EXHIBIT 10.1
Highland Landmark III Office Lease
by and between
Opus/AEW Office Development Company, L.L.C., a Delaware limited liability
company authorized to transact business in Illinois, Landlord
and
Vitria Technology, Inc., a California corporation authorized to transact
business in Illinois, Tenant
Dated as of March 20, 2000
Table of Contents
Glossary of Defined Terms 1
Article 1 Base Rent; Other Amenities; Security Deposit 2
Section 1.1 Base Rent 2
Section 1.2 Parking 3
Section 1.3 Security Deposit 3
Article 2 Additional Rent 3
Section 2.1 Additional Rent 3
Section 2.2 Definitions 4
Section 2.3 Adjustment of Operating Expenses 6
Section 2.4 Estimated Real Estate Taxes and Operating Expenses for Initial Calendar Year 6
Section 2.5 Estimated Real Estate Taxes and Operating Expenses for Subsequent Calendar Years 7
Section 2.6 Payment of Additional Rent 7
Section 2.7 Re-estimate of Real Estate Taxes and Operating Expenses 7
Section 2.8 Adjustment of Actual Real Estate Taxes and Operating Expenses 7
Section 2.9 Separately Metered Utilities 8
Section 2.10 Other Additional Rent 8
Article 3 Interest on Base and Additional Rent; Rent Independent 8
Section 3.1 Interest on Past Due Obligations 9
Section 3.2 Rent Independent 9
Article 4 Construction of Base Building, Leasehold Improvements; Possession of Premises 9
Section 4.1 Plans for Construction of Base Building and Leasehold Improvements 9
Section 4.2 Allowances for Leasehold Improvements; Bidding for Subcontractors 10
Section 4.3 Change Orders 13
Section 4.4 Force Majeure 13
Section 4.5 Construction Guaranty; Substantial Completion 13
Section 4.6 Repair and Maintenance 14
Section 4.7 Delayed or Earlier Possession; Pre-Commencement Date Access 14
Section 4.8 Effect of Possession 16
Section 4.9 Use 17
Section 4.10 Compliance with Environmental Laws 17
Section 4.11 Landlord's Environmental Covenants 17
Article 5 Services 17
Section 5.1 Services Provided by Landlord 18
Section 5.2 Tenant's Utility Services 19
Section 5.3 Other Provisions Relating to Services 19
Section 5.4 Effects of Utilities 20
Article 6 Insurance 20
Section 6.1 Landlord's Casualty Insurance Obligations 20
Section 6.2 Tenant's Casualty Insurance Obligations 20
Section 6.3 Landlord's Liability Insurance Obligations 21
Section 6.4 Tenant's Liability Insurance Obligations 21
Section 6.5 Tenant's Indemnification of Landlord 22
Section 6.6 Tenant's Waiver 22
Section 6.7 Landlord's Deductible and Tenant's Property 22
Section 6.8 Tenant's Property 22
Section 6.9 Increase in Insurance 22
Section 6.10 Tenant's Failure to Insure 23
Article 7 Certain Rights Reserved by Landlord 23
Section 7.1 Rights Reserved by Landlord 23
Section 7.2 Emergency Entry 24
Section 7.3 Exhibition of Premises 24
Section 7.4 Right of Landlord to Perform 24
Section 7.5 Substitution of Office Space 24
Article 8 Alterations and Improvements 25
Section 8.1 Procedures for Tenant's Improvements 25
Section 8.2 Freedom From Liens 26
Section 8.3 Alterations a Part of the Premises 26
Article 9 Repairs 26
Section 9.1 Tenant's Repair Obligations 26
Section 9.2 Landlord's Inspection 27
Section 9.3 Joint Inspection Upon Vacation 27
Article 10 Assignment and Subletting 28
Section 10.1 General Prohibition; Recapture; Exceptions 28
(a) General Prohibition 28
(b) Recapture 28
(c) Exceptions 28
Section 10.2 Discharge of Commission 28
Section 10.3 Right to Recapture Not Exercised 29
Section 10.4 Tenant's Profit Statement 29
Section 10.5 Tenant's Changes Deemed an Assignment 29
Section 10.6 Continuing Tenant Liability 29
Section 10.7 Void Transfers 29
Section 10.8 Prohibited Transferees 29
Section l0.9 Criteria for Withholding Consent 30
Article 11 Damage by Fire or Other Casualty 30
Section 11.1 Tenantable Within 300 Days 30
Section 11.2 Not Tenantable Within 300 Days 30
Section 11.3 Office Complex Substantially Damaged 31
Section 11.4 Uninsured Casualty 31
Section 11.5 Deductible Payments 31
Section 11.6 Landlord's Repair Obligations 31
Section 11.7 Rent Apportionment 31
Article 12 Eminent Domain 31
Section 12.1 Tenant's Termination 31
Section 12.2 Tenant's Participation 32
Article 13 Surrender of Premises 32
Section 13.1 Surrender of Possession 32
Section 13.2 Tenant Retaining Possession 33
Article 14 Default of Tenant 33
Section 14.1 Events of Default 33
Section 14.2 Landlord's Remedies 34
Section 14.3 Written Notice of Termination Required 36
Section 14.4 Remedies Cumulative; No Waiver 37
Section 14.5 Legal Costs 37
Section 14.6 Waiver of Damages 37
Article 15 Subordination/Estoppel 37
Section 15.1 Lease Subordinate 37
Section 15.2 Attornment 38
Section 15.3 Tenant's Notice of Default 38
Section 15.4 Estoppel Certificates 38
Article 16 Miscellaneous 38
Section 16.1 Time is of the Essence 39
Section 16.2 Memorandum of Lease 39
Section 16.3 Joint and Several Liability 39
Section 16.4 Broker 39
Section 16.5 Notices 39
Section 16.6 Landlord's Agent 40
Section 16.7 Quiet Enjoyment 40
Section 16.8 Successors and Assigns 40
Section 16.9 Severability 40
Section 16.10 No Abandonment or Waste 40
Section 16.11 Transfers by Landlord 40
Section 16.12 Delivery of Documents and Information 41
Section 16.13 Headings 41
Section 16.14 Written Agreement 4l
Section 16.15 Modifications or Amendments 41
Section 16.16 Landlord Control 41
Section 16.17 Utility Easements 41
Section 16.18 Not Binding Until Properly Executed 41
Section 16.19 Building Rules and Regulations 42
Section 16.20 Compliance with Laws and Recorded Covenants 42
Section 16.21 Obligations Survive Termination 42
Section 16.22 Tenant's Waiver 42
Section 16.23 Tenant Authorization 43
Section 16.24 No Partnership or Joint Venture 43
Section 16.25 Tenant's Obligation to Pay Miscellaneous Taxes 43
Section 16.26 Prohibited Signs 43
Section 16.27 Exhibits 43
Article 17 Option to Renew 43
Section 17.l Option to Renew 43
Section 17.2 Renewal Term Election Procedure Value 44
Section 17.3 Determination of Fair Market Rental Value 44
Exhibits 1
Exhibit A Legal Description of Property 1
Exhibit B Site Plan 1
Exhibit C Floor Plan 1
Exhibit D Milestone Dates 1
Exhibit E Holidays 1
Exhibit F General Description of Janitorial Services 1
Exhibit G General Description of Building Standard 1
Exhibit H Form of Subordination, Non-Disturbance and Attornment Agreement 1
Exhibit I Building Rules and Regulations 1
Glossary of Defined Terms
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Defined Term Section of Definition
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ADA Section 4.1 (c)
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Additional Rent Section 2.1
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Base Building Section 4.1(a)
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Base Rent Section 1.1
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BOMA Standards Section 1.1
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Building Recital A
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Building Amenities Recital A
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Building Standard Section 8.1
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Calendar Year Section 2.2(a)
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Change Order Section 4.3
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Construction Allowance Section 4.2(b)
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Construction Costs Section 4.2(d)
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Default Section 14.1
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Deficiency Section 14.2(a)
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Delayed Scheduled Commencement Date Section 4.7(b)
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Deli Recital A
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Event of Default Section 14.1
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Excused Delays Section 4.4
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Executive Parking Area Recital A
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Fair Market Rental Value Section 17.3
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Final Leasehold Improvement Plans Section 4.1(a)
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Fitness Center Recital A
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Floor/Floors Recital A
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Holidays Section 5.1
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HVAC System Section 2.2(c)
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Independent CPA Section 2.8(a)
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Initial Term Granting Clause
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Interest Rate Section 3.1
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Landlord Introductory Paragraph
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Lease Introductory Paragraph
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Lease Commencement Date Granting Clause
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Lease Year Section 1.1
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Leasehold Improvement General Contractor Section 4.1(a)
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Leasehold Improvements Section 4.1(a)
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Milestone Dates Section 4.7(f)
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Mortgagee Section 15.3
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Office Complex Recital A
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Office Space Recital B
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Operating Expenses Section 2.2(c)
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Original Office Space Section 7.5
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Park Recital A
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Parking Area Recital A
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Parking Capacity Recital A
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Parking Garage Recital A
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Pre-Lease Commencement Date Access Section 4.7(c)
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Premises Recital B
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Property Recital A
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Real Estate Taxes Section 2.2(b)
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Renewal Exercise Date Section 17.2
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Renewal Term Section 17.1
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Rent Section 3.2
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RSF Section 1.1
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Scheduled Commencement Date Section 4.7(b)
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Security Deposit Section 1.3
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Substitute Office Space Section 7.5
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Substitution Election Section 7.5
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Substitution Notice Section 7.5
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Tenant Introductory Paragraph
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Tenant's Architect Recitals
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Tenant's Pro Rata Share of Operating Expenses Section 2.2(d)
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Tenant's Pro Rata Share of Real Estate Taxes Section 2.2(d)
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Tenant's Renewal Election Notice Section 17.2
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Tenant's Renewal Inquiry Notice Section 17.2
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Term Granting Clause
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Work Section 8.1
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Village Recital A
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2
Highland Landmark III Office Lease
This Highland Landmark III Office Lease ("Lease") is made and entered into
as of the 20th day of March, 2000, by and between Opus/AEW Office Development
Company, L.L.C., a Delaware limited liability, company authorized to transact
business in Illinois ("Landlord"), and Vitria Technology, Inc., a California
corporation authorized to transact business in Illinois ("Tenant").
Recitals:
A. Landlord is the fee title holder of that certain parcel of real estate
containing approximately 8.773 acres, which parcel is located in the Highland
Landmark Office Park ("Park") in the Village of Downers Grove, Illinois
("Village") and is legally described on Exhibit A attached hereto and made a
part hereof (which parcel, including, without limitation, any and all easement
areas appurtenant thereto, is hereinafter referred to as the "Property").
Landlord is constructing on the Property a nine (9)-story office building
("Building"). The first floor through the ninth floor of the Building are herein
individually called a "Floor," and are herein collectively called "Floors."
Landlord will also construct a six (6)-level parking facility appurtenant to the
Building for approximately 980 vehicles ("Parking Garage"). In addition, at
Landlord's sole option, Landlord may construct an on-grade parking area on the
Property for approximately fifty-eight (58) vehicles ("Parking Area"). The
Parking Garage and the Parking Area (if any) will together provide parking
spaces for approximately 4.0 automobiles per 1,000 RSF (as such term is defined
in Section 1.1 hereof) of office space in the Building ("Parking Capacity"). The
Parking Garage will include a controlled-access executive area ("Executive
Parking Area"). Other than in the Executive Parking Area or as otherwise
provided herein, parking in the Parking Garage and in the Parking Area (if any)
will be available on a first come, first serve basis. The Building and the
Parking Garage will be constructed at the approximate location on the Property
indicated on the site plan attached hereto and made a part hereof as Exhibit B.
The Property, the Building, the Parking Garage, the Parking Area (if any), and
any and all other improvements from time to time constructed on the Property in
accordance with the provisions of this Lease, are collectively hereinafter
referred to as the "Office Complex." The first Floor will contain various
service areas for the benefit (albeit at a charge customers thereof) of all
tenants of the Building, including, without limitation, a delicatessen with
sit-down table service for breakfast and lunch ("Deli") and a fitness center
("Fitness Center") (together, "Building Amenities").
B. In accordance with the terms, provisions and conditions of this Lease,
Landlord desires to let to Tenant, and Tenant desires to lease and hire from
Landlord, certain office space in the Building. Such office space will, for
purposes of this Lease, consist of 5,096 RSF (as such term is defined in Section
1.1 hereof) on the fourth Floor (Suite 450), and is generally depicted on the
floor plan attached hereto and made a part hereof as Exhibit C ("Office Space"
or "Premises"). Landlord and Tenant acknowledge and agree that the aforesaid RSF
of the Office Space is based on the plans dated February 25, 2000, prepared by
Tenant's architect, ▇▇▇▇, ▇▇▇▇▇▇ & Associates, Inc. (together with Tenant's
engineers, if any and as applicable, as may be reasonably acceptable to
Landlord, "Tenant's Architect").
C. Tenant hereby accepts this Lease and the Premises upon the covenants and
conditions set forth herein and subject to any and all encumbrances, covenants,
conditions, restrictions and other matters of record and all applicable zoning,
municipal, county, state and federal laws, ordinances and regulations governing
and regulating the use of the Premises.
LANDLORD HEREBY DEMISES AND LEASES THE PREMISES TO TENANT, TO HAVE AND TO
HOLD THE SAME, without any liability or obligation on the part of Landlord to
make any
alterations, improvements or repairs of any kind on or about the Premises,
except as expressly provided herein, for an initial term of five (5) years
("Initial Term"), commencing on the first (1st) day of June, 2000 (except as
such date may be modified pursuant to the provisions of Article 4 hereof, such
date is hereafter recurred to as the "Lease Commencement Date"), and ending on
the thirty-first (31st) day of May, 2005, unless sooner terminated or unless
extended, in each case in the manner provided hereinafter ("Term"), to be
occupied and used by Tenant for general office purposes and related incidental
uses (subject to Section 4.9 hereof), and for no other purpose, subject to the
covenants and agreements hereinafter contained.
Agreements:
Now, therefore, for and in consideration of the foregoing Recitals (which
are hereby made a part of this Lease), the Exhibits attached hereto or to be
attached hereto, and the covenants and agreements hereafter set forth, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Landlord and Tenant agree as follows:
ARTICLE 1
BASE RENT; OTHER AMENITIES; SECURITY DEPOSIT
Section 1.1 Base Rent. In consideration of the leasing aforesaid, and
subject to the terms, provisions and conditions of this Lease, Tenant agrees to
pay to Landlord, ▇/▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or at such other place as Landlord from
time to time may designate in writing, an annual base rental during each twelve
(12)-month period during the Term, beginning on the Lease Commencement Date
("Lease Year"), based on the rentable square footage ("RSF") of the Premises, as
determined in accordance with the methods of measuring rentable area as
described in the Standard Method for Measuring Floor Area in Office Buildings,
ANSI Z65.1-1996, as promulgated by the Building Owners and Managers Association
International ("BOMA Standards"). The RSF of the Office Space will be that set
forth in Recital B hereof.
Tenant will pay to Landlord an annual base rental for the Office Space
during each Lease Year, based on the RSF thereof, as follows:
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Lease Year Annual Base Rental Rate Annual Base Rent Monthly Base Rent
per RSF of Office Space
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1 $18.00 $ 91,728.00 $7,644.00
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2 $18.54 $ 94,479.84 $7,873.32
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3 $19.10 $ 97,333.60 $8,111.13
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4 $19.67 $100,238.32 $8,353.19
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5 $20.56 $103,244.96 $8,603.75
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The aforesaid annual rental amounts are sometimes hereinafter referred to as the
"Base Rent," and will be payable monthly, in advance, in equal monthly
installments, commencing on the first day of the Term (except as provided in
this Section 1.1) and continuing on the first day of each and every month
thereafter for the next succeeding months during the balance of the Term. If the
Term commences on a date other than the first day of a calendar month or ends on
a date other than the last day of a calendar month, monthly rent for the first
month of the Term or the last month of the Term, as the case may be, will be
prorated based upon the ratio that the number of days in the Term within such
month bears to the total number of days in such month.
2
Section 1.2 Parking. Subject to this Section 1.2(a), during the entire
Term, Tenant will lease one (1) reserved parking space in the Executive Parking
Area for the exclusive use of Tenant, and its employees, licensees and invitees.
There will be no charge for such reserved space during the first Lease Year.
Beginning on the first day of the second Lease Year, Tenant will pay to Landlord
a monthly gross rental charge for such reserved parking space in the amount of
Sixty-Two and 50/100ths Dollars ($62.50) (such monthly charge to be increased
each Lease Year thereafter by Two and 50/100ths Dollars ($2.50) per month).
Tenant will pay such gross rental to Landlord, in advance, in monthly
installments together with the payment of Base Rent hereunder. Such reserved
parking space will not be included as a part of the Office Space for purposes of
the determination of Tenant's Pro Rata Share of Real Estate Taxes (as such term
is defined in Section 2.2(d) hereof) or Tenant's Pro Rata Share of Operating
Expenses (as such term is defined in Section 2.2(d) hereof) hereunder. Subject
to this Section 1.2(a), other than in the Executive Parking Area, parking in the
Parking Garage and in the Parking Area (if any) will be available on a first
come, first serve basis. Landlord reserves the right to designate areas of the
Parking Garage and the Parking Area (if any) where Tenant, and its agents,
employees, licensees and invitees, will park, and may exclude Tenant, and its
agents, employees, licensees and invitees, from parking in other areas as
designated by Landlord; provided, however, that Landlord will not be liable to
Tenant for the failure of any tenant, or its employees, agents, licensees and
invitees, to abide by Landlord's designations or restrictions. Tenant, and its
employees, licensees and invitees, will not be permitted to use more spaces in
the Parking Garage (including, without limitation, the aforesaid spaces in the
Executive Parking Area) or the Parking Area (if any) than those attributable to
the Premises pursuant to the Parking Capacity, and the use of all parking spaces
in the Parking Garage and the Parking Area (if any) will be subject to such
reasonable roles and regulations as Landlord may from time to time institute.
Anything in this Lease to the contrary notwithstanding, but without decreasing
the Parking Capacity available to Tenant hereunder, Landlord may reserve parking
spaces in the Parking Area in a location from time to time designated by
Landlord, for the exclusive use of visitors to the Building and other tenants in
the Building (and their respective employees, licensees and invitees).
Section 1.3 Security Deposit. Contemporaneously with the execution hereof,
Tenant will pay to Landlord the sum of Twenty-One Thousand and 00/100ths Dollars
($21,000.00) ("Security Deposit"). The Security Deposit will be held by Landlord
without liability for interest and as security for the performance by Tenant of
Tenant's covenants and obligations under this Lease. It is expressly understood
that the Security Deposit will not be considered an advance payment of Base Rent
or Additional Rent (as such term is defined in Section 2.1 hereof), or a measure
of Landlord's damages in case of an Event of Default. Upon the occurrence of an
Event of Default, Landlord may, from time to time, without prejudice to any
other remedy, use the Security Deposit to the extent necessary to make good any
arrearages of Base Rent, Additional Rent, or any other damage, injury, expense
or liability caused to Landlord by such Event of Default. Following any such
application of the Security Deposit, Tenant will pay to Landlord on demand the
amount so applied in order to restore the Security Deposit to its original
amount. Provided there exists no Event of Default hereunder, Landlord will
return to Tenant any remaining balance of the Security Deposit upon the
expiration or earlier termination of this Lease. Landlord may assign the
Security Deposit to the transferee and thereafter will have no further liability
for the return of the Security Deposit.
ARTICLE 2
ADDITIONAL RENT
Section 2.1 Additional Rent. In addition to the Base Rent payable by Tenant
under the provisions of Article 1 hereof, Tenant will pay to Landlord
"Additional Rent" as hereinafter provided in this Article 2. All sums under this
Article and all other sums and charges required to be paid by Tenant under the
Lease (except Base Rent), however denoted, will be deemed to be "Additional
Rent." If any such amounts or charges are not
3
paid at the time provided in the Lease, they will nevertheless be collectible as
Additional Rent with the next installment of Base Rent falling due.
Section 2.2 Definitions. For the purposes of this Article 2, the parties
hereto agree upon the following definitions:
(a) "Calendar Year" will mean each of those calendar years commencing with
and including the year during which the Term commences, and ending
with the calendar year during which the Term (including any extensions
or renewals) terminates.
(b) "Real Estate Taxes" will mean and include all personal property taxes
of Landlord relating to Landlord's personal property, located in the
Office Complex and used or useful in connection with the operation and
maintenance thereof, real estate taxes and installments of special
assessments, including interest thereon, relating to the Property and
Office Complex, and all other governmental charges, general and
special, ordinary and extraordinary, foreseen as well as unforeseen,
of any kind and nature whatsoever, or other tax, however described,
which is levied or assessed by the United States of America or the
state in which the Office Complex is located or any political
subdivision thereof, against Landlord or all or any part of the Office
Complex as a result of Landlord's ownership of the Property or Office
Complex, and payable during the respective Calendar Year. It will not
include any net income tax, gift tax, estate tax, franchise tax,
capital stock tax, conveyance or transfer tax, or inheritance tax, so
long as none of the same is in lieu of real estate taxes. Further,
"Real Estate Taxes" will include, without limitation, Real Estate
Taxes attributable to the entire first Floor, regardless of the fact
that no "Real Estate Taxes" will be allocable (for purposes of the
payment of a portion thereof) to the Building Amenities located on the
first Floor.
(c) "Operating Expenses" will mean and include, except as otherwise
provided in this Section 2.2(c), all expenses incurred with respect to
the maintenance and operation of the Property and Office Complex as
determined by Landlord's accountant in accordance with generally
accepted accounting principles consistently followed, including,
without limitation, Park assessments, insurance premiums, maintenance
and repair costs, steam, electricity, water, sewer, gas and other
utility charges, fuel, lighting, window washing, janitorial services,
trash and rubbish removal, wages payable to employees of Landlord
whose duties are connected with the operation and maintenance of the
Property and Office Complex (but only for the portion of their time
allocable to work related to the Property or the Office Complex), all
expenses incurred and costs associated with the operation and
maintenance of the Building Amenities (including, without limitation,
the cost of repair or replacement of the kitchen equipment in the
Deli, the cost of repair or replacement of any fixtures, exercise
machines or any other equipment in the Fitness Center, and the cost of
repair or replacement of any other equipment used in connection with
the Deli, the Fitness Center or any other Building Amenities, the
costs of providing utilities, cleaning and any other building services
to the Building Amenities, and the costs incurred for the payment of
any third party fees in connection with the operation and maintenance
of any of the Building Amenities), amounts paid to contractors or
subcontractors for work or services performed in connection with the
operation and maintenance of the Property and Office Complex, all
costs of uniforms, supplies and materials used in connection with the
operation and maintenance of the Property and Office Complex, all
payroll taxes, unemployment insurance costs, vacation allowances, and
the cost of providing disability insurance or
4
benefits, pensions, profit sharing benefits, hospitalization,
retirement or other so-called fringe benefits, and any other expense
imposed on Landlord, or its contractors or subcontractors, pursuant to
law or pursuant to any collective bargaining agreement covering such
employees, all services, supplies, repairs, replacements or other
expenses for maintaining and operating the Property and the Office
Complex, reasonable attorneys' fees and costs in connection with any
appeal or contest of real estate or other taxes or levies, and such
other expenses as may be ordinarily incurred in the operation and
maintenance of an office complex and not specifically set forth
herein, including, without limitation, reasonable management fees and
the costs of a building office at the Office Complex. The term
"Operating Expenses" will also include the pro rata share allocable to
the Office Complex of those expenses incurred by Landlord in
connection with city sidewalks adjacent to the Property and any
pedestrian walkway system (either above or below ground) or other
public facility to which Landlord or the Office Complex is from time
to time subject in connection with the operation of the Office
Complex. The term "Operating Expenses" will also include all expenses
incurred in connection with the maintenance, repair and operation of
the heating, ventilating and cooling systems servicing the Building,
exclusive of such systems which service only a particular tenant's
space in the Building ("HVAC System"), as such expenses are determined
by Landlord's accountant in accordance with generally accepted
accounting principles consistently followed. Such expenses will
include, without limitation, supplies in connection with the operation
of the HVAC System (such as chemicals, filters, belts and the like),
electricity separately metered to the operation of the HVAC System,
and labor and materials related to the operation of the HVAC System.
Subject to this Section 2.2(c), the term "Operating Expenses will not
include the following:
(i) any capital improvements to the premises of any other tenant in
the Building or any other portion of the Office Complex
(including, without, limitation, the HVAC System), other than
as described in clause (iv) below;
(ii) expenses incurred in leasing or procuring tenants, leasing
commissions, advertising expenses, expenses for renovating
space for new tenants, or legal expenses incident to
enforcement by Landlord of the terms of any lease;
(iii) interest or principal payments on any mortgage or other
indebtedness of Landlord;
(iv) depreciation allowance or expense, provided, however, that in
the event Landlord installs equipment in or makes improvements
or alteration to the Office Complex (including, without
limitation, the HVAC System) which are for the purpose of
reducing energy costs, maintenance costs or any other Operating
Expenses, or which are required under any governmental laws,
regulations or ordinances which were not required on the date
of this Lease, Landlord may include in the Operating Expenses
reasonable charges for interest on such investment and
reasonable charges for depreciation on the same so as to
amortize such investment over the
5
reasonable life of such equipment, improvement or alteration on
a straight-line basis;
(v) costs of operating the Deli and the Fitness Center, to the
extent (if any) that such costs are offset by any net income
received by Landlord from the operation of the Deli and the
Fitness Center (i.e., any net income received by Landlord from
the operation of the Deli and the Fitness Center will be used
to offset Operating Expenses);
(vi) costs of repairs or other work occasioned by fire, earthquake,
windstorm or other casualty, to the extent that Landlord has
been reimbursed by insurance companies therefor;
(vii) subject to Section 4.11 hereof, costs in excess of Two Thousand
Five Hundred and 00/100ths Dollars ($2,500.00) per Calendar
Year, for the remediation of any hazardous substances or
materials not caused by Tenant;
(viii) costs of any work performed, to the extent that Landlord has
received compensation from any authorities in connection with
an eminent domain proceeding;
(ix) costs of providing construction warranty services with respect
to the Building or with respect to tenant improvements provided
to Tenant; and
(x) unless caused by Tenant, fines or penalties incurred due to
violations by Landlord of any applicable law, statute,
ordinance, rule or regulation with respect to the operation of
the Building or due to breach of any lease by Landlord.
(d) "Tenant's Pro Rata Share of Real Estate Taxes" and "Tenant's Pro Rata
Share of Operating Expenses" will each mean that portion of the Real
Estate Taxes or Operating Expenses, respectively, which is equal to
the percentage figure determined by dividing the RSF of the Office
Space by the RSF of all of the leaseable office span in the Building.
As of the date of this Lease, Tenant's Pro Rata Share of Real Estate
Taxes and Tenant's Pro Rata Share of Operating Expenses will each be
1.936%
Section 2.3 Adjustment of Operating Expenses. Notwithstanding anything to
the contrary set forth above, it is agreed that in the event the Building is not
fully occupied during any Calendar Year, a reasonable and equitable adjustment
will be made by Landlord in computing that portion of the Operating Expenses for
such year which vary on the basis of the proportion of the Building which is
occupied from time to time, so that such portion of the Operating Expenses will
be adjusted to the amount that would have been incurred had the Building been
fully occupied during such Calendar Year.
Section 2.4 Estimated Real Estate Taxes and Operating Expenses for Initial
Calendar Year. As to the Calendar Year during which the Term commences, Landlord
will estimate the amount of Tenant's Pro Rata Share of Real Estate Taxes and the
amount of Tenant's Pro Rata Share of Operating Expenses (based upon the
estimated number of months of the Term within such initial Calendar Year), and
will notify Tenant thereof, in writing.
6
Section 2.5 Estimated Real Estate Taxes and Operating Expenses for
Subsequent Calendar Years, Subject to Section 2.2(c) hereof, as to each Calendar
Year after the initial Calendar Year, Landlord will estimate for each such
Calendar Year (a) the total amount of the Real Estate Taxes; (b) the total
amount of the Operating Expenses; (c) Tenant's Pro Rata Share of Real Estate
Taxes; (d) Tenant's Pro Rata Share of Operating Expenses; and (e) the
computation of the annual and monthly Additional Rent payable during such
Calendar Year as a result of increases or decreases in Tenant's Pro Rata Share
of Real Estate Taxes and Tenant's Pro Rata Share of Operating Expenses. Such
estimate will be in writing and will be delivered to Tenant at the Premises.
Section 2.6 Payment of Additional Rent. Tenant will pay, as Additional
Rent, the respective amounts of Tenant's Pro Rata Share of Real Estate Taxes and
Tenant's Pro Rata Share of Operating Expenses for each Calendar Year, as
estimated by Landlord hereunder, in equal monthly installments, in advance, on
the first day of each month during each applicable Calendar Year. In the event
that such estimate is delivered to Tenant after the first day of January of the
applicable Calendar Year, then the last estimate for the prior Calendar Year
will remain in effect until the estimate for the applicable Calendar Year has
been delivered to Tenant. Such newly estimated amount will thereafter be payable
as Additional Rent hereunder, in equal monthly installments, in advance, on the
first day of each month over the balance of such Calendar Year, with the number
of installments being equal to the number of full calendar months remaining in
such Calendar Year.
Section 2.7 Re-estimates of Real Estate Taxes and Operating Expense.
Subject To Section 2.2(c) hereof, from time to time during any applicable
Calendar Year, Landlord may re-estimate the amount of Real Estate Taxes and
Operating Expenses and Tenant's Pro Rata Share thereof, in such event Landlord
will notify Tenant, in writing, of such re-estimate in the manner above set
forth and fix monthly installments for the then-remaining balance of such
Calendar Year in an amount sufficient to pay the re-estimated amount over the
balance of such Calendar Year, after giving credit for payments made by Tenant
on she previous estimate.
Section 2.8 Adjustment of Actual Real Estate Taxes and Operating Expenses.
Upon completion of each Calendar Year, Landlord will cause its accountants to
determine the actual amount of Real Estate Taxes and Operating Expenses for such
Calendar Year and Tenant's Pro Rata Share thereof, and will deliver a written
certification of the amounts thereof to Tenant after the end of each Calendar
Year. If Tenant has paid less than its Pro Rata Share of Real Estate Taxes or
less than its Pro Rata Share of Operating Expenses for any Calendar Year, Tenant
will pay the balance of its Pro Rata Share of the same within ten (10) days
after receipt of such statement. If Tenant has paid more than its Pro Rata Share
of Real Estate Taxes or more than its Pro Rata Share of Operating Expenses for
any Calendar Year, Landlord will, at Tenant's option, either (a) refund such
excess, or (b) credit such excess against the most current monthly installment
or installments due Landlord for its estimate of Tenant's Pro Rata Share of Real
Estate Taxes or Tenant's Pro Rata Share of Operating Expenses for the next
following Calendar Year. A pro rata adjustment will be made for a fractional
Calendar Year occurring during the Term or any renewal or extension thereof
based upon the number of days of the Term during such Calendar Year as compared
to three hundred sixty-five (365) days, and all additional sums payable by
Tenant or credits due Tenant as a result of the provisions of this Article 2
will be adjusted accordingly.
Upon reasonable advance written notice, and during normal business hours,
Tenant and its employees, agents and representatives will have the right, at the
Premises or at the office of Landlord or the managing agent, to inspect and
review Landlord's books and records with respect to (and only with respect to)
Real Estate Taxes and Operating Expenses; provided, however, that any such
review will be completed in not more Than sixty (60) days after the date on
which Landlord has submitted its statement as provided in this Section 2.8. If
Tenant believes that any error exists in Landlord's calculation of Real Estate
Taxes or Operating Expenses, Tenant will notify Landlord thereof (giving
reasonable detail of the basis for Tenant's belief) within ten (10) days after
the completion of such review. Then, if within twenty (20) days after the
delivery of such notification, Landlord and Tenant are not able to agree on the
amount of the Real Estate Taxes or Operating Expenses, such disagreement will be
resolved in accordance with this Section 2.8. Within five (5) days after
Landlord's and Tenant's failure to
7
reach agreement as aforesaid, then Landlord and Tenant will agree on an
independent certified public accountant (the compensation of whom will not be
incentive-based or otherwise dependent, in whole or in part, on the discovery of
errors in the computation of the Real Estate Taxes or the Operating Expenses) to
be designated to resolve such disagreement ("Independent CPA"). If Landlord and
Tenant are unable to agree on the Independent CPA to be designated, then within
five (5) days after the expiration of the aforesaid initial five (5)-day period,
each of Landlord and Tenant will designate an independent certified public
accountant (the compensation of whom will not be incentive-based or otherwise
dependent, in whole or in part, on the discovery of errors in the computation of
the Real Estate Taxes or the Operating Expenses), which designation will be set
forth in a written notice given to the other. Within five (5) days thereafter,
such two (2) independent certified public accountants will designate a third
independent certified public accountant (subject to the aforesaid requirements
as to compensation) who will act as the Independent CPA hereunder. Within thirty
(30) days after his or her designation, the Independent CPA will determine the
amount of the Real Estate Taxes and Operating Expenses for the Calendar Year in
question, which determination will be made in accordance with the terms,
provisions and conditions of this Lease and will be final and binding on both
Landlord and Tenant. Landlord and Tenant will make any necessary adjusting
payments to each other within thirty (30) days after the Real Estate Taxes and
Operating Expenses have been determined in accordance with the foregoing
applicable provisions. The costs of the aforesaid review (including, without
limitation, the costs of the Independent CPA and the costs of the other two
independent certified public accountants, if applicable) will be borne entirely
by Tenant if the results thereof reveal an error of less than five percent (5%)
in either the Real Estate Taxes or the Operating Expenses. The costs of the
aforesaid review (including, without limitation, the costs of the Independent
CPA and the costs of the other two independent certified public accountants, if
applicable) will be borne entirely by Landlord if the results thereof reveal an
error which is equal to or greater than five percent (5%) in both the Real
Estate Taxes and the Operating Expenses.
Section 2.9 Separately Metered Utilities. Electrical service will be
separately metered to the Office Space and charged directly to Tenant. Tenant
will pay any and all such charges when due, and prior to the attachment of any
lien or other collection action being taken by the utility providing such
service. Such payments will constitute Additional Rent hereunder; provided,
however, that the parties acknowledge and agree that such payments will not be
due and payable to Landlord, unless Tenant defaults in its payment obligations
to the appropriate utilities and, after notice and an opportunity for Tenant to
cure as provided herein, Landlord makes such payment itself. The cost of
installing such separate metering will be included among the Construction Costs
(as such term is defined in Section 4.2(d) hereof).
Section 2.10 Other Additional Rent. Tenant will pay, also as Additional
Rent, all other sums and charges required to be paid by Tenant under this Lease,
and any tax or excise on rents, gross receipts tax, or other tax, however
described, which is levied or assessed by the United Sags of America or the
state in which the Office Complex is located or any political subdivision
thereof, against Landlord in respect to the Base Rent, Additional Rent, or other
charges reserved under this Lease or as a result of Landlord's receipt of such
rents or other charges accruing under this Lease; provided, however, that Tenant
will have no obligation to pay net income taxes of Landlord.
ARTICLE 3
INTEREST ON BASE AND ADDITIONAL RENT; RENT INDEPENDENT
Section 3.1 Interest on Past Due Obligations. Any installment of Base Rent,
Additional Rent, or other charges to be paid by Tenant accruing under the
provisions of this Lease which will not be paid when due, will bear interest at
a per annum rate equal to two (2) percentage points in excess of the "prime
rate" of interest then charged by ▇▇▇▇▇▇ Trust and Savings Bank, Chicago,
Illinois (or, if it is not then in existence, its successor, or if neither is
then in existence, another reasonably comparable bank), from the date when the
same is due until the
8
same will be paid, but if such rate exceeds the maximum interest rate permitted
by law, such rate will be reduced to the highest rate allowed by law under the
circumstances ("Interest Rate").
Section 3.2 Rent Independent. Tenant's covenants to pay the Base Rent and
the Additional Rent are independent of any other covenant, condition, provision
or agreement herein contained. Nothing herein contained will be deemed to
suspend or delay the payment of any amount of money or charge at the time the
same becomes due and payable hereunder, or limit any other remedy of Landlord.
Base Rent and Additional Rent are sometimes collectively referred to as "Rent."
Rent will be payable without deduction, offset, prior notice or demand, in
lawful money of the United States.
ARTICLE 4
CONSTRUCTION OF BASE BUILDING, LEASEHOLD IMPROVEMENTS; POSSESSION OF PREMISES
Section 4.1 Plans for Construction of Building and Leasehold Improvements.
(a) Prior to the Lease Commencement Date (but in the case of the Building
Amenities, on or about the Lease Commencement Date), Landlord, or its general
contractor ("Leasehold Improvement General Contractor"), and its subcontractors
and sub-subcontractors, (i) will construct the base building portion of the
Building, including, without limitation, the Parking Garage and sitework and
landscaping, and the Building Amenities, but exclusive of any and all
improvements of or for other occupants of the Building and also exclusive of any
corridor-related improvements which are located in the Office Space or on the
Office Space side of a common corridor, all such corridor-related improvements
being part of the Leasehold Improvements hereunder ("Base Building"); and (ii)
will, at Tenant's sole cost and expense (subject to Section 4.2 hereof), fit up
the Office Space with the "Leasehold Improvements" in substantial accordance
with the construction plans therefor (including, without limitation, all
required mechanical, electrical, plumbing, fire/life safety and other
architectural and engineering drawings) to be prepared by Tenant's Architect,
subject to Landlord's reasonable approval thereof ("Final Leasehold Improvement
Plans"). Anything in this Lease to the contrary notwithstanding, (i) Landlord
will have a reasonable period of time after the Lease Commencement Date to
complete, among other things, any surface coat paving and landscaping of
exterior areas which cannot reasonably be completed by the Lease Commencement
Date due to Excused Delays (as such term is defined in Section 4.4 hereof); and
(ii) Landlord will have no obligation to Tenant with respect to (A) the
completion (or the time thereof) of tenant improvements or finishes for tenant
spaces within the Building other than the Premises, or (B) the completion of
components of the Building or the Office Complex which (1) do not materially
affect the structure or function of the Building or the Office Complex, or the
systems or components thereof, (2) are not within or do not directly serve the
Premises, and (3) do not unreasonably adversely affect the appearance or
aesthetics of the Building or the Office Complex, either from the exterior
thereof or from any of the common areas thereof.
(b) Tenant acknowledges that it will be required (i) to cause the Final
Leasehold Improvement Plans to be prepared and completed in a timely manner by
Tenant's Architect, subject to Landlord's reasonable approval thereof, which
approval will in turn be subject to all applicable governmental requirements and
applicable law, and (ii) to make certain color and other selections for or with
respect to the Leasehold Improvements. Anything in this Lease to the contrary
notwithstanding, Tenant will provide Landlord with the Final Leasehold
Improvement Plans and with any and all required color and other selections no
later than March 15, 2000. In those cases where Landlord's reasonable approval
is required under this Section 4.1(b), if Landlord fails to disapprove any of
the Final Leasehold Improvement Plans within ten (10) business days after their
delivery, such Final Leasehold Improvement Plans, as delivered, will be deemed
to have been approved. However, if any Final Leasehold Improvement Plans are
disapproved within such ten (10)-business day period,
9
Landlord will notify Tenant thereof, in writing, within such ten (10)-business
day period, detailing with reasonable specificity that portion or element which
has been disapproved and the reasons for such disapproval. Thereafter, in each
instance of further resubmission of the Final Leasehold Improvement Plans,
Landlord will have three (3) business days to approve or disapprove, and Tenant
will have five (5) business days within which to revise and resubmit the
disapproved Final Leasehold Improvement Plans for Landlord's approval or
disapproval, as aforesaid. Such five (5)-business day and three (3)-business day
sequence of resubmission and approval or disapproval will continue until such
time as the Final Leasehold Improvement Plans have been approved by Landlord,
and, when so approved, representatives of Landlord and Tenant will affix their
respective signatures or initials to each page comprising the approved Final
Leasehold Improvement Plans.
(c) Landlord will furnish (i) at Landlord's sole cost and expense, all of
the material, labor and equipment for the construction on the Property of the
Base Building, and (ii) at Tenant's sole cost and expense (subject to Section
4.2 hereof), all of the material, labor and equipment for the construction of
the Leasehold Improvements therein as specified in the Final Leasehold
Improvement Plans. Such construction will be effected in a good and workmanlike
manner in substantial accordance with the Final Leasehold Improvement Plans.
Subject to this Section 4.1(c), Landlord will complete, or cause the completion
of, the construction thereof (other than with respect to Tenant's use thereof
and other than with respect to the design of the Leasehold Improvements, which
compliance will be the responsibility of Tenant, either itself or through
Tenant's Architect), in substantial accordance with all building and zoning laws
(other than with respect to Tenant's use thereof, which compliance will be
Tenant's responsibility) of the place in which the Property is situated, all
laws, ordinances, orders, rules, regulations and requirements of all federal,
state and municipal governments and the appropriate departments, commissions,
boards and officers thereof, and the orders, rules and regulations of the Board
of Fire Underwriters where the Property is situated, or any other body
exercising similar functions, in all cases as the same are in effect and
enforced by the governmental or other bodies having jurisdiction over such
matters as of the date on which the initial building permits therefor are issued
by the appropriate governmental authorities. Among other things, Landlord will
be responsible for the full compliance of the Base Building (but not the
Leasehold Improvements) with the accessibility requirements of Title III of the
applicable provisions of the Americans with Disabilities Act of 1990 ("ADA"), as
the same are in effect and enforced by governmental or other bodies having
jurisdiction over such matters as of the date on which the initial building
permits therefor are issued by the appropriate governmental authorities. All
compliance with ADA, and all compliance with all laws, ordinances, orders,
rules, regulations and requirements of all federal, state and municipal
governments and the appropriate departments, commissions, boards and officers
thereof, and the orders, rules and regulations of the Board of Fire Underwriters
where the Property is situated, or any other body exercising similar functions,
in all cases as the same are from time to time in effect and enforced by the
governmental or other bodies having jurisdiction over such matters, in each case
as they relate to the Leasehold Improvements and any Work (as such term is
defined in Section 8.1 hereof) will be the sole responsibility of Tenant and
Tenant's Architect.
Section 4.2 Allowances for Leasehold Improvements; Bidding for
Subcontractors.
(a) Although Tenant will be solely responsible for all costs and expenses
in connection with the construction of the Leasehold Improvements, with respect
to the planning, design (including, without limitation, all mechanical,
electrical, plumbing, fire/life safety and other architectural and engineering
drawings, all of which will be the responsibility of Tenant) and construction of
the Leasehold Improvements, Tenant will be entitled to an allowance equal to the
sum of Thirty-Three and 10/100ths Dollars ($33.10) per RSF of the Office Space.
Landlord, the Leasehold Improvement General Contractor, and their respective
subcontractors and sub-subcontractors, and not any third parties, will perform
the construction of the Leasehold Improvements, albeit at Tenant's sole cost and
expense as provided herein. Anything in this Lease to the contrary
notwithstanding, Tenant will be required to expend not less than Thirty-Two and
00/100ths
10
Dollars ($32.00) per RSF of the Office Space in (as such term is defined in
Section 4.2(d) hereof) in connection with the construction of the Leasehold
Improvements.
(b) The aggregate allowance with regard to the planning, design and
construction of the Leasehold Improvements, as set forth in Section 4.1(a)
hereof, is hereinafter referred to as the "Construction Allowance."
(c) During the construction of the Leasehold Improvements, Landlord, or the
Leasehold Improvement General Contractor, will periodically provide Tenant with
updated projections of the Construction Costs, as compared with the Construction
Allowance. In the event that such projected Construction Costs exceed the
Construction Allowance, then during the balance of the period of construction of
the Leasehold Improvements, Tenant will pay the entire amount of such excess to
Landlord, on a progress pay basis, within ten (10) days after Landlord's invoice
to Tenant therefor. As soon as practicable following the Lease Commencement
Date, Landlord (i) will determine the actual Construction Costs, (ii) will
reconcile such actual Construction Costs with the Construction Allowance and the
foregoing payments (if any) theretofore made by Tenant, and (iii) will notify
Tenant, in writing, of such determination and reconciliation. In the event that
such reconciliation shows that the sum of the Construction Allowance plus any
progress payments theretofore made by Tenant exceeds the Construction Costs,
then the excess (up to a maximum of the progress payments theretofore made) will
be credited against the Base Rent payments due hereunder from and after the
Lease Commencement Date (beginning with the first Base Rent payment due after
Landlord's delivery of the aforesaid reconciliation notification), until the
full amount of such excess has been so applied. In the alternative, at
Landlord's sole election, Landlord will pay the full amount of such excess to
Tenant within thirty (30) days after Landlord's delivery of the aforesaid
reconciliation notification. On the other hand, in the event that such
reconciliation shows that the Construction Costs exceed the sum of the
Construction Allowance plus any progress payments theretofore made by Tenant,
then Tenant will pay the full amount of such excess to Landlord within thirty
(30) days after Landlord's delivery of the aforesaid reconciliation
notification.
(d) For purposes of this Lease, the "Construction Costs" will be equal to
the sum of (i) all actual so-called "hard" costs of constructing the Leasehold
Improvements, including, without limitation, (A) all costs of cabling (if any)
performed by or on behalf of Landlord or the Leasehold Improvement General
Contractor, (B) all costs in connection with the installation of the metering or
sub-metering of electrical service under Section 2.9 hereof incurred in
connection with such construction, (C) the cost of all materials, labor,
equipment, hoisting, insurance, taxes and permits (all of which will be
documented and verifiable); (ii) the cost of any Change Orders; (iii) all actual
so-called "soft" costs in connection with the construction of the Leasehold
Improvements, including, without limitation, all architect's, engineer's and
design fees, and all other consulting fees (including, without limitation,
out-of-pocket expenses incurred in connection with the review and approval of
Tenant's plans and drawings for the Leasehold Improvements, up to a maximum of
Two Thousand Five and 00/100ths Dollars ($2,500.00)); (iv) the cost of all
general conditions; and (v) the fee charged by the Leasehold Improvement General
Contractor, which fee will be included in its competitively bid "lump sum" price
(as provided in Section 4.2(e) hereof), which fee will be in lieu of overhead
and profit, any construction management fees, and any other overhead, profit or
other fees to Landlord or the Leasehold Improvement General Contractor. All of
the aforesaid actual costs will also include, without limitation, the aggregate
of all interest costs actually incurred by Landlord arising in connection with
any resultant delays (to the extent that such delays result from acts or
omissions of Tenant or from Change Orders requested by Tenant) and any and all
enforceable payment obligations under those contracts or modifications to
contracts entered into by Landlord or its subcontractors, which are necessary to
effectuate the work or the specific Change Order.
11
(e) Landlord will solicit bids from potential Leasehold Improvement General
Contractors for the furnishing of labor or materials for the Leasehold
Improvements, on a "lump sum" basis, in accordance with the following procedure:
(i) A potential bidder's list of at least three (3) approved
pre-qualified bidders will be developed jointly by Landlord and
Tenant, acting reasonably. Such list will be determined based on
each bidder's qualifications, past experience on similar types of
projects, availability to do the work, financial strength,
bondability and previous history of work with Landlord or Tenant.
(ii) Landlord will provide a copy of each bid solicitation to Tenant's
Architect before such bid solicitation is issued. Within forty-eight
(48) hours (excluding Saturdays, Sunday and Holidays (as such term
is defined in Section 5.1 hereof)) after the delivery of such bid
solicitation, Tenant will cause Tenant's Architect to provide any
comments thereon to Landlord, in writing; provided, however, that
Landlord will not be obligated to incorporate any such comments into
the bid solicitation, unless necessary in order to comply with the
provisions of this Section 4.2(e). If Tenant's Architect fails to
provide comment to Landlord within the aforesaid forty-eight (48)-
hour period, then it will be conclusively presumed that Tenant's
Architect has no comments.
(iii) Upon receipt of each of the bids, such bids will be opened and
reviewed by Landlord for, among other things, completeness,
compliance with the bid request, a "dollars versus budget"
comparison, and the ability of the bidder to complete its
commitment.
(iv) After the review of the bids, Landlord will prepare a bid summary
and its recommendation for award, and will present the same to
Tenant's Architect for its approval. Within forty-eight (48) hours
(excluding Saturdays, Sunday and Holidays) after the presentation of
the aforesaid bid summary to Tenant's Architect, Tenant will cause
Tenant's Architect to approve or disapprove such recommendation,
which approval or disapproval rights will not be unreasonably
exercised. If Tenant's Architect fails to approve or disapprove such
recommendation within the aforesaid forty-eight (48)-hour period,
then it will be conclusively presumed that Tenant's Architect has
given its approval thereto. After the general contract has been
awarded to the selected Leasehold Improvement General Contractor,
such Leasehold Improvement General Contractor will prepare and
submit to Tenant, or Tenant's Architect, a schedule of values.
(v) Tenant reserves the right, if justified by good faith reasons, to
select any bid regardless of the cost thereof; provided, however,
that Tenant will remain responsible for all Construction Costs in
excess of the Construction Allowance, as provided in Section 4.2(c)
hereof; and provided further, however, that Landlord will not be
required to accept any bid which is unacceptable to it or to do
business with any contractor to whom Landlord has a reasonable
objection. Tenant will be responsible for any delays necessitated by
rebidding or delays in bid opening required by Tenant.
Section 4.3 Change Orders. With respect to the Leasehold Improvements (but
not the Base Building), Tenant may order changes in the work consisting of
additions or deletions to, or other revisions in, the Final Leasehold
Improvement Plans, so long as the same are reasonably acceptable to Landlord.
Any such
12
change in work which has been authorized by a written change order (which will
be executed as hereinafter provided) is herein sometimes referred to as a
"Change Order." Anything in this Lease to the contrary notwithstanding, Landlord
will not be responsible or liable hereunder for any delay in the construction of
the Leasehold Improvements, or any additional costs with respect thereto. To the
extent that such delay or additional costs result from a Change Order, and no
Change Order will be effected if it is not permitted by applicable building and
zoning regulations, as the same are then interpreted and enforced by the
appropriate authorities having jurisdiction thereof.
A Change Order is a written order prepared by or on behalf of Landlord or
its general contractor and signed by Tenant, stating in detail the change in the
work, and, if appropriate, the increase or decrease to the scope of work of the
Leasehold Improvements, and any change in the scheduled date for the substantial
completion thereof or any change in the cost thereof (which cost will be
consistent with the method of determining the Construction Costs hereunder)
resulting from such Change Order.
Section 4.4 Force Majeure. Landlord (a) will proceed diligently with the
construction of the Base Building and the Leasehold Improvements, and (b) will
substantially complete and deliver possession of the Premises to Tenant on or
about June 1, 2000; provided, however, that if delay is caused or contributed to
by act of Tenant, or those acting for or under Tenant, or by labor disputes,
casualties, acts of God or the public enemy, governmental embargo restrictions,
shortages of fuel, labor, or building materials, action or non-action of public
utilities, or of local, state or federal governments affecting the work, or
other causes beyond Landlord's reasonable control (together, "Excused Delays"),
then the time of completion of such construction and delivery of possession will
be extended for the additional time caused thereby. Further, Tenant will be
solely responsible for all costs and expenses resulting from any delay caused or
contributed to by any act or neglect of Tenant, or those acting for or under
Tenant.
Section 4.5 Construction Guaranty; Substantial Completion. Landlord
guarantees the Base Building and the Leasehold Improvements, against defective
workmanship and/or materials for a period of one (1) year from the date of
substantial completion thereof. Landlord agrees, at its solo cost and expense,
to repair or replace any defective item occasioned by poor workmanship and/or
materials during such one (l)-year period. Performance of such one (1)-year
guaranty will be the sole and exclusive obligation of Landlord with respect to
defective workmanship and/or materials, and Tenant's rights to enforce such one
(1)-year guaranty will be Tenant's sole and exclusive remedy with respect to
such defective workmanship and/or materials in limitation of any contract,
warranty or other rights, whether express or implied, that Tenant may otherwise
have under applicable law. From and after the expiration of the aforesaid one
(l)-year guaranty of Landlord against defective workmanship and materials,
Landlord agrees to cooperate with Tenant in the enforcement by Tenant, at
Tenant's sole cost and expense, of any express warranties or guaranties of
workmanship or materials given by subcontractors or materialmen that guarantee
or warrant against defective workmanship or materials for a period of time in
excess of the one-year period described above, and to cooperate with Tenant in
the enforcement by Tenant, at Tenant's sole cost and expense, of any service
contracts that provide service, repair or maintenance to any item incorporated
in the Premises for a period of time in excess of such one (l)-year period.
For purposes of this Lease, the Leasehold Improvements will be considered
"substantially completed and ready for occupancy" (or "substantially completed,"
"ready for occupancy" or other similar use of a phrase including the words
"substantially completed" or "ready for occupancy" or a form of either or both)
at such time as (a) the Leasehold Improvements will have been substantially
completed in substantial accordance with the Final Leasehold Improvement Plans
(including, without limitation, the substantial completion of restrooms and
hallways on the fourth Floor in substantial accordance with the Base Building
plans therefor), and (b) the municipality having jurisdiction thereof issues a
certificate of occupancy permitting Tenant to occupy the Premises, or takes such
other action as may be customary to permit occupancy or use thereof, provided,
however, that neither the aforesaid substantial completion, nor the issuance of
a certificate of
13
occupancy or such other action as may be customary to permit occupancy or use
thereof, will be a condition to the achievement of "substantial completion and
ready for occupancy," or will be a condition to payment of. Rent or commencement
of the Term, if any delay or failure to achieve the aforesaid substantial
completion or to secure such certificate or action is caused by the act or
neglect of Tenant or its contractors, agents or employees. In the event that any
such act or neglect causes a delay or failure of the aforesaid substantial
completion or the issuance of any such certificate or the taking of any other
such action, such substantial completion will be considered to have been
achieved, and such certificate or action will be considered to have bean issued
or taken, on the date on which it would have been issued or taken in fact, but
for such act or neglect.
Within ten (10) days after the substantial completion of the Leasehold
improvements, Tenant's Architect will prepare and submit to Landlord a proposed
"punch list" of items yet to be completed. Based upon such proposed punch list,
Landlord and Tenant, acting in good faith, will agree on the final punch list
items. Landlord will use its reasonable commercial efforts to complete all such
punch list items, without materially adversely affecting Tenant's conduct of its
business in the Office Space, as soon as practicable thereafter, subject to
Excused Delays.
Section 4.6 Repair and Maintenance. Except as expressly provided in this
Lease (including, without limitation, the one (l)-year guaranty against
defective items occasioned by poor workmanship and/or materials under Section
4.5 hereof and the obligation to complete incomplete items under Section 4.8
hereof), Tenant, from and after the Lease Commencement Date, will have and hold
the Premises as the same will then be, without any liability or obligation on
the part of Landlord for making any alterations, improvements or repairs of any
kind in or about the Premises for the Term. Tenant will maintain The Premises
and all parts thereof in a good and sufficient state of repair as required by
the provisions of this Lease.
Section 4.7 Delayed or Earlier Possession; Pre-Lease Commencement Date
Access.
(a) If Landlord will be unable to give possession of the Premises, or any
portion thereof, on the date specified therefor herein because the construction
of the Building or the completion of the Premises has not been sufficiently
completed to make the Premises ready for occupancy, or for any other reason,
Landlord will not be subject to any claims, damages or liabilities for the
failure to give possession on such date. Under such circumstances, except as
provided in Section 4.5 hereof, the Rent reserved and the covenants to pay the
same will not commence until possession of the Premises is given or the Premises
are ready for occupancy, whichever is earlier. Failure to give possession on the
date specified therefor herein will in no way affect the validity of this Lease
or the obligations of Tenant hereunder, but the expiration date of the Term will
be extended by the number of days after June 1, 2000, that possession by Tenant
is so delayed. If Tenant is given and accepts possession of the Premises on a
date earlier than the date above specified for commencement of the Term, then
the Rent reserved herein and all covenants, agreements and obligations herein
and the Term will commence on the date that possession of the Premises is given
to Tenant, and the expiration date will remain as originally anticipated (i.e.,
will not be moved to an earlier date).
Promptly following Landlord's request, the parties will execute and deliver
to one another a written declaration confirming the actual Lease Commencement
Date and the actual date for the expiration of the Term. Such declaration will
be in a form reasonably designated by Landlord.
(b) It is anticipated that the Office Space will be substantially completed
and ready for occupancy in accordance with the terms, provisions and conditions
of this Lease by June 1, 2000, or such later date as may be required in the
event of one or more Excused Delays ("Scheduled Commencement Date"). In the
event that the Office Space is not substantially completed and ready for
occupancy by the date which is thirty (30) days after the Scheduled Commencement
Date, or such later date as may be required in the event of
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one or more Excused Delays ("Delayed Scheduled Commencement Date"), then all
Base Rent hereunder will ▇▇▇▇▇ for one (1) day for each day from the Delayed
Scheduled Commencement Date to the actual Lease Commencement Date (i.e., the
date on which the Office Space is substantially completed and ready for
occupancy hereunder). Anything in this Lease to the contrary notwithstanding,
except as expressly provided in this Section 4.7(b), Landlord will not be liable
for any direct, indirect, special or consequential damages resulting from any
delay in the scheduled Lease Commencement Date.
(c) Subject to this Section 4.7(c), beginning on or about the date which is
one (1) week prior to the date on which Landlord anticipates that the Leasehold
Improvements will be substantially completed (the exact date to be specified in
a written notice from Landlord to Tenant not less than five (5) days prior to
such specified date and subject to Excused Delays), Tenant will be allowed
access to the Office Space (provided that such access is permitted by all
applicable governmental authorities having jurisdiction) to install its
demountable workstations and office partitions, and telephone and computer
wiring systems (with loose furniture, file cabinets and the like not to be
delivered or installed until after the Lease Commencement Date). The access to
the Office Space to be afforded to Tenant pursuant to this Section 4.7(c) is
hereinafter referred to as "Pre-Lease Commencement Date Access." Anything in
this Section 4.7(c) to the contrary notwithstanding in connection with the
Pre-Lease Commencement Date Access, (i) Tenant will not interfere with the
completion of construction of the Building, the Leasehold Improvements or any
other tenant or other improvements in the Building or the Office Complex, or
occasion any labor dispute as a result of such installations; and (ii) Tenant
does hereby agree to assume all risk of loss or damage to its furniture, systems
and equipment, and to any and all other personal property of Tenant or its
contractors, subcontractors, agents and employees, and to indemnify, defend and
hold harmless Landlord, and its officers, directors, shareholders, employees,
contractors and agents, from any loss or damage to such furniture, systems,
equipment, and other personal property, and all liability, loss or damage
arising from any injury to the property of Landlord, or its contractors,
subcontractors or materialmen, and any death or personal injury to any person or
persons to the extent arising out of such installations, except for liability,
loss or damage caused by Landlord's gross negligence or willful misconduct
Landlord may, at any time, suspend Tenant's rights to the Pre-Lease Commencement
Date Access in the event that Landlord determines that such access or any work
being performed by or for Tenant is unreasonably interfering with the
construction of the Building, the Leasehold Improvements or any other tenant or
other improvements in the Building or the Office Complex, is creating security
or safety risks, or is otherwise not in conformance with the conditions of this
Section 4.7. Beginning on the date on which Tenant commences any activities
under its right to Pre-Lease Commencement Date Access, and continuing through
the day before the Lease Commencement Date, Tenant will contribute to the
payment of the utility charges at the Premises, if such charges are higher than
would customarily be the case for contractors performing the construction of the
Building or the Leasehold Improvements, or otherwise would have been the case,
in the absence of such work by or for Tenant. The parties will cooperate to
arrive at an equitable allocation of any such charges. Such allocation will be
generally designed to result in Tenant's paying that portion of such utility
charges attributable to Tenant's activities at the Premises.
(d) Landlord has informed Tenant of the probability, if Tenant, or any of
its contractors, subcontractors, sub-subcontractors, employees or agents, should
use or employ non-union labor in connection with any work performed pursuant to
this Lease (including, without limitation, this Section 4.7 and Section 8.1
hereof), that such use may occasion labor disputes, work stoppages or other
delays or difficulties in Landlord's construction of the Building and the
Leasehold Improvements, Landlord's management of the Office Complex, or the
fulfillment of other obligations of Landlord under this Lease and under other
leases with respect to the Office Complex. Accordingly, and anything in this
Lease to the contrary, notwithstanding, (i) neither Tenant, nor any of its
contractors, subcontractors, sub-subcontractors, employees or agents, will use
or employ non-union labor; (ii) Landlord will not be liable or responsible for
any delays in the performance of the construction of the Building or the
Leasehold Improvements, or in any other obligations of Landlord hereunder, which
may result from any such use or employment of non-union labor; and (iii) Tenant
will
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indemnify, defend and hold harmless Landlord, and its officers, directors,
shareholders, employees and agents, from and against any and all losses, costs,
claims and other damages arising out of or in connection with the use or
employment of non-union labor, including, without limitation, costs relating to
delays in Landlord's prosecution of its work at the Office Complex (whether for
Tenant or for other tenants of the Office Complex) and reasonable attorneys'
fees and costs.
(e) Anything in this Section 4.7 to the contrary notwithstanding, Tenant
will not commence the conduct of any business from the Premises until the Lease
Commencement Date.
(f) As set forth in this Article 4, in order for Landlord to achieve
various scheduled delivery dates (e.g., the scheduled Lease Commencement Date,
the scheduled date for the delivery of Pre-Lease Commencement Date Access, and
the like), Tenant will be required to provide certain definitive information,
documentation or other materials on certain specific dates (e.g., the delivery
of the Final Leasehold Improvement Plans on the date set forth in Section 4.1(b)
hereof). In order to facilitate various scheduling activities in connection with
the construction of the Leasehold improvements, certain scheduled delivery and
other so-called milestone dates with respect to activities required in
connection with the construction of the Leasehold Improvements (together,
"Milestone Dates") are set forth on Exhibit D attached hereto and made a part
hereof. However, anything in this Section 4.7(f), in Exhibit D or elsewhere in
this Lease to the contrary notwithstanding, (i) those Milestone Dates which are
set forth in Exhibit D, but which are not otherwise specifically set forth or
addressed in this Lease, are estimated dates only, and neither Landlord nor
Tenant will be bound with respect thereto; and (ii) with respect to such
Milestone Dates which are set forth in Exhibit D and which are also specifically
set forth or addressed in this Lease, in the event of any conflict or ambiguity
between the terms and conditions of this Lease and the terms and conditions of
Exhibit D with respect thereto, the terms and conditions of this Lease will
govern and control. For all purposes under this Lease, any failure or delay of
Tenant, or those acting for or under Tenant, to satisfy any of the Milestone
Dates which are specifically set forth or addressed in this Lease (e.g., the
date by which Tenant is to have delivered Final Leasehold Improvement Plans)
will be an act or neglect of Tenant, regardless of whether such failure or delay
preceded the date of the execution of this Lease. Landlord's execution of this
Lease notwithstanding any such pre-existing failure or delay will not be
considered to be an acquiescence therein or waiver thereof by Landlord.
Section 4.8 Effect of Possession. If and to the extent applicable hereunder
and subject to Section 4.5 hereof, the acceptance of possession by Tenant will
be deemed conclusively to establish that the Premises, and all other
improvements of the Office Complex required to be constructed by Landlord for
use thereof by Tenant hereunder, have been completed at such time to Tenant's
satisfaction and in conformity with the provisions of this Lease in all
respects. Tenant acknowledges that, except as provided in Section 4.5 hereof,
neither Landlord nor any agent of Landlord has made any representation or
warranty with respect to the Premises or the Office Complex, or any portion
thereof, or with respect to the suitability or fitness thereof for the conduct
of Tenant's business, or for any other purpose.
Section 4.9 Use. The Premises will be used for general office purposes, and
for carrying on such activities as may be incidental thereto; provided, however,
Tenant may not use or occupy the Premises, or permit the Premises to be used or
occupied, contrary to any statute, rule, order, ordinance, requirement or
regulation applicable thereto, or in any manner which would violate any
certificate of occupancy or permit affecting the same, or which would cause
structural injury to the Building or the Premises, or any portion thereof, or
cause the value or usefulness of the Building or the Premises, or any portion
thereof, substantially to diminish (reasonable wear and tear excepted) or which
would constitute a private or public nuisance or waste. Among other things,
Tenant will not permit its employees, licensees or invitees to exceed the
Parking Capacity of the Parking Garage or the Parking Area (if any), based on
the RSF of the Office Space. Tenant agrees that it will promptly, upon discovery
of any such use, take all necessary steps to compel the discontinuance of such
use.
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Section 4.10 Compliance with Environmental Laws. Tenant will not (either
with or without negligence) cause or permit the escape, disposal or release of
any biologically or chemically active or other hazardous substances or materials
in, on or around the Premises or the Office Complex, or any portion thereof or
in the vicinity thereof. Tenant will not allow the storage or use of such
substances or materials in any manner not sanctioned by law and by the highest
standards prevailing in the industry for the storage and use of such substances
or materials, nor allow to be brought into the Office Complex any such materials
or substances, except such substances or materials as are customarily used in a
general office, and then only after written notice is given to Landlord of the
identity of such substances or materials (but still subject to applicable law
and the aforesaid standards). Without limitation, hazardous substances and
material will include those described in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section
9601 et seq., the Resource Conservation and Recovery Act, as amended, 42 U.S.C.
Section 6901 et seq., the Illinois Environmental Protection Act, as amended, 415
ILCS 5/11 to 5/33 et seq., and any other applicable federal, state or local laws
and the regulations adopted under these acts. If any lender or governmental
agency will ever require testing to ascertain whether there has been any release
of hazardous materials, then the reasonable costs thereof will be reimbursed by
Tenant to Landlord upon demand as additional charges if such requirement applies
to the Premises or relates to activities conducted on the Premises or to
Tenant's possession of the Premises. In addition, Tenant will execute
affidavits, representations and the like from time to time at Landlord's request
concerning Tenant's best knowledge and belief regarding the presence of
hazardous substances or materials on the Premises or the Office Complex. In all
events, Tenant will indemnify Landlord in the manner elsewhere provided in this
Lease from any release of hazardous materials on the Premises occurring while
Tenant is in possession, or elsewhere if caused by Tenant or persons acting
under Tenant. The aforesaid covenants will survive the expiration or earlier
termination of the Term.
Section 4.11 Landlord's Environmental Covenants. Landlord hereby covenants
that, to Landlord's actual knowledge, Landlord will not incorporate into the
Leasehold Improvements, or otherwise generate, store or release on, in, above or
below the Property, the Office Complex, the Building, the Premises, or any
portion thereof, any asbestos or other hazardous substances or materials (as
such term is defined in Section 4.10 hereof), except in accordance with
applicable law. For purposes of this Section 4.11, Landlord's actual knowledge
will mean the actual knowledge, without further investigation, of the Vice
President and General Manager of Real Estate of Opus North Corporation, or the
Senior Real Estate Director, Office, of Opus North Corporation.
ARTICLE 5
SERVICES
Section 5.1 Services Provided by Landlord. Subject to the provisions of
Article 2 hereof, Landlord will provide the following services, in a manner
consistent with those provided in other first-class office facilities in the
so-called "East-West Corridor" in DuPage County, Illinois, on all days excepting
Saturdays, Sundays and those holidays set forth on Exhibit E attached hereto and
made a part hereof ("Holidays"), and as otherwise stated (the cost of which
services, except as otherwise provided herein, will be included among the
Operating Expenses):
(a) Nightly janitorial services Monday through Friday in and about the
Premises and the common areas of the Building, all as generally
described on Exhibit F attached hereto and made a part hereof.
17
(b) All electric lighting bulbs and tubes and all ballasts and starters
within the Premises will be replaced by Landlord at the reasonable
expense of Tenant and will be paid by Tenant upon receipt of invoice
from Landlord as Rent.
(c) Heat, ventilating and air conditioning from 7:00 a.m. to 7:00 p.m.,
Monday through Friday (other than Holidays), and from 8:00 a.m. to
1:00 p.m. on Saturdays (other than Holidays), subject to matters
beyond Landlord's reasonable control. During other hours, Landlord
will provide such additional amounts of heating, ventilating and air
conditioning upon a reasonable advance notice from Tenant to Landlord,
which advance notice will not be later than 3:00 p.m. on the day on
which such additional service is requested (or 3:00 p.m. on the
business day before a Saturday, Sunday or Holiday). Tenant, upon
presentation of a ▇▇▇▇ therefor, will pay Landlord for such service on
an hourly basis at such prevailing rates as reasonably established by
Landlord from time to time. If such extended service is not a
continuation of that furnished during regular business hours as
described above, Tenant will pay for a minimum of three (3) hours of
such service.
(d) Hot and cold water from the regular building outlets for lavatory and
drinking purposes.
(e) Passenger elevator service in common with other tenants to be provided
by five (5) automatic elevators, one of which is a "swing" elevator
for use also as a freight elevator. Landlord will have the right to
restrict the use of elevators for freight purposes to the "swing"
freight elevator and to hours to be determined by Landlord. Landlord
will have the right to limit the number of elevators to be in
operation on Saturdays, Sundays and Holidays.
(f) Maintenance in good order, condition and repair of the Parking Garage
and the Parking Area (if any), and all driveways leading thereto and
keeping the same free from any unreasonable accumulation of snow.
Landlord will keep and maintain the landscaped area, the Parking
Garage and the Parking Area (if any) in a neat, orderly and reasonably
well-lit condition. The Executive Parking Area of the Parking Garage
will include a controlled access system. Landlord reserves the right
to designate areas of the Parking Garage and the Parking Area (if any)
where Tenant, and its agents, employees, licensees and invitees, will
park, and may exclude Tenant, and its agents, employees, licensees and
invitees, from parking in other areas as designated by Landlord;
provided, however, that Landlord will not be liable to Tenant for the
failure of any tenant, or its employees, agents, licensees and
invitees, to abide by Landlord's designations or restrictions. Tenant,
and its employees, agents, licensees and invitees, will not be
permitted to use more spaces in the Parking Garage or the Parking Area
(if any) than those attributable to the Premises pursuant to the
Parking Capacity, and the use of all parking spaces in the Parking
Garage and the Parking Area (if any) will be subject to such
reasonable rules and regulations as Landlord may from time to time
institute. Further, Landlord may reserve parking spaces in the Parking
Area in a location from time to time designated by Landlord, for the
exclusive use of visitors to the Building and other tenants in the
Building (and their respective employees, licensees and invitees).
Landlord will also maintain in good, clean order, condition and
repair, and will perform and make all reasonably necessary
maintenance, repairs and replacements to, all of
18
the structural components of the Building, and the common areas and
common building systems of the Building.
(g) Subject to the Building Rules and Regulations to which reference is
made in Section 16.19 hereof and other reasonable security
restrictions, and except for matters beyond Landlord's reasonable
control, access to the Building, the Parking Garage, the Parking Area
(if any) and the Premises on a 24 hours per day, 7 days per week and
365 days per year basis.
(h) The Deli for the use of, among others, Tenant's employees and
invitees.
(i) The Fitness Center for the use of, among others, Tenant's employees.
There will be no on-site director or other staff for the Fitness
Center, and the use thereof will be on a first come, first serve
basis, depending on the availability of equipment and other facilities
therein. There will be no separate charge for the use of the Fitness
Center.
(j) Security on a 24 hours per day, 7 days per week and 365 days per year
basis; provided, however, that Landlord will not be liable for any
lack of security in respect to the Office Complex whatsoever.
(k) Fiber optics to the Building's "NET POP" and available for Tenant's
distribution (at its sole cost and expense) to the Premises.
Section 5.2 Tenant's Utility Services. Tenant will be solely responsible
for the direct payment of all utilities which are separately metered or
separately charged (electric, natural gas, telephone, cable television and any
other special utility requirements of Tenant), if any, to the Premises or to
Tenant, and will make such payments to the respective utility companies prior to
delinquency. Such amounts will not be included as Operating Expenses.
Section 5.3 Other Provisions Relating to Services. No interruption in, or
temporary stoppage of, any of the aforesaid services caused by repairs,
renewals, improvements, alterations, strikes, lockouts, labor controversy,
accidents, inability to obtain fuel or supplies, or other causes will be deemed
an eviction or disturbance of Tenant's use and possession, or render Landlord
liable for damages, by abatement of rent or otherwise, or relieve Tenant from
any obligation herein set forth; provided, however, that in the event of any
interruption in, or temporary stoppage of, utility services to the Premises,
which interruption or stoppage is within the reasonable control of Landlord and
which also continues for ten (10) consecutive business days, then all Base Rent,
Operating Expenses and Real Estate Taxes, with respect to that portion of the
Office Space which is rendered untenantable as a result of such interruption or
stoppage, will thereafter ▇▇▇▇▇ until such services are re-instituted or the
interruption or stoppage is no longer within Landlord's reasonable control. In
no event will Landlord be required to provide any heat, ventilating, air
conditioning, electricity or other service in excess of that permitted by
voluntary or involuntary guidelines or laws, ordinances or regulations of
governmental authority. Landlord reserves the right, from time to time, to make
reasonable and non-discriminatory modifications to the aforesaid standards for
utilities and services.
Section 5.4 Effects on Utilities. Tenant will not, without the prior
written consent of Landlord, use any apparatus or device in or about the
Premises which will cause any substantial noise or vibration or which will
increase the amount of electricity or water, if any, usually furnished or
supplied for use of the Premises as general office space. Tenant will not
connect with electric current or water pipes, except through existing electrical
or water outlets already in the Premises, any apparatus or device for the
purposes of using electric current or water.
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ARTICLE 6
INSURANCE
Section 6.1 Landlord's Casualty Insurance Obligations. Landlord will keep
the Office Complex insured for the benefit of Landlord in an amount equivalent
to the full replacement value thereof (excluding foundation, excluding and
excavation costs) against:
(a) loss or damage by fire; and
(b) such other risk or risks of a similar or dissimilar nature as are now
or may be customarily covered with respect to buildings and
improvements similar in construction, general location, use, occupancy
and design to the Office Complex, including, but without limiting the
generality, of the foregoing, windstorms, hail, explosion, vandalism,
malicious mischief, civil commotion, and such other coverage as may be
deemed necessary by Landlord, providing such additional coverage is
obtainable and providing such additional coverage is such as is
customarily carried with respect to buildings and improvements similar
in construction, general location, use, occupancy and design to the
Office Complex.
These insurance provisions will in no way limit or modify any of the obligations
of Tenant under any provision of this Lease. Landlord agrees that such policy or
policies of insurance will permit releases of liability as provided herein
and/or waiver of subrogation clause as to Tenant, and Landlord waives, releases
and discharges Tenant from all claims or demands whatsoever which Landlord may
have or acquire arising out of damage to or destruction of the Office Complex or
loss of use thereof occasioned by fire or other casualty, which claim or demand
may arise because of the negligence or fault of Tenant, its agents, employees,
customers or business invitees, or otherwise, and Landlord agrees to look to the
insurance coverage only in the event of such loss. Notwithstanding the
foregoing, Tenant will be obligated to pay the rental called for hereunder in
the event of damage to or destruction of the Premises or the Office Complex if
such damage or destruction is occasioned by the negligence or fault of Tenant,
its agents or employees. Insurance premiums paid for insurance coverage required
under this Article 6 by Landlord will be a portion of the "Operating Expenses"
described in Article 2 hereof.
Section 6.2 Tenant's Casualty Insurance Obligations. Tenant will keep all
of its machinery, equipment, furniture, fixtures and personal property
(including also property under the care, custody, or control of Tenant) which
may be located in, upon, or about the Premises insured for the benefit of Tenant
in an amount equivalent to the full insurable replacement value thereof against:
(a) loss or damage by fire; and
(b) such other risk or risks of a similar or dissimilar nature as are now,
or may in the future be customarily covered with respect to a tenant's
machinery, equipment, furniture, fixtures, personal property and
business located in a building similar in construction, general
location, use, occupancy and design to the Office Complex, including,
but without limiting the generality of the foregoing, windstorms,
hail, explosions, vandalism, theft, malicious mischief, civil
commotion, and such other coverage as Tenant may deem appropriate or
necessary.
Tenant agrees that such policy or policies of insurance will permit release of
liability as provided herein and/or waiver of subrogation clause as to Landlord,
and Tenant waives, releases and discharges Landlord, and its agents,
20
employees and contractors, from all claims or demands whatsoever which Tenant
may have or acquire arising out of damage to or destruction of the machinery,
equipment, furniture, fixtures, personal property, and loss of use thereof
occasioned by fire or other casualty, whether such claim or demand may arise
because of the negligence or fault of Landlord, or its agents, employees or
contractors, or otherwise, and Tenant agrees to look to the insurance coverage
only in the event of such loss.
Section 6.3 Landlord's Liability Insurance Obligations. Landlord will, as a
portion of the Operating Expenses, maintain, if and to the extent that Landlord
reasonably deems appropriate, for its benefit and the benefit of its mortgagee
and management agent, (a) commercial general liability insurance against claims
for personal injury, death or property damage occurring upon, in or about the
Office Complex, (b) broad form comprehensive boiler and machinery insurance,
including, without limitation, business interruption, extra expense and
refrigeration coverage, endorsed with joint loss agreement, (c) all-risk
property insurance on a replacement cost basis covering the Building and the
Office Complex, including loss of rents, business interruption, extra expense
coverage and building ordinance coverage and joint loss agreements endorsements,
(d) umbrella liability coverage in excess of the underlying limits of the
insurance set for in clause (a) above, (e) worker's compensation and employee
liability insurance covering all employees of Landlord performing work in, on or
with respect to the Office Complex, and (f) comprehensive automobile liability
coverage, also covering hired and non-owned automobiles.
Section 6.4 Tenant's Liability Insurance Obligations. Tenant will, at
Tenant's sole cost and expense but for the mutual benefit of Landlord, its
managing agent and Tenant, maintain general public liability insurance against
claims for personal injury, death or property damage occurring upon, in or about
the Premises, such insurance to afford protection to Landlord, its managing
agent and Tenant to the limit of not less than Three Million and 00/100ths
Dollars ($3,000,000.00) in respect to the injury or death to a single person,
and to the limit of not less than Three Million and 00/100ths Dollars
($3,000,000.00) in respect to any one accident, and to the limit of not less
than Five Hundred Thousand and 00/100ths Dollars ($500,000.00) in respect to any
property damage. Such policies of insurance will be written in companies
reasonably satisfactory to Landlord, naming Landlord and its managing agent as
additional insureds thereunder, and such policies, or a memorandum or
certificate of such insurance, will be delivered to Landlord endorsed "Premium
Paid" by the company or agency issuing the same or accompanied by other evidence
satisfactory to Landlord that the premium thereon has been paid. At such time as
insurance limits required of tenants in office buildings in the area in which
the Office Complex is located are generally increased to greater amounts,
Landlord will have the right to require such greater limits as may then be
customary. Tenant agrees to include in such policy the contractual liability
coverage insuring Tenant's indemnification obligations provided for herein. Any
such coverage will be deemed primary to any liability coverage secured by
Landlord. Such insurance will also afford coverage for all claims based upon
acts, omissions, injury or damage, which claims occurred or arose (or the onset
of which occurred or arose) in whole or in part during the policy period.
Section 6.5 Tenant's Indemnification of Landlord. Tenant agrees to
indemnify, protect, defend and hold Landlord and Landlord's shareholders,
employees, lender and managing agent harmless from and against any and all
claims, costs, liabilities, actions, and damages, including, without limitation,
attorneys' fees and costs on behalf of any person or persons, firm or firms,
corporation or corporations, arising from any breach or default on the part of
Tenant in the performance of any covenant or agreement on the part of Tenant to
be performed, pursuant to the terms of this Lease, or arising from any act or
negligence on the part of Tenant, or its agents, contractors, employees,
invitees or licensees, or arising from any accident, injury or damage to the
extent caused by Tenant, or its agents, contractors, employees, invitees or
licensees, to any person, firm or corporation occurring during the Term or any
renewal thereof, in or about the Premises or Office Complex. In case any action
or proceeding be brought against Landlord, or its directors, officers,
shareholders, employees, contractors, agents, lenders or managing agents, by
reason of any such claim, Tenant, upon notice from Landlord, covenants to resist
or defend such action or proceeding by counsel reasonably satisfactory to
Landlord.
21
Section 6.6 Tenant's Waiver. Tenant agrees, to the extent not expressly
prohibited by law, that Landlord, its agents, employees and servants will not be
liable, and Tenant waives all claims for damage to property, and business
sustained during the Term by Tenant occurring in or about the Office Complex,
resulting directly or indirectly from any existing or future condition, defect,
matter or thing in the Premises, the Office Complex, or any part thereof, or
from equipment or appurtenances becoming out of repair or from accident, or from
any occurrence or act or omission of Landlord, its agents, employees or
servants, or any tenant or occupant of the Building or any other person. This
Section 6.6 will apply especially but not exclusively, to damage caused by
aforesaid or by the flooding of basements or other subsurface areas, or by
refrigerators, sprinkling devices, air conditioning apparatus, water, snow,
frost, steam, excessive heat or cold, falling plaster, broken glass, sewage,
gas, odors or noise, or the bursting or leaking of pipes or plumbing fixtures,
and will apply equally, whether any such damage results from the act or omission
of other tenants or occupants in the Office Complex or any other persons, and
whether such damage be caused by or result from any of the aforesaid, or will be
caused by or result from other circumstances of a similar or dissimilar nature.
Section 6.7 Landlord's Deductible and Tenant's Property. Provisions herein
to the contrary notwithstanding, in the event any damage to the Office Complex
results from any act or omission of Tenant, its agents, employees or invitees,
and all or any portion of Landlord's loss is "deductible," Tenant will pay to
Landlord the amount of such deductible loss (not to exceed $10,000 per event,
except in the case of earthquake or flood, in which case such deductible loss
will not exceed $50,000 per event).
Section 6.8 Tenant's Property. All property in the Office Complex or on the
Premises belonging to Tenant, its agents, employees, invitees or otherwise
located at the Premises, will be at the risk of Tenant only. Landlord will not
be liable for damage thereto or theft, misappropriation or loss thereof, and
Tenant agrees to defend and hold Landlord, its agents, employees and servants
harmless and indemnify them against claims and liability for injuries to such
property.
Section 6.9 Increase in Insurance. Tenant will not do or permit anything to
be done in or about the Premises nor bring or keep anything therein which will
in any way increase the existing rate of or affect in any other way any fire or
other insurance upon the Office Complex or any of its contents, or cause a
cancellation of any insurance policy covering the Office Complex or any of its
contents. Notwithstanding anything to the contrary contained herein, Tenant will
promptly, upon demand, reimburse Landlord for the full amount of any additional
premium charged for such policy by reason of Tenant's failure to comply with the
provisions of this Article 6, it being understood that such demand for
reimbursement will not be Landlord's exclusive remedy.
Section 6.10 Tenant's Failure to Insure. In the event Tenant fails to
provide Landlord with evidence of insurance required under this Article 6,
Landlord may, but will not be obligated to, without further demand upon Tenant,
and without waiving or releasing Tenant from any obligation contained in this
Lease, effect such insurance and Tenant agrees to repay, upon demand, all such
sums incurred by Landlord in effecting such insurance. All such sums will become
a part of the Additional Rent payable hereunder, but no such payment by Landlord
will relieve Tenant from any default under this Lease.
ARTICLE 7
CERTAIN RIGHTS RESERVED BY LANDLORD
Section 7.1 Rights Reserved by Landlord. Landlord reserves the following
rights exercisable without notice and without liability to Tenant and without
effecting an eviction, constructive or actual, or disturbance of Tenant's use or
possession, or giving rise to any claim for set off or abatement of rent:
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(a) To control, install, affix and maintain any and all signs on the
Property, or on the exterior of the Office Complex and in the
corridors, entrances and other common areas thereof, except those
signs within the Premises not visible from outside the Premises.
(b) To reasonably designate, limit, restrict and control any service in or
to the Office Complex, including, whom limitation, the designation of
sources from which Tenant may obtain sign painting and lettering.
(c) To retain at all times and to use in appropriate instances keys to all
doors within and into the Premises. No locks will be changed without
the prior written consent of Landlord.
(d) To make repairs, alterations, additions, or improvements, whether
structural or otherwise, in and about the Office Complex, or any part
thereof, and for such purposes to enter upon the Premises, and during
the continuation of any of such work, to temporarily close doors,
entryways, public spaces, and corridors in the Office Complex and to
interrupt or temporarily suspend services and facilities.
(e) To require that any vending or dispensing machines of any kind in or
about the Premises be solely for the use of Tenant's employees and
invitees, and be placed so as not to be visible from the exterior of
the Office Space.
(f) To approve the weight, size and location of safes and other heavy
equipment and articles in and about the Premises and the Office
Complex and to require all such items to be moved into and out of the
Office Complex and the Premises only at such times and in such manner
as Landlord will direct in writing.
(g) To grant to anyone the exclusive right to conduct any particular
business or undertaking in the Office Complex other than general
office use, including, without limitation, banks, savings and loan
associations, restaurants, cafeterias, candy and/or tobacco shops, and
other stores selling retail products.
Section 7.2 Emergency Entry. Landlord and its agents may enter the Premises
at any time in case of emergency and will have the right to use any and all
means which Landlord may deem proper to open such doors during an emergency in
order to obtain entry to the Premises. Any entry to the Premises obtained by
Landlord in the event of an emergency will not, under any circumstances, be
construed or deemed to be a forcible or unlawful entry into, or detainer of, the
Premises, or to be an eviction of Tenant from the Premises or any portion
thereof.
Section 7.3 Exhibition of Premises. Tenant will permit Landlord and its
agents, upon reasonable notice, to enter and pass through the Premises or any
part thereof at reasonable times during normal business hours to (a) exhibit the
Premises to holders of encumbrances on the interest of Landlord under the Lease
and to prospective purchasers, mortgagees or lessees of the Office Complex; and
(b) during the period of twelve (12) months prior to the expiration of the Term,
exhibit the Premises to prospective lessees thereof. If during the last month of
the Term, Tenant will have removed substantially all of Tenant's property and
personnel from the Premises, Landlord may enter the Premises and repair, alter,
and redecorate the same, without abatement of Rent and without liability to
Tenant; and such acts will have no effect on this Lease.
Section 7.4 Right of Landlord to Perform. All covenants and agreements to
be performed by Tenant under any of the terms of this Lease will be performed by
Tenant at Tenant's sole cost and expense and
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without any abatement of Rent. If Tenant will fail to pay any sum of money
(other than Rent due Landlord) required to be paid by it hereunder or will fail
to perform any other act on its part to be performed hereunder, including,
without limitation, the failure to commence and complete repairs promptly and
adequately, and the failure to remove any liens or otherwise to perform any act
or fulfill any obligation required of Tenant under this Lease, Landlord may, but
will not be obligated to do so, and without waiving or releasing Tenant from any
obligations of Tenant, make any such payment or perform any such act on Tenant's
part to be made or performed as in this Lease provided. All sums so paid by
Landlord and all necessary incidental costs, together with an administrative
charge in the amount of fifteen percent (15%) of any such sums and costs
incurred by Landlord if the total thereof is less than or equal to One Thousand
and 00/100ths Dollars ($1,000.00), ten percent (10%) of any such sums and costs
incurred by Landlord if the total thereof is greater than One Thousand and
00/100ths Dollars ($1,000.00), but less than or equal to Five Thousand and
00/100ths Dollars ($5,000.00), and five percent (5%) of any such sums and costs
incurred by Landlord if the total thereof is greater than Five Thousand and
00/100ths Dollars ($5,000.00), plus interest thereon at the Interest Rate
accruing from the date paid or incurred by Landlord until reimbursed to Landlord
by Tenant, will be payable to Landlord by Tenant as Rent on demand, and Tenant
covenants to pay all of the foregoing. Landlord will have (in addition to any
other right or remedy of Landlord) the same rights and remedies in the event of
Tenant's nonpayment of such sums, as in the case of default by Tenant in the
payment of Rent to Landlord.
Section 7.5 Substitution of Office Space. Landlord will have the right at
any time during the Term, upon not less than thirty (30) days prior written
notice to Tenant ("Substitution Notice"), and effective upon the date set forth
in the Substitution Notice, (a) to move Tenant from the original Office Space
initially demised hereunder ("Original Office Space"), (b) to furnish Tenant
with substitute office space elsewhere in the Building ("Substitute Office
Space"), which Substitute Office Space will not contain materially more or
materially fewer RSF than the RSF contained in the Original Office Space, but
will contain tenure improvements which are reasonably comparable to those
contained in the Original Office Space, and (c) to remove and place Tenant in
the Substitute Office Space. Landlord's election, if any, to move Tenant to
Substitute Office Space in accordance with this Section 7.5 is hereinafter
referred to as the "Substitution Election." Automatically upon the effective
date set forth in the Substitution Notice, and without the necessity of any
further amendment or documentation, (y) all of the terms, provisions and
conditions of this Lease will remain in full force and effect and will
automatically and conclusively be applicable with respect to the Substitute
Office Space, and (z) the Substitute Office Space will conclusively constitute
the Office Space and the Premises under this Lease, instead of the Original
Office Space.
If Landlord makes the Substitution Election in accordance with this Section
7.5, then, subject to this Section 7.5, Landlord will, at Landlord's sole cost
and expense, cause the physical move, relocation and re-installation of all of
Tenant's furniture, equipment (including, without limitation, computer and
telephone equipment), files and other personal property and trade fixtures then
located in the Original Office Space to the Substitute Office Space, with which
move Tenant will cooperate in all reasonable respects. In the alternative, and
at the sole election of Tenant, Tenant will came such move, relocation and
re-installation, with which Landlord will cooperate in all reasonable respects,
in which case, Landlord will reimburse Tenant for the reasonable costs thereof
within thirty (30) days after Tenant has delivered to Landlord invoices therefor
(together with reasonable supporting documentation). Tenant may elect to cause
such move, relocation and re-installation itself by delivering written notice
thereof to Landlord within five (5) business days after Landlord's delivery of
the Substitution Notice. If Tenant fails to make such election within such five
(5) business day period, then Tenant will be conclusively deemed to have elected
to allow Landlord to cause such move, relocation and re-installation as
aforesaid.
Anything in this Section 7.5 or elsewhere in this Lease to the contrary
notwithstanding, in the event that Landlord makes the Substitution Election,
Landlord will not be liable to Tenant for any loss of business or profits, or
for any other loss, damage, claim or cost whatsoever, arising out of or in
connection with the
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Substitution Election, except as expressly provided in this Section 7.5 with
respect to the move, relocation and re-installation of Tenant's furniture,
equipment, files, personal property and trade fixtures.
ARTICLE 8
ALTERATIONS AND IMPROVEMENTS
Section 8.1 Procedures for Tenant's Improvements. Tenant will not make any
improvements, alterations, additions or installations in or to the Premises
(hereinafter referred to as the "Work") without Landlord's prior written
consent; provided, however, that any Work which neither costs in excess of
Twenty-Five Thousand and 00/100ths Dollars ($25,000.00) nor materially adversely
affects the structural, mechanical, heating, ventilating and air conditioning,
or electrical systems of the Building may be effected by Tenant without
Landlord's prior written consent. Along with any request for Landlord's consent
and before commencement of the Work for which Landlord's consent is required
hereunder or the delivery of any materials to be used in any such Work. Tenant
will furnish Landlord with plans and specifications, names and addresses of
contractors, copies of contracts, necessary permits and licenses, and an
indemnification in such form and amount as may be reasonably satisfactory to
Landlord and a performance bond executed by a commercial surety reasonably
satisfactory to Landlord, and in an amount equal to such Work and the payment of
all liens for labor and material arising therefrom. Tenant agrees to defend and
hold Landlord forever harmless from any and all claims and liabilities of any
kind and description which may arise out of or be connected in any way with any
Work, regardless of whether Landlord's consent is required with respect thereto.
All Work requiring Landlord's consent hereunder will be done only by contractors
or mechanics reasonably approved by Landlord and at such time and in such manner
as Landlord may from time to time reasonably designate. All Work (regardless of
whether Landlord's consent hereunder is required with respect thereto) done by
Tenant, or its agents, employees or contractors, will be done in such a manner
as to avoid labor disputes. Tenant will pay the cost of all Work (including a
reasonable charge for Landlord's services and for Landlord's inspection and
engineering time), and also the cost of painting, restoring, or repairing the
Premises and the Office Complex occasioned thereby. Upon completion of the Work,
Tenant will furnish Landlord with contractor's affidavits or unconditional lien
releases and full and final waivers of liens, and receipted bills covering all
labor and materials expended and used. The Work will comply with all insurance
requirements and all laws, ordinances, rules and regulations of all governmental
authorities and will be constructed in a good and workmanlike manner. Tenant
will permit Landlord to inspect construction operations in connection with the
Work. Tenant will not be allowed to make any alterations, modifications,
improvements, additions, or installations if such action results or would result
in a labor dispute or otherwise would materially interfere with Landlord's
operation of the Office Complex. With respect to Work hereunder which requires
Landlord's consent, Landlord, by written notice to Tenant given
contemporaneously with such consent, may require Tenant to remove (upon the
termination of this Lease) any improvements, additions or installation installed
by Tenant in the Premises, and to repair or restore any damage caused by the
installation and removal of such improvements, additions, or installations, all
at Tenant's sole cost and expense. With respect to Work hereunder which does not
require Landlord's consent, Tenant may inquire as to whether Landlord will
require the removal thereof upon the termination of this Lease, and Landlord
will make such determination promptly following such inquiry. Otherwise,
Landlord, by written notice to Tenant given at or prior to termination of this
Lease, may require Tenant to remove any improvements, additions or installation
installed by Tenant in the Premises at Tenant's sole cost and expense, and
repair or restore any damage caused by the installation and removal of such
improvements, additions, or installations. However, anything in this Lease to
the contrary notwithstanding, if and to the extent that Tenant has installed any
improvements or additions which are not at least equivalent to the level of
character, quality, design and finish as is described in Exhibit G attached
hereto and made a part hereof ("Building Standard"), then at or prior to the
termination of this Lease, Tenant will be required, at its sole cost and
expense, to remove such improvements and additions and restore the area of the
Office Complex in which such improvements and additions had been installed to
the Building Standard.
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Section 8.2 Freedom From Liens. Tenant will keep the Premises and the
Office Complex free from any liens arising out of any Work performed, material
furnished or obligations incurred by Tenant, and will indemnify, protect, defend
and hold Landlord harmless from any liens and encumbrances arising out of any
work performed or material furnished by or at the direction of Tenant. In the
event that Tenant will not, within twenty (20) days following the imposition of
any such lien, cause such lien to be released of record by payment or posting of
a proper bond, Landlord will have, in addition to all other remedies provided
herein and by law, the right, but not the obligation, to cause the same to be
released by such means as it will deem proper, including payment of and/or
defense against the claim giving rise to such lien. All such sums paid by
Landlord and all expenses incurred by it in connection therewith, including
attorneys' fees and costs, will be payable as Additional Rent to Landlord by
Tenant on demand with interest at the Interest Rate accruing from the date paid
or incurred by Landlord until reimbursed to Landlord by Tenant.
Section 8.3 Alterations a Part of the Premises. Any additions to, or
alterations of, the Premises, except as specified in Tenant's notice to
Landlord, will become at once a part of the Premises and belong to Landlord
without compensation to Tenant.
ARTICLE 9
REPAIRS
Section 9.1 Tenant's Repair Obligations. Subject to Article 6 hereof,
Tenant will, during the Term, at Tenant's expense, keep the Premises in as good
order, condition and repair as they were at the time Tenant took possession of
the same, reasonable wear and tear and damage from fire and other insured
casualties excepted. Tenant will keep the Premises in a neat and sanitary
condition and will not commit any nuisance or waste on the Premises or in, on,
or about the Office Complex, throw foreign substances in the plumbing
facilities, or waste any of the utilities furnished by Landlord. Tenant, at its
sole cost and expense, will promptly repair, replace and restore to Landlord's
reasonable satisfaction, all uninsured damage or injury to the Premises, or to
the Office Complex, caused by Tenant, or its agents, contractors or employees,
(including, without limitation, from Tenants moving furniture, fixtures,
equipment or other devices in or out of the Premises or Office Complex, and from
Tenant's installation or removal of furniture, fixtures, equipment, devices or
other property. All repairs, restorations and replacements will be in quality
and class equal to the original work and will comply with all requirements of
the Lease.
Section 9.2 Landlord's Inspection. Landlord, or its employees, agents or
contractors, will have the right to enter the Premises at any reasonable time or
times for the purpose of inspection, cleaning, repairs, altering, or improving
the same; provided, however, that nothing contained herein will be construed as
imposing any obligation on Landlord to make any repairs, alterations or
improvements which are the obligation of Tenant.
Section 9.3 Joint Inspection Upon Vacation. Tenant will give written notice
to Landlord at least thirty (30) days prior to vacating the Premises for the
express purpose of arranging a meeting with Landlord for a joint inspection of
the Premises. In the event of Tenant's failure to give such notice and arrange
such joint inspection, Landlord's inspection at or after Tenant's vacation of
the Premises will be conclusively deemed correct for purposes of determining
Tenant's responsibility for repairs and restoration hereunder.
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ARTICLE 10
ASSIGNMENT AND SUBLETTING
Section 10.1 General Prohibition; Recapture; Exceptions.
(a) General Prohibition. Subject to this Section 10.1, Tenant will not,
without the prior written consent of Landlord, (i) transfer, pledge, mortgage or
assign this Lease or any interest hereunder; (ii) permit any assignment of this
Lease by voluntary act, operation of law or otherwise; (iii) sublet the Premises
or any part thereof; or (iv) permit the use of the Premises by any parties other
than Tenant, its agents and employees, Tenant will seek such written consent of
Landlord by a written request therefor, setting forth the information described
in Section 10.1(b) hereof and such other information as Landlord may deem
necessary.
(b) Recapture. Tenant's aforesaid written notice will (i) advise Landlord
of its intention from, on and after a stated date (which will not be fewer than
thirty (30) days after date of Tenant's notice), to assign this Lease or to
sublet any part or all of the Premises for the balance or any part of the Term,
and (ii) state the terms on which Tenant intends to make such assignment or
sublease. In such event, Landlord will have the right, to be exercised at
Landlord's sole option by giving written notice to Tenant within thirty (30)
days after receipt of Tenant's notice, to recapture the space described in
Tenant's notice. Any such recapture notice will, if given, cancel and terminate
this Lease with respect to the space therein described as of the date stated in
Tenant's notice. If Tenant's notice will cover all of the Premises, and Landlord
will have exercised its foregoing recapture right, the Term will expire and end
on the date stated in Tenant's notice as fully and completely as if that date
had been herein definitely fixed for the expiration of the Term. If, however
this Lease be canceled with respect to less than the entire Premises, the Base
Rent and Additional Rent will be equitably adjusted by Landlord with due
consideration of the size, location, type and quality of the portion of the
Premises so remaining after the "recapture," and such Rent will be reduced
accordingly from and after the termination date for such portion. This Lease as
so amended will continue thereafter in full force and effect. The Rent
adjustments provided for herein will be evidenced by an amendment to this Lease
executed by Landlord and Tenant. If this Lease will be terminated in the manner
aforesaid, either as to the entire Premises or only a portion thereof, to such
extent the Term will end upon the appropriate effective date of the proposed
sublease or assignment as if that date had been originally fixed in this Lease
for such expiration. In the event of a termination affecting less than the
entire Premises, Tenant will comply with Article 13 hereof with respect to such
portion of the Premises affected thereby.
(c) Exceptions. Anything in this Section 10.1 or elsewhere in this Lease to
the contrary notwithstanding, but subject to Sections 10.6 and 10.8 hereof,
Tenant will be permitted to assign or sublease the Premises, or any portion
thereof, upon written notice to Landlord not less than ten (10) days prior to
such assignment or subletting (unless such prior notice would violate applicable
law, in which event Tenant will give such written notice within ten (10) days
after the effective date of such assignment or subletting), but without the
necessity of Landlord's prior written consent, to (i) any entity directly
resulting from a merger or consolidation of Tenant, (ii) any entity succeeding
to all or substantially all of the business and assets of Tenant, or (iii) any
parent, subsidiary or affiliate of Tenant.
Section 10.2 Discharge of Commission. In the event of any termination
pursuant to this Article 10, Tenant will, at its sole cost and expense,
discharge in full any commission which may be due and owing as a result of any
proposed assignment or subletting, whether or not the subject portion of the
Premises is "recaptured" pursuant thereto and rented by Landlord to the proposed
tenant or any other tenant.
Section 10.3 Right to Recapture Not Exercised. If Landlord, upon receiving
Tenant's notice with respect to any such space, will not exercise its right to
recapture as aforesaid, Landlord will not unreasonably withhold its consent to
Tenant's assignment of the Lease or subletting such space to the party
identified in
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Tenant's notice (except as provided in Section 10.1 hereof); provided, however,
that in the event Landlord consents to any such assignment or subletting, and as
a condition thereto, Tenant will pay to Landlord fifty percent (50%) of all
profit derived by Tenant from such assignment or subletting, net of all
reasonable expenses in connection with such assignment or subletting (including,
without limitation, leasehold improvements, brokerage commissions and the like).
For purposes of the foregoing, profit will be deemed to include, without
limitation, the amount of all rent payable by such assignee or sublessee in
excess of the Base Rent, and rent adjustments, payable by Tenant under this
Lease. If a part of the consideration for such assignment or subletting will be
payable other than in cash, the payment to Landlord will be in cash for its
share of any non-cash consideration based upon the fair market value thereof.
Section 10.4 Tenant's Profit Statement. Tenant will and hereby agrees that
it will furnish to Landlord upon request from Landlord a complete statement,
certified by an independent certified public accountant, setting forth in detail
the computation of all profit derived and to be derived from such assignment or
subletting, such computation to be made in accordance with generally accepted
accounting principles. Tenant agrees that Landlord or its authorized
representatives will be given access at all reasonable times to the books,
records and papers of Tenant relating to any such assignment or subletting, and
Landlord will have the right to make copies thereof. The percentage of Tenant's
profit due Landlord hereunder will be paid to Landlord within ten (10) days of
receipt by Tenant of all payments made from time to time by such assignee or
sublessee to Tenant.
Section 10.5 Tenant's Changes Deemed an Assignment. For purposes of the
foregoing, any change in the partners of Tenant, if Tenant is a partnership, or,
if Tenure is a corporation, any transfer of any or all of the shares of stock of
Tenant by sale, assignment, operation of law or otherwise (other than a sale of
Tenant's stock on a public exchange) resulting in a change in the present
control of such partnership or corporation by the person or persons owning a
majority of such partnership interests or shares as of the date of this Lease,
will be deemed to be an assignment within the meaning of this Article 10.
Section 10.6 Continuing Tenant Liability. Any subletting or assignment
hereunder will not release or discharge Tenant of or from any liability, whether
past, present or future, under this Lease, and Tenant will continue fully liable
thereunder. The subtenant or subtenants or assignee will agree in a form
satisfactory to Landlord to comply with and be bound by all of the terms,
covenants, conditions, provisions and agreements of this Lease to the extent of
the space sublet or assigned, and Tenant will deliver to Landlord promptly after
execution an executed copy of each such sublease or assignment and an agreement
of compliance by each such subtenant or assignee. Consent by Landlord to any
assignment of this Lease or to any subletting of the Premises will not be a
waiver of Landlord's rights under this Article 10 as to any subsequent
assignment or subletting.
Section 10.7 Void Transfers. Any sale, assignment, mortgage, transfer, or
subletting of this Lease which is not in compliance with the provisions of this
Article 10 will be of no effect and void. Landlord's right to assign its
interest in this Lease will remain unqualified. Landlord may make a reasonable
charge to Tenant for any reasonable attorneys' fees or expenses incident to a
review of any documentation related to any proposed assignment or subletting by
Tenant.
Section 10.8 Prohibited Transferees. Anything in this Lease to the contrary
notwithstanding, Tenant will not assign its rights under this Lease or sublet
all or any part of the Premises to any person or entity which is (or,
immediately prior to such subletting or assignment, was) a tenant or occupant of
the Office Complex or any office building in the Park.
Section 10.9 Criteria for Withholding Consent. The consent of Landlord to a
transfer, assignment, sublease or other transaction described in Section 10.1
hereof will not be unreasonably withheld,
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provided that should Landlord withhold its consent for any of the following
reasons, which list is not exclusive, such withholding will be deemed to be
reasonable:
(a) Financial strength of the proposed transferee is not at least equal to
that of lessees occupying comparable premises in the Office Complex or
in other buildings owned or operated by Landlord located in the same
metropolitan area as the Office Complex;
(b) A proposed transferee whose business conducted in the Premises would
cause a diminution in the reputation of the Office Complex or the
other businesses located therein;
(c) A proposed transferee whose impact on the common areas or the other
occupants of the Office Complex would be disadvantageous, or whose
occupancy can reasonably be expected to exceed the Parking Capacity;
(d) A proposed transferee whose occupancy will require any variation in
the terms and conditions of this Lease; or
(e) A proposed transferee which is a governmental entity or unit, or any
agency, department or authority thereof.
ARTICLE 11
DAMAGE BY FIRE OR OTHER CASUALTY
Section 11.1 Tenantable Within 300 Days. If fire or other casualty will
render the whole or any material portion of the Premises untenantable, and the
Premises can reasonably be expected to be made tenantable within three hundred
(300) days from the date of such event, then Landlord will repair and restore
the Premises and the Office Complex to as near their condition prior to the fire
or other casualty as is reasonably possible within such three hundred (300) day
period (subject to delays for causes beyond Landlord's reasonable control) and
notify Tenant that it will be doing so, such notice to be given within thirty
(30) business days from the date of such damage or destruction, and this Lease
will remain in full force and effect, but the Rent for the period during which
the Premises are untenantable will be abated pro rata (based upon the portion of
the Premises which is untenantable). If Landlord is required to repair the
Office Complex and/or the Premises as aforesaid, such work will be undertaken
and prosecuted with all due diligence and speed. If Landlord fails to provide
the aforesaid notice, this Section 11.1 will nonetheless be applicable.
Section 11.2 Not Tenantable Within 300 Days. If fire or other casualty will
render the whole or any material part of the Premises untenantable and the
Premises cannot reasonably be expected to be made tenantable within three
hundred (300) days from the date of such event, then either party, by notice in
writing to the other given within thirty (30) business days from the date of
such damage or destruction, may terminate this Lease effective upon a date
within thirty (30) days from the date of such notice. If Landlord fails to
provide the aforesaid notice, then Section 11.1 hereof will automatically apply.
Section 11.3 Office Complex Substantially Damaged. In the event that more
than fifty percent (50%) of the value of the Office Complex is damaged or
destroyed by fire or other casualty, and irrespective of whether damage or
destruction can be made tenantable within three hundred (300) days thereafter,
then at Landlord's option, by written notice to Tenant, given within thirty (30)
business days from the date of such damage or destruction, Landlord may
terminate this lease effective upon a date within ninety (90) days from the date
of such notice to Tenant.
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Section 11.4 Uninsured Casualty. If fire or other casualty will render any
portion of the Premises or any material portion of the Office Complex
untenantable and the insurance proceeds are not sufficient to make such repair,
then Landlord may, by notice to Tenant given within thirty (30) business days
from the date of such damages or destruction, terminate this Lease effective
upon a date within thirty (30) days from the date of such notice.
Section 11.5 Deductible Payments. If the Premises or the Office Complex is
damaged, and such damage is of the type insured against under the fire and
special form property damage insurance maintained by Landlord hereunder, the
cost of repairing such damage up to the amount of the deductible under such
insurance policy (which deductible will not exceed $10,000 per event, except in
the case of earthquake or flood, in which case such deductible loss will not
exceed $50,000 per event) will be included as a part of the Operating Expenses.
If the damage is not covered by such insurance policies and Landlord elects to
repair the damage, then Tenant will pay Landlord a pro rata share of the
"deductible amount" (if any) under Landlord's insurance policies (not to exceed
$10,000 per event, except in the case of earthquake or flood, in which case such
deductible loss will not exceed $50,000 per event) based on Tenant's percentage
interest of the Premises and, if the damage was due to an act or omission of
Tenant, the difference between the actual cost of repair and any insurance
proceeds received by Landlord.
Section 11.6 Landlord's Repair Obligations. If fire or other casualty will
render the whole or any material part of the Premises untenantable and the
Premises cannot reasonably be expected to be made tenantable within three
hundred (300) days from the date of such event and neither party hereto
terminates this Lease pursuant to its rights herein or in the event that more
than fifty percent (50%) of the value of the Office Complex is damaged or
destroyed by fire or other casualty, and Landlord does not terminate this Lease
pursuant to its option granted herein, or in the event that fifty percent (50%)
or less of the value of the Office Complex is damaged or destroyed by fire or
other casualty and neither the whole nor any material portion of the Premises is
rendered untenantable, then Landlord will repair and restore the Premises and
the Office Complex to as near their condition prior to the fire or other
casualty as is reasonably possible with all due diligence and speed (subject to
delays for causes beyond Landlord's reasonable control) and the Rent for the
period during which the Premises are untenantable will be abated pro rata (based
upon the portion of the Premises which is untenantable). In no event will
Landlord be obligated to repair or restore any special equipment or improvements
installed by Tenant at Tenant's expense.
Section 11.7 Rent Apportionment. In the event of a termination of this
Lease pursuant to this Article 11, Rent will be apportioned on a per diem basis
and paid to the date of the fire or other casualty.
ARTICLE 12
EMINENT DOMAIN
Section 12.1 Tenant's Termination. If the whole of or any substantial part
of the Premises is taken by any public authority under the power of eminent
domain, or taken in any manner for any public or quasi-public use, so as to
render (in Tenant's reasonable judgment) the remaining portion of the Premises
unsuitable for the purposes intended hereunder, then the Term will cease as of
the day possession will be taken by such public authority and Landlord will make
a pro rata refund of any prepaid rent. All damages awarded for such taking under
the power of eminent domain or any like proceedings will belong to and be the
property of Landlord, Tenant hereby assigning to Landlord its interest, if any,
in such award. In the event that fifty percent (50%) or more of the building
area or fifty percent (50%) or more of the value of the Office Complex is taken
by public authority under the power of eminent domain, then, at Landlord's
option, by written notice to Tenant, given within sixty (60) days from the date
possession will be taken by such public authority, Landlord may terminate
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this Lease effective upon a date within ninety (90) days from the date of such
notice to Tenant. Tenant will not have the right to terminate this Lease
pursuant to the preceding sentence unless (a) the business of Tenant conducted
in the portion of the Premises taken cannot in Tenant's reasonable judgment be
carried on with substantially the same utility and efficiency in the remainder
of the Premises (or any substitute space securable by Tenant pursuant to clause
(b) hereof); and (b) Tenant cannot secure substantially similar (in Tenant's
reasonable judgment) alternate space upon the same terms and conditions as set
forth in this Lease from Landlord in the Office Complex. Any notice of
termination will specify the date not less than sixty (60) days after the giving
of such notice as the date for such termination.
Section 12.2 Tenant's Participation. Provisions in this Article 12 to the
contrary notwithstanding, Tenant will have the right to prove in any
condemnation proceedings and to receive any separate award which may be made for
damages to or condemnation of Tenant's movable trade fixtures and equipment and
for moving expenses; provided, however, Tenant will in no event have any right
to receive any award for its interest in this Lease or for loss of leasehold.
Provisions in this Article 12 to the contrary notwithstanding, in the event of a
partial condemnation of the Office Complex or the Premises and this Lease is not
terminated, Landlord will, at its sole cost and expense, restore the Premises
and Office Complex to a complete architectural unit and the Base Rent provided
for herein during the period from and after the date of delivery of possession
pursuant to such proceedings to the termination of this Lease will be reduced to
a sum equal to the product of the Base Rent provided for herein multiplied by a
fraction, the numerator of which is the fair market rent of the Premises after
such taking and after same has been restored to a complete architectural unit,
and the denominator of which is the fair market rent of the Premises prior to
such taking.
ARTICLE 13
SURRENDER OF PREMISES
Section 13.1 Surrender of Possession. On the last day of the Term, or on
the sooner termination thereof, Tenant will peaceably surrender the Premises in
good condition and repair consistent with Tenant's duty to make repairs as
herein provided. Subject to this Section 13.1, on or before the last day of the
Term, or the date of sooner termination thereof, Tenant will, at its sole cost
and expense, remove all of its property and trade fixtures and equipment from
the Premises, and all property not removed will be deemed abandoned. Tenant
hereby appoints Landlord its agent to remove all abandoned property of Tenant
from the Premises upon termination of this Lease and to cause its transportation
and storage for Tenant's benefit, all at the sole cost and risk of Tenant and
Landlord will not be liable for damage, theft, misappropriation or loss thereof
and Landlord will not be liable in any manner in respect thereto. Tenant will
pay all costs and expenses of such removal, transportation and storage. Tenant
will leave the Premises in good order, condition and repair, reasonable wear and
tear and damage from fire and other casualty not caused by Tenant excepted.
Tenant will reimburse Landlord upon demand for any expenses incurred by Landlord
with respect to removal, transportation, or storage of abandoned property and
with respect to restoring such Premises to good order, condition and repair. All
alterations, additions and fixtures, other than Tenant's trade fixtures and
equipment which have been made or installed by either Landlord or Tenant upon
the Premises, will remain the property of Landlord and will be, surrendered with
the Premises as a part thereof. If the Premises are not surrendered at the end
of the Term or sooner termination thereof, Tenant will indemnify Landlord
against loss or liability resulting from delay by Tenant in so surrendering the
Premises, including, without limitation, claims made by any succeeding tenants
founded on such delay and any attorneys' fees resulting therefrom. Tenant will
promptly surrender all keys for the Premises to Landlord at the place then fixed
for the payment of rent and will inform Landlord of combinations on any vaults,
locks and safes left on the Premises.
Within ten (10) days after the Final Leasehold Improvement Plans have been
approved by Tenant, Landlord will notify Tenant of which portions of the
Leasehold Improvements, if any, must be removed upon the
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termination of this Lease. With respect to any Work hereunder, Landlord will
notify Tenant of which portions thereof, if any, must be removed upon the
termination of this Lease in the manner provided in Section 8.1 hereof. Anything
in this Section 13.1 or elsewhere in this Lease to the contrary notwithstanding,
Tenant will be required to remove only those portions of the Leasehold
Improvements and the Work of which Landlord has so notified Tenant, and under no
circumstances will Tenant be required to remove carpeting from the Premises.
Section 12.2 Tenant Retaining Possession. In the event Tenant remains in
possession of the Premises after expiration of this Lease, and without the
execution of a new lease, but with Landlord's written consent, it will be deemed
to be occupying the Premises as a tenant from month to month, subject to all the
provisions, conditions and obligations of this Lease insofar as the same can be
applicable to a month-to-month tenancy, except that the Base Rent will be
escalated to Landlord's then current base rent for the Premises according to
Landlord's then current rental rate schedule for prospective tenants. In the
event Tenant remains in possession of the Premises after expiration of this
Lease and without the execution of a new lease and without Landlord's written
consent, Tenant will be deemed to be occupying the Premises without claim of
right and Tenant will pay Landlord for all costs arising out of loss or
liability resulting from delay by Tenant in so surrendering the Premises as
above provided and will pay a charge for each day of occupancy an amount equal
to double the Base Rent and Additional Rent (on a daily basis) then currently
being charged by Landlord on new leases in the Office Complex for space similar
to the Premises.
ARTICLE 14
DEFAULT OF TENANT
Section 14.1 Events of Default. The occurrence of any one or more of the
following events ("Event of Default" or "Default") will constitute a default and
breach of this Lease by Tenant:
(a) If Tenant fails to pay any Base Rent or Additional Rent payable under
this Lease or fails to pay any obligation required to be paid by
Tenant when and as the same will become due and payable, and such
default continues for a period of ten (10) days after written notice
thereof given by Landlord to Tenant.
(b) If Tenant fails to perform any of Tenant's nonmonetary obligations
under this Lease for a period of thirty (30) days after written notice
from Landlord; provided that if more time is required to complete such
performance, Tenant will not be in default if Tenant commences such
performance within the thirty (30)-day period and thereafter
diligently pursues its completion. However, Landlord will not be
required to give such notice if Tenant's failure to perform
constitutes a non-curable breach of this Lease. The notice required by
this subsection is intended to satisfy any and all notice requirements
imposed by law on Landlord and is not in addition to any such
requirement.
(c) If Tenant, by operation of law or otherwise, violates the provisions
of Article 10 hereof relating to assignment, sublease, mortgage or
other transfer of Tenant's interest in this Lease or in the Premises
or in the income arising therefrom.
(d) If Landlord discovers that any financial statement, warranty,
representation or other information given to Landlord by Tenant, any
assignee of Tenant, any subtenant of Tenant, any successor in interest
of Tenant or any guarantor of Tenant's obligation hereunder, and any
of them, in connection with this Lease, was materially false or
misleading when made or furnished.
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(e) Tenant, by operation of law or otherwise, violates the provisions of
Section 4.10 relating to compliance with environmental laws.
(f) If (i) Tenant makes a general assignment or general arrangement for
the benefit of creditors; (ii) a petition for adjudication of
bankruptcy or for reorganization or rearrangement is filed by or
against Tenant and is not dismissed within thirty (30) days; (iii) if
a trustee or receiver is appointed to take possession of substantially
all of Tenant's assets located at the Premises or of Tenant's interest
in the Lease and possession is not restored to Tenant within thirty
(30) days; or (iv) if substantially all of Tenant's assets located at
the Premises or of Tenant's interest in this Lease is subjected to
attachment, execution or other judicial seizure which is not
discharged within thirty (30) days. If a court of competent
jurisdiction determines that any of the acts described in this
subsection does not constitute an Event of Default and a trustee is
appointed to take possession (or if Tenant remains a debtor in
possession) and such trustee or Tenant transfers Tenant's interest
hereunder, then Landlord will receive, as Additional Rent, the
difference between the Rent (or any other consideration) paid in
connection with such assignment or sublease and the Rent payable by
Tenant hereunder. As used in this subsection, the term "Tenant" will
also mean any guarantor of Tenant's obligations under this Lease. If
any such Event of Default under this Section 14.1(f) will occur,
Landlord, at any time during the continuance of any such Event of
Default, may give whiten notice to Tenant stating that this Lease will
expire and terminate on the date specified in such notice, and upon
the date specified in such notice this lease, and all rights of Tenant
under this Lease, including all rights of renewal whether exorcised or
not, will expire and terminate, or in the alternative or in addition
to the foregoing remedy, Landlord may assert and have the benefit of
any other remedy allowed herein, at law, or in equity.
Section 14.2 Landlord's Remedies. Upon the occurrence of an Event of
Default by Tenant, and at any time thereafter, with or without notice or demand
and without limiting Landlord in the exercise of any right or remedy which
Landlord may have, Landlord will be entitled to any one or more of the following
rights and remedies:
(a) Terminate Tenant's right to possession of the Premises by any lawful
means, in which case the Lease will terminate and Tenant will
immediately surrender possession of the Premises to Landlord. In such
event, Landlord will have the immediate right to reenter and remove
all persons and property, and such property may be removed and stored
in a public warehouse or elsewhere at the cost of, and for the account
of Tenant; all without service of notice or resort to legal process
and without being deemed guilty of trespass, or becoming liable for
any loss or damage which may be occasioned thereby. In the event that
Landlord will elect to so terminate this Lease, then Landlord will be
entitled to recover from Tenant all damages incurred by Landlord by
reason of Tenant's default, including:
(i) The equivalent of the amount of the Base Rent and Additional
Rent which would be payable under this Lease by Tenant if this
Lease were still in effect, less
(ii) The net proceeds of any reletting affected pursuant to the
provisions of Section 14.2 hereof after deducting all of
Landlord's reasonable expenses
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in connection with such reletting, including, without
limitation, all repossession costs, brokerage commissions,
legal expenses, reasonable attorneys' fees, alteration costs,
and expenses of preparation of the Premises, or any portion
thereof, for such reletting.
Tenant will pay such current damages in the amount determined in
accordance with the terms of this Section 14.2 as set forth in a
written statement thereof from Landlord to Tenant ("Deficiency"), to
Landlord in monthly installments on the days on which the Rent would
have been payable under this Lease if this Lease were still in effect,
and Landlord will be entitled to recover from Tenant each monthly
installment of the Deficiency as the same will arise.
(b) At any time after an Event of Default and termination of this Lease,
whether or not Landlord will have collected any monthly Deficiency as
set forth in Section 14.2, Landlord will be entitled to recover from
Tenant, and Tenant will pay to Landlord, on demand, as and for final
damages for Tenant's default, an amount equal to the difference
between the then present value of the aggregate of the Base Rent and
Additional Rent and any other charges to be paid by Tenant hereunder
for the then remaining unexpired portion of the Term (assuming this
Lease had not been so terminated), and the then present value of the
then aggregate fair and reasonable fair market base rent and
additional rent of the Premises for the same period. In the
computation of present value, a discount at the rate of six percent
(6%) per annum will be employed. If the Premises, or any portion
thereof, will be relet by Landlord for the unexpired Term, or any part
thereof, before presentation of proof of such damages to any court,
commission or tribunal, the amount of Rent reserved upon such
reletting, will, prima facie, be the fair and reasonable fair market
rent for the part or the whole of the Premises so relet during the
term of the reletting. Nothing contained in this Section 14.2 or
elsewhere in this Lease will limit or prejudice the right of Landlord
to prove and obtain, as damages by reason of such expiration or
termination, an amount equal to the maximum allowed by any statute or
rule of law in effect at the time when, and governing the proceedings
in which, such damages are to be proved, whether or not such amount be
greater, equal to or less than the amount of the difference referred
to above.
(c) Upon the occurrence of an Event of Default by Tenant, Landlord will
also have the right, with or without terminating this Lease, to
reenter the Premises to remove all persons and property from the
Premises. Such property may be removed and stored in a public
warehouse or elsewhere at the cost of and for the account of Tenant.
If Landlord will elect to reenter the Premises, Landlord will not be
liable for damages by reason of such reentry.
(d) If Landlord does not elect to terminate this Lease as provided in this
Section 14.2, then Landlord may, from time to time, recover all Rent
as it becomes due under this Lease. At any time thereafter, Landlord
may elect to terminate this Lease and to recover damages to which
Landlord is entitled.
(e) In the event that Landlord should elect to terminate this Lease and to
relet the Premises, it may execute any new lease in its own name.
Tenant hereunder will have no right or authority whatsoever to collect
any Rent from such Tenant. The proceeds of any such reletting will be
applied as follows:
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(i) First, to the payment of any indebtedness other than Rent due
hereunder from Tenant to Landlord, including but not limited to
storage charges or brokerage commissions owing from Tenant to
Landlord as the result of such reletting;
(ii) Second, to the payment of the costs and expenses of reletting
the Premises, including alterations and repairs which Landlord,
in its sole discretion, deems reasonably necessary and
advisable and reasonable attorneys' fees incurred by Landlord
in connection with the retaking of the such Premises and such
reletting;
(iii) Third, to the payment of Rent and other charges due and unpaid
hereunder; and
(iv) Fourth, to the payment of future Rent and other damages payable
by Tenant under this Lease.
The parties hereto will, and they hereby do, waive trial by jury in any
action, proceeding, or counterclaim brought by either of the parties hereto
against the other on any matters whatsoever arising out of, or in any way
connected with, this Lease, the relationship of Landlord and Tenant, Tenant's
use or occupancy of the Premises and/or Office Complex, and/or claim or injury
or damage. In the event Landlord commences any proceeding to enforce this Lease
or the landlord/tenant relationship between the parties or for nonpayment of
Rent (of any nature whatsoever) or additional monies due Landlord from Tenant
under this Lease, Tenant will not interpose any counterclaim of whatever nature
or description in any such proceedings. In the event Tenant must, because of
applicable court rules, interpose any counterclaim or other claim against
Landlord in such proceedings, Landlord and Tenant covenant and agree that, in
addition to any other lawful remedy of Landlord, upon motion of Landlord, such
counterclaim or other claim asserted by Landlord will be severed out of the
proceeding instituted by Landlord (and, if necessary, transferred to a court of
different jurisdiction), and the proceedings, instituted by Landlord may proceed
to final judgment separately and apart from and without consolidation with or
reference to the shares of each counterclaim or any other claim asserted by
Tenant.
Section 14.3 Written Notice of Termination Required. Landlord will not be
deemed to have terminated this Lease and Tenant's right to possession of the
leasehold or the liability of Tenant to pay Rent thereafter to accrue or its
liability for damages under any of the provisions hereof, unless Landlord will
have notified Tenant in writing that it has so elected to terminate this Lease.
Tenant covenants that the service by Landlord of any notice pursuant to the
applicable unlawful detainer statutes of the state in which the Office Complex
is located and Tenant's surrender of possession pursuant to such notice will not
(unless Landlord elects to the contrary at the time of, or at any time
subsequent to the service of, such notice, and such election be evidenced by a
written notice to Tenant) be deemed to be a termination of this Lease or of
Tenant's right to possession thereof.
Section 14.4 Remedies Cumulative; No Waiver. All rights, options and
remedies of Landlord contained in this Lease will be construed and held to be
cumulative, and no one of them will be exclusive of the other, and Landlord will
have the right to pursue any one or all of such remedies or any other remedy or
relief which may be provided by law whether or not stated in this Lease. No
waiver by Landlord of a breach of any of the terms, covenants or conditions of
this Lease by Tenant will be construed or held to be a waiver of any succeeding
or preceding breach of the same or any other term, covenant or condition therein
contained. No waiver of any default of Tenant hereunder will be implied from any
omission by Landlord to take any action on account of such default if such
default persists or is repeated, and no express waiver will affect default other
than
35
as specified in such waiver. The consent or approval by Landlord to or of any
act by Tenant requiring Landlord's consent or approval will not be deemed to
waive or render unnecessary Landlord's consent to or approval of any subsequent
similar acts by Tenant.
Section 14.5 Legal Costs. Each of Landlord and Tenant will reimburse the
other, upon demand, for any costs or expenses incurred by the other in
connection with any breach or default of Landlord or Tenant, as the case may be,
under this Lease, whether or not suit is commenced or judgment entered. Such
costs will include legal fees and costs incurred for the negotiation of a
settlement enforcement of rights or otherwise. Furthermore, if any action for
breach of or to enforce the provisions of this Lease is commenced, the court in
such action will award to the party in whose favor a judgment is entered a
reasonable sum as attorneys' fees and costs. Such attorneys' fees and costs will
be paid by the losing party in such action. Each of Landlord and Tenant will
also indemnify the other against and hold the other harmless from all costs,
expenses, demands and liability incurred by the other if the other becomes or is
made a party to any claim or action (a) instituted by Landlord or Tenant, as the
case may be, or by any third party against Landlord or Tenant, as the case may
be; (b) for foreclosure of any lien for labor or material furnished to or for
Landlord or Tenant, as the case may be, or such other person; (c) otherwise
arising out of or resulting from any act or transaction of Landlord or Tenant,
as the case may be, or such other person; or (d) necessary to protect the
interest of Landlord or Tenant, as the case may be, under this Lease in a
bankruptcy proceeding, or other proceeding under Title 11 of the United States
Code, as amended. Each of Landlord and Tenant will defend the other against any
such claim or action at Landlord's or Tenant's expense, as the case may be, with
counsel reasonably acceptable to the other or, at the other's election, Landlord
or Tenant, as the case may be, will reimburse the other for any legal fees or
costs incurred by the other in any such claim or action.
In addition, Tenant will pay Landlord's reasonable attorneys' fees incurred
in connection with Tenants request for Landlord's consent in connection with any
act which Tenant proposed to do and which requires Landlord's consent.
Section 14.6 Waiver of Damages for Reentry. Tenant hereby waives all claims
by Landlord's reentering and taking possession of the Premises or removing and
storing the property of Tenant as permitted under this Lease and will save
Landlord harmless from all losses, costs or damages occasioned Landlord thereby.
No such reentry will be considered or construed to be a forcible entry by
Landlord.
ARTICLE 15
SUBORDINATION/ESTOPPEL
Section 15.1 Lease Subordinate. This Lease will be subject and subordinate
to any mortgage, deed of trust or ground lease now or hereafter placed upon the
Premises, the Building, the Office Complex, the Property, or any portion
thereof, by Landlord, its successors or assigns, and to amendments,
replacements, renewals and extensions thereof. Tenant agrees at any time
hereafter, upon demand, to execute and deliver a subordination, non-disturbance
and attornment agreement, in substantially the same form as attached hereto and
made a part hereof as Exhibit H, with reasonable modifications thereto, and any
other instruments, releases or other documents that may be reasonably required
for the purpose of subjecting and subordinating this Lease, as above provided,
to the lien of any such mortgage, deed of trust or ground lease. It is agreed,
nevertheless, that as long as Tenant is not in default in the payment of Base
Rent, Additional Rent, and the payment of other charges to be paid by Tenant
under this Lease, and the performance of all covenants, agreements and
conditions to be performed by Tenant under this Lease, then there will be no
interference with Tenant's right to quiet enjoyment under this Lease, or with
the right of Tenant to continue to occupy the Premises and to conduct its
business thereon, in accordance with the terms of this Lease, as against any
lessor, lessee, mortgagee or trustee, or their respective successors or assigns.
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Section 15.2 Attornment. The above subordination will be effective without
the necessity of the execution and delivery of any further instruments on the
part of Tenant to effectuate such subordination. Notwithstanding anything
hereinabove contained in this Article 15, in the event the holder of any
mortgage, deed of trust or ground lease will at any time elect to have this
Lease constitute a prior and superior lien to its mortgage, deed of trust or
ground lease, then, and in such event, upon any such holder or Landlord
notifying Tenant to that effect in writing, this Lease will be deemed prior and
superior in lien to such mortgage, deed of trust, ground lease, whether this
Lease is dated prior or subsequent to the data of such mortgage, deed of trust
or ground lease and Tenant will execute such attornment agreement as may be
reasonably requested by such holder or landlord.
Section 15.3 Tenant's Notice of Default. Tenant agrees, provided the
mortgagee, ground lessor or trust deed holder under any mortgage, ground lease,
deed of trust or other security instrument will have notified Tenant in writing
(by the way of a notice of assignment of lease or otherwise) of its address,
Tenant will give such mortgagee, ground lessor or trust deed holder or other
secured party ("Mortgagee"), simultaneously with delivery of notice to Landlord,
by registered or certified mail, a copy of any such notice of default served
upon Landlord. Tenant further agrees that such Mortgagee will have the right to
cure any alleged default during the same period that Landlord has to cure such
default.
Section 15.4 Estoppel Certificates. Tenant agrees from time to time upon
not less than ten (10) days prior written request by Landlord to deliver to
Landlord a statement in writing certifying (a) that this Lease is unmodified and
in full force and effect (or if there have been modifications that the Lease as
modified is in full force and effect and stating the modifications); (b) the
dates to which the rent and other charges have been paid; (c) Landlord is not in
default in any provision of this Lease or, if in default, the nature thereof
specified in detail; (d) the amount of monthly rental currently payable by
Tenant; (e) the amount of any prepaid rent, and (f) such other matters as may be
reasonably requested by Landlord or any mortgagee or prospective purchaser of
the Office Complex, or any portion thereof.
If Tenant does not deliver such statement to Landlord within such ten
(10)-day period, Landlord and any prospective purchaser or encumbrancer of the
Premises or the Office Complex may conclusively presume and rely upon the
following facts: (i) that the terms and provisions of this Lease have not been
changed except as otherwise, represented by Landlord; (ii) that this Lease has
not been canceled or terminated and is in full force and effect, except as
otherwise represented by Landlord; (iii) that the certain amounts of the Base
Rent and Security Deposit are as represented by Landlord and that any charges
made against the Security Deposit are uncontested and valid; (iv) that there
have been no subleases or assignments of the Lease; (v) that not more than one
month's Base Rent or other charges have been paid in advance; and (vi) that
Landlord is not in default under the Lease. In such event, Tenant will be
estopped from denying the truth of such facts.
ARTICLE 16
MISCELLANEOUS
Section 16.1 Time is of the Essence. Time is of the essence with respect to
the performance of every provision of this Lease in which time of performance is
a factor.
Section 16.2 Memorandum of Lease. No Memorandum of this Lease may be
recorded by Tenant without the prior written consent of Landlord.
Section 16.3 Joint and Several Liability. All parties signing this Lease as
Tenant will be jointly and severally liable for all obligations of Tenant.
37
Section 16.4 Broker. Tenant represents that Tenant has dealt directly with
and only with CB ▇▇▇▇▇▇▇ ▇▇▇▇▇, L.L.C., as broker, in connection with this Lease
and that insofar as Tenant knows, no other broker negotiated or participated in
negotiations of this Lease or submitted or showed the Premises or is entitled to
any commission in connection therewith. Tenant agrees to indemnify, defend and
hold harmless Landlord, and Landlord's successors and assigns, with respect to
any claim by any person or entity, other than CB ▇▇▇▇▇▇▇ ▇▇▇▇▇, L.L.C., claiming
to have been engaged by Tenant, or by anyone claiming by, through or under
Tenant, so as to become entitled to any such fee or commission.
Section 16.5 Notice. All notices, demands and requests will be in writing,
and will be effectively served by forwarding such notice, demand or request by
certified or registered mail, postage prepaid, or by commercial overnight
courier service addressed as follows:
(a) If addressed to Tenant:
Vitria Technology, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
(b) If addressed to Landlord:
▇/▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
with a copy to:
Opus Corporation
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Legal Department
and with a copy to:
AEW Partners II, L.P.
c/o AEW Capital Management, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: General Counsel
and with a copy to Mortgagee (if any), subject to Section 15.3
hereof
or at such other address as Landlord and Tenant may hereafter designate by
written notice. The effective date of all notices will be the time of mailing
such notice or the date of delivery to a commercial overnight courier service.
Section 16.6 Landlord's Agent. All rights and remedies of Landlord under
this Lease or that may be provided by law may be executed by Landlord in its own
name individually, or in the name of its agent, and all
38
legal proceedings for the enforcement of any such rights or remedies, including,
without limitation, those set forth in Article 14 hereof, may be commenced and
prosecuted to final judgment and execution by Landlord in its own name or in the
name of its agent.
Section 16.7 Quiet Possession. Landlord covenants and agrees that Tenant,
upon paying the Base Rent, Additional Rent and other charges herein provided for
and observing and keeping the covenants, agreements and conditions of this Lease
on its part to be kept and performed, will lawfully and quietly hold, occupy and
enjoy the Premises during the Term.
Section 16.8 Successors and Assigns. The covenants and agreements herein
contained will bind and inure to the benefit of Landlord, its successors and
assigns, and Tenant and its permitted successors and assigns.
Section 16.9 Severability. If any term or provision of this Lease will to
any extent be held invalid or unenforceable, the remaining terms and provisions
of this Lease will not be affected thereby, but each term and provision of this
Lease will be valid and enforced to the fullest extent permitted by law. This
Lease will be construed and enforced in accordance with the laws of the state in
which the Premises are located.
Section 16.10 No Abandonment or Waste. Tenant covenants not to do or suffer
any waste or damage or disfigurement or injury to the Premises or Office Complex
and Tenant further covenants that it will not vacate or abandon the Premises
during the Term.
Section 16.11 Transfers by Landlord. The term "Landlord" as used in this
Lease so far as covenants or obligations on the part of Landlord are concerned
will be limited to mean and include only the owner or owners of the Office
Complex at the time in question, and in the event of any transfer or transfers
or conveyances the then guarantor will be automatically freed and released from
all personal liability accruing from and after the date of such transfer or
conveyance as respects the performance of any covenant or obligation on the part
of Landlord contained in this Lease to be performed, it being intended hereby
that the covenants and obligations contained in this Lease on the part of
Landlord will be binding on Landlord, its successors and assigns, only during
and in respect to their respective successive periods of ownership.
In the event of a sale or conveyance by Landlord of the Office Complex or
any part of the Office Complex, the same will operate to release Landlord from
any future liability upon any of the covenants or conditions herein contained
and in such event Tenant agrees to look solely to the responsibility of the
successor in interest of Landlord in and to this Lease. This Lease will not be
affected by any such sale or conveyance, and Tenant agrees to attorn to the
purchaser or grantee, which will be personally obligated on this Lease only so
long as it is the owner of Landlord's interest in and to this Lease.
Section 16.12 Delivery of Documents and Information. Tenant will, without
charge to Landlord, at any time and from time to time within thirty (30) days
after written request by Landlord, deliver to Landlord copies, certified by
Tenant's chief financial officer, of Tenant's audited financial statement for
the then most recently ended fiscal year of Tenant, and for the preceding two
fiscal years, including the certification of its auditor and any and all
auditors' notes thereto, and the similar financial statement of any and all
guarantors of Tenant's obligations under this Lease. The aforesaid financial
statements will include, without limitation, Tenants (and, if applicable, its
guarantors) balance sheet, income statement, cash flow statement, statement of
sources and uses and such other statements reasonably requested by Landlord.
Landlord will use its reasonable commercial efforts to limit the number of times
it requests the information described in this Section 16.12 to not more than two
times during any single year during the Term.
39
Section 16.13 Headings. The marginal or topical headings of the several
articles and sections are for convenience only and do not define, limit or
construe the contents of such articles and sections.
Section 16.14 Written Agreement. All preliminary negotiations are merged
into and incorporated in this Lease, except for written collateral agreements
executed contemporaneously herewith.
Section 16.15 Modifications or Amendments. This Lease can only be modified
or amended by an agreement in writing signed by the parties hereto. No receipt
of money by Landlord from Tenant or any other person after termination of this
Lease or after the service of any notice or after the commencement of any suit,
or after final judgment for possession of the Premises will reinstate, continue
or extend the Term or affect any such notice, demand or suit, or imply consent
for any action for which Landlord's consent is required, unless specifically
agreed to in writing by Landlord. Any amounts received by Landlord may be
allocated to any specific amounts due from Tenant to Landlord as Landlord
determines.
Section 16.16 Landlord Control. Landlord will have the right to close any
portion of the building area or land area to the extent as may, in Landlord's
reasonable opinion, be necessary to prevent a dedication thereof or the accrual
of any rights to any person or the public therein. Landlord will at all times
have full control management and direction of the Office Complex, subject to the
rights of Tenant in the Premises, and Landlord reserves the right at any time
and from time to time to reduce, increase, enclose or otherwise change the size,
number and location of buildings, layout and nature of the Office Complex, to
construct additional buildings and additions to any building, and to create
additional rentable areas through use and/or enclosure of common areas, or
otherwise, and to place signs on the Office Complex, and to change the name,
address, number or designation by which the Office Complex is commonly known. No
implied easements are granted by this Lease. In exercising its rights under this
Section 16.16, Landlord will use its commercially reasonable efforts to minimize
any disturbance to Tenant's use of the Office Space.
Section 16.17 Utility Easements. Tenant will permit Landlord (or its
designees) to erect, use, maintain, replace and repair pipes, cables, conduits,
plumbing, designees, vents, and telephone, electric and other wires or other
items, in, to and through the Premises, as and to the extent that Landlord may
now or hereafter deem necessary or appropriate for the proper operation and
maintenance of the Office Complex. In exercising its rights under this Section
16.17, Landlord will use its commercially reasonable efforts to minimize any
disturbance to Tenant's use of the Office Space.
Section 16.18 Not Binding Until Properly Executed. Employees or agents of
Landlord have no authority to make or agree to make a lease or other agreement
or undertaking in connection herewith. The submission of this document for
examination does not constitute an offer to lease, or a reservation of, or
option for, the Premises. This document becomes effective and binding only upon
the execution and delivery hereof by the proper officers of Landlord and by
Tenant. Tenant confirms that Landlord and its agents have made no
representations or promises with respect to the Premises or the making of or
entry into this Lease except as in this Lease expressly set forth, and agrees
that no claim or liability will be asserted by Tenant against Landlord for, and
Landlord will not be liable by reason of, breach of any representations or
promises not expressly stated in this Lease. This Lease, except for the Building
Rules and Regulations, in respect to which Section 16.19 of this Article will
prevail, can be modified or altered only by agreement in writing between
Landlord and Tenant, and no act or omission of any employee or agent of Landlord
will alter, change or modify any of the provisions hereof.
Section 16.19 Building Rules and Regulations. Tenant will perform, observe
and comply with the Building Rules and Regulations of the Office Complex as set
forth in Exhibit I attached hereto and made a part hereof, with respect to the
safety, care and cleanliness of the Premises and the Office Complex, and the
preservation of good order thereon, and, upon written notice thereof to Tenant,
Tenant will perform, observe, and
40
comply with any changes, amendments or additions thereto as from time to time
will be established and deemed advisable by Landlord for tenants of the Office
Complex. Landlord will not be liable to Tenant for any failure of any other
tenant or tenants of the Office Complex to comply with such Building Rules and
Regulations; provided, however, that such Rules and Regulations will be applied
and enforced in a uniform and non-discriminatory manner with respect to all
tenants of the Building. Anything in this Lease or in the Rules and Regulations
to the contrary notwithstanding, in the event of any conflict between the
provisions of this Lease and the provisions of the Rules and Regulations, the
provisions of this Lease will govern and control.
Section 16.20 Compliance with Laws and Recorded Covenants. Tenant will not
use the Premises or permit anything to be done in or about the Premises which
will, in any way, conflict with any law, statute, ordinance or governmental rule
or regulation now in force or which may hereafter be enacted or promulgated.
Tenant will, at its sole cost and expense, promptly comply with all laws,
statutes, ordinances and governmental rules and regulations now in force or
which may hereafter be in force, and with the requirements of any fire insurance
underwriters or other similar body now or hereafter constituted relating to or
affecting the condition, use or occupancy of the Premises. Tenant will use the
Premises and comply with any recorded covenants, conditions, and restrictions
affecting the Premises and the Office Complex as of the commencement of the
Lease or which are recorded during the Term.
Section 16.21 Obligations Survive Termination. All obligations of either
Landlord or Tenant hereunder not fully performed as of the expiration or earlier
termination of the Term will survive the expiration or earlier termination of
the Term, including, without limitation, all payment obligations of Tenant with
respect to Operating Expenses and Real Estate Taxes and all obligations
concerning the condition of the Premises.
Section 16.22 Tenant's Waiver. Any claim which Tenant may have against
Landlord for default in performance of any of the obligations herein contained
to be kept and performed by Landlord will be deemed waived unless such claim is
asserted by written notice thereof to Landlord within sixty (60) days of
commencement of the alleged default or of accrual of the cause of action and
unless suit be brought thereon within six (6) months subsequent to the accrual
of such cause of action. Furthermore, Tenant agrees to look solely to Landlord's
interest in the Office Complex for the recovery of any judgment from Landlord,
it being agreed that Landlord, or if Landlord is a partnership, its partners
whether general or limited, or if Landlord is a corporation, its directors,
officers or shareholders, will never be personally liable for any such judgment.
Section 16.23 Tenant Authorization. Tenant will furnish to Landlord
promptly upon demand, a corporate resolution, proof of due authorization of
partners, or other appropriate documentation reasonably requested by Landlord
evidencing the due authorization of Tenant to enter into this Lease.
Section 16.24 No Partnership or Joint Venture. This Lease will not be
deemed or construed to create or establish any relationship or partnership or
joint venture or similar relationship or arrangement between Landlord and Tenant
hereunder.
Section 16.25 Tenant's Obligation to Pay Miscellaneous Taxes. Tenant will
pay, prior to delinquency, all taxes assessed or levied upon its occupancy of
the Premises, or upon the trade fixtures, furnishing, equipment and all other
personal property of Tenant located in the Premises, and when possible, Tenant
will cause such trade fixtures, furnishings, equipment and other personal
property to be assessed and billed separately from the property of Landlord. In
the event any or all of Tenant's trade fixtures, furnishings, equipment or other
personal property, or Tenant's occupancy of the Premises, will be assessed and
taxed with the property of Landlord, Tenant will pay to Landlord its share of
such taxes within ten (10) days after delivery to Tenant by Landlord of a
statement in writing setting forth the amount of such taxes applicable to
Tenant's personal property.
41
Section 16.26 Prohibited Signs. Except as expressly provided herein, Tenant
will not place, or permit to be placed or maintained, on any exterior door, wall
or window of the Premises any sign, awning or canopy, or advertising matter or
other thing of any kind, and will not place or maintain any decoration,
lettering or advertising matter on the glass of any window or door, or that can
be seen through the glass, of the Premises, except as specifically approved in
writing by Landlord. Tenant further agrees to maintain any such sign, awning,
canopy, decoration, lettering, advertising matter or thing as may be approved,
in good condition and repair at all times. Tenant agrees at Tenant's sole cost,
that any Tenant sign will be maintained in strict conformance with Landlord's
sign criteria, if any, as to design, material, color, location, size, letter
style, and method of installation.
Section 16.27 Exhibits. The following are made a part hereof, with the same
force and effect as if specifically set forth herein:
(a) Legal Description of Property-- Exhibit A
(b) Site Plan-- Exhibit B
(c) Floor Plan-- Exhibit C
(d) Milestone Dates--Exhibit D
(e) Holidays-- Exhibit E
(f) General Description of Janitorial Services-- Exhibit F
(f) General Description of Building Standard-- Exhibit G
(g) Form of Subordination, Non-Disturbance and Attornment Agreement--
Exhibit H
(h) Building Rules and Regulations-- Exhibit I
ARTICLE 17
OPTION TO RENEW
Section 17.1 Option to Renew. Tenant will have the right, to be exercised
as hereinafter provided, to extend the Term for up to one (1) period of five (5)
years ("Renewal Term"), upon the following terms and conditions and subject to
the following limitations:
(a) As of the respective times hereinafter set forth for the exercise of
such renewal option, this Lease will be in full force and effect and
there will be no Event of Default under this Lease; provided, however,
that Landlord will have the right, in its sole discretion, to waive
any such condition regarding an Event of Default.
(b) With respect to the Renewal Term, if any, the Premises will be leased
to Tenant on an "as is" basis, and the Renewal Term will be upon the
same terms, provisions and conditions contained in this Lease, except
that (subject to this Section 17.1(b)) the annual Base Rent for the
Renewal Term will be equal to the Fair Market Rental Value (as such
term is defined in Section 17.3 hereof, as determined with respect to
the Renewal Term pursuant to Section 17.3 hereof. Further, such Base
Rent will commence on the first day of the Renewal Term, and will
continue on the first day of each and every month thereafter for the
next succeeding months during the balance of the Renewal Term. If the
Renewal Term commences on a date other than the first day of a
calendar month, or ends on a date other than the last day of a
calendar month, monthly rent for the first month of the Renewal Term
or the last month of the Renewal Term will be prorated based upon the
ratio that the number of days in the Renewal Term within such month
bears to the total number of days in such month. Anything in this
Lease to the contrary notwithstanding, the Base Rent during the
Renewal Term
42
will not be less than the Base Rent in effect during the last Lease
Year of the Initial Term.
Section 17.2 Renewal Term Election Procedure. In the event that Tenant
desires to exercise its option with respect to the Renewal Term, it will provide
written notice thereof to Landlord ("Tenant's Renewal Inquiry Notice") on or
before the date which is twelve (12) months prior to the end of the Initial
Term. Following Tenant's delivery of Tenant's Renewal Inquiry Notice, the Fair
Market Rental Value with respect to the Renewal Term will be determined in
accordance with the procedures set forth in Section 17.3 hereof. Then, within
thirty (30) days after the determination of the Fair Market Rental Value, but in
no event later than the date which is ten (10) months prior to the end of the
Initial Term ("Renewal Exercise Date"), Tenant will notify Landlord, in writing,
either that (a) Tenant elects to exercise its option with respect to the Renewal
Term, or (b) Tenant elects not so to exercise its option with respect to the
Renewal Term. Such written notification is herein referred to as "Tenant's
Renewal Election Notice." If Tenant fails so to deliver Tenant's Renewal
Election Notice on or before the Renewal Exercise Date, then Tenant will be
conclusively deemed to have elected not to have exercised its option with
respect to the Renewal Term. If Tenant elects, or is deemed to have elected, not
to exercise its option with respect to the Renewal Term, then Tenant's rights
with respect to the Renewal Term will automatically terminate and be of no
further force or effect.
Section 17.3 Determination of Fair Market Rental Value. The "Fair Market
Rental Value" will be either as Landlord and Tenant will agree or, in the event
that Landlord and Tenant cannot agree, as determined by appraisal pursuant to
this Section 17.3. In all cases, whether determined by agreement of Landlord and
Tenant or determined by appraisal pursuant to this Section 17.3, the Fair Market
Rental Value of the Premises will be determined (a) as of the date which is
twelve (12) months prior to the commencement of the Renewal Term; (b) assuming
that this Lease will continue in full force and effect for an additional five
(5) years from and after the commencement of the Renewal Term, with an annual
Base Rent equal to the Fair Market Rental Value, and with terms, provisions and
conditions comparable to this Lease; (c) assuming that Tenant is then, and will
remain for the balance of such assumed additional five (5)-year term, of the
same financial creditworthiness as it is on the day which is twelve (12) months
prior to the commencement of the subject Renewal Term; (d) based on renewal
rental rates for other properties comparable in quality, size, condition, age
and location to the Premises; and (e) based on the permitted use of the Premises
hereunder
Initially, within ten (10) days after Landlord's receipt of Tenant's
Renewal Inquiry Notice under Section 17.2 hereof, Landlord and Tenant will meet
to negotiate, in good faith, the Fair Market Rental Value of the Premises. If
Landlord and Tenant are unable to agree on the Fair Market Rental Value within
ten (10) days after Landlord's receipt of Tenant's Renewal Inquiry Notice, then
the determination thereof will be determined by appraisal pursuant to this
Section 17.3.
If Landlord and Tenant are unable to agree on the Fair Market Rental Value
within the aforesaid ten (10)-day period, then within five (5) days thereafter,
each of Landlord and Tenant will designate an independent M.A.I. appraiser and
will notify each other in writing of such designation. Within the next five (5)
days, such appraisers will designate a third independent M.A.I. appraiser and
will notify Landlord and Tenant in writing of such designation. After their
appointment, all three such appraisers will be directed to determine,
independently, the Fair Market Rental Value of the Premises in accordance with
this Section 17.3. Within twenty (20) days after the designation of the third
appraiser, each of the three appraisers will submit its written determination of
the Fair Market Rental Value, in accordance with this Section 17.3, to both
Landlord and Tenant. If the Fair Market Rental Value determined by any two or
all three of such appraisers is identical, then the Fair Market Rental Value for
purposes of the Renewal Term will be such identical amount. If the Fair Market
Rental Value as determined by each such appraiser is different from the others,
but two of such determinations are within five percent (5%) of each other, then
the Fair Market Rental Value will be arithmetic
43
mean of such two amounts. In all other cases, the highest and lowest of such
determinations will be disregarded, and the Fair Market Rental Value will be
equal to the middle (or remaining) determination.
Landlord will pay all costs associated with the appraiser designated by
Landlord; Tenant will pay all costs associated with the appraiser designated by
Tenant; and Landlord and Tenant will share equally all costs associated with the
third appraiser. All such appraisers will be reputable, independent M.A.I. real
estate appraisers, each of whom will be knowledgeable and experienced in the
determination of office facility rental rates in the DuPage County, Illinois
area.
IN WITNESS WHEREOF, the parties have executed this Lease as of the day and
year first above written.
Landlord:
Opus/AEW Office Development Company,
L.L.C., a Delaware limited liability
company authorized to transact
business in Illinois
By: AEW Partners II, L.P., a Member
By: AEW II, L.P., its General Partner
By: Partners II Holdings, L.P., its
General Partner
By: AEW II Corporation, its General
Partner
By: /s/ ILLEGIBLE
-----------------------------
Its: Vice President
By: Opus North Corporation, a Member
By: /s/ ILLEGIBLE
-----------------------------
Its: VP/GM
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Tenant:
Vitria Technology, Inc., a California
corporation authorized to transact
business in Illinois
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇, III
----------------------------
Its: Chief Financial Officer
45
Exhibit A -- Legal Description of Property
Parcel D in Highland Landmark Assessment Plat No. 1 of Lots 1 through 5,
inclusive, of Highland Landmark, a Subdivision of part of the South half of
▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇▇ of the Third Principal Meridian,
recorded October 2, 1996 as document R96-162837, in DuPage County, Illinois.
Also known as that part of Lots 1 and 2, described as follows:
Beginning at the Southwesternmost corner of said Lot 1; thence Northerly and
Northeasterly along the Northerly line of said Lot 1, the following courses:
thence North 08 degrees 32 minutes 00 seconds East, 182.21 feet; thence North 47
degrees 17 minutes 00 seconds East, 280.06 feet; thence North 40 degrees 26
minutes 00 seconds East, 197.70 feet; thence North 42 degrees 12 minutes 05
seconds East, 128.31 feet; thence North 46 degrees 31 minutes 21 seconds East,
509.30 feet to an angle point in said line; thence South 22 degrees 34 minutes
56 seconds East, 71.67 feet to the center line of Highland Parkway; thence
Southwesterly and Southerly along said centerline, being a curve concave
Easterly, having a radius of 350.00 feet, a chord bearing of South 19 degrees 31
minutes 42 seconds West, a chord distance of 519.30 feet, an arc length of
585.08 feet to a point of tangency; thence South 28 degrees 21 minutes 40
seconds East, along said centerline, tangent to the last described course,
210.06 feet to a point of curvature; thence Southerly along said centerline,
being a curve concave Westerly, tangent to The last described course, having a
radius of 350.00 feet, a chord bearing of South 14 degrees 10 minutes 50 seconds
East, a chord distance of 171.49 feet, an are length of 173.25 feet to a point
of tangency; thence South 00 degrees 00 minutes 00 seconds east, along said
centerline, tangent to the last described course, 79.22 feet to the South line
of said Lot 1; thence North 90 degrees 00 minutes 00 seconds West, along said
line, 730.48 feet to an angle point in said line; thence North 76 degrees 26
minutes 40 seconds West, along said line, 84.39 feet to the point of beginning;
in Highland Landmark, a subdivision of part of the South half of ▇▇▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇▇ of the Third Principal Meridian, according to
the Plat thereof Recorded November 16, 1990 As Document R90-156555, in DuPage
County, Illinois.
Commonly known as: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Real Estate Tax No. ▇▇-▇▇-▇▇▇-▇▇▇