Illinois-Itasca-Old Thorndale Avenue Lease - Centerpoint Properties Corp. and Playboy Enterprises Inc.
INDUSTRIAL BUILDING LEASE
LANDLORD:
CENTERPOINT PROPERTIES CORPORATION,
a Maryland corporation
TENANT:
PLAYBOY ENTERPRISES, INC.
a Delaware corporation
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TABLE OF CONTENTS
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ARTICLE I Lease Terms............................................... 1
Section 1.1. Definitions............................................... 1
Section 1.2. Significance of Definitions............................... 4
Section 1.3. Enumeration of Exhibits................................... 4
ARTICLE II Premises.................................................. 4
Section 2.1. Lease..................................................... 4
Section 2.2. Common Areas.............................................. 4
ARTICLE III Term...................................................... 5
Section 3.1. Term...................................................... 5
Section 3.2. Memorandum of Lease Term.................................. 5
ARTICLE IV Construction of Improvements.............................. 5
Section 4.1. Landlord's Construction Obligation........................ 5
Section 4.2. Plans Approval............................................ 5
Section 4.3. Completion................................................ 6
Section 4.4. Tenant's Inspection Rights................................ 6
Section 4.5. Changes................................................... 6
Section 4.6. Punchlist................................................. 7
Section 4.7. Representatives........................................... 7
Section 4.8. Warranty.................................................. 7
Section 4.9. Damages for Late Completion............................... 8
ARTICLE V Rent...................................................... 8
Section 5.1. Base Rent................................................. 8
Section 5.2. Base Rent Adjustment...................................... 8
Section 5.3. Interest and Late Charges on Late Payments................ 11
ARTICLE VI Utilities................................................. 11
Section 6.1. Utilities................................................. 11
ARTICLE VII Use....................................................... 11
Section 7.1. Use....................................................... 11
Section 7.2. Prohibited Uses........................................... 12
Section 7.3. No Implied Permission..................................... 12
Section 7.4. Rules and Regulations..................................... 12
ARTICLE VIII Maintenance of Premises................................... 12
Section 8.1. Maintenance............................................... 12
Section 8.2. Governmental Requirements................................. 13
Section 8.3. Tenant's Responsibilities................................. 13
ARTICLE IX Insurance................................................. 13
Section 9.1. Coverage Required......................................... 13
Section 9.2. Policies.................................................. 14
Section 9.3. Subrogation............................................... 15
Section 9.4. Miscellaneous Insurance Provisions........................ 15
Section 9.5. Landlord's Insurance...................................... 16
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ARTICLE X Damage or Destruction.................................... 17
Section 10.1. Total Destruction........................................ 17
Section 10.2. Partial Destruction...................................... 17
Section 10.3. Lease Termination........................................ 17
ARTICLE XI Liens.................................................... 17
Section 11.1. Lien Claims.............................................. 17
Section 11.2. Landlord's Right to Cure................................. 18
ARTICLE XII Tenant Alterations....................................... 18
Section 12.1. Alterations.............................................. 18
Section 12.2. Ownership of Alterations................................. 19
Section 12.3. Tenant Signs............................................. 19
Section 12.4. Environmental Impact..................................... 19
ARTICLE XIII Condemnation............................................. 19
Section 13.1. Taking: Lease to Terminate............................... 19
Section 13.2. Taking: Lease to Continue................................ 19
Section 13.3. Tenant's Claim........................................... 20
ARTICLE XIV Assignment - Subletting by Tenant........................ 20
Section 14.1. No Assignment, Subletting or Other Transfer.............. 20
Section 14.2. Operation of Law......................................... 20
Section 14.3. Excess Rental............................................ 20
Section 14.4. Merger or Consolidation.................................. 20
Section 14.5. Unpermitted Transaction.................................. 21
ARTICLE XV Financial Statements..................................... 21
Section 15.1. Financial Statements..................................... 21
ARTICLE XVI Indemnity for Litigation................................. 21
Section 16.1. Indemnity for Litigation................................. 21
Section 16.2. Landlord's Indemnity..................................... 22
ARTICLE XVII Estoppel Certificates.................................... 22
Section 17.1. Estoppel Certificate..................................... 22
ARTICLE XVIII Inspection of Premises................................... 22
Section 18.1. Inspections.............................................. 22
Section 18.2. Landlord Signs........................................... 22
ARTICLE XIX Fixtures................................................. 22
Section 19.1. Building Fixtures........................................ 22
Section 19.2. Tenant's Equipment....................................... 23
Section 19.3. Removal of Tenant's Equipment............................ 23
ARTICLE XX Default.................................................. 23
Section 20.1. Event of Default......................................... 23
Section 20.2. Bankruptcy............................................... 25
Section 20.3. Re-entry................................................. 26
ARTICLE XXI Landlord's Performance of Tenant's Covenants............. 26
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SECTION 21.1. Landlord's Right to Perform Tenant's Obligations......... 26
ARTICLE XXII Exercise of Remedies..................................... 26
Section 22.1. Cumulative Remedies...................................... 26
Section 22.2. No Waiver................................................ 26
Section 22.3. Equitable Relief......................................... 26
ARTICLE XXIII Subordination to Mortgages............................... 27
Section 23.1. Subordination............................................ 27
Section 23.2. Mortgage Protection...................................... 27
ARTICLE XXIV Indemnity and Waiver..................................... 28
Section 24.1. Tenant Indemnity......................................... 28
Section 24.2. Waiver of Claims......................................... 29
Section 24.3. Landlord's Indemnity..................................... 29
ARTICLE XXV Surrender................................................ 29
Section 25.1. Condition................................................ 29
Section 25.2. Removal of Tenant's Equipment............................ 30
Section 25.3. Holdover................................................. 30
ARTICLE XXVI Covenant of Quiet Enjoyment.............................. 30
Section 26.1. Covenant of Quiet Enjoyment.............................. 30
ARTICLE XXVII No Recording............................................. 30
Section 27.1. No Recording............................................. 30
ARTICLE XXVIII Notices.................................................. 31
Section 28.1. Notices.................................................. 31
ARTICLE XXIX Covenants Run with Land.................................. 31
Section 29.1. Covenants................................................ 31
Section 29.2. Release of Landlord...................................... 31
ARTICLE XXX Environmental Matters.................................... 32
Section 30.1. Defined Terms............................................ 32
Section 30.2. Tenant's Covenants with Respect to Environmental Matters. 33
Section 30.3. Conduct of Tenant........................................ 33
Section 30.4. Exacerbation............................................. 34
Section 30.5. Rights of Inspection..................................... 34
Section 30.6. Copies of Notices........................................ 34
Section 30.7. Tests and Reports........................................ 35
Section 30.8. Indemnification.......................................... 35
Section 30.9. Tenant Representations with respect to Environmental
Matters................................................ 36
ARTICLE XXXI Expansion Option for Expansion Space..................... 37
Section 31.1. Expansion Option......................................... 37
ARTICLE XXXII Right of First Offer for Expansion Space................. 37
Section 32.1. Right of First Offer..................................... 37
ARTICLE XXXIII Renewal Option........................................... 38
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Section 33.1. Renewal Option........................................... 38
Section 33.2. "As Is" Condition........................................ 39
Section 33.3. Amendment................................................ 39
Section 33.4. Termination.............................................. 39
Section 33.5. No Commissions........................................... 39
ARTICLE XXXIV Security Deposit......................................... 39
Section 34.1. Security Deposit......................................... 39
ARTICLE XXXV Miscellaneous............................................ 40
Section 35.1. Captions................................................. 40
Section 35.2. Severability............................................. 40
Section 35.3. Applicable Law........................................... 40
Section 35.4. Amendments in Writing.................................... 40
Section 35.5. Relationship of Parties.................................. 40
Section 35.6. Brokerage................................................ 40
Section 35.7. No Accord and Satisfaction............................... 41
Section 35.8. Joint Effort............................................. 41
Section 35.9. Waiver of Jury Trial..................................... 41
Section 35.10. Time..................................................... 41
Section 35.11. Landlord's Consent....................................... 41
Section 35.12. No Partnership........................................... 41
Section 35.13. Landlord's Liability..................................... 41
Section 35.14. Landlord Rights.......................................... 41
Section 35.15. Rent Absolute............................................ 41
Section 35.16. Tenant Authority......................................... 42
Section 35.17. Purchase Contingency..................................... 42
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INDUSTRIAL BUILDING LEASE
-------------------------
THIS LEASE, made as of this 6th day of September, 1996 between CENTERPOINT
PROPERTIES CORPORATION, a Maryland corporation (hereinafter referred to as
"LANDLORD"), and PLAYBOY ENTERPRISES, INC., a Delaware corporation (hereinafter
referred to as "TENANT").
ARTICLE I
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LEASE TERMS
-----------
Section 1.1. Definitions. In addition to the other terms, which are
elsewhere defined in this Lease, the following terms and phrases, whenever used
in this Lease shall have the meanings set forth in this Subsection, and only
such meanings, unless such meanings are expressly contradicted, limited or
expanded elsewhere herein.
A. Area of the Building: 128,867 square feet of space.
B. Area of the Premises: 106,038 square feet of space.
C. Area of the Warehouse within the Premises: 70,908 square feet of space.
D. Base Rent Schedule:
Period Annual Base Rent
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Commencing on the Warehouse
Commencement Date and ending
on the day preceding the Office
Commencement Date $403,466.52
Commencing on the Office
Commencement Date and ending
on the last day of Lease Year 5 $698,790.48
Commencing on the first day of
Lease Year 6 and ending on the
last day of Lease Year 10 $802,707.72
E. Estimated Office Commencement Date: December 1, 1997.
F. Estimated Warehouse Commencement Date: June 1, 1997.
G. Estimated Termination Date: November 30, 2007.
H. Force Majeure: any event or circumstance which is beyond the control
of Landlord including, without limitation, acts of God or the public
enemy, governmental restrictions or actions, fire or other casualty,
accidents, unavailability of fuel, power, supplies or
materials, unusually adverse weather conditions, or the passage or
application of any
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Legal Requirements or moratorium of any Governmental Authority which is not
now in effect which has the effect of preventing or delaying progress on
the Initial Improvements and Tenant Delay.
I. Force Majeure Delay: any interruption or delay in the progress of the
Initial Improvements which is the result of Force Majeure. Any delay which
is the result of Force Majeure shall be deemed to be a Force Majeure Delay
notwithstanding that Landlord or its contractor with respect to the time
period for which the Force Majeure Delay is being claimed is concurrently
delayed by events within its control.
J. Governmental Authority: any federal, regional, state, county or municipal
government (including, without limitation, any agency, authority,
subdivision, department or bureau thereof.
K. Initial Improvements: collectively, the improvements contemplated in the
Plans, consisting of (i) the portion of the Building containing
approximately 106,038 square feet of space, of which approximately 35,130
square feet will be office space, and (ii) a parking lot providing for the
parking of not less than 275 automobiles, to be constructed on the Land
approximately as depicted on the site plan attached hereto as Exhibit "A"
and by this reference incorporated herein.
L. Initial Monthly Rent Adjustment Deposit: $1,200.00 or such amount as
determined by expense review prior to Warehouse Commencement Date.
M. Initial Term: The period commencing as of the Office Commencement Date and
ending on the last day of the tenth (10th) Lease Year thereafter.
N. Landlord's Broker: None.
O. Landlord's Mailing Address:
c/o 401 North Michigan Avenue
Chicago, Illinois 60611
Attn: Mr. Michael M. Mullen
P. Legal Requirements: (i) any and all laws, codes, ordinances, requirements,
standards, plats, plans, criteria, orders, directives, rules and
regulations of any Governmental Authority affecting the improvement,
alteration, use, maintenance, operation, occupancy, security, health,
safety and environmental condition of the Project or any part thereof (or
any occupants therein, as the context requires) including, without
limitation any Environmental Laws (as hereinafter defined), and (ii) any
and all covenants, restrictions, conditions, easements and other agreements
of record affecting the Project and the Reciprocal Easement Agreement, as
amended from time to time, and any documents, rules, regulations, standards
or criteria set forth or referenced therein or promulgated by the Landlord
or any governing body or entity exercising jurisdiction over the Project,
in any case, whether in force at the Commencement Date or passed, enacted
or imposed at some time in the future, and shall include all permits,
licenses, certificates, authorizations and approvals required in connection
with any of the foregoing.
Q. Plans: the plans and specifications to be prepared by the Project Architect
for the construction of the Building.
R. Preliminary Plans: the plans and specifications described on Exhibit "C"
attached hereto and by this reference made a part hereof.
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S Project Architect: Cornerstone Architects, Inc.
T. Reciprocal Easement Agreement: such easements over, upon and across
the Project as are reasonably required to provide for ingress, egress,
drainage, detention, access to utilities and services, maintenance of
secured common elements and services and the sharing of expenses
thereof, existence of immaterial encroachment and similar rights
customary among several parcels comprising a single commercial
development.
U. Security Deposit: one monthly Rent payment.
V. Substantial Completion or Substantial Completion Date: the earlier to
occur of (i) the date on which Landlord receives a permanent,
temporary or conditional certificate of occupancy from the Village to
occupy the warehouse portion of the Premises or the warehouse and
office portion of the Premises, as applicable; provided, however, if
such certificate is not issued due to the failure to complete any work
expressly excluded in the Plans or not required by any Governmental
Authority as of the time the building permit is issued, such
certificate shall be deemed to have issued, (ii) the date the Project
Architect states in writing that the Initial Improvements are
substantially completed in accordance with the Plans (as such Plans
may be revised from time to time in accordance with the terms of this
Lease), or (iii) the date on which Tenant occupies the Premises or any
portion thereof. In the event there is a dispute as to Substantial
Completion, the Project Architect shall determine, in the exercise of
its reasonable judgment, whether or not the Initial Improvements are
substantially completed as required herein, and the parties hereto
agree to be bound by such decision.
W. Tenant Delay: any interruption or delay in the progress of the Initial
Improvements which is the result of: (i) the failure of Tenant to
approve the Plans or any portion thereof; (ii) changes in construction
requested by Tenant or any member of the Tenant Group; (iii) the
performance or non-performance of any work at, or services with
respect to, the Premises by Tenant or any member of the Tenant Group;
or (iv) any other act or omission of Tenant, any member of the Tenant
Group or any person, firm or entity claiming by, through or under any
of them.
X. Tenant Group: any or all of Tenant's agent, employees,
representatives, contractors, workmen, mechanics, suppliers,
customers, guests, licensees, invitees, sublessees, assignees and all
of their respective successors and assigns or any party claiming by,
through or under any of them.
Y. Tenant's Broker: Paine/Wetzel Associates, Inc.
Z. Tenant's Mailing Address:
680 North Lake Shore Drive
Chicago, Illinois 60611
Attention: General Counsel
AA. Tenant's Proportion or Proportionate Share: The percentage obtained by
dividing the Area of the Warehouse within the Premises by the Area of
the Building until the Office Commencement Date, and from and after
the Office Commencement Date, the percentage obtained by dividing the
Area of the Premises by the Area of the Building.
AB. Term: The Initial Term as same may be extended or sooner terminated.
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AC. Use: Any use permitted by all Legal Requirements.
AD. Village: Village of Itasca.
Section 1.2. Significance of Definitions. Each reference in this Lease to
any of the Definitions contained in Section 1.1 of this Article shall be deemed
and construed to incorporate all of the terms provided under each such
Definition.
Section 1.3. Enumeration of Exhibits. The exhibits in this Section and
attached to this Lease are incorporated in this Lease by this reference and are
to be construed as a part of this Lease.
Exhibit "A" - Site Plan
Exhibit "B" - Legal Description of Land
Exhibit "C" - Preliminary Plans and Specifications
Exhibit "D" - Form of Estoppel Certificate
ARTICLE II
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Premises
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Section 2.1. Lease. Landlord, for and in consideration of the rents herein
reserved and of the covenants and agreements herein contained on the part of
Tenant to be kept, observed and performed, does by these presents, lease to
Tenant, and Tenant hereby leases from Landlord, the demised premises
("Premises"), being depicted in the site plan attached hereto as Exhibit "A" in
the building to be constructed on Old Thorndale Road in the Village of Itasca,
DuPage County, Illinois (hereinafter referred to as the "Building"), on a
portion of the real estate legally described on Exhibit "B" attached hereto and
by this reference incorporated herein (all of said real estate is hereinafter
referred to as the "Land"). The Premises shall consist of the portion thereof
designated on the site plan as warehouse space ("Warehouse Space") and the
portion thereof designated on the site plan as office space ("Office Space").
The demise of the Premises is subject to the Legal Requirements. The Land,
Common Areas (defined in Section 2.2 below), Building and other buildings and
improvements now or hereafter constructed on the Land are hereinafter
collectively referred to as the "Project".
Section 2.2. Common Areas.
A. Tenant has the nonexclusive right to use in common with Landlord and
other tenants in the Project, subject to reasonable rules from time to time made
by Landlord of which Tenant is given notice, the following areas now or
hereafter a part of the Project (collectively, "Common Areas"): (i) Building
Common Area. The roof, common stairways, accessways, loading docks, platforms
and passageways thereto, if any; (ii) Floor Common Area. If the Premises
includes less than the entire rentable area of any floor, the common lobbies,
hallways, toilets and other common facilities located on such floor, if any; and
(iii) Land Common Area. Common walkways, sidewalks and driveways necessary for
access to the Building, utilities, landscaping and lawn areas and parking spaces
or areas from time to time maintained on the portion of the Land intended to be
used by the tenants in the Building and not the parking spaces or areas from
time to time maintained on the Land but intended to be used by tenants in other
buildings in the Project.
B. Landlord reserves the right from time to time, without unreasonable
interference with Tenant's use: To install, use, maintain, repair and replace
pipes, ducts, conduits, wires and appurtenant meters and equipment for service
to other parts of the Building and Project above the ceiling surfaces, below the
floor surfaces, within the walls and in the central core areas, and to relocate
any pipe, ducts, conduits, wires and appurtenant meters and equipment included
in the Premises which are so located or located elsewhere outside the Premises;
to change
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the boundary lines of the Land; to establish and enforce such reasonable rules
and regulations as Landlord deems necessary or desirable in the operation of the
Project; and to alter, relocate, close or temporarily suspend the use of any
Common Area. Landlord reserves the right to grant easements on the Land, to
allow third parties to use all internal roadways constructed on the Project, to
make boundary adjustments to the Land, to use the Land for such purposes as
Landlord deems necessary or desirable, including, but not limited to the
installation of cellular dishes or other similar communication devices or
towers on any Common Area with the consent of Tenant, which consent shall not be
unreasonably withheld or delayed, except that Tenant's consent shall not be
required if any such dishes, devices or towers are installed or constructed on
the roof (but in no event shall any installation on the roof exceed 20 feet
above the height of the roof), and to dedicate for public use portions of the
Land, including without limitation any public streets or any other improvements,
without Tenant's consent, provided that no such grant or dedication shall
materially interfere with Tenant's use of the Premises or otherwise cause Tenant
to incur any additional cost or expense in excess of $100.00.
ARTICLE III
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Term
----
Section 3.1. Term. The initial Term of this Lease shall commence with
respect to the Warehouse Space on the date (hereinafter referred to as the
"Warehouse Commencement Date") which is the Substantial Completion Date of the
Warehouse Space, which date is estimated to be the Estimated Warehouse
Commencement Date. The Initial Term of this Lease shall commence with respect
to the Office Space on the date (hereinafter referred to as the "Office
Commencement Date") which is the Substantial Completion Date of the Office
Space, which date is estimated to be the Estimated Office Commencement Date. The
Initial Term shall end on the last day of the tenth (10th) Lease Year after the
Office Commencement Date unless sooner terminated as herein set forth. The term
"Lease Year" when used in this Lease shall mean a twelve (12) month period
commencing (i) as to the first Lease Year, on the date (hereinafter referred to
as the "First Lease Year Commencement Date") which is the Office Commencement
Date if same is the first (1st) day of a calendar month or the first (1st) day
of the next full calendar month after the Office Commencement Date if same does
not occur on the first (1st) day of a calendar month, and (ii) as to subsequent
Lease Years, on the annual anniversary date of the First Lease Year Commencement
Date. Concurrent with the actual Office Commencement Date and Warehouse
Commencement Date of this Lease, Tenant shall deliver to Landlord an estoppel
certificate in accordance with Article XVII hereof.
Section 3.2. Memorandum of Lease Term. Landlord and Tenant shall execute
an instrument fixing the actual Commencement Date and termination of the Initial
Term of this Lease at the request of either Landlord or Tenant.
ARTICLE IV
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Construction of Improvements
----------------------------
Section 4.1. Landlord's Construction Obligation. Subject to the terms and
conditions of this Article IV, Landlord shall, at its sole cost and expense,
construct or cause to be constructed the Initial Improvements on the Land in
accordance with the Plans. Landlord agrees that all services and work performed
in connection with the Initial Improvements shall be done in a good and
workmanlike manner using only new material, and shall be performed
substantially in accordance with applicable Legal Requirements.
Section 4.2. Plans Approval. Tenant hereby approves the Preliminary Plans.
Landlord shall cause the Project Architect to prepare Plans consistent with the
Preliminary Plans and otherwise acceptable to
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Landlord. The Plans are subject to Tenant's approval (which shall not be
unreasonably withheld or delayed), and if Tenant does not approve same, Tenant
shall advise Landlord in reasonable detail of the reasons for such disapproval.
Tenant shall comment on the Plans (or any component thereof submitted to Tenant)
and each revision thereof within five (5) business days after receipt from
Landlord. In the event that Tenant does not disapprove of the Plans (or any
component thereof submitted to Tenant) within said five (5)-day business period,
the Plans (or applicable component thereof) shall be deemed approved. Tenant may
not object to any changes as may be incorporated in the Plans necessary to
obtain the approval of the Village; provided, however, Tenant's review of the
Plans is for the limited purpose of reviewing office layouts, floor plans,
location of electrical and phone outlets and the like. In no event shall
Tenant's review and approval of the Plans be deemed an approval or acceptance of
Landlord's construction specifications. Prior to Tenant's approval for the
Plans, Tenant may change the space plan and Tenant shall not pay the cost of
redrafting the space plan, however any changes resulting in an increase in the
cost of construction shall be paid by Tenant as provided in Section 4.5 below.
Section 4.3. Completion. Landlord shall diligently proceed with the
construction of the Initial Improvements upon approval of Landlord, Tenant and
the Village. Landlord shall use its best efforts to substantially complete the
Warehouse Space and parking for approximately 75 automobiles and deliver
possession thereof to Tenant on or before the Estimated Warehouse Commencement
Date and complete the Office Space and the remaining parking spaces and deliver
possession thereof to Tenant on or before the Estimated Office Commencement
Date: provided, however, with respect to the Warehouse Space and the Office
Space, if construction is delayed because of any Force Majeure Delays, then the
time of completion of such construction shall be extended for the additional
time caused by such Force Majeure Delays without liability on the part of
Landlord, except as set forth in Section 4.9 below.
Section 4.4. Tenant's Inspection Rights. Landlord shall exercise
reasonable efforts to keep Tenant advised with respect to the progress of the
construction of the Initial Improvements and the estimated dated of Substantial
Completion, and Landlord shall notify Tenant in writing as soon as Substantial
Completion occurs as provided herein. During the construction of the Initial
Improvements, Tenant shall have the right to inspect to Premises to monitor the
progress of construction of the Initial Improvements; provided, however, that
such right may not be exercised unless Tenant has: (i) given Landlord at least
one (1) business days' prior written notice of the date and time Tenant intends
to exercise such inspection right; and (ii) Tenant and/or Tenant's architect
are accompanied at all times during the course of said inspection by Landlord
and Landlord's representative or the Project Architect.
Section 4.5. Changes. If any material or equipment specified in the Plans
cannot be obtained, Landlord shall have the right to specify a similar
alternative, subject to Tenant's approval, which approval shall not be
unreasonably withheld or delayed. Tenant may propose one or more changes to the
Plans to Landlord any time before the Substantial Completion Date, subject to
the approval of Landlord (which approval will not be unreasonably withheld or
delayed) and the Village. As promptly as reasonably practicable after the
receipt and approval thereof, Landlord shall provide Tenant with a written
estimate of the Tenant Delay in the Substantial Completion Date and the amount
of the additional cost to complete the Initial Improvements which will result
from such change, which costs shall be: (i) the cost of all materials, supplies
and labor used or supplied in making the proposed change, including general
conditions and any contractor's fees (which general conditions and contractor's
fees shall be fifteen percent (15%) of such costs); (ii) any architect and
engineer fees; (iii) soft costs; and (iv) fees and expenses of architects,
engineers and other third party consultants in connection with review or
approval of changes in Plans. If Tenant fails to approve of the revised Plans
and associated estimate within five (5) business days after delivery of the
same, Tenant shall be deemed to have abandoned its request for such change, and
the Initial Improvements shall be constructed in accordance with the then
existing Plans. If Tenant approves the revised Plans and associated estimate
within said five (5)-day business period by signing and returning a copy of
Landlord's estimate, Landlord shall cause the Initial Improvements to be
constructed in accordance with the Plans as so revised. Tenant shall pay
Landlord the amount of such additional costs within thirty (30) days after
Landlord submits to Tenant a bill for such additional costs as are then due and
payable from time to time. In no event shall Landlord have any obligation to
continue any work relating to such changes unless Tenant has paid Landlord the
amount billed to Tenant in full within said thirty (30) day period. Further, in
the event that the additional costs are not paid within said thirty (30)
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day period, Tenant shall be deemed to have abandoned its request for such
changes and the Initial Improvements shall be constructed in accordance with the
then existing Plans, but Tenant shall not be relieved of its obligation to pay
for the portion of the work performed to the date such request is abandoned.
Unless requested in writing by Tenant to the contrary, Landlord shall continue
with construction of the Initial Improvements according to the then existing
Plans during the pendency of any proposed change in the Plans until such change
and cost estimate are approved by Landlord and Tenant as provided above. Any
halt in construction requested in writing by Tenant shall constitute a Tenant
Delay hereunder. If Tenant requests a change to the Plans pursuant to this
Section 4.5, and Tenant does not ultimately approve of the resulting revised
Plans or cost estimates, Tenant shall promptly reimburse Landlord, as Additional
Rent, for any reasonable costs and expenses resulting from such requested
changes incurred by Landlord. Landlord may make changes to the Plans without
Tenant's consent, provided that: (i) such changes (a) will not create any
additional monetary obligation for Tenant under this Lease, (b) are in material
conformity with the Plans (as may have been previously revised by permissible
Tenant and/or Landlord changes thereto), and (c) will not decrease the quality
of any component of the Initial Improvements; or (ii) such changes are required
by any applicable Legal Requirements.
SECTION 4.6. PUNCHLIST. Before Tenant takes occupancy of the Premises but
no later than thirty (30) business days after the Substantial Completion Date,
Landlord, Project Architect and Tenant shall conduct an inspection of the
Premises, and work in good faith to jointly prepare a punchlist (hereinafter
referred to as the "PRE-OCCUPANCY PUNCHLIST"). Within sixty (60) days following
the date Tenant first occupies all or any portion of the Premises, Landlord, the
Project Architect and Tenant shall conduct an additional inspection of the
Premises, and work in good faith to jointly prepare a supplement to the Pre-
Occupancy Punchlist containing such items as may be difficult to discover or
ascertain prior to Tenant's occupancy, but excluding: (i) any items theretofore
corrected by Landlord; and (ii) any damage caused by any act or omission of
Tenant or any member of the Tenant Group or any party claiming by, through or
under any of them (the Pre-Occupancy Punchlist, as so supplemented is
collectively referred to as the "FINAL PUNCHLIST"). Except as otherwise
expressly provided in this Lease, any items not on the Final Punchlist shall be
deemed accepted by Tenant, excluding latent defects with respect to the Initial
Improvements that become definite and ascertainable, and to which landlord is
notified of in writing, within one (1) year following the Substantial Completion
Date. Tenant shall provide reasonable access to Landlord, its employees, agents
and contractors for purposes of the repair and correction of any punchlist
items. Landlord shall complete all Final Punchlist items as soon as is
reasonably practicable after such Final Punchlist items are finally determined,
not to exceed thirty (30) days, subject to extension due to any Force Majeure
Delays; provided, however, in the absence of Force Majeure Delays, with respect
to any Final Punchlist items that are not reasonably capable of being completed
within said thirty (30)-day period, Landlord shall be deemed in compliance with
Section 4.6 as long as Landlord commences the correction of the applicable Final
Punchlist items within said thirty (30)-day period and thereafter diligently
prosecutes such items to completion.
SECTION 4.7. REPRESENTATIVES. Landlord designates Fred Reynolds or Michael
M. Mullen as its representative for all purposes of this Article IV. Tenant
designates Sue Shoemaker and Robert J. Terry as its representative(s) for all
purposes of this Article IV. Wherever the terms of this Article IV require any
notice to be given to or by a party, or any determination or action to be made
or taken by a party, the representative(s) of each party shall act for and on
behalf of such party, and the other party shall be entitled to rely thereon.
Either party may designate one or more substitute representatives for all or a
specified portion of the provisions of this Article IV, subject to notice to the
other party of the identity of such substitute representative(s).
SECTION 4.8. WARRANTY. Landlord represents that it shall obtain (i) a
warranty against defective materials and workmanship with respect to the Initial
Improvements from FCL Builders, Inc., for a period of one (1) year from
Substantial Completion of the Initial Improvements; and (ii) a warranty against
defects in the roof for a period of fifteen (15) years from Substantial
Completion thereof from the roof manufacturer. Subject to Section 4.6 hereof,
Tenant shall notify Landlord in writing of any defective condition occurring
with respect to the Initial Improvements promptly following Tenant's discovery
thereof and Landlord shall request that the party issuing the warranty perform
any remedial work required to be performed under such warranty.
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SECTION 4.9. DAMAGES FOR LATE COMPLETION.
---------------------------
A. In the event that the Warehouse Commencement Date does not occur on or
before August 1, 1997, Landlord shall reimburse Tenant for actual damages
incurred by Tenant which damages are hereby agreed by the parties to be (i)
$50,000.00 on August 1, 1997, plus (ii) $8,000.00 per week thereafter until the
Warehouse Commencement Date, and (iii) the amount of rent that Tenant is
required to pay under its existing lease ("EXISTING LEASE") at 800 West
Thorndale, Itasca, Illinois, less the Rent that would have been due under this
Lease commencing on August 1, 1997 and ending on the Warehouse Commencement
Date. The date of August 1, 1997 set forth above shall be extended from time to
time by the number of days of Force Majeure Delays.
B. In the event that the Office Commencement Date does not occur on or
before December 1, 1997, Landlord shall reimburse Tenant for (i) actual damages
incurred by Tenant up to $100,000.00 for each month after December 1, 1997 until
the Office Commencement Date, and (ii) the amount of rent that Tenant is
required to pay under its Existing Lease, less the Rent that would have been due
under this Lease commencing on December 1, 1997 and ending on the Office
Commencement Date. The date of December 1, 1997 set forth above shall be
extended from time to time by the number of days of Force Majeure Delays.
C. In the event that the Office Commencement Date does not occur on or
before June 1, 1998, Tenant may terminate this Lease upon notice to Landlord at
any time prior to the Office Commencement Date.
ARTICLE V
---------
RENT
----
SECTION 5.1. BASE RENT. In consideration of the leasing aforesaid, Tenant
agrees to pay Landlord, without offset or deduction, base rent for the Initial
Term ("BASE RENT") in the amount of the Annual Base Rent set forth in the Base
Rent Schedule. The Annual Base Rent shall be paid in advance, in twelve (12)
equal monthly installments, commencing on the Warehouse Commencement Date
(prorated for any partial month) and continuing on the first (1st) day of each
month thereafter for the balance of the Term of this Lease, and in addition
thereto, Tenant shall pay such charges as are herein described as "ADDITIONAL
RENT". The term "RENT" when used in this Lease shall include all Base Rent
payable under this Section 5.1, as well as the charges herein described as
Additional Rent, and all other sums due from Tenant to Landlord hereunder. All
Rent payable hereunder shall be payable to Landlord at Landlord's Mailing
Address, or as Landlord may otherwise from time to time designate in writing.
SECTION 5.2. BASE RENT ADJUSTMENT. In addition to the Base Rent payable by
Tenant hereunder, Tenant shall pay to Landlord, as Additional Rent, the Rent
Adjustments described in this Section 5.2 commencing on the Commencement Date,
without set off or deduction. Until such time as Tenant receives the first
Adjustment Statement provided for in clause (iii) of this Section 5.2, Tenant
shall, commencing on the Commencement Date and on the first (1st) day of each
and every month thereafter, make the Initial Monthly Rent Adjustment Deposit
specified in Article I hereof.
A. For the purposes of this Lease:
(1) The term "CALENDAR YEAR" shall mean each calendar year or a
portion thereof during the Term.
(2) The term "EXPENSES" shall mean and include all expenses paid or
incurred by Landlord or its beneficiaries for owning, maintaining,
managing, operating, insuring, replacing and repairing the Project or any
portion thereof, and all appurtenances and personal property used in
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conjunction therewith and complying with all Legal Requirements. Expenses
shall not include (i) depreciation charges, (ii) interest and principal
payments on mortgages, (iii) ground rental payments, (iv) costs of roof
maintenance or structural repairs which are Landlord's obligation pursuant
to Section 8.1 B below, (v) costs incurred as a result of the negligent
act or omission of Landlord, (vi) expenses in connection with services
which are not offered to Tenant but are offered to other tenants in the
Building and (vii) real estate brokerage and leasing commissions. If any
building in the Project is not fully occupied during all or a portion of
any Calendar Year, then Landlord may elect to make an appropriate
adjustment of the Expenses which vary due to occupancy for such Calendar
Year employing sound accounting and management principles, to determine the
amount of Expenses that would have been paid or incurred by Landlord had
said building been fully occupied and the amount so determined shall be the
amount of Expenses attributable to such Calendar Year.
(3) The term "RENT ADJUSTMENTS" shall mean all amounts owed by Tenant
as Additional Rent resulting from Expenses and Taxes, or both.
(4) The term "RENT ADJUSTMENT DEPOSIT" shall mean an amount equal to
Landlord's estimate of Rent Adjustments due for any Calendar Year made from
year to year during the Term.
(5) The term "TAXES" shall mean real estate taxes, assessments, sewer
rents, rates and charges, transit taxes, taxes based upon the receipt of
rent, and any other federal, state or local government charge, general,
special, ordinary or extraordinary, which may now or hereafter be assessed
against the Project or any portion thereof in any Calendar Year during the
Term and any tax in substitution of any of the foregoing; provided,
however, in determining the income of Landlord with respect to any such
substituted tax, only the income derived from the Project shall be
included. In case of special taxes or assessments which may be payable in
installments, only the amount of each installment and interest paid thereon
paid during a Calendar Year shall be included in Taxes for that Calendar
Year. Taxes shall also include any personal property taxes (attributable to
the year in which paid) imposed upon the furniture, fixtures, machinery,
equipment, apparatus, systems and appurtenances used in connection with the
operation of the Project. Taxes also include Landlord's reasonable costs
and expenses (including reasonable attorneys' fees) in contesting or
attempting to reduce any taxes provided that the Landlord's efforts result
in a reduction in any such taxes in an amount greater than the fees
incurred in obtaining such reduction. Taxes shall be reduced by any
recovery or refund received of taxes previously paid by the Landlord,
provided such refund relates to taxes paid during the Term of this Lease.
"Taxes" as used hereunder shall exclude (i) franchise, corporate, estate,
inheritance, succession or transfer taxes of Landlord, or any income,
profit or revenue tax upon the collection of Rent except to the extent any
such tax replaces any other tax expressly set forth above and (ii) the
portion of the real estate Taxes attributable to the portion of the Village
of Itasca Old Thorndale Avenue Special Service Area Unlimited ad valorem
property tax bonds, series 1996 relating to the widening of Old Thorndale
Road.
B. Subject to Section 5.2 H below, commencing on the Commencement Date,
Tenant shall pay to the Landlord as Additional Rent the amount equal to Tenant's
Proportion of Expenses and Taxes attributable to each Calendar Year of the Term.
The amount of Taxes attributable to a Calendar Year shall be the amount assessed
for such Calendar Year, even though the assessment for such Taxes may be payable
in the following Calendar Year.
C. As soon as reasonably feasible after the expiration of each Calendar
Year, Landlord will furnish Tenant a statement ("ADJUSTMENT STATEMENT") showing
the following:
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(1) Expenses and Taxes for Calendar Year last ended and the amount of
Expenses and Taxes payable by Tenant for such Calendar Year;
(2) The amount of Rent Adjustments due Landlord for the Calendar
Year last ended, less credits for Rent Adjustment Deposits paid, if any;
and
(3) The Rent Adjustment Deposit due in the current Calendar Year.
D. Within thirty (30) days after Tenant's receipt of each Adjustment
Statement, Tenant shall pay to Landlord:
(1) The amount of Rent Adjustment shown on said statement to be due
Landlord for the Calendar Year last ended; plus
(2) The amount, which when added to the Rent Adjustment Deposit
theretofore paid in the current Calendar Year would provide that Landlord
has then received such portion of the Rent Adjustment Deposit as would
have theretofore been paid to Landlord had Tenant paid one twelfth (1/12)
of the Rent Adjustment Deposit for the current Calendar Year, to Landlord
monthly on the first day of each month of such Calendar Year.
Commencing on the first day of the first month after Tenant's receipt of each
Adjustment Statement, and on the first day of each month thereafter until Tenant
receives a more current Adjustment Statement, Tenant shall pay to Landlord one
twelfth (1/12) of the Rent Adjustment Deposit shown on said statement. During
the last complete Calendar Year, Landlord may include in the Rent Adjustment
Deposit its estimate of the Rent Adjustment which may not be finally determined
until after the expiration of the Term. The Tenant's obligation to pay the Rent
Adjustment shall survive the Term.
E. Tenant's payment of the Rent Adjustment Deposit for each Calendar Year
shall be credited against the Rent Adjustments for such Calendar Year. All Rent
Adjustment Deposits may be co-mingled and no interest shall be paid to Tenant
thereon. If the Rent Adjustment Deposit paid by Tenant for any Calendar Year
exceeds the Rent Adjustments for such Calendar Year, then Landlord shall give a
credit to Tenant in an amount equal to such excess against the Rent Adjustments
due for the next succeeding Calendar Year, except that if any such excess
relates to the last Calendar Year of the Term, then, provided that no default of
Tenant exists hereunder, Landlord shall refund such excess to Tenant.
F. Tenant or its representative shall have the right to examine
Landlord's books and records with respect to the items in the Adjustment
Statement during normal business hours at any time within ninety (90) days
following the furnishing by Landlord to Tenant of such Adjustment Statement.
Unless Tenant shall take written exception to any item within ninety (90) days
after furnishing of the foregoing statement, such statement shall be considered
as final and accepted by Tenant. Any amount due to Landlord as shown on any
such statement, whether or not written exception is taken thereto, shall be paid
by Tenant within thirty (30) days after Landlord shall have submitted the
statement, without prejudice to Tenant's rights to the exception to the
Adjustment Statement as provided above.
G. If the Commencement Date is on any day other than the first day of
January, or if the Termination Date is on any day other than the last day of
December, any Rent Adjustments due Landlord shall be prorated.
H. Notwithstanding the foregoing, Tenant shall not be obligated to pay its
Proportionate Share of real estate Taxes monthly, but shall make such payment to
Landlord within ten (10) business days after the delivery by Landlord to Tenant
of any invoice for Taxes along with a copy of the bill for the applicable real
estate Taxes, or make such payment directly to the DuPage County Treasurer
within said time period
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in the event Tenant's Proportionate Share is one hundred percent (100%) at
any time during the Term. Upon the occurrence of any Event of Default,
Tenant's rights under this Section 5.2 H shall terminate and monthly Tax
Deposits shall be paid as provided above. In the event that Tenant fails to
pay the real estate Taxes when due, Tenant shall pay the full amount due,
including, but not limited to, interest and penalties.
I. In the event that Tenant is not reasonably satisfied with the
landscaping and snow removal service being performed pursuant to this
Lease, Tenant shall, upon notice to Landlord, but subject to any contract
previously entered into between Landlord and the applicable service
provider, cause the landscaping and snow removal service for the Project to
be performed in a manner, by contractors and at a cost reasonably
acceptable to Landlord. Thereafter, Landlord shall have no further
obligation to provide landscaping or snow removal service at the Project.
Section 5.3. Interest and Late Charges on Late Payments. Tenant
acknowledges that its late payment of any Rent will cause Landlord to incur
certain costs and expenses not contemplated under this Lease, the exact amount
of which is extremely difficult or impracticable to fix. Such costs and expenses
will include, without limitation, loss of use of money, administrative and
collection costs and processing and accounting expenses. Therefore, if any
installment of monthly Base Rent is not received by Landlord within ten (10)
days of the date when due or any other sum due hereunder is not paid within ten
(10) days of the date when due, Tenant shall immediately pay to Landlord a late
charge equal to three percent (3%) of the unpaid amount. In the event Tenant
does not pay any sums due hereunder within one (1) month of the due date
thereof, an additional late charge equal to one and one-half percent (1 1/2%) of
the amount due shall be immediately paid to Landlord, and Landlord may charge an
additional one and one-half percent (1 1/2%) of the amount due for each
additional month or fraction thereof, during which any amount due remains
outstanding. Landlord and Tenant agree that this late charge represents a
reasonable estimate of costs and expenses incurred by Landlord from, and is fair
compensation to Landlord for, its loss suffered, by such non-payment by Tenant.
Acceptance of the late charge shall not constitute a waiver of Tenant's default
with respect to such non-payment by Tenant or prevent Landlord from exercising
any other rights and remedies available to Landlord under this Lease. Failure to
pay the late charge shall constitute a default under this Lease.
ARTICLE VI
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Utilities
---------
Section 6.1. Utilities. Tenant shall pay, directly to the appropriate
supplier, all costs of natural gas, electricity, heat, light, power, sewer
service, telephone, water, refuse disposal and other utilities and services
supplied to the Premises. Landlord shall, at Landlord's sole cost and expense,
separately meter the units in the Building. If, however, at any time, any
services or utilities are not separately metered, Landlord shall make a
reasonable determination of Tenant's share thereof and the cost thereof shall be
included in Expenses. Landlord shall not in any way be liable or responsible to
Tenant for any cost or damage or expense which Tenant may sustain or incur if
either the quality or character of such service is changed or is no longer
available or suitable for Tenant's requirements.
ARTICLE VII
-----------
Use
---
Section 7.1. Use. The Premises shall be used for the Use only, and for no
other purpose.
Section 7.2. Prohibited Uses. Tenant shall not permit the Premises, or any
other portion of the Project, to be used in such manner which impairs Landlord's
right, title or interest in the Project or any portion
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thereof, or in such manner which gives rise to a claim or claims of adverse
possession or of a dedication of the Project or any portion thereof for public
use. Tenant shall not use or occupy the Premises or permit the Project, in whole
or in part, to be used or occupied, or do or permit anything to be done in or on
the Project, in whole or in part, in a manner which would in any way violate any
certificate of occupancy affecting the Project, or make void or voidable any
insurance then in force with respect thereto, or which may make it impossible to
obtain fire or other insurance thereon or which would render the insurance risk
more hazardous, or which will cause or be apt to cause the structural injury to
the Project or any part thereof, or which would cause the value of the Project
or any part thereof to diminish, and shall not use or occupy or permit the
Project to be used or occupied, in whole or in part, in a manner which may
violate and shall comply with any present or future, ordinary or extraordinary,
foreseen or unforeseen, Legal Requirements, whether or not Landlord also is
liable for compliance. Tenant will not do or permit or suffer any public or
private waste, damage, impairment or injury to or upon the Project or any part
thereof.
Section 7.3. No Implied Permission. Except as otherwise expressly provided
herein, nothing in this Lease contained shall authorize Tenant to do or permit
or suffer any act which shall in any way encumber the fee title of Landlord in
and to the Project or any interest therein. The title, interest or estate of
Landlord in the Project shall not be in any way subject to any claim by way of
lien or encumbrance, whether arising by operation of law or by virtue of an
express or implied contract by Tenant. Any claim to a lien or encumbrance upon
the Project arising from any act of omission of Tenant shall accrue only against
the Tenant's leasehold estate and shall in all respects be subject and
subordinate to the paramount title and right of Landlord in and to the Premises
and the Project. Every person furnishing, manufacturing or preparing any
material, fixtures, apparatus or machinery for, or on account of, the Premises
or any other improvements now or hereafter erected, or the appurtenances or
furnishings therein, or performing any labor or services in, upon or about the
Premises, or the improvements or appurtenances, or dealing in any way with
Tenant or anyone claiming by, through or under Tenant shall take and be held
charged with notice of this condition, and shall have and acquire no lien upon
Landlord's estate or interest through the furnishing of such material, fixtures,
apparatus, machinery, labor or services.
Section 7.4. Rules and Regulations. In amplification and not in limitation
of the foregoing provisions of Article VII, Tenant shall not permit any portion
of the Premises to be used by any person or persons or by the public, as such,
at any time or times during the Term in such manner as might reasonably tend to
impair title to the Project or any portion thereof, or in such manner as might
reasonably make possible a claim or claims of adverse use, adverse possession,
prescription, dedication or other similar claims of, in, to or with respect to
the Premises or any part thereof or estate therein. The Landlord may from time
to time impose upon Tenant, such reasonable rules or regulations not
inconsistent with the provisions of this Lease.
ARTICLE VIII
------------
Maintenance of Premises
-----------------------
Section 8.1. Maintenance.
A. Tenant's Maintenance. Except for the Landlord's maintenance
obligations set forth in Section 8.1 B hereof, Tenant agrees, at Tenant's sole
cost and expense, to take good care of the Premises and keep and maintain same
and all parts thereof, including, but not limited to, all floors, floor
coverings, windows, glass, plate glass, ceilings, interior and demising walls,
doors, electrical systems, lighting fixtures and equipment, plumbing systems and
fixtures, sprinkler systems, heating, ventilating and air conditioning systems,
loading docks, areas and doors, rail space areas, fences and signs, and all
other pipes, mains, water, sewer and gas connections and all other fixtures,
machinery, apparatus, equipment and appurtenances now or hereafter belonging to,
connected with or used in conjunction with the Premises together with any and
all alterations and additions thereto, in good order, condition and repair,
suffering no waste or injury. Tenant shall, at its sole cost and expense,
promptly make all necessary repairs and replacements, ordinary as well as
extraordinary, foreseen as well as unforeseen, in and to any equipment
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now or hereafter located in the Premises, including, but not limited to, all
floors, floor coverings, windows, glass, plate glass, ceilings, interior and
demising walls, doors, electrical systems, lighting fixtures and equipment,
plumbing systems and fixture, sprinkler systems, heating, ventilating and air
conditioning systems, loading docks, areas and doors, rail space areas, fences
and signs, connections, pipes, mains, water, sewer and connections, and all
other fixtures, machinery, apparatus equipment and appurtenances now or
hereafter belonging to, connected with or used in conjunction with the Premises.
All such maintenance, repairs and replacements shall be of first class quality
and sufficient for the proper maintenance and operation of the Premises. Tenant
shall keep and maintain the Premises safe, secure and clean, specifically
including, but not by way of limitation, removal of waste and refuse matter.
Tenant shall not permit anything to be done upon the Premises (and shall perform
all maintenance and repairs thereto so as not) to invalidate, in whole or in
part, or prevent the procurement of any insurance policies which may, at any
time, be required under the provisions of this Lease. Tenant shall not obstruct
or permit the obstruction of any parking area, adjoining street or sidewalk.
B. Landlord's Maintenance. Landlord shall make, or cause to be made, all
maintenance, repairs and necessary replacements to the Common Areas. The cost of
such maintenance, repairs and replacements shall be a part of Expenses.
Landlord shall also make, or cause to be made, all repairs and necessary
replacements to the "structural components" (as hereinafter defined) of the
Building. For purposes of this lease, the phrase "structural components" shall
mean the roof, skylights, structural components of the exterior walls (excluding
windows, doors and overhead doors, but including window frames and door frames)
and foundation of the Building. The cost of such repairs and replacements shall
be the sole responsibility of Landlord except to the extent such costs arise as
a result of any act or omission of Tenant or any person, firm or entity claiming
by, through or under any of them, in which event, the cost therefor shall be
paid by Tenant as Additional Rent within thirty (30) days after Landlord bills
Tenant therefor from time to time.
Section 8.2. Governmental Requirements. Tenant at its own cost and expense
also shall promptly comply with any and all requirements of any Governmental
Authority to or affecting the Premises or any part thereof, irrespective of the
nature of the work required to be done, extraordinary as well as ordinary,
whether or not the same involve or require any structural changes or additions
in or to the Building and irrespective of whether or not such changes or
additions be required on account of any particular use to which the Premises or
any part thereof are being put. Included in the obligations set forth above, but
not in limitation thereof, Tenant, at its own cost and expense, shall promptly
comply with OSHA regulations relating to overhead cranes (CFR 1910-179(j)(2) and
184(d), CFR 1910-179(j)(3), CFR 1910-179(e)(1) through (4) and CFR 1910-
179(b)(5)), if applicable. Notwithstanding the foregoing, Landlord shall cause
the Initial Improvements to be constructed in compliance with all applicable
Legal Requirements.
Section 8.3. Tenant's Responsibilities. Except as set forth in Section
8.1.B. hereof, Landlord shall not be required to furnish any services or
facilities whatsoever to the Premises.
ARTICLE IX
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Insurance
---------
Section 9.1. Coverage Required. Tenant shall procure and maintain, or
cause to be maintained, at all times during the term of this Lease, at Tenant's
sole cost and expense, and until each and every obligation of Tenant contained
in the Lease has been fully performed, the types of insurance specified below,
with insurance companies authorized to do business in the State of Illinois
covering all operations under this Lease, whether performed by Tenant or by
Contractors hired by Tenant.
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A. IN GENERAL. Upon the Warehouse Commencement Date, tenant shall
procure and maintain the following kinds and amounts of insurance:
(i) WORKER'S COMPENSATION AND OCCUPATIONAL DISEASE INSURANCE.
Worker's Compensation and Occupational Disease Insurance, in statutory
amounts. Employer's liability coverage with limits of not less than
$100,000 each accident or illness shall be included.
(ii) COMMERCIAL LIABILITY INSURANCE (PRIMARY AND UMBRELLA).
Commercial Liability Insurance or equivalent with limits of not less than
$5,000,000 per occurrence, combined single limit, for bodily injury,
personal injury, and property damage liability. Products/completed
operation, independent contractors, broad form property damage and
contractual liability coverages are to be included. Landlord is to be named
as additional insureds on a primary, non-contributory basis for any
liability, arising directly or indirectly from this Lease.
(iii) CONTENTS INSURANCE. Insurance against fire, sprinkler leakage,
vandalism, and the extended coverage perils for the full insurable value of
all contents of Tenant within the Premises, and of all office furniture,
trade fixtures, office equipment, merchandise and all other items of
Tenant's property on the Premises.
B. CONSTRUCTION. During any construction performed by or at the direction
of Tenant, Tenant shall procure and maintain, or cause to be maintained, the
following kinds and amounts of insurance:
(i) WORKER'S COMPENSATION AND OCCUPATIONAL DISEASE INSURANCE.
Worker's Compensation and Occupational Disease Insurance, in statutory
amounts. Employer's liability coverage with limits of not less than
$500,000 for each accident or illness shall be included.
(ii) COMMERCIAL LIABILITY INSURANCE (PRIMARY AND UMBRELLA).
Commercial Liability Insurance or equivalent with limits of not less than
$5,000,000 per occurrence, combined single limit, for bodily injury,
personal injury, and property liability. Products/completed operations,
explosion, collapse, underground, independent contractors, broad form
property damage and contractual liability coverages are to be included.
Landlord is to be named as an additional insured on a primary non-
contributory basis for any liability arising directly or indirectly from
the Lease.
(iii) ALL RISK BUILDERS RISK INSURANCE. Tenant shall provide All Risk
Blanket Builder's Risk Insurance to cover the materials, supplies,
equipment, machinery and fixtures that are or will be part of the Project.
Coverage extensions shall include the following: right to partial
occupancy, material stored off-site and in-transit, boiler and machinery,
earthquake, flood (including surface water backup), collapse, water damage,
debris removal, faulty workmanship or materials, testing, mechanical-
electrical breakdown and failure, deletion of freezing and temperature
exclusions, business interruption, extra expense, loss of revenue, loss of
rents and loss of use of property, as applicable, Landlord shall be named
as loss payee.
(iv) PROFESSIONAL LIABILITY. When any architects, engineers, or
consulting firms perform work in connection with this Lease costing in
excess of $25,000.00, Professional Liability Insurance shall be maintained
with limits of $1,000,000. When policies are renewed or replaced, the
policy retroactive date must coincide with, or precede, start of work.
Section 9.2. POLICIES. All insurance policies shall be written with
insurance companies and shall be in form reasonably satisfactory to Landlord.
All insurance policies (except for worker's compensation) shall name Landlord as
an additional insured and loss payee as their respective interests may appear
and shall provide that
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they may not be terminated or modified without thirty (30) days' advance written
notice to Landlord. All policies shall also contain an endorsement that
Landlord, although named as additional insured, shall nevertheless be entitled
to recover for damages caused by the negligence of Tenant. The minimum limits of
insurance specified in this Section shall in no way limit or diminish Tenant's
liability under this Lease. Tenant shall furnish to Landlord, on or prior to the
Warehouse Commencement Date such insurance required to be carried by Tenant, and
thereafter prior to the expiration of each such policy, true and correct
photocopies of all insurance policies required under this Section, together with
any amendments and endorsements to such policies, certificates of insurance, and
such other evidence of coverages as Landlord may reasonably request, and
evidence of payment of all premiums and other expenses owed in connection
therewith. Upon Tenant's default in obtaining or delivering the policy for any
such insurance or Tenant's failure to pay the charges therefor, Landlord may, at
its option, on or after the tenth (lOth) day after written notice thereof is
given to Tenant, procure or pay the charges for any such policy or policies and
the total cost and expense (including attorneys' fees) thereof shall be
immediately paid by Tenant to Landlord as Additional Rent upon receipt of a bill
therefor.
Section 9.3. Subrogation. Landlord and Tenant agree to have all fire and
extended coverage which may be carried by either of them endorsed with a clause
providing that any release from liability of or waiver of claim for recovery
from the other party or any of the parties named in Section 9.2 above entered
into in writing by the insured thereunder prior to any loss or damage shall not
affect the validity of said policy or the right of the insured to recover
thereunder, and providing further that the insurer waives all rights of
subrogation which such insurer might have against the other party or any of the
parties named in Section 9.2 above. Without limiting any release or waiver of
liability or recovery contained in any other Section of this Lease but rather in
confirmation and furtherance thereof. Landlord and any beneficiaries of Landlord
waive all claims for recovery from Tenant, and Tenant waives all claims for
recovery from Landlord, any beneficiaries of Landlord and the managing agent for
the Project and their respective agents, partners and employees, for any loss or
damage to any of its property insured under valid and collectible insurance
policies to the extent of any recovery collectible under such insurance
policies. Notwithstanding the foregoing or anything contained in this Lease to
the contrary, any release or any waiver of claims shall not be operative, nor
shall the foregoing endorsements be required, in any case where the effect of
such release or waiver is to invalidate insurance coverage or invalidate the
right of the insured to recover thereunder or increase the cost thereof
(provided that in the case of increased cost the other party shall have the
right, within ten (10) days following written notice, to pay such increased
cost, thereby keeping such release or waiver in full force and effect).
Section 9.4 Miscellaneous Insurance Provisions. Landlord and Tenant agree
as follows:
A. Both parties hereto expressly understand and agree that any
insurance coverages furnished by them and the limits of any such insurance
coverage shall in no way limit the liabilities and responsibilities of the
parties specified under the Lease, or contracts executed relating to the
Project, or by law.
B. The failure of either party to obtain evidence of insurance from
the other party shall not be deemed to be a waiver by either party, and
both parties shall remain under their respective continuing obligation to
maintain the insurance coverage required under this Lease.
C. Any and all deductibles on insurance coverages referenced in this
Article IX shall be borne by Tenant. The deductible under Landlord's
property insurance shall in no event exceed $25,000.00.
D. Tenant expressly understands and agrees that any insurance
maintained by Landlord shall apply in excess of and not contribute with
insurance provided by the Tenant under the Lease.
E. If Tenant desires additional coverage, higher limits of liability,
or other modifications for their own protection, Tenant shall be
responsible for the acquisition and cost of such additional protection.
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F. Neither party shall violate nor permit to be violated any of the
conditions or provisions of any of their respective insurance policies, and both
parties shall so perform and satisfy or cause to be performed and satisfied the
requirements of the companies writing such policies so that at all times
companies of good standing, and in the case of Tenant's insurance, companies
satisfactory to Landlord shall be willing to write and continue such insurance.
G. Landlord shall not be limited in the proof of any damages which
Landlord may claim against Tenant arising out of or by reason of Tenant's
failure to provide and keep in force insurance, as aforesaid, to the amount of
the insurance premium or premiums not paid or incurred by Tenant and which would
have been payable under such insurance, but Landlord shall also be entitled to
recover as damages for such breach the uninsured amount of any loss, to the
extent of any deficiency in the insurance required by the provisions of this
Lease, and damages, costs and expenses of suit suffered or incurred by
reason of damage to, or destruction of, the Project or the Premises occurring
during any period when Tenant or Contractors shall have failed or neglected to
provide insurance as aforesaid.
H. The insurance required by this Lease, at the option of Landlord or
Tenant with respect to the insurance policies they obtain, may be effected by
blanket or umbrella policies issued covering the Premises and other properties
owned or leased by Landlord or Tenant, as applicable, provided that the policies
otherwise comply with the provisions of this Lease and allocate to the Premises
the specified coverage, without possibility of reduction or coinsurance by
reason of, or damage to, any other premises covered therein.
I. All insurance companies shall have a Best rating of not less than
A/VII, or an equivalent ratio in the event Best ceases to exist or provide a
rating.
J. Tenant shall provide and keep in force such other insurance in such
amounts as may from time to time be reasonably required by Landlord or a holder
of a Mortgage (defined in Section 23.1 hereof) against such other insurable
hazards as at the time are commonly insured against in the case of prudent
owners of properties similar to the Project and the Premises, and in that
connection Landlord may require changes in the forms, types and amounts of
insurance required pursuant to this Section or add to, modify or delete other
requirements; and in any event, if under applicable law, rule, regulation or
ordinance of any governmental authority, state or federal, having jurisdiction
in the Premises, liability may be imposed upon Landlord on account of the use or
operation of the Premises or the Project or other improvements, insurance within
limits reasonably satisfactory to Landlord shall be maintained by Tenant against
any such liability.
K. The required insurance to be carried by Landlord and Tenant hereunder
shall not be limited by any limitations expressed in the indemnification
language herein or any limitation placed on the indemnity therein given as a
matter of law.
Section 9.5. Landlord's Insurance. Landlord shall maintain, at all times
during the term of the Lease, property, rent loss and liability insurance and
such other insurance required of Landlord in the amounts and under the terms
customarily carried by Landlord for similar buildings owned by it in the Chicago
metropolitan area. The cost of all such insurance shall be an Expense. Landlord
shall provide evidence of such insurance to Tenant upon the written request of
Tenant, but in no event on more than one occasion during any calendar year.
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ARTICLE X
---------
Damage or Destruction
---------------------
Section 10.1. Total Destruction. In the event that in excess of fifty
percent (50%) of the Premises or Building are made untenantable by fire or other
casualty and Landlord shall decide not to restore or repair same, then, in any
of such events, Landlord shall have the right to terminate this Lease by notice
to Tenant given within thirty (30) days after the date of such fire or other
casualty and the Rent shall be apportioned on a per diem basis and paid to the
date of such fire or other casualty. In the event the Premises are made
untenantable by fire or other casualty and Landlord shall decide to rebuild and
restore the same or, to the extent Section 10.3 is applicable and neither
Landlord nor Tenant elects to terminate this Lease pursuant to said Section
10.3, this Lease shall not terminate and Landlord shall repair and restore the
Premises at Landlord's expense and with due diligence within one hundred eighty
(180) days of the date of the fire or other casualty, subject, however to
extension for Force Majeure Delays. In the event that the repair or restoration
is not substantially complete within the required time period, Tenant may
terminate this Lease upon notice to Landlord within five (5) business days after
the expiration of said required time period.
Section 10.2. Partial Destruction. In the event that fifty percent (50%)
or less of the Premises or Building are damaged by fire or other casualty, then
Landlord shall proceed with all due diligence to repair and restore the Premises
within one hundred eighty (180) days of the date of the fire or other casualty,
subject, however, to extension for Force Majeure Delays. In such event, Rent
shall abate in proportion to the non-useability of the Premises during the
period while repairs are in progress unless such partial damages are due to the
fault or neglect of Tenant. If the partial damage is the result of the fault or
neglect of Tenant, Rent shall not abate during said period.
Section 10.3. Lease Termination. If in excess of fifty percent (50%) of
the Premises are damaged by fire or other casualty as aforesaid during the last
eighteen (18) months of the Term hereof, Landlord and Tenant shall each have the
right to terminate this Lease upon notice to the other within thirty (30) days
of the date of fire or other casualty, in which event, Rent shall be apportioned
on a per diem basis and paid to the date of such fire or other casualty.
ARTICLE XI
----------
Liens
-----
Section 11.1. Lien Claims. Tenant shall not do any act which shall in any
way encumber the interest or estate of Landlord in and to the Project or any
portion thereof, nor shall any interest or estate of Landlord in the Project or
any portion thereof be in any way subject to any claim by way of lien or
encumbrance, whether by operation of law or by virtue of any express or implied
contract by Tenant, and any claim to or lien upon the Project or any portion
thereof arising from any act or omission of Tenant shall accrue only against the
leasehold estate of Tenant and shall in all respects be subject and subordinate
to the paramount title and rights of Landlord in and to the Project or any
portion thereof. Tenant will not permit the Project or any portion thereof to
become subject to any mechanics', laborers' or materialmen's lien on account of
labor or material furnished to Tenant or claimed to have been furnished to
Tenant in connection with work of any character performed or claimed to have
been performed on the Premises by or at the direction of sufferance of Tenant;
provided, however that Tenant shall have the right to contest in good faith and
with reasonable diligence, the validity of any such lien or claimed lien if
Tenant shall first give to Landlord a surety bond or title endorsement
reasonably acceptable to Landlord or an amount equal to one hundred twenty
percent (120%) of the amount of the lien or claimed lien which, together with
interest earned thereon, shall be held by Landlord as security to insure payment
thereof and to prevent any sale, foreclosure or forfeiture of the Premises by
reason of non-payment thereof. If a cash deposit is made, the amount so
deposited with
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Landlord shall be held by Landlord in an account established at a federally
insured banking institution until satisfactory removal of said lien or claim of
lien. On any final determination of the lien or claim for lien, Tenant will
immediately pay any judgment rendered, with all proper costs and charges, and
will, at its own expense, have the lien released and any judgment satisfied.
Should Tenant fail to diligently contest and pursue such lien contest, Landlord
may, at its option, file a claim against any surety or title company or use the
sums so deposited to discharge any such lien upon the renewal of such lien or
encumbrance Landlord shall pay all such sums remaining on deposit to
Tenant.
Section 11.2. Landlord's Right to Cure. If Tenant shall fail to contest
the validity of any lien or claimed lien or fail to give security to Landlord to
insure payment thereof, or shall fail to prosecute such contest with diligence,
or shall fail to have the same released and satisfy any judgment rendered
thereon, then Landlord may, at its election (but shal1 not be so required)
remove or discharge such lien or claim for lien (with the right, in its
discretion, to settle or compromise the same), and any amounts advanced by
Landlord, including reasonable attorneys' fees, for such purposes shall be so
much additional rent due from Tenant to Landlord at the next rent date after any
such payment, with interest thereon at the Lease Interest Rate from the date so
advanced.
ARTICLE XII
-----------
TENANT ALTERATIONS
------------------
Section 12.1. Alterations. Tenant shall not at any time during the Term
of this Lease (i) make any openings in or other alteration or improvement to the
roof or exterior walls of the Building, (ii) make any alteration, addition or
improvement to the Premises or any portion thereof without in each instance, the
prior written consent of Landlord which affect any Building system, or exceed
TWENTY-FIVE THOUSAND AND NO/100 DOLLARS ($25,000.00) in costs in the aggregate
in any twelve (12)-month period (hereinafter collectively referred to as
"Alterations"). Subject to compliance with all of the provisions of this Lease,
Landlord consents to the installation of a floor mounted conveyor and a racking
system in the warehouse portion of the Premises. Landlord shall not unreasonably
withhold or delay its consent to other Alterations made by Tenant. No
Alterations to the Premises for which Landlord's consent is required shall be
commenced by Tenant until Tenant has furnished Landlord with a satisfactory
certificate or certificates from an insurance company acceptable to Landlord,
evidencing insurance coverage required under Section 9.1 hereof. Any Alterations
by Tenant hereunder shall be done in a good and workmanlike manner in compliance
with any Legal Requirements applicable governmental law, statute, ordinance or
regulation. Upon completion of any Alteration by Tenant hereunder, Tenant shall
furnish Landlord with a copy of the "as built" plans covering such construction.
Tenant, at its sole cost and expense, will make all Alterations on the Premises
which may be necessary by the act or neglect of any other person or corporation
(public or private), except Landlord, its agents, employees or contractors.
Before commencing any Alterations, involving an estimated cost of more than
TWENTY-FIVE THOUSAND AND NO/100 DOLLARS ($25,000.00): (a) plans and
specifications therefor, prepared by a licensed architect, shall be submitted to
and approved by Landlord within ten (10) business days after submission to
Landlord (such approval shall not be unreasonably withheld or delayed); (b)
Tenant shall furnish to Landlord an estimate of the cost of the proposed work;
(c) all contracts for any proposed work shall be submitted to and approved by
Landlord; (d) evidence of insurance as required by Article IX hereof; and (e)
such other requirements as Landlord may reasonably require to be satisfied.
Prior to the commencement of any construction activity for which Landlord's
consent shall be required, certificates of such insurance coverages shall be
provided to Landlord and renewal certificates shall be delivered to Landlord
prior to the expiration date of the respective policies.
It shall be reasonable for Landlord to disapprove an Alteration if such
Alterations would (i) change the general design or structure of the Project or
any part thereof; (ii) decrease the size of the Project or any part thereof;
(iii) reduce or impair, to any material extent, the value, rentability of the
Premises or constitute waste; or
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(iv) give to any owner, lessee or occupant of any other property or to any other
person or corporation any easement, right-of-way or any other right over the
Premises.
Any Alteration shall be made with reasonable dispatch and in a good and
workmanlike manner and in compliance with all applicable permits and
authorizations and buildings and zoning laws and with all other Legal
Requirements. If any work does not comply with the provisions of this Lease,
Landlord may, by notice to Tenant, require that Tenant stop the work and take
steps necessary to cause corrections to be made, or Landlord may, itself,
perform the work, at Tenant's cost.
Section 12.2. Ownership of Alterations. All Alterations (except Tenant's
Equipment, as defined in Section 19.2 hereof), put in at the expense of Tenant
shall become the property of Landlord and shall remain upon and be surrendered
with the Premises as a part thereof at the termination of this Lease, or at
Landlord's option, provided Landlord shall have advised Tenant in writing at
the time of its consent to said Alteration is sought that same must be removed
and the Premises restored to its original condition.
Section 12.3. Tenant Signs. Tenant shall not place any signs on any part
of the Building or Land without the prior written consent of Landlord. Upon
notice to and with the consent of Landlord, which consent shall not be
unreasonably withheld, Tenant may place the signs located on the exterior of its
current building (or a similar signs) on the exterior wall of the Premises and
install a monument sign at the Rohlwing Road entrance to the Project, provided
that (i) the installation and dimensions of said signs are in strict accordance
with Legal Requirements; (ii) Tenant continually maintains said signs in a
first-class manner and (iii) Tenant, at Tenant's sole cost and expense, pays
the costs associated with the installation and maintenance of the signs and
removes said signs at the expiration of the Term and restores the area in which
said signs are placed to its condition prior to the installation of said signs,
ordinary wear and tear excepted. If Landlord installs a monument sign at the
Thorndale Road entrance to the Project to be shared by all tenants in the
Building, Tenant's name shall be listed on the monument sign. Notwithstanding
the foregoing, no signage shall be permitted on the roof of the Building and no
advertising shall be permitted (except within the interior of the Premises).
Section 12.4. Environmental Impact. Notwithstanding any other term,
covenant or condition contained in this Lease, in the event that any Alteration
has any environmental impact on the Premises, Landlord may deny the Tenant the
right to proceed in Landlord's sole and absolute discretion.
ARTICLE XIII
------------
Condemnation
------------
Section 13.1. Taking: Lease to Terminate. If a portion of the Building or
the Premises shall be lawfully taken or condemned for any public or quasi-public
use or purpose, or conveyed under threat of such condemnation and as a result
thereof the Premises cannot be used for the same purpose and with the same
utility as before such taking or conveyance, the Term of this Lease shall end
upon, and not before, the date of the taking of possession by the condemning
authority, and without apportionment of the award. Tenant hereby assigns to
Landlord, Tenant's interest in such award, if any. Current Rent shall be
apportioned as of the date of such termination. If any part of the Building
shall be so taken or condemned, or if the grade of any street or alley adjacent
to the Building is changed by any competent authority and such taking or change
of grade makes it necessary or desirable to demolish, substantially remodel, or
restore the Building, the Landlord shall have the right to cancel this Lease
upon not less than ninety (90) days' prior notice to the date of cancellation
designed in the notice.
Section 13.2. Taking: Lease to Continue. In the event only a part of
the Premises shall be taken as a result of the exercise of the power of eminent
domain or condemned for a public or quasi-public use or
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purpose by any competent authority or sold to the condemning authority under
threat of condemnation, and as a result thereof the balance of the Premises can
be used for the same purpose as before such taking, sale or condemnation, this
Lease shall not terminate and Landlord, at its sole cost and expense up to the
amount of any condemnation award, shall promptly repair and restore the
Premises, subject to Force Majeure Delay. Any award paid as a consequence of
such taking, sale or condemnation, shall be paid to Landlord. Any sums not so
disbursed shall be retained by Landlord.
SECTION 13.3 Tenant's Claim. To the extent permitted by law and subject
to the rights of any lender with respect to the Premises, Tenant shall be
allowed to pursue a claim against the condemning authority (hereinafter referred
to as the "Tenant's Claim") that shall be independent of and wholly separate
from any action, suit or proceeding relating to any award to Landlord for
reimbursement of relocation expenses or for Tenant's Equipment and personal
property, provided: (i) Tenant's Claim shall in no way limit, affect, alter or
diminish in any kind or way whatsoever Landlord's award as a result of such
taking, sale or condemnation; (ii) Tenant's Claim shall in no event include any
claim for any interest in real property, it being expressly understood and
agreed that all sums paid with respect to the real property interests taken,
sold or condemned shall be the sole property of Landlord; and (iii) Tenant's
Claim shall in no event be joined with Landlord's proceeding or argued or heard
concurrently therewith and if the tribunal hearing Tenant's Claim orders such
joinder, Tenant agrees to voluntarily dismiss Tenant's Claim without prejudice
until such time as Landlord has received its award for such taking, sale or
condemnation.
ARTICLE XIV
-----------
Assignment -- Subletting by Tenant
----------------------------------
SECTION 14.1. No ASSIGNMENT, SUBLETTING OR OTHER TRANSFER. Tenant shall
not assign this Lease or any interest hereunder, nor shall Tenant sublet or
permit the use or occupancy of the Premises or any part thereof by anyone other
than Tenant, without the express prior written consent of Landlord, which
consent shall not be unreasonably withheld or delayed. No assignment or
subletting shall relieve Tenant of its obligations hereunder, and Tenant shall
continue to be liable as a principal and not as a guarantor or surety, to the
same extent as though no assignment or sublease had been made, unless
specifically provided to the contrary in Landlord's consent. Consent by Landlord
pursuant to this Article shall not be deemed, construed or held to be consent to
any additional assignment or subletting, but each successive act shall require
similar consent of Landlord. Landlord shall be reimbursed by Tenant for any
costs or expenses incurred pursuant to any request by Tenant for consent to any
such assignment or subletting. In the consideration of the granting or denying
of consent, Landlord may, at its option, take into consideration: (i) the
business reputation and credit worthiness of the proposed subtenant or assignee;
(ii) any required alteration of the Premises; (iii) the intended use of the
Premises by the proposed subtenant or assignee; and (iv) any other factors which
Landlord shall deem relevant.
SECTION 14.2. OPERATION OF LAW. Tenant shall not allow or permit any
transfer of this Lease, or any interest hereunder, by operation of law, or
convey, mortgage, pledge or encumber this Lease or any interest hereunder.
SECTION 14.3. EXCESS RENTAL. If Tenant shall, with Landlord's prior
consent as herein required, sublet the Premises, an amount equal to fifty
percent (50%) of the rental in excess of the Base Rent and any additional rent
herein provided to be paid shall be for benefit of Landlord and shall be paid to
Landlord promptly when due under any such subletting as additional rent due
hereunder.
SECTION 14.4. MERGER OR CONSOLIDATION. If Tenant is a corporation whose
stock is not publicly traded, any transaction or series of transactions
(including, without limitation, any dissolution, merger, consolidation or other
reorganization of Tenant, or any issuance, sale, gift, transfer or redemption of
any capital stock of Tenant, whether voluntary, involuntary or by operation of
law, or any combination of any of the foregoing transactions)
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resulting in the transfer of control of Tenant, shall be deemed to be a
voluntary assignment of this Lease by Tenant subject to the provisions of this
Article XIV. If Tenant is a partnership or limited liability company, any
transaction or series of transactions (including without limitation any
withdrawal or admittance of a partner or member or a change in any partner's or
member's interest in Tenant, whether voluntary, involuntary or by operation of
law, or any combination of any of the foregoing transactions) resulting in the
transfer of control of Tenant, shall be deemed to be a voluntary assignment of
this Lease by Tenant subject to the provisions of this assignment of this Lease
by Tenant subject to the provisions of this Article XIV. If Tenant is a
corporation whose stock is not publically traded, a change or series of changes
in ownership of stock which would result in direct or indirect change in
ownership by the stockholders or an affiliated group of stockholders of less
than twenty-five percent (25%) of the outstanding stock as of the date of the
execution and delivery of this Lease shall not be considered a change of
control. Notwithstanding the immediately foregoing, Tenant may, upon notice to,
but without Landlord's consent, assign this Lease to any corporation resulting
from a merger or consolidation of Tenant, provided that the total assets and the
total net worth of such assignee after such consolidation or merger shall be in
excess of the greater of (i) the net worth of Tenant immediately prior to such
consolidation or merger, or (ii) the net worth of Tenant as of the date hereof,
determined by generally accepted accounting principles and provided that Tenant
is not at such time in default hereunder, and provided further that such
successor shall execute an instrument in writing, acceptable to Landlord in its
reasonable discretion, fully assuming all of the obligations and liabilities
imposed upon Tenant hereunder and deliver the same to Landlord. Tenant shall
provide in its notice to Landlord such information as may be reasonably required
by Landlord to determine that the requirements of this Section 14.4 have been
satisfied. As used in this Section 14.4, the term "control" means possession of
the power to vote not less than a majority interest of any class of voting
securities and partnership or limited liability company interests or to direct
or cause the direction of the management or policies of a corporation, or
partnership or limited liability company through the ownership of voting
securities, partnership interests or limited liability company interests,
respectively.
Section 14.5. Unpermitted Transaction. Except as expressly otherwise
provided in this Lease, any assignment, subletting, use, occupancy, transfer or
encumbrance of this Lease or the Premises without Landlord's prior written
consent shall be of no effect and shall, at the option of Landlord, constitute a
default under this Lease.
ARTICLE XV
----------
Financial Statements
--------------------
Section 15.1. Financial Statements. Tenant agrees to furnish Landlord
annually, within ninety (90) days of the end of such fiscal year with a copy of
its annual report.
ARTICLE XVI
------------
Indemnity for Litigation
------------------------
Section 16.1. Indemnity for Litigation. Tenant agrees to pay, and to
indemnify and defend Landlord against, all costs and expenses (including
reasonable attorneys' fees) incurred by or imposed upon Landlord by or in
connection with any litigation to which Landlord becomes or is made a party due
to the act or omission of Tenant or any member of the Tenant Group, whether
commenced by or against Tenant, or any other person or entity or that may be
incurred by Landlord in enforcing any of the covenants and agreements of this
Lease with or without the institution of any action or proceeding relating to
the Premises or this Lease, or in obtaining possession of the Premises after an
Event of Default hereunder or upon expiration or earlier termination of this
Lease. The foregoing notwithstanding, Tenant's responsibility under this Section
16.1 to pay Landlord's costs and expenses (including reasonable attorneys' fees)
shall not extend to such costs and expenses incurred in defending an action
brought by Tenant to enforce the terms of this Lease in which there is a court
determination that Landlord failed to perform its
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obligations under this Lease. The provisions of this Section 16.1 shall survive
the expiration or earlier termination of this Lease.
Section 16.2. Landlord's Indemnity. Landlord agrees to pay, and to
indemnify and defend Tenant against all costs and expenses (including reasonable
attorney's fees) incurred by or imposed upon Tenant by or in connection with any
litigation to which Tenant becomes or is made a party due to the act or omission
of Landlord, whether commenced by or against Landlord, or any other person or
entity or that may be incurred by Tenant in enforcing any of the Landlord's
covenants and agreements of this Lease with or without the institution of any
action or proceeding relating to the Premises or this Lease. The foregoing
notwithstanding, Landlord's responsibility under this Section 16.2 to pay
Tenant's costs and expenses (including reasonable attorneys' fees) shall not
extend to such costs and expenses incurred in defending an action brought by
Landlord to enforce the terms of this Lease in which there is a court
determination that Tenant failed to perform its obligations under this Lease.
The provisions of this Section 16.2 shall survive the expiration or earlier
termination of this Lease.
ARTICLE XVII
------------
Estoppel Certificates
---------------------
Section 17.1. Estoppel Certificate. Tenant agrees that on the Commencement
and at any time and from time to time thereafter, upon not less than ten (10)
days' prior written request by Landlord, it will execute, acknowledge and
deliver to Landlord, or Landlord's mortgagee to the extent factually accurate, a
statement in writing in the form of Exhibit "D" attached hereto and by this
reference incorporated herein; provided, however, Tenant agrees to certify to
any prospective purchaser or mortgagee any other reasonable information
specifically requested by such prospective purchaser or mortgagee.
ARTICLE XVIII
-------------
Inspection of Premises
----------------------
Section 18.1. Inspections. Tenant agrees to permit Landlord and any
authorized representatives of Landlord, to enter the Premises at all reasonable
times on reasonable advance notice, except in the case of emergency, for the
purpose of inspecting the same. Any such inspections shall be solely for
Landlord's purposes and may not be relied upon by Tenant or any other person.
Section 18.2. Landlord Signs. Tenant agrees to permit Landlord and any
authorized representative of Landlord to enter the Premises at all reasonable
times during business hours on reasonable advance notice to exhibit the same for
the purpose of sale, mortgage or lease. Landlord may display on the Premises
customary "For Sale" signs and during the final year of the Term hereof or any
extension thereof, Landlord may display on the Premises customary for "For Rent"
signs.
ARTICLE XIX
-----------
Fixtures
--------
Section 19.1. Building Fixtures. All improvements and all plumbing,
heating, lighting, electrical and air-conditioning fixtures and equipment, and
other articles of personal property used in the operation of the Premises (as
distinguished from operations incident to the business of Tenant), whether or
not attached or
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affixed to the Premises (hereinafter referred to as "Building Fixtures"), shall
be and remain a part of the Premises and shall constitute the property of
Landlord.
SECTION 19.2. Tenant's Equipment. All of Tenant's trade fixtures and all
personal property, fixtures, apparatus, machinery and equipment now or hereafter
located upon the Premises, other than Building Fixtures, as shall be and remain
the personal property of Tenant, and the same are herein referred to as
"Tenant's Equipment."
SECTION 19.3. Removal of Tenant's Equipment. Tenant's Equipment may be
removed from time to time by Tenant; provided, however, that if such removal
shall injure or damage the Premises, Tenant shall repair the damage and place
the Premises in the same condition as it would have been if such Tenant's
Equipment had not been installed.
ARTICLE XX
----------
Default
-------
SECTION 20.1. Events of Default. Tenant agrees that any one or more of the
following events shall be considered "Events of Default" as said term is used
herein:
A. If an order, judgment or decree shall be entered by any court
adjudicating Tenant a bankrupt or insolvent, or approving a petition
seeking reorganization of Tenant or appointing a receiver, trustee or
liquidator of Tenant, or of all or a substantial part of its assets, and
such order, judgment or decree shall continue unstayed and in effect for
any period of sixty (60) days; or
B. Tenant shall file an answer admitting the material allegations of
a petition filed against Tenant in any bankruptcy, reorganization or
insolvency proceeding or under any laws relating to the relief of debtors,
readjustment or indebtedness, reorganization, arrangements,
composition or extension; or
C. Tenant shall make any assignment for the benefit of creditors or
shall apply for or consent to the appointment of a receiver, trustee or
liquidator of Tenant, or any of the assets of Tenant; or
D. Tenant shall file a voluntary petition in bankruptcy, or shall
admit in writing its inability to pay its debts as they come due, or shall
file a petition or an answer seeking reorganization or arrangement with
creditors or take advantage of any insolvency law; or
E. A decree or order appointing a receiver of the property of Tenant
shall be made and such decree or order shall not have been vacated within
sixty (60) days from the date of entry or granting thereof; or
F. Tenant shall vacate the Premises or abandon same during the Term
hereof; or
G. Tenant shall default in making any payment of Rent or other
payment required to be made by Tenant hereunder when due as herein
provided; or
H. If Tenant shall suffer or permit any lien or encumbrance (subject
to Tenant's right to contest liens as provided in Section 11.1 hereof) to
attach to the Premises or the Project, and Tenant shall not discharge said
lien or encumbrance within thirty (30) days or within ten (10) days prior
to any sale or disposition or forfeiture pursuant to such execution,
whichever date shall first occur, or
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I. If Tenant shall fail to carry all required insurance under this
Lease; or
J. Any material misrepresentation (including by omission) made by
Tenant in this Lease; or
K. If Tenant shall fail to comply with an order of a court of
competent jurisdiction or proper order of a Governmental Authority within
the required time period which order directly relates to Tenant and the
Project; or
L. Failure to pay Taxes as provided in Section 5.2 H hereof.
M. If Tenant shall default in the performance of any covenant,
promise or agreement on the part of Tenant contained in this Lease not
otherwise specified in this Section 20.1 and such default shall continue
for thirty (30) days after notice thereof in writing by Landlord to Tenant,
or if such default or condition which gives rise thereto cannot with due
diligence and good faith be cured within such thirty (30)-day period, if
Tenant shall not in good faith and within the period of thirty (30) days
commence the curing of such default and pursue the curing of such default
continuously and diligently and in good faith to the end that such default
shall be cured within such minimum period in excess of thirty (30) days as
may be reasonably necessary to cure such default through pursuing such cure
promptly, diligently, continuously and in good faith; provided, however,
that such additional period beyond thirty (30) days shall not apply to a
default that creates a clear and present danger to persons or property or
materially adversely affects the Premises or the Project or if the failure
or default by Tenant is one for which Landlord (or any officer or other
agent or beneficial or other owner thereof) may be subject to fine or
imprisonment.
Upon the occurrence of any one or more of such Events of Default, Landlord
may at its election terminate this Lease or terminate Tenant's right to
possession only, without terminating this Lease. Upon termination of this Lease
or of Tenant's right to possession, Tenant shall immediately surrender
possession and vacate the Premises, and deliver possession thereof to Landlord.
Upon termination of this Lease, Landlord shall be entitled to recover as
liquidated damages because the parties hereto recognize that as of the date
hereof actual damages are not ascertainable and are of imprecise calculation and
not as a penalty, all Rent and other sums due and payable by Tenant through the
date of termination plus (i) an amount equal to sixty percent (60%) of the Rent
and other sums provided herein to be paid by Tenant for the residue of the Term,
and (ii) the costs of performing any other covenants to be performed by Tenant.
If Landlord elects to terminate Tenant's right to possession only, without
terminating this Lease, Landlord may, at Landlord's option, enter into the
Premises, remove Tenant's signs and other evidences of tenancy, and take and
hold possession thereof as hereinabove provided, without such entry and
possession terminating this Lease or releasing Tenant, in whole or in part from
Tenant's obligations to pay the Rent hereunder for the full Term or from any
other obligations of Tenant under this Lease. Landlord shall use commercially
reasonably efforts to relet all or any part of the Premises for such rent and
upon terms as are commercially reasonable (including the right to relet the
Premises for a term greater or lesser than that remaining of the Term of
premises and the right to relet the Premises as a part of a larger area, the
right to change the character or use made of the Premises and the right to grant
concessions of free rent). For the purpose of such reletting, Landlord may
decorate or make any repairs, changes, alterations, or additions in or to the
Premises that may be necessary or desirable. If Landlord is unable to relet the
Premises after using such commercially reasonably efforts to do so, Landlord
shall have the right to terminate this Lease, in which event, Tenant shall pay
to Landlord liquidated damages as provided in the immediately preceding
grammatical paragraph. If the Premises are relet and sufficient sums shall not
be realized from such reletting after payment of all expenses of such
decorations, repairs, changes, alterations, additions and the expenses of
repossession and such reletting, and the collection of the Rent herein provided
and other payments required to be made by Tenant under the provisions of this
Lease for the remainder of the Term of this Lease then, in such event, Tenant
shall pay to Landlord on demand any such deficiency and Tenant agrees that
Landlord may file suit to
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recover any sums falling due under the terms of this Section from time to time,
and all costs and expenses of Landlord, including reasonable attorneys' fees,
incurred in connection with any such suit shall be paid by Tenant.
SECTION 20.2. Bankruptcy. If Landlord shall not be permitted to terminate
this Lease, as provided in this Article XX because of the provisions of the
United States Code relating to Bankruptcy, as amended (hereinafter referred to
as the "Bankruptcy Code"), then Tenant as a debtor-in-possession or any trustee
for Tenant agrees promptly, within no more than sixty (60) days after the
filing of the bankruptcy petition, to assume or reject this Lease. In such
event, Tenant or any trustee for Tenant may only assume this Lease if: (a) it
cures or provides adequate assurance that the trustee will promptly cure any
default hereunder; (b) compensates or provides adequate assurance that Tenant
will promptly compensate Landlord of any actual pecuniary loss to Landlord
resulting from Tenant's default; and (c) provides adequate assurance of
performance during the fully stated term hereof of all of the terms, covenants,
and provisions of this Lease to be performed by Tenant. In no event after the
assumption of this Lease shall any then-existing default remain uncured for a
period in excess of the earlier of ten (10) days or the time period set forth
herein. Adequate assurance of performance of this Lease, as set forth
hereinabove, shall include, without limitation, adequate assurance: (i) of the
source of rent reserved hereunder; and (ii) that the assumption of this Lease
will not breach any provision hereunder.
If Tenant assumes this Lease and proposes to assign the same pursuant to
the provisions of the Bankruptcy Code to any person or entity who shall have
made a bona fide offer to accept an assignment of this Lease on terms acceptable
to Tenant, then notice of such proposed assignment, setting forth: (i) the name
and address of such person; (ii) all of the terms and conditions of such offer,
and (iii) the adequate assurance to be provided Landlord to assure such person's
future performance under the Lease, including, without limitation, the assurance
referred to in Section 365(b)(3) of the Bankruptcy Code, shall be given to
Landlord by the Tenant no later than twenty (20) days after receipt by the
Tenant but in any event no later than ten (10) days prior to the date that the
Tenant shall make application to a court of competent jurisdiction for authority
and approval to enter into such assignment and assumption, and Landlord shall
thereupon have the prior right and option, to be exercised by notice to the
Tenant given at any time prior to the effective date of such proposed
assignment, to accept an assignment of this Lease upon the same terms and
conditions and for the same consideration, if any, as the bona fide offer made
by such person, less any brokerage commissions which may be payable out of the
consideration to be paid by such person for the assignment of this Lease.
If this Lease is assigned to any person or entity pursuant to the
provisions of the Bankruptcy Code any and all monies or other considerations
payable or otherwise to be delivered to Landlord, shall be and remain the
exclusive property of Landlord and shall not constitute property of Tenant or of
the estate of the Tenant within the meaning of the Bankruptcy Code. Any and all
monies or other considerations constituting the Landlord's property under the
preceding sentence not paid or delivered to the Landlord shall be held in trust
for the benefit of Landlord and shall be promptly paid to the Landlord.
Any person or entity to which this Lease is assigned pursuant to the
provisions of the Bankruptcy Code shall be conclusively deemed without further
act or deed to have assumed all of the obligations arising under this Lease on
and after the date of such assignment. Any such assignee shall upon demand
execute and deliver to Landlord an instrument confirming such assumption. Any
such assignee shall be permitted to use the Leased Premises only for the Use.
Nothing contained in this Section shall, in any way, constitute a waiver of
the provisions of Article XIV of this Lease relating to alienation. Tenant shall
not, by virtue of this Section, have any further rights relating to assignment
other than those granted in the Bankruptcy Code. Notwithstanding anything in
this Lease to the contrary, all amounts payable by Tenant to or on behalf of
Landlord under this Lease, whether or not expressly denominated as rent, shall
constitute rent for the purpose of Section 501(b)(6) or any successive section
of the Bankruptcy Code.
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SECTION 20.3. RE-ENTRY. Tenant agrees, upon receipt of notice of
termination, to at once surrender possession of the Premises, the Project and
related improvements to Landlord. Tenant expressly waives (to the full extent
permitted by law) the service of any other notice of intention to terminate this
Lease or of intention to re-enter which may be presently provided for by any
statute or other law or any future amendment or similar statute or law (so long
as, in the case of a future amendment or statute or law, the remedies to be
exercised by Landlord are not substantially different than remedies presently
available to Landlord), and agrees that the occurrence of any Event of Default
shall of itself, upon service of the notice above provided for, constitute a
forcible detainer by Tenant of the Premises within the meaning of the statutes
of the State of Illinois. No receipt of money by Landlord from Tenant after any
termination, howsoever occurring, of this Lease shall reinstate, continue or
extend the Term of this Lease.
ARTICLE XXI
-----------
Landlord's Performance of Tenant's Covenant
-------------------------------------------
SECTION 21.1. LANDLORD'S RIGHT TO PERFORM TENANT'S OBLIGATIONS. In the
event Tenant shall fail to maintain any insurance required to be paid by it
under the terms hereof, or in an Emergency Situation or upon occurrence of an
Event of Default, Landlord may (but shall not be obligated so to do), and
without waiving or releasing Tenant from any obligation of Tenant hereunder,
make any payment or perform any other act which Tenant is obligated to make or
perform under this Lease in such manner and to such extent as Landlord may deem
desirable; and in so doing Landlord shall also have the right to enter upon the
Premises for any purpose reasonably necessary in connection therewith and to pay
or incur any other necessary and incidental costs and expenses, including
reasonable attorneys' fees. All sums so paid and all liabilities so incurred by
Landlord, together with interest thereon at the rate per annum which is the
lesser of (i) the Lease Interest Rate or (ii) the highest rate permitted by law
shall be deemed Additional Rent hereunder and shall be payable to Landlord upon
demand as Additional Rent. Landlord shall use reasonable efforts to give prior
notice (which may be oral) of its performance, if reasonably feasible under the
circumstances. The performance of any such obligation by Landlord shall not
constitute a waiver of Tenant's default in failing to perform the same. Inaction
of Landlord shall never be considered as a waiver of any right accruing to it
pursuant to this Lease. Landlord, in making any payment hereby authorized: (a)
relating to Taxes, may do so according to any bill, statement or estimate,
without inquiry into the validity of any tax, assessment, sale, forfeiture, tax
lien or title or claim thereof; (b) for the discharge, compromise or settlement
of any lien, may do so without inquiry as to the validity or amount of any claim
for lien which may be asserted; or (c) in connection with the completion of
construction of improvements to the Premises or the repair, maintenance or the
payment of operating costs thereof, may do so in such amounts and to such
persons as Landlord reasonably may deem appropriate. Nothing contained herein
shall be construed to require Landlord to advance monies for any purpose.
Landlord shall not in any event be liable for inconvenience, annoyance,
disturbance, loss of business or other damage of Tenant or any other occupant of
the premises or the Project or any part thereof, by reason of making repairs or
the performance of any work on the Premises or the Project or on account of
bringing materials, supplies and equipment into or through the Premises or the
Project during the course thereof and the obligations of Tenant under this Lease
shall not thereby be affected in any manner. In doing so, however, Landlord
shall use reasonable efforts not to interfere with the normal operation of the
Project. The term "Emergency Situation" shall mean a situation which has caused
or is likely to cause bodily injury to persons, contamination of or physical
damage to the Premises or adjoining property or economic liability or criminal
jeopardy to Landlord.
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ARTICLE XXII
-------------
Exercise of Remedies
--------------------
SECTION 22.1. CUMULATIVE REMEDIES. No remedy contained herein or otherwise
conferred upon or reserved to Landlord, shall be considered exclusive of any
other remedy, but the same shall be cumulative and shall be in addition to every
other remedy given herein, now or hereafter existing at law or in equity or by
statute, and every power and remedy given by this Lease to Landlord may be
exercised from time to time and as often as occasion may arise or as may be
deemed expedient. No delay or omission of Landlord to exercise any right or
power arising from any default shall impair any such right or power or shall be
construed to be a waiver of any such default or an acquiescence therein.
SECTION 22.2. NO WAIVER. No waiver of any breach of any of the covenants of
this Lease shall be construed, taken or held to be a waiver of any other
breach, or a waiver, acquiescence in or consent to any further or succeeding
breach of the same covenant. The acceptance by Landlord of any payment of Rent
or other sums payable hereunder after the termination by Landlord of this Lease
or of Tenant's right to possession hereunder shall not, in the absence of
agreement in writing to the contrary by Landlord, be deemed to restore this
Lease or Tenant's right to possession hereunder, as the case may be, but shall
be construed as a payment on account and not in satisfaction of damages due from
Tenant to Landlord. Receipt of Rent by Landlord, with knowledge of any breach of
this Lease by Tenant or of any default by Tenant in the observance or
performance of any of the conditions or covenants of this Lease, shall not be
deemed to be a waiver of any provision of this Lease.
SECTION 22.3. EQUITABLE RELIEF. In the event of any breach or threatened
breach by Tenant of any of the agreements, terms, covenants or conditions
contained in this Lease, Landlord shall be entitled to enjoin such breach or
threatened breach and shall have the right to invoke any right and remedy
allowed at law or in equity or by statute or otherwise as though re-entry,
summary proceedings, and other remedies were not provided for in this Lease.
ARTICLE XXIII
-------------
Subordination to Mortgages
--------------------------
SECTION 23.1. SUBORDINATION. Landlord may execute and deliver a mortgage
or trust deed in the nature of a mortgage ("Mortgage") against its interest in
the Project or any portion thereof. This Lease and all of the rights of Tenant
hereunder, shall automatically, and without the requirement of the execution of
any further documents, be and are hereby made expressly subject and subordinate
at all times to the lien of any Mortgage and to all advances made or hereafter
to be made upon the security thereof. Provided the holder of said Mortgage
agrees in writing not to disturb the rights of Tenant under this Lease so long
as Tenant is not in default hereunder, Tenant agrees to execute and deliver such
instruments subordinating this Lease to the lien of any such Mortgage as may be
requested in writing by Landlord from time to time. Notwithstanding anything to
the contrary contained herein, any mortgagee under a Mortgage may, by notice in
writing to the Tenant, subordinate its Mortgage to this Lease.
SECTION 23.2. MORTGAGE PROTECTION. Tenant agrees to give the holder of any
Mortgage, by registered or certified mail, a copy of any notice of default
served upon the Landlord by Tenant, provided that prior to such notice Tenant
has received notice (by way of service on Tenant of a copy of an assignment of
rents and leases, or otherwise) of the address of such mortgagee and containing
a request therefor. Tenant further agrees that if Landlord shall have failed to
cure such default within the time provided for in this Lease, then said
mortgagee shall have an additional thirty (30) days after receipt of notice
thereof within which to cure such default or, if such default cannot be cured
within that time, then such additional time as may be necessary, if, within such
thirty (30) days, any mortgagee has commenced and is diligently pursuing the
remedies necessary to cure such default (including but not
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limited to commencement of foreclosure proceedings, if necessary to effect such
cure). Until the time allowed as aforesaid for said mortgagee to cure such
defaults has expired without cure, Tenant shall have no right to, and shall not,
terminate this Lease on account of default. This Lease may not be modified or
amended so as to reduce the Rent or shorten the Term, or so as to adversely
affect in any other respect to any material extent the rights of the Landlord or
Tenant, without the prior written consent, in each instance, of the mortgagee.
ARTICLE XXIV
------------
INDEMNITY AND WAIVER
--------------------
SECTION 24.1. TENANT INDEMNITY. Tenant shall not do or permit any act or
thing to be done or omit to do any act or thing upon the Premises or Project
which may subject Landlord to any liability or responsibility for injury, damage
to persons or property, or to any liability by reason of any violation of Legal
Requirements and shall exercise such control over the Premises so as to fully
protect Landlord against any such liability. Tenant shall defend, indemnify and
save Landlord, and any official, agent, beneficiary, contractor, director,
employee, lessor, mortgagee, officer, parent, partner, shareholder and trustee
of Landlord (each an "INDEMNIFIED PARTY") representatives, successors and
assigns harmless from and against any and all liabilities, suits, judgments,
settlements, obligations, fines, damages, penalties, claims, costs, charges and
expenses, including, without limitation, engineers', architects' and attorneys'
fees, court costs and disbursements, which may be imposed upon or incurred by or
asserted against any Indemnified Party by reason of any of the following
occurring during or after (but attributable to a period of time falling within)
the Term:
A. any demolition or razing or construction of any improvements or
any other work or thing done in, on or about the Premises or any part
thereof by Tenant or any member of the Tenant Group, including any claim
that such work constitutes "public works";
B. any use, nonuse, possession, occupation, alteration, repair,
condition, operation, maintenance or management of the Premises or any
part thereof or of any tunnel, creek, ditch, detention area, sidewalk, curb
or vault adjacent thereto by Tenant or any member of the Tenant Group;
C. any act or failure to act on the part of Tenant or any member of
the Tenant Group;
D. any accident, injury (including death) or damage to any person or
property occurring in, on or about the Premises or any part thereof or in,
on or about any tunnel, creek, ditch, detention area, sidewalk, curb or
vault adjacent thereto as a result of the act or neglect of Tenant or any
member of the Tenant Group;
E. any failure to perform or comply with any of the covenants,
agreements, terms or conditions in this Lease on Tenant's part to be
performed or complied with (other than the payment of money);
F. any lien or claim which may be alleged to have arisen against or
on the Premises, or any lien or claim which may be alleged to have arisen
out of this Lease and created or permitted to be created by Tenant or any
member of the Tenant Group against any assets of Landlord, or any liability
which may be asserted against Landlord with respect thereto;
G. any failure on the part of Tenant to keep, observe and perform
any of the terms, covenants, agreements, provisions, conditions or
limitations contained in the contracts and agreements affecting the
Premises on Tenant's part to be kept, observed, or performed; and
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H. any contest permitted pursuant to the provisions of this Lease.
No agreement or covenant of Tenant in this Section 24.1 shall be deemed to
exempt Landlord from, and Tenant's obligations under this Section 24.1 shall not
include liability or damages for injury to persons or damage to property caused
by or resulting from the negligence of Landlord, its agents or employees, in the
construction, operation or maintenance of the Premises.
The obligations of Tenant under this Section 24.1 shall not be affected in
any way by the absence in any case of covering insurance or by the failure or
refusal of any insurance carrier to perform any obligation on its part under
insurance policies affecting the Premises or any part thereof.
Section 24.2. Waiver of Claims. Tenant waives all claims it may have
against Landlord and Landlord's agents for damage or injury to person or
property sustained by Tenant or any member of the Tenant Group or by any
occupant of the Premises, or by any other person, resulting from any part of the
Premises becoming out of repair, or resulting from any accident on or about the
Premises or resulting directly or indirectly from any act or neglect of any
person (excluding Landlord). This Section 24.2 shall include, but not by way of
limitation, damage caused by water, snow, frost, steam, excessive heat or cold,
sewage, gas, odors, or noise, or caused by bursting or leaking pipes or plumbing
fixtures, and shall apply equally whether any such damage results from the act
or neglect of Tenant or of any other person (excluding Landlord), and whether
such damage be caused or result from anything or circumstance above mentioned or
referred to, or to any other thing or circumstance whether of a like nature or
of a wholly different nature. All Tenant's Equipment and other personal property
belonging to Tenant or any occupant of the Premises that is in or on any part of
the Premises shall be there at the risk of Tenant or of such other person only,
and Landlord shall not be liable for any damage thereto or for the theft or
misappropriation thereof.
Section 24.3. Landlord's Indemnity. Landlord will protect, indemnify and
save Tenant, its officers, directors and their respective successors and assigns
harmless from and against all liabilities, obligations, claims, damages,
penalties, causes of action, costs and expenses (including without limitation,
reasonable attorneys' fees and expenses) imposed upon, incurred by or asserted
against Tenant by reason of any accident, injury to or death of persons or loss
of or damage to property occurring on or about the Premises or any part thereof
resulting from the negligent act or omission of Landlord or anyone claiming by,
through or under Landlord.
ARTICLE XXV
-----------
Surrender
---------
Section 25.1. Condition. Upon the termination of this Lease whether by
forfeiture, lapse of time or otherwise/upon, or upon the termination of Tenant's
right to possession of the Premises, Tenant will at once surrender and deliver
up the Premises to Landlord, broom clean, in good order, condition and repair,
reasonable wear and tear excepted. "Broom clean" means free from all debris,
dirt, rubbish, personal property of Tenant, oil, grease, tire tracks or other
substances, inside of the Premises. Any damage caused by removal of Tenant from
the Premises, including any damages caused by removal of Tenant's Equipment, as
herein defined, shall be repaired and paid for by Tenant prior to the expiration
of the Term.
All Alterations temporary or permanent, excluding Tenant's Equipment, in or
upon the Premises placed there by Tenant, shall become Landlord's property
and shall remain upon the Premises upon such termination of this Lease by lapse
of time or otherwise, without compensation or allowance or credit to Tenant,
unless Landlord requests their removal. If Landlord so requests removal of
said additions, hardware, alterations or improvements and Tenant does not make
such removal by the termination of this Lease, or within ten (10) days after
such request, whichever is later, Landlord may remove the same and deliver the
same to any other place of business of Tenant
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or warehouse same, and Tenant shall pay the cost of such removal, delivery and
warehousing to Landlord on demand.
SECTION 25.2. REMOVAL OF TENANT'S EQUIPMENT. Upon the termination of this
Lease by lapse of time, or otherwise, Tenant may remove Tenant's Equipment
provided, however, that Tenant shall repair any injury or damage to the Premises
which may result from such removal. If Tenant does not remove Tenant's Equipment
from the Premises prior to the end of the Term, however ended, Landlord may, at
its option, remove the same and deliver the same to any other place of business
of Tenant or warehouse the same, and Tenant shall pay the cost of such removal
(including the repair of any injury or damage to the Premises resulting from
such removal), delivery and warehousing to Landlord on demand, or Landlord may
treat tenant's equipment as having been conveyed to Landlord with this Lease as
a Bill of Sale, without further payment or credit by Landlord to Tenant.
SECTION 25.3. HOLDOVER. If Tenant retains possession of the Premises or any
part thereof after the termination of the Term, by lapse of time and otherwise,
then Tenant shall pay to Landlord monthly rent, at one hundred fifty percent
(150%) the rate payable for the month immediately preceding said holding over
(including increases for additional rent which Landlord may reasonably
estimate), computed on a per-month basis, for each month or part thereof
(without reduction for any such partial month) that Tenant thus remains in
possession, and in addition thereto, Tenant shall pay Landlord all damages,
consequential as well as direct, sustained by reason of Tenant's retention of
possession. Alternatively, at the election of Landlord expressed in a written
notice to Tenant and not otherwise, if Tenant holds over for more than forty-
five (45) days such retention of possession shall constitute a renewal of this
Lease for six (6) months, at a monthly rental equal to one hundred twenty
percent (120%) of the monthly Base Rent payable in the last month of the Term.
The provisions of this paragraph do not exclude the Landlord's rights of
re-entry or any other right hereunder. Any such extension or renewal shall be
subject to all other terms and conditions herein contained.
ARTICLE XXVI
------------
COVENANT OF QUIET ENJOYMENT
---------------------------
SECTION 26.1. COVENANT OF QUIET ENVIRONMENT. Landlord covenants that
Tenant, on paying the Rent and all other charges payable by Tenant hereunder,
and on keeping, observing and performing all the other terms, covenants,
conditions, provisions and agreements herein contained on the part of Tenant to
be kept, observed and performed. all of which obligations of Tenant are
independent of Landlord's obligations hereunder, shall, during the Term,
peaceably and quietly have, hold and enjoy the Premises subject to the terms,
covenants, conditions, provisions and agreement hereof free from hindrance by
Landlord or any person claiming by, through or under Landlord.
ARTICLE XXVII
-------------
No Recording
------------
SECTION 27.1. NO RECORDING. Neither this Lease nor any memorandum or other
short form hereof shall be recorded.
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ART1CLE XXVIII
--------------
NOTICES
-------
SECTION 28.1. NOTICES. All notices, consents, approvals to or demands upon
or by Landlord or Tenant desired or required to be given under the provisions
hereof, shall be in writing. Any notices or demands from Landlord to Tenant
shall be deemed to have been duly and sufficiently given if a copy thereof has
been personally served, forwarded by expedited messenger or recognized overnight
courier service with evidence of delivery or mailed by United States registered
or certified mail in an envelope properly stamped and addressed to Tenant at
Tenant's Mailing Address, or at such other address as Tenant may theretofore
have furnished by written notice to Landlord, with a copy to Donald F. Engel
Schwartz & Freeman, 401 North Michigan Avenue, Suite 1900, Chicago, Illinois
60611. Any notices or demands from Tenant to Landlord shall be deemed to have
been duly and sufficiently given if forwarded by expedited messenger or
recognized overnight courier service with evidence of delivery or mailed by
United States registered or certified mail in an envelope properly stamped and
addressed to Landlord at Landlord's Mailing Address, with a copy to Mark S.
Richmond Katz Randall & Weinberg, 333 West Wacker Drive, Suite 1800, Chicago,
Illinois 60606, or at such other address as Landlord may theretofore have
furnished by written notice to Tenant. The effective date of any such notice
shall be the date of actual delivery, except that if delivery is refused, the
effective date of notice shall be the date delivery is refused.
ARTICLE XXIX
------------
COVENANTS RUN WITH LAND
-----------------------
SECTION 29.1. COVENANTS. All of the covenants, agreements, conditions and
undertakings in this Lease contained shall extend and inure to and be binding
upon the heirs, executors, administrators, successors and assigns of the
respective parties hereto, the same as if they were in every case specifically
named and shall be construed as covenants running with the Land, and wherever in
this Lease reference is made to either of the parties hereto, it shall be held
to include and apply to, wherever applicable, the heirs, executors,
administrators successors and assigns of such party. Nothing herein contained
shall be construed to grant or confer upon any person or persons, firm,
corporation or governmental authority, other than the parties hereto, their
heirs, executors, administrators, successors and assigns, any right, claim or
privilege by virtue of any covenant, agreement, condition or undertaking in this
Lease contained.
SECTION 29.2. RELEASE OF LANDLORD. The term "Landlord" as used in this
Lease, so far as covenants or obligations on the part of Landlord are concerned,
shall be limited to mean and include only the owner or owners at the time in
question of fee title to the Premises, and in the event of any transfer or
transfers of the title, Landlord herein named (and in the case of any subsequent
transfers or conveyances, the then grantor) shall be automatically freed and
relieved, from and after the date of such transfer or conveyance, of all
personal liability as respects the performance of any covenants or obligations
on the part of Landlord contained in this Lease thereafter to be performed;
provided that any funds in the hands of such Landlord or the then grantor at
the time of such transfer, in which Tenant has an interest, shall be turned over
to the grantee, and any amount then due and payable to Tenant by Landlord or the
then grantor under any provisions of this Lease, shall be paid to Tenant.
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ARTICLE XXX
-----------
Environmental Matters
---------------------
Section 30.1. Defined Terms.
A. The term "HAZARDOUS MATERIALS", when used herein, shall include, but
shall not be limited to, any substances, materials or wastes that are regulated
by any local governmental authority, the state where the Premises or the Project
is located, or the United States of America because of toxic, flammable,
explosive, corrosive, reactive, radioactive or other properties that may be
hazardous to human health or the environment, including without limitation,
above or underground storage tanks, flammables, explosives, radioactive
materials, radon, petroleum and petroleum products, petroleum products (other
than petroleum products that are normally contained in motor vehicles to the
extent such products are not released), urea formaldehyde foam insulation,
methane, lead-based paint, polychlorinated biphenyl compounds, hydrocarbons or
like substances and their additives or constituents, pesticides and any other
special, toxic or hazardous materials, wastes, substances or materials of any
kind, including without limitation, those now or hereafter defined, determined
or identified as "hazardous substances," "hazardous materials," "toxic
substances" or "hazardous wastes" in any Environmental Law.
B. "ENVIRONMENTAL LAW" shall mean any Federal, state or local law,
statute, ordinance, code, rule, regulation, policy, common law, license,
authorization, decision, order, injunction, which pertains to health, safety,
any Hazardous Material, or the environment (including but not limited to ground
or air or water or noise pollution or contamination, and underground or above-
ground tanks) and shall include, without limitation, the Resource Conservation
and Recovery Act ("RCRA"), 42 U.S.C. (S)6901 et seq., as amended by the
Hazardous and Solid Waste Amendments of 1984; the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C. (S)9601 et seq.
("CERCLA"), as amended by the Superfund Amendments and Reauthorization Act of
1986 ("SARA"); the Hazardous Materials Transportation Act, 49 U.S.C. (S)1801 et
seq.; the Federal Water Pollution Control Act, 33 U.S.C. (S)1251 et seq.; the
Clean Air Act, 42 U.S.C. (S)7401 et seq.; the Toxic Substances Control Act, 15
U.S.C. (S)2601 et seq.; the Safe Drinking Water Act, 42 U.S.C. (S)300f et seq.;
the Illinois Environmental Protective Act, 415 ILSC 4/1 et seq.; the Municipal
Code of the City of Chicago; the Clean Air Act (42 U.S.C. (S)7401 et seq.,
"CAA"); the Rivers and Harbors Act, (33 U.S.C. (S)401 et seq., "RHA"); the
Emergency Planning and Community Right-to-Know Act of 1986 (41 U.S.C. 11001 et
seq.. "EPCRA"), the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C.
136 to 136y); the Oil Pollution Act of 1990 (33 U.S.C. 2701 et seq., "OPA"); and
the Occupational Safety and Health Act (29 U.S.C. 651 et seq., "OHSA"); and any
other local, state or federal environmental statutes, and all rules,
regulations, orders and decrees now or hereafter promulgated under any of the
foregoing, as any of the foregoing now exist or may be changed or amended or
come into effect in the future.
C. "ENVIRONMENTAL CLAIM" shall mean and include any demand, notice of
violation, inquiry, cause of action, proceeding or suit for damages (including
reasonable attorneys' and experts' fees), losses, injuries to person or
property, damages to natural resources, fines, penalties, interest, cost
recovery, compensation, or contribution resulting from or in any way arising in
connection with any Hazardous Material or any Environmental Law.
D. "PRE-EXISTING CONDITION" shall mean the presence of any Hazardous
Material on the Premises, to the extent such Hazardous Material was not
introduced onto the Premises after the Commencement Date.
E. "ENVIRONMENTAL CONDITION" shall mean the existence of any Hazardous
Material on the Premises other than a Pre-Existing Condition, (i) in violation
of, or requiring cleanup under, any Environmental Law or the provisions of this
Article XXX; or (ii) which subjects Landlord to liability for any Environmental
Claim or which must be remediated to prevent Landlord from incurring liability
as a result of such Environmental Claim.
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F. "Environmental Remediation" shall mean any investigative, cleanup,
removal, containment, remedial or other action relating to an Environmental
Condition (i) required pursuant to any Environmental Law, or (ii) necessary to
prevent Landlord from incurring, or relieve Landlord from, liability as a result
of an Environmental Claim.
G. "Remediating Party" shall mean that party which has elected (or is
deemed to have elected) to perform any Environmental Remediation.
Section 30.2. Tenant's Covenants with Respect to Environmental Matters.
During the Term, Tenant, at its sole cost and expense, shall:
A. comply with all Environmental Laws relating to the use and
operation of the Premises;
B. keep the Premises free of Hazardous Materials not used in the
ordinary course of Tenant's business as of the date hereof;
C. not exacerbate a Pre-Existing Condition of which Tenant becomes
aware;
D. in the case of an Environmental Condition promptly, but not later
than three (3) business days after the discovery of an Environmental
Condition, notify Landlord of the Environmental Condition;
E. not install or operate any above or below ground tank, sump, pit,
pond, lagoon or other storage or treatment vessel or device on the
Premises without first obtaining Landlord's prior written consent;
F. not handle, use, generate, treat, dispose of or permit the use,
handling, generation, treatment, storage or disposal of any Hazardous
Materials in, on, under, around or above the Premises or Project at any
time during the Term.
Section 30.3. Conduct of Tenant. If Tenant, with the prior written
authorization of Landlord, which authorization may be granted or denied by
Landlord in its sole and absolute discretion generates, uses, transports,
stores, treats or disposes of any Hazardous Materials:
A. Tenant shall, at its own cost and expense, comply with all
Environmental Laws relating to Hazardous Materials;
B. Tenant shall (i) not dispose of any Hazardous Materials in
dumpsters or trash containers or at any other location at the Project; (ii)
not discharge any Hazardous Materials into drains or sewers; (iii) not
cause or allow the release, discharge, emission or run-off of any Hazardous
Materials to air, to surface waters, to the land, to ground water, whether
directly or indirectly; (iv) at Tenant's own cost and expense, arrange for
the lawful transportation and off-site disposal of all Hazardous Materials
generated by Tenant; (v) provide secondary containment around all Hazardous
Materials storage containers, storage facilities and above ground storage
tanks; (vi) conduct all necessary environmental inspections, such as, but
not limited to, asbestos inspections prior to any renovation or demolition,
as required by 40 CFR Part 61 and provide copies of all such reports to the
Landlord; (vii) comply with all reporting requirements under any local,
state or federal ordinance, statute or regulation, such as, but not limited
to, toxics inventory reporting under the Emergency Planning and Community
Right-to-Know Act, the provisions under 40 CFR Part 61, or various
regulations controlling the emissions into the atmosphere of volatile
organic compounds and provide copies of all such reports and notifications
to Landlord; and (viii) use only highly skilled people to address all
environmental issues associated with the leasehold, that such people and
all employees of the Tenant shall receive all required training or
certification under any local, state or federal law specifically mentioned
or alluded to in Section 30.1 of this Lease;
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C. Tenant shall promptly provide Landlord with copies of all
communications, permits or agreements with any governmental authority or
agency (federal, state or local) or any private entity relating in any way
to the violation or alleged violation of any Environmental Laws or to any
violation of Tenant's obligations under subparagraph (B) above;
D. Upon the written request of Landlord no more frequently than once
every year, or on any other occasion in the event that Landlord has reason
to believe an environmental problem exists at the Premises, Tenant shall
provide Landlord the results of appropriate tests of air, water and soil to
demonstrate (i) that Tenant is in compliance with all applicable laws,
rules or permits relating in any way to the presence of any Hazardous
Materials on the Premises or the Project and (ii) the lack of any releases,
discharges or emissions.
If the presence, release, threat of release, placement on or in the
Premises and/or the Project of any Hazardous Materials occurs or is caused in
whole or in part during the Term of this Lease as a result of any act or
omission of Tenant or any member of the Tenant Group, or the generation,
transportation, storage, treatment, or disposal at the Premises and/or the
Project of any Hazardous Materials occurs or is caused in whole or in part by
Tenant or any member of the Tenant Group during the Term of this Lease gives
rise to liability (including, but not limited to, a response action, remedial
action, or removal action) under any Environmental Laws or common law theory,
including, but not limited to nuisance, strict liability, negligence and
trespass, tenant shall promptly complete all Environmental Remediation necessary
and mitigate exposure to liability arising from the Hazardous Materials, whether
or not required by law.
SECTION 30.4. EXACERBATION. If Tenant exacerbates a Pre-Existing
Condition of which Tenant is aware (including as a result of Tenant's
investigative or remediation activities) during the Lease term, that the
provisions of this Article XXX shall apply to such exacerbation of the Pre-
Existing Condition, and Tenant shall perform Environmental Remediation as to
such exacerbation. Tenant shall be responsible for all fines and penalties
caused by Tenant or to the extent Tenant exacerbates a Pre-Existing Condition of
which it becomes aware (including Tenants environmental investigation or
remediation activities) at any time during the Lease Term.
SECTION 30.5. RIGHTS OF INSPECTION. Upon reasonable prior notice,
Landlord and their respective agents and representatives shall have a right of
entry and access to the Premises at any time in Landlord's discretion for the
purposes of (i) inspection of the documentation relating to Hazardous Materials
or environmental matters maintained by Tenant or occupant of the Premises; (ii)
ascertaining the nature of the activities being conducted on the Premises and
investigating whether Tenant is in compliance with its obligations under Article
XXX of this Lease; and (iii) determining the type, kind and quantity of all
materials and substances brought onto the Premises, or made or produced thereon.
Landlord and its agents and representatives shall have the right to take samples
in quantities sufficient for analysis of all materials and substances present on
the Premises including but not limited to, samples, materials or substances
brought onto or made or produced on the Premises by Tenant or occupant of the
Premises or their respective agents, employees, contractors or invitees and
shall also have the right to conduct other tests and studies as may be
reasonably determined by Landlord to be appropriate in order to investigate
whether Tenant is in compliance with its obligations under Article XXX.
SECTION 30.6. COPIES OF NOTICES. During the term of this Lease,
Tenant and Landlord shall each provide the other promptly with copies of all
summons, citations, directives, information inquiries or requests, notices of
potential responsibility, notices of violation or deficiency, orders or decrees,
Environmental Claims, complaints, investigations, judgments, letters, notices of
environmental liens or response actions in progress, and other communications,
written or oral, actual or threatened, received in the case of Tenant, by Tenant
or occupant of the Premises, or in the case of Landlord, by Landlord, from the
United States Environmental Protection Agency, Occupational Safety and Health
Administration, Illinois Environmental Protection Agency, or other federal,
state or local agency or authority, or any other entity or individual (including
both governmental and non-governmental entities and individuals), concerning (a)
any actual or alleged release of a Hazardous Material on, to or from the
Premises; (b) the imposition of any lien on the Premises relating to any
Hazardous Material; (c) any actual or alleged
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violation of or responsibility under Environmental Laws; or (d) any actual or
alleged liability under any theory of common law tort or toxic tort, including
without limitation, negligence, trespass nuisance, strict liability or
ultrahazardous activity.
Section 30.7. Tests and Reports.
A. Upon written request by Landlord. Tenant shall provide Landlord, at
Tenant's expense, with (i) copies of all environmental reports and tests
prepared or obtained by or for Tenant; (ii) copies of transportation and
disposal contracts (and related manifests, schedules, reports and other
information) entered into or obtained by Tenant with respect to any Hazardous
Materials; (iii) copies of any permits issued to Tenant under Environmental Laws
with respect to the Premises; (iv) prior to filing, copies of any and all
reports, notifications and other filings to be made by Tenant or occupant of the
Premises to any federal, state or local environmental authorities or agencies
and after filing, copies of such filings; and (v) any other applicable
documents and information with respect to environmental matters relating to the
Premises. Tenant shall be obligated to provide such documentation only to the
extent within Tenant's possession or control.
B. In addition, if Landlord shall ever reasonably believe that there
exists any breach by Tenant of the terms of this Article XXX, or if any
Environmental Claim is made or threatened, or if a default shall have occurred
under the Lease, or at Landlord's discretion, one (1) time per Lease Year,
Landlord shall have the right, but not the duty, to enter upon the Premises and
conduct an environmental assessment of the Premises, including, but not limited
to, a visual site inspection, review of records pertaining to the site and
interviews of Tenant's representatives or others concerning the site use and
history and other matters. The investigation may also include reasonable
subsurface or other invasive investigation of the Premises including, but not
limited to, soil borings and sampling of site soil and ground or surface water
for laboratory analysis, as may be recommended by the consultant as part of its
inspection of the Premises or based upon such other reasonable evidence of
Environmental Conditions warranting such subsurface or other invasive
investigation. Landlord shall have the right, but not the duty, to retain any
independent professional consultant to conduct any such environmental
assessment; provided, however, that Landlord agrees to limit, in the absence of
an Environmental Claim or default under this Article XXX, the number of such
environmental assessments to one (1) per Lease Year for the Lease Term. Tenant
will cooperate with the Landlord's consultant and will supply to the consultant,
promptly upon request, any information reasonably requested by Landlord to
facilitate the completion of the environmental assessment. Landlord and its
designees are hereby granted access to the Premises at any time or times, upon
reasonable notice (which may be written or oral) to perform such environmental
assessment. In exercising its right, Landlord shall use its reasonable efforts
to minimize disruption of operations at the Premises. Any costs associated with
performance of the environmental assessment, including, but not limited to, the
consultant fees and restoration of any property damaged by such environmental
assessment, shall be paid by Landlord, unless such investigation discloses an
Environmental Condition caused by Tenant or any member of the Tenant Group, in
which case Tenant shall pay such costs.
Section 30.8. Indemnification. Tenant shall reimburse, defend, indemnify
and hold Landlord and any other Indemnified Party free and harmless from and
against any and all Environmental Claims, response costs, losses, liabilities,
damages, costs and expenses, including, without limitation, loss of rental
income, loss due to business interruption, and reasonable attorneys' fees and
costs, arising out of or in any way connected with any or all of the following:
A. any Hazardous Materials (other than a Pre-Existing Condition)
which, at any time during the Term, are or were actually or allegedly
generated, stored, treated, released, disposed of or otherwise located on
or at the Premises as a result of the act or omission of Tenant or any
member of the Tenant Group (regardless of the location at which such
Hazardous Materials are now or may in the future be located or disposed
of), including, but not limited to any and all (i) liabilities under any
common law theory of tort, nuisance, strict liability, ultrahazardous
activity, negligence or otherwise based upon, resulting from or in
connection with any Hazardous Material; (ii) obligations to take response,
cleanup or corrective action pursuant to any Environmental Laws; and (iii)
the costs and expenses of investigation or remediation in
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connection with the decontamination, removal, transportation, incineration
or disposal of any of the foregoing; and
B. any actual or alleged illness, disability, injury or death of any
person, in any manner arising out of or allegedly arising out of exposure
to Hazardous Materials or other substances or conditions present at the
Premises as a result of the act or omission of Tenant or any member of the
Tenant Group (including, but not limited to, ownership, operation and
disposal of any equipment which generates, creates or uses electromagnetic
files, x-rays, other forms of radiation and radioactive materials),
regardless of when any such illness, disability, injury or death shall have
occurred or been incurred or manifested itself; and
C. any actual or alleged failure of Tenant or any member of the
Tenant Group at any time and from time to time to comply with all
applicable Environmental Laws;
D. any failure by Tenant to comply with its obligations under this
Article XXX relating to an Environmental Condition for which Tenant is
Remediating Party;
E. Tenant's failure to provide all information, make all submissions,
and take all steps required by all applicable governmental authorities;
F. the imposition of any lien for damages caused by, or the
recovery of any costs for, the remediation cleanup of Hazardous Material
as a result of events that took place during the Term of this Lease as a
result of the act or omission of Tenant or any member of the Tenant Group;
G. costs of removal of any and all Hazardous Material from all or any
portion of the Premises, which Hazardous Material were placed on the
Premises during the Term of this Lease as a result of the act or omission
of Tenant or any member of the Tenant Group;
H. costs incurred to comply, in connection with all or any portion of
the Premises, with all governmental regulations with respect to Hazardous
Materials on, in, under or affecting the Premises, which Hazardous
Materials were placed on the Premises during the Term of this Lease as a
result of the act or omission of Tenant or any member of the Tenant Group;
I. any spills, discharges, leaks, escapes, releases, dumping,
transportation, storage, treatment or disposal of any Hazardous Materials
which occur during the Term of this Lease, but only to the extent that such
Hazardous Materials originated from or were or are located on the Premises
as a result of the act or omission of Tenant or any member of the Tenant
Group.
The foregoing indemnification shall not apply to any loss incurred by
Landlord as a result of a Pre-Existing Condition except to the extent any such
Pre-Existing Condition of which Tenant becomes aware is exacerbated by Tenant or
any member of the Tenant Group. The obligations of Tenant under this Section
30.8 shall survive any termination or expiration of this Lease.
Section 30.9. Tenant Acknowledgement with respect to Environmental
Matters. Tenant acknowledges that Landlord has made no representation whatsoever
regarding Hazardous Materials on or about the Premises.
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ARTICLE XXXI
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Expansion Option for Expansion Space
------------------------------------
SECTION 31.1. Expansion Option. Provided Tenant is not in default under
the terms and conditions of this Lease on the date the Availability Notice or
Expansion Notice (as such terms are hereinafter defined) are delivered to
Landlord or Tenant, as applicable, Tenant shall have the option (hereinafter
referred to as the "Expansion Option") to lease the portion of the Building
containing approximately 26,195 square feet of space not leased to Tenant
hereunder (hereinafter referred to as the "Expansion Space") subject to the
terms and conditions hereinafter provided. Landlord shall deliver a written
notice (herein referred to as the "Availability Notice") of the effective date
on which Tenant may lease the Expansion Space (said effective date is
hereinafter referred to as the "Expansion Date"). The Expansion Date shall be a
date during Lease Year 6 or Lease Year 7. The Availability Notice shall be sent
to Tenant at least one (1) year prior to the Expansion Date. To the extent
Tenant desires to exercise the Expansion Option, Tenant shall deliver written
notice (herein referred to as the "Expansion Notice") to Landlord at least one
hundred eighty (180) days prior to the Expansion Date. To the extent Tenant
fails to deliver to Landlord the Expansion Notice exercising the Expansion
Option at least one hundred eighty (180) days prior to the Expansion Date,
Tenant shall be deemed to have forever waived its Expansion Option. If Tenant
exercises the Expansion Option in a timely fashion, Tenant shall lease the
Expansion Space on the terms and conditions as contained in this Lease, except
(i) Tenant shall be obligated to commence paying Rent for the Expansion Space on
the Expansion Date, (ii) as of the Expansion Date (a) Annual Base Rent for the
Expansion Space shall be $137,523.75, (b) the term "Premises", as used in this
Lease, shall include the Expansion Space, and (c) the Tenant's Proportionate
Share shall be one hundred percent (100%). Tenant hereby acknowledges and agrees
the Expansion Space shall be tendered to Tenant by Landlord in its then "as-is"
condition.
If any lessee then in possession of the Expansion Space refuses or fails to
deliver possession thereof before the Expansion Date, Landlord shall use
reasonable efforts to cause such lessee to so deliver possession by prosecution
of court process and the date for such Expansion Space to be added to the
Premises shall be delayed until possession of the Expansion Space is delivered
to Tenant; however, such failure of Landlord to deliver possession of the
Expansion Space to Tenant due to the failure of the lessee then in possession to
vacate or to appropriately deliver possession of such Expansion Space to
Landlord shall not be a default of this Lease by Landlord.
The Expansion Option herein granted shall automatically terminate upon the
earliest to occur of (i) the termination of this Lease, (ii) the termination of
Tenant's rights to possession of the Premises, (iii) the assignment of this
Lease or subletting of in excess of fifty percent (50%) of the premises by
Tenant, or (iv) the failure of Tenant to timely or properly exercise the
Expansion Option as provided herein.
ARTICLE XXXII
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Right of First Offer for Expansion Space
----------------------------------------
SECTION 32.1. Right of First Offer. Landlord agrees that on one (1)
occasion during the Initial Term, in the event Tenant fails to timely or
properly exercise the Expansion Option if (i) Tenant is in possession of the
Premises not having either assigned this Lease or sublet fifty percent (50%) or
more of the Premises and (ii) no Event of Default exists under the terms of this
Lease, Landlord will, before entering into any new lease for any portion of the
Expansion Space notify Tenant of the effective date (the date Landlord sends
such notice to Tenant is hereinafter referred to as the "ROFO Date") on which
Tenant may commence to lease the Expansion Space (hereinafter referred to as the
"ROFO Occupancy Date"). If Tenant exercises its rights to lease the Expansion
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Space pursuant to this Section 32.1, Tenant shall lease the Expansion Space on
the terms and conditions as contained in this Lease, except (i) Tenant shall be
obligated to commence paying Rent for the Expansion Space on the ROFO Occupancy
Date, (ii) as of the ROFO Occupancy Date (a) Annual Base Rent for the Expansion
Space shall be $137,523.75, (b) the term "Premises", as used in this Lease,
shall include the Expansion Space, and (c) the Tenant's Proportionate Share
shall be one hundred percent (100%). Tenant hereby acknowledges and agrees the
Expansion Space shall be tendered to Tenant by Landlord in its then "as-is"
condition.
If Tenant does not accept the lease terms referenced above offered by
Landlord within ten (10) business days of the ROFO Date and execute an amendment
to this Lease incorporating the Expansion Space as part of the Premises for
the remaining Term and the terms set forth above within twenty (20) business
days of the ROFO Date, then Landlord will be able to lease the Expansion Space
to any person or entity on such terms and conditions as may be acceptable to
Landlord, and Tenant's right to lease such Expansion Space shall terminate.
The provisions of this paragraph shall not include any portion of the Expansion
Space leased to a tenant of the Building pursuant to an option or right granted
to such tenant as part of its lease of space in the Building.
ARTICLE XXXIII
--------------
Renewal Option
--------------
Section 33.1. Renewal Option. Tenant shall have the option (hereinafter
referred to as the "Renewal Option") to renew the Initial Term for all of the
Premises as of the expiration date of the Initial Term, for one (1) additional
period of five (5) years (a "Renewal Term") upon the following terms and
conditions:
A. Tenant gives Landlord written notice of its exercise of the
Renewal Option at least twelve (12) months prior to the expiration of the
Initial Term.
B. Tenant is not in default under this Lease either on the date
Tenant delivers the notice required under (A) above or at any time
thereafter prior to the commencement of the Renewal Term.
C. All of the terms and provisions of this Lease (except this Article
XXXII) shall be applicable to the Renewal Term, except that Annual Base
Rent for the Renewal Term shall be an amount equal to the lesser of (i) the
sum of EIGHT HUNDRED SEVENTY-NINE THOUSAND SEVENTY-FIVE AND NO/100 DOLLARS
($879,075.00), plus one hundred fifteen percent (115%) of the Base Rent
then being paid for the Expansion Space, or (ii) the Fair Value as defined
below. The term "Fair Value" as used herein shall mean Landlord's
determination, utilizing its reasonable judgment, of an annual amount per
rentable square foot for each year of the applicable Renewal Term for which
Fair Value is being determined beginning with the first (lst) day of the
subject period that a willing, creditworthy, new non-equity tenant leasing
comparable space to Tenant's would pay and a willing, comparable landlord
of an industrial building comparable to the Building in the Chicago
metropolitan area ("Market") would accept at arm's length, giving
appropriate consideration to annual rental rate per rentable square foot,
rental escalations, length of lease term, size and location of the premises
being leased, and other generally applicable terms and conditions
prevailing for comparable space in comparable buildings located in the
Market. In the event Tenant notifies Landlord within ten (10) days after
receipt of notice of Landlord's determination of Fair Value that Tenant
disagrees with Landlord's determination, then, Landlord and Tenant shall
institute an appraisal procedure to determine the Fair Value by jointly
nominating and appointing, within ten (10) days after receipt of notice
from the other party, one appraiser who shall make a determination of the
Fair Value of the Premises. If Landlord and Tenant fail to jointly agree on
the nomination and appointment of one appraiser within said ten (10) day
period, each party shall then each nominate and appoint one appraiser
within fifteen (15) days after the end of the initial ten (10) day period
and give notice of such appointment to the other party. Upon the
appointment of the two appraisers as aforesaid, the two appraisers so
appointed
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shall jointly make a determination of the Fair Value of the Premises. If
either party fails to appoint an appraiser within said fifteen (15) day
period, the appraiser appointed by the other party shall make the
determination of the Fair Value. If the two appraisers are unable to agree
upon a determination of the Fair Value of the Premises within fifteen (15)
days after the appointment of the second appraiser, the two appraisers
shall jointly nominate and appoint a third appraiser within fifteen (15)
days after the expiration of said fifteen (15) day period and give written
notice of such appointment to both parties. In the event the two appraisers
fail to appoint such third appraiser within said fifteen (15) day period,
either party may thereafter apply to the United States District Court for
the Northern District of Illinois for the appointment of such third
appraiser. The third appraiser shall make a determination of the Fair
Value. In the event the three appraisers are unable to agree upon a
determination of the Fair Value of the Premises within fifteen (15)
days after the appointment of the third appraiser, then the Fair Value
shall be an amount equal to the average of the three values contained in
the respective written appraisals submitted by the appraisers. The
appraisers shall make their determination in writing and give notice
thereof to both parties. Each appraiser shall afford both parties a hearing
and the right to submit evidence, with the privilege of cross-examination
in connection with its determination of the Fair Value. In the event any
appraiser appointed as aforesaid shall die or become unable or unwilling to
act before completion of the appraisal, such appraiser's successor shall be
appointed in the same manner as provided above. Any appraiser appointed
hereunder shall (x) be independent of both parties (and of all persons and
entities with interest in either party); (y) have not less than five (5)
years' experience in the appraisal of real property; and (z) hold the
professional designation M.A.I., or if the M.A.I. ceases to exist, a
comparable designation from an equivalent professional appraiser
organization. All appraisal fees and expenses shall be borne equally by the
parties.
Section 33.2. "As Is" Condition. Except as otherwise expressly
provided to the contrary in this Lease, Tenant agrees to accept the Premises to
be covered by this Lease during the Renewal Term in an "as is" physical
condition and Tenant shall not be entitled to receive any allowance, credit,
concession or payment from Landlord for the improvement thereof.
Section 33.3. Amendment. In the event Tenant exercises the Renewal
Option, Landlord and Tenant shall mutually execute and deliver an amendment to
this Lease reflecting the renewal of the Term on the terms herein provided,
which amendment shall be executed and delivered promptly after the determination
of Rent to be applicable to the Renewal Term as hereinabove provided.
Section 33.4. Termination. The Renewal Options herein granted shall
automatically terminate upon the earliest to occur of (i) the expiration or
termination of this Lease, (ii) the termination of Tenant's right to possession
of the Premises, (iii) any assignment of the Lease or subletting by Tenant of in
excess of fifty percent (50%) of the Premises, or (iv) the failure of Tenant to
timely or properly exercise the Renewal Option.
Section 33.5. No Commissions. Landlord and Tenant acknowledge and
agree that no real estate brokerage commission or finder's fee shall be payable
by Landlord in connection with any exercise by Tenant of the Renewal Option
herein contained except as may be provided in any written agreement between
Landlord and Tenant's Broker.
ARTICLE XXXIV
-------------
Security Deposit
----------------
Section 34.1. Security Deposit. Tenant agrees to deposit with
Landlord, upon the execution of this Lease, the Security Deposit as security for
the full and faithful performance by Tenant of each and every term, provision,
covenant and condition of this Lease. To the extent that the Rent increases or
decreases during the Term the Security Deposit shall increase or decrease
accordingly. If Tenant defaults beyond any applicable grace and/or
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cure period in respect to any of the terms, provisions, covenants and conditions
of this Lease including, but not limited to, payment of all rental and other
sums required to be paid by Tenant hereunder, Landlord may use, apply or retain
the whole or any part of the Security Deposit for the payment of such rent in
default, for any sum which Landlord may expend or be required to expend by
reason of Tenant's default including, without limitation, any damages or
deficiency in the reletting of the Premises, whether such damages or deficiency
shall have accrued before or after re-entry by Landlord. If any of the Security
Deposit shall be so used, applied or retained by Landlord at any time or from
time to time, Tenant shall promptly, in each such instance, within five (5) days
of written demand therefor by Landlord, pay to Landlord such additional sums as
may be necessary to restore the Security Deposit to the original amount set
forth in the first Section of this Lease. If Tenant shall fully and faithfully
comply with all the terms, provisions, covenants and conditions of this Lease,
the Security Deposit, or the balance thereof, shall be returned to Tenant after
the following: (a) the time fixed as the expiration of the Term of this Lease;
(b) the removal of Tenant from the Premises; (c) the surrender of the Premises
by Tenant to Landlord in accordance with this Lease; and (d) final determination
of all amounts payable by Tenant hereunder and payment of same. Tenant shall
earn interest on the aforesaid Security Deposit at a passbook interest rate.
Interest shall be paid to Tenant upon Tenant's written request, but not more
than once during any calendar year. In the absence of evidence satisfactory to
Landlord of an assignment of the right to receive the Security Deposit or the
remaining balance thereof, Landlord may return the security deposit to the
original Tenant, regardless of one or more assignments of this Lease.
ARTICLE XXXV
------------
Miscellaneous
-------------
Section 35.1. Captions. The captions of this Lease are for convenience
only and are not to be construed as part of this Lease and shall not be
construed as defining or limiting in any way the scope or intent of the
provisions hereof.
Section 35.2. Severability. If any covenant, agreement or condition of
this Lease or the application thereof to any person, firm or corporation or to
any circumstances, shall to any extent be invalid or unenforceable, the
remainder of this Lease, or the application of such covenant, agreement or
condition to persons, firms or corporations or to circumstances other than those
as to which it is invalid or unenforceable, shall not be affected thereby. Each
covenant, agreement or condition of this Lease shall be valid and enforceable to
the fullest extent permitted by law.
Section 35.3. Applicable Law. This Lease shall be construed and enforced
in accordance with the laws of the state where the Premises are located.
Section 35.4. Amendments in Writing. None of the covenants, terms or
conditions of this Lease, to be kept and performed by either party, shall in any
manner be altered, waived, modified, changed or abandoned, except by a written
instrument, duly signed, acknowledged and delivered by the other party.
Section 35.5. Relationship of Parties. Nothing contained herein shall be
deemed or construed by the parties hereto, nor by any third party, as creating
the relationship of principal and agent or of partnership, or of joint venture
by the parties hereto, it being understood and agreed that no provision
contained in this Lease nor any acts of the parties hereto shall be deemed to
create any relationship other than the relationship of Landlord and Tenant.
Section 35.6. Brokerage. Tenant warrants that it has no dealings with any
real estate broker or agent in connection with this lease other than Landlord's
Broker and Tenant's Broker, and Tenant covenants to pay, hold harmless and
indemnify Landlord from and against any and all cost, expense or liability for
any
40
<PAGE>
compensation, commissions and charges claimed by any other broker or other agent
with respect to this Lease or the negotiation thereof arising out of any acts of
Tenant.
Section 35.7. No Accord and Satisfaction. No payment by Tenant or receipt
by Landlord of a lesser amount than the monthly rent herein stipulated and
additional rent shall be deemed to be other than on account of the earliest
stipulated rent, nor shall any endorsement or statement on any check or any
letter accompanying any check or payment as rent be deemed as accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord's right to recover the balance of such rent or pursue any other remedy
in this Lease provided.
Section 35.8. Joint Effort. The preparation of this Lease has been a joint
effort of the parties hereto and the resulting documents shall not, solely as a
matter of judicial construction, be construed more severely against one of the
parties than the other.
Section 35.9. Waiver of Jury Trial. Landlord and Tenant hereby waive a
jury trial in action brought by the other hereunder.
Section 35.10. Time. Time is of the essence of this Lease, and all
provisions herein relating thereto shall be strictly construed.
Section 35.11. Landlord's Consent. Landlord's granting of any consent
under this Lease, or Landlord's failure to object to any action taken by Tenant
without Landlord's consent required under this Lease, shall not be deemed a
waiver by Landlord of its rights to require such consent for any further similar
act by Tenant. No waiver by either party of any other breach on the part of the
other of the covenants of this Lease shall be construed, taken or held to be a
waiver of any other breach or to be a waiver, acquiescence in or consent to any
further or succeeding breach of the same covenant. None of the Landlord's or
Tenant's covenants under this Lease, and no breach thereof, shall be waived,
altered or modified except by a written instrument executed by Landlord and
Tenant.
Section 35.12. No Partnership. Landlord is not, and shall not be deemed to
be, in any way or for any purpose, the partner, employer, principal, master or
agent of or with Tenant.
Section 35.13. Landlord's Liability. Notwithstanding anything to the
contrary herein contained, there shall be absolutely no personal liability
asserted or enforceable against Landlord or on any persons, firms or entities
who constitute Landlord with respect to any of the terms, covenants, conditions
and provisions of this Lease except as provided in Section 4.9 hereof, and
Tenant shall, subject to the rights of any mortgagee, look solely to the
interest of Landlord, its successors and assigns in the Premises for the
satisfaction of each and every remedy of Tenant in the event of default by
Landlord hereunder; such exculpation of personal liability is absolute and
without any exception whatsoever. If the entity constituting Landlord is a
partnership, Tenant agrees that the deficit capital account of any such partner
shall not be deemed an asset or property of said partnership.
Section 35.14. Landlord Rights. This Lease does not grant any rights to
light or air over or about the Premises. Landlord specifically excepts and
reserves to itself the use of the Common Areas, any roofs, the exterior and
structural components of the Building, all rights to the Land and improvements
below and adjacent to the improved floor level of the Building, to the
improvements and air rights above the Building and to the improvements and air
rights located outside the demising walls of the Building and to such areas
within the Building required for installation of utility lines and other
installations, and no rights with respect thereto are conferred upon Tenant.
Section 35.15. Rent Absolute. Except as otherwise expressly provided
herein, this Lease shall be deemed and construed to be a "net lease" and Tenant
agrees to pay all costs and expenses of every kind and nature whatsoever,
ordinary and extraordinary, arising out of or in connection with the ownership,
maintenance,
41
<PAGE>
repair, replacement, use and occupancy of the Premises during the Term of this
Lease, which, except for the execution and delivery hereof, would otherwise have
been payable by Landlord.
SECTION 35.16. TENANT AUTHORITY. Simultaneously with the execution and
delivery of this Lease by Tenant, Tenant shall deliver to Landlord:
A. Certified resolutions of its board of directors of Tenant
executing this Lease on behalf of Tenant authorizing the execution and
delivery of this Lease.
B. A certificate of incumbency executed by the secretary of any
corporate partner of Tenant executing this Lease on behalf of Tenant
identifying by name, office and facsimile signature the officers of Tenant.
C. A current certificate of good standing issued by the Secretary
of State of the state of incorporation of Tenant and the State of Illinois.
SECTION 35.17. PURCHASE CONTINGENCY. Landlord and Tenant acknowledge
and agree that Landlord's obligations under this Lease are expressly contingent
upon Landlord's purchase of the Land and the closing of such purchase by which
Landlord obtains fee simple title to the Land. In the event that said events
have not occurred on or before September 30, 1996, either party may terminate
this Lease upon notice to the other at any time prior to the closing of such
purchase.
IN WITNESS WHEREOF, the parties have executed this Lease as of the
date set forth above.
LANDLORD: CENTERPOINT PROPERTIES CORPORATION, a Maryland
-------- corporation
By: /s/ Michael M. Mullen
-------------------------------------------
Its: CIO
By: /s/ Fred D. Reynolds
-------------------------------------------
Its: VP of Development
TENANT: PLAYBOY ENTERPRISES, INC., a Delaware corporation
------
By: /s/ Howard Shapiro
-------------------------------------------
Its: Ex. V.P.
By: /s/ Robert D. Campbell
-------------------------------------------
Its: Asst. Secretary
42
<PAGE>
EXHIBIT "A"
SITE PLAN
---------
<PAGE>
EXHIBIT "B"
LEGAL DESCRIPTION OF LAND
-------------------------
PARCEL 1
LOT 10 IN BLOOMINGDALE TOWNSHIP SUPERVISOR'S ASSESSMENT PLAT NO. 1, BEING AN
ASSESSMENT PLAT OF THE NORTH 1/2 OF THE SOUTHEAST 1/4 OF SECTION 1, TOWNSHIP 40
NORTH, RANGE 10 EAST OF THE THIRD PRINCIPAL MERIDIAN, IN DU PAGE COUNTY,
ILLINOIS.
PARCEL 2
THE EAST 69.49 FEET OF THE NORTH LINE THEREOF OF LOT 11 IN BLOOMINGDALE TOWNSHIP
SUPERVISOR'S ASSESSMENT PLAT NO. 1 OF THE NORTH 1/2 OF THE SOUTHEAST 1/4 OF
SECTION 1, TOWNSHIP 40 NORTH, RANGE 10 EAST OF THE THIRD PRINCIPAL MERIDIAN IN
DU PAGE COUNTY, ILLINOIS.
PARCEL 3
LOT 3 IN ROHLWING/THORNDALE SUBDIVISION, BEING A SUBDIVISION IN THE SOUTHEAST
1/4 OF SECTION 1, TOWNSHIP 40 NORTH, RANGE 10 EAST OF THE THIRD PRINCIPAL
MERIDIAN, ACCORDING TO THE PLAT THEREOF RECORDED MAY 30, 1996 AS DOCUMENT NUMBER
R96-090148, IN DU PAGE COUNTY, ILLINOIS.
<PAGE>
EXHIBIT "C"
PRELIMINARY PLANS AND SPECIFICATIONS
------------------------------------
<PAGE>
EXHIBIT "D"
TENANT ESTOPPEL CERTIFICATE
---------------------------
Property Name: __________________________________ ("Property")
Tenant:
To: ________________________________________________
DEFINITIONS:
-----------
Lease Date:
Landlord:
Tenant:
Security Deposit ________________________________________________
Date of Possession:
Rent Commencement Date:
Monthly Base Rent
Annual Base
Rental Amount:
Monthly Deposits:
Term:
Termination Date:
Renewal Option(s):
Square Footage:
Use:
Tenants Address
For Notices:
["Purchaser"] ["Lender"] proposes to [purchase the Property] [finance the
Property] and this Tenant Estoppel Certificate is to be made and delivered in
connection with that [purchase] [financing].
The undersigned Tenant under the above-referenced lease dated as of the
Lease Date between Landlord and Tenant ("Lease"), certifies, represents,
confirms and agrees in favor of [Purchaser] [Lender] the following:
<PAGE>
l. The above-described Lease has not been cancelled, modified, assigned,
extended or amended and contains the entire agreement between Landlord and
Tenant except as follows:
2. Rent has been paid to ____________. There is no Prepaid Rent. The
amount of the Security Deposit is as set forth above, which is currently being
held by Landlord.
3. Tenant took possession of the leased premises on the Date of
Possession, and commenced to pay rent on the Rent Commencement Date, in the
amount of the Monthly Base Rent, each payable in advance. Our current Annual
Base Rental Amount is as set forth above, payable in equal monthly installments,
subject to percentage rental, common area maintenance charges, escalation
charges and other charges in accordance with the terms and provisions of the
Lease, which as of the date hereof total the Monthly Deposit Amount, each
payable in equal monthly installments in advance. We are currently in occupancy
of the leased premises. No "discounts", "free rent", "discounted rent" or
"abatements of rent" have been agreed to or are in effect.
4. The Lease is for the Term set forth above and ending on the
Termination Date, and we have the Renewal Option(s) set forth above.
5. All space and improvements covered by the Lease have been completed
and furnished to the satisfaction of Tenant, all conditions required under the
Lease have been met, and Tenant has accepted and taken possession of the leased
premises on the Date of Possession as set forth above and presently occupies the
leased premises, presently consisting of the Square Footage as set forth above.
6. The Lease is (a) in full force and effect, and (b) free from default
by both Landlord and Tenant; and we have no claims, liens, charges or credits
against Landlord or offsets against rent.
7. The undersigned has not assigned or sublet the Lease, nor does the
undersigned hold the Property under assignment or sublease.
8. There are no other agreements written or oral, between the undersigned
and Landlord with respect to the Lease and/or the leased premises and building.
Landlord has satisfied all commitments, arrangements or understandings made to
induce Tenant to enter into the Lease, and Landlord is not in any respect in
default in the performance of the terms and provisions of the Lease, nor is
there now any fact or condition which, with notice or lapse of time or both,
would become such a default.
9. The leased premises are currently being used for the Use set forth
above.
10. Tenant is maintaining (free of default) all insurance policies that
the Lease requires Tenant to maintain.
11. Neither Landlord nor [Purchaser] [Lender] nor any of their respective
successor or assigns, has or will have any personal liability of any kind or
nature under or in connection with the Lease; and, in the event of a default by
Landlord or [Purchaser] [Lender] under the Lease, Tenant shall look solely to
Landlord's or [Purchaser's] [Lender's] interest in the building in which the
leased premises are located.
12. Tenant is not in any respect in default under the terms and provisions
of the Lease (nor is there now any fact or condition which, with notice or lapse
of time or both, would become such a default), and Tenant has not assigned,
transferred or hypothecated its interest under the Lease.
13. Tenant (i) does not have any option or preferential right to purchase
all or any part of the leased premises or all or any part of the building of
which the leased premises are a part; and (ii) does not have any right, title or
interest with respect to the leased premises other than as lessee under the
Lease.
2
<PAGE>
14. We understand that [Purchaser] [Lenderl is planning to [purchase]
[finance] the Property on which the leased premises is located to Purchaser, and
we agree to make all payments required under the Lease to [Purchaser] [Lender]
upon our receipt of notice from Landlord and/or [Purchaser] [Lender]. Further,
upon receipt of such notice, we will thereafter look to [Purchaser] [Lender] and
not Landlord as the landlord under the Lease. We agree to give all notices
required to be given by us to Landlord under the Lease to [Purchaser] [Lender]
upon our receipt of said notice.
15. The statements contained herein may be relied upon by [Purchaser]
[Lender] and by any prospective purchaser or lender of the Property.
16. If Tenant is a Corporation, the undersigned is a duly appointed
officer of the corporation signing this Agreement, and is the incumbent in the
office indicated under his or her name. If Tenant is a partnership or joint
venture, the undersigned is a duly appointed partner or officer of the
partnership or joint venture signing this certificate. In any event, the
undersigned individual is duly authorized to execute this Agreement on behalf of
Tenant.
17. Tenant (a) executes this certificate with the understanding that
[Purchaser] [Lender] is contemplating [purchasing] [financing] the Property, and
that if [Purchaser] [Lender] [purchases] [finances] the Property, [Purchaser]
[Lender] will do so in material reliance on this certificate; and (b) agrees
that the certifications and representations made herein shall survive such
acquisition.
18. The current address to which all notices to Tenant as required under
the Lease should be sent is the Tenant's Address for Notices.
19. [Purchaser's] [Lender's] rights hereunder shall inure to its
successors and assigns.
IN WITNESS WHEREOF, Tenant has executed this estoppel certificate as of
this ___ day of ______, 199_.
a
---------------------------------
-----------------
By:
-------------------------------
Its:
3
<PAGE>
[LETTERHEAD OF FCL BUILDERS, INC.]
REVISED PRELIMINARY SPECIFICATIONS OF A BUILDING FOR
PLAYBOY ENTERPRISES, INC.
SEPTEMBER 4, 1996
This outline specification, along with the attached preliminary site plan A100,
dated September 4, 1996, composite floor plan A101, dated September 4, 1996,
first floor plan A102, dated September 4, 1996, second floor plan A103, dated
September 4, 1996, exterior elevation A105, dated September 4, 1996 and
landscape plan L100, dated September 4, 1996 prepared by Cornerstone Architects,
Inc. Job No. 96020, shall define the scope of a new facility for Playboy
Enterprises, Inc.
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
<S> <C>
General Description.................................Section 1.00
Design..............................................Section 2.00
Site Work...........................................Section 3.00
Building Shell......................................Section 4.00
Interior Improvements...............................Section 5.00
H V.A.C. System.....................................Section 6.00
Plumbing............................................Section 7.00
Fire Protection.....................................Section 8.00
Electrical .........................................Section 9 00
Miscellaneous.......................................Section 10.00
</TABLE>
-2-
<PAGE>
1.00 GENERAL DESCRIPTION
-------------------
1.10 Size of Building and Tract:
The total facility will be approximately 128,867 square feet, located
on an 8.3521 acre parcel (363,819.51 square feet) on in the southwest
quadrant of Rohlwing Road and Old Thorndale Road, Itasca, Illinois.
1.20 SIZE OF BUILDING (BY UNIT):
Playboy Enterprises, Inc. 106,038 Square Feet
Expansion Space 22,829 Square Feet
-------
Total...................... 128,867 Square Feet
=======
1.30 SIZE OF PLAYBOY ENTERPRISES, INC. (BY USE):
Office - 2 story 35,130 Square Feet
Warehouse 70,908 Square Feet
-------
Total...................... 106,038 Square Feet
=======
Please note that warehouse square footage includes:
Warehouse Office & Washrooms 700 Square Feet
Art Storage 2,000 Square Feet
Retail 1,300 Square Feet
1.40 EXPANSION AREA:
There will be additional parking expansion (beyond the initial 275
cars) for one hundred twenty-five (125) cars as per site plan
totaling 400 car capacity.
2.00 DESIGN
------
The design of the facility will be completed by registered architects
and engineers. The design will include architectural, structural,
civil, mechanical, plumbing, fire protection, electrical and
landscaping plans. The plans will be in sufficient detail to allow
issuance of a building permit by local authorities. All building
permit and tap-on fees are included.
3.00 SITE WORK
---------
3.10 Grading:
All work necessary to clear, strip, excavate, backfill and
grade the site for the proposed building construction in
accordance with recommendations of an independent soils
engineer.
-3-
<PAGE>
3.20 PAVED AREAS:
3.21 AUTOMOBILE PARKING - Two hundred seventy-five (275) initial
stalls to be provided, handicap as required. Paving to be 2
1/2" asphalt over 9" stone. Striping and concrete bumpers
(where needed) provided. Handicap signage is included.
3.22 TRUCK DRIVE - Paving to be 3" asphalt over 12" stone.
3.23 TRUCK DOCK - Paving be 8" concrete reinforced with 6" x 6" x
6/6 gauge steel mesh, on 3" compacted stone, extending 60'
from building at all depressed docks and drive-in door.
3.30 Exterior patio lunch areas, sidewalks, plazas, stoops and
pads - To be 5" concrete. broom finished over compacted stone.
3.40 Exterior Lighting - Install two (2) bollard lights to
illuminate the entry walk, 400 watt wall mounted high pressure
sodium light fixtures to illuminate car parking and truck dock
areas and 400 watt pole-mounted high pressure sodium light
fixtures to illuminate remote car parking areas in accordance
with local code requirement.
3.50 LANDSCAPING:
Provide landscaping including sodding, seeding, fine grading,
plantings, lawn irrigation, retaining wall and fence around
detention area and patio area as shown on drawings.
3.60 All necessary storm, sanitary and water connections to
existing municipal lines located at property line. All
plumbing materials to conform with local code.
3.70 Provide a fire loop around building with fire hydrants located
as required by the Village of Itasca.
3.80 Exterior electrical lines servicing adjoining building to the
northwest to be removed and rerouted as per Commonwealth
Edison design.
4.00 BUILDING SHELL
--------------
4.10 EXTERIOR WALLS:
All elevations of building to receive load bearing insulated
precast concrete wall panels. Panels to have an R value of 10.
Wall panels and accent reveals to be stained to Playboy
Enterprises, Inc.'s choice of color.
Prefinished aluminum coping to be installed on all elevations
of the building. Coping to be painted to Playboy Enterprises,
Inc.'s choice of standard color.
-4-
<PAGE>
4.20 Windows:
Provide two sections of full height, curtain wall glazing system with two
(2) 3' x 7' glass doors and sidelights with 1" tinted insulated glass in
aluminum thermal break frames on office elevations as per elevation study.
Exterior aluminum mullions to be shop painted to Playboy Enterprises,
Inc.'s choice of standard color. Frames to be manufactured by Kawneer or
equal.
4.30 Main Office and Retail Entry Plazas:
Entry plazas to receive 5" poured in place concrete sidewalk leading from
parking lot to office entry and retail entry as shown on enclosed plans.
Entrance canopy to be supported by architectural columns. Soffit to receive
a skin coat of synthetic plaster, dryvit or equal, painted. One (1) glass
door and metal canopy in lieu of hollow metal door at Retail Area entrance.
Also two (2) 6' x 6' tinted insulated windows to the exterior wall of the
Retail Area.
4.40 Steel Structure:
Steel structure to be a combination of long span steel bar joists, beams
and wide flange columns or truss girders and tube columns. Roof deck to be
22 gauge, prime painted off-white, standard ribbed deck. Columns to be
spaced approximately 43.4' x 50' on center, as per floor plan. Bottom of
joists to be 28' clear from top of slab.
4.41 Provide a 125# live load mezzanine totaling 17,565 square feet (less
open air Lobby Area) constructed of structural steel, corrugated
deck, 3" concrete topping and one (1) metal pan stairway with
concrete filled treads, one (1) exposed ornamental stairway at main
reception and one (1) exposed pre-fabricated metal stairway and
landing with removable handrail for loading into second story
Computer/Phone Room.
4.42 Provide a two (2) stop passenger elevator at an allowance of $35,000.
4.50 Roof:
4.51 Roof System:
Roof to be a single ply, 45 mil, ballasted EPDM membrane roofing
system, Firestone, Carlisle or equal with isocyanurate insulation (R
value equal to 14). This system is to be applied in accordance with
manufacturer's specifications, and shall carry a manufacturer's
fifteen (15) year full system warranty.
-5-
<PAGE>
4.52 STORM PIPING AND DRAINS:
All roof drainage via interior PVC downspouts with insulated
horizontal offsets.
4.53 SKYLIGHTS:
Install ten (10) 4' x 8' double dome insulated skylights in
warehouse area. Location to be determined by Playboy
Enterprises, Inc. (SEE ALTERNATE, LAST PAGE).
4.60 FLOOR SLABS:
Concrete floor slabs to be 6" (3,500 p.s.i.), reinforced with
fibermesh, steel trowel finish on 3" compacted stone in warehouse
area. Floor tolerances to be F/F/=35 and F/L/=20 in warehouse area.
4" concrete with 6" x 6" x 10/10 gauge steel mesh, steel trowel
finish on 3" compacted stone in first floor office areas. Concrete
floor to be sawcut in both directions, no greater than 14.5' on
center.
4.70 TRUCK DOCKS AND OVERHEAD DOORS:
4.71 TRUCK LOADING DOORS:
Exterior truck docks to receive four (4) 9' x 10' manually
operated insulated metal overhead doors with two (2) vision
lites per door at shipping docks and four (4) 9' x 10'
electrically operated insulated metal overhead doors with two
(2) vision lites per door at receiving docks.
Grade level truck/van entrance to receive one (1) - 12' x 14'
electrically operated, insulated metal overhead door.
4.72 TRUCK DOCK ACCESSORIES:
Provide eight (8) 30,000# capacity 6' x 8' mechanical levelers.
Provide eight (8) dock seals with bumpers. Provide one (1)
Phoenix type light at each of four (4) shipping truck dock
locations.
5.00 INTERIOR IMPROVEMENTS:
----------------------
5.10 WALLS
5.11 Demising wall separating Playboy Warehouse from Tenant B
Warehouse to be full height concrete block. Demising walls
separating office and warehouse to be full height concrete
block. Demising walls separating Art Storage from
Warehouse/Office and separating Retail Area from
Warehouse/Office to be concrete block to a height of 12' with
two sided drywall and metal stud partition above to bottom of
deck.
-6-
<PAGE>
5.12 Interior office partition walls to be 5/8" gypsum wallboard
over 3-5/8" metal studs - 2.0' on center, located per plan.
Wallboard to be taped, sanded, and painted with two (2) coats
of flat latex paint. Wet walls in washrooms to receive
wainscot of ceramic tile over moisture resistant wallboard.
Walls around washrooms, and conference rooms shall be
insulated. All interior office walls shall penetrate ceiling
grid.
5.13 Perimeter Walls - Perimeter walls in office areas shall be
5/8" gypsum board over 1-1/2" furring strips over masonry or
precast walls. Finish to match other gypsum board walls.
5.14 Interior of warehouse walls to be field painted.
5.20 FLOORING:
5.21 Reception & Vestibule - Install quarry tile and base.
Office Area - Install carpet at $16.00 per square yard
installed with 5' quarry tile main walkways in customer
service.
Retail - Install carpet at $16.00 per square yard installed,
and 30 square feet of quarry tile at the Retail Area entrance.
Art Room Warehouse Offices & Warehouse Washrooms - Apply two
(2) coats of lapidolith floor sealer.
Office Washrooms - Install ceramic tile and base.
Lunchrooms & Janitor Closets - Install VCT tile with vinyl
base.
5.22 Warehouse Area - Exposed concrete to be treated with two (2)
coats of lapidolith floor sealer.
5.30 CEILING:
5/8" x 24" x 24" Armstrong Glacier or equal acoustical ceiling board
in Chicago Metallic or equal suspended grid system throughout the
office area. Ceiling height to be 9' in main Office Areas and Retail
Areas except for full height reception area and (PLUS/MINUS SIGN)
11' in Lunch Room and Customer Service Areas. Standard 2' x 4'
ceiling tiles to be installed in Warehouse Offices. Art Storage Area
to be exposed off-white deck.
5.40 DOORS, FRAMES, HARDWARE:
Doors in metal stud and sheetrock partitions to be full height (8'
10") 1-3/4" solid core "A" grade oak. Stain finish to be selected by
Playboy Enterprises, Inc. Doors in concrete block partitions and
precast panels are to be 1-3/4" hollow metal doors, painted to match
the walls.
-7-
<PAGE>
5.50 Provide a 2,000 square foot, air conditioned art storage room within
the warehouse area as per plan.
6.00 H.V.A.C. SYSTEMS
----------------
6.10 OFFICE AREA, RETAIL AREA, ART STORAGE ROOM AND WAREHOUSE OFFICES
(EXCLUDING WAREHOUSE WASHROOM) - A combination heating and cooling
system furnished by a nationally known supplier such as Carrier,
Trane or equal. This equipment to be designed to maintain 75
(degrees) F. when outside temperature is 95 (degrees) F. in summer,
and to maintain 75 (degrees) F. when outside temperature is -10
(degrees) F. in winter. Exhaust fans are included for all washrooms,
conference rooms and the lunchroom areas to conform with local code.
Provide 1,200 CFM exhaust fan with speed control for Smokers' Lounge.
Computer Room to receive a separate zone.
6.20 WAREHOUSE:
Roof mounted 1800 MBH, 40,000 CFM air pressurization system achieving
one (1) air change per hour, RAPID AIR or equal. System to provide 65
(degrees) F. at -10 (degrees) F. outside temperature.
7.00 PLUMBING
--------
7.10 Provide complete plumbing system with separate rest room facilities
for first and second floor Office men and women as well as
warehouse/truckers men's room plumbing to consist of. . .
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
FIXTURE TOTAL 1ST FLOOR 1ST FLOOR 2ND FLOOR 2ND FLOOR WAREHOUSE WAREHOUSE
------- ----- --------- --------- --------- --------- --------- ---------
WOMEN MEN WOMEN MEN WOMEN MEN
----- --- ----- --- ----- ---
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Toilet 16 5 3 3 2 2 1
--------------------------------------------------------------------------------------------
Urinals 5 2 2 1
--------------------------------------------------------------------------------------------
Drop in 12 3 3 3 3
Lavatories
--------------------------------------------------------------------------------------------
Wall Mounted 2 1 1
Lavatory
--------------------------------------------------------------------------------------------
Hot Water 3
Heaters
--------------------------------------------------------------------------------------------
Lunch Room 1
Sink
--------------------------------------------------------------------------------------------
Electric 3
Watercooler
--------------------------------------------------------------------------------------------
Coffee Area l
Sink
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Janitor Sink 2
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Total Plumbing Fixtures 45
</TABLE>
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8.00 FIRE PROTECTION
Install an light Hazard Fire Protection System throughout first and second
floor office and retail areas. Install an ESFR sprinkler system throughout
warehouse and art storage areas. Heads to be located above bar joists.
Fire pump and pump room are included as required by code.
Install five (5) 1-1/2" hose stations throughout the Warehouse Area.
Provide fire alarm system in accordance with code requirements.
9.00 ELECTRICAL SERVICE, OUTLETS AND LIGHTING
9.10 ELECTRICAL SERVICE:
Install a 2,000 ampere, 277/480 volt, 3 phase, 4 wire main
electrical service. Service to be separately metered for Unit A and
Unit B. Also install Office and Warehouse subpanels as required for
building loads only.
9.20 ELECTRICAL AND TELEPHONE OUTLETS:
Install 110 volt outlets throughout the Office and Retail Areas as
shown on drawing numbers 102 and 103 dated, September 9, 1996.
Install telephone/data conduit stub-outs, located as shown on
drawing number 102 and 103, dated September 9, 1996.
All first floor Customer Service workstations to receive electrical,
phone and data from wall mounted connection points with the
exception of raised General Office Area and the adjoining twenty
(20) workstations which will be fed via floor slab conduit.
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9.30 Lighting
Office and Retail Areas - Office and Retail Areas to receive 2' x 4' lay-
in, four tube fluorescent fixtures, located to provide an initial 70
footcandles throughout.
Art Storage Area - Art Storage Area to receive 400 watt metal halide
light fixtures to provide an initial 30 footcandles.
Warehouse Areas - Warehouse areas to receive 400 watt metal halide light
fixtures located to provide an initial 30 footcandles throughout
(PLUS/MINUS SIGN)40,000 square feet (60%) of warehouse and 40 footcandles
throughout (PLUS/MINUS SIGN)26,800 square feet (40%) of warehouse area.
Assuming general warehouse conditions (no racking, process equipment or
other obstructions). Upon receipt of an approved rack and/or process
layout, additional lighting, if any, will be provided and installed at
tenant's expense.
Emergency lighting to be installed throughout building to conform to
local code assuming general warehouse conditions (no racking, process
equipment or other obstructions). Upon receipt of an approved rack and/or
process layout, additional emergency lighting, if any, will be provided
and installed at tenant's expense.
10.00 MISCELLANEOUS
Inclusions:
-- Scheduled construction time is seven (7) months for initial building
shell (warehouse) and an additional three (3) months for office
finish-out from the issuance of a complete building permit.
-- Builders' Risk insurance.
-- Architectural plans and specifications.
-- Surveys and soil borings.
-- Construction guarantee for one (1) year.
Exclusions:
-- Air conditioning of warehouse rest rooms.
-- Electronic security systems and automated H.V.A.C. shut down
systems.
-- Field painting of steel or piping.
-- Winter conditions.
-- Utility companies' excess facility charges.
-- Task lighting and process related installations.
-- Fire extinguishers and additional hose stations.
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ALTERNATES: NOTE: All prices are quoted as initial year rent per square foot.
1. Provide a UPS System for portions of Office Area.
(Cost to be determined after specification is established.)
2. Provide an additional ten (10) 4' x 8' double dome insulated skylights,
totaling twenty (20). Location to be determined by Playboy Enterprises,
Inc.
ADD $ .01
Decision required by October 15, 1996.
3. Add exterior stair and exterior door to south side of Warehouse Offices (at
Receiving Area).
ADD $.005
Decision required by October 1, 1996.
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[BLUEPRINT OF FINAL LANDSCAPE PLAN APPEARS HERE]
<PAGE>
[BLUEPRINT OF FINAL SITE PLAN APPEARS HERE]
<PAGE>
[BLUEPRINT OF COMPOSITE PLAN APPEARS HERE]
<PAGE>
[BLUEPRINT OF FIRST FLOOR PLAN APPEARS HERE]
<PAGE>
[BLUEPRINT OF SECOND FLOOR PLAN APPEARS HERE]
<PAGE>
[BLUEPRINT OF EXTERIOR ELEVATIONS APPEARS HERE]
<PAGE>
[PLAT OF CONSOLIDATION AND BLUEPRINT APPEARS HERE]
<PAGE>
[BLUEPRINT OF FIRST FLOOR PLANS APPEARS HERE]
<PAGE>
[BLUEPRINT OF SECOND FLOOR PLAN APPEARS HERE]