Exhibit 10.13
BUILD-TO-SUIT LEASE AGREEMENT
BY AND AMONG
200 CORPORATE DRIVE, L.L.C., A DELAWARE LIMITED LIABILITY COMPANY, LANDLORD
RAYOVAC CORPORATION, A WISCONSIN CORPORATION, TENANT
▇▇▇▇▇▇▇ DEVELOPMENT PARTNERS, L.L.C., A DELAWARE LIMITED LIABILITY COMPANY,
DEVELOPER
THAT CERTAIN WAREHOUSE, DISTRIBUTION, PACKAGING AND OFFICE FACILITY LOCATED IN
THE ▇▇▇ COUNTY BUSINESS PARK IN ▇▇▇▇▇, ▇▇▇ COUNTY, ILLINOIS
DATED AS OF MAY 2, 2002
TABLE OF CONTENTS
ARTICLE 1. TERM OF SUBLEASE..................................................................2
SECTION 1.1 CONVEYANCE CONTINGENCY....................................................2
SECTION 1.2 INITIAL TERM..............................................................2
SECTION 1.3 DELIVERY DATE; INITIAL TERM COMMENCEMENT DATE.............................3
SECTION 1.4 OPTIONS TO RENEW..........................................................3
SECTION 1.5 EXERCISE OF OPTIONS TO RENEW..............................................3
SECTION 1.6 LETTER OF CREDIT..........................................................4
ARTICLE 2. CONSTRUCTION OF INITIAL IMPROVEMENTS.............................................11
SECTION 2.1 PLANS - CONSTRUCTION - COST OF WORK - TENANT IMPROVEMENT ALLOWANCE.......11
SECTION 2.2 COMPLETION OF IMPROVEMENTS...............................................11
(a) Completion Date for Initial Improvements....................................11
(b) Permitted Delays............................................................11
(c) Affect of Permitted Delays..................................................13
SECTION 2.3 TENANT'S REMEDIES FOR DELAY IN COMPLETION OF IMPROVEMENTS................14
ARTICLE 2A. EXPANSION SPACE..................................................................15
SECTION 2A.1 OPTION TO EXPAND; EXPANSION NOTICE....................................15
SECTION 2A.2 LANDLORD'S PROPOSAL FOR EXPANSION SPACE PARAMETERS AND BASE RENT......16
SECTION 2A.3 INTENTIONALLY DELETED.................................................18
SECTION 2A.4 PREPARATION OF EXPANSION PLANS........................................18
SECTION 2A.5 EXPANSION COMMENCEMENT DATE...........................................19
SECTION 2A.6 SCOPE OF WORK - EXPANSION SPACE.......................................19
SECTION 2A.7 EXPANSION CHANGE ORDERS...............................................20
SECTION 2A.8 WARRANTY AS TO EXPANSION SPACE........................................20
SECTION 2A.9 EXPANSION PUNCH LIST..................................................20
SECTION 2A.10 EXPANSION COSTS.......................................................20
ARTICLE 3. RENT AND OTHER CHARGES...........................................................21
SECTION 3.1 BASE RENT................................................................21
(a) Payment of Base Rent........................................................21
(b) Base Rent During Term for Initial Improvements..............................21
(c) Base Rent Adjustment for Initial Improvements...............................21
(d) Base Rent During Term for Expansion Space...................................22
(e) Expansion Base Rent Adjustment..............................................22
(f) Initial Improvements Change Order Base Rent.................................22
(g) Initial Improvements Change Order Base Rent Adjustment......................23
(h) Base Rent Adjustment Memorandum.............................................23
SECTION 3.2 PRORATION OF BASE RENT...................................................23
SECTION 3.3 ADDITIONAL CHARGES.......................................................23
SECTION 3.4 PAYMENT PAYABLE WITHOUT PRIOR DEMAND; MAXIMUM RATE OF INTEREST...........24
ARTICLE 4. PAYMENT OF TAXES, ASSESSMENTS, ETC...............................................24
SECTION 4.1 ADDITIONAL CHARGES.......................................................24
SECTION 4.2 RENT TAXES...............................................................25
SECTION 4.3 RECEIPTS FOR IMPOSITIONS.................................................25
SECTION 4.4 LANDLORD'S AND TENANT'S RIGHT TO CONTEST IMPOSITIONS.....................26
ARTICLE 5. INSURANCE........................................................................26
SECTION 5.1 LANDLORD'S INSURANCE.....................................................26
(a) Intentionally Deleted.......................................................26
(b) Property Insurance..........................................................26
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(c) Business Interruption Insurance.............................................27
(d) Insurance Companies.........................................................27
SECTION 5.2 TENANT'S INSURANCE.......................................................27
(a) Tenant's Property Insurance.................................................27
(b) Tenant's Property Insurance.................................................27
(b) Tenant's Commercial Liability Insurance.....................................27
(c) Worker's Compensation Insurance.............................................28
(d) Insurance Approval..........................................................28
(e) Cancellation Notice.........................................................28
SECTION 5.3 OTHER INSURANCE PROVISIONS...............................................28
(a) Increased Limits............................................................28
(a) Increased Limits............................................................28
(b) Blanket Coverage............................................................28
SECTION 5.4 TENANT'S CONTRACTOR'S INSURANCE..........................................29
SECTION 5.5 WAIVER OF SUBROGATION....................................................29
SECTION 5.6 RECOVERY OF DAMAGES......................................................29
ARTICLE 6. USE, MAINTENANCE AND MANAGEMENT OF DEMISED PREMISES..............................30
SECTION 6.1 PREMISES USE.............................................................30
SECTION 6.2 TENANT'S OPERATIONS, REPAIRS AND MAINTENANCE; END TERM COST SHARING......30
(a) Tenant's Operations, Repairs and Maintenance................................30
(b) End Term Cost Sharing.......................................................31
SECTION 6.3 MISUSE OR NEGLECT........................................................33
ARTICLE 7. COMPLIANCE WITH LAWS AND ORDINANCES..............................................33
SECTION 7.1 COMPLIANCE...............................................................33
SECTION 7.2 OTHER COMPLIANCE.........................................................34
SECTION 7.3 ENVIRONMENTAL MATTERS....................................................34
(a) Landlord and Tenant Mutual Covenants........................................34
(b) Definitions.................................................................34
(c) Landlord Representation; Landlord Indemnity.................................35
(d) Developer Indemnity.........................................................36
(e) Tenant Covenant; Tenant Indemnity...........................................36
(f) Notice......................................................................36
(g) Exclusive Remedy and Survival...............................................37
(h) Compliance with Other Laws..................................................37
(i) Storage of Hazardous Materials..............................................37
ARTICLE 8. MECHANIC'S LIENS AND OTHER LIENS.................................................37
SECTION 8.1 LIENS AND RIGHT OF CONTEST...............................................37
SECTION 8.2 LIENS CAUSED BY LANDLORD'S WORK..........................................38
SECTION 8.3 OTHER LIENS..............................................................39
ARTICLE 9. INTENT OF PARTIES................................................................39
SECTION 9.1 NET RENT.................................................................39
SECTION 9.2 LANDLORD'S PERFORMANCE FOR TENANT........................................39
SECTION 9.3 PAYMENT FOR LANDLORD'S PERFORMANCE FOR TENANT............................39
ARTICLE 10. DEFAULTS AND LANDLORD'S REMEDIES.................................................39
SECTION 10.1 DEFAULT...............................................................39
SECTION 10.2 RENT AFTER DEFAULT....................................................41
SECTION 10.3 RE-LETTING AFTER DEFAULT..............................................41
SECTION 10.4 ACCEPTANCE AFTER DEFAULT; NO WAIVER...................................41
SECTION 10.5 REMEDIES CUMULATIVE...................................................42
ARTICLE 11 DESTRUCTION AND RESTORATION......................................................42
Section 11.1 Restoration.........................................................42
Section 11.2 Insurance Proceeds..................................................43
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ARTICLE 12 CONDEMNATION.....................................................................43
Section 12.1 Total Condemnation..................................................43
Section 12.2 Partial Condemnation................................................43
Section 12.3 Restoration After Condemnation......................................44
Section 12.4 Rent Adjustment.....................................................44
ARTICLE 13 ASSIGNMENT, SUBLETTING, ETC......................................................44
Section 13.1 Permitted Transfers.................................................44
Section 13.2 Subsequent Assignments..............................................45
Section 13.3 Transfer Upside.....................................................45
Section 13.4 Recapture...........................................................46
Section 13.5 Ineffective Assignment..............................................46
ARTICLE 14. SUBORDINATION, NON-DISTURBANCE, NOTICE TO MORTGAGEE AND
ATTORNMENT....................................................................................46
SECTION 14.1 SUBORDINATION.........................................................46
SECTION 14.2 MORTGAGEE PROTECTION CLAUSE...........................................47
SECTION 14.3 ATTORNMENT............................................................47
ARTICLE 15. INTENTIONALLY LEFT BLANK.........................................................47
ARTICLE 16. TRADE FIXTURES...................................................................47
SECTION 16.1 TRADE FIXTURES........................................................47
ARTICLE 17. CHANGES AND ALTERATIONS..........................................................48
ARTICLE 18. SURRENDER OF PREMISES............................................................50
SECTION 18.1 SURRENDER OF POSSESSION...............................................50
ARTICLE 19. MISCELLANEOUS PROVISIONS.........................................................51
SECTION 19.1 RIGHT OF INSPECTION...................................................51
SECTION 19.2 DISPLAY OF DEMISED PREMISES...........................................51
SECTION 19.3 INDEMNITIES...........................................................52
(a) Tenant......................................................................52
(b) Landlord....................................................................52
SECTION 19.4 NOTICES...............................................................53
SECTION 19.5 AUTHORIZED INDIVIDUALS................................................54
SECTION 19.6 QUIET ENJOYMENT.......................................................54
SECTION 19.7 LANDLORD AND SUCCESSORS...............................................54
SECTION 19.8 LIMITATION ON LANDLORD'S LIABILITY....................................55
SECTION 19.9 ESTOPPELS.............................................................55
SECTION 19.10 SEVERABILITY; GOVERNING LAWS..........................................55
SECTION 19.11 BINDING EFFECT........................................................55
SECTION 19.12 CAPTIONS..............................................................55
SECTION 19.13 LANDLORD - TENANT RELATIONSHIP........................................55
SECTION 19.14 LANDLORD'S PROPERTY...................................................56
SECTION 19.15 SURVIVAL..............................................................56
SECTION 19.16 CLAIMS................................................................56
SECTION 19.17 REASONABLENESS........................................................56
SECTION 19.18 REAL ESTATE BROKER....................................................56
SECTION 19.20 DELIVERY OF CORPORATE DOCUMENTS.......................................56
SECTION 19.21 EXHIBITS; RIDER PROVISIONS............................................57
SECTION 19.22 ATTORNEYS' FEES.......................................................57
SECTION 19.23 TIME IS OF THE ESSENCE................................................57
SECTION 19.24 DEVELOPER'S LIABILITIES...............................................57
SECTION 19.25 LANDLORD'S WAIVER OF MODIFICATIONS....................................58
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SECTION 19.26 MEMORANDUM OF SUBLEASE................................................58
SECTION 19.27 TENANT'S EXCLUSIVE POSSESSION.........................................58
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GLOSSARY OF TERMS
Defined Term Section/Paragraph
------------ -----------------
ADA Work Letter, Sec. 4
Actual Cost of the Work Work Letter, Sec. 7
Additional Charges Section 3.3
Allowance Work Letter, Sec. 7
Application for Payment Work Letter, Sec. 17
Approved Plan Components Work Letter, Sec. 2
Architect Work Letter, Sec. 3
Base Rent Section 3.1(a)
Base Rent Adjustment Section 3.1(c)
Bidders Work Letter, Sec. 8
Budget Work Letter, Sec. 7
Building Recital B
Business Days Section 1.6(e)
Business Interruption Insurance Section 5.1(c)
Building Rules Work Letter, Sec. 4
Building Systems Section 6.2(A)
Capital Replacement Section 6.2(b)
Capital Replacement Costs Section 6.2(b)
Capital Replacement Interest Section 6.2(b)
Capital Replacement Notice Section 6.2(b)
Cash Deposit Section 1.6
Change Order Work Letter, Sec. 11
Change Order Base Rent Adjustment Section 3.1(g)
Change Order Cost Work Letter, Sec. 9
Change Order Cost Cap Work Letter, Sec. 9
Changes In Law Work Letter, Sec. 4
City Recital A
Compliance with Laws Section 7.1
Construction Arbitrator Work Letter, Sec. 19
Construction Subcontractor(s) Work Letter, Sec. 8
Contractor Work Letter, Sec. 1
Contractor's Contract Work Letter, Sec. 1
Contractor's Delay Damages Section 2.3
Contractor's GMP Work Letter, Sec. 7(c)
Contractor's Fee Work Letter, Sec. 7
Contractor's Savings Work Letter, Sec. 7
Contractor Self Performed Work Work Letter, Sec. 8
Contractor's Soft Costs Work Letter, Sec. 7
CPI Index Section 6.2(b)
Default Section 10.1
Demised Premises Recital B
Delivery Date Section 1.3
Developer Introductory Paragraph
Developer's Guaranty Termination Section 19.24
Developer's Lump Sum Fee Work Letter, Sec. 7
Differing Site Conditions Work Letter, Sec. 7
Draw Event Section 1.6(d)
Draw Proceeds Section 1.6(e)
Early Access Work Letter, Sec. 11
End Term Cost Sharing Section 6.2(b)
Environmental Condition(s) Section 7.3(b)(i)
Environmental Laws Section 7.3(b)(ii)
Environmental Liability(ies) Section 7.3(b)(iii)
Estoppel Letter Section 19.9
Excess Change Order Costs Work Letter, Sec. 7
Excess Environmental Condition Work Letter, Sec. 7
Excess Environmental Termination
Costs Work Letter, Sec. 7
Expansion Architect Section 2A.4
Expansion Base Rent Adjustment Section 3.1(e)
Expansion Commencement Date Section 2A.5
Expansion Completion Date Section 2A.5
Expansion Construction Period Section 2A.2
Expansion Costs Section 2A.10
Expansion Equity Return Rate Section 2A.2
Expansion Extension Section 1.2
Expansion Financing Terms Section 2A.2
Expansion Inspection Date Section 2A.9
Expansion Laws Section 2A.1(a)
Expansion Lease Year Section 3.1(d)
Expansion Notice Section 2A.1(a)
Expansion Plans Section 2A.4
Expansion Principal Amount Section 2A.2
Expansion Punchlist Items Section 2A.9
Expansion Space Recital A
Financial Statements Section 19.20
Financing Constant Section 2A.2
First Notice Article 13
First Renewal Term Section 1.4
Fit-Up Work Work Letter, Sec. 11
Fixed Cost(s) Work Letter, Sec. 7
Floor Section 6.2(b)
General Conditions Work Letter, Sec. 7
Good Faith Dispute Section 10.1
Government Economic Incentives Work Letter, Sec. 7
Guaranteed Maximum Price Work Letter, Sec. 7
Guaranteed Obligations Section 19.24
Hard Cost Contingency Work Letter, Sec. 7
Hard Cost Contingency Application Work Letter, Sec. 7
Hazardous Substances Section 7.3(b)(iv)
Impositions Section 4.1
Improvements Recital B
Initial Improvements Final
Plans and Specifications Work Letter, Sec. 4
Initial Improvements Recital A
Initial Improvements Work Work Letter, Sec. 1
Initial Term Section 1.2
Initial Term Commencement Date Section 1.2
Initial Term Termination Date Section 1.2
Insurance Criteria Section 5.1(d)
Issuer Section 1.6(a)(i)
Issuer Quality Event Section 1.6(g)
Land Recital A
Landlord Introductory Paragraph
Landlord's GMP Work Letter, Sec. 7(c)
Landlord's Liquidated Damages Section 2.3
Landlord's Proposal Section 2A.2
Landlord's Savings Work Letter, Sec. 7
Landlord Termination Notice Section 1.1
Lease Introductory Paragraph
Lease Year Section 3.1(b)
Letter of Credit Section 1.6(a)
Mandatory Tenant Funded Tenant
Improvements Work Letter, Sec. 7
Maximum Rate of Interest Section 3.4
MEP Subcontractor(s) Work Letter, Sec. 3
Mortgage Section 14.1
Mortgagee(s) Section 14.2
New Plan Components Work Letter, Sec. 4
New Plan Components Work Letter, Sec. 4
New Work Article 17
Notice to Proceed Section 2A.2
Optional Tenant Funded Tenant
Improvements Work Letter, Sec. 7
Original Tenant Article 13
Park Recital A
Park Assessments Section 4.1
Peak Periods Section 19.1
Permits and Approvals Work Letter, Sec. 1
Permitted Delay(s) Section 2.2(b)
Permitted Transferee Section 13.1
Permitted Uses Section 6.1
Proceedings Section 12.1
Property Insurance Section 5.1(b)
Punch List Items Work Letter, Sec. 12
Purchase Agreement Section 1.1
Rating Agency Section 1.6(b)
Records Work Letter, Sec. 18
Renewal Notice Section 1.5
Renewal Term(s) Section 1.4
Response Notice Section 2A.2
Restoration Section 11.1
Savings Work Letter, Sec. 7(c)
Second Renewal Term Section 1.4
Seller Section 1.1
Lease Introductory Paragraph
Subordination Agreement Section 14.1
Substantially Complete/
Substantial Completion Work Letter, Sec. 10
Tenant Introductory Paragraph
Tenant Extension Section 2.2(b)(i)
Tenant Improvements Recital C
Tenant's Operations, Repairs
and Maintenance Section 6.2(a)
Tenant Performed Expansion Work Section 2A.2
Term Section 1.4
Termination Amount Section 1.1
Third Party Transfer Section 13.3
Total Project Costs Work Letter, Sec. 7
Trade Fixtures Recital B
Transfer Notice Section 13.1
Transfer Upside Section 13.3
Warranty Period Work Letter, Sec. 13
Warranty Work Work Letter, Sec. 13
Work Letter Exhibit 2.1
BUILD-TO-SUIT LEASE AGREEMENT
This
Build-To-Suit Lease Agreement ("LEASE") is made this 2nd day of May,
2002, by and among ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, L.L.C., a Delaware limited company
("LANDLORD"),
RAYOVAC CORPORATION, a Wisconsin corporation ("TENANT"), and, for
the limited purposes hereafter provided, ▇▇▇▇▇▇▇ DEVELOPMENT PARTNERS, L.L.C., a
Delaware limited liability company ("DEVELOPER").
RECITALS
A. Subject to the Conveyance Contingency as defined and set forth in
Section 1.1 hereof, Landlord, for and in consideration of the rents, covenants
and agreements hereinafter contained, hereby leases, rents, lets and demises
unto Tenant, and Tenant does hereby take and hire, upon and subject to the
conditions and limitations hereinafter expressed, all that approximately 55 acre
parcel of land situated in the ▇▇▇ County Business Park ("PARK") in the City of
▇▇▇▇▇ ("CITY"), County of ▇▇▇, State of
Illinois, described in EXHIBIT A
attached hereto and made a part hereof (the "LAND"), together with all
improvements located on and to be constructed thereon pursuant to the terms and
conditions hereof. The initial improvements to be constructed on the Land on
behalf of Landlord by Contractor (as hereafter defined), in accordance with the
Initial Improvement Final Plans and Specifications (as hereafter defined) and as
provided in the Work Letter attached to this Lease as EXHIBIT 2.1 hereof, shall
consist of approximately 576,242 square foot warehouse/distribution and office
facility containing approximately 20,608 square feet of office space, and the
other improvements provided in the Initial Improvements Final Plans and
Specifications which are collectively referred to as the "INITIAL IMPROVEMENTS."
The improvements, if any, to be constructed by Landlord pursuant to Tenant's
right to expand as provided in Article 2A hereof are referred to as the
"EXPANSION SPACE."
B. Improvements, Expansion Space and all other improvements,
machinery, equipment, fixtures and other property, real, personal or mixed,
except those items of Tenant's attached or unattached personalty, which are
deemed to be Trade Fixtures (as provided in Article 16, the "TRADE FIXTURES")
installed or located thereon, together with all additions, alterations and
replacements thereof are collectively referred to as the "IMPROVEMENTS." The
Land, Improvements and any alterations, modifications or additions thereto are
hereafter collectively referred to as the "DEMISED PREMISES." The structure
located upon and forming a part of the Demised Premises which are constructed
for human occupancy or for storage of goods, merchandise, equipment, or other
personal property is collectively called the "BUILDING."
C. For the purposes of Tenant's financial reporting, it is the intent
of Landlord and Tenant that this Lease constitute an operating lease pursuant to
generally accepted accounting principles, consistently applied, existing as of
the date of this Lease.
D. The location in this Lease of all defined terms is set forth in the
Glossary of Terms attached hereto and made a part hereof.
NOW, THEREFORE, for and in consideration of the mutual covenants and
conditions contained in this Lease, the foregoing Recitals which are deemed to
form a part of this Lease as if
fully restated herein, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Landlord, Tenant and
Developer, agree as follows:
ARTICLE 1
TERM OF LEASE
SECTION 1.1 CONVEYANCE CONTINGENCY. Concurrent with the execution and
delivery of this Lease, Landlord, as purchaser, entered into that certain Real
Estate Purchase and Sale Agreement ("PURCHASE AGREEMENT") with LaSalle Bank
National Association, not personally, but solely as Trustee under Trust
Agreement dated February 27, 2002 and known as Trust No. 128936, as seller
("SELLER"). The Purchase Agreement provides for the purchase by Landlord and the
sale and conveyance by Seller of fee title to the Land.
Notwithstanding anything contained in this Lease to the contrary, if by May
31, 2002, for any reason other than a default by Landlord of its obligations
under the terms of the Purchase Agreement, Tenant fails to convey title to the
Land to Landlord in accordance with the terms, provisions and conditions of the
Purchase Agreement, then at any time thereafter, by written notice from Landlord
to Tenant ("LANDLORD TERMINATION NOTICE"), Landlord may elect to terminate and
cancel this Lease. In the event Landlord delivers the Landlord Termination
Notice, then on the date of receipt of the same by Tenant, this Lease shall
automatically terminate and be of not further force and effect, except for the
obligation of Tenant to pay to Landlord the Termination Amount (as hereafter
defined) within thirty (30) days following Tenant's receipt of an invoice
containing reasonable specificity and supporting documentation evidencing and
setting forth the computation of the amount ("TERMINATION AMOUNT") equal to 1.03
multiplied by the sum of (i) all of the Actual Cost of the Work (as hereafter
defined) incurred by Landlord up to the date of such Landlord Termination
Notice, MINUS (ii) any portion of the sum of the Developer's Lump Sum Fee, Hard
Cost Contingency and Contractor's Fee (as all of the preceding terms are
hereafter defined), except that portion of the Contractor's Fee earned to the
date of such Landlord Termination Notice. The obligation of Tenant to pay the
Termination Amount shall survive such termination.
SECTION 1.2 INITIAL TERM. Subject to the Conveyance Contingency and
except for the Expansion Extension (as hereafter defined), if any, the initial
term of this Lease ("INITIAL TERM") shall be for fifteen (15) years (subject to
renewal thereof as described in Section 1.4 hereof). The Initial Term shall
commence on the Initial Term Commencement Date (as hereafter defined), and end,
except for the Expansion Extension, if any, at 11:59 P.M. local time of the
Demised Premises, on the date which is fifteen (15) years after the Initial Term
Commencement Date ("INITIAL TERM TERMINATION DATE").
If Tenant exercises its option provided in Article 2A hereof to cause
Landlord to plan, design and construct and add to the Demised Premises the
Expansion Space, the Initial Term shall nonetheless commence on the Delivery
Date (as hereafter defined) or on the date the Delivery Date would have
occurred, but for Tenant Extensions (as hereafter defined), and shall be for the
period that is the longer of and the Initial Term Termination Date shall occur
(i) fifteen (15) years from and after the Delivery Date (or the date the
Delivery Date would have occurred, but for Tenant Extensions), or (ii) ten (10)
years from and after the Expansion Commencement Date (as hereafter
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defined) ("EXPANSION EXTENSION"). Notwithstanding the foregoing, if Tenant
exercises its option for Tenant Performed Expansion Work (as defined and
provided in Section 2A.2 hereof), there will be no Expansion Extension.
Subject to Permitted Delays (as hereafter defined), (i) the Initial
Improvements will be Substantially Complete (as hereafter defined) on and the
Delivery Date will be January 28, 2003 ("INITIAL TERM COMMENCEMENT DATE"), and
(ii) except in the instance of the Expansion Extension, if any, the Initial Term
Termination Date will be 11:59 P.M. local time of the Demised Premises on
January 27, 2018. However, nothing in this Lease shall prevent the Initial Term
Commencement Date from occurring prior to January 28, 2003, but in no instance
prior to January 15, 2003. The Initial Term Commencement Date and the Initial
Term Termination Date are subject to adjustment as set forth in this Article 1
and in Section 2.2 hereof.
SECTION 1.3 DELIVERY DATE; INITIAL TERM COMMENCEMENT DATE. The
"DELIVERY DATE" shall be the date on which all of the Initial Improvements are
Substantially Complete. However, anything in this Lease (including the Work
Letter) to the contrary notwithstanding, in the event that (i) the Initial
Improvements are not Substantially Complete, and (ii) if applicable, the
Construction Arbitrator (as defined in the Work Letter) has certified that, as
of a date certain set forth in such certification, the Initial Improvements
would have been Substantially Complete, but for a Tenant Extension(s), then the
Initial Term shall commence on the Initial Term Commencement Date that shall
nonetheless be deemed to have occurred on the date certain set forth in the
Construction Arbitrator's aforesaid certification.
SECTION 1.4 OPTIONS TO RENEW. Subject to the terms, provisions and
conditions of this Lease, Tenant shall have two (2) five (5)-year options to
extend Tenant's rights under the terms of this Lease. In the event Tenant
exercises either or both of such options to renew, the time period contained in
each of the two (2) successive five (5) year periods thereafter shall be
referred to, respectively, as the "FIRST RENEWAL TERM" and "SECOND RENEWAL
TERM." The First Renewal Term and Second Renewal Term are sometimes hereinafter
individually referred to as a "RENEWAL TERM," and are sometimes hereinafter
collectively referred to as "RENEWAL TERMS." The Initial Term and any and all
Renewal Terms are sometimes hereinafter collectively referred to as the "TERM."
If applicable, the First Renewal Term shall commence on the day after the
Initial Term Termination Date and the Second Renewal Term shall commence on the
fifth anniversary of the date on which the First Renewal Term commenced.
Except for modifications of Base Rent (as hereafter defined), and except as
otherwise specifically provided herein, all of the other terms, provisions and
conditions of this Lease shall apply during each Renewal Term exercised by
Tenant as hereafter provided as and to the same extent as they apply during the
Initial Term.
SECTION 1.5 EXERCISE OF OPTIONS TO RENEW. If Tenant wishes to exercise
its options for either of the Renewal Terms, it shall give written notice
thereof ("RENEWAL NOTICE") to Landlord not later than twelve (12) months prior
to the expiration, as applicable, of the Initial Term and the First Renewal
Term. Tenant may give its Renewal Notice at any time prior to the dates above
provided, but if Tenant shall fail to give its Renewal Notice prior to the
applicable date above
3
provided, it shall act as notice from Tenant to Landlord that Tenant has waived
its right to elect to extend the Term for the applicable Renewal Term.
It shall be a condition to the exercise and effectiveness of the extension
of the Term for each Renewal Term that Tenant shall not be in Default (as
hereafter defined) of any of the terms, provisions or conditions of this Lease,
either at the time of delivery of the applicable Renewal Notice or at the
commencement of the applicable Renewal Term; provided, however, that Landlord
shall have the right, in its sole discretion, to waive any such Default for
purposes of Tenant's exercise of the subject Renewal Term. Notwithstanding the
foregoing, Tenant shall not be permitted to exercise its right to the Second
Renewal Term, unless Tenant has exercised its right to the First Renewal Term.
SECTION 1.6 LETTER OF CREDIT. Within three (3) Business Days (as
hereafter defined) of the date of the execution and delivery of this Lease by
Landlord and Tenant, to secure Tenant's obligations under this Lease, Tenant
shall deliver to Landlord either (i) cash or other form of payment in
immediately available funds in the amount required pursuant to sub-Paragraph (a)
below ("CASH DEPOSIT"), or (ii) a letter of credit in accordance with the
following terms, provisions and conditions:
(a) If Tenant elects not to deliver a Cash Deposit, Tenant shall
deliver to Landlord an unconditional, irrevocable, standby letter
of credit ("LETTER OF CREDIT") in the amount of $850,000.00 which
conforms in substance to EXHIBIT 1.6(a) attached hereto and made a
part hereof (or is otherwise reasonably acceptable to Issuer and
Landlord) and which satisfies the following requirements:
(i) is issued by a United States federal or state chartered
bank that (A) is either a member of the New York Clearing
House Association or is a commercial bank or trust company
reasonably acceptable to Landlord, and (B) is otherwise
reasonably acceptable to Landlord ("ISSUER");
(ii) names Landlord as beneficiary thereunder;
(iii) has a term ending not less than one year after the date of
issuance;
(iv) automatically renews for one (1)-year periods unless Issuer
notifies beneficiary, in writing, at least sixty (60) days
prior to the expiration date thereof, that Issuer elects
not to renew the Letter of Credit;
(v) provides for payment to Landlord upon the occurrence of a
Draw Event (as hereafter defined) of immediately available
funds (denominated in United States dollars);
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(vi) provides that draws may be presented, and are payable, at
Issuer's letterhead office or, if permitted by Issuer, any
other full service office of Issuer;
(vii) is payable in sight drafts which only require the
beneficiary to state that the draw is payable to the order
of beneficiary;
(viii) permits partial and multiple draws;
(ix) permits multiple transfers by beneficiary (provided,
however, Tenant shall be required to pay any required
transfer fees only in the case of a transfer in connection
with the sale, conveyance or transfer of title of or to the
Demised Premises and provided Tenant's obligation to so pay
the transfer fees does not occur more frequently than once
per calendar year);
(x) waives any rights that Issuer may have, at law or
otherwise, to subrogate to any claims beneficiary may have
against applicant; and
(xi) is governed by the International Standby Practices 1998,
published by the International Chamber of Commerce.
Subject to Section 1.6(b) hereof, the Letter of Credit (as
transferred, extended, renewed or replaced) must be maintained
during the entire Term, as extended or renewed, and for a period of
seventy-five (75) days thereafter.
(b) In the event at any time during the Term Tenant delivers written
notice to Landlord, together with reasonable supporting
documentation, that Tenant's corporate credit rating achieves a
so-called "investment grade" for a continuous period of not less
than twelve (12) months as determined by Standard & Poors
Corporation, ▇▇▇▇▇'▇ Investors Service, Inc. or any other
nationally recognized rating agency if both of the foregoing cease
to exist ("RATING AGENCY"), then the amount of the Letter of Credit
may be reduced to one-twelfth of the annual Base Rent for the
Initial Improvements, PLUS if applicable, one-twelfth of the annual
Base Rent for the Expansion Space as provided in Section 1.6(k)
hereof for the remainder of the Term. Tenant shall deliver to
Landlord a replacement Letter of Credit for the reduced amount, but
otherwise on the same terms and conditions provided in Section
1.6(a) hereof. Upon receipt by Landlord of such replacement Letter
of Credit, Landlord shall deliver to Tenant the original Letter of
Credit.
(c) Landlord may freely transfer the Letter of Credit in connection
with an assignment of this Lease without (i) Tenant's consent, (ii)
restriction on
5
the number of transfers, or (iii) condition, other than presentment
to Issuer of the original Letter of Credit and a duly executed
transfer document conforming in substance to the form attached as
Exhibit B to the form of Letter of Credit that is attached hereto
as EXHIBIT 1.6(a). Tenant is solely responsible for any bank fees
or charges imposed by Issuer in connection with the issuance of the
Letter of Credit or any transfer, renewal, extension or replacement
thereof; provided, however, Tenant shall be required to pay any
required transfer fee only in the case of a transfer in connection
with the sale, conveyance or transfer of title of or to the Demised
Premises and provided Tenant's obligation to so pay the transfer
fees does not occur more frequently than once per calendar year.
Subject to the foregoing, Landlord may, at its option and without
notice to Tenant, elect to pay any transfer fees to Issuer when
due, and upon payment, such amount will become immediately due and
payable from Tenant to Landlord as Additional Charges (as hereafter
defined) under this Lease.
(d) "DRAW EVENT" means the occurrence of any of the following events:
(i) Tenant (1) fails to pay fully any installment of Base Rent
or Additional Charges as and when due more than twice in
any Lease Year (as hereafter defined), and such failure
continues for a period of fifteen (15) days, or (2) after
two late payments in any Lease Year, fails to pay any such
installment and such failure continues for a period of five
(5) days;
(ii) Tenant (A) breaches or fails to timely perform of any of
its other obligations under this Lease, (B) such breach or
failure continues for a period of thirty (30) days without
regard to any cure period granted under this Lease and
without regard to whether such breach or failure is
determined (upon occurrence or at any later time) to be an
event of Default, and (C) Tenant has either failed to
commence cure of the breach or failure or, if cure has been
commenced, is not diligently pursuing such cure;
(iii) Any other of the events described in Section 10.1 hereof,
but without regard to any cure period granted under such
Section 10.1 (except as provided in sub-paragraphs (i) and
(ii) above) and without regard to whether such event is
determined (upon occurrence or at a later time) to be a
Default;
(iv) A Default; or
(v) Tenant holds over or remains in possession of the Demised
Premises after the expiration of the Term or earlier
termination of this Lease, without Landlord's consent.
6
(e) Immediately upon the occurrence of any one or more Draw Events, and
at any time thereafter, Landlord may draw on the Letter of Credit,
in whole or in part (if a partial draw is made, Landlord may make
multiple draws), as Landlord may determine in Landlord's sole and
absolute discretion. The term "DRAW PROCEEDS" means the cash
proceeds of any draw or draws made by Landlord under the Letter of
Credit. Any delays by Landlord in drawing on the Letter of Credit
or using the Draw Proceeds will not constitute a waiver by Landlord
of any of its rights hereunder with respect to the Letter of Credit
or the Draw Proceeds. Landlord will hold the Draw Proceeds in its
own name and may co-mingle the Draw Proceeds with other accounts of
Landlord or invest them as Landlord may determine in its sole and
absolute discretion. In addition to any other rights and remedies
Landlord may have, Landlord may, in its sole and absolute
discretion and at any time or from time to time, use and apply all
or any portion of the Draw Proceeds to pay Landlord for any one or
more of the following:
(i) Base Rent, Additional Charges or any other sum which is
from time to time is past due, or to which Landlord is
otherwise entitled under the terms of this Lease, whether
due to the passage of time, the existence of a Default or
otherwise (including, without limitation, interest, charges
and any amounts which Landlord is or would be allowed to
collect under the terms of this Lease, and without
deducting therefrom any offset for proceeds of any
potential reletting or other potential mitigation which has
not in fact occurred at the time of the draw);
(ii) any and all amounts reasonably incurred or expended by
Landlord in connection with the exercise and pursuit of any
one or more of Landlord's rights or remedies under this
Lease, including, without limitation, reasonable attorneys'
fees and costs;
(iii) any and all amounts reasonably incurred or expended by
Landlord in obtaining the Draw Proceeds, including, without
limitation, reasonable attorneys' fees and costs; or
(iv) any and all other damage, injury, reasonable expense or
liability caused to or incurred by Landlord as a result of
any Default, Draw Event or other breach, failure or default
by Tenant under this Lease.
To the extent that Draw Proceeds exceed the amounts so applied,
such excess Draw Proceeds will be deemed paid to Landlord to
establish a credit on Landlord's books in the amount of such
excess, which credit
7
may be applied by Landlord thereafter, in Landlord's sole and
absolute discretion, to any of Tenant's obligations to Landlord
under this Lease as and when they become due. Following any use or
application of the Draw Proceeds, if requested by Landlord in
writing, Tenant must, within ten (10) business days (i.e. all
calendar days, excluding Saturdays, Sundays and any national
banking holidays in the State of
Illinois, are referred to as
"BUSINESS DAY(S)") after receipt of Landlord's request, cause a
replacement Letter of Credit to be issued and delivered to Landlord
in accordance with, as applicable, Sections 1.6(a) or 1.6(b)
hereof. Upon Landlord's receipt of the replacement Letter of
Credit, Landlord will deliver the prior original Letter of Credit
to Issuer for cancellation (if not theretofore fully drawn) and any
unapplied Draw Proceeds will be applied in accordance with Sections
1.6(e)(i), 1.6(e)(ii), 1.6(e)(iii) and 1.6(e)(iv) hereof. If it is
determined or adjudicated by a court of competent jurisdiction that
Landlord was not entitled to draw on the Letter of Credit or apply
any Draw Proceeds, Tenant may, as its sole and exclusive remedy,
(i) cause Landlord to deliver the prior original Letter of Credit
to Issuer for cancellation (if not theretofore fully drawn), and
(ii) recover from Landlord the Draw Proceeds and all out-of-pocket
fees (including reasonable attorneys' fees), costs and interest
expenses actually incurred by Tenant as a direct result of
Landlord's draw on the Letter of Credit or application of any Draw
Proceeds; provided, however, that Tenant may exercise its exclusive
remedy only after Tenant has caused a replacement Letter of Credit
to be issued and delivered to Landlord in accordance with this
Section 1.6. Anything in this Lease to the contrary
notwithstanding, Landlord will not be liable for any indirect,
consequential, special or punitive damages incurred by Tenant in
connection with either a draw by Landlord on the Letter of Credit
or the use or application by Landlord of the Draw Proceeds in the
absence of gross negligence or willful misconduct by Landlord.
Nothing in this Lease or in the Letter of Credit will confer upon
Tenant any property right or interest in any Draw Proceeds.
(f) The Letter of Credit must provide that it will be automatically
renewed unless Issuer provides written notice of non-renewal to
Landlord at least sixty (60) days prior to the expiration date of
the Letter of Credit. If written notice of non-renewal is received
from Issuer, Tenant must renew the Letter of Credit or replace it
with a new Letter of Credit or a Cash Deposit, at least thirty (30)
days prior to the stated expiration date of the then-current Letter
of Credit. Any renewal or replacement Letter of Credit must meet
the criteria set forth, as applicable, in Sections 1.6(a) or 1.6(b)
hereof and have a term commencing at least one (1) day prior to the
stated the expiration date of the immediately prior Letter of
Credit.
(g) If an Issuer Quality Event (as hereafter defined) occurs, upon
thirty (30) days' prior written notice from Landlord, Tenant must,
at Tenant's own
8
cost and expense, provide Landlord with a replacement Letter of
Credit meeting all of the requirements, as applicable, of Sections
1.6(a) or 1.6(b) hereof. The term "ISSUER QUALITY EVENT" means the
quality of Issuer's creditworthiness ceases to be reasonably
acceptable to Landlord.
(h) Tenant expressly acknowledges and agrees that: (i) the Letter of
Credit constitutes a separate and independent contract between
Landlord and Issuer, and Tenant has no right to submit a draw to
Issuer under the Letter of Credit; (ii) Tenant is not a third-party
beneficiary of such contract, and Landlord's ability to either draw
under the Letter of Credit for the full or any partial amount
thereof or to apply Draw Proceeds may not be conditioned,
restricted, limited, altered, impaired or discharged in any way by
virtue of any laws to the contrary, including, without limitation,
any laws which restrict, limit, alter, impair, discharge or
otherwise affect any liability that Tenant may have under this
Lease or any claim that Landlord has or may have against Tenant;
(iii) Tenant's rights and obligations in connection with the Letter
of Credit and any Draw Proceeds are as specified in this Section,
and neither the Letter of Credit nor any Draw Proceeds will be or
become the property of Tenant, and Tenant does not and will not
have any property right or interest therein; (iv) Tenant is not
entitled to any interest on any Draw Proceeds; (v) neither the
Letter of Credit nor any Draw Proceeds constitute an advance
payment of Base Rent, security deposit or rental deposit; (vi)
neither the Letter of Credit nor any Draw Proceeds constitute a
measure of Landlord's damages resulting from any Draw Event,
Default or other breach, failure or default (past, present or
future) under this Lease; and (vii) Tenant will cooperate with
Landlord, at Tenant's own expense, in promptly executing and
delivering to Landlord all modifications, amendments, renewals,
extensions and replacements of the Letter of Credit, as Landlord
may reasonably request to carry out the terms and conditions of
this Section 1.6.
(i) Tenant hereby irrevocably waives any and all rights and claims that
it may otherwise have at law or in equity, to contest, enjoin,
interfere with, restrict or limit, in any way whatsoever, any
requests or demands by Landlord to Issuer for a draw or payment to
Landlord under the Letter of Credit which conform to the
requirements set forth herein. If Tenant, or any person or entity
on Tenant's behalf or at Tenant's direction, brings any proceeding
or action to contest, enjoin, interfere with, restrict or limit, in
any way whatsoever, any one or more draw requests or payments under
the Letter of Credit and the proceeding or action is decided
adversely to Tenant, Tenant will be liable for any and all direct
and indirect damages resulting therefrom or arising in connection
therewith, including, without limitation, reasonable attorneys'
fees and costs.
(j) At any time during the Term, Tenant can elect, in its sole
discretion, to substitute the Cash Deposit for the Letter of
Credit, or after the
9
substitution of the Cash Deposit for the Letter of Credit, the
re-substitution of the Letter of Credit for the Cash Deposit and so
on, back and forth, but in no event more than twice in any calendar
year. If Tenant elects to substitute the Cash Deposit for the
Letter of Credit, promptly following the delivery to Landlord of
the Cash Deposit (in the amount required pursuant to Sections
1.6(a), 1.6(b) and 1.6(k) hereof, as applicable, Landlord shall
deliver to Tenant the Letter of Credit then in effect. If Tenant
elects to substitute the Letter of Credit for the Cash Deposit,
promptly following the delivery to Landlord of the Letter of Credit
(in the amount required pursuant to Sections 1.6(a), 1.6(b) and
1.6(k) hereof, as applicable, and on the terms provided in Section
1.6(a) hereof), Landlord shall deliver to Tenant the Cash Deposit
(or the amount remaining thereof if Landlord made a permitted
application thereof), plus all interest or gain earned thereon that
was not previously paid to Tenant as hereafter provided in this
Section 1.6.
(k) In the event pursuant to Article 2A hereof, Tenant elects to have
Landlord construct the Expansion Space, concurrently with the
delivery of the Notice to Proceed (as hereafter defined), Tenant
shall deliver to Landlord a replacement Letter of Credit in the
amount provided in Section 1.6(a) (reduced, if applicable, pursuant
to Section 1.6(b) hereof), PLUS an amount equal to one-half of the
amount of the annual Base Rent for the Expansion Space contained in
Landlord's Proposal (as hereafter defined), but if the provisions
of Section 1.6(b) are then applicable, then only one-twelfth of the
such annual Base Rent for the Expansion Space. Tenant shall deliver
to Landlord such replacement Letter of Credit for the reduced
amount, but otherwise on the same terms and conditions provided in
Section 1.6(a) hereof. Upon receipt by Landlord of such replacement
Letter of Credit, Landlord shall deliver to Tenant the original
Letter of Credit.
In the event Tenant elects to deliver the Cash Deposit in lieu of or in
substitution of the Letter of Credit, the Cash Deposit shall be deposited by
Landlord into an account separate from all of Landlord's other accounts and into
which Landlord shall not co-mingle any other funds. The Cash Deposit may be
invested in any of the following: (i) U.S. Government obligations, (ii)
securities as to which the principal and interest are unconditionally guaranteed
by the United State of America, (iii) obligations of any corporation whose
commercial paper is rated "A1" or "P1" by any Rating Agency, (iv) repurchase
agreements fully secured by U.S. Government obligations, or (v) interest-bearing
accounts, time deposits, and certificates of deposit issued by any bank, trust
company or national banking association which has capital, surplus, and
undivided profits in excess of $50,000,000.00, but Landlord shall not be liable
for the performance of any such investment. The Cash Deposit may be applied by
Landlord and Landlord shall be liable to Tenant for the application of all of
any portion of the Cash Deposit in the same manner and to the same extent to the
application by Landlord of Draw Proceeds above provide.
10
To the extent (i) any investment of the Cash Deposit reduces the principal
amount of the Cash Deposit, or (ii) Landlord applies any portion of the Cash
Deposit to remedy any obligation of Tenant hereunder Landlord has right to so
remedy, Landlord shall promptly notify Tenant of the same, in writing, and
within fifteen (15) days following receipt of such notice, Tenant shall deposit
with Landlord for deposit by Landlord in the separate account above provided the
amount by which the original principal amount of the Cash Deposit was reduced as
aforesaid.
All interest earned on or gain realized on the investment as aforesaid of
the Cash Deposit, after deducting the reasonable out-of-pocket cost and expense,
if any, incurred by Landlord that is charged by any third party for making any
of the foregoing investments shall be paid by Landlord to Tenant, not more
frequently than annually during the Term, within thirty (30) days following
Landlord's receipt of written request from Tenant for the payment of such
interest or gain.
ARTICLE 2
CONSTRUCTION OF INITIAL IMPROVEMENTS
SECTION 2.1 PLANS - CONSTRUCTION - COST OF WORK - TENANT IMPROVEMENT
ALLOWANCE.
In accordance with the terms and provisions of the Work Letter ("WORK
LETTER") attached hereto as EXHIBIT 2.1 and the appendices attached thereto,
Landlord and Developer shall provide or cause to be provided:
(i) Initial Improvement Final Plans and Specifications to be prepared
and approved by Tenant;
(ii) the Initial Improvements Work (as hereafter defined) to performed
by the Contractor and those Construction Subcontractors (as
hereafter defined) as required by the Work Letter;
(iii) the Initial Improvements to be constructed substantially in
accordance with the Initial Improvement Final Plans and
Specifications;
(iv) the payment of the Total Project Costs (as hereafter defined);
(v) Punch List Items for the Initial Improvements to be prepared,
approved and completed; and
(x) the Warranty Work (as hereafter defined) for the Initial
Improvements.
SECTION 2.2 COMPLETION OF IMPROVEMENTS.
(a) COMPLETION DATE FOR INITIAL IMPROVEMENTS. Subject to Permitted
Delays, Landlord shall cause the Initial Improvements to be Substantially
Complete not later than January 28, 2003.
(b) PERMITTED DELAYS. As applicable, the Delivery Date for the
Substantial Completion of the Initial Improvements and/or the Expansion
Commencement Date shall be extended if
11
Landlord, Developer, Contractor, Construction Subcontractors or any of their
employees, agents, sub-subcontractors or representatives, are delayed as a
result of any one or more of the following:
(i) (1) the failure of Tenant to either respond to Landlord's
submissions or to submit Tenant's submissions within the time
frames set forth in the attached Work Letter or as provided in
Article 2A hereof in respect to the Expansion Space, but only to
the extent the work on the Initial Improvements or Expansion Space
is actually delayed thereby; (2) period to which date of
performance is extended as a result of Change Orders (as hereafter
defined) signed or required to be signed by Tenant for Change
Orders initiated or directed by Tenant that are not due to the
fault of Landlord, Developer, Contractor, Construction
Subcontractors or their respective employees, agents,
sub-subcontractors, materialmen or representatives or any other
party undertaking any work on behalf of Landlord in respect to the
Demised Premises; (3) any act, omission or neglect of Tenant or of
any employee, agent, contractor, sub-contractor of Tenant while
undertaking the Fit-Up Work (as hereafter defined) in contravention
of the requirements set forth in the Work Letter, but only to the
extent that the work on the Initial Improvements or Expansion Space
is actually delayed thereby; (4) but for a default by Landlord
under the terms of the Purchase Agreement, the failure of Seller to
convey title to the Land to Landlord pursuant to the terms of the
Purchase Agreement; (5) any governmental embargo restrictions, or
actions or inactions of local, state or federal governments in
respect to any permits, approvals or authorizations required for
the remediation, handling or disposal of any Hazardous Substances
on or under the Land, which Hazardous Substances are determined to
have existed on or under the Land prior to the date of this Lease
and are discovered within the period expiring sixty (60) days
following the date of this Lease, as extended as a result of
Permitted Delays; and (6) the failure of the responsible party,
including ▇▇▇ County Development Association under the terms of
that certain Development Agreement dated April 20, 2002, to
complete (a) any Park improvements such as roadways, extension of
utilities, stormwater detention facilities and other Park
improvements (excluding the Initial Improvements) and the mass
grading of the Land required to be performed other than that
required as part of the Initial Improvements Work, or (b) any
infrastructure improvements that, in the instance of either clauses
(a) or (b) above, precludes the issuance of a temporary or
permanent certificate of occupancy by the City for the Initial
Improvements, except to the extent the Initial Improvements are not
yet complete to a degree to obtain such certificate of occupancy or
prohibits the commencement or continuation of any of the Initial
Improvements Work when scheduled to so commence as provided in the
Contractor's Contract (as hereafter defined) (collectively, in
respect to clauses (1) through (6) above, "TENANT EXTENSION");
(ii) any failure of or delay in the availability of any one or more
public utilities required by the Initial Improvement Final Plans
and Specifications or
12
Expansion Plans (as hereafter defined) to service the Demised
Premises for the benefit of Tenant or for use during the
construction of the Initial Improvements or Expansion Space, but
only to the extent not caused by the failure of Landlord or
Developer to extend commercially reasonable efforts to procure the
same;
(iii) any national strikes, labor disputes; or any delays or shortages
encountered in transportation, fuel, material or supplies that in
the instance of such delays or shortages are commercially
unreasonable and in all such instances are beyond the commercially
reasonable control of Landlord, Developer, Contractor, Construction
Subcontractors and their respective employees, agents,
sub-subcontractors or representatives;
(iv) any casualties, acts of God or the public enemy or other acts or
occurrences beyond the reasonable control of Landlord, Developer,
Contractor, the contractor retained to construct the Expansion
Space or their respective employees, agents, contractors,
subcontractors, sub-subcontractors or representatives;
(v) the failure to procure Permits and Approvals (as hereafter defined)
or any permits or approvals necessary for the Expansion Space in a
timely manner so as not to cause a delay or interruption in the
continuous construction of the Initial Improvements and/or
Expansion Space or interfere with the obligations of Landlord,
Developer, Contractor or any Construction Subcontractor to
Substantially Complete the Initial Improvements and/or Expansion
Space when provided in the Work Letter and this Lease, but only to
the extent not caused by the failure of Landlord, Developer,
Contractor or any Construction Subcontractor to extend commercially
reasonable efforts to procure the same; and
(vi) any extension of time permitted to Contractor under the terms of
the Contractor's Contract (as hereafter defined) or the contractor
retained to construct the Expansion Space under the terms of its
contract.
Landlord and Developer shall use and shall cause the Contractor to use and
to cause all Construction Subcontractors to use their respective commercially
reasonable efforts to prevent or minimize any delays resulting from any one or
more of the matters described in clauses (i) through (vi), above. Any delays
resulting from any one or more of the matters described in clauses (i) through
(vi) above, except as may be due to the negligence of the Landlord, Developer,
Contractor, any Construction Subcontractor or the contractor retained to
construct the Expansion Space or their employees, agents or representatives, are
hereinafter individually referred to as a "PERMITTED DELAY," and are hereinafter
collectively referred to as "PERMITTED DELAYS."
(c) EFFECT OF PERMITTED DELAYS. Promptly following Landlord or
Developer becoming aware that an occurrence will result in a Permitted Delay
hereunder, Landlord or Developer (in respect to the Initial Improvements only)
shall notify Tenant, in writing, of such occurrence and of
13
Landlord's estimate (Developer's estimate shall act as Landlord's estimate) of
the effect, if any, such occurrence will have on the time within which the
subject Improvements shall be Substantially Complete (and, as noted below, in
the case of a Tenant Extension, the additional cost as a result thereof, if any,
which Landlord believes should be borne by Tenant), and shall provide Tenant
with reasonable evidence as to the Permitted Delay. The effect of any delays
which result from a Permitted Delay, the date the subject Improvements would
have been Substantially Complete but for a Tenant Extension and the cost, if
any, to Tenant in the instance of a Tenant Extension, shall be the subject of a
Change Order. In the event of any dispute between Landlord and Tenant of the
occurrence of a Permitted Delay, the effect of such on the date of Substantial
Completion of the subject Improvements or the increased cost applicable thereto
as a result of a Tenant Extension, such dispute shall be resolved by the
Construction Arbitrator as provided in Section 19 of the Work Letter.
If there is a Tenant Extension, the Initial Term Commencement Date or, as
applicable, the Expansion Commencement Date will occur on the date determined as
aforesaid as a result of the Tenant Extension and the Initial Term and the
Expansion Extension, respectively, shall begin to run on such determined date.
Except for Tenant Extensions, in the event of the occurrence of any other
Permitted Delay, the date on which the Initial Term Commencement Date (including
the Delivery Date) and the Expansion Commencement Date shall occur and the date,
respectively, on which the Initial Term and the Expansion Extension shall begin
to run shall be the date of Substantial Completion of the subject Improvements.
SECTION 2.3 TENANT'S REMEDIES FOR DELAY IN COMPLETION OF INITIAL
IMPROVEMENTS. Subject to the conditions herein set forth, the anticipated
Delivery Date of the Initial Improvements is January 28, 2003, meaning that, as
provided in Section 11 of the Work Letter, the Initial Improvements will be
Substantially Complete by such date. In the event that, due to causes other than
Permitted Delays, the Initial Improvements are not Substantially Complete on
January 28, 2003, then, as liquidated damages and as Tenant's sole remedy for
such delay, Landlord and Developer shall be jointly and severally be liable to
and shall pay to Tenant as follows:
(i) LANDLORD'S LIQUIDATED DAMAGES. For each day on and after the date
the Initial Improvements are required to be Substantially Complete,
but are not so, Landlord shall pay to Tenant as hereafter provided
the sum of $2,000.00 per day until the first to occur of (a) the
date the Initial Improvements are Substantially Complete, or (b)
Landlord has incurred the obligation to pay Tenant the aforesaid
liquidated damages totaling $500,000.00 ("LANDLORD'S LIQUIDATED
DAMAGES"). PLUS
(ii) CONTRACTOR'S DELAY DAMAGES. The amount received by Landlord or
Developer from Contractor as damages under the terms of the
Contractor's Contract that Contractor is required to pay to
Landlord or Developer for the Contractor's failure to Substantially
Complete the Initial Improvements by the Delivery Date, as extended
as a result of Permitted Delays ("CONTRACTOR'S DELAY DAMAGES").
The aggregate of Landlord's Liquidated Damages shall be paid to Tenant by
Landlord or Developer, jointly and severally, within thirty (30) days following
the Delivery Date. Any of Contractor's Delay Damages received by Landlord or
Developer shall be paid to Tenant by
14
Landlord or Developer, jointly and severally, within ten (10) days following
Landlord's or Developer's receipt of all or any portion thereof. Landlord and
Developer agree to extend commercially reasonable efforts to cause, under the
terms of the Contractor's Contract, Contractor to promptly pay all Contractor's
Delay Damages.
In the event Landlord or Developer fails to pay when above provided the
amount of Landlord's Liquidated Damages or the received Contractor's Delay
Damages, Tenant may deduct from so much Base Rent thereafter payable by Tenant
hereunder the amount of the Landlord's Liquidated Damages or Contractor's Delay
Damages that Landlord or Developer failed to pay to Tenant.
The parties hereto have fully negotiated the provisions of this Section 2.3
with respect to the Landlord's Liquidated Damages and Contractor's Delay
Damages, free from any duress or other undue influence. Having determined that
the actual amount of any losses which Tenant would incur as a result of any
delay in the Delivery Date would be difficult, if not impossible, to ascertain,
the Landlord, Developer and Tenant have, independently and in good faith,
determined that the Landlord's Liquidated Damages and Contractor's Delay Damages
are a fair and reasonable estimation of and basis for any such losses, and that
the liability thereof shall be borne solely by Landlord and Developer, jointly
and severally. Accordingly, in the event of any such delay, subject to the
conditions set forth above, and anything in this Lease to the contrary
notwithstanding, the Landlord's Liquidated Damages and Contractor's Delay
Damages shall be the sole obligation of Landlord and Developer in the event of
any such delay, and shall be in lieu of any other rights or remedies which
Tenant would otherwise have at law or in equity.
ARTICLE 2A
EXPANSION SPACE
SECTION 2A.1 OPTION TO EXPAND; EXPANSION NOTICE. Provided Tenant is not
then in Default hereunder and subject to the provisions of Section 2A.2 below,
by written notice provided to Landlord ("EXPANSION NOTICE"), Tenant shall have
the right, at any time during the period that expires one hundred twenty (120)
months following the Initial Term Commencement Date (but only during such
period), to direct Landlord to plan the Expansion Space, prepare Expansion Plans
and to construct the Expansion Space. Tenant's Expansion Notice shall request
Expansion Space of not more than 240,000 square feet nor less than 80,000 square
feet of additional warehouse, distribution and packaging space to be added and
attached to the Building, provided such size is in compliance with the
parameters hereafter provided and would then be in compliance with all zoning
and building codes applicable to the Demised Premises, the covenants affecting
the Land, and other applicable laws, ordinances, rules and regulations of any
governmental or quasi-governmental authority having jurisdiction over the
Expansion Space (collectively, "EXPANSION LAWS"). The Expansion Space shall be
constructed on that portion of the Land delineated as "Expansion" on the Initial
Improvement Final Plans and Specifications. Tenant's Expansion Notice shall
contain the following information:
(1) The desired size of the Expansion Space (not greater than 240,000
square feet nor less than 80,000 square feet); and
15
(2) The proposed configuration and other relevant data concerning the
desired Expansion Space (provided the Expansion Space shall be in
conformity with the clear height of the Initial Improvements, and
in conformity with the architecture, engineering and general
aesthetics of the Initial Improvements), all in sufficient detail
to enable Landlord to reasonably determine the Expansion Cost (as
hereafter defined) thereof.
Notwithstanding the foregoing, if Tenant delivers an Expansion Notice as
aforesaid that provides for less than 240,000 square feet of warehouse,
distribution and packaging space to be added to the Building, Tenant at any time
thereafter that is prior to the expiration of one hundred twenty (120) months
following the Initial Term Commencement Date may deliver another Expansion
Notice for a warehouse, distribution and packing space addition to the Building
that is for not less than 80,000 square feet nor more than 240,000 square feet,
taking into account the square footage of Expansion Space theretofore added to
the Building, if any.
If Tenant desires to have warehouse, distribution and packaging space added
to the Building that is less than 80,000 square feet, provided (i) not more than
160,000 square feet of Expansion Space has theretofore been added to the
Building, and (ii) Tenant complies with the provisions of Article 17 hereof
pertaining to New Work, Tenant itself can construct or cause to be constructed
the same.
SECTION 2A.2 LANDLORD'S PROPOSAL FOR EXPANSION SPACE PARAMETERS AND BASE
RENT. Within sixty (60) days following Landlord's receipt of the Expansion
Notice, Landlord shall consult with Tenant concerning Tenant's specific
requirements in regard to its need for expansion, and within said time period
shall notify Tenant, in writing, of ("RESPONSE NOTICE") (i) whether Landlord is
willing to undertake the financing, planning and construction of the Expansion
Space, or (ii) if Landlord is willing to undertake the financing, planning and
construction of the Expansion Space, Landlord's proposal (which shall not be
binding on Landlord or Tenant, but shall nonetheless be given, in good faith, by
Landlord) of ("LANDLORD'S PROPOSAL"):
(a) the size of the Expansion Space that Landlord is able to construct in
accordance with all Expansion Laws then in effect that is as close as
legally possible to the parameters set forth in the Expansion Notice;
(b) Landlord's estimate of the total Expansion Costs (as hereafter defined)
which will be incurred by Landlord in planning, designing and constructing
the Expansion Space and other Land improvements or modifications necessary
to accommodate the Expansion Space;
(c) those financing terms, including, but not limited to, principal amount,
maturity date, interest rate, equity requirement and credit enhancement
("EXPANSION FINANCING TERMS"), that Landlord is willing to accept as the
source of funds necessary to pay for all of the Expansion Costs;
(d) Landlord's computation, based on a good faith estimate of the Expansion
Costs and
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Expansion Financing Terms, of the Expansion Space Rent provided in
Section 3.1(d) hereof, which computation shall equal the sum of such
Expansion Costs (to be substituted with the actual Expansion Costs, when
known, which will exclude any profit or fee payable to the contractor to be
selected and retained by Landlord for the construction for the Expansion
Space) multiplied by 1.09 ("EXPANSION PRINCIPAL AMOUNT"), which Expansion
Principal Amount is then multiplied by the Financing Constant (as hereafter
defined);
(e) as part of the Expansion Costs, the annual rate of interest, compounded
monthly, on the equity component of the Expansion Financing Terms from the
date such equity is expended by Landlord until the Expansion Commencement
Date ("EXPANSION EQUITY RETURN RATE") that Landlord is willing to accept;
(f) the financing constant ("FINANCING CONSTANT") being that interest rate
by which the Expansion Principal Amount will be amortized over the balance
of the Initial Term (extended, if applicable, by the Expansion Extension
and any Renewal Term for which a Renewal Notice has been received by
Landlord at the time of the subject Expansion Notice) at the constant
selected by Landlord; and
(g) subject to Permitted Delays, Landlord's estimate of the period of time,
following the date of approval of the Expansion Plans by Tenant, necessary
to Substantially Complete the Expansion Space ("EXPANSION CONSTRUCTION
PERIOD"), where in this instance Substantially Complete has the same
meaning as defined in the Work Letter, but applicable to the Expansion
Space.
Promptly following Tenant's receipt of the Response Notice, Landlord and
Tenant shall confer and discuss whether Landlord can issue a Landlord's Proposal
or the modification of any of the provisions of Landlord's Proposal submitted as
part of the Response Notice that Landlord is willing, in its sole discretion, to
modify and Tenant, in its sole discretion, is willing to accept. In the event
Landlord is willing to modify any provision(s) of Landlord's Proposal and Tenant
is willing to accept such Landlord's modification, such modified Landlord's
Proposal shall be substituted for the initial one, if any, submitted by Landlord
to Tenant as aforesaid.
Notwithstanding the foregoing, within ninety (90) days following Tenant's
receipt of the Response Notice, by written notice to Landlord, Tenant may elect
to (i) accept Landlord's Proposal if one was submitted as part of the Response
Notice or, following Landlord's meeting with Tenant as aforesaid, Landlord
submits one; (ii) procure financing for the benefit of Landlord on terms
acceptable to Landlord in its sole discretion; (iii) in the instance of Tenant's
disapproval of the Expansion Financing Terms or the inability of Landlord
provided in the Response Notice to finance, plan and construct the Expansion
Space, Tenant may elect to pay for and construct or cause to be constructed the
Expansion Space itself, as if New Work ("TENANT PERFORMED EXPANSION WORK"), or
(iv) withdraw its Expansion Notice, in which instance, subject to the right of
Tenant to submit two Expansion Notices in total as provided in Section 2A.1
above, Tenant's right to request a Response Notice from Landlord pursuant to
this Article 2A shall terminate and be of no further force or effect.
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If Tenant fails to notify Landlord of Tenant's foregoing election within
said ninety (90) days, it shall act as notice to Landlord that Tenant has
elected to withdraw the subject Expansion Notice. If Tenant elects to accept a
submitted Landlord's Proposal as aforesaid, it shall act as Tenant's
authorization to Landlord ("NOTICE TO PROCEED") to proceed with the preparation
of the Expansion Plans and when approved, the commencement of the Construction
of the Expansion Space. If Tenant elects to procure financing for the benefit of
Landlord on terms acceptable to Landlord in its sole discretion, Tenant shall
cause the lender of such financing to be willing to open such financing (or
enter into a binding, written commitment with Landlord on terms acceptable to
Landlord) within thirty (30) days thereafter, and thereupon the Notice to
Proceed shall be deemed issued to Landlord. However, if a commitment acceptable
to Landlord is entered into by such lender, but the loan is not opened within
ninety (90) days, Landlord shall not be obligated to construct the Expansion
Space, but within an additional thirty (30) days after failure to open such
financing within the time period aforesaid, Tenant can elect to undertake, at
its sole cost, the Tenant Performed Expansion Space. If Tenant elects the Tenant
Performed Expansion Space, (i) Tenant shall promptly commence the same, weather
permitting, and complete the same with commercially reasonable diligence, but in
any event prior to the expiration of the Initial Term, (ii) all portions of the
Expansion Space (excluding Trade Fixtures and Tenant's personal property
therein) shall be deemed to form a part of the Building and the Demised
Premises, and (iii) the duration of the Initial Term shall not be affected by
the Expansion Extension (but Tenant shall continue to have the options to renew
on the terms set forth in Section 1.4 hereof.
SECTION 2A.3 INTENTIONALLY DELETED
SECTION 2A.4 PREPARATION OF EXPANSION PLANS. If and following the date
Landlord receives the Notice to Proceed (or is deemed to have received the
Notice to Proceed in the instance of the opening of financing as aforesaid made
available to Landlord by Tenant), Landlord shall cause to be prepared and
delivered to Tenant all of the components of plans and specifications for the
Expansion Space (herein, the "EXPANSION PLANS") prepared by an
Illinois licensed
architect ("EXPANSION ARCHITECT") and one or more
Illinois licensed engineers,
reasonably acceptable to Tenant, and in substantial conformity with the
Expansion Notice, as modified pursuant to Section 2A.2 hereof.
All of said components of the Expansion Plans will be prepared and
delivered to Tenant no later than the date that is sixty (60) days following
Landlord's receipt (or deemed receipt in the instance of the opening of
financing as aforesaid made available to Landlord by Tenant), which components
shall contain substantially similar elements as those contained in the Initial
Improvements Final Plans and Specifications, will be in substantial compliance
with the Landlord's Proposal, and will be sufficiently complete to enable the
issuance of a building permit by the applicable governmental authority for the
construction of the Expansion Space.
If: (i) each component submitted by Landlord is in compliance with the
Landlord's Proposal; and (ii) the character and quality of the systems and
improvements comprising the Expansion Space are consistent with the character
and quality of the Initial Improvements, Tenant agrees that it will not
unreasonably withhold its approval of any such submitted component, except for
just and reasonable cause. Any disapproval of the components by Tenant
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which, in order to obtain Tenant's approval upon resubmission, requires a
revision thereto, which revision in Landlord's reasonable opinion is a
substantial deviation from Landlord's Proposal shall be deemed a Change Order.
Landlord, within ten (10) Business Days following Landlord's receipt of such
deviating, disapproved component shall notify Tenant, in writing, of Landlord's
good faith estimate of the amount, if any, of delay in the design for and the
completion of construction of the Expansion Space and, if applicable, the extra
cost to or savings to Tenant resulting from the requested revision. In no
instance shall Tenant be permitted to order such deviation, if such deviation
would cause the Expansion Plans not to be in compliance with all Expansion Laws
or cause a substantial deviation of the Expansion Space from the character and
quality of the Initial Improvements.
When all of the components of the Expansion Plans have been ultimately
approved by Tenant, Tenant and Landlord shall each affix their respective
signatures or initials to each page comprising such component and all such
approved components shall constitute the Expansion Plans and a schedule thereof
shall be attached to this Lease as EXHIBIT 2A.4.
SECTION 2A.5 EXPANSION COMMENCEMENT DATE. If Landlord has received or is
deemed as aforesaid to have received a Notice to Proceed, Landlord shall cause
the Expansion Space to be Substantially Completed, subject to Permitted Delays,
on or before the date ("EXPANSION COMPLETION DATE") that occurs not later than
the expiration of the Expansion Construction Period. Landlord shall extend
commercially reasonable efforts to Substantially Complete the Expansion Space no
later than the Expansion Completion Date. The date on which the Expansion Space
is Substantially Complete shall be known as the "EXPANSION COMMENCEMENT DATE."
However, if Landlord fails to Substantially Complete the Expansion Space on or
before the Expansion Completion Date, Tenant's sole remedy for such failure
shall be to pursue an action for specific performance against Landlord.
On the Expansion Commencement Date, the Expansion Space shall be deemed to
form a part of the Building and the Demised Premises. Notwithstanding the
foregoing, in the event Tenant Extensions are applicable to the Expansion Space,
the Expansion Commencement Date shall be the date on which the Expansion Space
would have been Substantially Complete, but for Tenant Extensions and the
Expansion Extension shall commence on such date.
SECTION 2A.6 SCOPE OF WORK - EXPANSION SPACE. Weather permitting,
promptly following the approval of the Expansion Plans by Tenant, Landlord
agrees to furnish, at Landlord's sole cost and expense (except in the instance
of Change Orders applicable to the Expansion Space), all the material, labor and
equipment necessary for the commencement and Substantial Completion of
construction of the Expansion Space. The Expansion Space shall be constructed in
a good and workmanlike manner in accordance with the Expansion Plans, and
Landlord agrees to complete the construction thereof in full compliance with all
Expansion Laws (including ADA, as hereafter defined), as then in effect, except
as such compliance may be affected as a result of any work to be performed by or
on behalf of Tenant (other than by Landlord) in the Expansion Space prior to the
Expansion Commencement Date.
In the event Tenant requires any such work to be performed, Tenant shall
timely advise Landlord, in writing, of the plans and specifications for such
work. In the event Landlord
19
approves such plans and specifications, which approval shall not be unreasonably
withheld, conditioned or delayed, Landlord shall afford Tenant and its separate
contractors access to the Expansion Space prior to the Expansion Commencement
Date on the same terms and conditions as the right of Early Access afforded
Tenant pursuant to the Work Letter. In the event Tenant subsequently modifies
such approved plans and specifications or Tenant's separate contractors fail to
perform such work in compliance with such approved plans and specifications,
then the procedures in respect to such subsequent modification or the affect of
Tenant's separate contractors' failure to comply with the approved plans and
specifications shall be as provided in the Work Letter applicable to the Initial
Improvements.
SECTION 2A.7 EXPANSION CHANGE ORDERS. If Landlord constructs the
Expansion Space, Tenant shall be allowed to request Change Orders with respect
to the Expansion Space in the same manner and with the same effect as Change
Orders to the Initial Improvements, except as hereafter provided. Any Change
Orders with respect to the Expansion Space shall modify the Expansion Costs,
upwards or downwards, as the case may be, that is set forth in Landlord's
Proposal. Any increase in the amount of the Expansion Costs set forth in
Landlord's Proposal as a result of a Change Order in respect to the Expansion
Space shall be paid by Tenant within thirty (30) days of Tenant's receipt of an
invoice from Landlord for work completed in the previous month that is
applicable to such Change Order.
SECTION 2A.8 WARRANTY AS TO EXPANSION SPACE. If Landlord constructs the
Expansion Space, Landlord shall warrant all portions of the improvements
constructed pursuant to the Expansion Plans against defects in workmanship and
materials for a period of one (1) year after Substantial Completion thereof,
under the same terms, conditions and undertakings, and with the same limitations
as set forth in the Work Letter applicable to the Initial Improvements.
SECTION 2A.9 EXPANSION PUNCH LIST. If Landlord constructs the Expansion
Space, Landlord shall notify Tenant of the date which is not less than ten (10)
days prior to the estimated date on which Substantial Completion of the
Expansion Space is expected to be achieved (herein referred to as "EXPANSION
INSPECTION DATE"). As close to the Expansion Inspection Date as is reasonably
possible, Landlord and Tenant shall make a joint, physical inspection of the
Expansion Space to list any items of work to be completed (herein referred to as
"EXPANSION PUNCH LIST ITEMS"). Landlord shall deliver, in writing, its
unconditional promise to complete the Expansion Punch List Items, within such
reasonable period of time in respect to each item as is necessary to complete
the same, taking into account diligence and good workmanlike practices and long
lead time items for materials. In the event of a disagreement between the
parties as to the inclusion or the exclusion of an item as an Expansion Punch
List Item, the decision of the Construction Arbitrator (or if the Construction
Arbitrator is unwilling to act or ceases to exist, such successor Construction
Arbitrator reasonably and mutually agreed upon by Landlord and Tenant) shall
control.
SECTION 2A.10 EXPANSION COSTS. If Landlord constructs the Expansion
Space, for purposes of determining the Base Rent for the Expansion Space during
the Initial Term following the Expansion Commencement Date, "EXPANSION COSTS"
shall be the aggregate of all payment obligations of those contracts for
so-called "hard costs" and "soft costs," including, but not necessarily limited
to, all actual planning, design and construction costs, direct project overhead,
20
general conditions of the Expansion Space contractor, insurance, reasonable
construction loan interest costs, architect's and engineer's fees, reasonable
legal fees, permit fees (including impact fees imposed by any governmental
authority) and other municipality costs, and the amount of the return on
Landlord's equity paid prior to the Expansion Completion Date at the Expansion
Equity Return Rate which are incurred by or on behalf of Landlord for the
construction of the Expansion Space pursuant to the Expansion Plans, but
expressly excluding any profit fee payable to the Expansion Space contractor
retained by Landlord for the construction for the Expansion Space. Landlord
agrees to conduct the planning, design and construction of the Expansion Space
on an "open-book" in the same manner as provided in the Work Letter in respect
to the Initial Improvements so that Tenant shall have the opportunity to review
and verify all of the component elements that comprise the Expansion Costs.
ARTICLE 3
RENT AND OTHER CHARGES
SECTION 3.1 BASE RENT.
(a) PAYMENT OF BASE RENT. Tenant shall pay to Landlord's rental agent,
▇▇▇▇▇▇▇ Development Partners, L.L.C., Suite 800, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place as Landlord may from time to time
designate in writing, in coin or currency which, at the time of payment, is
legal tender for private or public debts of the United States of America, annual
base rent ("BASE RENT") during the Term, as set forth in this Section 3.1. Base
Rent shall be computed as provided in Section 3.1(b) through 3.1(g), and shall
be payable in equal monthly installments, each in advance, on or before the
first day of each and every calendar month during the Term.
(b) BASE RENT DURING TERM FOR INITIAL IMPROVEMENTS. Subject to the Base
Rent Adjustment (as hereafter defined), commencing on the Initial Term
Commencement Date, the annual Base Rent applicable to the Initial Improvements
for the first twelve months following the Initial Term Commencement Date shall
be One Million, Six Hundred Fifty Four Thousand, Ninety Six and 46/100ths
Dollars ($1,654,096.46). For each twelve month period (or portion thereof at the
end of the Term) during the Term (as to each, "LEASE YEAR"), the annual Base
Rent applicable to the Initial Improvements shall be increased over the Term by
an amount equal to two percent (2%) of the preceding Lease Year's annual Base
Rent
(c) BASE RENT ADJUSTMENT FOR INITIAL IMPROVEMENTS. When the Total
Project Costs are determined as provided in the Work Letter, Landlord and Tenant
shall promptly adjust, if applicable, the Base Rent provided in Section 3.1(b)
above ("BASE RENT ADJUSTMENT"). For the purposes of computing the Base Rent
Adjustment, Base Rent for the Initial Improvements for the first Lease Year
shall be calculated by multiplying the constant of Ten and 20/100ths percent
(10.20%) by the Total Project Costs. The amount of the Base Rent Adjustment
shall be the amount by which the Base Rent for the first Lease Year provided in
Section 3.1(b) above is more or less than the Base Rent calculated in the
preceding sentence. If such calculation of Base Rent results in a greater amount
than the Base Rent provided in Section 3.1(b) above, then within thirty (30)
days following the determination of the Base Rent Adjustment, Tenant shall pay
to Landlord such greater amount. However, if such calculation of Base Rent
results in a lesser
21
amount than the Base Rent provided in Section 3.1(b) above, then Tenant can
deduct from so much Base Rent (computed for the determination of the Base Rent
Adjustment) thereafter due and payable the amount of Base Rent theretofore paid
to Landlord pursuant to Section 3.1(b) above that is greater than as provided in
the Base Rent Adjustment, until there has been retained by Tenant the difference
between the Base Rent theretofore paid to Landlord pursuant to Section 3.1(b)
and the Base Rent, as adjusted, by the Base Rent Adjustment.
(d) BASE RENT DURING TERM FOR EXPANSION SPACE. If Landlord constructs
the Expansion Space as provided in Article 2A hereof, subject to the Expansion
Base Rent Adjustment (as hereafter defined), commencing on the Expansion
Commencement Date, the annual Base Rent applicable to the Expansion Space for
the first twelve months following the Expansion Commencement Date shall equal
the sum of Expansion Principal Amount contained in Landlord's Proposal
multiplied by the Financing Constant. Each twelve month period thereafter (or
portion thereof at the end of the Term) during the Term is defined to be the
"EXPANSION LEASE YEAR."
If Tenant elects the Tenant Performed Expansion Work, there will be no Base
Rent applicable to the Expansion Space during the Term.
(e) EXPANSION BASE RENT ADJUSTMENT. If Landlord constructs the
Expansion Space, when all of the actual Expansion Costs are determined as
provided in Article 2A hereof, Landlord and Tenant shall promptly adjust, if
applicable, the Base Rent provided in Section 3.1(d) above ("EXPANSION BASE RENT
ADJUSTMENT"). For the purposes of computing the Expansion Base Rent Adjustment,
Base Rent for the Expansion Space for the first Expansion Lease Year shall be
computed to be the actual Expansion Costs multiplied by 1.09 and thereafter
multiplied by the Financing Constant. The amount of the Expansion Base Rent
Adjustment shall be the amount by which the Base Rent for the Expansion Space
for the first Expansion Lease Year provided in Section 3.1(d) above is more or
less than the Base Rent calculated in the preceding sentence. If such
calculation of Base Rent results in a greater amount than the Base Rent provided
in Section 3.1(d) above, then within thirty (30) days following the
determination of the Expansion Base Rent Adjustment, Tenant shall pay to
Landlord such greater amount. However, if such calculation of Base Rent results
in a lesser amount than the Base Rent provided in Section 3.1(d) above, then
Tenant can deduct from so much Base Rent (computed for the determination of the
Expansion Base Rent Adjustment) thereafter due and payable the amount of Base
Rent theretofore paid to Landlord pursuant to Section 3.1(d) above that is
greater than as provided in the Expansion Base Rent Adjustment, until there has
been retained by Tenant the difference between the Base Rent theretofore paid to
Landlord pursuant to Section 3.1(d) and the Base Rent, as adjusted, by the
Expansion Base Rent Adjustment.
(f) INITIAL IMPROVEMENTS CHANGE ORDER BASE RENT. Not less than ten (10)
days prior to the date the Initial Improvements are estimated by Landlord to be
Substantially Complete, Landlord shall advise Tenant, in writing, of Landlord's
then good faith estimate of the aggregate amount of the net Change Order Costs
(as defined in the Work Letter) therefor. Commencing on the Initial Term
Commencement Date, the annual Base Rent applicable to Change Order Costs for the
Initial Improvements for the first Lease Year shall be calculated by multiplying
the constant of Fourteen and 40/100ths percent (14.4%) by the Change Order
Costs.
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For each Lease Year thereafter during the Term, the annual Base Rent applicable
to Change Order Costs for the Initial Improvements shall be increased over the
Term by an amount equal to two percent (2%) of the preceding Lease Year's annual
Base Rent for the Change Order Costs.
(g) INITIAL IMPROVEMENTS CHANGE ORDER BASE RENT ADJUSTMENT. When the
Total Project Costs are determined as provided in the Work Letter and all of the
actual Change Order Costs for the Initial Improvements are known, Landlord and
Tenant shall promptly adjust, if applicable, the Base Rent provided in
Section 3.1(f) above ("CHANGE ORDER BASE RENT ADJUSTMENT"). For the purposes of
computing the Change Order Base Rent Adjustment, Base Rent for the Change Order
Costs for the Initial Improvements for the first Lease Year shall be calculated
by multiplying the constant of Fourteen and 40/100ths percent (14.4%) by the
aggregate amount of the net actual Change Order Costs for the Initial
Improvements. The amount of the Change Order Base Rent Adjustment shall be the
amount by which the Base Rent for the Change Order Costs for the first Lease
Year provided in Section 3.1(f) above is more or less than the Base Rent for the
Change Order Costs calculated in the preceding sentence. If such calculation of
Change Order Base Rent results in a greater amount than the Base Rent provided
in Section 3.1(f) above, then within thirty (30) days following the
determination of the Change Order Base Rent Adjustment, Tenant shall pay to
Landlord such greater amount. However, if such calculation of Base Rent for the
Change Order Costs results in a lesser amount than the Base Rent provided in
Section 3.1(f) above, then Tenant can deduct from so much Base Rent (computed
for the determination of the Change Order Base Rent Adjustment) thereafter due
and payable the amount of Base Rent theretofore paid to Landlord pursuant to
Section 3.1(f) above that is greater than as provided in the Change Order Base
Rent Adjustment, until there has been retained by Tenant the difference between
the Base Rent for the Change Order Costs theretofore paid to Landlord pursuant
to Section 3.1(f) and the Base Rent For the Change Order Costs, as adjusted in
the Change Order Base Rent Adjustment.
(h) BASE RENT ADJUSTMENT MEMORANDUM. Promptly following, in each
instance, of the determination of the Base Rent Adjustment, Expansion Base Rent
Adjustment and Change Order Base Rent Adjustment, Landlord and Tenant shall each
execute and deliver to the other a memorandum, in form and content reasonably
acceptable to Landlord and Tenant, setting forth the amount of the Base Rent for
the Initial Improvements for the first Lease Year, the amount of the Base Rent
for the Expansion Space for the first Expansion Lease Year and the amount of the
Base Rent for the Change Order Costs for the first Lease Year.
SECTION 3.2. PRORATION OF BASE RENT. If the Initial Term Commencement
Date or Expansion Commencement Date commences other than on the first day of a
calendar month or ends other than on the last day of a month, the Base Rent for
such month shall be prorated accordingly.
SECTION 3.3. ADDITIONAL CHARGES. Except as provided in Articles 11 and
12 hereof, in each Lease Year of the Term, all Impositions (as hereafter
provided), insurance premiums, utility charges, maintenance, repair and
replacement expenses, all expenses relating to Compliance with Laws (as
hereafter defined), and all other costs, fees, charges, expenses, reimbursements
and obligations of every kind and nature whatsoever relating to the Demised
Premises, which may arise or become due during the Term, or by reason of events
then occurring, shall be paid or discharged by Tenant as additional payment
obligations hereunder (together, "ADDITIONAL CHARGES"). Tenant
23
shall indemnify, defend and save Landlord, and its members, partners, directors,
officers, shareholders, contractors, subcontractors, sub-subcontractors,
Mortgagees (as hereafter defined), agents and employees, harmless from and
against any and all loss, cost or damage, including, without limitation,
reasonable attorneys' fees, incurred or sustained by any of them as a result of
the failure of Tenant to timely and fully pay all such Additional Charges due
and payable.
SECTION 3.4 PAYMENTS PAYABLE WITHOUT PRIOR DEMAND; MAXIMUM RATE OF
INTEREST. Except as set forth herein, all payments of Base Rent and Additional
Charges shall be payable without previous demand therefor. In case of nonpayment
by Tenant of any item of Additional Charges payable to Landlord when the same
are due, Landlord shall have, in addition to all its other rights and remedies,
all of the rights and remedies available to Landlord under the provisions of
this Lease or by law as if in the case of nonpayment of Base Rent. The
performance and observance by Tenant of all the terms, covenants, conditions and
agreements to be performed or observed by Tenant hereunder shall be performed
and observed by Tenant, at Tenant's sole cost and expense.
Any installment of Base Rent or Additional Charges payable to Landlord or
any other charges payable by Tenant to Landlord under the provisions hereof
which shall not be paid within five (5) days following the date payable
hereunder, shall bear interest at an annual rate equal to four (4) percentage
points per annum in excess of the prime rate of interest from time to time
published in the WALL STREET JOURNAL (or similar publication if the WALL STREET
JOURNAL shall cease to exist or to publish such rate) at the time the subject
installment is due, but in no event in excess of the maximum lawful rate
permitted to be charged by Landlord against Tenant. Such rate of interest is
hereinafter referred to as the "MAXIMUM RATE OF INTEREST."
ARTICLE 4
PAYMENT OF TAXES, ASSESSMENTS, ETC.
SECTION 4.1 ADDITIONAL CHARGES. Subject to the terms, provisions and
conditions of this Section 4.1, Tenant covenants and agrees to pay, as
Additional Charges, before any fine, penalty, interest or cost may be added
thereto for the nonpayment thereof, (i) all real estate taxes, including, but no
limited to so-called Payment in Lieu of Taxes or Economic Activity Taxes, (ii)
special assessments, (iii) the Demised Premises' allocable share of regular and
special assessments with respect to any common area improvements that form a
part of any covenant to which title to the Land is subject for items such as,
without limitation, common area maintenance of storm water detention systems or
roadways servicing more than just the Demised Premises within or connected to
the Park ("PARK ASSESSMENTS"), (iv) water rates and charges, sewer rates and
charges, including, without limitation, any sum or sums payable for sewer or
water capacity, charges for public utilities, (v) insurance premiums at
commercially competitive rates for that insurance required to be maintained by
Landlord pursuant to Section 5.1 hereof, (vi) street lighting, excise levies,
licenses, permits or governmental inspection fees or charges (except those
relating to the construction of the Improvements), and (vii) all other charges
or burdens of whatsoever kind and nature (including, without limitation, costs,
fees and expenses of complying with any restrictive covenants or similar
agreements to which the Land is subject, incurred in the use, occupancy,
operation, leasing or possession of the Demised Premises (excluding any income
taxes on the Base Rent imposed on Landlord, it being the intent of the parties
hereto that any tax on the net income derived from the Base Rent payable in
respect to the Demised Premises imposed by any governmental authority shall
24
be paid by Landlord), without particularizing by any known name or by whatever
name hereafter called, and whether any of the foregoing be general or special,
ordinary or extraordinary, foreseen or unforeseen, which at any time during the
Term may be payable (collectively, "IMPOSITIONS"). It is the intention of
Landlord and Tenant that Tenant will pay all Impositions directly to the person,
entity, utility, municipality or other body which is owed the Imposition;
provided, however, that upon Landlord's request from time to time, Tenant shall
deliver receipts and other reasonable evidence of its payment of any and all
Impositions and other items of Additional Charges paid to third parties. If any
Additional Charges are to be paid by Tenant to Landlord (as opposed to being
paid by Tenant to a third party), then such payments shall be due thirty (30)
days after Landlord has invoiced Tenant therefor.
Except as hereinafter provided, Tenant shall pay all real estate taxes,
whether heretofore or hereinafter levied or assessed upon the Demised Premises,
or any portion thereof, which are due and payable during the Term (regardless of
the period to which such taxes relate).
SECTION 4.2 RENT TAXES. Except for any tax on the net income derived
from the Base Rent, if at any time during the Term, any method of taxation shall
be such that there shall be levied, assessed or imposed on Landlord, or on the
Base Rent or Additional Charges, or on the Demised Premises, or any portion
thereof, in lieu of real property taxes, a capital levy, gross receipts tax or
other tax on the rents received therefrom, or a franchise tax, or an assessment,
gross levy or charge measured by or based in whole or in part upon such gross
Base Rent and gross Additional Charges, Tenant, to the extent permitted by law,
covenants to pay and discharge the same. If such method of taxation is
applicable, Tenant's obligation in respect thereto shall only be for the Demised
Premises and shall not apply to any other real estate or leasehold interest
owned by Landlord. Anything in this Lease to the contrary notwithstanding, it is
the intention of the parties hereto that the Base Rent to be paid hereunder
shall be paid to Landlord absolutely net without deduction or charge of any
nature whatsoever, foreseeable or unforeseeable, ordinary or extraordinary, or
of any nature, kind or description, except as otherwise expressly provided in
this Lease. Nothing contained in this Lease shall require Tenant to pay any
municipal, state or federal net income or excess profits taxes assessed against
Landlord, or any municipal, state or federal business privilege, mercantile,
capital levy, estate, succession, inheritance or transfer taxes of Landlord, or
organizational franchise taxes imposed upon any corporate owner of the fee of
the Demised Premises.
SECTION 4.3 RECEIPTS FOR IMPOSITIONS. Tenant covenants to furnish
Landlord, within ten (10) days of written request from Landlord, official
receipts of the appropriate taxing authority, or other appropriate proof
satisfactory to Landlord, evidencing the payment of any Imposition or other tax,
assessment, levy or charge payable by Tenant hereunder. The certificate, advice
or ▇▇▇▇ of the appropriate official designated by law to make or issue the same,
or to receive payment of any Imposition or other tax, assessment, levy or
charge, may be relied upon by Landlord as sufficient evidence that such
Imposition or other tax, assessment, levy or charge is due and unpaid at the
time of the making or issuance of such certificate, advice or ▇▇▇▇. The Landlord
shall notify all taxing authorities to deliver tax bills, assessments, and/or
levies directly to Tenant during the Term, at the address provided by Tenant to
Landlord. Notwithstanding such notice to the taxing authorities, if any tax
bills, assessments or levies are nonetheless delivered to the Landlord, Landlord
shall promptly provide such documents to Tenant. Landlord shall be responsible
for any penalties,
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interest and/or liabilities imposed by taxing authorities resulting from the
failure of the Landlord to promptly deliver to Tenant any bills, assessments
and/or levies that were delivered to Landlord (and not Tenant) by the applicable
taxing authority. Notwithstanding anything in this Lease to the contrary, for
any tax, assessment, levy or charge that, is permitted to be paid in
installments, Tenant shall be permitted to pay the same over the longest period
permitted by law.
SECTION 4.4 LANDLORD'S AND TENANT'S RIGHT TO CONTEST IMPOSITIONS.
Tenant shall have the right, at Tenant's expense, to contest the amount or
validity, in whole or in part, of any Impositions by appropriate proceedings
conducted in the name of the Landlord or in the name of Landlord and Tenant.
Landlord shall cooperate with Tenant in executing documents or other actions as
may be required for Tenant to pursue challenges to the Impositions. To the
extent that the Tenant achieves a reduction in any Imposition, Tenant shall have
the sole right to any refunds of amounts of such Imposition previously paid by
the Tenant. In the event that the Landlord recommends to the Tenant that Tenant
contest an Imposition, and the Tenant fails to notify the Landlord, within
thirty (30) days that Tenant intends to contest the Imposition as recommended by
the Landlord, then Landlord, at any time during the last twenty four (24) months
of the Term, shall have the right, but not the obligation, to contest the amount
or validity, in whole or in part, of any Impositions by appropriate proceedings
conducted in the name of Landlord or in the name of Landlord and Tenant. If
Landlord elects during said last twenty four (24) months to contest the amount
or validity, in whole or in part, of any Impositions, such contest by Landlord
shall be at Landlord's expense; provided, however, that if the amounts payable
by Tenant for Impositions are reduced (or if a proposed increase in such amounts
is avoided or reduced) by reason of Landlord's contest of Impositions, Tenant
shall reimburse Landlord for costs incurred by Landlord in contesting such
Impositions (including, without limitation, reasonable attorneys' fees), but
such reimbursements shall not be in excess of the amount saved by Tenant by
reason of Landlord's actions in contesting such Impositions. Tenant shall
reasonably cooperate with Landlord in regard to any and all such contests.
ARTICLE 5
INSURANCE
SECTION 5.1 LANDLORD'S INSURANCE.
(a) INTENTIONALLY DELETED
(b) PROPERTY INSURANCE. At all times during the Term and at Tenant's
sole cost and expense (such cost and expense being a part of Tenant's Additional
Charges hereunder), Landlord shall keep the Demised Premises and the
Improvements insured for the benefit of Landlord and its Mortgagees against (i)
loss or damage by fire; (ii) loss or damage from such other risks or hazards now
or hereafter embraced by a "Special Cause of Loss" form, including without
limitation, windstorm, hail, explosion, vandalism, riot and civil commotion,
damage from vehicles and aircraft, smoke damage, water damage and debris
removal; (iii) loss from flood if the Land is in a federally designated flood
area, in which case the amount of the coverage for such peril shall be as
hereafter provided; (iv) loss from earthquake (if appropriate); and (v) loss or
damage from such other risks or hazards of a similar or dissimilar nature which
are now or may hereafter be customarily insured against with respect to
improvements similar in construction, design, general location, use and
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occupancy to the Demised Premises ("PROPERTY INSURANCE"). Promptly after payment
of the premium(s) for the Property Insurance, Landlord shall invoice Tenant for
the same.
At all times, the Property Insurance coverage shall be in an amount equal
to one hundred percent (100%) of the then "Full Replacement Cost" of the
Improvements (except for foundation, grading and excavation), and shall include
a so-called "Agreed Amount Endorsement." Full Replacement Cost shall be
interpreted to mean the cost of replacing the Improvements, without deduction
for depreciation, obsolescence, or wear and tear, and shall include a reasonable
sum for architectural and engineering fees connected with the restoration or
replacement of the Improvements in the event of damages thereto or destruction
thereof. Full Replacement Cost shall be determined from time to time. The
deductible under Landlord's Property Insurance shall not exceed that amount that
is commercially reasonable, and Landlord shall extend diligent efforts to obtain
commercially competitive rates for the Property Insurance.
(c) BUSINESS INTERRUPTION INSURANCE. At all times during the Term and
at Tenant's sole cost and expense (such cost and expense being a part of
Tenant's Additional Charges hereunder), Landlord shall obtain and continuously
maintain in full force and effect rent interruption insurance, insuring against
loss of all or any portion of the Rent due and payable hereunder, for up to
eighteen (18) months ("BUSINESS INTERRUPTION INSURANCE"). Such policy shall name
Landlord and its Mortgagees as insureds thereunder. Promptly after payment of
the premium(s) for the Business Interruption Insurance, Landlord shall invoice
Tenant for the same. Landlord shall extend diligent efforts to obtain
commercially competitive rates for the Business Interruption Insurance.
(d) INSURANCE COMPANIES. The Property Insurance and Business
Interruption Insurance provided under this Section 5.1 shall, as applicable, (i)
be written with reputable companies licensed to do business in the State of
Illinois, having a Best's "General Policy Holding Rating" of A- or better and a
financial rating class of VII or better; (ii) cite the interest of Landlord and
its Mortgagees in standard mortgagee clauses; and (iii) be maintained
continuously throughout the Term.
SECTION 5.2 TENANT'S INSURANCE.
(a) TENANT'S PROPERTY INSURANCE. Tenant shall maintain insurance
coverage upon all personal property and Trade Fixtures of Tenant, and the
personal property of others claiming by, through or under Tenant kept, stored or
maintain on the Demised Premises on a "Special Cause of Loss" property insurance
form, for the full replacement cost thereof.
(b) TENANT'S COMMERCIAL LIABILITY INSURANCE. Tenant shall obtain and
continuously maintain in full force and effect commercial liability insurance
covering claims for bodily injury, personal injury or property damage for any
loss for which the Tenant is legally liable, liability or damage on, about or
relating to the use and occupancy of the Demised Premises, or any portion
thereof, having limits of not less than Five Million and 00/100ths Dollars
($5,000,000.00) combined single limit on an occurrence basis. Such policy shall
name Tenant as named insured and Landlord and its Mortgagees as additional
insureds, and shall be primary and noncontributory to any commercial liability
insurance maintained by Landlord.
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(c) WORKER'S COMPENSATION INSURANCE. Tenant shall obtain and
continuously maintain in full force and effect Worker's Compensation and
Employer's Liability Insurance with statutory benefits, voluntary compensation
coverage and Employer's Liability limits of Five Hundred Thousand and 00/100ths
Dollars ($500,000.00) each accident, Five Hundred Thousand and 00/100ths Dollars
($500,000.00) each employee for disease, and Five Hundred Thousand and 00/100ths
Dollars ($500,000.00) policy limit for disease.
(d) INSURANCE APPROVAL. All policies of insurance required of Tenant
under this Section 5.2 shall be written in such form as shall be reasonably
satisfactory to Landlord and its Mortgagees. Certificates of insurance (or other
proof of coverage) reasonably acceptable to Landlord shall be delivered to
Landlord and its Mortgagees, on or before the earlier of the Initial Term
Commencement Date or the date on which Tenant exercises its rights to Early
Access (as defined in the Work Letter), if applicable, and not later than thirty
(30) days prior to the expiration of any current policy or certificate. If
Tenant provides evidence of insurance by certificate, Tenant will deliver a
certificate of insurance similar to an ACCORD Form 24. A new or replacement
certificate of insurance, an insurance binder or other evidence of the
continuation of coverage acceptable to Landlord and its Mortgagees shall be
delivered to Landlord and its Mortgagees, within fifteen (15) days' prior to the
expiration of the then current policy term. If other than a new or replacement
certificate is delivered to Landlord as aforesaid, then promptly thereafter
Tenant shall deliver to Landlord a new or replacement certificate for such
continuation of coverage.
(e) CANCELLATION NOTICE. Each policy of insurance required of Tenant
under this Section 5.2 shall have attached thereto (i) an endorsement that such
policy shall not be canceled or materially changed without at least thirty (30)
days' (or 10 days', in the instance of non-payment of premium) prior written
notice to Landlord and its Mortgagees, and Tenant, and (ii) an endorsement to
the effect that the insurance as to the interests hereunder of Landlord, and
Landlord's partners, directors, officers, shareholders, contractors,
subcontractors, sub-subcontractors, Mortgagees, agents or employees shall not be
invalidated by any act or neglect of any person.
SECTION 5.3 OTHER INSURANCE PROVISIONS.
(a) INCREASED LIMITS. Not more frequently than once every two (2)
years, Landlord may increase the amount of the coverage required to be
maintained by Tenant pursuant to Sections 5.2(b) and 5.4 hereof to be increased
to an amount that is generally required to be maintained by or for landlords of
buildings that are of similar size, scope, design, quality and containing
amenities similar to the Demised Premises that are located in the Counties of
Lee, LaSalle, DeKalb, Bureau, ▇▇▇▇▇▇ or ▇▇▇▇ in the State of
Illinois.
(b) BLANKET COVERAGE. Nothing contained in this Article 5 shall prevent
Landlord or Tenant from taking out insurance of the kind and in the amount
provided for herein under a blanket insurance policy or policies which may cover
other properties owned, leased or operated by Landlord (as well as the Demised
Premises) and Tenant and other properties owned, leased or operated by Tenant
(other than the Demised Premises). However, any such policy or blanket insurance
of the kind provided for shall not contain any clause which would result in the
insureds
28
thereunder being required to carry any additional insurance with respect to the
property or risk covered thereby in an amount not less than any specific
percentage of the full replacement value of such property in order to prevent
the insureds therein named from becoming a co-insurer of any loss with the
insurer under the applicable policy.
SECTION 5.4 TENANT'S CONTRACTOR'S INSURANCE. During any period of
construction by Tenant of New Work or Fit-Up Work, Tenant shall cause Tenant's
contractors to obtain and continuously maintain in full force and effect (i)
General Liability insurance with minimum limits of liability of One Million and
00/100ths Dollars ($1,000,000.00) each occurrence and Two Million and 100/100th
Dollars ($2,000,000.00) combined single limit for bodily injury, personal injury
and property damage and including Landlord and Landlord's Mortgagee as
additional insureds, and (ii) workers compensation insurance. Premiums under any
such blanket insurance policies maintained by Landlord with respect to the
Demised Premises and any other properties of Landlord shall be reasonably
allocated to the Demised Premises reasonably and proportionally, based on the
replacement cost thereof and of such other properties and any other factors
recognized by the insurer as affecting the insurance rates for the respective
properties, including the Demised Premises.
SECTION 5.5 WAIVER OF SUBROGATION. Subject to this Section 5.5,
Landlord and Tenant each hereby waive any and every claim for recovery from the
other (regardless of the negligence of the non-waiving party) for any and all
loss or damage to the Demised Premises or to the contents thereof, which loss or
damage is covered by the provisions of any property insurance policy carried, or
would have been covered by the provisions of any property insurance policy
required to be carried, by either party pursuant to this Lease. Inasmuch as this
mutual waiver will preclude (subject to this Section 5.5) the assignment of any
such claim by subrogation (or otherwise) to an insurance company (or any other
person), Landlord and Tenant each agree to have such insurance policies properly
endorsed, if necessary, to prevent the invalidation of such insurance coverage
by reason of such waiver. Anything in this Section 5.5 to the contrary
notwithstanding, if at any time during the Term the waiver of subrogation clause
required to be maintained by Landlord and Tenant, respectively, is no longer
available on terms which are commercially reasonable, then Landlord and Tenant
shall, in good faith, find a mutually acceptable alternative to the benefits
afforded each other as a result of such mutual waiver of subrogation.
SECTION 5.6 RECOVERY OF DAMAGES. Excluding any claim for punitive and
consequential damages, neither Landlord nor Tenant shall be limited in the proof
of any damages to the amount of the insurance premium or premiums not paid or
not incurred by Landlord or Tenant as a result of any claim that Landlord or
Tenant have against the other arising out of or by reason of Landlord's or
Tenant's failure to provide and keep in force the insurance required by this
Article 5. Rather, Landlord or Tenant shall also be entitled to recover, as
damages for such breach, the uninsured amount of any loss (to the extent of any
deficiency between the dollar limits of insurance required by the provisions of
this Lease and the dollar limits of the insurance actually carried by Landlord
or Tenant), damages, costs and expenses of suit, including, without limitation,
reasonable attorneys' fees, suffered or incurred by reason of damage to or
destruction of the Demised Premises, or any portion thereof, or other damage or
loss which Landlord or Tenant is required to insure against hereunder, occurring
during any period when Landlord or Tenant shall have failed or neglected to
provide insurance as aforesaid.
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ARTICLE 6
USE, MAINTENANCE AND MANAGEMENT OF DEMISED PREMISES
SECTION 6.1 PREMISES USE. Tenant shall use and occupy the Demised
Premises as a warehouse, distribution, packaging and office facility, provided
Tenant, at its sole cost and expense obtains the necessary approvals so the same
is permitted by and consistent with all zoning and other applicable statutes,
rules, orders ordinances, requirements, regulations or laws and the Land
covenants ("PREMISES USE"). Notwithstanding the foregoing, Tenant shall not use
or occupy the Demised Premises, or knowingly permit them to be used or occupied,
(i) contrary to any statute, rule, order, ordinance, requirement or regulation
applicable thereto, (ii) in any manner which would violate any certificate of
occupancy affecting the same, (iii) which would make void or voidable any
insurance then in force with respect thereto, (iv) which would make it
impossible to obtain fire or other insurance thereon required to be furnished
hereunder by Landlord or Tenant, or (v) which would constitute a public or
private nuisance or waste. Tenant shall promptly, upon discovery of any such
use, compel the discontinuance of such use.
Tenant shall not use, suffer or permit the Demised Premises, or any portion
thereof, to be used by Tenant, any third party or the public (as such), without
restriction or in such manner as might reasonably tend to impair Landlord's
title to the Demised Premises, or in such manner as might reasonably make
possible a claim or claims of adverse usage or adverse possession by the public
(as such), or third persons, or of implied dedication of the Demised Premises,
or any portion thereof. Nothing contained in this Lease and no action or
inaction by Landlord shall be deemed or construed to mean that Landlord has
granted to Tenant any right, power or permission to do any act or make any
agreement that may create, or give rise to or be the foundation for any such
right, title, interest, lien, charge or other encumbrance upon the estate of
Landlord in the Demised Premises.
SECTION 6.2 TENANT'S OPERATIONS, REPAIRS AND MAINTENANCE; END TERM COST
SHARING.
(a) TENANT'S OPERATIONS, REPAIRS AND MAINTENANCE. Except for Warranty
Work (as hereafter defined which shall include the warranty provided in
Section 2A.8 hereof), at Tenant's sole cost and expense (except for the End Term
Cost Sharing as hereafter defined), throughout the Term, Tenant shall keep in
good order, condition and repair, and shall make and perform all routine
maintenance and necessary repairs, ordinary and extraordinary, foreseen and
unforeseen, of every nature, kind and description shall take good care of the
Demised Premises and shall keep the same in good order, condition and repair,
and shall make and perform all routine maintenance thereof and all necessary
repairs thereto, ordinary and extraordinary, foreseen and unforeseen, of every
nature, kind and description, ordinary wear and tear excepted. When used in this
Article 6 "repairs" shall specifically include, without limitation, all
necessary replacements, renewals and alterations. All repairs made by Tenant,
except as hereinafter provided, shall be at least equal in quality to the
original work and, in all events, shall be made by Tenant in Compliance with
Laws. The necessity for or adequacy of maintenance and repairs shall be measured
by the standards which are appropriate for improvements of similar construction
and class.
In addition, except for Warranty Work, Tenant shall timely and properly
repair and maintain all of the Demised Premises, including, without limitation,
electrical systems, plumbing systems,
30
heating, ventilating and air conditioning systems, fire protection systems,
other mechanical systems ("BUILDING SYSTEMS"), Building roof and floor slab,
parking lot and landscaping, in accordance with the highest of the following
standards: (i) the manufacturer's recommended maintenance schedule which is
necessary so as not to void, diminish or impair any warranty for such item from
time to time in effect; or (ii) that which is generally recognized as the
industry standard for the required maintenance and repair of each such item.
Tenant shall also keep all portions of the Demised Premises in a clean and
orderly condition, reasonably free of snow, ice, dirt, rubbish, debris and
unlawful obstructions. Further, Tenant shall cause all of the Building Systems
to be operated by engineers and technicians that are specifically qualified and
experienced to so operate the subject Building System. All of Tenant's
obligations and requirements described in this Section 6.2 are herein
collectively referred to as "TENANT'S OPERATIONS, REPAIRS AND MAINTENANCE." The
time permitted for Tenant to effectuate Tenant's Operations, Repairs and
Maintenance shall be extended for such period as may reasonably be necessary;
provided, however, that Tenant shall continuously, diligently and in good faith
prosecute the same. In addition, Landlord, at Landlord's expense, not more
frequently than annually during the Term, upon five (5) days written notice
(except in the event of an emergency or extraordinary condition), may cause
independent private building inspectors, qualified in the specific discipline,
to make inspections of the Demised Premises, and the systems or segments
thereof, to determine Tenant's compliance under this Section 6.2. In the event
such inspection(s) disclose a failure on the part of Tenant to properly and/or
timely perform Tenant's Operations, Repairs, Maintenance and Replacements,
Landlord shall deliver to Tenant, in writing, a copy of such inspection(s)
report. Thereafter, as part of Tenant's Operations, Repairs, Maintenance and
Replacements, Tenant shall promptly undertake necessary corrective action to
remedy such failure. If such failure is of a material nature, upon the
completion of the corrective action, at Tenant's sole cost and expense, Tenant
shall cause a further inspection report to be prepared by a independent private
building inspectors, qualified in the specific discipline, setting forth the
manner in and extent to which such corrective action was taken. Such further
inspection(s) report shall be promptly delivered to Landlord.
If Tenant does not timely or properly perform Tenant's Operations, Repairs
and Maintenance as herein provided, after thirty (30) days' notice to Tenant
(except in the event of an emergency or extraordinary condition), Landlord may,
but is not obligated to, make necessary and required repairs, replacements or
maintenance in a reasonably diligent fashion. Tenant shall pay to Landlord all
of Landlord's actual costs incurred in connection therewith, plus a fee of ten
percent (10%) of such cost, forthwith upon being billed therefor. Landlord may,
but shall not be required to, enter the Demised Premises at all reasonable times
upon reasonable notice (except in the instance of an emergency) to make
necessary and required repairs, alterations, improvements and additions to the
Demised Premises or to any equipment, fixtures, landscaping or other
improvements located on the Demised Premises, as Landlord deems reasonably
necessary and which Tenant failed to do as required in this Lease after written
notice from Landlord (except as aforesaid). However, any and all repairs,
replacements or maintenance made by Landlord pursuant to this Lease shall be
done (i) in a reasonably diligent manner and staged in such a fashion so as to
reasonably minimize any disruption to Tenant's business operations, and (ii) in
the accompaniment of a representative of Tenant.
(b) END TERM COST SHARING. When any work necessitated by Tenant's
Operations, Repairs and Maintenance is required to be undertaken during the last
three (3) Lease
31
Years of the Term (regardless whether an unexercised right to extend the Term
for a Renewal Term exists) and the same includes or is comprised solely of the
replacement (as opposed to the repair) of an element or component of the Demised
Premises (including Building Systems) that is a so-called capital item ("CAPITAL
REPLACEMENT") that (i) has a useful life as hereafter provided of more than
three (3) years, (ii) the out-of-pocket third party cost and expense therefor is
more than Seventy-Five Thousand and 00/100ths Dollars ($75,000.00), increased as
hereafter provided ("FLOOR"), and (iii) that is otherwise determined in
accordance with generally accepted accounting principles, consistently applied,
Tenant shall notify Landlord, in writing ("CAPITAL REPLACEMENT NOTICE"), with
reasonable specificity of the scope and nature of the necessitated Capital
Replacement and the general specifications therefor and the reason for the same.
If Landlord does not agree with the terms of Tenant's Capital Replacement
Notice, within sixty (60) days following Landlord's receipt of the subject
Capital Replacement Notice, Landlord shall advise Tenant, in writing, of the
scope and nature and the general specifications of the Capital Replacement, if
any, Landlord proposes. Thereafter, Landlord and Tenant shall promptly discuss,
by telephone or in person, and negotiated in good faith to resolve their
differences in the scope, nature and specifications of the subject Capital
Replacement. Promptly following the first to occur of (1) such resolution, or
(2) the failure of Landlord to respond when aforesaid to Tenant's Capital
Replacement Notice (which failure shall be deemed an acceptance by Landlord of
the terms of the subject Capital Replacement Notice), Landlord, at its sole cost
and expense (except for the End Term Cost Sharing hereafter defined and
provided) Landlord shall cause the Capital Replacement to be commenced and
completed in the manner agreed to by Landlord and Tenant or as contained in the
subject Capital Replacement Notice if Landlord failed to respond thereto as
above provided.
Promptly following the completion by Landlord of the subject Capital
Replacement, Landlord shall deliver to Tenant an invoice of the commercially
reasonable out-of-pocket costs and expenses incurred by Landlord for such
Capital Replacement. Such invoice shall contain reasonable specificity and
supporting documentation such as purchase orders and the like that evidence such
costs and expenses, plus a fee equal to two percent (2%) of such costs and
expenses (collectively, "CAPITAL REPLACEMENT COSTS"). Such invoice shall also
set forth the rate of interest that will be computed on the Capital Replacement
Costs if Tenant thereafter delivers a Renewal Notice, which rate shall be that
which is commercially reasonable at the time based on Tenant's then existing
long term credit rating ("CAPITAL REPLACEMENT INTEREST"). Within thirty (30)
days following Tenant's receipt of such invoice, Tenant shall pay to Landlord,
as Additional Charges, that amount of the Capital Replacement Costs set forth in
said invoice, multiplied by a fraction, the numerator of which is the number of
months (rounded to the nearest whole month) remaining in the portion of the Term
then in effect (i.e. the Initial Term or the applicable Renewal Term), and the
denominator of which is the number of months of the useful life of such capital
replacement item(s) ("END TERM COST SHARING"). Such useful life shall be
determined to be that which is assigned to the subject capital replacement
item(s) for Federal income tax purposes pursuant to Section 168 of the Internal
Revenue Code of 1986, as amended (and the Treasury Regulations from time to time
promulgated thereunder).
In the event Tenant is required to pay any End Term Cost Sharing in the
Initial Term or the First Renewal Term, before Tenant, if at all, delivers its
Renewal Notice for, as applicable, the First Renewal Term or Second Renewal
Term, and Tenant thereafter delivers its Renewal Notice, then concurrent with
the delivery of the Renewal Notice and as a condition precedent thereto to the
effectiveness thereof, as part of Additional Charges, Tenant shall pay to
Landlord
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an amount that equals the sum of (i) the amount of the End Term Cost Sharing
payable by Tenant that equals the End Term Cost Sharing that would have
otherwise been payable by Tenant had the Term then been extended for the
applicable Renewal Term then being exercised by Tenant, PLUS (ii) the amount of
interest on the amount of the Capital Replacement Costs MINUS the amount of the
End Term Cost Sharing theretofore paid by Tenant, at the rate of the Capital
Replacement Interest from the date the subject End Term Cost Sharing(s) was paid
by Landlord until such excess amount is further paid by Tenant to Landlord.
During the Term, the Floor shall be changed when applicable, by multiplying
it by one plus the positive percentage change between the CPI (as hereafter
defined) published on the date closest to the Initial Term Commencement Date and
the CPI published on the date closest to the commencement of the Lease Year in
which the foregoing subject Capital Replacement Costs were incurred by Landlord.
"CPI" shall mean the United States Bureau of Labor Statistics Consumer Price
Index for All Urban Consumers in the City of Chicago,
Illinois, "All Items,"
Base 1982-84 = 100 or such reasonably similar index then existing if foregoing
is no longer published.
If Landlord fails to commence and thereafter promptly complete any required
Capital Replacement, or Landlord fails to commence the same when above provided,
then following fifteen (15) days prior written notice from Tenant to Landlord of
such failure, Tenant may undertake to commence and thereafter complete the
subject Capital Replacement and Landlord shall pay to Tenant, within thirty (30)
days following Landlord's receipt of an invoice from Tenant, containing
reasonable specificity and supporting documentation, for the costs and expenses
incurred by Tenant therefor (which for such purposes shall be deemed to be the
Capital Replacement Costs), Landlord shall pay to Tenant the amount of such
Capital Replacement Costs that are in excess of that amount Tenant would have
been obligated to pay Landlord as Tenant's End Term Cost Sharing for such
Capital Replacement Costs, had Landlord undertaken the subject Capital
Replacement as required herein.
SECTION 6.3 MISUSE OR NEGLECT. Except as provided in Articles 11 and 12
hereof, Tenant shall be responsible for all repairs to the Demised Premises
which are made necessary by any misuse or neglect by Tenant, or any of its
partners, directors, officers, shareholders, contractors, subcontractors,
sub-subcontractors, employees, agents or invitees, in or upon the Demised
Premises.
ARTICLE 7
COMPLIANCE WITH LAWS AND ORDINANCES
SECTION 7.1 COMPLIANCE. Tenant shall, throughout the Term and at
Tenant's sole cost and expense, promptly comply or cause compliance with or
remove or cure any violation of any and all present and future laws, ordinances
(zoning or otherwise), orders, rules, regulations and requirements, as are now,
or may from time to time hereafter, be in effect, of all federal, state,
municipal and other governmental bodies having jurisdiction over the Demised
Premises, and the appropriate departments, commissions, boards and officers
thereof (subject only to Section 7.3 hereof), and the orders, rules and
regulations, as are now, or may from time to time hereafter, be in effect, of
the Board of Fire Underwriters where the Demised Premises are situated, or of
any other body now or hereafter constituted exercising lawful or valid authority
over the Demised Premises,
33
or any portion thereof, or the sidewalks, curbs, roadways, alleys or entrances
adjacent or appurtenant thereto, or exercising authority with respect to the use
or manner of use of the Demised Premises, and whether the compliance, curing or
removal of any such violation and the costs and expenses necessitated thereby
shall have been foreseen or unforeseen, ordinary or extraordinary, and whether
the same shall be presently within the contemplation of Landlord or Tenant or
shall involve any change of governmental policy, or require structural or
extraordinary repairs, alterations or additions by Tenant and irrespective of
the costs thereof ("COMPLIANCE WITH LAWS"). Regardless of the foregoing
provisions, Tenant's obligations with regard to Compliance with Laws shall not
extend to any compliance with or removal or cure of any violation of any laws,
ordinances, zoning or otherwise, orders, rules, regulations and requirements of
federal, state, municipal or governmental bodies which results from the
construction of the Initial Improvements or the Expansion Space.
SECTION 7.2 OTHER COMPLIANCE. Tenant, at its sole cost and expense,
shall comply with all agreements, contracts, easements, restrictions,
reservations or covenants, if any, running with the Land, or hereafter created
by Tenant or consented to, in writing, by Tenant. Tenant shall also comply with,
observe and perform all provisions and requirements of all policies of insurance
at any time in force with respect to the Demised Premises and required to be
obtained and maintained under the terms of Article 5 hereof, and shall comply
with all development permits issued by governmental authorities issued in
connection with development of the Demised Premises.
SECTION 7.3 ENVIRONMENTAL MATTERS.
(a) LANDLORD AND TENANT MUTUAL COVENANTS. In addition to the compliance
requirements set forth herein, and not by way of limitation thereof, Landlord
and Tenant mutually covenant and agree as set forth in this Section 7.3.
(b) DEFINITIONS. As used in this Section 7.3, the following terms shall
have the following meanings:
(i) "ENVIRONMENTAL CONDITION(S)" means the presence on, in or under the
Demised Premises of any Hazardous Substance(s) except as are in
compliance with Environmental Laws, whether such presence is in
ambient air, surface water, groundwater, land surface or subsurface
strata.
(ii) "ENVIRONMENTAL LAWS" means all federal, state or local
environmental laws, and any and all policies, rules and regulations
thereunder, which are, at any time and from time to time,
applicable to the Demised Premises, including, without limitation,
the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601, et seq., the Solid Waste
Disposal Act and Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, et seq.; the Clean Water Act, 33 U.S.C. Section 1251,
et seq.; the Clean Air Act, 42 U.S.C. Section 7401, et seq.; the
Toxic Substances Control Act, 15 U.S.C. Section 2601, et seq.; and
the Safe Drinking Water Act, 42 U.S.C. Section 300f through 300j,
and the Clean Streams Law, as amended (35 P.S. Section 681.101,
ET SEQ.; the Solid Waste
34
Management Act, as amended (35 P.S. Section 6801.101, et seq.; and
the Hazardous Sites Clean Act (35 P.S. Section 6020.101, et seq.,
and the regulations adopted, publications promulgated or other laws
enacted pursuant thereto of in addition thereto by federal, state
or local governmental authorities.
(iii) "ENVIRONMENTAL LIABILITY(IES)" means any Environmental Conditions
with respect to which there are effective and applicable
Environmental Laws pursuant to which any regulatory authorities
having jurisdiction over the Demised Premises would have authority
to require remediation activities. Designation of a condition as an
Environmental Liability by any regulatory authorities or other
third parties, shall not be construed as an admission thereof by
either Landlord or Tenant.
(iv) "HAZARDOUS SUBSTANCES" means (A) any material or substance (1)
which is defined as a "hazardous substance," "hazardous waste,"
"chemical mixture or substance," or "air pollutant" under any
Environmental Laws, (2) containing petroleum, crude oil or any
fraction thereof, (3) containing polychlorinated biphenyls PCB's,
(4) containing asbestos, or (5) which is radioactive; (B) any other
material or substance displacing toxic, reactive, ignitable or
corrosive characteristics, as all such terms are used in their
respective broadest senses, or are defined or become defined under
any Environmental Laws; or (C) any materials which cause a nuisance
upon or waste to the Demised Premises or any portion thereof.
(c) LANDLORD REPRESENTATION; LANDLORD INDEMNITY. To Landlord's actual
knowledge (being the actual knowledge of those representatives of Landlord
identified in Section 19.5 hereof), and except as may be set forth in that
certain environmental site assessment report entitled "Phase I Environmental
Site Assessment," submitted as of July 15, 1998, and prepared by ▇▇▇▇▇▇▇
Environmental Services, as of the date of this Lease, no Environmental
Conditions exist on the Land. To the extent, if any, and only to the extent,
that (i) Landlord is in breach of the first sentence of this Section 7.3(c), or
(ii) Landlord, or its members, directors, officers, contractors, subcontractors,
sub-subcontractors, agents or employees, directly cause any Environmental
Conditions on the Demised Premises, or any portion thereof, except those arising
as a Differing Site Condition provided in Section 8 of the Work Letter, then
Landlord shall indemnify and save Tenant, and its partners, directors, officers,
shareholders, contractors, subcontractors, sub-subcontractors, agents and
employees, harmless from and against the direct out-of-pocket costs and expenses
(and not any indirect or consequential loss, cost or damage or any other direct
loss, cost or damage) incurred by any one or more of them in order to clean-up
or remediate the Demised Premises to the extent required by applicable
Environmental Laws), and from and against any and all other direct liability,
loss, cost or damage, including, without limitation, reasonable attorneys' fees
and court costs, incurred or sustained by any one or more of Tenant and its
partners, directors, officers, shareholders, contractors, subcontractors,
sub-subcontractors, agents and employees as a result of such breach or of such
Environmental Conditions.
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(d) DEVELOPER INDEMNITY. Except to the extent of a Differing Site
Condition as provided in Section 8 of the Work Letter, to the extent, if any,
and only to the extent, that Developer, or its members, directors, officers,
contractors, subcontractors, sub-subcontractors, agents or employees, directly
cause any Environmental Conditions on the Demised Premises, or any portion
thereof, then Developer shall indemnify and save Tenant, and its directors,
officers, shareholders, contractors, subcontractors, sub-subcontractors, agents
and employees, harmless from and against the direct out-of-pocket costs and
expenses (and not any indirect or consequential loss, cost or damage or any
other direct loss, cost or damage) incurred by any one or more of them in order
to clean-up or remediate the Demised Premises to the extent required by the
governmental authorities having jurisdiction and responsibility for the
enforcement of the applicable Environmental Laws, and from and against any and
all other direct liability, loss, cost or damage, including, without limitation,
reasonable attorneys' fees and court costs, incurred or sustained by any one or
more of them as a result of such of such Environmental Conditions.
(e) TENANT COVENANT; TENANT INDEMNITY. To the extent, if any, and only
to the extent, that Tenant, or its directors, officers, shareholders,
contractors, subcontractors, sub-subcontractors, agents, employees or invitees,
(i) are in breach of any of its covenants, agreements or obligations under this
Article 7, or (ii) directly cause any Environmental Conditions on the Demised
Premises, or any portion thereof, then Tenant shall indemnify and save Landlord
and its members, directors, officers, contractors, subcontractors,
sub-subcontractors, Mortgagees, agents and employees, harmless from and against
the direct out-of-pocket costs and expenses (and not any indirect or
consequential loss, cost or damage or any other direct loss, cost or damage)
incurred by any one or more of them in order to clean-up or remediate the
Demised Premises to the extent required by the governmental authorities having
jurisdiction and responsibility for the enforcement of the applicable
Environmental Laws, and from and against any and all other direct liability,
loss, cost or damage, including, without limitation, reasonable attorneys' fees
and court costs, incurred or sustained by any one or more of them as a result of
such of such breach or of such Environmental Conditions. Upon the expiration or
earlier termination of this Lease, Tenant shall cause all Hazardous Substances
(to the extent such Hazardous Substances are generated, stored, released or
disposed of during the Term by Tenant) to be removed from the Demised Premises
and transported for use, storage or disposal in accordance and in compliance
with all applicable Environmental Laws.
(f) NOTICE. If a claim by a third person (including, without
limitation, any governmental entity) is made against any person or entity
indemnified hereunder, and such person or entity intends to seek indemnification
with respect to such claim under this Section 7.3, such person or entity seeking
such indemnification shall promptly give notice of such claim to the
indemnifying party. In addition, if a person or entity indemnified under this
Section 7.3 comes into possession of facts which could reasonably lead to a
claim for indemnification under this Section 7.3, such party shall promptly give
notice of such facts to the indemnifying party. If Tenant is notified or cited
for any violation (or possible violation) of any Environmental Liability,
Environmental Laws or other hazardous materials laws, by any governmental body
having jurisdiction of the Demised Premises, with regard to any Environmental
Condition, Tenant shall promptly notify Landlord thereof, and shall include with
such notification copies of such governmental notification or citation and such
other documents as may be reasonably necessary to describe the alleged violation
(or possible violation).
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(g) EXCLUSIVE REMEDY AND SURVIVAL. Notwithstanding any other
indemnities set forth herein, the parties agree that the foregoing
indemnifications shall exclusively define their rights and obligations with
respect to Environmental Liabilities arising from or related to the Demised
Premises. The provisions of this Section 7.3 shall survive the termination of
this Lease and be effective for so long as Landlord or Tenant may have any
liability whatsoever with respect to the Demised Premises, but in no instance
more than two (2) years following the termination of this Lease, unless either
party notifies the other, in writing and prior to the expiration of said two (2)
years, of a liability one party is claiming against the other.
(h) COMPLIANCE WITH OTHER LAWS. Subject to Section 7.1 hereof and the
foregoing provisions of this Section 7.3, Tenant, at its sole cost and expense,
shall fully comply with (as part of its obligations hereunder as to Compliance
with Laws), and provide to Landlord all information needed from time to time in
regard to, all provisions of all applicable federal, state and local
environmental protection acts and any other applicable federal, state or local
environmental liability or protection or cleanup responsibility laws, either
currently in effect or hereafter enacted, which affect Tenant's Permitted Use of
the Demised Premises.
(i) STORAGE OF HAZARDOUS MATERIALS. Tenant shall not install, handle,
generate, store, treat, use, dispose of, discharge, release, manufacture,
refine, emit, ▇▇▇▇▇, remove, transport or conduct any other activity with
respect to, on, in or around the Demised Premises (collectively, "handle"), any
Hazardous Substances or any material deemed to be toxic or hazardous by any
governmental authority having jurisdiction over the Demised Premises; provided,
however, that notwithstanding the foregoing, Tenant may handle, or cause to be
handled normal quantities of Hazardous Substances or other materials as
aforesaid (i) customarily used in the conduct of general administrative and
executive office activities (e.g., copier fluids and cleaning supplies), and
(ii) customarily used in the conduct of those Permitted Uses. Any and all such
Hazardous Substances or other materials, regardless of whether customarily used
in the conduct of general administrative and executive office activities or the
Permitted Uses, shall be handled in accordance with any and all applicable
Environmental Laws.
ARTICLE 8
MECHANIC'S LIENS AND OTHER LIENS
SECTION 8.1 LIENS AND RIGHT OF CONTEST. Except for the construction of
the Improvements by Landlord as provided in the Work Letter and Article 2A
hereof, Tenant shall take commercially reasonable efforts to avoid any
mechanic's lien or other lien to be filed against the Demised Premises, or any
portion thereof, by reason of work, labor, skill, services, equipment or
materials supplied or claimed to have been supplied to the Demised Premises at
the request of Tenant, or anyone holding the Demised Premises, or any portion
thereof, by, through or under Tenant. If any such mechanic's lien or other lien
shall at any time be filed against the Demised Premises, or any portion thereof,
Tenant shall cause the same to be discharged of record within thirty (30) days
after the date of filing the same. However, in the event Tenant desires to
contest the validity of any lien, it shall, within thirty (30) days after the
date of filing of same (a) notify Landlord, in writing, that Tenant intends so
to contest the same, and (b) cause the Landlord's and its Mortgagees' title
insurance policies to be endorsed, in form and content reasonably satisfactory
to Landlord and its Mortgagees, insuring against any loss or damage resulting
from such lien. If Tenant fails to so
37
notify Landlord of Tenant's desire to so contest such lien or fails to deposit
with Landlord the security provided above, Landlord, upon ten (10) days prior
notice to Tenant may pay, but is not obligated to do so, for the complete
discharge of such lien without investigating the validity thereof. Any amount
paid by Landlord for such discharge, together with all costs, fees and expenses
in connection therewith (including, without limitation, reasonable attorneys'
fees of Landlord), together with interest thereon at the Maximum Rate of
Interest, shall be repaid by Tenant to Landlord on demand by Landlord. However,
if Tenant complies with the foregoing, and Tenant continues, in good faith, to
contest the validity of such lien by appropriate legal proceedings which shall
operate to prevent the collection thereof and the sale or forfeiture of the
Demised Premises, or any part thereof, to satisfy the same, Tenant shall be
under no obligation to pay such lien until such time as the same has been
decreed, by court order, to be a valid lien on the Demised Premises.
Tenant shall indemnify and save Landlord, and its members, directors,
officers, contractors, subcontractors, sub-subcontractors, Mortgagees, agents
and employees, and the Demised Premises, harmless from and against any and all
loss, cost or damage, including, without limitation, reasonable attorneys' fees,
incurred or sustained by any of them in connection with the assertion, filing,
foreclosure or other legal proceedings with respect to any such mechanic's lien
or other lien or the attempt by Tenant to discharge the same as above provided.
All materialmen, contractors, artisans, mechanics, laborers and any other
person now or hereafter furnishing any labor, services, materials, supplies or
equipment to Tenant with respect to the Demised Premises, or any portion
thereof, are hereby charged with notice that they must look exclusively to
Tenant to obtain payment for the same. Notice is hereby given that Landlord
shall not be liable for any labor, services, materials, supplies, skill,
machinery, fixtures or equipment furnished or to be furnished to Tenant upon
credit, and that no mechanic's lien or other lien for any such labor, services,
materials, supplies, machinery, fixtures or equipment shall attach to or affect
the estate or interest of Landlord in and to the Demised Premises, or any
portion thereof.
SECTION 8.2 LIENS CAUSED BY LANDLORD'S WORK. The provisions of
Section 8.1 hereof shall not apply to any mechanic's lien or other lien for
labor, services, materials, supplies, machinery, fixtures or equipment furnished
to the Demised Premises in the performance of Landlord's obligations to (i)
plan, design or construct the Initial Improvements and Expansion Space, (ii)
provide the Warranty Work, Punch List Item or Expansion Punchlist Item work
required herein, and (iii) provide Landlord's obligations pursuant to Articles
11 and 12 hereof. However, in the event a mechanic's lien does arise as a result
of the foregoing undertakings of Landlord and Landlord desires to contest the
validity of any lien, it shall, within thirty (30) days after the date of filing
of same (a) notify Tenant, in writing, that Landlord intends so to contest the
same, and (b) cause leasehold title insurance policy to be issued to Tenant in
an amount of not less than 150% of the face amount of such mechanic's lien,
which shall be endorsed, in form and content reasonably satisfactory to Tenant,
insuring against any loss or damage resulting from such lien. Landlord shall
indemnify and save Tenant, and its partners, directors, officers, shareholders,
contractors, subcontractors, sub-subcontractors, agents and employees, harmless
from and against any and all direct (but not indirect or consequential) loss,
cost or damage, including, without limitation, reasonable attorneys' fees,
incurred or sustained by any of them in connection with the assertion, filing,
foreclosure or other legal proceedings with respect to any such mechanic's lien
or other lien.
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SECTION 8.3 OTHER LIENS. Tenant shall not create, permit or suffer,
and, subject to the provisions of Section 8.1 hereof, shall promptly discharge
and satisfy of record, any other lien, encumbrance, charge, security interest,
or other right or interest which, as a result of Tenant's action or inaction
contrary to the provisions of this Lease, shall be or become a lien,
encumbrance, charge or security interest upon the Demised Premises, or any
portion thereof, or the income therefrom.
ARTICLE 9
INTENT OF PARTIES
SECTION 9.1 NET RENT. Landlord and Tenant do each state and represent
that it is their respective intention that this Lease be interpreted and
construed as a net lease and that all Base Rent and Additional Charges shall be
paid by Tenant without abatement, deduction, diminution, deferment, suspension,
reduction, set off, defense or counterclaim with respect to the same.
SECTION 9.2 LANDLORD'S PERFORMANCE FOR TENANT. If Tenant shall at any
time fail to pay any Additional Charges in accordance with the provisions
hereof, or shall fail to make any other payment or perform any other act on its
part to be made or performed, then Landlord, after thirty (30) days' prior
written notice to Tenant (or without notice in case of emergency), and without
waiving or releasing Tenant from any obligation of Tenant contained in this
Lease, may, but shall be under no obligation to do so, (a) pay after such thirty
(30) days' written notice to Tenant, any such Additional Charges payable by
Tenant pursuant to the provisions hereof; or (b) make any other payment or
perform any other act on Tenant's part to be paid or performed hereunder, except
that any time permitted to Tenant to perform any act required to be performed by
Tenant hereunder shall be extended for such period as may be necessary to
effectuate such performance, provided Tenant is continuously, diligently and in
good faith prosecuting such performance. Landlord may enter upon the Demised
Premises for any such purpose and take all such action therein or thereon as may
be necessary therefor and all such action taken by Landlord shall be in a
reasonably diligent fashion.
SECTION 9.3 PAYMENT FOR LANDLORD'S PERFORMANCE FOR TENANT. All sums so
paid by Landlord and all costs and expenses, including, without limitation,
reasonable attorneys' fees, incurred by Landlord in connection with the
performance of any such act, together with interest thereon at the Maximum Rate
of Interest from the respective dates of Landlord's making of each payment of
such cost and expense, shall be paid by Tenant to Landlord on demand.
ARTICLE 10
DEFAULTS AND LANDLORD'S REMEDIES
SECTION 10.1 DEFAULT. The following events, after the expiration of the
applicable cure periods in this Article 10 (except as otherwise provided in this
Lease), are sometimes referred to as an event of "Default":
(a) If default shall be made in the due and punctual payment of Base
Rent or any installment thereof, or if default shall be made in the
payment of Additional Charges or in the payment of any other sum
required to be paid by Tenant under this Lease, after five (5)
days' written notice; provided, however, if Tenant cures, within
ten (10) days following receipt of such written notice,
39
any default in the payment of Base Rent occurring not more than
twice in any Lease Year, no Default shall be deemed to have
occurred;
(b) If default shall be made in the observance or performance of any of
the other covenants or conditions in this Lease which Tenant is
required to observe and perform, and such default shall continue
for thirty (30) days after written notice to Tenant, provided,
however, that the time allowed Tenant within which Tenant is
permitted to cure the same shall be extended for such reasonable
period as may be necessary for the curing, provided Tenant is
continuously, diligently and in good faith prosecuting such cure;
(c) If default shall be made by Tenant under the provisions of Article
13 hereof relating to assignment, sublease, mortgage or other
transfer of Tenant's interest in this Lease or in the Demised
Premises or in the income arising therefrom;
(d) If, during the Term, (i) Tenant shall make an assignment for the
benefit of creditors, (ii) a voluntary petition shall be filed by
Tenant under any law having for its purpose the adjudication of
Tenant a bankrupt, or Tenant shall be adjudged a bankrupt pursuant
to an involuntary petition in bankruptcy that is not dismissed
within ninety (90) days of such adjudication, (iii) a receiver
shall be appointed for the property of Tenant, or (iv) any
department of the state or federal government, or any officer
thereof duly authorized, shall take possession of the business or
property of Tenant, Landlord may treat the occurrence of any one or
more of the foregoing events of Default as a breach of this Lease;
(e) If, during the Term, any department of the state or federal
government, or any officer thereof duly authorized, shall take
possession of the business or property of Tenant,
then Landlord may treat the occurrence of any one or more of the foregoing
events of Default as a breach of this Lease.
In any such event, Landlord, at any time thereafter during the continuance
of any such event of Default, may give written notice to Tenant specifying such
event of Default or events of Default and stating that this Lease and the Term
hereby demised shall expire and terminate on the date specified in such notice,
and upon the date specified in such notice, this Lease and the Term hereby
demised, and all rights of Tenant under this Lease, including, without
limitation, all rights of renewal whether exercised or not, shall expire and
terminate, or in the alternative or in addition to the foregoing remedy,
Landlord may assert and have the benefit of any and all other remedies and
rights provided at law or in equity. Notwithstanding the foregoing to the
contrary, with respect to any alleged default, other than a Default in the
payment of Base Rent or any Additional Charges payable to Landlord, if (i)
within fifteen (15) days after Landlord's notice of such default, Tenant
notifies Landlord that Tenant, in good faith, disputes such alleged default, and
(ii) within thirty (30) days after Landlord's notice of such Default, Tenant
files an action in a court of competent
40
jurisdiction contesting such alleged default, then Tenant shall not be deemed to
be in Default under this Lease with respect to such alleged default ("GOOD FAITH
DISPUTE"). However, if the final judgment in such action is adverse to Tenant,
in whole or in part, then Tenant shall forthwith commence to correct the matters
complained of by Landlord, or that portion thereof as to which such judgment is
adverse to Tenant, and complete the same within thirty (30) days after such
judgment, or if more than thirty (30) days are required to complete such
corrections with reasonable diligence, commence to correct the same within such
thirty (30) days and prosecute the same to completion with reasonable diligence.
Except for the obligations of Tenant relating to such alleged default, the
foregoing shall not excuse Tenant from performing its other obligations under
this Lease.
SECTION 10.2 RENT AFTER DEFAULT. In the event of an uncured Default,
Landlord may, but shall not be obligated to, terminate this Lease and the Term
created hereby, in which event Landlord may forthwith repossess the Demised
Premises and be entitled to recover as damages, in addition to any other sums or
damages for which Tenant may be liable to Landlord hereunder, a sum equal to the
Base Rent and Additional Charges as they become due hereunder as if this Lease
was not so terminated, except as provided in Section 10.3.
SECTION 10.3 RE-LETTING AFTER DEFAULT. To the extent permitted by law,
in the event of a Default, Landlord may, but shall not be obligated to,
terminate Tenant's right of possession and may repossess the Demised Premises by
forcible entry and detainer suit, by taking peaceful possession or otherwise,
without terminating this Lease. In such event, Landlord shall use those efforts
required by law to relet the same for the account of Tenant, for such rent and
upon such terms as may be satisfactory to Landlord. For the purpose of such
re-letting, Landlord is authorized to repair, remodel or alter the Demised
Premises, to the extent commercially reasonably necessary to so re-let. If
Landlord shall fail to relet the Demised Premises, Tenant shall pay to Landlord,
as damages, a sum equal to the amount of Base Rent and Additional Charges
reserved in this Lease for the balance of the Initial Term or the Renewal Term,
as the case may be, as the same becomes due and payable. If the Demised Premises
are relet and a sufficient sum shall not be realized from such re-letting, after
paying all of the costs and expenses of all decoration, repairs, remodeling,
alterations and additions and the expenses of such re-letting and of the
collection of the rent accruing therefrom, to satisfy the Base Rent and
Additional Charges provided for in this Lease, Tenant shall satisfy and pay the
same upon demand therefor from time to time. Tenant agrees that Landlord may
file suit to recover any sums failing due under the terms of this Article 10
from time to time, and that no suit or recovery of any portion due to Landlord
hereunder shall be any defense to any subsequent action brought for any amount
not theretofore reduced to judgment in favor of Landlord.
SECTION 10.4 ACCEPTANCE AFTER DEFAULT; NO WAIVER. No failure by Landlord
or Tenant, as the case may be, to insist upon the performance of any of the
terms of this Lease or to exercise any right or remedy consequent upon a breach
thereof, and no acceptance by Landlord of full or partial Base Rent and
Additional Charges from Tenant or any third party during the continuance of any
such breach, shall constitute a waiver of any such breach or of any of the terms
of this Lease. None of the terms of this Lease to be kept, observed or performed
by either party hereunder, and no breach thereof, shall be waived, altered or
modified except by a written instrument executed by both Landlord and Tenant. No
waiver of any breach shall affect or alter this Lease, but each of the terms of
this Lease shall continue in full force and effect with respect to any other
then existing or
41
subsequent breach of this Lease. No waiver of any Default of Tenant herein shall
be implied from any omission by Landlord to take any action on account of such
Default. If such Default persists or is repeated, no express waiver shall affect
any Default other than the Default specified in the express waiver, and then
only for the time and to the extent therein stated. One or more waivers by
Landlord or by Tenant, as the case may be, shall not be construed as a waiver of
a subsequent breach of the same covenant, term or condition.
SECTION 10.5 REMEDIES CUMULATIVE. Upon a Default by Tenant of any of the
terms contained in this Lease, Landlord shall be entitled to invoke any right or
remedy allowed at law or in equity or by statute or otherwise as though entry,
reentry, summary proceedings and other remedies, as the case may be, were not
provided for in this Lease. Each remedy or right of Landlord provided for in
this Lease shall be cumulative and shall be in addition to every other right or
remedy provided for in this Lease, or now or hereafter existing at law or in
equity or by statute or otherwise. The exercise or the beginning of the exercise
by Landlord of any one or more of such rights or remedies, except as otherwise
provided herein, shall not preclude the simultaneous or later exercise by
Landlord of any or all other rights or remedies.
ARTICLE 11
DESTRUCTION AND RESTORATION
SECTION 11.1 RESTORATION. If the Demised Premises or any portion thereof
shall be damaged by fire or other casualty at any time prior to the last two
Lease Years within the Term (taking into account whether Tenant delivers a
Renewal Notice within thirty (30) days following the occurrence of such damage
or other casualty), at Landlord's sole cost and expense (except as hereafter
provided in the instance of the deductible for the Property Insurance provided
in Section 11.2 below), Landlord shall repair and restore the same
("RESTORATION"), subject to Permitted Delays, with diligence and as soon as
reasonably practicable under the circumstances, but nonetheless within two
hundred and seventy (270) days following the date Landlord receives all building
permits and other approvals necessary to commence and thereafter prosecute to
completion such Restoration. If (i) such damage or other casualty occurs in the
last two (2) Lease Years, (ii) Tenant has not then delivered to Landlord a
Renewal Notice Tenant has the right to deliver hereunder, and (iii) the
reasonably estimated time it will take to complete the Restoration therefor is
in excess of one hundred eighty (180) days, Landlord may elect to either (1)
terminate this Lease, effective as of the date of such occurrence, or (2)
undertake the Restoration. If Landlord fails to deliver such notice to Tenant,
it shall act as notice to Tenant that Landlord has elected to terminate this
Lease.
Notwithstanding the foregoing, if the Demised Premises are partially or
wholly untenantable by fire or other casualty and Landlord elects to restore the
damaged portion of the Demised Premises as aforesaid, but Landlord fails to
complete the Restoration within the said two hundred and seventy (270) days
(subject to Permitted Delays), then, upon thirty (30) days prior written notice
to Landlord, Tenant may terminate this Lease. If Tenant fails to deliver such
notice when aforesaid, Tenant shall be deemed to waived such right of
termination, but Tenant may pursue against Landlord an action for specific
performance of the Restoration.
Base Rent and Additional Charges shall ▇▇▇▇▇ on those portions of the
Demised Premises
42
that are, from time to time, untenantable or inaccessible as a result of such
damage (or shall be fully abated pending repair if the Demised Premises are
rendered unsuitable for the conduct of Tenant's business) until Landlord shall
have completed the Restoration required of Landlord hereunder. If the entirety
of the Building is untenantable or the Demised Premises are inaccessible as a
result of such damage, then on and after the date Tenant vacates the Demised
Premises as a result thereof until the Restoration is complete so Tenant is
permitted to re-occupy the Demised Premises, Tenant shall not be required to
maintain the commercial general liability insurance provided in Section 5.2(b)
hereof.
SECTION 11.2 INSURANCE PROCEEDS. All insurance moneys recovered by
Landlord on account of such damage or destruction, less the costs, if any, to
Landlord of such recovery, shall be applied by Landlord to the payment of the
costs of the Restoration and shall be paid out from time to time as the
Restoration progresses. If the net amount of the insurance proceeds (after
deduction of all costs, expenses and fees, including, without limitation,
attorneys' fees, related to recovery of the insurance proceeds) recovered by
Landlord is insufficient to complete the Restoration, Landlord shall pay any
deficiency necessary to cause the completion of Restoration. In all events,
one-half of the full amount of any deductible under Property Insurance shall
form a part of the Additional Charges payable by Tenant.
ARTICLE 12
CONDEMNATION
SECTION 12.1 TOTAL CONDEMNATION. If during the Term, the entire Demised
Premises shall be taken as the result of the exercise of the power of eminent
domain ("PROCEEDINGS"), this Lease and all right, title and interest of Tenant
hereunder shall terminate on the date of vesting of title pursuant to such
Proceedings, and Landlord shall be entitled to and shall receive the total award
made in such Proceedings, except to the extent Federal funds form a part of such
award or separate award, then to the extent moving costs and loss of personalty
for the exclusive benefit of Tenant are included, Landlord shall share with
Tenant the amount so allocated for such moving costs and loss of personalty and
Tenant shall have the right to pursue any separate award for such items to the
extent available under then applicable law. Notwithstanding the foregoing, any
obligations of Landlord or Tenant hereunder that arose or accrued prior to the
date of the foregoing termination shall survive and remain in full force and
effect subsequent to such date of termination. Except as specifically provided
above in this Section 12.1, Tenant hereby assigns any interest in such award,
damages, consequential damages and compensation to Landlord.
SECTION 12.2 PARTIAL CONDEMNATION. If during the Term, less than the
entirety of the Demised Premises that does not unreasonably alter the Permitted
Uses shall be taken in any such Proceedings, then this Lease shall, upon vesting
of title in the Proceedings, terminate as to the portion of the Demised Premises
so taken. If the portion of the Demised Premises taken shall substantially and
materially interfere with or inhibit the Permitted Uses, or the portion of the
Demised Premises taken shall make it impossible to utilize a reasonably useful
portion of the parking forming a part of the Demised Premises, Tenant may, at
its option, terminate this Lease as to the remainder of the Demised Premises.
Tenant shall not have the right to terminate this Lease pursuant to the
preceding sentence, however, if that portion of the Demised Premises not taken
can reasonably be utilized by Tenant with substantially the same utility and
efficiency as prior to the
43
taking. Such termination as to the remainder of the Demised Premises shall be
effected by Tenant's written notice to Landlord, given not more than sixty (60)
days after the date of vesting of title in such Proceedings, and shall specify a
date not more than sixty (60) days after the giving of such notice as the date
for such termination. Upon the date specified in such notice, the Term and all
right, title and interest of Tenant hereunder, shall cease and terminate.
Notwithstanding the foregoing, any obligations of Landlord or Tenant hereunder
that arose or accrued prior to the date of the foregoing termination shall
survive and remain in full force and effect subsequent to such date of
termination. If this Lease is terminated as provided in this Section 12.2,
Landlord shall receive the award as is provided in Section 12.1 hereof. In the
event that Tenant elects not to terminate this Lease as to the remainder of the
Demised Premises, the rights and obligations of Landlord and Tenant shall be
governed by the provisions of Section 12.3 hereof.
SECTION 12.3 RESTORATION AFTER CONDEMNATION. If, in the case of a
partial taking, this Lease is not terminated as provided in Section 12.2 hereof,
this Lease shall, upon vesting of title pursuant to the Proceedings, terminate
as to the parts so taken, and Tenant shall have no claim or interest in the
award, damages, consequential damages and compensation, or any part thereof.
Landlord, in such case, covenants and agrees promptly to restore that portion of
the Demised Premises not so taken to a complete architectural and mechanical
unit for the Permitted Uses as provided in this Lease. In the event that the net
amount of the award (after deduction of all costs and expenses, including,
without limitation, attorneys' fees) that may be received by Landlord in any
such Proceedings as a result of such taking is insufficient to pay all costs of
such restoration work, Landlord shall pay such "shortfall."
SECTION 12.4 RENT ADJUSTMENT. In the event of a partial taking of the
Demised Premises under Section 12.2 hereof, the fixed Base Rent payable
hereunder during the period from and after the date of vesting of title pursuant
to such Proceedings to the earlier of the termination of this Lease or until the
next date upon which Base Rent is determined under Section 3.1 hereof, shall be
computed by multiplying the applicable Base Rent then being paid by Tenant, by a
fraction, the numerator of which is the square feet of the Building after such
taking and after the same has been restored to a complete architectural unit,
and the denominator of which is the square feet of the Building immediately
prior to such taking.
ARTICLE 13
ASSIGNMENT, SUBLETTING, ETC.
SECTION 13.1 PERMITTED TRANSFERS. Tenant shall not sublet the Demised
Premises, or any portion thereof, nor assign, mortgage, pledge, transfer or
otherwise encumber or dispose of this Lease, or any interest herein, or in any
manner assign, mortgage, pledge, transfer or otherwise encumber or dispose of
its interest or estate in the Demised Premises, or any portion thereof, without
first obtaining Landlord's prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed; provided, however, such consent
shall not be required if (i) an assignment of Tenant's rights under this Lease
results from the merger of
Rayovac Corporation (or the resultant entity of
Rayovac Corporation as hereafter provided) into or with another entity, an
assignment by operation of law, or an assignment to an entity which purchases
all or substantially all of the assets of
Rayovac Corporation (or that of the
subject resultant entity) ("PERMITTED TRANSFEREE"), and (ii) the parent company
of such resultant entity or the parent of such parent (until
44
an entity is reached that is not a subsidiary of any other entity) shall either
assume all of the obligations of
Rayovac Corporation (or the subject resultant
entity) hereunder or become a guarantor of all such obligations (payment and
performance), in either instance, in form and content reasonably acceptable to
Landlord. In all other instances of a assignment of this Lease or the subletting
or all or a part of the Demised Premises, Landlord's prior written consent shall
be required, which consent shall not be unreasonably withheld, conditioned or
delayed, provided there is no material change in the Permitted Uses and Tenant
remains primarily liable for all of the obligations of Tenant hereunder, except
as hereafter provided in this Section 13.1.
In all instances of an assignment of this Lease or subletting of all or any
portion of the Demised Premises, regardless of whether to a Permitted
Transferee, Tenant shall advise Landlord thereof, in writing ("TRANSFER
NOTICE"), not less than thirty (30) days prior to the effective date thereof.
Such notice shall set forth with reasonable specificity the identity of the
proposed assignee or sublessee and proposed terms and provisions of such
assignment or subletting. Landlord may charge Tenant, as a part of Additional
Charges, for any reasonable costs or expenses incurred by Landlord occasioned in
connection with any proposed sublease, assignment, mortgage, pledge, transfer or
other encumbrance or disposal of this Lease, or any interest herein, by Tenant.
In the event Landlord consents to an assignment of all of Tenant's interest
under this Lease to anyone that is not a Permitted Transferee and such assignee
(i) assumes, in writing and in form and content reasonably acceptable to
Landlord, all of Tenant's past, present and future obligations under this Lease,
and (ii) such assignee has had an "investment grade" corporate credit rating for
a continuous period of not less than twelve (12) months prior thereto as
determined by a Rating Agency, then upon the execution and delivery by Landlord
and such assignee of the foregoing assumption, Tenant shall thereafter be
released and discharged from and not be liable for any obligations under this
Lease. However, if at the foregoing time, such assignee has not had such
determined "investment grade" senior debt credit rating for twelve (12)
continuous months, Tenant shall remain liable for all of the obligation of
Tenant under this Lease until such assignee has maintained for twelve (12)
continuous months a senior debt credit rating of "investment grade" determined
as aforesaid.
SECTION 13.2 SUBSEQUENT ASSIGNMENTS. Anything in this Lease to the
contrary notwithstanding, and notwithstanding any consent by Landlord to any
sublease of the Demised Premises, or any portion thereof, or to any assignment
of this Lease or of Tenant's interest or estate in the Demised Premises, or any
other permitted sublease or assignment hereunder, except to a subsequent
Permitted Transferee, no sublessee shall assign its sublease nor further
sublease the Demised Premises, or any portion thereof, and except to a
subsequent Permitted Transferee, no assignee shall further assign its interest
in this Lease or its interest or estate in the Demised Premises, or any portion
thereof, nor sublease the Demised Premises, or any portion thereof, without
Landlord's prior written consent in each instance, which consent may be given or
withheld in Landlord's sole discretion. No such subsequent assignment or
subleasing shall relieve Tenant from any of Tenant's obligations in this Lease.
SECTION 13.3 TRANSFER UPSIDE. For any assignment or subletting of all or
any portion of the Demised Premises to anyone other than a Permitted Transferee
("THIRD PARTY TRANSFER"), Tenant shall pay to Landlord fifty percent (50%) of
any and all compensation (whether in cash or cash
45
equivalent) received by Tenant resulting from such Third Party Transfer, after
Tenant has first recouped from such compensation all commercially reasonable
out-of-pocket costs and expenses paid by Tenant in connection with such Third
Party Transfer for advertising/marketing costs, vacancy or rent concessions for
free rent, Demised Premises improvement expenditures, broker commissions and
attorneys' fees (such net compensation is referred to as "TRANSFER UPSIDE").
SECTION 13.4 RECAPTURE. To the extent any Third Party Transfer is for
the entire balance of the then remaining Term (excluding any Renewal Terms not
then in effect), Landlord may elect, by written notice to Tenant within fifteen
(15) days following Landlord's receipt of written notice from Tenant of Tenant's
intent to pursue prospects for such a Third Party Transfer, to recapture the
entire Demised Premises if the Third Party Transfer is an assignment of this
Lease or so much of the Demised Premises that is the subject of such a Third
Party Transfer subletting. In such event, this Lease, in the instance of an
assignment, and the portion(s) of this Lease pertaining to so much of the
Demised Premises that is proposed to be sublet, shall in each instance terminate
and be of no further force and effect from and after the date that is thirty
(30) days subsequent to the date Landlord exercises its right to recapture as
aforesaid. Notwithstanding the foregoing, any obligations of Landlord or Tenant
hereunder that arose or accrued prior to the date of the foregoing termination
shall survive and remain in full force and effect subsequent to such date of
termination. In the event Landlord fails to so notify Tenant of Landlord's
election to recapture, Landlord's right to recapture in respect to the subject
proposed Third Party Transfer shall, subject to the following, be deemed waived.
If such Third Party Transfer is not consummated within twelve (12) months
following date of Tenant's notice to Landlord to pursue a Third Party Transfer,
then Landlord's rights pursuant to this Section 13.6 shall be reinstated.
SECTION 13.5 INEFFECTIVE ASSIGNMENT. Tenant's failure to comply with all
of the foregoing provisions and conditions of this Article 13 shall (regardless
of whether Landlord's consent is required under this Article 13), at Landlord's
sole option, render any purported assignment or subletting null and void and of
no force and effect.
ARTICLE 14
SUBORDINATION, NON-DISTURBANCE, NOTICE TO MORTGAGEE AND ATTORNMENT
SECTION 14.1 SUBORDINATION. This Lease and all rights of Tenant herein,
and any and all interest or estate of Tenant in the Demised Premises, or any
portion thereof (exclusive of Tenant's interest in Trade Fixtures), shall be
subject and subordinate to the lien of any and all mortgages, deeds of trust,
security instruments, ground or underlying leases or other documents of like
nature, which at any time may be placed upon the Demised Premises, or any
portion thereof, by Landlord, and to any replacements, renewals, amendments,
modifications, extensions or refinancing thereof (herein individually referred
to as a "MORTGAGE," and collectively herein referred to as "MORTGAGES"), and to
each and every advance made under any and all Mortgages. Tenant agrees at any
time hereafter, and from time to time on demand of Landlord, to promptly execute
and deliver to Landlord any and all reasonable instruments, releases or other
documents which may reasonably be required for the purpose of subjecting and
subordinating this Lease to the lien of any and all such Mortgages, and which do
not alter the terms, provisions or conditions of this Lease (hereinafter
individually referred to as a "SUBORDINATION AGREEMENT," and hereinafter
collectively referred to as "SUBORDINATION AGREEMENTS"), provided such
Subordination Agreement(s) is reasonably similar
46
in scope and content to that form attached hereto as EXHIBIT 14.1. So long as
there exists no Default, no such Subordination Agreement shall interfere with,
hinder or reduce Tenant's right to quiet enjoyment under this Lease, nor the
right of Tenant to continue to occupy the Demised Premises, and all portions
thereof, and to conduct its business thereon, all in accordance with the
covenants, conditions, provisions, terms and agreements of this Lease. Each such
Subordination Agreement shall provide for the non-disturbance of Tenant's rights
hereunder, provided that Tenant attorns to the holder of the Mortgage which is
the subject thereof.
SECTION 14.2 MORTGAGEE PROTECTION CLAUSE. Tenant shall deliver to each
and every holder of a Mortgage ("MORTGAGEE"), whose identify and address have
been provided to Tenant, a copy of any notice from Tenant to Landlord in which
Tenant advises Landlord of any act or omission on the part of Landlord which,
after the expiration of the applicable cure period, would constitute a default
by Landlord of its obligations under this Lease. After the expiration of all
applicable cure periods afforded Landlord in respect to such act or omission,
Tenant shall advise the Mortgagee, in writing, of the same as a condition
precedent to Tenant initiating any action under this Lease against Landlord, and
Tenant, for an additional sixty (60) days after the date of Mortgagee's receipt
of such notice, shall allow Mortgagee the option to remedy such act of omission
of the Landlord.
SECTION 14.3 ATTORNMENT. If any Mortgagee shall succeed to the rights of
Landlord under this Lease or to ownership of the Demised Premises, whether
through possession or foreclosure or the delivery of a deed to the Demised
Premises in lieu of foreclosure, then, upon the written request of such
Mortgagee so succeeding to Landlord's rights hereunder, and provided that such
Mortgagee assumes, in writing, the obligations of Landlord hereunder accruing on
and after the date such Mortgagee acquires title to the Demised Premises, Tenant
shall attorn to and recognize such Mortgagee as Tenant's landlord under this
Lease, and shall promptly execute and deliver any and all reasonable instruments
which such Mortgagee may reasonably request to evidence such attornment. In the
event of any other transfer of Landlord's interest hereunder, upon the written
request of the transferee and Landlord, and provided that such transferee
assumes, in writing, the obligations of Landlord hereunder accruing on and after
the date of such transfer, Tenant shall attorn to and recognize such transferee
as Tenant's landlord under this Lease, and shall promptly execute and deliver
any and reasonable instruments which such transferee and Landlord may reasonably
request to evidence such attornment.
ARTICLE 15
INTENTIONALLY LEFT BLANK
ARTICLE 16
TRADE FIXTURES
SECTION 16.1 TRADE FIXTURES. It is the intent of the parties that Trade
Fixtures shall include only those items of Tenant's furniture, equipment,
machinery, partitions and other personal property (including any items which are
affixed to the Demised Premises in a manner that can be readily detached without
material damage to the Demised Premises) which are specifically used by Tenant
in the conduct of its business. Regardless of the foregoing, the Landlord
acknowledges that the items of property set forth on EXHIBIT 16.1 attached
hereto and made a part hereof are Trade Fixtures and can be replaced and
disposed of by the Tenant, in Tenant's sole discretion, except as
47
provided in Section 18.3 hereof. Except for the failure of Tenant to remove all
Trade Fixtures as provided in Section 18.3, Landlord waives any and all claim,
lien or right in and to the Trade Fixtures.
ARTICLE 17
CHANGES AND ALTERATIONS
Tenant shall have the right at any time, and from time to time during the Term,
to make such changes and alterations, structural or otherwise, to the Demised
Premises as Tenant shall deem necessary or desirable in connection with the
requirements of its business, which changes and alterations (other than changes
or alterations of Tenant's Trade Fixtures and equipment) shall be made in all
cases subject to the following conditions, which Tenant covenants to observe and
perform:
(a) No change or alteration shall be undertaken until Tenant shall have
procured and paid for, so far as the same may be required from time
to time, all federal, state and local permits and authorizations of
the various governmental authorities having jurisdiction thereof,
and Landlord agrees to join in the application for such permits or
authorizations whenever such action is necessary, all at Tenant's
sole cost and expense, provided such applications do not cause
Landlord to become liable for any cost, fees or expenses, and
provided, at Landlord's direction, such approval is terminated, at
the option of Landlord, at the expiration of the Term.
(b) In any undertaking of Tenant pursuant to this Article 17, except in
the instance of interior decorating, no change or alteration shall
be undertaken until detailed plans and specifications have been
first submitted to and approved in writing by Landlord, which
approval shall not unreasonably be withheld or delayed. Before
commencement of any such change, alteration, restoration or
construction ("NEW WORK") which in Landlord's reasonable judgment
would alter the Building Systems or structural elements of the
Building, Tenant shall: (i) obtain Landlord's prior written consent
(which consent may be withheld if the change or alteration would,
in the reasonable judgment of Landlord, impair the value or
usefulness to Landlord of the Land or Improvements, or any
substantial part thereof or would unreasonably alter the aesthetics
of the Demised Premises); (ii) guarantee the completion thereof
within a reasonable time thereafter (1) free and clear of all
mechanic's liens or other liens, encumbrances, security interests
and charges, and (2) in accordance with the plans and
specifications approved by Landlord; and (iii) Tenant shall
promptly upon the completion of the New Work deliver to Landlord
two (2) complete sets of "as built" drawings for the New Work.
(c) Any change or alteration shall, when completed, be of such
character as not to reduce the value or utility of the Demised
Premises below its value or utility to Landlord immediately before
such change or alteration, nor shall such change or alteration
reduce the area or cubic content of the Building, nor change the
character of the Demised Premises as to use without Landlord's
express written
48
consent.
(d) All New Work shall be done promptly and in a good and workmanlike
manner and in Compliance with Laws and in accordance with the
orders, rules and regulations of the Board of Fire Underwriters
where the Demised Premises are located, or any other body
exercising similar functions. The cost of any such change or
alteration shall be paid by Tenant so that the Demised Premises and
all portions thereof shall at all times be free of liens for labor
and materials supplied to the Demised Premises, or any portion
thereof. The New Work shall be prosecuted with reasonable dispatch,
delays due to strikes, lockouts, acts of God, inability to obtain
labor or materials, governmental restrictions or similar causes
beyond the reasonable control of Tenant excepted. Tenant shall
obtain and maintain, or cause to be obtained and maintained, at its
or its contractor's sole cost and expense, during the performance
of the New Work, workers' compensation insurance covering all
persons employed in connection with the New Work and with respect
to which death or injury claims could be asserted against Landlord
or Tenant or against the Demised Premised or any interest therein,
together with comprehensive general liability insurance for the
mutual benefit of Landlord and Tenant with limits of not less than
One Million Dollars ($1,000,000.00) in the event of injury to one
person, Three Million Dollars ($3,000,000.00) in respect to any one
accident or occurrence, and Five Hundred Thousand Dollars
($500,000.00) for property damage, and the fire insurance with
"extended coverage" endorsement required by Section 5.1 hereof
shall be supplemented with "builder's risk" insurance on a
completed value form or other comparable coverage on the New Work.
All such insurance shall be in a company or companies authorized to
do business in the State of
Illinois that are reasonably
satisfactory to Landlord. All such policies of insurance or
certificates of insurance shall be delivered to Landlord endorsed
"Premium Paid" by the company or agency issuing the same, or with
other evidence of payment of the premium satisfactory to Landlord,
prior to the commencement of any New Work.
(e) All improvements and alterations (other than Tenant's Trade
Fixtures and equipment) made or installed by Tenant shall
immediately, upon completion or installation thereof, become the
property of Landlord without payment therefor by Landlord, and
shall be surrendered to Landlord on the expiration of the Term
(unless the parties agree to the contrary).
(f) No change, alteration, restoration or new construction shall be in
or connect the Improvements with any property, building or other
improvement located outside the boundaries of the Land and
Expansion Land, nor shall the same obstruct or interfere with any
then existing easement.
(g) If Landlord requires Tenant, in Landlord's reasonable discretion,
to restore or remove such requested change or alteration, Landlord
shall so notify Tenant by written notice, given at the time of
Landlord's approval of such requested change or alteration. If
Landlord so notifies Tenant, then at the expiration of the Term,
49
Tenant shall remove any such change or alteration and, at Tenant's
sole cost and expense, restore any damage caused to the Demised
Premises as a result of such removal. However, if Landlord fails to
so notify Tenant of Landlord's requirement of removal, such changes
or alterations may remain in the Demised Premises at no expense to
Tenant, and at no cost to Landlord. Landlord and Tenant may also
agree, in writing prior to Tenant's change or alteration, that
Tenant shall be allowed to remove such requested change or
alteration, and in the event of such removal, Tenant shall, at its
sole cost and expense, restore any damage caused by such removal.
ARTICLE 18
SURRENDER OF PREMISES
SECTION 18.1 SURRENDER OF POSSESSION. Tenant shall, upon termination of
this Lease for any reason whatsoever, surrender to Landlord the Demised
Premises, together with any and all buildings, structures, fixtures and building
equipment or real estate fixtures upon the Demised Premises and any and all
additions, alterations and replacements thereof (except Tenant's personalty and
Trade Fixtures and that portion of New Work Landlord has required be removed as
provided in Article 17 hereof), in good order, condition and repair, with all
electrical systems, plumbing systems, heating, ventilating and air conditioning
systems, fire protection systems, and other mechanical systems in good working
order and repair, reasonable wear and tear excepted (provided that such
exception shall in no way be deemed to relieve Tenant from its obligations to
make all necessary Tenant Operations, Repairs and Maintenance as and when
required hereunder).
SECTION 18.2 NO SURRENDER WITHOUT ACCEPTANCE. No surrender to Landlord
of this Lease or of the Demised Premises, or any portion thereof, or any
interest therein, prior to the expiration of the Term, shall be valid or
effective unless agreed to and accepted in writing by Landlord (which agreement
Landlord may give or withhold in its sole discretion), and consented to in
writing by all Mortgagees and contract purchasers, if any (which consent may be
given or withheld in their respective sole discretion). Further, no act or
omission by Landlord, or any representative or agent of Landlord, other than
such a written acceptance by Landlord, which is consented to by all Mortgagees
and contract purchasers, if any, shall constitute an acceptance of any such
surrender.
SECTION 18.3 REMOVAL OF TENANT'S PROPERTY; HOLDOVER RENT. Except as
otherwise provided herein, at the expiration of the Term, Tenant shall surrender
the Demised Premises, and shall surrender all keys to the Demised Premises, to
Landlord at the place then fixed for the payment of Base Rent, and shall inform
Landlord of all combinations on locks, safes and vaults within the Demised
Premises, if any, that do not constitute Trade Fixtures. Except as otherwise
provided herein, Tenant shall, at such time, also remove all of its property
(including, without limitation, its personalty and all Trade Fixtures) therefrom
and all New Work placed thereon by Tenant, if so required by Landlord pursuant
to Article 17 hereof. Tenant shall repair any damage to the Demised Premises
caused by such removal, and any and all such property not so removed when
required shall, at Landlord's option, become the exclusive property of Landlord,
or be disposed of by Landlord, at Tenant's cost and expense, without further
notice to or demand upon Tenant.
50
If Tenant fails to surrender possession as required under this Section
18.3, then, for each month, or portion thereof, after the termination of the
Term or of Tenant's rights of possession hereunder, whether by lapse of time or
otherwise, during which Tenant remains in possession of the Demised Premises, or
any portion thereof, after such termination, Tenant shall pay to Landlord, in
addition to Additional Charges, a sum equal to one hundred fifty percent (150%)
of the Base Rent herein provided for the month immediately prior to such
termination. The provisions of this Section 18.3 shall not be deemed to limit or
constitute a waiver of any other rights or remedies of Landlord provided herein
at law or at equity, and Landlord's acceptance of the additional rent in the
event of a holdover by Tenant shall not act as a waiver or limitation on any
such other rights or remedies (including, without limitation, any direct,
indirect or consequential damages).
All property of Tenant not removed on or before the last day of the Term
shall be deemed abandoned. Tenant hereby appoints Landlord as its agent to
remove all property of Tenant from the Demised Premises upon the termination of
this Lease, and to cause the transportation and storage thereof for Tenant's
benefit, all at the sole cost and risk of Tenant. Landlord shall not be liable
for damage, theft, misappropriation or loss thereof, and Landlord shall not be
liable in any manner in respect thereto. Tenant shall pay all costs and expenses
of such removal, transportation and storage. Tenant shall reimburse Landlord,
immediately upon demand, for any expenses incurred by Landlord with respect to
any removal or storage of abandoned property and with respect to restoring the
Demised Premises to good order, condition and repair. Within sixty (60) days
following the date Tenant surrenders the Demised Premises as required pursuant
to this Section 18.3, Landlord shall (i) if there is no Letter of Credit, remit
to Tenant all of the remainder of the Cash Deposit plus all earnings thereon not
previously remitted to Tenant, or (ii) it there is no Cash Deposit, return the
Letter of Credit to Tenant and remit to Tenant the remainder of any unapplied
Draw Proceeds.
ARTICLE 19
MISCELLANEOUS PROVISIONS
SECTION 19.1 RIGHT OF INSPECTION. Upon reasonable advance notice to
Tenant (except for emergency situations), Tenant agrees to permit Landlord and
its authorized representatives to enter upon the Demised Premises at all
reasonable times (other than Peak Periods, as hereafter defined) for the purpose
of inspecting the same and, pursuant to the terms of this Lease, making any of
Tenant's Operations, Repairs and Maintenance obligations as provided in Section
6.2(a) hereof. Nothing shall imply any duty upon the part of Landlord to do any
such work which, under any provision of this Lease, Tenant may be required to
perform, and the performance thereof by Landlord shall not constitute a waiver
of Default in failing to perform the same.
Notwithstanding the foregoing, Landlord acknowledges that Tenant, from time
to time during each calendar year, Tenant has high production periods ("PEAK
PERIODS"), during which an inspection of the Demised Premises (except for
emergency situations) would be unduly burdensome to Tenant. Therefore, if
Landlord requests an inspection and Tenant notifies Landlord that the proposed
inspection would occur during a Peak Period, Landlord agrees to extend
reasonable efforts not to cause an inspection of the Demised Premises during
such Peak Periods.
SECTION 19.2 DISPLAY OF DEMISED PREMISES. Upon reasonable advance notice
to Tenant, Landlord may, at any time during normal business hours during the
Term, enter upon the Demised
51
Premises and exhibit the same for the purpose of mortgaging or selling the same;
provided, however, that during the final twelve (12) months of the then-current
Term (provided Tenant has not then given its Renewal Notice), Landlord shall be
entitled to display the Demised Premises for sale or lease upon twenty-four (24)
hours prior notice, and shall be allowed to post appropriate signage in or about
the Demised Premises, so long as the same does not unreasonably interfere with
Tenant's business.
SECTION 19.3 INDEMNITIES.
(a) TENANT. To the fullest extent allowed by law, except to the extent
the same is otherwise expressly waived by Landlord under this Lease (including,
without limitation, in Section 5.5 hereof), Tenant shall, at all times,
indemnify and save Landlord, and its members, directors, officers, contractors,
subcontractors, sub-subcontractors, Mortgagees, agents and employees, harmless
from and against any and all loss, cost or damage, including, without
limitation, reasonable attorneys' fees, incurred or sustained by any of them
that is brought by third parties against them in connection with (i) the conduct
or management, or from any work or things whatsoever done in or about the
Demised Premises during the Term; (ii) any condition of the Demised Premises
arising from any breach or default on the part of Tenant in the performance of
any covenant or agreement on the part of Tenant to be performed, pursuant to the
terms of this Lease, or (iii) arising from any negligence of Tenant, its
directors, officers, shareholders, contractors, subcontractors,
sub-subcontractors (other than Landlord or its subcontractors or
sub-subcontractors), agents, employees or invitees, or arising from any
accident, injury or damage whatsoever caused to any person or entity during the
Term, in or about the Demised Premises. The indemnity obligations of Tenant
under this Section 19.3 which relate directly or indirectly to death, bodily or
personal injury or property damage, shall be insured by contractual liability
endorsement on Tenant's policies of insurance required under the provisions of
Article 5 hereof. Anything in this Section 19.3(a) to the contrary
notwithstanding, Tenant's indemnification obligations as aforesaid shall not
apply to any claims, costs, liabilities, actions and damages which arise as a
result of (1) the negligence or wrongful acts or omissions of Landlord (or its
members, partners, directors, officers, shareholders, contractors,
subcontractors, sub-subcontractors, agents or employees); or (2) the failure of
Landlord to comply with a provision of this Lease or the Work Letter.
(b) LANDLORD. To the fullest extent allowed by law, except to the
extent the same is otherwise expressly waived by Tenant under this Lease
(including, without limitation, in Section 5.5 hereof), Landlord shall at all
times shall indemnify and save Tenant, and its directors, officers,
shareholders, contractors, subcontractors, sub-subcontractors, agents and
employees, harmless from and against any and all loss, cost or damage,
including, without limitation, reasonable attorneys' fees, incurred or sustained
by any of them that is brought by third parties against any of them in
connection with the conduct of or the failure to conduct any of Landlord's
obligations hereunder or under the Work Letter, or any negligence in the
performance thereof. Anything in this Section 19.3(b) to the contrary
notwithstanding, Landlord's indemnification obligations as aforesaid shall not
apply to any claims, costs, liabilities, actions and damages which arise as a
result of (i) the negligence or wrongful acts or omissions of Tenant (or its
partners, directors, officers, shareholders, contractors, subcontractors,
sub-subcontractors (other than Landlord or its contractors, subcontractors or
sub-subcontractors), agents, employees or invitees); or (ii) the failure of
Tenant to comply with a provision of this Lease.
52
SECTION 19.4 NOTICES. All notices, demands and requests which may be or
are required to be given, demanded or requested by any party to the other shall
be in writing. All transmittals by Landlord to Tenant shall be delivered by
private messenger, or sent by United States registered or certified mail,
postage prepaid, or by Federal Express (or similar overnight courier service),
or by facsimile transmission, addressed to Tenant, Landlord or Developer as
follows:
If to Tenant:
Rayovac Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
With a Copy to: ▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
If to Landlord or
Developer: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.▇.
c/o Higgins Development Partners, L.L.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
With Copy of notice
of Landlord default to: Pritzker Realty Group
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: J. ▇▇▇▇▇ ▇▇▇▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
With an additional
Copy to: O'Brien, ▇'▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
53
or at such other place as Tenant or Landlord may from time to time designate by
written notice to the other parties. All notices, demands and requests shall be
effective upon being deposited in the United States mail or delivered to the
overnight courier in the manner prescribed above or by facsimile transmission,
provided a copy thereof sent the same day by first class mail, postage prepaid.
However, the time period within which a response to any such notice, demand or
request must be given shall commence to run from the date of receipt by the
addressee thereof as shown on the return or courier receipt of the notice,
demand or request or upon the date evidencing transmittal and receipt of
facsimile transmission. Rejection or other refusal to accept or the inability to
deliver because of changed address of which not notice thereof was given shall
be deemed to be receipt of the notice, demand or request as of the date of such
rejection, refusal or inability to deliver. Notwithstanding the foregoing
billing and invoicing by Landlord may be sent to Tenant by United States first
class mail.
SECTION 19.5 AUTHORIZED INDIVIDUALS. Whenever in or in connection with
this Lease, the consent or approval of any party hereto is required or desired
(including, without limitation, in connection with the approval of components of
the Final Base Building Plans and Specifications and T/I Plans and
Specifications), any one or more of the following named persons shall be
authorized to act on behalf of, and bind, the parties as set forth below, until
any party shall deliver written notice to the others of the termination of such
authorization:
For Landlord: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
For Tenant: ▇▇▇▇ ▇▇▇▇▇▇▇▇ and any one of ▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇▇ ▇. ▇▇▇▇▇
At any time or from time to time, any party may add or delete names of
authorized individuals to the aforesaid list, by providing written notice of
such additions to the other parties hereto.
SECTION 19.6 QUIET ENJOYMENT. Landlord covenants and agrees that Tenant,
upon paying the Base Rent and the Additional Charges, and upon observing and
keeping the covenants, agreements and conditions of this Lease on its part to be
kept, observed and performed, shall lawfully and quietly hold, occupy and enjoy
the Demised Premises during the Term without hindrance or molestation.
SECTION 19.7 LANDLORD AND SUCCESSORS. The term "Landlord," as used in
this Lease, so far as covenants or obligations on the part of Landlord are
concerned, shall be limited to mean and include only the Landlord under the this
Lease, and in the event of any transfer(s) or conveyance(s), the grantee or
successor of same, and the grantor or assignor shall be automatically freed and
relieved, from and after the date of such transfer or conveyance, of all
liability with respect to any covenants or obligations on the part of Landlord
contained in this Lease, the performance of which first accrues on or after the
date of such transfer or conveyance. It is intended that the covenants and
obligations contained in this Lease on the part of Landlord shall, subject to
the aforesaid, be binding on Landlord, its successors and assigns, only during
and in respect of their respective successive periods as the same is in title to
the Demised Premises.
54
SECTION 19.8 LIMITATION ON LANDLORD'S LIABILITY. Tenant acknowledges and
agrees that (a) Tenant is entitled only to look to Landlord's interest in the
Demised Premises for recovery of any judgment from Landlord; and (b) Landlord
(and if Landlord is a partnership, its partners, whether general or limited, and
if Landlord is a limited liability company, its members, managers or officers,
and if Landlord is a corporation, its directors, officers or shareholders) shall
never be personally liable for any personal judgment or deficiency decree or
judgment against it. Notwithstanding the foregoing, the obligations and
liability of the Developer pursuant to Section 19.24 hereof shall not be deemed
limited, reduced or diminished as a result of the foregoing limitation on
Landlord's liability.
SECTION 19.9 ESTOPPELS. Tenant shall, without charge, at any time and
from time to time, within ten (10) business days after written request by
Landlord, certify by written instrument in substantially the form set forth as
EXHIBIT 19.9 attached hereto and made a part hereof, duly executed, acknowledged
and delivered to any actual or proposed Mortgagee, assignee or purchaser, or to
any other person or entity dealing with Landlord or the Demised Premises as to
the matters set forth in EXHIBIT 19.9 ("ESTOPPEL LETTER"). Landlord shall,
without charge, at any time and from time to time, within ten (10) business days
after written request by Tenant, certify by written instrument in substantially
the form set forth in EXHIBIT 19.9, duly executed, acknowledged and delivered to
any proposed lender, purchaser of Tenant's stock or assets, or any other person
dealing with Tenant or the Demised Premises as to the matters set forth in
EXHIBIT 19.9, provided that "Landlord" shall be substituted for "Tenant" and
"Tenant" shall be substituted for "Landlord" as is logical and reasonable.
SECTION 19.10 SEVERABILITY; GOVERNING LAWS. If any covenant, condition,
provision, term or agreement of this Lease shall, to any extent, be held invalid
or unenforceable, the remaining covenants, conditions, provisions, terms and
agreements of this Lease shall not be affected thereby, but each covenant,
condition, provision, term or agreement of this Lease shall be valid and in
force to the fullest extent permitted by law. This Lease shall be construed and
be enforceable in accordance with the laws of the State of
Illinois, without
regard to its conflict of laws rules.
SECTION 19.11 BINDING EFFECT. The covenants and agreements herein
contained shall bind and inure, respectively, to the benefit of Landlord, its
successors and assigns, Developer, and its successors and assigns, and Tenant,
and its permitted successors and assigns.
SECTION 19.12 CAPTIONS. The caption of each Article and Section of this
Lease is for convenience of reference only, and in no way defines, limits or
describes the scope or intent of such Article or Section of this Lease.
SECTION 19.13 LANDLORD - TENANT RELATIONSHIP. This Lease does not create
the relationship of principal and agent, or of partnership, joint venture or any
other association or relationship, between or among one or more of Landlord,
Developer and Tenant, the sole relationship between Landlord and Tenant being
that of landlord and tenant, and the relationship between Developer and Tenant
being that of servant and master. Further, except as otherwise provided herein,
no person or entity shall be entitled to claim any rights as a third party
beneficiary hereof.
55
SECTION 19.14 LANDLORD'S PROPERTY. Tenant acknowledges that the Demised
Premises will be the property of Landlord, and that Tenant will have only the
right to possession and use thereof upon the covenants, conditions, provisions,
terms and agreements set forth in this Lease.
SECTION 19.15 SURVIVAL. All obligations of the parties hereunder
(together with interest on Tenant's monetary obligations at the Maximum Rate of
Interest) accruing prior to expiration of the Term shall survive the expiration
or other termination of this Lease.
SECTION 19.16 CLAIMS. Any claim which Tenant may have against Landlord or
Landlord may have against Tenant for default in the performance of any of their
respective obligations herein contained to be kept and performed shall be deemed
waived unless (a) such claim is asserted by written notice thereof to Landlord
or Tenant, as the case may be within one hundred eighty (180) days after the
later of (i) the commencement of the alleged default or of the accrual of the
cause of action, or (ii) the date the claiming party had actual knowledge of the
default or fact on which the claim is based, and (b) unless suit is brought
thereon within one (1) year after the later of (i) the accrual of such cause of
action, or (ii) the date the claiming party had actual knowledge of the default
or fact on which the cause of action is based.
SECTION 19.17 REASONABLENESS. Except as otherwise provided herein, any
consent, action or inaction required to be given (or which may be withheld),
done or not done, by any of the parties hereto shall be given (or not withheld),
done or not done in a commercially reasonable fashion.
SECTION 19.18 REAL ESTATE BROKER. Tenant represents that Tenant has not
dealt with any broker, finder or other representative in connection with this
Lease, and that no broker (or other person or entity) negotiated this Lease or
is entitled to any commission in connection herewith. Tenant shall indemnify and
save Landlord, and its members, directors, officers, contractors,
subcontractors, sub-subcontractors, Mortgagees, agents and employees, harmless
from and against any and all loss, cost or damage, including, without
limitation, reasonable attorneys' fees, incurred or sustained by any of them in
connection with claims made by any broker or finder claiming by, through or
under Tenant for a commission or fee in connection with this Lease.
Landlord represents that Landlord has not dealt with any broker, finder or
other representative in connection with this Lease, and that no broker (or other
person or entity) negotiated this Lease or is entitled to any commission in
connection herewith. Landlord shall indemnify and save Tenant, and its
directors, officers, shareholders, contractors, subcontractors,
sub-subcontractors, agents and employees, harmless from and against any and all
loss, cost or damage, including, without limitation, reasonable attorneys' fees,
incurred or sustained by any of them in connection with any claims made by any
other broker or finder claiming by, through or under Landlord for a commission
or fee in connection with this Lease.
SECTION 19.20 DELIVERY OF CORPORATE DOCUMENTS. During the period that
Tenant or any Permitted Transferee is a publicly traded company, without charge
to Landlord during the Term, Tenant shall deliver to Landlord annually, promptly
after available, Tenant's 10-K's and promptly following availability during each
Lease Year Tenant's 10-Q's in the form the same have been filed with the federal
Securities and Exchange Commission.
56
If Tenant or any Permitted Transferee ceases to be a publicly traded
company, then not more than once each calendar year during the Term, within ten
(10) days after written request by Landlord, Tenant shall deliver to Landlord in
connection with any proposed BONA FIDE sale or mortgage of the Demised Premises,
copies, certified by Tenant's chief financial officer, of Tenant's balance
sheet, income statement and statement of sources and uses for Tenant's then most
recently ended fiscal year, and Tenant's immediately preceding two (2) fiscal
years ("FINANCIAL STATEMENTS"). In addition, if Tenant or a Permitted Transferee
ceases to be a publicly traded company, upon the written request of Landlord to
Tenant, Tenant shall deliver to Landlord Tenant's most recent interim or annual
Financial Statements, as applicable.
SECTION 19.21 EXHIBITS; RIDER PROVISIONS. Any Exhibits attached hereto
are an integral part hereof, and this Lease shall be construed as though such
Exhibits were set forth in full herein. In the event that there are one or more
Riders attached to this Lease, then the provisions of such Rider(s) shall take
precedent over any conflicting provisions contained herein.
SECTION 19.22 ATTORNEYS' FEES. In the event of any litigation or judicial
action in connection with this Lease or the enforcement hereof, the prevailing
party in any such litigation or judicial action shall be entitled to recover all
costs and expense of any such judicial action or litigation (including, without
limitation, reasonable attorneys' fees) from the other party.
SECTION 19.23 TIME IS OF THE ESSENCE. Subject to the required notice and
applicable cure periods contained in this Lease, time is of the essence with
respect to the performance of every provision of this Lease in which time of
performance is a factor.
SECTION 19.24 DEVELOPER'S LIABILITIES. Until the last to occur
("DEVELOPER'S GUARANTY TERMINATION") of (i) the Substantial Completion of the
Initial Improvements, (ii) all Punch List work required of Landlord pursuant to
the provisions of the Work Letter have been fully completed, and (iii) all
Warranty Work required of the Landlord pursuant to the provisions of the Work
Letter for the Initial Improvements have been fully completed, Developer
unconditionally guaranties the full and timely performance and observance of all
the payment and performance obligations and all other covenants, conditions and
agreement to be performance by Landlord under the terms of this Lease
("GUARANTEED OBLIGATIONS"). If the Landlord does not perform the Guaranteed
Obligations, Developer unconditionally and irrevocably covenants and agrees that
it shall, at its sole cost and expense, pay all costs and expenses of and
discharge all of the Guaranteed Obligations. Tenant may proceed to enforce the
provisions of this Section 19.24 against the Developer in the first instance
without first proceeding against Landlord or any other person and without first
resorting to any self-help rights or privileges of Tenant hereunder or to any
other remedies. Developer hereby waives and agrees not to assert or take
advantage of any defense based upon any modification or amendment of this Lease,
legal disability of Landlord, or any discharge or limitation of liability of
Landlord, or any restraint or stay applicable to actions against Landlord
(except to the extent they are a Permitted Delay), whether such disability,
discharge, limitation, restraint or stay is consensual, or by order of a court
or other governmental authority, or arising by operation of law or any
liquidation, reorganization, receivership, bankruptcy, insolvency or
debtor-relief of Landlord.
57
SECTION 19.25 LANDLORD'S WAIVER OF MODIFICATIONS. Landlord hereby waives
and releases during the Term the right to make any alterations or modifications
to the Demised Premises, without in each instance first obtaining Tenant's prior
written consent, which consent shall not be unreasonably conditioned or delayed
if such alteration or modification does not adversely interfere with Tenant's
Permitted Use and does not increase or alter the scope or cost of Tenant's
Operation, Repairs and Maintenance obligations.
SECTION 19.26 MEMORANDUM OF LEASE. In the event Tenant desires to record
a Memorandum of this Lease, Tenant shall prepare the same and deliver it to
Landlord for its review and approval. Landlord shall not unreasonably delay in
or withhold its approval, execution and delivery of a Memorandum of this Lease,
provided such Memorandum discloses only the Term and other non-financial
provisions of this Lease reasonably acceptable to Landlord.
SECTION 19.27 TENANT'S EXCLUSIVE POSSESSION. Tenant shall have the
exclusive right of possession of the Demised Premises during the Term, except
for Landlord's (i) performance of those portions of Tenant's Operation, Repair
and Maintenance Tenant failed to fully or timely perform, and Landlord's right
of inspection as provided in Section 19.1 hereof, (ii) rights pursuant to
Section 10.3 hereof, (iii) obligations pursuant to Articles 11 and 12 hereof,
and (iv) right to display the Demised Premises as provided in Section 19.2
hereof.
58
THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK
59
IN WITNESS WHEREOF, each of the parties hereto has caused this Lease to be
duly executed as of the day and year first above written.
Landlord: Tenant:
200 CORPORATE DRIVE, L.L.C.,
RAYOVAC CORPORATION,
a Delaware limited liability company a Wisconsin corporation
By: HDP Asset Co., L.L.C., a Delaware
limited liability company, a Member
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------ -------------------------------
Its: Authorized Representative Its: President and Chief Financial
Officer
-------------------------------
Developer:
▇▇▇▇▇▇▇ DEVELOPMENT PARTNERS, L.L.C.,
A Delaware limited liability company
By: /s/ ▇.▇. ▇▇▇▇▇▇▇
------------------------------------
Its: Chairman
------------------------------------
SCHEDULE OF EXHIBITS
Exhibit A -- Legal Description of Land
Exhibit 1.6(a) -- Form of Letter of Credit
Exhibit 2.1 -- Work Letter
Appendix 2.1(2) - Schedule of Approved Plan Components
Appendix 2.1(4-A) - Schedule of New Plan Components
Appendix 2.1(4-B) -- Initial Improvements Final Plans and Specifications
(to come)
Appendix 2.1(7-A) -- Budget
Appendix 2.1(7-B) -- Schedule of Tenant Funded Tenant Improvements
(Mandatory and Optional)
Appendix 2.1(8-A) -- Schedule of Scope and Lump Sum Cost for Contractor
Self Performed Work
Appendix 2.1(8-B) -- List of Construction Subcontractors Exempt from
Bidding
Appendix 2.1(11) -- Fit-Up Work
Exhibit 2A.4 -- Expansion Plans (to come)
Exhibit 14.1 -- Subordination, Non-Disturbance and Attornment Agreement
Exhibit 16.1 -- Recognized Trade Fixtures
Exhibit 19.9 -- Estoppel Letter