Illinois-Chicago-680 North Lake Shore Drive Lease [Amendment No. 4] - American National Bank and Trust Co. of Chicago and Playboy Enterprises Inc.
FOURTH AMENDMENT TO LEASE
-------------------------
THIS FOURTH AMENDMENT TO LEASE (this "Amendment") entered into in Chicago,
Illinois, as of the 6th day of August, 1996, by and between AMERICAN NATIONAL
BANK AND TRUST COMPANY OF CHICAGO, not personally, but solely as Trustee under a
Trust Agreement dated May 2, 1989, and known as Trust No. 108237-06 ("Lessor"),
and PLAYBOY ENTERPRISES, INC., a Delaware corporation ("Lessee").
WITNESSETH:
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A. LaSalle National Bank, not personally, but solely as Trustee under a
Trust Agreement dated December 21, 1987, and known as Trust No. 112912
("LaSalle"), and Lessee have heretofore entered into that certain Office Lease
dated as of April 7, 1988 (the "Original Lease"), whereby LaSalle leased to
Lessee certain premises (the "Original Premises") known as Suites 1500 and 1600,
consisting of 95,523.05 rentable square feet and comprising the entire 15th and
16th floors of the "Office Area" (as defined in the Original Lease) of that
certain building (the "Building") located at 680 North Lake Shore Drive,
Chicago, Illinois, for a lease term expiring on August 31, 2004.
B. LaSalle has heretofore assigned its interest under the Lease to
Lessor's predecessor in interest.
C. Lessor and Lessee have heretofore entered into that certain Amendment
to Lease dated as of October 26, 1989 (the "First Amendment"), which amended
certain provisions of the Original Lease, including the leasing to Lessee of
certain additional space in the basement of the Building (the "Additional
Premises; the Original Premises and the Additional Premises are collectively
referred to herein as the "Premises").
D. Lessor and Lessee have heretofore entered into that certain Second
Amendment to Lease dated as of June 1, 1992 (the "Second Amendment"), which
clarified certain provisions of the Lease relating to Taxes and Expenses payable
by Lessee.
E. Lessor and Lessee have heretofore entered into that certain Third
Amendment to Lease ("Third Amendment") dated as of August 30, 1993, which
granted to Lessee certain additional expansion rights in the Building and
amended certain other provisions contained in the Original Lease. The Original
Lease, the First Amendment, the Second Amendment and the Third Amendment are
collectively referred to herein as the "Lease".
F. Lessor and Lessee now desire to amend the Lease to grant to Lessee
certain additional expansion rights in the Building and amend certain other
provisions contained in the Lease, all upon the terms and provisions hereinafter
set forth.
<PAGE>
NOW, THEREFORE, for good and valuable consideration, the receipt and
legal sufficiency of which are hereby acknowledged, Lessor and Lessee hereby
agree as follows:
1. Definitions. Each capitalized term used in this Amendment shall have
the same meaning as is ascribed to such capitalized term in the Lease, unless
otherwise provided for herein.
2. Extension of Term. The Term of the Lease is hereby extended to and
including August 31, 2007 (the "Expiration Date").
3. Base Rent.
(a) Premises. Section 1 of the Lease notwithstanding, effective as of
September 1, 1999, Base Rent per rentable square foot for the Premises other
than for any Primary ROFR Space, Secondary ROFR Space and/or ROFR Space #3 (all
as hereinafter defined and, collectively, sometimes referred to herein as "ROFR
Space") leased by Lessee pursuant to this Fourth Amendment and other than for
the Additional Premises, but including any and all Option Space (as hereinafter
defined) leased by Lessee pursuant to this Fourth Amendment, shall be as set
forth below during the remainder of the Term as extended by this Fourth
Amendment:
<TABLE>
<CAPTION>
Period Base Rent Per Rentable Square Foot
------ ----------------------------------
<S> <C>
9/1/99 - 8/31/00 $12.75
9/1/00 - 8/31/01 $13.01
9/1/01 - 8/31/02 $13.27
9/1/02 - 8/31/03 $13.53
9/1/03 - 8/31/04 $13.80
9/1/04 - 8/31/05 $14.08
9/1/05 - 8/31/06 $14.36
9/1/06 - 8/31/07 $14.65
</TABLE>
(b) ROFR Space. Base Rent for any ROFR Space leased by Lessee pursuant to
this Fourth Amendment shall be calculated as hereinafter provided in this Fourth
Amendment.
(c) Additional Premises. Paragraph 3 of the First Amendment
notwithstanding, effective as of September 1, 1999, Base Rent for the Additional
Premises shall be as follows:
<TABLE>
<CAPTION>
Period Monthly Base Rent
------ -----------------
<S> <C>
9/1/99 - 8/31/00 $728.15
9/1/00 - 8/31/01 $742.71
9/1/01 - 8/31/02 $757.56
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
9/1/02 - 8/31/03 $772.71
9/1/03 - 8/31/04 $788.17
9/1/04 - 8/31/05 $803.93
9/1/05 - 8/31/06 $820.01
9/1/06 - 8/31/07 $836.41
</TABLE>
4. Expansion Option. Section 2 of the Third Amendment is hereby deleted
in its entirety and the following is substituted in its place and stead:
(a) For purposes of this Section 4, "Expansion Option" shall mean either
Option #1 (as hereinafter defined) or Option #2 (as hereinafter defined) as the
case may be or the context requires and "Option Space" shall mean either Option
Space #1 (as hereinafter defined) or Option Space #2 (as hereinafter defined) as
the case may be or the context requires.
(b) Option #1. Lessee shall have an option ("Option #1") to lease all (but
not less than all) of that certain office space on the fourteenth (14th) floor
of the Building ("Option Space #1") consisting of approximately 7,765 rentable
square feet and designated as "Option #1" on Exhibit A attached hereto and by
this reference made a part hereof. Option #1 may be exercised at any time on or
before March 31, 1998, by written notice from Lessee to Lessor ("Lessee's
Notice"). If Option #1 is exercised on or before December 31, 1997, the lease
term for Option Space #1 shall commence on the earlier to occur of (1) the date
Lessee first occupies all or any portion of Option Space #1 for any use or
purpose other than Lessee's construction of leasehold improvements therein, (2)
one hundred twenty (120) days after the date Lessor delivers possession of
Option Space #1 to Lessee, unless Lessee's Notice specifies an earlier date, or
(3) April 1, 1998, and Lessor shall deliver possession of Option Space #1 to
Lessee, for the purpose of Lessee's construction of leasehold improvements
therein, on the later to occur of (x) one hundred twenty (120) days after the
date Lessee's Notice is delivered to Lessor (but in no event later than April 1,
1998) or (y) one hundred twenty (120) days prior to the date specified in
Lessee's Notice, if any, as the commencement date for the lease term for Option
Space #1, or if no such date is specified, December 1, 1997. If Option #1 is
exercised after December 31, 1997, the lease term for Option Space #1 shall
commence on the earlier to occur of (i) the date Lessee first occupies all or
any portion of Option Space #1 for any use or purpose other than Lessee's
construction of leasehold improvements therein, (ii) the date of commencement of
such term as specified in Lessee's Notice or (iii) April 1, 1999.
(c) Option #2. If (but only if) Lessee exercises Option #1 on or before
December 31, 1997, Lessee shall have an option ("Option #2") to lease all (but
not less than all) of that certain office space ("Option Space #2") on the
fourteenth (14th) floor of the Building consisting of approximately 8,428
rentable square feet and designated as "Option #2" on Exhibit A hereto. Option
#2 may be exercised at any time on or before March 31, 1998, by Lessee
delivering Lessee's Notice to Lessor. If Option #2 is exercised as aforesaid,
the lease term for Option Space #2 shall commence on the earlier to occur of (i)
the date Lessee first occupies all
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<PAGE>
or any portion of Option Space #2 for any use or purpose other than Lessee's
construction of leasehold improvements therein, (ii) the date of commencement
of such term as specified in Lessee's Notice or (iii) April 1, 1999.
(d) Any Option Space as to which Lessee fails to timely exercise an
Expansion Option as provided herein shall be deemed to be Primary ROFR Space (as
hereinafter defined in Section 5(a)), effective on the day after the last date
upon which such Expansion Option could be timely exercised by Lessee hereunder.
If Lessee does not exercise Option #1 on or before December 31, 1997, Option
Space #2 shall be deemed to be Primary ROFR Space effective on January 1, 1998.
(e) Lessee's right to exercise an Expansion Option shall be contingent
upon Lessee not being in Default under the Lease, as amended hereby, either on
the date that Lessee exercises such Expansion Option or, unless waived in
writing by Lessor for purposes of the Expansion Option, on the date that
otherwise would have been the commencement date of the lease term for the
applicable Option Space. If Lessee is not in Default under the Lease, as amended
hereby, on the date Lessee exercises such Expansion Option but is so in Default
on the date that otherwise would have been the commencement date of the lease
term for the applicable Option Space and Lessor does not waive in writing such
Default for purposes of the Expansion Option, then, notwithstanding Lessee's
timely exercise of the Expansion Option, Lessee shall have no right to lease
such Option Space as a result of Lessee's exercise of such Expansion Option.
(f) If Lessee exercises an Expansion Option, the following terms and
provisions shall apply:
(i) For purposes of this Section 4(f), "Option Space" shall mean the
space as to which an Expansion Option has been exercised;
(ii) The lease term for the Option Space shall expire on the last day
of the term of the Lease, as amended hereby;
(iii) The annual rate of Base Rent per rentable square foot payable
for the Option Space shall at all times during the lease term for the
Option Space be equal to the annual rate of Base Rent per rentable square
foot then payable for the Original Premises under the Lease, as amended by
Section 3(a) of this Fourth Amendment. Lessee shall pay the Rent Adjustment
for the Option Space, as provided in Section 2B of the Original Lease,
commencing immediately upon the commencement date of the lease term for the
Option Space, and "Lessee's Proportionate Share" as used in clause (iii) of
Section 2A of the Original Lease shall mean the percentage determined by
dividing the aggregate rentable area of the entire Premises (excluding the
Additional Premises) including the Option Space by 424,052.32 rentable
square feet. For purposes of this Section 4, the
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<PAGE>
rentable area of the Option Space shall be as determined by Lessor or, at
Lessor's option, Lessor's architect, in accordance with Lessor's then current
space measurement standards for comparable space in the Building;
(iv) Lessee shall not be entitled to any rental abatement for the
Option Space;
(v) Lessee shall accept the Option Space in an "as-is", "where-is"
physical condition from Lessor, without any agreement, representation, credit or
allowance from Lessor with respect to the improvement or condition thereof
except as set forth in this Section 4(f)(v). Lessee shall pay for any and all
costs or expenses associated with any leasehold improvement work in the Option
Space, which work shall be performed by Lessee in accordance with the terms of
Section 13 of the Original Lease, except that upon completion of such work and
Lessee's delivery of contractors affidavits and full and final waivers of lien
and receipted bills covering all labor and materials expended and used for such
work, Lessor shall pay to Lessee, as Lessor's contribution toward the payment of
the cost and expense of improving the Option Space ("Lessor's Option Space
Contribution"), a sum equal to the dollar amount per rentable square foot of the
Option Space, as set forth in the column entitled "Adjusted Allowance Per
Square Foot" on the schedule attached hereto as Exhibit C and made a part hereof
("Lessor's Contribution Schedule") corresponding to the calendar month in which
Lessee first occupies the Option Space, multiplied by the number of rentable
square feet contained in the Option Space. In the event that Lessee has
satisfied all conditions and requirements as set forth herein and in the Lease
for the payment of Lessor's Option Space Contribution and Lessor fails to pay
Lessor's Option Space Contribution to Lessee within ninety (90) days after
Lessee notifies Lessor in writing that all such conditions and requirements have
been satisfied and that such payment is due and owing to Lessee hereunder, and
further provided that Lessee is not then in breach or default under the Lease,
as amended hereby, Lessee shall, upon the expiration of said ninety (90) day
period, be entitled to offset the amount of Lessor's Option Space Contribution
from the then next due installments of Base Rent thereafter payable by Lessee
under the Lease, as amended hereby, until the full amount of Lessor's Option
Space Contribution has been paid or offset as provided herein; and
(vi) All of the terms and provisions of the Lease, as hereby amended,
shall apply with respect to the Option Space, except as otherwise provided in
this Section 4 or except as same may be inconsistent with the provisions of this
Section 4, and the Option Space shall be deemed to be a part of the Premises
effective as of the first day of the lease term for such Option Space.
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<PAGE>
(g) If Lessee exercises an Expansion Option, Lessor and Lessee shall
execute and deliver an amendment to the Lease reflecting the lease by Lessor to
Lessee of the Option Space on the terms provided above, which amendment shall be
executed and delivered promptly after Lessee delivers Lessee's Notice to Lessor.
(h) Each Expansion Option shall automatically terminate and become null
and void and of no force or effect upon the earlier to occur of (1) the
expiration or termination of the Lease, (2) the termination of Lessee's right to
possession of the Premises, (3) the assignment of the Lease by Lessee, in whole
or in part, which is not in accordance with Section 14 of the Original Lease, or
which is to a party (or any affiliate thereof) who is then, or was within the
preceding six (6) months, a tenant in, or otherwise an occupant of, the
Building, (4) the sublease of the Premises, or any part thereof, which is not in
accordance with Section 14 of the original Lease, or which is to a party (or any
affiliate thereof) who is then, or was within the preceding six (6) months, a
tenant in, or otherwise an occupant of, the Building, or (5) the failure of
Lessee to timely or properly exercise such Expansion Option. Without limiting
the foregoing, no Expansion Option shall be assignable by Lessee separately from
the Lease nor shall any Expansion Option be exercisable by any party other than
Lessee except for Lessee's assignee pursuant to an assignment of the Lease in
accordance with Section 14 of the Original Lease which assignee (or any
affiliate thereof) is not, at the effective date of the assignment, or was not
for the six (6) months preceding the effective date of the assignment, a tenant
in, or otherwise an occupant of, the Building. For purposes of this Fourth
Amendment, an "affiliate" of a party or assignee shall mean any one or more
partners, principals or shareholders of any such party or assignee, or any other
person or entity which controls, is controlled by or is under common control
with such party or assignee.
5. RIGHT OF FIRST REFUSAL - PRIMARY ROFR SPACE. Section 3 of the Third
Amendment is hereby deleted in its entirety and the following is substituted in
its place and stead.
(a) For purposes of this Lease, the term "Primary ROFR Space" shall mean
all leasable space located on the 14th floor of the Building within the area
designated as "Primary ROFR Space" on Exhibit A-1 attached hereto and made a
part hereof, excluding therefrom (i) Option Space (except as provided in Section
4(d) above) and (ii) any space leased to a third (3rd) party as of the date of
execution of this Amendment, including any subsequent renewals or extensions
thereof, until such time as such lease expires or is terminated.
(b) With respect to any lease for all or any portion of the Primary ROFR
Space which Lessor hereafter intends to enter into with a third (3rd) party,
Lessor shall deliver written notice of such intent to Lessee ("Lessor's Primary
ROFR Notice") prior to Lessor entering into any such lease. Lessor's Primary
ROFR Notice shall state (i) the location and rentable area of the portion of the
Primary ROFR Space which Lessor desires to lease, (ii) the proposed lease term
for such portion of the Primary ROFR Space, (iii) the date upon which such
portion of the Primary ROFR Space shall be available for occupancy, (iv) the
annual rate of Base Rent per
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<PAGE>
square foot of rentable area which Lessor desires to charge for such portion of
the Primary ROFR Space, (v) the amount of all rent adjustments which Lessor
desires to charge for such portion of the Primary ROFR Space including, without
limitation, all fixed and/or indexed adjustments to such rate and rent
adjustments for operating expenses and real estate taxes for the Building and
(vi) all of the tenant concessions (e.g., without limitation, rent abatements
and tenant improvement allowances), if any, which Lessor would be willing to
provide to lease such Primary ROFR Space (all of which concessions, other than
tenant improvement allowances, are hereinafter referred to as "Tenant
Concessions"). Lessee shall thereupon have a right of first refusal (a "Primary
ROFR Refusal Right") to lease all (but not less than all) of the portion of the
Primary ROFR Space described in said Lessor's Primary ROFR Notice, subject to
the following terms and conditions:
(i) Lessee shall deliver a written notice of such intent to Lessor
exercising the Primary ROFR Refusal Right ("Lessee's Primary ROFR Exercise
Notice") within ten (10) business days after Lessor delivers Lessor's
Primary ROFR Notice for such Primary ROFR Refusal Right to Lessee. For
purposes of this Fourth Amendment, "business day" shall mean any day other
than a Saturday, a Sunday or any state or federal holiday on which the
United States Postal Service does not make regularly scheduled delivery of
first class mail; and
(ii) Lessee's right to exercise the Primary ROFR Refusal Right
shall be contingent upon Lessee not being in Default under the Lease, as
hereby amended, either on the date Lessee exercises such Primary ROFR
Refusal Right or, unless waived in writing by Lessor for purposes of such
Primary ROFR Refusal Right, on the availability date specified in the
applicable Lessor's Primary ROFR Notice for such portion of the Primary
ROFR Space. If Lessee is not in Default under the Lease, as amended hereby,
on the date Lessee exercises such Primary ROFR Refusal Right but is so in
Default on the availability date specified in the applicable Lessor's
Primary ROFR Notice and Lessor does not waive in writing such Default for
purposes of such Primary ROFR Refusal Right, then, notwithstanding Lessee's
exercise of such Primary ROFR Refusal Right, Lessee shall have no right to
lease the Primary ROFR Space as a result of Lessee's exercise of such
Primary ROFR Right.
In the event that Lessee does not timely or properly exercise a Primary ROFR
Refusal Right, Lessor may at any time thereafter lease the applicable portion of
the Primary ROFR Space to any third (3rd) party tenant on substantially the same
economic terms as set forth in Lessor's Primary ROFR Notice applicable thereto
without any further rights of Lessee to lease such space, provided that Lessee's
failure to timely or properly exercise such Primary ROFR Refusal Right shall
not act as a waiver of or otherwise affect the Expansion Options granted to
Lessee pursuant to Section 4 hereof nor act as a waiver of or otherwise affect
any Primary ROFR Refusal Right as to any other portion of the Primary ROFR
Space, any Secondary ROFR Refusal
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Right (as hereinafter defined) or any ROFR Space #3 Refusal Right (as
hereinafter defined) and further provided that in the event that Lessor
thereafter intends to enter into a lease with a third (3rd) party for the
applicable portion of the Primary ROFR Space upon economic terms materially more
favorable to such tenant than those set forth in the most recent Lessor's
Primary ROFR Notice applicable thereto, such Primary ROFR Space shall again
become subject to Lessee's Primary ROFR Refusal Right as set forth in this
Section 5.
(c) If Lessee exercises a Primary ROFR Refusal Right, the following
terms and provisions shall apply:
(i) Notwithstanding the location of any Primary ROFR Space for
which a Primary ROFR Refusal Right has been exercised as heretofore
provided in this Section, in the event Lessee exercises a Primary ROFR
Refusal Right as aforesaid, the Primary ROFR Space actually to be leased to
Lessee shall consist of the space within the area comprising the Primary
ROFR Space and any Option Space which is subject to an unexercised
Expansion Option which is located closest to the west end of the Building
and is not then leased to a third (3rd) party, under option to be leased to
a third (3rd) party, subject to a right of first refusal to a third (3rd)
party or otherwise committed to be leased or occupied by a third (3rd)
party (the "Available Primary ROFR Space"). In the event any Primary ROFR
Space is relocated as aforesaid, then (1) Landlord shall have the right, in
its sole discretion and upon notice to Lessee, to increase or decrease the
size of such relocated Primary ROFR Space by an amount not to exceed ten
percent (10%) of the rentable area thereof as set forth in Lessor's Primary
ROFR Notice, to the reasonably minimal extent necessary to accommodate the
actual configuration of the Available Primary ROFR Space and Lessor's then
current space demising and measurement standards for comparable space in
the Building, in which event all terms contained in Lessor's Primary ROFR
Notice for such Primary ROFR Space (including, without limitation, any
Tenant Concessions) and the rent payable therefor shall be deemed
automatically adjusted pro rata to such increase or decrease and (2) any
Option Space which remains subject to a valid and existing but unexercised
Expansion Option shall be automatically relocated to the next most westerly
Available Primary ROFR Space which is contiguous to the relocated Primary
ROFR Space in which event Landlord shall have the right, in its sole
discretion and upon notice to Lessee, to increase or decrease the size of
such relocated Option Space by an amount not to exceed ten percent (10%) of
the rentable area thereof prior to such relocation, to the reasonably
minimal extent necessary to accommodate the actual configuration of the
Available Primary ROFR Space and Lessor's then current space demising and
measurement standards for comparable space in the Building;
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(ii) The lease term for such Primary ROFR Space shall commence on the
availability date specified in the applicable Lessor's Primary ROFR Notice and
shall expire on the last day of the term of the Lease, as amended hereby;
(iii) The Base Rent and rental adjustments payable for such Primary ROFR
Space shall be as set forth in the applicable Lessor's Primary ROFR Notice (as
the same may be adjusted in the manner provided in Section 5(c)(i) above) and
Lessee shall be entitled to receive, with respect to such Primary ROFR Space,
any and all Tenant Concessions set forth in such Notice (as the same may be
adjusted in the manner provided in Section 5(c)(i) above), except that the
amount of each such Tenant Concession shall be further adjusted by multiplying
such amount by a fraction (the "Primary ROFR Term Adjustment") whose numerator
is the number of calendar months in the period commencing with the calendar
month in which Lessee first occupies such Primary ROFR Space and continuing to
and including the calendar month in which the Expiration Date occurs, and whose
denominator is the number of calendar months contained in the proposed lease
term as set forth in such Lessor's Primary ROFR Notice;
(iv) For purposes of paying the rental adjustments set forth in Section
5(c)(iii) above with respect to any Primary ROFR Space actually leased by
Lessee, Lessee's Proportionate Share shall be increased effective as of the
commencement date of the lease term for such Primary ROFR Space by adding to
such then effective Lessee's Proportionate Share the percentage determined by
dividing the rentable area of such Primary ROFR Space by 424,052.32 rentable
square feet. For purposes of this Section 5, the rentable area of any Primary
ROFR Space actually leased by Lessee (whether or not relocated) shall be as
determined by Lessor or, at Lessor's option, Lessor's architect, in accordance
with Lessor's then current space measurement standards for comparable space in
the Building;
(v) Lessee shall not be entitled to any rental abatement for any
portion of the Primary ROFR Space except as provided in Section 5(c)(iii) above;
(vi) Lessee shall accept the applicable portion of the Primary ROFR
Space in an "as-is", "where-is" physical condition from Lessor, without any
agreement, representation, credit or allowance from Lessor with respect to the
improvement or condition thereof except as set forth in this Section 5(c)(vi).
Lessee shall pay for any and all costs or expenses associated with any leasehold
improvement work in such Primary ROFR Space, which work shall be performed by
Lessee in accordance with the terms of Section 13 of the Original Lease, except
that upon completion of such work and Lessee's delivery of contractors
affidavits and full and final waivers of lien and receipted bills covering all
labor and materials expended and used for such work, Lessor shall pay to Lessee,
as
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Lessor's contribution toward the payment of the cost and expense of
improving such Primary ROFR Space ("Lessor's Primary ROFR Space
Contribution"), a sum equal to the dollar amount of tenant improvement
allowance per rentable square foot of the original Primary ROFR Space, as
set forth in the applicable Lessor's Primary ROFR Notice, multiplied by the
number of rentable square feet contained in the Primary ROFR Space which is
actually leased to Lessee, and, and further multiplied by the Primary ROFR
Term Adjustment. In the event that Lessee has satisfied all conditions and
requirements as set forth herein and in the Lease for the payment of
Lessor's Primary ROFR Space Contribution and Lessor fails to pay in full
Lessor's Primary ROFR Space Contribution to Lessee within ninety (90) days
after Lessee notifies Lessor in writing that all such conditions and
requirements have been satisfied and that such payment is due and owing to
Lessee hereunder, and further provided that Lessee is not then in breach or
default under the Lease, as amended hereby, Lessee shall, upon the
expiration of said ninety (90) day period, be entitled to offset the unpaid
amount of Lessor's Primary ROFR Space Contribution from the then next due
installments of Base Rent thereafter payable by Lessee under the Lease, as
amended hereby, until the full amount of Lessor's Primary ROFR Space
Contribution has been paid or offset as provided herein; and
(vii) All of the terms and provisions of the Lease, as hereby amended,
shall apply with respect to the applicable portion of the Primary ROFR
Space, except as otherwise provided in this Section 5 or except as same may
be inconsistent with the provisions of this Section 5, and such portion of
the Primary ROFR Space shall be deemed to be a part of the Premises
effective as of the first day of the lease term for such space.
(d) If Lessee exercises a Primary ROFR Refusal Right, Lessor and Lessee
shall execute and deliver an amendment of the Lease reflecting the lease of the
applicable portion of the Primary ROFR Space by Lessor to Lessee on the terms
and provisions set forth in this Section 5, which amendment shall be executed
and delivered within thirty (30) days after Lessee exercises the Primary ROFR
Refusal Right.
(e) The Primary ROFR Refusal Right shall automatically terminate and
become null and void upon the earlier to occur of (1) the expiration or
termination of the Lease, (2) the termination of Lessee's right to possession of
the Premises, (3) the assignment of the Lease by Lessee, in whole or in part,
which is not in accordance with Section 14 of the Original Lease, or which is to
a party (or any affiliate thereof) who is then, or was within the preceding six
(6) months, a tenant in, or otherwise an occupant of, the Building, (4) the
sublease by Lessee of the Premises, or any part thereof, which is not in
accordance with Section 14 of the Original Lease, or which is to a party (or an
affiliate thereof) who is then, or was within the preceding six (6) months, a
tenant in, or otherwise an occupant of, the Building, or (5) the failure of
Lessee to timely or properly exercise a primary ROFR Refusal Right. Without
limiting the foregoing, no
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Primary ROFR Refusal Right shall be assignable by Lessee separately from the
Lease nor shall any Primary ROFR Refusal Right be exercisable by any party
other than Lessee except for Lessee's assignee pursuant to an assignment of the
Lease in accordance with Section 14 of the Original Lease which assignee (or any
affiliate thereof) is not, at the effective date of the assignment, or was not
for the six (6) months preceding the effective date of the assignment, a tenant
in, or otherwise an occupant of, the Building.
6. RIGHT OF FIRST REFUSAL - SECONDARY ROFR SPACE.
---------------------------------------------
(a) For purposes of this Lease, the term "Secondary ROFR Space" shall mean
all leasable space located on the fourteenth (14th) floor of the Building within
the area designated as "Secondary ROFR Space" on Exhibit A-1 attached hereto and
made a part hereof, excluding therefrom (i) the space denoted as "ROFR #3" on
Exhibit A attached hereto and (ii) any space leased to a third (3rd) party as of
the date of execution of this Amendment, including any subsequent renewals or
extensions thereof, until such time as such lease expires or is terminated.
(b) With respect to any lease for all or any portion of the Secondary ROFR
Space which Lessor hereafter intends to enter into with a third (3rd) party,
Lessor shall deliver written notice of such intent to Lessee ("Lessor's
Secondary ROFR Notice") prior to Lessor entering into any such lease. Lessor's
Secondary ROFR Notice shall state (i) the location and rentable area of the
portion of the Secondary ROFR Space which Lessor desires to lease, (ii) the
proposed lease term for such portion of the Secondary ROFR Space, (iii) the date
upon which such portion of the Secondary ROFR Space shall be available for
occupancy, (iv) the annual rate of Base Rent per square foot of rentable area
which Lessor desires to charge for such portion of the Secondary ROFR Space, (v)
the amount of all rent adjustments which Lessor desires to charge for such
portion of the Secondary ROFR Space including, without limitation, all fixed
and/or indexed adjustments to such rate and rent adjustments for operating
expenses and real estate taxes for the Building and (vi) the tenant improvement
allowances and Tenant Concessions, if any, which Lessor would be willing to
provide to lease such Secondary ROFR Space. Lessee shall thereupon have a right
of first refusal (a "Secondary ROFR Refusal Right") to lease all (but not less
than all) of the portion of the Secondary ROFR Space described in said Lessor's
Secondary ROFR Notice, subject to the following terms and conditions:
(i) Lessee shall deliver a written notice of such intent to Lessor
exercising the Secondary ROFR Refusal Right ("Lessee's Secondary ROFR
Exercise Notice") within ten (10) business days after Lessor delivers
Lessor's Secondary ROFR Notice for such Secondary ROFR Refusal Right to
Lessee; and
(ii) Lessee's right to exercise the Secondary ROFR Refusal Right shall
be contingent upon Lessee not being in Default under the Lease, as hereby
amended, either on the date Lessee exercises such Secondary ROFR Refusal
Right or, unless waived in writing by Lessor for purposes of such Secondary
ROFR Refusal Right, on the availability date specified in the applicable
Lessor's
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Secondary ROFR Notice for such portion of the Secondary ROFR Space. If
Lessee is not in Default under the Lease, as amended hereby, on the date
Lessee exercises such Secondary ROFR Refusal Right but is so in Default on
the availability date specified in the applicable Lessor's Secondary ROFR
Notice and Lessor does not waive in writing such Default for purposes of
such Secondary ROFR Right, then, notwithstanding Lessee's exercise of such
Secondary ROFR Right, Lessee shall have no right to lease the Secondary
ROFR Space as a result of Lessee's exercise of such Secondary ROFR Refusal
Right.
In the event that Lessee does not timely or properly exercise a Secondary ROFR
Refusal Right, Lessor may at any time thereafter lease the applicable portion
of the Secondary ROFR Space to any third (3rd) party tenant on substantially the
same economic terms as set forth in Lessor's Secondary ROFR Notice applicable
thereto without any further rights of Lessee to lease such space, provided that
Lessee's failure to timely or properly exercise such Secondary ROFR Refusal
Right shall not act as a waiver of or otherwise affect the Expansion Options
granted to Lessee pursuant to Section 4 hereof nor act as a waiver of or
otherwise affect any Secondary ROFR Refusal Right as to any other portion of the
Secondary ROFR Space, any Primary ROFR Refusal Right or any ROFR Space #3
Refusal Right and further provided that in the event that Lessor thereafter
intends to enter into a lease with a third (3rd) party for the applicable
portion of the Secondary ROFR Space upon economic terms materially more
favorable to such tenant than those set forth in the most recent Lessor's
Secondary ROFR Notice applicable thereto, such Secondary ROFR Space shall again
become subject to Lessee's Secondary ROFR Refusal Right as set forth in this
Section 6.
(c) If Lessee exercises a Secondary ROFR Refusal Right, the following
terms and provisions shall apply:
(i) The lease term for such Secondary ROFR Space shall commence on
the availability date specified in the applicable Lessor's Secondary ROFR
Notice and shall expire on the last day of the term of the Lease, as
amended hereby;
(ii) The Base Rent and rental adjustments payable for such Secondary
ROFR Space shall be as set forth in the applicable Lessor's Secondary ROFR
Notice and Lessee shall be entitled to receive, with respect to such
Secondary ROFR Space, any and all Tenant Concessions set forth in such
notice, except that the amount of each such Tenant Concession shall be
adjusted by multiplying such amount by a fraction (the "Secondary ROFR Term
Adjustment") whose numerator is the number of calendar months in the period
commencing in the calendar month in which Lessee first occupies such
Secondary ROFR Space and continuing to and including the calendar month in
which the Expiration Date occurs, and whose denominator is the number of
calendar months contained in the proposed lease term as set forth in such
Lessor's Secondary ROFR Notice;
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(iii) For purposes of paying the rental adjustments set forth in
Section 6(c)(ii) above with respect to such Secondary ROFR Space, Lessee's
Proportionate Share shall be increased effective as of the commencement
date of the lease term for such Secondary ROFR Space by adding to such then
effective Lessee's Proportionate Share the percentage determined by
dividing the rentable area of such Secondary ROFR Space by 424,052.32
rentable square feet. For purposes of this Section 6, the rentable area of
any Secondary ROFR Space actually leased by Lessee shall be as determined
by Lessor or, at Lessor's option, Lessor's architect, in accordance with
Lessor's then current space measurement standards for comparable space in
the Building;
(iv) Lessee shall not be entitled to any rental abatement for any
portion of the Secondary ROFR Space except as provided in Section 6(c)(ii)
above;
(v) Lessee shall accept the applicable portion of the Secondary ROFR
Space in an "as-is", "where-is" physical condition from Lessor, without any
agreement, representation, credit or allowance from Lessor with respect to
the improvement or condition thereof except as otherwise set forth in the
applicable Lessor's Secondary ROFR Notice adjusted by multiplying such
amount by the Secondary ROFR Term Adjustment ("Lessor's Secondary ROFR
Space Contribution"). Lessee shall pay for any and all costs or expenses
associated with any leasehold improvement work in such Secondary ROFR
Space, which work shall be performed by Lessee in accordance with the terms
of Section 13 of the Original Lease, except that upon completion of such
work and Lessee's delivery of contractors affidavits and full and final
waivers of lien and receipted bills covering all labor and materials
expended and used for such work, Lessor shall pay to Lessee, as Lessor's
contribution toward the payment of the cost and expense of improving such
Secondary ROFR Space, the amount of Lessor's Secondary ROFR Space
Contribution, if any. In the event that Lessee has satisfied all conditions
and requirements as set forth herein and in the Lease for the payment of
Lessor's Secondary ROFR Space Contribution, if any, and Lessor fails to pay
in full Lessor's Secondary ROFR Space Contribution to Lessee within ninety
(90) days after Lessee notifies Lessor in writing that all such conditions
and requirements have been satisfied and that such payment is due and owing
to Lessee hereunder, and further provided that Lessee is not then in breach
or default under the Lease, as amended hereby, Lessee shall, upon the
expiration of said ninety (90) day period, be entitled to offset the unpaid
amount of Lessor's Secondary ROFR Space Contribution from the then next due
installments of Base Rent thereafter payable by Lessee under the Lease, as
amended hereby, until the full amount of Lessor's Secondary ROFR Space
Contribution has been paid or offset as provided herein; and
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(vi) All of the terms and provisions of the Lease, as hereby amended,
shall apply with respect to the applicable portion of the Secondary ROFR
Space, except as otherwise provided in this Section 6 or except as same may
be inconsistent with the provisions of this Section 6, and such portion of
the Secondary ROFR Space shall be deemed to be a part of the Premises
effective as of the first day of the lease term for such space.
(d) If Lessee exercises a Secondary ROFR Refusal Right, Lessor and Lessee
shall execute and deliver an amendment of the Lease reflecting the lease of the
applicable portion of the Secondary ROFR Space by Lessor to Lessee on the terms
and provisions set forth in this Section 6, which amendment shall be executed
and delivered within thirty (30) days after Lessee exercises the Secondary ROFR
Refusal Right.
(e) The Secondary ROFR Refusal Right shall automatically terminate and
become null and void upon the earlier to occur of (1) the expiration or
termination of the Lease, (2) the termination of Lessee's right to possession
of the Premises, (3) the assignment of the Lease by Lessee, in whole or in
part, which is not in accordance with Section 14 of the Original Lease, or which
is to a party (or any affiliate thereof) who is then, or was within the
preceding six (6) months, a tenant in, or otherwise an occupant of, the
Building, (4) the sublease by Lessee of the Premises, or any part thereof, which
is not in accordance with Section 14 of the Original Lease, or which is to a
party (or any affiliate thereof) who is then, or was within the preceding six
(6) months, a tenant in, or otherwise an occupant of, the Building, or (5) the
failure of Lessee to timely or properly exercise a Secondary ROFR Refusal Right.
Without limiting the foregoing, no Secondary ROFR Refusal Right shall be
assignable by Lessee separately from the Lease nor shall any Secondary ROFR
Refusal Right be exercisable by any party other than Lessee except for Lessee's
assignee pursuant to an assignment of the Lease in accordance with Section 14 of
the Original Lease which assignee (or any affiliate thereof) is not, at the
effective date of the assignment, or was not for the six (6) months preceding
the effective date of the assignment, a tenant in, or otherwise an occupant of,
the Building.
7. RIGHT OF FIRST REFUSAL - ROFR SPACE #3.
--------------------------------------
(a) For purposes of this Lease, the term "ROFR Space #3" shall mean that
portion of the space denoted as "ROFR #3" on Exhibit A attached hereto, if any,
that has not been leased to a third (3rd) party on or before December 31, 1997.
This Amendment does not grant to Lessee any rights of first refusal to lease (i)
all or any portion of the space so denoted as "ROFR Space #3" on said Exhibit A
prior to January 1, 1998, or (ii) all or any portion of such space which is
subject to a lease to a third (3rd) party as of December 31, 1997.
(b) Commencing effective January 1, 1998, with respect to any lease for
all or any portion of ROFR Space #3 which Lessor hereafter intends to enter into
with a third (3rd) party, Lessor shall deliver written notice of such intent to
Lessee ("Lessor's ROFR Space #3 Notice") prior to Lessor entering into any such
lease. Lessor's ROFR Space #3 Notice shall state (i) the
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location and rentable area of the portion of ROFR Space #3 which Lessor desires
to lease, (ii) the proposed lease term for such portion of ROFR Space #3, (iii)
the date upon which such portion of ROFR Space #3 shall be available for
occupancy, (iv) the annual rate of Base Rent per square foot of rentable area
which Lessor desires to charge for such portion of ROFR Space #3, (v) the amount
of all rent adjustments which Lessor desires to charge for such portion of ROFR
Space #3 including, without limitation, all fixed and/or indexed adjustments to
such rate and rent adjustments for operating expenses and real estate taxes for
the Building and (vi) the tenant improvement allowances and Tenant Concessions,
if any, which Lessor would be willing to provide to lease such portion of ROFR
Space #3. Lessee shall thereupon have a right of first refusal (a "ROFR Space #3
Refusal Right") to lease all (but not less than all) of the portion of ROFR
Space #3 described in said Lessor's ROFR Space #3 Notice, subject to the
following terms and conditions:
(i) Lessee shall deliver a written notice of such intent to Lessor
exercising the ROFR Space #3 Refusal Right ("Lessee's ROFR Space #3
Exercise Notice") within ten (10) business days after Lessor delivers
Lessor's ROFR Space #3 Notice for such ROFR Space #3 Refusal Right to
Lessee; and
(ii) Lessee's right to exercise the ROFR Space #3 Refusal Right shall
be contingent upon Lessee not being in Default under the Lease, as hereby
amended, either on the date Lessee exercises such ROFR Space #3 Refusal
Right or, unless waived in writing by Lessor for purposes of such ROFR
Space #3 Refusal Right, on the availability date specified in the
applicable Lessor's ROFR Space #3 Notice for such portion of ROFR Space #3.
If Lessee is not in Default under the Lease, as amended hereby, on the date
Lessee exercises such ROFR Space #3 Refusal Right but is so in Default on
the availability date specified in the applicable Lessor's ROFR Space #3
Notice and Lessor does not waive in writing such Default for purposes of
such ROFR Space #3 Refusal Right, then, notwithstanding Lessee's exercise
of such ROFR Space #3 Refusal Right, Lessee shall have no right to lease
the ROFR Space #3 as a result of Lessee's exercise of such ROFR Space #3
Refusal Right.
In the event that Lessee does not timely or properly exercise a ROFR Space #3
Refusal Right, Lessor may at any time thereafter lease the applicable portion
of ROFR Space #3 to any third (3rd) party tenant on substantially the same
economic terms as set forth in Lessor's ROFR Space #3 Notice applicable thereto
without any further rights of Lessee to lease such space, provided that Lessee's
failure to timely or properly exercise such ROFR Space #3 Refusal Right shall
not act as a waiver of or otherwise affect the Expansion Options granted to
Lessee pursuant to Section 4 hereof nor act as a waiver of or otherwise affect
any ROFR Space #3 Refusal Right as to any other portion of ROFR Space #3, any
Primary ROFR Refusal Right or any Secondary ROFR Refusal Right and further
provided that in the event that Lessor thereafter intends to enter into a lease
with a third (3rd) party for the applicable portion of ROFR Space #3 upon
economic terms materially more favorable to such tenant than those set forth in
the most recent Lessor's
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ROFR Space #3 Notice applicable thereto, such ROFR Space shall again become
subject to Lessee's ROFR Space #3 Refusal Right as set forth in this Section 7.
(c) If Lessee exercises a ROFR Space #3 Refusal Right, then at Lessee's
option, exercised by notice to Lessor contained in Lessee's ROFR Space #3
Exercise Notice with respect to ROFR Space #3, the space actually to be leased
to Lessee pursuant to Lessee's exercise of its ROFR Space #3 Refusal Right shall
be relocated to Available Primary ROFR Space (as defined in Section 5(c)(i)
above) located closest to the west end of the Building.
(d) If Lessee's exercises a ROFR Space #3 Refusal Right and elects, as
provided in Section 7(c) above, that the space actually to be leased to Lessee
pursuant to Lessee's exercise of its ROFR #3 Refusal Right shall consist of the
Available Primary ROFR Space located closest to the west end of the Building,
then, in such event, the following terms and provisions shall apply:
(i) Lessee's ROFR Space #3 Refusal Right as to the actual ROFR Space
#3 itself, on the terms stated in the applicable Lessor's ROFR Space #3
Notice, shall be deemed waived and Lessor may at any time thereafter lease
all or any portion of ROFR Space #3 to any third (3rd) party tenant on
substantially the same economic terms as set forth in such Lessor's ROFR
Space #3 Notice without any further rights of Lessee to lease ROFR Space
#3, provided that in the event that Lessor thereafter intends to enter into
a lease with a third (3rd) party tenant for all or any portion of ROFR
Space #3 upon economic terms materially more favorable to such tenant than
those set forth in such Lessor's ROFR Space #3 Notice, ROFR Space #3 shall
again become subject to Lessee's ROFR Space #3 Refusal Right as set forth
in this Section 7;
(ii) Lessor shall have the right, in its sole discretion and upon
notice to Lessee, to increase or decrease the size of such relocated ROFR
Space #3 by an amount not to exceed ten percent (10%) of the rentable area
thereof as set forth in Lessor's ROFR Space #3 Notice, to the reasonably
minimal extent necessary to accommodate the actual configuration of the
Available Primary ROFR Space and Lessor's then current space demising
standards for comparable space in the Building, in which event all terms
contained in Lessor's ROFR Space #3 Notice (including, without limitation,
any Tenant Concessions) and the rent payable therefor shall be deemed
automatically adjusted pro rata to such increase or decrease (except that
Lessor's contribution toward the cost and expense of improving such
relocated ROFR Space #3 shall be determined in accordance with Section
7(d)(vii) below) and any Option Space which remains subject to a valid and
existing but unexercised Expansion Option shall be automatically relocated
to the next most westerly Available Primary ROFR Space which is contiguous
to the relocated ROFR Space #3. In the event that any Option Space is
relocated as aforesaid, then Lessor shall have the right, in its sole
discretion and upon
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notice to Lessee, to increase or decrease the size of such relocated Option
Space by an amount not to exceed ten percent (10%) of the rentable area
thereof, to the reasonably minimal extent necessary to accommodate the
actual configuration of the Available Primary ROFR Space and Lessor's then
current space demising and measurement standards for comparable space in
the Building;
(iii) The lease term for such applicable portion of ROFR Space #3 (as
relocated to Primary ROFR Space) shall commence on the availability date
specified in the applicable Lessor's ROFR Space #3 Notice and shall expire
on the last day of the term of the Lease, as hereby amended;
(iv) The Base Rent and rental adjustments payable for such Primary
ROFR Space shall be determined by Lessor in its sole discretion to be at
rates equal to either (A) the Base Rent and rental adjustments payable for
ROFR Space #3 as set forth in the applicable Lessor's ROFR Space #3 Notice
or (B) the Base Rent and rental adjustments payable under the Lease for the
Original Premises for the corresponding portion of the Term. In the case
where the Base Rent and rental adjustments payable for such Primary ROFR
Space are determined to be as set forth in the applicable Lessor's ROFR
Space #3 Notice as provided in clause (A) above, Lessee shall be entitled
to receive, with respect to such Primary ROFR Space, any and all Tenant
Concessions set forth in such Lessor's ROFR Space #3 Notice, except that
the amount of each such Tenant Concession shall be adjusted to a sum equal
to the dollar amount of such Tenant Concession per rentable square foot of
ROFR Space #3, as set forth in such Lessor's ROFR Space #3 Notice,
multiplied by the number of rentable square feet contained in such Primary
ROFR Space, and further multiplied by a fraction (the "ROFR Space #3 Term
Adjustment") whose numerator is the number of calendar months in the period
commencing with the calendar month in which Lessee first occupies such
Primary ROFR Space and continuing to and including the calendar month in
which the Expiration Date of Term of the Lease, as amended hereby, occurs,
and whose denominator is the number of calendar months contained in the
proposed lease term as set forth in such Lessor's ROFR Space #3 Notice. In
the case where Base Rent and rental adjustments payable for such Primary
ROFR Space are determined to be as payable under the Lease for the Original
Premises for the corresponding portion of the Term as provided in clause
(B) above, Lessee shall not be entitled to receive any Tenant Concessions
including, without limitation, any Tenant Concessions set forth in such
Lessor's ROFR Space #3 Notice;
(v) For purposes of paying the rental adjustments set forth in
Section 7(d)(iv) above as to any ROFR Space actually leased by Lessee
pursuant to this Section 7(d), Lessee's Proportionate Share shall be
increased effective as of the commencement date of the lease term for such
ROFR Space by adding to such
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then effective Lessee's Proportionate Share the percentage determined by
dividing the rentable area of such ROFR Space by 424,052.32 rentable square
feet. For purposes of this Section 7(d), the rentable area of any ROFR
Space actually leased by Lessee shall be as determined by Lessor or, at
Lessor's option, Lessor's architect, in accordance with Lessor's then
current space measurement standards for comparable space in the Building;
(vi) Lessee shall not be entitled to any rental abatement for any
portion of the relocated ROFR Space #3 except in the case where the Base
Rent and rental adjustments payable for such relocated ROFR Space #3 are to
be the same as set forth in the applicable Lessor's ROFR Space #3 Notice
pursuant to Section 7(d)(iv)(A) above in which event Lessee shall be
entitled to the rental abatement, if any, set forth in such Lessor's ROFR
Space #3 Notice;
(vii) Lessee shall accept the applicable portion of ROFR Space #3, as
relocated, in an "as-is", "where-is" physical condition from Lessor,
without any agreement, representation, credit or allowance from Lessor with
respect to the improvement or condition thereof, except as set forth below
in this Section 7(d)(vii). Lessee shall pay for any and all costs or
expenses associated with any leasehold improvement work in such ROFR Space
which shall be performed by Lessee in accordance with the terms of Section
13 of the Original Lease and upon completion of such work and Lessee's
delivery of contractors affidavits and full and final waivers of lien and
receipted bills covering all labor and materials expended and used for such
work, Lessor shall pay to Lessee, as Lessor's contribution toward the
payment of the cost and expense of improving such ROFR Space ("Lessor's
ROFR Space #3 Contribution"), an amount which shall be determined as
follows:
A. in the case where the Base Rent and rental adjustments
payable for such Primary ROFR Space pursuant to Section 7(d)(iv)(A)
above are to be the same as set forth in the applicable Lessor's ROFR
Space #3 Notice, Lessor's ROFR Space #3 Contribution shall be a sum
equal to the dollar amount of tenant improvement allowance per
rentable square foot of ROFR Space #3, as set forth in such Lessor's
ROFR Space #3 Notice, multiplied by the number of rentable square feet
contained in such Primary ROFR Space, and further multiplied by the
ROFR Space #3 Term Adjustment; or
B. in the case where the Base Rent and rental adjustments
payable for such Primary ROFR Space pursuant to Section 7(d)(iv)(B)
above are to be the same as for the Original Premises for the
corresponding portion of the Term, Lessor's ROFR Space #3 Contribution
shall be a sum equal to the dollar amount per rentable square foot of
such
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Primary ROFR Space, as set forth in the column entitled "Adjusted
Allowance Per Square Foot" on Lessor's Contribution Schedule
corresponding to the calendar month in which Lessee first occupies
such Primary ROFR Space, multiplied by the number of rentable square
feet contained in such Primary ROFR Space; or
In the event that Lessee has satisfied all conditions and requirements as
set forth herein and in the Lease for the payment of Lessor's ROFR Space #3
Contribution and Lessor fails to pay in full Lessor's ROFR Space #3
Contribution to Lessee within ninety (90) days after Lessee notifies Lessor
in writing that all such conditions and requirements have been satisfied
and that such payment is due and owing to Lessee hereunder, and further
provided that Lessee is not then in breach or default under the Lease, as
amended hereby, Lessee shall, upon the expiration of said ninety (90) day
period, be entitled to offset the unpaid amount of Lessor's ROFR Space #3
Contribution from the then next due installments of Base Rent thereafter
payable by Lessee under the Lease, as amended hereby, until the full amount
of Lessor's ROFR Space #3 Contribution has been paid or offset as provided
herein; and
(viii) All of the terms and provisions of the Lease, as amended
hereby, shall apply with respect to the applicable portion of ROFR Space
#3, except as otherwise provided in this Section 7 or except as same may be
inconsistent with the provisions of this Section 7, and such portion of
ROFR Space #3 shall be deemed to be a part of the Premises effective as of
the first day of the lease term for such space.
(e) If Lessee exercises a ROFR Space #3 Refusal Right and Lessee does not
elect, as provided in Section 7(c) above, that the space actually to be leased
to Lessee pursuant to Lessee's exercise of its ROFR Space #3 Refusal Right shall
consist of the Available Primary ROFR Space located closest to the west end of
the Building, then, in such event, the following terms and provisions shall
apply:
(i) The lease term for such applicable portion of ROFR Space #3 shall
commence on the availability date specified in the applicable Lessor's ROFR
Space #3 Notice and shall expire on the last day of the term of the Lease,
as amended hereby;
(ii) The Base Rent and rental adjustments payable for the applicable
portion of ROFR Space #3 shall be equal to the Base Rent and rental
adjustments payable for ROFR Space #3 as set forth in the applicable
Lessor's ROFR Space #3 Notice and Lessee shall be entitled to receive, with
respect to such portion of ROFR Space #3, any and all Tenant Concessions
set forth in such Lessor's ROFR Space #3 Notice except that the amount of
each such Tenant Concession shall be
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adjusted by a sum equal to the dollar amount of such Tenant Concession set
forth in such Lessor's ROFR Space #3 Notice multiplied by the ROFR Space #3
Term Adjustment (as defined in Section 7(d)(iv) above);
(iii) For purposes of paying the rental adjustments set forth in
Section 7(e)(ii) above with respect to any ROFR Space actually leased by
Lessee pursuant to this Section 7(e), Lessee's Proportionate Share shall be
increased effective as of the commencement date of the lease term for such
ROFR Space by adding to such then effective Lessee's Proportionate Share
the percentage determined by dividing the rentable area of such ROFR Space
by 424,052.32 rentable square feet. For purposes of this Section 7(e), the
rentable area of any ROFR Space actually leased by Lessee shall be as
determined by Lessor or, at Lessor's option, Lessor's architect, in
accordance with Lessor's then current space measurement standards for
comparable space in the Building;
(iv) Lessee shall not be entitled to any rental abatement for any
portion of ROFR Space #3 except as otherwise set forth in the applicable
Lessor's ROFR Space #3 Notice;
(v) Lessee shall accept the applicable portion of ROFR Space #3 in an
"as-is", "where-is" physical condition from Lessor, without any agreement,
representation, credit or allowance from Lessor with respect to the
improvement or condition thereof, except as otherwise set forth in the
applicable Lessor's ROFR Space #3 Notice. Lessee shall pay for any and all
costs or expenses associated with any leasehold improvement work in such
ROFR Space which shall be performed by Lessee in accordance with the terms
of Section 13 of the Original Lease and upon completion of such work and
Lessee's delivery of contractors affidavits and full and final waivers of
lien and receipted bills covering all labor and materials expended and used
for such work, Lessor shall pay to Lessee, as Lessor's contribution toward
the payment of the cost and expense of improving such ROFR Space ("Lessor's
ROFR Space #3 Contribution"), a sum equal to the dollar amount of tenant
improvement allowance per rentable square foot of ROFR Space #3, as set
forth in the applicable Lessor's ROFR Space #3 Notice, multiplied by the
number of rentable square feet contained in such ROFR Space #3, and further
multiplied by the ROFR Space #3 Term Adjustment. In the event that Lessee
has satisfied all conditions and requirements as set forth herein and in
the Lease for the payment of Lessor's ROFR Space #3 Contribution and Lessor
fails to pay in full Lessor's ROFR Space #3 Contribution to Lessee within
ninety (90) days after Lessee notifies Lessor in writing that all such
conditions and requirements have been satisfied and that such payment is
due and owing to Lessee hereunder, and further provided that Lessee is not
then in breach or default under the Lease, as amended hereby, Lessee shall,
upon the expiration of said ninety (90) day period, be
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entitled to offset the unpaid amount of Lessor's ROFR Space #3 Contribution
from the then next due installments of Base Rent thereafter payable by
Lessee under the Lease, as amended hereby, until the full amount of
Lessor's ROFR Space #3 Contribution has been paid or offset as provided
herein; and
(vi) All of the terms and provisions of the Lease, as amended hereby,
shall apply with respect to the applicable portion of ROFR Space #3, except
as otherwise provided in this Section 7 or except as same may be
inconsistent with the provisions of this Section 7, and such portion of
ROFR Space #3 shall be deemed to be a part of the Premises effective as of
the first day of the lease term for such space.
(f) If Lessee exercises a ROFR Space #3 Refusal Right, Lessor and Lessee
shall execute and deliver an amendment of the Lease reflecting the lease of the
applicable portion of ROFR Space #3 by Lessor to Lessee on the terms and
provisions set forth in this Section, which amendment shall be executed and
delivered within thirty (30) days after Lessee exercises the ROFR Space #3
Refusal Right.
(g) The ROFR Space #3 Refusal Right shall automatically terminate and
become null and void upon the earlier to occur of (1) the expiration or
termination of the Lease, (2) the termination of Lessee's right to possession
of the Premises, (3) the assignment of the Lease by Lessee, in whole or in part,
which is not in accordance with Section 14 of the Original Lease, or which is to
a party (or any affiliate thereof) who is then, or was within the preceding six
(6) months, a tenant in, or otherwise an occupant of, the Building, (4) the
sublease by Lessee of the Premises, or any part thereof, which is not in
accordance with Section 14 of the Original Lease, or which is to a party (or any
affiliate thereof) who is then, or was within the preceding six (6) months, a
tenant in, or otherwise an occupant of, the Building, or (5) the failure of
Lessee to timely or properly exercise a ROFR Space #3 Refusal Right. Without
limiting the foregoing, no ROFR Space #3 Refusal Right shall be assignable by
Lessee separately from the Lease nor shall any ROFR Space #3 Refusal Right be
exercisable by any party other than Lessee except for Lessee's assignee pursuant
to an assignment of the Lease in accordance with Section 14 of the Original
Lease which assignee (or any affiliate thereof) is not, at the effective date of
the assignment, or was not for the six (6) months preceding the effective date
of the assignment, a tenant in, or otherwise an occupant of, the Building.
8. Extension Option. Section 37 of the Lease is hereby deleted in its
entirety and the following is substituted in its place and stead:
(a) Subject to the terms, conditions and limitations set forth in this
Section 8, Lessee is hereby granted the option to extend (the "Option to
Extend") the Term of the Lease for one (1) renewal term of five (5) years
commencing September 1, 2007 (the "Extension Term Commencement Date"), and
expiring August 31, 2012 (the "Extension Term"), on the same terms and
conditions as are contained in the Lease, as amended hereby, except as follows:
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(i) Lessor shall be under no obligation to make or pay for any further
improvements to the Premises;
(ii) Lessee shall have no further rights under this Section 8; and
(iii) Commencing as of the first day of the Extension Term, Base Rent and
Rent Adjustments for the first Lease Year of the Extension Term shall be equal
to the greater of:
A. Ninety percent (90%) of the then current Fair Market Base Rental
(as hereinafter defined) plus Lessee's Proportionate Share of Taxes and
Expenses allocable to the Premises; or
B. the then current escalated Base Rent plus Lessee's Proportionate
Share of Taxes and Expenses allocable to the Premises.
If the Base Rent for the first Lease Year of the Extension Term is determined to
be equal to ninety percent (90%) of the then current Fair Market Base Rental
pursuant to Section 8(a)(iii)A above, then such Base Rent shall be increased by
the Fair Market Escalation Rate (as hereinafter defined), compounded, on each
September 1 thereafter during the remainder of the Extension Term. If the Base
Rent for the first Lease Year of the Extension Term is determined to be equal to
the then current escalated Base Rent pursuant to Section 8(a)(iii)B above, then
the Base Rent shall be increased by two percent (2%), compounded, on each
September 1 thereafter during the remainder of the Extension Term. For the
purposes of this Section 8(a), "Fair Market Base Rental" shall be deemed to mean
the market base rental, net of all concessions, tax and expense "stops",
construction or other allowances or abatements, for comparable office space in
comparable first-class office buildings in the North Michigan Avenue market of
Chicago, Illinois, for lease terms equivalent to the Extension Term, in effect
on the Extension Term Commencement Date, as reasonably determined by Lessor; the
"Fair Market Base Rental Escalation Rate" shall be deemed to mean the annual
compounded escalation percentage rate being applied to such Fair Market Base
Rental for comparable office space in comparable first-class offices buildings
in the North Michigan Avenue market of Chicago, Illinois, for lease terms
equivalent to the Extension Term, in effect on the Extension Term Commencement
Date, as reasonably determined by Lessor; and the "North Michigan Avenue market
of Chicago, Illinois" shall be deemed to mean the area bounded by Lake Shore
Drive to the east, the Chicago River to the south, State Street to the west and
Oak Street to the north, together with the area bounded by Columbus Drive to the
east, Randolph Street to the south, Michigan Avenue to the west and the Chicago
River to the north. In the event that a dispute arises as to the reasonableness
of Lessor's determination of Fair Market Base Rental or Fair Market Base Rental
Escalation Rate, or both, (which, for purposes of ascertaining whether Lessor's
determination was reasonable, shall be deemed to have been made on the date
Lessor
22
<PAGE>
delivered notice of such determination to Lessee) and such dispute is not
resolved, either by agreement of the parties or by the issuance of a final,
unappealable order of a court of competent jurisdiction, prior to the
Extension Term Commencement Date, then for the period commencing on the
Extension Term Commencement Date and continuing to and including the date
such dispute is resolved, either by agreement of the parties or by the
issuance of a final, unappealable order of a court of competent
jurisdiction, the Base Rent and the annual increases thereof payable by
Lessee during such period shall be as determined by Lessor as provided
above. In the event such resolution of such dispute results in an agreement
by the parties or a determination in such court order that the Fair Market
Base Rental or the Fair Market Base Rental Escalation Rate, or both, are
lower than as determined by Lessor as provided above, such lower rate or
rates shall be used to determine the Base Rent and the annual increases
thereof payable by Lessee during the Extension Term as provided above,
retroactive to the Extension Term Commencement Date, and, provided that
Lessee is not then in Default under the Lease, as amended hereby, Lessee
shall be entitled to offset the amount of any Base Rent overpaid by Lessee
during such period against the then next due installments of Base Rent
payable by Lessee hereunder until the full amount of such overpayment has
been offset as provided herein. In the event such resolution of such
dispute results in an agreement by the parties or a determination in such
court order that neither the Fair Market Base Rental nor the Fair Market
Base Rental Escalation Rate are lower than as determined by Lessor as
provided above, the Base Rent and the annual increases thereof payable by
Lessee during the Extension Term shall be as determined by Lessor as
provided above.
(b) Notwithstanding anything to the contrary contained in this Section 8,
Lessee's right to exercise the Option to Extend shall be contingent upon Lessee
not being in Default under the Lease, as amended hereby, either on the date
that Lessee exercises the Option to Extend or, unless waived in writing by
Lessor for purposes of the Option to Extend, on the Extension Term Commencement
Date. If Lessee is not in Default under the Lease, as amended hereby on the date
that Lessee exercises the Option to Extend but is so in Default on the Extension
Term Commencement Date and Lessor does not waive in writing such Default for
purposes of the Option to Extend, then, notwithstanding Lessee's exercise of the
Option to Extend, the Option to Extend shall be deemed to be terminated and of
no force and effect and the Term of the Lease shall expire or be terminated in
accordance with terms of the Lease as if Lessee had not been granted the Option
to Extend pursuant to this Section 8.
(c) In order to exercise the Option to Extend, Lessee shall deliver to
Lessor written notice of such exercise ("Lessee's Extension Option Exercise
Notice") prior to March 1, 2006 (the "Extension Option Deadline"), and otherwise
satisfy the terms and conditions of this Section 8, or the Option to Extend
shall lapse and be of no further force or effect.
(d) Lessee may, by notice given to Lessor not later than December 1, 2005,
request Lessor to provide Lessee with an estimate of the Fair Market Base Rental
and Fair Market Base Rental Escalation Rate that Lessor then believes in good
faith is likely to be in effect on the
23
<PAGE>
Extension Term Commencement Date and, in such case, (i) Lessor shall provide
Lessee with such estimate on or before February 15, 2006, and (ii) except as
otherwise expressly provided herein, such estimate shall be deemed to be the
then current Fair Market Base Rental and Fair Market Base Rental Escalation Rate
for purposes of determining Base Rent and the annual increases thereof during
the Extension Term pursuant to Section 8(a)(iii)A above.
(e) The provisions of this Section shall apply to the entire Premises
leased by Tenant hereunder as of the day immediately preceding the Extension
Term Commencement Date including, without limitation, any and all Option Space,
Primary ROFR Space, Secondary ROFR Space and ROFR Space #3 actually leased by
Lessee pursuant to the Fourth Amendment.
(f) In consideration of Lessor agreeing to provide that the lease term for
any and all ROFR Space leased pursuant to Lessee's exercise of any Primary ROFR
Refusal Right, any Secondary ROFR Refusal Right and/or any ROFR Space #3 Refusal
Right (individually and collectively, any "Refusal Right") shall expire on the
last day of the Term of the Lease, as amended hereby, it is agreed that in the
event that (i) Lessee shall have actually leased any ROFR Space as a result of
exercising any such Refusal Right, (ii) the Term of the Lease, as amended
hereby, is terminated prior to the Expiration Date or is not extended pursuant
to the Option to Extend and (iii) the expiration date of the lease term for such
ROFR Space as set forth in the applicable Lessor's Notice exercising such
Refusal Right was later than the last day of the Term of the Lease, as amended
hereby, Lessee shall pay to Lessee a sum (the "Termination Fee") equal to the
aggregate amount of Base Rent and the Rent Adjustment due and payable under the
Lease, as amended hereby, for the last twelve (12) full calendar months
immediately preceding the Expiration Date with respect to any and all such
leased ROFR Space for which the applicable Lessor's Notice specified a
termination date later than the last day of the Term of the Lease, as amended
hereby, but not with respect to any other portion of the Premises, provided that
for purposes of calculating the Termination Fee in the event the Lease is
terminated prior to the Expiration Date, the aggregate amount of Base Rent and
Rent Adjustment due and payable for such twelve (12) month period shall be
determined as if the Lease had not been so terminated. If the Lease is not
extended pursuant to the Extension Option because Lessee does not properly
exercise the Option to Extend prior to the Extension Option Deadline, the
Termination Fee, if any, shall be due and payable on or before April 1, 2006. If
the Term of the Lease is not extended pursuant to the Extension Option as a
result of a Default being in existence on the Extension Term Commencement Date
or if the Lease is terminated prior to the Expiration Date as a result of the
existence of a Default, the Termination Fee, if any, shall be due and payable
within seven (7) days after Lessee receives notice from Lessor of the
termination of either the Extension Option or the Lease, as the case may be. The
Termination Fee, if any, payable by Lessee pursuant to this Section 8(f) shall
be in addition to, and not in lieu of, any other amounts payable by Lessee under
the Lease, as amended hereby, including, without limitation, Base Rent, Rent
Adjustment and damages (liquidated or otherwise) payable by reason of Lessor's
exercise of its remedies upon Default by Lessee.
24
<PAGE>
9. TERMINATION OPTION. Any and all rights of Lessee to terminate the
Lease as set forth in Section 43 of the Original Lease, Section 6 of the First
Amendment and Section 5 of the Third Amendment are hereby deleted and shall be
of no further force and effect.
10. TENANT IMPROVEMENT ALLOWANCE. In consideration for entering into this
Fourth Amendment, and subject to the terms, conditions and limitation set forth
in this Section 10, Lessor shall make a contribution in the amount of Two
Hundred Fifty Thousand and No/100 Dollars ($250,000.00) ("Lessor's
Contribution") toward payment of the cost and expense of Lessee refurbishing the
Premises (or any portion thereof) within ninety (90) days after Lessee's written
request for such contribution is delivered to Lessor, provided such request is
delivered not earlier than September 1, 1999, and not later than August 31,
2001. Lessee's right to receive payment of Lessor's Contribution shall be
contingent upon (a) Lessee not being in default or breach under the Lease, as
amended hereby, at the time Lessee so requests payment and (b) Lessee, at such
time, having completed the work for which Lessor's Contribution is being so
requested in accordance with the terms of Section 13 of the Original Lease and
having submitted to Lessor contractors affidavits and full and final waivers of
lien and receipted bills for labor and materials expended and used for such
work. In the event that Lessee has satisfied all conditions and requirements as
set forth herein and in the Lease for the payment of Lessor's Contribution and
Lessor fails to pay in full Lessor's Contribution to Lessee within ninety (90)
days after Lessee's request therefor as aforesaid and provided that Lessee is
not then in breach or default under the Lease, as amended hereby, Lessee shall,
upon the expiration of said ninety (90) day period, be entitled to offset the
unpaid amount of Lessor's Contribution from the then next due installments of
Base Rent thereafter payable by Lessee under the Lease, as amended hereby,
until the full amount of Lessor's Contribution has been paid or offset as
provided herein. In the event Lessee fails to deliver such request for Lessor's
Contribution as required hereby on or before August 31, 2001, Lessee's right to
request Lessor's Contribution shall be deemed waived and of no further force and
effect and Lessor shall be relieved of any obligation to make Lessor's
Contribution.
11. BROKER. Lessee represents to Lessor that Lessee has not dealt with any
real estate broker, salesperson or finder in connection with this Amendment
other than Golub & Company (the "Broker"), and no other such person initiated or
participated in the negotiation of this Amendment or is entitled to any
commission in connection herewith. Lessee hereby agrees to indemnify, defend and
hold Lessor, its property manager and their respective employees harmless from
and against any and all liabilities, claims, demands, actions, damages, costs
and expenses (including attorneys' fees) arising from a claim for a fee or
commission made by any broker (other than the Broker), claiming to have acted by
or on behalf of Lessee in connection with this Amendment.
12. SUBMISSION. Submission of this Amendment by Lessor or Lessor's agent,
or their respective agents or representatives, to Lessee for examination and/or
execution shall not in any manner bind Lessor and no obligations on Lessor shall
arise under this Amendment unless and
25
<PAGE>
until this Amendment is fully signed and delivered by Lessor and Lessee;
provided, however, the execution and delivery by Lessee of this Amendment to
Lessor or Lessor's agent, or their respective agents or representatives, shall
constitute an irrevocable offer by Lessee on the terms and conditions herein
contained, which offer may not be revoked for fifteen (15) days after such
delivery.
13. EFFECT OF AMENDMENT. As amended by this Amendment, the Lease shall
remain in full force and effect.
14. EXCULPATORY PROVISIONS. It is expressly understood and agreed by and
between the parties hereto, anything herein to the contrary notwithstanding,
that each and all of the representations, warranties, covenants, undertakings
and agreements herein made on the part of Lessor while in form purporting to be
the representations, warranties, covenants, undertakings and agreements of
Lessor are nevertheless each and every one of them made and intended, not as
personal representations, warranties, covenants, undertakings and agreements by
Lessor or for the purpose of or with the intention of binding Lessor personally,
but are made and intended for the purpose only of subjecting Lessor's interest
in the Office Area and the Premises to the terms of this Amendment and for no
other purposes whatsoever, and in case of default hereunder by Lessor (or
default through, under or by any of its beneficiaries, or agents or
representatives of said beneficiaries), Lessee shall look solely to the interest
of Lessor in said Office Area, and this Amendment is executed and delivered by
Lessor not in its own right, but solely in the exercise of the powers conferred
upon it as such Trustee; that the Lessor shall have no personal liability to pay
any indebtedness accruing hereunder or to perform any covenant, either express
or implied, herein contained and no liability or duty shall rest upon Lessor to
sequester the trust estate or the rent, issues and profits arising therefrom, or
the proceeds arising from any sale or other responsibility of any sort is
assumed by, nor shall at any time be asserted or enforceable against, said
Lessor, American National Bank and Trust Company of Chicago, a national banking
association, individually or personally, but only as Trustee under the
provisions of a Trust Agreement dated May 2, 1989 and known as Trust No. 108237-
06, on account of this Amendment or on account of any representation, warranty,
covenant, undertaking or agreement of Lessor in this Amendment contained, either
express or implied, all such personal liability, if any, being expressly waived
and released by Lessee and by all persons claiming by, through or under Lessee.
15. RECORDING. The parties will expeditiously execute and record the
Memorandum of Amendment in the form attached hereto as Exhibit B and made a part
hereof.
16. SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT. Lessor shall
cause to be executed and delivered to Lessee, a subordination, nondisturbance
and attornment agreement from the current holder of the First Mortgage, in the
form attached hereto as Exhibit D and made a part hereof, and Lessee agrees to
execute and deliver such agreement to such holder. It is agreed by Lessor and
Lessee that in the event of a conflict between the provisions
26
<PAGE>
of the second (2nd) sentence of the first (lst) paragraph of Section 19 of the
Original Lease and the provisions of the third (3rd) paragraph of said Section
19, the provisions of said third (3rd) paragraph shall prevail and control.
IN WITNESS WHEREOF, this Amendment is executed as of the day and year
aforesaid.
LESSEE: LESSOR:
------ ------
PLAYBOY ENTERPRISES, INC., AMERICAN NATIONAL BANK AND
a Delaware corporation TRUST COMPANY OF CHICAGO,
not personally, but solely as
Trustee under as aforesaid
By: /s/ Howard Shapiro By: /s/ Gregory S. Kasprzyk
-------------------------------- --------------------------------
Title: Executive V.P. Title: Assistant Vice President
------------------------- --------------------------
27
<PAGE>
EXHIBIT A
---------
FLOOR PLAN OF 14TH FLOOR
------------------------
SHOWING OPTION SPACE AND ROFR SPACE #3
--------------------------------------
A-1
<PAGE>
[FLOOR PLAN OF LAKE SHORE PLACE]
[LOGO OF GOLUB]
<PAGE>
EXHIBIT A-1
-----------
FLOOR PLAN OF 14TH FLOOR
------------------------
SHOWING PRIMARY AND SECONDARY ROFR SPACE
----------------------------------------
A-1-1
<PAGE>
PRIMARY ROFR SPACE
(HATCHED AREA)
[FLOOR PLAN OF LAKE SHORE PLACE]
[LOGO OF GOLUB]
<PAGE>
SECONDARY ROFR SPACE
(HATCHED AREA)
[FLOOR PLAN OF LAKE SHORE PLACE]
[LOGO OF GOLUB]
<PAGE>
This space reserved for Recorder's use only.
--------------------------------------------------
MEMORANDUM OF FOURTH AMENDMENT
------------------------------
THIS MEMORANDUM OF FOURTH AMENDMENT ("Memorandum") is made as of this 6th
day of August, 1996, between AMERICAN NATIONAL BANK AND TRUST COMPANY OF
CHICAGO, not individually, but solely as Trustee under Trust Agreement dated May
2, 1989 and known as Trust No. 108237-06 (herein called the "Lessor") and
PLAYBOY ENTERPRISES, INC., a Delaware corporation (herein called the "Lessee").
Capitalized terms used herein shall have the same meaning as set forth in the
Lease (defined below) unless expressly defined herein or the context clearly
indicates to the contrary.
W I T N E S S E T H:
- - - - - - - - - -
Lessor is the owner of a certain mixed used building located in Cook
County, Illinois, of which one or more of four components as are legally
described in Exhibit A attached hereto, as may be affected by this Memorandum.
The components are defined in Exhibit A as the Office Parcel, the Lot 1 Parcel,
the Skylight Parcel and the Garage Parcel.
The building containing the four components is now commonly known as 680
North Lake Shore Drive, Chicago, Illinois.
Lessor has leased to Lessee a portion of the Office Parcel consisting of
the entire fifteenth (15th) and sixteenth (16th) floors (the "Premises")
together with certain rights and privileges with respect to the Skylight Parcel,
the Garage Parcel and the Lot 1 Parcel for the Term and upon and subject to the
covenants, provisions and conditions contained in that certain Office Lease
dated as of April 7, 1988 entered into between the parties hereto, or their
predecessors-in-interest, (the "Lease") and as such document has been amended by
those certain Amendments dated October 26, 1989, June 1, 1992, August 30, 1993
and August 6, 1996 (the "Amendments") between Lessor and Lessee. The Amendments
and all of their respective covenants, provisions and conditions are by this
reference expressly incorporated herein and made a part of this Memorandum of
Amendment and all shall take notice thereof whether or not
<PAGE>
hereinafter more particularly described. The Amendments' covenants and
provisions affecting all Parcels are binding on the Lessor and its successors
and assigns as owners of any said Parcels.
Without limitation, it is hereby disclosed that the Fourth Amendment
includes terms and provisions which (among other things) (a) provided that
Lessor grants to Lessee certain expansion rights and rights of first refusal on
certain office space on the 14th floor of the Building, and (b) contemplate
that the existence of this Fourth Amendment be disclosed and reference made to
its terms and provisions by means of this Memorandum.
Lessee hereby appoints Lessor as its attorney-in-fact to record a Release
of this Memorandum executed by Lessor for itself and on Lessee's behalf, upon
the occurrence of any one of the following:
I. Expiration of the Lease at either August 31, 2007, or August 31,
2012, or otherwise according to its terms; or
II. Termination of the Lease; or
III. Issuance of a nonappealable final order of any court with
jurisdiction over the Premises granting possession of the Premises to
Lessor; or
IV. Ninety (90) days after written notice from Lessor to Lessee that
Lessor intends to record such Release, because Lessee has voluntarily
abandoned the Premises, it being acknowledged that, for the purposes of
this paragraph "abandoned" does not include an approved subletting or
assignment.
In addition, Lessee hereby appoints Lessor as its attorney-in-fact to
record a Release of this Memorandum as to the Garage Parcel in the event Lessor
or its successors or assigns exercises its option under the Lease to purchase
such parking rights from Lessee.
This Memorandum and the Fourth Amendment are expressly subject to an
subordinate to the Easements (as defined in the Lease) and to any and all
mortgages now or hereafter encumbering the Office Parcel, and Lot 1 Parcel, the
Garage Parcel or the Skylight Parcel.
Lessor and Lessee have entered into this Memorandum of Fourth Amendment-in
order that third parties may have notice of the existence of the Amendment and
some of its specific provisions. This Memorandum of Amendment is not intended
to amend, modify or otherwise change the terms and conditions of the
Lease or the Fourth Amendment nor shall provisions of this Memorandum of Fourth
Amendment be used in interpreting the provisions of the Lease or the Fourth
Amendment. In the event of a conflict between this Memorandum of Fourth
Amendment and the Fourth Amendment, the Fourth Amendment shall control.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Memorandum of Fourth
Amendment as of the date and year first above written.
AMERICAN NATIONAL BANK
AND TRUST COMPANY OF CHICAGO,
not individually, but solely as
Trustee as aforesaid
Attest: /s/ Gregory S. Kasprzyk By: /s/ Michael Whelan
------------------------- ---------------------------
Name: Gregory S. Kasprzyk Name: Michael Whelan
------------------------ -------------------------
Title: Assistant Secretary Title: VP
------------------------ ------------------------
PLAYBOY ENTERPRISES, INC.,
a Delaware corporation
Attest: /s/ Robert D. Campbell By: /s/ Howard Shapiro
------------------------- ---------------------------
Name: Robert D. Campbell Name: Howard Shapiro
------------------------ -------------------------
Title: Asst. Secretary Title: Exec. V.P.
------------------------ ------------------------
THIS DOCUMENT PREPARED BY
AND AFTER RECORDING RETURN TO:
Elizabeth H. Belkin, Esq.
Rudnick & Wolfe
203 North LaSalle Street
Suite 1800
Chicago, Illinois 60601
Box 416
This instrument is executed by the undersigned Land Trustee, not personally but
solely as Trustee in the exercise of the power and authority conferred upon and
vested in it as such Trustee. It is expressly understood and agreed that all
the warranties, indemnities, representations, covenants, undertakings and
agreements herein made on the part of the Trustee are undertaken by it solely in
its capacity as Trustee and not personally. No personal liability or personal
responsibility is assumed by or shall at any time be asserted or enforceable
against the Trustee on account of any warranty, indemnity, representation,
covenant, undertaking or agreement of the Trustee in this instrument.
B-3
<PAGE>
STATE OF ILLINOIS)
) ss.
COUNTY OF COOK )
I, JENIFER Y. CHESSE, a Notary Public in and for said County in the State
aforesaid, do hereby certify that GREGORY S. KASPRZYK, the ASSISTANT SECRETARY
of AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO, a national banking
association, as Trustee as aforesaid, MICHAEL WHELAN the VICE PRESIDENT of said
Bank, who are personally known to me to be the same persons whose names are
subscribed to the foregoing instrument as such respective officers appeared
before me this day in person and acknowledged that they signed and delivered the
said instrument as their own free and voluntary act and as the free and
voluntary act of said Bank, as Trustee, for the uses and purposes therein set
forth; and the said ______________ then and there did acknowledge that (s)he,
as custodian of the seal of sale Bank, did affix the seal of said Bank to said
instrument as his/her free and voluntary act and as the free and voluntary act
of said Bank, as Trustee, for the uses and purposes therein set forth.
Given under my hand and notarial seal this LAND TRUST day of AUGUST on the 8th
1996.
OFFICIAL SEAL
JENIFER Y. CHESSE
NOTARY PUBLIC STATE OF ILLINOIS /s/ Jenifer Y. Chesse
My Commission Expires 11/01/99 ----------------------------------
Notary Public
My Commission Expires:
---------------------------
B-4
<PAGE>
STATE OF ILLINOIS )
) ss.
COUNTY OF COOK )
I, Sue Ann Dickey, a Notary Public in and for said County, in the State
aforesaid, do hereby certify that Howard Shapiro and Robert D. Campbell,
Assistant Secretary of PLAYBOY ENTERPRISES, INC., a Delaware corporation, both
personally known to me to be the same persons whose names are subscribed to the
foregoing instrument as such respective officer, appeared before me this day in
person and acknowledged that they signed and delivered the said instrument as
their own free and voluntary act and as the free and voluntary act of said
corporation, for the uses and purposes therein set forth therein; and the latter
office also then and there did acknowledge that (s)he, as custodian of the
corporate seal of said corporation, affixed the same to the foregoing
instrument as his/her free and voluntary act and as the free and voluntary act
of said corporation, for the uses and purposes set forth therein.
Given under my hand and notarial seal this 7th day of August, 1996.
/s/ Sue Ann Dickey
-------------------------------------
Notary Public
"OFFICIAL SEAL"
Sue Ann Dickey
My Commission Expires: Notary Public, State of Illinois
November 1, 1996 My Commission Expires 11/1/96
--------------------------------
B-5
<PAGE>
EXHIBIT A TO MEMORANDUM OF FOURTH AMENDMENT
-------------------------------------------
LEGAL DESCRIPTION
-----------------
THE "OFFICE PARCEL"
------------------
LOTS 5, 10, 12, 13, 14, 16 AND 17 IN PAUL'S SUBDIVISION OF THE LAND, PROPERTY
AND SPACE IN PART OF LOTS 5 AND 6 AND THE TRACT MARKED ALLEY LYING BETWEEN SAID
LOTS 5 AND 6 OF COUNTY CLERK'S DIVISION OF THE UNSUBDIVIDED ACCRETIONS LYING
EAST OF AND ADJOINING THE SUBDIVIDED PARTS OF BLOCKS 43, 44 AND 54 WITH OTHER
LANDS IN KINZIE'S ADDITION TO CHICAGO IN THE NORTH 1/2 OF SECTION 10, TOWNSHIP
39 NORTH, RANGE 14, EAST OF THE THIRD PRINCIPAL MERIDIAN (EXCEPTING FROM LOT 12
THAT PART TAKEN FOR 666 PRIVATE GARAGE CONDOMINIUM RECORDED AS DOCUMENT 26827972
IN COOK COUNTY, ILLINOIS).
PIN 17-10-202-064
THE "LOT 1 PARCEL"
-----------------
LOT 1 IN PAUL'S SUBDIVISION OF THE LAND, PROPERTY AND SPACE IN PART OF LOTS 5
AND 6 AND THE TRACT MARKED ALLEY LYING BETWEEN SAID LOTS 5 AND 6 OF COUNTY
CLERK'S DIVISION OF THE UNSUBDIVIDED ACCRETIONS LYING EAST OF AND ADJOINING THE
SUBDIVIDED PARTS OF BLOCKS 43, 44 AND 54 WITH OTHER LANDS IN KINZIE'S ADDITION
TO CHICAGO IN THE NORTH 1/2 OF SECTION 10, TOWNSHIP 39 NORTH, RANGE 14, EAST OF
THE THIRD PRINCIPAL MERIDIAN (EXCEPTING FROM THE ABOVE DESCRIBED THAT PART OF
LOT 1 DESCRIBED ON EXHIBIT C TO THE FIRST AMENDMENT TO THE GRANT, DECLARATION
AND RESERVATION OF EASEMENTS RECORDED NOVEMBER 10, 1982 AS DOCUMENT 26407240).
PIN: 17-10-202-060
THE "SKYLIGHT PARCEL"
--------------------
THAT PORTION OF LOT 22 IN PAUL'S SUBDIVISION OF THE LAND, PROPERTY AND SPACE IN
PART OF LOTS 5 AND 6 AND THE TRACT MARKED ALLEY LYING BETWEEN SAID LOTS 5 AND 6
OF COUNTY CLERK'S DIVISION OF THE UNSUBDIVIDED ACCRETIONS LYING EAST OF AND
ADJOINING THE SUBDIVIDED PARTS OF BLOCKS 43, 44 AND 54 WITH OTHER LANDS IN
KINZIE'S ADDITION TO CHICAGO IN THE NORTH 1/2 OF SECTION 10, TOWNSHIP 39 NORTH,
RANGE 14, EAST OF THE THIRD PRINCIPAL MERIDIAN, DEPICTED AS THE "RESTRICTED
ZONE", ON SHEET 17 OF THE PLAT OF SUBDIVISION OF SUCH LOT 22.
PART OF PIN: 17-10-202-081
B-A-1
<PAGE>
THE "GARAGE PARCEL"
-------------------
LOT 6 IN PAUL'S SUBDIVISION OF THE LAND, PROPERTY AND SPACE IN PART OF LOTS 5
AND 6 AND THE TRACT MARKED ALLEY LYING BETWEEN SAID LOTS 5 AND 6 OF COUNTY
CLERK'S DIVISION OF THE UNSUBDIVIDED ACCRETIONS LYING EAST OF AND ADJOINING THE
SUBDIVIDED PARTS OF BLOCKS 43, 44 AND 54 WITH OTHER LANDS IN KINZIE'S
ADDITION TO CHICAGO IN THE NORTH 1/2 OF SECTION 10, TOWNSHIP 39 NORTH, RANGE 14,
EAST OF THE THIRD PRINCIPAL MERIDIAN, AND EXCEPTING FROM LOT 6 THAT PART TAKEN
FOR 666 PRIVATE GARAGE CONDOMINIUM RECORDED AS DOCUMENT 26827972, IN COOK
COUNTY, ILLINOIS.
PIN: 17-10-202-084
COMMONLY KNOWN AS 680 NORTH LAKE SHORE DRIVE, CHICAGO, ILLINOIS.
B-A-2
<PAGE>
EXHIBIT C
---------
SCHEDULE OF LESSOR'S CONTRIBUTION (PER SOUARE FOOT)
---------------------------------------------------
TOWARD IMPROVEMENTS TO OPTION AND ROFR SPACE
-----------------------------------------------
C-1
<PAGE>
<TABLE>
<CAPTION>
PERIOD ADJUSTED PERIOD ADJUSTED
ALLOWANCE ALLOWANCE
PER SQUARE FOOT PER SQUARE FOOT
<S> <C> <C> <C> <S> <C> <C> <C>
SEPTEMBER 1996 $ 40.00
OCTOBER 1996 $ 40.00
NOVEMBER 1996 $ 40.00
DECEMBER 1996 $ 40.00
JANUARY 1997 $ 40.80 JANUARY 2002 $ 27.11
FEBRUARY 1997 $ 40.80 FEBRUARY 2002 $ 26.71
MARCH 1997 $ 40.80 MARCH 2002 $ 26.31
APRIL 1997 $ 40.80 APRIL 2002 $ 25.91
MAY 1997 $ 40.80 MAY 2002 $ 25.51
JUNE 1997 $ 40.80 JUNE 2002 $ 25.11
JULY 1997 $ 40.80 JULY 2002 $ 24.72
AUGUST 1997 $ 40.80 AUGUST 2002 $ 24.32
SEPTEMBER 1997 $ 40.80 SEPTEMBER 2002 $ 23.92
OCTOBER 1997 $ 40.80 OCTOBER 2002 $ 23.52
NOVEMBER 1997 $ 40.80 NOVEMBER 2002 $ 23.12
DECEMBER 1997 $ 40.80 DECEMBER 2002 $ 22.72
JANUARY 1998 $ 41.62 JANUARY 2003 $ 22.77
FEBRUARY 1998 $ 41.62 FEBRUARY 2003 $ 22.36
MARCH 1998 $ 41.62 MARCH 2003 $ 21.96
APRIL 1998 $ 41.62 APRIL 2003 $ 21.55
MAY 1998 $ 41.25 MAY 2003 $ 21.14
JUNE 1998 $ 40.88 JUNE 2003 $ 20.74
JULY 1998 $ 40.51 JULY 2003 $ 20.33
AUGUST 1998 $ 40.14 AUGUST 2003 $ 19.92
SEPTEMBER 1998 $ 39.77 SEPTEMBER 2003 $ 19.52
OCTOBER 1998 $ 39.41 OCTOBER 2003 $ 19.11
NOVEMBER 1998 $ 39.04 NOVEMBER 2003 $ 18.70
DECEMBER 1998 $ 38.67 DECEMBER 2003 $ 18.30
JANUARY 1999 $ 39.07 JANUARY 2004 $ 18.25
FEBRUARY 1999 $ 38.69 FEBRUARY 2004 $ 17.83
MARCH 1999 $ 38.32 MARCH 2004 $ 17.42
APRIL 1999 $ 37.94 APRIL 2004 $ 17.00
MAY 1999 $ 37.56 MAY 2004 $ 16.59
JUNE 1999 $ 37.19 JUNE 2004 $ 16.18
JULY 1999 $ 36.81 JULY 2004 $ 15.76
AUGUST 1999 $ 36.44 AUGUST 2004 $ 15.35
SEPTEMBER 1999 $ 36.06 SEPTEMBER 2004 $ 14.93
OCTOBER 1999 $ 35.63 OCTOBER 2004 $ 14.52
NOVEMBER 1999 $ 35.31 NOVEMBER 2004 $ 14.10
DECEMBER 1999 $ 34.94 DECEMBER 2004 $ 13.69
JANUARY 2000 $ 35.25 JANUARY 2005 $ 13.54
FEBRUARY 2000 $ 34.87 FEBRUARY 2005 $ 13.11
MARCH 2000 $ 34.48 MARCH 2005 $ 12.69
APRIL 2000 $ 34.10 APRIL 2005 $ 12.27
MAY 2000 $ 33.72 MAY 2005 $ 11.85
JUNE 2000 $ 33.34 JUNE 2005 $ 11.42
JULY 2000 $ 32.95 JULY 2005 $ 11.00
AUGUST 2000 $ 32.57 AUGUST 2005 $ 10.58
SEPTEMBER 2000 $ 32.19 SEPTEMBER 2005 $ 10.15
OCTOBER 2000 $ 31.80 OCTOBER 2005 $ 9.73
NOVEMBER 2000 $ 31.42 NOVEMBER 2005 $ 9.31
DECEMBER 2000 $ 31.04 DECEMBER 2005 $ 8.88
JANUARY 2001 $ 31.27 JANUARY 2006 $ 8.63
FEBRUARY 2001 $ 30.88 FEBRUARY 2006 $ 8.20
MARCH 2001 $ 30.48 MARCH 2006 $ 7.77
APRIL 2001 $ 30.09 APRIL 2006 $ 7.34
MAY 2001 $ 29.70 MAY 2006 $ 6.90
JUNE 2001 $ 29.31 JUNE 2006 $ 6.47
JULY 2001 $ 28.92 JULY 20O6 $ 6.04
AUGUST 2001 $ 28.53 AUGUST 2006 $ 5.61
SEPTEMBER 2001 $ 28.14 SEPTEMBER 2006 $ 5.18
OCTOBER 2001 $ 27.75 OCTOBER 2006 $ 4.76
NOVEMBER 2001 $ 27.36 NOVEMBER 2006 $ 4.32
DECEMBER 2001 $ 26.97 DECEMBER 2006 $ 3.88
JANUARY 2007 $ 3.52
FEBRUARY 2007 $ 3.08
MARCH 2007 $ 2.64
APRIL 2007 $ 2.20
MAY 2007 $ 1.76
JUNE 2007 $ 1.32
JULY 2007 $ 0.88
AUGUST 2007 $ 0.44
</TABLE>
<PAGE>
EXHIBIT D
---------
FORM OF SUBORDINATION, NON-DISTURBANCE
--------------------------------------
AND ATTORNMENT AGREEMENT
------------------------
D-1
<PAGE>
July 29, 1996 11:26am
ANBCORE.SUB
PREPARED BY:
STEPHEN H. MALATO, ESQ. Address:
Hinshaw & Culbertson --------------------------
222 North LaSalle Street --------------------------
Chicago, Illinois 60601 --------------------------
SUBORDINATION, NON-DISTURBANCE AND
----------------------------------
ATTORNMENT AGREEMENT
--------------------
THIS Subordination, Non-Disturbance and Attornment Agreement made this ___
day of ____________, 19__ between AMERICAN NATIONAL BANK & TRUST COMPANY OF
CHICAGO, a national banking association ("Mortgagee") and ______________________
_______________, a ______________________ Corporation ("Tenant").
RECITALS
--------
A. Pursuant to the terms and conditions of lease agreement dated _________,
19__ between _______________, as landlord ("Landlord") and Tenant, as tenant,
("Lease Agreement"), Tenant leased from Landlord the premises legally described
on Exhibit "A" attached hereto and made a part hereof ("Leased Premises").
B. To evidence a loan made by Mortgagee to ________________________________
("Mortagor") in the principal amount of ______________________ DOLLARS ($______)
("Loan"), Mortgagor executed its note dated ______________, 19__, payable to the
order of Mortgagee, and as security, its mortgage encumbering the premises
legally described on Exhibit "B" attached hereto and made a part hereof
("Mortgaged Premises"), in favor of Mortgagee, recorded in the Office of the
Recorder of Deeds of _______ County, Illinois as Document Number ___________
("Mortgage"). The Leased Premises is a part of the Mortgaged Premises.
C. It is a condition of the documents which evidence and secure the Loan
("Loan Documents") that all leases and other occupancy agreements for space in
the Mortgaged Premises are and shall be subordinated to the lien of the
Mortgage.
D. Tenant has requested that Mortgagee agree that upon Tenant's performance
of all of the terms, covenants, conditions and agreements required of it
pursuant to the Lease Agreement, Tenant's possession of the Leased Premises will
not be disturbed.
<PAGE>
NOW, THEREFORE, in consideration of the mutual covenants, agreements and
promises herein contained, the sufficiency of which is hereby acknowledged, IT
IS HEREBY AGREED AS FOLLOWS:
1. The Lease Agreement is and shall continue hereafter to be subject and
subordinate to the lien of the Mortgage and the other Loan Documents, subject,
however, to the provisions of this agreement.
2. In the event that Mortgagee or its successors, assigns, nominees or any
other party claiming by, through or under Mortgagee (collectively "Successors")
shall take possession of the Leased Premises by foreclosure, deed in lieu of
foreclosure or otherwise and Tenant is not then in default (beyond any grace
period set forth in the Lease Agreement for curing the same) of any covenant or
condition of the Lease Agreement to be performed by Tenant, Tenant shall
peaceably hold and enjoy the Leased Premises for the remainder of the unexpired
term (including any extensions thereof), which possession shall be without
hinderance or interruption.
3. Tenant shall not be joined as a party-defendant in any action or
proceeding which may be instituted or taken by Mortgagee by reason of any
default under the Loan Document.
4. In the event Mortgagee or Successors shall succeed to the rights of
Landlord pursuant to the Lease Agreement:
a). Tenant will attorn to Mortgagee or Successors and will perform,
for the benefit of Mortgagee or Successors, all of the terms,
covenants and conditions contained in the Lease Agreement to be
kept and performed by it and shall, at the request of Mortgagee
or Successors, execute and deliver a written agreement of
attornment; and
b). Mortgagee or Successors shall not be (i) liable for any act or
omission of any prior landlord (including Landlord); (ii) subject
to any offsets or defenses which Tenant may have against Landlord
or any prior landlord; (iii) bound by any prepayment of rent or
additional rent which Tenant may have paid for more than the
current month to Landlord or any prior landlord, or (iv), bound
by any amendment or change in any material term of the Lease
Agreement or by any waiver of any material obligation under the
Lease Agreement unless the Mortgagee has, by written instrument,
agreed to such amendment or change of waiver.
5. The term "Mortgagee" shall mean the holder of Mortgagee (as the same may
be assigned from time to time) and the term "Mortgage" shall mean Mortgage (as
the same may be renewed, modified, replaced, extended or consolidated with
mortgages placed on Entire Premises, dated subsequent to the date of Lease
Agreement).
<PAGE>
6. Any and all notices to be given pursuant hereto shall be sufficient if
in writing and delivered personally or mailed by United States certified or
registered mail, postage prepaid, addressed to Mortgagee and Tenant as follows:
If to Mortgagee, at: 33 North LaSalle Street, Chicago, Illinois
60602, with a copy to Hinshaw & Culberton, 222 North LaSalle
Street, Chicago, Illinois 60601, Attention: Stephen A. Malato;
and
If to Tenant, at: _________________________________, with a copy
thereof to ___________________________.
All notices served by mail shall be deemed to have been received three (3) days
following the postmark dates thereof.
7. This agreement and the covenants conditions and promises herein
contained shall inure to the benefit of and be binding Mortgagee and Tenant, and
their respective successors, assigns, grantees and legal representatives.
IN WITNESS WHEREOF, Mortgagee and Tenant have caused this agreement to be
executed by their duly authorized officers and their respective corporate seals
to be affixed hereto, as of the day and year first above written.
Mortgagee:
---------
AMERICAN NATIONAL BANK & TRUST
COMPANY OF CHICAGO, a national banking
association
By____________________________________
Title:
ATTEST:
_____________________________
Title:
Tenant:
------ ________________________
By:_____________________
Title:
<PAGE>
STATE OF _______________ )
) SS.
COUNTY OF ______________ )
The undersigned, a Notary Public in and for said County, in the State
aforesaid, DOES HEREBY CERTIFY that ____________________, of AMERICAN NATIONAL
BANK & TRUST COMPANY OF CHICAGO, a national banking association ("Mortgagee"),
personally known to me to be the same person whose name is subscribed to the
foregoing instrument respectively, appeared before me this day in person and
acknowledged that he signed and delivered the said instrument as his own free
and voluntary act, and as the free and voluntary act of Mortgagee, for the uses
and purposes therein set forth.
GIVEN under my hand and Notarial Seal this _____ day of ____________, 1991.
---------------------------------------
NOTARY PUBLIC
My Commission Expires_______________.
<PAGE>
STATE OF _______________ )
) SS.
COUNTY OF ______________ )
The undersigned, a Notary Public in and for said County, in the State
aforesaid, DOES HEREBY CERTIFY that ______________, of ________________________
("Tenant"), personally known to me to be the same person whose name is
subscribed to the foregoing instrument appeared before me this day in person and
acknowledged that he signed and delivered the said instrument as his own free
and voluntary act, and as the free and voluntary act of Tenant, for the uses and
purposes therein set forth.
GIVEN under my hand and Notarial Seal this _____ day of ____________, 1991.
---------------------------------------
NOTARY PUBLIC
My Commission Expires_______________.
<PAGE>
DESCRIPTION OF LEASED PREMISES
EXHIBIT "A"
<PAGE>
LEGAL DESCRIPTION OF ENTIRE PREMISES
EXHIBIT "B"