Exhibit 10.11
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LEASE AGREEMENT
BETWEEN
360 NORTH MICHIGAN TRUST, A DELAWARE BUSINESS TRUST,
AS LANDLORD,
AND
XXXXXXXXXXX.XXX INC.,
A MICHIGAN CORPORATION,
AS TENANT
DATED: JANUARY 3, 2000
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TABLE OF CONTENTS
Page
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LEASE INFORMATION SUMMARY ............................................................. iv
1. LEASE GRANT ........................................................................ 1
2. TERM ............................................................................... 1
2.1. Commencement Date ............................................................. 1
2.2. Condition of Premises ......................................................... 1
2.3. INTENTIONALLY DELETED ......................................................... 1
3. RENT ............................................................................... 1
3.1. Base Rent ..................................................................... 1
3.2. Additional Rent ............................................................... 1
3.3. Payment ....................................................................... 4
3.4. Rent Abatement ................................................................ 5
4. SECURITY DEPOSIT ................................................................... 5
4.1. Cash .......................................................................... 5
4.2. Letter of Credit .............................................................. 5
4.3. INTENTIONALLY DELETED ......................................................... 6
5. LANDLORD'S OBLIGATIONS ............................................................. 6
5.1. Services ...................................................................... 6
5.2. Utilities ..................................................................... 7
5.3. Excess Utility Use ............................................................ 7
5.4. Restoration of Services ....................................................... 8
6. IMPROVEMENTS; ALTERATIONS; REPAIRS; MAINTENANCE .................................... 8
6.1. Improvements; Alterations ..................................................... 8
6.2. Repairs and Maintenance ....................................................... 9
6.3. Performance of Work ........................................................... 9
6.4. Mechanic's Liens .............................................................. 9
6.5. Rooftop Communications Equipment .............................................. 10
6.6. Construction of Roof Deck ..................................................... 10
6.7. Installation of Electrical Generator(s) ....................................... 10
7. USE ................................................................................ 11
8. ASSIGNMENT AND SUBLETTING .......................................................... 11
8.1. Transfers; Consent ............................................................ 11
8.2. Recapture ..................................................................... 13
8.3. Additional Compensation ....................................................... 13
9. INSURANCE; WAIVERS; SUBROGATION; INDEMNITY ......................................... 13
9.1. Insurance ..................................................................... 13
9.2. Waiver of Negligence; No Subrogation .......................................... 14
9.3. Indemnity by Tenant ........................................................... 14
9.4. Indemnity by Landlord ......................................................... 15
10. SUBORDINATION; ATTORNMENT; NOTICE TO LANDLORD'S MORTGAGEE ......................... 15
10.1. Subordination ............................................................... 15
10.2. Attornment .................................................................. 15
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10.3. Notice to Landlord's Mortgagee .............................................. 15
11. RULES AND REGULATIONS ............................................................. 15
12. CONDEMNATION ...................................................................... 16
12.1. Total Taking ................................................................ 16
12.2. Partial Taking -- Tenant's Rights ........................................... 16
12.3. Partial Taking -- Landlord's Rights ......................................... 16
12.4. Award ....................................................................... 16
13. FIRE OR OTHER CASUALTY ............................................................. 17
13.1. Landlord's Rights ............................................................ 17
13.2. Repair Obligation ............................................................ 17
14. PERSONAL PROPERTY TAXES ............................................................ 17
15. DEFAULT ............................................................................ 18
15.1. Events of Default ............................................................ 18
15.2. Default Interest ............................................................. 19
16. REMEDIES ........................................................................... 19
16.1. Right To Terminate ........................................................... 19
16.2. Receipt Of Money After Termination ........................................... 19
16.3. Recovery Of Damages .......................................................... 19
16.4. Right To Re-Enter ............................................................ 19
16.5. Independent Covenant ......................................................... 20
16.6. Legal Expenses ............................................................... 20
17. PAYMENT BY TENANT; NON-WAIVER ...................................................... 20
17.1. Payment by Tenant ............................................................ 20
17.2. No Waiver .................................................................... 21
18. SURRENDER OF PREMISES .............................................................. 21
19. HOLDING OVER ....................................................................... 21
20. CERTAIN RIGHTS RESERVED BY LANDLORD ................................................ 22
21. MISCELLANEOUS ...................................................................... 23
21.1. Landlord Transfer ............................................................ 23
21.2. Landlord's Liability ......................................................... 24
21.3. Force Majeure ................................................................ 24
21.4. Brokerage .................................................................... 24
21.5. Estoppel Certificates ........................................................ 24
21.6. Notices ...................................................................... 25
21.7. Severability ................................................................. 25
21.8. Amendments; and Binding Effect ............................................... 25
21.9. Quiet Enjoyment .............................................................. 25
21.10. No Merger ................................................................... 25
21.11. No Offer .................................................................... 26
21.12. Entire Agreement ............................................................ 26
21.13. Calendar Days ............................................................... 26
21.14. Prohibition Against Leasehold Mortgages ..................................... 26
21.15. Waiver of Trial by Jury ..................................................... 26
21.16. Landlord's Remedies Cumulative .............................................. 26
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21.17. Prohibition Against Recordation ............................. 27
21.18. Joint and Several Liability ................................. 27
21.19. Corporate Tenants ........................................... 27
21.20. Right of First Offer ........................................ 27
21.21. Right of First Refusal ...................................... 28
21.22. Option To Renew ............................................. 29
21.23. Tenant's First Expansion Option ............................. 29
21.24. Tenant's Second Expansion Option ............................ 30
21.25. Tenant's Third Expansion Option ............................. 31
21.26. Arbitration ................................................. 32
21.27. Tenant's Termination Right .................................. 33
EXHIBIT A - OUTLINE OF PREMISES
EXHIBIT B - BUILDING RULES AND REGULATIONS
EXHIBIT C - LETTER OF CREDIT
EXHIBIT D - ESTOPPEL CERTIFICATE
EXHIBIT E - INTENTIONALLY DELETED
EXHIBIT F - WORKLETTER
EXHIBIT G - CERTIFICATE OF COMMENCEMENT DATE
EXHIBIT H - LANDLORD'S BASE BUILDING WORK
EXHIBIT I - SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT
EXHIBIT J - SIGNAGE
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LEASE INFORMATION SUMMARY
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I. LEASE DATE January 3, 2000
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II PARTIES AND ADDRESSES
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A. Landlord: 000 Xxxxx Xxxxxxxx Trust, a Delaware business
trust
B. Landlord's Address for c/o Xxxxxxx Xxxxxxx-Xxxxxxx Management
Notices: Corporation
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: General Manager
With copies to:
Mr. J. Xxxx Xxxxxxx
000 Xxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
And to:
Xxxxx, Xxxxxx & Xxxxxx, LLP
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. XxXxxxxxx, Esq.
And to:
Much Shelist Freed Xxxxxxxxx Xxxxx &
Xxxxxxxxxx, P.C.
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
C. Tenant: xxxxxxxxxxx.xxx inc., a Michigan corporation
D. Tenant's Address for 0000 Xxxx Xxxxxxx Xxxx
Notices Prior to the Suite 100
Commencement Date: Xxxxxxx, Xxxxxxxx 00000
Attention: President
With a copy to:
Golden & Xxxxxx, P.C.
000 Xxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
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E. Tenant's Address for 000 Xxxxx Xxxxxxxx Xxxxxx
Notices After the Suite 1800
Commencement Date: Xxxxxxx, Xxxxxxxx 00000
Attention: President
With a copy to:
Golden & Xxxxxx, P.C.
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
F. Guarantor: None
III. PROPERTY INFORMATION
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A. Building: 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx
00000, including all related land, landscaped
areas, driveways, parking facilities and
similar improvements to the extent applicable
B. Premises: Suite No. 1800 in the Building comprising
approximately forty-three thousand eight
hundred forty-nine (43,849) rentable square
feet on the 8/th/, 18/th/, 19/th/ and 21/st/
floors (Section 1)
IV. TERM
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A. Term of Lease: Ten (10) years beginning on the Commencement
Date and ending on the Termination Date;
provided, however, if the Commencement Date
occurs on any date which is not the first day
of a calendar month, then the Term shall be
increased to ten (10) years plus a partial
month beginning on the Commencement Date
through and including the last day of the
calendar month in which the Commencement Date
occurs (Section 2)
B. Commencement Date: The later of (i) May 1, 2000, or (ii) seven
(7) days after Landlord notifies Tenant that
Landlord has substantially completed the
Premises, provided that if the Premises are
not substantially completed as defined in the
Workletter on or before August 1, 2000 for
any reason due to the fault of Landlord, then
Base Rent will xxxxx until the Premises are
substantially completed, and once the Term
commences, Tenant will receive one (1) day of
free rent for each day after August 1, 1999
that the Premises were not substantially
completed (Section 2)
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C. Termination Date: The date preceding the tenth (10th)
anniversary of the Commencement Date, unless
the Commencement Date occurs on any date
which is not the first day of a calendar
month, in which event the Termination Date
shall be the last day of the calendar month
in which the tenth (10/th/) anniversary of
the Commencement Date falls, subject to
Tenant's right to extend the Term as set
forth in Section 21.22 of this Lease
(Section 2)
V. RENT
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A. Base Rent: No Rent shall be due from Tenant during the
first month of the first lease year;
$24.85 per square foot, subject to $0.50 per
square foot annual escalations commencing in
the second lease year;
$1,089,647.60 per year ($90,803.97 per month;
$24.85 per sq. ft.) during the first lease
year;$1,111,572.10 per year ($92,631.01 per
month; $25.35 per sq. ft.) during the second
lease year;$1,133,496.60 per year ($94,458.05
per month; $25.85 per sq. ft.) during the
third lease year;$1,155,421.10 per year
($96,285.09 per month; $26.35 per sq. ft.)
during the fourth lease year; $1,177,345.60
per year ($98,112.13 per month; $26.85 per
sq. ft.) during the fifth lease
year;$1,199,270.10 per year ($99,939.18 per
month; $27.35 per sq. ft.) during the sixth
lease year;$1,221,194.60 per year
($101,766.21 per month; $27.85 per sq. ft.)
during the seventh lease year;$1,243,119.10
per year ($103,593.25 per month; $28.35 per
sq. ft.) during the eighth lease
year;$1,265,043.60 per year ($105,420.30 per
month; $28.85 per sq. ft.) during the ninth
lease year; and$1,286,968.10 per year
($107,247.34 per month; $29.35 per sq. ft.)
during the tenth lease year (Section 3.1)
B. Landlord's Address for Xxxxxxx Xxxxxxx-Xxxxxxx Management
Payment of Rent: Corporation A/A/F 360 North Michigan Trust
0000 Xxxxxxxxxxx Xxxxxx Xxxxx Xxxxxxx,
Xxxxxxxx 00000 (Sections 3.1 and 3.3)
C. Tenant's Proportionate sixteen and eighty-one one-hundredths percent
Share: (16.81%), which equals the percentage that
the rentable square footage of the Premises
(which is stipulated by the parties to be
43,849 square feet) bears to the total square
footage of all rentable office space in the
Building (which is stipulated by the parties
to be 260,823 square feet) (Section 3.2)
D. Base Year: 2001 (Section 3.2)
E. Operating Costs Tenant's Proportionate Share of the amount by
which
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Adjustment: the Operating Costs incurred during any
calendar year during the Term exceed the
Operating Costs incurred during the Base
Year. (Section 3.2)
F. Tax Adjustment: Tenant's Proportionate Share of the amounts
by which the Taxes paid during any calendar
year of the Term exceed the Taxes paid during
the Base Year (Section 3.2)
VI. OTHER PROVISIONS
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A. Security Deposit: Zero until the earlier of (i) the end of the
fifth (5/th/) lease year, or (ii) the date
the Letter of Credit described below is no
longer required by Landlord; $272,411.91 on
the earlier of (a) the first day of the sixth
(6/th/) lease year, or (b) the date the
Letter of Credit described below is no longer
required by Landlord, and continuing through
the Termination Date (Section 4.1); and
Letter of Credit in the following amounts:
$1,250,000.00 during the first lease year;
$1,250,000.00 during the second lease year;
$ 937,500.00 during the third lease year;
$ 625,000.00 during the fourth lease year;
$ 312,500.00 during the fifth lease year;
and
zero during the sixth (6/th/) through tenth
(10/th/) lease years.
Notwithstanding the foregoing, but subject to
the terms of Sections 21.20, 21.21, 21.23,
21.24, and 21.25 of the Lease, if at any time
during the first five (5) lease years Tenant
becomes a company whose stock is publicly
traded, and if Tenant demonstrates to
Landlord that Tenant has cash or cash
equivalents in an amount not less than
$30,000,000.00, then the amount of the letter
of credit shall be reduced to $500,000.00,
and thereafter the amount of the letter of
credit shall be further reduced by twenty-
five percent (25%) annually. In addition,
provided that within thirty (30) days before
or after the first, second and third
anniversary dates of the date that the amount
of the letter of credit was reduced to
$500,000.00 Tenant demonstrates to Landlord
that Tenant has cash or cash equivalents in
an amount not less than $30,000,00.00, then
the letter of credit will no longer be
required by Landlord, and the only security
deposit which Tenant shall be required to
maintain with Landlord shall be cash in an
amount equal to three (3) months of Rent at
the rental rate then being paid by Tenant
under this Lease (Section 4.2)
B. Electrical Usage Rate: Separately metered (Section 5.2)
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C. Permitted Use: General office and administrative use and for
the operation of a computer internet company
and hosting related equipment (Section 7)
D. Landlord's Broker: Xxxxxxx Xxxxxxx-Xxxxxxx Management
Corporation (Section 21.4)
E. Tenant's Broker: Xxxxxx X. Xxxxxxx, Inc. (Section 21.4)
The summary of lease information set forth above and any addendum and/or
exhibit(s) attached to this Lease are incorporated into and made a part of the
following Lease. Each reference in this Lease to any of the lease information
set forth above means the respective information above, including all of the
terms provided under the particular section of this Lease pertaining to such
information. In the event of any conflict between the summary of lease
information and the provisions of this Lease, the latter will control. All
section references in this summary refer to the sections of the Lease where such
provision is described.
LANDLORD:
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360 NORTH MICHIGAN TRUST,
a Delaware business trust
By: XXXXXXX XXXXXXX-XXXXXXX
MANAGEMENT CORPORATION, an Illinois
corporation, its agent
By /s/ J. Xxxx Xxxxxxx
_____________________________________
Its: President
___________________________________
TENANT:
-------
xxxxxxxxxxx.xxx inc.,
a Michigan corporation
By /s/ Xxxxxx X. Xxxxxx
_____________________________________
Its: CEO
___________________________________
viii
THIS LEASE AGREEMENT (the "Lease") is made and entered into as of the Lease
Date between Landlord and Tenant. All capitalized terms not otherwise defined in
the body of the Lease have the meanings established in the Lease Information
Summary above.
1. LEASE GRANT.
Subject to the terms of this Lease, Landlord leases to Tenant and Tenant
rents from Landlord the Premises in the Building. The Premises are outlined on
the floor plan attached to this Lease as Exhibit A.
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2. TERM.
2.1. Commencement Date.
The term of this Lease (the "Term") will commence on the Commencement Date
and will end on the Termination Date, unless earlier terminated in accordance
with the terms of Section 21.27 below. Upon taking occupancy of the Premises,
Tenant agrees to sign the Certificate of Commencement Date attached to this
Lease as Exhibit G confirming the Commencement Date and the Termination Date.
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2.2. Condition of Premises.
Tenant's acceptance of possession of any portion of the Premises will be
deemed conclusive evidence that Tenant has approved and accepted that portion of
the Premises in its "AS-IS" condition on the date Tenant accepts possession,
subject to the completion of normal punchlist items. Landlord has no obligation
to make any changes or improvements to the Premises except as set forth in
Section 6.1 below. The cost of any other changes and/or improvements will be
paid for by Tenant.
2.3. INTENTIONALLY DELETED.
3. RENT.
3.1. Base Rent.
Base Rent is payable by Tenant throughout the Term in the amounts and at
the times set forth in the Lease Information Summary above. The first monthly
installment of Base Rent is due and payable contemporaneously with the execution
of this Lease; subsequently, Base Rent is payable no later than the first day of
each month beginning on the second full calendar month of the Term. The monthly
Base Rent for any partial month at the beginning of the Term will equal the
product of 1/365 of the annual Base Rent in effect during the partial month
multiplied by the number of days in the partial month from and after the
Commencement Date.
3.2. Additional Rent.
(a) Payment of Additional Rent. Commencing on January 1/st/ of the
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calendar year immediately following the Base Year, Tenant will pay to
Landlord as Additional Rent ("Additional Rent") the Operating Costs
Adjustment and the Tax Adjustment, which will be calculated and determined
by Landlord as set forth below.
(b) Definition - Operating Costs. The term "Operating Costs" means
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all expenses and disbursements (subject to the limitations set forth below)
that Landlord incurs in connection with the ownership, operation,
maintenance and management of the Building, determined in accordance with
sound accounting principles consistently
1
applied, including, but not limited to, the following costs: (1) wages and
salaries (including management fees and reimbursements of expenses incurred
by Landlord's management agent) of all employees engaged in the operation,
maintenance, and security of the Building, including taxes, insurance and
benefits relating to such costs; (2) all uniforms, supplies, tools and
materials used in the operation, supervision, maintenance, repair,
replacement and security of the Building; (3) costs for improvements made
to the Building which, although capital in nature, are reasonably expected
to reduce the normal operating costs of the Building, as well as capital
improvements made in order to comply with any law, statute, ordinance,
code, regulation or insurance requirement(s) promulgated by any
governmental authority and which is enacted or amended after the date of
this Lease, as amortized over the useful economic life of such improvements
as determined by Landlord in its reasonable discretion; (4) cost of all
utilities, except the cost of utilities reimbursable to Landlord by the
Building's tenants; (5) insurance expenses; (6) repairs, replacements, and
general maintenance of the Building, including costs of inspecting and
depreciation of machinery and equipment; (7) service or maintenance
contracts and/or agreements for the operation, maintenance, repair,
replacement, or security of the Building (including, without limitation,
alarm service, window washing, landscaping, elevator maintenance, HVAC
system maintenance, security, cleaning, trash removal, sweeping and snow
removal); (8) legal, accounting, engineering and other professional fees
and expenses relating to managing and maintaining the Building; (9) costs,
including reasonable attorney's fees, incurred in contesting, protesting,
attempting to reduce and/or attempting to restrict increases in taxes; and
(10) all other costs properly constituting operating costs according to
sound accounting principles consistently applied.
(c) Exclusions From Operation Costs. Operating Costs do not include
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costs for (1) capital improvements made to the Building (except capital
improvements described in Section 3.2(b)(3) above; (2) repair, replacements
and general maintenance paid by proceeds of insurance or by Tenant or other
third parties; (3) interest, principal, amortization, costs, fees, expenses
or other payments relating to any loan(s) made to Landlord which is(are)
secured by the Building, except for interest payments made in connection
with Subsection 3.2(b)(3) above; (4) depreciation; (5) real estate
brokerage and/or leasing commissions; and (6) renovations, alterations or
improvements to the space of other tenants or occupants of the Building or
vacant space in the Building; (7) any tenant work performed or alteration
of space leased to Tenant or other tenants or occupants of the Building,
whether such work or alteration is performed for the initial occupancy by
such tenants or occupants or thereafter; (8) any cash or other
consideration paid by Landlord on account of, with respect to or in lieu of
the tenant work or alterations described in clause (7) above; (9) ground
rent; (10) repairs necessitated by the negligence of Landlord or required
to cure violations of laws in effect on the Lease execution date and any
penalties or interest incurred or accumulated for any such violations; (11)
legal fees and costs associated with the negotiating, entering into and or
enforcement of any leases (other than enforcement of rules and
regulations); (12)compensation paid to officers or executives of Landlord;
(13) leasing commissions and advertising and promotional expenses; (14) the
cost of repairs incurred by reason of fire or other casualty or
condemnation to the extent that either (i) Landlord is compensated therefor
through proceeds of insurance or condemnation awards, (ii) Landlord failed
to obtain insurance against such fire or casualty, if insurance was
available at a commercially reasonable rate, against a risk of such nature
at the time of
2
same (except to the extent of a commercially reasonable insurance
deductible amount or except to the extent of Landlord's payment up to the
amount of such deductible), or (iii) Landlord is not fully compensated
therefor due to the coinsurance provisions of its insurance policies on
account of Landlord's failure to obtain a sufficient amount of coverage
against such risk (except to the extent of a commercially reasonable
insurance deductible amount or except to the extent of Landlord's payment
up to the amount of such deductible); (15) overtime HVAC costs or
electricity costs if charged separately to Building tenants; (16) the cost
of performing additional services or installation to or for tenants to the
extent that such service exceeds that provided by Landlord to Tenant
without charge hereunder; (17) "takeover expenses" (i.e., expenses incurred
by Landlord with respect to space located in another building of any kind
or nature in connection with the leasing of space in the Building); (18)
any amounts payable by Landlord by way of indemnity or for damages or which
constitute a fine, interest or penalty, including interest or penalties for
any late payments of operating costs; (19) any improvement installed or
work performed or any other cost or expense incurred by Landlord in order
to comply with the requirements for the obtaining or renewal of a
certificate of occupancy for the Building or any space therein; (20) any
cost representing an amount paid for services or materials to a related
person, firm or entity to the extent such amount exceeds the amount that
would be paid for such services or materials at the then existing market
rates to an unrelated person, firm or corporation; (21) expenses
attributable to the parking garage or the storage space, the operating
costs incurred by Landlord relative to retail stores and any specialty
service in the Building; (22) the cost of correcting defects in
construction which occur or of which Landlord becomes aware within one (1)
year of the completion of such construction; and (23) the cost of overtime
or other expenses to Landlord in curing its defaults under this Lease.
(d) Definition - Taxes. The term "Taxes" means all taxes,
------------------
assessments, and governmental charges payable in a calendar year,
regardless when such Taxes become a lien upon the Building, including but
not limited to all real estate and transit district taxes and assessments,
sewer charges, sales and use taxes, ad valorem taxes, personal property
taxes, the Illinois Property Replacement Tax and any other taxes and
assessments attributable to the Building (or its operation), the grounds,
parking areas, driveways, and alleys around the Building, but excluding any
federal and state taxes on the income of Landlord from the operation of the
Building. If the present method of taxation changes so that in lieu of the
whole or any part of any Taxes, there is levied on Landlord a capital tax
directly on the rents received from the Building or a franchise tax,
assessment, or charge based, in whole or in part, upon such rents for the
Building, then all such taxes, assessments, or charges, or the part of such
taxes so based, will be deemed to be included within the term "Taxes" for
purposes of this Lease.
(e) Payment of Additional Rent. Landlord will make a good faith
--------------------------
estimate of the Additional Rent to be due from Tenant for all or part of
any calendar year during the Term, and Tenant agrees to pay to Landlord, on
January 1, 2002 and on the first day of each subsequent calendar month
during the Term, an amount equal to 1/12/th/ of the estimated Additional
Rent for such full or partial calendar year. From time to time, Landlord
may estimate and re-estimate the Additional Rent to be due from Tenant and
deliver a copy of the estimate or re-estimate to Tenant. Subsequently, the
monthly installments of Additional Rent payable by Tenant will be
appropriately adjusted in accordance with Landlord's estimations so that by
the end of the calendar year in question Tenant will have paid all of the
Additional Rent as estimated by Landlord. By
3
April 1 of each calendar year, or as soon after that date as practicable,
Landlord will furnish to Tenant a statement of Operating Costs paid for the
previous year, adjusted as provided in Section 3.2(f) below (the "Operating
Costs Statement"). By September 1 of each calendar year, or as soon after
that date as practicable, Landlord will furnish to Tenant a statement of
the Taxes paid for the previous year, adjusted as provided in Section
3.2(f) below (the "Tax Statement"). If the Operating Costs Statement and/or
the Tax Statement reveal(s) that Tenant paid more in Operating Costs
Adjustment or Tax Adjustment than the actual amount for the year for which
such statement was prepared, then Landlord will either credit Tenant for
such excess within thirty (30) days or refund such excess amount to Tenant
if this Lease has expired or been terminated. Likewise, if Tenant paid less
in Operating Costs Adjustment than the actual amount for the year for which
such statement was prepared, then Tenant shall pay such deficiency to
Landlord within ten (10) days after Landlord's demand. This provision will
survive the Termination Date of this Lease.
(f) Occupancy and Tax Adjustment. With respect to any calendar year
----------------------------
or partial calendar year in which the Building is not fully occupied, the
Operating Costs and/or Taxes for such period will, for the purposes of this
Lease, be increased to the amount which would have been incurred had the
Building been fully occupied.
(g) Audit of Books and Records. Landlord shall maintain books and
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records with respect to Operating Costs and Taxes in accordance with sound
accounting and management practices. Tenant shall have the right to examine
such books and records showing the Operating Costs and Taxes upon
reasonable prior notice to Landlord and during normal business hours within
sixty (60) days following the delivery of the Operating Costs Statement and
the Tax Statement described in Section 3.2(e) above. Unless Tenant takes
written exception to any item of Operating Costs or Taxes and specifies to
Landlord in detail the reasons for such exception as to a particular item
within sixty (60) days after the delivery of the Operating Costs Statement
and the Tax Statement, the Operating Costs Statement and the Tax Statement
shall be considered as final and accepted by Tenant. Notwithstanding any
exception made by Tenant, Tenant shall pay to Landlord the full amount of
the Operating Costs Adjustment and the Tax Adjustment, subject to
readjustment at such time as any such exception may be resolved. If Tenant
takes exception to the Operating Costs Adjustment and/or the Tax Adjustment
and so notifies Landlord in writing prior to the expiration of said sixty
(60) day period, then Landlord will seek certification from Landlord's
independent certified public accountant or consultant as to the proper
amount of the Operating Costs Adjustment and/or the Tax Adjustment. In such
event, the certification obtained by Landlord shall be considered final and
binding on both Landlord and Tenant and Tenant shall reimburse Landlord
immediately upon demand for the cost of obtaining such certification,
unless the certification reveals that the Operating Costs Adjustment and/or
the Tax Adjustment were overstated by at least five percent (5%), in which
event the cost of obtaining such certification shall be borne by Landlord.
3.3. Payment.
Tenant agrees to timely pay to Landlord during the Term Base Rent,
Additional Rent and all additional sums to be paid by Tenant to Landlord under
this Lease (collectively the "Rent"), without notice, demand, abatement,
deduction, setoff or counterclaim, at Landlord's Address for Payment of Rent or
as otherwise specified by Landlord. Tenant further agrees to pay a late fee
equal to two percent (2%) of any delinquent payment which is more than five (5)
4
days late to reimburse Landlord for its cost and inconvenience incurred as a
consequence of Tenant's delinquency. In no event, however, will the charges
permitted under this Section 3.3 or elsewhere in this Lease, to the extent they
are considered to be interest under law, exceed the maximum lawful rate of
interest.
3.4. Rent Abatement.
In the event any of the Base Building Work described on Exhibit H attached
---------
hereto which Landlord is required to perform under this Lease is not
substantially completed on or before the end of the first lease year of the Term
for any reason other than force majeure or a delay caused by Tenant, then the
Base Rent due from Tenant beginning in the second lease year shall remain equal
to the Base Rent owed by Tenant hereunder during the first lease year, and there
will be no escalation of Base Rent until said items are substantially completed.
Tenant acknowledges that it shall have no other remedy against Landlord relating
to or resulting from any delay(s) in the substantial completion of said items
unless the Base Building Work described in Exhibit H is not completed on or
---------
before December 31, 2000, in which event Tenant may bring an action for specific
performance to enforce the terms of this Lease.
4. SECURITY DEPOSIT.
4.1. Cash.
Tenant shall pay, in cash, simultaneously with the execution of this Lease,
the amount of the Security Deposit which will be held by Landlord to secure
Tenant's performance of its obligations under this Lease. Landlord will have no
obligation to pay any interest on the Security Deposit to Tenant. The Security
Deposit is not an advance payment of Rent nor a measure or limit of Landlord's
damages upon an Event of Default (as defined in Section 15 below). Landlord may,
from time to time and without prejudice to any other remedy, use all or a part
of the Security Deposit to perform any obligation Tenant fails to perform under
this Lease. Following any such application of the Security Deposit, Tenant
agrees to pay to Landlord on demand the amount so applied in order to restore
the Security Deposit to its original amount. Provided that Tenant has performed
all of its obligations under this Lease, Landlord will, within thirty (30) days
after the end of the Term, return to Tenant the portion of the Security Deposit
which was not applied to satisfy Tenant's obligations. If Landlord transfers its
interest in the Premises and the transferee assumes Landlord's obligations under
this Lease, then Landlord will deliver or credit the Security Deposit to the
transferee and Landlord subsequently will have no further liability for the
return of the Security Deposit.
4.2. Letter of Credit.
At any time prior to the end of the fifth (5/th/) lease year of the Term,
upon notice from Landlord to Tenant that Landlord is prepared to enter into a
contract with its general contractor to perform the "Work" (as defined in the
Workletter), Tenant shall promptly deliver to Landlord a letter of credit (the
"Letter of Credit") in the applicable amounts and for the time periods set forth
in Article VI of the Lease Information Summary above as security for the prompt,
full and faithful performance by Tenant of the terms and provisions of this
Lease, subject to the following provisions:
5
(a) Form and Issuer. The Letter of Credit must be a clean,
---------------
unconditional, stand-by, irrevocable Letter of Credit in favor of Landlord in
substantially the form attached as Exhibit C, issued by a federally insured
---------
national banking association located in Chicago, Illinois which is acceptable to
Landlord in all respects.
(b) Expiration; Extension or Replacement. The Letter of Credit must:
------------------------------------
(i) have an expiration date no earlier than the Termination Date of this Lease,
or (ii) be renewed annually through the Termination Date, in which event Tenant
must submit to Landlord original amendments extending the Letter of Credit
expiration date (or replacement Letters of Credit with extended expiration
dates), on an annual basis no later than thirty (30) days prior to the
expiration date of the Letter of Credit then in effect. Failure to so extend the
expiration date of the Letter of Credit in the foregoing manner will, in
addition to all of Landlord's other remedies, entitle Landlord to draw down the
Letter of Credit without notice to Tenant and to hold or apply the proceeds as
provided in this Lease.
(c) Draws. If Tenant violates this Lease, Landlord, without notice
-----
to Tenant, may but is not obligated to draw down on the Letter of Credit in an
amount equal to the extent of the default by Tenant and apply the proceeds to
the payment of any sum owing or any other sum which Landlord may be required or
deems necessary to spend or incur by reason of such violation. Following any
such application of the Security Deposit as described above, Tenant agrees to
provide Landlord with a replacement or amended Letter of Credit or pay to
Landlord on demand the amount so applied in order to restore the Security
Deposit to its original amount. Provided that Tenant has performed all of its
obligations under this Lease, Landlord will, within thirty (30) days after the
end of the Term, return the Letter of Credit to Tenant. If Landlord transfers
its interest in the Premises and the transferee assumes Landlord's obligations
under this Lease, then Landlord will assign the Security Deposit to the
transferee and Landlord subsequently will have no further liability for the
return of the Letter of Credit.
4.3. INTENTIONALLY DELETED.
5. LANDLORD'S OBLIGATIONS.
5.1. Services.
Landlord will furnish to the Premises (1) water at those points of supply
provided for general use of tenants of the Building; (2) heating and air
conditioning between 8:00 a.m. and 6:00 p.m. on weekdays and from 8:00 a.m. to
1:00 p.m. on Saturdays (collectively "Normal Business Hours"); (3) janitorial
service to the Premises on weekdays, other than holidays, for Building-standard
installations and such window washing as may, from time to time, be reasonably
required; (4) passenger elevators for ingress and egress, provided that Landlord
may reasonably limit the number of operating elevators during non-business hours
and holidays; and (5) electrical current for Tenant's equipment in a sufficient
quantity to meet Tenant's Permitted Use in accordance with the terms of Exhibit
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H attached hereto, provided that Tenant will be responsible for the cost of any
-
additional electrical requirements beyond the usage contemplated under this
Lease in accordance with Section 5.3 below. At the request of Tenant, Landlord
will perform routine maintenance in the Premises (i.e. changing light bulbs,
repairing door handles, etc.) and upon demand from Landlord, Tenant will
promptly pay to Landlord the cost of such repairs and/or services at rates
determined by Landlord from time to time. Landlord will maintain the common
areas of the Building in reasonably good order and condition, except for damage
caused by Tenant, or its employees, agents or invitees. If Tenant desires any
heating or air conditioning at any time other than during Normal Business Hours,
6
then such services will be supplied to Tenant upon the written request of Tenant
delivered to Landlord not less than twenty-four (24) hours prior to the business
day preceding such extra usage, and Tenant, upon demand from Landlord, will pay
Landlord for such services, at rates determined by Landlord from time to time,
which rate is currently Thirty Dollars ($30.00) per hour. Landlord and Tenant
acknowledge that Tenant has access to the Building twenty-four (24) hours a day,
seven (7) days a week.
5.2. Utilities.
Tenant shall pay directly to the provider of electricity to the Premises
the cost of such electricity used or consumed at, on or in the Premises as and
when the charges for the same become due and payable. If Tenant fails to pay for
such electricity when the same becomes due and payable, then Landlord will have
the right but not the duty to pay the same, which amount so paid will be deemed
Rent and will be payable immediately upon demand from Landlord. Tenant agrees to
(i) keep and cause to be kept closed all windows in the Premises, (ii) at all
times cooperate fully with Landlord in the operation of the heating and air
conditioning systems, and (iii) abide by all reasonable regulations and
requirements which Landlord may prescribe to permit the proper functioning and
protection of the heating and air conditioning systems.
5.3. Excess Utility Use.
Landlord is not required to furnish electrical current for equipment whose
electrical energy consumption exceeds Tenant's Permitted Use as set forth on
Tenant's electrical and HVAC plans described in the Workletter, except that
Landlord will provide seven (7) xxxxx per foot on floors 18 and above and five
(5) xxxxx per foot on floors 17 and below. If Tenant's requirements for or
consumption of electricity exceed the electricity to be provided by Landlord as
described in Section 5.1 above, Landlord will, at Tenant's expense, make
reasonable efforts to supply such service through the then-existing feeders and
risers serving the Building and the Premises, and Tenant agrees to pay to
Landlord the cost of such service within ten days after Landlord has delivered
to Tenant an invoice for such services. Landlord may determine the amount of
such additional consumption and potential consumption by any verifiable method,
including installation of a separate meter in the Premises installed,
maintained, and read by Landlord, at Tenant's expense. Tenant may not install
any electrical equipment requiring special wiring or requiring voltage in excess
of normal office usage or otherwise exceeding Building capacity unless approved
in advance and in writing by Landlord, which approval will not be unreasonably
withheld. Tenant agrees not to use electricity in the Premises which exceeds the
capacity of existing feeders and risers to or wiring in the Premises. If
approved by Landlord, any risers or wiring required to meet Tenant's excess
electrical requirements will be installed by Landlord, upon Tenant's request and
at Tenant's cost, if, in Landlord's judgment, the same are necessary and will
not cause permanent damage to the Building or the Premises, cause or create a
dangerous or hazardous condition, entail excessive or unreasonable alterations
or repairs, or expenses, or interfere with or disturb other tenants of the
Building. If Tenant uses machines or equipment in the Premises which affect the
temperature otherwise maintained by the air conditioning system or otherwise
overload any utility, Landlord may install supplemental air conditioning units
or other supplemental equipment in the Premises, and such cost, including the
cost of installation, operation, use, and maintenance, will be paid by Tenant to
Landlord within ten (10) days after Landlord has delivered to Tenant an invoice
for such cost.
7
5.4. Restoration of Services.
Landlord agrees to use reasonable efforts to restore any service that
becomes unavailable. Except as specifically set forth below, such unavailability
will not, however, render Landlord liable for any damages, be a constructive
eviction of Tenant, constitute a breach of any implied warranty, or entitle
Tenant to any abatement of Tenant's obligations under this Lease.
Notwithstanding anything in this Section 5.4 to the contrary, (i) in the event
that a disruption in any service which is within the reasonable control of
Landlord results in the Premises becoming untenantable for the Permitted Use for
fifteen (15) consecutive days, then commencing on the sixteenth (16/th/) day
Base Rent shall xxxxx until such services are restored; and (ii) in the event
that a disruption in any service which is within the reasonable control of
Landlord results in the Premises becoming untenantable for the Permitted Use for
ninety (90) consecutive days, then at anytime after the ninety-first (91/st/)
day Tenant shall have the right to terminate this Lease effective thirty (30)
days following Tenant's notice of termination to Landlord.
6. IMPROVEMENTS; ALTERATIONS; REPAIRS; MAINTENANCE.
6.1. Improvements; Alterations.
Landlord will, at its own expense, perform the base building work as
described on Exhibit H attached hereto. In addition, Landlord will afford
---------
Tenant an allowance of approximately $40.456 per rentable square foot to cover
the cost of construction of certain non-structural, tenant improvements to be
made to the Premises, including but not limited to architectural, mechanical,
plumbing and engineering fees. Tenant acknowledges and agrees that no more than
$4.00 per rentable square foot of said allowance may be used towards
telephone/data systems and moving expenses. Tenant shall have the right to
submit to Landlord the names of two (2) prospective general contractors
acceptable to Landlord to perform the tenant improvements to the Premises,
Landlord shall submit to Tenant the names of two (2) additional general
contractors acceptable to Landlord to perform the tenant improvements to the
Premises. From such group of general contractors, Landlord shall select one (1)
of said contractors to perform the work based on the lowest bid, unless
otherwise directed by Tenant. The cost of any tenant improvements and all fees
and expenses relating thereto in excess of the amount of said allowance shall be
borne and paid for by Tenant. No alterations or physical additions in or to the
Premises may be made without Landlord's prior written consent. Landlord may
withhold its consent to any alteration or addition that could affect the
Building's structure or its HVAC, plumbing, electrical or mechanical systems.
Tenant may not paint or install lighting, signs, window or door lettering, or
advertising media of any type on or about the Premises without the prior written
consent of Landlord. Landlord may withhold its consent to any such painting or
installation which could affect the appearance of the exterior of the Building
or of any common areas of the Building. All alterations, additions, and
improvements installed in the Premises must be (i) performed at Tenant's expense
and only in accordance with plans and specifications which have been previously
submitted to and approved in writing by Landlord, and (ii) constructed,
maintained and used by Tenant at its own risk and expense in accordance with all
laws. Landlord's approval of the plans and specifications is not a
representation by Landlord that such alterations, additions, or improvements
comply with any law. Tenant agrees that it will remove or cause its
contractor(s) to remove all waste and debris from the Premises upon the
completion of any alterations, additions or improvements which are performed by
Tenant. Notwithstanding anything in this Section 6.1 to the contrary, Tenant
shall have the right to make alterations, additions or
8
improvements to the Premises without the consent of Landlord so long as (i) such
alterations, additions or improvements do not affect the mechanical systems or
structural components of the Building and (ii) the cost of such alterations,
additions or improvements made in any twelve (12) consecutive month period do
not exceed the sum of One Hundred Thousand Dollars ($100,000.00). Prior to
commencing any of such alterations, additions or improvements, Tenant will
notify Landlord of such work.
6.2. Repairs and Maintenance.
Subject to Landlord's duties under Section 5.1 above, Tenant agrees to
maintain the Premises in a clean, safe, and operable condition, and will not
permit or allow to remain any waste or damage to any portion of the Premises.
Tenant agrees to pay for the cost of repairing or replacing, subject to
Landlord's direction and supervision, any damage to the Premises and the
Building caused by Tenant, Tenant's employees, Tenant's transferees, or their
respective agents, contractors, or invitees. If Tenant fails to make such
repairs or replacements within fifteen (15) days after the occurrence of such
damage, then Landlord may make the same at Tenant's cost. If any such damage
occurs outside of the Premises, then Landlord may elect to repair such damage at
Tenant's expense, rather than having Tenant repair such damage. The cost of all
repair or replacement work performed by Landlord under this Section 6.2 must be
paid by Tenant to Landlord within ten (10) days after Landlord has invoiced
Tenant for such cost and will constitute Rent under this Lease.
6.3. Performance of Work.
Only Landlord or contractors and subcontractors approved in writing by
Landlord may perform the work described in this Section 6. Tenant will cause
all contractors and subcontractors to procure and maintain insurance coverage
naming Landlord as an additional insured against such risks, in such amounts,
and with such companies as Landlord may reasonably require. All such work must
be performed in accordance with all applicable governmental requirements and in
a good and workmanlike manner so as not to damage the Premises, the Building or
the components of the Building. Tenant agrees to defend, indemnify and hold
Landlord, its trustees, beneficiaries, employees, successors and assigns
harmless from and against any claims, liabilities, damages, losses, costs and
expenses, including but not limited to attorney's fees and court costs, suffered
or incurred by Landlord arising from any of Tenant's alterations, additions or
improvements to the Premises.
6.4. Mechanic's Liens.
Tenant must not permit any mechanic's lien(s) to be filed against the
Premises or the Building for any work performed, materials furnished, or
obligations incurred by or at the request of Tenant, unless caused by the
failure of the Landlord to timely pay the allowance. If such a lien is filed,
then, within ten (10) days after Landlord has delivered notice of the filing to
Tenant, Tenant must either pay the amount of the lien or diligently contest such
lien and deliver to Landlord a bond or other security reasonably satisfactory to
Landlord. If Tenant fails to timely take either such action, then Landlord may
pay the lien claim, and any amounts so paid, including expenses and interest,
will constitute Rent payable by Tenant to Landlord within ten (10) days after
Landlord has invoiced Tenant for such payment. Tenant agrees to defend,
indemnify and hold Landlord, its trustees, beneficiaries, employees, successors
and assigns harmless from and against any claims, liabilities, direct damages,
losses, costs and expenses, including but not limited to attorney's fees and
court costs, suffered or incurred by Landlord arising from the presence or
removal of any mechanic's lien(s) affecting the Premises and/or
9
the Building relating to any work performed, materials furnished or obligations
incurred by or at the request of Tenant.
6.5. Rooftop Communications Equipment.
Tenant shall have the right, at its sole cost and expense, only after
obtaining Landlord's prior written approval, which approval shall not be
unreasonably withheld or delayed, to cause certain data and communications
equipment to be professionally installed on the roof of the Building subject to
and in compliance with all applicable federal, state and local statutes, laws,
ordinances, codes, rules and regulations (collectively "Laws"), provided that
(i) Landlord may oversee such installation, (ii) the location of such equipment
must be approved in advance by Landlord, (iii) Tenant will be responsible for
obtaining all necessary licenses and permits and complying with all City of
Chicago zoning and building codes and ordinances applicable to said equipment,
and (iv) upon Landlord's request, Tenant will cause said equipment to be removed
from the roof and repair any damage thereto upon the expiration or earlier
termination of this Lease. Tenant agrees to defend, indemnify and hold Landlord,
its trustees, beneficiaries, employees, agents, successors and assigns harmless
from and against any and all claims, liabilities, direct damages, causes of
action, suits, judgments, losses, costs and expenses (including attorneys' fees
and court costs) incurred or suffered by Landlord relating to the installation
of such equipment and/or the violation of any Laws arising from the presence or
use of such equipment. This indemnity provision will survive the termination or
expiration of this Lease.
6.6. Construction of Roof Deck.
Tenant shall have the right, at its sole cost and expense, only after
obtaining Landlord's prior written approval, which approval shall not be
unreasonably withheld or delayed, to cause a deck to be constructed on a portion
of the roof of the Building subject to and in compliance with all Laws, provided
that (i) Landlord may oversee such installation, (ii) the location of the deck
and the hours and dates when the deck may be used must be approved in advance by
Landlord, (iii) Tenant will be responsible for obtaining all necessary licenses
and permits and complying with all City of Chicago zoning and building codes and
ordinances applicable to said deck, and (iv) at Landlord's request, Tenant will
remove the deck from the roof and repair any damage thereto upon the expiration
or earlier termination of this Lease. Tenant acknowledges and agrees that
Landlord makes no representation or warranty with respect to the design of the
deck, nor shall Landlord be liable or responsible for any defects in the design
or construction of the deck. Tenant agrees to defend, indemnify and hold
Landlord, its trustees, beneficiaries, employees, agents, successors and assigns
harmless from and against any and all claims, liabilities, direct damages,
causes of action, suits, judgments, losses, costs and expenses (including
attorneys' fees and court costs) incurred or suffered by Landlord relating to
the installation of such deck and/or the violation of any Laws arising from the
presence or use of such deck. This indemnity provision will survive the
termination or expiration of this Lease.
6.7. Installation of Electrical Generator(s).
Tenant may, at its sole cost and expense, only after obtaining Landlord's
prior written consent, cause an electrical generator(s) to be professionally
installed in the Building, subject to and in compliance with all Laws, provided
that (i) Landlord may oversee such installation, (ii) the location of the
generator(s) must be approved in advance by Landlord, (iii) Tenant will be
responsible for obtaining all necessary licenses and permits and complying with
all City of Chicago zoning and building codes and ordinances applicable to said
generator(s), and (iv) upon Landlord's request, Tenant will cause said
generator(s) to be removed and repair any
10
damage therefrom upon the expiration or earlier termination of this Lease.
Tenant agrees to defend, indemnify and hold Landlord, its trustees,
beneficiaries, employees, agents, successors and assigns harmless from and
against any and all claims, liabilities, direct damages, causes of action,
suits, judgments, losses, costs and expenses (including attorneys' fees and
court costs) incurred or suffered by Landlord relating to the installation of
any generator(s) and/or the violation of any Laws arising from the presence or
use of such generator(s). This indemnity provision will survive the termination
or expiration of this Lease.
7. USE.
Tenant may use the Premises only for the Permitted Use, and must comply
with all applicable statutes, laws, ordinances, codes, orders, rules and
regulations, as well as all requirements of any of Landlord's insurance
providers, relating to the use, condition and occupancy of the Premises. The
Premises may not be used for any use other than the Permitted Use which (i) is
disreputable, creates fire hazards, or results in an increased rate of insurance
on the Building or its contents; (ii) would violate any covenant, agreement,
term, provision or condition of this Lease or is in contravention of the
certificate of occupancy or zoning ordinances pertaining to the Building; (iii)
would alter, affect or interfere with or would overload the electrical,
mechanical or HVAC systems or any other component of the Building, or would
exceed the floor load per square foot which the floor was designed to carry and
which is allowed by law; or (iv) would, in Landlord's reasonable judgment, in
any way impair or tend to impair or exceed the design criteria, structural
integrity, character, reputation or appearance of the Building. Tenant will not
conduct or permit the generation, transportation, storage, installation,
treatment or disposal, either in the Building or in the Premises, of any
hazardous or toxic materials (other than those customarily used by office
tenants in the normal course of business), and Tenant will keep the Building and
the Premises free of any lien or claim imposed under any federal, state or local
environmental statute, law, ordinance, code, rule or regulation. If, because of
Tenant's acts (which are outside of the Permitted Use and have not been approved
in writing by Landlord), the rate of insurance on the Building or its contents
increases, then such acts will constitute an Event of Default, Tenant must pay
to Landlord the amount of such increase on demand, and acceptance of such
payment will not waive any of Landlord's other rights. Tenant agrees to conduct
its business and control its agents, employees, and invitees in such a manner as
not to create any nuisance or unreasonably interfere with other tenants or
Landlord in its management of the Building.
8. ASSIGNMENT AND SUBLETTING.
8.1. Transfers; Consent.
(a) Transfers. Tenant may not, without the prior written consent of
Landlord, which consent, subject to the provisions of Section 8.1(b) below,
shall not be unreasonably withheld or delayed, do any of the following:
(i) assign, transfer, or encumber this Lease or any estate
or interest in this Lease, whether directly or by operation of law;
(ii) permit any other entity to become Tenant under this Lease by
merger, consolidation, or other reorganization; provided, however,
Tenant does not need to obtain Landlord's consent if, after giving
effect to such merger, consolidation or other reorganization, the
minimum tangible net worth of such new entity is the same as that of
Tenant at the beginning of this Lease;
11
(iii) sublet any portion of the Premises;
(iv) grant any license, concession, or other right of occupancy
of any portion of the Premises; or
(v) permit the use of the Premises by any parties other
than Tenant.
Any of the events listed in Section 8.1(a)(i) through 8.1(a)(vi)
above are referred to as a "Transfer".
(b) Consent. Without limiting Landlord's right to reasonably
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withhold its consent, Tenant acknowledges and agrees that Landlord's
withholding of such consent will be deemed reasonable if:
(i) In the reasonable judgment of Landlord, the proposed
subtenant or assignee or the individual or principal owners or
operators of the proposed subtenant or assignee (A) is not of
reputable character or is engaged in a business or proposes to use the
Premises in a manner which is not in keeping with the Permitted Use or
the standards of Landlord for the Building, or (B) has an unfavorable
credit standing or poor business history;
(ii) Either the area of the Premises to be sublet or the
remaining area of the Premises is not regular in shape with
appropriate means of ingress and egress suitable for normal renting
purposes;
(iii) Tenant is in default under this Lease;
(iv) The proposed sublessee or assignee is a local, state or
federal governmental agency; or
(v) The proposed sublessee or assignee is already a tenant in
the Building and is leasing space on any floor which is neither
vertically nor horizontally adjacent to any portion of the Premises.
(c) Procedure to Obtain Consent. If Tenant requests Landlord's
---------------------------
consent to a Transfer, then Tenant must provide Landlord with a written
description of all terms and conditions of the proposed Transfer, copies of
the proposed documentation, and the following information about the
proposed transferee: name and address; reasonably satisfactory information
about its business and business history; its proposed use of the Premises;
banking, financial, and other credit information that Landlord may request;
and general references sufficient to enable Landlord to determine the
proposed transferee's creditworthiness and character. Landlord will attempt
to provide Tenant with a written response to such Transfer request as soon
as possible but not later than fifteen (15) days after Landlord's receipt
of Tenant's written request. Concurrently with Tenant's request for consent
to a Transfer, Tenant agrees to (i) pay to Landlord an assignment fee in
the amount of Five Hundred and 00/100 Dollars ($500.00), and (ii) reimburse
Landlord immediately upon its request for all of its reasonable out-of-
pocket expenses (including but not limited to attorneys' fees and
administrative fees) incurred in connection with considering any request
for consent to a Transfer. Nothing in this Section 8.1(c) may be construed
as granting to any third party the rights of a third-party beneficiary, so
as to entitle such third party to seek to enforce any of the above
provisions.
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(d) Obligations After Transfer. If Landlord consents to a proposed
--------------------------
transfer, then both Tenant and the proposed transferee must (i) deliver to
Landlord a written agreement acceptable in all respects to Landlord under
which the proposed transferee expressly assumes all of Tenant's obligations
under this Lease, and (ii) if requested by Landlord, execute the consent
form required by Landlord. Landlord's consent to a Transfer will not
release Tenant from its obligations under this Lease, but rather Tenant and
its transferee will be jointly and severally liable for such obligations.
Landlord's consent to any Transfer does not waive Landlord's rights as to
any subsequent Transfers. If an Event of Default occurs while the Premises
or any part of the Premises are subject to a Transfer, then Landlord, in
addition to its other remedies, may collect rent due and owing directly
from such transferee and apply such rent against Rent. Tenant authorizes
its transferees to make payments of rent directly to Landlord upon receipt
of notice from Landlord to do so.
8.2. Recapture.
In the event Tenant causes or seeks to cause a Transfer of either (a) the
entire Premises, or (b) any portion of the Premises for the remainder of the
Term of this Lease, Landlord may elect to terminate this Lease and recapture the
applicable space (i) as of the date the proposed Transfer is to be effective, or
(ii) within thirty (30) days after the date of Landlord's discovery of the
Transfer, as the case may be. Landlord may exercise this termination right
within thirty (30) days after Landlord's receipt of Tenant's written request for
Landlord's consent, or within thirty (30) days after learning of such Transfer
if Landlord's consent has not been requested by Tenant. Notwithstanding anything
above to the contrary, in the event Landlord exercises its right to terminate
this lease and recapture the applicable space under clause (i) of the first
sentence of this Section 8.2, then within five (5) days of receipt of Landlord's
notice Tenant may rescind its proposal for the Transfer and the Lease shall
continue as if such proposal for the Transfer had never occurred If Landlord
terminates this Lease as provided above, then this Lease will cease as to the
portion of the Premises recaptured by Landlord and Tenant shall pay to Landlord
all Rent accrued through the date the Lease ceases. Subsequently, Landlord may
lease the Premises to the prospective transferee (or to any other person)
without liability to Tenant.
8.3. Additional Compensation.
Tenant agrees to pay to Landlord, immediately upon receipt, fifty (50%) of
all funds received by Tenant (net of Tenant's reasonable expenses to relet) for
a Transfer in excess of the Rent allocable to the Premises.
8.4 Injunctive Relief.
Notwithstanding anything in this Lease to the contrary, in the event
Landlord wrongfully prevents a Transfer by Tenant, or if Landlord commits any
other default under this Section 8, Tenant's sole remedy will be limited to an
action for injunctive relief to permit the Transfer to occur.
9. INSURANCE; WAIVERS; SUBROGATION; INDEMNITY.
9.1. Insurance.
Tenant agrees to maintain throughout the Term the following insurance
policies:
(a) comprehensive general liability insurance in amounts of not less
than a combined single limit of $2,000,000 or such other amounts as
Landlord may, from time
13
to time, reasonably require, insuring Tenant, Landlord, Landlord's agents
and their respective affiliates against all liability for injury to or
death of a person or persons or damage to property arising from the use and
occupancy of the Premises;
(b) insurance covering the full value of Tenant's property and
improvements, and other property (including property of others) in the
Premises;
(c) contractual liability insurance sufficient to cover Tenant's
indemnity obligations under this Lease;
(d) worker's compensation insurance, containing a waiver of
subrogation endorsement acceptable to Landlord; and
(e) business interruption insurance.
Tenant will, prior to taking possession of the Premises and prior to the
commencement of any work in the Premises, furnish Landlord with certificates of
such insurance and such other evidence satisfactory to Landlord confirming
Tenant's maintenance of all insurance coverages required under this Lease and
naming Landlord and any other parties requested by Landlord as additional
insured(s). Each certificate must contain a written obligation on the part of
each insurance company to notify Landlord at least thirty (30) days before
cancellation or a material change of any such insurance policies. All such
insurance policies must be (i) issued by insurers authorized to do business in
the State of Illinois and which are rated at least A+XII in Best's Key Rating
Guide, and (ii) issued by companies and be in form and substance reasonably
satisfactory to Landlord. The term "affiliate" means any person or entity,
directly or indirectly, controlling, controlled by, or under common control with
the party in question. Tenant acknowledges and agrees that it is not permitted
to self-insure under this Lease.
9.2. Waiver of Negligence; No Subrogation.
Landlord and Tenant each waives any claim it might have against the other
for damage to or theft, destruction, loss, or loss of use of any property (a
"Loss"), to the extent the same is insured against under any insurance policy
that covers the Building, the Premises, Landlord's or Tenant's fixtures,
personal property, leasehold improvements, or business, or with respect to such
matters as are required to be insured against under the terms of this Section 9,
regardless of whether the negligence of the other party caused such loss. Each
party's waiver under this Section 9.2 will not, however, include any deductible
amounts on insurance policies carried by either party or to any coinsurance
penalty which either party may sustain. Each party will cause its insurance
carrier to endorse all applicable policies waiving the carrier's rights of
recovery under subrogation or otherwise against the other party.
9.3. Indemnity by Tenant.
Subject to the provisions of Section 9.2 above, and except to the extent
any Loss is caused solely by the negligence or willful misconduct of Landlord or
its agents, Tenant agrees to defend, indemnify and hold Landlord, its trustees,
beneficiaries, employees and agents harmless from and against (i) all claims,
demands, liabilities, causes of action, suits, judgments, and expenses
(including attorneys' fees) for any Loss arising from any occurrence on the
Premises and the Building caused or contributed to by Tenant, its subtenants,
licensees, employees, invitees, contractors and/or agents (collectively
"Tenant's Affiliates"), and (ii) Tenant's or any of Tenant's Affiliates' failure
to perform its obligations under this Lease. This indemnity provision will
survive the termination or expiration of this Lease.
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9.4. Indemnity by Landlord.
Landlord agrees to defend, indemnify and hold Tenant harmless from and
against any loss or damage (including reasonable attorneys' fees) suffered by
Tenant resulting from Landlord's negligence to the extent such loss or damage is
not covered by Tenant's insurance.
10. SUBORDINATION; ATTORNMENT; NOTICE TO LANDLORD'S MORTGAGEE.
10.1. Subordination.
Provided Landlord furnishes Tenant with a subordination, nondisturbance and
attornment agreement (the "SNDA") in form and substance customarily given by the
current "Landlord's Mortgagee" (as defined below), this Lease is automatically
subordinate to any deed of trust, mortgage, other security instrument, ground
lease, master lease or primary lease that now or subsequently covers all or any
part of the Building without any further action or writing of the parties (the
mortgagee under any such mortgage or the lessor under any such lease is referred
to below as a "Landlord's Mortgagee"). However, any Landlord's Mortgagee may at
any time unilaterally elect to make this Lease superior to its mortgage, ground
lease or other interest in the Premises by so notifying Tenant in writing. Not
later than sixty (60) days after the execution of this Lease, Landlord shall
deliver to Tenant an SNDA from the current Landlord's Mortgagee in the form
attached hereto as Exhibit I.
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10.2. Attornment.
Tenant agrees to attorn to any party succeeding to Landlord's interest in
the Premises, whether by purchase, foreclosure, deed in lieu of foreclosure,
power of sale, attornment, termination of lease, or otherwise. Within ten (10)
days after such party's written request, Tenant will execute and deliver to the
requesting party a written agreement(s) confirming such attornment. If Tenant
fails to deliver the attornment agreement(s) described herein within the ten
(10) day period, Tenant acknowledges and agrees that Landlord is authorized to
act as Tenant's attorney-in-fact to execute the agreement(s) on behalf of
Tenant, and Tenant will be bound by the commercially reasonable terms of the
agreement(s) executed by Landlord.
10.3. Notice to Landlord's Mortgagee.
Tenant may not seek to enforce any remedy it may have for any default on
the part of the Landlord without first giving written notice by certified mail,
return receipt requested, specifying the default in reasonable detail, to any
Landlord's Mortgagee whose address has been given to Tenant, and affording such
Landlord's Mortgagee a reasonable opportunity to perform Landlord's obligations
under this Lease.
11. RULES AND REGULATIONS.
Tenant must comply with the rules and regulations of the Building which are
attached as Exhibit B. Landlord may, from time to time by notifying Tenant in
---------
writing of such changes, change such rules and regulations for the safety, care,
or cleanliness of the Building and related facilities, provided that such
changes will not unreasonably interfere with Tenant's use of the Premises.
Tenant is responsible for the compliance with such rules and regulations by its
employees, agents, and invitees.
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12. CONDEMNATION.
12.1. Total Taking.
If the entire Building or Premises is taken by right of eminent domain or
conveyed in lieu of eminent domain (a "Taking"), this Lease will terminate and
Rent will be apportioned as of the date of the Taking, and Tenant will have no
claim against Landlord for the value of the unexpired Term.
12.2. Partial Taking -- Tenant's Rights.
If any part of the Building becomes subject to a Taking and such Taking
will prevent Tenant from conducting its business in the Premises in a manner
reasonably comparable to that conducted immediately before such Taking for a
period of more than one hundred eighty (180) days, then Tenant may terminate
this Lease as of the date of such Taking by giving written notice to Landlord
within thirty (30) days after the Taking, and Rent will be apportioned as of the
date of such Taking. If Tenant does not terminate this Lease, then Rent will
xxxxx on a basis reasonably determined by Landlord as to that portion of the
Premises rendered untenantable by the Taking.
12.3. Partial Taking -- Landlord's Rights.
If any material portion but less than all of the Building becomes subject
to a Taking and Landlord makes a good faith determination that (i) such Taking
will prevent Tenant from conducting its business in the Premises in a manner
reasonably comparable to that conducted immediately before such Taking for a
period of more than one hundred eighty (180) days, (ii) restoring the Premises
would be uneconomical, (iii) the condemnation award is insufficient to rebuild
or restore the Building or the Premises, or (iv) Landlord is required to pay any
condemnation award arising from the Taking to any Landlord's Mortgagee, then
Landlord may terminate this Lease by delivering written notice to Tenant within
forty-five (45) days after such Taking (or on such earlier date as Landlord is
required to surrender the Building or the Premises pursuant to the terms of the
Taking). Tenant shall vacate the Premises on or before the earlier of (a) one
hundred twenty (120) days after its receipt of Landlord's notice, or (b) the
date when Landlord is required to surrender the Building or the Premises to the
condemning authority, and Rent will be apportioned as of the date Tenant vacates
the Building. If Landlord does not so terminate this Lease, then this Lease
will continue, but if any portion of the Premises has been taken, Rent will
xxxxx as provided in the last sentence of Section 12.2 above.
12.4. Award.
If any Taking occurs, then Landlord is entitled to receive the entire award
or other compensation for the land on which the Building is situated, the
Building, and other improvements taken, and Tenant may separately pursue a claim
against the condemnor for the value of Tenant's personal property which Tenant
is entitled to remove under this Lease (but because of the condemnation is
unable to move such property), moving costs, unamortized portion of any tenant
improvements paid for by Tenant, and other claims it may have so long as such
claim does not diminish Landlord's award. In no event may Tenant seek or file
any claim against Landlord.
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13. FIRE OR OTHER CASUALTY.
13.1. Landlord's Rights.
If all or any material portion of the Building and/or the Premises is(are)
damaged by fire or other casualty (a "Casualty"), and if Landlord makes a good
faith determination that (i) restoring the Premises would be uneconomical, (ii)
there are insufficient insurance proceeds to rebuild or restore the Building or
the Premises, or (iii) Landlord is required to pay any insurance proceeds
arising out of the Casualty to any Landlord's Mortgagee, then Landlord may
terminate this Lease by giving Tenant written notice of Landlord's election to
terminate (the "Casualty Termination Notice") within one hundred twenty (120)
days after the Casualty (the "Casualty Determination Period") has occurred, and
Base Rent and Additional Rent will xxxxx as of the date of the Casualty, unless
such damage is due to the gross negligence or willful misconduct of Tenant or
Tenant's Affiliates, in which event Tenant shall continue to pay Rent without
abatement. Such termination shall be effective ninety (90) days after the date
of the Casualty Termination Notice so long as the Building is tenantable.
13.2. Repair Obligation.
If Landlord elects not to terminate this Lease following a Casualty
pursuant to the terms of Section 13.1 above, Landlord shall, prior to the
expiration of the Casualty Termination Period, notify Tenant of Landlord's good
faith determination (the "Restoration Estimate Notice") of the time period
required to restore the Building and/or Premises. In the event such time period
exceeds one (1) year from the date of the Casualty, Tenant shall have the right
to terminate this Lease within thirty (30) days after receipt of the Restoration
Estimate Notice. If neither Landlord nor Tenant elects to terminate this Lease,
as set forth above, then Landlord will proceed with reasonable diligence to
repair, restore or rehabilitate the Building and/or the Premises, as the case
may be, to substantially the same condition as they existed immediately before
such Casualty. However, Landlord will not be required to repair or replace any
of the furniture, equipment, fixtures, and other leasehold improvements which
may have been placed by or at the request of Tenant or other occupants in the
Building or the Premises and required to be insured by Tenant or other tenants.
In the event that Landlord elects not to terminate the Lease and Landlord
proceeds to repair the Building and/or the Premises, then Tenant must apply to
the replacement or restoration of the furniture, equipment, fixtures and other
improvements in the Premises (if replacement or restoration is necessary because
of the Casualty) any proceeds of insurance that it may have received from its
policy(ies) on account of the Casualty allocable to such fixtures and other
improvements. During such repair or rebuilding of the Building and/or the
Premises, Rent for the portion of the Premises rendered untenantable by the
damage will be abated on a reasonable basis determined by Landlord from the date
of damage until the completion of the repair, restoration or rehabilitation,
unless the Casualty was caused by Tenant or any of Tenant's Affiliates, in which
event Tenant shall continue to pay Rent without abatement.
In the event Landlord fails to substantially complete the restoration of
the Building and/or the Premises within one (1) year from the date of the
Casualty, Tenant shall have the right to terminate this Lease at any time after
the expiration of such one (1) year period.
14. PERSONAL PROPERTY TAXES.
Tenant is liable for all taxes based upon this Lease or the receipt of Rent
due under this Lease and all taxes levied or assessed against any personal
property, furniture or fixtures
17
placed by Tenant in the Premises. If any taxes for which Tenant is liable are
levied or assessed against Landlord or Landlord's property and Landlord elects
to pay the same, or if the assessed value of Landlord's property is increased by
inclusion of such personal property, furniture or fixtures and Landlord elects
to pay the taxes based on such increase, then Tenant shall pay to Landlord as
Rent, upon demand, the part of such taxes for which Tenant is primarily liable
under this Lease. Landlord may not, however, pay such amount if Tenant notifies
Landlord that it will contest the validity or amount of such taxes before
Landlord makes such payment, and subsequently diligently proceeds with such
contest in accordance with law and if the non-payment does not pose a threat of
lien or other cloud on Landlord's title to the Building, or threat of loss or
seizure of the Building or interest of Landlord in the Building.
15. DEFAULT.
15.1. Events of Default.
Each of the following occurrences will constitute an "Event of Default":
(a) Tenant's failure to pay Rent on or before the date when due;
provided, however, not more than two (2) times in any calendar year during
the Term, Landlord agrees to give Tenant notice and Tenant shall have five
(5) days after its receipt of such notice to cure such failure to pay rent,
which, if cured in a timely manner, will not constitute an Event of
Default.
(b) Tenant's failure to perform, comply with, or observe any other
agreement or obligation of Tenant under this Lease and the continuance of
such failure for a period of more than thirty (30) days after Landlord has
delivered to Tenant written notice, provided that if such default is
incapable of being cured within said thirty (30) day period, then Tenant
shall have up to an additional sixty (60) days after the initial thirty
(30) day period to cure the default so long as Tenant is at all times
diligently proceeding to cure the default;
(c) The filing of a petition by or against Tenant (the term "Tenant"
includes, for the purpose of this Section 15(c), any guarantor of the
Tenant's obligations under this Lease) (1) in any bankruptcy or other
insolvency proceeding; (2) seeking any relief under any state or federal
debtor relief law; (3) for the appointment of a liquidator or receiver for
all or substantially all of Tenant's property or for Tenant's interest in
this Lease; or (4) for the reorganization or modification of Tenant's
capital structure in any bankruptcy proceeding or under any State or
Federal debtor relief law. If, however, such a petition is filed against
Tenant, then such filing will not be an Event of Default unless Tenant
fails to have the proceedings initiated by such petition dismissed within
sixty (60) days after such filing;
(d) The failure by Tenant to take possession of the Premises in
accordance with the terms of this Lease;
(e) The discontinuance of its business by Tenant for thirty (30) or
more consecutive days unless the Premises are untenantable;
(f) The failure of any guarantor(s) of this Lease to comply with the
terms and conditions of its(their) guaranty.
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15.2. Default Interest.
All past due Rent and any other payments required of Tenant under this
Lease will be deemed Rent and interest will accrue from the date due until paid
at the rate of interest equal to two percent (2%) over the corporate base rate
or so-called "prime rate" as announced from time to time by Bank One
Corporation.
16. REMEDIES.
Upon any Event of Default, Landlord may, at its election, in addition to
all other rights and remedies afforded Landlord under this Lease or by law or
equity, take any one or more of the following actions:
16.1. Right To Terminate.
Upon the occurrence of an Event of Default, Landlord has the right to
terminate the Lease and obtain possession of the Premises. Landlord may make its
election to terminate known to Tenant by delivery of a notice of termination.
Such termination is immediately effective and Landlord, if necessary, is
entitled to commence immediately an action in summary proceedings to recover
possession of the Premises.
16.2. Receipt Of Money After Termination.
No receipt of money by the Landlord from the Tenant after the termination
of this Lease acts to reinstate, continue or extend the Term, nor affect or
waive any notice given by the Landlord to the Tenant prior to such receipt of
money.
16.3. Recovery Of Damages.
Landlord agrees to use commercially reasonable efforts to mitigate damages
caused by a default or breach of Tenant. If Landlord at any time terminates
this Lease upon the occurrence of an Event of Default, then in addition to any
other remedies it may have, Landlord may recover from Tenant by reason of such
breach all Rent and Additional Rent accrued and unpaid for the period up to and
including such termination date, as well as all other additional sums payable by
Tenant under this Lease. In addition, upon the occurrence of an Event of
Default, Landlord may recover as damages for loss of the bargain and not as a
penalty the sum of (i) the unamortized cost to Landlord, computed and determined
in accordance with generally accepted accounting principles, of any tenant
improvements provided by Landlord at its expense, (ii) the aggregate sum which
at the time of such termination represents the excess, if any, of the present
value of the aggregate Rent and Additional Rent at the same annual rate for the
remainder of the Term as then in effect over the then present value of the then
aggregate fair rental value of the Premises for the balance of the Term
immediately prior to such termination, such present worth to be computed in each
case on the basis of a five percent (5%) per annum discount from the respective
dates upon which Rent would have been payable under this Lease had the Term not
been terminated, and (iii) any additional damages, including any costs or
expenditures to fit the Premises to the needs of Tenant, reasonable attorneys'
fees and court costs which Landlord sustains by reason of the breach of any of
the covenants of this Lease other than for the payment of Base Rent and
Additional Rent.
16.4. Right To Re-Enter.
If the Event of Default is the nonpayment of Rent, Landlord may, as an
alternative to terminating the Lease, serve a written demand for possession or
payment. Unless the Rent is paid in accordance with the demand for possession or
payment, Landlord is entitled to
19
possession of the premises and Tenant will then have no further right to
possession under the Lease. Tenant remains liable to Landlord for the payment of
all Rent and other charges which Tenant has agreed to pay under this Lease
throughout the remainder of its Term. If Landlord elects to re-enter, as
provided, it may from time to time, without terminating this Lease, make such
alterations and repairs as may be necessary in order to relet the Premises, and
relet all or any part of such Premises for such term or terms (which may be for
a term extending beyond the Term of this Lease) and at such rental or rentals
and upon such other terms and conditions as Landlord in its reasonable
discretion may deem advisable. Upon each such reletting all rentals and other
sums received by Landlord from such reletting are applied, first, to the payment
of any indebtedness other than rent due under this Lease from Tenant to
Landlord; second, to the payment of any costs and expenses of such reletting,
including reasonable brokerage fees and attorneys' fees and of costs of such
alterations and repairs; third, to the payment of Rent and other charges due
from Tenant, and the residue, if any, will be held by Landlord and applied in
payment of future rent as the same may become due and payable. If such rentals
and other sums received from such reletting during any month are insufficient to
pay the Rent and other charges due from Tenant, Tenant agrees to pay such
deficiency to Landlord. Such deficiency will be calculated and paid monthly. No
such re-entry or taking possession of such premises by Landlord may be construed
as an election on its part to terminate this Lease. Notwithstanding any such
reletting without termination, Landlord may at any time elect to terminate this
Lease for such previous breach.
16.5. Independent Covenant.
Tenant acknowledges and agrees that its obligation to pay Rent under this
Lease is an independent covenant and that such obligation to pay rent is not
subject to setoff or recoupment in connection with any action for summary
proceedings to recover possession of the Premises.
16.6. Legal Expenses.
If Landlord or Tenant brings an action arising out of the covenants, terms,
conditions or provisions of this Lease, or if Landlord undertakes an action for
summary proceedings to recover possession of the Premises, the prevailing party
will be reimbursed by the other party for such reasonable costs and attorneys'
fees as the prevailing party may incur in connection with such action.
17. PAYMENT BY TENANT; NON-WAIVER.
17.1. Payment by Tenant.
Upon any Event of Default, Tenant agrees to pay to Landlord all costs
incurred by Landlord (including court costs and reasonable attorneys' fees and
expenses) in (1) obtaining possession of the Premises, (2) removing and storing
Tenant's or any other occupant's property, (3) repairing, restoring,
commercially reasonably altering, commercially reasonably remodeling or
otherwise putting the Premises into a condition acceptable to a new tenant, (4)
if Tenant is dispossessed of the Premises and this Lease is not terminated,
reletting all or any part of the Premises (including brokerage commissions,
commercially reasonable costs of tenant finish work and other costs incidental
to such reletting), (5) performing Tenant's obligations which Tenant failed to
perform, and (6) enforcing its rights, remedies, and recourses arising out of
the Event of Default or in obtaining advice about same. To the full extent
permitted by law, Landlord and Tenant agree the federal and state courts of the
state in which
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the Premises and Building are located have exclusive jurisdiction over any
matter relating to or arising from this Lease and the parties' rights and
obligations under this Lease.
17.2. No Waiver.
Landlord's acceptance of any payment from Tenant following an Event of
Default will be deemed Rent and will not waive Landlord's rights regarding such
Event of Default. No waiver by Landlord of any violation or breach of any of
the terms contained in this Lease will waive Landlord's rights regarding any
future violation of such term. Landlord's acceptance of any partial payment of
Rent will not waive Landlord's rights with regard to the remaining portion of
the Rent that is due, regardless of any endorsement or other statement on any
instrument delivered in payment of Rent or any writing delivered in connection
with such Rent. Accordingly, Landlord's acceptance of a partial payment of Rent
will not constitute an accord and satisfaction of the full amount of the Rent
that is due.
18. SURRENDER OF PREMISES.
No act by Landlord will be deemed an acceptance of a surrender of the
Premises, and no agreement to accept a surrender of the Premises will be valid
unless it is in writing and signed by Landlord. At the expiration or
termination of this Lease, Tenant must deliver to Landlord the Premises with all
improvements in good repair and condition, broom-clean, except for reasonable
wear and tear (and condemnation and Casualty damage not caused by Tenant, as to
which Sections 12 and 13 above control). All alterations, additions,
improvements, equipment, wiring and furniture made in or upon the Premises (but
excluding all of the Work contemplated under the Workletter and excluding any
other alterations, additions, etc. for which Landlord's consent is required
under this Lease and which Landlord does not specifically require removal at the
time of such consent) must, at Landlord's option upon notice to Tenant, either
be removed by Tenant (and Tenant must repair all damage caused by such removal)
or remain on the Premises without compensation to Tenant. Tenant must also
deliver to Landlord all keys to the Premises. Provided that Tenant has
performed all of its obligations under this Lease, Tenant may remove all
unattached trade fixtures and personal property placed in the Premises by
Tenant. Tenant is obligated to repair all damage caused by such removal. All
items not so removed will be deemed to have been abandoned by Tenant and may be
appropriated, sold, stored, destroyed, or otherwise disposed of by Landlord
without notice to Tenant and without any obligation to account for such items.
The provisions of this Section 18 will survive the end of the Term.
19. HOLDING OVER.
If Tenant fails to vacate the Premises at the end of the Term, then Tenant
will be a tenant-at-will and, in addition to all other damages and remedies to
which Landlord may be entitled for such holding over, Tenant must pay to
Landlord a monthly Base Rent for all or any part of a month equal to 150% of the
aggregate Base Rent plus all other Rent payable during the last month of the
Term. Tenant is also responsible for all direct damages, and if Tenant holds
over for more than thirty (30) days, Tenant is responsible for consequential
damages incurred or sustained by Landlord by reason of such retention, together
with all costs incurred by Landlord (including but not limited to reasonable
attorneys' fees) in connection with such holdover. In addition, Landlord may
elect, upon notice to Tenant, that such holding over will constitute a renewal
of this Lease on a month-to-month term at the stated holdover rate, but
acceptance by Landlord of Rent after such termination will not in and of itself
constitute a
21
renewal. Nothing contained in this Section 19, however, will be construed or
operate as a waiver of Landlord's right of re-entry or any other right of
Landlord.
20. CERTAIN RIGHTS RESERVED BY LANDLORD.
Landlord reserves the following rights which may be exercised without
notice (except as otherwise expressly provided below) and without liability to
Tenant for damage or injury to property, person or business, and without
effecting an eviction or disturbance of Tenant's use or possession of the
Premises, nor giving rise to any claim for setoff or abatement or Rent or
affecting any of Tenant's obligations under this Lease:
(a) To decorate (other than elevator lobbies on the full floors
occupied by Tenant which shall be solely determined by and shall be the
responsibility of Tenant) and to make inspections, repairs, alterations,
additions, changes, or improvements, whether structural or otherwise, in
and about the Building during ordinary business hours, and if Tenant
desires to have such work done during other than business hours, Tenant
agrees to pay all overtime and additional expenses resulting from such
work; to enter upon the Premises and, during the continuance of any such
work, to temporarily close doors, entryways, public space, and corridors in
the Building; and to interrupt or temporarily suspend Building services and
facilities agreed to be furnished by Landlord, all without the same
constituting an eviction of Tenant in whole or in part and without
abatement of Rent by reason of loss or interruption of the business of
Tenant or otherwise and without in any manner rendering Landlord liable for
damages or relieving Tenant from the performance of Tenant's obligations
under this Lease; provided, however, that reasonable access to the Premises
will be maintained and the business of Tenant may not be interfered with
unreasonably;
(b) To change the name and street address of the Building (but not the
suite number(s) of the Premises); and to change the arrangement and
location of entrances or passageways, doors, and doorways, corridors,
elevators, stairs, restrooms, or other public parts of the Building, in
which event Landlord will reimburse Tenant for the cost of replacing its
stationary in an amount not to exceed Five Thousand and 00/100 Dollars
($5,000.00);
(c) To take such reasonable measures as Landlord deems advisable for
the security of the Building and its occupants; evacuating the Building for
cause, suspected cause, or for drill purposes; temporarily denying access
to the Building for safety or other commercially reasonable measures; and
closing the Building after normal business hours and on Sundays and
holidays, subject, however, to Tenant's right to enter when the Building is
closed after normal business hours under such reasonable regulations as
Landlord may prescribe from time to time for application to and for the
benefit and protection of all tenants of the Building;
(d) Upon reasonable prior oral notice to Tenant, to enter the Premises
during reasonable business hours (i) at any time during the Term to show
the Premises to prospective purchasers or lenders, or (ii) during the last
twelve (12) months of the Term to show the Premises to prospective tenants,
and to decorate, remodel, repair, alter or otherwise prepare the Premises
for reoccupancy at any time after Tenant vacates or abandons the Premises;
(e) INTENTIONALLY DELETED;
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(f) To maintain within the lobby of the Building a directory
containing a standard listing with Tenant's name;
(g) To install and maintain signs on the exterior and interior of the
Building and to approve any signs which Tenant desires to install on the
exterior of the Building, provided that Landlord agrees to install a sign
on the northeast corner of the exterior of the Building bearing Tenant's
name in the manner depicted on Exhibit J attached hereto;
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(h) To prescribe and approve in advance the location and style of any
suite number and identification sign or lettering on the door to the
Premises occupied by Tenant, the cost of which signage shall be borne by
Tenant;
(i) To retain at all times and to use in appropriate instances pass
keys to the Premises;
(j) 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 in Section 7 above;
(k) To have access for Landlord and other tenants of the Building to
all mail chutes according to the rules of the United States Post Office;
(l) To enter the Premises at any time for reasonable purposes,
including and supplying janitor service or other service to be provided to
Tenant under this Lease;
(m) To require all persons entering or leaving the Building during
such hours as Landlord may from time to time determine to identify
themselves to watchmen or security personnel by registration or otherwise,
and to establish their right to enter or leave the Building; provided
Landlord will not be liable in damages for any error with respect to
admission to or eviction or exclusion of any person from the Building. In
case of fire, invasion, insurrection, mob, riot, civil disorder, public
excitement or other commotion, or threat thereof, Landlord reserves the
right to limit or prevent access to the Building during the continuance of
same, shut down elevator service, activate elevator emergency controls, or
otherwise take such action or preventive measures deemed necessary by
Landlord for the safety of the tenants or other occupants of the Building
or the protection of the Building and the property in the Building. Tenant
agrees to cooperate in any reasonable safety program developed by Landlord;
and
(n) From time to time to make and adopt such reasonable rules and
regulations, in addition to or other than or by way of amendment or
modification of the rules and regulations contained in Exhibit B attached
---------
to this Lease or other sections of this Lease, for the protection and
welfare of the Building, its tenants and occupants, as Landlord may
determine, and Tenant agrees to abide by all such rules and regulations
upon receiving a written copy of the same.
21. MISCELLANEOUS.
21.1. Landlord Transfer.
Landlord may transfer any portion of the Building and any of its rights
under this Lease. If Landlord assigns its rights under this Lease, then Landlord
will be released from any further obligations under this Lease, provided that
the assignee assumes Landlord's obligations under this Lease in writing.
23
21.2. Landlord's Liability.
The liability of Landlord and Landlord's Affiliates (as defined below) to
Tenant for any default by Landlord under the terms of this Lease will be
recoverable only from the interest of Landlord in the Building, and any
insurance covering the Building or Landlord to which Landlord is entitled and
Tenant agrees to look solely to Landlord's interest in the Building and any
insurance covering the Building or Landlord to which Landlord is entitled, for
the enforcement of any judgment, award, order or other remedy under or in
connection with this Lease. Under no circumstances will Landlord or Landlord's
Affiliates have any personal liability for any of the foregoing matters. The
term "Landlord's Affiliates" means collectively Landlord's property manager and
its and Landlord's respective current and future affiliates, trustees,
beneficiaries, principals, investors, directors, officers, general or limited
partners, shareholders, managers, employees, agents, representatives, successors
and assigns.
21.3. Force Majeure.
Other than for Tenant's obligations under this Lease that can be performed
by the payment of money (e.g., payment of Rent and maintenance of insurance),
whenever a period of time is prescribed for action to be taken by either party,
such party will not be liable or responsible for, and there will be excluded
from the computation of any such period of time, any delays due to strikes,
riots, acts of God, shortages of labor or materials, war, governmental laws,
regulations, or restrictions, or any other causes of any kind whatsoever which
are beyond the reasonable control of such party.
21.4. Brokerage.
Tenant has not dealt with any broker or agent in connection with the
negotiation or execution of this Lease, other than Landlord's Broker and
Tenant's Broker, whose commissions are payable by Landlord. Tenant agrees to
defend, indemnify and hold Landlord harmless from and against all claims,
damages, costs, expenses, attorneys' fees and other liabilities for commissions
or other compensation claimed by any other broker or agent.
21.5. Estoppel Certificates.
From time to time, Tenant agrees to furnish to Landlord, Landlord's
Mortgagee or any third party designated by Landlord, within ten (10) days after
Landlord has made a request, a written estoppel certificate signed by Tenant or
an authorized signatory of Tenant in the form attached as Exhibit D, confirming
---------
and certifying to such party, as of the date of such estoppel certificate, to
the extent factual or known, (i) that Tenant is in possession of the Premises,
(ii) that this Lease is unmodified and in full force and effect (or if there
have been modifications, that this Lease is in full force and effect as modified
and setting forth such modification); (iii) that Tenant has no offsets, claims
or defenses against Rent or the enforcement of any right or remedy of Landlord,
or any duty or obligation of Tenant under this Lease (and, if so, specifying the
same in detail); (iv) the dates through which Base Rent and Additional Rent have
been paid; (v) that Tenant has no knowledge of any then uncured defaults on the
part of Landlord under this Lease (or if Tenant has knowledge of any such
uncured defaults, specifying the same in detail); (vi) that Tenant having made
due investigation has no knowledge of any event having occurred that authorizes
the termination of this Lease by Tenant (or if Tenant has such knowledge,
specifying the same in detail): (vii) the amount of any Security Deposit held by
Landlord; (viii) that there are no actions, whether voluntary or otherwise,
pending against Tenant; and (ix) other matters reasonably requested by Landlord
or such other party. If Tenant fails to deliver the estoppel certificate
described above within such ten (10) day period, Tenant
24
acknowledges and agrees that Landlord is authorized to act as Tenant's attorney-
in-fact to execute the estoppel certificate on behalf of Tenant, and Tenant will
be bound by the terms of the estoppel certificate prepared and executed by
Landlord, provided the terms of such certificate are factually true and correct.
21.6. Notices.
All notices and other communications given pursuant to this Lease must be
in writing and must be sent to the parties listed in the Lease Information
Summary above by (1) first class mail, United States Mail, postage prepaid,
certified, with return receipt requested, and addressed to the parties at the
address specified next to their signature block, (2) a nationally recognized
overnight courier, (3) personal delivery to the intended address, or (4) prepaid
telegram, cable, facsimile transmission or telex with confirmation of successful
transmission followed by a confirmatory letter. All notices will be effective
upon delivery to the address of the addressee, or, if the addressee refuses
delivery, then delivery will be deemed effective as of the date of the attempted
delivery. The parties may change their addresses by giving notice of such
change to the other party in conformity with this provision.
21.7. Severability.
If any clause or provision of this Lease is illegal, invalid, or
unenforceable under present or future laws, then the remainder of this Lease
will not be affected, and in lieu of such clause or provision, a clause or
provision as similar in terms to such illegal, invalid, or unenforceable clause
or provision will be deemed added to this Lease as may be possible and be legal,
valid, and enforceable.
21.8. Amendments; and Binding Effect.
This Lease may not be amended except by instrument in writing signed by
Landlord and Tenant. No provision of this Lease will be deemed to have been
modified or waived by Landlord unless such modification or waiver is in writing
signed by the party against whom such modification is to be enforced. No custom
or practice which may evolve between the parties in the administration of the
terms of this Lease will waive or diminish the right of Landlord to insist upon
the performance by Tenant in strict accordance with the terms of this Lease,
except as expressly modified in writing signed by Landlord and Tenant. The terms
and conditions contained in this Lease will inure to the benefit of and be
binding upon the parties, and upon their respective successors in interest and
legal representatives, except as otherwise expressly provided. This Lease is for
the sole benefit of Landlord and Tenant, and, other than Landlord's Mortgagee,
no third party may be deemed a third party beneficiary.
21.9. Quiet Enjoyment.
Provided Tenant has performed all of its obligations under this Lease,
Tenant may peaceably and quietly hold and enjoy the Premises for the Term,
without hindrance from Landlord or any party claiming by, through, or under
Landlord, subject to the terms and conditions of this Lease.
21.10. No Merger.
No merger of the leasehold estate created under this Lease with the fee
estate in all or any part of the Premises will occur if the same person acquires
or holds, directly or indirectly, this Lease or any interest in this Lease and
the fee estate in the leasehold Premises or any interest in such fee estate.
25
21.11. No Offer.
The submission of this Lease to Tenant may not be construed as an offer,
and Tenant will have no rights under this Lease unless Landlord executes a copy
of this Lease and delivers it to Tenant.
21.12. Entire Agreement.
This Lease constitutes the entire agreement between Landlord and Tenant
regarding the subject matter of this Lease and supersedes all prior related oral
statements and writings. Except for those set forth in this Lease, no
representations, warranties, or agreements have been made by Landlord or Tenant
to the other with respect to this Lease or the obligations of Landlord or Tenant
in connection with this Lease.
21.13. Calendar Days.
All references in this Agreement to a certain number of days will be deemed
to mean calendar days, unless otherwise expressly stated.
21.14. Prohibition Against Leasehold Mortgages.
Tenant will not mortgage, pledge or otherwise encumber its interest in this
Lease or in the Premises during the Term.
21.15. Waiver of Trial by Jury.
Landlord and Tenant mutually, knowingly, irrevocably, voluntarily and
intentionally waive the right to a trial by jury in any action, proceeding or
counterclaim brought by either of the parties against the other in connection
with this Lease. Each party further warrants and represents that it has
reviewed this waiver with its legal counsel and that each has waived its jury
trial rights following consultation with legal counsel. This waiver applies to
any and all subsequent amendments and any other agreements relating to this
Lease. In the event of litigation, this Lease may be filed as a written consent
to a trial by the court sitting without a jury. Tenant further agrees that in
the event Landlord commences any summary proceeding for non-payment of Rent,
Tenant will not interpose any counterclaim of any nature or description in such
proceeding.
21.16. Landlord's Remedies Cumulative.
No reference to any specific right or remedy will preclude Landlord from
exercising any other right, having any other remedy or maintaining any action to
which it may otherwise be entitled at law or in equity. No failure by Landlord
to insist upon the strict performance of any agreement, term, covenant or
condition of this Lease, or to exercise any right or remedy consequent upon a
breach thereof, and no acceptance of full or partial Rent during the continuance
of any such breach will constitute a waiver of any such breach, agreement, term,
covenant or condition. No waiver by Landlord of any breach by Tenant under this
Lease or of any breach by any other tenant under any other lease or any portion
of the Building will affect or alter this Lease in any way whatsoever. No
covenant, term or condition of this Lease will be deemed waived by Landlord
unless such waiver is in writing and executed by Landlord. Landlord may accept
a partial payment of Rent or other sums due under this Lease without such
acceptance constituting an accord and satisfaction and without prejudice to
Landlord's right to demand the balance of such Rent or other sum,
notwithstanding any notation on a check or letter accompanying such partial
payment, unless Landlord expressly waives its right to such balance in writing.
26
21.17. Prohibition Against Recordation.
Tenant may not record all or any part of this Lease or any memorandum of
this Lease. Any recording by Tenant of all or any part of this Lease or any
memorandum of this Lease will be in violation of this Lease and will be void,
and Tenant agrees to indemnify Landlord, its trustees, beneficiaries, agents,
successors and assigns for any losses, damages or expenses of any nature
whatsoever incurred by reason of such recording. In the event Tenant records or
causes all or any part of this Lease or any memorandum of this Lease to be
recorded, Tenant hereby irrevocably appoints Landlord as Tenant's attorney-in-
fact, coupled with an interest, to execute and record a certificate to clear any
cloud on the title to the Building created by the improper recordation.
21.18. Joint and Several Liability.
If two (2) or more individuals, corporations, partnerships or other
business associations (or any combination of two (2) or more thereof) sign this
Lease as Tenant, the liability of each such individual, corporation, partnership
or other business association to pay Rent and perform all of Tenant's other
obligations under this Lease are deemed to be joint and several.
21.19. Corporate Tenants.
If Tenant is a corporation, the persons executing this Lease on behalf of
Tenant hereby covenant and warrant that Tenant is a duly constituted corporation
qualified to do business in the State of Illinois; all of Tenant's franchise and
corporate taxes have been paid to date; all future forms, reports, fees and
other documents necessary for Tenant to comply with all applicable laws will be
filed by Tenant when due; and such persons are duly authorized by the board of
directors of such corporation to execute and deliver this Lease on behalf of
Tenant.
21.20. Right of First Offer.
Provided that as of the date Tenant notifies Landlord of its desire to
exercise its "Right of First Offer" (as defined below) (i) Tenant is not in
default under the terms and conditions of this Lease, (ii) no event has occurred
but for the passage of time or the giving of notice, or both, that would
constitute a material default under this Lease which has not been cured or
waived, and (iii) Tenant is then occupying the Premises, during the initial Term
of this Lease Tenant shall have an ongoing right of first offer (the "Right of
First Offer") to rent any available space on the 20/th/ floor of the Building
(the "ROFO Premises"), subject to the terms and conditions set forth below.
Prior to submitting any proposal to a third party with respect to the leasing of
the ROFO Premises, Landlord agrees to notify Tenant in writing as to the date in
the future (the "Availability Date") when the ROFO Premises can be made
available to Tenant ("Landlord's Notice"). Tenant must notify Landlord in
writing within ten (10) business days after Tenant's receipt of Landlord's
Notice whether Tenant desires to exercise its Right of First Offer. Tenant's
Right of First Offer must be exercised as to one hundred percent (100%) of the
ROFO Premises. If Tenant does not notify Landlord of its election to exercise
its Right of First Offer with respect to the ROFO Premises within said ten (10)
business period, then Tenant will be deemed to have elected not to exercise its
Right of First Offer with respect to the ROFO Premises and to have waived its
Right of First Offer with respect to the ROFO Premises until such time as
Landlord presents another proposal to an entirely new third party with respect
to the ROFO Premises. If Tenant elects to exercise its Right of First Offer and
so notifies Landlord within said ten (10) business day period, then Landlord
will, at its own expense, perform the base building work in the ROFO Premises
consistent with the terms of Exhibit H attached hereto, and Tenant will accept
---------
the ROFO Premises as of the Availability Date in its
27
then "AS-IS" condition and subject to the same terms and conditions contained in
the Lease, except that (a) the Base Rent for the ROFO Premises will be the then
prevailing market rental rate (taking into account then prevailing market
concessions, if any) for buildings of a similar size and class located in the
downtown Chicago area as determined jointly by Landlord and Tenant, failing
which the Base Rent for the ROFO Premises shall be determined in accordance with
the terms of Section 21.26 below; (b) the term "Premises" for all purposes of
this Lease will include the ROFO Premises; (c) the numerator of Tenant's
Proportionate Share will increase by the amount of rentable square feet
contained within the ROFO Premises; (d) Tenant's lease of the ROFO Premises will
be coterminous with the Term of this Lease; and (e) on or before the
Availability Date Tenant will cause the Security Deposit (be it cash or the
Letter of Credit) to be increased by an amount equal to sixty percent (60%) of
the cost of any tenant improvements in the ROFO Premises to be performed or paid
for by Landlord; provided, however, if Tenant's stock is publicly traded as of
the Availability Date, and so long as Tenant has satisfied the requirements of
Section A of Article VI of the Lease Information Summary with respect to cash or
cash equivalents, then instead of increasing the Security Deposit as described
above, Tenant shall, on or before the Availability Date, deposit with Landlord a
new Letter of Credit in conformity with the terms and provisions of Section 4.2
above and in an amount equal to the product of Eleven and 40/100 Dollars
($11.40) multiplied by the square footage of the ROFO Premises being leased by
Tenant on the Availability Date, which Letter of Credit shall be reduced in the
same manner described in Section A of Article VI of the Lease Information
Summary. Tenant will commence paying Rent for the ROFO Premises on the
Availability Date in the manner provided in Section 3.1 above.
21.21. Right of First Refusal.
Subject to the right(s) of any tenant(s) of the Building existing on the
date of this Lease to lease the "Additional Premises" (as defined below) or any
portion of the Additional Premises, and provided Tenant has continuously
occupied the Premises and is not in default under any terms and conditions of
this Lease as of the date Tenant notifies Landlord of its desire to exercise its
"Right of First Refusal" (as defined below), and so long as no event has
occurred but for the passage of time or the giving of notice, or both, that
would constitute a default under this Lease which has not been cured or waived,
during the first five (5) lease years Tenant shall have a right of first refusal
(the "Right of First Refusal") to rent any contiguous space which comprises more
than 7,500 rentable square feet and which is situated no lower than the twelfth
(12/th/) floor and no higher than the twentieth (20/th/) floor of the Building
(the "Additional Premises"), subject to the terms and conditions set forth
below. Prior to entering into any lease or other agreement with a third party
with respect to the Additional Premises during the first five (5) years of the
Term, Landlord will give Tenant written notice ("Landlord's Notice") of the
terms upon which a third party is willing to rent the Additional Premises.
Tenant must notify Landlord in writing within ten (10) business days after
Tenant's receipt of Landlord's Notice whether Tenant desires to exercise its
Right of First Refusal. Tenant's Right of First Refusal may only be exercised
as to the entire Additional Premises and on the same terms as offered by
Landlord to the third party. If Tenant does not notify Landlord of its election
to exercise its Right of First Refusal for the Additional Premises within the
ten (10) business day period described herein, then Tenant will be deemed to
have waived and elected not to exercise its Right of First Refusal with respect
to the Additional Premises, and Landlord may enter into a lease or other
agreement with any third party for the Additional Premises on the same terms and
conditions set forth in Landlord's Notice. However, if Landlord does not enter
into a lease or other agreement with a third party for the Additional Premises
on the same terms and conditions set forth in Landlord's Notice within six (6)
months after the expiration of said ten (10)
28
business day period, or if Landlord intends to enter into a lease with a third
party for the Additional Premises on terms materially different from the terms
and conditions set forth in Landlord's Notice, then Landlord must first give
Tenant a new Landlord's Notice and another opportunity to exercise its Right of
First Refusal in accordance with this Section 21.21. If Tenant elects to
exercise its Right of First Refusal and so notifies Landlord within such ten
(10) business day period, then Tenant will accept the Additional Premises in
"AS-IS" condition and subject to the same terms and conditions as offered to the
third party, including the payment of Rent, except that (i) the term "Premises"
for all purposes of this Lease will thereafter include the Additional Premises,
(ii) the numerator of Tenant's Proportionate Share will increase by the amount
of rentable square feet contained within the Additional Premises, (iii) Tenant's
Lease of the Additional Premises will be coterminous within the Term of this
Lease, including any extensions of the Term; and (iv) on or before taking
possession of the Additional Premises Tenant will cause the Security Deposit (be
it cash or the Letter of Credit) to be increased by an amount equal to sixty
percent (60%) of the cost of any tenant improvements in the Additional Premises
to be performed or paid for by Landlord; provided, however, if Tenant's stock is
publicly traded as of the date Tenant takes possession of the Additional
Premises, and so long as Tenant has satisfied the requirements of Section A of
Article VI of the Lease Information Summary with respect to cash or cash
equivalents, then instead of increasing the Security Deposit as described above,
Tenant shall, on or before the date Tenant takes possession of the Additional
Premises, deposit with Landlord a new Letter of Credit in conformity with the
terms and provisions of Section 4.2 above and in an amount equal to the product
of Eleven and 40/100 Dollars ($11.40) multiplied by the square footage of the
Additional Premises being leased by Tenant on the date Tenant takes possession
of the Additional Premises, which Letter of Credit shall be reduced in the same
manner described in Section A of Article VI of the Lease Information Summary.
21.22. Option To Renew.
Provided Tenant has continuously occupied the Premises and is not in
default under the terms and conditions of this Lease, and so long as no event
has occurred but for the passage of time or the giving of notice, or both, would
constitute a default under this Lease which has not been cured or waived, Tenant
has the option (the "Renewal Option") to extend the Term of this Lease for one
(1) additional five (5) year period (the "Renewal Period"). If Tenant desires
to exercise the Renewal Option, Tenant must deliver written notice (the "Renewal
Notice") to Landlord not less than fourteen (14) months prior to the scheduled
expiration of the Term. The same terms and conditions as contained in this
Lease will apply during the Renewal Period, except the Base Rent will be equal
to ninety-five percent (95%) of the then prevailing market rental rate (taking
into account then prevailing market concessions, if any) for buildings of
similar size and class located in the downtown Chicago area as determined
pursuant to the terms of Section 21.26 below. Any attempt by Tenant to exercise
the Renewal Option by any method, at any time or in any circumstances, except as
specifically set forth herein, will be null and void and of no force or effect
at the sole option and discretion of Landlord.
21.23. Tenant's First Expansion Option.
Provided Tenant has continuously occupied the Premises and is not in
default under the terms and conditions of this Lease, and so long as no event
has occurred but for the passage of time or the giving of notice, or both, that
would constitute a default under this Lease which has not been cured or waived,
Tenant shall have the option to rent certain additional space in
29
the Building to be designated by Landlord comprising not less than 8,500
rentable square feet and not more than 11,500 rentable square feet (the "First
Expansion Space") commencing on the first day of the second (2/nd/) lease year
of the Term (the "First Expansion Space Commencement Date") by giving Landlord
not less than six (6) months prior written notice of Tenant's election to rent
the First Expansion Space. Landlord agrees that in no event will the First
Expansion Space comprise more than two thousand (2,000) square feet in excess of
the additional space requested by Tenant, and that if the First Expansion Space
comprises more than five hundred (500) square feet in excess of the additional
space requested by Tenant, then Tenant shall be entitled to three (3) months of
gross Rent abatement only with respect to that portion of the First Expansion
Space which comprises more than five hundred (500) square feet in excess of the
additional space requested by Tenant. If Tenant exercises its option to rent the
First Expansion Space in the manner described herein, then Landlord will, at its
own expense, perform the base building work in the First Expansion Space
consistent with the terms of Exhibit H attached hereto and deliver the First
---------
Expansion Space to Tenant not less than sixty (60) days prior to the First
Expansion Space Commencement Date to enable Tenant to complete its tenant
improvements, and Tenant will accept the First Expansion Space in its then "AS-
IS" condition and subject to the same terms and conditions contained in the
Lease, except that beginning on the First Expansion Space Commencement Date (i)
Tenant will pay to Landlord Base Rent for the First Expansion Space in the
manner provided in Section 3.1 above at the same rate of Base Rent then being
paid by Tenant for the Premises under this Lease; (ii) the term "Premises" for
all purposes of this Lease will include the First Expansion Space; (iii) the
numerator of Tenant's Proportionate Share will increase by the rentable square
feet contained within the First Expansion Space; (iv) Landlord will afford
Tenant an allowance to cover the cost of certain non-structural, tenant
improvements to be made to the First Expansion Space (including but not limited
to architectural, mechanical, plumbing and engineering fees), which allowance
shall equal the product of $40.00 per square foot of the First Expansion Space
multiplied by a fraction, the numerator of which is the number of months
remaining from and after the First Expansion Space Commencement Date until the
end of the Term and the denominator of which is 120; and (v) Tenant will cause
the Security Deposit (be it cash or the Letter of Credit) to be increased by an
amount equal to sixty percent (60%) of the cost of any tenant improvements in
the First Expansion Space to be performed or paid for by Landlord; provided,
however, if Tenant's stock is publicly traded as of the First Expansion Space
Commencement Date, and so long as Tenant has satisfied the requirements of
Section A of Article VI of the Lease Information Summary with respect to cash or
cash equivalents, then instead of increasing the Security Deposit as described
above, Tenant shall, on or before the First Expansion Space Commencement Date,
deposit with Landlord a new Letter of Credit in conformity with the terms and
provisions of Section 4.2 above and in an amount equal to the product of Eleven
and 40/100 Dollars ($11.40) multiplied by the square footage of the First
Expansion Space being leased by Tenant on the First Expansion Space Commencement
Date, which Letter of Credit shall be reduced in the same manner described in
Section A of Article VI of the Lease Information Summary.
21.24. Tenant's Second Expansion Option.
Provided Tenant has continuously occupied the Premises and is not in
default under the terms and conditions of this Lease, and so long as no event
has occurred but for the passage of time or the giving of notice, or both, that
would constitute a default under this Lease which has not been cured or waived.
Tenant shall have the option to rent certain additional space in the Building to
be designated by Landlord comprising not less than 8,500 rentable square feet
30
and not more than 11,500 rentable square feet (the "Second Expansion Space")
commencing on the earlier of (a) the date Landlord delivers possession of the
Second Expansion Space with all tenant improvements having been completed to
Tenant, or (b) the first day of the fourth (4/th/) month of the third (3/rd/)
lease year of the Term (such earlier date being the "Second Expansion Space
Commencement Date") by giving Landlord not less than nine (9) months prior
written notice of Tenant's election to rent the Second Expansion Space.
Landlord agrees that in no event will the Second Expansion Space comprise more
than two thousand (2,000) square feet in excess of the additional space
requested by Tenant, and that if the Second Expansion Space comprises more than
five hundred (500) square feet in excess of the additional space requested by
Tenant, then Tenant shall be entitled to three (3) months of gross Rent
abatement only with respect to that portion of the Second Expansion Space which
comprises more than five hundred (500) square feet in excess of the additional
space requested by Tenant. If Tenant exercises its option to rent the Second
Expansion Space in the manner described herein, then Landlord will, at its own
expense, perform the base building work in the Second Expansion Space consistent
with the terms of Exhibit H attached hereto and deliver the Second Expansion
---------
Space to Tenant not less than sixty (60) days prior to the Second Expansion
Space Commencement Date to enable Tenant to complete its tenant improvements,
and Tenant will accept the Second Expansion Space in its then "AS-IS" condition
and subject to the same terms and conditions contained in the Lease, except that
beginning on the Second Expansion Space Commencement Date (i) Tenant will pay to
Landlord Base Rent for the Second Expansion Space in the manner provided in
Section 3.1 above at the same rate of Base Rent then being paid by Tenant for
the Premises under this Lease; (ii) the term "Premises" for all purposes of this
Lease will include the Second Expansion Space; (iii) the numerator of Tenant's
Proportionate Share will increase by the rentable square feet contained within
the Second Expansion Space; (iv) Landlord will afford Tenant an allowance to
cover the cost of certain non-structural, tenant improvements to be made to the
Second Expansion Space (including but not limited to architectural, mechanical,
plumbing and engineering fees), which allowance shall equal the product of
$40.00 per square foot of the Second Expansion Space multiplied by a fraction,
the numerator of which is the number of months remaining from and after the
Second Expansion Space Commencement Date until the end of the Term and the
denominator of which is 120; and (v) Tenant will cause the Security Deposit (be
it cash or the Letter of Credit) to be increased by an amount equal to sixty
percent (60%) of the cost of any tenant improvements in the Second Expansion
Space to be performed or paid for by Landlord; provided, however, if Tenant's
stock is publicly traded as of the Second Expansion Space Commencement Date, and
so long as Tenant has satisfied the requirements of Section A of Article VI of
the Lease Information Summary with respect to cash or cash equivalents, then
instead of increasing the Security Deposit as described above, Tenant shall, on
or before the Second Expansion Space Commencement Date, deposit with Landlord a
new Letter of Credit in conformity with the terms and provisions of Section 4.2
above and in an amount equal to the product of Eleven and 40/100 Dollars
($11.40) multiplied by the square footage of the Second Expansion Space being
leased by Tenant on the Second Expansion Space Commencement Date, which Letter
of Credit shall be reduced in the same manner described in Section A of Article
VI of the Lease Information Summary.
21.25. Tenant's Third Expansion Option.
Provided Tenant has continuously occupied the Premises and is not in
default under the terms and conditions of this Lease, and so long as no event
has occurred but for the passage of time or the giving of notice, or both, would
constitute a default under this Lease, Tenant shall
31
have the option to rent certain additional space in the Building to be
designated by Landlord comprising not less than 8,500 rentable square feet and
not more than 11,500 rentable square feet (the "Third Expansion Space")
commencing on the earlier of (a) the date Landlord delivers possession of the
Third Expansion Space with all tenant improvements having been completed to
Tenant, or (b) the first day of the sixth (6/th/) lease year of the Term (such
earlier date being the "Third Expansion Space Commencement Date") by giving
Landlord not less than fifteen (15) months prior written notice of Tenant's
election to rent the Third Expansion Space. Landlord agrees that in no event
will the Third Expansion Space comprise more than two thousand (2,000) square
feet in excess of the additional space requested by Tenant, and that if the
Third Expansion Space comprises more than five hundred (500) square feet in
excess of the additional space requested by Tenant, then Tenant shall be
entitled to three (3) months of gross Rent abatement only with respect to that
portion of the Third Expansion Space which comprises more than five hundred
(500) square feet in excess of the additional space requested by Tenant. If
Tenant exercises its option to rent the Third Expansion Space in the manner
described herein, then Landlord will, at its own expense, perform the base
building work in the Third Expansion Space consistent with the terms of
Exhibit H attached hereto and deliver the Third Expansion Space to Tenant not
---------
less than sixty (60) days prior to the Third Expansion Space Commencement Date
to enable Tenant to complete its tenant improvements, and Tenant will accept the
Third Expansion Space in its then "AS-IS" condition and subject to the same
terms and conditions contained in the Lease, except that beginning on the Third
Expansion Space Commencement Date (i) Tenant will pay to Landlord Base Rent for
the Third Expansion Space in the manner provided in Section 3.1 above at the
same rate of Base Rent then being paid by Tenant for the Premises under this
Lease; (ii) the term "Premises" for all purposes of this Lease will include the
Third Expansion Space; (iii) the numerator of Tenant's Proportionate Share will
increase by the rentable square feet contained within the Third Expansion Space;
(iv) Landlord will afford Tenant an allowance to cover the cost of certain non-
structural, tenant improvements to be made to the Third Expansion Space
(including but not limited to architectural, mechanical, plumbing and
engineering fees), which allowance shall equal the product of $40.00 per square
foot of the Third Expansion Space multiplied by a fraction, the numerator of
which is the number of months remaining from and after the Third Expansion Space
Commencement Date until the end of the Term and the denominator of which is 120;
and (v) Tenant will cause the Security Deposit (be it cash or the Letter of
Credit) to be increased by an amount equal to sixty percent (60%) of the cost of
any tenant improvements in the Third Expansion Space to be performed or paid for
by Landlord; provided, however, if Tenant's stock is publicly traded as of the
Third Expansion Space Commencement Date, and so long as Tenant has satisfied the
requirements of Section A of Article VI of the Lease Information Summary with
respect to cash or cash equivalents, then instead of increasing the Security
Deposit as described above, Tenant shall, on or before the Third Expansion Space
Commencement Date, deposit with Landlord a new Letter of Credit in conformity
with the terms and provisions of Section 4.2 above and in an amount equal to the
product of Eleven and 40/100 Dollars ($11.40) multiplied by the square footage
of the Third Expansion Space being leased by Tenant on the Third Expansion Space
Commencement Date, which Letter of Credit shall be reduced in the same manner
described in Section A of Article VI of the Lease Information Summary.
21.26. Arbitration.
In the event Tenant disputes Landlord's determination of the prevailing
market rental rate under this Lease, and if the parties cannot mutually agree on
the prevailing market rental
32
rate within thirty (30) days thereafter, then either party may notify the other
party in writing (the "Arbitration Notice") that it intends to arbitrate the
dispute, in which event within ten (10) business days after the recipient's
receipt of the Arbitration Notice, Landlord and Tenant shall each designate a
commercial real estate broker licensed in the State of Illinois and each being
experienced in determining rental rates for office buildings comparable to the
Building. If the brokers so designated fail to agree upon the prevailing market
rental rate of the Premises within twenty (20) days after their designation,
then the two (2) named brokers shall promptly and jointly select a third
commercial broker licensed in the State of Illinois and experienced in
determining rental rates for office buildings comparable to the Building, and
the third broker shall then determine conclusively the then prevailing market
rental rate for the Premises, which decision shall be binding on both Landlord
and Tenant. If either party fails to designate its respective broker within the
time allowed, then the broker designated by the other party shall act alone.
21.27. Tenant's Termination Right.
Notwithstanding anything to the contrary contained in this Lease, Tenant
shall have a one (1) time option to terminate this Lease at the end of the
seventh (7/th/) lease year of the Term by giving Landlord written notice of
Tenant's election to terminate this Lease on or before the last day of the sixth
(6/th/) month of the sixth (6/th/) lease year, which notice must be accompanied
by payment of a termination fee to Landlord in an amount equal to the total Rent
due from Tenant to Landlord during the seventh (7/th/) lease year. Tenant
agrees to vacate and surrender possession of the Premises to Landlord at the end
of the seventh (7/th/) lease year. This right of termination is reserved to
Tenant and will not inure to the benefit of any assignees, sublessees,
transferees, successors and/or assigns of Tenant.
LANDLORD:
---------
360 NORTH MICHIGAN TRUST,
a Delaware business trust
By: XXXXXXX XXXXXXX-XXXXXXX
MANAGEMENT CORPORATION, an
Illinois corporation, its
agent
By: /s/ J. Xxxx Xxxxxxx
--------------------------
Its: President
-------------------------
TENANT:
-------
xxxxxxxxxxx.xxx inc.,
a Michigan corporation
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Its: CEO
------------------------------
33
