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EXHIBIT 10.4
LEASE
THIS LEASE is made as of June 2, 1997, by and between XXXXXXXXX
PROPERTIES, INC., a Minnesota corporation ("Landlord") and XXXXX INSTITUTE, LTD,
a Delaware corporation ("Tenant"). The full and complete payment and performance
of Tenant's obligations under this Lease is secured by the Guaranty from CAREER
EDUCATION CORPORATION ("Guarantor") pursuant to Section 32 of this Lease.
1. DEMISE OF PREMISES. Landlord, in consideration of the rents,
covenants and agreements to be paid and performed by Tenant, leases to Tenant
and Tenant leases from Landlord that certain real estate located at 0000
Xxxxxxxxx Xxxxx, Xxxxxxx Xxxxxxx, Xxxxxx Xxxxxx, Xxxxxxxxx, legally described on
Exhibit A attached hereto (the "Land"), the building (which for purposes of this
Lease is deemed to contain 000,000 xxxxxx xxxx xx xxxxx xxxxxxxx xxxx) and all
improvements located on the Land (the "Building"), and the fixtures and
equipment located in the Building as described on Exhibit B (the "Equipment").
The Building and Equipment are collectively referred to in this Lease as the
"Improvements". The Land, Building and Equipment are collectively referred to in
this Lease as the "Leased Premises".
1.2 ADDITIONAL IMPROVEMENTS TO BE CONSTRUCTED BY LANDLORD.
1.2.1 CONSTRUCTION OF ADDITIONAL IMPROVEMENTS. Landlord shall,
at Landlord's cost and expense, construct the additional improvements
(the "Additional Improvements") to the Leased Premises pursuant to the
final plans and specifications (the "Plans") prepared by Architectural
Alliance ( the "Architect"), which Plans are summarized (the "Summary")
on Exhibit C attached hereto and incorporated herein by reference.
Landlord shall, within three (3) weeks from the date hereof, cause the
Plans for the Additional Improvements to be completed, conforming in
all material respects to the Summary. Thereupon, Exhibit C shall be
amended to replace the Summary with the Plans. The Additional
Improvements, when constructed, will comply all Laws, as such term as
defined below, applicable to the Leased Premises, including the ADA, as
defined below.
1.2.2 COMPLETION OF CONSTRUCTION OF ADDITIONAL IMPROVEMENTS.
Landlord shall use reasonable efforts to achieve substantial completion
of the Additional Improvements on or before October 15, 1997, subject
to force majeure delays and delays caused by the actions of Tenant (the
"Projected Completion Date"). For purposes of this Lease, the date the
Additional Improvements are "substantially complete" shall mean the
date when the Architect certifies that the Additional Improvements are
substantially complete and are ready for occupancy and that a final
certificate of occupancy with respect to the Additional Improvements
has issued for the Leased Premises, but subject to punchlist items to
be completed subsequent to the Tenant's occupancy. The date on which
Landlord delivers to Tenant the certificate of the Architect certifying
the Additional Improvements are substantially complete, together with
the certificate of occupancy for
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the Leased Premises, constitutes the "Delivery Date" hereunder and such
notice is defined herein as the "Completion Notice".
1.2.3 TENANT'S TERMINATION RIGHT. If Landlord does not deliver
the Completion Notice to Tenant on or before April 15, 1998, the Tenant
may, by notice in writing delivered to Landlord on or before May 1,
1998, terminate this Lease ("Tenant's Termination Right").
1.2.4 LIQUIDATED DAMAGES FOR DELAYS IN COMPLETING CONSTRUCTION
OF ADDITIONAL IMPROVEMENTS. Tenant currently leases from Landlord
certain premises (the "Minneapolis Premises") located at 0000 Xxxx Xxxx
Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx pursuant to the Lease dated September
13, 1985, as amended (the "Minneapolis Lease"). If Landlord does not
deliver the Completion Notice to Tenant by the Projected Completion
Date, then the Base Rent for the Minneapolis Premises shall be reduced
to $10.75 per square foot of the area of the Minneapolis Premises for
the period from the Projected Completion Date until the earlier of (i)
the actual date the Landlord delivers the Completion Notice to Tenant
or (ii) the date Tenant terminates this Lease pursuant to the Tenant's
Termination Right. The foregoing reduction in the Base Rent for the
Minneapolis Premises is referred to as the "Completion Delay
Adjustment". Notwithstanding any other term or condition of this Lease
to the contrary, if Landlord does not complete the Additional
Improvements by the Projected Completion Date, then Tenant shall
nonetheless remain bound hereunder and Landlord shall continue to use
reasonable efforts to complete the Additional Improvements as soon as
reasonably possible with the Commencement Date occurring pursuant to
Section 4.1 hereunder. The parties hereto agree that it is difficult to
determine actual damages to Tenant resulting from a delay of the
Commencement Date beyond the Projected Completion Date and that the
Completion Delay Adjustment constitutes fair and liquidated damages to
compensate Tenant for such delay. Except for Tenant's Termination Right
and the Completion Delay Adjustment, Tenant shall not be entitled to
any other damages, relief, reimbursement or compensation from Landlord
resulting from the failure of the Landlord to complete the Additional
Improvements as of the Projected Completion Date.
1.2.5 CONSTRUCTION COSTS AND MODIFICATIONS TO PLANS. The costs
of constructing the Additional Improvements pursuant to the Plans is
included in the determination of the Based Rent and, except as
specifically provided herein, Tenant will not incur additional costs or
fees for the construction of the Additional Improvements. Tenant may,
at its option, direct Landlord and Architect to make modifications to
the Plans, which modifications are referred to as "Construction
Changes". Each Construction Change shall be documented by a change
order (a "Change Order") executed by Landlord and Tenant at the time
the Construction Change is ordered. Each Change Order, in addition to
specifying the Construction Change, shall specify any extension to the
Projected Completion Date necessitated by the Construction Change and
the Projected Construction Date shall be extended. Additionally, each
Change Order shall specify the cost of
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completing each Construction Change. If the Construction Change results
in an increase in the cost of construction, Tenant shall pay such
increased amount to Landlord in cash or collected funds simultaneous
with and as a condition of the execution to Change Order, or, at
Tenant's option, such additional cost shall be deducted from the
Allowance provided in Section 32.1 of this Lease. If the Construction
Change results in a decrease to the construction costs, then the Base
Rent shall be adjusted accordingly and the parties shall execute an
appropriate amendment to this Lease.
1.2.6 REPRESENTATIONS AND WARRANTIES REGARDING CONSTRUCTION OF
ADDITIONAL IMPROVEMENTS. Landlord warrants that it will construct the
Additional Improvements in accordance with applicable Laws. Landlord
further warrants to Tenant for a period of one (1) year from the
Delivery Date (die "Warranty Period") that (i) the Additional
Improvements will be free from defects in materials and workmanship and
(ii) the mechanical systems of the Building will be free from defects
and in good working order. Additionally, on the Delivery Date Landlord
shall assign to Tenant all warranties which Landlord received from
suppliers regarding the Additional Improvements.
1.2.7 PUNCHLIST. Not later than seven (7) days after the
Delivery Date, Landlord, Tenant and the Architect shall inspect the
Leased Premises and, if necessary, create a punchlist (the "Punchlist")
of any portion of the work comprising Additional Improvements which is
incomplete or which needs correction. The Punchlist shall not affect
the Delivery Date and the Commencement Date of this Lease, provided
that the Architect has otherwise certified that the Additional
Improvements are substantially complete and that a certificate of
occupancy for the Premises has been obtained. Landlord shall, at its
expense, use its best efforts to complete the Punchlist work within
thirty (30) days after the Delivery Date, subject to the availability
of materials and other elements of force majeure and delays caused by
the Tenant. Landlord may enter the Leased Premises at any time for
purposes of completing the Punchlist work.
1.2.8 TENANT'S ACCESS TO LEASED PREMISES. Landlord shall use
reasonable efforts to allow Tenant access to the Leased Premises
fifteen (15) days prior to the Projected Completion Date (the "Tenant
Access Date") for the purpose of Tenant completing, at Tenant's cost
and expense, the installation of Tenant equipment and otherwise
preparing for occupancy (the "Tenant Work"). Notwithstanding the
foregoing Tenant shall ensure that the Tenant Work does not interfere
with or delay Landlord's completion of the Additional Improvements and
shall coordinate its activities with respect to the Tenant Work with
Landlord so as to prevent interfering with or delaying the completion
of the Additional Improvements. As of the date of this Lease, the
projected Tenant Access Date is October 1, 1997.
2. TITLE AND CONDITION. The Leased Premises are leased subject to (a)
the encumbrances (the "Encumbrances") described on Exhibit A hereto, (b) all
matters shown on the survey dated February 28, 1997, prepared by North American
Survey, (c) all zoning and building
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regulations, restrictions, rules and ordinances, (d) all federal, state, county,
municipal and other statutes, charters, laws, rules, orders, regulations and
ordinances now in effect or hereafter adopted by any governmental authority
having or acquiring jurisdiction (collectively, "Laws"), (e) any matters
affecting title (not created or allowed by Landlord) created or allowed by
Tenant or any party claiming under Tenant after the date of this Lease, and (f)
to the present state and condition of the Leased Premises and that Landlord is
not aware of any violations of any Laws covering the Leased Premises.
Notwithstanding the foregoing, Landlord makes no representation whether the
Leased Premises complies at this time with the Americans With Disabilities Act
(the "ADA") other than Landlord has received no written notice from any
governmental authority or other party that the Leased Premises violates the ADA.
3. USE OF LEASED PREMISES.
3.1. GENERALLY. Tenant shall use the Leased Premises solely as an
education and classroom facility and uses ancillary thereto. Tenant shall not
use or permit upon the Leased Premises anything that might be dangerous to life
or limb. Tenant shall not, in any manner, deface or injure any part of the
Leased Premises or commit waste thereon. Tenant shall not do anything or permit
anything to be done upon the Leased Premises which in any way would tend to
create a public or private nuisance or would tend to disturb occupants of
neighboring property or would tend to injure the reputation of the Leased
Premises. Tenant shall not use or occupy the Leased Premises or permit the
Leased Premises to be used or occupied in a manner which would violate any
certificate of occupancy affecting the Leased Premises, or would cause
structural injury to the Improvements, or would cause the value or usefulness of
any part of the Leased Premises to diminish in any material respect.
3.2. COMPLIANCE WITH LAW. Subject to the provisions of Section 1.2.1
hereof, Tenant shall, at its sole cost and expense, comply with (a) all Laws
affecting the Leased Premises and its occupancy, operation or use of the Leased
Premises, including those pertaining to the ADA, (b) all rules, orders and
regulations of the state fire marshal or fire insurance rating bureau or other
similar organization for the prevention of fire or the correction of hazardous
conditions, and (c) the requirements of all policies of public liability, fire
and other insurance at any time in force with respect to the Leased Premises.
Landlord represents that it has received no notice of any violations of Laws
affecting the Leased Premises.
3.3. TENANT'S BUSINESS. Tenant shall observe and comply with all
conditions and requirements necessary to conduct Tenant's business operations
upon the Leased Premises, including any and all rights, licenses, permits
(including but not limited to zoning variances, special exemptions and
nonconforming uses), privileges, franchises and concessions which may be
applicable to the Leased Premises. Tenant shall, at its sole cost and expense,
procure any and all necessary permits, certificates, licenses or other
authorizations required for its use of the Leased Premises, except those
required in connection with the construction of the Additional Improvements. If
the owner of the Leased Premises is required by law to join in any such
application, Landlord shall allow any applications for such permits,
certificates or other
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authorizations to be made in Landlord's name and shall execute any documents
required in connection with such applications promptly on request and shall
otherwise cooperate fully with Tenant in connection with such applications,
provided Tenant is otherwise in compliance with the terms and conditions hereof
and provided Landlord is not required to incur cost or expense in doing so,
other than the fees of attorneys or other professionals incurred in reviewing
same.
4. TERM.
4.1. INITIAL TERM. Subject to the terms, covenants, agreements and
conditions contained in this Lease, Tenant shall have and hold the Leased
Premises for an initial term (the "Initial Term") of eleven (11) years and five
(5) months commencing on the Delivery Date (the "Commencement Date") and
terminating at 11:59 p.m. on a date which is eleven (11) years and five (5)
months from the Commencement Date (the "Termination Date"). As soon as
reasonably possible after the Commencement Date, Landlord and Tenant shall
execute an amendment to this Lease specifying the actual Commencement Date and
the Termination Date of this Lease.
4.2 ADDITIONAL TERM. Tenant may, at its option, elect to extend this
Lease for two (2) additional terms (the "Additional Terms") of five (5) years
each. In order to exercise this option, Tenant shall deliver notice in writing
of its election to Landlord at least one (1) year prior to the expiration of the
Initial Term or the then current Additional Term, as the case may be (the
"Renewal Notice"). Such exercise shall not be valid or effective if, as of the
date of such election, an Event of Default exists under the terms of this Lease.
Each Additional Term shall be governed by the terms and conditions of this Lease
and Base Rent for the Additional Terms shall be as set forth in Section 5.3
hereof. Any reference to "Term" herein shall mean the Initial Term and the
Additional Terms (if Tenants elects any Additional Terms).
4.3. NON-TERMINABILITY. Except as otherwise expressly provided in this
Lease, Tenant shall not have any right to terminate this Lease or be entitled to
the abatement or any reduction of rent. Any Law to the contrary notwithstanding,
Base Rent and Additional Rent shall continue to be payable in all events and
Tenant's obligations pursuant to this Lease shall continue unaffected, unless
the requirement to pay or perform the same shall be terminated or abated
pursuant to an express provision of this Lease.
5. RENT.
5.1. BASE RENT. Tenant covenants to pay to Landlord commencing on the
Base Rent Commencement Date defined in Section 5.2 below, at such place or to
such person as Landlord from time to time may designate in writing, as Annual
Base Rent for the Leased Premises during the Term, payable in equal monthly
installments ("Monthly Base Rent"), according to the following schedule:
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Lease Year Rent Per Square Foot Annual Base Rent Monthly Base Rent
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1,2 and 3 $ 9.45 $1,115,100 $ 92,925.00
4, 5 and 6 $10.33 $1,218,940 101,578.33
7, 8 and 9 $11.28 $1,331,040 110,920.00
10 and 11 $12.33 $1,454,845 121,237.08
Monthly Base Rent shall be paid in advance on the first (1st) day of each month.
Base Rent for any period which is less than one month shall be apportioned based
on the number of days in that month. Lease Year 1 commences on the Base Rent
Commencement Date defined below.
5.2 BASE RENT COMMENCEMENT DATE. In further consideration of the
covenants and agreements of Tenant hereunder, the commencement date for the
payment of the Base Rent (the "Base Rent Commencement Date") shall be a date
which is six (6) months from the Commencement Date.
5.3 BASE RENT FOR ADDITIONAL TERM. Annual Base Rent for each Additional
Term shall be an amount which is equivalent to existing market rates for
comparable premises, but which in no event shall be less than the Annual Base
Rent in effect in the last year of Term of the Lease then expiring. Within
thirty (30) days after receipt of the Renewal Notice, Landlord shall deliver to
Tenant written notice of the Annual Base Rent for the Additional Term elected by
Tenant. In the Renewal Notice (the "Rent Notice"). Tenant shall have thirty (30)
days after receipt of the Rent Notice to rescind the Renewal Notice by written
notice delivered to Landlord. If Tenant does not rescind the Renewal Notice
within said thirty (30) day period, the Renewal Notice shall be deemed to be
final and the Annual Base Rent set forth in the Rent Notice shall govern the
Additional Term so elected. Annual Base Rent during each Additional Term shall
be payable in equal monthly payments in advance, payable on the first day of
each month.
5.4 NET LEASE. Except as specifically provided for in Section 8.4
hereof and subject to Sections 1.2.6 and 16.7 of this Lease, this Lease is a Net
Lease and Landlord shall be free from all costs, expenses and obligations
relating to the Leased Premises, including taxes, water charges, sewer charges,
assessments and all other governmental impositions and charges. Landlord and
Tenant specifically intend this Lease shall yield net to Landlord not less than
the Base Rent reserved under this Lease throughout the Term. Annual Base Rent,
Additional Rent and all other sums payable pursuant to this Lease to or on
behalf of Landlord shall be paid without notice and demand and without set off,
counterclaim, abatement, suspension, deduction or defense, except as
specifically set forth herein.
5.5. ADDITIONAL RENT. Commencing on the Commencement Date, Tenant
covenants to pay and discharge, as Additional Rent, punctually as and when the
same shall become due and
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payable, each and every cost, expense and obligation of every kind and nature,
foreseen or unforeseen, for the payment of which Tenant is or shall become
liable by reason of its estate or interest in the Leased Premises, by reason of
any right or interest of Tenant in or under this Lease, or by reason of or in
any manner connected with or arising out of the possession, operation,
maintenance, alteration, repair, rebuilding, use or occupancy of the Leased
Premises, unless such obligations have been specifically assigned to or assumed
by Landlord in this Lease. Additional Rent shall specifically include, but not
be limited to, the items described in Sections 5.5.1, 5.5.2, 5.5.3 and 5.6
hereof.
5.5.1. TAXES. Tenant agrees to pay and discharge, at least ten
(10) days before any penalty or interest is assessed, all real estate
taxes, personal property taxes, business and occupation taxes,
occupational license taxes, water charges, sewer charges, installments
of special assessments and all other governmental taxes, impositions
and charges of every kind and nature, extraordinary or ordinary,
general or special, unforeseen or foreseen (a) which are allocable to
the Term of this Lease; and (b) which at any time during the Term
shall be or become due and payable by Landlord or Tenant; and (c) which
shall be levied, assessed or imposed upon or with respect to (i) all or
any part of the Leased Premises, (ii) any interest of Landlord or
Tenant in the Leased Premises or under this Lease, (iii) the
possession, operation, maintenance, alteration, repair, rebuilding, use
or occupancy of all or any part of the Leased Premises, or (iv) this
transaction or any document to which Tenant is a party creating or
transferring an interest or an estate in the Leased Premises (the
"Taxes"). All of the foregoing shall be payable by Tenant whether under
or by virtue of any Law or other requirement of any governmental
authority.
5.5.1.1. TENANT'S PAYMENT OF TAXES. Tenant's obligations under
this Lease with respect to real estate taxes and installments of
special assessments shall commence with those due and payable in
calendar year 1997 provided, however, that Tenant's share of said taxes
and assessments payable in the first and final calendar years of this
Lease shall be prorated to the Commencement Date and the Termination
Date of this Lease.
5.5.1.2. LANDLORD'S TAXES. It is expressly understood and
agreed that Tenant shall not be required to pay, or reimburse Landlord
for (a) any local, state or federal capital levy, franchise tax,
revenue tax, income tax or profits tax of Landlord, or (b) any tax
charged or levied upon or with respect to the Base Rent (unless such
levy or tax is in lieu of or a substitute for any other tax upon or
with respect to the leased Premises which, if such other tax were in
effect, would be payable by Tenant under the provisions of this Lease),
or (c) any estate, inheritance, devolution, succession or transfer
(other than taxes in connection with a conveyance by Landlord to
Tenant) of Landlord's interest in the Leased Premises, or any tax or
levy used to repay obligating incurred by Landlord related to the
construction of Improvements on the Leased Premises.
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5.5.2. UTILITIES. Tenant will pay or cause to be paid when due
all charges for gas, water, sewer, electricity, light, heat, power,
telephone, and other utilities and services used, rendered or supplied
to, upon or in connection with the Leased Premises, and will pay and
protect, defend and indemnify Landlord from and against, any liability
or damages on such account. Tenant agrees that Landlord is not, nor
shall it be, required to furnish to Tenant or the Leased Premises any
gas, water, sewer, electricity, light, heat, power or any other
facilities, equipment, labor, materials or services of any kind and
Landlord shall not be liable in any respect for the suspension or delay
of utility services to the Leased Premises, unless such suspension or
delay is caused solely by Landlord's negligence or willful misconduct.
In such case, where the suspension or delay of utility services is
caused by Landlord's negligence or willful misconduct, Tenant's sole
remedy shall be an appropriate abatement of Base Rent until services
are restored.
5.5.3. INSURANCE. Tenant shall pay all of the costs and
premiums for the insurance which Tenant is required to obtain and
maintain under the terms of this Lease.
5.5.4. PROOF OF PAYMENT. Tenant shall deliver to Landlord
proof of payment of any tax, assessment, and other governmental or
similar charge which is payable by Tenant as provided in this Section
5, which proof shall be provided to Landlord within twenty (20) days
after payment is made by Tenant.
5.5.5. LATE PAYMENT; NON-PAYMENT. Tenant shall also pay or
discharge every fine, penalty, interest and cost which may be added for
non-payment or late payment of such Additional Rent. If Tenant fails to
pay or discharge any such Additional Rent, Landlord shall have all
rights, powers and remedies provided in this Lease, in the case of
non-payment of the Base Rent. Tenant will also pay to Landlord, on
demand, as Additional Rent, interest at the lesser of the rate of
twelve percent (12%) per annum or the highest rate permitted by law
(the "Default Rate") on all overdue installments of Base Rent and
amounts of Additional Rent from the dates the same are due until paid
in full.
5.5.6. PAYMENT BY LANDLORD. If Tenant defaults in the payment
of any of the charges described in this Section 5 when such charges are
due and does not cure such default within five (5) days after receipt
of written notice from Landlord. Landlord may, at its option, pay the
same and the amount so paid, with interest at the Default Rate from the
date of payment, shall be deemed Additional Rent immediately payable by
Tenant to Landlord after written demand from Landlord. Payment by
Landlord of any such charges shall not be deemed to waive or release
Tenant's default or the right of Landlord, at Landlord's election, to
recover possession of the Leased Premises by reason of such default as
provided in this Lease.
5.6 ESCROW FOR TAXES. Notwithstanding the provisions of any
other section of this Lease to the contrary, (i) if required by the
holder of any first mortgage covering the Leased Premises or (ii) if an
Event of Default occurs, then upon receipt of written notice from
Landlord
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(which notice need be delivered only once), Tenant shall pay to Landlord,
together with Monthly Base Rent, an amount equal to one-twelfth (1/12th) of the
annual Taxes (the "Tax Escrow"). Landlord shall use the Tax Escrow to pay the
installments of Taxes when due. Landlord shall determine the amounts of the
monthly escrow payments based upon the most recent Tax statements. In addition
to the foregoing payments, on the first day of the month in which any
installment of Taxes is due, Tenant shall pay such additional amounts to
Landlord which, when added to the existing Tax Escrow (the "Make-Up Payment"),
is equal to the Tax obligation due that month. Notwithstanding the foregoing,
nothing contained herein makes Landlord liable for the payment of any Taxes in
excess of the amount of the then current balance of the Tax Escrow. If Tenant
pays the stipulated monthly Tax Escrow amounts when due, Tenant shall not be
liable for the penalty provided for in Section 5.5.5 hereof if said amounts are
less than the full amount of the Tax installment due, but the foregoing does not
limit Tenant's obligation to pay the Make-Up Payment when due.
6. LIENS. Subject to Section 13 hereof, Tenant will not create or
permit to be created or to remain, and will discharge (or immediately cause the
release of) any lien, encumbrance or charge (other than a lien, encumbrance or
charge created by Landlord) upon all or any part of the Leased Premises or upon
Tenant's leasehold interest in the Leased Premises. Nothing contained in this
Lease shall be construed as constituting the consent or request of Landlord,
expressed or implied, by inference or otherwise, to any contractor,
subcontractor, laborer or materialman for performance of any labor or services
or the furnishing of any materials for any improvement, alteration, addition or
repair of or to all or any part of the Leased Premises.
7. INDEMNIFICATION. To the fullest extent permitted by Law, Tenant
agrees to pay and protect, indemnify and hold Landlord harmless from and
against, any and all liabilities, damages, costs, expenses (including any and
all attorneys' fees and expenses of Tenant and any and all attorneys' fees and
expenses of Landlord), causes of action, suits, claims, demands or judgments of
any nature whatsoever arising from (a) any work or thing done during the Term
in, on or about the Leased Premises, by or on behalf of Tenant (b) injury to, or
the death of, persons or damage to property during the Term on the Leased
Premises or upon adjoining sidewalks, streets, alleys, or curbs, or in any
manner growing out of or connected with the use, non-use, conditions,
possession, operation, maintenance, management or occupation of the Leased
Premises or resulting from the condition of the Leased Premises or of adjoining
sidewalks, streets, alleys, or curbs, (c) any negligence on the part of Tenant
or any of its agents, contractors, servants, employees, licensees or invitees,
and (d) violation of any agreement or condition of this Lease or of Laws
affecting the Leased Premises, or the ownership, use or occupancy of the Leased
Premises (but excluding any negligence or willful misconduct by Landlord).
8. MAINTENANCE AND REPAIR.
8.1. ACCEPTANCE BY TENANT. Tenant's taking possession of the Leased
Premises constitutes acknowledgment that Tenant has received the Leased Premises
in good order and condition. Except as specifically provided in Section 1.2.6,
Landlord makes no warranty or
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representation regarding the physical condition of any part of the Leased
Premises or to the suitability or fitness of the Leased Premises or any part
thereof for any particular purpose.
8.2. TENANT'S MAINTENANCE OBLIGATIONS. During the Term hereof Tenant
shall, at its expense, take good care of the Leased Premises (including all of
Landlord's fixtures and appurtenances therein or thereon) and shall complete and
perform all maintenance and make all repairs and replacements to the Leased
Premises as soon as such repairs and replacements are necessary. Tenant's
obligations to maintain, repair and replace the Leased Premises shall exclude
only those items specifically set forth in Section 8.4 below, and shall
specifically include, without limitation, all (i) building systems located
within the Building and the Building's elevators and boilers (ii) broken or
damaged glass; (iii) damage by vandals (iv) the walls, ceilings, floors and
floor coverings (including carpets and tiles of the Building); (v) the exterior
improvements to the Land such as shrubbery, landscaping, fencing and exterior
lighting; (vi) snow plowing and ice removal and (vii) the common areas located
within the Building, including the common entrances, corridors, doors and
windows, stairways and lavatory facilities. All repairs made by the Tenant shall
be equal in quality and workmanship to the original work.
8.3. FAILURE TO MAINTAIN. If Tenant fails to comply with the provisions
of this Section 8, Landlord may give Tenant written notice of such failure to
comply, specifying the maintenance or repairs to be made by Tenant. If the
maintenance or repairs are not completed by Tenant within twenty (20) days after
said notice, Landlord may have the work done at Tenant's expense, and the cost
of the same shall become Additional Rent payable by Tenant to Landlord upon
written demand from Landlord. Notwithstanding the foregoing, if the maintenance
or repair is not susceptible of cure within twenty (20) days or if any cause
beyond Tenant's reasonable control (except for payments to be made by Tenant)
delays Tenant's completion of the maintenance or repair, said twenty (20) day
period shall be extended by the length of the delay so long as Tenant has
commenced the cure within said twenty (20) day period and diligently prosecutes
the same thereafter. If the required maintenance and repairs are of an emergency
nature or threaten the security or safety of the Building or persons, Landlord
may act on Tenant's behalf without notice to Tenant.
8.4. LANDLORD'S MAINTENANCE OBLIGATIONS. Landlord's sole repair and
maintenance obligations hereunder shall consist of maintaining and making all
needed repairs to the roof, exterior and bearing walls of the Building and
support beams, foundation columns and lateral support thereto and to repave (and
restripe) the parking lot when it has reached the end of its useful life, in
Landlord's reasonable determination. If repairs of these items are caused by
Tenant's negligence, Tenant's misuse of the Building or otherwise by Tenant's
failure to act, then Landlord shall make said repairs and charge Tenant all
direct costs associated with said repairs. Tenant shall pay said costs within
twenty (20) days after receipt of invoice. Tenant shall immediately notify
Landlord of any conditions or occurrences which relate to the Landlord's
maintenance obligations hereunder. Except as specifically provided herein in
this Section 8.4 and in Section 1.2 with respect to the Additional Improvements,
Landlord is not required to furnish any other services, utilities or work to the
Leased Premises during the Term hereof. Landlord
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shall, except in emergency situations, provide prior reasonable notice of its
entry onto the Leased Premises for purposes of completing Landlord's maintenance
obligations. The Landlord shall use reasonable efforts to complete its
maintenance obligations in a manner which does not unreasonably interfere with
Tenant or Tenant's business operations, but Landlord shall not be liable for any
damage caused to Tenant by virtue of Landlord performing its maintenance
obligations except to the extent that such damages arise out of Landlord's
negligence or willful misconduct.
9. ALTERATIONS AND ADDITIONS.
9.1 TENANT'S ALTERATIONS. Tenant may, at any time and from time to time
during the term of this lease and at its sole cost and expense, make additions
to or alterations, substitutions, removals or replacements of the Improvements
("Alterations") provided, however, that (a) the total market value of the Leased
Premises shall not be lessened by reason of any such Alterations, (b) any
Alterations shall be done in a good and workmanlike manner, (c) all such
Alterations shall be expeditiously completed and in compliance with all
applicable Laws, (d) the plans and specifications for all Alterations shall be
submitted to Landlord for Landlord's review and approval, which approval shall
not be unreasonably withheld or delayed and Landlord's review of the plans and
specifications shall be limited to determining whether (i) the Alterations
adversely affect the total market value of the Improvements and (ii) the plans
and specifications and the proposed Alterations comply with all applicable Laws,
(e) all Alterations shall be completed by contractors and subcontractors
reasonably acceptable to Landlord using as a basis of such review Landlord's
reasonable business concerns, (f) Tenant shall comply with all reasonable
insurance requirements of Landlord, together with any other reasonable
requirements of the holder of any mortgage covering the Leased Premises, and (g)
Tenant shall promptly pay all costs and expenses and discharge any and all liens
arising with respect to the construction of the Alterations. Title to all
Alterations made by Tenant, except trade fixtures, and other unattached personal
property shall become the property of Landlord at the termination of this Lease.
If the estimated cost of any proposed Alteration exceeds $25,000, upon the
written request of Landlord, Tenant shall deposit with Landlord payment and
performance or surety bonds or other security reasonably satisfactory to
Landlord to assure the completion of any such Alterations. Tenant shall procure
and pay for all required permits, certificates and licenses in connection with
Alterations.
9.2 LANDLORD'S ALTERATIONS. Landlord, except for purposes maintaining,
repairing and preserving the Leased Premises as required by Landlord herein,
shall not alter the Improvements. Notwithstanding the foregoing, however,
Landlord shall at all times have the right to further improve the Land, in its
reasonable discretion with Tenant's prior written approval, which approval shall
not be unreasonably withheld, delayed or denied including without limitation,
the right to erect onto the Land parking structure(s) or additional building(s)
provided that no such improvements to the Land shall unreasonably interfere with
access to and/or use of the Leased Premises.
10. INSURANCE.
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10.1. COVERAGE. Tenant will keep the Leased Premises insured
continuously during the term of this Lease by the kinds of insurance and in the
amounts set forth on Exhibit D. Notwithstanding the foregoing, Landlord may
elect, in lieu of Tenant, to obtain any of the required insurance coverages,
provided the cost of same is competitive with the coverages available to Tenant,
whereupon Tenant shall pay to Landlord the premium cost of such coverage.
10.2. EVIDENCE OF INSURANCE. Tenant shall deliver to Landlord promptly
after the execution and delivery of this Lease, original or duplicate policies,
or certificates or binders evidencing such insurance ("Insurance Evidence").
Tenant shall deliver to Landlord, at least thirty (30) days prior to the
expiration of any such insurance, additional Insurance Evidence regarding the
renewal of such insurance and the payment of all required premiums. On each
anniversary of the Commencement Date of this Lease, Tenant shall deliver
Insurance Evidence to Landlord, to the effect that there is then in force all
such insurance which is then required to be maintained by Tenant.
10.3. FAILURE TO INSURE. If Tenant fails to effect, maintain or renew
any kind of insurance required pursuant to this Section 10, or to deliver to
Landlord any Insurance Evidence, Landlord may, upon ten (10) days' written
notice to Tenant of its intention so to do, procure such insurance, and any sums
expended shall be deemed Additional Rent payable by Tenant on demand to
Landlord. Procurement by Landlord of any such insurance shall not be deemed to
waive or release the default of Tenant, or the right of Landlord, at Landlord's
option, to recover possession of the Leased Premises by reason of such default
as provided in this Lease. Tenant covenants and agrees to pay to Landlord any
and all damages which Landlord may sustain by reason of Tenant's failure to
obtain and maintain such insurance, which damages shall not be limited to the
amount of all required premiums.
10.4. SEPARATE INSURANCE. Tenant shall not take out separate insurance
covering the Leased Premises concurrent in form or contributing in the event of
loss with that required in this Section 10 unless Landlord is included as a
named insured, with loss payable as provided in this Section 10. Tenant shall
immediately notify Landlord whenever any such separate insurance is taken out
and shall promptly deliver the policy or policies or certificates evidencing the
same.
11. CONDEMNATION AND CASUALTY LOSS.
11.1 REPAIR. Except as provided elsewhere, if the Leased Premises, or
any portion thereof, are damaged or destroyed by fire or any other peril,
Landlord shall with due diligence commence and complete the reconstruction and
repair of the Leased Premises, so that upon completion, the same shall be, to
the extent reasonably possible, identical to their condition prior to such
damage or destruction; provided, however, (i) if such damage is caused by an
uninsured casualty (whether or not Tenant has maintained all insurance required
to be maintained by Tenant pursuant to this Lease) excluding casualties caused
by Landlord's negligence or willful misconduct; or (ii) in Landlord's
determination, the Leased Premises cannot be fully reconstructed and repaired
within three hundred (300) days; or (iii) the Leased Premises or if any portion
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thereof are damaged or destroyed within the final eighteen (18) months of the
term of the lease. Landlord or Tenant shall have the right, for a period of
thirty (30) days following receipt of notice by Tenant to Landlord of such
damage or destruction, to terminate this Lease by written notice to the other
delivered within said thirty (30) day period. If Tenant so terminates the Lease,
Tenant shall not be obligated to restore the Leased Premises but shall
nonetheless remain liable for all Base Rent and Additional Rent for the
remainder of the Lease Term which would have run but for the Tenant's
termination.
11.2 PARTIAL DESTRUCTION. In the event of a partial damage or
destruction by fire or other casualty, including all acts of vandalism to the
Leased Premises, (but excluding casualty caused by Landlord's negligence or
willful misconduct) for which Tenant reasonably estimates the cost of
reconstruction or repair to be less than $50,000, in any one instance, Tenant
shall with due diligence commence and complete the reconstruction and repair of
the Leased Premises, so that upon completion, the same shall be, to the extent
reasonably possible, identical to their condition prior to such damage or
destruction. Tenant shall give notice to Landlord, and Landlord shall make
available to Tenant any insurance proceeds received as a result of any claim
filed with respect to the event causing the partial damage or destruction.
11.3 PROCEEDINGS. Subject to Tenant's rights in Section 11.4 below,
Landlord shall have the responsibility for taking all actions and initiating all
proceedings necessary in order to obtain any condemnation or insurance award in
connection with any taking or casualty; provided, however, that all expenses
(including, without limitation, reasonable attorneys' fees) incurred by Landlord
in the course of obtaining such award shall be reimbursed to Landlord out of the
proceeds of such award.
11.4 CONDEMNATION. If all or any substantial part of the Leased
Premises shall be taken or appropriated by any public authority under the power
of eminent domain or conveyance in lieu thereof, either party hereto shall have
the right at its option to terminate this Lease, and Landlord shall be entitled
to any condemnation award. Tenant may seek a separate award applicable to
Tenant's business interruption and loss. If a part of the Leased Premises shall
be so taken or appropriated and neither party hereto shall elect to terminate
this Lease, the rental thereafter to be paid shall be adjusted on a pro rata
basis based on the amount of the area of the Leased Premises taken. Before
Tenant may terminate this Lease by reason of taking or appropriation as above
provided, such taking or appropriation shall be so substantial as to materially
prevent Tenant's use and occupancy thereof.
11.5 EFFECT OF TERMINATION. Except as provided in section 11.4 hereof,
Tenant shall not be entitled to any compensation or damages from Landlord for
loss of the use of the whole or any part of the Leased Premises, Tenant's
personal property or any inconvenience or annoyance occasioned by such
destruction, reconstruction or restoration or to any abatement in the rent and
other charges payable hereunder. In the event of any termination of this Lease
in accordance with this Section 11, the parties hereto shall have no further
obligation to one another arising from this Lease upon the surrender of the
possession of the Leased Premises to Landlord.
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except for items which have theretofore accrued and are then unpaid. Any items
prepaid by Tenant for a period beyond the date of termination shall be promptly
refunded to Tenant. Tenant, at its option, may obtain any policies of insurance
insuring itself against loss of use, business interruption, or any consequential
damages arising out of the damage or destruction to the Leased Premises
including Tenant's expenses associated with temporary move and relocation during
any periods of repair or reconstruction.
12. ASSIGNMENT AND SUBLETTING.
12.1 ASSIGNMENT BY TENANT. Except as allowed by Section 14.5 of this
Lease, Tenant shall not assign or in any manner transfer or encumber this Lease
or the Leased Premises or any interest in or of the same, nor sublet all or any
part of the Leased Premises, nor permit occupancy by anyone with, through or
under it, without the previous written consent of Landlord, which consent shall
not be unreasonably withheld by Landlord. Landlord's basis for withholding its
consent shall be limited to (i) the creditworthiness of the proposed assignee or
subtenant and in such respect the Landlord may require that the proposed
assignee or subtenant have a net worth in excess of 10 million dollars, has
conducted business operations for at least three (3) years and that the
financial statements, credit reports and other third party references which
Landlord reasonably requests to be provided to Landlord (and which reports the
Tenant shall provide) are satisfactory to Landlord in its reasonable and good
faith determination and (ii) the intended use to which the proposed assignee or
subtenant intends to put the Leased Premises and in such respect Landlord may
require that the Leased Premises be used only primarily for school, office, or
research facility purposes, that the proposed use complies with all Laws, that
the proposed use does not require a change in zoning classification or require a
special or conditional use permit, that the proposed use does not materially
increase the risk of casualty or damage to the Leased Premises compared with
Tenant's use or involve research on live animals and that the nature of the
proposed use by the proposed assignee or subtenant will not result in more
Hazardous Materials (as defined in Section 16.1 of this Lease) being used,
generated or disposed of than are used, generated or disposed of by Tenant.
Notwithstanding any provision of this Lease to the contrary, Landlord may
withhold its consent to any proposed assignment or sublease of the Leased
Premises if either the transaction or the proposed assignee or subtenant is not
consented to by the holder of the first mortgage covering the fee title to the
Leased Premises. Consent by Landlord to one or more assignment of this Lease or
to one or more subletting of the Leased Premises shall not operate as a waiver
of Landlord's rights under this Section 12 to any subsequent assignment or
subletting. No assignment or subletting shall release Tenant or any guarantor of
this Lease of any of its obligations under this Lease or be construed or taken
as a waiver of any of Landlord's rights or remedies pursuant to this Lease.
Notwithstanding the foregoing, Tenant may, without requirement of Landlord's
prior written consent, sublease areas not to exceed cumulatively twenty percent
(20%) of the area of the Leased of Premises pursuant to written subleases (the
"Subleases"). Tenant shall deliver true and correct copies of all Subleases to
Landlord promptly upon execution thereof. Each Sublease shall specifically
provide that (i) the Sublease is expressly subordinate to this Lease; (ii) the
tenant under the Sublease shall conform to all requirements of this Lease (other
than those relating to the payment of Base Rent) including, without limitation,
those regarding the use, maintenance and
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liability insurance of the Leased Premises and such tenant's activities therein;
(iii) that the term of the Sublease shall not extend beyond the Term of this
Lease and that upon the termination of this Lease prior to the Termination Date,
the Sublease and all rights thereunder shall terminate or, at the option of
Landlord, the Sublease shall remain in full force and effect and the tenant
under the Sublease shall attorn to Landlord as its landlord; and (iv) the tenant
under the Sublease shall promptly execute and deliver to Landlord and/or its
mortgagee such estoppel certificates, subordination and attornment agreements
and other agreements and certifications as reasonably requested by Landlord
and/or its mortgagee. The assignment by Tenant of its interest in this Lease to
(i) its parent, subsidiary or affiliated entity or (ii) another entity pursuant
to a merger, consolidation or the sale of substantially all of Tenant's stock or
assets is permitted without Landlord's consent hereunder provided the assignee
assumes in writing all of the obligations of Tenant under the Lease, but that
any such assignment shall not release Tenant from its liability hereunder.
12.2 LANDLORD'S ASSIGNMENT. Landlord shall have the right to assign its
interest in this Lease and in the rentals payable by Tenant hereunder. Such
assignment may be either absolute or as collateral security for the indebtedness
secured by any mortgage covering the Leased Premises. Tenant acknowledges and
agrees that from and after the receipt by Tenant of written notice from Landlord
or its mortgagee, all rents and other sums which are the subject matter of the
assignment shall be paid to said mortgagee (or as the mortgagee otherwise
directs) at the place of payment designated in such notice. Tenant's obligation
to make payment to the mortgagee pursuant to any loan assignment to said
mortgagee is absolute and unconditional and Tenant shall be relieved of
liability to Landlord with respect to any payment due hereunder upon delivery of
such payment to Landlord's mortgagee after receipt of written direction from
said mortgagee. Upon such assignment, the mortgagee shall have the sole right to
exercise all rights, privileges and remedies (either in its own name or in the
name of Landlord for the use and benefit of the mortgagee) which by the terms of
the Lease or applicable law are permitted or provided to be exercised by the
Landlord.
13. PERMITTED CONTESTS. Notwithstanding any provision to the contrary
contained in this Lease, Tenant shall not be required to pay, discharge or
remove any tax, assessment, levy, fee, charge or lien referred to in this Lease,
so long as Tenant shall contest in good faith at its own expense the amount or
the validity of the same by appropriate proceedings which shall operate to
prevent the collection of, or realization upon, the tax, assessment, levy, fee,
charge or lien so contested and the sale of all or any part of the Leased
Premises to satisfy the same. Pending any such proceedings, Landlord shall not
have the right to pay, remove, or cause to be discharged the tax, assessment,
levy, fee, charge or lien being contested. In the event of such contest, Tenant
shall furnish reasonable security (in the form of bond or otherwise) as may be
required by Landlord to ensure payment and prevent any sale, foreclosure or
forfeiture of the Leased Premises by reason of such contest. Tenant further
agrees that (a) such contest shall be prosecuted to a final conclusion
diligently, (b) Tenant will pay and hold Landlord harmless against any and all
losses, judgments, decrees and costs (including all attorneys' fees and
expenses) in connection with the same, and (c) Tenant will, promptly after the
Final determination of such contest, fully pay and discharge the amounts which
shall be levied, assessed, charged or imposed
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or be determined to be payable, together with all penalties, fines, interest,
cost and expenses resulting from such contest.
14. DEFAULT.
14.1. EVENTS OF DEFAULT. Any of the following occurrences or acts shall
constitute an event of default (sometimes referred to herein as a "Default" or
an "Event of Default") under this Lease:
14.1.1. LEASE TERMS. Tenant (a) fails to make payment of any
installment of Base Rent or Additional Rent within five (5) days after
Landlord's written notice of default to Tenant which notice shall also
be delivered to Guarantor and to any party listed in Section 14.5.2
hereof or (b) fails to observe or perform any of Tenant's other
covenants, agreements or obligations pursuant to this Lease and fails
to cure such non-monetary default within thirty (30) days after
Landlord's written notice to Tenant specifying such default or
defaults, which notice shall also be delivered to Guarantor and to any
party listed in Section 14.5.2 hereof;
14.1.2. INSOLVENCY. Tenant files a petition in bankruptcy or
is adjudicated a bankrupt or insolvent or makes an assignment for the
benefit of its creditors or admits in writing its inability to pay its
debts generally as they become due and such petition, adjudication,
assignment or admission is not discharged or denied within sixty (60)
days;
14.1.3. APPOINTMENT. A receiver, trustee or liquidator of all
or substantially all of the property of Tenant or of the Leased
Premises is appointed in any proceeding brought by Tenant and such
appointment is not discharged within sixty (60) days;
14.1.4. ABANDONMENT. The Leased Premises are abandoned or left
unoccupied for five (5) calendar days (excluding scheduled semester and
holiday breaks), and such action constitutes a default under any
mortgage granted by Landlord covering the Leased Premises.
14.2. EXTENSION OF CURE PERIOD. Notwithstanding the foregoing
provisions of this Section 14, if a default not related to the payment of
amounts to Landlord cannot be cured within the specified time period due to
causes beyond Tenant's reasonable control (except for payments to be made by
Tenant), the specified period shall be extended a reasonable period of time (not
to exceed sixty (60) days, provided Tenant has commenced the cure within thirty
(30) days after receipt of notice of default and diligently prosecutes the same
thereafter.
14.3. TERMINATION. If any event of default shall have happened and be
continuing, Landlord shall have the right (but not the obligation) to terminate
this Lease by written notice to Tenant, which notice shall also be delivered to
the party listed in Section 14.5.2 hereof. Thereupon, all right, title and
interest of Tenant shall immediately expire as fully and completely
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as if the date specified were the Termination Date. In that event, Tenant shall
then peaceably and quietly quit the Leased Premises and surrender the same to
Landlord, but Tenant shall remain liable as provided in Section 14.4 of this
Lease. If such notice is given, Landlord shall have the immediate right of
reentry and possession of the Leased Premises and the right to remove all
persons and property from the Leased Premises. Upon taking possession, Landlord
may make such alterations and repairs to the Leased Premises as Landlord deems
necessary and appropriate and Landlord may, from time to time, relet all or any
portion of the Leased Premises for such term or terms and such rental or rentals
and upon such other terms and conditions as Landlord, it in its sole discretion,
deems advisable.
14.4. LANDLORD'S REENTRY WITHOUT TERMINATION. Landlord may elect to
reenter and obtain possession of the Leased Premises by reason of or following
an event of default, with or without terminating this Lease in the manner set
forth in Section 14.3 above. Thereupon, Landlord shall have the right, at
Landlord's option and without notice: (a) to repair or alter the Leased Premises
in such manner as Landlord may deem necessary or advisable so as to put the
Leased Premises in good order and to make the same rentable and (b) to relet the
Leased Premises or any part of the Leased Premises. No such reentry or taking of
possession of the Leased Premises by Landlord shall be construed as an election
on Landlord's part to terminate this Lease unless a notice of such intention be
given to Tenant or unless the termination of this Lease is decreed by a court of
competent jurisdiction.
14.4.1. PAYMENT OF LANDLORD'S EXPENSES. If Landlord does
reenter the Leased Premises, Tenant shall pay to Landlord on demand all
expenses incurred by Landlord in (a) obtaining possession, (b)
altering, repairing and putting the Leased Premises in good order and
condition, and (c) reletting the same, including (i) reasonable fees of
attorneys, architects, and other experts and (ii) any other legitimate
expenses or commissions.
14.4.2. CONTINUING PAYMENT OF RENT. In the event of any
expiration or termination of Term of this Lease or re-entry or
possession of the Leased Premises by reason of the occurrence of an
Event of Default, Tenant shall pay to Landlord all Base Rent,
Additional Rent and all other sums required to be paid by Tenant
through and including the date of such expiration, termination, reentry
or repossession; and thereafter, until the end of what would have been
the Term of this Lease in the absence of such expiration, termination,
re-entry or re-possession (whether or not the Leased Premises shall
have been relet) and Tenant shall be liable to Landlord for and shall
pay to Landlord, as liquidated and agreed current damages, all Base
Rent, Additional Rent and all other sums which would be payable under
this Lease by Tenant in the absence of such expiration, termination,
re-entry or repossession less the net proceeds, if any, of any
reletting affected for the account of Tenant after deducting therefrom
the expenses set forth in Section 14.4.1 hereof. Said current damages
specifically include, in addition to any and all other damages
recoverable by Landlord hereunder, an amount equal to $464,625
representing the five (5) month's free rent allowed to Tenant hereunder
pursuant to Section 5.2 (the "Special Damages"). Except for Special
Damages, which shall be immediately due
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and payable in full upon Landlord's termination of this Lease or
re-entry or possession of the Leased Premises as a result of the
occurrence of an Event of Default. Tenant shall pay such current
damages on the days on which Base Rent would be payable under this
Lease in the absence of such expiration, termination, re-entry or
repossession and Landlord shall be entitled to recover the same from
Tenant on each day. Landlord shall have, from time to time, the right
to begin and maintain successive actions or other legal proceedings
against Tenant for the recovery of such amounts and such other sums
payable pursuant to this Lease. At any time after such termination or
repossession, whether or not Landlord shall have collected any current
damages as aforesaid, Landlord shall be entitled to recover from
Tenant, and Tenant shall pay to Landlord on demand, as and for
liquidated and final damages for Tenant's default hereunder (in
addition to Landlord's expenses set forth in Section 14.4.1 hereof) an
amount equal to the then present value of the excess of the Base Rent
and other sums or charges reserved under this Lease from the date of
such termination or repossession for what would be the then unexpired
Term if the same had remained in effect, over the amount of rent Tenant
establishes that Landlord could in all likelihood actually receive for
the Leased Premises for the same period. Said present value to be
arrived at on the basis of a discount of six percent (6%) per annum.
Tenant's liability hereunder shall survive the termination or
expiration of this Lease or any action to secure possession of the
Leased Premises. Nothing contained in this Lease shall be deemed to
require Landlord to wait until the Termination Date to begin such
action or other legal proceedings.
14.5 SPECIAL PROVISIONS REGARDING TENANT'S MORTGAGEE.
14.5.1 LEASEHOLD MORTGAGE. Tenant may grant a mortgage
covering its leasehold interest hereunder (a "Leasehold Mortgage") to
one institutional lender (which lender and its successors and assigns
are referred to herein as the "Holder") Tenant may, at any one time,
allow only one Leasehold Mortgage and any Leasehold Mortgage shall at
all times be subordinate to the lien of any and all mortgages which
Landlord grants covering the fee title to the Leased Premises. If
Tenant desires to change the identity of the Holder of the Leasehold
Mortgage, Tenant shall notify Landlord in writing and, provided Tenant
is not in default hereunder Landlord shall prepare, and both parties
shall execute, an amendment to this Lease setting forth the new name
and address of the Holder of the Leasehold Mortgage
14.5.2 NOTICE TO HOLDER OF LEASEHOLD MORTGAGE. Landlord will
give to the Holder simultaneous with service on Tenant a duplicate of
any and all notices or demands which are required by this Lease to be
given by Landlord to Tenant in the same form and manner as are allowed
by Section 17 of this Lease. As of the date of this Lease, the name and
address of the Holder are as follows:
The Provident Bank
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
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Attn: Xx. Xxxx Xxxxxxxx
Fax Number: (000) 000-0000
Telex Number: 214-109
14.5.3. RIGHT OF HOLDER TO CURE DEFAULTS. Upon a default
under this Lease, the Holder may, at it option, cure any defaults of
Tenant hereunder and Landlord agrees to accept such cure from the
Holder in the same manner as if the cure was performed by Tenant.
Landlord shall not terminate this Lease nor Tenant's right of
possession as the result of a Tenant default if, within the period
Tenant is expressly allowed in this Lease to cure such default, such
default is cured or caused to be cured by the Holder. Notwithstanding
the foregoing, except as provided for herein, there shall be no
obligation on the part of the Holder to cure any Tenant default under
this Lease and the Holder shall not be obligated for any of Tenant's
payment or performance obligations under this Lease. If no notice of
default is required by the terms of this Lease, Landlord shall not
terminate this Lease or Tenant's right to possession unless the Holder
fails to cure such default within ten (10) days after notice by
Landlord to the Holder of the occurrence of such default.
14.5.4 AMENDMENTS TO LEASE. Landlord will not, without prior
written notice to the Holder, enter into any amendment of this Lease
which reduces the original term of this Lease or which otherwise
materially and adversely affects, in the reasonable determination of
Landlord, the collateral interest of the Holder in the Leased Premises.
14.5.5 ESTOPPEL CERTIFICATES. Upon receipt of a written
request therefor (but no more frequently than once each calendar year),
Landlord shall execute an estoppel certificate for the benefit of the
Holder certifying, if true, that this Lease has not been modified and
is in full force and effect or, if there has been a modification of
this Lease, that this Lease is in full force and effect as modified,
stating such modifications; specifying the date to which the Base Rent
has been paid; stating whether or not, to the knowledge of the
Landlord, Tenant is in default and, if so, stating the nature of such
default; and stating which options to extend the term of this Lease
have been executed, if any.
14.5.6 ASSUMPTION OF TENANT'S INTEREST; RECOGNITION OF HOLDER
AS TENANT. If the Holder succeeds (after the expiration of any
applicable period of redemption) to the leasehold interest of Tenant
pursuant to foreclosure proceedings or if the Holder otherwise succeeds
to the Leasehold interest of Tenant by deed in lieu of foreclosure or
by any other manner, then (i) upon receipt of an instrument from the
Holder assuming, without condition or qualification, all of Tenant's
obligations under this Lease and (ii) upon receipt by Landlord of any
Base Rent or Additional Rent then owning and unpaid under this Lease
(which conditions are referred to as the "Recognition Conditions") then
Landlord shall recognize the Holder as Tenant under this Lease and the
Holder shall thereafter be fully bound under the terms and conditions
of this Lease and shall be entitled to the rights of Tenant under this
Lease, Further, if this Lease is rejected or terminated under
I I U.S.C. Section 365, the Lease, at the option of the Holder (by
notice in writing delivered to Landlord within ten (10) days after the
rejection or termination of this Lease), shall not be deemed to be
terminated and upon such election, Landlord shall, upon satisfaction of
the Recognition Conditions, recognize the Holder as Tenant under this
Lease and the Holder shall be fully bound under the terms and
conditions of this
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Lease and shall be entitled to the rights and benefits of Tenant under this
Lease (or, alternatively and at Landlord's option. Landlord and the Holder shall
execute a substitute lease for the remainder of the term of this Lease,
identical in all respects to this Lease, except that the Holder shall be named
as the Tenant thereunder). This provision shall be effective and self operative
without the execution of any further instrument on the part of any of the
parties hereto, except as provided for herein.
15. Additional Rights of Landlord.
15.1. Enforcement Rights. No right or remedy in this Lease conferred
upon or reserved to Landlord is intended to be exclusive of any other right or
remedy, and each and every right and remedy of Landlord shall be cumulative and
in addition to any other right or remedy given Landlord pursuant to this Lease,
or now or at any time existing at law or in equity. In addition to the other
remedies provided by this Lease, Landlord shall be entitled to (a) injunctive
relief in case of the violation or attempted or threatened violation of any of
the covenants, agreements, conditions or provisions of this Lease, (b) a decree
compelling performance of any of the covenants, agreements, conditions or
provisions of this Lease, or (c) any other remedy allowed to Landlord at law or
in equity.
15.2. Nonwaiver. The failure of Landlord or Tenant to insist at any
time upon Tenant's or Landlord's strict performance of any of the covenants or
agreements contained in this Lease shall not be construed as a waiver or a
relinquishment of such covenants or agreements for the future. Landlord's
receipt of any Base Rent or Additional Rent, with knowledge of a breach by
Tenant of any covenant or agreement contained in this Lease shall not be deemed
a waiver of such breach. No waiver by either party of any provision of this
Lease shall be deemed to have been made unless expressed in writing and signed
by the party waiving the same.
15.3. Waiver of Redemption. Tenant waives for itself and all those
claiming under it, any rights which it may have under any present or future Law
(a) to redeem the Leased Premises after termination of Tenant's right of
occupancy by order or judgment of any court or by any legal process or writ or
(b) which exempts property from liability for debt or for distress for rent.
15.4. Attorney's Fees. If either party defaults in the performance of
any of its obligations under this Lease, and the non-defaulting party commences
an action to enforce its rights and remedies hereunder, the losing party shall
pay to the prevailing party all costs and expenses incurred by the prevailing
party in enforcing its rights, including the prevailing party's reasonable
attorneys' fees.
15.5. Litigation. If Landlord shall without fault on its part, be made
a party to any litigation commenced against Tenant, and if the Tenant shall fail
to provide the other with counsel reasonably approved by Landlord, Tenant shall
pay all costs and reasonable attorneys' fees incurred by Landlord in connection
with such litigation. Landlord makes the similar covenant in favor of Tenant.
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16. Environmental Matters
16.1 Defined Terms.
(01) "Claim" shall mean and include any demand, cause of action,
proceeding or suit for any one or more of the following: 1)
actual or punitive damages, losses, injuries to person or
property, damages to natural resources, fines, penalties,
interest, contribution or settlement; 2) the costs of such
investigations, feasibility studies, information requests,
health or risk assessments, or Response (as hereinafter
defined) actions; and 3) enforcing insurance, contribution or
indemnification agreements.
(02) "Environmental Laws" shall mean and include all federal, state
and local statutes, ordinances, regulations and rules relating
to environmental quality, heath, safety, contamination and
clean-up, including, without limitation, the Clean Air Act, 42
U.S. C. Section 7401 et seg.; the Clean Water Act, 33 U.S.C.
Section 1251 et seq. and the Water Quality Act of 1987; the,
Federal Insecticide, Fungicide, and Rodenticide Act ("FIFRA"),
7 U.S.C. Section 136 et seg.; the Marine Protection, Research,
and Sanctuaries Act, 33 U.S.C., Section 1401 et seg.; the
National Environmental Policy Act, 42 U.S.C. Section 4321 et
seg.; the Noise Control Act, 42 U.S.C. Section 4901 et seq.;
the Occupational Safety and Health Act. 29 U.S.C. Section 651
et seg.; the Resource Conservation and Recovery Act ("RCRA"),
42 U.S.C. Section 6901 et seq, as amended by the Hazardous and
Solid Waste Amendments of 1984; the Safe Drinking Water Act,
42 U.S.C. Section 300 et seg.; the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C.
Section 9601 et seg., as amended by the Superfund Amendments
and Reauthorization Act; the Emergency Planning and Community
Right-to-Know Act, and Radon Gas and Indoor Air Quality
Research Act; the Toxic Substances Control Act ("TSCA"), 15 U.
S. C. Section 2601 et seg.; the Atomic Energy Act, 42 U.S.C.
Section 2011 et seg.; the Nuclear Waste Policy Act of 1982, 42
U.S.C. Section 10101 et seg.; the Minnesota Environmental
Response and Liability Act ("XXXXX"), Minn. Stat. Ch. 1158;
and the state super lien and environmental clean-up statutes,
with implementing regulations and guidelines, as amended from
time to time. Environmental Laws shall also include all state,
regional, county, municipal and other local laws, regulations,
and ordinances insofar as they are equivalent or similar to
the federal laws recited above or purport to regulate
Hazardous Materials (as hereinafter defined).
(03) "Hazardous Materials" shall mean and include the following,
including mixtures thereof: any hazardous substance,
pollutant, contaminant, waste, by-product or constituent
regulated under CERCLA; oil and petroleum products and natural
gas, natural gas liquids, liquefied natural gas and synthetic
gas usable for fuel, pesticides regulated under the FIFRA;
asbestos and asbestos containing materials,
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PCBS, and other substances regulated under the TSCA; source
material, special nuclear material, by-product material and
any other radioactive materials or radioactive wastes, however
produced, regulated under the Atomic Energy Act or the Nuclear
Waste Policy Act; chemicals subject to the OSHA Hazard
Communication Standard, 29 C.F.R. Section 1910.1200 et seg.;
and industrial process and pollution control wastes, whether
or not hazardous within the meaning of RCRA; any substance
whose nature and/or quantity or existence, use, manufacture,
disposal or effect render it subject to federal, state or
local regulation, investigation, remediation, or removal as
potentially injurious to public heath or welfare.
(04) "Use" means to manage, generate, manufacture, process, treat,
store, use, re-use, refine, recycle, reclaim, blend or bum for
energy recovery, incinerate, accumulate speculatively,
transport, transfer, dispose of, or abandon Hazardous
Materials.
(05) "Release, or Released" shall mean any actual or threatened
spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, or
disposing of Hazardous Materials into the environment, as
'environment' is defined in CERCLA.
(06) "Response" or "Respond" shall mean action taken in compliance
with Environmental Laws to correct, remove, remediate,
cleanup, prevent, mitigate, monitor, evaluate, investigate,
assess or xxxxx the Release of a Hazardous Material.
16.2 Tenant's Obligations with Respect to Environmental Matters.
Subject to the provisions of section 16.7, during the term of this Lease, Tenant
shall comply at its own cost with all Environmental Laws. Tenant shall not Use,
or authorize the Use of, any Hazardous Materials on the Leased Premises,
including installation of any underground storage tanks, without prior written
disclosure to and approval by the Landlord except that Tenant may use products
commonly used in office settings provided such use complies with Environmental
Laws. Tenant shall not take any action that would subject the Leased Premises to
permit requirements under RCRA for storage, treatment or disposal of Hazardous
Materials. Tenant shall not dispose of Hazardous Materials in dumpsters provided
for tenant use. Tenant shall not discharge Hazardous Materials into Project
drains or sewers except in amounts allowed under Environmental Laws. Tenant
shall not cause or allow the Release of any Hazardous Materials on, to, or from
the Project. Tenant shall arrange at its own cost for the lawful transportation
and off-site disposal of all Hazardous Materials that Tenant generates.
16.3 Copies of Notices. During the term of this Lease, Tenant shall
provide Landlord promptly with copies of all summons, citations, directives,
information inquiries or requests, notices of potential responsibility, notices
of violation or deficiency, orders or decrees, Claims, complaints,
investigations, judgments, letters, notices of environmental liens or Response
actions in progress, and other communications, written or oral, actual or
threatened, from the United
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States Environmental Protection Agency, Occupational Safety and Heath
Administration, Minnesota Pollution Control Agency, or Other federal, state or
local agency or authority, or any other entity or individual, concerning any
Release of a Hazardous Material on, to or from the Leased Premises, the
imposition of any lien on the Leased Premises, or any alleged violation of or
responsibility under Environmental Laws. Landlord and Landlord's beneficiaries,
agents and employees shall have the right to enter the Leased Premises and
conduct appropriate inspections or tests in order to determine Tenant's
compliance with Environmental Laws.
16.4 Tests and Reports. If Landlord has reasonable basis for concern,
in Landlord's opinion, with respect to possible environmental issues affecting
the Leased Premises caused by Tenant, then upon written request by Landlord,
Tenant shall provide Landlord with the results of appropriate reports and tests,
with transportation and disposal contracts for Hazardous Materials, with any
permits issued under Environmental Laws, and with any other applicable documents
to demonstrate that Tenant complies with all Environmental Laws relating to the
Leased Premises.
16.5 Tenant's Obligation to Respond. If Tenant's Use of Hazardous
Materials at the Leased Premises gives rise to liability or to a Claim under any
Environmental Law, causes a significant public heath effect, or creates a
nuisance, Tenant shall promptly, at its expense, take all applicable action in
Response.
16.6 Indemnification. Tenant shall indemnify, defend, and hold harmless
Landlord, its beneficiaries, its lenders, any managing agents and leasing agents
of the Leased Premises, and their respective agents, partners, officers,
directors and employees from and against any and all Claims arising from or
attributable to any breach by Tenant of any of its warranties, representations
or covenants in this Article. The obligations this section 16.6 shall survive
the termination or expiration of this Lease.
16.7 Landlord's Representations Regarding Environmental Matters
16.7.1 Deliverv of Existing Reports. Landlord has delivered to Tenant
the environmental testing reports affecting the Leased Premises
described on Exhibit E attached hereto incorporated herein by reference
(the "Existing Environmental Reports"). Tenant is deemed to take
occupancy of the Leased Premises having knowledge of and subject to all
matters referenced or disclosed in the Existing Environmental Reports
(the "Existing Conditions").
16.7.2 Representations and Indemnity of Landlord. Landlord represents
to Tenant that, except for the Existing Conditions disclosed by the
Existing Environmental Reports, Landlord is not aware of any Claim (or
threat or facts which would form the basis of a Claim) relating to the
violation of Environmental Laws pertaining to the Leased Premises or
the presence of any Hazardous Materials on, under or about the Leased
Premises. Except for (i) the Existing Conditions and (ii) matters
caused, created or allowed by
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Tenant, Tenant's employees, agents, contractors or invitees, Landlord
shall indemnify, defend and hold Tenant and its beneficiaries, lenders
and agents and their respective agents, partners, officers, directors
and employees from and against any and all Claims arising from or
attributable to the violation of Environmental Laws affecting the
Leased Premises or related to or arising from the presence of Hazardous
Materials on, under or about the Leased Premises. Landlord's
obligations herein under shall survive the termination or expiration of
this Lease.
17. Notices. Any notices required or permitted to be given hereunder
shall be in writing and shall be effective (i) when delivered personally, (ii)
when received by overnight courier service or facsimile communications (provided
that a copy of such notice is deposited in the United States mail within one (1)
business day of the facsimile transmission) or (iii) three (3) days after being
deposited in the United States Mail (sent certified or registered, return
receipt requested), in each case addressed as follows (or to such other address
as the parties hereto may designate in the manner set forth herein):
As to Landlord: Mortenson Properties, Inc.
000 Xxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
Attn: Director of Asset Management
Fax: 000-0000
With a copy to: Xxxxxxx X. Xxxxxxxxx
Xxxxxxxxx & Xxxxxx P.L.L.P.
4200 IDS Center
00 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Fax: 000-0000
As to Tenant (before Delivery Date): Xxxxx Institute, Ltd.
0000 Xxxx Xxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Xxx Xxxxxxxx
President
Fax: 000-0000
As to Tenant (after Delivery Date): Xxxxx Institute, Ltd.
0000 Xxxxxxxxx Xxxxx
Xxxxxxx Xxxxxxx, XX
Attn: President
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With a copy to: Xx. Xxxxxx Xxxxxx Xxxx
X'Xxxxxx & Xxxxxx
Suite 2900
00 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
Fax: 312/000-0000
With a copy to: Career Education Corporation
Suite 790
0000 Xxxx Xxxxxxx Xxxx
Xxxxxxx Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx
Chief Financial Officer
Fax: 847/000-0000
18. Subordination and Non-Disturbance. This Lease is and shall be
subordinate and subject in all respects to any and all mortgages thereon and to
any mortgages covering all or any part of the Leased Premises, that may now or
hereafter affect the Leased Premises and to all renewals, modifications or
replacements thereof. Tenant shall execute such subordination agreements as the
Landlord may reasonably require. Such subordination shall be subject to the
condition that so long as this Lease is in full force and effect and so long as
no Event of Default shall have occurred and be continuing hereunder, Tenant's
possession and use of the Leased Premises in accordance with the provisions of
this Lease shall not be affected or disturbed by reason of this subordination to
or any modification of or default under the ground or underlying lease or
mortgage. If the ground or underlying lessor and/or mortgagee or any successor
in interest shall succeed to the rights of the Landlord under this Lease,
whether through possession, surrender, assignment, subletting, judicial or
foreclosure action, or delivery of a deed or otherwise, Tenant will attorn to
and recognize such successor landlord as Tenant's landlord and the successor
landlord will accept such attornment and recognize Tenant's rights of possession
and use of the Leased Premises in accordance with the provisions of this Lease.
Without limiting Tenant's obligation to execute and deliver the subordination
agreements provided for herein, the subordination and attornment provisions of
this section shall be self operative in the absence of the execution and
delivery of such instruments.
19. Estoppel Certificates. Tenant will, at any time and from time to
time, upon not less than ten (10) days prior request by Landlord, execute,
acknowledge and deliver to Landlord a statement certifying (a) that this Lease
is unmodified and in full force and effect, (b) the dates to which the Base Rent
and Additional Rent and other charges have been paid, (c) whether or not, to the
knowledge of Tenant, Landlord is in default in the performance of any covenant,
condition or provision of this Lease, and (d) if so, specifying each such
default of which the Tenant may leave knowledge. Any such statement delivered
pursuant to this Section 19 may be relied upon by any prospective purchaser or
mortgagee of the Leased Premises or any assignee of such mortgagee.
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20. Surrender and Holdover Tenancy. Upon the expiration of this Lease,
Tenant shall peaceably and quietly leave, yield up and surrender the Leased
Premises to Landlord in the same condition in which the Leased Premises were
received from Landlord as of the Commencement Date, ordinary wear and tear
excepted, but clean, orderly and free of occupants. Tenant shall remove from the
Leased Premises prior to such expiration or sooner termination all property
situated in or on the Leased Premises which is not owned by Landlord, and Tenant
shall, at its sole cost and expense, repair any damage caused by such removal.
Property not so removed shall become the property of Landlord, which may
thereafter cause such property to be removed from the Leased Premises and
disposed of, but the cost of any such removal shall be borne by Tenant. If
Tenant does not surrender the Leased Premises to Landlord upon the expiration or
termination of this Lease then the Landlord may, at its option, treat the Tenant
as a holdover tenant on a month-month tenancy and the Base Rent for such monthly
holdover tenancy shall be in an amount equal to 1.50 times the monthly Base Rent
in effect as of the date of expiration or termination or this Lease.
21. Separability. Each and every covenant and agreement contained in
this Lease shall be for all purposes construed to be a separate and independent
covenant and agreement and the breach of any covenant or agreement contained in
this Lease by Landlord shall in no way or manner discharge or relieve Tenant
from Tenant's obligation to perform each and every covenant and agreement
contained in this Lease. If any person or circumstance shall to any extent be
invalid or unenforceable, the remainder of this Lease, or the application of
such term or provision to persons or circumstances other than those as to which
it is invalid or unenforceable, shall not be affected and each term and
provision of this Lease shall be valid and shall be enforced to the fullest
extent permitted by law.
22. Binding Effect. All of the covenants, conditions and obligations
contained in this Lease shall be binding upon and inure to the benefit of the
respective heirs, legal representatives, successors and assigns of Landlord and
Tenant to the same extent as if each such successor and assign were in each case
named as a party to this Lease. This Lease may not be changed, modified or
discharged except by a writing signed by Landlord and Tenant.
23. Headings and Terms. The headings to the various Sections of this
Lease have been inserted for reference only and shall not in any manner be
construed as modifying, amending or affecting in any way the express terms and
provisions of this Lease. The term "person" when used in this Lease shall mean
any individual, corporation, partnership, firm, trust, joint venture, business
association, syndicate, combination, organization or any other person or entity.
24. Right to Inspect. Landlord and Landlord's agents shall have the
right to enter the Leased Premises at any and all reasonable times during the
term of this Lease for the purpose of (a) inspecting and repairing the Leased
Premises, (b) showing them to prospective purchasers or (during the last year of
the Term) tenants, and (c) displaying rental (during the last six (6) months of
the Term) and "For Sale" signs on the Leased Premises. In exercising its rights
under this Section 24, Landlord shall use reasonable efforts to not materially
interfere with Tenants use of
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the Leased Premises. The foregoing provision does not, and shall not be
construed so as to, impose liability on Landlord to inspect or repair the Leased
Premises beyond specifically provided in Section 8.4 hereof.
25. Exculpation. The term "Landlord," as used in this Lease, shall mean
only the owner or owners at the time in question of the fee title to the Leased
Premises, and in the event of any transfer of such title or interest, Landlord
(and in case of any subsequent transfers the then grantor) shall be relieved
from and after the date of such transfer of all liability as respects Landlord's
obligations thereafter to be performed, provided that any funds in the hands of
Landlord, or the then grantor at the time of such transfer, in which Tenant has
an interest, shall be delivered to the grantee. The obligations contained in
this Lease to be performed by Landlord shall, subject as aforesaid, be binding
on Landlord's successors and assigns, only during their respective periods of
ownership.
26. Counterparts. This Lease may be executed in several counterparts,
each of which shall be deemed to be an original, and all counterparts shall
constitute one in the same instrument.
27. No Merger. There shall be no merger of this Lease or of the
leasehold estate hereby created with the fee estate in the Leased Premises by
reason of the fact that the same person or entity acquires or holds, directly or
indirectly, this Lease or the leasehold estate created hereby or any interest in
this Lease or in such leasehold estate as well as the fee estate in the Leased
Premises or any interest in such fee estate.
28. Governing Law. This Lease shall be governed by and interpreted
under the laws, of the State of Minnesota.
29. Brokerage Fees. Landlord and Tenant represent and warrant to each
other that neither has dealt with a broker, agent or other person in connection
with this Lease and each party hereby indemnifies and holds the other party
harmless from and against any claims by any broker, agent or other person
claiming a commission or other form of compensation by virtue of having dealt
with such indemnifying party with regard to this Lease. The provisions of this
section shall survive the expiration or termination of this Lease.
30. Delivery of Financial Statements. Tenant shall deliver to Landlord
copy of the audited financial statements of Tenant and of the Guarantor named in
the Guaranty attached hereto, within thirty (30) days after the date such
financial statements become available, but no more frequently than once each
calendar year.
31. Execution and Authority. The execution and delivery of this
instrument has been duly authorized by the Tenant and constitutes the legal,
valid and binding obligation of the Tenant and enforceable against the Tenant in
accordance with its terms. The execution, delivery and performance by the Tenant
of this Lease does not violate or contravene the Tenant's Articles of
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Incorporation, Bylaws or any other instrument, agreement or order to which the
Tenant is bound.
32. Guaranty of Lease. This Lease shall not be effective until and
unless Tenant obtains and delivers to Landlord a fully executed Guaranty of
Lease from Guarantor in the form attached hereto as Exhibit F.
33. Allowances.
33.1 Moving and Improvement Allowance. Landlord grants to Tenant an
allowance in an amount not to exceed $200,000.00 (the "Allowance") to pay Tenant
for costs actually incurred by Tenant with respect to (i) expenses in moving
from the Minneapolis Premises to the Leased Premises and (ii) the construction
by Tenant of Building improvements in addition to the Additional Improvements
(collectively, the "Permitted Allowance Costs"). Landlord shall pay the
Permitted Allowance Costs within twenty (20) days after the date Tenant delivers
to Landlord a written request for payment, which request must, in order to be
paid, be fully supported by invoices from third parties unrelated to Tenant
evidencing the Permitted Allowance Costs. Notwithstanding the foregoing,
Landlord shall not pay any portion of the Permitted Allowance Costs prior to the
Commencement Date nor during any period in which an Event Default exists. Tenant
may submit multiple draws for the Allowance but if Tenant has not requested full
payment of the Allowance within one (1) year from the Commencement Date, the
unpaid balance will be forfeited.
33.2 Signage Allowance. Landlord grants to Tenant an allowance to pay
Tenant for the actual costs incurred by Tenant for signage with respect to the
Leased Premises in an amount not to exceed $40,000 (the "Signage Allowance").
Notwithstanding the foregoing, if Tenant does not use the full amount of the
Signage Allowance for signage purposes, Tenant may, at its option, request that
the unused balance be used to reimburse Tenant for actual costs incurred by
Tenant for moving, Building improvements or other expenses related to the Leased
Premises. Landlord shall pay the Signage Allowance to Tenant within twenty (20)
days after the date Landlord receives a written request for payment, which
request, in order to be paid, must be accompanied by invoices from unrelated
third parties evidencing costs actually incurred by Tenant. Landlord shall not
pay the Signage Allowance prior to the Commencement Date nor during any period
in which an Event Default exists hereunder. Tenant may submit multiple draws for
the Signage Allowance, but if Tenant has not requested full payment of the
Signage Allowance with one (1) year from the Commencement Date, the unpaid
balance will be forfeited.
33.3 Recording. This capital Lease shall not be recorded. The parties
hereto shall execute a Memorandum Lease which Memorandum shall, at Tenant's
option, be placed of record.
34. Contingent Agreement. Not withstanding any other term or condition
of this Lease to the contrary, this Lease and Landlord's obligation to commence
construction of the Additional Improvements and deliver possession of the Leased
Premises to Tenant, is expressly conditioned upon Landlord closing the
acquisition of the Leased Premises, which acquisition shall
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include the closing of permanent financing covering the Leased Premises upon
terms and conditions satisfactory to Landlord at Landlord's sole discretion. If
Landlord does not close the acquisition of the Leased Premises on or before July
1, 1997, then Landlord may, at its option by notice in writing delivered to
Tenant, terminate this Lease. Thereupon, neither party shall be further liable
to the other hereunder. If Landlord does not terminate the Lease in the manner
provided herein on or before July 1, 1997, then Landlord's right to terminate
the Lease pursuant to this section shall cease and terminate and the Lease shall
remain in full force and effect.
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IN AGREEMENT, the parties have caused this Lease to be executed as of
the date and year first above written.
LANDLORD:
XXXXXXXXX PROPERTIES, INC.
By /s/ illegible
--------------------------------------
Its: illegible
------------------------------------
XXXX X. XXXXXX
NOTARY PUBLIC-MINNESOTA
HENNEPIN COUNTY
My Comm. Expires Jan. 31, 2000
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TENANT:
XXXXX INSTITUTE, LTD.
By /s/ illegible
--------------------------------------
Its illegible
--------------------------------------
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EXHIBIT A
LEGAL DESCRIPTION OF THE LAND
Xxxx 0 xxx 0, Xxxxx 0, xxx Xxxxxx X, Xxxxxx Industrial Park, according to the
recorded plat thereof, Dakota County, Minnesota.
Subject to the following Encumbrances:
1. Any mortgage now existing or hereafter created by Landlord provided
that Tenant shall not be obligated with respect to the payment or
performance of any such mortgage, subject to the provisions of Section
18 hereof.
2. Easement for utilities and drainage as shown on the recorded plat of
Inland Industrial Park.
3. Terms and conditions of Agreement dated September 30, 1975, filed
October 9, 1975, as Document No. 457311 between Inland Construction
Corporation and the City of Mendota Heights.
4. Scenic Easement in favor of the State of Minnesota as shown by Final
Certificate filed February 14, 1985, as Document No. 678733 over the
South 50 feet of the Land.
5. Terms and conditions of and easements contained in the Agreement dated
February 7, 1980, filed February 21, 1980, as Document No. 555884,
between Cray Research, Inc., the City of Mendota Heights and the Board
of Water Commissioners of the City of St. Xxxx.
6. Permanent storm sewer easement and temporary construction easement as
shown by the Easement Agreement in favor of the City of Mendota Heights
dated December 28, 1981, filed December 30, 1981, as Document No.
594306.
7. Terms and conditions of and easements contained in the Agreement dated
January 25, 1983, filed May 4, 1983, as Document No. 622498, between
Cray Research, Inc., the City of Mendota Heights and the Board of Water
Commissioners of the City of St. Xxxx.
8. Drainage and utility easement per Document No. 371255 as shown on the
recorded plat of Inland Industrial Park.
9. Overhead power lines across Outlot A outside of any recorded easements.
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EXHIBIT B
DESCRIPTION OF EQUIPMENT AND FURNITURE
All personal property and equipment located within the Leased Premises as of the
date of this Lease except the following:
1. 80 KVA EPE 2000 U Uninterruptible Power Supply Unit and the Phase 3.5
Mechanical Room.
2. 3 Pomona Computer Room Air Conditioners from the Phase 3.5 Computer
Room.
3. Large Shelving in Phase 4 Computer Room.
4. Miscellaneous Art Work which is temporarily being stored in the
Building.
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EXHIBIT C
DESCRIPTION OF PLANS AND SPECIFICATIONS
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EXHIBIT D
INSURANCE REQUIREMENTS
1. Insurance covering loss or damage to the Leased Premises in the
amount of 100% of the full replacement value thereof (as determined by a credit
appraiser retained from time to time by Landlord) providing protection against
"all risks" of physical damage or loss, including, without limitation, coverage
within the classification of fire, extended coverage, vandalism, malicious
mischief and special extended perils. In addition thereto, Tenant shall maintain
boiler and machinery insurance on all boilers, air conditioning equipment and
other pressure vessels or mechanical equipment located on or about the Leased
Premises.
2. General public liability insurance in a single limit of not less
than $5,000,000.00 for injury or death to any one person, for injury or death
for any number of persons in any one occurrence, and for damage to property,
such insurance to cover the Leased Premises and all streets, alleys and
sidewalks adjacent to the Leased Premises.
3. Worker's compensation insurance covering all persons employed in
connection with any work done on or about the Leased Premises and with respect
to which death or bodily injury claims could be asserted against the Landlord or
the Leased Premises.
4. Such other insurance and in such amounts as may, from time to time,
be reasonably required by Landlord or by any first mortgagee of the Leased
Premises against other insurable hazards which, at the time, are normally
insured against in the case of premises similarly situated.
5. All policies shall name Landlord, Tenant and any other parties in
interest as additional named insurers, and shall contain a clause that the
insured will not cancel or change insurance without first giving Landlord and
other parties in interest at least thirty (30) days prior written notice. All
policies shall, to the greatest extent available, contain waivers of subrogation
in a form acceptable to Landlord. The insurance shall be placed with an
insurance carrier licensed to do business in Minnesota, having a rating in
"Bests Insurance Guide" of "A" or better. Tenant shall, upon occupancy, deliver
to Landlord certificates of copies of such policies and whenever requested by
Landlord in writing, shall notify Landlord that such policies are in full force
and effect.
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EXHIBIT E
SUMMARY OF EXISTING ENVIRONMENTAL REPORTS
1. Environmental Compliance/"Green Audits" dated August 29, 1994, prepared
by Bay West.
2. 1996 Hazardous Waste Generator Annual Report and License Renewal
Application.
3. Hazardous Waste Generator License from the Environmental Management
Department of Dakota County, Minnesota.
4. Environmental Site Assessment dated September 8, 1995, prepared by
Maxim Technologies, Inc.
5. Cray Research Industrial Hygiene Monitoring Results.
6. [INSERT HERE THE 1997 PHASE I ENVIRONMENTAL ASSESSMENT WHEN AVAILABLE]
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EXHIBIT F
LEASE GUARANTY
FOR VALUE RECEIVED, and in consideration for, and as an inducement to
XXXXXXXXX PROPERTIES, INC. (Landlord) to enter into the foregoing Lease dated
____________ (the Lease), with XXXXX INSTITUTE LTD., as Tenant, the undersigned
hereby absolutely and unconditionally guarantees to Landlord, its successors and
assigns, the prompt and full payment of all rent and all other payments to be
made by Tenant under the Lease, and the full performance and observance by
Tenant of all the other terms, covenants, conditions and agreements therein
provided to be performed and observed by Tenant, for which the undersigned shall
be jointly and severally liable with Tenant. All defined terms in this Guaranty
shall have the same definitions assigned to them in the Lease. The undersigned
hereby waives any notice of nonpayment, nonperformance or nonobservance, or
proof of notice or demand. The undersigned agrees that in the event of a default
by Tenant under the Lease. Landlord may proceed against the undersigned before,
after or simultaneously with proceeding against Tenant. This Guaranty shall not
be terminated, affected, or impaired in any manner by reason of: (1) the
assertion by Landlord against Tenant of any of the rights or remedies reserved
to Landlord pursuant to the provisions of the Lease; (2) the commencement of
summary or other proceedings against Tenant; (3) the failure of Landlord to
enforce any of its rights against Tenant; or (4) the granting by Landlord of any
extensions of time to Tenant. The undersigned further covenants and agrees that:
(1) the undersigned shall be bound by all the provisions, terms, conditions,
restrictions and limitations contained in the Lease which are to be observed or
performed by Tenant thereunder, the same as if the undersigned were named
therein as Tenant; and (2) this Guaranty shall be absolute and unconditional and
shall be in full force and effect with respect to any amendment, addition,
assignment, sublease, transfer or other modification of the Lease, whether or
not the undersigned shall have knowledge or have been notified of or agreed or
consented thereto. The undersigned will not assert against the Landlord any
defensive waiver, release, discharge in bankruptcy, statute of limitations, race
judicata, statute of frauds, anti-deficiency statute, fraud, alter xxxxx acts,
usury, illegality or unenforceability which may or may not be available to the
Tenant with respect to the obligations guaranteed hereunder, or any set off
available against the Landlord in favor of the Tenant. The liability of the
undersigned shall not be affected or impaired by any voluntary or involuntary
dissolution, sale or other disposition of all or other disposition of Tenant's
assets, marshaling of assets and liabilities, receivership, insolvency,
bankruptcy, creditor assignment, reorganization or similar proceedings affecting
the Tenant. The undersigned further agrees that all indebtedness, liability or
liabilities now or at any time or times hereafter owing by the Tenant to the
undersigned are hereby subordinated to the indebtedness guaranteed by this
Agreement. Performance by the undersigned under this Guaranty shall not entitle
the undersigned to be subrogated to any of the indebtedness guaranteed or to any
security therefore unless and until the full amount of the indebtedness
guaranteed has been fully paid. If Landlord at any time is compelled to take
action, by legal proceedings or otherwise, to enforce or compel compliance with
the terms of this Guaranty, the undersigned shall, in addition to any other
rights or remedies to which Landlord may be entitled hereunder or as a matter of
law
38
or in equity, pay to Landlord all costs, including reasonable attorneys' fees
incurred or expended by Landlord in connection therewith. If the Lease is
disaffirmed by a Trustee in Bankruptcy for Tenant, the undersigned shall, at the
election of Landlord, either assume the Lease and perform all of the covenants,
terms and conditions of Tenant thereunder or enter into a new lease, which said
new lease shall be in form and substance identical to the Lease. All duties and
obligations of the undersigned pursuant to this Guaranty shall be binding upon
the successors and assigns of the undersigned. For purposes of this Guaranty,
the word "Tenant" shall include the successors and permitted assigns of Tenant.
This Guaranty shall be governed by and construed in accordance with the laws of
the State of Minnesota.
The execution and delivery of this instrument has been duly authorized
by the undersigned and constitutes the legal, valid and binding obligation of
the undersigned enforceable against the undersigned in accordance with its
terms. The execution, delivery and performance by the undersigned of its
agreements herein do not violate or contravene the undersigned's Articles of
Incorporation, Bylaws or any other instrument, agreement or order to which the
undersigned is bound.
Dated: , 1997
CAREER EDUCATION CORPORATION
By: illegible
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Its: illegible
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