Document/Exhibit Description Pages Size
1: 10-K Form 10-K for Fiscal Year Ended December 31, 1993 32 131K
2: EX-4.16B EX-4.16B Amendment Dated as of September 10, 1993 14 44K
3: EX-4.16C EX-4.16C Master Assignment & Acceptance Agreement 15 41K
4: EX-10.33A EX-10.33A Termination Agreements 6 14K
5: EX-10.53B EX-10.53B Amendment to 1992 Equity Incentive Plan 1 7K
6: EX-10.55 EX-10.55 AT&T Corporate Center Office Sublease 222 670K
7: EX-10.56 Material Contract 4 16K
8: EX-10.57 Material Contract 4 16K
9: EX-10.58 Material Contract 17 50K
10: EX-10.59 Material Contract 12 42K
11: EX-13 EX-13 1993 Annual Report - Portions Deemed Filed 32 118K
12: EX-21 EX-21 Subsidiaries 1 5K
EX-10.55 — EX-10.55 AT&T Corporate Center Office Sublease
Exhibit Table of Contents
AT&T CORPORATE CENTER
OFFICE SUBLEASE
BETWEEN
AT&T COMMUNICATIONS, INC.,
a Delaware corporation
(as Landlord)
and
CHICAGO AND NORTH WESTERN TRANSPORTATION COMPANY,
a Delaware corporation
(as Tenant)
Dated: As of October 25, 1993
TABLE OF CONTENTS
Page
1. Base Rent . . . . . . . . . . . . . . . . . . . . . . . . 2
2. Additional Rent . . . . . . . . . . . . . . . . . . . . . 2
3. Early Occupancy . . . . . . . . . . . . . . . . . . . . . 14
4. Use of Premises . . . . . . . . . . . . . . . . . . . . . 15
5. Services . . . . . . . . . . . . . . . . . . . . . . . . 15
6. Condition and Care of Premises . . . . . . . . . . . . . 22
7. Return of Premises . . . . . . . . . . . . . . . . . . . 23
8. Holding Over . . . . . . . . . . . . . . . . . . . . . . 25
9. Rules and Regulations . . . . . . . . . . . . . . . . . . 25
10. Rights Reserved to Landlord . . . . . . . . . . . . . . 26
11. Alterations . . . . . . . . . . . . . . . . . . . . . . 28
12. Assignment and Subletting . . . . . . . . . . . . . . . 30
13. Damage or Destruction by Casualty . . . . . . . . . . . 33
14. Eminent Domain . . . . . . . . . . . . . . . . . . . . . 39
15. Default: Landlord's Rights and Remedies . . . . . . . . 41
16. Mortgagee Protection . . . . . . . . . . . . . . . . . . 45
17. Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . 46
18. Subrogation and Insurance . . . . . . . . . . . . . . . 46
19. Nonwaiver . . . . . . . . . . . . . . . . . . . . . . . 48
20. Estoppel Certificate . . . . . . . . . . . . . . . . . . 48
21. Tenant Authorization . . . . . . . . . . . . . . . . . . 49
22. Landlord Authorization . . . . . . . . . . . . . . . . . 49
23. Real Estate Brokers . . . . . . . . . . . . . . . . . . 49
24. Notices . . . . . . . . . . . . . . . . . . . . . . . . 49
25. Delivery of Possession . . . . . . . . . . . . . . . . . 50
26. Miscellaneous . . . . . . . . . . . . . . . . . . . . . 59
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27. Landlord . . . . . . . . . . . . . . . . . . . . . . . . 61
28. Title and Covenant Against Liens . . . . . . . . . . . . 61
29. Bankruptcy or Insolvency . . . . . . . . . . . . . . . . 62
30. Roof Rights . . . . . . . . . . . . . . . . . . . . . . 64
31. Attorneys' Fees . . . . . . . . . . . . . . . . . . . . 65
32. Waiver . . . . . . . . . . . . . . . . . . . . . . . . . 66
33. Mutual Indemnity and Waiver . . . . . . . . . . . . . . 66
34. "Force Majeure" . . . . . . . . . . . . . . . . . . . . 66
35. Arbitration . . . . . . . . . . . . . . . . . . . . . . 67
36. Use of Name . . . . . . . . . . . . . . . . . . . . . . 68
37. Direct Lease Option and Consent Agreement . . . . . . . 68
38. Agreements Regarding Main Lease . . . . . . . . . . . . 68
39. Furniture . . . . . . . . . . . . . . . . . . . . . . . 69
40. Short Form of Lease . . . . . . . . . . . . . . . . . . 70
41. Basement Storage Space . . . . . . . . . . . . . . . . . 70
42. Option to Extend. . . . . . . . . . . . . . . . . . . . 71
43. Fair Market Rent. . . . . . . . . . . . . . . . . . . . 73
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OFFICE SUBLEASE
THIS OFFICE SUBLEASE (herein called the "Lease") is
made as of the 25th day of October, 1993, WITNESSETH AT&T
COMMUNICATIONS, INC., a Delaware corporation (herein called the
"Landlord"), hereby subleases to CHICAGO AND NORTH WESTERN
TRANSPORTATION COMPANY, a Delaware corporation (herein called the
"Tenant"), and Tenant hereby accepts, the premises and the
improvements within the premises, all as outlined on the floor
plan attached hereto as Exhibit A, subject to adjustment as
hereinafter provided (herein called the "Premises") consisting of
a minimum of 206,697 and a maximum of 245,025 rentable square
feet between (and including) floors six (6) through twelve (12)
of the building located at 227 W. Monroe Street, Chicago,
Illinois (herein called the "Building"), for a term (herein
called the "Term") commencing on September 1, 1996 ("Commencement
Date") and ending on March 30, 2009 ("Termination Date"), unless
sooner terminated or extended as provided herein, and subject to
the agreements herein contained, paying as rent therefor the sums
hereinafter provided, without any set-off, abatement, counter-
claim or deduction whatsoever except as expressly herein set
forth.
The parties hereto acknowledge that Landlord has
succeeded to the leasehold interest of AT&T Resource Management
Corporation, a New York corporation ("AT&T-RMC"), by assignment
and is currently the tenant under that certain Office Lease made
as of December 31, 1985, but actually executed on May 16, 1986,
as the same has been, or may be, amended or modified from time to
time (including, without limitation, pursuant to that certain
First Amendment to Office Lease dated July 29, 1988) ("Main
Lease") by and between AT&T-RMC, as tenant, and American National
Bank and Trust Company of Chicago, not personally but solely as
Trustee under Trust Agreement dated April 1, 1985 and known as
Trust No. 64020, as landlord ("Main Landlord"), which Main Lease
covers certain space in the Building ("Main Premises"),
including, without limitation, the Premises. Tenant hereby: (i)
acknowledges that the terms and provisions of this Lease are
subject to the terms and provisions of the Main Lease, and (ii)
covenants and agrees to comply with the terms and provisions of
the Main Lease insofar as they relate to the Premises and the
Tenant other than payment of rentals thereunder.
The parties hereto agree to enter into a written
amendment to this Lease (herein referred to as the "Premises
Amendment") in accordance with, and on the terms and provisions
set forth in, Section 2(a)(xiv)(A) of this Lease.
IN CONSIDERATION THEREOF, THE PARTIES HERETO COVENANT
AND AGREE:
1. Base Rent. Commencing on the Commencement Date,
Tenant shall pay an annual base rent (herein called the "Base
Rent") to Landlord for the Premises at a rate per square foot of
Rentable Area of the Premises determined in accordance with the
Premises Amendment described in Section 2(a)(xiv)(A) hereof and
subject to adjustment as hereinafter provided (including, without
limitation, pursuant to Section 2(i) hereof), payable in equal
monthly installments. Monthly installments of Base Rent are
herein called "Monthly Base Rent" and shall be payable, in
advance on the Commencement Date and on the first day of each
calendar month thereafter of the Term, and at the same 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. Base Rent, Additional Rent (as hereinafter
defined), Adjusted Base Rent (as hereinafter defined), Additional
Rent Progress 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 the office of Landlord, or as
otherwise designated from time to time by written notice from
Landlord to Tenant. The payment of Rent hereunder is independent
of each and every other covenant and agreement contained in this
Lease, except as expressly herein set forth.
2. Additional Rent. In addition to paying the Base
Rent specified in Section 1 hereof, Tenant shall also pay as
additional rent the amounts determined in accordance with this
Section 2 ("Additional Rent"):
(a) Definitions. As used in this Lease,
(i) "Adjustment Date" shall mean the first day of the
Term and each January 1 thereafter falling within the Term.
(ii) "Adjustment Year" shall mean each calendar year
during which an Adjustment Date falls.
(iii) "Commercial Space" shall mean all areas of the
Building devoted to retail tenants, but excluding the lobby
and other common areas of the Building as shown on Exhibit C
to the Main Lease.
(iv) "Expenses" shall mean and include those costs and
expenses paid by the Main Landlord for managing, operating,
maintaining and repairing the Building and the personal
property used in conjunction therewith (said Building and
personalty being herein collectively called the "Project"),
including (without limitation) maintenance of alarm and
security systems, snow and ice and trash removal, cleaning
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and sweeping, planting and replacing decorations, flowers
and landscaping, maintenance and repair of utility systems,
elevators, electricity, steam, water, gas, sewers, fuel,
heating, lighting, air conditioning, window cleaning,
janitorial service, insurance, including, but not limited
to, fire, extended coverage, all risk, liability, workmen's
compensation, elevator, or any other insurance carried by
the Main Landlord and applicable to the Project, to the
extent same is customarily carried by owners of first-class
non-institutional office buildings, painting, uniforms,
management fees not to exceed three percent (3%) of gross
revenues from the Project (including the amount of the rent
abatement pursuant to Section 37 of the Main Lease) (whether
or not the management agent is affiliated with Landlord,
Main Landlord or its beneficial owner), supplies, sundries,
sales or use taxes on supplies or services, cost of wages
and salaries of all persons engaged in the operation,
management, maintenance and repair of the Project, and so-
called fringe benefits, as customarily paid by owners of
first-class office buildings, including 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 or like expenses incurred under the provisions of
any collective bargaining agreement, the charges of any
independent contractor who, under contract with the Main
Landlord or its representatives, does any of the work of
operating, managing, maintaining or repairing of the
Project, legal and accounting expenses, including, but not
to be limited to, such expenses related to seeking or
obtaining reductions or preventing increases in assessed
valuations in connection with real estate taxes or any other
expense or charge, whether or not hereinbefore mentioned,
which, in accordance with generally accepted accounting and
management principles, would be considered as an expense of
managing, operating, maintaining or repairing the Project,
except as hereinafter provided (but in no event will Tenant
be charged twice for the same Expense as a result of the
application of said principles). Expenses shall not include
costs or other items included within the meaning of the term
"Taxes" (as hereinafter defined), costs of alterations of
the premises of tenants of the Building (including the Main
Premises other than with respect to the Premises), expenses
of renovating or otherwise decorating vacant or previously
leased space for tenants (including the Main Premises other
than with respect to the Premises), costs of capital
improvements to the Building (excluding repairs to Building
equipment), depreciation charges, interest and principal
payments on mortgages creating liens on the Project and
interest on other debt instruments of the Main Landlord,
ground rental payments, expenses incurred in leasing or
procuring tenants including, without limitation, advertising
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costs and real estate brokerage and leasing commissions, any
expenditures for services which are provided to one or more
tenants (including those expenditures for services which
relate to the Main Premises except to the extent that Tenant
receives a benefit in connection therewith) and which are
not available generally to all office tenants, any
expenditures for which Main Landlord has been reimbursed
(other than pursuant to additional rent provisions in
leases), except as hereinafter provided; legal costs in
leasing space or incurred in disputes with tenants, except
as set forth in Section 9(b) of the Main Lease; electricity
and other utility services which are directly billed to
tenants (except to the extent such services are provided to
tenants generally and/or Tenant receives a benefit
therefrom); wages, salaries or other compensation paid to
any executive employees above the grade of building manager;
wages, salaries and so-called fringe benefits of clerks or
attendants in concessions or newsstands operated by the Main
Landlord and/or Landlord; the cost of correcting defects
(latent or otherwise) in the construction of the Building or
in the Building equipment; the cost of repair or rebuilding
in the event of fire or other casualty or eminent domain;
the cost of installing, operating and maintaining a
specialty improvement including, without limitation, an
observatory or broadcasting facility, cafeteria or dining
facility, an athletic, luncheon or recreational club, and
any cost or expense paid to a related entity or entity not
dealt with on an "arms-length" basis which is in excess of
the amount which would be paid in the absence of such
relationship. Notwithstanding anything contained herein to
the contrary, Expenses directly applicable to or solely
utilized in connection with the Commercial Space (including,
but not limited to utilities, scavenger services, janitorial
and window washing) shall be paid for directly by tenants of
the Commercial Space or if such direct payment is not
feasible then Main Landlord shall, in accordance with
Section 2(a)(iv) of the Main Lease, require such tenants'
proportionate share of such Expenses to be adjusted to
reflect their increased use of any service over and above
customary office use.
Tenant shall pay all incremental out-of-pocket Expenses
attributable to the operation and maintenance of equipment
installed at Tenant's request for Tenant's exclusive use
(including, without limitation, the Additional HVAC Units
(as hereinafter defined)).
Notwithstanding anything contained herein to the
contrary, Tenant acknowledges that (1) in the event the
Parking Garage (as hereinafter defined) is operated pursuant
to a lease or license agreement under which the lessee or
licensee is obligated to pay Expenses of the Parking Garage,
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from the revenue received by said lessee or licensee (as
opposed to being an Expense of the Building), then expenses
relating to the Parking Garage to the extent required to be
paid by the lessee or licensee shall not be included in
Expenses, and (2) in the event (1) above is not applicable,
in no event shall Tenant be required to pay a percentage of
Parking Garage Expenses greater than the ratio of the
average number of spaces contracted for by Tenant on an
annual basis over the total number of spaces in the Parking
Garage.
Notwithstanding anything contained in this clause (iv)
of Section 2(a) to the contrary,
(A) The cost of any capital improvements to the
Building made after the Commencement Date of this Lease
which (i) reduce Expenses or (ii) which are required under
any governmental laws, regulations, or ordinances which were
not applicable to the Building at the time it was
constructed, amortized on a straight line basis over the
then anticipated useful life of the capital improvement (as
determined in accordance with generally accepted accounting
principles), together with interest on the unamortized cost
of any such improvement (at the prevailing loan rate
available to Main Landlord (or, in the event Main Landlord
is an Illinois land trust, its beneficiary) on the date the
cost of such improvement was incurred) shall be included in
Expenses; provided, however, as to (i) above, costs shall be
included in Expenses only to the extent Expenses are
actually reduced (unless Landlord has previously approved
such capital improvement in accordance with the Budget (as
defined in Section 2(i) of the Main Lease) and has obtained
Tenant's consent thereto, which consent shall not be
unreasonably withheld or delayed).
(B) If ninety-five percent (95%) of the Rentable Area
of the Building is not leased by tenants during all or a
portion of any Adjustment Year, then the components of
Expenses and the amounts thereof, which may vary depending
upon the occupancy level of the Building, shall be adjusted
for such year, employing sound accounting and management
principles in so doing, to the extent adjusted by Main
Landlord pursuant to Section 2(a)(iv)(B) of the Main Lease,
to reflect a 95% occupancy level. Any such adjustments
shall be deemed costs and expenses paid or incurred by Main
Landlord and included in Expenses for such year, as if the
Building had been ninety five percent (95%) occupied and the
Main Landlord had paid or incurred such costs and expenses
for such year. In no event, however, shall Tenant be
required to pay an amount in excess of the total of actual
costs and expenses less the amounts due from other tenants
in the Building (including Landlord, as a tenant under the
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Main Lease, but only to the extent of the excess of the Main
Premises over the Premises).
(C) If any item of Expenses, though paid in one year,
relates to more than one calendar year, such item shall be
proportionately allocated pursuant to the provisions of the
Main Lease at the option of Main Landlord among such related
calendar years. Main Landlord shall be entitled pursuant to
the provisions of the Main Lease to allocate such items of
Expense to one calendar year if the contract for such
Expense item requires payment in one year. At the
termination of the Lease, Tenant shall be reimbursed for any
disproportionate allocations of Expense items.
(v) "Land" shall mean the parcel of real estate
legally described on Exhibit D to the Main Lease.
(vi) "Parking Garage" shall mean two underground
levels containing approximately 170 spaces.
(vii) "Taxes" shall mean general real estate taxes,
assessments, (whether they be general or special) sewer
rents, rates and charges, water taxes, transit taxes, taxes
based upon the receipt of rent, and any other federal, state
or local governmental charge, general, special, ordinary or
extraordinary (but not including income or franchise taxes,
personal property replacement taxes or any other taxes
imposed upon or measured by the Main Landlord's general net
income or profits of the Building), which may now or
hereafter be levied, assessed or imposed against the
Building and/or the Land (the Building and said Land
collectively referred to herein as "Real Property") and
shall also mean leasehold taxes imposed upon the Landlord or
Main Landlord in connection with the leasing and operation
of the Real Property, except to the extent such taxes
constitute income or other taxes imposed upon or measured by
the general net income or profits of the Landlord or Main
Landlord; provided, however, to the extent Landlord is
charged a leasehold tax under the Main Lease and Tenant pays
Tenant's Proportionate Share thereof pursuant to the terms
and provisions of this Lease, Tenant will not also be
required to pay a separate subleasehold tax, if any, solely
in connection with this Lease.
In the event that Main Landlord and/or Landlord is
required by federal, state or local statute or ordinance to
collect taxes imposed upon Tenant in connection with the
Main Lease or this Lease (as the case may be), Tenant shall
cooperate with Main Landlord and/or Landlord (as the case
may be) in the collection and payment of same, shall execute
and deliver such forms and other documents as shall be
required to enable Main Landlord and/or Landlord (as the
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case may be) to collect and pay such taxes and shall remit
to either Landlord and/or Main Landlord (as the case may be)
all of Tenant's required payments, including interest and
penalties (but, with respect to interest, only to the extent
incurred as a direct result of the failure by Tenant to make
timely payments thereunder) prior to the date said taxes are
due and payable. In the event that such taxes may be paid
directly by Tenant, Tenant shall cooperate with Landlord
and/or Main Landlord in making any requests or applications
to enable Tenant, rather than Landlord and/or Main Landlord,
to pay such tax, and Tenant shall pay such tax directly to
the appropriate governmental authorities after the required
approvals are obtained.
Notwithstanding anything contained in this clause (vii)
of Section 2(a) to the contrary,
(A) If at any time the method of taxation then
prevailing shall be altered so that any new or additional
tax, assessment, levy, imposition or charge or any part
thereof shall be imposed upon Main Landlord in place or
partly in place of general real estate taxes, 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 replace general
real estate taxes, 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 Main Landlord subject thereto and the
income received by Main Landlord from the Real Property were
the only income of Main Landlord.
(B) Notwithstanding the year for which any such taxes
or assessments were levied, assessed or otherwise imposed,
Taxes for any year shall mean (i) the taxes or special
assessments (plus any interest payable thereon, but only to
the extent the interest was incurred as a result of the
failure by Tenant to make payments on a timely basis
hereunder) due and payable during such 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
(12) calendar months, then taxes or assessments applicable
to the excess period shall be included in Taxes for that
year only if due and payable in that year. 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 otherwise imposed for such year without
regard to when such taxes are payable.
(C) Taxes shall also include any personal property
taxes, if any, (attributable to the calendar year in which
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paid) imposed upon the furniture, fixtures, machinery,
equipment, apparatus, systems and appurtenances used in
connection with the Real Property, and excluding equipment
or personal property owned by tenants of the Building
including any personal property of Landlord as a tenant.
(D) As soon as practical following the expiration of
the Term of this Lease, Landlord and Tenant shall adjust the
amount of Additional Rent attributable to Taxes by
determining the difference, if any, between the Additional
Rent attributable to Taxes actually paid by Tenant ("Taxes
Paid") during the Term of the Lease and the Additional Rent
attributable to Taxes as actually assessed ("Taxes
Assessed") against the Building and Land during the Term of
the Lease. Tenant shall pay to Landlord the amount, if any,
by which the Taxes Assessed exceed the Taxes Paid and
Landlord shall pay to Tenant the amount, if any, by which
the Taxes Paid exceed the Taxes Assessed. The foregoing
obligations shall survive the termination of the Lease.
Such payment shall be made within thirty (30) days of such
determination by Landlord and Tenant.
(viii) "Rentable Area of the Building" shall mean the
sum of the areas of all office floors of the Building
computed by measuring to the interior face of the exterior
glass wall on each entire floor plus the public ground floor
and second floor lobby and excluding only the public stairs,
elevator shafts, flues, stacks, pipe shafts and vertical
ducts ("vertical penetrations"). No deduction shall be made
for columns or projections necessary to the Building.
Rentable Area of the Building shall, for the purposes of
this Lease, be deemed to be 1,442,284 square feet.
Notwithstanding anything contained in this clause (viii) of
Section 2(a) to the contrary, the deemed to be Rentable Area
for each full floor of the Premises is the square footage
shown on Exhibit F hereto for the particular floor.
(ix) "Rentable Area of the Premises" shall be between
206,697 and 245,025 square feet, subject to adjustment as
hereinafter provided, and shall mean the sum of the areas of
all office floors in the Premises shown on Exhibit F hereto
with respect to full floors. Partial floors shall be
calculated in accordance with clause (viii) above. The
exact "Rentable Area of the Premises" shall be set forth in
the Premises Amendment.
(x) "Tenant's Proportionate Share" shall mean the
percentage obtained by dividing the Rentable Area of the
Premises by the Rentable Area of the Building. The exact
"Tenant's Proportionate Share" shall be set forth in the
Premises Amendment.
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(xi) "Additional Rent" shall mean all amounts
determined pursuant to this Section 2, including any amounts
payable by Tenant to Landlord on account thereof.
(xii) "Adjusted Base Rent" shall mean the Base Rent as
adjusted pursuant to the provisions of Section 2(i) below.
(xiii) "Lease Year" shall mean the twelve (12) month
period commencing on the Commencement Date of the Lease and
each successive twelve (12) consecutive month period
thereafter during the Term of this Lease.
(xiv) Notwithstanding anything to the contrary set
forth above, Landlord and Tenant hereby agree as follows:
(A) On or before March 1, 1995, Tenant shall designate
the following information to Landlord in writing, which
designations shall be made in accordance with the terms and
provisions of Exhibit F attached hereto: (1) the per square
foot Base Rent per annum under the Lease, (2) the per square
foot amount of the Landlord's Allowance (as defined in the
Workletter), and (3) the exact location, size and floor
configuration of the Premises (including, without
limitation, the exact Rentable Area of the Premises)
(collectively, the foregoing are referred to herein as the
"Economic Terms"). In the event Tenant fails to designate
the Economic Terms on or before March 1, 1995 as aforesaid,
Landlord shall be permitted to designate such Economic Terms
for and on behalf of Tenant (which Economic Terms shall
assume that the Premises will consist of floors six (6)
through twelve (12) inclusive and that the Rentable Area of
the Premises shall be 245,025 square feet and shall
otherwise be in accordance with Exhibit F). Within twenty
(20) days after determination of the Economic Terms as
aforesaid, Landlord shall prepare and submit to Tenant a
proposed form of "Premises Amendment" to this Lease, which
Premises Amendment shall include the following information:
(a) the Rentable Area of the Premises, (b) the Base Rent,
Tenant's Proportionate Share and the amount of the
Landlord's Allowance calculated in accordance with the terms
and provisions of Exhibit F; (c) an amendment to Exhibit A
hereof designating the Premises; and (d) such other
information as Landlord and Tenant reasonably determine is
necessary as a result of the determination of the Economic
Terms. The Premises Amendment shall be in form and
substance reasonably satisfactory to Landlord and Tenant.
In the event the Premises Amendment has not been executed
and delivered within thirty (30) days after its delivery to
Tenant, the parties agree to submit the matter to
arbitration in accordance with Section 35 hereof.
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(B) In the event any item of Expense is included as a
part of Additional Rent for tenants of the Building (other
than Landlord as a tenant under the Main Lease) and a tenant
of the Building (the "Excluded Tenant") is responsible for
the total amount of such Expense item with respect to the
Excluded Tenant's premises (e.g., if Main Landlord shall
have no obligation to furnish cleaning and janitorial
service for the Excluded Tenant's premises) and the Main
Landlord includes the cost of such service for all other
tenants' premises as an item of Expense as a part of Rent
Adjustment, then the Rentable Area of the Excluded Tenant's
premises shall be deducted from the Rentable Area of the
Building (for purposes of calculating the remaining tenants'
Proportionate Share with respect only to such item of
expense) and such item of Expense shall be allocated only
among the remaining tenants.
(b) Computation of Additional Rent - Tax and Expense
Adjustments.
Commencing on the Commencement Date, Tenant shall pay
Additional Rent in the form of Tax and Expense Adjustments (as
hereinafter defined) for each Adjustment Year hereinafter
specified. Additional Rent payable by Tenant with respect to
each Adjustment Year during which an Adjustment Date falls shall
include the product of the Tenant's Proportionate Share,
multiplied by the amount of Taxes and Expenses for such
Adjustment Year ("Tax and Expense Adjustment").
(c) Payments of Additional Rent; Projections.
Tenant shall pay Additional Rent to Landlord in the
manner hereinafter provided.
(i) Tax and Expense Adjustment. Tenant shall make
payments on account of the Tax and Expense Adjustment (any
such payment with respect to any Adjustment Year being also
called "Additional Rent Progress Payment") effective as of
the Adjustment Date for each Adjustment Year as follows:
(A) Landlord shall, within ten (10) days of its
receipt of a "Projection Notice" (as defined in the Main
Lease), deliver to Tenant a copy of such Projection Notice,
which Projection Notice shall set forth, among other items,
Main Landlord's reasonable estimates, forecasts or
projections (collectively, the "Projections") of Taxes and
Expenses and shall be based, as set forth in the Main Lease,
on the Budget. Landlord shall, concurrently with the
delivery to Tenant of the Projection Notice as aforesaid,
furnish Tenant with a written statement setting forth
Tenant's Additional Rent Progress Payment for such
Adjustment Year based upon the Projection.
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(B) Until such time as Landlord furnishes a copy of a
Projection Notice for an Adjustment Year as aforesaid,
Tenant shall pay to Landlord a monthly installment of
Additional Rent Progress Payment at the time of each payment
of Monthly Base Rent equal to the latest monthly installment
of Additional Rent Progress Payment. On or before the first
day of the next calendar month following Landlord's service
of a copy 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 Additional Rent Progress Payment
shown in the copy of the Projection Notice. Within twenty
(20) days following Landlord's service of a copy of a
Projection Notice, Tenant shall also pay Landlord a lump sum
equal to the Additional Rent Progress Payment shown in the
copy of the Projection Notice less (1) any previous payments
on account of Additional Rent Progress Payment made during
such Adjustment Year and (2) monthly installments on account
of Additional Rent Progress Payment due for the remainder of
such Adjustment Year.
(C) Landlord shall deliver to Tenant on or before the
Commencement Date a statement of the initial monthly
installment of Additional Rent Progress Payment payable by
Tenant. Tenant agrees to pay monthly installments of
Additional Rent Progress Payment equal to said initial
monthly installments from and after the Commencement Date
hereof until changed pursuant to a Projection Notice from
Landlord as provided above.
(D) When encumbering the Real Property with a
mortgage, trust deed, ground or underlying lease, or other
such security documents to which the Main Lease shall be or
become subordinate ("Security Documents"), Main Landlord has
agreed under the Main Lease that it shall attempt in good
faith when negotiating any Security Documents to obtain the
waiver of any term or provision that would require Main
Landlord to, from time to time, deposit sums into an account
or escrow to be used for the payment of any or all Taxes
("Tax Escrow"). If Main Landlord is unable to eliminate or
waive the requirement in a Security Document for a Tax
Escrow, then Main Landlord has agreed pursuant to the terms
of the Main Lease to use its best efforts to obtain the
agreement of the lender to permit deposits made into the Tax
Escrow by Main Landlord to bear interest. Tenant shall,
within twenty (20) days of Landlord's receipt of the same
from Main Landlord, receive Tenant's Proportionate Share of
such interest, dividend or other income earned from the
deposits held in the Tax Escrow, such earnings to be
disbursed from the Tax Escrow when available pursuant to
such Security Documents. In the event Main Landlord is
successful in obtaining such waiver, then Tenant shall not
be required to make Additional Rent Progress Payments with
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regard to Taxes, but shall make payment in accordance with
the following provisions. Landlord shall within ten (10)
days of its receipt of a Tax Bill (being a copy of the bill
for Taxes which Landlord received from Main Landlord under
the Main Lease) deliver to Tenant a copy of such Tax Bill.
Tenant shall deliver to Landlord a certified check made
payable to the relevant taxing authority in the amount of
Tenant's Proportionate Share of the Tax Bill on a date which
is the later of: (a) ten (10) business days prior to the
date on which the Tax Bill is due, or (b) ten (10) days
after Tenant's receipt of the Tax Bill. If Taxes are
reduced or refunded after Tenant has paid its Tenant's
Proportionate Share thereof, Landlord will reimburse Tenant
for Tenant's Proportionate Share of such reduction or refund
within twenty (20) days after Landlord's receipt of same
from Main Landlord.
(d) Readjustments.
The following readjustments with regard to the Tax and
Expense Adjustment shall be made by Landlord and Tenant:
Within five (5) days of Landlord's receipt of
"Landlord's Statement" (as defined in the Main Lease) setting
forth Main Landlord's determination of the amount of Taxes and
actual Expenses ("Actual Expenses") for such Adjustment Year,
Landlord shall deliver to Tenant a copy of such Landlord's
Statement. If the Tax and Expense Adjustment owed for such
Adjustment Year exceeds the Additional Rent Progress Payment paid
by Tenant during such Adjustment Year, then Tenant shall, within
twenty (20) days after receipt of Landlord's Statement, pay to
Landlord an amount equal to the excess of the Tax and Expense
Adjustment over the Additional Rent Progress Payment paid by
Tenant during such Adjustment Year. If the Additional Rent
Progress Payment paid by Tenant during such Adjustment Year
exceeds the Tax and Expense Adjustment owed for such Adjustment
Year, then Landlord's payment of such excess ("Excess Expense
Adjustment") shall accompany the copy of the Landlord's Statement
delivered to Tenant as aforesaid. In the event the amount of the
Excess Expense Adjustment exceeds the actual Expenses by more
than ten percent (10%), then Landlord shall pay Tenant at the
time of repayment of the Excess Expense Adjustment Tenant's
Proportionate Share of any interest paid by Main Landlord to
Landlord pursuant to, and in accordance with, the Main Lease with
respect to such Excess Expense Adjustment; provided, however,
Landlord shall only be obligated to pay interest as aforesaid to
the extent it actually receives a corresponding interest payment
from Main Landlord under Section 2(d) of the Main Lease ("Main
Lease Interest") and provided further, that such Main Lease
Interest relates to Expenses paid by Tenant hereunder. Landlord
agrees, in good faith, to pursue its right to receive Main Lease
Interest from Main Landlord. The parties hereto acknowledge that
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pursuant to, and in accordance with, Section 2(i) of the Main
Lease, in the event the Landlord (in its capacity as a tenant
under the Main Lease) disapproves of the Budget (as defined in
the Main Lease) for any Adjustment Year under the Main Lease, the
Building shall be operated on the basis of the Temporary Budget
(as defined in the Main Lease) until such time as a revised
budget is approved by Landlord as Tenant thereunder.
(e) Audited Statement.
Within five (5) days of receipt thereof by Landlord
under Section 2(e) of the Main Lease, Landlord shall furnish to
Tenant a copy of the audited statement prepared by the
independent certified public accountant selected by Main Landlord
under the Main Lease setting forth in reasonable detail a
calculation of Expenses and Taxes. The cost of such audit shall
be an Expense pursuant to the terms of Section 2(a)(iv) hereof.
Landlord agrees, upon Tenant's request at any time within fifty
(50) days following Tenant's receipt from Landlord of the
Landlord's Statement, to request that Main Landlord permit Tenant
to examine, during normal business hours, Main Landlord's books
and records showing Expenses and Taxes; provided, however,
Landlord's only obligation hereunder shall be to make such
request and Landlord shall have no liability to Tenant in the
event Main Landlord, for any reason whatsoever, refuses to honor
said request. Unless Tenant objects to any item set forth in the
Landlord's Statement within fifty (50) days after the furnishing
of the Landlord's Statement containing said item, such Landlord's
Statement shall be considered final and accepted by Tenant.
(f) 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 to Landlord or Landlord shall pay to Tenant, as the case may
be, any Additional Rent or Excess Expense Adjustment, as the case
may be, due to the other within twenty (20) days after the date
Landlord's Statement is sent to Tenant. Without limitation on
other obligations of Tenant which shall survive the expiration of
the Term, the obligations of Tenant to pay Additional Rent and of
Landlord to refund any Excess Expense Adjustment provided for in
this Section 2 shall survive the expiration or termination of
this Lease.
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(g) No Decrease in Base Rent.
In no event shall the calculation of Additional Rent
result in a decrease of the Base Rent payable hereunder as set
forth in Section 1 hereof (as adjusted as set forth herein).
(h) Additional Rent.
All amounts payable by Tenant as or on account of
Additional Rent shall be deemed to be additional rent becoming
due under this Lease.
(i) Adjustment to Base Rent. Commencing with, and
including, the first day of the second Lease Year, the Base Rent
shall be adjusted for each Lease Year to an amount which is the
product of: (i) the then current Base Rent (as adjusted from
time to time in accordance with this Section 2(i)), multiplied by
(ii) one hundred and two percent (102%). As an example of the
foregoing calculation on a per square foot basis, the Adjusted
Base Rent for the Term assuming an initial Base Rent of $8.20 per
square foot per annum would be as follows:
Lease Year Adjusted Base Rent
Two $ 8.20 x 102% = $ 8.36
Three $ 8.36 x 102% = $ 8.53
Four $ 8.53 x 102% = $ 8.70
Five $ 8.70 x 102% = $ 8.87
Six $ 8.87 x 102% = $ 9.05
Seven $ 9.05 x 102% = $ 9.23
Eight $ 9.23 x 102% = $ 9.41
Nine $ 9.41 x 102% = $ 9.60
Ten $ 9.60 x 102% = $ 9.79
Eleven $ 9.79 x 102% = $ 9.99
Twelve $ 9.99 x 102% = $10.19
Thirteen (seven
months) $10.19 x 102% = $10.40
3. Early Occupancy
Tenant shall, in accordance with Section 25 hereof, be
entitled to possession of the Premises: (a) on September 1, 1995
(herein referred to as the "Possession Date") for the purpose of
performing Tenant's Work pursuant to, and in accordance with, the
terms and provisions of the Workletter, and (b) on July 1, 1996
for commencement of Tenant's occupancy of the Premises for the
purposes set forth in Section 4 hereof (subject to Section 5(c)
of the Workletter). In the event Tenant takes possession of the
Premises as aforesaid on or after the Possession Date, all of the
covenants and conditions of this Lease and the Workletter shall
apply to and shall control such possession, except that the
payment of Rent shall not commence until the Commencement Date.
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4. Use of Premises.
(a) Tenant shall use and occupy the Premises for
executive and general offices and for any other lawful purpose
permitted under applicable zoning ordinances (consistent with a
first class office building) (including, without limitation, and
to the extent permitted by applicable zoning ordinances for (i)
the preparation and service of food and beverages from a pantry
kitchen or lounge all for the exclusive use by officers,
employees and business guests of Tenant (but not for use as a
public restaurant or by other tenants of the Building), (ii) the
operation of vending machines for the exclusive use of officers,
employees and business guests of Tenant, provided that each
vending machine, where necessary, shall be installed in a manner
reasonably approved by Landlord and/or Main Landlord and designed
to avoid water leakage, and (iii) the installation, maintenance
and operation of electronic data processing equipment, computer
processing facilities and business machines, provided that such
equipment is contained within the Premises and does not cause
unreasonable (consistent with a first class office building)
vibrations, noise, electrical interference or other unreasonable
(consistent with a first class office building) disturbance to
other tenants of the Building or the elevators or other equipment
in the Building), provided that the foregoing uses are not
inconsistent with a first class office building. 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) is dangerous or clearly may
be dangerous to persons or property; (iii) invalidates, increases
or clearly will invalidate or increase the amount of premiums for
any policy of insurance affecting the Real Property, unless any
additional amounts of insurance premiums so incurred, are paid by
Tenant to Landlord; or (iv) creates or clearly will create a
nuisance, unreasonably disturbs any other tenant of the Building
or injures the reputation of the Building.
(b) With respect to any use permitted under this
Section 4, Tenant shall not use the Premises so as to violate any
laws or requirements of public authorities, constitute a public
or private nuisance, unreasonably interfere with or cause
physical discomfort to any of the other tenants or occupants of
the Building, interfere with the operation of the Building or the
maintenance of same as a first-class office building, or violate
any of Tenant's other obligations under this Lease.
5. Services. Landlord shall cause Main Landlord to
furnish subject to, and in accordance with, the terms and
provisions of the Main Lease, the following services, which shall
all be deemed Expenses (except to the extent to be paid entirely
by Tenant, as hereinafter provided):
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(a) Air-cooling and heat in accordance with the
heating, ventilating and air conditioning ("HVAC") Specifications
on Attachment A to the Workletter of the Main Lease, daily from
7:00 A.M. to 6:00 P.M. (Saturdays 8:00 A.M. to 1:00 P.M.),
Sundays and Holidays excepted. The term "Holidays" as used
herein shall mean those days customarily recognized as holidays
by other first-class office buildings in downtown Chicago.
(i) Subject to the provisions of subsection (ii)
below, whenever Tenant's use or occupation of the Premises
exceeds the design loads, as specified on Attachment A to
the Workletter of the Main Lease, for the system that
provides heat and air-cooling, or Tenant's use of lighting
or heat generating machines or equipment in the Premises
exceed such design loads and affect the temperature
otherwise maintained by the heating, ventilating and
air-conditioning system in the Premises or Building,
Landlord and/or Main Landlord, as the case may be, may
temper such excess loads by installing supplementary heat or
air-conditioning units in the Premises or elsewhere where
necessary, and the cost of such units and the expense of
installation, including, without limitation, the reasonable
cost of preparing working drawings and specifications, shall
be paid by Tenant as Additional Rent within thirty (30) days
after receipt of invoices therefor. The expense, except for
electricity directly billed to Tenant, resulting from the
operation and maintenance of any such supplementary heat or
air-conditioning units shall be paid by the Tenant to the
Landlord as Additional Rent at rates fixed by Landlord
and/or Main Landlord, as the case may be (but not both);
such rates shall be the lesser of: (A) the actual cost of
such operation and maintenance, plus five percent (5%) of
such actual cost for Landlord's and/or Main Landlord's
overhead (but not both), or (B) the amount actually charged
by Main Landlord to Landlord for such supplementary units
under the Main Lease. Notwithstanding the foregoing, Tenant
shall maintain, at Tenant's sole cost and expense, the
additional air conditioning units ("Additional HVAC Units")
being installed by Tenant in the Premises pursuant to the
terms and provisions of the Workletter.
(ii) The agreements hereunder are subject to
governmental restrictions on energy use. Furthermore, if
Tenant requests air-cooling and heat during times other than
the hours described above, then the provision of such
additional service shall be pursuant to Section 5(h) hereof.
(b) In common with other tenants, cold water from the
City of Chicago mains for drinking, lavatory and toilet purposes
drawn through fixtures installed in the Premises by Landlord,
Main Landlord or by Tenant with Landlord's and (to the extent
required under the Main Lease) Main Landlord's written consent,
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and hot water in common with other tenants for lavatory purposes
from regular Building supply. Tenant shall pay Landlord as
Additional Rent at rates fixed by Landlord and/or Main Landlord,
as the case may be (but not both), for all tenants (which rates
shall not exceed the rates charged by the public utility
providing same, plus one hundred five percent (105%) of the cost
of heating hot water) for domestic water and hot water furnished
for any purpose other than as set forth in the first sentence of
this Section 5(b). The Tenant shall not waste or permit the
waste of water. Tenant shall pay the cost of acquisition,
installation, repair, maintenance and replacement of any
equipment required to be obtained to supply Tenant's special hot
water needs.
(c) Janitorial and cleaning service in accordance with
the cleaning specifications attached as Exhibit G to the Main
Lease ("Cleaning Specifications") in and about the Premises,
Saturdays, Sundays and Holidays excepted.
(d) Passenger elevator service consisting of not less
than eight (8) elevators (not including any elevators which are
temporarily out of service or otherwise temporarily unavailable
for use) located in that portion of the bank of eight (8)
elevators as shown on Attachment A to the Workletter of the Main
Lease serving exclusively floors 2 through 15 of the Building,
both inclusive, including each of floors six (6) through twelve
(12), both inclusive, in common with Landlord, Main Landlord and
other persons at such times as Landlord is permitted to use such
elevators subject to, and in accordance with, the Main Lease.
Landlord shall also cause Main Landlord to provide subject to,
and in accordance with, the Main Lease, freight elevator service
in common with Landlord, Main Landlord and other persons, at such
time or times as may be established by Main Landlord or Landlord
including the right, in common with Landlord, AT&T and their
successors and assigns, to the use of the separate single freight
elevator provided by Main Landlord for their exclusive use
pursuant to Section 5(d) of the Main Lease. Such full elevator
service, passenger or freight, if furnished at other times shall
be optional with Landlord and/or Main Landlord and shall never be
deemed a continuing obligation. Landlord, however, shall cause
the Main Landlord to provide subject to, and in accordance with,
the terms and provisions of the Main Lease, limited (but not less
than two (2)) passenger elevator service daily at all other
times. Operatorless automatic elevator service shall be deemed
"elevator service" within the meaning of this paragraph. In
addition, Tenant shall be entitled to use, on a non-exclusive
basis, the executive passenger elevator which is express to the
60th floor of the Building for so long as the conferencing center
on such floor is available to Tenant pursuant to subsection 5(k)
below.
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(e) Electricity shall not be furnished by Landlord or
Main Landlord, but shall be furnished by an approved electric
utility company serving the area. Landlord shall permit the
Tenant to receive such service direct from such utility company
at Tenant's cost, and shall permit Landlord's and Main Landlord's
(to the extent permitted under the Main Lease) wire and conduits
to be used for such purposes to the extent available and
suitable. Notwithstanding anything contained herein to the
contrary, Landlord shall cause Main Landlord to provide subject
to, and in accordance with, the terms and provisions of the Main
Lease, at no expense to Tenant, sufficient wire and conduit to
meet the requirements as indicated on Attachment A to the
Workletter of the Main Lease. Tenant shall make all necessary
arrangements with the utility company for metering and paying for
electric current furnished by the utility company to Tenant and
Tenant shall pay for all charges for electric current consumed on
the Premises during Tenant's occupancy thereof. The electricity
used during the performance of janitor service, the making of
alterations or repairs in the Premises (provided same are for
Tenant's benefit), and for the operation of the Building's HVAC
system at times other than as provided in paragraph (a) hereof at
the request of Tenant, or the operation of any special air
conditioning systems which may be required for data processing
and computer equipment or for other special equipment or
machinery installed by Tenant, shall be paid for by Tenant.
Tenant shall make no alterations or additions to the electric
equipment or appliances without the prior written consent of the
Landlord and Main Landlord (to the extent required under the Main
Lease) in each instance, which consent as to Landlord shall not
be unreasonably withheld; provided, however, Tenant shall have
the right, without the consent of Landlord, to install, relocate
and/or remove any equipment owned or leased by Tenant or subject
to a purchase and/or financing arrangement with Tenant within the
Premises (as long as such relocation does not adversely affect
any Building systems and is done in accordance with any
applicable Rules and Regulations). Tenant may, but shall not be
obligated, to purchase from the Landlord or the Main Landlord
lamps, used in the Premises during the Term hereof which shall be
offered at a reasonably competitive price established by Main
Landlord plus a fee for storage and handling not to exceed five
percent (5%) of the cost of such lamps and for installation not
to exceed the rates set forth in the Budget. In the event Tenant
elects not to purchase lamps, Tenant will give Landlord four (4)
months notice of such election. Tenant agrees that all lamps
shall be appropriate for their intended use and shall be
consistent with the color rendition of the lamps in the balance
of the Building. Tenant covenants and agrees that at all times
its use of electric current shall never exceed the capacity
available as stated in Attachment A to the Workletter of the Main
Lease; provided, however, Landlord agrees to cause the Main
Landlord to provide subject to, and in accordance with, the terms
of the Main Lease, additional capacity, at Tenant's request if
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(i) it is reasonably feasible to do so, and (ii) Tenant pays for
the cost of same.
(f) Window washing of all exterior windows in the
Premises, both inside and out, weather permitting, in accordance
with the Cleaning Specifications.
(g) Tenant and its employees and visitors may use
below-grade enclosed parking areas in the Parking Garage for
passenger vehicles in common with Main Landlord, Landlord and
other tenants of the Building and their employees and visitors,
all subject to the Rules and Regulations (as hereinafter defined)
including, without limitation, the right to allocate specific
parking spaces to certain tenants in the Building and to charge
periodic user fees for the use of such parking spaces. Tenant
shall have available for its use forty (40) of such spaces in a
specific location determined by Landlord; provided, however, in
the event Tenant fails to pay for the use of any such spaces,
such spaces not so paid for will automatically revert back to
Landlord. Tenant shall pay the periodic user fees charged
generally to tenants of the Building to the extent it contracts
for use of such spaces.
(h) Landlord may, upon the reasonable request of
Tenant, provide such extra or additional services as it is
reasonably possible for the Landlord to provide (or, at Tenant's
option, Tenant can request that Landlord or any agent of Landlord
(designated by Landlord in writing as Landlord's agent from time
to time) cause the Main Landlord to provide such extra or
additional services as is reasonably possible for Main Landlord
to provide subject to, and in accordance with, the terms of the
Main Lease), within a reasonable period of time after such extra
or additional services are requested. Tenant shall, for such
extra or additional services, pay the lesser of (i) the amounts
charged by Main Landlord pursuant to Section 5(h)(a) and (b) of
the Main Lease, or (ii) one hundred five percent (105%) of all of
Landlord's and/or Main Landlord's, as the case may be, (but not
both) reasonable costs which are incurred in providing same, such
amount to be considered Additional Rent hereunder. Landlord's
and/or Main Landlord's cost, as the case may be, (but not both)
shall include, but shall not be limited to, fees and other
charges paid by Landlord and/or Main Landlord, as the case may
be, (but not both) to architects, engineers and other consultants
retained by Landlord and/or Main Landlord to determine whether or
not, and on what terms and conditions, such extra or additional
services may be provided, as aforesaid. All charges for such
extra or additional services shall be due and payable within
twenty (20) days after they are billed. Interest at the rate set
forth in Section 26(h) shall accrue commencing at the expiration
of such twenty (20) day period. Any such billings (not more than
once a month) for extra or additional services shall include an
itemization of the extra or additional services rendered, and the
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charge for each such service. At Tenant's request, Landlord
shall provide (or cause Main Landlord to provide) Tenant with the
rates for additional services as requested by Tenant and shall
promptly notify Tenant of any changes in such rates.
(i) Security at Building lobby entrance comparable to
that provided in first class non-institutionally owned office
buildings in downtown Chicago.
(j) Tenant, in common with other tenants, shall have
the right to use the loading docks at the Project subject to
prior scheduling with Landlord and Main Landlord. In addition,
Tenant shall have the right, in common with Landlord and AT&T, to
use the thirty (30) foot loading dock and the approximately 400
square foot storage area shown on Exhibit I of the Main Lease, as
said location may change in accordance with the terms and
provisions of the Main Lease, and shall have the further right,
at time of initial move-in and move-out, to use in common with
Landlord and AT&T the single fifty (50) foot over-the-road
loading berth.
(k) Tenant, in common with other tenants, AT&T and
Landlord, shall have the right to use the conferencing center on
the 60th floor of the Building at such rates as may from time to
time be established on a non-discriminatory basis with other
tenants in the Building (except that Landlord, AT&T and/or any
entity which is affiliated with Landlord and/or AT&T may receive
preferential treatment), subject to prior scheduling with the
Landlord and Main Landlord; provided, however, such right can be
revoked by Landlord at any time, in its sole discretion, if Main
Landlord, Landlord or AT&T desires to use such space for its own
purposes or grants another tenant or its subtenant exclusive use
of such space.
Tenant agrees that neither Landlord nor Main Landlord,
nor their respective agents or employees shall be liable in
damages, by abatement of Rent or otherwise, except in the event
of the negligence, intentional act or omission of Landlord, Main
Landlord or their respective agents and employees, for failure to
furnish (or causing to be furnished) or delay in furnishing any
service 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 elec-
tricity, gas, water, or other fuel at the Building after
reasonable effort so to do, 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 or Main
Landlord. Tenant shall notify Landlord if any service shall be
stopped, delayed or diminished, and Landlord will proceed
diligently to attempt to cause the Main Landlord to restore such
service subject to, and in accordance with, the terms of the Main
Lease, as soon as reasonably possible, subject to the provisions
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of this Section 5. Notwithstanding the foregoing, if as a result
of any failure or delay in providing (or causing to be provided)
HVAC, plumbing, water, electricity or elevator service (other
than any such failure or delay caused by the utility company
providing same or a failure or delay which affects buildings in
the area in which the Building is located, or failure or delay
caused by the negligence or intentional act of Tenant or its
agents, employees, guests or invitees) the Premises, or any
material portion of a floor of the Premises is rendered unusable:
(i) for a period in excess of three (3) consecutive business
days, then Rent for the portion of the Premises rendered unusable
shall abate until such portion is rendered usable, and (ii) for a
period in excess of (A) one hundred eighty (180) consecutive
business days or (B) one hundred eighty (180) days during any
three hundred sixty (360) day period, then Tenant shall have the
right, upon ten (10) days prior written notice from Tenant to
Landlord, to terminate the Lease in its entirety or, in the event
only a floor or portion of a floor of the Premises is rendered
unusable as aforesaid, only in half floor units which would
include the affected portion thereof (unless the Premises or
portion thereof are rendered usable prior to receipt of the
aforesaid notice from Tenant). Tenant agrees to cooperate fully,
at all times, with Landlord in abiding by all Rules and
Regulations and other requirements which Landlord and/or Main
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 and Main
Landlord, throughout the Term of this Lease, shall have access to
any and all mechanical installations within the Premises on
reasonable notice to Tenant, and Tenant agrees that there shall
be no construction or partitions or other obstructions which will
materially interfere with the moving of the servicing equipment
of Landlord or Main Landlord to or from the enclosures containing
said installations. Tenant further agrees that neither Tenant
nor its employees, agents, licensees, invitees or contractors
shall at any time tamper with, adjust or otherwise in any manner
affect Landlord's or Main Landlord's mechanical installations
unless authorized by Landlord or Main Landlord (as the case may
be). All services provided (or caused to be provided by Main
Landlord subject to, and in accordance with, the Main Lease)
pursuant to the terms hereof shall be of a quality level
consistent with a first class non-institutionally owned office
building in downtown Chicago. Landlord shall use (or, at
Landlord's option, shall cause Main Landlord to use subject to,
and in accordance with, the terms and provisions of the Main
Lease) reasonable efforts to provide such services in a cost-
effective manner.
If Landlord shall fail to perform (or fail to cause
Main Landlord to perform subject to, and in accordance with the
Main Lease) the services set forth in Section 5(c) above
("Cleaning Services") (and such failure is not otherwise excused
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as set forth in this Section 5) and such failure continues for a
period of ten (10) consecutive business days after written notice
from Tenant to Landlord, then the Tenant, in addition to the
right to abate Rent as set forth above, shall have the right to
perform such Cleaning Services not performed by (or caused to be
performed by) Landlord until such time as the Landlord cures (or
causes the cure of) the failure to perform. Such time period
shall not be extended by Force Majeure. Tenant shall bill
Landlord for all reasonable and verifiable costs of performance
by the Tenant of such Cleaning Services plus five percent (5%)
thereof for overhead. In the event Landlord does not pay same
within thirty (30) days of receipt of such invoice, then Tenant
shall have the right to set off such amount against amounts owed
by the Tenant to the Landlord under this Lease.
6. Condition and Care of Premises. 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 or the
Building has been made to Tenant by or on behalf of Landlord
except to the extent expressly set forth herein. This Lease does
not grant any rights to light or air over or about the Real
Property of Main Landlord except as set forth in Section 30
hereof. Except for (i) any damage resulting from any negligent
or intentional act or omission of Landlord, AT&T or their
employees or agents, and (ii) Landlord's Repair Obligations
defined below, and, subject to the provisions of Sections 13 and
14 hereof, Tenant shall at its own expense keep the Premises and
Tenant's leasehold improvements and contents in good repair and
tenantable condition and shall promptly and adequately repair all
damage to the Premises caused by Tenant or any of its employees,
contractors, agents, invitees, or licensees including replacing
or repairing all damaged or broken glass, fixtures and
appurtenances resulting from any such damage. If Tenant does not
do so promptly and adequately, Landlord may (upon not less than
fifteen (15) days' notice to Tenant except in an emergency) but
need not, make such repairs and replacements and Tenant, shall
pay Landlord the reasonable and verifiable cost thereof within
thirty (30) days after billing, plus five percent (5%) of such
cost for Landlord's overhead. Interest at the rate set forth in
Section 26(h) shall accrue commencing at the expiration of such
thirty (30) day period.
Landlord hereby agrees to cause Main Landlord to
perform the following repair and maintenance obligations subject
to, and in accordance with, the terms and provisions of the Main
Lease ("Landlord's Repair Obligations"): all maintenance,
repairs and replacements to the common areas of the Building and
Building service systems not specifically due to the Tenant's
negligent or intentional act or omission. Without limiting the
generality of the foregoing sentence or the following, the
Landlord shall cause Main Landlord to maintain, repair and keep
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in good order, safe and clean condition subject to, and in
accordance with, the terms of the Main Lease (1) the plumbing,
sprinkler, HVAC, any supplemental systems installed pursuant to
Section 5(a)(i) (such units to be maintained by Main Landlord at
Tenant's expense); provided, however, Tenant, at its sole cost
and expense, may install or cause to be installed and shall
maintain or cause to be maintained the Additional HVAC Units
described in Section 5(a)(i) above)); security systems of the
Building (other than as installed by Tenant); electrical and
mechanical systems and equipment, and Main Landlord's elevators
and boilers, all as described in Attachment A to the Workletter
of the Main Lease ("Standard Items") or any substitutions for
such Standard Items or additions requested by Landlord and
approved by Main Landlord pursuant to the terms of the Main Lease
(provided that, to the extent such substitutions or additions are
to be installed in the Premises, Landlord agrees it will also
obtain the consent of Tenant, which consent shall not be
unreasonably withheld or delayed), all of which are located in or
serve the Premises and common areas of the Building, broken or
damaged glass (unless caused by the negligent or intentional act
or omission of the Tenant or specifically required to be repaired
or replaced by Tenant pursuant to the preceding paragraph); (2)
underground utility lines and transformers and interior and
exterior structure of the Building, including the roof (except as
set forth in Section 30 and in the Direct Lease Option and
Consent Agreement), exterior walls, bearing walls, support beams,
foundation, columns, exterior doors and windows and lateral
support to the Building; (3) the interior walls, ceilings, floors
and floor coverings of the common areas of the Building; (4) the
exterior improvements to the Land, including shrubbery,
landscaping and fencing; and (5) the common areas located within
or outside the Building, including the common entrances,
corridors, doors and windows, loading dock, stairways and
lavatory facilities and access ways therefor.
7. Return of Premises.
(a) 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
good repair and tenantable condition, ordinary wear and tear,
loss or damage by fire or other insured casualty, and damage
resulting from condemnation and/or the negligence, intentional
act or omission of Landlord and/or Main Landlord excepted,
failing which Landlord may restore the Premises and such
equipment and fixtures to such good and tenantable condition and
Tenant shall pay the cost thereof to Landlord within thirty (30)
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days of receipt of an invoice together with five percent (5%) of
such cost as Landlord's overhead. Interest at the rate set forth
in Section 26(h) shall accrue commencing at the expiration of
such thirty (30) day period. In no event shall Tenant remove
items, the removal of which would cause damage to the structure
of the Building, without Landlord's and (to the extent required
under the Main Lease) Main Landlord's consent, which consent
shall not be unreasonably withheld. If such consent is obtained,
Tenant shall repair all damage at its expense. It is understood
and agreed that, in accordance with the terms and provisions of
the Workletter, Tenant may elect, in its sole discretion, as part
of the Tenant's Work, to demolish certain portions of the
Premises as they exist on the date possession of the Premises is
delivered to Tenant, including without limitation the right to
demolish all or any portion of the eleventh (11th) floor
improvements, and, with respect to such demolition, Tenant shall
not be obligated, at the termination of this Lease, to restore
said demolished portions to their original condition prior to the
demolition thereof by Tenant.
(b) All installations, additions, partitions,
hardware, light fixtures, non-trade fixtures and improvements,
temporary or permanent, except movable furniture, personal
property and equipment belonging to Tenant, in or upon the
Premises, placed there by Tenant shall be Landlord's property and
shall remain upon the Premises, all without compensation,
allowance or credit to Tenant; provided, however, Tenant may
elect at its discretion to remove custom millwork, cabinetry,
equipment from the telephone equipment room, computer wiring,
microwave and other communication equipment (to the extent owned
or leased by Tenant), carpeting, track lighting, special lighting
fixtures and office display modules, in which event Tenant shall,
prior to the end of the Term or seven (7) days after the earlier
termination of the Lease or Tenant's right to possession, repair
any damage to the Premises caused by such removal, failing such
repair by Tenant, Landlord may repair the Premises and Tenant
shall pay the cost thereof to Landlord within thirty (30) days of
receipt of an invoice, together with five percent (5%) of such
cost for Landlord's overhead. Interest at the rate set forth in
Section 26(h) shall accrue commencing at the expiration of such
thirty (30) day period. Landlord shall, at the time of its
consent to any installations, additions, partitions, fixtures or
improvements given pursuant to Section 11 hereof or the
Workletter, provide Tenant with written notice stating whether or
not Landlord shall require Tenant to remove the same upon
termination of this Lease (except no such removal will be
required if such installations, additions, partitions, fixtures
or improvements are of at least building standard quality, as
reasonably determined by Landlord), and if such removal is
required, Tenant, at Tenant's sole cost and expense, shall
promptly remove such of the installations, additions, partitions
and fixtures designated in such notice and repair any damage to
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the Premises caused by such removal, failing which either
Landlord or Main Landlord, as the case may be, may remove the
same and repair the Premises and Tenant shall pay the expense to
Landlord or Main Landlord, as the case may be, (but not both) of
doing the same.
(c) Tenant shall remove Tenant's furniture, machinery,
safes, trade fixtures and other items of movable personal
property of every kind and description from the Premises and
restore any damage to the Premises caused thereby, such removal
and restoration to be performed prior to the end of the Term or
seven (7) days following termination of this Lease or Tenant's
right of possession, whichever might be earlier, failing which
either Landlord or Main Landlord (but not both) may do so in
accordance with the terms and provisions hereof or of the Main
Lease and thereupon the provisions of Section 15(f) shall apply.
(d) All obligations of Tenant pursuant to this Section
7 shall survive the expiration of the Term or sooner termination
of this Lease; provided, however, if Landlord has not made a
written claim against Tenant within ninety (90) days after the
expiration of the Term or termination of the Lease, all such
obligations of Tenant under this Section 7 shall terminate and
Landlord shall have no further rights with respect to the
foregoing. Nothing contained herein shall relieve Tenant from
its obligations pursuant to Section 2(f) hereof.
8. Holding Over. The Tenant shall pay Landlord for
each day Tenant retains possession of the Premises or any part
thereof subsequent to the expiration of the Term, an amount which
is two hundred percent (200%) of the amount of Rent, as set forth
in Sections 1 and 2 hereof, for each day (computed on a year of
365 days) applicable to that portion of the Premises being held-
over. Tenant shall also pay all direct actual damages and
consequential damages sustained by Landlord by reason of such
retention. Nothing contained in this Section shall be construed
or operate as a waiver of Landlord's right of re-entry or any
other legal or equitable right or remedy to gain possession of
that portion of the Premises being held-over. In no event shall
consequential damages payable by Tenant under this Section 8
exceed the total amount of damages which Landlord is liable to
pay Main Landlord under the Main Lease as a result of such
holdover.
9. Rules and Regulations.
(a) Tenant agrees to observe and not to interfere with
the rights reserved to Landlord contained in Section 10 hereof
(and the rights reserved to Main Landlord contained in Section 10
of the Main Lease) and agrees, for itself, its employees, agents,
contractors, invitees and licensees, to comply with the rules and
regulations set forth in Exhibit J of the Main Lease and any
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additional rules and regulations applicable to Tenant as shall be
adopted by Landlord pursuant to Section 10 of this Lease (and/or
Main Landlord pursuant to and in accordance with Section 10 of
the Main Lease) (collectively, "Rules and Regulations").
(b) Any violation by Tenant of any of the 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.
Landlord shall use its reasonable efforts to cause Main Landlord
to enforce, in accordance with the terms and provisions of the
Main Lease, those Rules and Regulations which are adopted by Main
Landlord against any other tenant. The cost of such enforcement
shall be an Expense hereunder, provided that (i) all leases with
tenants in the Building shall contain a provision specifying that
such tenant shall be liable for all costs and expenses, including
attorneys' fees incurred, by Main Landlord in enforcing the Rules
and Regulations against such tenant and (ii) Main Landlord uses
reasonable efforts to collect such costs, fees and expenses.
(c) Landlord agrees not to discriminate against Tenant
in the approval, adoption or enforcement of any Rules and
Regulations adopted by it and applicable to all other subtenants
of the Main Premises or approved by it under the Main Lease and
applicable to the Premises.
10. Rights Reserved to Landlord. Landlord reserves
the following rights, exercisable at its election with prior
written notice to Tenant:
(a) The location and style of the suite number and
identification sign or lettering for the Premises occupied by the
Tenant (and any other signage) shall be subject to the approval
of Landlord and (to the extent required under the Main Lease)
Main Landlord which approval as to Landlord shall not be
unreasonably withheld; provided, however, Tenant shall have the
right, without the prior consent of Landlord, to install signs
within the Premises on the floors of the Premises consisting of
complete floors.
(b) To retain at all times, and, subject to the
provisions of subsection (d) below, to use in appropriate
instances, passkeys to the Premises.
(c) To exhibit the Premises (on reasonable notice to
Tenant) to prospective assignees and mortgagees.
(d) 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
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subject, however, (with the exception of janitor service) to the
following:
(i) The Landlord will give an employee designated in
writing by the Tenant, advance oral notice of its desire to
enter the Premises and the purposes for such entry; and
(ii) The Landlord agrees that neither it nor any of
its representatives, employees, invitees or agents will
enter into or move about the Premises unless accompanied by
a representative of the Tenant; and
(iii) The Landlord agrees that if, prior to such
entry, it is impracticable for the Tenant to secure
classified or confidential material, the Tenant may prevent
the Landlord from access to the area where such material is
located until same is secured; provided, however, that in
the event of an emergency, the Tenant will secure the same
promptly; and
(iv) The Landlord will use all reasonable efforts not
to disturb the Tenant's use and occupancy of the Premises;
and
(v) Notwithstanding the foregoing, Tenant agrees that
Landlord shall have immediate access to the Premises in the
event of an emergency. Tenant agrees to provide Landlord
with a reasonable means of access for such emergencies.
(e) Provided that reasonable access to the Premises
shall be maintained and the business of Tenant shall not be
interfered with unreasonably, to make repairs, alterations,
additions and improvements, structural or otherwise, in or to the
Main Premises or any part thereof. During such work described
herein, Landlord may enter the Premises, subject to the
requirements of Section 10(d)(i)-(v), and take into and upon or
through any part of the Building, including the Premises, all
materials that may be necessary for such work. Landlord shall,
at its expense, repair all damage caused by Landlord to the
Premises (and cause Main Landlord to repair all damage caused by
Main Landlord) and restore the Premises to their original
condition. Landlord and/or Main Landlord, as the case may be,
shall obtain all appropriate insurance or cause its contractors
to carry such insurance. All such work shall comply with all
insurance requirements and all applicable laws and ordinances and
rules and regulations of governmental departments or agencies.
Landlord or Main Landlord may, at their option, make any repairs,
alterations, improvements and additions in and about the Building
and the Premises during ordinary business hours; provided,
however, if the conduct of Tenant's business is materially and
adversely affected by same, at Tenant's reasonable request, such
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work (other than emergency work) shall be done during other than
business hours, at no cost or expense to Tenant.
(f) To designate parking spaces in the Building for
the exclusive use of one or more subtenants (subject to Tenant's
rights herein set forth).
(g) From time to time to make and adopt on a non-
discriminatory basis such reasonable rules and regulations for
the protection and welfare of the Main Premises and its
subtenants and occupants, as the Landlord may reasonably
determine and not solely or primarily for the benefit of
Landlord, and the Tenant agrees to abide by and comply with all
such reasonable rules and regulations.
11. Alterations.
(a) Except with respect to work being performed by or
on behalf of Tenant pursuant to, and in accordance with, the
Workletter, Tenant shall not make alterations, improvements and
additions in the Premises including, but not limited to HVAC,
electrical and plumbing systems, and fire, smoke detection and
temperature control systems ("Alterations") without Landlord's
advance written consent in each instance, which approval shall
not be unreasonably withheld, and (to the extent required under
the Main Lease) the consent of the Main Landlord. Landlord shall
not be deemed to have acted unreasonably if it withholds its
consent because: Main Landlord has disapproved such Alteration
(to the extent Main Landlord's approval is required); such work
when completed by Tenant will, in the reasonable opinion of
Landlord or Landlord's architect, adversely affect building
systems or the structure or safety of the Building and its
occupants; such work will increase Landlord's or Main Landlord's
cost of furnishing services (unless Tenant agrees to reimburse
Landlord or Main Landlord, as the case may be, for such increased
costs) or otherwise will materially adversely affect Landlord's
or Main Landlord's ability to furnish services to Tenant or other
tenants. 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. Landlord shall have thirty (30) days within which to
review, and have its consultants review, the proposed Alterations
and Landlord shall be entitled to reimbursement for its
reasonable costs incurred in such review and determination, plus
five percent (5%) of such costs for Landlord's overhead. In no
event shall Tenant be required to pay or reimburse both the
Landlord and the Main Landlord for the same matter nor shall
Tenant's cost with respect to such matters exceed the cost which
Landlord would have been required to pay to Main Landlord under
the Main Lease. Landlord agrees to proceed diligently with such
review and to inform Tenant of its consent or disapproval
promptly. Notwithstanding the foregoing, Tenant may make the
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alterations, improvements or additions to the Premises as listed
below without the Landlord's or Main Landlord's consent:
(i) Activate, cap or relocate voice/data outlets;
(ii) Minor alteration of interior tenant space walls
and wall/power/voice/data outlets and circuits as long as
equipment connected to said outlets does not affect HVAC;
(iii) Relocate light fixtures (minor relocations not
affecting switching);
(iv) Minor relocation of air diffusers within flex
range;
(v) Repainting, wallpapering or recarpeting of the
Premises;
(vi) Minor carpentry such as decorating, picture
hanging, furniture/cabinet securing, carpet changes and
repainting and re-wallpapering not covered by (v) above; and
(vii) All furniture additions, removals or relocations,
including wall panel systems.
Items (i) through (v) are hereinafter referred to as
"Non-Structural Alterations". Except as set forth in the next
sentence, Tenant shall notify Landlord with specificity in
writing of all Non-Structural Alterations at least twenty-four
(24) hours prior to their commencement including, without
limitation, the nature and location of the Non-Structural
Alterations. Tenant shall notify Landlord of Non-Structural
Alterations described in (i) above on a monthly basis. Tenant
shall also promptly notify Landlord of any material changes to
the Non-Structural Alterations previously described to Landlord.
(b) All work of the nature herein contemplated may be
done by contractors chosen by Tenant; provided, however, the
Tenant's choice of contractors shall be subject to the approval
of Landlord and Main Landlord (to the extent required under the
Main Lease), which approval, as to Landlord, shall not be
unreasonably withheld. All contractors chosen by Tenant shall be
of good reputation, have financial capacity to complete the work,
be experienced in the area of work for which they have been
hired, shall to the extent relevant, be familiar with high-rise
construction, have good labor relations and utilize union labor.
Tenant shall supply Landlord prior to commencement of the work
with copies of all contracts and warranties with respect to
Alterations and permits required in connection with such work and
evidence of insurance coverage, including coverage of Landlord
and Main Landlord as additional insured parties. Working
drawings and specifications with respect to Alterations shall be
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prepared at Tenant's expense by architects or engineers retained
by Tenant and approved by Landlord and Main Landlord (to the
extent required under the Main Lease), which approval, as to
Landlord, shall not be unreasonably withheld. Within a
reasonable time after a request by Tenant, Landlord shall
provide, at no cost to Tenant, all base building information,
drawings and specifications in Landlord's possession (and will
request Main Landlord to provide, at no cost to Tenant, copies of
any other base building information, drawings and specifications
in Main Landlord's possession), to the extent the same are
reasonably requested by Tenant. After completion of the
Alterations, Tenant shall furnish Landlord with final
construction drawings marked to show all changes. If reasonably
requested by Landlord, Tenant shall furnish Landlord on
completion thereof with field drawings and plans and
specifications, if any, for information purposes only. In the
event Tenant elects to use contractors employed by Landlord or
Main Landlord for Alterations, then Tenant shall pay the cost of
such work plus a fee to Landlord or Main Landlord, as the case
may be (but not both) as set forth in Landlord's or Main
Landlord's, as the case may be, bid for such work. In the event
Tenant employs its own contractors, then neither Landlord nor
Main Landlord shall be entitled to any fee but, Tenant shall
reimburse Landlord for its reasonable out-of-pocket costs and
expenses in connection with its supervision of only the
structural portions of the Alterations.
(c) All work of the nature herein contemplated shall
be at Tenant's expense, and shall comply with all insurance
requirements and with all ordinances and regulations of the City
of Chicago or any department or agency thereof, and with the
requirements of all statutes and regulations of the State of
Illinois or of any department or agency thereof. All work done
by Tenant or its contractors pursuant hereto shall be done in a
first-class workmanlike manner, using only premium grades of
materials at least equal to the building standards described on
Attachment A to the Workletter of the Main Lease and shall comply
with all insurance requirements and all applicable laws and
ordinances and rules and regulations of governmental departments
or agencies and the Rules and Regulations. Tenant shall obtain
all appropriate insurance or cause its contractors to carry such
insurance. Tenant shall defend and hold Landlord, Main Landlord,
their agents and employees harmless from all costs, damages,
liens and expenses related to such work.
12. Assignment and Subletting.
(a) Except as hereinafter provided, Tenant shall not,
without the prior written consent of Landlord and Main Landlord
(to the extent Main Landlord's consent is required under the Main
Lease) in each instance, either prior or subsequent to the
commencement of the Term, (i) assign, transfer, mortgage, pledge,
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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. 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. The foregoing provisions shall
apply to any permitted assignee or subtenant of Tenant
(including, without limitation, any Permitted Transferee).
(b) Without thereby limiting the generality of the
foregoing provisions of this Section 12, Tenant expressly
covenants and agrees not to enter into any lease, sublease,
license, concession or other agreement for use, occupancy or
utilization of the Premises which provides for rental or other
payment for such use, occupancy or utilization based in whole or
in part on the net income or profits derived by any person from
the property leased, used, occupied or utilized (other than an
amount based on a fixed percentage or percentages of receipts or
sales), and that any such purported lease, sublease, license,
concession or other agreement shall be absolutely void and
ineffective as a conveyance of any right or interest in the
possession, use, occupancy or utilization of any part of the
Premises.
(c) Consent by Landlord to any assignment, subletting,
use or occupancy, or transfer or assignment, subletting or
transfer by Tenant which is permitted hereunder without
Landlord's consent, shall not 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.
(d) Tenant shall, by notice in writing
("Assignment/Sublease Notice"), advise Landlord of its intention
to assign this Lease or sublet any part or all of the Premises.
Landlord will not unreasonably withhold or delay its consent to
Tenant's assignment of this Lease or subletting of the space
covered by its Assignment/Sublease Notice. Landlord shall not be
deemed to have unreasonably withheld its consent to a sublease of
part or all of the Premises or an assignment of this Lease if its
consent is withheld because: (i) Tenant is then in default
hereunder (for purposes of this Section 12, "default" shall mean
either (x) a material default which is not cured or (y) a
Default); (ii) the proposed use of the Premises by the subtenant
or assignee does not conform with the use set forth in Section 4
hereof; (iii) in the reasonable judgment of Landlord, the
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proposed subtenant or assignee is of a character or is engaged in
a business which would be deleterious to the reputation of the
Building as a first-class non-institutionally owned office
building; (iv) the proposed use by the subtenant or assignee is
prohibited by the Chicago, Illinois zoning ordinance; (v) the
proposed use by the subtenant or assignee is not consistent with
first-class non-institutionally owned office buildings in the
central business district area of Chicago, Illinois; (vi) the
proposed use by the subtenant or assignee involves the sale of
food or liquor for consumption on the Premises by other than
employees or guests; (vii) the proposed use by the subtenant or
assignee is an amusement establishment or a "sexually-oriented
business establishment"; (viii) the proposed use by the subtenant
or assignee involves increases in pedestrian traffic through the
common areas of the Building to the extent that a material
increase in security or janitorial service is necessary; (ix)
Main Landlord has withheld its consent to Tenant's proposed
assignment of this Lease or subletting of the space covered by
the notice (to the extent such consent is required under the Main
Lease); or (x) the proposed use by the subtenant or assignee is
for the provision, sale, lease or manufacture of (1)
telecommunication equipment or services, (2) data processing
equipment or services or (3) typewriting equipment; 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 other reasons for reasonably withholding
consent, whether similar or dissimilar to the foregoing examples.
Tenant shall furnish Landlord with copies of all documents
relating to any such sublease or assignment including financial
statements of the assignee or subtenant if requested by Landlord.
(e) Tenant shall remain obligated under this Lease in
the event of any sublease or assignment; provided, however,
Tenant shall be released from liability hereunder in the event of
an assignment of all of its right, title and interest in this
Lease to a Permitted Transferee in accordance with Section 12(f)
below. Each such sublease or assignment shall contain a covenant
by the sublessee or assignee to comply with the terms of this
Lease and the Main Lease insofar as they relate to such sublessee
or assignee.
(f) Notwithstanding the foregoing provisions, Landlord
agrees that any assignment of this Lease, once or successively,
to an entity as a result of a merger, consolidation or sale of
all or substantially all of the assets of Tenant shall not
require Landlord's consent, provided that: (i) such entity,
immediately following such merger, consolidation or sale, has
total assets of not less than Four Hundred Million and 00/100
Dollars ($400,000,000.00), (ii) such entity, immediately
following such merger, consolidation or sale, has a Net Worth (as
herein defined), reasonably determined by Landlord, which is
equal to or in excess of One Hundred Forty Million and 00/100
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Dollars ($140,000,000.00), and (iii) the conditions specifically
set forth in Section 12(d)(i), (ii), (iv), (v), (vi), (vii) and
(x) are satisfied (such entity herein called a "Permitted
Transferee"). The phrase "Net Worth", as used herein, shall mean
total assets minus total liabilities as determined in accordance
with generally accepted accounting principles. Such Permitted
Transferee shall be subject to all of the terms and conditions of
this Lease and shall in writing agree to assume and to comply
with the terms of this Lease. At least thirty (30) days prior to
the effective date of any assignment to a Permitted Transferee,
Tenant shall give Landlord and Main Landlord notice of the
identity of such Permitted Transferee and evidence, reasonably
satisfactory to Landlord, of the total assets and Net Worth of
such Permitted Transferee.
(g) If Tenant shall sublet the Premises or any part
thereof in accordance with the terms and provisions of this Lease
at a Net Rental Rate (as hereinafter defined) in excess of the
Rent due hereunder ("Excess Net Rent"), then Tenant shall be
entitled, as long as Tenant is not in Default hereunder, to
retain such Excess Net Rent. Upon and during the continuance of
a Default hereunder by Tenant, any and all Excess Net Rent
collected shall immediately become the property of and be payable
to the Landlord. The phrase "Net Rental Rate" shall mean any and
all rent and other consideration paid or payable by the
applicable subtenant after reimbursement to the Tenant for any
reasonable and out-of-pocket costs and expenses incurred by the
Tenant in connection with such subletting for: (a) tenant
improvements, and (b) leasing commissions.
(h) Without in any way limiting the foregoing
provisions of this Section 12, the Tenant agrees that, in
connection with any transfer by Tenant of all or substantially
all of the assets of Tenant to another entity, Tenant shall
transfer to such entity, and such entity shall assume, all of
Tenant's right, title and interest in this Lease. Any transfer
of all or substantially all of the assets of Tenant without a
corresponding transfer to such entity, and the assumption by such
entity, of this Lease shall be deemed an assignment of this Lease
and shall be subject to all of the provisions of this Section 12,
including the requirement, if any, that Tenant obtain Landlord's
prior written consent thereto.
13. Damage or Destruction by Casualty.
(a)(i) If the Premises or any part of the Building or
machinery or equipment used in operation of the Building 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, then Landlord shall proceed to cause the
Main Landlord to repair and restore the same with reasonable
promptness to the extent the Main Landlord is obligated to do so
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in accordance with, and subject to, the terms and provisions of
the Main Lease, subject to Force Majeure and reasonable delays
for insurance adjustment. Notwithstanding the foregoing, if the
Premises or the portion of the Building so damaged which renders
the Premises unusable are not repaired or restored by the Main
Landlord as aforesaid within two hundred eighty (280) days from
the date of damage, then, notwithstanding anything contained
herein to the contrary, Tenant shall have the right to terminate
this Lease, by written notice to the Landlord not later than
twenty (20) days after the expiration of said two hundred eighty
(280) day period but in any event prior to substantial completion
of such repair or restoration work. Such termination shall be
effective as of the date of such notice. Rent shall abate from
the date of such damage.
(ii) If any such damage renders all or a substantial
portion of the Premises or the Building untenantable, Landlord
shall, with reasonable promptness after the occurrence of such
damage, estimate the length of time that will be required to
substantially complete such repair and restoration of such damage
and shall, by written notice, advise Tenant of such estimate;
provided, however, such estimate shall be based upon Main
Landlord's estimate delivered pursuant to Section 13 of the Main
Lease. If it is so estimated that the amount of time required to
substantially complete such repair and restoration will exceed
two hundred eighty (280) days from the date such damage occurred,
then either Landlord or Tenant 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 ten (10) 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, or the Main Lease is terminated pursuant to
Section 13 of the Main Lease, Landlord shall proceed with
reasonable promptness to cause the Main Landlord to repair and
restore the Premises to the extent the Main Landlord is obligated
to do so in accordance with, and subject to, the terms and
provisions of the Main Lease, subject to reasonable delays for
insurance adjustments and Force Majeure, 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 (except as hereinafter provided) if such
repairs and restoration are not in fact completed within the time
period estimated by Landlord, as aforesaid, or within said two
hundred eighty (280) days so long as Landlord or Main Landlord
shall proceed with reasonable promptness and due diligence.
Notwithstanding anything contained herein to the contrary, if the
Premises are not repaired or restored as aforesaid within three
hundred sixty (360) days after the date of such fire or other
casualty, then Tenant may terminate this Lease, effective as of
the date of such fire or other casualty, by written notice to
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Landlord not later than twenty (20) days after the expiration of
said three hundred sixty (360) days, but prior to substantial
completion of repair or restoration. Notwithstanding anything to
the contrary herein set forth, (a) Landlord shall have no duty
pursuant to this Section 13 to repair or restore (or to cause the
Main Landlord to repair and restore) any portion of the Premises
Restoration Work (as hereinafter defined), (b) Tenant shall not
have the right to terminate this Lease pursuant to this
Section 13 if the damage or destruction was caused by the
neglect, intentional act or omission of Tenant, its agents or
employees, and (c) in the event Landlord elects to terminate this
Lease pursuant to Section 13(ii) above, or the Main Lease (in its
capacity as a tenant thereunder) pursuant to Section 13 thereof,
then, concurrently with the exercise by Landlord of its
termination right under the Main Lease or this Lease (as the case
may be), and provided that: (1) Tenant is not in Default
hereunder (either at the time of the fire or other casualty or at
the time Landlord elects to terminate as aforesaid), and (2) the
fire or casualty giving rise to the termination of this Lease was
not caused by the neglect, intentional act or omission of Tenant,
its agents or employees, Landlord shall pay to Tenant, in a lump
sum, an amount equal to the amount, if any, by which: (A) the
most recent determination of the Fair Market Rent (as defined and
determined in accordance with Section 43 hereof) for the Rentable
Area of the Premises for the remainder of the Term of this Lease
(not including any Option Terms) discounted to present value on
the basis of an eight percent (8%) per annum discount, exceeds
(B) the Base Rent under this Lease for the remainder of the Term
of this Lease (not including any Option Terms) discounted to
present value on the basis of an eight percent (8%) per annum
discount (herein referred to as the "Casualty Termination
Payment"); provided, however, in no event will the Casualty
Termination Payment exceed the following limits: if the
termination occurs anytime during the (i) period from the date
hereof through and including the first Lease Year =
$15,000,000.00, (ii) second Lease Year = $13,000,000.00, (iii)
third Lease Year = $11,000,000.00, (iv) fourth Lease Year =
$9,000,000.00, (v) fifth Lease Year = $7,000,000.00, (vi) sixth
Lease Year = $5,000,000.00, (vii) seventh Lease Year =
$3,000,000.00, and (viii) eighth Lease Year through and including
the end of the Term = $0.00. The Casualty Termination Payment
shall be due and payable by Landlord to Tenant as aforesaid
within twenty (20) business days after the election by Landlord
to terminate this Lease or the Main Lease as aforesaid (as the
case may be).
(b) In the event any such fire or casualty damage
renders the Premises untenantable and if this Lease shall not be
terminated pursuant to the foregoing provisions of this Section
13 (or the Main Lease shall not be terminated pursuant to Section
13 of the Main Lease) by reason of such damage, then Rent shall
abate during the period beginning with the date of such damage
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and ending with the Main Landlord Completion Date (as defined
below), subject to an additional abatement period as set forth in
Section 13(c) below. Such abatement shall be in an amount
bearing the same ratio to the total amount of Rent for such
period as the portion of the Premises rendered untenantable,
unfit or inaccessible for use by Tenant with respect to each
floor of the Premises bears to the entire Premises. Rent shall
not recommence as to the damaged portion of such floor until the
Main Landlord Completion Date for such damaged portion (subject
to an additional abatement period as set forth in Section 13(c)
below); provided, however, that Landlord shall not be responsible
for, and rental shall not abate during any delay in substantial
completion caused by Tenant or its agents or employees. In the
event of termination of this Lease pursuant to this Section 13,
Rent shall be apportioned on a per diem basis and be paid to the
date of the fire or casualty.
(c) In the event of any such fire or other casualty,
and if this Lease is not terminated pursuant to the foregoing
provisions, then, commencing on the date the Main Landlord
substantially completes ("Main Landlord Completion Date") its
repair and restoration obligations pursuant to, and in accordance
with, the Main Lease ("Main Landlord's Restoration Work"), Tenant
shall repair and restore any and all alterations, additions and
improvements required to return the Premises to their condition
prior to the fire or other casualty (with such modifications or
alterations as Tenant may desire to make subject to, and in
accordance with, Section 11 hereof but excluding the need to
restore any specialized communication equipment, alternative
power source equipment and any other machinery or equipment used
in connection with Tenant's business) which are not included in
the Main Landlord's Restoration Work ("Premises Restoration
Work"). Tenant shall be entitled to an additional abatement of
Rent hereunder for a period equal to the lesser of: (i) one
hundred and five (105) days after the Main Landlord Completion
Date, or (ii) the number of days after the Main Landlord
Completion Date reasonably necessary to substantially complete
the Premises Restoration Work (as reasonably determined by the
Tenant's Architect (as hereinafter defined)). Landlord agrees to
deposit into an escrow at Chicago Title and Trust Company
(pursuant to an escrow agreement mutually satisfactory to
Landlord and Tenant) ("Restoration Escrow") the amount of any
insurance proceeds received by Landlord to the extent such
proceeds relate to the Landlord Restoration Obligation (as
hereinafter defined) (as reasonably determined by the Tenant's
Architect); provided, however, to the extent such proceeds are
insufficient, in the reasonable opinion of the Tenant's
Architect, to complete the Landlord Restoration Obligation, the
Landlord agrees to deposit the amount of the deficiency into the
Restoration Escrow (the amounts deposited in the Restoration
Escrow by Landlord pursuant to this sentence are herein referred
to as the "Landlord Restoration Amount"). In the event Landlord
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disputes the amount to be paid by the Landlord as determined by
the Tenant's Architect pursuant to the foregoing sentence, the
terms and provisions of subsection 13(e) below shall resolve said
dispute. The cost of the Restoration Escrow shall be paid for by
Landlord. Interest shall accrue on the Landlord Restoration
Amount for the benefit of Landlord. Tenant shall be entitled to
disbursements from the Restoration Escrow in an amount equal to
the amount actually spent by Tenant in completing the Landlord
Restoration Obligation, subject to, and in accordance with, the
following terms and conditions: (1) Tenant shall be entitled to
no more than two (2) disbursements from the Restoration Escrow:
(A) the initial disbursement ("Initial Disbursement") shall occur
at the time when the Tenant's Architect issues a certificate in
favor of Landlord and Tenant that the Premises Restoration Work
has been at least fifty percent (50%) completed in accordance
with the plans and specifications approved by Landlord ("Initial
Certificate") which Initial Disbursement shall be in an amount
not to exceed fifty percent (50%) of the total amount allocated
to complete the Landlord Restoration Obligation, and (B) the
final disbursement ("Final Disbursement") shall occur at the time
when the Tenant's Architect issues a certificate in favor of
Landlord and Tenant that the Premises Restoration Work has been
substantially completed in accordance with the plans and
specifications approved by Landlord (other than minor punchlist
items) ("Final Certificate"), and (2) prior to both the Initial
Disbursement and Final Disbursement (collectively, the
"Disbursements"), Tenant shall have delivered to Landlord (in
form and substance reasonably satisfactory to Landlord) the
following: (A) the Initial Certificate or Final Certificate (as
the case may be), (B) a certificate from the Tenant's Architect
that the amount of the Disbursement requested by the Tenant from
the Restoration Escrow is attributable solely to the Landlord
Restoration Obligation (provided that in the event Landlord
disputes the amount set forth in said certificate, the terms and
provisions of subsection 13(e) below shall resolve said dispute),
(C) mechanic's lien waivers, contractor's statements, a photocopy
of the invoices and other back-up information reasonably
requested by Landlord (to the extent such other back-up
information is maintained and available to Tenant) in support of
the amount requested by Tenant in connection with the applicable
Disbursement, and (D) any of the "Disbursement Documentation"
described in Section 6(b) of the Workletter. In the event the
Landlord Restoration Amount is insufficient to pay in full the
amount required to reimburse the Tenant for the completion of the
Landlord Restoration Obligation, and provided that the Landlord
has received the certificates and other information set forth
above, the Landlord shall promptly pay to Tenant the amount of
the deficiency. In the event, after reimbursement to Tenant of
the amount required to fully pay the Landlord Restoration
Obligation as aforesaid, there remains any Landlord Restoration
Amount in the Restoration Escrow, the amount so remaining shall
be promptly returned to Landlord. The term "Landlord Restoration
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Obligation" as used herein shall mean that portion of the
Premises Restoration Work which is attributable to the repair and
restoration of the Premises to substantially the same condition
which existed prior to the applicable fire or casualty, but
specifically excluding the following: (y) any alterations,
improvements or other work done by or on behalf of Tenant
including, without limitation, pursuant to Section 11 hereof or
the Tenant Work as reflected on the Plans (as defined in the
Workletter) and including, without limitation, the repair and
restoration of any portion of the Premises which has been
demolished by Tenant, and (z) the Main Landlord's Restoration
Work. The parties hereto acknowledge that Exhibit A attached
hereto accurately describes the floor plan and layout of the
Premises as of the date hereof. Tenant agrees to proceed
diligently in completing any and all Premises Restoration Work
and shall furnish to Landlord (and Main Landlord, to the extent
required under the Main Lease), for their review and reasonable
approval, any and all plans and specifications in connection with
the Premises Restoration Work. Unless Landlord shall furnish
Tenant written notice of its disapproval specifying the
disapproved items and the corrective action needed for such
Landlord approval within twenty (20) business days from
Landlord's receipt of the plans and specifications for such
Premises Restoration Work, such plans and specifications shall be
deemed approved by Landlord. In addition, any and all
contractors performing all or any part of the Premises
Restoration Work shall be subject to the prior written approval
of Landlord, not to be unreasonably withheld, which approval
shall be deemed given if not objected to within twenty (20)
business days from Landlord's receipt of the contractor listing.
In addition to the one hundred and five (105) day abatement
period set forth in this Section 13(c) for the completion of the
Premises Restoration Work, Tenant shall be given a day-for-day
abatement of Rent for each day beyond the aforesaid twenty (20)
business day period that Landlord unreasonably withholds its
consent to any contractor submitted to Landlord for approval by
Tenant.
(d) Notwithstanding the foregoing, and subject to the
terms and provisions below, in the event any fire or casualty
damage which renders the Premises untenantable occurs during the
last Lease Year of this Lease, the Tenant shall have the right to
terminate this Lease by giving Landlord written notice thereof
within thirty (30) days after the date of any such fire or
casualty damage; provided, however, the foregoing provisions of
this Section 13(d) shall not apply in the event: (i) the damage
or destruction was caused by the neglect, intentional act or
omission of Tenant, its agents or employees, or (ii) Tenant has
exercised its Extension Option as set forth in Section 42
hereof and/or its Direct Lease Option as set forth in Section 2.3
of the Direct Lease Option and Consent Agreement.
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(e) Any dispute specifically required by the terms of this
Lease to be resolved by the terms and provisions of this Section
13(e), shall be resolved as follows: Each of Landlord and Tenant
shall select an architect (which in the case of Tenant may be Tenant's
Architect) who is licensed in the State of Illinois, which selections
shall be made within ten (10) days of notice given by either party
that the dispute be resolved in accordance with this Section 13(e).
The two (2) architects selected by Landlord and Tenant as aforesaid
shall, within ten (10) days of their selection, select a third
architect who is licensed in the State of Illinois. The matter in
dispute shall then be submitted to the aforesaid panel of three (3)
architects. If the matter in dispute involves the determination of a
dollar amount, each architect shall, within ten (10) days of their
selection, render its decision of such dollar amount. The average of
the determinations of the three (3) architects as aforesaid shall be
the dollar amount for the purposes hereof, but in no event more than
the amount initially determined by the Tenant's Architect. In the
event Landlord is disputing only a portion of the amounts determined
by Tenant's Architect, the amounts which are not in dispute shall be
acceptable for the purposes set forth herein. With respect to any
amounts determined by Tenant's Architect which are disputed by
Landlord as aforesaid, in the event the determination made by the
three (3) architect procedure described in this Section 13(e) equals
that of the determination initially made by the Tenant's Architect,
and Tenant has pursuant to the terms hereof disbursed such amount and
is entitled to reimbursement of such amounts from Landlord pursuant to
the terms hereof, Landlord agrees to pay interest to Tenant on the
amounts so disbursed at the rate set forth in Section 26(h) hereof
from the date of the disbursement by Tenant to the date of the
reimbursement by Landlord as aforesaid.
(f) Notwithstanding the foregoing, in the event of any
fire or other casualty occurring on or before the Possession
Date, the terms and provisions of Section 25(b)(iii) shall apply
to the extent of any inconsistencies with this Section 13.
14. Eminent Domain. If the entire Building or a
substantial part thereof, 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 purposes, the Term of this Lease shall end upon and
not before the earlier of the date when the possession of the
part so taken shall be required for such use or purpose or the
effective date of the taking. If (i) any part of the Real
Property is taken such that reasonable access to the Premises for
the conduct of Tenant's business is no longer possible, or (ii)
there is a taking of a portion of the Premises (but not
substantially all) and Tenant determines that, in its reasonable
judgment, continued occupancy of the balance of the Premises
would not be sufficient for the beneficial conduct of Tenant's
business therein, then Tenant shall have the right to terminate
this Lease by written notice to Landlord no later than twenty
(20) days after the effective date of such taking, such
termination to be effective upon service of such notice. If any
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condemnation proceeding shall be instituted in which it is sought
to take or damage any part of the Building, the taking of which
would, in Landlord's reasonable 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 substantially remodel the Building to conform to the
taking, damage or changed grade, and provided further that Main
Landlord has terminated leases on at least twenty-five percent
(25%) of the Rentable Area of the Building (excluding the
Premises), then Landlord shall have the right to terminate this
Lease upon not less than sixty (60) days' written notice prior to
the date of termination designated in the notice. In any of the
events above referred to, Rent at the then current rate shall be
apportioned as of the date of the termination. In the event of a
taking of part (but not substantially all) of the Premises and
neither Landlord nor Tenant has exercised its termination rights
(and the Main Lease has not been terminated pursuant to Section
14 thereof), Rent shall abate in proportion to the area of the
Premises so taken from and after the effective date of the
taking. Further, in such event, Landlord shall promptly cause
the Main Landlord to repair and restore the remaining portion of
the Premises to an architectural whole in accordance with, and
subject to, the terms and provisions of the Main Lease. In the
event Landlord fails to cause the Main Landlord to repair and
restore the remaining portion of the Premises as aforesaid within
three hundred sixty (360) days after such taking, then Tenant may
terminate this Lease by written notice to Landlord within twenty
(20) days after the expiration of such three hundred sixty (360)
day period, but prior to substantial completion of the repair or
restoration work.
Notwithstanding the termination of this Lease as
aforesaid, Landlord and Tenant hereby agree that Tenant shall not
have a right to share in the condemnation award; provided,
however, in the event Landlord receives any portion of the Award
Balance (as defined in the Main Lease), Tenant shall be entitled
to receive a percentage of the Award Balance recovered by
Landlord equal to the Rentable Area within the Premises affected
by such eminent domain proceeding divided by the total Rentable
Area within the Main Premises affected by such eminent domain
proceeding.
If the use and occupancy of the whole or any material
part of the Premises is temporarily taken for a public or quasi-
public use for a period in excess of twelve (12) months, then at
the Tenant's option to be exercised in writing and delivered to
the Landlord not later than forty (40) days after the date the
Tenant is notified in writing of such taking, this Lease and the
Term remaining hereunder shall terminate as of the date
possession is taken. If this Lease remains in effect, the Tenant
shall be entitled to a proportionate abatement of Rent.
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15. Default: Landlord's Rights and Remedies.
(a) The occurrence of any one or more of the following
matters constitutes a default by Tenant under this Lease
("Default"):
(i) Failure by Tenant to pay any past due Rent within
five (5) days after written notice thereof from Landlord to
Tenant that same is due hereunder; provided, however, that
if Tenant fails to pay the Rent when due more than three (3)
times in one calendar year, then for the balance of such
year there shall be no five (5) day grace period;
(ii) Failure by Tenant to pay, within five (5) days
after written notice thereof from Landlord to Tenant, any
other past due moneys required to be paid by Tenant under
this Lease unless a longer period is specifically stated
herein;
(iii) Failure by Tenant to cure an unpermitted
assignment or subletting as set forth in Section 12 within
twenty (20) days after written notice thereof from Landlord
to Tenant;
(iv) Failure by Tenant to cure forthwith, immediately
after receipt of written notice from Landlord, any hazardous
condition which Tenant has created in violation of law or of
this Lease;
(v) Failure by Tenant to observe or perform any other
non-monetary covenant, agreement, condition or provision of
this Lease, if such failure shall continue for twenty (20)
days after written notice thereof from Landlord to Tenant,
except that if such default (other than defaults which
create situations dangerous to persons or property) cannot
be cured within said twenty (20) day period, this period
shall be extended, provided that Tenant commences to cure
such default within the twenty (20) day period and proceeds
diligently thereafter to effect such cure ("Extended Cure
Period"); provided, however, Landlord may terminate such
Extended Cure Period on written notice to Tenant at any time
after expiration of eighty (80) days from the first notice
of default sent to Tenant if any of the following have
occurred due to Tenant's default: (1) Main Landlord is in
default under any First Mortgage or any Second Mortgage (as
such terms are defined in the Main Lease), (2) Main Landlord
is in default under any other space lease in the Building or
Landlord is in default under any other sublease of the Main
Premises, (3) such default materially and adversely affects
Main Landlord's ownership, maintenance, management, repair
or operation of the Building or Landlord's leasehold
interest in the Main Premises, or (4) Landlord is in default
under the Main Lease or any Leasehold Mortgage (as
hereinafter defined);
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(vi) The levy upon, either under execution or the
attachment by legal process of, the leasehold interest of
Tenant, or the filing or creation of a lien in respect of
such leasehold interest, except as may be permitted herein,
which lien shall not be released or discharged within sixty
(60) days from the date of such filing;
(vii) The Tenant becomes insolvent or bankrupt or makes
an assignment for the benefit of creditors, or applies for
or consents to the appointment of a trustee or receiver for
the Tenant or for the major part of its property;
(viii) A trustee or receiver is appointed for the
Tenant or for the major part of its property and is not
discharged within sixty (60) days after such appointment; or
(ix) Bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings
for relief under any bankruptcy law, or similar law for the
relief of debtors, are instituted (A) by the Tenant or (B)
against the Tenant and are allowed against it or are
consented to by it or are not dismissed within sixty (60)
days after such institution.
(b) 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 the Landlord of any other right or remedy
allowed it by law.
(i) Landlord may terminate this Lease by giving to
Tenant ten (10) days, prior written notice of the Landlord's
election to do so, in which event the Term of this Lease
shall end, and all right, title and interest of the Tenant
hereunder shall expire, on the date stated in such notice;
(ii) Landlord may terminate the right of the Tenant to
possession of the Premises without terminating this Lease by
giving Tenant ten (10) days, prior written notice that
Tenant's right of possession shall end on the date stated in
such notice, whereupon the right of the 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 the 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 recovery of all moneys
due or to become due from the Tenant under any of the
provisions of this Lease.
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(c) If Landlord exercises either of the remedies
provided for in subparagraphs (i) and (ii) of the foregoing
Section 15(b), Tenant shall surrender possession and vacate the
Premises and immediately deliver possession thereof to the
Landlord, and Landlord may then or at any time thereafter re-
enter and take complete and peaceful possession of the Premises,
with process of law, and Landlord may remove all occupants and
property therefrom.
(d) If Landlord terminates the right of Tenant to
possession of the Premises without terminating this Lease, 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. Landlord shall have the right, from time to time,
to recover from the Tenant, and the Tenant shall remain liable
for all Additional Rent and any other sums thereafter 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, the Landlord shall comply with all
requirements of the law with respect to mitigation of damages in
reletting of the Premises or any part thereof for the account of
the 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
the Landlord in the Landlord's reasonable discretion shall
determine, and the Landlord shall not unreasonably withhold its
consent to any assignee or subtenant proffered by Tenant,
provided such assignee or subtenant is financially capable of
satisfying Tenant's obligations hereunder and would not otherwise
be objectionable under Section 12(d). Also in any such case, the
Landlord may make reasonable repairs, alterations and additions
in or to the Premises and redecorate the same to the extent
deemed by the Landlord necessary or desirable and, in connection
therewith, change the locks to the Premises and the Tenant shall
upon receipt of an invoice pay the cost thereof to the extent set
forth in the next sentence together with the Landlord's
reasonable expenses of reletting. Tenant shall be required to
pay for such repairs, alterations, additions and redecoration
only to the extent the cost of the same does not exceed the cost
of demolition plus the cost of building standard improvements in
effect at such time, and shall be obligated to pay all of
Landlord's expenses of re-entry and the cost of reletting,
including, but not limited to, brokerage commissions. Landlord
may collect the rents from any such reletting and apply the same
to the payment of Rent herein provided to be paid by the Tenant,
and 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, but 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; provided that in no
event shall Tenant be entitled to a credit on its indebtedness to
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Landlord in excess of the aggregate sum (including Base Rent and
Additional Rent) 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 re-entry or repossession, repairs,
alterations and additions, or reletting shall be construed as an
eviction or ouster of the Tenant or as an election on Landlord's
part to terminate this Lease, unless a written notice of such
intention be given to Tenant, or shall operate to release the
Tenant in whole or in part from any of the Tenant's obligations
hereunder, and the Landlord may, at any time and from time to
time, sue and recover judgment for any deficiencies from time to
time remaining after the application from time to time of the
proceeds of any such reletting.
(e) In the event of the termination of this Lease by
Landlord as provided for by subparagraph (i) of Section 15(b)
Landlord shall be entitled to recover from Tenant all the fixed
dollar amounts of Rent accrued and unpaid for the period up to
and including such termination date, as well as all other
additional sums payable by the Tenant, or for which Tenant is
liable or in respect of 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 reasonable 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 (x) the unamortized
portion of Landlord's Allowance (as defined in the Workletter
attached hereto as Exhibit "B" and made a part hereof), (y) the
aggregate sum which, at the time of such termination, represents
the excess, if any, of the present value of the aggregate Rent at
the same annual rate for the remainder of the Term as then in
effect pursuant to the applicable provisions of Sections 1 and 2
of this Lease, 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 an
8% per annum discount from the respective dates upon which such
rentals would have been payable hereunder had this Lease not been
terminated, and (z) any damages in addition thereto, including,
without limitation, reasonable attorneys' fees and court costs,
which Landlord shall have sustained by reason of the breach of
any of the covenants of this Lease other than for the payment of
Rent, and any damages suffered by Landlord under the Main Lease
as a result of such default by Tenant.
(f) All property owned by Tenant and removed from the
Premises by Landlord pursuant to any provisions of this Lease or
of law may be handled, removed or stored by the Landlord at the
cost and expense of the Tenant, and the Landlord shall in no
event be responsible for the value, preservation or safekeeping
thereof. Tenant shall pay Landlord for all expenses incurred by
Landlord in such removal and storage charges against such
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property so long as the same shall be 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, shall, at
Landlord's option, (i) be conclusively deemed to have been
conveyed by Tenant to Landlord by bill of sale without further
payment or credit by Landlord to Tenant; or (ii) be removed by
Landlord at Tenant's sole expense.
(g) Tenant shall pay all of Landlord's costs, charges
and expenses, including court costs and attorneys' fees,
reasonably incurred in enforcing Tenant's obligations under this
Lease or incurred by Landlord in any litigation, negotiation or
transactions in which Tenant causes the Landlord, without
Landlord's fault, to become involved or concerned.
(h) In the event that Tenant shall be adjudged
bankrupt, or a trustee in bankruptcy shall be appointed for
Tenant, the provisions of Section 29 hereof shall apply.
16. Mortgagee Protection. Tenant agrees to give any
holder of any First Mortgage, the holder of any Second Mortgage
and the holder of any Leasehold Mortgage (as defined in the Main
Lease) 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 of
the address of such First Mortgage holder, such Second Mortgage
holder or Leasehold Mortgage holder. Tenant further agrees that
if Landlord shall have failed to cure such default within the
applicable grace period, or if no grace period is specified,
within thirty (30) 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 thirty (30) days and is diligently pursuing the
remedies or steps necessary to cure or correct such default, but
in no event beyond sixty (60) days after such notice), then the
holder of the First Mortgage and/or the holder of any Leasehold
Mortgage shall have sixty (60) days beyond the initial thirty
(30) day period within which to cure or correct such default if,
in their sole and absolute discretion, they elect to do so (which
sixty (60) day period as to the holder of the First Mortgage and
Leasehold Mortgage shall run concurrently). Notwithstanding the
foregoing, provided that Tenant continues to have effective use
and occupancy of the Premises for the normal operation of
Tenant's business, the holder of the First Mortgage shall have
sixty (60) days after the date upon which it obtains possession
of the Building (and the holder of any Leasehold Mortgage shall
have sixty (60) days after which it obtains possession of the
Premises) to cure or correct such default, if such default is of
such a nature that it cannot be cured by the holder of the First
Mortgage and/or the holder of any Leasehold Mortgage until it
obtains such possession and such holder of the First Mortgage
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and/or the holder of any Leasehold Mortgage diligently proceeds
to pursue its remedies.
17. Quiet Enjoyment. Upon payment by the Tenant of
the Rent (including Base Rent and Additional Rent), and upon the
observance and performance of all the covenants, terms and
conditions on Tenant's part to be observed and performed, and
further subject to the provisions of Section 15 hereof, Tenant
shall peaceably and quietly hold and enjoy the Premises for the
Term hereby demised without hindrance or interruption by Landlord
or any other person or persons lawfully or equitably claiming by,
through or under the Landlord, subject nevertheless, to the terms
and conditions of this Lease and the Main Lease.
18. Subrogation and Insurance.
(a) Landlord and Tenant agree to use their best
efforts (including payment of extra premiums of a reasonable
amount) to have all fire and extended coverage and material
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 said policy or the right of the
insured to recover thereunder and, providing further, that the
insurer waives all rights of subrogation which such insurer might
have against the other party.
The Landlord and Tenant each hereby waive its right of
recovery against the other and each releases the other from any
claim arising out of loss, damage or destruction to the Building,
Premises or contents thereon or therein, to the extent its
property is covered by a valid policy of insurance, and to the
extent of recovery collectible under such policy (or is otherwise
self insured as provided and permitted herein), whether or not
such loss, damage or destruction may be attributable to the
negligence of either party or its respective agent, visitor,
contractor, servant or employee.
(b) Tenant shall carry insurance during the entire
Term hereof (including any extensions) insuring Tenant and
Landlord, Main Landlord, Landlord's or Main Landlord's agents and
beneficiaries and other parties, reasonably requested in writing
by Landlord, as their interests may appear, with terms, coverages
and in companies reasonably satisfactory to Landlord and with
such commercially reasonable increases in limits as Landlord may
from time to time request, but initially Tenant shall maintain
the following coverages in the following amounts:
(i) comprehensive general public liability insurance,
including contractual liability, in an amount not less than
$10,000,000.00 combined single limit or such other type of
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liability coverage customarily carried by tenants in first
class office buildings.
(ii) insurance against fire, sprinkler leakage,
vandalism, and the extended coverage perils for the full
replacement cost of all Tenant's leasehold improvements,
plus all additions, improvements and alterations thereto,
owned or made by or on behalf of Tenant, if any, on the
Premises.
Tenant shall, prior to the commencement of the Term,
furnish to Landlord policies or certificates evidencing such
coverage, which policies or certificates shall state that such
insurance coverage may not be reduced, cancelled or not renewed
without at least thirty (30) days prior written notice to
Landlord and Tenant (unless such cancellation is due to non-
payment of premium, and in that case only ten (10) days prior
written notice shall be sufficient).
Landlord agrees to cause Main Landlord to maintain
during the Term hereof (including any extensions), and subject
to, and in accordance with, the terms and provisions of the Main
Lease: (i) all risk insurance based on full replacement cost of
the Building, and (ii) comprehensive general liability insurance,
including contractual liability insuring Main Landlord's
obligations under the Main Lease, in an amount not less than
$25,000,000.00 combined single limit, or such other type of
liability coverage customarily carried by landlords of first
class office buildings.
(c) Tenant shall comply with all applicable laws and
ordinances, all orders and decrees of court and all requirements
of other governmental authority, and shall not directly or
indirectly make any use of the Premises which (i) is thereby
prohibited or dangerous to person or property or, (ii)
jeopardizes any insurance coverage, or (iii) increases the cost
of insurance or requires additional insurance coverage, unless
Tenant agrees to pay such increased premium.
(d)(i) Notwithstanding anything contained herein to the
contrary, Landlord agrees that Tenant (only for so long as Tenant
is the Chicago and North Western Transportation Company, a
Delaware corporation or any company resulting from a change of
name without any material change in assets) may self-insure with
respect to all insurance required to be carried by Tenant under
this Lease. It is expressly understood and agreed that, except
with respect to a Permitted Transferee as set forth in subsection
(ii) below, the provisions of this Section 18(d) shall not apply
with respect to any assignee or subtenant of Tenant.
(ii) Notwithstanding the provisions of subsection
18(d)(i) above, Landlord agrees that any Permitted Transferee may
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self-insure for: (A) insurance required to be carried under
subsection 18(b)(i) above in an amount not to exceed
$5,000,000.00, and (B) insurance required to be carried under
subsection 18(b)(ii) above in an amount not to exceed
$2,500,000.00, provided that such Permitted Transferee maintains
sufficient liquidity, as reasonably determined by Landlord, to
pay claims in the amount of the insurance which Tenant would
otherwise be required to maintain pursuant to Section 18(b)
hereof.
19. Nonwaiver. No waiver of any condition expressed
in this Lease shall be implied by any neglect of Landlord 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 Landlord's rights under the provisions of Section 8, it is
agreed that no receipt of 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.
20. Estoppel Certificate.
(a) Tenant agrees that from time to time upon not less
than fifteen (15) days' prior written request by Landlord, Main
Landlord, the holder of any First Mortgage, Second Mortgage,
Leasehold Mortgage or any ground lessor, Tenant (or any permitted
assignee, subtenant, licensee, concessionaire or other occupant
of the Premises claiming by, through or under Tenant) will
deliver to Landlord, Main Landlord, the holder of any First
Mortgage, Second Mortgage, Leasehold Mortgage or ground lessor
(as the case may be), a statement in writing signed by Tenant
certifying (i) that this Lease is unmodified and in full force
and effect (or if there have been modifications, that the Lease
as modified is in full force and effect and identifying the
modifications); (ii) the date upon which Tenant began paying Rent
and the dates to which the Rent and other charges have been paid;
(iii) that the Landlord is not in default under any provision of
this Lease, or, if in default, the nature thereof in detail; (iv)
that, to the best of Tenant's knowledge, 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 (or if there are any offsets or claims, the
nature and amount thereof in detail); (v) that there has been no
prepayment of Rent; (vi) that there are no actions, whether
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voluntary or otherwise, pending against Tenant under the
bankruptcy laws of the United States or any State thereof; and
(vii) such other matters as may be reasonably requested by the
Landlord, Main Landlord, holder of the First Mortgage, Second
Mortgage, Leasehold Mortgage or ground lessor. For purposes of
this subsection 20(a) only, the time period for curing a default
as set forth in subsection 15(v) shall be reduced to a fifteen
(15) day period.
(b) Landlord agrees that, from time to time upon not
less than fifteen (15) days prior written request by Tenant (but
no more often than one time in any three hundred and sixty day
period), Landlord will deliver to Tenant a statement in writing
signed by Landlord certifying (i) that this Lease is unmodified
and in full force and effect (or if there have been
modifications, that the Lease as modified is in full force and
effect and identifying the modifications); (ii) that, to the best
of Landlord's knowledge, the Tenant is not in default under any
provision of this Lease, or, if in default, the nature thereof in
detail; (iii) that there has been no prepayment of Rent; and (iv)
that there are no actions, whether voluntary or otherwise,
pending against Landlord under the bankruptcy laws of the United
States or any State thereof.
21. Tenant Authorization. Tenant represents that this
Lease has been duly authorized, executed and delivered by and on
behalf of the Tenant and constitutes the valid and binding
agreement of the Tenant in accordance with the terms hereof.
22. Landlord Authorization. Landlord represents that
this Lease has been duly authorized, executed and delivered by
and on behalf of the Landlord and constitutes the valid and
binding agreement of the Landlord in accordance with the terms
hereof.
23. Real Estate Brokers. Landlord and Tenant
represent and warrant that neither party has dealt with any
broker in connection with this Lease other than Julien J.
Studley, Inc. and Stein & Company Corporate Services, Inc. (whose
commission, if any, shall be paid by Landlord pursuant to
separate agreement) and agree to indemnify and hold harmless one
another from all damages, liability and expense (including
reasonable attorneys' fees) arising from any claims or demands of
any other broker, or brokers or finders claiming to have dealt
with such parties for any commission alleged to be due such
broker or brokers or finders in connection with the negotiation
of this Lease.
24. Notices. In every instance where it shall be
necessary or desirable for Landlord to serve any notice or demand
upon Tenant, it shall be served (x) personally or sent by United
States registered or certified mail, postage prepaid, and (y) by
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telecopy at 312/559-6018, in each case addressed, until further
notice from Tenant, to Chicago and North Western Transportation
Company, One North Western Center, 165 North Canal Street,
Chicago, Illinois 60606, Attention: Senior Vice President -
Finance and Accounting, with separate counterparts to Tenant at
the same address, Attention: Assistant Vice President - Leasing
and Office Services, and Attention: Senior Corporate Real Estate
Counsel. Mailed communications to Tenant shall be deemed to have
been served at the time that same were posted. Any such notice
or demand to be given by Tenant to Landlord shall be served (x)
personally or sent by United States registered or certified mail,
postage prepaid, and (y) by telecopy at (908) 953-9113, in each
case addressed, until further notice from Landlord (or any other
party to whom Landlord notifies Tenant to be its agent), to
Landlord with separate counterparts to AT&T Communications, Inc.,
c/o AT&T Resource Management Corporation, 222 Mt. Airy Road,
Basking Ridge, New Jersey 07920, Attention: District Manager,
Real Estate Joint Ventures, and Attention: Senior Attorney, and
Stein & Company Asset Services, Inc., Suite 3400, 227 West Monroe
Street, Chicago, Illinois 60606, Attention: Vice President/Asset
Management, and with a copy to Elizabeth K. McCloy, Esq. or
Anthony J. Aiello, Esq., Sidley & Austin, One First National
Plaza, Chicago, Illinois 60603. Mailed communications to
Landlord shall be deemed to have been served at the time that
same were posted. Notwithstanding anything contained in this
Section 24 to the contrary, unless otherwise notified in the
manner provided above, routine communications or payments may be
delivered either personally or by United States mail. Delivery
(one set only) of plans and other information pursuant to Section
11 hereof or the Workletter may be delivered personally or by
United States mail, and in the case of the Landlord, such plans
and other information shall be delivered to the office of Stein &
Company (or any other party to whom Landlord notifies Tenant to
be its agent for this purpose).
25. Delivery of Possession.
(a) Possession of the Premises shall be delivered by
Landlord to the Tenant on the Possession Date (September 1,
1995), with the Premises being in broom clean condition, but
otherwise in substantially the same condition as the Premises
were in on January 27, 1993, ordinary wear and tear excepted,
subject to the terms and provisions set forth below and the terms
and provisions of Section 3 hereof. Representatives of Landlord
and Tenant have jointly inspected the Premises and the Furniture
(as hereinafter defined) and jointly had the opportunity to
videotape (the "Videos") portions of the Premises and Furniture
to the extent allowed by Landlord, which Videos were actually
taken by a representative of Landlord on or about June 15, 1993
and are more particularly identified on Exhibit H attached
hereto. Landlord and Tenant each have a duplicate copy of the
Videos and approve of the Videos as reflecting the general
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condition of the Premises and Furniture as of June 15, 1993.
Notwithstanding the fact that the Videos were taken after January
27, 1993 and that they only cover a portion of the Premises and
Furniture, Landlord and Tenant mutually agree that (i) the Videos
are deemed to have been taken as of January 27, 1993 and (ii) are
deemed to reflect the "as-is" condition of the entire Premises
and Furniture as of January 27, 1993.
(b) Notwithstanding anything to the contrary contained
within this Lease, the following provisions of this Subsection
25(b) shall control in the event the Landlord has failed to
deliver possession of the Premises to Tenant on the Possession
Date as aforesaid:
(i) If the Landlord has failed to deliver possession
of the Premises to Tenant on the Possession Date as set forth in
Subsection 25(a) above for any reason other than a Landlord
Delivery Force Majeure Event (as defined below), time being of
the essence, then, Landlord shall have until ninety (90) days
after written notice from Tenant to Landlord ("Possession
Notice") to deliver possession as aforesaid. If, after the
expiration of the aforesaid ninety (90) day period, Landlord has
not delivered possession of the Premises to Tenant in accordance
with Subsection 25(a) above, then Tenant, as its sole and
exclusive remedy hereunder, shall have the right, upon written
notice given to Landlord on or before the fifteenth (15th) day
immediately following the expiration of the aforesaid ninety (90)
day period (hereinafter referred to as the "Exercise Date") to
either:
(A) Terminate this Lease effective as of the date
which is fifteen (15) days after the expiration of the aforesaid
ninety (90) day period, in which case this Lease shall be of no
further force and effect except that Landlord shall pay to
Tenant, within twenty (20) business days after the effective
termination date, the following amounts as liquidated damages:
(1) the sum of Two Million Five Hundred Thousand and no/100
Dollars ($2,500,000.00), and (2) any and all of Tenant's
reasonable and out-of-pocket costs and expenses actually incurred
by Tenant in connection with the negotiation and execution of
this Lease through and including September 1, 1995 (including,
without limitation, design, architectural, engineering,
contracting, legal and permit costs and expenses), provided that
Tenant furnishes Landlord with a photocopy of the invoices and
other back-up information reasonably requested by Landlord (to
the extent such other back-up information is maintained by and
available to Tenant) (collectively the foregoing amounts are
hereinafter referred to as the "Late Delivery Termination
Amount"); provided, however, it is understood and agreed that in
no event will Tenant be entitled to any recovery for loss of
profit or bargain in connection with the termination of the
Lease; or
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(B) Exercise in a reasonably diligent manner any
equitable remedies Tenant may have for the purpose of obtaining
possession of the Premises (and not for the purpose of obtaining
or seeking damages, other than damages attributable solely to the
amounts Tenant is entitled to from Landlord pursuant to, and in
accordance with, this Section 25(b)(i)(B)), time being of the
essence, including a suit or suits in equity for specific
performance, in which event: (1) the Commencement Date shall be
extended to the date which is three hundred and sixty-five (365)
days after the date that Tenant obtains possession of the
Premises or possession of the Premises are actually delivered by
Landlord to Tenant, whichever is earlier (in each case possession
to be given in accordance with Section 25(a) above) (such date
being herein referred to as the "Actual Possession Date"), (2)
Landlord shall reimburse Tenant, within twenty (20) business days
after demand therefore, and upon presentation to Landlord of a
photocopy of the invoices and other back-up information
reasonably requested by Landlord (to the extent such other back-
up information is maintained by and available to Tenant), for any
and all reasonable and out-of-pocket costs and expenses incurred
by Tenant and attributable to the failure of Landlord to deliver
possession of the Premises to Tenant on the Possession Date, time
being of the essence; provided, however, in no event shall
amounts payable by Landlord under this Subsection (2) exceed an
amount equal to $50,000.00 per calendar month on a cumulative
basis from September 1, 1995 to the Actual Possession Date (the
amounts payable under this subsection (2) being referred to
herein as the "Delay Costs"), (3) Landlord shall reimburse
Tenant, within twenty (20) business days after demand therefore,
for the amount of any Hold-over Rent (as hereinafter defined)
actually paid by Tenant for the period prior to the Actual
Possession Date, provided that Tenant furnishes Landlord with
evidence, reasonably satisfactory to Landlord, that said amounts
have actually been paid by Tenant (including, without limitation,
a photocopy of any invoices or receipts), and (4) Tenant shall be
entitled to two (2) days of free Rent after the Commencement Date
for each day between the Possession Date (September 1, 1995) and
the Actual Possession Date.
(C) Notwithstanding the provisions of subsections (A)
and (B) above, in the event Landlord fails to deliver possession
of the Premises to Tenant on the Possession Date as set forth in
subsection 25(a) above for any reason other than a Landlord
Delivery Force Majeure Event, but Landlord is able to deliver
said possession: (i) within the period from and including the
thirty-first (31st) day through and including the sixtieth (60th)
day after Tenant delivers the Possession Notice described in
subsection 25(b)(i) above, then, as Tenant's sole and exclusive
remedy hereunder: (1) Landlord shall reimburse Tenant, within
twenty (20) business days after demand therefore, and upon
presentation to Landlord of a photocopy of the invoices and other
back-up information reasonably requested by Landlord (to the
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extent such other back-up information is maintained by and
available to Tenant) for any Delay Costs, and (2) Tenant shall be
entitled to one (1) day of free Rent after the Commencement Date
for each day between the Possession Date and the Actual
Possession Date; or (ii) within the period from and including the
sixty-first (61st) day through and including the ninetieth (90th)
day after Tenant delivers the Possession Notice described in
subsection 25(b)(i) above, then, as Tenant's sole and exclusive
remedy hereunder: (1) Landlord shall reimburse Tenant, within
twenty (20) business days after demand therefore, and upon
presentation to Landlord of a photocopy of the invoices and other
back-up information reasonably requested by Landlord (to the
extent such other back-up information is maintained by and
available to Tenant) for any Delay Costs, and (2) Tenant shall be
entitled to one and one half (1-1/2) days of free Rent after the
Commencement Date for each day between the Possession Date and
the Actual Possession Date.
In the event Tenant fails to give a written notice on
or before the Exercise Date as aforesaid, Tenant shall be deemed
to have elected the option set forth in subsection 25(b)(i)(B)
above. In addition, in the event Tenant elects, or is deemed as
have elected, the option set forth in subsection 25(b)(i)(B), and
Tenant fails to commence the exercise of its equitable remedies
within ninety (90) days after the Exercise Date, then during the
thirty (30) day period immediately following the expiration of
the aforesaid ninety (90) day period, either Landlord or Tenant
shall have the right, at their option, to terminate this Lease
upon written notice to the other, in which case this Lease shall
be of no further force and effect except that Landlord shall pay
to Tenant, as liquidated damages, within twenty (20) business
days after the termination of the Lease as aforesaid, the Late
Delivery Termination Amount. In the event neither Landlord nor
Tenant exercises the termination right set forth in the preceding
sentence within the aforesaid thirty (30) day period, this Lease
shall be deemed to have automatically terminated and be of no
further force and effect except that Landlord shall pay to Tenant
as liquidated damages, within twenty (20) business days after
termination of the Lease as aforesaid, the Late Delivery
Termination Amount.
(ii) If the Landlord has failed to deliver possession
of the Premises to Tenant on the Possession Date in accordance
with subsection 25(a) above as a result of a Landlord Delivery
Force Majeure Event (other than Casualty Damage (as hereinafter
defined)), then, Landlord shall have until December 1, 1995
("Extended Possession Date") to deliver possession to Tenant as
aforesaid. In the event Landlord has not, by the Extended
Possession Date, either: (A) delivered possession of the
Premises to Tenant in accordance with subsection 25(a) above, or
(B) delivered to Tenant an Existing Landlord Commitment (as
hereinafter defined), then Tenant shall have the right ("Force
-53-
Majeure Termination Right"), as its sole and exclusive remedy, to
be exercised by written notice to Landlord no later than December
15, 1995, to terminate this Lease effective as of December 15,
1995, in which event this Lease shall terminate and be of no
further force and effect. If either: (1) Landlord delivers to
Tenant the Existing Landlord Commitment as aforesaid, or (2)
Tenant is entitled to, but fails to, exercise the Force Majeure
Termination Right as aforesaid, then this Lease shall remain in
full force and effect except that the Commencement Date shall be
extended to the date which is three hundred and sixty-five (365)
days after the Actual Possession Date.
(iii) In the event of any Casualty Damage occurring on
or before the Possession Date, the Landlord shall promptly give
Tenant written notice thereof ("Pre-Possession Casualty Notice").
Tenant shall, within forty-five (45) days of its receipt of a
Pre-Possession Casualty Notice, obtain a Determination (as
defined below) from the Tenant's Architect (as defined below).
If a Casualty Damage has occurred on or before the Possession
Date, and in the event this Lease shall not be terminated
pursuant to Section 13 hereof (or the Main Lease shall not be
terminated pursuant to Section 13 of the Main Lease) the Landlord
shall have until the Extended Possession Date to perform the Pre-
Possession Restoration Obligation (as hereinafter defined). In
the event the Landlord has not, by the Extended Possession Date,
either: (A) performed the Pre-Possession Restoration Obligation,
or (B) delivered to Tenant an Existing Landlord Commitment, then
Tenant shall have the right ("Pre-Possession Casualty Termination
Right"), as its sole and exclusive remedy, to be exercised by
written notice to Landlord no later than December 15, 1995, to
terminate this Lease effective as of December 15, 1995, in which
event this Lease shall terminate and be of no further force and
effect. If either: (1) Landlord delivers to Tenant the Existing
Landlord Commitment as aforesaid, or (2) the Tenant is entitled
to, but fails to, exercise the Pre-Possession Casualty
Termination Right then this Lease shall remain in full force and
effect except that the Commencement Date shall be the date which
is the later of: (x) September 1, 1996, or (y) three hundred and
sixty-five (365) days after the date that Landlord performs the
Pre-Possession Restoration Obligation; provided, however, in the
case of this subsection 25(a)(iii)(y), in the event the Tenant
has not completed its Tenant Work (as defined in the Workletter)
by the end of said three hundred and sixty-five (365) days as a
result of Force Majeure delays then said time period shall be
extended on a day-for-day basis for each day of Force Majeure
delay, but in no event to exceed one hundred and twenty (120)
days after the expiration of said three hundred and sixty-five
(365) day period. In the event Landlord has performed option (2)
of the Pre-Possession Restoration Obligation (as hereinafter
defined), the Tenant agrees to accept possession of the Premises
in "as-is" condition after completion of the Main Landlord's
Restoration Work and to perform all additional work necessary to
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complete the Tenant Work in accordance with the terms of the
Workletter. In such event, the Tenant shall, in addition to the
Landlord Allowance, be entitled to the Extra Restoration
Allowance (as defined below) which shall be reasonably estimated
by the Tenant's Architect and disbursed in the same manner as the
Landlord Allowance except that the Extra Restoration Allowance
shall be used solely in connection with completing the Landlord's
Pre-Possession Repair Obligation. In the event the Extra
Restoration Allowance originally estimated by the Tenant's
Architect is insufficient to pay in full the total cost of
completing the Landlord's Pre-Possession Repair Obligation (as
reasonably determined by the Tenant's Architect), then the
Landlord shall, within twenty (20) business days, increase the
amount of the Extra Restoration Allowance to account for such
deficiency. In the event, the Extra Restoration Allowance
exceeds the amount required to pay in full the total cost of
completing the Landlord's Pre-Possession Repair Obligation (as
reasonably determined by the Tenant's Architect), then the amount
of such excess shall not be available to Tenant and shall remain
Landlord's. In the event Landlord disputes the amount of the
Extra Restoration Allowance estimated by the Tenant's Architect
as aforesaid, said dispute shall be resolved in accordance with
the terms and provisions of subsection 13(e) hereof.
(iv) With respect to subsections (i), (ii) and (iii)
above, Tenant acknowledges that Landlord may attempt to negotiate
with the Existing Landlord in an effort to reduce the hold-over
obligations of the Tenant under the Existing Lease (as
hereinafter defined) by modifying or amending the Existing Lease
or otherwise. In that regard, if requested by Landlord, Tenant
agrees to act in good faith, to cooperate in a timely manner with
Landlord and to execute and deliver any and all documents and
send any and all notices reasonably requested by Landlord,
provided (A) such documents and notices do not materially and
adversely affect the Tenant, and (B) any documents, agreements or
notices which Landlord requests Tenant to execute shall be
subject to Tenant's reasonable approval. Tenant hereby
represents and warrants that, as of the date hereof, there are no
subleases or other occupancy agreements in effect with respect to
the Existing Premises (as hereinafter defined). Without the
prior written consent of the Landlord, which consent shall not be
unreasonably withheld or delayed, Tenant hereby agrees that it
shall not either (x) amend, modify or revise the terms of the
Existing Lease (except to the extent that such amendment does
not, in Tenant's reasonable opinion, increase the obligations of
Landlord with respect to Hold-over Rent (as hereinafter
defined)), or (y) enter into any sublease of, or assign, the
Existing Lease. Landlord and Tenant agree to promptly furnish
each other with copies of any notice they receive from the
Existing Landlord in connection with the hold-over of the
Existing Premises.
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(v) The following terms as used herein, shall have the
following meanings:
(A) "Casualty Damage" - shall mean any damage to the
Premises or the Building caused by fire or other casualty.
(B) A "Determination" - a written opinion from the
Tenant's Architect delivered and certified to Tenant and Landlord
concerning the extent of the Casualty Damage together with an
estimate of the total cost to repair and restore the same and an
estimate of the portion of the total cost attributable to the
Landlord's Pre-Possession Repair Obligation. In the event
Landlord disputes the amounts estimated by the Tenant's Architect
as aforesaid, said dispute shall be resolved in accordance with
the terms and provisions of Section 13(e) hereof.
(C) "Existing Landlord" - the owner of the building at
One North Western Center, Chicago, Illinois.
(D) "Existing Lease" - the lease to Tenant dated
October 7, 1980, as amended and modified, a complete certified
copy of which (excluding Exhibits) has been delivered by Tenant
to Landlord.
(E) "Existing Landlord Commitment" - a written
agreement between Landlord and Existing Landlord pursuant to
which Landlord agrees to pay on behalf of Tenant any actual hold-
over rent due Existing Landlord calculated in accordance with
Section 35 of the Existing Lease ("Hold-over Rent"), on a per
diem basis for the number of days from December 1, 1995 through
(1) the Actual Possession Date, in the case of subsection
25(b)(ii) hereof, or (2) the date the Landlord performs the Pre-
Possession Restoration Obligation, in the case of subsection
25(b)(iii) hereof.
(F) "Extra Restoration Allowance" - shall mean an
extra allowance given by Landlord to Tenant equal to the amount
reasonably required to complete the portion of any Casualty
Damage attributable to the Landlord's Pre-Possession Repair
Obligation. The amount of the Extra Restoration Allowance shall
be added to the Landlord Allowance (but without adjustment in the
Base Rent) and disbursed in accordance with the Workletter, but
shall be used solely for the purpose of paying the reasonable
costs associated with completing the Landlord's Pre-Possession
Repair Obligation.
(G) "Landlord Delivery Force Majeure Event" - shall
mean any Force Majeure event which, directly or indirectly,
causes Landlord to fail to deliver possession of the Premises to
Tenant on the Possession Date in accordance with subsection 25(a)
hereof; provided, however, a Landlord Delivery Force Majeure
Event shall not be deemed to have occurred if the failure on the
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part of the Landlord to deliver possession of the Premises as
aforesaid is attributable solely to the Landlord not having
sufficient available space to relocate its personnel occupying
the Premises as of the date hereof.
(H) "Landlord's Pre-Possession Repair Obligation" -
shall mean: (i) prior to the time the Plans are complete and
approved in accordance with the terms and provisions of the
Workletter, the repair and restoration of the Premises to
substantially the same condition as existed prior to the Casualty
Damage, but specifically excluding the Main Landlord's
Restoration Work and (ii) from and after the time the Plans are
complete and approved in accordance with the terms and provisions
of the Workletter, the repair and restoration of the Premises to
substantially the same condition as existed prior to the Casualty
Damage, but specifically excluding the following: (A) any
alterations, improvements or other work reflected on the Plans
including, without limitation, the repair and restoration of any
portion of the Premises which has been demolished by Tenant, and
(B) the Main Landlord's Restoration Work.
(I) "Pre-Possession Restoration Obligation" - shall
mean, at Landlord's option, either: (1) repairing and restoring,
or causing to be repaired and restored, the portion of the
Premises or the Building damaged by the Casualty Damage to
substantially the same condition as existed prior to the Casualty
Damage (as determined by a certificate issued by the Tenant's
Architect and delivered to Landlord and Tenant), or (2) causing
the Main Landlord to repair and restore that portion of the
Casualty Damage which is Main Landlord's Restoration Work and
agreeing to provide Tenant with the Extra Restoration Allowance.
(J) "Tenant's Architect" - an architect licensed in
the State of Illinois engaged by Tenant and reasonably approved
by Landlord (for which purpose those architects identified on
Schedule A to the Workletter are approved by Landlord).
Notwithstanding the foregoing, in the event a determination or
other decision or action is required to be made hereunder by
Tenant's Architect, and if at such time, either: (i) there is no
Tenant's Architect then engaged by Tenant, or (ii) the Tenant's
Architect then engaged by Tenant fails to render its
determination, decision or take such action within the later of:
(A) five (5) days after demand therefore by either party hereto,
or (B) the time period specified herein for the Tenant's
Architect to act, then Tenant shall have a period of five (5)
business days after written notice from Landlord to Tenant to:
(1) in the case of subsection (i) above, engage a Tenant's
Architect (subject to the approval of Landlord as set forth
above) and obtain the determination, decision or action of such
Tenant's Architect, or (2) in the case of subsection (ii) above,
to obtain the determination, decision or action of the existing
Tenant's Architect. In the event Tenant fails to perform its
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obligations set forth in subsection (1) or (2) above (as the case
may be) within said five (5) business day period as aforesaid,
Landlord may engage an architect licensed in the State of
Illinois who for the purposes of such determination, decision or
action shall be deemed to be Tenant's Architect hereunder.
(c)(i) Notwithstanding anything to the contrary
contained in this Lease or the Workletter, Tenant acknowledges
and agrees that from and after the date hereof and until the
Possession Date, Landlord shall be entitled to use and possess
the Premises in accordance with the terms and provisions of the
Main Lease applicable to the Premises.
(ii) Notwithstanding the provisions of subsection
25(c)(i) above, Landlord agrees to give the Tenant prior written
notice ("Structural Alteration Notice") describing in reasonable
detail any alterations or improvements to the structure of the
Premises which Landlord intends to make during the period prior
to August 31, 1995; provided, however, with respect to floors
seven (7) through ten (10) inclusive, only to the extent such
structural alterations or improvements, in the reasonable opinion
of the Landlord, would cost more than $25,000.00 individually or
$100,000.00 in the aggregate to be completed ("Structural
Landlord Alterations"). Within twenty (20) business days of
Tenant's receipt of a Structural Alteration Notice, Tenant shall
deliver to Landlord evidence setting forth Tenant's reasonable
estimate (which may be obtained by Tenant from the Tenant's
Architect or Tenant's in-house engineer) of the amount by which
the Structural Landlord Alteration will increase Tenant's costs
of improving the Premises pursuant to, and in accordance with,
the Workletter ("Alteration Cost Differential"). Landlord shall
have the right, after receipt of Tenant's estimate of the
Alteration Cost Differential, to elect to either: (A) perform
such Structural Landlord Alteration and reimburse Tenant, within
thirty (30) days after demand therefore, for the actual amount of
such Alteration Cost Differential (provided, however, with
respect to floors seven (7) through ten (10) inclusive, only that
portion of the Alteration Cost Differential which exceeds
$100,000), but in no event more than the total amount of said
estimated Alteration Cost Differential (upon presentation to
Landlord from Tenant of reasonably appropriate back-up
information), or (B) not perform such Structural Landlord
Alteration. After Landlord's completion of any Structural
Landlord Alterations to the Premises, Landlord shall furnish to
Tenant construction drawings marked to show all changes from the
Landlord's as-built floor plans. In the event Landlord disputes
either the actual or estimated Alteration Cost Differential,
Landlord may elect to submit the matter to arbitration in
accordance with subsection 13(e) hereof and the determination
shall be final and binding on the parties. In the event Tenant
fails to provide Landlord with its estimate of the Alteration
Cost Differential within the aforesaid twenty (20) business day
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period, Landlord shall be entitled to make said Structural
Landlord Alterations without any obligation to reimburse Tenant
for any Alteration Cost Differential.
(d) Notwithstanding the foregoing provisions of this
Section 25, and without in any way limiting any of the other
provisions of this Lease, the parties hereto expressly
acknowledge and agree that: (i) Landlord shall not be in
violation of this Lease, and Tenant shall not be entitled to the
rights and remedies described in this Section 25, if the failure
on the part of the Landlord to deliver possession of the Premises
to Tenant on the Possession Date as aforesaid is caused, either
directly or indirectly, by the acts or omissions of Tenant, its
agents, employees or contractors, and (ii) the terms and
provisions of this Section 25 are expressly subject to the rights
of the Landlord and Tenant to terminate this Lease as set forth,
and in accordance with, Sections 13 and 14 hereof, as well as the
rights of the Main Landlord and Landlord to terminate the Main
Lease (and, correspondingly, this Lease) pursuant to Sections 13
and 14 of the Main Lease.
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 this Lease.
(b) All of the agreements of Landlord and Tenant with
respect to the Premises are contained in this Lease and the
Direct Lease Option and Consent Agreement; and no modification,
waiver or amendment of this Lease or of any of its conditions or
provisions shall be binding upon Landlord or Tenant unless in
writing signed by Landlord and Tenant.
(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
Landlord or Tenant 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
to corporations or other organizations, partnerships or other
entities, or individuals, shall, in all cases, be assumed as
though in each case fully expressed.
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(e) Clauses, plats, and riders, if any, signed by
Landlord and Tenant and endorsed on or affixed to this Lease are
a part hereof.
(f) The headings of Sections are for convenience only
and do not limit, expand or construe the contents of the
Sections.
(g) Time is of the essence of this Lease and of each
and all provisions hereof.
(h) All amounts (including, without limitation, Base
Rent and Additional Rent) owed by Tenant to Landlord (or by
Landlord to Tenant) pursuant to any provision of this Lease shall
bear interest from the date of the expiration of the applicable
required notice period until paid at the annual rate of one
percent (1%) in excess of the rate of interest announced from
time to time by Continental Bank N.A. (or other bank or other
financial institution designated by Landlord), at Chicago,
Illinois, as its prime rate, changing as and when said prime 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 with respect
to the Premises are merged in this Lease, which alone fully and
completely expresses the agreement between Landlord (and its
beneficiaries and their agents) and Tenant.
(k) Except as specifically set forth herein, whenever
the approval or consent of either Landlord or Tenant is required
hereunder, such consent or approval shall not be unreasonably
withheld or delayed. Notwithstanding any of the terms and
conditions contained herein, with respect to approvals or
consents required pursuant to the terms of this Lease, Landlord
shall have no obligation to deal with any subtenant of Tenant,
but may look solely to Tenant for the same.
(l) In computing any period of time pursuant to this
Lease, the day of the act, date of notice, event or default from
which the designated period of time begins to run will not be
included. The last day of the period so counted will be
included, unless it is a Saturday, Sunday or a Holiday, in which
event the period runs until the end of the next day which is not
a Saturday, Sunday or such Holiday.
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(m) Tenant shall be entitled to a total of 250 strips
on the directory in the Monroe Street lobby of the Building with
a cross reference to the Monroe Street lobby directory in the
other lobby directories of the Building on the following terms
and conditions: (i) Tenant's use of said strips shall be subject
to the Rules and Regulations, and (ii) the cost associated with
the initial installation of the strips shall be borne by
Landlord; provided, however, any additional costs associated with
said strips (including, without limitation, as a result of any
changes or modifications thereto) shall be borne by Tenant. On
or before September 1, 1995, subject to Force Majeure, Landlord
will substantially complete (or cause to be substantially
completed) the "Lobby Work" described on Exhibit I attached hereto.
27. Landlord. The term "Landlord" as used in this
Lease means only the Landlord as tenant under the Main Lease and
any successors and assigns of Landlord under the Main Lease so
that in the event of any assignment, transfer or conveyance once
or successively, of the Landlord's interest in the Main Lease,
said Landlord making such transfer, conveyance or assignment
shall be and hereby is entirely freed and relieved of all
covenants and obligations of Landlord hereunder accruing after
such transfer, conveyance or assignment, provided such transferee
or assignee has assumed the covenants and obligations of Landlord
accruing after such transfer, conveyance or assignment, and
Tenant agrees to look solely to such transferee or assignee with
respect thereto. The holder of a mortgage or trust deed (or
assignment in connection with a mortgage or trust deed) shall not
be deemed such an assignee under this Section 27. This Lease and
the obligations, benefits and privileges of Tenant hereunder
shall not be affected by any such assignment, transfer or
conveyance and Tenant agrees to attorn to the grantee or
assignee.
28. Title and Covenant Against Liens. The Landlord's
and Main Landlord's title is and always shall be paramount to the
title of the Tenant and nothing in this Lease contained shall
empower the Tenant to do any act which can, shall or may encumber
the title of the Landlord or Main Landlord. Tenant covenants and
agrees not to suffer or permit any lien of mechanics or
materialmen to be placed upon or against the Premises, the
Building, the Land or against the Tenant's leasehold interest in
the Premises and, in case of any such lien attaching, to
immediately pay and remove same. Notwithstanding the foregoing,
Tenant shall have the right to contest the validity of any such
lien provided such lien is bonded or Tenant has otherwise
provided adequate security to Landlord for such lien claim.
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 Premises, the Land or the Building, and any and all
liens and encumbrances created by Tenant shall attach only to
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Tenant's interest in the Premises. If any such liens so attach
and Tenant fails to pay and remove same within thirty (30) days,
or to bond same or provide adequate security as aforesaid,
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 to the date of reimbursement at the rate set
forth in Section 26(h) hereof for amounts owed Landlord by Tenant
shall be deemed to be Additional Rent due and payable by Tenant
upon receipt of an invoice for same.
29. Bankruptcy or Insolvency.
(a) Termination of Lease.
(i) Neither Tenant's interest in the Lease nor any
estate hereby created in Tenant shall pass to any trustee,
except as may specifically be provided pursuant to the
provisions of the Bankruptcy Code, 11 U.S.C. 101 et seq.
(the "Bankruptcy Code"), or receiver or assignee for the
benefit of creditors or otherwise by operation of law.
(ii) In the event Tenant's executors, administrators,
or assigns, if any, shall be adjudicated insolvent pursuant
to the provisions of any state law, or if Tenant is
adjudicated insolvent by a Court of competent jurisdiction
other than the United States Bankruptcy Court, or if a
receiver or trustee of the property of Tenant shall be
appointed by reason of the insolvency or inability to pay
its debts, other than an appointment pursuant to the
provisions of the Bankruptcy Code, or if any assignment
shall be made of the property of Tenant for the benefit of
creditors, excepting an assignment by a trustee pursuant to
the provisions of the Bankruptcy Code, then and in any such
event, this Lease and all rights of Tenant hereunder shall
automatically cease and terminate with the same force and
effect as though the date of such event were the date
originally set forth herein and fixed for expiration of the
Term of this Lease, and Tenant shall vacate and surrender
the Property.
Tenant shall not suffer or permit the appointment of a
trustee or receiver of the assets of Tenant by reason of the
insolvency or inability of Tenant to pay its debts and shall not
make any assignment for the benefit of creditors, or become or be
adjudicated insolvent. The allowance of any petition under any
insolvency law, except under the Bankruptcy Code, or the
appointment of a trustee or receiver of Tenant shall be
conclusive evidence that Tenant caused or gave cause therefor,
unless such allowance of the petition, or the appointment of a
trustee or receiver, is vacated within ninety (90) days after
such allowance or appointment. Landlord does, in addition,
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reserve any and all other remedies provided in this Lease or in
law.
(b) Protection by Tenant. Upon the filing of a
petition by or against Tenant under the Bankruptcy Code, Tenant,
as debtor and as debtor in possession, and any trustee who may be
appointed agree to adequately protect Landlord as follows: (1)
perform each and every obligation of Tenant under this Lease,
including the payment of Rent hereunder, arising from and after
the order for relief within sixty (60) days after the date of
such order, until such time as this Lease is either rejected or
assumed by order of the United States Bankruptcy Court; and (2)
to give Landlord prior written notice of any proceeding relating
to any assumption of this Lease; and (3) to give Landlord written
notice of the intention of Tenant and the trustee to reject this
Lease; and (4) to provide Landlord with adequate assurance of
future performance under the Lease as that term is used in 11
U.S.C. 361.
(c) Waivers by Landlord. No default of this Lease by
Tenant, either prior to or subsequent to the filing of a petition
under the Bankruptcy Code, shall be deemed to have been waived
unless expressly done so in writing by Landlord.
(d) Assumption of Lease. If Tenant or a trustee
elects to assume this Lease subsequent to the filing of a
petition under the Bankruptcy Code, Tenant, as debtor and as
debtor in possession, and any trustee who may be appointed agree
as follows: (1) to cure each and every existing default within
not more than ninety (90) days after assumption of this Lease;
and (2) to compensate Landlord, or provide adequate assurance
that Tenant or the trustee will compensate Landlord, for any
actual pecuniary loss resulting from any existing default,
including, without limitation, Landlord's reasonable costs,
expenses and attorneys' fees incurred as a result of the default,
as determined by the Bankruptcy Court, within ninety (90) days of
assumption of this Lease; and (3) in the event of an existing
default, to provide Landlord with adequate assurance of Tenant's
future performance under the Lease as determined by the
Bankruptcy Court; and (4) the assumption will be subject to all
of the provisions of this Lease unless the prior written consent
of Landlord is obtained. If Tenant, as debtor-in-possession, or
such Trustee shall fail to elect this Lease within sixty (60)
days after the filing of the petition by or against Tenant,
unless such time period is extended by the Bankruptcy Court, this
Lease shall be deemed to have been rejected and unless Landlord
receives adequate assurance for continued possession after
rejection of the Lease, Landlord shall be thereupon immediately
entitled to possession of the Premises without further obligation
to the Tenant or said Trustee, and this Lease shall be cancelled,
but Landlord's right to be compensated for damages in any such
bankruptcy proceeding shall survive.
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(e) Assignment of Lease and Adequate Assurances to
Landlord. If Tenant assumes this Lease and proposes to assign
the same pursuant to the provisions of the Bankruptcy Code to any
person or entity who shall have made a bona fide offer to accept
an assignment of this Lease on terms acceptable to the Tenant,
any person or entity to which this Lease is assigned pursuant to
the provisions of the Bankruptcy Code shall be deemed without
further act or deed to have assumed all of the obligations
arising under this Lease on and after the date of such
assignment. Any such assignee shall upon demand execute and
deliver to Landlord an instrument confirming such assumption.
The adequate assurance to be provided Landlord to
assure the assignee's future performance under the Lease shall be
determined by the Bankruptcy Court.
(f) Amounts Payable by Tenant Constitute Rent.
Notwithstanding anything in this Lease to the contrary, all
amounts payable by Tenant to or on behalf of Landlord under this
Lease, whether or not expressly denominated as Rent, shall
constitute rent for the purposes of Section 502(b)(6) of the
Bankruptcy Code.
(g) Application by Landlord of Payments from Tenant.
Any payment received from Tenant may be applied by Landlord
against any obligation due and owing by Tenant under this Lease,
notwithstanding any statement appearing on or referred to in any
remittance from Tenant or any prior application of such payment.
If a petition under the Bankruptcy Code is initiated within
ninety (90) days after receipt by Landlord of any such payment,
the payment shall be deemed applicable to any unpaid obligations
then due in the inverse order of their maturity.
30. Roof Rights. Landlord hereby agrees that the
Premises shall include approximately 175 square feet of
contiguous flat space on the roof described on Exhibit C attached
hereto and made a part hereof ("Tenant Roof Space"). The Tenant
Roof Space shall be used by Tenant solely for the purposes of the
construction, installation, operation, maintenance and use of
telecommunications equipment and an enclosed equipment room.
Subject to the terms and provisions set forth herein, Tenant
shall have access to the Tenant Roof Space on a 24-hour basis,
seven (7) days a week. No Rent shall be paid for the Tenant Roof
Space, nor shall Tenant's Proportionate Share be increased to
reflect the Tenant Roof Space. Installation and maintenance of
the telecommunications equipment and enclosed equipment room on
the Tenant Roof Space shall be at Tenant's expense and shall be
subject to the Landlord's prior written approval (not to be
unreasonably withheld) (including, without limitation, with
respect to the location, appearance and size thereof). Landlord
shall cause Main Landlord to be responsible for maintenance and
repair of the entire roof of the Building pursuant to, and in
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accordance with, the terms of the Main Lease with the exception
of repairs (i) necessitated by installation, maintenance or
repair of the telecommunications equipment and/or enclosed
equipment room, or (ii) due to Tenant's (or its employees, agents
or invitees) negligence, intentional acts or omissions. Tenant
shall be responsible for repairs necessitated by (i) or (ii)
above. Tenant agrees that it will contract with Main Landlord or
Landlord for the installation of the telecommunications equipment
and/or enclosed equipment room by contractors to be reasonably
approved by Tenant and Landlord at a cost to be reasonably
negotiated at such time. Tenant further agrees to reimburse
Landlord for any reasonable insurance premiums incurred by
Landlord or Main Landlord, which are directly due to Tenant's
installation and/or maintenance of the telecommunications
equipment and/or enclosed equipment room on the roof. Landlord
agrees to exercise reasonable efforts to cause Main Landlord to
allow Tenant, at Tenant's sole cost and expense, to connect the
antenna to the Premises through the vertical risers in the
Building pursuant to plans and specifications reasonably approved
by Landlord and Main Landlord. In the event Main Landlord agrees
to the foregoing, Tenant specifically acknowledges and agrees
that the aforesaid right is subject to the Rules and Regulations.
In no event shall Tenant's installations on the roof interfere
with Landlord's, Main Landlord's or other tenants' use of
existing telecommunications equipment. Landlord agrees that any
new installations of equipment on the roof by Landlord will not
interfere with Tenant's installations shown on Exhibit C hereto.
Tenant hereby agrees that it shall not have the right to assign
or sublease the use of the Tenant Roof Space separately from a
sublease or assignment of a portion of the Premises, it being the
parties' intention to prohibit Tenant from using the Tenant Roof
Space as an independent profit-making operation separate and
apart from Tenant's use of the Premises or for other than
telecommunications purposes. Tenant shall not sublet or assign
an immaterial portion of the Premises with the intent or purpose
of primarily affording the sublessee or assignee the right to use
the Tenant Roof Space. Tenant shall construct, install, operate
and use the Tenant Roof Space in compliance with all laws,
ordinances and regulations (including, without limitation, zoning
and building codes), and any Rules and Regulations. Tenant will
indemnify and hold Landlord and Main Landlord harmless from and
against any and all loss, cost or liability suffered or incurred
by Landlord or Main Landlord, their officers, or agents as a
result of the construction, installation, operation or use of the
Tenant Roof Space as aforesaid.
31. Attorneys' Fees. Landlord shall pay all of
Tenant's costs, charges and expenses, including court costs and
attorneys' fees, incurred in enforcing Landlord's obligations
under this Lease or incurred by Tenant in any litigation,
negotiation or transaction in which Landlord causes Tenant,
without Tenant's fault, to become involved or concerned.
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32. Waiver. No waiver of any condition expressed in
this Lease shall be implied by any neglect of Tenant to enforce
any remedy or on account of the violation of such condition
whether or not such violation be continued or repeated
subsequently.
33. Mutual Indemnity and Waiver.
(a) To the extent not expressly prohibited by law,
Landlord and Tenant each (in either case, the "Indemnitor")
agrees to hold harmless and indemnify the other, its agents and
employees (the "Indemnitee") from any claim and liabilities
imposed upon or incurred by or asserted against the Indemnitee,
including reasonable attorney's fees and expenses, for death or
injury to third parties or loss of or damage to property of third
parties that may arise from or be caused directly or indirectly
by any act or omission of the Indemnitor, its agents, contractors
or employees or from any breach or default on the part of the
Indemnitor in the performance of any covenant or agreement on the
part of the Indemnitor to be performed pursuant to the terms of
this Lease. In case any action, suit or proceeding is brought
against the Indemnitee by reason of any such act of Indemnitor,
Indemnitor will, at Indemnitor's expense, by counsel approved by
Indemnitee (which approval shall not be unreasonably withheld),
resist and defend such action, suit or proceeding.
(b) To the extent not expressly prohibited by law and
except for claims arising from the negligent or intentional act
or omission of Landlord or its agents or employees, Tenant
releases Landlord and its agents and employees, from and waives
all claims for damages to person or property sustained by the
Tenant, its guests and invitees or by any occupant of the
Premises and said occupant's guests and invitees, or the
Building, or by any other person, resulting directly or
indirectly from any act or neglect of any tenant or other
occupant of the Building or any part thereof.
To the extent not expressly prohibited by law and
except for claims arising from the negligent or intentional act
or omission of Tenant, its agents or employees, Landlord releases
Tenant, and its agents and employees, from and waives all claims
for damages to person or property sustained by the Landlord, or
by any other person, resulting directly or indirectly from any
act or neglect of any tenant or other occupant of the Building or
any part thereof.
34. "Force Majeure" is hereby defined to mean any
strike, lockout, labor trouble, civil disorder, inability to
procure materials, governmental laws and regulations, riots,
insurrections, war, fuel shortages, accidents, casualties, acts
of God, acts caused directly or indirectly by the other party to
the Lease (or its agents, employees, contractors, licensees, or
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invitees) or any other cause beyond the reasonable control of the
performing party.
35. Arbitration. Any dispute specifically required by
the terms of this Lease to be settled by arbitration shall be
submitted for arbitration to the Chicago, Illinois office of the
American Arbitration Association in accordance with its
Commercial Arbitration Rules then in effect, except where such
rules are contrary to the provisions set forth in this Lease.
The award or decision rendered by the arbitrators shall be final,
and judgment may be entered upon it in accordance with applicable
law in any court having jurisdiction. The arbitrators may award
any relief which they shall deem proper in the circumstances,
without regard to the relief which would otherwise be available
to any party hereto in a court of law or equity including,
without limitation, specific performance and injunctive relief.
It is understood that the arbitration provisions of this Section
35 shall be the sole remedy of the parties under this Agreement
with respect to disputes subject to arbitration under this
Section 35. Notwithstanding the foregoing, the parties agree
that Landlord or Tenant may apply to a court of competent
jurisdiction for equitable relief if such is appropriate during
the pendency of the arbitration proceeding.
Notice of the demand for arbitration shall be filed in
writing with the Landlord and Tenant. Unless otherwise agreed to
in writing by the Landlord and Tenant, upon receipt of a demand,
each party shall designate an arbitrator within ten (10) business
days. The two designated arbitrators shall then select a third
arbitrator to complete the full arbitration panel within ten (10)
business days, or as otherwise agreed. The arbitrators selected
pursuant to the terms of this Section 35 shall not be employees
of or hold any ownership interest in, the party selecting them.
Each such arbitrator shall have at least five years of experience
relevant to the general subject matter of the dispute.
If the arbitrators selected by each party fail to agree
upon a third arbitrator within the time limits set by this Lease,
either party may request the American Arbitration Association to
select the neutral arbitrator. If either party fails to appoint
an arbitrator within the time period set forth, the other party
may apply to any court having jurisdiction over this Lease to
compel arbitration and that court shall be empowered to select
the failing party's arbitrator.
The arbitration panel shall commence hearings within
thirty (30) days of the selection of the panel, unless Landlord
and Tenant or the arbitration panel (with approval of Landlord
and Tenant) agree upon a delayed schedule of hearings. Any party
may send out requests to compel document production from the
other party. Disputes concerning the scope of document
production and enforcement of the document requests shall be
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subject to agreement by Landlord and Tenant, or may be ordered by
the arbitrators to the extent reasonable. The arbitrators may
obtain independent legal counsel to aid in their resolution of
legal questions presented in the course of arbitration to the
extent they consider that such counsel is absolutely necessary to
the fair resolution of the dispute, and to the extent that it is
economical to do so considering financial consequences of the
dispute.
If any party subject to the terms of this arbitration
provision fails or refuses to appear at and participate in an
arbitration hearing after due notice, the arbitration panel may
hear and determine the controversy upon evidence produced by the
appearing party.
The arbitration costs (including filing fees, court
reporters' fees and transcript costs) shall be borne equally by
each party, except that each party shall be responsible for its
own expenses and the costs of the arbitrator selected by it.
36. Use of Name. Tenant agrees that it will not
utilize the name of Landlord, AT&T-RMC or of American Telephone
and Telegraph Company, a New York corporation ("AT&T"), or of an
affiliate of Landlord, AT&T-RMC or of AT&T in any advertising,
publicity, promotion, writing, radio or television broadcast, or
in any other way, concerning the Building or this Lease, except
for use in the name of the Building if called the AT&T Corporate
Center or other similar name, without the prior written consent
of Landlord.
37. Direct Lease Option and Consent Agreement.
Concurrently with the execution and delivery of this Lease, the
parties hereto shall enter into that certain Direct Lease Option,
Attornment, Recognition and Consent Agreement with the Main
Landlord, Landlord, AT&T and The Travelers Insurance Company in
the form attached hereto as Exhibit D ("Direct Lease Option and
Consent Agreement"). Except as specifically provided within the
terms and provisions of the Direct Lease Option and Consent
Agreement, the terms and provisions of the Direct Lease Option
and Consent Agreement will terminate and be of no further force
and effect concurrently with the termination of this Lease for
any reason whatsoever.
38. Agreements Regarding Main Lease. (a) Landlord and
Tenant hereby agree as follows: (i) except with respect to
certain terms, provisions and exhibits reflecting economic
matters and concerns in connection with the Main Lease, the
Landlord has furnished Tenant with a true, correct and complete
copy of the Main Lease (excluding the agreements referred to in
Section 26(K) thereof) and an amendment thereto dated July 29,
1988 a copy of which is attached hereto and made a part hereof as
Exhibit G and Landlord will furnish Tenant with copies of any
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future amendments to the Main Lease with economic terms excised
(provided, however, it is expressly understood and agreed that
Tenant shall not, except as expressly set forth in Section 42(b)
hereof, have the right to consent to, or approve, any amendment
or modification to the Main Lease, the aforesaid copies being
furnished to the Tenant merely for informational purposes); and
(ii) Landlord will not, as long as Tenant is not in Default
hereunder, terminate the Main Lease with respect to the Premises
pursuant to the termination rights given to Landlord under
Sections 32 and 44 of the Main Lease, (b) Tenant agrees: (i) to
accept performance by Main Landlord of any of the terms,
provisions and agreements contained herein which are obligations
of Landlord under this Lease, and (ii) to the extent Landlord
hereunder has agreed to cause Main Landlord to perform
obligations pursuant to, and in accordance with, the terms and
provisions of the Main Lease, Tenant will accept performance of
such obligations directly from Landlord in the event Landlord, in
its sole discretion, elects to perform such obligations; and (c)
except as specifically set forth in this Lease, the Tenant is not
entitled to the rights, privileges and benefits of the Landlord
under the Main Lease (including, without limitation, the rights,
privileges and benefits set forth in Sections 30, 31, 32, 33, 34,
37, 38 & 48 thereof and including any rights to any contributions
or other financial accommodations made by Main Landlord in favor
of Landlord under the Main Lease).
39. Furniture. Landlord agrees to sell to Tenant, and
Tenant agrees to purchase from Landlord, Landlord's right, title
and interest in and to the furniture located on the sixth (6th)
through twelfth (12th) floors of the Building as more
particularly described on Exhibit E attached hereto ("Furniture")
at the purchase price of ONE MILLION SIX HUNDRED THOUSAND AND
NO/100 DOLLARS ($1,600,000.00) ("Furniture Price"), on the
following terms and conditions:
(a) Tenant shall pay the Furniture Price to Landlord
on the later of: (a) the Possession Date or (2) the Actual
Possession Date ("Furniture Purchase Date"), at Tenant's option,
either: (i) in a lump sum payment by cashiers or certified
check, or (ii) $10,413.56 on a monthly basis, due on the first
day of each month of the Term beginning with but no earlier than
the Commencement Date, said amount to constitute Additional Rent
hereunder;
(b) The Furniture shall be sold by Landlord to Tenant
in "as-is" condition on the Furniture Purchase Date ordinary wear
and tear excepted from and after January 27, 1993, and without
any warranties of any kind by Landlord to Tenant except for a
warranty that the Furniture is free and clear of all liens and
encumbrances;
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(c) The Furniture shall be conveyed by Landlord to
Tenant pursuant to a bill of sale on the Furniture Purchase Date;
and
(d) Landlord agrees to carry insurance on (or self
insure with respect to) the Furniture in the amount of
$1,600,000.00 (the "Landlord Insured Amount"), which insurance
shall be carried by a company of Landlord's choice, for the
period beginning as of the date of this Lease and ending upon the
Furniture Purchase Date. Tenant may, at its option, and at its
cost, carry insurance on the Furniture in excess of the Landlord
Insured Amount. With respect to uninsured losses, Landlord
agrees to indemnify and hold Tenant harmless from and against any
and all loss, cost and expense arising out of any damage or
destruction of the Furniture, or any item or items thereof, and
agrees to reimburse Tenant in an amount equal to the repair cost,
or if destroyed or not susceptible to repair, the replacement
cost of the damaged or destroyed item, or items, except in no
event shall Landlord's liability hereunder exceed the Landlord
Insured Amount.
40. Short Form of Lease. The parties shall execute,
concurrently with the execution and delivery of this Lease, a
short form of this Lease for recording purposes, in form and
substance reasonably satisfactory to Landlord and Tenant which
form will include a reference to the term of this Lease, Tenant's
Extension Options contained herein and the Direct Lease Option
and Consent Agreement.
41. Basement Storage Space. In the event Landlord
acquires any basement storage space in the Building ("Basement
Storage Space") pursuant to Section 34 of the Main Lease,
Landlord shall give to Tenant an option ("Basement Space
Option"), on the following terms and conditions, to sublease
Tenant's Proportionate Share of such Basement Storage Space from
Landlord:
(a) Within thirty (30) days of Landlord acquiring any
such Basement Storage Space, Landlord shall give Tenant written
notice thereof ("Landlord Basement Notice");
(b) Tenant shall have the right, to be exercised upon
written notice to Landlord ("Tenant Basement Notice") within
thirty (30) days after its receipt of the Landlord Basement
Notice, to elect to sublease Tenant's Proportionate Share of the
Basement Storage Space from Landlord, in a location determined by
Landlord in its sole discretion ("Tenant Basement Space");
(c) Tenant must not be in Default hereunder at the
time it gives Landlord the Tenant Basement Notice;
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(d) In the event Tenant exercises the Basement Space
Option, the Tenant Basement Space shall become part of the
Premises under this Lease on all the terms and provisions set
forth herein (but subject to the terms and provisions under the
Main Lease pursuant to which Landlord acquired such space),
except that the Rent due hereunder for the Tenant Basement Space
shall be at the same rate charged to Landlord for such space
under Section 34 of the Main Lease. Landlord and Tenant shall,
upon the exercise of the Basement Space Option, execute an
amendment to this Lease in form and substance mutually
satisfactory to Landlord and Tenant setting forth the foregoing
terms and conditions; and
(e) If Tenant fails to exercise the Basement Space
Option as aforesaid within the aforesaid time period, the
Basement Space Option shall be deemed waived by Tenant and of no
further force and effect.
42. Option to Extend.
(a) Subject to the terms and provisions of subsection
42(e) below, and provided that this Lease is then in full force
and effect and that Tenant is not in Default under this Lease,
both on the date the Landlord receives the Option Notice (as
hereinafter defined) and at the expiration of the initial Term or
first Option Term (as hereinafter defined), as the case may be,
Landlord hereby grants to Tenant two (2) options (individually an
"Extension Option" and collectively the "Extension Options") to
extend the Term of this Lease for two (2) consecutive periods of
five (5) years each after the expiration of the Term or the
expiration of the first Option Term (as the case may be)
(individually an "Option Term" and collectively the "Option
Terms") on the same terms, conditions and provisions as contained
in this Lease except that the Base Rent for the Option Terms
shall be governed by Section 42(b) below. Each Extension Option
shall be irrevocably exercised by written notice ("Option
Notice") from Tenant to Landlord and Main Landlord in the form
attached hereto as Exhibit J given no later than five hundred and
fifty (550) days prior to the expiration of the Term or the
expiration of the first Option Term, as the case may be, time
being of the essence. If not so exercised, the Extension Options
under this Section 42 shall thereupon expire.
(b) The Base Rent for each Option Term shall be the
"Option Term Base Rent" calculated in accordance with the terms
and provisions of Section 31 of the Main Lease ("Option Term Base
Rent"). Landlord hereby agrees that, without the prior written
consent of Tenant (which consent shall not be unreasonably
withheld or delayed), it shall not amend, modify or revise the
provisions of Section 31 of the Main Lease (except to the extent
such amendment does not, in Landlord's reasonable opinion,
increase the Option Term Base Rent cost to Tenant for each Option
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Term). Without in any way limiting the foregoing, it is
expressly understood and agreed that Landlord may, without the
consent of Tenant, amend, modify or revise the provisions of
Section 31 of the Main Lease in a manner which would permit
Landlord to extend the term of the Main Lease for portions of
the, as well as the entire, Main Premises; provided, however, if
Landlord amends or modifies the Main Lease as aforesaid, and
Tenant delivers the Option Notice described above and is
otherwise entitled to the Extension Options described herein, in
the event Landlord exercises its corresponding option to extend
the term of the Main Lease pursuant to, and in accordance with,
Section 31 of the Main Lease, Landlord will do so with respect to
all and not part of the Premises. Within ten (10) business days
of the determination of the Option Term Base Rent as aforesaid,
Landlord shall deliver to Tenant a written notice which shall
specify the annual Option Term Base Rent under this Lease and the
monthly installments thereof.
(c) In the event Tenant exercises its Extension Option
for the first Option Term, and Landlord exercises its
corresponding option to extend the Main Lease pursuant to, and in
accordance with, Section 31 of the Main Lease, Landlord agrees,
prior to the commencement of such Option Term to cause Main
Landlord subject to, and in accordance with, the terms and
provisions of the Main Lease, to repaint and recarpet the
Premises at its expense (the paint and carpet to be of similar
quality to the paint and carpet presently in the Premises when
installed). Landlord will allow Tenant a reasonable choice of
color with respect to any carpet to be installed in the Premises.
In the event Main Landlord fails to repaint and recarpet the
Premises as aforesaid, Landlord agrees to do so at no additional
cost to Tenant.
(d) Upon the valid exercise by Tenant of each
Extension Option, at the request of either party hereto and
within thirty (30) days after such request, Landlord and Tenant
shall enter into a written supplement to this Lease incorporating
the terms, conditions and provisions applicable to the Option
Term as determined in accordance herewith.
(e) The parties hereto acknowledge and agree that the
Tenant's election to exercise its Extension Options pursuant to,
and in accordance with, this Section 42, shall be deemed a
concurrent exercise by Tenant of its Direct Lease Options
pursuant to, and in accordance with, Section 2.3 of the Direct
Lease Option and Consent Agreement. Notwithstanding the
foregoing, if, after Landlord's receipt of the Option Notice:
(i) Landlord exercises its corresponding option to extend the
Main Lease pursuant to, and in accordance with, Section 31 of the
Main Lease, and such option to extend actually takes effect, then
Tenant's exercise of the Direct Lease Option pursuant to Section
2.3 of the Direct Lease Option and Consent Agreement shall
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automatically be null and void and Tenant shall be deemed to have
solely exercised the Extension Option hereunder; or (ii) Landlord
does not exercise its corresponding option to extend the Main
Lease pursuant to, and in accordance with, Section 31 of the Main
Lease, or such option to extend after being exercised fails to
actually take effect, then Tenant's exercise of the Extension
Option hereunder shall automatically be null and void and Tenant
shall be deemed to have solely exercised the Direct Lease Option
pursuant to, and in accordance with, the Direct Lease Option and
Consent Agreement. Landlord agrees to give Tenant a copy of the
notice sent to the Main Landlord by Landlord under Section 31 of
the Main Lease exercising Landlord's option to extend the Main
Lease.
43. Fair Market Rent.
(a) Within thirty (30) days after the end of each
calendar year from and after the date hereof through and
including the calendar year in which the first day of the eighth
(8th) Lease Year begins, the Landlord shall deliver to Tenant a
written notice ("Landlord's Rent Notice") specifying the
Landlord's opinion of the then current Fair Market Rent (as
defined below). Should Tenant disagree with the Fair Market Rent
so determined by the Landlord in the Landlord's Rent Notice and
should Landlord and Tenant be unable to mutually agree as to what
the Fair Market Rent should be, Tenant may demand by giving
written notice to Landlord, at any time within twenty (20) days
of Tenant's receipt of Landlord's Rent Notice, that the
determination of Fair Market Rent be submitted to arbitration in
accordance with the terms and provisions below ("Rent Arbitration
Notice"); provided, however, in the event Tenant fails to give
the Rent Arbitration Notice to Landlord within the aforesaid
twenty (20) day period, Tenant shall be deemed to have accepted
Landlord's determination of Fair Market Rent. The arbitration
shall be conducted in Chicago, Illinois, in accordance with the
following: The Tenant shall designate simultaneously with the
delivery of its Rent Arbitration Notice, and the Landlord shall
designate within fifteen (15) days after receipt of a Rent
Arbitration Notice, the name of an arbitrator who holds an M.A.I.
designation or its equivalent and who is familiar with the
Chicago Business District Market (as hereinafter defined)
rentals. Within twenty (20) days after the designations as
aforesaid, the two (2) arbitrators chosen shall each make their
written decision as to Fair Market Rent. In the event the two
(2) arbitrators agree on the determination of Fair Market Rent,
said amount shall be the Fair Market Rent for the purposes
hereof. Should such arbitrators disagree as to Fair Market Rent,
but should the higher determination of Fair Market Rent be equal
to or within ten percent (10%) of the lower determination, the
average of the amounts determined by the two (2) arbitrators
shall be deemed the Fair Market Rent. In the event the two (2)
arbitrators are in excess of ten percent (10%) apart, and in the
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further event, Landlord and Tenant cannot mutually agree as to
the Fair Market Rent within ten (10) days after receipt of the
determination by such two (2) arbitrators, the two (2)
arbitrators shall appoint a third arbitrator of equal
qualification who shall determine Fair Market Rent within thirty
(30) days of appointment. In such event, the average of the
amounts determined by the three (3) arbitrators shall be deemed
the Fair Market Rent. Any determination of the arbitrators as
aforesaid shall be binding upon Landlord and Tenant for the
purposes of this Section 43. The cost of the arbitration
pursuant to this Section 43 shall be split equally between the
Landlord and Tenant. Until such time as the Fair Market Rent
shall be changed or modified pursuant to the foregoing
provisions, the Fair Market Rent for the purposes of this Section
43 shall be the most recent determination of Fair Market Rent.
Until such Fair Market Rent is determined as aforesaid, the Fair
Market Rent for the purposes hereof shall be considered to be
$6.92 per square foot of Rentable Area of the Premises. Until
the Rentable Area of the Premises and the Base Rent is determined
as set forth herein, for the purposes of calculating the Casualty
Termination Payment only, the Rentable Area of the Premises shall
be considered to be 225,861 square feet and the Base Rent shall
be considered to be $6.92 per square foot.
(b) "Fair Market Rent" for the purposes of this
Section 43 shall mean the base rental which would be offered to a
tenant for comparable space of comparable size to the Premises in
office buildings comparable to the Building (herein the "Chicago
Business District Market") as of the time such Fair Market Rent
is being determined, assuming reasonable improvement allowances,
abatements and tenant concessions as are then being offered to
prospective tenants and for a term equal to the initial term of
the Lease.
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IN WITNESS WHEREOF, the parties have caused this Lease
to be executed as of the date first above written.
LANDLORD:
AT&T COMMUNICATIONS, INC., a
Delaware corporation
By: /s/ G. A. Decker
Its: Real Estate
Vice President
TENANT:
CHICAGO AND NORTH WESTERN
TRANSPORTATION COMPANY, a
Delaware corporation
By: /s/ Robert Schmiege
Its: President
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SCHEDULE OF EXHIBITS
EXHIBIT A - Premises
EXHIBIT B - Workletter
EXHIBIT C - Tenant Roof Space
EXHIBIT D - Direct Lease Option and Consent Agreement
EXHIBIT E - Furniture
EXHIBIT F - Economic Terms
EXHIBIT G - Main Lease
EXHIBIT H - Videos
EXHIBIT I - Lobby Work
EXHIBIT J - Option Notice
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EXHIBIT A
PREMISES
The premises is a minimum of 206,697 rentable square
feet and a maximum of 245,025 rentable square feet to be located
on contiguous floors six (6) through eleven (11), seven (7)
through twelve (12) or six (6) through twelve (12) in the
building known as AT&T Corporate Center, 227 West Monroe, County
of Cook, Illinois 60606.
Rentable square footage, per floor, is as follows:
FLOOR RSF
6 38,328
7 35,231
8 35,137
9 34,503
10 34,330
11 34,330
12 33,166
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EXHIBIT B
WORKLETTER
OFFICE SUBLEASE
AT&T CORPORATE CENTER
CHICAGO, ILLINOIS
This is the Workletter referred to in the foregoing Office
Sublease by and between AT&T Communications, Inc. ("Landlord"),
and Chicago and North Western Transportation Company ("Tenant")
(the "Lease") wherein Tenant agrees to lease from Landlord the
Premises in the Building at 227 West Monroe Street, Chicago,
Illinois. The words "Premises" and "Building" and other
capitalized or defined terms used herein shall have the
respective meanings assigned to them in the Lease, except as
otherwise provided or defined herein.
For and in consideration of the agreement to lease the
Premises and the mutual covenants contained herein and in the
Lease, Landlord and Tenant agree as follows:
1. Work.
(a) Shell and Core Work. Main Landlord, at its sole cost
and expense, has constructed the shell and core of the Building,
as described on Attachment A to the Workletter of the Main Lease.
In connection with the construction of the Tenant Work (as
hereinafter defined), Landlord agrees, to the extent the same are
within Landlord's control or possession, to make available to
Tenant the working drawings and specifications with respect to
the Premises and to request Main Landlord, to the extent the same
are within Main Landlord's control or possession, to make the
working drawings and specifications for the Building available to
Tenant in the Landlord's office in the Building at reasonable
times and upon the prior written request of Tenant.
(b) Tenant Work. At Tenant's sole cost and expense, except
as provided hereinafter, Tenant shall provide (or cause to be
provided) the material, hardware, equipment and labor used to
construct and install improvements to the Premises as described
on the Plans (as hereinafter defined), such items and labor being
herein referred to as the "Tenant Work". In connection with the
Tenant Work, Tenant shall, at no additional cost, have reasonable
access to, use of, and the right to make utility connections
with, the facilities and equipment described in Attachment A to
the Workletter of the Main Lease, including all substitutions
therefor and replacements thereof, but only to the extent the
same are described and set forth in the Plans. Tenant shall
proceed diligently to cause the Tenant Work to be completed at or
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before the Commencement Date; provided, however, in the event of
any delay in the Tenant Work caused solely by: (i) any breach or
default by Landlord of its obligations under this Workletter
(other than as a result of a Force Majeure event), or (ii) the
negligence or willful misconduct of Landlord, Main Landlord, or
their respective contractors, agents or employees (collectively,
the delays described in subsections (i) and (ii), are referred to
as "Landlord Delays"), then, as Tenant's sole and exclusive
remedy hereunder, and provided Tenant has given Landlord written
notice of any such Landlord Delay and a period of five (5) days
to cure the same, the Commencement Date shall be extended for
each day of a Landlord Delay. Landlord agrees to reasonably
cooperate with Tenant, its architect, contractors and suppliers
and shall cause Main Landlord to do so (to the extent provided in
the Main Lease), such cooperation to include coordination and
scheduling of all work being performed in the Building and the
availability of building services for the performance of Tenant
Work.
2. Cost of Tenant Work. Except for Landlord's Allowance
as provided in this Workletter, the "Cost of the Tenant Work"
shall be paid for by Tenant and Landlord shall have no
responsibility or liability for the same. The "Cost of the
Tenant Work" shall include, but not be limited to: (i) the hard
costs and soft costs of construction (including any demolition to
the extent set forth in the Plans); (ii) general conditions
(including rubbish removal, hoisting, permits, temporary
facilities, safety and protection, cleaning, tools, blueprints
and reproduction, telephone, temporary power, field supervision
and the like); (iii) the cost of workers' compensation, public
liability, casualty and other insurance charged by contractors;
(iv) contractors' charges for overhead and fees; (v)
architectural and engineering fees incurred by Tenant and
Landlord (subject to Subsection 3(b) hereof) in connection with
the Tenant Work; (vi) the cost and expense of all base building
modifications required in order to accommodate the Tenant Work;
(vii) the cost of all labor and materials; (viii) reimbursement
of Landlord's actual out-of-pocket costs and expenditures for
supervising the Tenant Work; and (ix) the cost of providing
electrical and other incidental building charges during the
construction of the Tenant Work; provided, however, the Tenant's
liability for the costs and expenses described in subsection
(viii) and (ix) above shall not in the aggregate exceed Ten
Thousand and No/100 Dollars ($10,000.00) ("Supervision Fee").
3. Proposed and Final Plans.
(a) Proposed Plans. Tenant shall cause to be prepared and
delivered to Landlord, for Landlord's approval, on or before
March 1, 1995, the following proposed drawings and specifications
("Proposed Plans") for all Tenant Work to be completed in the
Premises.
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(i) Architectural drawings (consisting of floor
construction plan, space plan, ceiling lighting and layout,
power and telephone plan).
(ii) Mechanical drawings (consisting of HVAC,
electrical, telephone and plumbing, including, without
limitation, the Additional HVAC Units).
(iii) Finish schedule (consisting of wall finishes
and floor finishes and miscellaneous details).
(iv) Drawings of the demolition work, if any, to
be performed to the Premises, subject to, and in accordance
with, the terms and provisions of the Lease.
(b) Plan Preparation. The Proposed Plans shall be prepared
at Tenant's sole cost and expense by the Tenant's Architect
designated and employed by Tenant, which Proposed Plans and
Tenant's Architect are subject to the prior written approval of
Landlord and (to the extent required by the Main Lease) Main
Landlord. Landlord hereby acknowledges that any one of the
architects listed on Schedule A hereto are acceptable to Landlord
as a Tenant's Architect for the Tenant's Work. Landlord agrees
to reasonably cooperate with Tenant and the Tenant's Architect in
the development of the Proposed Plans. Tenant shall deliver
three sets of reproducible architectural drawings to Landlord.
Tenant shall reimburse Landlord for Landlord's direct cost of
hiring outside architects and engineers, provided Landlord agrees
to only hire outside architects and engineers to the extent that
Landlord does not have the applicable in-house expertise. Tenant
shall reimburse Landlord for all Landlord's direct outside
architect or engineer costs to review the Proposed Plans with
funds from the next draw under the Landlord's Allowance which is
next available after receipt of a demand from Landlord for such
payment. In no event shall Tenant incur any cost for Main
Landlord's review of any plans or inspection or supervision of
any Tenant Work. All architects and engineers employed by
Tenant, in addition to the Tenant's Architect, shall be competent
professional architects and/or engineers who are proficient in
the building code of the City of Chicago. All architects and
engineers employed by Tenant, in addition to the Tenant's
Architect, shall first be approved by Landlord and (to the extent
required by the Main Lease) Main Landlord, and any subsequent
changes thereto shall also require the prior written approval of
Landlord and (to the extent required by the Main Lease) Main
Landlord. Such approvals by Landlord shall not be unreasonably
withheld or delayed.
(c) Landlord's Approval. Landlord shall review the
Proposed Plans and notify Tenant in writing whether Landlord
approves or disapproves of such Proposed Plans within twenty (20)
business days after their delivery to Landlord. Landlord shall
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give Tenant its reasons for any disapproval in writing, which
writing may consist of handwritten remarks or markings on a copy
of the Proposed Plans. If Landlord disapproves of the Proposed
Plans, Tenant shall revise the Proposed Plans disapproved by
Landlord and resubmit such plans to Landlord. Landlord shall,
within ten (10) business days after receipt of Tenant's revised
plans, advise Tenant in writing of any additional changes which
may be required to obtain Landlord's approval. If Landlord
disapproves of the revised plans, Landlord shall specify in
writing the reason therefor (as aforesaid) and Tenant shall
revise such plans and resubmit them to Landlord. Landlord shall,
again within ten (10) business days after receipt of the revised
plans, advise Tenant in writing of further changes, if any,
required for Landlord's approval. This process shall continue
until Landlord has approved (or is deemed to have approved, as
hereinafter provided) Tenant's revised Proposed Plans, which
approval (unless deemed approved) shall be in writing. In the
event the revisions made are of material nature and are not
changes Landlord has requested, Landlord shall have twenty (20)
business days from their delivery to Landlord to review the
revised plans and respond to Tenant in writing as to its approval
or reasons for disapproval. Failure of Landlord to respond to
Tenant in writing within the times as aforesaid shall be deemed
Landlord's approval of the Proposed Plans and/or any revised
plans. "Plans" shall mean the Proposed Plans, as revised, which
have been approved by Landlord in writing (or deemed approved
without any writing) and will be described on Attachment A
attached hereto and made a part hereof. Upon approval as
aforesaid, the Landlord shall be authorized to describe such
Plans on Attachment A hereto. Notwithstanding the foregoing time
frames, Tenant shall be required to complete the final Plans no
later than May 30, 1995. Tenant shall have the right, at any
time after the Plans are approved (or deemed approved), to
request changes to the Plans in writing (each a "Change Order")
to reflect revisions desired by Tenant to the Tenant Work. All
Change Orders shall be approved (or deemed approved) by Landlord
in the same manner as provided for approval or disapproval of the
Proposed Plans. Landlord shall not unreasonably withhold, delay
or condition any of the foregoing approvals, provided it shall be
reasonable for Landlord to object to any work that will
materially adversely affect the Main Premises, or if Main
Landlord has disapproved the Proposed Plans or Plans to the
extent its approval is required under the Main Lease. The Plans
may not be revised without the prior written approval (or deemed
approval) of Landlord and (to the extent required under the Main
Lease) Main Landlord, which approval shall not be unreasonably
withheld, delayed or conditioned.
(d) Compliance with Requirements. All Proposed Plans and
Plans shall comply with all applicable laws, ordinances, rules,
regulations and orders of all federal, state, local or other
political subdivision or any other entity exercising
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administrative functions of or pertaining to government having
jurisdiction over the Real Property or Tenant (collectively,
"Requirements"). Neither review nor approval by Landlord of the
Proposed Plans or Plans shall constitute a representation or
warranty by Landlord that such plans either (i) are complete or
suitable for their intended purpose, or (ii) comply with
applicable Requirements, it being expressly agreed by Tenant that
Landlord assumes no responsibility or liability whatsoever to
Tenant or to any other person or entity for such completeness,
suitability or compliance. In any event, Tenant shall not occupy
the Premises unless it is legally permitted to do so.
4. Landlord's Allowance. Subject to the terms and
provisions contained herein, and provided Tenant is not in
default hereunder or in Default under the Lease, Landlord shall
contribute the sum of the product of the Landlord's Allowance Per
SQ/FT (as set forth in the Premises Amendment) times the Rentable
Area of the Premises (as set forth in the Premises Amendment)
("Landlord's Allowance") to be used solely toward (a) the Cost of
the Tenant Work; (b) any moving expenses incurred by Tenant in
connection with Tenant's move from its Existing Premises to the
Premises, and (c) the costs and expenses of purchasing and
installing any furniture and fixtures in connection with the
Premises; provided, however, at least seventy-five percent (75%)
of the Landlord's Allowance must be used for the total hard cost
(including, labor, material and wiring) of construction of the
Tenant Work. Landlord's Allowance shall be disbursed and paid to
Tenant subject to, and in accordance with, the terms and
provisions of Section 6 hereof. In the event the Cost of the
Tenant Work (and the cost of the other items set forth in (b) and
(c) above) shall be less than the Landlord's Allowance, Tenant
shall be entitled to such excess in the form of a credit toward
Base Rent due and payable under the Lease.
5. Agreements Regarding the Tenant Work.
(a) Permits. Tenant, at its sole cost and expense, shall
file the Plans with the appropriate governmental authorities
having jurisdiction over the Tenant Work. Tenant shall be
responsible for obtaining all permits, authorizations and
approvals necessary to complete the Tenant Work, but Landlord
shall reasonably cooperate with Tenant with regard thereto.
Tenant shall not commence the Tenant Work until the required
permits, authorizations and approvals for such work are obtained
and delivered to Landlord.
(b) Contractors. Tenant shall submit to Landlord, not less
than thirty (30) days prior to the commencement of the
construction of the Tenant Work, the following information and
items:
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(i) The names and addresses of the contractors
(including, without limitation, any general contractor)
performing all or any part of the Tenant Work ("Tenant's
Contractors"). Landlord and Main Landlord (to the extent
required under the Main Lease) shall have the right to
approve or disapprove (which approval as to Landlord shall
not be unreasonably withheld or delayed) Tenant's general
contractor and its primary subcontractors and any
substitutions or additions thereto, and Tenant shall employ,
as Tenant's Contractors, only those persons or entities
approved by Landlord and Main Landlord (to the extent
required under the Main Lease). All of Tenant's Contractors
must be licensed contractors, possessing good labor
relations, capable of performing quality workmanship and
working in harmony with Landlord's, Main Landlord's and
other tenants' contractors and subcontractors and with other
contractors and subcontractors on the job site. Landlord
hereby acknowledges that the contractors listed on Schedule
B hereto are acceptable as Tenant's Contractors for the
Tenant Work and that the specialized items listed on
Schedule C hereto to be installed in the Premises as part of
the Tenant Work are also acceptable.
(ii) The scheduled commencement date of
construction, the estimated dates of completion of
construction work and the estimated date of occupancy of the
Premises by Tenant.
(iii) Itemized statement of estimated construction
costs, and estimated costs of permits and fees,
architectural, engineering, and contracting fees, and all
other estimated costs of the construction of the Tenant
Work. Such itemized statement shall provide a breakdown of
hard costs and soft costs.
(iv) Not less than ten (10) days prior to the
commencement of the construction of the Tenant Work,
certificates of insurance as hereinafter described. Tenant
shall not permit Tenant's Contractors to enter into the
Building or to commence work until the required insurance
has been obtained and certified copies of policies or
certificates have been delivered to Landlord.
(c) Access to Premises. Tenant and Tenant's Contractors
shall, subject to, and in accordance with, the terms and
provisions of the Lease, have access to the Premises commencing
on the Possession Date (but not before) to perform the Tenant
Work, provided that Tenant and Tenant's Contractors work in
harmony and do not unreasonably interfere with the performance of
other work in the Building by Main Landlord, Landlord, their
respective contractors, other tenants or occupants of the
Building or their contractors, or with other tenants' use of
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their premises. If at any time such entry shall cause such
disharmony or interference, Landlord may terminate such
permission upon 24 hours' written notice to Tenant and Tenant's
failure to cure within a reasonable time under the circumstances,
and thereupon, Tenant and Tenant's Contractors causing such
disharmony or interference shall immediately withdraw from the
Premises and the Building until Landlord determines such
disturbance no longer exists. Notwithstanding anything to the
contrary set forth herein or in the Lease, Tenant shall not
occupy the Premises for the purposes set forth in Section 4 of
the Lease until July 1, 1996. From and after July 1, 1996,
Tenant may begin occupancy of the Premises for the purposes set
forth in Section 4 of the Lease by moving into the Premises on a
staged basis in units of no less than one-quarter (1/4) of a
floor per day.
(d) Inspection and Correction of Work. The Landlord, Main
Landlord and their architects, contractors and representatives
shall, upon notice to Tenant during Business Hours (as
hereinafter defined), have access to the Premises and the Tenant
Work for the purpose of inspecting and reviewing the same during
the construction of the Tenant Work.
(e) Landlord's Right to Perform. Landlord shall have the
right, but not the obligation, to perform (or cause to be
performed), on behalf of and for the account of Tenant, subject
to reimbursement by Tenant, any of the Tenant Work which (i) is
not in substantial compliance with the Plans, (ii) constitutes a
safety hazard or (iii) constitutes a risk to the Main Premises
and/or Building, provided Landlord has notified Tenant of the
fact that such work needs to be done and Tenant fails to do such
work within a reasonable amount of time taking into consideration
the nature of such work, including work that (x) pertains to
structural components or mechanical systems of the Building or
(y) pertains to the erection of temporary safety barricades or
signs during construction (collectively, "Landlord's Work").
(f) Additional Conditions for the Tenant Work. In addition
to the terms and conditions set forth in the body of this
Workletter, Tenant agrees that it shall cause the construction of
the Tenant Work to be performed in accordance with the additional
terms and conditions set forth on Schedule 1 attached hereto and
made a part hereof, which additional terms are hereby
incorporated into this Workletter by this reference, and in
accordance with the Rules and Regulations. All workmen or other
employees engaged by either Tenant or Tenant's Contractors shall
comply with the Rules and Regulations, the rules and regulations
set forth on Schedule 1 and with all Requirements.
(g) Protection of Building. Tenant acknowledges that
Landlord, Main Landlord and/or other tenants will be performing
other tenant improvement work in the Building from time to time.
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Such work by Landlord, Main Landlord or such other tenants shall
not be deemed to be an actual or constructive eviction, and any
obligations of Tenant under the Lease or this Workletter shall
not be affected or reduced. All work performed by Tenant and
Landlord shall be performed and coordinated by Landlord and
Tenant so as not to unreasonably interfere with the others' work
or with Main Landlord and other tenants and occupants of the
Building. Tenant and Landlord will each take all reasonable and
customary precautionary steps to protect their facilities and the
facilities of others affected by their work and to properly
police same. Construction equipment and materials to be used in
connection with the Tenant Work are to be located in confined
areas and delivery and loading of equipment and materials shall
be done at such reasonable locations and, subject to subsections
5(h) and (i) hereof, at such time as Landlord and/or Main
Landlord shall reasonably direct so as not to unreasonably
interfere with the use or operation of the Building. Tenant
shall at all times keep the Premises and adjacent areas free from
accumulations of waste materials or rubbish caused by its
suppliers, contractors or workmen. Landlord may require daily
clean-up and reserves the right to do clean-up at the expense of
Tenant if Tenant fails to comply with Landlord's reasonable
cleanup requirements. At the completion of the Tenant Work,
Tenant's Contractors shall forthwith remove all rubbish and all
tools, equipment and surplus materials from and about the
Premises and Building. Any damage caused by Tenant's Contractors
to any portion of the Building or to any property of Main
Landlord, Landlord or other tenants shall be promptly repaired
forthwith after written notice from Landlord to Tenant to its
condition prior to such damage by Tenant at Tenant's expense.
Any damage to the Premises caused by Landlord or Landlord's
contractors shall be promptly repaired forthwith after written
notice from Tenant to Landlord to its condition prior to such
damage at Landlord's expense.
(h) Freight Elevator. Landlord will provide (or cause to
be provided) freight elevator service in the Building, to include
the separate single freight elevator ("Separate Freight
Elevator") provided by Main Landlord to Landlord pursuant to
Section 5(d) of the Main Lease (collectively, the "Freight
Elevators") during the construction of the Tenant Work on the
following terms and conditions. Main Landlord or its agents will
at all times be responsible for the operation and maintenance of
the Freight Elevators. The Rules and Regulations with respect to
the use of the Freight Elevators shall be observed by Tenant and
Tenant's Contractors. Subject to the terms specified below,
during the construction of the Tenant Work and installation of
Tenant's furniture, fixtures and equipment, Tenant and Tenant's
Contractors shall have the non-exclusive right to use the Freight
Elevators daily between 7:00 a.m. and 6:00 p.m. (Saturdays
between 8:00 a.m. and 1:00 p.m.) (such daily and Saturday service
collectively, the "Business Hours") free of charge, provided,
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however, that such use shall be consistent and in harmony with
the use by all other parties and, provided further, with respect
to the Separate Freight Elevator, Landlord shall endeavor (but
shall not be obligated) to give Tenant priority use of the
Separate Freight Elevator between 7:00 a.m. (8:00 a.m. on
Saturdays) and 9:00 a.m. during Business Hours. Tenant's and
Tenant's Contractors' use of the Freight Elevators shall be
coordinated through the Landlord and/or Main Landlord. Tenant,
however, shall be obligated to reimburse Landlord or Main
Landlord (as applicable) for all of Landlord's or Main Landlord's
incremental costs and expenses of operating the Freight Elevators
("Freight Elevator Expenses") on weekends (unless during Business
Hours), Holidays and after Business Hours (collectively "After
Hours"). Tenant shall promptly pay to Landlord and/or Main
Landlord such costs within (30) days after receipt by Tenant of
an invoice from Landlord and/or Main Landlord.
(i) Loading Dock. Landlord will provide (or cause to be
provided) the loading dock in the Building, to include Tenant's
use of the separate thirty (30) foot loading dock and storage
area provided by Main Landlord to Landlord pursuant to Section
5(j) of the Main Lease ("Separate Dock and Storage")
(collectively, the "Loading Docks") during the construction of
the Tenant Work on the following terms and conditions. Main
Landlord or its agents will at all times be responsible for the
operation and maintenance of the Loading Docks. The Rules and
Regulations with respect to the use of the Loading Docks shall be
observed by Tenant and Tenant's Contractors. Subject to the
terms specified below, during the construction of the Tenant Work
and installation of Tenant's furniture, fixtures and equipment,
Tenant and Tenant's Contractors shall have the non-exclusive
right to use the Loading Docks during Business Hours free of
charge; provided, however, that such use shall be consistent and
in harmony with the use by all other parties and, provided
further, with respect to the Separate Dock and Storage, Landlord
shall endeavor (but shall not be obligated) to give Tenant
priority use of the Separate Dock and Storage between 7:00 a.m.
(8:00 a.m. on Saturdays) and 9:00 a.m. during Business Hours.
Tenant's and Tenant's Contractors' use of the Loading Dock shall
be coordinated through the Landlord and/or Main Landlord.
Tenant, however, shall be obligated to reimburse Landlord or Main
Landlord (as applicable) all of Landlord's or Main Landlord's
incremental costs and expenses of operating the Loading Docks
After Hours. Tenant shall promptly pay to Landlord and/or Main
Landlord such costs within (30) days after receipt by Tenant of
an invoice from Landlord and/or Main Landlord.
(j) Tenant's Move to the Premises. Tenant's move to the
Premises shall be scheduled and coordinated through Landlord
and/or Main Landlord and shall be performed under the supervision
and control of Landlord and/or Main Landlord. Tenant may not use
the front door or passenger elevators for its move-in. Landlord
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recognizes Tenant's desire to minimize move-in costs into the
Building and the Premises and will, to the extent reasonably
possible, and subject to the terms and provisions of subsection
(c), (h) and (i) above, cooperate with Tenant in the scheduling
of Tenant's move into the Premises.
(k) Compliance by all Tenant's Contractors. Tenant shall
impose and enforce all terms hereof on Tenant's Contractors and
its designers, architects and engineers. Landlord shall have the
right to order Tenant or any of Tenant's Contractors, designers,
architects or engineers who violate the terms of this Workletter
to cease work and remove himself or itself and his or its
equipment and employees from the Building if Tenant or any such
parties do not cease violating the terms of this Workletter
within twenty-four (24) hours after written notice from Landlord.
(l) Accidents, Notice to Landlord. Tenant's Contractors
shall assume responsibility for the prevention of accidents to
its agents and employees and shall take all reasonable safety
precautions with respect to the work to be performed and shall
comply with all reasonable safety measures initiated by the
Landlord and/or Main Landlord, the Rules and Regulations and with
all applicable Requirements for the safety of persons or property
in connection with the Tenant Work. Tenant shall advise Tenant's
Contractors to report to the Landlord any injury to any of its
agents or employees and shall furnish Landlord a copy of the
accident report filed with its insurance carrier within thirty
(30) days of its occurrence.
(m) Required Insurance. Tenant shall, or shall cause
Tenant's Contractors to, secure, pay for, and maintain during the
performance of the Tenant Work, insurance in the following
minimum coverages and limits of liability.
(i) Workmen's Compensation and Employer's
Liability Insurance with limits of not less than $1,000,000
and as required by any employee benefit acts or other
statutes applicable where the work is to be performed as
will protect Tenant's Contractors from liability under the
aforementioned acts.
(ii) Commercial General Liability Insurance
(including Owner's and Contractor's Protective Liability) in
an amount not less than $5,000,000 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 $5,000,000 and
with umbrella coverage with limits of not less than
$10,000,000.00 (except not less than $2,000,000 per
occurrence and a minimum aggregate limit of $2,000,000 if
the umbrella coverage is increased by at least $5,000,000).
Such insurance shall provide for explosion and collapse,
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completed operations coverage with a two-year extension
after completion of the Tenant Work, 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. Tenant's subcontractors shall maintain
Commercial General Liability Insurance in an amount not less
than $2,000,000 per occurrence, whether involving bodily
injury, property damage or a combination thereof with a
minimum aggregate limit of $2,000,000.
(iii) Business Automobile Liability Insurance,
including the ownership, maintenance, and operation of any
automotive equipment, owned, hired, or non-owned in an
amount not less than $2,000,000 for injuries sustained by
two or more persons in each occurrence and property damage
in an amount not less than $2,000,000 for each occurrence.
Tenant's subcontractors shall maintain such Comprehensive
Automobile Liability Insurance in amounts not less than
$1,000,000. Such insurance shall insure Tenant's
Contractors against any and all claims, subject to standard
exclusions, 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 Tenant Work to the full insurable value thereof.
Such insurance shall include the interest of Tenant and
Landlord (and their respective contractors and
subcontractors of any tier to the extent of any insurable
interest therein) in the Tenant 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 Tenant Work are stored off the site of the Building or
in transit to such site are not covered under such "all-
risk" builder's risk insurance, then Tenant shall effect and
maintain similar property insurance on such portions of the
Tenant Work. The waiver of subrogation provisions contained
in the Lease shall apply to the "all-risk" builder's risk
insurance policy to be obtained by Tenant or Tenant's
Contractors pursuant to this paragraph.
All policies (except the workmen's compensation) shall be
endorsed to include, as additional insured parties, the Landlord,
Main Landlord and their respective officers, employees, and
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agents, mortgagees, and such additional persons as Landlord may
reasonably designate. Tenant shall exercise its best efforts to
have all policies endorsed to provide that all carriers shall
furnish to the additional insured parties thirty (30) days' prior
written notice of any cancellation of coverage by certified mail,
return receipt requested (except that (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 such additional insured
parties. Landlord shall exercise reasonable efforts to furnish a
list of names and addresses of parties to be named as additional
insureds by a date which is no later than fifteen (15) days after
Tenant gives Landlord written notice that it has commenced the
Tenant Work. The insurance policies required hereunder shall be
considered as the primary insurance and shall not call into
contribution any insurance then maintained by Landlord, Main
Landlord or any other additional named insured. Additionally,
where applicable, such policy shall contain a cross-liability and
severability of interest clause.
To the fullest extent permitted by law, Tenant shall
indemnify and hold harmless the Landlord, its agents and
employees, from and against all claims, damages, liabilities,
losses and expenses of whatever nature, including but not limited
to reasonable attorneys' fees and expenses, the cost of any
repairs to the Premises or Building necessitated by activities of
the Tenant or Tenant's Contractors, bodily injury to persons or
damage to property of the Landlord, Main Landlord, other tenants,
and their employees, agents, invitees, licensees, or others,
arising out of or resulting from the performance of the Tenant
Work by the Tenant or Tenant's Contractors, except to the extent
the same are caused by the negligence or willful misconduct of
Main Landlord, Landlord, Landlord's contractors and its and their
employees, agents, contractors, invitees or licensees. Except as
otherwise provided for herein, the foregoing indemnity shall be
in addition to the insurance requirements set forth above and
shall not be in discharge or substitution of the same, and shall
not be limited in any way by any limitations on the amount or
type of damages, compensation or benefits payable by or for
Tenant's Contractors under Workers' or Workmen's Compensation
Acts, disability benefit acts or other employee benefit acts.
(n) Utilities. Utility costs or charges for any service
(including HVAC) to the Premises during performance of the Tenant
Work shall be the responsibility of the Tenant from the
Possession Date, but, with respect to such charges incurred
during Business Hours, in no event in excess of the Supervision
Fee. Tenant shall not, however, be charged for elevators or
elevator operators, during the period from the Possession Date to
Commencement Date, unless Tenant or Tenant's Contractors require
a manned elevator during such period.
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(o) Quality of Work. The Tenant Work shall be performed in
a first-class workmanlike manner using only good grades of
material and in compliance with the Plans, all insurance
requirements, applicable Requirements, the Rules and Regulations
and the rules and regulations set forth on Schedule 1.
(p) "As-Built" Plans. Within thirty (30) days of final
completion of the Tenant Work, Tenant shall furnish Landlord with
"as built" plans for the Premises and an occupancy permit for the
Premises (to the extent customarily available) or such other
evidence reasonably satisfactory to Landlord that Tenant may
legally occupy the Premises for its business operations.
6. Disbursements of Landlord's Allowance.
(a) Method of Disbursement. Landlord shall disburse, in
the amount set forth in Tenant's request, portions of the
Landlord's Allowance to Tenant (or, at Landlord's or Tenant's
option, directly into an escrow at Chicago Title and Trust
Company, pursuant to an escrow agreement in form and substance
reasonably satisfactory to Landlord and Tenant, and to which
Tenant would be a party, to be disbursed directly to Tenant
pursuant to the terms hereof and of said escrow agreement), from
time to time, within twenty (20) business days after receipt of
all of the materials and documentation specified in Subsection
(b) below. Disbursements of the Landlord's Allowance shall not
be made more frequently than monthly and shall not exceed the
amounts then payable (as certified to the Landlord by the
Tenant's Architect) to contractors, subcontractors and
materialmen with respect to the portion of the Tenant Work
theretofore completed and for which the disbursement was
requested. In the event Landlord or Tenant requests that
disbursements be made through a construction escrow at Chicago
Title and Trust Company, the party requesting the escrow shall
pay the cost of such escrow.
(b) Disbursement Documentation. Landlord's obligation to
make disbursements of the Landlord's Allowance shall be subject
to Landlord's receipt of: (i) a request for such disbursement
from Tenant signed by an officer of Tenant identifying what the
disbursements are to be used for and certifying that all of
Landlord's Allowance previously disbursed has been used for
permitted purposes and to pay all previously unpaid invoices and
bills furnished to Landlord in all prior requests (ii) copies of
all invoices or bills for the Tenant Work completed and materials
furnished in connection with the Tenant Work and incorporated in
the Premises and which is the subject for the payment of the
requested disbursement, (iii) a certificate of the Tenant's
Architect certifying the percentage of completion then attained
with respect to the portion of the Tenant Work theretofore
completed and for which the disbursement is requested was
performed in a good and workmanlike manner and in accordance with
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all Requirements and the Plans, (iv) if requested by Landlord,
copies of all contracts, subcontracts, purchase orders, work
orders, change orders and other materials relating to the work or
materials which is the subject of the requested disbursement, and
a list of all contractors, subcontractors and suppliers
performing work or supplying materials in connection with the
Tenant Work, whether directly to Tenant or through or on behalf
of any agent of Tenant, (v) waivers of lien, contractor's
statements and affidavits (and such other documents reasonably
required by Landlord and/or the escrowee (in the event
disbursements are being made through an escrow as set forth in
Subsection (a) above)) from all Tenant's Contractors and
materialmen involved in the performance of the Tenant Work, (vi)
a true and correct copy of the application for payment by
Tenant's Contractors for the Tenant Work completed to date,
including contractor's affidavits and sworn statements evidencing
the cost of the Tenant Work to date (or in the case of
subcontractors and materialmen, affidavits for the last preceding
draw request), and (vii) such other documents or instruments
reasonably requested by Landlord and/or the escrowee (in the
event disbursements are being made through an escrow as set forth
in Subsection (a) above) in order to protect Landlord and/or Main
Landlord from any potential mechanics or other liens. In the
event Landlord notifies Tenant in writing within twenty (20)
business days from a disbursement request that it has identified
an inconsistency in any of the aforementioned information and
documentation, then Landlord shall fund the Landlord's Allowance
only to the extent such information and documentation is
consistent and Landlord and Tenant hereby agree to promptly work
in good faith to resolve any such inconsistencies as soon as
possible. In the event Landlord shall fail to disburse any
portion of the Landlord's Allowance when the same is due and
payable, Tenant shall have all rights and remedies available at
law or equity, including the right to set-off such amounts of the
Landlord's Allowance which are due and payable and not paid by
the Landlord against the Rent due Landlord from Tenant under the
Lease.
(c) Landlord's Maximum Obligation. In no event shall the
aggregate amount paid by Landlord to Tenant for the Tenant Work
under the Lease or this Workletter exceed the amount of the
Landlord's Allowance. It is understood and agreed that Tenant
shall complete, at its expense, the Tenant Work whether or not
the Landlord's Allowance is sufficient to fund such completion.
(d) Lien Waivers. Within thirty (30) business days after
completion of the Tenant Work, Tenant shall deliver to Landlord
general releases and final waivers of lien from Tenant's
Contractors, and all contractors, subcontractors and materialmen
involved in the performance of the Tenant Work and the materials
furnished in connection therewith (except no general releases and
final waivers of lien shall be required where Tenant is in good
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faith contesting any claim for labor furnished or material
supplied to the Premises during the pendency of any such claim
provided that Tenant furnish Landlord with a satisfactory bond,
title insurance or indemnity), and a certificate from the
Tenant's Architect certifying that the Tenant Work has been
substantially completed in accordance with the Lease and this
Workletter, all Requirements and the Plans.
(e) Additional Costs. Tenant agrees to reimburse Landlord
for the following costs: (i) the Supervision Fee, (ii) all
Landlord's direct and outside costs and expenses reasonably
incurred in performing the Landlord's Work and (iii) to the
extent any additional services are requested by Tenant (or
necessitated by Requirements and not performed by Tenant or
Tenant's Contractors), Landlord's direct costs in connection
therewith. Bills for the foregoing work by Landlord shall be due
and payable no later than thirty (30) days after delivery of such
bills to Tenant. If Tenant further fails to pay, then Landlord
may, in addition to any other rights and remedies, deduct such
amounts from the Landlord's Allowance. Landlord agrees that any
and all such bills are subject to audit by Tenant within 60 days
after Tenant's receipt thereof and agrees to provide Tenant's
representative access, during Business Hours at the Main
Premises, to any and all records supporting such bills and/or to
provide Tenant with a copy of all supporting records.
7. Miscellaneous.
(a) Except as herein or in the Lease expressly set forth,
Landlord has no agreement with Tenant and has no obligation to do
any other work or pay any amounts with respect to the Premises.
Any other work in the Premises which Tenant may be permitted by
Landlord to perform prior to commencement of the Term shall be
done at Tenant's sole cost and expense and in accordance with the
terms and conditions of the Lease, including, without limitation,
Section 11, and such other requirements as Landlord reasonably
deems necessary. Any additional work or alterations to the
Premises desired by Tenant after the Commencement Date shall be
subject to the provisions of Section 11 of the Lease.
(b) No modification, waiver or amendment hereof shall be
binding upon Landlord or Tenant unless in writing and signed by
Landlord, Tenant and (to the extent required under the Main
Lease) Main Landlord.
(c) Time is of the essence under this Workletter.
(d) Any person signing this Workletter on behalf of
Landlord or Tenant warrants and represents he has authority to do
so.
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(e) Tenant and Landlord agree that, in connection with the
construction of the Tenant Work and Tenant's use of the Premises
prior to the Commencement Date, Tenant shall have those rights,
duties and obligations with respect thereto that it has pursuant
to the Lease during the Term, except the obligation for payment
of the Rent.
(f) Except as otherwise herein provided, any amounts owed
by Tenant or Landlord hereunder and not paid when due or upon
Tenant's or Landlord's failure to perform any of their other
obligations hereunder, Tenant and Landlord shall each have all of
the rights and remedies granted to them under the Lease for
nonpayment by Tenant or Landlord of any amounts owed thereunder
or failure by Tenant or Landlord to perform any of their other
obligations thereunder.
(g) Notices under this Workletter shall be given in the
same manner as under the Lease.
(h) Neither Main Landlord, Landlord, AT&T nor Stein &
Company shall have any responsibility for construction means,
methods or techniques or safety precautions in connection with
the Tenant Work, or for the accuracy or completeness of the Plans
or any design error therein or any costs attributable to any lack
of adequacy of or any design error in the Plans.
(i) This Workletter shall be governed by and construed in
accordance with Illinois law.
(j) Nothing contained herein shall be deemed or construed
as creating the relationship of principal and agent, or a
partnership or a joint venture between the parties hereto, nor
shall any acts of the parties hereto, be deemed to create any
relationship of licensor and licensee. The Tenant's Contractors
shall not hold themselves out to any third party either as
partner, joint venturer with the Landlord or as agent for the
Landlord, nor shall the Landlord's contractors hold themselves
out to any third party either as a partner, joint venturer with
the Tenant or as an agent for or employee of the Tenant.
(k) Clauses, plats, exhibits, schedules, attachments and
riders, if any, endorsed on or affixed to this Workletter are
hereby incorporated into this Workletter and made a part hereof.
(l) The headings of Sections and Subsections are for
convenience only and do not limit, expand, or construe the
contents of such Sections and Subsections.
(m) Tenant agrees: (i) to accept performance by Main
Landlord of any of the terms, provisions and agreements contained
herein which are obligations of Landlord under the Lease or this
Workletter, and (ii) to the extent Landlord hereunder has agreed
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to cause Main Landlord to perform obligations pursuant to, and in
accordance with, the terms and provisions of the Main Lease,
Tenant will accept performance of such obligations directly from
Landlord in the event Landlord, in its sole discretion, elects to
perform such obligations.
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IN WITNESS WHEREOF, the parties hereto have executed
this Workletter as of the date of the Lease.
LANDLORD:
AT&T COMMUNICATIONS, INC.,
a Delaware Corporation
By: /s/ G. A. Decker
Its: Real Estate
Vice President
TENANT:
CHICAGO AND NORTH WESTERN
TRANSPORTATION COMPANY,
a Delaware corporation
By: /s/ Robert Schmiege
Its: President
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SCHEDULE 1
A. Requirements of Tenant's Contractors.
1. Temporary Services. Subject to Landlord's and (to the
extent required under the Main Lease) Main Landlord's prior
approval, all temporary services shall be provided as follows:
(a) Toilets: Tenant's Contractors shall be allowed to use
the base building toilets in the Premises, provided
that same are returned to Landlord in their original
condition and maintained in an operable condition, all
in conformity with local regulations. Tenant's
Contractors shall clean the facilities regularly.
(b) To the extent that in addition to the use of the
existing electrical service Tenant's Contractors
require temporary feeder cables, service panels, cut-on
switches, and other equipment necessary to carry
service to required locations from the nearest source
such additional service shall be furnished and
installed at the expense of the Tenant's Contractors
and removed by same when no longer required. It shall
be the responsibility of the Tenant's Contractors to
determine the necessary power and light requirements
for all trades. Defective work will not be excused on
the plea that insufficient light and power were
provided. Tenant's Contractors shall pay for all
necessary permits from proper authorities.
(c) Temporary water supply: To the extent that in addition
to the use of the existing water supply Tenant's
Contractors require a temporary water supply, Tenant's
Contractors shall make all necessary arrangements for
the provision of water including temporary piping and
hose extensions required for construction purposes.
The cost of such arrangements, but not the cost of any
water used by Tenant or Tenant's Contractors, shall be
the sole obligation of either Tenant or Tenant's
Contractors. The Tenant's Contractors shall use the
utmost care in the use of water. Damage resulting from
the use of water by the Tenant's Contractors shall be
repaired at its own expense.
(d) Removal of temporary services: Temporary services
installed by the Tenant's Contractors shall be removed
by the Tenant's Contractors upon completion of the
contract or as directed by the Landlord. Any repairs
or alterations necessitated by such removal shall be
made by the Tenant's Contractors.
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2. Security. Only previously authorized personnel will be
permitted on the construction site. The Tenant's Contractors
shall, prior to the commencement of the Tenant Work, submit to
the Landlord the names of all subcontractors, material suppliers
and personnel employed or engaged by the Tenant's Contractors who
will be present on the site.
3. Safety. The Tenant's Contractors shall take all
necessary precautions for the safety of employees and protection
of the Tenant Work, the Building and of adjoining property, and
shall comply with all applicable Requirements and Rules and
Regulations to prevent accidents, injury to person, loss of life
and damage to property.
(a) The Tenant's Contractors shall not permit any part of
the Building to be loaded in excess of the load limits
established by Main Landlord.
(b) The Tenant's Contractors shall erect and properly
maintain at all times, as required by conditions and
the progress of the work, all necessary safeguards for
the protection of workmen, the Landlord, Main Landlord,
and the public in accordance with all applicable
Requirements and Rules and Regulations.
(c) The Tenant's Contractors shall provide Landlord
adequate notice of any smoke producing operations.
These operations shall be prohibited during Business
Hours unless approved in writing by the Landlord.
Notwithstanding anything contained herein to the
contrary, it is expressly agreed that in no event is Landlord
responsible or liable to any person or entity for Tenant, its
employees or agents' compliance with safety regulations,
Requirements and Rules and Regulations. Tenant covenants that
all contracts with respect to the Tenant Work shall contain
language releasing Landlord from any liability for same.
4. Protection of Work, Property, and Persons. Tenant
shall require in its contract with Tenant's Contractors that such
contractor protect the Tenant Work and the employees, equipment
and property of Landlord from damage caused by Tenant's
Contractor and its employees.
(a) Tenant agrees that it will not enter into any
agreements with Tenant's Contractors, or waive or
release any rights or claims (whether existing or
future) against Tenant's Contractors that would in any
way limit Landlord or Main Landlord from pursuing
Tenant's Contractors for any injury, loss, or damage to
the Building caused by Tenant's Contractors or their
employees, agents, or subcontractors; and in the event
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of such injury, loss, or damage, Tenant will cooperate
with Landlord to cause Tenant's Contractor to promptly
make such repairs or replacements as required by
Landlord, without additional cost to the Landlord or
Tenant.
(b) The Tenant's Contractors shall, if necessary, seal off
their work so as not to interfere with the Landlord's,
Main Landlord's and other tenants' business operations.
(c) During the progress of the work, the Tenant's
Contractors shall protect the Building and all finished
work as soon as same is erected and shall maintain such
protection until such time as it is no longer required.
5. Cleaning. The Tenant's Contractors shall at all times
keep the Premises reasonably free from accumulation of waste
materials or rubbish caused by its employees, subcontractors, or
Tenant Work, and shall coordinate such cleaning and removal of
materials with Landlord in accordance with Rules and Regulations.
6. Life Safety Systems. Tenant and/or Tenant's
Contractors shall give prior notice to and engage in prior
consultation with Landlord and/or Main Landlord, or such person
as Landlord and/or Main Landlord shall designate, with respect to
the connections with any life safety systems.
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Schedule A
APPROVED TENANT'S ARCHITECT LISTING
ISI
600 W. Fulton
Chicago, IL 60606
312/454-9100
Lieber Architect, Inc.
444 N. Michigan Avenue
Chicago, IL 60611
312/527-0800
Mekus Johnson, Inc.
455 E. Illinois
Chicago, IL 60611
312/661-0778
Perkins & Will
123 N. Wacker Drive
Chicago, IL 60606
312/977-1100
Powell-Kleinschmidt
645 N. Michigan Avenue
Chicago, IL 60611
312/642-6450
DeStephano Partners
445 E. Illinois, Suite 650
Chicago, IL 60611
312/836-4321
VOA
(Vickrey-Ovresat-Awsumb Associates)
224 S. Michigan Avenue
Chicago, IL 60604
312/554-1400
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Schedule B
APPROVED TENANT'S CONTRACTOR LISTING
PEPPER CONSTRUCTION
643 N. Orleans
Chicago, IL
312/266-4700
LA SALLE PARTNERS CONSTRUCTION
11 S. LaSalle
Chicago, IL
312/726-6103
INTERIOR ALTERATIONS, INC.
550 W. Jackson
Chicago, IL
312/454-1599
SCHAL ASSOCIATES
200 W. Hubbard
Chicago, IL
312/245-1000
REED ILLINOIS CORPORATION
930 W. Division
Chicago, IL
312/943-8100
KROESCHEEL ENGINEERING CO.
215 W. Ontario
Chicago, IL
312/649-7980
MIDWEST INTERSTATE ELECTRICAL
CONSTRUCTION CO.
1355 W. North Avenue
Chicago, IL
312/342-2600
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Schedule C
APPROVED EQUIPMENT LISTING
1. LIEBERT (HVAC) UNITS.
2. Use of a halon replacement substance as a fire suppression
agent in critical Tenant designated areas (would be in lieu
of water sprinkling system) provided such replacement
substance is permitted under applicable laws, ordinances and
codes (including, without limitation, the City of Chicago
building code).
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Attachment A
PLANS
The Plans will be submitted by Tenant to Landlord and
Main Landlord for review and approval. These Plans will include,
but not be limited to, construction, electrical, mechanical,
plumbing, communications and finishing drawings and
specifications for the Tenant improvements.
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EXHIBIT C
TENANT ROOF SPACE
Tenant's roof space consists of 175 square feet of
contiguous flat space on the roof of the building known as AT&T
Corporate Center, 227 West Monroe, Chicago, County of Cook,
Illinois 60606. Tenant roof space will be used solely for the
puporses of construction, installation, operation, maintenance
and use of telecommunications equipment and an enclosed equipment
room.
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EXHIBIT D
DIRECT LEASE OPTION, ATTORNMENT, RECOGNITION
AND CONSENT AGREEMENT
THIS DIRECT LEASE OPTION, ATTORNMENT, RECOGNITION AND
CONSENT AGREEMENT ("Agreement") is entered into as of October 25,
1993, by AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO, not
personally but solely as Trustee under Trust Agreement dated
April 1, 1985, and known as Trust No. 64020 ("Main Landlord"),
AT&T COMMUNICATIONS, INC., a Delaware corporation ("Landlord"),
AMERICAN TELEPHONE AND TELEGRAPH COMPANY, a New York corporation
(successor-in-interest to AT&T Information Systems) ("AT&T"),
CHICAGO AND NORTH WESTERN TRANSPORTATION COMPANY, a Delaware
corporation ("Tenant") and THE TRAVELERS INSURANCE COMPANY, a
Connecticut corporation ("Mortgagee").
ARTICLE I
Recitals
A. This is the Direct Lease Option, Attornment,
Recognition and Consent Agreement referred to in the Office
Sublease by and between Landlord and Tenant of even date herewith
("Lease") wherein Tenant agrees to sublease from Landlord, and
Landlord agrees to sublease to Tenant, certain Premises in the
Building at 227 West Monroe Street, Chicago, Illinois. The words
"Premises" and "Building" and other capitalized or defined terms
used herein shall have the respective meanings assigned to them
in the Lease, except as otherwise provided or defined herein.
B. The parties hereto acknowledge that Landlord has
succeeded to the leasehold interest of AT&T Resource Management
Corporation, a New York corporation ("AT&T-RMC") by assignment
and is currently the tenant under that certain Office Lease made
as of December 31, 1985, but actually executed on May 16, 1986,
as amended by that certain First Amendment to Office Lease dated
July 29, 1988, and as the same has been, or may be, further
amended or modified from time to time ("Main Lease") by and
between Landlord (as successor-in-interest to AT&T-RMC), as
tenant, and Main Landlord, as landlord, which Main Lease covers
certain space in the Building, including, without limitation, the
Premises. AT&T is currently a tenant in the Building under its
Office Lease with Main Landlord made as of December 31, 1985, but
actually executed on May 16, 1986, as the same has been, or may
be, amended or modified from time to time ("AT&T Lease").
C. To evidence a loan made by Mortgagee to Main
Landlord in the principal amount of Three Hundred Seventy Million
Dollars ($370,000,000.00), Main Landlord executed that certain
Mortgage Note dated August 23, 1989, in the amount of Three
Hundred Seventy Million Dollars ($370,000,000.00) payable to the
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order of Mortgagee, which is secured by that certain First
Mortgage and Security Agreement dated August 23, 1989 executed by
the Main Landlord in favor of Mortgagee, together with the
Joinder, executed by AT&T/Stein Partnership and recorded in the
Cook County Recorder's Office on August 24, 1989, as Document No.
89394999, as the same has been, or may be, amended or modified
from time to time ("Mortgage").
D. Mortgagee and Landlord entered into that certain
Subordination, Non-Disturbance and Attornment Agreement dated
August 24, 1989, a copy of which is attached hereto as Exhibit A
("SNDA").
E. Main Landlord and Mortgagee acknowledge having
received a copy of the Lease (including the attached Workletter)
and that each has had an opportunity to review the Lease
(including the attached Workletter).
F. As a condition to entering into the Lease,
Landlord and Tenant require the execution and delivery of this
Agreement in order to establish certain additional rights and
obligations among the parties hereto as more particularly set
forth herein.
NOW, THEREFORE, in consideration of the covenants,
terms, conditions, agreements and demises herein contained, and
for other good and valuable consideration, each to the other, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree, covenant and warrant as follows:
ARTICLE II
Agreements
2.1 Consent to Lease. Mortgagee and Main Landlord (to
the extent their respective consents are required) hereby consent
to, and approve of, the terms and provisions of the Lease
(including, without limitation, the Workletter and the terms and
provisions set forth in Sections 5, 7, 11, 12, 18(d), 25, 30, and
42 thereof); provided, however, this Agreement shall in no way
release Landlord from any of its covenants, agreements,
liabilities and duties under the Main Lease. It is further
agreed that, except as specifically provided in subsection 3(o)
hereof, Landlord shall be responsible for the collection of all
Rent due it from Tenant under the Lease, it being understood and
agreed that Main Landlord is not a party to the Lease, and except
as otherwise stated in the Main Lease or in this Agreement, is
not obligated to Landlord or Tenant for any of the duties or
obligations contained in the Lease.
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2.2 Specific Agreements Regarding Main Lease.
(a) Upon either: (i) termination of the Main Lease as
a result of a "Default" (as such term is defined in the Main
Lease) thereunder by Landlord (other than any Default caused, in
whole or in part, directly or indirectly, as a result of a
default by Tenant under the Lease or any other act or omission of
Tenant, its agents, employees or invitees), (ii) the rejection of
the Main Lease by Landlord as debtor-in-possession or by
Landlord's trustee in bankruptcy, or (iii) any other termination
of the Main Lease other than: (A) pursuant to Sections 13 and 14
thereof, (B) as a result of a "Default" (as such term is defined
in the Main Lease) thereunder by Landlord which is caused, in
whole or in part, directly or indirectly, as a result of a
default by Tenant under the Lease or any other act or omission of
Tenant, its agents, employees or invitees, or (C) as a result of
the expiration of the term of the Main Lease (each of the
foregoing being referred to herein as a "Termination Event"), and
provided that at the time of such Termination Event the Lease is
in full force and effect and Tenant is not in Default thereunder,
Tenant shall attorn to and recognize Main Landlord as Tenant's
lessor under the Lease and Main Landlord agrees to accept such
attornment and to recognize Tenant as its lessee and itself as
lessor under the Lease. Upon such attornment, the Lease,
including any and all amendments or modifications thereto, shall
continue in full force and effect as a direct lease between
Tenant and Main Landlord with direct privity of estate and
contract, upon all the terms and conditions contained in the
Lease as though the Lease was originally made as a direct lease
between Main Landlord and Tenant (modified only to reflect a
conversion from a sublease to a direct lease) and Main Landlord
shall recognize and give effect to the Lease and the rights of
Tenant thereunder (including, without limitation, Tenant's right
to receive services pursuant to, and in accordance with, Section
5 of the Lease) and shall not disturb the peaceful possession and
quiet enjoyment of Tenant in and to the Premises, except as
permitted in accordance with the terms of the Lease. Any such
attornment shall be effective and self-operative as of the date
of such Termination Event without the execution of any further
instrument; provided, however, that upon the written request of
Main Landlord or Tenant, Main Landlord and Tenant shall execute
and deliver any such instruments as shall be reasonably
satisfactory to Main Landlord and Tenant to confirm such
attornment. Such attornment shall provide Main Landlord with all
rights and obligations of the Landlord under the Lease and Tenant
shall thereafter be obligated to Main Landlord to perform all of
the obligations of Tenant thereunder. Main Landlord shall have
no liability to Tenant prior to any such attornment, nor shall
the performance by Tenant of its obligations under the Lease,
whether before or after any such attornment, be subject to any
abatement, reduction, set-off (except to the extent expressly set
forth in subsection 5(k) of the Lease and in this Agreement),
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counterclaim, defense or deduction, or otherwise be affected, by
reason of any default by Landlord in the performance of any
obligation to be performed by Landlord under the Lease.
Notwithstanding anything contained herein to the contrary, upon
the occurrence of a Termination Event and attornment as
aforesaid, Main Landlord and Tenant will enter into an amendment
or modification to the Lease which will give Tenant the benefit
of the Direct Lease Option set forth in subsection 2.3 hereof as
though the same were an extension option given to Tenant (and the
foregoing shall be in lieu of the Extension Options described in
Section 42 of the Lease).
(b) Notwithstanding anything to the contrary contained
herein or in the Lease, Main Landlord shall have no obligations
or liabilities under the Lease unless and until an attornment as
described above has occurred and, in such event, only with
respect to obligations and liabilities which first arise upon and
after the date of such attornment.
(c) As set forth in the first full paragraph of the
Main Lease, the Main Landlord hereby acknowledges and agrees that
in no event will a default under the AT&T Lease constitute a
default under the Main Lease.
(d) Main Landlord and Landlord hereby confirm that the
"Commencement Date" of the Main Lease is April 1, 1989 and that
the Lease-Up Period (as defined in the Main Lease) has expired.
(e) In the event both Landlord and Main Landlord have
the right to consent to, or approve, any matter contained in the
Lease with respect to Tenant, Landlord shall be deemed to have
consented to or approved such matter if Main Landlord shall have
consented to and approved such matter; provided, however, the
foregoing terms and provisions of this subsection 2.2 (e) shall
only be applicable for so long as the Main Landlord (or the sole
beneficiary of Main Landlord in the event Main Landlord is an
Illinois land trust) is an entity which is more than fifty
percent (50%) owned by AT&T or an entity owned or controlled by
AT&T. Notwithstanding the foregoing proviso, approval by
Landlord of the Plans (as defined in the Workletter) for the
Tenant Work, the Tenant's Architect, Tenant's Contractors (as
defined in the Workletter) and the specialized items described on
Exhibit C to the Workletter shall be deemed to be approval by the
Main Landlord. Tenant acknowledges and agrees that any approvals
or consents of the Main Landlord hereunder or under the Lease or
Workletter may be given by the sole beneficiary of the Main
Landlord in the event the Main Landlord is an Illinois land
trust.
(f) Landlord agrees to promptly furnish Tenant with
copies of any and all notices received from or delivered to Main
Landlord under the Main Lease to the extent such notices contain
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information which, in the reasonable opinion of Landlord, is
reasonably likely to have a material and adverse economic impact
on Tenant's tenancy as a subtenant under the Lease. A material
and adverse change in the level, quality or extent of services to
be furnished pursuant to Section 5 of the Lease shall be deemed,
for the purposes hereof, as reasonably likely to have a material
and adverse economic impact on Tenant's tenancy.
(g) Main Landlord agrees to promptly furnish Tenant
with copies of any and all notices it delivers to Landlord under
the Main Lease to the extent such notices contain information
which, in the reasonable opinion of Main Landlord, is reasonably
likely to have a material and adverse economic impact on Tenant's
tenancy as a subtenant under the Lease. A material and adverse
change in the level, quality or extent of services to be
furnished pursuant to Section 5 of the Lease shall be considered
as reasonably likely to have a material and adverse economic
impact on Tenant's tenancy.
(h) Main Landlord agrees that Tenant or its
representative shall have the right to examine Main Landlord's
books and records showing "Expenses" and "Taxes" (as such terms
are defined in the Main Lease), to the same extent, and subject
to the same terms and conditions, Landlord has the right to do so
under the Main Lease, upon reasonable prior notice and during
normal business hours at any time within fifty (50) days after
Tenant receives the copy of Landlord's Statement as set forth in
subsection 2(d) of the Lease. If Tenant objects to any item set
forth in Landlord's Statement it must furnish Landlord and Main
Landlord with written notice of such objection within said fifty
(50) day period ("Objection Notice"). Unless the Tenant shall
deliver the Objection Notice within the aforesaid fifty (50) day
period, such Landlord's Statement shall be considered as final
and accepted by the Tenant. Notwithstanding the foregoing, the
terms and provisions of this subsection 2.2(h) shall only be
applicable for so long as the Main Landlord (or the sole
beneficiary of the Main Landlord in the event the Main Landlord
is an Illinois land trust) is an entity which is more than fifty
percent (50%) owned by AT&T or an entity owned or controlled by
AT&T.
(i) Nothing herein contained or contained in the Lease
(i) shall be deemed a waiver or modification of the Main
Landlord's rights under the Main Lease, (ii) shall create any new
obligations for Main Landlord under the Main Lease, or (iii)
expand or modify in any way any of Main Landlord's obligations
under the Main Lease.
(j) Nothing contained in this subsection 2.2 shall
create any new obligations for Landlord or expand or modify in
any way any of Landlord's obligations under the Lease.
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(k) Whenever Tenant is required to obtain the consent
of Main Landlord under the terms and provisions of the Lease,
Main Landlord agrees that such consent shall not be unreasonably
withheld or delayed.
(l) Main Landlord agrees that prior to January 1,
1996, Main Landlord will use reasonable efforts to notify any
tenants in the Building constructing any improvements on the roof
of the Building after the date hereof of the rights of the Tenant
under Section 30 of the Lease.
2.3 Direct Lease Option. (a) Subject to the terms and
provisions of subsection 2.3(c) below, Tenant is hereby given the
option ("Direct Lease Option") to enter into a direct lease with
Main Landlord after the expiration of the initial Term of the
Lease ("Direct Lease"); provided, however, such Direct Lease
Option shall be subject to, and conditioned upon, the following:
(i) Tenant shall give Landlord and Main Landlord
written notice in the form attached hereto as Exhibit B ("Direct
Lease Notice") of its intent to exercise the Direct Lease Option
at least five hundred and fifty (550) days prior to the
expiration of the initial Term of the Lease (in the event Tenant
fails to deliver Landlord and Main Landlord the Direct Lease
Notice as aforesaid, the Direct Lease Option shall be deemed
waived by Tenant);
(ii) At the time Landlord and Main Landlord receive
the Direct Lease Notice set forth in subsection 2.3 (a)(i) above,
and at the expiration of the initial Term of the Lease, Tenant
shall not be in Default under the terms and provisions of the
Lease and the Lease shall be in full force and effect;
(iii) The Direct Lease shall be on the same terms and
conditions as set forth in the Lease, except: (A) such
modifications and revisions as are necessary to reflect the
conversion from a sublease to a direct lease, (B) the initial
term of the Direct Lease shall be for five (5) Lease Years, (C)
the Base Rent for the Direct Lease shall be ninety-five percent
(95%) of the then current Market Base Rent (as hereinafter
defined), and (D) the terms and provisions of Section 42 of the
Lease shall not be applicable, but Tenant shall (subject to
subsection 2.3(c) below) have one (1) option to extend the
initial term of the Direct Lease for a period of five (5)
additional Lease Years ("Direct Lease Extension Option"),
provided that: (I) Tenant gives Main Landlord and Landlord
written notice ("Extension Notice") at least five hundred and
fifty (550) days prior to the expiration of the initial term of
the Direct Lease of its intent to exercise the Extension Option
(in the event Tenant fails to deliver Main Landlord and Landlord
the Extension Notice as aforesaid, the Direct Lease Extension
Option shall be deemed waived by Tenant), (II) Tenant is not in
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Default under the Direct Lease either at the time of the delivery
of the Extension Notice or at the expiration of the initial term
of the Direct Lease, and (III) the Base Rent under the Direct
Lease for the term of the Direct Lease Extension Option shall be
ninety-five percent (95%) of the then current Market Base Rent.
(b) "Market Base Rent" for the purposes of this
subsection 2.3 shall be negotiated in good faith by the parties
and shall mean the base rental rate which would be offered to a
tenant for space of comparable size to the Premises in office
buildings comparable to the Building in the same geographic area
as the Building (herein the "Chicago Business District Market")
as of the time the Direct Lease Notice or Extension Notice (as
the case may be) is delivered; provided, however, Market Base
Rent as determined in this subsection 2.3(b) shall assume that
the proposed lease obligation would: (i) not impose on the Main
Landlord any cost for brokerage services to identify a tenant;
(ii) be a direct, full recourse obligation of an entity with the
creditworthiness of Chicago and North Western Transportation
Company, a Delaware corporation, as of the date the Direct Lease
Notice or Extension Notice (as the case may be) is delivered,
(iii) not provide Tenant with any tenant improvement construction
allowances, rent abatement or other concessions typical for a new
tenant; and (iv) provide for immediate commencement of Tenant's
obligation to pay rent without any delay because of, or cost with
respect to, marketing of space or the need to construct
improvements.
Main Landlord shall deliver to Tenant a written notice
within sixty (60) days after Main Landlord's receipt of the
Direct Lease Notice or Extension Notice (as the case may be)
("Main Landlord's Rent Notice") which shall specify the annual
Market Base Rent for the Direct Lease or Direct Lease Extension
Option (as the case may be) and monthly installments thereof.
Should Tenant disagree with the Market Base Rent so determined by
Main Landlord in the Main Landlord's Rent Notice and should
Tenant and Main Landlord be unable to mutually agree as to what
Market Base Rent should be, Tenant may demand by giving written
notice to Main Landlord, at any time within thirty (30) days of
Tenant's receipt of Main Landlord's Rent Notice, that the
determination of Market Base Rent be submitted to arbitration
("Arbitration Notice"); provided, however, in the event Tenant
fails to give the Arbitration Notice to Main Landlord within the
aforesaid thirty (30) day period, Tenant shall be deemed to have
accepted Main Landlord's determination of Market Base Rent. Such
arbitration shall be conducted in Chicago, Illinois in accordance
with the following: The Tenant shall designate simultaneously
with the delivery of its Arbitration Notice, and the Main
Landlord shall designate within fifteen (15) days after receipt
of an Arbitration Notice, the name of an arbitrator who holds an
M.A.I. designation or its equivalent and who is familiar with the
Chicago Business District Market rentals. Within thirty (30)
days after the designations, as aforesaid, the two (2)
arbitrators chosen shall each make their written decision as to
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the Market Base Rent. In the event the two (2) arbitrators agree
on the determination of Market Base Rent, said agreed amount
shall be the Market Base Rent for the purposes hereof. Should
such arbitrators disagree as to the Market Base Rent, but should
the higher determination of Market Base Rent be equal to or
within ten (10%) percent of the lower determination, the average
of the amounts determined by the two (2) arbitrators shall be
deemed the Market Base Rent; provided, however, in the event
Tenant is not satisfied with the amount of the Market Base Rent
as determined by the two (2) arbitrators as aforesaid, Tenant
shall have the right, to be exercised by written notice to
Landlord and Main Landlord ("Revocation Notice #1") within ten
(10) days after receipt of the written determination of the two
(2) arbitrators, to revoke its Direct Lease Notice or Extension
Notice (as the case may be) (but not the Option Notice given
pursuant to Section 42 of the Lease) in which event the Lease or
Direct Lease (as the case may be) shall remain in full force and
effect as if such Direct Lease Notice or Extension Notice (as the
case may be) had not been given by Tenant (in the event, however,
Tenant fails to give Revocation Notice #1 as aforesaid, it shall
be deemed to have approved and accepted the amount of Market Base
Rent determined by the two (2) arbitrators as aforesaid). In the
event the two (2) arbitrators are in excess of ten percent (10%)
apart, and, in the further event, Main Landlord and Tenant cannot
mutually agree as to the Market Base Rent within ten (10) days
after receipt of the determination by such two (2) arbitrators,
the two (2) arbitrators shall appoint a third arbitrator of equal
qualification who shall determine Market Base Rent within thirty
(30) days of appointment. In such event, the average of the
amounts determined by the three (3) arbitrators shall be deemed
the Market Base Rent; provided, however, in the event Tenant is
not satisfied with the amount of the Market Base Rent as
determined by the three (3) arbitrators as aforesaid, Tenant
shall have the right, to be exercised by written notice to
Landlord and Main Landlord ("Revocation Notice #2") within ten
(10) days after receipt of the written determination of the three
(3) arbitrators, to revoke its Direct Lease Notice or Extension
Notice (as the case may be) (but not the Option Notice given
pursuant to Section 42 of the Lease) in which event the Lease or
Direct Lease (as the case may be) shall remain in full force and
effect as if such Direct Lease Notice or Extension Notice (as the
case may be) had not been given by Tenant (in the event, however,
Tenant fails to give Revocation Notice #2 as aforesaid, it shall
be deemed to have approved and accepted the amount of Market Base
Rent determined by the three (3) arbitrators as aforesaid).
Unless Tenant delivers either Revocation Notice #1 or Revocation
Notice #2 as aforesaid, any determination shall be binding upon
Tenant and Main Landlord, and be enforceable by any court
exercising jurisdiction over the parties. The cost of the
arbitration, excluding fees of counsel for Main Landlord and
Tenant ("Cost of the Arbitration"), shall be divided equally
between the parties; provided, however, Tenant shall be solely
responsible for the Cost of the Arbitration in the event Tenant
delivers either Revocation Notice #1 or Revocation Notice #2 (as
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the case may be). In the event the arbitration is not resolved
at the end of the initial Term of the Lease (or initial Term of
the Direct Lease, as the case may be), the Direct Lease or
Extension Option (as the case may be) shall become effective
(subject to the terms of subsection 2.3(c) below and of the next
sentence) and Tenant shall pay as Base Rent during the initial
Term of the Direct Lease or Extension Option (as the case may be)
the Base Rent then being paid by Tenant under the Lease or the
Direct Lease (as the case may be). In such event, upon
determination of the Market Base Rent, the Rent paid during the
period of dispute shall be retroactively adjusted and appropriate
payment made; provided, however, in such event, the Tenant shall
have the right to be exercised upon written notice delivered to
Main Landlord and Landlord (except only Main Landlord in the case
of the Direct Lease Extension Option) within ten (10) days of
Tenant's receipt of the arbitrators' written determination of
Market Base Rent ("Arbitration Determination"), to terminate the
Direct Lease or Extension Option (as the case may be) effective
three hundred and sixty five (365) days from Tenant's receipt of
the Arbitration Determination. In the event Tenant fails to
deliver the termination notice within the aforesaid ten (10) day
period, Tenant shall be deemed to have accepted the Arbitration
Determination and shall no longer have the right to terminate the
Direct Lease as aforesaid.
(c) The parties hereto acknowledge and agree that the
Tenant's election to exercise its Direct Lease Option pursuant
to, and in accordance with, this subsection 2.3, shall be deemed
a concurrent exercise by Tenant of its Extension Option pursuant
to, and in accordance with, Section 42 of the Lease.
Notwithstanding the foregoing, if, after Landlord's receipt of
the Direct Lease Notice: (i) Landlord exercises its
corresponding option to extend the Main Lease pursuant to, and in
accordance with, Section 31 of the Main Lease, and such option to
extend actually takes effect, then Tenant's exercise of the
Direct Lease Option pursuant to this subsection 2.3 shall
automatically be null and void and Tenant shall be deemed to have
solely exercised the Extension Option pursuant to Section 42 of
the Lease; (ii) Landlord does not exercise its corresponding
option to extend the Main Lease pursuant to, and in accordance
with, Section 31 of the Main Lease, or such option to extend
after being exercised fails to actually take effect, then
Tenant's exercise of the Extension Option under the Lease shall
automatically be null and void and Tenant shall be deemed to have
solely exercised the Direct Lease Option pursuant to, and in
accordance with, this subsection 2.3; or (iii) Landlord elected
to exercise the first of its Extension Options pursuant to
Section 31 of the Main Lease, Tenant elected to exercise the
first of its Extension Options pursuant to Section 42 of the
Lease, and Landlord does not exercise its second Extension Option
pursuant to Section 31 of the Main Lease, then Tenant shall be
entitled to the Direct Lease Option pursuant to and in accordance
with the terms and provisions of subsection 2.3(a) above after
the expiration of the Tenant's first Extension Option except that
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the "Direct Lease Extension Option" discussed in subsection
2.3(a)(iii)(D) above shall not be applicable with respect
thereto. Landlord agrees to give Tenant a copy of the notice
sent to the Main Landlord by Landlord under Section 31 of the
Main Lease exercising Landlord's option to extend the Main Lease.
Notwithstanding anything to the contrary in subsection 2.3(b), in
the event subsection 2.3(c)(i) above is applicable, Landlord
shall be solely responsible for the Cost of the Arbitration.
2.4 Subordination, Non-Disturbance and Attornment
Agreement and Specific Agreements with Mortgagee.
(a) Mortgagee hereby represents, warrants and
covenants to Tenant as of the date hereof that Mortgagee is the
holder and owner of the Mortgage.
(b) Main Landlord represents, warrants and covenants
to Tenant as of the date hereof that the Main Lease is not
subordinate to any mortgage or ground lease, except the Mortgage.
(c) Mortgagee agrees that, for so long as the Lease
(including any extensions thereof) is in full force and effect,
Tenant (as the sublessee of Landlord under the Lease) shall be
entitled to the rights and benefits afforded to Landlord under
the SNDA and that the rights and benefits afforded to Landlord
under the SNDA shall, to the extent applicable, extend to the
Additional Tenant Rights (as hereinafter defined) and periods
covered by the Direct Lease.
(d) Tenant acknowledges and agrees that, in addition
to the consent of the Landlord and Main Landlord as set forth in
Section 12 of the Lease, the prior written consent of the
Mortgagee shall be required in connection with any mortgage by
Tenant of its interest in the Lease.
(e) Notwithstanding anything to the contrary set forth
herein or in the Lease, in no event will Mortgagee be liable for,
or be obligated to make, the Casualty Termination Payment set
forth in Section 13(a)(ii) of the Lease (including, without
limitation, in the event Mortgagee succeeds to the interests of
the Landlord under the Lease).
(f) Except as expressly set forth herein, nothing
contained in this subsection 2.4 shall create any new obligations
for Mortgagee or expand or modify in any way any of Mortgagee's
obligations under the SNDA.
ARTICLE III
Miscellaneous
3. (a) This Agreement is executed by American
National Bank and Trust Company of Chicago, not personally but
solely as Trustee under the provisions of a certain Trust
Agreement dated April 1, 1985, and known as Trust No. 64020. All
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the covenants and conditions to be performed hereunder by
American National Bank and Trust Company of Chicago are
undertaken by it solely as Trustee, as aforesaid and not
individually, and no personal liability shall be asserted or be
enforceable against American National Bank and Trust Company
Trust No. 64020, the beneficiaries of American National Bank and
Trust Company Trust No. 64020 or any partners of the
beneficiaries of American National Bank and Trust Company Trust
No. 64020 by reason of any of the covenants, statements,
representations or warranties contained in this Agreement.
(b) Each provision of this Agreement shall extend to
and shall bind and inure to the benefit not only of Mortgagee,
Main Landlord, AT&T, Landlord and Tenant, but also their
respective heirs, legal representatives, successors and assigns
(subject in the case of Tenant to subsection (m) below).
(c) No modification, waiver or amendment of this
Agreement or of any of its conditions or provisions shall be
binding upon Mortgagee, Main Landlord, AT&T, Landlord or Tenant
unless in writing signed by Main Landlord, AT&T, Landlord, Tenant
and Mortgagee (as the case may be).
(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
to corporations or other organizations, partnerships or other
entities, or individuals, shall, in all cases, be assumed as
though in each case fully expressed.
(e) The headings of Sections are for convenience only
and do not limit, expand or construe the contents of the
Sections.
(f) Time is of the essence of this Agreement and of
each and all provisions hereof.
(g) The invalidity of any provision of this Agreement
shall not impair or affect in any manner the validity,
enforceability or effect of the rest of this Agreement.
(h) In computing any period of time pursuant to this
Agreement, the day of the act, date of notice, event or default
from which the designated period of time begins to run will not
be included. The last day of the period so counted will be
included, unless it is a Saturday, Sunday or a legal holiday in
the State of Illinois, in which event the period runs until the
end of the next day which is not a Saturday, Sunday or such legal
holiday.
(i) All notices, demands, requests, consents and other
communications required or permitted to be given hereunder shall
be in writing and shall be personally served or sent by
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registered or certified mail, postage prepaid, return receipt
requested, or by an overnight courier service which provides
receipts of service, or by telecopy (with the hard copy thereof
sent by one of the other methods of delivery authorized by this
Section), addressed to the party to be so notified as at their
respective addresses as follows:
To Mortgagee: The Travelers Insurance Company
2215 York Road
Suite 504
Oak Brook, Illinois 60521
Attention: Managing Director and
John C. Murray
Telecopy: (708) 574-2208
with a copy to: The Travelers Insurance Company
One Towers Square
Hartford, Connecticut 06187
Attention: General Counsel
Telecopy: (203) 954-2620
To Tenant: Chicago and North Western
Transportation Company
One North Western Center
165 North Canal Street
Eighth Floor
Chicago, Illinois 60606
Attention: Senior Vice President -
Finance and Accounting and
Senior Corporate Real Estate
Counsel
Telecopy: (312) 559-6018
To Main Landlord: American National Bank and Trust
Company of Chicago as Trustee
under Trust No. 64020
33 North LaSalle Street
Chicago, Illinois 60690
Attention: Trust Officer
Telecopy: (312) 661-5373
To Landlord: AT&T Communications, Inc.
c/o AT&T Resource Management
Corporation
222 Mt. Airy Road
Basking Ridge, New Jersey 07920
Attention: District Manager, Real
Estate Joint Ventures
and
Attention: Senior Attorney
Telecopy: (908) 953-9113
Mailed communications shall be deemed to have been delivered upon
actual receipt thereof. Any person entitled to receive notice
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may change its address by notice given in accordance with this
Section.
(j) This Agreement may be signed in counterparts, each
of which shall be deemed an original but which together shall
constitute one and the same instrument, but in making proof, it
shall only be necessary to produce one such counterpart.
(k) The parties hereto each represent and warrant that
they are duly authorized to enter into this Agreement and perform
their obligations hereunder.
(l) This Agreement shall not be recorded, but a
reference to this Agreement (including the Direct Lease Option)
for notice purposes may be included in any short form of lease
which is recorded pursuant to the terms and provisions of the
Lease.
(m) Except in connection with an assignment of the
Lease as permitted in accordance with the terms and provisions
thereof, Tenant shall not assign, convey, encumber or transfer
any of its rights, duties or obligations under this Agreement
without the consent of Main Landlord and Landlord.
(n) The term "Main Landlord" as used in this Agreement
means only the landlord under the Main Lease and any successors
and assigns of Main Landlord under the Main Lease so that in the
event of any assignment, transfer or conveyance once or
successively, of the Main Landlord's interest in the Main Lease
to any other party who assumes the Main Landlord's obligations
under the Main Lease, said Main Landlord making such transfer,
conveyance or assignment shall be and hereby is entirely freed
and relieved of all covenants and obligations of Main Landlord
hereunder accruing after such transfer, conveyance or assignment,
and Tenant agrees to look solely to such transferee, or assignee
with respect thereto. The holder of a mortgage or trust deed (or
assignment in connection with a mortgage or trust deed) shall not
be deemed such an assignee under this paragraph. This Agreement
and the rights and obligations of Tenant hereunder shall not be
affected by any such assignment, transfer or conveyance and
Tenant agrees to attorn to the grantee or assignee.
(o) From and after the time that Tenant receives a
written notice from Main Landlord that Landlord is in "Default"
(as such term is defined in the Main Lease) under the Main Lease,
and only for so long as said "Default" (as such term is defined
in the Main Lease) is continuing and has not been cured, and
provided that: (i) the Main Lease and the Lease are still in
full force and effect, (ii) the "Default" (as such term is
defined in the Main Lease) by Landlord under the Main Lease was
not caused, directly or indirectly, as a result of a default by
Tenant under the Lease, and (iii) Tenant is not in Default under
the Lease, then Tenant may, and upon the request of Main Landlord
shall, pay all Rent and other amounts due under the Lease
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directly to Main Landlord at such place as Main Landlord may
direct, and in the absence of such direction, at the address of
the Main Landlord specified in Section 3(i) above. Concurrently
with the payment of any Rent by Tenant to Main Landlord as
aforesaid, Tenant shall deliver to Landlord written evidence that
such payments were made. Any payments of Rent by Tenant to Main
Landlord under this Section shall satisfy Tenant's obligations to
make said Rent payments under the Lease.
(p) Main Landlord hereby certifies to Tenant that, as
of the date hereof: (i) to the best of Main Landlord's knowledge
and belief, Landlord is not in Default under the Main Lease, (ii)
to the best of Main Landlord's knowledge and belief, Landlord is
paying Rent due under the Main Lease on a current basis with no
rental offsets or claims, and (iii) that there are no actions,
whether voluntary or otherwise, pending against Main Landlord
under the bankruptcy laws of the United States or any State
thereof.
(q) Landlord hereby certifies to Tenant that, as of
the date hereof: (i) to the best of Landlord's knowledge and
belief, Main Landlord is not in default of its obligations under
the Main Lease beyond applicable notice and cure periods, (ii)
that Landlord is paying Rent under the Main Lease on a current
basis with no rental offsets or claims, and (iii) that there are
no actions, whether voluntary or otherwise, pending against
Landlord under the bankruptcy laws of the United States or any
State thereof.
(r) Except as specifically set forth in subsection
2.2(a) hereof, this Agreement will terminate concurrently with
the termination of the Lease.
(s) Subject to the terms and provisions set forth
below, and provided that Tenant is not in Default under the terms
and provisions set forth in the Lease, Landlord and Main Landlord
hereby acknowledge and agree that Tenant shall have the following
additional rights ("Additional Tenant Rights") throughout the
Term of the Lease (including any extensions thereof and/or
pursuant to Tenant's possessory rights under the Direct Lease
Option) at no additional cost or charge to Tenant except as
specifically set forth below: (i) the right to use that portion
of the sixteenth (16th) floor mezzanine of the Building
consisting of approximately 800 square feet and more particularly
described on Exhibit C attached hereto ("Alternate Power Source
Space"), which Alternate Power Source Space shall be used by
Tenant solely for the purpose of constructing, installing,
operating, maintaining, inspecting, using and replacing an
uninterruptable power system ("UPS") and a second source power
system ("SSPS") for service to the computers and appurtenances
thereto from time to time installed in the Premises by Tenant
(without in any way limiting the foregoing, it is expressly
understood and agreed that the Alternate Power Source Space shall
not be used for office purposes); (ii) to the extent that the
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Main Landlord determines, in its sole discretion, that there is
sufficient space in the basement or on the roof of the Building,
Tenant shall have the right to use up to 500 square feet of such
space in the aggregate on such terms and conditions, and in such
location, as Main Landlord may determine (except that no rent
shall be charged therefore) ("Additional Power Source Space"),
which Additional Power Source Space shall be used by Tenant
solely for the purpose of installing and using an additional
standby power system ("SPS") in connection with the Premises; and
(iii) the right to use sufficient "chase", conduit, "raceways",
wire and pipes in the Building for plumbing and electrical
services from the UPS, SSPS and SPS to the Premises, or any part
thereof, all in accordance with: (A) the Upper Level 16 Piping
Plan, prepared by SOM and dated 5/28/87, (B) Lower Level 16
Piping Plan, prepared by SOM and dated 5/28/87, (C) Level 15
Piping Plan, prepared by SOM and dated 5/28/87 and (D) Level 2-14
Piping Plan, prepared by SOM and dated 5/28/87 (copies of (A),
(B), (C) and (D) have been delivered to, and received by,
Tenant). No rent shall be charged for the Additional Tenant
Rights, and Tenant's Proportionate Share shall not be increased
to reflect Tenant's use of the Alternate Power Source Space or
Additional Power Source Space. Tenant shall be solely
responsible for making all necessary arrangements with the
utility company for electric current consumed in connection with
the UPS, SSPS and SPS. In addition, any and all costs and
expenses incurred in connection with the construction,
installation, operation, maintenance, inspection, use and repair
of the UPS, SSPS and SPS shall be borne exclusively by Tenant.
The Tenant's construction and installation of the UPS, SSPS and
SPS as well as the rights set forth in subsection (iii) above,
shall be done pursuant to plans and specifications approved by
Main Landlord and Landlord, which approval shall not be
unreasonably withheld (including, without limitation, as to roof
installations, Main Landlord's and Landlord's approval of the
location, appearance and size thereof). In no event shall
Tenant's installations on the roof interfere with Landlord's,
Main Landlord's or other tenants use of existing roof top
installations. Tenant shall exercise the Additional Tenant
Rights in compliance with all laws, ordinances and regulations
(including, without limitation, zoning and building codes) and
any Rules and Regulations. Main Landlord and Landlord
acknowledge and agree that the UPS, SSPS and SPS shall be for
Tenant's exclusive use. Tenant hereby agrees that it shall not
have the right to assign or sublet any of the Additional Tenant
Rights separately from a sublease or assignment of a portion of
the Premises. Without in any way limiting the foregoing, Tenant
agrees to: (A) reimburse Main Landlord and/or Landlord for any
insurance premiums incurred by Main Landlord and/or Landlord (as
the case may be) which are attributable to the Additional Tenant
Rights, and (B) to indemnify and hold Main Landlord and Landlord
harmless from and against any and all loss, cost or liability
suffered or incurred by Main Landlord and/or Landlord, their
respective officers, partners, directors, employees or agents
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arising out of, or in connection with, the Additional Tenant
Rights.
(t) Neither Landlord nor Main Landlord shall require
Tenant to hoist any materials, equipment, machinery, furniture or
any other property in connection with the performance of Tenant's
Work (as defined in the Workletter) or Tenant's initial move into
the Premises.
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IN WITNESS WHEREOF, the parties hereto have executed
this Agreement effective as of the date first above written.
THE TRAVELERS INSURANCE COMPANY, a
Connecticut corporation
BY: /s/ Gene S. Thompson
Its: Assistant Secretary
AMERICAN NATIONAL BANK AND TRUST
COMPANY OF CHICAGO, not personally
but solely as Trustee under Trust
Agreement dated April 1, 1985, and
known as Trust No. 64020
BY: /s/ A. Smith
Its: Trust Officer
AT&T COMMUNICATIONS, INC., a
Delaware corporation
BY: /s/ G. A. Decker
Its: Real Estate
Vice President
AMERICAN TELEPHONE AND TELEGRAPH
COMPANY, a New York corporation
BY: /s/ G. A. Decker
Its: Real Estate
Vice President
CHICAGO AND NORTH WESTERN
TRANSPORTATION COMPANY, a Delaware
corporation
BY: /s/ Robert Schmiege
Its: President
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EXHIBIT A
TRAVELER'S SNDA
SEE ATTACHED
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TIC Loan No.: 205361
Address: 227 West Monroe Street
Chicago, Illinois 60603
Tax No. 17-16-209-012
SUBORDINATION, NON-DISTURBANCE AND
ATTORNMENT AGREEMENT
THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
(the "Agreement") made this 20th day of August, 1989 between:
THE TRAVELERS INSURANCE COMPANY, a Connecticut corporation,
herein for convenience referred to as "Mortgagee"; and
AT&T COMMUNICATIONS, INC., a Delaware corporation, as
assignee of AT&T RESOURCE MANAGEMENT CORPORATION, a New York
corporation, herein for convenience referred to as "Tenant":
R E C I T A L S:
A. Pursuant to the terms and conditions of that certain
Office Lease dated December 31, 1985 between American National
Bank and Trust Company of Chicago, as Trustee under Trust
Agreement dated April 1, 1985 and known as Trust No. 64020, as
landlord ("Landlord"), and Tenant, as tenant, as amended by that
certain First Amendment to Office Lease dated July 29, 1988
(collectively, the "Lease Agreement"), Tenant leased from
Landlord the premises (the "Leased Premises") as located in the
property legally described on Exhibit "A" attached hereto and
made a part hereof (the "Property").
B. To evidence a loan made by Mortgagee to Landlord in the
principal amount of THREE HUNDRED SEVENTY MILLION DOLLARS
($370,000,000.00) ("Loan"), Landlord executed its note dated
August 23, 1989, payable to the order of Mortgagee, which is
secured by a mortgage conveying the Property (of which Leased
Premises is a part), in favor of Mortgagee, recorded in the
Office of the Recorder of Deeds of Cook County, Illinois ad
Document Number 89394999 ("Mortgage").
C. As a condition to the initial disbursement of the
proceeds of Loan, Mortgagee requires that the interest of Tenant
in and to Leased Premises and Lease Agreement be subordinated to
the lien of Mortgage; PROVIDED, HOWEVER, that upon Tenant's
performance of all of the terms, covenants, conditions and
agreements required of it pursuant to Lease Agreement, Tenant's
possession of Leased Premises shall not be disturbed.
Page 1 of 7 Pages
NOW, THEREFORE, in consideration of the mutual covenants,
agreements and promises herein contained, the sufficiency of
which is hereby acknowledged, IT IS HEREBY AGREED AS FOLLOWS:
1. Lease Agreement is and shall continue hereafter to be
subject and subordinate to the lien of Mortgage, subject,
however, to the provisions of this Agreement.
2. In the event that Mortgagee or its successors, assigns,
nominees or any other party claiming by, through or under
Mortgagee (collectively "Successors") shall take possession of
Leased Premises by foreclosure, deed in lieu of foreclosure or
otherwise and Tenant is not then in default (beyond any grace
period set forth in Lease Agreement for curing the same) of any
covenant or condition of Lease Agreement to be performed by
Tenant, Tenant shall peaceably hold and enjoy Leased Premises for
the remainder of the unexpired term (including any extensions
thereof), which possession shall be without hindrance or
interruption.
3. Tenant shall not be joined as a party-defendant in any
action or proceeding which may be instituted or taken by
Mortgagee by reason of any fault of a term or provision of the
Mortgage.
4. In the event Mortgagee or Successors shall succeed to
the rights of Landlord pursuant to Lease Agreement:
(a) Tenant will attorn to Mortgagee or Successors and
will perform, for the benefit of Mortgagee or
Successors, all of the terms, covenants and
conditions contained in Lease Agreement to be kept
and performed by it and shall, at the request of
Mortgagee or Successors, execute and deliver a
written agreement of attornment; and
(b) Mortgagee or Successors shall not be (i) liable
for any act or omission of any prior landlord
(including Landlord); (ii) subject to any offsets
or defenses which Tenant may have against Landlord
or any prior landlord except as provided in Lease
Agreement; or (iii) bound by any prepayment of
rent or additional rent which Tenant may have paid
for more than the current month to Landlord or any
prior landlord.
5. The term "Mortgagee" shall mean the holder of Mortgage
(as the same may be assigned from time to time) and the term
"Mortgage" shall mean Mortgage (as the same may be renewed,
modified, replaced, extended or consolidated with mortgages
placed on the Property, dated subsequent to the date of Lease
Agreement).
Page 2 of 7 Pages
6. Any and all notices to be given pursuant hereto shall
be sufficient if in writing and mailed by United States certified
or registered mail, postage prepaid, addressed to Mortgagee and
Tenant as follows:
If to Mortgage: 2215 York Road
Oak Brook, Illinois 60521
Attention: Richard G. Griffith
Regional Vice President
With a copy to: John C. Murray, Esq.
The Travelers Insurance Company
2215 York Road
Oak Brook, Illinois 60521
If to Tenant: AT&T Communications, Inc.
Attention: B. C. Hoette, Manager
Real Estate Planning
300 South Riverside
2nd Floor
Chicago, Illinois 60606
With a copy to: AT&T Resources Management Corporation
222 Mt. Airy Road
Basking Ridge, New Jersey 07920
Attention: Manager, Real Estate
Department, Vice
President, and General
Attorney
All notices shall be deemed to have been received three (3) days
following the postmark dates thereof.
7. This Agreement and the covenants, conditions and
promises herein contained shall inure to the benefit of and be
binding upon Mortgagee and Tenant, their respective successors,
assigns, grantees and legal representatives.
Page 3 of 7 Pages
IN WITNESS WHEREOF, Mortgagee and Tenant have caused this
Agreement to be executed by their duly authorized officers and
their respective corporate seals to be affixed hereto, as of the
day and year first above written.
Mortgagee THE TRAVELERS INSURANCE
COMPANY, a Connecticut
corporation
By: /s/ RICHARD G. GRIFFITH
Title: Regional Vice President
ATTEST:
/s/ GEORGE PSARAS
Title: Assistant Secretary
Tenant AT&T COMMUNICATIONS, INC.,
a Delaware corporation,
as assignee of AT&T RESOURCE
MANAGEMENT CORPORATION,
a New York corporation
By: /s/ B. C. HOETTE
Its: Manager - Real Estate
Page 4 of 7 Pages
STATE OF ILLINOIS )
) SS.
COUNTY OF DU PAGE )
The undersigned, a Notary Public in and for said County, in
the State aforesaid, DO HEREBY CERTIFY that Richard G. Griffith
of THE TRAVELERS INSURANCE COMPANY, a Connecticut corporation
("Mortgagee"), and George Psaras, thereof, personally known to me
to be the same persons whose names are subscribed to the
foregoing instrument as such Regional V.P. and Assistant
Secretary, respectively, appeared before me this day in person
and acknowledged that they signed and delivered the said
instrument as their own free and voluntary act, and as the free
and voluntary act of Mortgagee, for the uses and purposes therein
set forth; and the said Regional V.P. did also then and there
acknowledge that he, as custodian of the corporate seal of
Mortgagee, did affix the same to said instrument as his own free
and voluntary act, and as the free and voluntary act of
Mortgagee, for the uses and purposes therein set forth.
GIVEN under my hand and Notarial Seal this 27th day of
September 1989.
/s/ SUSAN HOCHRIEM
Notary Public
My Commission Expires 4/27/92
STATE OF ILLINOIS )
) SS.
COUNTY OF COOK )
The undersigned, a Notary Public in and for said County, in
the State aforesaid, DOES HEREBY CERTIFY that B. C. Hoette as
Manager Real Estate of AT&T COMMUNICATIONS, INC., a Delaware
corporation ("Tenant"), personally known to me to be the same
person whose name is subscribed to the foregoing instrument as
such _______________, appeared before me this day in person and
acknowledged that he signed and delivered the said instrument as
his/her own free and voluntary act, and as the free and voluntary
act of Tenant, for the uses and purposes therein set forth; and
the said _______________ did also then and there acknowledge that
he, as custodian of the corporate seal of Tenant, did affix the
same to said instrument as his/her own free and voluntary act,
and as the free and voluntary act of Tenant, for the uses and
purposes therein set forth.
GIVEN under my hand and Notarial Seal this 24th day of
August, 1989.
/s/ NADIA K. CHOMKO
Notary Public
My Commission Expires 1/30/90
Page 5 of 7 Pages
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
PARCEL 1
Lot 1 (except the West 40.00 feet thereof taken or used or
Franklin Street) and all of Lots 2 and 3 in Block 3 in Block 93
in School Section Addition to Chicago in Section 16, Township 39
North, Range 14, East of the Third Principal Meridian, in Cook
County, Illinois.
PARCEL 2
Easement for the benefit of Parcel 1 aforesaid as created by
instrument dated June 20, 1984 made by Chicago Title and Trust
Company, as Trustee under Trust Agreement dated December 7, 1973
and known as Trust Number 63493, recorded on June 21, 1984 as
Document 271040707 and rerecorded June 14, 1985 as Document
85060359 for ingress and egress over, across and upon the
following described property:
The South 22 feet 10 inches of Lot 9 in Bolles
Subdivision of Lot 4 in Block 93 in School Section
Addition to Chicago in Section 16, Township 39 North,
Range 14 East of the Third Principal Meridian, in Cook
County, Illinois
and
The South 22 feet 10 inches of that part of original
Lot 4 lying West of the West line of the Subdivision of
original Lot 4 and East of the line of original Lot 3
(said East line of Lot 3 being also the East line of
the 10 foot private alley in Block 93 in School Section
Addition to Chicago in Section 16, Township 39 North,
Range 14 East of the Third Principal Meridian, in Cook
County, Illinois.
PARCEL 3
Easement for the benefit of Parcel 1 as created by declaration
dated August 30, 1986 and recorded October 28, 1986 as Document
86504773 made by American National Bank and Trust Company of
Chicago, as Trustee under Trust Agreement dated March 15, 1986
and known as Trust Number 66917 to American National Bank and
Trust Company of Chicago, as Trustee under Trust Agreement dated
April 1, 1985 and known as Trust Number 64020.
Page 6 of 7 Pages
(a) To construct, install, maintain and replace such portions of
subsurface foundation and caissons as shall encroach;
(b) To maintain such inadvertent encroachments of the subsurface
and above ground structure as shall result from
construction, shifting, or settlement thereof; and
(c) For ingress and egress to the extent reasonably necessary to
permit construction, maintenance, repair, and replacement of
the building on the land.
Over, under, and across the following described property:
That part of Field and Perkin's Subdivision of Lots 5, 6 and 7
and that part of Lot 8 lying east of the east line of Franklin
Street in Block 93 in School Section Addition to Chicago in
Section 16, Township 39 North, Range 14 East of the Third
Principal Meridian described as follows:
Beginning at the south west corner of Lot 1 of Field and Perkin's
Subdivision aforesaid; thence north along the west line of Lot 1
of aforesaid a distance of 199.04 feet to the north west corner
of Lot 1 aforesaid; thence east along the north line of Field and
Perkin's Subdivision aforesaid and that part of the vacated east
and west 20 foot public alley as described in Document Number
86067142 a distance of 196.76 feet to the point of intersection
with the northerly extension of the east line of Lot 2 in Field
and Perkin's Subdivision aforesaid; thence south along the east
line of Lot 2 and its northerly extension aforesaid a distance of
199.39 feet to the south east corner of Lot 2 aforesaid; thence
west along the south line of Field and Perkin's Subdivision
aforesaid, being also the north line of West Adams Street, a
distance of 196.805 feet to the point of beginning, in Cook
County, Illinois.
Page 7 of 7 Pages
EXHIBIT B
OPTION NOTICE
CHICAGO AND NORTH WESTERN TRANSPORTATION COMPANY ("TENANT")
227 WEST MONROE STREET
CHICAGO, ILLINOIS
AT&T Communications, Inc. ("Landlord")
c/o AT&T Resource Management Corporation
222 Mt. Airy Road
Basking Ridge, New Jersey 07920
Attention: District Manager, Real Estate Joint Ventures
and
Attention: Senior Attorney
and
Stein & Company Asset Services, Inc.
Suite 3400
227 West Monroe Street
Chicago, Illinois 60606
Attention: Vice President/Asset Management
and
American National Bank and
Trust Company of Chicago ("American National")
not personally but solely as Trustee under
Trust Agreement dated April 1, 1985, and
known as Trust 64020 ("Main Landlord")
33 North LaSalle Street
Chicago, Illinois 60603
Attention: Land Trust Department
Re: Notice of Extension Option and Direct Lease Option
Dear Ladies and Gentlemen:
In accordance with Section 42 of the Office Sublease
between Landlord and Tenant dated as of October 25, 1993
("Lease"), and subsection 2.3 of the Direct Lease Option,
Attornment, Recognition and Consent Agreement among Landlord,
Tenant, Main Landlord, The Travelers Insurance Company, American
National, not personally but as Trustee under Trust Agreement
dated April 1, 1985, and known as Trust No. 64020, dated as of
October 25, 1993 ("Option Agreement"), Tenant hereby notifies you
-122-
that tenant desires to exercise its irrevocable Extension Option
with respect to the Lease and revocable Direct Lease Option under
the Option Agreement.
Sincerely,
CHICAGO AND NORTH WESTERN
TRANSPORTATION COMPANY, a Delaware
corporation
BY: /s/ Robert Schmiege
Its: President
-123-
EXHIBIT C
ALTERNATE POWER SOURCE SPACE
Attached to this Exhibit is an Exhibit C print which
identifies approximately 800 square feet located in the southwest
corner of the 16th floor mezzanine of the building known as AT&T
Corporate Center, 227 West Monroe, Chicago, County of Cook,
Illinois 60606, to be used as the alternate power source.
-124-
EXHIBIT E
FURNITURE
SEE ATTACHED
-125-
EXHIBIT E OF THE OFFICE SUBLEASE
The furniture inventory, dated August 18, 1993,
contains the furniture and audio/visual equipment located on
floors 6 through 12 at the AT&T Corporate Center, 227 West
Monroe, Chicago, County of Cook, Illinois 60606. Floors 6
through 10 and 12 contain the following Steelcase Series 9000
panel wall units:
42"H x 30"W - 3,101
45"H x 30"W - 3
53"H x 30"W - 694
65"H x 30"W - 2,663
Floors 6 through 10 and 12 contain the following Steelcase Series
9000 panel system components:
BOOK BINS - 2,385
CENTER DRAWERS - 812
3-DRAWER PEDESTALS - 841
2-DRAWER PEDESTALS - 1,694
25" X 60" WORK SURFACES - 827
30" X 60" WORK SURFACES - 222
30" X 90" WORK SURFACES - 1,044
KEYBOARD TRAYS - 3
TABLES - 66
CURVED TABLES - 11
CUBE TYPE 37-1 - 1
CUBE TYPE 37-2 - 4
CUBE TYPE 56A - 199
CUBE TYPE 56B1 - 258
CUBE TYPE 56B2 - 2
CUBE TYPE 56B3 - 1
CUBE TYPE 75D - 212
CUBE TYPE 75B - 42
CUBE TYPE 75BM1 - 1
CUBE TYPE 75BM2 - 5
CUBE TYPE 75BM3 - 1
CUBE TYPE 75BM4 - 1
CUBE TYPE 75BM6 - 1
CUBE TYPE 112A - 66
CUBE TYPE 112B - 11
CUBE TYPE 112C1 - 11
CUBE TYPE 112C2 - 3
CUBE TYPE 112C3 - 9
CUBE TYPE 112C4 - 2
Floors 6 through 10 and 12 contain the following miscellaneous
furniture:
2' X 5' TABLES - 41
3' X 8' TABLES - 4
SMALL ROUND TABLE - 1
Page 1 of 4 Pages
MEDIUM ROUND TABLES - 39
LARGE ROUND TABLE - 1
END TABLE - 1
OVAL CONFERENCE TABLE - 1
WOOD CONFERENCE TABLE - 1
4' x 8' CONFERENCE TABLE - 1
2-DOOR LATERAL FILE CABINETS - 22
3-DOOR LATERAL FILE CABINETS - 50
4-DOOR LATERAL FILE CABINETS - 507
5-DOOR LATERAL FILE CABINETS - 102
2-SHELF BOOKCASES - 7
3-SHELF BOOKCASES - 2
4-SHELF BOOKCASE - 1
5-SHELF BOOKCASES - 6
STAND-ALONE CLOSETS - 115
STORAGE CABINETS - 10
STANDARD OFFICE CHAIRS - 1,006
ARM CHAIRS - 28
SIDE CHAIRS - 437
EXECUTIVE CHAIRS - 30
CONFERENCE CHAIRS - 216
EXECUTIVE CONFERENCE CHAIRS - 29
60" COUCHES - 2
90" COUCH - 1
DESKS - 8
RECEPTION DESK - 1
DESKS WITH RETURN - 28
DESK WITH OVERHEAD RETURN - 1
CREDENZAS - 15
CREDENZAS WITH OVERHEAD - 27
ROUND DESKS - 3
30" X 30" TRAINING TABLES - 4
30" X 60" TRAINING TABLES - 30
30" X 90" TRAINING TABLES - 56
FILES - 4
WALL WHITE BOARDS - 7
Floor 11 contains the following furniture:
DESKS - 12
CONFERENCE TABLES - 8
SMALL ROUND CONFERENCE TABLES - 7
COFFEE TABLES - 9
END TABLES - 18
DINING TABLES - 4
CREDENZAS - 3
CONSOLES - 6
TABLE DESK - 1
LAMP TABLE - 1
FLOOR LAMP - 1
MEDIA CART - 1
PODIUM AND WING - 1
4-DRAWER LATERAL FILES - 8
EXECUTIVE CHAIRS - 140
Page 2 of 4 Pages
SIDE CHAIRS - 87
UPHOLSTERED CHAIRS - 22
CLERICAL CHAIRS - 20
DINING CHAIRS - 32
SOFAS - 11
Floor 11 contains the following audio visual equipment:
BRYSTON 4B - AUDIO AMP - 1
BRYSON 2B - AUDIO AMP - 1
KLARK TEKNIK DN332 - WIDE BAN EQUALIZER - 1
OXMOOR DCA-2 - AUDIO CONTROLS - 1
OXMOOR DCA-3 - AUDIO CONTROLS - 1
TASCAM 44-OB-4 CHANNEL REEL TO REEL - 1
TASCAM CD-501 - CD PLAYER - 1
YORK CD-24 - SYSTEM CONTROLS - 1
YORK CD-18 - SYSTEM CONTROLS - 2
YORK POWER S24110 - 1
TASCAM 133B - 3 CHANNEL CASSETTE DECK - 1
YAMAHA M406 - 6 CHANNEL AUDIO MIXER - 1
NAKAMICHI MR-1 - CASSETTE DECK - 1
SONY V07600 - 3/4" VIDEO PLAYER - 1
RTS SYSTEMS 444 - SYSTEM EQUIPT. - 5
YORK AS8 - SYSTEM CONTROLS - 3
PANASONIC AG7500 - 1/2" VIDEO RECORDER - 2
GVG 10-XL - VIDEO SWITCH - 1
GVG DECODER (CV-20) - 1
GVG DECODER CARD (CV-24) - 1
GVG POWER SUPPLY - 2
GVG POWER SUPPLY CARD - 1
BARCO RCVDS 400 QUAD - SWITCHING SYS - 1
BARCO A/V INPUT MODULE - 6
BARCO RGBS INPUT MODULE - 4
GVG 8500 DA FRAME - 1
SONY CAMERA CONTROL UNIT - 1
SONY PVM 91-BW CAMERA MONITOR - 1
SONY CMA8 - CAMERA AUX POWER - 1
GVG 8501 DA CARDS - AMPS - 4
KODAK III AMT PROJECTOR - 2
MAST 137-S43 PROJECTOR - 2
ISCO 60 MM 2.35 LENS - 4
CHIEF MSU-300 PROJ RACK - 3
CHIEF PROJECTOR STANDS - 0
LIBERTY MIRROR 756 MIRROR - 2
AVL DOVE X2 DISSOLVE - SLIDE PROJ CONTRL - 2
YORK PR-1 PRESET PANEL - 1
YORK RAC-3 R/A CONTROLLER - 2
YORK RAD-2 R/A DISSOLVE-SLIDE PROJ CONTRL - 1
35 MM SLIDE PROJECTORS - 4
BEYER M500 MICROPHONES & STANDS - 4
STORAGE BOXES - 6
TALL MICROPHONE STANDS - 3
SONY 1031Q VIDEO PROJECTOR - 1
B&W MONITOR SPEAKERS - 2
Page 3 of 4 Pages
MITSUBISHI MONITORS - 2
MONITOR SELECT PANEL - 1
YORK LCD TOUCH PANEL CPC576 - 2
PANASONIC A505 REMOTE CONTROLLER - 1
SONY AUTO SEARCH CONTRL BUTTON RX353 - 1
BARCO TELECOMMANDER RCVDS4 - 1
STEREO CORD (RED) - 24
MONO CORD (RED) - 6
SHORT VIDEO PATCH (PINK) - 12
18" VIDEO PATCH (PINK) - 11
PHONO CORD (RED) - 10
FEMALE AUDIO CORD (BLACK TOP) - 6
MALE AUDIO CORD (BLACK TOP) - 4
5 FT. VIDEO CABLES - 8 PAIR
MICROPHONE CABLES - 5 PAIR
MASTER SET OF SCHEMATICS FOR AUDIO - 1 SET
REVOX B285 - AM/FM RECV AMP - 6
JVC 1/2" VCR HR-S 7000U - 6
REVOX B226 - CD PLAYER - 6
SONY ST-72TV - TV TUNER - 6
MEMOREX CB-8 UNIVERSAL CONTROL - 6
MITSUBISHI 35" MULTISYNC TV MONITOR - 6
POWER SWITCH - 6
M3 CAMERA - 1
FUJINON CAMERA CONTROL BUTTON - 1
Page 4 of 4 Pages
EXHIBIT F
ECONOMIC TERMS
A. BASE RENT AND LANDLORD'S ALLOWANCE
The Base Rent and Landlord's Allowance designated by
Tenant pursuant to Section 2(a)(xiv) of the Lease shall be
determined in accordance with the following options:
BASE RENT PER SQ/FT LANDLORD'S ALLOWANCE
PER ANNUM PER SQ/FT
$5.65 = $ 5.00
$6.28 = $10.00
$6.92 = $15.00
$7.56 = $20.00
$8.20 = $25.00
Tenant may also request a Landlord's Allowance between
$5.00 per square foot and $25.00 per square foot which is not in
a multiple of $5.00, in which case Base Rent per square foot will
be ratably adjusted on the basis of the Landlord's Allowance
selected by Tenant. It is understood and agreed that in no event
will: (a) the Base Rent per square foot designated by Tenant as
aforesaid be less than $5.65 per square foot or more than $8.20
per square foot, and (b) the Landlord's Allowance be less than
$5.00 per square foot or more than $25.00 per square foot.
B. RENTABLE AREA OF PREMISES
The Rentable Area of the relevant floors of the
Building for the purposes of this Lease shall be as follows:
1. 6th Floor = 38,328
2. 7th Floor = 35,231
3. 8th Floor = 35,137
4. 9th Floor = 34,503
5. 10th Floor = 34,330
6. 11th Floor = 34,330
7. 12th Floor = 33,166
Total = 245,025
The Rentable Area of the Premises designated by Tenant
pursuant to Section 2(a)(xiv) of the Lease shall: (a) consist of
between 206,697 rentable square feet and 245,025 rentable square
feet, (b) be located on contiguous floors six (6) through eleven
(11), seven (7) through twelve (12) or six (6) through twelve
(12) of the Building, and (c) contain no more than one (1)
partial floor, which partial floor, if any, shall be located on
the twelfth (12) floor of the Building and shall be in such
location designated by Tenant which is reasonably acceptable to
Landlord.
-126-
EXHIBIT G
MAIN LEASE
SEE ATTACHED
-127-
0084.0.0
FORM OF
AT&T CORPORATE CENTER
OFFICE LEASE
BETWEEN
AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO,
AS TRUSTEE UNDER TRUST NO. 64020
(as Landlord)
and
AT&T RESOURCE MANAGEMENT CORPORATION
(as Tenant)
Dated: December 31, 1985
Page 0 of 74 Pages
0085.0.0
OFFICE LEASE
TABLE OF CONTENTS
Page
1. Base Rent............................................... 2
2. Additional Rent......................................... 2
3. Prior Occupancy......................................... 19
4. Use of Premises......................................... 19
5. Services................................................ 20
6. Condition and Care of Premises.......................... 25
7. Return of Premises...................................... 27
8. Holding Over............................................ 28
9. Rules and Regulations................................... 29
10. Rights Reserved to Landlord............................. 29
11. Alterations............................................. 32
12. Assignment and Subletting............................... 35
13. Damage or Destruction by Casualty....................... 39
14. Eminent Domain.......................................... 41
15. Default: Landlord's Rights and Remedies................. 42
16. Subordination........................................... 46
17. Mortgagee Protection.................................... 48
18. Quiet Enjoyment......................................... 48
19. Subrogation and Insurance............................... 49
20. Nonwaiver............................................... 50
21. Estoppel Certificate.................................... 50
22. Tenant Authorization.................................... 51
23. Landlord Authorization.................................. 51
24. Real Estate Brokers..................................... 51
25. Notices................................................. 52
26. Delivery of Possession and Liquidated Damages........... 52
27. Miscellaneous........................................... 53
28. Landlord................................................ 55
29. Title and Covenant Against Liens........................ 55
30. Leasing of Additional Premises.......................... 56
31. Option to Extend........................................ 59
32. Tenant Release Rights................................... 60
33. Relocation Rights....................................... 61
34. Right of First Offer.................................... 62
35. Bankruptcy or Insolvency................................ 63
36. Tenants................................................. 65
37. Abatement of Lease Payments............................. 66
38. Building Name and Signage............................... 66
39. Roof Rights............................................. 66
40. Attorneys' Fees......................................... 67
41. Waiver.................................................. 67
42. Short Form of Lease..................................... 67
43. Partnership Default..................................... 68
44. Termination Rights...................................... 68
45. Mutual Indemnity and Waiver............................. 68
Page i of ii Pages
0086.0.0
Page
46. "Force Majeure"......................................... 69
47. Arbitration............................................. 69
48. Investment Tax Credit................................... 70
49. Use of Name............................................. 71
50. Exculpatory Provisions.................................. 71
EXHIBITS
Exhibit A: Floor Plan
Exhibit B: Workletter
Exhibit C: Commercial Space
Exhibit D: Legal Description of Land
Exhibit E: Rentable Area
Exhibit F: CPI Adjustment
Exhibit G: Cleaning Specifications
Exhibit H: Area of Tenant Guard Station
Exhibit I: Tenant Storage Area
Exhibit J: Rules and Regulations
Exhibit K: AT&T EEOC Requirements
Exhibit L: Expansion Area
Exhibit M: Joint Action Agreement
Exhibit N: Relocation Clause
Exhibit 0: Schedule of Business and Commercial
Activities
Exhibit P: Tenant Roof Area
Exhibit Q: Investment Tax Credit Election Form
Page ii of ii Pages
OFFICE LEASE
THIS LEASE, is made as of the 31st day of December,
1985, but is actually executed on the 16th day of May, 1986,
WITNESSETH: AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO,
not personally but solely as Trustee under Trust Agreement dated
April 1, 1985, and known as Trust No. 64020 (herein called
"Landlord"), hereby leases to AT&T RESOURCE MANAGEMENT
CORPORATION, a New York corporation (herein called "Tenant"), and
Tenant hereby accepts the premises as outlined on the floor plan
attached hereto as Exhibit A (herein called "Premises") on
partial floors three (3) and fourteen (14) and complete floors
four (4) through thirteen (13) of the building to be located at
225 W. Monroe Street, Chicago, Illinois (herein called
"Building"), for a term (herein called "Term") commencing on a
date ("Commencement Date") described in the Workletter attached
hereto as Exhibit B and ending on a date which is the earlier of
twenty (20) years following the Commencement Date of this Lease
or twenty (20) years following the Commencement Date of that
certain lease by and between Landlord and AT&T Information
Systems Inc. ("ATT-IS") executed concurrently herewith
("Termination Date"), unless sooner terminated or extended as
provided herein, and subject to the agreements herein contained,
paying as rent therefor the sums hereinafter provided, without
any set-off, abatement, counterclaim or deduction whatsoever
except as expressly herein set forth or as may, from time to
time, be provided for by law. In no event shall a default under
the lease with ATT-IS ("ATT-IS Lease") constitute a default
hereunder nor shall the decision by ATT-IS to not extend its
Lease in any way affect Tenant's extension option pursuant to
Section 31 hereof. Following the establishment of the
Commencement Date hereunder and the Commencement Date of the
ATT-IS Lease, Landlord and Tenant shall enter into an amendment
to this Lease setting forth the Commencement Date and the
Termination Date.
Landlord specifically excepts and reserves to itself
the use of any roof decks, except as otherwise set forth herein,
the exterior portions of the Premises, and any areas in the
Premises such as within walls, ceiling and floors, to the extent
required for installation of utility lines and other
installations required to provide services for other tenants of
the Building and to maintain and repair same, provided, however
that any such work shall be subject to the provisions of Section
10(f) hereof. Landlord specifically excepts and reserves to
itself, unless otherwise specifically provided, all rights to the
land, air rights and improvements below the improved floor level
of the Premises, to the improvements and air rights above the
Premises and to the land, air rights and improvements located
outside the demising walls of the Premises.
Page 1 of 74 Pages
IN CONSIDERATION THEREOF, THE PARTIES HERETO COVENANT
AND AGREE:
1. Base Rent. Tenant shall pay an annual base rent
(herein called the "Base Rent") to Landlord for the Premises of
payable in able in equal monthly installments of
($ ).
Monthly installments of Base Rent are herein called "Monthly Base
Rent" and, subject to the provisions of Section 37 hereof, shall
be payable, in advance on the first day of the first full
calendar month and on the first day of each calendar month
thereafter of the Term, and at the same 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.
Base Rent, Additional Rent (as hereinafter defined), Additional
Rent Progress 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 the office of Landlord, or as
otherwise designated from time to time by written notice from
Landlord to Tenant. The payment of Rent hereunder is independent
of each and every other covenant and agreement contained in this
Lease except as expressly herein set forth or as may, from time
to time be provided for by law. [Note: Base Rent to be determined
at the rate of $ per rentable square foot of Rentable Area
of the Premises, as defined in Paragraph 2(a)(ix), as finally
determined pursuant to Paragraph 2(a)(x) hereof.]
2. Additional Rent. In addition to paying the Base
Rent specified in Section 1 hereof, Tenant shall also pay as
additional rent the amounts determined in accordance with this
Section 2 ("Additional Rent"):
(a) Definitions. As used in this Lease,
(i) "Adjustment Date" shall mean the first day of the
Term and each January 1 thereafter falling within the Term.
(ii) "Adjustment Year" shall mean each calendar year
during which an Adjustment Date falls.
(iii) "Commercial Space" shall mean all areas of the
Building devoted to retail tenants, but excluding the lobby
and other common areas of the Building as shown on Exhibit
C.
(iv) "Expenses" shall mean and include those costs and
expenses paid by the Landlord for managing, operating,
maintaining and repairing the Building and the personal
property used in conjunction therewith (said Building and
personalty being herein collectively called the "Project"),
including (without limitation) maintenance of alarm and
security systems, snow and ice and trash removal, cleaning
and sweeping, planting and replacing decorations, flowers
Page 2 of 74 Pages
and landscaping, maintenance and repair of utility systems,
elevators, electricity, steam, water, gas, sewers, fuel,
heating, lighting, air conditioning, window cleaning,
janitorial service, insurance, including, but not limited
to, fire, extended coverage, all risk, liability, workmen's
compensation, elevator, or any other insurance carried by
the Landlord and applicable to the Project, to the extent
same is customarily carried by owners of first-class
non-institutional office buildings, painting, uniforms,
management fees not to exceed three percent (3%) of the
amounts upon which the management fee is calculated under
the applicable management agreement (including the amount of
the rent abatement pursuant to Section 37) (whether or not
the management agent is affiliated with Landlord or its
beneficial owner) supplies, sundries, sales or use taxes on
supplies or services, cost of wages and salaries of all
persons engaged in the operation, management, maintenance
and repair of the Project, and so-called fringe benefits, as
customarily paid by Owners of first-class office buildings,
including 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 or like expenses incurred under
the provisions of any collective bargaining agreement, the
charges of any independent contractor who, under contract
with the Landlord or its representatives, does any of the
work of operating, managing, maintaining or repairing of the
Project, legal and accounting expenses, including, but not
to be limited to, such expenses related to seeking or
obtaining reductions or preventing increases in assessed
valuations in connection with real estate taxes or any other
expense or charge, whether or not hereinbefore mentioned,
which, in accordance with generally accepted accounting and
management principles, would be considered as an expense of
managing, operating, maintaining or repairing the Project,
except as hereinafter provided. Expenses shall not include
costs or other items included within the meaning of the term
"Taxes" (as hereinafter defined), costs of alterations of
the premises of tenants of the Building, expenses of
renovating or otherwise decorating vacant or previously
leased space for tenants; costs of capital improvements to
the Building (excluding repairs to Building equipment)
depreciation charges, interest and principal payments on
mortgages, ground rental payments, expenses incurred in
leasing or procuring tenants including, without limitation
advertising costs and real estate brokerage and leasing
commissions, any expenditures for services which are
provided to one or more tenants and which are not available
generally to all office tenants, any expenditures for which
Landlord has been reimbursed (other than pursuant to
additional rent provisions in leases), except as hereinafter
provided; legal costs in leasing space or incurred in
disputes with tenants, except as set forth in Section 9(b)
hereof; electricity and other utility services which are
directly billed to tenants; wages, salaries or other
Page 3 of 74 Pages
compensation paid to any executive employees above the grade
of building manager; wages, salaries and so-called fringe
benefits of clerks or attendants in concessions or
newsstands operated by the Landlord; the cost of correcting
defects (latent or otherwise) in the construction of the
Building or in the Building equipment; the cost of repair or
rebuilding in the event of fire or other casualty or eminent
domain; the cost of installing, operating and maintaining a
specialty improvement including, without limitation, an
observatory or broadcasting facility, cafeteria or dining
facility, an athletic, luncheon or recreational club, and
any cost or expense paid to a related entity or entity not
dealt with on an "arms'-length" basis which is in excess of
the amount which would be paid in the absence of such
relationship. Notwithstanding anything contained herein to
the contrary, Expenses directly applicable to or solely
utilized in connection with the Commercial Space (including,
but not limited to utilities, scavenger services, janitorial
and window washing) shall be paid for directly by tenants of
the Commercial Space or if such direct payment is not
feasible then Landlord shall require such tenants'
proportionate share of such Expenses to be adjusted to
reflect their increased use of any service over and above
customary office use.
Tenant shall pay all Expenses attributable to the
operation and maintenance of equipment installed at Tenant's
request for Tenant's exclusive use with the exception of (a)
equipment necessary for the performance of Landlord's
obligations as set forth herein, and (b) elevators and
loading docks comprising part of the Shell and Core Work (as
defined in the Workletter) devoted to Tenant's exclusive
use.
Notwithstanding anything contained herein to the
contrary, Landlord and Tenant hereby agree that (1) in the
event the Parking Garage (as hereinafter defined) is
operated pursuant to a lease or license agreement under
which the lessee or licensee is obligated to pay Expenses of
the Parking Garage, from the revenue received by said lessee
or licensee (as opposed to being an Expense of the
Building), then expenses relating to the Parking Garage to
the extent required to be paid by the lessee or licensee
shall not be included in Expenses, and (2) in the event (1)
above is not applicable, in no event shall Tenant be
required to pay a percentage of Parking Garage Expenses
greater than the ratio of the average number of spaces
contracted for by Tenant on an annual basis over the total
number of spaces in the Parking Garage. Tenant shall be
deemed to use all spaces for which it pays no periodic fee
pursuant to the provisions of Section 5(g).
Notwithstanding anything contained in this clause (iv)
of Section 2(a) to the contrary,
Page 4 of 74 Pages
(A) The cost of any capital improvements to the
Building made after the date of this Lease which
(i) reduce Expenses or (ii) which are required under
any governmental laws, regulations, or ordinances which
were not applicable to the Building at the time it was
constructed, amortized on a straight line basis over
the then anticipated useful life of the capital
improvement (as determined in accordance with generally
accepted accounting principles), together with interest
on the unamortized cost of any such improvement (at the
prevailing loan rate available to Landlord on the date
the cost of such improvement was incurred) shall be
included in Expenses, provided, however, as to (i)
above, costs shall be included in Expenses only to the
extent Expenses are actually reduced unless Tenant has
previously approved such capital improvement in
accordance with Section 2(i).
(B) If ninety-five percent (95%) of the rentable
area of the Building is not leased by tenants during
all or a portion of any Adjustment Year, then Landlord
may elect to make an appropriate adjustments for such
year of the components of Expenses and the amounts
thereof, which may vary depending upon the occupancy
level of the Building, to reflect a 95% occupancy
level, employing sound accounting and management
principles in so doing. Any such adjustments shall be
deemed costs and expenses paid or incurred by Landlord
and included in Expenses for such year, as if the
Building had been ninety five percent (95%) occupied
and the Landlord had paid or incurred such costs and
expenses for such year. In no event, however, shall
Tenant be required to pay an amount in excess of the
total of actual costs and expenses less the amounts due
from other tenants in the Building.
(C) If any item of Expenses, though paid in one
year, relates to more than one calendar year, such item
shall be proportionately allocated at the option of
Landlord among such related calendar years. Landlord
shall be entitled to allocate such items of Expense to
one calendar year if the contract for such Expense item
requires payment in one year. At the termination of the
Lease, Tenant shall be reimbursed for any
disproportionate allocations of Expense items.
(v) "Land" shall mean the parcel of real estate
legally described on Exhibit D hereto.
(vi) "Parking Garage" shall mean two underground levels
to contain approximately 170 spaces.
(vii) "Taxes" shall mean general real estate taxes,
assessments, (whether they be general or special) sewer
rents, rates and charges, water taxes, transit taxes, taxes
Page 5 of 74 Pages
based upon the receipt of rent, and any other federal, state
or local governmental charge, general, special, ordinary or
extraordinary (but not including income or franchise taxes,
personal property replacement taxes or any other taxes
imposed upon or measured by the Landlord's general net
income or profits of the Building), which may now or
hereafter be levied, assessed or imposed against the
Building and/or the Land (the Building and said Land
collectively referred to herein as "Real Property") and
shall also mean leasehold taxes imposed upon the Landlord in
connection with the leasing and operation of the Building or
the Real Estate, except to the extent such taxes constitute
income or other taxes imposed upon or measured by the
general net income or profits of the Landlord.
In the event that Landlord is required by federal,
state or local statute or ordinance to collect taxes imposed
upon Tenant in connect;on with this Lease, Tenant shall
cooperate with Landlord in the collection and payment of
same, shall execute and deliver such forms and other
documents as shall be required to enable Landlord to collect
and pay such taxes and shall remit to Landlord all required
payments, including interest and penalties prior to the date
said taxes are due and payable. In the event that such taxes
may be paid directly by Tenant, Tenant shall cooperate with
Landlord in making any requests or applications to enable
Tenant, rather than Landlord, to pay such tax, and Tenant
shall pay such tax directly to the appropriate governmental
authorities after the required approvals are obtained.
Notwithstanding anything contained in this clause (vii)
of Section 2(a) to the contrary,
(A) If at any time the method of taxation then
prevailing shall be altered so that any new or
additional tax, assessment, levy, imposition or charge
or any part thereof shall be imposed upon Landlord in
place or partly in place of general real estate taxes,
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 replace general real estate taxes,
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 for which any such
taxes or assessments were levied, assessed or otherwise
imposed, Taxes for any year shall mean (i) the taxes or
special assessments (plus any interest payable thereon)
due and payable during such year, and (ii) if any taxes
Page 6 of 74 Pages
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
applicable to the excess period shall be included in
Taxes for that year only if due and payable in that
year. 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 otherwise
imposed for such year without regard to when such taxes
are payable.
(C) Taxes shall also include any personal
property taxes, if any, (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, and excluding equipment or personal property
owned by tenants of the Building.
(D) As soon as practical following the expiration
of the Term of this Lease, Landlord and Tenant shall
adjust the amount of Additional Rent attributable to
Taxes by determining the difference, if any, between
the Additional Rent attributable to Taxes actually paid
by Tenant ("Taxes Paid") during the Term of the Lease
and the Additional Rent attributable to Taxes as
actually assessed ("Taxes Assessed") against the
Building during the Term of the Lease. Tenant shall pay
to Landlord the amount, if any, by which the Taxes
Assessed exceed the Taxes Paid and Landlord shall pay
to Tenant the amount, if any, by which the Taxes Paid
exceed the Taxes Assessed. The foregoing obligations
shall survive the termination of the Lease. Such
payment shall be made within thirty (30) days of such
determination by Landlord and Tenant.
(viii) "Rentable Area of the Building" shall mean the sum
of the areas of all office floors of the Building and
Commercial Space computed by measuring to the interior face
of the exterior glass wall on each entire floor plus the
public ground floor and second floor lobby and excluding
only the public stairs, elevator shafts, flues, stacks, pipe
shafts and vertical ducts ("vertical penetrations"). No
deduction shall be made for columns or projections necessary
to the Building. Rentable Area of the Building shall be
deemed to be 1,453,908 square feet, subject to adjustment as
hereinafter provided.
(ix) "Rentable Area of the Premises" shall be deemed to
be 379,418 square feet, subject to adjustment as hereinafter
provided and shall mean the sum of the areas of all office
floors in the Premises, calculated in the same manner as
provided in (viii) above, except that Rentable Area of the
Premises shall include a proportionate share of the public
Page 7 of 74 Pages
ground floor and second floor lobby area of the Building
calculated as set forth on Exhibit E attached hereto.
(x) "Tenant's Proportionate Share" shall mean 26.096%,
which is the percentage obtained by dividing the Rentable
Area of the Premises by the Rentable Area of the Building.
The square footage calculations in Section 2(a)(viii) and
2(a)(ix) above are based upon preliminary design drawings of
the Building and may be modified as a result of the final
design of the Building.
(A) On completion of Final Shell and Core Plans
as defined in the Workletter, Landlord's architect,
Skidmore, Owings and Merrill ("Landlord's Architect")
shall certify the Rentable Area in the Premises. In the
event the Rentable Area of the Premises as certified by
Landlord's Architect shall increase by more than three
percent (3%) from the number of square feet set forth
in Section 2(ix) above, then the Rentable Area of the
Premises and Tenant's Proportionate Share shall not be
increased by more than three percent (3%),
notwithstanding the actual Rentable Area of the
Premises. Notwithstanding the foregoing, to the extent
such variance is due to changes in the Shell and Core
Work requested by Tenant, the foregoing limitation on
the increase in Rentable Area of the Premises and
Tenant's Proportionate Share shall not apply. For
example, in the event such changes have increased the
Rentable Area of the Premises by two percent and
Landlord's changes have increased the Rentable Area by
four percent, the increase in Tenant's Proportionate
Share and Rentable Area of the Premises shall be
limited to five percent. In the event the Rentable Area
shall decrease by more than five percent (5%) from the
number of square feet set forth in Section 2(ix) above,
then at Tenant's option, one floor of the Expansion
Area as defined in Section 30 shall be added to the
Premises and Tenant's Proportionate Share and Rentable
Area of the Premises shall reflect the actual number of
rentable square feet in the Premises. In the event the
Rentable Area has decreased by ten percent (10%) or
more and such excess variance is not due to changes in
the Shell and Core Work requested by Tenant, then
Landlord shall, at Tenant's option, redesign the Shell
and Core of the Building in order to reduce such
variance to below ten percent. Landlord may but shall
not be obligated (except as may be required by the
Workletter) to request that Tenant approve the changes
which will result in an increase or decrease in the
Rentable Area of the Premises, provided Landlord
specifies the impact on Rentable Area square footage.
Tenant's approval shall not be unreasonably withheld as
to changes which do not exceed the three percent and
five percent standards set forth above, but Tenant may
in its sole discretion disapprove changes in excess of
Page 8 of 74 Pages
same. For purposes of this Section 2(x)(A), "Rentable
Area of the Premises" shall include the Rentable Area
of the Premises under this Lease and the ATT-IS Lease.
(B) Except as set forth in Subsection (A) above,
Tenant's Proportionate Share shall be modified in the
event the final design of the Building is hereafter
modified as permitted herein and in the Workletter such
that Rentable Area of the Premises or Rentable Area of
the Building, or both, differs from the square footage
set forth in Section 2(a)(viii) and 2(a)(ix) above.
Landlord's Architect shall certify the Rentable Area in
the Premises and the Rentable Area of the Building
measured in accordance with Section 2(a)(viii) and (ix)
hereof as based on the final construction drawings for
the Building reflecting all change orders. The decision
of the Landlord's Architect shall be rendered in
writing within fifteen (15) days after substantial
completion of the Premises and such decision shall be
in duplicate and one counterpart thereof shall be
delivered by Landlord's Architect to Landlord and one
counterpart thereof shall be delivered to Tenant. The
decision of Landlord's Architect shall be binding,
final and conclusive on all the parties. Landlord and
Tenant shall enter into a written supplement to this
Lease within thirty (30) days after such approval or
final determination setting forth the certified
Rentable Area of the Premises and the Building, the new
Base Rent, and Tenant Proportionate Share.
(C) In the event any item of Expense is included
as a part of Additional Rent for tenants of the
Building and a tenant of the Building (the "Excluded
Tenant") is responsible for the total amount of such
Expense item with respect to the Excluded Tenant's
premIses (e.g., if Landlord shall have no obligation to
furnish cleaning and janitorial service for the
Excluded Tenant's premises) and the Landlord includes
the cost of such service for all other tenants'
premises as an item of Expense as a part of Rent
Adjustment, then the Rentable Area of the Excluded
Tenant's premises shall be deducted from the Rentable
Area of the Building (for purposes of calculating the
remaining tenants' Proportionate Share with respect
only to such item of expense) and such item of Expense
shall be allocated only among the remaining tenants.
(xi) "Additional Rent" shall mean all amounts
determined pursuant to this Section 2, including any amounts
payable by Tenant to Landlord on account thereof.
(xii) "Adjusted Rent" shall mean the Base Rent plus the
CPI Adjustment.
Page 9 of 74 Pages
(xiii) "Consumer Price Index" (sometimes referred to as
the "CPI Index") shall mean the Consumer Price Index, for
the City of Chicago, Urban Wage Earners and Clerical
Workers, All Items (base index year 1967 = 100), as
published by the United States Department of Labor, Bureau
of Labor Statistics. If the manner in which the Consumer
Price Index, as determined by the Bureau of Labor
Statistics, shall be substantially revised, including,
without limitation, a change in the base index year, an
adjustment shall be made by Landlord in such revised index
which would produce results equivalent, as nearly as
possible, to those which would have been obtained if such
Consumer Price Index had not been so revised. If the
Consumer Price Index shall become unavailable to the public
because publication is discontinued, or otherwise, or if
equivalent data is not readily available to enable Landlord
to make the adjustment referred to in the preceding
sentence, then Landlord will substitute therefor a
comparable index based upon changes in the cost of living or
purchasing power of the consumer dollar published by any
other governmental agency or, if no such index shall be
available, then a comparable index published by a major bank
or other financial institution or by a university or a
recognized financial publication.
(xiv) "CPI Adjustment" shall mean the adjustments
calculated pursuant to the provisions of Section (1).
(xv) "CPI Adjustment Date" shall mean the first day of
the Lease Year and the first day of each subsequent
Lease Year in the Term.
(xvi) "CPI Adjustment Year" shall mean each Lease Year
during which a CPI Adjustment Date falls.
(xvii) "Comparison Consumer Price Index" shall mean the
Consumer Price Index for the calendar month immediately
prior to the beginning of each CPI Adjustment Year. For
purposes of the first CPI Adjustment Date, the Comparison
Consumer Price Index shall be the Consumer Price Index for
the calendar month prior to the beginning of the Lease Year
of the Term.
(xviii) "Current Adjustment Date Consumer Price Index"
shall mean the Consumer Price Index for the last calendar
month of each CPI Adjustment Year.
(xix) "Lease Year" shall mean the twelve month period
commencing on the Commencement Date of the Lease and each
successive twelve consecutive month period thereafter during
the Term of this Lease.
Page 10 of 74 Pages
(b) Computation of Additional Rent - Tax and Expense
Adjustments.
Tenant shall pay Additional Rent in the form of Tax and
Expense Adjustments (as hereinafter defined) for each Adjustment
Year hereinafter specified. Additional Rent payable by Tenant
with respect to each Adjustment Year during which an Adjustment
Date falls shall include the product of the Tenant's
Proportionate Share, multiplied by the amount of Taxes and
Expenses for such Adjustment Year ("Tax and Expense Adjustment").
(c) Payments of Additional Rent; Projections.
Tenant shall pay Additional Rent to Landlord in the
manner hereinafter provided.
(i) Tax and Expense Adjustment. Tenant shall make
payments on account of the Tax and Expense Adjustment (any
such payment with respect to any Adjustment Year being also
called "Additional Rent Progress Payment") effective as of
the Adjustment Date for each Adjustment Year as follows:
(A) Landlord may, prior to each Adjustment Date
or from time to time during the Adjustment Year in
which such Adjustment Date falls, deliver to Tenant a
written notice or notices ("Projection Notice") setting
forth (1) Landlord's reasonable estimates, forecasts or
projections (collectively, the "Projections") of Taxes
and Expenses for such Adjustment Year based on the
Budget, as hereinafter defined, approved by Tenant, and
Landlord's estimate of Taxes (but in no event in excess
of the amount required under any Security Documents, as
hereinafter defined) and (2) Tenant's Additional Rent
Progress Payment for such Adjustment Year based upon
the Projections. Landlord's Budget of Expenses and the
Projections based thereon shall assume ninety-five
percent (95%) occupancy and use of the Building and may
be revised by Landlord from time to time based on
changes in rates and other criteria which are
components of budget items provided that Tenant has
approved all revisions to such Budget to the extent
provided for in Section 2(i) hereof.
(B) Until such time as Landlord furnishes a
Projection Notice for an Adjustment Year, Tenant shall
pay to Landlord a monthly installment of Additional
Rent Progress Payment at the time of each payment of
Monthly Base Rent equal to the latest monthly
installment of Additional Rent Progress Payment. 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 Additional Rent Progress Payment shown in
the Projection Notice. Within thirty (30) days
Page 11 of 74 Pages
following Landlord's service of a Projection Notice,
Tenant shall also pay Landlord a lump sum equal to the
Additional Rent Progress Payment shown in the Project
on Notice less (1) any previous payments on account of
Additional Rent Progress Payment made during such
Adjustment Year and (2) monthly installments on account
of Additional Rent Progress Payment due for the
remainder of such Adjustment Year.
(C) Landlord shall deliver to Tenant on or before
the Commencement Date a statement of the initial
monthly installment of Additional Rent Progress Payment
payable by Tenant. Tenant agrees to pay monthly
installments of Additional Rent Progress Payment equal
to said initial monthly installments from and after the
Commencement Date of the Term hereof until changed
pursuant to a Projection Notice from Landlord as
provided above.
(D) When encumbering the Real Property with a
mortgage, trust deed, ground or underlying lease, or
other such security documents to which this Lease shall
be or become subordinate ("Security Documents"),
Landlord hereby agrees and covenants that it shall
attempt in good faith when negotiating any Security
Documents to obtain the waiver of any term or provision
that would require Landlord to, from time to time,
deposit sums into an account or escrow to be used for
the payment of any or all Taxes ("Tax Escrow"). If,
after using good faith efforts, Landlord is unable to
eliminate or waive the requirement in a Security
Document for a Tax Escrow, then Landlord shall use its
best efforts to obtain the agreement of the lender to
permit deposits made into the Tax Escrow by Landlord to
bear interest. Tenant shall receive Tenant's
Proportionate Share of such interest, dividend or other
income earned from the deposits held in the Tax Escrow,
such earnings to be disbursed from the Tax Escrow when
available pursuant to such Security Documents. In the
event Landlord is successful in obtaining such waiver,
then Tenant shall not be required to make Additional
Rent Progress Payments with regard to Taxes, but shall
make payment in accordance with the following
provisions. Landlord shall promptly provide Tenant with
a copy of any bill for Taxes ("Tax Bill") issued by the
relevant taxing authority. At least three (3) business
days prior to the date on which such Tax Bill is due,
Tenant shall deliver to Landlord a check made payable
to the relevant taxing authority in the amount of
Tenant's Proportionate Share of the Tax Bill. Landlord
agrees to promptly provide Tenant with a copy of the
receipted Tax Bill. If Taxes are reduced or refunded
after Tenant has paid its Tenant Proportionate Share
thereof, Landlord will reimburse Tenant for its
Page 12 of 74 Pages
Proportionate Share of such reduction or refund upon
receipt of same.
Landlord agrees to take all actions appropriate
for the owner of a first-class office building with
respect to Taxes, and to retain legal counsel,
reasonably acceptable to Tenant, to contest increases
in assessed valuation of the Real Property ("Tax
Contest") whenever Landlord, in its reasonable
discretion deems such contest to have merit. Landlord,
at Tenant's request, shall contest increases in
assessed valuation if Landlord has not elected to make
such a contest. The fee structure for such attorney and
the choice of consultants in connection with the Tax
Contest shall all be subject to the reasonable approval
of Tenant. Tenant shall not be deemed to have
unreasonably withheld its approval to such fee
structure if such arrangement is not customarily used
by the profession for comparable work.
(d) Readjustments.
The following readjustments with regard to the Tax and
Expense Adjustment shall be made by Landlord and Tenant:
Following the end of each Adjustment Year and after
Landlord shall have determined the amount of Taxes and
actual Expenses ("Actual Expenses") for such Adjustment
Year, Landlord shall provide Tenant with a written statement
of Actual Expenses and Taxes certified to be true and
correct by Landlord ("Landlord's Statement"). Such
Landlord's Statement shall be a detailed line item statement
ln form reasonably satisfactory to Tenant. If the Tax and
Expense Adjustment owed for such Adjustment Year exceeds the
Additional Rent Progress Payment paid by Tenant during such
Adjustment Year, then Tenant shall, within thirty (30) days
after the date of Landlord's Statement, pay to Landlord an
amount equal to the excess of the Tax and Expense Adjustment
over the Additional Rent Progress Payment paid by Tenant
during such Adjustment Year, provided that such excess is
not due to Budget revisions not previously approved by
Tenant or otherwise permitted hereunder. If the Additional
Rent Progress Payment paid by Tenant during such Adjustment
Year exceed the Tax and Expense Adjustment owed for such
Adjustment Year, then Landlord's payment of such excess
("Excess Expense Adjustment") shall accompany Landlord's
Statement. In the event the amount of the Excess Expense
Adjustment is greater than ten percent (10%) of the Total
Expense Adjustment for reasons not related to the fact that
actual Expenses were less than the Budget of Expenses and
Projections based upon ninety-five percent (95%) occupancy,
pursuant to (c)(i)(A) above, then Landlord shall pay Tenant
interest at the rate set forth below on that portion of the
Excess Expense Adjustment which exceeds ten percent (10%) of
the Total Expense Adjustment for the time period commencing
Page 13 of 74 Pages
with the date as of which the Excess Expense Adjustment was
paid until it shall be repaid hereunder, except to the
extent such Excess Expense Adjustment relates to revisions
to the Budget approved by Tenant. Interest shall be paid at
the annual rate of one percent (1%) in excess of the rate of
interest announced from time to time by The First National
Bank of Chicago, as its prime rate, changing as and when
such prime 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.
(e) Books and Records.
Landlord shall maintain books and records showing
Expenses and Taxes in accordance with sound accounting and
management practices. Tenant or its representative shall have the
right to examine Landlord's books and records showing Expenses
and Taxes upon reasonable prior notice and during normal business
hours at any time within sixty (60) days following the furnishing
by the Landlord to the Tenant of Landlord's Statement provided
for in Section 2(d). Landlord shall furnish to Tenant an audited
statement prepared by an independent certified public accountant
selected by Landlord setting forth in reasonable detail a
calculation of Expenses and Taxes. The cost of such audit shall
be an Expense pursuant to the terms of Section 2(a)(iv) hereof.
Unless the Tenant shall take written exception to any item within
sixty (60) days after the furnishing of the Landlord's Statement
containing said item, such Landlord's Statement shall be
considered as final and accepted by the Tenant.
(f) 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 to
Landlord or Landlord shall pay to Tenant, as the case may be, any
Additional Rent or Excess Expense Adjustment, as the case may be,
due to the other within thirty (30) days after the date of
Landlord's Statement sent to Tenant. Without limitation on other
obligations of Tenant which shall survive the expiration of the
Term, the obligations of Tenant to pay Additional Rent and of
Landlord to refund any Excess Expense Adjustment provided for in
this Section 2 shall survive the expiration or termination of
this Lease.
(g) No Decrease in Base Rent.
In no event shall the calculation of Additional Rent
result in a decrease of the Base Rent payable hereunder as set
forth in Section 1 hereof.
Page 14 of 74 Pages
(h) Additional Rent.
All amounts payable by Tenant as or on account of
Additional Rent shall be deemed to be additional rent becoming
due under this Lease.
(i) Budget.
At least sixty (60) days before the commencement of
each Adjustment Year during the Term hereof, Landlord shall
furnish to Tenant for its approval a detailed proposed budget of
Expenses for the forthcoming Adjustment Year which budget shall
include any capital improvements proposed to be included in
Expenses pursuant to 2(a)(iv)(A) hereof ("Budget"). The Tenant
agrees to approve or disapprove the Budget in its reasonable
discretion within thirty (30) days of receipt thereof. The Budget
shall contain all appropriate supporting schedules, including
information to indicate competitive bidding undertaken by
Landlord for items which are the subject of a contract and
Landlord's justification for selection of a contractor whose bid
was not the lowest bid. Landlord will competitively bid items
subject to contract when Landlord deems such procedure
appropriate for the particular Budget item in its reasonable
discretion. Tenant's failure to respond to Landlord within such
thirty (30) day time period shall be deemed approval of the
Budget. If disapproved, the Tenant shall set forth in writing
within such thirty (30) day time period, which line items it
disapproves ("Disapproved Items") and shall indicate the reasons
for such disapproval. Landlord shall promptly reprice the
Disapproved Item and use reasonable efforts to obtain a reduction
in such line items. Tenant shall not have the right to disapprove
line items in the Budget for which prices are imposed on Landlord
or are non-negotiable such as, but not limited to, utility rates
or labor rates at union pay scale. In the event the Disapproved
Item is the subject of a contract and Tenant has stated in
writing to Landlord that it believes Landlord can obtain a
service or material of a comparable quality at a lower price and
suggests to Landlord a proposed alternative bidder, and Landlord
agrees that the proposed alternative bidder meets its reasonable
standards of care and responsibility, then Landlord shall
promptly, at its expense, rebid the Disapproved Items. In the
event the Budget disagreement can not be resolved through the
rebidding or repricing process, the issue as to whether Tenant's
disapproval of a particular Budget line item or Landlord's
actions in response thereto are reasonable shall be submitted to
arbitration in accordance with the provisions of Section 48
hereof. Notwithstanding that portions of the Premises may have
been sublet by Tenant, Tenant agrees that Landlord need only
obtain Tenant's approval with respect to the Budget.
If Tenant disapproves the proposed Budget for a given
Adjustment Year, until such time as a revised budget is approved,
the Building shall be operated on the basis of an interim budget
("Temporary Budget"), which Temporary Budget shall contain the
approved portions of the Budget and as to the disapproved items
Page 15 of 74 Pages
one hundred ten (110%) percent of the amount for such line item
set forth in the last approved Budget.
The Budget, after approval by the Tenant shall be
subject to periodic revisions as mutually agreed upon by the
Landlord and Tenant provided, however, that Landlord shall only
be required to obtain the prior written approval of Tenant for
any expenditure or expenditures which would cause a particular
Budget category to be exceeded by more than one hundred ten
(110%) percent of the amount set forth in the applicable Budget
category during a calendar year or which would cause the total
amount of the budgeted expenditures to be exceeded by more than
one hundred ten (110%) percent of the total amount of budgeted
expenditures set forth in the Budget, calculated on an annual
basis. Any increase in the Budget due to emergencies shall be
approved by Tenant hereunder upon notice from Landlord.
(j) Contractors.
All contractors providing services to the Building
shall be subject to the approval of Tenant, which approval shall
not be unreasonably withheld. Landlord may provide a list of such
contractors to Tenant in conjunction with its budget submission
pursuant to Section 2(i) above ln which event Tenant shall have
thirty (30) days in which to approve or disapprove same. If
Tenant disapproves a contractor, Tenant shall discuss the reasons
for such disapproval with the Landlord. Approval of the Budget
shall be deemed approval of the list unless Tenant designates
otherwise. Tenant agrees to approve or disapprove proposed
contractors other than as set forth in the preceding sentence
within ten (10) business days of submission of a list of same to
Tenant. Tenant's failure to respond within said ten (10) day
period shall be deemed approval of such list. Notwithstanding the
foregoing approvals, Landlord shall be entitled to use a con-
tractor not approved as aforesaid if required in the event of an
emergency and Landlord shall notify Tenant of the identity of
such contractor as soon as practical under the circumstances.
(k) Computation of Adjusted Rent - Summary.
Base Rent, as previously adjusted (as hereinafter
described), will be further adjusted based upon of the
Base Rent plus the previous CPI Adjustments times the percentage
increase in the CPI Index during the Term of the Lease, except as
otherwise set forth herein. The CPI Index for the month prior to
the beginning of each Lease Year shall be measured against the
CPI Index for the last month of said Lease Year to determine the
applicable percentage increase in the CPI Index.
The first Lease Year for which CPI Adjustment is to be
paid is the Lease Year, which adjustment shall be paid
entirely at the beginning of the Lease Year. The Base Rent
plus CPI Adjustment for the Lease Year will be Adjusted
Rent payable in the Lease Year. The CPI Adjustment for
the Lease Year and subsequent Lease Years will be based
Page 16 of 74 Pages
upon the Adjusted Rent for the prior Lease Year (i.e., the Base
Rent plus all previous CPI Adjustments). After the expiration of
a Lease Year, the actual percentage increase in the CPI Index
will be determined for that Lease Year and a lump-sum payment
will be made ln the amount of the actual CPI Adjustment for such
Lease Year. Landlord shall not be entitled to estimate or
anticipate the CPI Adjustment but shall only be entitled to
collect the CPI Adjustment in one lump-sum payment after the
expiration of a Lease Year. After the expiration of the Term of
the Lease, a lump-sum payment will remain due for the last Lease
Year of the Term, which shall be payable at such time as the
increase in the CPI Index for such last Lease Year is finally
determined.
There will be a limit or "cap" upon the increase in
rent (Base Rent plus CPI Adjustments) that shall be paid for any
Lease Year of of the sum of the Base Rent plus all
prior CPI Adjustments.
To the extent that the calculation of the Base Rent
plus the CPI Adjustment, based upon of the sum of Base
Rent plus the CPI Adjustments times the percentage increase in
the CPI Index ("Uncapped CPI Adjustment") for any Lease Year,
exceeds Base Rent plus CPI Adjustment times ("Capped CPI
Adjustment"), the excess for any Lease Year will be placed into
an account or "bank" to be used to increase the payment of Base
Rent plus CPI Adjustment in any Lease Year in which the Capped
CPI Adjustment exceeds the Uncapped CPI Adjustment.
The foregoing is merely a summary of CPI Adjustment
procedure as reflected in the subsequent provisions and the
attached Exhibit F and is not, nor shall it be construed to be,
an exhaustive analysis of the calculation of CPI Adjustments.
This summary should only be read in conjunction with and
reference should be made to the subsequent provisions and the
attached Exhibit F for a more complete analysis of calculation of
CPI Adjustment.
(l) CPI Adjustment.
Tenant shall pay Adjusted Rent effective as of the CPI
Adjustment Date for each CPI Adjustment Year, as follows:
(A) Except as set forth in (E) below, Tenant shall pay
to Landlord on or before the first day of each month of each
CPI Adjustment Year an amount equal to one-twelfth (1/12) of
the "Final Adjusted Rent" for the Prior CPI Adjustment Year
calculated in accordance with the provisions of this Section
(1). Landlord shall furnish Tenant with a notice ("CPI
Notice") showing the Consumer Price Index calculations and
the amount of Tenant's Final Adjusted Rent for the Prior CPI
Adjustment Year after Landlord shall have ascertained the
Current Adjustment Date Consumer Price Index and the
Comparison Consumer Price Index to be used in calculating
Final Adjusted Rent for the Prior CPI Adjustment Year.
Page 17 of 74 Pages
(B) Until such time as Landlord determines the Final
Adjusted Rent and furnished a CPI Notice to Tenant as
provided in (A) above, Tenant shall continue to pay to
Landlord monthly installments of Adjusted Rent in an amount
equal to the latest monthly installment of Adjusted Rent
based upon the latest CPI Notice. On or before the first day
of the next calendar month following the Landlord's service
of a CPI Notice, Tenant, in addition to amounts payable
pursuant to (D) below, shall pay any amounts owed by Tenant
for monthly installments of Final Adjusted Rent on account
of and retroactive to the beginning of the period covered by
such CPI Notice. Any amounts previously paid by Tenant in
excess of the Final Adjusted Rent set forth in the CPI
Notice shall be credited against installments of Final
Adjusted Rent payable after the date of receipt of the CPI
Notice until exhausted.
(C) Following the end of each CPI Adjustment Year,
Landlord shall determine the actual percentage increase in
the Consumer Price Index for such CPI Adjustment Year by
comparing the Current Adjustment Date Consumer Price Index
with the Comparison Consumer Price Index and determining the
percentage increase for such period ("Actual Consumer Price
Index Percentage Change"). The actual Adjusted Rent for such
CPI Adjustment Year as finally determined ("Final Adjusted
Rent") shall be the lesser of:
(i) of the
Final Adjusted Rent for the immediately preceding
Lease Year ("Prior Year Final Adjusted Rent"); or
(ii) The sum of:
(a) The Prior Year Final Adjusted Rent; plus
(b) The product of
of the Prior Year Final Adjusted
Rent multiplied by the Actual Consumer Price Index
Percentage Change; plus
(c) A portion (or all and to the extent
available) of the End of Year Bank Balance (as
hereinafter defined) equal to the amount, if any,
by which the amount calculated pursuant to (C)(i)
above exceeds the amount calculated pursuant to
(C)(ii)(a) and (b) above.
For purposes of this Section, the "End of Year Bank Balance"
shall be calculated as follows: for each CPI Adjustment Year
there shall be calculated an "Uncapped Rent" which shall be
the sum of the amounts in Section (C)(ii)(a) and (b) above
and if the Uncapped Rent exceeds the Prior Year Final
Adjusted Rent, the excess, if any, shall for each CPI
Adjustment Year thereafter be entered into an account and
the sum of all such credits entered into the account, after
Page 18 of 74 Pages
deductions from said account as hereinafter provided, as of
the end of any CPI Adjustment Year shall be the "End of Year
Bank Balance." If, in any CPI Adjustment Year, the Prior
Year Final Adjusted Rent exceeds the Uncapped Rent, an
amount shall be withdrawn from the End of the Year Bank
Balance as provided in (C)(ii)(c) above and the End of Year
Bank Balance shall be decreased by the amount of said
withdrawal.
(D) Following the end of each CPI Adjustment Year and
after Landlord shall have delivered to Tenant the CPI
Notice, Tenant shall, within thirty (30) days after the date
of Landlord's CPI Notice, pay to Landlord an amount equal to
the CPI Adjustment for such CPI Adjustment Year.
(E) Notwithstanding the foregoing provisions, payment
of the CPI Adjustment for the Lease Year shall be
deferred until the Final Adjusted Rent is determined at the
beginning of the Lease Year and shall be paid in one lump
sum at such time as the CPI Notice is given to Tenant. Final
Adjusted Rent payable in the Lease Year shall be
based on the CPI Adjustment for the Lease Year
and no CPI Adjustment shall be payable during the
Lease Year.
(F) Exhibit F attached hereto sets forth examples of
the calculation of the CPI Adjustment for each Lease Year,
the calculation of Final Adjusted Rent and the
establishment, increase and decrease of the End of Year Bank
Balance, and is believed by Landlord and Tenant to be
consistent with and illustrative of the calculations
required pursuant to this Section (1) of the Lease.
3. Prior Occupancy. If Tenant takes possession of the
Premises prior to commencement of the Term, all of the covenants
and conditions of this Lease shall apply to and shall control
such pre-Term occupancy.
4. Use of Premises.
(a) Tenant shall use and occupy the Premises for
executive and general offices, for such related purposes as set
forth in (b) below, and for any other lawful purpose permitted
under applicable zoning ordinances, provided such use is not
inconsistent with a first class office building. 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) is dangerous or clearly may
be dangerous to persons or property; (iii) invalidates, increases
or clearly will invalidate or increase the amount of premiums for
any policy of insurance affecting the Real Property, unless any
additional amounts of insurance premiums so incurred, are paid by
Tenant to Landlord; or (iv) creates or clearly will create a
Page 19 of 74 Pages
nuisance, unreasonably disturbs any other tenant of the Building
or injures the reputation of the Building.
(b) Landlord agrees that, as of the date hereof, no
amendments or approvals are necessary under applicable zoning
ordinances for the following uses of the Premises: (i) the
preparation and service of food and beverages from a pantry
kitchen or lounge all for the exclusive use by officers,
employees and business guests of Tenant (but not for use as a
public restaurant or by other tenants of the Building), (ii) the
operation of vending machines for the exclusive use of officers,
employees and business guests of Tenant, provided that each
vending machine, where necessary, shall be installed in a manner
approved by Landlord and designed to avoid water leakage, and
(iii) the installation, maintenance and operation of electronic
data processing equipment, computer processing facilities and
business machines, provided that such equipment is contained
within the Premises and does not cause unreasonable (consistent
with a first class office building) vibrations, noise, electrical
interference or other unreasonable (consistent with a first class
office building) disturbance to other tenants of the Building or
the elevators or other equipment in the Building.
(c) With respect to any use permitted under this
Section 4, Tenant shall not use the Premises so as to violate any
laws or requirements of public authorities, constitute a public
or private nuisance, unreasonably interfere with or cause
physical discomfort to any of the other tenants or occupants of
the Building, interfere with the operation of the Building or the
maintenance of same as a first-class office building, or violate
any of Tenant's other obligations under this Lease.
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) Air-cooling and heat in accordance with the
heating, ventilating and air conditioning ("HVAC") Specifications
on Attachment A to the Workletter, daily from 7:00 A.M. to
6:00 P.M. (Saturdays 8:00 A.M. to 1:00 P.M.), Sundays and
holidays excepted. The term "Holidays" as used herein shall mean
those days customarily recognized as holidays by other
first-class office buildings in downtown Chicago.
(i) Subject to the provisions of subsection (ii)
below, whenever Tenant's use or occupation of the Premises
exceeds the design loads, as specified on Attachment A to
the Workletter, for the system that provides heat and
air-cooling, or Tenant's use of lighting or heat generating
machines or equipment in the Premises exceed such design
loads and affect the temperature otherwise maintained by the
heating, ventilating and air-conditioning system in the
Premises or Building, Landlord may temper such excess loads
by installing supplementary heat or air-conditioning units
in the Premises or elsewhere where necessary, and the cost
Page 20 of 74 Pages
of such units and the expense of installation, including,
without limitation, the reasonable cost of preparing working
drawings and specifications, shall be paid by Tenant as
additional rent within thirty (30) days after receipt of
invoices therefor. The expense resulting from the operation
and maintenance of any such supplementary heat or
air-conditioning units shall be paid by the Tenant to the
Landlord as additional rent at rates fixed by Landlord; such
rates shall include only the actual cost of such operation
and maintenance, plus five percent (5%) of such actual cost
for Landlord's overhead.
(ii) Landlord's agreements hereunder are subject to
governmental restrictions on energy use. Furthermore, if
Tenant requests air-cooling and heat during times other than
the hours described above, then the provision of such
additional service by Landlord shall be pursuant to Section
5(h) hereof.
(b) In common with other tenants, cold water from the
City of Chicago mains for drinking, lavatory and toilet purposes
drawn through fixtures installed in the Premises by Landlord or
by Tenant with Landlord's written consent, and hot water in
common with other tenants for lavatory purposes from regular
Building supply. Tenant shall pay Landlord as additional rent at
rates fixed by Landlord for all tenants (which rates shall not
exceed the rates charged by the public utility providing same,
plus one hundred five percent (105%) of the cost of heating hot
water) for domestic water and hot water furnished for any purpose
other than as set forth in the first sentence of this Section
5(b). The Tenant shall not waste or permit the waste of water.
Tenant shall pay the cost of acquisition, installation, repair,
maintenance and replacement of any equipment required to be
obtained to supply Tenant's special hot water needs.
(c) Janitorial and cleaning service in accordance with
the cleaning specifications attached hereto as Exhibit G
("Cleaning Specifications") in and about the Premises, Saturdays,
Sundays and holidays excepted. Tenant, on six (6) month's written
notice to Landlord, may elect to provide, at its sole cost,
janitorial and cleaning services to the Premises, which services
shall be substantially in accordance with the Cleaning
Specifications and except as hereinafter provided, Landlord shall
have no further obligation to provide such services to Tenant.
Such election may apply to all or any portion of the Premises,
provided such portion of the Premises contains full floors only
with the exception of "security areas" reasonably designated by
Tenant. With Landlord's approval, which shall not be unreasonably
withheld, Tenant may also elect to provide only certain of such
janitorial and cleaning services, with Landlord providing the
balance of same. Landlord's disapproval shall not be deemed
unreasonable if the severance of certain of the services from
Landlord's cleaning contract would result in a higher cost for
the cleaning services retained by Landlord or the severance of
such services is not practical. For purposes of calculating
Page 21 of 74 Pages
"Expenses" pursuant to Section 2 hereof, Expenses (or an
allocable portion thereof reasonably determined by Landlord in
the event of an election as to a portion of the Premises or a
portion of the services) relating to janitor and cleaning
services shall be deleted. Tenant shall employ union labor. Such
cleaning contractor shall be subject to the approval of Landlord,
which approval shall not be unreasonably withheld. Tenant hereby
indemnifies and agrees to hold Landlord harmless in the manner
set forth in Section 46 hereof with regard to the acts and
omissions of such contractor and releases Landlord from any and
all damages caused by such contractor or payments due to or
becoming due to such contractor. On six (6) months prior written
notice, Tenant may elect to have Landlord provide the services
previously undertaken by Tenant. For purposes of calculating
"Expenses" pursuant to Section 2 hereof, Expenses relating to
such services shall be included commencing with Landlord's
provision of such services.
(d) Exclusive use for passenger elevator service of
that portion of the bank of elevators as shown on Attachment A to
the Workletter, serving floors 3 through 14, both inclusive, in
the Building, subject only to the rights of ATT-IS, its
successors and assigns, pursuant to that certain lease of even
date herewith as amended from time to time. Landlord shall
provide in addition one freight elevator for the exclusive use of
Tenant and ATT-IS and their successors and assigns. Operatorless
automatic elevator service shall be deemed "elevator service"
within the meaning of this paragraph.
(e) Electricity shall not be furnished by Landlord,
but shall be furnished by an approved electric utility company
serving the area. Landlord shall permit the Tenant to receive
such service direct from such utility company at Tenant's cost,
and shall permit Landlord's wire and conduits to be used for such
purposes to the extent available and suitable. Notwithstanding
anything contained herein to the contrary, Landlord shall
provide, at no expense to Tenant, sufficient wire and conduit to
meet the requirements as indicated on Attachment A to the
Workletter. Tenant shall make all necessary arrangements with the
utility company for metering and paying for electric current
furnished by it to Tenant and Tenant shall pay for all charges
for electric current consumed on the Premises during Tenant's
occupancy thereof. Landlord shall pay for the cost of initially
metering the Premises in accordance with the standards shown on
Attachment A to the Workletter. The electricity used during the
performance of janitor service, the making of alterations or
repairs in the Premises (provided same are for Tenant's benefit),
and for the operation of the Building's HVAC system at times
other than as provided in paragraph (a) hereof at the request of
Tenant, or the operation of any special air conditioning systems
which may be required for data processing and computer equipment
or for other special equipment or machinery installed by Tenant,
shall be paid for by Tenant. Tenant shall make no alterations or
additions to the electric equipment or appliances without the
prior written consent of the Landlord in each instance, which
Page 22 of 74 Pages
consent shall not be unreasonably withheld. Tenant may, but shall
not be obligated, to purchase from the Landlord or its agent all
Lamps, used in the Premises during the Term hereof which shall be
offered by Landlord at reasonably competitive prices with a fee
for storage and handling not to exceed five percent of the cost
of such Lamps and for installation not to exceed the rates set
forth in the Budget. In the event Tenant elects not to purchase
Lamps from Landlord, Tenant will give Landlord three (3) months
notice of such election. Tenant agrees that all Lamps shall be
appropriate for their intended use and shall be consistent with
the color rendition of the Lamps in the balance of the Building.
Tenant covenants and agrees that at all times its use of electric
current shall never exceed the capacity available as stated in
Attachment A to the Workletter, provided, however, Landlord
agrees to provide additional capacity, at Tenant's request if
(i) it is reasonably feasible to do so, and (ii) Tenant pays for
the cost of same.
(f) Window washing of all exterior windows in the
Premises, both inside and out, weather permitting, in accordance
with the Cleaning Specifications.
(g) Tenant and its employees and visitors may use
below-grade enclosed parking areas for passenger vehicles in
common with Landlord and other tenants of the Building and their
employees and visitors, all subject to such reasonable rules and
regulations as from time to time may be imposed by Landlord
including, without limitation, the right to allocate specific
parking spaces to certain tenants in the Building and to charge
periodic user fees for the use of such parking spaces. Tenant
shall have available for its use, its Tenant's Proportionate
Share of the number of parking spaces in the Parking Garage.
Thirty-five (35) of such spaces in a specific contiguous location
determined by Landlord shall be provided to Tenant without
payment of periodic user fees of any kind. The balance of the
spaces may be in non-contiguous locations and Tenant shall pay
the periodic user fees charged generally to tenants of the
Building to the extent it contracts for use of such spaces.
(h) Landlord may provide such extra or additional
services as it is reasonably possible for the Landlord to
provide, and as the Tenant may from time to time request, within
a reasonable period of time after such extra or additional
services are requested. Tenant shall, for such extra or
additional services, pay the lesser of (a) the charge paid
generally by other tenants in the Building for such services or
(b) one hundred five percent (105%) of all of Landlord's
reasonable costs which are incurred in providing same, such
amount to be considered additional rent hereunder. Landlord's
cost shall include but shall not be limited to fees and other
charges paid by Landlord to architects, engineers and other
consultants retained by Landlord to determine whether or not, and
on what terms and conditions, such extra or additional services
may be provided, as aforesaid. All charges for such extra or
additional services shall be due and payable within thirty (30)
Page 23 of 74 Pages
days after they are billed. Interest at the rate set forth in
Section 27(i) shall accrue commencing at the expiration of such
thirty (30) day period. 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. At
Tenant's request, Landlord shall provide Tenant with the rates
for additional services as requested by Tenant and shall promptly
notify Tenant of any changes in such rates.
(i) Security at Building lobby entrance comparable to
that provided in first class non-institutionally owned office
buildings in downtown Chicago. Tenant shall have the right at all
times during the Term of the Lease to post a guard in the lobby
area shown on Exhibit H and to place a guard station in such area
for the purpose of restricting access to the Premises. The
location, size and design of such guard station shall be
consistent with the first-class nature of the Building and
architectural design of the Building lobby and shall be subject
to Landlord's approval, which shall not be unreasonably withheld.
Landlord and Tenant agree to cooperate in coordinating their
lobby security systems.
(j) Tenant, in common with other tenants, shall have
the right to use the loading docks, provided, however, that
Tenant and ATT-IS shall be given priority use of a single fifty
(50) foot over-the-road loading berth and Tenant and ATT-IS shall
have the exclusive use of a thirty foot loading dock and the
approximately four hundred square feet of storage area described
on Exhibit I, as said location may change in accordance with the
final approved design of the Building. Tenant acknowledges that
the aforesaid rights shall be shared with ATT-IS pursuant to the
ATT-IS Lease.
Tenant agrees that Landlord and its beneficiaries and
their agents shall not be liable in damages, by abatement of Rent
or otherwise, except in the event of the negligence, intentional
act or omission of Landlord, its beneficiaries and their agents
and employees, for failure to furnish or delay in furnishing any
service 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 so to do, 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. Tenant
shall notify Landlord if any service shall be stopped, and
Landlord will proceed diligently to restore such service as soon
as reasonably possible, subject to the provisions of this Section
5. Notwithstanding the foregoing, if as a result of any failure
or delay in providing HVAC, plumbing, water, electricity or
elevator service (other than any such failure or delay caused by
the utility company providing same or a failure or delay which
affects buildings in the area in which the Building is located,
or failure or delay caused by the negligence or intentional act
of Tenant or its agents, employees, guests or invitees) the
Page 24 of 74 Pages
Premises, or any material portion of a floor is rendered unusable
for a period in excess of three (3) consecutive business days,
then Rent for the portion of the Premises rendered unusable shall
abate until such portion is rendered usable. 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 access to any and all mechanical
installations within the Premises on reasonable notice to Tenant,
and Tenant agrees that there shall be no construction or parti-
tions or other obstructions which will materially 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 employees, agents, licensees,
invitees or contractors shall at any time tamper with, adjust or
otherwise in any manner affect Landlord's mechanical
installations unless authorized by Landlord or pursuant to the
terms of the following paragraph. All services provided by
Landlord pursuant to the terms hereof shall be of a quality level
consistent with a first class non-institutionally owned office
building. Landlord shall use reasonable efforts to provide such
services in a cost-effective manner.
If Landlord shall fail to perform any of the services
set forth in Section 5, (and such failure is not otherwise
excused as set forth in this Section 5) and such failure
continues for a period of ten (10) business days after written
notice thereof to Landlord from Tenant, then the Tenant, in
addition to the right to abate rent as set forth above, shall
have the right to perform such services not performed by Landlord
until such time as the Landlord cures its failure to perform.
Such time period shall not be extended by Force Majeure. Tenant
shall bill Landlord for all reasonable and verifiable costs of
performance by the Tenant of such services plus five percent (5%)
thereof for overhead. In the event Landlord does not pay same
within thirty (30) days of receipt of such invoice, then Tenant
shall have the right to set off such amount against amounts owed
by the Tenant to the Landlord under this Lease. The provisions of
Section 17 hereof shall not apply to this Section 5.
6. Condition and Care of Premises. 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 or the
Building has been made to Tenant by or on behalf of Landlord
except to the extent expressly set forth herein, or in the
Workletter attached hereto and made a part hereof. This Lease
does not grant any rights to light or air over or about the
property of Landlord except as set forth in Section 39. Except
for (i) any damage resulting from any negligent or intentional
act or omission of Landlord, its beneficiaries or their employees
and agents, and (ii) Landlord's Repair Obligations defined below,
and, subject to the provisions of Section 13 hereof, Tenant shall
Page 25 of 74 Pages
at its own expense keep the Premises and Tenant's leasehold
improvements and contents in good repair and tenantable condition
and shall promptly and adequately repair all damage to the
Premises caused by Tenant or any of its employees, contractors,
agents, invitees, or licensees including replacing or repairing
all damaged or broken glass, fixtures and appurtenances resulting
from any such damage. If Tenant does not do so promptly and
adequately, Landlord may (upon not less than twenty (20) days'
notice to Tenant except in an emergency) but need not, make such
repairs and replacements and Tenant, shall pay Landlord the cost
thereof within thirty (30) days after billing, plus five percent
(5%) of such cost for Landlord's overhead. Interest at the rate
set forth in Section 27(i) shall accrue commencing at the
expiration on of such thirty (30) day period.
Landlord hereby agrees to fulfill the following repair
and maintenance obligations ("Landlord's Repair Obligations"):
The Landlord will put the Premises, Building and Building service
systems supporting the Premises (including, without limitation,
plumbing, and electrical lines and equipment, heating,
ventilating and air conditioning systems, boilers and elevators)
in good repair and condition, and covenants and agrees that on
completion of the Building, all building service systems will be
in good operating condition. The Landlord shall perform all
maintenance and make all repairs and replacements to the common
areas of the Building and Building service systems not
specifically due to the Tenant's negligent or intentional act or
omission. Without limiting the generality of the foregoing
sentence or the following, the Landlord shall maintain and repair
and keep in good order, safe and clean condition (1) the
plumbing, sprinkler, HVAC (supplemental systems installed
pursuant to Section 5(a)(i) shall be maintained by Landlord at
Tenant's expense); security systems of the Building (other than
as installed by Tenant); electrical and mechanical systems and
equipment, and Landlord's elevators and boilers, all as described
in Attachment A to the Workletter, ("Standard Items") or any
substitutions for such Standard Items or additions thereto
requested by Tenant, provided such substitutions or additions do
not significantly increase Landlord's maintenance or repair
responsibilities, all of which are located in or serve the
Premises and common areas of the Building, broken or damaged
glass (unless caused by the negligent or intentional act or
omission of the Tenant or specifically required to be repaired or
replaced by Tenant pursuant to the preceding paragraph);
(2) underground utility lines and transformers and interior and
exterior structure of the Building, including the roof (except as
set forth in Section 39), exterior walls, bearing walls, support
beams, foundation, columns, exterior doors and windows and
lateral support to the Building; (3) the interior walls,
ceilings, floors and floor coverings of the common areas of the
Building; (4) the exterior improvements to the Land, including
shrubbery, landscaping and fencing; and (5) the common areas
located within or outside the Building, including the common
entrances, corridors, doors and windows, loading dock, stairways
and lavatory facilities and access ways therefor.
Page 26 of 74 Pages
7. Return of Premises.
(a) 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
good repair and tenantable condition, ordinary wear and tear,
loss or damage by fire or other insured casualty, and damage
resulting from the negligence, intentional act or omission of
Landlord, its beneficiaries or their employees and agents
excepted, failing which Landlord may restore the Premises and
such equipment and fixtures to such good and tenantable condition
and Tenant shall pay the cost thereof to Landlord within thirty
(30) days of receipt of an invoice together with five percent
(5%) of such cost as Landlord's overhead. Interest at the rate
set forth in Section 27(i) shall accrue commencing at the
expiration of such thirty (30) day period. In no event shall
Tenant remove items, the removal of which would cause damage to
the structure of the Building, without Landlord's consent, which
consent shall not be unreasonably withheld. If Landlord's consent
is obtained, Tenant shall repair all damage at its expense.
(b) All installations, additions, partitions,
hardware, light fixtures, non-trade fixtures and improvements,
temporary or permanent, except movable furniture, personal
property and equipment belonging to Tenant, in or upon the
Premises, placed there by Tenant or by Landlord pursuant to the
Workletter, shall be Landlord's property and shall remain upon
the Premises, all without compensation, allowance or credit to
Tenant provided, however, Tenant may elect at its discretion to
remove custom millwork, cabinetry, equipment from the telephone
equipment room, carpeting, track lighting, special lighting
fixtures and office display modules, in which event Tenant shall,
prior to the end of the Term or ten (10) days after the earlier
Termination of the Lease or Tenant's right to possession, repair
any damage to the Premises caused by such removal, failing which
repair by Tenant, Landlord may repair the Premises and Tenant
shall pay the cost thereof to Landlord within thirty (30) days of
receipt of an invoice, together with five percent (5%) of such
cost for Landlord's overhead. Interest at the rate set forth in
Section 27(i) shall accrue commencing at the expiration of such
thirty 30 day period.
(c) Tenant shall remove Tenant's furniture, machinery,
safes, trade fixtures and other items of movable personal
property of every kind and description from the Premises and
restore any damage to the Premises caused thereby, such removal
and restoration to be performed 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
Page 27 of 74 Pages
Landlord may do so and thereupon the provisions of Section 15(f)
shall apply.
(d) All obligations of Tenant pursuant to this Section
7 shall survive the expiration of the Term or sooner termination
of this Lease, provided, however, if Landlord has not made a
written claim against Tenant within ninety (90) days after the
expiration of the Term or termination of the Lease, all such
obligations of Tenant shall terminate and Landlord shall have no
further rights with respect to the foregoing. Nothing contained
herein shall relieve Tenant from its obligations pursuant to
Section 2(f) hereof.
8. Holding Over. Tenant may retain possession of the
Premises or any part thereof for the purpose of preparing to
vacate the Premises for a period of ninety (90) days or less
after termination of the Lease unless (a) Landlord notifies
Tenant on or before sixty (60) days prior to the Lease
Termination Date that a new lease has been entered into with a
new tenant for all or a portion of the Premises, in which event
Tenant shall deliver possession of such portion of the Premises
to Landlord on the Lease Termination Date, or (b) in the event
Landlord executes a lease for all or a portion of the Premises
during the sixty (60) day period prior to the Lease Termination
Date and promptly notifies Tenant of same, in which event Tenant
shall deliver possession of the portion of the Premises subject
to such lease, together with the portions of the Premises
required for access thereto and use thereof, within ninety (90)
days of receipt of such notice. All of the foregoing are
hereinafter referred to as "Permitted Holdovers." Permitted
Holdovers shall be at the Rent applicable under Sections 1 and 2
hereof. Tenant shall not be liable for any damages of Landlord
for such Permitted Holdovers. The Tenant shall pay Landlord for
each day Tenant retains possession of the Premises or any part
thereof subsequent to the expiration of a Permitted Holdover, an
amount which is one hundred fifty percent (150%) of the amount of
Rent, as set forth in Sections 1 and 2 hereof, for each day
(computed on a year of 365 days) applicable to that portion of
the Premises being held-over. Tenant shall also pay all direct
actual damages and, to the extent provided herein, consequential
damages, sustained by Landlord by reason of such retention. In no
event shall consequential damages payable by Tenant pursuant to a
final nonappealable determination by a court having jurisdiction
of the matter, exceed an amount equal to two hundred percent
(200%) of the rent charged by the Landlord for the most recently
leased single full floor in the Building multiplied by the number
of floors being retained for each month, or fraction thereof,
Tenant holds over subsequent to the expiration of a Permitted
holdover. Nothing in this Section contained shall be construed or
operate as a waiver of Landlord's right of re-entry or any other
legal or equitable right or remedy to gain possession of that
portion of the Premises being held-over. Notwithstanding the
foregoing, Tenant shall not be liable for any consequential
damages if the holdover is due to a Force Majeure event as
defined in Section 47 hereof.
Page 28 of 74 Pages
9. Rules and Regulations.
(a) Tenant agrees to observe and not to interfere with
the rights reserved to Landlord contained in Section 10 hereof
and agrees, for itself, its employees, agents, contractors,
invitees and licensees, to comply with the rules and regulations
set forth in Exhibit J attached to this Lease and made a part
hereof. Any additional rules and regulations applicable to Tenant
as shall be adopted by Landlord pursuant to Section 10 of this
Lease shall be subject to Tenant's approval, which approval shall
not be unreasonably withheld. Disapproval of a rule or regulation
solely for the reason that it increases the cost of occupancy for
all Tenants in the Building (provided such increase is, in
itself, not unreasonable) shall be deemed as unreasonable
withholding of approval. Tenant agrees to approve or disapprove
such additional rules and regulations within ten (10) days of
Landlord's submission of same to Tenant. In the event Tenant
disapproves a rule or regulation, Tenant shall notify Landlord
with specificity as to the reason for such disapproval. Failure
to respond within such ten (10) day period shall be deemed to be
approval.
(b) Any violation by Tenant of any of the rules and
regulations set forth on Exhibit I or other Section of this
Lease, or as may hereafter be adopted by Landlord pursuant to
Section 10 of this Lease, and approved by Tenant, 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. Landlord shall use
its reasonable efforts to enforce said rules and regulations
against any other tenant or any other persons. The cost of such
enforcement shall be an Expense hereunder provided that (1) all
leases with tenants in the Building shall contain a provision
specifying that such tenant shall be liable for all costs and
expenses, including attorney's fees, incurred by Landlord in
enforcing the rules and regulations against such tenant and
(2) Landlord uses reasonable efforts to collect such costs,
expenses and fees.
(c) Landlord agrees not to discriminate against Tenant
in the enforcement of rules and regulations applicable to all
tenants in the Building.
10. Rights Reserved to Landlord. Landlord reserves the
following rights, exercisable at its election with notice to
Tenant:
(a) To change the street address of the Building,
subject to the prior approval of Tenant. Landlord agrees to
reimburse Tenant for reasonable costs incurred in replacing
stationery or other similar items.
(b) The location and style of the suite number and
identification sign or lettering for the Premises occupied by the
Page 29 of 74 Pages
Tenant shall be subject to the approval of Landlord, which
approval shall not be unreasonably withheld. Landlord and Tenant
shall mutually agree on the size, design and location of Tenant's
identification in the first floor lobby and the signage by which
visitors will be directed to the second floor lobby. Nothing
contained herein shall be deemed to give Landlord approval rights
as to Tenant's name or logo.
(c) To retain at all times, and, subject to the
provisions of subsection (f) below, to use in appropriate
instances, passkeys to the Premises.
(d) To exhibit the Premises on reasonable notice to
Tenant to prospective purchasers and mortgagees and during the
last year of the Term to exhibit the Premises on reasonable
notice to Tenant to prospective tenants.
(e) To have access for Landlord to any mail chutes
according to the rules of the United States Postal Service.
(f) 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
subject, however, (with the exception of janitor service) to the
following:
(i) The Landlord will give an employee designated in
writing by the Tenant, advance oral notice of its desire to
enter the Premises and the purposes for such entry; and
(ii) The Landlord agrees that neither it nor any of its
representatives, employees, invitees or agents will enter
into or move about the Premises unless accompanied by a
representative of the Tenant; and
(iii) The Landlord agrees that if, prior to such entry,
it i impracticable for the Tenant to secure classified or
confidential material, the Tenant may prevent the Landlord
from access to the area where such material is located until
same is secured; provided, however, that in the event of an
emergency, the Tenant will secure the same promptly; and
(iv) The Landlord will use all reasonable efforts not
to disturb the Tenant's use and occupancy of the Premises;
and
(v) Notwithstanding the foregoing Tenant agrees that
Landlord shall have immediate access to the Premises in the
event of an emergency. Tenant agrees to provide Landlord
with a reasonable means of access for such emergencies.
(g) 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 in accordance with security controls
Page 30 of 74 Pages
and to establish their right to enter or leave in accordance with
such rules as Landlord shall prescribe. Landlord and Tenant shall
cooperate with respect to the coordination of lobby security.
With the exception of the negligence or intentional acts of
Landlord, its beneficiaries and their agents and employees,
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 or security 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 or security program developed
by Landlord.
(h) To control and prevent access to common areas and
other non-general public areas of the Building or any portion
thereof, pursuant to the provisions of the applicable rules and
regulations adopted by Landlord.
(i) Provided that reasonable access to the Premises
shall be maintained and the business of Tenant shall not be
interfered with unreasonably, to rearrange, relocate, enlarge,
reduce or change corridors, exits, entrances in or to the
Building and to decorate and to make, at its own expense,
repairs, alterations, additions and improvements, structural or
otherwise, in or to the Building or any part thereof and, such
alterations as are necessary for the connection of the Building
("Connection Work") with the building contemplated by Landlord to
be built adjacent to the Building ("Phase II"). During such
Connection Work and other work described herein, Landlord may
enter the Premises, subject to the requirements of Section
10(f)(i)-(v), and take into and upon or through any part of the
Building, including the Premises, all materials that may be
necessary for such Connection Work and other work described
herein. Landlord shall construct partitions to separate the area
of the Premises in which the Connection Work is taking place in
order to keep noise and dust at a minimum. Landlord shall
partition only that portion of the Premises necessary for the
performance of the Connection Work. Rent shall abate as to that
portion of the Premises used by Landlord for such Connection Work
until the Tenant can reoccupy and use the portion without
unreasonable interference. Landlord shall, at its expense, repair
all damage to the Premises and restore the Premises to their
original condition. Landlord shall obtain all appropriate
insurance or cause its contractors to carry such insurance. All
Connection Work shall comply with all insurance requirements and
all applicable laws and ordinances and rules and regulations of
governmental departments or agencies. Landlord shall defend,
indemnify and hold Tenant harmless from all costs, damages, liens
and expenses related to such work. Landlord may, at its option,
Page 31 of 74 Pages
make any repairs, alterations, improvements and additions in and
about the Building and the Premises during ordinary business
hours, provided, however, if the conduct of Tenant's business is
materially and adversely affected by same, (other than Connection
Work performed in the Premises if Tenant leases space in Phase
II) at Tenant's reasonable request, such work (other than
emergency work) shall be done during other than business hours,
at no cost or expense to Tenant.
(j) To designate parking spaces in the Building for
the exclusive use of one or more tenants (subject to Tenant's
rights herein set forth), to install gates, traffic regulating
devices, security systems, and directional signage, make,
prescribe and adopt such reasonable rules and regulations,
subject to the approval of Tenant, which approval shall not be
unreasonably withheld, in addition to or other than or by way of
amendment or modification of the rules and regulations contained
in Exhibit J attached to this Lease, relating to use of parking
spaces and the underground parking areas including, but not
limited to, vehicle size, direction of traffic, loading and
unloading of vehicles and the like. If Tenant shall disapprove
any rules and regulations, Tenant shall state with specificity
its objections thereto.
(k) 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
set forth on Exhibit I attached to this Lease or other Sections
of this Lease, subject to the approval of Tenant, which approval
shall not be unreasonably withheld, 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 and
comply with all such reasonable rules and regulations. If Tenant
shall disapprove any rules and regulations, Tenant shall state
with specificity, its objections thereto.
(l) To install and designate areas outside of the
Premises for installation of vending machines and collect all
income from operation thereof, provided, however in no event
shall vending machines be installed in the lobbies of the
Building.
11. Alterations.
(a) Tenant shall not make alterations, improvements
and additions in the Premises that affect the structure of the
Building or, except as set forth in this Section 11(a), that
affect building systems or equipment, including, but not limited
to HVAC, electrical and plumbing systems, and fire, smoke
detection and Temperature Control Systems ("Structural
Alterations") without Landlord's advance written consent in each
instance, which approval shall not be unreasonably withheld.
Landlord shall not be deemed to have acted unreasonably if it
withholds its consent because: such work when completed by Tenant
will, in the reasonable opinion of Landlord or Landlord's
Page 32 of 74 Pages
Architect, adversely affect building systems or the structure or
safety of the Building and its occupants; such work will increase
Landlord's cost of furnishing services (unless Tenant agrees to
reimburse Landlord for such increased costs) or otherwise will
materially adversely affect Landlord's ability to furnish
services to Tenant or other tenants. 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. Landlord shall have
thirty (30) days within which to review, and have its consultants
review, the proposed Structural Alterations and Landlord shall be
entitled to reimbursement for its reasonable costs incurred in
such review and determination, plus five percent (5%) of such
costs for Landlord's overhead. Landlord agrees to proceed
diligently with such review and to inform Tenant of its consent
or disapproval promptly. Notwithstanding anything contained
herein to the contrary, Tenant may make the alterations,
improvements or additions to the Premises as listed below without
Landlord's consent.
1. Activate, cap or relocate cellular deck
power/voice/data outlets.
2. Minor alteration of interior tenant space walls and
wall/power/voice/data outlets and circuits as long as
equipment connected to said outlets does not affect
HVAC.
3. Relocate light fixtures (minor relocations not
affecting switching).
4. Minor relocation of air diffusers within flex range.
5. Repainting or recarpeting of a material portion of the
Premises.
6. Minor carpentry such as decorating, picture hanging,
furniture/cabinet-securing, carpet changes and
repainting not covered by 5 above.
7. All furniture additions, removals or relocations.
Items 1 through 5 above are hereinafter referred to as
"Non-Structural Alterations." Except as set forth in the next
sentence, Tenant shall notify Landlord with specificity in
writing of all Non-Structural Alterations at least twenty-four
(24) hours prior to its commencement including, without
limitation, the nature and location of the Non-Structural
Alterations and the identity of the contractor or contractors
performing such work. Tenant shall notify Landlord of
Non-Structural Alterations described in 1 above on a monthly
basis. Tenant shall also promptly notify Landlord of any material
changes to the Non-Structural Alterations previously described to
Landlord.
Page 33 of 74 Pages
(b) All work of the nature herein contemplated may be
done by contractors chosen by Tenant, provided, however, that as
to Structural Alterations, the Tenant's choice of contractors
shall be subject to the approval of Landlord, which approval
shall not be unreasonably withheld. All contractors chosen by
Tenant shall be of good reputation, have financial capacity to
complete the work, be experienced in the area of work for which
they have been hired, shall to the extent relevant, be familiar
with high-rise construction, have good labor relations and
utilize union labor. Tenant shall supply Landlord prior to
commencement of the work with copies of all contracts and
warranties with respect to Structural Alterations and as to
Structural and Non-Structural Alterations, permits required in
connection with such work and evidence of insurance coverage,
including coverage of Landlord as an additional insured party.
Working drawings and specifications with respect to Structural
Alterations only shall be prepared at Tenant's expense by
architects or engineers retained by Tenant and approved by
Landlord, which approval shall not be unreasonably withheld.
After completion of the Structural Alterations, Tenant shall
furnish Landlord with final construction drawings marked to show
all changes. As to Non-Structural Alterations, Tenant shall
furnish Landlord on completion thereof with field drawings and
plans and specifications, if any, for information purposes only.
In the event Tenant elects to use contractors employed by
Landlord for either Structural or Non-Structural Alterations,
then Tenant shall pay the cost of such work plus a fee to
Landlord as set forth in Landlord's bid for such work. In the
event Tenant employs its own contractors, then Landlord shall not
be entitled to any fee as to Non-Structural Alterations but, with
respect to Structural Alterations, Tenant shall reimburse
Landlord for its out-of-pocket architectural and engineering fees
and expenses in connection with the review of working drawings
and specifications plus five percent (5%) of such costs for
Landlord's overhead and for field supervision of Structural Work,
Landlord shall be entitled to reimbursement for its out-of-pocket
architectural and engineering fees and other expenses in
connection with such supervision, plus three percent (3%) of such
costs for Landlord's overhead.
(c) All work of the nature herein contemplated shall
be at Tenant's expense, and shall comply with all insurance
requirements and with all ordinances and regulations of the City
of Chicago or any department or agency thereof, and with the
requirements of all statutes and regulations of the State of
Illinois or of any department or agency thereof. All work done by
Tenant or its contractors pursuant hereto shall be done in a
first-class workmanlike manner, using only premium grades of
materials at least equal to the building standards described on
Attachment A to the Workletter, and shall comply with all
insurance requirements and all applicable laws and ordinances and
rules and regulations of governmental departments or agencies and
the rules and regulations adopted by the Landlord for the
Building. Tenant shall obtain all appropriate insurance or cause
its contractors to carry such insurance. Tenant shall defend and
Page 34 of 74 Pages
hold Landlord, its beneficiaries, agents and employees harmless
from all costs, damages, liens and expenses related to such work.
(d) The Landlord shall not, without the prior written
consent of Tenant, which consent shall not be unreasonably
withheld, make any alterations to the architectural character of
the exterior facade of the Building (including, but not limited
to the exterior color and primary material used thereon) or any
material alteration lo the lobby of the Building, except for
(1) alterations performed in connection with tenant improvements
to the retail area, provided same are consistent with the
first-class nature of the lobby, and (2) ordinary and necessary
repairs and maintenance to the lobby and interior portions of the
Building and replacements to the extent same are consistent With
the initial character of the lobby and exterior portions of the
Building.
12. Assignment and Subletting
(a) Except as hereinafter provided, Tenant shall not,
without the prior written consent of Landlord in each instance,
either prior or subsequent to the commencement of the Term,
(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. 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. The
foregoing provisions shall apply to any permitted assignee or
subtenant of Tenant.
(b) Without thereby limiting the generality of the
foregoing provisions of this Section 12, Tenant expressly
covenants and agrees not to enter into any lease, sublease,
license, concession or other agreement for use, occupancy or
utilization of the Premises which provides for rental or other
payment for such use, occupancy or utilization based in whole or
in part on the net income or profits derived by any person from
the property leased, used, occupied or utilized (other than an
amount based on a fixed percentage or percentages of receipts or
sales), and that any such purported lease, sublease, license,
concession or other agreement shall be absolutely void and
ineffective as a conveyance of any right or interest in the
possession, use, occupancy or utilization of any part of the
Premises.
(c) Consent by Landlord to any assignment, subletting,
use or occupancy, or transfer or assignment, subletting or
transfer by Tenant which is permitted hereunder without
Page 35 of 74 Pages
Landlord's consent, shall not operate to relieve the 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.
(d) Tenant shall not assign this Lease or sublet all
or any portion of the Premises except as provided in Section
12(h), (i) or (j) until the earlier of (1) three years from the
Commencement Date or (2) the date on which "Breakeven Leasing" is
reached ("Lease-Up Period"). Breakeven Leasing will be deemed
reached when the net operating income from the Building, after
taking into consideration payment of all costs and expenses
relative thereto (whether or not considered Expenses hereunder)
and all reasonably required reserves consistent with generally
accepted accounting principles and usual and customary management
practices, which is then available for payment of debt service
equals or exceeds the amount required to pay debt service
payments required to service all existing loans (as defined in
Section 16 hereof) and all required payments to equity investors
pursuant to any Second Mortgage (as defined in Section 17
hereof). After the end of the Lease-up Period, Tenant may assign
or sublease all or any portion of the Premises in accordance with
the terms and provisions of this Section 12, provided, however
until Breakeven Leasing is achieved (if not previously reached at
the end of the Lease-up Period) Tenant will not sublease the
Premises or assign the Lease for less than the quoted rate
published by Landlord for comparable space in the Building except
pursuant to Section 12(h), (i) or (j). Landlord agrees to make
such rates available to Tenant on Tenant's request. Once
Breakeven Leasing is achieved, there shall be no further
restrictions on the rate charged by Tenant for subleases or an
assignment. Subsequent thereto, Tenant shall, by notice in
writing, advise Landlord of its intention to assign this Lease or
sublet any part or all of the Premises for the balance or any
part of the Term. Landlord will not unreasonably withhold its
consent to Tenant's assignment of this Lease or subletting of the
space covered by its notice. Landlord shall not be deemed to have
unreasonably withheld its consent to a sublease of part or all of
the Premises or an assignment of this Lease if its consent is
withheld because: (i) Tenant is then in default hereunder (for
purposes of this Section 12, "default" shall mean either (a) a
material default which is not cured, or (b) a Default; (ii) the
proposed use of the Premises by the subtenant or assignee does
not conform with the use set forth in Section 4 hereof; (iii) in
the reasonable judgment of Landlord, the proposed subtenant or
assignee is of a character or is engaged in a business which
would be deleterious to the reputation of the Building as a
first-class non-institutionally owned office building, or the
subtenant or assignee is not sufficiently financially responsible
to perform its obligations under the proposed sublease or
assignment; (iv) the events or matters set forth in Section
12(e)(1), (2), (3) or 4 shall be satisfied, provided, however,
that the foregoing are merely examples of reasons for which
Page 36 of 74 Pages
Landlord may withhold its consent and shall not be deemed
exclusive of any other reasons for reasonably withholding
consent, whether similar or dissimilar to the foregoing examples.
Tenant shall furnish Landlord with copies of all documents
relating to any such sublease or assignment including financial
statements of the assignee or subtenant if requested by Landlord.
(e) Notwithstanding anything contained herein to the
contrary, subsequent to the Lease-up Period, Landlord agrees that
Tenant may enter into sublease(s) of up to fifty percent (50%) of
the Rentable Area of the Premises without the consent of the
Landlord, provided that the standards set forth in Section 12(d)
and below are met.
1. The use is not prohibited by the Chicago, Illinois
zoning ordinance.
2. The use is consistent with first-class non-
institutional office buildings in the central business
district area of Chicago, Illinois.
3. The use does not involve the sale of food or liquor for
consumption on the Premises to anyone other than
employees or guests.
4. The use is not an amusement establishment or a
"sexually-oriented business establishment."
5. The use does not involve increases in pedestrian
traffic through the common areas of the Building to the
extent that a material increase in security or
janitorial service is necessary.
Tenant agrees to notify Landlord of each such sublease, the
portion of the Premises which is subject to such sublease, and
the identity of the subtenant. Tenant shall deliver a true,
complete and correct copy of each sublease to Landlord promptly
following execution thereof. Tenant shall remain obligated under
this Lease in the event of any sublease or assignment, unless
otherwise agreed by Landlord and Tenant. Each such sublease or
assignment shall contain a covenant by the subleasee or assignee
to comply with the terms of this Lease insofar as they relate to
such subleasee or assignee.
(f) If Tenant 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 due and payable by Tenant
under this Lease, then Tenant, after deduction of all direct,
out-of-pocket expenses ("Expenses") relating to such assignment
or subletting, including, but not limited to, leasing
commissions, attorney's fees and costs of redecorating and
demising the new premises, shall pay to Landlord as additional
rent 33.33% of any such excess rent or other monetary
consideration, including any lump sum payment made to Tenant
(hereafter referred to as "Landlord's Net Profits") immediately
Page 37 of 74 Pages
upon receipt under any such assignment or, in the case of a
sublease, on the first day of each month during the term of any
sublease; it being agreed, however, that Landlord shall not be
responsible for any deficiency if Tenant shall assign this Lease
or sublet the Premises or any part thereof at a rental less than
that provided for herein.
(g) Landlord hereby agrees that Tenant may mortgage or
pledge its leasehold interest in the Premises ("Leasehold
Mortgage") without obtaining Landlord's approval provided,
however, Tenant shall notify Landlord of such mortgage or pledge.
Landlord shall have no right to disapprove any such mortgage or
pledge unless the mortgagee or pledgee does not have financial
capability to perform the obligations of Tenant hereunder.
Landlord agrees to give the holder of such Leasehold Mortgage by
registered or certified mail, copies of all notices of default
served upon Tenant by Landlord, provided that prior to such
notice Landlord has been notified in writing of the address of
such Leasehold Mortgage holder. Landlord agrees that if Tenant
has failed to cure such default within the applicable grace
period, then the holder of the Leasehold Mortgage shall have an
additional thirty (30) days within which to cure or correct such
default. Any such holder shall be subject to all of the terms,
provisions and covenants of this Lease. Any such holder shall
agree to give to Landlord notice of any default by Tenant under
any such Leasehold Mortgage.
(h) Notwithstanding the foregoing provisions, and in
addition to the rights set forth in Section 12(e) hereof,
Landlord agrees that an assignment of this Lease or a sublease of
all or a portion of the Premises to a wholly-owned subsidiary of
Tenant, a corporation which owns all of the capital stock of
Tenant ("Parent") or a corporation, substantially all of the
stock of which is owned and controlled by the Parent, or other
wholly-owned subsidiaries of Parent, shall not require Landlord's
consent ("Permitted Transferees"). Such Permitted Transferee
shall be subject to all of the terms and conditions of this Lease
and any assignee of the entire Lease shall in writing agree to
assume and to comply with the terms of this Lease. The further
assignment of this Lease either directly, in connection with or
as a result of the sale of the stock or assets of a Permitted
Assignee shall be subject to the consent of Landlord, which
consent shall not be unreasonably withheld in accordance with the
terms of Section 12(d) hereof. In no event shall Landlord have
any right of consent or approval of the sale of such stock or
assets.
(i) Concurrently with the execution of this Lease,
Landlord has executed the ATT-IS Lease. Landlord hereby agrees
that Tenant hereunder and tenant under the ATT-IS Lease may, from
time to time, transfer certain portions of the Premises to one
another. Such transfers may be done without Landlord's consent.
Tenant will promptly notify Landlord in writing as to any such
transfers. In such event the portion of the Premises so
transferred shall be deleted from this Lease and added to the
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ATT-IS Lease on the terms and conditions contained therein and
Tenant shall be released from all liability as to such space
accruing subsequent lo the date of transfer to ATT-IS, provided
that an appropriate amendment to the ATT-IS Lease is executed
adding such portion to the ATT-IS Lease, subject to the terms
hereof. In the event that such portion shall be added to this
Lease and deleted from the ATT-IS Lease, Tenant shall assume the
liability for such additional space upon the terms contained in
this Lease, with the exception of additional rent, if any,
amortizing the cost of leasehold improvements pursuant to
paragraph 50 of the ATT-IS Lease. Landlord, Tenant and ATT-IS
shall enter into amendments to the Lease and the ATT-IS Lease
reflecting such transfer of the Premises.
(j) Landlord acknowledges that as to certain portions
of the Premises ("Common Space") Tenant intends to allow the
tenant under the ATT-IS Lease to use same and in consideration
therefore, Tenant may seek reimbursement of certain costs
associated with the use of the Common Space from the tenant under
the ATT-IS Lease. Landlord consents to such use of the Common
Space and agrees that it shall have no other rights of approval,
consent or notice as to such joint use unless Tenant sublets or
assigns a portion of the Premises to ATT-IS, in which event, the
provisions of Section 12(h) shall apply. In no event shall
Landlord be entitled to any portion of the sums paid to Tenant by
the tenant under the ATT-IS Lease.
13. Damage or Destruction by Casualty.
(a) If the Premises or any part of the Building or
machinery or equipment used in operation of the Building 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, then Landlord shall proceed to repair and
restore with reasonable promptness the same, subject to Force
Majeure and reasonable delays for insurance adjustment.
Notwithstanding the foregoing, if the Premises or the portion of
the Building so damaged which renders the Premises unusable are
not repaired or restored within two hundred eighty (280) days
from the date of damage, then, notwithstanding anything contained
herein to the contrary, Tenant, shall have the right to terminate
this Lease, by written notice to the Landlord not later than
thirty (30) days after the expiration of said two hundred eighty
(280) day period but in any event prior to substantial completion
of such repair or restoration work. Such termination shall be
effective as of the date of such notice. Rent shall abate from
the date of such damage.
If any such damage renders all or a substantial portion
of the Premises or the Building untenantable, Landlord shall,
with reasonable promptness after the occurrence of such damage,
estimate 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
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complete such repair and restoration will exceed two hundred
eighty (280) days from the date such damage occurred, then either
Landlord or Tenant 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 twenty (20) 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 Premises, subject to reasonable delays for
insurance adjustments and Force Majeure, 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 (except as hereinafter provided) if such
repairs and restoration are not in fact completed within the time
period estimated by Landlord, as aforesaid, or within said two
hundred eighty (280) days so long as Landlord shall proceed with
reasonable promptness and due diligence. Notwithstanding anything
contained herein to the contrary, if the Premises are not
repaired or restored within three hundred sixty (360) days after
date of such fire or other casualty, then Tenant may terminate
this Lease, effective as of the date of such fire or other
casualty, by written notice to Landlord not later than thirty
(30) days after the expiration of said three hundred sixty (360)
days, but prior to substantial completion of repair or
restoration. Notwithstanding anything to the contrary herein set
forth, (a) Landlord shall have no duty pursuant to this Section
13 to repair or restore any portion of the alterations, additions
or improvements owned or made by or on behalf of Tenant in the
Premises, but shall be obligated to repair or restore the
leasehold improvements constructed by Landlord pursuant to the
Workletter and insured by Landlord pursuant to the Insurance
Option set forth in Section 19 hereof, and (b) Tenant shall not
have the right to terminate this Lease pursuant to this Section
13 if the damage or destruction was caused by the neglect,
intentional act or omission of Tenant, its agents or employees.
(b) In the event any such fire or casualty damage
renders the Premises untenantable and if this Lease shall not be
terminated pursuant to the foregoing provisions of this Section
13 by reason of such damage, then Rent shall abate during this
period beginning with the date of such damage and ending with the
date when Landlord tenders the Premises to Tenant as being ready
for occupancy. Such abatement shall be in an amount bearing the
same ratio to the total amount of Rent for such period as the
portion of the Premises rendered untenantable, unfit or
inaccessible for use by Tenant with respect to each floor of the
Premises bears to the entire Premises. Rent shall not recommence
as to the damaged portion of such floor until the repair and
restoration of all of the damaged portion has been substantially
completed and possession of such floor delivered to Tenant,
provided, however, that Landlord shall not be responsible for,
and rental shall not abate during any delay in substantial
completion caused by Tenant and its agents and employees. In the
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event of termination of this Lease pursuant to this Section 13,
Rent shall be apportioned on a per diem basis and be paid to the
date of the fire or casualty.
(c) In the event of any such fire or other casualty,
and if this Lease is not terminated pursuant to the foregoing
provisions, Tenant shall repair and restore any portion of the
alterations, additions and improvements made by or on behalf of
Tenant in the Premises, to enable Tenant to utilize the Premises
for the purposes set forth in this Lease other than work
performed by Landlord pursuant to the Workletter (and insured by
Landlord pursuant to the Insurance Option in Section 19 hereof),
and during such period of Tenant's repair and restoration
following substantial completion of Landlord's work, Rent shall
not abate and shall again be due and payable as if said fire or
casualty had not occurred, unless the damage or destruction was
caused by the neglect, intentional act or omission of Landlord,
its agents or employees.
14. Eminent Domain. If the entire Building or a
substantial part thereof, 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 purposes, the Term of this Lease shall end
upon and not before the earlier of the date when the possession
of the part so taken shall be required for such use or purpose or
the effective date of the taking. If (i) any part of the Real
Property is taken such that reasonable access to the Premises for
the conduct of Tenant's business is no longer possible, or
(ii) there is a taking of a portion of the Premises (but not
substantially all) and Tenant determines that, in its reasonable
judgment, continued occupancy of the balance of the Premises
would not be sufficient for the beneficial conduct of Tenant's
business therein, then Tenant shall have the right to terminate
this Lease by written notice to Landlord no later than thirty
(30) days after the effective date of such taking, such
termination to be effective upon service of such notice. If any
condemnation proceeding shall be instituted in which it is sought
to take or damage any part of the Building, the taking of which
would, in Landlord's reasonable 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 substantially remodel the Building to conform to the
taking, damage or changed grade, and provided further that
Landlord has terminated leases on at least twenty-five percent
(25%) of the Rentable Area of the Building (excluding the
Premises) then 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 any of the
events above referred to, Rent at the then current rate shall be
apportioned as of the date of the termination. In the event of a
taking of part (but not substantially all) of the Premises and
neither Landlord nor Tenant has exercised its termination rights,
Rent shall abate in proportion to the area of the Premises so
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taken from and after the effective date of the taking. Further,
Landlord shall promptly repair and restore the remaining portion
of the Premises to an architectural whole. In the event Landlord
fails to repair and restore the remaining portion of the Premises
within three hundred sixty (360) days after such taking, then
Tenant may terminate this Lease by written notice to Landlord
within thirty (30) days after the expiration of such three
hundred sixty (360) day period, but prior to substantial
completion of the repair or restoration Work.
Notwithstanding the termination of this Lease as
aforesaid, Landlord and Tenant hereby agree that Tenant shall
have a right to share in the condemnation award for (i) the value
of its leasehold interest and (ii) moving and relocation costs.
In no event shall (i) above be less than the value of the
unamortized cost of Tenant's leasehold improvements installed by
or on behalf of Tenant and paid for by Tenant without
reimbursement by Landlord (but regardless of whether the
improvements might be considered as part of the Premises or
become the property of Landlord under this Lease). Condemnation
proceeds shall be delivered first in satisfaction of the claims
of the holder of the First Mortgage and the Second Mortgage, with
the balance ("Award Balance") to Landlord and Tenant in
accordance with their interests as set forth herein. Tenant's
share of the Award Balance, determined as aforesaid, shall in no
event exceed the greater of a) fifty percent, or b) Tenant's
Proportionate Share at the time of the taking, provided, however,
in no event shall Tenant's share pursuant to the terms of (b)
above exceed seventy-five percent (75%) of the Award Balance. For
purposes of calculating Tenant's Proportionate Share only in (b)
above, any portion of the Expansion Area leased by Tenant shall
be excluded in determining the limit on Tenant's share of the
Award Balance. The Expansion Area shall not be excluded in
determining the value of Tenant's leasehold estate.
If the use and occupancy of the whole or any material
part of the Premises is temporarily taken for a public or
quasi-public use for a period in excess of twelve (12) months,
then at the Tenant's option to be exercised in writing and
delivered to the Landlord not later than Sixty (60) days after
the date the Tenant is notified of such taking, this Lease and
the Term remaining hereunder shall terminate as of the date
possession is taken If this Lease remains in effect, the Tenant
shall be entitled to a proportionate abatement of Rent.
15. Default: Landlord's Rights and Remedies.
(a) The occurrence of any one or more of the following
matters constitutes a default by Tenant under this Lease
("Default"):
(i) Failure by Tenant to pay any Rent within ten (10)
days after written notice thereof from Landlord to Tenant
that same is due hereunder; provided, however, that if
Tenant fails to pay the Rent when due more than three (3)
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times in one calendar year, then for the balance of such
year there shall be no ten (10) day grace period;
(ii) Failure by Tenant to pay, within ten (10) days
after written notice thereof from Landlord to Tenant, any
other moneys required to be paid by Tenant under this Lease
unless a longer period is specifically stated herein;
(iii) Failure by Tenant to cure an unpermitted
assignment or subletting as set forth in Section 12 within
thirty (30) days after written notice thereof from Landlord
to Tenant;
(iv) Failure by Tenant to cure forthwith, immediately
after receipt of notice from Landlord, any hazardous
condition which Tenant has created in violation of law or of
this Lease;
(v) Failure by Tenant to observe or perform any other
non-monetary covenant, agreement, condition or provision of
this Lease, if such failure shall continue for thirty (30)
days after notice thereof from Landlord to Tenant, except
that if such default (other than defaults, which create
situations dangerous to persons or properly) cannot be cured
within said thirty (30) day period, this period shall be
extended, provided that Tenant commences to cure such
default within the thirty (30) day period and proceeds
diligently thereafter to effect such cure ("Extended Cure
Period"); provided, however, Landlord may terminate such
Extended Cure Period on written notice to Tenant at any time
after expiration of ninety days from the first notice of
default sent to Tenant if any of the following have occurred
due to Tenant's default: (1) Landlord is in default under
the First Mortgage or the Second Mortgage, (2) Landlord is
in default under any other space lease in the Building, or
(3) such default materially and adversely affects Landlord's
ownership, maintenance, management, repair or operation of
the Building;
(vi) The levy upon, either under execution or the
attachment by legal process of, the leasehold interest of
Tenant, or the filing or creation of a lien in respect of
such leasehold interest, except as may be permitted herein,
which lien shall not be released or discharged within ninety
(90) days from the date of such filing;
(vii) The Tenant becomes insolvent or bankrupt or makes
an assignment for the benefit of creditors, or applies for
or consents to the appointment of a trustee or receiver for
the Tenant or for the major part of its property;
(viii) A trustee or receiver is appointed for the Tenant
or for the major part of its property and is not discharged
within ninety (90) days after such appointment;
Page 43 of 74 Pages
(ix) Bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings
for relief under any bankruptcy law, or similar law for the
relief of debtors, are instituted (A) by the Tenant or
(B) against the Tenant and are allowed against it or are
consented to by it or are not dismissed within ninety (90)
days after such institution; or
(b) 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 the Landlord of any other right or remedy
allowed it by law;
(i) Landlord may terminate this Lease by giving to
Tenant ten (10) days, prior written notice of the Landlord's
election to do so, in which event the Term of this Lease
shall end, and all right, title and interest of the Tenant
hereunder shall expire, on the date stated in such notice;
(ii) Landlord may terminate the right of the Tenant to
possession of the Premises without terminating this Lease by
giving Tenant ten (10) days, prior written notice that
Tenant's right of possession shall end on the date stated in
such notice, whereupon the right of the 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 the 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 recovery of all moneys
due or to become due from the Tenant under any of the
provisions of this Lease.
(c) If Landlord exercises either the remedies provided
for in subparagraphs (i) and (ii) of the foregoing Section 15(b),
Tenant shall surrender possession and vacate the Premises and
immediately deliver possession thereof to the Landlord, and
Landlord may then or at any time thereafter re-enter and take
complete and peaceful possession of the Premises, with process of
law, and Landlord may remove all occupants and property
therefrom.
(d) If Landlord terminates the right of Tenant to
possession of the Premises without terminating this Lease, 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. Landlord shall have the right, from time to time,
to recover from the Tenant, and the Tenant shall remain liable
for all Additional Rent and any other sums thereafter 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
Page 44 of 74 Pages
the Term. In any such case, the Landlord shall comply with all
requirements of the law with respect to mitigation of damages in
reletting of the Premises or any part thereof for the account of
the 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
the Landlord in the Landlord's reasonable discretion shall
determine, and the Landlord shall not unreasonably withhold its
consent to any assignee or subtenant proffered by Tenant,
provided such assignee or subtenant is financially capable of
satisfying Tenant's obligations hereunder and would not otherwise
be objectionable under Sections 12(d) and 12(e)(1) through (4)
hereof. Also in any such case, the Landlord may make reasonable
repairs, alterations and additions in or to the Premises and
redecorate the same to the extent deemed by the Landlord
necessary or desirable and, in connection therewith, change the
locks to the Premises, and the Tenant shall upon receipt of an
invoice pay the cost thereof to the extent set forth in the next
sentence together with the Landlord's reasonable expenses of
reletting. Tenant shall be required to pay for such repairs,
alterations, additions and redecoration only to the extent the
cost of same does not exceed the cost of demolition plus the cost
of building standard improvements in effect at such time, and
shall be obligated to pay all of Landlord's expenses of re-entry
and the cost of reletting, including, but not limited to,
brokerage commissions. Landlord may collect the rents from any
such reletting and apply the same to the payment of Rent herein
provided to be paid by the Tenant, and 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, but 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; provided that in no event shall Tenant be entitled to a
credit on its indebtedness to Landlord in excess of the aggregate
sum (including Base Rent and Additional Rent) 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 re-entry or
repossession, repairs, alterations and additions, or reletting
shall be construed as an eviction or ouster of the Tenant or as
an election on Landlord's part to terminate this Lease, unless a
written notice of such intention be given to Tenant, or shall
operate to release the Tenant in whole or in part from any of the
Tenant's obligations hereunder, and the Landlord may, at any time
and from time to time, sue and recover judgment for any
deficiencies from time to time remaining after the application
from time to time of the proceeds of any such reletting.
(e) In the event of the termination of this Lease by
Landlord as provided for by subparagraph (i) of Section 15(b)
Landlord shall be entitled to recover from Tenant all the fixed
dollar amounts of Rent accrued and unpaid for the period up to
and including such termination date, as well as all other
additional sums payable by the Tenant, or for which Tenant is
liable or in respect of which Tenant has agreed to indemnify
Page 45 of 74 Pages
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 (x) the unamortized
portion of Landlord's Contribution to the cost of Tenant
improvements as defined in the Workletter, (y) the aggregate sum
which, at the time of such termination, represents the excess, if
any, of the present value of the aggregate Rents at the same
annual rate for the remainder of the Term as then in effect
pursuant to the applicable provisions of Sections 1 and 2 of this
Lease, 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 8%
per annum discount from the respective dates upon which such
rentals would have been payable hereunder had this Lease not been
terminated, and (z) any damages in addition thereto, including
reasonable attorneys' fees and court costs, which Landlord shall
have sustained by reason of the breach of any of the covenants of
this Lease other than for the payment of rent.
(f) All property of Tenant removed from the Premises
by Landlord pursuant to any provisions of this Lease or of law
may be handled, removed or stored by the Landlord at the cost and
expense of the Tenant, and the Landlord shall in no event be
responsible for the value, preservation or safekeeping thereof.
Tenant shall pay Landlord for all expenses incurred by Landlord
in such removal and storage charges against such property so long
as the same shall be 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, shall, at Landlord's option,
(i) 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; or (ii) be removed by Landlord at Tenant's
sole expense.
(g) Tenant shall pay all of Landlord's costs, charges
and expenses, including court costs and attorneys' fees, incurred
in enforcing Tenant's obligations under this lease or incurred by
Landlord in any litigation, negotiation or transactions in which
Tenant causes the Landlord, without Landlord's fault, to become
involved or concerned.
(h) In the event that Tenant shall be adjudged
bankrupt, or a trustee in bankruptcy shall be appointed for
Tenant, the provisions to Section 35 hereof shall apply.
16. Subordination.
(a) Landlord represents that as of the date hereof,
this Lease is not subordinate to any mortgage or ground lease.
Landlord may hereafter from time to time execute and deliver
mortgage or trust deeds in the nature of a mortgage, both
Page 46 of 74 Pages
referred to herein as "Mortgage," against the Land and Building,
or any interest therein, and may sell and lease back the Land. If
requested by the mortgagee or trustee under any Mortgage, or the
lessor of any ground or underlying lease ("ground lessor"),
Tenant will either at the request of Landlord (a) (subject to the
terms of subsection (c) below) subordinate its interest in this
Lease to said Mortgage, and to any and all advances made
thereunder and to the interest thereon, and to all renewals,
replacements, modifications and extensions thereof, or to said
ground or underlying lease, or to both, or (b) make Tenant's
interest in this Lease superior thereto; and Tenant will promptly
execute and deliver such agreement as may be reasonably necessary
or appropriate to give effect to the foregoing requirements.
Tenant covenants it will not subordinate this Lease to any
mortgage or trust deed other than a First Mortgage ("First
Mortgage") and Second Mortgage (as defined in Section 17 hereof)
without the prior written consent of the holder of the First
Mortgage and Second Mortgage. As a condition of any such
subordination of Tenant's interest in this Lease, Landlord will
obtain the approval of the holder of any such Mortgage to the
terms of this Lease.
(b) It is further agreed that (a) if any Mortgage
shall be foreclosed, or if any ground or underlying lease be
terminated, (i) such foreclosure or termination shall not result
in a cancellation or termination of this Lease without the prior
written consent of the holder of the First Mortgage and of any
ground lessor, (ii) the holder of the Mortgage, ground lessor (or
their respective grantees) or purchaser at any foreclosure sale,
as the case may be, shall not be (x) liable for any act or
omission of any prior landlord (including Landlord), (y) provided
Tenant is enjoying its beneficial occupancy of the Premises and
with the exception of Tenant's rights pursuant to Section 5,
subject to any off-sets or counterclaims which Tenant may have
against a prior landlord (including Landlord) and (z) bound by
any prepayment of Base Rent or Additional Rent which Tenant may
have paid in excess of the amounts then due for the current
month, (iii) the liability of the mortgagee or trustee hereunder
shall exist only so long as such trustee or mortgagee is the
owner of the Building and such liability shall not continue or
survive after further transfer of ownership, and (iv) upon
request of the mortgagee or trustee, if the Mortgage shall be
foreclosed, Tenant will attorn, as Tenant under this Lease, to
the purchaser at any foreclosure sale under any Mortgage or upon
request of the ground lessor, if any ground or underlying lease
shall be terminated, Tenant will attorn as Tenant under this
Lease to the ground lessor, and Tenant will execute such
instruments as may be necessary or appropriate to evidence such
attornment; and (b) this Lease may not be modified or amended so
as to reduce the Rent or shorten the Term provided hereunder, or
so as to adversely affect, in any other respect to any material
extent, the rights of the Landlord, nor shall this Lease be
cancelled or surrendered, without the prior written consent, in
each instance, of the mortgagee trustee under any Mortgage and of
any ground lessor.
Page 47 of 74 Pages
(c) Landlord shall obtain and deliver to Tenant, and
Tenant's agreement to subordinate its interest in this Lease is
conditioned upon receipt of a nondisturbance and attornment
agreement from the holder of the Mortgage and the lessor of any
ground or underlying lease. Such nondisturbance and attornment
agreement shall provide that Tenant's possession hereunder shall
not be disturbed in the event of a foreclosure of the Mortgage or
the exercise of any remedies under any such lease so long as
Tenant is not in Default hereunder and shall contain such
additional subordination and other provisions as are customarily
contained in such instruments.
17. Mortgagee Protection. Tenant agrees to give any
holder of any First Mortgage (as defined in Section 16 hereof),
or the holder of any second mortgage which mortgagee is secured
and/or compensated in part by payments of cash flow and/or
residual proceeds derived from operation, sale or refinancing of
the Building ("Second Mortgage") 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 First Mortgage holder or such Second Mortgage
holder. Tenant further agrees that if Landlord shall have failed
to cure such default within the applicable grace period, or if no
grace period is specified, within thirty (30) 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 thirty (30) days
and is diligently pursuing the remedies or steps necessary to
cure or correct such default, but in no event beyond sixty (60)
days after such notice), then the holder of the First Mortgage
shall have sixty (60) days beyond the initial thirty (30) day
period within which to cure or correct such default.
Notwithstanding the foregoing, provided that Tenant continues to
have effective use and occupancy of the Premises for the normal
operation of Tenant's business, the holder of the First Mortgage
shall have sixty days after the date upon which it obtains
possession of the Building to cure or correct such default, if
such default is of such a nature that it cannot be cured by the
holder of the First Mortgage until it obtains possession and such
holder of the First Mortgage diligently proceeds to pursue its
remedies.
18. Quiet Enjoyment. Upon payment by the Tenant of the
rent hereunder (including Base Rent and Additional Rent), and
upon the observance and performance of all the covenants, terms
and conditions on Tenant's part to be observed and performed, and
further subject to the provisions of Sections 16 and 17 hereof,
Tenant shall peaceably and quietly hold and enjoy the Premises
for the Term hereby demised without hindrance or interruption by
Landlord or any other person or persons lawfully or equitably
claiming by, through or under the Landlord, subject nevertheless,
to the terms and conditions of this Lease.
Page 48 of 74 Pages
19. Subrogation and Insurance.
(a) Landlord and Tenant agree to use their best
efforts (including payment of extra premiums of a reasonable
amount) to have all fire and extended coverage and material
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 said policy or the right of the
insured to recover thereunder and, providing further, that the
insurer waives all rights of subrogation which such insurer might
have against the other party.
The Landlord and Tenant each hereby waive its right of
recovery against the other and each releases the other from any
claim arising out of loss, damage or destruction to the Building,
Premises or contents thereon or therein, to the extent its
property is covered by a valid policy of insurance, (which shall
not include self insurance certificates of Tenant) and to the
extent of recovery collectible under such policy, whether or not
such loss, damage or destruction may be attributable to the
negligence of either party or its respective agent, visitor,
contractor, servant or employee.
(b) Tenant shall carry insurance during the entire
Term hereof insuring Tenant and Landlord, Landlord's agents and
beneficiaries and other parties, reasonably requested by
Landlord, as their interests may appear, with terms, coverages
and in companies reasonably satisfactory to Landlord and with
such commercially reasonable increases in limits as Landlord may
from time to time request, but initially Tenant shall maintain
the following coverages in the following amounts:
(1) Comprehensive general public liability insurance,
including contractual liability, in an amount not less than
$10,000,000.00 combined single limit or such other type of
liability coverage customarily carried by tenants in first
class office buildings.
(2) Insurance against fire, sprinkler leakage,
vandalism, and the extended coverage perils for the full
replacement cost of all Tenant leasehold improvements, plus
all additions, improvements and alterations thereto, owned
or made by or on behalf of Tenant, if any, (unless Tenant
has exercised its Insurance Option, as defined below) and of
all office furniture, trade fixtures, office equipment,
merchandise and all other items of Tenant's property on the
Premises.
Tenant shall, prior to the commencement of the Term,
furnish to Landlord policies or certificates evidencing such
coverage, which policies or certificates shall state that such
insurance coverage may not be reduced, cancelled or not renewed
without at least thirty (30) days' prior written notice to
Page 49 of 74 Pages
Landlord and Tenant (unless such cancellation is due to
non-payment of premium, and in that case only ten (10) days'
prior written notice shall be sufficient).
Landlord agrees to maintain (i) all risk insurance
based on full replacement cost of the Building during the Term
hereof and at Tenant's option, ("Insurance Option") Tenant's
leasehold improvements as specified by Tenant, and
(ii) comprehensive general liability insurance, including
contractual liability insuring Landlord's obligations hereunder,
in an amount not less than $25,000,000 combined single limit, or
such other type of liability coverage customarily carried by
Landlords of first class office buildings. Tenant agrees to pay
the portion of the premium applicable to Tenant's leasehold
improvements, if any, within thirty (30) days of Landlord's
submission of an invoice for same. Such invoice shall be
accompanied by a statement from the insurance company or agents
therefore as to the premium allocation.
(c) Tenant shall comply with all applicable laws and
ordinances, all orders and decrees of court and all requirements
of other governmental authority, and shall not directly or
indirectly make any use of the Premises which (i) is thereby
prohibited or dangerous to person or property or,
(ii) jeopardizes any insurance coverage, or (iii) increases the
cost of insurance or require additional insurance coverage,
unless Tenant agrees to pay such increased premium.
(d) Notwithstanding anything contained herein to the
contrary, Landlord agrees that Tenant may self-insure with
respect to all insurance required pursuant to this Lease,
provided that Tenant maintains sufficient liquidity to pay claims
in the amount of the insurance which Tenant would otherwise be
required to maintain pursuant to Section 19(b) hereof.
20. Nonwaiver. No waiver of any condition expressed in
this Lease shall be implied by any neglect of Landlord 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 Landlord's
rights under the provisions of Section 8, it is agreed that no
receipt of 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.
21. Estoppel Certificate. The Tenant agrees that from
time to time upon not less than fifteen (15) days' prior request
Page 50 of 74 Pages
by Landlord, or the holder of any Mortgage or any ground lessor,
the Tenant (or any permitted assignee, subtenant, licensee,
concessionaire or other occupant of the Premises claiming by,
through or under Tenant) will deliver to Landlord or to the
holder of any Mortgage, Second Mortgage or ground lessor, a
statement in writing signed by Tenant certifying (a) that this
Lease is unmodified and in full force and effect (or if there
have been modifications, that the 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) that the Landlord is
not in default under any provision of this lease, or, if in
default, the nature thereof in detail; (d) that to the best of
Tenant's knowledge 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; (e) that
there has been no prepayment of Rent other than that provided for
in the Lease; (f) 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 (g) such other
matters as may be reasonably requested by the Landlord, holder of
the Mortgage or ground lessor. For purposes of this Section 21
only, the time period for curing a default as set forth in
Section 15(v) shall be reduced to a fifteen (15) day period.
22. Tenant Authorization. Tenant (a) represents that
this Lease has been duly authorized, executed and delivered by
and on behalf of the Tenant and constitutes the valid and binding
agreement of the Tenant in accordance with the terms hereof and
(b) if Landlord so requests, it shall deliver to Landlord or its
agent, concurrently with the delivery of this Lease executed by
Tenant, an opinion of counsel as to (a) above subject to
customary exceptions.
23. Landlord Authorization. Landlord (a) represents
that this Lease has been duly authorized, executed and delivered
by and on behalf of the Landlord and constitutes the valid and
binding agreement of the Landlord in accordance with the terms
hereof, and (b) if Tenant so requests, lt shall deliver to
Tenant, concurrently with the delivery of this Lease executed by
Landlord, an opinion of counsel as to (a) above, subject to
customary exceptions.
24. Real Estate Brokers. Landlord and Tenant represent
and warrant that neither party has dealt with any broker in
connection with this Lease other than CUSHMAN & WAKEFIELD (whose
commission, if any, shall be paid by Landlord pursuant to
separate agreement) and agree to indemnify and hold harmless one
another from all damages, liability and expense (including
reasonable attorneys' fees) arising from any claims or demands of
any other broker, or brokers or finders claiming to have dealt
with such parties for any commission alleged to be due such
broker or brokers or finders in connection with the negotiation
of this Lease.
Page 51 of 74 Pages
25. Notices. In every instance where it shall be
necessary or desirable for Landlord to serve any notice or demand
upon Tenant, it shall be sufficient to send a written or printed
copy of such notice or demand by United States registered or
certified mail, postage prepaid, addressed to AT&T
Communications, Inc., Attn: B.C. Hoette, Manager -- Real Estate
Planning, 300 S. Riverside, 2nd floor, Chicago, Illinois 60606,
with copies to AT&T Resource Management Corporation at
222 Mt. Airy Road, Basking Ridge, New Jersey 07920, Attn:
Manager, Real Estate Department and Vice President and General
Attorney, until further notice from Tenant in which event the
notice or demand shall be deemed to have been served at the time
that same was posted. In each such notice to Tenant, Landlord
shall state the time period in which Tenant is required to
respond, if any, pursuant to the applicable provisions of the
Lease. Any such notice or demand to be given by Tenant to
Landlord shall, until further notice from Landlord or its agent,
be served personally or sent by United States registered or
certified mail, postage prepaid, to Stein & Company, 225 West
Monroe, Inc., Attn: Richard Rosenstein, Esq., Suite 1630,
208 South LaSalle Street, Chicago, Illinois 60604 with a copy of
said Notice to Rudnick & Wolfe, Attention: Howard Kane, Esq. or
Robert H. Goldman, Esq., 30 North LaSalle Street, Chicago,
Illinois 60602. Mailed communications to Landlord shall be deemed
to have been served at the time that same were posted.
26. Delivery of Possession and Liquidated Damages.
Possession of the Premises shall be delivered in
accordance with the Workletter. Notwithstanding anything
contained therein to the contrary, in the event that Landlord
shall fail (for reasons other than Tenant Delay as defined in the
Workletter) to substantially complete (a) the Shell and Core Work
to the level that Tenant is able to occupy and use the Premises
or applicable portion thereof without material and adverse
interference and interruption, with reasonable access to the
Premises and with the areas in and around the Building used by
Tenant to be maintained ln a safe, nonhazardous condition, and
(b) the Tenant Work, for each of the Phases on the dates set
forth in Paragraph l(c) of the Workletter, subject to delays due
to Force Majeure which ln no event, may exceed six months from
the date such Phase of the Tenant Work was to be completed, for
which no liquidated damages may be assessed, Landlord shall pay
Tenant as liquidated damages and as Tenant's sole remedy the
following amounts:
(a) $ First Month for each Phase not
completed
(b) $ Second Month for each Phase not
completed
(c) $ Third Month for each Phase not
completed
Page 52 of 74 Pages
(d) $ Fourth month for each Phase not
completed
(e) $ Fifth Month for each Phase not
completed
(f) $ Sixth Month for each Phase not
completed
(g) $ Monthly thereafter until
substantially complete
Landlord shall pay liquidated damages due and owing
hereunder within ten (10) days after the end of each such month.
In the event Landlord fails to make any such payment ("Defaulted
Payment") Tenant may, at its option, set-off the amount of the
Defaulted Payment, plus interest as set forth below, against Base
Rent due and payable hereunder subsequent to the rent abatement
set forth in Section 37 hereof. Each such Defaulted Payment shall
bear interest from the date due until the date set-off against
Base Rent at the rate of per annum.
In the event Tenant terminates the Lease pursuant to
Section 6(e) of the Workletter, the partnership owning the
beneficial interest in Landlord, AT&T/Stein Partnership has, by
guaranty dated concurrently herewith ("Termination Guaranty"),
guaranteed (i) the payment of any liquidated damages due to
Tenant pursuant to this Section 26 and (ii) the refund to Tenant
of all deposits or payments pursuant to Section 6(e) of the
Workletter. The liability of the AT&T/Stein Partnership shall be
limited to the assets and property of such Partnership.
27. 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 this Lease.
(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 or Tenant
unless in writing signed by Landlord and Tenant.
(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
Landlord or Tenant 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
Page 53 of 74 Pages
where there is more than one Tenant; and the necessary
grammatical changes required to make the provisions hereof apply
to corporations or other organizations, partnerships or other
entities, or individuals, shall, in all cases, be assumed as
though in each case fully expressed.
(e) Clauses, plats, and riders, if any, signed by
Landlord and Tenant and endorsed on or affixed to this Lease are
a part hereof.
(f) The headings of Sections are for convenience only
and do not limit, expand or construe the contents of the
Sections.
(g) The Landlord's title is and always shall be
paramount to the title of Tenant, and nothing in this Lease
contained shall empower Tenant to do any act which can, shall or
may encumber the title of Landlord.
(h) Time is of the essence of this Lease and of each
and all provisions hereof.
(i) All amounts (including, without limitation, Base
Rent and Additional Rent) owed by Tenant to Landlord pursuant to
any provision of this Lease shall bear interest from the date of
the expiration of the applicable required notice period until
paid at the annual rate of one percent (1%) in excess of the rate
of interest announced from time to time by Continental Illinois
National Bank and Trust Company of Chicago (or other Bank or
other financial institution designated by Landlord), at Chicago,
Illinois, as its prime rate, changing as and when said prime 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.
(j) 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.
(k) All understandings and agreements, oral or
written, heretofore made between the parties hereto are merged in
this Lease and in those two certain agreements dated May 16,
1986, which documents alone fully and completely expresses the
agreement between Landlord (and its beneficiaries and their
agents) and Tenant.
(l) Whenever the approval or consent of either
Landlord or Tenant is required, such consent or approval shall
not be unreasonably withheld or delayed. Notwithstanding any of
the terms and conditions contained herein, with respect to
approvals or consents required pursuant to the terms of this
Lease, Landlord shall have no obligation to deal with any
subtenant of Tenant, but may look solely to Tenant for same.
Page 54 of 74 Pages
(m) Landlord and Tenant represent that they will
comply (unless exempted) with Attachments A, B and C, identified
as Exhibit K to this Lease and rules and regulations issued in
connection therewith (collectively the "Attachments") as such
Attachments may be amended from time to time.
(n) In computing any period of time pursuant to this
Lease, the day of the act, date of notice, event or default from
which the designated period of time begins to run will not be
included. The last day of the period so counted will be included,
unless it is a Saturday, Sunday or a legal holiday in the State
of Illinois, in which event the period runs until the end of the
next day which is not a Saturday, Sunday or such legal holiday.
Any time period which commences to run as of the date of this
Lease or as of the date hereof shall be deemed to have commenced
to run as of the date this Lease was executed by Landlord and
Tenant as opposed to December 31, 1985.
28. Landlord. The term "Landlord" as used in this
Lease means only the owner or owners from time to time of the
Building so that in the event of any assignment, transfer,
conveyance or sale, once or successively, of the Building, or any
assignment of this Lease by Landlord, the then Landlord making
such sale, transfer, conveyance or assignment shall be and hereby
is entirely freed and relieved of all covenants and obligations
of Landlord hereunder accruing after such sale, conveyance or
assignment, and Tenant agrees to look solely to such purchaser,
transferee, grantee or assignee with respect thereto. The holder
of a mortgage or trust deed (or assignment in connection with a
mortgage or trust deed) shall not be deemed such a purchaser,
grantee or assignee under this Section 28. This Lease and the
obligations of Tenant hereunder shall not be affected by any such
assignment, transfer, conveyance or sale, and Tenant agrees to
attorn to the purchaser, grantee or assignee.
29. 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 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
Premises, the Building, the Land or against the Tenant's
leasehold interest in the Premises, except as otherwise
permitted, and, in case of any such lien attaching, to
immediately pay and remove same. Notwithstanding the foregoing,
Tenant shall have the right to contest the validity of any such
lien provided such lien is bonded or Tenant has otherwise
provided adequate security to Landlord for such lien claim.
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 Premises, the Land or the Building, and any and all
liens and encumbrances created by Tenant shall attach only to
Tenant's interest in the Premises. If any such liens so attach
and Tenant fails to pay and remove same within thirty (30) days,
Page 55 of 74 Pages
or to bond same or provide adequate security as aforesaid,
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 to the date of reimbursement at the rate set
forth in Section 27(i) hereof for amounts owed Landlord by Tenant
shall be deemed to be additional rent due and payable by Tenant
upon receipt of an invoice for same.
30. Leasing of Additional Premises.
(a) Provided that this Lease is then in full force and
effect and that Tenant is not in default hereunder, as defined in
Section 31, Tenant shall have the following option rights
("Expansion Option"):
(i) By written notice or notices to Landlord at any
time or times during the period commencing with the date of
execution of this Lease and terminating 547 days after the
Commencement date ("Initial Option Period") Tenant shall
have the option to lease all or any portion, provided such
portion consists of a full floor ("Designated Option Space")
of the area ("Expansion Area") described on Exhibit L. The
Designated Option Space shall, when so leased, be included
in this Lease for the balance of the Term at a Base Rent
calculated at the rate of
per square foot of Rentable Area, and otherwise
subject to the terms, conditions and provisions of this
Lease. The Rentable Area of the Premises as defined in
Section 2(a)(ix) shall be increased by the portion so
leased, and Tenant's Proportionate Share, as defined in
Section 2(a)(x) shall be increased accordingly. Tenant shall
exercise its option during the Initial Option Period so that
the floors are contiguous to one another and contiguous to
the combined Premises hereunder and under the ATT-IS Lease.
As the Designated Option Space is added to the Lease,
Tenant's exclusive use of the portion of the bank of
elevators serving its space (both passenger and freight)
shall be expanded accordingly.
(ii) During the period commencing with the termination
of the Initial Option Period and ending upon the earlier of
(1) three years from the Commencement Date or (2) the date
on which Breakeven Leasing (as defined in Section 12(d))
occurs ("Second Option Period"), Tenant shall have a right
of first offer to lease all or any portion of that portion
of the Expansion Area not leased by Tenant during the
Initial Option Period. In the event that Landlord shall, at
any time during this Second Option Period, desire to lease
all or any portion of the Expansion Area (including all or
any portion of a floor) to another proposed tenant, and
shall have received a serious inquiry to lease all or a
portion of the Expansion Space from such proposed tenant,
Landlord shall so notify Tenant in writing specifying the
name of the proposed Tenant and a description of the space
proposed to be leased.
Page 56 of 74 Pages
(iii) During the period commencing with the termination
of the Second Option Period and terminating on the fifth
anniversary of the Commencement Date of the Lease ("Third
Option Period"), Tenant shall have a right of first offer to
lease all or any portion of that portion of the Expansion
Area not leased by Tenant during the Initial Option Period
and the Second Option Period. In the event that Landlord
shall, at any time during this Third Option Period, desire
to lease all or any portion of the Expansion Area (including
all or any portion of a floor) to another proposed tenant,
and shall be conducting serious negotiations with such
tenant to lease all or a portion of the Expansion Area to
such proposed tenant, Landlord shall so notify Tenant in
writing, specifying the name of the proposed tenant and a
description of the space proposed to be leased.
(b) Tenant shall, within fifteen (15) days after the
receipt by it of a notice pursuant to Subsection (ii) or (iii)
above, notify Landlord as to whether or not it desires to
exercise its option to acquire the space described in such notice
("Offer Option Space"). In the event Tenant either notifies
Landlord that it elects not to acquire the Offer Option Space, or
fails to notify Landlord at all within such fifteen (15) day
period, Landlord shall have the right, during the one hundred
twenty (120) day period commencing with the date Landlord's
notice was received by Tenant, to lease the Offer Option Space to
such proposed tenant. If the Offer Option Space is not leased to
such Tenant as aforesaid within such period, Tenant's option with
respect thereto shall automatically be fully reinstated.
(c) The Offer Option Space shall, when so leased, be
included in this Lease for the balance of the Term at a Base Rent
calculated at the rental rate per square foot required to be
received on all remaining unrented Rentable Area at 95% occupancy
in the Building, after taking into account the Rent received
under this Lease for the Premises, the Designated Option Space
pursuant to Section 30(a)(i) and previously leased Offer Option
Space pursuant to Section 30(a) (ii) or (iii), to pay all debt
service and escrow and reserve requirements on all existing
indebtedness, participating debt and any return (guaranteed or
preferred) payable on equity capital. The Offer Option Space
shall otherwise be subject to the terms, conditions and
provisions of this Lease, except as set forth in (d) below. The
Rentable Area of the Premises as defined in Section 2(a)(ix)
shall be increased by the portion so leased, and Tenant's
Proportionate Share, as defined in Section 2(a)(x) shall be
increased accordingly. To the extent a whole floor (either at one
time or in parts) is added to the Lease, Tenant's exclusive use
of the portion of the bank of elevators serving its space (both
passenger and freight) shall be expanded accordingly to the
extent feasible.
(d) In the event that Tenant exercises its option to
lease the Designated Option Space as set forth in (a)(i) above
during the Initial Option Period, Landlord and Tenant shall
Page 57 of 74 Pages
execute a Workletter in the form attached hereto and the
provisions thereof shall be applicable to the Designated Option
Space, provided, however, that (i) Landlord and Tenant shall
agree on a schedule to be substituted for the "Schedule" attached
to and defined in the Workletter and (ii) the Workletter shall
exclude provisions relating to Shell and Core Work (as defined in
the Workletter) other than provisions relating to the tenant
standard work package; provided, however, that the Commencement
Date of this Lease with respect to the Designated Option Space
shall be the earlier of substantial completion of the tenant
improvements or the first day immediately following the
expiration of the Initial Option Period (the "Designated Option
Space Commencement Date"). In the event that completion of the
tenant work shall occur prior to the termination of the Initial
Option Period, Base Rent for the Designated Option Space with
respect to which the option has been exercised shall not commence
until the first day following the expiration of the Initial
Option Period. Failure to complete the tenant improvements for
the Designated Option Space by the Designated Option Space
Commencement Date shall not affect Landlord's obligation to
compLete such work pursuant to the Workletter or Tenant's
obligation to lease the Designated Option Space upon exercise of
the option set forth in (a)(i) above.
Landlord hereby covenants that all Shell and Core work,
as defined in the Workletter, in the Expansion Area shall be
substantially completed prior to the Commencement Date of the
Lease. On exercise of the Expansion Area option during the
Initial Option Period, Landlord and Tenant shall execute a
workletter in the form attached (with the Expansion Space
Schedule attached thereto) and Landlord shall cooperate with
Tenant to complete tenant improvements expeditiously. Failure on
Landlord's part to comply with the terms of this paragraph shall
delay the commencement of Base Rent for the Designated Option
Space for the period of delay in completion caused by Landlord.
In the event that Tenant exercises its option to lease the Offer
Option Space during the Second Option Period or the Third Option
Period, the provisions of this Subsection (d) shall apply except
that (1) the Commencement Date of this Lease with respect to such
Designated Option Space shall be the earlier of substantial
completion of the tenant improvements or one hundred twenty (120)
days following notice of exercise of the option pursuant to
Sub-section 30(a)(ii) or (iii) above, and (2) Landlord's Contri-
bution as defined in the Workletter shall be reduced to per
rentable square foot.
(e) Tenant acknowledges that, depending on the number
of floors Tenant adds to the Premises at any one time, elevator
service to the Premises may be below that normally offered in
first-class office buildings. Landlord agrees, at Tenant's
request to promptly ascertain and advise Tenant of the effect on
elevator service of any proposed exercise of any option pursuant
to the terms of this Section 30.
Page 58 of 74 Pages
(f) Landlord and Tenant acknowledge that a letter
agreement dated concurrently with this Lease ("Letter Agreement")
a copy of which has been attached as Exhibit M, has been entered
into by and among Tenant, ATT-IS and Landlord in which Tenant and
ATT-IS have agreed to designate certain representatives to deal
with Landlord with respect to, among other things, the exercise
of the options set forth in Sections 30, 33 and 34. Said letter
shall be binding on Landlord and Tenant and, in the event of a
conflict between said letter agreement and the provisions of this
Lease, said letter agreement shall control.
31. Option to Extend. Provided that this Lease is then
in full force and effect and that Tenant is not in default under
this Lease, both on the date of exercise of the option and the
date of commencement of an Option Term, Landlord hereby grants to
Tenant the option ("Extension Option") to extend the Term of this
Lease on the same terms, conditions and provisions as contained
in this Lease, except as otherwise provided herein, for four
consecutive periods of five years each after the expiration of
the Term (individually an "Option Term" and collectively the
"Option Terms"). For purposes of Section 30, this Section 31, and
Sections 33 and 34 "default" shall mean either (a) a material
default which at the time of exercise is not cured, in which
event Tenant's option rights shall be tolled during the cure
period but not terminated or (b) a Default. Each option to extend
shall be exercisable by written notice from Tenant to Landlord
given no later than twelve (12) months prior to the expiration of
the Term or the expiration of the prior Option Term ("Final
Exercise Date"), time being of the essence. If not so exercised,
Tenant's further options, under this Section 31 shall thereupon
expire. Within the eight (8) month period prior to the Final
Exercise Date ("Calculation Date"), Tenant shall give Landlord
written notice of Tenant's opinion of what the base rent for the
Opt on Term ("Option Term Base Rent") should be. Within twenty
(20) days of its receipt of Tenant's notice, Landlord shall
provide Tenant with written notice of whether Landlord agrees
with Tenant's opinion of the Option Term Base Rent or, if not,
Landlord's opinion of Option Term Base Rent. Both Landlord and
Tenant's opinions on Option Term Base Rent shall be based on a
calculation of ninety percent (90%) of the "net effective market
rent" prevailing at the time the renewal terms would commence for
tenants renting space of a comparable size to the Premises or, if
both Tenant and ATT-IS (pursuant to the ATT-IS Lease), exercise
rights to extend, of comparable size to the combined Tenant and
ATT-IS Premises. "Net effective market rent" shall take into
account various tenant concessions applicable at the time, such
as rent abatement and improvement allowances, in excess of
building standard allowances or workletter being offered to new
tenants but excluding equity participation. If Landlord and
Tenant cannot agree on the Option Term Base Rent, then Tenant may
inform Landlord that it elects to proceed with the appraisal
procedure set forth below. There shall be no limit on the number
of written notices Tenant or Landlord may deliver to the other in
their efforts to agree upon the Option Term Base Rent, except
that Tenant must inform Landlord by written notice on or before
Page 59 of 74 Pages
one hundred twenty (120) days after Tenant's first notice to
Landlord hereunder, whether Tenant elects to proceed with the
appraisal procedure. In the event that Tenant fails to respond or
so inform Landlord, Tenant shall be deemed to have abandoned the
request for determination of Option Term Base Rent.
In the event Tenant and Landlord cannot agree on Option
Period Base Rent, and Tenant has provided written notice to
Landlord of Tenant's desire to have such rent determined through
an appraisal procedure then, Landlord and Tenant shall each pick
a real estate broker within ten (10) days of Tenant's notice.
Such broker shall have at least ten (10) years of brokerage
experience, have a broad knowledge of the office leasing market
in downtown Chicago and have a good reputation in the Chicago
real estate community. In the event the two brokers cannot reach
agreement on Option Term Base Rent, taking into account the
parameters set forth in the preceding paragraph within thirty
(30) days after the matter has been submitted to them, then they
shall appoint a third broker who meets the aforesaid standards,
within ten (10) days after the expiration of the thirty (30) day
period. The decision of the brokers shall be rendered within
twenty (20) days after appointment of the third broker, and such
decisions shall be in writing and in duplicate and one
counterpart thereof shall be delivered by them to Landlord and
one to Tenant. The decision of a majority of the brokers shall be
binding, final and conclusive on all the parties in the event
Tenant exercises its option to extend the Term of this Lease
prior to the Final Exercise Date. Landlord and Tenant shall split
equally the fees of the third broker unless Tenant, after
determination of the Option Term Base Rent, elects not to
exercise the option to extend, in which event Tenant shall pay
the fees. Any failure of Landlord to comply with the appraisal
procedure shall delay by an equal number of days, the Final
Exercise Date.
In the event Tenant exercises its Extension Option for
the first Option Term, Landlord agrees, prior to the commencement
of such Option Term, to repaint and recarpet the Premises at
Landlord's expense. The paint and carpet shall be of a similar
quality to that specified on Attachment B to the Workletter.
Landlord shall offer Tenant a reasonable choice of color.
Upon the valid exercise by Tenant of each such option
to extend, at the request of either party hereto and within
thirty (30) days after such request, Landlord and Tenant shall
enter into a written supplement to this Lease incorporating the
terms, conditions and provisions applicable to the Option Term as
determined in accordance herewith.
32. Tenant Release Rights. Provided that this Lease is
then in full force and effect and that Tenant is not in default
hereunder, as defined in Section 31, Tenant may exercise the
following rights to terminate the Lease insofar as the Lease
relates to the space to be released to Landlord as described
herein:
Page 60 of 74 Pages
(i) By notice to Landlord given not later than one (1)
year prior to the tenth anniversary of the Commencement
Date, Tenant shall have the option to terminate the Lease
("Release Option A") as to one full floor designated by
Tenant ("Release Area A") effective as of the tenth
anniversary of the Commencement Date.
(ii) By notice to Landlord given not later than one (1)
year prior to the fifteenth anniversary of the Commencement
Date, Tenant shall have the option to (a) exercise Release
Option A, if not previously exercised, and/or (b) terminate
the Lease ("Release Option B") as to one full floor
designated by Tenant effective ("Release Area B") as of the
fifteenth anniversary of the Commencement Date.
Release Area A and Release Area B shall be contiguous
and shall commence at the highest floor in the combined Premises
occupied by Tenant hereunder and the tenant under the ATT-IS
Lease. Possession of Release Area A and/or B shall be delivered
to the Landlord on the effective date of such termination in the
manner provided in Section 7 hereof. Landlord and Tenant shall
execute an amendment to this Lease, setting forth the reduced
number of square feet of Rentable Area in the Premises and
setting forth the reduced Tenant's Proportionate Share. In the
event Tenant shall fail to notify Landlord of its election to
exercise the rights in (i) and (ii) above, Tenant shall be deemed
to have waived said rights.
Tenant acknowledges that, depending on the number of
floors Tenant releases to Landlord, Landlord shall have the right
to allocate elevators then currently serving the remaining
Premises to serve Release Area A and/or Release Area B and that
elevator service to the Premises after the release may be below
that normally offered in first-class office buildings. Landlord
agrees, at Tenant's request to promptly ascertain and notify
Tenant of the effect on elevator service of any proposed release
of space pursuant to the terms of this Section 32.
33. Relocation Rights. With respect to all space other
than the Premises ("Relocation Space") located on Tenant's
elevator bank (floors 3 through 28), Landlord hereby agrees that,
provided this Lease is then in full force and effect and that
Tenant is not in default, as defined in Section 31 hereof, on
twelve (12) months written notice from Tenant, Landlord will
relocate any tenant in the Relocation Space to comparable space
in the Building, provided such comparable space is available and
such vacated space shall be added to this Lease on the same terms
and conditions (including Base Rent) as such tenant had leased
the space until expiration of such lease and after expiration of
same, for the balance of the Term, on the same terms and
conditions contained herein except that Base Rent for such space
shall be ninety percent 90% of Landlord's quoted rate for
comparable space in the Building. Landlord agrees to use its best
efforts to cooperate with Tenant in connection with the terms of
this Section 33. Tenant agrees to pay the costs and expenses as
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set forth in the Relocation Clause (as hereinafter defined) in
connection with such relocation, including any rent differential
for the term of such lease and any renewal options. In the event
of any dispute regarding such costs and expenses, Tenant shall
resolve the dispute with the tenant .o be relocated. Landlord
shall include a provision in each lease of the Relocation Space
permitting such relocation ("Relocation Clause"). The Relocation
Clause shall be in the form attached hereto as Exhibit N. In the
event the tenant refuses to relocate, in violation of the terms
of the lease, Landlord, on Tenant's behalf, and at Tenant's ex-
pense, agrees to enforce the Relocation Clause of such lease. In
no event shall Landlord be liable for such tenant's failure to
perform in accordance with the provisions of such lease. Landlord
hereby agrees to include in each lease of the Relocation Space a
clause obligating the tenant under such lease to pay Landlord's
attorney's fees in the event of a dispute thereunder.
34. Right of First Offer. Provided this Lease is then
in full force and effect and that Tenant is not in default, as
defined in Section 31 hereof, during the Term of this Lease,
Landlord hereby grants to Tenant the rights herein contained with
respect to all office space in the Building (other than Tenant's
Premises) and all basement storage space (the "Option Space").
With respect to the Expansion Area, the terms of Section 30 shall
govern for the period of time prior to the fifth anniversary of
the Commencement Date of the Lease. Subsequent to such date the
terms of this Section 34 shall govern, and the Expansion Area, to
the extent not previously included in the Premises, shall be
deemed to be Option Space. If during the Option Period, Landlord
desires to lease any portion of the Option Space constituting a
full floor or more or as to basement storage space, or the
Expansion Area, a partial floor or full floor, ("Designated
Option Space") it shall notify Tenant in writing of the basic
"Business Terms and Conditions" (as hereinafter defined) upon
which it is prepared to lease the Designated Option Space and
Tenant shall have the right for a period of fifteen (15) days
from and after the giving of such notice within which to notify
Landlord that it will lease the Designated Option Space upon
substantially the same Business Terms and Conditions contained in
the Landlord's Notice, in which event Landlord and Tenant shall
proceed to negotiate in good faith to finalize such lease.
Business Terms and Conditions as to office space shall include
Base Rent, CPI Adjustment, if any, Operating Expense Adjustment,
tenant improvement work to be done to the Designated Option
Space, free rent, if any, extension options and any other
financial terms. Business Terms and Conditions as to basement
storage space shall include only a base rent charge. If Tenant
elects to rent the Designated Option Space, then the Designated
Option Space shall be added to the Lease for the term set forth
in Landlord's notice as aforesaid and shall otherwise be governed
by the terms and conditions of the Lease. If Tenant fails to
notify Landlord in writing that it will accept the Designated
Option Space within the prescribed fifteen (15) day period or
fails to promptly execute a lease or an amendment to this Lease
upon substantially such terms, Landlord may lease the Designated
Page 62 of 74 Pages
Option Space to another tenant and upon execution of such a
lease, Tenant's rights under this paragraph shall be terminated
as to such Option Space, but shall be reinstated on the
termination of such lease as it may be extended by Landlord and
such tenant. If Tenant shall notify the Landlord that it elects
to lease the Designated Option Space within said fifteen (15) day
period, Tenant shall execute a lease, or amendment to this Lease,
on substantially the same Business Terms and Conditions set forth
in Landlord's notice.
Landlord hereby agrees to advise Tenant in writing six
months in advance of the availability of space in the Building
and, in any event, prior to Landlord's marketing of such space.
Notwithstanding the Right of First Offer granted herein, in no
event shall the combined Premises of Tenant and the Tenant under
the ATT-IS Lease exceed 930,000 rentable square feet (excluding
basement storage area) in the Building.
35. Bankruptcy or Insolvency.
(a) Termination of Lease.
(i) Neither Tenant's interest in the Lease nor any
estate hereby created in Tenant shall pass to any trustee, except
as may specifically be provided pursuant to the provisions of the
Bankruptcy Code, 11 U.S.C. 101 et seq. (the "Bankruptcy Code"),
or receiver or assignee for the benefit of creditors or otherwise
by operation of law.
(ii) In the event Tenant's executors, administrators,
or assigns, if any, shall be adjudicated insolvent pursuant to
the provisions of any state law, or if Tenant is adjudicated
insolvent by a Court of competent jurisdiction other than the
United States Bankruptcy Court, or if a receiver or trustee of
the property of Tenant shall be appointed by reason of the
insolvency or inability to pay its debts, other than an
appointment pursuant to the provisions of the Bankruptcy Code, or
if any assignment shall be made of the property of Tenant for the
benefit of creditors, excepting an assignment by a trustee
pursuant to the provisions of the Bankruptcy Code, then and in
any such event, subject to the rights of the Leasehold Mortgagee
provided herein, .his Lease and all rights of Tenant hereunder
shall automatically cease and terminate with the same force and
effect as though the date of such event were the date originally
set forth herein and fixed for expiration of the Term of this
Lease, and Tenant shall vacate and surrender the Property.
Tenant shall not suffer or permit the appointment of a
trustee or receiver of the assets of Tenant by reason of the
insolvency or inability of Tenant to pay its debts and shall not
make any assignment for the benefit of creditors, or become or be
adjudicated insolvent. The allowance of any petition under any
insolvency law, except under the Bankruptcy Code, or the
appointment of a trustee or receiver of Tenant shall be
conclusive evidence that Tenant caused or gave cause therefor,
Page 63 of 74 Pages
unless such allowance of the petition, or the appointment of a
trustee or receiver, is vacated within ninety (90) days after
such allowance or appointment. Landlord does, in addition,
reserve any and all other remedies provided in this Lease or in
law.
(b) Protection by Tenant. Upon the filing of a
petition by or against Tenant under the Bankruptcy Code, Tenant,
as debtor and as debtor in possession, and any trustee who may be
appointed agree to adequately protect Landlord as follows:
(1) perform each and every obligation of Tenant under this Lease,
including the payment of Rent hereunder, arising from and after
the order for relief within sixty (60) days after the date of
such order, until such time as this Lease is either rejected or
assumed by order of the United States Bankruptcy Court; and
(2) to give Landlord prior written notice of any proceeding
relating to any assumption of this Lease; and (3) to give
Landlord written notice of the intention of Tenant and the
trustee to reject this Lease; and (4) to provide Landlord with
adequate assurance of future performance under the Lease as that
term is used in 11 U.S.C. 361.
(c) Waivers by Landlord. No default of this Lease by
Tenant, either prior to or subsequent to the filing of a petition
under the Bankruptcy Code, shall be deemed to have been waived
unless expressly done so in writing by Landlord.
(d) Assumption of Lease. If Tenant or a trustee elects
to assume this Lease subsequent to the filing of a petition under
the Bankruptcy Code, Tenant, as debtor and as debtor in
possession, and any trustee who may be appointed agree as
follows: (1) to cure each and every existing default within not
more than ninety (90) days after assumption of this Lease; and
(2) to compensate Landlord, or provide adequate assurance that
Tenant or the trustee will compensate Landlord, for any actual
pecuniary loss resulting from any existing default, including,
without limitation, Landlord's reasonable costs, expenses and
attorneys' fees incurred as a result of the default, as
determined by the Bankruptcy Court, within ninety (90) days of
assumption of this Lease; and (3) in the event of an existing
default, to provide Landlord with adequate assurance of Tenant's
future performance under the Lease as determined by the
Bankruptcy Court; and (4) the assumption will be subject to all
of the provisions of this Lease unless the prior written consent
of Landlord is obtained. If Tenant, as debtor-in-possession, or
such Trustee shall fail to elect this Lease within sixty (60)
days after the filing of the petition by or against Tenant,
unless such time period is extended by the Bankruptcy Court, this
Lease shall be deemed to have been rejected and unless Landlord
received adequate assurance for continued possession after
rejection of the Lease, Landlord shall be thereupon immediately
entitled to possession of the Premises without further obligation
to the Tenant or said Trustee, and this Lease shall be cancelled,
but Landlord's right to be compensated for damages in any such
bankruptcy proceeding shall survive.
Page 64 of 74 Pages
(e) Assignment of Lease and Adequate Assurances to
Landlord. If Tenant assumes this Lease and proposes to assign the
same pursuant to the provisions of the Bankruptcy Code to any
person or entity who shall have made a bona fide offer to accept
an assignment of this Lease on terms acceptable to the Tenant,
any person or entity to which this Lease is assigned pursuant to
the provisions of the Bankruptcy Code shall be deemed without
further act or deed to have assumed all of the obligations
arising under this Lease on and after the date of such
assignment. Any such assignee shall upon demand execute and
deliver to Landlord an instrument confirming such assumption.
The adequate assurance to be provided Landlord to
assure the assignee's future performance under the Lease shall be
determined by the Bankruptcy Court.
(f) Amounts Payable by Tenant Constitute Rent.
Notwithstanding anything in this Lease to the contrary, all
amounts payable by Tenant to or on behalf of Landlord under this
Lease, whether or not expressly denominated as rent, shall
constitute Rent for the purposes of Section 502(b)(6) of the
Bankruptcy Code.
(g) Application by Landlord of Payments from Tenant.
Any payment received from Tenant may be applied by Landlord
against any obligation due and owing by Tenant under this Lease,
notwithstanding any statement appearing on or referred to in any
remittance from Tenant or any prior application of such payment.
If a petition under the Bankruptcy Code is initiated within
ninety (90) days after receipt by Landlord of any such payment,
the payment shall be deemed applicable to any unpaid obligations
then due in the inverse order of their maturity.
36. Tenants. To the extent permitted by law, the
Landlord shall not engage in, nor shall Landlord lease or consent
to any sublease or assignment of a lease to any person, firm or
corporation which, as a primary part of its business as of the
date of the Lease engages in the activities set forth on Exhibit
O attached hereto and hereby made a part hereof. The Landlord
shall include the foregoing prohibition in all tenant leases
whether for office or commercial/retail space in the Building.
Landlord hereby agrees that enforcement of the foregoing
prohibition with respect to tenants or proposed tenants shall be
subject to the approval of Tenant.
The Landlord shall consult with the Tenant before
making any commitment which may in Tenant's reasonable
discretion, violate this Section or approving any assignment or
sublease which may in Tenant's reasonable discretion, violate
this Section. Tenant agrees to respond to a written submission by
Landlord as to a proposed activity within ten (10) days of such
submission. Tenant shall indicate in writing within the
aforementioned ten (10) day period whether or not Tenant believes
the proposed activity violates this Section of the Lease and
assuming a violation, whether Tenant is willing to waive the
Page 65 of 74 Pages
provisions of this Section as to such activity. Failure to
respond to such a submission shall be deemed to be approval of
such activity. In the event Tenant states that the proposed use
or activity violates this Section and Landlord disputes Tenant's
decision, the dispute shall be resolved by arbitration pursuant
to Section 48 hereof.
37. Abatement of Lease Payments. In consideration of
Tenant's execution of this Lease, Landlord hereby agrees that
Base Rent, commencing with the Commencement Date of the Lease as
it may be extended shall abate to the full extent of
("Lease Payment"), plus interest at
the rate set forth below, provided that during such abatement
period, Tenant shall remain obligated to make all payments of
Additional Rent or other sums which may be due to Landlord
hereunder. Base Rent shall abate to the extent of such interest.
Interest shall accrue from February 1, 1989 to the date each
portion of the Lease Payment is applied against Base Rent at the
rate for the construction loan on the Building, or, if the final
payment on the construction loan has been made, then at the rate
for the permanent first mortgage on the Building.
38. Building Name and Signage. The Landlord and Tenant
agree that the Building shall be named the AT&T Corporate Center
or such other name as may be agreed upon by Landlord and Tenant.
Tenant shall also have the right to cause appropriate
identification and/or logos to be placed on the exterior of the
Building. Such signage and the location thereof shall be tasteful
and consistent with a first class office building and shall be
sensitive to the architectural design of the Building. Tenant
shall review such signage with Landlord, but Landlord shall not
have a right of approval with respect to same. Such review by
Landlord shall be conducted at Landlord's expense. No other
signage, writing or pictures of any kind shall be placed on the
exterior of the Building by Landlord (except as set forth herein)
without the approval of Tenant nor by Tenant, without the
approval of Landlord. With respect to signage for commercial
tenants, Landlord will establish signage criteria ("Signage
Criteria") which reflects a) the first-class nature of the
Building and b) the quality appropriate for AT&T corporate
headquarters. Such Signage Criteria shall be subject to Tenant's
approval, which approval shall not be unreasonably withheld.
Provided signage for commercial tenants meets the approved
Signage Criteria, Landlord need not obtain Tenant's approval as
to each sign. Landlord may place signage on the Building
identifying the ownership and management of the Building. The
design and location of such sign shall be subject to the
reasonable approval of Tenant.
39. Roof Rights. Landlord hereby agrees that the
Premises shall include approximately four hundred square feet of
contiguous flat space on the roof described on Exhibit P ("Tenant
Roof Space"). No Rent shall be paid for the Tenant Roof Space,
nor shall Tenant's Proportionate Share be increased to reflect
Page 66 of 74 Pages
the Tenant Roof Space. Installation and maintenance of
telecommunications equipment on the Tenant's Roof Space shall be
at Tenant's expense. Landlord shall be responsible for
maintenance and repair of the entire roof of the Building with
the exception of repairs (i) necessitated by installation,
maintenance or repair of the telecommunications equipment, or
(ii) due to Tenant's negligence, intentional acts or omissions.
Tenant shall be responsible for repairs necessitated by (i) or
(ii) above. Tenant agrees that either (1) it will contract with
Landlord for the installation of the telecommunication equipment
at a cost to be negotiated at such time, or (2) will contract
with a third party for such installation work, in which event
Tenant will either (a) obtain a new warranty for the roof in the
event the existing warranty is abrogated due to the installation
work, or (b) take whatever steps are necessary to maintain the
existing warranty on the roof. Tenant further agrees to reimburse
Landlord for any reasonable insurance premiums incurred by
Landlord, which are directly due to Tenant's installation and/or
maintenance of the telecommunications equipment on the roof.
Landlord agrees, to the extent feasible, to allow Tenant at
Tenant's expense to connect the telecommunications equipment to
the Premises through the vertical risers in the Building pursuant
to plans approved by Landlord, which approval shall not be
unreasonably withheld. In no event shall Landlord's installations
on the roof block the line of sight to 10 South Canal Street.
Tenant hereby agrees that it shall not have the right to assign
or sublease the use of the Tenant Roof Space separately from a
sublease or assignment of a portion of the Premises, it being the
parties' intention to prohibit Tenant from using the Tenant Roof
Space as an independent profit-making operation separate and
apart from Tenant's use of the Premises or for other than
telecommunication purposes. Tenant shall not sublet or assign an
immaterial portion of the Premises with the intent or purpose of
primarily affording the sublessee or assignee the right to use
the Tenant Roof Space. Any consideration received by Tenant from
any assignee or sublessee from the use of the Tenant Roof Space
shall be included in the calculations of Landlord's Net Profits
pursuant to Section 12(f) hereof.
40. Attorneys' Fees. Landlord shall pay all of
Tenant's costs, charges and expenses, including court costs and
attorneys' fees, incurred in enforcing Landlord's obligations
under this Lease or incurred by Tenant in any litigation,
negotiation or transactions in which Landlord causes Tenant,
without Tenant's fault, to become involved or concerned.
41. Waiver. No waiver of any condition expressed in
this Lease shall be implied by any neglect of Tenant to enforce
any remedy or account of the violation of such condition whether
or not such violation be continued or repeated subsequently.
42. Short Form of Lease. The parties shall execute a
short form of this Lease for recording purposes substantially in
the form attached hereto as Exhibit. Such short form of lease
shall be in a form mutually acceptable to Landlord and Tenant.
Page 67 of 74 Pages
43. Partnership Default. No default under, or
termination of the ATT/Stein Partnership shall constitute a
default hereunder or be a cause for termination hereof except as
set forth in Section 44.
44. Termination Rights. Tenant shall have the right to
terminate this Lease in the event AT&T Resource Management
Corporation, a general partner of the AT&T/Stein Partnership,
terminates the AT&T/Stein Partnership pursuant to the provisions
of Article VI of the AT&T/Stein Partnership Agreement. Notice of
termination of this Lease shall be given concurrently with the
notice of termination under the AT&T/Stein Partnership Agreement.
In the event of such termination, 225 West Monroe
Street Associates, an Illinois limited partnership ("Stein
General Partner") shall pay to Tenant all of Tenant's reasonable
out-of-pocket costs and expenses incurred in connection with
legal, architectural, design and engineering services with
respect to this Lease and the Premises up to the date of such
termination ("Professional Expenses"). Stein General Partner
shall make such payment within thirty (30) days after receipt of
written statement from Tenant setting forth such costs and
expenses in reasonable detail. By separate guaranty dated
___________________, Stein & Company, a Nevada corporation has
guaranteed the payment of such Professional Expenses by Stein
General Partner.
45. Mutual Indemnity and Waiver.
(a) To the extent not expressly prohibited by law,
Landlord and Tenant each (in either case, the "Indemnitor")
agrees to hold harmless and indemnify the other, its bene-
ficiaries, partners, agents and employees (the "Indemnitee") from
any claim and liabilities imposed upon or incurred by or asserted
against the Indemnitee, including reasonable attorney's fees and
expenses, for death or injury to third parties or loss of or
damage to property of third parties that may arise from or be
caused directly or indirectly by any act or omission of the
Indemnitor, its agents, contractors or employees or from any
breach or default on the part of the Indemnitor in the
performance of any covenant or agreement on the part of the
Indemnitor to be performed pursuant to the terms of this Lease.
In case any action, suit or proceeding is brought against the
Indemnitee by reason of any such act of Indemnitor, Indemnitor
will, at Indemnitor's expense, by counsel approved by Indemnitee
(which approval shall not be unreasonably withheld), resist and
defend such action, sui. or proceeding. In case Landlord is
Indemnitee, Indemnitee shall also include Landlord's beneficiary
and its partners.
(b) To the extent not expressly prohibited by law and
except for claims arising from the negligent or intentional act
or omission of Landlord or its agents or employees, Tenant
releases Landlord and its beneficiaries, and their agents, and
employees, from and waives all claims for damages to person or
Page 68 of 74 Pages
property sustained by the Tenant, its guests and invitees or by
any occupant of the Premises and said occupant's guests and
invitees, or the Building, or by any other person, resulting
directly or indirectly from any act or neglect of any tenant or
other occupant of the Building or any part thereof.
To the extent not expressly prohibited by law and
accept for claims arising from the negligent or intentional act
or omission of Tenant, its agents or employees, Landlord releases
Tenant, its agents and employees, from and waives all claims for
damages to person or property sustained by the Landlord, or by
any other person, resulting directly or indirectly from any act
or neglect of any tenant or other occupant of the Building or any
part thereof.
46. "Force Majeure" is hereby defined to mean any
strike, lockout, labor trouble, civil disorder, inability to
procure materials, governmental laws and regulations, riots,
insurrections, war, fuel shortages, accidents, casualties, acts
of God, acts caused directly or indirectly by the other party lo
the Lease (or its agents, employees, contractors, licensees, or
invitees) or any other cause beyond the reasonable control of the
performing party. For purposes of calculating consequential
damages in the event of a holdover tenancy by Tenant, Tenant
shall not be subject to consequential damages in the event that
Tenant's failure to move from the Premises at the expiration of
the Term shall arise solely as a result of the failure of any
landlord under a new lease with Tenant to complete Tenant
improvements in any building to which Tenant intends to locate,
due to a Force Majeure event, provided that Tenant entered into a
new lease prior to eight (8) months before the termination of
this Lease, the scheduled delivery date under such new lease was
no later than ninety (90) days after the Term of this Lease and
the delay in completion of the tenant improvements under the new
lease was not attributable to changes and modifications requested
by Tenant.
47. Arbitration. Any dispute specifically required by
the terms of this Lease to be settled by arbitration shall be
submitted for arbitration to the Chicago, Illinois office of the
American Arbitration Association in accordance with its
Commercial Arbitration Rules then in effect, except where such
rules are contrary to the provisions set forth in this Lease. The
award rendered by the arbitrators shall be final, and judgment
may be entered upon it in accordance with applicable law in any
court having jurisdiction. The arbitrators may award any relief
which they shall deem proper in the circumstances, without regard
to the relief which would otherwise be available to any party
hereto in a court of law or equity including, without limitation,
specific performance and injunctive relief. It is understood that
the arbitration provisions of this Section 48 shall be the sole
remedy of the parties under this Agreement with respect to
disputes subject to arbitration under this Section 48.
Notwithstanding the foregoing, the parties agree that Landlord or
Tenant may apply lo a court of competent jurisdiction for
Page 69 of 74 Pages
equitable relief if such is appropriate during the pendency of
the arbitration proceeding.
Notice of the demand for arbitration shall be filed in
writing with the Landlord and Tenant. Unless otherwise agreed to
in writing by the Landlord and Tenant, upon receipt of a demand,
each party shall designate an arbitrator within ten (10) business
days. The two designated arbitrators shall then select a third
arbitrator to complete the full arbitration panel within ten (10)
business days, or as otherwise agreed. The arbitrators selected
pursuant to the terms of this Section 48 shall not be employees
of or hold any ownership interest in, the party selecting them.
Each such arbitrator shall have at least five years of experience
relevant to the general subject matter of the dispute.
If the arbitrators selected by each party fail to agree
upon a third arbitrator within the time limits set by this
Agreement, either party may request the American Arbitration
Association to select the neutral arbitrator. If either party
fails to appoint an arbitrator within the time period set forth,
the other party may apply to any court having jurisdiction over
this Agreement to compel arbitration and that court shall be
empowered to select the failing party's arbitrator.
The arbitration panel shall commence hearings within
thirty (30) days of the selection of the panel, unless Landlord
and Tenant or the arbitration panel agree upon a delayed schedule
of hearings. Any party may send out requests to compel document
production from the other party. Disputes concerning the scope of
document production and enforcement of the document requests
shall be subject to agreement by Landlord and Tenant, or may be
ordered by the arbitrators to the extent reasonable. The
arbitrators may obtain independent legal counsel to aid in their
resolution of legal questions presented in the course of
arbitration to the extent they consider that such counsel is
absolutely necessary to the fair resolution of the dispute, and
lo the extent that it is economical to do so considering
financial consequences of the dispute.
If any party subject to the terms of this arbitration
provision fails or refuses to appear at and participate in an
arbitration hearing after due notice, the arbitration panel may
hear and determine the controversy upon evidence produced by the
appearing party.
The arbitration costs (including filing fees, court
reporters' fees and transcript costs) shall be borne equally by
each party, except that each party shall be responsible for its
own expenses and the costs of the arbitrator selected by it.
48. Investment Tax Credit. It is hereby agreed between
the parties that Tenant will be entitled to the benefits of any
Investment Tax Credit with respect to all items of Section 38
Property, as defined in Section 48(a) of the Internal Revenue
Code of 1954 in effect on the date hereof (the "Code") and as
Page 70 of 74 Pages
determined by Tenant, purchased as part of the Landlord's
Contribution. Landlord agrees not to take any action to claim
such Investment Tax Credit itself and agrees to execute and
deliver such documents as Tenant may reasonably request to permit
Tenant to avail itself of such credit; Provided, however, that
Landlord makes no representation or warranty as to the
availability of any such Investment Tax Credit. Landlord
represents and warrants that (a) it, and each person having a
beneficial interest in it, currently is not, and during the term
of the Lease will not become, a person described in Section
46(e)(1) of the Code; (b) it will execute and deliver to Tenant
within 60 days of the date it transfers possession to Tenant of
any item of Section 38 Property purchased as part of the
Landlord's Contribution an Election to Treat Lessee as Purchaser,
in the form attached hereto as Exhibit Q, describing such
property, and (c) lt will comply with the provisions of Treasury
Regulations Section 1.48-4(j) as in effect on the date hereof
with respect to items of Section 38 property purchased as part of
the Landlord's Contribution. Landlord agrees to assume liability
for and to indemnify Tenant, on an after-tax basis, against any
and all losses or deferrals of any federal income tax credit with
respect to items of Section 38 Property purchased as part of the
Landlord's Contribution otherwise available to Tenant with
respect to any taxable year ending prior to the termination of
the Lease (and any interest, additions to tax or penalties
associated with such taxes payable by the Tenant), and other
expenses of any nature and kind, including reasonable counsel
fees, which Tenant may become liable to pay in connection with
any such loss or deferral or alleged loss or deferral which
occurs or is alleged to occur by reason of any (a) transfer by
Landlord of its interest in this Lease or any part of the
Landlord's Contribution prior to the occurrence of an Event of
Default hereunder to a person who may not, under Treasury
Regulation Section 1.48-4, make a valid election to treat the
Tenant as having purchased property for purposes of the credit
allowed under Section 38 of the Code, or (b) any breach by
Landlord of its representations or warranties set forth herein.
49. Use of Name. Landlord agrees that it will not
utilize the name of AT&T or of American Telephone and Telegraph
Company, a New York corporation ("AT&T Parent"), or of an
affiliate of AT&T or AT&T Parent in any advertising, publicity,
promotion, writing, radio or television broadcast, or in any
other way, concerning the Building or this Lease, except for use
in the name of the Building if called the AT&T Corporate Center
or other similar name, without the prior written consent of
Tenant.
50. Exculpatory Provisions. This instrument is
executed by American National Bank and Trust Company of Chicago,
not personally but solely as Trustee, as aforesaid. All the
covenants and conditions to be performed hereunder by American
National Bank and Trust Company of Chicago are undertaken by it
solely as Trustee, as aforesaid and not individually, and no
personal liability shall be asserted or be enforceable against
Page 71 of 74 Pages
American National Bank and Trust Company of Chicago by reason of
any of the covenants, statements, representations or warranties
contained in this Lease.
Page 72 of 74 Pages
IN WITNESS WHEREOF, the parties have caused this lease
to be executed on the date first above written.
LANDLORD:
AMERICAN NATIONAL BANK AND
TRUST COMPANY OF CHICAGO,
not personally but as
Trustee aforesaid,
By:
ATTEST:
By:
Its:
TENANT:
AT&T RESOURCE MANAGEMENT
CORPORATION, a New York
corporation
By:
Its:
ATTEST:
By:
Its:
Page 73 of 74 Pages
225 West Monroe Street Associates ("Stein General
Partner") executes this Lease solely for the purposes of agreeing
to make the payment set forth in Section 44 of the Lease. The
liability of Stein General Partner hereunder shall be limited to
the assets of Stein General Partner and in no event shall any
partner of Stein General Partner be personally or individually
liable hereunder except to the extent of, and limited to, such
partner's interest as a partner in the assets and property of
Stein General Partner. A deficit capital account of any partner
of Stein General Partner shall not be deemed to be an asset or
property of Stein General Partner.
225 WEST MONROE STREET
ASSOCIATES, an Illinois
limited partnership
By: Stein & Company 225 West
Monroe, Inc., an Illinois
corporation
By:
ATTEST:
By:
Page 74 of 74 Pages
EXHIBIT H
VIDEOS
That certain AT&T Floor Space Configuations
VHS T-120 Video dated June, 1993.
The video is a ten (10) minute VHS video filmed
June 15, 1993 on Floors 6 through 12 at AT&T Corporate Center,
227 West Monroe, Chicago, County of Cook, Illinois 60606. The
VHS video shows samples of the furniture (and their "as-is"
condition) described in Exhibit E.
-128-
EXHIBIT I
LOBBY WORK
A. Ground Floor
- Monument sign at the base of the east escalator will
read:
Floors 2-22 or Floors 2-23*
AT&T
Gallery Cafe
* Exact floor to be determined by Landlord
B. Mezzanine Level
- The two (2) AT&T security desks and incorporated logo)
will be removed
- Landlord may, at its option, display its or its
affiliates company name or logo only in the midrise
elevator bank (floors 16 and higher)
- Signage above the mid-rise elevator bank will read 17-
22 or 17-23*
* Exact floor to be determined by Landlord
-129-
EXHIBIT J
OPTION NOTICE
CHICAGO AND NORTH WESTERN TRANSPORTATION COMPANY ("TENANT")
227 WEST MONROE STREET
CHICAGO, ILLINOIS
AT&T Communications, Inc. ("Landlord")
c/o AT&T Resource Management Corporation
222 Mt. Airy Road
Basking Ridge, New Jersey 07920
Attention: District Manager, Real Estate Joint Ventures
and
Attention: Senior Attorney
and
Stein & Company Asset Services, Inc.
Suite 3400
227 West Monroe Street
Chicago, Illinois 60606
Attention: Vice President/Asset Management
and
American National Bank and
Trust Company of Chicago ("American National")
not personally but solely as Trustee under
Trust Agreement dated April 1, 1985, and
known as Trust 64020 ("Main Landlord")
33 North LaSalle Street
Chicago, Illinois 60603
Attention: Land Trust Department
Re: Notice of Extension Option and Direct Lease Option
Dear Ladies and Gentlemen:
In accordance with Section 42 of the Office Sublease
between Landlord and Tenant dated as of October 25, 1993
("Lease"), and subsection 2.3 of the Direct Lease Option,
Attornment, Recognition and Consent Agreement among Landlord,
Tenant, Main Landlord, The Travelers Insurance Company, American
National, not personally but as Trustee under Trust Agreement
dated April 1, 1985, and known as Trust No. 64020, dated as of
October 25, 1993 ("Option Agreement"), Tenant hereby notifies you
-130-
that Tenant desires to exercise its irrevocable Extension Option
with respect to the Lease and revocable Direct Lease Option under
the Option Agreement.
Sincerely,
CHICAGO AND NORTH WESTERN
TRANSPORTATION COMPANY, a Delaware
corporation
BY: /s/ Robert Schmiege
Its: President
-131-
Dates Referenced Herein
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