EXHIBIT 10.2
OFFICE LEASE
made by and between
DUKE CONSTRUCTION LIMITED PARTNERSHIP,
an Indiana limited partnership,
("Landlord")
and
UNIGRAPHICS SOLUTIONS INC.,
a Delaware corporation
("Tenant")
Date: July 7, 2000
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OFFICE LEASE
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THIS LEASE is executed as of the 7th day of July, 2000, by and between
DUKE CONSTRUCTION LIMITED PARTNERSHIP, an Indiana limited partnership
("Landlord"), and UNIGRAPHICS SOLUTIONS INC., a Delaware corporation ("Tenant").
ARTICLE 1 - LEASE OF PREMISES
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Section 1.01. Basic Lease Provisions and Definitions.
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A. Leased Premises: A building to be constructed by Landlord containing the
Rentable Area set forth in Section 1.01(B) and having a street address of
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Building"),
and certain land consisting of approximately 8.742 acres (the "Land") upon
which the Building and other improvements are to be situated (the Land, the
Building and such other improvements are referred to herein as the "Leased
Premises"), including and subject to all easements, rights, privileges and
appurtenances now existing or which may hereinafter be granted by Landlord
in accordance with Section 5.03. A site plan of the Leased Premises and
legal description of the Land is attached hereto and made a part hereof as
Exhibit A.
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B. Rentable Area: Approximately 122,646 rentable square feet.
The Rentable Area of the Leased Premises and the Gross Building Area of
the Building shall be determined by and established in the final Shell
Plans, applying the Standard Method for Measuring Floor Area in Office
Buildings, ANSI/BOMA Z65.1996.
C. Minimum Annual Rent: *
Years 1 - 5 $1,759,684.00 per year
Years 6 - 10 $2,036,130.30 per year
D. Monthly Rental Installments: *
Months 1 - 60 $146,640.33 per month
Months 61 - 120 $169,677.52 per month
* To be adjusted upon completion of the Total Project (as defined in
Paragraph 2 of Exhibit B attached hereto and made a part hereof) and final
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reconciliation of the Total Project Cost (as defined in Section 2.03), in
accordance with Section 2.03. Landlord and Tenant shall thereupon enter into an
amendment of this Lease confirming the same.
E. Term: Ten (10) years
F. Commencement Date: Forty-five (45) days following the Substantial
Completion Date, as provided for and defined in Section 2.01;
G. Security Deposit: None.
H. Brokers: Duke-Weeks Realty Limited Partnership, representing Landlord.
Colliers ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, representing Tenant.
I. Permitted Use: General office purposes.
J. Shell Plans Approval Date: July 14, 2000
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K. Address for payments and notices as follows:
Landlord: Duke Construction Limited Partnership
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Senior Vice President-St. Louis Office
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
With Rental Payments to: Duke Construction Limited Partnership
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Tenant: Unigraphics Solutions Inc.
(Pre-Commencement Date) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Director of Real Estate
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
(Post-Commencement Date) Unigraphics Solutions, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Director of Real Estate
Section 1.02. Lease of Premises.
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Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the
Leased Premises under the terms and conditions herein set forth. Tenant shall be
the sole tenant of the Leased Premises, except for any assignees or subtenants
permitted under Article 11, subject to rights in respect of the Land of other
owners and tenants of the Riverport Business Park in accordance with the
easements, rights, privileges, and appurtenances now existing or which may
hereafter be granted by Landlord in accordance with Section 5.03.
ARTICLE 2 - TERM AND POSSESSION
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Section 2.01. Term.
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The term of this Lease (the "Term") shall be for the period of time set forth in
Section 1.01(E) and shall commence (the "Commencement Date") on the date which
is forty-five (45) days after the Substantial Completion Date, unless delayed by
a Tenant Delay (as defined in Exhibit B), in which case the Commencement Date
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shall be forty-five (45) days after the date on which the Substantial Completion
Date would have occurred but for any such Tenant Delay. The Leased Premises
shall be delivered to Tenant on the Substantial Completion Date and all terms
and conditions of this Lease will become effective as of such date, except for
the Term and payment of Minimum Annual Rent and Additional Rent, which shall
commence on the Commencement Date. The term "Substantial Completion Date" shall
mean the date on which: (i) the Shell Work and the Finish Work (as those terms
are defined in Exhibit B) are completed in accordance with Exhibit B-2 and
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Exhibit B-4, subject only to minor punch list items of work which do not
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substantially interfere with the Permitted Use, as evidenced by delivery of
"Certificates of Substantial Completion" (the form of which shall be consistent
with the then prevailing "Certificate of Substantial Completion" form published
by the American Institute of Architects) by Tenant's architect with respect to
the Finish Work, and Landlord's architect with respect to the Shell Work, but
excluding any work items to be performed by Tenant under the terms of this
Lease; and (ii) all required temporary occupancy permits have been received from
applicable local governmental authorities with respect to all work performed by
Landlord, but excluding any work items to be performed by Tenant under the terms
of this Lease.
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If the Substantial Completion Date occurs later than September 1, 2001 for any
reason other than a Tenant Delay or a Force Majeure Event (as that term is
defined in Section 15.03), Tenant shall be entitled to an abatement of the
Minimum Annual Rent in an amount equal to two (2) times the daily Minimum Annual
Rent for each calendar day that the Substantial Completion Date is delayed
beyond September 1, 2001. Such abatement of rent for the Leased Premises shall
commence on the Commencement Date and shall apply to the first applicable
monthly installments as such become due and continue until the total amount of
Minimum Annual Rent so abated is extinguished. Such rent abatement shall be
Tenant's sole remedy against Landlord for failing to deliver the Leased Premises
on or before September 1, 2001. Upon delivery of possession of the Leased
Premises to Tenant, Landlord and Tenant shall execute a letter of understanding
acknowledging: (i) the Substantial Completion Date; (ii) the Commencement Date,
(iii) the Rentable Area and the Gross Building Area of the Building, and (iv)
that Tenant has accepted the Leased Premises, subject to latent defects and
those punchlist items identified on the Certificates of Substantial Completion.
Section 2.02. Tenant's Existing Premises.
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The parties acknowledge that Tenant currently occupies certain premises located
at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Existing Premises") pursuant to a sub-sublease
dated January 1, 1998 and scheduled to expire on September 30, 2001 (the "Sub-
Sublease"), with Electronic Data Systems Corporation, a Delaware corporation
("EDS"), an affiliate of Tenant. Furthermore, the parties acknowledge that EDS
subleased the Existing Premises pursuant to that certain sublease dated November
1, 1991 (the "Sublease"), with ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Corporation, a Maryland
corporation ("MDC"). Furthermore, the parties acknowledge that MDC leased the
Existing Premises pursuant to that certain lease dated June 20, 1990 (the "Prime
Lease"), with ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Riverport Building Joint Venture, a Missouri
general partnership (the "Master Lessor"). Landlord agrees that in the event the
Commencement Date occurs on or before September 30, 2001 and Tenant remains
liable for rent under the Sub-Sublease, Landlord shall reimburse Tenant for its
rental obligations under the Sub-Sublease (including base rent and operating
expense obligations) for each calendar day that Tenant is obligated to pay rent
under both the Sub-Sublease and this Lease; provided, however, that Landlord's
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reimbursement obligation hereunder shall not exceed an aggregate of One Hundred
Sixty-Eight Thousand Seven Hundred Ninety-Six Dollars and Fourteen Cents
($168,796.14).
In the event the Commencement Date occurs later than September 30, 2001, for any
reason other than a Tenant Delay, Tenant shall be permitted to remain in the
Existing Premises after expiration of the Prime Lease, the Sublease and the Sub-
Sublease and until the date which is forty-five (45) days after the Substantial
Completion Date. Landlord, for itself and its affiliates, acknowledges and
agrees that any such holdover by Tenant shall not, in and of itself, constitute
a holdover under the Prime Lease or the Sublease or otherwise cause an extension
of the obligations or liabilities of MDC or EDS thereunder beyond September 30,
2001, except in respect of such obligations or liabilities which survive the
termination of the Prime Lease or the Sublease by the express terms thereof.
Accordingly, in respect of the relationship between the Landlord and MDC under
the Prime Lease and MDC and EDS under the Sublease, any such holdover by Tenant
shall not in any way affect the termination of the Prime Lease or the Sublease
on September 30, 2001. Tenant's occupancy of the Existing Premises shall be at
the rental rate (on a per diem basis) under the Sub-Sublease for the month
immediately prior to the expiration of the Sub-Sublease and subject to the other
terms and conditions of the Sub-Sublease (determined, solely for the purpose of
defining the relationship between Landlord and Tenant but in no way affecting
the obligations or liabilities of MDC or EDS, as if the Prime Lease and the
Sublease continued in full force and effect).
Section 2.03. Construction of Total Project and Total Project Cost.
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Landlord shall construct the Total Project in accordance with the provisions and
terms of Exhibit B. "Total Project Cost" shall refer to all costs and expenses
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reasonably and necessarily incurred in connection with the planning, designing,
constructing and delivery of the Total Project in accordance with the Shell
Plans and Specifications and Interior
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Plans and Specifications attached hereto and made a part hereof as Exhibit B-2
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and Exhibit B-4 respectively. An itemized statement of and an estimated amount
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(except for those items identified as "Fixed Cost Items") for each element of
the Total Project Cost, including "Allowance Items", "Variable Cost Items" and
"Fixed Cost Items", is attached hereto and made a part hereof as Exhibit B-1.
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Landlord guarantees that the price for the Shell Work (excluding the "Shell
Allowance Items", identified on Exhibit B-1) shall not exceed a guaranteed
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maximum price of Nine Million Six Hundred Sixty-Eight Thousand Three Hundred
Forty-One Dollars ($9,668,341.00) (the "GMP"), unless Tenant changes the scope
of the Shell Work pursuant to Change Orders (as that term is defined in Exhibit
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B). Landlord does not guarantee the price of any of the Allowance Items or any
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Variable Cost Items identified on Exhibit B-1 and, consequently, Tenant's
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Minimum Annual Rent shall be subject to increase in the event at the completion
of the Total Project, the cost of any Allowance Items or any Variable Cost Items
exceed the estimated amounts identified on Exhibit B-1. All work and
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construction of the Total Project related to any Variable Cost Items, Allowance
Items, or the GMP shall be done on an open-book basis.
Tenant's Minimum Annual Rent for Lease Years 1 through 5 shall be based on the
Total Project Cost (excluding those Allowance Items or Variable Cost Items for
which Tenant is obligated to reimburse Landlord directly pursuant to the terms
of Paragraphs 6 and 7 of Exhibit B) multiplied by the project capital cost
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percentage of 9.76%. Tenant's Minimum Annual Rent for Lease Years 6 through 10
shall be increased by multiplying Tenant's Minimum Annual Rent for Lease Years 1
through 5 by 15.71%.
For example if the Total Project Cost is $18,029,550.00, Tenant's Minimum Annual
Rent and Monthly Rental Installments during the Term shall be those amounts set
forth in Sections 1.01 (C) and (D) herein. However, Tenant's Minimum Annual
Rent shall be subject to adjustment based upon the costs and expenses actually
incurred by Landlord, as expressly provided herein. If, at completion of the
Shell Work, the Shell Work is less than the GMP, the entire savings from any
Shell Allowance Items identified on Exhibit B-1 and fifty percent (50%) of any
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savings on any Variable Cost Items identified on Exhibit B-1 shall be credited
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to Tenant as a reduction in Tenant's Minimum Annual Rent. If, at completion of
the Total Project, the cost of any Variable Cost Items identified on Exhibit B-1
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are less than the amount estimated on Exhibit B-1, such savings from the
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Variable Cost Items shall be shared equally by Landlord and Tenant with Tenant's
share being credited as a reduction in Minimum Annual Rent. To the extent there
may exist any redundancy of or overlap between any Variable Cost Items or
Allowance Items on Exhibit B-1. Tenant shall not be entitled to any duplicate
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credit. The total savings to be credited as a reduction in Minimum Annual Rent,
if any, shall be multiplied by the project capital cost percentage of 9.76%, and
the product shall be deducted from the Minimum Annual Rent applicable for Lease
Years 1-5. For example, if the total savings to which Tenant is entitled to
receive a credit equals $100,000, Minimum Annual Rent for Lease Years 1-5 shall
decrease by $9,760. Likewise, Tenant's Minimum Annual Rent shall be increased
as a result of those costs in excess of any Allowance Items or Variable Cost
Items (excluding those Allowance Items or Variable Cost Items for which Tenant
is obligated to reimburse Landlord directly pursuant to the terms of Paragraphs
6 and 7 of Exhibit B) shall be multiplied by the project capital cost percentage
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of 9.76%, and the product shall be added to the Minimum Annual Rent for Lease
Years 1-5.
Section 2.04. Early Occupancy By Tenant.
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Landlord shall allow Tenant, at Tenant's option, access to the Leased Premises
at least forty-five (45) days prior to the Substantial Completion Date in
accordance with the Project Schedule attached hereto and made a part hereof as
Exhibit B-3, without any liability for rent, to perform interior decoration
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work, to install telephone and computer systems, furniture, fixtures, security
and audio visual systems, and to prepare the Leased Premises for Tenant's
occupancy; provided, however, that Tenant shall notify Landlord of any proposed
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entry and secure the approval of Landlord (which approval shall not be
unreasonably withheld, conditioned or delayed) prior to such entry so as not to
unreasonably interfere with the progress of the Shell Work or the Finish Work
being carried on at the time; and provided further, however, that Landlord shall
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have no responsibility or liability whatsoever for any loss or damage to any of
Tenant's leasehold
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improvements, fixtures, equipment or any other materials installed or left by
Tenant in the Leased Premises; except as provided in Article 9. Landlord and its
subcontractors will exercise commercially reasonable efforts to cooperate with
Tenant during this early occupancy period to accommodate Tenant's work in the
Leased Premises.
Section 2.05. Surrender of the Premises.
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Upon the expiration or earlier termination of this Lease, Tenant shall
immediately surrender the Leased Premises to Landlord in broom-clean condition
and in good order, condition and repair, subject to ordinary wear and tear and
the provisions of Articles 8 and 10 and Sections 7.02 and 14.07. Tenant shall
remove its personal property, including, but not limited to, any emergency
generators and associated emergency power equipment, computer equipment, wiring
and cabling (including above ceiling) and trade fixtures in the Leased Premises,
at its sole cost and expense. Tenant shall, at its expense, promptly repair any
damage caused by any such removal, and shall restore the Leased Premises to the
condition existing upon the Commencement Date, subject to ordinary wear and tear
and the provisions of Articles 8 and 10 and Sections 7.02 and 14.07. All such
personal property referenced above and trade fixtures which are not removed
within ten (10) days following Landlord's written demand therefor (after the
expiration or earlier termination of this Lease) shall be conclusively deemed to
have been abandoned by Tenant, and Landlord shall be entitled to dispose of such
property at Tenant's cost without incurring any liability to Tenant. The
provisions of this Section shall survive the expiration or earlier termination
of this Lease.
Section 2.06. Holding Over.
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If Tenant retains possession of the Leased Premises after the expiration or
earlier termination of this Lease, Tenant shall become a tenant from month to
month at one hundred fifty percent (150%) of the Monthly Rental Installment for
the Leased Premises in effect upon the date of such expiration or earlier
termination, and otherwise upon the terms, covenants and conditions herein
specified, so far as applicable. Acceptance by Landlord of rent after such
expiration or earlier termination shall not result in a renewal of this Lease.
Tenant shall vacate and surrender the Leased Premises to Landlord upon Tenant
being given thirty (30) days prior written notice from Landlord to vacate,
whether or not said notice is given on the date that rent is due. This Section
shall neither constitute a consent by Landlord to any holding over by Tenant
upon the expiration or earlier termination of this Lease nor limit Landlord's
remedies in such event.
ARTICLE 3 - RENT
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Section 3.01. Minimum Annual Rent.
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Tenant shall pay to Landlord the Minimum Annual Rent in the Monthly Rental
Installments in advance, without deduction or offset, except as otherwise
expressly set forth in this Lease, beginning on the Commencement Date and,
thereafter, on or before the first day of each and every calendar month during
the Term. The Monthly Rental Installments for partial calendar months shall be
prorated on the basis of the total number of days in the applicable calendar
month.
Section 3.02. Additional Rent Defined Terms.
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(a) "Operating Expenses" shall mean the amount of all of Landlord's
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costs and expenses paid or incurred in operating, repairing, replacing (subject
to the limits on pass-through of the cost of the capital improvements set forth
below) and maintaining the Leased Premises in good condition and repair
consistent with a first class office building for a particular calendar year,
including, by way of illustration and not limitation, all Real Estate Taxes (as
hereinafter defined in this Section); insurance premiums and commercially
reasonable deductibles for insurance coverage; water, sewer, electrical and
other utility charges other than the separately billed utility charges paid by
Tenant pursuant to this Lease; service and other charges incurred in the repair,
replacement, operation and maintenance of the elevators and the heating,
ventilation and air-conditioning system; charges for cleaning and other
janitorial services (subject to
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Tenant's right to contract directly with third parties for janitorial services);
charges for window washing with reasonable frequency (no less than two (2) times
per calendar year); tools and supplies used for the maintenance, repair and
operation of the Leased Premises (as reasonably allocated by Landlord to the
extent such tools and supplies are used at other properties); repair costs,
landscape maintenance costs, security services, license, permits and inspection
fees, management fees (not to exceed three percent (3%) per annum in the
aggregate of the Minimum Annual Rent and Operating Expenses (exclusive of the
management fee collected for the Leased Premises); and the reasonable allocation
of the reasonable costs and expenses incurred by Landlord for hiring and
employment of all persons to the extent such persons are engaged in the
operation and maintenance of the Leased Premises, including, but not limited to,
wages, salaries and benefits (collectively referred to herein as "administrative
fees"); general maintenance and repair of the driveways, parking lots and
sidewalk areas (including snow and ice removal), landscaped areas, and lighting;
lamp replacement; costs for maintenance of the exterior of the Building and
Leased Premises, including landscaping, painting and trash removal; owners
association assessments to which the Leased Premises are subject pursuant to the
First Revised and Restated Riverport Project Trust Indenture, City of Maryland
Heights, County of St. Louis, State of Missouri recorded in Book 8191, Page 390
of the Office of the Recorder of Deeds for St. Louis County, Missouri, and all
subsequent amendments thereto and or any future restrictions or covenants placed
or imposed upon the Leased Premises (the "CC&Rs"). Operating Expenses shall
include the cost of capital improvements and equipment or capital repairs and
replacements and other capital items only to the extent that such capital
improvements are made for the purpose of reducing Operating Expenses or
complying with Laws (as defined in Paragraph 1 of Exhibit B) promulgated after
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the Commencement Date. The cost of any such capital improvement shall be
amortized over the expected useful life of such capital improvement (as
determined in accordance with consistently applied accounting principles), which
amortized amount shall be included in Operating Expenses, but, with respect to
capital improvements made for the purpose of reducing Operating Expenses, only
to the extent that such amortized amount does not exceed the actual cost savings
for such capital improvement for that particular calendar year.
Operating Expenses shall not include the following items:
(i) Wages, salaries and fringe benefits paid to officers or
executive personnel of Landlord in their capacities as officers
or executives;
(ii) Wages, salaries and fringe benefits paid to employees of
Landlord to the extent such employees are not engaged in the
operation or management of the Leased Premises;
(iii) Franchise or partnership taxes, gross receipts taxes, income
taxes, inheritance taxes or any similar taxes assessed against
Landlord;
(iv) Amounts (including real estate brokerage and leasing
commissions) paid for legal, arbitration, accounting, brokerage
or other professional services in connection with the Leased
Premises;
(v) Interest, amortization and other charges paid with respect to
mortgages or other loans and other financing or refinancing
costs;
(vi) Rent payable under any ground lease;
(vii) Depreciation, amortization and other non-cash charges, except
for amortization of costs of capital improvements as is
expressly permitted above;
(viii) Fines or penalties incurred due to violation by Landlord of any
Laws;
(ix) Costs of removal or remediation of any Hazardous Substances
considered to be detrimental to the health and safety of the
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occupants of the Leased Premises, without limiting Tenant's
responsibility for certain costs and expenses under Article
14;
(x) Marketing and advertising costs;
(xi) Expenses for which and to the extent Landlord is or will be
reimbursed by insurance proceeds or condemnation awards;
(xii) Costs of replacement of the mechanical and/or electrical
systems servicing the Building (including heating,
ventilating and air conditioning) or replacement of the roof,
exterior walls, windows or elevators of the Building, except
that such costs shall be passed through to Tenant as
Operating Expenses in the event (a) such replacement is made
necessary by the negligence, misuse, or default of Tenant,
subject to Article 9 or (b) such replacement is a capital
improvement expressly permitted to be included as an
Operating Expense by the last two grammatical sentences of
the first grammatical paragraph of this Section 3.02(a).
(xiii) Costs of repair, maintenance, or replacement of any
superstructure items (herein defined as and limited to the
Building's structural steel, concrete floor slabs, and
concrete foundation), except (a) if such repair, maintenance,
or replacement is made necessary by the negligence, misuse,
or default of Tenant, subject to Article 9 or (b) that such
costs are expressly permitted to be included as an Operating
Expense by the last two grammatical sentences of the first
grammatical paragraph of this Section 3.02(a);
(xiv) Costs incurred due to violations by Landlord of the terms or
conditions of this Lease;
(xv) Landlord's general overhead, except as it directly relates to
the management and operation of the Leased Premises;
(xvi) Costs for sculptures, paintings or other objects of art;
(xvii) Penalties resulting from late payments by Landlord;
(xviii) Any expense for which and to the extent Landlord is
compensated through agreements of indemnity or surety bonds
or guaranties;
(xix) Any costs, fines or penalties incurred due to actual or
alleged violations by Landlord of any Laws;
(xx) Costs, including costs for capital improvements, associated
with the repair of any defects relating to the initial
construction of the Total Project covered by Landlord's
warranties under this Lease or by any guarantees or
warranties by Landlord or given for Landlord's benefit
pursuant to Exhibit B;
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(xxi) The amount of any judgment rendered against Landlord, except
for any judgment relating to the operation, maintenance,
repair, or replacement of the Leased Premises;
(xxii) Amortization of capital improvements, except as expressly
permitted by the last two grammatical sentences of the first
grammatical paragraph of this Section 3.02(a);
(xxiii) Any cost for which Landlord is responsible under this Lease;
and
(xxiv) Costs of construction and repair of the cross-access and
ingress/egress easements identified on Exhibit A which are
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necessary to repair any damage caused by Landlord to such
access
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roads during construction on any land which is part of the
Riverport Business Park.
(b) "Real Estate Taxes" - shall mean any form of real estate tax or
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assessment or service payments in lieu thereof, and any license fee, commercial
rental tax, improvement bond or other similar charge or tax (other than
inheritance, personal income or estate taxes) imposed upon the Leased Premises
(or against Landlord's business of leasing the Leased Premises after the
Commencement Date) by any authority having the power to so charge or tax
(provided that Real Estate Taxes shall not include impact fees, except for those
arising from Tenant requested changes to the Leased Premises), together with
costs and expenses of contesting the validity or amount of Real Estate Taxes,
which costs, at Landlord's option, may be calculated as if such contest had been
performed on a contingent fee basis (whether charged by Landlord's counsel or
representative; provided, however, that such fees shall be reasonably comparable
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to the fees charged for similar services by others not affiliated with Landlord,
but in no event shall such fees exceed thirty three percent (33%) of the actual
tax savings). Notwithstanding the foregoing, Tenant shall be responsible for
Landlord's costs and expenses of contesting the validity or amount of Real
Estate Taxes only if and to the extent that Landlord is successful in securing a
reduction in Real Estate Taxes. In the event any contest in the validity or
amount of Real Estate Taxes results in a refund to Landlord of any amount of
Real Estate Taxes previously charged to Tenant under this Lease, Landlord shall
credit the amount of such refund toward the next Monthly Rental Installment and
the next monthly estimated Operating Expense payment until such refund is
credited to Tenant in full (or remit such amount in cash to Tenant in the event
that this Lease shall have terminated).
Landlord covenants and agrees to pay, before any fine, penalty, interest or cost
may be added thereto for the nonpayment thereof, all Real Estate Taxes. If,
pursuant to any Laws, any Real Estate Taxes are payable or may, at the option of
the taxpayer be paid in installments (whether or not interest shall accrue on
the unpaid balance of such Real Estate Taxes), Landlord shall pay the same,
together with any accrued interest on the unpaid balance of such Real Estate
Taxes, in installments as the same respectively become payable and before any
fine, penalty, interest or cost may be added thereto for the nonpayment of any
such installment and interest. Operating Expenses for a given calendar year (or
partial calendar year) shall include only such installments and accrued interest
for such calendar year (or partial calendar years).
Section 3.03 Payment of Additional Rent.
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In addition to the Minimum Annual Rent specified in this Lease, Tenant shall pay
to Landlord as "Additional Rent" for the Leased Premises, in each calendar year
or partial calendar year, as the case may be, during the Lease Term, an amount
equal to the Operating Expenses for such calendar year or partial calendar year,
as the case may be. The Operating Expenses for each calendar year shall be
reasonably estimated by Landlord annually, and written notice thereof shall be
given to Tenant prior to the Commencement Date, and, thereafter, prior to the
beginning of each calendar year. Commencing on the Commencement Date, Tenant
shall pay to Landlord each month, at the same time that the Monthly Rental
Installment is due, an amount equal to one-twelfth (1/12) of the estimated
Operating Expenses. If Real Estate Taxes or the costs of utility or janitorial
services increase during a calendar year, Landlord may increase the estimated
Operating Expenses during such calendar year by giving Tenant written notice to
that effect, and, thereafter, Tenant shall pay to Landlord, in each of the
remaining months of such calendar year, an amount equal to the amount of such
increase in the estimated Operating Expenses divided by the number of months
remaining in such calendar year. Within sixty (60) days after the end of each
calendar or partial calendar year, as the case may be, Landlord shall prepare
and deliver to Tenant a detailed reconciliation statement showing the actual
Operating Expenses for such calendar year or (partial calendar year). Within
thirty (30) days after receipt of such reconciliation statement, Tenant shall
pay to Landlord any deficiency between the actual amount owed and the estimated
payments made by Tenant during such calendar year (or partial calendar year). In
the event of an overpayment by
9
Tenant of the Operating Expenses for a given calendar year (or partial calendar
year), Landlord shall credit the amount of such overpayment toward the next
Monthly Rental Installment and the next monthly estimated Operating Expense
payment until such overpayment is recovered by Tenant in full (or remit such
amount in cash to Tenant in the event that this Lease shall have terminated).
Section 3.04. Late Charges.
---------------------------
Tenant acknowledges that Landlord shall incur certain additional unanticipated
administrative and legal costs and expenses if Tenant fails to timely pay any
payment required hereunder. Therefore, in addition to the other remedies
available to Landlord hereunder, if any payment required to be paid by Tenant to
Landlord hereunder shall become overdue beyond any grace period or beyond any
notice and grace period provided for in this Lease, such unpaid amount shall
bear interest from the date such unpaid amount became due and payable to the
date of payment at the prime rate (as reported in The Wall Street Journal) of
-----------------------
interest ("Prime Rate"), plus six percent (6%) per annum.
Section 3.05. Books and Records; Audit.
---------------------------------------
Tenant shall have the right to audit (or hire an independent consultant to
audit) Landlord's books and records pertaining to Operating Expenses for any
calendar year (or partial calendar year) within one hundred eighty (180) days
after receipt of a reconciliation statement therefor so as to verify the
accuracy of such Operating Expenses. Any information obtained by Tenant pursuant
to such audit shall be kept confidential by Tenant, except that Tenant may
disclose such information (a) to Tenant's lenders or a prospective assignee or
sublessee, (b) in litigation between Landlord and Tenant, (c) if required by
court order, and/or (d) to Tenant's professionals and consultants, such as
lawyers, accountants and management personnel. If such audit accurately
discloses (i) that any item was improperly included or excluded in the
calculation of Operating Expenses or (ii) an error in the calculation of
Operating Expenses, Landlord shall either (x) credit the amount of any such
overcharge toward the next Monthly Rental Installment and the next monthly
estimated Operating Expense payment until such overpayment is recovered by
Tenant in full or (y) ▇▇▇▇ Tenant for any undercharge.
ARTICLE 4 - SECURITY DEPOSIT
----------------------------
A security deposit shall not be required under this Lease.
ARTICLE 5 - OCCUPANCY AND USE
-----------------------------
Section 5.01. Use.
------------------
The Leased Premises shall be used by Tenant for the Permitted Use and for no
other purposes without the prior written consent of Landlord, which consent
shall not be unreasonably withheld, conditioned or delayed.
Section 5.02. Covenants of Tenant Regarding Use.
------------------------------------------------
Tenant shall (i) use and maintain the Leased Premises and conduct its business
thereon in a safe, careful, reputable and lawful manner, (ii) comply with the
CC&Rs and all Laws, now in force or which may hereafter be in force, including,
without limitation, those which shall impose upon Landlord or Tenant any duty
with respect to or triggered by a change in the use or occupation of, or any
improvement or alteration to, the Leased Premises; provided, however, that any
-------- -------
amendments to the CC&Rs which increase Tenant's obligations or abrogate Tenant's
rights, as such obligations and rights are expressed in the CC&Rs as of the date
of this Lease, shall not be binding on Tenant unless and until Tenant shall have
received notice of the same, (iii) comply with the Rules and Regulations
attached hereto and made a part hereof as Exhibit C, as such Rules and
---------
Regulations may be reasonably modified from time to time by Landlord, upon
reasonable written notice to Tenant. Tenant shall not do or permit anything to
be done in or about the Leased Premises which will in any way obstruct or
interfere with the rights of other
10
tenants or occupants of the Riverport Business Park or injure or unreasonably
annoy them. Tenant shall not use the Leased Premises, or allow the Leased
Premises to be used, for any purpose or in any manner which would invalidate any
policy of insurance now or hereafter carried on the Leased Premises or increase
the rate of premiums payable on any such insurance policy, unless Tenant
reimburses Landlord for any increase in premiums charged.
Section 5.03. Landlord's Rights Regarding Use.
----------------------------------------------
In addition to the rights specified elsewhere in this Lease, Landlord shall have
the following rights regarding use of and access to the Leased Premises: (a)
Landlord shall have the right at any time to install and maintain directional
signage, and monument signage on the Land as depicted on Exhibit A and during
---------
the last twelve (12) months of the Term, leasing advertisement signs for the
Leased Premises; (b) Landlord shall have the right at any time to grant
easements, rights, and privileges (but not cross parking easements) to others in
such manner as it deems necessary or proper in connection with the development
and operation of the Riverport Business Park; provided, however, Landlord's
-------- -------
exercise of such right shall not materially diminish Tenant's rights under the
Lease, including its access to the Leased Premises or the Building; (c)
Landlord, its employees and agents and any mortgagee of the Building shall have
the right to enter any part of the Leased Premises at reasonable times upon
reasonable notice, except in the event of an emergency, where notice shall be
appropriate under the circumstances, for the purposes of examining or inspecting
the same, showing the same to prospective purchasers, mortgagees or tenants and
making such repairs, alterations or improvements to any part of the Leased
Premises, as Landlord may deem reasonably necessary or desirable; provided,
however, that Landlord shall incur no liability to Tenant for such entry, except
as may be otherwise expressly provided in Article 9, nor shall such entry
constitute an eviction of Tenant or a termination of this Lease, or entitle
Tenant to an abatement of rent except as may be otherwise expressly provided
herein.
ARTICLE 6 - UTILITIES AND OTHER BUILDING SERVICES
-------------------------------------------------
Section 6.01. Services to be Provided by Landlord.
--------------------------------------------------
(a) Landlord shall furnish to Tenant the following utilities and
other Building services during the Lease Term:
(i) Heating, ventilation and air-conditioning consistent with
the specifications set forth in Exhibit B-2;
-----------
(ii) Electrical current for lighting, personal computer and
office equipment usage consistent with the per square foot wattage set
forth in Exhibit B-2;
-----------
(iii) Water for lavatory, drinking and other purposes relating
to the occupancy of the Leased Premises;
(iv) Automatic elevator service on a twenty-four (24) hour per
day basis;
(v) Cleaning and janitorial service in the Building on Monday
through Friday of each week, except legal holidays; provided, however,
Tenant shall be responsible for carpet cleaning other than routine
vacuuming;
(vi) Washing of windows at intervals reasonably established by
Landlord (but not less often than two (2) times per calendar year);
(vii) Replacement of all lamps, bulbs, starters and ballasts in
the Building and in the parking and landscaped areas of the Leased
Premises, as required from time to time;
11
(viii) Cleaning and maintenance of the Leased Premises, including
the removal of rubbish, ice and snow;
(ix) Repair and maintenance to the extent specified elsewhere
in this Lease; and
(x) Lavatory supplies and other supplies necessary in the
maintenance and operation of a first class office building.
In the event of utility deregulation, Landlord may choose the utility service
provider. Such provider must be licensed and reputable and shall be properly
insured and financially capable of covering uninsured damage. Charges for
utilities and services provided by Landlord, if any, shall not exceed the
charges that would have been payable if such utilities and services had been
directly billed by the utilities or service providers to Tenant. Tenant shall
not incur any cost of installation or materials associated with such utility
service provider's provision of its services. In the event that Landlord wishes
to utilize a utility service provider other than the utility service provider
serving the Leased Premises as of the Commencement Date, no such utility service
provider shall be permitted to provide service to Tenant or to install its
utility lines, feeders, risers, poles, wires, conduits, pipes, equipment or
other machinery on or within the Building without obtaining the prior written
consent of Tenant, which consent shall not be unreasonably withheld.
Section 6.02. Additional Services.
-----------------------------------
If Tenant requests utilities or building services in addition to those
identified above, then Landlord shall use reasonable efforts to furnish Tenant
with such additional utilities or building services. The costs thereof shall be
borne by Tenant, who shall reimburse Landlord monthly for the same as Additional
Rent at the same time Monthly Rental Installments and other Additional Rent are
due.
If any lights, density of staff, machines or equipment used by Tenant in the
Leased Premises materially affect the temperature otherwise maintained by the
air-conditioning system of the Building or generate substantially more heat in
the Building than that which would normally be generated by that typically used
by other tenants in comparable office buildings, then Landlord shall, following
consultation with Tenant and a reasonable opportunity for Tenant to reduce the
density of its staff or reconfigure or replace such lights, machines, or
equipment, have the right to install any machinery or equipment which Landlord
considers reasonably necessary in order to address such additional cooling
needs, including equipment which modifies the air-conditioning system of the
Building. Prior to such installation, Landlord shall provide, for Tenant's
approval, an estimate of the cost of such installation. All costs reasonably
expended by Landlord to install any such machinery and equipment and any
additional costs of operation and maintenance in connection therewith shall be
borne by Tenant, who shall reimburse Landlord for the same as provided in this
Section.
Section 6.03. Interruption of Services.
---------------------------------------
Landlord shall not be liable in damages or otherwise for any failure or
interruption of any utility service and no such failure or interruption shall
entitle Tenant to terminate this Lease or withhold sums due hereunder.
Notwithstanding anything in this Lease to the contrary, Landlord shall use
commercially reasonable efforts to promptly restore utility service and in the
event restoration of service is within Landlord's control and Landlord fails to
exercise commercially reasonable efforts to restore such service within a
reasonable time, thereby causing all or a portion of the Leased Premises to be
rendered untenantable (meaning that Tenant is unable to use such space in the
normal course of its business) by Tenant for the Permitted Use for more than ten
(10) consecutive days after notice from Tenant to Landlord that such utility or
service has been interrupted, Minimum Annual Rent and Additional Rent shall
equitably ▇▇▇▇▇ (based upon the portion of the Leased Premises then rendered
untenantable) on a per diem basis for each day after such ten (10) day period
during which the Leased Premises remain untenantable.
12
ARTICLE 7 - REPAIRS, MAINTENANCE AND ALTERATIONS
------------------------------------------------
Section 7.01. Repair and Maintenance of Leased Premises.
--------------------------------------------------------
Subject to Section 7.02 and except for any repairs made necessary by the
negligence, misuse, or default of Tenant, its employees, agents, customers and
invitees (except to the extent the cost of such repairs is covered by Landlord's
Special Extended Coverage Insurance), Landlord shall maintain and otherwise make
all necessary repairs to and replacements of the roofs, parking lots, exterior
walls, exterior doors, windows, elevators and heating, ventilating and air
conditioning systems (except any supplemental HVAC systems required by Tenant),
and Landlord shall keep the Building and the Leased Premises in a first class
manner and safe, clean and neat condition and in compliance with all legal
requirements relating to the physical condition of the Leased Premises (except
those arising from Tenant's specific use of the Leased Premises). Landlord shall
also be responsible for the performance of the maintenance, repair and
replacement of any superstructure components of the Building, including the
structural steel, the concrete floor slabs and the concrete foundation.
Section 7.02. Repair and Maintenance of Leased Premises.
--------------------------------------------------------
Subject to the provisions of Section 7.01, Article 8 and Article 10, and subject
to ordinary wear and tear and damage which Tenant is not obligated to repair, as
provided elsewhere in this Lease, Tenant shall keep the Leased Premises in good
order, condition and repair.
Section 7.03. Alterations.
--------------------------
Tenant shall not permit alterations in or to the Leased Premises unless and
until the plans for such alterations have been approved by Landlord in writing,
which approval shall not be unreasonably withheld, conditioned or delayed with
respect to non-structural and non-mechanical alterations. Notwithstanding the
foregoing, Tenant may make interior, non-structural alterations to the Building
aggregating no more than One Hundred Thousand Dollars ($100,000.00) in a
calendar year during the Term, provided that prior to making any such
alterations, Tenant shall give Landlord ten (10) business days prior written
notice thereof, along with copies of all plans and specifications relating
thereto. Landlord may require Tenant to remove any such alterations and restore
the Leased Premises upon termination of this Lease, but only as stipulated in
writing by Landlord and Tenant at the time that Tenant submits the plans for
such alterations to Landlord for approval, or, in the case of such interior,
non-structural alterations to the Building aggregating no more than One Hundred
Thousand Dollars ($100,000.00) in cost in a calendar year during the Term, at
the time that Tenant gives Landlord notice thereof. Landlord and Tenant agree
that all alterations to the Leased Premises shall be performed by Landlord,
unless Landlord elects in writing not to perform such alterations. Landlord
shall serve as general contractor or construction manager with respect to such
alterations and shall receive a fee in an amount equal to a minimum of eight
percent (8%) of the actual cost of such alterations, but subject to such minimum
eight percent (8%) fee, in no event shall such fee exceed the then prevailing
market rate for such fees. No person shall be entitled to any lien derived
through or under Tenant for any labor or material furnished to the Leased
Premises, and nothing in this Lease shall be construed to constitute a consent
by Landlord to the creation of any lien. If any lien is filed against the Leased
Premises for work claimed to have been done for or material claimed to have been
furnished to Tenant, Tenant shall cause such lien to be discharged of record
within thirty (30) days after filing. Tenant shall indemnify Landlord from all
costs, losses, expenses and reasonable attorneys' fees in connection with any
construction or alteration and any related lien.
ARTICLE 8 - CASUALTY
--------------------
Section 8.01. Casualty.
-----------------------
In the event of total or partial destruction of the Building or the Leased
Premises by fire or other casualty, Landlord agrees to promptly restore and
repair same; provided, however, Landlord's obligation hereunder shall be limited
-------- -------
to the reconstruction of such of
13
the tenant improvements as were originally required to be made by Landlord
within the scope of the Total Project as identified on Exhibits B-2 and B-4.
------------ ----
Minimum Annual Rent and Additional Rent shall equitably ▇▇▇▇▇ during the time
that the Leased Premises or any part thereof are unusable because of any such
damage. Notwithstanding the foregoing, (i) if the Leased Premises are destroyed
to the extent that they cannot be repaired or rebuilt within one hundred eighty
(180) days from the date of such destruction; or (ii) if the Building is
destroyed by a casualty which is not covered by the insurance required
hereunder, or, if covered, such insurance proceeds are insufficient to rebuild
the Building, then, in the case of a clause (i) casualty, then either Landlord
or Tenant may, or, in the case of a clause (ii) casualty, then Landlord may,
upon thirty (30) days written notice to the other party, terminate this Lease
with respect to matters thereafter accruing.
Section 8.02. Property Insurance to be Carried by Landlord.
-----------------------------------------------------------
Commencing on the Substantial Completion Date, Landlord shall keep the Building
(but not Tenant's personal property), and all fixtures therein, insured for the
benefit of Landlord and Tenant, under a policy of Special Extended Coverage
Insurance (formerly known as "all risks") in an amount equivalent to one hundred
percent (100%) of the then full insurable replacement cost thereof (excluding
foundations, footings and excavation land). Landlord shall also carry earthquake
and flood (if the Leased Premises is located in a flood zone area) insurance
policies, written separately or combined under a "Difference in Conditions"
policy and such other coverage as may be deemed reasonably necessary by Landlord
and/or Tenant, provided that such other coverage is obtainable, and provided
further that such other coverage is such as is customarily obtained with respect
to buildings similar in construction, general location, use and occupancy to the
Leased Premises. Such insurance may include a deductible amount or self-
insurance retentions. Such replacement cost shall be determined from time to
time, but not less frequently than once in any two (2) year period by Landlord's
insurer.
ARTICLE 9 - INSURANCE
---------------------
Section 9.01. Tenant's Insurance.
---------------------------------
Tenant shall carry insurance issued by one or more insurance companies
reasonably acceptable to Landlord with the following minimum coverages:
(a) Workers' Compensation Insurance: minimum statutory amount.
(b) Commercial General Liability Insurance: not less than Three
Million Dollars ($3,000,000) per occurrence and annual aggregate for both bodily
injury and property damage.
(c) Special Extended Coverage Insurance (formerly known as "all
risks") for the full cost of replacement of Tenant's personal property.
Each insurance policy (or an endorsement thereto) shall name Landlord and its
managing agent and mortgagee, if any, as additional insureds, as their interests
may appear. Each policy shall provide that it may not be canceled on less than
thirty (30) days prior written notice to Landlord. Tenant shall furnish Landlord
with certificates of insurance evidencing all required coverages under this
Section on or before the Substantial Completion Date. If Tenant fails to carry
such insurance and furnish Landlord with such certificates of insurance within a
reasonable time after a written request to do so, Landlord may obtain such
insurance and collect the cost thereof from Tenant.
Section 9.02 Waiver of Claims and Waiver of Subrogation.
---------------------------------------------------------
Anything in this Lease to the contrary notwithstanding, each of Landlord and
Tenant hereby waives any and all rights of recovery, claims, actions or causes
of action against the other party, or such other party's employees, agents or
contractors, for any loss or damage to the Leased Premises, to the Building and
to any personal property of the other party, arising from any cause that (i)
would be insured against under the terms of any
14
insurance required to be carried hereunder or (ii) is insured against under the
terms of any insurance actually carried, regardless of whether such insurance is
required to be carried hereunder. Each of Landlord and Tenant agrees that in the
event of any such loss or damage, it shall look solely to its insurance for
recovery. The effect of such waiver is not limited by the amount of such
insurance actually carried or required to be carried, to the actual proceeds
received after a loss or to any deductible applicable thereto, and either
party's failure to carry insurance required under this Lease shall not
invalidate such waiver. The foregoing waiver shall apply regardless of the cause
or origin of any such claim, including, without limitation, the fault or
negligence of either party or such party's employees, agents or contractors.
Each party shall cause the insurance company that issues property insurance to
such party to waive any rights of subrogation with respect to such property
insurance and shall cause the insurance company to issue an endorsement to
evidence compliance with such waiver of subrogation. Each of Landlord and Tenant
shall bear the costs associated with obtaining such waiver of subrogation from
its insurance company. This provision shall survive the expiration or earlier
termination of this Lease.
Section 9.03. Tenant's Responsibility.
-------------------------------------
Subject to Section 9.02, Tenant shall protect, indemnify and hold Landlord
harmless from any and all liability for any loss of or damage or injury to any
person (including death resulting therefrom) or property occasioned by or
arising out of the negligence or intentional misconduct of Tenant or its
employees or agents, except for any loss or damage covered by Landlord's Special
Extended Coverage Insurance as provided in Section 8.02; and Tenant hereby
releases Landlord from any and all liability for the same. Tenant's obligation
to indemnify Landlord hereunder shall include the duty to defend against any
claims asserted by reason of such loss, damage or injury and to pay any
judgments, settlements, costs, fees and expenses, including reasonable
attorneys' fees, incurred in connection therewith. This provision shall survive
the expiration or earlier termination of this Lease.
Section 9.04. Landlord's Responsibility.
---------------------------------------
Subject to Section 9.02, Landlord shall protect, indemnify and hold harmless
Tenant from any and all liability for any loss of or damage or injury to any
person (including death resulting therefrom) or property occasioned by or
arising out of the negligence or intentional misconduct of Landlord or its
employees or agents, except for any loss or damage covered by Tenant's Special
Extended Coverage Insurance as provided in Section 9.01; and Landlord hereby
releases Tenant from any and all liability for the same. Landlord's obligation
to indemnify Tenant hereunder shall include the duty to defend against any
claims asserted by reason of such loss, damage or injury and to pay any
judgments, settlements, costs, fees and expenses, including reasonable
attorneys' fees, incurred in connection therewith. This provision shall survive
the expiration or earlier termination of this Lease. Landlord shall carry
commercial general liability insurance issued by one or more insurance companies
reasonably acceptable to Tenant with a minimum coverage of not less than Three
Million Dollars ($3,000,000) per occurrence and annual aggregate for both bodily
injury and property damage.
ARTICLE 10 - EMINENT DOMAIN
---------------------------
If all or any substantial part of the Leased Premises shall be acquired by the
exercise of eminent domain, or by private purchase in lieu thereof, Landlord may
terminate this Lease by giving written notice to Tenant on or before (but
effective as of) the date possession thereof is so taken. If all or any part of
the Leased Premises shall be acquired by the exercise of eminent domain or any
private purchase in lieu thereof so that the Leased Premises shall become
unusable by Tenant for the Permitted Use, Tenant may terminate this Lease by
giving written notice to Landlord on or before (but effective as of) the date
possession thereof is so taken. If a part of the Leased Premises is taken but
the remaining part is tenantable and adequate for the Permitted Use, or if
Tenant has not otherwise terminated its Lease in accordance with this Section,
then this Lease shall be
15
terminated as to the part taken or conveyed as of the date Tenant surrenders
possession; Landlord shall make such repairs, alterations, and improvements as
may be necessary to render the part not taken or conveyed tenantable to the
extent the condemnation award proceeds received by Landlord are sufficient, and
the rent shall be reduced in proportion to the part of the Leased Premises so
taken or conveyed. All damages awarded shall belong to Landlord; provided,
--------
however, that Tenant may recover any damages suffered or sustained by Tenant as
-------
a result of a taking only of the property which belongs to Tenant and moving
expenses or other award available to Tenant provided such amount is not
subtracted from Landlord's award and does not seek to recover loss of any part
of Tenant's leasehold interest.
ARTICLE 11 - ASSIGNMENT AND SUBLEASE
------------------------------------
Section 11.01. Assignment and Sublease; Consent.
------------------------------------------------
Tenant shall not assign this Lease or sublet the Leased Premises in whole or in
part without Landlord's prior written consent, which consent shall not be
unreasonably withheld, delayed or denied. Tenant shall be permitted to sublease
only space within the Building, which may also include, in conjunction with the
subleasing of such space, those appurtenant portions of the Land necessary for a
subtenant's leasing of such space within the Building, such as rights to use the
parking areas, driveways and sidewalk areas. The transfer of the shares of stock
of Tenant shall not be deemed to be an assignment. In the event of any permitted
assignment or subletting by Tenant, Tenant shall remain primarily liable
hereunder. The acceptance of rent by Landlord from any other person or entity
shall not be deemed to be a waiver of any of the provisions of this Lease or to
be a consent to the assignment of this Lease or the subletting of the Leased
Premises. Without in any way limiting Landlord's right to refuse to consent to
any assignment or subletting of this Lease under this Section, Landlord reserves
the right to refuse to give such consent if, in Landlord's reasonable opinion,
(a) the Leased Premises are or may be in any way materially and adversely
affected; (b) the business reputation of the proposed assignee or subtenant is
unacceptable; or (c) the financial worth of the proposed assignee or subtenant
is insufficient to meet the obligations hereunder. If Landlord refuses to give
its consent to any proposed assignment or subletting, and such refusal is likely
to or will result in the voluntary or involuntary filing of a petition in
bankruptcy, insolvency, or reorganization or arrangement by or against Tenant
pursuant to any federal or state statute, Landlord may, at its option, within
thirty (30) days after receiving notice of such proposed assignment or
subletting, terminate this Lease by giving thirty (30) days prior written notice
of such termination, whereupon each party shall be released from all further
obligations and liabilities. Tenant agrees to reimburse Landlord for reasonable
accounting and attorneys' fees incurred in conjunction with the processing and
documentation of any requested assignment, subletting or any other hypothecation
of this Lease or Tenant's interest in and to the Leased Premises, such amount
not to exceed One Thousand Dollars ($1,000.00) for each such request.
Section 11.02. Permitted Transfer.
----------------------------------
Notwithstanding the provisions of Section 11.01, Tenant may assign the Lease or
sublease all or any portion of the space within the Building, which may also
include, in conjunction with the subleasing of such space, those appurtenant
portions of the Land necessary for a subtenant's leasing of such space within
the Building, such as rights to use the parking areas, driveways and sidewalk
areas, without Landlord's consent, to any of the following types of entities (a
"Permitted Transferee"): (i) any successor corporation or other entity resulting
from a merger or consolidation of Tenant; (ii) any purchaser of all or
substantially all of Tenant's assets; or (iii) any entity which controls, is
controlled by, or is under common control with Tenant. Tenant shall give
Landlord written notice of any such assignment or sublease within thirty (30)
days after the effective date of such assignment or sublease. Any Permitted
Transferee shall assume in writing all of Tenant's obligations under this Lease.
Tenant shall nevertheless at all times remain fully responsible and liable for
the payment of rent and the performance and observance of all of Tenant's other
obligations under this Lease. Nothing in this
16
Section is intended to or shall permit Tenant to transfer its interest under
this Lease as part of a fraud or subterfuge to intentionally avoid its
obligations under this Lease (for example, transferring its interest to a shell
corporation that subsequently files a bankruptcy), and any such transfer shall
constitute an Event of Default hereunder. Landlord's consent shall not be
required in the event that Tenant licenses operation of its mailroom, copy
service or dining facility to a third party vendor.
ARTICLE 12 - TRANSFERS BY LANDLORD
----------------------------------
Section 12.01. Sale of the Building.
------------------------------------
Landlord shall have the right to sell the Leased Premises at any time during the
Lease Term, subject only to the rights of Tenant hereunder, and such sale shall
operate to release Landlord from liability hereunder after the date of such
conveyance, provided that such transferee assumes all of Landlord's obligations
hereunder thereafter occurring.
Section 12.02. Subordination and Estoppel Certificate.
------------------------------------------------------
Landlord shall have the right to subordinate this Lease to any mortgage
presently existing or hereafter placed upon the Leased Premises by so declaring
in such mortgage. Within fifteen (15) business days following receipt of a
written request from Landlord, Tenant shall execute and deliver to Landlord,
without cost, any instrument (reasonably approved by Tenant) which Landlord
deems reasonably necessary or desirable to confirm the subordination of this
Lease and/or an estoppel certificate in such form as Landlord may reasonably
request and Tenant shall reasonably approve, certifying (i) that this Lease is
in full force and effect and unmodified or stating the nature of any
modification, (ii) the date to which Minimum Annual Rent and Additional Rent has
been paid, (iii) that there are not, to Tenant's actual knowledge, any uncured
defaults by Landlord under this Lease or specifying such defaults if any are
claimed, and (iv) any other matters or state of facts reasonably required
respecting this Lease. Such estoppel may be relied upon by Landlord and by any
purchaser or mortgagee of any portion of the Leased Premises to whom such
estoppel is addressed. Notwithstanding the foregoing, if a mortgagee shall take
title to the Leased Premises through foreclosure or deed in lieu of foreclosure,
and provided that Tenant shall not be in default beyond any applicable notice
and cure period provided for in this Lease, this Lease and Tenant's rights under
this Lease shall be recognized by such mortgagee, Tenant's possession of the
Leased Premises shall not be disturbed, and this Lease shall remain in full
force and effect. Similarly, Landlord will cooperate with Tenant, including
(without limitation) executing reasonable estoppels, waivers and consents
reasonably approved by Landlord in connection with any debt financing Tenant may
obtain during the Lease Term.
ARTICLE 13 - DEFAULT AND REMEDY
-------------------------------
Section 13.01. Default.
-----------------------
The occurrence of any of the following shall be an "Event of Default":
(a) Tenant fails to pay any Monthly Rental Installment or Additional
Rent within ten (10) days after Landlord has delivered notice to Tenant that the
same is due, or Tenant fails to pay any other amounts due Landlord from Tenant
within ten (10) days after Landlord has delivered notice to Tenant that the same
is due; provided, however, that Landlord shall not be required to give such
notice with regard to monetary defaults more than two (2) times in any
consecutive twelve (12) month period.
(b) Tenant fails to perform or observe any other term, condition,
covenant or obligation required under this Lease for a period of thirty (30)
days after notice thereof from Landlord; provided, however, that if the nature
of Tenant's default is such that more than thirty (30) days are reasonably
required to cure, then such default shall be deemed to have been cured if Tenant
commences such performance within said
17
thirty (30) day period and thereafter diligently completes the required action
within a reasonable time.
(c) All or substantially all of Tenant's assets in the Leased
Premises or Tenant's interest in this Lease are attached or levied under
execution (and Tenant does not discharge the same within sixty (60) days
thereafter); a petition in bankruptcy, insolvency or for reorganization or
arrangement is filed by or against Tenant (and Tenant fails to secure a stay or
discharge thereof within sixty (60) days thereafter); Tenant is insolvent and
unable to pay its debts as they become due; Tenant makes a general assignment
for the benefit of creditors; Tenant takes the benefit of any insolvency action
or law; the appointment of a receiver or trustee in bankruptcy for Tenant or its
assets if such receivership has not been vacated or set aside within thirty (30)
days thereafter; or, dissolution or other termination of Tenant's corporate
charter if Tenant is a corporation.
Section 13.02. Remedies.
------------------------
Upon the occurrence of any Event of Default, Landlord shall have the following
rights and remedies, in addition to those allowed by law or in equity, any one
or more of which may be exercised without further notice to Tenant:
(a) Landlord may enter the Leased Premises in accordance with the
provisions of this Lease or by legal process, as the case may be, and cure any
default of Tenant, and Tenant shall reimburse Landlord, as Additional Rent, for
any reasonable costs and expenses which Landlord thereby incurs; and Landlord
shall not be liable to Tenant for any loss or damage which Tenant may sustain by
reason of Landlord's action, except as provided herein or as permitted by law.
(b) Landlord may terminate this Lease or, without terminating this
Lease, terminate Tenant's right to possession of the Leased Premises by legal
process as of the date of such Event of Default, and thereafter (i) neither
Tenant nor any person claiming under or through Tenant shall be entitled to
possession of the Leased Premises, and Tenant shall immediately surrender the
Leased Premises to Landlord; and (ii) Landlord may re-enter the Leased Premises
and dispossess Tenant and any other occupants of the Leased Premises by any
lawful means and may remove their effects by any lawful means, without prejudice
to any other remedy which Landlord may have. Upon the termination of this
Lease, Landlord may declare the present value (discounted at the Prime Rate) of
all Minimum Annual Rent and Additional Rent which would have been due under this
Lease for the remainder of the Lease Term, less the present value of the fair
market rental value of the Leased Premises (including Additional Rent) which
Landlord reasonably determines could reasonably be recovered by Landlord from
re-letting the Leased Premises under then-current and reasonably anticipated
market conditions for the remainder of the Lease Term, to be immediately due and
payable, whereupon Tenant shall be obligated to pay such amount to Landlord,
together with all loss or damage which Landlord may sustain by reason of such
Event of Default, which shall include, without limitation, the expenses of
preparing the Leased Premises for re-letting, demolition, repairs, tenant finish
improvements, reasonable brokers' commissions and reasonable attorneys' fees
("Landlord's Default Damages"), it being expressly understood and agreed that
the liabilities and remedies specified in this paragraph (b) shall survive the
termination of this Lease.
(c) Landlord may, without terminating this Lease, re-enter the Leased
Premises by legal process and re-let all or any part thereof for a term
different from that which would otherwise have constituted the remainder of the
Lease Term and for rent and on terms and conditions different from those
contained herein, whereupon Tenant shall be immediately obligated to pay to
Landlord as liquidated damages the present value (discounted at the Prime Rate)
of the difference between the Minimum Annual Rent and Additional Rent provided
for herein and that provided for in any lease covering a subsequent re-letting
of the Leased Premises for the period which would otherwise have constituted the
remainder of the Lease Term, together with all of Landlord's Default Damages.
18
(d) Landlord may ▇▇▇ for injunctive relief or to recover damages for
any loss resulting from an Event of Default.
Section 13.03. Landlord's Default and Tenant's Remedies.
--------------------------------------------------------
Landlord shall be in default if it fails to perform any term, condition,
covenant or obligation required under this Lease for a period of thirty (30)
days after written notice thereof from Tenant to Landlord; provided, however,
that if the term, condition, covenant or obligation to be performed by Landlord
is such that it cannot reasonably be performed within thirty (30) days, such
default shall be deemed to have been cured if Landlord commences such
performance within said thirty-day (30) period and thereafter diligently
undertakes to complete the same. Upon the occurrence of any such default by
Landlord, Tenant may, in addition to any rights or remedies allowed by law or in
equity, ▇▇▇ for injunctive relief or to recover damages for any loss directly
resulting from such breach, but Tenant shall not be entitled to terminate this
Lease or withhold, offset or ▇▇▇▇▇ any sums due hereunder, except as expressly
provided herein. Provided that Landlord is in default hereunder beyond the
notice and cure periods provided for above and provided that Tenant has given
Landlord a second written notice served no sooner than fifteen (15) days
following Tenant's first default notice to Landlord, advising Landlord of
Landlord's default and of Tenant's contractual rights to cure Landlord's default
and offset such costs to cure against Tenant's Minimum Annual Rent and
Additional Rent as provided herein, Tenant shall have the right to use
reasonable measures to cure such default on behalf of Landlord and offset the
reasonable costs thereof against Minimum Annual Rent and Additional Rent due
under this Lease in an amount not to exceed Seventy-Five Thousand Dollars
($75,000.00) per calendar year.
Section 13.04. Limitation of Landlord's Liability.
--------------------------------------------------
If Landlord shall fail to perform any term, condition, covenant or obligation
required to be performed by Landlord under this Lease, and if Tenant shall, as a
consequence thereof, recover a money judgment against Landlord, Tenant agrees
that it shall look solely to Landlord's right, title and interest in and to the
Leased Premises for the collection of such judgment; and Tenant further agrees
that no other assets of Landlord shall be subject to levy, execution or other
process for the satisfaction of Tenant's judgment.
Section 13.05. Nonwaiver of Defaults.
-------------------------------------
Neither party's failure or delay in exercising any of its rights or remedies or
other provisions of this Lease shall constitute a waiver thereof or affect its
right thereafter to exercise or enforce such right or remedy or other provision.
No waiver of any default shall be deemed to be a waiver of any other default.
Landlord's receipt of less than the full Minimum Annual Rent or Additional Rent
when due shall not be construed to be other than a payment on account of rent
then due, nor shall any statement on Tenant's check or any letter accompanying
Tenant's check be deemed an accord and satisfaction. No act or omission by
Landlord or its employees or agents during the Term shall be deemed an
acceptance of a surrender of the Leased Premises, and no agreement to accept
such a surrender shall be valid unless in writing and signed by Landlord.
Section 13.06. Attorneys' Fees.
-------------------------------
If either party defaults in the performance or observance of any of the terms,
conditions, covenants or obligations contained in this Lease and the non-
defaulting party obtains a judgment or settlement against the defaulting party,
then the defaulting party agrees to reimburse the non-defaulting party for
reasonable attorneys' fees incurred in connection therewith.
19
ARTICLE 14 - TENANT'S RESPONSIBILITY REGARDING
----------------------------------------------
ENVIRONMENTAL LAWS AND HAZARDOUS SUBSTANCES
-------------------------------------------
Section 14.01. Environmental Definitions.
------------------------------------------
(a) "Environmental Laws" - All present or future federal, state and
municipal laws, ordinances, rules and regulations applicable to the
environmental condition of the Leased Premises and the Building, the rules and
regulations of the federal Environmental Protection Agency or any other federal,
state or municipal agency or governmental board or entity having jurisdiction
over the Leased Premises and the Building.
(b) "Hazardous Substances" - Those substances included within the
definitions of "hazardous substances," "hazardous materials," "toxic
substances," "solid waste" or "infectious waste" under Environmental Laws.
Section 14.02. Compliance.
---------------------------
Tenant, at its sole cost and expense, shall promptly comply with the
Environmental Laws, including any notice from any governmental source having
jurisdiction over the Leased Premises, which notice is issued pursuant to the
Environmental Laws, which shall impose any duty upon Tenant with respect to
Tenant's use, occupancy, maintenance or alteration of the Leased Premises.
Section 14.03. Restrictions on Tenant.
--------------------------------------
Tenant shall operate its business and maintain the Leased Premises in compliance
with all Environmental Laws. Tenant shall not cause or permit the use,
generation, release, manufacture, refining, production, processing, storage or
disposal of any Hazardous Substances on, under or about the Leased Premises, or
the transportation to or from the Leased Premises of any Hazardous Substances,
except as necessary and appropriate for Tenant's Permitted Use, in which case
the use, storage or disposal of such Hazardous Substances shall be performed in
compliance with Environmental Laws and customary standards prevailing in the
industry.
Section 14.04. Notices and Affidavits.
--------------------------------------
Tenant shall promptly notify Landlord (upon discovery by Tenant) of (i) any
violation by Tenant, its employees, agents, representatives, customers,
invitees, or contractors of the Environmental Laws which affects the Leased
Premises, or (ii) the presence or suspected presence of any Hazardous Substances
on, under or about the Leased Premises. Tenant shall promptly deliver to
Landlord any notice received by Tenant from any governmental source relating to
the foregoing or relating to any violation by Tenant of the Environmental Laws
on, under or about the Leased Premises.
Section 14.05. Landlord's Rights.
---------------------------------
Landlord and its agents shall have the right, but not the duty, upon reasonable
advance notice (except in the case of an emergency when notice required to be
provided shall be such notice which is appropriate under the circumstances,
which in certain instances may result in no prior notice being given to Tenant)
to inspect the Leased Premises and conduct tests thereon to determine whether or
the extent to which there has been a violation of Environmental Laws by Tenant
or whether there are Hazardous Substances on, under or about the Leased
Premises. In exercising its rights herein, Landlord shall use reasonable efforts
to minimize interference with Tenant's business but such entry shall not
constitute an eviction of Tenant, in whole or in part, and Landlord shall not be
liable for any interference, loss, or damage to Tenant's property or business
caused thereby, except as provided in Article 9.
Section 14.06. Tenant's Indemnification.
----------------------------------------
Tenant shall indemnify Landlord and Landlord's managing agent from any and all
claims, losses, liabilities, costs, expenses and damages, including reasonable
attorneys' fees, costs
20
of testing and remediation costs, incurred by Landlord in connection with any
breach by Tenant of its obligations under this Article 14. The covenants and
obligations of Tenant under this Article 14 shall survive the expiration or
earlier termination of this Lease.
Section 14.07. Existing Conditions.
-----------------------------------
Duke represents and warrants that the Leased Premises and the Building are free
from Hazardous Substances on the date of this Lease and shall be free from
Hazardous Substances on the Commencement Date, except as may be disclosed in
that certain environmental site assessment report prepared by Dames & ▇▇▇▇▇
dated October 23, 1997. Duke further represents and warrants that the soil in
and upon the Leased Premises and the ground water serving the Leased Premises
and the Building are free from Hazardous Substances on the date of this Lease
and shall be free from Hazardous Substances on the Commencement Date, except as
may be disclosed in that certain environmental site assessment report prepared
by Dames & ▇▇▇▇▇ dated October 23, 1997. Notwithstanding anything contained in
this Article 14 to the contrary, Tenant shall not have any liability to Landlord
under this Article 14 resulting from any conditions existing, or events
occurring, or any Hazardous Substances existing or generated, at, in, on, under
or in connection with the Leased Premises prior to the Commencement Date, except
to the extent Tenant causes or exacerbates the same.
Section 14.08. Landlord's Indemnification.
------------------------------------------
Landlord shall indemnify Tenant from any and all damages, claims or liabilities
Tenant incurs by reason of (i) Landlord's violation of any Environmental Laws or
the generation, use or release of any Hazardous Substances by Landlord in
connection with the Leased Premises or the Building or property appurtenant to
the Leased Premises and (ii) any conditions existing, or events occurring, or
any Hazardous Substances existing or generated at, in, on, under or in
connection with the Leased Premises or the Building prior to the Commencement
Date, except to the extent caused or exacerbated by Tenant. The covenants and
obligations of Landlord under this Article 14 shall survive the expiration or
earlier termination of this Lease and shall be binding on the Landlord's
successors and assigns.
ARTICLE 15 - MISCELLANEOUS
--------------------------
Section 15.01. Benefit of Landlord and Tenant.
----------------------------------------------
This Lease shall inure to the benefit of and be binding upon Landlord and Tenant
and their respective successors and assigns.
Section 15.02. Governing Law.
-----------------------------
This Lease shall be governed in accordance with the laws of the State of
Missouri.
Section 15.03. Force Majeure.
-----------------------------
Each of Landlord and Tenant shall be excused for the period of any delay in the
performance of any obligation hereunder when such delay is occasioned by causes
beyond the control of the party asserting such delay (except with respect to the
payment of Minimum Annual Rent or Additional Rent or any other monetary
obligation payable by Tenant under the Lease), including, but not limited to,
work stoppages, boycotts, slowdowns or strikes; shortages of materials,
equipment, labor or energy; fire, earthquake, flood, explosion, actions of the
elements, war, invasion, insurrection, riot, mob violence, or sabotage; orders
of government or civil or military authorities; or unusual weather conditions
(collectively, "Force Majeure Events," and individually, a "Force Majeure
Event"); provided, however, that for purposes of this definition, lack of funds
-------- -------
or inability to obtain financing on the part of Landlord or Tenant shall not be
deemed to be a Force Majeure Event.
21
Section 15.04. Examination of Lease.
------------------------------------
Submission of this instrument for examination or signature to Tenant does not
constitute a reservation of or option for lease, and this instrument is not
effective as a lease or otherwise until execution by and delivery to both
Landlord and Tenant.
Section 15.05. Indemnification for Leasing Commissions.
-------------------------------------------------------
Each of Landlord and Tenant hereby represent and warrant to the other that it
has had no dealings with any real estate brokers in the negotiation and
execution of this Lease, except the Brokers identified in Section 1.01(H), whose
fees shall be paid by Landlord pursuant to the terms and conditions of a
separate written agreement between Landlord and the Brokers. Each party shall
indemnify the other from any and all liability, including reasonable attorneys'
fees, for the breach of this representation and warranty on its part and for
commissions or other compensation claimed by any other broker or person claiming
the same by, through or under the indemnifying party.
Section 15.06. Notices.
-----------------------
Any notice required or permitted to be given under this Lease or by law shall be
deemed to have been given if it is written and delivered in person or by
overnight courier or mailed by certified mail, postage prepaid, or transmitted
via facsimile to the party who is to receive such notice at the address or
facsimile number specified in Section 1.01(K). If delivered in person, the
notice shall be deemed given as of the delivery date. If sent by overnight
courier, the notice shall be deemed to have been given one (1) day after it was
sent. If mailed, the notice shall be deemed to have been given on the date which
is three (3) business days following mailing. If sent via facsimile, the notice
shall be deemed to have been given on the date of transmission. Either party may
change its address or facsimile number by giving written notice thereof to the
other party in the manner provided in this Section.
Section 15.07. Partial Invalidity; Complete Agreement.
------------------------------------------------------
If any provision of this Lease shall be held to be invalid, void or
unenforceable, the remaining provisions shall remain in full force and effect.
This Lease represents the entire agreement between Landlord and Tenant covering
everything agreed upon or understood in this transaction. There are no oral
promises, conditions, representations, understandings, interpretations or terms
of any kind as conditions or inducements to the execution hereof or in effect
between the parties. No change or addition shall be made to this Lease except by
a written agreement executed by Landlord and Tenant.
Section 15.08. Authority.
-------------------------
Each of Landlord and Tenant represents and warrants that (i) it is duly
organized, validly existing and in good standing (if applicable) in accordance
with the laws of the state under which it was organized; and (ii) the individual
executing and delivering this Lease has been properly authorized to do so, and
such execution and delivery shall bind such party.
Section 15.09. Financial Statements.
------------------------------------
During the Term and any extensions thereof, Tenant shall, upon Landlord's
written request, which request shall not be made more frequently than once
during each calendar year, provide to Landlord a copy of Tenant's most recent
audited financial statements prepared as of the end of Tenant's fiscal year.
All financial statements provided by Tenant to Landlord hereunder shall be
prepared in conformity with generally accepted accounting principles,
consistently applied. Notwithstanding the foregoing, Landlord agrees to accept
Tenant's annual report which is generally available to the public in full
satisfaction of Tenant's obligations hereunder so long as Tenant remains a
publicly traded company subject to regulation by the Securities and Exchange
Commission. In the event Tenant should cease to be a publicly traded company and
is asked to submit financial statements pursuant to the terms of this Section,
Landlord agrees to keep such
22
information confidential within Landlord's organization, except that Landlord
shall be permitted to disclose such information on a need to know basis to
Landlord's financial analysts, prospective purchasers or prospective lenders.
Section 15.10. ADA Compliance.
------------------------------
The parties agree that the liabilities and obligations of Landlord and Tenant
under that certain federal statute commonly known as the Americans With
Disabilities Act (42 U.S.C. 12101 et seq.), as well as the regulations and
accessibility guidelines promulgated thereunder, as each of the foregoing is
supplemented or amended from time to time (collectively, the "Act") shall be
apportioned as follows:
(a) Landlord represents and warrants that, as of the Commencement
Date, the Shell Work shall be in compliance with the Act;
(b) Tenant shall be responsible for all future alterations, additions
or improvements to the Leased Premises in order to bring the Leased Premises in
compliance with the Act during the Term. In the event that at any time during
the Term, Tenant is required by the Act to make any alterations or modifications
within the Leased Premises in order to accommodate any employee or customers of
Tenant or any applicant for employment with Tenant, Landlord agrees that Tenant
shall have the right, at Tenant's sole expense, to alter or modify the Leased
Premises so as to comply with the Act, so long as such alteration or
modification does not affect the structural integrity of the Building. Such
alterations shall be subject to the terms and conditions of Section 7.03 and
prior written approval by Landlord of the plans and specifications therefor.
(c) All construction, alterations and modifications required or
permitted hereunder shall be done in a good and workmanlike manner.
(d) Each of Landlord and Tenant agrees to indemnify and hold harmless
the other from and against any and all fines, suits, demands, losses and actions
(including reasonable attorneys' fees and court costs) arising out of or related
to its failure to perform any of its obligations under this Section.
Section 15.11. Quiet Enjoyment.
-------------------------------
Provided there exists no Event of Default, Tenant shall have the right to quiet
and peaceful possession and enjoyment of the Leased Premises throughout the
Term, the First Extension Term or the Second Extension Term (as those terms are
defined in Section 15.14), as the case may be.
Section 15.12. Parking.
-----------------------
Landlord agrees that Tenant shall have the right to use, on an exclusive basis
during the term of this Lease, the parking areas designated on the site plan
attached hereto as Exhibit A.
----------
Section 15.13. Signage.
-----------------------
Subject to (i) zoning and other municipal and county regulations, as well as any
restrictions set forth in the CC&Rs, and (ii) Tenant's compliance with the
foregoing regulations and restrictions, Tenant may, at its own cost and expense,
erect signage identifying its business, including, but not limited to, exterior
signage on the Building or monument signage outside the Building ("Signage") on,
in, or around the Leased Premises. Landlord shall have the right to approve any
Signage, including the location, size, color and style of any such Signage,
which approval shall not be unreasonably withheld, conditioned or delayed.
Tenant agrees to maintain such Signage in a first-class condition and in
compliance with all applicable Laws. Upon the expiration or earlier termination
of this Lease, Tenant shall remove any Signage and repair all damage to the
Building or grounds surrounding the Building caused as a result of the
installation of such Signage. Landlord does not warrant the availability of any
Signage to Tenant. Tenant shall indemnify and hold harmless Landlord from any
and all liability for any loss of or
23
damage or injury to any person (including death resulting therefrom) or property
connected with or arising from any Signage or the rights granted to Tenant
herein.
Section 15.14. Tenant Right to Contract.
-----------------------------------------
Tenant shall have the right to contract directly with third party vendors for
janitorial and vending services; provided, however, that such contractor or
vendor shall be subject to the reasonable approval of Landlord.
Section 15.15. Options to Extend.
----------------------------------
(a) Provided that no Event of Default shall have occurred and be
continuing, Tenant shall have the option to extend the initial Term for two (2)
successive periods of five (5) years each (the "First Extension Term" or the
"Second Extension Term," as the case may be, and collectively, the "Extension
Terms") upon the same terms and conditions of this Lease in effect at the
expiration of the initial Term or the First Extension Term, as the case may be,
except that the Minimum Annual Rent (not including Additional Rent) for the
Extension Terms shall be adjusted as set forth below (in each case, the "Rent
Adjustment"). Tenant, if it elects to exercise either option to extend, shall do
so by delivering written notice of such election to Landlord no later than one
(1) year prior to the expiration of the initial Lease Term or the First
Extension Term, as the case may be. Unless Landlord otherwise agrees in writing,
Tenant's rights under this Section shall terminate if Tenant fails to timely and
properly exercise either option to extend.
(b) The Rent Adjustment for the First Extension Term shall be an
amount equal to the product obtained by multiplying the Minimum Annual Rent for
the tenth (10th) lease year (not including Additional Rent) by one hundred and
fifteen percent (115%). The Rent Adjustment for the Second Extension Term shall
be determined as follows: Within twenty (20) days after receipt of Tenant's
notice to extend, Landlord shall send written notice to Tenant of the
"prevailing rental rate" (based upon market rent for premises of comparable
size, age, quality and tenant finish improvements as are found in the Earth
City/Riverport area to a tenant of similar credit standing as Tenant, excluding
free rent and other concessions) (the "Rental Criteria") and shall advise Tenant
of Landlord's proposed Rent Adjustment, if any. If Tenant disagrees with
Landlord's determination of prevailing rental rates (based on the Rental
Criteria) and such proposed Rent Adjustment, Tenant may, but only within forty-
five (45) days after receipt of Landlord's notice, require by written notice to
Landlord that determination of the prevailing rental rate (based on the Rental
Criteria) and determination of the Rent Adjustment be made by appraisers. In
such event, within ten (10) days thereafter, each party shall select an MAI
appraiser (i) with at least ten (10) years experience in appraising commercial
property and buildings in the Earth City/Riverport area comparable to the Leased
Premises, and (ii) currently certified under the continuing education program of
The Appraisal Institute, or its successor (any such appraiser meeting the
foregoing requirements to be hereinafter called an "Appraiser"). The two
Appraisers shall give their opinion of the prevailing rental rates (based on the
Rental Criteria) within twenty (20) days after their retention. In no event,
however, shall the Minimum Annual Rent in the Second Extension Term be less than
the then Minimum Annual Rent payable by Tenant during the First Extension Term.
In the event that the opinions of the two Appraisers differ and, after good
faith efforts over the succeeding twenty (20) day period, the Appraisers cannot
mutually agree, the Appraisers shall immediately and jointly appoint a third
Appraiser with the qualifications specified above. The Minimum Annual Rent
during the Second Extension Term shall be established by the third Appraiser
based on the Rental Criteria; provided, however, that said Rent Adjustment shall
not be greater than the initial high appraisal or be less than the initial low
appraisal. Each party shall pay its own costs for its Appraiser and shall
equally share the costs of any third Appraiser. The parties shall immediately
confirm the Rental Adjustment for the Second Extension Term in writing. The
Minimum Monthly Rent during each Extension Term shall be an amount equal to one-
twelfth (1/12) of the Minimum Annual Rent for each such Extension Term and shall
be paid at the same time and in the same manner as provided in Section 3.01.
24
Section 15.16. Option to Purchase.
-----------------------------------
(a) Tenant shall have the option to purchase the Leased Premises
effective as of the Commencement Date. Tenant shall exercise such option by
giving written notice to Landlord of its election to purchase the Leased
Premises no later than one hundred twenty (120) days prior to the Commencement
Date. Tenant's rights under this Section shall terminate if Tenant fails to
timely and properly exercise this purchase option. If such option is validly
exercised by Tenant, the purchase price shall be equal to the product obtained
by multiplying the Total Project Cost by 1.035. Closing of the purchase shall be
subject to customary real estate acquisition terms and conditions, including,
without limitation, title, survey and environmental due diligence and receipt of
a satisfactory owner's policy of title insurance at closing. Tenant may assign
its rights as purchaser to a third party designated by Tenant. Tenant may record
a memorandum of purchase option in the real property records of St. Louis County
upon execution and delivery of this Lease.
(b) If Tenant exercises its option to purchase Landlord's interest in
the Leased Premises as set forth herein, Landlord shall have the right to
identify other real estate of like kind which it desires to acquire in exchange
for the Leased Premises (the "Replacement Property") in a transaction that
Landlord intends to qualify as a tax-free exchange under Section 1031 of the
Internal Revenue Code. Tenant shall make all reasonable efforts to cooperate
with Landlord with respect to such Section 1031 exchange, provided that (i) the
date of closing hereunder is not delayed, (ii) Tenant shall not be required to
take title to the Replacement Property, and (iii) Landlord shall indemnify and
hold Tenant harmless from and against any and all reasonable costs and expenses
(including reasonable attorneys' fees) incurred by Tenant as a result of or in
connection with Landlord's acquisition of the Replacement Property. If, at the
time of closing of Tenant's purchase of Landlord's interest in the Leased
Premises hereunder, Landlord has not identified or is not ready to acquire the
Replacement Property, Landlord shall have the right to assign all of its right,
title and interest in and to the purchase price to a qualified intermediary.
25
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
day and year first above written.
LANDLORD:
DUKE CONSTRUCTION LIMITED PARTNERSHIP,
an Indiana limited partnership
By: Duke Realty Services Limited Partnership, an Indiana limited partnership,
its general partner
By: Duke Services, Inc., an Indiana corporation,
its general partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Printed: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------
Title: Construction Manager
---------------------------
TENANT:
UNIGRAPHICS SOLUTIONS INC.,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Printed: ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------
Title: President and Chief Executive Officer
---------------------------
26
TENANT ACKNOWLEDGMENT
STATE OF MISSOURI )
) SS
COUNTY OF ST. LOUIS )
Before me, a Notary Public in and for said County and State, personally
appeared ▇▇▇▇ ▇▇▇▇▇▇▇, by me known to be the President and CEO of Unigraphics
Solutions Inc., a Delaware corporation, who acknowledged the execution of the
foregoing "Office Lease" on behalf of said corporation.
WITNESS my hand and Notarial Seal this 7th day of July, 2000.
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Notary Public
My Commission Expires:
6/10/2001
------------------------
(Seal or Stamp)
[NOTARY SEAL APPEARS HERE]
27
LANDLORD ACKNOWLEDGMENT
STATE OF INDIANA )
) SS
COUNTY OF ▇▇▇▇▇▇ )
Before me, a Notary Public in and for said County and State, personally
appeared ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, by me known to be the Construction Manager Duke
Services, Inc., an Indiana corporation, the general partner of Duke Realty
Services Limited Partnership, an Indiana limited partnership, the general
partner of Duke Construction Limited Partnership, an Indiana limited
partnership, who acknowledged the execution of the foregoing "Office Lease" on
behalf of said corporation and partnerships.
WITNESS my hand and Notarial Seal this 7th day of July, 2000.
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------
Notary Public
My Commission Expires:
May 4, 2002
----------------------
(Seal or Stamp)
[NOTARY SEAL APPEARS HERE]
28
LEASE EXHIBITS
--------------
Exhibit A - Site Plan of Leased Premises and Legal Description of the Land
---------
Exhibit B - Shell Work and Finish Work
---------
Exhibit B-1 - Total Project Cost
-----------
Exhibit B-2 - Shell Plans and Specifications
-----------
Exhibit B-3 - Project Schedule
-----------
Exhibit B-4 - Approved Interior Plans and Specifications
-----------
Exhibit C - Rules and Regulations
---------
"The registrant hereby undertakes to furnish supplementally a copy of any
omitted exhibit to the Securities and Exchange Commission upon request."
29
EXHIBIT A
---------
Site Plan of Leased Premises and Legal Description of the Land
--------------------------------------------------------------
Lot 2A
------
A tract of land being part of Lot 2 of Duke/Riverport Site No. 1, a subdivision
according to the plat thereof recorded in Plat Book 346 Page 630 of the Recorder
of Deed's Office in St. Louis County, Missouri and being located in U.S. Survey
1891, Township 46 North, Range 5 East of the ▇/▇▇/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ of
Maryland Heights, St. Louis County, Missouri, and being more particularly
described as follows:
Beginning at the Northeasterly corner of above said Lot 2, said point also being
located on the Westerly line of Riverport Drive, 74 feet wide, said point also
being located on a curve to the right for which the radius point bears South 81
degrees 27 minutes 33 seconds West 1042.00 feet; thence along the Westerly line
of above said Riverport Drive the following courses and distances; thence in a
Southerly direction along last said curve an arc distance of 503.13 feet to a
point of tangency; thence South 19 degrees 07 minutes 26 seconds West 282.51
feet; thence departing last said Westerly line North 70 degrees 54 minutes 39
seconds West 578.10 feet to a point on a curve to the left for which the radius
point bears North 68 degrees 32 minutes 44 seconds West 1712.50 feet; thence
along last said curve an arc distance of 532.74 feet to a point in the Northerly
line of above said Lot 2, said point also being located on a curve to the left
for which the radius point bears North 04 degrees 46 minutes 16 seconds East
869.00 feet; thence along the Northerly line of above said Lot 2 the following
courses and distances; thence along last said curve an arc distance of 188.56
feet to a point of tangency; thence North 82 degrees 20 minutes 19 seconds East
384.89 feet to the Point of Beginning and containing 380,807 square feet or
8.742 acres more or less.
Exhibit A
---------
Site Plan
Exhibit A
---------
Site Plan
30
EXHIBIT B
---------
Shell Work and Finish Work
--------------------------
1. Shell Work. The scope of the work for the shell improvements
----------
(the "Shell Work") to be performed by Landlord is set forth in the plans and
specifications which are identified on Exhibit B-2 attached hereto and made a
-----------
part hereof (the "Shell Plans"). Landlord shall promptly construct the Shell
Work in a good and workmanlike manner, in accordance with all applicable zoning
and other ordinances, building codes and regulations, laws, statutes,
ordinances, codes, standards, regulations, rules, orders, decisions and
requirements of all federal, state and local authorities, and any other body or
bodies exercising similar functions (collectively, the "Laws"), all of the
improvements and supply all work, labor, materials and equipment necessary to
complete the Shell Work in accordance with the Shell Plans. The Shell Work shall
include, without limitation, the installation of landscaping, parking lots,
driveways, electric, water, storm drainage facilities and sanitary sewer
systems, the installation of conduit for telephone lines up to the Building, and
all other improvements shown on the Shell Plans for the benefit of the Leased
Premises.
2. Finish Work. Landlord shall construct certain leasehold
-----------
improvements (the "Finish Work") in the Leased Premises pursuant to plans and
specifications (the "Interior Plans") which Tenant shall provide to Landlord in
accordance with the Project Schedule, dated June 30, 2000, a copy of which is
attached hereto and made a part hereof as Exhibit B-3. The Interior Plans shall
-----------
be delivered to Landlord and shall be subject to Landlord's reasonable approval,
which Landlord shall provide within seven (7) business days after Landlord's
receipt of the Interior Plans. If Landlord disapproves of all or any portion of
the Interior Plans, Landlord shall give Tenant an explanation of the reasons for
such disapproval and the corrections or changes that are necessary for Landlord
to approve the Interior Plans. Landlord and Tenant shall fully cooperate with
each other to revise the Interior Plans until the Interior Plans are acceptable
to Landlord and Tenant. At the time that the Interior Plans, including any
corrections and changes thereto, are approved by Landlord, they shall be signed
and dated by Landlord and Tenant, shall be known collectively as the "Approved
Interior Plans," and a schedule of such Approved Interior Plans shall be
attached hereto and made a part hereof as Exhibit B-4. Landlord's approval of
-----------
the Interior Plans shall neither constitute any warranty by Landlord to Tenant
of the adequacy of the design for Tenant's intended use of the Leased Premises
nor create any liability or responsibility on the part of Landlord for
compliance of the Interior Plans with Laws, but shall merely be the consent of
Landlord to the performance of the Finish Work. Landlord shall promptly
construct in a good and workmanlike manner all of the improvements and supply
all work, labor, materials and equipment necessary to complete the Finish Work
in accordance with the Approved Interior Plans. Performance of construction of
the Finish Work shall be in accordance with Laws. The Shell Work and the Finish
Work shall be referred to collectively herein as the "Total Project."
3. Working Drawings. If necessary for the performance of the Finish
----------------
Work, Tenant shall prepare final working drawings and specifications for the
Finish Work (the "Working Drawings") based upon and consistent with the Approved
Interior Plans. Tenant shall provide the Working Drawings to Landlord in
accordance with the Project Schedule. The Working Drawings shall be subject to
Landlord's reasonable approval with respect to non-structural improvements only,
which Landlord shall provide within three (3) business days after Landlord's
receipt of any such Working Drawings. If Landlord disapproves of any such
Working Drawings, Landlord shall give Tenant an explanation of the reasons for
such disapproval and the corrections or changes that are necessary for Landlord
to approve such Working Drawings. Landlord and Tenant shall fully cooperate with
each other to revise such Working Drawings until they are acceptable to Landlord
and Tenant.
4. General Contractor. Landlord shall act as the general contractor
------------------
for the Total Project. Landlord's compensation for its services as the general
contractor shall be an amount equal to seven percent (7%) of the costs of the
Shell Work and eight
31
percent (8%) of the costs of the Finish Work.
5. Finish Work Allowance. Landlord shall provide Tenant with a
---------------------
tenant finish improvement allowance in an amount not to exceed Twenty-Five
Dollars ($25.00) per square foot of the Rentable Area (as defined in Section
1.01 (B)) of the Leased Premises (the "Finish Work Allowance"), which shall be
applied solely toward the cost of constructing and completing the Finish Work in
accordance with the Approved Interior Plans. The Finish Work Allowance may not
be used for the purchase of furniture, artwork, telephone systems or computer
systems or any architectural or space planning costs.
6. Finish Work in Excess of the Finish Work Allowance. The cost of
--------------------------------------------------
any portion of the Finish Work which exceeds the Finish Work Allowance ("Above-
Allowance Work") shall be borne by Tenant. After the cost of the Finish Work
exceeds the Finish Work Allowance, Landlord shall submit to Tenant monthly
invoices for progress payments (which invoices shall reflect retainage) on the
Above-Allowance Work. Such invoices shall indicate (i) the amount of Above-
Allowance Work completed during the prior month, and (ii) the amount due and
payable from Tenant for such Above-Allowance Work. Tenant shall remit payment to
Landlord for the full amount indicated on such invoices within ten (10) business
days of its receipt of the same.
7. Change Orders. Tenant shall be allowed to make changes to the
-------------
Total Project, subject to Landlord's reasonable approval, as follows: Tenant
shall request such changes in a written change order ("Change Order(s)") signed
by Tenant's Change Order Designee (as defined below) and delivered to Landlord.
Within five (5) business days after Landlord's receipt of a Change Order,
Landlord shall respond to Tenant by submitting to Tenant either (a) a detailed
statement of the cost of such changes (including additional fees, general
conditions or overhead, if any) or (b) a written estimate of such additional
time as Landlord requires to provide Tenant with the statement contemplated in
subpart (a) above. Within five (5) days after Tenant's receipt of Landlord's
detailed statement as contemplated by subpart (a) above, Tenant shall notify
Landlord as to whether Tenant desires Landlord to proceed with such Change
Order. In the event that Tenant fails to notify Landlord within such five (5)
day period, the Change Order shall be deemed withdrawn, and Tenant shall pay
Landlord all costs incurred by Landlord as a result of the submission of such
Change Order upon Tenant's receipt from Landlord of documentation in reasonable
detail, substantiating such costs. A Change Order requested by Tenant shall not
increase the amount of the Finish Work Allowance or the GMP (as defined in
Section 2.03). In the event that the cost of any Change Order increases the
costs of the Shell Work or the Finish Work, including construction costs,
engineering fees, architectural fees or space planning costs, beyond the amounts
identified on Exhibit B-1, Tenant shall reimburse Landlord for such excess
-----------
amounts within ten (10) business days after Tenant's receipt of an invoice from
Landlord respecting such increased costs and fees; provided, however, that if
any Change Order requested by Tenant should result in a decrease in the costs of
the Shell Work or the Finish Work as identified on Exhibit B-1, the amount of
-----------
such decrease shall be credited to Tenant in proportion to the amounts set forth
in Section 2.03, first against any liability Tenant may have to reimburse
Landlord for any work authorized by an approved Change Order pursuant to this
paragraph, and second as a reduction of Tenant's Minimum Annual Rent pursuant to
Section 2.03. Tenant shall have the obligation to provide Landlord with any
additional information (including, but not limited to, plans, specifications and
drawings) which is necessary in order to perform and complete work authorized by
an approved Change Order, and Tenant shall be solely responsible for such costs
and expenses, including, but not limited to, all architectural and engineering
fees incurred in revising the Approved Interior Plans. A general contractor fee
in the amount of seven percent (7%) with respect to a Change Order for Shell
Work and eight percent (8%) with respect to a Change Order for Finish Work shall
be charged to Tenant. A Change Order signed by Tenant's Change Order Designee
shall be incorporated into and deemed a part of Exhibit B-2 or Exhibit B-4, as
----------- -----------
appropriate, for all purposes of the Lease. Landlord and Tenant hereby
acknowledge that ▇▇▇▇ ▇▇▇▇▇ (or any other entity or individual subsequently
designated by Tenant to Landlord in writing from time to time) shall serve as
Tenant's Change Order Designee ("Tenant's Change Order Designee"), and Landlord
and Tenant agree that Tenant's
32
Change Order Designee shall have full and complete authority to bind and commit
Tenant with respect to any Change Order requested by Tenant.
8. Tenant Delays. A "Tenant Delay" shall mean any delay in the
-------------
completion of the Total Project attributable to Tenant as a result of one of the
following:
(a) Tenant's failure to meet any of the dates specified in this Exhibit B,
---------
the Project Schedule or the Lease, including Tenant's failure to grant
its approval in the time periods specified or to timely make any
payments due hereunder;
(b) Change Orders;
(c) Tenant's requirements for special work or materials, finishes or
installations in addition to or other than Landlord's standard finish
out materials or those specified in the Shell Plans or the Approved
Interior Plans;
(d) the performance of any work in or on the Leased Premises by any
person, firm or corporation employed by or on behalf of Tenant; or
(e) any other act or omission of Tenant.
The Commencement Date of the Lease and Tenant's obligation to commence paying
Minimum Annual Rent and Additional Rent for the Leased Premises shall not be
delayed or postponed on account of any Tenant Delay.
9. Open Book Bidding for Variable Cost Items, Allowance Items or the
-----------------------------------------------------------------
GMP. Landlord shall obtain competitive bids for elements of the Shell Work and
---
the Finish Work related to any Variable Cost Item, Allowance Item or the GMP
from contractors, subcontractors and material suppliers previously approved by
Tenant and Landlord, and, after analyzing such bids, shall deliver such bids
along with its evaluation and recommendations to Tenant for review. Tenant and
Landlord shall then agree on which bids to accept and on what terms. Tenant and
Landlord may agree to waive the foregoing requirements as to a particular
element of the Shell Work or the Finish Work and, in lieu thereof, authorize
Landlord to attempt to negotiate a contract or subcontract for such element of
such Work.
10. Progress Meetings and Inspection of Landlord's Work. Landlord
---------------------------------------------------
shall meet with Tenant and Colliers ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ (or any other
entity or individual designated by Tenant to Landlord in writing from time to
time as Tenant's Program Manager) ("Tenant's Program Manager") on a biweekly
basis concerning the scheduling and progress of the Total Project so as to keep
Tenant informed of the progress and the estimated completion date for each
portion of the Total Project. Landlord shall advise Tenant at such biweekly
meetings of any Tenant Delay that has occurred and shall promptly thereafter
confirm such notification in writing. Tenant or Tenant's Program Manager shall
have the right at all reasonable times to enter upon the Leased Premises for the
purpose of inspecting the Shell Work and the Finish Work to verify that it
conforms with the Shell Plans and the Approved Interior Plans; provided,
however, that Tenant shall notify Landlord of any proposed entry and secure the
approval of Landlord (which approval shall not be unreasonably withheld,
conditioned or delayed) prior to such entry so as not to unreasonably interfere
with the progress of the Shell Work or the Finish Work being carried on at the
time. The exercise by Tenant of the aforesaid rights and/or the failure of
Tenant and Tenant's Program Manager to object to the Shell Work or the Finish
Work or a defect in the Shell Work or the Finish Work or any part thereof shall
not be deemed to be an acquiescence in, or acceptance of, any defect in the
Shell Work or the Finish Work or any non-performance by Landlord of its
construction obligations hereunder. Landlord agrees that Tenant is not required
to inspect or examine the Shell Work of the Finish Work to discover defects or
deficiencies therein, and that Tenant's failure to observe, discover or
otherwise notice any defect or deficiency in the Shell Work or the Finish Work,
either directly or through Tenant's Program Manager or other consultant or
person hired to assist Tenant, shall not
33
relieve Landlord of its responsibilities under this Exhibit B or the Lease. Any
---------
entry by Tenant on the Leased Premises in order to perform any portion of
Tenant's fixturing or other work to be performed by Tenant under this Lease
shall not be construed as an acceptance of the Leased Premises by Tenant under
the provisions of the Lease or as a waiver of any of the provisions of this
Exhibit B.
---------
11. Punchlist. Landlord shall repair, replace and/or complete any
---------
punchlist items identified on the Certificates of Substantial Completion
executed by Landlord's architect with respect to the Shell Work and Tenant's
architect with respect to the Finish Work with all due diligence; provided,
however, that if such punchlist items are not completed within sixty (60) days
after the Substantial Completion Date, Tenant shall be entitled to either (a)
withhold from any amounts that Tenant is required to pay Landlord for Above-
Allowance Work the value of the completion of such punchlist items (as
reasonably determined in writing by Landlord and Tenant on or about the
Substantial Completion Date) until such time as Landlord completes such
punchlist items; or (b) in the event Tenant does not owe Landlord any amounts
for Above-Allowance Work from which to withhold payment, Tenant may complete
such punchlist items, and the value of completion of such punchlist items (as
reasonably determined by Landlord and Tenant on or about the Substantial
Completion Date) may be deducted from Minimum Annual Rent.
12. Commissioning. Landlord shall provide Tenant with reasonable
-------------
prior notice of and Tenant may attend the commissioning meetings contemplated in
the Shell Plans and Specifications and the Finish Plans and Specifications
identified on Exhibits B-2 and B-4, respectively, at which time Landlord and its
------------ ---
subcontractors shall inspect and conduct tests to verify and confirm that those
mechanical and electrical systems (specified in the such specifications)
servicing the Building are operational in accordance with Exhibits B-2 and B-4.
------------ ---
13. Landlord's Representations, Warranties, and Covenants. Landlord
-----------------------------------------------------
hereby represents, warrants and covenants to Tenant, as an inducement to Tenant
to enter into the Lease, as follows:
(a) As of the Commencement Date, the Shell Work will be in compliance with
all Laws, including, but not limited to, the Americans with
Disabilities Act;
(b) As of the Commencement Date, electricity, water and sewer utilities,
and the installation of telephone conduit to the Building, will be
available to and adequate for the Leased Premises;
(c) Landlord shall secure all fees, permits, licenses and inspections
necessary for the construction of the Total Project;
(d) Landlord will fully cooperate with Tenant to obtain all special
permits necessary to accommodate Tenant's intended use of the Leased
Premises;
(e) As of the date of this Lease, and limited to the best of Landlord's
actual knowledge, it being agreed that the term "to the best of
Landlord's actual knowledge" shall mean to the actual knowledge
exclusively of ▇▇▇▇ ▇▇▇▇▇▇▇, Senior Vice President of Duke-Weeks
Realty Corporation and ▇▇▇▇ ▇▇▇▇▇▇▇, Project Manager-St. Louis of Duke
Construction Limited Partnership,
(i) there are no restrictions or covenants which might adversely
affect the Permitted Use; and
(ii) there is no pending or threatened litigation, including
condemnation proceedings, which might affect the Permitted Use;
(f) During the Term and the Extension Terms, Landlord shall operate the
Leased Premises in a first-class manner;
34
(g) Landlord shall cause the construction of the Total Project to be
performed in accordance with the Project Schedule, subject to Tenant
Delays and Force Majeure Events, and Landlord shall cause the
construction of the Total Project to be performed in accordance with
the Shell Plans and the Approved Interior Plans, and all deviations or
changes from the Shell Plans and the Approved Interior Plans shall be
performed under Change Orders executed by Tenant;
(h) The construction of the Total Project will be of good quality and of
new material, and such construction will be free from any defects or
deficiencies in workmanship or materials (ordinary wear and tear
excepted), all for a period of one (1) year from the Substantial
Completion Date;
(i) Any guaranties or warranties held by Landlord or given for Landlord's
benefit from third parties covering the construction of the Total
Project shall be exercised by Landlord for Tenant's benefit; and
(j) In the event any lien is filed against the Leased Premises for work
performed with respect to the Total Project and such lien is not the
result of Tenant's failure to compensate Landlord for Above-Allowance
Work or any portion of the work which is the sole responsibility of
Tenant under the terms of this Lease, Landlord shall cause such lien
to be discharged of record or Landlord shall insure or bond over such
lien within thirty (30) days after notice of filing such lien.
14. Impact Fees. Landlord shall be responsible for the payment of
-----------
all impact fees and similar charges with respect to the Leased Premises and the
transactions contemplated under the Lease, except as provided in Section
3.02(b).
15. Latent Defects. Landlord shall promptly correct all latent
--------------
defects in workmanship or materials comprising the Shell Work or the Finish Work
of which Tenant gives Landlord written notice within one (1) year following the
Substantial Completion Date.
35
EXHIBIT B-1
-----------
Total Project Cost
------------------
Description Value Type of Cost
----------- ----- ------------
Land $ 2,093,924.00 Fixed Cost Item
Shell Construction Cost
(Cost Plus GMP) $ 9,668,341.00 Fixed Cost Item
(excluding Allowance
Items)
Tenant Improvements $ 3,066,150.00 Allowance Item
Shell Architectural & Engineering $ 385,000.00 Variable Cost Item
Interior Space Planning & Design $ 271,000.00 Fixed Cost Item
Shell Permits $ 62,000.00 Variable Cost Item
Legal $ 20,000.00 Variable Cost Item
Taxes $ 30,000.00 Variable Cost Item
Brokerage Fees $ 905,137.00 Variable Cost Item
Misc. Financing Fees $ 24,381.00 Variable Cost Item
Contingency (1%) $ 179,950.00 Variable Cost Item
Financing Fees $ 6,671.00 Variable Cost Item
Construction Loan Interest @ 0.25% $ 44,988.00 Variable Cost Item
Construction Period Interest @ 9% $ 732,158.00 Variable Cost Item
Developer Fee @ 3% $ 539,850.00 Variable Cost Item
Total Project Cost $18,029,550.00
36
EXHIBIT B-1
Shell Construction Cost Breakdown
122.646 RSF
====================================================================================================================================
Cost per Sq.
Line # Description Total Cost Ft. Firm or Allowances
====================================================================================================================================
1 Earthwork $ 264,568.00 $ 2.16
------------------------------------------------------------------------------------------------------------------------------------
2 Site Concrete $ 85,530.00 $ 0.70
------------------------------------------------------------------------------------------------------------------------------------
3 Site Utilities $ 204,971.00 $ 1.67
------------------------------------------------------------------------------------------------------------------------------------
4 Asphalt Paving $ 276,970.00 $ 2.26
------------------------------------------------------------------------------------------------------------------------------------
5 Landscape & Irrigation Allowance $ 150,000.00 $ 1.22 Allowance
------------------------------------------------------------------------------------------------------------------------------------
6 Fountain/Reflecting Pool $ 59,000.00 $ 0.48 Allowance
------------------------------------------------------------------------------------------------------------------------------------
7 Site Lighting $ 94,685.00 $ 0.77
------------------------------------------------------------------------------------------------------------------------------------
8 Total Sitework $ 1,135,724.00 $ 9.26
------------------------------------------------------------------------------------------------------------------------------------
9 Bldg. CIP & Precast Concrete $ 935,084.00 $ 7.62
------------------------------------------------------------------------------------------------------------------------------------
10 Structural Steel, Decking and Misc. Iron $ 942,632.00 $ 7.69
------------------------------------------------------------------------------------------------------------------------------------
11 Lobby Stair Railing & Applied Finishes Allowance $ 111,205.00 $ 0.91
------------------------------------------------------------------------------------------------------------------------------------
12 Rough & Finish Carpentry $ 23,206.00 $ 0.19
------------------------------------------------------------------------------------------------------------------------------------
13 Roofing $ 98,395.00 $ 0.80
------------------------------------------------------------------------------------------------------------------------------------
14 Roof Screen $ 32.480.00 $ 0.26
------------------------------------------------------------------------------------------------------------------------------------
15 Caulking & Sealants $ 18,704.00 $ 0.15
------------------------------------------------------------------------------------------------------------------------------------
16 Doors, Frames & Hdwr. $ 96,800.00 $ 0.79
------------------------------------------------------------------------------------------------------------------------------------
17 Aluminum Framing & Glazing $ 1,138,737.00 $ 9.28
------------------------------------------------------------------------------------------------------------------------------------
18 Metal Studs, insulation & Drywall $ 343,593.00 $ 2.80
------------------------------------------------------------------------------------------------------------------------------------
19 Ceramic Tile $ 45,090.00 $ 0.37
------------------------------------------------------------------------------------------------------------------------------------
20 Acoustical & Drywall Ceilings $ 299,422.00 $ 2.44
------------------------------------------------------------------------------------------------------------------------------------
21 Lobby Stone Work $ 69,150.00 $ 0.56
------------------------------------------------------------------------------------------------------------------------------------
21A Atrium Carpet $ 3,540.00 $ 0.03 Allowance
------------------------------------------------------------------------------------------------------------------------------------
22 Painting & Wallcoverings $ 43,718.00 $ 0.36
------------------------------------------------------------------------------------------------------------------------------------
23 Interior Signage $ 12,000.00 $ 0.10 Allowance
------------------------------------------------------------------------------------------------------------------------------------
23A Exterior Signage $ 35,000.00 $ 0.29 Allowance
------------------------------------------------------------------------------------------------------------------------------------
24 Fire Extinguishers and Cabinets $ 1,975.00 $ 0.02
------------------------------------------------------------------------------------------------------------------------------------
25 Toilet Partitions & Accessories $ 29,810.00 $ 0.24
------------------------------------------------------------------------------------------------------------------------------------
25A Scissors Lift $ 7,530.00 $ 0.06
------------------------------------------------------------------------------------------------------------------------------------
26 Elevators Cab Finishes (Per Sac 3. #31) $ 20,000.00 $ 0.16 Allowance
------------------------------------------------------------------------------------------------------------------------------------
27 Elevators $ 120,000.00 $ 0.98
------------------------------------------------------------------------------------------------------------------------------------
28 Plumbing $ 210,100.00 $ 1.71
------------------------------------------------------------------------------------------------------------------------------------
29 Sprinkler Fire Protection System $ 235,008.00 $ 1.92
------------------------------------------------------------------------------------------------------------------------------------
30 HVAC $ 1,015,006.00 $ 8.28
------------------------------------------------------------------------------------------------------------------------------------
31 Electrical $ 1,517,358.00 $ 12.37
------------------------------------------------------------------------------------------------------------------------------------
32 CATV and Card Access Systems (Per Sac. 3-#35) $ 125,000.00 $ 1.02 Allowance
------------------------------------------------------------------------------------------------------------------------------------
33 General Conditions $ 364,835.00 $ 2.97
------------------------------------------------------------------------------------------------------------------------------------
34 Total Building $ 7,895,378.00 $ 64.38
------------------------------------------------------------------------------------------------------------------------------------
35 Total Sitework & Building $ 9,031,102.00 $ 73.64
------------------------------------------------------------------------------------------------------------------------------------
36 Payment & Performance Bond $ - $ - None
------------------------------------------------------------------------------------------------------------------------------------
37 Builders Risk insurance $ - $ - Project Cost
------------------------------------------------------------------------------------------------------------------------------------
38 Contractor's Contingency $ - $ - None
------------------------------------------------------------------------------------------------------------------------------------
39 Overhead $ 350,482.00 $ 2.86
------------------------------------------------------------------------------------------------------------------------------------
40 Fee $ 286,757.00 $ 2.34
------------------------------------------------------------------------------------------------------------------------------------
41 Shell Construction Cost (excl. T.I.) $ 9,668,341.00 $ 78.83
====================================================================================================================================
36A
EXHIBIT B-2
Shell Plans and Specifications
June 7, 2000
37
Unigraphics Solutions -- Riverport Development -- Maryland Heights, Missouri
Project Schedule
38
EXHIBIT B-4
-----------
Approved Interior Plans and Specifications
------------------------------------------
To Be Attached After
Lease Execution
39
EXHIBIT C
---------
RULES AND REGULATIONS
1. Tenant shall not deposit any trash, refuse, cigarettes or other
substances of any kind within or around the Leased Premises, except in proper
refuse containers. Tenant shall exercise its best efforts to keep the sidewalks,
entrances, passages, courts and parking areas in and about the Building clean
and free from rubbish. Tenant shall not obstruct or use any elevators,
stairways, corridors or halls for any purpose other than ingress and egress.
Tenant shall not install, construct or place any improvements, furniture or
structures outside of the Building without first securing Landlord's reasonable
approval.
2. Tenant shall not change any locks in the Building without first
obtaining Landlord's written approval, and if Tenant changes any locks, keys
must be appropriately mastered to Landlord's keying system at Tenant's cost.
3. Tenant shall not install any radio, television or other antenna,
satellite dish, loudspeaker or other device on the roof or exterior walls of the
Building without Landlord's prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed. The installation of such devices
shall be subject to the terms and conditions set forth in Section 7.03 of the
Lease. Tenant shall not be permitted to penetrate the membrane of the roof of
the Building with respect to any such installation. No TV or radio or recorder
shall be played in such a manner as to cause a nuisance.
4. No street parking will be permitted. Visitor and handicapped parking
designations shall be observed.
5. Tenant shall not inscribe any inscription, or post, place or in any
manner display any sign, notice or any advertising matter whatsoever, anywhere
in or about the Building or visible from outside the Building, without first
obtaining Landlord's written consent thereto or except as expressly provided in
the Lease. Any awnings or other projections which Tenant proposes to attach to
the Building shall be subject to the terms and conditions of Section 7.03 of the
Lease.
6. If Tenant desires telegraphic or telephonic connections in addition to
those installed in connection with the initial construction of the Building and
the interior improvements thereto, Landlord will direct the electricians as to
where the wires are to be introduced and without such direction, no boring or
cutting for wires shall be permitted.
7. Tenant shall lock the doors when leaving the Building at close of
business or at other times when the Building is unoccupied.
8. Landlord retains the power to prescribe the weight and proper position
of safes and all other heavy objects located on or within the Leased Premises.
All safes, furniture, boxes and bulky articles and packages shall be moved into
or out of the Building or from one part of the Building to another under
supervision of Landlord and at such times and according to such regulations as
may be designated from time to time by Landlord and at the entrance designated
by the Landlord. Tenant shall be responsible for all damage to the walls, floors
or other parts of the Building caused by or connected with any moving or
delivery into or removal from the Building of any safe, furniture, boxes or
bulky article while in the Building at Tenant's request. No moving out shall
occur without the written consent of Landlord in each instance. The Building and
parking lot shall not be overloaded.
9. The sinks, water closets, toilets and other apparatus shall not be
used for any purpose other than those for which they are constructed, and no
sweepings, rubbish, rags or other substances shall be thrown therein. All
damages resulting from any misuse of the foregoing apparatus by Tenant, its
assignees or subtenants or their respective servants, employees, agents,
visitors or licensees shall be borne by the Tenant or its subtenants or
assignees, as the case may be, subject to Article 9 of the Lease.
40
10. The Leased Premises shall not be used for manufacturing or for the
storage of merchandise, except as such storage may be incidental to the
Permitted Use defined in the Lease. Tenant shall not occupy or rent any portion
of the Leased Premises for use as (i) an office for the manufacture or sale of
liquor, narcotics, or tobacco in any form, (ii) a medical office, (iii) a ▇▇▇▇▇▇
or manicure shop, or (iv) an employment bureau.
11. Tenant, its subtenants or assignees, servants, employees, agents,
visitors or licensees, shall not at anytime bring or keep upon the Leased
Premises any flammable, combustible or explosive fluid, chemical or substance or
firearm, except for items typically used in office buildings, such as cleaning
and copying supplies, and except for cigarette lighters
12. Any janitorial service engaged by Tenant to perform janitorial work or
any other person or entity engaged by Tenant to perform other work or provide
any service in or about the Leased Premises shall, while performing such work or
providing such services in or about the Leased Premises, be subject to and under
the control and direction of the Landlord's property manager for the Building
(but not as agent or servant of said property manager or Landlord). Such
janitorial service or other person or entity shall be deemed an agent for
purposes of Section 9.03 of the Lease. Such janitorial service or other such
person or entity engaged by Tenant to perform work or providing services in, on,
or about the Leased Premises shall be reputable and shall be properly insured
and financially capable of covering uninsured damage.
13. Neither any room or rooms within the Building nor the parking lot
shall be occupied or used as sleeping or lodging quarters.
14. No animal (except for seeing eye dogs) or bird shall be allowed in any
part of the Building without the written consent of Landlord.
15. Landlord reserves the right to exclude from the Leased Premises all
drunken persons, idlers and peddlers, solicitors and generally persons of a
character or conduct to create disturbance and persons entering in crowds or in
such unusual numbers as to cause a nuisance.
16. Bicycles or other vehicles shall not be permitted anywhere inside or
on the sidewalks outside of the Building, except in those areas designated by
Landlord for bicycles or vehicle parking.
17. Window shades, blinds or curtains of a uniform building standard,
color and pattern only shall be used throughout the Building to give uniform
color exposure through exterior windows.
18. Landlord shall have the right to prohibit any publicity, advertising
or use of the name of the Building by Tenant which, in Landlord's opinion, tends
to impair the reputation of the Building or its desirability as a building for
offices, and upon written notice from Landlord, Tenant shall refrain from or
discontinue any such publicity, advertising or use of the Building name.
19. There shall not be used in any space, or in the public halls of the
Building, either by Tenant or others, any hand trucks, except those equipped
with rubber tires and side guards or such other material handling equipment as
Landlord may reasonably approve.
20. The Building will be designated as a non-smoking Building. Smoking is
strictly prohibited within the Building. Smoking shall only be allowed in areas
designated as a smoking area by Landlord. Tenant and its employees,
representatives, contractors and invitees shall not smoke within the Building.
21. These rules and regulations are in addition to and shall not be
construed in any way to modify or amend the Lease in whole or in part.
22. These rules and regulations are incorporated as part the terms and
conditions
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of the Lease. In the event there is any conflict between the terms and
conditions of the Lease and any such rules and regulations, the terms of the
Lease shall prevail.
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