EXHIBIT 10.21
Confidential Materials omitted and filed with the Securities and Exchange
Commission. Asterisks denote omissions.
LEASE
by and between
3COM CORPORATION
as lessor
and
MANUFACTURERS' SERVICES SALT LAKE CITY OPERATIONS, INC.
as lessee
STANDARD INDUSTRIAL LEASE
1. PARTIES. This Lease, dated for reference purposes only as
of September 26, 2000, is made by and between 3Com Corporation, a Delaware
corporation ("Lessor"), and Manufacturers' Services Salt Lake City
Operations, Inc., a Delaware corporation ("Lessee").
2. PREMISES AND PARKING.
2.1 PREMISES. Lessor hereby leases to Lessee, and Lessee
leases from Lessor, for the term, at the rental, and upon all of the conditions
set forth herein, (a) those certain premises shown on EXHIBIT A hereto (the
"Premises") located at 0000 Xxxx Xxxxxxx Xxxx, Xxxxx Xxxxxxxx, Xxxxxxxx (the
"Building") and (b) the nonexclusive right to use the Common Areas (as
hereinafter specified). The Building and the Common Areas are part of that
certain building project (the "Project"), as depicted on EXHIBIT B attached
hereto. Lessor and Lessee agree that for purposes of this Lease, the Premises
consist of 404,294 rentable square feet, including 87,071 rentable square feet
of office area, 144,058 rentable square feet of manufacturing area and 173,165
rentable square feet of warehouse area, and the Premises shall not be
remeasured. The Premises do not include any rights to the airspace above the
Premises.
2.2 VEHICLE PARKING. Lessee shall have the exclusive
right to use the existing vehicle parking spaces in the parking area shown on
EXHIBIT B hereto, which parking area contains approximately 1,168 parking spaces
("Lessee's Designated Parking Area"). Lessor shall use commercially reasonable
efforts to prevent its employees and visitors from parking in Lessee's
Designated Parking Area, including instituting appropriate management control
procedures (at Lessor's sole expense, and not as part of Operating Expenses),
and Lessee shall use commercially reasonable efforts to prevent its employees
and visitors from parking in other portions of the parking lot on the Project,
including instituting appropriate management control procedures. All parking
spaces shall be used only for vehicles no larger than full size passenger
automobiles, sport utility vehicles or pick-up trucks.
2.2.1 Lessee shall not permit or allow any
vehicles that belong to or are controlled by Lessee or Lessee's employees,
suppliers, shippers, customers, or invitees to park in areas other than in
Lessee's Designated Parking Area or to be loaded or unloaded in areas other than
the loading areas adjacent to the loading docks in the Premises. Lessor shall
not permit or allow any vehicles that belong to or are controlled by Lessor or
Lessor's employees, suppliers, shippers, customers or invitees to be loaded,
unloaded or parked in areas that would block Lessee's access to or from the
Building, Premises or Project.
2.2.2 If Lessee permits or allows any of the
prohibited activities described in Section 2.2 of this Lease, then Lessor shall
have the right, upon reasonable notice, in addition to such other reasonable
rights and remedies that it may have, to remove or tow away the vehicle involved
and charge the cost thereof to the owner of the towed vehicle.
2.3 COMMON AREAS - DEFINITION. The term "Common Areas" is
defined as all indoor areas and facilities outside the Premises and located
within the Building as shown on EXHIBIT A hereto, Lessee's Designated Parking
Area, the loading and unloading areas adjacent to the Premises, and the
roadways, sidewalks, walkways, parkways and driveways.
2.3.1 COMMON AREAS - LESSEE'S RIGHTS. Lessor
hereby grants to Lessee, for the benefit of Lessee and its employees, suppliers,
shippers, customers and invitees, during the Term
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(defined below) of this Lease, the non-exclusive right to use, in common with
others entitled to such use, the Common Areas as they exist from time to time,
subject to any rights, powers and privileges reserved by Lessor under the terms
hereof or under the terms of any rules and regulations or restrictions governing
the use of the Common Areas established from time to time by Lessor, subject to
the provisions of Section 2.3.2; provided, however, the parties acknowledge that
Lessee shall have the exclusive right to use Lessee's Designated Parking Area.
Under no circumstances shall the right herein granted to Lessee to use the
Common Areas be deemed to include the right to store any property, temporarily
or permanently, in the Common Areas. Any such storage shall be permitted only
with the prior written consent of Lessor or Lessor's designated representative,
which consent may be revoked at any time. In the event that any unauthorized
storage shall occur, then Lessor shall have the right, without notice, in
addition to such other rights and remedies that it may have, to remove the
property and charge the reasonable cost thereof to Lessee, which cost shall be
immediately payable upon demand by Lessor. Any event to be held by Lessee in the
Common Area must receive the prior approval of Lessor's real estate and site
services department, which approval shall not be unreasonably withheld or
delayed.
2.3.2 COMMON AREAS - RULES AND REGULATIONS. Lessor
or such other person(s) as Lessor may appoint shall have the exclusive control
and management of the Common Areas and shall have the right, from time to time,
to establish, modify, amend and enforce reasonable, non-discriminatory, rules
and regulations with respect thereto. Lessee agrees to abide by and conform to
the rules and regulations attached hereto as EXHIBIT C and any additional rules
and regulations upon reasonable written notice of such rules and regulations,
and to cause its employees, suppliers, shippers, customers, and invitees to so
abide and conform. No additional rules and regulations shall materially impair
or conflict with the rights of Lessee under this Lease.
2.3.3 COMMON AREAS - CHANGES. Provided that none
of the following shall materially impair or conflict with the rights of Lessee
under the Lease, Lessor shall have the right, in Lessor's sole discretion, from
time to time, after reasonable advance notice to Lessee as to any of the
following that would interfere with Lessee's use of the Premises: (a) to make
changes to the Common Areas, including, without limitation, changes in the
location, size, shape and number of driveways, entrances, parking spaces,
parking areas, including restriping the parking area, loading and unloading
areas, ingress, egress, direction of traffic, landscaped areas and walkways,
provided such changes do not reduce the number of available parking spaces; (b)
to close temporarily any of the Common Areas for maintenance purposes so long as
reasonable access to the Premises remains available; (c) to designate other land
outside the boundaries of the Project to be a part of the Common Areas; (d) to
add additional improvements to the Common Areas; (e) to use the Common Areas
while engaged in making additional improvements, repairs or alterations to the
Project, or any portion thereof; (f) to do and perform such other acts and make
such other changes in, to or with respect to the Project, Common Areas and
Premises as Lessor may reasonably deem to be appropriate; and (g) to remove
areas from use as Common Areas.
2.4 CAFE. The parties acknowledge that the Common Areas
include the main cafeteria for the Building (the "Cafe"). Lessee's use of the
Cafe shall be on a first-come, first-served basis. Use of the Cafe shall be
subject to payment by Lessee's employees of the applicable charges for the foods
and other items purchased therein. Lessor shall operate the Cafe from 7:30 am to
1:30 pm, Monday through Friday, except for holidays observed by Lessor at the
same quality as it is currently operated. At Lessee's request, Lessor shall also
operate the Cafe from 10:30 pm to 1:30 am, Monday through Friday, and 10:30 am
to 1:30 pm and 10:30 pm to 1:30 am on Saturday and Sunday, in which case Lessor
shall be responsible for all costs related to such additional hours, including
the amount of any subsidy related thereto necessary to bring Cafe operations to
break-even cost (which subsidy is currently approximately Eight Thousand Dollars
($8,000) per month). Lessee shall pay such amount as such
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Confidential Materials omitted and filed with the Securities and Exchange
Commission. Asterisks denote omissions.
amount is incurred by Lessor within thirty (30) days of receipt of an invoice
therefor. Supporting invoices will be provided by Lessor upon request. Lessee
shall have the right at any time to discontinue the additional evening and
weekend operation of the Cafe (at which time Lessee's obligation to pay the
subsidy therefor shall terminate). Notwithstanding the foregoing, Lessee
shall be responsible to contract for the satellite cafeteria and, following
the end of the Cohabitation Period, coffee service and vending machines
within the Premises.
3. TERM. The term of this Lease shall commence on the "Closing",
as defined in the Asset Purchase Agreement dated __________, 2000 (the "Asset
Purchase Agreement") between Lessor and Lessee (the "Commencement Date") and end
at midnight on September 30, 2003 (the "Term"), unless sooner terminated
pursuant to the provisions hereof.
4. RENT.
4.1 BASE RENT. Lessee shall pay to Lessor, as rental
for the Premises, without offset or deduction (except as expressly set forth
in this Lease), notice or demand, on the first (1st) day of each month of the
Term of this Lease, monthly payments in advance for the use of the Premises
and the Common Areas ("Base Rent") of (a) starting on the Commencement Date
through September 30, 2001: ****. Base Rent due for any partial month during
the Term of this Lease shall be a pro rata portion of the Base Rent otherwise
payable for such month. Lessee shall pay the first month's full service rent
described in Section 39(ii) (or a pro rata portion thereof, if the first day
of the Term is other than on the first day of a calendar month) upon
execution of this Lease. Base Rent shall be payable in lawful money of the
United States to Lessor at the address stated herein or to such other persons
or at such other places as Lessor may designate from time to time to Lessee
in writing.
4.2 ADDITIONAL RENT. All monetary obligations of Lessee
to Lessor under the terms of this Lease other than Base Rent, including
Operating Expenses (defined below), shall be deemed to be "Additional Rent."
4.3 OPERATING EXPENSES. Lessee shall pay to Lessor during
the Term, in addition to the Base Rent, Lessee's Share (as defined below) of all
Operating Expenses, as hereinafter defined, during each calendar year of the
Term, in accordance with the following provisions:
(a) "Operating Expenses" are defined, for
purposes of this Lease, as all costs incurred by Lessor relating to the
ownership and operation of the Project, including, but not limited to, the
following: (i) the operation, repair, maintenance and replacement of the roof,
exterior of the Building, Building systems, the Common Areas, including parking
areas, loading and unloading areas, trash areas, roadways, sidewalks, walkways,
parkways, driveways, landscaped areas, striping, bumpers, irrigation systems,
Common Area lighting facilities, fences and gates, elevators, exterior signs
(other than signs solely identifying Lessor) and any tenant directories; (ii)
the cost of water, gas, electricity and other utilities to serve the Building
and the Common Areas; (iii) Common Area trash disposal, snow removal and
security services, and property management; (iv) Real Property Taxes; (v) the
costs of the premiums for the insurance policies maintained by Lessor hereunder;
(vi) any deductible portion (not to exceed $250,000) of a casualty concerning
the Building or the Common Area; and (vii) any other services to be provided by
Lessor in this Lease.
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(b) Any Operating Expenses that are specifically
attributable to the Building or to any other building in the Project or to the
operation, repair, maintenance or replacement thereof, shall be equitably
allocated entirely to the Building or such other building. However, any
Operating Expenses that are not specifically attributable to the Building or to
any other building or the operation, repair, maintenance or replacement thereof,
shall be equitably allocated by Lessor to all buildings in the Project.
(c) An amount may be estimated by Lessor from
time to time of Lessee's Share of annual Operating Expenses and the same shall
be payable monthly during each twelve (12) month period of the Lease Term, on
the same day as the Base Rent is due hereunder. At the time the Asset Purchase
Agreement was executed, Lessor's estimate of Lessee's Share of Operating
Expenses was Two Hundred Forty-Three Thousand Nine Hundred Twenty-Four Dollars
($243,924) per month (which amount does not include janitorial expenses within
the Premises). Lessor shall deliver to Lessee within ninety (90) days after the
expiration of each twelve (12) month period or as soon thereafter as reasonably
practicable a reasonably detailed statement showing Lessee's Share of the actual
Operating Expenses incurred during the preceding year (the "Statement"). If
Lessee's payments under this section during such preceding year exceed Lessee's
Share as indicated on the Statement, Lessee shall be credited the amount of such
overpayment against rent next becoming due (or, if the Term has expired, Lessor
shall refund such overpayment to Lessee). If Lessee's payments under this
section during said preceding year were less than Lessee's Share of Operating
Expenses as indicated on the Statement, Lessee shall pay to Lessor the amount of
the deficiency within thirty (30) days after delivery by Lessor to Lessee of the
Statement.
(d) Notwithstanding the foregoing, "Operating
Expenses" shall not include the following: (i) costs of any improvement or
redecorating of any portion of the Project not made available for Lessee's use;
(ii) costs incurred in connection with negotiations or disputes with any other
occupant of the Project and costs arising from the violation by Lessor or any
other occupant of the Project of the terms and conditions of any lease or other
agreement; (iii) costs incurred in connection with the presence of any Hazardous
Materials (provided that nothing contained in this subsection (d) (iii) is
intended to limit any cost recovery by Lessor pursuant to Article 30 hereof);
(iv) any capital expenditures, except as set forth below; (v) interest, charges
and fees incurred on debt, payments on mortgages and rent under ground leases;
(vi) expense reserves; (vii) leasing commissions; (viii) costs of structural
repairs to the Building; (ix) Real Property Tax assessments in excess of the
amount that would be paid if such assessment was paid in installments over the
longest permitted term; (x) rentals for items which if purchased, rather than
rented, would constitute a capital cost (except to the extent such costs would
be amortized and included as capital expenditures as set forth below); (xi)
costs incurred by Lessor to the extent that Lessor is reimbursed by insurance
proceeds or is otherwise reimbursed; (xii) costs, including permit, license and
inspection costs, incurred with respect to the installation of Lessor's or other
occupants' improvements or incurred in renovating or otherwise improving,
decorating, painting or redecorating space in the Building (other than the
Common Areas); (xiii) expenses in connection with services or other benefits
which are not offered to Lessee or for which Lessee is charged for directly or
which benefit exclusively portions of the Project other than the Premises; (xiv)
management fees paid or charged by Lessor in connection with the management of
the Building in excess, as to Lessee's Share, of five percent (5%) of gross
rental under this Lease; (xv) salaries and other benefits paid to the employees
of Lessor; (xvi) rent for any office space occupied by Building management
personnel; or (xvii) costs arising from the gross negligence or willful
misconduct of Lessor or other occupants of the Building or their respective
agents, employees, licensees, vendors, contractors or providers of materials or
services (other than Lessee). All costs incurred by Lessor that would normally
be considered capital expenditures under generally accepted accounting
principles shall be amortized over the useful life of the applicable
4
Confidential Materials omitted and filed with the Securities and Exchange
Commission. Asterisks denote omissions.
improvement (as reasonably determined by Lessor in accordance with generally
accepted accounting principles) with interest on the unamortized balance at
the then prevailing market rate Lessor would pay if it borrowed funds to
construct such improvement from an institutional lender, and included in
Operating Expenses until the first to occur of the expiration of the Term (as
it may be extended) or the end of the term over which such costs were
amortized. In addition, in no event shall Operating Expenses for (A) the
first twelve (12) months of the Term (excluding the Excluded Expenses, as
defined below) **** (the "Year One Capped Amount") or (B) the second twelve
(12) month period of the Term (excluding the Excluded Expenses) exceed one
hundred ten percent (110%) of the lesser of (I) the Year One Capped Amount or
(II) the Operating Expenses (excluding the Excluded Expenses) for the first
twelve (12) month period of the Term. For the purposes of this subsection
(d), the term "Excluded Expenses" shall mean the amounts attributable to Real
Property Taxes, snow removal, electricity, HVAC operation, routine,
day-to-day HVAC maintenance (specifically excluding any costs that would
normally be considered capital expenditures under generally accepted
accounting principles and extraordinary costs that would have been incurred
had a necessary capital repair been made), water and other utilities.
(e) As used herein, "Lessee's Share" shall mean
the percentage obtained by dividing the rentable square footage of the Premises
by the rentable square footage of the Building (which is 636,412 rentable square
feet), which is currently 63.53%. Notwithstanding the foregoing, in the event
Lessee increases its level or intensity of electricity, HVAC, water or other
utility usage, Lessor shall have the right to adjust Lessee's Share with respect
to such costs to reflect the change in usage of such utilities by Lessee. In
such event, Lessor shall be responsible for demonstrating to Lessee's reasonable
satisfaction the extent of the increase. Similarly, in the event Lessee
decreases its level or intensity of electricity, HVAC, water or other utility
usage, Lessor shall, upon Lessee's request (provided Lessee demonstrates to
Lessor's reasonable satisfaction the extent of the decrease) adjust Lessee's
Share with respect to such costs to reflect the actual change in usage of such
utilities by Lessee.
(f) For a period of ninety (90) days after
Lessee's receipt of the Statement, and provided that Lessee shall have made full
payment on account thereof, Lessee shall be entitled, upon ten (10) days' prior
written notice, to inspect and examine those books and records of Lessor
relating to the determination of Operating Expenses for the year to which the
Statement relates. Such inspection shall take place during normal business hours
at Lessor's office or at such other place as Lessor shall reasonably designate.
If, after such inspection, Lessee disputes the amount of Operating Expenses
charged by Lessor, Lessee may, by written notice to Lessor, request an
independent audit of such books and records. The audit shall be conducted by a
certified public accountant ("CPA") acceptable to both Lessor and Lessee. The
CPA shall not be retained by Lessee on a contingency fee basis (i.e., with the
CPA's fee based upon any recovery by Lessee). If, within thirty (30) days after
Lessor's receipt of Lessee's notice requesting an audit, Lessor and Lessee are
unable to agree on the CPA who will conduct such audit, then Lessor shall
designate a nationally recognized accounting firm not then employed by Lessor or
Lessee, or any of their affiliates or principals, to conduct such audit. The
audit shall be limited to the determination of the amount of Operating Expenses
for the year to which the Statement relates. If the audit discloses that the
amount of Operating Expenses billed to Lessee was incorrect, the appropriate
party shall pay to the other party promptly the deficiency or overpayment, as
applicable. Lessee shall pay all costs and expenses of its initial audit and the
CPA audit; provided, however, if it is determined that Lessor has overstated the
Operating Expenses, on an annual basis, by more than five percent (5%), Lessor
shall bear the reasonable cost of the CPA audit. Lessee shall keep any
information gained from such audit confidential and shall not disclose it to any
other party, except to exercise its legal rights and remedies with respect
thereto. Lessee's exercise of its audit rights hereunder shall not relieve
Lessee of
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its obligation to timely pay all sums due hereunder, including any disputed
but as yet unaudited Operating Expenses.
5. SECURITY DEPOSIT. Upon execution of this Lease, Lessee shall
deposit with Lessor in cash Five Hundred Thirty-Four Thousand Six Hundred
Seventy-Nine Dollars ($534,679) as security for the performance by Lessee of its
obligations under this Lease, and not as a prepayment of rent (the "Security
Deposit"). Notwithstanding the foregoing, so long as no Event of Default has
occurred and no default then exists and is continuing, the Security Deposit
shall be reduced at the end of the Cohabitation Period to Four Hundred Seven
Thousand Nineteen Dollars ($407,019). If an Event of Default occurs, Lessor may
apply all or any part of the Security Deposit for the payment of any rent or
other sum in default, the repair of any damage to the Premises caused by Lessee
or the payment of any other amount which Lessor may spend or become obligated to
spend by reason of Lessee's default or to compensate Lessor for any other loss
or damage which Lessor may suffer by reason of Lessee's default to the full
extent permitted by law. To the extent any portion of the Security Deposit is
used, Lessee shall, within five (5) days after demand from Lessor, restore the
Security Deposit to its full amount. Lessor may keep the Security Deposit in its
general funds and shall not be required to pay interest to Lessee on the deposit
amount. Lessor shall return all of the remaining Security Deposit to Lessee
within thirty (30) days after the later of the end of the Term and the date that
Lessee surrenders possession of the Premises to Lessor. The Security Deposit
shall not serve as an advance payment of rent or a measure of Lessor's damages
for any default under this Lease. If Lessor transfers its interest in the
Project or this Lease, Lessor may transfer the Security Deposit to its
transferee. Upon such transfer, Lessor shall have no further obligation to
return the Security Deposit. Lessee shall look solely to the new landlord for
the return of the Security Deposit. Lessee covenants and agrees that it shall
not assign or encumber or attempt to assign or encumber the Security Deposit and
neither Lessor or its successors or assigns shall be bound by any such
agreement, encumbrance, attempted assignment or attempted encumbrance.
6. USE.
6.1 USE.
6.1.1 Subject to applicable Laws (defined below),
the Premises shall be used and occupied only for general office, electronics
manufacturing and ancillary, related research and development, related
distribution and warehousing and other legal, related uses.
6.1.2 Lessee shall not conduct, nor permit to be
conducted, either voluntarily or involuntarily, any auction, or going out of
business, fire or bankruptcy sale upon the Premises without first having
obtained Lessor's prior written consent.
6.1.3 Lessee, at Lessee's sole cost and expense,
shall obtain and maintain in force during the Term of this Lease all permits,
licenses and approvals required or necessary for the conduct of the activities
of Lessee on the Premises.
6.2 COMPLIANCE WITH LAW. During the Term of this Lease,
Lessee at Lessee's sole expense promptly shall comply with all statutes, codes,
ordinances, rules, regulations, orders of governmental authorities, covenants
and restrictions of record, and requirements of any fire insurance underwriters
or rating bureaus, now in effect or which may hereafter come into effect
("Laws"), whether or not they reflect a change in policy from that now existing,
relating to, imposed by reason of or applicable to the condition of the Premises
or Lessee's use or occupancy of the Premises, or any alteration, improvement or
change made to the Premises by Lessee, including any alterations that might
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be required solely to bring the Premises in compliance with the Americans
with Disabilities Act ("ADA"). Each of Lessor and Lessee agrees that it shall
not use, nor permit its employees, agents, contractors or invitees to use,
the space occupied or used by it in the Project in any manner that will tend
to create a waste or a nuisance or shall tend to disturb the occupants of
other portions of the Project. Notwithstanding the foregoing, Lessee shall
not be required to cause the Premises to comply with any Laws requiring the
construction of alterations unless the compliance is due to Lessee's
particular use (as opposed to manufacturing, office, warehouse and shipping
uses generally) or alterations. In addition, if Lessor is required to make
any alterations to the Premises to cause them to comply with Laws applicable
to manufacturing or warehouse uses generally (as opposed to general office
use), Lessor shall amortize the cost thereof over their useful life (as
reasonably determined by Lessor in accordance with generally accepted
accounting principles) with interest on the unamortized balance at the then
prevailing market rate Lessor would pay if it borrowed funds to construct
such improvements from an institutional lender. Lessee shall pay Lessor, as
Additional Rent and not as part of Operating Expenses, for the monthly
installments of such amortized amounts on the first day of each calendar
month thereafter until the earlier of the end of the useful life of the
applicable item and the expiration or earlier termination of the Term.
6.3 CONDITION OF PREMISES. Lessee acknowledges that
neither Lessor nor any agent of Lessor has made any representation or warranty
with respect to the Premises or with respect to the suitability of any part of
the Premises for the conduct of Lessee's business, except as expressly set forth
herein or in the Asset Purchase Agreement. Except with respect to Lessor's
obligation to construct the Improvements, and subject to the express
representations made by Lessor herein, Lessee hereby accepts the Premises and
all improvements thereon in "as-is" condition, subject to all applicable Laws
governing and regulating the use of the Premises, and any covenants or
restrictions of record, and accepts this Lease subject to all of the foregoing
and to all matters disclosed in this Lease. Except as expressly set forth
herein, Lessee acknowledges that Lessor has not made any representation or
warranty as to the present or future suitability of the Premises for the conduct
of the Lessee's business or the uses proposed by Lessee. Lessor represents and
warrants to Lessee that:
(a) Lessor's construction of the Improvements
will comply in all material respect with all Laws and the requirements of all
easements and restrictions and the Improvements will comply in all material
respects with all such Laws and requirements after completion by Lessor thereof;
(b) Unless specific changes are requested by
Lessee and approved by Lessor in accordance with Section 40 hereof, the Lessee
Improvements (defined below) will be supplied with primary and emergency (in the
computer room only) power, heating, ventilating and air conditioning ("HVAC")
and other utilities in types and amounts adequate to enable Lessee to conduct
therein business operations in substantially the same manner and at
substantially the same cost of operating such systems as the same are currently
being conducted by Lessor in comparable areas; and
(c) No portion of the Project is currently
subject to any mortgage, deed of trust or ground lease.
7. MAINTENANCE, REPAIRS AND ALTERATIONS.
7.1 LESSOR'S OBLIGATIONS. Subject to the provisions of
Section 9 (Damage and Destruction), Section 14 (Condemnation) and Section 7.2
(Lessee's Obligations), and except to the extent that any damage is caused by
the breach of this Lease by Lessee or by the act or omission of Lessee or
Lessee's employees, customers, or invitees (for which Lessee shall be solely
responsible for repair or
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replacement at Lessee's sole cost), Lessor shall perform all exterior and
structural maintenance and repairs of the Building and the Common Areas,
including parking, landscaping, roof, exterior security patrol and for
maintenance and repairs of the HVAC and fire suppression systems, the major
elements of the electrical system (e.g., switch gear, main electrical panels,
emergency generators owned, operated or leased by Lessor and associated fuel
storage tanks, and transformers), the overall system integrity of the fire
alarm system and the water, gas (if provided as of August 31, 2000) and other
Building-wide systems, to the extent they service the Building generally. In
the event of a required repair that threatens to materially interfere with
Lessee's use of the Premises, Lessor shall make such repair as soon as
practicable. Lessee expressly waives the benefits of any statute now or
hereafter in effect which would otherwise afford Lessee the right to make
repairs at Lessor's expense or to terminate this Lease because of Lessor's
failure to keep the Premises in good order, condition and repair; provided
that if the condition materially interferes with the conduct of Lessee's
business and Lessor has not repaired the condition in a timely manner, Lessee
may exercise its legal rights and seek an appropriate remedy in equity.
Lessor shall not be liable for damages or loss of any kind or nature by
reason of Lessor's failure to furnish any such services, except where such
failure is caused by the gross negligence or willful misconduct of Lessor.
7.2 LESSEE'S OBLIGATIONS.
7.2.1 Subject to the provisions of Section 9
(Damage and Destruction), Section 14 (Condemnation) and Section 7.1 (Lessor's
Obligations), Lessee, at Lessee's sole cost and expense, shall keep the Premises
in neat, orderly condition and be responsible for maintaining in good condition
and repair (a) the interior of the Premises, (b) all Building systems that
exclusively serve the Premises (whether or not located within the Premises) and
(c) all Building systems that otherwise serve the Premises, to the extent
located within the Premises, including, without limitation, the fire
extinguishers, security cameras, access control equipment and other systems and
equipment shown on EXHIBIT D hereto, but excluding the HVAC and fire suppression
systems and the major elements of the electrical system, as described above.
With respect to the fire alarm system, Lessee shall (i) be solely responsible
for monitoring the system and responding to any alarms within the Premises and
(ii) comply with applicable Law with respect to the operation of such system,
including, without limitation, keeping the system connected to the designated
third party monitoring station, as determined by the City of Mount Prospect fire
department. Lessee shall notify Lessor immediately of any such fire alarms in
the Premises. Lessee will also be responsible for maintaining the manufacturing
systems and equipment in the Premises. Notwithstanding anything to the contrary
herein, but subject to Section 8.5 hereof, Lessee shall also be responsible for
promptly repairing any damage to the Project caused by Lessee or its agents,
employees, contractors or invitees at Lessee's sole cost.
7.2.2 On the last day of the Term, or on the date
of any sooner termination, Lessee shall surrender the Premises to Lessor in the
same condition as received, clean and free of debris, except for ordinary wear
and tear, casualty damage (as provided in Section 9), condemnation (as provided
in Section 14), repairs which are Lessor's responsibility (as provided in
Section 7.1) and damage due to the negligence or willful misconduct of Lessor or
Lessor's employees, agents or contractors. All equipment located in the Premises
on the Commencement Date and not purchased by Lessee pursuant to the Asset
Purchase Agreement, including, without limitation, any furniture or equipment
related to Building systems (including, without limitation, the equipment listed
on EXHIBIT D hereto) shall remain Lessor's property; and Lessee shall not remove
such furniture and equipment from the Premises and shall surrender such
furniture and equipment in the condition required herein upon the expiration or
earlier termination of the Term. Any damage or deterioration of the Premises
shall not be deemed ordinary wear and tear if the same could have been prevented
by customary and ordinary
8
maintenance practices. Prior to expiration of the Term of this Lease or the
date of any sooner termination, Lessee shall repair any damage to the
Premises occasioned by the installation or removal of Lessee's trade
fixtures, furnishings, equipment, personal property and, subject to Section
7.3.4 below, Alterations (as defined below) and Installations (as defined
below). Notwithstanding the foregoing sentence, Lessor acknowledges that
Lessee will remove on the expiration or earlier termination of the Term,
furniture and equipment located in the Premises on the Commencement Date that
were purchased by Lessee under the Asset Purchase Agreement. With respect to
furniture or equipment in the manufacturing or warehouse areas that are
affixed to the Premises, so long as Lessee uses reasonable care in removing
such furniture and equipment, Lessee shall not be required to restore or
repair any holes in the floors or walls that occur due to the attachment of
such items to the floor or walls. In connection with removing any such
equipment or furniture, all utility drops (power poles) shall be left in
place, except all hardwired electrical drops shall be fully disconnected,
conduit shall be removed and electrical wires shall be terminated within the
cable tray or junction box in a safe manner in accordance with all laws. In
the office areas, all electrical and telecommunications cables shall be
disconnected from the furniture systems and terminated safely in accordance
with all laws and the cables shall be coiled at the bottom of the appropriate
power pole or wall junction box, as applicable.
7.3 ALTERATIONS AND ADDITIONS.
7.3.1 Lessee shall not, without Lessor's prior
written consent, make any alterations, improvements, additions (collectively,
"Alterations"), or Installations in, on or about the Premises which consent
shall not be unreasonably withheld or delayed; provided that Alterations and
Installations that cost less than Fifty Thousand Dollars ($50,000) per project
and do not affect the structure of the Building or the HVAC and fire suppression
systems serving the Building, and could not affect the primary electrical
distribution or fire alarm systems in the Building, shall not require Lessor's
consent. Any Alterations or Installations made by Lessee shall not materially
interfere with the operation of any mechanical apparatus or electrical or
plumbing systems in the Building. As used in this Section 7.3 the term
"Installation" shall mean carpeting, air lines, power panels, electrical
distribution systems, lighting fixtures, space heaters, air conditioning, and
plumbing. For projects that exceed Five Hundred Thousand Dollars ($500,000),
Lessor may require Lessee to provide Lessor, at Lessee's sole cost and expense,
payment and performance bonds in an amount equal to the estimated costs of such
Alterations or Installations to insure Lessor against any liability for
mechanic's and materialmen's liens and to insure payment and performance of the
work.
7.3.2 Any Alterations or Installations that Lessee
desires to make in or about the Premises and which requires the consent of
Lessor shall be presented to Lessor in written form for Lessor's approval, with
proposed detailed plans and specifications therefor prepared at Lessee's sole
cost. Lessor shall have eight (8) business days after receipt of Lessee's
written request to make an Alteration or Installation in accordance with the
preceding sentence to approve or disapprove such Alterations or Installations,
provided Lessor's failure to affirmatively approve or object to any such
Alteration or Installation shall not be deemed to constitute Lessor's consent
thereto. Lessee shall pay all of Lessor's reasonable, third party, out of pocket
expenses Lessor incurs in reviewing the plans for and monitoring the
construction of the Alterations or Installations, including, without limitation,
architects, engineers and attorneys. Any consent by Lessor thereto shall be
deemed conditioned upon Lessee's acquisition of all permits required to make
such Alterations or Installations from all appropriate governmental agencies,
the furnishing of copies thereof to Lessor prior to commencement of the work,
and the compliance by Lessee with all conditions of said permits in a prompt and
expeditious manner, all at Lessee's sole cost. Upon completion of any such
Alterations or Installations, Lessee shall, at Lessee's sole cost, deliver to
Lessor "as-built" plans and specifications therefor. All construction work
required or permitted to be done by
9
Lessee shall be performed by a licensed contractor approved by Lessor, which
approval shall not be unreasonably withheld, and in a prompt, diligent, and
good and workmanlike manner. All such construction work shall conform in
quality and design with the Premises existing as of the Commencement Date and
shall not diminish the value of the Premises. All such construction work shall
be performed in compliance with all applicable Laws. Notwithstanding any other
provision of this Lease, if any Alterations or Installations (including any
restoration work required in connection with the removal of Alterations or
Installations at the expiration of the Term) require upgrades to the Premises
or the Common Areas, including, without limitation, structural upgrades, for
earthquakes, sprinklers, ADA requirements, asbestos removal or any other
applicable Laws, Lessee shall be required to complete such upgrades at Lessee's
sole cost as a condition to installing any such Alterations or Installations.
7.3.3 Lessee shall pay, when due, all claims for
labor or materials furnished or alleged to have been furnished to or for Lessee
at or for use in the Premises. Lessee shall give Lessor not less than five (5)
days' written notice prior to the commencement of any work in the Premises, and
Lessor shall have the right to post notices of non-responsibility in or on the
Premises as provided by Law. If Lessee in good faith shall contest the validity
of any such lien, claim or demand and post a bond in the full amount of such
lien, claim or demand, then Lessee shall, at its sole cost and expense, defend
itself and Lessor against the same and shall pay and satisfy any judgment that
may be rendered thereon before the enforcement thereof against Lessor or the
Premises. In addition, Lessor may require Lessee to pay Lessor's reasonable
attorneys' fees and costs, upon demand, in participating in such action if
Lessor shall decide it is in Lessor's best interest to do so. All work in the
Premises performed by or at the request of Lessee shall be performed in
compliance with all applicable Laws and covenants, conditions and restrictions
of record against the Premises.
7.3.4 Subject to Lessor's right to require their
removal and to cause Lessee to become the owner thereof as hereinafter provided
in this paragraph, all Alterations and Installations made to the Premises by
Lessee shall be the property of and owned by Lessee, but considered a part of
the Premises. Unless otherwise required by Lessor as provided herein, all
Alterations and Installations shall, at the expiration or earlier termination
of this Lease, become the property of Lessor and remain upon the Premises and
be surrendered with the Premises by Lessee. Unless otherwise agreed in writing,
Lessor may require that any or all Alterations or Installations be removed by
the expiration or earlier termination of this Lease, notwithstanding that their
installation may have been consented to by Lessor. Lessor may require the
removal at any time of all or any part of any Alterations or Installations made
without the required consent of Lessor. If requested by Lessee, Lessor shall
specify at the time of its granting approval of the Alternations or
Installations (or within five (5) business days of Lessee's request, if
approval is not required) whether the Alteration or Installation must be
removed at the end of the Term.
8. INSURANCE; INDEMNITY.
8.1 LESSEE'S INSURANCE.
8.1.1 Lessee shall, at Lessee's expense, obtain
and keep in force during the Term of this Lease a policy of commercial general
liability and property damage insurance insuring Lessee against any liability
arising out of the use, occupancy or maintenance of the Premises and the Common
Areas. Such insurance shall have limits of liability of not less than Five
Million Dollars ($5,000,000) per occurrence and shall name Lessor as an
additional insured. The policy shall contain contractual liability coverage
applicable to Lessee's obligations under the indemnity provision of this
Section 8. The limits and coverage of such insurance shall not, however, limit
the liability of Lessee under this Lease. It is specifically acknowledged and
agreed that all liability insurance required to be
10
provided by Lessee is and shall be considered primary and first to respond, and
any liability insurance of Lessor is and shall be considered secondary to such
insurance provided by Lessee. In addition to the obligations of Section 8.4
hereof, Lessee shall obtain and provide Lessor with evidence of a primary
insurance endorsement indicating that Lessee has obtained such coverage.
8.1.2 Lessee at Lessee's expense, shall obtain and
keep in force during the Term of this Lease a policy or policies of insurance
covering loss or damage to Lessee's furniture, fixtures, equipment, inventory
and other personal property located in or on the Premises, in an amount not less
than the full replacement value thereof, as the same may exist from time to
time, providing protection against all perils included within the classification
of fire, extended coverage, vandalism, malicious mischief, flood (in the event
the Building is located in a designated flood hazard area) special extended
perils ("all risk," or "special" causes of loss as such terms are used in the
insurance industry), and such other insurance coverages as Lessor from time to
time reasonably deems advisable.
8.1.3 Lessee, at Lessee's expense, shall obtain
and keep in force during the Term of this Lease the following policies of
insurance:
(a) Product liability insurance (to the
extent the risks normally covered by such policy are not fully covered under the
commercial general liability policy described in Section 8.1.1);
(b) Workers' compensation insurance and
any other employee benefit insurance sufficient to comply with all Laws; and
(c) With respect to making of
Alterations or the construction of improvements or the like undertaken by
Lessee, contingent liability and builder's risk insurance, in an amount and with
coverage reasonably satisfactory to Lessor.
8.2 LESSOR'S INSURANCE.
8.2.1 Lessor shall obtain and keep in force during
the Term of this Lease a policy of commercial general liability and property
damage insurance, insuring Lessor, but not Lessee, against any liability arising
out of the ownership, use, occupancy or maintenance of the Building or the
Common Areas with limits of liability as are customarily carried by owners of
facilities similar to the Building. It is agreed that the insurance maintained
by Lessor pursuant to this Section 8.2.1 shall not be contributory with the
insurance maintained by Lessee pursuant to Section 8.1.1.
8.2.2 Lessor shall obtain and keep in force during
the Term of this Lease a policy or policies of insurance covering first party
loss or damage to the Building and the other improvements within the Premises,
but not Lessee's personal property, fixtures or equipment, in an amount equal to
the full replacement value thereof and subject to such terms and conditions as
Lessor may deem appropriate from time to time. In addition, Lessor at its option
may obtain and keep in force, during the Term of this Lease, a policy of rental
value insurance covering rental payable by Lessee under this Lease, with loss
payable to Lessor.
8.3 BLANKET POLICY. Notwithstanding anything to the
contrary contained in this Lease, Lessee's obligation to carry insurance may be
satisfied by coverage under a so-called "blanket policy" or policies of
insurance, provided that Lessor shall be named as an additional insured per the
terms of the Lease, the coverage afforded Lessor shall not be reduced or
diminished from that otherwise
11
required by this Lease, and all requirements set forth in this Lease are
otherwise satisfied by such blanket policy or policies.
8.4 INSURANCE POLICIES. Insurance required hereunder
shall be in companies holding a rating of at least A-, VIII, as set forth in the
most current issue of BEST'S INSURANCE REPORTS. Lessee shall not do or permit to
be done anything which shall invalidate or render unenforceable any portion of
the insurance policies carried by Lessee or by Lessor. Lessee shall deliver to
Lessor certificates of insurance evidencing the existence and amounts of
insurance required under this Section 8 not less than seven (7) days prior to
the Commencement Date of this Lease. No such policy shall be cancelable or
subject to reduction of coverage except after thirty (30) days' prior written
notice to Lessor. Lessee shall, at least thirty (30) days prior to the
expiration of such policies, furnish Lessor with certificates of insurance,
renewals, "binders" or new policies evidencing the insurance to be maintained by
Lessee. Any failure of Lessor to demand or obtain any certificate, policy or
other matter provided for in this Lease shall not constitute a waiver of any
kind, and shall not constitute a defense for Lessee under any circumstances.
8.5 WAIVER OF SUBROGATION. Notwithstanding anything to
the contrary herein, Lessor hereby releases Lessee, and Lessee hereby releases
Lessor, and each of their respective partners, principals, members, officers,
agents, subtenants, employees and servants, from any and all liability for loss,
damage or injury to the property of the other in or about the Premises or the
Project which is caused by or results from a peril or event or happening which
is covered by insurance actually carried and in force at the time of the loss by
the party sustaining such loss or required to be carried hereunder. Lessee shall
give notice to all insurance carriers that the foregoing mutual waiver of
subrogation is contained in this Lease, and shall obtain from such insurance
carriers a waiver of the rights of subrogation.
8.6 INDEMNITY. (a) Except to the extent caused by the
negligence or intentional misconduct or breach of this Lease by Lessor or its
agents, employees or contractors, Lessee shall indemnify, defend, protect and
hold harmless Lessor from and against any and all claims, losses, costs,
damages, liabilities, causes of action, judgments and settlements, including
attorneys' fees and costs, arising from any breach or default in the
performance of any obligation to be performed by Lessee under the terms of this
Lease, or arising from the negligence or willful misconduct of Lessee, or any
of Lessee's agents, contractors, employees, or invitees. In the event any
action or proceeding of any kind is brought against Lessor in connection with
any of the foregoing matters, Lessee shall defend the same at Lessee's expense,
with counsel reasonably satisfactory to Lessor, and Lessor shall cooperate with
Lessee in such defense; provided, however, that Lessor shall have the right to
defend itself, at Lessee's expense, with counsel of Lessor's choice and Lessee
shall reimburse Lessor for all fees and costs of defense upon demand. Lessee,
as a material part of the consideration to Lessor for the execution of this
Lease by Lessor, hereby assumes all risk of damage to property of Lessee or of
Lessee's employees, agents, customers and invitees, or injury to persons, in,
upon or about the Premises or the Common Areas, arising from any cause
whatsoever, except such damage or injury arising from the gross negligence or
intentional misconduct or breach of this Lease by Lessor or its agents,
employees or contractors.
(b) Except to the extent caused by the
negligence or intentional misconduct or breach of this Lease by Lessee or its
agents, employees or contractors, Lessor shall indemnify, defend, protect and
hold harmless Lessee from and against any and all claims, losses, costs,
damages, liabilities, causes of action, judgments and settlements, including
attorneys' fees and costs, arising from any breach or default in the
performance of any obligation to be performed by Lessor under the terms of this
Lease, or arising from the gross negligence or willful misconduct of Lessor, or
any of Lessor's agents, contractors, employees, or invitees. In the event any
action or proceeding of any kind is brought against
12
Lessee in connection with any of the foregoing matters, Lessor shall defend the
same at Lessor's expense, with counsel reasonably satisfactory to Lessee, and
Lessee shall cooperate with Lessor in such defense; provided, however, that
Lessee shall have the right to defend itself, at Lessor's expense, with counsel
of Lessee's choice and Lessor shall reimburse Lessee for all fees and costs of
defense upon demand. Notwithstanding anything to the contrary in this Lease, in
no event shall Lessee or its agents, contractors, employees or invitees be
deemed to be Lessor's agents, contractors or invitees under this Lease.
8.7 EXEMPTION OF LESSOR FROM LIABILITY. Except for the
gross negligence or intentional misconduct or breach of this Lease by Lessor,
its agents, employees or contractors, Lessee hereby agrees that Lessor shall not
be liable for damage to the goods, wares, merchandise or other property of
Lessee, Lessee's employees, agents, contractors or invitees, or any other person
in or about the Premises, whether such damage or injury is caused by or results
from fire, steam, electricity, gas, water or rain, or from the breakage,
leakage, obstruction or other defects of pipes, sprinklers, wires, appliances,
plumbing, HVAC systems or equipment or lighting fixtures, or from any other
cause, whether said damage or injury results from conditions arising upon the
Premises, or from other sources or places and regardless of whether the cause of
such damage or injury or the means of repairing the same is inaccessible to
Lessee. In no event shall either of Lessor or Lessee be liable to the other, or
to the other's employees, agents, contractors or invitees, under this Lease for
lost profits or other consequential or speculative losses or damages claimed or
incurred by the other party or the other party's employees, agents, contractors
or invitees.
9. DAMAGE OR DESTRUCTION.
9.1 DEFINITIONS.
9.1.1 "Partial Damage" shall mean the Building is
damaged or destroyed to the extent that the cost of repair is less than fifty
percent (50%) of the then fair market value of the Building and can be (based on
Lessor's contractor's reasonable estimate) restored within one hundred eighty
(180) days after the occurrence of the damage or destruction.
9.1.2 "Total Destruction" shall mean the Building
is damaged or destroyed to the extent that the cost of repair is fifty percent
(50%) or more of the then fair market value of the Building or cannot be (based
on Lessor's contractor's reasonable estimate) restored within one hundred eighty
(180) days after the occurrence of the damage or destruction.
9.1.3 "Insured Loss" shall mean damage or
destruction which was caused by an event covered by the insurance described in
Section 8.2.2 or which would have been covered by such insurance had such
insurance been carried by Lessor as required under Section 8.2.2. The fact that
an Insured Loss is subject to a deductible amount shall not make the loss an
uninsured loss.
9.1.4 "Replacement Cost" shall mean the amount of
money necessary to be spent in order to repair or rebuild the damaged area to
the condition that existed immediately prior to the damage occurring.
9.2 PARTIAL DAMAGE.
9.2.1 Insured Loss: If at any time during the Term
of this Lease there is damage to the Premises which is an Insured Loss and which
falls into the classification of Partial Damage, then Lessor shall, at Lessor's
expense, repair such damage to the Premises, but not Lessee's
13
fixtures or equipment, as soon as reasonably possible and this Lease shall
continue in full force and effect.
9.2.2 Uninsured Loss: If at any time during the
Term of this Lease there is damage which is not an Insured Loss and which falls
within the classification of Partial Damage, Lessor may at Lessor's option
either (a) repair such damage as soon as reasonably possible at Lessor's
expense, in which event this Lease shall continue in full force and effect, or
(b) give written notice to Lessee within sixty (60) days after the date of the
occurrence of such damage of Lessor's intention to cancel and terminate this
Lease as of the date of the occurrence of such damage. Notwithstanding the
foregoing, Lessor shall not have the right to terminate this Lease under this
Section 9.2.2 if (i) repair or restoration would cost less than five percent
(5%) of the fair market value of the Building or (ii) Lessee agrees to pay any
uninsured amount in excess thereof.
9.3 TOTAL DESTRUCTION. If at any time during the Term of
this Lease t here is damage, whether or not it is an Insured Loss, which falls
into the classifications of Total Destruction, then either of Lessor or Lessee
may give written notice to the other within sixty (60) days after the date of
occurrence of such damage of its intention to cancel and terminate this Lease,
in which case this Lease shall be canceled and terminated as of the date of the
occurrence of such damage. If this Lease is not canceled or terminated as
aforesaid, Lessor shall repair such damage or destruction to the Premises, but
not Lessee's fixtures or equipment, as soon as reasonably possible at Lessor's
expense, and this Lease shall continue in full force and effect.
9.4 ABATEMENT OF RENT; LESSEE'S REMEDIES. In the event
Lessor repairs or restores the Premises pursuant to the provisions of this
Section 9, the Base Rent and Operating Expenses payable hereunder for the period
from the date of such damage and during which such damage, repair or restoration
continues shall be abated in proportion to the degree to which Lessee's use of
the Premises is impaired. Except for abatement of Base Rent and Additional Rent,
if any, Lessee shall have no claim against Lessor for any damage suffered by
reason of any such damage, destruction, repair or restoration.
9.5 TERMINATION - ADVANCE PAYMENTS. Upon termination of
this Lease pursuant to this Section 9, an equitable adjustment shall be made
concerning advance rent and any advance payments made by Lessee to Lessor.
9.6 WAIVER. Lessor and Lessee waive the provisions of any
Laws relating to termination of leases in the event of damage or destruction of
the leased property, and agree that the rights and obligations of the parties in
such event shall be solely governed by the terms of this Lease.
9.7 LESSEE'S PROPERTY. Notwithstanding anything in this
Lease to the contrary, Lessor shall have no obligation to rebuild or restore
Lessee's trade fixtures, equipment or merchandise.
9.8 NOTICE OF DAMAGE. Lessee shall notify Lessor within
five (5) days after the occurrence thereof of any damage to all or any portion
of the Premises. In no event shall Lessor have any obligation to repair or
restore the Premises pursuant to this Section 9 prior to receipt of notice
hereunder. Within thirty (30) days after Lessee notifies Lessor in writing of
the occurrence of damage to the Premises as the result of a casualty, Lessor
will use commercially reasonable efforts to provide Lessee with Lessor's
contractor's estimate of the time required to repair and restore the Premises
and the cost of such repair and restoration. If necessary, the time period
within which Lessee may exercise its termination right under Section 9.3 shall
be extended to the date that is ten (10) days after Lessor's delivery of the
contractor's estimate to Lessee.
14
9.9 REPLACEMENT COST. The reasonable determination in
good faith by Lessor of the estimated cost of repair of any damage, or of the
replacement cost, shall be conclusive for purposes of this Section 9.
9.10 LESSEE'S ADDITIONAL RIGHT TO TERMINATE. In the event
Lessor elects or is required to repair or restore the Premises hereunder and
fails to substantially complete restoration by the date that is forty-five (45)
days after the date scheduled for completion (which date shall be extended by
one (1) day for each day that such substantial completion is delayed due to
delay caused by Lessee or force majeure, provided Lessor notifies Lessee within
three (3) business days of the occurrence of such a Lessee delay or ten (10)
business days of the occurrence of such of a force majeure event), Lessee shall
have the right, exercisable by notice to Lessor given by the ten (10) days
following such date, to terminate this Lease, and this Lease shall be deemed
terminated as of the date of such notice.
9.11 RIGHT TO TERMINATE LEASE AT END OF TERM. If at any
time during the last six (6) months of the Term of this Lease there is damage or
destruction to the Premises resulting from a casualty, whether or not it is an
Insured Loss, either party shall have the right, exercisable by notice to the
other party within thirty (30) days following the casualty, to terminate this
Lease if the casualty materially adversely affects Lessee's overall operations
in the Premises.
10. REAL PROPERTY TAXES.
10.1 PAYMENT OF TAXES. Lessor shall pay when due all Real
Property Taxes (as defined in Section 10.2), applicable to the Project, subject
to Lessee's payment of a portion of the cost thereof pursuant to Section 4.3.
10.2 DEFINITION OF "REAL PROPERTY TAXES". As used herein,
the term "Real Property Taxes" shall include any form of tax, levy or
assessment, general, special, ordinary or extraordinary, and any license fee,
commercial rental tax, improvement bond or bonds, levy or tax imposed on the
Premises or any portion thereof by any authority having the direct or indirect
power to tax, including any city, county, state or federal government, or any
school, agricultural, sanitary, fire, street, drainage or other improvement,
benefit or service district, as against any legal or equitable interest of
Lessor in the Project or in any portion thereof, as against Lessor's right to
rent or other income therefrom, or as against Lessor's leasing the Premises. The
term "Real Property Taxes" shall also include (a) any tax, fee, levy, assessment
or charge (i) in substitution of, partially or totally, any tax, fee, levy,
assessment or charge hereinabove included within the definition of "Real
Property Taxes," (ii) the nature of which was hereinbefore included within the
definition of "Real Property Taxes," (iii) which is imposed as a result of a
transfer, either partial or total, of Lessor's interest in the Project or which
is added to a tax or charge hereinbefore included within the definition of "Real
Property Taxes" by reason of such transfer, or (iv) which is imposed by reason
of this transaction, any modifications or changes hereto, or any transfer
hereof, and (b) any possessory interest or other tax, fee, levy, assessment or
charge levied in lieu of any tax, fee, levy, assessment or charge hereinabove
included within the definition of "Real Property Taxes" by reason of the tax
exempt or other status of Lessor. Notwithstanding anything to the contrary
contained in the Lease, the following shall be excluded from "Real Property
Taxes" and shall be paid solely by Lessor: inheritance, estate succession,
transfer, gift, franchise, or capital stock tax, or any income taxes.
10.3 PERSONAL PROPERTY TAXES.
10.3.1 Lessee shall pay prior to delinquency all
taxes assessed against and levied upon trade fixtures, furnishings, equipment,
inventory and all other personal property of Lessee
15
located in, on or about the Premises, which taxes shall be paid by Lessor. When
possible, Lessee shall cause said trade fixtures, furnishings, equipment,
inventory and all other personal property to be assessed and billed separately
from the Real Property Taxes.
10.3.2 If any of Lessee's said personal property
shall be assessed with Lessor's real property, Lessee shall pay to Lessor the
taxes attributable to Lessee's said personal property within ten (10) days after
receipt of a written statement setting forth the taxes applicable to Lessee's
personal property.
11. UTILITIES AND SERVICES. Lessor shall provide to the Premises
water, gas, primary and emergency (in computer room only) electricity, and HVAC
(other than air conditioning to the warehouse area) in amounts and at times
consistent with Lessor's past use of the Premises, subject to Lessee's payment
of a portion of the cost thereof under Section 4.3 hereof. Lessor shall have no
liability to Lessee for the interruption, discontinuance, reduction, or
curtailment of any utility or service provided to the Premises, and any such
interruption, discontinuance, reduction or curtailment shall not be grounds for
abatement of rent under this Lease. Lessor shall also provide vehicular security
patrol of the Common Areas, as described on EXHIBIT E hereto. Lessor shall not
be required to provide monitoring of security cameras or other safety measures.
Lessee shall be solely responsible for removal of its trash, janitorial services
and other services not set forth herein. Lessee hereby appoints the following
person as Lessee's representative ("Lessee's Property Management
Representative") to act for Lessee in all matters related to property
management: Xxxxxx Xxxxx. All communications with respect to the provision of
utilities or services or other similar property management issues are to be made
by Lessee's Property Management Representative to Lessor's site services help
desk (the telephone number of which is currently (000) 000-0000) or pursuant to
such other reasonable procedure as Lessor may reasonably determine from time to
time. Either party may change its representative at any time by written notice
to the other party in compliance with the notice provisions of this Lease.
12. ASSIGNMENT AND SUBLETTING. Lessee shall not assign, transfer,
encumber, grant any concession or license or hypothecate the leasehold estate
under this Lease, or any interest therein, and shall not sublet the Premises, or
any part thereof, or any right or privilege appurtenant thereto, or suffer any
other person or entity to occupy or use the Premises, or any portion thereof (a
"Transfer") without, in each case, the prior written consent of Lessor, which
consent may be withheld in Lessor's sole discretion. Notwithstanding the
foregoing, Lessor shall not unreasonably withhold its consent to the granting of
a leasehold mortgage by Lessee to a third party, institutional lender.
12.1 DOCUMENTATION. Prior to any Transfer which Lessee
desires to make, Lessee shall provide to Lessor in writing the name and address
of the proposed transferee, the balance sheet and income statement (and
statement of change in financial condition) of the proposed transferee for the
prior three (3) years, to the extent available, true and complete copies of all
documents relating to Lessee's prospective agreement to Transfer and shall
specify all consideration to be received by Lessee for such Transfer in the form
of lump sum payments, installments of rent, or otherwise, and such other
information as Lessor shall reasonably request in connection with the proposed
Transfer within thirty (30) days following receipt by Lessor of Lessee's
proposal to Transfer. For purpose of this Section 12.1, the term "consideration"
shall include, without limitation, all monies or other consideration of any
kind, including, but not limited to, bonus money, and payments (in excess of
book value thereof) for Lessee's fixtures, equipment or furniture. Within
fifteen (15) business days after the receipt of such documentation and other
information, Lessor shall notify Lessee in writing that Lessor either (a)
consents to the proposed Transfer subject to the terms and conditions
hereinafter set forth, or (b) refuses such consent. Failure by Lessor timely to
give such notice shall be deemed a denial of consent.
16
12.2 TERMS AND CONDITIONS. As a condition to Lessor
granting its consent to any Transfer, (a) Lessor may require that Lessor receive
fifty percent (50%) of the amount by which all consideration to be received by
Lessee in connection with said Transfer, less any reasonable, third party costs
to effectuate such Transfer, exceeds the Base Rent payable by Lessee to Lessor
for the period of such Transfer (the "Bonus Rent"), (b) while an Event of
Default exists, Lessor may require that the proposed transferee make all rent
payments under the Transfer directly to Lessor, (c) Lessee and the proposed
transferee must demonstrate to Lessor's reasonable satisfaction that the
transferee is financially responsible and capable of performing the obligations
imposed under this Lease or the sublease, as applicable, and (d) that proposed
use of the Premises is permitted under the provisions of this Lease. The parties
acknowledge that in connection with any subletting of the Premises, Lessee may
agree to provide a sublessee with certain services such as telephone answering
and receptionist services, and the parties agree the fair market value for such
services shall not constitute Bonus Rent. Each Transfer agreement to which
Lessor has consented shall be an instrument in writing in form reasonably
satisfactory to Lessor, and shall be executed by both Lessee and the transferee,
as the case may be. Each such Transfer agreement shall recite that it is and
shall be subject and subordinate to the provisions to this Lease, that the
transferee accepts such Transfer and agrees to perform all of the obligations of
Lessee hereunder (in the case of an assignment), and that the termination of
this Lease shall, at Lessor's sole election, constitute a termination of every
such Transfer. In the event Lessor shall consent to a Transfer, Lessee shall
nonetheless remain primarily liable for all obligations and liabilities of
Lessee under this Lease, including but not limited to the payment of rent. No
Transfer shall relieve any guarantor of this Lease. Lessee agrees to reimburse
Lessor upon demand for reasonable attorneys' fees and costs incurred by Lessor
in connection with the negotiation, review and documentation of any such
requested Transfer.
12.3 PARTNERSHIP. In the event this Lease is assigned to a
partnership, a transfer or transfers, voluntary or involuntary, which in the
aggregate consists of a majority interest or any general partner interest in the
partnership, or the dissolution of the partnership, shall be deemed a Transfer
requiring Lessor's prior written consent.
12.4 CORPORATION. If Lessee is a corporation, any
dissolution, merger, consolidation, or other reorganization of Lessee, or the
transfer, of a controlling percentage of the capital stock of Lessee, or the
sale or series of sales within any twelve (12) month period of all or
substantially all of Lessee's assets located in, on, or about the Premises,
shall be deemed a Transfer. The phrase "controlling percentage" means the
ownership of, and the right to vote, stock possessing twenty-five percent (25%)
or more of the total combined voting power of all classes of Lessee's capital
stock issued, outstanding and entitled to vote for the election directors. The
provisions of this paragraph shall not apply to the transfer of the shares of
Lessee through a national securities exchange, provided that such transfer is
not effected for the purpose of obtaining effective control of Lessee or for the
purpose of obtaining a controlling percentage of the shares of Lessee.
12.5 LESSOR'S REMEDIES. Any Transfer without Lessor's
prior written consent shall at Lessor's election be void, and shall constitute a
violation of this Lease. The consent by Lessor to any Transfer shall not
constitute a waiver of the provisions of this Section 12, including the
requirement of Lessor's prior written consent, with respect to any subsequent
Transfer. If Lessee shall purport to Transfer, without Lessor's prior written
consent or without complying with the provisions of this Section, Lessor may
collect rent from the person or persons then or thereafter occupying the
Premises and apply the net amount collected against the rent reserved in this
Lease, but such collection shall not be deemed a waiver of Lessor's rights and
remedies under this Section 12, or the acceptance of any such purported
transferee, or a release of Lessee from the further performance by Lessee of
covenants set forth in this Lease, or a release of any guarantor of this Lease.
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12.6 PERMITTED TRANSFERS. Notwithstanding anything to the
contrary contained in this Section 12, a Transfer (a) to an entity which
controls, is controlled by or is under common control with Lessee or (b) by
operation of law or otherwise in connection with a merger, consolidation,
reorganization, stock or asset sale or similar transaction shall not require
Lessor's consent so long as such transferee or the surviving entity (i) shall
have at least as good a net worth as Lessee as of the date the Asset Purchase
Agreement was executed; and (ii) does not include the following competitors of
Lessor: Cisco Systems, Nortel Networks, Cabletron or Lucent. Lessee shall give
Lessor not less than ten (10) days' prior written notice of any transaction
permitted under this Section 12.6, including the identity of the parties
involved, their relationship and such other information as Lessor may reasonably
request to evidence compliance with the requirements of this Section 12.6.
13. DEFAULT; REMEDIES.
13.1 DEFAULT. The occurrence of any one or more of the
following events shall constitute a default of this Lease by Lessee (an "Event
of Default"):
13.1.1 The failure by Lessee to make any payment of
rent or any other payment required to be made by Lessee hereunder, as and when
due, where such failure shall continue for a period of five (5) days after
written notice thereof from Lessor to Lessee.
13.1.2 Except as otherwise provided in this Lease,
the failure by Lessee to observe or perform any of the covenants, conditions or
provisions of this Lease to be observed or performed by Lessee, other than
described in Section 13.1.1 above, where such failure shall continue for a
period of thirty (30) days after written notice thereof from Lessor to Lessee;
provided, however, that if the nature of Lessee's noncompliance is such that
more than thirty (30) days are reasonably required for its cure, then Lessee
shall not be deemed to be in default if Lessee commenced such cure within said
thirty (30) day period and thereafter diligently prosecutes such cure to
completion.
13.1.3 (a) The making by Lessee of any general
arrangement or general assignment for the benefit of creditors; (b) Lessee
becomes a "debtor" as defined in 11 U.S.C. Section 101 or any successor statute
thereto (unless, in the case of a petition filed against Lessee, the same is
dismissed within sixty (60) days); (c) the appointment of a trustee or receiver
to take possession of substantially all of Lessee's assets located at the
Premises or of Lessee's interest in this Lease, where possession is not restored
to Lessee within thirty (30) days; (d) the attachment, execution or other
judicial seizure of substantially all of Lessee's assets located at the Premises
or of Lessee's interest in this Lease, where such seizure is not discharged
within thirty (30) days or the date of any sooner sale of any of such assets; or
(e) Lessee shall not pay its debts as they become due.
13.2 REMEDIES. Upon an Event of Default, Lessor may at any
time thereafter, with or without notice or demand and without limiting Lessor in
the exercise of any right or remedy which Lessor may have by reason of such
default:
13.2.1 Terminate Lessee's right to possession of
the Premises by any lawful means, in which case this Lease and the Term hereof
shall terminate and Lessee shall immediately surrender possession of the
Premises to Lessor. In such event, Lessor shall be entitled to recover from
Lessee:
(a) the worth at the time of award of
the unpaid rent which had been earned at the time of termination of this Lease;
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(b) the worth at the time of award of
the amount by which the unpaid rent which would have been earned after
termination of the Lease until the time of award exceeds the amount of rental
loss that Lessee proves could have been reasonably avoided;
(c) the worth at the time of award of
the amount by which the unpaid rent for the balance of the Term after the time
of award exceeds the amount of rental loss that Lessee proves could be
reasonably avoided; and
(d) any other amount necessary to
compensate Lessor for all detriment proximately caused by Lessee's default
including, but not limited to, the cost of recovering possession of the
Premises, reasonable expenses of reletting, to the extent allocable to the
remainder of the Term hereof, including renovation and alteration of the
Premises, reasonable attorneys' fees and any real estate commission incurred in
reletting the Premises.
In Sections 13.2.1(a) and 13.2.1(b), the "worth at the time of award"
shall be calculated using the interest rate set forth in Section 19. As used in
Section 13.2.1(c), the phrase "worth at the time of award" shall be computed by
discounting such amount by the discount rate of the Federal Reserve Bank of
Chicago at the time of the award plus one percent (1%).
13.2.2 Maintain Lessee's right to possession in
which case this Lease shall continue in effect whether or not Lessee shall have
vacated or abandoned the Premises. In such event, Lessor shall be entitled to
enforce all of Lessor's rights and remedies under this Lease, including the
right to recover the rent as it becomes due hereunder. No action by Lessor shall
be deemed a termination of this Lease except written notice by Lessor delivered
to Lessee expressly declaring a termination of this Lease. If Lessor maintains
Lessee's right to possession, Lessor may thereafter elect to terminate this
Lease.
13.2.3 Terminate this Lease and, in addition to any
recoveries Lessor may seek under Section 13.2.1, bring an action to reenter and
regain possession of the Premises in the manner provided by the Laws of unlawful
detainer of the State of Illinois then in effect.
13.2.4 Pursue any other remedy now or hereafter
available to Lessor under the Laws or judicial decisions of the State of
Illinois. Unpaid installments of rent and other unpaid monetary obligations of
Lessee under the terms of this Lease shall bear interest from the date due at
the interest rate set forth in Section 19 hereof.
13.3 DEFAULT BY LESSOR. Lessor shall not be in default
unless Lessor fails to perform obligations required of Lessor within thirty (30)
days after written notice by Lessee to Lessor and to the holder of any first
mortgage or deed of trust encumbering the Premises whose name and address shall
have theretofore been furnished to Lessee in writing, specifying wherein Lessor
has failed to perform such obligation; provided, however, that if the nature of
Lessor's obligation is such that more than thirty (30) days are required for
performance then Lessor shall not be in default if Lessor commences performance
within such thirty (30) day period and thereafter diligently prosecutes the same
to completion. In the event of a default by Lessor not cured within the period
set forth above, Lessee shall be entitled to all remedies available at law or
equity (except, if applicable, a right to cure the default).
13.4 LATE CHARGES. Lessee hereby acknowledges that late
payment by Lessee to Lessor of Base Rent or other sums due hereunder will cause
Lessor to incur costs not contemplated by this Lease, the exact amount of which
will be extremely difficult to ascertain. Such costs include, but are
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not limited to, processing and accounting charges, and late charges which may
be imposed on Lessor by the terms of any mortgage or trust deed covering the
Premises. Accordingly, if any installment of Base Rent or any other sum due
from Lessee shall not be received by Lessor or Lessor's designee within five
(5) days after such amount shall be due, then, without any requirement for
notice to Lessee, Lessee shall pay to Lessor a late charge equal to four
percent (4%) of such overdue amount. The parties hereby agree that such
charge by Lessor shall in no event constitute a waiver of Lessee's default
with respect to such overdue amount, nor prevent Lessor from exercising any
of the other rights and remedies granted hereunder. Notwithstanding the
foregoing, Lessor shall waive such late charge once in any twelve (12) month
period, provided Lessee pays any delinquent amounts within five (5) days
after written notice thereof.
13.5 CURE. If Lessee fails to pay any sum of money due
hereunder, or fails to perform any other act on its part to be performed
hereunder, then Lessor may, but shall not be obligated to, after passage of
any applicable notice and cure periods set forth in Section 13.1 hereof
(except in the case of an emergency, in which case no cure period is
required), make such payment or perform such act. All such sums paid, and all
reasonable costs and expenses of performing any such act, shall be deemed
Additional Rent payable by Lessee to Lessor upon demand.
14. CONDEMNATION. If the Premises or any portion thereof are
taken under the power of eminent domain, or sold under the threat of the
exercise of said power (collectively, "condemnation"), this Lease shall
terminate as to the part so taken as of the date the condemning authority
takes title or possession, whichever first occurs. If more than thirty-three
and one-third percent (33 1/3%) of the floor area of the Building, or more
than thirty three and one-third percent (33 1/3%) of that portion of the
Project designated as parking, is taken by condemnation, then Lessor, within
ten (10) days after the condemning authority shall have taken possession, may
elect to terminate this Lease as of the date the condemning authority takes
such possession by written notice given to Lessee. If a portion of the
Premises is taken by condemnation, such that Lessee's business in the
Premises cannot reasonably be continued therein in an economically rational
manner, in Lessee's reasonable judgment, then Lessee, within ten (10) days
after the condemning authority shall have taken possession, may elect to
terminate this Lease as of the date the condemning authority takes such
possession by written notice given to Lessor. If neither Lessor and Lessee so
elects to terminate this Lease, this Lease shall remain in full force and
effect as to the portion of the Premises remaining, except that the Base Rent
and Lessee's Share shall be adjusted based on the floor area of the Building
taken. Any award for the taking of all or any part of the Premises under the
power of eminent domain or any payment made under threat of the exercise of
such power shall be the sole property of Lessor, whether such award shall be
made as compensation for diminution in value of the leasehold or for the
taking of the fee, or as severance damages; provided, however, that Lessee
shall be entitled to any separate award for loss of or damage to Lessee's
trade fixtures and removable personal property, loss of good will, the
unamortized book value or cost (whichever is less) of the improvements made
to the Premises by Lessee at Lessee's sole cost and expense and relocation
costs. In the event that this Lease is not terminated by reason of such
condemnation and as permitted by applicable Law, Lessor shall repair any
damage to the Premises caused by such condemnation, except to the extent that
Lessee has been reimbursed therefor by the condemning authority. Lessor and
Lessee waive the provisions of any Laws relating to termination of leases in
the event of condemnation, and agree that the rights and obligations of the
parties in such event shall be governed by the terms of this Lease.
15. BROKER'S FEE. Lessor and Lessee each warrant and represent to
the other that no broker or finder have been engaged or used by it in connection
with this Lease or the Premises. Each party shall indemnify, defend and hold
harmless the other from all claims made by any broker or finder claiming by,
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through or under the indemnifying party. The warranties and representations
contained in this Section 15 shall survive the termination of this Lease.
16. ESTOPPEL CERTIFICATE.
16.1 Each of Lessor and Lessee shall at any time upon
not less than ten (10) days' prior written notice from the other execute,
acknowledge and deliver to the other a statement in writing (i) certifying
that this Lease is unmodified and in full force and effect (or, if modified,
stating the nature of such modification and certifying that this Lease, as so
modified, is in full force and effect) and the date to which the rent and
other charges are paid in advance, if any, (ii) acknowledging that there are
not any uncured defaults on the part of the signing party or, to the signing
party's actual knowledge, any uncured defaults on the part of the other party
or specifying such defaults if any are claimed and (iii) acknowledging any
other facts reasonably requested. Any such statement may be conclusively
relied upon by the party requesting the certificate and any prospective
purchaser or encumbrancer of the Premises or of the business of the
requesting party to the extent of the representations contained in such
statement.
16.2 If Lessor desires to finance, refinance, or sell
the Premises or the Project, or any part thereof, Lessee hereby agrees to
deliver to any lender or purchaser designated by Lessor such financial
statements of Lessee as may be reasonably required by such lender or
purchaser. Notwithstanding the foregoing to the contrary, if Lessee is a
public company having shares that trade on a national securities exchange,
Lessee shall only be required to deliver such financial statements that are
otherwise available to the public. Such statements shall include the past
three (3) years' financial statements of Lessee, if available. All such
financial statements shall be received by Lessor and such lender or purchaser
in confidence and shall be used only for the purposes herein set forth.
17. LESSOR'S LIABILITY. The term "Lessor" as used herein shall
mean only the owner or owners, at the time in question, of the fee title or a
lessee's interest in an underlying lease of the Premises, and in the event of
any transfer of such title or interest, the Lessor herein named (and in case
of any subsequent transfers, then the grantor) shall be relieved from and
after the date of such transfer of all liability as respects Lessor's
obligations thereafter to be performed by Lessor under this Lease, provided
that any funds held by Lessor or the then transferor at the time of such
transfer under the provisions of this Lease shall be delivered to the
transferee and that such transferee assumes in full the obligations of the
"Lessor" under this Lease which are to be performed from and after the
effective date of the transfer. The obligations contained in this Lease to be
performed by Lessor shall, subject as aforesaid, be binding on Lessor's
successors and assigns, only during their respective periods of ownership.
Notwithstanding any provision of this Lease to the contrary, Lessor's
liability under this Lease shall be limited to the lesser of Five Million
Dollars ($5,000,000) and Lessor's interest in the Project (including, but not
limited to, insurance and condemnation proceeds and any proceeds derived from
the sale of the Project or any portion of the Project), subject to the prior
rights of any mortgagee or holder of a deed of trust encumbering the Project
or any portion thereof and subject to any lessor's rights under a leasehold
interest in the Project or any part thereof, if any, for the collection of
any judgment (or other judicial process) requiring the payment of money by
Lessor in the event of any default by Lessor with respect to any of the
terms, covenants and conditions of this Lease to be observed or performed by
Lessor, and no other asset of Lessor shall be subject to any levy, execution
or other process for the satisfaction of Lessee's remedies under this Lease.
No officer, director, administrator, employee, agent, or attorney of Lessor
shall be personally liable for any default of Lessor under this Lease.
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18. SEVERABILITY. The invalidity of any provision of this Lease
as determined by a court of competent jurisdiction shall in no way affect the
validity of any other provision hereof.
19. INTEREST ON PAST-DUE OBLIGATIONS. Any amount due to Lessor
not paid within thirty (30) days of when due shall bear interest at the
lesser of a floating rate equal to the "prime" or "reference" rate of Bank of
America, N.T. & S.A., in effect from time to time plus two percent (2%), or
the maximum rate than allowable by Law, from the date such amount is due
until such amount is received by Lessor. Payment of such interest shall not
excuse or cure any default by Lessee under this Lease; provided, however,
that interest shall not be payable on late charges incurred by Lessee.
20. TIME OF ESSENCE. Time is of the essence with respect to the
obligations to be performed under this Lease.
21. INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS. This Lease
and the Asset Purchase Agreement contain all agreements of the parties with
respect to the leasing of the Premises. No prior or contemporaneous agreement
or understanding pertaining to any such matter shall be effective. This Lease
may be modified in writing only, signed by the parties in interest at the
time of the modification. Except as otherwise stated in this Lease, Lessee
hereby acknowledges that neither Lessor nor any employee or agents of any of
said persons has made any oral or written warranties or representations to
Lessee relative to the terms of this Lease or the condition or use by Lessee
of the Premises.
22. NOTICES. Any notice required or permitted to be given
hereunder shall be in writing and may be given by personal delivery,
overnight courier or certified mail and if so given, shall be deemed
sufficiently given if addressed to Lessee or to Lessor at the address noted
below the signature of the respective parties, as the case may be. Either
party may by notice to the other specify a different address for notice
purposes. A copy of all notices required or permitted to be given to Lessor
hereunder shall be concurrently transmitted to such party or parties at all
such addresses as Lessor may from time to time hereafter designate by notice
to Lessee. Notice shall be deemed effective upon receipt or refusal of
receipt as shown on the return receipt.
23. WAIVERS. No waiver by Lessor of any provision hereof shall
be deemed a waiver of any other provision hereof or of any subsequent breach
by Lessee of the same or any other provision. Lessor's consent to, or
approval of, any act shall not be deemed to render unnecessary the obtaining
of Lessor's consent to or approval of any subsequent act by Lessee. The
acceptance of rent hereunder by Lessor shall not be a waiver of any preceding
breach of Lessee of any provision hereof, other than the failure of Lessee to
pay the particular rent so accepted, regardless of Lessor's knowledge or such
preceding breach at the time of acceptance of such rent.
24. RECORDING. This Lease shall not be recorded by either
Lessor or Lessee, but each agrees upon request of the other to execute and
deliver a memorandum of lease stating the term hereof and describing the
Premises (which the requesting party may record in the applicable public
records).
25. HOLDING OVER. If Lessee, without Lessor's consent, remains
in possession of the Premises or any part thereof after the expiration of the
Term hereof, such occupancy shall be a tenancy at sufferance only upon all
the provisions of this Lease pertaining to the obligations of Lessee, except
that Base Rent shall be increased to an amount equal to two hundred percent
(200%) of the greater of (i) fair market rent for the Premises or (ii) the
Base Rent paid during the last month of the Term, and an[nb]y other sums due
hereunder shall be due and payable in the amount and at the time specified in
this Lease. Lessee shall indemnify, defend, protect and hold harmless Lessor
from and against any and all losses,
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costs, liabilities, claims, and damages as a result of such holding over,
including related to any succeeding lessee or due to business interruption,
lost profits or operational inefficiencies related to Lessor's own
operations, as the result of the failure of Lessee to surrender the Premises
in the condition required by this Lease upon the expiration or sooner
termination of the Term of this Lease.
26. CUMULATIVE REMEDIES. No remedy or election hereunder shall
be deemed exclusive but shall, wherever possible, be cumulative with all
other remedies at law or in equity.
27. FURNITURE. During the Term, Lessee shall have the right, at
no additional charge, to use the furniture and equipment located in the
Premises and listed on EXHIBIT F hereto (the "Furniture"). Lessee shall
maintain the Furniture in good order and repair, and shall not remove the
Furniture from the Premises. Lessee shall surrender the Furniture in the same
condition as received, reasonable wear and tear excepted, on the expiration
of the Lease or the earlier termination of the Term.
28. BINDING EFFECT; CHOICE OF LAW. Subject to any provision
hereof restricting assignment or subletting by Lessee and subject to the
provisions of Section 17, this Lease shall bind the parties, their personal
representatives, successors and assigns. This Lease shall be governed by the
Laws of the State of Illinois and any litigation concerning this Lease
between the parties hereto shall be initiated in the County of Xxxx, Illinois.
29. SUBORDINATION.
29.1 Provided Lessee receives a nondisturbance
agreement in commercially reasonable form, this Lease and the rights of
Lessee hereunder, shall be subordinate to any ground lease, mortgage, deed of
trust, or any other hypothecation or security now or hereafter placed upon
the Project or any portion thereof and to any and all advances made on the
security thereof and to all renewals, modifications, consolidations,
replacements and extensions thereof. Notwithstanding such subordination,
Lessee's right to quiet possession of the Premises shall not be disturbed if
Lessee is not in default beyond any applicable notice and cure period and so
long as Lessee shall pay the rent and observe and perform all of the terms
and provisions of this Lease within applicable notice and cure periods,
unless this Lease is otherwise terminated pursuant to its terms. If any
mortgagee, trustee or ground lessor shall elect to have this Lease prior or
superior to the lien of its mortgage, deed of trust or ground lease, and
shall give written notice thereof to Lessee, this Lease shall be deemed prior
to such mortgage, deed of trust or ground lease, whether this Lease is dated
prior to or subsequent to the date of said mortgage, deed of trust or ground
lease or the date of recording thereof.
29.2 Lessee agrees to execute any documents required to
effectuate an attornment, a subordination or to make this Lease prior to the
lien of any mortgage, deed of trust or ground lease, as the case may be;
provided that any holder of any mortgage, deed of trust or similar security
instrument or any ground lessor shall agree in writing that in the event any
mortgage, deed of trust or security instrument is foreclosed or a conveyance
in lieu of foreclosure is made, or any ground lease or underlying lease
terminates, Lessee's quiet enjoyment and possession of the Premises and other
rights under this Lease shall not be disturbed so long as Lessee is not in
default under the terms and provisions of this Lease beyond any applicable
notice and cure period and subject to any standard exclusions to Lessee's
rights under the Lease which any holder or any ground lessor may require in
such writing. Notwithstanding the foregoing, as a condition to Lessee's
obligation to subordinate its leasehold interest to a ground lease or
instrument of security, Lessor shall obtain from any such ground lessors or
lenders such a recognition agreement.
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30. HAZARDOUS MATERIALS.
30.1 USE OF HAZARDOUS MATERIALS. During the Term of
this Lease, Lessee shall not generate, handle, place, store, or use, or
permit (either knowingly or as the result of the negligence of Lessee) its
agents, employees, contractors or invitees to generate, handle, store,
dispose or use Hazardous Materials (defined below) in, on, about, or under
the Premises or the Project, in violation of any Law. Lessee shall not, and
shall not permit its agents, employees, contractors or invitees to, dispose
of, discharge or release any Hazardous Materials in, on or about the Premises
or the Project or any adjoining property, or into the air above, or the
ground or groundwater below, the Premises or the Project or any adjoining
property in violation of any Laws. Lessee's use of Hazardous Materials at the
Premises shall conform to standards and practices at least as prudent as
those currently observed by Lessor at the Premises.
30.2 INDEMNIFICATION. Lessee hereby indemnifies, and
agrees to protect, defend and hold Lessor harmless from and against all
liability, costs, claims, judgments, fines, penalties, sanctions, losses,
demands, causes of action, proceedings or hearings, including Lessor's
reasonable attorneys' fees, court costs, and the costs of clean up and
remediation arising out of or relating to Lessee's or its agents',
employees', contractors' or invitees' generation, handling, placement,
discharge, release, storage, disposal, or use of Hazardous Materials on or
about the Premises or the Project during the Term of this Lease. Lessee's
indemnification obligations in the previous sentence shall include, but not
be limited to, for (a) all losses in or reductions to rental income or value
of the Premises and/or the Project resulting from the discharge, release, or
disposal of Hazardous Materials on or about the Premises or the Project by
Lessee or its agents, employees, contractors or invitees during the Term of
this Lease; (b) all costs of cleanup or other alterations to the Premises or
the Project necessitated by the generation, handling, placement, discharge,
release, storage, disposal, or use of Hazardous Materials by Lessee or its
agents, employees, contractors or invitees on or about the Premises or the
Project during the Term of this Lease, including, but not limited to, all
civil and criminal fines, penalties and sanctions; and (c) all reasonable
attorneys' fees and court costs incurred by Lessor in connection with the
discharge, release, or disposal of Hazardous Materials by Lessee or its
agents, employees, contractors or invitees on or about the Premises or the
Project during the Term of this Lease. Lessee shall, with the approval of
Lessor, which shall not be unreasonably withheld or delayed, perform
(consistent with commercial/industrial standards) any and all clean-up,
remediation, or other action required by an governmental agency or entity to
the extent arising out of the generation, handling, placement, discharge,
release, storage, disposal or use of Hazardous Materials by Lessee or its
agents, employees, contractors or invitees in, on or about the Premises or
Project or any adjoining property.
30.3 HAZARDOUS MATERIALS DOCUMENTS. Prior to making any
material modifications in Lessor's current Hazardous Materials management
practice or usage at the Premises, Lessee shall deliver to Lessor in writing (a)
a list of all Hazardous Materials which Lessee proposes to generate, handle,
store, dispose of, or otherwise use in, on or about the Premises, including the
proposed quantities of each Hazardous Material, the proposed location for the
storage of each Hazardous Material and the proposed method for storage and
security of each Hazardous Material, (b) copies of all governmental permits,
authorizations, approvals and consents required with respect to the proposed
generation, handling, storage, or use of Hazardous Materials by Lessee in, on or
about the Premises, or the disposal of Hazardous Materials by Lessee, (c) any
Hazardous Materials management plan required to be prepared by Lessee with
respect to Lessee's generation, handling, storage, or use of Hazardous Materials
in, on or about the Premises, or the disposal of Hazardous Materials by Lessee,
and (d) the methods proposed by Lessee for the transportation and disposal of
Hazardous Materials generated, handled, stored, or used (or the wastes or
by-products of Lessee's operations) in, on or about the Premises, including the
names,
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addresses and telephone numbers of the licensed transportation and disposal
contractors proposed to be used by Lessee. Lessee shall give Lessor written
notice, and obtain Lessor's approval, which shall not be unreasonably
withheld, conditioned or delayed, prior to bringing onto the Premises any
Hazardous Materials which are not listed on the list of Hazardous Materials
previously provided to Lessor or prior to materially increasing the quantity
of any Hazardous Materials generated, handled, stored or used in, on or about
the Premises, together with the additional information described above.
Lessee shall provide to Lessor updated information regarding any changes to
Lessee's generation, handling, storage, disposal, and use of Hazardous
Materials upon the written request of Lessor.
30.4 NOTICES. Either party shall promptly after receipt
thereof deliver to the other party a copy of any notice received by such
party from any governmental agency or entity proposing or threatening
remedial action or alleging a violation of any Law relating to the physical
or environmental condition of the Premises including, but not limited to, any
alleged generation, handling, placement, discharge, release, storage,
disposal, or use of Hazardous Materials in, on or about the Premises, the
Project or any adjoining property.
30.5 ENVIRONMENTAL ASSESSMENTS. Lessee shall have the
right to review all related environmental information reasonably available to
Lessor or its consultants and perform a "Phase 1" environmental assessment of
the Building. Lessee shall not perform any soil, groundwater or other testing
or invasive procedures without Lessor's consent, which may be withheld in
Lessor's sole discretion (unless such testing or invasive procedure is
reasonably necessary to allow Lessee to make Alterations or Installations in,
on, or about the Premises pursuant to the provisions of this Lease or as
required by applicable Laws, in which case Lessor's consent shall not be
unreasonably conditioned, withheld or delayed). Any such assessments shall be
performed pursuant to a plan approved by Lessor. Lessor shall have the right
to have Lessor's environmental consultant inspect the Premises upon prior
notice as provided in Section 32 ("Environmental Inspection"). In the event
such Environmental Inspection determines that Lessee has caused a release of
Hazardous Materials in violation of applicable Laws, or contamination of the
Premises or Project which could reasonably require remediation under
applicable Laws, Lessee shall reimburse to Lessor the reasonable cost charged
by such environmental consultant in performing the Environmental Inspection.
The results of any environmental assessments performed by either party
hereunder shall be held confidential (except as may be required by Law).
30.6 DEFINITION. As used herein, the term "Hazardous
Materials" means any substance, material, waste, chemical, mixture or
compound which: (a) is flammable, ignitable, radioactive, hazardous, toxic,
corrosive or reactive, and which is regulated because of such a
characteristic under Law or by a public entity, (b) is a "Hazardous
Substance" as defined or listed under the federal Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (CERCLA), or any regulations
promulgated thereunder, as amended, (c) is crude oil, petroleum, natural gas,
or distillates or fractions thereof, and/or (d) damages or threatens to
damage health, safety, or the environment, or is required by any Law or
public entity to be remediated, including remediation which such Law or
public entity requires in order for property to be put to any lawful purpose.
31. ATTORNEYS' FEES. In the event of any dispute between the
parties arising under this Lease, or the breach of any covenant or condition
under this Lease, then the prevailing party shall be entitled to have and
recover from the party not so prevailing, the prevailing party's reasonable
costs and reasonable attorneys' fees incurred in any dispute, collection or
attempted collection, negotiation relative to the obligations contained
herein, or action or proceeding brought to enforce this Lease, whether such
costs and fees are incurred in taking any action under this Lease or in any
judicial proceeding (including appellate proceeding). "Prevailing party" for
the purposes of this Section 31 shall include, without
25
limitation, the party who receives from the other party the sums allegedly
due, performance of the covenants allegedly breached, consideration
substantially equal to that which was demanded, or substantially the relief
or consideration sought, whether or not any judicial proceeding is commenced
or prosecuted to final judgment, or a party who dismisses a judicial action
in return for substantially the performance or relief sought or in the
payment of the sums allegedly due.
32. LESSOR'S ACCESS. Upon not less than twenty-four (24) hours'
prior notice to Lessee, except in the event of an emergency in which event no
notice shall be required, Lessor and Lessor's agents shall have the right to
enter the Premises at all reasonable times for the purpose of inspecting the
same, showing the same to prospective purchasers, lenders, or lessees, and
making such alterations, repairs, improvements or additions to the Premises
of which they are part as Lessor may deem reasonably necessary or desirable.
Lessor may place on or about the Premises any ordinary "For Sale" or "For
Lease" signs (provided, Lessor shall only place "For Lease" signs on the
Premises during the last six (6) months of the Term or during any period
after an Event of Default has occurred). All reasonable activities of Lessor
pursuant to this paragraph shall be without abatement of rent, nor shall
Lessor have any liability to Lessee for the same. In the event of an
emergency, Lessor and Lessor's agents shall have the right to enter upon the
Premises by any means including, but not limited to, forcible entry. In
exercising such right of entry, Lessor shall use reasonable efforts to
minimize any interference with the business operations of Lessee on the
Premises occasioned by any such entry and shall comply with Lessee's
reasonable security measures, including measures intended to preserve the
confidentiality obligations of Lessee to its customers.
33. SIGNS. Lessee, at its sole cost and expense, may place a
reasonable monument sign close to Lessee's main entrance and reasonable
directional signs on the Project, subject to the approval of the applicable
governmental authorities and Lessor's reasonable approval. Under no
circumstances shall Lessee place a sign on any roof of the Building. All of
Lessee's signs shall comply with the requirements of the covenants,
conditions and restrictions of record and the requirements of the applicable
governmental authorities. All sign(s) shall be removed by Lessee and the
Project restored, at the sole cost and expense of Lessee, upon the expiration
or sooner termination of the Term of this Lease.
34. MERGER. The voluntary or other surrender of this Lease by
Lessee or a mutual cancellation thereof, or a termination by Lessor, shall
not work a merger, and shall, at the option of Lessor, terminate all or any
existing subtenancies or may, at the option of Lessor, operate as an
assignment to Lessor of any or all of such subtenancies. If the fee and
leasehold estate are both held by Lessee, that would not result in a merger
of those estates.
35. EASEMENTS. Lessor reserves to itself the right, from time
to time, to grant such easements, rights and dedications that Lessor deems
necessary or desirable, and to cause the recordation of parcel maps and
restrictions, so long as such easements, rights, dedications, maps and
restrictions do not materially interfere with the use or access to of the
Premises by Lessee as permitted under this Lease or materially increase
Lessee's obligations or decrease Lessee's rights hereunder.
36. AUTHORITY. If either party is a corporation, trust, or
general or limited partnership, such entity represents and warrants that the
individual executing this Lease on its behalf is duly authorized to execute
and deliver this Lease on behalf of said entity.
37. OFFER. Preparation of this Lease by Lessor or Lessor's
agent and submission of same to Lessee shall not be deemed an offer to lease.
This Lease shall become binding upon Lessor and Lessee only when fully
executed and delivered by Lessor and Lessee.
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Confidential Materials omitted and filed with the Securities and Exchange
Commission. Asterisks denote omissions.
38. INTERPRETATION. This Lease has been reviewed by both
parties and their respective legal counsel and this Lease shall be construed
as a whole according to its fair meaning, and not strictly for or against
either Lessor or Lessee. Whenever this Lease requires an approval, consent,
selection or judgment by either Lessor or Lessee, unless another standard is
expressly set forth, such approval, consent, selection or judgment and any
conditions imposed thereby shall be reasonable and shall not be unreasonably
withheld or delayed.
39. OCCUPANCY DURING COHABITATION PERIOD. Notwithstanding
anything to the contrary herein, the parties acknowledge that (a) the
Premises are not currently separately demised from the remainder of the
Building, (b) Lessee's employees and personal property are not currently
located entirely within the Premises, (c) it is the intention of the parties
that Lessor perform certain Improvements (defined below) to separate the
Premises from the remainder of the Building, the cost of which will be paid
by the parties as described below, (d) to facilitate the construction and
related separation of Lessor's and Lessee's employees, functions and
operations, by the date that is set forth in the schedule attached hereto as
EXHIBIT L, as reasonably updated by Lessor from time to time (the
"Cohabitation Schedule"), Lessee shall move (at Lessee's sole cost, subject
to the possible application of the Allowance as set forth below) its
employees, personal property and equipment into the Premises and (e) until
such time, Lessee will occupy the Premises and certain other portions of the
Building (such other portions are referred to as the "Temporary Premises") on
the terms set forth in this Section 39. Notwithstanding anything to the
contrary herein, the parties agree that from the period commencing on the
Commencement Date and ending on the last day of the calendar month in which
the Improvements are Substantially Complete (the "Cohabitation Period"), (i)
the term Premises as used herein shall instead refer to the Cohabitation
Premises shown on EXHIBIT G hereto (the "Cohabitation Premises"), (ii)
instead of paying Base Rent and Operating Expenses as set forth in Sections
4.1 and 4.3 hereof, Lessee shall pay Lessor as rent for the Cohabitation
Premises for each month during the Cohabitation Period **** per month, on the
first (1st) day of each month of the Cohabitation Period, (iii) the interior
Common Areas shall refer to the common areas shown on EXHIBIT G hereto, (iv)
Lessee may use the Temporary Premises only for the uses made of the Temporary
Premises by Lessor prior to the Commencement Date, (v) the references in the
first sentence of Section 7.3.1, Sections 9.2.2, 9.3, 9.10 and the second and
third sentences of Section 14 to Premises shall not refer to the Temporary
Premises and (vi) Section 27, the first two sentences of Section 7.2 and the
last sentence of Section 11 shall not apply. Lessor shall notify Lessee at
least five (5) business days prior to Substantial Completion of the
Improvements. Lessee's failure to vacate and surrender the Temporary Premises
within the later of (i) five (5) business days after the delivery of Lessor's
notice or (ii) the time period in the Cohabitation Schedule shall constitute
a default under this Lease and a holding over only with respect to that
portion of the Temporary Premises which Lessee fails to thereby vacate as
described in Section 25 hereof (excluding the last sentence of Section 25),
provided however that Lessee shall not be in default for any failure to
timely vacate which arises as a result of Lessor's failure to complete
construction of the Improvements in a timely manner as required by the
Cohabitation Schedule or to perform any of Lessor's other obligations under
this Section 39. Following any vacation of any portion of the Temporary
Premises as provided above, the term "Cohabitation Premises" shall no longer
include such portion of the Building. During the Cohabitation Period, the
following provisions shall also be applicable:
39.1 FURNITURE. During the Cohabitation Period, Lessee
shall also have the right to use the office furniture and equipment located
in the Temporary Premises as of the Commencement Date. Lessee shall maintain
such furniture and equipment in good order and repair, and shall not remove
such furniture or equipment from the applicable Temporary Premises. Lessee
shall surrender such furniture and equipment upon Lessee's vacation of the
Temporary Premises.
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39.2 NOT DEMISED. Notwithstanding anything to the
contrary herein, Lessee shall have no right to enter, and shall prevent its
employees, agents, contractors, licensees and invitees from entering,
portions of the Building other than the Cohabitation Premises or the Common
Areas, including, without limitation, Lessor's main lobby except when
escorted by an employee of Lessor or such entry is otherwise expressly
authorized by Lessor. Similarly, except when escorted by an employee of
Lessee or such entry is expressly authorized by Lessee, or in connection with
performance of its obligations hereunder (but only to the extent necessary in
connection with such performance), or as otherwise permitted in this Lease,
Lessor shall have no right to enter, and shall prevent its employees, agents,
contractors, licensees and invitees from entering the Cohabitation Premises.
In addition to the parties' other rights and remedies hereunder, upon each
unauthorized entry by Lessor's or Lessee's employees, agents, contractors,
licensees or invitees, the party that failed to prevent its employee, agent,
contractor, licensee or invitee from committing such unauthorized entry shall
pay the other party Five Thousand Dollars ($5,000) within thirty (30) days of
written demand from the other party; provided, however, such penalty shall be
waived by each party the first such time an unauthorized entry occurs under
this Lease. The parties hereto acknowledge that the Cohabitation Premises are
not separately demised, and each party shall use commercially reasonable
efforts to prevent its agents, employees, contractors, invitees or licensees
from discovering or otherwise coming into contact with confidential
information of the other party. If, despite such efforts, any such
confidential information is discovered by a party, such party shall promptly
inform the other party of such discovery, and shall hold, and use reasonable
efforts to cause its employees, agents, contractors, invitees and licensees
to hold, such information confidential.
39.3 RULES. Lessee shall comply with all reasonable
rules and regulations promulgated from time to time by Lessor and provided to
Lessee in writing, including, without limitation, rules relating to security
and access within the Building and the Cohabitation Period Rules and
Regulations attached hereto as EXHIBIT X. Xxxxxx shall also comply with the
rules and regulations in Sections A and B of EXHIBIT H attached hereto as
such rules may be applicable to Lessor's use of the Building.
39.4 ALTERATIONS. No Alterations or Installations shall
be made to the Temporary Premises without the prior written consent of
Lessor, which consent shall not be unreasonably withheld or delayed. All work
performed in connection with such alterations shall comply with all Laws and
applicable requirements of insurance carriers, shall be performed at Lessee's
sole cost in a good and workmanlike manner and shall be managed by Lessor and
performed by a contractor designated by Lessor, at Lessee's sole cost. Lessee
shall pay all reasonable, out of pocket, third party costs, and expenses
Lessor incurs in reviewing the plans for and managing the construction of the
Alterations and Installations.
39.5 SERVICES. Lessor shall provide to the Cohabitation
Premises, as part of rent for the Cohabitation Period, janitorial service to
the office and manufacturing portions of the Cohabitation Premises and
electricity, water, sewer, gas (if provided on August 31, 2000) and heating,
ventilating and air conditioning and other utilities to the Cohabitation
Premises at the levels provided prior to the Commencement Date. Lessor shall
also provide, at Lessee's cost (which costs shall be paid by Lessee within
thirty (30) days of delivery of an invoice therefor) building maintenance
support services to the manufacturing line. In addition, Lessor shall provide
to Lessee the additional services described on EXHIBIT I hereto and Lessee
shall pay Lessor for such additional services in accordance with the terms
thereof. Lessor shall not, however, be liable for the interruption of any
such services or utilities for causes beyond Lessor's reasonable control.
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39.6 NON-PRODUCTION-RELATED RECEIVING. Lessee at
Lessee's sole cost shall provide receiving functions for Lessor's
non-production-related receiving and deliver such items to Lessor's mail room
in accordance with Lessor's current standards and procedures.
39.7 REPAIRS. Lessee shall maintain the Cohabitation
Premises in neat, orderly condition (but shall have no obligation with
respect to any Building systems) and shall repair any damage to the Building
caused by Lessee or its agents, employees, contractors or invitees. Lessee
shall also be responsible for maintaining its own equipment. Except for
obligations which are Lessee's responsibility pursuant to the preceding
sentences, Lessor shall maintain the Building and the Common Areas and
systems serving the Building in good, working order.
39.8 COMPETITORS. Lessee shall not bring into or permit
any employees or representatives of Cisco Systems, Nortel Networks,
Cabletron, Lucent or other company identified in writing to Lessee as a
competitor of Lessor to enter the Cohabitation Premises without prior written
notice to Lessor and compliance with Lessor's reasonable security measures,
including being accompanied by a representative of Lessor.
40. SEPARATION IMPROVEMENTS. Lessor shall construct the Lessor
Improvements and the Lessee Improvements, as defined below. As used herein,
the Lessor Improvements shall consist of (i) the construction of the demising
wall, (ii) the installation of the porta-fab offices and related utilities in
the east office area and (iii) the Building alterations required to relocate
the RMA and Cabinet Integration areas as described on EXHIBIT J.1 hereto. As
used herein, the Lessee Improvements shall consist of (a) upgrade of the east
entrance lobby and installation of the landscaping and other improvements to
the east entrance, including signage at such entrance, (b) the construction
of the computer room and (c) the construction of the engineering laboratory
as described on EXHIBIT J-2 hereto. The Lessor Improvements and the Lessee
Improvements shall be referred to herein collectively as the "Improvements".
The construction of the Improvements shall be performed in accordance with
the terms of this section.
40.1 PLANS. Lessor shall select and retain such
architects, space planners, and other design consultants as Lessor may elect
for the Improvements. Lessor shall also select the general contractor and all
subcontractors for the Improvements. The parties have agreed upon the general
description of the Improvements attached hereto as EXHIBIT J (the "Approved
Description").
(a) On or before that date that is ten (10)
business days after the Commencement Date, Lessee shall furnish to Lessor all
other information reasonably required by Lessor to complete preliminary plans
for the Lessor Improvements shown on the Approved Description of the Lessor
Improvements. As soon as reasonably practicable, Lessor shall prepare and
deliver to Lessee for its review and approval preliminary plans for the
Lessor Improvements as to the RMA and Cabinet Integration Areas which conform
to the Approved Description of the Lessor Improvements as to the RMA and
Cabinet Integration Areas (the "RMA Preliminary Plans"). Within five (5)
business days after Lessor's delivery of the RMA Preliminary Plans, Lessee
shall either approve such plans or notify Lessor in writing of its specific
objections to the RMA Preliminary Plans. Lessee shall have no right to make
any objections to the RMA Preliminary Plans that are inconsistent with the
Approved Description of the Lessor Improvements as to the RMA and Cabinet
Integration Area. If Lessee so objects, Lessor shall revise the RMA
Preliminary Plans to address such objections in a manner consistent with the
parameters for the Lessor Improvements set forth in this Lease and the
Approved Description of the Lessor Improvements and shall resubmit such
revised RMA Preliminary Plans based on such revised plans as soon as
reasonably practicable to Lessee for its approval. When such revised RMA
Preliminary Plans are resubmitted to Lessee, it shall either approve such
plans or notify Lessor of any further objections in
29
writing within five (5) business days after receipt thereof. If Lessee has
further objections to the revised RMA Preliminary Plans, the parties shall
meet and confer to develop RMA Preliminary Plans that are acceptable to both
Lessor and Lessee within five (5) business days after Lessee has notified
Lessor of its second set of objections. In the event Lessee and Lessor do not
resolve all of Lessee's objections within such five (5) business day period,
Lessor and Lessee shall immediately cause Xxxx Xxxxxxxx and Xxxx Xxxxx (the
"Steering Committee") to meet and confer, who shall apply the standards set
forth in this Lease to resolve Lessee's objections, which process Lessor and
Lessee shall cause to be completed within five (5) business days after the
conclusion of the five (5) business day period referred to in the immediately
preceding sentence. Lessor shall prepare detailed plans and specifications
required to perform the Lessor Improvements in accordance with the Approved
Description for the Lessor Improvements and the RMA Preliminary Plans. No
further review or approval of Lessee shall be required with respect to the
plans for the Lessor Improvements. In the event that either member of the
Steering Committee is unavailable, Lessor or Lessee, as applicable, shall
immediately designate another employee of comparable or greater position
within the applicable organization.
(b) On or before that date that is ten (10)
business days after the Commencement Date, Lessee shall furnish to Lessor all
other information reasonably required by Lessor to complete preliminary plans
for the Lessee Improvements shown on the Approved Description of the Lessee
Improvements. As soon as reasonably practicable, after Lessee has delivered
all of the required information to Lessor, Lessor shall prepare and deliver
to Lessee for its review and approval preliminary plans for the Lessee
Improvements which conform to the Approved Description of the Lessee
Improvements (the "Lessee Improvement Preliminary Plans") and an estimate of
the total cost for the Lessee Improvements. Within five (5) business days
after Lessor's delivery of the Lessee Improvement Preliminary Plans, Lessee
shall either approve such plans and cost estimate or notify Lessor in writing
of its specific objections to the Lessee Improvement Preliminary Plans.
Lessee shall have no right to make any objections to the Lessee Improvement
Preliminary Plans that are inconsistent with the Approved Description of the
Lessee Improvements; provided, however, Lessee shall have the right to reduce
the scope of work and make changes to the finish levels, subject to Lessor's
reasonable approval. If Lessee so objects, Lessor shall revise the Lessee
Improvement Preliminary Plans to address such objections in a manner
consistent with the parameters for the Lessee Improvements set forth in this
Lease and the Approved Description of the Lessee Improvements and shall
resubmit such revised Lessee Improvement Preliminary Plans and a revised cost
estimate based on such revised plans as soon as reasonably practicable to
Lessee for its approval. When such revised Lessee Improvement Preliminary
Plans and cost estimate are resubmitted to Lessee, it shall either approve
such plans or notify Lessor of any further objections in writing within five
(5) business days after receipt thereof. If Lessee has further objections to
the revised Lessee Improvement Preliminary Plans, the parties shall meet and
confer to develop Lessee Improvement Preliminary Plans that are acceptable to
both Lessor and Lessee within five (5) business days after Lessee has
notified Lessor of its second set of objections. In the event Lessee and
Lessor do not resolve all of Lessee's objections within such five (5)
business day period, Lessor and Lessee shall immediately cause the Steering
Committee to resolve any disagreement in the manner set forth in Section
40.1(a) above.
(c) Once the Lessee Improvement Preliminary
Plans have been approved by Lessor and Lessee, Lessor shall complete and submit
to Lessee for its approval final working drawings for the Lessee Improvements;
provided, however, Lessor shall have no right to object to the final plans to
the extent they are consistent with the Lessee Improvement Preliminary Plans.
Lessee shall approve the final plans for the Lessee Improvements or notify
Lessor in writing of its specific objections within five (5) business days after
their submission by Lessor. If Lessee properly objects, the parties shall confer
and reach agreement upon final working drawings for the Lease within five (5)
business days after Lessee has
30
notified Lessor of its objections. In the event Lessee and Lessor do not
resolve all of Lessee's objections within such five (5) business day period,
Lessor and Lessee shall immediately cause the Steering Committee to resolve
any disagreement in the manner set forth in Section 40.1(a) above. The final
working drawings so approved by Lessor and Lessee (including all changes made
to resolve Lessee's objections) are referred to herein as the "Lessee
Improvement Final Plans".
40.2 CONSTRUCTION OF IMPROVEMENTS. Promptly following
the Commencement Date, completion and approval (if necessary) of the plans
for the Lessor Improvements or the Lessee Improvement Final Plans
(collectively herein, the "Plans") and receipt of all required governmental
approvals and permits, Lessor shall commence construction of the applicable
Improvements and shall diligently prosecute such construction to completion.
Lessor shall use diligent efforts to achieve Substantial Completion of the
Improvements within five (5) months following the Commencement Date, but
without any warranty or representation that such objective will be achieved
and without liability if Lessor fails to achieve such objective. Both parties
will use commercially reasonable efforts to complete the Improvements and
related separation as quickly as reasonably practicable.
40.3 IMPROVEMENT COSTS. Lessor shall be solely
responsible for the cost to construct the Lessor Improvements. The parties
acknowledge that, as of the date of execution of the Asset Purchase
Agreement, Lessor's very preliminary estimate of the Lessee Improvement Cost
(defined below) is approximately One Million One Hundred Thousand Dollars
($1,100,000). Lessor shall be obligated to pay an amount equal to Eight
Hundred Thousand Dollars ($800,000) for the payment of the Lessee Improvement
Costs, subject to the following. If the Lessee Improvement Costs exceed Eight
Hundred Thousand Dollars ($800,000), Lessee shall pay the entire amount of
such excess as follows: Lessor shall reasonably estimate the amount of such
excess prior to commencing construction of the Lessee Improvements and Lessee
shall pay to Lessor a proportionate share of each progress payment due to the
contractor or architect or for permits which bears the same relationship to
the total amount of the progress payment in question as to the amount Lessee
is obligated to contribute to the payment of Lessee Improvement Costs bears
to the total estimated Lessee Improvement Costs; provided, however, that
Lessor, not Lessee, shall be responsible for any costs to construct the
Lessee Improvements in excess of one hundred fifteen percent (115%) of the
difference between the final cost estimate approved by Lessee under Section
40.1(b) and the Allowance, except to the extent required due to changes
requested by Lessee after the final cost estimate is approved under Section
40.1(b). Lessee shall pay Lessee's share of any progress payment to Lessor
within thirty (30) days after receipt of a statement therefor from Lessor.
Supporting invoices will be provided by Lessor upon request. At the time the
final accounting is rendered by Lessor, there shall be an adjustment between
Lessor and Lessee such that each shall only be required to contribute to the
payment of Lessee Improvement Costs in accordance with the obligations set
forth herein, which adjustment shall be made within thirty (30) days after
Lessor notifies Lessee of the required adjustment. There shall be no rent
credit or other refund or credit in the event that any portion of the
Allowance is not used by Lessee as permitted hereunder. Lessee's failure to
pay such amounts within such period shall be a default hereunder and (a)
Lessor may (but without the obligation to do so) cease construction of the
Improvements until such amounts are paid and/or advance such funds on
Lessee's behalf, and Lessee shall be obligated to reimburse Lessor the amount
of funds so advanced on its behalf, and (b) Lessee shall be liable for the
payment of a late charge and interest in the same manner as if Lessee had
failed to pay Base Rent when due. The term "Lessee Improvement Costs" means
all costs incurred by Lessor in performing the Lessee Improvements,
including, without limitation: (i) the amount due pursuant to the general
construction contract entered into by Lessor to construct the Lessee
Improvements; (ii) the cost of all governmental approvals required as a
condition to the construction of the Lessee Improvements or in connection
with the issuance of a building permit for the Lessee Improvements; (iii) all
utility connection or use fees; and (iv) fees of architects or cost of
payment and
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performance bonds obtained by Lessor or the general contractor to assure
completion of the Lessee Improvements. To the extent that Lessee Improvement
Costs are less than the Allowance, Lessee shall be entitled to use the unused
portion of the Allowance to pay for actual, out of pocket costs it incurs to
relocate its employees due to the interim relocations described in Section
40.8 hereof. In no event, however, shall the Allowance be used for personal
property or fixtures.
40.4 CHANGES TO LESSEE IMPROVEMENT FINAL PLANS. Once
the Lessee Improvement Final Plans have been approved by Lessor and Lessee,
neither shall have the right to order extra work or change orders with
respect to the construction of the Lessee Improvements without the prior
written consent of the other, which consent shall not be unreasonably
withheld. It shall be considered reasonable for either party to withhold
consent under this Section 40 if the other party requests special materials
or equipment that cannot be obtained by Lessor within the proposed
construction schedule. All extra work or change orders requested by either
Lessor or Lessee shall be made in writing, shall specify any added or reduced
cost and/or construction time resulting therefrom and shall become effective
and a part of the Lessee Improvement Final Plans once approved in writing by
both parties. If a change order requested by Lessee results in an increase in
the cost of constructing the Lessee Improvements, Lessee shall pay the amount
of such increase caused by the change order requested by Lessee if and to the
extent such change order causes the Lessee Improvement Costs to exceed the
Allowance within thirty (30) days after receipt of a statement therefor from
Lessor. If the parties are unable to agree upon the change within five (5)
business days, they shall immediately cause the Steering Committee to resolve
the disagreement in the manner set forth in Section 40.1(a) hereof.
40.5 SUBSTANTIAL COMPLETION. As soon as the
Improvements are Substantially Completed, Lessor and Lessee shall together
inspect all Improvements so completed, using reasonable efforts to discover
all uncompleted or defective construction in the Improvements. After such
inspection has been completed, each party shall sign an acceptance agreement
which shall include a list of all "punch list" items which the parties agree
are to be corrected by Lessor. Lessor shall use reasonable efforts to
complete and/or repair such "punch list" items within thirty (30) days after
executing the acceptance agreement. Notwithstanding anything contained
herein, the Improvements shall be deemed Substantially Complete so long as
the conditions described in the following sentence are met, regardless of
whether Lessee completes such inspection or executes such acceptance
agreement. The terms "Substantial Completion" and "Substantially Complete"
shall each mean the date when all of the following have occurred with respect
to the Improvements: (i) the construction of the Improvements has been
substantially completed in accordance with the requirements of this Lease;
(ii) the general contractor shall have executed a certificate or statement
representing that the Improvements have been substantially completed in
accordance with the Plans; subject in each case only to the correction of
"punch-list" items that do not materially interfere with Lessee's use or
occupancy of the Premises; and (iii) Lessor shall have obtained all
governmental approvals necessary to permit the use and occupancy of the
Premises by Lessee for the uses permitted hereunder.
40.6 STANDARD OF CONSTRUCTION. Lessor shall use
commercially reasonable efforts to cause the Improvements to be constructed
substantially in accordance with the Plans, all restrictive covenants and all
Laws, in a good and workmanlike manner. Except as set forth in Section 6.3,
Lessor makes no express or implied warranty with respect to the design,
construction or operation of the Improvements. Lessee shall, however, have
the benefit of any construction or equipment contracts or warranties existing
in favor of Lessor that would assist Lessee in correcting such defect and in
discharging its obligations regarding the repair and maintenance of the
Premises. Lessor shall cooperate with Lessee in enforcing such warranties and
in bringing any suit that may be necessary to enforce liability; and Lessee
and Lessor shall share equally all costs incurred in any such enforcement
action.
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40.7 CONSTRUCTION REPRESENTATIVE. Lessor hereby
appoints the following person as Lessor's representative ("Lessor's
Construction Representative") to act for Lessor in all matters related to the
construction of the Improvements and the related relocations: Xxxx Xxxxx.
Lessee hereby appoints the following person as Lessee's construction
representative ("Lessee's Construction Representative") to act for Lessee in
all matters the construction of the Improvements (including, without
limitation, approvals of the Lessee Improvement Preliminary Plans and Final
Plans, change orders and cost estimate) and the related relocations: Xxxxxx
Xxxxx. Notwithstanding the foregoing, with respect to approvals of the cost
estimate, Lessee Improvement Preliminary Plans and Final Plans and change
orders in excess of Ten Thousand Dollars ($10,000), Lessee's Construction
Representative shall deliver, together with any approvals or proposed changes
thereto, the written concurrence of Lessee's member of the Steering
Committee. All communications with respect to the matters covered by this
section are to be made to Lessor's Construction Representative or Lessee's
Construction Representative, as the case may be, in writing in compliance
with the notice provisions of the Lease. Either party may change its
representative at any time by written notice to the other party in compliance
with the notice provisions of this Lease. Lessor shall invite Lessee's
Construction Representative to attend all of Lessor's regular project team
meetings with respect to the construction of the Improvements.
40.8 RELOCATIONS TO COMPLETE CONSTRUCTION. To the
extent necessary in connection with the construction of the Improvements
(including prior to construction of the Improvements), Lessor shall have the
right to relocate (at Lessee's sole cost, subject to the possible use of the
Allowance as described above) portions of the Cohabitation Premises to other
reasonable spaces in the Building or other portions of the Cohabitation
Premises after consultation with Lessee as to the timing and nature of the
relocation; provided that (i) Lessor shall use commercially reasonable
efforts to accomplish the construction and separation in the most efficient
manner, and to minimize any relocations and any disruption to Lessee,
Lessee's business and Lessee's operations at the Cohabitation Premises and
(ii) both parties will effectuate any required relocations within the time
periods reasonably established by Lessor and use commercially reasonable
efforts to complete the construction work and related separation as quickly
as reasonably practicable. Provided Lessor has complied with the foregoing
sentence, Lessee shall have no right to claim an abatement of any rentals
(except in connection with a casualty) or make other claims due to such
construction or relocation, except as provided in the following section and
except for any damage due to the gross negligence or willful misconduct of
Lessor or its representatives. During the period of such relocation, the term
"Cohabitation Premises" shall include the relocated premises, and "Temporary
Premises" shall include such relocated premises that will not, after the
Cohabitation Period, be part of the Premises, rather than the portion of the
Building from which Lessee was relocated.
41. FINANCING MODIFICATION. If in connection with obtaining
financing or entering into a synthetic lease or sale-leaseback for the
Project or any portion thereof, any Lender (defined below) shall request
commercially reasonable modifications to this Lease as a condition thereto
such financing, Lessee shall not unreasonably withhold or delay its consent
thereto, provided such modifications do not adversely affect Lessee's use of
the Premises or materially increase Lessee's obligations or materially
decrease Lessee's rights hereunder, and provided Lessor shall have reimbursed
Lessee for Lessee's reasonable legal expenses incurred in connection
therewith, up to a maximum of Five Thousand Dollars ($5,000). The term
"Lender" shall mean any beneficiary, mortgagee, secured party, lessor, or
other holder of any underlying lease, mortgage or deed of trust which now or
hereafter affects the Project.
42. SUPPLY AGREEMENT. If Lessee takes any action or fails to take
any action, or any circumstance exists, that would permit Lessor to terminate
that certain Supply Agreement dated September 30, 2000 (the "Supply Agreement")
between Lessor and Lessee, as described in Section 18 of
33
Confidential Materials omitted and filed with the Securities and Exchange
Commission. Asterisks denote omissions.
the Supply Agreement, and Lessor has rightfully terminated the Supply
Agreement (which termination, in the event that Lessee disputes such
termination in writing within ten (10) business days, shall be determined by
a final order of a court of competent jurisdiction), (a) Base Rent hereunder
shall immediately be increased to **** (b) the last two sentences of Section
4.3(d) shall no longer apply and (c) Lessee shall immediately pay Lessor the
unamortized amount Lessor has expended or must expend in performing the
Lessor Improvements and the Lessee Improvements (which Lessor currently
estimates will be approximately Two Million Two Hundred Fifty Thousand
Dollars ($2,250,000)), which amount shall be amortized on a straight line
basis over the three (3) year Term of the Lease.
43. LEASEHOLD MORTGAGE.
43.1 DEFINITIONS. Any first mortgage of Lessee's
leasehold estate under this Lease is hereinafter referred to as "Leasehold
Mortgage." Any holder of a Leasehold Mortgage is hereinafter referred to as
"Leasehold Mortgagee."
43.2 NOTICE TO THE LANDLORD. The provisions of this
Section 43 shall not apply in favor of Leasehold Mortgagee unless and until
Leasehold Mortgagee (a) has duly recorded its mortgage in the public office
where such recording may be required in order to charge third persons with
knowledge thereof and (b) has given written notice to Lessor stating
Leasehold Mortgagee's name and address and including a true and correct copy
of the Leasehold Mortgage.
43.3 NOTICE TO LEASEHOLD MORTGAGEES. Lessor, upon
giving Lessee any notice of default under this Lease, shall simultaneously
give a copy of such notice to Leasehold Mortgagee in the same manner provided
by this Lease for the giving of notices to Lessee. No notice by Lessor to
Lessee shall be deemed to have been given unless and until Lessor has
delivered such notice to Leasehold Mortgagee.
43.4 RIGHT OF LEASEHOLD MORTGAGEE TO CURE DEFAULT BY
TENANT. Leasehold Mortgagee shall have the right to cure any default by
Lessee for the same period after receiving notice of such default from the
Lessor as Lessee has after notice to it, plus (a) ten (10) additional days as
to a monetary default and (b) thirty (30) additional days as to a
non-monetary default; provided, however, if the nature of such non-monetary
default requires possession of the Premises to cure the default, Leasehold
Mortgagee shall have an additional fifteen (15) days (for a total of
forty-five (45) additional days), so long as Leasehold Mortgagee is
attempting to have a receiver appointed or to foreclose upon the Premises.
Lessor shall accept a cure performed within such period by Leasehold
Mortgagee as though the cure had been done or performed in a timely fashion
by Lessee.
43.5 LEASEHOLD MORTGAGEE'S OPPORTUNITY TO FORECLOSE.
Lessor shall take no action to terminate this Lease without first giving
Leasehold Mortgagee a notice of default as set forth above.
43.6 NO MODIFICATION. This Lease may not be modified
without the written consent of Leasehold Mortgagee, which consent shall not
be unreasonably withheld or delayed. In addition, Lessor and Lessee shall not
agree to voluntarily cancel or surrender the Lease, except as permitted under
the terms of this Lease, without the written consent of Leasehold Mortgagee.
43.7 LESSOR WAIVER/SUBORDINATION. Lessor agrees to
enter into such commercially reasonable subordination agreements with respect
to liens on Lessee's personal property, trade fixtures and equipment as may
be requested from any lender of equipment lessor of Lessee.
34
43.8 EVENT OF DEFAULT. Notwithstanding Section
13.1.3(c) of the Lease, Leasehold Mortgagee's appointment of a receiver to
take possession of substantially all of Lessee's assets located at the
Premises or of Lessee's interest in the Lease shall not constitute an Event
of Default.
43.9 ASSIGNMENT OF LEASE. If Leasehold Mortgagee
forecloses under the Leasehold Mortgage, Leasehold Mortgagee shall have the
right to assign the Lease as provided in Section 12, provided, however, that
the phrase "may be withheld in Lessor's sole discretion" in the fifth (5th)
line of Section 12 shall, as to any such assignment, be changed to "shall not
be unreasonably withheld." Lessor shall be entitled to reasonably withhold
consent to an assignment to an entity that Lessor reasonably considers to be
a competitor.
44. ATTACHMENTS. Attached to this Lease and made a part hereof are
the following:.
Exhibit A - Premises, Including Common Areas
Exhibit B - Project, Including Lessee's Designated Parking Area
Exhibit C - Rules and Regulations
Exhibit D - Security and Safety Systems and Equipment
Exhibit E - Security Patrol Description
Exhibit F - Furniture
Exhibit G - Cohabitation Premises
Exhibit H - Cohabitation Period Rules and Regulations
Exhibit I - Cohabitation Period Additional Services
Exhibit J - Description of Separation Improvements
Exhibit K - Cohabitation Schedule
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM
AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY
REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH
RESPECT TO THE PREMISES.
35
IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease to be
executed by their duly authorized representatives as of the day and year
first above written.
LESSOR:
3COM CORPORATION, a Delaware corporation
By: /s/ Xxxxx Xxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxx
-----------------------------------
Its: Senior Vice President
------------------------------------
Manufacturing Operations
------------------------------------
LESSOR'S ADDRESS FOR NOTICES AND RENT:
3Com Corporation
0000 Xxxxxxxx Xxxxx, Xxxx Xxxx 0000
Xxxxx Xxxxx, XX 00000
Attention: Real Estate Department
with a copy to:
3Com Corporation
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
Attention: Legal Department
LESSEE:
MANUFACTURERS' SERVICES SALT LAKE CITY OPERATIONS, INC.,
a Delaware corporation
By: /s/ Xxxx X. XxxXxxxx
-------------------------------------
Name: Xxxx X. XxxXxxxx
-----------------------------------
Its: Treasurer
------------------------------------
LESSEE'S ADDRESS FOR NOTICES:
c/o Manufacturers' Services Limited
-----------------------------------
000 Xxxxx Xxxxxx
-----------------------------------
Xxxxxxx, XX 00000
-----------------------------------
Attn: Legal Department
-----------------------------------
SCHEDULE 1
RULES FOR USE OF ACCESS CARDS
Today you are being issued a new identification badge (ID) as part of our
continuous security improvements at 3Com. This badge continues to provide the
visual reference that authorizes you to be within our facilities, but also
serves as a "key" that will allow you access to card reader controlled doors.
3Com has installed access control technology world wide utilizing these Casi
badges. This initiative is another step in keeping with Security's commitment
to provide a safer and more secure work environment for our employees and
visitors.
Your badge will ONLY act as a key on doors that you have been given
permission to use. This badge incorporates passive, no-battery technology
that merely requires that you hold the badge within six inches of the card
reader to unlock the door. Although the card is designed for durability and
flexibility, care should be used to prevent excessive bending or abuse that
may cause damage to the card.
Each person plays a part in ensuring the overall security of our facility. As
such, you have specific responsibilities that you must comply with in using
this system.
1. Do not allow others to use your card.
2. Remember to always keep your ID visibly displayed while on 3Com
property.
3. Report a lost, stolen, or damaged card immediately.
4. If a door is equipped with a card reader - use the reader to access. Do
not "prop" doors open to bypass the system. Assist Security by
reporting such circumstances if discovered.
5. A "Tailgater" is an individual without a badge who follows an employee
in or out of a door after that employee has used their card to access a
door. Tailgating is not allowed. Make sure a person who is following
you is a legitimate employee wearing an ID badge.
6. Visitors, contractors, and other vendors are required to sign in and
out and must be escorted while within company space at all times.
Visitor badges or temporary access badges will be made available to
Lessee by Lessor.
7. Facilities/Field offices are typically equipped with a sufficient
supply of visitor or contractor ID / Access badges, which allow access
into 3Com space during specific pre-programmed hours. These cards must
be controlled, numerically registered, signed in and out, and collected
at the end of the day by the receptionist.
8. Unknown persons or persons without ID badges within 3Com space should
be challenged. Unescorted visitors should always be challenged and
given assistance.
9. Access control activity reports will be generated and reviewed by local
security & safety designates at all facilities on a regular basis.
10. Upon termination of the Cohabitation Period, all 3Com issued
identification badges shall be returned to 3Com Security. A fee of
fifty dollars ($50.00) will be charged for each identification badge
that is not returned to 3Com Security.
If you experience any problems with your badge, contact
Security for assistance.
EXHIBIT I
COHABITATION PERIOD ADDITIONAL SERVICES
SECTION 1: SERVICES
1.1 SERVICES GENERALLY. To the extent required by Lessee,
Lessor shall provide or cause to be provided to Lessee the service(s)
described in SCHEDULE 1 attached hereto (the "Services"). The Services will
be available only for purposes of conducting the business of Lessee
substantially in the manner it was conducted prior to the Commencement Date.
1.2 IMPRACTICABILITY. Lessor shall not be required to provide
any Service to the extent the performance of such Service becomes
"Impracticable" as a result of a cause or causes outside the reasonable
control of Lessor including unfeasible technological requirements, or to the
extent the performance of such Services would require Lessor to violate any
applicable laws, rules or regulations or would result in the breach of any
software license or other applicable contract.
1.3 ADDITIONAL RESOURCES. In providing the Services, Lessor
shall not be obligated to: (i) hire any additional employees; (ii) maintain
the employment of any specific employee; (iii) purchase, lease or license any
additional equipment or software; or (iv) pay any costs related to the
transfer or conversion of Lessee's data to Lessee or any alternate supplier
of Services.
SECTION 2: COMPENSATION
Lessee shall pay Lessor the charges set forth in SCHEDULE 1 hereto
for the Services listed therein. Lessor shall xxxx Lessee monthly for all
such charges. Such bills shall be accompanied by reasonable documentation or
other reasonable explanation supporting such charges. Lessee shall pay Lessor
for all Services provided hereunder within thirty (30) days after receipt of
an invoice therefor.
SECTION 3: GENERAL OBLIGATIONS; STANDARD OF CARE
3.1 PERFORMANCE METRICS: LESSOR. Subject to Section 1.3 and any
other terms and conditions hereof, Lessor shall maintain sufficient resources
to perform its obligations hereunder. Lessor shall use reasonable efforts to
provide Services in accordance with the policies, procedures and practices in
effect before the Commencement Date and shall exercise the same care and
skill as it exercises in performing similar services for itself.
3.2 DISCLAIMER OF WARRANTIES. LESSOR MAKES NO WARRANTIES,
EXPRESS, IMPLIED OR STATUTORY, INCLUDING BUT NOT LIMITED TO THE IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH
RESPECT TO THE SERVICES.
3.3 PERFORMANCE METRICS: LESSEE. Lessee shall use reasonable
efforts, in connection with receiving Services, to follow the policies,
procedures and practices in effect before the Commencement Date including
providing information and documentation sufficient for Lessor to perform the
Services as they were performed before the Commencement Date and making
available, as reasonably requested by Lessor, sufficient resources and timely
decisions, approvals and acceptances in order that Lessor may accomplish its
obligations hereunder in a timely manner. Lessee must adhere to all
reasonable policies in effect for Lessor. All events held in the Temporary
Premises or the Common Area must receive the prior approval of Lessor's real
estate and site services department.
3.4 TRANSITIONAL NATURE OF SERVICES; CHANGES. The parties
acknowledge the transitional nature of the Services and that Lessor may make
reasonable changes from time to time in the manner of performing the Services
if Lessor is making similar changes in performing similar services for itself
and if Lessor furnishes to Lessee thirty (30) days written notice regarding
such changes.
3.5 RESPONSIBILITY FOR ERRORS; DELAYS. Lessor's sole
responsibility to Lessee:
(a) for errors or omissions in Services, shall be to
furnish correct information, payment and/or adjustment in the Services, at no
additional cost or expense to Lessee; provided, Lessee must promptly advise
Lessor of any such error or omission of which it becomes aware after having
used reasonable efforts to detect any such errors or omissions in accordance
with the standard of care set forth in Section 3.1; and
(b) for failure to deliver any Service because of
Impracticability, shall be to use reasonable efforts, subject to Section 1.2,
to make the Services available and/or to resume performing the Services as
promptly as reasonably practicable.
3.6 GOOD FAITH COOPERATION; CONSENTS. The parties will use good
faith efforts to cooperate with each other in all matters relating to the
provision and receipt of Services. Such cooperation shall include exchanging
information, performing true-ups and adjustments, and obtaining all third
party consents, licenses, sublicenses or approvals necessary to permit each
party to perform its obligations hereunder. The costs of obtaining such third
party consents, licenses, sublicenses or approvals shall be borne by Lessee.
The parties will maintain in accordance with its standard document retention
procedures, documentation supporting the information relevant to cost
calculations contained in SCHEDULE 1 hereto and cooperate with each other in
making such information available as needed in the event of a tax audit.
3.7 ALTERNATIVES. If Lessor reasonably believes it is unable to
provide any Service because of a failure to obtain necessary consents,
licenses, sublicenses or approvals pursuant to Section 3.6 or because of
Impracticability, the parties shall cooperate to determine the best
alternative approach. Until such alternative approach is found or the problem
otherwise resolved to the satisfaction of the parties, Lessor shall use
reasonable efforts, subject to Section 1.2 and Section 1.3, to continue
providing the Service. To the extent an agreed upon alternative approach
requires payment above and beyond that which is included in Lessor's charge
for the Service in question, the parties shall share equally in making any
such payment unless they otherwise agree in writing.
SECTION 4: SUBCONTRACTORS
Lessor may engage a "subcontractor" to perform all or any portion of
Lessor's duties hereunder, provided that Lessor remains responsible for the
performance of such subcontractor. As used herein, "subcontractor" will mean
any individual, partnership, corporation, firm, association, unincorporated
organization, joint venture, trust or other entity engaged to perform
hereunder.
SECTION 5: LIMITATION OF LIABILITY
NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR ANY LOST PROFITS, LOSS
OF DATA, LOSS OF USE, COST OF COVER, BUSINESS INTERRUPTION OR OTHER SPECIAL,
INCIDENTAL, INDIRECT, PUNITIVE OR CONSEQUENTIAL DAMAGES, HOWEVER CAUSED,
UNDER ANY THEORY OF LIABILITY, ARISING FROM THE PERFORMANCE OF, OR RELATING
TO, THE SERVICES.
SECTION 6: FORCE MAJEURE
Each party will be excused for any failure or delay in performing
any of its obligations hereunder, other than the obligations of Lessee to
make certain payments to Lessor hereunder for services rendered, if such
failure or delay is caused by Force Majeure. "Force Majeure" means any act of
God or the public enemy, any accident, explosion, fire, storm, earthquake,
flood, or any other circumstance or event beyond the reasonable control of
the party relying upon such circumstance or event.
SCHEDULE 1
-----------------------------------------------------------------------------------------------------------------
Service Name Description
-----------------------------------------------------------------------------------------------------------------
ADDITIONAL SERVICES - On-site meeting planning and support.
Meeting management and meeting support
-----------------------------------------------------------------------------------------------------------------
BASE SERVICES - Mail room - Lessor to receive all mail for the
Building, separate Lessee's mail and deliver
Administrative management services Lessee's mail to Lessee's mail room or receptionist.
(Lessee will be responsible for its own postage,
incoming mail distribution and receiving.)
- Walk Up copier impressions.
- Coffee Center supplies.
- Convenience Center Services.
- Management of the Cafe (subject to payment by Lessee
and its employees for the applicable charges for the
food items purchased therein).
- Janitorial service.
-----------------------------------------------------------------------------------------------------------------
ADDITIONAL SERVICES - Catering.
- Copy Center Services.
Administrative management services
-----------------------------------------------------------------------------------------------------------------
BASE SERVICES - First Aid Supplies.
- Control Room Operator (Alarm Monitoring / CCTV).
Security, Environmental, Health and Safety - Badging / Access Control System management.
- Fire Extinguisher Service.
- Security Systems Service Contract.
- Fire Alarm System Remote Monitoring.
Lobby Security Officer 24 hours / 7 days a week.
-----------------------------------------------------------------------------------------------------------------
ADDITIONAL SERVICES - Issuing badges to all employees.
Security, Environmental, Health and Safety
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
ADDITIONAL SERVICES - After-hours Cafe service as described in Section 2.4.
Cafe
-----------------------------------------------------------------------------------------------------------------
ADDITIONAL SERVICES - Building maintenance support services to the
manufacturing line at same level as provided prior
to the Commencement Date.
Building Maintenance Support Services to the
Manufacturing Line
-----------------------------------------------------------------------------------------------------------------
Lessee's costs for the Services designated as "Base Services" are included as
a part of monthly Rent during the Cohabitation Period. Lessee shall pay for
the Services designated as "Additional Services" amounts calculated pursuant
to the following rates:
a. Security, Environmental, Health and Safety - The issuance of
badges will be at $10 per badge issued. Badge issuance is a
mandatory Additional Service.
b. Administrative Management - All services will be billed at
actual usage plus 5%.
c. All meeting management consulting services will be billed at
$50 per hour, per person.
d. Cafe - As set forth in Section 2.4.
e. Building maintenance support services to the manufacturing
line - At the rates charged to Lessor by the vendor, which are
currently approximately $9,000 per month.
