EXHIBIT 10.9
LEASE AGREEMENT BETWEEN
W9/TIB REAL ESTATE LIMITED PARTNERSHIP,
AS LANDLORD, AND
SYCAMORE NETWORKS, INC., AS TENANT
DATED AUGUST ___, 1999
BASIC LEASE INFORMATION
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Lease Date: August ___, 1999
Tenant: SYCAMORE NETWORKS, INC., a Delaware corporation
Landlord: W9/TIB REAL ESTATE LIMITED PARTNERSHIP, a Delaware limited
partnership
Premises: The entire building containing approximately 82,848 rentable
square feet commonly known as ▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ (the "BUILDING"), and whose street address is ▇
▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ and the Land (hereinafter
defined) and all other improvements located thereon, including,
without limitation, the parking and loading areas on the Land,
the walkways and driveways providing access to the Building and
such parking and loading areas, and the wires, cables, pipes,
mains, conduits, trenches and other fixtures, facilities and
equipment necessary or convenient to provide electricity,
telephone, cable, gas, water, sewer and other utility and
telecommunication services to the Building. The Premises are
outlined on the plan attached to the Lease as Exhibit A. The land
on which the Building is located (the "LAND") is described on
Exhibit B.
Term: Approximately sixty (60) months, commencing on the date (the
"COMMENCEMENT DATE") which is the earlier of (i) the date which
is sixty (60) days after the date (the "DELIVERY DATE") upon
which the Landlord delivers the Premises to Tenant in broom-clean
condition and free of tenants and occupants and their
possessions, or (ii) the date upon which Tenant occupies the
Premises for the Permitted Use (and not for the construction and
installation of the Work, as hereinafter defined) and ending at
5:00 p.m. on the last day of the sixtieth (60) full calendar
month following the Commencement Date, subject to adjustment and
earlier termination as provided in the Lease .
Basic Rent: Basic Rent shall be the following amounts for the following
periods of time:
LEASE MONTH MONTHLY BASIC RENT
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1-24 $79,396.00
25-60 $86,300.00
i
As used herein, the term "LEASE MONTH" shall mean each
calendar month during the Term (and if the Commencement Date
does not occur on the first day of a calendar month, the
period from the Commencement Date to the first day of the
next calendar month shall be included in the first Lease
Month for purposes of determining the duration of the Term
and the monthly Basic Rent rate applicable for such partial
month).
Security Deposit: Subject to the provisions of Section 6 of the Lease,
$500,000.00.
Rent: Basic Rent, Taxes, Additional Rent, and all other sums that
Tenant may owe to Landlord or otherwise be required to pay
under the Lease.
Permitted Use: Subject to and to the extent permitted by all applicable
Laws, general office and research and development use.
Initial Liability
Insurance Amount: $3,000,000.00
Maximum Construction
Allowance: $ 828,480.00.
Tenant's Address: Prior to Commencement Date: Following the Commencement Date:
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▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇ Attn: Corporate Counsel
At all times with a copy to:
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▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Real Estate Department
Landlord's Address: For all Notices: With a copy to:
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Archon Group, ▇.▇. ▇▇▇▇▇▇, Hall & ▇▇▇▇▇▇▇
▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, P.C.
ii
The foregoing Basic Lease Information is incorporated into and made a part of
the Lease identified above. If any conflict exists between any Basic Lease
Information and the Lease, then the Lease shall control.
LANDLORD:
W9/TIB REAL ESTATE LIMITED
PARTNERSHIP, a Delaware limited partnership
By: W9/TIB Gen-Par, Inc., a Delaware
corporation, its general partner
By: __________________________
Name:___________________
Title:__________________
TENANT:
SYCAMORE NETWORKS, INC.,
a Delaware corporation
By: __________________________
Name:________________________
Title: President/Vice President
By: ___________________________
Name:__________________________
Title: Treasurer/Assistant Treasurer
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TABLE OF CONTENTS
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Page
1. DEFINITIONS AND BASIC PROVISIONS......................... 1
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2. LEASE GRANT.............................................. 1
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4. RENT..................................................... 2
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(a) PAYMENT........................................... 2
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(b) OPERATING COSTS; TAXES............................ 2
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(c) BILLING FOR ELECTRICITY........................... 5
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5. DELINQUENT PAYMENT; HANDLING CHARGES..................... 6
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6. SECURITY DEPOSIT......................................... 6
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7. LANDLORD'S OBLIGATIONS................................... 9
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(a) SERVICES.......................................... 9
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(b) LANDLORD'S MAINTENANCE OBLIGATIONS................ 9
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(c) EXCESS UTILITY USE................................ 9
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(d) RESTORATION OF SERVICES; ABATEMENT................ 10
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8. IMPROVEMENTS; ALTERATIONS; REPAIRS; MAINTENANCE.......... 10
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(a) IMPROVEMENTS; ALTERATIONS........................ 10
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(b) REPAIRS; MAINTENANCE............................. 11
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(c) PERFORMANCE OF WORK.............................. 11
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(d) MECHANIC'S LIENS................................. 12
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(e) UTILITIES........................................ 12
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(f) FLOOR LOAD; HEAVY MACHINERY...................... 12
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9. USE...................................................... 13
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10. ASSIGNMENT AND SUBLETTING................................ 13
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(a) TRANSFERS........................................ 13
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(b) CONSENT STANDARDS................................ 13
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(c) REQUEST FOR CONSENT.............................. 13
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(d) CONDITIONS TO CONSENT............................ 14
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(e) CANCELLATION..................................... 14
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(f) ADDITIONAL COMPENSATION.......................... 14
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(g) PERMITTED TRANSFERS.............................. 14
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11. INSURANCE; WAIVERS; SUBROGATION; INDEMNITY............... 15
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(a) TENANT'S INSURANCE................................. 15
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(b) LANDLORD'S INSURANCE............................... 16
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(c) WAIVER OF NEGLIGENCE; NO SUBROGATION............... 16
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(d) TENANT'S INDEMNITY................................. 16
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12. SUBORDINATION; ATTORNMENT; NOTICE TO LANDLORD'S MORTGAGEE 17
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(a) SUBORDINATION...................................... 17
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(b) ATTORNMENT......................................... 17
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(c) NOTICE TO LANDLORD'S MORTGAGEE..................... 17
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(d) LANDLORD'S MORTGAGEE'S PROTECTION PROVISIONS....... 17
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13. RULES AND REGULATIONS.................................... 18
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14. CONDEMNATION............................................. 19
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(a) TOTAL TAKING........................................ 19
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(b) PARTIAL TAKING - TENANT'S RIGHTS..................... 19
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(c) PARTIAL TAKING - LANDLORD'S RIGHTS................... 19
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(d) AWARD............................................... 19
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15. FIRE OR OTHER CASUALTY................................... 19
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(a) REPAIR ESTIMATE.................................... 19
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(b) LANDLORD'S AND TENANT'S RIGHTS..................... 19
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(c) LANDLORD'S RIGHTS.................................. 20
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(d) REPAIR OBLIGATION.................................. 20
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16. PERSONAL PROPERTY TAXES.................................. 20
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17. EVENTS OF DEFAULT........................................ 21
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18. REMEDIES................................................. 21
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19. PAYMENT BY TENANT; NON-WAIVER............................ 22
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(a) PAYMENT BY TENANT................................. 22
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(b) NO WAIVER......................................... 23
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20. LANDLORD'S LIEN.......................................... 23
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21. SURRENDER OF PREMISES.................................... 23
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22. HOLDING OVER............................................. 23
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23. CERTAIN RIGHTS RESERVED BY LANDLORD...................... 24
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24. INTENTIONALLY DELETED.................................... 24
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25. MISCELLANEOUS............................................ 24
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(a) LANDLORD TRANSFER.................................... 24
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(b) LANDLORD'S LIABILITY................................. 24
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(c) FORCE MAJEURE........................................ 25
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(d) BROKERAGE............................................ 25
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(e) ESTOPPEL CERTIFICATES................................ 25
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(f) NOTICES.............................................. 25
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(g) SEPARABILITY......................................... 25
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(h) AMENDMENTS; AND BINDING EFFECT....................... 25
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(i) QUIET ENJOYMENT...................................... 26
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(j) NO MERGER............................................ 26
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(k) NO OFFER............................................. 26
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(l) ENTIRE AGREEMENT..................................... 26
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(m) WAIVER OF JURY TRIAL................................. 26
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(n) GOVERNING LAW........................................ 26
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(o) JOINT AND SEVERAL LIABILITY.......................... 26
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(p) FINANCIAL REPORTS.................................... 26
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(q) LANDLORD'S FEES...................................... 27
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(r) [INTENTIONALLY OMITTED].............................. 27
(s) CONFIDENTIALITY...................................... 27
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(t) HAZARDOUS MATERIALS.................................. 27
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(u) LIST OF EXHIBITS..................................... 28
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(v) TIME OF ESSENCE...................................... 28
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(w) SIGNAGE.............................................. 28
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(x) ACCESS 28
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(y) FAILURE OF TENANT TO CONTINUOUSLY OCCUPY THE PREMISES 28
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26. OTHER PROVISIONS......................................... 29
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LIST OF DEFINED TERMS
Additional Rent............................................................................ 2
Affiliate.................................................................................. 1
Amendment.................................................................................. E-1
AS-IS...................................................................................... D-1
Base Building Electrical Capacity.......................................................... 9
Basic Lease Information.................................................................... 1
Basic Rent................................................................................. i
Building................................................................................... i
Building's Structure....................................................................... 9
Casualty................................................................................... 19
Commencement Date.......................................................................... i
Common Property Expenses................................................................... 5
Common Property Lot........................................................................ 5
Common Property Plan....................................................................... 5
Construction Allowance..................................................................... D-2
Damage Notice.............................................................................. 19
Delivery Date.............................................................................. i
Estimated Delivery Date.................................................................... 1
Event of Default........................................................................... 21
Exterior Areas............................................................................. 9
Fair Market Rental Rate.................................................................... G-1
GAAP....................................................................................... 15
Hazardous Materials........................................................................ 27
HVAC....................................................................................... 10
including.................................................................................. 1
Land....................................................................................... i
Landlord................................................................................... 1, E-1
Landlord's Mortgagee....................................................................... 17
Law........................................................................................ 1
Laws....................................................................................... 1
Lease...................................................................................... 1-F-1
Lease Month................................................................................ ii
Letter of Credit........................................................................... 7
Loss....................................................................................... 16
Mortgage................................................................................... 17
Non-Disturbance Agreement.................................................................. 18
Office Park................................................................................ 6
Omni Way................................................................................... 5
Operating Costs............................................................................ 3
Operating Costs and Tax Statement.......................................................... 4
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Operating Year............................................................................. 6
Permitted Transfer......................................................................... 14
Permitted Transferee....................................................................... 14
Permitted Use.............................................................................. ii
Premises................................................................................... i
Punchlist Items............................................................................ E-1
Reduction Date............................................................................. 8
Reduction Dates............................................................................ 8
Rent....................................................................................... ii
Security Deposit........................................................................... ii
Taking..................................................................................... 19
Tangible Net Worth......................................................................... 15
Taxes...................................................................................... 4
Tenant..................................................................................... 1, 21, E-1
Tenant Party............................................................................... 1
Tenant's Common Property Percentage........................................................ 6
Term....................................................................................... i
Total Construction Costs................................................................... D-2
Transfer................................................................................... 13
Work....................................................................................... D-1
Working Drawings........................................................................... D-1
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LEASE
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THIS LEASE AGREEMENT (this "LEASE") is entered into as of August __, 1999,
between W9/TIB REAL ESTATE LIMITED PARTNERSHIP, a Delaware limited partnership
("LANDLORD"), and SYCAMORE NETWORKS, INC., a Delaware corporation ("TENANT").
1. DEFINITIONS AND BASIC PROVISIONS. The definitions and basic
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provisions set forth in the Basic Lease Information (the "BASIC LEASE
INFORMATION") executed by Landlord and Tenant contemporaneously herewith are
incorporated herein by reference for all purposes. Additionally, the following
terms shall have the following meanings when used in this Lease: "LAWS" means
all federal, state, and local laws, rules and regulations, all court orders,
governmental directives, and governmental orders, and all restrictive covenants
affecting the Premises as of the date of this Lease, and "LAW" shall mean any of
the foregoing; "AFFILIATE" means any person or entity which, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with the party in question; "TENANT PARTY" means any of
the following persons: Tenant; any assignees claiming by, through, or under
Tenant; any subtenants claiming by, through, or under Tenant; and any of their
respective agents, contractors, employees, and invitees; and "INCLUDING" means
including, without limitation.
2. LEASE GRANT. Subject to the terms of this Lease, Landlord leases to
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Tenant, and Tenant leases from Landlord, the Premises for the Term.
3. TERM. Landlord shall deliver possession of the Premises to Tenant on
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or before August 24, 1999, and in broom-clean condition and free of all tenants
and occupants and their possessions (the "ESTIMATED DELIVERY DATE"). If the
Premises are not delivered to Tenant on the Estimated Delivery Date as
aforesaid, then (a) Landlord shall not be in default hereunder or be liable for
damages therefor, and (b) Tenant shall accept possession of the Premises when
Landlord tenders possession thereof to Tenant. Upon the Delivery Date, Tenant
shall be deemed to have accepted the Premises in the condition specified in
Section 1 of Exhibit D attached hereto, subject to Landlord's obligation to put
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all Building HVAC and mechanical systems serving the Premises in operable
condition on or before the Commencement Date, and in broom-clean condition.
Following the Commencement Date, Tenant and Landlord each shall execute and
deliver to the other, within ten days after receiving a written request
therefor, an amendment substantially in the form of Exhibit E hereto confirming
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the Commencement Date and the expiration date of the initial Term, that Tenant
has accepted the Premises except as otherwise specified in said amendment, and
that Landlord has performed all of its obligations with respect to the Premises
except as otherwise specified in said amendment. Subject to all of the
provisions of this Lease excepting only those requiring the payment of Basic
Rent, Additional Rent and Taxes, Tenant shall have the right to use and occupy
the Premises before the Commencement Date for the purpose of constructing the
Work and installing its trade fixtures, equipment and personal property.
Notwithstanding the foregoing, if the Premises have not been delivered to Tenant
in accordance with the terms and conditions of this Lease on or before September
16, 1999, then Tenant shall have the right to
1
terminate this Lease upon ten (10) days prior written notice to Landlord;
provided, however, if Landlord delivers possession of the Premises to Tenant in
the condition required under this Section 3 within said ten (10) day period,
then Tenant's termination notice shall be null and void and the provisions of
this Lease shall remain in full force and effect. If this Lease is terminated in
accordance with the provisions of the preceding sentence, Landlord shall
immediately return any deposits or other funds paid to Landlord by Tenant.
4. RENT.
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(a) PAYMENT. Commencing as of the Commencement Date, Tenant shall
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timely pay to Landlord Basic Rent and all additional sums to be paid by Tenant
to Landlord under this Lease, without notice, deduction or set off, except as
otherwise expressly provided herein, at Landlord's address provided for in this
Lease or as otherwise specified by Landlord in a written notice to Tenant, and
shall be accompanied by all applicable state and local sales or use taxes.
Basic Rent, adjusted as herein provided, shall be payable monthly in advance.
The first monthly installment of Basic Rent shall be payable contemporaneously
with the execution of this Lease; thereafter, Basic Rent shall be payable on the
first day of each month beginning on the first day of the second full calendar
month of the Term. The monthly Basic Rent for any partial month at the
beginning of the Term shall equal the product of 1/365 of the annual Basic Rent
in effect during the partial month and the number of days in the partial month
from and after the Commencement Date, and shall be due on the Commencement Date.
(b) OPERATING COSTS; TAXES
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(1) Tenant shall pay all of the Operating Costs (defined below)
("ADDITIONAL RENT") attributable to any period included in the Term according to
the terms of this Section 4.(b). Landlord may make a good faith estimate of the
Additional Rent to be due by Tenant for any calendar year or part thereof during
the Term, and Tenant shall pay to Landlord, on the Commencement Date and on the
first day of each calendar month thereafter, an amount equal to the estimated
Additional Rent for such calendar year or part thereof divided by the number of
months in such year or partial year. From time to time, Landlord may reasonably
estimate and re-estimate the Additional Rent to be due by Tenant and deliver a
copy of the estimate or re-estimate to Tenant; provided, however, the estimate
or the difference between the re-estimate and the prior estimate in the case of
a re-estimate, as applicable, attributable to the period covered by such
estimate or re-estimate before the date when Tenant receives such estimate or
re-estimate shall be payable within thirty (30) days after Landlord delivers the
estimate or re-estimate, as applicable. Thereafter, the monthly installments of
Additional Rent payable by Tenant shall be appropriately adjusted in accordance
with the estimations so that, by the end of the calendar year in question,
Tenant shall have paid all of the Additional Rent for each such calendar year as
reasonably estimated by Landlord. Any amounts paid based on such an estimate
shall be subject to adjustment as herein provided when actual Operating Costs
are available for each calendar year.
2
(2) The term "OPERATING COSTS" shall mean all expenses and
disbursements (subject to the limitations set forth below) that Landlord incurs
in connection with the ownership, operation, and maintenance of the Premises,
determined in accordance with generally accepted accounting principles
consistently applied, including, but not limited to, the following costs: (A)
wages and salaries (including management fees, which management fees shall not
exceed fair market management fees in comparable single tenanted buildings in
the Greater Boston area) of all employees at the level of building manager and
below engaged in the operation, maintenance, and security of the Premises,
including taxes, insurance and benefits relating thereto; (B) all supplies and
materials used in the operation, maintenance, repair, replacement, and security
of the Premises; (C) costs for improvements made to the Premises which, although
capital in nature, reduce the normal operating costs (including all utility
costs) of the Premises, as well as capital improvements made in order to comply
with any law hereafter promulgated by any governmental authority, as amortized
over the useful economic life of such improvements as determined by Landlord in
its reasonable discretion (with only the annual amortized portion of such costs
being included in Operating Costs in any calendar year); (D) cost of all
utilities, except the cost of utilities paid directly by Tenant or reimbursable
to Landlord by Tenant other than pursuant to a provision similar to this
provision; (E) insurance expenses; (F) repairs, replacements, and general
maintenance of the Premises; (G) service or maintenance contracts with
independent contractors for the operation, maintenance, repair, replacement, or
security of the Premises (including, without limitation, alarm service, window
cleaning, and elevator maintenance); and (H) Tenant's Common Property Percentage
of Common Property Expenses.
Notwithstanding any other provision of this Lease, Operating Costs
shall not include costs for (i) capital improvements made to the Premises, other
than capital improvements described in Section 4.(b)(2)(C) and except for items
which are generally considered maintenance and repair items, such as painting of
common areas, replacement of carpet in elevator lobbies, and the like; (ii)
repair, replacements and general maintenance and other expenses paid by proceeds
of insurance or by Tenant or other third parties; (iii) interest, amortization
of principal or other payments on loans to Landlord and rent and other sums due
under a ground lease or master lease relating to the Premises; (iv)
depreciation; (v) leasing commissions; (vi) legal expenses for services, other
than those that benefit Tenant (e.g., tax disputes); (vii) Taxes (defined
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below); (viii) federal income taxes imposed on or measured by the income of
Landlord from the operation of the Premises; (ix) the cost of repairs necessary
to cure any latent defect in the initial construction of the Building; (x)
Landlord's general overhead except as it relates specifically to the management
or operations of the Premises; (xi) any cost necessary to cure any violation of
any law, ordinance or regulation applicable to the Building existing as of the
date of this Lease or to investigate, test, contain and/or remediate the
presence of Hazardous Materials or other environmental conditions existing as of
the date of this Lease (in each case, to the extent not caused or exacerbated by
any Tenant Party); (xii) any cost or expense to the extent to which Landlord is
paid or reimbursed (other than as a payment for Operating Costs), including, but
not necessarily limited to, the cost of any item for which Landlord is paid or
reimbursed by insurance warranties, service contracts, condemnation proceeds or
otherwise; (xiii) costs of repairs and replacements arising out of a fire or
other casualty or an exercise of eminent domain affecting the
3
Building or the Land, except for the deductibles under policies of insurance
carried by Landlord; (xiv) compensation for executives or officers or other
employees of Landlord above the level of the building manager; (xv) expenses
arising from the gross negligence or willful misconduct of Landlord or its
agents, employees or contractors; (xvi) rent loss insurance; and (xvii) costs or
expenses of operating, administrating, cleaning, repairing, maintaining,
replacing, managing and lighting any land, buildings, facilities, structures and
improvements in the Office Park that do not serve the Premises exclusively or in
common with other lots and buildings in the Office Park.
(3) Tenant shall also pay all of the Taxes for each year and partial
year falling within the Term, in the same manner as provided in Sections
4.(b)(1) and 4.(b)(5) for Additional Rent with regard to Operating Costs.
"TAXES" shall mean taxes, assessments, and governmental charges whether federal,
state, county or municipal, and whether they be by taxing districts or
authorities presently taxing or by others, subsequently created or otherwise,
and any other taxes and assessments attributable to the Premises (or its
operation), excluding, however, penalties and interest thereon and federal and
state taxes on income (but if the present method of taxation changes so that in
lieu of the whole or any part of any Taxes, there is levied on Landlord a
capital tax directly on the rents received therefrom or a franchise tax,
assessment, or charge based, in whole or in part, upon such rents for the
Premises, then all such taxes, assessments, or charges, or the part thereof so
based, shall be deemed to be included within the term "TAXES" for purposes
hereof). Taxes shall include the costs of consultants retained in an effort to
lower taxes and all costs incurred in disputing any taxes or in seeking to lower
the tax valuation of the Premises. For property tax purposes, Tenant waives all
rights to protest or appeal the appraised value of the Premises, as well as the
Building, and all rights to receive notices of reappraisement. Landlord
represents to Tenant that the Premises comprise a tax parcel separately assessed
from other property of Landlord or any third party.
(4) INTENTIONALLY DELETED.
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(5) By April 1 of each calendar year, or as soon thereafter as
practicable, Landlord shall furnish to Tenant a statement of Operating Costs for
the previous year, and of the Taxes for the previous year (the "OPERATING COSTS
AND TAX STATEMENT"). If the Operating Costs and Tax Statement reveals that
Tenant paid more for Operating Costs than the actual amount for the year for
which such statement was prepared, or more than its actual share of Taxes for
such year, then Landlord shall promptly credit or reimburse Tenant for such
excess; likewise, if Tenant paid less than Tenant's actual Additional Rent or
Taxes due, then Tenant shall promptly pay Landlord such deficiency. If Tenant
is not in monetary default of its obligations under this Lease, within a period
of sixty (60) days following receipt of the Operating Costs and Tax Statement,
Tenant or its representatives (which representatives shall exclude anyone hired
on a contingent fee basis) shall have the right, upon reasonable prior notice
and at mutually convenient times, to examine Landlord's books and records with
respect to the items in such Statement during normal business hours at
Landlord's offices where such books and records are maintained (which books and
records shall be maintained in accordance with GAAP). Tenant may give Landlord
notice of any written objection to any items of expense. If it shall be
determined
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by Landlord and Tenant that (i) Landlord overcharged Tenant, Landlord shall
promptly refund (but no later than thirty (30) days after such determination is
made) to Tenant the amount of any such overcharge, or (ii) Landlord undercharged
Tenant, then Tenant shall promptly pay (but no later than thirty (30) days after
such determination is made) the amount of any such undercharge to Landlord. Any
information obtained by Tenant pursuant to the provisions of this Section
4.(b)(5) shall be treated as confidential under the conditions set forth in
Section 25.(s) of this Lease.
(c) BILLING FOR ELECTRICITY. Tenant shall pay (as hereinafter
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described) for the use of all electrical service to the Premises. Tenant shall
be billed directly by such utility company and Tenant agrees to pay each ▇▇▇▇
promptly in accordance with its terms, and upon default in making any such
payment which continues for more than ten (10) days after written notice to
Tenant, Landlord may pay such charges and collect the same from Tenant. In the
event for any reason Tenant cannot be billed directly, Landlord shall forward
each ▇▇▇▇ received with respect to the Building to Tenant, which Tenant shall
pay within thirty (30) days of receiving each such ▇▇▇▇ unless the terms of the
each such ▇▇▇▇ specify otherwise.
(d) COMMON PROPERTY EXPENSES.
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(1) Definitions. For the purposes of this Section 4.(d), the
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following terms shall have the following respective meanings:
(A) The term "COMMON PROPERTY" shall mean the retention ponds,
drainage facilities, electric substations, utility lines, pumping
stations and other facilities and structures which serve the
Premises in common with other lots and buildings in the Office
Park (as hereinafter defined), excluding any such facilities and
structures that serve or benefit any lot or building in the
Office Park exclusively, together with "Omni Way" (as said term
is hereinafter defined) and all curbing, gutters, paving and
sidewalks located within the right of way of Omni Way, as well as
the parcel of land together with the gazebo and all other
improvements now or hereafter located thereon (said land, gazebo
and improvements, as the same may be altered from time to time,
are hereinafter collectively referred to as the "COMMON PROPERTY
LOT") shown as Lot 3 on a plan (the "COMMON PROPERTY PLAN")
entitled "Plan of Land of Billerica Road Site, Chelmsford, MA",
recorded in the Middlesex North District Registry of Deeds in
Plan Book 143, as Plan 143, all as located in or about or
adjacent to Omni Way. As used herein, the term "OMNI WAY" shall
mean the road shown on the Common Property Plan as ▇▇▇▇▇▇▇▇ Drive
and now being known as Omni Way, as said Omni Way may be altered
or changed from time to time.
(B) The term "COMMON PROPERTY EXPENSES" shall mean the aggregate
costs or expenses reasonably incurred by Landlord with respect to
the operation,
5
administration, cleaning, repair, maintenance, replacement,
management and lighting of the Common Property, together with all
costs of any insurance carried by Landlord with respect to the
Common Property and together with all Taxes on, or related to, or
which may become a lien on, any Common Property.
(C) The term "OFFICE PARK" shall mean the land and buildings known
and numbered as ▇ ▇▇▇▇ ▇▇▇, ▇ ▇▇▇▇ ▇▇▇, ▇ ▇▇▇▇ ▇▇▇ and 6 Omni Way
in Chelmsford, Massachusetts, shown as Lots 2A, 2B, 2E and 2D on
the Common Property Plan.
(D) The term "OPERATING YEAR" shall mean each calendar year in which
--------------
any part of the Term of this Lease shall fall.
(E) The term "TENANT'S COMMON PROPERTY PERCENTAGE" shall mean 23.81%.
-----------------------------------
(2) Tenant's Payments.
------------------
Operating Costs shall include an amount equal to (i) Common Property
Expenses for each Operating Year multiplied by (ii) the Tenant's Common Property
Percentage, such amount to be apportioned for any partial Operating Year in
which the Commencement Date falls or the Term of this Lease ends.
5. DELINQUENT PAYMENT; HANDLING CHARGES. All past due payments required
------------------------------------
of Tenant hereunder shall bear interest from the date due until paid at the
lesser of twelve percent per annum or the maximum lawful rate of interest;
additionally, Landlord may charge Tenant a fee equal to 5% of the delinquent
payment to reimburse Landlord for its cost and inconvenience incurred as a
consequence of Tenant's delinquency. In no event, however, shall the charges
permitted under this Section 5 or elsewhere in this Lease, to the extent they
are considered to be interest under applicable Law, exceed the maximum lawful
rate of interest.
6. SECURITY DEPOSIT. Contemporaneously with the execution of this
----------------
Lease, Tenant shall pay to Landlord the Security Deposit, which shall be held by
Landlord to secure Tenant's performance of its obligations under this Lease.
The Security Deposit is not an advance payment of Rent or a measure or limit of
Landlord's damages upon an Event of Default (defined in Section 17). Landlord
may, from time to time following an Event of Default and without prejudice to
any other remedy, use all or a part of the Security Deposit to perform any
obligation Tenant fails to perform hereunder with respect to such Event of
Default. Following any such application of the Security Deposit, Tenant shall
pay to Landlord on demand the amount so applied in order to restore the Security
Deposit to its original amount. After applying all sums necessary to cure any
Event of Default, Landlord shall, within 30 days after the Term ends, return to
Tenant the portion of the Security Deposit which was not properly applied to
satisfy Tenant's obligations. The Security Deposit may be commingled with other
funds, and no interest shall be paid thereon. If
6
Landlord transfers its interest in the Premises and the transferee assumes
Landlord's obligations under this Lease, then Landlord shall assign the Security
Deposit to the transferee and the transferor Landlord thereafter shall have no
further liability for the return of the Security Deposit, but the transferee
Landlord, by accepting any such transfer, shall be deemed to have assumed all
obligations of Landlord with respect to the Security Deposit.
In lieu of a cash Security Deposit, simultaneously with the execution and
delivery of this Lease, or from time to time during the Term, Tenant may deliver
to Landlord an irrevocable and unconditional standby letter of credit made
payable to Landlord, its successors and assigns, in the sum of $500,000.00 (the
"LETTER OF CREDIT"), in the form of the sample letter of credit attached hereto
as Exhibit I or in such other form as is reasonably acceptable to Landlord,
---------
which shall secure the performance by Tenant of all obligations on the part of
Tenant hereunder. The issuer of the Letter of Credit shall be a banking
institution with at least a rating of A and otherwise reasonably acceptable to
Landlord. Although Landlord shall only have the right to draw under the Letter
of Credit as set forth herein, under the terms of the Letter of Credit, the sole
condition to Landlord's draw upon the Letter of Credit shall be presentment to
the issuer thereof, prior to or on the expiration date, of a demand for payment,
together with a statement or certification that an Event of Default has occurred
under this Lease or that Landlord has received a notice of the failure to extend
or renew the Letter of Credit. The Letter of Credit shall be self-renewing from
year to year during the Term of this Lease so as to expire no earlier than
thirty (30) days following the Lease expiration date and shall contain such
other customary terms as Landlord requires in its reasonable discretion. It is
agreed: (i) that the Letter of Credit may be drawn upon to cure any Event of
Default that may exist, without prejudice to any other remedy or remedies which
Landlord may have on account thereof, and upon Landlord's demand, Tenant shall
reimburse the issuer for the amount so drawn so that the Letter of Credit will
be restored to its original amount; (ii) subject to the provisions of clause
(iv) below, that the Letter of Credit may be drawn upon if the Letter of Credit
has not been extended or renewed without amendment at least forty-five (45) days
prior to any then-current expiration date thereof; (iii) that if the rating of
the issuer of the Letter of Credit at any time drops below A, then, within sixty
(60) days of Landlord's written demand, Tenant shall replace the Letter of
Credit with another Letter of Credit in a form reasonably acceptable to Landlord
and with an issuer with a rating of at least an A and otherwise reasonably
acceptable to Landlord; upon receipt of such substitute Letter of Credit,
Landlord shall promptly return the previous Letter of Credit to Tenant; and
Landlord may draw on the existing Letter of Credit if, after Landlord requests
that Tenant replace the Letter of Credit as aforesaid, Landlord is not provided
with a substitute Letter of Credit in a form, and from an issuer, satisfactory
to Landlord as provided above at least fifteen (15) days prior to the then-
current expiration date of the Letter of Credit; (iv) if at any time, but in any
event, at least sixty (60) days prior to the expiration of the Letter of Credit,
Tenant may seek Landlord's consent to switch issuers of the Letter of Credit
provided the prospective issuer has a rating of at least an A and is otherwise
reasonably acceptable to Landlord and the new form of Letter of Credit satisfies
the requirements of Landlord hereunder and is otherwise reasonably acceptable to
Landlord; upon receipt of such substitute Letter of Credit, Landlord shall
promptly return the previous Letter of Credit to Tenant; and Landlord may draw
on the existing Letter of Credit if, after Tenant requests
7
Landlord's consent to switch issuers as aforesaid, Landlord is not provided with
a substitute Letter of Credit in a form, and from an issuer, satisfactory to
Landlord in its sole and absolute discretion at least forty-five (45) days prior
to the then-current expiration date of the Letter of Credit; (v) that should the
Premises be conveyed by Landlord, the Letter of Credit or any portion thereof
shall be assigned to Landlord's grantee, and if the same be assigned as
aforesaid, Tenant hereby releases Landlord from any and all liability with
respect to the Letter of Credit and its application or return, and Tenant agrees
to look to such grantee for such application or return; provided, however, that,
by accepting any such conveyance, such grantee shall be deemed to have assumed
Landlord's obligations under this Lease (including this Section 6); and (vi)
that the Letter of Credit shall be returned to Tenant upon the later of (a)
thirty (30) days after the expiration of the Term or any renewal or extension
thereof, or (b) the date Tenant has vacated the Premises and surrendered
possession thereof to Landlord at the expiration of the Term or any extension
thereof as provided herein and has paid Landlord all sums due and owing under
this Lease.
If Tenant initially provides Landlord with a cash Security Deposit, Tenant
may replace such cash Security Deposit with a Letter of Credit in accordance
with the provisions of the preceding paragraph. Upon Landlord's receipt of a
Letter of Credit satisfying the terms and conditions of the preceding paragraph,
Landlord shall promptly return the cash Security Deposit to Tenant.
For the purposes of this Section 6, a rating of at least A (or its
equivalent) shall mean that such issuer has a rating of at least A (or its
equivalent) from two (2) of the following four (4) rating agencies: Fitch
Investors Service, ▇▇▇▇▇'▇ Investor Service, Standard & Poor's Corporation and
Duff & ▇▇▇▇▇▇.
Notwithstanding any of the foregoing provisions of this Section 6 to the
contrary, on the date that is thirty-six (36) months after the Commencement Date
and on the date that is forty-eight (48) months after the Commencement Date
during the initial Term only (individually, a "REDUCTION DATE" and collectively
the "REDUCTION DATES"), the Security Deposit (or the applicable Letter or
Credit) shall be reduced by $100,000.00, provided that on the applicable
Reduction Date (i) the Lease is in full force and effect, (ii) no Event of
Default exists, (iii) no Event of Default has occurred more than twice during
the Term, and (iv) Tenant has not assigned this Lease to anyone other than an
Affiliate of Tenant. If on any of the Reduction Dates the Security Deposit (or
the applicable Letter of Credit) shall not be reduced because one or more of the
conditions set forth in clauses (i), (ii) or (iii) above cease to exist on the
applicable Reduction Date, the Security Deposit (or applicable Letter of Credit)
shall not be reduced during any succeeding calendar year. If on any of the
Reduction Dates the Security Deposit (or applicable Letter of Credit) shall not
be reduced because only the condition set forth in clause (iv) above (as opposed
to the conditions set forth in any of clauses (i), (ii) or (iii) above) ceases
to exist on the applicable Reduction Date, the Security Deposit (or applicable
Letter of Credit) shall be so reduced on the next Reduction Date, provided the
conditions set forth in clauses (i), (ii), (iii) and (iv) above exist on that
Reduction Date, and provided further that the Security Deposit (or applicable
Letter of Credit) shall be reduced only by the amount which the Security Deposit
(or applicable Letter of Credit) would have been reduced in the preceding
Reduction Date year if all
8
of the conditions set forth in clauses (i), (ii), (iii) and (iv) above existed.
Notwithstanding any other provisions of this Section 6, the Security Deposit (or
the applicable Letter of Credit) shall be reduced by $100,000.00 on each
anniversary of the Commencement Date, provided that the conditions set forth in
clauses (i), (ii), (iii) and (iv) above are satisfied and Tenant or a Permitted
Transferee has a Tangible Net Worth of at least $36,000,000.00. If the Security
Deposit (or applicable Letter of Credit) is reduced pursuant to the foregoing
provisions, Landlord shall return the amount of each such applicable reduction
if Tenant paid the Security Deposit in cash or Tenant may replace and/or amend
the Letter of Credit accordingly.
7. LANDLORD'S OBLIGATIONS
----------------------
(a) SERVICES. Landlord shall furnish to Tenant the following
services (the cost of which services shall be considered Operating Costs to the
extent provided under Section 4 of this Lease): (1) water at those points of
supply to the Building as currently; (2) HVAC having a total capacity of at
least 245 tons; (3) electricity from a 3000-amp main having a capacity of
480/277 volts, three phase; and (4) removal of snow and ice from exterior
walkways, driveways and parking and loading areas of the Premises.
(b) LANDLORD'S MAINTENANCE OBLIGATIONS. Landlord shall perform
all repairs, maintenance and replacements necessary to keep in good condition
and working order and in compliance with all applicable laws (i) the Building's
roof, foundation, slabs, columns and exterior walls of the Building (the
"BUILDING'S STRUCTURE"), (ii) the Building's HVAC and mechanical systems, that
portion of the plumbing system located on the exterior of the Building, and that
portion of the electrical system located on the exterior of the Building up to
and including the main electrical panel for the Building (including all wires,
cables, pipes, main conduits, trenches and other fixtures, facilities and
equipment on the Land outside the Building), and, in each case, only if Tenant
has not performed any repairs, maintenance, alterations and/or improvements to
any such systems, (iii) the parking and loading areas, driveways, walkways,
drainage, landscaping and other exterior areas of the Premises (collectively,
the "EXTERIOR AREAS"), and (iv) the Common Property. Landlord shall not be
responsible for (1) alterations to the Building's Structure or any other portion
of the Premises required by applicable Law because of Tenant's use of the
Premises (which alterations shall be Tenant's responsibility), or (2) any such
maintenance obligations caused by Tenant's negligence or its failure to comply
with the provisions of this Lease. Any costs incurred by Landlord in connection
with the repair and maintenance of the roof, any Building systems, Exterior Area
and/or the Common Property shall be considered an Operating Cost to the extent
set forth in, and paid by Tenant in accordance with, Section 4 above. The
Building's Structure does not include skylights, windows, glass or plate glass,
doors, special fronts, or office entries, all which shall be maintained by
Tenant.
(c) EXCESS UTILITY USE. Landlord shall not be required to furnish
electrical current for equipment that requires more than the electrical capacity
currently provided in the Building (the "BASE BUILDING ELECTRICAL CAPACITY").
If Tenant's requirements for or consumption of electricity exceed the Base
Building Electrical Capacity, Landlord shall, at Tenant's expense,
9
make reasonable efforts to supply such service through the then-existing feeders
and risers serving the Building, and Tenant shall pay to Landlord the cost of
such service within ten (10) days after Landlord has delivered to Tenant an
invoice therefor. Landlord may determine the amount of such additional
consumption and potential consumption by any verifiable method, including
installation of a separate meter in the Premises installed, maintained, and read
by Landlord, at Tenant's expense. Tenant shall not install any electrical
equipment requiring special wiring or requiring voltage in excess of the Base
Building Electrical Capacity unless approved in advance by Landlord. The use of
electricity in the Premises shall not exceed the capacity of existing feeders
and risers to or wiring in the Building. Any risers or wiring required to meet
Tenant's excess electrical requirements shall, upon Tenant's written request, be
installed by Landlord, at Tenant's cost, if, in Landlord's judgment, the same
are necessary and shall not cause permanent damage to the Building or the
Premises, cause or create a dangerous or hazardous condition, or entail
excessive or unreasonable alterations, repairs, or expenses. If Tenant uses
machines or equipment in the Building which affect the temperature otherwise
maintained by the air conditioning system or otherwise overload any utility,
Landlord may install supplemental air conditioning units or other supplemental
equipment in the Building, and the cost thereof, including the cost of
installation, operation, use, and maintenance, shall be paid by Tenant to
Landlord within ten (10) days after Landlord has delivered to Tenant an invoice
therefor.
(d) RESTORATION OF SERVICES; ABATEMENT. Landlord shall use
reasonable efforts to restore any service required of it that becomes
unavailable; however, such unavailability shall not render Landlord liable for
any damages caused thereby, be a constructive eviction of Tenant, constitute a
breach of any implied warranty, or, except as provided in the next sentence,
entitle Tenant to any abatement of Tenant's obligations hereunder. If, however,
Tenant is prevented from using the Premises for more than 25 consecutive
business days because of the unavailability of any such service and such
unavailability was not caused by a Tenant Party, then Tenant shall, as its
exclusive remedy be entitled to a reasonable abatement of Rent for each
consecutive day (after such 25-day period) that Tenant is so prevented from
using the Premises.
8. IMPROVEMENTS; ALTERATIONS; REPAIRS; MAINTENANCE.
------------------------------------------------
(a) IMPROVEMENTS; ALTERATIONS. Improvements to the Premises shall
be installed at Tenant's expense only in accordance with plans and
specifications which have been previously submitted to and approved in writing
by Landlord, and no alterations or physical additions in or to the Premises may
be made without Landlord's prior written consent. Landlord's approval of any
such plans and specifications and consent of any such alterations and/or
additions shall not be unreasonably withheld, delayed or conditioned; however,
Landlord may withhold its consent to any plans and specifications and/or any
alteration or addition that would affect the Building's Structure or would have
an adverse effect on the Building's heated and refrigerated air conditioning
("HVAC"), plumbing, electrical, or mechanical systems. Notwithstanding the
foregoing, Tenant may from time to time make alterations, additions or
improvements to the Premises, without the consent of Landlord and without
Landlord's approval of plans, provided: (i) the cost thereof shall not exceed
Twenty-Five Thousand Dollars ($25,000.00) (which Twenty-
10
Five Thousand Dollars ($25,000.00) shall be exclusive of the cost of any
decorative improvements (i.e., painting and carpeting) and any minor electrical
---
alterations not affecting the base building electrical system) in the aggregate
in any consecutive twelve-month period; (ii) except for such decorative
improvements and minor electrical alterations, Tenant shall, prior to commencing
any such alterations, additions and/or improvements in the Premises in
connection therewith, furnish Landlord with a complete set of plans and
specifications for any such alterations, additions and/or improvements; (iii)
such alterations, additions and/or improvements shall not affect the exterior or
the structure of the Building or have any adverse effect on any of the
mechanical, electrical or plumbing systems of the Building; and (iv) Tenant
shall comply with all requirements of this Lease with respect to such
alterations, additions and/or improvements other than obtaining the prior
approval of Landlord. Tenant shall not paint or install lighting or decorations,
signs, window or door lettering, or advertising media of any type on or about
the Premises which might affect the appearance of the exterior of the Building
or any other portion of the Premises other than the interior of the Building
without the prior written consent of Landlord, which shall not be unreasonably
withheld, delayed or conditioned; however, Landlord may withhold its consent to
any such painting or installation which would affect the appearance of the
exterior of the Building. All alterations, additions, or improvements made in or
upon the Premises shall be removed by Tenant prior to the end of the Term (and
Tenant shall repair all damage caused thereby) if Landlord conditioned its
consent to the initial installation of any such alterations, additions or
improvements upon such removal; otherwise, in the absence of such a removal
condition with respect to each and every alteration, addition or improvement,
all such alterations, additions or improvements (excluding moveable partitions
and Tenant's trade fixtures and personal property) shall remain on the Premises
at the end of the Term without compensation to Tenant. All alterations,
additions, and improvements shall be constructed, maintained, and used by
Tenant, at its risk and expense, in accordance with all Laws; Landlord's
approval of the plans and specifications therefor shall not be a representation
by Landlord that such alterations, additions, or improvements comply with any
Law.
(b) REPAIRS; MAINTENANCE. Subject to Landlord's obligations set
forth in Section 7.(b) above, Tenant shall maintain the interior of the Building
in a clean and safe condition and in as good and operable condition as exists
after the construction of the Work (as hereinafter defined) and any other
alterations, additions or improvements performed by Tenant, reasonable wear and
tear and damage by fire, other casualty and eminent domain excepted, and shall
not permit or allow to remain any waste or damage to any portion of the
Premises. Tenant shall repair or replace, subject to Landlord's direction and
supervision, any improvement or system installed by a Tenant Party within the
Premises and any damage to the Building caused by a Tenant Party. If Tenant
fails to make such repairs or replacements within thirty (30) days (or such
shorter period of time required to prevent any damage from occurring to the
Premises) after the occurrence of such damage, then Landlord may make the same
at Tenant's cost.
(c) PERFORMANCE OF WORK. All work described in this Section 8
shall be performed only by Landlord or by contractors and subcontractors
approved in writing by Landlord, which approval shall not be unreasonably
withheld, delayed or conditioned. Tenant
11
shall cause all contractors and subcontractors to procure and maintain insurance
coverage naming Landlord as an additional insured against such risks, in such
amounts, and with such companies as Landlord may reasonably require. All such
work shall be performed in accordance with all Laws and in a good and
workmanlike manner so as not to damage the Building (including the Premises, the
structural elements, and the plumbing, electrical lines, or other utility
transmission facility). All such work which may affect the Building's HVAC,
electrical, plumbing, other mechanical systems, or structural elements must be
approved by the Building's engineer of record (which approval shall not be
unreasonably withheld, delayed or conditioned), at Tenant's expense and, with
respect to structural elements, at Landlord's election, must be performed by
Landlord's usual contractors for such work.
Tenant shall provide to Landlord the names, addresses and copies of
contracts for all contractors, and upon completion of any work shall promptly
furnish Landlord with full and final waivers of lien covering all labors and
materials included in the work in question.
(d) MECHANIC'S LIENS. Tenant shall not permit any mechanic's
liens to be filed against the Premises or the Building for any work performed,
materials furnished, or obligation incurred by or at the request of Tenant. If
such a lien is filed, then Tenant shall, within ten days after Landlord has
delivered notice of the filing thereof to Tenant, either pay the amount of the
lien or diligently contest such lien and deliver to Landlord a bond or other
security reasonably satisfactory to Landlord. If Tenant fails to timely take
either such action, then Landlord may pay the lien claim, and any amounts so
paid, including expenses and interest, shall be paid by Tenant to Landlord
within ten days after Landlord has invoiced Tenant therefor.
(e) UTILITIES. Tenant shall obtain and pay for all water, gas,
electricity, heat, telephone, sewer, sprinkler charges and other utilities and
services used at the Premises, together with all taxes, penalties, surcharges,
and maintenance charges pertaining thereto. To the extent Tenant is not billed
directly for any such utilities, any amounts payable by Tenant under this
Section shall be due within ten (10) days after Landlord has invoiced Tenant
therefor.
(f) FLOOR LOAD; HEAVY MACHINERY. (i) Tenant shall not place a load
upon any floor in the Building exceeding the floor load per square foot of area
which such floor was designed to carry or which is allowed by law. Landlord
reserves the right to prescribe the weight and position of all business machines
and mechanical equipment, including safes, which shall be placed so as to
distribute the weight. Business machines and mechanical equipment shall be
placed and maintained by Tenant at Tenant's expense in settings sufficient, in
Landlord's judgment, to absorb and prevent vibration, noise and annoyance.
Tenant shall not move any safe, heavy machinery and/or heavy equipment into or
out of the Building without Landlord's prior consent, which consent may include
a requirement to provide insurance, naming Landlord as an insured, in such
amounts as Landlord may deem reasonable.
(ii) If such safe, machinery, equipment, freight, bulky matter or
fixtures requires special handling, Tenant agrees that all work in connection
therewith shall comply with
12
applicable laws and regulations. Any such moving shall be at the sole risk and
hazard of Tenant, and Tenant will exonerate, indemnify and save Landlord
harmless against and from any liability, loss, injury, claim or suit resulting
directly or indirectly from such moving.
9. USE. Tenant shall continuously occupy and use the Premises only for
the Permitted Use, and for no other purposes, and shall comply with all Laws
relating to the use, condition, access to, and occupancy of the Premises. The
population density within the Premises as a whole shall at no time exceed one
person for each 250 rentable square feet in the Premises. The Premises shall
not be used for any use which creates extraordinary fire hazards, or for the
storage of any Hazardous Materials. If, because of any Tenant Party's acts, the
rate of insurance on the Building or its contents increases, then Tenant shall
pay to Landlord the amount of such increase within thirty (30) days of
Landlord's written notice therefor, and acceptance of such payment shall not
waive any of Landlord's other rights. If Tenant fails to cease or remediate
such acts within five (5) days after Landlord's request that Tenant do so, then
such acts shall be an Event of Default. Tenant shall conduct its business and
control each other Tenant Party so as not to create any nuisance or unreasonably
interfere with Landlord in its management of the Building.
10. ASSIGNMENT AND SUBLETTING
-------------------------
(a) TRANSFERS. Except as provided in Section 10.(g), Tenant shall
not, without the prior written consent of Landlord, (1) assign, transfer, or
encumber this Lease or any estate or interest herein, whether directly or by
operation of law, (2) permit any other entity to become Tenant hereunder by
merger, consolidation, or other reorganization, (3) if Tenant is an entity other
than a corporation whose stock is publicly traded (or which will be publicly
traded upon the consummation of the transfer at issue), permit the transfer of
an interest in Tenant's capital stock so as to result in a change in the current
control of Tenant, (4) sublet any portion of the Premises, (5) grant any
license, concession, or other right of occupancy of any portion of the Premises,
or (6) permit the use of the Premises by any parties other than Tenant (any of
the events listed in Section 10.(a)(1) through 10.(a)(6) being a "TRANSFER").
(b) CONSENT STANDARDS. Landlord shall not unreasonably withhold its
consent to any assignment or subletting of the Premises, provided that the
proposed transferee (A) is creditworthy, (B) has a good reputation in the
business community, (C) will use the Premises for the Permitted Use (thus,
excluding, without limitation, uses for credit processing and telemarketing),
and (D) is not a governmental entity, or subdivision or agency thereof. If the
proposed transferee does not meet the criteria set forth in clauses (A) through
(D) above, Landlord may withhold its consent in its sole discretion.
(c) REQUEST FOR CONSENT. If Tenant requests Landlord's consent to
a Transfer, then Tenant shall provide Landlord with a written description of all
terms and conditions of the proposed Transfer, copies of the proposed
documentation, and the following information about the proposed transferee: name
and address; reasonably satisfactory information about its business and business
history; its proposed use of the Premises; reasonable banking, financial, and
other
13
credit information; and general references sufficient to enable Landlord
reasonably to determine the proposed transferee's creditworthiness and
character. Concurrently with Tenant's notice of any request for consent to a
Transfer, Tenant shall pay to Landlord a fee of $750.00 to defray Landlord's
expenses in reviewing such request, and Tenant shall also reimburse Landlord,
within thirty (30) days of receiving a written invoice, for its reasonable
attorneys' fees incurred in connection with considering any request for consent
to a Transfer (which attorneys' fees shall not exceed $2,500.00 unless otherwise
agreed to by Tenant).
(d) CONDITIONS TO CONSENT. If Landlord consents to a proposed
Transfer, then the proposed transferee shall deliver to Landlord a written
agreement whereby it expressly assumes Tenant's obligations hereunder; however,
any transferee of less than all of the space in the Premises shall be liable
only for obligations under this Lease that are properly allocable to the space
subject to the Transfer for the period of the Transfer. No Transfer shall
release Tenant from its obligations under this Lease, but rather Tenant and its
transferee shall be jointly and severally liable therefor. Landlord's consent
to any Transfer shall not waive Landlord's rights as to any subsequent
Transfers. If an Event of Default occurs while the Premises or any part thereof
are subject to a Transfer, then Landlord, in addition to its other remedies, may
collect directly from such transferee all rents becoming due to Tenant and apply
such rents against Rent. Tenant authorizes its transferees to make payments of
rent directly to Landlord upon receipt of notice from Landlord claiming the
existence of an Event of Default. Tenant shall pay for the cost of any demising
walls or other improvements necessitated by a proposed subletting or assignment.
(e) CANCELLATION. Landlord may, within fifteen (15) business days
after submission of Tenant's written request for Landlord's consent to an
assignment or a sublease of the entire Premises for the then balance of the
Term, cancel this Lease as of the date the proposed Transfer is to be effective.
If Landlord cancels this Lease, Tenant shall pay to Landlord all Rent accrued
through the cancellation date. Thereafter, Landlord may lease the Premises to
the prospective transferee (or to any other person) without liability to Tenant.
(f) ADDITIONAL COMPENSATION. Tenant shall pay to Landlord,
immediately upon receipt thereof, fifty percent (50%) of the excess of (1) all
compensation received by Tenant and attributable to Tenant's interest under this
Lease or in the Premises which is the subject of such Transfer less the costs
reasonably incurred by Tenant with unaffiliated third parties in connection with
such Transfer (i.e., brokerage commissions, tenant finish work, and the like)
----
over (2) the Rent allocable to the portion of the Premises which is the subject
of such Transfer. While any Event of Default exists, Tenant shall pay to
Landlord, immediately upon receipt thereof, one hundred percent (100%) of the
excess of (i) all compensation received by Tenant for a Transfer over (ii) the
Rent applicable to the portion of the Premises covered thereby.
(g) PERMITTED TRANSFERS. Notwithstanding Section 10.(a), Tenant
may effect a Transfer of all or part of its interest in this Lease or all or
part of the Premises (a "PERMITTED TRANSFER") to the following types of entities
(a "PERMITTED TRANSFEREE") without the written consent of Landlord:
14
(1) an Affiliate of Tenant;
(2) any corporation, limited partnership, limited liability
partnership, limited liability company or other business entity in which or
with which Tenant, or its corporate successors or assigns, is merged or
consolidated, in accordance with applicable statutory provisions governing
merger and consolidation of business entities, so long as (A) Tenant's
obligations hereunder are assumed by the entity surviving such merger or
created by such consolidation; and (B) the Tangible Net Worth of the
surviving or created entity is not less than the greater of (i) the
Tangible Net Worth of Tenant as of the date hereof, or (ii) the Tangible
Net Worth of Tenant at the time of any such Permitted Transfer; or
(3) any corporation, limited partnership, limited liability
partnership, limited liability company or other business entity acquiring
all or substantially all of Tenant's assets if such entity's Tangible Net
Worth after such acquisition is not less than the greater of (i) the
Tangible Net Worth of Tenant as of the date hereof, or (ii) the Tangible
Net Worth of Tenant at the time of any such Permitted Transfer.
Tenant shall promptly notify Landlord of any such Permitted Transfer.
Tenant shall remain liable for the performance of all of the obligations of
Tenant hereunder, or if Tenant no longer exists because of a merger,
consolidation, or acquisition, the surviving or acquiring entity shall expressly
assume in writing the obligations of Tenant hereunder. Additionally, the
Permitted Transferee shall comply with all of the terms and conditions of this
Lease, including the Permitted Use. At least 30 days after the effective date
of any Permitted Transfer, Tenant agrees to furnish Landlord with copies of the
instrument effecting any of the foregoing Transfers and documentation
establishing Tenant's satisfaction of the requirements set forth above
applicable to any such Transfer. The occurrence of a Permitted Transfer shall
not waive Landlord's rights as to any subsequent Transfers. "TANGIBLE NET WORTH"
means the excess of total assets over total liabilities, in each case as
determined in accordance with generally accepted accounting principles
consistently applied ("GAAP"), excluding, however, from the determination of
total assets all assets which would be classified as intangible assets under
GAAP including, without limitation, goodwill, licenses, patents, trademarks,
trade names, copyrights, and franchises. Any subsequent Transfer by a Permitted
Transferee shall be subject to the provisions of this Section 10.
11. INSURANCE; WAIVERS; SUBROGATION; INDEMNITY
------------------------------------------
(a) TENANT'S INSURANCE. Tenant shall maintain throughout the Term
the following insurance policies: (1) commercial general liability insurance in
amounts of $3,000,000.00 per occurrence or such other amounts as Landlord may
from time to time reasonably require, insuring Tenant and, naming as additional
insureds, Landlord and, if specified by written notice to Tenant, Landlord's
agents and their respective Affiliates, against all liability for injury to or
death of a person or persons or damage to property arising from the use and
occupancy of the Premises, (2) insurance covering the full value of Tenant's
fixtures (including
15
trade fixtures), personal property and the trade fixtures and personal property
of others in the Premises, (3) contractual liability insurance sufficient to
cover Tenant's indemnity obligations for Losses (as hereinafter defined) assumed
under this Lease (but only if such contractual liability insurance is not
already included in Tenant's commercial general liability insurance policy), (4)
worker's compensation insurance, containing a waiver of subrogation endorsement
acceptable to Landlord, and (5) business interruption insurance. Tenant's
insurance shall provide primary coverage to Landlord when any policy issued to
Landlord provides duplicate or similar coverage, and in such circumstance
Landlord's policy will be excess over Tenant's policy. Tenant shall furnish to
Landlord certificates of such insurance and such other evidence reasonably
satisfactory to Landlord of the maintenance of all insurance coverages required
hereunder, and Tenant shall obtain a written obligation on the part of each
insurance company to notify Landlord at least 30 days before cancellation or a
material change of any such insurance policies. All such insurance policies
shall be in form, and issued by companies, reasonably satisfactory to Landlord.
(b) LANDLORD'S INSURANCE. Throughout the Term of this Lease,
Landlord shall maintain, as a minimum, the following insurance policies: (1)
fire and extended risk insurance covering the Building's replacement value and
(2) commercial general liability insurance in an amount not less than
$3,000,000.00. The cost of such insurance carried by Landlord with respect to
the Premises shall be included in Operating Costs.
(c) WAIVER OF NEGLIGENCE; NO SUBROGATION. Landlord and Tenant each
waives any claim it might have against the other for any injury to or death of
any person or persons or damage to or theft, destruction, loss, or loss of use
of any property (a "LOSS"), to the extent the same is insured against under any
insurance policy that covers the Building, the Premises, Landlord's or Tenant's
fixtures, personal property, leasehold improvements, or business, or is required
to be insured against under the terms hereof, REGARDLESS OF WHETHER THE
NEGLIGENCE OF THE OTHER PARTY CAUSED SUCH LOSS; however, Landlord's waiver shall
not include any deductible amounts on insurance policies carried by Landlord.
Each party shall cause its insurance carrier to endorse all applicable policies
waiving the carrier's rights of recovery under subrogation or otherwise against
the other party.
(d) TENANT'S INDEMNITY. Subject to Section 11.(c), Tenant shall
defend, indemnify, and hold harmless Landlord and its representatives and agents
from and against all claims, demands, liabilities, causes of action, suits,
judgments, damages, and expenses (including reasonable attorneys' fees) arising
from (1) any Loss arising from any occurrence on the Premises (other than any
Loss arising out of a breach of Tenant's obligations under Section 25.(t), which
shall be subject to the indemnity in such section) or (2) Tenant's failure to
perform its obligations under this Lease, except to the extent caused by the
negligence or fault of Landlord or its agents, employees or contractors. This
indemnity provision shall survive termination or expiration of this Lease. If
any proceeding is filed for which indemnity is required hereunder, Tenant
agrees, upon request therefor, to defend the indemnified party in such
proceeding at its sole cost utilizing counsel reasonably satisfactory to the
indemnified party.
16
(e) LANDLORD'S INDEMNITY. Subject to Section 11.(c), Landlord shall
defend, indemnify, and hold harmless Tenant and its agents and employees from
and against all claims, demands, liabilities, causes of action, suits, judgments
and expenses (including attorneys' fees) for any Loss arising from any
occurrence at the Premises caused or materially contributed to by Landlord's
gross negligence or willful misconduct in acting or failing to act, except to
the extent caused by the negligence or willful misconduct of Tenant or any
Tenant Party. If any proceeding is filed for which indemnity is required under
this Section 11.(e), Landlord shall, upon request therefor, defend the
indemnified party in such proceeding at its sole cost utilizing counsel
reasonably satisfactory to the indemnified party. The provisions of this
Section 11.(e) shall survive the expiration or termination of this Lease.
12. SUBORDINATION; ATTORNMENT; NOTICE TO LANDLORD'S MORTGAGEE
---------------------------------------------------------
(a) SUBORDINATION. This Lease shall be subordinate to any deed of
trust, mortgage, or other security instrument, or any ground lease, master
lease, or primary lease (any such security instrument or lease, a "MORTGAGE"),
that now or hereafter covers all or any part of the Premises (the mortgagee
under any such mortgage or the lessor under any such lease is referred to herein
as a "LANDLORD'S MORTGAGEE"). Any Landlord's Mortgagee may elect, at any time,
unilaterally, to make this Lease superior to its mortgage, ground lease, or
other interest in the Premises by so notifying Tenant in writing. Provided
Tenant receives a Non-Disturbance Agreement from each such Mortgagee, Tenant
shall execute agreements confirming the subordination or superiority of this
Lease to any Mortgage upon Landlord or Landlord's Mortgagee's reasonable
request.
(b) ATTORNMENT. Provided Tenant receives a Non-Disturbance
Agreement from such party, Tenant shall attorn to any party succeeding to
Landlord's interest in the Premises, whether by purchase, foreclosure, deed in
lieu of foreclosure, power of sale, termination of lease, or otherwise, upon
such party's request, on the terms of such Non-Disturbance Agreement and shall
execute such agreements confirming such attornment as such party may reasonably
request.
(c) NOTICE TO LANDLORD'S MORTGAGEE. Tenant shall not seek to
enforce any remedy it may have for any default on the part of Landlord without
first giving written notice by certified mail, return receipt requested,
specifying the default in reasonable detail, to any Landlord's Mortgagee whose
address has been given to Tenant, and affording such Landlord's Mortgagee the
following time periods to perform Landlord's obligations hereunder: (1) at
least fifteen (15) days after receipt of such notice with respect to defaults
that can be cured by the payment of money; or (2) at least thirty (30) days
after receipt of such notice with respect to any other default, unless the cure
requires Landlord's Mortgagee to obtain possession of the Premises, in which
case such thirty (30) day period shall not commence until Landlord's Mortgagee
acquires possession, so long as Landlord's Mortgagee proceeds promptly to
acquire possession of the Premises with due diligence, by foreclosure of the
Mortgage or otherwise.
17
(d) LANDLORD'S MORTGAGEE'S PROTECTION PROVISIONS. If Landlord's
Mortgagee shall succeed to the interest of Landlord under this Lease, Landlord's
Mortgagee shall not be: (1) liable for any act or omission of any prior lessor
(including Landlord); (2) bound by any rent or additional rent or advance rent
which Tenant might have paid for more than the current month to any prior lessor
(including Landlord), and all such rent shall remain due and owing,
notwithstanding such advance payment; (3) bound by any security or advance
rental deposit made by Tenant which is not delivered or paid over to Landlord's
Mortgagee and with respect to which Tenant shall look solely to Landlord for
refund or reimbursement; (4) bound by any termination, amendment or modification
of this Lease made without Landlord's Mortgagee's consent and written approval,
except for those terminations, amendments and modifications permitted to be made
by Landlord without Landlord's Mortgagee's consent pursuant to the terms of the
loan documents between Landlord and Landlord's Mortgagee; (5) subject to the
defenses which Tenant might have against any prior lessor (including Landlord);
and (6) subject to the offsets which Tenant might have against any prior lessor
(including Landlord) except for those offset rights which (A) are expressly
provided in this Lease, (B) relate to periods of time following the acquisition
of the Building by Landlord's Mortgagee, and (C) Tenant has provided written
notice to Landlord's Mortgagee and provided Landlord's Mortgagee an opportunity
to cure the event giving rise to such offset event in accordance with the time
periods set forth in Section 12.(c) above. Landlord's Mortgagee shall have no
liability or responsibility under or pursuant to the terms of this Lease or
otherwise after it ceases to own an interest in the Building. Nothing in this
Lease shall be construed to require Landlord's Mortgagee to see to the
application of the proceeds of any loan, and Tenant's agreements set forth
herein shall not be impaired on account of any modification of the documents
evidencing and securing any loan.
(e) SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT.
Simultaneously upon Tenant's execution of this Lease, Tenant shall execute a
Subordination, Non-Disturbance and Attornment Agreement in the form attached
hereto as Exhibit H. Landlord shall return a fully executed Subordination, Non-
---------
Disturbance and Attornment Agreement in the form attached hereto as Exhibit H,
---------
executed by Landlord and the Lender named therein to Tenant as soon as
reasonably possible but not later than ninety (90) days after the date of this
Lease. Landlord shall use reasonable efforts (which efforts shall not require
the expenditure of funds or the threat (or commencement) of litigation) to
obtain a so-called "nondisturbance agreement" from any future Landlord's
Mortgagee in the form attached hereto as Exhibit H or another form reasonably
---------
acceptable to Tenant and such Landlord's Mortgagee or other institutional
lenders (either the form attached hereto as Exhibit H or such other reasonably
---------
acceptable form being herein referred to as the "NON-DISTURBANCE AGREEMENT").
The subordination of Tenant's rights hereunder to any future Landlord's
Mortgagee under Section 12.(a) and the attornment of Tenant to any future
Landlord Mortgagee under Section 12.(b) shall be conditioned upon such future
Landlord's Mortgagee's execution and delivery of a Non-Disturbance Agreement.
13. RULES AND REGULATIONS. Tenant shall comply with the rules and
regulations of the Building which are attached hereto as Exhibit C. Landlord
---------
may, from time to time, change such rules and regulations for the safety, care,
or cleanliness of the Building and related facilities,
18
provided that such changes will not unreasonably interfere with Tenant's use of
the Premises. Tenant shall be responsible for the compliance with such rules and
regulations by each Tenant Party.
14. CONDEMNATION.
------------
(a) TOTAL TAKING. If the entire Building or Premises are taken by
right of eminent domain or conveyed in lieu thereof (a "TAKING"), this Lease
shall terminate as of the date of the Taking.
(b) PARTIAL TAKING--TENANT'S RIGHTS. If any part of the Premises
becomes subject to a Taking and such Taking will prevent Tenant from conducting
its business in the Premises in a manner reasonably comparable to that conducted
immediately before such Taking for a period of more than 180 days, then Tenant
may terminate this Lease as of the date of such Taking by giving written notice
to Landlord within 30 days after the Taking, and Rent shall be apportioned as of
the date of such Taking. If Tenant does not terminate this Lease, then Rent
shall be abated on a reasonable basis as to that portion of the Premises
rendered untenantable by the Taking.
(c) PARTIAL TAKING--LANDLORD'S RIGHTS. If such a material
portion, but less than all, of the Premises becomes subject to a Taking that the
remainder of the Premises cannot be restored to a good and operable condition,
or if Landlord is required to pay any of the proceeds received for a Taking to a
Landlord's Mortgagee, then Landlord may terminate this Lease by delivering
written notice thereof to Tenant within 30 days after such Taking, and Rent
shall be apportioned as of the date of such Taking. If Landlord does not so
terminate this Lease, then this Lease will continue, but if any portion of the
Premises has been taken, Rent shall ▇▇▇▇▇ as provided in the last sentence of
Section 14.(b).
(d) AWARD. If any Taking occurs, then Landlord shall receive the
entire award or other compensation for the land on which the Building is
situated, the Building, and other improvements taken, and Tenant may separately
pursue a claim (to the extent it will not reduce Landlord's award) against the
condemnor for the value of Tenant's personal property which Tenant is entitled
to remove under this Lease, moving costs, loss of business, and other claims it
may have.
15. FIRE OR OTHER CASUALTY
----------------------
(a) REPAIR ESTIMATE. If the Premises or the Building are damaged
by fire or other casualty (a "CASUALTY"), Landlord shall, within 90 days after
such Casualty, deliver to Tenant a good faith estimate (the "DAMAGE NOTICE") of
the time needed to repair the damage caused by such Casualty.
(b) LANDLORD'S AND TENANT'S RIGHTS. If a material portion of the
Premises or the Building is damaged by Casualty such that Tenant is prevented
from conducting its business
19
in the Premises in a manner reasonably comparable to that conducted immediately
before such Casualty and Landlord estimates that the damage caused thereby
cannot be repaired within 270 days after the Casualty, then Tenant may terminate
this Lease by delivering written notice to Landlord of its election to terminate
within 30 days after the Damage Notice has been delivered to Tenant. If Tenant
does not so timely terminate this Lease, then (subject to Section 15.(c))
Landlord shall repair the Building or the Premises, as the case may be, as
provided below, and Rent for the portion of the Premises rendered untenantable
by the damage shall be abated on a reasonable basis from the date of damage
until the completion of the repair, unless a Tenant Party caused such damage, in
which case, Tenant shall continue to pay Rent without abatement.
(c) LANDLORD'S RIGHTS. If a Casualty damages a material portion
of the Building, and Landlord makes a good faith determination that restoring
the Premises would be uneconomical, or if Landlord is required to pay any
insurance proceeds arising out of the Casualty to a Landlord's Mortgagee, then
Landlord may terminate this Lease by giving written notice of its election to
terminate within 30 days after the Damage Notice has been delivered to Tenant,
and Basic Rent and Additional Rent shall be abated as of the date of the
Casualty.
(d) REPAIR OBLIGATION. If neither party elects to terminate this
Lease following a Casualty, then Landlord shall, within a reasonable time after
such Casualty, begin to repair the Premises and shall proceed with reasonable
diligence to restore the Premises to substantially the same condition as they
existed immediately before such Casualty; however, Landlord shall not be
required to repair or replace any of the furniture, equipment, fixtures
(including trade fixtures), and other personal property which may have been
placed by, or at the request of, Tenant or other occupants in the Building or
the Premises, and Landlord's obligation to repair or restore the Building or
Premises shall be limited to the extent of the insurance proceeds actually
received by Landlord for the Casualty in question. If at any time Landlord
reasonably determines that the insurance proceeds shall be insufficient to pay
to substantially complete the restoration of the Premises, Landlord shall give
written notice to Tenant and Tenant shall have the right to terminate this
Lease by written notice to Landlord within 30 days after receipt of such notice
from Landlord.
16. PERSONAL PROPERTY TAXES. Tenant shall be liable for all taxes
levied or assessed against personal property, furniture, or fixtures placed by
Tenant in the Premises. If any taxes for which Tenant is liable are levied or
assessed against Landlord or Landlord's property and Landlord elects to pay the
same after giving written notice to Tenant at least ten (10) business days in
advance, or if the assessed value of Landlord's property is increased by
inclusion of such personal property, furniture or fixtures and Landlord elects
to pay the taxes based on such increase, then Tenant shall pay to Landlord,
within 30 days after receiving written demand, the part of such taxes for which
Tenant is primarily liable hereunder; however, Landlord shall not pay such
amount if Tenant notifies Landlord that it will contest the validity or amount
of such taxes before Landlord makes such payment, and thereafter diligently
proceeds with such contest in accordance with law and if the non-payment thereof
does not pose a threat of loss or seizure of the Building or interest of
Landlord therein or impose any fee or penalty against Landlord.
20
17. EVENTS OF DEFAULT. Each of the following occurrences shall be an
"EVENT OF DEFAULT":
(a) Tenant's failure to pay Rent within five days after Landlord has
delivered notice to Tenant that the same is due; however, an Event of Default
shall occur hereunder without any obligation of Landlord to give any notice if
Landlord has given Tenant written notice under this Section 17.(a) on more than
one occasion during the twelve (12) month interval preceding such failure by
Tenant;
(b) Tenant abandons the Premises;
(c) Tenant fails to comply with the Permitted Use set forth herein and
the continuance of such failure for a period of ten (10) days after Landlord has
delivered to Tenant written notice thereof;
(d) Tenant fails to provide any estoppel certificate within the time
period required under Section 25.(e) and such failure shall continue for five
days after written notice thereof from Landlord to Tenant;
(e) Tenant's failure to perform, comply with, or observe any other
agreement or obligation of Tenant under this Lease and the continuance of such
failure for a period of more than 30 days after Landlord has delivered to Tenant
written notice thereof; provided that if the default is of such a nature that it
may not be reasonably cured within thirty (30) days, then no Event of Default
shall occur hereunder if Tenant commences curing same within such thirty (30)
day period and thereafter diligently and continuously pursues such cure to
completion within a period of not more than ninety (90) days after the delivery
of such notice.
(f) The filing of a petition by or against Tenant (the term "TENANT"
shall include, for the purpose of this Section 17.(f), any guarantor of Tenant's
obligations hereunder) (1) in any bankruptcy or other insolvency proceeding; (2)
seeking any relief under any state or federal debtor relief law; (3) for the
appointment of a liquidator or receiver for all or substantially all of Tenant's
property or for Tenant's interest in this Lease; or (4) for the reorganization
or modification of Tenant's capital structure; however, if such a petition is
filed against Tenant, then such filing shall not be an Event of Default unless
Tenant fails to have the proceedings initiated by such petition dismissed within
90 days after the filing thereof.
18. REMEDIES. Upon an Event of Default, Landlord may, in addition to
all other rights and remedies afforded Landlord hereunder, take any of the
following actions:
(a) Terminate this Lease by giving Tenant written notice thereof, in
which event Tenant shall pay to Landlord the sum of (1) all Rent accrued
hereunder through the date of termination, (2) all amounts due under Section
19.(a), and (3) an amount equal to (A) the total Rent that Tenant would have
been required to pay for the remainder of the Term plus Landlord's
21
estimate of aggregate expenses of reletting to the Premises (to the extent not
actually reimbursed under said Section 19.(a)), discounted to present value at a
per annum rate equal to the "Prime Rate" as published on the date this Lease is
terminated by The Wall Street Journal, Northeast Edition, in its listing of
-----------------------
"Money Rates," minus one percent, minus (B) the then present fair rental rate
value of the Premises for such period, similarly discounted;
(b) Terminate Tenant's right to possess the Premises without
terminating this Lease by giving written notice thereof to Tenant, in which
event Tenant shall pay to Landlord (1) all Rent and other amounts accrued
hereunder to the date of termination of possession, (2) all amounts due from
time to time under Section 19.(a), and (3) all Rent and other net sums required
hereunder to be paid by Tenant during the remainder of the Term, diminished by
any net sums thereafter received by Landlord through reletting the Premises
during such period, after deducting all out-of-pocket costs incurred by Landlord
in reletting the Premises. Landlord shall use reasonable efforts to relet the
Premises on such terms as Landlord in its sole discretion may determine
(including a term different from the Term, rental concessions, and alterations
to, and improvement of, the Premises). Landlord shall not be liable for, nor
shall Tenant's obligations hereunder be diminished because of, Landlord's
failure to relet the Premises or to collect rent due for such reletting. Tenant
shall not be entitled to the excess of any consideration obtained by reletting
over the Rent due hereunder. Reentry by Landlord in the Premises shall not
affect Tenant's obligations hereunder for the unexpired Term; rather, Landlord
may, from time to time, bring an action against Tenant to collect amounts due by
Tenant, without the necessity of Landlord's waiting until the expiration of the
Term. Unless Landlord delivers written notice to Tenant expressly stating that
it has elected to terminate this Lease, all actions taken by Landlord to
dispossess or exclude Tenant from the Premises shall be deemed to be taken under
this Section 18.(b). If Landlord elects to proceed under this Section 18.(b),
it may at any time elect to terminate this Lease under Section 18.(a); or
(c) Additionally, without notice, Landlord may alter locks or other
security devices at the Premises to deprive Tenant of access thereto, and
Landlord shall not be required to provide a new key or right of access to
Tenant.
Any and all remedies set forth in this Lease: (i) shall be in addition to
any and all other remedies Landlord may have at law or in equity; (ii) shall be
cumulative; and (iii) may be pursued successively or concurrently as Landlord
may elect. The exercise of any remedy by Landlord shall not be deemed an
election of remedies or preclude Landlord from exercising any other remedies in
the future. Notwithstanding the foregoing, Landlord shall only recover its
damages allowed hereunder once.
19. PAYMENT BY TENANT; NON-WAIVER
-----------------------------
(a) PAYMENT BY TENANT. Upon any Event of Default, Tenant shall pay
to Landlord all costs incurred by Landlord (including court costs and reasonable
attorneys' fees and expenses) in (1) obtaining possession of the Premises, (2)
removing and storing Tenant's or any
22
other occupant's property, (3) repairing, restoring, altering, remodeling, or
otherwise putting the Premises into condition acceptable to a new tenant, (4) if
Tenant is dispossessed of the Premises and this Lease is not terminated,
reletting all or any part of the Premises (including brokerage commissions, cost
of tenant finish work, and other costs incidental to such reletting), (5)
performing Tenant's obligations which Tenant failed to perform, and (6)
enforcing, or advising Landlord of, its rights, remedies, and recourses arising
out of the Event of Default. To the full extent permitted by law, Landlord and
Tenant agree the federal and state courts of the state in which the Premises are
located shall have exclusive jurisdiction over any matter relating to or arising
from this Lease and the parties' rights and obligations under this Lease.
(b) NO WAIVER. Landlord's acceptance of Rent following an Event of
Default shall not waive Landlord's rights regarding such Event of Default. No
waiver by Landlord of any violation or breach of any of the terms contained
herein shall waive Landlord's rights regarding any future violation of such
term. Landlord's acceptance of any partial payment of Rent shall not waive
Landlord's rights with regard to the remaining portion of the Rent that is due,
regardless of any endorsement or other statement on any instrument delivered in
payment of Rent or any writing delivered in connection therewith; accordingly,
Landlord's acceptance of a partial payment of Rent shall not constitute an
accord and satisfaction of the full amount of the Rent that is due.
20. LANDLORD'S LIEN. Intentionally omitted, provided that the deletion
of this Section shall not be construed to be a waiver of Landlord's lien rights
provided by law.
21. SURRENDER OF PREMISES. No act by Landlord shall be deemed an
acceptance of a surrender of the Premises, and no agreement to accept a
surrender of the Premises shall be valid unless it is in writing and signed by
Landlord. At the expiration or termination of this Lease, Tenant shall deliver
to Landlord the Premises in the condition required by Section 8.(b) of this
Lease, free of Hazardous Materials placed on the Premises during the Term,
broom-clean, reasonable wear and tear (and condemnation and Casualty damage, as
to which Sections 14 and 15 shall control) excepted, and shall deliver to
Landlord all keys to the Premises. Provided that Tenant has performed all of its
obligations hereunder, Tenant shall remove all trade fixtures, equipment,
furniture, and personal property placed in the Premises by Tenant and all such
alterations, additions, improvements and wiring which, when approved by
Landlord, were required to be removed from the Premises at the earlier
expiration or termination of the Term of this Lease, and may remove all such
fixtures, alterations, additions, improvements and wiring which, when approved
by Landlord, were permitted to be removed by Tenant from the Premises at the
earlier expiration or termination of the Term of this Lease. Tenant shall
repair all damage caused by such removal. All items not so removed shall, at
Landlord's option, be deemed to have been abandoned by Tenant and may be
appropriated, sold, stored, destroyed, or otherwise disposed of by Landlord
without notice to Tenant and without any obligation to account for such items;
any such disposition shall not be considered a strict foreclosure. The
provisions of this Section 21 shall survive the end of the Term.
23
22. HOLDING OVER. If Tenant fails to vacate the Premises at the end of
the Term, then Tenant shall be a tenant at sufferance and, in addition to all
other damages and remedies to which Landlord may be entitled for such holding
over, Tenant shall pay, in addition to the other Rent, a daily rate of Basic
Rent equal to the greater of (a) 150% of the daily Basic Rent payable during the
last month of the Term, or (b) 125% of the prevailing rental rate in the
Building for similar space. The provisions of this Section 22 shall not be
deemed to limit or constitute a waiver of any other rights or remedies of
Landlord provided herein or at law. If Tenant fails to surrender the Premises
upon the termination or expiration of this Lease, in addition to any other
liabilities to Landlord accruing therefrom, Tenant shall protect, defend,
indemnify and hold Landlord harmless from all loss, costs (including reasonable
attorneys' fees) and liability resulting from such failure, including, without
limiting the generality of the foregoing, any claims made by any succeeding
tenant founded upon such failure to surrender, and any lost profits to Landlord
resulting therefrom.
23. CERTAIN RIGHTS RESERVED BY LANDLORD. Provided that the exercise of
such rights does not unreasonably interfere with Tenant's occupancy of the
Premises, Landlord shall have the following rights:
(a) To make inspections and to complete repairs, alterations,
additions, changes, or improvements required to be performed by Landlord under
this Lease, whether structural or otherwise, in and about the Building, or any
part thereof; to enter upon the Premises (after giving Tenant reasonable advance
notice thereof, except in cases of real or apparent emergency, in which case no
notice shall be required) for any of the foregoing purposes and, during the
continuance of any such work, to temporarily close doors, entryways, public
space, and corridors in the Building; to interrupt or temporarily suspend
Building services and facilities provided that Landlord shall minimize any
interference with Tenant's business operations; and to change the name of the
Building;
(b) To take such reasonable measures as Landlord deems advisable for
the security of the Building and its occupants; evacuating the Building for
cause, suspected cause, or for drill purposes; and temporarily denying access to
the Building (which access shall not be denied for any reason within Landlord's
control for longer than one (1) business day);
(c) Upon at least twenty-four (24) hours prior reasonable notice
(which may be by telephone) to Tenant and, if requested by Tenant, in the
presence of Tenant or its agent, to enter the Premises at reasonable hours to
show the Premises to prospective purchasers, lenders, or, during the last 12
months of the Term, tenants.
24. INTENTIONALLY DELETED.
---------------------
25. MISCELLANEOUS.
-------------
(a) LANDLORD TRANSFER. Landlord may transfer any portion of the
Building and any of its rights under this Lease. If Landlord assigns its rights
under this Lease, then Landlord
24
shall thereby be released from any further obligations hereunder arising after
the date of transfer, provided that the assignee assumes Landlord's obligations
hereunder in writing.
(b) LANDLORD'S LIABILITY. The liability of Landlord to Tenant for
any default by Landlord under the terms of this Lease shall be limited to
Tenant's actual direct, but not consequential, damages therefor and shall be
recoverable only from the interest of Landlord in the Premises and the proceeds
of any insurance relating to the Premises, and Landlord shall not be personally
liable for any deficiency (except for any such insurance proceeds). This
Section shall not limit any remedies which Tenant may have for Landlord's
defaults which do not involve the personal liability of Landlord.
(c) FORCE MAJEURE. Other than for Tenant's obligations under this
Lease that can be performed by the payment of money (e.g., payment of Rent and
maintenance of insurance), whenever a period of time is herein prescribed for
action to be taken by either party hereto, such party shall not be liable or
responsible for, and there shall be excluded from the computation of any such
period of time, any delays due to strikes, riots, acts of God, shortages of
labor or materials, war, governmental laws, regulations, or restrictions, or any
other causes of any kind whatsoever which are beyond the control of such party.
(d) BROKERAGE. Neither Landlord nor Tenant has dealt with any
broker or agent in connection with the negotiation or execution of this Lease,
other than ▇▇▇▇▇ & ▇▇▇▇▇ Management Services, Inc. and Boston Real Estate
Partners, whose commission shall be paid by Landlord. Tenant and Landlord shall
each indemnify the other against all costs, expenses, attorneys' fees, and other
liability for commissions or other compensation claimed by any broker or agent
claiming the same by, through, or under the indemnifying party.
(e) ESTOPPEL CERTIFICATES. From time to time, Tenant shall furnish
to any party designated by Landlord, within ten days after Landlord has made a
written request therefor, a certificate signed by Tenant confirming and
containing such factual certifications and representations as to this Lease as
Landlord may reasonably request. Unless otherwise required by Landlord's
Mortgagee or a prospective purchaser or mortgagee of the Building, the initial
form of estoppel certificate to be signed by Tenant is attached hereto as
Exhibit F.
(f) NOTICES. All notices and other communications given pursuant
to this Lease shall be in writing and shall be (1) mailed by first class, United
States Mail, postage prepaid, certified, with return receipt requested, and
addressed to the parties hereto at the address specified in the Basic Lease
Information, (2) hand delivered to the intended address provided a
representative of Tenant acknowledges receipt of any such communication, or (3)
sent by a nationally recognized overnight courier service. All notices shall be
effective upon delivery to the address of the addressee. The parties hereto may
change their addresses by giving notice thereof to the other in conformity with
this provision.
(g) SEPARABILITY. If any clause or provision of this Lease is
illegal, invalid, or unenforceable under present or future laws, then the
remainder of this Lease shall not be affected thereby and in lieu of such clause
or provision, there shall be added as a part of this Lease a clause
25
or provision as similar in terms to such illegal, invalid, or unenforceable
clause or provision as may be possible and be legal, valid, and enforceable.
(h) AMENDMENTS; AND BINDING EFFECT. This Lease may not be amended
except by instrument in writing signed by Landlord and Tenant. No provision of
this Lease shall be deemed to have been waived by Landlord unless such waiver is
in writing signed by Landlord, and no custom or practice which may evolve
between the parties in the administration of the terms hereof shall waive or
diminish the right of Landlord to insist upon the performance by Tenant in
strict accordance with the terms hereof. The terms and conditions contained in
this Lease shall inure to the benefit of and be binding upon the parties hereto,
and upon their respective successors in interest and legal representatives,
except as otherwise herein expressly provided. This Lease is for the sole
benefit of Landlord and Tenant, and, other than Landlord's Mortgagee, no third
party shall be deemed a third party beneficiary hereof.
(i) QUIET ENJOYMENT. Provided Tenant has performed all of its
obligations hereunder, Tenant shall peaceably and quietly hold and enjoy the
Premises for the Term, without hindrance from Landlord or any party claiming by,
through, or under Landlord, but not otherwise, subject to the terms and
conditions of this Lease. Landlord represents to Tenant that Landlord is the
record owner of the Building in fee simple absolute.
(j) NO MERGER. There shall be no merger of the leasehold estate
hereby created with the fee estate in the Premises or any part thereof if the
same person acquires or holds, directly or indirectly, this Lease or any
interest in this Lease and the fee estate in the leasehold Premises or any
interest in such fee estate.
(k) NO OFFER. The submission of this Lease to Tenant shall not be
construed as an offer, and Tenant shall not have any rights under this Lease
unless Landlord executes a copy of this Lease and delivers it to Tenant.
(l) ENTIRE AGREEMENT. This Lease constitutes the entire agreement
between Landlord and Tenant regarding the subject matter hereof and supersedes
all oral statements and prior writings relating thereto. Except for those set
forth in this Lease, no representations, warranties, or agreements have been
made by Landlord or Tenant to the other with respect to this Lease or the
obligations of Landlord or Tenant in connection therewith. The normal rule of
construction that any ambiguities be resolved against the drafting party shall
not apply to the interpretation of this Lease or any exhibits or amendments
hereto.
(m) WAIVER OF JURY TRIAL. To the maximum extent permitted by law,
Landlord and Tenant each waive right to trial by jury in any litigation arising
out of or with respect to this Lease.
(n) GOVERNING LAW. This Lease shall be governed by and construed
in accordance with the laws of the State in which the Premises are located.
26
(o) JOINT AND SEVERAL LIABILITY. If Tenant is comprised of more
than one party, each such party shall be jointly and severally liable for
Tenant's obligations under this Lease.
(p) FINANCIAL REPORTS. Within 15 days after Landlord's request,
Tenant will furnish Tenant's most recent audited financial statements (including
any notes to them) to Landlord, or, if no such audited statements have been
prepared, such other financial statements (and notes to them) as may have been
most recently prepared by an independent certified public accountant or, failing
those, Tenant's most recent internally prepared financial statements. If Tenant
is a publicly traded corporation, Tenant may satisfy its obligations hereunder
by providing to Landlord Tenant's most recent annual and quarterly reports. If
Tenant is not a publicly traded corporation, Tenant will discuss its financial
statements with Landlord. Landlord will not disclose any aspect of Tenant's
financial statements that Tenant designates to Landlord as confidential except
(1) to Landlord's Mortgagee or prospective purchasers of the Building, (2) in
litigation between Landlord and Tenant, and (3) if required by court order.
Tenant shall not be required to deliver the financial statements required under
this Section 25.(p) more than once in any 12-month period unless requested by
Landlord's Mortgagee or a prospective buyer or lender of the Building or an
Event of Default occurs.
(q) LANDLORD'S FEES. Whenever Tenant requests Landlord to take
any action not required of it hereunder or give any consent required or
permitted under this Lease, Tenant will reimburse Landlord for Landlord's
reasonable out-of-pocket costs payable to third parties and incurred by Landlord
in reviewing the proposed action or consent, including without limitation
reasonable attorneys', engineers' or architects' fees, within thirty (30) days
after Landlord's delivery to Tenant of a statement of such costs. Tenant will
be obligated to make such reimbursement without regard to whether Landlord
consents to any such proposed action.
(r) [INTENTIONALLY OMITTED]
(s) CONFIDENTIALITY. Tenant acknowledges that the terms and
conditions of this Lease are to remain confidential for Landlord's benefit, and
may not be disclosed by Tenant to anyone, by any manner or means, directly or
indirectly, without Landlord's prior written consent, other than to Tenant's
lenders, accountants, attorneys and other advisors provided such advisors agree
to keep the terms and conditions of this Lease confidential to the extent
required under this Section 25.(s) or in connection with any litigation
proceeding and/or in order to comply with any federal, state or municipal laws,
regulations, rules, ordinances and/or judicial or administrative directive
and/or any rules or regulations of any stock exchange, including any requirement
to attach this Lease as an exhibit to any filing with the Securities and
Exchange Commission. The consent by Landlord to any disclosures shall not be
deemed to be a waiver on the part of Landlord of any prohibition against any
future disclosure.
(t) HAZARDOUS MATERIALS. The term "HAZARDOUS MATERIALS" means any
substance, material, or waste which is now or hereafter classified or considered
to be hazardous, toxic, or dangerous under any Law relating to pollution or the
protection or regulation of human health, natural resources or the environment,
or poses or threatens to pose a hazard to the health or safety of persons on the
Premises or in the Building. Tenant shall not use, generate, store, or
27
dispose of, or permit the use, generation, storage or disposal of Hazardous
Materials on or about the Premises or the Building except in a manner and
quantity necessary for the ordinary performance of Tenant's business, and then
in compliance with all Laws. If Tenant breaches its obligations under this
Section 25.(t), Landlord may immediately take any and all action reasonably
appropriate to remedy the same, including taking all appropriate action to clean
up or remediate any contamination resulting from Tenant's use, generation,
storage or disposal of Hazardous Materials. Tenant shall defend, indemnify, and
hold harmless Landlord and its representatives and agents from and against any
and all claims, demands, liabilities, causes of action, suits, judgments,
damages and expenses (including reasonable attorneys' fees and cost of clean up
and remediation) arising from Tenant's failure to comply with the provisions of
this Section 25.(t). This indemnity provision shall survive termination or
expiration of the Lease. Except as set forth in the Environmental Reports (as
hereinafter defined), to the actual knowledge of Landlord, Landlord represents
that there are no Hazardous Materials on the Premises as of the date of this
Lease. For the purposes hereof, "Environmental Reports" shall mean,
collectively, that certain Phase I Environmental Site Assessment Report and that
certain Subsurface Investigation Report prepared in October, 1997 by ENSR in
connection with, among other properties, the Premises, and that certain Physical
Conditions Survey Report dated October 20, 1997 and prepared by ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇, Inc. in connection with the Premises.
(u) LIST OF EXHIBITS. All exhibits and attachments attached hereto are
----------------
incorporated herein by this reference.
Exhibit A - Survey of Premises
Exhibit B - Legal Description of Building
Exhibit C - Building Rules and Regulations
Exhibit D - Tenant Finish-Work: Allowance
Exhibit E - Amendment No. 1
Exhibit F - Form of Tenant Estoppel Certificate
Exhibit G - Extension Option
Exhibit H - Form of Subordination, Non-Disturbance and Attornment Agreement
Exhibit I - Letter of Credit
(v) TIME OF ESSENCE. Time is of the essence of this Lease and each
and all of its provisions.
(w) SIGNAGE. Tenant may install, at Tenant's risk and expense,
exterior signage on the Building, in accordance with all Laws and subject to
Landlord's prior approval and consent, which shall not be unreasonably withheld,
delayed or conditioned.
(x) ACCESS. Tenant shall have twenty-four (24) hour access to the
Premises seven (7) days a week (subject to force majeure, emergency, etc.).
(y) FAILURE OF TENANT TO CONTINUOUSLY OCCUPY THE PREMISES. If, for
more than three hundred sixty-five (365) days, Tenant (1) vacates the Premises
or (2) fails to continuously operate its business therein, Landlord may
terminate the Lease upon giving written
28
notice to Tenant as of the date specified in such notice. If Landlord terminates
this Lease, then this Lease shall terminate and neither party shall have any
further obligations hereunder as of the terminate date except as otherwise
provided herein and Tenant shall pay to Landlord all Rent accrued through the
termination date. Thereafter, Landlord may lease the Premises (or any portion
thereof) to any person without liability to Tenant.
26. OTHER PROVISIONS. LANDLORD AND TENANT EXPRESSLY DISCLAIM ANY
IMPLIED WARRANTY THAT THE PREMISES ARE SUITABLE FOR TENANT'S INTENDED COMMERCIAL
PURPOSE, AND TENANT'S OBLIGATION TO PAY RENT HEREUNDER IS NOT DEPENDENT UPON THE
CONDITION OF THE PREMISES OR THE PERFORMANCE BY LANDLORD OF ITS OBLIGATIONS
HEREUNDER, AND, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, TENANT SHALL
CONTINUE TO PAY THE RENT, WITHOUT ABATEMENT, SET-OFF OR DEDUCTION,
NOTWITHSTANDING ANY BREACH BY LANDLORD OF ITS DUTIES OR OBLIGATIONS HEREUNDER,
WHETHER EXPRESS OR IMPLIED.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
29
IN WITNESS WHEREOF, and in consideration of the mutual entry into this
Lease and for other good and valuable consideration, and intending to be legally
bound, each party hereto has caused this Lease Agreement to be duly executed as
a Massachusetts instrument under seal as of the day and year first above
written.
TENANT:
SYCAMORE NETWORKS, INC.,
a Delaware corporation
By:
-----------------------------------
Name:
----------------------------
Title: President/Vice President
By:
---------------------------------------
Name:
---------------------------------
Title: Treasurer/Assistant Treasurer
LANDLORD:
W9/TIB REAL ESTATE LIMITED
PARTNERSHIP, a Delaware limited partnership
By: W9/TIB Gen-Par, Inc., a Delaware
corporation, its general partner
By:
---------------------------------
Name:
----------------------------
Title:
----------------------------
30
EXHIBIT A
---------
SURVEY OF PREMISES
------------------
A-1
EXHIBIT B
---------
LEGAL DESCRIPTION OF BUILDING
-----------------------------
Lot 2B as shown on that certain plan entitled "Plan of Land of Billerica Road
Site, Chelmsford, MA", which plan is recorded with the Middlesex North District
Registry of Deeds in Plan Book 143 as Plan 143.
B-1
EXHIBIT C
---------
BUILDING RULES AND REGULATIONS
------------------------------
The following rules and regulations shall apply to the Premises, the
Building, and the appurtenances thereto:
1. Sidewalks, doorways, vestibules, halls, stairways, and other similar
areas shall not be obstructed by Tenant or used by Tenant for purposes other
than ingress and egress to and from the Premises and for going from one to
another part of the Building.
2. Plumbing, fixtures and appliances shall be used only for the purposes
for which designed, and no sweepings, rubbish, rags or other unsuitable material
shall be thrown or deposited therein. Damage resulting to any such fixtures or
appliances from misuse by Tenant or its agents, employees or invitees, shall be
paid by Tenant.
3. No signs, advertisements or notices shall be painted or affixed on or
to any windows or exterior doors or other exterior part of the Building without
the prior written consent of Landlord. No curtains or other window treatments
shall be placed between the glass and the Building standard window treatments.
4. Landlord shall provide all door locks to the Premises, at the cost of
Tenant, and Tenant shall not place any additional door locks in the Premises
without Landlord's prior written consent, which consent shall not be
unreasonably withheld, delayed or conditioned. Landlord shall furnish to Tenant
a reasonable number of keys to the Premises, at Tenant's cost, and Tenant shall
not make a duplicate thereof.
5. Tenant assumes all risks of and shall be liable for all damage to
articles moved and injury to persons or public engaged or not engaged in such
movement, including equipment, property and personnel of Landlord if damaged or
injured as a result of acts in connection with carrying out this service for
such tenant.
6. Landlord may reasonably prescribe weight limitations and determine the
locations for safes and other heavy equipment or items, which shall in all cases
be placed in the Building so as to distribute weight in a manner reasonably
acceptable to Landlord which may include the use of such supporting devices as
Landlord may reasonably require. All damages to the Building caused by the
installation or removal of any property of Tenant, or done by Tenant's property
while in the Building, shall be repaired at the expense of Tenant.
7. Nothing shall be swept or thrown into the corridors, halls, elevator
shafts or stairways. No birds or animals shall be brought into or kept in, on
or about Tenant's Premises. No portion of the Building shall at any time be
used or occupied as sleeping or lodging quarters.
8. Tenant shall cooperate with Landlord's employees in keeping the
Premises neat and clean.
9. Tenant shall not use or keep in the Building any flammable or explosive
fluid or substance (other than typical office supplies [e.g., photocopier toner]
used in compliance with all Laws).
10. Landlord will not be responsible for lost or stolen personal property,
money or jewelry from Tenant's Premises or public or common areas regardless of
whether such loss occurs when the area is locked against entry or not.
11. All vehicles are to be parked for business purposes having to do with
Tenant's business operated in the Premises, parked within designated parking
spaces, one vehicle to each space. No vehicle shall be parked as a "billboard"
vehicle in the parking lot. Any vehicle parked improperly may be towed away.
Tenant, Tenant's agents, employees, vendors and customers who do not operate or
park their vehicles as required shall subject the vehicle to being towed at the
expense of the owner or driver.
C-2
EXHIBIT D
---------
TENANT FINISH-WORK: ALLOWANCE
-----------------------------
1. Except as set forth in this Exhibit, Tenant accepts the Premises in
their "AS-IS" condition on the date that this Lease is entered into. On or
before the Commencement Date, all Building HVAC and mechanical systems serving
the Premises shall be operable.
2. Tenant shall provide to Landlord for its approval final working
drawings, prepared by an architect that has been approved by Landlord (which
approval shall not unreasonably be withheld, delayed or conditioned), of all
alterations, improvements and installations that Tenant proposes to construct,
install and complete in the Premises; such working drawings shall include the
partition layout, ceiling plan, electrical outlets and switches, telephone
outlets, drawings for any modifications to the mechanical and plumbing systems
of the Building, and detailed plans and specifications for the construction of
the alterations, improvements and installations called for under this Exhibit in
accordance with all applicable governmental laws, codes, rules, and regulations.
If any of Tenant's proposed construction work will affect the Building's HVAC,
electrical, mechanical, or plumbing systems, then the working drawings
pertaining thereto must be approved by the Building's engineer of record.
Landlord's approval or disapproval, as the case may be, of the final working
drawings (inclusive of any approval required by the Building's engineer of
record) shall be completed within ten (10) days of Landlord's receipt of such
working drawings. If Landlord disapproves the final working drawings, Landlord
shall specify the reasons for such disapproval in writing to Tenant. Landlord's
(and the Building engineer's) approval of such working drawings shall not be
unreasonably withheld, delayed or conditioned, provided that (a) they comply
with all applicable laws, rules, and regulations, (b) such working drawings are
sufficiently detailed to allow construction of the alterations, improvements and
installations in a good and workmanlike manner, (c) the alterations,
improvements and installations depicted thereon conform to the reasonable rules
and regulations promulgated from time to time by Landlord for the construction
of tenant alterations, improvements and installations (a copy of which has been
delivered to Tenant), and (d) the alterations, improvements and installations do
not affect the Building's Structure or have any adverse effect on the Building's
HVAC, electrical, mechanical or plumbing systems. Within five (5) business days
of receiving any revision to such working drawings, Landlord shall advise Tenant
in writing of Landlord's approval or disapproval of such revisions and, in the
event of any full or partial disapproval, any changes reasonably requested by
Landlord. As used herein, "WORKING DRAWINGS" shall mean the final working
drawings approved by Landlord, as amended from time to time by any approved
changes thereto, and "WORK" shall mean all alterations, improvements and
installations to be constructed in accordance with and as indicated on the
Working Drawings. Landlord's approval of the Working Drawings shall not be a
representation or warranty of Landlord that such drawings are adequate for any
use or comply with any law, but shall merely be the consent of Landlord thereto.
Landlord shall, at Tenant's request, sign the Working Drawings to evidence its
review and approval thereof. All changes in the Work must receive the prior
written approval of Landlord (which approval shall not be withheld, delayed or
conditioned), and in the event of any such
D-1
approved change Tenant shall, upon completion of the Work, furnish Landlord with
an accurate, reproducible "as-built" plan of the improvements as constructed.
3. The Work shall be performed only by contractors and subcontractors
approved in writing by Landlord, which approval shall not be unreasonably
withheld or delayed. All contractors and subcontractors shall be required to
procure and maintain insurance against such risks, in such amounts, and with
such companies as Landlord may reasonably require. Certificates of such
insurance, with paid receipts therefor, must be received by Landlord before the
Work is commenced. Promptly upon Landlord's approval of the Working Drawings
and delivery of the Premises to Tenant, Tenant shall commence the construction
of the Work and diligently and continuously pursue the completion of the same.
The Work shall be performed in a good and workmanlike manner free of defects,
shall conform with the Working Drawings, and shall be performed in such a manner
and at such times as not to interfere unreasonably with or delay Landlord's
other contractors and the operation of the Building. Tenant's construction
representative shall coordinate with Landlord's property manager for reasonable
access to the Premises during Tenant's construction of the Work.
4. The entire cost of performing the Work (including, without limitation,
design of the Work and preparation of the Working Drawings, costs of
construction, labor and materials, electrical usage during construction,
additional janitorial services, general tenant signage, related permitting,
taxes and insurance costs, all of which costs are herein collectively called the
"TOTAL CONSTRUCTION COSTS") in excess of the Construction Allowance (as
hereinafter defined) shall be paid by Tenant.
5. Landlord shall provide to Tenant a construction allowance (the
"CONSTRUCTION ALLOWANCE") equal to the lesser of (a) $828,480.00 or (b) the
Total Construction Costs, as adjusted for any approved changes to the Work.
6. Subject to the terms and conditions of this Lease, Landlord shall pay
the Construction Allowance to Tenant for the purpose of financing a portion of
the Total Construction Costs and the cost of designing, constructing, installing
and completing any additional improvements, alterations and installations in the
Premises within nine (9) months after the date of this Lease. As conditions to
Tenant's right to receive the Construction Allowance: (i) Tenant shall not be
in default under the Lease; (ii) the Lease shall be in full force and effect;
(iii) the portion of the Work covered by any application for payment shall, in
Landlord's reasonable discretion, have been substantially completed in
accordance with the Working Drawings and the provisions of this Lease; (iv)
Tenant shall furnish to Landlord: (A) if the entire Work is substantially
complete, a Certificate of Occupancy respecting the Premises; and (B) such
evidence as Landlord may reasonably require to evidence that all persons
furnishing or supplying labor and materials in connection with the construction
of the Work, or in the case of completion of a portion of the Work, have been
paid and that no lien exists of record with respect thereto; and (v) Tenant
shall not request any portion of the Construction Allowance more than once a
month. Landlord shall pay each requested portion of the Construction Allowance
within twenty (20) business days from Tenant's written request for the same
provided that Tenant has complied with the requirements set forth in the
preceding sentence. If, within nine (9) months after the date of
D-2
this Lease, Landlord has not received applications for payment, together with
any other information reasonably requested by Landlord, from Tenant for the
entire Construction Allowance pursuant to the provisions of this Exhibit D, or
upon paying the full amount of the Construction Allowance to Tenant in
accordance with the provisions hereof, Landlord shall have no further obligation
to extend any credit to Tenant after disbursing all payments of the Construction
Allowance properly requested in applications for payment received by Landlord
before the end of such nine-month period provided Landlord has received all
other information it reasonably requested be provided by Tenant.
7. In consideration for Landlord's management and supervision of services
performed in connection with the Work, Tenant shall pay to Landlord, within ten
(10) business days after demand therefor, the actual costs incurred by Landlord
to review and approve the Working Drawings and/or any drafts and/or
modifications thereto and to review the construction of the Work.
D-3
EXHIBIT E
---------
AMENDMENT NO. 1
---------------
This Amendment No. 1 (this "AMENDMENT") is executed as of_______, 199___
between W9/TIB Real Estate Limited Partnership, a Delaware limited partnership
("LANDLORD"), and Sycamore Networks, Inc., a Delaware corporation ("TENANT"),
for the purpose of amending the Lease Agreement between Landlord and Tenant
dated August __, 1999 (the "LEASE"). Capitalized terms used herein but not
defined shall be given the meanings assigned to them in the Lease.
AGREEMENTS
For valuable consideration, whose receipt and sufficiency are acknowledged,
Landlord and Tenant agree as follows:
1. CONDITION OF PREMISES. Tenant has accepted possession of the Premises
pursuant to the Lease. Any improvements required by the terms of the Lease to
be made by Landlord have been completed to the full and complete satisfaction of
Tenant in all respects except for the punchlist items described on Exhibit A
----------
hereto (the "PUNCHLIST ITEMS"), and except for such Punchlist Items, Landlord
has fulfilled all of its duties under the Lease with respect to such initial
tenant improvements. Furthermore, Tenant acknowledges that the Premises are
suitable for the Permitted Use.
2. COMMENCEMENT DATE. The Commencement Date of the Lease is___, 1999. If
the Commencement Date set forth in the Lease is different than the date set
forth in the preceding sentence, then the Commencement Date as contained in the
Lease is amended to be the Commencement Date set forth in the preceding
sentence.
3. EXPIRATION DATE. The Term is scheduled to expire on_______, 200_. If
the scheduled expiration date of the initial Term as set forth in the Lease is
different than the date set forth in the preceding sentence, then the scheduled
expiration date as set forth in the Lease is hereby amended to the expiration
date set forth in the preceding sentence.
4. CONTACT NUMBERS. Unless Landlord is otherwise notified by Tenant, (a)
Tenant's telephone number in the Premises is_____ and (b) Tenant's telecopy
number in the Premises is______ .
5. RATIFICATION. Each of Landlord and Tenant hereby ratifies and confirms
its respective obligations under the Lease. To the best of its knowledge,
Tenant represents and warrants to Landlord that it has no defenses thereto.
Additionally, Tenant further confirms and ratifies that, as of the date hereof,
the Lease is and remains in good standing and in full force and effect, and, to
the best of its knowledge, Tenant has no claims, counterclaims, set-offs or
defenses
E-1
against Landlord arising out of the Lease or in any way relating
thereto or arising out of any other transaction between Landlord and Tenant,
except as set forth below:
6. BINDING EFFECT; GOVERNING LAW. Except as modified hereby, the Lease
shall remain in full effect and this Amendment shall be binding upon Landlord
and Tenant and their respective successors and assigns. If any inconsistency
exists or arises between the terms of this Amendment and the terms of the Lease,
the terms of this Amendment shall prevail. This Amendment shall be governed by
the laws of the State in which the Premises is located.
7. COUNTERPARTS. This Amendment may be executed in multiple counterparts,
each of which shall constitute an original, but all of which shall constitute
one document.
Executed as of the date first written above.
TENANT:
SYCAMORE NETWORKS, INC.,
a Delaware corporation
By:
----------------------------------
Name:
------------------------------
Title: President/Vice President
By:
-----------------------------------
Name:
------------------------------
Title: Treasurer/Assistant Treasurer
LANDLORD:
W9/TIB REAL ESTATE LIMITED
PARTNERSHIP, a Delaware limited partnership
By: W9/TIB Gen-Par, Inc., a Delaware
corporation, its general partner
By:
------------------------------------
Name:
-------------------------------
Title:
-------------------------------
E-2
EXHIBIT A
---------
PUNCHLIST ITEMS
---------------
A-1
EXHIBIT F
---------
FORM OF TENANT ESTOPPEL CERTIFICATE
-----------------------------------
The undersigned is the Tenant under the Lease (defined below) between
W9/TIB Real Estate Limited Partnership, a Delaware limited partnership, as
Landlord, and the undersigned as Tenant, for the building located at ▇ ▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, and hereby certifies as follows:
1. The Lease consists of the original Lease Agreement dated as of_______,
199___ between Tenant and Landlord ['s predecessor-in-interest] and the
following amendments or modifications thereto (if none, please state "none"):
The documents listed above are herein collectively referred to as the "LEASE"
and represent the entire agreement between the parties with respect to the
Premises. All capitalized terms used herein but not defined shall be given the
meaning assigned to them in the Lease.
2. The Lease is in full force and effect and has not been modified,
supplemented or amended in any way except as provided in Section 1 above.
3. The Term commenced on _______ , 1999 and the Term expires, excluding
any renewal options, on___________, 200__, and Tenant has no option to purchase
all or any part of the Premises or the Building or, except as expressly set
forth in the Lease, any option to terminate or cancel the Lease.
4. Tenant currently occupies the Premises described in the Lease and
Tenant has not transferred, assigned, or sublet any portion of the Premises nor
entered into any license or concession agreements with respect thereto except as
follows (if none, please state "none"):
5. All monthly installments of Basic Rent, all Additional Rent and all
monthly installments of estimated Additional Rent have been paid when due
through _______. The current monthly installment of Basic Rent is $________.
6. All conditions of the Lease to be performed by Landlord necessary to
the enforceability of the Lease have been satisfied and, to the best of Tenant's
knowledge, Landlord
F-1
is not in default thereunder. In addition, Tenant has not delivered any notice
to Landlord regarding a default by Landlord thereunder, except as follows:
7. As of the date hereof, to the best of Tenant's knowledge, there are no
existing defenses or offsets against enforcement of the Lease, or, to the
undersigned's knowledge, claims or any basis for a claim, that the undersigned
has against Landlord, and no event has occurred and no condition exists, which,
with the giving of notice or the passage of time, or both, will constitute a
default under the Lease.
8. No rental has been paid more than thirty (30) days in advance and no
security deposit has been delivered to Landlord except as provided in the Lease.
9. Tenant is a duly formed and existing entity qualified to do business in
the state in which the Premises is located, and Tenant has full right and
authority to execute and deliver this Estoppel Certificate, and each person
signing on behalf of Tenant is authorized to do so, except as follows:
10. There are no actions pending against Tenant under any bankruptcy or
similar laws of the United States or any state.
11. Other than in compliance with all applicable laws and incidental to
the ordinary course of the use of the Premises, the undersigned has not used or
stored any hazardous substances in the Premises.
12. All tenant improvement work to be performed by Landlord under the
Lease has been completed in accordance with the Lease and has been accepted by
the undersigned, and all reimbursements and allowances due to the undersigned
under the Lease in connection with any tenant improvement work have been paid in
full, except as follows:
13. Tenant acknowledges that this Estoppel Certificate may be delivered to
Landlord, Landlord's Mortgagee or to a prospective mortgagee or prospective
purchaser, and their respective successors and assigns, and acknowledges that
Landlord, Landlord's Mortgagee and/or such prospective mortgagee or prospective
purchaser will be relying upon the statements contained herein in disbursing
loan advances or making a new loan or acquiring the property of which the
Premises are a part and that receipt by it of this certificate is a condition of
disbursing loan advances or making such loan or acquiring such property.
F-2
Executed as of the date first written above.
TENANT:
SYCAMORE NETWORKS, INC.,
a Delaware corporation
By:
----------------------------------
Name:
------------------------------
Title: President/Vice President
By:
------------------------------------
Name:
-------------------------------
Title: Treasurer/Assistant Treasurer
F-3
EXHIBIT G
---------
RENEWAL OPTION
--------------
Provided no Event of Default exists and Tenant is occupying the entire
Premises at the time of such election, Tenant shall have the option to extend
the Term of this Lease for one additional period of five (5) years, by
delivering written notice of the exercise thereof to Landlord not later than
twelve (12) months before the expiration of the Term. The Basic Rent payable
for each month during such extended Term shall be the "FAIR MARKET RENTAL RATE"
(determined as set forth below), at the commencement of such extended Term, for
extensions of leases of space of equivalent quality, condition, size, age,
utility and location, with the length of the extended Term and the credit
standing of Tenant to be taken into account. Within thirty (30) days after
receipt of Tenant's notice to extend but in any event not earlier than fourteen
(14) months prior to the commencement of the five-year extension term, Landlord
shall deliver to Tenant written notice of Landlord's determination of the Fair
Market Rental Rate and shall advise Tenant of the required adjustment to Basic
Rent, if any, and the other terms and conditions offered. Tenant shall, within
ten (10) days after receipt of Landlord's notice, notify Landlord in writing
whether Tenant accepts or rejects Landlord's determination of the Fair Market
Rental Rate. If Tenant timely notifies Landlord that Tenant accepts Landlord's
determination of the Fair Market Rental Rate (and failure of Tenant to notify
Landlord within the time period prescribed above shall be deemed acceptance) or
if, after a timely rejection by Tenant of such determination, the Fair Market
Rental Rate is determined according to the procedures set forth in this Exhibit
-------
G, then, on or before the commencement date of the extended Term, Landlord and
-
Tenant shall execute an amendment to this Lease extending the Term on the same
terms provided in this Lease, except as follows:
(a) Basic Rent shall be adjusted to the Fair Market Rental Rate;
(b) Tenant shall have no further to extend the Term option unless
expressly granted by Landlord in writing; and
(c) Landlord shall lease to Tenant the Premises in their then-current
condition, and Landlord shall not provide to Tenant any allowances (e.g.,
---
moving allowance, construction allowance, and the like) or other tenant
inducements.
If Tenant rejects Landlord's determination of the Fair Market Rental Rate,
Tenant may, but only within ten (10) days after receipt of Landlord's notice,
require by written notice to Landlord that the determination of Fair Market
Rental Rates be made by brokers. In such event, within ten (10) days
thereafter, each party shall select a qualified commercial real estate broker
with at least ten (10) years experience in appraising property and buildings in
the city or submarket in which the Premises are located. The two brokers shall
give their opinion of Fair Market Rental Rates within ten (10) days after their
retention. In the event the opinions of the two brokers differ and, after good
faith efforts over the succeeding ten (10) day period, they cannot mutually
agree, the brokers shall immediately and jointly appoint a third broker with the
qualifications specified above. This
G-1
third broker shall immediately (within five (5) days) choose either the
determination of Landlord's broker or Tenant's broker and such choice of this
third broker shall be final and binding on Landlord and Tenant. Each party shall
pay its own costs for its real estate broker. The parties shall equally share
the costs of any third broker. The parties shall immediately confirm the renewal
term, Basic Rent and the other terms and conditions so determined, in writing.
Tenant's rights under this Exhibit shall terminate if (1) this Lease or
Tenant's right to possession of the Premises is terminated, (2) Tenant assigns
any of its interest in this Lease or sublets any portion of the Premises to any
person other than to a Permitted Transferee, (3) Tenant fails to timely exercise
its option under this Exhibit, time being of the essence with respect to
Tenant's exercise thereof, or (4) Tenant's Tangible Net Worth is less than
$25,000,000.00.
G-2
EXHIBIT H
---------
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
-------------------------------------------------------
This AGREEMENT is made and entered into as of ___________________, 1999,
by and among LaSalle National Bank, as Trustee for GS Mortgage Securities
Corporation II Commercial Mortgage Pass-Through Certificates, Series ▇▇▇▇-▇▇▇▇▇
("▇▇▇▇▇▇"), W9/TIB Real Estate Limited Partnership, a Delaware limited
partnership ("Landlord"), and Sycamore Networks, Inc., a Delaware corporation
("Tenant").
1. RECITALS.
--------
1.1 Mortgage. Lender is the holder of a Promissory Note dated
--------
________________, 19____, in the original principal amount of $_________________
of Landlord, which is secured, inter alia, by a Mortgage and Security Agreement
(the "Mortgage") and Assignment of Lease and Rents (the "Lease Assignment"),
both dated ____________, and recorded with the Middlesex South Registry of Deeds
at Book _____, Pages _____ and _____, respectively, covering premises more
particularly described in the Mortgage (the "Premises").
1.2 Lease. Landlord and Tenant entered into a Lease dated August __,
-----
1999 (the "Lease"), whereby Landlord demised to Tenant the Premises.
2. CONSIDERATION. The terms of the Lease constitute a material inducement
to Lender's consent thereto and entering into and performing this Agreement.
3. SUBORDINATION OF THE LEASE. Subject to the terms of this Agreement,
this Lease shall be and is hereby made subject and subordinate to the Mortgage.
4. NON-DISTURBANCE. Lender shall not, in the exercise of any right,
remedy, or privilege granted by the Mortgage or the Lease Assignment, or
otherwise available to Lender at law or in equity, disturb Tenant's possession
under the Lease so long as:
(a) Tenant is not in default under any provision of the Lease or this
Agreement beyond any applicable notice and/or cure periods at the time Lender
exercises any such right, remedy or privilege; and
(b) The Lease at that time is in force and effect according to its original
terms, or with such amendments or modifications as Lender shall have approved,
if such approval is required by the terms of the Mortgage or the Lease
Assignment; and
(c) Tenant thereafter continues to fully and punctually perform all of its
obligations under the Lease without default thereunder beyond any applicable
cure period; and
H-1
(d) Tenant attorns to or at the direction of Lender, as provided in
Paragraph 5. Without limiting the foregoing, and so long as the foregoing
conditions are met, Lender agrees that (i) Tenant will not be named as a party
to any foreclosure or other proceeding instituted by Lender to enforce the terms
of the Mortgage or the Lease Assignment; (ii) any sale or other transfer of the
Premises or of the Landlord's interest in the Lease, pursuant to foreclosure or
any voluntary conveyance or other proceeding in lieu of foreclosure, will be
subject and subordinate to Tenant's possession under the Lease; and (iii) the
Lease will continue in force and effect according to its original terms, or with
such amendments as Lender shall have approved, if such approval is required by
the terms and conditions of the Mortgage or the Lease Assignment.
5. ATTORNMENT. Tenant shall attorn to Lender, to any receiver or similar
----------
official for the Premises appointed at the instance and request, or with the
consent, of Lender and to any person who acquires the Premises, or the
Landlord's interest in the Lease, or both, pursuant to Lender's exercise of any
right, remedy or privilege granted by the Mortgage, or otherwise at law or in
equity. Without limitation, Tenant shall attorn to any person or entity that
acquired the Premises pursuant to foreclosure of the Mortgage, or by any
proceeding or voluntary conveyance in lieu of such foreclosure, or from Lender,
whether by sale, exchange or otherwise. Any such attornment shall be
conditioned upon Lender or any such person, entity, receiver or other official
complying with the provisions of the next succeeding paragraph.
Upon any attornment under this Paragraph 5, the Lease shall continue in
full force and effect as a direct lease between Tenant and the person, entity,
receiver or other official to whom Tenant attorns, except that such person,
entity, receiver or other official shall not be:
(i) liable for any breach, act or omission of any prior landlord; or
(ii) subject to any offsets, claims or defenses which Tenant might have
against any prior landlord; or
(iii) bound by any rent or additional rent or other payment in lieu of
rent which Tenant might have paid to any prior landlord more than 30 days in
advance of its due date under the Lease or which such person or entity has
physical possession of; or
(iv) bound by any amendment or modification of the Lease made without
Lender's written consent, where such consent is required by the Mortgage; or
(v) bound by any notice given by Tenant to Landlord, whether or not such
notice is given pursuant to the terms of the Lease, unless a copy thereof was
then also given to Lender; or
(vi) liable for any security deposit or other sums held by any prior
landlord, unless actually received.
H-2
The person or entity to whom Tenant attorns shall be liable to Tenant under the
Lease only during such person or entity's period of ownership, and such
liability shall not continue or survive as to the transferor after a transfer by
such person or entity of its interest in the Lease and the Premises.
6. REPRESENTATIONS AND WARRANTIES.
------------------------------
6.1 Landlord and Tenant each hereby represent and warrant to Lender
as follows regarding the Lease:
(a) A true and correct copy of the Lease (inclusive of all riders and
exhibits thereto) is attached to the counterpart of this Agreement being
delivered to Lender. There are no other oral or written agreements,
understandings or the like between Landlord and Tenant relating to the Premises
or the Lease transaction.
(b) The term of the Lease is expected to commence on or about
_____________, 1999.
(c) Under the Lease, Tenant shall be obligated to pay rent without present
right of defense or offset, at the rate of $79,396.00 per month for the first 24
months and $86,300.00 per month for the next 36 months of the Lease term. Rent
is paid through and including N/A, 19__. No rent has been paid more than 30
days in advance, and Tenant has no claim against the Landlord for any deposits
or other sums.
(d) The Lease has not been modified, altered or amended in any respect.
(e) All of the improvements by Landlord contemplated by the Lease have been
entirely completed as required therein.
(f) The addresses for notices to be sent to Tenant and Landlord are as set
forth in the Lease.
(g) To Tenant's knowledge, Tenant has no right of first refusal, option or
other right to purchase the Premises or any part thereof, including, without
limitation, the Demised Premises.
6.2 Several. Landlord and Tenant severally represent and warrant to
-------
Lender with respect to themselves, but not with respect to the other:
(a) The execution of the Lease was duly authorized, the Lease was properly
executed and is in full force and effect and is valid, binding and enforceable
against Tenant and Landlord and there exists no monetary default or, to the best
of their knowledge, no non-monetary default, nor state of facts which with
notice, the passage of time, or both, could ripen into a default, on the part of
either Tenant or Landlord.
(b) There has not been filed by or against nor, to the best of the
knowledge and belief of the representing party, is there threatened against or
contemplated by, Landlord or Tenant, a
H-3
petition in bankruptcy, voluntary or otherwise, any assignment for the benefit
of creditors, any petition seeking reorganization or arrangement under the
bankruptcy laws of the United States or of any state thereof, or any other
action brought under said bankruptcy laws.
(c) There has not been any assignment, hypothecation or pledge of the Lease
or rents accruing under the Lease, other than pursuant to the Mortgage and the
Lease Assignment. Tenant makes the representation set forth in this
subparagraph only to its best knowledge and belief.
7. RENTS. Landlord and Tenant jointly and severally acknowledge that the
-----
Lease Assignment provides for the direct payment to Lender of all rents and
other monies due and to become due to Landlord under the Lease upon the
occurrence of certain conditions as set forth in the Lease Assignment without
Lender's taking possession of the Demised Premises or otherwise assuming
Landlord's position or any of Landlord's obligations under the Lease. Upon
receipt from Lender of written notice to pay all such rents and other monies to
or at the direction of Lender, Landlord authorizes and directs Tenant thereafter
to make all such payments to or at the direction of Lender, releases Tenant of
any and all liability to Landlord for any and all payment so made, and shall
defend, indemnify and hold Tenant harmless from and against any and all claims,
demands, losses, or liabilities asserted by, through or under Landlord (except
by Lender) for any and all payments so made. Upon receipt of such notice,
Tenant thereafter shall pay all monies then due and becoming due from Tenant
under the Lease to or at the direction of Lender, notwithstanding any provision
of the Lease to the contrary. Tenant agrees that neither Lender's demanding or
receiving any such payments, nor Lender's exercising any other right, remedy,
privilege, power or immunity granted by the Mortgage or the Lease Assignment,
will operate to impose any liability upon Lender for performance of any
obligation of Landlord under the Lease, except as set forth in Paragraph 5 of
this Agreement and except as Lender elects otherwise in writing. Such payments
shall continue until Lender directs Tenant otherwise in writing.
Tenant agrees not to pay any rent under the Lease more than 30 days in
advance without Lender's consent. The provisions of this Paragraph 7 will apply
from time to time throughout the term of the Lease.
8. CURE. If Tenant becomes entitled to terminate the Lease or offset,
----
withhold or ▇▇▇▇▇ rents because of any default by Landlord, then Tenant shall
give Lender written notice specifying Landlord's default. Lender then shall
have the right, but not the obligation, to cure the specified default within the
following time periods:
(a) Fifteen days after receipt of such notice with respect to defaults that
can be cured by the payment of money; or
(b) Thirty days after receipt of such notice with respect to any other
default; unless the cure requires Lender to obtain possession of the Demised
Premises, in which case such thirty day period shall not commence until Lender
acquires possession, so long as Lender proceeds promptly to acquire possession
of the Demised Premises with due diligence, by foreclosure of the Mortgage or
otherwise.
H-4
Nothing contained in this Paragraph 8 shall require Lender to commence or
continue any foreclosure or other proceedings, or, if Lender acquires possession
of the Demised Premises, to continue such possession, if all defaults specified
by Tenant in its notice are cured. Possession by a receiver, or other similar
official appointed at the instance, or with the consent, of Lender shall
constitute possession by Lender for all purposes under this Paragraph 8.
9. ESTOPPEL LETTERS. Whenever reasonably requested by Lender, Landlord
----------------
and Tenant from time to time shall severally execute and deliver to or at the
direction of Lender, and without charge to Lender, one or more written
certifications of all of the matters as set forth in Paragraph 6, whether Tenant
has exercised any renewal option or options and any other factual information
the Lender may reasonably require to confirm the current status of the Lease,
including, without limitation, a confirmation that the Lease is and remains
subordinated as provided in this Agreement.
10. CASUALTY AND EMINENT DOMAIN. Landlord and Tenant jointly and
---------------------------
severally agree that the Mortgage permits Lender, at its option, to apply to the
indebtedness from time to time secured by the Mortgage any and all insurance
proceeds payable with respect to any casualty loss at the Demised Premises and
any and all awards or other compensation that may be payable for the
condemnation of all or any portion of the Demised Premises, or any interest
therein, or by way of negotiated settlement or conveyance in lieu of
condemnation; and Landlord and Tenant jointly and severally consent to any such
application by Lender. Notwithstanding the foregoing, Landlord and Lender agree
that any and all insurance or condemnation proceeds payable with respect to
Tenant's property or the interruption or relocation of Tenant's business (except
for rental loss insurance proceeds) will be paid to Tenant, so long as they do
not reduce the proceeds otherwise payable to Lender.
11. NOTICES. All notices, demands, and other communications that must or
-------
may be given or made in connection with this Agreement must be in writing and,
unless receipt is expressly required, will be deemed delivered or made 5 days
after having been mailed by registered or certified mail, return receipt
requested, or by express mail, in any event with sufficient postage affixed, and
addressed to the parties as follows:
TO LENDER: c/o AMRESCO Services, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Private Sector Servicing
TO LANDLORD: W9/TIB Real Estate Limited Partnership
c/o Archon Group, L.P.
▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
H-5
TO TENANT: Prior to Commencement Date: Following the
-------------------------- -------------
Commencement Date:
-----------------
Sycamore Networks, Inc. Sycamore Networks, Inc.
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇ Attn: Corporate Counsel
and a copy at all times to:
▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Real Estate Department
Such addresses may be changed by notice pursuant to this Paragraph 11; but
notice of change of address is effective only upon receipt. Tenant will furnish
Lender with copies of all notices from Tenant to Landlord claiming a default by
Landlord under the Lease, and Landlord will furnish Lender with copies of all
notices from Landlord to Tenant claiming a default by Tenant under the Lease.
All communications to Lender shall reference "AMRESCO Loan No.: __________".
12. SUCCESSORS AND ASSIGNS. As used in this Agreement, the word "Tenant"
----------------------
shall mean Tenant and any subsequent holder or holders of an interest under the
Lease, as the text may require, provided that the interest of such holder is
acquired in accordance with the terms and provisions of the Lease and the word
"Lender" shall mean Lender or any other subsequent holder or holders of the
Mortgage or any party acquiring title to the Premises or Landlord's interest in
the Lease by purchase at a foreclosure sale, by deed of the Lender, or
otherwise. Subject to the foregoing, this Agreement shall bind and inure to the
benefit of Landlord, Tenant and Lender, their legal representatives, successors
and assigns. The terms Lease, Mortgage and Lease Assignment shall include any
and all amendments, modifications, replacements, substitutions, extensions,
renewals and supplements thereto.
13. FURTHER ASSURANCES. Landlord and Tenant from time to time shall
------------------
execute and deliver at Lender's request all instruments that may be necessary or
appropriate to evidence their agreement hereunder provided such instrument
neither increases Tenant's obligations or decreases its rights under the Lease
or this Agreement.
14. COUNTERPARTS. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original and all such
counterparts shall constitute one and the same instrument.
15. SEVERABILITY. A determination that any provision of this Agreement is
------------
unenforceable or invalid shall not affect the enforceability or validity of any
other provision, and any determination that the application of any provision of
this Agreement to any person or to any
H-6
person or to particular circumstances is illegal or unenforceable shall not
affect the enforceability or validity of such provision as it may apply to other
persons or circumstances.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
LENDER:
LASALLE NATIONAL BANK, as Trustee for GS Mortgage Securities Corporation II
Commercial Mortgage Pass-Through Certificates, Series 1998-GSFL1
By: AMRESCO Services, L.P.,
its authorized agent
By: AMRESCO Mortgage Capital, Inc.,
its general partner
By:
----------------------------
Name:
------------------------
Title: Servicing Officer
LANDLORD:
W9/TIB REAL ESTATE LIMITED
PARTNERSHIP, a Delaware limited partnership
By: W9/TIB Gen-Par, Inc., a Delaware
corporation, its general partner
By:
------------------------------
Name:
--------------------------
Title:
-------------------------
TENANT:
SYCAMORE NETWORKS, INC., a Delaware corporation
By:
---------------------------------
Name:
-----------------------------
Title: President/Vice President
By:
---------------------------------
Name:
-----------------------------
Title: Treasurer/Assistant Treasurer
H-7
STATE OF ____________ )
)
COUNTY OF __________ ) _____________ ___, 1999
Then personally appeared the above-named _________________________________,
__________________________________ of AMRESCO Mortgage Capital, Inc., as general
partner of AMRESCO Services, L.P., as authorized agent for LaSalle National
Bank, as Trustee for GS Mortgage Securities Corporation II Commercial Mortgage
Pass-Through Certificates, Series 1998-GSFL1, and acknowledged the foregoing
instrument to be his/her free act and deed and the free act and deed of AMRESCO
Mortgage Capital, Inc., AMRESCO Services, L.P. and LaSalle National Bank, before
me,
____________________________________
(Seal)
Notary Public
My commission expires:
STATE OF ____________ )
)
COUNTY OF __________ ) _____________ ___, 1999
Then personally appeared the above-named _________________________________,
__________________________________ of W9/TIB Gen-Par, Inc., as General Partner
of W9/TIB Real Estate Limited Partnership, and acknowledged the foregoing
instrument to be his/her free act and deed, the free act and deed of W9/TIB Gen-
Par, Inc., and the free act and deed of W9/TIB Real Estate Limited Partnership,
before me,
____________________________________
(Seal)
Notary Public
My commission expires:
STATE OF ____________ )
)
COUNTY OF __________ ) _____________ ___, 1999
Then personally appeared the above-named _________________________________,
__________________________________ of Sycamore Networks, Inc., and acknowledged
the foregoing instrument to be his/her free act and deed and the free act and
deed of Sycamore Networks, Inc., before me,
____________________________________
(Seal)
Notary Public
My commission expires:
H-8
EXHIBIT I
---------
SAMPLE LETTER OF CREDIT
-----------------------
Beneficiary/Landlord: Issuance Date:
W9/TIB Real Estate Limited Partnership, ______________________, 1999
a Delaware limited partnership
c/o Archon Group, L.P. Irrevocable Standby Letter
▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇ of Credit No. _______________
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Applicant/Accountee/Tenant: Credit Amount:
Sycamore Networks, Inc., USD $500,000.00
a Delaware corporation Up to an Aggregate Thereof
▇ ▇▇▇▇ ▇▇▇ Date and Place of Expiry:
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ _______________, 1999
At Our Counters in Boston, MA
Ladies and Gentlemen:
We hereby issue our irrevocable standby letter of credit in your favor for
the account of the Applicant for an aggregate amount not to exceed FIVE HUNDRED
THOUSAND U.S. DOLLARS available for payment by presentation of your draft(s)
drawn on ourselves at sight, and accompanied by the following documents:
1. Your statement/certificate, on your letterhead, signed by a person
purporting to be your authorized officer/representative, appropriately completed
in the following form:
A. "The undersigned, an authorized officer/representative of W9/TIB Gen-
Par, Inc., general partner of W9/TIB Real Estate Limited Partnership (the
"Landlord"), hereby certifies with regard to __________ Irrevocable Standby
Letter of Credit no. __________ that Sycamore Networks, Inc. (the "Tenant") is
in default relative to the Lease Agreement dated August _____, 1999 (the
"Lease") by and between Landlord and Tenant and such default has continued
uncured beyond all applicable notice and grace periods."
OR
B. "We are in receipt of _______________ Notice of Non-Extension of its
letter of credit no. _______________ and Sycamore Networks, Inc. (the "Tenant")
has failed to provide a replacement letter of credit reasonably acceptable to us
as of the date of our drawing and the Tenant remains liable to us pursuant to
the Lease."
2. The original of this letter of credit (for endorsement of drawing),
which will be returned unless the credit is fully utilized.
I-1
Partial drawings are permitted.
We engage with you that all draft(s) drawn under and in compliance with the
terms and conditions of this letter of credit shall be duly honored on
presentation to us at our office at _______________, Boston, MA _______, Attn:
_______________, ____ Floor, on or before the Expiry Date as specified above or
any automatically extended date herein before set forth. Draft(s) must indicate
the name of the issuing bank, the letter of credit number and must be presented
at the office specified in the preceding sentence.
It is a condition of this letter of credit that it shall be deemed
automatically extended without amendment for an additional period of one year
from the present or each future expiration date hereof, but not beyond
_________________ [NOTE: 30 DAYS AFTER THE EXPIRATION OF THE TERM], unless at
least forty-five (45) days prior to any such expiration date we notify you by
certified mail, that we elect not to so extend this letter of credit for any
such additional period. Upon receipt by you of such notice, you may draw
hereunder your draft(s) at sight on ourselves for the then full amount of this
letter of credit accompanied by your statement as specified above.
This letter of credit is transferable in its entirety, but not in part, to
any successor landlord under the Lease and may be successively transferred. If
it is your intention to transfer your interest hereunder, kindly return the
letter of credit to us for appropriate endorsement and furnish us with your
instructions. Please note your signature on your request for transfer must be
authenticated by your bank. (Transfer form is attached.) In the event of
transfer all required documents are to be signed by the transferee.
This letter of credit sets forth in full the terms of our obligations to
you, and our undertaking shall not in any way be amended or amplified by
reference to any documents, instruments or any agreement referred to herein or
to which this letter of credit related, and such reference, if any, shall not be
deemed to incorporate herein by reference any document, instrument or agreement.
Except as otherwise expressly stated herein, this letter of credit is
subject to the International Standby Practices (ISP98), the International
Chamber of Commerce, Publication No. 590, and shall, as to matters not governed
by ISP98, be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts.
Very truly yours,
By:_______________________________
Name:
Title:
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TRANSFER
This form is to be used where a Letter of Credit is transferred
in its entirety and no substitution of invoices is involved.
Date
Re: Credit issued or advised by
-----------------------------
Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably transfers to:
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(Name of Second Beneficiary)
----------------------------------------
(Address)
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(Name of Advising Bank)
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(Address)
all rights of the undersigned beneficiary to draw under the above Letter of
Credit in its entirety.
1. By this transfer, all rights of the undersigned beneficiary in such
Letter of Credit are transferred to the Second Beneficiary and the Second
Beneficiary shall have the sole rights as beneficiary thereof, including sole
rights relating to any amendment, whether increases or extensions or other
amendments and whether now existing or hereafter made. All amendments are to be
advised direct to the Second Beneficiary without necessity of any consent of or
notice to the undersigned beneficiary.
2. The advice of such Letter of Credit is returned herewith, and we ask you to
endorse the transfer on the reverse thereof, and forward it direct to the Second
Beneficiary with your customary notice of transfer, or advise the letter of
credit to the Second Beneficiary by telex/SWIFT.
SIGNATURE AUTHENTICATED Very truly yours,
(Bank)
By:________________________________
(Authorized Signature) Name:
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