UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 3L, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO
-------------- ---------------
COMMISSION FILE NUMBER 0-16240
JB OXFORD HOLDINGS, INC.
- ----------------------------------------------------------------
(Exact name of registrant as specified in its charter)
UTAH 95-4099866
(State of incorporation or organization) (I.R.S. Employer
Identification No.)
9665 Wilshire Blvd., Suite 300; Beverly Hills, 90212
California
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area (310) 777-8888
code
Securities registered pursuant to Section 12(b) None
of the Act:
Securities registered pursuant to Section 12(g)
of the Act:
Name of each exchange on
Title of each class which registered
Common stock, $0.01 par 8,655,205 shares NASDAQ
value: outstanding at May 1,
1996
Non-Voting Preferred 200,000 shares N/A
stock, $10.00 par outstanding at May 1,
value: 1996
Indicate by check mark whether the Registrant (l) has filed all reports
required to be filed by Section l3 or l5(d) of the Securities Exchange Act
of l934 during the preceding 12 months and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
----- ---
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JB OXFORD HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
March 31,
1996 December 31
(Unaudited) 1995
--------------- --------------
ASSETS:
Cash and cash equivalents $ 2,883,516 $ 15,949,577
Cash segregated under federal and other
regulations 29,265,451 43,702
Receivable from broker/dealers and
clearing organizations
(Net of allowance for doubtful
accounts of $2,103,802 for both
periods) 7,902,036 6,607,553
Receivable from customers
(Net of allowance for doubtful
accounts of $4,333,291 for both
periods) 183,473,134 143,169,584
Other receivables
(Net of allowance for doubtful
accounts of $1,979,793 for both
periods) 2,215,905 868,599
Securities owned - at market value 5,963,686 4,587,422
Furniture, equipment and leasehold
improvements
(At cost - less accumulated
depreciation and amortization of
$2,195,748 and $2,011,326) 2,634,221 2,043,847
Deferred income taxes
(Net of valuation allowance of
$500,000 for both periods) 1,379,170 1,379,170
Other assets 5,324,764 1,114,838
-------------- --------------
TOTAL ASSETS $ 241,041,883 $ 175,764,292
============== ==============
See accompanying notes to Consolidated Financial Statements.
JB OXFORD HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
March 31,
1996 December 31
(Unaudited) 1995
-------------- --------------
LIABILITIES AND STOCKHOLDERS' EQUITY:
LIABILITIES:
Payable to broker/dealers and
clearing organizations $ 41,144,796 $ 30,080,110
Payable to customers 174,689,091 121,583,187
Securities sold not yet purchased -
at market value 578,509 224,163
Accounts payable and accrued
liabilities 4,546,178 7,939,221
Income taxes payable 732,366 621,291
Loans from stockholders 4,548,487 4,622,543
Notes payable 3,235,269 249,840
Loans subordinated to the claims of
general creditors
2,000,000 2,000,000
------------- -------------
TOTAL LIABILITIES 231,474,696 167,320,355
------------- -------------
COMMITMENTS AND CONTINGENT LIABILITIES
STOCKHOLDERS' EQUITY:
Convertible preferred stock ($10 par
value 200,000 shares authorized;
200,000 issued and outstanding for
both periods) 2,000,000 2,000,000
Common stock ($.01 par value
100,000,000 shares authorized;
8,655,205 shares issued and
outstanding for both periods) 86,552 86,552
Additional paid-in capital 9,447,296 9,447,296
Accumulated deficit (1,966,661) (3,089,911)
-------------- --------------
TOTAL STOCKHOLDERS' EQUITY 9,567,187 8,443,937
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' $ 241,041,883 $ 175,764,292
------------- -------------
EQUITY
See accompanying notes to Consolidated Financial Statements
JB OXFORD HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
For The Three Months Ended
March 31,
-------------------------------
1996 1995
-------------- --------------
REVENUES:
Clearing and execution $ 5,049,753 $ 2,093,518
Trading profits 280,769 734,328
Commissions 4,105,110 1,140,296
Interest 2,730,158 1,169,865
Other 738,825 127,055
-------------- --------------
Total Revenues 12,904,615 5,265,062
-------------- --------------
EXPENSES:
Employee compensation 1,795,814 1,073,518
Commission expense 1,847,175 533,941
Clearing and floor brokerage 528,905 484,043
Communications 1,229,333 519,999
Occupancy 581,120 328,137
Interest 1,578,041 773,588
Data processing charges 1,013,638 535,613
Professional services 1,048,568 420,736
Promotional 666,914 283,903
Bad debts 211,495 32,027
Other operating expenses 457,513 263,469
-------------- --------------
Total Expenses 10,958,516 5,248,974
-------------- --------------
Income Before Income Taxes 1,946,099 16,088
Income Tax Provision 768,000 6,400
-------------- --------------
Net Income $ 1,178,099 $ 9,688
============== ==============
Primary Net Income Per Share $ 0.11 $ 0.00
Fully diluted Income Per Share $ 0.07 $ 0.00
Weighted average number of shares of
common stock & common stock
equivalents
Primary 9,893,595 7,606,099
Fully diluted 16,700,558 9,158,826
See accompanying notes to Consolidated Financial Statements.
JB OXFORD HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For The Three Months Ended
March 31,
-------------------------------
1996 1995
--------------- ---------------
Increase (decrease) in cash and
cash equivalents:
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $ 1,178,099 $ 9,688
Adjustments to reconcile net
income to cash used in operating
activities:
Depreciation and amortization 190,736 107,665
Deferred rent 24,487 33,821
Provision for bad debts 211,495 32,027
Changes in assets and
liabilities:
Cash segregated under federal (29,221,749) (2,072,398)
and other regulations
Receivable from broker/dealers
and clearing organizations (1,294,483) (2,037,539)
Receivable from customers (40,303,550) (24,838,519)
Other receivables (1,558,801) (151,692)
Securities owned (1,376,264) (1,181,080)
Other assets (4,216,240) 44,831
Payable to broker/dealers and
clearing organizations 11,064,686 16,120,251
Payable to customers 53,105,904 34,524,370
Securities sold not yet 354,346 307,452
purchased
Accounts payable and accrued (3,417,529) 1,400,972
liabilities
Income taxes payable/receivable 111,075 --
-------------- --------------
Net cash provided by (used in) (15,147,788) 22,299,849
--------------- --------------
operating activities
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures (774,796) (82,577)
--------------- --------------
Net cash used in investing (774,796) (82,577)
--------------- --------------
activities
CASH FLOWS FROM FINANCING
ACTIVITIES:
Repayments of notes payable (29,634) (50,527)
Advances (repayments) on short 3,015,063 (13,461,000)
term borrowing
Subordinated loans -- 2,000,000
Loans from stockholders -- 2,992,500
Repayments of loans from (74,056) --
stockholders
Payment of cash dividends - (54,849) --
--------------- --------------
preferred stock
Net cash provided by (used in) 2,856,523 (8,519,027)
-------------- ---------------
financing activities
NET INCREASE (DECREASE) IN CASH AND (13,066,061) 13,698,245
CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT 15,949,577 156,984
-------------- --------------
BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS AT END OF $ 2,883,516 $ 13,855,229
-------------- --------------
YEAR
See accompanying notes to Consolidated Financial Statements.
JB OXFORD HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1. COMPANY'S QUARTERLY REPORT UNDER FORM 10-Q
In the opinion of Management the accompanying unaudited financial
statements contain all adjustments (all of which are normal and recurring in
nature) necessary to present fairly the financial statements of JB Oxford
Holdings, Inc. and subsidiaries (``he Company'') for the periods presented.
The accompanying financial information should be read in conjunction with the
Company's 1995 Annual Report on Form 10-K. Footnote disclosures that
substantially duplicate those in the Company's Annual Audited Report on Form 10-
K, including significant accounting policies, have been omitted.
The Company's major subsidiary, JBOC is consolidated in the quarterly
financial information as of March 29, 1996 and March 31, 1995, because the last
settlement Friday of each month is consistently treated as month end.
Accordingly, this is reflected in the consolidated financial statements of the
Company.
NOTE 2. REGULATORY REQUIREMENTS
JBOC is subject to the Securities and Exchange Commission's Uniform Net
Capital Rule (Rule 15c3-1), which requires the maintenance of minimum net
capital.
At March 31, 1996 JBOC had net capital of $11,540,608 which was 6.1% of
aggregate debit balances and $7,804,202 in excess of the minimum amount
required. At December 31, 1995 JBOC had net capital of $12,494,561, which was
8.6% of aggregate debit balances and $9,598,267 in excess of the minimum amount
required.
Cash is segregated in special reserve bank accounts for the exclusive
benefit of customers under Rule 15c3-3 of the Securities and Exchange Act of
1934 as amended. Included in the special reserve accounts are securities
purchased under agreements to resell on an overnight basis in the amount of
$29,240,473. Securities purchased are U.S. Treasury instruments having a market
value of 102% of cash tendered. The Company liquidated $6,000,000 of these
securities on April 2, 1996 pursuant to these rules.
NOTE 3. CONTINGENT LIABILITIES
In the ordinary conduct of business, the Company and/or its subsidiaries
have been named as Defendants in several lawsuits and arbitration matters or
have instituted legal proceedings as Plaintiffs to recover moneys owing, the
most significant of which follow:
a)In an arbitration matter the claimant seeks rescission of certain sales in
his customer account and damages of $750,000. The claimant alleged that RKSI
and current and former principals breached fiduciary duties and failed to
disclose material information. The ultimate outcome is not determinable at
this stage and Management intends to vigorously contest this matter.
b)In an arbitration matter filed with the NASD, the claimants are a group of
investors who sold short FCMI stock. Claimants did not have an account with
RKSI, however, they have alleged that RKSI is responsible for the damages
Claimants realized when their short positions in FCMI were bought in.
Claimants are seeking damages in the amount of $740,000, plus punitive
damages. The proceeding has been stayed pending determination of whether
Claimants are members of the FCMI class action and bound by the settlement
agreement entered therein. The ultimate outcome is not determinable at this
stage and Management intends to vigorously contest this matter.
c)In an arbitration matter filed in October 1994, the claimants allege that
RKSI and former principals breached fiduciary duties, recommended non
suitable investments, fraud, and failure to disclose material information.
JBOC has been named as an alleged successor to RKSI; JBOH has been named as
the parent company. Claimants seek damages in the amount of $482,000. The
ultimate outcome is not determinable at this stage and Management intends to
vigorously contest this matter.
d)In an action commenced in March 1995, in the United States District Court of
New York. A claim was brought by former counsel for the Company and alleges
payment due for professional services in the amount of $681,217. An answer
and counter claim by the Company was filed asserting among other claims that
the Company was overcharged for services. The ultimate outcome and range of
possible loss, if any, is not determinable at this stage. Management intends
to vigorously contest this matter.
The ultimate outcome of these uncertainties discussed above is unknown.
Moreover, due to the nature of arbitration matters, it is impossible to predict
the ultimate outcome and/or range of loss. Accordingly, no provision for any
liability that might result has been made in the accompanying financial
statements.
NOTE 4. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
For the Three Months Ended
March 31,
-----------------------------
1996 1995
(Unaudited) (Unaudited)
-------------- --------------
Supplemental Disclosures of Cash Flow
Information
Cash paid during the quarter for:
Interest $ 1,584,401 $ 614,646
Income taxes 656,925 --
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Changes in Financial Condition
- ------------------------------
The Company's financial condition continued to improve as in past quarters,
concurrent with the Company's continued growth. Total assets increased
$65,277,591 or 37% during the first quarter of 1996. The largest increase was
in receivables from customers in the amount of $40,303,550 or 28% to
$183,473,134. At March 31, 1996, receivables from customers represent 76% of
the assets of the Company. Cash segregated under federal regulations increased
during the first quarter by $29,221,749 to $29,265,451. Cash and cash
equivalents decreased by $13,066,061 or 82% from December 31, 1995 to March 31,
1996.
Total liabilities increased $64,154,340 or 38% to $231,474,695. Payables
to customers increased $53,105,904 or 44% to $174,689,091. At March 31, 1996
customer payables represent 75% of the total liabilities of the Company.
Payables to broker dealers increased by $11,064,686 or 37% to $41,144,796 during
the quarter ended March 31, 1996.
Comparison of Operations
- ------------------------
The Company recorded net income of $1,178,099 for the quarter ended March
31, 1996, compared to $9,688 reported for the quarter ended March 31, 1995, an
increase of $1,168,411.
Total revenue increased $7,639,553 or 145% to $12,904,615 for the three
months ended March 31, 1996 compared to the same three months of 1995.
Clearing and execution revenue increased by $2,956,235 or 141% to
$5,049,753 during the first quarter of 1996 compared to the first quarter of
1995. The increase was due to an increase in trade transactions and an increase
in the average price charged per transaction. Correspondent ticket volume which
generates clearing and execution revenue increased by 98% in the first quarter
of 1996 over the first quarter of 1995.
Commission revenue increased by $2,964,814 or 260% during the first quarter
of 1996 compared to the first quarter of 1995. Net commissions (commission
revenue less commission expense) increased $1,651,580 during the same period.
The increase in commission is directly related to the increase in discount
transaction volume which increased 153% over the same period of the prior year.
The Company is continuing to expand its operations in this area, with new
offices in Miami and Boston opened in the second quarter of 1996, and a new JB
On-line TM product introduced late in the first quarter.
Interest revenue increased by $1,560,293 or 133% during the first quarter
of 1996 compared to the first quarter of 1995. This increase is the result of
increased customer margin balances during the first quarter of 1996 compared to
1995. Net interest income increased $755,840 or 191% during the first quarter
of 1996 over the first quarter of 1995. Trading profits declined $453,559 or
62% during the first quarter of 1996 compared to the first quarter of 1995.
The Company will close its first initial public offering during the second
quarter of 1996. Management anticipates that the Capital Markets Division will
add significantly to the profitability of the Company during 1996.
The Company's total expenses increased by $5,709,542 or 109% during the
first quarter of 1996 compared to the first quarter of 1995. The most
significant expense increase was in commission expense of $1,313,234 or 246% to
$1,847,175. This increase is comparable to the 260% increase in commission
revenue discussed above.
Interest expense increased by $804,453 or 104% during the first quarter of
1996 compared to the first quarter of 1995. This increase is directly related
to the increase in interest revenue discussed above.
Salaries and other operational expenses increased concurrent with the
increase in transaction volume which the Company experienced. This growth is
primarily the result of Management's efforts to expand the discount division of
the broker dealer subsidiary. Advertising expense increased 135% over the first
quarter of the previous year. Management will continue to increase its
advertising as additional branch offices come into operation.
Clearing expense had a modest increase of only $44,862 or 9% from the first
quarter of 1996 compared to the first quarter of 1995. Contrasted with the
increase in total ticket volume of over 100%, as discussed above, the clearing
cost per transaction has been substantially reduced. This reduction is
attributed to a change in the subsidiary company's clearing corporation, in late
January 1996, resulting in a substantial decrease in clearing and safekeeping
expenses.
Liquidity and Capital Resources
- -------------------------------
The Company's liquidity and financial condition remain sound at the end of
the first quarter of 1996. The Company's equity to total assets ratio decreased
during the quarter, from 4.8% to 4.0%. This resulted from the growth which
occurred in the balance sheet as assets and liabilities have grown as described
above.
The decrease in cash of $13,066,061 resulted from cash used in operations
of $15,147,789. The largest use of cash was cash and cash equivalents
segregated under federal and other regulations which increased by $29,221,749.
The cash position of the Company remains strong as the Company withdrew
$6,000,000 of this segregated cash on April 2, 1996.
The largest source of operating cash was provided from customers in the
amount of $12,802,354. This represents a net increase of customer payables over
customer receivables.
The Company used cash of $774,796 for investing activities involving the
acquisition of property and equipment. Cash of $2,856,524 was provided from
financing activities, of which $3,015,063 was obtained from secured lines of
credit used to finance customer margin accounts.
Recent Expansions and Developments
- ----------------------------------
During the first quarter of 1996, the Company continued expansion of its
JBOC deep discount operations with the opening of its Boston and Miami offices.
JBOC's continued profitability during the first quarter of 1996 is underscored
by the fact that the Company incurred expansion and developmental costs
associated with the Miami and Boston offices. JBOC's Basel, Switzerland office
reached break-even operation during the first quarter, and Management expects
that the New York office will operate at break-even by the end of the second
quarter of this year.
The Company's profitability was also impacted by marketing and
developmental costs associated with the roll-out of JBOC's new Windows-based PC
trading system, JB On-line TM, and the telephone based trading system, Telephone
Trader TM. Client response to these electronic services has exceeded
expectations, and Management anticipates added profitability from these products
in future quarters. Additionally, JBOC has established a web-site on the
Internet. Its Internet product, `JB InterNet,'' is expected to be operational
in May 1996. Access is available at http://www.jboxford.com.
To facilitate administration and control of the Company's rapid growth,
JBOC hired 12-year brokerage veteran Brian Kape as Chief Operating Officer of
the Company, a newly created post. Among his credits, Mr. Kape spent seven
years with the Pershing unit of Donaldson, Lufkin & Jenrette; two years managing
the discount brokerage unit of Nations Bank, Richmond; and, most recently, as
the Managing Director in charge of business development and operations for
National Discount Brokers. Management will continue its efforts to maximize
return to the Company's shareholders and enhance profitability in future
quarters.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In the ordinary conduct of business, the Company and/or its subsidiaries
have been named as Defendants in several lawsuits and arbitration matters or
have instituted legal proceedings as Plaintiffs to recover moneys owing. There
have been no material pending legal proceedings other than ordinary routine
litigation incidental to the business. Those which may have a significant
impact on the Company have been disclosed in previous filings. One matter
previously addressed has been decided as follows:
Shirley A. Robinson vs. Robert Kendrick, Reynolds Kendrick Stratton, Inc., and
- ------------------------------------------------------------------------------
JB Oxford Holdings, Inc. NASD Arbitration No. 95-00118
- ------------------------
In this arbitration matter, filed in January 1995, Claimant sought damages
in the amount of $525,000. After a full hearing, the Claimant was awarded
$237,000 solely from RKSI, and $159,000 jointly and severally from RKSI and
Robert Kendrick. JBOH was not subject to NASD arbitration and was summarily
dismissed as a party. All other claims, including those for exemplary and
punitive damages, were denied. Payment of the award will not have a material
impact on the Company's earnings.
Adams et. al. vs. OTRA Clearing, Inc., et. al. Case No. 626182
- ----------------------------------------------
This matter was filed in the San Diego County Superior Court in July 1990.
The Plaintiffs allege that OTRA Clearing Inc. knowingly cleared unregistered
securities for its former correspondent broker Hamilton Williams. The Company's
Motion to Decertify the Class was granted on April 19, 1996. The ultimate
outcome is not determinable at this stage and Management will continue to
vigorously contest this matter.
ITEM 2. CHANGES IN SECURITIES
There has been no material modification of ownership rights of securities
holders. The subsidiary company, as part of its normal broker/dealer activity,
has minimum capital requirements as imposed by regulatory agencies. (See Note 2
to the financial statements.) These requirements may restrict the payment of
dividends.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
There has been no default in payments of the Company.
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
There have been no matters submitted to a vote of security holders during
this reporting period.
ITEM 5. OTHER INFORMATION
There have been no matters that require disclosure under this item.
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibit is filed with this report as required by Item 601 of
Regulation S-K:
Exhibit Description Page
- ------- ----------- ----
No.
- ---
10.1 Commercial office lease between 12-49
Keystone-Centrose Associates and JB Oxford
Holdings, Inc. to lease Boston, MA office
space
11 Computation of Earnings Per Share 11
(b) During this quarter, there were no events as required to be reported on
Form 8-K.
EXHIBIT 11
JB OXFORD HOLDINGS, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(UNAUDITED)
For The Three Months Ended
March 31
-------------------
1996 1995
--------- ---------
PRIMARY EARNINGS PER SHARE
Net income $ 1,178,099 $ 9,688
Preferred stock dividends (54,849)
------------- --------------
Net income for primary earnings $ 1,123,250 $ 9,688
============= =============
Weighted average common shares
outstanding 8,655,205 6,432,983
Weighted average options outstanding 1,970,703 2,447,222
Stock acquired with proceeds (732,313) (1,274,106)
------------- -------------
Weighted average common shares and
equivalents outstanding
9,893,595 7,606,099
============= =============
Primary Earnings Per Share $ 0.11 $ 0.00
============= =============
FULLY DILUTED EARNINGS PER SHARE
Net income $ 1,178,099 $ 9,688
Interest on convertible debentures,
net of income tax
61,739
------------- --------------
Net Income for fully diluted earnings $ 1,239,838 $ 9,688
============= =============
Weighted average common shares
outstanding 8,655,205 6,432,983
Weighted average options outstanding 1,970,703 2,447,222
Weighted average convertible
debentures 4,548,487 1,516,667
Weighted average convertible
preferred stock 2,222,222 --
Stock acquired with proceeds (696,059) (1,238,046)
------------- -------------
Weighted average shares common shares
and equivalents outstanding
16,700,558 9,158,826
============= =============
Fully Diluted Earnings Per Share $ 0.07 $ 0.00
============= =============
EXHIBIT 10.1
LEASE
Between
KEYSTONE-CENTROSE ASSOCIATES
Landlord
and
J.B. OXFORD HOLDINGS, INC.
Tenant
99 High Street
Boston, Massachusetts
TABLE OF CONTENTS
Article Page
1. Demised Premises 1
2. Definitions 1
3. Notices of Lease and Estoppel Certificates 4
4. Annual Fixed Rent 4
5. Tax Escalation 5
6. Operating Expenses 7
7. Condition of Demised Premises 9
8. Commencement Date 10
9. Use of Demised Premises 10
10. Assignment and Subletting 11
11. Alterations and Installations by Tenant 15
12. Care of Demised Premises 18
13. Cleaning 19
14. Mortgages 19
15. Compliance with Laws, etc. 22
16. Landlord's Liability 24
17. Damage by Fire or Other Casualty 25
18. Fire Insurance, etc 27
19. Condemnation 29
20. Landlord's Access to Demised Premises 30
21. Electricity 32
22. Default of Tenant. 34
23. Name of Building, Tenant's Signs 37
24. Remedying Defaults and Indemnity 38
25. Heating and Air-Conditioning 39
26. Water, Steam, etc 40
27. Elevator Facilities 41
28. Security Deposit 41
29. Bills and Notices 42
30. Surrender. 42
31. Tenant's Liability Insurance 42
32. Payment of Additional Rent 43
33. No Waiver 43
34. Lease as Entire Agreement 44
35. Quiet Enjoyment 44
36. Compliance With Rules and Regulations. 45
37. Stoppage of Services, Landlord's
Inability to Supply Services, etc. 45
38. Transferee Liability. 46
39. Excavation 46
40. Area Measurements, etc.. 46
41. No Broker 47
42. Remedies 47
43. Severability 47
44. Binding Effect 47
45. Parking Space 47
Exhibits
Rules and Regulations
AGREEMENT OF LEASE, made as of the day of March, 1996,
between KEYSTONE-CENTROSE ASSOCIATES, a Massachusetts partnership (hereinafter
referred to as "Landlord") and J.B. OXFORD HOLDINGS, INC., a Utah corporation
(hereinafter referred to as "Tenant")
WITNESSETH THAT:
DEMISED PREMISES
1. Landlord hereby leases to Tenant and Tenant hereby hires from Landlord
a portion of the sixteenth (16th) floor, as shown on the plan attached hereto as
Exhibit A and made a part hereof (hereinafter referred to as the "Demised
Premises") of the Building on that certain parcel of land situated on High
Street, Congress Street and Purchase Street, in the City of Boston, Suffolk
County, Commonwealth of Massachusetts, known as and numbered 99 High Street in
said City of Boston, and being Lot 1 on "Plan of Land Boston, Mass." dated July
2, 1968 as drawn by Henry F. Bryant & Son, Inc. recorded with Suffolk Registry
of Deeds, Book 8253, Page 356 (hereinafter referred to as the "Land").
To have and to hold the Demised Premises, subject to the agreements, terms
and conditions herein contained, for a term of five (5) years (or until such
term shall sooner cease or expire) to commence on the Commencement Date and to
end at the close of the day preceding the fifth (5th) anniversary of the
Commencement Date, except that if the Commencement Date shall be a date other
than the first day of a calendar month, the Term shall end at the close of the
last day of the calendar month in which said anniversary of the Commencement
Date shall fall.
DEFINITIONS
2. As used herein the following terms shall have the following respective
meanings:
Additional Rent: The amounts prescribed in the Lease as Additional Rent.
Air Conditioning: As defined in Article 25.
Affiliate: As defined in Article 10.
Alterations: As defined in Article 11.
Annual Fixed Rent: $127,265.64
Base Operating Expenses: The Operating Expenses (as such term is defined
in Article 6) for the calendar year 1995.
Building: The office building, of which the Demised Premises are a part,
erected on the Land, and repairs, alterations and additions thereto.
Building Rentable Area: The total rentable area in the Building, excluding
garage areas, agreed to be 731,204 square feet.
Business Days: All days except Sundays, Saturdays, days defined as "Legal
Holidays" for the entire state under the laws of the Commonwealth of
Massachusetts, and such other days that Tenant presently or in the future
recognizes as holidays for Tenant's general office staff.
Commencement Date: As defined in Article 8.
Default of Tenant: As defined in Article 22.
Demised Premises: As defined in Article 1.
Eliminated Space: As defined in Article 10.
Elimination Date: As defined in Article 10.
Elimination Period: As defined in Article 10.
Earlier Termination Date: As defined in Article 10.
Escalation Factor: 0.5651%
Land: As defined in Article 1.
Landlord: The landlord named herein or any subsequent owner or lessee,
from time to time, of the Landlord's interest in the Building.
Landlord's Construction Representative: Rose Associates, or such other
person, firm or corporation as Landlord shall designate by notice to Tenant.
Landlord's Original Address: c/o Rose Associates, 380 Madison Avenue, New
York, New York 10017, Attention: Morris Mansfield, Executive Vice President
with a copy to: Sherburne, Powers & Needham, P.C., One Beacon Street, Boston,
Massachusetts 02108, Attention: Philip S. Lapatin, Esquire.
Lease: This Agreement of Lease and the Schedule and Exhibits annexed
hereto which are made a part hereof.
Lease Year: A twelve (12) month period beginning on the Commencement Date
and each succeeding twelve (12) month period during the Term of this Lease,
except that if the Commencement Date shall be other than the first day of a
calendar month, the first Lease Year shall include the partial calendar month in
which the Commencement Date occurs as well as the succeeding twelve (12) full
calendar months.
Mortgage: A mortgage, deed of trust, trust indenture or other security
instrument of record creating an interest in or affecting title to the Property,
Land or Building or any part thereof, including a leasehold mortgage, and any
and all renewals, modifications, consolidations or extensions of any such
instrument.
Mortgagee: A person, firm, corporation or other entity holding any
Mortgage.
Operating Expenses: As defined in Article 6.
Operating Year: As defined in Article 6.
Original Electrical Factor: $5,165.00
Property: The Land and the Building.
Rentable Area: The rentable area of the Demised Premises, agreed to be
4,132 square feet.
Restoration Period: As defined in Article 10.
Rules and Regulations: As defined in Article 36.
Security Deposit: $31,816.41
Taking: A taking of property or any interest therein or right appurtenant
or accruing thereto, by condemnation or eminent domain or by action,
proceedings, or agreement in lieu thereof, pursuant to governmental authority.
Tax Amount: Real estate taxes assessed with respect to the Property by any
governmental authority with respect to the Tax Year commencing July 1, 1995.
Tax Year: As defined in Article 5.
Tenant: The Tenant named herein or any subsequent assignee under Article
10.
Tenant's Construction Representative: George Reis, MIS Projects Director,
or such other person, firm or corporation as Tenant from time to time shall
designate by notice to Landlord.
Tenant's Original Address: 9665 Wilshire Boulevard, Beverly Hills,
California 90212.
Tenant's Special Installations: As defined in Article 11.
Term of this Lease: The term of this Lease as stated in Article 1.
Unavoidable Delays: Delays due to strikes, lockouts, labor disputes, acts
of God, inability to obtain labor or materials, governmental restrictions,
emergency acts, civil commotion, orders or regulations of any governmental
authority, unavoidable casualty or other causes beyond the reasonable control of
Landlord or Tenant, as the case may be, whether or not similar in nature to the
causes hereinbefore enumerated.
Waiver Provisions: As defined in Article 18.
NOTICES OF LEASE AND ESTOPPEL CERTIFICATES
3. (a) Upon request of either party at any time before or after the
Commencement Date, both parties shall execute and deliver a notice of this Lease
in form appropriate for recording, and if this Lease is terminated other than at
the end of the original Term of this Lease, as shown in such notice, an
instrument in such form acknowledging the date of termination.
(b) Tenant agrees from time to time, upon not less than fifteen (15) days
prior written request by Landlord, to execute, acknowledge and deliver to
Landlord a statement in writing certifying that this Lease is unmodified and in
full force and effect and that Tenant has no defenses, offsets or counterclaims
against its obligations to pay the Annual Fixed Rent, Additional Rent and other
charges hereunder and to perform its other covenants under this Lease, and that
there are no uncured defaults of Landlord or Tenant under this Lease (or, if
there have been any modifications that the same is in full force and effect as
modified and stating the modifications, and, if there are any defenses, offsets,
counterclaims, or defaults, setting them forth in reasonable detail), the dates
to which the Annual Fixed Rent, Additional Rent and other charges have been paid
and any other information reasonably requested. Any such statement delivered
pursuant to this paragraph may be relied upon by any purchaser, lessee or
Mortgagee of the Property, Land or Building or any assignee of any Mortgage of
the Property, Land or Building.
ANNUAL FIXED RENT
4. (a) Tenant shall pay to Landlord, without any set-off or deduction,
at Landlord's office in the Building, or to such other person or at such other
place as Landlord may designate by notice to Tenant, the Annual Fixed Rent. The
Annual Fixed Rent shall be paid in equal monthly installments in advance on or
before the first day of each calendar month during the Term of the Lease and
shall be apportioned for any fractional month in which the Commencement Date or
the last day of the Term of this Lease may fall.
(b) Landlord reserves the right to provide in any first Mortgage given by
it that some or all rents, issues, and profits and all other amounts of every
kind payable to the Landlord under this Lease shall be paid directly to such
Mortgagee for the Landlord's account and Tenant covenants and agrees that it
will, after receipt by it of notice from Landlord designating such Mortgagee to
whom payments are to be made by Tenant, pay such amounts thereafter becoming due
directly to such Mortgagee until excused therefrom by notice from such
Mortgagee. Prior to such notice from such Mortgagee all such payments to such
Mortgagee by Tenant shall, pro tanto, satisfy Tenant's obligations hereunder in
respect of such payments.
TAX ESCALATION
5. (a) For the purposes of this Article 5, the term Tax Year shall mean
a twelve-month period commencing on the July 1st (or such other date as the City
of Boston or any governmental authority may adopt as the date for commencement
of the twelve-period with respect to which real estate taxes are payable) next
preceding the Commencement Date and on each anniversary of such date during the
Term of this Lease.
(b) In the event that the real estate taxes assessed with respect to the
Property by any governmental authority shall, in the aggregate, be greater with
respect to any Tax Year than the Tax Amount, whether by reason of an increase in
either the real estate tax rate or the assessed valuation of the Property or
both, or by reason of the levy, assessment or imposition of any tax on any real
estate as such not now levied, assessed or imposed:
(i) Tenant shall pay to Landlord as Additional Rent, an amount, if
any, equal to (aa) the amount by which the total real estate taxes for such
Tax Year on the Property exceeds the Tax Amount, multiplied by (bb) the
Escalation Factor, apportioned for any fraction of a Tax Year in which the
Commencement Date falls or the Term of this Lease ends.
(ii) Landlord shall submit to Tenant not more than forty-five (45)
days and not less than twenty (20) days prior to the last days on which
real estate taxes or any installments thereon may be paid in the City of
Boston or to any other governmental authority without penalty or interest a
statement setting forth the amount of Tenant's payment due to Landlord.
Landlord's failure to comply with the foregoing shall not be deemed a
waiver by Landlord of Tenant's obligation to pay to Landlord any Additional
Rent due hereunder. Within thirty (30) days after the delivery of such
statement, whether or not such statement shall be timely, Tenant shall pay
to Landlord the payment required under (i) above.
(iii) With respect to any Tax Year which shall commence prior to
the Commencement Date or extend beyond the Term of this Lease, any
Additional Rent payable by Tenant shall be reduced to that proportion of
such Additional Rent as the number of days elapsing during the Term of this
Lease and falling within such Tax Years bears to 365. In the event the
first day of the Tax Year in the City of Boston should be changed after the
Commencement Date to a day other than July 1 so as to change the
twelve-month period comprising the Tax Year, in determining any Additional
Rent to be paid by Tenant under this Article 5, with respect to the real
estate taxes payable for the period between July 1 and such changed first
day of the Tax Year, the Tax Amount shall be multiplied by a fraction, the
numerator of which shall be the number of days elapsing during such period,
and the denominator of which shall be 365.
(c) Landlord will use reasonable efforts to obtain reduction of real
estate taxes assessed on the Property, provided Tenant and other tenants in the
Building under leases containing tax escalation provisions, which, together with
Tenant, occupy, collectively, at least fifty (50) percent of the Building
Rentable Area, request in writing Landlord so to do and, in such request, each
agrees to pay its proportionate share of the costs thereof as hereinafter
provided, and Landlord receives such request not less than twenty (20) days
prior to the last date on which real estate tax reduction proceedings for the
particular Tax Year in question may be commenced. The method and manner of
conducting proceedings for such reduction, including the selection of counsel,
shall be solely within the judgment and determination of Landlord, and Landlord
may cancel, discontinue, or settle such proceedings if, in Landlord's judgment,
such cancellation, discontinue or settlement is advisable. To the extent that
the reasonable cost and expense, including counsel fees, of such proceedings
instituted and conducted by Landlord, requested by Tenant and others, exceed the
amount of any tax refund, Tenant shall pay that proportion of such excess cost
and expense which the Rentable Area of the Demised Premises bears to the total
Rentable Area demised to all tenants making such request at the time it is made.
(d) If Landlord shall receive any tax refund or reimbursement of taxes or
amount in lieu thereof with respect to any Tax Year, then out of any balance
remaining thereof, after deducting Landlord's expenses reasonably incurred in
obtaining such refund, Landlord shall pay to Tenant an amount equal to such
refund or reimbursement or an amount in lieu thereof multiplied by the
Escalation Factor, apportioned as set forth above, but not exceeding the sum
paid by Tenant as required under (b) above.
(e) Any tax upon the Property levied or imposed by any governmental tax
authority in addition to, in lieu of, or as a substitute for, real estate taxes
assessed on the date of this Lease (including, without limitation, betterment
assessments and charges for the use or availability of customary governmental
services) shall nevertheless be deemed to be real estate taxes for the purpose
of this Article 5 and shall be included as such in computing any Additional Rent
based thereon.
(f) Any obligation of Tenant under this Article 5 to pay Additional Rent
or on the part of Landlord to pay an amount to Tenant, which shall not have been
performed at the expiration of the Term of this Lease, shall survive such
expiration and shall be discharged by payment or payments in cash, as the amount
of the same shall from time to time be determined to be due.
(g) Tenant shall, with each monthly installment of Annual Fixed Rent, make
tax fund payments to Landlord. "Tax fund payments" refer to such equal monthly
payments (subject to recalculation from time to time) as Landlord shall
reasonably determine to be sufficient to provide in the aggregate a fund
adequate to pay, when due, all sums required from Tenant under this Article 5.
Any excess tax fund payments shall be credited against future tax fund payments
(or promptly refunded to Tenant if the Term of this Lease shall have ended) once
the amount of Additional Rent on account of which such payments were made has
been determined.
OPERATING EXPENSES
6. (a) For the purposes of this Article 6, the following terms shall
have the following respective meanings:
Operating Year: A twelve-month period commencing on the first (1st) day of
January in the year during which this Lease is executed, and each successive
twelve-month period thereafter in which any part of the Term of this Lease shall
fall.
Operating Expenses: The aggregate cost and expense incurred by Landlord
for operation, maintenance and management of the Property (excluding special
services rendered to tenants of the Building for which separate charges are
made) including, without limitation, the following: salaries, wages, medical,
surgical and general welfare benefits (including group insurance and retirement
benefits) for employees of Landlord or any contractor of Landlord engaged in the
cleaning, operation, maintenance or management of the Property, and payroll
taxes and worker's compensation insurance premiums relating thereto, Building
electricity (in contradistinction to electricity furnished to tenants), gas,
steam and water (including sewer rental and any utility tax), rubbish removal,
fire, casualty, liability, sprinkler, water damage and rent insurance carried by
Landlord and such other insurance as is required by any Mortgagee, repairs,
replacements, maintenance of grounds, Building supplies, uniforms and cleaning
thereof, snow removal, window cleaning, service contracts with independent
contractors for any of the foregoing (including elevator and air conditioning
maintenance), management fees at reasonable rates consistent with the type of
occupancy and service rendered, whether or not paid to any person, firm,
corporation or other entities comprising Landlord, and all other expenses now or
hereafter customarily incurred in connection with the operation, maintenance and
management of first class office buildings in the City of Boston. Operating
Expenses in any Operating Year shall be deemed increased by an amount equal to
the cost (amortized, with interest, on such reasonable basis as Landlord shall
determine) of any capital improvement (including, without limitation, the
installation of any energy-saving device) made by Landlord to the Property for
the purpose of (i) achieving a reasonably-corresponding reduction of other
Operating Expenses or (ii) complying with the requirements of any applicable
present or future law, ordinance, rule or order of Federal, State, County or
Municipal authority, and with any direction made pursuant to law of any public
officer or officers, with respect to the Property, to the extent that such law,
ordinance, rule, order or regulation becomes effective after the Commencement
Date. No other capital expenditures (as defined in accordance with generally
accepted accounting principles) shall be included in Operating Expenses.
(b) In the event the Operating Expenses during any Operating Year shall
exceed the Base Operating Expenses, Tenant shall pay to Landlord as Additional
Rent an amount equal to the excess multiplied by the Escalation Factor,
apportioned for any
fraction of an Operating Year in which the Commencement Date falls or the Term
of this Lease ends.
(c) After the end of each Operating Year, Landlord shall furnish Tenant
with a statement setting forth in reasonable detail the Operating Expenses for
such Operating Year. Such statement shall set forth the amount, if any, of any
payment due under (b) above, and such payment shall be made within thirty (30)
days after delivery of such statement.
(d) Any obligation under this Article 6 of Tenant to pay Additional Rent
or of Landlord to make any refund to Tenant shall survive the expiration of the
Term of the Lease and shall be discharged by payment in cash when and as the
amount of the same shall be determined to be done.
(e) If, during any portion of a calendar year for which Operating Expenses
(including without limitation Base Operating Expenses) are being computed
pursuant to this Article, less than the total rentable area in the Building is
occupied or Landlord is not supplying all occupants with the same services being
supplied hereunder, such Operating Expenses shall be reasonably extrapolated in
order to take into account the costs and expenses which would have been incurred
by Landlord had the entire rentable area of the Building been occupied and had
such services been supplied to all occupants.
(f) Tenant shall, with each monthly installment of Annual Fixed Rent, make
operating fund payments to Landlord. "Operating fund payments" refer to such
equal monthly payments (subject to recalculation from time to time) as Landlord
shall reasonably determine to be sufficient to provide in the aggregate a fund
adequate to pay, when due, all sums required from Tenant under this Article 6.
Any excess operating fund payments shall be credited against future operating
fund payments (or promptly refunded to Tenant if the Term of this Lease shall
have ended) once the amount of Additional Rent on account of which such payments
were made has been determined.
CONDITION OF DEMISED PREMISES
7. (a) Subject to delay by causes beyond the reasonable control of
Landlord, Landlord shall use reasonable diligence in order to have the Demised
Premises ready for occupancy by Tenant on or before May 1, 1996. The failure to
have the Demised Premises so ready by such date shall in no way affect the
validity of this Lease or the obligations of Tenant hereunder.
(b) The Demised Premises shall be conclusively deemed ready for occupancy
by Tenant after Landlord gives notice to Tenant that the installations to be
done by Landlord in the Demised Premises (as described in paragraph (c) of this
Article) have been substantially completed by Landlord. Such work shall not be
deemed incomplete if only minor or insubstantial details of construction or
mechanical adjustments remain to be done, or to the extent that a delay is
caused in whole or in part by Tenant. In the event of a dispute, a certificate
of substantial completion or of any other facts pertinent to this Article shall,
when given in good faith by a duly-licensed architect selected by Landlord, be
deemed conclusive of the statements therein contained and binding upon Tenant.
(c) Landlord shall lay out and construct the Demised Premises for Tenant's
occupancy in accordance with the drawings and specifications (the "Plans")
referenced in Exhibit B attached hereto and made a part hereof.
(d) Tenant shall pay to Landlord, prorata as Landlord's work hereunder
progresses and within thirty (30) days after periodic billing, the amount by
which all costs incurred by Landlord in connection with such work (including
without limitation preparation of the Plans) exceeds Landlord's Allowance. For
purposes hereof, "Landlord's Allowance" shall be $157,016.
(e) Tenant shall be conclusively deemed to have agreed that Landlord has
performed all of its obligations under this Article unless not later than the
end of the second calendar month next beginning after the Commencement Date
Tenant shall give Landlord written notice specifying the respects in which
Landlord has not performed such obligations. Landlord shall correct any
incomplete or defective items of work specified in such notice.
(f) Tenant may enter the Demised Premises prior to the Commencement Date
to undertake such work as is to be performed by Tenant pursuant to this Lease in
order to prepare the Demised Premises for Tenant's occupancy. Such entry shall
be deemed to be pursuant to a license from Landlord to Tenant and shall be at
the risk of Tenant, who shall in no event interfere with any construction work
being performed by or on behalf of Landlord.
(g) All construction work required or permitted by this Lease, whether by
Landlord or Tenant, shall be done in a good and workmanlike manner and in
compliance with all applicable laws (including without limitation the Americans
with Disabilities Act) and all lawful ordinances, regulations and orders of
governmental authority and insurers of the Building. Each party may inspect the
work of the other in the Demised Premises at reasonable times and shall promptly
give notice of observed defects. Tenant authorizes Landlord to rely in
connection with design and construction upon approval and other actions on
Tenant's behalf by Tenant's Construction Representative.
COMMENCEMENT DATE
8. The Commencement Date of the Term of this Lease shall be the earlier
of (a) the date on which the Demised Premises are ready for occupancy by Tenant
in accordance with the provisions of Article 7 or (b) the date on which Tenant
undertakes to conduct its business activities in any portion of the Demised
Premises. After the determination of the Commencement Date, the parties agree
that, upon demand of either, they shall execute, acknowledge and deliver an
instrument, in recordable form, setting forth said Commencement Date.
USE OF DEMISED PREMISES
9. Tenant shall use and occupy the Demised Premises for general office
purposes consistent with the character and dignity of the Building and for no
other purposes. Tenant shall not permit or suffer the Demised Premises to be
occupied by anyone other than Tenant except as provided by Article 10.
Landlord warrants that, on the Commencement Date, the Demised Premises may
be legally used and occupied for general office purposes. Tenant shall at all
times have access to the Demised Premises, subject, however, in all respects to
all the terms, covenants, conditions and agreements contained in this Lease.
However, Landlord may regulate and restrict access to the Building at times
other than normal business hours on Business Days for security purposes so long
as Tenant's employees and agents have reasonable access to the Demised Premises
without unreasonable inconvenience.
ASSIGNMENT AND SUBLETTING
10. (a) Tenant will not mortgage, pledge, encumber, sell, assign or
transfer this Lease, in whole or in part, or sublease all or any part of the
Demised Premises, without Landlord's written consent. In connection with any
request by Tenant for such consent to sublet, Tenant shall submit to Landlord,
in writing, a statement containing the name of the proposed subtenant, such
information as to its financial responsibility and standing as Landlord may
require, and all of the terms and provisions upon which the proposed sub-letting
is to be made, and, unless the proposed sublet area shall constitute an entire
floor or floors, such statement shall be accompanied by a floor plan delineating
the proposed sublet area. As long as Tenant is not in default under any of the
terms, covenants and conditions of this Lease on Tenant's part to be observed
and performed, Landlord shall not unreasonably withhold or delay Landlord's
prior consent to sublettings by Tenant of all or parts of the Demised Premises.
Each such subletting shall be for undivided occupancy by the subtenant of that
part of the Demised Premises affected thereby for the use permitted under this
Lease and at no time shall there be more than four (4) occupants, including
Tenant, on any one floor; for the purposes of this sentence, the term "Tenant"
shall be deemed to include any Affiliate of Tenant, as the term Affiliate is
hereinafter defined. Landlord may, however, withhold such consent if, in
Landlord's reasonable judgment, the proposed subtenant is not engaged in a
business consistent with the character and dignity of the Building, or will
impose any additional material burden upon Landlord in the operation of the
Building (to an extent greater than the burden to which Landlord would have been
put if Tenant continued to use, or used, such part of the Demised Premises for
its own purposes), or if Landlord has any other reasonable objections to the
proposed sub-letting. If it is finally determined by a court of competent
jurisdiction that Landlord has unreasonably withheld or delayed its consent
contrary to the provisions of this Article, Landlord, nevertheless, shall not be
liable to Tenant for a breach of Landlord's covenant not unreasonably to
withhold such consent and Tenant's sole remedy in such event shall be to enter
into the proposed sub-letting. If the rent received by Tenant on account of a
sublease of all or any portion of the Demised Premises exceeds the Annual Fixed
Rent and Additional Rent, allocated to the space subject to the sublease in the
proportion of the area of such space to the area of the entire Demised Premises,
plus actual out-of-pocket expenses incurred by Tenant in connection with
Tenant's subleasing of such space, including brokerage commissions and the cost
of preparing such space for occupancy by the subtenant, Tenant shall pay to
Landlord seventy-five (75) percent of such excess, monthly as received by
Tenant. Notwithstanding the foregoing provisions of this paragraph (a), (1) in
the event Tenant proposes to sublet all or substantially all of the Demised
Premises, Landlord, at Landlord's option, may give to Tenant, within thirty (30)
days after the submission by Tenant to Landlord of the statement required to be
submitted in connection with such subletting, a notice terminating this Lease on
the date (referred to as the "Earlier Termination Date") immediately prior to
the proposed commencement date of the term of the proposed sub-letting, as set
forth in such statement, and, in the event such notice is given, the Term of
this Lease shall come to an end and expire on the Earlier Termination Date with
the same effect as if it were the date originally fixed in this Lease for the
end of the Term of the Lease, and the Annual Fixed Rent shall be apportioned as
of said Earlier Termination Date and any prepaid portion of Annual Fixed Rent
for any period after such date shall be refunded by Landlord to Tenant; or (2)
in the event Tenant proposes to sublet any portion of the Demised Premises,
Landlord, at Landlord's option, may give to Tenant, within thirty (30) days
after the submission by Tenant to Landlord of the statement required to be
submitted in connection with such proposed sub-letting, a notice electing to
eliminate such portion of the Demised Premises (said portion is referred to as
the "Eliminated Space") from the Demised Premises during the period (referred to
as the "Elimination Period") commencing on the date (referred to as the
"Elimination Date") immediately prior to the proposed commencement date of the
term of the proposed sub-letting, as set forth in such statement, and ending on
the proposed expiration date of the term of the proposed sub-letting, as set
forth in such statement, and in the event such notice is given (i) the
Eliminated Space shall be eliminated from the Demised Premises during the
Elimination Period; (ii) Tenant shall surrender the Eliminated Space to Landlord
on or prior to the Elimination Date in the same manner as if said Date were the
date originally fixed in this Lease for the end of the Term of this Lease; (iii)
if the Eliminated Space shall constitute less than an entire floor, Landlord, at
Landlord's expense, shall have the right to make any alterations and
installations in the Demised Premises required, in Landlord's judgment,
reasonably exercised, to make the Eliminated Space a self-contained rental unit
with access through corridors to the elevators and core toilets serving the
Eliminated Space, and if the Demised Premises shall contain any core toilets or
any corridors (including any corridors proposed to be constructed by Landlord
pursuant to this subdivision (iii) providing access from the Eliminated Space to
the core area), Landlord and any tenant or other occupant of the Eliminated
Space shall have the right to use such toilets and corridors in common with
Tenant and any other permitted occupants of the Demised Premises, and the right
to install signs and directional indicators in or about such corridors
indicating the name and location of such tenant or other occupant; (iv) during
the Elimination Period, the Annual Fixed Rent, the Escalation Factor and the
Original Electricity Factor (as such Factor may have been adjusted previously
pursuant to the provisions of this Lease) shall each be reduced in the
proportion which the area of the Eliminated Space bears to the total area of the
Demised Premises immediately prior to the Elimination Date (including an
equitable portion of the area of any corridors referred to in sub-division (iii)
of this sentence as part of the area of the Eliminated Space for the purpose of
computing such reduction), and any prepaid portion of Annual Fixed Rent for any
period after the Elimination Date allocable to the Eliminated Space shall be
refunded by Landlord to Tenant; (v) there shall be an equitable apportionment of
any Additional Rent payable pursuant to Article 5 and 6 for the Tax Year and
Operating Year in which said Elimination Date shall occur; (vi) if the
Elimination Period shall end prior to the date originally fixed in this Lease
for the end of the Term of the Lease, the Eliminated Space, in its then existing
condition, shall be deemed restored to and once again a part of the Demised
Premises during the period (referred to as the "Restoration Period") commencing
on the date next following the expiration of the Elimination Period and ending
on the date originally fixed in this Lease for the end of the Term of the Lease,
except in the event that Landlord is unable to give Tenant possession of the
Eliminated Space at the expiration of the Elimination Period by reason of the
holding over or retention of possession of any tenant or other occupant, in
which even (x) the Restoration Period shall not commence, and the Eliminated
Space shall not be deemed restored to or a part of the Demised Premises, until
the date upon which Landlord shall give Tenant possession of such Space free of
occupancies, (y) neither the date fixed in this Lease for the end of the Term of
the Lease, nor the validity of this Lease shall be affected, and (z) Tenant
waives any right to recover any damages which may result from the failure of
Landlord to deliver possession of the Eliminated Space at the end of the
Elimination Period; (vii) during the Restoration Period, if any, the Annual
Fixed Rent, the Escalation Factor and the Original Electricity Factor (as such
Factor may have been adjusted previously pursuant to the provisions of this
Lease) shall each be increased in the proportion which the area of the
Eliminated Space bears to the total area of the Demised Premises immediately
prior to the commencement of the Restoration Period (including an equitable
portion of the area of any corridors referred to in subdivision (iii) of this
sentence as a part of the area of the Eliminated Space for the purpose of
computing such increase); and (viii) there shall be an equitable apportionment
of any Additional Rent payable pursuant to Article 5 and 6 for the Tax Year and
Operating Year in which the Restoration Period, if any, shall commence. At the
request of Landlord, Tenant shall execute and deliver an instrument or
instruments, in form satisfactory to Landlord, setting forth any modifications
to this Lease contemplated in or resulting from the operation of the foregoing
provisions of this paragraph; however, neither Landlord's failure to request any
such instrument nor Tenant's failure to execute or deliver any such instrument
shall vitiate the effect of the foregoing provisions of this paragraph. The
failure by Landlord to exercise its option under this paragraph with respect to
any sub-letting shall not be deemed a waiver of such option with respect to any
extension or any subsequent sub-letting of the premises affected thereby.
Tenant shall reimburse Landlord promptly, as Additional Rent, for reasonable
legal and other expense incurred by Landlord in connection with any request by
Tenant for consent to assignment or sublet. Landlord's options set forth above
in this paragraph shall not apply if the proposed sub-letting is to an Affiliate
of Tenant. The term "Affiliate of Tenant" for the purposes of this paragraph
shall mean any corporation, partnership, trust, association or other business
organization, directly or indirectly (through other entities or otherwise),
owned or controlled by, owning or controlling, or under common ownership and
control with, Tenant.
(b) Tenant shall have the privilege, without the consent of Landlord, to
assign its interest in this Lease to any corporation which is a successor to
Tenant, either by merger or consolidation. However, no such assignment shall be
valid unless, within ten (10) days after the execution thereof, Tenant shall
deliver to Landlord (i) a duplicate original instrument of assignment in form
reasonably satisfactory to Landlord, duly executed by Tenant, and (ii) an
instrument in form and substance reasonably satisfactory to Landlord, duly
executed by the assignee, in which such assignee shall agree to observe and
perform, and to be personally bound by, all of the terms, covenants and
conditions of this Lease on Tenant's part to be observed and performed, whether
or not accruing prior to or after the date of such assignment and whether or not
relating to matters arising prior to such assignment.
(c) If Tenant's interest in this Lease is assigned, whether or not in
violation of the provisions of this Article, Landlord may collect rent from the
assignee; if the Demised Premises or any part thereof are sublet to, or occupied
by, or used by, any person other than Tenant, whether or not in violation of
this Article, Landlord, after default by Tenant under this Lease, may collect
rent from the subtenant, user or occupant. In either case, Landlord shall apply
the net amount collected to the rents reserved in this Lease, but neither any
such assignment, subletting, occupancy or use, whether with or without
Landlord's prior consent, nor any such collection or application, shall be
deemed a waiver of any term, covenant or condition of this Lease or the
acceptance by Landlord of such assignee, subtenant, occupant or user as tenant.
The consent by Landlord to any assignment or subletting shall not relieve Tenant
from its obligation to obtain the express prior consent of Landlord to any
further assignment or subletting. The listing of any name other than that of
Tenant on any door of the Demised Premises or on any directory or in any
elevator in the Building, or otherwise, shall not operate to vest in the person
so named any right or interest in this Lease or in the Demised Premises or be
deemed to constitute, or serve as a substitute for, any prior consent of
Landlord required under this Article, and it is understood that any such listing
shall constitute a privilege extended by Landlord which shall be revocable at
Landlord's will by notice to Tenant. Neither any assignment of Tenant's
interest in this Lease nor any subletting, occupancy or use of the Demised
Premises or any part thereof by any person other than Tenant, nor any collection
of rent by Landlord from any person other than Tenant as provided in this
paragraph, nor any application of any such rent as provided in this paragraph
shall, in any circumstances, relieve Tenant of its obligation fully to observe
and perform the terms, covenants and conditions of this Lease on Tenant's part
to be observed and performed.
ALTERATIONS AND INSTALLATIONS BY TENANT
11. (a) Tenant shall not make or perform, or permit the making or
performance of, any alterations, installations, improvements, additions or other
physical changes in or about the Demised Premises (referred to collectively as
"Alterations") without Landlord's prior consent. Landlord agrees not
unreasonably to withhold or delay its consent to any nonstructural Alterations
proposed to be made by Tenant to adapt the Demised Premises for Tenant's
business purposes or the business purposes of any other permitted occupant of
the Demised Premises; notwithstanding the foregoing, Landlord shall have no
obligation to consent to any Alteration which will reduce the value or utility
of the Building or affect the outside appearance or the common areas or
facilities of the Building or the color or style of any blinds supplied by
Landlord. Notwithstanding the foregoing provisions of this paragraph or
Landlord's consent to any Alterations, all Alterations, whether made prior to or
during the Term of this Lease, shall be made and performed in conformity with
and subject to the following provisions: all Alterations shall be made and
performed at Tenant's sole cost and expense and at such time and in such manner
as Landlord may reasonably from time to time designate; Alterations shall be
made only by contractors or mechanics approved by Landlord, such approval not
unreasonably to be withheld or delayed; no Alteration shall affect any part of
the Building other than the Demised Premises or adversely affect any service
required to be furnished by Landlord to Tenant or to any other tenant or
occupant of the Building; all business machines and mechanical equipment shall
be placed and maintained by Tenant in settings sufficient in Landlord's
reasonable judgment to absorb and prevent vibration, noise and annoyance to
other tenants or occupants of the Building; Tenant shall submit to Landlord
reasonably detailed plans and specifications for each proposed Alteration and
shall not commence any such Alteration without first obtaining Landlord's
approval of such plans and specifications, which approval will not be
unreasonably withheld or delayed; prior to the commencement of each proposed
Alteration, Tenant shall furnish to Landlord a duplicate original policy of
comprehensive public liability insurance (including property damage coverage) in
which Landlord and its agents shall be named as parties insured, which policies
shall be issued by companies and shall be in form and amounts reasonably
satisfactory to Landlord and shall be maintained by Tenant until the completion
of such Alteration; all Alterations in or to the electrical facilities in or
serving the Demised Premises shall be subject to the provisions of Article 21
relating to exceeding electrical capacity and to increases in the Annual Fixed
Rent; all fireproof wood test reports, electrical and air conditioning
certificates, and all other permits, approvals and certificates required by all
governmental authorities shall be timely obtained by Tenant and submitted to
Landlord; notwithstanding Landlord's approval of plans and specifications for
any Alteration, all Alterations shall be made and performed in full compliance
with all applicable laws, orders and regulations of Federal, State, County and
Municipal authorities and with all directions, pursuant to law, of all public
officers, and with all applicable rules, orders, regulations and requirements of
the Boston Board of Fire Underwriters and the New England Fire Insurance Rating
Association or any similar body having a similar function; all Alterations shall
be made and performed in accordance with the Rules and Regulations; all
materials and equipment to be incorporated in the Demised Premises as a result
of all Alterations shall be of good quality. All decorations made in the
Demised Premises by Tenant shall be made only by contractors or mechanics
approved by Landlord, such approval not unreasonably to be withheld or delayed.
If it is finally determined by a court of competent jurisdiction that Landlord
has unreasonably withheld or delayed its consent contrary to the provisions of
this Article, Landlord nevertheless shall not be liable to Tenant for breach of
Landlord's covenant to act reasonably, and Tenant's sole remedy in such event
shall be to proceed with the proposed Alterations.
(b) Tenant shall not, at any time prior to or during the Term of this
Lease, directly or indirectly employ, or permit the employment of, any
contractor, mechanic or laborer in the Demised Premises, whether in connection
with any Alteration or otherwise, if such employment will interfere or cause any
conflict with other contractors, mechanics, or laborers engaged in the
construction, maintenance or operation of the Building by Landlord, Tenant or
others.
(c) If Tenant shall be in default under this Article 11 by reason of the
making of any Alteration not hereby authorized or by reason of failure to give
any notice or to obtain any approval required herein, Tenant may cure such
default within the applicable grace period provided in this Lease for curing
such default by removing such Alteration and restoring the Demised Premises to
their former condition, as provided in Article 12 hereof.
(d) Except to the extent specifically provided in paragraph (e) of this
Article 11, all appurtenances, fixtures, improvements, additions and other
property attached to or installed in the Demised Premises, whether by Landlord
or Tenant or others, and whether at Landlord's expense, or Tenant's expense, or
the joint expense of Landlord and Tenant, which are of a permanent nature or
which cannot be removed without structural damage to the Building, shall be and
remain the property of Landlord. Any replacements of any property of Landlord,
whether made at Tenant's expense or otherwise, shall be and remain the property
of Landlord.
(e) All furniture, furnishings and trade fixtures, excepting lighting
fixtures and equipment, but including without limitation, murals, carpets, rugs,
business machines and equipment, vaults, vault door and door frame, and vault
equipment, if any, safe deposit equipment, counterscreens, grillwork, cages,
partitions which are moveable, railings, raised floors, escalators, conveyors,
stairs, elevators, panelling, equipment relating to food preparation, food
storage and serving, dishwashing and cleaning devices and air conditioning
equipment, and any moveable property, installed by or at the expense of Tenant
shall remain the property of Tenant and are referred to herein as "Tenant's
Special Installations". Tenant may at its expense remove all or any part of
said property at any time during the Term of this Lease, and shall at its
expense remove all of said property at the expiration or other termination of
the term hereof unless Landlord shall otherwise consent in writing. Upon
removal of any or all of said property Tenant shall then repair all damage
caused by said removal, as provided in Article 12 hereof.
(f) Notice is hereby given that Landlord shall not be liable for any labor
or materials furnished or to be furnished to Tenant upon credit, and that no
mechanic's or other lien for any such labor or materials shall attach to or
effect the reversion or other estate or interest of Landlord in and to the
Demised Premises. Whenever and as often as any mechanic's lien shall have been
filed against the Demised Premises or the Property based upon any act or
interest of Tenant or of anyone claiming through Tenant, or if any lien or
security interest with respect thereto shall have been filed affecting any
materials, machinery or fixtures used in the construction, repair or operation
thereof or annexed thereto by Tenant or its successors in interest, Tenant shall
forthwith take such action by bonding, deposit or payment as will remove or
satisfy the lien or other security interest and in default thereof after the
expiration of thirty (30) days after notice to Tenant, Landlord, in addition to
any other remedy under this Lease, may pay the amount secured by such lien or
security interest or discharge the same by deposit and the amount so paid or
deposited shall be collectible as Additional Rent. The provisions of this
paragraph (f) shall not be applicable to liens filed with respect to work done
for Tenant's account by Landlord.
CARE OF DEMISED PREMISES
12. (a) Tenant shall act with care in its use and occupancy of the
Demised Premises and the fixtures therein and, at Tenant's sole cost and
expense, shall make all repairs and replacements to the Demised Premises,
structural or otherwise, necessitated or occasioned by the acts, omissions or
negligence of Tenant or any person claiming through or under Tenant or by the
use or occupancy or manner of use or occupancy of the Demised Premises by Tenant
or any such person; however, the foregoing provisions of this paragraph shall be
subject to the provisions of Article 18.
Without affecting Tenant's obligations set forth in the preceding sentence,
Tenant, at Tenant's sole cost and expense, shall also (i) cause to be made all
replacements, as and when necessary to the lamps, tubes, ballasts and starters
in the lighting fixtures installed in the Demised Premises (Landlord shall make
available to Tenant a contractor who shall perform such service at Tenant's
expense), (ii) make all repairs and replacements, as and when necessary, to
Tenant's Special Installations and to any Alterations made or performed by or on
behalf of Tenant or any person claiming through or under Tenant and (iii)
perform all maintenance and make all repairs and replacements, as and when
necessary, to any air conditioning equipment, private elevators, escalators,
conveyors or mechanical systems (other than the Building's standard equipment
and systems) which may be installed in the Demised Premises, or elsewhere in the
Building and serving the Demised Premises, by Landlord, Tenant or others.
However, except as otherwise provided in this Lease, Tenant shall not have any
right to install air conditioning equipment, elevators, escalators, conveyors or
mechanical systems. In addition to the foregoing, all damage or injury to the
Demised Premises and to its fixtures, appurtenances and equipment or to the
Building or to its fixtures, appurtenances and equipment caused by Tenant moving
property in or out of the Building or by installation or removal of furniture,
fixtures or other property by Tenant shall be repaired, restored or replaced
promptly by Tenant at its sole cost and expense, to the reasonable satisfaction
of Landlord. All such aforesaid repairs, restoration and replacements shall be
in quality and class equal to the original work or installation but in no event
need exceed Building standards.
(b) Except as otherwise provided in paragraph (a) of this Article 12,
Landlord shall make the following repairs as and when necessary: (i) structural
repairs to the Demised Premises
and Building; (ii) repairs required in order to provide the elevator, plumbing,
electrical, heating and air conditioning services to be furnished by Landlord
pursuant to this Lease; (iii) repairs to exterior portions of the Building,
including the windows and roof thereof; and (iv) other repairs to the Building
necessary for Tenant's use and enjoyment of the Demised Premises. Landlord's
obligations under the immediately preceding sentence shall not accrue until
after notice by Tenant to Landlord of the necessity for any specific repair.
CLEANING
13. As long as Tenant is not in default under any of the terms, covenants
or conditions of this Lease on Tenant's part to be observed or performed, and
provided Tenant shall not keep the Demised Premises in unreasonable order,
Landlord, at Landlord's expense, shall cause (i) public portions of the
Property, and (ii) the Demised Premises, (including only the emptying of
wastebaskets and the vacuum cleaning of carpeting in any portions of the Demised
Premises used for the storage, preparation, service or consumption of food or
beverages, to be cleaned, substantially in accordance with the standards set
forth in Exhibit C. Subject to Landlord's obligations as hereinabove set forth,
Tenant, at Tenant's expense, shall cause all portions of the Demised Premises
used for the storage, preparation, service or consumption of food or beverages
to be cleaned daily in a manner satisfactory to Landlord, and to be treated
against infestation by vermin, roaches or rodents, regularly, in addition,
whenever there shall be evidence of any infestation. Landlord shall make
available to Tenant a contractor who shall perform additional cleaning services,
which may be required by Tenant, at Building standard rates.
MORTGAGES
14. (a) Except to the extent that it may be provided otherwise by written
agreement between Tenant and a Mortgagee, this Lease shall be superior, and
shall not be subordinated, to a Mortgage or to any other voluntary lien or
encumbrance affecting the Property, Land or Building or any part thereof and
hereafter granted by Landlord. Any Mortgagee shall have the right, at its
option, to subordinate its Mortgage to this Lease, in whole or in part, by
recording a unilateral declaration to such effect.
(b) Upon entry and taking possession of the property by a Mortgagee, for
the purpose of foreclosure or otherwise, such
Mortgagee shall have all the rights of Landlord, and shall be liable to perform
all the obligations of Landlord arising during the period of such possession,
provided, however, that upon the return of possession to Landlord by such
Mortgagee, such rights and obligations of Mortgagee shall cease until a
subsequent entry.
(c) No act or failure to act on the part of Landlord which would entitle
Tenant under the terms of this Lease, or by law, to be relieved of Tenant's
obligations hereunder or to terminate this Lease, shall result in a release or
termination of such obligations or a termination of this Lease unless (i) Tenant
shall have first given written notice of Landlord's act or failure to act to
first Mortgagees of record, if any, and to any other Mortgagees of whom Tenant
has been given written notice, specifying the act or failure to act on the part
of Landlord which could or would give basis to Tenant's rights; and (ii) such
Mortgagees, after receipt of such notice, have failed or refused to correct or
cure the condition complained of within a reasonable time thereafter; but
nothing contained in this paragraph (c) shall be deemed to impose any obligation
on any such Mortgagees to correct or cure any such condition. "Reasonable time"
as used above means and includes a reasonable time to obtain possession of the
Property if any such Mortgagee elects to do so and a reasonable time to correct
or cure the condition if such condition is determined to exist.
(d) Notwithstanding any other provision to the contrary contained in this
Lease, if prior to substantial completion of Landlord's obligations (if any)
under Article 7 any holder of a Mortgage enters and takes possession of the
Property for the purpose of foreclosing such Mortgage, such holder may elect, by
written notice given to Tenant and Landlord at any time within 90 days after
such entry and taking of possession, not to perform Landlord's obligations under
Article 7, and in such event such holder and all persons claiming under it shall
be relieved of all obligations to perform, and all liability for failure to
perform, said Landlord's obligations under Article 7 and Tenant may terminate
this Lease and all its obligations hereunder by written notice to Landlord and
such holder given within 30 days after the day on which such holder shall have
given its notice as aforesaid.
(e) No Annual Fixed Rent, Additional Rent or any other charge shall be
paid more than thirty (30) days prior to the due dates thereof and, as to a
first Mortgagee of record and any other Mortgagees of whom Tenant has been given
written notice, payments made in violation of this provision shall (except to
the extent that such rents are actually received by such Mortgagee) be a nullity
as against such Mortgagee and the Lessee shall be liable for the amount of such
payments to such Mortgagee.
(f) The covenants and agreements contained in this Lease with respect to
the rights, powers and benefits of a Mortgagee (particularly, without limitation
thereby, the covenants and agreements contained in this Article 14) constitute a
continuing offer to any person, corporation or other entity, which by accepting
or requiring an assignment of this Lease or by entry or foreclosure assumes the
obligations herein set forth with respect to such Mortgagee; every such
Mortgagee is hereby constituted a party to this Lease as an obligee hereunder to
the same extent as though its name was written hereon as such; and such
Mortgagee shall be entitled to enforce such provisions in its own name.
(g) Notwithstanding the foregoing provisions of this Article 14, Tenant
agrees, at Landlord's request, to execute and deliver promptly any certificate
or other instrument which Landlord may request subordinating the Lease and all
rights of Tenant under the Lease to any Mortgage, and to all advances made under
any such Mortgage, provided that (i) the holder of any such Mortgage shall
execute and deliver to Tenant a non-disturbance agreement to the effect that, in
the event of any foreclosure of such Mortgage, such holder will not name Tenant
as a party defendant to such foreclosure nor disturb its possession under the
Lease so long as there shall be no default by Tenant under the Lease, or (ii)
any such Mortgage shall contain provisions substantially to the same effect as
those contained in such a non-disturbance agreement.
(h) Nothing contained in the foregoing paragraph (g) or in any such
non-disturbance agreement or non-disturbance provision shall, however, affect
the prior rights of the holder of any first Mortgage with respect to the
proceeds of any award in condemnation or of any fire insurance policies
affecting the Building, or impose upon any such holder any liability (i) in the
event of damage or destruction to the Building or the Demised Premises by fire
or other casualty, for any repairs, replacements, rebuilding or restoration
except such repairs, replacements, rebuilding or restoration as can reasonably
be accomplished from the net proceeds of insurance actually received by, or made
available to, such holder, or (ii) for any default by Landlord under the Lease
occurring prior to any date upon which such holder shall become Tenant's
landlord, or (iii) for any credits, offset or claims against the rent under the
Lease as a result of any acts or omissions of Landlord committed or omitted
prior to such date, and any such agreement or provision may so state.
(i) With reference to any assignment by Landlord of its interest in this
Lease and/or any sums payable hereunder, conditional in nature or otherwise,
which assignment is made to or held by a bank, trust company, insurance company
or other
institutional lender holding a Mortgage on the Building, Landlord and Tenant
agree:
(a) that the execution thereof by Landlord and acceptance thereof by
such Mortgagee shall never be deemed an assumption by such Mortgagee of any of
the obligations of Landlord hereunder, unless such Mortgagee shall, by written
notice sent to the Tenant, specifically otherwise elect; and
(b) that, except as aforesaid, such Mortgagee shall be treated as
having assumed Landlord's obligations hereunder only upon foreclosure of such
Mortgagee's Mortgage and the taking of possession of the Demised Premises after
having given notice of its intention to succeed to the interest of Landlord
under this Lease.
COMPLIANCE WITH LAWS, ETC.
15. (a) Tenant shall, at its expense, comply with the requirements of
every applicable present or future law, ordinance, rule or order of Federal,
State, County and Municipal authority, and with any direction made pursuant to
law of any public officer or officers, with respect to the use of the Demised
Premises, including the making of any Alteration, structural or otherwise, to
the Demised Premises, and with respect to any abatement of nuisance, violation,
order or duty arising from Tenant's use of the Demised Premises or from
conditions created by or at the instance of Tenant or required by reason of a
breach of any of Tenant's covenants or agreements hereunder. Without limiting
the generality of the foregoing, Tenant shall be responsible for compliance with
requirements imposed by the Americans with Disabilities Act relative to the
Demised Premises, including without limitation all such requirements applicable
to removing barriers, furnishing auxiliary aids and ensuring that, whenever
Alterations are made, the affected portions of the Demised Premises are readily
accessible to and usable by individuals with disabilities. If Tenant receives
written notice of any violation of law, ordinance, rule, order or regulation
applicable to the Demised Premises, it shall give prompt notice thereof to
Landlord. Except as hereinabove set forth, Landlord shall be responsible for
compliance with all laws, ordinances, rules, orders and regulations governing
the Property to the extent applicable to Landlord's work under Article 7 or
necessary in order to assure Tenant's continuing ability to use the Demised
Premises for general office purposes.
(b) If Tenant should desire to contest the validity or application of any
such law, ordinance, rule, order or regulation with which Tenant is obligated to
comply, it may, at its expense, carry on such contest; and non-compliance by it
during such contest shall not constitute a breach of this Lease provided that
(i) it shall, to the satisfaction of Landlord, indemnify and hold Landlord
harmless against the cost of non-compliance and against all liability for any
loss, damages, and expenses (including reasonable attorneys' fees) which might
result from or be incurred in connection with such contest or non-compliance,
(ii) such contest shall be diligently prosecuted, (iii) non-compliance shall not
subject Landlord to any fine or penalty or to prosecution for a crime or
offense, and (iv) non-compliance shall not continue for more than thirty (30)
days if such non-compliance shall constitute a default under any first Mortgage
of record or under any other Mortgage, the terms of which Tenant has written
notice, not waived by the Mortgagee.
(c) Tenant shall not do or permit to be done any act or thing upon the
Demised Premises which will invalidate or be in conflict with the Massachusetts
standard form of fire, boiler, sprinkler, water damage or other insurance
policies covering the Property, and will not bring or keep anything on the
Demised Premises except as provided in paragraph (e) of this Article 15 which
shall increase the rate of any such insurance policy. Tenant shall comply, in
the conduct of its business and in the making of any Alterations, with all
rules, orders, regulations or requirements of the Boston Board of Fire
Underwriters and the New England Fire Insurance Rating Association or any other
body having a similar function and exercising jurisdiction over the Demised
Premises.
(d) If, by reason of any failure of Tenant to comply with any provision of
this Lease, the rate for fire, boiler, sprinkler, water damage or other
insurance (with or without extended coverage) on the Property or equipment of
Landlord shall be higher than it otherwise would be, Tenant shall pay Landlord
as Additional Rent an amount equal to that part of the premiums for such
insurance thereafter paid by Landlord which shall have been charged because of
such failure by Tenant. In the event that any dispute should arise between
Landlord and Tenant, a schedule or "make-up" of rates for the Building or the
Demised Premises issued by the New England Fire Insurance Rating Association or
any similar body having a similar function shall be conclusive evidence of the
facts therein stated and of the several items and charges in the rate for any
such insurance then applicable to the Building or the Demised Premises. Tenant
shall not be responsible for any increase in fire insurance rates generally
applicable to office space in Boston and not resulting from the particular
manner in which Tenant uses the Demised Premises.
(e) Tenant shall not bring or permit to be brought or kept in or on the
Demised Premises any toxic, hazardous, inflammable, combustible or explosive
fluid, material, chemical or substance except standard cleaning fluid, standard
equipment and materials (including magnetic tape) customarily used in
conjunction with business machines and equipment of the type used from time to
time by Tenant in reasonable quantities and provided that Tenant shall pay, as
Additional Rent, any increased insurance premiums resulting therefrom.
LANDLORD'S LIABILITY
16. Except for damage or injury arising from any omission, fault,
negligence or other misconduct of Landlord, Landlord shall not be liable for any
damage or injury to personal property of Tenant, or of any other person, done or
occasioned by or from the heating, elevator, ventilating or air-conditioning
systems, electric wiring, plumbing dampness, water, gas, steam, or other pipes,
or sewage, or the breaking of any electric wire, the bursting, leaking or
running of water from any tank, washstand, water closet or waste pipe, sprinkler
system, radiator, or any other pipe in, above, upon, or about the Building or
the Demised Premises, or which may at any time hereafter be so placed; or for
any damage to Tenant's Special Installations, Alterations or Tenant's personal
property occasioned by fire, explosion, falling plaster, electricity, smoke or
wind, or water, snow, or ice being upon or coming through or from the street,
roof, subsurface, skylight, trap-door, windows or otherwise; or for any damage
or injuries to persons or property arising from acts or neglect of any tenant or
occupant of the Building, or any owners or occupants of adjacent or contiguous
property, or for the loss or theft of any property of Tenant however occurring,
including loss of property entrusted to employees of Landlord. If at any time
any windows of the Demised Premises are blocked-up, closed-off or darkened,
Landlord shall not be liable for any damage Tenant may thereby sustain and
Tenant shall not be entitled to any compensation therefor or to any abatement of
Annual Fixed Rent or Additional Rent or released from any of its obligations
hereunder or be considered thereby to have been evicted. Landlord shall not be
liable for any latent defects in the Demised Premises or the Building.
Tenant shall neither assert nor seek to enforce any claim for breach of
this Lease against any of Landlord's assets other than Landlord's interest in
the Property, and Tenant agrees to look solely to such interest for the
satisfaction of any liability of Landlord hereunder, it being specifically
agreed that in no event shall Landlord (which term shall include, without
limitation, any of the officers, trustees, directors, partners, beneficiaries,
joint venturers, members, stockholders or other principals or representatives,
disclosed or undisclosed, of Landlord) ever be personally liable for any such
liability. In no event shall Landlord ever be liable for indirect or
consequential damages.
DAMAGE BY FIRE OR OTHER CASUALTY
17. In the event of loss of, or damage to, the Demised Premises or the
Building by fire or other casualty, the rights and obligations of the parties
hereto shall be as follows:
(a) If the Demised Premises or any part thereof shall be damaged by fire
or other casualty, Tenant shall give prompt notice thereof to Landlord, and
Landlord, upon receiving such notice, shall proceed promptly and with reasonable
diligence, subject to Unavoidable Delays and a reasonable time for adjustment of
insurance losses, to repair, or cause to be repaired, such damage in a manner
designed to minimize interference with Tenant's occupancy (but with no
obligation to employ labor at overtime or other premium pay rates). Landlord
shall furnish to Tenant, as soon as practicable following such fire or other
casualty, an estimate of the time required to repair such damage and restore the
Demised Premises to reasonably the same condition as they were in prior to such
damage. If, according to such estimate, such work is not expected to be
completed within nine (9) months from the date of such damage, Tenant, within
ten (10) days from the furnishing of such estimate, may terminate this Lease by
notice to Landlord, specifying a date not more than sixty (60) days after the
giving of such notice on which the Term of this Lease shall expire as fully and
completely as if such date were the date herein originally fixed for the
expiration of the Term of this Lease. If the Demised Premises or any part
thereof shall be rendered untenantable by reason of any damage caused by fire or
other casualty, whether to the Demised Premises or the Building, the Annual
Fixed Rent (and Additional Rent pursuant to Articles 5 and 6) shall
proportionately abate with respect thereto (except as otherwise provided in
Article 18) for the period from the date of such damage to the date when such
damage shall have been repaired for the portion of the Demised Premises rendered
untenantable. However, if, prior to the date when all of such damage shall have
been repaired, any part of the Demised Premises so damaged shall be rendered
tenantable and shall be used or occupied by Tenant or any person or persons
claiming through or under Tenant, then the amount by which the Annual Fixed Rent
shall abate shall be equitably apportioned for the period from the date of any
such use.
(b) If as a result of fire or other casualty a substantial portion of the
Building is rendered untenantable, Landlord within ninety (90) days from the
date of such fire or casualty may terminate this Lease by notice to Tenant,
specifying a date, not less than twenty (20) nor more than forty (40) days after
the giving of such notice, on which the Term of this Lease shall expire as fully
and completely as if such date were the date herein originally fixed for the
expiration of the Term of this Lease. The Annual Fixed Rent shall be
apportioned as of the date of such fire or other casualty. If Landlord does not
so elect to terminate this Lease, then Landlord shall proceed to repair the
damage to the Demised Premises, if any shall have occurred, and the Annual Fixed
Rent (and Additional Rent pursuant to Articles 5 and 6) shall meanwhile be
apportioned and abated all as provided in paragraph (a) of this Article 17.
However, if such damage is not repaired and the Demised Premises restored to
reasonably the same condition as they were prior to such damage within nine (9)
months from the date of such damage (such nine (9) months to be extended by the
period of any Unavoidable Delays plus a reasonable time for adjustment of
insurance losses, provided however that such period shall in no event be
extended by more than six (6) additional months), Tenant, within thirty (30)
days from the expiration of such nine (9) months (as the same may be extended),
may terminate this Lease by notice to Landlord, specifying a date not more than
sixty (60) days after the giving of such notice on which the Term of this Lease
shall expire as fully and completely as if such date were the date herein
originally fixed for the expiration of the Term of this Lease.
(c) If the Demised Premises shall be rendered untenantable to the extent
of eighty (80%) percent or more by fire or other casualty during the last two
years of the Term of this Lease, Landlord or Tenant may terminate this Lease
upon notice to the other party given within ninety (90) days after such fire or
other casualty specifying a date, not less than twenty (20) days nor more than
forty (40) days after the giving of such notice, on which the Term of this Lease
shall expire as fully and completely as if such date were the date originally
fixed for the expiration of the Term of this Lease.
(d) Landlord shall not be required to repair or replace any of Tenant's
Special Installations or Alterations or any other personal property of Tenant
and no damages, compensation or claim shall be payable by Landlord for
inconvenience, loss of business or annoyance arising from any repair or
restoration of any portion of the Demised Premises or of the Building, but the
foregoing should not be deemed to relieve Landlord of liability for its breach
of any covenant of this Lease.
(e) The provisions of this Article 17 shall be considered an express
agreement governing any instance of damage or destruction of the Building or the
Demised Premises by fire or other casualty, and any law now or hereafter in
force providing for such a contingency in the absence of express agreement shall
have no application.
FIRE INSURANCE, ETC.
18. (a) Landlord shall, throughout the Term of this Lease, at its
expense, keep the Building, other than Tenant's Special Installations (and any
furniture, furnishings, trade fixtures or property removable by Tenant under the
provisions of this Lease), insured against all loss or damage by fire with
extended coverage in such amount as any Mortgagee may require. Tenant shall,
throughout the Term of this Lease, at its expense, keep Tenant's Special
Installations and Tenant's personal property insured against all loss or damage
by fire with extended coverage in an amount sufficient to prevent Tenant from
becoming a co-insurer. All such policies of insurance shall contain, if
available from the insurer, an appropriate clause or endorsement under which the
insurer agrees that such policy shall not be cancelled without at least ten (10)
days notice to both Landlord and Tenant. Should any additional premium or fee
be exacted for any such clause, or endorsement, the party obligated to obtain
the same shall be released from such obligation unless the other party shall
agree to pay such additional premium or fee.
(b) Each policy of fire and extended coverage insurance taken out by
either Landlord or Tenant relating to the Building, other improvements on the
Property used in connection with or appurtenant to the Building, the Demised
Premises or Tenant's Special Installations or Tenant's personal property shall
contain, if available from the insurer, appropriate clauses or endorsements
under which the insurer agrees that such policy shall not be invalidated should
the insured waive in writing prior to a loss any or all right of recovery
against any party for loss payable under such policy (any such or similar
provisions are referred to in this Article as "Waiver Provisions") or, if such
Waiver Provisions are not available from the insurer, Landlord or Tenant, as the
case may be, shall have the other named in said policy or policies as an assured
party. In the event that, at any time, any fire insurance carrier shall exact
an additional premium for the inclusion of Waiver Provisions, or for naming the
other party as an assured party, the party obtaining such insurance shall give
notice of such premium to the other party. In such event, if the other party
agrees, in writing, to reimburse the party obtaining such insurance for such
additional premium for the term of such policy but not beyond the remainder of
the Term of this Lease, the party obtaining such insurance shall require the
inclusion of Waiver Provisions in such policy, or shall have the other party
named in such policies as an assured party, as the case may be, and in the
absence of such agreement the party obtaining such insurance shall not be
required to include said Waiver Provisions or to have the other party so named.
As long as Waiver Provisions are included in Landlord's fire insurance policies
then in force, or Tenant shall be named in said policies as an assured party,
Landlord hereby waives (i) any obligation on the part of Tenant to make repairs
to the Demised Premises necessitated or occasioned by fire or other casualty
that is an insured risk under such policies, and (ii) any right of recovery
against Tenant for any loss covered by such policies. Notwithstanding the
provisions of paragraph (a) of Article 17, if the Demised Premises are damaged
by fire or other casualty due to the fault or neglect of Tenant or any person
claiming through or under Tenant, at any time when the foregoing waivers by
Landlord are not in effect in accordance with the provisions of this paragraph,
then there shall be no abatement of Annual Fixed Rent by reason of such damage.
As long as Waiver Provisions are included in Tenant's fire insurance policies
then in force or Landlord shall be named in such policies as an assured party,
Tenant hereby waives (and agrees to cause any other permitted occupants of the
Demised Premises to execute and deliver to Landlord written waivers of) any
right of recovery against Landlord for any loss covered by such policies. As
long as Waiver Provisions are included in Tenant's fire insurance policies then
in force, Tenant further hereby waives (and agrees to cause any other permitted
occupants of the Demised Premises to execute and deliver to Landlord written
waivers of) any right of recovery against any other tenants or occupants of the
Building for any loss covered by such policies. In the event that at any time
the insurance carrier shall not include Waiver Provisions in any of the policies
aforesaid, and the other party shall not be named in such policies as an assured
party in accordance with the foregoing provisions of this paragraph, the waivers
set forth in the foregoing provisions of this paragraph shall, upon notice given
by the party obtaining such policies to the other party, be deemed of no further
force or effect. In the event Tenant shall be named in Landlord's policies as
an assured party in accordance with the foregoing provisions of this paragraph,
Tenant agrees to endorse promptly, without recourse, any check, draft or order
for the payment of money representing the proceeds of any such policies or
representing any other payments accruing out of or connected with any such
policies, and Tenant does hereby irrevocably waive any and all rights in and to
such proceeds and agrees that it shall have no right to participate in the
settlement of any loss under any such policy. In the event Landlord shall be
named in any of Tenant's policies as an assured party in accordance with the
foregoing provisions of this paragraph, Landlord agrees to endorse promptly,
without recourse, any check, draft, or order for the payment of money
representing the proceeds of any such policies or representing any other
payments accruing out of or connected with any such policies, and Landlord does
hereby irrevocably waive any and all rights in and to any such proceeds and
payments and agrees that Landlord shall not have any right to participate in the
settlement of any loss under any such policy.
(c) Landlord and Tenant will (i) if requested, advise the other as to the
provisions of fire and extended coverage insurance policies obtained pursuant to
this Article 18 and (ii) notify the other promptly of any change of the terms of
any such policy which would affect such provisions.
(d) With respect to all other policies of insurance not referred to in
paragraphs (a) and (b) of this Article 18 taken out by Landlord or Tenant
relating to the Building, other improvements on the Property used in connection
with or appurtenant to the Building, the Demised Premises or Tenant's Special
Installations or Tenant's personal property, (i) to the extent that such action
will not invalidate any such policy, and (ii) to the extent of actual recovery
under such policy, Landlord and Tenant hereby waive all right of recovery which
each might otherwise have against the other, its servants, agents and employees,
for any loss or damage to the Building, other improvements and personal property
on the Property used in connection with or appurtenant to the Building, the
Demised Premises or Tenant's Special Installations or Tenant's personal
property, as the case may be, covered by such policy, notwithstanding that such
loss or damage may result from the negligence or fault of the other, its
servants, agents or employees.
CONDEMNATION
19. (a) In the event of a Taking of the whole of the Demised Premises,
this Lease and the Term of this Lease shall terminate as of the date of such
Taking. If only a part of the Demised Premises shall be so taken then, except
as otherwise provided in this paragraph, this Lease and the Term of this Lease
shall continue in force and effect but, from and after the date of the Taking,
the Annual Fixed Rent (and Additional Rent pursuant to Articles 5 and 6) shall
be equitably reduced on the basis of the portion of the Demised Premises so
taken. If a part of the Property shall be taken, then (i) if the part of the
Property so taken shall contain more than ten (10%) per cent of the total area
of the Demised Premises immediately prior to such Taking, or (ii) if, in
Landlord's reasonable opinion it shall be impracticable to continue to operate
the Building, Landlord, at Landlord's option, may give to Tenant within sixty
(60) days next following the date upon which Landlord shall have received notice
of the Taking, a thirty (30) days' notice of termination of this Lease, and
(iii) if the part of the Property so taken shall contain more than fifty (50%)
per cent of the total area of the Demised Premises immediately prior to such
Taking, or if, by reason of such Taking Tenant no longer has reasonable means of
access to the Demised Premises, Tenant, at Tenant's option may give to Landlord
within sixty (60) days next following the date upon which Tenant shall have
received notice of such Taking, a thirty (30) days' notice of termination of
this Lease. In the event any such thirty (30) days' notice of termination is
given by Landlord or Tenant, this Lease and the Term of this Lease shall
terminate upon the expiration of said thirty (30) days. In the event of the
termination of this Lease pursuant to any of the foregoing provisions of this
paragraph (a) then, to the extent permitted by applicable law and such taking,
Tenant shall have access to the Demised Premises in order to remove Tenant's
Special Installations and any other personal property then owned by Tenant and
which Tenant is entitled to remove pursuant to this Lease during the period of
thirty (30) days from the date Tenant is permitted access therefor. In the
event of any Taking which does not result in the termination of this Lease,
Landlord shall repair, alter and restore the remaining portions of the Demised
Premises to their former condition to the extent that the same may be feasible.
(b) Landlord shall have the exclusive right to receive any and all awards
made for damages to the Property, Demised Premises, Building and leasehold
hereby created, or any one or more of them accruing by reason of a taking or by
reason of anything lawfully done in pursuance of public or other authority.
Tenant hereby releases and assigns to Landlord all Tenant's rights to such
awards, and covenants to deliver such further assignments and assurances thereof
as Landlord may from time to time request, hereby irrevocably designating and
appointing Landlord as its attorney-in-fact to execute and deliver in Tenant's
name and behalf all such further assignments thereof.
However, Tenant reserves any rights to any award for its moving expenses or
to any other special award not constituting part of the compensation for the
Property and not diminishing the amount of the award to which Landlord would
otherwise be entitled.
LANDLORD'S ACCESS TO DEMISED PREMISES
20. (a) Landlord and its agents shall have the following rights in and
about the Demised Premises: (i) to enter the Demised Premises at all times to
examine the Demised Premises or for any of the purposes set forth in this
Article or for the purpose of performing any obligation of Landlord under this
Lease or exercising any right or remedy reserved to Landlord in this Lease, and
if Tenant, its officers, partners, agents or employees shall not be personally
present or shall not open and permit an entry into the Demised Premises at any
time when such entry shall be necessary or permissible, to use a master key or
forcibly to enter the Demised Premises; (ii) to erect, install, use and maintain
pipes, ducts and conduits in and through the Demised Premises which, when
completed, will not substantially interfere with the use or appearance or
materially reduce the space afforded to Tenant in the Demised Premises; (iii) to
exhibit the Demised Premises to others at reasonable times and for reasonable
purposes (provided however that the Demised Premises may be so exhibited to
prospective tenants only during the last twelve (12) months of the Term of this
Lease); (iv) to make such decorations, repairs, alterations, improvements or
additions, or to perform such maintenance, including, but not limited to, the
maintenance of all heating, air conditioning, elevator, plumbing, electrical and
other mechanical facilities installed by Landlord, as Landlord may deem
necessary or desirable; (v) to take all materials into and upon the Demised
Premises that may be required in connection with any such decorations, repairs,
alterations, improvements, additions or maintenance; and (vi) to alter, renovate
and decorate the Demised Premises at any time during the Term of this Lease if
Tenant shall have removed all or substantially all of Tenant's property from the
Demised Premises.
(b) All parts (except surfaces facing the interior of the Demised
Premises) of all walls, windows and doors bounding the Demised Premises
(including exterior Building walls, corridor walls, door and entrances), all
balconies, terraces and roofs adjacent to the Demised Premises, all space in or
adjacent to the Demised Premises used for shafts, stacks, stairways, chutes,
pipes, conduits, ducts, fan rooms, heating, air conditioning, plumbing,
electrical and other mechanical facilities installed by Landlord, service
closets and other Building facilities, and the use thereof, as well as access
thereto through the Demised Premises for the purposes of operation, maintenance,
alteration and repair, are hereby reserved to Landlord. Landlord also reserves
the right at any time to change the arrangement or location of entrances,
passageways, doors, doorways, corridors, elevators, stairs, toilets and other
public parts of the Building, provided any such change does not unreasonably
obstruct Tenant's access to the Demised Premises. Nothing contained in this
Article shall impose any obligation upon Landlord with respect to the operation,
maintenance, alteration or repair of the Demised Premises or the Building.
(c) Landlord and its agents shall have the right to permit access to the
Demised Premises, whether or not Tenant shall be present, to any receiver,
trustee, assignee for the benefit of creditors, sheriff, marshal or court
officer entitled to, or reasonably purporting to be entitled to, such access for
the purpose of taking possession of, or removing, any property of Tenant or any
other occupant of the Demised Premises, or for any lawful purpose, or by any
representative of the fire, police,building, health or other department of the
City, County, State or Federal Governments. Neither anything contained in this
paragraph, nor any action taken by Landlord under this paragraph, shall be
deemed to constitute recognition by Landlord that any person other than Tenant
has any right or interest in this Lease or the Demised Premises. Landlord
shall, unless otherwise instructed by the person seeking such access, endeavor
to give Tenant oral notice prior to permitting access to the Demised Premises
pursuant to the provisions of this paragraph.
(d) The exercise by Landlord or its agents of any right reserved to
Landlord in this Article shall not constitute an actual or constructive
eviction, in whole or in part, or entitle Tenant to any abatement or diminution
of rent, or relieve Tenant from any of its obligations under this Lease, or
impose any liability upon Landlord, or its agents, or upon any lessor under any
ground or underlying lease, by reason of inconvenience or annoyance to Tenant,
or injury to or interruption of Tenant's business, or otherwise. Landlord
agrees to exercise its rights under this Article in a manner designed to
minimize interference with Tenant's normal business operations, without any
obligation, however, to employ labor at so-called "over-time" or other premium
pay rates, and only (except in case of emergency) after prior oral or written
notice to Tenant.
ELECTRICITY
21. (a) Landlord shall furnish the electrical energy that Tenant shall
require for operation of the fixtures, appliances and equipment hereinafter
referred to without charge to Tenant by way of measuring the same on any meter
or otherwise, except as hereinafter provided. Landlord shall not be liable in
any way to Tenant for any failure or defect in the supply or character of
electrical energy furnished to the Demised Premises by reason of any
requirement, act or omission of the public utility serving the Building with
electricity. Tenant's use of electrical energy in the Premises shall not at any
time exceed the capacity of any of the electrical conductors and equipment in or
otherwise serving the Demised Premises. In order to insure that such capacity
is not exceeded and to avert possible adverse effect upon the Building
electrical service, Tenant shall give notice to Landlord whenever Tenant shall
connect to the Building electrical distribution system any fixtures, appliances
or equipment other than lamps, typewriters and similar small office machines.
Any additional feeders or risers to supply Tenant's electrical requirements in
addition to those originally installed, and all other equipment proper and
necessary in connection with such feeders or risers, shall be installed by
Landlord upon Tenant's request, at the sole cost and expense of Tenant, provided
that, in Landlord's reasonable judgment, such additional feeders or risers are
permissible under applicable laws and insurance regulations and the installation
of such feeders or risers will not cause permanent damage or injury to the
Building or cause or create a dangerous condition or unreasonably interfere with
other tenants of the Building.
(b) If the public utility rate for quantity (Demand Charge) and/or for
rate of taking of electrical energy (Energy Charge) connected with the supply of
electric current to the Building shall be increased or decreased, the Annual
Fixed Rent herein reserved shall be equitably adjusted to reflect the resulting
increase or decrease in Landlord's cost of furnishing electric energy to the
Demised Premises. If Landlord and Tenant cannot agree thereon, the amount of
such adjustments shall be conclusively determined by a reputable, independent
electrical engineer or electrical consulting firm, to be selected by Landlord
and paid equally by both parties. When the amount of such adjustment is so
determined, the parties shall execute an agreement supplementary hereto to
reflect such adjustment in the amount of the Annual Fixed Rent effective from
the effective date of such increase or decrease in the public utility rate.
(c) From time to time, Landlord may have a survey made by a reputable,
independent electrical engineer or electrical consulting firm to be selected and
paid for by Landlord to determine the value to Tenant of the electrical energy
then being furnished to the Demised Premises by Landlord. If it is determined
that such value is in excess of the Original Electrical Factor as it may
previously have been adjusted and reflected in the Annual Fixed Rent pursuant to
this paragraph (c) or paragraph (b) of this Article 21, as the case may be, then
Tenant hereby agrees to an increase in the Annual Fixed Rent in an amount which
will reflect such excess. Such increase in the Annual Fixed Rent shall become
effective on the date recommended by such engineer or consulting firm, provided
that such date is equitable. Any such increase in the Annual Fixed Rent shall
be retroactive to the extent necessary; however, no such increase shall be
retroactive to a date more than two (2) years prior to the date of the survey
upon which it is based.
(d) Landlord reserves the right to discontinue (provided that electricity
shall be otherwise available to Tenant from the local utility) furnishing
electric energy to Tenant in the Demised Premises at any time upon not less than
30 days' notice to Tenant. If Landlord exercises such right of termination, (i)
from and after the effective date of such termination Landlord shall not be
obligated to furnish electrical energy to Tenant and the Annual Fixed Rent shall
be reduced by the Original Electrical Factor as it may previously have been
adjusted and reflected in the Annual Fixed Rent pursuant to paragraphs (b) and
(c) of this Article 21, (ii) Tenant shall arrange to obtain electrical energy
directly from the public utility company furnishing electric service to the
Building and such electrical energy may be furnished to Tenant by means of the
then existing Building system feeders, risers and wiring to the extent that the
same are available, suitable and safe for such purposes, and (iii) Landlord
agrees to pay such charges and costs, if any, as the public utility may impose
in connection with the installation of Tenant's meter, and will make or pay for
such changes to the electrical system as may be required so that Tenant may
obtain direct service.
DEFAULT OF TENANT
22. (a) If at any time subsequent to the date of this Lease any one or
more of the following events (herein referred to as "Default of Tenant") shall
happen:
(i) Tenant shall default in the due and punctual payment of the
Annual Fixed Rent payable hereunder and such default shall continue for ten
(10) days after notice to Tenant from Landlord; or
(ii) Tenant shall default in the due and punctual payment of any
Additional Rent payable hereunder and such default shall continue for
fifteen (15) days after notice to Tenant from Landlord; or
(iii) Tenant shall neglect or fail to perform or observe any other
covenant herein contained on Tenant's part to be performed or observed and
Tenant shall fail to remedy the same within thirty (30) days after notice
to Tenant from Landlord specifying such neglect or failure, or, if such
Default of Tenant is of such a nature that Tenant cannot reasonably remedy
the same within such thirty (30) day period, Tenant shall fail to commence
promptly to remedy the same and to prosecute such remedy to completion with
diligence and continuity; or
(iv) Tenant shall make an assignment for the benefit of creditors; or
(v) Tenant's leasehold interest in the Demised Premises shall be taken
on execution or by other process of law (other than a Taking) directed
against Tenant; or
(vi) Tenant shall file a voluntary petition in bankruptcy or shall be
adjudicated bankrupt or insolvent, or shall file any petition or answer
seeking any reorganization, arrangement, composition, readjustment,
liquidation or similar relief for itself under any present or future
Federal State, or other statute, law or regulation for the relief of
debtors, or shall seek or consent to or acquiesce in the appointment of any
trustee, receiver or liquidator of Tenant or of all or any substantial part
of its properties, or shall admit in writing its inability to pay its debts
generally as they become due; or
(vii) A petition shall be filed against Tenant in bankruptcy or under
any other law seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief under any present
or future Federal, State, or other statute, law or regulation and shall
remain undismissed or unstayed for an aggregate of one hundred twenty (120)
days (whether or not consecutive), or if any debtor in possession (whether
or not Tenant), trustee, receiver or liquidator of Tenant or of all or any
substantial part of its properties or of the Demised Premises shall be
appointed without the consent or acquiescence of Tenant and such
appointment shall remain unvacated or unstayed for an aggregate of one
hundred twenty (120) days (whether or not consecutive);
then in any such case Landlord may at any time thereafter terminate this Lease
by notice to Tenant, specifying a date not less than ten (10) days after the
giving of such notice on which this Lease shall terminate and this Lease shall
come to an end on the date specified therein as fully and completely as if such
date were the date herein originally fixed for the expiration of the Term of
this Lease, and Tenant will then quit and surrender the Demised Premises to
Landlord, but Tenant shall remain liable as hereinafter provided. All costs and
expenses incurred by or on behalf of Landlord (including, without limitation,
reasonable attorneys' fees and expenses) occasioned by any Default of Tenant
shall be paid by Tenant. In addition, any Annual Fixed Rent or Additional Rent
not paid when due shall bear interest at a rate which is two percent in excess
of the prime commercial lending rate from time to time established by The First
National Bank of Boston (or any other commercial bank designated by Landlord and
having its main office in Boston, Massachusetts). For purposes of the foregoing
subparagraphs (iv), (vi) and (vii), the term "Tenant" shall also be deemed to
include any guarantor of Tenant's obligations hereunder.
(b) If this Lease shall have been terminated as provided in this Article
22, or if any execution or attachment shall be issued against Tenant or any of
Tenant's property whereupon the Demised Premises shall be taken or occupied by
someone other than Tenant, then Landlord may, without notice, re-enter the
Demised Premises, either by force, summary proceedings, ejectment or otherwise,
and remove and dispossess Tenant and all other persons and any and all property
from the same, as if this Lease had not been made, and Tenant hereby waives the
service of notice of intention to re-enter or to institute legal proceedings to
that end.
(c) In the event of such termination, Tenant shall pay the Annual Fixed
Rent and other sums payable hereunder up to the time of such termination, and
thereafter Tenant, until the end of what would have been the Term of this Lease
in the absence of such termination, and whether or not the Demised Premises
shall have been relet, shall be liable to Landlord for, and shall pay to
Landlord, as liquidated current damages,
(i) the Annual Fixed Rent and other sums which would be payable
hereunder if such termination had not occurred, LESS
(ii) the net proceeds, if any, of any reletting after deducting all
expenses incurred by Landlord in connection therewith, including without
limitation all repossession costs, brokerage commissions, legal expenses,
attorney's fees, alteration costs and expenses of preparation for such
reletting.
Tenant shall pay such current damages to Landlord monthly on the days on which
the Annual Fixed Rent would have been payable hereunder if this Lease had not
been terminated, and Landlord shall be entitled to receive the same from Tenant,
on each day.
At any time after such termination, whether or not Landlord shall have
collected any such current damages, Landlord shall be entitled to recover from
Tenant and Tenant shall pay to Landlord, on demand, as liquidated final damages
and in lieu of all such current damages beyond the date of such demand, an
amount equal to the excess, if any, of
(i) the Annual Fixed Rent and other sums as hereinbefore provided
which would be payable hereunder from the date of such demand (or, if it be
earlier, the date to which Tenant shall have satisfied in full its
obligation under this Article 22 to pay current damages) for what would be
the then unexpired term of this Lease if the same remained in effect, LESS
(ii) the then fair net rental value of the Demised Premises for the
same period.
In the computation of such liquidated final damages the amount by which any
installment of Annual Fixed Rent and other sums shall exceed the fair and
reasonable rental value of the Demised Premises for the period for which such
installment of Annual Fixed Rent and other sums would have been payable, shall
be discounted at the rate of six percent (6%) per annum to the date of such
demand or to the date to which the Tenant shall have satisfied in full its
obligation to pay such current damages, as the case may be. If before
presentation of proof of such liquidated damages to any court, commission or
tribunal, the Demised Premises or any part thereof shall have been relet by
Landlord for the period which would otherwise have constituted the unexpired
portion of the Term of this Lease or any part thereof, the amount of rent
reserved on such reletting shall be deemed, prima facie, to be the fair and
reasonable rental value for the part or the whole of the Demised Premises so
relet during the term of the reletting.
If any statute or rule of law governing a proceeding in which such
liquidated final damages are to be proved shall validly limit the amount thereof
to an amount less than the amount above agreed upon, Landlord shall be entitled
to the maximum amount allowable under such statute or rule of law. Nothing
contained in this Article shall be deemed to limit or preclude the recovery by
Landlord from Tenant of the maximum amount allowed to be obtained in damages by
any statute or rule of law, or of any sums or damages to which Landlord may be
entitled in addition to the damages set forth in this Article.
(d) In case of any Default of Tenant, re-entry, expiration and
dispossession by summary proceedings or otherwise, Landlord may (i) re-let the
Demised Premises or any part or parts thereof, either in the name of Landlord or
otherwise, for a term or terms which may at Landlord's option be equal to or
less than or exceed the period which would otherwise have constituted the
balance of the Term of this Lease and may grant concessions or free rent to the
extent that the Landlord considers advisable and necessary to re-let the same
and (ii) may make such alterations, repairs and decorations in the Demised
Premises as Landlord in its reasonable judgment considers advisable and
necessary for the purpose of reletting the Demised Premises; and the making of
such alterations, repairs and decorations shall not operate or be construed to
release Tenant from liability hereunder as aforesaid. Landlord shall in no
event be liable in any way whatsoever for failure to re-let the Demised
Premises, or, in the event the Demised Premises are re-let, for failure to
collect the rent thereof under such re-letting. Tenant hereby expressly waives
any and all rights of redemption granted by or under any present or future laws
in the event of Landlord obtaining possession of the Demised Premises, by reason
of the violation by Tenant of any of the covenants and conditions of this Lease.
NAME OF BUILDING, TENANT'S SIGNS
23. (a) Landlord expressly reserves the right to have the Building
designated by a street number or numbers and to affix to the Building, at
locations designated by Landlord, signs indicating any such number or numbers
and the name of the Building as selected from time to time by the Landlord.
(b) Landlord has not granted to Tenant any rights in or to the outer side
of the outside walls of the of the Building, control of which is hereby reserved
by Landlord. Tenant shall not display or erect any lettering, signs,
advertisements, awnings or other projections on the exterior of the Demised
Premises or in the interior of the Demised Premises if visible from a public
way. Tenant shall have the right to display or
install lettering or signs in the elevator corridors of the Demised Premises,
however the exact location, design, size, color, materials and method of
installation of such lettering or signs shall be expressly subject to Landlord's
approval, such approval not unreasonably to be withheld or delayed.
(c) Landlord shall provide a directory in the main lobby of the Building,
at its expense, in which Landlord, at Tenant's expense, will include Tenant's
name and a reasonable number of names of its officers, partners, or employees.
The size, color and style of such directory and names included therein shall be
selected by Landlord.
REMEDYING DEFAULTS AND INDEMNITY
24. (a) If Tenant shall default in the observance or performance of any
term on its part to be observed or performed under or by virtue of any of the
terms or provisions in any Article of this Lease, Landlord, without being under
any obligation to do so and without thereby waiving such default, may remedy
such default for the account and at the reasonable expense of Tenant,
immediately and without notice in case of emergency, or, in any other case, if
Tenant shall fail to remedy such default within the applicable grace period. If
Landlord makes any expenditures or incurs any obligations for payment of money
in connection therewith, including, but not limited to, reasonable attorneys'
fees in instituting, prosecuting or defending any action or proceeding, such
sums paid or obligations incurred, with interest at the prime commercial lending
rate from time to time established by The First National Bank of Boston (or any
other commercial bank designated by Landlord and having its main office in
Boston, Massachusetts) and costs, shall be paid to it by Tenant as Additional
Rent hereunder.
(b) Tenant agrees to save harmless and indemnify Landlord from any
liability for injury, loss, accident or damage to any person or property, and
from any claims, actions, proceedings and expenses and costs in connection
therewith (including without limitation reasonable attorneys' fees), (i) arising
from the omission, fault, willful act, negligence or other misconduct of Tenant
or from any use made or thing done or occurring on the Demised Premises which is
not due to the omission, fault, willful act, negligence or other misconduct of
Landlord or (ii) resulting from the failure of Tenant to perform and/or
discharge its covenants and obligations under this Lease. If any action or
proceeding shall be brought against Landlord based upon any of the foregoing,
and if Tenant, upon notice from Landlord, shall cause such action or proceeding
to be defended at Tenant's expense by attorneys first approved by Landlord,
without any disclaimer of liability by Tenant in connection with such claim,
Tenant shall not be required to indemnify Landlord for attorneys' fees.
(c) Landlord agrees to save harmless and indemnify Tenant from any
liability for injury, loss, accident or damage to any person or property, and
from any claims, actions, proceedings and expenses and costs in connection
therewith (including without limitation reasonable attorneys' fees) arising from
the omission, fault, willful act, negligence or other misconduct of Landlord.
If any action or proceeding shall be brought against Tenant based upon any of
the foregoing, and if Landlord, upon notice from Tenant, shall cause such action
or proceeding to be defended at Landlord's expense by attorneys first approved
by Tenant, without any disclaimer of liability by Landlord in connection with
such claim, Landlord shall not be required to indemnify Tenant for attorneys'
fees.
(d) Each party, upon receiving notice of any matter against which the
other party has agreed to provide indemnification pursuant to this Lease, shall
promptly so notify the other party.
(e) Attorneys acting for the insurer of any party who has agreed to
provide indemnification pursuant to this Lease shall be deemed to have received
any necessary approval by the other party.
HEATING AND AIR CONDITIONING
25. (a) Landlord, at its expense, shall provide heating, cooling and
ventilating (hereinafter referred to as "Air Conditioning") to the Demised
Premises when required for the comfortable occupancy of the Demised Premises, at
reasonable temperatures, pressure and degrees of humidity, and in reasonable
volumes and velocities, on Business Days from 8:00 a.m. to 6:00 p.m. and on
Saturdays (excluding holidays) from 8:00 a.m. to 1:00 p.m.
(b) Landlord shall not be responsible if the normal operation of the
Building system shall fail to provide Air Conditioning at reasonable
temperatures, pressure or degrees of humidity or in reasonable volumes or
velocities in any portions of the Demised Premises (i) which shall have an
electrical load in excess of 5 watts per square foot of useable area for all
purposes (including lighting and power) or which shall have a human occupancy
factor in excess of one person for 100 square feet of useable area (the average
electrical load and human occupancy factors for which the Building Air
Conditioning system is designed) or (ii) because of any rearrangement of
partitioning or other Alterations made by or on behalf of Tenant or any person
claiming through or under Tenant.
(c) Landlord shall have unrestricted access to any and all air
conditioning facilities in the Demised Premises for the purpose of repairs,
maintenance, alterations and improvements.
(d) If Tenant by timely notice requests Air Conditioning on days or hours
other than the days and hours as above provided in this Article 25, then
Landlord shall furnish such Air Conditioning and Tenant shall pay Landlord the
Building standard charge for providing such additional Air Conditioning, or if
no such standard charge has been established then a reasonable charge, upon
being billed by Landlord. If Air Conditioning is desired by Tenant after
6:00 p.m. on any Business Day, such notice shall be deemed to be timely if
communicated to the Landlord's Building superintendent by 3:00 p.m. of the
Business Day preceding the extra usage period. If Air Conditioning is desired
by Tenant on a day other than a Business Day or prior to 8:00 a.m. on a Business
Day, such notice shall be deemed to be timely if communicated to Landlord's
Building superintendent by 3:00 p.m. of the previous Business Day.
(e) Tenant agrees to use reasonable efforts to keep or cause to be kept
closed all blinds in the Demised Premises as and when necessary because of the
sun's position whenever the Air Conditioning system is in operation, and Tenant
agrees at all times to co-operate fully with Landlord and to abide by all the
reasonable regulations and requirements which Landlord may prescribe for the
proper functioning and protection of such Air Conditioning system.
WATER, STEAM, ETC.
26. (a) Landlord shall furnish, at Landlord's expense, hot and cold water
for ordinary drinking, cleaning, lavatory and toilet purposes. If Tenant
requires, uses or consumes water for any other purposes, Landlord may install
hot and cold water meters and thereby measure Tenant's consumption of water for
such other purposes. Tenant shall pay to Landlord the cost of any such meters
and their installation, and Tenant shall keep any such meters and any such
installation equipment in good working order and repair, at Tenant's cost and
expense. Tenant agrees to pay for water consumed as shown on said meters and
sewer charges thereon, as and when bills are rendered. For the purposes of
determining the amount of any sums required to be paid by Tenant under this
paragraph, all hot and cold water consumed during any period when said meters
are not in good working order shall be deemed to have been consumed at the rate
of consumption of such water during the most comparable period when such meters
were in good working order.
(b) If Tenant requires, uses or consumes steam for any purpose other than
the heating required to be provided by Landlord pursuant to the provisions of
this Lease, Landlord may install a meter and thereby measure steam consumed by
Tenant for such purpose. Tenant shall pay Landlord the cost of any such meter
and its installation, and Tenant shall keep any such meter and any such
installation equipment in good working order and repair, at Tenant's cost and
expense. Tenant agrees to pay for steam consumed as shown on such meter, at the
rates charged by the local utility company, as and when bills are rendered.
Nothing contained in this paragraph shall be deemed to imply any obligation on
the part of Landlord to supply or install any steam risers in the Demised
Premises (other than the risers required in order to fulfill Landlord's
obligations under this Lease to provide heat to the Demised Premises).
For the purposes of determining the amount of any sums required to be paid
by Tenant under this paragraph, all steam consumed during any period when said
meter is not in good working order shall be deemed to have been consumed at the
rate of consumption of such steam during the most comparable period when such
meters were in good working order.
(c) All sums payable by Tenant to Landlord under the provisions of this
Article shall be payable as Additional Rent.
ELEVATOR FACILITIES -- BUILDING SERVICE
27. (a) Landlord shall provide and operate elevator facilities on
Business Days from 8:00 a.m. to 6:00 p.m. and shall have at least one elevator
serving the Demised Premises available at all other times. Tenant shall pay to
Landlord, as Additional Rent, any expenses incurred by Landlord for elevator
services in connection with Tenant's initial move or moves into the Building.
(b) It is Landlord's intention to maintain in the Building operatorless
automatic control elevators. However, Landlord may, at Landlord's option,
maintain in the Building either manually operated elevators or operatorless
automatic control elevators, or part one or part the other, and Landlord shall
have the right, from time to time during the Term of the Lease, to change, in
whole or in part, from one to the other without notice to Tenant and without
affecting the obligations of Tenant hereunder or incurring any liability to
Tenant therefor.
SECURITY DEPOSIT
28. On or before the Commencement Date, Tenant shall remit to Landlord, in
cash or in the form of a certificate of deposit or negotiable instrument, the
Security Deposit, which shall be held by Landlord during the Term of this Lease
as security for the full, faithful and punctual performance by Tenant of all the
covenants of this Lease on Tenant's part to be performed, it being understood
that the Security Deposit is not to be considered prepaid rent, nor shall
damages be limited to the amount of the Security Deposit, nor shall Landlord be
required, because of the Security Deposit, to waive its right under Article 22
to terminate this Lease in the event of a Default of Tenant. The Security
Deposit, or any balance thereof, shall be refunded to Tenant, without interest
if paid in cash, subject to Tenant's satisfactory compliance with its covenants
hereunder, following the end of the Term of this Lease. If remitted other than
in cash, the Security Deposit shall be in form reasonably acceptable to Landlord
and all interest earned thereon shall be paid to Tenant if and as received by
Landlord.
BILLS AND NOTICES
29. (a) Except as otherwise herein provided, any bill, statement,
request, notice or communication which may be desired or be required to be
given, made or rendered shall be in writing and deemed sufficiently given, made
or rendered, (i) if to Tenant, addressed to Tenant at Tenant's Original Address
and sent by certified or registered mail, return receipt requested, and (ii) if
to Landlord, addressed to Landlord at Landlord's Original Address and sent by
certified or registered mail, return receipt requested. Either Landlord or
Tenant may at any time change its address for the aforementioned purposes by
notice thereof given to the other party in the same manner.
(b) Any notice required to be given by Tenant to a Mortgagee shall be
given to the addressee or addressees, at the address or addresses therefor,
specified in a notice from Landlord to Tenant or, in the absence of such notice,
to the addressee and at the address, if any, specified to Tenant for remittance
of the Annual Fixed Rent.
SURRENDER
30. Upon the expiration or other termination of the Term of this Lease,
except as otherwise expressly provided elsewhere in this Lease, Tenant shall
remove all of its property, and shall quit and surrender to Landlord the Demised
Premises, broom clean, in good order and condition excepting only ordinary wear
and tear, damage by fire or other casualty, or conditions requiring repair by
Landlord hereunder at Landlord's expense. Tenant's obligation to observe or
perform this covenant shall survive the expiration or other termination of the
Term of the Lease. Tenant shall pay twice the Annual Fixed Rent and Additional
Rent applicable, at the rate most recently in effect, to each month (or fraction
thereof) during which Tenant remains in possession of any part of the Demised
Premises in violation of the foregoing covenant, without prejudice to eviction
and any other remedy available to Landlord on account thereof.
TENANT'S LIABILITY INSURANCE
31. (a) Tenant shall, at its expense, throughout the Term of this Lease
maintain comprehensive general liability insurance against claims for damages
for bodily injury or death occurring upon, in or about the Demised Premises,
including any elevator therein, such insurance to afford protection in limits of
not less than $1,000,000 in respect to personal injury or death to any one
person and $1,000,000 in respect to personal injury or death to any number of
persons in any one occurrence, and $50,000 for property damage. Such
comprehensive general liability insurance may be effected by a policy or
policies of blanket insurance which may cover other property in addition to the
Demised Premises, provided that the protection afforded thereunder shall be no
less than that which would have been afforded under a separate policy or
policies relating only to the Demised Premises and provided further that in all
other respects any such policy shall comply with the other provisions of this
Article 31.
(b) All insurance provided for in this Article 31 shall be effected under
valid and enforceable policies issued by insurers of generally recognized
responsibility, licensed to do and doing business in the Commonwealth of
Massachusetts, and shall, at Landlord's option, name Landlord as an insured. If
requested by Landlord, certificates of the policies or contracts for such
insurance shall be delivered by Tenant to Landlord. Tenant shall also furnish
to Landlord upon the Commencement Date and thereafter from time to time upon
Landlord's request, made not more often than once in each calendar year, a
certificate signed by an executive officer of Tenant certifying that (i) the
insurance required under this Article 31 is in force, (ii) such insurance
complies with the provisions of this Article 31 and (iii) the premiums thereon
have been paid.
(c) All policies of insurance required under this Article 31 shall, to the
extent obtainable, contain an agreement by the insurers that such policies shall
not be cancelled without at least ten (10) days' prior written notice to
Landlord.
PAYMENT OF ADDITIONAL RENT
32. Except as otherwise specifically provided herein, any sum amount, item
or charge designed or considered as Additional Rent in this Lease shall,
following notice to Tenant, on or before the thirtieth (30th) day after giving
of such notice to Tenant, be paid by Tenant to Landlord, without any set-off or
deduction, at Landlord's office in the Building, or at such other location as
Landlord may designate. Any such notice shall specify in reasonable detail the
basis of such Additional Rent.
NO WAIVER
33. (a) No agreement to make or accept any surrender, change,
modification, waiver, termination, discharge, release or cancellation of this
Lease or to relieve Tenant of any obligation or liability under this Lease shall
be valid unless in writing signed by Landlord. The delivery of keys to any
employee of Landlord or of Landlord's agent shall not operate as a termination
of this Lease or a surrender of the Demised Premises.
(b) The failure of Landlord to seek redress for violation of, or to insist
upon the strict performance of, any covenant or condition of this Lease, or any
of the Rules and Regulations annexed hereto or hereafter adopted by Landlord, as
provided in Article 36, shall not be deemed a waiver of such violation nor
prevent a subsequent act, which would have originally constituted a violation,
from having all the force and effect of an original violation. The receipt by
Landlord of rent with knowledge of the breach of any covenant of this Lease
shall be deemed a waiver of such breach. The failure of Landlord to enforce any
of said Rules and Regulations against Tenant and/or any other tenant in the
Building shall not be deemed a waiver of any such Rules and Regulations. No
provisions of this Lease shall be deemed to have been waived by Landlord unless
such waiver be in writing signed by the party to be charged.
(c) No payment by Tenant or receipt by Landlord of a lesser amount than a
monthly installment of Annual Fixed Rent (or Additional Rent) shall be deemed to
be other than on account of the earliest such installment, nor shall any
endorsement or statement on any check or any letter accompanying any check or
payment as rent be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord's right to recover the
balance of such installment or pursue any other remedy in this Lease provided.
LEASE AS ENTIRE AGREEMENT
34. This Lease contains the entire agreement between parties and all prior
negotiations, representations, warranties and agreements with respect to the
Demised Premises, the Building, the Property or this Lease are merged in this
Lease. This Lease may not be changed, modified or discharged, in whole or in
part, orally, and no executory agreement shall be effective to change, modify or
discharge, in whole or in part, this Lease or any obligations under this Lease,
unless such agreement is set forth in a written instrument executed by the party
against whom enforcement of the change, modification or discharge is sought.
QUIET ENJOYMENT
35. Landlord covenants and agrees that upon Tenant's paying the Annual
Fixed Rent and any Additional Rent payable hereunder and performing and
observing the covenants and provisions of this Lease on its part to be performed
and observed, Tenant shall peaceably and quietly enjoy the Demised Premises,
subject however, to the terms, covenants and conditions of this Lease, including
but not limited to, the provisions of Article 38.
COMPLIANCE WITH RULES AND REGULATIONS
36. Tenant and Tenant's servants, employees, agents, visitors and
licensees shall observe faithfully and comply strictly with the Rules and
Regulations annexed hereto and such other and further reasonable Rules and
Regulations as Landlord may from time to time hereafter adopt, not inconsistent
with the provisions or intent of this Lease. Landlord shall not be liable to
Tenant for violation of the same by any other tenant, its servants, employees,
agents, visitors and licensees, and nothing in this Lease contained shall be
construed to impose upon Landlord any duty or obligation to enforce the terms,
covenants or conditions in any other lease or the Rules and Regulations against
any other tenant. It is expressly understood and agreed that the Rules and
Regulations shall not be deemed to prohibit the use in the Demised Premises of
conventional microwave ovens.
STOPPAGE OF SERVICES, LANDLORD'S INABILITY
TO SUPPLY SERVICES, ETC.
37. (a) Landlord reserves the right to stop the service of heating,
air-conditioning, ventilating, elevator, plumbing, electricity or other
mechanical systems or facilities in the Building, if necessary by reason of
accident or emergency, or for repairs, alterations, replacements, additions or
improvements which, in the reasonable judgment of Landlord, are desirable or
necessary, until said repairs, alterations, replacements, additions or
improvements shall have been completed. The exercise of such right by Landlord
shall not constitute an actual or constructive eviction, in whole or in part, or
relieve Tenant from any of its obligations under this Lease, or impose any
liability upon Landlord or its agents by reason of inconvenience or annoyance to
Tenant, or injury to, or interruption of, Tenant's business, or otherwise, or
entitle Tenant to any abatement or diminution of rent. Except in cases of
emergency repairs, Landlord will give Tenant reasonable advance notice of any
contemplated stoppage of any such systems or facilities pursuant to the
foregoing and will use due diligence to minimize interference with Tenant's
normal business operations.
(b) If Landlord shall fail to supply, or be delayed in supplying, any
service expressly or impliedly to be supplied under this Lease, or shall be
unable to make, or be delayed in making, any repairs, alterations, additions,
improvements or decorations, or shall be unable to supply, or be delayed in
supplying, any equipment or fixtures, and if such failure, delay or inability
shall result from Unavoidable Delays, such failure, delay or inability shall not
constitute an actual or constructive eviction, in whole or in part, or relieve
Tenant from any of its obligations under this Lease, or impose any liability
upon Landlord or its agents by reason of inconvenience or annoyance to Tenant,
or injury to, or interruption of, Tenant's business, or otherwise, or entitle
Tenant to any abatement or diminution of rent.
(c) Notwithstanding anything to the contrary contained herein, if Landlord
shall fail to supply any service (including without limitation the making of
necessary repairs) to which Tenant is entitled under the terms of this Lease,
and if on account of such failure Tenant is able for a period of ten (10)
consecutive Business Days (which period shall be extended to thirty (30)
consecutive Business Days in the event that such failure is attributable in
whole or in part to Unavoidable Delays) to conduct none of its permitted
business activities in the Demised Premises, then in such event Annual Fixed
Rent shall abate proportionately thereafter so long as such inability continues.
TRANSFEREE LIABILITY
38. In the event of (i) any conveyance or other transfer of Landlord's
interest in the Building, (ii) the making of any lease of the entire Building,
or (iii) any assignment of any such lease, all liabilities and obligations of
the grantor, transferor, lessor, or assignor, as the case may be, shall
terminate and all liabilities and obligations of Landlord shall except as
provided in Article 14 ipso facto be binding upon the new owner or lessee.
EXCAVATION
39. In the event that an excavation shall be made for building or other
purposes, upon land adjacent to the Building, or should be authorized to be
made, Tenant shall, to the extent that Landlord is required so to do, afford to
the person or persons causing or authorized to cause such excavation, license to
enter upon the Demised Premises for the purpose of doing such work as such
person shall deem necessary to protect from damage and to support the same by
proper foundations, pinning and/or underpinning.
AREA MEASUREMENTS, ETC.
40. For all purposes of this Lease, the parties agree that (i) the
aggregate rentable area of the Demised Premises is the Rentable Area set forth
in Article 2; and (ii) the total rentable area of the Building (exclusive of
that portion of the Building proposed to be utilized as a garage), is the
Building Rentable Area set forth in Article 2.
NO BROKER
41. Tenant warrants and represents that it has not dealt directly or
indirectly, in connection with the leasing of the Demised Premises, with any
broker or other person entitled to claim a commission therefor except Fallon,
Hines & O'Connor, Inc. and Trammell Crow N.E., Inc. Tenant shall indemnify and
save Landlord harmless from and against any loss, liability, damage or expense
(including without limitation reasonable attorneys' fees) arising from any claim
for a commission arising out of this transaction made by any other such person
with whom Tenant has in fact so dealt.
REMEDIES
42. Except for claims and disputes between the parties which under the
terms of this Lease are to be determined and settled by arbitration, the
specific remedies to which Landlord or Tenant may resort under the terms of this
Lease are cumulative and are not intended to be exclusive of any other remedies
or means of redress to which Landlord or Tenant, as the case may be, may be
lawfully entitled in case of any breach or threatened breach by either of them
of any provisions of this Lease.
SEVERABILITY
43. If any term of this Lease, or the application thereof to any person or
circumstances, shall to any extent be invalid or unenforceable, the remainder of
this Lease, or the application of such term to persons or circumstances other
than those as to which it is invalid or unenforceable, shall not be affected
thereby, and each term of this Lease shall be valid and be enforced to the
fullest extent permitted by law.
BINDING EFFECT
44. The terms of this Lease shall be binding upon and inure to the benefit
of Landlord and Tenant and their respective successors, and, except as otherwise
provided in Article 10 of this Lease, their assigns, subject, however, to the
provisions of Article 38.
PARKING SPACE
45. Tenant shall have the right to use, in the garage located in the
Building, one (1) unreserved parking space. Tenant shall comply with all
regulations applicable to said garage, including without limitation payment for
the right to use such space at the rate in effect from time to time.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the
day and year first above written.
KEYSTONE-CENTROSE ASSOCIATES
By Landlord.
J.B. OXFORD HOLDINGS, INC.
STATE OF NEW YORK
ss: New York March , 1996
---
Then personally appeared the above named ,
---------------
a general partner of ROSE ASSOCIATES, and acknowledged the foregoing instrument
to be his free act and deed, and the free act and deed of KEYSTONE-CENTROSE
ASSOCIATES, before me
Notary Public
My Commission Expires
COMMONWEALTH OF MASSACHUSETTS
ss: Suffolk March , 1996
---
Then personally appeared the above named ,
---------------
aforesaid, and acknowledged the foregoing instrument to be his free act and
deed, and the free act and deed of J.B. OXFORD HOLDINGS, INC., before me
Notary Public
My Commission Expires
EXHIBIT A
- ---------
[PLAN OF DEMISED PREMISES]
EXHIBIT B
- ---------
LANDLORD'S WORK
EXHIBIT C
- ---------
CLEANING SERVICES TO BE FURNISHED BY LANDLORD
PURSUANT TO THE PROVISIONS OF ARTICLE 13
A. GENERAL CLEANING OF DEMISED PREMISES: (unless otherwise indicated,
General Cleaning Services are to be performed nightly).
1. Sweep all flooring; damp mop all flooring in entrance foyers.
2. Vacuum clean all carpeted areas and rugs nightly, moving light
furniture other than desks, file cabinets, etc., once a week.
3. Empty and clean all wastepaper baskets, ash trays, receptacles, etc.,
and damp dust as necessary.
4. Remove waste paper and waste materials to a designated area or areas.
5. Dust and wipe clean all furniture, fixtures within hand-high reach,
and window sills.
6. Clean all glass furniture tops.
7. Dust all chair rails, trim, etc. within hand-high reach.
8. Dust all baseboards.
9. Wash clean all water fountains.
10. Keep Building employees locker rooms, if any, and slop sink rooms in
clean and orderly condition.
B. LAVATORIES - Nightly:
1. Sweep and mop all flooring.
2. Wash and polish all mirrors, powder shelves, bright work, etc.,
including flushometers, piping and toilet seats hinges.
3. Wash both sides of all toilet seats.
4. Wipe clean all toilet tissue, soap, towel and sanitary napkin
dispensers.
5. Wash all basins, bowls and urinals, and disinfect.
6. Dust all partitions, tile walls, dispensers and receptacles.
7. Empty and clean paper towel and sanitary napkin disposal receptacles.
8. Remove waste paper and refuse to a designated area or areas.
9. Fill toilet tissue holders, soap dispensers and towel dispensers
(toilet tissue to be furnished by Landlord or its contractor, other materials to
be furnished by tenants).
C. BUILDING ENTRANCE LOBBIES - Nightly:
1. Sweep and mop flooring.
2. Wash all protective mats.
3. Wash, wax and polish floors in elevator cabs, or vacuum clean if
carpeted.
4. Dust and rub down walls, metal work and saddles in elevator cabs.
5. Dust and rub down all elevator doors, mail chutes and mail depository.
D. HIGH DUSTING - Office Areas in Demised Premises (to be performed
approximately every three months):
1. Dust all pictures, frames, charts, graphs and similar wall hangings
not reached in nightly cleaning.
2. Dust all vertical surfaces as walls, partitions, ventilating louvers,
fresh air grilles and others not reached in nightly cleaning.
3. Dust exterior of all lighting fixtures.
4. Dust all overhead pipes, sprinklers, etc.
5. Dust all window frames.
E. PERIODIC CLEANING - Office Areas in Demised Premises (unless otherwise
indicated):
1. Wipe clean all interior metal at least weekly and as necessary.
2. Elevator, stairway, office and utility doors to be checked for general
cleanliness at least weekly and as necessary, removing fingermarks.
3. Dust all door louvers and other ventilating louvers within hand-high
reach weekly.
4. Remove all fingermarks, smudges and other marks from metal partitions
and other surfaces at least weekly and as necessary.
5. Wash and apply one coat of floor finish to resilient tile floors in
Demised Premises once every six weeks; buff after application of floor finish.
6. Clean Building standard blinds at regular intervals.
F. LAVATORIES IN THE DEMISED PREMISES - PERIODIC CLEANING:
1. Machine scrub flooring at least once every two weeks and as necessary.
2. Wash all partitions, tile walls, metal ceilings and enamel surfaces
once a month, using proper disinfectant when necessary.
3. Dust all lighting fixtures (exterior only) once a month.
4. Do all high dusting once a month.
G. DAY SERVICES - DUTIES OF DAY PORTERS AND MATRONS (to be performed
daily except as otherwise provided):
1. Police entire elevator lobby areas of Building.
2. Police elevator cabs.
3. Police lavatories at least twice daily.
4. Set out protective mats in elevator lobby areas of Building on rainy
days; keep mats in clean condition.
5. Sweep and hose sidewalks, weather permitting; remove snow and ice when
necessary.
6. Keep frames of entrance reception doors of Building in clean
condition.
7. Sweep and dust all Building stairways and fire towers; dust all
handrails, newels and stair stringers.
8. Exterior metal work and marble of Building entrances to be kept in
clean condition at all times.
H. WINDOW CLEANING:
1. Clean all windows, inside including interior sills and frames, and
outside, four (4) times a year, at regular intervals, subject to delays
occasioned by inclement weather.
2. Clean Building entrance doors twice each day.
3. Clean Building entrance lobby glass daily.
4. Clean glass in Building directory daily.
I. All services required to be furnished "nightly" shall be furnished
only during regular cleaning hours for the Building (generally between 6:00 P.M.
and 6:00 A.M.) on Mondays through Fridays only, exclusive of holidays as defined
in this Lease. All services required to be furnished "daily" shall be furnished
only during the hours between 8:00 A.M. and 6:00 P.M., on Mondays through
Fridays only, exclusive of holidays as so defined.
J. Tenant agrees that Landlord may substitute, for any of the methods or
devices set forth in this Exhibit, other methods or devices which will achieve
substantially the same results.
RULES AND REGULATIONS
1. The sidewalks, entrances, passages, courts, elevators, vestibules,
stairways, corridors or halls of the Building shall not be obstructed or
encumbered or used for any purpose other than ingress and egress to and from the
premises demised to any tenant or occupant.
2. No awnings or other projections shall be attached to the outside walls
or windows of the Building without the prior consent of Landlord. No curtains,
blinds, shades, or screens shall be attached to or hung in, or used in
connection with, any window or door of the premises demised to any tenant or
occupant, without the prior consent of Landlord. Such awnings, projections,
curtains, blinds, shades, screens or other fixtures must be of a quality, type,
design and color, and attached in a manner approved by Landlord. Except in case
of emergency, all windows shall be kept closed at all times.
3. No sign, advertisement, object, notice or other lettering shall be
exhibited, inscribed, painted or affixed on any part of the outside or inside of
the premises demised to any tenant or occupant or of the Building without the
prior consent of Landlord. Interior signs on doors and directory tablets, if
any, shall be of a size, color and style approved by Landlord. The provisions
of this Rule and Regulation shall be subject, in all respects, to the provisions
of this Lease.
4. The sashes, sash doors, skylights, windows, and doors that reflect or
admit light and air into the halls, passageways, or other public places in the
Building shall not be covered or obstructed, nor shall any bottles, parcels, or
other articles place on any window-sills.
5. No show cases or other articles shall be put in front of or affixed to
any part of the exterior of the Building, nor placed in the halls, corridors,
vestibules or other public parts of the Building.
6. The water and wash closets and other plumbing fixtures shall not be
used for any purposes other than those for which they were constructed, and no
sweepings, rubbish, rags, or other substances shall be thrown therein. No
tenant shall bring or keep, or permit to be brought or kept, any toxic,
hazardous, inflammable, combustible or explosive fluid, material, chemical or
substance in or about the premises demised to such tenant. The provisions of
this Rule and Regulation shall be subject, in all respects, to the provisions of
this Lease.
7. No tenant or occupant shall mark, paint, drill into, or in any way
deface any part of the Building or the premises demised to such tenant or
occupant. No boring, cutting or stringing of wires shall be permitted, except
with the prior consent of Landlord, and as Landlord may direct. No tenant or
occupant shall install any resilient tile or similar floor covering in the
premises demised to such tenant or occupant except in a manner approved by
Landlord. The provisions of this Rule and Regulation shall be subject, in all
respects, to the provisions of this Lease.
8. No bicycles, vehicles or animals of any kind shall be brought into or
kept in or about the premises demised to any tenant. No cooking shall be done
or permitted in the Building by any tenant without the approval of Landlord (the
provisions of this sentence shall be the subject in all respects, to the
provisions of this Lease). No tenant shall cause or permit any unusual or
objectionable odors to emanate from the premises demised to such tenant.
9. Without the prior consent of Landlord, no space in the Building shall
be used for manufacturing, for storage of merchandise, or for the sale of
merchandise, goods or property of any kind at auction.
10. No tenant shall make, or permit to be made, any unseemly or disturbing
noises or disturb or interfere with other tenants or occupants of the Building
or neighboring buildings or premises whether by the use of any musical
instrument, radio, television set or other audio device, unmusical noise,
whistling, singing, or in any other way. Nothing shall be thrown out of any
doors or windows.
11. No additional locks or bolts of any kind shall be placed upon any of
the doors or windows, nor shall any changes be made in locks or the mechanism
thereof (without Landlord's prior written consent, such consent not unreasonably
to be withheld). Each tenant must, upon the termination of its tenancy, restore
to Landlord all keys of stores, offices and toilet rooms, either furnished to,
or otherwise procured by, such tenant.
12. All removals from the Building, or the carrying in or out of the
Building or the premises demised to any tenant, of any safes, freight, furniture
or bulky matter of any description must take place at such time and in such
manner as Landlord or its agents may determine, from time to time. Landlord
reserves the right to inspect all freight to be brought into the Building and to
exclude from the Building all freight which violates any of the Rules and
Regulations or the provisions of such tenant's lease.
13. No tenant shall use or occupy, or permit any portion of the premises
demised to such tenant to be used or occupied, as an employment bureau. No
tenant or occupant shall engage or pay any employees in the Building, except
those actually working for such tenant or occupant in the Building, nor
advertise for laborers giving an address at the Building.
14. No tenant or occupant shall purchase services, such as spring water,
ice, food, beverage, lighting maintenance, cleaning, towels, or other like
service, from any company or persons not approved by Landlord, such approval not
unreasonably to be withheld.
15. Landlord shall have the right to prohibit any advertising by any
tenant or occupant which refers to the Building and which, in Landlord's
opinion, tends to impair the reputation of the Building or its desirability as a
building for offices, and upon notice from Landlord, such tenant or occupant
shall refrain from or discontinue such advertising.
16. Landlord reserves the right to exclude from the Building, between the
hours of 6 P.M. and 7 A.M. on business days and at all hours on Saturdays,
Sundays and holidays, all persons who do not present a pass to the Building
signed by Landlord. Landlord will furnish passes to persons for whom any tenant
requests such passes. Each tenant shall be responsible for all persons for whom
it requests such passes and shall be liable to Landlord for all acts of such
persons.
17. Each tenant, before closing and leaving the premises demised to such
tenant at any time, shall see that all entrance doors are locked.
18. Subject to Landlord's obligations to provide electrical services, each
tenant shall, at its expense, provide artificial light in the premises demised
to such tenant for Landlord's agents, contractors and employees while performing
janitorial or other cleaning services and making repairs or alterations in said
premises.
19. No premises shall be used, or permitted to be used, for lodging or
sleeping or for any immoral or illegal purpose.
20. The requirements of tenants will be attended to only upon application
at the office of Landlord. Building employees shall not be required to perform,
and shall not be requested by any tenant or occupant to perform, any work
outside of their regular duties, unless under specific instructions from the
office of Landlord.
21. Canvassing, soliciting and peddling in the Building are prohibited and
each tenant and occupant shall co-operate in seeking their prevention.
22. There shall not be used in the Building, either by any tenant or
occupant or by their agents or contractors, in the delivery or receipt of
merchandise, freight or other matter, any hand trucks or other means of
conveyance except those equipped with rubber tires, rubber side guards and such
other safeguards as Landlord may require.
23. If the premises demised to any tenant become infested with vermin,
such tenant, at its sole cost and expense, shall cause its premises to be
exterminated from time to time, to the satisfaction of Landlord, and shall
employ such exterminators therefor as shall be approved by Landlord.
24. No premises shall be used, or permitted to be used, at any time,
without the prior approval of Landlord, as a store for the sale or display of
goods, wares or merchandise of any kind, or as a restaurant, shop, booth,
bootblack or other stand, or for the conduct of any business or occupation which
predominantly involves direct patronage of the general public in the premises
demised to such tenant, or for manufacturing or for other similar purposes.
25. No tenant shall clean, or permit to be cleaned, any window of the
Building from the outside in violation of any applicable law or statute, or of
the rules of any governmental authority having or asserting jurisdiction.
26. No tenant shall move, or permit to be moved, into or out of the
Building or the premises demised to such tenant, any heavy or bulky matter,
without the specific approval of Landlord. If any such matter requires special
handling, only a person holding a Master Rigger's license shall be employed to
perform such special handling. No tenant shall place, or permit to be placed,
on any part of the floor or floors of the premises demised to such tenant, a
load exceeding the floor load per square foot which such floor was designed to
carry and which is allowed by law. Landlord reserves the right to prescribe the
weight and position of safes and other heavy matter, which must be placed so as
to distribute the weight.
Pursuant to the requirements of Section 13 of 15(d) of the Securities
Exchange Act of 1934, JB Oxford Holdings, Inc. has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
JB Oxford Holdings, Inc.
Stephen M. Rubenstein Chief Executive Officer
<TABLE> <S> <C>
<ARTICLE> BD
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 32149
<RECEIVABLES> 194843
<SECURITIES-RESALE> 0
<SECURITIES-BORROWED> 5452
<INSTRUMENTS-OWNED> 5964
<PP&E> 2634
<TOTAL-ASSETS> 241042
<SHORT-TERM> 3015
<PAYABLES> 198735
<REPOS-SOLD> 0
<SECURITIES-LOANED> 22377
<INSTRUMENTS-SOLD> 579
<LONG-TERM> 6769
0
2000
<COMMON> 87
<OTHER-SE> 7480
<TOTAL-LIABILITY-AND-EQUITY> 241042
<TRADING-REVENUE> 281
<INTEREST-DIVIDENDS> 2730
<COMMISSIONS> 4105
<INVESTMENT-BANKING-REVENUES> 0
<FEE-REVENUE> 739
<INTEREST-EXPENSE> 1578
<COMPENSATION> 3643
<INCOME-PRETAX> 1946
<INCOME-PRE-EXTRAORDINARY> 1946
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1178
<EPS-PRIMARY> 0.11
<EPS-DILUTED> 0.07
</TABLE>
