EXHIBIT 10.23
CAMPUS LEASE
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[Chesterfield Village Campus]
THIS CAMPUS LEASE ("Lease") is made and entered into
effective as of September 1, 2000, by and between PHARMACIA CORPORATION, a
Delaware corporation ("Landlord") and MONSANTO COMPANY, a Delaware
corporation ("Tenant").
WITNESSETH:
ARTICLE 1
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Premises
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1.1 Lease of Premises. Landlord hereby leases to Tenant,
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and Tenant hereby leases from Landlord, for the term and subject to the
covenants hereinafter set forth, to all of which Landlord and Tenant hereby
agree, the various office, laboratory and other space(s) in the building(s)
outlined on Exhibit A-1, attached hereto and made a part hereof (the
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"Premises"). The parties agree that based on historical measuring standards
used by Monsanto Company the Premises currently contains approximately
215,400 total square feet (more or less) of usable building floor area
located on the real property (including land and building(s)) shown on the
site plan attached hereto as Exhibit A-2, and made a part hereof (the
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"Property"). The parties agree that based on historical measuring standards
used by Monsanto Company the Property currently contains approximately
423,861 total square feet (more or less) of usable building floor area
consisting of Landlord's corporate campus which is located generally in
Chesterfield, Missouri. Based upon the foregoing measurements, currently
"Tenant's Percentage Share", which is the ratio of floor area in the
Premises to total floor area in the Property is, as of the Commencement
Date, agreed to be Fifty and 82/100 percent (50.82%). With respect to the
foregoing measurements based on such historical measuring standards, those
measurements are approximate and are subject to revision by the parties to
the extent more exact measurements become available. Either Landlord or
Tenant may, from time to time on or after April 1, 2002, at its sole cost
(unless otherwise provided below), cause the rentable and usable square feet
of floor area of the Premises or Property to be measured by a qualified
architect or engineer approved by Landlord and Tenant (such approval not to
be unreasonably withheld or delayed) in accordance with ANSI and BOMA
standards, and such measurement shall be used to calculate rent and to
calculate Tenant's Percentage Share, based on rentable square feet. Further,
the parties agree to cause the rentable and usable square feet of building
floor area in the Premises and on the Property to be measured in accordance
with BOMA/ANSI standards no later than March 31, 2002 and such calculation
for rentable square feet shall be used for purposes of determining Tenant's
Percentage Share from and after April 1, 2002; and until the later of (i)
April 1, 2002, or (ii) the date such measurement is completed Monsanto's
historical method of measuring space shall be used. Landlord and Tenant
recognize and agree that during the term, the parties may add to, subtract
from or relocate portions of the Premises in accordance with the express
terms hereof and in connection therewith, the parties shall reasonably and
equitably adjust the Tenant's Percentage Share by measuring the reconfigured
Premises and/or Property (i) in accordance with ANSI and BOMA standards if
such adjustment is made after March 31, 2002, and (ii) based on historical
measuring standards used by Monsanto Company if such adjustment is made
before March 31, 2002. Such measurement shall be performed by a qualified
architect or engineer approved by Landlord and Tenant (such approval not to
be unreasonably withheld or delayed) and the cost thereof shall be paid by
the party who exercised a right hereunder that caused the change in
configuration which necessitated the re-measurement. The parties acknowledge
that any remeasuring of Premises or Property may change the rent, Tenant's
Percentage Share, parking allocations or other matters and may require
modification to Exhibits to this Lease; and the parties agree to execute an
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amendment hereto reflecting any such change or modifications upon the
request of either party. Without limiting the foregoing, if Tenant exercises
its right, pursuant to section 7.5 hereof, to make the Expansion Area part
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of the Premises, Tenants Percentage Share shall be increased proportionately
on the basis of the floor area of the building to be constructed on the
Expansion Area. During the term of this Lease, Tenant shall have the
nonexclusive right, in common with Landlord and other tenants of the
Property, to use, only for their intended purposes, the common areas (such
as driveways, sidewalks, parking areas, loading areas and access roads) in
the Property. Tenant's parking rights are subject to section 15.10 hereof.
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Landlord and Tenant have designated some, but not all, of the common areas
as such on Exhibits A-1 and A-2. Landlord shall have the right from time to
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time to change the size, location, configuration or use of any such common
areas, construct additional improvements, buildings or facilities in any
such common areas, or close any such common areas provided that such
modifications do not change the fundamental character of the collective
common areas and do not have a material adverse impact on Tenant's use and
enjoyment of the Premises for the purposes expressly permitted herein.
Landlord and Tenant recognize that Tenant is intended by both parties to be
a primary occupant, along with Landlord, of the Property.
1.2 Migration. Landlord and Tenant intend to reconfigure
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the Premises through a migration ("Migration") by Tenant from the Premises
as currently configured toward a plan ("Migration Plan") to be attached
hereto as Exhibit B and made a part hereof. In the event that Exhibit B has
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not been completed by the time this Lease is executed, Landlord and Tenant
agree to use reasonable and good faith efforts to complete a draft of the
Migration Plan on or before July 31, 2001 and shall complete the final
Migration Plan on or before September 30, 2001 and Exhibit B shall then be
incorporated herein as if it had been attached upon execution hereof. Both
Landlord and Tenant shall reasonably cooperate with respect to the
completion and attachment of Exhibit B. The Migration Plan shall include (i)
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temporal benchmarks for completion of portions of the Migration Plan and
final completion of the Migration Plan and (ii) budgets and allocations of
the cost of Migration. Tenant shall relocate its operations by moving into
the areas shown on the Migration Plan and by surrendering and vacating those
areas of the current Premises which are not included in the future migrated
premises ("Migrated Premises") as shown on the Migration Plan. The Migration
may contemplate a reduction in Premises rather than merely a relocation of
Premises in certain instances. Upon vacating any portion of the original
Premises pursuant to the Migration Plan, that vacated portion of the
original Premises shall no longer be deemed part of the Premises for all
purposes hereof, and upon moving into a portion of the Migrated Premises,
that portion of the Migrated Premises shall be deemed part of the Premises
for all purposes hereof. Following any change in the Premises pursuant to
the Migration Plan, the parties shall execute a lease amendment for the
purpose of altering the definition of Premises, adjusting the Base Rent,
adjusting Tenant's Percentage Share and providing for such other adjustments
as reasonably necessary. The parties shall work in good faith to accomplish
the Migration in a way that does not unnecessarily interfere with either
party's operations on the Property and to accordingly amend this Lease.
1.3 Relocation. In addition to the adjustments to the Premises
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required by the Migration Plan, Landlord may at any time during the term
(and any number of times during the term), by written notice to Tenant,
elect, subject to Tenant's approval (which approval shall not be
unreasonably withheld or delayed), to relocate any portions of the Premises
to new premises on the Property. The foregoing relocation right shall not
apply to certain portions of the Premises described as follows: Building GG
and Expansion Area. Tenant may not refuse to consent in writing to any such
relocation proposed by Landlord if the proposed relocated premises (i) shall
be reasonably comparable in size; (ii) shall be comparable in physical
characteristics relating to use (i.e., laboratory space or office space);
(iii) shall be comparable in amenities; (iv) shall reasonably accommodate
the specific requirements of Tenant related to its then current use and
activity of that particular portion of the Premises proposed for relocation,
and (v) shall not separate concentrations of space within the Premises that
are currently adjacent and in which occupants work interactively into
separate locations that are not reasonably proximate in location to each
other. Tenant agrees that at the time Landlord makes an election to relocate
the Premises and seeks Tenant's approval, Landlord may contemplate
performing certain finish work or alterations to the proposed relocation
space and in determining whether the proposed relocation space satisfies the
foregoing criteria, Tenant shall review plans for such finish work and
alterations and may not refuse approval if the proposed relocation space, as
it is to be altered or finished, would satisfy the criteria; provided that
such alterations shall be made to the proposed relocation space before
Tenant is required to move. Landlord shall pay the costs of any alterations
or finish to the relocation space and all other reasonable, third party
costs incurred by Tenant in moving to the relocation space. Landlord and
Tenant shall cooperate to cause the relocation to be accomplished in a way
which minimizes cost and disruption to the parties' operations on the
Property. Tenant shall complete the relocation and vacate and surrender the
relocated portion of the Premises in accordance herewith within a reasonable
period of time (as determined hereinbelow) after notice from Landlord that
the relocation space is ready for Tenant's use and occupancy. Within thirty
(30) days after Landlord delivers written notice to Tenant of a required
relocation, Tenant shall notify Landlord in writing of the amount of time
Tenant believes is reasonable to accomplish the relocation after the
relocated space is ready for
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Tenant's use and occupancy. Such time period shall be deemed to be the
reasonable period of time referred to hereinabove to accomplish the
relocation unless Landlord disputes the time period selected by Tenant.
After the relocation has been accomplished, the Premises shall no longer
include the relocated space but shall include the new relocation space.
Either Landlord and/or Tenant may elect under section 1.1, to measure the
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reconfigured Premises, at Landlord's expense, at such time to recalculate
Base Rent and Tenant's Percentage Share. Landlord and Tenant shall execute a
written amendment to this Lease adjusting the Exhibits hereto which describe
the Premises, the calculation of rent, Tenant's Percentage Share and
providing for such other adjustment as reasonably necessary.
ARTICLE 2
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Term
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2.1 Term of Lease.
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(a) The term of this Lease shall be for fifteen (15)
years, subject to extension or termination as specified herein, which shall
commence as of September 1, 2000 (the "Commencement Date") and, unless
sooner terminated or extended as hereinafter provided, shall end on the date
immediately preceding the fifteenth (15th) anniversary of the Commencement
Date (the "Expiration Date").
(b) Tenant acknowledges that Tenant has previously owned
and occupied the Premises and the Property, and Tenant is familiar with the
condition of the Premises and the Property, the Premises and the Property
are suitable for Tenant's purposes and the condition of the Premises and the
Property is acceptable to Tenant. Except with respect to (i) Landlord's
obligations expressly set forth in this Lease and (ii) Landlord's
obligations described in subparagraph (c) of this section 2.1 that are to be
governed by the Separation Agreement, as defined in subparagraph (c) of this
section 2.1, Landlord shall have no obligation to construct or install any
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improvements in the Premises or the Property or to remodel, renovate,
recondition, alter or improve the Premises or the Property, and subject to
such obligations, Tenant accepts the Premises "as is" on the Commencement
Date.
(c) Landlord and Tenant acknowledge (i) that they are
parties to a certain Separation Agreement, dated September 1, 2000 (the
"Separation Agreement") regarding the receipt and assumption by Monsanto
Company, Tenant hereunder, of certain assets and liabilities from Pharmacia
Corporation, Landlord hereunder, and that (ii) the Separation Agreement
contains certain indemnity rights and obligations between Landlord and
Tenant that are to apply to the parties' relationship in connection with the
Property, except to the extent this Lease includes provisions that are
intended to replace such indemnity provisions of the Separation Agreement.
The parties hereby agree that nothing in this Lease is intended to replace
the indemnity provisions of the Separation Agreement to the extent they
apply to rights and obligations arising out of or related to events that
occurred or conditions that existed prior to the Commencement Date of this
Lease. The parties further agree that this Lease is intended to replace the
indemnity provisions of the Separation Agreement to the extent such
provisions of the Separation Agreement relate to the Property and apply to
rights and obligations arising out of or related to events that occur or
conditions that come into existence after the Commencement Date of this
Lease.
2.2 Extension Rights.
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(a) Tenant may extend the term hereof, provided an Event
of Default has not occurred and is continuing both at the time of notice of
extension and at the time of extension, for two (2) successive periods of
five (5) years each upon all the same terms as provided herein, except the
number of remaining extension periods. Notice of this extension shall be
delivered by Tenant to Landlord no later than one (1) year prior to the
expiration of the then current term and if not delivered within such time
period, the extension options specified in this section 2.2(a) of this Lease
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shall expire. Any notice of extension under this section 2.2(a) shall be
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irrevocable by Tenant.
(b) Tenant may extend the term hereof at any time
during the initial fifteen (15) year term, provided an Event of Default has
not occurred and is continuing both at the time of notice of extension and
at the time of extension and provided Tenant has completed a "Major Capital
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Improvement" to the Premises, for one (1) period of ten (10) years. Notice
of this extension shall be delivered by Tenant to Landlord no later than
one (1) year prior to the expiration of the then current term and if not
delivered within such time period, the extension option specified in this
section 2.2(b) shall expire. Any notice of extension under this section
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2.2(b) shall be irrevocable by
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Tenant. As used in this section 2.2, the term "Major Capital Improvement"
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shall mean the construction of any real property improvement on the
Premises, the cost of which (including design, engineering and architectural
fees but excluding the cost of any equipment that Tenant may remove at the
termination of this Lease, personal property and trade fixtures and the
installation thereof) exceeds Ten Million Dollars ($10,000,000.00).
(c) Tenant shall have the right, provided an Event of
Default has not occurred and is continuing, both at the time of notice of
extension and at the time of extension and provided Tenant has elected to
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add the Expansion Area, as defined in section 7.5 hereof, to the Premises
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and has constructed a building on the Expansion Area and provided Tenant has
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not vacated more than thirty percent (30%) of the total floor area of any
buildings situated on its Expansion Area and GG Building, to extend the term
of this Lease up to twelve (12) times for successive periods of five (5)
years each. Upon the exercise by Tenant of the first such extension pursuant
to this section 2.2(c), the parties shall execute an amendment hereto which
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shall, upon the effective date of such extension term, reduce the definition
of Premises so that Tenant shall only have the right to occupy, and the
Premises shall only include, the Expansion Area and GG Building and which
shall provide for a proportionate adjustment of Tenant's Percentage Share
and such other adjustment as reasonably necessary. These extension rights
granted in this section 2.2(c) must be exercised by written notice delivered
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by Tenant to Landlord no later than one (1) year prior to the expiration of
the then current term, and if not delivered within such time period, all
extension options in this Lease shall expire. Any notice of extension under
this section 2.2(c) shall be irrevocable by Tenant.
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(d) If any extension right hereunder is exercised by
Tenant and after such exercise but prior to the first day of the extension
period an uncured Event of Default has occurred and is continuing, Tenant's
exercise of its extension rights as well as all extension rights hereunder
shall be, upon Landlord's election, void and upon such election by Landlord
this Lease shall automatically expire at the end of the then current term.
(e) The limitations on Tenant's ability to exercise the
extension rights under this section 2.2 are subject to section 15.15 hereof.
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2.3 Early Termination.
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(a) Tenant may, by written notice delivered no less
than three (3) years in advance, terminate this Lease. Such termination
shall be effective on the date specified in the notice which shall not be
less than three (3) years from the date of delivery of the notice. The
notice of election to terminate shall be irrevocable.
(b) Upon Tenant's election to terminate pursuant to
section 2.3(a), Landlord may accept the Premises at surrender in its then
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current condition (subject to Tenant's obligations to not commit waste or
cause any damage), broom clean, or Landlord may require Tenant to restore
all or part of the Premises to the condition of the Premises on the
Commencement Date of this Lease or, if Tenant can not practically do so,
then to some other white box, marketable condition reasonably requested by
Landlord. In addition, (i) Landlord may require any portions of the Premises
which are configured or improved in a way which is specific to Tenant's use
and/or operations to be altered and remodeled by Tenant to a white box,
marketable condition reasonably agreed to by Landlord and (ii) if Tenant has
constructed any buildings or other improvements on the Property, Landlord
may accept such improvements and buildings upon surrender, or Landlord may
require Tenant to elect either to (aa) modify the building or improvements
(as reasonably specified by Landlord), or (bb) raze the buildings and
improvements, clear all debris, render the site safe and sightly, provide
documentation reasonably required by Landlord that the Premises is in
compliance with all laws, and restore, to the extent reasonably required by
Landlord, any prior landscaping, sod, parking areas, drives or other
improvements which existed prior to Tenant's construction. To the extent any
building or other improvement is under construction by Tenant at the time
Tenant elects to terminate under this section 2.3, Tenant shall, at Tenant's
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election, either (i) complete such construction in accordance with plans
approved by Landlord (such approval not to be unreasonably withheld) or (ii)
raze the building and improvement, clear all debris, render the site safe
and sightly, provide documentation reasonably requested by Landlord that the
Premises is in compliance with all laws, and to the extent reasonably
required by Landlord, restore any prior landscaping, sod, parking areas,
drives or other improvements which existed prior to Tenant's construction.
If, pursuant to the foregoing, Landlord elects not to accept any portion of
the Premises in its then as is condition, Landlord shall so advise Tenant in
writing, and shall specify in writing the portions of the Premises that
Landlord desires that Tenant modify in accordance with the foregoing
standards, all within one hundred twenty (120) days after Tenant delivers
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written notice to Landlord which notice includes a statement that Landlord
has one hundred and twenty (120) days from the date of the notice to inform
Tenant pursuant to section 2.3(b) of its requirement that the Premises be
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modified.
(c) All of the foregoing work which Landlord may
require Tenant to perform upon Tenant's notice of election to terminate
(collectively, "Early Termination Surrender Work") shall be in addition to
the normal surrender requirements under section 6.3 hereof, and shall be
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fully completed by Tenant by the effective date of termination.
(d) If Tenant fails to complete the Early Termination
Surrender Work and vacate the Premises by the effective date of termination,
then Landlord may elect one or more of the following remedies: (i) obtain an
injunction to force Tenant to complete the Early Termination Surrender Work;
(ii) damages; (iii) specific performance; (iv) perform or complete the Early
Termination Surrender Work and recover the total cost thereof, including
interest on unpaid amounts as provided for in section 3.4 hereof, from
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Tenant; (v) treat Tenant as a holdover tenant, in which event Tenant shall
pay to Landlord for each day until the Early Termination Surrender Work is
complete, one-fifteenth (1/15) of the most recent monthly rent plus
one-fifteenth (1/15) of the most recent amount of additional monthly rent
under section 3.1(b) hereof and/or (vi) any other remedy available at law or
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in equity. The holdover rent due hereunder shall apply to all of the
Premises if Tenant fails to vacate or properly surrender twenty-five percent
(25%) or more of the usable square footage of floor area comprising the
Premises, but shall only apply to that pro rata portion of the Premises
which Tenant fails to vacate or properly surrender if Tenant fails to vacate
or properly surrender less than twenty-five percent (25%) of the usable
square footage of floor area comprising the Premises. If Tenant fails to
complete the Early Termination Surrender Work and vacate the Premises by the
effective date of termination and either (i) Tenant continues to occupy with
persons twenty-five percent (25%) or more of the usable square footage of
floor area comprising the Premises for thirty (30) days or more after what
would have been the effective date of early termination or (ii) Tenant
continues to occupy with persons any of the Premises for ninety (90) days or
more after what would have been the effective date of early termination,
Landlord may elect to extend the effective date of early termination for one
(1) year in which case the Lease shall continue in full force and effect for
one (1) year after the date early termination would have been effective had
Tenant not failed to complete such vacation at which time this Lease shall
terminate automatically (not as a penalty or damages but to give Landlord a
lengthy period of time to market the Premises and to give Tenant additional
time to complete the Early Termination Surrender Work). If Tenant fails to
complete the Early Termination Surrender Work and vacate the Premises for
thirty (30) days or more after what would have been the effective date of
early termination, but is no longer occupying the Premises with persons,
then all personal property and trade fixtures shall in such event and
notwithstanding any provision hereof to the contrary, be deemed abandoned by
Tenant. Provided Landlord successfully avails itself of this right to extend
the term for one year as allowed above, said one year extension shall be in
lieu of the other remedies set forth above but this shall not obviate
Tenant's obligation to complete the Early Termination Surrender Work and
vacate the Premises at the end of the one year extension.
2.4 Holding Over. In the event that Tenant shall continue
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in occupancy of the Premises or fails to properly surrender the Premises
after the expiration of the term, such occupancy shall not be deemed to
extend or renew the term of this Lease, but such occupancy shall continue as
a holdover tenancy at will upon the covenants, provisions and conditions
herein contained at a daily rental equal to one fifteenth (1/15) of the
monthly Base Rent in effect at the expiration of the term of this Lease and
one-fifteenth (1/15) of the most recent amount of additional monthly rent
under section 3.1(b). The holdover rent due hereunder shall apply to all of
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the Premises if Tenant holds over or fails to properly surrender twenty-five
percent (25%) or more of the usable square footage of floor area comprising
the Premises but shall only apply to that pro rata portion of the Premises
which Tenant fails to vacate or properly surrender if Tenant fails to vacate
or properly surrender less than twenty-five percent (25%) of the usable
square footage of floor area comprising the Premises. Landlord may terminate
such tenancy at any time on three (3) days' written notice.
ARTICLE 3
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Rent
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3.1 Base Rent and Additional Rent. Tenant shall pay to
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Landlord the following amounts as rent for the Premises:
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(a) Beginning January 1, 2002 and extending throughout
the entire term of this Lease, Tenant shall pay to Landlord, as annual "Base
Rent", an amount equal to the product of $3,990,960.00 ("Base Rent Factor")
times Tenant's Percentage Share (as Tenant's Percentage Share may be changed
from time to time). The parties acknowledge that the Base Rent Factor
initially represents Landlord's agreed upon net book value of the Property,
as of September 1, 2000 (i.e., $43,145,512.00), times 9.25%, which
percentage represents an agreed upon rate of return to be received by
Landlord during the foregoing period for Landlord's book value interest in
the Property. Tenant's Percentage Share is defined herein and may change
periodically throughout the term hereof. In addition the Base Rent Factor
shall increase annually if there is any increase in CPI, hereinafter
defined, based upon such increase, as specified below. Base Rent shall be
recalculated when Tenant's Percentage Share changes and/or when the Base
Rent Factor is increased based upon the CPI formula stated herein. An
example of the computation of the Base Rent as of January 1, 2002, which
assumes Tenant's Percentage Share on January 1, 2002 is the same as on the
Commencement Date, is attached hereto as Exhibit C and made a part hereof.
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With respect to all net book value numbers set forth in this Lease, those
numbers are approximate and are subject to revision by the parties to the
extent more exact numbers become available.
Beginning January 1, 2003 and for each successive
calendar year throughout the entire term of this Lease, the Base Rent Factor
shall be increased by multiplying the Base Rent Factor for the calendar year
immediately preceding that for the calendar year in question by a fraction
the numerator of which is the CPI for November of the calendar year
immediately preceding the calendar year in question and the denominator of
which is the CPI for November of the calendar year that is two calendar
years immediately preceding the calendar year in question. In no event shall
the Base Rent Factor decrease as a result of any decrease in CPI. For
example, assuming the CPI for November, 2001 is 105 and the CPI for November
2002 is 110, and the Base Rent Factor for the calendar year 2002 is X, then
the Base Rent Factor for calendar year 2003 shall be X times 110.
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105.
For purposes of this Lease, CPI shall mean the
Consumer Price Index published by the Bureau of Labor Statistics of the
United States Department of Labor, All Items for All Urban Consumers, U.S.
city average (1982-84 = 100). If a substantial change is made in the CPI,
then the CPI will be adjusted to the figure that would have been used had
the manner of computing the CPI in effect at the date of this Lease not been
altered. If the CPI (or a successor or substitute index) is not available, a
reliable governmental or other nonpartisan publication evaluating the
information used in determining the CPI will be used. If no index is
published for the relevant month in an applicable year, the parties shall
use the monthly index amount closest to such month in calculating the
adjustment. Any delay or failure of Landlord in computing or billing Tenant
for the escalation of annual Base Rent as provided herein shall not
constitute a waiver of or in any way impair the continuing obligation of
Tenant to pay such escalation of annual Base Rent hereunder. Tenant's
obligation to pay such increases and Landlord's right to collect such
increases are cumulative and retroactive.
Base Rent shall be paid to Landlord in equal
monthly installments (equal to 1/12th of the then current Base Rent), in
advance, beginning January 1, 2002. If the exact amount of Base Rent for a
particular calendar year has not yet been computed during any portion of
such calendar year, or if a required adjustment in Base Rent has not yet
been computed, Tenant shall continue to pay Base Rent at the most recent
level, until the exact amount can be computed (at which time appropriate
adjustments shall be made for any underpayments or overpayments of Base
Rent). For any partial calendar years that this Lease is in effect, Base
Rent shall be reduced proportionately. Tenant shall have no obligation to
pay Base Rent for the period from the Commencement Date through December 31,
2001. Base Rent for any partial calendar year during the term of this Lease
shall be prorated.
(b) Beginning on the Commencement Date and extending
throughout the entire term of this Lease, Tenant shall pay as additional
rent, on a calendar year basis, its allocable share (such allocable share to
be determined in the manner described below) of "Operating Expenses". For
purposes of this Lease, Operating Expenses shall include the following:
(i) All costs reasonably incurred by Landlord
in providing "Basic Services" pursuant to section 6.1 hereof;
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(ii) All costs reasonably incurred by Landlord in
providing "Additional Services" to Tenant pursuant to section 6.1 hereof;
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(iii) All "Property Taxes" (as defined in section
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3.6(b) hereof) incurred by Landlord for the calendar year in question;
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(iv) All Insurance Costs paid or incurred by
Landlord for the calendar year in question;
(v) All other taxes levied or assessed for the
calendar year in question on equipment or other personal property used in
providing Basic Services or otherwise used in connection with the common
areas or operating the Property;
(vi) The portion of any capital expenses incurred
during the term of this Lease, amortized in any calendar year with interest
(as set forth in section 3.6);
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(vii) The portion of any capital expenses
incurred prior to the Commencement Date for assets shown on Landlord's
balance sheet as of September 1, 2000, amortized during the period of time
from the Commencement Date through December 31, 2001 in accordance with
Monsanto's historical accounting practices; provided however, that the
amortization of such pre-September 1, 2000 capital expenses shall only be
included within Operating Expenses for the period from the Commencement Date
through December 31, 2001; and
(viii) All other costs reasonably incurred by
Landlord in operating and maintaining the Property in accordance with the
requirements of this Lease and in accordance with sound management practices
for properties similar to the Property including without limitation those
items set forth in section 3.6 hereof.
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The parties agree that other than the cost of providing
Additional Services, Operating Expenses (including the amortized portion of
any capital expenses) shall, as a general rule, be allocated to Tenant on
the basis of Tenant's Percentage Share (as Tenant's Percentage Share may be
modified from time to time in accordance with the provisions of this Lease);
provided, however, that Landlord may allocate particular Operating Expenses
(including the amortized portion of any capital expenses involving common
areas or the amortized portion of any capital expenses involving parts of
the Premises) to Tenant according to a different method if (i) Landlord
reasonably determines that the service or item underlying such particular
Operating Expenses was used by or benefited Tenant in a manner materially
disproportionate to Tenant's Percentage Share, and (ii) Landlord's method of
determining such allocation is applied in a good faith, non-discriminatory
manner between Landlord and Tenant. The parties agree that the cost of
providing Additional Services to Tenant by Landlord shall be allocated to
Tenant on the basis of Tenant's use of such Services.
(c) Throughout the term of this Lease, Tenant shall
also pay, as additional rent, all other amounts of money and charges
required to be paid by Tenant under this Lease, whether or not such amounts
of money or charges are designated "additional rent". As used in this Lease,
"rent" shall mean and include all Base Rent, additional monthly rent and
additional rent payable by Tenant in accordance with this Lease.
(d) It is the intention of the parties hereto that,
except as otherwise specifically set forth herein, Landlord shall receive
the Base Rent herein provided as net income from the Premises, not
diminished by (i) any imposition of any public authority of any nature
whatsoever attributable to Tenant's Percentage Share of the Property during
the entire term of this Lease notwithstanding any changes in the method of
taxation or raising, levying or assessing any imposition, or any changes in
the name of any imposition, or (ii) the cost of any maintenance, utilities,
insurance or other expenses or charges required to be paid to maintain and
carry the Premises, or (iii) any other costs or expense involved in the
care, management, use, construction and operation of the Premises or any
improvements thereto. Except as otherwise specifically set forth herein, all
such impositions, costs, expenses and charges shall be paid by Tenant from
and after the commencement date of this Lease and during the entire term of
this Lease. Whenever in this Lease provision is made for the doing of any
act by Tenant it is understood and agreed that, except as otherwise
specifically set forth herein, said act shall be done by Tenant at its own
cost and expense unless a contrary intent is specifically expressed.
7
(e) After the date Tenant elects under section 7.5
-----------
hereof to make the Expansion Area part of the Premises and effective at such
time as Tenant commences construction upon such Expansion Area, Monthly Base
Rent shall be increased as follows: Base Rent shall be recalculated in
accordance with the formula set forth in section 3.1(a) based upon the
--------------
increase in Tenant's Percentage Share.
3.2 Procedures. The additional monthly rent payable by
----------
Tenant pursuant to section 3.1(b) hereof shall be calculated and paid in
--------------
accordance with the following procedures:
(a) On or before the Commencement Date, or as soon
thereafter as practicable, and on or before the first day of each subsequent
calendar year during the term of this Lease, or as soon thereafter as
practicable, Landlord shall give Tenant written notice of Landlord's
estimate of the amounts payable under section 3.1(b) hereof for the balance
--------------
of the first calendar year after the Commencement Date or for the ensuing
calendar year, as the case may be, based upon a budget developed by the Site
Manager. The budget shall be developed by the Site Manager on a calendar
year basis, provided that no later than sixty (60) days preceding the
commencement of the calendar year to which the budget relates, the Site
Manager shall provide Tenant with the Site Manager's proposed budget for
such calendar year and shall make himself/herself available to Tenant for
reasonable amounts of time to explain such proposed budget and to provide
Tenant with such related information as Tenant shall reasonably request. It
is acknowledged and agreed that Tenant shall have the right to review the
proposed budget and object to the proposed budget if such budget does not
satisfy the requirements of this Lease. Tenant shall pay such estimated
amounts to Landlord in equal monthly installments, in advance, on or before
the Commencement Date and on or before the first day of each month during
such balance of the first calendar year after the Commencement Date or
during such ensuing calendar year, as the case may be. If such notice is not
given for any calendar year, Tenant shall continue to pay on the basis of
the prior year's estimate until the month after such notice is given, and
subsequent payments by Tenant shall be based on Landlord's current estimate.
If, at any time, Landlord determines that the amounts payable under section
-------
3.1(b) hereof for the current calendar year will vary from Landlord's
------
estimate, Landlord may, by giving written notice to Tenant, revise
Landlord's estimate for such year, and subsequent payments by Tenant for
such year shall be based on such revised estimate. In addition, the Site
Manager may make reasonable revisions to the budget, and estimated payments,
up to four (4) times per year.
(b) Within a reasonable time after the end of each
calendar year (or more frequently if the Landlord elects), Landlord shall
give Tenant a written statement of the amounts payable by Tenant under
section 3.1(b) hereof for such calendar year (or applicable time period)
--------------
certified by Landlord. If such statement shows a total amount owing by
Tenant that is less than the estimated payments for such calendar year (or
applicable time period) previously made by Tenant, Landlord shall credit the
excess to the next monthly installments of the amounts payable by Tenant
under section 3.1(b) hereof (or, if the term of this Lease has ended,
--------------
Landlord shall refund the excess to Tenant with such statement). If such
statement shows a total amount owing by Tenant that is more than the
estimated payments for such calendar year (or applicable time period)
previously made by Tenant, Tenant shall pay the deficiency to Landlord
within sixty (60) days after delivery of such statement. Failure by Landlord
to give any notice or statement to Tenant under this section 3.2 shall not
-----------
waive Landlord's right to receive, or Tenant's obligation to pay, the
amounts payable by Tenant under section 3.1(b) hereof. Tenant shall have the
--------------
right to audit Landlord's books and records related to Operating Expenses
during business hours in Landlord's or its agent's offices for each calendar
year for a period of eighteen months from the date Landlord delivers the
written statement referred to above to Tenant after giving reasonable prior
written notice to Landlord. Such audit shall be at Tenant's sole expense
unless such audit indicates that Landlord's written statement of Operating
Expenses overstates such Operating Expenses by more than five percent (5%)
in which event Landlord shall pay the reasonable cost of such audit.
(c) If the term of this Lease commences or ends on a
day other than the first or last day of a calendar year, respectively, the
amounts payable by Tenant under section 3.1(b) hereof applicable to the
--------------
calendar year in which such term commences or ends shall be prorated
according to the ratio which the number of days during the term of this
Lease in such calendar year bears to three hundred sixty-five (365).
Termination of this Lease shall not affect the obligations of Landlord and
Tenant pursuant to section 3.2(b) hereof to be performed after such
--------------
termination.
8
(d) All charges for the cost of providing Additional
Services shall be paid by Tenant within sixty (60) days of invoice therefor.
3.3 Omitted.
-------
3.4 Late Payment. All amounts of money payable by Tenant
------------
to Landlord hereunder, if not paid when due, shall bear interest from the
due date until paid at the rate of the prime rate, as published, from time
to time, by The Wall Street Journal, plus four percent (4%), or the highest
-----------------------
legal rate, if less, and Tenant shall pay such interest to Landlord on
written demand.
3.5 Other Taxes Payable by Tenant. Tenant shall reimburse
-----------------------------
Landlord for all taxes, assessments, excises, levies, fees and charges,
whether or not now customary or within the contemplation of Landlord and
Tenant, that are payable by Landlord and levied, assessed, charged,
confirmed or imposed by any public or government authority upon, or measured
by, or reasonably attributable to (a) the cost or value of Tenant's
furniture, fixtures, equipment and other personal property located in the
Premises or the cost or value of any improvements made in or to the Premises
by or for Tenant, regardless of whether title to such improvements is vested
in Tenant or Landlord, or (b) any rent payable under this Lease, including
any gross income tax or excise tax levied by any public or government
authority with respect to the receipt of any such rent so long as such tax
is a tax on rent. Such taxes, assessments, excises, levies, fees and charges
shall not include Property Taxes, otherwise paid under section 3.1(b)(iii)
-------------------
hereof, net income (measured by the income of Landlord from all sources or
from sources other than solely rent) or franchise taxes of Landlord. All
taxes, assessments, excises, levies, fees and charges payable by Tenant
under this section 3.5 shall be deemed to be, and shall be paid as,
-----------
additional rent, and shall be due and payable upon the later of (i) fifteen
(15) days prior to the date such taxes, assessments, levies, fees or charges
are due or (ii) within ten (10) days of invoice therefor; provided, however,
that Landlord may include such taxes under this section 3.5 as Property
-----------
Taxes (as defined in section 3.1(b)(iii) hereof), in which event such taxes
-------------------
under this section 3.5 shall be payable in the same manner as other Property
-----------
Taxes.
3.6 Certain Definitions. As used in this Lease, certain
-------------------
words are defined as follows:
(a) "Operating Expenses" shall mean all direct and
indirect costs and expenses paid or incurred by Landlord in connection with
the ownership, management, operation, maintenance or repair of the Property
or providing services in accordance with this Lease, including all costs
described in section 3.1(b) hereof, and including without limitation
--------------
license, permit and inspection fees; electricity, gas, fuel, steam, heat,
light, power, water, sewer and other utilities; costs of separately metering
utilities; management fees and expenses; security, guard, extermination,
water treatment, garbage and waste disposal, rubbish removal, plumbing and
other services; snow and ice removal; costs of capital repairs and
replacements; maintenance of the fire suppression systems; landscape
maintenance; supplies, tools, materials and equipment; costs associated with
nuclear decommission deposits, guarantys, bonds, letters of credit or
similar expenses; accounting and other professional fees and expenses;
painting the exterior or common areas of the Property; maintaining,
repairing and replacing any component of any building or site improvement,
including without limitation, building systems, the foundations, the
exterior walls and roof, the parking and loading areas, the sidewalks,
landscaping and common areas, and the other parts of the Property; costs and
expenses required by or resulting from compliance with any laws, ordinances,
rules, regulations or orders applicable to the Property; and costs and
expenses of contesting by appropriate proceedings any matter concerning
managing, operating, maintaining or repairing the Property, or the validity
or applicability of any law, ordinance, rule, regulation or order relating
to the Property, or the amount or validity of any Property Taxes. Operating
Expenses shall not include costs of restoration work necessitated by fire or
other casualty damage. Operating Expenses shall include all capital expenses
incurred by Landlord during the term of this Lease which benefit Tenant
and/or which are incurred in connection with any common areas, the Premises
or providing any services or work required to be provided by Landlord
hereunder but such capital expenses shall be amortized over the reasonable
useful life of the improvement in accordance with Generally Accepted
Accounting Principles, consistently applied in accordance with Landlord's
historical accounting practices along with interest at an annual rate equal
to three percent (3%) over the interest rate of a thirty (30) year maturity
U.S. Treasury security (such rate shall be adjusted each year based upon the
interest rate of such security during such year) and only the portion of
such capital expense amortized in a given year, with interest, shall be an
Operating Expense in such year.
9
(b) "Property Taxes" shall mean all taxes, assessments,
excises, levies, fees and charges (and any tax, assessment, excise, levy,
fee or charge levied wholly or partly in lieu thereof or as a substitute
therefor or as an addition thereto) of every kind and description, general
or special, ordinary or extraordinary, foreseen or unforeseen, secured or
unsecured, whether or not now customary or within the contemplation of
Landlord and Tenant, that are levied, assessed, charged, confirmed or
imposed by any public or government authority on or against, or otherwise
with respect to, the Property or any part thereof used in connection with
the Property. Property Taxes shall not include net income (measured by the
income of Landlord from all sources or from sources other than solely rent)
or franchise taxes of Landlord, unless levied or assessed against Landlord
in whole or in part in lieu of, as a substitute for, or as an addition to
any Property Taxes.
(c) "Insurance Costs" shall mean all premiums and other
charges for all property, earthquake, flood, liability and other insurance
relating to the Property carried by Landlord excluding business interruption
insurance that may be carried by Landlord.
3.7 Rent Payment Address. Tenant shall pay all monthly
--------------------
installments of Base Rent and all additional monthly rent under section 3.1
-----------
hereof to Landlord, in advance, on or before the first day of each and every
calendar month during the term of this Lease (except that, as set forth in
section 3.1(a), no Base Rent shall be due or payable prior to January 1,
--------------
2002). Tenant shall pay all rent to Landlord without notice, demand,
deduction or offset (except as otherwise specifically provided herein), in
lawful money of the United States of America, at the following address, or
to such other person or at such other place as Landlord may from time to
time designate in writing: Real Estate Manager, Pharmacia Corporation, ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
ARTICLE 4
---------
Use of the Premises
-------------------
4.1 Permitted Use. Tenant shall use the Premises only for
-------------
the following "Permitted Use": general office and research use and other
lawful uses; provided such other lawful uses do not materially and adversely
impact the value, marketability or development opportunities on the
Property. Tenant shall not do or permit to be done in, on or about the
Premises, nor bring or keep or permit to be brought or kept therein,
anything which is prohibited by or will in any way conflict with any law,
ordinance, rule, regulation or order now in force or which may hereafter be
enacted. Tenant shall not do or permit to be done in, on or about the
Premises, nor bring or permit to be brought or kept therein, anything which
Tenant has been notified by Landlord is prohibited by any insurance policy
carried by Landlord for the Property, provided that such prohibition is
similarly found in insurance policies that are generally available in the
industry for properties similar to the Property. Notwithstanding the
foregoing, if Landlord imposes such a prohibition under its insurance,
Tenant shall have the right to require Landlord to purchase alternative
insurance designated by Tenant that does not include such prohibition so
long as such alternative insurance includes substantially the same
coverages, limits and deductibles as Landlord's policies, and so long as the
carriers under such alternative policies are reasonably acceptable to
Landlord. If Tenant causes any increase in the premium for any insurance
covering the Property carried by Landlord including any increase in premium
and/or additional premiums due to Tenant causing Landlord to purchase
alternative or additional insurance pursuant to the foregoing provisions of
this Section, Tenant shall pay to Landlord, within thirty (30) days of
demand, as additional rent, the entire amount of such increase during the
term. Tenant shall not use or allow the Premises to be used for any unlawful
activity, nor shall Tenant cause, maintain or permit any nuisance in, on or
about the Premises or commit or suffer to be committed any waste in, on or
about the Premises. Tenant shall be allowed to install an identity sign
along with Landlord's identity sign on the entrance monument on the Property
provided that (i) such signage shall comply with all laws and (ii) Landlord
approves the design of the sign, such approval not to be unreasonably
withheld. Tenant shall not install any other signs on the Premises or
Property without the prior written consent of Landlord, such approval not to
be unreasonably withheld. Tenant shall, at Tenant's expense, remove all such
signs prior to or upon termination of this Lease and repair any damage
caused by the installation or removal of such signs.
4.2 Environmental Definitions. As used in this Lease,
-------------------------
"Hazardous Material" shall mean any substance that is (a) defined under any
Environmental Law as a hazardous substance, hazardous waste, hazardous
material, pollutant or contaminant, (b) a petroleum hydrocarbon, including
crude oil or any fraction or mixture thereof, (c) hazardous, toxic,
corrosive, flammable, explosive, infectious, radioactive, carcinogenic or a
reproductive toxicant, or (d) otherwise regulated pursuant to any
Environmental Law. As used in this Lease, "Environmental Law"
10
shall mean all federal, state and local laws, statutes, ordinances,
regulations, rules, judicial and administrative orders and decrees, permits,
licenses, approvals, authorizations and similar requirements of all federal,
state, and local governmental agencies or other governmental authorities
pertaining to the protection of human health and safety or the environment,
now existing or later adopted during the term of this Lease. As used in this
Lease, "Permitted Activities" as to Tenant, shall mean the lawful activities
of Tenant that are part of the ordinary course of Tenant's business as
Tenant and Tenant's predecessors have historically operated Tenant's
business on the Premises prior to the Commencement Date, and which evolve in
the future from, or which are a reasonably foreseeable outgrowth of,
Tenant's historical business activity, provided that all such activity is
conducted in accordance with Environmental Laws and good environmental
practice and, as to Landlord, shall mean the lawful activities of Landlord
that are part of the ordinary course of Landlord's or any other occupants,
business provided that all such activity is conducted in accordance with
Environmental Laws and good environmental practice. As used in this Lease,
"Permitted Materials" shall mean the materials handled by Tenant or Landlord
in accordance with all laws and in the ordinary course of conducting
Permitted Activities.
4.3 Environmental Requirements. Tenant hereby agrees that:
--------------------------
(a) Tenant shall not conduct, or permit to be conducted, on the Premises any
activity which is not a Permitted Activity; (b) Tenant shall not use, store
or otherwise handle, or permit any use, storage or other handling of, any
Hazardous Material which is not a Permitted Material on or about the
Premises; (c) Tenant shall obtain and maintain in effect all permits and
licenses required pursuant to any Environmental Law for Tenant's activities
on the Premises, and Tenant shall at all times comply with all applicable
Environmental Laws and good environmental practice; (d) Tenant shall not
engage in the storage, treatment or disposal on or about the Premises of any
Hazardous Material except for any temporary accumulation of waste generated
in the course of Permitted Activities and except for storage of amounts of
Hazardous Materials which are customary and used in the ordinary course of
Tenant's Permitted Activities and are stored, used and disposed of in
accordance with Environmental Laws and good environmental practice; (e)
Tenant shall not install any aboveground or underground storage tank or any
subsurface lines for the storage or transfer of any Hazardous Material,
except for the lawful discharge of waste to the sanitary sewer and/or the
lawful storage of waste pursuant to a permit, and Tenant shall store all
Hazardous Materials in a manner that protects the Premises, the Property and
the environment from accidental spills and releases; (f) omitted; (g) Tenant
shall promptly remove from the Premises any Hazardous Material introduced,
or permitted to be introduced, onto the Premises by Tenant during the term
of this Lease which is not a Permitted Material and, on or before the date
Tenant ceases to occupy the Premises, Tenant shall remove from the Premises
all Hazardous Materials and all Permitted Materials handled by or permitted
on the Premises by Tenant; and (h) if any release of a Hazardous Material to
the environment, or any condition of pollution or nuisance, occurs on or
about or beneath the Premises as a result of any act or omission of Tenant
or its agents, officers, employees, contractors, invitees or licensees
occurring during the term of this Lease, Tenant shall, at Tenant's sole cost
and expense, promptly undertake all remedial measures required to clean up
and ▇▇▇▇▇ or otherwise respond to the release, pollution or nuisance in
accordance with all applicable Environmental Laws and good environmental
practice. Landlord and Landlord's representatives shall have the right, but
not the obligation, to enter the Premises at any reasonable time for the
purpose of inspecting the storage, use and handling of any Hazardous
Material on the Premises in order to determine Tenant's compliance with the
requirements of this Lease and applicable Environmental Law. If Tenant's
use, storage or handling of any Hazardous Material on the Premises does not
comply with this Lease or applicable Environmental Law or good environmental
practice, Tenant shall correct any such violation as soon as possible.
Tenant shall indemnify and defend Landlord against and hold Landlord
harmless from all claims, demands, actions, judgments, liabilities, costs,
expenses, losses, damages, penalties, fines and obligations of any nature
(including reasonable attorneys' fees and disbursements incurred in the
investigation, defense or settlement of claims) that Landlord or any owner
or operator of the Property may incur as a result of, or in connection with,
claims arising from (i) the presence, use, storage, transportation,
treatment, disposal, release or other handling, on or about or beneath the
Premises during the term, of any Permitted Material or Hazardous Material,
except to the extent (x) such Permitted Material or Hazardous Material
existed on or about or beneath the Premises on the Commencement Date, (y)
such Permitted Material or Hazardous Material was placed on, about or
beneath the Property by Landlord or its agents, officers, employees,
contractors, invitees, tenants, subtenants or licensees (such persons or
entities not to include Tenant or its agents, officers, employees,
contractors, subtenants, invitees or licensees), or (z) Tenant had no
ability to control or mitigate the occurrence giving rise to the indemnity
obligation, or (ii) the presence, use storage, transportation, treatment,
disposal release or other handling, on or about the Property, of any
Permitted Material or Hazardous Material introduced or permitted by any act
or omission of Tenant or its agents, officers, employees, contractors,
invitees, subtenants or licensees during the term of
11
this Lease. The liability of Tenant under this section 4.3 shall survive the
-----------
termination of this Lease. With respect to claims arising from the presence,
use, storage, transportation, treatment, disposal, release or other
handling, on or about or beneath the Property prior to the effective date
hereof, of any Permitted Material or Hazardous Material the parties
respective rights and obligations shall be controlled by the Separation
Agreement.
Landlord hereby agrees that: (a) Landlord shall not conduct
on the Property any activity which is not a Permitted Activity; (b) Landlord
shall not use, store or otherwise handle, or permit any use, storage or other
handling of, any Hazardous Material which is not a Permitted Material on or
about the Property; (c) Landlord shall obtain and maintain in effect all
permits and licenses required pursuant to any Environmental Law for
Landlord's activities on the Property, and Landlord shall at all times
comply with all applicable Environmental Laws and good environmental
practice; (d) Landlord shall not engage in the storage, treatment or
disposal on or about the Property of any Hazardous Material except for any
temporary accumulation of waste generated in the course of Permitted
Activities and except for storage of amounts of Hazardous Materials which
are customary and used in the ordinary course of Landlord's Permitted
Activities and are stored, used and disposed of in accordance with
Environmental Laws and good environmental practice; (e) Landlord shall not
install any aboveground or underground storage tank or any subsurface lines
for the storage or transfer of any Hazardous Material, except for the lawful
discharge of waste to the sanitary sewer and/or the lawful storage of waste
pursuant to a permit, and Landlord shall store all Hazardous Materials in a
manner that protects the Property and the environment from accidental spills
and releases; (f) omitted; (g) Landlord shall promptly remove from the
Property any Hazardous Material introduced, or permitted to be introduced,
onto the Property by Landlord during the term of this Lease which is not a
Permitted Material; and (h) if any release of a Hazardous Material to the
environment, or any condition of pollution or nuisance, occurs on or about
or beneath the Property as a result of any act or omission of Landlord or
its agents, officers, employees, contractors, tenants, subtenants, invitees
or licensees, (such persons or entities not to include Tenant or its agents,
officers, employees, contractors, invitees, licensees or subtenants)
occurring during the term of this Lease and such release materially and
adversely effects Tenant's use and enjoyment of the Premises, Landlord
shall, at Landlord's sole cost and expense, promptly undertake all remedial
measures required to clean up and ▇▇▇▇▇ or otherwise respond to the release,
pollution or nuisance in accordance with all applicable Environmental Laws
and good environmental practice. Tenant and Tenant's representatives shall
have the right, but not the obligation, to enter the common areas on the
Property at any reasonable time for the purpose of inspecting the storage,
use and handling of any Hazardous Material on the Premises in order to
determine Landlord's compliance with the requirements of this Lease and
applicable Environmental Law. If Landlord's use, storage or handling of any
Hazardous Material on the Property does not comply with this Lease or
applicable Environmental Law or good environmental practice, and such
violation materially and adversely effects Tenant's use and enjoyment of the
Premises, Landlord shall correct any such violation as soon as possible.
Landlord shall indemnify and defend Tenant against and hold Tenant harmless
from all claims, demands, actions, judgments, liabilities, costs, expenses,
losses, damages, penalties, fines and obligations of any nature (including
reasonable attorneys' fees and disbursements incurred in the investigation,
defense or settlement of claims) that Tenant may incur as a result of, or in
connection with, claims arising from (i) the presence, use, storage,
transportation, treatment, disposal, release or other handling, on or about
or beneath the Property, excluding the Premises during the term, of any
Permitted Material or Hazardous Material, except to the extent (x) such
Permitted Material or Hazardous Material existed on or about or beneath the
Property on the Commencement Date (y) such Permitted Material or Hazardous
Material was placed on, about or beneath the Property by Tenant or its
agents, officers, employees, contractors, subtenants, invitees or licensees
or (z) Landlord had no ability to control or mitigate the occurrence giving
rise to the indemnity obligations, or (ii) the presence, use storage,
transportation, treatment, disposal release or other handling, on or about
the Property, excluding the Premises, of any Permitted Material or Hazardous
Material introduced or permitted by any act or omission of Landlord or its
agents, officers, employees, contractors, invitees, tenants, subtenants or
licensees (such persons or entities not to include Tenant or its agents,
officers, employees, contractors, subtenants, invitees or licensees) during
the term of this Lease. The liability of Landlord under this section 4.3
-----------
shall survive the termination of this Lease. With respect to claims arising
from the presence, use, storage, transportation, treatment, disposal,
release or other handling, on or about or beneath the Property prior to the
effective date hereof, of any Permitted Material or Hazardous Material the
parties respective rights and obligations shall be controlled by the
Separation Agreement.
4.4 Compliance With Law. Tenant shall, at Tenant's sole
-------------------
cost and expense, promptly comply with all laws, ordinances, rules,
regulations, orders and other requirements of any government or public
authority now in force or which may hereafter be in force, with all
requirements of any board of fire underwriters or other similar
12
body now or hereafter constituted, and with all directions and certificates
of occupancy issued pursuant to any law by any governmental agency or
officer, insofar as any thereof relate to or are required by the condition,
use or occupancy of the Premises or the operation, use or maintenance of any
personal property, fixtures, machinery, equipment or improvements in the
Premises. It shall be Tenant's responsibility to obtain and maintain any
required certificate of occupancy or other permits required for Tenant's use
or occupancy of the Premises. Notwithstanding the foregoing, Tenant shall
not be required to make structural changes unless structural changes are
related to or required by Tenant's acts or use of the Premises or by
improvements made by or for Tenant and such compliance is not the obligation
of Landlord hereunder. Further, notwithstanding the foregoing, if during the
term hereof, Landlord and Tenant are no longer affiliated companies within
the meaning of any applicable zoning ordinance, Landlord and Tenant shall
fully cooperate with each other, and exercise their respective good faith
efforts, to work together to amend any zoning ordinance that limits the use
of the Property to an entity and its affiliates, in a manner (i) that
permits both Landlord and Tenant to use the Property for the uses
contemplated hereunder, and (ii) that does not limit one party's rights
under this Lease materially more than the other.
4.5 Rules and Regulations. Tenant shall faithfully observe
---------------------
and fully comply with all reasonable, non-discriminatory rules and
regulations (the "Rules and Regulations") from time to time made in writing
by Landlord for the safety, care, use and cleanliness of the Property or the
common areas of the Property and the preservation of good order therein. If
there is any conflict, this Lease shall prevail over the Rules and
Regulations.
4.6 Entry by Landlord. Landlord shall have the right to
-----------------
enter the Premises during normal business hours, after oral or written
notice to Tenant and in accordance with Tenant's reasonable security
procedures (except at any time, without prior notice but with subsequent
notice and without compliance with security procedures in the case of an
emergency provided that even in the case of emergency, Landlord shall first
attempt to gain access through Tenant's on-site personnel, if reasonably
possible) to (a) inspect the Premises, (b) exhibit the Premises to
prospective purchasers, lenders or, in the last two (2) years of the term
(unless Tenant has properly exercised its succeeding extension right)
tenants, (c) determine whether Tenant is performing all of Tenant's
obligations, (d) supply any service to be provided by Landlord, (e) post
notices of nonresponsibility, and (f) make any repairs to the Premises, or
make any repairs to any adjoining space or utility services, or make any
repairs, alterations or improvements to any other portion of the Property,
provided all such work shall be done as promptly as reasonably practicable
and so as to cause as little interference to Tenant as reasonably
practicable. Tenant waives all claims for damages for any injury or
inconvenience to or interference with Tenant's business, any loss of
occupancy or quiet enjoyment of the Premises or any other loss occasioned by
such entry except to the extent caused by Landlord's negligence or
intentional misconduct. Landlord shall have the right to use any and all
reasonable means in an emergency to obtain entry to the Premises for
purposes of remediating the emergency, and any such entry to the Premises
obtained by Landlord by any of such means shall not be construed or deemed
to be a forcible or unlawful entry into or a detainer of the Premises or an
eviction, actual or constructive, of Tenant from the Premises or any portion
thereof. For purposes of the Lease an "emergency" shall mean a condition
which poses a threat of immediate and material harm to person or substantial
property.
ARTICLE 5
---------
Utilities and Services
----------------------
Tenant shall, with respect to any separately metered
utilities, pay, directly to the appropriate supplier before delinquency, for
all water, gas, heat, light, power, telephone, sewer, refuse disposal and
other utilities and services supplied to the Premises, together with all
taxes, assessments, surcharges and similar expenses relating to such
utilities and services. Landlord may cause utilities serving the Premises to
be separately metered to the extent economically feasible. The cost of
separately metering utilities serving the Premises shall be paid by Landlord
but shall be a Operating Expense subject to reimbursement under Article 3.
---------
If any such utilities or services are jointly metered with the Premises and
another part of the Property, the charges therefor shall be a Operating
Expense subject to reimbursement under Article 3 provided that if either
---------
party deems the other to be responsible for excessive or disproportionately
high usage such party may request that a qualified consultant approved by
both parties (such approval not to be unreasonably withheld or delayed) be
hired, at the cost of the requesting party, to assess a monthly utility
usage surcharge, or credit, as the case may be, and the determination of
that consultant shall govern with respect to the allocation of such charges
between Landlord and Tenant. Tenant shall furnish the Premises with all
telephone equipment, security service, and other services required by Tenant
for the use of the Premises permitted by
13
this Lease except to the extent provided by Landlord through Landlord's
obligations to provide Basic Services and Additional Services pursuant to
section 6.1 hereof. It is the intention of the parties that, generally, most
-----------
services the parties require on a similar basis, and that do not raise
material security or confidentiality concerns, shall be provided by the
Landlord as Basic Services or Additional Services. Except to the extent
caused by Landlord's negligence or intentional misconduct, Landlord shall
not be in default under this Lease or be liable for any damage or loss
directly or indirectly resulting from, nor shall the rent be abated or a
constructive or other eviction be deemed to have occurred by reason of, any
interruption of or failure to supply or delay in supplying any such
utilities and services or any limitation, curtailment, rationing or
restriction on use of water, electricity, gas or any resource or form of
energy or other service serving the Premises or the Property, whether such
results from mandatory restrictions or voluntary compliance with guidelines.
Base Rent shall be equitably abated in the proportion that any area of the
Premises is rendered unusable due to any such interruption if and only if
such interruption (i) lasts more than 5 business days and (ii) is due to the
willful misconduct of Landlord, provided that the foregoing limitation on
abatement rights shall not otherwise limit Tenant's right to damages for
Landlord's breach, or Tenant's offset rights under section 10.7 hereof.
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ARTICLE 6
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Maintenance and Repairs/Surrender
---------------------------------
6.1 Obligations of Landlord. A "Site Manager" who shall be
-----------------------
an employee or agent of Landlord shall be designated to manage the Property.
Until the date ("Non-Consolidated Date") that Landlord and Tenant are no
longer consolidated entities in that neither Landlord nor Tenant directly
owns eighty percent (80%) or more of the capital stock of the other party,
the Site Manager shall be appointed by Landlord and Tenant, and if they
cannot agree, then by the Lease Committee. After the Non-Consolidated Date,
any new Site Manager shall be a qualified person or company experienced in
property management and appointed by Landlord after giving Tenant notice and
the opportunity to object to the proposed selection. Landlord shall, at the
direction of the Site Manager, provide Basic Services and Additional
Services. "Basic Services" shall include maintenance and repair of the
following:
o building structures (excluding greenhouses) and utilities, building
systems and utilities operations (plumbing, electric, gas, HVAC,
and water);
o elevators;
o public use areas such as rest rooms and drinking fountains;
o fire protection systems (including equipment maintenance and
certification);
o landscaping and grounds;
o streets, drives, parking lots and sidewalks, and shall also include
snow removal;
o cafeteria operation and maintenance;
o mail delivery and pickup (such service shall cease to be provided
by Landlord after the Non-Consolidated Date upon ninety (90) days
advance notice from either Landlord or Tenant);
o copier service (self-use copiers per floor) (such service shall
cease to be provided by Landlord after the Non-Consolidated Date
upon ninety (90) days advance notice from either Landlord or
Tenant);
o basic site security;
o waste disposal (except hazardous or special waste);
o hazardous and special waste disposal (such service shall cease to
be provided by Landlord after the Non-Consolidated Date upon ninety
(90) days advance notice from either Landlord or Tenant);
o building receptionists (if any);
o site safety including ESH and Medical clinics (such service shall
cease to be provided by Landlord after the Non-Consolidated Date
upon ninety (90) days advance notice from either Landlord or
Tenant);
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o general housekeeping for all interior areas (does not include
specialized maintenance required for greenhouses and lab areas);
o non-hazardous desk-side trash pick-up (including boxes displaying
green "Trash" sticker);
o non-hazardous spill clean up;
o routine carpet cleaning;
o window cleaning;
o routine painting;
o facility management finance support (budgeting, billing, payables
and accounting of Operating Expenses);
o shipping/receiving services (such service shall cease to be
provided by Landlord after the Non-Consolidated Date upon ninety
(90) days advance notice from either Landlord or Tenant);
o package check-in and delivery (such service shall cease to be
provided by Landlord after the Non-Consolidated Date upon ninety
(90) days advance notice from either Landlord or Tenant);
o package x-ray capabilities;
o package tracing (such service shall cease to be provided by
Landlord after the Non-Consolidated Date upon ninety (90) days
advance notice from either Landlord or Tenant);
o packaging material (such service shall cease to be provided by
Landlord after the Non-Consolidated Date upon ninety (90) days
advance notice from either Landlord or Tenant);
o chemical shipping (such service shall cease to be provided by
Landlord after the Non-Consolidated Date upon ninety (90) days
advance notice from either Landlord or Tenant);
o shuttle service (such service shall cease to be provided by
Landlord after the Non-Consolidated Date upon ninety (90) days
advance notice from either Landlord or Tenant);
o ride finders (such service shall cease to be provided by Landlord
after the Non-Consolidated Date upon ninety (90) days advance
notice from either Landlord or Tenant);
o pest control;
o laboratory glassware washing (such service shall cease to be
provided by Landlord after the Non-Consolidated Date upon ninety
(90) days advance notice from either Landlord or Tenant);
o confidential document destruction and disposal (such service shall
cease to be provided by Landlord after the Non-Consolidated Date
upon ninety (90) days advance notice from either Landlord or
Tenant); and
o white paper recycling program.
Basic Services shall generally be provided in accordance with standards and
practices followed by Landlord and Tenant as of the Commencement Date.
However, Landlord shall have the right to make reasonable additions or
deletions to the Basic Services, or to the standards and practices by which
the Basic Services are provided, based on changed needs of the parties, with
Tenant's approval, such approval not to be unreasonably withheld or delayed.
In addition, some Basic Services which are noted above shall be terminated
by Landlord upon ninety (90) days prior written request of either party
after the Non-Consolidated date without regard to the other party's
approval.
"Additional Services" shall mean services that, for
efficiencies and cost effectiveness, are made available to Landlord and
Tenant at the Property for use as-and when needed. Additional Services
currently include the following:
o catering;
15
o specialty fabrication;
o metrology/equipment calibration;
o key and lock service;
o non-routine cleaning;
o equipment repair and maintenance for special use lab equipment;
o fume and bio hood maintenance and certification, balances, etc.
(such service shall cease to be provided by Landlord after the
Non-Consolidated Date upon ninety (90) days advance notice from
either Landlord or Tenant);
o warehouse operations (such service shall cease to be provided by
Landlord after the Non-Consolidated Date upon ninety (90) days
advance notice from either Landlord or Tenant);
o equipment and material storage (such service shall cease to be
provided by Landlord after the Non-Consolidated Date upon ninety
(90) days advance notice from either Landlord or Tenant);
o salvage/sales to jobbers (such service shall cease to be provided
by Landlord after the Non-Consolidated Date upon ninety (90) days
advance notice from either Landlord or Tenant);
o delivery services;
o moving service (such service shall cease to be provided by Landlord
after the Non-Consolidated Date upon ninety (90) days advance
notice from either Landlord or Tenant);
o uniform services (such service shall cease to be provided by
Landlord after the Non-Consolidated Date upon ninety (90) days
advance notice from either Landlord or Tenant);
o indoor green plant maintenance (such service shall cease to be
provided by Landlord after the Non-Consolidated Date upon ninety
(90) days advance notice from either Landlord or Tenant);
o laboratory storeroom (such service shall cease to be provided by
Landlord after the Non-Consolidated Date upon ninety (90) days
advance notice from either Landlord or Tenant);
o chemical procurement, distribution and tracking (such service shall
cease to be provided by Landlord after the Non-Consolidated Date
upon ninety (90) days advance notice from either Landlord or
Tenant);
o solvent supplies (such service shall cease to be provided by
Landlord after the Non-Consolidated Date upon ninety (90) days
advance notice from either Landlord or Tenant);
o gas cylinders pick-up and delivery (such service shall cease to be
provided by Landlord after the Non-Consolidated Date upon ninety
(90) days advance notice from either Landlord or Tenant);
o liquid nitrogen refill and delivery (such service shall cease to be
provided by Landlord after the Non-Consolidated Date upon ninety
(90) days advance notice from either Landlord or Tenant);
o picture framing services (such service shall cease to be provided
by Landlord after the Non-Consolidated Date upon ninety (90) days
advance notice from either Landlord or Tenant); and
o project administration (interior construction and design services)
(such service shall cease to be provided by Landlord after the
Non-Consolidated Date upon ninety (90) days advance notice from
either Landlord or Tenant).
Additional Services shall generally be provided in accordance with standards
and practices followed by Landlord and Tenant as of the Commencement Date.
However, Landlord shall have the right to make reasonable deletions or
additions to the Additional Services, or to the standards and practices by
which the Additional Services are provided, based on changed needs of the
parties or determination that providing a particular service is no longer
economically efficient, with Tenant's approval, such approval not to be
unreasonably withheld or delayed. In addition, some of the
16
Additional Services, which are noted above, shall be terminated by Landlord
upon ninety (90) days prior written request of either party after the
Non-Consolidated Date without regard to the other party's approval.
All costs for providing Additional Services to Tenant shall be charged to
Tenant based on Tenant's use of such service at cost plus a reasonable
charge for administrative expenses related thereto.
Tenant shall give Landlord written notice of the need for any maintenance or
repair for which Landlord is responsible, after which Landlord shall have a
reasonable opportunity to perform the maintenance or make the repair, and
Landlord shall not be liable for any failure to do so unless such failure
continues for an unreasonable time after Tenant gives such written notice to
Landlord. Landlord shall use good faith efforts to manage the Property
through a qualified Site Manager and utilizing qualified contractors in a
cost effective manner. Until the Non-Consolidated Date, Landlord and Tenant
shall cooperate to avoid duplication of services provided on the Property
and at the Creve Coeur site where Landlord and Tenant maintain a similar
leasehold relationship except that Tenant is the landlord and Landlord is
the tenant. Tenant waives any right to perform maintenance or make repairs
for which Landlord is responsible at Landlord's expense except as
specifically provided in section 10.7 hereof. Landlord's liability with
------------
respect to any maintenance or repair for which Landlord is responsible shall
be limited to the reasonable cost of the maintenance or repair.
Notwithstanding the foregoing, if Tenant has notified Landlord on at least
four (4) occasions within a calendar year that Landlord has failed, in a
material way, to perform a specific material obligation of Landlord under
this section 6.1 (with each applying to the same specific material
-----------
obligation), and Landlord in fact has failed, in a material way, to perform
such specific material obligation, then for a period of thirty (30) days
after the last of such notifications, Tenant may by notice delivered to
Landlord within such 30 day period, require Landlord to hire a third party
property management company to act as Site Manager, for up to a two year
period (after which time Landlord may again designate the Site Manager)
which company may be selected by Tenant provided that such company shall be
a qualified property management company which has been in business for at
least ten (10) years and which has experience managing large corporate
campuses such as the Property and is approved by Landlord, such approval not
to be unreasonably withheld, delayed or conditioned. However, during any
time during the term of this Lease where the Landlord hereunder is an entity
other than Pharmacia Corporation, and such entity has a market
capitalization of less than One Billion Dollars ($1,000,000,000.00), the
number of notices of failure by Landlord before Tenant's right to designate
a property management company as the Site Manager shall be reduced from four
(4) to three (3) and the maximum time such property management company may
be appointed as the Site Manager shall be increased from two (2) years to
four (4) years and all other provisions of the previous sentence shall
continue to apply. Subject to section 8.4 hereof, any damage to any part of
-----------
the Property for which Landlord is responsible that is caused by the
negligence or intentional misconduct of Tenant, or any agent, officer,
employee, contractor, licensee or invitee of Tenant, shall be repaired by
Landlord at Tenant's expense and Tenant shall pay to Landlord, upon billing
by Landlord, as additional rent, the cost of such repairs incurred by
Landlord. Landlord shall use good faith efforts to manage the Property in
accordance with the budget prepared in accordance with section 3.2, however,
-----------
the failure to prepare or work within the budget shall not affect Tenant'
obligation to reimburse Landlord for expenses under section 3.1. Landlord
-----------
shall also use good faith efforts to manage the Property with the objective
of delivering services in a cost effective manner.
6.2 Obligations of Tenant. Except as otherwise required by
---------------------
section 6 hereof, Tenant shall, at all times during the term of this Lease
---------
and at Tenant's sole cost and expense, maintain and repair all equipment,
trade fixtures and other personal property which are special or unique to
Tenant's particular use of the Premises (e.g., greenhouses) and keep all of
the foregoing clean and in good order and operating condition, ordinary wear
and tear excepted. Tenant shall not damage the Premises or disturb the
integrity and support provided by any wall. Subject to section 8.4 hereof,
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the cost of any repair of damage to the Premises caused by Tenant or any
agent, officer, employee, contractor, licensee or invitee of Tenant shall be
paid by Tenant as set forth in section 6.1 hereof. Tenant shall take good
-----------
care of the Premises and keep the Premises free from dirt, rubbish, waste
and debris at all times. Tenant shall not overload the floors in the
Premises or exceed the load-bearing capacity of the floors in the Premises.
6.3 Surrender. Tenant shall, at the end of the term of
---------
this Lease, whether by termination or expiration, and with respect to any
areas which are vacated by Tenant due to any partial termination hereof or
otherwise, surrender the Premises in broom clean condition free of any waste
or damage caused by Tenant. In addition, with respect to any portions of the
Premises that were altered or re-configured by Tenant following the
Commencement Date, with Landlord's approval thereof conditioned, pursuant to
section 7.1 hereof, upon such
-----------
17
portion being altered, remodeled or restored, upon surrender, Landlord may
require such portions of the Premises to either, at Tenant's election, (i)
be altered and remodeled by Tenant to a white box, marketable condition
reasonably agreed to by Landlord, or (ii) be restored to the condition of
the Premises on the Commencement Date of this Lease. If Tenant has
constructed any buildings or other improvements on the Property following
the Commencement Date, Landlord shall accept such improvements and buildings
upon surrender, unless Landlord conditioned its approval for any such
improvements or buildings pursuant to section 7.1(a) hereof upon retrofit or
--------------
removal at the end of the term in which case Landlord may require Tenant to
either, at Tenant's election, (i) reasonably modify non-marketable
components of such building or improvements as specified by Landlord, (ii)
raze the building (in the case of a building constructed by Tenant) or
remove such improvements (in the case of other improvements), clear all
debris, render the site safe and sightly, provide documentation reasonably
required by Landlord that the subject area is in compliance with all laws,
and, to the extent reasonably possible, restore any prior landscaping, sod,
parking areas, drives or other improvements which existed prior to Tenant's
construction. To the extent any building or other improvement is under
construction by Tenant at the time Tenant elects to terminate, Landlord may
require Tenant to either, at Tenant's election, (i) complete such
construction in accordance with plans reasonably approved by Landlord or
(ii) raze the building and improvement, clear all debris, render the site
safe and sightly, provide documentation reasonably requested by Landlord
that the Premises is in compliance with all laws, and, to the extent
reasonably possible, restore any prior landscaping, sod, parking areas,
drives or other improvements which existed prior to Tenant's construction.
If Tenant fails to complete the work required hereunder prior to the
effective date of termination, then Landlord may elect one or more of the
following remedies: (i) obtain an injunction to force Tenant to complete the
work; (ii) damages; (iii) specific performance; (iv) perform or complete the
work and recover the total reasonable cost thereof, including interest on
unpaid amounts as provided for in section 3.4 hereof, from Tenant, or (v)
-----------
any other remedy available at law or in equity. If Tenant does not vacate
and surrender the Premises upon expiration, termination or other vacation
provided for hereunder, Tenant shall be a holdover tenant, in which event
the provisions of section 2.4 hereof shall apply.
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ARTICLE 7
---------
Alteration of the Premises or Property
--------------------------------------
7.1 Alterations by Tenant. Tenant shall not make any
---------------------
alterations, additions or improvements in or to the Premises or any part
thereof, or attach any fixtures or equipment thereto, without Landlord's
prior written consent, which consent shall not be unreasonably withheld
provided Tenant complies with the requirements of this Article 7.
Notwithstanding the preceding sentence, Tenant may make such interior,
non-structural alterations, additions or improvements without Landlord's
consent only if the total cost of such alterations, additions or
improvements (in the aggregate based upon the total project cost, including
soft costs and contingencies, for each project to be undertaken by Tenant)
is one hundred thousand dollars ($100,000) or less and such alterations,
additions or improvements will not materially affect the structural,
exterior or roof elements of the Property or the mechanical, electrical,
HVAC, safety, security or plumbing systems of the Property, but Tenant shall
give prior written notice of any such alterations, additions or improvements
to Landlord. All alterations, additions and improvements in or to the
Premises to which Landlord consents shall be made by Tenant at Tenant's sole
cost and expense as follows:
(a) Tenant shall submit to Landlord along with any
request for consent to an alteration and any notice of an alteration for
which consent is not required, complete plans and specifications for all
work to be done by Tenant. Such plans and specifications shall be prepared
by responsible licensed architect(s) and engineer(s), shall comply with all
applicable codes, laws, ordinances, rules and regulations, shall not
adversely affect any systems, components or elements of the Property, and
shall be in a form sufficient to secure the approval of all government
authorities with jurisdiction over the Property. Such plans shall also
include rules and regulations to be incorporated into a construction
contract with the contractor designed to avoid interference caused by
construction, protect safety and regulate construction staging areas. All
work done on the Property by Tenant shall utilize union labor exclusively
unless Landlord otherwise agrees. Landlord shall have a continuing right to
supervise any such construction by Tenant. Landlord shall not unreasonably
withhold consent to any alteration, addition or improvement provided that it
(i) will not materially reduce or materially, adversely affect the value,
marketability or development opportunities (except with respect to
construction in Expansion Areas, as hereinafter defined) of the Property, or
Landlord's campus upon which the Property is located, (ii) will not cause
material interference with Landlord's or its tenants' operations on the
Property, (iii) will not cause any material increase in Operating Expenses
18
(unless Tenant agrees in writing to pay 100% of such increase in accordance
with section 7.1(d) hereof), and (iv) does not adversely affect the
--------------
structural, exterior or roof elements of the Property or the mechanical,
electrical, plumbing or life safety systems of the Property and (v) shall be
architecturally harmonious with the remainder of the building and other
improvements on the Property. If Landlord reasonably determines that an
alteration, addition or improvement requested by Tenant is specific to
Tenant's business so that it will materially diminish the marketability of
the space affected thereby to other users, Landlord shall have the right to
condition its consent to such alteration, addition or improvement upon
Tenant agreeing to reasonably modify the affected space upon the termination
of this Lease (or, if applicable, the earlier partial termination of this
Lease with respect to the affected space in accordance with section 6.3).
-----------
Landlord and Tenant agree that basic laboratories and basic office space
shall not be considered non-marketable for purposes of this section 7.1, but
-----------
that specialized laboratories, greenhouses, growth ▇▇▇▇▇▇▇▇, animal
facilities and pilot plant facilities shall be considered non-marketable.
Landlord and Tenant agree to reasonably cooperate with each other with
respect to zoning, permitting and governmental approvals related to efforts
to maximize the development opportunities on the Property.
(b) Tenant shall obtain all required permits for the
work. Tenant shall engage responsible licensed contractor(s) to perform all
work who shall carry reasonable insurance. Tenant shall perform all work in
accordance with the plans and specifications approved by Landlord, in a good
and workmanlike manner, in full compliance with all applicable laws, codes,
ordinances, rules and regulations, and free and clear of any mechanics'
liens. Tenant shall pay for all work (including the cost of all utilities,
permits, fees, taxes, and property and liability insurance premiums in
connection therewith) required to make the alterations, additions and
improvements. Tenant shall pay to Landlord all reasonable third party fees,
costs and expenses incurred by Landlord in connection with the review,
approval and supervision of any alterations, additions or improvements made
by Tenant. Under no circumstances shall Landlord be liable to Tenant for any
damage, loss, cost or expense incurred by Tenant on account of the design of
any work, construction of any work, or delay in completion of any work
performed by, or at the direction, of Tenant.
(c) Tenant shall give written notice to Landlord of the
date on which construction of any work will be commenced at least five (5)
business days prior to such date. Tenant shall keep the Premises and the
Property free from mechanics', materialmen's and all other liens arising out
of any work performed, labor supplied, materials furnished or other
obligations incurred by Tenant. Tenant shall promptly and fully pay and
discharge all claims on which any such lien could be based. Tenant shall
have the right to contest the amount or validity of any such lien, provided
Tenant gives prior written notice of such contest to Landlord, prosecutes
such contest by appropriate proceedings in good faith and with diligence,
and, upon any action to enforce or execute upon such lien or, upon
Landlord's request if Landlord is attempting to finance (including sale
leaseback transactions) or sell the Property or any portion of it, (i)
furnishes such bond as may be required by law to eliminate such lien or (ii)
causes a title company to insure over such lien for the benefit of Landlord
and any buyer or lender, or (iii) furnish such other security as Landlord
may reasonably approve to protect the Premises and the Property from such
lien. Landlord shall have the right to post and keep posted on the Premises
any notices that may be provided by law or which Landlord may deem to be
proper for the protection of Landlord, the Premises and the Property from
such liens, and to take any other action Landlord deems necessary to remove
or discharge, at the expense of Tenant, any liens or other encumbrances that
Tenant is required to eliminate, remove or provide security against, but
fails to do so.
(d) If any alteration, addition or improvement to the
Premises made by Tenant increases Operating Expenses, Tenant shall be
responsible for the payment of such increase. To the extent such increase
represents a one time or infrequent expense, Landlord may ▇▇▇▇ Tenant for
the amount of such increase and Tenant shall pay the same within sixty (60)
days following delivery of invoice. To the extent such increase represents
an on-going increase in Operating Expenses, Landlord may include the amount
of such increase in the amount charged to Tenant on a monthly basis for
Tenant's allocable share of Operating Expenses. Similarly, if any
alteration, addition or improvement made by Landlord, other than changes
which are to common areas or which are of some utility to Tenant, causes any
increase in Operating Expenses, Tenant shall not be responsible to pay
Tenant's Percentage Share of such increase, unless the increased cost is
offset by a reduction in Tenant's Percentage Share.
(e) No alteration to the Premises by Tenant shall
materially interfere with the use and enjoyment of the Property (other than
the Premises) by Landlord or any persons or entities occupying any portion
of the Property through Landlord, so long as Landlord and such other persons
are using the Property for office and/or
19
research purposes. If and to the extent Landlord or such other persons or
entities are using the Property for lawful purposes other than office and
research, Tenant shall exercise good faith and commercially reasonable
efforts to prevent any alterations to the Premises made by Tenant from
materially interfering with such other uses.
7.2 Landlord's Property. All alterations, additions,
-------------------
fixtures and improvements, whether temporary or permanent in character, made
in or to the Premises by Landlord or Tenant (other than personal property
and trade fixtures owned by Tenant), shall no later than the termination of
this Lease, become part of the Property and Landlord's property. Upon
termination of this Lease, Landlord shall have the right, at Landlord's
option, by giving written notice to Tenant at any time before or within
sixty (60) days after such termination, to retain all such alterations,
additions, fixtures and improvements in the Premises, without compensation
to Tenant, or to remove all such alterations, additions, fixtures and
improvements from the Premises, repair all damage caused by any such
removal, and restore the Premises to the condition in which the Premises
existed before such alterations, additions, fixtures and improvements were
made, and if Landlord has the right to require Tenant to perform such work
under section 6.3 or section 2.3 hereof, and Tenant failed to do so, Tenant
----------- -----------
shall pay to Landlord, upon billing by Landlord, the reasonable cost of such
removal, repair and restoration (including any other reasonable, third party
costs incurred by Landlord in connection with such removal). All movable
furniture, equipment, trade fixtures, computers, office machines and other
personal property shall remain the property of Tenant. Upon termination of
this Lease, Tenant shall, at Tenant's expense, remove all such movable
furniture, equipment, trade fixtures, computers, office machines and other
personal property from the Property and repair all damage caused by any such
removal, and if not removed within thirty (30) days following termination of
this Lease, such personal property shall, consistent with section 10.6
------------
hereof, be deemed abandoned and become the property of Landlord. Termination
of this Lease shall not affect the obligations of Tenant pursuant to this
section 7.2 to be performed after such termination.
-----------
7.3 Alterations to Common Areas. No alteration to common
---------------------------
areas, except those requested by Tenant, shall materially and adversely
interfere with Tenant's use of the Property for offices and research
purposes other than temporary interference during construction periods. If
Landlord adds any buildings or additions to the Property (other than
buildings or additions for the sole benefit of Tenant), Landlord shall, at
its sole expense, construct such additional parking on the Property as is
required by applicable law to service the parking needs of such buildings or
additions. Upon Tenant's request, Landlord will alter common areas at
Tenant's sole cost provided that (i) Tenant submits plans and specifications
for such alteration along with reasonably detailed cost estimates; (ii) the
alteration will not, in Landlord's reasonable opinion, increase Operating
Expenses or any other expenses, or Tenant shall agree by written amendment
to this Lease to pay such increase; (iii) the alteration shall not in
Landlord's reasonable opinion materially interfere with the use, enjoyment
and operations of Landlord and its tenants; (iv) the alteration shall comply
with all laws; (v) the alteration shall not materially diminish the use,
marketability, value, or development opportunities of the Property in
Landlord's reasonable opinion; (vi) the alteration shall be architecturally
harmonious with the remainder of the Property in Landlord's reasonable
opinion; (vii) Tenant shall agree to pay all costs of such alteration; and
(viii) in the event such alteration is expected to cost Five Million Dollars
($5,000,000.00) or more in the total aggregate project costs, including soft
costs and contingencies or in the event the Tenant at such time no longer is
Monsanto Company or no longer maintains a market capitalization in excess of
One Billion Dollars ($1,000,000,000.00), then Tenant shall provide Landlord
with reasonable security for the payment thereof including a construction
disbursing agreement with a title company of Landlord's choice whereby
Tenant would escrow no less than one hundred twenty-five percent (125%) of
the total costs and cause such title company to insure over mechanics liens
related to such construction at Tenant's cost or such other security, such
as an irrevocable letter of credit, which Landlord reasonably accepts.
7.4 Alterations Triggered By A Change In Control. For
--------------------------------------------
purposes of this Lease, any of the following transfers on a cumulative basis
shall constitute a "Change in Control": (i) if a party is a corporation, the
transfer of more than forty-nine percent (49%) of the stock of the
corporation; (ii) if a party is a partnership, the transfer of more than
forty-nine percent (49%) of the capital or profits interest in the
partnership; (iii) if a party is a trust, the transfer of more than
forty-nine percent (49%) of the beneficial interest under the trust; (iv) if
a party is a limited liability company, the transfer of more than forty-nine
percent (49%) of the membership interests; (v) if a party is any other type
of entity, the transfer of more than forty-nine percent (49%) of the equity
interests; or (vi) any merger involving a party where such party is not the
surviving entity or where such party is the surviving entity but there is a
material change in the persons or entities controlling such party as a
result of such merger. In the event of any Change in Control of either
Landlord or Tenant which results in either party being controlled by a
competitor of
20
the other, the parties agree to cooperate in good faith to make
modifications to the access and security systems serving the Property to
lessen potential adverse competitive impacts caused by the cohabitation of
competitive businesses on the same campus all at the sole cost of the party
that did not have the Change in Control which triggered the obligation.
7.5 Expansion Rights. The parties have designated an area
----------------
("Expansion Area") on Exhibit D, attached hereto and made a part hereof,
---------
which upon Tenant's written election, may be made part of the Premises and
which is designated for future construction by Tenant. After Tenant has
elected to add the Expansion Area to the Premises, Tenant shall be allowed
to construct a building on the Expansion Area provided that all requirements
in section 7.1 and 7.2 hereof relating generally to alterations shall apply
-------------------
to such construction. Tenant shall be solely responsible for all
construction costs, and in the event such construction is expected to cost
Five Million Dollars ($5,000,000.00) or more in total aggregate project
costs, including soft costs and contingencies, or in the event the Tenant at
such time is no longer the Monsanto Company or no longer maintains a market
capitalization in excess of One Billion Dollars ($1,000,000,000.00), Tenant
shall provide Landlord with security reasonably approved by Landlord at
Tenant's sole cost to insure that (i) the construction is completed in
accordance with all laws, in a good and workmanlike manner and in accordance
with plans and specifications which shall be attached to the lease
amendment, (ii) that all costs of construction are promptly paid for and
(iii) that no mechanics, materialmens or other liens are filed against the
Property. Such security may include without limitation, mechanics lien
coverage from a title company, reasonable construction escrows and
disbursing agreements with a title company, reasonable payment and
performance bonds and/or irrevocable letters of credit. Tenant may construct
sufficient parking on the Expansion Area to service the parking needs of any
buildings construction on the Expansion Area so that the overall parking
ratio on the Property is not reduced. Tenant may construct such additional
needed parking on common areas if it cannot be constructed on the Expansion
Area provided that all requirements of this section 7.5 are otherwise
-----------
satisfied with respect to such parking construction, the area of such
parking is approved by Landlord (such approval not to be unreasonably
withheld) and such construction does not materially impair or diminish
Landlord's development opportunities on the Property. After Tenant's
election to add the Expansion Area to the Premises and prior to the
commencement of construction on the Expansion Area, Landlord and Tenant
shall amend this Lease to adjust the Exhibits which describe the Premises,
adjust Tenant's Percentage Share (based upon approved plans for construction
on the Expansion Area, as and when such plans are approved) and to confirm
the increase to Base Rent under section 3.1(e) hereof. Upon the assignment
--------------
of this Lease by Tenant (other than to an Affiliate of Tenant) or the
sublease of more than thirty-three percent (33%) of the Premises (other than
to an Affiliate of Tenant), this section 7.5 shall automatically terminate
-----------
and be of no further force or effect.
ARTICLE 8
---------
Indemnification and Insurance
-----------------------------
8.1 Damage or Injury. Landlord shall not be liable to
----------------
Tenant, and Tenant hereby waives all claims against Landlord, for any damage
to or loss or theft of any property or for any bodily or personal injury,
illness or death of any person in, on or about the Premises or the Property
arising out of events occurring or conditions that came into existence
during the term of this Lease, except to the extent caused by the negligence
or willful misconduct of Landlord or Landlord's agents, officers, employees,
contractors, tenants, invitees or licensees (such persons or entities not to
include Tenant or its agents, officers, employees, contractors, subtenants,
invitees or licensees) or out of any Landlord Default. Tenant shall
indemnify and defend Landlord against and hold Landlord harmless from all
claims, demands, liabilities, damages, losses, costs and expenses, including
reasonable attorneys' fees and disbursements (collectively, "Losses"),
arising from or related to any use or occupancy of the Premises by Tenant or
its agents, officers, employees, contractors, invitees or licensees, or any
condition of the Premises arising from an act or omission of Tenant or its
agents, officers, employees, contractors, invitees or licensees, or any
default in the performance of Tenant's obligations under this Lease, or any
damage to any property (including property of employees and invitees of
Tenant) or any bodily or personal injury, illness or death of any person
(including employees and invitees of Tenant) occurring in, on or about the
Premises or any part thereof arising at any time and from any cause
whatsoever (except to the extent caused by the negligence or willful
misconduct of Landlord or Landlord's agents, officers, employees,
contractors, tenants [such persons or entities not to include Tenant or its
agents, officers, employees, contractors, tenants, invitees or licensees, or
out of any Landlord Default]) or occurring in, on or about any part of the
Property other than the Premises when such damage, bodily or personal
injury, illness or death is caused by any act or omission of Tenant or its
agents, officers, employees, contractors, invitees or
21
licensees. Notwithstanding the foregoing, (i) Tenant's indemnity obligations
under this section 8.1 shall only apply to Losses to the extent such Losses
-----------
were not caused by or arise out of the negligence or willful misconduct of
Landlord or its agents, officers, employees, contractors, tenants,
subtenants, invitees or licensees (such persons or entities not to include
Tenant or its agents, officers, employees, contractors, subtenants, invitees
or licensees) during the term of this Lease, or out of any Landlord Default;
(ii) Tenant's indemnity obligations under this section 8.1 shall not apply
-----------
to any liability caused by or arising out of events occurring or conditions
that existed prior to the Commencement Date if such liability is covered by
the Separation Agreement; and (iii) nothing in this section 8.1 shall limit
-----------
the parties respective indemnity rights and obligations under section 4.3
-----------
hereof. This section 8.1 shall survive the termination of this Lease with
-----------
respect to any event, act, occurrence, damage, death, injury, act or
omission occurring prior to such termination.
8.2 Insurance Coverages and Amounts. Tenant shall, at all
-------------------------------
times during the term of this Lease and at Tenant's sole cost and expense,
obtain and keep in force the insurance coverages and amounts set forth in
this section 8.2. Tenant shall maintain commercial general liability
-----------
insurance, including contractual liability, broad form property damage
liability, fire legal liability, premises and completed operations, and
medical payments, with limits not less than one million dollars ($1,000,000)
per occurrence and aggregate, insuring against claims for bodily injury,
personal injury and property damage arising from the use, occupancy or
maintenance of the Premises and the Property. The policy shall contain an
exception to any pollution exclusion which insures damage or injury arising
out of heat, smoke or fumes from a hostile fire. Any general aggregate shall
apply on a per location basis. Tenant shall maintain business auto liability
insurance with limits not less than one million dollars ($1,000,000) per
accident covering owned, hired and non-owned vehicles used by Tenant. Tenant
shall maintain umbrella excess liability insurance on a following form basis
in excess of the required commercial general liability, business auto and
employers liability insurance with limits not less than five million dollars
($5,000,000) per occurrence and aggregate. Tenant shall carry workers'
compensation insurance for all of its employees in statutory limits in the
state in which the Property is located and employers liability insurance
which affords not less than five hundred thousand dollars ($500,000) for
each coverage. Tenant shall maintain all risk property insurance for any
building or other improvement constructed on an Expansion Area, all personal
property of Tenant and improvements, fixtures and equipment constructed or
installed by Tenant in the Premises in an amount not less than the full
replacement cost. If required by Landlord, Tenant shall maintain plate glass
insurance coverage against breakage of plate glass in the Premises. Any
deductibles selected by Tenant shall be the sole responsibility of Tenant.
8.3 Insurance Requirements. All insurance and all renewals
----------------------
thereof required to be obtained by Tenant hereunder shall be issued by
financially sound companies approved by Landlord, such approval not to be
unreasonably withheld or delayed, and authorized to do and doing business in
the state in which the Property is located. Each policy of Tenant's
insurance shall expressly provide that the policy shall not be canceled or
materially altered without thirty (30) days prior written notice to Landlord
and shall remain in effect notwithstanding any such cancellation or
alteration until such notice shall have been given to Landlord and such
period of thirty (30) days shall have expired. All liability insurance of
Tenant (except employers liability) shall name Landlord and any other
parties designated by Landlord (including any investment manager, asset
manager or property manager) as an additional insured, shall be primary and
noncontributing with any insurance which may be carried by Landlord, shall
afford coverage for all claims based on any act, omission, event or
condition that occurred or arose (or the onset of which occurred or arose)
during the policy period, and shall expressly provide that Landlord,
although named as an insured, shall nevertheless be entitled to recover
under the policy for any loss, injury or damage to Landlord. All property
insurance of Tenant shall name Landlord as loss payee as respects Landlord's
interest in any improvements and betterments. Tenant shall deliver
certificates of insurance, acceptable to Landlord, to Landlord by the
complete execution of this Lease and at least ten (10) days before
expiration of each policy. If Tenant fails to insure or fails to furnish any
such insurance certificate, Landlord shall have the right from time to time
to effect such insurance for the benefit of Tenant or Landlord or both of
them, and Tenant shall pay to Landlord on written demand, as additional
rent, all premiums paid by Landlord. Notwithstanding the foregoing, Tenant's
liability insurance (i) shall only insure Landlord to the extent the
insurance company is responsible for the payment of the claim without
reimbursement from Tenant through a deductible or otherwise, and (ii) shall
not prevent Tenant or Tenant's insurer from taking action against Landlord's
insurer to defend a claim or cover a loss caused, or alleged to have been
caused, in whole or in part, by the negligence or intentional misconduct of
Landlord.
22
8.4 Subrogation. Tenant waives, on behalf of all insurers,
-----------
under all policies of property insurance now or hereafter carried by Tenant
insuring or covering the Premises, or any portion or any contents thereof,
or any operations therein, all rights of subrogation which any such insurer
might otherwise, if at all, have to any claims of Tenant against Landlord
and releases Landlord from such insured claims to the extent the insurance
company is required to pay such claims (i.e., excluding that portion of an
insured claim which the insurance company is not required to pay [or is
reimbursed by Tenant] due to a deductible or through a self reinsurance
program, or similar program, maintained by the insured). Landlord waives, on
behalf of all insurers under all policies of property insurance now or
hereafter carried by Landlord insuring or covering the Property, or any
portion or any contents thereof, or any operations therein, all rights of
subrogation which any such insurer might otherwise, if at all, have to any
claims of Landlord against Tenant and releases Tenant from such insured
claims to the extent the insurance company is required to pay such claims
(i.e., excluding that portion of an insured claim which the insurance
company is not required to pay [or is reimbursed by Tenant] due to a
deductible or through a self reinsurance program, or similar program,
maintained by the insured). Each party shall procure from each of the
insurers under all policies of property insurance now or hereafter required
to be carried hereunder, a waiver of all rights of subrogation which the
insurer might otherwise, if at all, have to any claims of the insured party
against the other party as required by this section 8.4. Notwithstanding the
-----------
foregoing, this section 8.4 shall not prevent a party or a party's insurer
-----------
from taking action against the other party's insurer to cause such other
party's insurer to defend a claim and/or cover a loss caused, or alleged to
have been caused, in whole or in part, by the negligence or intentional
misconduct of such other party.
8.5 Landlord Insurance Requirements. Landlord shall, at
-------------------------------
all times during the term of this Lease, secure and maintain:
(a) All risk property insurance coverage for any
building or improvement on the Property except those required to be insured
by Tenant hereunder in an amount not less than the full replacement cost.
Neither party shall be obligated to insure any furniture, equipment, trade
fixtures, machinery, goods, or supplies which the other party may keep or
maintain in the portion of the Property occupied by such party, or any
alteration, addition or improvement which the other party may make upon the
portion of the Property occupied by such party. If the annual cost to
Landlord for such insurance exceeds the standard rates because of any
material change in the nature of Tenant's operations, Tenant shall, upon the
receipt of appropriate invoices, reimburse Landlord for such increased cost.
(b) Commercial general liability insurance, including
contractual liability, broad form property damage liability, fire legal
liability, premises and completed operations, and medical payments, with
limits not less than one million dollars ($1,000,000) per occurrence and
aggregate, insuring against claims for bodily injury, personal injury and
property damage arising from the use, occupancy or maintenance of the
Premises and the Property. The policy shall contain an exception to any
pollution exclusion which insures damage or injury arising out of heat,
smoke or fumes from a hostile fire. Any general aggregate shall apply on a
per location basis. Such insurance shall be in addition to, and not in lieu
of, insurance required to be maintained by Tenant.
(c) Landlord shall maintain business auto liability
insurance within limits not less than one million dollars ($1,000,000) per
accident covering owned, hired and non-owned vehicles used by Landlord.
Landlord shall maintain umbrella excess liability insurance on a following
form basis in excess of the required commercial general liability, business
auto and employers liability insurance with limits not less than five
million dollars ($5,000,000) per occurrence and aggregate. Landlord shall
carry worker's compensation insurance for all of its employees in statutory
limits in the state in which the Property is located and employer's
liability insurance which afford not less than five hundred thousand dollars
($500,000) for each coverage.
(d) All insurance and all renewals thereof required to
be obtained by Landlord hereunder shall be issued by financially sound
companies authorized to do and doing business in the state in which the
Property is located. Each policy of Landlord's insurance shall expressly
provide that the policy shall not be cancelled or materially altered without
thirty (30) days prior written notice to Tenant and shall remain in effect
notwithstanding any such cancellation or alteration until such notice shall
have been given to Tenant and such period of thirty (30) days shall have
expired. All liability insurance of Landlord (except employer's liability)
shall have Tenant as an additional insured, shall be primary and
noncontributing with any insurance which may be carried by Tenant, shall
23
afford coverage for all claims based on any act, omission, event or
condition that occurred or arose (or the onset of which occurred or arose)
during the policy period, and shall expressly provide that Tenant, although
named as an insured, shall nevertheless be entitled to recover under the
policy for any loss, injury or damage to Tenant. Landlord shall deliver
certificates of insurance, acceptable to Tenant, to Tenant by the complete
execution of this Lease and at least ten (10) days before the expiration of
each policy. Notwithstanding the foregoing, Landlord's liability insurance
(i) shall only insure Tenant to the extent the insurance company is
responsible for the payment of the claim without reimbursement from Landlord
through a deductible or reimbursement, and (ii) shall not prevent Landlord
or Landlord's insurer from taking action against Tenant's insurer to defend
a claim or cover a loss caused, or alleged to have been caused, in whole or
in part, by the negligence or intentional misconduct of Tenant.
ARTICLE 9
---------
Assignment or Sublease
----------------------
9.1 Prohibition. Tenant shall not, directly or indirectly,
-----------
without the prior written consent of Landlord (which consent shall not be
unreasonably withheld), assign this Lease or any interest herein, or
sublease or license the Premises or any part thereof or permit the use or
occupancy of the Premises by any person, organization or entity other than
Tenant. Tenant shall not, directly or indirectly, without the prior written
consent of Landlord, pledge, mortgage or hypothecate this Lease or any
interest herein. This Lease shall not, nor shall any interest herein, be
assignable as to the interest of Tenant involuntarily or by operation of law
without the prior written consent of Landlord, except as a result of any
Change in Control of Tenant which shall not be deemed an assignment for
purposes hereof and shall not require Landlord's consent. Any of the
foregoing acts, without such prior written consent of Landlord, shall be
void and shall, at the option of Landlord, constitute a default that
entitles Landlord to terminate this Lease. Tenant agrees that the instrument
by which any assignment, sublease or license to which Landlord consents is
accomplished shall expressly provide that the assignee, subtenant or
licensee will perform all of the covenants to be performed by Tenant under
this Lease (in the case of a sublease or license, only insofar as such
covenants relate to the portion of the Premises subject to such sublease or
license) as and when performance is due after the effective date of the
assignment, sublease or license and that Landlord will have the right to
enforce such covenants directly against such assignee, subtenant or
licensee. Any purported assignment, sublease or license without an
instrument containing the foregoing provisions shall be void. Tenant shall
in all cases remain liable for the performance by any assignee, subtenant or
licensee of all such covenants. Landlord shall not withhold consent to any
request to assign this Lease, including by operation of law, or sublease or
license all or part of the Premises to an entity affiliated within Tenant
which entity is controlled by, controls or is under common control with
Tenant ("Affiliate of Tenant") and which entity shall not use the Premises
in any way which is a material departure from the historical use (or any
natural evolution of such historical use) of the Premises by Tenant. Without
limiting the foregoing, any assignment, sublease or license by Tenant, even
to an Affiliate of Tenant, shall comply with Article 4 hereof.
---------
9.2 Landlord's Consent or Termination. If Tenant wishes to
---------------------------------
assign this Lease or sublease (or license) all or any part of the Premises
Tenant shall give written notice to Landlord identifying the intended
assignee or subtenant (licensee) by name and address and specifying all of
the terms of the intended assignment or sublease (license). Tenant shall
give Landlord such additional information concerning the intended assignee
or subtenant (licensee) (including complete financial statements and a
business history) and the intended assignment or sublease (license)
(including true copies thereof) as Landlord reasonably requests. Landlord
shall not base any refusal to consent upon the quality of a proposed
subtenant's (licensee's) financial strength if such subtenant (licensee) is
an Affiliate of Tenant or if such subtenant (licensee) has a mutually
beneficial business relationship with Tenant, in addition to the real estate
transaction relating to the Premises, and the operations of such subtenant
(license) on the Premises contribute to such mutually beneficial business
relationship. If a request for consent to a subletting (licensing) or
assignment is to a person or entity other than an Affiliate of Tenant then
for a period of thirty (30) days after such written notice is given by
Tenant, Landlord shall have the right, by giving written notice to Tenant,
(a) to consent in writing to the intended assignment or sublease (license),
unless Landlord reasonably determines not to consent, or (b) to terminate
this Lease with respect to the areas Tenant wishes to sublease or license
(not including areas previously subleased or licensed) if such areas
constitute, in the aggregate with other areas therein then subleased or
licensed, more than twenty-five percent (25%) of the usable square footage
comprising the Premises (and the definition of Premises, the Base Rent,
Tenant's Percentage Share and such other provisions as reasonably necessary
shall be adjusted accordingly by an amendment to this Lease which Landlord
and Tenant shall execute) or
24
terminate the whole Lease in the case of an assignment request, which
termination shall be effective as of the date on which the intended
assignment or sublease (license) would have been effective if Landlord had
not exercised such termination right. If Landlord exercises its right to
terminate this Lease pursuant to this section 9.2 (either with respect to a
-----------
portion of the Premises or the entire Premises), Landlord shall accept the
applicable portion of the Premises in its then current condition provided
the then current condition is then in compliance with the terms hereof and
that Tenant has performed its obligations with respect to the condition of
the Premises and Tenant shall not be required to alter, remodel or restore
the Premises in accordance with section 7.1(a) hereof; provided that Tenant
--------------
shall comply with the other requirements of section 6.3 and Article 7
----------- ---------
hereof.
9.3 Completion. If Landlord consents in writing, Tenant
----------
may complete the intended assignment or sublease (license) subject to the
following covenants: (a) the assignment or sublease (license) shall be on
the same terms, in all material respects, as set forth in the written notice
given by Tenant to Landlord, (b) no assignment or sublease (license) shall
be valid and no assignee or subtenant shall take possession of the Premises
or any part thereof until an executed duplicate original of such assignment
or sublease (license), in compliance with section 9.1 hereof, has been
-----------
delivered to Landlord, and (c) all "excess rent" (as hereinafter defined)
derived from such assignment or sublease (license) (except as permitted in
section 9.5 below) shall be paid to Landlord. Such excess rent shall be
-----------
deemed to be, and shall be paid by Tenant to Landlord as additional rent.
Tenant shall pay such excess rent to Landlord immediately as and when such
excess rent is paid to Tenant. As used in this section 9.3, "excess rent"
-----------
shall mean the amount by which the total money and other economic
consideration to be paid by the assignee or subtenant (licensee) as a result
of an assignment or sublease (license), whether denominated rent or
otherwise, exceeds, in the aggregate, the total amount of rent and other
charges hereunder which Tenant is obligated to pay to Landlord under this
Lease (prorated to reflect the rent allocable to the portion of the Premises
subject to such assignment, sublease or license), less only the reasonable
costs paid by Tenant for additional improvements installed in the portion of
the Premises subject to such assignment, sublease or license by Tenant at
Tenant's sole cost and expense for the specific assignee or subtenant
(licensee) in question and reasonable leasing commissions and other
reasonable third party expenses paid by Tenant in connection with such
assignment, sublease or license, without deduction for carrying costs due to
vacancy or otherwise. The provisions of subsection (c) of this section 9.3
-----------
shall not apply to an assignment or subletting to an Affiliate of Tenant.
9.4 Tenant Not Released. No assignment or sublease or
-------------------
license whatsoever shall release Tenant from Tenant's obligations and
liabilities under this Lease or alter the primary liability of Tenant to pay
all rent and to perform all obligations to be paid and performed by Tenant.
No assignment or sublease or license shall amend or modify this Lease in any
respect, and every assignment, sublease and license shall be subject and
subordinate to this Lease. The acceptance of rent by Landlord from any other
person, organization or entity shall not be deemed to be a waiver by
Landlord of any provision of this Lease. Consent to one assignment or
sublease shall not be deemed consent to any subsequent assignment, sublease,
or license. Tenant shall pay to Landlord all reasonable, third party costs
and shall reimburse Landlord for all reasonable third party expenses
incurred by Landlord in connection with any assignment, sublease or license
requested by Tenant. If any assignee, subtenant, licensee or successor of
Tenant defaults in the performance of any obligation to be performed by
Tenant under this Lease, Landlord may proceed directly against Tenant
without the necessity of exhausting remedies against such assignee,
subtenant, licensee or successor. Landlord may consent to subsequent
assignments, subleases or licenses or amendments or modifications to this
Lease with assignees, subtenants, licensees or successors of Tenant, without
notifying Tenant or any successor of Tenant and without obtaining any
consent thereto from Tenant or any successor of Tenant, and such action
shall not release Tenant from liability under this Lease as and to the
extent such liability exists hereunder, but any such lease amendment shall
not cause the scope of Tenant's liability to increase. Tenant shall be
liable during any extension period exercised hereunder even if exercised by
an assignee. However, if when Tenant assigns this Lease Tenant does not
assign any extension rights and expressly excludes the same from the
assignment document and notifies Landlord of same, then all extension rights
hereunder shall expire and such assignee would only be able to extend the
term hereof by agreement with Landlord, in which case, Tenant shall not be
liable for liability accruing during any such extension periods.
9.5 Landlord Leasing and Other Action. If Landlord desires
---------------------------------
to lease a portion of the Property it occupies and such area, in the
aggregate along with other areas then being leased, includes more than
twenty-five percent (25%) of the usable square footage of building floor
area comprising the Property (excluding the Premises) other than in
connection with a sale/leaseback or other lease based financing arrangement
and other than to an entity
25
that controls, is controlled by or is under common control with landlord
("Affiliate of Landlord"), Landlord shall offer to lease such area which it
desires to lease, excluding those areas already leased at such time, to
Tenant first and upon notice of such offer Tenant may, by delivering written
notice to Landlord within thirty (30) days after receipt of Landlord's
offer, elect to add such area to the Premises. If Tenant elects to add such
area to the Premises, Landlord and Tenant shall execute an amendment to this
Lease to amend the definition of Premises, increase the Base Rent based upon
the additional square feet of usable building floor area at the same rent
per square foot of usable building floor area Tenant is then obligated to
pay on the remainder of the Premises, subject to escalation, increase
Tenant's Percentage Share, provide for the construction of necessary
demising walls for the new addition to the Premises at Tenant's sole cost,
and provide for such other adjustment as reasonably necessary. Landlord
shall not in connection with leasing any portion of the Property, materially
interfere with Tenant's operations on the Premises. Any lease for a portion
of the Property entered into between Landlord and another tenant which
tenant is an Affiliate of Landlord shall contain a provision which requires
the rent paid under such lease, if below fair market rental value, to
escalate to a fair market rental value upon the acquisition by Tenant of the
space leased under such lease pursuant to section 15.6 hereof and shall
------------
contain a reasonable mechanism for determining a fair market rental value
based on an appraisal or appraisals. Landlord shall not enter into any lease
with a tenant other than Tenant (except in connection with a sale/leaseback
or other lease based financing agreement) for a portion of the Property
consisting of twenty-five percent (25%) or more of the usable square footage
of building floor area comprising that portion of the Property which
excludes the Premises, for a term exceeding seven (7) years at a rental
which is more than thirty-three percent (33%) below the fair market rental
value for such space, as determined by an appraisal prepared by an
independent, qualified MAI appraiser at the time such lease is entered into
unless, such lease includes a provision allowing the landlord thereunder to
terminate the lease and/or escalate the rental to a fair market rental (with
a reasonable mechanism for determining a fair market rental value based on
an appraisal) at such time as Tenant acquires the space leased under such
lease pursuant to section 15.6 hereof. Such leases which are not more than
------------
thirty-three percent (33%) below fair market rental value at the time of
execution but which nevertheless become more than thirty-three percent (33%)
below fair market rental value over time shall not be required to include
the escalation/termination provision. Landlord shall not enter into any
lease (except in connection with a sale/leaseback or other lease based
financing arrangement) which contains an option for the lessee to purchase
the Property unless such lease specifies that such lease or option shall
terminate upon the acquisition of the Property by Tenant under section
-------
15.6(b) hereof. Except as specifically set forth in this section 9.5, no
------- -----------
lease entered into by Landlord shall terminate or otherwise be adversely
affected by Tenant's acquisition of the Property pursuant to any right
granted herein.
ARTICLE 10
----------
Events of Default and Remedies
------------------------------
10.1 Default by Tenant. The occurrence of any one or more
-----------------
of the following events ("Event of Default") shall constitute a breach of
this Lease by Tenant:
(a) Tenant fails to pay any Base Rent, or any
additional monthly rent under Article 3 hereof, or any additional rent or
---------
other amount of money or charge payable by Tenant hereunder as and when such
rent becomes due and payable and such failure continues for more than five
(5) days after Landlord gives written notice thereof to Tenant; or
(b) Tenant fails to perform or breaches any other
agreement or covenant of this Lease to be performed or observed by Tenant as
and when performance or observance is due and such failure or breach
continues for more than thirty (30) days after Landlord gives written notice
thereof to Tenant; provided, however, that if, by the nature of such
agreement or covenant, such failure or breach cannot reasonably be cured
within such period of thirty (30) days, an Event of Default shall not exist
as long as Tenant commences with due diligence and dispatch the curing of
such failure or breach within such period of thirty (30) days and, having so
commenced, thereafter prosecutes with diligence and dispatch and completes
the curing of such failure or breach.
The occurrence of the following events shall not in and of
themselves be considered an Event of Default in the absence of another Event
of Default but the occurrence of any of them shall allow, notwithstanding
any provision in this Lease to the contrary, the Landlord to immediately
cease or cause Tenant and/or its contractors to cease any construction or
improvements on the Premises being done by Landlord or Tenant until such
time as Tenant provides
26
such security reasonably approved by Landlord for completion and payment,
and Landlord may consider the effect of bankruptcy laws and other laws in
evaluating such security (this shall not be construed to allow Landlord to
cease performing ordinary maintenance, repair and replacement obligations
hereunder absent an Event of Default hereunder):
(a) Tenant (i) files, or consents by answer or
otherwise to the filing against it of, a petition for relief or
reorganization or arrangement or any other petition in bankruptcy or for
liquidation or to take advantage of any bankruptcy, insolvency or other
debtors' relief law of any jurisdiction, (ii) makes an assignment for the
benefit of its creditors, or (iii) consents to the appointment of a
custodian, receiver, trustee or other officer with similar powers of Tenant
or of any substantial part of Tenant's property; or
(b) Without consent by Tenant, a court or government
authority enters an order, and such order is not vacated within sixty (60)
days, (i) appointing a custodian, receiver, trustee or other officer with
similar powers with respect to Tenant or with respect to any substantial
part of Tenant's property, or (ii) constituting an order for relief or
approving a petition for relief or reorganization or arrangement or any
other petition in bankruptcy or for liquidation or to take advantage of any
bankruptcy, insolvency or other debtors' relief law of any jurisdiction, or
(iii) ordering the dissolution, winding-up or liquidation of Tenant; or
(c) This Lease or any estate of Tenant hereunder is
levied upon under any attachment or execution and such attachment or
execution is not vacated within sixty (60) days.
10.2 Termination/Remedies. If an Event of Default occurs
--------------------
then, subject to section 15.15 hereof, Landlord shall have the right at any
-------------
time to terminate this Lease by written notice or to terminate Tenant's
right to possession of the Premises by written notice. Upon such termination
of this Lease or of Tenant's right to possession, Landlord shall have, in
addition to all remedies available at law or in equity, the full and
immediate right to possession of the Premises and, to the extent permitted
by law now or at such time, Landlord shall have the right to recover from
Tenant all unpaid rent which had been earned at the time of termination, all
unpaid rent for the balance of the term of this Lease after termination
(less the reasonable rental value of the Premises for such period, all
discounted to then present value at 8.0% per annum), and all other amounts
necessary to compensate Landlord for all the detriment proximately caused by
Tenant's failure to perform all of Tenant's obligations under this Lease or
which in the ordinary course of things would be likely to result therefrom,
including without limitation, a limited right to consequential damages. In
order for Landlord to recover consequential damages against Tenant, the act
or omission giving rise to such consequential damage claim must have been
committed by Tenant in bad faith through willful misconduct. Absent a
finding of such bad faith and willful misconduct on Tenant's part, Landlord
waives any claim to consequential damages. In addition, and notwithstanding
the foregoing to the contrary, Landlord's right to recover an award for
damages, whether actual or consequential (excluding damages related to
payment of Base Rent and additional rent) shall be limited to and shall not
exceed Two Hundred Million Dollars ($200,000,000.00). Further
notwithstanding the foregoing, the maximum damages that Landlord may recover
for Base Rent and additional rent related to time periods following the
termination of this Lease or following termination of Tenant's right to
possession of the Premises, shall be limited to three years of Base Rent and
additional rent or that amount which Landlord is able to recover by
applicable law, whichever is less.
10.3 Continuation. Subject to section 15.15 hereof, if an
------------ -------------
Event of Default occurs and is continuing, this Lease shall continue in
effect for so long as Landlord does not terminate this Lease and Landlord
shall have the right to enforce all its rights and remedies under this
Lease, including the right to recover all rent as it becomes due under this
Lease and all other amounts necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform all of Tenant's
obligations under this Lease, including without limitation, consequential
damages. Acts of maintenance or preservation or efforts to relet the
Premises or the appointment of a receiver upon initiative of Landlord to
protect Landlord's interest under this Lease shall not constitute a
termination of Tenant's right to possession unless written notice of
termination is given by Landlord to Tenant.
10.4 Remedies Cumulative. Except as limited in this Lease
-------------------
(including, without limitation, section 15.15 hereof), upon the occurrence
-------------
of an Event of Default or upon the occurrence of a default hereunder by
Landlord, the non-defaulting party shall have the right to exercise and
enforce all rights and remedies granted or
27
permitted by law. The remedies provided for in this Lease are cumulative and
in addition to all other remedies available at law or in equity by statute
or otherwise. Exercise by Landlord of any remedy shall not be deemed to be
an acceptance of surrender of the Premises by Tenant, either by agreement or
by operation of law. Surrender of the Premises can be effected only by the
written agreement of Landlord and Tenant.
10.5 Tenant's Primary Duty. All agreements and covenants
---------------------
to be performed or observed by Tenant under this Lease shall, except as
otherwise specifically set forth herein, be at Tenant's sole cost and
expense and without any abatement of rent. If Tenant fails to pay any sum of
money to be paid by Tenant or to perform any other act to be performed by
Tenant under this Lease and such failure results in an Event of Default,
Landlord shall have the right, but shall not be obligated, and without
waiving or releasing Tenant from any obligations of Tenant, to make any such
payment or to perform any such other act on behalf of Tenant in accordance
with this Lease. All sums so paid by Landlord and all costs incurred or paid
by Landlord shall be deemed additional rent hereunder and Tenant shall pay
the same to Landlord within ten (10) days following written demand, together
with interest on all such sums and costs from the date of expenditure by
Landlord to the date of repayment by Tenant at the prime rate, as published
by the Wall Street Journal plus three percent (3%) or the highest legal
-------------------
rate, if less.
10.6 Abandoned Property. If Tenant abandons the Premises,
------------------
or is dispossessed by process of law or otherwise, any movable furniture,
equipment, trade fixtures or personal property belonging to Tenant and left
in the Premises shall, after the passage of thirty (30) days from the date
of abandonment or dispossession and consistent with section 7.2 hereof, be
-----------
deemed to be abandoned, at the option of Landlord, and Landlord shall have
the right to sell or otherwise dispose of such personal property in any
commercially reasonable manner.
10.7 Landlord Default. If Landlord defaults under this
----------------
Lease, Tenant shall give written notice to Landlord specifying such default
with particularity, and Landlord shall have thirty (30) days after receipt
of such notice within which to cure such default, or such longer period of
time as is reasonably required to cure such default if Landlord is
diligently prosecuting such cure after such default notice is delivered by
Tenant to Landlord (any such default by Landlord that continues following
the giving of the foregoing notice and expiration of the foregoing cure
period shall be hereinafter referred to as a "Landlord Default"). In the
event of any Landlord Default and, except as set forth hereinbelow, Tenant's
exclusive remedy shall be (i) the right to bring an action for actual
damages and consequential damages (as limited pursuant to this section
-------
10.7), (ii) the limited right under Article 6 to designate a new Site
----- ---------
Manager; (iii) the limited self help rights specifically articulated in
section 10.7 hereof; (iv) Tenant's rights under Article 15; (v) Tenant's
------------ ----------
limited set off rights as set forth in this section 10.7; and (vi) the right
------------
to bring an action for injunctive relief and Tenant shall not, and hereby
waives any right to, terminate this Lease or ▇▇▇▇▇ or set off against rent
(except as permitted herein). In order for Tenant to recover consequential
damages against Landlord, the act or omission giving rise to such
consequential damage claim must have been committed by Landlord in bad faith
through willful misconduct. Absent a finding of such bad faith and willful
misconduct on Landlord's part, Tenant waives any claim to consequential
damages. In the event of Landlord Default related to its obligations set
forth in Article 6 hereof, and such default is not cured within thirty (30)
---------
days (or such longer period of time if reasonably required to cure such
default if Landlord is diligently prosecuting such cure) after notice is
delivered by Tenant to Landlord of such default (which such notice shall
reference this self help right), Tenant may elect to cure the applicable
Landlord Default and Landlord shall pay the reasonable, third party costs
thereof, including interest thereon from the date of expenditure at the
prime rate, as published by The Wall Street Journal plus three percent (3%)
-----------------------
or the highest legal rate, if less, but Tenant may not ▇▇▇▇▇ or set off such
amounts from rent due hereunder unless and until either (i) Landlord
acknowledges that it owes the amount claimed by Tenant in writing or (ii)
Tenant has obtained a final, non-appealable award from an arbitrator, if the
parties have submitted to binding arbitration, confirming that Landlord owes
such amount to Tenant, at which time Tenant may set off the reasonable,
third party costs of curing Landlord's default ("Tenant's Self Help Costs")
each month against only fifty percent (50%) of monthly Base Rent until paid,
or if the time remaining in the term, as it may be extended by Tenant, is
such that Tenant cannot fully recover such amount from fifty percent (50%)
of Base Rent, then against all Base Rent until paid. Tenant may cure any
defaults by Landlord under Article 6 prior to the expiration of the
---------
applicable cure period set forth above if Tenant reasonably deems the
situation to be an emergency (meaning an immediate threat to persons or
substantial property) but Landlord shall not be obligated to reimburse
Tenant for the cost thereof and Tenant may not set off or ▇▇▇▇▇ the cost
thereof against rent unless: (i) the costs incurred were commercially
reasonable; (ii) Tenant notified Landlord through the Site Manager of such
emergency in a manner reasonable under the circumstances (in writing if
reasonably possible), and, if reasonable under the circumstances, a
reasonable
28
opportunity to cure the same; and (iii) Tenant limits its cure actions and
the cost thereof to those actions required to eliminate the emergency, as
opposed to completely curing the default if such emergency can be eliminated
without such complete cure. In addition, Tenant shall have the right until
such time as Landlord delivers to Tenant a Set Off Limitation Letter, as
defined below, to set off each month against only fifty percent (50%) of
monthly Base Rent until paid, or if the time remaining in the term, as it
may be extended by Tenant, is such that Tenant cannot fully recover such
amount from fifty percent (50%) of Base Rent, then against all Base Rent
until paid, any amount which either (i) Landlord acknowledges that it owes
to Tenant in writing or (ii) is awarded to Tenant by an arbitrator in a
final, non-appealable award, if the parties have submitted to binding
arbitration, less any amounts awarded to or otherwise owed to Landlord by
Tenant. If Landlord ever attempts to sell or finance the Property (either
through conventional deed of trust financing, sale/leaseback, or any other
type of loan or financing where the Property is used in any manner to secure
the loan), and the lender, landlord, buyer or other party to such
transaction requests in writing that Landlord amend Tenant's set off rights
herein or indicates in writing that such set off rights are a material
impediment to such transaction, Landlord may send a letter ("Set Off
Limitation Letter") to Tenant eliminating Tenant's rights to set off from
Base Rent any amount other than Tenant's Self Help Costs at which time
Tenant's rights to set off from Base Rent any amount other than Tenant's
Self Help Costs shall automatically terminate and be of no further force or
effect without any further act of Tenant notwithstanding that section 15.7
------------
hereof would otherwise require Tenant to execute a written document to amend
this Lease. Tenant shall within thirty (30) days of written request from
Landlord or any potential buyer or lender (or sale leaseback landlord)
execute and deliver an estoppel letter which may be relied upon by Landlord
and any potential buyer or lender (or sale leaseback landlord) confirming
receipt of the Set Off Limitation Letter and the termination of all set off
rights other than Tenant's limited right to set off Tenant's Self Help Costs
as allowed hereinabove. The failure of Tenant to deliver such estoppel
certificate within such time period shall be a material default.
Notwithstanding any other provision of this Lease, Tenant's right to recover
an award for damages, whether actual or consequential, shall be limited to
and shall not exceed Two Hundred Million Dollars ($200,000,000.00).
ARTICLE 11
----------
Damage or Destruction
---------------------
11.1 Restoration. If the Property or the Premises, or any
-----------
part thereof, other than improvements and buildings on Expansion Areas, is
damaged by fire or other casualty during the term of this Lease, and this
Lease is not terminated pursuant to section 11.2 hereof, Landlord shall
------------
repair such damage and restore the Property and the Premises expeditiously
to the extent commercially reasonable, subject to force majeure, in
accordance with all laws and to substantially the same condition in which
the Property and the Premises existed before the occurrence of such fire or
other casualty (excluding any improvements made by or on behalf of Tenant
which shall be restored by Tenant) and this Lease shall, subject to this
section 11.1, remain in full force and effect. Landlord shall not be
------------
obligated to repair any damage to, or to make any replacement of, any
movable furniture, equipment, trade fixtures or personal property in the
Premises. Tenant shall not be entitled to any reduction or abatement in
rent. Landlord and Tenant shall reasonably cooperate with each other to
mitigate any material interference with their respective operations on the
Property through temporary relocations if reasonably practical, or other
measures designed to mitigate the adverse effect of such casualty event. If
any improvements or buildings located on the Expansion Area are damaged by
fire or other casualty during the term of this Lease, Tenant shall as soon
as practicable, render such Expansion Area safe and shall promptly repair
such damage and restore the Expansion Area and all buildings and
improvements thereon to substantially the same condition as existed before
the occurrence of such fire or other casualty or, Tenant may elect to
terminate the Lease with respect to such Expansion Area and release in
writing any and all rights it may have in and to the Expansion Area
including without limitation, any rights under section 7.5 hereof in which
-----------
event Tenant shall raze the buildings and other improvements thereon, clean
all debris, render the site safe and sightly, provide documentation
reasonably required by Landlord that the Expansion Area is in compliance
with all laws and, to the extent reasonably practicable, restore any prior
landscaping, sod, parking areas, drives or other improvements which existed
prior to Tenant's construction.
11.2 Termination of Lease. If the Property or the
--------------------
Premises, or any part thereof, is damaged by fire or other casualty during
the term of this Lease and (a) such fire or other casualty occurs during the
last two (2) years of the term of this Lease and the repair and restoration
work to be performed by Landlord in accordance with section 11.1 hereof
------------
cannot, as reasonably estimated by Landlord, be completed within the lesser
of two (2) months or ten percent (10%) of the then remaining term of the
Lease, after the occurrence of such fire or other casualty, or (b) the
29
repair and restoration work to be performed by Landlord in accordance with
section 11.1 hereof cannot, as reasonably estimated by Landlord, be
------------
completed within six (6) months after the occurrence of such fire or other
casualty, then, in any such event, Landlord and Tenant shall have the right,
by giving written notice to the other party hereto within sixty (60) days
after the occurrence of such fire or other casualty, to terminate this Lease
only with respect to the damaged portion of the Property or Premises as of
the date of such notice. Notwithstanding the foregoing to the contrary
Landlord shall not elect to terminate this Lease after a casualty event if
there are at least ten (10) years left remaining in the then current term of
this Lease with respect to all portions of the Premises upon which
restoration is required, or if Tenant exercises extension rights set forth
herein thereby effectively extending the term hereof for no less than ten
(10) years with respect to all portions of the Premises upon which
restoration is required. If Landlord and Tenant do not exercise the right to
terminate this Lease in accordance with this section 11.2, Landlord and
------------
Tenant respectively shall repair such damage and restore the Property and
the Premises in accordance with section 11.1 hereof and this Lease shall,
------------
subject to section 11.1 hereof, remain in full force and effect. A total
------------
destruction of the Property shall automatically terminate this Lease
effective as of the date of such total destruction. With respect to any
partial termination, Landlord and Tenant shall in good faith execute an
amendment hereto for the purpose of altering the definition of Premises, the
Base Rent and Tenant's Percentage Share accordingly as well as other terms
as reasonably necessary. Any complete termination of this Lease (or partial
termination which terminates this Lease with respect to the Expansion Area
and GG Building) resulting from Landlord's election to terminate as allowed
in this section 11.2 shall trigger Tenant's rights under section 15.6(a)
------------ ---------------
hereof to purchase the Expansion Area and GG Building, except that Tenant's
deadline for exercising such right shall expire thirty (30) days after
Landlord's notice of election to terminate this Lease. In the event this
Lease is terminated due to a casualty event and Tenant does not exercise any
purchase rights hereunder, then, all insurance proceeds paid under policies
maintained by Landlord shall be paid to Landlord, and all insurance proceeds
paid under policies maintained by Tenant shall be paid to Tenant.
ARTICLE 12
----------
Eminent Domain
--------------
12.1 Condemnation. Landlord shall have the right to
------------
terminate this Lease if twenty percent (20%) or more of the usable square
footage of floor area comprising the Property (excluding the Premises) or
twenty percent (20%) or more of the usable square footage of floor area
comprising the Premises or any part of the Property which eliminates access
to the Property or which includes twenty percent (20%) of more of the
parking spaces on the Property (which can not be reasonably replaced by
Landlord in a proximate location on the Property) is taken by exercise of
the power of eminent domain during the term of this Lease. Tenant shall have
the right to terminate this Lease if twenty percent (20%) or more of the
usable square footage of floor area comprising the Premises is taken by
exercise of the power of eminent domain during the term of this Lease or any
part of the Property is taken by exercise of the power of eminent domain
during the term of this Lease and as a result thereof access to the Premises
is eliminated or twenty percent (20%) or more of the parking spaces on the
Property are eliminated and can not be replaced by Landlord in a proximate
location on the Property. In each such case, Landlord or Tenant shall
exercise such termination right by giving written notice to the other within
thirty (30) days after the date of such taking. If either Landlord or Tenant
exercises such right to terminate this Lease in accordance with this section
-------
12.1, this Lease shall terminate as of the date of such taking and in the
----
event of a complete termination caused by Landlord's election to terminate,
Tenant's rights under section 15.6(a) to purchase the Expansion Area shall
---------------
be triggered, except Tenant's deadline for exercising such right shall
expire thirty (30) days after Landlord's notice of election to terminate the
Lease. If neither Landlord nor Tenant exercises such right to terminate this
Lease in accordance with this section 12.1 or if neither party has the right
------------
to terminate the entire Lease, this Lease shall terminate as to the portion
of the Premises so taken as of the date of such taking and shall remain in
full force and effect as to the portion of the Premises not so taken, and
the Base Rent and Tenant's Percentage Share shall be reduced proportionately
as of the date of such taking. If all of the Premises is taken by exercise
of the power of eminent domain during the term of this Lease, this Lease
shall terminate as of the date of such taking.
12.2 Award. If all or any part of the Premises is taken by
-----
exercise of the power of eminent domain, all awards, compensation, damages,
income, rent and interest payable in connection with such taking shall,
except as expressly set forth in this section 12.2, be paid to and become
------------
the property of Landlord, and Tenant hereby assigns to Landlord all of the
foregoing. Without limiting the generality of the foregoing, Tenant shall
have no claim against Landlord or the entity exercising the power of eminent
domain for the value of the leasehold estate created by
30
this Lease or any unexpired term of this Lease. Tenant shall have the right
to claim and receive directly from the entity exercising the power of
eminent domain only the share of any award determined to be owing to Tenant
for relocation expenses as well as any separate award granted directly to
Tenant provided Tenant does not seek an allocated portion of Landlord's
award hereunder and provided that such separate award shall not diminish or
reduce in any way any award Landlord may otherwise be entitled to for such
taking. If Tenant builds a building on an Expansion Area and such Expansion
Area is taken in a condemnation, Landlord shall pay a portion of any award
actually received to Tenant which portion shall be reasonably determined by
Landlord and Tenant or if they can't agree, based upon an appraisal prepared
by a qualified appraiser hired by Landlord and approved by Tenant, such
approval not to be unreasonably withheld or delayed, and based upon the
relative fair market value of the land and the buildings in the area taken.
If Landlord and Tenant are unable to agree upon an appraiser the selection
of the appraiser shall be resolved by an arbitrator in accordance with
section 15.11 or section 15.16 hereof. The appraiser shall determine fair
------------- -------------
market value for all land taken and each building taken and Tenant's share
of any award paid to Landlord shall be a fraction where the numerator is
equal to the value of building on Expansion Area taken and the denominator
is equal to the value of land in Expansion Area taken plus the value of land
in other areas taken plus the value of buildings in the Expansion Area taken
plus the value of buildings in other areas taken. In no event shall the
portion of the award allocated to the Expansion Area exceed the unamortized
cost of the building construction on the Expansion Area, amortized straight
line over the reasonable useful life of such building. Tenant shall deliver
such financial information as reasonably requested by Landlord so that
Landlord may accurately determine such unamortized cost. If prior to a
condemnation Tenant constructs a capital improvement on the Premises which
costs in excess of Five Million Dollars ($5,000,000.00), other than on an
Expansion Area, and this Lease terminates with respect to the portion of the
Premises upon which such capital improvement is located as a result of such
condemnation, then, subject to the rights of Landlord's lenders and prime
landlords, if any, Landlord shall allocate a portion of any condemnation
award actually received to distribute to Tenant for the loss of such capital
improvement. Notwithstanding the fact that a lender or prime landlord may,
if it has the right to do so, keep all or part of the award rather than
distribute a portion of it to Tenant as set forth above, the portion of the
award which otherwise would be paid to Tenant hereunder, if any, shall be
due from Landlord to Tenant, even if such lender/prime landlord elects to
retain such award and prepay rent or pay down the debt. The portion of
condemnation award allocated to Tenant for such capital improvement shall be
reasonably determined by Landlord and shall be the lesser of the replacement
cost of such capital improvement or the unamortized cost of such capital
improvement, amortized straight line over the reasonable useful life of such
capital improvement. Tenant shall deliver such financial and other
information as reasonably requested by Landlord so that Landlord may
accurately determine such allocated portion.
12.3 Temporary Use. Notwithstanding sections 12.1 and 12.2
------------- ------------- ----
hereof to the contrary, if the use of all or any part of the Premises is
taken by exercise of the power of eminent domain during the term of this
Lease on a temporary basis for a period less than two (2) years, this Lease
shall continue in full force and effect, Tenant shall continue to pay all of
the rent and to perform all of the covenants of Tenant in accordance with
this Lease, to the extent reasonably practicable under the circumstances,
and a portion of the condemnation proceeds in respect of such temporary
taking of the Premises (as opposed to any other part of the Property) shall
be paid to Tenant. In the event of a temporary taking of all or any
substantial part of the Premises of two (2) years or more, Tenant shall have
the right to terminate this Lease for a period of ninety (90) days from the
first day of such taking in which event Tenant shall not receive any part of
any award.
12.4 Definition of Taking/Notice. As used herein, a
---------------------------
"taking" means the acquisition of all or part of the Property for a public
use by exercise of the power of eminent domain or voluntary conveyance in
lieu thereof and the taking shall be considered to occur as of the earlier
of the date on which possession of the Property (or part so taken) by the
entity exercising the power of eminent domain is authorized as stated in an
order for possession or the date on which title to the Property (or part so
taken) vests in the entity exercising the power of eminent domain. Landlord
shall notify Tenant of any substantial, acute threat of a taking involving
the Premises after Landlord becomes aware of such threat. Landlord shall not
voluntarily agree to any taking without Tenant's prior written consent,
which consent shall not be unreasonably withheld or delayed.
31
ARTICLE 13
----------
Subordination and Sale
----------------------
13.1 Subordination. This Lease shall be subject and
-------------
subordinate at all times to the lien of all mortgages, deeds of trust and
prime leases securing any amount or amounts whatsoever which may now exist
or hereafter be placed on or against the Property or on or against
Landlord's interest or estate therein, all without the necessity of having
further instruments executed by Tenant to effect such subordination.
Notwithstanding the foregoing, in the event of a foreclosure of any such
mortgage or deed of trust or of any other action or proceeding for the
enforcement thereof, or of any sale thereunder, or termination of such prime
lease, then: (i) Tenant's operation of its business as permitted hereunder
shall not be materially interfered with except as permitted under this Lease
upon the occurrence of an Event of Default; (ii) Tenant rights hereunder,
including its purchase rights shall not be materially interfered with except
as permitted under this Lease upon the occurrence of an Event of Default and
provided that such rights shall be preserved in a sale/leaseback by
provision in the prime lease with respect to the Expansion Area, for the
exclusion or right to buy back the Expansion Area; (iii) this Lease shall
not be terminated or extinguished except as permitted under this Lease upon
the occurrence of an Event of Default; and (iv) the rights and possession of
Tenant hereunder shall not be disturbed except as permitted under this Lease
upon the occurrence of an Event of Default, and, subject to the foregoing,
Tenant shall attorn to the person who acquires Landlord's interest hereunder
through any such mortgage or deed of trust. Tenant agrees to execute,
acknowledge and deliver upon demand such further instruments evidencing such
subordination of this Lease to the lien of all such mortgages, deeds of
trust and leases as may reasonably be required by Landlord provided such
subordination agreement contains the non-disturbance protection set forth in
subparts (i), (ii), (iii) and (iv) above. Notwithstanding the foregoing, if
the holder of any such mortgage or deed of trust or the lessor under such
prime lease requests that this Lease be made superior, rather than
subordinate to such deed of trust, mortgage or prime lease, then Tenant
agrees to execute, acknowledge and deliver upon demand such instruments
effectuating such priority.
13.2 Sale of the Property. If any Landlord, including the
--------------------
original Landlord hereunder sells, or transfers the Property to an entity
other than an Affiliate of Landlord (or other than a purchaser under a
sale/leaseback transaction or other leased based financing transaction),
then all liabilities and obligations on the part of the selling/transferring
Landlord under this Lease first accruing after such sale or transfer shall
terminate and the selling/transferring Landlord shall automatically be
released therefrom, and thereupon all such liabilities and obligations shall
be binding upon the new owner. Tenant agrees to attorn to such new owner.
Notwithstanding the foregoing, no sale or transfer of the Property by a
Landlord to (i) an Affiliate of Landlord, or (ii) a purchaser under a
sale/leaseback transaction or other lease based financing transaction, shall
release selling/transferring Landlord from Landlord's obligations and
liabilities under this Lease or alter the primary liability of the
selling/transferring Landlord to perform all obligations to be performed by
Landlord. Any such sale to (i) an Affiliate of the Landlord, or (ii) a
purchaser under a sale/leaseback transaction or other lease based financing
transaction, shall not amend or modify this Lease in any respect except with
respect to the creation of a prime lease in the case of a sale/leaseback
transaction to which Tenant shall subordinate this Lease, subject to the
provisions of section 13.1 and Tenant may proceed directly against the
------------
selling/transferring Landlord without the necessity of exhausting remedies
against such purchaser. It is understood and agreed that a sale of the
Property by Landlord to any entity (other than Tenant) shall not limit or
diminish any of Tenant's rights hereunder except as set forth in this
section 13.2 and any such sale shall be subject to this Lease.
------------
13.3 Estoppel Certificate. At any time and from time to
--------------------
time, either party shall, upon the request of the other and in addition to
any certificate requested under section 10.7 hereof related to limitations
------------
on set off rights, within thirty (30) days after written request by
Landlord, execute, acknowledge and deliver to the non-requesting party a
certificate certifying: (a) that this Lease is unmodified and in full force
and effect (or, if there have been modifications, that this Lease is in full
force and effect as modified, and stating the date and nature of each
modification); (b) the Commencement Date and the Expiration Date determined
in accordance with Article 2 hereof and the date, if any, to which all rent
and other sums payable hereunder have been paid; (c) that no notice has been
received of any default hereunder which has not been cured, except as to
defaults specified in such certificate; (d) that to the best of the
non-requesting party's knowledge, the requesting party is not in default
under this Lease, except as to defaults specified in such certificate; and
(e) such other matters as may be reasonably requested by the requesting
party or any actual or prospective purchaser or mortgage lender. Any such
certificate may be relied upon by the requesting party and any actual or
prospective purchaser or mortgage lender of the Property or any part
thereof, or any prospective assignee or subtenant or Affiliate of Tenant. At
any time and from time to time, Tenant shall, within thirty (30) days after
written request by Landlord, deliver to Landlord copies of all current
financial statements (including a balance sheet, an income statement, and an
accumulated retained earnings statement), annual
32
reports, and other financial and operating information and data of Tenant
prepared by Tenant in the course of Tenant's business. Unless available to
the public, Landlord shall disclose such financial statements, annual
reports and other information or data only to actual or prospective
purchasers or mortgage lenders of the Property or any part thereof, and
otherwise keep them confidential unless other disclosure is required by law.
ARTICLE 14
----------
Notices
-------
All requests, approvals, consents, notices and other
communications given by Landlord or Tenant under this Lease shall be
properly given only if made in writing and either deposited in the United
States mail, postage prepaid, certified with return receipt requested,
delivered by hand (which may be through a messenger or recognized delivery,
courier or air express service) or delivered by facsimile (with a copy
immediately deposited in the United Stated mail, postage prepaid, certified
with return receipt requested) and addressed as follows:
To Tenant at Monsanto Company
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile ▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President, Corporate Services
Mail Zone: E3NA
Monsanto Company
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile ▇▇▇-▇▇▇-▇▇▇▇
Attn: General Counsel
Mail Zone: A3
or at such other place as Tenant may from time to time designate in a
written notice to Landlord;
to Landlord at Pharmacia Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile ▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Director, Global Real Estate
Pharmacia Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile ▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Counsel
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇, P.C.
2000 Equitable Building
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile ▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Attorney at Law
33
or at such other place as Landlord may from time to time designate in a
written notice to Tenant. Such requests, approvals, consents, notices and
other communications shall be effective on the date of receipt (evidenced by
the certified mail receipt) if mailed or on the date of hand delivery if
hand delivered or upon receipt, if faxed (evidenced by fax confirmation and
followed by a copy delivered via U.S. Mail as required above). If any such
request, approval, consent, notice or other communication is not received or
cannot be delivered due to a change in the address of the receiving party of
which notice was not previously given to the sending party or due to a
refusal to accept by the receiving party, such request, approval, consent,
notice or other communication shall be effective on the date delivery is
attempted. Any request, approval, consent, notice or other communication
under this Lease may be given on behalf of a party by the attorney for such
party.
ARTICLE 15
----------
Miscellaneous
-------------
15.1 General. The words "Landlord" and "Tenant" as used
-------
herein shall include the plural as well as the singular. The words
"include," "includes" and "including" shall be deemed to be followed by the
phrase "without limitation". If there is more than one Tenant, the
obligations hereunder imposed upon Tenant shall be joint and several. Time
is of the essence of this Lease and each and all of its provisions. This
Lease shall benefit and bind Landlord and Tenant and the permitted personal
representatives, heirs, successors and assigns of Landlord and Tenant. If
any provision of this Lease is determined to be illegal or unenforceable,
such determination shall not affect any other provision of this Lease and
all such other provisions shall remain in full force and effect. This Lease
shall be governed by and construed in accordance with the laws of the state
in which the Property is located except as otherwise provided in section
-------
15.11 or section 15.16 hereof.
----- -------------
15.2 No Waiver. The waiver by Landlord or Tenant of any
---------
breach of any covenant in this Lease shall not be deemed to be a waiver of
any subsequent breach of the same or any other covenant in this Lease, nor
shall any custom or practice which may grow up between Landlord and Tenant
in the administration of this Lease be construed to waive or to lessen the
right of Landlord or Tenant to insist upon the performance by Landlord or
Tenant in strict accordance with this Lease. The subsequent acceptance of
rent hereunder by Landlord or the payment of rent by Tenant shall not waive
any preceding breach by Tenant of any covenant in this Lease, nor cure any
Event of Default, nor waive any forfeiture of this Lease or unlawful
detainer action, other than the failure of Tenant to pay the particular rent
so accepted, regardless of Landlord's or Tenant's knowledge of such
preceding breach at the time of acceptance or payment of such rent.
15.3 Attorneys' Fees. If there is any legal action
---------------
(including without limitation arbitration and/or mediation) by Landlord to
enforce any obligation or provision hereof and Landlord prevails in such
action in whole or in substantial part, then, notwithstanding any provision
herein to the contrary, Tenant shall pay to Landlord all costs and expenses,
including reasonable attorneys' fees, arbitrator's fees, mediator's fees and
disbursements incurred by Landlord in such action or proceeding and in any
appeal in connection therewith. If Landlord recovers a judgment or award in
any such action, proceeding or appeal, such costs, expenses and attorneys'
fees and disbursements shall be included in and as a part of such judgment.
If there is any legal action (including without limitation, arbitration
and/or mediation) by Tenant to enforce any obligation of Landlord hereunder,
and Tenant prevails in such action in whole or in substantial part, then
notwithstanding any provision herein to the contrary, Landlord shall pay
Tenant all costs and expenses, including reasonable attorneys' fees,
arbitrator's fees, mediator's fees and disbursements incurred by Tenant in
such action or proceeding and in any appeal in connection therewith. If
Tenant recovers a judgment or award, in any such action, proceeding or
appeal, such costs, expenses and attorneys' fees and disbursements shall be
included in and as part of such judgment. This section 15.3 shall not apply
------------
to an arbitration initiated to resolve the form, content or structure of
leases or reciprocal easement agreements required pursuant to section 15.6
------------
hereof or to establish a deadline for closing under section 15.6 hereof.
------------
15.4 Exhibits. Exhibit A-1 (Plan(s) Outlining the
-------- -----------
Premises), Exhibit A-2 (Site Plan Outlining the Property), Exhibit B
----------- ---------
(Migration Plan) (which plan may not be initially attached hereto upon
execution hereof), Exhibit C (Example of Computation of Base Rent), Exhibit
--------- -------
D (Expansion Area(s)), Exhibit E (Parking), and any other attachments hereto
- ---------
are made a part of this Lease.
34
15.5 Broker(s). Tenant warrants and represents to Landlord
---------
that Tenant has negotiated this Lease without the assistance or advice of
any real estate broker(s) and has not authorized or employed, or acted by
implication to authorize or to employ, any other real estate broker to act
for Tenant in connection with this Lease.
15.6 Purchase Rights.
---------------
(a) Tenant shall have the right to be exercised, if at
all, no later than one (1) year prior to the end of the term (as it may be
extended) provided an Event of Default has not occurred which is continuing
and provided the term is not ending due to Tenant's act or default, to
purchase the Expansion Area and GG Building upon the end of the term for an
amount equal to the sum of (i) $15,627,541.00 (such amount representing the
portion of Landlord's net book value of the Property as of September 1, 2000
allocated to such Expansion Area and GG Building; plus (ii) the cost of any
capital improvements made by Landlord to the Expansion Area after the
Commencement Date ("Expansion Area Capital Improvements"), minus (iii) the
amortized portion of any Expansion Area Capital Improvement costs charged to
Tenant as additional rent (exclusive of interest) pursuant to section
-------
3.1(b). Upon Tenant's election to purchase, Landlord and Tenant will
------
commence negotiating an amendment to this Lease (to modify the Premises,
Base Rent, Tenant's Percentage Share and other necessary provisions),
commence attempting to subdivide the area to be purchased and commence
negotiating a reciprocal easement and restriction agreement. If the area to
be purchased cannot be subdivided, then the parties shall exercise their
good faith efforts to structure an alternative arrangement that would
legally accomplish a result that would match, as closely as practicable,
Tenant owning the Expansion Area, such as, for example, a 99 year lease of
the Expansion Area that would (i) incorporate easements and restrictions
similar to those that would be found in a reciprocal easement agreement, and
(ii) match, as closely as practicable, the economic return that Landlord
would receive if it sold the Expansion Area to Tenant, such as through
prepaid rent and the protection for Landlord against resale for profit (or
lease assignment for profit) set forth in section 15.6(d). The lease
---------------
amendment and reciprocal easement and restriction agreement (or long term
lease) shall be executed at closing. Both parties shall reasonably cooperate
in good faith to accomplish the subdivision and the agreement upon the form
of lease amendment and reciprocal easement and restriction agreement. If,
notwithstanding the parties' good faith efforts, the parties cannot agree on
the form of the lease amendment or the reciprocal easement and restriction
agreement (or the lease, in the event the parties agree to structure the
transaction as a lease), within six (6) months following Tenant's exercise
of its purchase option under this section 15.6, either party shall have the
------------
right, exercised by giving written notice to the other party, to require
that such disagreement be submitted to arbitration. Within thirty (30) days
following the giving of such notice, both parties shall draft a reciprocal
easement and restriction agreement, lease amendment (or lease), as
applicable, that they believe should govern and shall deliver such draft(s)
to the other side. Landlord and Tenant will then attempt in good faith to
resolve any differences between the drafts. If notwithstanding such good
faith efforts, the parties are unable to resolve their disagreements after a
period of thirty (30) days, or such longer period of time as the parties may
agree in writing, the parties agree to each submit their respective final
draft(s) delivered to the other party for consideration to an arbitrator
selected in accordance with section 15.11 or section 15.16 hereof, whichever
------------- -------------
is applicable, who shall, after hearing a presentation from each side on the
differences between their respective drafts, select the final draft (or
drafts) submitted by one of the parties, and the final draft(s) so selected
shall be the form of agreements that shall govern, and the parties shall be
obligated to execute the same. Tenant shall pay all of Landlord's reasonable
expenses (including without limitation reasonable attorneys' fees,
arbitrator's fees and engineers' fees in connection with subdivision,
drafting, negotiating and arbitrating of documents and closing). If the
transaction does not close before the end of the Lease term for reasons
other than Tenant's material default in performing any of its obligations
under this section 15.6(a) or Section 15.6(e), hereof, the closing and this
--------------- ---------------
Lease shall be extended for such time as shall be reasonably necessary to
satisfy all requirements under such sections 15.6(a) and 15.6(e), provided
---------------- -------
that (i) all adjustments shall, to the extent practicable, be made as of the
expiration date of the Lease, and (ii) at the closing, Landlord shall
receive interest on the net sale proceeds payable to it for the period from
the expiration date of the term through the Closing Date, at the rate of
interest equal to the prime rate, per annum, as published in The Wall Street
---------------
Journal on the Closing Date (provided that if The Wall Street Journal was
------- -----------------------
not published on the Closing Date, then the prime rate as published in The
---
Wall Street Journal on the date prior to the Closing Date that is closest in
-------------------
time to the Closing Date) ("Late Closing Rate"). If the transaction fails to
close due to Tenant's material default in performing any of its obligations
under this section 15.6(a) or section 15.6(e), and such default continues
--------------- ---------------
for a period of five (5) business days following Tenant's receipt of notice
of such default from Landlord, Landlord shall have the right to terminate
the Tenant's option under this section 15.6(a). If the transaction fails to
---------------
close for whatever reason within fifteen (15) months of Tenant's election to
purchase, then either party shall
35
thereafter have the right to require the parties to submit to arbitration
for the purpose of determining a reasonable deadline for closing. If the
transaction fails to close for whatever reason, other than Landlord's
material default, on or before such arbitration imposed deadline, the
purchase option and election shall expire and be of no further force or
effect.
(b) If Landlord decides during the term hereof to sell
the entire Property or enter into a long term lease for the entire Property
of fifteen (15) years, or more, including extensions, or with a purchase
option, other than a sale or lease to an Affiliate of Landlord (in the event
of a sale or lease to such an Affiliate of Landlord this section 15.6(b)
---------------
shall remain in force), Landlord shall first offer the Property to Tenant
for an amount equal to the sum of (i) $43,145,512.00 (such amount
representing the Landlord's net book value of the Property as of September
1, 2000); plus (ii) the cost of any capital improvements made by Landlord to
the Property after the Commencement Date ("Property Capital Improvements"),
minus (iii) the amortized portion of any Property Capital Improvement costs
charged to Tenant as additional rent (exclusive of interest) pursuant to
section 3.1(b). Upon receipt of Landlord's offer Tenant shall have ninety
--------------
(90) days to deliver written notice of election to purchase the Property. If
Tenant elects to purchase the Property Landlord and Tenant, subject to the
provisions of this section 15.6(b) set forth below, shall close within one
---------------
hundred twenty (120) days after the giving of Tenant's notice, and Landlord
and Tenant shall agree upon a form of lease to be signed at closing for
Landlord to lease any portion of the Property which Landlord, or its
subtenants or licensees then occupies and continues to need to occupy for
its business operations which form shall, to the extent applicable, be
substantially the same as this Lease form (but shall not contain any
purchase options). Landlord and Tenant shall reasonably cooperate in good
faith to negotiate the lease and to close. If, notwithstanding the parties'
good faith efforts, the parties cannot agree on the form of the lease within
45 days following Tenant's exercise of its purchase option under this
section 15.6(b), either party shall have the right, exercised by giving
---------------
written notice to the other party, to require that such disagreement be
submitted to arbitration. Within thirty (30) days following the giving of
such notice, both parties shall draft a lease that they believe should
govern and shall deliver such draft to the other side. Landlord and Tenant
will then attempt in good faith to resolve any differences between the
drafts. If notwithstanding such good faith efforts, the parties are unable
to resolve their disagreements after a period of thirty (30) days, or such
longer period of time as the parties may agree in writing, the parties agree
to each submit their respective final draft delivered to the other party for
consideration to an arbitrator selected in accordance with section 15.11 or
-------------
15.16 hereof, whichever is applicable, who shall, after hearing a
-----
presentation from each side on the differences between the two draft leases,
select one of the final draft leases submitted by one of the parties, and
the final draft so selected shall be the form of lease that shall govern,
and the parties shall be obligated to execute the same. If the transaction
does not close within the above 120-day period for reasons other than
Tenant's material default in performing any of its obligations under this
section 15.6(a) or section 15.6(e), the closing shall be extended for such
--------------- ---------------
time as shall be reasonably necessary to satisfy all requirements under such
sections 15.6(b) and 15.6(e), provided that (i) all adjustments shall, to
---------------- -------
the extent practicable, be made as of the date that is 120 days following
Tenant's exercise of its purchase option hereunder, and (ii) Landlord shall
receive interest on the net sale proceeds payable to it, at the Late Closing
Rate, for each day the closing is so delayed. If the transaction fails to
close due to Tenant's material default in performing any of its obligations
under this section 15.6(b) or section 15.6(e), and such default continues
-------------- ---------------
for a period of five (5) business days following Tenant's receipt of such
notice, Landlord shall have the right to terminate the Tenant's option under
this section 15.6(b). If Tenant elects to purchase the property and the
---------------
transaction fails to close for whatever reason, within twelve (12) months of
Tenant's election to purchase, then either party shall thereafter have the
right to require the parties to submit to arbitration for the purpose of
determining a reasonable deadline for closing. If the transaction fails to
close for whatever reason, other than Landlord's Material default, on or
before such arbitration imposed deadline, the purchase option and election
shall expire and be of no further force or effect. If Tenant does not elect
to purchase the Property within the prescribed time then for the next five
(5) years after the expiration of the 90-day period Tenant had to exercise
its option, Landlord shall be free to sell the Property to a third party and
upon such sale this section 15.6(b) shall automatically terminate; provided
---------------
that such sale shall, in all other respects, be subject to all provisions of
this Lease. If Landlord does not sell the Property to a third party within
such five (5) year period, Landlord shall once again be required to offer to
sell the Property to Tenant prior to sale to a third party as provided in
this section 15.6(b). Tenant shall pay all of Landlord's reasonable expenses
---------------
(including without limitation attorney's and engineer's fees) in connection
with drafting and negotiating documents and closing. This section 15.6(b)
---------------
shall not apply to any financing of the Property (including without
limitation, any sale/leaseback arrangement) or to the sale of the Property
at foreclosure or deed in lieu thereof.
36
(c) If Landlord decides during the term hereof, to sell
any portion of the Property which is less than the whole of the Property
then owned by Landlord, or enter into a long term lease for any such portion
of the Property of thirty (30) years or more including extensions or with a
purchase option, other than a sale or lease to an Affiliate of Landlord (in
the event of a sale or lease to such an Affiliate of Landlord this section
-------
15.6(c) shall remain in force), Landlord shall first offer to sell the
-------
subject parcel to Tenant for a price equal to (i) the assigned net book
value as of September 1, 2000 plus a portion of the cost of Property Capital
Improvements (as determined below) with respect to portions of the Property
that are developed with improvements or (ii) $22,000 per acre with respect
to portions of the Property that are not developed with improvements. Upon
receipt of Landlord's offer Tenant shall have ninety (90) days to deliver
written notice of election to purchase the subject parcel. If Tenant elects
to purchase the subject parcel Landlord and Tenant shall subject to the
provisions of this section 15.6(c) set forth below, close within thirty (30)
---------------
days after the subject parcel has been subdivided or within ninety (90) days
of Tenant's election to purchase, whichever is later, and Landlord and
Tenant shall agree upon a form of reciprocal easement and restriction
agreement and amendment to this Lease (to modify the Premises, Base Rent,
Tenants Percentage Share and other necessary provisions) to be signed at
closing. Landlord and Tenant shall reasonably cooperate in good faith to
negotiate the reciprocal easement and restriction agreement and lease
amendment (with conflict resolved under the same process articulated in
section 15.6(a)) and cause the subject parcel to be properly subdivided in
---------------
accordance with all laws and close on the purchase and sale of the subject
parcel. The lease amendment and reciprocal easement and restriction
agreement shall be executed at closing. If the transaction does not close
within the prescribed time for reasons other than Tenant's material default
in performing any of its obligations under this section 15.6(c) or section
-------------- -------
15.6(e), the closing shall be extended for such time as shall be reasonably
-------
necessary to satisfy all requirements under such sections 15.6(c) and
----------------
15.6(e), provided that (i) all adjustments shall, to the extent practicable,
-------
be made as of the latest date by which closing could have occurred without
there being a delay, and (ii) Landlord shall receive interest on the net
sale proceeds payable to it at the Late Closing Rate for each day the
closing is delayed. If Tenant does not elect to purchase the subject parcel
within the prescribed time, then for a period of six (6) years from the
expiration of Tenant's aforesaid 90-day period, Landlord shall be free to
sell the parcel to a third party and upon such sale if the subject parcel
includes no part of the Premises or common areas then this Lease shall
automatically terminate with respect to the subject parcel and if the
subject parcel includes a part of the Premises or common areas then Tenant's
rights to purchase the subject parcel pursuant to section 15.6 hereof shall
------------
terminate automatically but Tenant's other rights hereunder (i.e., right to
occupy and use portions of the Premises or common areas) shall continue, and
Tenant shall upon request confirm in writing such release of this Lease
and/or purchase rights with respect to the subject parcel. If Landlord does
not sell the subject parcel to a third party within such six (6) year
period, Landlord shall once again be required to offer to sell the subject
parcel to Tenant prior to sale to a third party as provided in this section
-------
15.6(c). Tenant shall pay all of Landlord's reasonable expenses (including
-------
without limitation reasonable attorney's and engineer's fees) in connection
with subdivision, drafting and negotiating documents and closing. This
section 15.6(c) shall not apply to any financing of the Property (including
---------------
without limitation, any sale/leaseback arrangement) or to any sale of the
Property at foreclosure or deed in lieu thereof. If the transaction fails to
close for whatever reason, other than Landlord's material default, within
twelve (12) months of Tenant's election to purchase, then either party shall
thereafter have the right to require the parties to submit to arbitration
for the purpose of determining a reasonable deadline for closing. The
assigned net book value as of September 1, 2000 and the applicable portion
of the cost of Property Capital Improvements for any portion of the Property
developed with improvements shall be determined in accordance with the
following standards:
(i) With respect to assets that Landlord's
accounting system is reasonably able to identify as being situated entirely
on the subject parcel or as relating exclusively to the subject parcel,
Landlord shall allocate to the subject parcel the entire September 1, 2000
net book value of such assets, and the entire Property Capital Improvements
costs related to such assets, if any, less the entire amortization related
thereto that was charged to Tenant, whichever applicable.
(ii) With respect to assets that Landlord's
accounting system is reasonably able to identify as relating to or
benefiting a parcel or parcels of land larger than the subject parcel (such
as, for example, an aerial survey, cost of common improvements which benefit
the subject parcel but which may not be located on the subject parcel or
site preparation costs), Landlord shall allocate to the subject parcel a
portion of the September 1, 2000 net book value of such assets, and/or a
portion of the Property Capital Improvements costs related to such assets,
if any, less a portion of the amortization related thereto that was charged
to Tenant, whichever applicable, all
37
of such portions to be based on the percentage that the acreage of the
subject parcel bears to the acreage of the larger parcel to which the assets
relate.
(iii) With respect to assets that Landlord's
accounting system is reasonably able to identify as relating to buildings
that are not all situated entirely on the subject parcel (such as, for
example, carpeting acquired at the same time for a number of buildings),
Landlord shall allocate to the subject parcel a portion of the September 1,
2000 net book value of such assets, and/or a portion of the Property Capital
Improvements costs related to such assets, if any, less a portion of the
amortization related thereto that was charged to Tenant, whichever
applicable, all of such portions to be based on the percentage that the
square footage of the buildings situated on the subject parcel bears to the
square footage of all buildings to which the assets relate.
(d) If Tenant purchases all or any part of the Property
pursuant to any of Tenant's rights hereunder, then subject to the exceptions
stated in part (x) of this section 15.6(d), the following provisions shall
---------------
apply (and Tenant shall also execute an agreement at closing, which shall be
recorded as an encumbrance and lien against the Property, drafted by
Landlord and approved by Tenant, such approval not to be unreasonably
withheld or delayed, which provides as follows):
(i) If, within ten (10) years following the
closing of Tenant's purchase of the subject property, Tenant transfers all
or part of the subject property, or if Tenant enters into a lease of all or
part of the subject property with a tenant with a term of fifteen (15) years
or more, including extensions, or with a purchase option, or Tenant
undergoes a merger, transfer of the majority of its capital stock or
otherwise completes a transaction qualifying as a Change in Control where
such merger, stock transfer or Change in Control was undertaken for the
primary purpose (as perceived by a reasonable third party) of avoiding the
payment obligation in this section 15.6(d) (any such transfer, event or
---------------
lease to be hereinafter called a "Subsequent Sale"), Tenant shall be
required to pay to Landlord the difference between the price paid for the
subject property hereunder and the greater of (i) the fair market value of
the subject property at the time of the Subsequent Sale, as reasonably
determined by the appraisal process set forth below, or (ii) the amount paid
for the subject property at the Subsequent Sale. The agreement shall also
include the re-purchase option referred to hereinbelow.
(ii) Tenant shall not attempt to structure any
transfer through long term leases or subleases, through sale of less than
the entire subject property (sale or long term lease of less than the entire
subject property is not prohibited but shall entitle Landlord to the payment
described below), through the use of straw parties, merger, transfer of
stock or other ownership interests or otherwise so as to deprive Landlord of
the benefit of this agreement. A sale (or lease with a term of fifteen (15)
years or more, including extensions, or with a purchase option) of less than
the entire subject property is not prohibited but shall entitle Landlord to
a payment of the excess of the greater of the price paid for the subject
property at the Subsequent Sale or Subsequent Sales or the fair market value
of the subject property at the time of the Subsequent Sale(s) over a pro
rata portion of the price previously paid for the portion of the Property
purchased by Tenant from Landlord (such pro rata portion to be based on the
fair market value of the subject property to be sold by Tenant as of the
date such subject property was acquired by Tenant from Landlord, over the
fair market value of the subject property purchased by Tenant from Landlord
as of the date such subject property was acquired by Tenant from Landlord),
and this provision shall continue to be in full force with respect to the
remainder of the subject property. Unless Landlord and Tenant otherwise
agree, the fair market values to be determined under this part (ii) shall be
determined by the appraisal process set forth in part (viii) hereof.
(iii) The obligations set forth above shall be a
lien upon the subject property, shall touch and concern the subject
property, shall survive the termination of this Lease and shall be binding
upon and run with the land. If the parties fail to execute such an agreement
at closing, Landlord's rights hereunder shall remain in full force and this
section 15.6(d) shall survive termination hereof. Landlord and Tenant agree
---------------
to, at Landlord's election, execute a deed of trust at closing, and/or any
other instrument reasonably requested by Landlord to secure Tenant's
obligations hereunder, to serve as a lien against the subject property
securing the obligation of Tenant upon a Subsequent Sale.
(iv) Tenant shall have the right at any time to
notify Landlord of a transaction involving the subject property and to
request that Landlord either (x) certify to Tenant in writing that, based
upon the
38
information delivered to Landlord, the subject transaction does not
constitute a Subsequent Sale within the meaning of this section 15.6(d) and
---------------
therefore does not trigger the payback obligations under this section
-------
15.6(d), or (y) state in writing that Landlord believes that such
-------
transaction constitutes a Subsequent Sale within the meaning of this section
-------
15.6(d) and therefore does trigger the payback obligations of this section
------- -------
15.6(d). Provided Tenant provides Landlord with information that describes
-------
the subject transaction in sufficient detail to enable Landlord to make a
reasonable determination as to whether the subject transaction constitutes a
Subsequent Sale within the meaning of this section 15.6(d), Landlord shall
---------------
respond to such request, in good faith, within thirty (30) days following
the date Landlord receives such information. Landlord shall not be bound by
any certification made in accordance with this subsection if the information
delivered to Landlord along with the request for a determination is later
determined to be (x) false or misleading (except with respect to
insignificant matters) or (y) materially incomplete. If Landlord timely
responds to Tenant's request with a statement in writing that Landlord
believes that the subject constitutes a Subsequent Sale within the meaning
of this section 15.6(d) and therefore does trigger the payback obligations
---------------
of this section 15.6(d), then Tenant shall have the right to submit to
---------------
arbitration pursuant to section 15.11 or 15.16 hereof, whichever applicable,
----------------------
the determination as to whether or not the subject transaction constitutes a
Subsequent Sale within the meaning of this section 15.6(d) and therefore
---------------
triggers the payback obligations under this section 15.6(d), and Landlord
---------------
shall reasonably cooperate with any reasonable efforts by Tenant to obtain
an expeditious determination of such question from the arbitrators.
(v) If any amounts owed to Landlord as a result
of a Subsequent Sale are not paid to Landlord within five (5) days of such
Subsequent Sale, then Landlord shall have the right and option at any time
thereafter to re-purchase the subject property for the book value previously
paid by Tenant to Landlord for the subject property in accordance with the
closing terms and conditions in section 15.6(e), with the closing of such
---------------
re-purchase to occur within ninety (90) days of the date of exercise of such
option. This re-purchase option shall be binding upon Landlord and Tenant
and their successors and assigns, shall bind and run with the land, shall
survive the termination of this Lease and shall be incorporated into the
agreement, referred to hereinabove, to be executed and recorded at closing
of the initial purchase. Notwithstanding the foregoing, Landlord shall have
no re-purchase option with respect to the subject property if, at the time
of the Subsequent Sale involving the subject property, Tenant has a market
capitalization of One Billion Dollars ($1,000,000,000.00) or more.
(vi) In no event shall Landlord be required to
pay anything if the sale price or the fair market value of the subject
property upon a Subsequent Sale is less than the net book value paid by
Tenant.
(vii) If at closing of the sale of the subject
property by Landlord to Tenant, the market capitalization of Tenant is less
than One Billion Dollars ($1,000,000,000.00), then, unless Tenant causes the
obligation created by this section 15.6(d) to be guaranteed by an
---------------
enforceable, primary guaranty to Landlord of the obligation from a parent or
affiliated entity which has a market capitalization of at least One Billion
Dollars ($1,000,000,000.00) in a form reasonably approved by Landlord,
Tenant shall also be required at such closing to post a bond or irrevocable
letter of credit in the amount of the then fair market value of the subject
property, as determined by the appraisal process below minus the book value
paid for the subject property or other security reasonably satisfactory to
Landlord (such as structuring the sale as a ten (10) year lease with a deed
conveyance at the end or such sooner time as Tenant desires to sell the
property and pays the amount owed), to secure Tenant's payment obligations
hereunder based upon any Subsequent Sale hereunder.
(viii) Fair market value of any subject property
for purposes of this section 15.6(d) shall be determined as follows: Prior
---------------
to or upon closing of the Subsequent Sale, Tenant shall deliver written
notice to Landlord of the Subsequent Sale along with the relevant purchase
and sale agreement, copies of the estimated closing statement and any other
information the Landlord reasonably requests and within thirty (30) days
thereafter Tenant and Landlord shall each choose a MAI appraiser with at
least ten (10) years experience appraising commercial property in the St.
Louis Metropolitan Area. Within thirty (30) days after said thirty (30) day
period, each such appraiser shall deliver to both parties a written opinion
as to the fair market value of the subject property. In the event the two
appraisals are within five percent (5%) of one another, the average of the
two appraisals shall be deemed the fair market value of the subject
property. In the event the two appraisals are not within five percent (5%),
such appraisers shall, as expeditiously as possible, jointly choose a third
appraiser. Within twenty (20) days after its appointment, the third
appraiser shall deliver to both parties a written opinion as to the fair
market value of the subject property and the fair market value of the
subject property shall be the average of the two closest
39
appraisals, or the middle valuation if it is equidistant from the high and
low appraisals. Each party hereto shall bear all of the cost of its own
appointed appraiser and 50% of the cost of the third appointed appraiser, if
needed. Tenant shall have the right to close on the transfer of the subject
property prior to the completion of such appraisal process, provided that
(x) Tenant notifies Landlord of such closing at least ten (10) days in
advance, and (y) Tenant escrows with a title company or other entity
reasonably acceptable to Landlord, the consideration paid to Tenant for the
transfer of the subject property, and such title company or other entity
holds such consideration in escrow until the appraisal process is completed
and pursuant to an escrow agreement approved by Tenant and Landlord, such
approval not to be unreasonably withheld, conditioned or delayed.
(ix) The provisions of this section 15.6(d) shall
survive the termination or expiration of this Lease.
(x) Notwithstanding the foregoing provisions of
this section 15.6(d), Tenant's payment obligations under this section
--------------- -------
15.6(d) shall not apply to (and the term "Subsequent Sale" shall not
-------
include): (x) any transfer of any interest in the subject property by
Tenant, or any leasing of the subject property by Tenant, to an entity that
is an Affiliate of Tenant at the time of such transfer or leasing, unless
the primary purpose of Tenant entering into such lease was to avoid the
payment obligations under this section 15.6(d), or (y) any transfer of any
---------------
interest in the subject property by Tenant (by operation of law or
otherwise), or any leasing of the subject property by Tenant, in connection
with (aa) a merger involving Tenant, (bb) a sale of a majority of the stock
of Tenant, (cc) a sale of all or substantially all of the assets of Tenant,
or (dd) any transaction that results in a Change of Control of Tenant;
provided that avoiding the payment obligations under this section 15.6(d)
---------------
was not the primary purpose of undertaking such merger, sale of stock, sale
of assets, or other transaction. Any transferee or tenant covered by this
part (x) shall hold its interest in the subject property subject to the
foregoing provisions of this section 15.6(d), but shall also have the
---------------
benefit of the exceptions under this part (x). In the event of any dispute
between Landlord and Tenant as to whether the primary purpose of any
transfer, transaction or other event set forth above was to avoid the
payment of an obligation under this section 15.6(d), such dispute shall be
---------------
resolved by arbitration in accordance with the provisions hereof and in
rendering such decision the arbitrator shall consider and weigh the relative
worth and benefit of the avoidance of the obligation in this section 15.6(d)
---------------
as compared to the other benefits to Tenant of the transaction, transfer or
event in question. Such arbitrator shall also consider all other facts and
circumstances involved in such transfer, transaction or event.
(e) Any purchase of all or any part of the Property
pursuant to a right created in this section 15.6 shall be closed under the
------------
following terms, conditions and closing practices:
(i) The following prorations and adjustments
shall be made to the purchase price at closing:
(A) All Property Taxes imposed on the
subject property for the year in which closing occurs or any prior year not
then due or payable (and not otherwise paid by Tenant hereunder) shall be
prorated and adjusted to the date of closing ("Closing Date"), based on the
latest information available with respect to Property Taxes and in
accordance with customary practice in St. Louis County, Missouri. All
special taxes or assessments which will become delinquent if not paid on or
before the Closing Date shall be paid by Landlord on or before the Closing
Date. All prorations will be on the basis of a 365 day year with the Closing
Date being charged to Landlord.
(B) Rents, security deposits, subdivision
assessments, common area charges, fees and charges for utilities, if any,
and any other like expenses, if any, shall be prorated to the Closing Date
and the amount thereof shall be added to or deducted from the purchase price
as the case may be. All such expenses shall be prorated and adjusted on the
basis of thirty (30) days to the month with the Closing Date charged to
Landlord, provided, however, with respect to those fees and charges which
may be read or computed by the party rendering services so that such fee or
charge may be billed directly to the Landlord with respect to any charges
incurred up to closing and to Tenant with respect to any charges incurred
after the Closing Date, then either party hereto may cause such fee or
charge to be read and billed directly to the appropriate party and such
charge shall not be subject to the proration under this Lease.
Notwithstanding the foregoing, Tenant shall not receive a credit for any
amount which Tenant is otherwise obligated to pay under this Lease, unless
and to the extent Landlord has been paid such amounts (or estimates thereof)
as additional rent under this Lease.
40
(C) If there are any monetary liens
(including mechanics liens) affecting title to the subject property that
cause the title to the subject property to be not marketable in fact other
than liens created pursuant to section 15.6(d) hereof, and such monetary
---------------
liens were created by the actions or negligent omissions of Landlord or any
tenant (other than Tenant), licensee, invitee or agent of Landlord, and can
be eliminated upon the payment of a sum certain, then Landlord shall be
obligated to pay off, or cause a title company to pay off, such liens or
encumbrances no later than the Closing Date.
(D) Landlord shall be responsible to pay
for all expenses in connection with the curing of any objections to title
which Landlord elects or is obligated to cure, recording costs to release
any deeds of trust, Landlord's attorneys' fees, and such other expenses
provided to be paid by Landlord herein. Tenant shall be responsible to pay
for its title insurance commitment and title insurance policy, the recording
fee for the deed, Tenant's attorneys' fees, and such other expenses provided
to be paid by Tenant herein. Tenant and Landlord shall each pay one-half
(1/2) of any closing fees and escrow fee charged by the title company.
(ii) At closing, Landlord shall deliver
possession of the subject property to Tenant subject to the following,
except as expressly prohibited by this Lease: all leases, subleases,
tenants, tenancies, occupancies or rights of possession of any person,
organization or entity, all matters of record, current taxes, all laws and
any document to be executed at closing, including without limitation, any
lease, reciprocal easement agreement and any other agreement provided for
herein. Landlord shall within 30 days after Tenant has exercised its
purchase option , deliver copies of all leases, subleases, and other
occupancy agreements affecting the subject property to Tenant (collectively,
the "Subject Property Leases"). If, upon reviewing the Subject Property
Leases, Tenant determines, in good faith, that any of the Subject Property
Leases materially and adversely affects Tenant's prospective use of the
subject property or finds that such leases cause the title to the subject
property to be unmarketable, Tenant may terminate the exercise of its option
upon written notice to Landlord, provided that such notice is delivered
within thirty (30) days following the date all of the Subject Property
Leases are delivered to Tenant. Notwithstanding the foregoing, if any of the
Subject Property Leases are prohibited under this Lease, Tenant's remedies
against Landlord as a result of the existence of such prohibited Subject
Property Lease(s), shall not be limited to the foregoing right of
termination, and Tenant shall be entitled to bring an action against
Landlord pursuant to section 15.11 or 15.16 hereof, whichever is applicable,
------------- -----
or to recover damages against Landlord as a result of such prohibited
Subject Property Leases(s); and or seek any other remedy permitted under
section 15.11 or section 15.16 hereof.
------------- -------------
(iii) (A) At closing, Landlord shall deliver
or cause to be delivered to Tenant, the following items, all of which shall
be duly executed and acknowledged in recordable form, where appropriate: (i)
the approved lease between Tenant and Landlord, if required hereunder; (ii)
the approved reciprocal easement agreement, if required hereunder; (iii) the
agreement provided for in section 15.6(d) hereof; (iv) an affidavit
---------------
customarily used by the Title Company and reasonably acceptable to Landlord
to permit Tenant to obtain the ALTA (Form B) policy of title insurance
without, to the extent reasonably practical, standard or general pre-printed
title exceptions and an affidavit of Landlord setting forth Landlord's
United States taxpayer identification number and certifying that Landlord is
not a foreign person as that term is used and defined in Section 1445 of the
United States Internal Revenue Code; (v) a special warranty deed conveying
the subject property to Tenant subject to all matters of record except those
expressly prohibited hereunder, current taxes, all laws, rights of occupants
in possession (except as expressly prohibited in this Lease) and all
documents to be executed at closing; (vi) a corporate certificate of good
standing of Landlord, and such other instruments appropriate to approve this
sale and authorize the signatories of Landlord hereto to execute and deliver
all documents reasonably required to implement and effectuate the closing
hereunder; (vii) an assignment and assumption of any tenant lease or other
occupancy agreement encumbering the subject property with cross indemnities
for obligations accruing before and after Closing Date; and (viii) any other
documents reasonably required by the title company to be delivered by
Landlord or necessary to implement and effectuate the closing hereunder.
(B) At closing, Tenant shall deliver or
cause to be delivered to Landlord, the following items, all of which shall
be duly executed and acknowledged in recordable form, where appropriate: (i)
the purchase price to Landlord by cashier's check or by federal wire
transfer (subject to adjustment and proration as hereinbefore provided);
(ii) the approved lease between Tenant and Landlord, if required hereunder;
(iii) the approved reciprocal easement agreement, if required hereunder;
(iv) a certificate of good standing and resolutions of the board of
directors of Tenant evidencing Tenant's authority to close; (v) the
agreement provided for in section 15.6(d) hereof; (vi) an assignment and
---------------
assumption of any tenant lease encumbering the subject property with cross
indemnities for obligations accruing before and after the Closing Date; and
(vii) any other documents reasonably required by the title company to be
delivered by Tenant or necessary to implement and effectuate the closing
hereunder.
41
(iv) The closing on the purchase of the subject
property shall take place in escrow at a title company to be determined by
Landlord and approved by Tenant ("Title Company").
(v) In the event of material casualty loss or
damage to the subject property Tenant may, at Tenant's option, rescind the
exercise of the purchase right if Tenant has exercised a purchase right, in
which event Tenant shall be under no obligation to purchase the subject
property, or close and receive an assignment and/or payment of the insurance
proceeds allocated to the subject property. Landlord shall reasonably
cooperate with Tenant with respect to determining an allocation of insurance
proceeds to the subject property if Tenant wishes to close rather than
rescind the election to purchase and any claim by Tenant that Landlord is
not being reasonable shall be resolved pursuant to section 15.11 hereof,
-------------
whichever is applicable.
(vi) In the event that at any time prior to the
closing, any notice of or proceeding shall be commenced or consummated for
the taking of all or any part of the subject property pursuant to the power
of eminent domain or otherwise, Landlord shall promptly give written notice
thereof to Tenant, in which event, Tenant, if Tenant has exercised a
purchase right, may rescind the exercise of the purchase right, in which
event Tenant shall be under no obligation to purchase the subject property.
If Tenant does not so rescind the purchase right and the parties can agree
as to an allocation of any condemnation award to be allocated to the portion
of the subject property taken, then Landlord shall at closing assign such
allocated portion of the award to Tenant, and Landlord shall convey all or
such portion of the subject property, if any, at closing as shall be left
after such taking in accordance with the terms of this Lease. Landlord shall
reasonably determine an allocation of the condemnation award to the subject
property if Tenant wishes to close rather than rescind the election to
purchase and any claim by Tenant that Landlord is not being reasonable shall
be resolved pursuant to section 15.11 hereof or 15.16 hereof, whichever is
------------- -----
applicable.
(vii) It shall be a condition of Tenant's
obligations to close hereunder that title to the subject property is
marketable in fact. If at any time prior to closing, title to the subject
property is not marketable in fact, Tenant shall have the right to (i)
rescind the exercise of Tenant's purchase option with respect to the subject
property, or (ii) postpone the closing until Landlord corrects the defects
causing title to not be marketable in fact, but only if such defects exist
as a result of a breach by Landlord of its obligations under this Lease.
Unless a title defect causing title to not be marketable in fact exists as a
result of a breach by Landlord or its obligations under this Lease, Tenant's
sole remedy shall be the foregoing termination right. If a title defect
causing title to not be marketable in fact exist as result of a breach by
Landlord of its obligations under this Lease, then Tenant's foregoing
termination right shall be in addition to any other rights Tenant may have
arising out of such breach.
(f) During such time as Tenant has a right to purchase
the Property or any portion thereof, Landlord shall not with respect to that
portion of the Property which Tenant has the right to purchase at that time
(i) voluntarily impose any easements or restrictions on the applicable
portion of the Property, or (ii) otherwise voluntarily encumber the Property
or the applicable portion thereof, if the effect of such easements,
restrictions or encumbrances is to (aa) prevent Tenant from being able to
develop and use the applicable portion of the Property for office and
research purposes upon Tenant's purchase thereof, or (bb) otherwise render
title to the applicable portion of the Property to be not marketable in
fact.
15.7 Entire Agreement. There are no oral agreements
----------------
between Landlord and Tenant affecting this Lease, and this Lease supersedes
and cancels any and all previous negotiations, arrangements, brochures,
offers, agreements, and understandings, oral or written, if any, between
Landlord and Tenant or displayed by Landlord to Tenant with respect to the
subject matter of this Lease, the Premises or the Property. There are no
commitments, representations or assurances between Landlord and Tenant or
between any real estate broker and Tenant other than those expressly set
forth in this Lease and all reliance with respect to any commitments,
representations or assurances is solely upon commitments, representations
and assurances expressly set forth in this Lease. This Lease may not, except
as specifically set forth herein, be amended or modified in any respect
whatsoever except by an agreement in writing signed by Landlord and Tenant.
15.8 Quiet Enjoyment. Provided Tenant performs all of its
---------------
obligations under this Lease and subject to the provisions hereof, all laws
and all existing matters of record, Tenant shall have quiet possession of
the Premises for the term without hindrance or molestation by Landlord or
anyone claiming by or through Landlord.
42
15.9 Lease Committee. Landlord and Tenant shall form a
---------------
"Lease Committee" for the purpose of assisting the parties with respect to
unanticipated operational issues not adequately dealt with in this Lease,
amending this Lease if necessary to deal with those issues and attempting to
resolve disputes which may arise with respect to those unanticipated issues.
Landlord and Tenant shall cooperate in good faith to cause their respective
appointees to the Lease Committee to resolve disputes relating to
unanticipated issues. Unless the Lease Committee agrees that a party should
not take an action that the other party disputes until the Lease Committee
resolves the dispute, neither party shall be prohibited from taking any
action related to the enforcement hereof or otherwise related to the
Premises and Property during such time as the Lease Committee is attempting
to resolve the dispute. Any amendment to this Lease agreed upon the by the
Lease Committee shall be written and shall be signed by Landlord and Tenant
and shall be effective when so signed. Landlord shall appoint three (3)
persons to the Lease Committee and Tenant shall appoint three (3) persons to
the Lease Committee. Effective upon the Non-Consolidated Date, defined
hereinabove, the Lease Committee shall automatically dissolve and this
section 15.9 as well as all references herein to the Lease Committee shall
------------
be of no further force or effect.
15.10 Parking. All parking on the Property is unreserved.
-------
Tenant and its invitees, permittees and employees shall not use more than
the number of allocated parking spaces designated pursuant to the parking
ratios set forth on Exhibit E, attached hereto and made a part hereof, at
---------
any given time and Landlord and its invitees, permittees, employees and
tenants, other than Tenant, shall not use more than the remaining number of
parking spaces on the Property at any given time. The parking ratios in
Exhibit E shall be based upon Tenant's Percentage Share of the total parking
---------
spaces on the Property. Exhibit E shall also include a current count of
---------
parking spaces allocated to Tenant based on such ratio. Parking indicated on
Exhibit E which is not allocated to Tenant is allocated to Landlord and
---------
other tenants and visitors. Notwithstanding the foregoing, in the event
Exhibit E has not been completed at the time this Lease is executed,
---------
Landlord and Tenant agree to use reasonable and good faith efforts to work
together to complete an agreed upon Exhibit E, and upon the completion
---------
thereof, it shall then be incorporated herein as if it has been attached
upon the execution hereof. If the parties are unable to agree upon an
Exhibit E within six (6) months following execution of this Lease, then the
---------
parties may agree to extend the six (6) month time period to submit the
resolution of the completion of Exhibit E to arbitration pursuant to section
--------- -------
15.11 or 15.16, whichever is applicable. If Tenant is using more than its
----- -----
allocated number of parking spaces Landlord may obtain an injunction
prohibiting such use and may take such other reasonable action (including
posting signs and installing gates or other parking control devises) to
remedy the situation and Tenant shall reimburse Landlord for such costs. If
Landlord is using more than the remaining number of parking spaces on the
Property, Tenant may obtain an injunction prohibiting such use and avail
itself of any other remedy available hereunder. The parties acknowledge that
in applying the parking ratios under Exhibit E, the number of parking spaces
---------
allocated to Tenant and Landlord will change with charges in the amount of
usable building floor area comprising the Premises. If Tenant's parking
needs increase materially beyond the number of parking spaces allocated
pursuant to Exhibit E and Landlord agrees to construct or provide additional
---------
parking for Tenant's use, Tenant shall pay all reasonable costs incurred by
Landlord related thereto. If Landlord's parking needs increase materially
beyond the number of parking spaces allocated pursuant to Exhibit E,
---------
Landlord shall construct or provide additional parking for Landlord's use at
Landlord's sole cost and expense.
15.11 Dispute Resolution For Original Landlord and Tenant.
---------------------------------------------------
If a dispute between Landlord and Tenant arises at any time when Landlord is
still Pharmacia Corporation or an affiliated entity controlled by,
controlling or under common control with Pharmacia Corporation (including
after any sale/leaseback financing where Landlord may be a prime tenant of
the Property rather than the fee owner, but remains the Landlord hereunder)
and Tenant is still Monsanto Company or an affiliated entity controlled by,
controlling or under common control with Monsanto Company then the following
process for dispute resolution shall apply:
ORIGINAL PARTIES ARBITRATION/DISPUTE RESOLUTION
(a) STEP PROCESS. Any controversy or claim arising out
of or relating to this Lease, or the breach thereof (a "Dispute"), while
Tenant is still Monsanto Company or an affiliated entity controlled by,
controlling or under common control with Monsanto Company and Landlord is
still Pharmacia Corporation, or an affiliated entity controlled by,
controlling or under common control with Pharmacia Corporation, shall be
resolved by a series of three events in the following sequence: negotiation
between senior executives, mediation and then
43
binding arbitration. Each party agrees that the procedures set forth in this
section 15.11 shall be the exclusive means for resolution of any Dispute.
-------------
The initiation of mediation or arbitration hereunder will toll the
applicable statute of limitations for the duration of any such proceedings.
(b) NEGOTIATION. The parties will first attempt to
resolve any Dispute by direct discussions and negotiation, including if
either party so elects, negotiation among senior executives of Pharmacia and
Monsanto. Any party asked to participate in such negotiations will use
reasonable efforts to make a designated senior executive available promptly
to participate in negotiations, with authority to resolve the matter. The
designated senior executives shall consult and negotiate with each other in
good faith and, recognizing their mutual interests, attempt to reach a just
and equitable solution satisfactory to both parties. If they do not reach
such a solution within a period of 30 days after a notice calling for
negotiation among senior executives is given, then, upon notice by either
party to the other, any Dispute shall be referred to mediation administered
by the American Arbitration Association in accordance with its Commercial
Mediation Rules.
(c) MEDIATION. If a Dispute cannot be settled through
negotiation as provided in section 15.11(b), the parties agree to attempt to
----------------
settle the Dispute in an amicable manner by mediation administered by the
American Arbitration Association under its Commercial Mediation Rules,
before resorting to arbitration. If the Dispute is not resolved within 60
days after initiation of mediation, either party may demand arbitration by
the American Arbitration Association administered under its Commercial
Arbitration Rules (the "Rules").
(d) ARBITRATION. Any otherwise unresolved Dispute shall
be resolved by final and binding arbitration administered by the American
Arbitration Association in accordance with its Rules and Title 9 of the U.S.
Code. Judgment on the award rendered by the arbitrator(s) may be entered in
any court having jurisdiction thereof. The number of arbitrators shall be
one if the claims in such Dispute aggregate less than $1 million, and three
if the claims in such Dispute aggregate $1 million or more. If three
arbitrators are to be chosen, one shall be appointed by each of the parties
and the third shall be selected by mutual agreement, if possible, within 30
days of selection of the second arbitrator and thereafter pursuant to the
Rules. The place of arbitration shall be New York, N.Y. Notwithstanding any
provision hereof or in the Rules to the contrary, the arbitrator(s) shall
have full authority to implement the provisions of this Lease (including
without limitation, as necessary for sections 15.6, 15.15 and 12.2 hereof)
-----------------------------
and to fashion appropriate remedies for breaches of this Lease (including
permanent injunctive relief).
(e) INJUNCTIVE RELIEF. Either party may make an
application to the arbitrator(s) seeking injunctive or other provisional
relief to maintain the status quo until such time as the arbitration award
is rendered or the controversy is otherwise resolved. Either party also may,
without waiving any remedy under this section 15.11, apply to any court
-------------
having jurisdiction for any interim or provisional relief (including without
limitation injunctive relief) that is necessary to maintain the parties'
relative positions until such time as the arbitration award is rendered or
the controversy is otherwise resolved.
(f) REMEDIES. The arbitrator(s) shall have no authority
or power to limit, expand, alter, amend, modify, revoke or suspend any
condition or provision of this Lease, nor any right or power to award
punitive or treble damages.
(g) EXPENSES. Except as set forth in section 15.3 of
------------
this Lease, the parties shall bear their own expenses and attorneys' fees in
pursuit and resolution of any Dispute. The parties shall share equally the
costs and expenses (including the fees of any neutral mediator or
arbitrator) of any mediation or arbitration hereunder.
(h) LAW GOVERNING ARBITRATION PROCEDURES. The
interpretation of the provisions of this section 15.11, only insofar as they
-------------
relate to the agreement to arbitrate and any procedures pursuant thereto,
shall be governed by Title 9 of the U.S. Code and the Rules and other
applicable federal law. In all other respects, the interpretation of this
Lease shall be governed as set forth in section 15.1.
------------
15.12 Savings Clause. Any interest in real property which
--------------
may vest at any time in the future as a result of this Lease shall vest, if
at all, within twenty-one years of the death of the last to survive of the
now living descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇, the 41st (former) president of the
United States of America.
44
15.13 Time is of the Essence. Time is of the essence for
----------------------
all purposes hereunder.
15.14 Recording. Neither party shall record this Lease.
---------
Upon the request of either party the other shall execute a memorandum of
this Lease for recording in a form which is reasonably satisfactory to the
party not making the request.
15.15 Original Tenant Rights. Until such time as (i)
----------------------
Tenant assigns this lease to any person, organization or entity that is not
an Affiliate of Tenant or (ii) more than thirty-three percent (33%) of the
usable square footage of floor area comprising the Premises in the aggregate
is sublet to a person(s), organization(s) or entity(ies) that is not an
Affiliate of Tenant, the following provisions shall apply:
(a) Any Event of Default of Tenant hereunder which
Tenant disputed in good faith shall not cause Tenant to be unable to
exercise (i) extension rights under section 2.2, (ii) purchase rights under
-----------
section 15.6 or (iii) early termination rights under section 2.3 or cause
------------ -----------
exercised rights to be void until such dispute has been resolved pursuant to
section 15.11 or 15.16, whichever is applicable, but this section 15.15(a)
---------------------- ----------------
shall not forgive such Event of Default or prevent Landlord from availing
itself of any other rights or remedies available hereunder, at law or in
equity.
(b) Any Event of Default of Tenant hereunder which
Tenant disputed in good faith shall not allow Landlord to terminate this
Lease or Tenant's right to possession until such dispute has been resolved
pursuant to section 15.11 or 15.16, whichever is applicable, but this
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section 15.15(b) shall not forgive such Event of Default or prevent Landlord
----------------
from availing itself of any other rights or remedies available hereunder, at
law or in equity.
(c) Tenant shall not be deemed to have disputed any
Event of Default in good faith unless (i) Tenant delivered written notice to
Landlord, within the applicable cure period provided in section 10.1 hereof
------------
for such Event of Default, that Tenant disputed Landlord's assertion that it
was in default or Tenant delivered written notice to Landlord disputing
Landlord's assertion that Tenant failed to timely cure a default of which
Landlord had previously notified Tenant, and provided a reasonably detailed
explanation of the reason Tenant believed it was not in default, or that it
failed to timely cure a default, along with supporting documentation, if
any, (ii) Tenant has not, within the previous twelve (12) month period
utilized this section 15.15 for purposes of avoiding forfeiture of rights or
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termination of this Lease after an Event of Default of Tenant (it being
agreed that Tenant may not utilize this section 15.15 more than once in any
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twelve (12) month period), and (iii) the authority resolving such dispute,
whether it be the Lease Committee, if prior to the Non-Consolidated Date, or
an arbitrator, makes an affirmative written determination that Tenant
disputed such Event of Default in good faith based upon Tenant's reasonable
belief that an Event of Default had not occurred (the parties agree that
they will instruct the authority to make a finding as to whether Tenant
disputed such Event of Default in bad faith or good faith based on whether
Tenant reasonably believed an Event of Default had not occurred). If Tenant
does not satisfy the test for disputing an Event of Default in good faith
then this section 15.15 shall not apply with respect to such Event of
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Default. If Tenant does satisfy the test for disputing an Event of Default
in good faith then after the finding by the Lease Committee or arbitrator,
as applicable, of good faith Tenant shall have an additional time period
from the date of such finding to cure such Event of Default prior to the
events otherwise avoided under section 15.15(a) and (b) above, such time
------------------------
period to be five (5) days for monetary defaults and thirty (30) days (or
such longer period of time as is reasonably necessary to cure such Event of
Default provided Tenant is acting diligently in curing such Event of
Default) for non-monetary defaults.
(d) At such time as (i) Tenant assigns this Lease
(including without limitation, assignment by operation of law) to any
person, organization or entity that is not an Affiliate of Tenant, or (ii)
thirty-three percent (33%) or more of the usable square footage comprising
the floor area of the Premises, in the aggregate, is sublet to a person(s),
organization(s) or entity(ies) that is not an Affiliate of Tenant then this
section 15.15 shall be void and of no further force or effect.
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Notwithstanding any provision of this section 15.15 to the contrary, a
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merger by Tenant shall not terminate any rights of Tenant under this section
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15.15.
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15.16 Dispute Resolution For Successor Landlord or Tenant.
---------------------------------------------------
If a dispute between Landlord and Tenant arises at any time after Landlord
is no longer Pharmacia Corporation or an affiliated entity controlled by,
controlling or under common control with Pharmacia Corporation or Tenant is
no longer Monsanto Company or an
45
affiliated entity controlled by, controlling or under common control with
Monsanto Company then the following process for dispute resolution shall
apply:
SUCCESSOR PARTIES ARBITRATION/DISPUTE RESOLUTION
AGREEMENT TO ARBITRATE.
The following procedures for discussion, negotiation and
arbitration shall apply to all disputes, controversies or claims (whether
sounding in contract, tort or otherwise) that may arise out of or relate to,
or arise under or in connection with this Lease, or the transactions
contemplated hereby or thereby (including all actions taken in furtherance
of the transactions contemplated hereby or thereby on or prior to the date
hereof), or the commercial or economic relationship of the parties as it
relates to this Lease at any time when Landlord is no longer Pharmacia
Corporation or an affiliated entity controlled by, controlling or under
common control with Pharmacia Corporation or Tenant is no longer Monsanto
Company or an affiliated entity controlled by, controlling or under common
control with Monsanto Company. Each party agrees that the procedures set
forth herein shall be the sole and exclusive remedy in connection with any
dispute, controversy or claim relating to any of the foregoing matters and
irrevocably waives any right to commence any Action in or before any
Governmental Authority, except to the extent provided under the Arbitration
Act in the case of judicial review of arbitration results or awards.
(a) STEP PROCESS. Any Dispute while Tenant is no longer
Monsanto Company or an affiliated entity controlled by, controlling or under
common control with Monsanto Company or Landlord is no longer Pharmacia
Corporation or an affiliated entity controlled by, controlling or under
common control with Pharmacia Corporation, shall be resolved by binding
arbitration. Each party agrees that the procedures set forth in this section
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15.16 shall be the exclusive means for resolution of any Dispute. The
-----
initiation of arbitration hereunder will toll the applicable statute of
limitations for the duration of any such proceedings.
(b) ARBITRATION. Any otherwise unresolved Dispute shall
be resolved by final and binding arbitration administered by the American
Arbitration Association in accordance with its Rules and Title 9 of the U.S.
Code. Judgment on the award rendered by the arbitrator(s) may be entered in
any court having jurisdiction thereof. The number of arbitrators shall be
one if the claims in such Dispute aggregate less than $1 million, and three
if the claims in such Dispute aggregate $1 million or more. If three
arbitrators are to be chosen, one shall be appointed by each of the parties
and the third shall be selected by mutual agreement, if possible, within 30
days of selection of the second arbitrator and thereafter pursuant to the
Rules. The place of arbitration shall be New York, N.Y. Notwithstanding any
provision hereof or in the Rules to the contrary, the arbitrator(s) shall
have full authority to implement the provisions of this Lease (including
without limitation, as necessary for sections 15.6, 15.15 and 12.2 hereof)
-----------------------------
and to fashion appropriate remedies for breaches of this Lease (including
permanent injunctive relief).
(c) INJUNCTIVE RELIEF. Either party may make an
application to the arbitrator(s) seeking injunctive or other provisional
relief to maintain the status quo until such time as the arbitration award
is rendered or the controversy is otherwise resolved. Either party also may,
without waiving any remedy under this section 15.16, apply to any court
-------------
having jurisdiction for any interim or provisional relief (including without
limitation injunctive relief) that is necessary to maintain the parties'
relative positions until such time as the arbitration award is rendered or
the controversy is otherwise resolved.
(d) REMEDIES. The arbitrator(s) shall have no authority
or power to limit, expand, alter, amend, modify, revoke or suspend any
condition or provision of this Lease, nor any right or power to award
punitive or treble damages.
(e) EXPENSES. Except as set forth in section 15.3 of
------------
this Lease, the parties shall bear their own expenses and attorneys' fees in
pursuit and resolution of any Dispute. The parties shall share equally the
costs and expenses (including the fees of any neutral mediator or
arbitrator) of any mediation or arbitration hereunder.
(f) LAW GOVERNING ARBITRATION PROCEDURES. The
interpretation of the provisions of this section 15.16, only insofar as they
-------------
relate to the agreement to arbitrate and any procedures pursuant thereto,
shall be governed by Title 9 of the U.S. Code and the Rules and other
applicable federal law. In all other respects, the
46
interpretation of this Lease shall be governed as set forth in section 15.1.
------------
15.17 Counterpart Signatures. This Lease may be executed
----------------------
in any number of counterparts, each of which shall be an original, but all
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, Landlord and Tenant have executed this
Lease as of the date specified above.
THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION
WHICH MAY BE ENFORCED BY THE PARTIES.
Landlord: Tenant:
PHARMACIA CORPORATION MONSANTO COMPANY
By: By:
----------------------------- ----------------------------
Name: Name:
--------------------------- --------------------------
Title: Title:
-------------------------- -------------------------
47
EXHIBIT A-1
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PLAN(S) OUTLINING THE PREMISES
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EXHIBIT A-2
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SITE PLAN OUTLINING PROPERTY
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EXHIBIT B
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MIGRATION PLAN
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EXHIBIT C
---------
EXAMPLE OF COMPUTATION OF BASE RENT
-----------------------------------
[CHESTERFIELD VILLAGE CAMPUS LEASE]
This exhibits details the computation of Base Rent on January 1,
2002 pursuant to Section 3.1(a) of the Lease, assuming Tenant's Percentage
Share on January 1, 2002 is the same as it was on the Commencement Date
(i.e., 50.82%).
BASE RENT = the product of the BASE RENT FACTOR times the TENANT'S
PERCENTAGE SHARE
BASE RENT FACTOR = the product of the Landlord's Net Book value
on September 1, 2000 times 9.25% Note: 9.25% represents
the 30 Year US Treasury Bond rate on September 1, 2000
(6.25%) plus 3.00%
Base Rent calculation for Tenant (Pharmacia Corporation) at
Chesterfield Village (CV):
CV net book value on September 1, 2000 = $43,145,512.00
CV Base Rent Factor = $43,145,512.00 x 9.25% = $3,990,960.00
CV Base Rent = $3,990,960.00 x 50.82% = $2,028,206.00 annually or
$169,017.00 monthly
EXHIBIT D
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EXPANSION AREA(S)
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EXHIBIT E
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PARKING
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