EXHIBIT 10.9
BUILDING LEASE
(SINGLE TENANT)
ARTICLE ONE: BASIC TERMS
This Article One contains the Basic Terms of this Lease Agreement between
the Landlord and Tenant named below. Other Articles, Sections and Paragraphs of
the Lease referred to in this Article One explain and define the Basic Terms and
are to be read in conjunction with the Basic Terms.
Section 1.01 DATE OF LEASE: September 3, 1998.
Section 1.02 LANDLORD: BR Venture, LLC, a Delaware limited liability
company having its principal place of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
Section 1.03 TENANT: Rhythms NetConnections, Inc., a Delaware
corporation.
Section 1.04 PROPERTY: The premises subject to this Lease consists of
certain land located in Arapahoe County, Colorado, more particularly described
as ▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ FILING NO. 3 (the "Property"), which includes a
building containing approximately 46,400 square feet (the "Building") under
construction to be known as ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇. The proposed
configuration of the Building and related improvements are shown on Exhibit A
attached hereto (the Phase I and Phase 11 buildings and parking areas are
included for reference only).
Section 1.05 LEASE TERM: Five years beginning on the Commencement Date
(as defined in paragraph 2.03 below), subject to the right of Tenant to extend
the term for one option period of three or five years as set forth in Section
2.01 below.
Section 1.06 PERMITTED USES: Office functions or any other use permitted
by applicable zoning ordinances and regulations.
Section 1.07 TENANT'S GUARANTOR: None.
Section 1.08 BROKERS: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ Company, representing Landlord, and
▇▇▇▇▇ & ▇▇▇▇▇ Company, representing Tenant.
Section 1.09 COMMISSIONS: Pursuant to separate agreement.
Section 1.10 INITIAL SECURITY DEPOSIT: None.
Section 1.11 VEHICLE PARKING SPACES ALLOCATED TO TENANT: All parking
spaces located on the Property as shown on Exhibit A attached hereto, which
shall be in the ratio of five spaces for each 1000 square feet of space in the
Building and shall conform with applicable zoning regulations.
Section 1.12 RENT AND OTHER CHARGES PAYABLE BY TENANT: Subject to
adjustment as provided in section 3.02 below, Tenant shall pay monthly Base Rent
in a variable amount based on the following annual per-square-foot rental rates
for the Building: $12.00 for the first three years of the Lease Term; $12.25 for
the fourth and fifth years of the Lease Term. Once the actual area of the
Building is determined by multiplying the per-square-foot rental rate by the
actual total area of the Building as determined by Landlord's architect
(measured from the outside surface of the outside walls) expressed in square
feet (the "Building Area") and the finish of the Building is complete, Landlord
and Tenant shall execute an amendment to this Lease setting out the actual
amount of Base Rent payable during the initial Lease Term (the "Rent
Amendment"), Tenant shall also pay Real Property Taxes (see Section 4.02),
Utilities (see Section 4.03), Insurance Premiums (see Section 4.04), Impounds
for Insurance Premiums (see Section 4.08), and Maintenance, Repairs and
Alterations (see Article Six).
Section 1.13 RIDERS: The following Riders are attached to and made a part
of this Lease: Exhibit A (Site Plan); Exhibit B (Work Letter).
ARTICLE TWO: LEASE TERM; CONSTRUCTION OBLIGATIONS
Section 2.01 LEASE OF PROPERTY FOR LEASE TERM. Landlord hereby leases
the Property to Tenant and Tenant leases the Property from Landlord for the
Lease Term specified in Section 1.05 above. Landlord hereby grants to Tenant an
option ("Option") to extend the term of this Lease for one period of three or
five years, at the option of Tenant (the "Option Term"). The Option may only be
exercised in the event that Tenant is not in default (beyond any applicable
notice and cure periods) under any of the provisions of this Lease. In order to
exercise the Option, Tenant must provide written notice of its exercise of the
Option to Landlord (the "Extension Notice") at least six months prior to the
expiration of the initial Lose Term. Base Rent during the Option Term shall be
determined as set forth in Section 3.02 below. In the event that Tenant fails
to timely provide the Extension Notice, then Tenant's right to exercise the
Option shall automatically terminate. After exercise of the Option as set forth
above, Tenant shall have no further right to extend the term of this Lease.
Section 2.02 CONSTRUCTION OBLIGATIONS. The Building and related
improvements, including tenant improvements, will be constructed substantially
as shown on Exhibit A attached hereto (the "Site Plan") in accordance with
Exhibit B attached hereto. Landlord shall obtain industry standard warranties
from the contractors and subcontractors which perform Landlord's Work, and shall
be solely responsible for presenting and pursuing warranty claims arising from
any defects in Landlord's Work promptly after written notice thereof from
Tenant. Landlord shall also be solely responsible for correcting any latent
defects in Landlord's Work which are discovered after the expiration of the
applicable warranty period.
Section 2.03 SUBSTANTIAL COMPLETION; COMMENCEMENT DATE. The term
"Substantial Completion" as used herein shall mean that Landlord's Work is
complete to the point where Tenant may obtain a building permit for the Tenant
Finish Work (as confirmed in writing by Landlord or its architect). Based on
Landlord's current construction schedule, the projected date of Substantial
Completion is October 1, 1998, Tenant may enter the Building prior to
Substantial Completion to prepare for occupancy, so long as such activities do
not interfere with Landlord's
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construction activities. As used in this Lease, the term "Commencement Date"
shall mean the date which is sixty (60) days after Substantial Completion.
Section 2.04 ALLOWANCES.
(a) Landlord shall pay $.10 per square foot for a preliminary
space plan (including up to two revisions), $1.25 per square foot to pay
the cost of construction/mechanical/electrical drawings, plus an amount
equal to $23.00 multiplied by the Building Area (together, the "Tenant
Allowance") to cover costs associated with design and construction of
Tenant Improvements. When all Tenant Improvements have been completed and
paid for, and prior to the execution of the Rent Amendment (as defined in
Section 1.12 above), Landlord and Tenant shall compare the total
expenditures for Tenant Improvements with the total amount of the Tenant
Allowance. Tenant shall be solely responsible for paying any such
expenditures which are in excess of the Tenant Allowance. Any portion of
the Tenant Allowance which is not needed to pay for the initial Tenant
Improvements shall be reserved for 12 months after Substantial Completion
and shall be paid to Tenant as reimbursement for any additional tenant
improvements to the Building made by Tenant, promptly after receipt by
Landlord of a written request therefor accompanied by reasonable supporting
documentation.
(b) Upon Substantial Completion, Landlord shall pay to Tenant
the sum of $50,000 as an allowance against moving expenses.
Section 2.05 HOLDING OVER. Tenant shall vacate the Property upon the
expiration or earlier termination of this Lease. Tenant shall reimburse
Landlord for and indemnify Landlord against all damages which Landlord incurs
from Tenant's delay in vacating the Property. If Tenant does not vacate the
Property upon the expiration or earlier termination of the Lease and Landlord
thereafter accepts rent from Tenant, Tenant's occupancy of the Property shall be
a "month-to-month" tenancy, subject to all of the terms of this Lease except
that the Base Rent then in effect shall be increased by twenty-five percent
(25%).
ARTICLE THREE: BASE RENT
Section 3.01 TIME AND MANNER OF PAYMENT. Tenant shall pay Base Rent to
Landlord in the amount stated in Paragraph 1.12 (prorated for any partial month
at the beginning or end of the Lease Term) on the Commencement Date and on the
first day of each month thereafter during the Lease Term, in advance, without
offset (except as expressly provided in this Lease), deduction or prior demand;
provided, however, that (i) Tenant shall have no obligation to pay Base Rent
for the first 30 days of the Lease Term, and (ii) Tenant shall only be obligated
to pay Base Rent for 30,000 square feet of the Building for 165 days thereafter
(that is, until the 190th day of the Lease Term), after which Base Rent shall be
payable for the entire Building Area. Base Rent shall be payable at Landlord's
address or such other place as Landlord may designate in writing.
Section 3.02 BASE RENT DURING OPTION TERM. If Tenant exercises its
Option to extend the term of this Lease as provided in Section 2.01 above, Base
Rent for the Option Term shall be determined by the parties based on the market
rate then prevailing (including
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commissions, tenant concessions and construction allowance) in the Southeast
Denver metropolitan area for leases of space of similar size and finish in
commercial properties of similar size and condition to the Property for
three-year or five-year leases, as applicable ("Market Rate"). Landlord and
Tenant shall endeavor in good faith to agree upon Base Rent for the Option Term
within thirty (30) days after Landlord receives the Extension Notice provided in
Section 2.01 above. If the parties agree on Base Rent for the Option Term
within such period, they shall immediately execute an amendment to this Lease
stating the Base Rent for the Option Term. If the parties are unable to agree
on Base Rent for the Option Term within such period, Landlord and Tenant shall
promptly thereafter jointly select three licensed real estate brokers
experienced in the leasing of commercial real estate in the Southeast Denver
metropolitan area who shall advise Landlord and Tenant in writing of their
opinion of Market Rate, and Base Rent for the Option Term shall be established
accordingly. In no event shall Base Rent during the Option Term be less than
Base Rent for the last year of the initial Lease Term.
ARTICLE FOUR: OTHER CHARGES PAYABLE BY TENANT
Section 4.01 ADDITIONAL RENT. All charges payable by Tenant other than
Base Rent are called "Additional Rent". Unless this Lease provides otherwise,
Tenant shall pay all, Additional Rent then due with the next monthly installment
of Base Rent The term "Rent" shall mean Base Rent and Additional Rent.
Section 4.02 PROPERTY TAXES.
(a) REAL PROPERTY TAXES. Tenant shall pay all real property
taxes on the Property (including any fees, taxes or assessments against, or
as a result of, any tenant improvements installed on the Property by or
for the benefit of Tenant) attributable to the Lease Term directly to the
taxing authority not less than ten days prior to the delinquency date
thereof, and shall promptly furnish to Landlord satisfactory written
evidence of payment. If Tenant fails to pay the real property taxes before
delinquency, Landlord May pay the taxes and Tenant shall reimburse Landlord
for the amount so paid (including any penalties and interest) as Additional
Rent. If any penalties or interest are imposed by the taxing authority for
delays in payment caused by Landlord, Landlord shall be solely responsible
for payment of such penalties and interest.
(b) DEFINITION OF "REAL PROPERTY TAX." "Real property tax"
means: (i) any fee, license fee, license tax, business license fee,
commercial rental tax, levy, charge, assessment, penalty or tax imposed by
any taxing authority against the Property; (ii) any tax on Landlord's right
to receive, or the receipt of, rent or income from the Property or against
Landlord's business of leasing the Property; (iii) any tax or charge for
fire protection, streets, sidewalks, road maintenance, refuse or other
services provided to the Property by any governmental agency; (iv) any
re-assessment of the Property due to a change of ownership, as defined by
applicable law; and (v) any charge or fee replacing any tax previously
included within the definition of real property tax. "Real property tax"
does not, however, include Landlord's federal or state income, franchise,
inheritance or estate taxes, or any tax imposed upon this transaction or
any other transfer of all or part of Landlord's interest in the Property.
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(c) PERSONAL PROPERTY TAXES. Tenant shall pay all taxes charged
against trade fixtures, furnishings, equipment or any other personal
property belonging to Tenant, and shall try to have personal property
taxed separately from the Property.
Section 4.03 UTILITIES. Tenant shall pay, directly to the appropriate
supplier, the cost of all natural gas, heat, light, power, sewer service,
telephone, water, refuse disposal and other utilities and services supplied to
the Property.
Section 4.04 INSURANCE POLICIES.
(a) LIABILITY INSURANCE. During the Lease Term, Tenant shall
maintain a policy of commercial general liability insurance (sometimes
known as broad form comprehensive general liability insurance) insuring
Tenant against liability for bodily injury, property damage (including loss
of use of property) and personal injury arising out of the operation, use
or occupancy of the Property, specifically including Tenant's use of
chemicals at the Property. Tenant shall name Landlord as an additional
insured under such policy. The initial amount of such insurance she be One
Million Dollars ($1,000,000) per occurrence and shall be subject to
periodic increase based upon inflation, increased liability awards,
recommendation of Landlord's professional insurance advisors and other
relevant factors. The liability insurance obtained by Tenant under this
Paragraph 4.04(a) shall (i) be primary and non-contributing, (ii) contain
cross-liability endorsements, and (iii) insure Landlord against Tenant's
performance under Section 5,05, if the matters giving rise to the indemnity
under Section 5.05 result from the negligence of Tenant. The amount and
coverage of such insurance shall not limit Tenant's liability nor relieve
Tenant of any other obligation under this Lease. Landlord may also obtain
comprehensive public liability insurance in an amount and with coverage
determined by Landlord insuring Landlord against liability arising out of
ownership, operation, use or occupancy of the Property. Any such policy
shall be obtained by Landlord at Landlord's sole expense, shall not be
contributory and shall not provide primary insurance.
(b) PROPERTY AND BUSINESS INTERRUPTION INSURANCE. During the
Lease Term, Tenant shall maintain a policy of insurance covering loss of or
damage to the Property (including Tenant's fixtures, equipment and
leasehold improvements) in the full amount of its replacement value and
including business interruption insurance in an amount sufficient to pay
one year's Base Rent plus estimated real property taxes and insurance
premiums. Landlord and Landlord's mortgagee shall be named loss payee
under such policy, as their interests may appear. Such policy shall
contain an Inflation Guard endorsement, shall not provide for any
deductible amount greater than $10,000, and shall provide protection
against all perils included within the classification of fire, extended
coverage (including any perils arising from Tenant's use of chemicals at
the Property), vandalism, malicious mischief, special extended perils (all
risk), sprinkler leakage and any other perils which Landlord deems
reasonably necessary (including flood and earthquake insurance, if required
by any lender holding a security interest in the Property). Tenant shall
not do or permit anything to be done which invalidates any such insurance
policies.
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(c) PAYMENT OF PREMIUMS. Subject to Section 4.08, Tenant shall
pay all premiums for the insurance policies described in Paragraphs 4.04(a)
and 4.04(b) when due, except that Landlord shall pay all premiums for
non-primary comprehensive public liability insurance which Landlord elects
to obtain as provided in Paragraph 4.04(a). Before the Commencement Date,
Tenant shall deliver to Landlord a certificate of insurance, executed by an
authorized officer or agent of the insurance company, showing that the
insurance which Tenant is required to maintain under this Section 4.04 is
in full force and effect and containing such other information which
Landlord reasonably requires. At last thirty (30) days prior to the
expiration of any such policy, Tenant shall deliver to Landlord reasonably
satisfactory evidence of renewal.
(d) NOTICE OF CANCELLATION. Any insurance which Tenant is
required to maintain under this Lease shall include a provision which
requires the insurance carrier to give Landlord written notice of any
cancellation or modification of coverage not less than thirty (30) days
prior to the effective date of change (or not less than ten (10) days prior
to the effective date of change, if Tenant has used its best efforts to
obtain a longer notice period but has been unable to de so). If any
insurance policy is cancelled on account of the business or activities of
Tenant, Tenant shall immediately cease such activities or secure a
replacement policy acceptable to Landlord.
(e) FAILURE TO OBTAIN OR CONFIRM COVERAGE. If Tenant fails to
deliver any policy, certificate or renewal to Landlord required under this
Lease within the prescribed time period or if any such policy is cancelled
or modified during the Lease Term without Landlord's consent, Landlord may
obtain such insurance, in which case Tenant shall reimburse Landlord for
the cost of such insurance within fifteen (15) days after receipt of a
statement that indicates the cost of such insurance.
(f) MINIMUM STANDARDS. Tenant shall maintain all insurance
required under this Lease with companies holding a "General Policy Rating"
of A-12 or better, as set forth in the most current issue of "Best Key
Rating Guide". Landlord and Tenant acknowledge the insurance markets are
rapidly changing and that insurance in the form and amounts described in
this Section 4.04 is for the primary benefit of Landlord. If at any time
during the Lease Term, Tenant is unable to maintain the insurance required
under the Lease, Tenant shall nevertheless maintain insurance coverage
which is customary and commercially reasonable in the insurance industry
for Tenant's type of business, as that coverage may change from time to
time. Landlord makes no representation as to the adequacy of such
insurance to protect Landlord's or Tenant's interests. Therefore, Tenant
shall obtain any such additional property or liability insurance which
Tenant deems necessary to protect Landlord and Tenant.
(g) WAIVER OF SUBROGATION. Landlord and Tenant each hereby
waive any and all rights of recovery against the other, or against the
officers, employees, agents or representatives of the other, for loss of or
damage to its property or the property of others under its control, if such
loss or damage is covered by any insurance policy in force (whether or not
described in this Lease) at the time of such loss or damage. Upon
obtaining the required policies of insurance, Landlord and Tenant shall
give notice to the insurance carriers of this mutual waiver of subrogation.
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Section 4.05 MAINTENANCE OF PROPERTY. Tenant shall pay all costs to
maintain the Property as provided in Section 6.04 below.
Section 4.06 LATE CHARGES. Tenant's failure to pay Rent promptly may
cause Landlord to incur unanticipated costs. The exact amount of such costs are
impractical or extremely difficult to ascertain. Such costs may include, but
are not limited to, processing and accounting charges and late charges which may
be imposed on Landlord by any ground lease, mortgage or trust deed encumbering
the Property. Therefore, if Landlord does not receive, more than twice in any
period of twelve consecutive months, any Rent payment within ten (10) days after
it becomes due, Tenant shall pay Landlord a late charge equal to five percent
(5%) of the overdue amount. The parties agree that such late charge represents
a fair and reasonable estimate of the costs Landlord will incur by reason of
such late payment.
Section 4.07 INTEREST ON PAST DUE OBLIGATIONS. Any amount owed by Tenant
to Landlord which is not paid when due shall bear interest at the rate equal to
the prime commercial lending rate announced from time to time by Bank of
America, N.A. plus 3% per annum (the "Default Rate") from the due date of such
amount. However, interest shall not be payable on late charges to be paid by
Tenant under this Lease. The payment of interest on such amounts shall not
excuse or cure any default by Tenant under this Lease. If the interest rate
specified in this lease is higher than the rate permitted by law, the interest
rate is hereby decreased to the maximum legal interest rate permitted by law.
Section 4.08 IMPOUND FOR INSURANCE PREMIUMS. Tenant shall pay Landlord a
sum equal to one-twelfth (1/12) of the annual insurance premiums payable by
Tenant under this Lease, together with each payment of Base Rent, and Tenant
shall be relieved of its obligations to pay insurance premiums to the full
extent of the amount so paid to Landlord. Landlord shall hold such payments in
a non-interest bearing impound account. If unknown, Landlord shall reasonably
estimate the amount of real insurance premiums when due. Tenant shall pay any
deficiency of funds in the impound account to Landlord upon written request. If
Tenant defaults under this Lease, Landlord may apply any funds in the impound
account to any obligation then due under this Lease.
ARTICLE FIVE: USE OF PROPERTY
Section 5.01 PERMITTED USES. Tenant may use the Property only for the
Permitted Uses set forth in Section 1.06 above.
Section 5.02 Manner of Use. Tenant shall not cause or permit the
Property to be used in any way which constitutes a violation of any law,
ordinance, or governmental regulation or order, which annoys or interferes with
the rights of owners or occupants of adjacent properties, or which constitute a
nuisance or waste. Although Landlord shall be responsible for obtaining the
permits for any work on the Building which Landlord is obligated to perform
hereunder, Tenant shall pay for all permits, including a Certificate of
Occupancy, required for Tenant's occupancy of the Property and shall promptly
take all actions necessary to comply with all applicable statutes, ordinances,
rules, regulations, orders and requirements regulating the use by Tenant of the
Property, including the Occupational Safety and Health Act and all laws and
regulations regarding the use, storage and disposal of anything used in its
manufacturing or
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otherwise. Landlord shall cooperate as reasonably necessary in any application
by Tenant for governmental permits relating to use of the Property consistent
with this Lease.
Section 5.03 HAZARDOUS MATERIALS.
(a) As used in this Lease, the term "Hazardous Material" means
any flammable items, explosives, radioactive materials, hazardous or toxic
substances, material or waste or related materials, including any
substances defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials" or "toxic
substances" now or subsequently regulated under any applicable federal,
state or local laws or regulations, including without limitation
petroleum-based products, paints, solvents, lead, cyanide, DDT, printing
inks, acids, pesticides, ammonia compounds and other chemical products,
asbestos, PCBs and similar compounds, and including any different products
and materials which are subsequently found to have adverse effects on the
environment or the health and safety of persons.
(b) Tenant shall not cause or permit any Hazardous Material to
be generated, produced, brought upon, used, stored, treated or disposed of
in or about the Property by Tenant, its agents, employees, contractors,
sublessees or invitees without the prior written consent of Landlord.
Landlord shall be entitled to take into account such other factors or facts
as Landlord may reasonably determine to be relevant in determining whether
to grant or withhold consent to Tenant's proposed activity with respect to
Hazardous Material. Landlord acknowledges that Tenant will store and use
on the Property the Hazardous Materials listed or described on Exhibit C
attached hereto, and Tenant covenants and agrees that all storage, use or
other disposition of all such Hazardous Materials shall be in strict
compliance with all applicable laws, ordinances and regulations. In any
event, however, shall Landlord be required to consent to the installation
or use of any storage tanks on the Property.
(c) Landlord represents and warrants to Tenant that as of the
date of this Lease, there are (and as of the Commencement Date there will
be) no Hazardous Materials on or other environmental conditions affecting
the Building or the rest of the Property in violation of any applicable
law. Landlord agrees to indemnify, defend and hold Tenant and its
officers, employees and agents harmless from any claims, judgments,
damages, penalties, fines, costs, liabilities (including sums paid in
settlement of claims) or loss, including actual attorney fees, consultant
fees and expert fees, which arise during or after the term of this Lease
from or in connection with the presence or suspected presence of Hazardous
Materials in the Building or in the soil, groundwater or soil vapor on or
under the Property, unless the Hazardous Materials are present solely as a
result of the negligence or willful misconduct of Tenant, its officers,
employees or agents. The foregoing indemnities shall not be construed to
limit or adversely affect the ability of either Landlord or Tenant to avail
itself of the benefits of the insurance coverages set forth in this Lease.
The foregoing indemnification shall survive the expiration or earlier
termination of this Lease.
Section 5.04 SIGNS AND AUCTIONS. Tenant shall not place any signs on the
Property without Landlord's prior written consent, which shall not be
unreasonably withheld so long as
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the proposed signs comply with applicable zoning regulations. Tenant shall not
conduct or permit any auctions or sheriff's sales at the Property.
Section 5.05 INDEMNITY.
(a) Subject to applicable insurance coverage and to the waiver
of subrogation contained in Section 4.04(g), Tenant shall indemnify
Landlord against and hold Landlord harmless from any and all costs, claims
or liability arising from (i) Tenant's use of the Property, (ii) the
conduct of Tenant's business or anything else done or permitted by Tenant
to be done in or about the Property, including any contamination of the
Property or any other property resulting from the presence of use of
Hazardous Material caused or permitted by Tenant, (iii) any breach or
default in the performance of Tenant's obligations under this Lease, (iv)
any misrepresentation or breach of warranty by Tenant under this Lease, or
(v) other acts or omissions of Tenant. Tenant shall defend Landlord
against any such cost, claim or liability at Tenant's expense with counsel
reasonably acceptable to Landlord or, at Landlord's election, Tenant shall
reimburse Landlord for any legal fees or costs incurred by Landlord in
connection with any such claim.
(b) Landlord shall indemnify Tenant against and hold Tenant
harmless from any and all costs, claims or liability arising from (i)
Landlord's use of the Property, (ii) anything done or permitted by Landlord
to be done in or about the Property, including any contamination of the
Property or any other property resulting from the presence of use of
Hazardous Material caused or permitted by Landlord, (iii) any breach or
default in the performance of Landlord's obligations under this Lease, (iv)
any misrepresentation or breach of warranty by Landlord under this Lease,
or (v) other negligent or wrongful acts or omissions of Landlord. Landlord
shall defend Tenant against any such cost, claim or liability at Landlord's
expense with counsel reasonably acceptable to Tenant or, at Tenant's
election, Landlord shall reimburse Tenant for any legal fees or costs
incurred by Tenant in connection with any such claim.
(c) As a material part of the consideration to Landlord, Tenant
hereby assumes all risk of damage to property or injury to persons in or
about the Property arising from any cause, and Tenant hereby waives all
claims in respect thereof against Landlord, except for any claim arising
out of Landlord's negligence or willful misconduct.
(d) As used in this Section, the term "Tenant" shall include
Tenant's employees, agents, contractors and invitees, if applicable, and
the term "Landlord" shall include Landlord's agents, partners, officers,
managers, employees and lenders.
Section 5.06 LANDLORD'S ACCESS. Landlord or its agents may enter the
Building at all reasonable times to show the Building to potential buyers,
investors or other parties, to inspect and conduct tests in order to monitor
Tenant's compliance with all applicable environmental laws and all laws
governing the presence and use of Hazardous Material, or for any other purpose
Landlord deems necessary. In all events, Landlord shall make a good faith
effort to minimize the effect of any such entry on Tenant's business in the
Building. Except in the case of an emergency, Landlord shall give Tenant
reasonable prior notice of such entry and Tenant shall
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have the right, if it has reasonable suspicion, to approve who may tour or
inspect the Property, to designate an agent of Tenant to accompany Landlord on
any inspection, or to devise reasonable procedures to ensure that no trade
secrets or confidential information is being misappropriated or taken. Landlord
may place customary "For Sale" or "For Lease" signs on the Property during the
last six months of the Lease Term.
Section 5.07 QUIET POSSESSION. If Tenant pays the rent and is not in
default beyond any applicable notice and cure period, Tenant may occupy and
enjoy the Building and the remainder of the Property for the full Lease Term,
subject to the provisions of this Lease.
ARTICLE SIX: CONDITION OF PROPERTY; MAINTENANCE, REPAIRS AND ALTERATIONS
Section 6.01 EXISTING CONDITIONS. Tenant understands and acknowledges
that Tenant's occupancy and use of the Property is subject to certain recorded
mattes, laws, ordinances, and governmental regulations and orders. Landlord
represents and warrants that no matter of record substantially impairs Tenant's
ability to occupy and use the Property in accordance with the provisions of this
Lease. Except as provided herein, Tenant acknowledges that neither Landlord nor
any agent of Landlord has made any representation as to the condition of the
Property or the suitability of the Property for Tenant's intended use other than
that upon Substantial Completion, the Building shall be suitable for
construction of the Tenant Improvements.
Section 6.02 EXEMPTION OF LANDLORD FROM LIABILITY. Landlord shall not be
liable for any damage or injury to the person, business (or any loss of income
therefrom), goods, wares, merchandise or other property of Tenant or anyone
claiming by or through Tenant in or about the Property, whether such damage or
injury is caused by or results from (i) fire, steam, electricity, water, gas or
rain, (ii) the breakage, leakage, obstruction or other defects of pipes,
sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures
or any other cause, or (iii) conditions arising in or about the Property, or
from other sources or places which are not under the ownership or control of
Landlord. Landlord shall not be liable for any such damage or injury even
though the cause of or the means of repairing such damage or injury are not
accessible to Tenant (unless Landlord has failed to correct the cause of such
damage or injury within a reasonable time after notice of the condition). The
provisions of this Section 6.02 shall not, however, exempt Landlord from
liability for Landlord's negligence or willful misconduct.
Section 6.03 LANDLORD'S OBLIGATIONS.
(a) Except as provided in Article Seven (Damage and Destruction)
and Article Eight (Condemnation), Landlord shall maintain the foundations,
exterior walls (excluding windows, doors, plate glass) and the interior
surfaces of exterior walls and painting of the exterior surfaces of
exterior walls) and roof of the Building in good condition and repair, at
Landlord's sole expense. Landlord shall have no other obligation to bear
any other expense of operation or maintenance of the Property (subject to
Landlord's obligations under Section 2.03 to correct any latent defects in
Landlord's Work or Tenant's Improvements).
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(b) Landlord shall maintain the mechanical systems and utilities
serving the Building and all parking areas, driveways, sidewalks, loading
areas, access roads, corridors, fences, landscaping and planted areas of
the Property in good order, condition and repair, consistent with
first-class office/warehouse commercial property. Tenant shall pay all
costs incurred by Landlord for such Maintenance ("Property Expenses"),
including without limitation costs and expenses for the following:
gardening and landscaping; exterior building repainting and glass cleaning,
as necessary; resurfacing of asphalt parking areas and driveways if further
patching or other repair is inconsistent with a first-class property or if
the cost of such resurfacing, amortized as an annual charge over the
expected useful life of the new surface, will be comparable to or less than
the annual cost of repair); utilities, water and storm sewer charges;
repairing, resurfacing, painting, lighting, cleaning, refuse removal,
security and similar items; and a reasonable allowance to Landlord or
Landlord's agent (which may include Chandelle Development LLC, an affiliate
of Landlord) for management and supervision. Landlord may cause any or all
of such services to be provided by third parties at market rates for
similar services including all customary elements, and the cost of such
services shall be charged to Tenant in conformity with generally accepted
accounting principles, consistently applied.
(c) Landlord shall estimate in advance the Property Expenses
payable by Tenant hereunder for each calendar year during the term of this
Lease, and shall provide statements of such estimated costs to Tenant
annually (provided, however, that Landlord may adjust such estimates at any
time based upon Landlord's experience and reasonable anticipation of
costs). Tenant shall pay annual Property Expenses (prorated for any
fractional month) in monthly installments concurrently with payment of Base
Rent. Within ninety (90) days after the end of each calendar year of the
Lease term, Landlord shall deliver to Tenant a statement prepared in
accordance with generally accepted accounting principles setting forth, in
reasonable detail, the Property Expenses paid or incurred by Landlord
during the preceding calendar year. Upon receipt of such statement, there
Shall be an adjustment between Landlord and Tenant, with payment to or
credit given by Landlord (as the case may be) so that Landlord shall
receive the entire amount of Building Expenses for such period. Tenant
shall have the right, within sixty (60) days after receipt of any such
statements of estimated costs or annual reconciliation, to question in
writing any particular item or items of expense which Tenant believes in
good faith are not chargeable to Tenant under this Lease or are excessive
and, if Landlord is unable to resolve the items in question to the
reasonable satisfaction of Tenant within a reasonable time, the matter
shall be referred for determination to an independent commercial property
management professional selected jointly by Landlord and Tenant. Tenant
shall nonetheless continue to pay installments against Property Expenses
based on Landlord's estimate or reconciliation pending resolution of the
dispute. Tenant shall also have the right to audit Landlord's books and
records relating to Property Expenses, at Tenant's expense, not more
frequently than once per calendar year.
(c) Landlord shall make repairs under this Section 6.03 within a
reasonable time after receipt of written notice from Tenant of the need for
such repairs. Tenant waives the benefit of any statute in effect now or in
the future which might give Tenant The right to make repairs at Landlord's
expense (subject to the provisions of Section
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10.05 below) or to terminate this Lease due to Landlord's failure to keep
the Property in good order, condition and repair as required under this
Section 6.03.
Section 6.04 TENANT'S OBLIGATIONS.
(a) Except as provided in Section 6.03, Article Seven (Damage
and Destruction) and Article Eight (Condemnation), Tenant shall keep all
portions of the Building in good order, condition and repair (including.
interior repainting and refinishing, as needed). If any portion of the
Building which Tenant is obligated to repair cannot be fully repaired or
restored, Tenant shall promptly replace such portion of the Building. If
any part of the Property is damaged by any negligent or wrongful act or
omission of Tenant, Tenant shall pay Landlord the cost of repairing or
replacing such damaged property in excess of proceeds of applicable
insurance, whether or not Landlord would otherwise be obligated to pay the
cost of maintaining or repairing such property. It is the intention of
Landlord and Tenant that Landlord shall deliver the Building to Tenant as
an attractive and first-class office/warehouse budding in fully operative
condition, and that at all times thereafter Tenant shall maintain in the
same condition all portions of the Building which Tenant is obligated to
maintain (ordinary wear and tear and damage by the elements excepted).
(b) Tenant shall fulfill all of Tenant's obligations under this
Section 6.04 at Tenant's sole expense. If Tenant fails to effect any
maintenance, repair or replacement required by this Section 6.04, Landlord
may, upon ten (10) days prior notice to Tenant (except that no notice shall
be required in the case of an emergency), enter the Property and perform
such maintenance or repair (including replacement, as needed) on behalf of
Tenant. In such case, Tenant shall reimburse Landlord for all reasonable
costs incurred in performing such maintenance or repair immediately upon
demand.
Section 6.05 ALTERATIONS, ADDITIONS AND IMPROVEMENTS.
(a) Tenant shall not make any alterations, additions or
improvements to the Property (other than Tenant's Improvements) without
Landlord's prior written consent, except for non-structural alterations
which do not exceed Forty Thousand Dollars ($40,000) in cost cumulatively
over the Lease Term and which are not visible from the outside of the
Building. Landlord may require Tenant to provide demolition and/or lien
and completion bonds for amounts in excess of $40,000 in form and amount
reasonably satisfactory to Landlord. Tenant shall promptly remove any
alterations, additions or improvements constructed in violation of this
Paragraph 6.05(a) upon Landlord's written request. All alterations,
additions and improvements shall be done in a good and workmanlike manner,
in conformity with all applicable laws and regulations, and by a contractor
approved by Landlord. Upon completion of any such work, Tenant shall
provide Landlord with "as built" plans, copies of all construction
contracts and proof of payment for all labor and materials.
(b) Tenant shall pay when due all claims for labor and material
furnished to the Property. Tenant shall give Landlord at least ten (10)
days' prior written notice of the commencement of any work on the Property,
regardless of whether Landlord's consent m
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such work is required. Landlord may elect to record and post notices of
non-responsibility on the Property,
(c) Tenant shall have not have the right to remove any fixtures
or installed at the Property unless, prior to installation of any such
fixtures, Tenant shall notify Landlord in writing of such installation and
of Tenant's intent to retain ownership of such fixtures and Landlord agrees
in writing that such fixtures may be installed at the Property and shall
remain the property of Tenant (which agreement shall not be unreasonably
withheld). Any such fixtures so installed at the Property with the written
agreement of Landlord shall be considered to be "Tenant's Equipment" for
purposes of Section 6.06 below.
Section 6.06 CONDITION UPON TERMINATION. Upon the termination of the
Lease, Tenant shall surrender the Property to Landlord, broom clean and in the
same condition as received except for damage by the elements and ordinary wear
and tear which Tenant was not otherwise obligated to remedy under any provision
of this Lease. However, Tenant shall not be obligated to repair any damage
which Landlord is required to repair under Article Seven (Damage or
Destruction). In addition, Landlord may require Tenant to remove any
alterations, additions or improvements (whether or not made with Landlord's
consent) prior to the expiration of the Lease and to restore the Property to its
prior condition, all at Tenant's expense. All alterations, additions and
improvements which Landlord (at the time of granting consent, if required) has
not required Tenant to remove shall be Landlord's property and shall be
surrendered to Landlord upon the expiration or earlier termination of the Lease,
except that Tenant may remove any of Tenant's Equipment which can be removed
without material damage to the Property. Tenant shall repair, at Tenant's
expense, any damage to the Property caused by the removal of any of Tenant's
Equipment. In no event shall Tenant remove any of the following materials or
equipment (which shall be deemed Landlord's property) without Landlord's prior
written consent; any power wiring or power panels; lighting or lighting
fixtures; wall coverings; drapes, blinds or other window coverings; carpets or
other floor coverings; heaters, air conditioners (other than package units) or
any other heating or air conditioning equipment; fencing or security gates; or
other similar building operating equipment and decorations.
ARTICLE SEVEN: DAMAGE OR DESTRUCTION
Section 7.01 PARTIAL DAMAGE TO PROPERTY.
(a) Tenant shall notify Landlord in writing immediately upon the
occurrence of any damage to the Budding. If the Building is only partially
damaged (that is, less than fifty percent (50%) of the Property is
untenantable as a result of such damage or less then fifty percent (50%) of
Tenant's operations are materially impaired) and can be repaired within 120
days (in the written opinion of a licensed architect), and if insurance
proceeds are sufficient to pay for the necessary repairs, this Lease shall
remain in effect and Landlord shall repair the damage to the Building
(including Tenant's fixtures, equipment and improvements, to the extent of
available insurance proceeds) as soon as reasonably possible.
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(b) If the insurance proceeds are not sufficient to pay the
entire cost of repair, or if the cause of the damage is not covered by the
insurance policies which Tenant maintains under Paragraph 4.04(b), Landlord
may elect either to (i) repair the damage as soon as reasonably possible,
in which case this Lease shall remain in full force and effect, or (ii)
terminate this Lease as of the date the damage occurred. Landlord shall
notify Tenant within thirty (30) days after receipt of notice of the
occurrence of the damage whether Landlord elects to repair the damage or
terminate the Lease. If Landlord elects to repair the damage, Tenant shall
(subject to the terms of this Lease) pay Landlord the "deductible amount"
(if any) under Tenant's insurance policies and, if the damage was due to an
act or omission of Tenant, or Tenant's employees, agents, contractors or
invitees, the difference between the actual cost of repair and any
insurance proceeds received by Landlord. If Landlord elects to terminate
the Lease, Tenant may elect to continue this Lease in fall force and
effect, in which case Tenant shall repair any damage to the Property and
pay the cost of such repair, except that upon satisfactory completion of
such repairs, Landlord shall deliver to Tenant any insurance proceeds
received by Landlord for the damage repaired by Tenant. Tenant shall give
Landlord written notice of such election within ten (10) days after
receiving Landlord's termination notice.
(c) If (i) the damage to the Building occurs during the last six
(6) months of the Lease Term and such damage will require more than thirty
(30) days to repair or (ii) any damage to the Building is so severe (in the
written opinion of Landlord's architect) that it cannot practically be
repaired within 120 days (or within 150 days, if any mortgagee of the
Property will not permit termination of this Lease by Tenant for damage
requiring less than 150 days to repair despite Landlord's best efforts to
obtain such mortgagee's approval of a 120-day repair period), either
Landlord or Tenant may elect to terminate this Lease of the date the damage
occurred, regardless of the sufficiency of any insurance proceeds. The
party electing to terminate this Lease shall give written notification to
the other party of such election within thirty (30) days after Tenant's
notice to Landlord of the occurrence of the damage.
(d) Any rights of Tenant to terminate this Lease under this
Section 7.02 may not be exercised by Tenant if Tenant or its agents or
employees were the cause of the damage.
Section 7.02 SUBSTANTIAL OR TOTAL DESTRUCTION. If the Building is
substantially or totally destroyed by any cause whatsoever (that is, the damage
to the Property is greater than partial damage as described in Section 7.01),
this Lease shall terminate as of the date the destruction occurred, regardless
of whether Landlord receives any insurance proceeds. Notwithstanding the
preceding sentence, if the Building can be rebuilt within 120 days after the
date of destruction (in the written opinion of a licensed architect), Landlord
may elect to rebuild the Building at no expense to Tenant, in which case this
Lease shall remain in full force and effect. Landlord shall notify Tenant of
such election within thirty (30) days after Tenant's notice of the occurrence of
total or substantial destruction. If Landlord so elects, Landlord shall rebuild
the Property at Landlord's sole expense, except that if the destruction was
caused by an act or omission of Tenant, or Tenant's employees, agents,
contractors or invitees, Tenant shall pay Landlord the difference between the
actual cost of repair and any insurance proceeds received by Landlord (except m
the extent that such difference results from failure of Landlord to carry
14
casualty insurance of the types and in the amounts required by this Lease). Any
rights of Tenant hereunder may not be exercised by Tenant if Tenant or its
agents or employees were the cause of the damage.
Section 7.03 TEMPORARY REDUCTION OF RENT. If the Property is destroyed
or damaged and Landlord or Tenant repairs or restores the Property pursuant to
the provisions of this Article Seven, Rent shall continue to be due in
accordance with this Lease; however, Base Rent shall be paid from proceeds of
Landlord's loss of rents insurance to the full available extent of such
insurance and, to the extent that such proceeds are not available or have been
exhausted, Base Rent shall ▇▇▇▇▇ during the period of reconstruction
proportionately to the area of the Building involved in such reconstruction.
Except as so provided, Tenant shall not be entitled to any compensation,
reduction or reimbursement from Landlord as a result of any damage, destruction,
repair or restoration of or to the Property.
Section 7.04 WAIVER. Tenant waives the protection of any statute, code
or judicial provision which grants a tenant the right to terminate a lease in
the event of a substantial or total destruction of the leased property. Tenant
agrees that the provisions of Section 7.02 above shall govern the rights and
obligations of Landlord and Tenant in the event of any substantial or total
destruction of the Building.
ARTICLE EIGHT: CONDEMNATION
If all or any portion of the Property is taken under the power of eminent
domain or sold under the threat of that power (all of which are called
"Condemnation"), this Lease shall terminate as to the part taken or sold on the
date the condemning authority takes title or possession, whichever occurs first.
If more than twenty percent (20%) of the floor area of the Building is taken,
either Landlord or Tenant may terminate this Lease as of the date the condemning
authority takes title or possession, by delivering written notice to the other
within ten (10) days after receipt of written notice of such taking (or, in the
absence of such notice, within ten (10) days after the condemning authority
takes title or possession). If neither Landlord nor Tenant terminates this
Lease, this Lease shall remain in effect as to the portion of the Building not
taken, except that the Rent shall be reduced in proportion to the reduction (if
any) in the floor area of the Building. Any Condemnation award or payment shall
be distributed in the following order: (a) first, to any ground lessor,
mortgagee or beneficiary under a deed of trust encumbering the Property, the
amount of its interest in the Property; (b) second, to Tenant, only the amount
of any award specifically designated for loss of or damage to Tenant's trade
fixtures or removable personal property; and (c) third, to Landlord, the
remainder of such award, whether as compensation for reduction in the value of
the leasehold, the taking of the fee, or otherwise. If this Lease is not
terminated, Landlord shall as soon as reasonably practicable repair any damage
to the Property caused by the Condemnation, except that Landlord shall not be
obligated to repair any damage for which Tenant has been reimbursed by the
condemning authority. If the severance damages received by Landlord are not
sufficient to pay at least 80% of the cost of such repair, Landlord shall have
the right to either terminate this Lease or make such repair at Landlord's
expense.
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ARTICLE NINE: ASSIGNMENT AND SUBLETTING
Section 9.01 LANDLORD'S CONSENT REQUIRED. No portion of the Property or
of Tenant's interest in this Lease may be acquired by any other person or
entity, whether by sale, assignment, mortgage, sublease, transfer, operation of
law, or act of Tenant, without Landlord's prior written consent, except as
provided in Section 9.02 below. Landlord has the right to grant or withhold its
consent as provided in Section 9.05 below. Any attempted transfer without
consent shall be void and shall constitute a non-curable breach of this Lease.
Section 9.02 TENANT AFFILIATE. Tenant may assign this Lease or sublease
the Property, without Landlord's consent, to any corporation which controls, is
controlled by or is under common control with Tenant, or to any corporation
resulting from the merger of, consolidation with or acquisition of Tenant
("Tenant's Affiliate"). In such case, any Tenant's Affiliate shall assume in
writing all of Tenant's obligations under this Lease.
Section 9.03 NO RELEASE OF TENANT. No transfer permitted by this Article
Nine, whether with or without Landlord's consent, shall release Tenant or change
Tenant's primary liability to pay the Rent and to perform all other obligations
of Tenant under this Lease. Landlord's acceptance of rent from any other person
is not a waiver of any provision of Article Nine. Consent to one transfer is
not a consent to any subsequent transfer. If Tenant's transferee defaults under
this Lease, Landlord may proceed directly against Tenant without pursuing
remedies against the transferee. Landlord may consent to subsequent assignments
or modifications of this Lease by Tenant's transferee, without notifying Tenant
or obtaining its consent. Such action shall not relieve Tenant's liability
under this Lease.
Section 9.04 LANDLORD'S CONSENT. Tenant's request for consent to any
transfer described in Section 9.01 shall set forth in writing the details of the
proposed transfer, including the name, business and financial condition of the
prospective transferee, financial details of the proposed transfer (such as the
term of and the rent and security deposit payable under any proposed assignment
or sublease), and any other information which Landlord reasonably deems
relevant. Landlord shall have the right to withhold consent, if reasonable, or
to grant consent, based on the following factors: (i) the business of the
proposed assignee or subtenant and the proposed use of the Property; (ii) the
net worth and financial reputation of the proposed assignee or subtenant; (iii)
absence of material default by Tenant in regard to its obligations under the
Lease; and (iv) such other factors as Landlord may reasonably deem relevant.
Landlord shall be deemed to have consented to an assignment of Tenant's rights
under this Lease if Landlord falls to respond to a written request for such
consent within 15 days after receipt of such request.
Section 9.05 NO MERGER. No merger shall result from Tenant's sublease of
the Property under this Article Nine, Tenant's surrender of this Lease or the
termination of this Lease in any other manner. In any such event, Landlord may
terminate any or all subtenancies or succeed to the interest of Tenant as
sublandlord under any or all sub-tenancies.
ARTICLE TEN: DEFAULTS; REMEDIES
Section 10.01 COVENANTS AND CONDITIONS. Tenant's performance of each of
Tenant's obligations under this Lease is a condition as well as a covenant.
Tenant's right to continue in
16
possession of tile Property is conditioned upon such performance. Time is of
the essence in the performance of all covenants and conditions,
Section 10.02 DEFAULTS. Tenant shall be in material default under this
Lease:
(a) If Tenant abandons the Building, or if Tenant's vacation of
the Building results in the cancellation of any insurance described in
Section 4.04 which is not promptly replaced by Tenant;
(b) If Tenant fails to pay Rent or any other charge within ten
(10) days after written notice from Landlord that such payment is due;
(c) If Tenant fails to perform any of Tenant's non-monetary
obligations under this Lease for a period of thirty (30) days after
written notice from Landlord (provided, however, that if more than thirty
(30) days are required to complete such performance, Tenant shall not be in
default if Tenant commences such performance within the 30-day period and
thereafter diligently pursues is completion); and
(d) If (i) Tenant makes a general assignment or general
arrangement for the benefit of creditors, (ii) if a petition for
adjudication of bankruptcy or for reorganization or rearrangement is filed
by or against Tenant and is not dismissed within sixty (60) days, (iii) a
trustee or receiver is appointed to take possession of substantially all of
Tenant's assets located at the Property or of Tenant's interest in the
Lease and possession is not restored to Tenant within thirty (30) days, or
(iv) substantially all of Tenant's assets located at the Property or of
Tenant's interest in the Lease is subjected to attachment, execution or
other judicial seizure which is not discharged within thirty (30) days
(provided, however, that if a court of competent jurisdiction determines
that any of the acts described in this subparagraph (d) is not a default
under this Lease, and a trustee is appointed to take possession (or if
Tenant remains a debtor in possession) and such trustee or Tenant transfers
Tenant's interest hereunder, then Landlord shall receive, as Additional
Rent, the excess, if any, of the Rent (or any other consideration paid in
connection with such assignment or sublease) over the rent payable by
Tenant under this Lease.
Any notice required by this Section 10.02 is intended to satisfy any and all
notice requirements imposed by law on Landlord and is not in addition to any
such requirement.
Section 10.03 REMEDIES. On the occurrence of any material default by
Tenant which is not cured within any applicable grace period, Landlord may take
any of the following actions at any time thereafter, with or without notice or
demand and without limiting Landlord in the exercise of any right or remedy
which Landlord may have.
(a) Landlord may terminate Tenant's right to possession of the
Property by any lawful means, in which case this Lease, at Landlord's option and
election, shall terminate and Tenant shall immediately surrender possession of
the Property to Landlord. In such event, Landlord shall be entitled to recover
from Tenant all damages incurred by Landlord by reason of Tenant's default,
including (i) the worth at the time of the award of the unpaid Base Rent and all
17
Additional Rent and other charges which Landlord has earned at the time of the
termination, (ii) the worth at the time of the award of the amount by which the
unpaid Base Rent and all Additional Rent and other charges which Landlord would
have earned after termination until the time of the award exceed the amount of
such rental loss that Tenant proves Landlord could have reasonably avoided;
(iii) the net present value of the worth at the time of the award of the amount
by which the unpaid Base Rent and all Additional Rent and other charges which
Tenant would have paid for the balance of the Lease Term after the time of the
award exceeds the amount of such rental loss that Tenant proves Landlord could
have reasonably avoided; and (iv) any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant's failure to perform
its obligations under the Lease or which in the ordinary course of things would
be likely to result therefrom, including, but not limited to, any costs or
expenses Landlord incurs in maintaining or preserving the Property after such
default, the cost of recovering possession of the Property, expenses of
reletting, including necessary renovation or alteration of tile Property,
Landlord's reasonable attorney fees incurred in connection therewith, and any
real estate commission paid or payable. As used in subparts (i) and (ii) above,
the "worth at the time of the award" is computed by allowing interest on unpaid
amounts at the Default Rate. As used in subpart (iii) above, the "worth at the
time of the award" is computed by discounting such amount at the discount rate
of the Federal Reserve Bank of San Francisco at the time of the award plus one
percent (1%).
(b) Landlord may maintain Tenant's right to possession, in which
case this Lease shall continue in effect whether or not Tenant has abandoned the
Property. In such event, Landlord shall be entitled to enforce all of
Landlord's rights and remedies under this Lease, including the right to recover
the rent as it becomes due.
(c) Landlord may pursue any other remedy now or hereafter
available to Landlord under the laws or judicial decisions of the state in which
the Property is located.
If Tenant has abandoned the Property, Landlord shall have the option of retaking
possession of the Property and recovering from Tenant the amount specified in
subparagraph (a) above, or proceeding under subparagraph (b) above. All rights
and remedies provided to Landlord hereunder are cumulative with all other rights
and remedies provided hereunder or otherwise available at law or in equity, and
Landlord's exercise of any right or remedy shall not prevent it from exercising
any other right or remedy.
Section 10.04 LANDLORD DEFAULT; TENANT'S RIGHT TO OFFSET. In the event
that Landlord fails to comply with any covenant or satisfy any other obligation
set forth in this Lease within 30 days after written notice of the condition
requiring action (or immediately after such written notice, if such condition
creates an emergency), Tenant may take all reasonable steps to correct such
condition and shall have the right to offset the cost of such action against the
next installment or installments of Base Rent.
ARTICLE ELEVEN: PROTECTION OF LENDERS
Section 11.01 SUBORDINATION. Tenant acknowledges that the Property is
currently subject to an existing deed of trust to which this Lease is
subordinate. Landlord shall, prior to the Commencement Date, obtain from the
beneficiary of such deed of trust a non-disturbance
18
agreement, in form reasonably satisfactory to Tenant, relating to this Lease and
Tenant's leasehold interest hereunder. Landlord shall have the right to
subordinate this Lease to any ground lease, deed of trust or mortgage
encumbering the Property, any advances made on the security thereof and any
renewals, modifications, consolidations, replacements or extensions thereof,
whenever made or recorded. Tenant shall cooperate with Landlord and any lender
which is acquiring a security interest in the Property or the Lease, and in that
regard Tenant shall execute such further documents and assurances as such lender
may require; provided, however, that any such lender or ground lessor shall also
execute a non-disturbance agreement, in form reasonably satisfactory to Tenant,
confirming that Tenant's obligations under this Lease shall not be increased in
any material way (the performance of ministerial acts shall not be deemed
material), the financial terms of this Lease shall not be changed and Tenant
shall not be deprived of its rights under this Lease. Tenant's right to quiet
possession of the Property during the Lease Term shall not be disturbed if
Tenant pays the Rent and performs all of Tenant's obligations under this Lease
and is not otherwise in default beyond any applicable notice and cure period.
If any ground lessor, beneficiary or mortgagee elects to have this Lease prior
to the lien of such ground lease, deed of trust or mortgage and gives written
notice thereof to Tenant, this Lease shall be deemed prior to such ground lease,
deed of trust or mortgage whether this Lease is dated prior to subsequent to the
date of such ground lease, deed of trust or mortgage or the date of recording
thereof.
Section 11.02 ATTORMENT. If Landlord's interest in the Property is
acquired by any ground lessor, beneficiary under a deed of trust, mortgagee or
purchaser at a foreclosure sale, Tenant shall attorn to the transferee of or
successor to Landlord's interest in the Property and recognize such transferee
or successor as Landlord under this Lease. Tenant waives the protection of any
statute or rule of law which gives or purports to give Tenant any right to
terminate this Lease or surrender possession of the Property upon the transfer
of Landlord's interest.
Section 11.03 SIGNING OF DOCUMENTS. Tenant shall sign and deliver any
instrument or documents necessary to evidence any such attornment or
subordination or agreement to do so within ten (10) days after written request.
Section 11.04 ESTOPPEL CERTIFICATES. Upon Landlord's written request,
Tenant shall execute, acknowledge and deliver to Landlord a written statement
certifying: (i) that none of the terms or provisions of this Lease have been
changed (or if they have been changed, stating how they have been changed); (ii)
that this Lease has not been cancelled or terminated; (iii) the last date of
payment of the Base Rent and other charges and the time period covered by such
payment; (iv) that Landlord is not in default under this Lease (or, if Landlord
is claimed to be in default, stating why); and (v) such other representations or
information with respect to Tenant or the Lease as Landlord may reasonably
request or which any prospective purchaser or encumbrancer of the Property may
reasonably require. Tenant shall deliver such statement to Landlord within ten
(10) days after Landlord's request. Landlord may give any such statement by
Tenant to any prospective purchaser or encumbrancer of the Property, who may
rely conclusively upon such statement as true and correct.
Section 11.05 TENANT'S FINANCIAL CONDITION. Tenant hereby warrants,
represents, and agrees that it has the financial ability to perform all
obligations and covenants hereunder. Tenant
19
agrees that it will immediately advise landlord of any adverse financial reports
or matter which might materially impair Tenant's ability to perform its
obligations and covenants hereunder. Tenant shall deliver to any lender
designated by Landlord any internally-prepared (or audited, if available)
financial statements which may be required by such lender to facilitate the
financing and refinancing of the Property. Tenant represents and warrants to
Landlord that each such financial statement will be a true and accurate
statement as of the date thereof. Landlord shall execute a confidentiality
agreement, in form reasonably satisfactory to Tenant, in which Landlord confirms
that all such financial statements shall be kept confidential and shall be used
only for the purposes set forth in this Lease.
ARTICLE TWELVE: LEGAL COSTS
Section 12.01 LEGAL PROCEEDINGS. If Tenant or Landlord shall be in breach
or default under this Lease, such party (the "Defaulting Party") shall reimburse
the other party (the "Nondefaulting Party") upon demand for any costs or
expenses that the Nondefaulting Party incurs in connection with any breath or
default of the Defaulting Party under this Lease, whether or not suit is
commenced or judgment entered. Such costs shall include legal fees and costs
incurred for the negotiation of a settlement, enforcement of rights or
otherwise. Furthermore, if any action for breach of or to enforce the
provisions of this Lease is commenced, the court in such action shall award to
the parry in whose favor a judgment is entered, a reasonable sum as attorney
fees and costs. The losing party in such action shall pay such attorney fees
and costs. Tenant shall also indemnify Landlord against and hold Landlord
harmless from all costs, expenses, demands and liability Landlord may incur if
Landlord becomes or is made a party to any claim or action which is: (a)
instituted by Tenant against any third party, or by any third party against
Tenant, or by or against any person holding any interest under or using the
Property by license of or agreement with Tenant; (b) for foreclosure of any lien
for labor or material furnished to or for Tenant or such other person; (c)
otherwise arising out of or resulting from any act or transaction of Tenant or
such other person; or (d) necessary to protect Landlord's interest under this
Lease in a bankruptcy proceeding, or other proceeding under Title 11 of the
United States Code, as amended. Tenant shall defend Landlord against any such
claim or action at Tenant's expense with counsel reasonably acceptable to
Landlord or, at Landlord's election, Tenant shall reimburse Landlord for any
legal fees or costs Landlord incurs in any such claim or action.
Section 12.02 LANDLORD'S CONSENT. Tenant shall pay Landlord's reasonable
attorney fees incurred in connection with Tenant's request for Landlord's
consent under Article Nine (Assignment and Subletting), or in connection with
any other act which Tenant proposes to do and which requires Landlord's consent.
ARTICLE THIRTEEN: FIRST RIGHT OF REFUSAL
The Building is one of three similar office/warehouse buildings owned by
Landlord near the intersection of Briarwood Avenue and ▇. ▇▇▇▇▇▇ Parkway. If,
at any time during the first 30 months of the Lease Term, any area in the other
two buildings which contains at least 10,000 square feet of space becomes
available for lease (a space shall not be considered available for lease if it
remains subject to any right of refusal previously granted to Big O Development,
Inc., AT&T, or Pitney ▇▇▇▇▇ Inc.), Landlord shall so notify Tenant in writing,
and Tenant shall have
20
the right, exercisable in writing delivered to Landlord within five business
days after receipt of Landlord's notice of availability, to lease not less than
10,000 square feet or more than 20,000 square feet of such space at the Market
Rate (determined as described in Section 3.02 above).
ARTICLE FOURTEEN: MISCELLANEOUS PROVISIONS
Section 14.01 LANDLORD'S LIABILITY; CERTAIN DUTIES.
(a) As used in this Lease, the term "Landlord" means only the
current owner or owners of the fee title to the Property or the leasehold
estate under a ground lease of the Property at the time in question. Each
Landlord is obligated to perform the obligation of Landlord under the Lease
only during the time such Landlord owns such interest or title. Any
Landlord who transfers its title or interest is relieved of all liability
with respect to the obligations of Landlord under this Lease to be
performed on or after the date of transfer, provided that the transferee
assumes in writing all such subsequent obligations. However, each Landlord
shall deliver to its transferee all funds that Tenant previously paid if
such funds have not yet been applied under the terms of this Lease.
(b) Tenant shall give written notice of any failure by Landlord
to perform any of its obligations under this Lease to Landlord and to any
ground lessor, mortgagee or beneficiary under any deed of trust encumbering
the Property whose name and address has been furnished to Tenant in
writing. Landlord shall not be in default under this Lease unless Landlord
(or such ground lessor, mortgagee or beneficiary) fails to cure such
nonperformance within thirty (30) days after receipt of Tenant's notice.
However, if such non-performance reasonably requires more than thirty (30)
days to cure, Landlord shall not be in default if such cure is commenced
within such 30-day period and thereafter diligently pursued to completion.
(c) Notwithstanding any term of provision herein to the
contrary, the liability of Landlord for the performance of its duties and
obligations under this Lease is limited to Landlord's interest in the
Property, and neither the Landlord nor its partners, shareholders,
officers, members, managers or other principals shall have any personal
liability under this Lease.
Section 14.02 SEVERABILITY. A determination by a court of competent
jurisdiction that any provision of this Lease or any part thereof is illegal or
unenforceable shall not cancel or invalidate the remainder of such provision or
this Lease, which shall remain in full force and effect.
Section 14.03 INTERPRETATION. The captions of the Articles or Sections of
this Lease are to assist the parties in reading this Lease and are not a part of
the terms or provisions of this Lease. Whenever required by the context of this
Lease, the singular shall include the plural and the plural shall include the
singular. The masculine, feminine and neuter genders she each include the
others. In any provision relating to the conduct, acts or omissions of Tenant,
the term "Tenant" shall include Tenant's agents, employees, contractors,
invitees, successors or other using the Property with Tenant's expressed or
implied permission.
21
Section 14.04 INCORPORATION OF PRIOR AGREEMENTS; MODIFICATIONS. This
Lease is the only agreement between the parties pertaining to the Property, and
supersedes all prior written and oral agreements. All amendments to this Lease
shall be in writing and signed by all parties. Any other attempted amendment
shall be void.
Section 14.05 NOTICES. All notices required or permitted under this Lease
shall be in writing and shall be personally delivered or sent by certified mail,
return receipt requested, postage prepaid, or by any recognized national
overnight courier service. Notices to Tenant shall be delivered to the Building
(with a copy to ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇. Washington,
D.C. 20036), except that upon Tenant's taking possession of the Property, the
Property shall be Tenant's address for notice purposes. Notices to Landlord
shall be delivered to the address specified in Section 1.02 above. All notices
shall be effective upon delivery. Either party may change its notice address
upon written notice to the other party.
Section 14.06 WAIVERS. All waivers must be in writing and signed by the
waiving party. Either party's failure to enforce any provision of this Lease,
or Landlord's acceptance of Rent, shall not be a waiver and shall not prevent
such party from enforcing that provision or any other provision of this Lease in
the future. No statement on a payment check from Tenant or in a letter
accompanying a payment check shall be binding on Landlord. Landlord may, with
or without notice to Tenant, negotiate such check without being bound to the
conditions of such statement.
Section 14.07 NO RECORDATION. Tenant shall not record this Lease without
prior written consent from Landlord. However, either Landlord or Tenant may
require that a "Short Form" memorandum of this Lease executed by both parties be
recorded. The party requesting such recording shall pay all transfer taxes and
recording fees.
Section 14.08 BINDING EFFECT; CHOICE OF LAW. This Lease binds any party
who legally acquires any rights or interest in this Lease from Landlord or
Tenant. However, Landlord shall have no obligation to Tenant's successor unless
the rights or interests of Tenant's successor are acquired in accordance with
the terms of this Lease. The laws of the state in which the Property is located
shall govern this Lease, and the exclusive venue for any action relating to this
Lease shall be in Colorado.
Section 14.09 CORPORATE, COMPANY OR PARTNERSHIP AUTHORITY. If Tenant is
an entity, each person signing this Lease on behalf of Tenant represents and
warrants that he has full authority to do so and that this Lease binds the
corporation, company or partnership, as the case may be. If Landlord so
requests, Tenant shall promptly deliver to Landlord written evidence of such
authority, in form and substance reasonably acceptable to Landlord.
Section 14.10 FORCE MAJEURE. If Landlord (or Tenant) cannot perform any
of its obligations due to events beyond the control of Landlord (or Tenant), the
time provided for performing such obligations shall be extended by a period of
time equal to the duration of such events. Events beyond a party's control
include, but are not limited to, acts of God, war, civil commotion, labor
disputes, strikes, fire, flood or other casualty, shortages of labor or
materials government regulation or restriction and weather conditions, but shall
not include any inability to pay money.
22
Section 14.11 EXECUTION OF LEASE. This Lease may be executed in
counterparts and, when all counterpart documents are executed, the counterparts
shall constitute a single binding instrument. Landlord's delivery of this Lease
to Tenant shall not be deemed to be an offer to lease and shall not be binding
upon either parry until executed and delivered by both parties.
Section 14.12 SURVIVAL. All representations and warranties of Landlord
and Tenant shall survive the termination of this Lease.
ARTICLE FIFTEEN: BROKERS
Landlord and Tenant acknowledge that ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ Company has represented
Landlord and ▇▇▇▇▇ & ▇▇▇▇▇ Company has represented Tenant in this transaction,
and that Landlord shall pay any commissions due to these brokers pursuant to
separate agreement. If either party has dealt with any other real estate
broker, person or firm with respect to leasing or renting space in the Building,
such party shall be solely responsible for the payment of any fee due such
broker, person or firm and shall indemnify and hold the other party harmless
from and against any liability with respect thereto.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the date set forth in Section 1.01 above.
LANDLORD:
BR VENTURE, LLC,
a Delaware limited liability company
By BRIARWOOD/REVERE DEVELOPMENT LLC, a
Colorado limited liability company,
By /s/ [ILLEGIBLE]
-------------------------------------
Manager
TENANT:
RHYTHMS NETCONNECTIONS, INC.
a Delaware corporation
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 9/3/98
-------------------------------------
23
BRIARWOOD REVERE I, II AND III
[DIAGRAM]
EXHIBIT B
September ____ 1998
Rhythms Netconnections, Inc.
---------------------
---------------------
---------------------
Re: Tenant: Rhythms NetConnections, Inc.
Premises: Approximately 46,400 rentable square feet of space in the
Briarwood Revere III building (the "Premises")
Address: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
Gentlemen:
Concurrently herewith, you as Tenant and the undersigned as Landlord have
executed a Lease (the "Lease") covering the Premises (the provisions of the
Lease are hereby incorporated by reference as if fully set forth herein). In
consideration of the execution of the Lease, Landlord and Tenant mutually agree
as follows:
I. LANDLORD'S WORK
1.1 Landlord, at its sole cost and expense, shall cause the Building, as
defined in the Lease, and related improvements, to be constructed in accordance
with Exhibit A, as supplemented by those specific items contained in Schedule 1
attached hereto and incorporated herein by this reference ("Landlord's Work").
For purposes of this Work Letter, Landlord's Work shall also include
installation of all windows in the Building as well as insulation of sprinklers
in connection with landscaping. The complete list of plane and specifications
for Landlord's Work shall be attached hereto as Schedule 2 and incorporated
herein by this reference (the "Plans and Specifications"). Landlord shall (i)
cause the Landlord's Work to be done in a good and workmanlike manner, using
first-class materials, in compliance with all applicable federal, state and
local laws, regulations, codes, ordinances and lawful orders of public
authorities (collectively, "Legal Requirements"), including, without limitation,
the Americans With Disabilities Act of 1990 ("ADA"), in substantial conformity
with the Plans and Specifications; (ii) cause Landlord's Work to be carried
forward expeditiously and with adequate work forces so as to achieve Substantial
Completion (defined below) of the Landlord's Work on or before October 1, 1998.
In the event Landlord has not achieved Substantial Completion of Landlord's Work
on or before October 1, 1998 (the "Penalty Date"), then Tenant shall receive a
credit against Base Rent in the amount of $1,000 for each day beyond the Penalty
Date that Landlord has not achieved Substantial Completion and such failure
causes a delay in the
commencement of the Tenant Finish Work. If Landlord has not achieved
Substantial Completion on or before January 1, 1999 (the "Second Penalty Date"),
then Tenant shall receive a credit against Base Rent in the amount of $1,500 for
each day beyond the Second Penalty Date that Landlord has not achieved
Substantial Completion. For purposes of this subsection, the term "Substantial
Completion" shall have the meaning set forth in Section 2.03 of the Lease Upon
Substantial Completion, Tenant and Landlord shall jointly inspect the Building
and related improvements in order to determine and record its condition and to
prepare a comprehensive list of items that have not been completed (or which
have not been correctly or properly completed) in conformity with the Plans and
Specifications ("Punch List Items"). Thereafter, Landlord shall proceed
promptly to complete and correct all Punch List Items.
II. SPACE PLANNING AND ENGINEERING
2.1 Landlord shall, within three (3) business days after the date hereof,
provide to Tenant (or "Tenant's Architect" as hereinafter defined) the
architectural and engineering drawings for the Building and related improvements
("Landlord's Drawings").
2.2 Tenant shall provide to Landlord Tenant-approved space plans for the
Premises (collectively referred to herein as "Space Plans") prepared by
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Incorporated (the "Architect"). The Space Plans shall be
sufficiently complete to permit Landlord to review such drawings for the purpose
of determining conformity with the base building specifications for the Building
and for the purposes described in Section 2.3 below.
2.3 Within three (3) business days of receipt by Landlord of the Space
Plans, Landlord and engineers selected by Landlord ("Landlord's Engineers")
shall review the Space Plans and confer with Tenant concerning such review. The
Architect shall advise Landlord and Landlord's Engineers whether the Building
HVAC System and/or the electrical service will have to be supplemented in order
to allow installation of work shown on the Space Plans. It Landlord determines
that the Space Plans (i) are inconsistent with the base building specifications
for the Building, including, without limitation, the HVAC system or electrical
system; (ii) are not sufficiently complete to permit Landlord to review them for
the purposes set forth herein; or (iii) indicate space usages inconsistent with
the Lease, Landlord shall so advise Tenant and Tenant shall revise the Space
Plans accordingly and resubmit them to Landlord and the review procedure and
time frames set forth above shall be repeated. Landlord shall pay all costs and
expenses incurred in connection with review and approval of the Space Plans by
Landlord's Engineers, which costs shall not be included within the Allowance as
hereinafter provided. When approved by Landlord and Tenant, the Space Plans
shall be acknowledged as such by Landlord and Tenant signing each sheet therefor
and such approved drawings shall be deemed the "Approved Space Plans."
2.4 Based upon the Approved Space Plans, Tenant shall have prepared the
structural, plumbing, fire protection, mechanical controls, electrical and life
safety engineering drawings ("Engineering working Drawings"). The costs for the
preparation of the Engineering working Drawings shall be borne by Tenant,
subject to Landlord's payment of the Allowance provided in the Lease .
2
2.5 Tenant shall provide Landlord with architectural working drawings
prepared by the Architect (the Architectural Working Drawings") for the Premises
approved by Tenant for review by Landlord and Landlord's Engineers. The
Architectural Working Drawings shall be coordinated by the Architect with the
Engineering Working Drawings. The Architectural working Drawings shall be a
logical extension of the Approved Space Plans. If the review by Landlord or
Landlord's Engineers uncovers design errors, Landlord shall give notice thereof
within four (4) business days after Landlord's receipt of Architectural Working
Drawings submitted by Tenant; if the drawings are deemed acceptable, Landlord
shall communicate its approval on or before the expiration of such period. If
Landlord does not reply within such period, it shall be deemed that Landlord has
no objection thereto. If Landlord notifies Tenant of design errors, Tenant
shall revise the Architectural Working Drawings accordingly and resubmit them to
Landlord and the review procedure set forth above shall be repeated. When
approved by Landlord and Tenant, the Engineering Working Drawings and the
Architectural Working Drawings shall be acknowledged as such by Tenant and
Landlord signing each sheet thereof and such approved drawings shall be deemed
the "Final Working Drawings." Landlord shall pay all costs and expenses
incurred in connection with its review and approval of the Architectural working
Drawings.
2.6 Material changes to the Final Working Drawings may be made only upon
prior written approval of Landlord, which approval shall not be unreasonably
withheld. Landlord shall respond to all written requests for changes within
three (3) business days of Landlord's receipt of the same. If Landlord does not
respond within much period, Landlord shall be deemed to have consented to the
requested changes.
III. TENANT FINISH WORK AND TENANT FINISH ALLOWANCE
3.1 Following approval of the Final Working Drawings, Tenant shall be
responsible for the diligent completion of all tenant finish work substantially
in accordance with the Final Working Drawings (the "Tenant Finish Work"), at its
sole cost and expense, subject to Landlord's payment of the Allowance. Landlord
shall deliver possession of the Premises to Tenant for the purpose of completing
the Tenant Finish Work within two (2) business days after approval of the Final
Working Drawings (the 'Delivery Date").
3.2 Landlord, at no cost or expense to Tenant, shall assist Tenant in
obtaining three bids from qualified contractors to handle the Tenant Finish Work
and Tenant shall thereafter enter into a direct contract for design and
construction services to complete the Tenant Finish Work with one of the
proposed contractors (and subcontractors) (all of whom are collectively referred
to herein as "Tenant's Contractors") .
3.3 Landlord shall have no obligation with respect to Tenant's Contractors
except for the provision to Tenant's Contractors of so-called "value
engineering" services.
3.4 In connection with performance of all work by Tenant's Contractors,
Tenant shall assume full responsibility therefor, and for all Tenant's and/or
Tenant's Contractors' property, equipment, materials, tools or machinery placed
or stored in the Premises during the completion of the Tenant Finish Work.
Further, all work performed by Tenant's Contractors shall be in compliance with
all applicable local, state and federal laws, and rules and regulations
applicable
3
thereto. Tenant shall be responsible for causing all such work to be performed
in a good and workmanlike manner.
3.5 Tenant shall cause Tenant's Contractors to: (i) conduct their work in
such a manner so as not to unreasonably interfere with any other construction
occurring on or in the Building, if any; (ii) maintain such insurance and bonds
in force and effect as is customary for a construction project of this type but
in any event not less than that required by applicable law; and (iii) be
mutually responsible for reaching agreement with Landlord's Engineers as to the
terms and conditions for hoisting, systems interfacing, and use of temporary
utilities, if necessary.
3.6 Landlord shall pay the cost of the Tenant Finish Work completed in
accordance with the Final Working Drawings (including the cost of preparation of
the Space Plans and Working Drawings and Landlord's review thereof) up to the
maximum Allowance set forth in Section 2.04 of the Lease. Except as otherwise
provided above, the cost of all Tenant Finish Work in excess of the Allowance to
which Tenant is entitled as set forth above shall be at Tenant's expense.
3.7 As design, engineering, and construction work of the Premises is
completed and Tenant (or its construction manager) receives invoices therefor,
Tenant's Contractor shall submit a request for payment to Landlord in the
customary forms (including supporting documentation) utilized in the
construction industry. Any such request received by the first day of a month
shall be paid by the fifteenth (15th) day of that month. In the event that
Tenant's construction contract contains payment provisions which are less
favorable to Tenant than those described in the previous sentence, Landlord and
Tenant shall cooperate to minimize the adverse financial consequences to Tenant
arising from delayed payment by Landlord. Landlord shall pay the amounts
requested by delivery to Tenant of Landlord's check(s) payable to Tenant or, at
Tenant's option, payable to Tenant's contractors.
3.8 Except for Landlord's obligation to pay the Allowance, Tenant shall be
responsible, at its sole cost and expense, for all work and materials utilized
in connection with the Tenant Finish Work.
3.9 Tenant agrees to submit to Landlord copies, consisting of one reverse
mylar sepia and two blueprint copies, of the record drawings with approved
changes to the Final Working Drawings shown thereon upon completion of all work
by Tenant's Contractors.
3.10 Tenant has designated ▇▇▇▇ ▇▇▇▇▇▇ as its sole representative with
respect to the matters set forth in this Work Letter, who shall have full
authority and responsibility to act behalf of the Tenant as required in this
Work Letter. Tenant shall have the right, by written notice to Landlord, to
change its designated representative.
3.11 Landlord has designated ▇▇▇▇▇▇▇ ▇▇▇▇▇ as its representative with
respect to Landlord's responsibilities under this Work Letter, who shall have
full authority and responsibility to act on behalf of the Landlord as required
in this Work Letter. Landlord shall have the right, by written notice to
Tenant, to change its designated representative.
4
3.12 Any and all notices required to be given hereunder shall be in writing
in accordance with the terms and provisions of the Lease. However, in all cases
notices shall also be given to those individuals to be specified pursuant to
Paragraphs 3.10 and 3.11 above.
Very truly yours,
BR VENTURE, LLC,
a Delaware limited liability company
By:
----------------------------------------
Authorized Agent
"Landlord"
ACCEPTED AND APPROVED this ____ day
of September 1996.
RHYTMS NETCONNECTIONS, INC.
a Delaware corporation
By:
------------------------------------
Title:
----------------------------------
ATTEST:
By:
------------------------------------
Title:
----------------------------------
"Tenant"
5
SCHEDULE 1
LANDLORD'S WORK
(BASE BUILDING SPECIFICATIONS)
The following items are not part of Tenant Improvements, and have been included
in the the base building at Landlord's expense:
1. Masonry insulated exterior walls, grey tinted insulated store
front system, steel bar joint metal deck roof framing with ballasted 45 ml.
EPDM roof over R-19 roof insulation. Slab on grade is 5" reinforced
concrete.
2. Sanitary sewer line to the Building is 4" and ready for Tenant
connection.
3. Domestic water service to the Building is 1" meter with 1-1/2"
line run to bar joists.
4. Electrical service to the Building is a 2,000 amp bussed gutter
system, with the panel located on the west side of the Building but
excluding distribution of such electrical service within the Building.
5. Fire alarm control panel is provided for Tenant connection.
6. Fire protection sprinkler system designed to .29 GPM/sq. ft. over
2,000 square feet.
7. Base exterior Building lighting (includes no interior lighting
for the Building).
8. Conduit from the Building to South Revere Parkway for fiber optic
hookup.
9. All exterior site work required by the development plan approved
by applicable governmental authorities, including landscaping, parking lot
and sidewalks.