Document:

OFFICE LEASE

Exhibit

10.1an

 

OFFICE LEASE

 

CITY PARK CORPORATE CENTER

LINCOLNSHIRE, ILLINOIS

 

Between

 

ECD -LINCOLNSHIRE OFFICE, L.L.C.

Landlord,

 

and

 

SAUER-DANFOSS INC.

Tenant

 

 

TABLE OF CONTENTS

 

	

  Section

  	

   

  
	

   

  	

   

  
	

  1.

  	

  Base

  Rent

  
	

   

  	

   

  
	

  2.

  	

  Additional Rent

  
	

   

  	

   

  
	

  3.

  	

  Security Deposit

  
	

   

  	

   

  
	

  4.

  	

  Use of Premises

  
	

   

  	

   

  
	

  5.

  	

  Services

  
	

   

  	

   

  
	

  6.

  	

  Condition and Care of

  Premises

  
	

   

  	

   

  
	

  7.

  	

  Return of Premises

  
	

   

  	

   

  
	

  8.

  	

  Holding Over

  
	

   

  	

   

  
	

  9.

  	

  Rules and Regulations

  
	

   

  	

   

  
	

  10.

  	

  Rights Reserved to Landlord

  
	

   

  	

   

  
	

  11.

  	

  Alterations

  
	

   

  	

   

  
	

  12.

  	

  Assignment and Subletting

  
	

   

  	

   

  
	

  13.

  	

  Waiver of Certain

  Claims; Indemnity

  
	

   

  	

   

  
	

  14.

  	

  Damage or Destruction

  by Casualty

  
	

   

  	

   

  
	

  15.

  	

  Eminent Domain

  
	

   

  	

   

  
	

  16.

  	

  Default:  Landlord’s Rights and Remedies

  
	

   

  	

   

  
	

  17.

  	

  Subordination

  
	

   

  	

   

  
	

  18.

  	

  Mortgagee and

  Ground Lessor Protection

  
	

   

  	

   

  
	

  19.

  	

  Defaults by Landlord

  
	

   

  	

   

  
	

  20.

  	

  Insurance

  
	

   

  	

   

  

 

i

 

	

  21.

  	

  Nonwaiver

  
	

   

  	

   

  
	

  22.

  	

  Estoppel Certificate

  
	

   

  	

   

  
	

  23.

  	

  Tenant Authorization

  
	

   

  	

   

  
	

  24.

  	

  Real Estate Brokers

  
	

   

  	

   

  
	

  25.

  	

  Notices

  
	

   

  	

   

  
	

  26.

  	

  Miscellaneous

  
	

   

  	

   

  
	

  27.

  	

  Delivery of Possession

  
	

   

  	

   

  
	

  28.

  	

  Substitution of Premises

  
	

   

  	

   

  
	

  29.

  	

  Signs

  
	

   

  	

   

  
	

  30.

  	

  Landlord

  
	

   

  	

   

  
	

  31.

  	

  Title and Covenant

  Against Liens

  
	

   

  	

   

  
	

  32.

  	

  Communications and

  Computer Lines

  
	

   

  	

   

  
	

  33.

  	

  Parking

  
	

   

  	

   

  
	

  34.

  	

  Entry Cards

  
	

   

  	

   

  
	

  38.

  	

  Exculpatory Provisions

  

 

	

  Exhibit

  A

  	

  -

  	

  Floor

  Plan of Premises

  
	

  Exhibit

  B

  	

  -

  	

  Rules

  and Regulations

  
	

  Exhibit

  C

  	

  -

  	

  Form

  of Estoppel Certificate

  
	

  Exhibit

  D

  	

  -

  	

  Master

  Site Plan

  
	

  Exhibit

  E

  	

  -

  	

  Workletter

  Agreement

  
	

  Exhibit

  F

  	

  -

  	

  Floor

  Plan for Offer Space

  
	

  Exhibit

  G

  	

  -

  	

  Janitorial

  Specifications

  
	

  Exhibit

  H

  	

  -

  	

  Right

  of First Refusal

  
	

  Exhibit

  I

  	

  -

  	

  Market

  Rent Determination

  
	

  Exhibit

  J

  	

  -

  	

  Trunk

  Line Ductwork

  

 

ii

 

OFFICE LEASE

 

CITY PARK CORPORATE CENTER

LINCOLNSHIRE, ILLINOIS

 

BASIC LEASE PROVISIONS

 

	

  1.

  	

   

  	

  Landlord and Address:

  	

   

  	

  ECD-LINCOLNSHIRE OFFICE, L.L.C.

  
	

   

  	

   

  	

   

  	

   

  	

  c/o ECD Company

  
	

   

  	

   

  	

   

  	

   

  	

  250 Parkway Drive, Suite 120

  
	

   

  	

   

  	

   

  	

   

  	

  Lincolnshire, Illinois 60069

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  2.

  	

   

  	

  Tenant and Current Address:

  	

   

  	

  SAUER-DANFOSS INC.

  
	

   

  	

   

  	

   

  	

   

  	

  2800 East 13th Street

  
	

   

  	

   

  	

   

  	

   

  	

  Ames, Iowa 50010

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  3.

  	

   

  	

  Guarantor(s) and Address(es):

  	

   

  	

  N/A

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  4.

  	

   

  	

  Premises: 

  Suite No. 270, Second (2nd) Floor, as shown on the floor

  plan attached hereto as Exhibit A

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  5.

  	

   

  	

  Date of Lease: 

  March 19, 2002

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  6.

  	

   

  	

  Term:  Seven

  (7) years, Zero (0) months

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  7.

  	

   

  	

  Commencement Date: 

  June 1, 2002

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  8.

  	

   

  	

  Expiration Date: 

  May 31, 2009

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  9.

  	

   

  	

  Monthly Base Rent: 

  See Base Rent Schedule in Section 1 of the Lease

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  10.

  	

   

  	

  Rentable Area of the Premises:  12,612 square feet (including a loss

  factor equal to 11.5%)

  
	

   

  	

   

  	

   

  	

   

  	

   

  

 

iii

 

	

  11.

  	

   

  	

  Tenant’s Proportionate Share:  18.31%

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  12.

  	

   

  	

  Security Deposit: 

  $26,012.25

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  13.

  	

   

  	

  Leasing Broker(s) (if any) and address:

  	

   

  	

   

  

 

	

  Chris Cummins

  	

   

  	

  Sean D. Kropke

  
	

  Insignia ESG

  	

   

  	

  CB Richard Ellis, Inc.

  
	

  520 Lake Cook

  Road, #175

  	

   

  	

  Bannockburn Corporate Center

  
	

  Deerfield,

  Illinois 60015

  	

   

  	

  3000 Lakeside Drive, Suite 105-S

  
	

   

  	

   

  	

  Bannockburn, Illinois 60015

  

 

The words identified in foregoing Basic Lease Provisions shall have the

meanings ascribed to them herein for all purposes of this Lease.  The terms and provisions of this Basic Lease

Provisions shall be deemed to be incorporated within this Lease.

 

iv

 

OFFICE LEASE

 

THIS LEASE (the “Lease”) is made and

entered into as of the 19th day of March, 2002, by and between ECD-LINCOLNSHIRE

OFFICE, L.L.C., an Illinois limited liability company (herein called

“Landlord”) and SAUER-DANFOSS INC., a Delaware corporation (herein called

“Tenant”).

 

W  I  T  N  E  S

S  E  T  H:

 

Landlord hereby agrees to lease to Tenant, and Tenant

hereby agrees to accept, the premises (hereinafter referred to as the

“Premises”) designated on the plan attached hereto as Exhibit A and commonly

described as Suite 270 containing 12,612 square feet of “rentable area” on the

second (2nd) floor of the building (hereinafter referred to as the

“Building”) commonly known as City Park Corporate Center and located at 250

Parkway Drive, Lincolnshire, Illinois 

60069, in the Village of Lincolnshire, Lake County, Illinois and shown

on the Master Site Plan attached as Exhibit “D” to this Lease (such

parcel of land is hereinafter referred to, together with all present and future

easements, additions, improvements and other rights appurtenant thereto, as the

“Land”), subject to the terms and conditions of this Lease.

 

IN CONSIDERATION THEREOF, THE PARTIES HERETO COVENANT AND

AGREE:

 

1.                            Term;

Base Rent; Rentable Area.  The term of this Lease (the “Term”) shall

commence on the Commencement Date and end on the Expiration Date, unless

extended or sooner terminated as provided herein.  As used in this Lease, the term “Lease Year” shall mean (i) if

the Commencement Date is the first day of a calendar month, the twelve (12) month

period commencing on the Commencement Date, or (ii) if the Commencement Date is

not the first day of a calendar month, the period commencing on the

Commencement Date and ending on the last day of the twelfth (12th)

full calendar month of the Term and, in either case, each succeeding twelve (12)

month period thereafter which falls in whole or in part during the Term.

Commencing on the Commencement Date, Tenant shall pay an annual base rent

(herein called “Base Rent”) to Landlord for the Premises which is payable in

equal monthly installments (herein called “Monthly Base Rent”), all as more

particularly set forth on the following Base Rent Schedule.  Except as otherwise expressly provided in

this Lease, Monthly Base Rent shall be payable without demand and without any

set-off, deduction or counterclaim whatsoever, in advance on the first day of

the Term and on the first day of each calendar month thereafter of the Term,

and at the same per diem rate for fractions of a month if the Term shall begin

on any date except the first day, or shall end on any day except the last day

of a calendar month.

 

1

 

BASE RENT SCHEDULE

 

	

  Period

  	

   

  	

  Base

  Annual Rental

  Per Square

  Foot

  	

   

  	

  Base

  Annual

  Rent

  	

   

  	

  Monthly

  Base Rent

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  June 1, 2002 -

  May 31, 2003

  	

   

  	

  $

  	

  18.25

  	

   

  	

  $

  	

  230,169.00

  	

   

  	

  $

  	

  19,180.75

  	

   

  
	

  June 1, 2003 -

  May 31, 2004

  	

   

  	

  $

  	

  18.80

  	

   

  	

  $

  	

  237,105.60

  	

   

  	

  $

  	

  19,758.80

  	

   

  
	

  June 1, 2004 -

  May 31, 2005

  	

   

  	

  $

  	

  19.36

  	

   

  	

  $

  	

  244,168.32

  	

   

  	

  $

  	

  20,347.36

  	

   

  
	

  June 1, 2005 -

  May 31, 2006

  	

   

  	

  $

  	

  19.94

  	

   

  	

  $

  	

  251,483.28

  	

   

  	

  $

  	

  20,956.94

  	

   

  
	

  June 1, 2006 -

  May 31, 2007

  	

   

  	

  $

  	

  20.54

  	

   

  	

  $

  	

  259,050.48

  	

   

  	

  $

  	

  21,587.54

  	

   

  
	

  June 1, 2007 -

  May 31, 2008

  	

   

  	

  $

  	

  21.16

  	

   

  	

  $

  	

  266,869.92

  	

   

  	

  $

  	

  22,239.16

  	

   

  
	

  June 1, 2008 -

  May 31, 2009

  	

   

  	

  $

  	

  21.79

  	

   

  	

  $

  	

  274,815.48

  	

   

  	

  $

  	

  22,901.29

  	

   

  

 

Notwithstanding any of the foregoing to the contrary,

Tenant shall be entitled to an abatement of the Monthly Base Rent due and owing

under this Lease for the first (1st), second (2nd),

thirteenth (13th), twenty-fifth (25th) and thirty-sixth

(36th) months of the Term; provided, however, in no event shall the

foregoing abatement limit or restrict Tenant’s obligation to pay any and all

Additional Rent due under this Lease, including, without limitation, any and

all Tax Adjustment and Expense Adjustment (each as hereinafter defined) due

hereunder.

 

Base Rent, Additional Rent (as hereinafter defined),

Estimated Additional Rent Payment (as hereinafter defined) and all other

amounts becoming due from Tenant to Landlord hereunder (herein collectively

called the “Rent”) shall be paid in lawful money of the United States to

Landlord at its address set forth in Section 25 of this Lease, or as otherwise

designated from time to time by written notice from Landlord to Tenant.  Concurrently with the execution hereof,

Tenant shall pay Landlord Monthly Base Rent for the first full calendar month

of the Term in which such Monthly Base Rent is due and owing hereunder.  The payment of Rent hereunder is independent

of each and every other covenant and agreement contained in this Lease.

 

Landlord hereby authorizes Tenant to take possession

of all or any part of the Premises prior to the beginning of the Term solely

for purposes of performing Tenant’s Work (as more particularly set forth in the

Workletter Agreement attached to this Lease as Exhibit “E”).  So long as such possession by Tenant of all

or any part of the Premises prior to the beginning of the Term is solely for

purposes of performing Tenant’s Work then in no event shall Tenant be obligated

to pay any Rent or other charges during such pre-Term occupancy; provided,

however, Tenant shall be responsible to pay any and all utility charges

consumed by or on behalf of Tenant with respect to the Premises in the

performance of Tenant’s Work and/or as a result of such pre-Term

occupancy.  During such pre-Term occupancy,

except for the payment of Rent as noted above (other than the noted utility

charges) all of the covenants and conditions of this Lease shall apply to and

shall control such pre-Term occupancy. 

In the event such pre-Term occupancy is for the conduct of Tenant’s

business within all or any portion of the Premises, then Tenant shall be

obligated to pay Rent for such pre-Term occupancy during such period of time at

the rate set forth in Sections 1 and 2 hereof. 

If the Premises are occupied for a fractional month 

2

 

and Rent is due in accordance with the terms hereof, then Rent shall be

prorated on a per diem basis for such fractional month.

 

If Tenant fails to pay Monthly Base Rent or any

installment of Additional Rent (as hereinafter defined) within ten (10) days

after the same has become due, both Tenant and Landlord agree that Landlord

will incur additional expenses for collection efforts, handling costs and the

potential impairment of credit on loans which may be secured, in part, on this

Lease.  Accordingly, in the event Tenant

fails to pay such amounts within said ten (10) day period, Landlord shall be

entitled to recover from Tenant three percent (3%) of the amount past due as

liquidated damages.

 

2.                            Additional Rent.  In addition to Base Rent, Tenant shall also

pay Additional Rent with respect to each Adjustment Year (as hereinafter

defined) in accordance with the following provisions:              

(a)                          Definitions.  As used in this Lease,

 

(i)                                     “Adjustment

Date” shall mean the first day of the Term and each January 1 thereafter

occurring within the Term.

 

(ii)                                  “Adjustment

Year” shall mean each calendar year during which an Adjustment Date occurs

 

(iii)                               “Declaration”

shall mean that certain Declaration of Restrictions, Covenants and Easements

[Lincolnshire Center of Business] dated as of March 26, 1997, by Economic

Community Development, Inc., an Illinois corporation (“ECD”), and Aptakisic

Sand Corporation, an Illinois corporation (“Aptakisic”), recorded with the

County Recorder of Lake County, Illinois, as Document No. 3948473, as same may

be amended from time to time.

 

(iv)                              (A)          Subject to the exclusions set forth in

Section 2(a)(iv)(B), “Expenses” shall mean and include all reasonable expenses,

costs, fees and disbursements paid or incurred by or on behalf of the Landlord

for owning, managing, operating, maintaining and repairing the Building and

Land, the personal property used in conjunction therewith (said Building, Land

and personalty being herein collectively called the “Project”) including such

amounts paid to affiliates of Landlord, including without limitation, all costs

and expenses incurred by Landlord with respect to the Land under the terms and

conditions of the Declaration.  For

purposes of the foregoing, Expenses may include, but shall not be limited to,

the cost and expense of security and security devices and systems (including,

without limitation, the cost of any third party security 

 

3

 

service for the Building and/or Project); the cost and

expense of snow, ice and trash removal; the cost and expense of cleaning and

sweeping; the cost and expense of planting and replacing decorations, flowers

and landscaping; the cost and expense of maintenance, repair and replacement of

utility systems; the cost and expense of electricity, steam, water, sewer,

fuel, heating, lighting and air conditioning; the cost and expense of window

cleaning; the cost and expense of janitorial service; the cost and expense of

insurance including, but not limited to, fire, extended coverage, all risk,

liability, worker’s compensation or any other insurance carried by Landlord and

applicable to the Project; the cost and expense of painting; the cost and

expense of uniforms; the cost and expense of supplies; the cost and expense of

sundries; sales or use taxes on supplies and services; wages and salaries of

all persons engaged in the operation, management, maintenance and repair of the

Project and so-called fringe benefits including, without limitation, social

security taxes, unemployment insurance taxes, cost for providing coverage for

disability benefits, cost of any pensions, hospitalization, welfare or

retirement plans, or any other similar expenses incurred under the provisions

of any collective bargaining agreement, or any other cost or expense which

Landlord pays or incurs to provide benefits for employees so engaged in the

operation, management, maintenance or repair of the Project; the charges of any

independent contractor who is maintaining or repairing the Project; legal and

accounting expenses including, but not limited to, such expenses that relate to

seeking or obtaining reductions in and refunds of real estate taxes;

advertising and promotional expenses; the cost and expense of maintaining and

operating any elevators, escalators, staircases, bridges and towers not

exclusively serving any tenant or other occupant of the Project; the cost and

expense of monitoring and enforcing the parking rights granted to tenants in

the Project; the cost and expense due and payable by the owner of the Building

with respect to the maintenance, operation and repair of the detention pond and

Parkway Drive as set forth in the Declaration and the cost and expense of

maintaining and repairing common area signage including, without limitation,

any message board or directory signage; and any other expense or charge,

whether or not hereinbefore mentioned, which, in accordance with generally

accepted accounting and management principles, would be considered an expense

of owning, managing, operating, maintaining or repairing the Project, except as

hereinafter provided.  In addition,

Expenses shall include an amount equal to

 

4

 

fifteen percent (15%) of the total aforementioned

expenses (“Landlord’s Administrative Fee”) to compensate Landlord for

supervision and maintenance of the Project and for accounting, bookkeeping and

collection of the Expenses and Taxes (as defined below); provided, however, in

no event shall Expenses include any additional management or administrative fee

other than the Landlord’s Administrative Fee noted above.  Expenses shall not include costs or other

items included within the meaning of the term “Taxes” and any expenditures for

which Landlord has been reimbursed (other than pursuant to this Article),

except as hereinafter provided. 

Notwithstanding anything contained in this clause (iv) to the contrary,

if any item of Expenses, although paid or incurred in one (1) year, relates to

more than one (1) calendar year such item shall be allocated proportionately

among such related calendar years. 

Expenses shall also not include costs of alterations of the premises of

tenants of the Building, interest and principal payments on mortgages, ground

rental payments, and real estate brokerage and leasing commissions, except as

hereinafter otherwise provided.

 

(B)           Expenses

shall not include: (a) depreciation under generally accepted accounting

principles; (b) costs of repairs and replacements to the extent that proceeds

of insurance or condemnation awards are received therefor; (c) the cost of a

“Capital Expenditure” or capital expense except as otherwise expressly set

forth herein; (d) costs, fines or penalties resulting from Landlord’s breach of

this Lease or any other lease of any portion of the Project or imposed upon

Landlord by any governmental authority as a result of the violation of any law

by Landlord; (e) the cost of any item or service to the extent of any direct

reimbursement Landlord actually receives with respect thereto from Tenant or

any other tenant or occupant of the Project or any third party (other than

reimbursement Landlord receives through payment of Expenses); (f) the cost of

building out leasable space in preparation for occupancy (excluding any portion

of said cost that results from repairs, replacements or maintenance work that

would otherwise have been performed or was otherwise required and would be

appropriately included in Expenses); (g) leasing commissions, attorneys’ fees,

costs, disbursements and other expenses incurred in connection with leasing,

renovating, improving, decorating, painting or redecorating space other than

the common areas; (h) principal and interest payments on any mortgage or deed

of trust covering the Project; (i) rentals under

 

5

 

any ground or underlying lease affecting the Project;

(j) the cost of construction of new gross leasable floor space and new common

area floor space or any remodeling, renovation, expansion or redevelopment of

the Project; (k) any costs incurred in connection with the original

construction and development of the Project (including without limitation the

cost of initial landscaping and equipping the Project and the costs of

correcting any defects in the initial design or construction of the Project);

(l) the cost of any abatement or remediation work (pursuant to Section 26

below) unless such work is required in connection with a change in any law,

code, ordinance, rule or regulation arising after the full execution of this

Lease relating to the operation, repair, maintenance and/or replacement at the

Project which would be undertaken and performed by Landlord in the ordinary

course of such activities, in which case such items may be included within

Expenses; (m) the cost of any item or service provided directly to another

tenant for its exclusive benefit which is not available to Tenant or is

available to Tenant only for an additional direct charge (in addition to

Tenant’s payment of Tenant’s proportionate share of Expenses); (n) attorneys’

fees, costs and disbursements incurred in connection with matters relating to

the formation of Landlord as an entity and maintaining its continued existence

as an entity (such as, for example, the preparation and filing of corporate or

partnership documents); (o) any expense resulting from the negligence or

willful misconduct of Landlord; (p) any bad debt loss or rent loss suffered by

Landlord; (q) fees or charges in connection with Landlord’s refinancing of any

loan secured by, or the negotiation of any ground lease of, the Project; (r)

the cost of any services provided by affiliates or related parties of Landlord

that exceeds prevailing competitive rates for the provision of such services by

reputable independent third parties; (s) repair or restoration work occasioned

by fire, windstorm or other casualty or as a result of the exercise of the

rights of eminent domain; (t) repair costs covered by warranties or guaranties

solely to the extent of any actual recovery under same (Landlord hereby

covenants and agrees to use its good faith and reasonable efforts to effect

recovery under any such warranties or guaranties); (u) wages, salaries and

other compensation paid to any employee above the level of the Project manager

and any portion of the general overhead of operating Landlord’s or any Project

manager’s central off-site office; (v) expenses incurred for any other tenant

for the maintenance or repair of such tenant’s premises or the utilities,

telecommunication facilities or other such services, all of which

 

6

 

are exclusively serving such tenant’s premises and any

other services and/or items which Landlord provides to one or more tenants of

the Building which are not provided generally to all tenants of the Building;

(x) in the event Landlord owns other real property other than the Project, in

no event shall Expenses include any ownership costs related to other real

property owned by Landlord other than the Project; and (y) any cost or expense

which would not be considered a normal cost or expense associated with the

ownership, management, operation, maintenance or repair of the Building in

accordance with generally accepted accounting principles as applied to office

building operating expenses. 

Notwithstanding anything in this Lease to the contrary, there will be no

duplication in charges to the Tenant by reason of the provision in this Lease

setting forth Tenant’s obligation to reimburse Landlord for Expenses or by

reason of any other provision in this Lease. 

Further, notwithstanding anything to the contrary contained herein, any

item which is a “Capital Expenditure” or any other capital expense under

generally accepted accounting principles shall only be included in Expenses as

amortized on a straightline basis over such period as Landlord shall reasonably

determine but in no event less than the lesser of (i) that period prescribed by

generally accepted accounting principles or (ii) the reasonably estimated

useful life of such capital improvement (with interest accruing on the

unamortized portion thereof at the effective interest rate then in effect at

the time such improvements are substantially completed per annum) and the

amount included in Expenses in any Lease Year shall be equal to the annual

amortized amount.  Such a “Capital

Expenditure” or “Capital Expense” shall be included in Expenses only if it

either (1) relates to the repair or replacement of any portion of the Building

and/or the parking garage, (2) is intended to result in a reduction of

Expenses, and/or (3) is made during any Lease Year in compliance with any

applicable laws, codes, rules or regulations which were not in existence or

were not applicable to the Project on the date this Lease was executed.

 

(C)           Notwithstanding

anything contained in this clause (iv) of Section 2(a) to the contrary, if less

than ninety-five percent (95%) of the Building’s rentable area shall have been

occupied by tenants during all or any portion of an Adjustment Year, that

portion of Expenses which vary with occupancy for such Adjustment Year shall be

appropriately adjusted to reflect such Expenses as though the Building had been

ninety-five percent (95%) occupied

 

7

 

throughout such Adjustment Year.

 

(v)                                 “Taxes”

shall mean real estate taxes, assessments (whether they be general or special),

sewer rents, rates and charges, transit and transit district taxes, taxes based

upon the receipt of rent, and any other federal, state or local governmental

charge whether general, special, ordinary or extraordinary (but not including

penalties or interest for late payment or income or franchise taxes, capital

stock, inheritance, estate, gift, or any other taxes imposed upon or measured

by the Landlord’s income or profits, unless the same shall be imposed in lieu

of real estate taxes or other ad valorem taxes), which may now or hereafter be

levied, assessed or imposed against the Building or the Land, or both.  The Building and the Land are herein

collectively called the “Real Property.”

Notwithstanding anything

contained in this clause (v) of Section 2(a) to the contrary:

 

(A)                          If at any time during

the Term of this Lease the method of taxation then prevailing shall be altered

so that any new tax, assessment, levy, imposition or charge or any part thereof

shall be imposed upon Landlord in place or partly in place of any such Taxes,

or contemplated increase therein, and shall be measured by or be based in whole

or in part upon the Real Property or the rents or other income therefrom, then

all such new taxes, assessments, levies, impositions or charges or part

thereof, to the extent that they are so measured or based, shall be included in

Taxes levied, assessed or imposed against the Real Property to the extent that

such items would be payable if the Real Property were the only property of

Landlord subject thereto and the income received by Landlord from the Real

Property were the only income of Landlord.

 

(B)                           Notwithstanding the

year with respect to which any such taxes or assessments are levied, (i) in the

case of special taxes or assessments which may be payable in  installments, Landlord shall pay the special

taxes or assessments in the maximum number of installments and only the amount

of each installment, plus any interest payable thereon, paid during a calendar

year shall be included in Taxes for that year and (ii) if any taxes or

assessments payable during any calendar year shall be computed with respect to

a period in excess of twelve calendar months, then taxes or assessments shall

be allocated proportionately over the period in question.  Except as provided in the preceding

sentence, all references to Taxes “for” a particular year shall be deemed to

refer to Taxes levied, assessed or imposed for such year without regard to when

such Taxes are payable.

 

8

 

(C)                           Taxes shall also

include any personal property taxes (attributable to the calendar year in which

paid) imposed upon the furniture, fixtures, machinery, equipment, apparatus,

systems and appurtenances used in connection with the Real Property or Project

or the operation thereof.

 

(D)                          If the Building is not

at least ninety-five percent (95%) occupied by tenants during all or a portion

of any Adjustment Year, then so long as all or any portion of such Taxes will

vary with occupancy (and Landlord can provide reasonable documentation from the

applicable taxing authority to reflect that such Taxes vary with occupancy),

then Landlord may elect to make an appropriate adjustment for such year of such

component of Taxes which vary with occupancy to reflect Taxes as if the

Building and such adjustment had been fully occupied during the entire

Adjustment Year.

 

(vi)                              “Tenant’s

Proportionate Share” shall mean the percentage set forth in Clause 11 of the

Basic Lease Provisions.

 

(vii)                           “Additional

Rent” shall mean Tax Adjustment and Expense Adjustment (as such terms are

defined in Section 2(b)), Estimated Additional Rent Payment (as defined in

Section 2(c) hereof) and any other amounts other than Base Rent which become

due under this Lease.

 

(b)                          Computation

of Additional Rent. 

Tenant shall pay Tenant’s Proportionate Share of Taxes (“Tax

Adjustment”) and Tenant’s Proportionate Share of Expenses (“Expense

Adjustment”) for each Adjustment Year during which an Adjustment Date falls.

 

(c)                          Payments

of Additional Rent; Projections.  Tenant shall make payments on account of its Tax Adjustment and

Expense Adjustment with respect to each Adjustment Year (“Estimated Additional

Rent Payment”) effective as of the 

Adjustment Date with respect to each such Adjustment Year as follows:

 

(i)                                     Landlord

may, prior to each Adjustment Date or from time to time during the Adjustment

Year in which such Adjustment Date occurs, deliver to Tenant a written notice

or notices (“Projection Notice”) setting forth (A) Landlord’s reasonable

estimates, forecasts or projections (collectively, the “Projections”) of Taxes

and Expenses with respect to such Adjustment Year, (B) Tenant’s Tax Adjustment

and Expense Adjustment with respect to such Adjustment Year based upon the

Projections, and (C) the amount of Tenant’s Estimated Additional Rent Payment

based upon Tenant’s Tax Adjustment and Expense Adjustment as estimated by

Landlord.  Notwithstanding any Projections

set forth in writing or otherwise 

 

9

 

furnished to Tenant, Landlord does not thereby make

any representations as to the actual amounts of Tax Adjustment and Expense

Adjustment, which actual amounts may be higher or lower than any Projections.

 

(ii)                                  Until

such time as Landlord furnishes a Projection Notice with respect to an

Adjustment Year, Tenant shall pay to Landlord a monthly installment of

Estimated Additional Rent Payment (at the time of and together with each

payment of Monthly Base Rent) equal to the greater of the latest monthly

installment of Estimated Additional Rent Payment or one-twelfth (1/12) of

Tenant’s latest Tax Adjustment and Expense Adjustment as determined by

Landlord.  On or before the first day of

the next calendar month following Landlord’s service of a Projection Notice,

and on or before the first day of each month thereafter, Tenant shall pay to

Landlord one-twelfth (1/12) of the Estimated Additional Rent Payment shown in

the Projection Notice. Within fifteen (15) days following Landlord’s Service of

a Projection Notice, Tenant shall also pay Landlord a lump sum equal to the

Estimated Additional Rent Payment shown in the Projection Notice less the sum

of:  (A) any previous payments of

Estimated Additional Rent Payment made during such Adjustment Year and (B)

monthly installments of Estimated Additional Rent Payment due for the remainder

of such Adjustment Year pursuant to such Projection Notice.

 

(d)                          Readjustments.  The following readjustments with regard to

the Tax Adjustment and Expense Adjustment shall be made by Landlord and Tenant:

 

(i)                                     Following

the end of each Adjustment Year and after Landlord shall have determined the

amount of Expenses to be used in calculating the Expense Adjustment for such

Adjustment Year, Landlord shall notify Tenant in writing (any such notice of

Expenses and Expense Adjustment herein called “Landlord’s Expense Statement”)

of such Expenses and Tenant’s Expense Adjustment for such Adjustment Year.  If the Expense Adjustment owed for such

Adjustment Year exceeds the Expense Adjustment component of the Estimated

Additional Rent Payment paid by Tenant during such Adjustment Year, then Tenant

shall, within thirty (30) days after the date of Landlord’s Expense Statement,

pay to Landlord an amount equal to the excess of the Expense Adjustment over

the Expense Adjustment component of the Estimated Additional Rent Payment paid

by Tenant during such Adjustment Year. 

If the Expense Adjustment component of the Estimated Additional Rent

Payment paid by Tenant during such Adjustment Year exceeds the Expense

Adjustment owed for such Adjustment Year, then, at Tenant’s option, Landlord

shall either refund the excess to Tenant within thirty (30) days after the date

of Landlord’s Expense Statement or credit such excess to Rent payable after

 

10

 

the date of Landlord’s Expense Statement; provided,

however, in the event Tenant fails to provide Landlord with written notice of

Tenant’s election to either refund such excess or credit against the next Rent

payable within ten (10) days after the date of Landlord’s Expense Statement,

then Tenant shall be deemed to have elected to have Landlord credit such excess

to Rent payable after the date of Landlord’s Expense Statement.

 

(ii)                                  Following

the end of each Adjustment Year and after Landlord shall have determined the

actual amount of Taxes to be used in calculating the Tax Adjustment for such

Adjustment Year, Landlord shall notify Tenant in writing (any such notice of

Taxes and Tax Adjustment herein called “Landlord’s Tax Statement”) of such

Taxes for such Adjustment Year.  If the

Tax Adjustment owed for such Adjustment Year exceeds the Tax Adjustment

component of the Estimated Additional Rent Payment paid by Tenant during such

Adjustment Year, then Tenant shall, within thirty (30) days after the date of

Landlord’s Tax Statement, pay to Landlord an amount equal to the excess of the

Tax Adjustment over the Tax Adjustment component of the Estimated Additional

Rent Payment paid by Tenant during such Adjustment Year.  If the Tax Adjustment component of the

Estimated Additional Rent Payment paid by Tenant during such Adjustment Year

exceeds the Tax Adjustment owed for such Adjustment Year, then, at Tenant’s

option, Landlord shall either refund the excess to Tenant within thirty (30)

days after the date of Landlord’s Tax Statement or credit such excess to Rent

payable after the date of Landlord’s Tax Statement; provided, however, in the

event Tenant fails to provide Landlord with written notice of Tenant’s election

to either refund such excess or credit against the next Rent payable within ten

(10) days after the date of Landlord’s Tax Statement, then Tenant shall be

deemed to have elected to have Landlord credit such excess to Rent payable

after the date of Landlord’s Tax Statement.

 

(iii)                               No

interest or penalties shall accrue on any amounts which Landlord is obligated

to credit or pay to Tenant by reason of this Section 2(d).

 

(iv)                              Landlord

shall maintain books and records showing Taxes and Expenses in accordance with

sound accounting and management practices. 

Tenant or its representative shall have the right to examine Landlord’s

books and records showing Taxes and Expenses upon reasonable prior notice and

during normal business hours at any time within six (6) months following the

furnishing by Landlord to Tenant of Landlord’s Expense Statement or Landlord’s

Tax Statement, as the case may be. 

Unless Tenant shall take written exception to any item of Taxes or

Expenses, specifying in detail the reasons for such exception as to a

particular item, within six (6)

 

11

 

months following service of Landlord’s Expense

Statement or Landlord’s Tax Statement, as the case may be, then Landlord’s Tax

Statement and Landlord’s Expense Statement shall be considered as final and

accepted by Tenant as to such Taxes and Expenses.  If Tenant notifies Landlord within such six (6) month period that

Tenant disputes any specific item or items in any Landlord’s Expense Statement

or Landlord’s Tax Statement, as the case may be, and such dispute is not

resolved between Landlord and Tenant within thirty (30) days after the date

such notice is given by Tenant, either party, within fifteen (15) days

following the expiration of such thirty (30) day period, may refer such

disputed item or items for determination to an independent certified public

accountant selected by such party and approved by the other party, which

approval shall not be unreasonably withheld or delayed, and the determination

of such accountant shall be final, conclusive and binding upon Landlord and

Tenant.  Any error in the determination

of Expenses or Taxes which is determined pursuant to the foregoing procedures shall

result in an appropriate adjustment in Expenses and/or Taxes, as the case may

be, due and/or payable under this Lease for such Adjustment Year promptly after

such determination.  Tenant agrees to

pay all costs involved in such determination except in the case of any Expense

Adjustment and/or Tax Adjustment for any Adjustment Year where it is determined

that Landlord has overcharged Tenant for such amounts by more than ten percent

(10%), in which case Landlord shall pay the reasonable actual out-of-pocket

costs and expenses incurred in such determination (but in no event more than

$2,500.00).  Notwithstanding any

exception made by Tenant, Tenant shall pay Landlord the full amount of its

Estimated Additional Rent Payment and Additional Rent, subject to readjustment

at such time as any such exception may be resolved.  In addition to the foregoing, Landlord and Tenant acknowledge and

agree that if any such determination of Expenses or Taxes by such independent

certified public accountant determines an error in any line item of Expenses or

Taxes in excess of fifteen percent (15%) of such amount, then Tenant shall be

entitled to review the books and records maintained by Landlord with respect to

Expenses or Taxes solely with respect to the line item which was in such

material error for the prior three (3) calendar years (the “Look-Back”) and the

provisions of this clause (iv) shall be applicable to such Look-Back in

Landlord’s books and records; provided, however, in the event any such

Look-Back determines an error in such line item component of Expenses or Taxes

in any of the preceding three (3) calendar years in excess of fifteen percent

(15%) in any such calendar year, then Tenant shall be entitled to review the

books and records maintained by Landlord with respect to such line item of

Expenses or Taxes for the  three (3)

calendar years immediately preceding the calendar year in which such fifteen

percent (15%) error was present.

 

12

 

In no event shall Tenant be entitled to review any

portion of Landlord’s books and records except with respect to the line item

which is in such material error. 

Landlord hereby covenants and agrees that it shall maintain its books

and records with respect to Expenses and Taxes for a period of not less than

three (3) full calendar years so as to permit Tenant to engage in such a

Look-Back in the event of a material error in a line item of same and if such

Look-Back involves a calendar year for which Landlord is no longer obligated to

maintain such books and records, Landlord shall use its good faith and

commercially reasonable efforts to provide Tenant with such books and records

as Landlord then has available to perform such Look-Back review.  Notwithstanding the foregoing, in no event

shall Landlord have any obligation to obtain for Tenant in connection with any

such Look-Back any third party invoices or documentation if such invoices

and/or documentation were not customarily maintained by Landlord with respect

to its books and records.

 

(e)                          Proration

and Survival.  With

respect to any Adjustment Year which does not fall entirely within the Term,

Tenant shall be obligated to pay as Additional Rent for such Adjustment Year

only a pro rata share of Additional Rent as hereinabove determined, based upon

the number of days of the Term falling within the Adjustment Year.  Following expiration or termination of this

Lease, Tenant shall pay any Additional Rent due to the Landlord within fifteen

(15) days after the date of Landlord’s Expense Statement and Tax Statement sent

to Tenant.  Without limitation of any

other obligations of Landlord or Tenant which shall survive the expiration of

the Term, the obligations with respect to Additional Rent provided for in this

Section 2 shall survive the expiration or termination of this Lease.

 

(f)                           No

Decrease In Base Rent. 

In no event shall any Additional Rent result in a decrease of the Base

Rent payable hereunder as set forth in Section 1 hereof.

 

(g)                          Net Lease.  This Lease is an absolutely net Lease to Landlord.  It is the intent of the parties hereto that

the Base Rent, Tax Adjustment, Expense Adjustment and other sums payable under

this Lease shall be an absolutely net return to Landlord and that Tenant shall

pay all costs and expense relating to the Premises and the business carried on

therein, unless otherwise expressly provided in this Lease.  Any amount or obligation herein relating to

the Premises which is not expressly declared to be that of Landlord shall be

deemed to be an obligation of Tenant to be performed by Tenant at Tenant’s sole

cost and expense.

 

(h)                          No

Termination.  This Lease

shall not terminate, nor shall Tenant have any right to terminate this Lease

(except as otherwise expressly provided herein), nor shall Tenant be entitled

to any abatement or reduction of any Rent (except as otherwise expressly

provided herein), nor shall the obligations of Tenant under this Lease be

affected, by reason of (i) any damage to or destruction of all or any part of

the Premises or the Building from whatever cause except as otherwise expressly

provided herein; (ii) the taking of the Premises or the Building or 

 

13

 

any portion thereof by condemnation, requisition or

otherwise, except as otherwise expressly provided herein; (iii) intentionally

deleted; (iv) intentionally deleted; (v) Tenant’s acquisition or ownership of

all or any part of the Premises except as otherwise expressly provided herein;

(vi) intentionally deleted; or (vii) any other cause whether similar or

dissimilar to the foregoing, any present or future law to the contrary

notwithstanding except as otherwise expressly provided herein.  It is the intention of the parties hereto

that the obligations of Tenant hereunder shall be separate and independent

covenants and agreements, that Rent and all other sums payable by Tenant

hereunder shall continue to be payable in all events and that the obligations

of Tenant hereunder shall continue unaffected, unless the requirement to pay or

perform the same shall have been terminated pursuant to an express provision of

this Lease.

 

(i)                           Tenant

Remains Obligated. 

Intentionally deleted.

 

(j)                           Waiver.  Tenant waives all rights which may now or

hereafter be conferred by law (i) to quit, terminate or surrender this Lease or

the Premises or any part thereof or (ii) to any abatement, suspension,

deferment or reduction of Rent or any other sums payable under this Lease,

except as otherwise expressly provided herein.

 

3.                            Security Deposit.  Tenant has deposited with Landlord the

Security Deposit (as set forth in the Basic Lease Provisions portion of this

Lease) as security for the full and faithful performance of every provision of

this Lease to be performed by Tenant. 

If Tenant defaults with respect to any provision of this Lease,

including, but not limited to, the provisions relating to the payment of Rent,

Landlord may use, apply or retain all or any part of this Security Deposit for

the payment of any Rent and any other sum in default, or for the payment of any

other amount which Landlord may spend or become obligated to spend by reason of

Tenant’s default or to compensate Landlord for any other loss or damage which

Landlord may suffer by reason of Tenant’s default. If any portion of said

deposit is to be used or applied, Tenant shall within five (5) days after

written demand therefor deposit cash with Landlord in an amount sufficient to

restore the Security Deposit to its original amount and Tenant’s failure to do

so shall be a material breach of this Lease. 

Tenant may not elect to apply any portion of the Security Deposit toward

the payment of Rent or other charges payable by Tenant under this Lease.  Landlord shall not be required to keep this

Security Deposit separate from its general funds and Tenant shall not be entitled

to interest on such deposit.  If Tenant

shall fully and faithfully perform every provision of this Lease to be

performed by it, the Security Deposit or any balance thereof shall be returned

to Tenant (or at Landlord’s option to the last assignee of Tenant’s interest

hereunder) within thirty (30) days after the expiration of the Term and

Tenant’s vacation of the Premises. 

Tenant hereby agrees not to look to any mortgagee as mortgagee,

mortgagee in possession, or successor in title to the Building for accountability

for any security deposit required by the Landlord hereunder, unless said sums

have actually been received by said mortgagee as security for the Tenant’s

performance of this Lease.  Landlord may

deliver the funds deposited hereunder by Tenant to the purchaser of Landlord’s

interest in the Building, in the event that such interest is sold, and

thereupon Landlord shall be discharged from any further liability with respect

to such Security Deposit. 

 

14

 

4.                            Use of Premises.

(a)                          Tenant

shall use and occupy the Premises for general office purposes, and for no other

use or purpose; provided, in addition to the foregoing in no event shall Tenant

be permitted to use all or any portion of the Premises as a shared office or

suite business (such as a Regus, HQ or Intelligent Office System).  Tenant shall not use or occupy the Premises

or permit the use or occupancy of the Premises for any purpose or in any manner

which (i) is unlawful or in violation of any applicable legal or governmental

requirement, ordinance or rule; (ii) may be dangerous to persons or property;

(iii) may invalidate or increase the amount of premiums for any policy of

insurance affecting the Project, and if any additional amounts of insurance

premiums are so incurred, Tenant shall pay to Landlord the additional amounts

on demand; (iv) may create a nuisance, disturb any other tenant of the Building

or injure the reputation of the Building; or (v) will be in conflict with or in

violation of any fire insurance policies covering the Premises or Project.  Tenant, at its sole expense, shall comply

with all rules, regulations and requirements of governmental and

quasi-governmental authorities applicable to its use of the Premises.

 

(b)                          Tenant,

at Tenant’s sole cost and expense, shall obtain all licenses, certificates of

occupancy for the Premises and any other permits required by any governmental

authority having jurisdiction thereover, if any (copies of which licenses,

certificates of occupancy and other permits Tenant shall furnish Landlord).

 

5.                            Services.  Landlord shall furnish the following

services, which shall all be deemed Expenses (except to the extent to be paid

entirely by Tenant, as hereinafter provided):

(a)                          Heat

and air conditioning when necessary to provide a temperature condition

required  for comfortable occupancy of

the Premises under normal business operations, daily from 8:00 A.M. to 6:00

P.M. and Saturdays from 8:00 A.M. to 1:00 P.M., Sundays and holidays excepted

(provided, however, that Landlord and Tenant acknowledge and agree that the

windows in the Premises can be opened to the outside and in the event the

windows in the Premises are open to the outside in any manner, then (i) in no

event shall Landlord be responsible for the maintenance of any temperature

condition in the Premises which is or may be affected by such open windows; and

(ii) Tenant hereby waives any and all loss, cost, damage or expense that Tenant

may incur or suffer to Tenant’s property or business operation as a result of

such open windows).  In connection with

such heating, ventilating and air conditioning system, (a) Landlord hereby

covenants and agrees that it shall use reasonable and diligent efforts to

operate such system in an effective manner for the Building throughout the Term

of this Lease, and (b) Landlord hereby represents that the heating and

ventilating and air conditioning system servicing that portion of the Building

within which the Premises is located is capable of providing to Tenant approximately

14, 500 CFM’s discharged at 55 degrees (+/-3 degrees) in accordance with ASHRE

standards and permitted tolerances on a non-exclusive basis with the other

areas of that portion of the Building which is serviced by such portion of the

heating, ventilating and air-conditioning system.  Landlord hereby covenants and agrees that Landlord shall install

in accordance with the construction schedule called for in the Workletter

Agreement, the Building trunk line ductwork per the sketch attached to this

Lease as Exhibit “J”. 

 

15

 

Notwithstanding the foregoing, in no event shall

Landlord have any obligation to install Tenant’s VAV boxes with respect to the

heating, ventilating and air conditioning system servicing the Premises and

Tenant hereby covenants and agrees that any such VAV boxes installed in

connection therewith shall be compatible with Building standard components and

compatible with the Building-wide control systems for said heating, ventilating

and air conditioning systems.

 

(b)                          Cold

water for drinking, lavatory and toilet purposes and hot water for lavatory

purposes, in restrooms at locations designated by Landlord, in common with

other tenants of the Building.  Tenant

shall pay Landlord additional rent at rates fixed by Landlord for water

furnished for sinks or restrooms within the Premises or for any other

purpose.  Tenant shall not waste or

permit the waste of water.

 

(c)                          Daily

janitor service in and about the Premises, Saturdays, Sundays and holidays

excepted in accordance with the janitorial specifications attached to this

Lease as Exhibit “G”.  Tenant

shall not provide any other janitor services or cleaning.

 

(d)                          Passenger

elevator service in common with Landlord and other tenants, 24 hours a day, 7

days a week.  Landlord, however, may

provide limited passenger elevator service at hours between 5:00 P.M. and 8:00

A.M. and on Saturdays, Sundays and holidays. 

Use of  elevator service for

freight, deliveries or construction shall be subject to reasonable scheduling

by Landlord.

 

(e)                          Electricity

shall be distributed to the Premises by the electric utility company serving

the Building; provided, however, Landlord hereby represents that in accordance

with the construction schedule called for in the Workletter Agreement, Landlord

will provide two (2) meter sockets in the common electrical room on the floor

of the Building on which the Premises is located to service two (2) 200 AMP

distribution panels for the Premises (such distribution panels to be installed

by Tenant as a part of Tenant’s Work). 

In addition, Landlord and Tenant acknowledge and agree that Landlord

shall provide to Tenant an additional contribution for Tenant’s Work in the

amount of $2,000.00 for the purpose of the installation of the electrical panel

in the Premises by Tenant.

 

(i)                                     Tenant

shall at its cost make all necessary arrangements with the electric utility

company for metering 

                and paying for electric current furnished to the

Premises.

 

(ii)                                  All

electricity used during the performance of janitor service, or the making of

any alterations or repairs 

                in the Premises, or the operation of any special or

supplemental heating, ventilating or air conditioning 

                systems serving the Premises shall be paid for by

Tenant.

 

(iii)                               Landlord

shall permit Tenant to install electric baseboard heating where specified by

Tenant’s architect 

                as a part of Tenant’s Work.

 

16

 

(f)                           Landlord

hereby represents that the Building has been designed for the non-exclusive use

by telecommunication companies through the use of a collocation facility

adjacent to the Building.  Landlord

shall make available to the Premises certain risers from the Building to a

shared rider room on the floor of the Building upon which the Premises is

located.  Landlord shall permit

reputable telecommunication carriers to utilize the Building’s collocation

facility in order to provide service to tenants of the Building.  Tenant shall arrange for telephone, data and

communication service with one or more of such reputable telecommunications

companies and Tenant shall be responsible to pay for all such service.  Tenant acknowledges that Landlord owns the

risers and cables within the Building and Landlord shall permit Tenant to

connect to such risers and cables on such reasonable terms and conditions as

Landlord may prescribe in its reasonable discretion (so long as same are not

inconsistent with the terms and provisions of this Lease and so long as

Landlord does not charge a fee or other charge in connection with same) and

Landlord shall not have any liability with respect to such service.  Tenant shall be responsible to install

conduit or other connections from its Premises to the shared telecommunication

riser room on the floor of the Building upon which the Premises is

located.  Such connection shall be

installed by Tenant as a part of Tenant’s Work and shall be included within the

plans and specifications therefor which are to be approved by Landlord.

 

(g)                          Landlord

shall not be obligated to furnish any services other than those services

specified in Sections 5(a) through 5(e) or to furnish such services except for

after-hours heating and air conditioning at times other than as specified in

such Sections.  If Landlord agrees to

provide extra or additional services, Tenant shall, for such extra or

additional services, pay 110% of Landlord’s actual cost reasonably incurred in

providing them.  Landlord shall provide

after-hours heating and air conditioning at Landlord’s actual cost for such

services (with no mark up or administrative fee), such amount to be considered

Additional Rent hereunder.  If more than

one tenant directly benefits from such after-hours heating and air conditioning

services, then the cost of such after-hours heating and air conditioning

services shall be allocated proportionately between or among the benefitting

tenants which have requested in writing such after-hours heating and air

conditioning services based upon the amount of time each tenant benefits and

the relative square footage each occupies within the Building.  Landlord shall provide such after-hours

heating and air conditioning services only upon prior written request from

Tenant no later than twenty-four (24) hours prior to the date upon which such

after-hours heating and air conditioning services are requested, such notice to

be delivered to Landlord during a business day and no later than 1:00 P.M. on

such business day in order for Landlord to be obligated to provide such

after-hours heating and air conditioning services for the next business day;

provided, however, Landlord shall endeavor to provide any such after-hours

heating, ventilating and air-conditioning service to Tenant upon written notice

which is shorter in time than that set forth hereinabove if it is reasonably

possible for Landlord to do so (except that Tenant hereby acknowledges and

agrees that Landlord shall incur no liability and in no event shall be deemed

in breach of this Lease if Landlord is not able to provide such after-hours

heating, ventilating and air-conditioning service on such shorter notice).  All charges for such extra or additional

services shall be due and payable at the same time as the installment of Base

Rent with which

 

17

 

they are billed, or if billed separately, shall be due

and payable within ten (10) days after such billing.  Any such billings for extra or additional services shall include

an itemization of the extra or additional services rendered, and the charge for

each such service.

 

Failure by Tenant to promptly pay Landlord’s proper

charges for any additional services other than those services specified in

Sections 5(a) through 5(e) (including, without limitation, any after-hours

heating and air conditioning services) shall give Landlord, upon not less than

thirty (30) days notice, the right to discontinue furnishing such additional

services, and no such discontinuance shall be deemed an eviction or disturbance

of Tenant’s use of the Premises or render Landlord liable for damages or

relieve Tenant from performance of Tenant’s obligations under this Lease.

 

Tenant agrees that Landlord and its agents shall not

be liable for damages, by abatement of Rent or otherwise, for failure to

furnish or delay in furnishing any service or failure to perform or delay in

performing any other obligation required to be performed by Landlord under this

Lease or by operation of law, when such failure or delay is occasioned, in

whole or in part, by repairs, renewals or improvements, by any strike, lockout

or other labor trouble, by inability to secure electricity, gas, water, or

other fuel at the Building after reasonable effort to do so, by any accident or

casualty whatsoever, by the act or default of Tenant or other parties, or by

any cause beyond the reasonable control of Landlord; and such failures or

delays shall never be deemed to constitute an eviction or disturbance of the

Tenant’s use and possession of the Premises or relieve the Tenant from paying

Rent or performing any of its obligations under this Lease.  Notwithstanding the foregoing, if any

essential services (such as heating, ventilating and air conditioning services,

passenger elevator service, electricity, or water) are interrupted, and such interruption

results solely from the negligent or willful misconduct of Landlord or its

agents, contractors or employees, and such interruption renders the Premises

untenantable for Tenant, then if such interruption is not remedied within five

(5) business days following Landlord’s receipt of Tenant’s written notice of

same, then Tenant shall be entitled to an equitable abatement of Base Rent due

under this Lease until the earlier of (i) the date such interruption ceases, or

(ii) the date the Premises is no longer rendered untenantable thereby.  In no event shall the foregoing abatement be

deemed to limit or restrict Tenant’s obligation to pay any and all amounts of

Additional Rent due under this Lease.

 

6.                              Condition and Care of Premises.

(a)                             Tenant’s

taking possession of the Premises or any portion thereof shall be conclusive

evidence against Tenant that Tenant shall accept possession of the Premises in

an “as-is” basis (subject to any items of work that Landlord has expressly

agreed to perform as set forth in this Lease and latent defects in the base

building work performed by Landlord) and that the portion of the Premises taken

possession of was then in good order and satisfactory condition.  No promises of the Landlord to alter,

remodel, improve, repair, decorate or clean the Premises or any part thereof

have been made, and no representation respecting the condition of the Premises,

the Building, the Land or the Project, has been made to Tenant by or on behalf

of Landlord except to the extent expressly set forth herein.  Concurrently with the full execution of

 

18

 

this Lease, Landlord and Tenant shall enter into the

Workletter Agreement in the form attached to this Lease as Exhibit “E”,

which contains the terms and provisions relating to Tenant’s initial

alterations to the Premises. Notwithstanding the foregoing, Landlord hereby

covenants and agrees that, in accordance with the construction schedule called

for in the Workletter Agreement, it shall complete the following work at

Landlord’s sole cost and expense: (i) finish Building columns, (ii) finish tape

the existing base building perimeter, and (iii) install the Building trunk line

ductwork as per the attached Exhibit “J”.  Further, Landlord hereby covenants and agrees that it shall be

responsible to repair any latent or pre-existing defects of the base building

work or the Building within the Premises as determined by Tenant following its

taking possession and occupancy of the Premises.

 

(b)                            Tenant

agrees that blinds, shades, drapes or other forms of window coverings and

treatments shall not be placed in, on or about the outside windows in the

Premises, except to the extent that the character, shape, color, material and

make thereof is expressly approved by the Landlord.  This Lease does not grant any rights to light or air over or

about the property of Landlord.

 

(c)                             Except

for (i) any damage resulting from the negligence or willful misconduct of

Landlord or its employees and agents, and (ii) the sprinkler system within the

Premises, any and all utility and mechanical systems located within the

Premises which do not exclusively service same and the exterior plate glass

windows of the Premises (which items shall be the responsibility of Landlord to

repair and maintain, provided, the cost incurred by Landlord pursuant to this

clause (ii) may be included in Expenses in accordance with the terms and

conditions of Section 2(a)(iv) of this Lease), and subject to the provisions of

Section 13(a) and Section 14 hereof, Tenant shall at its own expense keep the interior,

non-structural portions of the Premises in good repair and tenantable condition

and shall promptly and adequately repair all damage to the Premises caused by

the intentional or negligent acts of Tenant or any of its employees, agents or

invitees, including replacing or repairing all damaged or broken glass,

fixtures and appurtenances resulting from any such damage, under the

supervision and with the approval of Landlord and within any reasonable period

of time specified by Landlord. If Tenant does not do so promptly and

adequately, Landlord may, but need not, make such repairs and replacements and

the cost so incurred by Landlord shall be deemed Additional Rent under this

Lease and shall be payable by Tenant upon the earlier to occur of (i) Landlord’s

written demand therefor and (ii) the next due installment of Rent under this

Lease.

 

(d)                            Whenever

Tenant’s use or occupation of the Premises, including lighting, personnel

(i.e., if Tenant’s density of personnel within the Premises is in excess of

four (4) individuals per 1,000 square feet of Rentable Area), heat generating

machines or equipment, airborne emissions of smoke or other particulates,

individually or cumulatively, or opening of windows in the Premises, causes the

design loads for the system providing heat and air-cooling to be exceeded, or

otherwise affects adversely the temperature, humidity or air quality otherwise

maintained by the heating, ventilating and air handling or conditioning system

in the Premises or the Building, Landlord may, but shall not be obligated to,

temper such excess loads by installing

 

19

 

or requiring Tenant to install supplementary heating

or air handling or conditioning units in the Premises or elsewhere where

necessary, all at Tenant’s cost. 

Landlord may operate and maintain any such supplementary units, but

shall have no continuing obligation to do so or liability in connection

therewith.  The expense resulting from

the operation and maintenance of any such supplementary heating or air handling

or conditioning units, including rent for space occupied by any supplementary

heating or air handling or conditioning units installed in rentable area

outside the Premises, shall be paid by Tenant to Landlord as Additional Rent at

rates reasonably fixed by Landlord. 

Alternatively, Landlord may require Tenant to operate and maintain any

such supplementary units, also at Tenant’s sole expense.

 

(e)                             Tenant

agrees to cooperate fully, at all times, with Landlord in abiding by all reasonable

regulations and requirements which Landlord may prescribe for the proper

functioning and protection of all utilities and services reasonably necessary

for the operation of the Premises and the Building.  Landlord, throughout the Term of this Lease, shall have free

access to any and all mechanical installations, and Tenant agrees that there

shall be no construction or partitions or other obstructions which might

interfere with the moving of the servicing equipment of Landlord to or from the

enclosures containing said installations. 

Tenant further agrees that neither Tenant nor its servants, employees,

agents, visitors, licensees or contractors shall at any time tamper with,

adjust or otherwise in any manner affect Landlord’s mechanical installations.

 

(f)                             Tenant,

at its sole cost and expense, shall comply, and shall cause the Premises to

comply with (a) all federal, state, regional, county, municipal and other

governmental statutes, laws, rules, orders, regulations and ordinances

affecting any part of the Premises, or the use thereof, whether or not any such

statutes, laws, rules, orders, regulations or ordinances which may be hereafter

enacted involve a change of policy on the part of the governmental body

enacting the same, and (b) all rules, orders and regulations of the National

Board of Fire Underwriters, Landlord’s casualty insurer(s) and other applicable

insurance rating organizations or other bodies exercising similar functions in

connection with the prevention of fire or the correction of hazardous

conditions which apply to the Premises. 

Notwithstanding the foregoing, except as expressly provided in this

clause (f) or elsewhere in this Lease, Tenant shall have no obligation to

comply with any such federal, state, regional, county, municipal and other

governmental statutes, laws, rules, orders, regulations and/or ordinances to

the extent same requires structural alterations or structural repairs to the

Premises (collectively, the “Structural Work”), all of which Structural Work

shall be the obligation of Landlord except as follows: (i) the foregoing shall

not in any way relieve Tenant from any responsibility to pay its share of

Expenses as provided in this Lease, and (ii) the foregoing shall not in any way

relieve Tenant from the obligation to comply with any such laws, rules, orders,

regulations and ordinances requiring Structural Work which arises as a result

of Tenant’s unique conduct of business within the Premises and/or any

alterations, additions and/or improvements made by Tenant or on behalf of

Tenant in the Premises.  In connection

therewith, Tenant hereby acknowledges and agrees that it shall be responsible,

at its sole cost and expense, to perform any such Structural Work as set forth

in clause (ii) hereinabove.

 

20

 

(g)                            Except

to the extent that any of the following is an obligation of Tenant under this

Lease, including, without limitation, the foregoing provisions of this Section

6, Landlord shall make, or cause to be made, all necessary maintenance, repairs

and replacements which are structural in nature to the Building as well as

necessary maintenance, repairs and replacements to the roof of the Building

throughout the Term of this Lease to maintain same in good condition and

repair.  Further, Landlord shall be

responsible to maintain the common areas of the Building and the exterior areas

of the Project in good condition and repair as well as maintaining the heating,

cooling, plumbing, and other mechanical and electrical systems which are common

throughout the Building and do not exclusively service any particular premises

within the Building.  Further, Landlord

hereby represents and warrants, to its actual knowledge (without investigation

or inquiry), that as of the date hereof it has received no notice that any

portion of the Project is not in compliance with any applicable laws, rules,

orders, regulations and ordinances.  All

work to be done in the Project by Landlord shall be performed in a good and

workmanlike manner using only a high grade of materials and in compliance with

all then applicable laws, rules, orders, regulations and ordinances, insurance

requirements and all other requirements of applicable governing authorities.

 

7.                              Return of Premises.  At the termination of this Lease by lapse of

time or otherwise or upon termination of Tenant’s right of possession without

terminating this Lease, Tenant shall surrender possession of the Premises to

Landlord and deliver all keys to the Premises to Landlord and make known to the

Landlord the combination of all locks of vaults then remaining in the Premises,

and shall (subject to the following paragraph) return the Premises and all

equipment and fixtures of the Landlord therein to Landlord in as good condition

as when Tenant originally took possession, ordinary wear, loss or damage by

fire or other insured casualty, damage resulting from the acts of Landlord or

its employees and agents, and alterations made with Landlord’s consent

excepted, failing which Landlord may restore the Premises and such equipment

and fixtures to such condition and Tenant shall pay the cost thereof to

Landlord on demand.

 

All installations, additions, partitions, hardware,

light fixtures, non-trade fixtures and improvements, temporary or permanent,

except movable furniture and equipment belonging to Tenant, in or upon the

Premises, whether placed there by Tenant or Landlord, shall be Landlord’s

property and shall remain upon the Premises, all without compensation,

allowance or credit to Tenant; provided, however, that if prior to such

termination or within ten (10) days thereafter Landlord so directs by notice,

Tenant, at Tenant’s sole cost and expense, shall promptly remove such of the

installations, additions, partitions, hardware, light fixtures, non-trade

fixtures and improvements placed in the Premises by Tenant as are designated in

such notice and repair any damage to the Premises caused by such removal,

failing which Landlord may remove the same and repair the Premises and Tenant

shall pay the cost thereof to Landlord on demand.  Notwithstanding the foregoing, if prior to the time Tenant

installs any such installations, additions, partitions, hardware, light

fixtures, non-trade fixtures and improvements in the Premises Tenant requests

Landlord’s determination of whether or not Landlord will require such items to

be removed at the expiration of the Term or earlier termination of this Lease

then Tenant shall only be obligated to remove such items which Landlord directs

in such response to

 

21

 

Tenant’s request notice (which response from Landlord shall be

delivered to Tenant within ten (10) business days of Landlord’s receipt of

Tenant’s request therefor), failing which Tenant shall not be obligated to

remove such items.  If Tenant fails to

request Landlord’s determination as to the removal of such items or if Tenant

installs any of such items without Landlord’s prior written consent thereto,

then the foregoing provisions of this Section 7 shall be applicable. The foregoing

obligation of Tenant to remove such items shall not be applicable to Tenant’s

Work. Landlord and Tenant acknowledge and agree that upon Landlord’s approval

of Tenant’s Plans, Landlord shall have the right to stipulate which items of

Tenant’s Work Tenant shall be required to remove from the Premises upon the

expiration of the Term or earlier termination of this Lease in accordance with

the provisions of this Section 7. If Landlord fails to so stipulate as to which

items of Tenant’s Work are required to be removed upon the expiration of the

Term or earlier termination of this Lease then Landlord shall be deemed to have

waived its right to require Tenant to remove such items of Tenant’s Work from

the Premises upon the expiration of the Term or earlier termination of this

Lease.

 

Tenant shall leave in place any floor covering without

compensation to Tenant.  Tenant shall

also remove Tenant’s furniture, machinery, safes, trade fixtures and other

items of movable personal property of every kind and description from the

Premises prior to the end of the Term or ten (10) days following termination of

this Lease or Tenant’s right of possession, whichever might be earlier, failing

which Landlord may do so and thereupon the provisions of Section 16(f) shall

apply.

 

All obligations of Tenant hereunder shall survive the

expiration of the Term or sooner termination of this Lease.

 

8.                              Holding Over.  Tenant shall pay Landlord for each day

Tenant retains possession of the Premises or any part thereof after termination

of this Lease, by lapse of time or otherwise, an amount which is one hundred

fifty percent (150%) of the amount of rent for a day (computed on a year of 360

days) based on the annual rate of Base Rent and Additional Rent applicable

under Sections 1 and 2 to the period in which such possession occurs, and

Tenant shall also pay all damages, consequential as well as direct, sustained

by Landlord by reason of such retention. 

Nothing in this Section contained, however, shall be construed or

operate as a waiver of Landlord’s right of re-entry or any other right of

Landlord.

 

9.                              Rules and Regulations.  Tenant agrees to observe the rights reserved

to Landlord contained in Section 10 hereof and agrees, for itself, its

employees, agents, clients, customers, invitees and guests, to comply with the

rules and regulations set forth in Exhibit “B” attached to this Lease

and made a part hereof and such other rules and regulations as shall be adopted

by Landlord pursuant to Section 10(l) of this Lease. 

 

Any violation by Tenant of any of said rules and

regulations may be restrained; but whether or not so restrained, Tenant

acknowledges and agrees that it shall be and remain liable for all damages,

loss, costs and expense resulting from any violation by the Tenant of any of

said rules and regulations.  Nothing in

this Lease contained shall be construed to impose upon Landlord any duty or

obligation to enforce said rules and regulations, or the terms, covenants

 

22

 

and conditions of any other lease against any other tenant or any other

persons, and Landlord and its beneficiaries shall not be liable to Tenant for

violation of the same by any other tenant, its employees, agents, invitees, or

by any other person; provided, however, Landlord hereby acknowledges and agrees

that in no event shall Tenant be obligated to observe any such rules and

regulations which are not enforced by or on behalf of Landlord in a reasonable,

uniform and non-discriminatory manner against the other tenants or occupants of

the Building.

 

10.                            Rights Reserved to Landlord.  Landlord reserves the following rights,

exercisable without notice and without liability to Tenant for damage or injury

to property, person or business and without effecting an eviction or disturbance

of Tenant’s use or possession or giving rise to any claim for setoff or

abatement of rent or affecting any of Tenant’s obligations under this Lease:

 

(a)                             To

change the name or street address of the Building.

 

(b)                            To

install and maintain signs on the exterior and interior of the Building which

are consistent in quality and style with the signage maintained on the interior

and exterior of comparable office buildings in the metropolitan area in which

the Building is located, and to prescribe the location and style of the suite

number and identification sign or lettering for the Premises occupied by the

Tenant.

 

(c)                             To

designate the character, shape, color, material and make of all window

coverings and treatments on all outside windows in the Premises and to require

Tenant to keep all outside windows in the Premises closed at all times during

periods of adverse weather conditions during which open windows may cause

threat or peril or imminent danger to persons, property or business operations

within the Premises and/or Building or in situations in which tenants

maintaining windows within the Premises which are open shall have a material

adverse affect on the heating and air conditioning system for the Building.

 

(d)                            To

retain at all times, and to use in appropriate instances, pass keys to the

Premises.

 

(e)                             To

grant to anyone the right to lawfully conduct any business or render any

service in the Building, whether or not it is the same as or similar to the use

expressly permitted to Tenant by Section 4.

 

(f)                             To

exhibit the Premises at reasonable hours.

 

(g)                            To

have access for Landlord and other tenants or occupants of the Building to all

mail chutes according to the rules of the United States Postal Service.

 

(h)                            To

enter the Premises at reasonable hours for reasonable purposes, including

inspection and supplying janitor service or other service to be provided to

Tenant hereunder.

 

23

 

(i)                              To

require all persons entering or leaving the Building during such hours as

Landlord may from time to time reasonably determine to identify  themselves to security personnel by

registration or otherwise, and to establish their right to enter or leave.

Landlord shall not be liable in damages for any error with respect to admission

to or eviction or exclusion from the Building of any person.  In case of fire, invasion, insurrection,

mob, riot, civil disorder, public excitement or other commotion, or threat

thereof, Landlord reserves the right to limit or prevent access to the Building

during the continuance of the same, shut down elevator service, activate

elevator emergency controls, or otherwise take such action or preventive

measures deemed necessary by Landlord for the safety of the tenants or other

occupants of the Building or the protection of the Building and the property in

the Building.  Tenant agrees to

cooperate in any reasonable safety program developed by Landlord.

 

(j)                              To

reasonably control access to common areas and other areas and to prevent access

to common areas and other areas by unauthorized persons.

 

(k)                             Provided

that reasonable access to the Premises shall be maintained and the business of

Tenant shall not be interfered with unreasonably, to relocate, enlarge, reduce

or change corridors, exits, entrances in or to the Building and/or Project and

to decorate and to make repairs, alterations, additions and improvements,

structural or otherwise, in or to the Building and/or Project or any part

thereof, and any adjacent building, land, street or alley, including for the

purpose of connection with or entrance into or use of the Building and/or

Project in conjunction with any adjoining or adjacent building or buildings,

now existing or hereafter constructed, and may for such purposes erect

scaffolding and other structures reasonably required by the character of the

work to be performed, and during such operations may enter upon the Premises

and take into and upon or through any part of the Building, including the

Premises, all materials that may be required to make such repairs, alterations,

improvements, or additions, and in that connection Landlord may temporarily

close public entry ways, other public spaces, stairways or corridors and

interrupt or temporarily suspend any services or facilities agreed to be

furnished by Landlord, all without the same constituting an eviction of Tenant

in whole or in part and without abatement of Rent by reason of loss or

interruption of the business of Tenant or otherwise and without in any manner

rendering Landlord liable for damages or relieving Tenant from performance of

Tenant’s obligation under this Lease; Landlord may at its option make any

repairs, alterations, improvements and additions in and about the Building and

the Premises during ordinary business hours and, if Tenant desires to have such

work done during other than business hours, Tenant shall pay all overtime and

additional expenses resulting therefrom.

 

(l)                              From

time to time to make and adopt such reasonable rules and regulations, in

addition to or other than or by way of amendment or modification of the rules

and regulations contained in Exhibit “B” attached to this Lease or other

Sections of this Lease, for the protection and welfare of the Building and its

tenants and occupants, as the Landlord may determine, and the Tenant agrees to

abide by all such rules and regulations which are reasonable and enforced in a

uniform and non-discriminatory manner and which are not inconsistent with the

terms and

 

24

 

provisions of this Lease.

 

(m)                            To

modify the Declaration and other restrictions or record affecting the Project

and  Real Property in such a manner that

does not have a material adverse effect on the business to be operated from the

Premises as set forth herein.

 

11.                            Alterations.

(a)                             Without

Landlord’s prior written consent, Tenant shall not make or cause to be made any

alterations, improvements, additions, changes or repairs of any kind or manner

in or to the Premises or the Building. 

As a condition to granting its consent, Landlord may impose reasonable

requirements in addition to any set forth in this Lease, including, without

limitation, requirements as to the manner and time for the performance of any

such work and the type and amount of insurance and bonds Tenant must acquire

and maintain in connection therewith. 

In addition, at Landlord’s option, Landlord shall have the right: to

approve the contractors or mechanics performing the work; to approve all plans

and specifications relating to the work; to review the work of Tenant’s

architects, engineers, contractors or mechanics and to control any construction

or other activities being undertaken within the Building and with Landlord to

be reimbursed for any costs incurred in connection with such review or control

(except that in no event shall any such reimbursement be applicable with

respect to Tenant’s performance of Tenant’s Work as set forth in the Workletter

Agreement, unless such costs are specifically provided for in said Workletter

Agreement); and to require correction of the work in instances in which

materials or workmanship is defective or not in accordance with plans or

specifications previously approved by Landlord. Landlord’s approval of any

plans and specifications shall create no responsibility on the part of Landlord

for the completeness, design, sufficiency or compliance with all laws,

ordinances, regulations, rules and requirements of governmental entities having

jurisdiction.  Except as expressly

provided herein, all alterations, improvements, additions, changes or repairs

shall be provided by and paid for by Tenant at its sole expense, but shall

become the property of Landlord and shall be surrendered with the Premises upon

termination of this Lease; provided, however, that Landlord may, by written

notice to Tenant as provided in and in accordance with the terms of Section 7

of this Lease, require Tenant, at Tenant’s sole cost and expense, to remove any

or all improvements, alterations, additions or fixtures installed or made by

Tenant on or to the Premises and to repair any damages to the Premises caused

by such removal.

 

(b)                            All

work in connection with any alterations, improvements, changes, additions or

repairs in the Premises or the Building made by or for the benefit of Tenant

shall be performed in full compliance with all laws, ordinances, regulations,

rules and requirements of all governmental entities having jurisdiction and in

full compliance with all insurance rules, orders, directions, regulations and

requirements.  If there is now or if

there shall be installed in the Building a sprinkler system, and if any fire

rating bureau or any similar body having jurisdiction or any governmental

authority having jurisdiction requires or recommends that any changes,

modifications, alterations, additional sprinkler heads or other equipment be

made or supplied by reason of Tenant’s unique conduct of business within the

Premises (other than general office use)

 

25

 

or due to Tenant’s higher density of personnel, or the

improvements it has added or the location of partitions, trade fixtures or

other contents of the Premises Tenant shall, at its own cost, promptly make and

supply all such changes, modifications, alterations, additional sprinkler heads

or other equipment.

 

(c)                             Before

work is commenced as provided in this Section 11, Tenant shall give Landlord at

least fifteen (15) days’ written notice. 

In addition, prior to commencing any work in the Premises (including,

without limitation, Tenant’s initial alterations) Tenant shall provide Landlord

with appropriate evidence of Tenant’s ability to pay for such work and

materials in full.  Tenant shall secure,

at Tenant’s own cost, payment and performance bonds, satisfactory to Landlord,

for said work, and during the progress of the work, Tenant shall, upon

Landlord’s request, furnish Landlord with sworn contractor’s statements and

lien waivers covering all work theretofore performed.  Any mechanic’s liens for work 

claimed to have been performed for, or materials claimed to have been

furnished to, Landlord or Tenant shall be discharged by Tenant, at Tenant’s

sole expense as provided in Section 31. 

Tenant agrees to indemnify, hold harmless and defend Landlord from any

loss, cost, damage or expense, including attorney’s fees, arising out of any

such lien claim or out of any other claim relating to work done or materials

supplied to the Premises at Tenant’s request or on Tenant’s behalf.

 

26

 

12.                            Assignment and Subletting.

(a)                             Tenant

shall not (i) assign, transfer, mortgage, pledge, hypothecate or encumber or

subject to or permit to exist upon or be subjected to any lien or charge, this

Lease or any interest under it, (ii) allow to exist or occur any transfer of or

lien upon this Lease or the Tenant’s interest herein by operation of law, (iii)

sublet the Premises or any part thereof, or (iv) permit the use or occupancy of

the Premises or any part thereof for any purpose not provided for under Section

4 of this Lease or by anyone other than the Tenant and Tenant’s employees.  In no event shall this Lease be assigned or

assignable by voluntary or involuntary bankruptcy proceedings or otherwise, and

in no event shall this Lease or any rights or privileges hereunder be an asset

of Tenant under any bankruptcy, insolvency or reorganization proceedings.

 

(b)                            Tenant

shall, by notice in writing, advise Landlord of its intention from, on and

after a stated date (which shall not be less than sixty (60) days after the

date of Tenant’s notice) to assign this Lease or sublet any part or all of the

Premises for the balance or any part of the Term.  Tenant’s said notice shall state the name and address of the

proposed subtenant or assignee and a true and complete copy of the proposed

sublease or assignment shall be delivered to Landlord with said notice.  Landlord shall not unreasonably withhold its

consent to Tenant’s assignment or subletting the space covered by its notice;

provided, however, that in addition to other circumstances under which Landlord’s

consent may be withheld (whether similar or dissimilar to the following

reasons), Tenant agrees that the withholding by Landlord of its consent to

Tenant’s assignment or subletting the space covered by its notice will not be

deemed “unreasonable” if (i) the proposed assignee or subtenant is disreputable

or otherwise not in keeping with the nature or class of tenants in the

Building, (ii) the proposed assignee or subtenant is not sufficiently

financially responsible to perform its obligations under this Lease or its

sublease, (iii) the use of the Premises by the proposed assignee or subtenant

would, in Landlord’s reasonable judgment, significantly increase the pedestrian

traffic in and out of the Building or would require Landlord to perform any

alterations to the Building to comply with applicable building code

requirements or other laws, (iv) Tenant is in default under this Lease beyond

applicable notice and cure periods, (v) the proposed assignee or subtenant is a

government agency, (vi) any notice of termination of this Lease or termination

of Tenant’s possession was given under Article 16 of this Lease, (vii) the

portion of the Premises which Tenant’s proposes to sublease, including the

means of ingress thereto and egress therefrom and the proposed use thereof, or

the remaining portion of the Premises, or both, will violate any municipal,

state or federal law, ordinance or regulation, including, without limitation,

any applicable building code or a zoning ordinance, or (viii) the proposed use

of the Premises by the subtenant or assignee does not conform with the use

permitted in this Lease; provided, however, that the foregoing are merely

examples of reasons for which Landlord may withhold its consent and shall not

be deemed exclusive of any permitted reasons for reasonably withholding

consent, whether similar to or dissimilar from the foregoing examples.

 

(c)                             Intentionally

deleted.

 

27

 

(d)                            With

respect to any assignment, subletting or the transfer of this Lease other than

a “Related Party Permitted Transfer” (as hereinafter defined), if Tenant,

having first obtained Landlord’s consent in accordance with the foregoing

provision of this Section, shall assign this Lease or sublet the Premises, or

any part thereof, at a rental or for other monetary consideration in excess of

the Rent or pro rata portion thereof due and payable by Tenant under this

Lease, then Tenant shall pay to Landlord, as additional rent (1) on the first

day of each month during the term of any sublease, fifty percent (50%) of the

excess of all rent and other consideration due from the subtenant for such

month over the Rent then payable to Landlord pursuant to the provisions of this

Lease for said month (or if only a portion of the Premises is being sublet,

fifty percent (50%) of the excess of all rent and other consideration due from

the subtenant for such month over the portion of the Rent then payable to

Landlord pursuant to the provisions of this Lease for said month which is

allocable on a square footage basis to the space sublet) and (2) immediately

upon receipt thereof, fifty percent (50%) of all other rent or consideration

received by Tenant from such assignment or subletting; it being agreed,

however, that Tenant shall be responsible to Landlord for any deficiency

hereunder if Tenant shall assign this Lease or sublet the Premises or any part

thereof at a rental less than that provided for herein.

 

(e)                             Intentionally

deleted.

 

(f)                             Consent

by Landlord to any assignment, subletting, use or occupancy, or transfer shall

not operate to relieve Tenant from any covenant or obligation hereunder, except

to the extent, if any, expressly provided for in such consent, or be deemed to

be a consent to or relieve Tenant from obtaining Landlord’s consent to any

subsequent assignment, transfer, lien, charge, subletting, use or

occupancy.  Tenant shall pay all of

Landlord’s costs, charges and expenses, including attorney’s fees incurred in

connection with any assignment or sublease requested or made by Tenant;

provided, however, in no event shall any such attorney’s fees exceed Two

Thousand Dollars ($2,000.00) in connection with any particular request for

consent by Tenant hereof.

 

(g)                            If

Tenant assigns this Lease as permitted herein, the assignee shall expressly

assume all of the obligations of Tenant hereunder in a written instrument

satisfactory to Landlord and furnished to Landlord not later than thirty (30)

days prior to the effective date of the assignment.  If Tenant subleases the Premises as permitted herein, Tenant

shall obtain and shall furnish to Landlord, not later than thirty (30) days

prior to the effective date of such sublease and in form satisfactory to

Landlord, the written agreement of such subtenant to the effect that the

subtenant, at Landlord’s option and upon Landlord’s written request therefor,

will attorn to Landlord in the event this Lease terminates before the

expiration of the sublease.  The

foregoing notwithstanding, Tenant shall remain liable for the full performance

of the obligations of Tenant hereunder notwithstanding any assignment of this

Lease or sublease of all or a portion of the Premises.

 

(h)                            Notwithstanding

any of the foregoing to the contrary, Landlord’s consent shall not 

 

28

 

be required for any of the following, each of which

shall be a “Permitted Transfer”: any sublease or assignment of this Lease to

(i) any corporation, limited liability company, general or limited partnership,

limited liability partnership, trust or other entity that controls or is

controlled by, or is under common control with Tenant, (ii) any entity that

purchases all or substantially all of the assets of Tenant, and/or (iii) any

entity which has a net worth that is equal to or greater than Tenant’s net

worth at the time of the subletting or assignment (or at the time of the

execution and delivery of this Lease, whichever is greater) (the transfers in

clauses (i) and (ii) hereinabove shall be referred to in this Lease as “Related

Party Permitted Transfers” and the transferee in each case shall be referred to

in this Lease as a “Related Party Permitted Transferee”); provided, however,

the following shall be applicable to any such Permitted Transfer: (i) in no

event shall any such Permitted Transfer operate to release Tenant from any and

all liability under this Lease; (ii) in no event shall any such Permitted

Transfer be permitted without Landlord’s consent in the event Tenant is then in

default of this Lease beyond applicable notice and cure periods; and (iii)

Landlord shall be provided with not less than thirty (30) days prior written

notice of such transfer.

 

13.                            Waiver of Certain Claims; Indemnity.

(a)                             To

the extent not expressly prohibited by law, Landlord and Tenant each releases

and waives any and all claims for, and rights to recover, damages against and

from the other, and the other’s respective agents, partners, shareholders,

officers, directors, managers, members and employees (collectively, the

“Released Parties”), for loss, damage or destruction to any of its property

(including the Premises, the Building, the Project and their contents), the

elements of which are insured against or which would have been insured against

had such party suffering such loss, damage or destruction maintained the property

or physical damage insurance policies required under Section 20 hereof.  In no event shall this clause be deemed,

construed or asserted (i) to affect or limit any claims or rights against any

Released Parties other than the right to recover damages for loss, damage or

destruction to property, or (ii) to benefit any third party other than the

Released Parties.

 

(b)                            To

the extent not expressly prohibited by law, Tenant agrees to hold harmless and

indemnify the Landlord and the Landlord’s agents, partners, shareholders,

officers, directors, managers, members and employees (collectively, the

“Landlord Indemnitees”) from any losses, damages, judgments, claims, expenses,

costs and liabilities imposed upon or incurred by or asserted against the

Landlord Indemnitees, including reasonable attorney’s fees and expenses, for

death or injury that may arise from or be caused directly or indirectly by any

negligent act of omission or commission or any willful misconduct of the Tenant

or any of the Tenant’s respective agents, partners, or employees.  Such third parties shall not be deemed third

party beneficiaries of this Lease.  In

case any action, suit or proceeding is brought against any of the Landlord

Indemnitees by reason of any such act of the Tenant or any of the Tenant’s

respective agents, partners or employees, then the Tenant will, at the Tenant’s

expense and at the option of said Landlord Indemnitees, by counsel reasonably

approved by said Landlord Indemnitees, resist and defend such action, suit or

proceeding.

 

29

 

(c)                             To

the extent not expressly prohibited by law, Landlord agrees to hold harmless

and indemnify Tenant and Tenant’s agents, partners, shareholders, officers,

directors, managers, members and employees (collectively, the “Tenant

Indemnitees”) from any losses, damages, judgements, claims, expenses, costs and

liabilities imposed upon or incurred by or asserted against the Tenant

Indemnitees, including reasonable attorney’s fees and expenses, for death or

injury that may arise from or be caused directly or indirectly by any negligent

act of omission or commission or any willful misconduct of the Landlord or any

of the Landlord’s respective agents, partners or employees.  Such third parties shall not be deemed third

party beneficiaries of this Lease.  In

case any action, suit or proceeding is brought against any of the Tenant

Indemnitees by reason of any such act of the Landlord or any of the Landlord’s

respective agents, partners or employees, then the Landlord will, at the

Landlord’s expense and at the option of said Tenant Indemnitees, by counsel

reasonably approved by said Tenant Indemnitees, resist and defend such action,

suit or proceeding.

 

(d)                            Subject

to the provisions of Section 13(a) hereof, to the extent permitted by law, no

agreement of Tenant in this Section 13 shall be deemed to exempt Landlord from

liability or damages for injury to persons or damage to property caused by or

resulting from the negligence of Landlord, its agents, servants or employees,

in the operation or maintenance of the Premises,  Building or Project.

 

14.                            Damage or Destruction by Casualty.  If the Premises or any part of the Project

shall be damaged by fire or other casualty and if such damage does not render

all or a substantial portion of the Premises or the Building untenantable

through damage to the Premises or to damage materially and adversely affecting

Tenant’s use of any essential portion of the common areas of the Project for

the purposes for which they were intended such that Tenant’s operation of its

business within the Premises is materially and adversely affected, then

Landlord shall proceed to repair and restore the damage with reasonable

promptness and diligently pursue such repairs to completion, subject to reasonable

delays for insurance adjustments and delays caused by matters beyond Landlord’s

reasonable control.  Landlord shall,

with reasonable promptness after the occurrence of such damage, estimate in

good faith the length of time that will be required to substantially complete

the repair and restoration of such damage and shall by notice advise Tenant of

such estimate.  If it is so estimated

that the amount of time required to substantially complete such repair and restoration

will exceed two hundred seventy (270) days from the date such damage occurred,

then either Landlord or Tenant (but as to Tenant, only if all or a substantial

portion of the Premises are rendered untenantable and/or damage has occurred to

any essential portion of the common areas of the Project which materially and

adversely affects Tenant’s operation of its business within the Premises) shall

have the right to terminate this Lease as of the date of such damage upon

giving notice to the other at any time within thirty (30) days after Landlord

gives Tenant the notice containing said estimate (it being understood that

Landlord may, if it elects to do so, also give such notice of termination

together with the notice containing said estimate).  Unless this Lease is terminated as provided in the preceding

sentence, Landlord shall proceed with reasonable promptness to repair and

restore the damage, subject to reasonable delays for insurance adjustments and

delays caused by matters beyond Landlord’s

 

30

 

reasonable control, and also subject to zoning laws

and building codes then in effect. Landlord shall have no liability to Tenant,

and Tenant shall not be entitled to terminate this Lease if such repairs and

restoration are not in fact completed within the time period estimated by

Landlord, as aforesaid, or within said two hundred seventy (270) days, so long

as Landlord shall proceed with reasonable diligence to complete such repairs

and restoration; provided, however, notwithstanding the foregoing, in the event

Landlord has failed to complete such repairs and restoration and tendered the

Premises to Tenant within eighteen (18) months following the date of such

casualty, subject to delays caused by the acts of Tenant or its agents,

contractors or employees, delays for insurance adjustments and delays caused by

matters beyond Landlord’s reasonable control, then Tenant shall be entitled to

terminate this Lease upon not less than thirty (30) days prior written notice

to Landlord (except that if Landlord completes the repair and restoration of

the Premises prior to the expiration of such thirty (30) day period, then

Tenant’s notice of termination shall be deemed null and void and this Lease

shall remain in full force and effect). 

Notwithstanding anything to the contrary herein set forth, (a) Landlord

shall have no duty pursuant to this Section 14 to repair or restore any portion

of the alterations, additions or improvements made by Tenant in the Premises or

to expend for any repair or restoration amounts in excess of insurance proceeds

paid to Landlord and available for repair or restoration, (b) Tenant shall not

have the right to terminate this Lease pursuant to this Section 14 if the

damage or destruction was caused by the act or neglect of Tenant, its agents or

employees, (c) Landlord shall have no duty pursuant to this Section 14 to

repair or restore any portion of the Premises or any alterations, additions or

improvements contained therein, if the cost of such repair or restoration

exceeds the insurance proceeds received by Landlord and (d) if any such damage

rendering all or a substantial portion of the Premises or the Building

untenantable occurs during the last two (2) years of the Term, Landlord shall

have the option to terminate this Lease by giving written notice to Tenant

within sixty (60) days after the date such damage occurred, and if such option

is so exercised, this Lease shall terminate as of the date of such notice.

 

In the event any such fire or casualty damage renders

the Premises untenantable and Tenant is not occupying all or any portion of the

Premises and/or conducting its business therefrom, and if this Lease shall not

be terminated pursuant to the foregoing provisions of this Section 14 by reason

of such damage, then Base Rent shall abate during the period beginning with the

date of such damage and ending with the date when Landlord completes its repair

and restoration. Such abatement shall be in proportion to the same ratio as the

area of the Premises not ready for occupancy from time to time bears to the

area of the entire Premises.  In the

event of termination of this Lease pursuant to this Section 14, Rent shall be

apportioned on a per diem basis and be paid to the date of the fire or casualty.

 

15.                            Eminent Domain.  If all or a substantial part of the

Building, or any part thereof which includes all or a substantial part of the

Premises, shall be taken or condemned by any competent authority for any public

or quasi-public use or purpose, the Term of this Lease shall end upon and not before

the date when the possession of the part so taken shall be required for such

use or purpose, and without apportionment of the award to or for the benefit of

Tenant; provided, however, in no event shall the foregoing limit or restrict

the right of Tenant to pursue the award permitted Tenant hereinbelow.  If any condemnation proceeding shall be

instituted in 

 

31

 

which it is sought to take or damage any part of the

Building, the taking of which would, in Landlord’s opinion, prevent the

economical operation of the Building, or if the grade of any street or alley

adjacent to the Building is changed by any competent authority, and such

taking, damage or change of grade makes it necessary or desirable to remodel

the Building to conform to the taking, damage or changed grade, Landlord shall

have the right to terminate this Lease upon not less than ninety (90) days’

notice prior to the date of termination designated in the notice.  In either of the events above referred to,

Rent at the then current rate shall be apportioned as of the date of the

termination.  No money or other

consideration shall be payable by the Landlord to the Tenant for the right of

termination, and the Tenant shall have no right to share in the condemnation

award, whether for a partial or total taking, for loss of Tenant’s leasehold or

improvements, or in any judgment for damages caused by the change of grade;

provided, however, Tenant shall be entitled to pursue the condemning authority

for an award for moving expenses, loss of Tenant’s property and the unamortized

value of Tenant’s leasehold improvements within the Premises which were paid

for by Tenant so long as no such award granted to Tenant will diminish the

award granted to Landlord hereunder. 

Further, in no event shall Tenant have any right to claim the loss of

its leasehold value in connection with any such condemnation proceeding.

 

16.                            Default: 

Landlord’s Rights and Remedies.

(a)                             Events of

Defaults.  The occurrence

of any one or more of the following matters constitutes a “Default” by Tenant

under this Lease:

 

(i)            Failure

by Tenant to pay any Rent within five (5) days after the date same is due;

provided, however, that for the first two (2) such monetary defaults in any

twelve (12) consecutive month period, Landlord shall provide Tenant with

written notice of such monetary default and not less than five (5) days within

which to cure such monetary default (after the first two (2) notices of such

monetary default in any twelve (12) consecutive month period, in no event shall

Landlord be obligated to provide Tenant with written notice of such monetary

default during the remainder of such twelve (12) consecutive month period and

Tenant shall be deemed to be in “Default” hereunder if Tenant fails to pay any

Rent within five (5) days after the date same is due without the benefit of any

additional notice and/or cure periods);

 

(ii)           Failure

by Tenant to pay, within thirty (30) days after notice of failure to pay on the

due date from Landlord to Tenant, any other moneys required to be paid by

Tenant under this Lease;

 

(iii)          Failure

by Tenant to observe or perform any of the covenants with respect to assignment

and subletting set forth in Article 12 above;

 

(iv)          Failure

by Tenant to comply with Tenant’s warranties, representations or covenants in

this Lease regarding hazardous substances

 

32

 

unless such failure continues for a period in excess

of thirty (30) days after written notice thereof from Landlord to Tenant;

 

(v)           Failure

by Tenant to commence to cure, immediately after receipt of notice from

Landlord, any hazardous condition which Tenant has created in violation of law

or of this Lease and to diligently and in good faith complete the cure of such

hazardous condition within a reasonable time thereafter;

 

(vi)          Failure

by Tenant to observe or perform any other covenant, agreement, condition or

provision of this Lease, if such failure continues for thirty (30) days after

notice thereof from Landlord to Tenant and if the cure of such failure is not

reasonably susceptible within such thirty (30) day period, Tenant fails to

commence the cure of such covenant, agreement, condition or provision of this

Lease within such thirty (30) day period, and thereafter fails to diligently

and in good faith pursue the cure of such default and fails to cure same within

a reasonable period of time thereafter;

 

(vii)         The

levy upon, under writ of execution or the attachment by legal process of, the

leasehold of Tenant, or the filing or creation of a lien with respect to such

leasehold interest, which lien shall not be released or discharged within ten

(10) days from the date of such filing;

 

(viii)        Intentionally

deleted;

 

(ix)           Tenant

becomes insolvent or bankrupt or admits in writing its inability to pay its

debts as they mature, or makes an assignment for the benefit of creditors, or

applies for or consents to the appointment of a trustee or receiver for Tenant

or for the major part of its property;

 

(x)            A

trustee is appointed for Tenant or for the major part of its property and is

not discharged within ninety (90) days after such appointment; or

 

(xi)           Any

bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding,

or other proceeding for relief under any bankruptcy law, or similar law for the

relief of debtors, is instituted (i) by Tenant or (ii) against Tenant and is

allowed against it or is consented to by it or is not dismissed within ninety

(90) days after such institution.

 

(xii)          Intentionally

deleted.

 

33

 

(b)                          Rights

and Remedies of Landlord. 

If a Default occurs, Landlord shall have the rights and remedies

hereinafter set forth, which shall be distinct, separate and cumulative and

shall not operate to exclude or deprive Landlord or any other right or remedy

allowed it by law:

 

(i)            Landlord

may terminate this Lease by giving to Tenant notice of Landlord’s election to

do so, in which event the Term of this Lease shall end, and all right, title

and interest of Tenant hereunder shall expire, on the date stated in such

notice;

 

(ii)           Landlord

may terminate Tenant’s right to possession of the Premises without terminating

this Lease by giving notice to Tenant that Tenant’s right to possession shall

end on the date stated in such notice, whereupon the right of Tenant to

possession of the Premises or any part thereof shall cease on the date stated

in such notice; and

 

(iii)          Landlord

may enforce the provisions of this Lease and may enforce and protect the rights

of Landlord hereunder by a suit or suits in equity or at law for the specific

performance of any covenant or agreement contained herein, or for the

enforcement of any other appropriate legal or equitable remedy including,

without limitation, recovery of all moneys due or to become due from Tenant

under any of the provisions of this Lease.

 

(c)                          Right to

Re-Enter.  If Landlord

exercises either of the remedies provided in Sections (i) and (ii) above,

Tenant shall surrender possession and vacate the Premises and immediately

deliver possession thereof to Landlord, and Landlord may re-enter and take

complete and peaceful possession of the Premises, with process of law, full and

complete license to do so being hereby granted to Landlord, and Landlord may

remove all occupants and property therefrom, using such force as may be

lawfully necessary, without being deemed guilty in any manner of trespass,

eviction or forcible entry and detainer and without relinquishing Landlord’s

right to Rent or any other right given to Landlord hereunder or by operation of

law.

 

(d)                          Current

Damages.  If Landlord

terminates the right of Tenant to possession of the Premises without

terminating this Lease, Landlord shall have the right to immediate recovery of

all amounts then due hereunder.  Such

termination of possession shall not release Tenant, in whole or in part, from

Tenant’s obligation to pay the Rent hereunder for the full Term, and Landlord

shall have the right, from time to time, to recover from Tenant, and Tenant

shall remain liable for, all Rent and any other sums accruing as they become

due under this Lease during the period from the date of such notice of

termination of possession to the stated end of the Term.  In any such case, Landlord may relet the

Premises or any part thereof for the account of Tenant for such Rent, for such

time (which may be for a term extending beyond the Term of this Lease) and upon

such terms as are commercially reasonable and may collect the rents from such

reletting.  Landlord shall not be

required to accept any tenant offered by Tenant or to

 

34

 

observe any instructions given by Tenant relative to

such reletting except that Landlord shall use its reasonable efforts to

mitigate its damages in connection with any such Default (provided that the

foregoing shall not obligate Landlord to prefer leasing the Premises over other

available Premises in the Building).  In

any such case, Landlord also may make repairs, alterations and additions in or

to the Premises and redecorate the same to the extent deemed by Landlord

necessary or desirable and in connection therewith change the locks to the

Premises, and Tenant upon demand shall pay the cost of all of the foregoing

together with Landlord’s reasonable expenses of reletting.  The rents from any such reletting shall be

applied first to the payment of the expenses of reentry, redecoration, repair

and alterations and the expenses of reletting and second to the payment of Rent

herein provided to be paid by Tenant. 

Any excess or residue shall operate only as an offsetting credit against

the amount of Rent due and owing as the same thereafter becomes due and payable

hereunder, and the use of such offsetting credit to reduce the amount of Rent

due Landlord, if any, shall not be deemed to give Tenant any right, title or

interest in or to such excess or residue and any such excess or residue shall

belong to Landlord solely, and in no event shall Tenant be entitled to a credit

on its indebtedness to Landlord in excess of the aggregate sum (including Base

Rent, Tax Adjustments and Expense Adjustments) which would have been paid by

Tenant for the period for which the credit to Tenant is being determined, had

no Default occurred.  No such reentry or

repossession, repairs, alterations and additions, or reletting shall be

construed as an eviction or ouster of Tenant or as an election on Landlord’s

part to terminate this Lease, unless a written notice of such intention is

given to Tenant, or shall operate to release Tenant in whole or in part from

any of Tenant’s obligations hereunder, and Landlord, at any time and from time

to time, may sue and recover judgment for any deficiencies remaining after the

application of the proceeds of any such reletting.

 

(e)                          Final

Damages.  If this Lease

is terminated by Landlord pursuant to Section 16(b)(i) above, Landlord shall be

entitled to recover from Tenant all Rent accrued and unpaid for the period up

to and including such termination date, as well as all other additional sums

payable by Tenant, or for which Tenant is liable or for which Tenant has agreed

to indemnify Landlord under any of the provisions of this Lease, which may be

then owing and unpaid, and all costs and expenses, including court costs and

attorneys’ fees incurred by Landlord in the enforcement of its rights and

remedies hereunder, and, in addition, Landlord shall be entitled to recover as

damages for loss of the bargain and not as a penalty (a) the unamortized

portion of Landlord’s portion of Landlord’s contribution to the cost of tenant

improvements and alterations, if any, installed by either Landlord or Tenant

pursuant to this Lease, (b) the aggregate sum which at the time of such

termination represents the excess, if any, of the present value of the

aggregate rents which would have been payable after the termination date had

this Lease not been terminated including, without limitation, Base Rent at the

annual rate or respective annual rates for the remainder of the Term provided

for in Article 1 above or elsewhere herein and the amount projected by Landlord

to represent Tax Adjustments and Expense Adjustments for the remainder of the

Term pursuant to Article 4 above, over the then present value of the then

aggregate fair rental value of the Premises for the balance of the Term, such

present worth to be computed in each case on the basis of a five percent (5%)

per annum discount from the respective dates upon which such rentals would have

been payable hereunder had this Lease not been terminated, and

 

35

 

(c) any damages in addition thereto including, without

limitation, attorneys’ fees and court costs, which Landlord has sustained as a

result of any of the covenants of this Lease other than for the payment of

Rent.

 

(f)                           Removal

of Personal Property. 

All property of Tenant removed from the Premises by Landlord pursuant to

any provision of this Lease or applicable law including, without limitation,

Tenant’s personal property, may be handled, removed or stored by Landlord at

the cost  and expense of Tenant, and

Landlord shall not be responsible in any event for the value, preservation or

safekeeping thereof.  Tenant shall pay

Landlord for all reasonable expenses incurred by Landlord with respect to such

removal and storage as long as the same is in Landlord’s possession or under

Landlord’s control.  All such property

not removed from the Premises or retaken from storage by Tenant within thirty

(30) days after the end of the Term, however terminated, all, at Landlord’s

option, shall be conclusively deemed to have been conveyed by Tenant to

Landlord as by bill of sale without further payment or credit by Landlord to

Tenant.

 

(g)                          Attorneys’

Fees.  If at any time

during the Term of this Lease either Landlord or Tenant shall institute any

action or proceeding against the other relating to the provisions of this Lease

or any default hereunder, then the unsuccessful party in such action or

proceeding agrees to reimburse the successful party for the reasonable expenses

for attorney’s fees, paralegal fees and disbursements incurred therein by the

successful party.

 

(h)                          Assumption

or Rejection in Bankruptcy. 

If Tenant is adjudged bankrupt, or a trustee in bankruptcy is appointed

for Tenant, Landlord and Tenant, to the extent permitted by law, agree to

request that the trustee in bankruptcy determine within sixty (60) days

thereafter whether to assume or to reject this Lease.

 

(i)                           Default

Under Other Leases.  If

the term of any lease, other than this Lease, for any space on land shown on

the Master Site Plan under which Tenant or an affiliate of Tenant is obligated

on the date hereof or thereafter is terminated or terminable as a result of any

default by the tenant thereunder, Landlord shall have the right, but not the

obligation, to terminate this Lease or exercise any other rights or remedies of

Landlord set forth herein in the event of a Default by Tenant under this Lease.

 

17.                         Subordination.  Tenant agrees that this Lease is subject and

subordinate to any ground lease, mortgage, deed of trust or land sale contract

which may now or, at Landlord’s option, hereafter affect the real property of

which the Premises form a part and such subordination shall be

self-operative.  Tenant shall execute

such documents as may be reasonably required by Landlord or the holder of the

lien to evidence this subordination. 

Notwithstanding the foregoing, Tenant agrees that if requested by any

mortgagee or trustee, Tenant’s interest in this Lease shall be superior or

inferior, in whole or in part, to the mortgage held by such mortgagee or

trustee and Tenant will execute any instrument requested by such mortgagee to

evidence such superiority or inferiority. 

Landlord shall use its commercially

 

36

 

reasonable and good faith efforts to obtain a

commercially reasonable subordination, non-disturbance and attornment agreement

from each present and future mortgagee of all or any portion of the Project;

provided, however, in no event shall Landlord be obligated to provide to Tenant

such a subordination, non-disturbance and attornment agreement until after

Tenant has completed Tenant’s Work and commenced its business operations within

the Project.  Tenant covenants and

agrees that it will not subordinate this Lease to any lien (except the lien of

any mortgage, deed of trust or ground lease which may now affect the Premises),

without the prior written consent of any existing mortgagee, trustee or ground

lessor.  If any mortgage or deed of trust

(hereinafter, collectively, a “mortgage”) is foreclosed, or if any mortgagee

accepts a deed in lieu of foreclosure or exercises any other remedies available

to it under law or its mortgage, or if any ground lease is terminated, then

upon the request of the mortgagee, the purchaser at any foreclosure sale or the

ground lessor or any person succeeding to the interest of Landlord, as the case

may be, Tenant will attorn, as Tenant under this Lease, to such mortgagee or to

the purchaser at any foreclosure sale or to the ground lessor or to any such

person succeeding to the interest of Landlord, and Tenant will execute promptly

any instruments which may be required to evidence such attornment, provided,

however, (i) such mortgagee, purchaser, ground lessor or successor in interest

shall not be bound by any payment of Rent for more than one (1) month in

advance, except prepayments in the nature of security for performance by Tenant

of its obligations under this Lease, and (ii) such mortgagee or successor in

interest shall not be bound by any amendment or modification of this Lease made

after the identification and notice address of such mortgagee has been provided

to Tenant without the consent of such mortgagee (to the extent such mortgagee’s

consent  is required under the terms of

its mortgage) or such successor in interest. 

Tenant agrees to give any holder of any mortgage or ground lessor, by

registered or certified mail, a copy of any notice or claim of default served

upon the Landlord by Tenant.  If Tenant

fails within ten (10) days after written demand therefor to execute and deliver

any instruments as may be necessary or proper to effectuate any of the

covenants of Tenant set forth above in this Section 17, Tenant shall be deemed

to be in Default under this Lease.

 

18.                         Mortgagee and Ground Lessor Protection.  Tenant agrees to give any mortgagee and any

ground lessor, by registered or certified mail, a copy of any notice or claim

of default served upon the Landlord by Tenant, provided that prior to such

notice Tenant has been notified in writing (by way of service on Tenant of a

copy of an assignment of Landlord’s interests in leases, or otherwise) of the

address of such mortgagee or ground lessor (hereinafter the “Notified

Party”).  Tenant further agrees that if

Landlord shall have failed to cure such default within twenty (20) days after

such notice to Landlord (or if such default cannot be cured or corrected within

that time, then such additional time as may be necessary if Landlord has

commenced within such twenty (20) days and is diligently pursuing the remedies

or steps necessary to cure or correct such default), then the Notified Party

shall have an additional thirty (30) days within which to cure or correct such

default (or if such default cannot be cured or corrected within that time, then

such additional time as may be necessary if such Notified Party has commenced

within such thirty (30) days and is diligently pursuing the remedies or steps

necessary to cure or correct such default, including the time necessary to

obtain possession if possession is necessary to cure or correct such default)

before Tenant may exercise any right or remedy which it may have on account of

any such default of Landlord.

 

37

 

19.                         Defaults by Landlord.  Landlord shall not be in default hereunder

unless Landlord fails to perform the obligations required of Landlord within a

reasonable time, but in no event later than thirty (30) days after notice by

Tenant to Landlord  specifying the

nature of Landlord’s failure to perform; provided, however, that if the nature

of Landlord’s obligation is such that more than thirty (30) days are required

for performance, then Landlord shall not be in default if Landlord commences

performance within such thirty (30) day period and thereafter diligently

prosecutes the same to completion.  In

no event shall Tenant have the right to terminate this Lease as a result of

Landlord’s default, and Tenant’s remedies shall be limited to monetary damages

and Tenant may enforce the provisions of this Lease and may enforce and protect

the rights of Tenant under this Lease by suit or suits in equity or at law for

specific performance of any provision of this Lease; provided however, that in

no event shall Landlord be liable under any circumstances for any consequential

damages incurred by Tenant including, without limitation, any injury to, or

interference with, Tenant’s business, (including any loss of profits) arising

in connection with this Lease.  Nothing

herein contained shall be interpreted to mean that Tenant is excused from

paying Rent due hereunder as a result of any default by Landlord.  The obligation to pay Rent is independent of

any covenant, obligation or agreement by Landlord under this Lease.

 

It is expressly understood and agreed that, notwithstanding

anything in this Lease to the contrary, and notwithstanding any applicable law

to the contrary, the liability of Landlord hereunder and any recourse by Tenant

against Landlord shall be limited solely and exclusively to the interest of

Landlord in and to the Project, and neither Landlord, nor any of its

constituent partners nor subpartners, or the employees, directors,

shareholders, members or managers thereof, shall have any personal liability

therefor, and Tenant, on behalf of itself and all persons claiming by, through

or under Tenant, hereby expressly waives and releases Landlord and such

partners and subpartners, and the employees, directors, shareholders, members

or managers thereof, from any and all personal liability.

 

20.                         Insurance.

(a)                          At

all times during the Term of this Lease, Tenant shall at its sole cost and

expense maintain in full force and effect insurance protecting Tenant and

Landlord, and their respective agents, and any other parties reasonably

designated by Landlord from time to time as follows:

 

(i)                                     Comprehensive

general liability insurance, including contractual liability insuring the

indemnification provisions contained in this Lease, with limits of not less

than Five Million Dollars ($5,000,000.00) combined single limit per occurrence

for personal injury, bodily sickness, disease or death and One Million Dollars

($1,000,000.00) combined single limit per occurrence for damage or injury or

destruction of property (including the loss of the use thereof), all of the

foregoing shall be inclusive of any umbrella coverage.  The coverage required to be carried shall

include fire legal liability, blanket contractual liability, personal injury

liability, broad form property damage liability, product’s liability and

completed 

 

38

 

operations coverage (as well as owned, non-owned and

hired automobile liability, if any exposure exists).

 

(ii)                                  Insurance

against “all risks” (including sprinkler leakage, if applicable) for the full

replacement cost of all additions, improvements and alterations to the Premises

and of all office equipment, furniture, trade fixtures, merchandise and all

other items of Tenant’s property on the Premises.  Tenant agrees to have such insurance policies endorsed to provide

for a waiver of subrogation against Landlord by the insurance carrier.

 

The insurance Tenant is required to provide hereunder

may be provided through any combination of blanket, primary, umbrella and

excess limits policies.  Such insurance

shall be written on an occurrence basis and contain a separation of insurance

provision or cross-liability endorsement reasonably acceptable to

Landlord.  The certificates provided to

Landlord evidencing such insurance shall indicate that Tenant’s insurance is

primary to and not contributory with any other insurance maintained by

Landlord, whose insurance shall be considered excess insurance only.  Tenant shall, prior to the commencement of

the Term hereof and prior to the expiration of any policy, furnish Landlord

certificates evidencing that all required insurance is in force naming Landlord

and Landlord’s mortgagee and their respective agents and employees as

additional insureds, and providing that such insurance may not be canceled or

changed without at least thirty (30) days’ prior written notice to Landlord and

Tenant (unless such cancellation is due to nonpayment of premiums, in which

event ten (10) days’ prior notice shall be provided).

 

(b)                          Intentionally

deleted.

 

(c)                          Tenant

shall comply, at its sole expense, with all federal, state and local

requirements relating to the protection of public health, safety and welfare

and with all environmental laws in the use, occupancy and operation of the

Premises.  Tenant agrees that no

Hazardous Substances (as hereinafter defined) shall be used, located, stored or

processed on the Premises or be brought into the Building by Tenant, and no

Hazardous Substances will be released or discharged from the Premises

(including, but not limited to, ground water contamination); provided, however,

Landlord acknowledges that so long as same is in compliance with all applicable

federal, state or local laws, rules, ordinances and regulations regarding

Hazardous Substances, Tenant shall be entitled to use, store, maintain,

transport and handle at the Premises normal quantities of Hazardous Substances

customarily used in the conduct of general administrative office activities

such as copier fluids and cleaning supplies. 

The term “Hazardous Substances” shall mean and include all hazardous and

toxic substances, waste or materials, any pollutant or contaminant, including,

without limitation, PCB’s, asbestos and raw materials that include hazardous

constituents or any other similar substances or materials that are now or

hereafter included under or regulated by any environmental laws or that would

pose a health, safety or environmental hazard.

 

39

 

(d)                          In

the event Tenant fails to perform its obligations pursuant to this Section 20

promptly and adequately, Landlord may, but need not, cure such failure to

perform and the cost of such cure by Landlord shall be deemed Additional Rent

under this Lease and shall be payable by Tenant upon the earlier to occur of

(i) Landlord’s written demand therefor and (ii) the next due installment of

Rent under this Lease.

 

(e)                          Landlord

and Tenant agree to have all fire and extended coverage and other property

damage insurance 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 entered into in writing by the insured thereunder prior to

any loss or damage shall not affect the validity of such 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.  Without limiting any release or

waiver of liability or recovery set forth elsewhere in this Lease, and notwithstanding

anything in this Lease which may appear to be to the contrary, each of the

parties hereto waives all claims for recovery from the other party 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, and the foregoing endorsements shall not 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 to 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 thereof, to pay such increased cost and thereby keep

such release or waiver in full force and effect).

 

(f)                           At

all times during the Term of this Lease, Landlord shall, at its sole cost and

expense subject to reimbursement as Expenses, maintain in full force and effect

the following insurance: (i) comprehensive general liability insurance,

including contractual liability insuring Landlord’s indemnification provisions

contained in this Lease, with limits of not less than Five Million Dollars

($5,000,000.00) combined single limit per occurrence for personal injury,

bodily sickness, disease or death and One Million Dollars ($1,000,000.00)

combined single limit per occurrence for damage or injury or destruction of

property including the loss of use thereof; and (ii) insurance against “all

risks” (including sprinkler leakage, if applicable) for the full replacement

cost of the Project and of all office equipment, furniture, trade fixtures and

merchandise owned by Landlord on the Project; provided, however, in no event

shall such “all risk” insurance cover any alterations, additions or

improvements installed by or on behalf of Tenant within the Premises nor any

office equipment, furniture, trade fixtures, merchandise or any other item of

personal property owned or maintained by any tenant in the Project (including

Tenant).  Landlord shall, upon Tenant’s

written request therefore, furnish Tenant certificates of insurance evidencing

that all recorded insurance is in force.

 

(g)                          Landlord

hereby represents and warrants to and for the benefit of Tenant that as of the

date hereof, to the best of Landlord’s actual knowledge (without investigation

or inquiry), no Hazardous Substances were used in the construction of the

Project in violation of applicable 

 

40

 

federal, state and/or local laws, ordinances, rules and regulations.

 

21.                         Nonwaiver.  No waiver of any

condition expressed in this Lease shall be implied by any neglect of either

party hereto to enforce any remedy on account of the violation of such

condition whether or not such violation be continued or repeated subsequently,

and no express waiver shall affect any condition other than the one specified

in such waiver and that one only for the time and in the manner specifically

stated.  Without limiting the provisions

of Section 8 hereof, it is agreed that no receipt or moneys by Landlord from

Tenant after the termination in any way of the Term or of Tenant’s right of

possession hereunder or after the giving of any notice shall reinstate,

continue or extend the Term or affect any notice given to Tenant prior to the

receipt of such moneys.  It is also

agreed that after the service of notice or the commencement of a suit or after

final judgment for possession of the Premises, Landlord may receive and collect

any moneys due, and the payment of said moneys shall not waive or affect said

notice, suit or judgment.  No payment by

Tenant or acceptance by Landlord of a lesser amount than shall be due from

Tenant to Landlord shall be treated otherwise than as a payment on account.

Acceptance by Landlord of a check for a lesser amount with endorsement or

statement thereon, or upon any letter accompanying such check, that such lesser

amount is payment in full, shall be given no effect, and Landlord may accept

such check without prejudice of any other rights or remedies which Landlord may

have against Tenant.

 

22.                         Estoppel Certificate.  Tenant agrees that from time to time upon

written request by Landlord, or the holder of any mortgage or any ground

lessor, Tenant (or any permitted assignee, subtenant or other occupant of the

Premises claiming by, through or under Tenant) will deliver to Landlord or to

the holder of any mortgage or ground lessor or contract purchaser of an

interest in the Land or in the Building, within ten (10) days after such

written request shall have been served upon Tenant, a statement in writing

signed by Tenant in a form substantially similar to the form attached to this

Lease as Exhibit “C” certifying (a) that this Lease is unmodified and in

full force and effect (or if there have been modifications, that this Lease as

modified is in full force and effect and identifying the modifications); (b)

the date upon which Tenant began paying Rent and the dates to which the Rent

and other charges have been paid, (c) the date upon which the Term shall end,

(d) that, to the best of Tenant’s actual knowledge, the Landlord is not in

default under any provision of this Lease, or, if in default, the nature

thereof in detail; (e) that the Premises have been completed in accordance with

the terms hereof and Tenant is in occupancy and paying Rent on a current basis

with no rental offsets or claims; (f) that there has been no prepayment of Rent

other than that provided for in this Lease; (g) the amount of any security

deposit made by Tenant or Tenant’s successor, (h) that there are no actions,

whether voluntary or otherwise, pending against Tenant under the bankruptcy

laws of the United States or any State thereof, and (i) such other matters as

may be reasonably required by the Landlord, holder of a mortgage, ground lessor

or contract purchaser.  In the event

Tenant fails to so deliver such an estoppel certificate within the time period

specified above, then Tenant shall be deemed to be in Default under this Lease

and the statements contained therein (with “none” being deemed inserted in each

place providing for an insert) shall be conclusively deemed to be true and

accurate. 

 

23.                         Tenant Authorization. Tenant

represents and warrants that this Lease has been 

 

41

 

duly authorized, executed and delivered by and on behalf of Tenant and

constitutes the valid and binding agreement of Tenant in accordance with the

terms hereof.  If Landlord so requests,

Tenant shall deliver to Landlord or its agent, concurrently with the delivery

of this Lease executed by Tenant, evidence satisfactory to Landlord authorizing

Tenant’s execution and delivery of this Lease and the performance of Tenant’s

obligations hereunder.

 

24.                         Real Estate Brokers.  Each of Landlord and Tenant represents to

the other party, that each party has dealt with and only with the leasing

broker, if any, listed in the Basic Lease Provisions section of this Lease

(whose commission, if any, shall be paid by Landlord pursuant to separate

agreement) as broker in connection with this Lease and agrees to indemnify and

hold the other party harmless from all damages, liability and expense

(including reasonable attorneys’ fees) arising from any claims or demands of

any other broker or brokers or finders for any commission alleged to be due

such broker or brokers or finders in connection with its participating in the

negotiation with Landlord and/or Tenant of this Lease.

 

25.                         Notices.  All notices and demands required or desired

to be given by either party to the other with respect to this Lease or the

Premises shall be in writing and shall be delivered personally, sent by

overnight courier service, prepaid, or sent by United States registered or

certified mail, return receipt requested, postage prepaid, and addressed as

herein provided.  Notices to or demands

upon Tenant shall be addressed to Tenant at 2800 East 13th Street,

Ames, Iowa 50010, Attention: Doug Paris, prior to its occupancy of the Premises

and at the Premises following its occupancy of the Premises, with a copy to

Spencer Fane Britt & Brown LLP, 1000 Walnut Street, Suite 1400, Kansas

City, Missouri 64106, Attention: Mike Kirk. 

Notices to or demands upon Landlord shall be addressed to Landlord at

c/o ECD Company, 250 Parkway Drive, Suite 120, Lincolnshire, Illinois 60069,

Attention: Mr. Scott D. Greenberg, with a copy to Piper Marbury Rudnick &

Wolfe, 203 North LaSalle Street, Suite 1800, Chicago, Illinois 60601,

Attention: David Glickstein, Esq. 

Notices and demands shall be deemed given and served (a) upon receipt or

refusal, if delivered personally, (b) one (1) business day after deposit with

an overnight courier service, or (c) upon three (3) business days after deposit

in the United States mails, if mailed. 

Either party may change its address for receipt of notices by giving

notice of such change to the other party in accordance herewith.  Notices and demands from Landlord to Tenant

may be signed by Landlord, its beneficiaries, the managing agent for the

Property or the agent of any of them.

 

26.                         Miscellaneous.

(a)                          Each

provision of this Lease shall extend to and shall bind and inure to the benefit

not only of Landlord and Tenant, but also their respective heirs, legal

representatives, successors and assigns, but this provision shall not operate

to permit any transfer, assignment, mortgage, encumbrance, lien, charge, or

subletting contrary to the provisions of Section 12 hereof.

 

(b)                          All

of the agreements of Landlord and Tenant with respect to the Premises are

contained in this Lease; and no modification, waiver or amendment of this Lease

or of any of its conditions or provisions shall be binding upon Landlord unless

in writing signed by Landlord.

 

(c)                          Submission

of this instrument for examination shall not constitute a reservation of or

option for the Premises or in any manner bind Landlord and no lease or

obligation on 

 

42

 

Landlord shall arise until this instrument is signed and delivered by

Landlord and Tenant.

 

(d)                          The

word “Tenant” whenever used herein shall be construed to mean Tenants or any

one or more of them in all cases where there is more than one Tenant; and the

necessary grammatical changes required to make the provisions hereof apply

either to corporations or other organizations, partnerships or other entities,

or individuals, shall in all cases be assumed as though in each case fully

expressed.  In all cases where there is

more than one Tenant, the liability of each shall be joint and several.

 

(e)                          Clauses,

plats, and riders, if any, signed by Landlord and Tenant and endorsed on or

affixed to this Lease are part hereof. 

The headings of Sections are for convenience only and do not limit,

expand or construe the contents of the Sections.

 

(f)                           Without

limiting any other provision of this Lease, neither party hereto shall be in

default hereunder if such party is prevented from performing any of its

obligations hereunder due to strike, lockout, labor trouble, civil disorder,

inability to procure materials, failure of power, restrictive governmental

laws, orders or regulations, riots, insurrections, war, fuel shortages,

accidents, casualties, acts of God, or any other cause beyond such party’s

reasonable control; provided, however, in no event shall the foregoing limit or

restrict the obligation of any such party to perform any monetary obligation

under this Lease.

 

(g)                          Time

is of the essence of this Lease and of each and all provisions thereof.

 

(h)                          All

amounts (including, without limitation, Base Rent and Additional Rent) owed by

either party hereunder pursuant to any provision of this Lease which is not

paid when due shall not be deemed a loan but shall bear interest from the date

due until paid at the annual rate equal to four (4) percentage points in excess

of the rate of interest announced from time to time by Bank One at Chicago,

Illinois, or any successor thereto, as its corporate base rate, changing as and

when said corporate base rate changes, unless a lesser rate shall then be the

maximum rate permissible by law with respect thereto, in which event said

lesser rate shall be charged.

 

(i)                           The

invalidity of any provision of this Lease shall not impair or affect in any

manner the validity, enforceability or effect of the rest of this Lease.

 

(j)                           All

understandings and agreements, oral or written, heretofore made between the

parties hereto are merged in this Lease, which alone fully and completely

expresses the agreement between Landlord and Tenant.

 

(k)                          In

no event shall any of the provisions of this Lease be construed against the

party to whom the drafting of such provisions is attributed.

 

(l)                           All

services to the Premises obtained by Tenant shall be provided by a contractor

or contractors reasonably satisfactory to Landlord capable of working in

harmony with 

 

43

 

contractors retained by Landlord whose union affiliation(s) shall not

result in jurisdictional labor claims or disputes with contractors employed by

Landlord and shall not result in any labor actions being filed against Landlord

or the Premises, and whose presence in the Premises shall not create security

or coordination problems with Landlord or their respective agents, contractors,

employees, licensees and invitees.

 

(m)                         In

order to induce Landlord to enter into this Lease, Tenant agrees that it shall

promptly furnish Landlord, from time to time, financial statements in form and

substance reasonably satisfactory to Landlord reflecting Tenant’s current

financial condition (if Tenant is publicly traded, Tenant shall satisfy this

requirement by providing to Landlord only such financial information as is

publicly available).  Such information

shall be delivered by Tenant to Landlord within ten (10) business days of

Tenant’s receipt of Landlord’s written request therefor.  Tenant represents and warrants that all

financial statements, records and information furnished by Tenant to Landlord

in connection with this Lease are true, correct and complete in all material

respects.

 

27.                         Delivery of Possession.  Intentionally deleted.

 

28.                         Substitution of Premises.  Intentionally deleted.

 

29.                         Signs.  Landlord shall list Tenant in the Building

directory.  No signs shall be installed

by or on behalf of Tenant on the exterior of, or adjacent to, the Premises or

the Building.  All signs which are

erected in or on the interior of the Premises shall be in accordance with the

building standard designated by Landlord and subject to Landlord’s prior

written approval.  The installation and

maintenance of any and all signs by or on behalf of Tenant shall be in full

compliance with all applicable laws, ordinances, regulations, rules and orders

of any governmental authority having jurisdiction, and Tenant shall obtain all

necessary licenses and permits in connection therewith.  Tenant shall install and promptly repair,

maintain and service all such signs in accordance with proper techniques and

procedures, and shall indemnify, hold harmless and defend Landlord from all

loss, cost, damage or expense, including attorney’s fees, arising out of any

claim relating to the installation, existence, operation, maintenance, repair,

removal or condition of any such sign. 

On or before the termination of this Lease, Tenant shall, at its sole

expense, remove all such signs in a manner satisfactory to Landlord and shall

immediately repair, at Tenant’s sole expense, any injury or damage caused by

removal.  All costs and expenses

relating to all such signs shall be borne solely by Tenant.

 

30.                         Landlord.  The term “Landlord” as used in this Lease

means only the owner or owners at the time being of Landlord’s interest in the

Building and the Land so that in the event of any assignment, conveyance or

sale, once or successively, of Landlord’s interest in the Land and Building, or

any assignment of this Lease by Landlord, said Landlord making such sale,

conveyance or assignment shall be and hereby is entirely freed and relieved of

all covenants and obligations of Landlord hereunder accruing after such conveyance,

sale or assignment, and Tenant agrees to look solely to such purchaser, grantee

or assignee with respect thereto.  This

Lease shall not be affected by any such conveyance, assignment or sale, and

Tenant agrees to attorn to the purchaser, grantee or assignee.

 

31.                         Title and Covenant Against Liens.  The Landlord’s title is and always shall be

paramount to the title of the Tenant and nothing in this Lease contained shall

empower the 

 

44

 

Tenant to do any act which can, shall or may encumber the title of the

Landlord.  Tenant covenants and agrees

not to suffer or permit any lien of mechanics or materialmen to be placed upon

or against the Real Property, the Land, the Building, the Premises or the Project

or against the Tenant’s leasehold interest in the Premises and, in case of any

such lien attaching, to immediately pay and remove same or otherwise bond over

same to Landlord’s reasonable satisfaction. 

Tenant has no authority or power to cause or permit any lien or

encumbrance of any kind whatsoever, whether created by act of Tenant, operation

of law or otherwise, to attach to or be placed upon the Real Property, Land,

Building, Premises or Project, and any and all liens and encumbrances created

by Tenant shall attach only to Tenant’s interest in the Premises. If any such

liens created, caused or permitted by Tenant so attach and Tenant fails to  pay and remove same (or cause same to be

bonded over) within ten (10) days, Landlord, at its election, may pay and

satisfy the same and in such event the sums so paid by Landlord, with interest

from the date of payment at the rate set forth in Section 26(h) hereof for

amounts owed Landlord by Tenant.  Such

sums shall be deemed to be Additional Rent due and payable by Tenant at once

without notice or demand.

 

32.                         Communications and Computer Lines.   As otherwise permitted as set forth in

Section 5(f) of this Lease, Tenant may install, maintain, replace, remove or

use any communications or computer wires, cables and related electronic signal

transmission devices (collectively the “Lines”), provided:  (a) Tenant shall obtain Landlord’s prior

written consent, which shall not be unreasonably withheld or delayed, use an

experienced and qualified contractor reasonably approved in writing by

Landlord, and comply with all of the other provisions of this Lease, (b) any

such installation, maintenance, replacement, removal or use shall comply with

all laws, ordinances, codes and regulations applicable thereto and good work practices,

and shall not interfere with the use of any then existing Lines at the Project,

(c) an acceptable number of spare Lines and space for additional Lines shall be

maintained in the Building for existing and future occupants of the Project, as

determined in Landlord’s reasonable opinion, (d) if Tenant at any time uses any

equipment that may create an electromagnetic field exceeding the normal

insulation ratings of ordinary twisted pair riser cable or cause radiation

higher than normal background radiation, the Lines therefor (including riser

cables) shall, at Tenant’s sole consent and expense, be appropriately insulated

to prevent such excessive electromagnetic fields or radiation, (e) as a

condition to permitting the installation of new Lines, Landlord may require

that Tenant remove existing Lines located in or serving the Premises, (f)

Tenant’s rights shall be subject to the rights of any regulated telephone

company, and (g) Tenant shall pay all costs in connection therewith.  Landlord reserves the right to require that

Tenant remove any Lines located in or serving the Premises which are installed

in violation of these provisions, or which are at any time in violation of any

laws, ordinances, codes and regulations or represent a dangerous or potentially

dangerous condition (whether such Lines were installed by Tenant or any other

party), within three (3) days after written notice.  Landlord may (but shall not have the obligation to):  (i) install new Lines at the Project, (ii)

create additional space for Lines at the Project, and (iii) reasonably direct,

monitor and/or supervise the installation, maintenance, replacement and removal

of, the allocation and periodic re-allocation of available space (if any) for,

and the allocation of excess capacity (if any) on, any Lines now or hereafter

installed at the Project by Landlord, Tenant or any other party (but Landlord

shall have no right 

 

45

 

to monitor or control the information transmitted through such Lines).  Such rights shall not be in limitation of

other rights that may be available to Landlord by law or otherwise.  If Landlord exercises any such rights,

Landlord may include those costs in Expenses (including without limitation,

costs for acquiring and installing Lines and risers to accommodate new Lines

and spare Lines, any associated computerized system and software for

maintaining records of Line connections, and the fees of any consulting

engineers and other experts); provided, any capital expenditures included in

Expenses hereunder shall be amortized (together with reasonable finance

charges).

 

Notwithstanding anything to the contrary contained in

this Lease, Landlord reserves the right to require that Tenant remove any or

all Lines installed by or for Tenant within or serving the Premises upon

termination of this Lease, provided Landlord so notifies Tenant prior to or

within thirty (30) days following such termination.  Any Lines not required to be removed pursuant to this Article

shall, at Landlord’s option, become the property of Landlord (without payment

by Landlord).  If Tenant fails to remove

such Lines as required by Landlord, Landlord may, after twenty (20) days

written notice to Tenant, remove such Lines, at Tenant’s expense (without

limiting Landlord’s other remedies available under this Lease or applicable

laws, ordinances, codes and regulations). 

Tenant shall not, without the prior written consent of Landlord in each

instance, grant to any third party a security interest or lien in or on the Lines,

and any such security interest or lien granted without Landlord’s written

consent shall be null and void.  Except

to the extent arising from the intentional or negligent acts of Landlord or

Landlord’s agents or employees, Landlord shall have no liability for damages

arising from, and Landlord does not warrant that the Tenant’s use of any Lines

will be free from the following (collectively called “Line Problems”):  (x) any eavesdropping or wire-tapping by

unauthorized parties, (y) any failure of any Lines to satisfy Tenant’s

requirements, or (z) any shortages, failures, variations, interruptions,

disconnections, loss or damage caused by the installation, maintenance,

replacement, use or removal of Lines by or for other tenants or occupants at

the Project, by any failure of the environmental conditions or the power supply

for the Project to conform to any requirements for the Lines or any associated

equipment, or any other problems associated with any Lines by any other cause.  Under no circumstances shall any Line

Problems be deemed an actual or constructive eviction of Tenant, render

Landlord liable to Tenant for abatement of Rent, or relieve Tenant from

performance of Tenant’s obligations under this Lease.  Landlord in no event shall be liable for damages by reason of

loss of profits, business interruption or other consequential damage arising

from any Line Problems.

 

33.                         Parking.  Landlord represents to Tenant that the

Building contains an indoor parking garage (the “Garage”).  Landlord shall provide in the Garage

sufficient parking spaces to maintain a parking ratio of four (4) parking

spaces per 1,000 square feet of floor area of the Building.  Except as may be otherwise set forth herein,

the Garage shall be open twenty-four (24) hours per day, seven (7) days per

week to tenants and their employees working within the Building holding valid

access cards.  Such right to park in the

Garage shall be on a non-exclusive basis in common with Landlord, other tenants

of the Building and other parties to which Landlord has granted rights in the

Garage.  Such parking shall be free of

charge during the 

 

46

 

Lease Term (as the same may be extended or renewed); provided, however,

the foregoing shall not limit or restrict Landlord’s right to include in

Expenses costs associated with such Garage pursuant to the terms of this

Lease.  During normal business hours,

visitor parking shall be available on a limited basis within the Garage.  Landlord shall provide Tenant with not less

than fifty (50) access cards to permit Tenant and its employees to access the

Garage and Tenant shall provide Landlord with the names of all such parties

holding such access cards along with the make and model of such automobiles to

be located within the Garage and the license plate of such automobiles.  Tenant shall notify Landlord immediately

upon any change in the holder of any such access card.  Landlord hereby represents to Tenant that

Landlord shall implement and enforce reasonable rules and regulations to assure

orderly operation of the Garage and the availability of fifty (50) unassigned

parking spaces for Tenant and its employees during normal office business

hours.  Further, Tenant shall at all

times comply with all applicable rules and regulations implemented by Landlord

with respect to the use of the Garage. 

Landlord reserves the right to adopt, modify and enforce reasonable

rules governing the use of the Garage from time to time, including any key-card,

sticker or other identification or entrance system.  Landlord may refuse to permit any person who violates such rules

and regulations for the Garage to park in the Garage, and any violation of said

rule shall subject the automobile to removal, at such person’s expense from the

Garage.  If such violations of the rules

and regulations relating to the Garage persist or in the event any other

non-monetary default by Tenant under this Section 33 is not cured within ten

(10) days after written notice thereof to Tenant, Landlord may cancel Tenant’s

use of the Garage.  Such default under

this Section 33 shall also subject Tenant to any and all other rights or

remedies permitted Landlord at law or in equity or provided in this Lease.  Other than as set forth herein, in no event

shall any overnight parking be permitted in the Garage; provided, however,

Landlord hereby acknowledges that in the course of Tenant’s business

operations, certain of Tenant’s employees and officers shall desire to leave

their cars on an overnight basis within the Garage for purposes of travel

necessity (i.e., such parties leave their car in the Garage and use alternate

transportation to travel to and from airports in and around the Chicago

metropolitan area for purposes of business travel). Accordingly,

notwithstanding the foregoing, solely in connection with such business travel

(and in no event for storage of such cars) and so long as Tenant is not in

default under this Lease beyond applicable notice and cure periods, Tenant

shall be entitled to permit not more than twelve (12) cars of its officers or

employees to remain parked in the Garage on an overnight basis for not more

than ten (10) consecutive nights.  In

connection therewith, in order for such overnight parking to be permitted by Landlord

hereunder, Tenant shall be required to provide not less than one (1) day prior

written notice to Landlord specifying the identification of the automobile,

license plate number and individual (which must be a party then validly holding

an access card to the Garage) who will be leaving such automobile in the Garage

on an overnight basis.  If Tenant fails

to provide such information to Landlord on a timely basis, then such automobile

shall be parked in the Garage on an overnight basis without Landlord’s prior

written consent and accordingly shall be subject to towing and other penalties

uniformly assessed by Landlord for non-compliance with the rules and

regulations of the Garage.  Tenant

acknowledges and agrees that the Garage may be used by the adjacent retail

center during nights and weekend hours; provided, however, in no event shall

the foregoing limit Tenant’s right to have the non-exclusive 

 

47

 

use of fifty (50) parking spaces within the Garage during normal office

business hours.  Landlord shall have no

liability whatsoever for any damage to property or any other items located in

the Garage, nor for any personal injuries or death arising out of any matter

relating to the Garage.  Landlord

reserves the right to create short-term parking spaces and to reserve spaces

for visitors, small cars and 

handicapped persons and Tenant shall not park nor permit its employees

to park  in any such spaces reserved

generally for visitors to the Building; provided, however, in no event shall

the foregoing limit Tenant’s right to have the non-exclusive use of fifty (50)

parking spaces within the Garage during normal office business hours.  Landlord also reserves the right to close

all or any portion of the Garage in order to make repairs or perform maintenance

services, or to alter, modify, restripe or renovate the Garage, or if required

by casualty, strike, condemnation, act of God, governmental law or requirement

or other reason beyond Landlord’s reasonable control.

 

34.                         Entry

Cards.  Landlord

shall provide limited access to the Building during other than ordinary

business hours in the form of special limited access entry cards (“Entry

Cards”) for Tenant and its employees. 

An Entry Card shall not automatically qualify Tenant or any of its

employees for an access card to the Garage. 

Landlord shall provide Tenant with four (4) cards per 1,000 per square

feet of Rentable Area in the Premises (which Landlord and Tenant acknowledge

and agree is a total of fifty (50) cards). 

Tenant shall reimburse Landlord for its actual cost in providing any

additional or replacement cards.  The

current cost required for a replacement card and an additional card is $10.00

per card.  Landlord shall be entitled to

cancel any lost or stolen cards of which it becomes aware.  Tenant shall promptly notify Landlord of any

lost or stolen cards.  Landlord shall

have no liability to Tenant or any of its officers, directors, employees,

agents, contractors or invitees for any losses due to theft or burglary or for

damages committed by unauthorized persons on the Premises; and Landlord shall

not be required to insure against such losses. 

Tenant shall cooperate fully in Landlord’s efforts to maintain security

in the Building and shall follow all regulations promulgated by Landlord with

respect thereto.  Tenant further agrees

to surrender all remaining Entry Cards in its possession upon the expiration or

earlier termination of this Lease.

 

35.                         Extension Option.  Tenant, at its option, shall have the right

to extend (the “Options to Extend”) the Term of this Lease for the entire

Premises for two (2) additional periods of five (5) years each (individually,

the “Extended Term”) by delivering written notice to Landlord at least one (1)

year prior to the expiration of the then current Term of this Lease; provided

that, at the time said notice is so delivered and on the commencement of the

applicable Extended Term, Tenant is not in default under this Lease beyond

applicable notice and cure periods. 

Subject to the conditions set forth in the preceding sentence, if Tenant

provides timely notice of its election to exercise an Option to Extend, this

Lease shall be deemed extended for an Extended Term upon the same terms,

covenants and conditions as provided in this Lease for the Term except that

Base Rent during each Extended Term shall be as follows: (i) for the first

Extended Term, Base Rent for the first Lease Year of such Extended Term shall

be equal to one hundred three percent (103%) of the Base Rent for the Lease

Year immediately preceding such Extended Term and for each subsequent Lease

Year of the first Extended Term, the Base Rent shall increase by three percent

(3%) per annum; and (ii) for the second Extended Term, the Base Rent for said

Extended Term shall be the “Market Rent” as determined pursuant to the

provisions of Exhibit “I” attached to this Lease.  Any termination of this Lease during the

Term shall terminate the Options to Extend. 

Other than as set forth herein, any assignment of this Lease or subletting

of all or a part of the Premises by Tenant shall terminate the Options to

Extend; provided, however, in no event shall an assignment of this 

 

48

 

Lease or sublet of all or any portion of the Premises to a “Related

Party Permitted Transferee” be deemed to terminate the Options to Extend.

 

36.                         Termination Right.  Subject to the terms and conditions set

forth herein, Tenant shall have a one-time right to terminate this Lease upon

the expiration of the fifth (5th) Lease Year by providing written

notice of such termination to Landlord no later than the expiration of the

fourth (4th) Lease Year and the payment of the Termination Fee (as

hereinafter defined) contemporaneously with Tenant’s delivery of such written

notice of termination to Landlord.  In

no event shall Tenant’s right to terminate be applicable in the event at the

time of Tenant’s such termination Tenant is then in default under any of the

terms and conditions of this Lease beyond applicable notice and cure periods

nor shall Tenant’s termination notice be effective if the Termination Fee (paid

via a certified or cashier’s check or by wire transfer) does not accompany

Tenant’s notice of termination to Landlord. 

As used herein, the Termination Fee shall be equal to Monthly Base Rent

due and payable under this Lease for the first seven (7) full calendar months

of the sixth (6th) Lease Year along with all Tax Adjustments and

Expense Adjustments due under this Lease during such seven (7) month period

(except that solely for purposes of calculating the Tax Adjustment and Expense

Adjustment component of the Termination Fee, such amounts shall be calculated

by using the amount of such estimated Tax Adjustments and Expense Adjustments

due under this Lease for the last month of the fourth (4th) Lease

Year).

 

37.                         Right of First Offer.  Landlord hereby grants to Tenant the

one-time right of first option to lease, upon the terms and conditions

hereinafter set forth, that portion of the Building located on the second floor

and identified on the floor plan attached to this Lease as Exhibit “F”

as the “Offer Space” (which contains approximately 1,500 rentable square feet)

as and when such Offer Space becomes “available for leasing” (as hereinafter

defined).  Landlord and Tenant

acknowledge and agree that the Offer Space is not currently leased and is

currently “available for lease”. 

Accordingly, notwithstanding the foregoing, the terms and provisions of

this Section 37 providing for Tenant’s right of first offer for such Offer

Space shall not be applicable until such time as the first lease for such Offer

Space, as such lease may be extended or renewed, expires or is terminated and

such Offer Space thereafter becomes “available for leasing”.  The Offer Space shall be deemed to be

“available for leasing”, subject to the first lease of such space as noted

above, at such time as no other party who has a prior right to such Offer Space

pursuant to a right of first offer or right of first refusal elects to lease

such Offer Space and thereafter Landlord places such Offer Space on the open

market for lease to third parties. 

Prior to Landlord’s leasing the Offer Space at such time, Landlord shall

give Tenant a written notice (the “Offer Notice”) of the availability of the Offer

Space and the date upon which possession of the Offer Space is available to

Tenant (the “Offer Space Commencement Date”). 

Following Landlord’s delivery of such Offer Notice to Tenant, Tenant

shall have a period of not more than ten (10) calendar days within which to

elect to lease such Offer Space by written notice to Landlord, time being of

the essence.  If such right is not so

exercised, Tenant’s rights as set forth in this Section 37 shall thereupon

terminate and no longer be in full force and effect.  Landlord may thereafter rent all or any portion of the Offer

Space without notice to Tenant and free of any right of Tenant.  In no event shall Tenant be permitted to

elect to lease less than the entire area of the Offer Space.  The 

 

49

 

right of first offer granted hereunder is only applicable in the event

a minimum of twenty-five (25) full calendar months of the Term of this Lease

remain as of the date that Tenant would first commence paying rent for the

Offer Space and at such time as less than twenty-five (25) months remain in the

then current Term of this Lease, Landlord shall no longer be obligated to

provide such Offer Notice to Tenant and the terms and provisions of this

Section 37 shall thereafter be null and void and of no further force and

effect.  Notwithstanding anything to the

contrary contained herein, Landlord and Tenant acknowledge and agree that in

the event Landlord intends to enter into a first lease for the Offer Space

which shall be for a term with an expiration date (including any renewal

option) later than the end of the fourth (4th) Lease Year of the

Term of this Lease, then prior to Landlord entering into such first lease,

Landlord shall provide Tenant with the right of first refusal as set forth on Exhibit

“H” attached to this Lease.  In the

event Tenant fails to elect to lease the Offer Space pursuant to such right of

first refusal, then the remaining terms and provisions of this Section 37 shall

thereafter be applicable.

 

Tenant may only

exercise its right to lease the Offer Space and an exercise thereof shall only

be effective if, at the time of Tenant’s exercise of said right and on the

applicable Offer Space Commencement Date, this Lease is in full force and

effect and Tenant is not then in default under this Lease beyond applicable

notice and cure periods and inasmuch as this right of first offer is intended

only for the benefit of the original Tenant named in this Lease, the entire

Premises are then occupied by the original Tenant named herein (or a Related

Party Permitted Transferee) and the original Tenant has not assigned this Lease

or sublet all or any portion of the Premises; provided, however, in no event

shall the foregoing limit or restrict Tenant’s right to exercise its option to

lease the Offer Space pursuant to the terms and provisions of this Section 37

in the event of an assignment of this Lease or sublet of all or any portion of

the Premises to a Related Party Permitted Transferee.  Without limitation of the foregoing, no sublessee or assignee

other than a Related Party Permitted Transferee shall be entitled to exercise

any right hereunder and no exercise of any such right hereunder by any party

other than the original Tenant named herein or a Related Party Permitted

Transferee shall be effective.  In addition

to the foregoing, Landlord and Tenant acknowledge and agree that following

Tenant’s delivery to Landlord of a notice to terminate this Lease pursuant to

the terms and provisions of Section 36 hereinbelow, then Tenant shall no longer

be permitted to exercise its option to lease the Offer Space pursuant to the

terms and conditions of this Section 37; provided, however, in no event shall

the foregoing limit or restrict Tenant’s liability for rent and other

obligations in the event Tenant has exercised its option to lease the Offer

Space prior to the delivery of such a termination notice as set forth in

Section 36 of this Lease.

 

If Tenant validly

exercises its right to lease the Offer Space pursuant to this right of first

offer, then effective as of the Offer Space Commencement Date the Offer Space

shall be included in the Premises subject to all the terms, conditions and

provisions of this Lease except that (i) the Base Rent due for the Offer Space

shall be equal to the then current Base Rent payable under this Lease for the

Premises determined on a per square foot basis and the Base Rent for the

remainder of the Term for the Offer Space shall be equal to the Base Rent

payable for the remainder of the Premises; (ii) the net rentable area of the

Premises shall be increased by 

 

50

 

the net rentable

area of such Offer Space and such rentable area of the Premises as so increased

shall be utilized in calculating the increases in Base Rent and in Tenant’s

proportionate share for purposes of Additional Rent due under this Lease; (iii)

Tenant shall be entitled to six (6) additional parking spaces and additional

access cards for the Garage and six (6) additional Entry Cards; (iv) the term

of the demise covering such Offer Space shall commence on the Offer Space

Commencement Date and shall expire on the expiration of the Term so as to be

coterminous with the Term of this Lease, including any extension or renewal

thereof in accordance with the terms and provisions of this Lease; (v)

possession of the Offer Space shall be delivered in an “as-is” basis; (vi)

Landlord shall provide Tenant with a build-out allowance for the Offer Space as

follows: (a) in the event the Offer Space has been previously improved for

occupancy by a tenant, then Landlord shall provide Tenant with a build-out

allowance equal to $6.43 per square foot of net rentable area of the Offer

Space, and (b) in the event the Offer Space has not previously been built out

for occupancy by a tenant, then Landlord shall provide Tenant with a build-out

allowance equal to $30.00 per square foot of net rentable area of the Offer

Space; (vii) Tenant shall build out the Offer Space with alterations, additions

and/or improvements pursuant to a workletter agreement upon terms substantially

similar to those set forth in the Workletter Agreement attached to this Lease

as Exhibit “E”; and (viii) effective upon the Offer Space Commencement

Date, Tenant shall increase the security deposit then held by Landlord to equal

one (1) month’s gross rent due under this Lease for the full Premises then

being demised hereunder.

 

If Tenant validly

exercises its right to lease the Offer Space in accordance with the terms

hereof, Landlord and Tenant shall enter into a written amendment to this Lease

confirming the terms, conditions and provisions applicable to such Offer Space

as determined in accordance herewith.

 

In the event

Landlord is unable to deliver to Tenant possession of the Offer Space on or

before the Offer Space Commencement Date for any reason whatsoever, Landlord

shall not be subject to any liability for such failure to deliver

possession.  Said failure to deliver

possession shall not affect either the validity of this Lease or the obligations

of either Landlord or Tenant hereunder or be construed to extend the expiration

of the Term of this Lease either as to the Offer Space or the balance of the

Premises; provided, however, that under such circumstances rent shall not

commence as to such Offer Space until Landlord does so deliver possession to

Tenant.

 

38.                         Exculpatory Provisions.  The liability of any Landlord under this

Lease or any amendment to this Lease, or any instrument or document executed in

connection with this Lease, shall be limited to and enforceable solely against

the assets of such Landlord constituting an interest in the Land or Building

and not other assets of such Landlord. 

Assets of a Landlord which is a partnership do not include the assets of

the partners of such Landlord, and negative capital account of a partner in a

partnership which is Landlord and an obligation of a partner to contribute

capital to the partnership which is Landlord shall not be deemed to be assets

of the partnership which is Landlord. 

No directors, officers, employees or shareholders of any 

 

51

 

corporation which is Landlord shall have any personal liability arising

from or in connection with this Lease. 

At any time during which Landlord is trustee of a land trust, all of the

representations, warranties, covenants and conditions to be performed by it

under this Lease or any documents or instruments executed in connection with

this Lease are undertaken solely as trustee, as aforesaid, and not

individually, and no personal liability shall be asserted or be enforceable

against it or any of the beneficiaries under said trust agreement by reason of

any of the representations, warranties, covenants or conditions contained in

this Lease or any documents or instruments executed in connection with this

Lease.

 

52

 

IN WITNESS WHEREOF,

the parties have caused this Lease to be executed on the date first above

written.

 

	

   

  	

  LANDLORD:

  
	

   

  	

   

  
	

   

  	

  ECD-LINCOLNSHIRE OFFICE,

  L.L.C.

  
	

   

  	

  By:  ECD-Lincolnshire Manager II, L.L.C., its

  Manager

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

   

  	

  Scott Greenberg

  
	

   

  	

   

  	

  Managing Member

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  TENANT:

  
	

   

  	

   

  
	

   

  	

  SAUER-DANFOSS

  INC., a Delaware corporation

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Its:

  	

   

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

  ATTEST:

  	

   

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
						

 

53

 

EXHIBIT A

 

DESCRIPTION OF PREMISES

 

[TO BE ATTACHED]

 

1

 

EXHIBIT B

RULES AND REGULATIONS

 

1.                            Access to

Building:  Access to the

Building or to the halls, corridors, elevators and stairways in the Building

may be restricted and access at all times shall be gained only by exhibiting an

appropriate security pass or by otherwise complying with the established

Building security regulations.  Landlord

may from time to time establish security controls and regulations for the

purpose of regulating or restricting access to the Building, and Landlord may

restrict access to washrooms by key, key combination or other security

device.  Tenant shall abide by all such

security controls and regulations so established.

2.                            Protecting

Premises:  Before leaving

the Premises unattended, Tenant shall close and securely lock all doors or

other means of entry to the Premises and, if practical, shut off all utilities,

lights and machines in the Premises. 

Tenant shall be responsible for protecting the Premises and all property

and persons in the Premises from theft, robbery, pilferage and other crimes and

keeping the Premises secure.

3.                            Building

Directory:  If there is a

directory of the Building in the lobby of the Building, it shall have Tenant’s

name and will be provided at the expense of Landlord.  Any additional names requested by Tenant in the directory other

than Tenant’s name must be approved by Landlord in writing, and, if so

approved, will be provided at the sole expense of the Tenant.

4.                            Large Articles:  Furniture, freight and other large or heavy

articles may be brought into the Building only at times and in the manner

(including use of freight lifts or elevators and the loading area) designated

by Landlord, on at least twenty-four hours notice by Tenant and always at

Tenant’s sole responsibility.  Subject

to Section 13(a) of the Lease, all damage done to the Building by moving or

maintaining such furniture, freight or articles shall be repaired at the expense

of Tenant.  All furniture, equipment,

cartons and similar articles desired to be removed from the Premises or the

Building shall be listed in writing by Tenant with Landlord and a removal

permit therefor shall first be obtained from Landlord.

5.                            Signs:  Except as provided in the Lease, Tenant

shall not paint, display, inscribe, maintain or affix any sign, placard,

picture, advertisement, name, notice, lettering or direction on any part of the

outside or inside of the Building, or on any part of the outside of the

Premises, or on any part of the inside of the Premises which can be seen from

the outside of the Premises, without the prior written consent of Landlord, and

then only such name or names or content and in such color, size, style,

character, material and manner of affixing as may be first approved by Landlord

in writing.  Landlord reserves the right

to remove at Tenant’s expense all sign matter not consented to or approved by

Landlord.

6.                            Advertising:  Tenant shall not use any picture or likeness

of the Building in any letterheads, envelopes, circulars, notices,

advertisements, containers or wrapping material.

7.                            Compliance

with Laws:  

Intentionally deleted.

8.                            Hazardous

Materials:  

Intentionally deleted.

9.                            Defacing

and Altering Premises and Overloading: Tenant shall not place

anything or allow anything to be placed in the Premises near the glass of any

door, partition, wall or window which may be unsightly from outside the

Premises, and Tenant shall not place or 

 

1

 

permit to be placed any article of any kind on any window ledge or on

the outside of the exterior walls of the Premises or the Building.  No blinds, shades, draperies or other forms

of inside window covering other than those provided by Landlord may be

installed in the Premises.  Tenant shall

not do any painting or decorating in the Premises or install any floor

coverings in the Premises or make, paint, cut or drill into, drive nails,

screws or other fasteners into or in any way deface any part of the Premises or

Building without in each instance obtaining the prior written consent of

Landlord.  Tenant shall not overload any

floor or part thereof in the Premises in excess of the live load therefor, or

any facility in the Building or any public corridors or elevators therein while

bringing in or removing any large or heavy articles.  Landlord may direct and control the location of safes and all

other heavy articles and, if considered necessary by Landlord, require

supplementary supports at the expense of Tenant of such material and dimensions

as Landlord may deem necessary to properly distribute the weight.

10.                          Obstruction

of Public Areas:  Tenant

shall not take or permit to be taken in or out of other entrances of the

Building, or take or permit on other elevators, any item normally or required

by Landlord to be taken in or out through service doors or in or on freight

elevators; and Tenant shall not, whether temporarily, accidentally or

otherwise, allow anything to remain in, place or store anything, in, or

obstruct in any way, any sidewalk, court, passageway, entrance, exit, loading

or shipping area or hall, corridor, elevator or stairway.  Tenant shall lend its full cooperation to

keep such areas free from all obstruction and in a clean and sightly condition,

and move all supplies, furniture and equipment as soon as received directly to

the Premises, and shall move all such items and waste (other than waste

customarily removed by Building employees) that are at any time being taken

from the Premises directly to the areas designated for disposal.  All courts, passageways, entrances, exits,

loading or shipping areas, elevators, stairways, corridors, halls and roofs are

not for the use of the general public and Landlord shall in all cases retain

the right to control and prevent access thereto by all persons whose presence

in the judgment of Landlord shall be prejudicial to the safety or security of

the Building or its occupants.  No

tenant and no employee, agent, licensee, invitee or contractor of Tenant shall

enter into areas reserved for the exclusive use of Landlord or its agents,

employees, licensees or invitees.

11.                          Keys and

Additional Locks:  Tenant

shall not attach or permit to be attached additional locks or similar devices

to any door or window, change existing locks or the mechanisms thereof, or make

or permit to be made any keys or security access cards for any door other than

those provided by Landlord.  If more

than two keys or security access cards for one lock are desired, Landlord will

provide them to Tenant upon payment therefor by Tenant.  Upon termination of the Lease or of Tenant’s

possession, Tenant shall surrender all keys or security access cards to the

Premises and all keys or security access cards for offices, rooms or toilet

rooms which have been furnished to Tenant or which Tenant shall have made, and

in the event of loss of any keys or security access cards so furnished, Tenant

shall pay Landlord therefor.

12.                          Communication

or Utility Connections:  

Intentionally deleted.

13.                          Management

Office:  Service requirements

of Tenant will be attended to only upon application at the management office

for the Building.  Employees of

Landlord, its beneficiaries or the managing agent of the Real Property shall

not perform any work or do 

 

2

 

anything outside of their duties unless under special instructions from

Landlord.

14.                          Outside

Services:  No tenant

shall obtain for use upon the Premises ice, drinking water, towel or other

similar services on the Premises, except from persons authorized by Landlord

and at the hours and under regulations fixed by Landlord.

15.                          Toilet

Rooms:  The toilet rooms,

urinals, wash bowls and the other bathroom apparatus shall not be used for any

purpose other than that for which they were constructed, and no foreign

substance of any kind whatsoever shall be thrown therein, and the expense of

any breakage, stoppage or damage resulting from the violation of this rule

shall be borne by the tenant who, or whose employees, agents, licensees,

invitees or contractors, shall have caused it.

16.                          Intoxication:  Landlord reserves the right to exclude or

expel from the Building any person who, in the reasonable judgment of Landlord,

is intoxicated or under the influence of liquor or other drugs, or who shall in

any manner do any act in violation of any of the rules and regulations of the

Building.

17.                          Vending

Machines:  No vending

machines of any description shall be installed, maintained or operated in the

Premises or the Building without the prior written consent of Landlord.

18.                          Nuisances

and Certain Other Prohibited Uses:  Tenant shall not (i) conduct itself or permit its employees,

agents, licensees, invitees or contractors to conduct themselves in a manner

inconsistent with the comfort or convenience of other tenants or the

first-class character of the Building; (ii) install or operate any internal

combustion engine, boiler, machinery, refrigerating, heating or

air-conditioning apparatus or space heater in or about the Premises; (iii)

carry on any business in or about the Premises or the Building or sell any

article, thing or service except those ordinarily embraced within the permitted

use of the Premises specified in Section 3; (iv) use the Premises for housing,

lodging or sleeping purposes; (v) permit preparation of food in the Premises;

(vi) place any radio or television antennae on the roof or on or in any part of

the inside or outside of the Building other than the inside of the Premises;

(vii) operate or permit to be operated any radio, television, record player,

stereo, tape player, musical instrument or other sound producing instrument or

device inside or outside the Premises which may be heard outside the Premises;

(viii) use any illumination or power for the operation of any equipment or

device other than electricity; (ix) operate any electrical device from which

may emanate electrical waves which interferes with or impairs radio or

television broadcasting or reception from or in the Building or elsewhere; (x)

bring or permit to be in the Building any bicycle or other vehicle, or dog

(except in the company of a blind or deaf person) or other animal or bird; (xi)

make or permit any objectionable noise or odor to emanate from the Premises or

allow migration of air-borne odors or particulates outside the Premises; (xii)

disturb, solicit or canvass any occupant of the Building; (xiii) do anything in

or about the Premises tending to create or maintain a nuisance or do any act

tending to injure the reputation of the Building; or (xiv) throw or drop or

permit to be thrown or dropped any article from any terrace, window or other

opening in the Building.

19.                          Room-to-Room

Canvass:  Tenant shall

not make any room-to-room canvass to solicit business from other tenants or

occupants of the Building or for any other purpose and shall not exhibit, sell

or offer to sell, use, rent or exchange any products or services in or from the

Premises unless ordinarily embraced within the permitted use of the Premises

specified in Section 3.

 

3

 

20.                          Waste:  Tenant shall not waste or permit the waste

of water, heat or air-conditioning and agrees to cooperate fully with Landlord

to assure the most effective and energy efficient operation of the Building

heating and air-conditioning, and shall not allow the adjustment (except by

Landlord’s authorized building personnel) of any water, heat or air

conditioning controls.  Tenant shall

keep corridor doors closed.  Tenant

shall lower and adjust any Venetian blinds, shades or draperies on the windows

in the Premises if such lowering and adjustment reduces the sunlight and

additional heat load created thereby in the Premises.

21.                          No

Smoking:  No smoking will

be allowed in the common or public areas of the Building, and Tenant shall

comply with any applicable smoking ordinances passed from time to time by any

governmental agency having jurisdiction over the Building.

 

4

 

EXHIBIT

C

ESTOPPEL CERTIFICATE

 

 

[PURCHASER’S

NAME]  [MORTGAGEE’S NAME] [LANDLORD’S

NAME]

[ADDRESS]

 

Attention:                                  

 

Re:          City Park Corporate Center

Lincolnshire, Illinois (the

“Building”)

 

Gentlemen:

The following

statements are made with the knowledge that you, as [purchaser, mortgagee,

landlord] (“[Purchaser/Mortgagee/Landlord]”), and your mortgage lender are

relying on them in connection with your [purchase, mortgage loan, ownership] of

the Building and the assignment to you of the Lease referred to below in

connection therewith, and you and your successors and assigns and successor

owners of the Building may rely on them for that purpose.

The undersigned

(“Tenant”), being the Tenant under the Lease referred to in Paragraph 1 below,

covering certain premises (“Leased Premises”) in the Building, hereby certifies

to you that the following statements are true, correct and complete as of the

date hereof:

1.                            Tenant

is the tenant under a Lease

with                        (“Landlord”),

or Landlord’s predecessor in title to the Building dated           ,

20    , demising to

Tenant  (         )

square feet in the Building. The initial term of the Lease commenced

on             ,

20  , and will expire

on            ,

20   , exclusive of unexercised renewal options and extension

options contained in the Lease.  There

have been no amendments, modifications or revisions to the Lease, and there are

no agreements of any kind between Landlord and Tenant regarding the Leased

Premises, except as provided in the Lease or except as follows:  (if none, write “none”).

The Lease, and all

amendments and other agreements referred to above, are referred to in the

following portions of this letter collectively as the “Lease.”

2.                            The

Lease has been duly authorized and executed by Tenant and is in full force and

effect, and Tenant has delivered to the undersigned concurrently herewith a

true, correct and complete copy of the Lease.

3.                            Tenant

has accepted and is in sole possession of the Leased Premises and is presently

occupying the Leased Premises.  The

Lease has not been assigned, by operation of law or otherwise, by Tenant and no

sublease, concession agreement or license covering the Leased Premises, or any

portion of the Leased Premises, has been entered into by Tenant except as

follows:                                   

(if none, write “none”).  If the

landlord named in the Lease is other than Landlord, Tenant has received notice

of the assignment to Landlord of the landlord’s interest in the Lease and

Tenant recognizes Landlord as the landlord under the Lease.

4.                            Tenant

began paying rent

on          ,

20    .  Tenant is

obligated to pay fixed or base rent under the Lease in the annual amount of

                                                     

Dollars ($           ),

payable in monthly installments of

                        

Dollars ($       ).  No rent under the Lease has been paid more

than one (1) month in advance, and no other sums have been 

 

1

 

deposited with Landlord other than

                         

Dollars ($      ) deposited as security under the

Lease.  Except as specifically stated in

the lease, Tenant is entitled to no rent concessions or free rent.  The Lease provides for the Tenant to pay

      percent (    %) of operating

expenses and real property taxes.

5.                            To

the best of Tenant’s actual knowledge, all conditions and obligations of

Landlord relating to completion of tenant improvements and making the Leased

Premises ready for occupancy by Tenant have been satisfied or performed and all

other conditions and obligations under the Lease to be satisfied or performed,

or to have been satisfied or performed, by Landlord as of the date hereof have

been fully satisfied or performed except as follows:

                                             

(if none, write “none”).

6.                            To

the best of Tenant’s actual knowledge, Landlord is not in default under any

provision of the Lease except as follows:

                                        

(if none, write “none”).

7.                            Tenant

has not received any notice of any present violation of any federal, state,

county or municipal laws, regulations, ordinances, orders or directives

relating to the use or condition of the Leased Premises or the Building.

8.                            Except

as specifically stated in the Lease, Tenant has not been granted (a) any option

to extend the term of the Lease, (b) any option to expand the Leased Premises

or to lease additional space within the Building, (c) any right of first

refusal on any space in the Building, (d) any right to terminate the Lease

prior to its stated expiration, or (e) any option or right of first refusal to

purchase the Leased Premises or the Building or any part thereof.

EXECUTED as of

the       day

of            ,

20   .

 

	

   

  	

  TENANT

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  (Name of Tenant)

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  

 

The undersigned

Guarantor(s) of the Lease hereby certifies (certify) to

[Purchaser/Mortgagee/Landlord] and its successors and as of the date hereof

that its (their) guaranty of the Lease is in full force and effect and has not

been amended or modified and that the undersigned Guarantor(s) has (have) no

claims or defenses under the guaranty or otherwise in respect to its (their)

performance in full of all terms, covenants and conditions of the guaranty.

 

2

 

EXHIBIT D

MASTER SITE PLAN

 

1

 

[PURCHASER’S NAME] [MORTGAGEE’S NAME] [LANDLORD’S NAME]

Page 2

                        ,

19    

 

2

 

EXHIBIT E

WORKLETTER AGREEMENT

This Workletter

(“Workletter”) is executed simultaneously with that certain Lease between

SAUER-DANFOSS INC., a Delaware corporation, as Tenant and ECD-LINCOLNSHIRE

OFFICE, L.L.C., as Landlord, relating to demised premises (“Premises”) at the

building commonly known as City Park Corporate Center in Lincolnshire, Illinois

(the “Building”), which Premises are more fully identified in the Lease.  Capitalized terms used herein, unless

otherwise defined in this Workletter, shall have the respective meanings

assigned to them in the Lease.  The

terms and provisions of this Workletter are incorporated into the Lease.

For and in

consideration of the agreement to lease the Premises and the mutual covenants

contained herein and in the Lease, Landlord and Tenant hereby agree as follows:

1.            WORK.  Tenant, at its sole cost and expense except as otherwise set forth

herein, shall perform, or cause to be performed, the work (the “Work”) in the

Premises provided for in the Plans (as defined in Paragraph 2 hereof) submitted

to and approved by Landlord.  Tenant’s

Work shall be constructed in a good and workmanlike fashion.

2.            PRE-CONSTRUCTION ACTIVITIES.

(a)           Landlord and Tenant acknowledge and

agree that attached to this Workletter as Attachment 1 is a floor plan/design

drawing of the Premises which is satisfactory to both Landlord and Tenant.

(b)           Within forty-five (45) days following

Landlord’s approval of the design drawings, Tenant shall cause to be prepared

the Plans (as hereinafter defined) in accordance with the terms and provisions

of the Lease and this Workletter. 

Landlord shall have the right to approve the Plans in the manner set

forth below.

(c)           Within seven (7) days following the

Tenant’s completion of the Plans and Landlord’s approval of same, Tenant shall

send the Plans out to bid and apply for any and all necessary licenses, permits

and approvals from applicable governmental authorities (including, without

limitation, the Village of Lincolnshire) to perform the Work and occupy the

Premises for its business operations.

(d)           At such time as Tenant has completed

its bidding out of the Work, Tenant shall provide the results of same to

Landlord.

(e)           Prior to the commencement of Tenant’s

Work, Tenant shall submit the following information and items to Landlord for

Landlord’s review and approval:

(i)            A construction schedule containing

the major components of the Work.

(ii)           An itemized statement of estimated

construction cost, including permits and architectural and engineering fees.

(iii)          Evidence reasonably satisfactory to

Landlord of Tenant’s ability to pay the cost of the Work as and when payments

become due.

(iv)          The names and addresses of Tenant’s

contractors (and the contractor’s subcontractors) to be engaged by Tenant for

the Work (“Tenant’s Contractors”), which contractors must be reputable.

 

1

 

(v)           Certified copies of insurance

policies or certificates of insurance as hereinafter described.  Tenant shall not permit Tenant’s Contractors

to commence work until the required insurance has been obtained and certified

copies of policies or certificates have been delivered to Landlord.

(vi)          Intentionally Deleted.

(vii)         The Plans (as hereinafter defined) for

the Work, which Plans shall be subject to Landlord’s approval in accordance

with Paragraph 2(f) below.  Tenant will

update such information and items by notice to Landlord of any changes.

(f)            As used herein the term “Plans”

shall mean full and detailed architectural and engineering plans and

specifications covering the Work (including, without limitation, architectural,

mechanical and electrical working drawings for the Work as well as all interior

finish detail).  The Plans shall be

subject to Landlord’s approval and the approval of all local governmental authorities

requiring approval, if any.  Landlord

shall give its approval or disapproval (giving general reasons in case of

disapproval) of the Plans within seven (7) days after their delivery to

Landlord.  Landlord agrees not to

unreasonably withhold its approval of said Plans; provided, however, that

Landlord shall not be deemed to have acted unreasonably if it withholds it

consent because:  the Work is likely to

adversely affect Building systems, the structure of the Building or the safety

of the Building and its occupants; the Work would impair Landlord’s ability to

furnish services to Tenant or other tenants; the Work would increase the cost

of operating the Building; the Work would violate any governmental laws, rules

or ordinances; the Work contains or uses hazardous or toxic materials; the Work

would adversely affect the appearance of the Building and/or any of its common

areas; the Work would adversely affect another tenant’s premises; or the Work

is prohibited by any mortgage on the Building. 

The foregoing reasons, however, shall not be exclusive of the reasons

for which Landlord may withhold consent, whether or not such other reasons are

similar or dissimilar to the foregoing. 

If Landlord notifies Tenant that changes are required to the final Plans

submitted by Tenant, Tenant shall, within thirty (30) days thereafter, submit

to Landlord, for its approval, the Plans amended in accordance with the changes

so required.  The Plans shall also be

revised, and the Work shall be changed, to incorporate any work required in the

Premises by any local governmental field inspector.  Landlord’s approval of the Plans or any design drawings shall in

no way be deemed to be acceptance or approval of any element therein contained

which is in violation of any applicable laws, ordinances, regulations or other

governmental requirements. As set forth in Section 7 of the Lease, at the time

Landlord provides it approval of the Plans, Landlord shall have the right to

identify which items of Tenant’s Work Tenant shall be required to remove from

the Premises upon the expiration of the Term or earlier termination of the

Lease.

(g)           No Work shall be undertaken or

commenced by Tenant in the Premises until (i) Tenant has delivered, and

Landlord has approved, all items set forth in

 

2

 

this Section 2,

(ii) all necessary building permits have been obtained by Tenant, and (iii)

proper provision has been made by Tenant for payment in full of the cost of the

Work, which is reasonably satisfactory to Landlord and which, if applicable, shall

be in the form of the construction escrow referred to in Paragraph 9 hereof.

3.             DELAYS.  Notwithstanding anything to the contrary

contained in the Lease or this Workletter, Landlord and Tenant acknowledge and

agree that if Tenant fails to comply with its obligations to timely deliver

plans, information, materials or specifications in connection with Tenant’s

Work for any reason whatsoever (other than any delays caused by Landlord) and

such failure continues for a period in excess of ten (10) days after Landlord

provides written notice to Tenant, then Tenant shall be deemed to be in Default

under the Lease and in addition to any other remedy available to Landlord under

the Lease, at law or in equity, Landlord shall be entitled to terminate the

Lease upon written notice to Tenant.  In

addition, notwithstanding anything to the contrary contained in the Lease or

this Workletter, if Tenant has not obtained all necessary building permits by

June 1, 2002 due to (i) any failure by Landlord to approve Tenant’s Plans, (ii)

the issuance by the Village of Lincolnshire of a moratorium on issuing building

permits or (iii) the failure of Landlord to cause the Building’s base building

work to comply with applicable Village of Lincolnshire laws, ordinances,

regulations or other governmental requirements, then Tenant shall be entitled

to terminate the Lease upon written notice to Landlord; provided, however, in

no event shall Tenant have said right to so terminate the Lease in the event of

any of the following: (a) Tenant’s Plans fail to comply with any applicable

laws, ordinances, regulations or other governmental requirements of the Village

of Lincolnshire or other municipal authority; and/or (b) Tenant has failed to

use its diligent and good faith efforts to obtain such necessary building

permits and/or Tenant has failed to exhaust all of its efforts to comply with

such applicable laws, ordinances, regulations or other governmental

requirements (as the same may be interpreted by the Village of Lincolnshire)

both in preparing Tenant’s Plans and thereafter conforming with the

requirements of the Village of Lincolnshire. 

In the event Tenant elects to so terminate this Lease as set forth

hereinabove, Landlord shall be entitled to a period of not more than ninety

(90) days within which to attempt to obtain such building permit for Tenant’s

Work on Tenant’s behalf.  During such

ninety (90) day period, Tenant shall cooperate in good faith with Landlord in

attempting to obtain such building permits and if such building permits are obtained

prior to the expiration of such ninety (90) day period for work which is

substantially similar to Tenant’s Work as set forth in the Tenant’s Plans, then

Tenant’s notice of termination shall be deemed null and void and the Lease

shall remain in full force and effect. 

If Landlord obtains such building permits, then the reasonable costs and

expenses incurred by Landlord in obtaining such building permit shall be offset

against the Landlord’s Contribution due and owing under Paragraph 9 of this

Workletter.  In the event Landlord fails

to obtain such building permits, then all costs and expenses so incurred by

Landlord shall remain Landlord’s sole cost and expense.  In addition to the foregoing, if Tenant

fails to obtain such necessary building permits by June 1, 2002, then so long

as such failure to obtain the building permits is not due solely to the acts of

Landlord or its agents, contractors or employees, Landlord shall be entitled to

terminate the Lease upon written notice to Tenant.

 

3

 

4.             CHARGES AND FEES.  In accordance with Paragraph 9 below, Tenant

shall be responsible for all costs and expenses attributable to the Work except

for Landlord’s Contribution.

5.             CHANGE ORDERS.  All changes to the final Plans requested by

Tenant must be approved by Landlord in advance of the implementation of such

changes as part of the Work.  All delays

caused by Tenant-initiated change orders, including, without limitation, any

stoppage of work during the change order review process,  are solely the responsibility of Tenant and

shall cause no delay in the commencement of the Lease or the Rent and other

obligations therein set forth.

6.             STANDARDS OF DESIGN AND CONSTRUCTION

AND CONDITIONS OF TENANT’S PERFORMANCE.  All work done in or upon the Premises by

Tenant shall be done according to the standards set forth in this Paragraph 6,

except as the same may be modified in the Plans approved by or on behalf of

Landlord and Tenant.

(a)           Tenant’s Plans and all design and

construction of the Work shall comply with all applicable statutes, ordinances,

regulations, laws, codes and industry standards, including, but not limited to,

requirements of Landlord’s fire insurance underwriters.

(b)           Tenant shall, at its own cost and

expense, obtain all required building permits and occupancy permits.  Other than in connection with the acts of

Landlord or as otherwise expressly set forth herein, Tenant’s failure to obtain

such permits shall not cause a delay in the commencement of the Term or the

Rent and other obligations set forth in the Lease.

(c)           Tenant’s Contractors shall be

licensed contractors, possessing good labor relations, capable of performing

quality workmanship and working in harmony with Landlord’s contractors and

subcontractors and with other contractors and subcontractors in the

Building.  All work shall be coordinated

with any other construction or other work in the Building in order not to

adversely affect construction work being performed by or for Landlord or its

tenants.

(d)           Tenant shall use only good quality

materials in the Work, except where explicitly shown in the Plans approved by

Landlord and Tenant.

(e)           Tenant and Tenant’s Contractors shall

make all efforts and take all steps so as not to interfere with other tenants and

occupants of the Building, and shall, in any event, comply with all reasonable

rules and regulations existing from time to time at the Building.  Tenant and Tenant’s Contractors shall take

all precautionary steps to minimize dust, noise and construction traffic, and

to protect their facilities and the facilities of others affected by the Work

and to properly police same. Construction equipment and materials are to be

kept within the Premises and delivery and loading of equipment and materials

shall be done at such locations and at such time as Landlord shall direct so as

not to burden the operation of the Building.

(f)            Landlord shall have the right to

order Tenant or any of Tenant’s Contractors who violate the requirements

imposed on Tenant or Tenant’s Contractors in performing work to cease work and

remove its equipment and

 

4

 

employees from the

Building.  No such action by Landlord

shall delay the commencement of the Lease or the Rent and other obligations

therein set forth.

(g)           Utility costs or charges for any

service (including HVAC, hoisting or the like) to the Premises shall be the

responsibility of Tenant from the date Tenant is obligated to commence or

commences the Work and shall be paid for by Tenant at rates set by the utility

company.  Tenant shall apply and pay for

all utility meters required.  Tenant

shall arrange and pay for removal of construction debris and shall not place

debris in the Building’s waste containers.

(h)           Tenant shall permit access to the

Premises, and the Work shall be subject to inspection, by Landlord and

Landlord’s architects, engineers, contractors and other representatives, at all

reasonable times during the period in which the Work is being constructed and

installed and following completion of the Work.

(i)            Tenant shall proceed with its work

expeditiously, continuously and efficiently. 

Tenant shall notify Landlord upon completion of the Work and shall

furnish Landlord and Landlord’s title insurance company with such further

documentation as may be necessary under Paragraphs 8 and 9 below.

(j)            Tenant shall have no authority to

materially deviate from the Plans in performance of the Work, except as

authorized by Landlord and its designated 

representative in writing. 

Tenant shall furnish to Landlord “as-built” drawings of the Work within

ten (10) days after completion of the Work.

(k)           Landlord shall have the right to run

utility lines, pipes, conduits, duct work and component parts of all mechanical

and electrical systems where necessary or desirable through the Premises, to

repair, alter, replace or remove the same, and to require Tenant to install and

maintain proper access panels thereto.

(l)            Tenant shall impose on and enforce

all applicable terms of this Workletter against Tenant’s architect and Tenant’s

Contractors.

7.             INSURANCE AND INDEMNIFICATION.

(a)           In addition to any insurance which

may be required under the Lease, Tenant shall secure, pay for and maintain or

cause Tenant’s Contractors to secure, pay for and maintain during the

continuance of construction and fixturing work within the Building or Premises,

insurance in the following minimum coverages and limits of liability:

(i)            Worker’s Compensation and Employer’s

Liability Insurance with limits of not less than $500,000.00, or such higher

amounts as may be required from time to time by any Employee Benefit Acts or

other statutes applicable where the work is to be performed, and in any event

sufficient to protect Tenant’s Contractors from liability under the aforementioned

acts.

(ii)           Comprehensive General Liability

Insurance (including Contractors’ Protective Liability) in an amount not less

than $1,000,000.00 per occurrence, whether involving bodily injury liability

(or death resulting therefrom) or property damage liability or a combination

thereof with a minimum aggregate limit of $1,000,000.00,

 

5

 

and with umbrella

coverage with limits not less than $5,000,000.00.  Such insurance shall provide for explosion and collapse,

completed operations coverage and broad form blanket contractual liability

coverage and shall insure Tenant’s Contractors against any and all claims for

bodily injury, including death resulting therefrom, and damage to the property

of others and arising from its operations under the contracts whether such

operations are performed by Tenant’s Contractors or by anyone directly or

indirectly employed by any of them.

(iii)          Comprehensive Automobile Liability

Insurance, including the ownership, maintenance and operation of any automotive

equipment, owned, hired, or non-owned in an amount not less than $500,000.00

for each person in one accident, and $1,000,000.00 for injuries sustained by

two or more persons in any one accident and property damage liability in an

amount not less than $1,000,000.00 for each accident.  Such insurance shall insure Tenant’s Contractors against any and

all claims for bodily injury, including death resulting therefrom, and damage

to the property of others arising from its operations under the contracts,

whether such operations are performed by Tenant’s Contractors, or by anyone

directly or indirectly employed by any of them.

(iv)          “All-risk” builder’s risk insurance

upon the entire Work to the full insurable value thereof.  This insurance shall include the interests

of Landlord and Tenant (and their respective contractors and subcontractors of

any tier to the extent of any insurable interest therein) in the Work and shall

insure against the perils  of fire and

extended coverage and shall include “all-risk” builder’s risk insurance for

physical loss or damage including, without duplication of coverage, theft,

vandalism and malicious mischief.  If

portions of the Work are stored off the site of the Building or in transit to

said site are not covered under said “all-risk” builder’s risk insurance, then

Tenant shall effect and maintain similar property insurance on such portions of

the Work.

All policies

(except the worker’s compensation policy) shall be endorsed to include as

additional insured parties, Landlord, and its partners, directors, officers,

employees and agents.  The waiver of

subrogation provisions contained in the Lease shall apply to all insurance

policies (except the workmen’s compensation policy) to be obtained by Tenant

pursuant to this paragraph.  The

insurance policy endorsements shall also provide that all additional insured

parties shall be given thirty (30) days’ prior written notice of any reduction,

cancellation or non-renewal of coverage (except that ten (10) days’ notice

shall be sufficient in the case of cancellation for non-payment of premium) and

shall provide that the insurance coverage afforded to the additional insured

parties thereunder shall be primary to any insurance carried independently by

said additional insured parties. 

Additionally, where applicable, each policy shall contain a

cross-liability and severability of interest clause.

 

6

 

(b)           Without limitation of the

indemnification provisions contained in the Lease, to the fullest extent

permitted by law Tenant agrees to indemnify, protect, defend and hold harmless

Landlord, and its partners, directors, officers, employees and agents, from and

against all claims, liabilities, losses, damages and expenses of whatever

nature arising out of or in connection with the Work or the entry of Tenant or

Tenant’s Contractors into the Building and the Premises, including, without

limitation, mechanic’s liens, the cost of any repairs to the Premises or

Building necessitated by activities of Tenant or Tenant’s Contractors, bodily

injury to persons or damage to the property of Tenant, its employees, agents,

invitees, licensees or others.  It is

understood and agreed that the foregoing indemnity shall be in addition to the

insurance requirements set forth above and shall not be in discharge of or in

substitution for same or any other indemnity or insurance provision of the

Lease.

8.             WAIVERS OF LIEN.  Upon completion of the Work, Tenant shall

furnish Landlord with final waivers of liens and contractors’ affidavits, in

such form as may be required by Landlord, from all parties performing labor or

supplying materials or services in connection with the Work showing that all of

said parties have been compensated in full and waiving all liens in connection

with the Premises and Building.  Tenant

shall submit to Landlord a detailed breakdown of Tenant’s total construction

costs, together with such evidence of payment as is reasonably satisfactory to

Landlord.

9.             ALLOWANCE; CONSTRUCTION ESCROW TIMING.

(a)           Landlord shall pay up to a maximum of

forty-five dollars ($45.00) per square foot of rentable area of the Premises

towards the cost of the Work (“Landlord’s Contribution”); provided, however, in

addition to the foregoing, Landlord’s Contribution shall also include an

additional $2,000.00 toward the construction of the electrical panel within the

Premises by Tenant.  Tenant shall be

responsible to pay all costs of the Work in excess of Landlord’s Contribution

(such excess being referred to as “Tenant’s Contribution”).  If the cost of the Work is less than

Landlord’s Contribution, Tenant shall not be entitled to any credit or payment

on account of such difference.  Landlord

shall pay to Tenant the Landlord’s Contribution in two (2) installments, the

first (1st) such installment (the “Initial Draw”) shall be paid when

the progress of Tenant’s Work is at least fifty percent (50%) complete and the

remainder upon completion of the Work, Tenant’s commencement of its business

operations within the Premises and Tenant’s satisfaction of all of the

requirements set forth in this Workletter, including providing all necessary

waivers of lien, certificates of occupancy, insurance certificates and the like

(the “Final Draw”).  Landlord shall pay

to Tenant the Landlord’s Contribution upon fifteen (15) days prior written

notice therefor from Tenant along with such supporting documentation to

evidence the amount of the cost of the Work. 

Prior to Landlord’s paying to Tenant either the Initial Draw or the

Final Draw, Tenant shall provide to Landlord all necessary waivers of lien

(whether partial or final), certificates of occupancy, as applicable, insurance

certificates, affidavits of Tenant’s general contractor and Tenant, sworn 

 

7

 

statements from

Tenant’s general contractor and all subcontractors, as necessary, and such

other information sufficient to provide title clearance from Landlord’s title

insurance company in connection with the Construction Escrow as more

particularly set forth hereinbelow.

(b)           Prior to commencement of any

construction or payment to any of Tenant’s Contractors, Landlord shall, at

Landlord’s option, establish a construction escrow or other payment procedure

acceptable to Landlord and each holder of a mortgage on the Building with a

title company acceptable to Landlord providing for payment to Tenant’s

Contractors and payment of all other costs associated with the Work upon the

title insurance company’s satisfactory review of lien waivers and sworn

statements from Tenant’s Contractors and other applicable parties and upon the

title insurance company’s willingness to issue title insurance over mechanic’s

liens relating to Tenant’s contracts and the Work to the date of each draw.  Landlord shall fund such construction escrow

from time to time with sufficient amount of the Landlord’s Contribution so as

to fund each draw provided for herein. Tenant shall pay for the cost of the

Work when required under its contracts for the Work and shall not permit the

Premises, the Building or Project to become subject to any lien on account of

labor, material or services furnished to Tenant.  Tenant shall, from time to time, deposit funds into the

construction escrow in amounts sufficient to pay the costs of the Tenant’s

Contribution; provided, however, in the event Tenant provides a written

acknowledgment and agreement to the title company and Landlord’s lender to

confirm that Tenant shall be responsible for any such Tenant’s Contribution so

as to keep Landlord’s loan from which Landlord is drawing the Landlord’s

Contribution “in balance”, then Tenant shall not be required to deposit any

such Tenant’s Contribution into said construction escrow. Tenant may not

withdraw funds except to pay Tenant’s Contractors unless Landlord has consented

to such withdrawal.  The construction

escrow agreement shall contain the foregoing restriction on withdrawal of funds

by Tenant and shall also provide that if Tenant fails to pay for the Work when

due or if any mechanic’s lien is filed in connection with the Work, Landlord

may use and withdraw the funds in  the

escrow to pay for the Work or remove the lien without Tenant’s consent.  Tenant shall provide such contractor’s

affidavits, tenant (owner) statements, partial and final waivers of lien,

architect’s certificates and any additional documentation (including, without

limitation, Tenant or contractor personal undertakings) which may be requested

by Landlord, such title insurance company or any holder of a mortgage on the

Building in connection with said escrow or consistent with any other title

insurance requirements concerning the Work.

10.           MISCELLANEOUS.

(a)           If the Plans for the Work require the

construction and installation of fire hose cabinets or telephone/electrical

closets, Tenant agrees to pay all costs and expenses arising from the

construction and 

installation of

such additional fire hose cabinets or telephone/electrical closets.

 

8

 

(b)           Time is of the essence under this Workletter.

(c)           Any person signing this Workletter on

behalf of Landlord or Tenant warrants and represents he has authority to do so.

(d)           If Tenant fails to make any payment

relating to the Work as required hereunder, Landlord, at its option and after

written notice to Tenant, may complete the Work pursuant to the approved Plans

and continue to hold Tenant liable for the costs thereof and all other costs

due to Landlord.  Tenant’s failure to

pay any amounts owed by Tenant hereunder when due or Tenant’s failure to

perform its obligations hereunder shall also constitute a default under the

Lease and Landlord shall have all the rights and remedies granted to Landlord

under the Lease for nonpayment of any amounts owed thereunder or failure by

Tenant to perform its obligations thereunder.

(e)           Notices under this Workletter shall

be given in the same manner as under the Lease.

(f)            The liability of Landlord hereunder

or under any amendment hereto or any instrument or document executed in

connection herewith (including, without limitation, the Lease) shall be limited

to and enforceable solely against Landlord’s interest in the Project.

(g)           The headings set forth herein are for

convenience only.

(h)           This Workletter sets forth the entire

agreement of Tenant and Landlord regarding the Work.  This Workletter may only be amended if in writing, duly executed

by both Landlord and Tenant.

(i)            In the event Landlord fails to pay

either the Initial Draw or the Final Draw as and when due pursuant to the terms

and conditions of this Workletter, and such failure continues for a period in

excess of thirty (30) days following Tenant’s written notice to Landlord of

same, then Tenant shall thereafter be entitled to offset against the Base Rent

due and owing under the Lease such unpaid amounts of the Landlord’s

Contribution until fully applied.

11.           EXCULPATORY PROVISIONS.  The provisions of Article 39 of the Lease

are hereby incorporated herein as if fully set forth herein.

 

9

 

IN WITNESS WHEREOF,

this Workletter is executed as of this

          day of

                            ,

2002.

 

	

   

  	

  LANDLORD:

  
	

   

  	

   

  
	

   

  	

  ECD-LINCOLNSHIRE

  OFFICE, L.L.C.

  
	

   

  	

  By: ECD-Lincolnshire Manager II, L.L.C., its Manager

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

  Scott Greenberg

  
	

   

  	

  Managing Member

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  TENANT:

  
	

   

  	

   

  
	

   

  	

  SAUER-DANFOSS INC., a Delaware

  corporation

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Its:

  	

   

  	

   

  
						

 

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[PURCHASER’S NAME]

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EXHIBIT F

 

FLOOR PLAN FOR OFFER SPACE

 

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[PURCHASER’S NAME]

[MORTGAGEE’S NAME] [LANDLORD’S NAME]

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EXHIBIT G

 

JANITORIAL SPECIFICATIONS

 

1

 

[PURCHASER’S NAME]

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Page 2.

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2

 

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EXHIBIT H

 

RIGHT OF FIRST REFUSAL

 

In accordance with

the terms and provisions of Section 37 of the Lease, Landlord  hereby grants  Tenant the  option  to lease, upon the terms and  conditions

hereinafter set forth, the Offer Space (as defined in the Lease).

 

(a)            During that period of time prior to

Landlord entering into a first lease for the Offer Space (the “Refusal Period”)

if Landlord reaches substantial agreement on the basic business terms of a

lease with a prospective tenant (the “Prospective Tenant”) to lease all of the

Offer Space for a term (including any extension or renewal) which would expire

after the end of the fourth (4th) Lease Year of the Term of the

Lease, then Landlord shall notify Tenant in writing (a “Landlord’s Notice”)

setting forth (i) the availability date (an “Offer Space Refusal Commencement

Date”), (ii) the rental rate and (iii) all other economic terms upon which

Landlord is prepared to lease such portion of the Offer Space to the

Prospective Tenant.

 

(b)           Tenant’s right to lease the portion

of the Offer Space described in a Landlord’s Notice upon the terms and

conditions set forth therein shall be exercisable by written notice from Tenant

to Landlord given not less than ten (10) days after the giving of Landlord’s

Notice, time being of the essence.  If

Tenant exercises its option with respect to such portion of the Offer Space,

such space shall be rented in the condition contemplated by the applicable

Landlord’s Notice.  If Tenant fails to

notify Landlord in writing that it will lease the Offer Space within the

prescribed ten (10) day period, Tenant’s right hereunder as to such Offer Space

shall terminate, and Landlord shall have no further obligation hereunder with

respect to such Offer Space; except that if Landlord, within six (6) months

after the date of Landlord’s Notice, does not enter into a lease of such Offer

Space under terms and at a rental which are materially the same as those set

forth in the applicable Landlord’s Notice, then Tenant’s rights hereunder to

lease such Offer Space shall not terminate but shall continue in full force and

effect; provided, however, said six (6) month period shall be extended for as

long as Landlord is pursuing negotiations diligently with said Prospective

Tenant.  Tenant may not elect to lease less

than the entire area of the Offer Space.

 

(c)            Tenant may exercise its option to

lease a portion of the Offer Space, and an exercise thereof shall be only

effective, if at the time of Tenant’s exercise of the option and on the

applicable Offer Space Refusal Commencement Date, the Lease is in full 

 

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force and effect

and there are not events or circumstances which, with the giving of notice or

the passage of time, or both, could constitute a default by Tenant under the

Lease, and inasmuch as this option is intended only for the benefit of the

original Tenant named in this Lease, the entire Premises are occupied  by the original Tenant named herein

(including a Related Party Permitted Transferee) and the Tenant has neither

assigned this Lease nor sublet any portion of the Premises; provided, however,

in no event shall the foregoing limit or restrict Tenant’s right to exercise

its option to lease the Offer Space pursuant to the terms and provisions of

this Exhibit “H” in the event of an assignment of the Lease or sublet of

all or any portion of the Premises to a Related Party Permitted

Transferee.  Without limitation of the

foregoing, no sublessee or assignee shall be entitled to exercise any right or

option hereunder, and no exercise 

of  any  right  or option hereunder

by the original Tenant names herein shall be effective in the event said Tenant

assigns the Lease or sublease all or part of the Premises prior to the

applicable Offer Space Refusal Commencement Date other than in connection with

a Related Party Permitted Transfer.

 

(d)           In the event Landlord is unable to

deliver to Tenant possession of any portion of the Offer Space on or before the

applicable Offer Space Refusal Commencement Date for any reason whatsoever,

Landlord shall not be subject to any liability for such failure to deliver

possession.  Such failure to deliver

possession shall not affect either the validity of the Lease or the obligations

of either Landlord or Tenant hereunder or be construed to extend the expiration

of the Term of the Lease either as to such portion of the Offer Space or the

balance of the Premises; provided, however, that under such circumstances, rent

shall not commence as to such portion of the Offer Space until Landlord does so

deliver possession to Tenant.

 

(e)            If Tenant has validly exercised its

right to lease such Offer Space, then, within fifteen (15) business days after

the request by either party, Landlord and Tenant shall enter into a written

amendment of this Lease confirming the terms, conditions and provisions

applicable to such Offer Space as determined in accordance herewith.  In addition to such other terms and

conditions as set forth in such amendment, Landlord and Tenant acknowledge and

agree that effective as of the Offer Space Refusal Commencement Date, the Offer

Space shall be included in the Premises subject to all of the terms, conditions

and provisions of the Lease except that (i) rent per square foot of net

rentable area of the Offer Space shall be equal to the rental rate quoted by

Landlord to Tenant in Landlord’s Notice; (ii) the net rentable area of the

Premises shall be increased by the net rentable area of such Offer Space and

such rentable area of the Premises as so increased shall be utilized in

calculating the increases in Tenant’s proportionate share for purposes of

Additional Rent due under the Lease; (iii) the term of the demise covering such

Offer Space shall commence on the Offer Space Refusal Commencement Date and 

 

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shall expire upon

the expiration of the Term of the Lease so as to be coterminous therewith; (iv)

the Offer Space shall be leased in its “as-is” condition as the Offer Space

Refusal Commencement Date subject to any exceptions thereto or any other market

build-out allowance quoted by Landlord in the Landlord’s Notice (which work

shall in any event be performed on substantially the same terms as the

Workletter Agreement attached to the Lease as Exhibit “E”); (v)

effective upon the Offer Space Refusal Commencement Date Tenant shall increase

the security deposit then held by Landlord to equal one (1) month’s gross rent

due under the Lease for the full premises then being demised hereunder; and

(vi) Tenant shall be entitled to six (6) additional parking spaces and

additional access cards for the Garage and six (6) additional Entry Cards.  In addition to the foregoing, Landlord and

Tenant acknowledge and agree that following Tenant’s delivery to Landlord of a

notice to terminate the Lease pursuant to the terms and provisions of Section

36 of the Lease, then Tenant shall no longer be permitted to exercise its

option to lease the Offer Space pursuant to the terms and conditions of this

Paragraph (e); provided, however, in no event shall the foregoing limit or

restrict Tenant’s liability for rent and other obligations in the event Tenant

has exercised its option to lease the Offer Space prior to the delivery of such

a termination notice as set forth in Section 36 of the Lease.

 

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EXHIBIT I

 

MARKET RENT DETERMINATION

 

The Base Rent

during the second Extended Term shall be the “Market Rent,” as herein defined.

 

(a)           The term “Market Rent” shall mean the

Base Rent for the Premises at the time in question which Landlord sets forth in

a notice (hereinafter referred to as the “Market Rent Notice”) to Tenant.  No later than thirty (30) days after Tenant

may exercise Tenant’s option to extend the Lease for the second Extended Term,

Landlord shall send the Market Rent Notice to Tenant for said second Extended

Term and shall specify in the Market Rent Notice for each of the five (5) years

contained in the Second Extended Term. 

In the event that Tenant shall, in good faith, disagree with the Market

Rent set forth in the Market Rent Notice established by Landlord for the

Premises, Tenant shall, within ten (10) days after receipt of the Market Rent

Notice, furnish Landlord with a written explanation in reasonable detail of the

basis for Tenant’s good faith disagreement, the amount which, in Tenant’s good

faith opinion, is the Market Rent for each of the five (5) years contained in

the second Extended Term (hereinafter referred to as the “Tenant’s Notice”).  If Tenant’s Notice is not received by

Landlord within said ten (10) day period, the Market Rent shall be the Market

Rent set forth in the Market Rent Notice to Tenant.  If Tenant’s notice is received by Landlord within said ten (10)

day period, the Market Rent for the Premises shall be established as follows:

 

(i)            No later than twenty (20) days

following the receipt of the Market Rent Notice from Landlord, Tenant shall

select an individual as an appraiser of its choice and give Landlord written

notice of such appraiser’s name, address and telephone number.

 

(ii)           Within ten (10) days after receipt of

such notice by Landlord, Landlord shall select an appraiser of its choice and

give Tenant written notice of such appraiser’s name, address and telephone

number.

 

(iii)          The two appraisers so selected by

Landlord and Tenant shall then select an individual as a third appraiser within

fifteen (15) days after receipt by Tenant of Landlord’s notification as to its

selection of an appraiser, and furnish Landlord and Tenant written notice of

such appraiser’s name, address and telephone number.

 

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(iv)         All appraisers selected pursuant to this

Exhibit “I” shall be M.A.I. appraisers, unless Landlord and Tenant shall

otherwise agree in writing, each having at least ten (10) years experience with

commercial property in Lake County, Illinois. 

Each of the three (3) selected appraisers shall then determine the fair

rental value of the Premises for each of the five (5) years of the second

Extended Term shall be determined to be the average of the three (3) appraisals

for each such years; provided, in no event shall Market Rent for the first year

of the second Extended Term be deemed to be less than the Base Rent for the

last year of the first Extended Term, and in no event shall the Market Rent for

any successive year of the second Extended Term be less than the Base Rent for

the prior year.

 

(b)          If the procedure set forth in above in

(a)(i) through and including (a)(iv) is implemented, and if for any reason

whatsoever (including, without limitation, the institution of any judicial or

other legal proceedings), the Market Rent for the second Extended Term has not

been finally determined prior to the first day of said second Extended Term,

then the amount of the Market Rent set forth by Landlord in good faith in the

Market Rent Notice shall be the Market Rent for all purposes under the Lease

until such time as the Market Rent is finally determined as set forth above,

and Landlord and Tenant shall, by appropriate payments to the other, correct

any overpayment or underpayment which may have been made prior to such final

determination.

 

(c)           If Landlord fails to select its

appraiser in the manner and within the time specified in (a)(ii) above, then

the Market Rent for the second Extended Term shall be the Market Rent set forth

in Tenant’s Notice.

 

(d)          If Tenant fails to select its

appraiser in the manner and within the time specified in (a)(i) above, then the

Market Rent for the second Extended Term shall be the Market Rent set forth in

the Market Rent Notice.

 

(e)           If the appraisers selected by

Landlord and Tenant fail to appoint the third appraiser within the time and in

the manner prescribed in (a)(iii) above, then Landlord and/or Tenant shall

promptly apply to the local office of the American Arbitration Association for

the appointment of the third appraiser.

 

(f)           All fees, costs and expenses incurred

in connection with obtaining the appraisals and the arbitration procedure set

forth in this section shall be shared equally by Landlord and Tenant; however,

Landlord and Tenant shall each bear their own attorneys’ fees incurred with

respect to this procedure.

 

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EXHIBIT J

 

TRUNK LINE DUCTWORK

 

11990

Exhibit

10.1(ao)

 

 

 

 

 

SAUER-DANFOSS INC.

 

ANNUAL MANAGEMENT PERFORMANCE INCENTIVE PLAN

 

January 1, 2002

Restatement

 

 

 

 

 

SAUER-DANFOSS INC.

ANNUAL MANAGEMENT PERFORMANCE INCENTIVE PLAN

January 1, 2002 Restatement

 

 

The Sauer-Danfoss Inc. Annual Management Performance Incentive Plan is

designed to achieve the following objectives:

 

a)              Link variable pay to strategic business objectives;

b)             Create a more balanced focus on profitability and

growth;

c)              Create a better line-of-sight on the measures of

performance and, therefore, improve the motivational qualities of the Plan;

d)             Reward the on-going demonstration of alignment with

the Company culture;

e)              Facilitate the attraction and retention of talent; and

f)                Provide a competitive compensation opportunity.

 

 

ARTICLE I

DEFINITIONS

 

For the purposes of this Plan, the following words and phrases shall

have the meaning indicated, unless a different meaning is clearly required by

the context:

 

1.                    The “Plan” means this Sauer-Danfoss Inc. Annual

Management Performance Incentive Plan with all amendments and supplements

hereafter made.

 

2.                    The “Company” means Sauer-Danfoss Inc., a Delaware

corporation, its successors, and the surviving companies or corporations

resulting from any merger or consolidation of Sauer-Danfoss Inc. with any other

corporation or partnership.

 

3.                    A “Subsidiary” means any corporation or partnership,

the equity of which is directly or indirectly majority owned by the Company.

 

4.                    The “Executive Office” means the Executive Office of

Sauer-Danfoss Inc., as the same shall from time to time exist.

 

5.                    An “Employee” shall mean any person employed by the

Company or a Subsidiary in a non-officer, high executive or management

position.

 

6.                    A “Participant” shall mean any Employee who is

eligible to participate in the Plan as provided in Article II.

 

7.                    The “Plan Year” means the fiscal year of the Company,

which as of January 1, 2002 coincides with the calendar year.

 

2

 

8.                    An “Incentive Compensation Award” shall mean the cash

payment that may be awarded to a Participant pursuant to the Plan with respect

to any Plan Year.

 

9.                    A “Beneficiary” shall mean the person or persons

designated by a Participant in accordance with the Plan to receive payment of

the Participant’s Incentive Compensation Award in the event of the death of the

Participant prior to payment of the Participant’s Incentive Compensation Award.

 

10.              The “Target Incentive Opportunity” means the

percentage of the Participant’s base salary paid from the Participant’s

effective date of participation through the end of the Plan Year, which will be

paid if the target Performance Measures are achieved.  Should a Participant have periods of illness or injury during the

Plan Year, payments such as sick leave or disability pay, which are paid to the

Participant in lieu of base salary during those periods, will be considered as

base salary for the purpose of computing Incentive Compensation Awards.

 

11.              “Performance Measures” shall mean the measurements of

Profitability (Return on Net Assets pre-tax/pre-interest) and Revenue Growth

upon which a Participant’s Incentive Compensation Award will be based.  These measures will be part of a performance

matrix that will be communicated to Plan Participants on an annual basis.

 

12.              “GBU RoNA (Global Business Unit Return on Net Assets)

for any Global Business Unit is defined as GBU EBIT for the fiscal year of the

Global Business Unit, divided by the Average Net Assets of the Global Business

Unit.  GBU EBIT and Average Net Asset

amounts of the Global Business Unit are determined from internal, consolidated

financial statements, which support the quarter-end and year-end audited

financial statements for Sauer-Danfoss Inc.

 

13.              “Company RoNA” (Company Return on Net Assets) is defined

as EBIT for Sauer-Danfoss Inc., divided by the Average Net Assets of

Sauer-Danfoss Inc.  Sauer-Danfoss Inc.

EBIT and Average Net Asset amounts are determined from the year-end, audited

consolidated financial statements or from the quarter-end unaudited,

consolidated financial statements as appropriate.

 

14.              “EBIT” (Earnings Before Interest and Taxes) for

Sauer-Danfoss Inc. or for any Global Business Unit shall be defined as net

income adjusted to remove any income tax expense or benefit and to remove any

Net Interest Expense.

 

15.              “Net Interest Expense” for Sauer-Danfoss Inc. or for

any Global Business Unit shall be defined as interest expense, net of interest

income, on interest bearing indebtedness plus minority interest expense, net of

minority interest income.

 

16.              “Average Net Assets” for Sauer-Danfoss Inc. or for any

Global Business Unit shall be defined as the average of the Net Assets for the

four quarters in the fiscal year (i.e. Net Assets at the beginning of the year

and at the end of the next four quarters 

 

 

3

 

divided by five). 

For purposes of this computation, “Net Assets” is defined as total

equity, including minority interests in equity, plus total interest bearing

indebtedness

 

17.              “Participant’s Company Factor” shall mean a total

company-weighting factor, from 0% to 100%, assigned by the Executive Office to

the Participant for the Plan Year.  The

sum of the Participant’s Company Factor plus the Participant’s GBU factor shall

equal 100%.

 

18.              “Participant’s GBU Factor” shall mean a GBU weighting

factor, from 0% to 100% assigned by the Executive Office to the Participant for

the Plan Year.  The sum of the

Participant’s Company Factor plus the Participant’s GBU Factor shall equal

100%.

 

 

ARTICLE II

ELIGIBILITY AND MEASUREMENT BASIS

 

The Executive Office shall, in its discretion select the Employees who

are to participate in the Plan and the Chief Executive Officer shall notify

such selected Employees of their selection in writing.  Participation for each Employee shall be

determined on an annual basis.

 

The Executive Office shall also select the Global Business Unit, if

any, that will be used to determine each Participant’s Incentive Compensation

Award.  The Executive Office will also

select the Participant’s Company Factor and the Participant’s GBU Factor, as

defined above.  Once determined by the

Executive Office, in its discretion, the applicable Global Business Unit, the

Participant’s Company Factor and the Participant’s GBU Factor will be

communicated to each Participant at the same time as the selection

notification.

 

In certain instances, Participants may transfer between Global Business

Units during the course of a Plan Year. 

The Executive Office will handle Participants in this situation on a

case-by-case basis.

 

 

ARTICLE III

INCENTIVE COMPENSATION AWARDS

 

A substantial portion of any annual Incentive Compensation Award will

be determined by Profitability and Revenue Growth measures.

 

1.               Profitability will be measured in relation to the

Return on Net Assets (RoNA) for the twelve-month period with respect to which

the Award relates.

 

 

4

 

2.               Revenue growth will be measured as sales growth on a

comparable basis, for the Plan Year, as compared to the previous Plan

Year.  Sales means total third party

trade sales, less effects of any acquisitions.

 

Revenue growth performance targets are established at

the beginning of the Plan Year based on an “assumed composite market growth”

for the segments Sauer-Danfoss serves. 

The assumed growth is used for both the Company and GBU revenue growth

performance targets.  At the end of the

Plan Year, “actual composite market growth” will be determined, and performance

targets adjusted.  For example, if the

Company revenue growth performance target set at the beginning of the year was

10% (assuming a composite market growth of 5%) and the actual composite market

growth for the year, as determined following the end of the Plan Year, was only

1%, then the Company revenue growth performance target for the Plan Year in

question shall be reduced to 6%.

 

The purpose of the year-end adjustment feature is to

take into consideration the external market factors that may influence revenue

growth performance for the Plan Year. 

It is the Company’s belief that Plan Participants should not be

penalized as a result of unforeseen negative conditions in the marketplace, nor

should Participants receive a windfall when an unforeseen upturn in the market

occurs during the Plan Year.

 

3.               Achievement of target Performance Measures will result

in an Incentive Compensation Award for the twelve-month period to which it

relates equal to the Target Incentive Opportunity.

 

Achievement of

Performance Measures exceeding target will result in an Incentive Compensation

Award for the twelve-month period to which it relates up to 200% of the Target

Incentive Opportunity.

 

4.               The Incentive Compensation Target Award may be

increased or decreased by as much as 20% on a discretionary basis.  The degree to which the incentive awards

will be adjusted, if at all, shall be determined by the Executive Office, in

its discretion.

 

5.               The total Incentive Compensation Award granted to a

Participant shall be paid in cash to the Participant on or before May 1 of the

year following the Plan Year with respect to which such total Incentive

Compensation Award is granted.

 

6.               Forfeiture. 

Notwithstanding anything to the contrary contained in the Plan, subject

to the approval of the Executive Office, the right of a Participant to receive

an Incentive Compensation Award which has been granted but which has not been

paid will be forfeited in the event the Participant’s employment with the

Company or any Subsidiary is terminated under circumstances other than death,

permanent and total disability, normal retirement or other retirement under

conditions of eligibility for a retirement benefit.  Furthermore, if the Executive Office, in its sole discretion, 

 

 

5

 

 

determines that a Participant has engaged in

activities constituting gross misconduct, the right of such Participant to be

granted an Incentive Compensation Award will be forfeited.

 

 

ARTICLE IV

ADMINISTRATION

 

The Executive Office shall be responsible for the general administration

of the Plan and for carrying out the provisions hereof and shall have all such

powers, authorities and responsibilities expressly retained by it herein and as

may be necessary to carry out the provisions of the Plan, including the power

to determine all questions relating to eligibility for and the amount of an

Incentive Compensation Award, all questions pertaining to claims for benefits

and procedures for claim review, and the power to resolve any and all other

questions arising under the Plan, including any questions of construction.  The Executive Office may designate such

person or persons as it shall determine to carry out any such powers,

authorities or responsibilities.

 

The actions taken and the decisions made by the Executive Office hereunder

shall be final and binding upon all interested parties.  The Executive Office may, as to all

questions of accounting, rely conclusively upon any determination made by the

independent public accountants for the Company.

 

 

ARTICLE V

AMENDMENT AND TERMINATION

 

The Executive Office reserves the right to amend or terminate the Plan

at any time by written action of the Executive Office; provided, however, that

no such action shall adversely affect any Participant or Beneficiary with

respect to the amount of an Incentive Compensation Award theretofore granted.

 

 

6

 

 

ARTICLE VI

MISCELLANEOUS

 

1.                    Nonalienation. 

No Participant or Beneficiary shall in any manner encumber or dispose of

the right to receive any payment of an Incentive Compensation Award

hereunder.  If a Participant or

Beneficiary attempts to assign, transfer, alienate or encumber the right to

receive the amount of an Incentive Compensation Award hereunder or permits the

same to be subject to alienation, garnishment, attachment, execution or levy of

any kind, then the Executive Office in its sole discretion may hold or apply

such amount or any part thereof to or for the benefit of such Participant or

Beneficiary, the Participant’s or Beneficiary’s spouse, children, blood

relatives or other dependents, or any of them in such manner and in such

proportions as the Executive Office may consider proper.  Any such application of the amount of an

Incentive Compensation Award may be made without the intervention of a

guardian.  The receipt by the payee

shall constitute a complete acquittance to the Company with respect thereto and

neither the Company nor any Subsidiary nor the Executive Office shall have any

responsibility for the proper application thereof.

 

2.                    Plan Noncontractual. 

Nothing herein contained shall be construed as a commitment or agreement

on the part of any person employed by the Company or a Subsidiary to continue

such person’s employment with the Company or Subsidiary, and nothing herein

contained shall be construed as a commitment or agreement on the part of the

Company or any Subsidiary to continue the employment or the annual rate of

compensation of any such person for any period, and all Participants shall

remain subject to discharge to the same extent as if the Plan had never been

put into effect.

 

3.                    Interest of Participant and Beneficiary.  The obligation of the Company under the Plan

to make payments of an Incentive Compensation Award merely constitutes the

unsecured promise of the Company to make payments from its general assets as

provided therein, and no Participant or Beneficiary shall have any interest, or

a lien or prior claim upon any property of the Company or any Subsidiary.

 

4.                    Claims of other Persons.  The provisions of the Plan shall in no event be construed as

giving any person, firm or corporation any legal or equitable right as against

the Company or any Subsidiary, their officers, employees, or directors, except

any such rights as are especially provided for in the Plan or are hereafter

created in accordance with the terms and provisions of the Plan.

 

5.                    Facility of Payment. 

If any person to whom an Incentive Compensation Award is payable is

unable to care for his affairs because of illness or accident, any payment due

(unless prior claim therefore shall have been made by a duly qualified guardian

or other legal representative) may be paid to the spouse, parent, child,

brother or sister, or any other individual deemed by the Executive Office to be

maintaining or 

 

 

7

 

responsible for the maintenance of such person.  Any payment made in accordance with the

provisions of this Section 5 shall be a complete discharge of any liability of

the Plan with respect to such payment.

 

6.                    Absence of Liability. 

No member of the Board of Directors of the Company or of a Subsidiary,

or the Chairman and Chief Executive Officer, or any officers of the Company or

a Subsidiary shall be liable for any act or action hereunder, whether of

commission or omission, taken by any other member, or by any officer, agent, or

employee, or except in circumstances involving his bad faith, for anything done

or omitted to be done by him.

 

7.                    Severability. 

The invalidity or unenforceability of any particular provision of the

Plan shall not affect any other provision hereof, and the Plan shall be

construed in all respects as if such invalid or unenforceable provision were

omitted herefrom.

 

8.                    Governing Law. 

The provisions of the Plan shall be governed and construed in accordance

with the laws of the State of Iowa, U.S.A.

 

 

8

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