EXHIBIT 10.15 LEASE AGREEMENT WITH DUKE, DATED OCTOBER 2, 1996.
OFFICE LEASE
Duke Realty Limited Partnership, as Landlord
and
Software Artistry, Inc., as Tenant
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OFFICE LEASE INDEX
Article 1 - Lease of Premises
Section 1.01 - Lease of Premises
Section 1.02 - Basic Lease Provisions
Article 2 - Term and Possession
Section 2.01 - Term
Section 2.02 - Construction Obligations
Section 2.03 - Tenant's Acceptance of the Leased Premises
Section 2.04 - Surrender of the Premises
Section 2.05 - Holding Over
Article 3 - Rent
Section 3.01 - Base Rent
Section 3.02 - Annual Rental Adjustment
A. Definitions
1. Annual Rental Adjustment
2. Operating Expenses
3. Building Expense Percentage
4. Landlord's Share of Operating Expenses
5. Tenant's Proportionate Share of Operating Expenses
B. Payment Obligation
1. Payment of Estimated Annual Rental Adjustment
2. Increases in Estimated Annual Rental Adjustment
3. Adjustment to Actual Annual Rental Adjustment
4. Tenant Verification
Section 3.03 - Contribution for Certain Tenant Finish Improvements
Section 3.04 - Late Charges
Article 4 - Intentionally Omitted
Article 5 - Occupancy and Use
Section 5.01 - Occupancy
Section 5.02 - Covenants of Tenant Regarding Use
Section 5.03 - Landlord's Rights Regarding Use
Section 5.04 - Access to and Inspection of the Leased Premises
Article 6 - Utilities and Other Building Services
Section 6.01 - Services to be Provided
Section 6.02 - Additional Services
Section 6.03 - Interruption of Services
Article 7 - Repairs, Maintenance, Alterations, Improvements and Fixtures
Section 7.01 - Repair and Maintenance of Building
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Section 7.02 - Repair and Maintenance of Leased Premises
Section 7.03 - Alterations or Improvements
Section 7.04 - Trade Fixtures
Article 8 - Fire or Other Casualty; Casualty Insurance
Section 8.01 - Substantial Destruction of the Building or the Leased
Premises
Section 8.02 - Partial Destruction of the Leased Premises
Section 8.03 - Casualty Insurance
Section 8.04 - Waiver of Subrogation
Article 9 - General Public Liability, Indemnification and Insurance
Section 9.01 - Tenant's Responsibility
Section 9.02 - Tenant's Insurance
Section 9.03 - Landlord's Responsibility
Article 10 - Eminent Domain
Article 11 - Liens
Article 12 - Rental, Personal Property and Other Taxes
Article 13 - Assignment and Subletting
Article 14 - Transfers by Landlord
Section 14.01 - Sale and Conveyance of the Building
Section 14.02 - Subordination
Article 15 - Defaults and Remedies
Section 15.01 - Defaults by Tenant
Section 15.02 - Remedies of Landlord
Section 15.03 - Default by Landlord and Remedies of Tenant
Section 15.04 - Limitation of Landlord's Liability
Section 15.05 - Non-Waiver of Defaults
Section 15.06 - Attorneys' Fees
Article 16 - Intentionally Omitted
Article 17 - Notice and Place of Payment
Section 17.01 - Notices
Section 17.02 - Place of Payment
Article 18 - Miscellaneous General Provisions
Section 18.01 - Condition of Premises
Section 18.02 - Insolvency or Bankruptcy
Section 18.03 - Common Areas
Section 18.04 - Choice of Law
Section 18.05 - Successors and Assigns
Section 18.06 - Name
Section 18.07 - Examination of Lease
Section 18.08 - Time
Section 18.09 - Defined Terms and Marginal Headings
Section 18.10 - Prior Agreements
Section 18.11 - Payment of and Indemnification for Leasing Commissions
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Section 18.12 - Severability of Invalid Provisions
Section 18.13 - Definition of the Relationship between the Parties
Section 18.14 - Estoppel Certificate
Section 18.15 - Force Majeure
Article 19 - Tenant's Responsibility Regarding Environmental Laws and Hazardous
Substances
Section 19.01 - Definitions
Section 19.02 - Compliance
Section 19.03 - Restrictions on Tenant
Section 19.04 - Notices, Affidavits, Etc.
Section 19.05 - Landlord's Rights
Section 19.06 - Tenant's Indemnification
Article 20 - Additional Provisions
Section 20.01 - Financial Statements
Section 20.02 - Representation and Indemnifications
Section 20.03 - Tenant's Representations and Warranties
Section 20.04 - Signage
Section 20.05 - Option to Expand I
Section 20.06 - Option to Expand II
Section 20.07 - Satellite Dish
Section 20.08 - Discretionary Allowance
Section 20.09 - Contingency
Exhibits:
A-1 - Legal Description
A-2 - Leased Premises
A-3 - Expansion Space I
B-1 - Shell Plans and Specifications
B-2 - Interior Plans and Specifications
B-3 - Project Schedule
C - Rules and Regulations
D - Estoppel Certificate
OFFICE LEASE
THIS LEASE is made this ____ day of ______________, 1996, by and between
DUKE REALTY LIMITED PARTNERSHIP, an Indiana limited partnership ("Landlord"),
and SOFTWARE ARTISTRY, INC., an Indiana corporation ("Tenant").
W I T N E S S E T H:
ARTICLE 1 - LEASE OF PREMISES
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SECTION 1.01. LEASE OF PREMISES. Landlord hereby leases to Tenant and
Tenant hereby leases from Landlord, subject to all of the terms and
conditions hereinafter set forth, office space in the office building (the
"Building") to be constructed in accordance with EXHIBIT B-1 attached hereto
and located on a site consisting of approximately 13.5 acres (the "Land"),
which is described in EXHIBIT A-1 attached hereto, in Xxxxxx County, Indiana,
for the term hereinafter specified. The space in the Building hereby leased
to Tenant is set forth in Item A of the Basic Lease Provisions and is
outlined in red on EXHIBIT A-2 attached hereto (the "Leased Premises").
Elevators shall not be leased to Tenant and shall remain under Landlord's
control.
SECTION 1.02. BASIC LEASE PROVISIONS.
A. *Building Address: _______________________________, Indianapolis, Indiana,
________; Floors: 1, 3 and 4; Suite: ________;
B. **Rentable Area: approximately 80,000 square feet;
Landlord shall use commercially reasonable standards, consistently applied,
in determining the Rentable Area and the rentable area of the Building.
The Rentable Area shall include the area within the Leased Premises plus a
pro rata portion of the area covered by the common areas within the
Building. The add-on factor to be used in the calculation of Rentable Area
shall be approximately five percent (5%) and shall be finalized upon
completion of final plans and specifications. Landlord's determination of
Rentable Area made in good faith shall conclusively be deemed correct
absent obvious error for all purposes hereunder, including without
limitation the calculation of Tenant's Building Expense Percentage and
Tenant's Minimum Annual Rent.
C. **Building Expense Percentage: 80%;
D. **Minimum Annual Rent:
Year 1 $1,303,133.37
Years 2-15 $1,421,600.04 (per year)
Year 16 $ 118,466.67 (one month)
E. **Monthly Rental Installments:
Month 1 $ 0.00
Months 2-181 $118,466.67
________________________________________________________________
* (to be completed when address is established)
** (to be adjusted if necessary after construction of the Building and
the Leased Premises is completed)
F. Term: Fifteen (15) years and one (1) month;
G. Target Commencement Date: January 1, 1998;
H. Security Deposit: N/A;
I. Brokers: Duke Realty Limited Partnership representing Landlord and
Meridian Real Estate Services representing Tenant;
J. Permitted Use: General office purposes;
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K. Working Drawings Approval Date: ______________________ , 1996;
L. Address for payments and notices as follows:
Landlord: Duke Realty Limited Partnership
0000 Xxxxxxxx Xxxxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
With Rental Duke Realty Limited Partnership
Payments to: X.X. Xxx 00000
Xxxxxxxxxxxx, XX 00000
Tenant:
Prior to
Commencement Date: Software Artistry, Inc.
0000 Xxxxxxxx Xxx Xxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
After Commencement
Date: Software Artistry, Inc.
____________________________
____________________________
MEMORANDUM OF ACTUAL COMMENCEMENT AND EXPIRATION DATES
Commencement Date_________ Expiration Date__________________
ARTICLE 2 - TERM AND POSSESSION
SECTION 2.01. TERM. The term of this Lease shall be the period of time
specified in Item F of the Basic Lease Provisions ("Original Term") and shall
commence on (i) the Target Commencement Date as provided in Item G of the
Basic Lease Provisions; or (ii) such earlier date as Tenant takes possession
or commences use of the Leased Premises; or (iii) such later date upon
Substantial Completion of the tenant finish improvements in accordance with
EXHIBIT B-2, provided, however, that the Commencement Date shall not be
extended as a result of any delays. The date of commencement as defined
above, hereinafter called the "Commencement Date," and the "Expiration Date"
shall be confirmed by Tenant as provided in Section 2.03. As used in this
Lease, "Lease Term" shall include the Original Term and any renewal thereof.
SECTION 2.02. CONSTRUCTION.
A. SHELL WORK. The scope of the work for the shell improvements
("Shell Work") to be performed by Landlord shall be set forth in the
preliminary plans and specifications and written descriptions thereto all of
which shall be attached hereto as PRELIMINARY EXHIBIT "B-1". Landlord will
prepare final plans and specifications which upon completion shall be
substituted and attached hereto as EXHIBIT "B-1" ("Shell Plans and
Specifications"). Landlord, at its sole cost and expense, shall construct in
a good and workmanlike manner all of the improvements and supply all work,
labor, materials and equipment necessary to complete the Shell Work in
accordance with the Shell Plans and Specifications, which shall include,
without limitation, the installation of landscaping, parking lots, driveways
and all improvements as shown on the Shell Plans and Specifications for the
benefit of the Leased Premises.
Notwithstanding anything contained herein to the contrary, Landlord hereby
agrees that Tenant shall have the right to approve the preliminary plans and
specifications for the Shell Work within five (5)
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business days after Tenant's receipt thereof, which approval shall not be
unreasonably withheld. Tenant's failure to respond within five (5) business
days after receipt of such preliminary plans and specifications shall be
deemed to be an approval of the same. Landlord shall provide such
preliminary plans and specifications to Tenant on or before September 25,
1996. In the event Landlord and Tenant cannot reasonably agree on such
preliminary plans and specifications on or before September 30, 1996, either
party shall have the right to terminate this Lease by providing written
notice to the other party on or before September 30, 1996. Upon such
termination, both parties shall be released from further liability under this
Lease.
Landlord hereby further agrees that the Shell Plans and Specifications shall
be materially consistent with the approved preliminary plans and specifications.
In the event the Shell Plans and Specifications are not materially consistent
with the approved preliminary plans and specifications, Tenant shall have the
right to terminate this Lease upon ten (10) days prior written notice to
Landlord. Upon such termination, both parties shall be released from further
liability under this Lease.
B. TENANT FINISH IMPROVEMENTS AND ALLOWANCES. Landlord agrees to
perform and complete the work on the tenant finish improvements in the Leased
Premises in accordance with Tenant's plans and specifications which shall be
mutually agreed upon by both Landlord and Tenant and which, upon completion,
shall be attached hereto as EXHIBIT B-2 ("Interior Plans and Specifications").
Both Landlord and Tenant shall be reasonable and work together in good faith
to mutually agree upon the Interior Plans and Specifications. Landlord shall
provide Tenant with a tenant finish improvement allowance in an amount not to
exceed One Thousand Four Hundred Eighty Thousand Dollars ($1,480,000.00)
("Landlord's Allowance") which shall be applied solely toward the cost of
constructing and completing the tenant finish improvements in the Leased
Premises in accordance with the Interior Plans and Specifications. Any costs
of construction in excess of Landlord's Allowance shall be Tenant's
responsibility. Tenant may amortize up to Three Dollars and Fifty Cents
($3.50) per rentable square foot of the Leased Premises of such excess costs
over the initial term of the Lease, which shall result in an increase in
Minimum Annual Rent of Eleven Cents ($0.11) per rentable square foot for each
One Dollar ($1.00) per rentable square foot of such excess costs amortized.
Any such excess costs which are not amortized in accordance with the
foregoing sentence shall be paid to Landlord by Tenant as additional rent
within thirty (30) days of Tenant's receipt of an invoice therefor.
Tenant's architect shall prepare the Interior Plans and Specifications and
all related documents and provide the same to Landlord, along with a copy on
computer disk, in accordance with the Project Schedule described below.
Landlord shall provide Tenant with an allowance not to exceed One Dollar and
Twenty-five Cents ($1.25) per useable square foot of the Leased Premises to
be used exclusively for Tenant's cost of preparing and reviewing the Interior
Plans and Specifications (the "A & E Allowance"). Such allowance shall be
paid within (30) days of Landlord's receipt of an invoice from Tenant's
architect for such costs. Tenant shall be solely responsible for any and all
fees and expenses associated with the Interior Plans and Specifications in
excess of the A & E Allowance.
Landlord and Tenant hereby agree that all work on the initial and any
subsequent tenant finish improvements in the Leased Premises and any
expansion space shall be performed in a good and workmanlike manner by Duke
Construction Services Limited Partnership as Landlord's general contractor
("Duke"). Duke will competitively bid all tenant finish improvements and
manage the entire construction process.
C. PROJECT SCHEDULE AND PERMITS. The Shell Plans and Specifications
and the Interior Plans and Specifications shall be finalized and the Shell
Work and tenant finish improvements shall be constructed by Landlord in
accordance with the Project Schedule attached hereto as EXHIBIT "B-3".
Landlord shall apply for and obtain, as expeditiously as possible, all
permits, licenses and certificates necessary for the construction of the
Shell Work and tenant finish improvements and for the occupancy of the Leased
Premises by Tenant. Landlord agrees to use commercially reasonable efforts
to Substantially Complete the Shell Work and the tenant finish improvements
in the Leased Premises on or before January 1, 1998, subject to force majeure
and Tenant Caused Delay delays.
In the event Landlord fails to Substantially Complete the Shell Work and
the tenant finish improvements in the Leased Premises on or before January
1, 1998, subject to force majeure and Tenant Caused Delays, Minimum Annual
Rent and the Annual Rental Adjustment shall xxxxx one (1) day for each day of
delay in Substantial Completion after January 1, 1998 (as the same may be
extended by force majeure or Tenant Caused Delays) and
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the Commencement Date shall be postponed for the period of such delay to the
extent the delay is caused by force majeure.
In the event Landlord fails to substantially complete the Shell Work and
the tenant finish improvements in the Leased Premises on or before February
1, 1998, subject to force majeure and Tenant Caused Delays, Minimum Annual
Rent and the Annual Rental Adjustment shall xxxxx two (2) days for each day
of delay in Substantial Completion after February 1, 1998 (as the same may be
extended by force majeure or Tenant Caused Delays) and the Commencement Date
shall be postponed for the period of such delay to the extent the delay is
caused by force majeure.
In the event Landlord fails to Substantially Complete the Shell Work and
the tenant finish improvements in the Leased Premises on or before June 30,
1998, for any reason except for Tenant Caused Delays, Tenant shall have the
right to terminate this Lease by providing written notice to Landlord prior
to the date of Substantial Completion. Upon such termination, both parties
shall be released from further liability under this Lease.
D. NOTICE AND FIXTURING. Landlord shall give Tenant written notice of
the anticipated date of Substantial Completion of the tenant finish
improvements in the Leased Premises. Landlord hereby agrees to allow Tenant
the right and privilege of going into the Leased Premises at least thirty
(30) days prior to the Commencement Date, in compliance with the terms of
Section 7.03 and in accordance with the following terms and conditions, to
install telephone and computer wiring and cabling and to complete interior
decoration work including the installation of office furniture. Tenant shall
provide Landlord with its proposed relocation schedule and sequencing,
showing all areas to be fixtured prior to the Commencement Date, on or before
tenant improvement construction which begins on September 1, 1997. In
addition, prior to Tenant's entry into the Leased Premises as set forth
above, Tenant shall arrange its schedule with Landlord so as not to interfere
with or delay other work of Landlord in the Leased Premises. Tenant shall be
responsible for removing offsite, on a daily basis, all packaging and waste
material related to Tenant's fixturing so as not to interfere with Landlord's
work in the Leased Premises. Landlord shall have no liability whatsoever for
any loss or damage to any of Tenant's fixtures, equipment or any other items
brought into the Leased Premises prior to the Commencement Date.
E. SUBSTANTIAL COMPLETION. Substantial Completion shall be defined as
and The Leased Premises shall be deemed "Substantially Completed" upon the
occurrence of all of the following: (i) construction by Landlord of the
Leased Premises in accordance with the plans and specifications listed on
EXHIBIT B-1 (Shell Plans and Specifications) and B-2 (Interior Plans and
Specifications) attached hereto, and delivery to Tenant by Lessor's architect
of a certificate to that effect; (ii) the utility services contemplated by
such plans and specifications, including, if applicable, storm and sanitary
sewer, water, gas and electricity, have been fully installed and are
operational for use by Tenant; (iii) all proposed means of ingress and
egress, parking and loading areas are available for use by Tenant; (iv)
Landlord has given Tenant no less then twenty (20) days prior written notice;
and (v) the remaining work to be done to render the Leased Premises fully
completed shall consist solely of minor details of construction, mechanical
adjustments or decoration, which will not interfere with Tenant's use and
enjoyment of the Leased Premises. Tenant's taking total or partial occupancy
of the Leased Premises, or Landlord's Substantially Completing the Leased
Premises, shall not relieve Landlord of its obligation to proceed diligently
to fully complete the Leased Premises and to complete all punch-list items
which shall be accomplished within sixty (60) days after the date of
Substantial Completion, provided, however, that Landlord shall not be in
default hereunder if Landlord commences correction of any such defects within
said sixty (60) day period and thereafter diligently pursues the same to
completion.
F. TENANT CAUSED DELAYS. Tenant Caused Delays shall mean any material
delay caused by or resulting from the following or any combination of the
following: (1) failure of Tenant to comply with the Project Schedule; (2)
any change orders requested by Tenant; (3) failure of Tenant to timely or
properly arrange its furnishings or be present for any scheduled walk-through
of the Leased Premises in order to obtain the architect's certificate of
Substantial Completion once the Leased Premises are otherwise substantially
complete; (4) failure of Tenant to cooperate with Landlord and respond
promptly to any reasonable request of Landlord; or (5) Tenant's fixturing of
the Leased Premises prior to the Commencement Date.
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SECTION 2.03. TENANT'S ACCEPTANCE OF THE LEASED PREMISES. Upon delivery of
possession of the Leased Premises to Tenant as hereinbefore provided, Tenant
shall execute a letter of understanding acknowledging (i) the Commencement
Date and Expiration Date of this Lease, and (ii) that Tenant has accepted the
Leased Premises for occupancy and that the condition of the Leased Premises,
including the tenant finish improvements constructed thereon, and the
Building was at the time satisfactory and in conformity with the provisions
of this Lease in all respects, except for any patent defects as to which
Tenant shall give written notice to Landlord within sixty (60) days after
such delivery, and except for any latent defects as to which Tenant shall
give written notice to Landlord within one hundred eighty (180) days after
such delivery. Landlord shall promptly thereafter correct all such defects.
Such letter of understanding shall become a part of this Lease. If Tenant
takes possession of and occupies the Leased Premises, Tenant shall be deemed
to have accepted the Leased Premises in the manner described in this Section
2.03, even though the letter of understanding provided for herein may not
have been executed by Tenant.
SECTION 2.04. SURRENDER OF THE PREMISES. Upon the expiration or earlier
termination of this Lease, or upon the exercise by Landlord of its right to
re-enter the Leased Premises without terminating this Lease, Tenant shall
immediately surrender the Leased Premises to Landlord, together with all
alterations, improvements and other property as provided elsewhere herein, in
broom-clean condition and in good order, condition and repair, except for
ordinary wear and tear and damage which Tenant is not obligated to repair,
failing which Landlord may restore the Leased Premises to such condition at
Tenant's expense. Upon such expiration or termination, Tenant shall have the
right to remove its personal property (as described in Article 7), and shall,
upon Landlord's request, remove all computer and other equipment, signs,
satellite dishes, electronic presentation equipment, flooring, wiring and
cabling in the Leased Premises, at its sole cost and expense. Any property
remaining in the Leased Premises after the expiration or termination of this
Lease shall be deemed abandoned and Landlord shall have the right to remove
and dispose of such property at Tenant's sole cost and expense. Tenant
shall, at its expense, promptly repair any damage caused by any such removal,
and shall restore the Leased Premises to the condition existing prior to the
installation of the items so removed.
SECTION 2.05. HOLDING OVER. If Tenant retains possession of the Leased
Premises after the expiration or earlier termination of this Lease, Tenant
shall become a tenant from month to month at One Hundred Fifty Percent (150%)
of the then prevailing market rate (as determined by Landlord in its sole and
absolute discretion) for the Leased Premises in effect upon the date of such
expiration or earlier termination (subject to adjustment as provided in
Article 3 hereof and prorated on a daily basis), and otherwise upon the
terms, covenants and conditions herein specified, so far as applicable.
Acceptance by Landlord of rent after such expiration or earlier termination
shall not result in a renewal of this Lease. Notwithstanding the foregoing
provision, no holding over by Tenant shall operate to extend this Lease, and
Tenant shall vacate and surrender the Leased Premises to Landlord upon Tenant
being given thirty (30) days prior written notice from Landlord to vacate.
The foregoing provisions of this Section 2.05 are in addition to and do not
affect Landlord's right of re-entry or any other rights of Landlord hereunder
or as otherwise provided by law.
ARTICLE 3 - RENT
SECTION 3.01. BASE RENT. Tenant shall pay to Landlord as Minimum Annual
Rent for the Leased Premises the sum specified in Item D of the Basic Lease
Provisions, payable in equal consecutive Monthly Rental Installments as
specified in Item E of the Basic Lease Provisions, in advance, without
deduction or offset, on or before the first day of each and every calendar
month during the Lease Term; provided, however, that if the Commencement Date
shall be a day other than the first day of a calendar month or the Expiration
Date shall be a day other than the last day of a calendar month, the Monthly
Rental Installment for such first or last fractional month shall be prorated
on the basis of the number of days during the month this Lease was in effect
in relation to the total number of days in such month.
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SECTION 3.02. ANNUAL RENTAL ADJUSTMENT.
A. DEFINITIONS. For purposes of this Section 3.02, the following
definitions shall apply:
1. "ANNUAL RENTAL ADJUSTMENT" - shall mean the amount of Tenant's
Proportionate Share of Operating Expenses and Tenant's Proportionate
Share of Real Estate Taxes for a particular calendar year.
2. "OPERATING EXPENSES" - shall mean the amount of all of Landlord's
direct costs and expenses paid or incurred in operating and
maintaining the Building (including the Common Areas as
defined in Section 18.03 and the land described in EXHIBIT A-1)
for a particular calendar year as determined by Landlord in
accordance with generally accepted accounting principles, consistently
applied, including all additional direct costs and expenses of
operation and maintenance of the Building which Landlord reasonably
determines that it would have paid or incurred during such year if
the Building had been ninety-five percent (95%) occupied (provided,
however, that in no event shall Landlord collect more for Building
Operating Expenses than it actually expends), including by way of
illustration and not limitation: insurance premiums, water, sewer,
electrical and other utility charges other than the separately billed
electrical and other charges paid by Tenant as provided in this Lease;
service and other charges incurred in the operation and maintenance
of the elevators and the heating, ventilation and air-conditioning
system; cleaning and other janitorial services; tools and supplies;
repair costs; landscape maintenance costs; security services; license,
permit and inspection fees; commercially reasonable management fees;
wages and related employee benefits payable for the maintenance and
operation of the Building; amortization of capital improvements that
produce a reduction in operating costs together with interest at the
rate of twelve percent (12%) per annum on the unamortized balance
thereof; maintenance and repair costs, and in general all other costs
and expenses which would, under generally accepted accounting
principles, be regarded as operating and maintenance costs and
expenses, including those which would normally be amortized over a
period not to exceed five (5) years. There shall also be included in
Operating Expenses the cost or portion thereof reasonably allocable to
the Building, amortized over such period as Landlord shall reasonably
determine, together with interest at the rate of twelve percent (12%)
per annum on the unamortized balance, of any capital improvements made
to the Building by Landlord after the date of this Lease which are
required under any governmental law or regulation that was not
applicable to the Building at the time it was constructed.
3. "REAL ESTATE TAXES" - shall mean any form of real estate tax or
assessment, general, special, ordinary or extraordinary, and any
license or permit fee, commercial rental tax, improvement bond or
bonds, levy or tax (other than federal or state inheritance, personal
income or estate taxes) imposed upon the Building and/or the Land by
any authority having the direct or indirect power to tax, including
any city, state or federal government or any school, agricultural,
sanitary, fire, street, drainage or other improvement district thereof,
including costs and expenses of contesting the validity or amount of
any such taxes.
Tenant acknowledges and agrees that it is responsible for, and assumes
and accepts the risk of, obtaining and maintaining tax abatement
deductions for the Leased Premises, including the payment of any and
all application and other fees associated therewith. Tenant shall
prepare and file any required applications, forms, resolutions,
agreements or other materials, whether for or on behalf of Tenant or
Landlord. To permit Tenant to take the actions necessary to obtain
and maintain property tax abatement deductions on the Leased
Premises, Landlord shall (i) upon reasonable notice from Tenant,
execute such tax abatement applications, forms, resolutions,
agreements, and other materials; (ii) upon reasonable notice from
Tenant, provide Tenant with information in its possession with respect
to the Leased Premises necessary to prepare such applications, forms,
resolutions, agreements, and other materials; (iii) upon reasonable
notice from Tenant, authorize Tenant to appear on behalf of Landlord
at any public hearing related to obtaining or maintaining property
tax abatement on the Leased Premises; and (iv) shall forward to Tenant
promptly upon receipt any notice of assessment or change in assessment
relating to the Leased
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Premises. Tenant further understands that it is responsible for any
and all real property taxes due or accruing during the Lease Term
with regard to the Leased Premises and agrees to indemnify and hold
harmless Landlord from and against any and all losses, claims or
damages with regard to such taxes, except for any losses, claims or
damages resulting from Landlord's failure to comply with its
obligations under this Section or under any agreement between
Landlord and Tenant and the City of Indianapolis, Indiana with respect
to tax abatement.
4. "BUILDING EXPENSE PERCENTAGE" - shall mean the percentage specified in
Item C of the Basic Lease Provisions. This percentage was determined
by dividing the rentable area in the Leased Premises by the total
rentable area in the Building. Rentable area excludes the elevators
and elevator shafts, which are reserved to Landlord.
5. "LANDLORD'S SHARE OF OPERATING EXPENSES" - shall be an amount equal to
the product of Tenant's Building Expense Percentage as provided in
Item C of the Basic Lease Provisions multiplied by the Building
Operating Expenses for the twelve (12) month period following the
Commencement Date (excluding all Real Estate Taxes).
6. "TENANT'S PROPORTIONATE SHARE OF OPERATING EXPENSES" - shall be an
amount equal to the remainder of (i) the product of Tenant's Building
Expense Percentage as provided in Item C of the Basic Lease Provisions
times the Building Operating Expenses less (ii) Landlord's Share of
Operating Expenses, provided that such amount shall not be less than
zero.
7. "TENANT'S PROPORTIONATE SHARE OF REAL ESTATE TAXES" - shall be an
amount equal to the product of Tenant's Building Expense Percentage as
provided in Item C of the Basic Lease Provisions times the Building
Real Estate Taxes.
B. PAYMENT OBLIGATION. In addition to the Minimum Annual Rent specified in
this Lease, Tenant shall pay to Landlord as additional rent for the Leased
Premises, commencing with the thirteenth (13th) month of the Lease Term
and continuing thereafter, the Annual Rental Adjustment for each such
calendar year or portion thereof.
1. PAYMENT OF ESTIMATED ANNUAL RENTAL ADJUSTMENT - The Annual Rental
Adjustment shall be estimated annually by Landlord, and written notice
thereof shall be given to Tenant at least thirty (30) days prior to
the beginning of each calendar year. In the case of the calendar year
in which the Lease Term commences, written notice of the estimated
Operating Expenses and Real Estate Taxes shall be given Tenant prior
to the Commencement Date. Tenant shall pay to Landlord each month,
at the same time the Monthly Rental Installment is due, an amount equal
to one-twelfth (1/12) of the estimated Annual Rental Adjustment.
2. INCREASES IN ESTIMATED ANNUAL RENTAL ADJUSTMENT - If Real Estate
Taxes or the cost of utility or janitorial services increase during a
calendar year, Landlord may increase the estimated Annual Rental
Adjustment during such year by giving Tenant written notice to that
effect, and thereafter Tenant shall pay to Landlord, in each of the
remaining months of such year, an amount equal to the amount of such
increase in the estimated Annual Rental Adjustment divided by the
number of months remaining in such year.
3. ADJUSTMENT TO ACTUAL ANNUAL RENTAL ADJUSTMENT - Within ninety (90)
days after the end of each calendar year, Landlord shall prepare and
deliver to Tenant a statement showing the actual Annual Rental
Adjustment. Within thirty (30) days after receipt of the
aforementioned statement, Tenant shall pay to Landlord, or Landlord
shall credit against the next rent payment or payments due from
Tenant, as the case may be, the difference between the actual Annual
Rental Adjustment for the preceding calendar year and the estimated
amount paid by Tenant during such year. If this Lease shall commence,
expire or be terminated on any date other than the last day of a
calendar year, then the Annual Rental Adjustment for such partial
calendar year shall be prorated on the basis of
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the number of days during the year this Lease was in effect in
relation to the total number of days in such year. In the event
there is a credit due to Tenant, or a payment due to Landlord from
Tenant, for the last year of the Lease Term, both parties hereby
agree to pay such amount to the other party within thirty (30) days
of delivery of Landlord's statement.
4. TENANT VERIFICATION - Tenant shall have the right to inspect Landlord's
books and records which contain the Operating Expense and Real Estate
Tax information for the Building, if written notice of such request is
given to Landlord not later than ninety (90) days following receipt
of Landlord's statement of the actual Annual Rental Adjustment by
Tenant. If the parties are unable to resolve any disagreement by
negotiation within thirty (30) days following Tenant's notice to
Landlord, Tenant may, at Tenant's sole cost and expense, cause a
qualified independent certified public accountant designated by Tenant
to audit Landlord's records with respect to the Operating Expenses,
which audit shall be completed within sixty (60) days after
Tenant's notice to Landlord. Such audit shall include but not be
limited to costs and expenses relating to real estate taxes,
insurance premiums and Building expenses. In the event the first
audit within each five (5) year period of the Lease Term
discloses (i) errors made during the prior calendar year which,
when totaled, clearly indicate that the sum overcharged to and
paid by Tenant, exceeds five percent (5%) of the Annual Rental
Adjustment amount plus Landlord's Share of Operating Expenses
(the "Total Fees"), the audit shall be at the expense of Landlord,
not to exceed Five Thousand Dollars ($5,000.00), or (ii) no errors
or an error which equals or is less than five percent (5%) of the
Total Fees, the audit shall be at the expense of Tenant.
For each subsequent audit during each five (5) year period, where
the audit discloses errors exceeding five percent (5%) of the
Total Fees, Landlord shall pay for such audit and, if the audit
discloses errors equal to or less than five percent (5%) of the
Total Fees, Tenant shall pay the costs of the audit. If Landlord
spends more than eight (8) hours to accommodate Tenant's right to
audit hereunder, Tenant shall also pay to Landlord as additional
rent One Hundred Dollars ($100.00) per hour for each hour that
Tenant's audit takes of Landlord's property manager's or asset
manager's time, provided such audit discloses no error or an
error which equals or is less than five percent (5%) of the Total
Fees. The results of the audit (regardless of the degree of the
error, if any) shall be binding upon Landlord and Tenant and
Landlord shall thereafter, if appropriate, change its method of
calculating the Operating Expenses consistent with the results of
the audit.
If no such notice requesting to inspect Landlord's books and records
is received by Landlord within ninety (90) days following receipt by
Tenant of Landlord's statement of the actual Annual Rental Adjustment,
or if Tenant shall not elect to cause an audit by written notice to
Landlord within thirty (30) days following Tenant's initial notice to
Landlord, then Landlord's statement shall be conclusively deemed to
have been approved and accepted by Tenant. Pending resolution of any
dispute with respect to statements of Tenant's Annual Rental
Adjustment, Tenant shall pay its Annual Rental Adjustment as shown on
such statement, and upon final determination of the amount of Tenant's
Annual Rental Adjustment, Landlord shall promptly refund any
overpayment to Tenant or Tenant shall promptly pay any amount due
to Landlord, as applicable.
5. LIMIT ON INCREASE IN ANNUAL RENTAL ADJUSTMENT. For purposes of this
subpart, "Capped Operating Expenses" shall mean all Operating Expenses
except real estate taxes and assessments (including all costs and
expenses of contesting the validity or amount thereof), fees and
charges imposed by any governmental entity, insurance premiums,
utility charges, snow removal charges, janitorial expenses, and
costs imposed by covenants or easements. The portion of the Annual
Rental Adjustment relating to the Capped Operating Expenses shall be
called the "Capped Portion." Notwithstanding the provisions of this
section, beginning with the calendar year following the first full
calendar year for which Tenant is obligated to pay an Annual Rental
Adjustment, Tenant shall not be obligated to pay that portion of the
Capped Portion which exceeds 107% of the greater of (i) the amount of
the Capped Portion for the immediately preceding
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calendar year, or (ii) the amount the Capped Portion for the
immediately preceding calendar year would have been had the Capped
Portion increased at the rate of 7% per annum in all previous years.
SECTION 3.03. CONTRIBUTION FOR CERTAIN TENANT FINISH IMPROVEMENTS. Tenant
shall be responsible for the cost of Tenant's tenant finish improvements in
excess of Landlord's Allowance as set forth in SECTION 2.02.
SECTION 3.04. LATE CHARGES. In the event Tenant fails to pay within thirty
(30) days after the same is due and payable any installment of Minimum Annual
Rent or any other sum or charge required to be paid by Tenant to Landlord under
this Lease, such unpaid amount shall bear interest from the due date thereof to
the date of payment at the rate of five percent (5%) above the Prime Rate per
annum or the highest rate permitted under applicable law, whichever is less,
until paid.
ARTICLE 4 - SECURITY DEPOSIT
Intentionally Omitted.
ARTICLE 5 - OCCUPANCY AND USE
SECTION 5.01. OCCUPANCY. Tenant shall use and occupy the Leased Premises for
the purposes set forth in Item J of the Basic Lease Provisions and shall not use
the Leased Premises for any other purpose whatsoever.
SECTION 5.02. COVENANTS OF TENANT REGARDING USE. In connection with its use of
the Leased Premises, Tenant agrees to do the following:
A. Tenant shall (i) use and maintain the Leased Premises and conduct its
business thereon in a safe, careful, reputable and lawful manner,
(ii) comply with the Covenants and all laws, rules, regulations, orders,
ordinances, directions and requirements of any governmental authority or
agency, now in force or which may hereafter be in force, including without
limitation those which shall impose upon Landlord or Tenant any duty with
respect to or triggered by a change in the use or occupation of, or any
improvement or alteration to, the Leased Premises, (iii) comply with and
obey all reasonable directions of the Landlord, including the Building Rules
and Regulations attached hereto as EXHIBIT C and as may be modified from
time to time by Landlord on reasonable notice to Tenant, provided, however,
that if such Rules and Regulations are inconsistent with any provision of
this Lease, the terms of this Lease shall prevail, and (iv) shall not do
or permit anything to be done in or about the Leased Premises which will
in any way obstruct or interfere with the rights of other tenants or
occupants of the Building or injure or annoy them. Landlord shall not be
responsible to Tenant for the non-performance by any other tenant or
occupant of the Building of any of the Building Rules and Regulations, but
agrees to take reasonable measures to assure such other tenant's compliance.
B. Tenant shall not overload the floors of the Leased Premises beyond their
designed weight-bearing capacity. Landlord reserves the right to direct
the positioning of all heavy equipment, furniture and fixtures which
Tenant desires to place in the Leased Premises so as to distribute properly
the weight thereof, and to require the removal of any equipment or
furniture which exceeds the weight limit specified herein.
C. Tenant shall not use the Leased Premises, or allow the Leased Premises
to be used, for any purpose or in any manner which would, in Landlord's
opinion, invalidate any policy of insurance now or hereafter carried on
the Building or increase the rate of premiums payable on any such
insurance policy. Should Tenant fail to comply with this covenant,
Landlord may, at its option, require Tenant to stop engaging in such
activity or to reimburse Landlord as additional rent for any increase in
premiums charged on the insurance carried by Landlord on the Leased Premises
and attributable to the use being made of the Leased Premises by Tenant.
D. Tenant shall not inscribe, paint, affix or display any signs, advertisements
or notices on the Building, except as provided in Section 20.04 hereof, and
except for such tenant identification information as
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Landlord permits to be included or shown on the directory board in the
main lobby and on or adjacent to the access door or doors to the
Leased Premises.
SECTION 5.03. LANDLORD'S RIGHTS REGARDING USE. In addition to the rights
specified elsewhere in this Lease, Landlord shall have the following rights
regarding the use of the Leased Premises or the Common Areas by Tenant, its
employees, agents, customers and invitees, each of which may be exercised
without notice or liability to Tenant:
A. Landlord may install such signs, advertisements or notices or tenant
identification information on the directory board or tenant access doors
as it shall deem necessary or proper.
B. Landlord shall reasonably approve or disapprove, prior to installation,
all types of drapes, shades and other window coverings used in the Leased
Premises, and may control all internal lighting that may be visible from
outside the Leased Premises.
C. Landlord shall reasonably approve or disapprove all sign painting and
lettering, used on the Leased Premises and the Building, including the
suppliers thereof.
D. Landlord may grant to any person the exclusive right to conduct any business
or render any service in the Building, provided that such exclusive right
shall not operate to limit Tenant from using the Leased Premises for the
use permitted in Item J of the Basic Lease Provisions. Notwithstanding
anything contained herein to the contrary, Landlord hereby agrees not to
lease any space in the Building to another tenant whose primary business is
the development or sale of computer software without Tenant's prior written
approval. In addition, Landlord hereby agrees not to lease any space in
the Building to a governmental agency, telemarketing company, or other
tenant whose business generates substantially more walk-in traffic than
other general office tenants in similar office buildings, without Tenant's
prior written approval which shall not be unreasonably withheld. Landlord
hereby agrees to give Tenant prior written notice of any tenant to which
Landlord intends to lease space in the Building and Tenant shall have
five (5) business days after receipt of such notice to deliver to Landlord
a written objection to such tenant in accordance with the foregoing
provisions. If tenant does not respond within such five (5) business day
period, Tenant shall have waived the right to object to the lease of space
in the Building to such tenant.
E. Landlord may control the Common Areas in such manner as it deems necessary
or proper, including by way of illustration and not limitation, requiring
all persons entering or leaving the Building to identify themselves and
their business in the Building to a security guard; excluding or expelling
any peddler, solicitor or loud or unruly person from the Building; and
closing or limiting access to the Building or any part thereof, including
entrances, corridors, doors and elevators, during times of emergency,
repairs or after regular business hours.
SECTION 5.04. ACCESS TO AND INSPECTION OF THE LEASED PREMISES.
Landlord, its employees and agents and any mortgagee of the Building shall have
the right to enter any part of the Leased Premises at reasonable times and with
reasonable notice, except in the event of an emergency, in which case no notice
shall be required, for the purposes of examining or inspecting the same, showing
the same to prospective purchasers, mortgagees or tenants and making such
repairs, alterations or improvements to the Leased Premises or the Building as
Landlord may deem necessary or desirable. In the event Landlord exercises its
right hereunder to enter any secured areas of the Leased Premises, Landlord
shall be accompanied by a representative of Tenant, which representative shall
be made reasonably available to Landlord; provided, however, that no Tenant
representative shall be required in the event of an emergency. If
representatives of Tenant shall not be present to open and permit such entry
into the Leased Premises at any time when such entry is necessary or permitted
hereunder, Landlord and its employees and agents may enter the Leased Premises
by means of a master or pass key or otherwise. Landlord shall incur no
liability to Tenant for such entry, nor shall such entry constitute an eviction
of Tenant or a termination of this Lease, or entitle Tenant to any abatement of
rent therefor. In the event Landlord exercises its right to enter the Leased
Premises as provided above, Landlord hereby agrees to use commercially
reasonable efforts to minimize any interference with Tenant's business
operations.
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ARTICLE 6 - UTILITIES AND OTHER BUILDING SERVICES
SECTION 6.01. SERVICES TO BE PROVIDED. Provided Tenant is not in default,
Landlord shall furnish to Tenant, except as noted below, the following utilities
and other building services to the extent reasonably necessary for Tenant's
comfortable use and occupancy of the Leased Premises for general office use,
consistent with other Class "A" office buildings in the Indianapolis office
market, or as may be required by law or directed by governmental authority:
A. Heating, ventilation and air-conditioning between the hours of 7:00
a.m. and 6:00 p.m. Monday through Friday and 8:00 a.m. to 1:00 p.m. on
Saturday of each week except on legal holidays;
B. Subject to interruptions beyond Landlord's control, electrical current
not to exceed seven (7) xxxxx per square foot. At all times Tenant's use
of electric current shall never exceed the capacity of the feeders to the
Building or the risers or wiring installation;
C. Water in the Common Areas for lavatory and drinking purposes;
D. Two (2) passenger elevators and one (1) service elevator;
E. Cleaning and janitorial service, including trash removal for the Leased
Premises and the supplying and installing of paper towels, toilet tissue
and soap in the Common Areas on Monday through Friday of each week except
legal holidays; provided, however, Tenant shall be responsible for carpet
cleaning other than routine vacuuming;
F. Washing of windows at intervals reasonably established by Landlord;
G. Replacement of all lamps, bulbs, starters and ballasts in Building standard
lighting as required from time to time as a result of normal usage;
H. Cleaning and maintenance of the Common Areas, including the removal of
rubbish and snow;
I. Repair and maintenance to the extent specified elsewhere in this Lease; and
J. Adequate parking consisting of a minimum of 3.75 spaces per 1,000
rentable square feet of the Leased Premises (the "Parking Ratio")
available for Tenant's use.
SECTION 6.02. ADDITIONAL SERVICES. If Tenant requests any other utilities or
building services in addition to those identified above or any of the above
utilities or building services in frequency, scope, quality or quantity
substantially greater than those which Landlord determines are normally required
by other tenants in the Building for general office use, then Landlord shall use
reasonable efforts to attempt to furnish Tenant with such additional utilities
or building services. In the event Landlord is able to and does furnish such
additional utilities or building services, the costs thereof shall be borne by
Tenant, who shall reimburse Landlord monthly for the same as additional rent at
the same time Monthly Rental Installments and other additional rent is due.
If any lights, machines or equipment (including but not limited to computers)
used by Tenant in the Leased Premises materially affect the temperature
otherwise maintained by the Building's air-conditioning system or generate
substantially more heat in the Leased Premises than that which would normally be
generated by the lights and business machines typically used by other tenants in
the Building or by tenants in comparable office buildings, then Landlord shall
have the right to install any machinery or equipment which Landlord considers
reasonably necessary in order to restore the temperature balance between the
Leased Premises and the rest of the Building, including equipment which modifies
the Building's air-conditioning system. All costs expended by Landlord to
install any such machinery and equipment and any additional costs of operation
and maintenance
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occasioned thereby shall be borne by Tenant, who shall reimburse Landlord for
the same as provided in this Section 6.02.
Tenant shall not install or connect any electrical equipment other than the
business machines and equipment typically used for general office purposes by
tenants in office buildings comparable to the Building (such as personal
computers and word processors) without Landlord's prior written consent. If
Landlord determines that the electricity used by the equipment to be so
installed or connected exceeds the designed load capacity of the Building's
electrical system or is in any way incompatible therewith, then Landlord shall
have the right, as a condition to granting its consent, to make such
modifications to the electrical system or other parts of the Building or Leased
Premises, or to require Tenant to make such modifications to the equipment to be
installed or connected, as Landlord considers to be reasonably necessary before
such equipment may be so installed or connected. The cost of any such
modifications shall be borne by Tenant, who shall reimburse Landlord for the
same (or any portion thereof paid by Landlord) as provided in this Section 6.02.
SECTION 6.03. INTERRUPTION OF SERVICES. Tenant understands, acknowledges and
agrees that any one or more of the utilities or other building services
identified in Section 6.01 may be interrupted by reason of accident, emergency
or other causes beyond Landlord's control, or may be discontinued or diminished
temporarily by Landlord or other persons until certain repairs, alterations or
improvements can be made; that Landlord does not represent or warrant the
uninterrupted availability of such utilities or building services, and that any
such interruption shall not be deemed an eviction or disturbance of Tenant's
right to possession, occupancy and use of the Leased Premises or any part
thereof, or render Landlord liable to Tenant for damages by abatement of rent or
otherwise, or relieve Tenant from the obligation to perform its covenants under
this Lease.
Notwithstanding the foregoing, Landlord shall use commercially reasonable
efforts to promptly restore utility service in the event of an interruption
thereof. If the Leased Premises are rendered untenantable (meaning that Tenant
is unable to use such space in the normal course of its business) for more than
five (5) consecutive business days after notice from Tenant to Landlord that
such service has been interrupted, and provided that such restoration of service
is within Landlord's reasonable control, Minimum Annual Rent shall xxxxx on a
per diem basis for each day after such five (5) day period during which the
Leased Premises remain untenantable. In the event the Leased Premises are
rendered untenantable for more than thirty (30) consecutive days after notice
from Tenant to Landlord, and provided that such restoration of service is within
Landlord's reasonable control, Tenant shall have the right to terminate this
Lease. In the event the Leased Premises are rendered untenantable for more than
thirty (30) consecutive days after notice from Tenant to Landlord, whether or
not the restoration of service is within Landlord's reasonable control, Minimum
Annual Rent shall xxxxx on a per diem basis for each day after such thirty (30)
day period during which the Leased Premises remain untenantable. In the event
the Leased Premises are rendered untenantable for more than sixty (60)
consecutive days after notice from Tenant to Landlord, whether or not the
restoration of service is within Landlord's reasonable control, Tenant shall
have the right to terminate this Lease. Upon any such termination, Tenant shall
surrender the Leased Premises to Landlord in accordance with the terms of this
Lease and each party shall be released from further liability hereunder;
provided, however, that such termination shall not affect any right or
obligation arising prior to termination or which survives termination of the
Lease.
ARTICLE 7 - REPAIRS, MAINTENANCE, ALTERATIONS, IMPROVEMENTS
AND FIXTURES
SECTION 7.01. REPAIR AND MAINTENANCE OF BUILDING. Subject to Section 7.02 and
except for any repairs made necessary by the negligence, misuse, or default of
Tenant, its employees, agents, customers and invitees, Landlord shall (i)
maintain in good working order all mechanical and electrical systems in the
Building throughout the Lease Term; and (ii) make all necessary repairs to the
exterior walls, roof and foundation, exterior doors, windows, corridors and
other common areas of the Building and the parking lot and driveways associated
with the Building, and Landlord shall keep the Building in a safe, clean and
neat condition and use reasonable efforts to keep all equipment used in common
with other tenants, such as elevators, plumbing, heating, air conditioning and
similar equipment, in good condition and repair. Except as provided in Article
8 and Article 10 hereof, there shall be no abatement of rent and no liability of
Landlord by reason of any injury to or interference with Tenant's
19
business arising from the making of any repairs, alterations or improvements
in or to any portion of the Building or the Leased Premises or in or to any
fixtures, appurtenances and equipment therein or thereon.
SECTION 7.02. REPAIR AND MAINTENANCE OF LEASED PREMISES. Landlord shall keep
and maintain the Leased Premises in good order, condition and repair. Except
for ordinary wear and tear and damage which Tenant is not obligated to repair as
provided elsewhere in this Lease or damage caused by Landlord or its employees
or agents, the cost of all repairs and maintenance to the Leased Premises shall
be borne by Tenant, who shall be separately billed and shall reimburse Landlord
for the same as additional rent, or as a part of Operating Expenses.
SECTION 7.03. ALTERATIONS OR IMPROVEMENTS. Tenant shall not make or permit
alterations of or upon any part of the Leased Premises or additions to the
Leased Premises without first obtaining the written consent of Landlord. Tenant
shall at its sole expense and cost, ensure that all permitted alterations and
additions which are made or necessitated thereby (whether inside or outside the
Leased Premises) shall be made in accordance with all applicable laws, rules,
codes, ordinances and regulations in a good and workmanlike manner and in
quality equal to or better than the original construction of the Leased Premises
or Building, and Tenant shall comply with such requirements as Landlord
considers necessary or desirable. Landlord's consent to any such alterations or
additions shall create no responsibility or liability on the part of Landlord
for the completeness, design, sufficiency, or compliance with laws, rules,
codes, ordinances, or regulations of such alterations or additions or the plans,
specifications or working drawings therefor. Tenant shall promptly pay all
costs attributable to such alterations and additions and shall promptly repair
any damage to the Leased Premises, Building or Common Areas caused by or
resulting from such alterations and additions. Any such alterations and
additions shall remain for the benefit of Landlord, provided, however, that
Landlord may elect upon fifteen (15) days prior written notice to Tenant to
require that Tenant, at its expense, remove at the expiration or earlier
termination of this Lease all or a portion of the alterations or additions made
by Tenant and repair any damage caused by such removal. Tenant's obligations
under this Section shall survive the expiration or earlier termination of this
Lease. Notwithstanding the foregoing, Tenant shall have the right, without
Landlord's consent, and in compliance with all other provisions of this Section
and the Lease, to make any non-structural alteration to the Leased Premises, the
aggregate cost of which does not exceed Twenty-five Thousand Dollars
($25,000.00) for any such alteration project, provided, however, that Tenant may
not exercise this right more than three (3) times during any Lease year and
further provided that Tenant shall give Landlord prior written notice of any
such alteration, along with copies of all plans and specifications relating
thereto. Non-structural alteration shall be defined as any aesthetic alteration
which does not affect the structure or systems of the Building or the Leased
Premises, such as carpet, paint or wall covering.
Tenant shall indemnify and save harmless Landlord from all costs, loss or
expense in connection with any construction or installation of any alteration by
Tenant under this Section. No person shall be entitled to any lien directly or
indirectly derived through or under Tenant or through or by virtue of any act or
omission of Tenant upon the Leased Premises for any improvements or fixtures
made thereon or installed therein or for or on account of any labor or material
furnished to the Leased Premises or for or on account of any matter or thing
whatsoever; and nothing in this Lease contained shall be construed to constitute
a consent by Landlord to the creation of any lien. In the event any lien is
filed against the Leased Premises, or any part thereof, for work claimed to have
been done for or material claimed to have been furnished to Tenant, Tenant shall
cause such lien to be discharged of record within thirty-five (35) days after
filing by bonding or as provided or required by law or in any other lawful
manner. Tenant shall indemnify and save harmless Landlord from all costs,
losses, expenses, and attorneys' fees in connection with any such lien.
SECTION 7.04. TRADE FIXTURES. Any trade fixtures installed on the Leased
Premises by Tenant at its own expense, such as movable partitions, counters,
shelving, showcases, mirrors and the like, may, and, at the request of Landlord,
shall be removed on the expiration or earlier termination of this Lease,
provided that Tenant is not then in default, that Tenant bears the cost of such
removal, and further that Tenant repairs at its own expense any and all damage
to the Leased Premises resulting from such removal. If Tenant fails to remove
any and all such trade fixtures from the Leased Premises on the expiration or
earlier termination of this Lease, all such trade fixtures shall become the
property of Landlord unless Landlord elects to require their removal, in which
case Tenant shall, at its expense, promptly remove the same and restore the
Leased Premises to their prior condition.
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ARTICLE 8 - FIRE OR OTHER CASUALTY; CASUALTY INSURANCE
SECTION 8.01. SUBSTANTIAL DESTRUCTION OF THE BUILDING OR THE LEASED PREMISES.
If either the Building or the Leased Premises should be substantially destroyed
or damaged (which as used herein, means destruction or material damage to at
least 50% of the Building or the Leased Premises) by fire or other casualty,
then Landlord or Tenant may, at its option, terminate this Lease by giving
written notice of such termination to the other party within thirty (30) days
after the date of such casualty. In such event, rent shall be apportioned to
and shall cease as of the date of such casualty. If neither party exercises
this option, then the Leased Premises shall be reconstructed and restored, at
Landlord's expense, to substantially the same condition as they were prior to
the casualty; provided however, that Landlord's obligation hereunder shall be
limited to the reconstruction of such of the tenant finish improvements as were
originally required to be made by Landlord in accordance with EXHIBIT B-2,
including any excess tenant finish improvements paid for and installed by
Landlord at the time of the original build-out of the Leased Premises; and
further provided that if Tenant has made any additional improvements pursuant to
Section 7.03, Tenant shall reimburse Landlord for the cost of reconstructing the
same. In the event of such reconstruction, rent shall be abated from the date
of the casualty until Substantial Completion of the reconstruction repairs; and
this Lease shall continue in full force and effect for the balance of the Term.
In the event neither Landlord nor Tenant exercises its right to terminate
hereunder, Landlord shall use due diligence in completing such reconstruction.
If Landlord fails to substantially complete such reconstruction within one
hundred eighty (180) days from the date of casualty, Tenant shall have the
option to terminate this Lease by delivering to Landlord ten (10) days prior
written notice thereof. Upon such termination, Tenant shall surrender the
Leased Premises to Landlord in accordance with the terms of this Lease and each
party shall be released from further liability hereunder; provided, however,
that such termination shall not affect any right or obligation arising prior to
termination or which survives termination of the Lease.
SECTION 8.02. PARTIAL DESTRUCTION OF THE LEASED PREMISES. If the Leased
Premises should be damaged by fire or other casualty insured or required to be
insured under the fire and extended coverage insurance provided by Landlord in
accordance with Section 8.03 hereof, but not substantially destroyed or damaged
to the extent provided in Section 8.01, then such damaged part of the Leased
Premises shall be reconstructed and restored, at Landlord's expense, to
substantially the same condition as it was prior to the casualty; provided
however, that Landlord's obligation hereunder shall be limited to the
reconstruction of such of the tenant finish improvements as were originally
required to be made by Landlord in accordance with EXHIBIT B-2, including any
excess tenant finish improvements paid for and installed by Landlord at the time
of the original build-out of the Leased Premises; and further provided that if
Tenant has made any additional improvements pursuant to Section 7.03, Tenant
shall reimburse Landlord for the cost of reconstructing the same.
Notwithstanding the foregoing, in the event any mortgagee has superior rights to
any insurance proceeds payable upon the occurrence of any such casualty and such
mortgagee does not make such proceeds available to Landlord for the
reconstruction, Landlord shall not be obligated to reconstruct the Leased
Premises as provided hereunder and either party shall have the right to
terminate this Lease upon ten (10) days prior written notice to the other party.
Upon such termination, both parties shall be released from all liability
hereunder, except for any right or obligation arising prior to the date of such
termination or which survives termination hereof.
Landlord shall notify Tenant in writing within thirty (30) days of the date of
casualty whether or not Landlord intends to reconstruct the Leased Premises
based upon the availability of such insurance proceeds. Landlord further agrees
that in the event Landlord enters into a mortgage secured by the Building,
Landlord shall use commercially reasonable efforts in negotiating any such
mortgage documents to eliminate or limit mortgagee's right to restrict the use
of insurance proceeds for reconstructing the Leased Premises in event of
casualty as provided hereunder.
In the event of such casualty, if the damage is expected to prevent Tenant from
carrying on its business in the Leased Premises to an extent exceeding 30% of
its normal business activity, rent shall be abated in the proportion which the
approximate area of the damaged part bears to the total area in the Leased
Premises from the date of the casualty until Substantial Completion of the
reconstruction repairs; and this Lease shall continue in full force and effect
for the balance of the Term. Landlord shall use due diligence in completing
such reconstruction repairs, but in the event Landlord fails to complete the
same within one hundred eighty (180) days from the date of the
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casualty, Tenant may, at its option, terminate this Lease by giving Landlord
written notice of such termination, whereupon both parties shall be released
from all further obligations and liability hereunder; provided, however, that
such termination shall not affect any right or obligation arising prior to
termination or which survives termination of the Lease.
SECTION 8.03. CASUALTY INSURANCE. Landlord shall at all times during the Lease
Term carry a policy of insurance which insures the Building, including the
Leased Premises, for full replacement value, against loss or damage by fire or
other casualty (namely, the perils against which insurance is afforded by a
standard fire insurance policy and extended coverage endorsement); provided,
however, that Landlord shall not be responsible for, and shall not be obligated
to insure against, any loss of or damage to any personal property of Tenant or
which Tenant may have in the Building or the Leased Premises or any trade
fixtures installed by or paid for by Tenant on the Leased Premises or any
additional improvements which Tenant may construct on the Leased Premises, and
Landlord shall not be liable for any loss or damage to such property, regardless
of cause, including the negligence of Landlord and its employees, agents,
customers and invitees. If any alterations or improvements made by Tenant
pursuant to Section 7.03 result in an increase in the premiums charged during
the Lease Term on the casualty insurance carried by Landlord on the Building,
then the cost of such increase in insurance premiums shall be borne by Tenant,
who shall reimburse Landlord for the same as additional rent after being
separately billed therefor.
SECTION 8.04. WAIVER OF SUBROGATION. Landlord and Tenant hereby release each
other and each other's employees, agents, customers and invitees from any and
all liability for any loss of or damage or injury to person or property
occurring in, on or about or to the Leased Premises, the Building or personal
property within the Building by reason of fire or other casualty or any other
risk which is or which is required to be insured against under this Lease,
regardless of cause, including the negligence of Landlord or Tenant and their
respective employees, agents, customers and invitees, and agree that all
insurance carried by either of them shall contain a clause whereby the insurer
waives its right of subrogation against the other party. Because the provisions
of this Section 8.04 are intended to preclude the assignment of any claim
mentioned herein by way of subrogation or otherwise to an insurer or any other
person, each party to this Lease shall give to each insurance company which has
issued to it one or more policies of fire and extended coverage insurance notice
of the provisions of this Section 8.04 and have such insurance policies properly
endorsed, if necessary, to prevent the invalidation of such insurance by reason
of the provisions of this Section 8.04.
ARTICLE 9 - GENERAL PUBLIC LIABILITY, INDEMNIFICATION AND INSURANCE
SECTION 9.01. TENANT'S RESPONSIBILITY. Tenant shall assume the risk of, be
responsible for, have the obligation to insure against, release Landlord from,
and indemnify Landlord and hold it harmless from any and all liability for any
loss of or damage or injury to any person (including death resulting therefrom)
or property occurring in, on or about the Leased Premises, regardless of cause,
except for any loss or damage from fire or other casualty as provided in Section
8.03 and except for that caused directly by the sole negligence of Landlord and
its employees, agents, customers and invitees. Tenant's obligation to indemnify
Landlord hereunder shall include the duty to defend against any claims asserted
by reason of such loss, damage or injury and to pay any judgments, settlements,
costs, fees and expenses, including attorneys' fees, incurred in connection
therewith. Notwithstanding anything herein to the contrary, Tenant shall bear
the risk of any loss or damage to its property as provided in Section 8.03 so
long as such loss is insured or required to be insured hereunder.
SECTION 9.02. TENANT'S INSURANCE. Tenant, in order to enable it to meet its
obligation to insure against the liabilities specified in this Lease, shall at
all times during the Lease Term carry, at its own expense, one or more policies
of general public liability and property damage insurance, issued by one or more
insurance companies reasonably acceptable to Landlord, with the following
minimum coverages:
A. Worker's Compensation -- minimum statutory amount.
B. Commercial General - Not less than $1,000,000
Liability Insurance, Combined Single Limit
including Blanket, Con- for both bodily injury
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tractual Liability, and property damage.
Broad Form Property
Damage, Personal Injury,
Completed Operations,
Products Liability,
Fire Damage.
C. Fire and Extended Coverage, Vandalism and Malicious Mischief, and Sprinkler
Leakage insurance, for the full cost of replacement of Tenant's property.
Such insurance policy or policies shall protect Tenant and Landlord as their
interests may appear, naming Landlord and Landlord's managing agent and
mortgagee as additional insureds and shall provide that they may not be
cancelled on less than thirty (30) days prior written notice to Landlord.
Tenant shall furnish Landlord with Certificates of Insurance evidencing such
coverage within thirty (30) days after a request to do so. Should Tenant fail
to carry such insurance and furnish Landlord with such Certificates of
Insurance, Landlord shall have the right, but not the obligation, to obtain such
insurance and collect the cost thereof from Tenant as additional rent.
SECTION 9.03. LANDLORD'S RESPONSIBILITY. Landlord shall assume the risk of, be
responsible for, have the obligation to insure against, release Tenant from, and
indemnify Tenant and hold it harmless from, any and all liability for any loss
of or damage or injury to person (including death resulting therefrom) or
property (other than Tenant's property as provided in Section 8.03) occurring
in, on or about the Common Areas, regardless of cause, except for that caused by
the sole negligence of Tenant and its employees, agents, customers and invitees.
Landlord's obligation to indemnify Tenant hereunder shall include the duty to
defend against any claims asserted by reason of such loss, damage or injury and
to pay any judgments, settlements, costs, fees and expenses, including
attorneys' fees, incurred in connection therewith.
ARTICLE 10 - EMINENT DOMAIN
If the whole or any part of the Leased Premises or Building, including parking
areas, shall be taken for public or quasi-public use by a governmental or other
authority having the power of eminent domain or shall be conveyed to such
authority in lieu of such taking, and if such taking or conveyance shall cause
the remaining part of the Leased Premises to be untenantable and inadequate for
use by Tenant for the purpose for which they were leased, then either Landlord
or Tenant may, at their respective option, terminate this Lease as of the date
Tenant is required to surrender possession of the Leased Premises by giving
written notice of such termination to the other party. If a part of the Leased
Premises shall be taken or conveyed but the remaining part is tenantable and
adequate for Tenant's use, then this Lease shall be terminated as to the part
taken or conveyed as of the date Tenant surrenders possession; Landlord shall
make such repairs, alterations and improvements as may be necessary to render
the part not taken or conveyed tenantable to the extent the condemnation award
proceeds received by Landlord are sufficient therefor; and the rent shall be
reduced in proportion to the part of the Leased Premises so taken or conveyed.
All compensation awarded for such taking or conveyance shall be the property of
Landlord without any deduction therefrom for any present or future estate of
Tenant, and Tenant hereby assigns to Landlord all its right, title and interest
in and to any such award. However, Tenant shall have the right to recover from
such authority, but not from Landlord, such compensation as may be awarded to
Tenant on account of moving and relocation expenses and depreciation to and
removal of Tenant's property.
ARTICLE 11 - LIENS
If, because of any act or omission of Tenant or any person claiming by, through,
or under Tenant, any mechanic's lien or other lien shall be filed against the
Leased Premises or the Building or against other property of Landlord (whether
or not such lien is valid or enforceable as such), Tenant shall, at its own
expense, cause the same to be discharged of record or bonded within thirty-five
(35) days after the date of filing thereof, and shall also indemnify Landlord
and hold it harmless from any and all claims, losses, damages, judgments,
settlements, costs and expenses, including attorneys' fees, resulting therefrom
or by reason thereof. If Tenant fails to discharge or bond over any such lien,
Landlord may, but shall not be obligated to, pay the claim upon which such lien
is based
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so as to have such lien released of record; and, if Landlord does so,
then Tenant shall pay to Landlord, as additional rent, upon demand, the amount
of such claim, plus all other costs and expenses incurred in connection
therewith, plus interest thereon at the rate of twelve percent (12%) per annum
until paid.
ARTICLE 12 - RENTAL, PERSONAL PROPERTY AND OTHER TAXES
Tenant shall pay before delinquency any and all taxes, assessments, fees or
charges, including any sales, gross income, rental, business occupation or other
taxes, levied or imposed upon Tenant's business operations in the Leased
Premises and any personal property or similar taxes levied or imposed upon
Tenant's trade fixtures, leasehold improvements or personal property located
within the Leased Premises. In the event any such taxes, assessments, fees or
charges are charged to the account of, or are levied or imposed upon the
property of Landlord, Tenant shall reimburse Landlord for the same as additional
rent. Notwithstanding the foregoing, Tenant shall have the right to contest in
good faith any such item and to defer payment until after Tenant's liability
therefor is finally determined.
If any tenant finish improvements, trade fixtures, alterations or improvements
or business machines and equipment located in, on or about the Leased Premises,
regardless of whether they are installed or paid for by Landlord or Tenant and
whether or not they are affixed to and become a part of the realty and the
property of Landlord, are assessed for real property tax purposes at a valuation
higher than that at which other such property in other leased space in the
Building is assessed, then Tenant shall reimburse Landlord as additional rent
for the amount of real property taxes shown on the appropriate county official's
records as having been levied upon the Building or other property of Landlord by
reason of such excess assessed valuation.
ARTICLE 13 - ASSIGNMENT AND SUBLETTING
Tenant may not assign this Lease or sublet the Leased Premises or any part
thereof, without the prior written consent of Landlord, which consent shall not
be unreasonably withheld; and any attempted assignment or subletting without
such consent shall be invalid. In the event of a permitted assignment or
subletting, Tenant shall nevertheless at all times remain fully responsible and
liable for the payment of rent and the performance and observance of all of
Tenant's other obligations under the terms, conditions and covenants of this
Lease. No assignment or subletting of the Leased Premises or any part thereof
shall be binding upon Landlord unless such assignee or subtenant shall deliver
to Landlord an instrument (in recordable form, if requested) containing an
agreement of assumption of all of Tenant's obligations under this Lease. Upon
the occurrence of an event of default, if all or any part of the Leased Premises
are then assigned or sublet, Landlord, in addition to any other remedies
provided by this Lease or by law, may, at its option, collect directly from the
assignee or subtenant all rent becoming due to Landlord by reason of the
assignment or subletting. Any collection by Landlord from the assignee or
subtenant shall not be construed to constitute a waiver or release of Tenant
from the further performance of its obligations under this Lease or the making
of a new lease with such assignee or subtenant.
Landlord may, in its reasonable discretion, refuse to give its consent to any
proposed assignment or subletting for any reason, including, but not limited to
Landlord's determination that its interest in the Lease or the Leased Premises
would be adversely affected by (i) the financial condition, creditworthiness or
business reputation of the proposed assignee or subtenant, or (ii) the proposed
use of the Leased Premises by, or business of, the proposed assignee or
subtenant. If Landlord refuses to give its consent to any proposed assignment
or subletting, Landlord may, at its option, within thirty (30) days after
receiving notice of the proposal, terminate this Lease by giving Tenant thirty
(30) days prior written notice of such termination, whereupon each party shall
be released from all further obligations and liability hereunder.
All reasonable costs incurred by Landlord in connection with any request for
consent to a proposed assignment or sublease, including costs of investigation
and attorneys' fees, shall be paid by Tenant upon demand as a further condition
of any consent which may be given.
ARTICLE 14 - TRANSFERS BY LANDLORD
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SECTION 14.01. SALE AND CONVEYANCE OF THE BUILDING. Landlord shall have the
right to sell and convey the Building at any time during the Lease Term, subject
only to the rights of Tenant hereunder; and such sale and conveyance shall
operate to release Landlord from liability hereunder after the date of such
conveyance as provided in Section 15.04, except with respect to claims arising
prior to the date of such conveyance.
SECTION 14.02. SUBORDINATION. Tenant's rights under this Lease are and shall
always be subordinate to the operation and effect of any mortgage, deed of
trust, ground lease or master lease now or hereafter placed upon or governing
the Building or the tract of land described in EXHIBIT A-1 hereto or any part or
parts thereof by Landlord. This clause shall be self-operative, and no further
instrument of subordination shall be required. In confirmation thereof, Tenant
shall execute such further assurance as may be required. Any mortgagee, ground
lessor or trustee under any such mortgage, deed of trust, ground lease or master
lease may elect that this Lease shall have priority over its mortgage, deed of
trust, ground lease or master lease; and upon notification to Tenant of such
election by such mortgagee, ground lessor or trustee, this Lease shall be deemed
to have priority over said mortgage, deed of trust, ground lease or master lease
whether this Lease is dated prior to or subsequent to the date of such mortgage,
deed of trust, ground lease or master lease. Notwithstanding the foregoing, no
default by Landlord under any such mortgage, deed of trust, ground lease or
master lease shall affect Tenant's rights hereunder so long as Tenant is not in
default under this Lease. Tenant hereby attorns to any successor to Landlord's
interest in this Lease and shall recognize such successor as Landlord hereunder.
Tenant agrees to execute, within ten (10) days after Landlord's request, all
instruments as may be reasonably required by such successor to confirm such
attornment.
ARTICLE 15 - DEFAULTS AND REMEDIES
SECTION 15.01. DEFAULTS BY TENANT. The occurrence of any one or more of the
following events shall be a default under and breach of this Lease by Tenant:
A. Tenant shall fail to pay any Monthly Rental Installment of Minimum
Annual Rent or the Annual Rental Adjustment within ten (10) days
after the same shall be due and payable, or any other amounts due
Landlord from Tenant as additional rent or otherwise including
any amounts owed by Tenant for tenant finish improvements within
thirty (30) days after the same shall be due and payable.
In the event of a default under subparagraph (A) above, Landlord shall
provide Tenant with written notice of such default two (2) times
during each successive twelve (12) month period of the Lease Term
and Tenant shall have an additional five (5) days to cure such
default before Landlord shall declare a default or exercise its
remedies herein.
B. Tenant shall fail to perform or observe any term, condition, covenant
or obligation required to be performed or observed by it under
this Lease for a period of thirty (30) days after notice thereof
from Landlord; provided, however, that if the term, condition,
covenant or obligation to be performed by Tenant is of such
nature that the same cannot reasonably be performed within such
thirty-day period, such default shall be deemed to have been
cured if Tenant commences such performance within said thirty-day
period and thereafter diligently undertakes to complete the same
and does so complete the required action within a reasonable
time.
C. A trustee or receiver shall be appointed to take possession of
substantially all of Tenant's assets in, on or about the Leased
Premises or of Tenant's interest in this Lease (and Tenant does
not regain possession within sixty (60) days after such
appointment); Tenant makes an assignment for the benefit of
creditors; or substantially all of Tenant's assets in, on or
about the Leased Premises or Tenant's interest in this Lease are
attached or levied under execution (and Tenant does not discharge
the same within sixty (60) days thereafter).
D. A petition in bankruptcy, insolvency, or for reorganization or
arrangement is filed by or against Tenant pursuant to any federal
or state statute (and, with respect to any such petition filed
against it, Tenant fails to secure a stay or discharge thereof
within sixty (60) days after the filing of the same).
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SECTION 15.02. REMEDIES OF LANDLORD. Upon the occurrence of any event of
default set forth in Section 15.01, Landlord shall have the following rights and
remedies, in addition to those allowed by law, any one or more of which may be
exercised without further notice to or demand upon Tenant:
A. Landlord may re-enter the Leased Premises and cure any default of
Tenant, in which event Tenant shall reimburse Landlord as
additional rent for any costs and expenses which Landlord may
incur to cure such default; and Landlord shall not be liable to
Tenant for any loss or damage which Tenant may sustain by reason
of Landlord's action, regardless of whether caused by Landlord's
negligence or otherwise.
B. 1. Landlord may terminate this Lease as of the date of such default,
in which event (i) neither Tenant nor any person claiming
under or through Tenant shall thereafter be entitled to
possession of the Leased Premises, and Tenant shall
immediately thereafter surrender the Leased Premises to
Landlord; (ii) Landlord may re-enter the Leased Premises and
dispossess Tenant or any other occupants of the Leased
Premises by any means permitted by law, and may remove their
effects, without prejudice to any other remedy which
Landlord may have for possession or arrearages in rent; and
(iii) notwithstanding the termination of this Lease,
Landlord shall be entitled to recover from Tenant the value
at the time of such termination of the amount of rent and
other charges equivalent to rent reserved in this Lease for
the remainder of the Lease Term, less the net amount of such
rent and other charges for the remainder of the Lease Term
which Tenant proves could reasonably be recovered by
Landlord from reletting the Leased Premises under then-
current and reasonably anticipated market conditions,
together with all loss or damage which Landlord may sustain
by reason of such termination, it being expressly understood
and agreed that the liabilities and remedies specified in
this subsection B 1 of Section 15.02 shall survive the
termination of this Lease; or
2. Landlord may, without terminating this Lease, re-enter the Leased
Premises and re-let all or any part of the Leased Premises
for a term different from that which would otherwise have
constituted the balance of the Lease Term and for rent and
on terms and conditions different from those contained
herein, whereupon Tenant shall be obligated to pay to
Landlord as liquidated damages the difference between the
rent provided for herein and that provided for in any lease
covering a subsequent re-letting of the Leased Premises, for
the period which would otherwise have constituted the
balance of the Lease Term, together with all of Landlord's
reasonable costs and expenses for preparing the Leased
Premises for re-letting, including without limitation, all
repairs, tenant finish improvements, brokers' and attorneys'
fees, and all loss or damage which Landlord may sustain by
reason of such re-entry and re-letting.
C. Landlord may xxx for injunctive relief or to recover damages for any
loss resulting from the breach.
SECTION 15.03. DEFAULT BY LANDLORD AND REMEDIES OF TENANT. It shall be a
default under and breach of this Lease by Landlord if it shall fail to perform
or observe any term, condition, covenant or obligation required to be performed
or observed by it under this Lease for a period of thirty (30) days after notice
thereof from Tenant; provided, however, that if the term, condition, covenant or
obligation to be performed by Landlord is of such nature that the same cannot
reasonably be performed within such thirty-day period, such default shall be
deemed to have been cured if Landlord commences such performance within said
thirty-day period and thereafter diligently undertakes to complete the same.
Upon the occurrence of any such default, Tenant may xxx for injunctive relief or
to recover damages for any loss resulting from the breach, but Tenant shall not
be entitled to terminate this Lease or withhold or xxxxx any rent due hereunder,
except as otherwise provided in this Lease.
SECTION 15.04. LIMITATION OF LANDLORD'S LIABILITY. If Landlord shall fail to
perform or observe any term, condition, covenant or obligation required to be
performed or observed by it under this Lease as provided in Section 15.03 and if
Tenant shall, as a consequence thereof, recover a money judgment against
Landlord, Tenant agrees that it shall look solely to Landlord's right, title and
interest in and to the Building including rents and net proceeds of any sale of
the Building (subject to prior rights of any mortgagee) for the collection of
such judgment;
26
and Tenant further agrees that no other assets of Landlord shall be subject to
levy, execution or other process for the satisfaction of Tenant's judgment and
that Landlord shall not be liable for any deficiency.
The references to "Landlord" in this Lease shall be limited to mean and include
only the owner or owners, at the time, of the fee simple interest in the
Building. In the event of a sale or transfer of such interest (except a
mortgage or other transfer as security for a debt), the "Landlord" named herein,
or, in the case of a subsequent transfer, the transferor, shall, after the date
of such transfer, be automatically released from all liability for the
performance or observance of any term, condition, covenant or obligation
required to be performed or observed by Landlord hereunder; and the transferee
shall be deemed to have assumed all of such terms, conditions, covenants and
obligations accruing after the date of transfer.
SECTION 15.05. NON-WAIVER OF DEFAULTS. The failure or delay by either party
hereto to exercise or enforce at any time any of the rights or remedies or other
provisions of this Lease shall not be construed to be a waiver thereof, nor
affect the validity of any part of this Lease or the right of either party
thereafter to exercise or enforce each and every such right or remedy or other
provision. No waiver of any default and breach of the Lease shall be deemed to
be a waiver of any other default and breach. The receipt by Landlord of less
than the full rent due shall not be construed to be other than a payment on
account of rent then due, nor shall any statement on Tenant's check or any
letter accompanying Tenant's check be deemed an accord and satisfaction, and
Landlord may accept such payment without prejudice to Landlord's right to
recover the balance of the rent due or to pursue any other remedies provided in
this Lease. No act or omission by Landlord or its employees or agents during
the Lease Term shall be deemed an acceptance of a surrender of the Leased
Premises, and no agreement to accept such a surrender shall be valid unless in
writing and signed by Landlord.
SECTION 15.06. ATTORNEYS' FEES. In the event either party defaults in the
performance or observance of any of the terms, conditions, covenants or
obligations contained in this Lease and the non-defaulting party employs
attorneys (including any in-house attorneys) to enforce all or any part of this
Lease, including in the case of Landlord to collect any rent due or to become
due or to recover possession of the Leased Premises, the defaulting party agrees
to reimburse the non-defaulting party for the attorneys' fees incurred thereby
whether or not suit is actually filed.
ARTICLE 16 - LANDLORD'S RIGHT TO RELOCATE TENANT
Intentionally Omitted.
ARTICLE 17 - NOTICE AND PLACE OF PAYMENT
SECTION 17.01. NOTICES. Any notice required or permitted to be given under
this Lease or by law shall be deemed to have been given if it is written and
delivered in person or by a recognized overnight delivery service obtaining a
confirmation of delivery, or mailed by Registered or Certified mail, postage
prepaid, to the party who is to receive such notice at the address specified in
Item L of the Basic Lease Provisions. When so mailed, the notice shall be
deemed to have been given as of the date it was mailed. The address specified
in Item L of the Basic Lease Provisions may be changed by giving written notice
thereof to the other party.
SECTION 17.02. PLACE OF PAYMENT. All rent and other payments required to be
made by Tenant to Landlord shall be delivered or mailed to Landlord's management
agent at the address specified in Item L of the Basic Lease Provisions or any
other address Landlord may specify from time to time by written notice given to
Tenant.
ARTICLE 18 - MISCELLANEOUS GENERAL PROVISIONS
SECTION 18.01. CONDITION OF PREMISES. Tenant acknowledges that neither
Landlord nor any agent of Landlord has made any representation or warranty with
respect to the Leased Premises or the Building or with respect to the
suitability or condition of any part of the Building for the conduct of Tenant's
business except as provided in this Lease.
27
SECTION 18.02. INSOLVENCY OR BANKRUPTCY. In no event shall this Lease be
assigned or assignable by operation of law, and in no event shall this Lease be
an asset of Tenant in any receivership, bankruptcy, insolvency, or
reorganization proceeding.
SECTION 18.03. COMMON AREAS. The term "Common Areas," as used in this Lease,
refers to the areas of the Building and the land described in EXHIBIT A-1 which
are designed for use in common by all tenants of the Building and their
respective employees, agents, customers, invitees and others, and includes, by
way of illustration and not limitation, entrances and exits, hallways and
stairwells, elevators, restrooms, sidewalks, driveways, parking areas,
landscaped areas and other areas as may be designated by Landlord as part of the
Common Areas of the Building. Tenant shall have the non-exclusive right, in
common with others, to the use of the Common Areas, subject to such
nondiscriminatory rules and regulations as may be adopted by Landlord including
those set forth in Section 5.02 and EXHIBIT C of this Lease.
SECTION 18.04. CHOICE OF LAW. This Lease shall be governed by and construed
pursuant to the laws of the State of Indiana.
SECTION 18.05. SUCCESSORS AND ASSIGNS. Except as otherwise provided in this
Lease, all of the covenants, conditions and provisions of this Lease shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors and assigns.
SECTION 18.06. NAME. Tenant shall not, without the written consent of
Landlord, use the name of the Building or the development for any purpose other
than as the address of the business to be conducted by Tenant in the Leased
Premises, and in no event shall Tenant acquire any rights in or to such names.
SECTION 18.07. EXAMINATION OF LEASE. Submission of this instrument for
examination or signature to Tenant does not constitute a reservation of or
option for Lease, and it is not effective as a Lease or otherwise until
execution by and delivery to both Landlord and Tenant.
SECTION 18.08. TIME. Time is of the essence of this Lease and each and all of
its provisions.
SECTION 18.09. DEFINED TERMS AND MARGINAL HEADINGS. The words "Landlord" and
"Tenant" as used herein shall include the plural as well as the singular. If
more than one person is named as Tenant, the obligations of such persons are
joint and several. The marginal headings and titles to the articles of this
Lease are not a part of this Lease and shall have no effect upon the
construction or interpretation of any part hereof.
SECTION 18.10. PRIOR AGREEMENTS. This Lease and the exhibits attached hereto
and the letter of understanding executed pursuant to Section 2.03 hereof contain
all of the agreements of the parties hereto with respect to any matter covered
or mentioned in this Lease, and no prior agreement, understanding or
representation pertaining to any such matter shall be effective for any purpose.
No provision of this Lease may be amended or added to except by an agreement in
writing signed by the parties hereto or their respective successors in interest.
SECTION 18.11. PAYMENT OF AND INDEMNIFICATION FOR LEASING COMMISSIONS. The
parties hereby acknowledge, represent and warrant that the only real estate
broker or brokers involved in the negotiation and execution of this Lease is
that, or are those named in Item I of the Basic Lease Provisions; that Landlord
is obligated to pay to it or them or for their benefit a leasing commission
under its Leasing Agreement with Duke Realty Limited Partnership; and that no
other broker or person is entitled to any leasing commission or compensation as
a result of the negotiation or execution of this Lease. Each party shall
indemnify the other party and hold it harmless from any and all liability for
the breach of any such representation and warranty on its part and shall pay any
compensation to any other broker or person who may be deemed or held to be
entitled thereto. Landlord will not pay a broker commission to any broker
representing Tenant for any extensions of the Lease Term and/or expansions of
the Leased Premises outside the original term of the Lease.
Landlord hereby agrees to pay a brokerage fee in the amount of Two Hundred
Thirty Thousand Dollars ($230,000.00) to Meridian Real Estate Services within
fifteen (15) days of the later to occur of (i) Tenant's
28
approval of the Shell Plans and Specifications as provided in Section 2.02.A.;
or (ii) Landlord's completion of the acquisition of the Land as provided in
Section 20.09. The brokerage fee is in consideration of Tenant leasing the
Leased Premises from Landlord for the full term of this Lease.
SECTION 18.12. SEVERABILITY OF INVALID PROVISIONS. If any provision of this
Lease shall be held to be invalid, void or unenforceable, the remaining
provisions hereof shall not be affected or impaired, and such remaining
provisions shall remain in full force and effect.
SECTION 18.13. DEFINITION OF THE RELATIONSHIP BETWEEN THE PARTIES. Landlord
shall not, by virtue of the execution of this Lease or the leasing of the Leased
Premises to Tenant, become or be deemed a partner of or joint venturer with
Tenant in the conduct of Tenant's business in the Leased Premises or otherwise.
SECTION 18.14. ESTOPPEL CERTIFICATE. Tenant shall, within ten (10) days
following receipt of a written request from Landlord, execute, acknowledge and
deliver to Landlord or to any lender, purchaser or prospective lender or
purchaser designated by Landlord a written statement, in the form attached
hereto as EXHIBIT D or in such other form as Landlord may reasonably request,
certifying (i) that this Lease is in full force and effect and unmodified (or,
if modified, stating the nature of such modification), (ii) the date to which
rent has been paid, (iii) that there are not, to Tenant's knowledge, any uncured
defaults (or specifying such defaults if any are claimed), and (iv) any other
matters or state of facts reasonably required respecting the Lease or Tenant's
occupancy of the Leased Premises. Any such statement may be relied upon by any
prospective purchaser or mortgagee of all or any part of the Building. Tenant's
failure to deliver such statement within such period shall be conclusive upon
Tenant that this Lease is in full force and effect and unmodified, and that
there are no uncured defaults in Landlord's performance hereunder.
SECTION 18.15. FORCE MAJEURE. Notwithstanding any other provision contained
in this Lease or elsewhere, Landlord and Tenant each shall not be chargeable
with, liable for, or responsible to the other party for anything or in any
amount for any failure to perform or delay caused by fire, earthquake,
explosion, flood, hurricane, tornado, the elements, acts of God or the public
enemy, action, restrictions, limitations, or interference of governmental
authorities or agents, war, invasion, insurrection, rebellion, riots, strikes or
lockouts or any other cause whether similar or dissimilar to the foregoing which
is beyond the reasonable control of such party and any such failure or delay due
to said causes or any of them shall not be deemed a breach of or default in the
performance of this Lease provided that either such party shall have used
reasonable efforts to minimize the impact of any such event. Notwithstanding
the foregoing, the foregoing force majeure events shall not relieve Tenant of
its obligation to pay rent or any other sums due pursuant to the terms hereof.
ARTICLE 19 - TENANT'S RESPONSIBILITY REGARDING ENVIRONMENTAL LAWS AND HAZARDOUS
SUBSTANCES
SECTION 19.01. DEFINITIONS.
a. "Environmental Laws" - All federal, state and municipal laws,
ordinances, rules and regulations applicable to the environmental and ecological
condition of the Leased Premises, including, without limitation, the Federal
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended; the Federal Resource Conservation and Recovery Act; the Federal Toxic
Substance Control Act; the Clean Air Act; the Clean Water Act; the rules and
regulations of the Federal Environmental Protection Agency, or any other
federal, state or municipal agency or governmental board or entity having
jurisdiction over the Leased Premises.
b. "Hazardous Substances" - Includes:
(i) Those substances included within the definitions of "hazardous
substances," "hazardous materials," "toxic substances" "solid waste" or
"infectious waste" in any of the Environmental Laws; and
29
(ii) Such other substances, materials and wastes which are or become
regulated under applicable local, state or federal law, or which are classified
as hazardous, toxic or infectious under present or future Environmental Laws or
other federal, state, or local laws or regulations.
SECTION 19.02. COMPLIANCE. Tenant, at its sole cost and expense, shall
promptly comply with the Environmental Laws which shall impose any duty upon
Tenant with respect to the use, occupancy, maintenance or alteration of the
Leased Premises. Tenant shall promptly comply with any notice from any source
issued pursuant to the Environmental Laws or with any notice from any insurance
company pertaining to Tenant's use, occupancy, maintenance or alteration of the
Leased Premises, whether such notice shall be served upon Landlord or Tenant.
SECTION 19.03. RESTRICTIONS ON TENANT. Tenant shall not cause or permit to
occur:
a. Any violation of the Environmental Laws related to environmental
conditions on, under, or about the Leased Premises, or arising from Tenant's use
or occupancy of the Leased Premises, including, but not limited to, soil and
ground water conditions.
b. The use, generation, release, manufacture, refining, production,
processing, storage or disposal of any Hazardous Substances on, under, or about
the Leased Premises, or the transportation to or from the Leased Premises of any
Hazardous Substances, except as necessary and appropriate for general office use
in which case the use, storage or disposal of such Hazardous Substances shall be
performed in compliance with the Environmental Laws and the highest standards
prevailing in the industry.
SECTION 19.04. NOTICES, AFFIDAVITS, ETC.
a. Tenant shall immediately notify Landlord of (i) any violation by
Tenant, its employees, agents, representatives, customers, invitees or
contractors of the Environmental Laws on, under or about the Leased Premises, or
(ii) the presence or suspected presence of any Hazardous Substances on, under or
about the Leased Premises and shall immediately deliver to Landlord any notice
received by Tenant relating to (i) and (ii) above from any source.
b. Tenant shall execute affidavits, representations and the like from
time to time, within five (5) days of Landlord's request therefor, concerning
Tenant's best knowledge and belief regarding the presence of any Hazardous
Substances on, under or about the Leased Premises.
SECTION 19.05. LANDLORD'S RIGHTS.
a. Landlord and its agent shall have the right, but not the duty, upon
advance notice (except in the case of emergency when no notice shall be
required) to inspect the Leased Premises and conduct tests thereon at any time
to determine whether or the extent to which there has been a violation of
Environmental Laws by Tenant or whether there are Hazardous Substances on, under
or about the Leased Premises. In exercising its rights herein, Landlord shall
use reasonable efforts to minimize interference with Tenant's business but such
entry shall not constitute an eviction of Tenant, in whole or in part, and
Landlord shall not be liable for any interference, loss, or damage to Tenant's
property or business caused thereby.
b. If any governmental agency shall ever require testing to ascertain
whether there has been a release of Hazardous Substances on, under or about the
Leased Premises or a violation of the Environmental Laws, and such requirement
arose in whole or in part because of an act or omission on the part of Tenant,
then the reasonable costs thereof, to the extent such costs are the direct
result of an act or omission on the part of Tenant, shall be reimbursed by
Tenant to Landlord upon demand as Additional Rent.
SECTION 19.06. TENANT'S INDEMNIFICATION. Tenant shall indemnify and hold
harmless Landlord and any affiliated managing agent of Landlord from any and all
claims, loss, liability, costs, expenses or damage, including attorneys' fees
and costs of remediation, incurred by Landlord in connection with any breach by
Tenant of its obligations
30
under this Article 19. The covenants and obligations of Tenant under this
Article 19 shall survive the expiration or earlier termination of this Lease.
SECTION 19.07. LANDLORD'S REPRESENTATION. Landlord represents and warrants
that, to the best of Landlord's actual knowledge, without independent
investigation, as of the date of execution of this Lease, there are no Hazardous
Substances in, on or about the Land in excess of legally allowable limits.
Landlord will provide Tenant with a copy of a Phase I Environmental Assessment
Report respecting the Land upon Landlord's receipt of said Report.
SECTION 19.08. LANDLORD'S INDEMNIFICATION. In the event that Landlord shall
dispose of or incorporate any Hazardous Substances within the Building or Leased
Premises in violation of the Environmental Laws, Landlord shall indemnify and
hold Tenant harmless from and against any and all costs and expenses of removing
such Hazardous Substances from the Building or Leased Premises.
ARTICLE 20 - ADDITIONAL PROVISIONS
SECTION 20.01. FINANCIAL STATEMENTS. During the Lease Term and any extensions
thereof, Tenant shall provide to Landlord, within fifteen (15) days of
Landlord's request therefor, a copy of Tenant's most recent Annual Report. In
the event Tenant's corporate status changes at any time during the Lease Term or
any extensions thereof, and Tenant is no longer a publicly held company, Tenant
shall provide to Landlord, within fifteen (15) days of Landlord's request
therefor, a copy of Tenant's most recent certified and audited financial
statements prepared as of the end of Tenant's most recent fiscal year. Such
financial statements shall be prepared in conformity with generally accepted
accounting principles, consistently applied. Landlord agrees to maintain all
financial statements provided by Tenant hereunder on a confidential basis.
SECTION 20.02. REPRESENTATIONS AND INDEMNIFICATIONS. Any representations and
indemnifications of Landlord contained in the Lease shall not be binding upon
(i) any mortgagee having a mortgage presently existing or hereafter placed on
the Building, or (ii) a successor to Landlord which has obtained or is in the
process of obtaining fee title interest to the Building as a result of a
foreclosure of any mortgage or a deed in lieu thereof.
SECTION 20.03. TENANT'S REPRESENTATIONS AND WARRANTIES. The undersigned
represents and warrants to Landlord that (i) Tenant is duly organized, validly
existing and in good standing in accordance with the laws of the state under
which it was organized; (ii) all action necessary to authorize the execution of
this Lease has been taken by Tenant; and (iii) the individual executing and
delivering this Lease on behalf of Tenant has been authorized to do so, and such
execution and delivery shall bind Tenant. Tenant, at Landlord's request, shall
provide Landlord with evidence of such authority.
SECTION 20.04. SIGNAGE. Provided that Tenant complies with all zoning and
other municipal and county regulations, Tenant may, at its own cost and expense,
have the right to erect up to three (3) signs ("Signs") identifying its business
upon the terms and conditions set forth herein. Tenant may erect two (2)
illuminated (backlit) Signs upon the exterior of the Building and one (1)
monument Sign, provided, however, that Tenant shall only be entitled to erect
two (2) out of the three (3) Signs until such time as Tenant validly exercises
Expansion Option I pursuant to Section 20.05 of this Lease. Tenant shall have
the exclusive right to erect signage upon the exterior of the Building. If
Tenant does not exercise Expansion Option I, Landlord shall have the right to
allow other tenants in the Building to have signage included on the monument
Sign. The location, style and size of the Signs shall be subject to Landlord's
prior written approval. Tenant agrees to maintain such Signs in first-class
condition and in compliance with all zoning and building codes throughout the
Lease Term. Upon expiration or early termination of the Lease Term, Tenant
shall remove the Signs and repair all damage to the Building or Common Areas
caused thereby. Landlord does not warrant the availability of such Signs to
Tenant. Any language in the Lease notwithstanding, Tenant shall indemnify and
hold harmless Landlord from any and all liability for any loss of or damage or
injury to any person (including death resulting therefrom) or property connected
with or arising from the Signs or the rights granted Tenant herein.
SECTION 20.05. OPTION TO EXPAND I. Provided that (i) Tenant has not been in
default hereunder, after any applicable notice and cure period, at any time
during the Lease Term, (ii) the creditworthiness of Tenant has not substantially
31
diminished, and (iii) Tenant originally named herein remains in possession of
and has been continuously operating in the entire Leased Premises throughout the
Lease Term, Tenant shall have the option, during the first eighteen (18) months
of the Lease Term, to expand the Leased Premises ("Expansion Option I"), to
include the remaining space in the Building as outlined in blue on EXHIBIT A-3
attached hereto (the "Expansion Space I"). In the event Tenant elects to
exercise its Expansion Option I, Tenant shall provide Landlord with written
notice of its desire to expand within the first eighteen (18) months of the
Lease Term. Landlord and Tenant shall then work together in good faith, and in
accordance with a reasonable project schedule to be established by Landlord, to
prepare mutually agreeable plans and specifications for the tenant finish
improvements in Expansion Space I and Landlord shall construct and substantially
complete such improvements within a reasonable time. The term for Expansion
Space I shall be coterminous with the term for the original Leased Premises and
shall commence upon Substantial Completion of the tenant finish improvements in
Expansion Space I. Tenant's Minimum Annual Rent per square foot for Expansion
Space I shall be Fifteen Dollars and Fifty-seven Cents ($15.57). The tenant
finish improvement allowance and architectural and engineering allowance for
Expansion Space I shall also be the same per square foot as the allowances
provided by Landlord for the original Leased Premises as set forth in Section
2.02 hereof. Landlord and Tenant will execute an amendment to the Lease
incorporating Expansion
Space I.
SECTION 20.06. OPTION TO EXPAND II.
a. Provided that (i) Tenant has not been in default hereunder, after any
applicable notice and cure period, at any time during the Lease Term, (ii) the
creditworthiness of Tenant has not substantially diminished, and (iii) Tenant
originally named herein remains in possession of and has been continuously
operating in the entire Leased Premises throughout the Lease Term, and subject
to the terms of paragraph c. of this Section and to Landlord's receipt of all
necessary governmental approvals, Tenant shall have the exclusive option to
expand the Leased Premises for a period of five (5) years from the Commencement
Date of this Lease ("Expansion Option II"), in increments of not less than
approximately 35,000 rentable square feet and totaling in the aggregate not more
than 225,000 square feet (collectively, the "Expansion Space II"), in a building
design and location mutually agreed upon between Landlord and Tenant. In the
event Tenant elects to exercise its Expansion Option II, Tenant shall provide
Landlord with written notice of its desire to expand within five (5) years from
the Commencement Date of this Lease. Landlord and Tenant shall then work
together in good faith, and in accordance with a reasonable project schedule to
be established by Landlord, to prepare mutually agreeable plans and
specifications for the completion of any Expansion Space II. Landlord shall use
commercially reasonable efforts to substantially complete any Expansion Space
II within twelve (12) months from the completion of mutually agreeable plans and
specifications. The term for any Expansion Space II shall be for a minimum of
twelve (12) years, and the term for the original Leased Premises shall be
extended, if necessary, to be coterminous with the term for any Expansion Space
II.
b. The Minimum Annual Rent for any Expansion Space II shall be equal to
the rate calculated based upon the total project cost multiplied by an
investment constant. The total project cost shall be defined as all costs
necessary to construct a building comparable to the original Building including
but not limited to shell costs, land, tenant finish improvements, interest
carry, infrastructure, and typical soft costs associated with a similar
commercial office project. The investment constant will be equal to the then
current twenty-five (25) year Treasury Strip yield plus two percent (2%),
assuming a twenty-five (25) year amortization schedule, times a coverage factor
of 1.175. This resulting investment constant will be multiplied by the total
project cost to determine the annual net rental rate to be paid by Tenant for
any Expansion Space II during the twelve (12) year term. Tenant shall also pay
all actual Operating Expenses and Real Estate Taxes for any Expansion Space II.
Tenant's Minimum Annual Rent for any extended term for the original Leased
Premises shall be an amount equal to Fifteen Dollars and Fifty-seven Cents
($15.57) per square foot of the original Leased Premises, plus Tenant's share of
the increase in actual Operating Expenses and Real Estate Taxes above Landlord's
Share of Operating Expenses for the original Leased Premises. Landlord and
Tenant will execute an amendment to the Lease incorporating any Expansion Space
II.
c. Notwithstanding anything to the contrary herein,Landlord may require,
at Landlord's option, that Tenant lease Expansion Space I prior to exercising
this Expansion Option II. If Landlord exercises its option provided in the
preceding sentence and Tenant may still exercise Expansion Option I, then Tenant
shall lease Expansion Space I pursuant to the terms and conditions provided in
Section 20.05. In the event Landlord
32
exercises its option provided herein and Tenant's Expansion Option I has
expired, the terms and conditions for Expansion Space I shall be as provided
in the remainder of this Section 20.06c. The term for such Expansion Space I
shall be coterminous with the term for the original Leased Premises and shall
commence upon Substantial Completion of the tenant finish improvements in
Expansion Space I. Landlord and Tenant shall work together in good faith, and
in accordance with a reasonable project schedule to be established by
Landlord, to prepare mutually agreeable plans and specifications for the
tenant finish improvements in Expansion Space I and Landlord shall construct
and Substantially Complete such improvements within a reasonable time.
Tenant's Minimum Annual Rent for Expansion Space I shall be equal to the
Minimum Annual Rent then being quoted by Landlord to prospective new tenants
of the Building for Expansion Space I, excluding free rent and other
concessions; provided, however, that in no event shall the Minimum Annual Rent
for Expansion Space I be less than the highest Minimum Annual Rent payable for
the original Leased Premises. Landlord and Tenant will execute an amendment
to the Lease incorporating Expansion Space I.
SECTION 20.07. SATELLITE DISH.
a. Provided Tenant is not in default under the Lease, and provided
further that Tenant complies with all zoning and other municipal and county
rules and regulations, Tenant shall have the right during the Lease Term, at its
own cost and expense, to install, operate and maintain on the roof of the
Building, a microwave satellite dish ("Dish"), upon the terms and conditions set
forth herein. Tenant shall be solely responsible for obtaining any necessary
permits and licenses required to install and operate the Dish. Copies of such
permits and licenses shall be provided to Landlord.
b. The size, location, design and manner of installation of the Dish and
all related wiring and equipment shall be designated and approved by Landlord,
which approval shall not be unreasonably withheld. After obtaining written
approval of Landlord, Tenant shall have reasonable access to the roof for
installation and maintenance of the Dish and shall have the right to install all
reasonable wiring related thereto. However, unless otherwise approved by
Landlord in writing, in no event shall Tenant be permitted to penetrate the roof
in connection with the installation or maintenance of the Dish.
c. Tenant represents and warrants that the installation and maintenance
of the Dish will not cause any damage to the structural portions of the
Building. Tenant shall be responsible for repairing any such damages to the
structure.
d. Tenant shall install, operate and maintain the Dish in accordance with
all federal, state and local laws and regulations. Prior to installation of the
dish, Tenant shall, on behalf of the installer, provide Landlord with a
certificate of insurance reasonably satisfactory to Landlord.
e. Tenant reserves the right to discontinue its use of the Dish at any
time prior to the termination of the Lease or any renewal or extension thereof
for any reason whatsoever, provided that Tenant gives thirty (30) days prior
written notice thereof to Landlord. Tenant shall be responsible for all costs
of removal and for restoring the Building to its original condition after such
removal. Notwithstanding the foregoing, Tenant shall remove the Dish and all
related wiring and equipment upon the expiration or early termination of the
Lease and shall restore the Building to its original condition after such
removal, at Tenant's sole cost and expense. Such removal shall be in accordance
with all of the terms and conditions set forth herein. If Tenant elects not to
remove the Dish from the Building upon expiration or earlier termination of this
Lease, the Dish shall be deemed abandoned by Tenant and shall become the
property of Landlord.
f. Any language in the Lease notwithstanding, Landlord shall not be
liable and Tenant shall indemnify, defend and hold Landlord harmless from and
against any and all liability, damages (including but not limited to personal
injury, death, or property damages), costs, expenses, and attorneys' fees
incurred by Landlord arising from any Dish related cause whatsoever, including
those arising from the installation, use, maintenance and removal thereof,
except for that caused by the gross negligence or willful misconduct of
Landlord.
33
g. If Tenant fails to comply with the terms stated herein, or if removal
of the Dish is required by any governmental authority having jurisdiction
thereof, Tenant shall remove the Dish and all related wiring and equipment and
restore the Building to its original condition in accordance herewith within
five (5) days of its receipt of written notice requiring the same.
SECTION 20.08. DISCRETIONARY ALLOWANCE. Landlord shall provide Tenant with an
allowance in the amount of Two Hundred Thousand Dollars ($200,000.00) to be used
by Tenant for costs associated with its relocation to the Leased Premises. Such
allowance shall be paid to Tenant within fifteen (15) days of Landlord's receipt
of an executed Estoppel Certificate from Tenant, which Estoppel Certificate
shall be provided to Tenant on the Commencement Date.
In addition, Landlord shall provide Tenant with an allowance in the amount of
One Hundred Eighty-six Thousand Four Hundred Dollars ($186,400.00), which shall,
at Tenant's option, either (i) be paid to Tenant within fifteen (15) days of
Landlord's receipt of an executed Estoppel Certificate from Tenant, which
Estoppel Certificate shall be provided to Tenant on the Commencement Date, or
(ii) be credited toward costs incurred by Tenant as a part of this Lease
transaction.
In the event Tenant exercises its option to expand pursuant to Section 20.05
and/or Section 20.06 hereof, Landlord agrees to pay Tenant an allowance equal to
two percent (2%) of the gross value of such expansion, based on the rental rate
for such expansion space, the rentable square footage of the expansion space,
and the number of months remaining in the original Lease Term as of the
effective date of such expansion, to be paid within fifteen (15) days of
Landlord's receipt of an executed Estoppel Certificate from Tenant relating to
the expansion space, which Estoppel Certificate shall be provided to Tenant on
the commencement date of such expansion space.
SECTION 20.09. CONTINGENCY. Landlord and Tenant hereby acknowledge and agree
that this Lease shall be and is contingent upon Landlord successfully completing
the acquisition of the Land described in EXHIBIT A-1 attached hereto. Landlord
shall notify Tenant when this contingency has been satisfied. In the event the
acquisition of the Land has not been completed on or before February 24, 1997,
either Landlord or Tenant shall have the right to terminate this Lease upon ten
(10) days prior written notice to the other party. Upon such termination, both
parties shall be released from further liability hereunder. Landlord hereby
agrees that the closing on the acquisition of the Land shall occur within four
(4) business days after final approval of the rezoning of the Land sought by
Landlord.
34
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day
and year first above written.
LANDLORD:
DUKE REALTY LIMITED PARTNERSHIP,
an Indiana limited partnership
By: Duke Realty Investments, Inc.,
as general partner
By:
-------------------------------
Xxxxx X. Xxxxxxxxxxx
Vice President
Indiana Office Group
ATTEST: TENANT:
---------------------------
SOFTWARE ARTISTRY, INC., an
--------------------------- Indiana corporation
By:
-------------------------------
Printed:
--------------------------
Title:
----------------------------
STATE OF _______________)
) SS:
COUNTY OF ______________)
Before me, a Notary Public in and for said County and State, personally
appeared ____________________________ and ______________________, by me known
and by me known to be the _____________________ and _____________________,
respectively, of Software Artistry, Inc., an Indiana corporation, who
acknowledged the execution of the foregoing "Office Lease" on behalf of said
corporation.
WITNESS my hand and Notarial Seal this _____ day of _______________, 1996.
----------------------------------
Notary Public
----------------------------------
(Printed Signature)
My Commission Expires:
------------
My County of Residence:
-----------
35
RULES AND REGULATIONS
l. The sidewalks, entrances, passages, courts, elevators, vestibules,
stairways, corridors or halls shall not be obstructed or used for any purpose
other than ingress and egress.
2. No awnings or other projections shall be attached to the outside walls
of the Building. No curtains, blinds, shades or screens shall be attached to or
hung in, or used in connection with, any window or door of the Leased Premises
other than Landlord standard drapes without Landlord's prior written approval.
All electric ceiling fixtures hung in offices or spaces along the perimeter of
the Building must be fluorescent, of a quality, type, design and bulb color
approved by Landlord. Neither the interior nor the exterior of any windows
shall be coated or otherwise sunscreened without written consent of Landlord.
3. No sign, advertisement, notice or handbill shall be exhibited,
distributed, painted or affixed by any tenant on, about or from any part of the
Leased Premises or the Building without the prior written consent of Landlord.
In the event of the violation of the foregoing by any tenant, Landlord may
remove or stop same without any liability, and may charge the expense incurred
in such removal or stopping to Tenant. Standard interior signs on doors and
directory tablet shall be inscribed, painted or affixed for each Tenant by the
Landlord, at the expense of such Landlord, and shall be of a size, color and
style acceptable to Landlord. The directory tablet will be provided exclusively
for the display of the name and location of Tenants only, and Landlord reserves
the right to exclude any other names therefrom. Nothing may be placed on the
exterior of corridor walls or corridor doors other than Landlord's standard
lettering.
4. The sashes, sash doors, windows, and doors that reflect or admit light
and air into halls, passageways or other public places in the Building shall not
be covered or obstructed by any Tenant, nor shall any bottles, parcels or other
articles be placed on the window xxxxx.
5. The water and wash closets and other plumbing fixtures shall not be
used for any purpose other than those for which they were constructed, and no
sweepings, rubbish, rags, or other substances shall be thrown therein. All
damages resulting from any misuse of the fixtures shall be borne by the Tenant
who, or whose subtenants, assignees or any of their servants, employees, agents,
visitors or licensees shall have caused the same.
6. No Tenant shall xxxx, paint, drill into, or in any way deface any part
of the Leased Premises or the Building. No boring, cutting or stringing of
wires or laying of linoleum or other similar floor coverings shall be permitted,
except with the prior written consent of the Landlord and as the Landlord may
direct.
7. No bicycles, vehicles, birds or animals of any kind shall be brought
into or kept in or about the Leased Premises, and no cooking shall be done or
permitted by any Tenant on the Leased Premises, except that microwave cooking
and the preparation of coffee, tea, hot chocolate and similar items for Tenants
and their employees shall be permitted provided power shall not exceed that
amount which can be provided by a 30 amp circuit. No Tenant shall cause or
permit any unusual or objectionable odors to be produced or permeate the Leased
Premises.
8. The Leased Premises shall not be used for manufacturing or for the
storage of merchandise except as such storage may be incidental to the permitted
use of the Leased Premises. No Tenant shall occupy or permit any portion of the
Leased Premises to be occupied as an office for the manufacture or sale of
liquor, narcotics, or tobacco in any form, or as a medical office, or as a
xxxxxx or manicure shop, or as an employment bureau without the express written
consent of Landlord. The Leased Premises shall not be used for lodging or
sleeping or for any immoral or illegal purpose.
9. No Tenant shall make, or permit to be made any unseemly or disturbing
noises or disturb or interfere with occupants of this or neighboring buildings
or premises or those having business with them, whether by the use of any
musical instrument, radio, phonograph, unusual noise, or in any other way. No
Tenant shall throw anything out of doors, windows or down the passageways.
36
10. No Tenant, subtenant or assignee nor any of its servants, employees
agents, visitors or licensees, shall at any time bring or keep upon the Leased
Premises any inflammable, combustible or explosive fluid, chemical or substance.
11. No additional locks or bolts of any kind shall be placed upon any of
the doors or windows by any Tenant, nor shall any changes be made in existing
locks or the mechanism thereof. Each Tenant must upon the termination of his
tenancy, restore to the Landlord all keys of stores, offices, and toilet rooms,
either furnished to, or otherwise procured by, such Tenant and in the event of
the loss of keys so furnished, such Tenant shall pay to the Landlord the cost of
replacing the same or of changing the lock or locks opened by such lost key if
Landlord shall deem it necessary to make such changes.
12. All removals or the carrying in or out of any safes, freight,
furniture, or bulky matter of any description must take place during the hours
which Landlord shall reasonably determine from time to time. The moving of
safes or other fixtures or bulky matter of any kind must be done upon previous
notice to the superintendent of the Building and under his supervision, and the
persons employed by any Tenant for such work must be acceptable to Landlord.
Landlord reserves the right to inspect all safes, freight or other bulky
articles to be brought into the Building and to exclude from the Building all
safes, freight or other bulky articles which violate any of these Rules and
Regulations or the Lease of which these Rules and Regulations are a part. The
Landlord reserves the right to prescribe the weight and position of all safes,
which must be placed upon supports approved by Landlord to distribute the
weight.
13. No Tenant shall purchase janitorial or maintenance or other like
services, from any person or persons not approved by Landlord.
14. Landlord shall have the right to prohibit any advertising by any
Tenant which, in Landlord's opinion tends to impair the reputation of the
Building or its desirability as an office location, and upon written notice from
Landlord any Tenant shall refrain from or discontinue such advertising.
15. Landlord reserves the right to exclude from the Building between the
hours of 6 p.m. and 8 a.m. and at all hours on Sunday and legal holidays all
persons who do not present a pass to the Building approved by Landlord.
Landlord will furnish passes to persons for whom any Tenant requests the same in
writing. Each Tenant shall be responsible for all persons for whom he requests
passes and shall be liable to Landlord for all acts of such persons. Landlord
shall in no case be liable for damages for any error with regard to the
admission to or exclusion from the Building of any person. In case of an
invasion, mob riot, public excitement or other circumstances rendering such
action advisable in Landlord's opinion, Landlord reserves the right without any
abatement of rent to require all persons to vacate the Building and to prevent
access to the Building during the continuance of the same for the safety of the
Tenants and the protection of the Building and the property in the Building.
16. Any persons employed by any Tenant to do janitorial work shall, while
in the Building and outside of the Leased Premises, be subject to and under the
control and direction of the superintendent of the Building (but not as an agent
or servant of said superintendent or of the Landlord), and Tenant shall be
responsible for all acts of such persons.
17. All doors opening onto public corridors shall be kept closed, except
when in use for ingress and egress.
18. The requirements of Tenant will be attended to only upon application
to the Landlord.
19. Canvassing, soliciting and peddling in the Building are prohibited,
and each Tenant shall report and otherwise cooperate to prevent the same.
20. All office equipment of any electrical or mechanical nature shall be
placed by Tenant in the Leased Premises in settings approved by Landlord to
absorb or prevent any vibration, noise and annoyance.
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21. No air-conditioning unit or other similar apparatus shall be installed
or used by any Tenant without the written consent of Landlord.
22. There shall not be used in any space, or in the public halls of the
Building, either by any Tenant or others, any hand trucks except those equipped
with rubber tires and rubber side guards.
23. All Tenant move-ins are to be scheduled after 5:00 p.m. Monday
through Friday or anytime Saturday or Sunday. Please contact the Landlord as
soon as a date has been determined in order to ensure there are no other
tenants moving simultaneously.
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