Exhibit 10.13
GWYNEDD HALL - SENTRY PARK WEST
OFFICE LEASE
BETWEEN
SENTRY WEST JOINT VENTURE, AN ILLINOIS JOINT VENTURE ("LANDLORD")
by its agent, Equity Office Properties, Inc.
AND
INSTITUTE FOR BIOLOGICAL RESEARCH AND DEVELOPMENT ("TENANT")
TABLE OF CONTENTS
I. Basic Lease Information-Definitions......................................................................4
II. Lease Grant..............................................................................................7
III. Adjustment of Commencement Date/Possession...............................................................7
V. Rent....................................................................................................10
VI. Security Deposit........................................................................................11
VII. Services to be Furnished by Landlord....................................................................11
VIII. Leasehold Improvements..................................................................................14
IX. Graphics................................................................................................15
X. Repairs and Alterations by Tenant.......................................................................15
XI. Use of Electrical and HVAC Services by Tenant...........................................................16
XII. Entry by Landlord.......................................................................................17
XIII. Assignment and Subletting...............................................................................17
XV. Indemnity and Waiver of Claims..........................................................................20
XVI. Tenant's Insurance......................................................................................21
XVII. Subrogation.............................................................................................23
XVIII. Landlord's Insurance....................................................................................23
XIX. Casualty Damage.........................................................................................24
XX. Demolition..............................................................................................26
XXI. Condemnation............................................................................................26
XXII. Events of Default.......................................................................................27
XXIII. Remedies................................................................................................28
XXIV. LIMITATION OF LIABILITY.................................................................................30
XXV. No Waiver...............................................................................................30
XXVI. Event of Bankruptcy.....................................................................................31
XXVII. Quiet Enjoyment.........................................................................................32
XXVIII. Relocation..............................................................................................32
XXIX. Holding Over............................................................................................32
XXX. Subordination to Mortgages..............................................................................32
XXXI. Attorney's Fees.........................................................................................34
XXXII. Notice..................................................................................................34
XXXIII. Intentionally Omitted...................................................................................35
XXXIV. Excepted Rights.........................................................................................35
XXXIV. Surrender of Premises...................................................................................35
XXXV. Miscellaneous...........................................................................................36
OFFICE LEASE AGREEMENT
This Office Lease Agreement (the "Lease"), is made and entered into as
of the first day of FEBRUARY, 1994, by and between Sentry West Joint Venture, an
Illinois joint venture ("Landlord") by its Agent, Equity Office Properties, Inc.
and Institute for Biological Research and Development, a Delaware corporation
("Tenant").
I. BASIC LEASE INFORMATION-DEFINITIONS.
A. The following is some of the basic lease information and defined
terms used in this Lease.
1. "Broker" means Grubb & Ellis.
2. "Building" shall mean the office building located at 1777
Sentry Parkway West, Blue Bell, Montgomery County, State of Pennsylvania, and
commonly known as Gwynedd Hall -Sentry Park West.
3. The "Lease Term" shall mean a period of forty-eight (48)
months commencing on the later to occur of (1) February 1, 1994 (the "Target
Commencement Date") and (II) the date upon which Landlord Work in the Premises
has been substantially completed, as such date is determined pursuant to Section
III.A. hereof (the later to occur of such dates being defined as the
"Commencement Date"). The "Termination Date" shall, unless sooner terminated as
provided herein, mean the last day of the Lease Term. Notwithstanding the
foregoing, if the Termination Date, as determined herein, does not occur on the
last day of a calendar month, Landlord, shall extend the Lease Term by the
number of days necessary to cause the Termination Date to occur on the last day
of the last calendar month of the Lease Term. Tenant shall pay Base Rental and
Additional Bass Rental for such additional days at the same rate payable for the
portion of the last calendar month immediately preceding such extension. The
Commencement Date, Lease Term (including any extension by Landlord pursuant to
this subsection) and Termination Date shall be set forth in a Commencement
Letter prepared by Landlord and executed by Tenant in accordance with the
provisions of Section III.A. hereof.
4. "Guarantor(s)" shall mean Kuraya Yakumin and any other
party that agrees in writing to guarantee the Lease.
5. "Landlord Work" shall mean the work, if any, that Landlord
is obligated to perform in the Promises pursuant to the Work Letter Agreement
attached hereto as Exhibit "C".
6. "Notice Addresses" shall mean the following addresses for
Tenant and Landlord, respectively:
Tenant:
Prior to the Commencement Date, notices shall be sent to
Tenant at the following address:
IBRD
2525 Campus Drive
Irvine, CA 92715
Attn: Dottie Soteriou
On or after the Commencement Date, notices shall be sent to
Tenant at the Promises, with a copy to Tenant at the above
address.
Landlord:
Sentry West Joint Venture
c/o FKB Management, Inc.
1777 Sentry Park West - Gwynedd Hall - Suite 301
Blue Bell, PA 19422
Attention: Building Manager
With a copy to:
Equity Officer Property, Inc.
Two North Riverside Plaza
Suite 2200
Chicago, Illinois 60606
Attention: General Counsel
Payments of Rent only shall be made payable to the order of
Sentry West Joint Venture at the following address:
Sentry West Joint Venture
c/o FKB Management, Inc.
1777 Sentry Park West - Gwynedd Hall - Suite 301
Blue Bell, PA 19422
7. "Permitted Use" shall mean: General Office Use
8. "Premises" shall mean the area located on the 1st floor of
the Building and outlined on Exhibit A-2 attached hereto and Incorporated herein
and known as Suite # 100.
9. "Prepaid Rental": Eleven Thousand, Seven Hundred
Twenty-One and 50/100 Dollars ($11,721.50) payable by Tenant upon execution of
this Lease by Tenant in accordance with Article V hereof.
10. "Rentable Area of the Premises" shall mean the area
contained within the demising walls of the Premises and any other area
designated for the exclusive use of Tenant, without deduction for any columns or
projections necessary to the Building, plus a proportionate share of any Common
Areas located on the floor(s) on which the Premises is located and a
proportionate share of the Building's public areas, management office,
engineer's office and "Mechanical Spaces" i.e. spaces housing service areas,
equipment and/or access corridors for HVAC and communications facilities,
plumbing, fire protection and elevators. The Rentable Area of the Premises is
deemed for all purposes under this Lease to be 11,032 square feet. The "Rentable
Area of the Park" is deemed for all purposes under this Lease to be 216,000
square feet. The square footage amounts set forth for the Rentable Area of the
Premises and the Rentable Area of the Park constitute a material part of the
economic basis of this Lease and the execution thereof by Landlord and shall not
be adjusted without the written consent of Landlord.
11. "Security Deposit" shall mean the sum of Eleven Thousand
Seven Hundred Twenty-One and 50/100 Dollars ($11,721.50).
12. "Tenant's Pro Rate Share" shall mean 5.1074 percent
(5.1074%), which is the sum derived by dividing the Rentable Area of the
Premises by The Rentable Area of the Park and multiplying the result thereof by
one hundred (100).
B. The following are additional definitions of some of the defined
terms used in the Lease.
1. "Basic Costs" shall mean the direct and indirect costs and
expenses incurred in connection with the Park more fully defined in Exhibit B-2.
2. "Building Standard" shall mean the type, grade, brand,
3
quality and/or quantity of materials Landlord designates from time to time to be
the minimum quality and/or quantity to be used in the Park.
3. "Business Day(s)" shall mean Mondays through Fridays
exclusive of the normal business holidays ("Holidays") of New Year's Day,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day,
and such other days as Landlord may designate which are then treated as business
holidays at most comparable projects in Montgomery County.
4. "Common Areas" shall mean those areas provided for the
common use or benefit of all tenants generally and/or the public, such as
corridors, elevator foyers, common mail rooms, restrooms, vending areas, and
lobby areas (whether at ground level or otherwise), and other similar facilities
including the "Exterior Common Areas" as defined in Exhibit B-2.
5. "Maximum Rate" shall mean the greatest per annum rate of
interest permitted from time to time under applicable federal and state law.
6. "Normal Business Hours" for the Park shall mean 8:00 a.m.
to 6:00 p.m. Mondays through Fridays, exclusive of Holidays, and such other
hours as Landlord may designate from time to time.
7. "Prime Rate" shall mean the per annum interest rate
publicly announced by The First National Bank of Chicago from time to time
(whether or not charged in each instance) as its prime or base rate.
8. "Park" shall mean the area described on Exhibit A-2
attached hereto and all improvements located thereon, including, without
limitation, the Building and the following buildings: Meriontowle Hall, Abington
Hall, Provident Bank Building and Dublin Hall.
II. LEASE GRANT. Subject to and upon the terms herein set forth, Landlord leases
to Tenant and Tenant leases from Landlord the Premises. Subject to the terms and
conditions of this Lease, Landlord shall provide to Tenant possession and
enjoyment of the Premises and the non-exclusive use of the "Common Areas" (as
defined in Article I of this Lease) during the period commencing on the
Commencement Date and ending on the expiration or earlier termination of this
Lease.
III. ADJUSTMENT OF COMMENCEMENT DATE/POSSESSION.
4
A. If Landlord is performing Landlord Work in the Premises, the Lease
Term shall not commence until the later to occur of the Target Commencement Date
and the date that Landlord has substantially completed the Landlord Work;
provided, however, that if Landlord shall be actually delayed in substantially
completing the Landlord Work as a result of the occurrence of any of the
following (a "Delay"):
1. Tenant's failure to furnish information in accordance with
the Work Letter Agreement or to respond to any request by Landlord for any
approval or Information within any time period prescribed, or if no time period
is prescribed, then within three (3) Business Days of such request; or
2. Tenant's insistence on materials, finishes or
installations that have long lead times after having first been informed in
writing by Landlord that such materials, finishes or installations will cause a
Delay; or
3. Changes in any plans and specifications made at the
request of Tenant, in writing; or
4. The performance by a person or entity employed by Tenant
in the completion of any work (all such work and such persons or entities being
subject to the prior approval of Landlord) which unreasonably interferes with
the construction of the Landlord Work; or
5. Any request by Tenant in writing that Landlord delay the
completion of any of the Landlord Work; or
6. Any breach or default by Tenant In the performance of
Tenant's obligations under this Lease; or
7. Any delay resulting from Tenant's having taken possession
of the Premises for any reason prior to substantial completion of the Landlord
Work; or
8. Any other delay chargeable to unreasonable acts or
omissions of Tenant, its agents, employees or independent contractors;
then, for purposes of determining the Commencement Date, the date of substantial
completion shall be deemed to be the day that said Landlord Work would have been
substantially completed absent the net effect of such Delay(s). The Landlord
Work shall be deemed to be substantially completed on the date
5
that is five (5) business days following receipt by Tenant of a factually
correct written notice from Landlord that all of the following have occurred (or
would have occurred absent any Delays): (a) Landlord has tendered possession of
the Premises to Tenant; (b) Landlord's Work has been completed, other than any
details of construction, mechanical adjustment or any other matter in the nature
of punch-list items, the existence of which does not interfere with Tenant's use
of the Premises; (c) a Temporary Certificate of Occupancy is in effect with
respect to the Premises; (d) the Common Areas are completed and operating
(including without limitation all parking facilities); and (e) all of the
services and utilities to the Premises and the Common Area ware operating.
Except as provided below with respect to Tenant's termination rights, the
adjustment of the Commencement Date and, accordingly, the postponement of
Tenant's obligation to pay Rent shall be Tenant's sole remedy and shall
constitute full settlement of all claims that Tenant might otherwise have
against Landlord by reason of the Premises not being ready for occupancy by
Tenant on the Target Commencement Date. Landlord's determination of the
Commencement Date shall, if not disputed by Tenant within five (5) Business Days
after Tenant's receipt of the "Commencement Letter" (defined below), be final
and binding on all parties for all purposes, Including, without limitation,
determination of the date of commencement of the Lease Term and of Tenant's
obligation to pay Rent hereunder. Promptly after the determination of the
Commencement Date by Landlord, Landlord shall prepare a letter agreement (the
"Commencement Letter") setting forth the Commencement Date, the Termination Date
and any other dates that are affected by the adjustment of the Commencement
Date. Tenant, within five Business (5) days after receipt thereof from Landlord,
shall execute the Commencement Letter and return the same to Landlord.
Notwithstanding anything herein to the contrary, Landlord shall use reasonable
efforts to cause the Commencement Date to occur on or before February 1, 1994,
or as soon thereafter as is reasonably practicable. In the event that the
Commencement Date does not occur, for any reason other than Tenant Delays or
Force Majeure delays, on or before May 1, 1994, then Tenant, as its sole remedy,
shall be entitled to terminate this Lease by irrevocable written notice to
Landlord on or before the earlier to occur of the 15th day thereafter and the
day before the Commencement Date occurs. In the event that the Commencement Date
does not occur, for any reason other than Tenant Delays (including any Force
Majeure reason) on or before July 1, 1994, Tenant, as its sole remedy, shall be
entitled to terminate this Lease by irrevocable written notice to Landlord on or
before the earlier to occur of the 15th day thereafter and the pay prior to the
Commencement Date.
B. Subject to latent defects and the completion or correction of any
items of Landlord Work set forth on a construction punchiest jointly prepared
6
by Landlord and Tenant in good faith based on a walk through of the Premises
within fifteen (1 5) days after substantial completion (or subsequently
disclosed on a second punchiest prepared within forty-five (45) days after
substantial completion), by taking possession of the Premises, Tenant is deemed
to have:
1. accepted the Premises and agreed that the Premises is in
good order and satisfactory condition, with no representation or warranty by
Landlord as to the condition or suitability of the Premises or of the Building
for Tenant's use thereof; and
2. agreed that Landlord has no obligation to clean, decorate,
alter, remodel, Improve or repair the Premises or the Building unless said
obligation is specifically set forth in this Lease. Landlord agrees to proceed
in good faith to complete or correct any items set forth on the punchiest.
Notwithstanding the foregoing to the contrary, Landlord shall not be responsible
for the correction of any latent defects in Tenant's equipment or other personal
property, even if such equipment or personal property was installed by Landlord
as part of the Landlord Work.
C. Notwithstanding anything to the contrary contained in the Lease,
Landlord shall not be obligated to tender possession of any Offering Space or
Refusal Space that is occupied by a third party on the date that Landlord would
otherwise be required to deliver possession, nor shall Landlord have any other
obligations to Tenant under this Lease with respect to such space until the date
Landlord: 1. recaptures such space from such existing tenant or occupant; and 2.
regains the legal right to possession thereof. This Lease shall not be affected
by any such failure to deliver possession and Tenant shall have no claim for
damages against Landlord as a result thereof, all of which are hereby waived and
released by Tenant. Notwithstanding the foregoing, Landlord agrees to proceed in
good faith and with due diligence to obtain possession of any such Offering
Space or Refusal Space. In such event, the commencement date for such space
shall be postponed until the date Landlord delivers possession of the Premises
to Tenant and any other commencement conditions are satisfied.
D. So long as such work does not interfere with the completion of
Landlord's Work, Tenant shall have the right prior to the Commencement Date to
enter the Premises to install Tenant's communication and computer systems.
Landlord shall cooperate with Tenant in scheduling performance of the Landlord's
Work so that Tenant's communication and computer systems can be installed as
efficiently as possible. Tenant's entry into the Premises prior to the
Commencement Date for the purpose of installing its
7
communication and computer systems shall be subject to all of the terms and
conditions of this Lease, including, without limitation, the insurance and
indemnity provisions, but no Base Rental or Additional Base Rental shall accrue
until the Commencement Date. If Tenant enters the Premises prior to the
Commencement Date for the purpose of conducting its business therein such
possession shall be subject to all of the terms and conditions of the Lease and
Tenant shall pay Base Rental and Additional Base Rental to Landlord on a per
diem basis for each day of occupancy prior to the Commencement Date.
IV. USE. The Premises shall be used for the Permitted Use and for no other
purposes. Tenant agrees not to use or permit the use of the Premises for any
purpose which is illegal, dangerous to life, limb or property or which, in
Landlord's opinion, creates a nuisance or which would increase the cost of
insurance coverage with respect to the Building. Tenant shall conduct its
business and control its agents, servants, contractors, employees, customers,
licensees, and invitees in such a manner as not to interfere with, annoy or
disturb other tenants, or in any way interfere with Landlord in the management
and operation of the Building. Tenant will maintain the Premises in a clean and
healthful condition, and comply with all laws, ordinances, orders, rules and
regulations of any governmental entity with reference to the operation of
Tenant's business and to the use, condition, configuration or occupancy of the
Premises, including without limitation, the Americans with Disabilities Act.
Notwithstanding the foregoing, nothing herein shall be construed to require
Tenant to make structural changes to the Park or Premises, including changes to
windows, sprinkler heads and other Building systems and structural elements of
the Project or Premises, unless such changes are required as a result of the
specific nature of Tenant's use (as opposed to general office use) or because of
the specific nature of any alterations, additions or improvements performed by
Tenant or contractors retained directly by Tenant, nor shall Tenant be
responsible for the cost of compliance except and only to the extent such cost
is included as a Basic Cost pursuant to the terms of this Lease. Tenant will
comply with the rules and regulations of the Building adopted and altered by
Landlord from time to time and will use reasonable efforts to cause all of its
agents, servants, contractors, employees, customers, licensees and invitees to
do so, provided that Landlord has delivered to Tenant a copy of such rules and
regulations and that such rules and regulations (a) do not materially interfere
with Tenant's use of the Premises or the Common Areas, and (b) do not
unreasonably require Tenant to pay or incur any additional monetary obligations
or liabilities. Landlord shall not enforce the rules and regulations in a
discriminatory manner against Tenant, and Landlord shall use reasonable efforts
to enforce the rules and regulations against other tenants of the Park to the
extent necessary to avoid
8
interference by such other tenants with Tenant's use and enjoyment of the
Premises and Common Areas. All changes to such rules and regulations will be
sent by Landlord to Tenant in writing. A copy of the existing rules and
regulations is attached hereto as Exhibit D and made a part hereof. Tenant
agrees not to commit or allow any waste to be committed on any portion of the
Premises, and at the termination of this Lease to deliver up the Premises to
Landlord in accordance with Article XXXV hereof. Landlord, to the best of its
knowledge, represents and warrants to Tenant that, as of the Commencement Date,
the Premises (exclusive of any aspects of the Premises installed by Tenant), the
Building and the Common Areas shall comply with each applicable law, ordinance,
order, rule or regulation of any governmental body including, without
limitation, the Americans with Disabilities Act (ADA). Landlord shall be
responsible for complying with any such law, ordinance, order, rule or
regulation with respect to the Common Areas, the Building systems and the
Building (other than requirements resulting from changes in laws following the
Commencement Date to the extent that such requirements relate to Leasehold
Improvements in the Premises which do not constitute part of the Building
systems or structure, which requirements shall be Tenant's responsibility);
provided that Landlord shall have the right to contest any alleged violation in
good faith, including, without limitation, the right to apply for and obtain a
waiver or deferment of compliance, the right to assert any and all defenses
allowed by law and the right to appeal any decisions, judgments or rulings to
the fullest extent permitted by law. Landlord, after the exhaustion of any and
all rights to appeal or contest, will make all repairs, additions, alterations
or Improvements necessary to comply with the terms of any final order or
judgment, provided that if Landlord elects not to contest any alleged violation,
Landlord will promptly make all repairs, additions, alterations or improvements
necessary to comply with the notice of violation.
V. RENT.
A. Tenant covenants and agrees to pay to Landlord during the Lease
Term, without any setoff or deduction whatsoever, the full amount of all Base
Rental payments, and any adjustments thereof, due in accordance with the rental
schedule set forth in Exhibit B-1 hereof (the "Base Rental"), the full amount of
all payments of Additional Base Rental due in accordance with Exhibit B-2 hereof
(the "Additional Base Rental") and all such other sums of money as shall become
due under this Lease (including, without limitation, any charges for replacement
of electric lamps and ballasts and any other services, goods or materials
furnished by Landlord at Tenant's request), all of which hereinafter may be
collectively called "Rent." Except as otherwise provided herein, the Base Rental
and Additional Bass Rental for each calendar year or
9
portion thereof during the Lease Term, shall be due and payable in advance in
equal monthly installments on the first day of each calendar month during the
Lease Term and any extensions or renewals hereof, and Tenant hereby agrees to
pay such Base Rental and Additional Base Rental to Landlord without demand,
provided that the installment of Base Rental for the first full calendar month
of the Lease Term shall be payable upon the execution of this Lease by Tenant.
If the Lease Term commences on a day other than the first day of a month or
terminates on a day other than the last day of a month, then the installments of
Base Rental and Additional Base Rental for such month or months shall be
prorated, based on the number of days in such month. All such payments shall be
by a good and sufficient check. No payment by Tenant or receipt or acceptance by
Landlord of a lesser amount than the correct amount of Rent due under this Lease
shall be deemed to be other than a payment on account of the earliest Rent due
hereunder, nor shall any endorsement or statement on any check or any letter
accompanying any check or payment be deemed an accord and satisfaction, and
Landlord may accept such check or payment without prejudice to Landlord's right
to recover the balance or pursue any other available remedy. The acceptance by
Landlord of any Rent on a date after the due date of such payment shall not be
construed to be a waiver of Landlord's right to declare a default for any other
late payment. Except as otherwise specifically provided herein, Tenant's
covenant to pay Rent shall be independent of every other covenant set forth in
this Lease.
B. All Rent not paid within five (5) days after such amount was due and
payable shall bear interest from the date due until paid (unless Tenant explains
to Landlord in writing, in reasonable detail, that such delay resulted from a
good faith error by Tenant) at the lesser of (1) ten percent (10%) per annum or
(2) the Maximum Rate. In addition, if Tenant fails to pay any installment of
Base Rental, Additional Base Rental or any other item of Rent within five (5)
business days after written notice from Landlord that such amount was not paid
when due and payable hereunder, a service fee equal to five percent (5%) of such
unpaid amount will be due and payable immediately by Tenant to Landlord;
provided that such five (5) business-day period shall be ten (10) business days
for the first late charge imposed hereunder in any calendar year.
VI. SECURITY DEPOSIT. INTENTIONALLY OMITTED.
VII. SERVICES TO BE FURNISHED BY LANDLORD.
A. Subject to the provisions of Article XI below, Landlord, as part of
10
Basic Costs, agrees to furnish Tenant the following services:
1. Hot and cold water in the Common Area lavatories and cold
water at those points of supply provided for general use of tenants in the
Building, central heat and air conditioning in season, at such temperatures
thermostatically controlled by Tenant and in such amounts as are considered by
Landlord to be standard for buildings of similar class, size, age and location,
or as required by governmental authority. Notwithstanding the foregoing, Tenant
acknowledges that electricity to the Promises is separately metered and that the
electricity consumed in connection with supplying HVAC service to the Premises
is included on such meter and billed directly to Tenant in accordance with the
provisions of Article XI of this Lease. Notwithstanding the foregoing, if Tenant
requires HVAC service after Normal Business Hours, in addition to the cost of
electricity consumed, Tenant shall be required to pay Landlord a separate charge
for the cost incurred by Landlord for operating its water source heat pumps and
related equipment. Such additional costs shall be measured by a separate
override meter and allocated proportionally between Tenant and any other tenants
of the Building, if any, that requested after hours HVAC service for those hours
during which such service is being supplied to Tenant. Tenant shall pay Landlord
for such additional costs upon demand as additional Rent.
2. Routine maintenance and electric lighting service for all
Common Areas of the Building in the manner and to the extent; and replacement of
building standard fluorescent tubes, light bulbs and ballasts in the Premises as
required as a result of normal usage standard for buildings of similar class,
size, age and location.
3. Janitor service on Business Days in accordance with the
schedule attached hereto as Exhibit H (or such reasonably comparable
specifications designated by Landlord from time to time); provided, however, if
Tenant's use, floor covering or other improvements require special services,
Tenant shall, at Landlord's option, either (i) retain its own contractors (which
contractor shall be subject to Landlord's reasonable approval) to do such work
or, (ii) pay the additional cost reasonably attributable thereto as additional
Rent upon presentation of statements therefor by Landlord. Upon request from
Tenant, Landlord shall provide Tenant with a copy of its then current janitorial
and cleaning specifications.
4. Elevator service in common with other tenants of the
Building for ingress and egress to and from the floor of the Promises during
Normal Business Hours, provided that, subject to force majeure, at least one
11
(1) elevator shall be available to serve the Premises 24 hours per day, 7 days
a week.
5. Snow removal and ice treatment as necessary to provide the
parking required hereunder and access to the Premises.
Subject to Landlord's reasonable rules and regulations and
temporary closures for emergency purposes, Tenant shall have access to its
parking and the Premises 24 hours per day, 7 days per week.
B. Except for the alteration, maintenance and repair responsibilities
of Tenant with respect to the Premises which are expressly set forth in this
Lease, Landlord shall operate and maintain the Building and the Park in
accordance with all applicable laws, with all requirements of any applicable
board of property insurance underwriters (to the extent necessary for Landlord
to maintain the insurance required hereunder), and with the standards prevailing
from time to time for projects of similar class, size, age and location, and, in
any event, in as good a condition as at the time this Lease is executed by
Landlord and Tenant, reasonable wear and tear excepted. Except as otherwise
expressly provided herein, the failure by Landlord to any extent to furnish, or
the interruption or termination of these services in whole or in part, resulting
from adherence to laws, regulations and administrative orders, wear, use,
repairs, improvements, alterations, Force Majeure (as hereinafter defined) or
any other causes beyond the reasonable control of Landlord shall not render
Landlord liable in any respect nor be construed as an eviction of Tenant, nor
give rise to an abatement of Rent, nor relieve Tenant from the obligation to
fulfill any covenant or agreement hereof. Should any of the equipment or
machinery used in the provision of such services for any cause cease to function
properly, Landlord shall use reasonable diligence to repair such equipment or
machinery, but except as otherwise expressly provided herein, Tenant shall have
no claim for offset or abatement of Rent or damages on account of an
interruption in service or resulting therefrom. To the extent reasonably
possible based on the nature of the work to be performed, Landlord shall
schedule the performance of any repairs, improvements or alterations that will
result In an interruption of service for non Business Days or after Normal
Business Hours. Landlord's entire obligation with respect to the repair and
maintenance of the Premises are set forth In this Lease.
C. Notwithstanding anything to the contrary contained in this Section
VII if (I) Landlord ceases to furnish any utility or service to the Premises,
Building or Common Areas or any damaged or dysfunctional aspect of the Premises,
Building or Common Areas which is not Tenant's repair
12
responsibility interferes with Tenant's use or the Premises and Tenant notifies
Landlord of such cessation in writing (the "Interruption Notice'), (II) such
cessation or other problem does not arise as a result of an act or omission of
Tenant, (III) such cessation or other problem is not caused by a fire or other
casualty (in which case Article XIX shall control), (iv) the repair or
restoration of such cessation or other problem Is reasonably within the control
of Landlord, and (v) as a result of such cessation or other problem, the
Premises or a material portion thereof, is rendered untenantable (meaning that
Tenant Is unable to use the Premises in the normal course of its business) and
Tenant in fact ceases to use the Premises, or material portion thereof, then,
Tenant's sole remedy shall be as follows: on the third (3rd) consecutive
business day following the later to occur of the date the Premises (or material
portion thereof) becomes untenantable, the date Tenant ceases to use such space
and the date Tenant provides Landlord with an Interruption Notice, the Base
Rental and Additional Base Rental payable hereunder shall be abated on a per
them basis for each day after such three (3) business day period based upon the
percentage of the Premises so rendered untenantable and not used by Tenant, and
such abatement shall continue until the date the Premises become tenantable
again. Landlord agrees to proceed in good faith and with due diligence to
correct any such interruption of service or other problem. If, as a result of
any such interruption in services or other problem, all or any part of the
Premises are rendered untenantable for more than 30 consecutive days (or such
longer period as may be necessary to cure [not to exceed 60 days]) or more than
60 days (in the aggregate) in any lease year, Tenant may, at Tenant's option, by
30 days' prior written notice given to Landlord at any time after such 30th day
(as the same may be extended) or 60th day, as applicable, and before the
Premises are again usable, terminate this Lease.
D. Notwithstanding anything to the contrary contained in this Section
VII.B. if (I) Landlord ceases to furnish any utility or service to the Premises,
Building or Common Areas or any damaged or dysfunctional aspect of the Premises,
Building or Common Areas which is not Tenant's repair responsibility interferes
with Tenant's use or the Premises and Tenant notifies Landlord of such cessation
In writing (the "Interruption Notice"), (II) such cessation or other problem
does not arise as a result of an act or omission of Tenant, (III) such cessation
or other problem is not caused by a fire or other casualty (in which case
Article XIX shall control), (iv) the repair or restoration of such cessation or
other problem IS NOT reasonably within the control of Landlord, and (v) as a
result of such cessation or other problem, the Premises or a material portion
thereof, is rendered untenantable (meaning that Tenant is unable to use the
Premises in the normal course of its business) and Tenant in fact ceases to use
the Premises, or material portion thereof, then, Tenant's sole
13
remedy shall be as follows: on the fifteenth (15th) consecutive business day
following the later to occur of the date the Premises (or material portion
thereof) becomes untenable, the date Tenant ceases to use such space and the
date Tenant provides Landlord with an Interruption Notice, the Base Rental and
Additional Base Rental payable hereunder shall be abated on a per diem basis for
each day after such fifteen (15) business day period based upon the percentage
of the Premises so rendered untenantable and not used by Tenant, and such
abatement shall continue until the date the Premises become tenantable again.
Landlord agrees to proceed in good faith and with due diligence to correct any
such Interruption of service or other problem. If, as a result of any such
interruption in services or other problem, all or any part of the Premises are
rendered untenantable for more than 130 consecutive days, Tenant may, at
Tenant's option, by 30 days' prior written notice given to Landlord at any time
after such 130th day and before the Premises are again usable, terminate this
Lease. Notwithstanding anything in Section VII.C. or the VII.D. to the contrary,
it is understood and agreed that Landlord shall be entitled to take whatever
action is necessary to restore the interrupted services, including, without
limitation, the installation of a temporary generator to provide electrical
service to the Building, providing portable washroom facilities, etc. and, upon
such restoration of services, Tenant's obligation to pay Rent shall commence,
provided that (x) if Landlord elects to restore services by such temporary
measures, Landlord shall continue to provide such temporary services until the
interrupted services in question are restored, and (y) the furnishing of
temporary services shall not relieve Landlord of its obligation to proceed in
good faith to perform any necessary repairs, replacements or other work that is
necessary to restore the services in question.
E. Tenant expressly acknowledges that If Landlord, from time to time,
elects to provide security services, Landlord shall not be deemed to have
warranted the efficiency of such security personnel, service, procedures or
equipment and Landlord shall not be liable in any manner for the failure of any
such security personnel, services, procedures or equipment to prevent or
control, or apprehend any one suspected of personal injury or property damage
in, on or around the Park.
VIII. LEASEHOLD IMPROVEMENTS.
A. Except as otherwise specifically provided elsewhere in this Lease or
in the Work Letter Agreement, if any, attached hereto as Exhibit C and
Incorporated herein, all Installations and Improvements now or hereafter placed
on or In the Premises shall be for Tenant's account and at Tenant's cost, which
cost shall be payable by Tenant to Landlord upon demand as additional
14
Rent.
B. Any and all alterations, additions and improvements to the Premises,
all attached furniture, equipment and non-trade fixtures (collectively,
"Leasehold Improvements") shall, to the extent included In the Landlord Work, be
owned and insured by Landlord and shall remain upon the Premises, all without
compensation, allowance or credit to Tenant. Any unattached and movable
equipment or furniture, trade fixtures or other personalty of Tenant, including
computer, communications and security systems, and the wiring therefor,
("Tenant's Property") shall be owned and insured by Tenant, provided that Tenant
shall also be required to insure any additions, alterations and improvements
performed to the Premises subsequent to the performance of the Landlord Work by
Landlord. Landlord may, nonetheless, require Tenant to remove any Leasehold
Improvements performed by or for the benefit of Tenant (other than the Landlord
Work) and all electronic, phone and data cabling as are designated by Landlord
(the "Required Removables") at Tenant's sole cost. In the event that Landlord so
elects, Tenant shall remove such Required Removables on or before the expiration
or earlier termination of this Lease and repair any damage caused by such
removal. If Tenant fails to remove the Required Removables after Landlord's
request therefor, Landlord may remove, store or dispose of the Required
Removables at Tenant's cost, and repair any damage caused by such removal and
Tenant shall pay Landlord as additional Rent hereunder, on demand, all such
costs.
IX. GRAPHICS. Landlord shall provide and Install, at Tenant's cost, all letters
or numerals on the exterior of the Premises; all such letters and numerals shall
be In the standard graphics for the Building and no others shall be used or
permitted on the Premises without Landlord's prior written consent.
X. REPAIRS AND ALTERATIONS BY TENANT.
A. Without limiting the generality of Section VII.B, above, Landlord
shall diligently maintain and repair all aspects of the Premises which are
structural or which relate to the Building systems, including without limitation
the separate HVAC system for Tenant's computer area(s) and drug room, provided
that, except with regard to the separate HVAC system, Tenant shall be
responsible for any plumbing, electrical and other systems to the extent that
they are located within the Premises and serve Tenant exclusively, e.g. any
separate sink or shower installed in the Premises. Notwithstanding the
foregoing, Landlord hereby represent and warrants that the separate sink and
shower currently located on the Premises are in good working order and condition
and, in addition, Landlord agrees that it will be responsible for
15
making any repairs to such sink and shower during the first ninety (90) days of
the Lease Term. Tenant shall keep the interior of the Premises in good
condition, and shall diligently maintain and repair all nonstructural aspects of
the Premises not included in Landlord's obligations, above. Any such repairs by
either party shall restore the Premises to as good a condition as it was in
prior to the occurrence of the applicable damage or other problem. If Tenant
fails to make any repair which is Tenant's responsibility with reasonable
diligence, and in the event that such failure impairs the use or enjoyment of
the Building by any other tenant, and if such repair remains incomplete on the
20th day following written notice to Tenant that Tenant has failed to exercise
reasonable diligence (or a shorter period in the case of an emergency repair, or
longer to the extent that Tenant is then proceeding diligently and diligent
completion takes more than 20 days), then Landlord may, at its option, perform
such repair itself and Tenant shall pay the cost thereof to Landlord on demand
as additional Rent.
B. Tenant shall not make or allow to be made any alterations, additions
or improvements to the Premises, nor install any sates or other heavy property
or equipment within the Premises, nor place signs or window coverings on the
Premises which are visible from outside the Premises, without first obtaining
the written consent of Landlord in each such instance, provided that Tenant may
install vending machines for the sale of candy, food, beverages or other goods,
for the sole and exclusive use of Tenant's employees and visitors, in locations
within the Premises able to bear the weight of such machines. Notwithstanding
the foregoing, Landlord's consent shall not be required for any alteration,
addition or improvement that satisfies all of the following criteria: 1) costs
less than $5,000.00, 2) is of a cosmetic nature such as painting, wallpapering,
hanging pictures and installing carpeting, 3) Is not visible from the exterior
of the Premises or Building, and 4) will not affect the systems or structure of
the Building and does not require work to be performed inside the walls or above
the ceiling of the Premises; provided that even if consent is not required,
Tenant shall still comply with all the other provisions of this Section X.B.
Prior to commencing any such work, Tenant must furnish Landlord with plans and
specifications; names and addresses of contractors; copies of contracts;
necessary permits; evidence of contractor's and subcontractor's insurance in
accordance with section XVI.B. hereof; and all such improvements, alterations or
additions shall be installed in a good workmanlike manner using new materials.
Upon completion, Tenant shall furnish marked-up plans showing all changes from
the plans originally approved by Landlord, contractor's affidavits and full and
final waivers of lien and receipted bills covering all labor and materials. All
improvements, alterations and additions shall comply with all insurance
requirements, codes,
16
ordinances, laws and regulations, including without limitation, the Americans
with Disabilities Act. Tenant shall reimburse Landlord upon demand as additional
Rent for all reasonable sums expended by Landlord for examination of the
architectural, mechanical, electric and plumbing plans for any alterations,
additions or improvements and for the costs of repairing any damage done to the
Building caused by Tenant or Tenant's agents, servants, employees, customers,
licensees, or invitees in connection with such work. If Landlord so requests,
Tenant shall permit Landlord to supervise construction operations, to the extent
that they affect the Building structure or systems or the premises of any other
tenant but no such supervision shall impose any liability upon Landlord. In the
event Landlord supervises such construction, Landlord shall be entitled to a
supervisory fee in an amount not to exceed the lesser of (1) five percent (5%)
of the cost of the aspect of such work which affects the Building structure or
systems or the premises of any other tenant, or (2) $40.00 per hour. Landlord's
approval of Tenant's plans and specifications or supervision of any work
performed for or on behalf of Tenant shall not be deemed to be a representation
by Landlord that such plans and specifications comply with applicable Insurance
requirements, building codes, ordinances. laws or regulations.
XI. USE OF ELECTRICAL AND HVAC SERVICES BY TENANT. All electricity used by
Tenant In the Premises shall, at Landlord's option, be paid for by Tenant either
(1) by a separate charge (in an amount equal to the actual utility company
charge) billed directly to Tenant by Landlord and payable by Tenant as
additional Rent, or (2) by a separate charge billed by the utility company
supplying electricity and payable by Tenant directly to such utility company.
Tenant's use of electrical service furnished by Landlord shall not exceed 6
watts per square foot. In the event Tenant shall request that it be allowed to
consume electrical or HVAC services in excess of 6 watts per square foot,
Landlord may not refuse to consent to such usage but may reasonably condition
such consent upon such conditions as Landlord elects (including the installation
of utility service upgrades, submeters, air handlers or cooling units), and all
such additional usage (to the extent permitted by law), installation and
maintenance thereof shall be paid for by Tenant as additional Rent.
XII. ENTRY BY LANDLORD. Landlord and its agents or representatives shall have
the right (after 24 hours prior notice except in an emergency where Landlord
shall give Tenant notice reasonable under the circumstances and except that
notice shall not be required with respect to the furnishing of janitorial and
cleaning service) to enter the Premises to inspect the same, or to show the
Premises to prospective purchasers, mortgagees, tenants or insurers, or to
17
clean or make repairs, alterations or additions thereto, including any work that
Landlord deems necessary for the safety, protection or preservation of the
Building or any occupants thereof, or to facilitate repairs, alterations or
additions to the Building or any other tenants premises. Notwithstanding the
foregoing, Tenant may, at its own expense, provide its own locks to an area
within the Premises ("Secured Area"). Tenant need not furnish Landlord with a
key but upon the Termination Date, Tenant shall surrender all such keys to
Landlord. If Landlord must gain access to a Secured Area in a non-emergency
situation, Landlord shall contact Tenant and Landlord and Tenant shall arrange a
mutually agreed upon time for Landlord to do so. Landlord shall comply with all
reasonable security measures pertaining to the Secured Area. If Landlord
determines in its sole discretion that an emergency in the Building or the
Premises, including, without limitation, a suspected fire or flood, requires
Landlord to gain access to the Secured Area, Tenant hereby authorizes Landlord
to forcibly enter the Secured Area. In such event, Landlord shall have no
liability whatsoever to Tenant, and Tenant shall pay all reasonable expenses
incurred by Landlord In repairing or reconstructing any entrance, corridor, door
or other portions of the Premises damaged as a result of a forcible entry by
Landlord. Landlord shall have no obligation to provide either janitorial service
or cleaning in the Secured Area. If reasonably necessary for the protection and
safety of Tenant and its employees, Landlord shall have the right to temporarily
close the Premises to perform repairs, alterations or additions in the Premises,
provided that, except in the event of an emergency and to the extent possible
based upon the nature of the work to be performed, Landlord shall perform all
such work on weekends and after Normal Business Hours. Entry by Landlord in
accordance with this Article XII shall not constitute a constructive eviction or
entitle Tenant to any abatement or reduction of Rent by reason thereof.
XIII. ASSIGNMENT AND SUBLETTING.
A. Tenant shall not assign, sublease, transfer or encumber this Lease
or any interest therein or grant any license, concession or other right of
occupancy of the Premises or any portion thereof or otherwise permit the use of
the Premises or any portion thereof by any party other than Tenant (any of which
events is hereinafter called a "Transfer") without the prior written consent of
Landlord, which consent shall not be unreasonably withheld with respect to any
proposed assignment or subletting. Landlord's consent shall not be considered
unreasonably withheld if: 1. the proposed transferee's financial responsibility
does not meet the same criteria Landlord uses to select Building tenants; 2. the
proposed transferee's business is not suitable for the Building considering the
business of the other tenants and the Building's prestige or
18
would result in a violation of an exclusive right granted to another tenant in
the Building; 3. the proposed use is different than the Permitted Use; 4. the
proposed transferee is a government agency whose operations involve an average
number of daily visits by non-employees which is materially inconsistent with
the character of the Park, or occupant of the Building; or 5. Tenant is in
default. Tenant acknowledges that the foregoing is not intended to be an
exclusive list of the reasons for which Landlord may reasonably withhold its
consent to a proposed Transfer. Any attempted Transfer in violation of the terms
of this Article shall, at Landlord's option, be void. Consent by Landlord to one
or more Transfers shall not operate as a waiver of Landlord's rights as to any
subsequent Transfers. In addition, Tenant shall not, without Landlord's consent,
publicly offer or advertise the Lease for Transfer in any media unless the Park
is at least 90% occupied or Tenant Is advertising the space for sublease or
assignment at no less than 90% of the then current rental rate for similar space
In the Building offered by Landlord for direct lease. In the event Tenant or
anyone acting on behalf of Tenant or with Tenant's knowledge violates the
provisions of the foregoing sentence, Landlord, in addition to its other
remedies, shall be entitled to seek injunctive relief preventing such action,
and Tenant shall be responsible for all costs incurred by Landlord in connection
therewith.
B. If Tenant requests Landlord's consent to a Transfer, Tenant shall
notify Landlord in writing at least 30 days prior to the effective date of the
proposed Transfer of the name of the proposed transferee and the nature of the
business of the proposed transferee, the term, use, rental rate and all other
material terms and conditions of the proposed Transfer, including, without
limitation, evidence satisfactory to Landlord that the proposed transferee is
financially responsible. Notwithstanding the provisions of Section XIII.A.
above, Landlord may, during said 30-day period, 1. consent to or refuse to
consent to such Transfer in writing; or 2. negotiate directly with the proposed
transferee and (in the event Landlord is able to reach agreement with such
proposed transferee) upon execution of a lease with such transferee (or the date
of Tenant's proposed transfer, if earlier), terminate this Lease, with respect
to the portion of the Premises which Tenant proposed to sublease or assign, upon
thirty (30) days' notice; or 3. cancel and terminate this Lease, with respect to
the portion of the Premises which Tenant proposed to sublease or assign, upon 30
days notice. No termination date resulting from any Landlord election to
terminate under this paragraph shall (unless Tenant otherwise consents) be later
than the planned date of Tenant's proposed transfer. In the event that Landlord
elects to terminate this Lease as provided in this paragraph, Tenant may elect,
within 10 days following notice of Landlord's termination election, to withdraw
Tenant's request for Landlord's consent to the applicable assignment
19
or sublease in which event this Lease shall not terminate and Landlord's and
Tenant's rights shall be the same as if Tenant had never requested such consent.
In the event Landlord consents to any such Transfer, the Transfer shall be in a
form reasonably approved by Landlord (it being understood and agreed that
Landlord's approval rights shall not extend to aspects of the Transfer which do
not materially affect Landlord's interests in the Building or Premises), and
Tenant shall bear all costs and expenses reasonably incurred by Landlord in
connection with the review and approval of such documentation, which costs and
expenses shall not exceed Five Hundred Dollars ($500.00).
C. If for any assignment or sublease Tenant receives rent or other
consideration (after deducting all reasonable costs of (a) free rent, tenant
improvements and allowances provided to such assignee or sublessee, (b) to the
extent that Tenant vacated the Premises no less than 1 0 days prior to the
effective date of the applicable Transfer, all Rent (including without
limitation Additional Base Rental) paid to Landlord for the period from Tenant's
vacation of the Premises to the effective date of the Transfer, and (c)
brokerage commissions and marketing costs) either initially or over the term of
the assignment or sublease, In excess of the rent called for hereunder, or in
case of the sublease of a portion of the Premises, in excess of such rent fairly
allocable to such portion (the "Transfer Consideration") Tenant shall pay
one-half of such Transfer Consideration to Landlord within ten (10) days
following receipt thereof by Tenant. In addition to any other rights Landlord
may have In connection with an uncured default by Tenant under the Lease,
Landlord shall have the right to contact any transferee and require that all
payments made pursuant to the Transfer shall be made directly to Landlord.
D. If Tenant is a corporation and if at any time during the Lease Term
the person or persons who own the voting shares at the time of the execution of
this Lease cease for any reason, including but not limited to merger,
consolidation or other reorganization involving another corporation, to own a
majority of such shares, or if Tenant is a partnership and if at any time during
the Lease Term the general partner or partners who own the general partnership
interests In the partnership at the time of the execution of this Lease, cease
for any reason to own a majority of such interests (except as the result of
transfers by gift, bequest or inheritance to or for the benefit of members of
the immediate family of such original shareholder(s) or partner(s)), such an
event shall be deemed to be a Transfer. The preceding sentence shall not apply
whenever Tenant is a corporation the outstanding stock of which is listed on a
recognized security exchange, or if at least eighty per cent (80%) of its voting
stock is owned by another corporation, the voting stock of which is so listed.
Notwithstanding anything to the contrary contained herein or in Section
20
XIII.D., Tenant may assign its entire Interest under this Lease or sublet the
Premises to a wholly owned corporation or controlled subsidiary or parent of
Tenant (or entity under common control with Tenant) or to any successor to
Tenant by purchase, merger, consolidation or reorganization (hereinafter
collectively referred to as "Corporate Transfer") without the consent of
Landlord, provided: (I) Tenant is not in default under this Lease; (II) if such
proposed transferee is a successor to Tenant by purchase, said proposed
transferee shall acquire all or substantially all of the stock or assets of
Tenant's business or, if such proposed transferee is a successor to Tenant by
merger, consolidation or reorganization, the continuing or surviving corporation
shall own all or substantially all of the assets of Tenant; (III) such proposed
transferee operates. the business in the Premises for the Permitted Use and no
other purpose; and (iv) in 66 event shall any Transfer release or relieve Tenant
from any of its obligations under this Lease. Tenant shall give Landlord written
notice at least twenty (20) days prior to the effective date of such Corporate
Transfer If such transfer involves an actual change in possession of the
Premises. As used herein, the terms "controlled" or "subsidiary" shall mean a
corporate entity wholly owned by Tenant or at least fifty-one percent (51%) of
whose voting stock Is owned by Tenant. The parties to whom Tenant is entitled to
assign this Lease or sublet all or any portion of the Premises pursuant to a
Corporate Transfer shall be referred to herein as "Permitted Transferees".
E. Any Transfer consented to by Landlord In accordance with this
Article XIII shall be only for the Permitted Use and for no other purpose, and
In no event shall any Transfer release or relieve Tenant or any Guarantors from
any obligations under this Lease.
XIV. LIENS. Tenant will not permit any mechanic's liens or other liens to be
placed upon the Premises or Tenant's leasehold interest therein, the Building,
or the real estate associated therewith. Landlord's title to the Building and
Park is and always shall be paramount to the interest of Tenant, and nothing
herein contained shall empower Tenant to do any act that can, shall or may
encumber Landlord's title. In the event any such lien does attach, Tenant shall,
within ten (10) days of notice of the filing of said lien, either discharge or
bond over such lien to the satisfaction of Landlord and Landlord's Mortgagee (as
hereinafter defined), and in such a manner as to stay the enforcement or
foreclosure of such lien. If Tenant shall fail to so discharge or bond over such
lien, then, in addition to any other right or remedy of Landlord, Landlord may,
but shall not be obligated to, discharge the same. Any amount paid by Landlord
for any of the aforesaid purposes, including reasonable attorneys fees (if and
to the extent permitted by law) shall be paid by Tenant to Landlord on demand as
additional Rent.
21
XV. INDEMNITY AND WAIVER OF CLAIMS.
A. Tenant shall indemnify, defend and hold Landlord, its principals,
beneficiaries, partners, officers, directors, agents, employees and Mortgagees
(collectively, the "Landlord Related Parties") harmless against and from all
liabilities, obligations, damages, penalties, claims, costs, charges or expenses
arising, directly or indirectly, out of or in connection with the acts,
negligence or wilful misconduct of Tenant or the failure on the part of Tenant
to perform or comply with any of the covenants, agreements, terms or conditions
contained in this Lease with which Tenant must comply or perform, but not
including any liabilities, obligations, damages, penalties, claims, costs,
charges or expenses arising, directly or indirectly, out of or in connection
with the negligence or wilful misconduct of Landlord or the failure on the part
of Landlord to perform or comply with any of the covenants, agreements, terms or
conditions contained in this Lease with which Landlord must comply or perform.
In case any action or proceeding is brought against Landlord or any of the
Landlord Related Parties by reason of any of the foregoing, Tenant shall, at
Tenant's sole cost and expense, resist and defend such action or proceeding with
counsel reasonably approved by Landlord. Landlord shall indemnify, defend and
hold Tenant, its principals, beneficiaries, partners, officers, directors,
agents and employees (collectively, the "Tenant Related Parties") harmless
against and from all liabilities, obligations, damages, penalties, claims,
costs, charges or expenses arising, directly or indirectly, out of or in
connection with the acts, negligence or wilful misconduct of Landlord or the
failure on the part of Landlord to perform or comply with any of the covenants,
agreements, terms or conditions contained in this Lease with which Landlord must
comply or perform, but not including any liabilities, obligations, damages,
penalties, claims, costs, charges or expenses arising, directly or indirectly,
out of or in connection with the negligence or wilful misconduct of Tenant or
the failure on the part of Tenant to perform or comply with any of the
covenants, agreements, terms or conditions contained in this Lease with which
Tenant must comply or perform. In case any action or proceeding is brought
against Tenant or any of the Tenant Related Parties by reason of any of the
foregoing, Landlord shall, at Landlord's sole cost and expense, resist and
defend such action or proceeding with counsel reasonably approved by Tenant.
B. Landlord and the Landlord Related Parties shall not be liable for,
and Tenant waives, all claims for loss or damage to Tenant's business or damage
to person or property sustained by Tenant or any person claiming by, through or
under Tenant (including Tenant's employees) resulting from any accident or
occurrence in, on or about the Premises, the Building or the Park,
22
unless such claim for loss or damage arises directly or indirectly out of or in
connection with the negligence or willful misconduct of Landlord or the failure
on the part of Landlord to perform or comply with any of the covenants,
agreements, terms or conditions contained in this lease with which Landlord must
comply or perform, including, without limitation, claims for loss, theft or
damage resulting from: 1. the Premises, Building, or Park, or any equipment or
appurtenances becoming out of repair; 2. wind or weather; 3. any defect in or
failure to operate, for whatever reason, any sprinkler, heating or
air-conditioning equipment, electric wiring, gas, water or steam pipes; 4.
broken glass; 5. the backing up of any sewer pipe or downspout, 6. the bursting,
leaking or running of any tank, water closet, drain or other pipe; 7. the escape
of steam or water; 8. water, snow or ice being upon or coming through the roof,
skylight, stairs, doorways, windows, walks or any other place upon or near the
Building; 9. the failing of any fixture, plaster, tile or other material; or 10.
any act, omission or negligence of other tenants, licensees or any other persons
or occupants of the Building or of adjoining or contiguous buildings, of owners
of adjacent or contiguous property or the public, or by construction of any
private, public or quasi-public work. To the maximum extent permitted by law,
and except as otherwise provided herein, Tenant agrees to use and occupy the
Premises, and to use such other portions of the Building as Tenant Is herein
given the right to use, at Tenant's own risk.
XVI. TENANT'S INSURANCE.
A. At all times commencing on and after the earlier of the Commencement
Date and the date Tenant or its agents, employees or contractors enters the
Premises for any purpose, Tenant shall carry and maintain, at its sole cost and
expense:
1. Commercial General Liability Insurance with a Broad Form
General Liability Endorsement application to the Premises and its appurtenances
providing, on an occurrence basis, a minimum combined single limit of Two
Million dollars ($2,000,000).
2. All Risks of Physical Loss Insurance written at replacement
cost value and with a replacement cost endorsement covering all of Tenant's
Property in the Premises.
3. Workers Compensation Insurance as required by the state in
which the Premises is located and in amounts as may be required by applicable
statute, and Employers Liability Coverage of One Million Dollars ($1,000,000)
per occurrence.
23
4. Whenever good business practice, in Landlord's reasonable
judgment, indicates the need of additional insurance coverage or different types
of insurance in connection with the Premises or Tenant's use and occupancy
thereof, Tenant shall, upon request, obtain such insurance at Tenant's expense
and provide Landlord with evidence thereof.
B. Except for items for which Landlord is responsible under the Work
Letter Agreement, before any repairs, alterations, additions, improvements, or
construction are undertaken by or on behalf of Tenant, Tenant shall carry and
maintain, at its expense, or Tenant shall require any contractor performing work
on the Premises to carry and maintain, at no expense to Landlord, in addition to
worker's compensation insurance as required by the jurisdiction in which the
Building is located, All Risk Builder's Risk Insurance in the amount of the
replacement cost of any alterations, additions or improvements (or such other
amount reasonably required by Landlord) and Commercial General Liability
Insurance (including, without limitation, Contractor's Liability coverage,
Contractual Liability coverage, Completed Operations coverage, a Broad Form
Property Damage coverage and Contractor's Protective liability) written on an
occurrence basis with a minimum combined single limit of Two Million Dollars
($2,000,000); such limit may be accomplished by means of an umbrella policy.
C. Any company writing any insurance which Tenant is required to
maintain or cause to be maintained pursuant to the terms of this Lease (all such
insurance as well as any other insurance pertaining to the Premises or the
operation of Tenant's business therein being referred to as "Tenant's
Insurance"), as well as the form of such insurance, shall at all times be
subject to Landlord's reasonable approval, and each such insurance company shall
have an A.M. Best rating of "A-7" or better and shall be licensed and qualified
to do business in the state in which the Premises are located. All policies
evidencing Tenant's Insurance (except for. Workers Compensation) shall specify
Tenant and the owners] of the Building and its (or their) respective principals,
beneficiaries, partners, officers, directors, employees, agents and
mortgagee[s]" (and any other designees of Landlord as the interest of such
designees shall appear) as additional insureds. Provided that the coverage
afforded Landlord and any designees of Landlord shall not be reduced or
otherwise adversely affected, all of Tenant's Insurance may be carried under a
blanket policy covering the Premises and any other of Tenant's locations. All
policies of Tenant's Insurance shall contain endorsements that the insurer(s)
will give to Landlord and its designees at least thirty (30) days' advance
written notice of any change, cancellation, termination or lapse of said
insurance.
24
Tenant shall be solely responsible for payment of premiums for all of Tenant's
Insurance. Tenant shall deliver to Landlord at least fifteen (15) days prior to
the time Tenant's Insurance is first required to be carried by Tenant, and upon
renewals at least fifteen (15) days prior to the expiration of any such
Insurance coverage, a certificate of insurance of all policies procured by
Tenant in compliance with its obligations under this Lease. The limits of
Tenant's Insurance shall in no event limit Tenant's liability under this Lease.
D. Tenant shall not do or fail to do anything in, upon or about the
Premises which will: 1. violate the terms of any of Landlord's insurance
policies; 2. prevent Landlord from obtaining policies of insurance acceptable to
Landlord or any Mortgagees; or 3. result in an increase in the rate of any
insurance on the Premises, the Building, any other property of Landlord or of
others within the Building. In the event of the occurrence of any of the events
set forth in this Section, Tenant shall pay Landlord upon demand, as additional
Rent, the cost of the amount of any increase in any such insurance premium. If
Tenant fails to obtain the insurance coverage required by this Lease, Landlord
may, at its option, obtain such insurance for Tenant, and Tenant shall pay, as
additional Rent, the cost of all premiums thereon and all of Landlord's costs
associated therewith.
XVII. SUBROGATION. Notwithstanding anything set forth in this Lease to the
contrary, Landlord and Tenant do hereby waive any and all right of recovery,
claim, action or cause of action against the other, their respective principals,
beneficiaries, partners, officers, directors, agents, and employees, and, with
respect to Landlord, its Mortgagee[s], for any loss or damage that may occur to
Landlord or Tenant or any party claiming by, through or under Landlord or
Tenant, as the case may be, with respect to their respective property, the
Building, the Park or the Premises or any addition or improvements thereto, or
any contents therein, by reason of fire, the elements or an other cause
regardless of cause or origin, including the negligence of Landlord or Tenant,
or their respective principals, beneficiaries, partners, officers, directors,
agents and employees and, with respect to Landlord, its Mortgagee[s], which loss
or damage is (or would have been, had the insurance required by this Lease been
carried) covered by insurance. Since this mutual waiver will preclude the
assignment of any such claim by subrogation (or otherwise) to an insurance
company (or any other person), Landlord and Tenant each agree to give each
insurance company which has issued, or in the future may issue, its policies of
fire, extended coverage or material damage insurance, written notice of the
terms of this mutual waiver, and to have such insurance policies property
endorsed, if necessary, to prevent the invalidation of any of the coverage
provided by such insurance policies by reason of such mutual waiver. For the
25
purpose of the foregoing waiver, the amount of any deductible applicable to any
loss or damage shall be deemed covered by, and recoverable by the insured under
the insurance policy to which such deductible relates. In the event that Tenant
is permitted to and self-insures any risk which would have been covered by the
insurance required to be carried by Tenant pursuant to Article XVI of the Lease,
or if Tenant fails to carry any insurance required to be carried by Tenant
pursuant to Article XVI of this Lease, then all loss or damage to Tenant, its
leasehold interest, its business, its property, the Premises or any additions or
improvements thereto or contents thereof required to be covered by Tenant's
insurance shall be deemed covered by and recoverable by Tenant under valid and
collectible policies of insurance.
XVIII. LANDLORD'S INSURANCE. Landlord shall maintain property insurance
on the Building in the amount of 100% of the replacement cost thereof (excluding
foundations) covering fire and all other hazards normally covered by "all-risk"
insurance in the area in which the Building is located (including loss by flood
or earthquake if in an area subject to such hazards). Landlord shall carry
commercial general liability insurance in the types and no less than the amounts
required to be carried by Tenant under Paragraphs XVI.A. and B. of this Lease.
Any company writing any insurance which Landlord is required to maintain or
cause to be maintained pursuant to the terms of this Lease (all such insurance
as well as any other insurance pertaining to the Park being referred to as
"Landlord's Insurance") shall have an A.M. Best rating of "A-7" or better and
shall be licensed and qualified to do business in the state in which the
Premises are located. The cost of such insurance shall be included as a part of
the Basic Costs, and payments for losses thereunder shall be made solely to
Landlord or the Mortgagees of Landlord as their interests shall appear.
XIX. CASUALTY DAMAGE.
A. DAMAGE DIRECTLY AFFECTING PREMISES. If any portion of the Premises
is rendered untenantable by damage from any cause, or if any casualty to any
portion of the Building or Common Areas materially impairs Tenant's use of, or
access to, the Premises or reduces the parking available to Tenant and/or its
invitees below the minimum amount required by law, the following shall apply:
1. DETERMINATION OF EXTENT OF DAMAGE. Landlord shall promptly
(in any event, within 45 days following the date of the casualty), notify Tenant
In writing as to how long, in Landlord's reasonable judgment, it will take to
substantially restore the damage (ignoring any absence of insurance proceeds or
delays in receiving the same). If Landlord fails to notify Tenant within such 45
day period and such failure continues for ten (10) days after written notice
26
from Tenant, Landlord's failure to so notify Tenant shall, if Tenant so chooses,
be deemed to be Landlord's determination that such restoration will take longer
than 240 days (measured from the date of the casualty).
2. RIGHTS TO TERMINATE FOLLOWING MAJOR DAMAGE OR DAMAGE NEAR
END OF TERM. In the event that Landlord determines that such substantial
restoration will take longer than 240 days (measured from the date of the
casualty), or in the event that Landlord determines that such damage is
restorable within a shorter period but the remaining term of this Lease
following such restoration period is less than 2.5 times as long as such
restoration period, then in either case Landlord or Tenant may terminate this
Lease by irrevocable written notice to the other within 30 days following
Tenant's receipt of Landlord's determination (or within 30 days following the
45th day following the date of the casualty, in the event that Landlord's
determination is not timely delivered). Tenant shall not have the foregoing
termination right in the event that Landlord notifies Tenant (within the 45-day
period described above) that, notwithstanding the fact that substantial
restoration will take longer than 240 days, substantial restoration of all
damage to the Premises and all aspects of the damage to the Building and Common
Areas which materially impair Tenant's available parking and/or access to the
Premises has or would with the passage of time have, the rights to extend this
Lease and (b) Tenant can be accomplished within 240 days of the casualty. Any
termination by Landlord due solely to the fact that the remaining term of this
Lease following such restoration period will be less than 2.5 times as long as
such restoration period shall not be effective in the event that (a) Tenant then
irrevocably notifies Landlord in writing, within 10 business days following
Landlord's termination notice, that Tenant is exercising such extension.
3. RESTORATION. In the event that, following the occurrence of
any damage described in Section XIX.A, this Lease is not terminated , (a)
Landlord shall promptly commence and diligently proceed to restore the damage to
the Premises and to all aspects of the Building and Common Areas necessary to
remedy any material impairment to access to the Premises, except to the extent
that the damage relates to aspects of the Premises that were made or installed
by Tenant and were not required to be insured by Landlord hereunder, and (b)
Tenant shall promptly commence and diligently proceed to restore all aspects of
the Premises that were made or installed by Tenant and were not required to be
insured by Landlord hereunder, and Tenant shall present Landlord with evidence
satisfactory to Landlord of Tenant's ability to pay such costs prior to
Landlord's commencement of repair and restoration of the Premises. Both
Landlord's and Tenant's restoration obligations hereunder
27
shall be effective regardless of whether the damage is covered by insurance
(except as otherwise expressly provided herein) and regardless of any delays in
obtaining insurance proceeds.
4. ADDITIONAL TERMINATION RIGHTS. In the event that, for any
reason, all damage required to be restored by Landlord is not substantially
restored on or before the later of the 240th day following its occurrence or the
date set forth in Landlord's initial notice of the estimated period of time for
restoration (the later of such dates being referred to as the "Outside
Completion Date"), and in the event that such nonrestoration involves the
Premises or materially impairs access to the Premises or reduces the parking
available to Tenant and/or its invitees below the minimum amount required by
law, Tenant shall have the right, within 10 business days thereafter, to
terminate this Lease by irrevocable written notice to Landlord; and Tenant shall
thereafter have the same right to terminate this Lease within 10 business days
following the 30th, 60th and 120th days following the Outside Completion Date.
Notwithstanding the foregoing, if Landlord reasonably determines, at any time
prior to the completion of the restoration work, that such restoration is not
likely to be completed by the applicable Outside Completion Date (or such 30, 60
or 120 day periods, as applicable), Landlord shall be entitled to provide Tenant
with written notice thereof, which notice shall advise Tenant of Landlord's
revised estimate of the date on which the restoration work will be substantially
completed. Tenant, within 1 0 business days after receipt of Landlord's notice,
shall be entitled to terminate this Lease by written notice to Landlord. If
Tenant does not terminate this Lease within such 10 business day period, the
date set forth in Landlord's revised estimate shall be considered to be the
Outside Completion Date for purposes hereof.
B. OTHER DAMAGE TO BUILDING OR PARK. In the event that 20% or more of
the Building or Park is destroyed, or In the event that 1) the cost to repair
any damage to the Building or Park caused by a casualty is greater than the
lesser of $200,000.00 and the then remaining net income that will be payable to
Landlord under this Lease for the remainder of the Lease Term, and 2) either (a)
the casualty was of a nature against which Landlord was not insured (and was not
required to be insured hereunder) or (b) the casualty was of a nature with
respect to which the applicable property insurance proceeds are ultimately paid
to any mortgagee, ground lessor or other third party, then in any such event
Landlord shall have the right to terminate this Lease by irrevocable written
notice to Tenant within 45 days following the occurrence of the damage, but only
in the event that Landlord (i) terminates the leases of all tenants similarly
situated in relation to the damage, and (ii) does not restore such damage within
18 months following the date of the casualty. The percentages
28
of destruction referred to In this paragraph shall be determined by dividing the
cost of the applicable restoration by the replacement cost of the entire
Building (or Park, as applicable).
C. ADJUSTMENT OF RENT. Following the occurrence of any damage described
in this Article XIX, the Base Rental and Additional Base Rental shall each be
proportionately abated to the extent that the Premises are thereby rendered
unusable by Tenant in its business from the date of such casualty until the
earlier of a. the date on which the Premises (or part thereof so rendered
unusable) are again usable or b. the date on which (but only to the extent)
Tenant again uses the Premises (or part thereof rendered unusable) in its
business (and such rents shall be 100% abated in the event that no less than 30%
of the Premises is rendered unusable by Tenant and Tenant reasonably elects not
to use the remaining partial Premises pending restoration). Except for the
foregoing rent abatement and except as otherwise expressly provided herein,
Landlord shall have no liability to Tenant for any costs, damages or other
losses incurred by Tenant in connection with any casualty to the Premises or
Building.
D. EFFECTIVE TERMINATION DATE. The effective date of any termination by
Landlord or Tenant under this Article XIX shall be the date on which Tenant
reasonably ceased, or ceases, to use the Premises for its ordinary business
operations as the result of the casualty and, in the event that Tenant is still
so using the Premises at the time of the notice of termination, such effective
date shall be a date specified by the terminating party in such notice of
termination, which date shall not be (i) later than the 60th day following such
notice if Landlord is the terminating party; or (ii) earlier than the 60th day
following such notice if Landlord is the terminating party; provided that, if
both parties effectively give such termination notices, Tenant's effective date
shall apply.
E. WAIVER OF INCONSISTENT LAWS. Landlord and Tenant hereby waive the
provisions to any law from time to time in effect during the Lease Term relating
to the effect upon leases of partial or total destruction of leased property.
Landlord and Tenant agree that their respective rights in the event of any
damage to or destruction of the Premises shall be those specifically set forth
herein.
XX. DEMOLITION. INTENTIONALLY OMITTED.
XXI. CONDEMNATION. If 1. the whole or any substantial part of the Premises or 2.
any portion of the Building or Park which would leave the remainder of the
Building
29
unsuitable for use as an office building comparable to its use on the
Commencement Date, shall be taken or condemned for any public or quasi-public
use under governmental law, ordinance or regulation, or by right of eminent
domain, or by private purchase in lieu thereof, then Landlord may, at its
option, terminate this Lease, by written notice given no later than sixty (60)
days prior to the date the physical taking shall occur, effective as of the date
the physical taking of said Premises or said portion of the Building or Park
shall occur. Notwithstanding the foregoing, if the whole or any substantial part
of the Premises shall be taken or condemned for any public or quasipublic use
under governmental law, ordinance or regulation, or by right of eminent domain,
or by private purchase in lieu thereof, Tenant shall also have the right to
terminate this Lease effective as of the date the physical taking of the
Premises occurs. Such right to terminate shall be exercised by written notice to
Landlord within thirty (30) days after the date on which Tenant is first
notified of the taking. In the event this Lease is not terminated, the Rentable
Area of the Building, the Rentable Area of the Premises and Tenant's Pro Rata
Share shall be appropriately adjusted. In addition, Rent for any portion of the
Premises so taken or condemned shall be abated during the unexpired term of this
Lease effective when the physical taking of said portion of the Premises shall
occur. All compensation awarded for any such taking or condemnation, or sale
proceeds in lieu thereof, shall be the property of Landlord, and Tenant shall
have no claim thereto, the same being hereby expressly waived by Tenant, except
for any portions of such award or proceeds which are specifically allocated by
the condemning or purchasing party for the taking of or damage to trade fixtures
of Tenant, relocation expenses and tenant improvements paid for by Tenant, which
Tenant specifically reserves to itself.
XXII. EVENTS OF DEFAULT. The following events shall be deemed to be events of
default under this Lease:
A. Tenant shall fall to pay any Base Rental, Additional Base Rental or
other Rent under this Lease on or before the 5th business day following Tenant's
receipt of written notice from Landlord that Tenant failed to pay such amount
when due (hereinafter sometimes referred to as a "Monetary Default").
B. Any failure by Tenant (other than a Monetary Default) to comply
with any term, provision or covenant of this Lease, which failure is not
cured within twenty (20) days after delivery to Tenant of notice of the
occurrence of such failure, provided that (i) if any such failure creates a
hazardous condition, such failure must be cured Immediately; and (ii) if such
failure cannot reasonably be cured within such twenty (20) days, Tenant shall
not be in default hereunder so long as Tenant commences such cure within such 20
30
days and thereafter diligently prosecutes such cure to completion.
C. Tenant or any Guarantor shall become insolvent, or shall make a
transfer in fraud of creditors, or shall commit an act of bankruptcy or shall
make an assignment for the benefit of creditors, or Tenant or any Guarantor
shall admit in writing its inability to pay its debts as they become due.
D. Tenant or any Guarantor shall file a petition under any section or
chapter of the United States Bankruptcy Code, as amended, pertaining to
bankruptcy, or under any similar law or statute of the United States or any
State thereof, or Tenant or any Guarantor shall be adjudged bankrupt or
insolvent in proceedings filed against Tenant or any Guarantor thereunder; or a
petition or answer proposing the adjudication of Tenant or any Guarantor as a
debtor or its reorganization under any present or future federal or state
bankruptcy or similar law shall be filed in any court and such petition or
answer shall not be discharged or denied within sixty (60) days after the filing
thereof.
E. A receiver or trustee shall be appointed for all or substantially
all of the assets of Tenant or any Guarantor or of the Premises or of any of
Tenant's property located thereon in any proceeding brought by Tenant or any
Guarantor, or any such receiver or trustee shall be appointed in any proceeding
brought against Tenant or any Guarantor and shall not be discharged with in
sixty (60) days after such appointment or Tenant or such Guarantor shall consent
to or acquiesce in such appointment.
F. The leasehold estate hereunder shall be taken on execution or other
process of law or equity in any action against Tenant.
G. The liquidation, termination, dissolution, forfeiture of right to do
business or death of Tenant or any Guarantor.
XXIII. REMEDIES.
A. Upon the occurrence of any event or events of default under this
Lease, whether enumerated in Article XXII or not, Landlord shall have the option
to pursue any one or more of the following remedies
1. Terminate this Lease, in which event Tenant shall
immediately surrender the Premises to Landlord. If Tenant fails to surrender the
Premises upon termination of the Lease hereunder, Landlord may without prejudice
to any other remedy which it may have, enter upon and take
31
possession of the Premises and expel or remove Tenant and any other person who
may be occupying said Premises, or any part thereof, and Tenant hereby agrees to
pay to Landlord on demand the amount of all loss and damage which Landlord may
suffer by reason of such termination, whether through inability to relet the
Premises on satisfactory terms or otherwise, specifically including but not
limited to all Costs of Reletting (hereinafter defined) and any deficiency that
may arise by reason of any reletting or failure to relet.
2. Enter upon and take possession of the Premises and expel or
remove Tenant or any other person who may be occupying said Premises, or any
part thereof, without terminating this Lease. Landlord may (but shall be under
no obligation to) relet the Premises or any part thereof for the account of
Tenant, in the name of Landlord, without notice to Tenant for such term or terms
which may be greater or less than the period which would otherwise have
constituted the balance of the Lease Term and on such conditions (which may
include concessions, free rent and alterations of the Premises) and for such
uses as Landlord in its absolute discretion may determine, and Landlord may
collect and receive any rents payable by reason of such relenting. Tenant agrees
to pay Landlord on demand all Costs of Reletting and any deficiency that may
arise by reason of such reletting or failure to relet. Landlord shall not be
responsible or liable for any failure to relet the Premises or any part thereof
or for any failure to collect any Rent due upon any such relenting. No such
re-entry or taking of possession of the Premises by Landlord shall be construed
as an election on Landlord's part to terminate this Lease unless a written
notice of such termination is given to Tenant.
3. Enter upon the Premises and do whatever Tenant is obligated
to do under the terms of this Lease, and Tenant agrees to reimburse Landlord on
demand for any expense which Landlord may incur in thus affecting compliance
with Tenant's obligations under this Lease together with interest at the lesser
of a per annum rate equal to: a. the Maximum Rate, or b. the Prime Rate plus
five percent (5%), and Tenant further agrees that Landlord shall not be liable
for any damages resulting to Tenant from such action, unless caused by the
negligence or wilful misconduct of Landlord.
4. In order to regain possession of the Premises and to deny
Tenant access thereto in any instance in which Landlord has terminated this
Lease or Tenant's right to possession, Landlord shall be entitled to exercise
any and all rights provided to at law or in equity under the laws of the state
and city in which the Building is located. Landlord may, without notice, remove
and store, at Tenant's expense, any property belonging to Tenant that remains in
the Premises after Landlord has regained possession thereof.
32
5. Terminate this Lease, in which event, Tenant shall
immediately surrender the Premises to Landlord and pay to Landlord the sum of:
a. all Rent accrued hereunder through the date of termination, and, upon
Landlord's determination thereof, b. an amount equal to (i) the total Rent that
Tenant would have been required to pay for the remainder of the Lease Term
discounted to present value at the prime rate then in effect, minus (ii) the
then present fair rental value of the Premises for the remainder of the Lease
Term, similarly discounted, after deducting all anticipated Costs of Reletting.
Landlord's determination of such amount shall be conclusive and binding on
Tenant, and shall be deemed to have been made in good faith, subject only to
manifest error.
B. For purposes of this Lease, the term "Costs of Reletting" shall mean
all costs and expenses incurred by Landlord in connection with the reletting of
the Premises, including without limitation, Rent loss during the period the
Premises are vacant prior to reletting, the cost of cleaning, renovation,
repairs, decoration and alteration of the Premises for a new tenant or tenants,
advertisement, marketing, brokerage and legal fees (if and to the extent
permitted by law), the cost of protecting or caring for the Premises while
vacant, the cost of removing and storing any property located on the Premises,
any increase in insurance premiums caused by the vacancy of the Premises and any
other out-of-pocket expenses incurred by Landlord including tenant inducements
such as the cost of moving the new tenant or tenants and the cost of assuming
any portion of the existing lease(s) of the new tenant(s).
C. Except as otherwise herein provided, no repossession or re-entering
on the Premises or any part thereof pursuant to Article XXIII hereof or
otherwise shall relieve Tenant or any Guarantor of its liabilities and
obligations hereunder, all of which shall survive such repossession or
re-entering. Notwithstanding any such repossession or re-entering by reason of
the occurrence of an event of default, Tenant will pay to Landlord the Rent
required to be paid by Tenant pursuant to this Lease.
D. No right or remedy herein conferred upon or reserved to Landlord is
intended to be exclusive of any other right or remedy, and each and every right
and remedy shall be cumulative and in addition to any other right or remedy
given hereunder or now or hereafter existing by agreement, applicable law or in
equity. In addition to other remedies provided in this Lease, Landlord shall be
entitled, to the extent permitted by applicable law, to injunctive relief, or to
a decree compelling performance of any of the covenants, agreements, conditions
or provisions of this Lease, or to any other remedy allowed to
33
Landlord at law or in equity. Forbearance by Landlord to enforce one or more of
the remedies herein provided upon an event of default shall not be deemed or
construed to constitute a waiver of such default.
E. This Article XXIII shall be enforceable to the maximum extent such
enforcement is not prohibited by applicable law, and the unenforceability of any
portion thereof shall not thereby render unenforceable any other portion.
F. If Tenant provides written notice to Landlord of an event or
circumstance which requires the action of Landlord with respect to repair and/or
maintenance and the continuation of which Is materially impairing Tenant's use
or enjoyment of the Premises or Common Areas, and Landlord fails to provide such
action within a reasonable period of time, given the circumstances, after the
receipt of such written notice, but In no event earlier than thirty 30 days
after receipt of such written notice, then Tenant may proceed to take the
required action three (3) days after the delivery of an additional written
notice to Landlord specifying that Tenant is taking such required action and, if
such action was required under the terms of this Lease to be taken by Landlord,
then Tenant shall be entitled to prompt reimbursement by Landlord for Tenant's
reasonable costs and expenses in taking such action (unless, pursuant to this
Lease, Tenant is solely responsible for the cost of such repair). If Landlord
fails to pay such amounts within 30 days after written demand, then Tenant shall
be entitled to deduct such amount from the Rent payable by Tenant under this
Lease, provided, however, if Landlord disputes Tenant's right to receive
reimbursement for the costs incurred by Tenant, Landlord shall have the right to
place the disputed amount in an escrow account with an independent third party
and to have the dispute between Landlord and Tenant resolved by appropriate
legal proceedings. Notwithstanding the foregoing, in no event shall Tenant be
entitled to (i) perform any work on any portion of the Building systems that
serve tenants or occupants of the Building other than or in addition to Tenant,
(ii) perform any work that affects the structure of the Building, or (iii)
perform any work that requires entry into another tenant's or occupant's
premises.
XXIV. LIMITATION OF LIABILITY. NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED IN THIS LEASE, THE LIABILITY OF LANDLORD (AND OF ANY SUCCESSOR
LANDLORD HEREUNDER) TO TENANT SHALL BE LIMITED TO THE INTEREST OF LANDLORD IN
THE BUILDING, AND TENANT AGREES TO LOOK SOLELY TO LANDLORD'S INTEREST IN THE
BUILDING FOR THE RECOVERY OF ANY JUDGMENT OR AWARD AGAINST THE LANDLORD, IT
BEING INTENDED THAT LANDLORD SHALL NOT BE PERSONALLY LIABLE FOR ANY JUDGMENT OR
DEFICIENCY. TENANT
34
HEREBY COVENANTS THAT, PRIOR TO THE FILING OF ANY SUIT FOR AN ALLEGED DEFAULT BY
LANDLORD HEREUNDER, IT SHALL GIVE LANDLORD AND ALL MORTGAGEES WHOM TENANT HAS
BEEN NOTIFIED HOLD MORTGAGES OR DEED OF TRUST LIENS ON THE PROPERTY, BUILDING OR
PREMISES NOTICE AND REASONABLE TIME TO CURE SUCH ALLEGED DEFAULT BY LANDLORD. IN
ADDITION, TENANT ACKNOWLEDGES THAT EQUITY OFFICE PROPERTIES, INC. IS ACTING
SOLELY IN ITS CAPACITY AS AGENT FOR LANDLORD AND SHALL NOT BE LIABLE FOR ANY
OBLIGATIONS, LIABILITIES, LOSSES OR DAMAGES ARISING OUT OF OR IN CONNECTION WITH
THIS LEASE, ALL OF WHICH ARE EXPRESSLY WAIVED BY TENANT.
XXV. NO WAIVER. Failure of Landlord or Tenant to declare any default immediately
upon its occurrence, or delay in taking an action in connection with an event of
default shall not constitute a waiver of such default, nor shall it constitute
an estoppel against Landlord or Tenant, but Landlord or Tenant shall have the
right to declare the default at any time and take such action as is lawful or
authorized under this Lease. Failure by Landlord or Tenant to enforce its rights
with respect to any one default shall not constitute a waiver of its rights with
respect to any subsequent default. Receipt by Landlord of Tenant's keys to the
Premises shall not constitute an acceptance or surrender of the Premises.
XXVI. EVENT OF BANKRUPTCY. In addition to, and in no way limiting the other
remedies set forth herein, Landlord and Tenant agree that if Tenant ever becomes
the subject of a voluntary or involuntary bankruptcy, reorganization,
composition, or other similar type proceeding under the federal bankruptcy laws,
as now enacted or hereinafter amended, then:
A. "Adequate protection" of Landlord's interest in the Premises
pursuant to the provisions of Section 361 and 363 (or their successor sections)
of the Bankruptcy Code, 11 U.S.C. Section 101 et seq., (such Bankruptcy Code as
amended from time to time being herein referred to as the "Bankruptcy Code"),
prior to assumption and/or assignment of the Lease by Tenant shall include, but
not be limited to all (or any part) of the following: the continued payment by
Tenant of the Base Rental and all other Rent due and owing hereunder and the
performance of all other covenants and obligations hereunder by Tenant;
B. "Adequate assurance of future performance" by Tenant and/or any
assignee of Tenant pursuant to Bankruptcy Code Section 365 will include (but not
be limited to) payment of an additional/new Security Deposit in the
35
amount of two (2) times the then-current monthly Base Rental payable hereunder.
C. Any person or entity to which this Lease is assigned pursuant to the
provisions of the Bankruptcy Code, shall be deemed without further act or deed
to have assumed all of the obligations of Tenant arising under this Lease on and
after the effective date of such assignment. Any such assignee shall, upon
demand by Landlord, execute and deliver to Landlord an instrument confirming
such assumption of liability.
D. Notwithstanding anything in this Lease to the contrary, all amounts
payable by Tenant to or on behalf of the Landlord under this Lease, whether or
not expressly denominated as "Rent", shall constitute "rent" for the purposes of
Section 502(b) (6) of the Bankruptcy Code.
E. It this Lease is assigned to any person or entity pursuant to the
provisions of the Bankruptcy Code, any and all monies or other considerations
payable or otherwise to be delivered to Landlord (including Base Rentals and
other Rent hereunder), shall be and remain the exclusive property of Landlord
and shall not constitute property of Tenant or of the bankruptcy estate of
Tenant. Any and all monies or other considerations constituting Landlord's
property under the preceding sentence not paid or delivered to Landlord shall be
held in trust by Tenant or Tenant's bankruptcy estate for the benefit of
Landlord and shall be promptly paid to or turned over to Landlord.
F. If Tenant assumes this Lease and proposes to assign the same
pursuant to the provisions of the Bankruptcy Code to any person or entity who
shall have made a bona fide offer to accept an assignment of this Lease on terms
acceptable to the Tenant, then notice of such proposed offer/assignment, setting
forth 1. the name and address of such person or entity, 2. all of the terms and
conditions of such offer, and 3. the adequate assurance to be provided Landlord
to assure such person's or entity's future performance under the Lease, shall be
given to Landlord by Tenant no later than twenty (20) days after receipt by
Tenant, but in any event no later than ten (10) days prior to the date that
Tenant shall make application to a court of competent jurisdiction for authority
and approval to enter into such assumption and assignment, and, unless such
transfer is to a Permitted Transferee, Landlord shall thereupon have the prior
right and option, to be exercised by notice to Tenant given at any time prior to
the effective date of such proposed assignment, to accept an assignment of this
Lease upon the same terms and conditions and for the same consideration, if any,
as the bona fide offer made by such persons or entity, less any brokerage
commission which may be payable out of the consideration
36
to be paid by such person for the assignment of this Lease.
XXVII. QUIET ENJOYMENT. Tenant shall, and may peacefully have, hold, and enjoy
the Premises, subject to the other terms of this Lease (including. without
limitation, Article XXX hereof), provided that Tenant pays the Rent herein
recited to be paid by Tenant and performs all of Tenant's covenants and
agreements herein contained. This covenant and any and all other covenants of
Landlord shall be binding upon Landlord and its successors only during its or
their respective periods of ownership of the Landlord's Interest hereunder.
XXVIII. RELOCATION. INTENTIONALLY OMITTED.
XXIX. HOLDING OVER. In the event of holding over by Tenant after expiration or
other termination of this Lease or in the event Tenant continues to occupy the
Premises after the termination of Tenant's right of possession pursuant to
Articles XXII and XXIII hereof, occupancy of the Premises subsequent to such
termination or expiration shall be that of a tenancy at sufferance and in no
event from month-to-month or year-to-year, but Tenant shall, throughout the
entire holdover period, pay rent (on a per month basis without reduction for any
partial months during any such holdover) equal to 150% of the sum of the Base
Rental and Additional Base Rental due for the period immediately preceding such
holding over, provided that in no event shall Base Rental and Additional Base
Rental during the holdover period be less than the fair market rental for the
Premises. No holding over by Tenant or payments of money by Tenant to Landlord
after the expiration of the term of this Lease shall be construed to extend the
Lease Term or prevent Landlord from recovery of immediate possession of the
Premises by summary proceedings or otherwise. Tenant shall be liable to Landlord
for all damage, including any consequential damage, which Landlord may suffer by
reason of any holding over by Tenant, and Tenant shall indemnity Landlord
against any and all claims made by any other tenant or prospective tenant
against Landlord for delay by Landlord in delivering possession of the Premises
to such other tenant or prospective tenant. Notwithstanding the foregoing,
Tenant shall not be liable for consequential damages unless (1) Landlord
notifies Tenant that it has entered into a lease for the Premises or has
received a bona fide offer to lease the Premises, and (2) Tenant fails to vacate
the Premises within ten (10) days after the date of Landlord's notice.
XXX. SUBORDINATION TO MORTGAGES.
A. Tenant accepts this Lease subject and subordinate to any mortgage,
deed of trust, ground lease or other lien presently existing or
37
hereafter arising upon the Premises, or upon the Building and/or the Park and to
any renewals, modifications, refinancings and extensions thereof (any such
mortgage, deed of trust, lease or other lien being hereinafter referred to as a
"Mortgage", and the person or entity having the benefit of same being referred
to hereinafter as a "Mortgagee'), but Tenant agrees that any such Mortgagee
shall have the right at any time to subordinate such Mortgage to this Lease on
such terms and subject to such conditions as such Mortgagee may deem appropriate
in its discretion. This clause shall be self-operative and no further instrument
of subordination shall be required. However, Landlord is hereby irrevocably
vested with full power and authority to subordinate this Lease to any Mortgage,
and Tenant agrees upon demand to execute such further instruments subordinating
this Lease, acknowledging the subordination of this Lease or attorning to the
holder of any such Mortgage as Landlord may request. The terms of this Lease are
subject to approval by the Landlord's existing lender(s) and any lender(s) who,
at the time of the execution of this Lease, have committed or are considering
committing to Landlord to make a loan secured by all or any portion of the Park,
and such approval is a condition precedent to Landlord's obligations hereunder.
If any person shall succeed to all or part of Landlord's interests in the
Premises whether by purchase, foreclosure, deed in lieu of foreclosure, power of
sale, termination of lease or otherwise, and if and as so requested or required
by such successor-in-interest, Tenant shall, without charge, attorn to such
successor-in-interest if and so long as such successors) agree(s) that Tenant's
possession of the Premises and this Lease, including any options to extend the
term hereof, any rights of first offer and rights of first refusal, and any
other options hereunder, will not be disturbed so long as Tenant is not In
default hereunder (subject to any applicable notice and cure periods). Tenant
and Landlord each agree that it will from time to time upon request by the other
and, within fifteen (15) days of the date of such request, execute and deliver
to such persons as the requesting party shall request an estoppel certificate or
other similar statement in recordable form certifying that this Lease is
unmodified and in full force and effect (or if there have been modifications,
that the same is in full force and effect as so modified), stating the dates to
which Rent and other charges payable under this Lease have been paid, stating
that the requesting party is not in default hereunder (or if the requesting
party alleges a default stating the nature of such alleged default) and further
stating such other matters as the requesting party shall reasonably require.
B. Notwithstanding the foregoing to the contrary, this Lease is
contingent upon Landlord providing Tenant with a fully executed non-disturbance,
attornment, estoppel and subordination agreement from Landlord's current
Mortgagee on the form attached hereto as Exhibit I (the
38
"Non-disturbance Agreement") within ten (10) business days after the full and
final execution of this Lease by Landlord and Tenant. Tenant shall execute the
Non-disturbance Agreement upon receipt from Landlord and shall return the same
to Landlord for execution by Landlord's Mortgagee. In the event that Landlord
fails to provide Tenant with the Non-Disturbance Agreement within such ten (10)
business day period, Tenant, as its sole remedy, shall have the right to
terminate this Lease by written notice to Landlord within ten (10) days after
the expiration of such ten (10) day period. Notwithstanding anything herein to
the contrary, Landlord shall also be required to provide Tenant with a
non-disturbance, subordination and attornment agreement in favor of Tenant from
any Mortgagee who comes into existence after the Commencement Date. Such
non-disturbance, subordination and attornment agreement in favor of Tenant shall
provide that, so long as Tenant is paying the Rent due under this Lease and is
not otherwise in default under the Lease, its right to possession and other
terms of the Lease shall remain in full force and effect. Such non-disturbance,
subordination and attornment agreement may include additional time on behalf of
the Mortgagee to cure defaults of the Landlord and provide that a) neither
Mortgagee nor any successor in interest shall be bound by (i) any payment of
Base Rental, Additional Base Rental or other sum due hereunder for more than one
(1) month in advance, or (ii) any amendment or modification of this Lease made
without the express written consent of Mortgagee or any successor in interest;
b) neither Mortgagee nor any successor in interest will be liable for (i) any
act or omission or warranties of any prior landlord (including Landlord), except
with regard to any continuing default of which Tenant has provided Mortgagee
with written notice and a reasonable opportunity to cure after the date on which
Mortgagee takes title to the Building, or (ii) the breach of any warranties or
obligations relating to construction of improvements on the Property or any
tenant finish work performed or to have been performed by any prior landlord
(including Landlord), provided that in the event Mortgagee, after notice and a
reasonable opportunity to perform, fails to perform any tenant finish work
required to be performed under this Lease with respect to Offering Space A,
Offering Space B or any Refusal Space, Tenant shall have the right to perform
such work and to offset the reasonable cost thereof against Rent, or (iii) the
return of any security deposit, except to the extent such deposits have been
received by Mortgagee; c) neither Mortgagee nor any successor in interest shall
be subject to any offsets or defenses which Tenant might have against any prior
landlord (including Landlord). Notwithstanding the foregoing, Landlord shall use
reasonable efforts to attempt to cause any Mortgagee to delete, prior to
execution by Tenant and the Mortgagee, any provision of the Mortgagees
non-disturbance, subordination and attornment agreement with Tenant that
requires Tenant to waive any offsets or defenses which Tenant might have against
any prior
39
landlord.
XXXI. ATTORNEY'S FEES. In the event that Landlord should retain counsel and/or
institute any suit against Tenant for violation of or to enforce any of the
covenants or conditions of this Lease, or should Tenant institute any suit
against Landlord for violation of any of the covenants or conditions of this
Lease, or should either party intervene in any suit in which the other is a
party to enforce or protect its interest or rights hereunder, the prevailing
party in any such suit shall be entitled to all of its costs, expenses and
reasonable fees of its attorneys) (if and to the extent permitted by law) in
connection therewith.
XXXII. NOTICE. Whenever any demand, request, approval, consent or notice
("Notice") shall or may be given to either of the parties by the other, each
such Notice shall be in writing and shall be sent by registered or certified
mail with return receipt requested, or sent by overnight courier service (such
as Federal Express) at the respective addresses of the parties for notices as
set forth in Section I.A.6. of this Lease, provided that if Tenant has vacated
the Premises or is in default of this Lease Landlord may serve Notice by any
manner permitted by Law so long as such notice is delivered in such manner
permitted by law (1) to the Irvine address set forth in Section I.A.6 (or any
substitute for such address of which Tenant has notified Landlord in writing) in
all events and (2) also to the Premises unless Tenant has vacated the Premises.
Any Notice under this Lease delivered by registered or certified mail shall be
deemed to have been given and effective on the earlier of (a) the third day
following the day on which the same shall have been mailed with sufficient
postage prepaid or (b) the delivery date indicated on the return receipt. Notice
sent by overnight courier service shall be deemed given and effective upon the
day after such notice is delivered to or picked up by the overnight courier
service. Either party may, at any time, change its Notice Address by giving the
other party Notice stating the change and setting forth the new address.
XXXIII. Intentionally Omitted.
XXXIV. EXCEPTED RIGHTS. This Lease does not grant any rights to light or air
over or about the Building. Landlord specifically excepts and reserves to itself
the use of any roofs, the exterior portions of the Premises, all rights to and
the land and improvements below the improved floor level of the Premises, the
improvements and air rights above the Premises and the improvements and air
rights located outside the demising walls of the Premises, and such areas within
the Premises as are required for installation of utility lines and other
installations required to serve any occupants of the Building and the right to
maintain and repair the same, and no rights with respect thereto are conferred
40
upon Tenant unless otherwise specifically provided herein. Landlord further
reserves to itself the right from time to time, after notice to Tenant as
required under this Lease or as otherwise reasonable under the circumstances and
subject to any abatement rights granted to Tenant in this Lease: A. to change
the Building's name or street address; B. to install, fix and maintain signs on
the exterior and interior of the Building; C. to designate and approve window
coverings; D. to make any decorations, alterations, additions, improvements to
the Building, or any part thereof (including the Premises) which Landlord shall
desire, or deem necessary for the safety, protection, preservation or
improvement of the Building, or as Landlord may be required to do by law; E. to
have access to the Premises to perform its duties and obligations and to
exercise its rights under this Lease; F. to retain at all times and to use
pass-keys to all locks within and into the Premises, except to the Secured Ares
(as defined in Paragraph XII of this Lease); G. to approve the weight, size or
location of heavy equipment, articles in and about the Premises; H. to close or
restrict access to the Building at all times other than Normal Business Hours
subject to Tenant's right to admittance at all times under such regulations as
Landlord may prescribe from time to time, or to close (temporarily or
permanently) any of the entrances to the Building; 1. to change the arrangement
and/or location of entrances of passageways, doors and doorways, corridors,
elevators, stairs, toilets and public parts of the Building; and J. to grant to
anyone the exclusive right to conduct any business or undertaking in the
Building, subject to the Tenant's right to continue to use the Premises for the
purposes for which Tenant is entitled to use the Premises. Landlord, in
accordance with Article XII hereof, shall have the right to enter the Premises
in connection with the exercise of any of the rights set forth herein and such
entry into the Premises and the performance of any work therein shall not
constitute a constructive eviction or entitle Tenant to any abatement or
reduction of Rent by reason thereof, except as otherwise provided in this Lease
to the contrary.
XXXV. SURRENDER OF PREMISES. At the expiration or earlier termination of this
Lease or Tenant's right of possession hereunder, Tenant shall quit and surrender
the Premises to Landlord, broom clean, and in good order, condition and repair,
ordinary wear and tear and damage from casualty or condemnation excepted. If
Tenant fails to remove any of Tenant's Property within three (3) days after the
termination of this Lease or Tenant's right to possession hereunder, Landlord
may, without notice to Tenant, remove and/or store such Tenant's Property at the
risk, cost and expense of Tenant and Landlord shall in no event be responsible
for the value, preservation or safekeeping thereof. Tenant shall pay Landlord,
upon demand, any and all expenses caused by such removal and all storage charges
against such property so long as the
41
same shall be in the possession of Landlord or under the control of Landlord. In
addition, if Tenant fails to remove any of its Tenant's Property within thirty
(30) days after the termination of this Lease of Tenant's right to possession,
such Tenant's Property, at the option of Landlord, shall be conclusively
presumed to have been abandoned by Tenant and title to such items shall pass to
Landlord.
XXXVI. MISCELLANEOUS.
A. If any term or provision of this Lease, or the application thereof
to any person or circumstance shall, to any extent, be invalid or unenforceable,
the remainder of this Lease, or the application of such term or provision to
persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each term and provision of
this Lease shall be valid and enforced to the fullest extent permitted by law.
B. Tenant agrees not to record this Lease or any memorandum hereof
without Landlord's prior written consent.
C. This Lease and the rights and obligations of the parties hereto
shall be interpreted, construed, and enforced in accordance with the laws of the
state in which the Building is located.
D. Events of "Force Majeure" shall include strikes, riots, acts of God,
shortages of labor or materials, war, governmental law, regulations or
restrictions and any other cause whatsoever that is beyond the control of
Landlord. Whenever a period of time is herein prescribed for the taking of any
action by Landlord or Tenant, Landlord or Tenant, as applicable, shall not be
liable or responsible for, and there shall be excluded from the computation of
such period of time, any delays due to events of Force Majeure.
E. Landlord shall have the right to transfer and assign, in whole or in
part, all of its rights and obligations hereunder and in the Building and Park
referred to herein, and in such event and upon such transfer (and the assumption
of Landlord's obligations by such transferee) Landlord shall be released from
any further obligations hereunder, except for liabilities which accrued prior to
such transfer, and Tenant agrees to look solely to such successor in interest of
Landlord for the performance of such obligations.
F. Tenant hereby represents to Landlord that it has dealt directly with
and only with the Broker as a broker in connection with this Lease. Tenant
agrees to indemnify and hold Landlord and the Landlord Related Parties
42
harmless from all claims of any brokers claiming to have represented Tenant in
connection with this Lease.
G. If there is more that one Tenant, or if the Tenant is comprised of
more that one person or entity, the obligations hereunder imposed upon Tenant
shall be joint and several obligations of all such parties. All notices,
payments, and agreements given or made by, with or to any one of such persons or
entities shall be deemed to have been given or made by, with or to all of them.
H. In the event Tenant is a corporation (including any form of
professional association), partnership (general or limited), or other form of
organization other than an individual, then each individual executing or
attesting this Lease on behalf of Tenant hereby covenants, warrants and
represents: 1. that such individual is duly authorized to execute or attest and
deliver this Lease on behalf of Tenant in accordance with the organizational
documents of Tenant; 2. that this Lease is binding upon Tenant; 3. that Tenant
is duly organized and legally existing in the state of its organization, and is
qualified to do business in the state in which the Premises is located; 4. that
upon request, Tenant will provide Landlord with true and correct copies of all
organizational documents of Tenant, and any amendments thereto; and 5. that the
execution and delivery of this Lease by Tenant will not result in any breach of,
or constitute a default under any mortgage, deed of trust, lease, loan, credit
agreement, partnership agreement or other contract or instrument to which Tenant
is a party or by which Tenant may be bound. If Tenant is a corporation, Tenant
will, within ten (10) Business Days after the later of (i) request therefor by
Landlord, or (ii) the date this Lease is executed by Landlord and Tenant,
deliver to Landlord a copy of a resolution of Tenant's board of directors
authorizing or ratifying the execution and delivery of this Lease, which
resolution will be duly certified to Landlord's satisfaction by the secretary or
assistant secretary of Tenant.
I. Tenant acknowledges that the financial capability of Tenant to
perform its obligations hereunder is material to Landlord and that Landlord
would not enter into this Lease but for its belief, based on its review of
Tenant's financial statements, that Tenant is capable of performing such
financial obligations. Tenant hereby represents, warrants and certifies to
Landlord that its financial statements previously furnished to Landlord were at
the time given true and correct in all material respects and that there have
been no material subsequent changes thereto as of the date of this Lease. At any
time during the Lease Term, Tenant shall provide Landlord, upon forty-five (45)
days' prior written notice from Landlord, with a current consolidated financial
statement
43
and financial statements of the two (2) years prior to the current financial
statement year. Such statement shall be prepared in accordance with generally
accepted accounting principles (or, in the case of any Japanese or other foreign
entity, in accordance with the Japanese or other foreign accounting standards
applicable to such entity) and, if such is the normal practice of Tenant, shall
be audited by an independent certified public accountant.
J. Except as expressly otherwise herein provided, with respect to all
required acts of Tenant, time is of the essence of this Lease. This Lease shall
create the relationship of Landlord and Tenant between the parties hereto, and
no estate shall pass out of Landlord. Tenant has only a usufruct, not subject to
purchase or sale, which may not be assigned by Tenant except as expressly
provided in this Lease.
K. This Lease and the covenants and conditions herein contained shall
inure to the benefit of and be binding upon Landlord and Tenant and their
respective permitted successors and assigns.
L. Notwithstanding anything to the contrary contained in this Lease,
the expiration of the Lease Term, whether by lapse of time or otherwise, shall
not relieve Tenant from Tenant's obligations accruing prior to the expiration of
the Lease Term.
M. The headings and titles to the paragraphs of this Lease are for
convenience only and shall have no effect upon the construction or
interpretation of any part hereof.
N. Landlord has delivered a copy of this Lease to Tenant for Tenant's
review only, and the delivery hereof does not constitute an offer to Tenant or
option. This Lease shall not be effective until an original of this Lease
executed by both Landlord and Tenant and an original Guaranty, if any, executed
by each Guarantor Is delivered to and accepted by Landlord, and this Lease has
been approved by Landlord's Mortgagees, if required.
XXXVII. ENTIRE AGREEMENT. This Lease Agreement, including the following
Exhibits:
EXHIBIT A-1 - Legal Description of Park
EXHIBIT A-2 - Outline of Premises
44
EXHIBIT B-1 - Schedule of Base Rental
EXHIBIT C - Work Letter Agreement (if required)
EXHIBIT D - Rules and Regulations
EXHIBIT E - Additional Terms
EXHIBIT F - Expansion Rights
EXHIBIT G - Guaranty
EXHIBIT H - Cleaning and Janitorial Specifications
EXHIBIT I - Subordination, Attornment and Non-Disturbance Agreement
constitutes the entire agreement between the parties hereto with respect to the
subject matter of this Lease. TENANT EXPRESSLY ACKNOWLEDGES AND AGREES THAT
LANDLORD HAS NOT MADE AND IS NOT MAKING, AND TENANT, IN EXECUTING AND DELIVERING
THIS LEASE, IS NOT RELYING UPON, ANY WARRANTIES, REPRESENTATIONS, PROMISES OR
STATEMENTS, EXCEPT TO THE EXTENT THAT THE SAME ARE EXPRESSLY SET FORTH IN THIS
LEASE. ALL UNDERSTANDINGS AND AGREEMENTS HERETOFORE MADE BETWEEN THE PARTIES ARE
MERGED IN THIS LEASE WHICH ALONE FULLY AND COMPLETELY EXPRESSES THE AGREEMENT OF
THE PARTIES, NEITHER PARTY RELYING UPON ANY STATEMENT OR REPRESENTATION NOT
EMBODIED IN THIS LEASE. THIS LEASE MAY BE MODIFIED ONLY BY A WRITTEN AGREEMENT
SIGNED BY LANDLORD AND TENANT. LANDLORD AND TENANT EXPRESSLY AGREE THAT THERE
ARE AND SHALL BE NO IMPLIED WARRANTIES OF MERCHANTABILITY, HABITABILITY,
SUITABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OF ANY OTHER KIND ARISING OUT
OF THIS LEASE, ALL OF WHICH ARE HEREBY WAIVED BY TENANT, AND THAT THERE ARE NO
WARRANTIES WHICH EXTEND BEYOND THOSE EXPRESSLY SET FORTH IN THIS LEASE.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease in
multiple original counterparts as of the day and year first above written.
ATTEST: /s/ Eric Marx LANDLORD: SENTRY WEST JOINT
VENTURE, an Illinois joint venture
45
Name (print): Eric Marx BY: EQUITY OFFICE PROPERTIES, INC.,
as agent
By: /s/ Michael Sheinkop
------------------------------------------
Name (print):
Name: /s/ Michael Sheinkop
----------------------------------------
Title: Vice President
---------------------------------------
TENANT: INSTITUTE FOR BIOLOGICAL RESEARCH
AND DEVELOPMENT, a Delaware Corporation
ATTEST: /s/ Grace R. Davis
By: /s/ Thomas B. Semler
-----------------------------------------
Name (print): Grace R. Davis Name: /s/ Thomas Semler
----------------- ---------------------------------------
/s/ Dorothy Soteriou Title: Executive Vice President and CFO
--------------------------------------
Name (print) Dorothy Soteriou
-----------------
46
FIRST AMENDMENT
This First Amendment (the "Amendment") is made and entered
into as of the day of 1994, by and between SENTRY WEST JOINT VENTURE, an
Illinois joint venture ("Landlord") by its agent, Equity Office Properties, Inc.
and INSTITUTE FOR BIOLOGICAL RESEARCH AND DEVELOPMENT, a Delaware corporation
("Tenant").
WITNESSETH
A. WHEREAS, Landlord and Tenant are parties to that certain
lease dated the 1st day of February, 1994, currently containing approximately
11,032 rentable square feet of space described as Suite No. 100 on the first
floor ("Original Premises") of the building commonly known as Gwynedd Hall -
Sentry Park West, and the address of which is 1777 Sentry Parkway West, Blue
Bell, Montgomery County, State of Pennsylvania (the "Building"), which lease has
not been previously amended or assigned (the "Lease"); and
B. WHEREAS, Tenant desires to lease additional space
consisting of approximately 10,540 rentable square feet on the first floor of
the Building (the "Expansion Space"), as shown on Schedule 1 to Exhibit F of the
Lease as Offering Space A and Offering Space B (the Original Premises and
Expansion Space are sometimes collectively referred to as the "Premises"), and
Landlord is willing to do the same on the terms and conditions set forth below;
C. WHEREAS, the Lease by its terms shall expire on February
28, 1998 ("Prior Termination Date"), and the parties desire to extend the Lease,
all an the term and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant
agree as follows:
I. EXPANSION. Effective December 1, 1994 ("Expansion Effective
Date"), the Premises is increased from 11,032 rentable square foot on the first
floor to 21,572 rentable square feet on the first floor by the addition of the
Expansion Space. The lease term for the Expansion Space shall commence on the
Expansion Effective Date and end on the Extended Termination Date (as
hereinafter defined). The Expansion Space is subject to all the terms and
conditions of the Lease except as expressly modified herein and except that
Tenant shall not be entitled to receive any allowances, abatements or other
financial concessions granted with respect to the Original Premises unless such
concessions are expressly provided for herein with respect to the Expansion
Space.
1
II. EXTENSION. The Lease Term is hereby modified from
forty-eight (48) months and seven (7) days expiring on February 26, 1996 ("Prior
Termination Date") to seventy-eight (78) months and seven (7) days ("Extended
Lease Term") expiring on August 31, 2000 ("Extended Termination Date"), unless
sooner terminated in accordance with the terms of the Lease. That portion of the
Lease Term commencing the day immediately following the Prior Termination Date
("Extension Date") and ending on the Extended Termination Date should be
referred to herein as the "Extended Term."
III. MONTHLY BASE RENTAL. Section A of Exhibit B-1 to the
Lease (Schedule of Base Rental) is hereby deleted in its entirety and replaced
with the following Section A:
"Tenant shall pay Landlord the sum of One Million
Eight Hundred Eighty-Four Thousand Sixty-Nine and
52/100's Dollars ($1,884,069.52) as Base Rental for
the Lease Term in monthly installments as follow:
1. One (1) installment in the amount of
$2,930.41 for the period beginning February
22, 1994 and ending February 28, 1994.
2. Nine (9) equal monthly installments of
$11,721.50 each payable on or before the
first day of each month during the period
beginning March 1, 1994 and ending November
30, 1994.
3. Fifteen (15) equal monthly installments of
$22,920.25 each payable on or before the
first day of each month during the period
beginning October 1, 1994 and ending
February 29, 1996.
4. Fifty-four (54) equal monthly installments
of $26,515.59 each payable on or before the
first day of each month during the period
beginning March 1, 1996 and ending August
31, 2000."
IV. TENANT'S PRO RATA SHARE. For the period commencing with
the Expansion Effective Date and ending on the Extended Termination Date,
Tenant's Pro Rata Share for the Premises (inclusive of the Expansion Space)
shall be 9.987%, it being agreed that Tenant shall pay for Tenant's Pro Rate
Share of Basic Costs for the Expansion Space in accordance with the terms and
conditions of Exhibit B-2 to the Lease, including, without limitation, a 1994
Base Year.
V. IMPROVEMENTS TO EXPANSION SPACE. Landlord shall perform
Landlord Work in the Expansion Space in accordance with the terms and conditions
of Exhibit C to the Lease, including without limitation, the Plans described in
Exhibit C to the Lease (to the extent applicable to the Expansion Space).
Landlord agrees to proceed in good faith to complete the
2
Landlord Work in the Expansion Space within a reasonable time following the
execution of this Amendment. Notwithstanding the foregoing, the Expansion
Effective Date and, accordingly, Tenant's obligation to pay Base Rental and
Additional Base Rental for the Expansion Space shall not be postponed as a
result of Landlord's failure to complete the Landlord Work by the Expansion
Effective Date, it being agreed that the Base Rental Abatement set forth in
Article VI.1 hereof is intended to compensate Tenant for any such delays.
Notwithstanding the foregoing, if the Landlord Work in the Expansion Space is
not substantially completed on or before eighty-four (84) days after the date on
which a copy of this Amendment, executed by Tenant, is delivered to Landlord
(the "Inside Completion Date"), Tenant, as its sole remedy, shall be entitled to
receive a credit against Base Rental in the amount of $368.18 per day for each
day in the period beginning on the Inside Completion Date and ending on the
earlier to occur at (x) the day prior to the date on which the Landlord Work in
the Expansion Space is substantially completed and (y) the day prior to the date
the Landlord Work in the Expansion Space would have been substantially completed
absent any Delays by Tenant and events of Force Majeure. Such Rent credit shall
be applied against Base Rental beginning on June 1, 1995 and shall continue from
day to day thereafter until Tenant has received the full value of the Rent
credit provided herein. In addition, if the Landlord Work in the Expansion Space
is not substantially completed by one hundred eighty (180) days after the date
on which a copy of this Amendment, executed by Tenant, is delivered to Landlord,
as such date shall be extended on a day by day basis by the number of days of
delay resulting from Tenant Delays and events of Force Majeure (the "Outside
Completion Date"), then Tenant, as its sole remedy, shall be entitled to
terminate this Lease with respect to the Expansion Space only by providing
written notice of termination to Landlord by the later to occur of five (5) days
after the Outside Completion Date, as the same may be extended, or the date on
which Landlord Work in the Expansion Space is substantially completed.
Notwithstanding the foregoing, if Landlord determines that it will be unable to
substantially complete the Landlord Work in the Expansion Space by the Outside
Completion Date, Landlord shall have the right to provide Tenant with written
notice (the "Outside Extension Notice") of such inability, which Outside
Extension Notice shall set forth the date on which Landlord reasonably believes
that it will be able to substantially complete the Landlord Work. Upon receipt
of to Outside Extension Notice, Tenant shall have the right to terminate this
Lease with respect to the Expansion Space only by providing written notice of
termination to Landlord within five (5) days after the date of the Outside
Extension Notice. In the event that Tenant does not terminate this Lease with
respect to the Expansion Space within such five (5) day period, the Outside
Completion Date shall automatically be amended to be the date set forth in
Landlord's Outside Extension Notice, as such date may thereafter be extended in
accordance the terms hereof.
VI. OTHER PERTINENT PROVISIONS. Landlord and Tenant agree that
this Lease shall be amended in the following additional respects:
1. BASE RENTAL ABATEMENT. Notwithstanding Article III
above to the contrary, as long as Tenant shall be
entitled to an abatement of Base Rental in the amount
of $11,196.75 per month for six (6) consecutive full
calendar months period beginning December 1,
3
1994 and ending May 31, 1995 (the "Base Rental
Abatement Period"). The total amount of Base Rental
abated during the Base Rental Abatement Period shall
equal Sixty-Seven Thousand One Hundred Ninety-Two and
50/100 Dollars ($67,192.50) (the "Abated Base
Rental"). In the event Tenant defaults at any time
during the Lease Term, all Abated Base Rental shall
immediately become due and payable. The payment by
Tenant of the Abated Base Rental in the event of a
default shall not limit or effect any of the
Landlord's other rights, pursuant to this Lease or at
law or in equity. During the Base Rental Abatement
Period, only Base Rental shall be abated and all
Additional Base Rental and other costs and charges
specified in this Lease shall remain as due and
payable pursuant to the provisions of this Lease.
2. Paragraph 2 of Exhibit F, Right of First
Offering/Refusal, is hereby deleted in its entirety
and rendered null and void and of no further force
and effect.
3. Promptly following the execution and delivery of
this First Amendment by Tenant and Landlord, Landlord
will use reasonable efforts to cause its existing
mortgagee to enter into an amendment to the existing
non-disturbance, subordination and attornment
agreement between Tenant and such mortgagee, which
amendment shall extend the scope of such
non-disturbance, subordination and attornment
agreement to include the Expansion Space. "Reasonable
efforts" of Landlord shall not require Landlord to
incur any cost, expense or liability to obtain such
agreement. It being agreed that Tenant shall be
responsible for any fee or review costs charged by
the mortgagee. Upon request of Landlord, Tenant will
execute the mortgagee's form of non-disturbance,
subordination and attornment agreement and return the
same to Landlord for execution by the mortgagee.
Landlord's failure to obtain a non-disturbance,
subordination and attornment agreement for Tenant
shall have not effect on the rights, obligations and
liabilities of Landlord and Tenant or be considered
to be a default by Landlord hereunder.
VII. MISCELLANEOUS.
A. This Amendment sets forth the entire agreement
between the parties with respect to the matters set
forth herein. There have been no additional oral or
written representations or
4
agreements. Under no circumstances shall Tenant be
entitled to any Rent abatement, improvement
allowance, leasehold improvements, or other work to
the Premises, or any similar economic incentives that
may have been provided Tenant in connection with
entering into the Lease, unless specifically set
forth in this Amendment.
B. Except as herein modified or amended, the
provisions, conditions and terms of the Lease shall
remain unchanged and in full force and affect.
C. In the case of any inconsistency between the
provisions of the Lease and this Amendment the
provisions of this Amendment shall govern and
control. Under no circumstances shall this Amendment
be deemed to grant Tenant any further right to expand
the Premises or extend the Lease, provided, however,
any such additional rights specifically provided
Tenant in the Lease are not hereby relinquished or
waived.
D. Submission of this Amendment is not an offer to
enter into this Amendment but rather a solicitation
for such an offer by Tenant. Landlord shall not be
bound by this Amendment until Landlord has executed
and delivered the same to Tenant.
E. The capitalized terms used in this Amendment shall
have the same definitions as set forth in the Lease
to the extent that such capitalized terms are defined
therein and not redefined in this Amendment.
F. Tenant hereby represents to Landlord that Tenant
has dealt with Grubb & Ellis in connection with this
Amendment. Tenant agrees to indemnify and hold
Landlord and the Landlord Related Parties harmless
from all claims of any other brokers claiming to have
represented Tenant in connection with this Amendment.
IN WITNESS WHEREOF, Landlord and Tenant have duly executed
this Amendment as of the day and year first above
written.
WITNESS; ATTESTATION LANDLORD:
5
SENTRY WEST JOINT VENTURE,
an Illinois joint venture
By: EQUITY OFFICE PROPERTIES, INC.,
as agent
- ------------------- By: /s/ Michael Sheinkop
------------------------------------------
- ------------------- Name: Michael Sheinkop
Title: Vice-President, Asset Management
TENANT:
INSTITUTE FOR BIOLOGICAL RESEARCH
AND DEVELOPMENT, a Delaware corporation
/s/ Grace Davis
- ------------------- By: /s/ Thomas B. Semler
Executive Secretary Name: Thomas B. Semler
- -------------------
Title: Executive Vice-President and Chief
Financial Officer
6