Highland Landmark III Office Lease
by and between
Opus/AEW Office Development Company, L.L.C., a Delaware limited liability
company authorized to transact business in Illinois, Landlord
and
Vitria Technology, Inc., a California corporation authorized to transact
business in Illinois, Tenant
Dated as of March 20, 2000
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Table of Contents
Glossary of Defined Terms 1
Article 1 Base Rent; Other Amenities; Security Deposit 2
Section 1.1 Base Rent 2
Section 1.2 Parking 3
Section 1.3 Security Deposit 3
Article 2 Additional Rent 3
Section 2.1 Additional Rent 3
Section 2.2 Definitions 4
Section 2.3 Adjustment of Operating Expenses 6
Section 2.4 Estimated Real Estate Taxes and Operating Expenses for Initial Calendar Year 6
Section 2.5 Estimated Real Estate Taxes and Operating Expenses for Subsequent Calendar Years 7
Section 2.6 Payment of Additional Rent 7
Section 2.7 Re-estimate of Real Estate Taxes and Operating Expenses 7
Section 2.8 Adjustment of Actual Real Estate Taxes and Operating Expenses 7
Section 2.9 Separately Metered Utilities 8
Section 2.10 Other Additional Rent 8
Article 3 Interest on Base and Additional Rent; Rent Independent 8
Section 3.1 Interest on Past Due Obligations 9
Section 3.2 Rent Independent 9
Article 4 Construction of Base Building, Leasehold Improvements; Possession of Premises 9
Section 4.1 Plans for Construction of Base Building and Leasehold Improvements 9
Section 4.2 Allowances for Leasehold Improvements; Bidding for Subcontractors 10
Section 4.3 Change Orders 13
Section 4.4 Force Majeure 13
Section 4.5 Construction Guaranty; Substantial Completion 13
Section 4.6 Repair and Maintenance 14
Section 4.7 Delayed or Earlier Possession; Pre-Commencement Date Access 14
Section 4.8 Effect of Possession 16
Section 4.9 Use 17
Section 4.10 Compliance with Environmental Laws 17
Section 4.11 Landlord's Environmental Covenants 17
Article 5 Services 17
Section 5.1 Services Provided by Landlord 18
Section 5.2 Tenant's Utility Services 19
Section 5.3 Other Provisions Relating to Services 19
Section 5.4 Effects of Utilities 20
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Article 6 Insurance 20
Section 6.1 Landlord's Casualty Insurance Obligations 20
Section 6.2 Tenant's Casualty Insurance Obligations 20
Section 6.3 Landlord's Liability Insurance Obligations 21
Section 6.4 Tenant's Liability Insurance Obligations 21
Section 6.5 Tenant's Indemnification of Landlord 22
Section 6.6 Tenant's Waiver 22
Section 6.7 Landlord's Deductible and Tenant's Property 22
Section 6.8 Tenant's Property 22
Section 6.9 Increase in Insurance 22
Section 6.10 Tenant's Failure to Insure 23
Article 7 Certain Rights Reserved by Landlord 23
Section 7.1 Rights Reserved by Landlord 23
Section 7.2 Emergency Entry 24
Section 7.3 Exhibition of Premises 24
Section 7.4 Right of Landlord to Perform 24
Section 7.5 Substitution of Office Space 24
Article 8 Alterations and Improvements 25
Section 8.1 Procedures for Tenant's Improvements 25
Section 8.2 Freedom From Liens 26
Section 8.3 Alterations a Part of the Premises 26
Article 9 Repairs 26
Section 9.1 Tenant's Repair Obligations 26
Section 9.2 Landlord's Inspection 27
Section 9.3 Joint Inspection Upon Vacation 27
Article 10 Assignment and Subletting 28
Section 10.1 General Prohibition; Recapture; Exceptions 28
(a) General Prohibition 28
(b) Recapture 28
(c) Exceptions 28
Section 10.2 Discharge of Commission 28
Section 10.3 Right to Recapture Not Exercised 29
Section 10.4 Tenant's Profit Statement 29
Section 10.5 Tenant's Changes Deemed an Assignment 29
Section 10.6 Continuing Tenant Liability 29
Section 10.7 Void Transfers 29
Section 10.8 Prohibited Transferees 29
Section l0.9 Criteria for Withholding Consent 30
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Article 11 Damage by Fire or Other Casualty 30
Section 11.1 Tenantable Within 300 Days 30
Section 11.2 Not Tenantable Within 300 Days 30
Section 11.3 Office Complex Substantially Damaged 31
Section 11.4 Uninsured Casualty 31
Section 11.5 Deductible Payments 31
Section 11.6 Landlord's Repair Obligations 31
Section 11.7 Rent Apportionment 31
Article 12 Eminent Domain 31
Section 12.1 Tenant's Termination 31
Section 12.2 Tenant's Participation 32
Article 13 Surrender of Premises 32
Section 13.1 Surrender of Possession 32
Section 13.2 Tenant Retaining Possession 33
Article 14 Default of Tenant 33
Section 14.1 Events of Default 33
Section 14.2 Landlord's Remedies 34
Section 14.3 Written Notice of Termination Required 36
Section 14.4 Remedies Cumulative; No Waiver 37
Section 14.5 Legal Costs 37
Section 14.6 Waiver of Damages 37
Article 15 Subordination/Estoppel 37
Section 15.1 Lease Subordinate 37
Section 15.2 Attornment 38
Section 15.3 Tenant's Notice of Default 38
Section 15.4 Estoppel Certificates 38
Article 16 Miscellaneous 38
Section 16.1 Time is of the Essence 39
Section 16.2 Memorandum of Lease 39
Section 16.3 Joint and Several Liability 39
Section 16.4 Broker 39
Section 16.5 Notices 39
Section 16.6 Landlord's Agent 40
Section 16.7 Quiet Enjoyment 40
Section 16.8 Successors and Assigns 40
Section 16.9 Severability 40
Section 16.10 No Abandonment or Waste 40
Section 16.11 Transfers by Landlord 40
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Section 16.12 Delivery of Documents and Information 41
Section 16.13 Headings 41
Section 16.14 Written Agreement 4l
Section 16.15 Modifications or Amendments 41
Section 16.16 Landlord Control 41
Section 16.17 Utility Easements 41
Section 16.18 Not Binding Until Properly Executed 41
Section 16.19 Building Rules and Regulations 42
Section 16.20 Compliance with Laws and Recorded Covenants 42
Section 16.21 Obligations Survive Termination 42
Section 16.22 Tenant's Waiver 42
Section 16.23 Tenant Authorization 43
Section 16.24 No Partnership or Joint Venture 43
Section 16.25 Tenant's Obligation to Pay Miscellaneous Taxes 43
Section 16.26 Prohibited Signs 43
Section 16.27 Exhibits 43
Article 17 Option to Renew 43
Section 17.l Option to Renew 43
Section 17.2 Renewal Term Election Procedure Value 44
Section 17.3 Determination of Fair Market Rental Value 44
Exhibits 1
Exhibit A Legal Description of Property 1
Exhibit B Site Plan 1
Exhibit C Floor Plan 1
Exhibit D Milestone Dates 1
Exhibit E Holidays 1
Exhibit F General Description of Janitorial Services 1
Exhibit G General Description of Building Standard 1
Exhibit H Form of Subordination, Non-Disturbance and Attornment Agreement 1
Exhibit I Building Rules and Regulations 1
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Glossary of Defined Terms
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Defined Term Section of Definition
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ADA Section 4.1 (c)
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Additional Rent Section 2.1
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Base Building Section 4.1(a)
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Base Rent Section 1.1
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BOMA Standards Section 1.1
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Building Recital A
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Building Amenities Recital A
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Building Standard Section 8.1
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Calendar Year Section 2.2(a)
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Change Order Section 4.3
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Construction Allowance Section 4.2(b)
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Construction Costs Section 4.2(d)
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Default Section 14.1
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Deficiency Section 14.2(a)
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Delayed Scheduled Commencement Date Section 4.7(b)
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Deli Recital A
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Event of Default Section 14.1
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Excused Delays Section 4.4
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Executive Parking Area Recital A
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Fair Market Rental Value Section 17.3
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Final Leasehold Improvement Plans Section 4.1(a)
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Fitness Center Recital A
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Floor/Floors Recital A
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Holidays Section 5.1
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HVAC System Section 2.2(c)
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Independent CPA Section 2.8(a)
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Initial Term Granting Clause
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Interest Rate Section 3.1
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Landlord Introductory Paragraph
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Lease Introductory Paragraph
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Lease Commencement Date Granting Clause
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Lease Year Section 1.1
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Leasehold Improvement General Contractor Section 4.1(a)
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Leasehold Improvements Section 4.1(a)
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Milestone Dates Section 4.7(f)
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Mortgagee Section 15.3
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Office Complex Recital A
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Office Space Recital B
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Operating Expenses Section 2.2(c)
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Original Office Space Section 7.5
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Park Recital A
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Parking Area Recital A
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Parking Capacity Recital A
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Parking Garage Recital A
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Pre-Lease Commencement Date Access Section 4.7(c)
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Premises Recital B
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Property Recital A
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Real Estate Taxes Section 2.2(b)
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Renewal Exercise Date Section 17.2
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Renewal Term Section 17.1
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Rent Section 3.2
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RSF Section 1.1
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Scheduled Commencement Date Section 4.7(b)
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Security Deposit Section 1.3
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Substitute Office Space Section 7.5
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Substitution Election Section 7.5
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Substitution Notice Section 7.5
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Tenant Introductory Paragraph
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Tenant's Architect Recitals
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Tenant's Pro Rata Share of Operating Expenses Section 2.2(d)
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Tenant's Pro Rata Share of Real Estate Taxes Section 2.2(d)
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Tenant's Renewal Election Notice Section 17.2
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Tenant's Renewal Inquiry Notice Section 17.2
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Term Granting Clause
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Work Section 8.1
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Village Recital A
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Highland Landmark III Office Lease
This Highland Landmark III Office Lease ("Lease") is made and entered into
as of the 20th day of March, 2000, by and between Opus/AEW Office Development
Company, L.L.C., a Delaware limited liability, company authorized to transact
business in Illinois ("Landlord"), and Vitria Technology, Inc., a California
corporation authorized to transact business in Illinois ("Tenant").
Recitals:
A. Landlord is the fee title holder of that certain parcel of real estate
containing approximately 8.773 acres, which parcel is located in the Highland
Landmark Office Park ("Park") in the Village of Downers Grove, Illinois
("Village") and is legally described on Exhibit A attached hereto and made a
part hereof (which parcel, including, without limitation, any and all easement
areas appurtenant thereto, is hereinafter referred to as the "Property").
Landlord is constructing on the Property a nine (9)-story office building
("Building"). The first floor through the ninth floor of the Building are herein
individually called a "Floor," and are herein collectively called "Floors."
Landlord will also construct a six (6)-level parking facility appurtenant to the
Building for approximately 980 vehicles ("Parking Garage"). In addition, at
Landlord's sole option, Landlord may construct an on-grade parking area on the
Property for approximately fifty-eight (58) vehicles ("Parking Area"). The
Parking Garage and the Parking Area (if any) will together provide parking
spaces for approximately 4.0 automobiles per 1,000 RSF (as such term is defined
in Section 1.1 hereof) of office space in the Building ("Parking Capacity"). The
Parking Garage will include a controlled-access executive area ("Executive
Parking Area"). Other than in the Executive Parking Area or as otherwise
provided herein, parking in the Parking Garage and in the Parking Area (if any)
will be available on a first come, first serve basis. The Building and the
Parking Garage will be constructed at the approximate location on the Property
indicated on the site plan attached hereto and made a part hereof as Exhibit B.
The Property, the Building, the Parking Garage, the Parking Area (if any), and
any and all other improvements from time to time constructed on the Property in
accordance with the provisions of this Lease, are collectively hereinafter
referred to as the "Office Complex." The first Floor will contain various
service areas for the benefit (albeit at a charge customers thereof) of all
tenants of the Building, including, without limitation, a delicatessen with
sit-down table service for breakfast and lunch ("Deli") and a fitness center
("Fitness Center") (together, "Building Amenities").
B. In accordance with the terms, provisions and conditions of this Lease,
Landlord desires to let to Tenant, and Tenant desires to lease and hire from
Landlord, certain office space in the Building. Such office space will, for
purposes of this Lease, consist of 5,096 RSF (as such term is defined in Section
1.1 hereof) on the fourth Floor (Suite 450), and is generally depicted on the
floor plan attached hereto and made a part hereof as Exhibit C ("Office Space"
or "Premises"). Landlord and Tenant acknowledge and agree that the aforesaid RSF
of the Office Space is based on the plans dated February 25, 2000, prepared by
Tenant's architect, Hahn, Lougee & Associates, Inc. (together with Tenant's
engineers, if any and as applicable, as may be reasonably acceptable to
Landlord, "Tenant's Architect").
C. Tenant hereby accepts this Lease and the Premises upon the covenants and
conditions set forth herein and subject to any and all encumbrances, covenants,
conditions, restrictions and other matters of record and all applicable zoning,
municipal, county, state and federal laws, ordinances and regulations governing
and regulating the use of the Premises.
LANDLORD HEREBY DEMISES AND LEASES THE PREMISES TO TENANT, TO HAVE AND TO
HOLD THE SAME, without any liability or obligation on the part of Landlord to
make any
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alterations, improvements or repairs of any kind on or about the Premises,
except as expressly provided herein, for an initial term of five (5) years
("Initial Term"), commencing on the first (1st) day of June, 2000 (except as
such date may be modified pursuant to the provisions of Article 4 hereof, such
date is hereafter recurred to as the "Lease Commencement Date"), and ending on
the thirty-first (31st) day of May, 2005, unless sooner terminated or unless
extended, in each case in the manner provided hereinafter ("Term"), to be
occupied and used by Tenant for general office purposes and related incidental
uses (subject to Section 4.9 hereof), and for no other purpose, subject to the
covenants and agreements hereinafter contained.
Agreements:
Now, therefore, for and in consideration of the foregoing Recitals (which
are hereby made a part of this Lease), the Exhibits attached hereto or to be
attached hereto, and the covenants and agreements hereafter set forth, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Landlord and Tenant agree as follows:
ARTICLE 1
BASE RENT; OTHER AMENITIES; SECURITY DEPOSIT
Section 1.1 Base Rent. In consideration of the leasing aforesaid, and
subject to the terms, provisions and conditions of this Lease, Tenant agrees to
pay to Landlord, c/o Opus North Management Corporation, Suite 900, 9700 Higgins
Road, Rosemont, Illinois 60018-4713, or at such other place as Landlord from
time to time may designate in writing, an annual base rental during each twelve
(12)-month period during the Term, beginning on the Lease Commencement Date
("Lease Year"), based on the rentable square footage ("RSF") of the Premises, as
determined in accordance with the methods of measuring rentable area as
described in the Standard Method for Measuring Floor Area in Office Buildings,
ANSI Z65.1-1996, as promulgated by the Building Owners and Managers Association
International ("BOMA Standards"). The RSF of the Office Space will be that set
forth in Recital B hereof.
Tenant will pay to Landlord an annual base rental for the Office Space
during each Lease Year, based on the RSF thereof, as follows:
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Lease Year Annual Base Rental Rate Annual Base Rent Monthly Base Rent
per RSF of Office Space
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1 $18.00 $ 91,728.00 $7,644.00
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2 $18.54 $ 94,479.84 $7,873.32
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3 $19.10 $ 97,333.60 $8,111.13
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4 $19.67 $100,238.32 $8,353.19
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5 $20.56 $103,244.96 $8,603.75
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The aforesaid annual rental amounts are sometimes hereinafter referred to as the
"Base Rent," and will be payable monthly, in advance, in equal monthly
installments, commencing on the first day of the Term (except as provided in
this Section 1.1) and continuing on the first day of each and every month
thereafter for the next succeeding months during the balance of the Term. If the
Term commences on a date other than the first day of a calendar month or ends on
a date other than the last day of a calendar month, monthly rent for the first
month of the Term or the last month of the Term, as the case may be, will be
prorated based upon the ratio that the number of days in the Term within such
month bears to the total number of days in such month.
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Section 1.2 Parking. Subject to this Section 1.2(a), during the entire
Term, Tenant will lease one (1) reserved parking space in the Executive Parking
Area for the exclusive use of Tenant, and its employees, licensees and invitees.
There will be no charge for such reserved space during the first Lease Year.
Beginning on the first day of the second Lease Year, Tenant will pay to Landlord
a monthly gross rental charge for such reserved parking space in the amount of
Sixty-Two and 50/100ths Dollars ($62.50) (such monthly charge to be increased
each Lease Year thereafter by Two and 50/100ths Dollars ($2.50) per month).
Tenant will pay such gross rental to Landlord, in advance, in monthly
installments together with the payment of Base Rent hereunder. Such reserved
parking space will not be included as a part of the Office Space for purposes of
the determination of Tenant's Pro Rata Share of Real Estate Taxes (as such term
is defined in Section 2.2(d) hereof) or Tenant's Pro Rata Share of Operating
Expenses (as such term is defined in Section 2.2(d) hereof) hereunder. Subject
to this Section 1.2(a), other than in the Executive Parking Area, parking in the
Parking Garage and in the Parking Area (if any) will be available on a first
come, first serve basis. Landlord reserves the right to designate areas of the
Parking Garage and the Parking Area (if any) where Tenant, and its agents,
employees, licensees and invitees, will park, and may exclude Tenant, and its
agents, employees, licensees and invitees, from parking in other areas as
designated by Landlord; provided, however, that Landlord will not be liable to
Tenant for the failure of any tenant, or its employees, agents, licensees and
invitees, to abide by Landlord's designations or restrictions. Tenant, and its
employees, licensees and invitees, will not be permitted to use more spaces in
the Parking Garage (including, without limitation, the aforesaid spaces in the
Executive Parking Area) or the Parking Area (if any) than those attributable to
the Premises pursuant to the Parking Capacity, and the use of all parking spaces
in the Parking Garage and the Parking Area (if any) will be subject to such
reasonable roles and regulations as Landlord may from time to time institute.
Anything in this Lease to the contrary notwithstanding, but without decreasing
the Parking Capacity available to Tenant hereunder, Landlord may reserve parking
spaces in the Parking Area in a location from time to time designated by
Landlord, for the exclusive use of visitors to the Building and other tenants in
the Building (and their respective employees, licensees and invitees).
Section 1.3 Security Deposit. Contemporaneously with the execution hereof,
Tenant will pay to Landlord the sum of Twenty-One Thousand and 00/100ths Dollars
($21,000.00) ("Security Deposit"). The Security Deposit will be held by Landlord
without liability for interest and as security for the performance by Tenant of
Tenant's covenants and obligations under this Lease. It is expressly understood
that the Security Deposit will not be considered an advance payment of Base Rent
or Additional Rent (as such term is defined in Section 2.1 hereof), or a measure
of Landlord's damages in case of an Event of Default. Upon the occurrence of an
Event of Default, Landlord may, from time to time, without prejudice to any
other remedy, use the Security Deposit to the extent necessary to make good any
arrearages of Base Rent, Additional Rent, or any other damage, injury, expense
or liability caused to Landlord by such Event of Default. Following any such
application of the Security Deposit, Tenant will pay to Landlord on demand the
amount so applied in order to restore the Security Deposit to its original
amount. Provided there exists no Event of Default hereunder, Landlord will
return to Tenant any remaining balance of the Security Deposit upon the
expiration or earlier termination of this Lease. Landlord may assign the
Security Deposit to the transferee and thereafter will have no further liability
for the return of the Security Deposit.
ARTICLE 2
ADDITIONAL RENT
Section 2.1 Additional Rent. In addition to the Base Rent payable by Tenant
under the provisions of Article 1 hereof, Tenant will pay to Landlord
"Additional Rent" as hereinafter provided in this Article 2. All sums under this
Article and all other sums and charges required to be paid by Tenant under the
Lease (except Base Rent), however denoted, will be deemed to be "Additional
Rent." If any such amounts or charges are not
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paid at the time provided in the Lease, they will nevertheless be collectible as
Additional Rent with the next installment of Base Rent falling due.
Section 2.2 Definitions. For the purposes of this Article 2, the parties
hereto agree upon the following definitions:
(a) "Calendar Year" will mean each of those calendar years commencing with
and including the year during which the Term commences, and ending
with the calendar year during which the Term (including any extensions
or renewals) terminates.
(b) "Real Estate Taxes" will mean and include all personal property taxes
of Landlord relating to Landlord's personal property, located in the
Office Complex and used or useful in connection with the operation and
maintenance thereof, real estate taxes and installments of special
assessments, including interest thereon, relating to the Property and
Office Complex, and all other governmental charges, general and
special, ordinary and extraordinary, foreseen as well as unforeseen,
of any kind and nature whatsoever, or other tax, however described,
which is levied or assessed by the United States of America or the
state in which the Office Complex is located or any political
subdivision thereof, against Landlord or all or any part of the Office
Complex as a result of Landlord's ownership of the Property or Office
Complex, and payable during the respective Calendar Year. It will not
include any net income tax, gift tax, estate tax, franchise tax,
capital stock tax, conveyance or transfer tax, or inheritance tax, so
long as none of the same is in lieu of real estate taxes. Further,
"Real Estate Taxes" will include, without limitation, Real Estate
Taxes attributable to the entire first Floor, regardless of the fact
that no "Real Estate Taxes" will be allocable (for purposes of the
payment of a portion thereof) to the Building Amenities located on the
first Floor.
(c) "Operating Expenses" will mean and include, except as otherwise
provided in this Section 2.2(c), all expenses incurred with respect to
the maintenance and operation of the Property and Office Complex as
determined by Landlord's accountant in accordance with generally
accepted accounting principles consistently followed, including,
without limitation, Park assessments, insurance premiums, maintenance
and repair costs, steam, electricity, water, sewer, gas and other
utility charges, fuel, lighting, window washing, janitorial services,
trash and rubbish removal, wages payable to employees of Landlord
whose duties are connected with the operation and maintenance of the
Property and Office Complex (but only for the portion of their time
allocable to work related to the Property or the Office Complex), all
expenses incurred and costs associated with the operation and
maintenance of the Building Amenities (including, without limitation,
the cost of repair or replacement of the kitchen equipment in the
Deli, the cost of repair or replacement of any fixtures, exercise
machines or any other equipment in the Fitness Center, and the cost of
repair or replacement of any other equipment used in connection with
the Deli, the Fitness Center or any other Building Amenities, the
costs of providing utilities, cleaning and any other building services
to the Building Amenities, and the costs incurred for the payment of
any third party fees in connection with the operation and maintenance
of any of the Building Amenities), amounts paid to contractors or
subcontractors for work or services performed in connection with the
operation and maintenance of the Property and Office Complex, all
costs of uniforms, supplies and materials used in connection with the
operation and maintenance of the Property and Office Complex, all
payroll taxes, unemployment insurance costs, vacation allowances, and
the cost of providing disability insurance or
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benefits, pensions, profit sharing benefits, hospitalization,
retirement or other so-called fringe benefits, and any other expense
imposed on Landlord, or its contractors or subcontractors, pursuant to
law or pursuant to any collective bargaining agreement covering such
employees, all services, supplies, repairs, replacements or other
expenses for maintaining and operating the Property and the Office
Complex, reasonable attorneys' fees and costs in connection with any
appeal or contest of real estate or other taxes or levies, and such
other expenses as may be ordinarily incurred in the operation and
maintenance of an office complex and not specifically set forth
herein, including, without limitation, reasonable management fees and
the costs of a building office at the Office Complex. The term
"Operating Expenses" will also include the pro rata share allocable to
the Office Complex of those expenses incurred by Landlord in
connection with city sidewalks adjacent to the Property and any
pedestrian walkway system (either above or below ground) or other
public facility to which Landlord or the Office Complex is from time
to time subject in connection with the operation of the Office
Complex. The term "Operating Expenses" will also include all expenses
incurred in connection with the maintenance, repair and operation of
the heating, ventilating and cooling systems servicing the Building,
exclusive of such systems which service only a particular tenant's
space in the Building ("HVAC System"), as such expenses are determined
by Landlord's accountant in accordance with generally accepted
accounting principles consistently followed. Such expenses will
include, without limitation, supplies in connection with the operation
of the HVAC System (such as chemicals, filters, belts and the like),
electricity separately metered to the operation of the HVAC System,
and labor and materials related to the operation of the HVAC System.
Subject to this Section 2.2(c), the term "Operating Expenses will not
include the following:
(i) any capital improvements to the premises of any other tenant in
the Building or any other portion of the Office Complex
(including, without, limitation, the HVAC System), other than
as described in clause (iv) below;
(ii) expenses incurred in leasing or procuring tenants, leasing
commissions, advertising expenses, expenses for renovating
space for new tenants, or legal expenses incident to
enforcement by Landlord of the terms of any lease;
(iii) interest or principal payments on any mortgage or other
indebtedness of Landlord;
(iv) depreciation allowance or expense, provided, however, that in
the event Landlord installs equipment in or makes improvements
or alteration to the Office Complex (including, without
limitation, the HVAC System) which are for the purpose of
reducing energy costs, maintenance costs or any other Operating
Expenses, or which are required under any governmental laws,
regulations or ordinances which were not required on the date
of this Lease, Landlord may include in the Operating Expenses
reasonable charges for interest on such investment and
reasonable charges for depreciation on the same so as to
amortize such investment over the
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reasonable life of such equipment, improvement or alteration on
a straight-line basis;
(v) costs of operating the Deli and the Fitness Center, to the
extent (if any) that such costs are offset by any net income
received by Landlord from the operation of the Deli and the
Fitness Center (i.e., any net income received by Landlord from
the operation of the Deli and the Fitness Center will be used
to offset Operating Expenses);
(vi) costs of repairs or other work occasioned by fire, earthquake,
windstorm or other casualty, to the extent that Landlord has
been reimbursed by insurance companies therefor;
(vii) subject to Section 4.11 hereof, costs in excess of Two Thousand
Five Hundred and 00/100ths Dollars ($2,500.00) per Calendar
Year, for the remediation of any hazardous substances or
materials not caused by Tenant;
(viii) costs of any work performed, to the extent that Landlord has
received compensation from any authorities in connection with
an eminent domain proceeding;
(ix) costs of providing construction warranty services with respect
to the Building or with respect to tenant improvements provided
to Tenant; and
(x) unless caused by Tenant, fines or penalties incurred due to
violations by Landlord of any applicable law, statute,
ordinance, rule or regulation with respect to the operation of
the Building or due to breach of any lease by Landlord.
(d) "Tenant's Pro Rata Share of Real Estate Taxes" and "Tenant's Pro Rata
Share of Operating Expenses" will each mean that portion of the Real
Estate Taxes or Operating Expenses, respectively, which is equal to
the percentage figure determined by dividing the RSF of the Office
Space by the RSF of all of the leaseable office span in the Building.
As of the date of this Lease, Tenant's Pro Rata Share of Real Estate
Taxes and Tenant's Pro Rata Share of Operating Expenses will each be
1.936%
Section 2.3 Adjustment of Operating Expenses. Notwithstanding anything to
the contrary set forth above, it is agreed that in the event the Building is not
fully occupied during any Calendar Year, a reasonable and equitable adjustment
will be made by Landlord in computing that portion of the Operating Expenses for
such year which vary on the basis of the proportion of the Building which is
occupied from time to time, so that such portion of the Operating Expenses will
be adjusted to the amount that would have been incurred had the Building been
fully occupied during such Calendar Year.
Section 2.4 Estimated Real Estate Taxes and Operating Expenses for Initial
Calendar Year. As to the Calendar Year during which the Term commences, Landlord
will estimate the amount of Tenant's Pro Rata Share of Real Estate Taxes and the
amount of Tenant's Pro Rata Share of Operating Expenses (based upon the
estimated number of months of the Term within such initial Calendar Year), and
will notify Tenant thereof, in writing.
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Section 2.5 Estimated Real Estate Taxes and Operating Expenses for
Subsequent Calendar Years, Subject to Section 2.2(c) hereof, as to each Calendar
Year after the initial Calendar Year, Landlord will estimate for each such
Calendar Year (a) the total amount of the Real Estate Taxes; (b) the total
amount of the Operating Expenses; (c) Tenant's Pro Rata Share of Real Estate
Taxes; (d) Tenant's Pro Rata Share of Operating Expenses; and (e) the
computation of the annual and monthly Additional Rent payable during such
Calendar Year as a result of increases or decreases in Tenant's Pro Rata Share
of Real Estate Taxes and Tenant's Pro Rata Share of Operating Expenses. Such
estimate will be in writing and will be delivered to Tenant at the Premises.
Section 2.6 Payment of Additional Rent. Tenant will pay, as Additional
Rent, the respective amounts of Tenant's Pro Rata Share of Real Estate Taxes and
Tenant's Pro Rata Share of Operating Expenses for each Calendar Year, as
estimated by Landlord hereunder, in equal monthly installments, in advance, on
the first day of each month during each applicable Calendar Year. In the event
that such estimate is delivered to Tenant after the first day of January of the
applicable Calendar Year, then the last estimate for the prior Calendar Year
will remain in effect until the estimate for the applicable Calendar Year has
been delivered to Tenant. Such newly estimated amount will thereafter be payable
as Additional Rent hereunder, in equal monthly installments, in advance, on the
first day of each month over the balance of such Calendar Year, with the number
of installments being equal to the number of full calendar months remaining in
such Calendar Year.
Section 2.7 Re-estimates of Real Estate Taxes and Operating Expense.
Subject To Section 2.2(c) hereof, from time to time during any applicable
Calendar Year, Landlord may re-estimate the amount of Real Estate Taxes and
Operating Expenses and Tenant's Pro Rata Share thereof, in such event Landlord
will notify Tenant, in writing, of such re-estimate in the manner above set
forth and fix monthly installments for the then-remaining balance of such
Calendar Year in an amount sufficient to pay the re-estimated amount over the
balance of such Calendar Year, after giving credit for payments made by Tenant
on she previous estimate.
Section 2.8 Adjustment of Actual Real Estate Taxes and Operating Expenses.
Upon completion of each Calendar Year, Landlord will cause its accountants to
determine the actual amount of Real Estate Taxes and Operating Expenses for such
Calendar Year and Tenant's Pro Rata Share thereof, and will deliver a written
certification of the amounts thereof to Tenant after the end of each Calendar
Year. If Tenant has paid less than its Pro Rata Share of Real Estate Taxes or
less than its Pro Rata Share of Operating Expenses for any Calendar Year, Tenant
will pay the balance of its Pro Rata Share of the same within ten (10) days
after receipt of such statement. If Tenant has paid more than its Pro Rata Share
of Real Estate Taxes or more than its Pro Rata Share of Operating Expenses for
any Calendar Year, Landlord will, at Tenant's option, either (a) refund such
excess, or (b) credit such excess against the most current monthly installment
or installments due Landlord for its estimate of Tenant's Pro Rata Share of Real
Estate Taxes or Tenant's Pro Rata Share of Operating Expenses for the next
following Calendar Year. A pro rata adjustment will be made for a fractional
Calendar Year occurring during the Term or any renewal or extension thereof
based upon the number of days of the Term during such Calendar Year as compared
to three hundred sixty-five (365) days, and all additional sums payable by
Tenant or credits due Tenant as a result of the provisions of this Article 2
will be adjusted accordingly.
Upon reasonable advance written notice, and during normal business hours,
Tenant and its employees, agents and representatives will have the right, at the
Premises or at the office of Landlord or the managing agent, to inspect and
review Landlord's books and records with respect to (and only with respect to)
Real Estate Taxes and Operating Expenses; provided, however, that any such
review will be completed in not more Than sixty (60) days after the date on
which Landlord has submitted its statement as provided in this Section 2.8. If
Tenant believes that any error exists in Landlord's calculation of Real Estate
Taxes or Operating Expenses, Tenant will notify Landlord thereof (giving
reasonable detail of the basis for Tenant's belief) within ten (10) days after
the completion of such review. Then, if within twenty (20) days after the
delivery of such notification, Landlord and Tenant are not able to agree on the
amount of the Real Estate Taxes or Operating Expenses, such disagreement will be
resolved in accordance with this Section 2.8. Within five (5) days after
Landlord's and Tenant's failure to
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reach agreement as aforesaid, then Landlord and Tenant will agree on an
independent certified public accountant (the compensation of whom will not be
incentive-based or otherwise dependent, in whole or in part, on the discovery of
errors in the computation of the Real Estate Taxes or the Operating Expenses) to
be designated to resolve such disagreement ("Independent CPA"). If Landlord and
Tenant are unable to agree on the Independent CPA to be designated, then within
five (5) days after the expiration of the aforesaid initial five (5)-day period,
each of Landlord and Tenant will designate an independent certified public
accountant (the compensation of whom will not be incentive-based or otherwise
dependent, in whole or in part, on the discovery of errors in the computation of
the Real Estate Taxes or the Operating Expenses), which designation will be set
forth in a written notice given to the other. Within five (5) days thereafter,
such two (2) independent certified public accountants will designate a third
independent certified public accountant (subject to the aforesaid requirements
as to compensation) who will act as the Independent CPA hereunder. Within thirty
(30) days after his or her designation, the Independent CPA will determine the
amount of the Real Estate Taxes and Operating Expenses for the Calendar Year in
question, which determination will be made in accordance with the terms,
provisions and conditions of this Lease and will be final and binding on both
Landlord and Tenant. Landlord and Tenant will make any necessary adjusting
payments to each other within thirty (30) days after the Real Estate Taxes and
Operating Expenses have been determined in accordance with the foregoing
applicable provisions. The costs of the aforesaid review (including, without
limitation, the costs of the Independent CPA and the costs of the other two
independent certified public accountants, if applicable) will be borne entirely
by Tenant if the results thereof reveal an error of less than five percent (5%)
in either the Real Estate Taxes or the Operating Expenses. The costs of the
aforesaid review (including, without limitation, the costs of the Independent
CPA and the costs of the other two independent certified public accountants, if
applicable) will be borne entirely by Landlord if the results thereof reveal an
error which is equal to or greater than five percent (5%) in both the Real
Estate Taxes and the Operating Expenses.
Section 2.9 Separately Metered Utilities. Electrical service will be
separately metered to the Office Space and charged directly to Tenant. Tenant
will pay any and all such charges when due, and prior to the attachment of any
lien or other collection action being taken by the utility providing such
service. Such payments will constitute Additional Rent hereunder; provided,
however, that the parties acknowledge and agree that such payments will not be
due and payable to Landlord, unless Tenant defaults in its payment obligations
to the appropriate utilities and, after notice and an opportunity for Tenant to
cure as provided herein, Landlord makes such payment itself. The cost of
installing such separate metering will be included among the Construction Costs
(as such term is defined in Section 4.2(d) hereof).
Section 2.10 Other Additional Rent. Tenant will pay, also as Additional
Rent, all other sums and charges required to be paid by Tenant under this Lease,
and any tax or excise on rents, gross receipts tax, or other tax, however
described, which is levied or assessed by the United Sags of America or the
state in which the Office Complex is located or any political subdivision
thereof, against Landlord in respect to the Base Rent, Additional Rent, or other
charges reserved under this Lease or as a result of Landlord's receipt of such
rents or other charges accruing under this Lease; provided, however, that Tenant
will have no obligation to pay net income taxes of Landlord.
ARTICLE 3
INTEREST ON BASE AND ADDITIONAL RENT; RENT INDEPENDENT
Section 3.1 Interest on Past Due Obligations. Any installment of Base Rent,
Additional Rent, or other charges to be paid by Tenant accruing under the
provisions of this Lease which will not be paid when due, will bear interest at
a per annum rate equal to two (2) percentage points in excess of the "prime
rate" of interest then charged by Harris Trust and Savings Bank, Chicago,
Illinois (or, if it is not then in existence, its successor, or if neither is
then in existence, another reasonably comparable bank), from the date when the
same is due until the
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same will be paid, but if such rate exceeds the maximum interest rate permitted
by law, such rate will be reduced to the highest rate allowed by law under the
circumstances ("Interest Rate").
Section 3.2 Rent Independent. Tenant's covenants to pay the Base Rent and
the Additional Rent are independent of any other covenant, condition, provision
or agreement herein contained. Nothing herein contained will be deemed to
suspend or delay the payment of any amount of money or charge at the time the
same becomes due and payable hereunder, or limit any other remedy of Landlord.
Base Rent and Additional Rent are sometimes collectively referred to as "Rent."
Rent will be payable without deduction, offset, prior notice or demand, in
lawful money of the United States.
ARTICLE 4
CONSTRUCTION OF BASE BUILDING, LEASEHOLD IMPROVEMENTS; POSSESSION OF PREMISES
Section 4.1 Plans for Construction of Building and Leasehold Improvements.
(a) Prior to the Lease Commencement Date (but in the case of the Building
Amenities, on or about the Lease Commencement Date), Landlord, or its general
contractor ("Leasehold Improvement General Contractor"), and its subcontractors
and sub-subcontractors, (i) will construct the base building portion of the
Building, including, without limitation, the Parking Garage and sitework and
landscaping, and the Building Amenities, but exclusive of any and all
improvements of or for other occupants of the Building and also exclusive of any
corridor-related improvements which are located in the Office Space or on the
Office Space side of a common corridor, all such corridor-related improvements
being part of the Leasehold Improvements hereunder ("Base Building"); and (ii)
will, at Tenant's sole cost and expense (subject to Section 4.2 hereof), fit up
the Office Space with the "Leasehold Improvements" in substantial accordance
with the construction plans therefor (including, without limitation, all
required mechanical, electrical, plumbing, fire/life safety and other
architectural and engineering drawings) to be prepared by Tenant's Architect,
subject to Landlord's reasonable approval thereof ("Final Leasehold Improvement
Plans"). Anything in this Lease to the contrary notwithstanding, (i) Landlord
will have a reasonable period of time after the Lease Commencement Date to
complete, among other things, any surface coat paving and landscaping of
exterior areas which cannot reasonably be completed by the Lease Commencement
Date due to Excused Delays (as such term is defined in Section 4.4 hereof); and
(ii) Landlord will have no obligation to Tenant with respect to (A) the
completion (or the time thereof) of tenant improvements or finishes for tenant
spaces within the Building other than the Premises, or (B) the completion of
components of the Building or the Office Complex which (1) do not materially
affect the structure or function of the Building or the Office Complex, or the
systems or components thereof, (2) are not within or do not directly serve the
Premises, and (3) do not unreasonably adversely affect the appearance or
aesthetics of the Building or the Office Complex, either from the exterior
thereof or from any of the common areas thereof.
(b) Tenant acknowledges that it will be required (i) to cause the Final
Leasehold Improvement Plans to be prepared and completed in a timely manner by
Tenant's Architect, subject to Landlord's reasonable approval thereof, which
approval will in turn be subject to all applicable governmental requirements and
applicable law, and (ii) to make certain color and other selections for or with
respect to the Leasehold Improvements. Anything in this Lease to the contrary
notwithstanding, Tenant will provide Landlord with the Final Leasehold
Improvement Plans and with any and all required color and other selections no
later than March 15, 2000. In those cases where Landlord's reasonable approval
is required under this Section 4.1(b), if Landlord fails to disapprove any of
the Final Leasehold Improvement Plans within ten (10) business days after their
delivery, such Final Leasehold Improvement Plans, as delivered, will be deemed
to have been approved. However, if any Final Leasehold Improvement Plans are
disapproved within such ten (10)-business day period,
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Landlord will notify Tenant thereof, in writing, within such ten (10)-business
day period, detailing with reasonable specificity that portion or element which
has been disapproved and the reasons for such disapproval. Thereafter, in each
instance of further resubmission of the Final Leasehold Improvement Plans,
Landlord will have three (3) business days to approve or disapprove, and Tenant
will have five (5) business days within which to revise and resubmit the
disapproved Final Leasehold Improvement Plans for Landlord's approval or
disapproval, as aforesaid. Such five (5)-business day and three (3)-business day
sequence of resubmission and approval or disapproval will continue until such
time as the Final Leasehold Improvement Plans have been approved by Landlord,
and, when so approved, representatives of Landlord and Tenant will affix their
respective signatures or initials to each page comprising the approved Final
Leasehold Improvement Plans.
(c) Landlord will furnish (i) at Landlord's sole cost and expense, all of
the material, labor and equipment for the construction on the Property of the
Base Building, and (ii) at Tenant's sole cost and expense (subject to Section
4.2 hereof), all of the material, labor and equipment for the construction of
the Leasehold Improvements therein as specified in the Final Leasehold
Improvement Plans. Such construction will be effected in a good and workmanlike
manner in substantial accordance with the Final Leasehold Improvement Plans.
Subject to this Section 4.1(c), Landlord will complete, or cause the completion
of, the construction thereof (other than with respect to Tenant's use thereof
and other than with respect to the design of the Leasehold Improvements, which
compliance will be the responsibility of Tenant, either itself or through
Tenant's Architect), in substantial accordance with all building and zoning laws
(other than with respect to Tenant's use thereof, which compliance will be
Tenant's responsibility) of the place in which the Property is situated, all
laws, ordinances, orders, rules, regulations and requirements of all federal,
state and municipal governments and the appropriate departments, commissions,
boards and officers thereof, and the orders, rules and regulations of the Board
of Fire Underwriters where the Property is situated, or any other body
exercising similar functions, in all cases as the same are in effect and
enforced by the governmental or other bodies having jurisdiction over such
matters as of the date on which the initial building permits therefor are issued
by the appropriate governmental authorities. Among other things, Landlord will
be responsible for the full compliance of the Base Building (but not the
Leasehold Improvements) with the accessibility requirements of Title III of the
applicable provisions of the Americans with Disabilities Act of 1990 ("ADA"), as
the same are in effect and enforced by governmental or other bodies having
jurisdiction over such matters as of the date on which the initial building
permits therefor are issued by the appropriate governmental authorities. All
compliance with ADA, and all compliance with all laws, ordinances, orders,
rules, regulations and requirements of all federal, state and municipal
governments and the appropriate departments, commissions, boards and officers
thereof, and the orders, rules and regulations of the Board of Fire Underwriters
where the Property is situated, or any other body exercising similar functions,
in all cases as the same are from time to time in effect and enforced by the
governmental or other bodies having jurisdiction over such matters, in each case
as they relate to the Leasehold Improvements and any Work (as such term is
defined in Section 8.1 hereof) will be the sole responsibility of Tenant and
Tenant's Architect.
Section 4.2 Allowances for Leasehold Improvements; Bidding for
Subcontractors.
(a) Although Tenant will be solely responsible for all costs and expenses
in connection with the construction of the Leasehold Improvements, with respect
to the planning, design (including, without limitation, all mechanical,
electrical, plumbing, fire/life safety and other architectural and engineering
drawings, all of which will be the responsibility of Tenant) and construction of
the Leasehold Improvements, Tenant will be entitled to an allowance equal to the
sum of Thirty-Three and 10/100ths Dollars ($33.10) per RSF of the Office Space.
Landlord, the Leasehold Improvement General Contractor, and their respective
subcontractors and sub-subcontractors, and not any third parties, will perform
the construction of the Leasehold Improvements, albeit at Tenant's sole cost and
expense as provided herein. Anything in this Lease to the contrary
notwithstanding, Tenant will be required to expend not less than Thirty-Two and
00/100ths
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Dollars ($32.00) per RSF of the Office Space in (as such term is defined in
Section 4.2(d) hereof) in connection with the construction of the Leasehold
Improvements.
(b) The aggregate allowance with regard to the planning, design and
construction of the Leasehold Improvements, as set forth in Section 4.1(a)
hereof, is hereinafter referred to as the "Construction Allowance."
(c) During the construction of the Leasehold Improvements, Landlord, or the
Leasehold Improvement General Contractor, will periodically provide Tenant with
updated projections of the Construction Costs, as compared with the Construction
Allowance. In the event that such projected Construction Costs exceed the
Construction Allowance, then during the balance of the period of construction of
the Leasehold Improvements, Tenant will pay the entire amount of such excess to
Landlord, on a progress pay basis, within ten (10) days after Landlord's invoice
to Tenant therefor. As soon as practicable following the Lease Commencement
Date, Landlord (i) will determine the actual Construction Costs, (ii) will
reconcile such actual Construction Costs with the Construction Allowance and the
foregoing payments (if any) theretofore made by Tenant, and (iii) will notify
Tenant, in writing, of such determination and reconciliation. In the event that
such reconciliation shows that the sum of the Construction Allowance plus any
progress payments theretofore made by Tenant exceeds the Construction Costs,
then the excess (up to a maximum of the progress payments theretofore made) will
be credited against the Base Rent payments due hereunder from and after the
Lease Commencement Date (beginning with the first Base Rent payment due after
Landlord's delivery of the aforesaid reconciliation notification), until the
full amount of such excess has been so applied. In the alternative, at
Landlord's sole election, Landlord will pay the full amount of such excess to
Tenant within thirty (30) days after Landlord's delivery of the aforesaid
reconciliation notification. On the other hand, in the event that such
reconciliation shows that the Construction Costs exceed the sum of the
Construction Allowance plus any progress payments theretofore made by Tenant,
then Tenant will pay the full amount of such excess to Landlord within thirty
(30) days after Landlord's delivery of the aforesaid reconciliation
notification.
(d) For purposes of this Lease, the "Construction Costs" will be equal to
the sum of (i) all actual so-called "hard" costs of constructing the Leasehold
Improvements, including, without limitation, (A) all costs of cabling (if any)
performed by or on behalf of Landlord or the Leasehold Improvement General
Contractor, (B) all costs in connection with the installation of the metering or
sub-metering of electrical service under Section 2.9 hereof incurred in
connection with such construction, (C) the cost of all materials, labor,
equipment, hoisting, insurance, taxes and permits (all of which will be
documented and verifiable); (ii) the cost of any Change Orders; (iii) all actual
so-called "soft" costs in connection with the construction of the Leasehold
Improvements, including, without limitation, all architect's, engineer's and
design fees, and all other consulting fees (including, without limitation,
out-of-pocket expenses incurred in connection with the review and approval of
Tenant's plans and drawings for the Leasehold Improvements, up to a maximum of
Two Thousand Five and 00/100ths Dollars ($2,500.00)); (iv) the cost of all
general conditions; and (v) the fee charged by the Leasehold Improvement General
Contractor, which fee will be included in its competitively bid "lump sum" price
(as provided in Section 4.2(e) hereof), which fee will be in lieu of overhead
and profit, any construction management fees, and any other overhead, profit or
other fees to Landlord or the Leasehold Improvement General Contractor. All of
the aforesaid actual costs will also include, without limitation, the aggregate
of all interest costs actually incurred by Landlord arising in connection with
any resultant delays (to the extent that such delays result from acts or
omissions of Tenant or from Change Orders requested by Tenant) and any and all
enforceable payment obligations under those contracts or modifications to
contracts entered into by Landlord or its subcontractors, which are necessary to
effectuate the work or the specific Change Order.
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(e) Landlord will solicit bids from potential Leasehold Improvement General
Contractors for the furnishing of labor or materials for the Leasehold
Improvements, on a "lump sum" basis, in accordance with the following procedure:
(i) A potential bidder's list of at least three (3) approved
pre-qualified bidders will be developed jointly by Landlord and
Tenant, acting reasonably. Such list will be determined based on
each bidder's qualifications, past experience on similar types of
projects, availability to do the work, financial strength,
bondability and previous history of work with Landlord or Tenant.
(ii) Landlord will provide a copy of each bid solicitation to Tenant's
Architect before such bid solicitation is issued. Within forty-eight
(48) hours (excluding Saturdays, Sunday and Holidays (as such term
is defined in Section 5.1 hereof)) after the delivery of such bid
solicitation, Tenant will cause Tenant's Architect to provide any
comments thereon to Landlord, in writing; provided, however, that
Landlord will not be obligated to incorporate any such comments into
the bid solicitation, unless necessary in order to comply with the
provisions of this Section 4.2(e). If Tenant's Architect fails to
provide comment to Landlord within the aforesaid forty-eight (48)-
hour period, then it will be conclusively presumed that Tenant's
Architect has no comments.
(iii) Upon receipt of each of the bids, such bids will be opened and
reviewed by Landlord for, among other things, completeness,
compliance with the bid request, a "dollars versus budget"
comparison, and the ability of the bidder to complete its
commitment.
(iv) After the review of the bids, Landlord will prepare a bid summary
and its recommendation for award, and will present the same to
Tenant's Architect for its approval. Within forty-eight (48) hours
(excluding Saturdays, Sunday and Holidays) after the presentation of
the aforesaid bid summary to Tenant's Architect, Tenant will cause
Tenant's Architect to approve or disapprove such recommendation,
which approval or disapproval rights will not be unreasonably
exercised. If Tenant's Architect fails to approve or disapprove such
recommendation within the aforesaid forty-eight (48)-hour period,
then it will be conclusively presumed that Tenant's Architect has
given its approval thereto. After the general contract has been
awarded to the selected Leasehold Improvement General Contractor,
such Leasehold Improvement General Contractor will prepare and
submit to Tenant, or Tenant's Architect, a schedule of values.
(v) Tenant reserves the right, if justified by good faith reasons, to
select any bid regardless of the cost thereof; provided, however,
that Tenant will remain responsible for all Construction Costs in
excess of the Construction Allowance, as provided in Section 4.2(c)
hereof; and provided further, however, that Landlord will not be
required to accept any bid which is unacceptable to it or to do
business with any contractor to whom Landlord has a reasonable
objection. Tenant will be responsible for any delays necessitated by
rebidding or delays in bid opening required by Tenant.
Section 4.3 Change Orders. With respect to the Leasehold Improvements (but
not the Base Building), Tenant may order changes in the work consisting of
additions or deletions to, or other revisions in, the Final Leasehold
Improvement Plans, so long as the same are reasonably acceptable to Landlord.
Any such
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change in work which has been authorized by a written change order (which will
be executed as hereinafter provided) is herein sometimes referred to as a
"Change Order." Anything in this Lease to the contrary notwithstanding, Landlord
will not be responsible or liable hereunder for any delay in the construction of
the Leasehold Improvements, or any additional costs with respect thereto. To the
extent that such delay or additional costs result from a Change Order, and no
Change Order will be effected if it is not permitted by applicable building and
zoning regulations, as the same are then interpreted and enforced by the
appropriate authorities having jurisdiction thereof.
A Change Order is a written order prepared by or on behalf of Landlord or
its general contractor and signed by Tenant, stating in detail the change in the
work, and, if appropriate, the increase or decrease to the scope of work of the
Leasehold Improvements, and any change in the scheduled date for the substantial
completion thereof or any change in the cost thereof (which cost will be
consistent with the method of determining the Construction Costs hereunder)
resulting from such Change Order.
Section 4.4 Force Majeure. Landlord (a) will proceed diligently with the
construction of the Base Building and the Leasehold Improvements, and (b) will
substantially complete and deliver possession of the Premises to Tenant on or
about June 1, 2000; provided, however, that if delay is caused or contributed to
by act of Tenant, or those acting for or under Tenant, or by labor disputes,
casualties, acts of God or the public enemy, governmental embargo restrictions,
shortages of fuel, labor, or building materials, action or non-action of public
utilities, or of local, state or federal governments affecting the work, or
other causes beyond Landlord's reasonable control (together, "Excused Delays"),
then the time of completion of such construction and delivery of possession will
be extended for the additional time caused thereby. Further, Tenant will be
solely responsible for all costs and expenses resulting from any delay caused or
contributed to by any act or neglect of Tenant, or those acting for or under
Tenant.
Section 4.5 Construction Guaranty; Substantial Completion. Landlord
guarantees the Base Building and the Leasehold Improvements, against defective
workmanship and/or materials for a period of one (1) year from the date of
substantial completion thereof. Landlord agrees, at its solo cost and expense,
to repair or replace any defective item occasioned by poor workmanship and/or
materials during such one (l)-year period. Performance of such one (1)-year
guaranty will be the sole and exclusive obligation of Landlord with respect to
defective workmanship and/or materials, and Tenant's rights to enforce such one
(1)-year guaranty will be Tenant's sole and exclusive remedy with respect to
such defective workmanship and/or materials in limitation of any contract,
warranty or other rights, whether express or implied, that Tenant may otherwise
have under applicable law. From and after the expiration of the aforesaid one
(l)-year guaranty of Landlord against defective workmanship and materials,
Landlord agrees to cooperate with Tenant in the enforcement by Tenant, at
Tenant's sole cost and expense, of any express warranties or guaranties of
workmanship or materials given by subcontractors or materialmen that guarantee
or warrant against defective workmanship or materials for a period of time in
excess of the one-year period described above, and to cooperate with Tenant in
the enforcement by Tenant, at Tenant's sole cost and expense, of any service
contracts that provide service, repair or maintenance to any item incorporated
in the Premises for a period of time in excess of such one (l)-year period.
For purposes of this Lease, the Leasehold Improvements will be considered
"substantially completed and ready for occupancy" (or "substantially completed,"
"ready for occupancy" or other similar use of a phrase including the words
"substantially completed" or "ready for occupancy" or a form of either or both)
at such time as (a) the Leasehold Improvements will have been substantially
completed in substantial accordance with the Final Leasehold Improvement Plans
(including, without limitation, the substantial completion of restrooms and
hallways on the fourth Floor in substantial accordance with the Base Building
plans therefor), and (b) the municipality having jurisdiction thereof issues a
certificate of occupancy permitting Tenant to occupy the Premises, or takes such
other action as may be customary to permit occupancy or use thereof, provided,
however, that neither the aforesaid substantial completion, nor the issuance of
a certificate of
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occupancy or such other action as may be customary to permit occupancy or use
thereof, will be a condition to the achievement of "substantial completion and
ready for occupancy," or will be a condition to payment of. Rent or commencement
of the Term, if any delay or failure to achieve the aforesaid substantial
completion or to secure such certificate or action is caused by the act or
neglect of Tenant or its contractors, agents or employees. In the event that any
such act or neglect causes a delay or failure of the aforesaid substantial
completion or the issuance of any such certificate or the taking of any other
such action, such substantial completion will be considered to have been
achieved, and such certificate or action will be considered to have bean issued
or taken, on the date on which it would have been issued or taken in fact, but
for such act or neglect.
Within ten (10) days after the substantial completion of the Leasehold
improvements, Tenant's Architect will prepare and submit to Landlord a proposed
"punch list" of items yet to be completed. Based upon such proposed punch list,
Landlord and Tenant, acting in good faith, will agree on the final punch list
items. Landlord will use its reasonable commercial efforts to complete all such
punch list items, without materially adversely affecting Tenant's conduct of its
business in the Office Space, as soon as practicable thereafter, subject to
Excused Delays.
Section 4.6 Repair and Maintenance. Except as expressly provided in this
Lease (including, without limitation, the one (l)-year guaranty against
defective items occasioned by poor workmanship and/or materials under Section
4.5 hereof and the obligation to complete incomplete items under Section 4.8
hereof), Tenant, from and after the Lease Commencement Date, will have and hold
the Premises as the same will then be, without any liability or obligation on
the part of Landlord for making any alterations, improvements or repairs of any
kind in or about the Premises for the Term. Tenant will maintain The Premises
and all parts thereof in a good and sufficient state of repair as required by
the provisions of this Lease.
Section 4.7 Delayed or Earlier Possession; Pre-Lease Commencement Date
Access.
(a) If Landlord will be unable to give possession of the Premises, or any
portion thereof, on the date specified therefor herein because the construction
of the Building or the completion of the Premises has not been sufficiently
completed to make the Premises ready for occupancy, or for any other reason,
Landlord will not be subject to any claims, damages or liabilities for the
failure to give possession on such date. Under such circumstances, except as
provided in Section 4.5 hereof, the Rent reserved and the covenants to pay the
same will not commence until possession of the Premises is given or the Premises
are ready for occupancy, whichever is earlier. Failure to give possession on the
date specified therefor herein will in no way affect the validity of this Lease
or the obligations of Tenant hereunder, but the expiration date of the Term will
be extended by the number of days after June 1, 2000, that possession by Tenant
is so delayed. If Tenant is given and accepts possession of the Premises on a
date earlier than the date above specified for commencement of the Term, then
the Rent reserved herein and all covenants, agreements and obligations herein
and the Term will commence on the date that possession of the Premises is given
to Tenant, and the expiration date will remain as originally anticipated (i.e.,
will not be moved to an earlier date).
Promptly following Landlord's request, the parties will execute and deliver
to one another a written declaration confirming the actual Lease Commencement
Date and the actual date for the expiration of the Term. Such declaration will
be in a form reasonably designated by Landlord.
(b) It is anticipated that the Office Space will be substantially completed
and ready for occupancy in accordance with the terms, provisions and conditions
of this Lease by June 1, 2000, or such later date as may be required in the
event of one or more Excused Delays ("Scheduled Commencement Date"). In the
event that the Office Space is not substantially completed and ready for
occupancy by the date which is thirty (30) days after the Scheduled Commencement
Date, or such later date as may be required in the event of
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one or more Excused Delays ("Delayed Scheduled Commencement Date"), then all
Base Rent hereunder will abate for one (1) day for each day from the Delayed
Scheduled Commencement Date to the actual Lease Commencement Date (i.e., the
date on which the Office Space is substantially completed and ready for
occupancy hereunder). Anything in this Lease to the contrary notwithstanding,
except as expressly provided in this Section 4.7(b), Landlord will not be liable
for any direct, indirect, special or consequential damages resulting from any
delay in the scheduled Lease Commencement Date.
(c) Subject to this Section 4.7(c), beginning on or about the date which is
one (1) week prior to the date on which Landlord anticipates that the Leasehold
Improvements will be substantially completed (the exact date to be specified in
a written notice from Landlord to Tenant not less than five (5) days prior to
such specified date and subject to Excused Delays), Tenant will be allowed
access to the Office Space (provided that such access is permitted by all
applicable governmental authorities having jurisdiction) to install its
demountable workstations and office partitions, and telephone and computer
wiring systems (with loose furniture, file cabinets and the like not to be
delivered or installed until after the Lease Commencement Date). The access to
the Office Space to be afforded to Tenant pursuant to this Section 4.7(c) is
hereinafter referred to as "Pre-Lease Commencement Date Access." Anything in
this Section 4.7(c) to the contrary notwithstanding in connection with the
Pre-Lease Commencement Date Access, (i) Tenant will not interfere with the
completion of construction of the Building, the Leasehold Improvements or any
other tenant or other improvements in the Building or the Office Complex, or
occasion any labor dispute as a result of such installations; and (ii) Tenant
does hereby agree to assume all risk of loss or damage to its furniture, systems
and equipment, and to any and all other personal property of Tenant or its
contractors, subcontractors, agents and employees, and to indemnify, defend and
hold harmless Landlord, and its officers, directors, shareholders, employees,
contractors and agents, from any loss or damage to such furniture, systems,
equipment, and other personal property, and all liability, loss or damage
arising from any injury to the property of Landlord, or its contractors,
subcontractors or materialmen, and any death or personal injury to any person or
persons to the extent arising out of such installations, except for liability,
loss or damage caused by Landlord's gross negligence or willful misconduct
Landlord may, at any time, suspend Tenant's rights to the Pre-Lease Commencement
Date Access in the event that Landlord determines that such access or any work
being performed by or for Tenant is unreasonably interfering with the
construction of the Building, the Leasehold Improvements or any other tenant or
other improvements in the Building or the Office Complex, is creating security
or safety risks, or is otherwise not in conformance with the conditions of this
Section 4.7. Beginning on the date on which Tenant commences any activities
under its right to Pre-Lease Commencement Date Access, and continuing through
the day before the Lease Commencement Date, Tenant will contribute to the
payment of the utility charges at the Premises, if such charges are higher than
would customarily be the case for contractors performing the construction of the
Building or the Leasehold Improvements, or otherwise would have been the case,
in the absence of such work by or for Tenant. The parties will cooperate to
arrive at an equitable allocation of any such charges. Such allocation will be
generally designed to result in Tenant's paying that portion of such utility
charges attributable to Tenant's activities at the Premises.
(d) Landlord has informed Tenant of the probability, if Tenant, or any of
its contractors, subcontractors, sub-subcontractors, employees or agents, should
use or employ non-union labor in connection with any work performed pursuant to
this Lease (including, without limitation, this Section 4.7 and Section 8.1
hereof), that such use may occasion labor disputes, work stoppages or other
delays or difficulties in Landlord's construction of the Building and the
Leasehold Improvements, Landlord's management of the Office Complex, or the
fulfillment of other obligations of Landlord under this Lease and under other
leases with respect to the Office Complex. Accordingly, and anything in this
Lease to the contrary, notwithstanding, (i) neither Tenant, nor any of its
contractors, subcontractors, sub-subcontractors, employees or agents, will use
or employ non-union labor; (ii) Landlord will not be liable or responsible for
any delays in the performance of the construction of the Building or the
Leasehold Improvements, or in any other obligations of Landlord hereunder, which
may result from any such use or employment of non-union labor; and (iii) Tenant
will
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indemnify, defend and hold harmless Landlord, and its officers, directors,
shareholders, employees and agents, from and against any and all losses, costs,
claims and other damages arising out of or in connection with the use or
employment of non-union labor, including, without limitation, costs relating to
delays in Landlord's prosecution of its work at the Office Complex (whether for
Tenant or for other tenants of the Office Complex) and reasonable attorneys'
fees and costs.
(e) Anything in this Section 4.7 to the contrary notwithstanding, Tenant
will not commence the conduct of any business from the Premises until the Lease
Commencement Date.
(f) As set forth in this Article 4, in order for Landlord to achieve
various scheduled delivery dates (e.g., the scheduled Lease Commencement Date,
the scheduled date for the delivery of Pre-Lease Commencement Date Access, and
the like), Tenant will be required to provide certain definitive information,
documentation or other materials on certain specific dates (e.g., the delivery
of the Final Leasehold Improvement Plans on the date set forth in Section 4.1(b)
hereof). In order to facilitate various scheduling activities in connection with
the construction of the Leasehold improvements, certain scheduled delivery and
other so-called milestone dates with respect to activities required in
connection with the construction of the Leasehold Improvements (together,
"Milestone Dates") are set forth on Exhibit D attached hereto and made a part
hereof. However, anything in this Section 4.7(f), in Exhibit D or elsewhere in
this Lease to the contrary notwithstanding, (i) those Milestone Dates which are
set forth in Exhibit D, but which are not otherwise specifically set forth or
addressed in this Lease, are estimated dates only, and neither Landlord nor
Tenant will be bound with respect thereto; and (ii) with respect to such
Milestone Dates which are set forth in Exhibit D and which are also specifically
set forth or addressed in this Lease, in the event of any conflict or ambiguity
between the terms and conditions of this Lease and the terms and conditions of
Exhibit D with respect thereto, the terms and conditions of this Lease will
govern and control. For all purposes under this Lease, any failure or delay of
Tenant, or those acting for or under Tenant, to satisfy any of the Milestone
Dates which are specifically set forth or addressed in this Lease (e.g., the
date by which Tenant is to have delivered Final Leasehold Improvement Plans)
will be an act or neglect of Tenant, regardless of whether such failure or delay
preceded the date of the execution of this Lease. Landlord's execution of this
Lease notwithstanding any such pre-existing failure or delay will not be
considered to be an acquiescence therein or waiver thereof by Landlord.
Section 4.8 Effect of Possession. If and to the extent applicable hereunder
and subject to Section 4.5 hereof, the acceptance of possession by Tenant will
be deemed conclusively to establish that the Premises, and all other
improvements of the Office Complex required to be constructed by Landlord for
use thereof by Tenant hereunder, have been completed at such time to Tenant's
satisfaction and in conformity with the provisions of this Lease in all
respects. Tenant acknowledges that, except as provided in Section 4.5 hereof,
neither Landlord nor any agent of Landlord has made any representation or
warranty with respect to the Premises or the Office Complex, or any portion
thereof, or with respect to the suitability or fitness thereof for the conduct
of Tenant's business, or for any other purpose.
Section 4.9 Use. The Premises will be used for general office purposes, and
for carrying on such activities as may be incidental thereto; provided, however,
Tenant may not use or occupy the Premises, or permit the Premises to be used or
occupied, contrary to any statute, rule, order, ordinance, requirement or
regulation applicable thereto, or in any manner which would violate any
certificate of occupancy or permit affecting the same, or which would cause
structural injury to the Building or the Premises, or any portion thereof, or
cause the value or usefulness of the Building or the Premises, or any portion
thereof, substantially to diminish (reasonable wear and tear excepted) or which
would constitute a private or public nuisance or waste. Among other things,
Tenant will not permit its employees, licensees or invitees to exceed the
Parking Capacity of the Parking Garage or the Parking Area (if any), based on
the RSF of the Office Space. Tenant agrees that it will promptly, upon discovery
of any such use, take all necessary steps to compel the discontinuance of such
use.
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Section 4.10 Compliance with Environmental Laws. Tenant will not (either
with or without negligence) cause or permit the escape, disposal or release of
any biologically or chemically active or other hazardous substances or materials
in, on or around the Premises or the Office Complex, or any portion thereof or
in the vicinity thereof. Tenant will not allow the storage or use of such
substances or materials in any manner not sanctioned by law and by the highest
standards prevailing in the industry for the storage and use of such substances
or materials, nor allow to be brought into the Office Complex any such materials
or substances, except such substances or materials as are customarily used in a
general office, and then only after written notice is given to Landlord of the
identity of such substances or materials (but still subject to applicable law
and the aforesaid standards). Without limitation, hazardous substances and
material will include those described in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section
9601 et seq., the Resource Conservation and Recovery Act, as amended, 42 U.S.C.
Section 6901 et seq., the Illinois Environmental Protection Act, as amended, 415
ILCS 5/11 to 5/33 et seq., and any other applicable federal, state or local laws
and the regulations adopted under these acts. If any lender or governmental
agency will ever require testing to ascertain whether there has been any release
of hazardous materials, then the reasonable costs thereof will be reimbursed by
Tenant to Landlord upon demand as additional charges if such requirement applies
to the Premises or relates to activities conducted on the Premises or to
Tenant's possession of the Premises. In addition, Tenant will execute
affidavits, representations and the like from time to time at Landlord's request
concerning Tenant's best knowledge and belief regarding the presence of
hazardous substances or materials on the Premises or the Office Complex. In all
events, Tenant will indemnify Landlord in the manner elsewhere provided in this
Lease from any release of hazardous materials on the Premises occurring while
Tenant is in possession, or elsewhere if caused by Tenant or persons acting
under Tenant. The aforesaid covenants will survive the expiration or earlier
termination of the Term.
Section 4.11 Landlord's Environmental Covenants. Landlord hereby covenants
that, to Landlord's actual knowledge, Landlord will not incorporate into the
Leasehold Improvements, or otherwise generate, store or release on, in, above or
below the Property, the Office Complex, the Building, the Premises, or any
portion thereof, any asbestos or other hazardous substances or materials (as
such term is defined in Section 4.10 hereof), except in accordance with
applicable law. For purposes of this Section 4.11, Landlord's actual knowledge
will mean the actual knowledge, without further investigation, of the Vice
President and General Manager of Real Estate of Opus North Corporation, or the
Senior Real Estate Director, Office, of Opus North Corporation.
ARTICLE 5
SERVICES
Section 5.1 Services Provided by Landlord. Subject to the provisions of
Article 2 hereof, Landlord will provide the following services, in a manner
consistent with those provided in other first-class office facilities in the
so-called "East-West Corridor" in DuPage County, Illinois, on all days excepting
Saturdays, Sundays and those holidays set forth on Exhibit E attached hereto and
made a part hereof ("Holidays"), and as otherwise stated (the cost of which
services, except as otherwise provided herein, will be included among the
Operating Expenses):
(a) Nightly janitorial services Monday through Friday in and about the
Premises and the common areas of the Building, all as generally
described on Exhibit F attached hereto and made a part hereof.
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(b) All electric lighting bulbs and tubes and all ballasts and starters
within the Premises will be replaced by Landlord at the reasonable
expense of Tenant and will be paid by Tenant upon receipt of invoice
from Landlord as Rent.
(c) Heat, ventilating and air conditioning from 7:00 a.m. to 7:00 p.m.,
Monday through Friday (other than Holidays), and from 8:00 a.m. to
1:00 p.m. on Saturdays (other than Holidays), subject to matters
beyond Landlord's reasonable control. During other hours, Landlord
will provide such additional amounts of heating, ventilating and air
conditioning upon a reasonable advance notice from Tenant to Landlord,
which advance notice will not be later than 3:00 p.m. on the day on
which such additional service is requested (or 3:00 p.m. on the
business day before a Saturday, Sunday or Holiday). Tenant, upon
presentation of a bill therefor, will pay Landlord for such service on
an hourly basis at such prevailing rates as reasonably established by
Landlord from time to time. If such extended service is not a
continuation of that furnished during regular business hours as
described above, Tenant will pay for a minimum of three (3) hours of
such service.
(d) Hot and cold water from the regular building outlets for lavatory and
drinking purposes.
(e) Passenger elevator service in common with other tenants to be provided
by five (5) automatic elevators, one of which is a "swing" elevator
for use also as a freight elevator. Landlord will have the right to
restrict the use of elevators for freight purposes to the "swing"
freight elevator and to hours to be determined by Landlord. Landlord
will have the right to limit the number of elevators to be in
operation on Saturdays, Sundays and Holidays.
(f) Maintenance in good order, condition and repair of the Parking Garage
and the Parking Area (if any), and all driveways leading thereto and
keeping the same free from any unreasonable accumulation of snow.
Landlord will keep and maintain the landscaped area, the Parking
Garage and the Parking Area (if any) in a neat, orderly and reasonably
well-lit condition. The Executive Parking Area of the Parking Garage
will include a controlled access system. Landlord reserves the right
to designate areas of the Parking Garage and the Parking Area (if any)
where Tenant, and its agents, employees, licensees and invitees, will
park, and may exclude Tenant, and its agents, employees, licensees and
invitees, from parking in other areas as designated by Landlord;
provided, however, that Landlord will not be liable to Tenant for the
failure of any tenant, or its employees, agents, licensees and
invitees, to abide by Landlord's designations or restrictions. Tenant,
and its employees, agents, licensees and invitees, will not be
permitted to use more spaces in the Parking Garage or the Parking Area
(if any) than those attributable to the Premises pursuant to the
Parking Capacity, and the use of all parking spaces in the Parking
Garage and the Parking Area (if any) will be subject to such
reasonable rules and regulations as Landlord may from time to time
institute. Further, Landlord may reserve parking spaces in the Parking
Area in a location from time to time designated by Landlord, for the
exclusive use of visitors to the Building and other tenants in the
Building (and their respective employees, licensees and invitees).
Landlord will also maintain in good, clean order, condition and
repair, and will perform and make all reasonably necessary
maintenance, repairs and replacements to, all of
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the structural components of the Building, and the common areas and
common building systems of the Building.
(g) Subject to the Building Rules and Regulations to which reference is
made in Section 16.19 hereof and other reasonable security
restrictions, and except for matters beyond Landlord's reasonable
control, access to the Building, the Parking Garage, the Parking Area
(if any) and the Premises on a 24 hours per day, 7 days per week and
365 days per year basis.
(h) The Deli for the use of, among others, Tenant's employees and
invitees.
(i) The Fitness Center for the use of, among others, Tenant's employees.
There will be no on-site director or other staff for the Fitness
Center, and the use thereof will be on a first come, first serve
basis, depending on the availability of equipment and other facilities
therein. There will be no separate charge for the use of the Fitness
Center.
(j) Security on a 24 hours per day, 7 days per week and 365 days per year
basis; provided, however, that Landlord will not be liable for any
lack of security in respect to the Office Complex whatsoever.
(k) Fiber optics to the Building's "NET POP" and available for Tenant's
distribution (at its sole cost and expense) to the Premises.
Section 5.2 Tenant's Utility Services. Tenant will be solely responsible
for the direct payment of all utilities which are separately metered or
separately charged (electric, natural gas, telephone, cable television and any
other special utility requirements of Tenant), if any, to the Premises or to
Tenant, and will make such payments to the respective utility companies prior to
delinquency. Such amounts will not be included as Operating Expenses.
Section 5.3 Other Provisions Relating to Services. No interruption in, or
temporary stoppage of, any of the aforesaid services caused by repairs,
renewals, improvements, alterations, strikes, lockouts, labor controversy,
accidents, inability to obtain fuel or supplies, or other causes will be deemed
an eviction or disturbance of Tenant's use and possession, or render Landlord
liable for damages, by abatement of rent or otherwise, or relieve Tenant from
any obligation herein set forth; provided, however, that in the event of any
interruption in, or temporary stoppage of, utility services to the Premises,
which interruption or stoppage is within the reasonable control of Landlord and
which also continues for ten (10) consecutive business days, then all Base Rent,
Operating Expenses and Real Estate Taxes, with respect to that portion of the
Office Space which is rendered untenantable as a result of such interruption or
stoppage, will thereafter abate until such services are re-instituted or the
interruption or stoppage is no longer within Landlord's reasonable control. In
no event will Landlord be required to provide any heat, ventilating, air
conditioning, electricity or other service in excess of that permitted by
voluntary or involuntary guidelines or laws, ordinances or regulations of
governmental authority. Landlord reserves the right, from time to time, to make
reasonable and non-discriminatory modifications to the aforesaid standards for
utilities and services.
Section 5.4 Effects on Utilities. Tenant will not, without the prior
written consent of Landlord, use any apparatus or device in or about the
Premises which will cause any substantial noise or vibration or which will
increase the amount of electricity or water, if any, usually furnished or
supplied for use of the Premises as general office space. Tenant will not
connect with electric current or water pipes, except through existing electrical
or water outlets already in the Premises, any apparatus or device for the
purposes of using electric current or water.
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ARTICLE 6
INSURANCE
Section 6.1 Landlord's Casualty Insurance Obligations. Landlord will keep
the Office Complex insured for the benefit of Landlord in an amount equivalent
to the full replacement value thereof (excluding foundation, excluding and
excavation costs) against:
(a) loss or damage by fire; and
(b) such other risk or risks of a similar or dissimilar nature as are now
or may be customarily covered with respect to buildings and
improvements similar in construction, general location, use, occupancy
and design to the Office Complex, including, but without limiting the
generality, of the foregoing, windstorms, hail, explosion, vandalism,
malicious mischief, civil commotion, and such other coverage as may be
deemed necessary by Landlord, providing such additional coverage is
obtainable and providing such additional coverage is such as is
customarily carried with respect to buildings and improvements similar
in construction, general location, use, occupancy and design to the
Office Complex.
These insurance provisions will in no way limit or modify any of the obligations
of Tenant under any provision of this Lease. Landlord agrees that such policy or
policies of insurance will permit releases of liability as provided herein
and/or waiver of subrogation clause as to Tenant, and Landlord waives, releases
and discharges Tenant from all claims or demands whatsoever which Landlord may
have or acquire arising out of damage to or destruction of the Office Complex or
loss of use thereof occasioned by fire or other casualty, which claim or demand
may arise because of the negligence or fault of Tenant, its agents, employees,
customers or business invitees, or otherwise, and Landlord agrees to look to the
insurance coverage only in the event of such loss. Notwithstanding the
foregoing, Tenant will be obligated to pay the rental called for hereunder in
the event of damage to or destruction of the Premises or the Office Complex if
such damage or destruction is occasioned by the negligence or fault of Tenant,
its agents or employees. Insurance premiums paid for insurance coverage required
under this Article 6 by Landlord will be a portion of the "Operating Expenses"
described in Article 2 hereof.
Section 6.2 Tenant's Casualty Insurance Obligations. Tenant will keep all
of its machinery, equipment, furniture, fixtures and personal property
(including also property under the care, custody, or control of Tenant) which
may be located in, upon, or about the Premises insured for the benefit of Tenant
in an amount equivalent to the full insurable replacement value thereof against:
(a) loss or damage by fire; and
(b) such other risk or risks of a similar or dissimilar nature as are now,
or may in the future be customarily covered with respect to a tenant's
machinery, equipment, furniture, fixtures, personal property and
business located in a building similar in construction, general
location, use, occupancy and design to the Office Complex, including,
but without limiting the generality of the foregoing, windstorms,
hail, explosions, vandalism, theft, malicious mischief, civil
commotion, and such other coverage as Tenant may deem appropriate or
necessary.
Tenant agrees that such policy or policies of insurance will permit release of
liability as provided herein and/or waiver of subrogation clause as to Landlord,
and Tenant waives, releases and discharges Landlord, and its agents,
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employees and contractors, from all claims or demands whatsoever which Tenant
may have or acquire arising out of damage to or destruction of the machinery,
equipment, furniture, fixtures, personal property, and loss of use thereof
occasioned by fire or other casualty, whether such claim or demand may arise
because of the negligence or fault of Landlord, or its agents, employees or
contractors, or otherwise, and Tenant agrees to look to the insurance coverage
only in the event of such loss.
Section 6.3 Landlord's Liability Insurance Obligations. Landlord will, as a
portion of the Operating Expenses, maintain, if and to the extent that Landlord
reasonably deems appropriate, for its benefit and the benefit of its mortgagee
and management agent, (a) commercial general liability insurance against claims
for personal injury, death or property damage occurring upon, in or about the
Office Complex, (b) broad form comprehensive boiler and machinery insurance,
including, without limitation, business interruption, extra expense and
refrigeration coverage, endorsed with joint loss agreement, (c) all-risk
property insurance on a replacement cost basis covering the Building and the
Office Complex, including loss of rents, business interruption, extra expense
coverage and building ordinance coverage and joint loss agreements endorsements,
(d) umbrella liability coverage in excess of the underlying limits of the
insurance set for in clause (a) above, (e) worker's compensation and employee
liability insurance covering all employees of Landlord performing work in, on or
with respect to the Office Complex, and (f) comprehensive automobile liability
coverage, also covering hired and non-owned automobiles.
Section 6.4 Tenant's Liability Insurance Obligations. Tenant will, at
Tenant's sole cost and expense but for the mutual benefit of Landlord, its
managing agent and Tenant, maintain general public liability insurance against
claims for personal injury, death or property damage occurring upon, in or about
the Premises, such insurance to afford protection to Landlord, its managing
agent and Tenant to the limit of not less than Three Million and 00/100ths
Dollars ($3,000,000.00) in respect to the injury or death to a single person,
and to the limit of not less than Three Million and 00/100ths Dollars
($3,000,000.00) in respect to any one accident, and to the limit of not less
than Five Hundred Thousand and 00/100ths Dollars ($500,000.00) in respect to any
property damage. Such policies of insurance will be written in companies
reasonably satisfactory to Landlord, naming Landlord and its managing agent as
additional insureds thereunder, and such policies, or a memorandum or
certificate of such insurance, will be delivered to Landlord endorsed "Premium
Paid" by the company or agency issuing the same or accompanied by other evidence
satisfactory to Landlord that the premium thereon has been paid. At such time as
insurance limits required of tenants in office buildings in the area in which
the Office Complex is located are generally increased to greater amounts,
Landlord will have the right to require such greater limits as may then be
customary. Tenant agrees to include in such policy the contractual liability
coverage insuring Tenant's indemnification obligations provided for herein. Any
such coverage will be deemed primary to any liability coverage secured by
Landlord. Such insurance will also afford coverage for all claims based upon
acts, omissions, injury or damage, which claims occurred or arose (or the onset
of which occurred or arose) in whole or in part during the policy period.
Section 6.5 Tenant's Indemnification of Landlord. Tenant agrees to
indemnify, protect, defend and hold Landlord and Landlord's shareholders,
employees, lender and managing agent harmless from and against any and all
claims, costs, liabilities, actions, and damages, including, without limitation,
attorneys' fees and costs on behalf of any person or persons, firm or firms,
corporation or corporations, arising from any breach or default on the part of
Tenant in the performance of any covenant or agreement on the part of Tenant to
be performed, pursuant to the terms of this Lease, or arising from any act or
negligence on the part of Tenant, or its agents, contractors, employees,
invitees or licensees, or arising from any accident, injury or damage to the
extent caused by Tenant, or its agents, contractors, employees, invitees or
licensees, to any person, firm or corporation occurring during the Term or any
renewal thereof, in or about the Premises or Office Complex. In case any action
or proceeding be brought against Landlord, or its directors, officers,
shareholders, employees, contractors, agents, lenders or managing agents, by
reason of any such claim, Tenant, upon notice from Landlord, covenants to resist
or defend such action or proceeding by counsel reasonably satisfactory to
Landlord.
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Section 6.6 Tenant's Waiver. Tenant agrees, to the extent not expressly
prohibited by law, that Landlord, its agents, employees and servants will not be
liable, and Tenant waives all claims for damage to property, and business
sustained during the Term by Tenant occurring in or about the Office Complex,
resulting directly or indirectly from any existing or future condition, defect,
matter or thing in the Premises, the Office Complex, or any part thereof, or
from equipment or appurtenances becoming out of repair or from accident, or from
any occurrence or act or omission of Landlord, its agents, employees or
servants, or any tenant or occupant of the Building or any other person. This
Section 6.6 will apply especially but not exclusively, to damage caused by
aforesaid or by the flooding of basements or other subsurface areas, or by
refrigerators, sprinkling devices, air conditioning apparatus, water, snow,
frost, steam, excessive heat or cold, falling plaster, broken glass, sewage,
gas, odors or noise, or the bursting or leaking of pipes or plumbing fixtures,
and will apply equally, whether any such damage results from the act or omission
of other tenants or occupants in the Office Complex or any other persons, and
whether such damage be caused by or result from any of the aforesaid, or will be
caused by or result from other circumstances of a similar or dissimilar nature.
Section 6.7 Landlord's Deductible and Tenant's Property. Provisions herein
to the contrary notwithstanding, in the event any damage to the Office Complex
results from any act or omission of Tenant, its agents, employees or invitees,
and all or any portion of Landlord's loss is "deductible," Tenant will pay to
Landlord the amount of such deductible loss (not to exceed $10,000 per event,
except in the case of earthquake or flood, in which case such deductible loss
will not exceed $50,000 per event).
Section 6.8 Tenant's Property. All property in the Office Complex or on the
Premises belonging to Tenant, its agents, employees, invitees or otherwise
located at the Premises, will be at the risk of Tenant only. Landlord will not
be liable for damage thereto or theft, misappropriation or loss thereof, and
Tenant agrees to defend and hold Landlord, its agents, employees and servants
harmless and indemnify them against claims and liability for injuries to such
property.
Section 6.9 Increase in Insurance. Tenant will not do or permit anything to
be done in or about the Premises nor bring or keep anything therein which will
in any way increase the existing rate of or affect in any other way any fire or
other insurance upon the Office Complex or any of its contents, or cause a
cancellation of any insurance policy covering the Office Complex or any of its
contents. Notwithstanding anything to the contrary contained herein, Tenant will
promptly, upon demand, reimburse Landlord for the full amount of any additional
premium charged for such policy by reason of Tenant's failure to comply with the
provisions of this Article 6, it being understood that such demand for
reimbursement will not be Landlord's exclusive remedy.
Section 6.10 Tenant's Failure to Insure. In the event Tenant fails to
provide Landlord with evidence of insurance required under this Article 6,
Landlord may, but will not be obligated to, without further demand upon Tenant,
and without waiving or releasing Tenant from any obligation contained in this
Lease, effect such insurance and Tenant agrees to repay, upon demand, all such
sums incurred by Landlord in effecting such insurance. All such sums will become
a part of the Additional Rent payable hereunder, but no such payment by Landlord
will relieve Tenant from any default under this Lease.
ARTICLE 7
CERTAIN RIGHTS RESERVED BY LANDLORD
Section 7.1 Rights Reserved by Landlord. Landlord reserves the following
rights exercisable without notice and without liability to Tenant and without
effecting an eviction, constructive or actual, or disturbance of Tenant's use or
possession, or giving rise to any claim for set off or abatement of rent:
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(a) To control, install, affix and maintain any and all signs on the
Property, or on the exterior of the Office Complex and in the
corridors, entrances and other common areas thereof, except those
signs within the Premises not visible from outside the Premises.
(b) To reasonably designate, limit, restrict and control any service in or
to the Office Complex, including, whom limitation, the designation of
sources from which Tenant may obtain sign painting and lettering.
(c) To retain at all times and to use in appropriate instances keys to all
doors within and into the Premises. No locks will be changed without
the prior written consent of Landlord.
(d) To make repairs, alterations, additions, or improvements, whether
structural or otherwise, in and about the Office Complex, or any part
thereof, and for such purposes to enter upon the Premises, and during
the continuation of any of such work, to temporarily close doors,
entryways, public spaces, and corridors in the Office Complex and to
interrupt or temporarily suspend services and facilities.
(e) To require that any vending or dispensing machines of any kind in or
about the Premises be solely for the use of Tenant's employees and
invitees, and be placed so as not to be visible from the exterior of
the Office Space.
(f) To approve the weight, size and location of safes and other heavy
equipment and articles in and about the Premises and the Office
Complex and to require all such items to be moved into and out of the
Office Complex and the Premises only at such times and in such manner
as Landlord will direct in writing.
(g) To grant to anyone the exclusive right to conduct any particular
business or undertaking in the Office Complex other than general
office use, including, without limitation, banks, savings and loan
associations, restaurants, cafeterias, candy and/or tobacco shops, and
other stores selling retail products.
Section 7.2 Emergency Entry. Landlord and its agents may enter the Premises
at any time in case of emergency and will have the right to use any and all
means which Landlord may deem proper to open such doors during an emergency in
order to obtain entry to the Premises. Any entry to the Premises obtained by
Landlord in the event of an emergency will not, under any circumstances, be
construed or deemed to be a forcible or unlawful entry into, or detainer of, the
Premises, or to be an eviction of Tenant from the Premises or any portion
thereof.
Section 7.3 Exhibition of Premises. Tenant will permit Landlord and its
agents, upon reasonable notice, to enter and pass through the Premises or any
part thereof at reasonable times during normal business hours to (a) exhibit the
Premises to holders of encumbrances on the interest of Landlord under the Lease
and to prospective purchasers, mortgagees or lessees of the Office Complex; and
(b) during the period of twelve (12) months prior to the expiration of the Term,
exhibit the Premises to prospective lessees thereof. If during the last month of
the Term, Tenant will have removed substantially all of Tenant's property and
personnel from the Premises, Landlord may enter the Premises and repair, alter,
and redecorate the same, without abatement of Rent and without liability to
Tenant; and such acts will have no effect on this Lease.
Section 7.4 Right of Landlord to Perform. All covenants and agreements to
be performed by Tenant under any of the terms of this Lease will be performed by
Tenant at Tenant's sole cost and expense and
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without any abatement of Rent. If Tenant will fail to pay any sum of money
(other than Rent due Landlord) required to be paid by it hereunder or will fail
to perform any other act on its part to be performed hereunder, including,
without limitation, the failure to commence and complete repairs promptly and
adequately, and the failure to remove any liens or otherwise to perform any act
or fulfill any obligation required of Tenant under this Lease, Landlord may, but
will not be obligated to do so, and without waiving or releasing Tenant from any
obligations of Tenant, make any such payment or perform any such act on Tenant's
part to be made or performed as in this Lease provided. All sums so paid by
Landlord and all necessary incidental costs, together with an administrative
charge in the amount of fifteen percent (15%) of any such sums and costs
incurred by