SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1998.
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period from ____________ to
_____________.
Commission File Number: 0-20199
EXPRESS SCRIPTS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 43-1420563
(State of Incorporation) (I.R.S. employer identification no.)
14000 RIVERPORT DR., MARYLAND HEIGHTS, MISSOURI 63043
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (314) 770-1666
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ___
Common stock outstanding as of November 2, 1998: 18,600,310 Shares Class A
15,020,000 Shares Class B
<PAGE>
EXPRESS SCRIPTS, INC.
INDEX
Part I Financial Information
Item 1. Financial Statements (unaudited)
a) Consolidated Balance Sheet
b) Consolidated Statement of Operations
c) Consolidated Statement of Changes
in Stockholders' Equity
d) Consolidated Statement of Cash Flows
e) Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About
Market Risks - (Not Applicable)
Part II Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities - (Not Applicable)
Item 3. Defaults Upon Senior Securities - (Not Applicable)
Item 4. Submission of Matters to a Vote of Security Holders -
(Not Applicable)
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signatures
Index to Exhibits
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
EXPRESS SCRIPTS, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
(IN THOUSANDS, EXCEPT SHARE DATA) 1998 1997
<S> <C> <C>
--------------------- --------------------
Assets
Current assets:
Cash and cash equivalents $ 101,100 $ 64,155
Short term investments 57,938
Receivables, less allowance for doubtful
accounts of $26,514 and $4,802 respectively
Unrelated parties 391,299 194,061
Related parties 16,230
Inventories 42,344 28,935
Deferred taxes and prepaid expenses 50,303 2,649
--------------------- --------------------
Total current assets 585,046 363,968
Property and equipment, net 75,392 26,821
Goodwill, net 307,781 251
Other assets 87,459 11,468
--------------------- --------------------
Total assets $ 1,055,678 $ 402,508
===================== ====================
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long term debt $ 27,000 $ -
Claims payable 238,767 153,051
Accounts payable 52,253 17,979
Accrued expenses 166,536 26,876
--------------------- --------------------
Total current liabilities 484,556 197,906
Long term debt 333,000
Other liabilities 1,199 901
--------------------- --------------------
Total liabilities 818,755 198,807
--------------------- --------------------
Stockholders' equity:
Preferred stock, $.01 par value, 5,000,000 shares authorized, and
no shares issued and outstanding
Class A Common Stock, $.01 par value, 75,000,000 shares authorized,
9,291,000 and 9,238,000 shares issued and outstanding, respectively 93 93
Class B Common Stock, $.01 par value, 22,000,000 shares authorized,
7,510,000 shares issued and outstanding 75 75
Additional paid-in capital 109,427 106,901
Foreign currency translation adjustments (81) (27)
Retained earnings 134,398 103,648
--------------------- --------------------
243,912 210,690
Class A Common Stock in treasury at cost, 237,500 shares (6,989) (6,989)
--------------------- --------------------
Total stockholders' equity 236,923 203,701
--------------------- --------------------
Total liabilities and stockholders' equity $ 1,055,678 $ 402,508
===================== ====================
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE>
<TABLE>
EXPRESS SCRIPTS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
(IN THOUSANDS, EXCEPT PER SHARE DATA) 1998 1997 1998 1997
<S> <C> <C> <C> <C>
- ------------------------------------- ------------------ ----------------- ---------------------- ------------------
Net revenues $ 807,319 $ 319,937 $ 1,986,087 $ 882,442
------------------ ----------------- ---------------------- ------------------
Cost and expenses:
Cost of revenues 738,544 291,590 1,820,593 803,794
Selling, general & administrative 43,153 15,758 101,245 42,789
Corporate restructuring expenses - - 1,651 -
------------------ ----------------- ---------------------- ------------------
781,697 307,348 1,923,489 846,583
------------------ ----------------- ---------------------- ------------------
Operating income 25,622 12,589 62,598 35,859
------------------ ----------------- ---------------------- ------------------
Other income (expense):
Interest income 1,794 1,609 5,683 4,171
Interest expense (6,912) (29) (13,793) (65)
------------------ ----------------- ---------------------- ------------------
(5,118) 1,580 (8,110) 4,106
------------------ ----------------- ---------------------- ------------------
Income before income taxes 20,504 14,169 54,488 39,965
Provision for income taxes 9,201 5,556 23,738 15,580
------------------ ----------------- ---------------------- ------------------
Net income $ 11,303 $ 8,613 $ 30,750 $ 24,385
================== ================= ====================== ==================
Basic earnings per share $ 0.34 $ 0.26 $ 0.93 $ 0.75
================== ================= ====================== ==================
Weighted average number of common shares
outstanding during the period -
Basic EPS 33,121 32,800 33,091 32,624
================== ================= ====================== ==================
Dluted earnings per share $ 0.34 $ 0.26 $ 0.91 $ 0.74
================== ================= ====================== ==================
Weighted average number of common shares
outstanding during the period -
Diluted EPS 33,682 33,187 33,635 33,007
================== ================= ====================== ==================
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE>
<TABLE>
EXPRESS SCRIPTS, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED)
<CAPTION>
Number of Shares Amount
------------------ -------------------------------------------------------------------------
Foreign
Class A Class B Class A Class B Additional Currency
Common Common Common Common Paid-in Translation Retained Treasury
(IN THOUSANDS) Stock Stock Stock Stock Capital Adjustments Earnings Stock Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -------------- -------- --------- --------- ---------- ---------- ------------ --------- --------- --------
Balance at December 31, 1997 9,238 7,510 $ 93 $ 75 $106,901 $ (27) $103,648 $(6,989) $203,701
Net income for nine months ended
September 30, 1998 30,750 30,750
Foreign currency translation adjustments (54) (54)
Exercise of stock options 53 1,478 1,478
Tax benefit relating to employee stock
options - - - - 1,048 - - - 1,048
-------- --------- -------- ---------- ---------- ---------- ---------- --------- --------
Balance at September 30, 1998 9,291 7,510 $ 95 $ 75 $109,427 $ (81) $134,398 $(6,989) $236,923
======== ========= ======== ========== ========== ========== ========== ========= ========
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE>
<TABLE>
EXPRESS SCRIPTS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Nine Months Ended
September 30,
(IN THOUSANDS) 1998 1997
<S> <C> <C>
------------------- -------------------
Cash flows from operating activities:
Net income $ 30,750 $ 24,385
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization 18,254 6,924
Tax benefit relating to employee stock options 1,048 2,855
Net changes in operating assets and liabilities, net of changes
resulting from acquisition 49,720 (1,638)
------------------- -------------------
Net cash provided by operating activities 99,772 32,526
------------------- -------------------
Cash flows from investing activities:
Purchases of property and equipment (17,990) (10,822)
Acquisition of ValueRX (460,137)
Short term investments 57,938 (2,784)
------------------- -------------------
Net cash (used in) investing activities (420,189) (13,606)
------------------- -------------------
Cash flows from financing activities:
Net proceeds on long term debt 360,000
Deferred financing fees (4,062)
Other, net 1,424 1,611
------------------- -------------------
Net cash provided by financing activities 357,362 1,611
------------------- -------------------
Net increase in cash and cash equivalents 36,945 20,531
Cash and cash equivalents at beginning of period 64,155 25,211
------------------- -------------------
Cash and cash equivalents at end of period $ 101,100 $ 45,742
=================== ===================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
EXPRESS SCRIPTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Financial statement note disclosures, normally included in financial
statements prepared in conformity with generally accepted accounting principles,
have been omitted in this Form 10-Q pursuant to the Rules and Regulations of the
Securities and Exchange Commission. However, in the opinion of the Company, the
disclosures contained in this Form 10-Q are adequate to make the information
presented not misleading when read in conjunction with the notes to consolidated
financial statements included in the Company's Annual Report on Form 10-K for
the Year Ended December 31, 1997, as filed with the Securities and Exchange
Commission on March 26, 1998.
In the opinion of the Company, the accompanying unaudited consolidated
financial statements reflect all adjustments (consisting of only normal
recurring adjustments) necessary to present fairly the Consolidated Balance
Sheet at September 30, 1998, the Consolidated Statement of Operations for the
three and nine months ended September 30, 1998 and 1997, the Consolidated
Statement of Changes in Stockholders' Equity for the nine months ended September
30, 1998, and the Consolidated Statement of Cash Flows for the nine months ended
September 30, 1998 and 1997. Operating results for the three months and nine
months ending September 30, 1998 are not necessarily indicative of the results
that may be expected for the year ending December 31, 1998.
NOTE 2 - EARNINGS PER SHARE
Statement of Financial Accounting Standards No. 128, "Earnings Per Share"
requires a presentation of both "Basic" earnings per share and "Diluted"
earnings per share. Basic earnings per share represents per share earnings using
the weighted average number of common shares outstanding during the period,
while diluted earnings per share represents per share earnings determined in the
same manner as basic earnings per share but taking into account the number of
additional common shares that would have been outstanding for the period if the
potentially dilutive common shares had been issued. The only difference between
the number of weighted average shares used in the basic and diluted calculation
is stock options granted by the Company using the "treasury stock" method.
On October 12, 1998, the Company announced a two-for-one stock split of its
Class A and Class B common stock for stockholders of record on October 20, 1998,
effective October 30, 1998. The split was effected in the form of a dividend by
issuance of one additional share of Class A common stock for each share of Class
A common stock outstanding and one additional share of Class B common stock for
each share of Class B common stock outstanding. The earnings per share and the
weighted average number of shares outstanding for basic and diluted earnings per
share have been adjusted for the stock split. The number of shares included in
the Consolidated Balance Sheet and the Consolidated Statement of Changes in
Stockholders' Equity have been stated on a pre-split basis.
NOTE 3 - ACQUISITION
On April 1, 1998 the Company acquired all of the outstanding capital stock
of Value Health, Inc. and Managed Prescription Network, Inc. (collectively, the
"Acquired Entities") from Columbia/HCA Healthcare Corporation ("Columbia") for
approximately $460 million in cash (which includes transactions costs of
approximately $15 million), approximately $360 million of which was obtained
through a five-year bank credit facility and the remainder from the Company's
cash balances and short term investments. At closing, the Acquired Entities
owned various subsidiaries that now or formerly conducted a pharmacy benefit
management ("PBM") business, commonly known as "ValueRx".
The acquisition has been accounted for using the purchase method of
accounting and the results of operations of the Acquired Entities have been
included in the consolidated financial statements since April 1, 1998. The
purchase price has been preliminarily allocated based on the estimated fair
values of net assets acquired at the date of the acquisition. The excess of
purchase price over net assets acquired was allocated to other intangible assets
consisting of customer contracts and non-compete agreements in the amount of
$57,653,000 which are being amortized using the straight-line method over the
estimated useful lives of 2 to 20 years and are included in other assets, and
goodwill in the amount of $312,863,000 which is being amortized using the
straight-line method over the estimated useful life of 30 years. In conjunction
with the acquisition, the Acquired Entities and their subsidiaries retained the
following liabilities (amounts in thousands):
Fair value of assets acquired $ 669,898
Cash paid for the capital stock (460,137)
-----------
Liabilities retained $ 209,761
===========
The following unaudited pro forma information presents a summary of
combined results of operations of the Company and the Acquired Entities as if
the acquisition had occurred at the beginning of the period presented, along
with certain pro forma adjustments to give effect to amortization of goodwill,
other intangible assets, interest expense on acquisition debt and other
adjustments. The pro forma financial information is not necessarily indicative
of the results of operations as they would have been had the transaction been
effected on the assumed dates. Basic and diluted earnings per share have been
adjusted for the effect of the stock split on October 30, 1998. (Amounts in
thousands, except per share data)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1998 1997
<S> <C> <C>
---------------------------
Net revenues $2,396,015 $2,114,328
Net income 30,900 24,233
Basic earnings per share 0.93 0.74
Diluted earnings per share 0.92 0.73
</TABLE>
NOTE 4 - FINANCING
On April 1, 1998, the Company executed a $440 million credit facility with
a bank syndicate led by Bankers Trust Company, consisting of a $360 million term
loan facility and an $80 million revolving loan facility. The agreement is for a
period of five years and is guaranteed by the Company's domestic subsidiaries
other than Practice Patterns Science, Inc. ("PPS"), and Great Plains Reinsurance
Company ("Great Plains") and secured by certain of the Company's assets,
including pledges of 100% (or, in the case of foreign subsidiaries, 65%) of the
capital stock of the Company and its subsidiaries other than PPS and Great
Plains. The provisions of this loan require quarterly interest payments and,
beginning in April 1999, semi-annual principal payments. The interest rate is
based on a spread ("Credit Rate Spread") over several London Interbank Offered
Rates ("LIBOR") or base rate options, depending upon the Company's ratio of
earnings before interest, taxes, depreciation and amortization to debt. However,
the initial spread is fixed at 125 basis points for the first two quarters. The
credit agreement contains customary financial covenants, such as interest
coverage, leverage, and consolidated net worth. In addition, the Company is
required to pay an annual fee of 30 basis points, payable in quarterly
installments, on the unused portion of the revolving loan. There were no
borrowings at September 30, 1998 under the revolving loan facility.
The following represents the schedule of current maturities for the term
loan facility (amounts in thousands):
<TABLE>
<CAPTION>
Year Ended
December 31,
<S> <C> <C>
1999 $ 54,000
2000 72,000
2001 90,000
2002 96,000
2003 48,000
======================
$ 360,000
======================
</TABLE>
In conjunction with the credit facility, the Company entered into an
interest rate swap with First National Bank of Chicago on April 3, 1998. Under
the terms of the interest rate swap, the Company agrees to receive a floating
rate of interest on the amount of the term loan facility based on a three month
LIBOR rate in exchange for payment of a fixed rate of interest of 5.88% per
annum. The notional amount of the swap amortizes in equal amounts with the
principal balance of the term loan. As a result, the Company has, in effect,
converted its variable rate term debt to fixed rate debt at 5.88% per annum for
the entire term of the term loan, plus the Credit Rate Spread.
NOTE 5 - RESTRUCTURING
During the quarter ended June 30, 1998, the Company recorded a pre-tax
restructuring charge of $1,651,000 ($1,002,000 after taxes) associated with the
Company closing the operations of its wholly-owned subsidiary, PhyNet, Inc., and
transferring certain functions of its Express Scripts Vision Corporation to
another vision care provider. The restructuring charge includes $1,235,000 in
impairment write-downs of assets and $416,000 in employee transition costs. As
of September 30, 1998, the Company has not incurred any cash expenditures
associated with this restructuring. The complete shutdown and transfer of all
functions of the Company's managed vision operations occurred on October 1,
1998. Therefore, the Company expects to incur the majority of the restructuring
costs during the fourth quarter of 1998.
NOTE 6 - CONTINGENCIES
As discussed in detail in the Company's Quarterly Report on Form 10-Q for
the period ended June 30, 1998, filed with the Securities and Exchange
Commission on August 13, 1998 (the "Second Quarter 10-Q"), when the Company
acquired the Acquired Entities and their subsidiaries, several of the entities
were party to various legal proceedings, investigations or claims. The effect of
these actions on the Company's future financial results is not subject to
reasonable estimation because considerable uncertainty exists about the
outcomes. Nevertheless, in the opinion of management, the ultimate liabilities
resulting from any such lawsuits, investigations or claims now pending will not
materially affect the consolidated financial position, results of operations or
cash flows of the Company. A brief update of the most notable of the proceedings
follows:
As discussed in detail in the Second Quarter 10-Q, Value Health, Inc.
("VHI") and several of its subsidiaries are party to two securities litigation
matters, BASH, ET AL. V. VALUE HEALTH, INC., ET AL., No. 3:97cv2711
(JCH)(D.Conn.), and FREEDMAN, ET AL. V. VALUE HEALTH, INC., ET AL., No. 3:95 CV
2038 (JCH)(D.Conn). The two lawsuits, filed in 1995, allege that VHI and certain
other defendants made false or misleading statements to the public in connection
with VHI's acquisition of Diagnostek, Inc. in 1995. On April 24, 1998, the two
lawsuits were consolidated. On August 18, 1998, the plaintiffs moved for class
certification. The defendants opposed this motion on September 21, 1998, and the
plaintiffs' reply was filed on November 6, 1998. The parties are now awaiting
the court's order.
In connection with the Company's acquisition, Columbia has agreed to defend
and hold the Company and its affiliates (including VHI) harmless from and
against any liability that may arise in connection with either of the foregoing
proceedings. Consequently, the Company does not believe it will incur any
material liability in connection with the foregoing matters.
NOTE 7 - NEW ACCOUNTING PRONOUNCEMENTS
Effective with the first quarter of 1998, the Company adopted Statement of
Financial Accounting Standards Statement 130, "Reporting Comprehensive Income."
The Statement requires noncash changes in stockholders' equity be combined with
net income and reported in a new financial statement category entitled
"comprehensive income." Other than net income, the only component of
comprehensive income for the Company is the change in the foreign currency
translation account.
In June 1997, the FASB issued Statement of Financial Accounting Standards
Statement 131, "Disclosures about Segments of an Enterprise and Related
Information" ("FAS 131"). The Statement requires that the Company report certain
information if specific requirements are met about operating segments of the
Company including information about services, geographic areas of operation and
major customers. FAS 131 is effective for years beginning after December 15,
1997. In most cases, the Company provides integrated PBM services to its
customers under a single contract. These services account for substantially all
of the Company's net revenues on an annual basis. As a result, the Company
believes that the majority of its operations will be in one reportable segment
in 1998.
In June 1998, the FASB issued Statement of Financial Accounting Standards
Statement 133, "Accounting for Derivative Instruments and Hedging Activities"
("FAS 133"). The Statement requires all derivatives be recognized as either
assets or liabilities in the statement of financial position and measure those
instruments at fair value. In addition, the Statement specifies the accounting
for changes in the fair value of a derivative based on the intended use of the
derivative and the resulting designation. FAS 133 is effective for all fiscal
quarters of fiscal years beginning after June 15, 1999 and will be applicable to
the Company's first quarter of fiscal year 2000. The Company's present interest
rate swap (see Note 4 above) would be considered a cash flow hedge. Accordingly,
the change in the fair value of the swap would be reported on the balance sheet
as an asset or liability. The corresponding unrealized gain or loss representing
the effective portion of the hedge will be initially recognized in stockholders'
equity and other comprehensive income, and subsequently any changes in
unrealized gain or loss from the initial measurement date will be recognized in
earnings concurrent with the interest expense on the Company's underlying
variable rate debt. At the present time, it is indeterminable how application of
this Statement will impact the Company's statement of operations.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
INFORMATION INCLUDED IN THIS QUARTERLY REPORT ON FORM 10-Q, AND INFORMATION
THAT MAY BE CONTAINED IN OTHER FILINGS BY THE COMPANY WITH THE SECURITIES AND
EXCHANGE COMMISSION (THE "COMMISSION") AND RELEASES ISSUED OR STATEMENTS MADE BY
THE COMPANY, CONTAIN OR MAY CONTAIN FORWARD-LOOKING STATEMENTS, INCLUDING BUT
NOT LIMITED TO STATEMENTS OF THE COMPANY'S PLANS, OBJECTIVES, EXPECTATIONS OR
INTENTIONS, INCLUDING AS TO YEAR 2000 ISSUES.
SUCH FORWARD-LOOKING STATEMENTS NECESSARILY INVOLVE RISKS AND
UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS MAY DIFFER SIGNIFICANTLY FROM THOSE
PROJECTED OR SUGGESTED IN ANY FORWARD-LOOKING STATEMENTS. FACTORS THAT MIGHT
CAUSE SUCH A DIFFERENCE TO OCCUR INCLUDE, BUT ARE NOT LIMITED TO: (1) RISKS
ASSOCIATED WITH THE CONSUMMATION OF ACQUISITIONS, INCLUDING THE ABILITY TO
SUCCESSFULLY INTEGRATE THE OPERATIONS OF ACQUIRED BUSINESSES WITH THE EXISTING
OPERATIONS OF THE COMPANY, CLIENT RETENTION AND RISKS INHERENT IN THE ACQUIRED
ENTITIES OPERATIONS; (2) HEIGHTENED COMPETITION, INCLUDING INCREASED PRICE
COMPETITION, IN THE PHARMACY BENEFIT MANAGEMENT BUSINESS; (3) THE POSSIBLE
TERMINATION OF THE COMPANY'S CONTRACTS WITH CERTAIN KEY CLIENTS OR PROVIDERS;
(4) CHANGES IN PRICING OR DISCOUNT PRACTICES OF PHARMACEUTICAL MANUFACTURERS;
(5) THE ABILITY OF THE COMPANY TO CONSUMMATE CONTRACT NEGOTIATIONS WITH
PROSPECTIVE CLIENTS; (6) COMPETITION IN THE BIDDING AND PROPOSAL PROCESS; (7)
ADVERSE RESULTS IN CERTAIN LITIGATION AND REGULATORY MATTERS; (8) THE ADOPTION
OF ADVERSE LEGISLATION OR REGULATIONS OR A CHANGE IN THE INTERPRETATION OF
EXISTING LEGISLATION OR REGULATIONS; (9) THE IMPACT OF INCREASES IN HEALTH CARE
COSTS AND UTILIZATION PATTERNS; (10) RISKS ASSOCIATED WITH THE DEVELOPMENT OF
NEW PRODUCTS; (11) RISKS ASSOCIATED WITH THE "YEAR 2000" ISSUE, INCLUDING THE
ABILITY OF THE COMPANY TO SUCCESSFULLY CONVERT ITS INFORMATION SYSTEMS AND ITS
NON-INFORMATION SYSTEMS, AND THE ABILITY OF ITS VENDORS/TRADING PARTNERS TO
SUCCESSFULLY CONVERT THEIR SYSTEMS, TO ACCOMMODATE DATES BEYOND DECEMBER 31,
1999; AND (12) OTHER RISKS DESCRIBED FROM TIME TO TIME IN THE COMPANY'S FILINGS
WITH THE COMMISSION.
THE COMPANY DOES NOT UNDERTAKE ANY OBLIGATION TO RELEASE PUBLICLY ANY
REVISIONS TO SUCH FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES
AFTER THE DATE HEREOF OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.
COMPANY OVERVIEW
The Company is a leading specialty managed care company and believes it is
the largest full-service pharmacy benefit management ("PBM") company independent
of pharmaceutical manufacturer ownership in North America. The Company provides
healthcare management and administration services on behalf of thousands of
clients that include health maintenance organizations ("HMO's"), health
insurers, third-party administrators, employers and union-sponsored benefit
plans. The Company's PBM services are provided to approximately 22.8 million
members in the United States and Canada enrolled in health plans sponsored by
the Company's clients through numerous networks of retail pharmacies which are
under contract by the Company. The largest network includes more than 50,000
retail pharmacies, representing more than 99% percent of all retail pharmacies
in the United States. The Company also delivers its PBM services through five
mail-order pharmacy service centers owned and operated by the Company. The
Company's PBM services include network claims processing, mail-order pharmacy
services, benefit design consultation, drug utilization review, formulary
management, disease management and medical and drug data analysis services. The
Company also provides medical information management services, which include
provider profiling and outcome assessments, through its Practice Patterns
Science, Inc. ("PPS") subsidiary, infusion therapy services through its IVTx
division ("IVTx"), and informed decision counseling services through its Express
Health LineSM division.
Prior to 1998, the Company's growth had primarily been through the
generation of sales to new clients, internal growth of the membership base of
existing clients, and development and sale of new products and services to
existing clients. Future growth will be affected by the Company's continued
focus on the above factors, along with acquisitions and alliance opportunities,
if any. On April 1, 1998, the Company consummated its first major acquisition by
acquiring the PBM operations of Columbia/HCA Healthcare Corporation
("Columbia"), commonly known as ValueRx. Specifically, the Company acquired all
of the outstanding capital stock of Value Health, Inc. and Managed Prescription
Network, Inc., the sole assets of which at closing were various subsidiaries
each now or formerly conducting business as a PBM, including ValueRx Pharmacy
Program, Inc., for approximately $460 million in cash, which includes
transaction costs of approximately $15 million. The acquisition is being
accounted for under the purchase method of accounting. As such, the Company's
operating results include those of ValueRx from April 1, 1998. The net assets
acquired have been recorded at their estimated fair value, resulting in $313
million of goodwill which is being amortized over 30 years.
The acquisition provides the Company with additional resources and
expertise, which will allow the Company to better serve its clients and
competitively pursue new business in all segments of the market. Historically,
while both the Company and ValueRx have served all segments of the market for
PBM services, the Company primarily focused on managed care and smaller
self-funded plan sponsors and ValueRx concentrated on health insurance carriers
and large employer and union groups. As a result of the acquisition, the Company
now has a strong presence in all market segments.
As of October 1, 1998, the Company serves approximately 22.8 million
members compared to approximately 12.2 million members at September 30, 1997,
which represents an increase of 86.9%. The growth in membership is primarily due
to the ValueRx acquisition and the Company's continuing ability to attract
additional members through internal growth during the third quarter of 1998.
RESULTS OF OPERATIONS
(AMOUNTS IN THOUSANDS, EXCEPT MEMBERSHIP, SHARE AND PER SHARE DATA)
The following table sets forth certain financial data of the Company for
the periods presented as a percentage of net revenue and the percentage change
in the dollar amounts of such financial data for the three months ended
September 30, 1998 compared to 1997 and the nine months ended September 30, 1998
compared to 1997.
<PAGE>
<TABLE>
<CAPTION>
Percentage of Net Revenue Percentage Increase (Decrease)
---------------------------------------- -------------------------------------------------
Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended
September 30, September 30, September 30, 1998 Over September 30, 1998 Over
------------------ ------------------
1998 1997 1998 1997 1997 1997
<S> <C> <C> <C> <C> <C> <C>
-------- -------- -------- -------- ----------------------- -----------------------
Net revenues:
Unrelated clients 98.6% 82.8% 92.7% 83.1% 200.5% 151.1%
Related clients (1) 1.4% 17.2% 7.3% 16.9% (78.8%) (2.4%)
================== ==================
Total net revenues 100.0% 100.0% 100.0% 100.0% 152.3% 125.1%
================== ==================
Cost and expenses:
Cost of revenues 91.5% 91.2% 91.7% 91.1% 153.3% 126.5%
Selling, general and
administrative 5.4% 4.9% 5.1% 4.8% 173.9% 136.6%
Corporate restructuring
expense - - 0.1% - nm nm
------------------ ------------------
96.9% 96.1% 96.9% 95.9% 154.3% 127.2%
------------------ ------------------
Operating Income 3.1% 3.9% 3.1% 4.1% 103.5% 74.6%
Other income(expense), net (0.6%) 0.5% (0.4%) 0.4% (423.9%) (297.5%)
------------------ ------------------
Income before income taxes 2.5% 4.4% 2.7% 4.5% 44.7% 36.3%
Provision for income taxes 1.1% 1.7% 1.2% 1.7% 65.6% 52.4%
================== ==================
Net Income 1.4% 2.7% 1.5% 2.8% 31.2% 26.1%
================== ==================
<FN>
nm = not meaningful
(1) Related clients consist of NYLCare Health Plans, Inc., and its subsidiaries ("NYLCare"), wholly-owned subsidiaries of New
York Life Insurance Company ("NYL"), which were sold to Aetna U.S. Healthcare, Inc. ("Aetna"), an unrelated party, on July 15,
1998. See "Other Matters" below.
</FN>
</TABLE>
NET REVENUES
Net revenues for PBM services for the third quarter of 1998 and the first
nine months of 1998 increased $482,275, or 156.5%, and $1,089,793, or 128.2%,
compared to the third quarter of 1997 and the first nine months of 1997,
respectively. The increases are primarily due to increased membership resulting
from the acquisition of ValueRx and, to a lesser extent, to the Company's
ability to retain existing clients and attract new clients. The increased
membership base resulted in the number of pharmacy claims processed (which
includes network pharmacy claims and mail order pharmacy claims at their network
pharmacy claims equivalent) increasing 73.5% and 56.0% from the third quarter of
1997 and from the first nine months of 1997, respectively.
The average net revenue per pharmacy claim (which includes network pharmacy
claims and mail order pharmacy claims at their network pharmacy claims
equivalent) increased 46.9% and 45.7% from the third quarter of 1997 and from
the first nine months of 1997, respectively. The increases are primarily due to
the following factors: (1) a larger number of customers using retail pharmacy
networks established by the Company rather than retail pharmacy networks
established by the Company's customers; (2) higher drug ingredient costs
resulting from changes in therapeutic mix and dosage, increases in product
acquisition costs for existing drugs, and new drugs introduced into the
marketplace; and (3) the termination of mail order "inventory replacement
programs" maintained for two large clients during the first four months of 1997
(affects only the nine month comparison). Increases in revenue from these
factors were partially offset by lower pricing offered by the Company in
response to continued competitive pressures.
When customers use one of the Company's retail pharmacy networks, the drug
ingredient cost, the dispensing fee and the Company's administrative fee are
recorded as revenue, and the resulting cost is recorded in cost of revenue. For
customers that contract their own retail pharmacy network, the Company records
only its administrative fees as revenue. The number of customers using retail
pharmacy networks established by the Company was significantly enhanced
beginning in the second quarter of 1998 due to the acquisition of ValueRx, as
substantially all ValueRx customers use the retail pharmacy networks established
by ValueRx. As a result of this shift, gross margin percentages are reduced but
the amount of the gross margin is not materially affected.
Under the inventory replacement programs offered in 1997, the customer
provided drug inventory to replenish drugs used by the Company to fill mail
service prescriptions for members of the customer's plan and the Company
included only its dispensing fee as net revenue. For the first nine months of
1998, all mail pharmacy clients utilized the Company's standard program in which
the Company purchases the inventory used to fill the prescriptions and,
therefore, includes the ingredient cost as well as the dispensing fee in net
revenue. This change had the effect of increasing both revenue and cost of
revenue during the first nine months of 1998 compared to 1997, but there was no
significant effect on the Company's reported gross margin during the first nine
months of 1998 from the conversion to the standard program.
As of July 15, 1998, NYLCare was sold to Aetna and is no longer a related
party to the Company. Therefore, only 1.3% of the third quarter 1998 net
revenues from PBM services were from services provided to members of HMO's owned
or managed by NYLCare or insurance policies administered by NYLCare, while it
was a wholly-owned subsidiary of NYL. For the first nine months of 1998, the
Company derived 6.8% of its net revenues from PBM services from services
provided to members of HMO's owned or managed by NYLCare or insurance policies
administered by NYLCare, while it was a wholly-owned subsidiary of NYL
Net revenues for non-PBM services for the third quarter of 1998 and the
first nine months of 1998 increased $5,107, or 43.5%, and $13,852, or 42.9%,
compared to the third quarter of 1997 and the first nine months of 1997,
respectively. The increases are primarily due to the continued growth in the
number of members and/or clients who receive these services and the Company's
ability to develop new products and services. Of the Company's net revenues for
non-PBM services, 7.3% and 31.9% was for services provided to members of HMO's
owned or managed by NYLCare or insurance policies administered by NYLCare, while
it was a wholly-owned subsidiary of NYL, during the third quarter of 1998 and
the first nine months of 1998, respectively.
COST OF REVENUES
Cost of revenues for PBM services for the third quarter of 1998 and the
first nine months of 1998 increased $443,039, or 156.6%, and $1,006,083, or
128.9%, compared to the third quarter of 1997 and the first nine months of 1997,
respectively. As a percentage of PBM services net revenue, cost of revenues for
the third quarter of 1998 remained level compared to the third quarter of 1997.
For the first nine months of 1998, the cost of revenue as a percentage of PBM
services net revenue increased 0.3 percentage points over the first nine months
of 1997. The stabilization of the gross margin during the third quarter was
primarily due to the Company generating revenue from complementary PBM services,
such as medical and drug data analysis, that provide higher gross margins. For
the first nine months of 1998, the gross margin decreased primarily due to (1)
the shift towards pharmacy networks established by the Company, as opposed to
those established by its clients, (2) higher drug ingredient costs, (3) the
shift in the mix of pharmacy claims processed, as mail-order pharmacy claims
represented a higher percentage of total pharmacy claims processed
(historically, the gross margin, as a percentage of the respective net revenue
for mail-order pharmacy services has been lower than for network pharmacy
services, but the actual gross margin per claim is higher than the gross margin
per claim for network pharmacy claims; as the Company's mail order volume
increases, the differential between the gross margins, expressed as a percentage
of respective net revenues, should decrease), and (4) termination of the
inventory replacement programs, as discussed above for "Net Revenues", along
with the lower gross margins realized from the large employer market segment,
due to the highly competitive nature of that segment.
Cost of revenues for non-PBM services for the third quarter of 1998 and the
first nine months of 1998 increased $3,915, or 45.2%, and $10,717, or 45.6%,
compared to the third quarter of 1997 and the first nine months of 1997,
respectively. The increases are primarily due to costs related to the continued
expansion of these operations and a change in the product mix sold during the
third quarter of 1998 and first nine months of 1998.
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative expenses for the third quarter of 1998
and the first nine months of 1998 increased $27,396, or 173.9%, and $58,456, or
136.6%, compared to the third quarter of 1997 and the first nine months of 1997,
respectively. As a percentage of total net revenues, selling, general and
administrative expenses increased 0.5 percentage points for the third quarter of
1998 over the third quarter of 1997 and 0.3 percentage points for the first nine
months of 1998 over the first nine months of 1997. The increases are primarily
attributable to the ValueRx acquisition (including amortization of goodwill and
other intangible assets associated with the ValueRx acquisition, and expenses
associated with the integration of ValueRx) and the additional expenditures
required to expand the operational and administrative support functions to
enhance management of the pharmacy benefit.
Subsequent to the acquisition of ValueRx, the Company undertook the
integration of ValueRx in an effort to reduce operating costs as a percentage of
sales, excluding depreciation and amortization expense. During the third
quarter, the Company continued to meet its integration goals by combining
existing contracts and contracting procedures related to both suppliers and
providers, implementing financial reporting systems and completing a systems
integration plan for all other systems, including knowledge systems, claims
adjudication and mail service systems, and consolidating financial operations.
Integration goals for the fourth quarter of fiscal 1998 include the
implementation of a new sales and marketing program for enhanced PBM services
and continuing the integration of the computer platforms and systems
applications. Except for certain systems development costs, the Company is
expensing integration costs as incurred.
Excluding depreciation and amortization of $6,224 and $1,232 for the third
quarter of 1998 and 1997, respectively, and $12,511 and $3,293 for the first
nine months of 1998 and 1997, respectively, selling, general and administrative
expenses, as a percentage of total net revenues, remained constant.
CORPORATE RESTRUCTURING EXPENSES
On June 17, 1998, the Company announced that it had reached an agreement
with Cole Managed Vision ("Cole"), a subsidiary of Cole National Corporation,
pursuant to which Cole will provide certain vision care services for the
Company's clients and their members. The agreement enables the Company to focus
on its PBM business while still offering a vision care service to its members by
transferring certain functions performed by its Express Scripts Vision
Corporation to Cole, effective September 1, 1998. In conjunction with the
agreement, the Company also announced plans to close the operations of its
wholly-owned subsidiary, PhyNet, Inc. As a result, the Company recorded a
one-time restructuring charge of $1,651, comprised of asset write-downs of
$1,235 and expected employee transition cash payments of $416. As of September
30, 1998, the Company has not incurred any cash expenditures associated with
this restructuring. The complete shutdown and transfer of all functions of the
Company's managed vision operations occurred on October 1, 1998. Therefore, the
Company expects to incur the majority of the restructuring costs during the
fourth quarter of 1998.
OTHER INCOME (EXPENSE)
For the third quarter of 1998 and the first nine months of 1998, the
Company recorded net other expenses of $5,118 and $8,110, compared to net other
income of $1,580 and $4,106, for the third quarter of 1997 and the first nine
months of 1997, respectively. The movement to other expense from other income is
due to the Company incurring interest expense totaling $13,775 during the second
and third quarters of 1998 related to the acquisition debt.
PROVISION FOR INCOME TAXES
The provision for income taxes for the third quarter of 1998 and the first
nine months of 1998 was $9,201 and $23,738 compared to $5,556 and $15,580 for
the third quarter of 1997 and the first nine months of 1997, respectively. The
effective tax rate increased to 44.9% for the third quarter of 1998 compared to
39.2% for the third quarter of 1997. For the first nine months of 1998, the
effective tax rate increased to 43.6% compared to 39.0% for the same period in
1997. The increases in the effective tax rate is primarily due to the addition
of non-deductible goodwill and other intangible assets amortization expense
derived from the ValueRx acquisition. It is expected that the effective tax rate
will slowly decline as the Company's operating growth continues.
NET INCOME
As a result of the foregoing, net income for the third quarter ended and
the nine months ended September 30, 1998, increased $2,690, or 31.2%, and
$6,365, or 26.1%, compared to the same periods in 1997. Excluding the after-tax
one-time restructuring charge for the managed vision business, net income for
the nine months ended September 30, 1998 increased $7,367, or 30.2%, compared to
1997.
EARNINGS PER SHARE
For the third quarter of 1998, the Company reported basic earnings per
share of $0.34 compared to $0.26 in 1997, a 30.8% increase. The weighted average
number of shares used in the calculation was 33,121,000 in 1998 and 32,800,000
in 1997. Diluted earnings per share was $0.34 in the third quarter of 1998
compared to $0.26 in 1997, a 30.8% increase. The weighted average number of
shares used in the calculation was 33,682,000 in 1998 and 33,187,000 in 1997.
For the first nine months of 1998, the Company reported basic earnings per
share of $0.93 compared to $0.75 in 1997, a 24.0% increase. The weighted average
number of shares used in the calculation was 33,091,000 in 1998 and 32,624,000
in 1997. Diluted earnings per share was $0.91 in the first nine months of 1998
compared to $0.74 in 1997, a 23.0% increase. The weighted average number of
shares used in the calculation was 33,635,000 in 1998 and 33,007,000 in 1997.
On October 12, 1998, the Company announced a two-for-one stock split of its
Class A and Class B common stock for stockholders of record on October 20, 1998,
effective October 30, 1998. The split was effected in the form of a dividend by
issuance of one additional share of Class A common stock for each share of Class
A common stock outstanding and one additional share of Class B common stock for
each share of Class B common stock outstanding. The earnings per share and the
weighted average number of shares outstanding for basic and diluted earnings per
share have been adjusted for the stock split.
Excluding the after-tax one-time restructuring charge for the managed
vision business, basic earnings per share and diluted earnings per share for the
first nine months of 1998 would have been $0.96 and $0.94, or an increase of
28.0% and 27.0%, respectively.
LIQUIDITY AND CAPITAL RESOURCES
The Company continued to generate significant cash flow from operations.
During the first nine months of 1998 the Company generated $99,772 of cash flow
from operations compared to $32,526 for the same period in 1997. This cash
generation includes the operations of ValueRx after April 1, 1998 and is the
result of management's continued emphasis on the collection of accounts
receivable balances, the management of inventories, and the management of
payables to vendors and retail pharmacy providers. Management expects to fund
its future anticipated capital expenditures, debt service, integration costs,
Year 2000 costs, and other normal operating cash needs primarily with operating
cash flow.
During the first quarter of 1998, the Company negotiated a $440,000 credit
facility with a bank syndicate led by Bankers Trust Company. The five-year
agreement became effective April 1, 1998, and includes a $360,000 term loan
facility and an $80,000 revolving loan facility; the term loan proceeds were
utilized to consummate the acquisition of ValueRx from Columbia on April 1,
1998. The agreement is guaranteed by the Company's domestic subsidiaries other
than PPS, and Great Plains Reinsurance Company ("Great Plains") and secured by
certain of the Company's assets, including pledges of 100% (or, in the case of
foreign subsidiaries, 65%) of the capital stock of the Company and its
subsidiaries other than PPS and Great Plains. The provisions of this credit
facility require quarterly interest payments and, beginning in April 1999,
semi-annual principal payments of $27,000 increasing to $36,000 in April 2000,
to $45,000 in April 2001, and to $48,000 in April 2002. The interest rate is
based on a spread (the "Credit Rate Spread") over several London Interbank
Offered Rates or base rate options, depending upon the Company's ratio of
earnings before interest, taxes, depreciation and amortization to debt. However,
the initial spread is fixed at 125 basis points for the first two quarters. The
credit agreement also contains customary financial covenants, such as interest
coverage, leverage, and consolidated net worth. In addition, the Company is
required to pay an annual fee of 30 basis points, payable in quarterly
installments, on the unused portion of the revolving loan. As a result of the
new credit agreement, the Company canceled its $25,000 line of credit with
Mercantile Bank of St. Louis on March 31, 1998.
To alleviate interest rate volatility in connection with the
above-described credit facility, the Company entered into an interest rate swap
arrangement, effective April 3, 1998, with the First National Bank of Chicago
agreeing to receive a floating rate of interest on the amount of the term loan
facility based on a three month LIBOR rate in exchange for payment of a fixed
rate of interest of 5.88% per annum. The notional amount of the swap amortizes
in equal amounts with the principal balance of the term loan. As a result, the
Company has, in effect, converted its variable rate term debt to fixed rate debt
at 5.88% per annum for the entire term of the term loan, plus the Credit Rate
Spread.
As of September 30, 1998, the Company had repurchased a total of 237,500
(pre-split basis) shares of its Class A Common Stock under the open-market stock
repurchase program announced by the Company on October 25, 1996, although no
repurchases occurred during the first nine months of 1998. The Company's Board
of Directors approved the repurchase of up to 850,000 (pre-split basis) shares,
and placed no limit on the duration of the program. Future purchases, if any,
will be in such amounts and at such times as the Company deems appropriate based
upon prevailing market and business conditions, subject to certain restrictions
in the credit agreement described above.
The Company has reviewed and currently intends to continue to review
potential acquisitions and affiliation opportunities. The Company believes that
available cash resources, bank financing or the issuance of additional common
stock could be used to finance such acquisitions or affiliations. The Company
consummated the acquisition of ValueRx on April 1, 1998; however, there can be
no assurance the Company will make other acquisitions or affiliations in 1998 or
thereafter.
OTHER MATTERS
On March 16, 1998, the Company announced that, in connection with the
consummation of the sale by NYL of NYLCare to Aetna (which occurred on July 15,
1998), the Company and Aetna had reached an agreement to extend the Company's
HMO PBM services and infusion therapy services agreements through December 31,
2003. The existing PBM contract pricing is effective through December 31, 1999,
and thereafter certain pricing adjustments (which the Company believes reflect
an appropriate market price) will be instituted for the year 2000 and subsequent
periods. The agreement between Aetna and the Company provides that the Company
will continue providing PBM services to 1.4 million HMO members through 2003,
which is comparable to the NYLCare HMO membership base served by the Company
prior to the Aetna acquisition. The infusion therapy agreements are extended
under their current terms until December 31, 2000, and thereafter limited price
adjustments may take effect under certain circumstances. The existing agreements
for managed vision care and informed decision counseling will continue until
December 31, 1999. The Company will also continue to provide PBM services to
members of the NYLCare indemnity programs until such members are converted to
new health insurance policies. In connection with the Aetna arrangement, the
Company and NYL have reached an agreement in principle whereby NYL may make
certain transition-related payments to the Company in 1999. This agreement is
subject to the approval of the Audit Committee of the Company's Board of
Directors. The overall impact of this arrangement on earnings per share is not
expected to be material in 1998 or 1999.
Effective with the first quarter of 1998, the Company adopted Statement of
Financial Accounting Standards Statement 130, "Reporting Comprehensive Income."
The Statement requires noncash changes in stockholders' equity be combined with
net income and reported in a new financial statement category entitled
"comprehensive income." Other than net income, the only component of
comprehensive income for the Company is the change in the foreign currency
translation account.
In June 1997, the FASB issued Statement of Financial Accounting Standards
Statement 131, "Disclosures about Segments of an Enterprise and Related
Information" ("FAS 131"). The Statement requires that the Company report certain
information if specific requirements are met about operating segments of the
Company including information about services, geographic areas of operation and
major customers. FAS 131 is effective for years beginning after December 15,
1997. The Company provides integrated PBM services to its customers under a
single contract. These services account for substantially all of the Company's
net revenues on an annual basis. As a result, the Company believes that the
majority of its operations will be in one reportable segment in 1998.
In June 1998, the FASB issued Statement of Financial Accounting Standards
Statement 133, "Accounting for Derivative Instruments and Hedging Activities"
("FAS 133"). The Statement requires all derivatives be recognized as either
assets or liabilities in the statement of financial position and measure those
instruments at fair value. In addition, the Statement specifies the accounting
for changes in the fair value of a derivative based on the intended use of the
derivative and the resulting designation. FAS 133 is effective for all fiscal
quarters of fiscal years beginning after June 15, 1999 and will be applicable to
the Company's first quarter of fiscal year 2000. The Company's present interest
rate swap (see "Liquidity and Capital Resources") would be considered a cash
flow hedge. Accordingly, the change in the fair value of the swap would be
reported on the balance sheet as an asset or liability. The corresponding
unrealized gain or loss representing the effective portion of the hedge will be
initially recognized in stockholders' equity and other comprehensive income and
subsequently any changes in unrealized gain or loss from the initial measurement
date will be recognized in earnings concurrent with the interest expense on the
Company's underlying variable rate debt. At the present time, it is
indeterminable how application of this Statement will impact the Company's
statement of operations.
YEAR 2000
The Company's operations rely heavily on information systems technology. In
1995, the Company began addressing the "Year 2000" issue which, in short, refers
to the inability of certain computer systems to properly recognize calendar
dates beyond December 31, 1999. This arises as a result of systems having been
programmed with two-digits rather than four-digits to define the applicable year
in order to conserve computer storage space, reduce the complexity of
calculations and produce better performance. The two-digit system may cause
computers to interpret the year "00" as "1900" rather than as "2000", which may
cause system failures or produce incorrect results when dealing with
date-sensitive information beyond the year 1999.
The Company formed a Year 2000 task force to address this issue, which has
performed a self-assessment and developed a compliance plan that addresses (i)
internally developed application software, (ii) vendor developed application
software, (iii) operating system software, (iv) utility software, (v)
vendor/trading partner-supplied files, (vi) externally provided data or
transactions, (vii) non-information technology devices that are material to the
Company's business, and (viii) adherence to applicable industry standards.
Progress in each area is monitored and management reports are given
periodically.
The Company has various applications and operating systems that are
considered critical to its operations. Approximately 75% of these systems are in
the process of being tested in an integrated environment by the Company for Year
2000 compliance and are expected to be fully tested by December 31, 1998. The
remaining systems will either (i) be tested, if necessary, and modified as
required to be compliant during the fourth quarter of 1998 and the first quarter
of 1999, or (ii) information residing on such systems will be integrated into a
Year 2000 compliant operating system (as outlined in the Company's integration
plans discussed above). Testing of the applications and operating systems
includes the adjudication process (retail network, mail order and member
submit), the eligibility process, the billing and remittance process, the
communication process and the reporting process (batch and on-line), including
financial reporting. In addition, since 1995, all new internally developed
software has been developed to be Year 2000 compliant and will be tested during
the remainder of 1998 and 1999.
The Company has sent out approximately 1,500 letters to critical
vendor/trading partners requesting a status regarding their Year 2000
compliance. The Company has received responses for approximately 30% of the
letters sent with the majority of the vendor/trading partners responding that
they are currently addressing the Year 2000 issue and expect to be compliant.
The Company expects to send a second request to the vendor/trading partners that
have not responded during the fourth quarter of 1998. In addition, the Company
expects to receive periodic updates from the vendor/trading partners.
The Company has also contacted several hundred clients and several thousand
pharmacies whose computer systems appear to the Company not to be Year 2000
compliant in an effort to increase awareness of the problem and minimize or
eliminate any disruption in data transfer activity between such parties and the
Company. The Company has developed date "windowing" logic which it believes will
address various issues concerning retail pharmacies and clients with
noncompliant systems.
In addressing the Year 2000 issue, the Company will incur internal staff
costs as well as external consulting and other expenses related to
infrastructure enhancements necessary to prepare its systems for the new
century. The Company does not believe the costs associated with addressing the
Year 2000 issue, which are being expensed as incurred, are materially greater
than the normal recurring costs associated with systems development and
maintenance. To date, these costs have not had a material adverse effect on the
Company's results of operations or financial condition, and are not expected to
have a material adverse effect on the Company's future results of operations or
financial condition.
The Company believes that, with appropriate modifications to existing
computer systems, updates by vendors and trading partners, and conversion to new
software in the ordinary course of its business, the Year 2000 issue will not
pose significant operational problems for the Company. However, if the above
described conversions are not completed in a proper and timely manner by all
affected parties, or if the Company's logic for communicating with noncompliant
systems is ineffective, the Year 2000 issue could result in material adverse
operational and financial consequences to the Company, and there can be no
assurance that the Company's efforts, or those of vendors and trading partners
(who are beyond the Company's control), to address the Year 2000 issue, will be
successful.
The Company is in the process of formalizing its contingency plans to
address potential risks, including risks of vendor/trading partner
noncompliance, as well as noncompliance of any of the Company's material
operations. However, the formalization of the contingency plans is an ongoing
process as the Company completes its testing and receives updates from
vendor/trading partners. In addition, there can be no assurance that the
Company's contingency plans will successfully address all potential
circumstances or consequences, if any.
IMPACT OF INFLATION
Changes in prices charged by manufacturers and wholesalers for
pharmaceuticals affect the Company's net revenues and cost of revenues. To date
the Company has been able to recover price increases from its clients under the
terms of its agreements. As a result, changes in pharmaceutical prices have not
had a significant adverse affect on the Company.
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS.
As discussed in detail in the Company's Quarterly Report on Form 10-Q for
the period ended June 30, 1998, filed with the Securities and Exchange
Commission on August 13, 1998 (the "Second Quarter 10-Q"), the Company acquired
all of the outstanding capital stock of Value Health, Inc., a Delaware
corporation ("VHI"), and Managed Prescription Network, Inc., a Delaware
corporation ("MPN") from Columbia HCA/HealthCare Corporation ("Columbia") and
its affiliates on April 1, 1998 (the "Acquisition"). VHI, MPN and/or their
subsidiaries (collectively, the "Acquired Entities"), were party to various
legal proceedings, investigations or claims at the time of the Acquisition. The
effect of these actions on the Company's future financial results is not subject
to reasonable estimation because considerable uncertainty exists about the
outcomes. Nevertheless, in the opinion of management, the ultimate liabilities
resulting from any such lawsuits, investigations or claims now pending will not
materially affect the consolidated financial position, results of operations or
cash flows of the Company. A brief update of the most notable of the proceedings
follows:
As discussed in detail in the Second Quarter 10-Q, VHI and several of its
subsidiaries are party to two securities litigation matters, BASH, ET AL. V.
VALUE HEALTH, INC., ET AL., No. 3:97cv2711 (JCH)(D.Conn.), and FREEDMAN, ET AL.
V. VALUE HEALTH, INC., ET AL., No. 3:95 CV 2038 (JCH)(D.Conn). The two lawsuits,
filed in 1995, allege that VHI and certain other defendants made false or
misleading statements to the public in connection with VHI's acquisition of
Diagnostek, Inc. in 1995. On April 24, 1998, the two lawsuits were consolidated.
On August 18, 1998, the plaintiffs moved for class certification. The defendants
opposed this motion on September 21, 1998, and the plaintiffs' reply was filed
on November 6, 1998. The parties are now awaiting the court's order.
In connection with the Acquisition, Columbia has agreed to defend and hold
the Company and its affiliates (including VHI) harmless from and against any
liability that may arise in connection with either of the foregoing proceedings.
Consequently, the Company does not believe it will incur any material liability
in connection with the foregoing matters.
Item 5. OTHER INFORMATION.
In accordance with the amended Bylaws of the Company, a stockholder who at
any annual meeting of stockholders of the Company intends to nominate a person
for election as a director or present a proposal must so notify the Secretary of
the Company, in writing, describing such nominee(s) or proposal and providing
information concerning such stockholder and the reasons for and interest of such
stockholder in the proposal. Generally, to be timely, such notice must be
received by the Secretary during the 30 day period that ends 90 days before the
anniversary of the prior years' annual meeting. The Company's last annual
meeting was held May 27, 1998, so any such notice must be received between
January 27, 1999 and February 26, 1999 to be considered timely for purposes of
the 1999 Annual Meeting. Any person interested in making such a nomination or
proposal should request a copy of the relevant Bylaw provisions from the
Secretary of the Company. These time periods also apply in determining whether
notice is timely for purposes of rules adopted by the Securities and Exchange
Commission relating to exercise of discretionary voting authority, and are
separate from and in addition to the Securities and Exchange Commission's
requirements that a stockholder must meet to have a proposal included in the
Company's proxy statement. Stockholder proposals intended to be presented at the
1999 Annual Meeting must be received by the Company no later than December 24,
1998, in order to be eligible for inclusion in the Company's proxy statement and
proxy relating to that meeting. Upon receipt of any proposal, the Company will
determine whether to include such proposal in accordance with regulations
governing the solicitation of proxies.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBITS. See Index to Exhibits on page 28.
(b) REPORTS ON FORM 8-K.
(i) On July 20, 1998, the Company filed a
Current Report on Form 8-K regarding a press
release issued on behalf of the Company
concerning the restructuring of its managed
vision operations.
(ii) On August 5, 1998, the Company filed a
Current Report on Form 8-K regarding a press
release issued on behalf of the Company
concerning its second quarter 1998 financial
performance.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EXPRESS SCRIPTS, INC.
(Registrant)
Date: November 12, 1998 By: /s/ Barrett A. Toan
Barrett A. Toan, President and
Chief Executive Officer
Date: November 12, 1998 By: /s/ George Paz
George Paz, Senior Vice
President and Chief
Financial Officer
INDEX TO EXHIBITS
(Express Scripts, Inc. - Commission File Number 0-20199)
EXHIBIT
NUMBER EXHIBIT
2.1 Stock Purchase Agreement by and among Columbia/HCA Healthcare
Corporation, VH Holdings, Inc., Galen Holdings, Inc. and Express
Scripts, Inc., dated as of February 19, 1998, and certain related
Schedules, incorporated by reference to Exhibit No. 2.1 to the Company's
Current Report on Form 8-K filed March 2, 1998 (all Schedules, other
than those relating to the calculation of the Purchase Price [as
defined therein] are omitted from this filing, but will be filed with
the Commission supplementally upon request).
2.2 First Amendment to Stock Purchase Agreement by and among Columbia/HCA
Healthcare Corporation, VH Holdings, Inc., Galen Holdings, Inc. and
Express Scripts, Inc., dated as of March 31, 1998, and related Exhibits
incorporated by reference to Exhibit No. 2.1 to the Company's Current
Report on Form 8-K filed April 14, 1998 (all Exhibits are omitted from
this filing, but will be filed with the Commission supplementary upon
request).
3.1 Certificate of Incorporation, incorporated by reference to Exhibit
No. 3.1 to the Company's Registration Statement on Form S-1 filed
June 9, 1992 (No. 33-46974) (the "Registration Statement").
3.2 Certificate of Amendment of the Certificate of Incorporation of the
Company, incorporated by reference to Exhibit No. 10.6 to the Company's
Quarterly Report on Form 10-Q for the quarter ending June 30, 1994.
3.3* Second Amended and Restated Bylaws, as amended.
4.1 Form of Certificate for Class A Common Stock, incorporated by reference
to Exhibit No. 4.1 to the Registration Statement.
10.1* Lease Extension and Amendment Agreement dated as of July 24,
1998, between Faith A. Griefen and ValueRX Pharmacy Program,
Inc., an indirect subsidiary of the Company.
10.2* Office Lease dated as of August 14, 1998 by and between Duke
Realty Limited Partnership, by and through its general partner,
Duke Realty Investments, Inc., and the Company.
10.3* Seventh Amendment to Lease dated as of August 14, 1998, by and
between Duke Realty Limited Partnership, by and through its
general partner, Duke Realty Investments, Inc., and the Company.
10.4* Eighth Amendment to Lease dated as of August 14, 1998, by and between
Duke Realty Limited Partnership, by and through its general partner,
Duke Realty Investments, Inc., and the Company.
27.1* Financial Data Schedule (provided for the information of the U.S.
Securities and Exchange Commission only).
* Filed herein.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 101,100
<SECURITIES> 0
<RECEIVABLES> 417,813
<ALLOWANCES> 26,514
<INVENTORY> 42,344
<CURRENT-ASSETS> 585,046
<PP&E> 106,466
<DEPRECIATION> 31,074
<TOTAL-ASSETS> 1,055,678
<CURRENT-LIABILITIES> 484,556
<BONDS> 0
0
0
<COMMON> 168
<OTHER-SE> 236,755
<TOTAL-LIABILITY-AND-EQUITY> 1,055,678
<SALES> 807,319
<TOTAL-REVENUES> 807,319
<CGS> 738,544
<TOTAL-COSTS> 781,697
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,912
<INCOME-PRETAX> 20,504
<INCOME-TAX> 9,201
<INCOME-CONTINUING> 11,303
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,303
<EPS-PRIMARY> .34<F1>
<EPS-DILUTED> .34<F1>
<FN>
<F1>EPS HAS BEEN ADJUSTED FOR THE STOCK-SPLIT EFFECTIVE ON OCTOBER 30, 1998
</FN>
</TABLE>
EXHIBIT 10.1
LEASE EXTENSION AND AMENDMENT AGREEMENT
This Lease Extension and Amendment Agreement ("Amendment") is made as of
July 24, 1998, between Faith A. Griefen of 1010 Waltham Street, Lexington, MA
02173 ("Lessor"), and ValueRx Pharmacy Program, Inc. of 4700 Nathan Lane North,
Plymouth, MN 55442-2599 ("Lessee").
BASIS OF AGREEMENT
A. The parties have agreed to amend and extend that certain Lease dated the
12th day of June 1989, between Michael D. Brockelman and James S. Gratton, as
trustees under agreement dated April 17, 1980 and Health Care Services, Inc., a
copy of which is attached hereto as Exhibit B and made a part hereof (the
"Lease"), under which Lessee now occupies 41,020 sq. ft. sited at and known as
3684 Marshall Lane, Bensalem, Pennsylvania 19020. Faith A. Griefen acquired
ownership of the building and real property of which the Premises form a part by
conveyance from Michael D. Brockelman and James S. Gratton. ValueRx Pharmacy
Program, Inc. is a successor in interest to Health Care Services, Inc.
B. The parties desire to set forth herein their agreement regarding the
provisions of the Lease as amended and extended.
C. All capitalized terms not otherwise defined herein shall have the
meanings set for in the Lease.
Now, therefore, the parties agree as follows:
1. Parties: All references in the Lease to "Lessor" shall be deemed to
refer to Faith A. Griefen. All references in the Lease to "Lessee" shall be
deemed to refer to ValueRx Pharmacy Program, Inc.
2. References: In 1996, the Premises were expanded as a result of certain
space taken from Bombardier Transit Corp., an adjacent tenant of the building.
As a result thereof, Lessee now occupies 41,020 square feet of the building.
Exhibit A to this Amendment, which includes this additional space, hereby
replaces existing Exhibit A to the Lease. All references in the Lease to
"Premises" shall refer to the 41,020 square feet of space now occupied by Lessee
as shown on Exhibit A. All references in the lease to "37,420 square feet" shall
be deemed to refer to "41,020 square feet". Finally, to correct a typographical
error, all references in the Lease to "3684 Meadow Lane" shall instead refer to
"3684 Marshall Lane".
3. Extension of Term: The term of the Lease is hereby extended for an
additional ten (10) years commencing July 1, 1999 and terminating at 11:59 p.m.
on June 30, 2009.
4. Base Rent During Extension Term: The Base Rent during the extension term
shall be as follows:
a. For the first five (5) years commencing July 1, 1999 and terminating
June 30, 2004, at the rate of $6.35 per sq. ft. per year ($260,477.00 payable in
equal monthly installments of $21,706.42).
b. For the second five (5) years commencing July 1, 2004 and terminating
June 30, 2009 at a rate of $7.35 per sq. ft. per year ($301.497.00 payable in
equal monthly installments of $25,124.75).
5. Cancellation: So long as the Lessee is not in default under the Lease,
Lessee may terminate the Lease effective June 30, 2006 by giving notice in
writing to the Lessor on or before December 31, 2005 of the Lessee's intention
to terminate the Lease. Lessee agrees to a cancellation fee of six (6) months
Base Rent plus six (6) months of Lessee's Share of Additional Rent which
includes Real Estate Taxes and Operating Expenses, both to be paid together with
the delivery of the notice of termination.
6. Renewal Options: Sections 3 and 4(c) of the Lease are hereby deleted and
replaced with the following:
First Renewal Option: Provided Lessee is not in default under the Lease,
Lessee shall have the option to renew the Lease for an additional five (5) years
commencing July 1, 2009 and terminating June 30, 2014. In the event Lessee
elects to exercise this option, Lessee shall notify the Lessor in writing on or
before June 30, 2008. In the event Lessee exercises this option, all terms of
the Lease as amended and extended will remain in full force with the exception
that the Base Rent payable during such extended term shall be the greater of
either (a) $8.35 per sq. ft. per year ($342,517.00) or (b) an amount computed by
multiplying the percentage increase of Bureau of Labor Statistics Consumer Price
Index, all urban consumers (CPI/U) all items (1982-84 equals 100) for
Philadelphia, Pennsylvania for June 2009 (as estimated by Lessee's accountant
until actual statistics are available) over the same index for July 2004 times
the sum of $301,497.00. Said amount shall be paid in equal monthly installments
commencing July 1, 2009.
Second Renewal Option: Provided Lessee has exercised its option as more
fully outlined in the preceding paragraph, and provided Lessee is not in default
under the Lease, Lessee shall have the option to renew the Lease agreement for
an additional five (5) year period commencing July 1, 2014, and terminating June
30, 2019. In the event Lessee elects to exercise this option, Lessee shall
notify Lessor, in writing, on or before June 30, 2013. In the event Lessee
elects to exercise this option, all terms, conditions and covenants of the Lease
as amended and extended will remain in full force and effect with the exception
that the Base Rent payable during such extended term shall be the greater of
$9.35 per sq. ft. per year ($383,537.00) or an amount computed by multiplying
the percentage increase of the Bureau of Labor Statistics Consumer Price Index,
all Urban Consumers (CPI/U), all items (1982-84 equals 100) for Philadelphia,
Pennsylvania for June 2014 (as estimated by Lessee's accountant until actual
statistics are available) over the same index for July 2009 times the annual
Base Rent payable for the period commencing July 1, 2009 and terminating June
30, 2014. Said amount shall be paid in equal monthly installments commencing
July l, 2014.
7. Expansion: Should any adjacent space become available in the building of
which the Premises is a part, Lessor shall promptly notify Lessee of the same in
writing. Prior to offering the space for lease to any other party and for a
period of thirty (30) days from said notice, Lessee shall have an exclusive
option to lease such space (and any and all parking rights appurtenant thereto)
from Lessor upon the same terms and conditions set forth in the Lease,
including, without limitation, annual Base Rent per square foot. Any such
expansion space (and parking) accepted by Lessee shall become part of the
"Premises" as such term is used in the Lease. Upon the request of either party,
Lessor and Lessee shall execute an amendment to the Lease confirming the lease
of such additional space (and parking).
8. Damage or Destruction to the Premises: Notwithstanding anything to the
contrary set forth in Section 15 of the Lease, (i) if the Premises, or any
portion thereof, shall be damaged by fire or any other casualty to the extent of
more than 50% of the floor space thereof and Lessee is, as a result thereof,
unable to operate its business therein, Lessee shall have the right to terminate
the Lease upon 60 day's notice, such notice to be given within 30 days after the
casualty, or (ii) if in any instance where Lessor is obligated or elects to
restore the Premises and fails to complete such restoration within 120 days
after the date of the damage or destruction, Lessee shall have the right to
terminate the Lease upon 60 day's notice, such notice to be given within 30 days
following the expiration of such 120 day period.
9. Eminent Domain: Notwithstanding anything to the contrary set forth in
Section 16 of the Lease, (i) if the Premises, or any portion thereof, shall be
taken under eminent domain proceedings, or transferred to a public authority in
lieu of such proceedings, to the extent of more than 25% of the floor space
thereof, or (ii) if any portion of the parking lot serving the building shall be
taken such that there remains insufficient parking for Lessee's business
operations after accounting for parking use by other tenants, THEN in either of
such instances, Lessee shall have the right to terminate the Lease upon 60 days
notice, ---- such notice to be given within 30 days after the taking or
transfer. Notwithstanding anything to the contrary set forth in Section 16 of
the Lease, Lessor shall not have the right to terminate the Lease if not more
than 10% of the floor space of the Premises is taken or transferred. Provided
the Lease is not terminated following any taking of the Premises or transfer in
lieu thereof, Lessor shall promptly repair and restore the Premises and the Base
Rent and Additional Rent shall abate during such repair in proportion to the
amount of the Premises rendered unusable. Following any such repair and
restoration, Base Rent and Additional Rent shall be permanently reduced in
proportion to the amount of Premises so taken or transferred.
10. Quiet Enjoyment: The words "any mortgage, or other instruments now or
hereafter created by the Lessor" set forth at the end of Section 20 are hereby
deleted and replaced with the following words: "any first mortgage created by
Lessor existing as of July 24, 1998 and any first mortgage created by Lessor
subsequent to July 24, 1998, provided that, with respect to any first mortgage
created by Lessor subsequent to July 24, 1998, this Lease shall be subject to
such mortgage only if the holder of such mortgage shall have delivered to Lessee
within 30 days following the execution of such mortgage a recordable
non-disturbance agreement (a) containing a covenant binding upon such mortgagee
to the effect that so long as there shall be no default on the part of Lessee
entitling Lessor to terminate this Lease, or if such default shall exist, so
long as Lessee's time to cure such default shall not have expired, (i) this
Lease shall not be terminated or modified in any respect whatsoever nor shall
the rights of Lessee hereunder or its occupancy of the Leased Premises be
affected in any way by reason of such mortgage or any foreclosure action or
other proceeding that may be instituted in connection therewith, and (ii) Lessee
shall not be named as a defendant in any such foreclosure action or other
proceeding, and (b) to the extent such recordable non-disturbance agreement
contains other covenants and agreements, such other covenants and agreements
shall be reasonably satisfactory to both Lessee and such mortgagee".
11. Environmental Matters: Notwithstanding anything to the contrary in
Section 9 of the Lease, Lessee shall have no responsibility or liability for any
"hazardous substances" at or on the Premises or the property of which the
Premises form a part (i) which already existed at or on the Premises or the
property of which the Premises form a part when Lessee's predecessor in interest
first took possession of the Premises under the Lease, unless such hazardous
substances were brought onto the Premises or the property by Lessee or Lessee's
predecessors in interest under this Lease, or (ii) which was subsequently
brought on to the Premises or the property of which the Premises form a part by
any person or persons other than Lessee, Lessee's predecessors in interest under
the Lease, and their respective officers, directors, employees, agents, guests
and invitees.
12. Additional Rent, Operating Expenses and Real Estate Taxes:
Notwithstanding anything to the contrary set forth in Sections 5 and 6 of the
Lease, Lessor acknowledges and agrees (i) that Lessee and the other tenants of
the building of which the Premises form a part each directly pay for utilities
(electric, water, gas, sanitary sewer, telephone, etc.) used solely at their
respective premises, (ii) that Lessee shall have no obligation whatsoever for
any utilities used solely by any other tenant of the building at its premises
and that neither Operating Expenses nor Real Estate Taxes shall include any such
utility charges. Lessee hereby agrees to pay for all utilities used solely by
Lessee at the Premises.
13. Insurance: Notwithstanding anything to the contrary in Section 14, Both
Lessor and Lessee acknowledge and agree that Lessee's obligation to maintain
property insurance shall apply only to Lessee's furniture, fixtures and
equipment at the Premises and that Lessor maintains property insurance on the
entire building of which the Premises form a part.
14. Memorandum of Lease; Subordination, Non-Disturbance and Attornment
Agreement: The parties hereto agree to execute a memorandum of the Lease, as
amended hereby, in form and content suitable for recording in the county
records. Lessor further agrees to use its best efforts at Lessee's expense to
cause any existing lender holding a lien on the property of which the Premises
form a part to enter into a subordination, non-disturbance and attornment
agreement with Lessee, the terms of which are mutually agreeable to such
parties, such agreement to be suitable for recording in the county records.
15. Security Deposit: Lessor and Lessee both acknowledge that Lessor does
not hold any security deposit. Section 7 of the Lease is hereby deleted and all
references to a security deposit which may be set forth in any other provision
of the Lease shall be of no further force or effect.
16. Inspection: The first reference to "Lessor" in the first line of
Section 24 is hereby changed to "Lessee".
17. Notices: The text of Section 22 of the Lease is hereby deleted and
replaced with the following:
"All notices and other communication between the parties hereto shall be in
writing and shall be sent by certified or registered mail, return receipt
requested, by personal delivery against receipt or by overnight courier, shall
be deemed to have been validly served, given or delivered immediately when
delivered against receipt or one business day after deposit in the mail, postage
prepaid, or with an overnight courier, and shall be addressed as follows:
If to Lessor:
Faith A. Griefen
1010 Waltham Street, F-16
Lexington, MA 02173
If to Lessee:
ValueRx Pharmacy Program, Inc.
4700 Nathan Lane North
Plymouth, MN 55442-2599
Attention: Mr. Thomas Rocheford Vice President,
Facilities & Purchasing
With a copy to:
Express Scripts, Inc.
1400 Riverport Drive
Maryland Heights, MO 63043
Attention: Mr. Thomas M. Boudreau Senior Vice President
or to such other address as each party may designate for itself by notice given
in accordance with this Section."
18. Confirmation of Lease: Except as amended of modified herein, the terms,
conditions and delegations under the Lease not inconsistent with the terms
hereof are hereby ratified and confirmed, and the Lease as amended shall
continue in full force and effect during the extension term (and any renewal
term).
In Witness Whereof, the parties hereto have executed this agreement,
intending to be legally bound as of the day and year first written above.
Lessor: /s/ Faith A. Griefen
Faith A. Griefen, Lessor
Witness:
/s/ Carolyn Shaw Bell
Lessee: ValueRx Pharmacy Program, Inc., Lessee
By: /s/ George Paz
Print Name:George Paz
Its:Senior Vice President and Chief
Financial Officer
Attested:
/s/ Thomas A. Rocheford
Print Name: Thomas A. Rocheford
Its: Vice President
Witness:
Marta Alred
<PAGE>
EXHIBIT A
This exhibit contains a pictorial layout of Leased Space
<PAGE>
EXHIBIT B
LEASE AGREEMENT
This Lease Agreement, made as of this 12th day of June, 1989, between
MICHAEL D. BROCKELMAN and JAMES S. GRATTON as Trustees under agreement dated
April 17, 1980, c/o R.V.M. & G, Inc., #1 Alewife Center, Cambridge,
Massachusetts 02140 (hereinafter referred to as "Lessor"), and HEALTH CARE
SERVICES, INC. 3684 Meadow Lane, Bensalem, Pennsylvania 19020, (hereinafter
referred to as "Lessee").
W I T N E S S E T H:
For and in consideration of the rental herein reserved, and of the
covenants, conditions, agreements, and stipulations of the Lessee hereinafter
expressed, the parties agree as follows:
1. PREMISES.
The Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor,
the following described premises:
(a) ALL THAT CERTAIN space identified on Exhibit "A" attached hereto and
made a part hereof, consisting of approximately 37,420 square feet of that
approximately 64,500 square foot building located at 3684 Meadow Lane, Bensalem,
Pennsylvania 19020 (the "Premises").
(b) Together with the right to use in common with Lessor, its employees,
invitees and customers, and Lessor's other tenants and their employees invitees,
and customers, the parking areas provided by the lessor, its successors, or
assigns, in the designated areas for the parking of automobiles, which are
contiguous to the building in which the leased premises are located, and, also
identified on Exhibit "A"; provided that the Lessor retains the right to make
reasonable rules and regulations with reference to the use of said parking area,
including the right to provide for certain reserved parking as, from time to
time, determined by the Lessor, and particularly provided that employees,
agents, and principals of Lessee shall park in designated areas so as to assure
Lessor's other tenants and Lessor's customers and visitors convenient and
proximate parking contiguous to the building or buildings in which its tenants
are located.
(c) Lessee acknowledges that: (1) except for the work to be performed on
the attached Exhibit "B", (if any), Lessee has inspected the leased premises and
hereby accepts same in "as is" condition, and (2)Lessor has made no warranties
and/or representations regarding the condition of the leased premises.
2. TERM.
(a) The initial term of this Lease (the "Initial Term") shall commence on
July 1, 1989 and shall expire on midnight, June 30, 1999, (the "Expiration
Date"). If Lessee shall elect to extend the Initial Term for the Renewal Period
pursuant to Paragraph 3 below, the term of this Lease (the "Term") shall mean
the Initial Term together with the Renewal Period and the Expiration Date shall
be June 30, 2004.
(b) If, for any reason whatsoever, Lessor fails to deliver the Leased
Premises to Lessee by August 15, 1989, Lessee shall have the right to terminate
this Lease. If Lessor's failure to deliver the Leased Premises by August 1, 1989
is for any reason within Lessor's reasonable control, Lessor shall be liable to
Lessee for Lessee's actual rent caused thereby including any rent Lessee incurs
by reason of Lessee holding over under its Lease for the space which Lessee now
occupies.
3. OPTIONS TO EXTEND.
The Term of this Lease may be extended by Lessee, at Lessee's sole option
(the "Renewal Option"), for one period of five (5) years (the "Renewal Period"),
from and after the expiration of the Initial Term,, by giving Lessor prior
written notice of the exercise of the Renewal option not less than nine (9)
months before the expiration of the Initial Term.
4. BASE RENT.
(a) FIRST FIVE LEASE YEARS. Lessee agrees to pay to Lessor as base rent
("Base Rent"), commencing on the Rent Commencement Date and continuing through
the first five Lease Years, Four Dollars and Twenty-Five Cents ($4.25) per
square foot of floor area in the Leased Premises per year.
(b) SECOND FIVE LEASE YEARS. Lessee agrees to pay to Lessor as Base Rent,
commencing on the first day of the sixth Lease Year and continuing through the
remainder of the Initial Term, Five Dollars and Thirty-Five ($5.35) per square
foot of floor area in the Leased Premises per year. 2
(c) BASE RENT DURING RENEWAL PERIOD. In the event Lessee exercises the
Renewal option, the Base Rent for the Renewal Period shall be as follows: The
minimum annual rental during each year of the Renewal Period shall be an amount
equal to the greater of (a)the Base Rent in effect during the year preceding the
commencement of the Renewal Period, or (b)the sum of the Base Rent in effect
during the last year of the Initial Term hereof multiplied by a fraction (the
"fraction")the numerator of which shall be the Index (as hereinafter defined)
for the month preceding the commencement of the Renewal Period, and the
denominator of which shall be the Index for the month preceding the commencement
date of the Initial Term of this Lease. The "Index" shall mean: (1) the Consumer
Price Index for All Urban Consumers (CPI-U)- U.S. Average, All Items (1967-100),
published by the Bureau of Labor Statistics of the U.S. Department of Labor, or
(c)if the index does not exist at that time the fair market value at the time,
whichever is higher.
(d) PAYMENT OF BASE Rent. Base Rent shall be paid in monthly installments
equal to one-twelfth (1/12th) of the annual Base Rent payable during the
applicable Lease Year, in advance, on the first day of each calendar month,
commencing on the date on which Lessor delivers the Premises to Lessee ("Rent
Commencement Date"). If the Rent Commencement Date does not occur on the first
day of the month, the Base Rent for the partial month shall be pro-rated and
shall be paid by Lessee when the Rent Commencement Date occurs.
5. ADDITIONAL RENT: OPERATING EXPENSES; REAL ESTATE TAXES.
Lessee shall pay, as Additional Rent, Lessee's Share (as hereinafter
defined) of the Operating Expenses (as hereinafter defined) and Real Estate
Taxes (as herein defined). Additional Rent shall be paid together with Base
Rent, in advance, in monthly installments equal to one-twelfth (1/12th) of the
annual Additional Rent payable during the applicable Lease Year as reasonably
estimated by Lessor.
(a) OPERATING EXPENSES DEFINED. The term "Operating Expenses" shall mean
those reasonable expenses paid by the Lessor in respect to the Building for
those repairs set forth herein, charges for electricity, water, gas, sanitary
sewer and other public utilities, snow removal, landscaping expenses, Building
Common Area utilities, premiums for casualty insurance on the Building, and the
cost, as reasonably amortized by the Lessor, of any capital improvement made
after the first Lease Year which reduces other Operating Expenses, but in an
amount not to exceed such reduction for the relevant year. Operating Expenses
shall not include: (i) the cost and expense to Lessor for Major Repairs as
defined herein), (ii) the cost to the Lessor of any work or service performed in
any instance for any tenant (including the Lessee)at the cost of such tenant,
(iii) the amortization of any capital improvement without Lessee's consent, (iv)
Lessor's depreciation of the Building, debt service, capital expenditures other
than included above, taxes on income, franchise taxes, payments to affiliates of
Lessor not expressly approved by Lessee, management salaries or fees, tenant
allowances and other expenditures in connection with the preparation of space
for use by a tenant or a prospective tenant and casualty loss or damage and
repairs and other expenses related thereto.
(b) REAL ESTATE TAXES. "Real Estate Taxes" shall be defined as including
the following items: (i) real estate taxes; (ii) assessments levied, assessed,
or imposed against such land and/or buildings or the rents or profits therefrom
to the extent that the same shall be in lieu of all or any portion of any items
hereinabove set forth, and (iii) all water and sewer rents, charges, taxes, and
frontage assessed or imposed. If due to a change in the method of taxation, any
franchise, income, profit, or other tax, however designated, shall be levied
against Lessor's interest in the property in whole or in part for or in lieu of
any tax which would otherwise constitute Real Estate Taxes, such taxes shall be
included in the term "Real Estate Taxes" for purposes hereof. All such payments
shall be approximately prorated for any partial calendar years in which the term
of this Lease shall commence or expire. A copy of the tax bill shall be
sufficient evidence of the amount of Real Estate Taxes.
Only Lessor shall be eligible to institute tax reduction or other
proceedings to reduce the assessed valuation of the land and buildings. Should
Lessor be successful in any such reduction proceedings and obtain a rebate for
periods during which Lessee has paid its share of increases, and provided that
Lessee is not in default in payment of rent or additional rent due under this
Lease, Lessor shall, after deducting its expenses, including, without
limitation, attorneys' fees and disbursements in connection therewith, promptly
return Lessee's pro rata share of such rebate after Lessor has received such
proceeds. Lessee may not obtain any portion of the benefits which may accrue to
Lessor from any reduction in Real Estate Taxes for any year below those imposed
in the Basic Tax Year.
Along with notification of any increases in Real Estate Taxes for which the
Lessor requests payment from Lessee, Lessor shall also furnish (i) a copy of the
current tax bill,
(ii) a copy of the tax bill for the base year, (iii) a statement showing
calculation of Lessee's proportionate share of the increase in Real Estate Taxes
for which payment is requested in sufficient detail to enable Lessee to verify
the accuracy of the amount it is being requested to pay.
(c) TENANT'S SHARE DEFINED. "Tenant's Share" shall mean the product derived
by multiplying the sum of operating Expenses and Real Estate Taxes for the
applicable Lease Year by a fraction, the numerator of which shall be 37,240 (the
total square footage of floor area of the Leased Premises) and the denominator
of which shall be 64,500 (the total square footage of the floor area of the
Building); provided, however, that if any other tenant of the Building is a
disproportionate user of any utilities not separately metered, or if any other
tenant of the Building uses its premises in a manner which presents a casualty
insurance risk significantly greater than Tenant, Tenant's Share shall be
adjusted so as to equitably apportion the costs and expenses related thereto.
(d) ADJUSTMENT OF PAYMENT. Within sixty (60) days after the end of each
lease year, Landlord shall submit to Tenant an accurate statement certified by
Landlord showing the actual Additional Rent for the year payable by Tenant. In
the event that such statement or any audit by Lessee reveals that the amount of
additional Rent due from Lessee is less than the amount actually paid by Lessee,
then such excess shall be credited to the installment(s) of monthly rental
payment next due, or if for the last year of the lease term be paid by Lessor to
Lessee upon termination of the Lease Agreement and vacation of the leased
premises.
7. SECURITY DEPOSIT.
The Lessee shall deposit with the Lessor on or before the _____day of
_______, 19 , the a sum equivalent to two (2) months rent in cash as security
for the payment of the rent provided herein and for the observance and
performance by the Lessee of all of the terms, provisions, and conditions of
this Lease on its part to be kept and performed; and further to indemnify the
Lessor for any loss, costs, fees, and expenses which the Lessor may incur by
reason of any default by the Lessee. The Lessor shall repay an amount equal to
one month's rent upon the expiration of one year from the date of the
commencement of rental payments provided, all such payments were made on a
timely basis and Lessee is not otherwise in default of any of the terms or
conditions of this Lease Agreement, and, the Lessor shall repay to the Lessee
the security deposit or any balance thereof upon the termination or expiration
of the term of this Lease or any extension thereof. In the event of any failure
in the payment of rent or other sum, or of any default by the Lessee in the
performance of the terms, provisions and conditions of this Lease, the Lessor
shall have the right to apply the security deposit against any loss, costs,
fees, and expenses caused thereby. The security deposit shall bear no interest.
8. USE OF PREMISES.
The Lessee shall use said premises for general office purposes, for
manufacturing, packaging, warehousing and distributing pharmaceutical and other
related products, and for retail sales of pharmaceutical and other related
products, and/or for any other lawful purpose.
Lessee shall comply with all present and future laws or ordinances
applicable to the leased premises and shall not commit or suffer waste on the
premises, or use or permit anything on the premises which may be illegal, or
constitute a private or public nuisance or conflict with or invalidate or
increase the cost of any of Lessor's fire and extended coverage insurance, or
which may be dangerous to persons or the property of the Lessor or other tenants
of Lessor's building, their agents, servants, employees, and customers.
Notwithstanding the foregoing, Lessee's effecting an increase in the cost of any
of Lessor's fire and extended insurance is curable by Lessee's payment of such
increase in cost.
Lessor shall deliver prior to occupancy a valid certificate of occupancy
for the building indicating the uses of the building permitted by the local
municipality, and Lessor warrants and represents that Lessor has not and will
not make any physical changes to the Property subsequent to the issuance of the
certificate of occupancy.
9. ENVIRONMENTAL MATTERS.
a) Lessee shall, at its sole cost and expense, obtain any and all necessary
governmental approvals necessary for its use of the building and property, INTER
ALIA, as a retail pharmacy.
Lessee further understands and agrees that it shall cause all activities at
the Property during the term of this Lease Agreement, or any extension hereof to
be conducted in compliance with all Environmental Statutes. Lessee shall cause
all permits, licenses, or approvals to be obtained and shall cause all
notifications to be made, as required by Environmental Statutes. Lessee shall,
at all times, cause compliance with the terms and conditions of any such
approvals or notifications.
(b) During the term of this Lease Agreement, Lessee shall provide to Lessor
copies of:
(i) applications or other materials submitted to any governmental agency in
compliance with Environmental Statutes;
(ii) any notifications submitted to any person pursuant to Environmental
Statutes;
(iii) any permit, license, approval, amendment or modification thereto
granted pursuant to Environmental Statutes;
(iv) any record or manifest required maintained pursuant to Environmental
Statutes; and
(v) any correspondence, notice of violation, summons, order, complaint or
other document received by Lessee, its sublessees or assigns, pertaining to
compliance with any Environmental Statutes.
(c) Site Contamination.
(1) Lessee shall not permit contamination of the Property by hazardous
substances during the term of this Agreement. Lessee shall, at all times during
the term of this Agreement, cause hazardous substances to be handled on the
Property in a manner which will not cause an undue risk of contamination of the
Property.
(2) For purposes of this section, the term "contamination" shall mean the
uncontained presence of hazardous substances at the Property, or arising from
the Property, which may require remediation under any applicable law.
(3) For purposes of this section, "hazardous substances" shall mean
"hazardous substances" as defined pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. section 9601-9657, AS
AMENDED BY the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No.
99-499, 100 Stat. 1613 (Oct. 17, 1986), "regulated substances" within the
meaning of subtitle I of the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6991-6991li, AS AMENDED BY the Superfund Amendments and Reauthorization
Act of 1986, Pub. L. No 99-499, 100 Stat. 1613 (Oct. 17, 1986), and "hazardous
wastes" as defined pursuant to the Pennsylvania Solid Waste Management Act, Pa.
Stat. Ann. Tit. 35, Section 6018-101 to .1003 (Purdon Supp. 1987), or any other
substances which may be the subject of liability pursuant to Sections 316 or 401
of 7. The Pennsylvania Clean Streams Law, Pa. Stat. Ann. Tit. 35, Section 691.1
to .1001 (Purdon 1977 and Supp. 1987).
(c) INDEMNIFICATION. Lessee hereby agrees to indemnify and to hold harmless
Lessor of, from and against any and all expenses, loss or liability suffered by
Lessor by reason of Lessee's breach of any, of the provisions of this Section,
including, but not limited to: (i) any and all expenses that Lessee may incur in
complying with any Environmental Statutes; (ii) any and all costs that Lessor
may incur studying or remedying any contamination of the Property; (iii) any and
all fines, penalties or other sanctions (including a voiding of any transfer of
the Property) assessed upon Lessor by reason of a failure of Lessee to have
complied with Environmental Statutes; (iv) any and all loss of value of the
Property by reason of (A) failure to comply with Environmental Statutes; (B) the
presence on Property of any hazardous substances; and (v) any and all legal and
professional fees and costs incurred by Lessor in connection with the foregoing.
This indemnification shall survive the term of this Lease Agreement and any
extension thereof.
10. REPAIR AND MAINTENANCE OBLIGATIONS.
(A) LESSOR'S REPAIRS. Lessor shall maintain and repair, at its own cost and
expense, which costs and expenses shall not be included in Operating Expenses
determined herein, the structural integrity of the building, including, but not
limited to the roof and roof cover, the foundation, the exterior walls, floors
and the water, gas, electricity and telephone service connections into the
Property (collectively, the "Major Repairs"); provided, however, that any
structural or other damage caused by the negligence Lessee, its agents,
employees or contractors shall repaired at Lessee's cost and expense.
(B) LESSEE'S REPAIRS AND MAINTENANCE OBLIGATIONS. Lessee shall repair and
maintain, at its sole cost and expense, (i) the Leased Premises, including all
internal walls, glass windows, doors, non-structural floor coverage, plumbing,
heating and air conditioning systems, all floors (except that Lessor shall
maintain and repair the structural integrity of all floors), all exterior walls
(except that Lessor shall maintain and repair the structural integrity of all
exterior walls) and (ii) those parking areas, landscaped areas and entranceways
and exits to and from the Building under control of Lessee all as shown on
Exhibit A thereto. Lessee shall surrender the Leased Premises, at the
termination of this Lease "broom clean", in good order and repair, reasonable
wear and tear excepted.
No property shall be left on the premises after the expiration or other
termination of this Lease by Lessee without the prior written consent of the
Lessor.
11. LESSEE'S WORK.
(a) Lessee accepts the Premises in "as is" condition without any obligation
for the performance of improvements or other work by Lessor. Lessee desires to
perform certain improvements thereto (the "Work"), such Work to be in accordance
with the specifications on Exhibit C hereto. Performance of the Work shall not
serve to abate or extend the Rent Commencement Date.
Lessee shall pay all costs associated with the Work whatsoever, including
without limitation, all permits, inspection fees, fees of space planners,
architects, engineers and contractors, the cost of all labor and materials,
bonds (to be obtained at Lessee's option), insurance, and any structural or
mechanical work, additional HVAC equipment or sprinkler heads, or modifications
to any building mechanical, electrical, plumbing or other systems and equipment
or relocation of any existing sprinkler heads, required as a result of the
layout, design or construction of the Work.
(b) Notwithstanding any other provision of this Lease, Lessor shall provide
and maintain, at its sole cost and expense, water, gas, electricity and
telephone service connections into the Premises, except, however if additional
utility service is required due to Lessee's Work, all costs shall be borne
solely by Lessee.
12. SIGNS.
Lessee shall have the right upon the prior written consent of Lessor, which
consent shall not be unreasonably withheld, at its sole cost and expense, to
post, paint, construct, attach and maintain signs on the exterior of the
Building identifying Lessee, provided however, that all local code compliance
shall be the sole responsibility, cost, and expense of Lessee.
13. DAMAGE TO LESSEE'S PROPERTY OR PREMISES.
(a) The Lessor and its agents shall not be liable in damages, by abatement
in rent or otherwise, for any damage either to the person or the property of the
Lessee, or for the loss of or damage to any property of the Lessee by theft or
from any other cause whatsoever, whether similar or dissimilar to the foregoing.
The Lessor or its agents shall not be liable for any injury or damage to persons
or property, or loss or interruption to business resulting from fire, explosion,
falling plaster, steam, gas, electricity, water, rain, snow, or leaks from any
part of the building, or from the pipes, appliances, or plumbing works, or from
the roof, street, or subsurface, or from any other place, or by dampness, or by
any cause of whatsoever nature; nor shall the Lessor or its agents be liable for
any damage caused by other tenants or persons in said building, or caused by
operations in construction of any private or public or quasi-public work. None
of the limitations of the liability of Lessor or its agents provided for in this
subsection (a) shall apply if such loss, injury, or damages are proximately
caused by the negligence or breach by the Lessor, its agents, employees, or
independent contractor.
(b) The Lessee shall be liable for any damage to the building or property
therein which may be caused by its act or negligence, or the acts of its agent,
employees, or customers, and the Lessor may, at its option, repair such damage,
and the said Lessee shall thereupon reimburse and compensate the Lessor as
additional rent, within five (5) days after rendition of a statement by the
Lessor, for the total cost of such repair and damage. None of the limitations of
the liability of Lessor or its agents provided for in this subsection (a) shall
apply if such loss, injury, or damages are proximately caused by the negligence
or breach by the Lessor, its agents, employees, or independent contractor.
14. INDEMNITY, LIABILITY INSURANCE, BUILDING INSURANCE, WAIVER OF
SUBROGATION.
(a) The Lessee hereby indemnifies and agrees to hold the Lessor harmless
and free from damages sustained by person or property, and against all claims of
third persons for damages arising out of the Lessee's use of the leased
premises, and for all damages and monies paid out by Lessor in settlement of any
claim or judgments, as well as for all expenses and attorneys' fees incurred in
connection therewith.
(b) Lessee shall, during the entire term of this Lease and any renewal
hereof, keep in full force and effect a policy of public liability and property
damage insurance with respect to the leased premises, and the business operated
by Lessee. (i) Lessee shall, at all times from and after the date on which
Lessor delivers the Premises to Lessee, at its sole cost and expense, maintain
public liability insurance ("Tenant's Liability Insurance") covering any and all
claims for injuries or death to persons or property arising in or upon the
Leased Premises with a single limit of not less than One Million Dollars
($1,000,000.00).
(ii) The policy for Lessee's Liability Insurance shall contain a provision
granting thirty (30) days notice of cancellation of insurance to Lessor. (iii)
Lessee, if it so elects, may carry Lessee's Liability Insurance under a primary
public liability insurance policy or under a combination public liability and
umbrella liability insurance policy.
(c) PROVISIONS OF FIRE INSURANCE POLICY. (i) The amount of Lessor's Fire
Insurance shall be not less than 90% of the Full Replacement Cost (as defined in
this subparagraph (c) of the Building, including all Alterations thereof, and
shall be an amount sufficient to prevent Lessor from becoming a co-insurer
within the terms of the applicable policies of Lessor's Fire Insurance.
The term "Full Replacement Cost" means the cost of replacing the Building.
(ii) All policies of Lessor's Fire Insurance shall provide that the
proceeds of any loss shall be payable to Lessor and to the holder (as its
interest may appear) of any mortgage(s) , if any, to which this Lease is
subordinate so long as such holder and future holders of such mortgage(s) are
obligated to apply proceeds of insurance in the manner provided for in this
Lease.
15. DAMAGE OR DESTRUCTION TO PREMISES.
(a) If the leased premises, or any portion thereof, shall be damaged during
the term by fire or any casualty insurable under the standard fire and extended
coverage insurance policies, but are not wholly untenantable, the Lessor shall
repair and/or rebuild the same as promptly as possible, provided that the
proceeds from Lessor's insurance policies are available to Lessor. The Lessor
shall not be required to repair or rebuild any fixtures, installations,
improvements, or leasehold improvements made to the interior of the leased
premises by Lessee, nor Lessee's exterior signs. Such repairs and/or
replacements are to be made by Lessee. In such event, the Lease shall not
terminate, but shall remain in full force and effect, and a proportionate
reduction in the fixed minimum monthly rental shall be made from the time of
such fire or casualty until said premises are repaired or restored, except (i)
if the Lessee can use and occupy the leased premises without substantial
inconvenience; or (ii) if said repairs are delayed at the request or by reason
of any act on the part of the Lessee which prevents or delays the repair of said
premises by Lessor, there shall be no reduction in rental while said premises
are being repaired, nor for any period of delay caused by or requested by
Lessee. Lessors obligation to repair shall be subject to any delays from labor
troubles, material shortages, insurance claim negotiations, or any other causes,
whether similar or dissimilar to the foregoing, beyond Lessor's control.
(b) If the leased premises are rendered wholly untenantable by fire or
other cause, or if the leased premises or the building in which they are located
should be damaged or destroyed by fire or other casualty, to the extent of fifty
percent (50%) or more of the monetary value of either thereof, whether the
leased premises themselves be damaged or not, or so that fifty percent (50%) or
more of the floor space contained in either thereof shall be rendered
untenantable, then, and in that event, Lessor may, at its option, terminate this
Lease or elect to repair or rebuild the same. If, as a result of any damage
either to the leased premises or to the building of which they are a part, the
Lessor determines to demolish or rebuild the premises, or the building of which
they are a part, then, and in any such event, the Lessor may also terminate this
Lease. In any of the foregoing instances, the Lessor shall notify the Lessee as
to its election within sixty (60) days after the casualty in question. If the
Lessor elects to terminate this Lease, then the same shall terminate three (3)
days after such notice is given, and the Lessee shall immediately vacate the
leased premises and surrender the same to the Lessor, provided, however, Lessee
shall be granted a reasonable time to remove its personal property, paying the
rent to the time of such vacation and surrender, subject to an equitable
abatement from the time of said damage. If the Lessor does not elect to
terminate this Lease, the Lessor shall repair and/or rebuild the leased premises
as promptly as possible, subject to any delay from causes beyond its reasonable
control, and the term shall continue in full force and effect, subject to
equitable abatement in the fixed minimum monthly rental from the time of said
damage or destruction until said premises are repaired or restored.
(c) Notwithstanding anything else in subparagraphs (a) and (b) above, if
Lessor is required or elects to repair or replace the Leased Premises following
any damage or destruction, Lessor shall within thirty (30) days of such damage
or destruction give Lessee written notice of the amount of time Lessor shall
reasonably need to repair or replace the Leased Premises. If the Leased Premises
cannot be repaired or replaced within one-hundred eighty (180) days after the
date of the damage or destruction, Lessee shall have the right to terminate the
Lease within thirty (30) days after receipt of Lessor's notice, and the Base
Rent and Additional Rent Due hereunder shall be prorated to the date of the
damage or destruction.
16. EMINENT DOMAIN.
If the premises, or any part thereof, shall be taken under eminent domain
proceedings, or transferred to a public authority in lieu of such proceedings,
Lessor may terminate this Lease as of the date when possession is taken. All
damages awarded for such taking shall belong to and be the property of Lessor.
Lessee shall have no claim against Lessor by reason of such taking or
termination and shall not have any claim or right to any portion of the amount
that may be awarded or paid to Lessor as a result of any such taking, except
that Lessee shall have the right to make a claim against such public authority
for its loss of business and for any other relief available to Lessee by law in
the event such taking involves the physical taking of all or a portion of the
leased premises, arid, in such event, Lessee shall also have the right to
terminate this Lease as of the date when possession is taken by the public
authority.
17. ESTOPPEL CERTIFICATE STATEMENT, ATTORNMENT, SUBORDINATION, AND
EXECUTION OF DOCUMENTS.
(a) Lessee agrees that at any time and from time to time at reasonable
intervals, within ten (10) business days after written request by lessor, Lessee
will execute, acknowledge, and deliver to Lessor, Lessor's mortgagee, or others
designated by lessor, a certificate in such form as may from time to time be
provided, ratifying this Lease and certifying:
(i) that this Lease is in full force and effect, and has not been assigned,
modified, supplemented, or amended in any way (or if there has been any
assignment, modification, supplement, or amendment, identifying the same) ;
(ii) that this Lease represents the entire agreement between Lessor and
Lessee as to the subject matter hereof (or if there has been any assignment,
modification, supplement, or amendment, identifying the same);
(iii) the Commencement Date and Termination Date;
(iv) that all conditions under this Lease to be performed by Lessor have
been satisfied (and if not what conditions remain unperformed);
(V) that to the knowledge of the signer of such writing, no default exists
in the enforcement of this Lease by lessor or specifying each default, defense,
or offset of which the signer may have knowledge;
(vi) that no rental has been paid in advance other than for the month in
which such certificate is signed by Lessee;
(vii) the amount of the security deposited with Lessor pursuant to Item 7
hereof; and
(viii) the date to, which all rentals due hereunder have been paid under
this Lease.
(b) Lessee shall, in the event any proceedings are brought for the
foreclosure of, or in the event of exercise of the power of sale under any
mortgage covering the leased premises, attorn to the purchaser upon any such
foreclosure or sale and recognize such purchasers as the Lessor, subject to all
of Lessee's duties obligations, rights, and options under this Lease.
(c) upon request by the Lessor, Lessee shall subordinate its rights
hereunder to the lien of any mortgage or mortgages, or the lien resulting from
any other method of financing or refinancing, now or hereafter in force against
the land and/or the buildings of which the leased premises are a part, or
against any buildings hereafter placed upon the land of which the leased
premises are a part, and to all advances made or hereafter to be made upon the
security thereof; provided, however, that a condition precedent to Lessee's
requirement to subordinate hereunder shall be that Lessee, upon any default in
the terms of such financing by Lessor, shall have the right to pay the rental
due hereunder directly to the mortgagee or other persons to whom Lessor may be
obligated under such financing and, so long as Lessee does so pay the rentals as
herein provided, this Lease and all Lessee's rights and options hereunder shall
remain in full force and effect as to such mortgagee or other financing obligee
of Lessor.
(d) The Lessee, upon request of any party in interest, shall execute,
within ten days of lessee's receipt, such instruments or certificates to carry
out the intent off these paragraphs above as shall be requested by the Lessor.
Provided, however, that nothing contained in such instruments or certificates
required by lessor shall be in derogation of any rights granted to Lessee
hereunder, nor expand Lessee's obligations hereunder, and if any such
instruments or certificates would have the effect of accomplishing one or both
of the foregoing, either explicitly or implicitly, then Lessee shall not be
obligated to execute the same.
18. DEFAULT.
(a) If the Lessee shall, at any time, be in default of the payment of
either rent or any payments required of Lessee hereunder or any part thereof,
Lessor shall provide written notice of such default and Lessee shall have three
days subsequent to the issuance of said notice to cure the monetary default
before Lessor may invoke any other remedies available under the terms of this
Lease, or if Lessee shall be in default of any of the other covenants and
conditions of this Lease to be kept, observed, and performed by Lessee for more
than thirty (30) days after the giving of written notice by the Lessor to the
Lessee of such default, provided, however, that if the nature of the specified
obligation(s) is such that more than thirty (30) days are required for
performance, then lessee shall not be in default if it commences performance
within such 30 day period and thereafter diligently prosecutes the same to
completion, or if Lessee shall vacate or abandon the premises, or fail to take
possession of the premises and actively operate its business therein, or if
Lessee shall be adjudged a bankrupt, or if a receiver or trustee shall be
appointed and shall not be discharged within thirty (30) days from the date of
such appointment, then and in any such events the Lessor may re-enter the leased
premises by summary proceedings or otherwise, and thereupon may expel all
persons and remove all property therefrom, without becoming liable to
prosecution therefor, and may, among other remedies elect:
(i) to relet said premises as the agent of the Lessee, and reserve the rent
therefrom, applying the same first to the payment of the reasonable expense of
such reentry, and then to the payment of the rent accruing hereunder; but
whether or not the leased premises are relet, the Lessee shall remain liable for
the equivalent of all rent and other charges provided for under this Lease, plus
the cost of reletting, if any, which said amount shall be due and payable to the
Lessor as damages, or rent, as the case may be, on the successive monthly rent
days hereinabove provided; or (ii) To terminate this Lease and immediately
resume possession of the leased premises, wholly discharged from any obligations
under the term of this Lease, and may re-enter and repossess said premises, free
form any and all claims on the part of the Lessee. Termination of the Lease does
not discharge or in any way affect Lessee's obligation to pay Lessor all the
rents or other charges or payments accruing under the Lease up to the date of
termination.
(b) Lessor shall not be in default unless it fails to perform the
obligations required of Lessor by this Lease Agreement within thirty (30) days
after written notice by Lessee to Lessor specifying which obligation(s) Lessor
has failed to perform. Provided, however, that if the nature of the specified
obligation(s) is such that more than thirty (30) days are required for
performance, then Lessor shall not be in default if it commences performance
within such 30-day period and thereafter diligently prosecutes the same to
completion. If Lessor has not cured or commenced to cure the default set forth
in said notice within said 30-day period, Lessee may at his option either (i)
cure such default and deduct the reasonable costs and expenses incurred from the
next and succeeding rent payment(s) or (ii) cancel this Lease and, in such
event, this Lease shall thereupon cease, terminate, and come to an end with the
same force and effect as though the original demised term had expired at that
time.
19. SUBLETTING AND ASSIGNING.
The Lessee shall not sublet any portion of the leased premises nor assign
this Lease in whole or in part without the written consent of the Lessor as to
both the terms of such assignment or sublease, and the identity of such assignee
or sublessee, which consent shall not unreasonably be withheld, and in the event
of a subletting so approved by Lessor, all rent in excess of Base Rent and all
additional rent shall be due and payable at that time to Lessor. Lessee shall
nevertheless remain obligated to Lessor under the terms of this Lease Agreement.
Notwithstanding any of the foregoing, Lessee may assign this Lease or
sublet the Premises to any subsidiary, parent corporation or affiliate of
Lessee, or any entity controlled by or controlled with Lessee, without Lessor's
consent, provided that Lessee shall remain obligated by the terms and conditions
of this Lease.
20. QUIET ENJOYMENT.
The Lessor covenants and agrees with the Lessee that upon the Lessee paying
the said rent and performing all the covenants and conditions aforesaid on the
Lessee's part to be observed and performed, the Lessee shall and may peaceably
and quietly have, hold and enjoy the premises hereby leased, for the term
aforesaid on the Lessee's part to be observed and performed, the Lessee shall
and may peaceably and quietly have, hold, and enjoy the premises hereby leased,
for the term aforesaid subject, however, to the terms of this Lease, any
mortgage, or other instruments now or hereafter created by the Lessor.
21. MEMORANDUM OF LEASE.
Lessee agrees that it will not record this Lease or otherwise make it a
matter of public record unless required in any litigation involving Lessee, or
as otherwise required by law. If the Lessee or Lessor request, the parties will
enter into a short form lease, describing the premises and the term of this
Lease, and including any other terms necessary to permit the recording of such
short form lease. Such recording, if requested by Lessee, shall be at its cost
and expense.
22. NOTICES.
All notices to be given under this Lease shall be in writing and shall
either be served personally or sent by certified mail, return receipt requested.
All notices mailed as herein provided shall be deemed received two (2) days
after mailing. Notices to Lessor shall be sent to the address set forth in the
preamble hereof or such other address as the Lessor may specify in written
notice to Lessee. Notices to Lessee shall be sent to Health Care Services, Inc.,
3684 Meadow Lane, Bensalem, Pennsylvania 19020, with COPY to Dennis Evans, Chief
Financial Officer, 3722 Eubank N.E., Albuquerque, NM 87111.
Any amount due from Lessee to Lessor under this Lease which is not paid
when due shall bear interest at the lesser of the highest legal rate allowed in
the State of Pennsylvania or five (5) points above the prime rate of interest
charged by the Provident Bank (or its successor) from the date due until paid;
provided, however, the payment of such interest shall not excuse or cure the
default upon which such interest is accrued.
23. INTEREST.
Any amount due from Lessee to Lessor under this Lease which is not paid
when due shall bear interest at the lesser of the highest legal rate allowed in
the State of Pennsylvania or five (5) points above the prime rate of interest
charged by the Provident Bank (or its successor) from the date due until paid;
provided, however, the payment of such interest shall not excuse or cure the
default upon which such interest is accrued.
24. INSPECTION.
Lessor will permit Lessor, its agents, employees, and contractors to enter
all parts of the Premises to inspect the same and to enforce or carry out any
provisions of this Lease upon 24 hours notice of such inspection to Lessee.
25. NON-WAIVER.
Lessor's or Lessee's failure to insist upon strict performance of any
covenant of this Lease or to exercise any option or right herein contained shall
not be a waiver or relinquishment for the future of such covenant, right, or
option, but the same shall remain in full force and effect.
26. CAPTIONS.
The captions and headings herein are for convenience and reference only and
should not be used in interpreting any provision of this Lease.
27. APPLICABLE LAW.
This Lease shall be governed by and construed under the laws of the State
of Pennsylvania. If any provision of this Lease, or portion thereof, or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Lease shall not be affected
thereby, and each provision of this Lease shall be valid and enforceable to the
fullest extent permitted by law. Time is of the essence in this Lease.
28. SUCCESSORS.
This Lease and the covenants and conditions herein contained shall inure to
the benefit of and be binding upon Lessor, its successors, and assigns; and
shall be binding upon Lessee, its heirs, executors, administrators, successors,
and assigns; and shall inure to the benefit of Lessee and only such assigns of
Lessee to whom the assignment by lessee has been consented to by Lessor.
29. FORCE MAJEURE.
The time within which any of the parties hereto shall be required to
perform any act or acts under this Lease, including the performance of Lessor's
and Lessee's Work, shall be extended to the extent that the performance of such
act or acts shall be delayed by acts of God, fire, windstorm, flood, explosion,
collapse of structures, riot, war, labor disputes, delays or restrictions by
governmental bodies, inability to obtain or use necessary materials, or any
cause beyond the reasonable control of such party, other than lack of monies or
inability to procure monies to fulfill its commitment or obligation under this
Lease; provided, however, that the party entitled to such extension hereunder
shall give prompt notice to the other party of the occurrence causing such
delay. The provisions of this Item 29 shall not operate to excuse Lessee from
prompt payment of rent, additional rent or any other payments required by the
terms of this Lease.
30. BROKER.
Lessor and Lessee each represents and warrants that it has dealt with no
broker or brokers in connection with this Lease other than B. Kevin Hart
Corporation whose commission will be paid by Lessor. Lessee and Lessor shall
indemnify, defend and hold each other harmless from any breaches by the
indemnifying party of the warranties and representations in the preceding
sentence.
31. AMENDMENTS IN WRITING.
This Lease and the Exhibits attached hereto and forming a part hereof set
forth all the covenants, promises, agreements, conditions, and understandings
between Lessor and Lessee concerning the Premises, and there are no covenants,
promises, agreements, conditions, or understandings, oral or written, between
them other than are herein set forth. Except as herein otherwise provided, no
subsequent alteration, amendment, change or addition to this Lease shall be
binding upon Lessor and Lessee unless reduced in writing and signed by both
parties.
32. AUTHORITY.
Lessee, if a corporation, warrants and represents to Lessor that Lessee's
execution of this Lease has been duly authorized by the Lessee's Board of
Directors.
33. COPIES.
This Lease shall be executed in multiple copies, any one of which may be
considered and used as an original.
IN WITNESS WHEREOF, the parties have hereto executed this instrument on
the day and year first above written.
Witness: Lessor: Michael D. Brockelman and
James S. Gratton, as Trustees,
under agreement dated April 17,
1980, c/o R.V.M. & G, Inc.
/s/ Ernest Miller BY: /s/ Michael D. Brockelman
Michael D. Brockelman, Trustee
/s/ Ernest Miller BY: /s/ James S. Gratton
James S. Gratton, Trustee
Lessee: Health Care Services, Inc.
BY: /s/ Steven Dessel
Steven Dessel,
Executive Vice President
Attest:
Benny Crescenzi, Title: Vice President of CC.
<PAGE>
VALUERX Value RX
A VALUE HEALTH COMPANY 3684 Marshall Lane
Bensalem, PA 19020
Tel: (215)638-7855
Fax: (215)638-8572
August 2, 1996
Mr. Darrell Carnegie
Manager, After Market Sales
Bombardier Transit Corp.
P.O. Box 250, Station A
Kingston, Ontario K7M 2R2
Dear Mr. Carnegie,
This letter serves as a preliminary, binding agreement between Bombardier
Transit Corp., located at 3684 Marshall Lane, Bensalem, PA and ValueRx, located
at 3684 Marshall Lane, Bensalem, PA for the subletting of 3,700 square feet of
Bombardier Transit Corp.'s current warehouse space to ValueRx for the remainder
of the 1996 year. This space is identified as Store Room 'B' on the building
plan provided to ValueRx by Bombardier Transit Corp. This preliminary binding
agreement will be replaced by a formal sublease agreement by September 30, 1996
at which time any further agreements regarding transfer of space can be
incorporated.
ValueRx shall take ownership of said space on August 1, 1996, and will bear
all expenses of necessary renovations, including electrical panel upgrades to
segregate Bombardier Transit Corp. and ValueRx electrical usage. The monthly
lease rate payable by ValueRx to Bombardier Transit Corp. shall be the cost of
the space currently remitted to the building owner by Bombardier Transit Corp.
detailed as follows:
Base Rate $5.72/sq ft
Operating Expenses $0.36/sq ft
Real Estate Taxes $1.03/sq ft
Total $7.11/sq ft/12 months
Monthly Rate $0.59/sq ft per month
Square footage 3,700
Monthly Rate $2,183.00
The monthly payment shall be remitted to Bombardier Transit Corp. by the
last business day of each month of occupancy, payments to begin September 30,
1996.
All alterations to the building shall be agreed with the building owner
prior to effecting any change to the building.
Bombardier Transit Corp. shall not be liable and ValueRx hereby waives all
claims against Bombardier Transit Corp. for any damage to any property or any
injury to any person in or about the 3,700 square feet identified as Store Room
'B' or any other of Bombardier Transit Corp. leased space at 3684 Marshall Lane
by or from any cause whatsoever. ValueRx shall hold Bombardier Transit Corp.
harmless from and defend Bombardier Transit Corp. against any and all claims,
liability or costs for any damage to any property and injury to any person
occurring in, or about the 3,700 square feet identified as Store Room 'B' or any
other of Bombardier Transit Corp. leased space at 3684 Marshall Lane.
ValueRx agrees to extend insurance coverage detailed in the current lease
between ValueRx and the building owner for the 3,700 square feet identified as
Store Room 'B' from August 1, 1996 to December 31, 1996.
Signed,
/s/ Joseph C. Sanginiti
Joseph C. Sanginiti
ValueRx Inc.
/s/ Darryl Carnegie
Darryl Carnegie
Bombardier Inc.
EXHIBIT 10.2
OFFICE LEASE
This OFFICE LEASE ("Lease") is made and entered into as of this 14th day of
August, 1998 by and between DUKE REALTY LIMITED PARTNERSHIP, an Indiana limited
partnership, by and through its general partner, DUKE REALTY INVESTMENTS, INC.,
an Indiana corporation, authorized to do and doing business in the State of
Missouri, as Landlord (hereinafter "Landlord") and EXPRESS SCRIPTS, INC., a
Delaware corporation, authorized to do and doing business in the State of
Missouri, as Tenant (hereinafter "Tenant").
SECTION I. BASIC LEASE PROVISIONS, NOTICES, LEASED PREMISES, USE, TERM,
CONSTRUCTION AND SIGNAGE
SS.1.01 BASIC LEASE PROVISIONS
Land: Lot 1B of Lot 1 of Duke/Riverport Site No. 1
(See, EXHIBIT 1.01 for exact legal description)
Building 13930 Riverport Drive
Maryland Heights, St. Louis County, Missouri 63043
Leased Premises: All of the space in the Building to be constructed
on the Land, which Building shall contain
approximately 141,774 RSF, the Lot 1B Restricted Use
Area and the use in common with other owners and
tenants of the Common Property, as hereinafter more
specifically set forth.
The Land, the Building and the Leased Premises are sometimes hereinafter
referred to collectively as the "Project."
Commencement Date: May 20, 1999, or such earlier or later date as
herein otherwise specifically provided
Termination Date: October 31, 2008
Annual Base Rent: From the Commencement Date Through the
Last Day of the 5th Lease Year
Thereafter $1,716,883.20 **
From the First Day of the 6th Lease Year
Through the Termination Date $1,794,858.70 **
** Upon Substantial Completion, Base Rent shall be
recalculated in accordance with SECTION 2.01, to
reflect actual RSF
Monthly Base Rent
Installments: From the Commencement Date Through the
Last Day of the 5th Lease Year
Thereafter $143,073.60 **
From the First Day of the 6th Lease Year
Through the Termination Date $149,571.56 **
** Upon Substantial Completion, Base Rent shall be
recalculated in accordance with SECTION 2.01, to
reflect actual RSF
Forwarded to: Duke Realty Limited Partnership
P.O. Box 958092
St. Louis, Missouri 63195-0001
Notice Addresses:
Landlord: Duke Realty Limited Partnership
635 Maryville Centre Drive - Suite 200
St. Louis, Missouri 63141-5819
Attn: W. Gregory Thurman, Vice President &
General Manager, St. Louis Office Group
Telephone: 314-434-3700
Facsimile: 314-434-7532
With copy to: Duke Realty Limited Partnership
635 Maryville Centre Drive - Suite 200
St. Louis, Missouri 63141-5819
Attn: James D. Eckhoff, Vice President and
Corporate Attorney
Telephone: 314-434-3700
Facsimile: 314-434-9684
Tenant: Express Scripts, Inc.
14000 Riverport Drive
Maryland Heights, Missouri 63043
Attn: Thomas M. Boudreau, Senior Vice
President and General Counsel
Telephone: 314-770-1666
Facsimile: 314-770-1581
With copy to: Express Scripts, Inc.
4700 Nathan Lane
Plymouth, Minnesota 55442-2599
Attn:Thomas A. Rocheford, Vice President Facilities/
Purchasing
Telephone: 612-509-2761
Facsimile: 612-509-2778
If at the Commencement Date any of the provisions of this SECTION 1.01 do
not accurately set forth the then agreements of the parties in the above
regards, Landlord and Tenant shall execute a writing setting forth any necessary
changes, if any, and such other matters, if any, then mutually acceptable to
Landlord and Tenant.
SS.1.02 NOTICES
Any notice, demand, request, consent, approval or other communication which
either party hereto is required or desires to give or make to the other shall be
in writing and shall be deemed validly given (a) when personally delivered, (b)
when sent by facsimile (with evidence of transmission and confirmation) (c) when
deposited for "overnight" delivery [for example, Federal Express "Standard
Overnight" (delivery by next business afternoon), United States Postal Service
"Express Mail" or other comparable service] or (d) three (3) business days after
deposit, prepaid in the United States mail, registered or certified, addressed
to Landlord or Tenant, as the case may be, in each and every case, as in SECTION
1.01 above provided. Either party hereto may designate a different or additional
address(es) or different facsimile instructions by notice similarly given.
SS.1.02-1 NOTICES TO LENDER
Landlord covenants, represents and warrants that as of the date hereof and
as of the Commencement Date, there is and shall be no mortgage, deed of trust,
or trust deed lien upon the Project. From and after the Commencement Date,
Tenant agrees to furnish to any lender holding a mortgage, deed of trust, or
trust deed (hereinafter "mortgage" or "deed of trust") lien upon the Project
from time-to-time designated by Landlord in writing (and Landlord shall
designate in writing each and every such lender to whom an interest in this
Lease may be from time-to-time assigned), a copy of all notices sent to Landlord
by Tenant of Landlord's default(s) hereunder and hereby grants said lender(s)
the right, but not the obligation, to cure said default(s) within the same time
period herein specifically provided for Landlord to cure said default(s).
SS.1.03 LEASED PREMISES
Landlord hereby demises and leases to Tenant all of the space in that
certain Building to be constructed by or on behalf of Landlord on the Land
[which said Building, as presently conceptually designed will be a three (3)
story office building consisting of approximately 141,774 rentable square feet
("RSF") (approximately 147,394 gross square feet), together with the exclusive
use of the landscape, parking and access areas immediately surrounding the
Building, which said areas Landlord shall cause the "Trustees of Duke/Riverport
Site No. 1" to cause to be designated as a "Restricted Use Area" (sometimes
herein "RUA"), as such terms are more specifically defined in the Sub-Indenture
described below [and which said specific RUA shall be herein sometimes referred
to as the "Lot 1B Restricted Use Area" or the "Lot 1B RUA" (and shall NOT
include other Restricted Use Areas)], and together with the use of the
landscape, parking and access areas located, or to be located, on the "Common
Property" as described in the Sub-Indenture (and Landlord shall cause the
"Trustees of Duke/Riverport Site No. 1" to cause all of the areas identified in
the Sub-Indenture as Common Property to be designated as such), all as more
specifically provided in that certain "Declaration of Covenants Restrictions and
Easements for Access and Parking for Property in the City of Maryland Heights,
County of St. Louis, State of Missouri Known as Duke/Riverport Site No. 1
(hereinafter "Sub-Indenture"). The areas of the Lot 1B RUA (and the areas of the
Lots 1A and 1C Restricted Use Areas) and the Duke/Riverport Site No. 1 Common
Property are shown on EXHIBIT 1.03-A hereto. Tenant shall have the exclusive
right to the use and enjoyment of the 329 parking spaces to be constructed
within the Lot 1B RUA and in addition thereto shall have the right to the use an
additional 484 of the 1696 parking spaces, some of which are presently existing
and some of which are to be constructed on the Common Property, for a total of
not less than 813 parking spaces. Within ninety (90) days of the date of this
Lease, Landlord shall cause the Sub-Indenture (in the form attached hereto as
EXHIBIT 1.03-B, unless changes thereto are mandated by the City of Maryland
Heights, Missouri, in which case all such changes shall be subject to Tenant's
approval, which said approval shall not be unreasonably withheld, conditioned or
delayed) to be recorded in the Office of the Recorder of Deeds of St. Louis
County, Missouri and shall provide to Tenant a copy of said Sub-Indenture
bearing recording information. Immediately following the recordation of the
Sub-Indenture, Landlord shall cause the Trustees of Duke/Riverport Site No. 1 to
execute a Resolution (in form and substance substantially similar to EXHIBIT
1.03-C attached hereto and made a part hereof) whereby the said Trustees
designate and assign the 484 parking spaces within the Common Property
identified in the Resolution for the benefit of Landlord and Tenant. Tenant
shall also have the right to use and enjoy all other accretions, easements,
rights-of-way and appurtenances belonging or in any way appertaining to the
Project and, to the extent Tenant's use does not materially interfere with
Landlord's obligations to perform its obligations hereunder, use of the
Building's mechanical and equipment rooms and the like. Landlord hereby grants
and conveys to Tenant (for Tenant's and Tenant's officers, employees,
representatives, guests and invitees use) a non-exclusive easement for ingress
and egress over and through the Common Property for access to all public or
common roadways within "Riverport," and Tenant shall also have the non-exclusive
right to use in common with other tenants and owners the Riverport "Common
Ground," as defined and described in that certain First Revised And Restated
Trust Indenture For The Property Known As Riverport In The City Of Maryland
Heights, County Of St. Louis, State Of Missouri, dated August 10, 1987 and
recorded at Book 8191 Page 380 of the St. Louis County, Missouri records; which
was amended by an Amendment to the First Revised and Restated Trust Indenture
dated November 4, 1988, and recorded in Book 8465 Page 1068 of the St. Louis
County, Missouri, Records; which was further amended by a certain Second
Amendment to the First Revised and Restated Trust Indenture dated June 12, 1991,
and recorded in Book 9013 Page 1955 of the St. Louis County, Missouri, Records;
which was further amended by another Second Amendment to the First Revised and
Restated Trust Indenture dated July 21, 1994, and recorded in Book 10263 Page
1872 of the St. Louis County, Missouri, Records; which was further amended by
that certain Third Amendment of the First Revised and Restated Trust Indenture
dated December 18, 1995, and recorded in Book 10694 Page 1868 of the St. Louis
County, Missouri, Records; which was further amended by that certain Fourth
Amendment To The First Revised And Restated Trust Indenture For The Property
Known As Riverport In The City Of Maryland Heights, County Of St. Louis, State
Of Missouri dated March 5, 1997, and recorded in Book 11104 Page 991 of the St.
Louis County, Missouri, Records; which was further amended by that certain Fifth
Amendment To The First Revised And Restated Trust Indenture For The Property
Known as Riverport In The City Of Maryland Heights, County Of St. Louis, State
Of Missouri, and recorded in Book 11304 Page 1396 of the St. Louis County,
Missouri Records, which said Indenture, as amended as aforesaid, shall
hereinafter be referred to merely as the "Riverport Indenture." All of the
foregoing are collectively referred to herein as the "Leased Premises".
The Trustees appointed pursuant to the terms of the Riverport Indenture
shall hereinafter be referred to merely as the "Riverport Trustees." The
Trustees appointed pursuant to the terms of the Sub-Indenture (Trustees of
Duke/Riverport Site No. 1) shall sometimes hereinafter be referred to merely as
the "Sub-Trustees." Upon written request from Tenant, Landlord shall use all
reasonable efforts to cause the Riverport Trustees and the Sub-Trustees to
enforce the Riverport Indenture and the Sub-Indenture, respectively.
Notwithstanding the foregoing, if any appointees of Landlord serve as a
Riverport Trustee or a Trustee of Duke/Riverport Site No. 1, upon written
request from Tenant, Landlord shall cause such appointees to exercise their
rights and duties under the Riverport Indenture and the Sub-Indenture to cause
enforcement of the Riverport Indenture and the Sub-Indenture. Landlord shall
promptly notify Tenant in writing of any proposed amendment to the Indenture
and/or Sub-Indenture, and shall promptly furnish a copy of such proposed
amendment to Tenant. Notwithstanding the foregoing, Landlord shall not consent
or agree to any amendment of the Sub-Indenture or any action thereunder which
would affect in a material, adverse manner Tenant's rights with respect to the
Lot 1B RUA or the Common Property, as in this Lease specifically provided,
without the prior written consent of Tenant, which consent shall not be
unreasonably withheld, conditioned or delayed. Notwithstanding anything to the
contrary herein, as between Landlord and Tenant, and in the event of any
inconsistency or conflict between the terms and provisions of the Riverport
Indenture and/or the Sub-Indenture and the terms and provisions of this Lease,
the terms and provisions of this Lease shall prevail. Landlord hereby designates
Tenant as its representative for purposes of consenting to (i) any Special
Assessments pursuant to Section 3.4 of the Sub-Indenture, (ii) any Special
Assessments "for the initial construction of Common Property improvements,
except for those improvements reasonably necessary for the preservation and
protection of the then existing Common Property" (which latter Special
Assessments require the unanimous consent of the Owners) as in Section 3.4 of
the Sub-Indenture provided, and (iii) any change proposed by the Trustees of
Riverport Site No. 1 in the Lot 1B RUA as authorized by Section 4.1 of the
Sub-Indenture (provided, however, in each of the foregoing cases such consent
shall not be unreasonably withheld, conditioned or delayed). Said designations
shall be evidenced by specific reference in the Memorandum of Lease to be
recorded as in SECTION 3.17 hereof provided.
SS.1.03-1 BOMA STANDARD
For purposes of this Lease, the Building Owners and Managers Association
International ("BOMA") Standard Method of Measuring Floor Area In Office
Buildings (American National Standard ANSI-65.1-1996 approved June 7, 1996 by
American National Standards Institute, Inc.) ("BOMA Standard"), has been and
shall be utilized. Terms defined in the BOMA Standard shall have the meaning
therein set forth.
SS.1.04 USE
Subject to the provisions of this Lease, the Project may be used and
occupied by Tenant for office use and any other lawful use permitted under the
Riverport Indenture and /or the Sub-Indenture (hereinafter sometimes the
"Permitted Uses").
Except as herein otherwise specifically provided, both Landlord and Tenant
shall, at their own expense, comply with all laws, rules, regulations,
requirements, and ordinances enacted or imposed by any governmental unit having
jurisdiction over the Landlord or the Tenant and their businesses, respectively.
Without limiting the generality of the foregoing provisions of this SECTION
1.04:
(a) During the Lease Term (hereinafter defined), including renewals or
extensions thereof, both Landlord and Tenant agree to comply [and shall cause
their respective contractors, agents, officers, employees, representatives,
guests and invitees (for this SUBSECTION (A), collectively "Representatives") to
comply] with all federal, state and local statutes, regulations, executive
orders and ordinances concerned with the emissions, spill, release, discharge or
disposal of any hazardous or solid waste into the air, soil, surface or
groundwater, or any sewer or waste treatment, storage or disposal system
servicing the Project (collectively "Environmental Laws") respectively
applicable to each. Notwithstanding the foregoing or anything in this Lease to
the contrary, it is understood and agreed that (i) neither Tenant nor its
Representatives shall have any responsibility for any Hazardous Substance (as
hereinafter defined) at, on, under or adjacent to the Project on the
Commencement Date or any violation of Environmental Law with respect to the
Project which exists on the Commencement Date, and (ii) Landlord shall remediate
and remove any Hazardous Substance existing at, on or under the Project on the
Commencement Date and shall cause the Project to be in compliance with
Environmental Laws on the Commencement Date.
(b) Landlord represents and warrants to Tenant that (i) it has not received
any notice of alleged violation with respect to the Project of any Environmental
Laws; and (ii) to the best of Landlord's knowledge, information and belief there
are no violations of any Environmental Laws with respect to the Project.
Landlord and Tenant shall promptly notify the other of any discussions between
it or its agents, employees or attorneys and any federal, state or local
officials concerning any alleged violations at or about the Project of any
Environmental Laws. Landlord represents, warrants, covenants and agrees that the
Building Shell (as hereinafter defined) shall be completed Hazardous Substance
free and in compliance, at Substantial Completion (as hereinafter defined), with
all applicable codes, ordinances, laws and regulations, the Riverport Indenture
and the Sub-Indenture and all conditions, restrictions and other matters of
record.
(c) In the event either Landlord or Tenant fails to comply with any
Environmental Laws applicable to it, or with any order or judgment issued
against it for failure to comply with such Environmental Laws, during the Lease
Term, the other, or its agents, is specifically granted the right, but not the
obligation, to enter any portion of the Project [except in the case of extreme
emergencies, giving reasonable advance written notice of said proposed entry and
the reason(s) therefor to the other] and to take such actions as deemed
reasonably necessary to comply with any statute, regulation, executive order,
ordinance, order or judgment to protect the Project; provided, however, neither
Landlord nor Tenant shall have the right to take any actions specified in this
SECTION 1.04(C) while the alleged violator is involved in good faith
negotiations with any federal, state or local officials concerning any such
environmental obligation it may have, except for actions that may be reasonably
necessary to avoid material risk of personal injury or property damage.
(d) Nothing in this SECTION 1.04 shall be construed to prevent Landlord or
Tenant from storing on or about, and transporting from the Project any Hazardous
Substance utilized by either in the conduct of its normal business activity. As
used in this Section, "Hazardous Substance" shall be defined as any "hazardous
chemical," "hazardous substance," or a similar term as defined in the
Comprehensive Environmental Response, Compensation and Liability Act, as
amended, 42 U.S.C. Section 9601, ET. SEQ.; the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. Section 6901, ET. SEQ.; the Federal Water
Pollution Control Act, as amended, 33 U.S.C. Section 1251, ET. SEQ.; the Federal
Air Pollution Prevention and Control Act (the "Clean Air Act"), as amended, 42
U.S.C. Section 7401, ET. SEQ.; the Safe Drinking Water Act, 42 U.S.C. Section
300f, ET. SEQ.; the Federal Insecticide, Fungicide, and Rodenticide Act, 7
U.S.C. Section 136, ET. SEQ.; the Oil Pollution Act, 33 U.S.C. Section 2701
(1990), all as amended or supplemented from time-to-time and any rules or
regulations promulgated thereunder; or any other applicable federal, state, or
local statute, regulation or ordinance dealing with environmental protection;
asbestos; petroleum and its by-products; and any commercial product which
through its use becomes a hazardous substance.
(e) Following the Commencement Date, responsibility for compliance with the
Americans With Disabilities Act (the "ADA") shall be as follows: (i) all ADA
required maintenance, repair or alteration within the Building (exclusive of
fire stairs and elevators) shall be the responsibility of and at the sole and
separate cost of Tenant; (ii) all ADA required maintenance, repair, alteration,
restoration or replacement with respect to fire stairs and elevators located
within the Building and with respect to the Lot 1B RUA and the Common Property
shall be the responsibility of and at the sole and separate cost of Landlord;
except in each case if ADA required maintenance, repair, alteration, restoration
and/or replacement is at the request of a party hereto and for said party's
primary benefit, then said ADA required maintenance, repair, alteration,
restoration and/or replacement, regardless of where same is to be performed,
shall be the responsibility of and at the sole cost and expense of the party
hereto requesting same. Insurance and/or condemnation proceeds reasonably
allocated to ADA required restoration(s) and/or replacement(s) shall be made
available to the party who by the terms hereof has the obligation to make such
restoration(s) and/or replacement(s), any provision of this Lease, if any, to
the contrary notwithstanding.
(f) Landlord represents, warrants and covenants that (i) it has possession
of the Project and the unqualified right to become vested with good and
marketable fee simple title to the Project, including the Leased Premises, with
full right and authority to grant the estate demised in this Lease and to
execute and perform all of the terms and conditions of this Lease which are the
responsibility of Landlord, (ii) as of the date hereof and as of the
Commencement Date, there are no zoning laws, ordinances, regulations or other
restrictions which would prevent the use of the Leased Premises for general
office and headquarters use, (iii) as of the date hereof and as of the
Commencement Date, the Project shall be subject to no leases or tenancies other
than this Lease and shall be free and clear of liens for taxes, except for
current taxes not yet due and payable, (iv) as of the date hereof the
restrictions, agreements, encumbrances, liens, easements and other rights
affecting the Project are those set forth in EXHIBIT 1.04(F) hereto ("Title
Exceptions") and that as of the Commencement Date there shall be no other or
additional restrictions, agreements, encumbrances, liens, easements or other
rights affecting the Project other than those set forth in EXHIBIT 1.04(F) and
restrictions, agreements, encumbrances, liens, easements and other rights, if
any, which may be created between the date hereof and the Commencement Date
specifically in accordance with the specific provisions of this Lease, (v) to
the best of the knowledge, information and belief of Landlord none of the
restrictions, agreements, encumbrances, liens, easements and other rights
presently existing and/or as may be created as in sub-section (iv) immediately
above specifically provided will prevent or impair the use of the Leased
Premises for office use, and (vi) there is no claim, litigation, governmental or
administrative proceeding or action by any private or public individual or
entity pending, or to Landlord's actual knowledge, threatened against the
Project (or any portion thereof) or against Landlord and relating to the Project
(of any portion thereof).
(g) Tenant represents, warrants and covenants that it has full right and
authority to execute and perform all of the terms and conditions of this Lease
which are the responsibility of Tenant.
(h) Landlord and Tenant agree to indemnify and hold harmless the other from
and against any and all liabilities, damages, judgments, causes of action,
claims and expenses which may be incurred by the Landlord or Tenant as the case
may be relating to or arising out of any breach by the indemnifying party of the
covenants set forth in SUBSECTIONS "(A)" THROUGH "(G)" hereof. The foregoing
indemnification shall survive the expiration or earlier termination of this
Lease.
SS.1.05 TERM
This Lease shall be for a term (the "Lease Term") commencing on the
Commencement Date specified in SECTION 1.01 hereof [or such earlier date
following not less than twenty (20) days advance written notice from Landlord to
Tenant that the Leased Premises will be Substantially Completed and the Leased
Premises are actually delivered by Landlord to Tenant on such earlier date or
later date as in this Lease otherwise specifically provided] and terminating on
the Termination Date specified in said SECTION 1.01 hereof. For purposes hereof,
a "Lease Year" shall consist of a period of 365 days (366 days in a leap year).
The first Lease Year shall begin on the Commencement Date and each subsequent
Lease Year shall commence on the anniversary of said Commencement Date.
SS.1.06-1 PRE-TERM ACCESS BY TENANT
Landlord and Tenant shall in good faith cooperate to provide access to the
Leased Premises during the period commencing approximately one hundred twenty
(120) days prior and ending approximately ninety (90) days prior to the then
reasonably projected Commencement Date to afford Tenant and its contractors
(hereinafter sometimes "Tenant's Contractors") the opportunity to install above
ceiling cabling, above ceiling telephone and data lines and similar equipment;
provided, however, said installations shall be done at a time and in such a
manner so as not to materially interfere with the Substantial Completion
(hereinafter defined) of the Project. Presently the projected beginning and
ending dates for completing such work as set forth in the Project Schedule (a
copy of which is attached hereto, made a part hereof and marked EXHIBIT 1.06-1)
are as follows:
BEGINNING DATE ENDING DATE
Third Floor January 18, 1999 January 29, 1999
Second Floor February 1, 1999 February 12, 1999
First Floor February 15, 1999 February 26, 1999
SS.1.06-2 PRE-TERM ACCESS BY TENANT FOR FIXTURING
On or about April 22, 1999, (said date being sometime herein referred to as
the "Tenant Third Floor Fixturing Date") Tenant and Tenant's Contractors shall
have access to the third floor of the Building for purposes of installing Tenant
supplied furniture and fixtures; providing, however, that said installations do
not interfere with the Substantial Completion of the Project. On or about May 6,
1999, Landlord shall deliver the second floor of the Building to Tenant and
Tenant's Contractors for the purposes aforesaid (the "Tenant Second Floor
Fixturing Date"). On or about May 20, 1999, Landlord shall deliver the first
floor of the Building to Tenant and Tenant's Contractors for the purposes
aforesaid (the "Tenant First Floor Fixturing Date"). Said date shall be subject
to change for Force Majeure and Tenant Delays. Revised dates, if any, shall be
set forth in a revised Project Schedule. Landlord and Tenant shall in good faith
coordinate their respective efforts so as to cause the Project and Tenant's said
installations to be completed at the earliest reasonably practicable date at the
lowest reasonably practicable cost. No Rent (hereinafter defined) shall be
payable during Tenant's use of the Building as in this SECTION 1.06-2, or as in
SECTION 1.06-1 specifically provided. Tenant (or Tenant's Contractors) shall,
however, pay any costs and expenses, if any, which would not otherwise be
incurred by Landlord (such as additional construction cleanings, material
utility charges, damages to the Project, etc.) resulting solely and directly
from Tenant's said use of the Project as in SECTIONS 1.06-1 and 1.06-2
specifically provided. The presently contemplated dates for access by Tenant and
Tenant's Contractors as in these SECTIONS 1.06-1 and 1.06-2 hereinbefore and on
the Project Schedule set forth may be amended from time-to-time as herein
specifically provided or as may from time-to-time be otherwise agreed by and
between the parties hereto.
SS.1.06-3 DELAYED DELIVERY
In the event that the Project is not Substantially Completed (as
hereinafter defined) and delivered to Tenant by May 20, 1999, then Tenant shall
receive, as liquidated damages (and not as a penalty), a credit against monthly
installment(s) of Base Rent next coming due equal to two (2) times the daily
Base Rent which would have otherwise been payable by Tenant to Landlord as in
this Lease provided for each day beyond May 20, 1999 that the Project is not
Substantially Completed and delivered to Tenant.
SS.1.06-4 FORCE MAJEURE DELAYS
For purposes of SECTION 1.06-3 above and otherwise in this Lease, delays in
Substantial Completion resulting from Force Majeure Delays (hereinafter defined)
shall cause each of the applicable dates specified in this Lease (including,
specifically the May 20, 1999 date set forth in SECTION 1.06-3 above and the
Commencement Date) to be extended for the number of days in the aggregate
(taking into consideration concurrent Force Majeure Delays) that Substantial
Completion was actually delayed as a result of said Force Majeure Delay(s). For
purposes of SECTION 1.06-3 above (and elsewhere in this Lease where applicable)
"Force Majeure Delays" means any delay in the performance of any obligation
hereunder (except the obligation of either party to pay money, including Rent
and Additional Rent and other like and unlike monetary obligations) (but no Rent
shall be due or payable until the actual Commencement Date if said Commencement
Date is delayed as a result of a Force Majeure Delay) when such delay(s) is
occasioned by causes beyond the performing party's control including, but not
limited to, a delay caused by fire or other man-made or natural casualty; work
stoppages, boycotts, slowdowns or strikes; inability to obtain materials,
equipment, or energy which is not related to pricing; riot or insurrection;
significantly unusual weather conditions; and/or war, invasion or hostility.
Notwithstanding the foregoing, absent Tenant's written consent (which consent
shall not be unreasonably withheld, conditioned or delayed) delays caused by the
failure of cognizant governmental authorities to grant the necessary approvals
for the Project (providing such failure is not caused or materially contributed
to by Tenant (a "Tenant Delay", as hereinafter defined) ("governmental delay")
and delays caused by Landlord's failure for whatever cause to acquire fee simple
title to Duke/Riverport Site No. 1 [and Landlord hereby agrees that it shall
acquire fee simple title to Duke/Riverport Site No. 1 at the earliest reasonably
practical date, but not later than the Commencement Date (and shall promptly
advise Tenant, in writing, when such fee simple title has been acquired)] shall
NOT be deemed to be Force Majeure Delays. Anything herein to the contrary
notwithstanding, the parties hereto agree to in good faith cooperate with a view
toward mitigating any adverse consequences which may be suffered by either party
hereto as a result of any Force Majeure Delays and/or any governmental delay.
Landlord and Tenant shall cause the Project Schedule to be from time-to-time
amended to reflect any Force Majeure Delays.
SS.1.06-5 TENANT DELAYS
The number of days of delay arising, directly or indirectly, out of or on
account of Tenant's failure to meet dates specifically set out in this Lease
and/or on the Project Schedule, or indirectly out of or on account of the
failure of Tenant's Contractors to complete work to be performed on behalf of
Tenant, if any, which in any such case(s) actually delays the Substantial
Completion of the Project, except to the extent such delays are caused through
the fault of Landlord or Landlord's agents, employees, contractor (and its
subcontractors) and/or representatives, shall constitute "Tenant Delays." Tenant
shall have the right to make changes to the Tenant Improvement Work at any time
by way of written change orders ("Change Orders") providing that any delay in
the construction of the Tenant Improvement Work (hereinafter defined) resulting
from such Change Order(s) which actually results in a delay in the Substantial
Completion of the Project (net of any savings of time resulting from Change
Orders, if any) shall be deemed a Tenant Delay. The date for commencement of
Tenant's obligation to pay Rent and Additional Rent under this Lease shall not
be delayed or postponed on account of any Tenant Delays. Landlord and Tenant
shall cause the Project Schedule to be from time-to-time amended to reflect any
Tenant Delays.
SS.1.06-6 LIMITED RIGHT OF TERMINATION
In the event the Project is not Substantially Completed by September 30,
1999, subject to extension day-for-day for Force Majeure and Tenant Delays, then
Tenant shall have the right to terminate this Lease upon written notice to
Landlord and thereupon all of Landlord's further obligations for payment of
liquidated damages as in SECTION 1.06-3 provided and all other obligations of
Landlord and Tenant one to the other hereunder shall cease and determine.
Landlord and Tenant entered into a Letter Agreement dated June 3, 1998, a copy
of which is attached hereto, made a part hereof and marked EXHIBIT 1.06-6. Any
provisions of said Letter Agreement or herein to the contrary notwithstanding,
if any, Tenant shall have no obligation to Landlord to reimburse Landlord as in
said Letter Agreement provided upon the exercise of its Limited Right of
Termination as in this SECTION 1.06-6 provided.
SS.1.06-7 RENEWAL OPTIONS
Landlord hereby grants to Tenant the right and option to extend the term of
this Lease [the "Renewal Option(s)"] with respect to all or a portion of the
Leased Premises in excess of ninety thousand (90,000) RSF [provided, however,
the Leased Premises shall at no time be less than ninety thousand (90,000) RSF
nor, absent Landlord's consent to the contrary, shall the space remaining
available within the Building for lease to others be non-contiguous or less than
one-half of one floor within the Building (and said remaining space shall have
reasonable access from and to the Building and the Building's common areas)],
for two (2) five (5) year terms (the "First Five Year Renewal Term" and the
"Second Five Year Renewal Term"). Provided that Tenant is not then in default
under the terms of this Lease beyond any applicable period(s) of notice and/or
cure at the time it exercises a Renewal Option, Tenant shall have the right to
exercise its First Five Year Renewal Term and if exercised, its Second Five Year
Renewal Term, upon the giving of not less than twelve (12) months advance
written notice to Landlord prior to the expiration of the then existing Lease
Term. The Renewal Term(s) shall be upon the same terms and conditions contained
in this Lease for the initial Lease Term except that the Base Rent for each
Renewal Term shall be adjusted as in SECTION 2.02 hereof provided for the
portion of the Premises subject to the Renewal Option. Time shall be deemed to
be of the essence in the giving of notices hereby required. Failure of Tenant to
timely give any notice required hereby to be given shall be deemed a waiver by
Tenant of its option to extend this Lease as in this Section provided. In the
event Tenant elects to extend the term of this Lease during either Renewal Term
for only a portion of the Leased Premises, then Tenant's Rent during the
applicable Renewal Term(s) shall be determined by multiplying the rental rate
determined as in SECTION 2.02 provided (95% of Effective Market Base Rent Rate)
times the RSF contained in such portion of the Leased Premises and Tenant's
Additional Rent and other monetary obligations hereunder shall be equitably
adjusted in proportion to the RSF contained within the then Leased Premises as
compared to the RSF of the Building. In other words, Tenant shall be obligated
to pay only its prorata share of Additional Rents (as hereinafter defined),
including, but not limited to Real Estate Taxes, Assessments, utilities and
other similar items which are payable by Tenant hereunder and Tenant's
maintenance obligations and all other obligations hereunder shall be equitably
apportioned in the ratio that the then Leased Premises bears to the total RSF of
the Building. In the event Tenant takes less than all of the space in the
Building as hereinbefore provided, Landlord shall pay all Real Estate Taxes,
Assessments, utilities and other similar items and shall bear all maintenance
and other obligations as provided herein with respect to the portions of the
Building which are not then a part of Tenant's then Leased Premises.
SS.1.07 EXPANSION OPTIONS
Landlord hereby grants to Tenant a Right of First Offer ("ROFO") with
respect to the following spaces (collectively, the "ROFO Spaces") in buildings
currently owned by Landlord in the immediate vicinity of the Building:
(a) All of the space in that certain building commonly known as "The
Schultz Company Building," which said building contains approximately 45,200
square feet of space and bears a street address of 14090 S. Riverport Drive;
(b) All of the space in that certain building commonly known as "The
Riverport Distribution Center," having a street address of 14042 Riverport
Drive, currently occupied by Sverdrup Investments, Inc., which said space
contains approximately 10,000 square feet; and
(c) All of the space in that certain building commonly known as "The
Riverport Distribution Center," having a street address of 14042 Riverport
Drive, currently occupied by Citicorp Mortgage, Inc., which said space contains
approximately 77,635 square feet.
The termination dates of the leases of the tenants currently occupying the
ROFO Spaces referenced in SECTIONS 1.07 (A), (B) AND (C) hereof are January 15,
1999, February 28, 2000 and December 31, 2002, respectively. None of the tenants
occupying said ROFO Spaces have any right(s) to renew their leases beyond the
termination dates aforesaid. With respect to the ROFO Space referenced in
SECTION 1.07 (A) hereof, not earlier than September 1, 1998 and not later than
September 30, 1998, and with respect to the ROFO Space referenced in SECTION
1.07 (B) hereof, not earlier than August 1, 1999 and not later than August 31,
1999, and with respect to the ROFO Space referenced in SECTION 1.07 (C) hereof,
not earlier than December 1, 2001, and not later than March 31, 2002, Landlord
shall advise Tenant, in writing, of the terms and conditions, including rent and
term, that Landlord will offer each said ROFO Space, respectively, to the market
for lease effective as of the date immediately following the termination date of
the lease of the existing tenant as above specified (which said terms and
conditions shall be in all material respects substantially similar to the terms
and conditions then generally appertaining in the market for space of
substantially similar size and character). Tenant shall have fifteen (15)
business days within which to notify Landlord in writing whether it will accept
each of Landlord's said offers. If Tenant fails to accept any of Landlord's said
offers within the periods aforesaid, said offer shall be deemed rejected and
Landlord shall have no further obligation to offer the subject space to Tenant;
provided, however, if following Tenant's rejection as aforesaid, Landlord offers
the subject space to another tenant upon economic terms and conditions [when
viewed in their entirety having a present value which is less than ninety
percent (90%) of the present value of the economic terms and conditions proposed
to Tenant (in each instance using a 10% discount rate for future economic
obligations)], then before entering into a lease with another tenant for said
space, Landlord shall again offer said space to Tenant upon such amended
economic terms and conditions and Tenant shall have another fifteen (15)
business day period within which to again accept or reject Landlord's said
offer. Upon acceptance of any of Landlord's offers given pursuant to the terms
of this SECTION 1.07, Landlord and Tenant shall promptly execute a lease in
which all of the terms and conditions of Landlord's said offer are set forth
with specificity and such other terms as may be mutually agreed upon by and
between Landlord and Tenant.
Landlord has possession of and has the contractual right to obtain fee
simple title to Lot 2 of Duke/Riverport Site No. 1. From the date of this Lease
through December 1, 1999, Landlord agrees that it will not develop a portion of
that property containing not less than ten (10) acres [which said ten (10) acre
site shall have contiguity with the property presently being leased by Landlord
and Tenant at 14000 Riverport Drive and shall have access to Riverport Drive via
the then Common Property], in order that said acreage shall remain available to
Tenant for the potential future expansion of its business. Landlord represents
and warrants that during the period aforesaid it will take all action necessary
to preserve its right to obtain fee simple title to said acreage in accordance
with the terms of Landlord's presently existing contractual agreements. During
the period aforesaid Tenant shall have the right to purchase from Landlord said
property for the use aforesaid, but not for the purpose of offering said
property to others for sale and/or development, at a price equal to the fair
market value of said property. In addition, from the date of this Lease through
December 1, 1999, Landlord agrees that, upon Tenant's request and Tenant's
agreement to lease at least one-half (1/2) of a building to be constructed by
Landlord for a term of ten (10) years, Landlord will construct on such portion
of Lot 2 of Duke/Riverport Site No. 1 as aforesaid, a building containing
approximately one hundred thousand (100,000) square feet of space. The rent,
terms and conditions of Tenant's said lease (other than term) (which said rent,
terms and conditions shall be in all material respects substantially similar to
the rent, terms and conditions then generally appertaining in the market for
space of substantially similar size and character to that to be contained in
said building at the time said building is scheduled to be substantially
completed) shall be agreed upon by and between Landlord and Tenant.
In the event of disagreement between Landlord and Tenant as to whether the
terms and conditions to apply to any ROFO Space or the terms and conditions to
apply to the space in the building to be constructed, or as to the fair market
value of the property which Tenant has an option to purchase all, as
hereinbefore in this SECTION 1.07, specifically provided, then the said terms
and conditions or said fair market value shall be determined by the procedure
established for determination of the Effective Market Base Rent Rate as in
SECTION 2.02 hereof provided.
SS.1.08 RIGHT OF FIRST REFUSAL TO PURCHASE PROJECT
If Landlord receives a bona fide offer to purchase the Building from an
independent third party purchaser (whether or not solicited by Landlord) ("Third
Party Offer") at any time during the Lease Term, as and if extended, and
provided Tenant is not then in default of the terms and provisions of this Lease
beyond any applicable period(s) of notice and/or cure, Tenant shall have a first
right of refusal to purchase the Building for the same price and upon the same
terms and conditions as set forth in said Third Party Offer. Tenant shall have
twenty (20) business days from receipt of written notice from Landlord in which
the price, terms and conditions of the Third Party Offer are set out with
reasonable specificity ("Offer Notice") in which to accept or reject Landlord's
said offer. In the event Tenant fails to notify Landlord in writing of its
intent to purchase within said twenty (20) day period, such failure shall be
conclusively deemed a rejection of Landlord's said offer and Landlord can
proceed to close the sale with the third party for the price and upon all
material terms and conditions set out in said Third Party Offer, but none other.
In the event of any material change in the price or in the event of any material
change in the terms and conditions of said Third Party Offer, Landlord shall
again provide the Tenant with an Offer Notice and the Tenant shall, once again,
have twenty (20) business days in which to accept or reject such revised offer.
If Tenant accepts said offer, the Closing of said purchase shall occur at the
time and in accordance with the terms and conditions specified in the Third
Party Offer.
At least twenty (20) business days prior to formally offering the Building
to potential third party purchasers, Landlord shall advise Tenant, in writing,
of its intention to offer the Project for sale and the proposed price, terms and
conditions of said offer. Said notice shall be deemed to be an Offer Notice and
Tenant shall have twenty (20) business days from receipt thereof to notify
Landlord, in writing, of its intent to purchase the Building for said price and
upon said terms and conditions. In the event Tenant notifies Landlord that it
will not purchase the Building for said price and upon said terms and conditions
or if Tenant fails to respond to Landlord's aforesaid Offer Notice, then
Landlord may proceed to offer and sell the Building to any third party purchaser
for the price and upon all material terms and conditions set out in the said
Offer Notice for a period of six (6) months following the giving by Landlord to
Tenant of the notice aforesaid and in the event of any material change in the
price or any material change in the terms and conditions [and an offer in which
the present value of the economic terms of said offer (when view in their
entirety) are less than ninety-six percent (96%) of the present value of the
economic terms set out in the Offer Notice (in each instance using a 10%
discount rate for future economic obligations) shall be deemed material] or in
the event that a binding contract for sale is not entered into within said six
(6) month period [and closed within six (6) months of the execution of said
contract] then Landlord shall again offer the Building to Tenant upon the
changed price, terms and/or conditions as aforesaid; provided, however, Tenant
shall respond to any such "re-offering" within ten (10) business days of
Landlord's said "re-offer".
The sale of the Building to an affiliate or the transfer among affiliated
entities of interests in the Building shall not trigger the Rights of Purchase
in favor of Tenant. For purposes hereof, "affiliate" or "affiliated entity"
shall mean any entity controlling or controlled by Landlord or any entity in
which Landlord has an ownership interest of fifty percent (50%) or more.
SS.1.09 BUILDING SHELL CONSTRUCTION
Landlord agrees to cause the Building to be constructed on the Land and to
cause all means of ingress and egress to the Building and all above ground and
below ground infrastructure improvements and all other exterior improvements in
connection with the Project, including, but not limited to parking, driveways,
walkways and landscaping to be constructed on the Lot 1B RUA, on the Lot 1C RUA
and on the Common Property (hereinafter, sometimes the "Building Shell" or
"Building Shell Work"), all in accordance with that certain "Building Shell
Description," attached hereto, made a part hereof and marked EXHIBIT 1.09-1 and
in accordance with the Building Plans ("Building Plans") and in accordance with
the Project Schedule (EXHIBIT 1.06-1). The latest editions of the Building Plans
have been reviewed and approved by Landlord and Tenant, are identified on
EXHIBIT 1.09-2, and are incorporated herein by reference. The Building Architect
and other design professionals, as appropriate, shall certify that the Building
Plans have been prepared in accordance with all applicable codes, ordinances,
laws and regulations and are complete in all material respects. The Building
Shell shall contain all new systems, including, without limitation, mechanical,
electrical, plumbing, heating, ventilation and air conditioning. Notwithstanding
the foregoing, Landlord represents, warrants, covenants and agrees that the
Building Shell Work shall be completed (i) in a good and workmenlike manner,
free of any mechanics liens and any other liens which could cause a forfeiture
of any of Tenant's rights hereunder or which could interfere with Tenant's quiet
enjoyment of the Leased Premises for the Permitted Uses [and if any such
forfeiture or interference is actually threatened, Landlord shall provide for
the release of such lien(s) by bonding or otherwise, at its sole cost and
expense], (ii) Hazardous Substance free and (iii) in compliance, at Substantial
Completion (as hereinafter defined), with all applicable codes, ordinances, laws
and regulations, the Riverport Indenture, the Sub-Indenture and all conditions,
restrictions and other matters of record.
SS.1.10 TENANT IMPROVEMENT WORK
All work to be completed in connection with the Project by Landlord or
Landlord's affiliate which is over and above the Building Shell Work shall be
deemed to be "Tenant Improvement Work". Landlord, or Landlord's affiliate, shall
serve as the General Contractor for the Tenant Improvement Work. Tenant shall
have the right to require Landlord to competitively bid subcontracts and/or to
require Landlord to obtain at least three (3) competitive bids for each major
trade necessary to complete the Tenant Improvement Work. Copies of all said bids
for the Tenant Improvement Work shall be provided by Landlord to Tenant.
Landlord, or its affiliate, shall receive seven percent (7%) of the "Tenant
Improvement Construction Cost" (hereinafter defined) as its fee for serving as
General Contractor of the Tenant Improvement Work. For purposes of this SECTION
1.10, "Tenant Improvement Construction Cost" shall be the total of (a) the final
subcontract sums of all construction subcontracts, including sales, use or
similar taxes, procured by Landlord or its affiliate for the Tenant Improvement
Work (but this shall not preclude Tenant from contracting directly for
improvements or installations to the Leased Premises, such as data and telephone
cabling and modular partition installations, which if contracted directly and
the completion of which is not supervised by Landlord or Landlord's affiliate
shall not be deemed to be a Tenant Improvement Construction Cost but rather
shall be deemed to be "Tenant Improvements By Tenant"), (b) remuneration,
including welfare or other benefits payable to personnel of Landlord's (or
Landlord's affiliate) when stationed at the Project field office, but in an
amount not to exceed $25,000.00 in the aggregate, (c) subject to prior written
approval of Tenant, fees of testing laboratories and services, if any, (d)
costs, including transportation and maintenance, of all materials, supplies,
equipment, and temporary facilities reasonably and necessarily used or consumed
in the performance of the Tenant Improvement Work, (e) losses and expenses, not
compensated by insurance or otherwise, sustained by Landlord or Landlord's
affiliate in connection with the Tenant Improvement Work, provided said loss or
expense is not due to Landlord or Landlord's affiliate's negligence, but in an
amount not to exceed $10,000.00 in the aggregate, (f) costs of the building
permit for the Tenant Improvement Work and for other permits, licenses and
inspections reasonably and necessarily attendant to the Tenant Improvement Work,
(g) subject to prior written approval of Tenant, the portion of reasonable
travel and subsistence expenses of Landlord or its affiliate's officers or
employees incurred while traveling in the discharge of their duties reasonably,
necessarily and specifically connected with the Tenant Improvement Work. Except
as specifically provided above, no other costs or expenses (including, without
limitation, general conditions) shall be included in the Tenant Improvement
Construction Costs. Tenant shall have the right to select specific trade
subcontractors to perform the Tenant Improvement Work, subject to Landlord's
reasonable approval, which approval shall not be unreasonably withheld,
conditioned or delayed. Nonetheless, Landlord shall have the right to reject
subcontractors so selected by Tenant if in Landlord's reasonable opinion the
selection of said subcontractors will have a negative affect on the Substantial
Completion of the Project and/or on the Project Schedule. Plans for the Tenant
Improvement Work shall be prepared by Tenant's interior space designer (in
cooperation with Landlord, Tenant and the Building Architect) ("Tenant
Improvement Plans") and Tenant's interior space designer shall certify that said
Tenant Improvement Plans have been prepared in accordance with all applicable
codes, ordinances, laws and regulations and are complete in all material
respects. Landlord shall cause the Tenant Improvement Work to be completed (i)
in a good and workmenlike manner, free of any mechanics liens or any other liens
which could cause a forfeiture of any of Tenant's rights hereunder or which
could interfere with Tenant's quiet enjoyment of the Leased Premises or the
Permitted Uses [and if any such forfeiture or interference is actually
threatened, Landlord shall provide for the release of such lien(s) by bonding or
otherwise], at its sole cost and expense and (ii) in accordance with said Tenant
Improvement Plans and the Project Schedule. The reasonable and necessary Tenant
Improvement Construction Costs of the Tenant Improvement Work actually incurred
shall be paid by Landlord on a percentage of completion basis [but with a
retention (absent an agreement between Landlord and Tenant to the contrary) of
not less than five percent (5%)] following receipt of appropriate invoices (and
Landlord shall promptly provide copies of said invoices for the Tenant
Improvement Work to Tenant and shall keep Tenant generally appraised of all
payments made for said Tenant Improvement Construction Cost). Landlord shall
apply, pro tanto, the Tenant Improvement Allowance (as hereinafter defined)
toward the Tenant Improvement Construction Cost as the cost thereof becomes
payable. Landlord's application of the Tenant Improvement Allowance to the
Tenant Improvement Construction Cost shall be subject to reasonable rights of
review and approval of each such application by Tenant. To the extent the Tenant
Improvement Construction Costs exceed the Tenant Improvement Allowance, Tenant
shall reimburse Landlord, on a monthly basis, following receipt by Tenant from
Landlord of invoices in reasonable detail for Tenant Improvement Construction
Costs for completed Tenant Improvement Work in excess of the Tenant Improvement
Allowance. Upon Substantial Completion of the Project, if any portion of the
Tenant Improvement Allowance is not expended as aforesaid or otherwise in this
Lease provided, Landlord shall, at Tenant's direction pay any remaining portion
directly to Tenant's Contractors for Tenant Improvements By Tenant or shall pay
said sum directly to Tenant or shall apply same to Rent next coming due pursuant
to the terms of this Lease. Any disputes between Landlord and Tenant as to the
construction and completion of Tenant Improvement Work or the Tenant Improvement
Construction Costs shall be submitted to Dispute Resolution as provided in
SECTION 3.22 hereof.
SS.1.11 SUBSTANTIAL COMPLETION
The Project shall be deemed "Substantially Completed" (sometimes herein
"Substantially Completed" or "Substantial Completion") when all of the following
conditions and requirements have been met:
(a) Landlord shall have substantially completed construction of the
Building Shell and the Tenant Improvement Work (or, if applicable, a portion
thereof) and shall have provided to Tenant the Building Architect's certificate
(and with respect to the Tenant Improvement Work the certificate of Tenant's
interior space designer) that the Building Shell and the Tenant Improvement Work
are sufficiently complete in accordance with the Building Shell Description, the
Building Plans and/or the Tenant Improvement Plans so that the Project can be
utilized by Tenant for its intended purpose [except for items of minor "punch
list" work, the completion of which will not materially affect the use of the
Project for its intended purpose(s)]. At least ten (10) business days prior to
substantial completion of any portion or portions of the Project, Landlord shall
advise Tenant, the Building Architect and Tenant's interior space designer of
the fact that same is sufficiently complete to allow the inspection thereof for
purposes of completing the punch list. Promptly thereafter, Tenant, Landlord,
the Building Architect and Tenant's interior space designer shall jointly
complete an inspection of the Project (or applicable portions thereof) and shall
complete a written listing (punch list) of items to be finished or completed by
Landlord [which Landlord agrees to complete as soon as reasonably possible
following the completion of said punch-list but not later than thirty (30) days
following the Commencement Date] [provided, however, that if in order to
complete a punch list item a long lead time type item is reasonably required
(such as special order wall covering) and said punch list item cannot be
reasonably completed within such time period without said long lead time item
[(and Landlord has advised Tenant of said fact, in writing, within ten (10)
business days of receipt of the punch-list and placed any necessary order within
said ten (10) day period], then the time within which that specific punch-list
item is to be completed shall be extended day for day for the period between the
date such long lead time type item was ordered and the date such item is
received (and Landlord and the contractors shall use all reasonable efforts to
obtain any long lead time items at the earliest reasonably practicable date)];
(b) Landlord shall have delivered or caused to be delivered all parking and
access areas in the Lot 1B RUA and in the other Common Property (including the
Lots 1A and 1C Restricted Use Areas) Substantially Completed;
(c) issuance of an occupancy permit(s) by cognizant governmental
authorities which permits legal occupancy of the entire Project or all material
portions thereof [and in this regard both Landlord and Tenant shall timely take
all steps reasonably required of them by said authorities prerequisite to the
issuance of said permit(s), if any, and failure of either to do so shall be
deemed a (Landlord) delay and/or a Tenant Delay, as applicable; provided,
however, to the extent that any such authority requests that Tenant take any
step which, under the terms of this Lease, is the responsibility of Landlord,
such request shall be deemed a request of Landlord].
SS.1.12 SIGNAGE
Tenant shall have the right to install signage on the face of the Building
or at such other location(s) reasonably acceptable to Landlord, providing said
signage meets all requirements of the Indenture and the requirements of all
cognizant governmental authorities. Landlord agrees to cooperate in good faith
with Tenant, in Tenant's dealings with the Riverport Trustees under the
Indenture and with cognizant governmental authorities, to meet Tenant's
reasonable signage requirements.
SS.1.13 INSPECTION
Tenant and its agents, representatives and employees shall have the right
at any time following the date hereof and prior to the Commencement Date to
enter upon the Project in order to inspect the Building Shell Work and the
Tenant Improvement Work, provided such entry shall not unreasonably interfere
with the Building Shell Work or the Tenant Improvement Work.
SECTION II. RENT, ALLOWANCES, ADJUSTMENTS TO RENT, SERVICES
SS.2.01 RENT
Tenant's "Base Rent" for the periods hereinafter in this SECTION 2.01
specified shall be as follows:
From The Commencement Date Through The Last
Day Of The 5th Lease Year Thereafter $ 12.11/RSF
From the First Day Of The 6th Lease Year Through
The Termination Date $ 12.66/RSF
Tenant shall pay to Landlord during the Lease Term the Base Rent calculated
as in this SECTION 2.01 provided, together with the Additional Rents herein
reserved (Base Rent and Additional Rents are herein sometimes collectively
referred to as "Rent" or "Rents"), all of which shall be payable without any
setoff or deduction whatsoever, except as specifically provided in SECTION
3.07-8 and elsewhere in this Lease. Base Rent and Additional Rents shall be paid
to Landlord in the monthly installments as specified in SECTION 1.01 hereof, in
advance, on the first day of each calendar month, during the entire Lease Term
at Landlord's address specified in SECTION 1.01 for payments, or to such other
person or entity or to such other address as Landlord may from time-to-time
designate in writing. Tenant's obligation to pay all Rent due under this Lease
shall survive the expiration or earlier termination of this Lease. In the event
the Commencement Date or Termination Date are other than the first and last day
of a month, respectively, Rents payable hereunder for the months in which the
Commencement Date and Termination Date occur shall be apportioned (30 days to a
month) and said apportioned Rent for the partial month in which the Commencement
Date occurs shall be paid as and with the Rent payable on the first day of the
month following the month in which the Commencement Date occurs. Notwithstanding
anything to the contrary herein, Tenant shall have the use of the Lot 1B RUA and
the Common Property rent free during the Lease Term and any Renewal Term (but
this shall not be construed to relieve Tenant of any obligations to pay
maintenance, utility and other like expenses associated with said Lot 1B RUA and
Common Areas as in the Sub-Indenture or otherwise herein specifically provided).
SS.2.01-1 ALLOWANCES
The Tenant Improvement Allowance shall be Three Million Dollars
($3,000,000.00) ($25.00/RSF*120,000 RSF) and shall be applied by Landlord to the
Tenant Improvement Construction Costs of the Tenant Improvement Work as in
SECTION 1.10 hereinbefore provided. In addition to the Tenant Improvement
Allowance, Landlord shall pay to Tenant or to Tenant's designee toward the cost
of the design of the Leased Premises and toward the cost of completion of the
Tenant Improvement Plans the sum of One Hundred Twenty Thousand Five Hundred
Eight Dollars ($120,508.00) ("Tenant Design Allowance"). In addition to the
Tenant Improvement Allowance and the Tenant Design Allowance, Landlord shall pay
to Tenant or to Tenant's designee toward the cost of the design and installation
of signage, as in SECTION 1.12 hereinbefore specified, the sum of Eight Thousand
Dollars ($8,000.00) ($3,000.00 for exterior signage and $1,000.00 for each of 5
entry drive signs) ("Tenant Signage Allowance"). In addition to the Tenant
Improvement Allowance, the Tenant Design Allowance and the Tenant Signage
Allowance, Landlord shall pay to Landlord's affiliate, or such other person
and/or entities completing such work toward the cost of the design and
installation of a computer room(s), the sum of Two Hundred Thousand Dollars
($200,000.00) ("Computer Room Allowance") and toward the cost of the interior
decorations of three elevator cabs the sum of Twenty-Two Thousand, Five Hundred
Dollars ($22,500.00) ($7,500.00 for each of 3 elevator cabs) ("Elevator Cab
Allowance"). Any portion of any of the foregoing Allowances which are not fully
expended shall be paid to Tenant. Any costs to complete the work for which any
of the aforesaid Allowances has been provided in excess of said Allowances shall
be borne by Tenant and shall be paid to Landlord or to Landlord's designee as in
SECTION 1.10 herein provided.
SS.2.01-2 CHANGE ORDERS
If following the execution of this Lease, the scope of work set out in the
Building Shell Description is changed by written agreement of the parties hereto
("Change Order") (and Landlord and Tenant shall in good faith cooperate to make
any changes in the Building Shell Description which do not materially change
from the perspective of both Landlord and Tenant the general nature and scope of
the Project or the quality thereof), then the net increase in costs of such
Change Order(s) [which shall include Landlord's actual cost of labor and
materials necessary to complete said change plus a seven percent (7%) overhead
charge on any net increase in costs] shall be paid by Tenant to Landlord or
Landlord's designee. When reasonably practicable, Change Orders shall be
competitively bid. Tenant may elect to have the net increase in costs of such
Change Order(s) paid from the Tenant Improvement Allowance. During the
subcontractor bidding of the Building Shell Work, Landlord and Tenant shall
identify and establish unit pricing as may be applicable to the Building Shell
Work which may be affected by a Change Order. Presently anticipated unit price
items include VAV boxes, diffusers/grills, wood doors with hardware, sprinkler
heads, light fixtures and electrical devices. To the extent Change Order(s)
result in a reduction of the cost of the Building Shell, the net decrease in
costs of said Change Order(s) shall be credited to Tenant's benefit by a dollar
for dollar increase in the amount of the Tenant Improvement Allowance. To the
extent such Change Order(s) actually results in a delay in the Substantial
Completion of the Project, such delay shall be deemed a Tenant Delay.
SS.2.02 RENEWAL TERM RENT
Base Rent for any Renewal Term, as in SECTION 1.06-7 hereof provided, shall
be ninety-five percent (95%) of the projected "Effective Market Base Rent Rate,"
as at the commencement date of the Renewal Term which said Effective Market Base
Rent Rate shall be the rate charged to tenants for space of comparable size,
location, and conditions in comparable property within a five (5) mile radius of
the Building. Said Effective Market Base Rent Rate shall take into consideration
the following: location, quality, age, floor levels, common area factors, finish
allowances, rental abatement, parking charges, lease assumptions, moving
allowances, space planning allowances, refurbishment allowances, and any other
concession or inducement. In additional, other consideration such as credit
standing of Tenant, lease term, and any other issues that would be relevant in
making a market rate determination should be considered. Landlord shall inform
Tenant, in writing, of Landlord's proposed Effective Market Base Rent Rate for a
Renewal Term at least fifteen (15) months prior to the expiration of the then
Lease Term. If Landlord and Tenant should be unable to agree as to the Base Rent
for any Renewal Term within twenty (20) days of receipt by Tenant of Landlord's
said notice, then Landlord and Tenant shall each select a qualified real estate
appraiser (as hereinafter defined) to determine the Effective Market Base Rent
Rate. Said appraisers shall render their written decision within twenty (20)
days after the date of their selection. If the difference between the high
appraisal and the low appraisal is ten percent (10%) or less of the low
appraisal, then the Effective Market Base Rent Rate shall be the average between
the low appraisal and the high appraisal and the Base Rent for the Renewal Term
shall be ninety-five percent (95%) thereof. In the event said difference is in
excess of ten percent (10%), then the appraisers shall mutually select a third
appraiser who shall render a written decision of the Effective Market Base Rent
Rate within twenty (20) days of his/her selection. The Rent during the Renewal
Term shall be ninety-five percent (95%) of the Effective Market Base Rent Rate
as established by the third appraiser; provided, however, that said Rate shall
not be greater than the initial high appraisal or be less than the initial low
appraisal nor shall the Renewal Term Base Rent Rate be less than the Base Rent
Rate payable by Tenant to Landlord as of the Termination Date of the immediately
preceding Lease Term. In the event that the two appraisers fail or refuse to
select a third appraiser, either party may make application, upon written notice
to the other, to the Chief Judge of the United States District Court for the
Eastern District of Missouri, Eastern Division, who shall select the third
appraiser. Either party may, within three (3) business days of the making of
application to the Chief Judge, submit a list of not more than five (5)
qualified (as herein specified) real estate appraisers for the guidance of the
Chief Judge. Each party shall pay the appraiser selected by it and the costs of
the third appraiser, if any, shall be borne equally by Landlord and Tenant. If
it shall become necessary to select appraisers in accordance with the terms of
this SECTION 2.02, said appraisers shall be either (i) a disinterested
commercial real estate broker with at least ten (10) years professional
experience in the St. Louis, Missouri metropolitan office market, or (ii) a
disinterested person with at least ten (10) years professional experience in
commercial real estate appraisal in the St. Louis, Missouri metropolitan area,
and a member in good standing in at least one of the following professional
organizations: The Society of Real Estate Appraisers (holding the SREA
designation), or the American Institute of Real Estate Appraisers (holding the
MAI designation).
SS.2.03 ADDITIONAL RENT
All sums hereinafter designated Additional Rent and all other sums provided
in this Lease to be paid by Tenant to Landlord, and all charges, costs, and
expenses for any services, goods or material furnished by Landlord at Tenant's
request, which are not required to be furnished by Landlord under this Lease,
together with interest at the rate of ten percent (10%) per annum that may
accrue thereon in the event Tenant fails to pay such amount within ten (10) days
of notice from Landlord of the amount then due, and all damages, costs and
expenses, including reasonable attorneys' fees (whether paid to Landlord's
in-house counsel or otherwise), which Landlord may incur by reason of any
default of Tenant or failure on the Tenant's part to comply with the terms of
this Lease, shall be deemed to be "Additional Rents," and in the event of
non-payment thereof by Tenant, except for permitted setoffs and deductions, the
Landlord shall have all of the rights and remedies with respect thereto as
Landlord has for non-payment of the Rent herein reserved to be paid.
SS.2.04 TENANT'S OBLIGATIONS TO MAINTAIN
During the Lease Term and any Renewal Term(s), Tenant, either directly or
indirectly through a contractor or contractors of its choosing [providing that
such contractor(s) is/are qualified and reputable], shall, at its sole cost and
expense (unless herein otherwise specifically provided) maintain in good
operation, order, condition and repair, as and when needed, the following
consistent with other substantially similar office buildings located within
Riverport or at a substantially similar office complex or building within a five
(5) mile radius of the Building:
(a) All mechanical, ventilating, heating and air conditioning, plumbing,
fire sprinkler, security/card access and electrical and other utility systems in
or serving the Building (including that installed for Tenant's specific and
exclusive use, whether as part of the Tenant Improvement Work or subsequently
installed) including, for example, and without limitation, the elevators, air
conditioning, restroom facilities and electrical and janitorial closets and
interior and exterior window washing at least annually; and,
(b) the Lot 1B RUA including, without limitation, lawn and landscaped areas
(including tree and shrub replacements), walkways (including, also, the portions
of the "covered walkway" being constructed on the Lot 1C RUA as part of the
Building Shell Work), driveways and parking areas (including snow and ice
removal), but only to the extent not the obligation of the Riverport Trustees
and/or the Sub-Trustees under the Riverport Indenture or the Sub-Indenture; and,
(c) the interior of the Building (including, specifically, but not by way
of limitation, the Building common areas, such as lobbies, stairs, atriums,
interior plantings, corridors and restrooms);
except, in each of the cases above, (i) for repairs or maintenance required
by reason of the misuse or neglect of Landlord or any of its employees, agents
or contractors, (ii) Major Repairs (as hereinafter defined) and (iii) Capital
Expenditures (as hereinafter defined).
In connection with the foregoing, Tenant shall establish and maintain
throughout the Lease Term a preventative maintenance program, including the
maintenance of service contracts, as appropriate, which follow, at a minimum,
the reasonable preventative maintenance recommendations of the manufactures of
all Building systems, covering, but not by way of limitation, the following:
mechanical, heating, ventilating and air-conditioning, elevators, fire
sprinkler, security, electrical distribution, fire alarm panel and plumbing
systems. In the event that maintenance and repairs which are the responsibility
of Tenant are not completed in a reasonable time after receipt of written notice
from Landlord, then Landlord may, but shall not be obligated to, perform such
maintenance or repairs and make demand upon Tenant for reimbursement of the
reasonable and necessary cost thereof plus interest from the date the
expenditure is made at the rate of ten percent (10%) per annum, in which event
Tenant agrees to make or cause such reimbursement to be made within thirty (30)
days of receipt of such demand.
SS.2.04-1 EXCEPTIONS TO MAINTENANCE OBLIGATIONS
Nothing herein shall obligate Tenant to pay for Capital Expenditures (as
hereinafter defined), Major Repairs (as hereinafter defined) or to pay for
required repair or maintenance resulting from a defect in the construction of
the Project constructed by Landlord pursuant to the terms of this Lease or for
repairs or maintenance, if any, which by the specific terms of the Lease are the
responsibility of Landlord to perform or for repairs or maintenance resulting
from the negligence of Landlord, its employees, agents, contractors and/or
representatives. Nothing herein shall require, or be construed to require,
Tenant to make or pay for any structural changes to the Project (which shall be
and remain the sole obligation of Landlord as elsewhere in this Lease provided),
unless such structural changes shall be ordered or necessitated by alteration or
improvements made to the Project after the Commencement Date by Tenant or by
Tenant's conduct of business at the Project, or unless such structural changes
shall be the natural result of such alterations or improvements or such
conducting of business.
SS.2.05 TENANT TO PAY TAXES
Tenant shall pay or cause to be paid, directly to the governmental entity
to which same are due, on or before the date due or within twenty (20) days of
receipt of a statement(s) therefor from either the governmental entity or
Landlord, whichever is later, all real estate taxes, whether federal, state,
county or municipal which are imposed either directly or indirectly through the
Riverport Trustees and/or the Sub-Trustees upon the Land and the Lot 1B RUA
and/or improvements and appurtenances thereto ("Real Estate Taxes"). The
foregoing notwithstanding, Real Estate Taxes shall be payable by Tenant only to
the extent they relate to the Lease Term and to the extent any Real Estate Taxes
benefit the Land and the Lot 1B RUA for a period prior to or beyond the Lease
Term, Tenant's liability therefore shall be limited to that portion of said Real
Estate Taxes that would, pursuant to generally accepted accounting principals
consistently applied, be equitably allocated to the Land and the Lot 1B RUA for
the term of the Lease only. Landlord shall cause the Land to be designated as a
separate tax parcel. Landlord shall use its best efforts to cause the Lot 1B RUA
to be designated as a separate tax parcel or to have the land and improvements
located within the Lot 1B RUA to be assessed with the Land if no separate tax
parcel may be accomplished. Landlord shall promptly provide to Tenant any tax
statements applicable to the Land and the Lot 1B RUA received by it. Real Estate
Taxes shall not include federal, state and local income taxes, transfer taxes,
capital gains taxes, corporate taxes, inheritance taxes, payroll taxes or taxes
on rents or gross receipts, excess profits taxes, franchise and capital stock
taxes, any other taxes which are imposed or measured by Landlord's income or
profits unless such income or profits tax is based exclusively on Landlord's
income or profits from the Land and/or the Lot 1B RUA and the same are in lieu
of Real Estate Taxes or penalties or interest for late payment of taxes except
to the extent such penalties and/or interest resulted from a default by Tenant
in paying Real Estate Taxes. Notwithstanding anything to the contrary herein,
(i) Real Estate Taxes shall not include real estate taxes for the Lot 1A RUA,
the Lot 1C RUA or the Common Property (except those Real Estate Taxes applicable
to the Common Property (other than Restricted Use Areas) which may be a part of
the "Assessments" under the Sub-Indenture and as therein defined and limited).
Either Landlord or Tenant shall have the right to contest or cause the Riverport
Trustees and/or the Sub-Trustees to contest unreasonable Real Estate Taxes
(using counsel and appraisers mutually acceptable to both Landlord and Tenant)
provided that neither Landlord nor Tenant shall accept any settlement of the
assessed value of the Land, the Lot 1B RUA, the Common Property or the Common
Ground or any part thereof without the prior written approval of the other,
which approval shall not be unreasonably withheld, conditioned or delayed and
providing further that in contesting any such Real Estate Taxes the contesting
party(ies) shall take all required action to prevent a lien for delinquent taxes
from being imposed upon the Land, the Lot 1B RUA, the Common Property or the
Common Ground or any part thereof, including the payment of all said contested
taxes under protest, if required. Landlord and Tenant shall in good faith
cooperate toward the end that the Real Estate Taxes with respect to the Land,
the Lot 1B RUA, the Common Property and the Common Ground are at all times
during the Lease Term reasonable and proper and to the extent appropriate as low
as reasonably practicable. Neither Landlord nor Tenant shall be required to join
in any proceeding or contest brought by the other to contest Real Estate Taxes
unless the provisions of law or the Indenture or the Sub-Indenture require that
the proceeding or contest be brought by or in the name of Landlord and Tenant.
In that case, the other party shall join in the proceeding or contest or permit
it to be brought in said other party's name or the name of the Riverport
Trustees or the Sub-Trustees, as the case may be, and the requesting party shall
reimburse the other party for its actual reasonable out-of-pocket costs and
expenses incurred in connection with such proceeding or contest. Any refund
resulting from such a proceeding or contest brought either by Landlord or Tenant
or by them jointly shall be applied or paid first to reimburse Landlord and
Tenant prorata for their actual reasonable out-of-pocket costs and expenses
incurred in connection with such proceeding and then to reimburse Tenant for any
overpayment of Real Estate Taxes for the period(s) covered by such contest or
proceeding, together with interest on such amount at ten percent (10%) per
annum, and any remaining balance shall be paid to Landlord. In the event Tenant
fails to pay any Real Estate Taxes required by the terms hereof by Tenant to be
paid by the date hereinbefore provided (providing said Real Estate Taxes are not
contested as hereinbefore provided), Landlord may notify Tenant in writing of
such failure, and, if Tenant fails thereafter to pay said Real Estate Taxes,
plus any penalties and interest that may be due thereon, within thirty (30) days
after said notice, then Landlord may pay said Real Estate Taxes, plus any
penalties and interest that may be due thereon (but Landlord shall not be
required to do so), and, in such event, Tenant shall reimburse Landlord for such
payment(s) as Additional Rent.
SS.2.06 TENANT TO PAY ASSESSMENTS
Tenant shall pay or cause to be paid, directly to the Riverport Trustees
and/or the Sub-Trustees on or before the date due or within twenty (20) days of
receipt of a statement(s) therefor from either the Riverport Trustees, the
Sub-Trustees or Landlord, whichever is later, all assessments of said Trustees
with respect to the Land, the Building and the Lot 1B RUA as in the Riverport
Indenture and/or the Sub-Indenture specifically provided, but only as therein
specifically provided. The foregoing notwithstanding, regular and special, if
any, assessments shall be payable by Tenant only to the extent they relate to
the Lease Term and to the extent any assessments benefit the Land, the Building
and the Lot !B RUA for a period prior to or beyond the Lease Term, Tenant's
liability therefore shall be limited to that portion of said assessments that
would, pursuant to generally accepted accounting principals consistently
applied, be equitably allocated to the Land, the Building and the Lot 1B RUA for
the term of the Lease only. Notwithstanding the foregoing or anything to the
contrary herein, Tenant shall not be liable for (i) assessments under the
Sub-Indenture for any Restricted Use Areas other than the Lot 1B RUA, (ii)
Common Property Assessments under the Sub-Indenture or Assessments under the
Indenture except as in the Sub-Indenture and the Indenture, respectively,
specifically defined, provided and limited and (iii) assessments under the
Indenture and/or the Sub-Indenture to the extent such assessments are made with
respect to, or relate to Capital Expenditures (as hereinafter defined) or to any
other expenditures (including, but not limited to real estate taxes and
insurance) which pursuant to the terms of this Lease are the obligation of
Landlord. In other words, expenses which pursuant to the specific provisions of
this Lease are the responsibility of Landlord shall not become the
responsibility of Tenant merely because they are passed onto Tenant indirectly
by way of an assessment under the Indenture and/or the Sub-Indenture, but rather
all such expenses shall be and remain the sole and separate liability of
Landlord as herein specifically provided. Either Landlord or Tenant shall have
the right to contest assessments of the Trustees and/or the Sub-Trustees.
Landlord and Tenant shall in good faith cooperate toward the end that said
assessments are at all times during the Lease Term reasonable and proper and to
the extent appropriate as low as reasonably practicable but without jeopardizing
the quality of the Project and/or Riverport. In the event Tenant fails to pay
any such assessments required by the terms hereof by Tenant to be paid by the
date hereinbefore provided, Landlord may notify Tenant in writing of such
failure, and, if Tenant fails thereafter to pay said assessments, plus penalties
and interest, if any, that may, pursuant to the Riverport Indenture and/or the
Sub-Indenture, be due thereon, within thirty (30) days after said notice, then
Landlord may pay said assessments, plus any said penalties and interest (but
Landlord shall not be required to do so), and, in such event, Tenant shall
reimburse Landlord for such payment(s) as Additional Rent. Tenant shall have the
same rights, if any, that Landlord may from time-to-time have with respect to
the examination of the books and records of the Riverport Trustees and/or the
Sub-Trustees. Landlord hereby represents and warrants that no cost or expense of
the presently mandated expansion of Riverport Drive from two lanes to four lanes
shall be included in the assessments of either the Riverport Trustees or the
Sub-Trustees and Tenant shall have no responsibility for the same. Pursuant to
certain agreements between Landlord and Sverdrup/MDRC Joint Venture
("Sverdrup"), Sverdrup agreed to construct, at its own expense, the mandated
expansion of Riverport Drive. Landlord shall use its best efforts to cause
Sverdrup to timely construct and complete the mandated expansion of Riverport
Drive, and Landlord shall not consent to, acquiesce in, or take any action which
would relieve Sverdrup of its obligation with respect thereto.
SS.2.07 TENANT TO PAY UTILITIES
Effective as at the Commencement Date, Tenant shall contract directly with
all applicable utility providers for all utility services required at and about
the Building and the Lot 1B RUA, including, but not limited to, electric,
telephone, water, sewer and gas, if applicable, and for any and all other
utility service(s) which may from time-to-time during the Lease Term be
necessary and/or desirable to the use, maintenance and repair of the Building
and the Lot 1B RUA (but excluding any utilities which pursuant to the terms of
the Indenture and/or the Sub-Indenture are to be provided and paid for by the
Riverport Trustees and/or the Sub-Trustees) and except as otherwise provided
herein, shall cause all charges (including customer deposits, if any) in
connection with the providing of such services to be timely paid directly to
said utility providers. In the event Tenant fails to pay any such charges,
Landlord may notify Tenant in writing of such failure, and, if Tenant fails
thereafter to pay said charges, plus any penalties and interest that may be due
thereon, within thirty (30) days after said notice, then Landlord may pay said
charges, plus any penalties and interest that may be due thereon (but Landlord
shall not be required to do so), and, in such event, Tenant shall reimburse
Landlord for such payment(s) as Additional Rent. Tenant acknowledges that any
one or more of the above services may be suspended by reason of accident,
repair, alterations or the making of necessary improvements, strikes, lockouts,
governmental requirements or causes beyond the reasonable control of Landlord.
No such interruption, change or malfunction of any of said services shall
constitute an eviction or disturbance of Tenant's use and possession of the
Project or a breach by the Landlord of any of its obligations hereunder or
render Landlord liable for damages or entitle Tenant to be relieved from any of
its obligations hereunder or grant Tenant any right of setoff or recoupment.
Landlord will, however, in good faith cooperate with Tenant (but without
out-of-pocket cost or expense to Landlord) to cause any such interrupted
services to be promptly restored. Notwithstanding anything to the contrary
herein, Landlord shall be responsible for and shall pay all tap-in, connection
and similar charges imposed by any utility provider in connection with the
completion of the Building Shell Work.
SS.2.08 LANDLORD REPAIR, MAINTENANCE, RESTORATION AND REPLACEMENT OLIGATIONS
During the Lease Term and any Renewal Term(s), and notwithstanding anything
to the contrary in SECTION 2.04, Landlord shall, at its sole cost and expense:
(i) maintain in good operation, order, condition and repair, as and when needed,
the exterior surface of the Building (including roof and all curtain wall
systems (including glass, but excluding routine cleaning thereof), all
structural parts of the Building, both exterior and interior, including, without
limitation, floor slabs (unless overloaded by Tenant), and all utility lines
from the point of access at the street (or other junction) to the Building; (ii)
make all Major Repairs (as defined below) and replacements to the Building and
the Lot 1B RUA (and portions thereof) requiring Major Repairs or replacements
thereof, including, but not by way of limitation, mechanical systems, heating,
ventilating and air-conditioning systems; elevators; fire sprinklers; electric
distribution, plumbing and other utility systems, concrete flat work and curbs,
concrete and/or asphalt parking lots and driveways, and the fire alarm panel
(but excluding any security/card access system which shall be replaceable, if
replaced, at Tenant's sole cost and expense). As used herein, "Major Repair" and
"Major Repairs" shall mean repairs to any system or component thereof whereby
the cost to repair such system or component, as applicable, exceeds fifty-five
percent (55%) of the cost to replace such system or component, as applicable.
("Capital Expenditures" or "Capital Expenses" shall mean all expenditures made
or to be made for Major Repairs and replacements.)
Under no circumstances shall Tenant have any obligation to pay any of the
following costs and expenses (either directly or indirectly by way of
assessments under the Indenture or the Sub-Indenture) associated with the
Project (whether considered Capital Expenditures or otherwise), such costs and
expenses being the responsibility of Landlord:
(a) Costs of correction of defects in the initial construction of the
Project or costs or expenses for repairs, replacements, or improvements arising
from the initial construction of the Project to the extent such expenses are
reimbursed or reimbursable to Landlord by virtue of warranties from contractors
or suppliers;
(b) Costs of repairs, maintenance, restoration and/or replacement in
connection with the roof, structure and curtain wall (including glass) systems,
unless caused or materially contributed to by the negligence of Tenant or
Tenant's Representatives;
(c) depreciation;
(d) interest, principal payments and other costs and expenses made with
respect to mortgages and deeds of trust and other loans (secured or unsecured)
in connection with the Project, if any, or the refinancing thereof;
(e) ground lease payments;
(f) income, excess profits, franchise and/or capital gains taxes measured
by income or revenue of Landlord from the operation of the Project;
(g) salaries, wages or other compensation paid to officers or executives of
Landlord in their capacities of officers or executives;
(h) market study fees;
(i) any monies paid by Landlord because it is in default under any kind of
agreement;
(j) salaries, wages or other compensation and related expenses paid to
employees of Landlord who are not assigned to the operation, management,
maintenance or repair of the Project;
(k) Landlord's general corporate overhead;
(l) costs for repairs or restoration or for damage to persons and/or
property, including, without limitation, the Project, for which Landlord
receives insurance benefits or should have received insurance benefits if it had
carried insurance for a covered loss as in this Lease specifically provided
(except for the amount of any insurance deductible);
(m) repairs or other work occasioned by the exercise of the right of
eminent domain;
(n) except as herein otherwise specifically provided, costs or expenses
associated with bringing the Project into compliance with any local, State or
Federal law enacted subsequent to the Commencement Date;
(o) costs relating to maintaining Landlord's existence, either as a
corporation, partnership, or other entity such as annual fees, partnership
organization or administration expenses, deed recordation expenses, legal and
accounting fees (other than with respect to Project operations);
(p) fines or penalties resulting from violations of laws, or governmental
rules, regulations or agreements by Landlord;
(q) overhead and profit paid to subsidiaries or affiliates of Landlord for
services on or to the Project, to the extent only that the costs of such
services exceed competitive costs for such services where they were not so
rendered by a subsidiary or affiliate;
(r) real estate brokers' leasing commissions or compensation, advertising
expenses or any other expenses in leasing space in the Building;
(s) costs attributable to other tenant's space in the Building, including,
without limitation, utility costs and expenses, alterations, capital repairs or
replacements and repair and maintenance costs and expenses; and
(t) costs of initial capital improvements to Riverport or to the Common
Property (unless Tenant consents to a Special Assessment therefor as in SECTION
1.03 hereof provided).
In the event of any dispute between Landlord and Tenant as to whether any
system or component thereof requires a Major Repair or replacement, such matter
shall be submitted to Dispute Resolution as provided in SECTION 3.22 hereof.
SS.2.09 BROKERAGE COMMISIONS
Tenant warrants that it has had no dealings with any real estate broker or
agent except Grubb & Ellis/Krombach Partners in connection with this Lease.
Landlord warrants that it has had no dealings with any real estate broker or
agent except Duke Realty Services, Inc. in connection with this Lease. Landlord
agrees to pay Grubb & Ellis/Krombach Partners a leasing commission equal to the
sum of Three Hundred Sixty-Eight Thousand, Nine Hundred Sixty-Two and 96/100
Dollars ($368,962.96), one-half (1/2) of which shall be payable within thirty
(30) days of the execution of this Lease and the remaining one-half (1/2) of
which shall be payable within thirty (30) days of the Commencement Date. Tenant
agrees to indemnify and hold Landlord harmless from and against any actions,
suits, or claims (including, without limitation, reasonable legal fees, costs
and expenses) for a brokerage, finder or other commission or fee arising out of
any dealings had by Tenant with any broker or finder concerning the renting of
the Project to Tenant other than Grubb & Ellis/Krombach Partners. Landlord
agrees to indemnify and hold Tenant harmless from and against any actions, suits
or claims (including, without limitation, reasonable legal fees, costs and
expenses) for a brokerage, finder or other commission or fee arising out of any
dealings had by Landlord with any broker or finder concerning the renting of the
Project to Tenant.
SECTION III. GENERAL PROVISIONS
SS.3.01 DAMAGE OR DESTRUCTION
In the event the Project is damaged or destroyed in whole or in part due to
fire or other casualty during the Lease Term or any Renewal Term, Landlord and
Tenant shall promptly meet and confer and attempt to mutually agree in writing
with regard to the percentage of the Project damaged or destroyed and the time
(inclusive of any reasonable period of insurance adjustment) within which the
damage or destruction can be repaired, restored and/or replaced (hereinafter in
this SECTION 3.01 together and individually as the content so requires, called
"repaired"). For purposes of determining such time of repair there shall be
included therein the time required to repair those portions of the Project
reasonably necessary for Tenant's use or occupancy of the Project such as, but
not limited to, HVAC, electrical, mechanical and plumbing systems and those
portions of the Project which afford access thereto. If the Landlord and Tenant
cannot agree upon the percentage of the Project damaged or destroyed and/or the
time within which the Project can be repaired within thirty (30) days after the
date of the damage or destruction, Landlord and Tenant shall immediately submit
the unresolved issues to The Henderson Group, the Building Architect, or a like
architectural firm acceptable to Landlord and Tenant, which shall render an
opinion in writing at the earliest reasonably practical date binding on Landlord
and Tenant, with the costs of said opinion being borne equally by Landlord and
Tenant. In the event the parties are unable to agree upon an architectural firm,
in the event the Henderson Group is unable or unwilling to act as hereinbefore
provided, then the selection of the alternative architectural firm shall be
submitted for Dispute Resolution as in SECTION 3.22 hereof provided.
In the event the damage or destruction of the Project is total, Landlord or
Tenant may elect to terminate the Lease as to all of the Project by giving
written notice to the other within thirty (30) days after the agreement of the
parties or after receipt of the architect's opinion, as aforesaid (hereinafter
the "Damage Determination Date"). For purposes hereof, a total destruction shall
be defined as damage or destruction which leaves at least seventy-five percent
(75%) of the Leased Premises in the Building unfit for use or occupancy by
Tenant. In the event of such a total destruction of the Project and neither
Landlord nor Tenant elects to terminate as hereinabove provided, or in the event
there is not such a total destruction of the Project, the following shall
govern:
(a) if the damage or destruction to the Project cannot reasonably be
repaired within two hundred and ten (210) days of the date of the occurrence of
the casualty, Tenant may elect, by giving written notice to Landlord within
thirty (30) days of the Damage Determination Date, to terminate this Lease as to
all of the Project (but not less than all of the Project), effective as of the
date of the occurrence of the casualty;
(b) if the Project can be repaired within two hundred ten (210) days of the
date of the occurrence of the casualty or if this Lease is not terminated by
reason of such casualty as aforesaid, then Landlord shall repair and restore the
Project (including specifically, but not limited to, the Building, the Tenant
Improvement Work, Tenant Improvements By Tenant and the parking and access areas
on the Restricted Use Areas, the Common Property and the Common Ground) at
Landlord's expense, with all reasonable speed and promptness, subject to Force
Majeure Delays and Tenant Delays; provided, however, that Landlord shall not be
required to restore any alterations, additions, or improvements made by or for
Tenant which would not belong to Landlord upon the expiration of this Lease nor,
since Tenant has the obligation hereunder for providing adequate insurance as in
SECTION 3.11 hereof provided, shall Landlord be required to expend sums in so
doing in excess of available insurance proceeds. Rent shall abate
proportionately during the period from the date of casualty to the date repairs
required to be made by Landlord are Substantially Completed and to the extent
that the Project is unfit for use or cannot practicably be used by Tenant in the
ordinary conduct of its business due to damage which is Landlord's obligation to
repair. Landlord agrees that all proceeds from insurance payable with respect to
said damage shall be payable to a Trustee (mutually acceptable to Landlord and
Tenant and they agree that the holder of any first trust deed on the damaged
property if an insurance company, bank or federally insured savings bank, is
acceptable to them) under an insurance trust arrangement whereby said Trustee
(or its designated agent or representative) is required to distribute the
proceeds directly to those contractors and others performing the restoration
work on a percentage of completion basis [with a retention, however of not less
than five (5%) percent]. The exact terms of said insurance trust arrangement
shall be mutually agreed to by and between Landlord and Tenant, which agreement
neither Landlord nor Tenant shall unreasonably withhold or delay. Landlord shall
cause each mortgage or deed of trust encumbering the Project to permit the
application of insurance proceeds as required under this Lease;
(c) the foregoing notwithstanding, if said damage or destruction should
occur within the last two (2) years of the Lease Term [as said term may by the
terms hereof be extended (whether before or after the date of said damage)]
which shall render more than fifty percent (50%) of the Leased Premises in the
Building unfit for use or occupancy by Tenant, then either Landlord or Tenant
may exercise the right to terminate this Lease as of the date of such casualty
upon not less than thirty (30) days written notice to the other.
S.3.02 RULES AND REGULATIONS
Tenant shall obey all rules and regulations of Landlord contained and set
forth on EXHIBIT 3.02 hereof and all rules and regulations of the Riverport
Trustees (if any, from time-to-time promulgated strictly in accordance with the
terms of the Indenture by said Trustees) from time-to-time applicable to the
Project, provided, however, said rules and regulations shall in no wise be
construed to modify or amend this Lease in any way. If there is any conflict
between the terms of this Lease and any such rules and regulation, the terms of
this Lease shall prevail. Landlord shall use all reasonable efforts to assure
that any said rules and regulations, if any, shall be consistently and uniformly
enforced. Landlord shall not be liable to Tenant for failure of any tenant
(including Tenant) to obey any such rules and regulations. Tenant shall prohibit
smoking within the Building except in areas specifically designated by Tenant
for smoking and any area designated for smoking within the Building must be
equipped with a ventilating system with direct exhaust to the outdoors. Smoking
outdoors shall be allowed in areas mutually acceptable to Landlord and Tenant
only. Tenant shall take reasonable efforts to enforce the aforesaid
non-smoking/smoking provisions.
SS.3.03 QUIET ENJOYMENT
Landlord agrees that so long as this Lease remains in full force and
effect, Tenant shall peacefully and quietly have, hold and enjoy the Project and
accretions, easements, rights of way, appurtenances and rights and rights of use
in this Lease specifically described, subject, nevertheless, to the obligations
of this Lease. Tenant's use of the Project shall not unreasonably interfere with
the rights of owners and tenants of adjoining properties to peacefully and
quietly have, hold and enjoy their properties.
SS.3.04 RIGHT OF ENTRY
Landlord and its agents shall have the right to enter the Land, and/or the
Building, and/or the Leased Premises at all reasonable hours (with reasonable
advance notice, except in the case of emergencies) for the purpose of examining
the same, or for making any repairs, alterations or additions which it is
required to make under this Lease or which it shall reasonably deem necessary
for the safety or maintenance of the Project. In order to assure Landlord's
access for the purposes aforesaid, (i) all locks in and about the Project shall
be appropriately mastered and mastered access shall be provided to Landlord,
(ii) Tenant shall not change any locks in and about the Project without notice
to and the prior consent of Landlord, (iii) all keying changes shall be at the
sole and separate cost of Tenant, and (iv) Tenant, at its sole cost and expense,
shall provide Landlord with an adequate supply of security/access cards.
Landlord shall use due diligence with respect to the making of such repairs,
alterations or additions and shall perform such work, except in case of
emergency, at times reasonably convenient to Tenant and otherwise in such a
manner as will not materially interfere with Tenant's use and enjoyment of the
Project.
SS.3.05 ASSIGNMENT AND SUBLETTING
Tenant shall not sublet the Leased Premises or any part thereof, nor assign
this Lease or any interest therein, without the written consent of Landlord
(which consent shall not be unreasonably withheld, conditioned or delayed), and
shall not suffer or permit any assignment or transfer by operation of law or
otherwise of the estate or interest of Tenant in the Leased Premises acquired
in, by or through this Lease (and the transfer of the shares of stock of Tenant,
a publicly traded company, shall not be deemed to be such an assignment or
transfer). Any request by Tenant to assign or sublease shall be in writing and
accompanied by (i) a true copy of the proposed documents of assignment or
subletting, and (ii) information respecting the responsibility, reputation,
financial condition and business of the proposed assignee or subtenant. Such
request shall create in Landlord an option to terminate this Lease as to the
portion of the Leased Premises covered by the request and if terminated by
Landlord shall reduce Tenant's obligations hereunder in proportion to the
portion so terminated. Said option must be exercised within twenty (20) days
after receipt of such request, and if exercised, Landlord shall not thereafter
lease all or any portion of the Building to the proposed assignee or sub-tenant
during the remaining term of this Lease. Notwithstanding any consent by Landlord
to an assignment or subletting, the Tenant shall remain jointly and severally
liable (along with each approved assignee or subtenant who shall automatically
become liable for all obligations of Tenant hereunder) and Landlord shall be
permitted to enforce the provisions of this instrument directly against the
undersigned Tenant and/or assignee or subtenant without proceeding in any way
against any other person.
In the event that Tenant shall assign or sublet the Leased Premises with
Landlord's consent for a rental in excess of the rent provided for herein, then,
notwithstanding any other provision contained in this Lease to the contrary,
Tenant shall pay to Landlord as Additional Rent hereunder fifty percent (50%) of
such "excess" rent actually received (and Tenant shall be entitle to keep the
remaining 50% of such "excess" rent). In determining whether the rental is in
excess of the rent provided for herein, however, there shall be no Tenant
Improvement Allowance in connection with any such work. Tenant's actual and
reasonable out-of-pocket costs and expenses associated with the sublease and/or
assignment, including brokerage fees, fit-up costs, legal fees and rent
concessions, shall be deducted from the rent or other consideration received or
to be received.
Notwithstanding the above, Tenant may assign or sublet the Leased Premises,
or any portion thereof, without Landlord's consent, to any entity which
controls, is controlled by or is under control with Tenant, or to any entity
resulting from a merger or consolidation with Tenant, or to any person or entity
which acquires all the assets of Tenant as a going concern of the business that
is being conducted in the Leased Premises or to any affiliate, provided,
however, that Tenant shall remain jointly or severally liable for all covenants
hereunder as above provided. For purposes hereof, "affiliate" shall mean any
entity in which Tenant has an ownership interest of fifty percent (50%) or more.
SS.3.06 TENANT IMPROVEMENTS
No alteration, addition, improvement or refinishing of or to the Project
nor any installation or use of any air conditioning unit, security system,
boiler, furnace, or any other similar apparatus having in any case aforesaid a
material adverse affect upon the structural elements of the Building and/or the
Building's plumbing, HVAC, electrical, life safety, security/card access and/or
other primary Building systems shall be made by Tenant without the prior written
consent of Landlord, which consent shall not be unreasonably withheld, delayed
or conditioned; provided, however, this shall not prevent Tenant from installing
or having installed its furniture and fixtures or vending machines. It shall not
be unreasonable for Landlord to require that any and all such alterations,
additions, improvements and/or refinishing be performed by Landlord's affiliate
as the General Contractor and in this regard the terms and conditions set forth
in SECTION 1.10 hereof with respect to the Tenant Improvement Work so far as
reasonably practicable, including specifically, but not limited to, the
obligation of Landlord's affiliate to obtain not less than 3 competitive bids
and the provisions thereof with respect to the fee of Landlord's affiliate) (and
in addition thereto Landlord's affiliate must be capable of performing any such
work in a timely manner) shall apply; provided at the time of seeking Landlord's
consent, Tenant shall obtain from Landlord Landlord's decision as to whether the
proposed alteration, addition, improvement or refinishing (other than trade
fixtures and personal property of Tenant) shall be required by Landlord to be
removed by Tenant or whether such alteration, addition, improvement or
refinishing may remain upon the expiration or other sooner termination of this
Lease. If Landlord conditions its approval upon the removal of the alteration,
addition, improvement or refinishing as aforesaid, the Tenant shall, upon
Landlord's request at or about the termination of the Lease, remove same, at
Tenant's cost. In all events, the cost of any such work shall include a
reasonable amount to provide Landlord with a complete set of "as built" drawings
in CADD format and on a diskette readable by Landlord (including architectural,
structural, mechanical, electrical, plumbing and fire protection, where
applicable) of any such material alterations, additions or improvements made to
the Project, and a wiring schematic for all voice and data cabling. Tenant's
furniture, furnishings, trade fixtures, moveable equipment and other like
property shall not be deemed to be improvements to the Project and may be
removed and/or replaced by Tenant at any time during the Lease Term.
Notwithstanding the foregoing, Landlord's consent shall not be required for, and
Tenant shall not be required to use Landlord (or any affiliate of Landlord) as a
General Contractor with respect to, (i) the installation or removal of Tenant's
furniture, fixtures or equipment or (ii) any decorating or redecorating,
including, without limitation, painting, wallpapering, carpeting or tiling. In
addition, Tenant shall not be required to use Landlord (or any affiliate of
Landlord) (but shall be required to obtain Landlord's prior consent, which shall
not be unreasonably withheld, conditioned or delayed) in connection with the
moving from time-to-time of non-structural interior walls and doors, providing
such movements do not affect in excess of five percent (5%) of the
non-structural interior walls and doors then in the Leased Premises. Anything
herein to the contrary notwithstanding, all voice and data cabling installed by
Tenant or for its account at anytime during the Lease Term (including that
installed during the initial Tenant Improvement Work) shall be removed and the
ceiling shall be restored by Tenant at the expiration of this Lease, at Tenant's
cost.
SS.3.06-1 MECHANIC'S LIENS
Tenant shall not permit any mechanic's lien to be filed against any part of
the Project or against the Tenant's leasehold interest therein by reason of
work, labor, services or materials supplied or claimed to have been supplied to
the Tenant or anyone holding any part of the Project through or under the
Tenant, whether prior or subsequent to the Commencement Date. If any such
mechanic's lien shall at any time be filed against any part of the Project and
Tenant shall fail to remove same or fail to give adequate security therefor by
bonding or otherwise within sixty (60) days after Tenant receives notice
thereof, it shall constitute an Event of Default under the provisions of this
Lease.
SS.3.06-2 WASTE AND MISUSE
During the term of this Lease, Tenant shall neither commit nor permit any
waste, misuse or neglect of any part of the Project and/or its apparatus or
appurtenances by its officers, directors, employees, agents, contractors,
representatives, guests and/or invitees, nor will Tenant permit any abuse or
destructive use of same and shall pay for all damages caused by any such waste,
misuse, neglect, abuse or destructive use by Tenant, its officers, directors,
employees, agents, contractors, representatives, guests and/or invitees. When
leaving the Building at the close of business, or at other times when the
Building is unoccupied, Tenant shall cause all means of access to the Building
to be reasonably and adequately secured.
SS.3.07 DEFAULT
The following shall be deemed to be "Events of Default" by Tenant under
this Lease:
SS.3.07-1 FAILURE TO PAY RENT
If Tenant shall fail to pay any installment of Rent or any part thereof, or
shall fail to pay any item of Additional Rent or any other monetary obligation
hereunder and such failure shall continue for ten (10) days after written notice
thereof from Landlord, except to the extent permitted under SECTION 3.07-8 of
the Lease; or
SS.3.07-2 FAILURE TO PERFORM TERMS
If Tenant shall fail to perform any of the terms, covenants, or conditions
of this Lease, other than those specified in SUBSECTION 3.07-1 above, on the
part of Tenant to be performed or observed, and such failure shall continue for
thirty (30) days after written notice thereof from Landlord to Tenant; provided,
however, that no Event of Default shall be deemed to occur so long as the curing
of such default reasonably may not be completed within such thirty (30) day
period and Tenant has commenced to cure such default and thereafter with
reasonable diligence pursues its efforts to cure to conclusion; or
SS.3.07-3 VACATION OR ABANDONMENT
If Tenant shall vacate or abandon the Project in its entirety and permits
the same to remain unoccupied and unattended for more than ninety (90) days,
unless such condition is caused by Force Majeure or Tenant has given Landlord
written notice of its intent to vacate and has provided Landlord commercially
reasonable assurances of its intent to continue to perform all of the
obligations of this Lease to be performed by Tenant; or
SS.3.07-4 EXECUTION OR ATTACHMENT LIEN
If an execution or attachment lien shall be issued against Tenant's
interest in the Project or any property located therein, and such execution or
attachment shall not be vacated or removed by Court Order, bonding or otherwise,
within a period of thirty (30) days after the issuance thereof; or
SS.3.07-5 INSOLVENCY
If Tenant becomes insolvent, makes an assignment for the benefit of
creditors, or makes a transfer in fraud of creditors, any of which materially
affects Tenant's ability to perform the terms and conditions of this Lease; or
SS.3.07-6 BANKRUPTCY
If any petition shall be filed against Tenant in any court, whether or not
pursuant to any statute of the United States or any State, in any bankruptcy,
reorganization, or insolvency proceedings, and Tenant shall thereafter be
adjudicated a bankrupt, or such petition shall be approved by the Court, or if
such proceedings shall not be dismissed within ninety (90) days after the
institution of the same, or if any such petition shall be so filed by Tenant.
SS.3.07-7 REMEDIES ON DEFAULT
Upon the occurrence of an Event of Default, Landlord, without further
notice, may (in addition to and/or as an alternative to all other legal and/or
equitable remedies):
(a) Terminate this Lease and thereupon all of Landlord's and Tenant's
rights and obligations one to the other hereunder (including specifically but
not limited to Tenant's right to possession of the Project) shall cease; or
(b) Terminate only the Tenant's right to possession of the Project, without
terminating this Lease or releasing Tenant in whole or in part from Tenant's
obligations hereunder for the full term hereof; or
(c) Without terminating this Lease or Tenant's right to possession of the
Project, enter upon any portion of the Project and do and perform whatever
Tenant is obligated to do under the terms of this Lease.
In the event Landlord exercises its right under SUBPARAGRAPH (A) OR (B)
immediately above, Landlord may expel and remove Tenant, or any other person or
persons in occupancy of the Project, together with their goods and chattels.
In the event Landlord shall elect to exercise its rights under SUBPARAGRAPH
(B) immediately above, (i) Landlord may, at its option, accelerate the entire
amount then remaining unpaid under the Lease and recover the net present value
thereof [using a discount rate equal to the Prime Rate (hereinafter defined)]
forthwith from Tenant, together with all other charges recoverable hereunder
(including, but not limited to, the unamortized portion of the Tenant
Improvement Allowance, the Tenant Design Allowance, the Tenant Signage Allowance
and Leasing Commission paid by Landlord pursuant to SECTION 2.09 hereof (for
purposes hereof being deemed to be fully amortizing, with interest at 12%, over
the initial five (5) year Lease Term) and reasonable legal expenses and
attorney's fees and (ii) Landlord shall use its best efforts to relet the
Project or any part thereof for the account of the Tenant, to any person, firm,
or corporation for such Rent, for such term (including a term beyond the term
hereof), and upon such terms and conditions as Landlord, in Landlord's sole
reasonable discretion, shall determine, and Landlord shall apply all rents
received (including any benefits, if any, received as a result of utilization of
the Tenant Improvement Work and/or Tenant Improvements By Tenant) upon such a
reletting as follows:
(x) First to the payment of such expenses as Landlord may have incurred in
recovering possession of the Project, including reasonable legal expenses and
attorney's fees (whether or not suit is filed), and in putting the same into
good order or condition, of preparing or altering the same for rental and
reletting, and all other reasonable expenses, commissions, and charges paid,
reasonably and necessarily assumed or incurred by Landlord in or about reletting
the Project; and
(y) Then to the fulfillment of the covenants of Tenant hereunder.
If the consideration collected by Landlord upon any such reletting is not
sufficient to satisfy in full all of Tenant's covenants hereunder together with
all costs and expenses above enumerated, then Tenant shall pay to Landlord the
amount of any deficiency upon demand. Any excess consideration received (after
giving credit to Tenant for all amounts paid by Tenant to Landlord as
hereinbefore provided) shall be paid to Tenant. For purposes hereof, and
elsewhere in this Lease where specified, "Prime Rate" shall mean the rate of
interest for its preferred customers from time-to-time announced by Mercantile
Bank, N.A., or its successor, and if no such successor a bank of similar size
and standing within the St. Louis, Missouri metropolitan area.
SS.3.07-8 LANDLORD'S DEFAULT
In the event Landlord defaults in any of its obligations hereunder and no
specific remedy in the event of such a default is otherwise herein specifically
provided (any specifically provided remedies shall, in all cases, be deemed
conclusively applicable), then the remedies set forth in this SECTION 3.07-8
shall apply. If Landlord's default is the failure to pay money (a "monetary
default"), after giving not less than ten (10) days prior written notice to
Landlord in which Landlord's alleged default has been set forth with
specificity, Tenant may, if (i) Landlord has not paid said sum by the expiration
of said ten (10) day period or (ii) within said ten (10) day period filed suit
in a court of competent jurisdiction wherein said alleged default is contested
and a final decision has not been rendered within one hundred twenty (120) days
of the filing of said suit, deduct (set-off) said sum together with interest at
the rate of ten percent (10%) per annum from the date of the occurrence of the
uncured default in payment, from the Base Rent and Additional Rent thereafter
coming due pursuant to the provisions of this Lease. If Landlord defaults in the
performance of any obligation under this Lease other than the payment of money
to Tenant and such default continues for thirty (30) days after written notice
thereof from Tenant to Landlord; provided, however, that no default by Landlord
shall be deemed to occur so long as the curing of such default reasonably may
not be completed within such thirty (30) day period and Landlord has commenced
to cure such default within said thirty (30) day period and thereafter with
reasonable diligence pursues its efforts to conclusion [or if Landlord files
suit, as in "(ii)" above, Landlord shall be deemed to be pursuing reasonable
efforts to cure the default], then Tenant may cure such default of Landlord and
the cost thereof with interest at ten percent (10%) per annum may be deducted
from the next accruing installments of Base Rent and Additional Rent. Anything
in this Lease to the contrary notwithstanding, if at anytime after the date
hereof Landlord should consent or agree to any amendment of the Sub-Indenture,
or to any action thereunder, or to any amendment of the Resolution "...which
would affect in a material, adverse manner Tenant's rights with respect to the
Lot 1B RUA or the Common Property..." (as said rights pertain to parking and
access) (but for the purposes of this SECTION 3.07-8, parking and access rights
only) (as in SECTION 1.03 hereof provided), then the parties hereto agree that
such consent or agreement shall constitute a default by Landlord hereunder and
shall be deemed to be a "construction eviction" of Tenant from the Project,
entitling Tenant to all rights and remedies at law or in equity provided in the
case of such a "constructive eviction". The specified remedies herein shall be
non-exclusive of each other and in addition to any other remedies available to
Tenant at law or in equity.
SS.3.08 SURRENDER & TERMINATION
Upon the termination of this Lease, whether by lapse of time or otherwise,
Tenant shall, without demand, surrender and deliver up the Project peaceably to
Landlord, together with all its apparatus and appurtenances in good condition,
and, if alterations, additions or improvements are removed at Landlord's request
as in this Lease specifically provided, properly restored, ordinary wear and
tear, damage by fire or other casualty and conditions which, under the terms of
this Lease, Landlord is obligated to maintain excepted, and will surrender all
original and duplicate keys and/or cards of the several doors and such other
things as appertain to the Project. Any and all of Tenant's furniture,
furnishings, trade fixtures, moveable equipment and like property not removed by
Tenant on or about the Termination Date shall be deemed to have been abandoned
by Tenant and may be appropriated, sold, destroyed or otherwise disposed of by
Landlord without notice to Tenant or obligation to compensate Tenant or to
account to Tenant therefor, and Tenant shall pay Landlord, on demand, all costs
reasonably incurred by Landlord in connection with such abandonment. If without
Landlord's prior written consent, Tenant shall remain in possession of the
Project, or any material part thereof, one day after the termination of this
Lease, whether by lapse of time or otherwise, Tenant shall be deemed guilty of
an unlawful detainer of the Project under the statutes of the State of Missouri
and shall be subject to eviction and removal forcibly or otherwise with process
of law. After the commencement of a suit, or after final judgment, for
possession of the Project, Landlord may receive and collect any Rent due from
Tenant, and the payment of said Rent shall not waive or affect said suit or said
judgment. All rights of Landlord in the event of default herein enumerated shall
be in addition to and without prejudice to any remedy or remedies which Landlord
may have at law or in equity for nonpayment of Rent or for breaches of the
covenants and agreements hereof.
Notwithstanding the foregoing, if Tenant continues to occupy the Leased
Premises after the last day of the term hereof with Landlord's prior written
consent, unless said consent specifically otherwise provides, a monthly tenancy
terminable by either party on not less than one month's prior written notice
shall be created, which shall be upon the same terms and conditions, including
Rent, as those herein specified which are in effect immediately prior to the
termination of such term.
SS.3.09 LIABILITY
Except where caused by Landlord's negligence or the negligence of
Landlord's agents, employees, contractors and/or representatives, all of
Tenant's personal property in, at or about the Project (including but not
limited to furniture, furnishings, trade fixtures, equipment and the like) shall
be kept therein at the risk of the Tenant only, and Landlord, its officers,
directors, employees, agents and representatives shall not be liable for any
damage to said personal property occasioned by Landlord's failure(s) hereunder
nor shall Landlord, its officers, directors, employees, agents and
representatives be liable for any damage done to said personal property by or
from electric current, plumbing, gas, water, steam, sewage, odors, or the
bursting, leaking, running or failure of operation of any radiator, tank, water
closet, washstand, waste pipe, air conditioning or any other apparatus in,
above, upon or about the Project, nor for damage occasioned by water, snow, or
ice being upon any sidewalk or entranceway, or being upon or coming through such
entranceway or any skylight, roof or any other opening in said Project, nor for
loss resulting from theft or mysterious disappearance, or any interference with
light or air, nor for any damages arising from the negligence of Tenant,
co-tenants or other occupants of the Project, if any, or of any owners or
occupants of adjacent or contiguous property. Under no circumstances arising out
of or in connection with the terms and/or provisions of this Lease or the
relationship of the parties hereto hereunder, whether as Landlord and Tenant or
otherwise shall either Landlord or Tenant be liable to the other for
consequential or incidental damages.
SS.3.10 WAIVER OF SUBROGATION & MUTUAL RELEASE
Anything herein to the contrary notwithstanding, the parties hereto agree
that all rights of subrogation of their respective insurers, if any against the
other party are hereby waived and agree that each policy of insurance shall
contain a provision waiving subrogation against the other party to this Lease
regardless of whether such loss or damage is caused in whole or in part by the
negligence or sole negligence of the other party. Without regard to such
insurance or the negligence of a party, to the extent the loss or damage
suffered by a party ("Injured Party") is of the type covered by (i) the Injured
Party's insurance, (ii) the insurance that the Injured Party is required to
carry under the first paragraph of SECTION 3.11 hereof, if said coverage is for
any reason not in effect, (iii) deductibles under any of said Injured Party's
policies and/or (iv) self-insurance by the Injured Party, then the Injured Party
releases and holds the other party harmless from all damage, loss or expense
arising from losses due to the claims hereinbefore described.
SS.3.11 INSURANCE
From and after the Commencement Date of this Lease and throughout the Lease
Term and any Renewal Term(s):
Tenant shall, at its sole cost and expense, keep constantly insured against
loss or damage by fire, windstorm, earthquake, lightning, malicious mischief,
vandalism and those perils insured from time-to-time in a so-called "all-risk"
form extended coverage insurance endorsement, boiler insurance contracts and
sprinkler leakage insurance contracts generally issued in the State of Missouri,
the Land, the Building and the Lot 1B RUA (but not the Common Property other
than the Lot 1B RUA) and all other improvements which shall from time-to-time
constitute a part of the Land, the Building and the Lot 1B RUA (including
coverage for the Tenant Improvement Work and Tenant Improvements By Tenant) in
an amount equal to the full replacement value thereof, excluding foundation and
excavation costs (the "Property Insurance"). The Property Insurance policy(ies)
shall name Landlord as the primary insured and any lender of Landlord, Tenant
and the assignees of either as additional insureds, as their interests may from
time-to-time appear. If Landlord and Tenant shall be unable to agree upon the
amount of insurance to be carried by Tenant in compliance with the foregoing
requirements, either party may give the other written notice that an independent
determination is desired, and in such event the amount of insurance to be
maintained shall be determined by an insurance appraisal or contractor's
estimate. Neither party shall seek to have such an independent determination
made more frequently than once every three (3) years. In the event Tenant fails
to pay the premiums for the insurance required by the terms hereof by Tenant to
be paid, Landlord may pay said premiums (but shall not be required to do so),
and, in such event, Tenant shall reimburse Landlord for such premiums as
Additional Rent.
Tenant shall, at its sole cost and expense, throughout the term of this
Lease keep (or cause to be kept) in force liability insurance granting coverage
to Landlord and Tenant and their respective partners, directors, officers,
employees, agents, contractors and representatives in an aggregate amount of not
less than Ten Million ($10,000,000.00) for bodily injury and for damage to
property. The amount hereinbefore set forth shall be increased at least once
every five (5) years during the term of this Lease, as and if extended, by a
factor equal to one (1) plus the increase in the CPI as herein defined. For
purposes hereof (and otherwise in this Lease) the "CPI" is defined as follows:
Consumer Price Index, All Urban Consumers, U.S. City Average, All Items,
1982-1984 = 100 or most current base converted to 1982-1984 = 100, using Bureau
of Labor statistics conversion form should 1982-1984 = 100 no longer be
published. (For reference purposes, December, 1997 equals 161.3).
All insurance provided for under this SECTION 3.11 shall be effected with
insurers authorized to do business in the State of Missouri and rated by Best's
Insurance Reports in its most recent edition or other comparable rating agency
as "A" or better. Each said policy of insurance shall provide that the same may
not be canceled or renewal refused without at least thirty (30) days prior
written notice to Landlord.
Upon commencement of the Lease Term and on or before the expiration dates
of expiring policies, originals or certificates of the policies provided for in
this SECTION 3.11 shall be delivered to Landlord.
Tenant may satisfy the foregoing requirements by means of blanket policies
of insurance covering the subject premises and other property, but having the
same coverage and provisions as are herein required. If such blanket insurance
is furnished, Tenant shall deliver a certificate from the insurer in standard
form stating that the coverage is primary to the Project, the Land, the Building
and/or the Lot 1B RUA, as the case may be, and that the amount and type of
coverage(s) shall not be subject to reduction by reason of other losses covered
by the policy.
SS.3.12 REMEDIES & ENFORCEMENT
All of the remedies herein are cumulative, and given without impairing any
other rights or remedies of either party hereto hereunder, at law or in equity
and Landlord and Tenant, as the case may be, shall pay and discharge all
reasonable costs, expenses and attorneys' fees that shall arise from the
successful enforcement of the covenants of this Lease by the other. Whenever
attorneys' fees are recoverable by the terms hereof, same shall be recoverable
irrespective of whether fees were incurred by either Tenant's or Landlord's
in-house counsel, provided, however, in every case said fees shall be reasonably
comparable to fees which would otherwise have been paid or payable to Tenant's
or Landlord's outside counsel. The fact that a party hereto does not exercise
its right hereunder in the event of breach of covenant herein by the other shall
not be deemed a waiver of such rights as to subsequent breaches.
SS.3.13 BENEFITS
All the terms of this Lease shall extend to and be binding upon the
respective heirs, executors, administrators, successors and assigns of the
respective parties hereto and their permitted successors and assigns. Nothing in
this Lease shall be construed to grant to any person or entity not a party to
this Lease any rights and/or benefits hereunder. Landlord and Tenant each
acknowledge and agree that all of the covenants and conditions set forth in the
Lease are mutual and dependent and have been given in reliance of one another.
SS.3.14 CONDEMNATION
If all of the Project is taken by condemnation, this Lease shall terminate
on the date so taken, and the Rent shall be apportioned as of that date. If part
of the Project is taken by condemnation and (i) the Project is thereby rendered
not reasonably suitable for the continued conduct of Tenant's business, as
determined by Tenant in its good faith judgment, taking into consideration the
nature, size and scope of such business immediately prior to the taking, (ii)
more than 100 parking spaces (in the aggregate) are taken within the Restricted
Use Areas (and the Common Property other than the Restricted Use Areas), or
(iii) more than ten thousand (10,000) RSF of the Building Leased Premises is
taken, then Tenant may elect, by giving thirty (30) days written notice to
Landlord, to terminate this Lease and in the event of such termination, all
Rent, Additional Rent and/or other charges hereunder shall be apportioned as of
the date of said taking. If Tenant does not elect to terminate this Lease as
above-specified, then with respect to the part not taken the Rent shall be
reduced by the value that the condemned part bears to the total value of the
Project, in which event the Landlord shall promptly restore the Project
(including the Tenant Improvement Work and Tenant Improvements By Tenant) to an
architecturally complete unit. Except as otherwise provided herein, all
compensation awarded or paid upon such a total or partial taking of the Project
shall belong to and be the property of the Landlord without any participation by
the Tenant. Notwithstanding the foregoing, Tenant shall be entitled to any award
made specifically for its personal property, trade fixtures, unamortized
leasehold improvements, loss of business, business dislocation (and moving
expenses) and nothing contained herein shall be construed to preclude the Tenant
from prosecuting any claim directly against the condemning authority in such
condemnation proceedings.
SS.3.15 SUBORDINATION
At the request of Landlord, Tenant will enter into a recordable agreement
with the holder of any first mortgage or deed of trust placed against the
Project subsequent to the recording of a memorandum of this Lease making this
Lease subject and subordinate to such mortgage or deed of trust, and all
renewals, modifications, consolidations, replacements and extensions thereof,
provided that such agreement contains a covenant binding upon the mortgagee or
beneficiary, as the case may be, to the effect that so long as there shall be no
default on the part of Tenant entitling Landlord to terminate the Lease, or if
such default shall exist, so long as Tenant's time to cure such default shall
not have expired, (i) this Lease shall not be terminated or modified in any
respect whatsoever nor shall the rights of Tenant hereunder or its occupancy of
the Leased Premises be affected in any way by reason of such mortgage or deed of
trust, as applicable, or any foreclosure action or other proceeding that may be
instituted in connection therewith, and (ii) Tenant shall not be named as a
defendant in any such foreclosure action or other proceeding. Said agreement
shall also provide that with respect to matters arising under this Lease, in the
event that there shall be a conflict between the terms of this Lease and the
terms of any such mortgage or deed of trust, the terms of this Lease shall
prevail. In all other respects such agreement must be satisfactory to Tenant in
its reasonable discretion.
SS.3.16 RELEASING
At any time during the Lease Term and any Renewal Terms, upon reasonable
advance notice to Tenant and during reasonable hours, Landlord may show the
Project to prospective purchasers and/or lenders. During the last twelve (12)
months of the Lease Term if the Lease is not extended or during the last twelve
(12) months of any Renewal Term, if the Lease has not been further extended,
Landlord may show, upon reasonable advance notice and during reasonable hours,
the Project to prospective tenants and may exhibit a "For Lease" sign on the
Land and at such other reasonable location(s) at or about the Project as
Landlord shall reasonably determine. Tenant shall have the right to accompany
Landlord during any showing to any prospective purchaser, lender or tenant, and
Tenant shall have the right to limit or restrict access to such portion or
portions of the Leased Premises as may be reasonably necessary to protect
Tenant's business interests. Landlord shall not disturb, interrupt or interfere
with Tenant's business operations during any such showing.
SS.3.17 RECORDING OF LEASE
Recording of this Lease will be done by a Memorandum of Lease, in form and
substance substantially similar to EXHIBIT 3.17 hereto, only, and shall be
accomplished within thirty (30) days after the date hereof.
SS.3.18 LANDLORD'S RESPONSIBILITIES
The term "Landlord" as used in this Lease, so far as covenants or
obligations on the part of the Landlord are concerned, shall be limited to mean
and include only the owners at the time in question of the fee simple title to
the Project, and in the event of the sale of said fee simple estate, provided
the Landlord is not then in default under any material term, condition or
provision of this Lease, then the party conveying said fee simple estate shall
be automatically relieved after the date of such transfer, of all personal
liability as respects the performance of any obligations on the part of the
Landlord contained in this Lease arising out of acts thereafter occurring or
covenants thereafter to be performed, it being intended hereby that all the
obligations contained in this Lease on the part of the Landlord shall be binding
upon Landlord, its successors and assigns, only during and in respect of their
respective periods of ownership of said fee simple estate.
SS.3.19 HEADINGS & MARGINAL NOTES
It is agreed that the headings and marginal notes as to the contents of
particular paragraphs of this Lease are inserted only as a matter of convenience
and for reference, and in no way are or are intended to be a part of this Lease,
nor in any way to define, limit or describe the scope or intent of the
particular paragraph to which they refer. Where in this instrument pronouns or
words indicating the singular number appear, such words shall be considered as
masculine, feminine or neuter pronouns or words indicating the plural number
where the context indicates the propriety of such use.
SS.3.20 CONSENT NOT UNREASONABLY WITHHELD
Unless otherwise specifically provided, whenever consent or approval of
Landlord or Tenant is required under the terms of this Lease such consent or
approval shall not be unreasonably withheld, conditioned or delayed. If either
party withholds any consent or approval, such party shall, on written request,
deliver to the other party a written statement giving the reasons therefor.
SS.3.21 ESTOPPEL CERTIFICATE
Both Landlord and Tenant agree from time-to-time within thirty (30) days
after request of the other [but not more often than two (2) times during a Lease
Year], to deliver to the other, or its designee, an estoppel certificate stating
that this Lease is in full force and effect, the date to which Rent has been
paid, the unexpired term of this Lease and such other matters pertaining to this
Lease as may be reasonably requested. It is understood and agreed that the
obligation to furnish such estoppel certificate in a timely fashion is a
material inducement for the execution of this Lease.
SS.3.22 DISPUTE RESOLUTION
Either party hereto may from time-to-time notify the other party of the
need to use the dispute resolution procedure contained in this SECTION 3.22 to
resolve a controversy arising hereunder that has not, as of that date, been
capable of resolution by negotiations between the parties (herein "Dispute
Resolution"). If the management of the parties have not resolved all relevant
issues within ten (10) days of the notice invoking this Section (or such shorter
time as the foregoing provisions of this Lease would specifically mandate), then
the unresolved issues shall be submitted for the personal consideration of
Landlord's President or Landlord's Executive Vice President Office (or a like
top executive position of Landlord) and Tenant's President or Tenant's Executive
Vice President (or a like top executive position of Tenant) (the "Decision
Makers"), who shall meet to discuss them within ten (10) business days
thereafter. If the Decision Makers are not able to resolve all the open issues
within ten (10) business days of their initial meeting hereunder, then the
parties hereto shall thereafter have the right to take any action permitted
under this Lease or permitted under law or in equity to resolve such dispute.
SS.3.23 ARBITRATION
Landlord and Tenant MAY agree to have claims, disputes and other matters in
question arising out of or relating to this Lease or any breach or default
hereunder, decided by arbitration in the manner hereinafter provided and upon
such an agreement the remedy of bringing an action in specific performance in a
court of competent jurisdiction as elsewhere herein provided or as provided at
law or in equity shall be abrogated, although an arbitrator(s) shall have the
right to order specific performance and if so ordered an action may be brought
in a court of competent jurisdiction for specific performance of such order.
The parties hereto SHALL NOT be deemed to have agreed to determine any
dispute arising out of this Lease by arbitration unless specifically provided
herein. In any circumstances where the parties have agreed herein or agree in
writing to arbitrate a dispute with respect to this Lease, the original party so
desiring arbitration shall give notice to that effect to the other party and to
the American Arbitration Association (the "AAA") requesting appointment by the
AAA, or its successor, of an arbitrator to arbitrate the submitted dispute at
St. Louis, Missouri or at such other location as the parties hereto may mutually
agree.
The arbitration shall be conducted, to the extent consistent with this
SECTION 3.23 and other applicable provisions of this Lease, in accordance with
the then prevailing rules of the AAA or such other procedures as are agreed to
by the parties hereto. The arbitrator shall render his/her decision and award in
writing, within thirty (30) days after his/her appointment. Such decision and
award shall be final and conclusive on the parties, and counterpart copies
thereof shall be delivered to each of the parties. In rendering such decision
and award, the arbitrator, shall not add to, subtract from or otherwise modify
the provisions of this Lease. Judgment may be had on the decision and award of
the arbitrator so rendered in any court of competent jurisdiction. The fees and
expenses of the arbitration (including the fees and expenses of the arbitrator)
(other than the fees and disbursements of attorneys or witnesses for each party)
shall be borne by the parties equally.
The legend above the signature blocks below shall not be construed to
require arbitration of any claim, dispute, breach, default or other matter under
this Lease, except for a disagreement as to the Effective Market Base Rent rate
as provided in and in accordance with SECTION 2.02, if the parties do not
otherwise agree to arbitrate such matter.
SS.3.24 ENTIRE AGREEMENT
This Lease constitutes the sole and entire contract between the parties
relative to the Project. No representations as to the Project have been made by
the Landlord to the Tenant either directly or indirectly prior to or at the
execution of this Lease that are not herein expressed. The terms, covenants, and
conditions of this Lease may not be changed orally but only by an instrument in
writing signed by the party against whom enforcement of the change is sought.
IN WITNESS WHEREOF, the parties have executed this Office Lease as of this
14th day of August, 1998, it being agreed that the Lease relates to property
in the State of Missouri and shall be construed in accordance with the laws
thereof.
THIS OFFICE LEASE CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE
ENFORCED BY THE PARTIES.
LANDLORD
DUKE REALTY LIMITED PARTNERSHIP,
an Indiana limited partnership
By: DUKE REALTY INVESTMENTS, INC.,
an Indiana corporation,
its general partner
By: /s/ W. Gregory Thurman
W. Gregory Thurman
Vice President and General Manager
St. Louis Office Group
(Seal)
Attest:
/s/ James D. Eckhoff
James D. Eckhoff
Vice President and Assistant Secretary
TENANT
EXPRESS SCRIPTS, INC.,
a Delaware corporation
By:/s/ Barrett Toan
Barrett Toan
President
(SEAL)
ATTEST:
/s/ Thomas M. Boudreau
Secreaty
Title
LANDLORD:
STATE OF MISSOURI )
) SS.
COUNTY OF ST. LOUIS )
On this 14th day of August, 1998, before me appeared W. GREGORY THURMAN,
to me personally known, who, being by me duly sworn did say that he is the Vice
President and General Manager, St. Louis Office Group, of DUKE REALTY
INVESTMENTS, INC., a corporation of the State of Indiana, and General Partner in
DUKE REALTY LIMITED PARTNERSHIP, and that the seal affixed to the foregoing
instrument is the corporate seal of said corporation, and that said instrument
was signed and sealed on behalf of said corporation, by authority of its Board
of Directors; and said W. Gregory Thurman acknowledged said instrument to be the
free act and deed of said corporation and said partnership.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official
seal in the County and State aforesaid, the day and year first above written.
/s/ Kathleen M. Dolan
Notary Public
TENANT:
STATE OF MISSOURI )
) SS.
COUNTY OF ST. LOUIS )
On this 14th day of August, 1998, before me appeared Barrett Toan, to me
personally known, who, being by me duly sworn did say that he is the President,
of EXPRESS SCRIPTS, INC., a corporation of the State of Delaware, and that the
seal affixed to the foregoing instrument is the corporate seal of said
corporation, and that said instrument was signed and sealed on behalf of said
corporation, by authority of its Board of Directors; and said Barrett Toan
acknowledged said instrument to be the free act and deed of said corporation.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official
seal in the County and State aforesaid, the day and year first above written.
/s/ Kathleen M. Dolan
Notary Public
<PAGE>
INDEX OF EXHIBITS
1.01 Legal Description
1.03-A Restricted Use Areas and Common Property
1.03-B Declaration of Covenants, Restrictions and Easements for Access
and Parking for Property in the City of Maryland Heights,
County of St. Louis, State of Missouri known as Duke/Riverport
Site No. 1
1.03-C Resolution
1.04(f) Title Exceptions
1.06-1 Project Schedule
1.06-6 June 3, 1998 Letter Agreement
1.09-1 Building Shell Description
1.09-2 Listing of Building Plans
3.02 Rules and Regulations
3.17 Memorandum of Lease
<PAGE>
EXHIBIT 1.01
Lot 1B of Duke/Riverport Site No. 1, as per the Plat thereof recorded at
Book ____, page ____ of the St. Louis County, Missouri records.
Landlord hereby agrees that it will with dispatch cause the Re-Subdivision
Plat creating Lots 1A, 1B and 1C of Duke/Riverport Site No. 1 to be prepared,
submitted to the City of Maryland Heights, Missouri for approval and recorded.
Upon recordation, Landlord shall provide to Tenant a copy of the Re-Subdivision
Plat bearing recording information. Thereupon the Book and page of recordation
shall be inserted into this Exhibit 1.01 and the revised Exhibit 1.01 (sans this
paragraph) shall be substituted in lieu hereof.
<PAGE>
EXHIBIT 1.03A
This Exhibit contains pictorials of Restricted Use Areas and Common Property
<PAGE>
EXHIBIT 1.03-B
DECLARATION OF COVENANTS, RESTRICTIONS AND EASEMENTS
FOR ACCESS AND PARKING FOR PROPERTY
IN THE CITY OF MARYLAND HEIGHTS,
COUNTY OF ST. LOUIS, STATE OF MISSOURI,
KNOWN AS DUKE/RIVERPORT SITE NO. 1
DUKE REALTY LIMITED PARTNERSHIP, DECLARANT
August ____, 1998
INDEX
ARTICLE/SECTION PAGE
NUMBER CAPTION NUMBER
I PROPERTY SUBJECT TO DECLARATION 3
1.1 Existing Property 3
1.2 Additions To Existing Property 3
II TRUSTEES 4
2.1 Membership 4
2.2 Qualification 4
2.3 Election Of Trustees 4
2.4 Term Of Office 5
2.5 Procedures 6
2.6 Duties And Powers 6
2.7 Power To Assess 7
2.8 Eminent Domain 7
III ASSESSMENTS 8
3.1 Assessment 8
3.2 Annual Assessments For Common Property 8
3.3 Restricted Use Area Assessments 10
3.4 Special Assessments 10
3.5 Notice To Owners 10
3.6 Commencement Date Of Annual Assessment 11
3.7 Due Date Of Assessments 11
3.8 Owner's Personal Obligation For
Payment Of Assessments 11
3.9 Assessment Lien And Foreclosure 12
3.10 Common Property Exempt 13
IV COMMON PROPERTY 13
4.1 Establishment Of Common Property And Restricted
Use Areas ("RUA") 13
4.2 Easements For The Use Of Common Property And RUA 14
4.3 Title To Common Property 15
4.4 Extent Of Easements 16
4.5 Trustees Management Of Common Property 16
4.6 Maintenance Of RUA And Common Property 17
4.7 Construction Of Parking Structures and Additional
Parking Areas 21
V MISCELLANEOUS PROVISIONS 23
5.1 Duration 23
5.2 Amendment 23
5.3 Enforcement 24
5.4 Severability Of Provisions 25
5.5 Notice 25
5.6 Title 26
5.7 Singular And Plural 26
5.8 Binding Effect 26
5.9 Conflicting Terms 16
<PAGE>
THIS DECLARATION OF COVENANTS, RESTRICTIONS AND EASEMENTS FOR ACCESS AND
PARKING ("Declaration"), is made as of this ______ day of _____________, 1998,
by W. Gregory Thurman, Timothy J. McCain and Lisa G. Bulczak, Trustees of
Duke/Riverport Site No. 1 ("Trustees"), and Duke Realty Limited Partnership, a
partnership organized pursuant to the laws of the State of Indiana ("Duke
Realty").
WITNESSETH:
WHEREAS, Duke Realty is the owner of certain real property located in St.
Louis County, Missouri known as Lot 1 of Duke/Riverport Site No. 1, pursuant to
the Plat thereof recorded at Book _____ Page _____ of the St. Louis County,
Missouri Records (herein sometimes referred to as " Lot 1 of Duke/Riverport Site
No. 1" and/or the "Property"); and
WHEREAS, Duke/Riverport Site No. 1 is subject to that certain First Revised
and Restated Trust Indenture for the Property known as Riverport in the City of
Maryland Heights, County of St. Louis, State of Missouri, dated August 10, 1987,
and recorded in Book 8191, Page 380 in the St. Louis County Records, which was
amended by (i) an Amendment to the First Revised and Restated Trust Indenture
for the Property known as Riverport in the City of Maryland Heights, County of
St. Louis, State of Missouri, dated November 4, 1988, and recorded in Book 8465,
Page 1068 of the St. Louis County Records, (ii) a Second Amendment to the First
Revised and Restated Trust Indenture for the Property known as Riverport in the
City of Maryland Heights, County of St. Louis, State of Missouri, dated June 12,
1991, and recorded in Book 9013, Page 1955 of the St. Louis County Records,
(iii) another Second Amendment to the First Revised and Restated Trust Indenture
for the Property known as Riverport in the City of Maryland Heights, County of
St. Louis, State of Missouri dated July 21, 1994, and recorded in Book 10263,
Page 1872 of the St. Louis County Records, (iv) a Third Amendment to the First
Revised and Restated Trust Indenture for the Property known as Riverport in the
City of Maryland Heights, County of St. Louis, State of Missouri dated December
18, 1995 and recorded in Book 10694, Page 1868, St. Louis County Records, (v) a
Fourth Amendment to the First Revised and Restated Trust Indenture for the
Property known as Riverport in the City of Maryland Heights, County of St.
Louis, State of Missouri dated March 5, 1997 and recorded in Book 11104, Page
992, St. Louis County Records, and (vi) a Fifth Amendment to the First Revised
and Restated Trust Indenture for the Property known as Riverport in the City of
Maryland Heights, County of St. Louis, State of Missouri dated September 25,
1997 and recorded in Book 11304, Page 1396, St. Louis County Records (said Trust
Indenture, as heretofore and hereafter amended, being hereinafter referred to as
the "Riverport Indenture");
WHEREAS, Duke Realty is desirous of subjecting the said Lot 1 of
Duke/Riverport Site No. 1 to the further covenants, restriction and easements
hereinafter set forth, to insure for all present and future owners of any part
of said Lot 1 of Duke/Riverport Site No. 1 and their respective successors,
assigns, invitees, agents, employees, tenants, contractors and licensees certain
access and parking rights, each and all of which is and are for the benefit of
said Property and shall inure to the benefit of and pass with said Property and
each and every part thereof; and
WHEREAS, Duke Realty desires to hereby convey by special warranty deed
certain rights and interests in the hereinafter specified common, access and
parking areas to the Trustees hereinafter named and to define the right, title,
interests, duties, privileges, easements, and liabilities with respect thereto
and to provide for the improvement, maintenance, management, control and
operation of such common, access and parking areas for the mutual benefit of the
owners of all or any part of Lot 1 of Duke/Riverport Site No. 1.
NOW, THEREFORE, Duke Realty hereby declares that Lot 1 of Duke/Riverport
Site No. 1 and each and every part thereof, shall be held, transferred, sold,
conveyed and occupied subject to the covenants, restrictions and easements
hereinafter set forth.
ARTICLE I
PROPERTY SUBJECT TO DECLARATION
1.1 EXISTING PROPERTY. The real property which is, and shall be held,
transferred, sold, conveyed, and occupied subject to this Declaration is located
in St. Louis County, Missouri, is known as Lot 1 of Duke/Riverport Site No. 1,
and is herein sometimes referred to as such and/or the "Property," and each and
every such lot or parcel from time to time located within said Property shall be
hereinafter referred to as a "Parcel" (including, but not limited to Lots 1A, 1B
and 1C of Lot 1 of Duke/Riverport Site No. 1.
1.2 ADDITIONS TO EXISTING PROPERTY. Duke Realty, its successors or assigns,
may from time to time add to the Property now subject to this Declaration,
additional lands; provided, however, that said additions may be used only for
the same or similar purposes as the existing Property; that said additions be
contiguous to the existing Property or subsequent additions thereto; that said
additions include sufficient additional parking so that, at a minimum, the
minimum parking requirements as then prescribed by the zoning ordinances of the
City of Maryland Heights or other governmental authority having jurisdiction
over the Property will be met; and that if said additions be made by any person,
firm, or corporation other than Duke Realty or its successors and/or assigns,
that the Trustees hereinafter named give their prior written consent thereto,
which consent shall not be unreasonably withheld, conditioned or delayed. The
additions authorized under this Article I shall be made by executing and
delivering to the Trustees hereinafter named and filing of record in St. Louis
County, Missouri, a Supplementary Declaration which shall extend the provisions
of this Declaration to such additional property. Such Supplementary Declarations
may contain additional and complimentary provisions as may be necessary to
reflect the different character, if any, of the added property as are not
inconsistent with the scheme of this Declaration.
ARTICLE II
TRUSTEES
2.1 MEMBERSHIP. There is established a Board of Trustees, which shall
consist of three (3) members who shall serve without remuneration. The Trustees
shall sometimes be referred to as the "Trustees of Duke/Riverport Site No. 1" or
the "Trustees."
2.2 QUALIFICATION. Except as specifically provided otherwise, to qualify as
a member of the Board of Trustees, a person must be an Owner (as defined
herein), an officer of an Owner or the duly appointed representative of an
Owner. The owners of fee simple title to the Parcels comprising Duke/Riverport
Site No. 1 shall sometimes be referred to individually as the "Owner" and
collectively as the "Owners."
2.3 ELECTION OF TRUSTEES. The Owners of Parcels in Duke/Riverport Site No.
1 (and if additions to the Property are made as provided in SECTION 1.2 hereof,
the Owners of all Parcels then comprising the Property) shall elect the
Trustees. Each Parcel shall be entitled to a vote(s) based upon the number of
parking spaces located in the "Common Property" (but not the "Restricted Use
Areas") (as said terms are hereinafter defined) from time-to-time designated
and/or assigned by the Trustees to that Parcel in relation to the total number
of parking spaces then existing in the Common Property (but not including the
Restricted Use Areas) calculated as a percentage (hereinafter referred to as the
Owner's "Pro-Rata Interest"). Trustees shall be elected at an annual meeting of
the Owners to be called by the Trustees giving written notice to the Owners of
same at least thirty (30) days in advance. Owners of at least sixty percent
(60%) of the Pro-Rata Interest, present in person or represented by written
proxy, shall constitute a quorum for the election of Trustees. All proxies must
be in writing, signed by the voting Owner granting the proxy, and filed with the
Trustees prior to the election. The exact procedure of voting shall be as
determined by the Trustees from time-to-time consistent with the Owners'
Pro-Rata Interests. When two or more persons or entities hold an undivided
interest in any Parcel, the vote(s) for said Parcel shall be made as they among
themselves determine in their sole discretion. In all said elections, Owners may
cast their votes for as many Trustees to be elected or may cumulate their vote
and give one candidate as many votes as the number of Trustees to be elected
multiplied by the number of votes, or to distribute the votes on the same
principle among as many candidates as said Owner may see fit (cumulative
voting).
2.4 TERM OF OFFICE. The Trustees presently serving hereunder and who shall
serve until their successors are duly elected or appointed, are: W. Gregory
Thurman Timothy J. McCain Lisa G. Bulczak The term of office for each Trustee
shall be one (1) year and shall run from the first day of January through the
thirty first day of December of that year (except that the term of the Trustees
herein named shall commence on the date hereof and shall continue until December
31, 1998). Upon the expiration of the term of a Trustee, or whenever any one or
more of the Trustees or their successors appointed as herein provided shall die,
be unable to act, resign, or shall cease to have an interest in the above
described property as an Owner, an officer of an Owner, or a duly appointed
representative of an Owner, as applicable, his replacement shall be elected by
the then Owners for the remainder of his term. Should said Owners fail, within
thirty (30) days, to elect a replacement, then the remaining Trustee(s) shall
appoint an interim Trustee(s) to serve for the unexpired term.
2.5 PROCEDURES. The Trustees shall keep minutes of their proceedings. Any
Trustee may call a meeting of the Trustees upon fifteen (15) days' written
notice thereof; provided, however, that such notice may be waived by unanimous
consent of the Trustees. Any two Trustees at any meeting regularly called may
exercise the powers of the Trustees, except for actions requiring unanimous
consent hereunder. Two Trustees shall constitute a quorum. Action of the
Trustees shall be by a majority vote of the Trustees except for actions
requiring unanimous consent hereunder. The Trustees shall serve without pay,
except for expenses reasonably incurred.
2.6 DUTIES AND POWERS. The Trustees shall have the right, power, and
authority to enforce the covenants, restrictions and easements herein set forth,
to provide for the management, maintenance and any alteration or improvement of
the Common Property which they may deem necessary or desirable, to establish
such procedures and policies necessary or deemed desirable to provide for the
general welfare of the Owners and the tenants of the Owners, in accordance with
the purpose and intent of this Declaration, to enter into contracts as may be
necessary or desirable to carry out the provisions of this Declaration
(including the power to enter into long-term contracts extending beyond the term
of the Trustees then in office), and to retain the services of professionals as
deemed necessary by the Trustees. The powers of the Trustees herein set forth
are intended to augment rather than to restrict the authority of the Trustees.
Any other provision of this Declaration to the contrary, if any,
notwithstanding, the Trustees shall make suitable provision for compliance with
(i) all subdivision and other ordinances, rules and regulations of St. Louis
County, Missouri, the City of Maryland Heights, Missouri and/or such other
governmental entity then having jurisdiction over the Property, and (ii) the
Riverport Indenture.
2.7 POWER TO ASSESS. The Trustees shall have the right, power, and
authority to levy and collect assessments against the Property, as hereinafter
specifically provided, for the purpose of carrying out their powers and duties
herein specified.
2.8 EMINENT DOMAIN. In the event it shall become necessary for any public
agency to acquire all or any part of the Common Property (including the
Restricted Use Areas) conveyed to the Trustees, for any public purpose, the
Trustees are hereby authorized to negotiate with such public agency for such
acquisition and to execute instruments necessary for that purpose, including
deeds of conveyance. Should acquisitions by eminent domain become necessary,
only the Trustees need be made parties. To the extent reasonably necessary to
carry out the powers and duties herein specified, the proceeds received shall be
held by the Trustees for the benefit of those entitled to the use of the Common
Property. All excess proceeds (after deducting all reasonable expenses incurred
by the Trustees in any such eminent domain proceeding), if any, as determined by
the Trustees in their sole discretion, shall be distributed to the Owners as
their interests appear; providing, however, that if there are mortgage liens of
record, said excess proceeds shall be distributed jointly to said Owner(s) and
its lender(s). Notwithstanding the above, all excess proceeds derived from the
taking of any Restricted Use Areas (after deducting all reasonable expenses
incurred by the Trustees in any such eminent domain proceeding) shall be
distributed to the Owners to which those Restricted Use Areas have been
assigned; providing, however, that if there are mortgage liens of record, said
excess proceeds shall be distributed jointly to said Owner(s) and its lender(s).
ARTICLE III
ASSESSMENTS
3.1 ASSESSMENT. Each Owner of a Parcel in the Property by acceptance of a
deed therefor, whether or not it shall be so expressed in any such deed or other
conveyance, shall be deemed to covenant and agree to pay (i) annual assessments
or charges, not including Restricted Use Area assessments; (ii) Restricted Use
Area assessments; and (iii) special assessments, such assessments to be
established and collected from time-to-time as hereinafter provided. The
foregoing assessments shall to be in addition to any other assessments
established under this Declaration or under the Riverport Indenture.
3.2 ANNUAL ASSESSMENTS FOR COMMON PROPERTY. By December 1st of each year,
the Trustees shall estimate the expenses to be incurred by the Trustees in
connection with the Common Property (exclusive of the Restricted Use Areas)
pursuant to the terms hereof for the ensuing calendar year and shall notify each
Owner in writing as to the amount of said estimate; provided, however, a failure
by the Trustees to so estimate and notify by said date shall not relieve any
Owner from responsibility for payment of assessments. The estimated annual cash
required by the Trustees to meet its aforesaid expenses during the ensuing
calendar year shall then be assessed against the Owners according to each
Owner's Pro-Rata Interest (as defined in SECTION 2.3 hereof). On the first day
of January of each year each Owner shall be obligated to pay to the Trustees, or
as the Trustees may direct, the said annual assessment. In the event that, at
any time during the year, the Trustees shall determine that the operating
expenses to be incurred by the Trustees in connection with the Common Property
(exclusive of the Restricted Use Areas) pursuant to the terms hereof during the
remainder of the calendar year will be in excess of its December 1st estimate,
the Trustees may revise its said estimate for the balance of the calendar year
and the Trustees shall, within thirty (30) days of such revision, notify the
Owners in writing, as to the amount of the revised estimate, with the
particulars therein itemized. The revised cash required by the Trustees to meet
its aforesaid revised expenses during the remainder of the then calendar year
shall then be assessed against the Owners according to each Owner's Pro-Rata
Interest. On the first day of the following full month, each Owner shall be
obligated to pay to the Trustees the full additional annual assessment amount
due based upon the revised estimate. The first annual assessment for the Common
Property (exclusive of the Restricted Use Areas) for the initial calendar year
(or partial calendar year, as the case may be) shall be established by the
majority vote of the Trustees. Subsequent annual assessments for the Common
Property (exclusive of the Restricted Use Areas) may be increased only by
majority vote of the Trustees; provided, however, the following increases shall
be automatically assessed by the Trustees and shall not require a vote by the
Trustees or the approval of the Owners: (i) an increase of up to ten percent
(10%) of the immediately preceding annual assessment (annualized if the
immediately preceding assessment was for a partial calendar year) shall be
automatically allowed in the amount of estimated increase in the estimated cash
requirements (but not to exceed 10%), and (ii) increases due to an increase in
taxes assessed or levied against the Common Property and/or improvements to the
Common Property (exclusive in each case of the Restricted Use Areas). All other
increases in the annual assessments must also be approved by a majority of the
Owners. On or before March 31 of each calendar year, the Trustees shall
determine the actual cash expenditures for the previous year, and should a
surplus exist at the end of any calendar year (including the initial partial
calendar year), the Trustees shall reduce the next total annual assessment by an
amount equal to said surplus less amounts which the Trustees then consider
reasonably necessary as a reserve for future needs. Should there be a deficit at
the end of any year, the Trustees shall increase the next annual assessment by
an amount equal to said deficit which amount shall be paid immediately.
3.3 RESTRICTED USE AREA ASSESSMENTS. Restricted Use Area assessments may be
assessed against the Owner benefited by such Restricted Use Areas as set forth
herein by the majority vote of the Trustees and do not require the approval of
the Owners.
3.4 SPECIAL ASSESSMENTS. In addition to the annual assessments for the
Common Property (exclusive of the Restricted Use Areas) and the Restricted Use
Area Assessments herein authorized, the Trustees may, by majority vote, levy in
any assessment year or years a special assessment for the purpose of defraying,
in whole or in part, the cost of any reconstruction, unexpected repair or
replacement of any Common Property improvements, including the necessary
fixtures and personal property related thereto. Special assessments must also be
approved by a majority of the Owners; provided, however that under no
circumstances may a special assessment be made for the initial construction of
Common Property improvements, except for those improvements reasonably necessary
for the preservation and protection of the then existing Common Property,
without the unanimous consent of the Owners (or the consent of any tenant or
other person, if any, to whom the Owner or Owners of a specific Parcel have from
time-to-time specifically delegated said Owner's or Owners' specific right to so
consent in a writing placed of record with the St. Louis County Recorder of
Deeds).
3.5 NOTICE TO OWNERS. Approval by Owners as herein required may be with or
without a meeting. If without a meeting, the necessary written consent of the
Owners shall be made a part of the record of proceedings of the Trustees. If a
meeting is called for such purpose, written notice of same shall be given to all
Owners at least thirty (30) days in advance and shall set forth the purpose of
the meeting and the amount of the increase proposed or of the special assessment
and the proposed due and delinquent dates thereof as the case may be.
3.6 COMMENCEMENT DATE OF ANNUAL ASSESSMENT. The first annual assessments
provided for herein shall commence with the year 1999 and shall continue
thereafter from year to year.
3.7 DUE DATE OF ASSESSMENTS. The annual assessments shall become due and
payable on the first day of January and shall become delinquent if not paid by
the fifteenth of that month. The due date and delinquent date of any Restricted
Use Area assessment or special assessment shall be fixed in the resolution
authorizing such assessment. Should a Parcel become subject to assessments after
January 1 in any year, and should an annual or special assessment have been
levied for that year, then such assessment shall be adjusted so that such Parcel
shall be charged with that portion of the assessment prorated for the balance of
that year.
3.8 OWNER'S PERSONAL OBLIGATION FOR PAYMENT OF ASSESSMENTS. The annual
assessments, Restricted Use Area assessments and special assessments provided
for herein shall be the personal and individual debt of the Owner(s) of the
Parcel on the date same shall become due. No Owner may exempt himself from
liability for such assessments. In the event of default in the payment of any
assessment, when due, annual, Restricted Use Area or special, the Owner(s) of
the Parcel shall be obligated to pay interest from the due date on the unpaid
amount at the prime rate on January 1 of each year (and adjusted on January 1
each year thereafter), at the Mercantile Bank of St. Louis, Missouri (or any
other bank the Trustees may from time-to-time designate) plus three percent (3%)
per annum, together with all costs and expenses of collection, whether or not
suit is instituted, including reasonable attorneys' fees.
3.9 ASSESSMENT LIEN AND FORECLOSURE. Notwithstanding any provision to the
contrary herein provided, if any, all sums assessed in the manner herein
provided but unpaid, shall, together with interest, costs, expenses, and
attorneys' fees, become a continuing lien and charge on the Parcel covered by
such assessment, or in the case of a lien arising out of unpaid Restricted Use
Area assessments, a lien on the Parcel benefited by such Restricted Use Area,
which shall bind such Parcel in the hands of the Owner(s), his heirs, devisees,
personal representatives, successors and assigns. The aforesaid lien shall take
precedence over and be superior to all other liens and charges against the said
Parcel, including, but not limited to any and all mortgages and deeds of trust,
except the lien of assessments under the Riverport Indenture. Sale or transfer
shall not affect any lien created pursuant hereto. To evidence the aforesaid
assessment lien, the Trustees shall prepare a written notice of assessment lien
setting forth the amount of the unpaid indebtedness, the name of the Owner(s) of
the Parcel covered by such lien and a description of the Parcel. Such notice
shall be signed by one of the Trustees and shall be filed and recorded in the
offices of the Circuit Clerk of St. Louis County, Missouri and the Recorder of
Deeds of St. Louis County, Missouri. A copy of said notice shall be sent by
certified mail, return receipt requested, to the last known record address of
each Owner of the affected Parcel, of each tenant with a lease of record
affecting said Parcel, and of each person or entity having a mortgage lien of
record affecting said Parcel. Such lien for payment of assessments may be
enforced by foreclosing on the defaulting Owner's Parcel by the Trustees in like
manner as a mortgage on real property subsequent to the recording of a notice of
assessment lien as provided above, or the Trustees may institute suit against
the Owner(s) personally obligated to pay the assessment and/or for foreclosure
of the aforesaid lien judicially. In any foreclosure proceeding, whether
judicial or non-judicial, the Owner(s) shall be required to pay the costs,
expenses, and reasonable attorney's fees incurred. The Trustees shall have the
power to bid on the Parcel at foreclosure or other legal or equitable sale and
to acquire, hold, lease, mortgage, convey or otherwise deal with the same. Upon
payment of such assessment so recorded, together with interest, costs, expenses
and attorneys' fees, satisfaction thereof shall be acknowledged and recorded by
the Trustees at the expense of the Owner(s) against whom the lien was filed.
3.10 COMMON PROPERTY EXEMPT. The Common Property owned by the Trustees and
which has not been designated as a Restricted Use Area subject to this
Declaration shall be exempt from the assessments, charges and liens created
herein; provided, however no property hereunder shall be exempt from assessments
or the lien thereof under the Riverport Indenture. The Trustees, as record
owners, of the Common Property shall not be considered "Owners" for any purposes
hereunder.
ARTICLE IV
COMMON PROPERTY
4.1 ESTABLISHMENT OF COMMON PROPERTY AND RESTRICTED USE AREAS. The "Common
Property" (i) shall be all of Lot 1 of Duke Riverport Site No. 1, except Lots
1A, 1B and 1C and is herein referred to as such, (ii) shall be owned by the
Trustees, and (iii) shall be subject to the terms and conditions contained
herein. Notwithstanding anything herein to the contrary, those areas of the
Common Property which are from time-to-time reserved for the exclusive use
(subject only to reasonable utility easements as are necessary to provide
underground utility service to the Property and rights reserved herein to the
Trustees) of certain Parcels, including but not limited to parking areas,
parking garages, lawn areas, landscaping, lighting, ponds, fountains and other
amenities adjacent to and/or from time-to-time designated for the exclusive use
of a certain Parcel or Parcels shall be considered "Restricted Use Areas," and
shall be governed by the terms and conditions hereof relating to Restricted Use
Areas. For the purpose of establishing Restricted Use Areas, the Trustees shall
have the power to grant non-perpetual easements to the Restricted Use Areas for
the exclusive benefit of one or more Parcels, but the Trustees shall not be
required to do so but rather may designate an area as a Restricted Use Area
herein or hereby or in an amendment hereto or by a separate writing of record
designating an area as such. Restricted Use Areas as of the date of this
Declaration hereby assigned and designated are shown on Exhibit A hereto and may
be from time-to-time hereafter changed or modified by an amendment to this
Declaration or by way of another duly recorded instrument designating an area as
a Restricted Use Area. The Trustees shall not, however, change or modify the
Restricted Use Areas designated for the exclusive use of a particular Parcel
without first obtaining the prior written consent of the Owner or Owners of said
Parcel (as the case may be) (or the consent of any tenant or other person, if
any, to whom the Owner or Owners of a specific Parcel have from time-to-time
specifically delegated said Owner's or Owners' specific right to so consent in a
writing placed of record with the St. Louis County Recorder of Deeds) affected
by such change or modification.
4.2 EASEMENTS FOR THE USE OF COMMON PROPERTY AND RESTRICTED USE AREAS.
Every Owner and tenant of the Property (herein sometimes referred to
individually as the "Benefited Party" and collectively as the "Benefited
Parties") and their respective successors and assigns, invitees, agents,
employees, tenants, contractors and licensees shall have a right and
non-exclusive perpetual easement of enjoyment in and to the Common Property
(exclusive of the Restricted Use Areas as from time-to-time designated) for the
limited purpose of ingress, egress, parking and loading, subject only to such
reasonable rules and regulations as may from time to time be established by the
Trustees, including, but not limited to the designation and assignment of
certain parking areas within the Common Property (exclusive of the Restricted
Use Areas) for the benefit of the respective Owners and occupants of the Parcels
and the establishment of Restricted Use Areas. In addition, every Owner and
tenant of a specified Parcel to whom a Restricted Use Area has been specifically
assigned and designated and their respective invitees, agents, employees,
tenants, contractors and licensees shall have a right and exclusive,
non-perpetual easement of enjoyment in and to the specified Restricted Use Area
(but said specified Restricted Use Area only) for the purposes of ingress,
egress, parking and loading and such other purposes as are consistent herewith
and not in violation of any applicable laws and/or regulations and/or the
Riverport Indenture, subject only to such reasonable rules and regulations as
may from time to time be established by the Trustees which are consistent with
the provisions hereof. In addition, the Trustees shall grant to the Owners of
each Parcel, and third parties as is reasonably necessary, such non-exclusive
utility easements as are reasonably necessary to provide underground utility
service to the Parcels and Common Property.
4.3 TITLE TO COMMON PROPERTY. Title to the Common Property, including the
Restricted Use Areas, shall be and remain with the Trustees. Any conveyance or
change of ownership of all or any part of a Parcel in Duke/Riverport Site No. 1
shall convey with it a beneficial interest in the Common Property (exclusive of
the Restricted Use Areas) and in the Restricted Use Area assigned to a
particular Parcel, if any, but no such interest in the Common Property or a
Restricted Use Area shall be conveyed except in conjunction with a conveyance of
a Parcel. Any conveyance of all or any part of a Parcel shall carry with it all
rights and interests in and to the Common Property (exclusive of the Restricted
Use Areas) and in and to the Restricted Use Area assigned to a particular
Parcel, if any, although such is not expressly mentioned; provided, however,
that no right or power conferred upon the Trustees shall be abrogated.
4.4 EXTENT OF EASEMENTS. The rights and easements of enjoyment in the
Common Property (including the Restricted Use Areas) created hereby shall be
subject to the following: (a) The right of the Trustees to prescribe reasonable
rules and regulations for the use, enjoyment, improvement, and maintenance of
the Common Property and Restricted Use Areas; (b) Subject to the provisions of
SECTION 4.1 hereof, the right of the Trustees to purchase, alter, and use the
Common Property and Restricted Use Areas, or any part thereof; (c) The right of
the Trustees to sell or convey the Common Property and Restricted Use Areas, or
any part thereof, in the event of condemnation or taking by a public
agency972451523; (d) The right of the Trustees to designate Restricted Use Areas
or grant easements to Restricted Use Areas for the exclusive benefit of one or
more Parcels; and (e) All other rights reserved to the Trustees in this
Declaration and all rights reserved in the Riverport Indenture but only to the
extent that such rights are applicable to the Property.
4.5 TRUSTEES MANAGEMENT OF COMMON PROPERTY. Except as otherwise provided
herein, the Common Property shall be for the benefit and use of all Owners and
future Owners in Duke/Riverport Site No. 1 and it is deemed to be in the best
interests of all Owners and future Owners to vest in the Trustees the exclusive
powers to manage, control, improve, maintain and keep in repair the Common
Property. The Trustees are (subject to the limitations with respect to the
Restricted Use Areas herein specifically provided) therefore authorized and
empowered to: (i) keep the Common Property open at all times for the benefit and
use of the Benefited Parties; (ii) secure to such Benefited Parties the rights,
benefits and advantages of having ingress and egress from and to, over, along
and across the Common Property and of frequenting and using and enjoying the
Common Property in such manner and to such an extent as will enable such Owners,
their lessees, tenants, employees and customers to equitably enjoy and mutually
derive the maximum benefit from the Common Property, taking into account the
character of the occupancy and the use to which the Parcels are put from
time-to-time; (iii) assign to the Owners of Parcels benefited by the Restricted
Use Areas, the duty to manage, control, improve, maintain and keep in repair
such Restricted Use Areas, in a manner consistent with this Declaration, the
Riverport Indenture and subject to the rights reserved by the Trustees herein;
(iv) make and enforce reasonable rules and regulations governing the use of the
Common Property; (v) to employ attendants; to require identification; (vi) to
allot or assign spaces; to make charge, in a non-discriminatory manner, for
parking spaces where appropriate; (vii) to reconfigure the parking areas; and
(viii) to restrict the use of certain parking areas and to make any other
reasonable regulations for the general welfare of all of the Benefited Parties,
to the end that so far as is reasonably possible of accomplishment, the
Benefited Parties collectively shall enjoy the maximum and most beneficial use
of the Common Property. It is understood and agreed by the Benefited Parties
that it will not be possible for the Trustees to so manage the Common Property
that the use is necessarily proportionate or equal among the Owners.
Notwithstanding anything herein to the contrary, each Benefited Party shall at
all times be entitled to the minimum number of parking spaces required for
general office use by the zoning ordinances of the City of Maryland Heights,
Missouri or other governmental authority then having jurisdiction over the
Property.
4.6 MAINTENANCE OF RESTRICTED USE AREAS AND COMMON PROPERTY. (a) Each Owner
shall be responsible for the maintenance and repair of the Restriced Use Areas
designated for the use of each Owner's Parcel and shall: (i) keep all portions
of the Restricted Use Areas desigated for the use of the Owner's Parcel in good
order and repair and free of litter, weeds, trash and debris; (ii) maintain all
lawn areas and landscaping within each portion of the Restricted Use Areas
designated for the use of the Owner's Parcel, including regular mowing of all
lawn areas and trimming, maintenance and, when necessary, replacement of trees
and shrubbery; (iii) police and protect the Restricted Use Areas; (iv) maintain
standard extended coverage and public liability insurance covering the
Restricted Use Areas with coverage reasonably acceptable to the Trustees and
such other insurance as the Trustees shall reasonably determine from
time-to-time to be desireable; and (v) be responsible for the all costs and
expenses associated with the Restricted Use Areas, including but not limited to,
taxes, insurance, and utilities. Owners may take reasonable actions to restrict
parking and access to their Restricted Use Areas, including, but not limited to,
the erection of gates and/or card entry systems; provided, however, that: (1)
such actions do not operate to unreasonably restrict the Benefited Parties' use
and enjoyment of the remaining Parcels or the other Common Property (exclusive
of the Restricted Use Areas) consistent with this Declaration; (2) such actions
are not in violation of the zoning ordinances, rules or regulations of the City
of Maryland Heights or any other governmental authority having jurisdiction over
the Property; (3) no such action is taken without the prior written consent of
the Trustees; and (4) no such action is in violation of the Riverport Indenture.
Notwithstanding anything herein to the contrary, the Owners shall not assign,
lease, convey, encumber or otherwise dispose of any Restricted Use Areas without
the unanimous prior written consent of the Trustees. In the event an Owner fails
to perform its obligations with regard to the Restricted Use Areas, the Trustees
may perform such obligations of the Owner and assess the Owner for the costs
actually and reasonably incurred (sometimes referred to herein as "Restricted
Use Area assessments"). (b) Except (i) as provided in foregoing SUBSECTION (A)
above and (ii) repair, maintenance or replacement of the Common Property which
is the responsibility of any utility company or public or quasi-public body, the
Trustees shall maintain all Common Property in good order and repair. The
Trustees shall not, however, be liable to any Owner, tenant or other person or
entity for damages to property or injury or death to persons arising out of any
failure to repair and maintain any Common Property. Maintenance, repair or
replacement by the Trustees of any Common Property shall be performed in a
manner which does not unreasonably delay or interfere with the Owners' use of
the Common Property (exclusive of the Restircted Use Areas), a Restricted Use
Area designated for the use and enjoyment of a specific Parcel, or an Owner's
use of its Parcel. The Trustees shall have reasonable access over and across any
Parcel to all Common Property to the extent necessary to permit the Trustees to
maintain, repair or replace such Common Property. Maintenance by the Trustees of
the Common Property, except as provided in the Riverport Indenture, shall
include, but not be limited to, the following: (1) The private roadways and
sidewalks within the Common Property (exclusive of the Restricted Use Areas)
shall be swept and, to the extent reasonably possible, snow and ice shall be
removed therefrom. (2) The lighting, signs, islands and other private street
improvements located within the Common Property (exclusive of the Restricted Use
Areas) shall be maintained in good repair. (3) Landscaping, including lawn
areas, trees and shrubbery at all entrances to the Property, shall be maintained
in a first-class condition by cutting, trimming, feeding and weeding. (4) The
land and any improvements lawfully constructed on the Common Property shall be
restored to the extent damaged in connection with the maintenance, repair or
replacement of any easement. (5) The Trustees shall be entitled to replace any
improvement constituting a part of the Common Property when necessary for the
proper functioning of the Common Property. (6) The Trustees shall maintain
insurance coverage as follows: 972451524(i) All improvements upon the Common
Property (excluding the Restricted Use Areas) shall be insured in an amount
equal to the maximum insurance replacement value, and afford protection against
loss or damage by fire or other hazards covered by a standard extended coverage
endorsement and such other risks as the Trustees reasonably determine from
time-to-time, including, vandalism; (ii) Public liablility, including medical
payments insurance, in such amounts and with such coverage as shall be
reasonably determined by the Trustees; 972451525(iii) Workmen's compensation
insurance meeting the requirements of the laws of Missouri; 972451526and (iv)
Fidelity insurance on the Trustees and all other persons or entities handling
funds of behalf of the Owners of Duke/Riverport Site No. 1, in an amount equal
to a minimum of one hundred fifty percent (150%) of the estimated annual
operating expenses. All expenses incurred or to be incurred by the Trustees in
connection with the foregoing (and such other expenses recoverable by the
Trustees as herein otherwise provided) shall be recoverable by the Trustees by
way of the Annual Assesments For Common Property as in SECTION 3.2 hereof
provided. (c) The Trustees shall have the duty and power to pay the general and
special taxes, if any, assessed against the Common Property, excluding the
Restricted Use Areas, and to receive, hold, convey, dispose of and administer in
trust any gift, grant, conveyance or donation of any money or real or personal
property for the purpose of executing this trust. The Owners shall have the duty
to pay all general and special taxes assessed against the Restricted Use Areas
which have been designated for the use of each respective Owner's Parcel and as
assessed against the Parcel. Taxes for the Restricted Use Areas shall be
equitably allocated among the Owners to which the Restricted Use Areas are
assigned by the Trustees and shall be based upon the assessed value of the
Restricted Use Areas as determined by the St. Louis County Assessor's Office or
other taxing authority then having jurisdiction over the Property.
4.7 CONSTRUCTION OF PARKING STRUCTURES AND ADDITIONAL PARKING AREAS.
(a) From time to time it may be necessary or desirable to construct one or
more parking structures and/or additional parking areas, so that, at a minimum,
the minimum parking requirements as prescribed by the zoning ordinances of the
City of Maryland Heights or of any governmental authority then having
jurisdiction over the Property will be met. All costs and expenses of
construction of said parking structure and/or parking areas shall be borne by
the Owners of said Parcels for whose use such parking structures and/or parking
areas are constructed and none of the cost and expense associated therewith
shall be the responsibility of the Trustees nor shall the Trustees make any
assessment in connection with the initial construction of said parking structure
and/or parking areas without the unanimous consent of the Owners. Prior to
commencement of construction of any improvements, architectural approval must be
obtained from the Trustees and as required by the Riverport Indenture. In
addition, the Owners of said Parcels must provide the Trustees hereunder with
reasonable assurances of Owners financial ability to complete the construction
of the parking structure and/or parking areas. Not less than thirty (30) days
prior to commencement of construction of any parking structure and/or
improvements on the Common Property, the involved Owner hereunder shall notify
all other Owners and each person or entity having a mortgage lien of record of
the nature and extent of said assurances. The parking structure and/or parking
areas constructed by the Owners as provided herein (partially or fully
completed) shall be the property of the Trustees and held pursuant to the terms
hereof, unless fee simple title to the real estate and parking structure and/or
improvements thereon is conveyed to the Owner of any Parcel. Following initial
construction, the Owners shall have the duty to make all necessary and proper
improvements and repairs to the parking structure and/or parking areas which
have been designated as Restricted Use Areas assigned to each Owner's Parcel; to
pave, surface, grade or otherwise fit the same for use; to keep the areas in
repair, light, police and protect the same. (b) The Trustees shall have the
right to grant easements on, over (air) and under the Common Property for
reasonable and necessary utility easements and easements between the various
Parcels, subject, however, to the reasonable right of each Parcel Owner to
reasonably restrict access to its Parcel. (c) The Trustees shall have the power
to prohibit any person, firm or corporation from obstructing or occupying with
building materials, soil or other objects, the Common Property so as to in any
manner obstruct the free use thereof, but the Trustees may permit temporary
obstructions of necessity for reasonable periods of time and to this end shall
have power to require a reasonable deposit to be made by any such person making
temporary use of the Common Property in connection with necessary building or
other operations, to guarantee that such obstructions will be removed and the
Common Property restored to a condition equal to that existing before the
commencement of the work, otherwise such restoration is to be done by the
Trustees and paid for from such deposit.
ARTICLE V
MISCELLANEOUS PROVISIONS
5.1 DURATION. This Declaration and the covenants, restrictions and
easements set out herein shall run with and bind the land, and shall inure to
the benefit of and be enforceable by the Trustees, and every Owner of every
Parcel and their respective legal representatives, heirs, successors, and
assigns, for a term beginning on the date this Declaration is recorded, and
continuing indefinitely. Provided, however, that should this Declaration or any
part thereof be held invalid or unenforceable as a result of the term of same
being perpetual, then the term hereof shall be deemed to continue through and
including December 31, 2033 after which time said covenants shall be
automatically extended for successive periods of ten (10) years unless an
amendment is approved as set forth below. Provided, however, that no such change
shall be effective until the recording of a certified copy of such resolution in
the Recorder of Deeds Office, St. Louis County, Missouri. Upon the expiration of
this Declaration or the earlier vacation of all of the Common Property, fee
simple title to the Common Property shall vest in the then Owners, as tenants in
common, each owning that proportion of interest therein according to each
Owner's Pro-Rata Interest; provided further that, title to Restricted Use Areas
reserved for the exclusive use of an individual Parcel, shall vest in the Owner
of the Parcel to which the Restricted Use Areas is reserved. The rights of said
tenants in common shall only be exercisable appurtenant to and in conjunction
with said Owners' ownership of Parcels within Duke/Riverport Site No. 1. The
Owners agree to cooperate as necessary to subdivide the Property and take all
other actions necessary to accomplish the foregoing.
5.2 AMENDMENT. Except as herein otherwise specifically provided, for five
(5) years from and after the date that this Declaration is recorded with the St.
Louis County Recorder of Deeds, same may be amended by the unanimous vote of the
Trustees voting in person or by proxy, at a meeting duly called for such purpose
and, thereafter, any amendment (except those requiring the unanimous consent of
Owners as herein provided) may be made by a two-thirds (2/3) vote of the Owners;
providing, however, that no amendment shall at anytime be made without the
unanimous consent of the Owners and each person or entity having a mortgage lien
of record (which consent shall not be unreasonably withheld, conditioned or
delayed): (i) which would have the effect of denying an Owner of his voting
rights in connection with the election of Trustees; or (ii) which would have the
effect of unreasonably denying the substantive rights of the Owners and/or their
mortgage lenders herein specified. Any amendment shall become effective when an
instrument is filed for record in the Recorder of Deeds Office, St. Louis
County, Missouri, with the signatures of the Trustees indicating the approval of
the Owners and/or mortgage lenders, if required. No such amendment shall: (1)
reduce the number of Trustees on the Board of Trustees as herein provided; or
(2) eliminate the requirement of any cognizant governmental authority that
unfilled vacancies on the Board of Trustees be filled by said cognizant
governmental authority.
5.3 ENFORCEMENT. The Trustees shall have the duty and each and every Owner,
tenant and/or person or entity having a mortgage lien of record of any part of
the Property or on a Parcel or part thereof shall have the right (but not the
duty) to enforce the covenants and restrictions set out in this Declaration (and
any rules and regulations promulgated by the Trustees hereunder) as same may be
from time to time amended. Enforcement of the covenants and restrictions shall
be by any proceeding at law or in equity against any person or persons violating
or attempting to violate any protective conditions, covenant, restriction, or
reservation (or any rules and regulations promulgated by the Trustees hereunder)
either to restrain violation and/or to recover damages, and against the
Property, and/or any Parcel to enforce any lien created by these protective
conditions, restrictions, reservations, and covenants (and any rules and
regulations promulgated by the Trustees hereunder). Failure by the Trustees or
any Owner, tenant and/or mortgage lender to enforce any such protective
condition, covenant, restriction or reservation shall in no event be deemed a
waiver of the right to do so thereafter.
5.4 SEVERABILITY OF PROVISIONS. If any Article, section, paragraph,
sentence, clause or phrase of this Declaration shall be or become unenforceable,
illegal, null, or void for any reason or shall be held by any court of competent
jurisdiction to be illegal, null, or void, the remaining Articles, sections,
paragraphs, sentences, clauses, or phrases of this Declaration shall continue in
full force and effect and shall not be affected thereby. It is hereby declared
that said remaining Articles, sections, paragraphs, sentences, clauses, and
phrases would have been and are imposed irrespective of the fact that any one or
more other Articles, sections, paragraphs, sentences, clauses, or phrases shall
become or be illegal, null, or void.
5.5 NOTICE. Wherever written notice to Duke Realty, a Trustee, or Owner,
tenant, or mortgage lender of a Parcel within Duke/Riverport Site No. 1 is
permitted or required hereunder, such shall be given by United States,
registered or certified, mail, return receipt requested, postage prepaid, to the
address appearing on the records of the Trustees, or delivered in person or by
facsimile (unless written notice has been given to the Trustees of a different
address, in which event such notice shall be sent to the address so designated).
Any notice so given shall conclusively be deemed to have been given at the time
of placing same in the United States mail, properly addressed, whether received
by the addressee or not, or upon receipt or refusal if delivered personally or
by facsimile.
5.6 TITLE. The titles, headings, and captions which have been used
throughout this Declaration are for convenience only and are not to be used in
construing this Declaration or any part thereof.
5.7 SINGULAR AND PLURAL. Words used herein, regardless of the number and
gender specifically used, shall be deemed and construed to including any other
number, singular or plural, and any other gender, masculine, feminine or neuter,
as the context requires.
5.8 BINDING EFFECT. This Declaration shall bind the heirs, legal
representatives, successors and assigns of the parties hereto.
5.9 CONFLICTING TERMS. If any provision of this Declaration violates any
provision of the Riverport Indenture, then such provision of this Declaration
shall be automatically modified to the minimum extent necessary to comply with
the Riverport Indenture.
IN WITNESS WHEREOF, W. Gregory Thurman, Timothy J. McCain and Lisa G.
Bulczak, Trustees of Duke/Riverport Site No. 1, and Duke Realty Limited
Partnership, an Indiana limited partnership, have caused this instrument to be
executed as of the day and year first above written.
TRUSTEES OF DUKE/RIVERPORT SITE NO. 1
- --------------------------
W. Gregory Thurman
- --------------------------
Timothy J. McCain
- --------------------------
Lisa G. Bulczak
DUKE REALTY LIMITED PARTNERSHIP,
An Indiana limited partnership
S E A L
By: DUKE REALTY INVESTMENTS, INC.,
An Indiana Corporation,
Its General Partner
ATTEST:
By:________________________________
W. Gregory Thurman
_____________________________ Vice president and General Manager
James D. Eckhoff St. Louis - Office
Assistant Secretary
<PAGE>
STATE OF MISSOURI )
) SS
COUNTY OF ST. LOUIS )
On this ____ day of ______________, 1998, before me, a Notary Public in and
for the County of St. Louis, State of Missouri, duly commissioned and sworn,
personally appeared W. Gregory Thurman, Timothy J. McCain and Lisa G. Bulczak,
known to me to be named herein as the TRUSTEES OF DUKE/RIVERPORT SITE NO. 1 and
also known to me to be the persons who executed the foregoing instrument, the
said W. Gregory Thurman; Timothy J. McCain and Lisa G. Bulczak having stated to
me that they executed the foregoing instrument as their free act and deed.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal in the County of St. Louis, State of Missouri, the day and year in this
certificate first above written.
----------------------------------
Notary Public
STATE OF MISSOURI )
) SS
COUNTY OF ST. LOUIS` )
On this ____ day of ____________, 1998, before me a Notary Public in and
for the County of St. Louis, State of Missouri, duly commissioned and sworn,
personally appeared W. Gregory Thurman, known to me to be the Vice President and
General Manager, St. Louis - Office of DUKE REALTY INVESTMENTS, INC., the
corporation described in the foregoing instrument, and also known to me to be
the person who executed the foregoing instrument, the said W. Gregory Thurman
having stated to me that he executed said instrument on behalf of the
corporation therein named, and acknowledged that such corporation executed the
same as the free act and deed of said corporation and with full authority of its
Board of Directors, and as General Partner, with authority, of DUKE REALTY
LIMITED PARTNERSHIP.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal in the County of St. Louis, State of Missouri, the day and year in this
certificate first above written.
----------------------------------
Notary Public
<PAGE>
EXHIBIT A
(TO DECLARATION)
This Exhibit contains a pictorial of Site No. 1
<PAGE>
EXHIBIT 1.03-C
RESOLUTIONS
The undersigned, being all of the Trustees of Duke/Riverport Site No. 1
pursuant to that certain Declaration of Covenants, Restrictions and Easements
for Access and Parking for Property in the City of Maryland Heights, County of
St. Louis, State of Missouri, known as Duke/Riverport Site No. 1, dated
__________________, 1998 (the "Parking Indenture"), and recorded at Book _____
Page _____ of the St. Louis, County, Missouri records, hereby consent and agree
to the following resolutions and waive notice of a meeting of the Trustees and
the holding of such meeting, it being intended that this consent shall have the
same force and effect as the vote of the Trustees at a regular or special
meeting of the Trustees duly called and held.
The resolutions to which the undersigned consent and agree to are as
follows:
BE IT RESOLVED, that in accordance with Section 4.2 of the Parking
Indenture, the Trustees hereby assign and designate to the Owner of Lot 1A of
Duke/Riverport Site No. 1, according to the plat thereof recorded at Book _____
Page ____ of the St. Louis, County, Missouri records (herein sometimes referred
to as "Lot 1B"), from time to time and to its tenant, Express Scripts, Inc.
("Tenant"), and their respective successors and assigns, those certain 56
parking spaces (the "Designated Parking Spaces") within the Common Property (as
described in the Parking Indenture) as shown and depicted on Exhibit 1 to this
Resolution, for use by the Tenant and its directors, officers, employees,
representatives, agents, guests and invitees;
RESOLVED, that the Designated Parking Spaces shall continue to be within
the Common Property and shall not be part of any Restricted Use Area (as
described in the Parking Indenture); and be it further
RESOLVED, that the Trustees hereby consent to the lease of the Restricted
Use Area assigned and designated to Lot 1A under the Parking Indenture ("Lot 1A
RUA") and the lease of the other Common Property (including the Designated
Parking Spaces) by the Owner of Lot 1A to the Tenant; and be it further
RESOLVED, that the Trustees confirm and ratify that the Lot 1A RUA shall be
for the exclusive benefit of Lot 1A; and be it further
RESOLVED, that Tenant shall have the right, at its sole cost and expense,
to install signs identifying the Designated Parking Spaces for Tenant's use
(subject to the Trustees' approval of the form and content of said signage,
which approval shall not be unreasonably withheld, conditioned or delayed); and
be it further
RESOLVED, that the Trustees have received a copy of the that certain Eighth
Amendment to Lease dated August 14, 1998, by and between Duke Realty Limited
Partnership and Tenant, and acknowledge that the Owner of Lot 1A has delegated
to Tenant certain consent rights set forth in the Parking Indenture, including
the following: (1) consent rights with respect to Special Assessments as
provided in Section 3.4 of the Parking Indenture, and (ii) consent rights with
respect to any change or modification of Lot 1A RUA as provided in Section 4.1
of the Parking Indenture; and be it further
RESOLVED, that these Resolutions and the rights herein conferred to Tenant
shall run to and benefit Tenant and its successors and assigns and shall
continue without revocation or amendment so long as Tenant leases all or a
portion of Lot 1A (except to the extent Tenant otherwise consents to any
revocation or amendment in writing), and in the event that at any time hereafter
Tenant becomes the Owner of Lot 1A, the rights herein confirmed to Tenant shall
run to Tenant as Owner of Lot 1A (and to subsequent Owners) without revocation
or amendment (except to the extent the Owner(s) otherwise consents to any
revocation or amendment in writing); and be it further
RESOLVED, that each of the Trustees, be and here is authorized and directed
to do all acts and things as may be necessary or desirable to carry out the
purpose and intent of these resolutions, and that all of the acts and doings,
whether heretofore or hereafter done or performed in connection herewith are
hereby, in all respects, ratified, approved and confirmed.
Dated"_______________, 1998
___________________________________
W. Gregory Thurman
___________________________________
Timothy J. McCain
___________________________________
Lisa G. Bulczak
BEING ALL OF THE TRUSTEES
<PAGE>
EXHIBIT 1
(TO RESOLUTION)
This Exhibit contains a pictorial of Site No. 1
<PAGE>
EXHIBIT 1.04(f)
TITLE EXCEPTIONS
(FROM SCHEDULE B - SECTION 2 OF TITLE COMMITMENT/ABSTRACT NO. 275195)
4. This Commitment attempts to make no statement as to the effect of any
Federal Flood Control Act, Submerged Land Act, or other related legislation and
makes no statement as to the effect, if any, of inconsistencies in the
boundaries of the property described in Schedule A hereof, caused by accretions,
relictions, avulsions or meanderings of the Missouri River (AS TO ALL TRACTS).
5. Restriction and conditions contained in instrument(s) recorded: Book
8192 Page 1332 (AFFECTS ALL TRACTS).
6. First Revised And Restated Trust Indenture For The Property Known As
Riverport In The City Of Maryland Heights, County Of St. Louis, State Of
Missouri, dated August 10, 1987 and recorded at Book 8191 Page 380 of the St.
Louis County, Missouri records; which was amended by an Amendment to the First
Revised and Restated Trust Indenture dated November 4, 1988, and recorded in
Book 8465 Page 1068 of the St. Louis County, Missouri, Records; which was
further amended by a certain Second Amendment to the First Revised and Restated
Trust Indenture dated June 12, 1991, and recorded in Book 9013 Page 1955 of the
St. Louis County, Missouri, Records; which was further amended by another Second
Amendment to the First Revised and Restated Trust Indenture dated July 21, 1994,
and recorded in Book 10263 Page 1872 of the St. Louis County, Missouri, Records;
which was further amended by that certain Third Amendment of the First Revised
and Restated Trust Indenture dated December 18, 1995, and recorded in Book 10694
Page 1868 of the St. Louis County, Missouri, Records; which was further amended
by that certain Fourth Amendment To The First Revised And Restated Trust
Indenture For The Property Known As Riverport In The City Of Maryland Heights,
County Of St. Louis, State Of Missouri dated March 5, 1997, and recorded in Book
11104 Page 991 of the St. Louis County, Missouri, Records; which was further
amended by that certain Fifth Amendment To The First Revised And Restated Trust
Indenture For The Property Known as Riverport In The City Of Maryland Heights,
County Of St. Louis, State Of Missouri, and recorded in Book 11304 Page 1396 of
the St. Louis County, Missouri Records, which said Indenture, as amended as
aforesaid, shall hereinafter be referred to merely as the "Riverport Indenture."
(AFFECTS ALL TRACTS).
7. An easement disclosed by an instrument recorded in Book 8390 Page 1345,
Book 8390 Page 1356 and Book 7960 Page 645 in favor of Metropolitan St. Louis
Sewer District (AFFECTS TRACT I/PARCEL 3, TRACT II/PARCEL 4, AND TRACT
III/PARCEL 5).
8. An easement disclosed by an instrument recorded in Book 8921 Page 2449
in favor of Union Electric Company (AFFECTS TRACT I/PARCEL 3 AND TRACT 2/PARCEL
4).
9. Infrastructure Easement Agreement by and among Sverdrup/MDRC Joint
Venture, Riverport Board of Trustees and Harrah's Maryland Heights Corporation
recorded in Book 10263 Page 1910 (AFFECTS ALL TRACTS).
10. Amended and Restated Roadway Easement Agreement by and among Riverport
Board of Trustees, Harrah's Maryland Heights Corporation, Harrah's Maryland
Heights, LLC and Riverside Joint Venture recorded in Book 10694 Page 1908
(AFFECTS ALL TRACTS). (NOTE: By instrument recorded in Book 10697 Page 2135, The
Boatmen's National Bank of St. Louis has subordinated its lien of Deed of Trust
recorded in Book 7957 Page 2042 to the Amended and Restated Roadway Easement
Agreement recorded in Book 10694 Page 1908.)
11. Terms and provisions of the following ordinance: Ordinance Number:
95-973. A certified copy of which is recorded in Book 10646 Page 777 (AFFECTS
ALL TRACTS).
12. Terms and provisions of the following ordinance: Ordinance Number:
95-980. A certified copy of which is recorded in Book 10646 Page 827 (AFFECTS
ALL TRACTS).
13. Easement to Fred Weber, Inc., according to instrument recorded in Book
7845 Page 440 of the St. Louis County records (AFFECTS ALL TRACTS).
14. An easement for the purposes herein stated and incidental purposes, as
disclosed by an instrument recorded in Book 9410 Page 636 for water pipe
(AFFECTS TRACT V/PARCEL 9).
15. Unrecorded Lease dated as of April 29, 1992, by and between Riverport,
Inc. and McDonnell Douglas Development Company - Irvine Partnership in Commendam
(Lessor) and Express Scripts, Inc. (Lessee) as evidenced of record by Memorandum
thereof recorded in Book 9303 Page 2155 and that certain unrecorded second
amendment to lease dated May 28, 1993 as evidenced of record by second loan
modification agreement recorded in Book 10059 Page 2078 (LEASEHOLD TITLE NOT
EXAMINED) (AFFECTS TRACT V/PARCEL 9, TRACT III/PARCEL 5 AND TRACT IV/PARCEL 6).
16. An easement disclosed by an instrument recorded in Book 11099 Page 1588
in favor of Metropolitan St. Louis Sewer District (AFFECTS TRACT III/PARCEL 5).
17. An easement disclosed by an instrument recorded in Book 11175 Page 2364
in favor of Metropolitan St. Louis Sewer District (AFFECTS TRACT III/PARCEL 5).
18. Restrictions, conditions, and easements contained in instrument(s)
recorded in: Plat Book 287 Pages 80 and 81 (AFFECTS TRACT III/PARCEL 5, TRACT
I/PARCEL 3 AND TRACT II/PARCEL 4).
19. Restrictions, conditions, and easements contained in instrument(s)
recorded in: Plat Book 281 Page 34 (AFFECTS TRACT IV/PARCEL 6 AND TRACT V/PARCEL
9).
20. Restrictions, conditions, and easements contained in instrument(s)
recorded in: Plat Book 271 Pages 45 and 46 (AFFECTS TRACT I/PARCEL 3, TRACT
II/PARCEL 4 AND TRACT III/PARCEL 5).
21. Restrictions, conditions, and easements contained in instrument(s)
recorded in: Plat Book 305 Page 37 (AFFECTS TRACT IV/PARCEL 6 AND TRACT V/PARCEL
9).
22. Restrictions, conditions, and easements contained in instrument(s)
recorded in: Plat Book 327 Pages 89-92 (AFFECTS TRACT IV/PARCEL 6 AND TRACT
V/PARCEL 9).
23. Easement for the maintenance, repair and upkeep of the levee and flood
wall according to instrument recorded in Book 8351 Page 1184 (AFFECTS TRACT
V/PARCEL 9).
24. Restrictions, conditions and easements contained in instrument recorded
in: Plat Book 273 Pages 8 and 9 (AFFECTS TRACT II/PARCEL 4, TRACT III/PARCEL 5
AND TRACT I/PARCEL 3).
25. Restrictions, conditions and easements contained in instrument recorded
in: Plat Book 297 Pages 12 and 13 (AFFECTS TRACT I/PARCEL 3, AND TRACT II/PARCEL
4).
26. Easement Declaration recorded in Book 8795 Page 579 (AFFECTS TRACT
I/PARCEL 3 AND TRACT II/PARCEL 4).
<PAGE>
EXHIBIT 1.06-1
This Exhibit contains a pictorial graph of Project Schedule
<PAGE>
EXHIBIT 1.06-6
DUKE REALTY INVESTMENTS
June 3, 1998
Mr. Barrett Toan
Express Scripts
14000 Riverport Drive
Maryland Heights, MO 63043
Re: Proposed Lease Agreement (the "Lease") by and between Duke Realty
Limited Partnership ("Duke") and Express Scripts Inc. ("Express
Scripts") for leasing a 141,131 rentable+/- sq. ft. Building
("Building") that Duke will construct as part of its project at
Riverport in Maryland Heights (the "Project")
Dear Barrett:
The purpose of this letter agreement is to acknowledge that Duke and
Express Scripts have commenced and are engaged in negotiations concerning the
terms and provisions of the proposed Lease. In this regard, Duke and Express
Scripts have tentatively agreed upon certain dates for completion of the
Building. Although Duke and Express Scripts have not yet executed the Lease,
Duke has advised Express Scripts of the need to commence architectural,
engineering and related design work in order to give Duke the opportunity to
complete the Building in accordance with the tentative schedule. Duke has
further advised Express Scripts that Duke is not willing to incur the cost and
expense of such architectural, engineering and related design work prior to the
execution of the proposed Lease. In view of the foregoing, and in consideration
of the costs and expenses to be incurred by Duke pursuant to this letter
agreement, Express Scripts hereby covenants and agrees that in the event that
Duke and Express Scripts fail to come to a written agreement on terms of the
Lease that are mutually satisfactory to both Duke and Express Scripts, that
Express Scripts will reimburse Duke for Allowable Expenses (defined below) that
Duke incurs prior to either party giving notice that Lease negotiations have
terminated. As used herein, the term "Allowable Expenses" shall mean only those
actual reasonable out-of-pocket costs and fees for civil engineering and design,
architectural design, soil test borings, and topography and elevation
investigation that Duke incurs in preparation for constructing the Building. In
this regard, if Express Scripts gives notice to Duke that negotiations
concerning the Lease have been terminated, Duke shall promptly submit to Express
Scripts, as soon as practical, a summary of all such Allowable Expenses with
reasonable supporting detail, including invoices, and Express Scripts shall,
upon receipt of any such notice, promptly pay and/or reimburse Duke for any and
all such Allowable Expenses up to an amount of One Hundred Fifty Thousand
Dollars ($150,000.00) in the aggregate, and Duke will thereafter forward the
work product of such costs to Express Scripts. The parties hereby agree that any
costs or expenses incurred by Duke in connection with its enforcement of this
letter agreement, including, without limitation, reasonable fees and expenses of
Duke's legal counsel may also be included as Allowable Expenses in this
$150,000.00. For purposes of this paragraph, notice shall be in writing and
either delivered by prepaid commercial overnight delivery service, or by
facsimile, addressed as follows:
If to Express Scripts: Express Scripts
14000 Riverport Drive
Maryland Heights, MO 63043
Fax: 314-770-1581
Attention: Thomas M. Boudreau, Senior Vice President
If to Duke: Duke Realty Investments, Inc.
635 Maryville Centre Drive, Suite 200
St. Louis, Missouri 63141
Fax: 314-434-7532
Attention: Greg Thurman, Vice President & General
Manager
or such other address as is from time to time designated by notice pursuant
hereto by the party receiving the notice. The date of service of such notices
shall be the date notices are received or refused, as the case may be.
The provisions of this letter agreement shall be binding upon and
enforceable by and against the parties hereto. Duke and Express Scripts each
hereby reserve the right to cancel and/or terminate negotiations concerning the
terms and provisions of the proposed Lease. Notwithstanding any such
termination, Express Scripts shall remain bound and obligated to pay and/or
reimburse Duke in the manner set forth herein. Except for the limited obligation
of reimbursement set forth above, Express Scripts has no obligation to Duke in
connection with the Lease or the negotiation thereof, or the Project, and except
for the limited obligation of reimbursement set forth in this letter, shall have
no liability to Duke if for any reason negotiations terminate or a Lease is not
executed.
Upon successful negotiation and execution of the proposed Lease, this
letter agreement shall be and become void and of no further force or effect.
If the foregoing terms and provisions of this letter agreement are
acceptable to you, please execute duplicate originals in the space provided
below, and return one fully executed original to Duke at 635 Maryville Centre
Drive, Suite 200, St. Louis, Missouri 63141, Attention: Greg Thurman. At that
time, Duke will proceed with the work described in this letter agreement.
Thank you in advance for your consideration.
Sincerely,
DUKE REALTY LIMITED PARTNERSHIP
By: Duke Realty Investments, Inc.,
its General Partner
By: /s/ W.Gregory Thurman
W. Gregory Thurman
Vice President & General Manager
St. Louis Office Group
Accepted and agreed to this _____ day of June, 1998.
EXPRESS SCRIPTS, INC.
By: /s/ Barrett Toan
Printed:
Title:
<PAGE>
EXHIBIT 1.09.1
EXPRESS SCRIPTS
PROPOSED OFFICE BUILDING
MARYLAND HEIGHTS, MISSOURI
REVISED AUGUST 11, 1998
BUILDING SHELL DESCRIPTION
GENERAL CHARACTERISTICS
A. Proposed building site is the north quadrant of the Duke Parcel at the
Riverport Development adjacent to the existing Express Scripts Facility.
B. The proposed facility is a three (3) story office building approximately
147,394 gsf or 141,774 rsf. It has been anticipated Express Scripts shall occupy
the first two (2) levels and a portion of the third level, the remaining space
shall unoccupied shell space, intended as expansion space for Express Scripts.
C. Automobile parking proposed: 813 spaces for the new building and 310
spaces relocated from across the street of the existing building.
GENERAL CONDITIONS
A. Construction General Conditions is based upon a construction schedule,
dated 5/31/98 (revised 7/30/98). We shall provide all support personnel,
temporary utilities and temporary facilities for full-time, on-site supervision
for the Work as described within this Building Shell Description.
B. Required Building and Site related permits from governing authorities
will be obtained and have been included. It is anticipated this building shall
be of the Business Use Group.
C. Duke Construction has also included all quality control testing of
engineered backfill, concrete, asphalt, structural connections and construction
layout throughout the course of the Project.
D. All final cleaning and set-up of base building systems will be provided
before Occupancy.
E. All architectural, civil, structural, mechanical, electrical
engineering, landscape design necessary to provide Building Shell Construction
Documents will be provided.
F. Included is a complete labor and material guarantee for one (1) year.
See Roofing Systems, HVAC for extended warranties.
SITEWORK
A. The sitework shall include with all site clearing and earthwork
preparation to accommodate all paving areas, building pad, and landscape areas.
All grading will be provided to +/-1/10 of a foot subgrade elevation and all
fill material under paving and slab area will be compacted to 95% maximum dry
density according to standard Proctor ASTM 698.
B. Heavy duty, 4" thick, asphalt paving shall be placed within the drive
path for trucks to the loading area at the eastern end of the building, having a
base of Type I stone at 9" deep, compacted to 95% maximum dry density according
to standard Proctor ASTM 698 and all placed over a soil stabilization fabric.
Type X asphalt base course shall be 2-1/2" deep, being one (1) layer of course
crushed stone and sand with 4% asphalt. The Type C wearing surface course shall
be 1-1/2" deep, being one (1) layer of sand- stone composition with 4.5% to 5%
asphalt.
C. Standard duty, 3" thick asphalt paving shall be placed at the automobile
parking areas having a base of Type I stone at 6" deep, compacted to 95% maximum
dry density according to standard Proctor ASTM 698 and all placed over a soil
stabilization fabric. The Type C asphalt paving course shall be 3" deep, being
one (1) layer of sand-stone composition with 4.5% to 5% asphalt. White pavement
markings and ADA signage have been included.
D. Site concrete consists of; 8" thick, welded-wire mesh reinforced, 4,000
psi compressive strength at 28 days with a 6" Type I stone base at the entry
drive apron from Riverport Drive and the Service Area which includes the trash
dumpster area; 4" thick concrete sidewalk is located at the main office entries;
and 6" extruded curbing at perimeter of car parking areas and all parking lot
islands. control joint sealant of the site concrete and sidewalk is included.
E. All storm sewers for roof drainage will be provided via underground pipe
and/or sheet drainage to drainage ditches at the perimeter of the site.
F. All utilities will extend to the building and final connections made
for, electric, water, and sanitary. We will coordinate and provide access (three
(3) empty conduits from building to property line) for telephone and
communication contractors.
G. Water service will be extended from the 12" main on Riverport Drive to
the facility and connection made to building domestic and fire suppression
systems.
H. Site seeding, sod, irrigation and landscaping in accordance with local
codes, ordinances and covenants has been included. Also, the perimeter along
Riverport Drive of the proposed office building site and the existing Express
Scripts facility shall have a continuous hedge row of thorny bushes along
Riverport Drive to aide in the deterrence of trespassing. Landscaping, as
described, shall be as shown on drawings prepared by Austin Tao & Associates
sheet no. L1, dated 7/14/98.
I. All allowance of $3,000 has been included for exterior signage at the
building and a total allowance of $5,000 ($1,000 each) has been included for
entry drive monument/signage.
J. Exterior lighting will be provided to meet all zoning ordinances and
local codes, 2- foot candles, average maintained shall be obtained by pole
mounted fixtures in the automobile parking areas, controlled by photo-cell and
time clock. See electrical section for further description.
K. All entry and exit drives onto the proposed site and existing facility
(five locations) shall have a electric operated traffic control barrier gate
with local, card reader access and free gate egress.
L. A covered pedestrian walk has been included from the existing Express
Scripts Building entrance to the proposed office facility. The tube steel frame
and canvas covering shall be 8' wide in a 12' wide areaway with landscaping. The
existing parking area shall be modified and re-stripped to accommodate the
connecting pedestrian walk area.
FOUNDATIONS AND SLABS
A. We have included deep soil treatment/consolidation and spread footing
type foundations based upon 4,000 PSF bearing capacity. Final foundation size
and type will be determined once geotechnical report and structural loads are
complete.
B. The building floor slab-on-grade shall be 4" thick, 4,000 psi concrete
at 28 days, with 6 x 6 - W1.4 x W1.4 reinforcement on a 6 mil vapor barrier and
minimum of 6" compacted stone base. The slab will be receiving a smooth trowel
finish and crack control joints will be installed at a maximum distance of 15'
on center.
C. The building's floor slab-on-decks shall have a 4" overall thickness,
4,000 psi concrete at 28 days, with 6 x 6 - W1.4 x W1.4 reinforcement. The slab
will be receiving a smooth trowel finish. Concrete vibration pad shall be
provided for mechanical equipment as dictated by design for sound deadening.
STRUCTURAL
A. Building column bay spacing is approximately 30' x 30', please refer to
schematic floor plate drawings.
B. The buildings structural system shall be structural steel shapes for
floor and roof deck supported by steel columns. Floor slab shall be designed for
100 lb/sf live load.
C. Metal roof deck shall be prime painted 1-1/2" type B metal deck.
Elevated slab deck shall be 2" steel deck. All deck shall be installed per SDI
specifications.
D. Three (3) stairwells have been included for access to each floor. Stair
construction shall be concrete filled pan tread with concrete intermediate and
floor landings. The two (2) building end stairs are for emergency egress. The
third central, communication stairway shall be open and within the central
atrium.
E. Miscellaneous metal items provided as follows: 1. Roof equipment support
frames for HVAC equipment as described in this proposal. 2. Roof ladder and
hatch. 3. Guard posts at loading area door and trash enclosure. 4. Building
stairs and handrails (stair pans are concrete filled). 5. Roof screen support.
6. Miscellaneous iron for elevators.
ROOFING
A. All roofing shall be warranted by the manufacturer for 10 years on labor
and material. The warranty shall cover material only for an additional 10 years.
Acceptable roofing manufacturers are Firestone and Carlisle.
B. The roof will be drained by internal roof drains with overflows.
C. The roof membrane shall be a single-ply, 45 mil EPDM, loose-laid,
ballasted membrane system. The roofing system shall have a UL Class A rating and
a Factory Mutual Class 1 fire rating (non-combustible). The stone ballast shall
be applied at a uniform rate of 10 psf in the field, 12 psf at a 10' wide
perimeter band, and 15 psf in an area of 10' x 10' at the corner. The ballast
shall be washed, rounded river gravel.
D. The roof insulation shall be rigid closed cell polyisocyanurate boards
having a minimum density of 2 pcf, a minimum 16 psi compressive strength and a
total assembly R value of 30.
E. Manufacturer walkway pads will be provided at the roof access door and
around all roof top mechanical units.
F. Coping, Flashing, and Curbs 1. All membrane sidewall flashing shall be a
minimum of 60 mil uncured EPDM material installed in accordance to the
manufacturer's details and design criteria. 2. A rooftop mechanical units and
other miscellaneous rooftop equipment shall be mounted on an insulated curb. All
piping and vents, which penetrate the roof membrane, will be flashed using
molded or fabricated EPDM or neoprene flashing. 3. A single 30" x 36" roof hatch
with a steel ladder will be provided for roof access.
EXTERIOR SKIN
A. Exterior walls of the building to consist of solid, limestone mix,
architectural precast spandrel panels and continuous strip windows, curtainwall
entry feature and/or storefront windows at first level. The precast panels shall
have horizontal and vertical rustication features, and medium sandblast surface
texture treatment. Tenant shall have opportunity for review and approval of
color and texture.
B. Glazing shall consist of approximately 7'0" tall continuous strip
windows around the perimeter of the building and storefront/curtainwall at the
main entry and various elevation elements. The window framing systems shall have
thermally broken, extruded aluminum mullions with anodized finish. The glazing
shall consist of one (1) inch insulating, low-emistivity tinted glass. Interior
window sills shall be extruded aluminum integral with the window framing system.
Tenant shall have opportunity for review and approval of glazing color.
C. Main entry includes a set of double medium stile 3'-0" wide and 7'-0"
tall swing doors opening into a vestibule then into the main level lobby on the
west elevation. The east elevation also includes a set of double medium stile
3'-0" wide and 7'-0" tall swing doors with vestibule. (i.e. two pair of doors
total in each vestibule).
D. The Service entry shall have a pair of 3' x 7' insulated, hollow metal
doors, an exterior electric scissors lift shall be provided.
E. Concrete wall panels to receive color matching joint sealant. Sealant to
be a two component polyurethane base with a five (5) year material warranty.
INTERIOR FINISHES
A. The office side of concrete panel perimeter walls shall receive 5/8"
gypsum wall board to 4" above the finish ceiling on metal studs. R-19 batt
insulation with vapor barrier will be provided the entire height of the precast
panel.
B. Interior walls for the core area restrooms shall consist of 5/8" gypsum
wall board on 3-5/8" x 25 ga. metal studs 16" on center to the underside of
metal deck. 3-1/2" unfaced, acoustic insulation shall be provided in these
walls. Moisture resistant gypsum board shall be used on the restroom and janitor
closets wet walls.
C. Shell building partitions shall be fire-rated assemblies where required
by code at mechanical shafts and egress stairways.
D. Columns, mechanical/electrical shafts and fire stairways shall be
enclosed or furred out with metal stud framing and gypsum wallboard, or
shaftwall as required by code.
E. All exposed gypsum board shall be taped, finished and sanded in
preparation for painting and/or wall coverings. Wall finishes to be included as
part of the Tenant Finish Allowance.
F. All floor areas shall be broom clean exposed concrete, for preparation
of floor finishes. Floor finishes and wall base to be included as part of the
Tenant Finish Allowance.
G. Interior doors shall be 3'-0" x 7'-0" x 1-3/4" solid core, prefinished,
plain sliced, red oak, flush wood doors set in a hollow metal frame.
H. The hardware schedule shall be coordinated between Express Scripts and
the contractor and shall conform to the requirements of the Building Code and
ADA. Lockset hardware shall have removable cores. The hardware shall be of heavy
duty, commercial grade, full mortise style. Acceptable manufacturers shall be
Best or Schlage.
I. The standard ceiling height shall be 10'-0" +/- above finished floor for
the office areas and 9'-0" +/- above finished floor in the restrooms. Ceiling
system to consist of 2' x 2', 15/15" exposed tee grid system with tegular,
lay-in acoustical pads. The pads shall be an Armstrong Tundra Tegular or
approved equal.
J. The restrooms shall receive ceramic tile on the floors and 6' high on
the wet walls. standard tile will be as manufactured by Dal Tile or American
Olean. Remaining walls will be finished with a Type II vinyl wall covering.
K. Janitors closets and electrical rooms shall have sealed, exposed
concrete floors and drywall wall surface to the underside of deck (no ceilings).
L. Restrooms include the following specialties: 1. Plastic Laminate counter
tops with lay-in sink bowls. 2. Toilet room partitions will be floor-mounted and
finished with standard, factory-applied, baked-on enamel. 3. Stainless steel
accessories including: Towel dispenser/waste receptacles, toilet paper
dispensers, in-counter soap dispensers, ADA grab bars, feminine napkin
dispenser/receptacles. 4. Unframed, full length, continuous mirrors over the
counters. 5. Restrooms in accordance with ADA requirements.
M. The exterior windows of the office area shall be provided with 1"
horizontal, solid mini-blinds by Levelor.
N. Fire extinguishers in office area will be placed in semi-recessed
cabinets as required by Code and Fire District for Shell Building.
O. Lobbies include the following: 1. The Main Entry Area Lobby
(approximately 900 sf) and vestibule shall have a Type II vinyl wall covering on
the walls and a flamed granite floor tile with polished granite base. The entry
lobby ceiling is a painted, drywall surface with reveals and fluorescent
downlights. 2. Elevator lobbies on the 1st through 3rd floors shall have the
walls and floors prepared to receive finishes, which are a continuation of the
tenant area treatments. The elevator lobby ceilings are a continuation of the
tenant space lay-in ceiling systems and fluorescent down lighting.
P. Elevators are proposed based on the following criteria: 1. Two (2)
passenger hydraulic, elevators with 3,500-lb capacity, minimum 150 FPM travel
speed, cabs shall be finished as part of a $7,500/cab allowance. 2. One (1)
swing type, hydraulic elevator, gurney size with 4,000-lb Capacity, minimum 110
FPM travel speed, cab finish for service elevator shall be finished as part of a
$7,000/cab allowance.
3. Acceptable elevator manufacturers include: Dover, Otis, Schindler,
Thyssen, Montgomery and Westinghouse.
Q. The Service Area located at the west end of the building shall include a
6' x 7' opening with hollow metal double doors. This area shall also serve as
the utility service entrance.
R. The two (2) emergency egress stairways shall have sealed concrete
threads and landings, a decorative steel handrail, painted (1-1/2" dia. top &
bottom rail and handrail with 1/2" dia. verticals 4" o.c., painted) enclosed
fluorescent light fixtures, painted gypsum board walls, acoustical tile ceiling
at the top level, underside of stairs shall be painted. The center atrium
stairway shall include sealed concrete filled stair pans with closed risers on a
steel plate stringer system with landings supported by adjacent structural
steel. An allowance of $72,500 has been established for the stairway handrail,
atrium guardrail, and all applied finishes. Metal stud framing and gypsum
wallboard (prepared for finishes) has been included at the perimeter of the
floor openings from finish ceiling up to the floor line on two (2) sides, the
other two (2) sides include full height metal stud/gypsum wallboard wall
(prepared for finishes). Sliding fire doors have been included with the base
building with rated walls at the elevator shaft and the atrium corridor. A full
height window wall on the corridor side of the atrium has been included.
S. An allowance of $200,000 has been established for the Computer Room, the
allowance is intended for partitions, flooring, finishes, mechanical and
electrical items particular to said Computer Room.
T. The atrium includes an opaque skylight over the floor opening area with
the structural members wrapped in metal stud and gypsum wallboard prepared for
finishes.
PLUMBING
A. A complete plumbing system including supply, waste and vent piping,
fixtures and equipment in accordance with all applicable codes and ordinances.
The following components are provided at each occupied level:
o (10) Wall Hung, Flush-O-Meter, Water Closets (White China Fixture)
o ( 2) Wall-Hung, Flush-O-Meter, Urinals (White China Fixture)
o ( 8) Lay-in lavatory bowls with Commercial grade, lever handle Faucets
o Electric water heaters sized to accommodate Base Building Fixtures
o ( 4) Floor Drains (one per restroom)
o ( 1) Floor Type Mop Sink in Janitor Closet
o ( 4) Electric Water Coolers
o ( 2) Remote wet column locations
The base building components include:
o Roof Drains with Overflows
o ( 3) Frost-free Wall Hydrants (Main Entries and Loading Area)
B. 6" PVC interior sanitary sewer line to service restrooms with necessary
4" branches to serve interior mechanical service area and two (2) remote wet
columns. This sanitary line is extended outside the building to the public
sanitary pumping station across Riverport Drive.
C. Interior drains, downspouts and underground drain piping extended
outside the building to drainage structures and/or to site drainage swales.
D. Above ground domestic water piping and horizontal roof-drain runouts and
bodies will be insulated.
E. Two (2) wet columns (1" supply, 4" waste and vent riser) have been
located at interior columns for service to future, remote fixtures.
F. Water service, valving and backflow prevention shall be provided for the
irrigation system as identified in the Sitework Section.
H.V.A.C.
A. The Heating, Ventilating and Air Conditioning systems will be variable
air volume system, designed and selected to satisfy the following conditions:
1. Outdoor Design Conditions: Summer: 95(Degree)F dry bulb/78(Degree)F wet
bulb Winder: 0(Degree)F wet bulb
2. Indoor Design Conditions: Summer: 75(Degree)F dry bulb (+/- 2(Degree)F),
50% relative humidity +/- 5% Winter: 75(Degree)F dry bulb (+/- 2(Degree)F)
3. The HVAC system will meet ASHREA standards capable of furnishing 20
cfm/person of fresh air for a maximum occupancy of 7 people per 1,000 rsf per
BOCA.
4. HVAC Calculations include: 120 SF/person 4 watts/sf miscellaneous power,
connected 2.0 watts/sf lighting
5. Acceptable Manufacturers of major HVAC Equipment include: Trane,
Carrier, McQuay, Mammoth, and York.
B. The HVAC System also includes the following:
o One thermostat/sensor per 1,000 rsf, installed.
o Ductwork and distribution of the HVAC System will be based on
slot supply diffusers installed one per 250 rsf in an open floor
plan. The system will be designed per the interiors layout
provided by Christner, Inc., sheet no's A1.1, A1.2 and A1.3
dated 7/22/98, excluding any special systems for kitchen or
computer room.
o Temperature controls and wiring.
o Ductwork designed via static regain for NC 35 noise level
o Air balance of system
o One (1) year labor and material warranty
o Five (5) year material warranty on refrigeration compressors
o Restroom and janitor closet exhaust in accordance with Code
requirements
o A Direct Digital Control (DDC) energy management system will be
provided which will control the building HVAC Systems. Acceptable
manufacturers include: Trane, Andover, Johnson, and
Krueter
FIRE SUPPRESSION SYSTEMS
A. The facility shall be completely protected by an automatic sprinkler
system including all piping, valves, risers, fittings, post indicator valves,
check valves, fire department connections, contacts for fire protection
monitoring, flow switches, supports, anchors, hangers, sprinkler heads,
accessories, test connections, drains, testing, inspections, design and
engineering, permits and fees, approval by all governmental and fire district
agencies, and any other items required for the complete design and installation
of the wet pipe system.
B. An 8" fire main shall extend from the building to the public main along
Riverport Drive. Exterior fire hydrants have been included in accordance with
local Fire District requirements.
C. All sprinkler heads in the office areas, main lobby and elevator lobby
shall be concealed type. Sprinkler heads to be centered in tile. The system will
be designed per the interiors layout provided by Christner, Inc., sheet no's
A1.1, A1.2 and A1.3 dated 7/22/98, excluding any special systems for kitchen or
computer room.
D. The office system shall be designed and installed per NFPA #13, Light
Hazard Group and Factory Mutual requirements.
BASE BUILDING ELECTRICAL
A. SERVICE EQUIPMENT
1. Electrical service shall be provided by a ground-mounted transformer(s)
furnished by the public utility company (Ameren/U.E.) and shall provide, 277/480
volt, three-phase, four wire power. 2. Provide 277/480 volt, three-phase, four
wire panelboards for base building lighting and mechanical equipment. 3. Provide
step-down transformers as required for base building items. 4. Provide 120/208
volt, three-phase, four wire panelboards for base building receptacle power
(i.e. restrooms, HVAC, base building systems) 5. Include as Base Building
Electrical, distribution panels to accommodate Tenant power, excluding lighting
and mechanical systems, based on four (4) watts per square foot, connected. The
base building work shall include risers, switches, panels and K-13 transformers
with 200% rated neutrals at each level Electrical Room. 6. All electrical work
will be coordinated with other trades and shall comply with all applicable
codes. 7. Provide empty conduit(s) to property line for primary electric
incoming cables and coordination of Ameren/U.E. service equipment (i.e. setting
transformer pads).
B. EXTERIOR LIGHTING
1. Photo cell and time clock shall control all exterior lighting.
2. Provide building exterior soffit downlights at entries. Loading Area
lights mounted on building.
3. Provide a conduit raceway to monument sign located adjacent to building
main entry.
4. Provide site lighting to illuminate to 2-foot candles, average
maintained, include furnishing and installing concrete bases.
5. Provide six (6) light billiards at Main Entry sidewalk.
C. INTERIOR LIGHTING
1. In Open Office Area provide 2' x 4' light fixtures, 18-cell parabolic
fluorescent fixture, electronic ballast and T-8 lamps. One (1) light fixture per
80 rsf.
2. Lighting for each restroom to include two (2) fluorescent downlight type
light fixtures and continuous overlapping fluorescent lamp fixtures with
eggcrate type diffuser along toilet wall and above sinks. Include switching in
room.
3. Provide emergency and exit lighting in accordance with local code
requirements for shell construction. The fixtures shall be self-contained,
battery operated.
4. Provide 4', two (2) lamp fluorescent strip fixtures for mechanical
rooms, janitor closets, equipment rooms, include switching in room.
D. POWER
1. Power to be provided to all base Building Equipment, as described in
this Building Description.
2. Provide general purpose duplex receptacles for common areas and
restrooms.
3. Provide weatherproof receptacle at roof top mechanical equipment.
4. Dedicated duplex receptacle for lawn irrigation system.
5. Provide weatherproof receptacles at Main Entry and Maintenance area.
6. Provide hook-up to plumbing water heaters.
7. Hook-up of drinking fountains.
8. Hook-up of elevator equipment for elevators.
9. We've included (80) 20 amp 120 volt circuits and forty-six (46)
receptacle bay boxes per floor. We included tenant power based upon 4 watts per
square foot, connected, for office duplex receptacles.
E. TELEPHONE
1. Provide Eight (8) sleeves at each level for communication lines.
2. Provide 4' x 8' plywood sheets for mounting of equipment (four per
level).
F. FIRE ALARM
1. Provide a fire alarm monitoring system in accordance with and as
required by Code; including but not limited to, monitoring of sprinkler flow and
tamper switches, shut down roof top units and elevator control, system
autodialer, audio and visual alarms as required in core area as required by ADA.
G. ENGINEERING/PERMITS
1. Provide Professional Engineered signed/sealed drawings and submittals
for permit and construction purposes.
2. Provide all necessary electrical permits and inspection fees.
<PAGE>
EXHIBIT 1.09-2
LISTING OF BUILDING PLANS
CIVIL DRAWINGS PREPARED BY STOCK & ASSOCIATES CONSULTING ENGINEERS, INC.,
DATED 7/28/98
PHASE I
C1 Title Sheet
C2 Specification Sheet
C3 Site & Grading Plan
C4 Site Geometrics Plan & Pavement Details
C5 Sewer Profiles & Hydralic Data Calculations
C6 Sewer Details
C7 Entrance Warping Plan
C8 Drainage Area Map
C9 Record Plat
PHASE II
C1 Title Sheet
C2 Specification Sheet/Pavement Details
C3 Key Map
C4 Site & Grading Plan
C5 Site Geometrics Plan
C6 Ditch Grading Plan
C7 Sewer Profiles & Hydralic Data Calculations
C8 Sewer Details
C9 Drainage Area Map
C10 Record plat
LANDSCAPING DRAWINGS PREPARED BY AUSTIN TAO & ASSOCIATES, INC., DATED 7/14/98
L1 Landscaping Plan
ARCHITECTURAL DRAWINGS PREPARED BY HENDERSON GROUP, INC., DATED 7/20/98(8/3/98*)
01A201 First Floor Plan Unit "A"*
01A202 First Floor Plan Unit "B"
02A201 Second Floor Plan Unit "A"*
02A201 Second Floor Plan Unit "B"
03A201 Third Floor Plan Unit "A"*
03A201 Third Floor Plan Unit "B"
A203 Reflected Ceiling Plans*
A204 Reflected Ceiling Plans*
A205 Roof Plan Unit "A"*
A206 Roof Plan Unit "B"*
A207 Enlarged Plans, Partition Types*
A208 Enlarged Plans, Partition Types*
A209 Enlarged Plans*
A301 Elevations*
A401 Wall Sections
A402 Wall Sections
A403 Wall Sections*
A404 Atrium Section*
A405 Stair Sections, Details*
A406 Details*
A407 Details*
A501 Room / Door Finish Schedules*
STRUCTURAL DRAWINGS PREPARED BY SMITH/ROBERTS AND ASSOCIATES, INC., DATED 7/9/98
F1.1 Foundation Framing Plan Unit A
F1.2 Foundation Framing Plan Unit B
F2.1 Foundation Details
F2.2 General Foundation/ Concrete Notes & Foundation Details
S1.1 Second Floor Framing Plan Unit A
S1.2 Second Floor Framing Plan Unit B
S1.3 Third Floor Framing Plan Unit A
S1.4 Third Floor Framing Plan Unit B
S1.5 Roof Floor Framing Plan Unit A
S1.6 Roof Floor Framing Plan Unit B
S1.7 Screen Wall Framing Plan
S2.1 General Structural Notes & Structural Details
S2.2 Structural Details
S2.3 Structural Details and Precast Connections
S3.1 Brace Elevations & Details
PROJECT MANUAL PREPARED BY HEDERSON GROUP, INC., DATED 7/20/98
<PAGE>
EXHIBIT 3.02
RULES AND REGULATIONS
1. Tenant shall not deposit any trash, refuse, cigarettes, or other
substances of any kind within or without the Building, except in proper refuse
containers. Tenant shall exercise its best efforts to keep the sidewalks,
entrances, passages, courts, parking areas in and about the Building clean and
free from rubbish.
2. Tenant shall not change any locks in the Building without first
obtaining Landlord's written approval, and if Tenant changes any locks, keys
must be appropriately mastered to Landlord's keying system at Tenants cost.
3. Tenant shall not install any radio, television or other antenna,
satellite dish, loudspeaker, or other device on the roof or exterior walls of
the Building without Landlord's prior written agreement, which consent shall not
be unreasonably withheld, conditioned or delayed. No TV or radio or recorder
shall be played in such a manner as to cause a nuisance.
4. No street parking will be permitted. Visitor and handicapped parking
designations shall be observed.
5. Tenant shall not inscribe any inscription, or post, place or in any
manner display any sign, notice or any advertising matter whatsoever, anywhere
in or about the Building, visible from outside the Building, without first
obtaining Landlord's written consent thereto or except as expressly provided in
the Lease.
6. All exterior signs must be approved by Landlord or someone designated by
it and the actual cost thereof shall be paid by the Tenant, and all such signs
are so placed at the risk of the Tenant.
7. If a Tenant desires telegraphic or telephonic connections in addition to
those installed in connection with the initial construction of the Building and
the interior improvements thereto, the Landlord will direct the electricians as
to where the wires are to be introduced and without such direction, no boring or
cutting for wires shall be permitted. Landlord retains the right to designate
the contractor(s) performing said work and also retains the right to designate
service providers.
8. Tenant shall when leaving the Building at close of business, or at other
times when the Building or Leased Premises are unoccupied, lock doors.
9. The Landlord retains the power to prescribe the weight and proper
position of safes and all other heavy objects. All safes, furniture, boxes and
bulky articles and packages shall be moved into or out of the Building or from
one part of the Building to another under supervision of Landlord and at such
times and according to such regulations as may be designated from time to time
by Landlord and at the entrance designated by the Landlord. Tenant shall be
responsible for all damage to the walls, floors or other parts of the Building
caused by or connected with any moving or delivery into or removal from the
Building of any safe, furniture, boxes or bulky article while in the Building at
Tenant's request. No moving out shall occur without written consent of the
Landlord in each instance. The premises shall not be overloaded.
10. The water closets and other apparatus shall not be used for any purpose
other than those for which they are constructed, and no sweepings, rubbish, rags
or other substances shall be thrown therein. Any damage resulting to them from
misuse shall be borne by Tenant.
11. No room or rooms shall be occupied or used as sleeping or lodging
apartments.
12. No animal or bird shall be allowed in any part of the Building without
the written consent of the Landlord.
13. The Landlord reserves the right to exclude from the Building all
drunken persons, idlers and peddlers, solicitors and generally persons of a
character or conduct to create disturbance and person entering in crowds or in
such unusual numbers as to cause a nuisance.
14. Bicycles or other vehicles shall not be permitted anywhere inside or on
the sidewalks outside of the Building, except in those areas designated by
Landlord for bicycles or vehicle parking.
15. Window shades, blinds or curtains of a uniform building standard, color
and pattern only shall be used throughout the Building to give uniform color
exposure through exterior windows.
16. Landlord shall have the right to prohibit any publicity, advertising or
use of the name of the Building by Tenant which, in Landlord's opinion, tends to
impair the reputation of the Building or its desirability as a building for
offices, and upon written notice from Landlord, Tenant shall refrain from or
discontinue any such publicity, advertising or use of the Building name.
17. There shall not be used in any space, or in the public halls of the
Building, either by any tenant or others, any hand trucks except those equipped
with rubber tires and side guards or such other material handling equipment as
Landlord may reasonably approve.
18. All common areas of the Building will be designated as non-smoking
areas. Any tenant that has a non-smoking policy in their office will be required
to provide a smoking area inside their Leased Premises (with an exhaust system
to the exterior of the Building) or allow employees to smoke only on the rear
loading dock or other area from time to time designated by Landlord (but this
shall not obligate Landlord to so designate a smoking area).
19. These rules and Regulations are in addition to, and shall not be
construed to in any way modify or amend the Lease to the premises in whole or in
part.
<PAGE>
EXHIBIT 3.17
MEMORANDUM OF LEASE
THIS MEMORANDUM OF LEASE, made and entered into as of this _____ day of
August, 1998 by and between DUKE REALTY LIMITED PARTNERSHIP, an Indiana limited
partnership (hereinafter referred to as "Landlord") and EXPRESS SCRIPTS, INC., a
Delaware corporation (hereinafter referred to as "Tenant").
W I T N E S S E T H:
WHEREAS, Landlord and Tenant have heretofore entered into an Office Lease
dated as of August 14, 1998 (hereinafter referred to as the "Lease"); and
WHEREAS, Landlord demised and leased to Tenant, and Tenant hired and took
from Landlord, premises consisting of and described as all of the space in that
certain Building ("Building") known as 13930 Riverport Drive, legally described
as Lot 1B of Duke/Riverport Site No. 1, City of Maryland Heights, St. Louis
County, Missouri (according to the plat thereof recorded in Plat Book______ page
_____ of the St. Louis County, Missouri records) together with parking and
access rights, among others, appurtenant thereto ([including specifically the
exclusive right to use that certain "Restricted Use Area" adjacent to the
aforesaid Lot 1B (including the 329 parking spaces to be constructed thereon)
and the right to the use of an additional 484 of the 1696 parking spaces located
or to be constructed on the Common Property, all as more particularly described
in that certain Declaration of Covenants, Restrictions and Easements for Access
and Parking for Property in the City of Maryland Heights, County of St. Louis,
State of Missouri, Known as Duke/Riverport Site No. 1, recorded at Book ___ page
___ of the St. Louis County, Missouri records (hereinafter the "Sub-Indenture")]
in the Lease and hereinafter referred to collectively as the "Leased Premises");
and
WHEREAS, Landlord and Tenant desire to give notice of the Lease and as to
certain rights and obligations of Landlord and Tenant;
NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS:
1. That the Leased Premises are affected by and subject to the Lease. The
Lease provides that Tenant has the EXCLUSIVE use of landscape, parking and
access areas immediately surrounding the Building --------- (hereinafter "the
Lot 1B Restricted Use Area") (including 329 parking spaces as aforesaid) as well
as the right to the use of an additional 484 of the 1696 parking spaces located
or to be constructed on the "Common Property" (all as more specifically provided
in the Sub-Indenture). Tenant also has a non-exclusive easement for ingress and
egress over and through the Common Property for access to all public or common
roadways within Riverport, along with the non-exclusive right to use in common
with other tenants and owners the Riverport "Common Ground" as more specifically
provided in the Lease;
2. That the initial term of the Lease is to commence on or about the 20th
day of May, 1999 and terminates on the 31st day of October, 2008, subject,
however, to limited rights of termination as in the Lease specifically provided;
3. Tenant has the right and option to extend the Lease for two (2)
additional terms of five (5) years (November 1, 2008 to October 31, 2013 being
the "First Five Year Renewal Term" and November 1, 2013 to October 31, 2018
being the "Second Five Year Renewal Term");
4. Tenant has a Right of First Offer with respect to space in the buildings
located at 14090 and 14042 Riverport Drive (Lots 1 and 2 of Riverport Tract 2
according to the plat thereof recorded in Plat Book 279 Pages 84 and 85 of the
St. Louis County Records, respectively, as more specifically provided in the
Lease;
5. Until December 1, 1999, Tenant has certain rights to purchase a portion
of Lot 2 of Duke/ Riverport Site No. 1, or to lease space in a building to be
constructed on said Lot 2, as more specifically provided in the Lease;
6. Tenant has certain Rights of First Refusal to Purchase the Building;
7. In addition to the terms referred to herein, the Lease contains numerous
other terms, covenants and conditions, and notice is hereby given that reference
should be made to the Lease directly with respect to the details of such items,
covenants and conditions. This Memorandum of Lease is executed in simplified
short form for the convenience of the parties and for the purpose of recordation
in the records of St. Louis County, Missouri, it being intended that this
Memorandum of Lease shall be so recorded and shall give notice of and concern
said Lease only. This Memorandum of Lease shall not have the effect of in any
way modifying, supplementing, or abridging the Lease or any of its provisions as
the same now or may hereafter be in force and effect. In the event of any
inconsistency between this Memorandum of Lease and the Lease, the provisions in
the Lease shall prevail and control the interpretation of the terms thereof.
Reference is hereby made and should be made to the Lease for the specific terms
thereof.
8. Landlord has, in the Lease, and does hereby designate Tenant during the
entire Term of the Lease, as and if extended, as its representative for purposes
of consenting to certain Special Assessments as in SECTION 3.4 of the
Sub-Indenture and in the Lease more specifically provided, and for purposes of
approving any change in the Restricted Use Area adjacent to Lot 1B as in the
Lease and as in SECTION 4.1 of the Sub-Indenture more specifically provided.
IN WITNESS WHEREOF, the undersigned have caused this Memorandum of Lease to
be duly executed as of the day and year first above written.
LANDLORD
DUKE REALTY LIMITED PARTNERSHIP,
an Indiana limited partnership
By: Duke Realty Investments, Inc.,
an Indiana corporation,
its general partner
By:____________________________
W. Gregory Thurman
(SEAL) Vice President and General Manager
ATTEST: St. Louis Office Group
- --------------------------------
James D. Eckhoff
Vice President and Assistant Secretary
TENANT
EXPRESS SCRIPTS, INC.,
a Delaware corporation
By:________________________________________
----------------------------------------
Title
(SEAL)
ATTEST:
- ----------------------------
- ----------------------------
Title
TRUSTEES
TRUSTEES OF DUKE/RIVERPORT SITE NO. 1,
-----------------------------------------
W. Gregory Thurman
-----------------------------------------
Timothy J. McCain
-----------------------------------------
Lisa G. Bulczak
LANDLORD:
STATE OF MISSOURI )
) SS.
COUNTY OF ST. LOUIS )
On this _______ day of August, 1998, before me appeared W. GREGORY THURMAN,
to me personally known, who, being by me duly sworn did say that he is the Vice
President and General Manager, St. Louis Office Group, of DUKE REALTY
INVESTMENTS, INC., a corporation of the State of Indiana, and General Partner in
DUKE REALTY LIMITED PARTNERSHIP, and that the seal affixed to the foregoing
instrument is the corporate seal of said corporation, and that said instrument
was signed and sealed on behalf of said corporation, by authority of its Board
of Directors; and said W. Gregory Thurman acknowledged said instrument to be the
free act and deed of said corporation and said partnership.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official
seal in the County and State aforesaid, the day and year first above written.
------------------------------------------------------
Notary Public
TENANT:
STATE OF MISSOURI )
) SS.
COUNTY OF ST. LOUIS )
On this _______ day of August, 1998, before me appeared
________________________, to me personally known, who, being by me duly sworn
did say that he is the _________________________, of EXPRESS SCRIPTS, INC., a
corporation of the State of Delaware, and that the seal affixed to the foregoing
instrument is the corporate seal of said corporation, and that said instrument
was signed and sealed on behalf of said corporation, by authority of its Board
of Directors; and said _______________________ acknowledged said instrument to
be the free act and deed of said corporation.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official
seal in the County and State aforesaid, the day and year first above written.
---------------------------------------------------
Notary Public
TRUSTEES:
STATE OF MISSOURI )
) SS.
COUNTY OF ST. LOUIS )
On this _______ day of August, 1998, before me appeared W. Gregory Thurman,
Timothy J. McCain and Lisa G. Bulczak, to me personally known, who, being by me
duly sworn did say that they are the TRUSTEES OF DUKE/RIVERPORT SITE NO. 1 and
said Trusties acknowledged the foregoing instrument to be their free act and
deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official
seal in the County and State aforesaid, the day and year first above written.
---------------------------------------------------
Notary Public
EXHIBIT 10.3
SEVENTH AMENDMENT TO LEASE
This Seventh Amendment to Lease (the "Seventh Amendment") is made and
entered into as of this 14th day of August, 1998, by and between DUKE REALTY
LIMITED PARTNERSHIP, an Indiana limited partnership, by and through its general
partner, DUKE REALTY INVESTMENTS, INC., an Indiana corporation, authorized to do
and doing business in the State of Missouri ("Landlord") and EXPRESS SCRIPTS,
INC. ("Tenant").
WHEREAS, Riverport, Inc. and Douglas Development Company - Irvine
Partnership in Commendam (collectively, the "Original Landlord") and Tenant
entered into a lease dated March 3, 1992 (including all Exhibits and Addenda
thereto, the "Original Lease") for a certain 64,000 square foot office/warehouse
building (the "Building") to be designed and constructed by Landlord in
accordance with plans and specifications referenced in the Lease;
WHEREAS, in November, 1992, Original Landlord transferred all its right,
title, and interest in the Building to Sverdrup/MDRC Joint Venture ("Successor
Landlord") and said Successor Landlord assumed all of Original Landlord's duties
and obligations under the Lease;
WHEREAS, Successor Landlord and Tenant entered into a first Amendment to
Lease dated December 29, 1992 (the "First Amendment") whereby Tenant agreed to
pay for the cost of changes to the specifications of the Building in the amount
of $47,987.00 by fully amortizing that amount over the balance of the term of
the Lease;
WHEREAS, Successor Landlord and Tenant entered into a Second Amendment to
Lease dated May 28, 1993 (the "Second Amendment") to add an additional parking
lot for 310 cars to the Premises;
WHEREAS, Successor Landlord and Tenant entered into a Third Amendment to
Lease dated October 15, 1993 (the "Third Amendment") to add an additional 12,365
square feet to the Premises (the "Additional Space"); and
WHEREAS, Successor Landlord and Tenant entered into a Fourth Amendment to
Lease dated March 24, 1994 (the "Fourth Amendment") to increase the size of the
Property and to add an additional 55,000 square feet (the "Expansion Space") to
the Building; and
WHEREAS, Successor Landlord and Tenant entered into a Fifth Amendment to
Lease dated June 30, 1994 (the "Fifth Amendment") whereby Tenant agreed to pay
for the cost of changes to the specifications of the Building in the amount of
$126,911.00 by fully amortizing that amount over the balance of the term of the
Lease and deleted the Additional Space as part of the Premises (but with the
agreement the Third Amendment would constitute a lease in and of itself for the
Additional Space as provided in the Fifth Amendment); and
WHEREAS, Successor Landlord and Tenant entered into a Sixth Amendment to
Lease dated January 31, 1995 (the "Sixth Amendment") whereby Tenant and Landlord
agreed to make the changes set forth in IOC#3 and IOC #4 attached thereto
totaling $61,101.00 of additional cost:
WHEREAS, on or about September 26, 1997, Successor Landlord transferred all
of its right, title and interest under the Lease and in and to the Premises and
in and to the deemed separate Lease ("Additional Space Lease") with respect to
the Additional Space (being approximately 12,365 square feet of space in
Landlord's Building located at 14042 Riverport Drive and commonly known as the
"Riverport Distribution Center") to Landlord; and
WHEREAS, Landlord and Tenant have as of the date hereof entered into a
separate and distinct Office Lease ("Office Lease") for space in a building to
be constructed by Landlord for Tenant's use on Lot 1B of Lot 1 of Duke/Riverport
Site No. 1; and
WHEREAS, Landlord and Tenant wish to extend the term of the Additional
Space Lease until ten (10) days following the Commencement Date of the Office
Lease.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of where are hereby
acknowledged, Landlord and Tenant agree as follows:
1. The termination date of the Additional Space Lease (but said Lease only)
is hereby extended from December 1, 1998 to the later of (i) August 1, 1999 or
(ii) the date which is sixty (60) days following the Commencement Date (as
defined in the Office Lease) of the Office Lease.
2. Except as specifically amended herein, all the terms of the Lease and
the Additional Space Lease shall remain in full force and effect and shall not
be modified hereby.
IN WITNESS WHEREOF, Landlord and Tenant have set forth their hands as of
the day and year first above written.
LANDLORD
DUKE REALTY LIMITED PARTNERSHIP,
an Indiana limited partnership
By: DUKE REALTY INVESTMENTS, INC.,
(SEAL) an Indiana corporation,
its general partner
ATTEST:
By: /s/ Ramsey Maune
Ramsey Maune
/s/ James D. Eckhoff Vice President
James D. Eckhoff St. Louis Industrial Group
Assistant Secretary
TENANT
EXPRESS SCRIPTS, INC.,
(SEAL) a Missouri corporation
ATTEST: By: /s/ Thomas M. Boudreau
Printed: Thomas M. Boudreau
Title: Senior Vice President of Administration
/s/ Keith J. Ebling
Keith J. Ebling
Assistant Secretary
(PLEASE PRINT NAME AND TITLE)
LANDLORD:
STATE OF MISSOURI )
) SS.
COUNTY OF ST. LOUIS )
On this 14th day of August, 1998, before me appeared RAMSEY F. MAUNE, to me
personally known, who, being by me duly sworn did say that he is the Vice
President General Manager St. Louis Industrial Group of DUKE REALTY INVESTMENTS,
INC., general partner of DUKE REALTY LIMITED PARTNERSHIP, an Indiana Limited
Partnership, and that the seal affixed to the foregoing instrument is the
corporate seal of said corporation, and that said instrument was signed and
sealed in behalf of said corporation, by authority of its Board of Directors for
and with the authority of DUKE REALTY LIMITED PARTNERSHIP; and said RAMSEY F.
MAUNE acknowledged said instrument to be the free act and deed of said
corporation and said partnership.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official
seal in the County and State aforesaid, the day and year first above written.
/s/ Laura A. Duncan
Notary Public
TENANT:
STATE OF MISSOURI )
) SS.
COUNTY OF ST. LOUIS )
On this day of August, 1998, before me appeared Thomas M. Boudreau, to me
personally known, who, being by me duly sworn did say that he is the Senior Vice
President of EXPRESS SCRIPTS, INC., a corporation of the State of Missouri, and
that the seal affixed to the foregoing instrument is the corporate seal of said
corporation, and that said instrument was signed and sealed in behalf of said
corporation, by authority of its Board of Directors; and said Thomas M. Boudreau
acknowledged said instrument to be the free act and deed of said corporation.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal in the County and State aforesaid, the day and year first above
written.
Kathleen M. Dolan
Notary Public
EXHIBIT 10.4
EIGHTH AMENDMENT TO LEASE
This Eighth Amendment to Lease (the "Eighth Amendment") is made and entered
into as of this 14th day of August, 1998, by and between DUKE REALTY LIMITED
PARTNERSHIP, an Indiana limited partnership, by and through its general partner,
DUKE REALTY INVESTMENTS, INC., an Indiana corporation, authorized to do and
doing business in the State of Missouri ("Landlord") and EXPRESS SCRIPTS, INC.
("Tenant").
WHEREAS, Riverport, Inc. and Douglas Development Company - Irvine
Partnership in Commendam (collectively, the "Original Landlord") and Tenant
entered into a lease dated March 3, 1992 (including all Exhibits and Addenda
thereto, the "Original Lease") for a certain 64,000 square foot office/warehouse
building (the "Building") to be designed and constructed by Landlord in
accordance with plans and specifications referenced in the Lease;
WHEREAS, in November, 1992, Original Landlord transferred all its
right, title, and interest in the Building to Sverdrup/MDRC Joint Venture
("Successor Landlord") and said Successor Landlord assumed all of Original
Landlord's duties and obligations under the Lease;
WHEREAS, Successor Landlord and Tenant entered into a first Amendment to
Lease dated December 29, 1992 (the "First Amendment") whereby Tenant agreed to
pay for the cost of changes to the specifications of the Building in the amount
of $47,987.00 by fully amortizing that amount over the balance of the term of
the Lease;
WHEREAS, Successor Landlord and Tenant entered into a Second Amendment to
Lease dated May 28, 1993 (the "Second Amendment") to add an additional parking
lot for 310 cars to the Premises;
WHEREAS, Successor Landlord and Tenant entered into a Third Amendment to
Lease dated October 15, 1993 (the "Third Amendment") to add an additional 12,365
square feet to the Premises (the "Additional Space"); and
WHEREAS, Successor Landlord and Tenant entered into a Fourth Amendment to
Lease dated March 24, 1994 (the "Fourth Amendment") to increase the size of the
Property and to add an additional 55,000 square feet (the "Expansion Space") to
the Building; and
WHEREAS, Successor Landlord and Tenant entered into a Fifth Amendment to
Lease dated June 30, 1994 (the "Fifth Amendment") whereby Tenant agreed to pay
for the cost of changes to the specifications of the Building in the amount of
$126,911.00 by fully amortizing that amount over the balance of the term of the
Lease and deleted the Additional Space as part of the Premises (but with the
agreement the Third Amendment would constitute a lease in and of itself for the
Additional Space as provided in the Fifth Amendment); and
WHEREAS, Successor Landlord and Tenant entered into a Sixth Amendment to
Lease dated January 31, 1995 (the "Sixth Amendment") whereby Tenant and Landlord
agreed to make the changes set forth in IOC#3 and IOC #4 attached thereto
totaling $61,101.00 of additional cost; and
WHEREAS, Landlord and Tenant entered into a Seventh Amendment to Lease
dated as of the date hereof (the "Seventh Amendment") whereby Tenant and
Landlord agreed to extend the term of the lease for the Additional Space; and
WHEREAS, Landlord and Tenant have as of the date hereof entered into a
separate and distinct Office Lease ("Office Lease") for space in an adjacent
building to be constructed by Landlord for Tenant's use on adjacent property;
and
WHEREAS, Landlord has requested Tenant's approval to relocate the
Supplemental Lot (as defined in the Second Amendment) such that 254 spaces will
be relocated in a triangular shaped parking lot behind the Premises and another
56 spaces will be relocated in and designated in certain common property parking
area located behind the Premises.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of where are hereby
acknowledged, Landlord and Tenant agree as follows:
1. Landlord shall cause the "Trustees of Duke/Riverport Site No. 1" to
cause to be designated as a "Restricted Use Area" (sometimes herein "RUA"), as
such terms are more specifically defined in the Sub-Indenture described below
[and which said specific RUA shall be herein sometimes referred to as the "Lot
1A Restricted Use Area" or the "Lot 1A RUA" (and shall NOT include other
Restricted Use Areas)], --- those landscape, parking and access areas shown on
EXHIBIT A hereto as "Lot 1A RUA" and made a part hereof, and Landlord shall
cause the "Trustees of Duke/Riverport Site No. 1" to cause all of the areas
identified in the Sub-Indenture as "Common Property" to be designated as such
(including, without limitation, the landscape, parking and access areas located,
or to be located, on the Common Property as shown on EXHIBIT A hereto), all as
more specifically provided in that certain "Declaration of Covenants,
Restrictions and Easements for Access and Parking for Property in the City of
Maryland Heights, County of St. Louis, State of Missouri Known as Duke/Riverport
Site No. 1 (hereinafter "Sub-Indenture"). The areas of the Lot 1A RUA (and the
areas of the Lots 1B and 1C Restricted Use Areas) and the Duke/Riverport Site
No. 1 Common Property are shown on EXHIBIT A hereto. Tenant shall have the
exclusive right to the use and enjoyment of the 752 parking spaces existing and
to be constructed within the Lot 1A RUA (498 parking spaces immediately adjacent
to the Building and 254 parking spaces in the triangular parking area behind the
Building) and in addition thereto shall have the right to the use of an
additional 56 of the 1696 Common Property parking spaces, the location of which
are to be designated as provided herein, some of which are presently existing
and some of which are to be constructed on the Common Property, for a total of
not less than 808 parking spaces. Within ninety (90) days of the date of this
Eighth Amendment, Landlord shall cause the Sub-Indenture (in the form attached
hereto as EXHIBIT B, unless changes thereto are mandated by the City of Maryland
Heights, Missouri, in which case all such changes shall be subject to Tenant's
approval, which said approval shall not be unreasonably withheld, conditioned or
delayed) to be recorded in the Office of the Recorder of Deeds of St. Louis
County, Missouri and shall provide to Tenant a copy of said Sub-Indenture
bearing recording information. Immediately following the recordation of the
Sub-Indenture, Landlord shall cause the Trustees of Duke/Riverport Site No. 1 to
execute a Resolution (in form and substance substantially similar to EXHIBIT C
attached hereto and made a part hereof) whereby the said Trustees designate and
assign 56 parking spaces within the Common Property identified in the Resolution
for the benefit of Landlord and Tenant, the location of which parking spaces are
set forth in Exhibit 1 to the Resolution.
2. Upon construction and completion of the improvements to the parking
areas in accordance with the Office Lease, Tenant shall thereafter use Lot 1A
RUA and the 56 designated parking spaces in the Common Property for its parking
needs as herein provided and for all other permitted purposes under the Original
Lease, as amended, and the Sub-Indenture, and shall no longer use, nor have any
responsibility for, the existing 310 space parking lot (the "Supplemental Lot")
located across Riverport Drive from the Building. Lot 1A RUA and the 56 parking
spaces designated in and identified in the Common Property are hereby made a
part of the "Premises", as such term is defined in the Original Lease.
3. The Trustees appointed pursuant to the terms of the Sub-Indenture
(Trustees of Duke/Riverport Site No. 1) shall sometimes hereinafter be referred
to as the "Sub-Trustees." Upon written request from Tenant, Landlord shall use
all reasonable efforts to cause the Sub-Trustees to enforce the Sub-Indenture.
Notwithstanding the foregoing, if any appointees of Landlord serve as a Trustee
of Duke/Riverport Site No. 1, upon written request from Tenant, Landlord shall
cause such appointees to exercise their rights and duties under the
Sub-Indenture to cause enforcement of the Sub-Indenture. Landlord shall promptly
notify Tenant in writing of any proposed amendment to the Sub-Indenture, and
shall promptly furnish a copy of such proposed amendment to Tenant.
Notwithstanding the foregoing, Landlord shall not consent or agree to any
amendment of the Sub-Indenture or any action thereunder which would affect in a
material, adverse manner Tenant's rights with respect to the Lot 1A RUA or the
Common Property, as in this Original Lease specifically provided, without the
prior written consent of Tenant, which consent shall not be unreasonably
withheld, conditioned or delayed. Notwithstanding anything to the contrary
herein, as between Landlord and Tenant, and in the event of any inconsistency or
conflict between the terms and provisions of the Sub-Indenture and the terms and
provisions of the Original Lease, as amended, the terms and provisions of the
Original Lease, as amended, shall prevail. Landlord hereby designates Tenant as
its representative for purposes of consenting to (i) any Special Assessments
pursuant to Section 3.4 of the Sub-Indenture, (ii) any Special Assessments "for
the initial construction of Common Property improvements, except for those
improvements reasonably necessary for the preservation and protection of the
then existing Common Property" (which latter Special Assessments require the
unanimous consent of the Owners) as in Section 3.4 of the Sub-Indenture
provided, and (iii) any change proposed by the Trustees of Duke/Riverport Site
No. 1 in the Lot 1A RUA as authorized by Section 4.1 of the Sub-Indenture
(provided, however, in each of the foregoing cases such consent shall not be
unreasonably withheld, conditioned or delayed). Said designations shall be
evidenced by specific reference in an amendment to the existing memorandum of
the Original Lease, as amended, and shall be recorded in the real estate records
of St. Louis County, Missouri. Landlord and Tenant agree to execute and record
such a memorandum upon Landlord's replatting of the real property within the
Premises and the recordation of the Sub-Indenture.
4. Tenant shall have no obligation or liability with respect to the costs
of the improvements to be made to Lot 1A RUA and the Common Property; the
obligation for such improvements being Landlord's (as provided in the Office
Lease). Following the construction of the improvements to Lot 1A RUA and the
Common Property as required by the Office Lease, Tenant's maintenance
obligations and other responsibilities with respect to Lot 1A RUA and the 56
parking spaces designated for the use and enjoyment of Tenant within the Common
Property shall be the same (and no more) as with the existing parking adjacent
to the Building and the Supplemental Lot; provided, however, with respect to the
56 parking spaces within the Common Property, Tenant shall reimburse the
Sub-Trustees for a proportionate share of the costs and expenses which would
otherwise be payable by Tenant under the terms of the Original Lease, as
amended, such proportionate share to be based upon Tenant's 56 parking spaces to
the total number of parking spaces within the Common Property (exclusive of
Restricted Use Areas).
5. Anything in the Original Lease, as amended, to the contrary
notwithstanding, if at anytime after the date hereof Landlord or the
Sub-Trustees amend the Sub-Indenture, or take any action thereunder, or amend of
the Resolution which would affect in a material, adverse manner Tenant's rights
with respect to the Lot 1A RUA or the Common Property (as said rights pertain to
parking and access) (but for the purposes of this paragraph, parking and access
rights only) (as in paragraph 1 above hereof provided), then the parties hereto
agree that such shall constitute a default by Landlord hereunder and shall be
deemed to be a "construction eviction" of Tenant from the Premises, entitling
Tenant to all rights and remedies hereunder, at law or in equity provided in the
case of such a "constructive eviction" and default. The specified remedies
herein shall be non-exclusive and in addition to any other remedies available to
Tenant at law or in equity.
6. Except as specifically amended herein, all the terms of the Lease and
the Additional Space Lease shall remain in full force and effect and shall not
be modified hereby.
IN WITNESS WHEREOF, Landlord and Tenant have set forth their hands as of
the day and year first above written.
LANDLORD
DUKE REALTY LIMITED PARTNERSHIP,
an Indiana limited partnership
By: DUKE REALTY INVESTMENTS, INC.,
(SEAL) an Indiana corporation,
its general partner
ATTEST:
By: /s/ Ramsey Maune
Ramsey Maune
/s/ James D. Eckhoff Vice President
James D. Eckhoff St. Louis Industrial Group
Assistant Secretary
TENANT
EXPRESS SCRIPTS, INC.,
(SEAL) a Missouri corporation
ATTEST: By: /s/ Thomas M. Boudreau
Thomas M. Boudreau
Senior Vice President of
Administration
/s/ Keith J. Ebling
Keith J. Ebling, Assistant
Secreaty
(PLEASE PRINT NAME AND TITLE)
LANDLORD:
STATE OF MISSOURI )
) SS.
COUNTY OF ST. LOUIS )
On this 14th day of August, 1998, before me appeared RAMSEY F. MAUNE, to me
personally known, who, being by me duly sworn did say that he is the Vice
President General Manager St. Louis Industrial Group of DUKE REALTY INVESTMENTS,
INC., general partner of DUKE REALTY LIMITED PARTNERSHIP, an Indiana Limited
Partnership, and that the seal affixed to the foregoing instrument is the
corporate seal of said corporation, and that said instrument was signed and
sealed in behalf of said corporation, by authority of its Board of Directors for
and with the authority of DUKE REALTY LIMITED PARTNERSHIP; and said RAMSEY F.
MAUNE acknowledged said instrument to be the free act and deed of said
corporation and said partnership.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official
seal in the County and State aforesaid, the day and year first above written.
/s/ Laura A. Duncan
Notary Public
TENANT:
STATE OF MISOURI )
) SS.
COUNTY OF ST. LOUIS )
On this 14th day of August, 1998, before me appeared Thomas M. Boudreau, to
me personally known, who, being by me duly sworn did say that he is the Senior
Vice President of Administration of EXPRESS SCRIPTS, INC., a corporation of the
State of Missouri, and that the seal affixed to the foregoing instrument is the
corporate seal of said corporation, and that said instrument was signed and
sealed in behalf of said corporation, by authority of its Board of Directors;
and said Thomas M. Boudreau acknowledged said instrument to be the free act and
deed of said corporation.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official
seal in the County and State aforesaid, the day and year first above written.
Kathleen M. Dolan
Notary Public
<PAGE>
EXHIBIT A
TO EIGHTH AMENDMENT TO LEASE
(TO LOT 1A RUA)
(This Exhibit contains a pictorial of Site 1)
<PAGE>
EXHIBIT B
TO EIGHTH AMENDMENT TO LEASE
DECLARATION OF COVENANTS, RESTRICTIONS AND EASEMENTS
FOR ACCESS AND PARKING FOR PROPERTY
IN THE CITY OF MARYLAND HEIGHTS,
COUNTY OF ST. LOUIS, STATE OF MISSOURI,
KNOWN AS DUKE/RIVERPORT SITE NO. 1
DUKE REALTY LIMITED PARTNERSHIP, DECLARANT
August ____, 1998
INDEX
ARTICLE/SECTION PAGE
NUMBER CAPTION NUMBER
I PROPERTY SUBJECT TO DECLARATION 3
1.1 Existing Property 3
1.2 Additions To Existing Property 3
II TRUSTEES 4
2.1 Membership 4
2.2 Qualification 4
2.3 Election Of Trustees 4
2.4 Term Of Office 5
2.5 Procedures 6
2.6 Duties And Powers 6
2.7 Power To Assess 7
2.8 Eminent Domain 7
III ASSESSMENTS 8
3.1 Assessment 8
3.2 Annual Assessments For Common Property 8
3.3 Restricted Use Area Assessments 10
3.4 Special Assessments 10
3.5 Notice To Owners 10
3.6 Commencement Date Of Annual Assessment 11
3.7 Due Date Of Assessments 11
3.8 Owner's Personal Obligation For
Payment Of Assessments 11
3.9 Assessment Lien And Foreclosure 12
3.10 Common Property Exempt 13
IV COMMON PROPERTY 13
4.1 Establishment Of Common Property And Restricted
Use Areas ("RUA") 13
4.2 Easements For The Use Of Common Property And RUA 14
4.3 Title To Common Property 15
4.4 Extent Of Easements 16
4.5 Trustees Management Of Common Property 16
4.6 Maintenance Of RUA And Common Property 17
4.7 Construction Of Parking Structures and Additional
Parking Areas 21
V MISCELLANEOUS PROVISIONS 23
5.1 Duration 23
5.2 Amendment 23
5.3 Enforcement 24
5.4 Severability Of Provisions 25
5.5 Notice 25
5.6 Title 26
5.7 Singular And Plural 26
5.8 Binding Effect 26
5.9 Conflicting Terms 16
<PAGE>
THIS DECLARATION OF COVENANTS, RESTRICTIONS AND EASEMENTS FOR ACCESS AND
PARKING ("Declaration"), is made as of this ______ day of _____________, 1998,
by W. Gregory Thurman, Timothy J. McCain and Lisa G. Bulczak, Trustees of
Duke/Riverport Site No. 1 ("Trustees"), and Duke Realty Limited Partnership, a
partnership organized pursuant to the laws of the State of Indiana ("Duke
Realty").
WITNESSETH:
WHEREAS, Duke Realty is the owner of certain real property located in St.
Louis County, Missouri known as Lot 1 of Duke/Riverport Site No. 1, pursuant to
the Plat thereof recorded at Book _____ Page _____ of the St. Louis County,
Missouri Records (herein sometimes referred to as " Lot 1 of Duke/Riverport Site
No. 1" and/or the "Property"); and
WHEREAS, Duke/Riverport Site No. 1 is subject to that certain First Revised
and Restated Trust Indenture for the Property known as Riverport in the City of
Maryland Heights, County of St. Louis, State of Missouri, dated August 10, 1987,
and recorded in Book 8191, Page 380 in the St. Louis County Records, which was
amended by (i) an Amendment to the First Revised and Restated Trust Indenture
for the Property known as Riverport in the City of Maryland Heights, County of
St. Louis, State of Missouri, dated November 4, 1988, and recorded in Book 8465,
Page 1068 of the St. Louis County Records, (ii) a Second Amendment to the First
Revised and Restated Trust Indenture for the Property known as Riverport in the
City of Maryland Heights, County of St. Louis, State of Missouri, dated June 12,
1991, and recorded in Book 9013, Page 1955 of the St. Louis County Records,
(iii) another Second Amendment to the First Revised and Restated Trust Indenture
for the Property known as Riverport in the City of Maryland Heights, County of
St. Louis, State of Missouri dated July 21, 1994, and recorded in Book 10263,
Page 1872 of the St. Louis County Records, (iv) a Third Amendment to the First
Revised and Restated Trust Indenture for the Property known as Riverport in the
City of Maryland Heights, County of St. Louis, State of Missouri dated December
18, 1995 and recorded in Book 10694, Page 1868, St. Louis County Records, (v) a
Fourth Amendment to the First Revised and Restated Trust Indenture for the
Property known as Riverport in the City of Maryland Heights, County of St.
Louis, State of Missouri dated March 5, 1997 and recorded in Book 11104, Page
992, St. Louis County Records, and (vi) a Fifth Amendment to the First Revised
and Restated Trust Indenture for the Property known as Riverport in the City of
Maryland Heights, County of St. Louis, State of Missouri dated September 25,
1997 and recorded in Book 11304, Page 1396, St. Louis County Records (said Trust
Indenture, as heretofore and hereafter amended, being hereinafter referred to as
the "Riverport Indenture");
WHEREAS, Duke Realty is desirous of subjecting the said Lot 1 of
Duke/Riverport Site No. 1 to the further covenants, restriction and easements
hereinafter set forth, to insure for all present and future owners of any part
of said Lot 1 of Duke/Riverport Site No. 1 and their respective successors,
assigns, invitees, agents, employees, tenants, contractors and licensees certain
access and parking rights, each and all of which is and are for the benefit of
said Property and shall inure to the benefit of and pass with said Property and
each and every part thereof; and
WHEREAS, Duke Realty desires to hereby convey by special warranty deed
certain rights and interests in the hereinafter specified common, access and
parking areas to the Trustees hereinafter named and to define the right, title,
interests, duties, privileges, easements, and liabilities with respect thereto
and to provide for the improvement, maintenance, management, control and
operation of such common, access and parking areas for the mutual benefit of the
owners of all or any part of Lot 1 of Duke/Riverport Site No. 1.
NOW, THEREFORE, Duke Realty hereby declares that Lot 1 of Duke/Riverport
Site No. 1 and each and every part thereof, shall be held, transferred, sold,
conveyed and occupied subject to the covenants, restrictions and easements
hereinafter set forth.
ARTICLE I
PROPERTY SUBJECT TO DECLARATION
1.1 EXISTING PROPERTY. The real property which is, and shall be held,
transferred, sold, conveyed, and occupied subject to this Declaration is located
in St. Louis County, Missouri, is known as Lot 1 of Duke/Riverport Site No. 1,
and is herein sometimes referred to as such and/or the "Property," and each and
every such lot or parcel from time to time located within said Property shall be
hereinafter referred to as a "Parcel" (including, but not limited to Lots 1A, 1B
and 1C of Lot 1 of Duke/Riverport Site No. 1.
1.2 ADDITIONS TO EXISTING PROPERTY. Duke Realty, its successors or assigns,
may from time to time add to the Property now subject to this Declaration,
additional lands; provided, however, that said additions may be used only for
the same or similar purposes as the existing Property; that said additions be
contiguous to the existing Property or subsequent additions thereto; that said
additions include sufficient additional parking so that, at a minimum, the
minimum parking requirements as then prescribed by the zoning ordinances of the
City of Maryland Heights or other governmental authority having jurisdiction
over the Property will be met; and that if said additions be made by any person,
firm, or corporation other than Duke Realty or its successors and/or assigns,
that the Trustees hereinafter named give their prior written consent thereto,
which consent shall not be unreasonably withheld, conditioned or delayed. The
additions authorized under this Article I shall be made by executing and
delivering to the Trustees hereinafter named and filing of record in St. Louis
County, Missouri, a Supplementary Declaration which shall extend the provisions
of this Declaration to such additional property. Such Supplementary Declarations
may contain additional and complimentary provisions as may be necessary to
reflect the different character, if any, of the added property as are not
inconsistent with the scheme of this Declaration.
ARTICLE II
TRUSTEES
2.1 MEMBERSHIP. There is established a Board of Trustees, which shall
consist of three (3) members who shall serve without remuneration. The Trustees
shall sometimes be referred to as the "Trustees of Duke/Riverport Site No. 1" or
the "Trustees."
2.2 QUALIFICATION. Except as specifically provided otherwise, to qualify as
a member of the Board of Trustees, a person must be an Owner (as defined
herein), an officer of an Owner or the duly appointed representative of an
Owner. The owners of fee simple title to the Parcels comprising Duke/Riverport
Site No. 1 shall sometimes be referred to individually as the "Owner" and
collectively as the "Owners."
2.3 ELECTION OF TRUSTEES. The Owners of Parcels in Duke/Riverport Site No.
1 (and if additions to the Property are made as provided in SECTION 1.2 hereof,
the Owners of all Parcels then comprising the Property) shall elect the
Trustees. Each Parcel shall be entitled to a vote(s) based upon the number of
parking spaces located in the "Common Property" (but not the "Restricted Use
Areas") (as said terms are hereinafter defined) from time-to-time designated
and/or assigned by the Trustees to that Parcel in relation to the total number
of parking spaces then existing in the Common Property (but not including the
Restricted Use Areas) calculated as a percentage (hereinafter referred to as the
Owner's "Pro-Rata Interest"). Trustees shall be elected at an annual meeting of
the Owners to be called by the Trustees giving written notice to the Owners of
same at least thirty (30) days in advance. Owners of at least sixty percent
(60%) of the Pro-Rata Interest, present in person or represented by written
proxy, shall constitute a quorum for the election of Trustees. All proxies must
be in writing, signed by the voting Owner granting the proxy, and filed with the
Trustees prior to the election. The exact procedure of voting shall be as
determined by the Trustees from time-to-time consistent with the Owners'
Pro-Rata Interests. When two or more persons or entities hold an undivided
interest in any Parcel, the vote(s) for said Parcel shall be made as they among
themselves determine in their sole discretion. In all said elections, Owners may
cast their votes for as many Trustees to be elected or may cumulate their vote
and give one candidate as many votes as the number of Trustees to be elected
multiplied by the number of votes, or to distribute the votes on the same
principle among as many candidates as said Owner may see fit (cumulative
voting).
2.4 TERM OF OFFICE. The Trustees presently serving hereunder and who shall
serve until their successors are duly elected or appointed, are: W. Gregory
Thurman Timothy J. McCain Lisa G. Bulczak The term of office for each Trustee
shall be one (1) year and shall run from the first day of January through the
thirty first day of December of that year (except that the term of the Trustees
herein named shall commence on the date hereof and shall continue until December
31, 1998). Upon the expiration of the term of a Trustee, or whenever any one or
more of the Trustees or their successors appointed as herein provided shall die,
be unable to act, resign, or shall cease to have an interest in the above
described property as an Owner, an officer of an Owner, or a duly appointed
representative of an Owner, as applicable, his replacement shall be elected by
the then Owners for the remainder of his term. Should said Owners fail, within
thirty (30) days, to elect a replacement, then the remaining Trustee(s) shall
appoint an interim Trustee(s) to serve for the unexpired term.
2.5 PROCEDURES. The Trustees shall keep minutes of their proceedings. Any
Trustee may call a meeting of the Trustees upon fifteen (15) days' written
notice thereof; provided, however, that such notice may be waived by unanimous
consent of the Trustees. Any two Trustees at any meeting regularly called may
exercise the powers of the Trustees, except for actions requiring unanimous
consent hereunder. Two Trustees shall constitute a quorum. Action of the
Trustees shall be by a majority vote of the Trustees except for actions
requiring unanimous consent hereunder. The Trustees shall serve without pay,
except for expenses reasonably incurred.
2.6 DUTIES AND POWERS. The Trustees shall have the right, power, and
authority to enforce the covenants, restrictions and easements herein set forth,
to provide for the management, maintenance and any alteration or improvement of
the Common Property which they may deem necessary or desirable, to establish
such procedures and policies necessary or deemed desirable to provide for the
general welfare of the Owners and the tenants of the Owners, in accordance with
the purpose and intent of this Declaration, to enter into contracts as may be
necessary or desirable to carry out the provisions of this Declaration
(including the power to enter into long-term contracts extending beyond the term
of the Trustees then in office), and to retain the services of professionals as
deemed necessary by the Trustees. The powers of the Trustees herein set forth
are intended to augment rather than to restrict the authority of the Trustees.
Any other provision of this Declaration to the contrary, if any,
notwithstanding, the Trustees shall make suitable provision for compliance with
(i) all subdivision and other ordinances, rules and regulations of St. Louis
County, Missouri, the City of Maryland Heights, Missouri and/or such other
governmental entity then having jurisdiction over the Property, and (ii) the
Riverport Indenture.
2.7 POWER TO ASSESS. The Trustees shall have the right, power, and
authority to levy and collect assessments against the Property, as hereinafter
specifically provided, for the purpose of carrying out their powers and duties
herein specified.
2.8 EMINENT DOMAIN. In the event it shall become necessary for any public
agency to acquire all or any part of the Common Property (including the
Restricted Use Areas) conveyed to the Trustees, for any public purpose, the
Trustees are hereby authorized to negotiate with such public agency for such
acquisition and to execute instruments necessary for that purpose, including
deeds of conveyance. Should acquisitions by eminent domain become necessary,
only the Trustees need be made parties. To the extent reasonably necessary to
carry out the powers and duties herein specified, the proceeds received shall be
held by the Trustees for the benefit of those entitled to the use of the Common
Property. All excess proceeds (after deducting all reasonable expenses incurred
by the Trustees in any such eminent domain proceeding), if any, as determined by
the Trustees in their sole discretion, shall be distributed to the Owners as
their interests appear; providing, however, that if there are mortgage liens of
record, said excess proceeds shall be distributed jointly to said Owner(s) and
its lender(s). Notwithstanding the above, all excess proceeds derived from the
taking of any Restricted Use Areas (after deducting all reasonable expenses
incurred by the Trustees in any such eminent domain proceeding) shall be
distributed to the Owners to which those Restricted Use Areas have been
assigned; providing, however, that if there are mortgage liens of record, said
excess proceeds shall be distributed jointly to said Owner(s) and its lender(s).
ARTICLE III
ASSESSMENTS
3.1 ASSESSMENT. Each Owner of a Parcel in the Property by acceptance of a
deed therefor, whether or not it shall be so expressed in any such deed or other
conveyance, shall be deemed to covenant and agree to pay (i) annual assessments
or charges, not including Restricted Use Area assessments; (ii) Restricted Use
Area assessments; and (iii) special assessments, such assessments to be
established and collected from time-to-time as hereinafter provided. The
foregoing assessments shall to be in addition to any other assessments
established under this Declaration or under the Riverport Indenture.
3.2 ANNUAL ASSESSMENTS FOR COMMON PROPERTY. By December 1st of each year,
the Trustees shall estimate the expenses to be incurred by the Trustees in
connection with the Common Property (exclusive of the Restricted Use Areas)
pursuant to the terms hereof for the ensuing calendar year and shall notify each
Owner in writing as to the amount of said estimate; provided, however, a failure
by the Trustees to so estimate and notify by said date shall not relieve any
Owner from responsibility for payment of assessments. The estimated annual cash
required by the Trustees to meet its aforesaid expenses during the ensuing
calendar year shall then be assessed against the Owners according to each
Owner's Pro-Rata Interest (as defined in SECTION 2.3 hereof). On the first day
of January of each year each Owner shall be obligated to pay to the Trustees, or
as the Trustees may direct, the said annual assessment. In the event that, at
any time during the year, the Trustees shall determine that the operating
expenses to be incurred by the Trustees in connection with the Common Property
(exclusive of the Restricted Use Areas) pursuant to the terms hereof during the
remainder of the calendar year will be in excess of its December 1st estimate,
the Trustees may revise its said estimate for the balance of the calendar year
and the Trustees shall, within thirty (30) days of such revision, notify the
Owners in writing, as to the amount of the revised estimate, with the
particulars therein itemized. The revised cash required by the Trustees to meet
its aforesaid revised expenses during the remainder of the then calendar year
shall then be assessed against the Owners according to each Owner's Pro-Rata
Interest. On the first day of the following full month, each Owner shall be
obligated to pay to the Trustees the full additional annual assessment amount
due based upon the revised estimate. The first annual assessment for the Common
Property (exclusive of the Restricted Use Areas) for the initial calendar year
(or partial calendar year, as the case may be) shall be established by the
majority vote of the Trustees. Subsequent annual assessments for the Common
Property (exclusive of the Restricted Use Areas) may be increased only by
majority vote of the Trustees; provided, however, the following increases shall
be automatically assessed by the Trustees and shall not require a vote by the
Trustees or the approval of the Owners: (i) an increase of up to ten percent
(10%) of the immediately preceding annual assessment (annualized if the
immediately preceding assessment was for a partial calendar year) shall be
automatically allowed in the amount of estimated increase in the estimated cash
requirements (but not to exceed 10%), and (ii) increases due to an increase in
taxes assessed or levied against the Common Property and/or improvements to the
Common Property (exclusive in each case of the Restricted Use Areas). All other
increases in the annual assessments must also be approved by a majority of the
Owners. On or before March 31 of each calendar year, the Trustees shall
determine the actual cash expenditures for the previous year, and should a
surplus exist at the end of any calendar year (including the initial partial
calendar year), the Trustees shall reduce the next total annual assessment by an
amount equal to said surplus less amounts which the Trustees then consider
reasonably necessary as a reserve for future needs. Should there be a deficit at
the end of any year, the Trustees shall increase the next annual assessment by
an amount equal to said deficit which amount shall be paid immediately.
3.3 RESTRICTED USE AREA ASSESSMENTS. Restricted Use Area assessments may be
assessed against the Owner benefited by such Restricted Use Areas as set forth
herein by the majority vote of the Trustees and do not require the approval of
the Owners.
3.4 SPECIAL ASSESSMENTS. In addition to the annual assessments for the
Common Property (exclusive of the Restricted Use Areas) and the Restricted Use
Area Assessments herein authorized, the Trustees may, by majority vote, levy in
any assessment year or years a special assessment for the purpose of defraying,
in whole or in part, the cost of any reconstruction, unexpected repair or
replacement of any Common Property improvements, including the necessary
fixtures and personal property related thereto. Special assessments must also be
approved by a majority of the Owners; provided, however that under no
circumstances may a special assessment be made for the initial construction of
Common Property improvements, except for those improvements reasonably necessary
for the preservation and protection of the then existing Common Property,
without the unanimous consent of the Owners (or the consent of any tenant or
other person, if any, to whom the Owner or Owners of a specific Parcel have from
time-to-time specifically delegated said Owner's or Owners' specific right to so
consent in a writing placed of record with the St. Louis County Recorder of
Deeds).
3.5 NOTICE TO OWNERS. Approval by Owners as herein required may be with or
without a meeting. If without a meeting, the necessary written consent of the
Owners shall be made a part of the record of proceedings of the Trustees. If a
meeting is called for such purpose, written notice of same shall be given to all
Owners at least thirty (30) days in advance and shall set forth the purpose of
the meeting and the amount of the increase proposed or of the special assessment
and the proposed due and delinquent dates thereof as the case may be.
3.6 COMMENCEMENT DATE OF ANNUAL ASSESSMENT. The first annual assessments
provided for herein shall commence with the year 1999 and shall continue
thereafter from year to year.
3.7 DUE DATE OF ASSESSMENTS. The annual assessments shall become due and
payable on the first day of January and shall become delinquent if not paid by
the fifteenth of that month. The due date and delinquent date of any Restricted
Use Area assessment or special assessment shall be fixed in the resolution
authorizing such assessment. Should a Parcel become subject to assessments after
January 1 in any year, and should an annual or special assessment have been
levied for that year, then such assessment shall be adjusted so that such Parcel
shall be charged with that portion of the assessment prorated for the balance of
that year.
3.8 OWNER'S PERSONAL OBLIGATION FOR PAYMENT OF ASSESSMENTS. The annual
assessments, Restricted Use Area assessments and special assessments provided
for herein shall be the personal and individual debt of the Owner(s) of the
Parcel on the date same shall become due. No Owner may exempt himself from
liability for such assessments. In the event of default in the payment of any
assessment, when due, annual, Restricted Use Area or special, the Owner(s) of
the Parcel shall be obligated to pay interest from the due date on the unpaid
amount at the prime rate on January 1 of each year (and adjusted on January 1
each year thereafter), at the Mercantile Bank of St. Louis, Missouri (or any
other bank the Trustees may from time-to-time designate) plus three percent (3%)
per annum, together with all costs and expenses of collection, whether or not
suit is instituted, including reasonable attorneys' fees.
3.9 ASSESSMENT LIEN AND FORECLOSURE. Notwithstanding any provision to the
contrary herein provided, if any, all sums assessed in the manner herein
provided but unpaid, shall, together with interest, costs, expenses, and
attorneys' fees, become a continuing lien and charge on the Parcel covered by
such assessment, or in the case of a lien arising out of unpaid Restricted Use
Area assessments, a lien on the Parcel benefited by such Restricted Use Area,
which shall bind such Parcel in the hands of the Owner(s), his heirs, devisees,
personal representatives, successors and assigns. The aforesaid lien shall take
precedence over and be superior to all other liens and charges against the said
Parcel, including, but not limited to any and all mortgages and deeds of trust,
except the lien of assessments under the Riverport Indenture. Sale or transfer
shall not affect any lien created pursuant hereto. To evidence the aforesaid
assessment lien, the Trustees shall prepare a written notice of assessment lien
setting forth the amount of the unpaid indebtedness, the name of the Owner(s) of
the Parcel covered by such lien and a description of the Parcel. Such notice
shall be signed by one of the Trustees and shall be filed and recorded in the
offices of the Circuit Clerk of St. Louis County, Missouri and the Recorder of
Deeds of St. Louis County, Missouri. A copy of said notice shall be sent by
certified mail, return receipt requested, to the last known record address of
each Owner of the affected Parcel, of each tenant with a lease of record
affecting said Parcel, and of each person or entity having a mortgage lien of
record affecting said Parcel. Such lien for payment of assessments may be
enforced by foreclosing on the defaulting Owner's Parcel by the Trustees in like
manner as a mortgage on real property subsequent to the recording of a notice of
assessment lien as provided above, or the Trustees may institute suit against
the Owner(s) personally obligated to pay the assessment and/or for foreclosure
of the aforesaid lien judicially. In any foreclosure proceeding, whether
judicial or non-judicial, the Owner(s) shall be required to pay the costs,
expenses, and reasonable attorney's fees incurred. The Trustees shall have the
power to bid on the Parcel at foreclosure or other legal or equitable sale and
to acquire, hold, lease, mortgage, convey or otherwise deal with the same. Upon
payment of such assessment so recorded, together with interest, costs, expenses
and attorneys' fees, satisfaction thereof shall be acknowledged and recorded by
the Trustees at the expense of the Owner(s) against whom the lien was filed.
3.10 COMMON PROPERTY EXEMPT. The Common Property owned by the Trustees and
which has not been designated as a Restricted Use Area subject to this
Declaration shall be exempt from the assessments, charges and liens created
herein; provided, however no property hereunder shall be exempt from assessments
or the lien thereof under the Riverport Indenture. The Trustees, as record
owners, of the Common Property shall not be considered "Owners" for any purposes
hereunder.
ARTICLE IV
COMMON PROPERTY
4.1 ESTABLISHMENT OF COMMON PROPERTY AND RESTRICTED USE AREAS. The "Common
Property" (i) shall be all of Lot 1 of Duke Riverport Site No. 1, except Lots
1A, 1B and 1C and is herein referred to as such, (ii) shall be owned by the
Trustees, and (iii) shall be subject to the terms and conditions contained
herein. Notwithstanding anything herein to the contrary, those areas of the
Common Property which are from time-to-time reserved for the exclusive use
(subject only to reasonable utility easements as are necessary to provide
underground utility service to the Property and rights reserved herein to the
Trustees) of certain Parcels, including but not limited to parking areas,
parking garages, lawn areas, landscaping, lighting, ponds, fountains and other
amenities adjacent to and/or from time-to-time designated for the exclusive use
of a certain Parcel or Parcels shall be considered "Restricted Use Areas," and
shall be governed by the terms and conditions hereof relating to Restricted Use
Areas. For the purpose of establishing Restricted Use Areas, the Trustees shall
have the power to grant non-perpetual easements to the Restricted Use Areas for
the exclusive benefit of one or more Parcels, but the Trustees shall not be
required to do so but rather may designate an area as a Restricted Use Area
herein or hereby or in an amendment hereto or by a separate writing of record
designating an area as such. Restricted Use Areas as of the date of this
Declaration hereby assigned and designated are shown on Exhibit A hereto and may
be from time-to-time hereafter changed or modified by an amendment to this
Declaration or by way of another duly recorded instrument designating an area as
a Restricted Use Area. The Trustees shall not, however, change or modify the
Restricted Use Areas designated for the exclusive use of a particular Parcel
without first obtaining the prior written consent of the Owner or Owners of said
Parcel (as the case may be) (or the consent of any tenant or other person, if
any, to whom the Owner or Owners of a specific Parcel have from time-to-time
specifically delegated said Owner's or Owners' specific right to so consent in a
writing placed of record with the St. Louis County Recorder of Deeds) affected
by such change or modification.
4.2 EASEMENTS FOR THE USE OF COMMON PROPERTY AND RESTRICTED USE AREAS.
Every Owner and tenant of the Property (herein sometimes referred to
individually as the "Benefited Party" and collectively as the "Benefited
Parties") and their respective successors and assigns, invitees, agents,
employees, tenants, contractors and licensees shall have a right and
non-exclusive perpetual easement of enjoyment in and to the Common Property
(exclusive of the Restricted Use Areas as from time-to-time designated) for the
limited purpose of ingress, egress, parking and loading, subject only to such
reasonable rules and regulations as may from time to time be established by the
Trustees, including, but not limited to the designation and assignment of
certain parking areas within the Common Property (exclusive of the Restricted
Use Areas) for the benefit of the respective Owners and occupants of the Parcels
and the establishment of Restricted Use Areas. In addition, every Owner and
tenant of a specified Parcel to whom a Restricted Use Area has been specifically
assigned and designated and their respective invitees, agents, employees,
tenants, contractors and licensees shall have a right and exclusive,
non-perpetual easement of enjoyment in and to the specified Restricted Use Area
(but said specified Restricted Use Area only) for the purposes of ingress,
egress, parking and loading and such other purposes as are consistent herewith
and not in violation of any applicable laws and/or regulations and/or the
Riverport Indenture, subject only to such reasonable rules and regulations as
may from time to time be established by the Trustees which are consistent with
the provisions hereof. In addition, the Trustees shall grant to the Owners of
each Parcel, and third parties as is reasonably necessary, such non-exclusive
utility easements as are reasonably necessary to provide underground utility
service to the Parcels and Common Property.
4.3 TITLE TO COMMON PROPERTY. Title to the Common Property, including the
Restricted Use Areas, shall be and remain with the Trustees. Any conveyance or
change of ownership of all or any part of a Parcel in Duke/Riverport Site No. 1
shall convey with it a beneficial interest in the Common Property (exclusive of
the Restricted Use Areas) and in the Restricted Use Area assigned to a
particular Parcel, if any, but no such interest in the Common Property or a
Restricted Use Area shall be conveyed except in conjunction with a conveyance of
a Parcel. Any conveyance of all or any part of a Parcel shall carry with it all
rights and interests in and to the Common Property (exclusive of the Restricted
Use Areas) and in and to the Restricted Use Area assigned to a particular
Parcel, if any, although such is not expressly mentioned; provided, however,
that no right or power conferred upon the Trustees shall be abrogated.
4.4 EXTENT OF EASEMENTS. The rights and easements of enjoyment in the
Common Property (including the Restricted Use Areas) created hereby shall be
subject to the following: (a) The right of the Trustees to prescribe reasonable
rules and regulations for the use, enjoyment, improvement, and maintenance of
the Common Property and Restricted Use Areas; (b) Subject to the provisions of
SECTION 4.1 hereof, the right of the Trustees to purchase, alter, and use the
Common Property and Restricted Use Areas, or any part thereof; (c) The right of
the Trustees to sell or convey the Common Property and Restricted Use Areas, or
any part thereof, in the event of condemnation or taking by a public
agency972451523; (d) The right of the Trustees to designate Restricted Use Areas
or grant easements to Restricted Use Areas for the exclusive benefit of one or
more Parcels; and (e) All other rights reserved to the Trustees in this
Declaration and all rights reserved in the Riverport Indenture but only to the
extent that such rights are applicable to the Property.
4.5 TRUSTEES MANAGEMENT OF COMMON PROPERTY. Except as otherwise provided
herein, the Common Property shall be for the benefit and use of all Owners and
future Owners in Duke/Riverport Site No. 1 and it is deemed to be in the best
interests of all Owners and future Owners to vest in the Trustees the exclusive
powers to manage, control, improve, maintain and keep in repair the Common
Property. The Trustees are (subject to the limitations with respect to the
Restricted Use Areas herein specifically provided) therefore authorized and
empowered to: (i) keep the Common Property open at all times for the benefit and
use of the Benefited Parties; (ii) secure to such Benefited Parties the rights,
benefits and advantages of having ingress and egress from and to, over, along
and across the Common Property and of frequenting and using and enjoying the
Common Property in such manner and to such an extent as will enable such Owners,
their lessees, tenants, employees and customers to equitably enjoy and mutually
derive the maximum benefit from the Common Property, taking into account the
character of the occupancy and the use to which the Parcels are put from
time-to-time; (iii) assign to the Owners of Parcels benefited by the Restricted
Use Areas, the duty to manage, control, improve, maintain and keep in repair
such Restricted Use Areas, in a manner consistent with this Declaration, the
Riverport Indenture and subject to the rights reserved by the Trustees herein;
(iv) make and enforce reasonable rules and regulations governing the use of the
Common Property; (v) to employ attendants; to require identification; (vi) to
allot or assign spaces; to make charge, in a non-discriminatory manner, for
parking spaces where appropriate; (vii) to reconfigure the parking areas; and
(viii) to restrict the use of certain parking areas and to make any other
reasonable regulations for the general welfare of all of the Benefited Parties,
to the end that so far as is reasonably possible of accomplishment, the
Benefited Parties collectively shall enjoy the maximum and most beneficial use
of the Common Property. It is understood and agreed by the Benefited Parties
that it will not be possible for the Trustees to so manage the Common Property
that the use is necessarily proportionate or equal among the Owners.
Notwithstanding anything herein to the contrary, each Benefited Party shall at
all times be entitled to the minimum number of parking spaces required for
general office use by the zoning ordinances of the City of Maryland Heights,
Missouri or other governmental authority then having jurisdiction over the
Property.
4.6 MAINTENANCE OF RESTRICTED USE AREAS AND COMMON PROPERTY. (a) Each Owner
shall be responsible for the maintenance and repair of the Restriced Use Areas
designated for the use of each Owner's Parcel and shall: (i) keep all portions
of the Restricted Use Areas desigated for the use of the Owner's Parcel in good
order and repair and free of litter, weeds, trash and debris; (ii) maintain all
lawn areas and landscaping within each portion of the Restricted Use Areas
designated for the use of the Owner's Parcel, including regular mowing of all
lawn areas and trimming, maintenance and, when necessary, replacement of trees
and shrubbery; (iii) police and protect the Restricted Use Areas; (iv) maintain
standard extended coverage and public liability insurance covering the
Restricted Use Areas with coverage reasonably acceptable to the Trustees and
such other insurance as the Trustees shall reasonably determine from
time-to-time to be desireable; and (v) be responsible for the all costs and
expenses associated with the Restricted Use Areas, including but not limited to,
taxes, insurance, and utilities. Owners may take reasonable actions to restrict
parking and access to their Restricted Use Areas, including, but not limited to,
the erection of gates and/or card entry systems; provided, however, that: (1)
such actions do not operate to unreasonably restrict the Benefited Parties' use
and enjoyment of the remaining Parcels or the other Common Property (exclusive
of the Restricted Use Areas) consistent with this Declaration; (2) such actions
are not in violation of the zoning ordinances, rules or regulations of the City
of Maryland Heights or any other governmental authority having jurisdiction over
the Property; (3) no such action is taken without the prior written consent of
the Trustees; and (4) no such action is in violation of the Riverport Indenture.
Notwithstanding anything herein to the contrary, the Owners shall not assign,
lease, convey, encumber or otherwise dispose of any Restricted Use Areas without
the unanimous prior written consent of the Trustees. In the event an Owner fails
to perform its obligations with regard to the Restricted Use Areas, the Trustees
may perform such obligations of the Owner and assess the Owner for the costs
actually and reasonably incurred (sometimes referred to herein as "Restricted
Use Area assessments"). (b) Except (i) as provided in foregoing SUBSECTION (A)
above and (ii) repair, maintenance or replacement of the Common Property which
is the responsibility of any utility company or public or quasi-public body, the
Trustees shall maintain all Common Property in good order and repair. The
Trustees shall not, however, be liable to any Owner, tenant or other person or
entity for damages to property or injury or death to persons arising out of any
failure to repair and maintain any Common Property. Maintenance, repair or
replacement by the Trustees of any Common Property shall be performed in a
manner which does not unreasonably delay or interfere with the Owners' use of
the Common Property (exclusive of the Restircted Use Areas), a Restricted Use
Area designated for the use and enjoyment of a specific Parcel, or an Owner's
use of its Parcel. The Trustees shall have reasonable access over and across any
Parcel to all Common Property to the extent necessary to permit the Trustees to
maintain, repair or replace such Common Property. Maintenance by the Trustees of
the Common Property, except as provided in the Riverport Indenture, shall
include, but not be limited to, the following: (1) The private roadways and
sidewalks within the Common Property (exclusive of the Restricted Use Areas)
shall be swept and, to the extent reasonably possible, snow and ice shall be
removed therefrom. (2) The lighting, signs, islands and other private street
improvements located within the Common Property (exclusive of the Restricted Use
Areas) shall be maintained in good repair. (3) Landscaping, including lawn
areas, trees and shrubbery at all entrances to the Property, shall be maintained
in a first-class condition by cutting, trimming, feeding and weeding. (4) The
land and any improvements lawfully constructed on the Common Property shall be
restored to the extent damaged in connection with the maintenance, repair or
replacement of any easement. (5) The Trustees shall be entitled to replace any
improvement constituting a part of the Common Property when necessary for the
proper functioning of the Common Property. (6) The Trustees shall maintain
insurance coverage as follows: 972451524(i) All improvements upon the Common
Property (excluding the Restricted Use Areas) shall be insured in an amount
equal to the maximum insurance replacement value, and afford protection against
loss or damage by fire or other hazards covered by a standard extended coverage
endorsement and such other risks as the Trustees reasonably determine from
time-to-time, including, vandalism; (ii) Public liablility, including medical
payments insurance, in such amounts and with such coverage as shall be
reasonably determined by the Trustees; 972451525(iii) Workmen's compensation
insurance meeting the requirements of the laws of Missouri; 972451526and (iv)
Fidelity insurance on the Trustees and all other persons or entities handling
funds of behalf of the Owners of Duke/Riverport Site No. 1, in an amount equal
to a minimum of one hundred fifty percent (150%) of the estimated annual
operating expenses. All expenses incurred or to be incurred by the Trustees in
connection with the foregoing (and such other expenses recoverable by the
Trustees as herein otherwise provided) shall be recoverable by the Trustees by
way of the Annual Assesments For Common Property as in SECTION 3.2 hereof
provided. (c) The Trustees shall have the duty and power to pay the general and
special taxes, if any, assessed against the Common Property, excluding the
Restricted Use Areas, and to receive, hold, convey, dispose of and administer in
trust any gift, grant, conveyance or donation of any money or real or personal
property for the purpose of executing this trust. The Owners shall have the duty
to pay all general and special taxes assessed against the Restricted Use Areas
which have been designated for the use of each respective Owner's Parcel and as
assessed against the Parcel. Taxes for the Restricted Use Areas shall be
equitably allocated among the Owners to which the Restricted Use Areas are
assigned by the Trustees and shall be based upon the assessed value of the
Restricted Use Areas as determined by the St. Louis County Assessor's Office or
other taxing authority then having jurisdiction over the Property.
4.7 CONSTRUCTION OF PARKING STRUCTURES AND ADDITIONAL PARKING AREAS.
(a) From time to time it may be necessary or desirable to construct one or
more parking structures and/or additional parking areas, so that, at a minimum,
the minimum parking requirements as prescribed by the zoning ordinances of the
City of Maryland Heights or of any governmental authority then having
jurisdiction over the Property will be met. All costs and expenses of
construction of said parking structure and/or parking areas shall be borne by
the Owners of said Parcels for whose use such parking structures and/or parking
areas are constructed and none of the cost and expense associated therewith
shall be the responsibility of the Trustees nor shall the Trustees make any
assessment in connection with the initial construction of said parking structure
and/or parking areas without the unanimous consent of the Owners. Prior to
commencement of construction of any improvements, architectural approval must be
obtained from the Trustees and as required by the Riverport Indenture. In
addition, the Owners of said Parcels must provide the Trustees hereunder with
reasonable assurances of Owners financial ability to complete the construction
of the parking structure and/or parking areas. Not less than thirty (30) days
prior to commencement of construction of any parking structure and/or
improvements on the Common Property, the involved Owner hereunder shall notify
all other Owners and each person or entity having a mortgage lien of record of
the nature and extent of said assurances. The parking structure and/or parking
areas constructed by the Owners as provided herein (partially or fully
completed) shall be the property of the Trustees and held pursuant to the terms
hereof, unless fee simple title to the real estate and parking structure and/or
improvements thereon is conveyed to the Owner of any Parcel. Following initial
construction, the Owners shall have the duty to make all necessary and proper
improvements and repairs to the parking structure and/or parking areas which
have been designated as Restricted Use Areas assigned to each Owner's Parcel; to
pave, surface, grade or otherwise fit the same for use; to keep the areas in
repair, light, police and protect the same. (b) The Trustees shall have the
right to grant easements on, over (air) and under the Common Property for
reasonable and necessary utility easements and easements between the various
Parcels, subject, however, to the reasonable right of each Parcel Owner to
reasonably restrict access to its Parcel. (c) The Trustees shall have the power
to prohibit any person, firm or corporation from obstructing or occupying with
building materials, soil or other objects, the Common Property so as to in any
manner obstruct the free use thereof, but the Trustees may permit temporary
obstructions of necessity for reasonable periods of time and to this end shall
have power to require a reasonable deposit to be made by any such person making
temporary use of the Common Property in connection with necessary building or
other operations, to guarantee that such obstructions will be removed and the
Common Property restored to a condition equal to that existing before the
commencement of the work, otherwise such restoration is to be done by the
Trustees and paid for from such deposit.
ARTICLE V
MISCELLANEOUS PROVISIONS
5.1 DURATION. This Declaration and the covenants, restrictions and
easements set out herein shall run with and bind the land, and shall inure to
the benefit of and be enforceable by the Trustees, and every Owner of every
Parcel and their respective legal representatives, heirs, successors, and
assigns, for a term beginning on the date this Declaration is recorded, and
continuing indefinitely. Provided, however, that should this Declaration or any
part thereof be held invalid or unenforceable as a result of the term of same
being perpetual, then the term hereof shall be deemed to continue through and
including December 31, 2033 after which time said covenants shall be
automatically extended for successive periods of ten (10) years unless an
amendment is approved as set forth below. Provided, however, that no such change
shall be effective until the recording of a certified copy of such resolution in
the Recorder of Deeds Office, St. Louis County, Missouri. Upon the expiration of
this Declaration or the earlier vacation of all of the Common Property, fee
simple title to the Common Property shall vest in the then Owners, as tenants in
common, each owning that proportion of interest therein according to each
Owner's Pro-Rata Interest; provided further that, title to Restricted Use Areas
reserved for the exclusive use of an individual Parcel, shall vest in the Owner
of the Parcel to which the Restricted Use Areas is reserved. The rights of said
tenants in common shall only be exercisable appurtenant to and in conjunction
with said Owners' ownership of Parcels within Duke/Riverport Site No. 1. The
Owners agree to cooperate as necessary to subdivide the Property and take all
other actions necessary to accomplish the foregoing.
5.2 AMENDMENT. Except as herein otherwise specifically provided, for five
(5) years from and after the date that this Declaration is recorded with the St.
Louis County Recorder of Deeds, same may be amended by the unanimous vote of the
Trustees voting in person or by proxy, at a meeting duly called for such purpose
and, thereafter, any amendment (except those requiring the unanimous consent of
Owners as herein provided) may be made by a two-thirds (2/3) vote of the Owners;
providing, however, that no amendment shall at anytime be made without the
unanimous consent of the Owners and each person or entity having a mortgage lien
of record (which consent shall not be unreasonably withheld, conditioned or
delayed): (i) which would have the effect of denying an Owner of his voting
rights in connection with the election of Trustees; or (ii) which would have the
effect of unreasonably denying the substantive rights of the Owners and/or their
mortgage lenders herein specified. Any amendment shall become effective when an
instrument is filed for record in the Recorder of Deeds Office, St. Louis
County, Missouri, with the signatures of the Trustees indicating the approval of
the Owners and/or mortgage lenders, if required. No such amendment shall: (1)
reduce the number of Trustees on the Board of Trustees as herein provided; or
(2) eliminate the requirement of any cognizant governmental authority that
unfilled vacancies on the Board of Trustees be filled by said cognizant
governmental authority.
5.3 ENFORCEMENT. The Trustees shall have the duty and each and every Owner,
tenant and/or person or entity having a mortgage lien of record of any part of
the Property or on a Parcel or part thereof shall have the right (but not the
duty) to enforce the covenants and restrictions set out in this Declaration (and
any rules and regulations promulgated by the Trustees hereunder) as same may be
from time to time amended. Enforcement of the covenants and restrictions shall
be by any proceeding at law or in equity against any person or persons violating
or attempting to violate any protective conditions, covenant, restriction, or
reservation (or any rules and regulations promulgated by the Trustees hereunder)
either to restrain violation and/or to recover damages, and against the
Property, and/or any Parcel to enforce any lien created by these protective
conditions, restrictions, reservations, and covenants (and any rules and
regulations promulgated by the Trustees hereunder). Failure by the Trustees or
any Owner, tenant and/or mortgage lender to enforce any such protective
condition, covenant, restriction or reservation shall in no event be deemed a
waiver of the right to do so thereafter.
5.4 SEVERABILITY OF PROVISIONS. If any Article, section, paragraph,
sentence, clause or phrase of this Declaration shall be or become unenforceable,
illegal, null, or void for any reason or shall be held by any court of competent
jurisdiction to be illegal, null, or void, the remaining Articles, sections,
paragraphs, sentences, clauses, or phrases of this Declaration shall continue in
full force and effect and shall not be affected thereby. It is hereby declared
that said remaining Articles, sections, paragraphs, sentences, clauses, and
phrases would have been and are imposed irrespective of the fact that any one or
more other Articles, sections, paragraphs, sentences, clauses, or phrases shall
become or be illegal, null, or void.
5.5 NOTICE. Wherever written notice to Duke Realty, a Trustee, or Owner,
tenant, or mortgage lender of a Parcel within Duke/Riverport Site No. 1 is
permitted or required hereunder, such shall be given by United States,
registered or certified, mail, return receipt requested, postage prepaid, to the
address appearing on the records of the Trustees, or delivered in person or by
facsimile (unless written notice has been given to the Trustees of a different
address, in which event such notice shall be sent to the address so designated).
Any notice so given shall conclusively be deemed to have been given at the time
of placing same in the United States mail, properly addressed, whether received
by the addressee or not, or upon receipt or refusal if delivered personally or
by facsimile.
5.6 TITLE. The titles, headings, and captions which have been used
throughout this Declaration are for convenience only and are not to be used in
construing this Declaration or any part thereof.
5.7 SINGULAR AND PLURAL. Words used herein, regardless of the number and
gender specifically used, shall be deemed and construed to including any other
number, singular or plural, and any other gender, masculine, feminine or neuter,
as the context requires.
5.8 BINDING EFFECT. This Declaration shall bind the heirs, legal
representatives, successors and assigns of the parties hereto.
5.9 CONFLICTING TERMS. If any provision of this Declaration violates any
provision of the Riverport Indenture, then such provision of this Declaration
shall be automatically modified to the minimum extent necessary to comply with
the Riverport Indenture.
IN WITNESS WHEREOF, W. Gregory Thurman, Timothy J. McCain and Lisa G.
Bulczak, Trustees of Duke/Riverport Site No. 1, and Duke Realty Limited
Partnership, an Indiana limited partnership, have caused this instrument to be
executed as of the day and year first above written.
TRUSTEES OF DUKE/RIVERPORT SITE NO. 1
- --------------------------
W. Gregory Thurman
- --------------------------
Timothy J. McCain
- --------------------------
Lisa G. Bulczak
DUKE REALTY LIMITED PARTNERSHIP,
An Indiana limited partnership
S E A L
By: DUKE REALTY INVESTMENTS, INC.,
An Indiana Corporation,
Its General Partner
ATTEST:
By:________________________________
W. Gregory Thurman
_____________________________ Vice president and General Manager
James D. Eckhoff St. Louis - Office
Assistant Secretary
<PAGE>
STATE OF MISSOURI )
) SS
COUNTY OF ST. LOUIS )
On this ____ day of ______________, 1998, before me, a Notary Public in and
for the County of St. Louis, State of Missouri, duly commissioned and sworn,
personally appeared W. Gregory Thurman, Timothy J. McCain and Lisa G. Bulczak,
known to me to be named herein as the TRUSTEES OF DUKE/RIVERPORT SITE NO. 1 and
also known to me to be the persons who executed the foregoing instrument, the
said W. Gregory Thurman; Timothy J. McCain and Lisa G. Bulczak having stated to
me that they executed the foregoing instrument as their free act and deed.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal in the County of St. Louis, State of Missouri, the day and year in this
certificate first above written.
----------------------------------
Notary Public
STATE OF MISSOURI )
) SS
COUNTY OF ST. LOUIS` )
On this ____ day of ____________, 1998, before me a Notary Public in and
for the County of St. Louis, State of Missouri, duly commissioned and sworn,
personally appeared W. Gregory Thurman, known to me to be the Vice President and
General Manager, St. Louis - Office of DUKE REALTY INVESTMENTS, INC., the
corporation described in the foregoing instrument, and also known to me to be
the person who executed the foregoing instrument, the said W. Gregory Thurman
having stated to me that he executed said instrument on behalf of the
corporation therein named, and acknowledged that such corporation executed the
same as the free act and deed of said corporation and with full authority of its
Board of Directors, and as General Partner, with authority, of DUKE REALTY
LIMITED PARTNERSHIP.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal in the County of St. Louis, State of Missouri, the day and year in this
certificate first above written.
----------------------------------
Notary Public
<PAGE>
EXHIBIT A
(TO DECLARATION)
This Exhibit contains a pictorial of Site No. 1
<PAGE>
EXHIBIT C
TO EIGHTH AMENDMENT TO LEASE
RESOLUTIONS
The undersigned, being all of the Trustees of Duke/Riverport Site No. 1
pursuant to that certain Declaration of Covenants, Restrictions and Easements
for Access and Parking for Property in the City of Maryland Heights, County of
St. Louis, State of Missouri, known as Duke/Riverport Site No. 1, dated
__________________, 1998 (the "Parking Indenture"), and recorded at Book _____
Page _____ of the St. Louis, County, Missouri records, hereby consent and agree
to the following resolutions and waive notice of a meeting of the Trustees and
the holding of such meeting, it being intended that this consent shall have the
same force and effect as the vote of the Trustees at a regular or special
meeting of the Trustees duly called and held.
The resolutions to which the undersigned consent and agree to are as
follows:
BE IT RESOLVED, that in accordance with Section 4.2 of the Parking
Indenture, the Trustees hereby assign and designate to the Owner of Lot 1A of
Duke/Riverport Site No. 1, according to the plat thereof recorded at Book _____
Page ____ of the St. Louis, County, Missouri records (herein sometimes referred
to as "Lot 1B"), from time to time and to its tenant, Express Scripts, Inc.
("Tenant"), and their respective successors and assigns, those certain 56
parking spaces (the "Designated Parking Spaces") within the Common Property (as
described in the Parking Indenture) as shown and depicted on Exhibit 1 to this
Resolution, for use by the Tenant and its directors, officers, employees,
representatives, agents, guests and invitees;
RESOLVED, that the Designated Parking Spaces shall continue to be within
the Common Property and shall not be part of any Restricted Use Area (as
described in the Parking Indenture); and be it further
RESOLVED, that the Trustees hereby consent to the lease of the Restricted
Use Area assigned and designated to Lot 1A under the Parking Indenture ("Lot 1A
RUA") and the lease of the other Common Property (including the Designated
Parking Spaces) by the Owner of Lot 1A to the Tenant; and be it further
RESOLVED, that the Trustees confirm and ratify that the Lot 1A RUA shall be
for the exclusive benefit of Lot 1A; and be it further
RESOLVED, that Tenant shall have the right, at its sole cost and expense,
to install signs identifying the Designated Parking Spaces for Tenant's use
(subject to the Trustees' approval of the form and content of said signage,
which approval shall not be unreasonably withheld, conditioned or delayed); and
be it further
RESOLVED, that the Trustees have received a copy of the that certain Eighth
Amendment to Lease dated August 14, 1998, by and between Duke Realty Limited
Partnership and Tenant, and acknowledge that the Owner of Lot 1A has delegated
to Tenant certain consent rights set forth in the Parking Indenture, including
the following: (1) consent rights with respect to Special Assessments as
provided in Section 3.4 of the Parking Indenture, and (ii) consent rights with
respect to any change or modification of Lot 1A RUA as provided in Section 4.1
of the Parking Indenture; and be it further
RESOLVED, that these Resolutions and the rights herein conferred to Tenant
shall run to and benefit Tenant and its successors and assigns and shall
continue without revocation or amendment so long as Tenant leases all or a
portion of Lot 1A (except to the extent Tenant otherwise consents to any
revocation or amendment in writing), and in the event that at any time hereafter
Tenant becomes the Owner of Lot 1A, the rights herein confirmed to Tenant shall
run to Tenant as Owner of Lot 1A (and to subsequent Owners) without revocation
or amendment (except to the extent the Owner(s) otherwise consents to any
revocation or amendment in writing); and be it further
RESOLVED, that each of the Trustees, be and here is authorized and directed
to do all acts and things as may be necessary or desirable to carry out the
purpose and intent of these resolutions, and that all of the acts and doings,
whether heretofore or hereafter done or performed in connection herewith are
hereby, in all respects, ratified, approved and confirmed.
Dated"_______________, 1998
______________________________
W. Gregory Thurman
_______________________________
Timothy J. McCain
_______________________________
Lisa G. Bulczak
BEING ALL OF THE TRUSTEES
<PAGE>
EXHIBIT 1
TO RESOLUTIONS
(LOT 1a RUA)
(This Exhibit contains a pictorial of Site 1 - Designated Parking Spaces)
EXHIBIT 3.3
SECOND AMENDED AND RESTATED
BYLAWS
of
EXPRESS SCRIPTS, INC.
Adopted September 24, 1997
(As Amended)
1. MEETINGS OF STOCKHOLDERS.
1.1 ANNUAL MEETING. The annual meeting of stockholders shall be held on the
date and at the time fixed from time to time by the board of directors (the
"Board"), provided, that each successive annual meeting shall be held on the
fourth Wednesday in May of each year if not a legal holiday, and if a legal
holiday then on the next succeeding day not a legal holiday, or on such other
date or time and at such place in May, June, July, August or September as may be
determined from time to time by resolutions adopted by the Board of Directors.
1.2 SPECIAL MEETINGS. Special meetings of the stockholders may be called by
resolution of the Board and shall be called by the president or secretary upon
the written request of holders of shares entitled to cast at least 50% of the
votes of all outstanding shares entitled to vote. Only business related to the
purposes set forth in the notice of the meeting may be transacted at a special
meeting.
1.3 PLACE AND TIME OF MEETINGS. Meetings of the stockholders may be held in
or outside Delaware at the place and time specified by the Board.
1.4 NOTICE OF MEETING; WAIVER OF NOTICE. Written notice of each meeting of
stockholders shall be given to each stockholder entitled to vote at the meeting,
except that (a) it shall not be necessary to give notice to any stockholder who
submits a signed waiver of notice before or after the meeting, and (b) no notice
of an adjourned meeting need be given except when required under Section 1.5 of
these Bylaws or by law. Each notice of a meeting shall be given, personally or
by mail, not less than 10 nor more than 60 days before the meeting and shall
state the time and place of the meeting, and unless it is the annual meeting,
shall state at whose direction or request the meeting is called and the purposes
for which it is called. If mailed, notice shall be considered given when
deposited in the United States mail with postage prepaid addressed to a
stockholder at his address on the corporation's records. The attendance of any
stockholder at a meeting, without protesting at the beginning of the meeting
that the meeting is not lawfully called or convened, shall constitute a waiver
of notice by him.
1.5 QUORUM. At any meeting of stockholders, the presence in person or by
proxy of the holders of shares entitled to cast a majority of the votes of all
outstanding shares entitled to vote shall constitute a quorum for the
transaction of any business. In the absence of a quorum a majority in voting
interest of those present or, if no stockholders are present, any officer
entitled to preside at or to act as secretary of the meeting, may adjourn the
meeting until a quorum is present. At any adjourned meeting at which a quorum is
present any action may be taken which might have been taken at the meeting as
originally called. No notice of an adjourned meeting need be given if the time
and place are announced at the meeting at which the adjournment is taken except
that, if adjournment is for more than thirty days or if, after the adjournment,
a new record date is fixed for the meeting, notice of the adjourned meeting
shall be given pursuant to Section 1.4.
1.6 VOTING; PROXIES. Corporate action to be taken by stockholder vote,
other than the election of directors, shall be authorized by a majority of the
votes of shares present in person or represented by proxy and entitled to vote
at a meeting of stockholders, except as otherwise provided by law. Directors
shall be elected in the manner provided in Section 2.1 of these Bylaws. Voting
need not be by ballot unless requested by a stockholder at the meeting or
ordered by the chairman of the meeting; however, all elections of directors
shall be by written ballot, unless otherwise provided in the certificate of
incorporation. Each stockholder entitled to vote at any meeting of stockholders
or to express consent to or dissent from corporate action in writing without a
meeting may authorize another person to act for such stockholder by proxy. Every
proxy must be signed by the stockholder or his attorney-in-fact. No proxy shall
be valid after three years from its date unless it provides otherwise.
1.7 LIST OF STOCKHOLDERS. Not less than 10 days prior to the date of any
meeting of stockholders, the secretary of the corporation shall prepare a
complete list of stockholders entitled to vote at the meeting, arranged in
alphabetical order and showing the address of each stockholder and the number of
shares registered in the name of such stockholder. For a period of not less than
10 days prior to the meeting, the list shall be available during ordinary
business hours for inspection by any stockholder for any purpose germane to the
meeting. During this period, the list shall be kept either (a) at a place within
the city where the meeting is to be held, if that place shall have been
specified in the notice of the meeting, or (b) if not so specified, at the place
where the meeting is to be held. The list shall also be available for inspection
by stockholders at the time and place of the meeting.
1.8 NOTICE OF STOCKHOLDER NOMINEE.(1) Only persons who are nominated in
accordance with the procedures set forth in this paragraph shall be eligible for
election by the stockholders as directors of the corporation. Nominations of
persons for election to the Board may be made at a meeting of stockholders (a)
by or at the direction of the Board, (b) by the holders of shares entitled to
cast at least 50% of the votes of all outstanding shares entitled to vote, or
(c) by any stockholder of the corporation entitled to vote for the election of
directors at such meeting who complies with the procedures set forth in this
paragraph. All nominations by stockholders shall be made pursuant to timely
notice in proper written form to the secretary of the corporation. To be timely,
a stockholder's notice must be delivered to or mailed and received at the
principal executive offices of the corporation (i) in the case of an annual
meeting that is called for a date that is within 30 days before or after the
anniversary date of the immediately preceding annual meeting of stockholders,
not less than 90 days nor more than 120 days prior to such anniversary date, and
(ii) in the case of an annual meeting that is called for a date that is not
within 30 days before or after the anniversary date of the immediately preceding
annual meeting, or in the case of a special meeting of stockholders called for
the purpose of electing directors, not later than the close of business on the
tenth day following the day on which notice of the date of the meeting was
mailed or public disclosure of the date of the meeting was made, whichever
occurs first. To be in proper written form, such stockholders' notice to the
secretary shall set forth in writing (a) as to each person whom such stockholder
proposes to nominate for election or re-election as a director, all information
relating to such person that is required to be disclosed in solicitations of
proxies for election of directors, or is otherwise required, in each case
pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), including, without limitation, such person's written
consent to being named in the proxy statement as a nominee and to serving as
director if elected; and (b) as to such stockholder (i) the name and address, as
they appear on the corporation's books, of such stockholder, and (ii) the class
and number of shares of the corporation which are beneficially owned by such
stockholder. At the request of the Board, any person nominated by the Board for
election as a director shall furnish to the secretary of the corporation that
information required to be set forth in a stockholder's notice of nomination
which pertains to the nominee. No person shall be eligible for election by the
stockholders as a director unless nominated in accordance with the procedures
set forth in the Bylaws of the corporation. The chairman of the meeting shall,
if the facts warrant, determine and declare to the meeting that a nomination as
not made in accordance with the procedures prescribed by the Bylaws of the
corporation, and if he or she shall so determine, he or she shall so declare to
the meeting and the defective nomination shall be disregarded.
1.9 STOCKHOLDER PROPOSALS.(1) At any special meeting of the stockholders,
only such business shall be conducted as shall have been brought before the
meeting by or at the direction of the Board. At any annual meeting of the
stockholders, only such business shall be conducted as shall have been brought
before the meeting (a) by or at the direction of the Board, (b) by the holders
of shares entitled to cast at least 50% of the votes of all outstanding shares
entitled to vote, or (c) by any stockholder who complies with the procedures set
forth in this paragraph. For business properly to be brought before an annual
meeting by a stockholder, the stockholder must have given timely notice thereof
in proper written form to the secretary of the corporation. To be timely, a
stockholder's notice must be delivered to or mailed and received at the
principal executive offices of the corporation (i) in the case of an annual
meeting that is called for a date that is within 30 days before or after the
anniversary date of the immediately preceding annual meeting of stockholders,
not less than 90 days nor more than 120 days prior to such anniversary date, and
(ii) in the case of an annual meeting that is called for a date that is not
within 30 days before or after the anniversary date of the immediately preceding
annual meeting, not later than the close of business on the tenth day following
the day on which notice of the date of the meeting was mailed or public
disclosure of the date of the meeting was made, whichever occurs first. To be in
proper written form, such stockholder's notice to the secretary shall set forth
in writing as to each matter such stockholder proposed to bring before the
annual meeting (a) the reasons for conducting such business at the annual
meeting, (b) the name and address, as they appear on the corporation's books, of
such stockholder, (c) the class and number of shares of the corporation which
are beneficially owned by such stockholder, and (d) any material interest of
such stockholder in such business. Notwithstanding anything in the Bylaws to the
contrary, no business shall be conducted at an annual meeting except in
accordance with the procedures set forth in this paragraph. The chairman of an
annual meeting shall, if the facts warrant, determine and declare to the meeting
that business was not properly brought before the meeting in accordance with the
provisions of this paragraph, and, if he or she should so determine, he or she
shall so declare to the meeting and any such business not properly brought
before the meeting shall not be transacted.
1.10 PUBLIC DISCLOSURE. For purposes of Sections 1.8 and 1.9 hereof,
"public disclosure" shall mean disclosure in a press release reported by the Dow
Jones News Service, Associated Press, Reuters or Corporate News Service or in a
document publicly filed by the corporation with the Securities and Exchange
Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.
1.11 MEETING REQUIRED. Whenever the vote of stockholders at a meeting
thereof is required or permitted to be taken for or in connection with any
corporate action, such vote may only be taken at an annual or special meeting
with prior notice, except as provided in the Restated Certificate of
Incorporation, as amended.
1.12 ELECTION OUT OF SECTION 203. Pursuant to the corporation's original
Certificate of Incorporation, the corporation has expressly elected not to be
governed by Section 203 of the General Corporation Law of the State of Delaware.
2. BOARD OF DIRECTORS.
2.1 NUMBER, QUALIFICATION, ELECTION AND TERM OF DIRECTORS. The business and
affairs of the corporation shall be managed by or under the direction of the
Board. The number of directors may be fixed or changed from time to time by
resolution of a majority of the entire Board or by the stockholders, or, if the
number is not fixed, the number shall be ten, but no decrease may shorten the
term of any incumbent director. Directors shall be elected at each annual
meeting of stockholders by a plurality of the votes of shares present in person
or represented by proxy and entitled to vote on the election of directors and
shall hold office until the next annual meeting of stockholders and until the
election and qualification of their respective successors, subject to the
provisions of Section 2.9. As used in these Bylaws, the term "entire Board"
means the total number of directors which the corporation would have if there
were no vacancies on the Board.
2.2 QUORUM AND MANNER OF ACTING. A majority of the entire Board shall
constitute a quorum for the transaction of business at any meeting, except as
provided in Section 2.10 of these Bylaws. In the absence of a quorum a majority
of the directors present may adjourn any meeting from time to time until a
quorum is present. Unless otherwise provided by law or these Bylaws, the
affirmative vote of a majority of the directors comprising the entire Board
shall be required to take action in respect of any matter presented to or
requiring the approval of the Board, including, but not limited to, the
following actions by the corporation:
(a) declaring or paying any dividends or any distributions upon any of the
stock of the corporation;
(b) authorizing, issuing or executing any agreement providing for the
issuance (contingent or otherwise) of any equity securities (or any securities
convertible into or exchangeable for any equity securities);
(c) merging or consolidating the corporation with any entity or any other
business combination, acquisition, liquidation, reorganization, recapitalization
or dissolution or entering into any agreement providing for any of the
foregoing;
(d) selling, leasing or otherwise disposing of any material portion of the
corporation's assets outside of the ordinary course of business in any
transaction or series of related transactions;
(e) entering into or amending any employment or consultant agreement with
any individual to provide for compensation in excess of $250,000 per annum or
paying any bonus in excess of $100,000 to any employee;
(f) selecting and engaging the corporation's principal accountants,
corporate counsel and investment bankers;
(g) approving the corporation's annual budget;
(h) making any capital expenditure not specifically approved in the
corporation's annual budget in excess of $500,000 for any expenditure or
$1,000,000 in the aggregate per year;
(i) subject to Section 3.3 hereof, adopting, amending, modifying or
terminating any stock option, employee stock ownership, pension, profit-sharing
or other employee benefit or welfare plan or granting any options or rights to
acquire shares of capital stock of the corporation;
(j) creating, incurring or assuming any indebtedness for borrowed money in
excess of $500,000 in the aggregate at any one time outstanding or making any
loans or advances to, guarantees for the benefit of, or investments in, any
entity in excess of $500,000 in the aggregate for all loans or advances at any
one time outstanding, $500,000 in the aggregate for all guarantees at any one
time outstanding, and $500,000 in the aggregate for all investments at any one
time outstanding, except for (1) short-term investments having a stated maturity
no greater than one year from the date the corporation makes such investment in
(A) obligations of the United States government or any agency thereof or
obligations guaranteed by the United States government, (B) certificates of
deposit of commercial banks having combined capital and surplus of at least
$250,000,000, or (C) commercial paper with a rating of at least "Prime-1" by
Moody's Investors Service, Inc., and (2) investments approved in the
corporation's annual budget;
(k) changing the nature, purpose or strategic direction of the corporation;
or
(l) entering into any contract, lease or other commitment that is not in
the ordinary course of business, and pursuant to which the corporation is
obligated to make payments in excess of $1,000,000. For purposes of the
preceding sentence, "ordinary course of business" means any lease or any
contract with customers or suppliers, which is repetitive in nature, which does
not vary in substantial terms and conditions from similar leases or contracts of
the Company, and which is customary in the business.
2.3 PLACE OF MEETINGS. Meetings of the Board may be held in or outside
Delaware.
2.4 ANNUAL AND REGULAR MEETINGS. Annual meetings of the Board for the
election of officers and consideration of other matters shall be held either (a)
without notice immediately after the annual meeting of stockholders and at the
same place, or (b) as soon as practicable after the annual meeting of
stockholders, on notice as provided in Section 2.6 of these Bylaws. Regular
meetings of the Board may be held without notice and, unless otherwise specified
by the Board, shall be held once during every other calendar month at such times
and places as the Board determines. If the day fixed for a regular meeting is a
legal holiday, the meeting shall be held on the next business day.
2.5 SPECIAL MEETINGS. Special meetings of the Board may be called by the
chairman of the board, the president or by a majority of the directors in
office.
2.6 NOTICE OF MEETINGS; WAIVER OF NOTICE. Notice of the time and place of
each special meeting of the Board, and of each annual meeting not held
immediately after the annual meeting of stockholders and at the same place,
shall be given to each director in advance of the time set for such meeting as
provided herein. Notice of a special meeting need not state the purpose or
purposes for which the meeting is called. Notice need not be given to any
director who submits a signed waiver of notice before or after the meeting or
who attends the meeting without protesting at the beginning of the meeting the
transaction of any business because the meeting was not lawfully called or
convened. Notice of any adjourned meeting need not be given, other than by
announcement at the meeting at which the adjournment is taken. Notice of a
special meeting may be given by any one or more of the following methods and the
method used need not be the same for each director being notified:
(a) Written notice sent by mail at least three days prior to the meeting;
(b) Personal service at least twenty-four (24) hours prior to the time of
the meeting;
(c) Telegraphic notice at least twenty-four (24) hours prior to the time of
the meeting, said notice to be sent as a straight full-rate telegram;
(d) Telephonic notice at least twenty-four (24) hours prior to the time of
the meeting; or
(e) Facsimile transmission at least twenty-four (24) hours prior to the
time of the meeting.
2.7 BOARD OR COMMITTEE ACTION WITHOUT A MEETING. Any action required or
permitted to be taken by the Board or by any committee of the Board may be taken
without a meeting if all of the members of the Board or of the committee consent
in writing to the adoption of a resolution authorizing the action. The
resolution and the written consents by the members of the Board or the committee
shall be filed with the minutes of the proceeding of the Board or of the
committee.
2.8 PARTICIPATION IN BOARD OR COMMITTEE MEETINGS BY CONFERENCE TELEPHONE.
Any or all members of the Board or of any committee of the Board may participate
in a meeting of the Board or of the committee by means of a conference telephone
or similar communications equipment allowing all persons participating in the
meeting to hear each other at the same time. Participation by such means shall
constitute presence in person at the meeting.
2.9 RESIGNATION AND REMOVAL OF DIRECTORS. Any director may resign at any
time by delivering his or her resignation in writing to the president or
secretary of the corporation, to take effect at the time specified in the
resignation; the acceptance of a resignation, unless required by its terms,
shall not be necessary to make it effective. Any or all of the directors may be
removed at any time, either with or without cause, by vote of the stockholders.
2.10 VACANCIES. Any vacancy in the Board, including one created by an
increase in the number of directors, may be filled for the unexpired term by a
majority vote of the remaining directors, though less than a quorum.
2.11 COMPENSATION. Directors shall receive such compensation as the Board
determines, together with reimbursement of their reasonable expenses in
connection with the performance of their duties. A director may also be paid for
serving the corporation, its affiliates or subsidiaries in other capacities.
2.12 NOTICE TO MEMBERS OF THE BOARD OF DIRECTORS. Each member of the Board
of Directors shall file with the Secretary of the corporation an address to
which mail or telegraphic notices shall be sent and a telephone number to which
a telephonic or facsimile notice may be transmitted. A notice mailed,
telegraphed, telephoned or transmitted by facsimile in accordance with the
instructions provided by the director shall be deemed sufficient notice. Such
address or telephone number may be changed at any time and from time to time by
a director by giving written notice of such change to the Secretary. Failure on
the part of any director to keep an address and telephone number on file with
the Secretary shall automatically constitute a waiver of notice of any regular
or special meeting of the Board which might be held during the period of time
that such address and telephone number are not on file with the Secretary. A
notice shall be deemed to be mailed when deposited in the United States mail,
postage prepaid. A notice shall be deemed to be telegraphed when the notice is
delivered to the transmitter of the telegram and either payment or provision for
payment is made by the corporation. Notice shall be deemed to be given by
telephone if the notice is transmitted over the telephone to some person
(whether or not such person is the director) or message recording device
answering the telephone at the number which the director has placed on file with
the Secretary. Notice shall be deemed to be given by facsimile transmission when
sent to the telephone number which the director has placed on file with the
Secretary.
3. COMMITTEES.
3.1 EXECUTIVE COMMITTEE. The Board, by resolution adopted by a majority of
the entire Board, may designate an Executive Committee consisting of five
directors or such other number as may be specified by the Board; the Executive
Committee shall be vested with the powers of the Board of Directors, including,
without limitation, the power to approve any matter set forth in section 2.2,
when the Board is not in session, except as otherwise provided in the
resolution, by these Bylaws, section 141(c) of the General Corporation Law of
the State of Delaware, or any other applicable law. The members of the Executive
Committee shall serve at the pleasure of the Board. All action of the Executive
Committee shall be reported to the Board at its next meeting. Unless otherwise
specified by the Board or the Executive Committee, meetings of the Executive
Committee shall be held once during every calendar month in which a meeting of
the Board is not scheduled.
3.2 AUDIT COMMITTEE.
(a) The Board, by resolution adopted by a majority of the entire Board, may
designate an Audit Committee consisting of three directors or such other number
as may be specified by the Board, which shall review the internal controls of
the corporation, any transactions with related parties of the corporation of a
magnitude such that it would be required to be disclosed in the corporation's
proxy statement under the Securities and Exchange Commission's rules and
regulations as in effect at the time of the transaction, and the objectivity of
its financial reporting, and have such other powers and duties as the Board
determines. The members of the Audit Committee shall serve at the pleasure of
the Board. All action of the Audit Committee shall be reported to the Board at
its next meeting.
(b) A majority of the directors on the Audit Committee shall be persons who
are not directors of New York Life Insurance Company or its subsidiaries (other
than the corporation), or officers or employees of New York Life or its
subsidiaries. The Audit Committee shall not act at any time that the
requirements of the preceding sentence are not met.
3.3 COMPENSATION COMMITTEE. The Board, by resolution adopted by a majority
of the entire Board, may designate a Compensation Committee consisting of three
directors or such other number as may be specified by the Board, which shall
administer the corporation's compensation plans and have such other powers and
duties as the Board determines. The members of the Compensation Committee shall
serve at the pleasure of the Board. All action of the Compensation Committee
shall be reported to the Board at its next meeting.
3.4 OTHER COMMITTEES. The Board, by resolution adopted by a majority of the
entire Board, may designate other committees of directors of one or more
directors, which shall serve at the Board's pleasure and have such powers and
duties as the Board determines.
3.5 RULES APPLICABLE TO COMMITTEES. The Board may designate one or more
directors as alternate members of any committee (other than the Audit
Committee), who may replace any absent or disqualified member at any meeting of
the committee. All action of a committee shall be reported to the Board at its
next meeting. Each committee shall adopt rules of procedure and shall meet as
provided by those rules or by resolutions of the Board. A majority of the
members of a committee shall constitute a quorum for the transaction of business
at any meeting. The affirmative vote of a majority of the members of a committee
shall be required to take action in respect of any matter presented to or
requiring the approval of the committee.
3.6 ELECTION PURSUANT TO SECTION 141(C)(2). By resolution of the Board of
Directors, the corporation has elected pursuant to Section 141(c) of the
Delaware General Corporation Law to be governed by paragraph (2) of Section
141(c) in respect of committees of the Board of Directors.
4. OFFICERS.
4.1 NUMBER; SECURITY. The executive officers of the corporation shall be
the chairman of the board, the president, one or more vice presidents (including
executive vice president(s) and senior vice president(s) if the Board so
determines), a secretary and a treasurer. Any two or more offices may be held by
the same person. The Board may require any officer, agent or employee to give
security for the faithful performance of his duties.
4.2 ELECTION; TERM OF OFFICE. The executive officers of the corporation
shall be elected annually by the Board, and each such officer shall hold office
until the next annual meeting of the Board and until the election of his
successor, subject to the provisions of Section 4.4.
4.3 SUBORDINATE OFFICERS. The Board may appoint subordinate officers
(including assistant secretaries and assistant treasurers), agents or employees,
each of whom shall hold office for such period and have such powers and duties
as the Board determines. The Board may delegate to any executive officer or to
any committee the power to appoint and define the powers and duties of any
subordinate officers, agents or employees.
4.4 RESIGNATION AND REMOVAL OF OFFICERS. Any officer may resign at any time
by delivering his resignation in writing to the president or secretary of the
corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any officer elected or appointed by the Board or
appointed by an executive officer or by a committee may be removed by the Board
either with or without cause, and in the case of an officer appointed by an
executive officer or by a committee, by the officer or committee who appointed
him or her or by the president.
4.5 VACANCIES. A vacancy in any office may be filled for the unexpired term
in the manner prescribed in Sections 4.2 and 4.3 of these Bylaws for election or
appointment to the office.
4.6 CHAIRMAN OF THE BOARD. The chairman of the board shall preside at all
meetings of the Board and of the stockholders and shall have such powers and
duties as the Board assigns to him.
4.7 PRESIDENT. The president shall be the chief executive officer of the
corporation. Subject to the control of the Board, he or she shall have general
supervision over the business of the corporation and shall have such other
powers and duties as chief executives of corporations usually have or as the
Board assigns to him or her.
4.8 VICE PRESIDENT. Each vice president shall have such powers and duties
as the Board or the president assigns to him or her.
4.9 TREASURER. The treasurer shall be the chief financial officer of the
corporation and shall be in charge of the corporation's books and accounts.
Subject to the control of the Board, he or she shall have such other powers and
duties as the Board or the president assigns to him or her.
4.10 SECRETARY. The secretary shall be the secretary of, and keep the
minutes of, all meetings of the Board and of the stockholders, shall be
responsible for giving notice of all meetings of stockholders and of the Board,
and shall keep the seal and, when authorized by the Board, apply it to any
instrument requiring it. Subject to the control of the Board, he or she shall
have such powers and duties as the Board or the president assigns to him or her.
In the absence of the secretary from any meeting, the minutes shall be kept by
the person appointed for that purpose by the presiding officer.
4.11 SALARIES. The Board may fix the officers' salaries, if any, or it may
authorize the president to fix the salary of any other officer.
5. SHARES.
5.1 SHARES OF THE CORPORATION. The shares of the corporation shall be
represented by certificates, provided that the Board of Directors may provide by
resolution or resolutions that some or all of any or all classes or series of
its stock shall be uncertificated shares. Any such resolution shall not apply to
shares represented by a certificate until such certificate is surrendered to the
corporation. Notwithstanding the adoption of such a resolution by the Board of
Directors, every holder of stock represented by certificates and upon request
every holder of uncertificated shares shall be entitled to have a certificate
signed by, or in the name of the corporation by the Chairman or Vice Chairman of
the Board of Directors or by the President or a Vice-President, and by the
Secretary or an Assistant Secretary, or the Treasurer or an Assistant Treasurer,
representing the number of shares registered in certificate form. The signatures
of any such officers thereon may be facsimiles. The seal of the corporation
shall be impressed, by original or by facsimile, printed or engraved, on all
such certificates. The certificate shall also be signed by the transfer agent
and a registrar and the signature of either the transfer agent or the registrar
may also be facsimile, engraved or printed. In case any officer, transfer agent,
or registrar who has signed or whose facsimile signature has been placed upon
any such certificate shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, such certificate may nevertheless
be issued by the corporation with the same effect as if such officer, transfer
agent, or registrar had not ceased to be such officer, transfer agent, or
registrar at the date of its issue.
5.2 STOCK RECORDS. The corporation or a transfer agent shall keep stock
books in which shall be recorded the number of shares issued, the names of the
owners of the shares, the number owned by them respectively, whether such shares
are represented by certificates or are uncertificated, and the transfer of such
shares with the date of transfer.
5.3 TRANSFERS. Transfers of stock shall be made only on the stock transfer
record of the corporation upon surrender of the certificate or certificates
being transferred which certificate shall be properly endorsed for transfer or
accompanied by a duly executed stock power, except in the case of uncertificated
shares, for which the transfer shall be made only upon receipt of transfer
documentation reasonably acceptable to the corporation. Whenever a certificate
is endorsed by or accompanied by a stock power executed by someone other than
the person or persons named in the certificate, or the transfer documentation
for the uncertificated shares is executed by someone other than the holder of
record thereof, evidence of authority to transfer same shall also be submitted
with the certificate or transfer documentation. All certificates surrendered to
the corporation for transfer shall be canceled.
5.4 REGULATIONS GOVERNING ISSUANCE AND TRANSFERS OF SHARES. The Board of
Directors shall have the power and authority to make all such rules and
regulations as it shall deem expedient concerning the issue, transfer and
registration of shares of stock of the corporation. The Board may require
satisfactory surety before issuing a new certificate to replace a certificate
claimed to have been lost or destroyed.
5.5 TRANSFER AGENTS AND REGISTRARS. The Board may appoint, or authorize one
or more officers to appoint, one or more transfer agents and one or more
registrars.
5.6 DETERMINATION OF STOCKHOLDERS OF RECORD. The Board may fix, in advance,
a date as the record date for the determination of stockholders entitled to
notice of or to vote at any meeting of the stockholders, or to express consent
to or dissent from any proposal without a meeting, or to receive payment of any
dividend or the allotment of any rights, or for the purpose of any other action.
The record date may not be more than 60 or less than 10 days before the date of
the meeting or more than 60 days before any other action.
6. MISCELLANEOUS.
6.1 SEAL. The Board shall adopt a corporate seal, which shall be in the
form of a circle and shall bear the corporation's name and the year and state in
which is was incorporated.
6.2 FISCAL YEAR. The Board may determine the corporation's fiscal year.
Until changed by the Board, the corporation's fiscal year shall be the calendar
year.
6.3 VOTING OF SHARES IN OTHER CORPORATIONS. Shares in other corporations
which are held by the corporation may be represented and voted by the president
or a vice president of this corporation or by proxy or proxies appointed by one
of them. The Board may, however, appoint some other person to vote the shares.
6.4 AMENDMENTS. Bylaws may be amended, repealed or adopted by the
stockholders or by a majority of the entire Board, but any bylaw adopted by the
Board may be amended or repealed by the stockholders.
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(1) As amended October 7, 1998
