notwithstanding the foregoing, if the Actual Option Space constitutes one full
floor or more, Tenant may instead request Landlord to provide a Landlord's
Notice for less than the entire available Actual Option Space (which lesser
space shall then be deemed to be the "Actual Option Space"), provided such
lesser space must be either or both (i) an entire floor or floors and/or (ii) a
portion of a floor (provided that is less than one entire floor, (A) Tenant must
designate the rentable area desired by Tenant, which may not be less than 10,000
rentable square feet or more than 18,000 rentable square feet [and Landlord may
then designate the location and rentable area of the Actual Option Space,
provided such rentable area shall not deviate from the rentable area requested
by Tenant by more than 10%] and (B) the costs of demising the Actual Option
Space, making the remainder of the space on the floor marketable, creating a
common corridor and making all other improvements required to convert the floor
to a standard multi-tenant floor shall be considered by Landlord in
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determining the market rate of rent for the Actual Option Space). Tenant shall
thereupon have a right (a "Right of First Opportunity") to lease all, but not
less than all, of the Actual Option Space, subject to the following terms and
conditions:
(i) Tenant gives Landlord a written notice of its election to
exercise the Right of First Opportunity within seven (7) days after Landlord
gives Tenant Landlord's Notice;
(ii) If (i) Landlord is obligated to perform any leasehold
improvements work in the Actual Option Space or to give Tenant any allowance for
any such work or any other purposes and (ii) Tenant's most recent financial
statements (which may be Tenant's annual report, if Tenant's stock is traded on
a public securities exchange) reveal either (I) Tenant's market capitalization
is less than $200,000,000 or (II) the ratio of Tenant's debts to the value of
its tangible assets is greater than 65:100, then Tenant shall promptly deliver
to Landlord a LOC in the LOC Amount, as described in Paragraph 24, as if the
Expansion space were a Space (and Landlord shall not be obligated to perform
such work or disburse such allowance until tenant has delivered such LOC); and
(iii) Tenant is not in Default under this Lease, either on the
date Tenant exercises the Right of First Opportunity or on the proposed
commencement date of the lease term for the Actual Option Space, and this Lease
is in full force and effect both on the date Tenant exercises the Right of First
Opportunity and on the proposed commencement date of the lease term for the
Actual Option Space.
If Tenant does not timely or properly exercise any Right of First Opportunity,
Landlord may at any time thereafter lease all of the Actual Option Space to any
third-party tenant on such terms and provisions as Landlord may elect (provided
that all of the economic terms offered to such third-party tenant are not more
than five percent (5%) more favorable to such third party tenant than all of the
economic terms set forth in Landlord's written notice to Tenant), without any
further rights of Tenant to lease such space unless and until one hundred eighty
(180) days have elapsed without Landlord leasing the Actual Option Space or such
third-party has vacated such space and such space is again available for leasing
by a third-party.
(c) If Tenant exercises a Right of First Opportunity,
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the following terms and provisions shall apply:
(i) Landlord shall lease the Actual Option Space to Tenant for a
lease term commencing on the availability date specified in Landlord's Notice
(provided that if Landlord shall, for any reason, be unable to deliver
possession of the Actual Option Space to Tenant on such date, Landlord shall
have no liability for such failure, but the lease term of the Actual Option
Space shall not commence until Landlord is able to deliver possession of the
Actual Option Space to Tenant [unless the delay is attributable to Tenant] and
expiring on the Termination Date.
(ii) The base rent and rental adjustments payable for the Actual
Option Space shall be as set forth in the applicable Landlord's Notice.
(iii) Tenant shall not be entitled to any rental abatement for
the Actual Option Space, except as otherwise set forth in the applicable
Landlord's Notice.
(iv) Tenant shall accept the Option Space in an "as-is",
"where-is" physical condition, without any agreement, representation, credit or
allowance from Landlord with respect to the improvement or condition thereof,
except as otherwise set forth in the applicable Landlord's Notice.
(v) All of the terms and provisions of this Lease shall apply
with respect to Tenant's lease of the Actual Option Space, except as the same
may be inconsistent with the provisions of this Paragraph 31.
(d) If Tenant exercises a Right of First Opportunity, Landlord and
tenant shall execute and deliver an amendment to this Lease reflecting the lease
of the Actual Option Space by Landlord to Tenant on the terms provided above,
which amendment shall be executed and delivered within thirty (30) days after
Tenant exercises the Right of First Opportunity.
(e) Each Right of First Opportunity shall automatically terminate and
become null and void upon the first to occur of (i) the expiration or
termination of the Lease, (ii) the termination of Tenant's right to possession
of all or any part of the Premises, (iii) the assignment of this Lease by
Tenant, in whole or in part (other than to an Affiliate), (iv) the sublease by
Tenant of all or any part of the Premise (other than to an Affiliate) or (v) the
62
failure of Tenant to timely or properly the Right of First Opportunity.
32. RENEWAL OPTION
(a) Tenant shall have an option (the "First Renewal Option") to renew
the Term with respect to all (but not less than all) of the Premises demised
under or pursuant to this Lease as of the expiration date of the initial Term,
for one additional term (the "First Renewal Term") of five (5) years.
(b) If Tenant exercise the First Renewal Option, Tenant shall have an
additional option (the "Second Renewal Option") to renew the Term with respect
to all (but not less than all) of the Premises demised under or pursuant to this
Lease as of the expiration date of the First Renewal Term, for one additional
Term (the "Second Renewal Term") of five (5) years.
(c) It shall be conditions of Tenant's exercise of each of the First
Renewal Option and the Second Renewal Option (each, a "Renewal Option"), that:
(i) Tenant shall give Landlord written notice of Tenant's
election to exercise the Renewal Option not later than nine (9) months prior to
the expiration date of the initial Term or the First Renewal Term (each,
"Renewal Term"), as applicable.
(ii) If (i) Landlord is obligated to perform any leasehold
improvements work in the Premises during the Renewal Term or to give Tenant any
allowance for any such work or any other purposes and (ii) Tenant's most recent
financial statements (which may be Tenant's annual report, if Tenant's stock is
traded on a public securities exchange) reveal either (I) Tenant's market
capitalization is less than $200,000,000 or (II) the ratio of Tenant's debts to
the value of its tangible assets is greater than 65:100, then Tenant shall
promptly deliver a LOC to Landlord in the LOC Amount, as described in Paragraph
24, as if the entire Premises during the Renewal Term were a Space (and Landlord
shall not be obligated to perform such work or disburse such allowance until
Tenant has delivered such LOC); and
(iii) Tenant is not in Default under this Lease, either on the
date Tenant exercises the Renewal Option or on the expiration date of the
initial Term of the First Renewal Term, as applicable, and this Lease is in full
force and effect of the date
63
on which Tenant exercises the Renewal Option and on the proposed commencement
date of the Renewal Term.
(d) TERMS. If Tenant timely and properly exercises a Renewal Option:
(i) The rate of Base Rent payable for the applicable Renewal Term
shall be equal to the Renewal Base Rent. "Renewal Base Rent" means the gross
rent per rentable square foot per year that, as of the relevant date of
determination, is being offered by Landlords to tenants that are extending or
renewing their leases for space comparable to the Premises (i.e., with
comparable improvements, size and floor location) in the Building and in
comparable buildings in downtown Chicago, with lease terms of comparable length
and commencement as the applicable Renewal Term. By way of example only, if as
of the date Renewal Base Rent is to be determined, landlords are generally
offering to lease comparable space to existing tenants for a term equal to the
Renewal Term, at a rental rate of $22.00 per rentable square foot per year, with
a tenant improvement allowance of $5.00 per rentable square foot, then (assuming
a 10% interest rate), the Renewal Base Rent would be equal to $20.73 per
rentable square foot per year.
Landlord shall notify Tenant of Landlord's determination of Renewal Base
Rent for the applicable Renewal Term within thirty (30) days after Tenant's
exercise of the Renewal Option. Tenant shall have thirty (30) days ("Tenant's
Review Period") after receipt of Landlord's notice within which to accept such
proposed Renewal Base Rent of to reasonably object thereto in writing. If Tenant
so objects, Landlord and Tenant shall attempt in good faith to agree upon such
Renewal Base Rent. If Landlord and Tenant fail to reach agreement by the date
that is twenty (20) days following the expiration of Tenant's Review Period (the
"Outside Agreement Date"), then each party's good faith determination of Renewal
Base Rent shall be submitted to arbitration in accordance with the following
procedure:
(x) (A) Not later than twenty (20) days following the Outside
Agreement Date, Landlord and Tenant shall each appoint one independent
arbitrator who shall by profession be a real estate appraiser (with the
professional designation of M.A.I. or, if M.A.I. ceases to exist, a comparable
designation from an equivalent professional appraiser organization) or office
leasing broker who shall have been active over the ten (10) year period ending
on the date of such appointment in appraising or leasing of commercial
64
office properties in downtown Chicago.
(B) The two arbitrators so appointed shall within ten (10) days
of the date of the appointment of the last appointed arbitrator agree upon and
appoint a third arbitrator, who shall be qualified under the same criteria set
forth hereinabove for qualification of the initial two arbitrators.
(C) The determination of the arbitrators shall be limited solely
to the issue of whether Landlord's or Tenant's submitted Renewal Base Rent for
the Renewal Term is the most accurate. The three arbitrators shall reach such
decision and notify Landlord and Tenant thereof within thirty (30) days after
the appointment of the third arbitrator. The decision of the majority of the
three arbitrators shall be binding upon Landlord and Tenant.
(D) If the two arbitrators fail to timely agree upon and appoint
a third arbitrator, both arbitrators shall be dismissed and Landlord and Tenant
each shall promptly select and appoint one new arbitrator possessing the
qualifications described above. Such new arbitrators shall promptly follow he
procedure outlined above to select a third arbitrator.
(E) The cost of arbitration shall be paid by Landlord if Tenant's
submittal Renewal Base Rent is selected and by Tenant if Landlord's submitted
Renewal Base Rent is selected.
(F) Notwithstanding the foregoing, if either Landlord or Tenant
fails to appoint an arbitrator within thirty (30) days after the Outside
Agreement Date as provided above and such failure to appoint an arbitrator is
not cured within five (5) days after delivery of written demand to do so by the
other party (provided such other party has appointed its arbitrator prior to
sending such written demand), then the arbitrator appointed by the party sending
such demand, acting alone, shall reach a decision on the applicable Renewal Base
Rent and notify Landlord and Tenant in writing thereof, and such arbitrator's
decision shall be binding on Landlord and Tenant.
(y) If for any reason whatsoever the applicable Renewal base Rent has
not been determined by the commencement date of the applicable Renewal Term,
then the Renewal Base Rent proposed by Landlord shall be utilized as the rate of
Base Rent during the applicable Renewal Term until such time as the final
Renewal Base
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Rent has been conclusively determined (at which time, if Tenant's submitted
Renewal Base Rent is selected as the rate of Base Rent for the applicable
Renewal Term, Landlord shall credit against Base Rent next coming due the excess
amount paid by Tenant, if any, for the period during the applicable Renewal Term
during which the Landlord's proposed Renewal Base Rent was utilized as the rate
of Base Rent).
(ii) Tenant shall remain obligated to pay Expense Adjustment
Amount and Tax Adjustment Amount, as provided in this Lease, during the Renewal
Term, provided that for the Renewal Term, the "Base Year" shall be deemed to be
the calendar year in which the applicable Renewal Term commences.
(iii) Tenant shall have no further options to renew the Term of
this Lease beyond the expiration date of the Second Renewal Term.
(iv) Landlord shall not be obligated to perform any leasehold
improvement work in the Premises or give Tenant any allowance for any such work
or any other purposes during or for a Renewal Term, except as specifically
included in the Renewal Base Rent.
(v) Except for the rate of rent and except as otherwise provided
herein, all of the terms and provisions of this Lease shall remain the same and
in full force and effect during a Renewal Term. There shall be no abatement of
Base Rent or Additional Rent for the Premises during a Renewal Term, except as
specifically included in the Renewal Base Rent.
(e) If Tenant exercises a Renewal Option, Landlord and Tenant shall
execute and deliver an amendment to this Lease reflecting the lease of the
Premises by Landlord to Tenant for the Renewal Term on the terms provided above,
which amendment shall be executed and delivered within thirty (30) days after
Tenant exercises the Renewal Option.
(f) Each Renewal Option shall automatically terminate and become null
and void upon the first to occur of (i) the expiration or termination of this
Lease, (ii) the termination of Tenant's right to possession of all or any part
of the Premises, (iii) the assignment of this Lease by Tenant, in whole or in
part (other than to an Affiliate), (iv) the sublease by Tenant of all or any
part of the Premises (other than to an Affiliate), or (v) the
66
failure of Tenant to timely or properly exercise the Renewal Option.
IN WITNESS WHEREOF, Landlord and Tenant, intending to be legally bound
hereby, have executed this Office Lease as of the day and year first above
written.
TENANT: LANDLORD:
SAPIENT CORPORATION, a Delaware XXXXX FAMILY, L.L.C., a Delaware
corporation limited liability company, as
beneficiary of Xxxx TaylorBank,
not personally, but solely as
Trustee under Trust Agreement
dated June 26, 1995 and known as
Trust No. 95-6300
By: By: AMERIMAR XXXXX
------------------------------- MANAGEMENT COMPANY
Its: INC., as Agent
------------------------------
(Title)
By:
------------------------------
Its:
-----------------------------
(Title)
