1
EXHIBIT 10.39
INDUSTRIAL BUILDING LEASE BY AND BETWEEN
FIRST INDUSTRIAL, L.P. AND SABRATEK CORPORATION
SECTION 1: BASIC TERMS
This Section 1 contains the Basic Terms of this Lease between Landlord and
Tenant, named below. Other Sections of the Lease referred to in this Section 1
explain and define the Basic Terms and are to be read in conjunction with the
Basic Terms.
1.1 Date of Lease: May 15, 1998
-----------------------------------------------------
1.2 Landlord: First Industrial, L.P., a Delaware limited partnership
----------------------------------------------------------
1.3 Tenant: Sabratek Corporation, a Delaware corporation
------------------------------------------------------------
1.4 Premises: See Exhibit "A"
----------------------------------------------------------
1.5 Lease Term: 5 years 15 days (together with any renewals, the
"Term"), commencing on the earlier to occur of (i) July 15, 1998 and (ii) the
date Tenant begins conducting business at the Premises ("commencement Date") and
ending July 30, 2003 ("Expiration Date").
1.6 Permitted Uses: (See Section 4) Office; storage and light assembly
------------------------------------
1.7 Tenant's Guarantor: (if none, so state) None
----------------------------
1.8 Brokers: (See Section 22; if none, so state)
(A) Tenant's Broker: Rose Real Estate Services, Inc.
----------------------------------------------
(B) Landlord's Broker: None
--------------------------------------------
1.9 Security Deposit: (See Section 4) $33,550.83
----------------------------------
1.10 Rent Payable by Tenant: See Exhibit "B"
--------------------------------------------
1.11 Riders to Lease: The following riders are attached to and made a
part of this Lease: None
-------------------------------
SECTION 2: LEASE OF PREMISES: RENT
2.1 LEASE OF PREMISES FOR LEASE TERM. Landlord hereby leases the
Premises to Tenant, and Tenant hereby rents the Premises from Landlord, for the
Term and subject to the conditions of this Lease.
2.2 TYPES OF RENTAL PAYMENTS. Tenant shall pay rents effective as of the
Commencement Date of (a) net base rent payable in monthly installments as set
forth in Exhibit "B" attached hereto (the "Net Base Rent"), in advance, on the
first day of each and every calendar month during the term of this Lease; (b)
all costs, expenses and charges of every nature relating to, or incurred in
connection with, the ownership and operation of the Premises and that are
attributable to or become due during the Term ("Additional Rent"); and (c) in
the event that any monthly installment of Net Base Rent is not paid within ten
(10) days of the date when due a late charge in an amount equal to five percent
(5%) of the then-delinquent installment of Net Base Rent (the "Late Charge"; the
Net Base Rent, Additional Rent and Late Charge shall collectively be referred to
as "Rent"). All Rent shall be paid to Landlord c/o First Industrial, L.P., ▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or if sent by
overnight courier, The Northern Trust Co., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
Receipt and Dispatch, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: First Industrial, L.P.,
Suit 1449 (or to such other entity designated as Landlord's management agent, if
any, and if Landlord so appoints such a management agent, the "Agent"), or
pursuant to such other directions as Landlord shall designate in this Lease or
otherwise.
2.3 COVENANTS CONCERNING RENTAL PAYMENTS. Tenant shall pay the Rent
promptly when due, without notice or demand, and without any abatement,
deduction or setoff, except as may otherwise be expressly and specifically
provided in this Lease. No payment by Tenant, or receipt or acceptance by Agent
or Landlord, of a lesser amount than the correct Rent shall be deemed to be
other than a payment on account, nor shall any endorsement or statement on any
check or letter accompanying any payment be deemed an accord or satisfaction,
and Agent or Landlord may accept such payment without prejudice to its right to
recover the balance due or to pursue any other remedy available to Landlord. If
the Commencement Date occurs on a day other than the first day of a calendar
month, the Rent due for the partial calendar months occurring at the
commencement and the expiration of the Term shall be prorated on a per diem
basis. It is intended that the Rent provided in this Lease shall be an
absolutely net return to Landlord throughout the Term and any renewals or
extensions thereof.
SECTION 3: TAXES AND ASSESSMENTS
3.1 TAXES. Tenant agrees to pay as "Additional Rent" for the Premises (i)
all governmental taxes, assessments, fees, penalties and charges of every kind
or nature (other than Landlord's income taxes), whether general, special,
ordinary or extraordinary, due to any time, or from time to time, during the
Term and any extensions thereof, in connection with the ownership, leasing or
operation of the Premises or of the personal property and equipment located
therein or in connection therewith and (ii) any expenses incurred by Landlord in
contesting such taxes or assessments and/or the assessed value of the Premises
(the "Taxes"), provided that Tenant receives the benefit of any resulting
reductions in Taxes. All such Taxes shall be paid by Tenant before they become
delinquent. The Taxes for the first and last years of the Term and any extension
thereof will be appropriately prorated. If any special assessments levied
against the Premises are payable in installments, Tenant shall be responsible
only for those installments that are attributable to the period during which
Tenant has possession of the
2
Premises. For purposes hereof, Taxes for any year shall be Taxes that are due
for payment or paid in that year, rather than taxes that are assessed or become
a lien or accrue during such year. If at any time during the Term, the methods
of taxation prevailing on the date hereof shall be altered, such additional or
substitute tax, assessment, levy, charge or imposition shall be deemed to be
included within the term "Taxes" for the purposes hereof.
SECTION 4: USE OF PREMISES; SECURITY DEPOSIT
4.1 USE OF PREMISES. The Premises shall be used for the purpose(s) set
forth in Section 1.6 above and for no other purpose whatsoever. Tenant shall
not, at any time, use or occupy, or knowingly permit anyone to use or occupy,
the Premises, or do or knowingly permit anything to be done in the Premises, in
any manner that may (a) violate any Certificate of Occupancy for the Premises;
(b) cause, or be liable to cause, injury to the Premises or any equipment,
facilities or systems therein; (c) constitute a violation of the laws and
requirements of any public authority or the requirements of insurance bodies or
the rules and regulations of the Premises; and (d) impair or tend to impair the
proper and economic maintenance, operation, and repair of the Premises and its
equipment, facilities or systems.
4.2 SIGNAGE. Tenant shall not affix any sign of any size or character to
any portion of the Premises without prior written approval of Landlord, which
approval shall not be unreasonably withheld or delayed. Landlord hereby consents
to Tenant's signage as described on Exhibit "E" attached hereto. Tenant shall
remove all signs of Tenant upon the expiration or earlier termination of this
Lease and immediately repair any damage to the Premises caused by, or resulting
from, such removal.
4.3 SECURITY DEPOSIT. Simultaneously with the execution and delivery of
this Lease, Tenant shall deposit with Landlord or Agent the sum set forth in
Section 1.9 above, in cash (the "Security"), representing security for the
performance by Tenant of the covenants and obligations hereunder. The Security
shall be held by Landlord or Agent, without interest, in favor of Tenant;
provided, however, that no trust relationship shall be deemed created thereby
and the Security may be commingled with other assets of Landlord. If Tenant
defaults in the performance of any of its covenants hereunder, Landlord or Agent
may, with notice to Tenant, apply the whole or any part of the Security, to the
extent required for the payment of any Rent or other sums due from Tenant
hereunder, in addition to any other remedies available to Landlord. In the event
Landlord or Agent shall so apply the Security, Tenant shall, upon demand,
immediately deposit with Landlord or Agent a sum equal to the amount so used.
Tenant's failure to do so shall constitute a default under this Lease. If Tenant
fully and faithfully complies with all the covenants hereunder, the Security (or
any balance thereof) shall be returned to Tenant within thirty (30) days after
the last to occur of (i) the date the Term expires or terminates, and (ii)
delivery to Landlord of possession of the Premises. Landlord may deliver the
Security to any purchaser of Landlord's interest in the Premises [or any
Successor Landlord (defined below), if applicable], and thereupon Landlord and
Agent shall be discharged from any further liability with respect to the
Security, provided that such purchaser or Successor Landlord assumes Landlord's
obligation hereunder.
SECTION 5: CONDITION AND DELIVERY OF PREMISES
5.1 CONDITION OF PREMISES. Tenant agrees that Tenant is familiar with the
condition of the Premises, and Tenant hereby accepts the Premises on an "AS-IS,"
"WHERE-IS" basis. Tenant acknowledges that, except as provided herein, neither
Landlord nor Agent nor any representative of Landlord has made any
representation as to the condition of the Premises or the suitability of the
Premises for Tenant's intended use. Tenant represents and warrants that Tenant
has made its own inspection of the Premises and is not relying on any
representation of Landlord with respect thereto, except as to those
representations provided herein. Neither Landlord nor Agent shall be obligated
to make any repairs, replacements or improvements of any kind or nature to the
Premises (whether structural or nonstructural and whether or not involving the
roof of the Building, the Building's HVAC (defined below) system, the Premises'
parking lot, or any other component of the Premises) in connection with, or in
consideration of, this Lease, except (a) as set forth in Section 17 and (b) with
respect to any repairs and improvements expressly and specifically described in
Exhibit "C" attached hereto ("Work Items"). Landlord agrees to enforce, or cause
Agent to enforce, upon Tenant's request, all manufacturer's or contractor's
warranties, if any, given in connection with the Work Items. It is acknowledged
and agreed by Tenant that (i) certain of the Work Items may be completed after
the Commencement Date; (ii) Tenant shall provide reasonable access to the
Premises for the purpose of the completion of such items; and (iii) the failure
to complete such items prior to the Commencement Date shall not be a delay in
the Commencement Date. Without limitation upon the foregoing, Landlord covenants
and agrees to use good faith, diligent efforts to complete the Work Items on or
prior to the Commencement Date or as soon as reasonably practicable thereafter
and Tenant covenants and agrees to make the Premises reasonably available to
Landlord after the Commencement Date to the extent necessary to complete the
Work Items. Landlord hereby represents and warrants to Tenant that, as of the
Commencement Date, all mechanical, electrical, plumbing, sprinkler and HVAC
systems and equipment in the Building are and shall be in good working order.
5.2 DELAY IN COMMENCEMENT. Landlord shall not be liable to Tenant if
Landlord does not deliver possession of the Premises to Tenant on the
Commencement Date or if Landlord is not able to permit Tenant to enter the
Premises (as a result of Landlord's failure to acquire the Premises from 3COM
Corporation, a Delaware corporation, as successor-by-merger to U.S. Robotics
Inc., a Delaware corporation ("Seller"), the performance of any remediation,
removal or environmental clean up activities or for any other reason) prior to
the Commencement Date as provided in Section 25.17 hereof for the limited
purposes described therein. The obligations of Tenant under the Lease shall not
thereby be affected, except that the Commencement Date shall be delayed until
Landlord delivers possession of the Premises to Tenant, and the Lease Term shall
be extended by a period equal to the number of days of delay in delivery of
possession of the Premises to Tenant, plus the number of days necessary to end
the Lease Term on the last day of a month. Notwithstanding the foregoing, if
Landlord fails to deliver possession of the Premises to Tenant by July 15, 1998
(whether as a result of the failure to acquire the Premises or otherwise),
Tenant shall have the right, as its sole remedy hereunder, at law, or in equity,
to terminate this Lease by delivery of written notice to Landlord not later than
five (5) business days hereafter. Tenant acknowledges and agrees that Landlord
intends to perform a Phase II environmental site assessment at the Premises
prior to the Commencement Date (the "Assessment"). If the performance of any
cleanup, remediation or removal activities recommended by the Assessment ("Clean
Up Activities") at the Premises by Landlord unreasonably disturbs (or prevents)
Tenant's use and occupancy of the Premises, Tenant shall have the right, as its
sole remedy hereunder, at law or in equity, to terminate this Lease by delivery
of written notice to Landlord not later than five (5) business days after the
commencement of Clean Up Activities, provided, however, that the foregoing
provision shall in no event apply to any cleanup, remediation of removal
activities not recommended by the Assessment.
2
3
SECTION 6: SUBORDINATION; NOTICES TO SUPERIOR LESSORS AND MORTGAGEES;
ATTORNMENT
6.1 SUBORDINATION OF LEASE. This Lease, and all rights of Tenant
hereunder, are subject and subordinate to all ground leases of the Premises now
or hereafter existing and to all mortgages or trust deeds or deeds of trust (all
of which are hereafter referred to collectively as "Mortgages"), that may now or
hereafter affect or encumber all or any portion of Landlord's interest in the
Premises; provided, however, that this subordination shall not apply to any new
Mortgage placed upon the premises unless and until Tenant is provided with a
reasonable nondisturbance agreement executed by the applicable Superior Party
(defined below). This subordination shall apply to each and every advance made,
or to be made, under such Mortgages; to all renewals, modifications,
replacements and extensions of such Mortgages; and to "spreaders" and
consolidations of such Mortgages. This Section 6.1 shall be self-operative and
no further instrument or subordination shall be required; however, in
confirmation of such subordination, Tenant shall from time to time execute,
acknowledge and deliver any instrument that Landlord may from time to time
reasonably require in order to evidence or confirm such subordination. Landlord
shall use its best efforts to have any existing Superior Mortgagee provide
Tenant with a reasonable nondisturbance agreement executed by such Superior
Mortgagee. Tenant acknowledges that this Lease has been (and, in the future, may
be) assigned by Landlord to a Superior Mortgagee (defined below) as additional
collateral security for the loans secured by the Superior Mortgage (defined
below) held by such Superior Mortgagee. Any ground lease to which this Lease is
subject and subordinate is hereinafter referred to as a "Superior Lease," the
lessor under a Superior Lease is hereinafter referred to as a "Superior Lessor,"
and the lessee thereunder, a "Superior Lessee"; and any Mortgage to which this
Lease is subject and subordinate is hereinafter referred to as a "Superior
Mortgage," and the holder of a Superior Mortgage is hereinafter referred to as a
"Superior Mortgagee." Notwithstanding the foregoing, this Lease may be made
senior to the lien of any Superior Mortgage, if and only if the Superior
Mortgagee thereunder so requests. The term Superior Mortgagee and Superior
Lessor are hereinafter collectively referred to as a "Superior Party" or
"Superior Parties".
6.2 NOTICE IN THE EVENT OF DEFAULT. In the event that Landlord breaches or
otherwise fails to timely perform any of its obligations under this Lease,
Tenant shall give written notice of such alleged breach or default to Landlord
and to each Superior Mortgagee and Superior Lessor whose name and address shall
previously have been furnished, in writing, to Tenant, (provided, however, that
Tenant's failure to so notify such parties shall not be deemed a default
hereunder) whereupon any or all of Landlord, a Superior Mortgagee or Superior
Landlord or may remedy or cure such breach or default within thirty (30) days
following the giving of such notice; provided, however, that said thirty
(30)-day cure period shall be automatically extended in the event that the
breach or default cannot, by its nature, be cured within thirty (30) days and
one or more of Landlord, the Superior Mortgagee or the Superior Lessor is
diligently proceeding to cure said default.
6.3 SUCCESSOR LANDLORD. If any Superior Lessor or Superior Mortgagee shall
succeed to the rights of Landlord hereunder, then, at the request of such party
(hereinafter referred to as "Successor Landlord"). Tenant shall attorn to and
recognize each Successor Landlord as Tenant's Landlord under this Lease and
shall promptly execute and deliver any instrument such Successor Landlord may
reasonably request to further evidence such attornment. Tenant hereby
acknowledges that in the event of such succession, then from and after the date
on which the Successor Landlord acquires Landlord's rights and interest under
this Lease (the "Succession Date"), the rights and remedies available to Tenant
under this Lease with respect to any obligations of any successor Landlord shall
be limited to the equity interest of the Successor Landlord in the Premises.
SECTION 7: QUIET ENJOYMENT
Subject to the provisions of this Lease, so long as Tenant pays all of the
Rent and performs all of its other obligations hereunder, Tenant shall not be
disturbed in its possession of the Premises by Landlord, Agent or any other
person lawfully claiming through or under Landlord. This covenant shall be
construed as a covenant running with the land of the Premises and is not a
personal covenant of Landlord.
SECTION 8: ASSIGNMENT, SUBLETTING AND MORTGAGING
8.1 PROHIBITION. Tenant acknowledges that this Lease and the Rent due
under this Lease have been agreed to by Landlord in reliance upon Tenant's
reputation and creditworthiness and upon the continued operation of the Premises
by Tenant for the particular uses set forth in Section 4 above; therefore,
Tenant shall not, whether voluntarily, or by operation of law, or otherwise; (a)
assign or otherwise transfer this Lease; (b) sublet the Premises or any part
thereof, or allow the same to be used or occupied by anyone other than Tenant;
or (c) mortgage, pledge, encumber, or otherwise hypothecate this Lease or the
Premises, or any part thereof, in any manner whatsoever, without in each
instance obtaining the prior written consent of Landlord, which consent may be
given or withheld in Landlord's reasonable discretion. Any purported assignment,
mortgage, transfer, pledge or sublease made without the prior written consent of
Landlord shall be absolutely null and void and of no legal force or effect. No
assignment of this Lease shall be effective and valid unless and until the
assignee executes and delivers to Landlord any and all documentation reasonably
required by Landlord in order to evidence assignee's assumption of all
obligations of Tenant hereunder. Any consent by Landlord to a particular
assignment, sublease or mortgage shall not constitute consent or approval of any
subsequent assignment, sublease or mortgage, and Landlord's written approval
shall be required in all such instances. Any consent by Landlord to any
assignment or sublease shall not be deemed to release Tenant from its obligation
hereunder and Tenant shall remain fully liable for performance of all
obligations under this Lease. In the event that Landlord elects to reject any
proposed sublease or assignment, the Tenant's sole and exclusive remedy shall be
to seek a declaratory judgment against Landlord so as to enable Tenant to avoid
a termination of this Lease. Any violation of the provisions of this Section 8.1
shall constitute a default under this Lease. Notwithstanding anything to the
contrary herein, Tenant, at any time and from time to time during the Lease Term
shall have the right to sublet all or ay portion of the Premises to ▇▇▇▇▇
Industries.
8.2 RIGHTS OF LANDLORD. If this Lease is assigned, or if the Premises (or
any part thereof) are sublet or used or occupied by anyone other than Tenant,
whether or not in violation of this Lease, Landlord or Agent may (without
prejudice to, or waiver of its rights), collect rent from the assignee,
subtenant or occupant. Landlord or Agent may apply the net amount collected to
the Rent herein reserved, but no such assignment, subletting, occupancy or
collection shall be deemed a waiver of any of the provisions of this Section 8.
With respect to the allocable portion of the Premises sublet, in the event that
the total rent and other considerations (whether cash or non-cash) received
under any sublease by Tenant is greater than the total Rent required to be paid,
from time to time, under this Lease, Tenant shall pay to Landlord fifty percent
(50%) of such excess as received from any subtenant and such amount shall be
deemed a component of the Additional Rent due under this Lease.
3
4
8.3 PERMITTED TRANSFERS. The provisions of Section 8.1(a) shall not apply
to a transfer of a majority of the voting stock of Tenant or to any other change
in voting control of Tenant (if Tenant is a corporation), or to any comparable
transaction involving any other form of business entity, whether effectuated in
one (1) or more transactions, as if such transfer were an assignment of this
Lease; and said provisions shall not apply to a transfer to a corporation into
or with which Tenant is merged or consolidated, or to which substantially all of
Tenant's assets are transferred, or to any corporation that controls or is
controlled by Tenant, or is under common control with Tenant (each, a "Permitted
Transfer"), provided in any of such events (a) the successor to Tenant has a net
worth, at least equal to the net worth of Tenant immediately prior to such
merger, consolidation or transfer worth of Tenant on the date of this Lease and
(b) proof reasonably satisfactory to Landlord of such net worth shall have been
delivered to Landlord at least ten (10) days prior to the effective date of any
such transaction. Any such permitted transferee shall execute and deliver to
Landlord any and all documentation reasonably required by Landlord in order to
evidence assignee's assumption of all obligations of Tenant hereunder. In the
event of a Permitted Transfer and only upon the performance in full to
Landlord's satisfaction of the requirements of this Section 8.3, Tenant shall be
released from further liability hereunder except as to obligations and claims
accruing or arising prior to such Permitted Transfer and as otherwise provided
herein.
SECTION 9: COMPLIANCE WITH LAWS
If any license or permit is required for the conduct of Tenant's business
in the Premises, Tenant, at its expense, shall procure such license prior to the
Commencement Date, and shall maintain in good standing and renew such license or
permit during the Term hereof. Tenant shall give prompt notice to Landlord of
any notice it receives of the violation of any law or requirement of any
governmental or administrative authority with respect to the Premises or the use
or occupation thereof. Tenant shall, at Tenant's expense, comply with all laws
and requirements of any governmental or administrative authorities that impose
any duty on Landlord, Agent or Tenant arising from Tenant's actions regarding
its business operations or use of the Premises, and Tenant shall pay all
expenses, fines and damages that are imposed upon any or all of Landlord, Agent,
any Superior Lessee, Superior Lessor or Superior Mortgagee, by reason or arising
out of Tenant's failure to fully and promptly comply with and observe the
provisions of this Section. Notwithstanding the foregoing, Tenant shall have no
obligations to perform any repairs, replacements or restoration of the
foundation, exterior and interior load-bearing walls, parking lot structure,
roof structure or roof covering or tuckpointing of the Premises.
SECTION 10: INSURANCE
10.1 TENANT ACTIVITIES. Tenant shall not violate, or knowingly permit the
violation of, any condition imposed by any insurance policy issued in respect of
the Premises and shall not do, or knowingly permit anything to be done, or keep
or knowingly permit anything to be kept in the Premises, that would: (a) result
in insurance companies of good standing refusing to insure (or imposing special
conditions on insuring) any or all of the Premises or the property therein, in
amounts reasonably satisfactory to Landlord; or (b) results in the cancellation
of (or the assertion of any defense by the insurer, in whole or in part, to
claims under) any policy of insurance with respect to any or all of the Premises
or the property therein.
10.2 INSURANCE TO BE MAINTAINED BY TENANT. Tenant shall, at its sole cost
and expense, at all times during the Term (and any extensions thereof) obtain
and pay for and maintain in full force and effect the insurance policy or
policies described in Exhibit D attached hereto. Tenant shall deliver to
Landlord not less than ten (10) days prior to the Commencement Date certificates
of insurance (in form and substance reasonably acceptable to Landlord) for all
insurance policies required to be obtained by Tenant pursuant to this Lease. If
Tenant fails to submit such certificates to Landlord within the specified time,
or otherwise fails to obtain and maintain insurance coverages in accordance with
this Section 10.2, then Landlord, at Landlord's sole option, may, but shall not
be obligated to, procure such insurance on behalf of, and at the expense of,
Tenant. Tenant shall reimburse Landlord for such amounts upon demand, it being
understood that any such sums for which Tenant is required to reimburse Landlord
shall constitute Additional Rent.
10.3 INSURANCE TO BE MAINTAINED BY LANDLORD. Landlord shall secure fire,
casualty, and extended coverage insurance on the Premises and related
improvements for their full insurance and replacement value, subject to a
deductible amount determined in the absolute discretion of Landlord. Landlord
shall also secure general liability insurance coverage against any and all
claims for injuries to persons or property occurring in or about the Premises in
amounts to be determined in the absolute discretion of the Landlord. Landlord
shall provide proof of continuous coverage under such policies including copies
of certificates thereof and evidence of renewal upon reasonable request of
Tenant. Such insurance shall be obtained and maintained with generally
recognized responsible insurance companies qualified to do business in the State
of Illinois. Tenant agrees to pay as Additional Rent any and all costs and
expenses associated with the insurance described in this Section 10.3.
10.4 WAIVER OF RIGHT OF RECOVERY. None of Landlord, Agent or Tenant shall
be liable to one another [or to any insurance company (by way of subrogation of
otherwise) insuring any such party] for any loss or damage to the Premises, the
structure of the buildings located thereon, other tangible property located on
the Premises, or any resulting loss of income, or losses under workers'
compensation laws and benefits, despite the fact that such loss or damage might
have been occasioned by the negligence or misconduct of such party, its agents
or employees, provided and to the extent that any such loss or damage would be
covered by insurance that the party suffering the loss is required to maintain
pursuant to the terms of this Lease. The failure of any party to insure its
property shall not void this waiver. Each of Landlord, Agent and Tenant shall
secure an appropriate clause in, or an endorsement upon, each insurance policy
obtained by it and covering or applicable to the Premises and the personal
property, fixtures, and equipment located therein or thereon, pursuant to which
the insurance company consents to such waiver of right of recovery. The waiver
of right of recovery set forth above in this Section 10.3 shall extend to
Landlord, Agent, Tenant, and their respective agents and employees, and each
Superior Lessor, Superior Mortgagee, and to other appropriate parties designated
by Landlord.
SECTION 11: ALTERATIONS
11.1 PROCEDURAL REQUIREMENTS. Tenant may, from time to time, at its
expense, make alterations or improvements in and to the Premises (hereinafter
collectively referred to as ""Alterations''), provided that Tenant first obtains
the written consent of Landlord in each instance. Landlord's consent to
Alterations shall not be reasonably withheld or delayed, provided that: (a) the
Alterations are non-structural and the structural integrity of the Premises
shall not be adversely affected; (b) the Alterations are to the interior of the
Premises; (c) the proper functioning of the mechanical, electrical, heating,
ventilating, air-conditioning ("HVAC"), sanitary and other service systems of
the Premises shall not be adversely affected and
4
5
the usage of such systems by Tenant shall not be increased; (d) Tenant shall
have appropriate insurance coverage reasonably satisfactory to Landlord
regarding the performance and installation of the Alterations; (e) the
Alterations shall conform with all other requirements of this Lease; and (f)
Tenant shall have provided Landlord with detailed plans (the "Plans") for
such Alterations in advance of requesting Landlord's consent. Additionally,
after obtaining Landlord's preliminary consent to the Plans, but before
proceeding with any Alterations, Tenant shall, at its expense, obtain all
necessary governmental permits and certificates for the commencement and
prosecution of Alterations and shall submit to Agent, for Landlord's written
approval, working drawings, plans and specifications, and all permits for the
work to be done and Tenant shall not proceed with such Alterations until it has
received said approval. After obtaining Landlord's approval to the Alterations,
Tenant shall give Landlord at least ten (10) days prior written notice of the
commencement of any Alterations at the Premises, and Landlord may elect to
record and post notices of non-responsibility at the Premises. Notwithstanding
the foregoing, Tenant shall not be obligated to obtain Landlord's consent to
perform Alterations which are non-structural, cosmetic or decorative in nature;
provided, however, that (i) the aggregate cost of such Alterations does not
exceed $25,000 during the Term of this Lease and (ii) Tenant shall adhere to
all of the other requirements of this Section 11.1 in connection with such
Alterations.
11.2 PERFORMANCE OF ALTERATIONS. Tenant shall cause the Alterations to be
performed in compliance with all applicable permits, laws and requirements of
public authorities, and with Landlord's reasonable rules and regulations. Tenant
shall cause the Alterations to be diligently performed in a good and workmanlike
manner, using new materials and equipment at least equal in quality and class to
the standards for the Premises established by Landlord or Agent. Alterations
shall be performed by contractors first approved by Landlord, which approval
shall not be unreasonably withheld or delayed, and Tenant's agents, contractors,
workmen, mechanics, suppliers and invitees shall cooperate, and not interfere
with, Landlord and its agents and contractors (if any). Tenant shall obtain all
necessary permits and certificates for final governmental approval of the
Alterations and shall provide Landlord with "as built" plans, copies of all
construction contracts, governmental permits and certificates and proof of
payment for all labor and materials, including, without limitation, copies of
paid invoices and final lien waivers.
11.3 LIEN PROHIBITION. Tenant shall pay when due all claims for labor and
material furnished to the Premises in connection with the Alterations. Tenant
shall not permit any mechanics or materialmen's liens to attach to the Premises
or Tenant's leasehold estate. Tenant, at its expense, shall procure the
satisfaction, discharge, or bonding of record of all such liens and encumbrances
within thirty (30) days after the filing thereof. In the event Tenant has not so
performed, Landlord may, at its option, pay and discharge such liens and Tenant
shall be responsible to reimburse Landlord, on demand, for all costs and
expenses incurred in connection therewith, together with interest thereon at the
rate set forth in Section 21.3 below, which expenses shall include reasonable
fees of attorneys of Landlord's choosing, and any costs in posting bond to
effect discharge or release of the lien as an encumbrance against the Premises.
Any sums due from Tenant pursuant to the preceding sentence shall constitute
Additional Rent under this Lease.
SECTION 12: LANDLORD'S AND TENANT'S PROPERTY
12.1 LANDLORD'S PROPERTY. Subject to Section 12.2 below, all fixtures,
machinery, equipment, improvements and appurtenances attached to, or built into,
the Premises at the commencement of, or during the Term, whether or not placed
there by or at the expense of Tenant, shall become and remain a part of the
Premises; shall be deemed the property of Landlord (the "Landlord's Property"),
without compensation or credit to Tenant; and shall not be removed by Tenant
unless Landlord requests their removal. Further, any personal property in the
Premises on the Commencement Date, movable or otherwise, unless installed and
paid for by Tenant, shall be and shall remain the property of Landlord and shall
not be removed by Tenant. In no event shall Tenant remove any of the following
materials or equipment without Landlord's prior written consent: any power
wiring or power panels, lighting or lighting fixtures, wall or window coverings,
carpets or other floor coverings, heaters, air conditioners or any other heating
or air conditioning equipment, fencing or security gates, or other similar
building operating equipment and decorations. Landlord shall leave in place at
the Premises for use by Tenant the following items that were in the Premises as
of December 18, 1997 if and to the extent delivered to Landlord by Seller
(defined below) upon the consummation of Landlord's acquisition of the Premises:
existing furniture as depicted on Exhibit E attached hereto, building equipment,
air compressors and related equipment, ▇▇▇▇ ducting, external and internal UPS
power systems, telecommunication panels, communication and phone lines, office
furniture, corrugated ▇▇▇▇▇▇, trash compactor, refrigerators, power distribution
and the awnings over the rear entrance and north wall of the building. Landlord
shall in no event be obligated to deliver any of the items identified in Exhibit
E regardless of whether such items were present on December 18, 1997. All of the
foregoing items shall be deemed Landlord's Property for all relevant purposes
and Landlord shall have no obligation to deliver, or liability to Tenant for
the failure to deliver, any such items to the extent removed or damaged by
Seller.
12.2 TENANT'S PROPERTY. All movable non-structural partitions, business
and trade fixtures, machinery and equipment, communications equipment and office
equipment, whether or not attached to, or built into, the Premises, which are
installed in the Premises by, or for the account of, Tenant without expense to
Landlord and that can be removed without structural damage to the Premises, and
all furniture, furnishing and other articles of movable personal property owned
by Tenant and located in the Premises (collectively, the "Tenant's Property")
shall be and shall remain the property of Tenant and may be removed by Tenant at
any time during the Term, provided, however, that Tenant shall repair or pay the
cost of repairing any damage to the Premises resulting from the installation
and/or removal thereof.
12.3 REMOVAL OF TENANT'S PROPERTY. At or before the Expiration Date, or
the date of any earlier termination, Tenant, at its expense, shall remove from
the Premises all of Tenant's Property (except such items thereof as Landlord
shall have expressly permitted, in writing, to remain, which property shall
become the property of Landlord), and Tenant shall repair any damage to the
Premises resulting from any installation and/or removal of Tenant's Property.
Any other items of Tenant's Property that shall remain in the Premises after the
Expiration Date, or following an earlier termination date, may, at the option of
Landlord, be deemed to have been abandoned, and in such case, such items may be
retained by Landlord as its property or be disposed of by Landlord, in
Landlord's sole and absolute discretion and without accountability, at Tenant's
expense. Notwithstanding the foregoing, if Tenant is in default under the terms
of this Lease, it may remove Tenant's Property from the Premises only upon the
express written direction of Landlord.
SECTION 13: REPAIRS AND MAINTENANCE
13.1 TENANT REPAIR AND MAINTENANCE. Tenant shall, at its expense,
throughout the Term, maintain and preserve the Premises and the fixtures and
appurtenances therein (including, but not limited to, the Premises' plumbing and
HVAC systems, and excluding, however, those components of the Premises for which
Landlord is expressly responsible under Section
5
6
13.3). Tenant shall enter into a preventative maintenance and service contract
with a reputable service provider for maintenance of the HVAC systems of the
premises. Tenant shall also be responsible for all repairs and replacements
(whether structural or non-structural; interior or exterior, and ordinary or
extraordinary), in and to the premises and the facilities and systems thereof,
if and to the extent that the need for such repairs or replacements arises
directly or indirectly from (a) the performance or existence of any
alternations, (b) the installation, use or operation of Tenant's Property in
the Premises, (c) the moving of Tenant's Property in or out of the Premises, or
(d) any act, omission, misuse, or neglect of Tenant or any of its subtenants or
its or their respective employees, agents, contractors, invitees, or others
entering into the Premises by act or omission of Tenant or any subtenant.
Without limiting the generality of the foregoing, Tenant, as its expense, shall
promptly replace or repair all scratched, damaged, or broken doors and glass in
and about the Premises and floor coverings in the Premises and repair and
maintain all sanitary and electrical fixtures therein; provided, however, that
all replacement materials and methods of replacement shall be approved in
writing by Landlord prior to installation, which approval shall not be
unreasonably withheld or delayed. Any repairs or replacements required to be
made by Tenant to the mechanical, electrical, sanitary, HVAC, or other systems
of the Premises shall be performed by appropriately licensed contractors
approved by Landlord, which approval shall not be unreasonably withheld or
delayed. All such repairs or replacements shall be subject to the supervision
and control of landlord or Agent, and all repairs and replacements shall be
made with materials of equal or better quality than the items being repaired or
replaced.
13.2 TENANT EQUIPMENT. Tenant shall not place a load upon any floor of the
Premises that exceeds either the load per square foot that such floor was
designed to carry or that which is allowed by law. Business machines and
mechanical equipment belonging to Tenant that cause noise or vibrations that may
be transmitted to the structure of the Premises to such a degree as to be
objectionable or of concern to Landlord shall, at Tenant's expense, be placed
and maintained by Tenant in settings or cork, rubber or spring-type vibration
eliminators sufficient to eliminate such noise or vibration.
13.3 LANDLORD REPAIRS. Notwithstanding anything contained herein to the
contrary, Landlord (and not Tenant), at its sole cost and expense, shall be
responsible for the maintenance, repair, replacement and restoration of the
foundation, exterior and interior load-bearing walls, parking lot structure,
roof structure and roof covering and tuckpointing of the Premises; provided,
however, that in the event that any such repair, replacement or restoration is
necessitated by any or all of the matters set forth in Clauses 13.1(a), (b), (c)
or (d) [collectively, "Tenant Necessitated Repairs"], then (i) Landlord shall be
obligated to make a good faith submission of an insurance claim under the
appropriate insurance policy obtained by Landlord in connection with the
Premises pursuant to Section 10.3 hereof for the damage or casualty
necessitating such repair, replacement or restoration or any replacement
occasioned by the acts, omissions, misuse or neglect described in Section 13.1,
item (d) above if Landlord reasonably believes that such damage or casualty is
covered by such insurance policy; provided, however, that Landlord shall not be
obligated to appeal or litigate any denial of such claim, and (ii) Tenant shall
pay as Additional Rent any and all costs and expenses that Landlord incurs in
order to perform such Tenant Necessitated Repairs, including, without
limitation, any insurance deductible and any portion of an insurance claim not
paid by the applicable insurer, and such reimbursement shall be paid, in full,
within ten (10) days after Landlord's delivery of demand therefor. Landlord
agrees to commence and complete the maintenance, repairs, replacements or
restoration described in this Section 13.3 within a reasonable period of time
after receiving notice of the need for such repairs; provided, however, that
Landlord's obligation under this Section 13.3 shall accrue prior to Landlord's
receipt of such notice.
SECTION 14: UTILITIES
14.1 PURCHASING UTILITIES. Tenant shall purchase all utility services from
the utility or municipality providing such service; shall provide for scavenger,
cleaning and extermination services; and shall pay for such services when
payments are due. Tenant shall be solely responsible for the repair and
maintenance of any meters necessary in connection with such services.
14.2 USE OF ELECTRICAL ENERGY BY TENANT. Tenant's use of electrical energy
in the Premises shall not, at any time, exceed the capacity of (i) any of the
electrical conductors and equipment in or otherwise servicing the Premises, or
(ii) the Premises' heating, ventilating and air-conditioning ("HVAC") systems.
SECTION 15: LANDLORD'S RIGHTS
15.1 LANDLORD'S RIGHTS OF ACCESS. Landlord, Agent and their respective
agents, employees and representatives shall have the right to enter and/or pass
through the Premises at any reasonable time or times upon reasonable advance
notice (a) to examine and inspect the Premises and to show them to actual and
prospective Superior Parties or prospective purchasers or mortgagees of the
Premises or providers of capital to Landlord and its affiliates and all
consultants and advisors relating thereto; and (b) to make such repairs,
alternations, additions and improvements in or to the Premises or its facilities
and equipment as Landlord is required or desires to make. Landlord and Agent
shall be allowed to take all materials into and upon the Premises that may be
required in connection therewith, without any liability to Tenant and without
any reduction or modification of Tenant's covenants and obligations hereunder.
During the period of six (6) months prior to the Expiration Date (or at any
time, if Tenant has vacated or abandoned the Premises or is otherwise then in
default under this Lease), Landlord and its agents may exhibit the Premises to
prospective tenants. In the exercise of each of the foregoing rights, Landlord
shall give Tenant reasonable prior notice of its entry, except in the case of
emergency. Nothing set forth above implies obligations of improvement beyond the
Work Items per EXHIBIT C.
15.2 OTHER LANDLORD RIGHTS. Landlord and Agent shall have the following
rights exercisable, without notice and without liability to Tenant, for damage
or injury to persons, property or business and without being deemed an eviction
or disturbance of Tenant's use or possession of the Premises or giving rise to
any claim for setoff or abatement of Rent: to sell or otherwise transfer the
Premises and assign and pass through all of Landlord's obligations hereunder to
the new owner.
SECTION 16: NON-LIABILITY AND INDEMNIFICATION
16.1 NON-LIABILITY. None of Landlord, Agent, any other managing agent,
Superior Parties, or their respective affiliates, owners, partners, directors,
officers, agents and employees shall be liable to Tenant for any loss, injury or
damage, to Tenant or to any other person, or to its or their property,
irrespective of the cause of such injury, damage or loss; provided, however,
that Landlord and Agent (but not their respective affiliates, owners, partners,
directors, officers, or employees) shall be liable for any injury, loss or
damage caused by, or resulting from, the gross negligence or willful misconduct
of Landlord,
6
7
Agent or their respective agents, servants or employees in the operation or
maintenance of the Premises (subject, however, to the doctrine of comparative
negligence in the event of negligence on the part of Tenant or any of its
contractors) or from Landlord's breach of this Lease. Further, none of
Landlord, Agent, any other managing agent, Superior Parties, or their
respective partners, directors, officers, agents and employees shall be liable
(a) for any such damage caused by other persons in, upon or about the Premises,
or caused by operations in construction of any private, public or quasi-public
work, unless such persons are on the Premises, or operations are undertaken, at
Landlord's direction; or (b) with respect to matters for which Landlord is
liable, for consequential or indirect damages purportedly arising out of any
loss of use of the Premises or any equipment or facilities therein by Tenant or
any person claiming through or under Tenant.
16.2 TENANT INDEMNIFICATION. Tenant hereby indemnifies, defends, and holds
Landlord and all Landlord Affiliates harmless from and against any and all
claims, judgments, liens, causes of action, liabilities, damages, costs, losses
and expenses (including, but not limited to reasonable legal, engineering and
consulting fees of engineers, attorneys and consultants selected by Landlord)
arising from or in connection with (a) Tenant's conduct or management of the
Premises or any business therein, or any work or Alterations done, or any
condition created (other than by Landlord) in or about the Premises during
either or both of the Term and the period of time, if any, prior to the
Commencement Date that Tenant may have been given access to the Premises,
including any and all mechanics and other liens and encumbrances; (b) any act,
omission or negligence of Tenant or any of its subtenants or licensees or their
partners, directors, officers, agents, employees, invitees or contractors; (c)
any accident, injury or damage whatsoever (unless caused by Landlord's gross
negligence, willful misconduct or breach of this Lease) occurring in, at or upon
the Premises; (d) any breach or default by Tenant in the full and prompt payment
and performance of Tenant's obligations under this Lease; (e) any breach by
Tenant of any of its warranties and representations under this Lease, and (f)
any actions necessary to protect Landlord's interest under this Lease in a
bankruptcy proceeding or other proceeding under the Bankruptcy Code. In case any
action or proceeding is brought against Landlord or any Landlord Affiliate by
reason of any such claim, Tenant, upon notice from any or all of Landlord, Agent
or any Superior Party, shall resist and defend such action or proceeding by
counsel reasonably satisfactory to, or selected by, Landlord or such Superior
Lessor or Superior Mortgagee. Tenant's obligations under this Section 16.2 shall
survive the termination of this Lease for any reason.
16.3 FORCE MAJEURE. Except as otherwise provided in this Lease, the
obligations of Tenant hereunder shall not be affected, impaired or excused, and
Landlord shall have no liability whatsoever to Tenant, with respect to any act,
event or circumstance arising out of (a) Landlord's failure to fulfill, or delay
in fulfilling any of its obligations under this Lease by reason of labor
dispute, governmental preemption of property in connection with a public
emergency or shortages of fuel, supplies, or labor, fire, unusual delays in
deliveries, unavoidable casualties or by other similar causes, beyond Landlord's
reasonable control; or (b) any failure or defect in the supply, quantity or
character of utilities furnished to the Premises, or by reason of any
requirement, act or omission of any public utility or others serving the
Premises beyond Landlord's reasonable control. Tenant shall not hold Landlord or
Agent liable for any latent defect in the Premisis, nor shall Landlord be
liable for injury or damage to person or property caused by fire, or
theft, or resulting from the operation of heating or air conditioning or
lighting apparatus, or from falling plaster, or from steam, gas, electricity,
water, rain, snow, ice, or dampness, that may leak or flow from any part of the
Premises, or from the pipes, appliances or plumbing work of the same, except to
the extent resulting from Landlord's willful misconduct, gross negligence or
breach of this Lease. Tenant agrees that under no circumstances shall Landlord
or Agent be liable to Tenant for any loss of, destruction of, damage to or
shortage of any property, including, but not limited to, Tenant's Property
except to the extent resulting from Landlord's willful misconduct or gross
negligence.
16.4 LIMITATION OF LIABILITY. Notwithstanding anything to the contrary
contained in this Lease, the liability of Landlord (and of any Successor
Landlord hereunder) to Tenant shall be limited to the interest of Landlord in
the Premises, and Tenant agrees to look solely to Landlord's interest in the
Premises for the recovery of any judgment or award against Landlord, it being
intended that Landlord shall not be personally liable for any judgment or
deficiency. In addition, Tenant acknowledges that Agent is acting solely in its
capacity as agent for Landlord and, shall not be liable for any obligations,
liabilities, losses or damages arising out of or in connection with this Lease.
SECTION 17: MAGE OR DESTRUCTION
17.1 NOTIFICATION. Tenant shall give prompt notice to Landlord and Agent
of (a) any occurrence in or about the Premises for which Landlord or Agent might
be liable, (b) any fire or other casualty in the Premises, (c) any damage to, or
defect in, the Premises, of which Tenant has knowledge, for the repair of which
Landlord or Agent might be responsible, and (d) any damage to or defect in any
part or appurtenance of the Premises' sanitary, electrical, HVAC, elevator or
other systems located in or passing through the Premises or any part thereof, of
which Tenant has knowledge.
17.2 REPAIR PROVISIONS. Subject to the provisions of Section 17.4 below,
if the Premises are damaged by fire or other insured casualty, Landlord shall
repair or cause Agent to repair the damage and restore and rebuild the Premises
(except for Tenant's Property) with reasonable dispatch after (a) notice to it
of the damage or destruction and (b) the collection of the insurance proceeds
attributable to such damage, and Tenant shall repair the damage to and restore
and repair Tenant's Property, with reasonable dispatch after such damage or
destruction.
17.3 RENTAL ABATEMENT. If (a) the Premises are damaged by fire or other
casualty, thereby causing the Premises to be inaccessible or (b) the Premises
are partially damaged by fire or other casualty, the Rent shall be
proportionally abated to the extent of any actual loss of use of the Premises.
17.4 TOTAL DESTRUCTION. If the Premises shall be totally destroyed by fire
or other casualty, or if the Premises shall be so damaged by fire or other
casualty that (in the opinion of a reputable contractor or architect designated
by Landlord) (i) its repair or restoration requires more than one hundred eighty
(180) days to complete or (ii) such repair or restoration requires the
expenditure of more than fifty percent (50%) of the full insurable value of the
Premises immediately prior to the casualty or (iii) the damage is less than the
amount stated in (ii) above, but occurs during the last two (2) years of Lease
Term, Landlord and Tenant shall each have the option to terminate this Lease
within five (5) days after said contractor or architect delivers written notice
of its opinion to Landlord and Tenant, but in all events prior to the
commencement of any restoration of the Premises by Landlord. In such event, the
termination shall be effective as of the date Tenant terminates all operations
at the Premises. If (A) any Superior Party or other party entitled to the
insurance proceeds fails to make such proceeds available to Landlord in an
amount sufficient for restoration of the Premises, or (B) the issuer of any
casualty insurance policies on the Premises fails to make available to Landlord
sufficient proceeds for restoration of the Premises, then Landlord may, at
Landlord's sole option, terminate this Lease, by giving Tenant written notice to
such effect within thirty (30) days after notice
7
8
from a Superior Party or the insurance company that such insurance proceeds will
not be made available, in which event this Lease shall terminate effective as
of the date upon which Tenant receives such notice. For purposes of this
Section 17.4 only, "full insurable value" shall mean replacement cost, less the
cost of footings, foundations and other structures below grade.
17.5 REPAIR OR RESTORATION. Subject to the provisions of Section 17.4
above, Tenant shall not be entitled to terminate this Lease and no damages,
compensation or claim shall be payable by Landlord for purported inconvenience,
loss of business or annoyance arising from any repair or restoration of any
portion of the Premises pursuant to this Section. Landlord or Agent shall use
its diligent, good faith efforts to make such repair or restoration within one
hundred eighty (180) days of the date of damage, and in such manner as not to
unreasonably interfere with Tenant's use and occupancy of the Premises.
SECTION 18: EMINENT DOMAIN
18.1 TOTAL CONDEMNATION. If the whole of the Premises, or if any part of
the Premises that materially affects Tenant's use and occupancy of the Premises,
shall be taken by condemnation or in any other manner for any public or
quasi-public use or purpose, this Lease and the term and estate hereby granted
shall terminate as of the date of vesting of title on such taking (herein called
"Date of the Taking"), and the Rent shall be prorated and adjusted as of such
date.
18.2 AWARD. Landlord shall be entitled to receive the entire award or
payment in connection with any taking provided, however, Tenant shall have the
right to separately pursue, against the condemning authority, an award in
respect of the loss, if any, to leasehold improvements or other interest of
Tenant in the Premises paid for by Tenant, without any credit or allowance from
Landlord and further provided that such separate award does not diminish or
interfere with Landlord's pursuit of its own award.
18.3 COMPENSATION TO TENANT FOR TEMPORARY USE. If the temporary use or
occupancy of all or any part of the Premises shall be taken by condemnation or
in any other manner for any public or quasi-public use or purpose during the
Term, Tenant shall be entitled, except as hereinafter set forth, to receive that
portion of the award or payment for such taking which represents compensation
for the use and occupancy of the Premises, for the taking of Tenant's Property
and for moving expenses, and Landlord shall be entitled to receive that portion
that represents reimbursement for the cost of restoration of the Premises. This
Lease shall be and remain unaffected by such taking, and Tenant shall continue
to be responsible for all of its obligations hereunder insofar as such
obligations are not affected by such taking and shall continue to pay, in full,
the Rent when due. If the period of temporary use or occupancy shall extend
beyond the Expiration Date, that part of the award that represents compensation
for the use and occupancy of the Premises (or a part thereof) shall be prorated
between Landlord and Tenant so that Tenant shall receive so much thereof as
represents the period up to and including such Expiration Date and Landlord
shall receive so much thereof as represents the period after such Expiration
Date. Notwithstanding anything contained herein to the contrary, Tenant may
terminate this Lease upon ten (10) days prior written notice to Landlord in the
event of a temporary taking or condemnation that materially and adversely affect
Tenant's use and occupancy of the Premises pursuant to this Section 18.3 which
Tenant reasonably believes will last for a period of at least one (1) year from
the date of such taking or condemnation, as applicable.
18.4 PARTIAL OR TEMPORARY TAKING. Subject to the rights of any Superior
Mortgagee or Superior Lessor, and other parties having rights to condemnation
proceeds, in the event of any taking of less than the whole of the Premises,
which taking does not result in termination of this Lease, or in the event of a
taking for a temporary use or occupancy of all or any part of the Premises, or
other partial taking of the Premises, that does not result in a termination of
this Lease: (a) Landlord, at its expense, shall proceed with reasonable
diligence to repair the remaining parts of the Premises (other than those parts
of the Premises that are Tenant's Property) to substantially their former
condition, to the extent that the same is feasible (subject to those changes
which Landlord reasonably deems desirable, and to building and other
governmental codes and regulations) and so as to constitute a complete and
tenantable Premises; provided, however, that if a condemnation award is not
sufficient to pay for such repairs, Landlord may, in its sole and absolute
discretion, terminate this Lease or perform such repairs to the extent of such
condemnation award, and (b) Tenant, at its expense, and whether or not any award
or awards shall be sufficient for the purpose, shall proceed with reasonable
diligence to repair Tenant's Property, to substantially its former condition, to
the extent feasible, subject to such reasonable changes as Landlord and Tenant
shall agree upon, in writing. Furthermore, in the event of a partial or
temporary taking of the Premises that does not result in a termination of this
Lease, the Base Rent due hereunder shall be reduced in a proportionate amount,
based upon the proportion that the area that has been taken bears to the total
area of the Premises. Such reduction shall be effective from the date on which
the partial taking occurs.
SECTION 19: SURRENDER AND HOLDOVER
On the last day of the Term, or upon any earlier termination of this lease,
or upon any re-entry by Landlord upon the Premises, (a) Tenant shall quit and
surrender the Premises to Landlord "broom-clean" and in good order, condition
and repair, except for ordinary wear and tear and such damage or destruction as
Landlord is required to repair or restore under this Lease, and (b) Tenant shall
remove all of Tenant's Property therefrom, except as otherwise expressly
provided in this Lease. The obligations imposed under the preceding sentence
shall survive the termination or expiration of this Lease. If Tenant remains in
possession after the Expiration Date hereof or after any earlier termination
date of this Lease or of Tenant's right to possession: (a) Tenant shall be
deemed a tenant-at-will; (b) Tenant shall pay one hundred fifty percent (150%)
of the Rent last prevailing hereunder, and also shall pay all direct damages
sustained by Landlord, by reason of such remaining in possession after the
expiration or termination of this Lease; (c) there shall be no renewal or
extension of this Lease by operation of law; and (d) the tenancy-at-will may be
terminated upon thirty (30) days' notice from Landlord or Tenant. The provisions
of this Section 19 shall not constitute a waiver by Landlord of any re-entry
rights of Landlord provided hereunder or by law.
SECTION 20: EVENTS OF DEFAULT
20.1 BANKRUPTCY OF TENANT. It shall be a default by Tenant under this
Lease if Tenant makes an assignment for the benefit of creditors, or files a
voluntary petition under any state or federal bankruptcy or insolvency law, or
an involuntary petition alleging an act of bankruptcy or insolvency is filed
against Tenant under any state or federal bankruptcy or insolvency law, or
whenever a petition is filed by or against Tenant under the reorganization
provisions of the United States Bankruptcy Code or under the provisions of any
law of like import, or whenever a petition shall be filed by Tenant under the
arrangement
8
9
provisions of the United States Bankruptcy Code or similar law, or whenever a
receiver of Tenant, or of, or for, the property of Tenant shall be appointed,
or Tenant admits in writing that it is insolvent or is not able to pay its
debts as they mature.
20.2 DEFAULT PROVISIONS. Each of the following shall constitute a default
by Tenant under this Lease: (a) if Tenant fails to pay Rent or any other payment
when due hereunder within ten (10) days after written notice thereof from
Landlord (provided, however, that if and to the extent Tenant fails to pay Rent
or any other payment when due hereunder more than twice in any consecutive
twelve (12) month period, Landlord shall have no obligation whatsoever to
provide such written notice or allow any such ten (10) day period); or (b) if
Tenant fails, whether by action or inaction, to timely comply with, or satisfy,
any or all of the obligations imposed on Tenant under this Lease for a period of
thirty (30) days after Landlord's delivery to Tenant of written notice of such
default under this subsection 20.2(b); provided, however, that if the default
cannot, by its nature, be cured within such thirty (30) day period, but Tenant
commences and diligently pursues a cure of such default promptly within the
initial thirty (30) day cure period, than Landlord shall not exercise its
remedies under Section 21 unless such default remains uncured for more than
sixty (60) days after Landlord's initial delivery to Tenant of notice of such
default.
SECTION 21: REMEDIES
21.1 LANDLORD'S CURE RIGHTS UPON DEFAULT OF TENANT. If Tenant defaults in
the performance of any of its obligations under this Lease, Landlord, without
thereby waiving such default, may (but shall not be obligated to) perform the
same for the account, and at the expense of, Tenant, upon compliance with any
notice requirements and cure periods set forth in Subsection 20.2
21.2 LANDLORD'S REMEDIES. In the event of any uncured default by Tenant
under this Lease, Landlord, at its option, and after the proper notice and cure
period, if any, as provided in Section 20.2 has expired, without further notice
or demand to Tenant, may, in addition to all other rights and remedies provided
in this Lease, or otherwise at law or in equity: (a) terminate this Lease and
Tenant's right of possession of the Premises, and recover all damages to which
Landlord is entitled under law, specifically including, without limitation,
accelerated Rent attributable to the balance of the Term, and all Landlord's
reasonable expenses of reletting the Premises (including necessary repairs,
alterations, improvements, reasonable legal fees and brokerage commissions), or
(b) terminate Tenant's right of possession of the Premises without terminating
this Lease; provided, however, that Landlord shall use its reasonable efforts,
whether Landlord elects to proceed under Subsections (a) or (b) above, to relet
the Premises, or any part thereof for the account of Tenant, for such rent and
term and upon such terms and conditions as are reasonably acceptable to
Landlord. If Landlord shall elect to pursue its rights and remedies under
Subsection (b), then Landlord shall at any time have the further right and
remedy to rescind such election and pursue its rights and remedies under
Subsection (a), including but not limited to such time as Landlord has obtained
a tenant to relet the Premises, which, in Landlord's reasonable judgment, is a
suitable tenant. For purposes of such reletting, Landlord is authorized to
repair, alter and improve the Premises to the extent deemed reasonably necessary
by Landlord, in its sole and absolute discretion. If the Premises are relet and
a sufficient sum is not realized therefrom, after payment of all Landlord's
reasonable expenses of reletting (including repairs, alterations, improvements,
reasonable legal fees and brokerage commissions), to satisfy the payment, when
due, of Base Rent and Additional Rent reserved under the Lease for any monthly
period, then Tenant shall, in Landlord's sole judgment, either (i) pay any such
deficiency monthly or (ii) pay such deficiency on an accelerated basis, which
accelerated deficiency shall be discounted at a rate of six percent (6%) per
annum. If Landlord fails to relet the Premises, then Tenant shall pay to
Landlord the sum of (i) the projected costs of Landlord's reasonable expenses of
reletting (including the anticipated costs of repairs, alterations,
improvements, additions, reasonable legal fees and brokerage commissions) as
reasonably estimated by Landlord and (ii) the accelerated amount of Base Rent
and Additional Rent due under the Lease attributable to the balance of the Term
discounted at a rate of six percent (6%) per annum. Tenant agrees that Landlord
may file suit to recover any sums due to Landlord hereunder from time to time
and that such suit or recovery of any amount due Landlord hereunder shall not be
any defense to any subsequent action brought for any amount not theretofore
reduced to judgment in favor of Landlord. In the event Landlord elects, pursuant
to Subsection (b) of this Section 21.2, to terminate Tenant's right of
possession only, without terminating the Lease, Landlord may, at Landlord's
option, enter into the Premises, remove Tenant's Property, Tenant's signs and
other evidences of tenancy, and take and hold possession thereof as provided in
Section 19 hereof; provided, however, that such entry and possession shall not
terminate this Lease or release Tenant, in whole or in part, from Tenant's
obligation to pay the Rent reserved hereunder for the full Term, or from any
other obligation of Tenant under this Lease. Any and all property that may be
removed from the Premises by Landlord pursuant to the authority of the Lease or
of law, to which Tenant is or may be entitled, may be handled, removed or stored
by Landlord at the risk, cost and expense of Tenant, and in no event or
circumstance shall Landlord be responsible for the value preservation or
safekeeping thereof. Tenant shall pay to Landlord, upon demand, any and all
expenses incurred in such removal and all storage charges against such property
so long as the same shall be in Landlord's possession or under Landlord's
control. Any such property of Tenant not retaken from storage by Tenant within
thirty (30) days after the end of the Term, however terminated, shall be
conclusively presumed to have been conveyed by Tenant to Landlord under this
Lease as in a ▇▇▇▇ of sale, without further payment or credit by Landlord to
Tenant.
21.3 ADDITIONAL RIGHTS OF LANDLORD. Any and all costs, expenses and
disbursements, of any kind or nature, incurred by Landlord or Agent in
connection with the enforcement of any and all of the terms and provisions of
this Lease, including reasonable attorneys' fees (through all appellate
proceedings), shall be due and payable (as Additional Rent) upon Landlord's
submission of an invoice therefor. All sums advanced by Landlord or Agent on
account of Tenant under this Section, or pursuant to any other provision of this
Lease, and all Rent, if delinquent or not paid by Tenant and received by
Landlord when due hereunder, shall bear interest at the rate of five percent
(5%) per annum above the "prime" or "reference" or "base" rate of interest
publicly announced as such, from time to time, by The First National Bank of
Chicago, from the due date thereof until paid, and such interest shall be and
constitute Additional Rent and be due and payable upon Landlord's or Agent's
submission of an invoice therefor. Suit or suits for the recovery of such
damages, or any installments thereof, may be brought by Landlord from time to
time at its election, and nothing contained herein shall be deemed to require
Landlord to postpone suit until the Expiration Date, nor limit or preclude
recovery by Landlord against Tenant of any sums or damages to which, in addition
to the damages particularly provided above, Landlord may lawfully be entitled by
reason of any default hereunder by Tenant. The various rights, remedies and
elections of Landlord reserved, expressed or contained herein are cumulative and
no one of them shall be deemed to be exclusive of the others or of such other
rights, remedies, options or elections as are now or may hereafter be conferred
upon Landlord by law.
21.4 EVENT OF BANKRUPTCY. In addition to, and in no way limiting the other
remedies set forth herein, Landlord and Tenant agree that if Tenant ever becomes
the subject of a voluntary or involuntary bankruptcy, reorganization,
composition, or other similar type proceeding under the federal bankruptcy laws,
as now enacted or hereinafter amended, then:
9
10
(a) "Adequate assurance of future performance" by Tenant and/or any
assignee of Tenant pursuant to Bankruptcy Code Section 365 will include (but not
be limited to) payment of an additional/new security deposit in the amount of
three (3) times the then-current Rent payable hereunder.
(b) Any person or entity to which this Lease is assigned pursuant to
the provisions of the Bankruptcy Code, shall be deemed, without further act or
deed, to have assumed all of the obligations of Tenant arising under this Lease
on and after the effective date of such assignment. Any such assignee shall,
upon demand by Landlord, execute and deliver to Landlord an instrument
confirming such assumption of liability.
(c) Notwithstanding anything in this Lease to the contrary, all
amounts payable by Tenant to or on behalf of Landlord under this Lease, whether
or not expressly denominated as "Rent", shall constitute "rent" for the purposes
of Section 502(b)(6) of the Bankruptcy Code.
(d) If this Lease is assigned to any person or entity pursuant to the
provisions of the Bankruptcy Code, any and all monies or other considerations
payable or otherwise to be delivered to Landlord or Agent (including Rent and
other amounts hereunder), shall be and remain the exclusive property of Landlord
and shall not constitute property of Tenant or of the bankruptcy estate of
Tenant. Any and all monies or other considerations constituting Landlord's
property under the preceding sentence not paid or delivered to Landlord or Agent
shall be held in trust by Tenant or Tenant's bankruptcy estate for the benefit
of Landlord and shall be promptly paid to or turned over to Landlord.
SECTION 22: BROKER
Tenant covenants, warrants and represents that the broker set forth in
Section 1.8(A) was the only broker to represent Tenant in the negotiation of
this Lease ("Tenant's Broker"). Landlord covenants, warrants and represents that
the broker set forth in Section 1.8(B) was the only broker to represent Landlord
in the negotiation of this Lease ("Landlord's Broker"). Landlord shall be solely
responsible for paying the commissions of Landlord's Broker. Each party agrees
to and hereby does defend, indemnify and hold the other harmless against and
from any brokerage commissions or finder's fees or claims therefor by a party
(other than Tenant's Broker and Landlord's Broker) claiming to have dealt with
the indemnifying party and all costs, expenses and liabilities in connection
therewith, including, without limitation, reasonable attorneys' fees and
expenses, for any breach of the foregoing. The foregoing indemnification shall
survive the termination of this Lease for any reason.
SECTION 23: ESTOPPEL CERTIFICATES
Tenant shall, from time to time and within ten (10) days after any request
by Landlord, execute and deliver to Landlord (and to any existing or prospective
mortgage lender, ground lessor, or purchaser designated by Landlord), a
statement: (i) certifying that this Lease is unmodified and in full force and
effect (or if there have been modifications, that the same is in full force and
effect as modified and stating the modifications); (ii) certifying the dates to
which the Rent has been paid; (iii) stating whether Landlord is in default in
performance of any of its obligations under this Lease, and, if so, specifying
each such default; (iv) stating whether any event has occurred which, with the
giving of notice or passage of time, or both, would constitute such a default,
and, if so, specifying each such event; and (v) stating whether any rights of
Tenant (e.g., options) have been waived. Any such statement delivered pursuant
hereto shall be deemed a representation and warranty to be relied upon by the
party requesting the certificate and by others with whom Landlord may be
dealing, regardless of independent investigation. Tenant also shall include in
any such statements such other information concerning this Lease as Landlord or
Agent may reasonably request including, but not limited to, the amount of Rent
under this Lease, and whether Landlord has completed all (if any) improvements
to the Premises required under this Lease. Within 10 days of Tenant's request
therefor, Landlord shall execute and deliver to Tenant a statement of like
effect.
SECTION 24: HAZARDOUS SUBSTANCES
24.1 DEFINITIONS. For purposes of this Section 24, "Hazardous Substance"
means any substance or matter regulated or listed under the Resources
Conservation Recovery Act ("RCRA"), 42 U.S.C. Section 6901 et seq., the
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"),
52 U.S.C. Section 9601 et seq., any applicable federal, state, local or common
law relating to the protection of human health or conservation of the
environment (the foregoing laws being referred to herein as "Environmental
Laws"). For purposes of this Section 24, "Landlord's Environmental Liability"
means: any and all losses, liabilities, obligations, penalties, claims, fines,
lost profits, demands, litigation, defenses, costs, judgments, suits,
proceedings, damages (including consequential, punitive and exemplary damages),
disbursements or expenses of any kind or nature whatsoever (including attorneys'
fees at trial and appellate levels and experts' fees and disbursements and
expenses incurred in investigating, defending against, settling or prosecuting
any suit, litigation, claim or proceeding) which may at any time be either
directly or indirectly imposed upon, incurred by or asserted or awarded against
Landlord or any of Landlord's parent and subsidiary corporations and their
affiliates, shareholders, directors, officers, employees, and agents in
connection with or arising from: (i) any Hazardous Substance used, emitted,
released, discharged, generated, manufactured, sold, transported, handled,
stored, treated, reused, disposed of or recycled on, in or under all or any
portion of the Property, or any surrounding areas as a result of the act or
omission of (x) Tenant or any of Tenant's employees, agents, invitees,
contractors or representatives or (y) at Tenant's direction, any third party
after the Commencement Date and prior to the Expiration Date, (ii) any
misrepresentation, inaccuracy or breach of any warranty, covenant or agreement
contained or referred to in this Section 24: (iii) any violation, liability or
claim of violation or liability under any Environmental Laws as a result of the
act or omission of (x) Tenant or any of Tenant's employees, agents, invitees,
contractors or representatives or (y) at Tenant's direction, any third party
after the Commencement Date and prior to the Expiration Date; or (iv) the
imposition of any lien for damages caused by, or the recovery of any costs
incurred for the cleanup of, any release or threatened release of Hazardous
Substances as a result of the act or omission of (x) Tenant or any of Tenant's
employees, agents, invitees, contractors or representatives or (y) at Tenant's
direction, any third party after the Commencement Date and prior to the
Expiration Date.
24.2 PROHIBITION. Tenant shall not conduct or authorize the generation,
transportation, storage, use, treatment or disposal on or in the Premises of any
Hazardous Substance without prior written authorization by Landlord, which
authorization may be given or withheld in Landlord's sole and absolute
discretion, and Tenant's failure to comply with the provisions of this Section
24.2 shall constitute a default under this Lease.
10
11
24.3 PERMITTED ACTIVITIES. Tenant shall, at its own cost, comply with all
applicable Environmental Laws relating to the Premises or Tenant's use of the
Premises and any and all applicable environmental permits relating to the
Premises or Tenant's use of the Premises. Tenant shall promptly provide Agent
copies of all communications, permits or agreements with any governmental
authority or agency (federal, state or local) or any private entity received by
Tenant relating in any way to the presence, release, threat of release,
placement on or in the Premises, or the generation, transportation, storage,
use, treatment, or disposal at the Premises, of any Hazardous Substance.
Landlord, Agent and their respective agents and employees shall have the right
to enter the Premises and/or conduct appropriate tests for the purposes of
ascertaining Tenant compliance with all applicable laws, rules or permits
relating in any way to the presence of Hazardous Substances on the Premises.
Upon written request by Landlord or Agent (given no more than once per calendar
year and only after Landlord's receipt of notice of Tenant's violation of any
Environmental Law), Tenant shall provide Landlord with the results of
appropriate test of air, water or soil to demonstrate that Tenant complies with
all applicable laws, rules or permits relating in any way to the presence of
Hazardous Substances on the Premises or any portion thereof.
24.4 REMEDIAL ACTION. If the presence, release, threat of release,
placement on or in the Premises or any portion thereof, or the generation,
transportation, storage, use, treatment, or disposal at the Premises or any
portion thereof of any Hazardous Substance results directly or indirectly from
any act or omission of (x) Tenant or any of Tenant's employees, agents,
invitees, contractors or representatives or (y) at Tenant's direction, any third
party after the Commencement Date and prior to the Expiration Date and gives
rise to any form of liability (including, but not limited to, a response action,
remedial action, or removal action) under any applicable Environmental Law or an
environmental permit, Tenant, at its sole cost and expense, shall promptly take
any and all remedial and removal action necessary to clean up and/or remediate
the Premises or any portion thereof in accordance with Environmental Law and
mitigate exposure to liability arising from the Hazardous Substance required by
law. Landlord shall be liable for and shall pay, at Landlord's sole cost and
expense (and shall hold Tenant harmless from), all costs related to any and all
clean-up and remediation of Hazardous Substances and compliance with all
applicable Environmental Laws with respect to, arising from or caused, in whole
or in part, directly or indirectly by: (i) the presence in, on or under the
Premises, or the discharge or release, in or from the Premises, of any such
Hazardous Substance to the extent that such presence, discharge or release is
solely caused by Landlord's activities in or at the Premises, or to the extent
same existed prior to the date Tenant takes occupancy of the Premises.
Landlord's obligations under this Section 24.4 shall survive in perpetuity the
expiration of the Term hereof. For purposes of this paragraph, "Landlord" shall
be deemed to include Landlord, its employees, agents, contractors and
representatives.
24.5 INDEMNITY. Tenant shall and does hereby protect, indemnify, defend
(at trial and appellate levels and with counsel, experts and consultants
acceptable to Landlord and at Tenant's sole cost) and hold Landlord and its
Affiliates free and harmless from and against any Landlord's Environmental
Liability or other loss, cost or expense incurred by Landlord and to the extent
resulting from Tenant's breach of its obligations under this Section 24
(collectively, "Tenant's Indemnification Obligations"). Tenant's Indemnification
Obligations shall survive in perpetuity.
SECTION 25 MISCELLANEOUS
25.1 MERGER. All prior understandings and agreements between the parties
are merged in this Lease, which alone fully and completely expresses the
agreement of the parties. No agreement shall be effective to modify this Lease,
in whole or in part, unless such agreement is in writing, and is signed by the
party against whom enforcement of said change or modification is sought.
25.2 NOTICES. Any notice required to be given by either party pursuant to
this Lease, shall be in writing and shall be deemed to have been properly given,
rendered or made only if personally delivered or if sent by Federal Express or
other comparable commercial overnight delivery service, addressed to the other
party at the addresses set forth below (or to such other address as Landlord or
Tenant may designate to each other from time to time by written notice), and
shall be deemed to have been given, rendered or made on the day so delivered or
on the first business day after having been deposited with the courier service:
If to Landlord: First Industrial, L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
With a copy to: First Industrial Realty Trust
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
With a copy to: Barack ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇
If to Tenant: Sabratek Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
With a copy to: ▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇, Esq.
25.3 NON-WAIVER. The failure of either party to insist, in any one or
more instances, upon the strict performance of any one or more of the
obligations of this Lease, or to exercise any election herein contained, shall
not be construed as a waiver or relinquishment for the future of the
performance of such one or more obligations of this Lease or of the right to
11
12
exercise such election, but the Lease shall continue and remain in full force
and effect with respect to any subsequent breach, act or omission. The receipt
and acceptance by Landlord or Agent of Rent with knowledge of breach by Tenant
of any obligation of this Lease shall not be deemed a waiver of such breach.
25.4 LEGAL COSTS. Any party in breach or default under this Lease (the
"Defaulting party") shall reimburse the other party (the "Nondefaulting Party")
upon demand for any costs or expenses that the Nondefaulting Party incurs in
connection with the breach or default, regardless whether suit is commenced or
judgment entered. Such costs shall include reasonable legal fees and costs
incurred for the negotiation of a settlement, enforcement of rights or
otherwise. Furthermore, in the event of litigation, the court in such action
shall award to the party in whose favor a judgment is entered, a reasonable sum
as attorneys' fees and costs, which sum shall be paid by the losing party.
Tenant shall pay Landlord's reasonable attorneys' fees incurred in connection
with Tenant's request for Landlord's consent under provisions of this lease
governing assignment and subletting, or in connection with any other act which
Tenant proposes to do and which requires Landlord's consent.
25.5 PARTIES BOUND. Except as otherwise expressly provided for in this
Lease, this Lease shall be binding upon, and inure to the benefit of, the
successors and assignees of the parties hereto. Tenant hereby releases Landlord
named herein from any obligations of Landlord for any period subsequent to the
conveyance and transfer of Landlord's ownership interest in the Premises
provided that such transferee expressly assumes liability therefor. In the event
of such conveyance and transfer, Landlord's obligations shall thereafter be
binding upon each transferee (whether Successor Landlord or otherwise). No
obligation of Landlord or Tenant shall arise under this Lease until the
instrument is signed by, and delivered to, both Landlord and Tenant.
25.6 RECORDATION OF LEASE. Upon request of either party hereto, the other
party shall cooperate in the recordation of a memorandum of lease relating
hereto.
25.7 SURVIVAL OF OBLIGATIONS. Upon the expiration or other termination of
this Lease, neither party shall have any further obligation or liability to the
other except as otherwise expressly provided in this Lease and except for such
obligations as, by their nature or under the circumstances, can only be, or by
the provisions of this Lease, may be performed after such expiration or other
termination. The provisions of Sections 2, 3, 12, 16, 19, 22, and 24 shall
survive any termination of this Lease.
25.8 GOVERNING LAW, CONSTRUCTION. This Lease shall be governed by and
construed in accordance with the laws of the state in which the Premises are
located. If any provision of this Lease shall be invalid or unenforceable, the
remained of this Lease shall not be affected but shall be enforced to the extent
permitted by law. The captions, headings and titles in this Lease are solely for
convenience of reference and shall not affect its interpretation. This Lease
shall be construed without regard to any presumption or other rule requiring
construction against the party causing this Lease to be drafted. Each covenant,
agreement, obligation, or other provision of this Lease to be performed by
Tenant, shall be construed as a separate and independent covenant of Tenant, not
dependent on any other provision of this Lease. All terms and words used in this
Lease, regardless of the number or gender in which they are used, shall be
deemed to include any other number and any other gender as the context may
require.
25.9 TIME. Time is of the essence of this Lease. If the time for
performance hereunder falls on a Saturday, Sunday or a day that is recognized as
a holiday in the state in which the Premises are located, then such time shall
be deemed extended to the next day that is not a Saturday, Sunday or holiday in
said state.
25.10 AUTHORITY OF TENANT. If Tenant is a corporation, partnership,
association or any other entity, it shall deliver to Landlord, concurrently with
the delivery to Landlord of an executed Lease, certified resolutions of Tenant's
directors or other governing person or body (i) authorizing execution and
delivery of this Lease and the performance by Tenant of its obligations
hereunder and (ii) certifying the authority of the party executing the Lease as
having been duly authorized to do so.
25.11 COUNTERPART EXECUTION. This Lease may be executed in counterparts
and, when all counterpart documents are executed, the counterparts shall
constitute a single binding instrument.
25.12 RIDERS. All Riders and Exhibits attached hereto and executed (or
initialed) both by Landlord and Tenant shall be deemed to be a part hereof and
hereby incorporated herein.
25.13 WAIVER OF TRIAL BY JURY. THE LANDLORD AND THE TENANT, TO THE FULLEST
EXTENT THAT THEY MAY LAWFULLY DO SO, HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR
PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY COURT ACTION BROUGHT BY ANY PARTY
TO THIS LEASE WITH RESPECT TO THIS LEASE, THE PREMISES, OR ANY OTHER MATTER
RELATED TO THIS LEASE OR THE PREMISES.
25.14 PURCHASE CONTINGENCY. Tenant acknowledges and agrees that Landlord's
obligations hereunder, including but not limited to, Landlord's obligations
pursuant to Sections 25.15 or 25.17 hereof, are contingent upon, and shall in no
event commence unless and until, Landlord acquires the Premises from Seller. In
the event that Landlord is unable to acquire the Premises from Seller for any
reason whatsoever, this Lease shall be null and void and of no further force and
effect and neither party shall have any further liability to the other
hereunder. The Commencement Date shall in no event occur unless and until
Landlord has completed its acquisition of the Premises from Seller.
25.15 RENTAL SUBSIDY. Landlord covenants and agrees that from and after
the Commencement Date, on the express condition that Tenant has commenced paying
Rent hereunder and is not in default hereunder, Landlord shall credit against
the Rent due hereunder an amount equal to $21,936.10 (the "Subsidy Amount") each
month until October 1, 1999 which Subsidy Amount represents the monthly base
rent and additional rent payable pursuant to that certain Lease Agreement (the
"Existing Lease") by and between Tenant and American National Bank and Trust
Company of Chicago, Trust No. 40365. Landlord shall have no obligation to
provide the Subsidy Amount if (i) Tenant has not commenced paying Rent
hereunder; (ii) Tenant is in default hereunder beyond applicable notice and cure
periods; or (iii) Tenant has been delivered a notice of default hereunder but
any applicable cure period has not expired; provided, however, that in the event
that Landlord does not provide all or some portion of the Subsidy Amount as a
result of a default by Tenant for which notice has been provided but the cure
period has not lapsed hereunder which is subsequently cured by Tenant in a
timely fashion and in accordance with the
13
requirements of the Lease, Landlord shall pay to Tenant promptly after such
cure an amount equal to that portion of the subsidy Amount that Landlord failed
to provide on account of such default.
25.16 INTERRUPTION OF SERVICES. Nothwithstanding anything to the contrary
contained herein, in the event of any discontinuance or interruption in
utilities or other services at the Premises, which discontinuance or
interruption continues for longer than ten (10) consecutive business days, rent
hereunder shall ▇▇▇▇▇ during such period of discontinuance or interruption.
25.17 TENANTS ACCESS. In the event that Landlord acquires the Premises
from Seller prior to the Commencement Date, Landlord shall permit Tenant and
Tenant's agents or independent contractors to enter the Premises for the limited
purpose of allowing Tenant to perform the build-out activities approved in
advance by Landlord, which approval shall not be unreasonably withheld or
delayed (the "Tenant's Improvement Work"). Such entry prior to the Commencement
Date shall be subject to the condition that (i) Tenant and Tenant's agents,
contractors, workmen, mechanics, suppliers, and invitees shall cooperate with
and not interfere with Landlord and its agents and contractors in completing the
Work Items; (ii) Tenant shall maintain, in full force and effect, the insurance
policy or polices required under the Lease; (iii) Tenant shall pay for any
utilities required solely by Tenant in connection with Tenant's access to the
Premises; and (iv) Tenant shall receive written permission from the City of
Skokie, if necessary under applicable law, authorizing the conduct of Tenant's
Improvement Work ("City Approval"). Tenant agrees that any such entry into the
Premises prior to the Commencement Date for the limited purposes of the Tenant's
Improvement Work shall be deemed to be under all of the terms, covenants,
conditions and provisions of the Lease, except as to the covenant to pay Rent
and Tenant shall be required to pay only that portion of the utilities consumed
at the Premises as is required by item (iii) of the preceding sentence. Tenant
further agrees that to the extent permitted by law, Landlord and its principals
shall not be liable in any way for any injury or death to any person or persons,
loss or damage to any of Tenant's Property or installations made in the Premises
or loss or damage to property placed therein prior to the Commencement Date, the
same being at Tenant's sole risk, except that Landlord (and not its principals)
may be liable to Tenant but only to the extent of its gross negligence or
willful misconduct. Prior to commencing Tenant's Improvement Work, Tenant shall
(i) notify Landlord of the names and addresses of all contractors for whom and
which access is being provided and the approximate number of individuals,
itemized by trade, who will be present in the Premises; (ii) provide Landlord
with copies of all contracts pertaining to the performance of the work for which
such early access is being required; (iii) provide Landlord with copies of all
plans and specifications pertaining to the work for which such access is being
requested; (iv) provided Landlord with copies of all licenses and permits
required in connection with the performance of the work for which such access is
being requested, including, but not limited to, the City Approval; and (v)
provide Landlord with certificates of insurance naming Landlord as additional
insured and instruments of indemnification against all claims, costs, expenses,
damages and liabilities which may arise in connection with Tenant's Improvement
Work. All of the foregoing shall be subject to Landlord's approval, which
approval shall no be unreasonably withheld or delayed. Such access shall be
subject to scheduling by Landlord, but Landlord shall make reasonable efforts to
comply with Tenant's schedule for Tenant's Improvement Work.
25.18 RENEWAL OPTION. Provided that no default exists under this Lease at
the time the option to renew which is described below is exercised, or at the
commencement of the renewal period, Tenant shall have the right to extend the
Term for one three-year period commencing on the Expiration Date, upon the same
terms and conditions as are contained in this Lease, except as hereinafter
provided:
(a) The Base Rent for the renewal period shall be increased (but
in no event decreased) at a rate per annum per square foot of rentable area in
the Premises, equal to the greater of (i) $34,942 per month or (ii) 75% of the
rent per square foot per annum then prevailing in the market for comparable
space in the Chicago metropolitan area for a term equal to the renewal period
and commencing at approximately the date of the renewal period as such rate is
reasonably determined by Landlord.
(b) Landlord shall have no obligation to make improvements,
decorations, repairs, alterations, or additions to the Premises as a condition
to Tenant's obligation to pay Rent for the renewal period, and the Net Base Rent
quoted for the renewal period shall not be reduced by either (aa) by reason of
such fact, (bb) to take into account any rental concession whatsoever
(including, but not limited to rent abatements, allowances for moving expenses,
lease assumptions, or other concessions), or (cc) to take into account the
absence of any cost or expense which Landlord would have incurred had the
Premises been leased to a person or entity other than Tenant.
(c) Landlord's good faith determination of the Net Base Rent for
the renewal period shall be conclusive, binding upon Tenant and not contestable
by Tenant; provided, however, Tenant shall have the right to nullify its
exercise of the option to extend the Term, by written notice to Landlord, given
within thirty (30) days of Landlord's notice to Tenant (which Landlord's notice
shall be given to Tenant not later than six months prior to the commencement of
the renewal period) setting forth the Net Base Rent for the renewal period, in
which event Tenant's exercise of the option to extend shall be null and void and
neither Landlord nor Tenant shall have any further rights or liabilities with
respect thereto. Tenant's failure to given the notice of nullification described
above within such thirty (30) day period shall constitute acceptance by Tenant
of, and Tenant's agreement to pay, the Net Base Rent specified for the renewal
period.
(d) Tenant shall have no further or additional right to extend the
Term of this Lease.
(e) This option to extend shall be exercised, if at all, by
written notice to Landlord given not earlier than eighteen (18) months nor
later than nine (9) months prior to the Expiration Date. In the event Tenant
fails to comply with the procedure for exercise of the option to extend, Tenant
shall have no further right to extend the Term.
(f) The renewal option granted pursuant to this Section 25.18 is
personal to Tenant. If Tenant subleases any portion of the Premises or assigns
or otherwise transfers any interest under the Lease to any other persons or
entity pursuant to, and in accordance with, Section 8 hereof, prior to the
exercise of this renewal option (whether with or without Landlord's consent),
this renewal option shall lapse. If Tenant subleases any portion of the Premises
or assigns or otherwise transfers any interest of Tenant under the Lease to any
entity or person pursuant to, and in accordance with, Section 8 hereof (whether
with or without Landlord's consent) after the exercise of this renewal option
but prior to the commencement of the renewal period, such renewal option shall
lapse and the Term shall expire as if this renewal option were not exercised. If
Tenant subleases any portion of the Premises or assigns or otherwise transfers
any interest of Tenant under the Lease pursuant to, and in accordance with,
Section 8 hereof after the exercise of this renewal option and after the
commencement of the
13
14
renewal period, then the Term shall expire upon the expiration of the renewal
period during which such sublease or transfer occurred
25.19 LANDLORD'S DEFAULT. In the event that Landlord defaults in the
observance or performance of any term or condition required to be performed by
Landlord hereunder, Tenant, may elect to act to cure and remedy such default
hereunder by Landlord; provided, however, that Tenant may not exercise such
remedy without first providing written notice of the alleged default to
Landlord, setting forth with reasonable specificity and detail the nature of
such default, and thereafter permitting Landlord a thirty (30) day period to
cure such default (which cure period may be extended if Landlord is diligently
pursuing performance of the applicable cure, but such cure is not completed
within the 30 day period). In the event that Tenant elects to cure a default by
Landlord as herein provided, Landlord shall reimburse Tenant for all reasonable
third-party costs and expenses actually expended by Tenant to perform any
obligation of Landlord actually and properly owing hereunder. In connection with
the exercise of such remedy or otherwise, Tenant shall not be entitled to any
abatement, deduction or set off against the Rent payable hereunder.
Notwithstanding the above-described remedy, in no event and under no
circumstances may Tenant take any action or perform any repairs, replacements or
restoration involving the foundation, roof or structure of the Premises, or any
of the load-bearing walls. Furthermore, any work performed by Tenant pursuant to
its election of this remedy shall comply with the requirements of Section 11.
IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Lease by
their duly authorized representatives as of the day and year first above
written.
LANDLORD: FIRST INDUSTRIAL, L.P., a Delaware limited partnership
By: First Industrial Realty Trust, Inc., a Maryland
corporation, its general partner
By:
---------------------------------------------
Its:
---------------------------------------------
TENANT: SABRATEK CORPORATION, a Delaware corporation
By:
---------------------------------------------
Its:
---------------------------------------------
14
15
LEASE EXHIBIT A
PREMISES
Premises: The 84,760 square foot warehouse/distribution facility commonly known
as ▇▇▇▇ ▇. ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ more particularly described on
Exhibit A-1 hereto.
A-1
16
LEASE EXHIBIT B
RENTAL PAYMENTS
Year Monthly Rent Annual Rent Per Square Foot
---- ------------ ----------- ----------------
1-3 $33,550.83 $402,610 $4.75
4-5 $34,257.17 $411,086 $4.85
(and month 1 of year 6;
if applicable)
B-1
17
LEASE EXHIBIT C
LANDLORD'S REPAIRS AND IMPROVEMENTS
1. Landlord to place Premises in a "broom swept condition" and place all
HVAC Systems and all other building systems in good working order.
2. Office carpeting to be replaced and office walls to be painted.
3. Paint the walls in the cafeteria and the bathrooms.
C-1
18
LEASE EXHIBIT D
REQUIRED INSURANCE
(a) "ALL-RISK" PROPERTY AND LOSS OF INCOME COVERAGE FOR TENANT'S PROPERTY.
"All Risk" (including, but not limited to, earthquake and flood) (i) property
insurance on a replacement cost basis, covering the building and all of the
other improvements on the Premises, and covering all of Tenant's Property (as
defined in Section 12.2 of this Lease), all merchandise and trade fixtures and
furnishings and equipment and all other personal property of Tenant and all
leasehold improvements installed in the Premises by, or on behalf of, Tenant all
in an amount not less than the full replacement cost of all such improvements
and property and (ii) business interruption insurance in an amount sufficient to
assure that Landlord shall recover the loss of any rental income due and owing
to Landlord from Tenant under the terms of this Lease, which coverage shall
provide such protection to Landlord for a period of not less than twelve (12)
consecutive months. The total amount of the deductible required under each
policy providing such coverage shall be no more than $10,000.00 per loss.
Landlord, Agent and any other parties designated by Landlord (including, but not
limited to, its beneficiary, its general and limited partners, and Superior
Parties) shall be included as loss payee(s).
(b) LIABILITY COVERAGE. Commercial general public liability and
comprehensive automobile liability [and, if necessary to comply with any
conditions of this Lease, umbrella liability insurance] covering Tenant against
any claims arising out of liability of bodily injury and death and personal
injury and advertising injury and property damage occurring in and about the
Premises, and otherwise resulting from any acts and operations of Tenant, its
agents and employees, with limits of not less than total limits of $2,000,000.00
per occurrence and $5,000,000.00 annual general aggregate, per location. The
total amount of a deductible or otherwise self-insured retention with respect to
such coverage shall be not more than $10,000.00 per occurrence. Such insurance
shall include, inter alia: (i) "occurrence" rather than "claims made" policy
forms unless such "occurrence" policy forms are not available; (ii) any and all
liability assumed by Tenant under the terms of this Lease, to the extent such
insurance is available; (iii) premises medical-operations expenses in an amount
not less than $5,000.00 per person, per accident; (iv) a hostile fire
endorsement; (v) Landlord, Agent and any other parties designated by Landlord or
Agent (including, but not limited to, its beneficiary, its general and limited
partners, and Superior Mortgagees) shall be designated as Additional Insured(s)
with respect to (x) the Premises, and (y) all operations of Tenant, and (z) any
property and areas and facilities of Landlord used by Tenant, its employees,
invitees, customers or guests; and (vi) severability of insured parties and any
cross-liability exclusion deleted so that the protection of such insurance shall
be afforded to Landlord in the same manner as if separate policies had been
issued to each of the insured parties.
(c) WORKER'S COMPENSATION COVERAGE. Worker's compensation and employer's
liability insurance in the state in which the Premises and any other operations
of Tenant are located and any other state in which Tenant or its contractors or
subcontractors may be subject to any statutory or other liability arising in any
manner whatsoever out of the actual or alleged employment of others. The total
limits of the employer's liability coverage (including umbrella liability
insurance) shall be not less than the amounts specified in Subsection (b) above.
All insurance policies required under this lease exhibit shall: (i) be
issued by companies licensed to do business in the State in which the Premises
are located and reasonably acceptable to Landlord; (ii) not be subject to
cancellation or material change or non-renewal without at least thirty (30)
days' prior written notice to Landlord and any other parties designated by
Landlord (A) to be loss payee(s) or additional insured(s) under the insurance
policies required from Tenant, or (B) to receive such notices; and (iii) be
deemed to be primary insurance in relation to any other insurance maintained by
Landlord or Agent.
19
FIRST AMENDMENT TO INDUSTRIAL BUILDING LEASE
This First Amendment to Industrial Building Lease (the "Amendment") is made
and entered into this day of June, 1998 by and between FIRST INDUSTRIAL,
L.P., a Delaware limited partnership ("Landlord"), and SABRATEK CORPORATION, a
Delaware corporation ("Tenant").
RECITALS:
WHEREAS, Landlord and Tenant have previously executed and entered into that
certain Industrial Building Lease (the "Lease") dated May 15, 1998; and
WHEREAS, Landlord and Tenant desire to amend and modify certain terms and
conditions contained in the Lease.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged hereby, Landlord and Tenant hereby amend
the Lease and agree as follows:
1. The foregoing recitals are hereby incorporated into the body of this
Amendment as if more fully restated herein.
2. The following language is hereby added to the end of Section 5.2 of
the Lease:
"Landlord and Tenant acknowledge and agree that the Clean Up
Activities shall not be deemed to unreasonably disturb or prevent
Tenant's use and occupancy of the Premises (and Tenant shall have no
right to terminate this Lease pursuant to this Section 5.2 or
otherwise on account of such Clean Up Activities) unless the Clean Up
Activities (i) prevent Tenant from using all of the truck level docks
at the Premises or (ii) result in the loss of use by Tenant of more
than thirty (30) parking spaces or (iii) continue for a period of 90
days.
3. Except as amended hereby, the Lease shall be and remain in full force
and effect.
4. This Amendment may be executed in any number of identical
counterparts, all of which, when taken together, shall constitute the same
instrument. A facsimile copy of this Amendment shall be deemed an original for
all relevant purposes.
20
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first above written.
LANDLORD: FIRST INDUSTRIAL, L.P., a Delaware
limited partnership
By: First Industrial Realty Trust, Inc., a
Maryland corporation its general partner
By:
-----------------------------------
Its:
-----------------------------------
TENANT: SABRATEK CORPORATION, a Delaware
corporation
By:
-----------------------------------
Its:
-----------------------------------
2
21
SECOND AMENDMENT TO INDUSTRIAL BUILDING LEASE
This Second Amendment to Industrial Building Lease (the "AMENDMENT") is
made and entered into this 5th day of August, 1998 by and between FIRST
INDUSTRIAL, L.P., a Delaware limited partnership ("LANDLORD"), and SABRATEK
CORPORATION, a Delaware corporation ("TENANT").
RECITALS:
WHEREAS, Landlord and Tenant have previously executed and entered into that
certain Industrial Building Lease dated May 15, 1998, as amended by that certain
First Amendment to Industrial Building Lease (as amended, the "LEASE"); and
WHEREAS, Landlord and Tenant desire to amend and modify certain terms and
conditions contained in the Lease.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged hereby, Landlord and Tenant hereby amend
the Lease and agree as follows:
1. The foregoing recitals are hereby incorporated into the body of this
Amendment as if more fully restated herein.
2. Notwithstanding the terms of Exhibit D to the Lease, Landlord (and not
Tenant) shall be obligated to maintain "All Risk" (including, but not limited
to, earthquake and flood) property insurance on a replacement cost basis
covering the building and the Premises. Tenant covenants and agrees to reimburse
Landlord for the cost of such insurance promptly after presentation of one or
more invoices for the cost thereof.
3. Except as amended hereby, the Lease shall be and remain in full force
and effect.
4. This Amendment may be executed in any number of identical
counterparts, all of which, when taken together, shall constitute the same
instrument. A facsimile copy of this Amendment shall be deemed an original for
all relevant purposes.
22
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first above written.
LANDLORD: FIRST INDUSTRIAL, L.P., a Delaware
limited partnership
By: First Industrial Realty Trust, Inc., a
Maryland corporation its general partner
By:
-----------------------------------
Its:
-----------------------------------
TENANT: SABRATEK CORPORATION, a Delaware
corporation
By:
-----------------------------------
Its:
-----------------------------------
2