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EXHIBIT 10.15
OFFICE LEASE AGREEMENT
Between
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ASSOCIATES
"Landlord"
And
UNIVERSAL ACCESS, INC.
"Tenant"
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TABLE OF CONTENTS
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I. BASIC LEASE INFORMATION; DEFINITIONS 1
II. LEASE GRANT 3
III. ADJUSTMENT OF COMMENCEMENT DATE/POSSESSION 4
IV. RENT 4
V. USE 10
VI. SECURITY DEPOSIT 11
VII. SERVICES TO BE FURNISHED BY LANDLORD 12
VIII. LEASEHOLD IMPROVEMENTS 13
IX. GRAPHICS 13
X. REPAIRS AND ALTERATIONS 14
XI. USE OF ELECTRICAL SERVICES BY TENANT 16
XII. ENTRY BY LANDLORD 17
XIII. ASSIGNMENT AND SUBLETTING 17
XIV. LIENS 19
XV. INDEMNITY AND WAIVER OF CLAIMS 19
XVI. TENANT'S INSURANCE 21
XVII. SUBROGATION 22
XVIII. LANDLORD'S INSURANCE 22
XIX. CASUALTY DAMAGE 23
XX. INTENTIONALLY OMITTED 24
XXI. CONDEMNATION 24
XXII. EVENTS OF DEFAULT 24
XXIII. REMEDIES 26
XXIV. LIMITATION OF LIABILITY 27
XXVI. EVENT OF BANKRUPTCY 28
XXVII. WAIVER OF JURY TRIAL 29
XXVIII. LANDLORD'S ALLOWANCE AND INITIAL IMPROVEMENTS 29
XXIX. HOLDING OVER 30
XXXI. ATTORNEYS' FEES 31
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XXXII. NOTICE 32
XXXIII. ESTOPPEL CERTIFICATES 32
XXXIV. LANDLORD'S LIEN 32
XXXV. EXCEPTED RIGHTS 33
XXXVI. SURRENDER OF PREMISES 34
XXXVII. PARKING 34
XXVIII. ACCESS 35
XXXX. RENEWAL OPTION TERMS 38
XXXXI. ENTIRE AGREEMENT 39
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OFFICE LEASE AGREEMENT
This Office Lease Agreement (the "Lease") is made and entered into as
of the _____ day of March, 1999 by and between ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ASSOCIATES, a
District of Columbia limited partnership ("Landlord") and UNIVERSAL ACCESS,
INC., an Illinois corporation duly qualified to transact business in the
District of Columbia ("Tenant").
I. BASIC LEASE INFORMATION; DEFINITIONS.
A. The following are some of the basic lease information and defined
terms used in this Lease.
1. "Additional Base Rental" shall mean Tenant's Pro Rata Share of
Basic Costs and any other sums (exclusive of Base Rental) that are required to
be paid by Tenant to Landlord hereunder, which sums are deemed to be additional
rent under this Lease. Additional Base Rental and Base Rental are sometimes
collectively referred to herein as "Rent."
2. "Base Rental" shall mean the sums that Tenant is required to pay
to Landlord in accordance with the following schedule (assuming a Rentable Area
of the Premises in an amount equal to 7,680 square feet):
Basic Rent
Lease Year Annual Monthly
1 $ 145,920.00 $ 12,160.00
2 $ 150,297.60 $ 12,524.80
3 $ 154,806.53 $ 12,900.54
4 $ 159,450.72 $ 13,287.56
5 $ 164,234.25 $ 13,686.19
6 $ 187,274.25 $ 15,606.19
7 $ 192,892.48 $ 16,074.37
8 $ 198,679.25 $ 16,556.60
9 $ 204,639.63 $ 17,053.30
10 $ 210,778.82 $ 17,564.90
Base Rental shall commence to be payable as of the Lease Commencement
Date. If the Lease Commencement Date does not occur on the 1st day of a calendar
month, the installment of Base Rental for such partial calendar month shall be
appropriately adjusted on a per diem basis assuming a thirty (30) day calendar
month.
3. "Building" shall mean the office building located at ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇, commonly known as ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
4. The "Lease Term" shall mean a period of one hundred twenty (120)
full months plus the partial month of May, 1999 commencing on the 19th day of
May, 1999 (the "Commencement Date") and ending on May 31, 2009 unless extended
pursuant to Article XXXX below. The "Termination Date" shall, unless sooner
terminated as provided herein, mean the last day of the Lease Term.
Notwithstanding the foregoing, if the Termination Date, as determined herein,
does not occur on the last day of a calendar month, the Lease Term shall be
extended by the number of days necessary to cause the Termination Date to occur
on the last day of the last calendar month of the Lease Term.
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Tenant shall pay Base Rental and Additional Base Rental for such additional days
at the same rate payable for the portion of the last calendar month immediately
preceding such extension. The term "Lease Year" shall refer to each consecutive
twelve (12) month period commencing with the Commencement Date (if such date is
the 1st day of a calendar month) or on the first day of the calendar month in
which such Commencement Date shall occur (if such date is other than on the
first day of a calendar month) and each successive anniversary thereof;
provided, however that the first Lease Year shall commence as of the
Commencement Date.
5. "Premises" shall mean the area located on the first (1st) floor
of the Building, as outlined on Exhibit A attached hereto. Landlord and Tenant
hereby stipulate and agree that the "Rentable Area of the Premises" shall mean
7,680 square feet (inclusive of a 10% core factor) and the "Rentable Area of the
Building for Taxes" shall mean 481,554 square feet of office and retail space
and the "Rentable Area of the Building for Expenses" shall mean 481,554 square
feet.
6. "Permitted Use" shall mean general office use with the right to
conduct therein the licensing of the right to operate, maintain, repair and
replace internet telecommunications and other electronic equipment.
7. "Security Deposit" shall mean the sum of One Hundred Thousand
Dollars ($100,000.00) which at Tenant's option may be in cash or by irrevocable
letter of credit as more fully described in Article VI below.
8. "TENANT'S Pro Rata Share" shall mean one and six tenths percent
(1.6%), which is the quotient (expressed as a percentage), derived by dividing
the Rentable Area of the Premises by the Rentable Area of the Building (i.e.
7,680/481,554). "Tenant's Pro Rata Share of Additional Base Rental" shall mean
the sum of (x) the product obtained by multiplying (1) Tenant's Pro Rata Share
by (2) Expenses (defined below) for a particular year plus (y) the product
obtained by multiplying (1) Tenant's Pro Rata Share by (2) Taxes paid by
Landlord in such year. It is expressly recognized by the parties that the Base
Rental be net to Landlord and that Tenant pay its Pro Rata Share of all Taxes
and Expenses without regard to any base year Expenses or base year Taxes. The
respective computations under (x) and (y) above shall be computed separate and
independent of each other.
9. "Guarantor(s)" shall mean any party that agrees in writing to
guarantee the Lease. As of the date hereof, there are no Guarantors of this
Lease.
10. "Notice Addresses" shall mean the following addresses for Tenant
and Landlord, respectively:
Landlord: c/o S. C. ▇▇▇▇▇▇ & Associates, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Tenant: Before the Commencement Date:
Universal Access, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
After the Commencement Date:
c/o the Premises
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Payments of Rent only shall be made payable to the order of:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Associates
c/o S.C. ▇▇▇▇▇▇ & Associates, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
B. The following are additional definitions of some of the defined
terms used in the Lease.
1. "Basic Costs" shall mean all costs and expenses paid or incurred
in connection with operating; maintaining, repairing, managing and owning the
Building and the Property, as further described in Article IV hereof.
2. "Brokers" mean: ▇▇▇▇ ▇▇▇▇▇▇▇ & Co. and ▇▇▇▇▇▇▇ Corporate Real
Estate, Inc. ("Tenant's Broker") and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Commercial Realty
("Landlord's Broker").
3. "Building Standard" shall mean the type, grade, brand, quality
and/or quantity of materials Landlord reasonably designates from time to time to
be the minimum quality and/or quantity to be used in the Building.
4. "Business Day(s)" shall mean Mondays through Fridays exclusive of
those holidays ("Holidays") recognized as federal holidays within the District
of Columbia.
5. "Common Areas" shall mean those areas provided for the common use
or benefit of all tenants of the Building generally and/or the public, such as
corridors, elevator foyers, common mail rooms, restrooms, vending areas, lobby
areas (whether at ground level or otherwise) and other similar facilities.
6. "Expenses" shall mean all Basic Costs other than Taxes.
7. "Initial Leasehold Improvements" shall mean the work that Tenant
caused to be performed within the Premises prior to the expiration of thirty
(30) days following the Commencement Date and/or any additional alterations
performed by Tenant within the Premises for which Tenant intends to apply the
Tenant Allowance towards the payment thereof, in all such instances to be
performed pursuant to the Plans to be first approved by Landlord.
8. "Maximum Rate" shall mean the lesser of (i) eighteen percent
(18%) per annum or (ii) the maximum per annum rate of interest permitted from
time to time under applicable law.
9. "Normal Business Hours" for the Building shall mean 7:00 A.M. to
6:00 P.M. Mondays through Fridays, exclusive of Holidays.
10. "Property" shall mean the Building and the parcel(s) of land on
which it is located and, at Landlord's discretion, the Building garage, if any,
and all other improvements owned by Landlord and serving the Building and the
tenants thereof and the parcel(s) of land on which they are located.
II. LEASE GRANT.
Subject to and upon the terms herein set forth, Landlord leases to
Tenant and Tenant leases from Landlord the Premises, together with the right, in
common with others, to use the Common Areas.
III. ADJUSTMENT OF COMMENCEMENT DATE/POSSESSION.
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A. The Lease Term, Commencement Date and Termination Date have been
determined in accordance with subsection I.A.4. above.
B. By taking possession of the Premises, Tenant is deemed to have
accepted the Premises and agreed that the Premises is in satisfactory condition,
with no representation or warranty by Landlord as to the condition of the
Premises or the Building or suitability thereof for Tenant's use except as
expressly set forth in this Lease. Notwithstanding the foregoing, should Tenant
elect to have Landlord remove the existing HVAC system from within the Premises,
Landlord shall perform such removal in a diligent manner promptly following
execution of this Lease at no cost or expense to Tenant.
C. Inasmuch as Tenant plans to perform its Initial Leasehold
Improvements within the Premises prior to the Commencement Date, such possession
of the Premises shall be subject to all the terms and conditions of the Lease,
with the understanding, however that no Base Rental nor Additional Base Rental
shall be payable to Landlord prior to the Commencement Date. Tenant shall,
however, be liable for the cost of any services (e.g. utilities or HVAC or
access requirements) (recognizing that there shall be no special charge for use
of the freight or loading dock of the Building during Normal Business Hours)
that are requested by Tenant or are provided by Landlord to the Premises or
within the Building as a result of Tenant's activities during the period of
Tenant's possession of the Premises prior to the Commencement Date. The initial
charge by Landlord for overtime services in order to enable Tenant to access
such areas shall be $75.00 per hour, for a minimum of four (4) hours. In the
event the costs to Landlord shall increase subsequent to the date hereof to
provide such services, Landlord shall be entitled to adjust the $75.00 per hour
charge to reflect Landlord's reasonable estimate of such increase. It is
understood and agreed by the parties that Landlord shall deliver possession of
the Premises to Tenant immediately following execution of this Lease by both
parties, in order to permit Tenant to perform its Initial Leasehold
Improvements. In addition, promptly following execution of this Lease, and
provided Tenant provides no less than one Business Days advance notice to
Landlord, Landlord agrees that Tenant, its architects, engineers, employees,
agents and contractors shall be afforded reasonable access during Normal
Business Hours or anytime other than Normal Business Hours (if so requested by
Tenant) to the Premises, and the Common Areas, together with the rooftop and
other portions of the Building (excluding portions occupied by other tenants) in
order to design, construct and install, as necessary, the Initial Leasehold
Improvements. However, nothing herein shall be construed as granting Tenant the
right to commence performance of its Initial Leasehold Improvements prior to
Landlord's written approval thereof and written approval of the licensed
contractor proposed to be engaged by Tenant for such purposes. Landlord shall
not unreasonably withhold, condition or delay its approval required under the
immediately preceding sentence, or of any items proposed by Tenant to be made as
part of the Initial Leasehold Improvements or the proposed contractor. Tenant
shall be required to deliver certificates of insurance naming Landlord as an
additional insured from all contractors prior to commencement by such
contractors of work or services at the Building, which insurance shall be at
limits consistent with industry standards for similar work.
IV. RENT.
A. During each calendar year, or portion thereof, falling within the
Lease Term, Tenant shall pay to Landlord the Base Rental. The Base Rental shall
be payable in equal monthly installments during the Lease Term, commencing as of
the Commencement Date. In the event the Commencement Date shall occur on other
than the first day of a calendar month, the Base Rental, and if applicable, the
Additional Base Rental, shall be pro-rated for such month based upon a thirty
(30) day month.
Tenant covenants and agrees to also pay during the Lease Term as
Additional Base Rental hereunder Tenant's Pro-Rata Share of Additional Base
Rental. Prior to the first anniversary of the Commencement Date, and prior to
January 1 of each subsequent calendar year during the Lease Term, or as soon
thereafter as practical,
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Landlord shall provide to Tenant the reasonably estimated amount of Tenant's
Pro-Rata Share of Additional Base Rental (the "Estimate") for the applicable
calendar year. On or before the first day of each month during such calendar
year, Tenant shall pay to Landlord, as Additional Base Rental, a monthly
installment equal to one-twelfth of the Estimate. Landlord shall have the right
from time to time during any such calendar year to revise the reasonable
Estimate to be paid by Tenant for such year to reflect a new reasonable
Estimate, and provide Tenant with a revised statement therefor, and thereafter
the amount Tenant shall pay each month shall be based upon such revised
Estimate. If Landlord does not provide Tenant with an Estimate by January 1 of
any calendar year, Tenant shall continue to pay a monthly installment based on
the previous year's Estimate until such time as Landlord provides Tenant with an
Estimate for the current year. Upon receipt of such current year's Estimate, an
adjustment shall be made for any month during the current year with respect to
which Tenant paid monthly installments of Additional Base Rental based on the
previous year's Estimate. Tenant shall pay Landlord any underpayment within ten
(10) days after demand. Any overpayment shall, at Landlord's option, be refunded
to Tenant within ten (10) days from the date determined by Landlord or credited
against the installment of Additional Base Rental due for the months immediately
following the furnishing of such estimate; provided that in the event Tenant
shall then be in default hereunder, Landlord shall be entitled to apply any such
overpayment on account of other sums then due to Landlord. Any amounts paid by
Tenant based on any Estimate shall be subject to adjustment pursuant to the
immediately following paragraph when actual Expenses are determined for such
calendar year.
As soon as is practical following the end of each calendar year during
the Lease Term, Landlord shall furnish to Tenant a statement of Landlord's
actual Basic Costs and the actual amount of Tenant's Pro-Rata Share of
Additional Base Rental for the previous calendar year. If the amount of the
Estimate actually paid by Tenant for the prior year is in excess of the amount
of Tenant's Pro-Rata Share of Additional Base Rental for such prior year, then
Landlord shall apply such overpayment against Additional Base Rental due or to
become due hereunder, provided if the Lease Term expires prior to the
determination of such overpayment, Landlord shall refund such overpayment to
Tenant after first deducting the amount of any Rent due hereunder. Likewise,
Tenant shall pay to Landlord, within ten (10) days after demand, any
underpayment with respect to the prior year, whether or not the Lease has
terminated prior to receipt by Tenant of a statement for such underpayment, it
being understood that this clause shall survive the expiration of the Lease.
Tenant's Pro Rata Share of Additional Base Rental for any partial calendar year
shall be determined by multiplying the amount of Tenant's Pro Rata Share of
Additional Base Rental for the full calendar year by a fraction, the numerator
of which is the number of days during such calendar year falling within the
Lease Term and the denominator of which is 365.
B. Basic Costs shall mean all costs and expenses paid or incurred in
each calendar year in connection with operating, maintaining, repairing,
managing and owning the Building and the Property, [except to the extent
expressly limited below in the case of the items described in subsections (6)
and (9) below] including, but not limited to, the following:
1. All labor costs for all persons performing services required or
utilized in connection with the operation, repair, replacement and maintenance
of and control of access to the Building and the Property, including but not
limited to amounts incurred for wages, salaries and other compensation for
services, payroll, social security, unemployment and other similar taxes,
workers' compensation insurance, uniforms, training, disability benefits,
pensions, hospitalization, retirement plans, group insurance or any other
similar or like expenses or benefits.
2. All management fees, the cost of equipping and maintaining a
management office at the Building, accounting services, legal fees not
attributable to leasing and collection activity, and all other administrative
costs relating to the Building and the Property. If management services are not
provided by a third party, Landlord shall be
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entitled to a management fee comparable to that due and payable to third parties
provided Landlord or management companies owned by, or management divisions of,
Landlord perform actual management services of a comparable nature and type as
normally would be performed by third parties with the understanding; however,
that in the event Landlord or an entity owned or controlled by Landlord or
parties owning no less than 51% of the ownership interests in Landlord shall
receive such management fee, Landlord shall waive any general overhead of
Landlord as to general management of the Building for which Landlord receives
such management fee, including, overhead charges for services such as
accounting, secretarial, bookkeeping, office rent for the management office,
office furniture, supplies and equipment.
3. All rental and/or purchase costs of materials, supplies, tools
and equipment used in the operation, repair, replacement and maintenance and the
control of access to the Building and the Property.
4. All amounts charged to Landlord by contractors and/or suppliers
for services, replacement parts, components, materials, equipment and supplies
furnished in connection with the operation, repair, maintenance, replacement of
and control of access to any part of the Building, or the Property generally,
including the heating, air conditioning, ventilating, plumbing, electrical,
elevator and other systems and equipment. At Landlord's option, major repair
items may be amortized over a period of up to five (5) years.
5. All premiums and deductibles paid by Landlord for fire and
extended coverage insurance, earthquake and extended coverage insurance,
liability and extended coverage insurance, rental loss insurance, elevator
insurance, boiler insurance and other insurance customarily carried from time to
time by landlords of comparable office buildings or required to be carried by
Landlord's Mortgagee.
6. Charges for all utilities, including but not limited to water,
electricity, gas and sewer, to the extent provided to the common areas of the
Building located on the first floor.
7. "Taxes," which for purposes hereof, shall mean: (a) all real
estate taxes and assessments on the Property, the Building or the Premises, and
taxes and assessments levied in substitution or supplementation in whole or in
part of such taxes, (b) all personal property taxes for the Building's personal
property, including license expenses, (c) all taxes imposed on services of
Landlord's agents and employees, (d) all other taxes, fees or assessments now or
hereafter levied by any governmental authority on the Property, the Building or
its contents or on the operation and use thereof (except as relate to specific
tenants), (e) all amounts paid to any business improvement district by Landlord
and (f) all costs and fees incurred in connection with seeking reductions in or
refunds in Taxes including, without limitation, any costs incurred by Landlord
to challenge the tax valuation of the Building or to sustain a proposed
assessment by reason of a challenge thereto from a citizens group or other
entity, but excluding income taxes, estate taxes, inheritance taxes or any other
tax computed based upon the net income (as opposed to gross receipts or gross
income) of Landlord. Taxes shall exclude any interest or penalties arising by
reason of the late payment of same. For the purpose of determining real estate
taxes and assessments for any given calendar year, the amount to be included in
Taxes for such year shall be as follows: (1) with respect to any special
assessment that is payable in installments, Taxes for such year shall include
the amount of the installment (and any interest) due and payable during such
year; and (2) with respect to all other real estate taxes, Taxes for such year
shall, at Landlord's election, include either the amount accrued, assessed or
otherwise imposed for such year or the amount due and payable for such year,
provided that Landlord's election shall be applied consistently throughout the
Lease Term. If a reduction in Taxes is obtained for any year of the Lease Term
during which Tenant paid its Pro Rata Share of Basic Costs, then Basic Costs for
such year will be retroactively adjusted and Landlord shall provide Tenant with
a credit, if any, based on such adjustment. Tenant shall pay to Landlord
Tenant's Pro Rata Share of any such increase in Tenant's Pro Rata Share of Basic
Costs within thirty (30) days after Tenant's receipt of a statement therefor
from Landlord.
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8. All landscape expenses and costs of maintaining, repairing,
resurfacing and striping of the parking areas and garages of the Property, if
any.
9. Cost of all maintenance service agreements, including those for
equipment, alarm service, window cleaning, drapery or venetian blind cleaning,
janitorial services, pest control, uniform supply, plant maintenance,
landscaping, and any parking equipment. However, costs of cleaning and
janitorial services to any tenanted portions of the Building or to any common
areas other than those on the first floor of the Building shall be excluded.
10. Cost of all other repairs, replacements and general maintenance
of the Property and Building neither specified above nor directly billed to
tenants.
11. The amortized cost of capital improvements made to the Building
or the Property which are: (a) primarily for the purpose of reducing operating
expense costs or otherwise improving the operating efficiency of the Property or
Building; or (b) required to comply with any laws, rules or regulations of any
governmental authority first applicable to the Property or Building subsequent
to the date hereof or a requirement of Landlord's insurance carrier. The cost of
such capital improvements (herein referred to collectively as "Permitted Capital
Expenditures") shall be amortized over the estimated useful life of such capital
improvement and shall, at Landlord's option, include interest at a rate that is
reasonably equivalent to the interest rate that Landlord would be required to
pay to finance the cost of the capital improvement in question as of the date
such capital improvement is performed provided if the payback period for any
capital improvement is less than five (5) years, Landlord may amortize the cost
of such capital improvement over the payback period.
12. Cost to furnish or maintain lobby attendants, security services
or personnel for the Building.
13. Any other expense or charge of any nature whatsoever which, in
accordance with general industry practice with respect to the operation of a
building reasonably deemed by Landlord to be of similar class, size, age and
location as the Building, would be construed as an operating expense,
recognizing the express exceptions above in sections (6) and (9).
Basic Costs shall not include the cost of capital improvements (except
as set forth above and as distinguished from replacement parts or components
purchased and installed in the ordinary course), depreciation, lease
commissions, and interest or principal payments on mortgages of Landlord and
other non-operating debts of Landlord; amounts paid to any person, firm or
corporation related to or otherwise affiliated with Landlord or its management
company or any general partner or member of Landlord, or any management fees
whether paid to a related or otherwise affiliated party or not, but which are in
excess of arms-length competitive prices paid in the Washington, D.C.
metropolitan area for the services or goods provided; ground rent payments to
any ground lessor; and the costs of any items for which Landlord (a) is
reimbursed by insurance or parties other than tenants of the Building pursuant
to operating expense provisions included in their respective lease or (b) would
have been covered by insurance proceeds had Landlord maintained the insurance
required to be maintained by Landlord under this Lease. If the Building is not
at least ninety-five percent (95%) occupied during any calendar year of the
Lease Term (including the Base Year) or if Landlord is not supplying services to
at least ninety-five percent (95%) of the total Rentable Area of the Building at
any time during any calendar year of the Lease Term, actual Basic Cost (other
than Taxes) for purposes hereof shall, at Landlord's option, be determined as if
the Building had been ninety-five percent (95%) occupied and Landlord had been
supplying services to ninety-five percent (95%) of the Rentable Area of the
Building during such year. Any necessary extrapolation of Basic Costs under this
Article shall be performed by adjusting the cost of those components of Basic
Costs that are impacted by changes in the occupancy of the Building to the cost
that would have been incurred if the Building had been ninety-five percent (95%)
occupied and Landlord had been supplying services to ninety-five percent (95%)
of the Rentable Area
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of the Building (recognizing, however that there shall be no such gross-up for
any electricity or char or cleaning services to the extent same are excluded
from the definition of "Basic Costs" above). For example, if at any time during
any calendar year, any part of the Building is leased to a tenant (hereinafter
referred to as a "Special Tenant") who, in accordance with the terms of its
lease, provides its own utilities, cleaning and janitorial services or other
services or is not otherwise required to pay a share of Basic Costs in
accordance with the methodology set forth in this Article, and therefore
Landlord does not incur the cost of such services, Basic Costs for such calendar
year shall be increased by the additional costs for cleaning and janitorial
services and such other applicable expenses as reasonably estimated by Landlord
that would have been incurred by Landlord if Landlord had furnished and paid for
cleaning and janitorial services and such other services for the space occupied
by the Special Tenant, or if Landlord had included such costs in "Basic Costs",
as defined in the Special Tenant's lease.
Basic Costs shall not include the following items:
(i) Any Capital Expenditures, including any capital replacement,
capital repair or capital improvement made to the Building,
the Common Areas, the land or the Project and any other
expense which would be deemed to be a capital expenditure
under generally accepted accounting principles, consistently
applied, other than (1) the Permitted Capital Expenditures
(defined above) or (2) costs for replacement parts or
components purchased and installed in the ordinary course.
(ii) Depreciation or amortization of the Building or its contents
or components except as expressly permitted in this Lease;
(iii) Expenses incurred in leasing or obtaining new tenants or
retaining existing tenants, including leasing commissions,
legal expenses, advertising or promotion; costs incurred by
Landlord to assume existing leases or subleases of any new
tenants; costs to alter, change or renovate any tenant space
in the Building required to lease such space to a new tenant
or in connection with any renewal or extension of an
existing lease;
(iv) Interest (other than interest under Permitted Capital
Expenditures above), principal or other costs, including
legal fees, associated with any mortgage, loan or
refinancing of the land, the Building, or the Common Areas,
as well as costs directly incurred in order to effect or
negotiate any sale or change of ownership of the Building,
such as attorneys' fees, title insurance premiums, and
recording costs;
(v) Any personal property taxes of the Landlord for equipment or
items not used directly in the operation or maintenance of
the Building;
(vi) Contributions to reserves;
(vii) All bad debt loss, rent loss, or reserve for bad debt or
rent loss;
(viii) Any other cost or expense which, under generally accepted
accounting principles consistently applied or under
prevailing local management practices, would not be
considered to be an Expense of the Building.
(ix) Any unfunded pension or other benefits for personnel
accruing for periods prior to the Commencement Date;
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(x) Interest or penalties incurred by reason of late payment,
unless Tenant has failed to timely pay its Base Rental or
Additional Base Rent hereunder during the thirty (30) day
period preceding the due date the particular Expense or Tax
upon which such interest or penalty is assessed;
(xi) Payments for rented equipment, the cost of which if
purchased would be excluded above;
(xii) Compensation of clerks or attendants in concessions operated
for profit by Landlord or any affiliate in the Building;
(xiii) Items includable in Taxes (as defined below) so as to avoid
duplication;
(xiv) Franchise, transfer, inheritance, or capital stock taxes, or
any other tax measured by the net income earned by Landlord;
(xv) Costs of repairs, restoration, replacements or other work
occasioned by (A) fire, windstorm or other casualty (whether
such destruction be total or partial) for which Landlord is
compensated from insurance or would have been compensated
from had Landlord complied with it insurance obligations
under this Lease and (B) the exercise by governmental
authorities of the right of eminent domain (whether such
taking be total or partial);
(xvi) legal fees paid or incurred in connection with litigation
with tenants for any defaults under their leases and any
legal fees paid or incurred in leasing space to tenants (but
not any reasonable legal fees directly relating to the
maintenance, operation or repair of the Building);
(xvii) costs incurred by Landlord which are associated with the
operation of the business of the legal entity which
constitutes Landlord as the same is separate and apart from
the cost of the operation of the Building, including legal
entity formation and maintenance charges, legal entity
accounting (including the incremental accounting fees
relating to the operation of the Building to the extent
incurred separately in reporting operating results to the
Building's owners or lenders), and legal fees (other than
with respect to Building operations properly includable in
Basic Costs);
(xviii) amounts paid to any person, firm or corporation related to
or otherwise affiliated with Landlord or its management
company or any general partner or member of Landlord, or any
management fees whether paid to a related or otherwise
affiliated party or not, but which are in excess of
arms-length competitive prices paid in the Washington, D.C.
metropolitan area for the services or goods provided;
(xix) Ground rent payments to any ground lessor; and
(xx) the costs of any items for which Landlord (a) is reimbursed
by insurance or parties other than tenants of the Building
pursuant to operating expense provisions included in their
respective lease or (b) would have been covered by insurance
proceeds had Landlord maintained the insurance required to
be maintained by Landlord under this Lease.
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(xxi) Costs of asbestos abatement and removal;
(xxii) Management fees in excess of four percent (4%) of the gross
rents of the Building while such services are provided by an
affiliate of Landlord or Landlord.
C. Tenant covenants and agrees to pay to Landlord during the Lease
Term, without any setoff or deduction whatsoever, the full amount of all Base
Rental and Additional Base Rental due hereunder. In addition, Tenant shall pay
and be liable for, as additional rent, all rental, sales and use taxes or other
similar taxes, if any, levied or imposed by any city, state, county or other
governmental body having authority to the extent such taxes are imposed upon any
of the rentals payable under this Lease, such payments to be in addition to all
other payments required to be paid to Landlord by Tenant under the terms and
conditions of this Lease. Any such payments shall be paid concurrently with the
payments of the Rent on which the tax is based. The Base Rental, Tenant's Pro
Rata Share of Additional Base Rental and any recurring monthly charges due
hereunder shall be due and payable in advance on the first day of each calendar
month during the Lease Term without demand, provided that the installment of
Base Rental for the first full calendar month of the Lease Term shall be payable
upon the execution of this Lease by Tenant. All other items of Rent shall be due
and payable by Tenant on or before ten (10) days after billing by Landlord. If
the Lease Term commences on a day other than the first day of a calendar month
or terminates on a day other than the last day of a calendar month, then the
monthly Base Rental and Tenant's Pro Rata Share of Basic Costs for such month
shall be prorated for the number of days in such month occurring within the
Lease Term based on a fraction, the numerator of which is the number of days of
the Lease Term that fell within such calendar month and the denominator of which
is thirty (30). All such payments shall be by a good and sufficient check. No
payment by Tenant or receipt or acceptance by Landlord of a lesser amount than
the correct amount of Rent due under this Lease shall be deemed to be other than
a payment on account of the earliest Rent due hereunder, nor shall any
endorsement or statement on any check or any letter accompanying any check or
payment be deemed an accord and satisfaction, and Landlord may accept such check
or payment without prejudice to Landlord's right to recover the balance or
pursue any other available remedy. The acceptance by Landlord of any Rent on a
date after the due date of such payment shall not be construed to be a waiver of
Landlord's right to declare a default for any other late payment. Tenant's
covenant to pay Rent shall be independent of every other covenant set forth in
this Lease.
D. All Rent not paid when due and payable shall bear interest from the
date due until paid at the Maximum Rate. In addition, if Tenant fails to pay any
installment of Rent within five (5) days when due and payable hereunder, a
service fee equal to five percent (5%) of such unpaid amount will be due and
payable immediately by Tenant to Landlord.
V. USE.
The Premises shall be used for the Permitted Use and for no other
purpose. Tenant agrees not to use or permit the use of the Premises for any
purpose which is illegal, dangerous to life, limb or property or which, in
Landlord's reasonable opinion, creates a nuisance or which would increase the
cost of insurance coverage with respect to the Building. Tenant shall conduct
its business and control its agents, servants, contractors, employees,
customers, licensees, and invitees in such a manner as not to interfere with,
annoy or disturb other tenants, or in any way interfere with Landlord in the
management and operation of the Building. Tenant will maintain the Premises in a
clean and healthful condition, and comply with all laws, ordinances, orders,
rules and regulations of any governmental entity with reference to the operation
of Tenant's business and to the use, condition, configuration or occupancy of
the Premises, including without limitation, the Americans with Disabilities Act
(collectively referred to as "Laws"). Tenant, within ten (10) days after receipt
thereof, shall provide Landlord with copies of any notices it receives with
respect to a violation or alleged violation of any Laws. Tenant will comply with
the rules
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and regulations of the Building attached hereto as Exhibit B and such other
rules and regulations adopted and altered by Landlord from time to time and will
cause all of its agents, servants, contractors, employees, customers, licensees
and invitees to do so. Landlord agrees to use reasonable efforts to uniformly
enforce such rules and regulations among those tenants of the Building similarly
affected.
VI. SECURITY DEPOSIT.
Simultaneously with Tenant's execution of this Lease, Tenant shall
deposit with Landlord the Security Deposit (as set forth in Section I.A.7) as a
security deposit which shall be security for the performance by Tenant of all of
Tenant's obligations, covenants, conditions and agreements under this Lease.
Landlord shall not be required to maintain such security deposit in a separate
account. Except as may be required by law, Tenant shall not be entitled to
interest on the security deposit. However, in the event the Security Deposit is
in the form of cash at anytime during the Term, such Security Deposit, while
held by Landlord during the Term, shall accrue interest at the rate of four
percent (4%) per annum. Unless otherwise below expressly provided, within
approximately thirty (30) days after the later of the expiration or earlier
termination of the Lease Term or Tenant's vacating the Premises, Landlord shall
return such security deposit to Tenant, less such portion thereof as Landlord
shall have appropriated to satisfy any of Tenant's obligations, or any default
by Tenant, under this Lease. If there shall be any default under this Lease by
Tenant, then Landlord shall have the right, but shall not be obligated, to use,
apply or retain all or any portion of the security deposit for the payment of
any (a) Base Rental, Additional Rental or any other sum as to which Tenant is in
default, or (b) amount Landlord may spend or become obligated to spend, or for
the compensation of Landlord for any losses incurred, by reason of Tenant's
default (including, but not limited to, any damage or deficiency arising in
connection with the reletting of the Premises). If any portion of the security
deposit is so used or applied, then within three (3) business days after
Landlord gives written notice to Tenant of such use or application, Tenant shall
deposit with Landlord cash in an amount sufficient to restore the security
deposit to the original Security Deposit, and Tenant's failure to do so shall
constitute an Event of Default under this Lease.
At Tenant's option, the Security Deposit may be in the form of an
unconditional and irrevocable letter of credit, consistent with the provisions
set forth below pertaining to letters of credit and issued by a commercial bank
with offices in the Washington, D.C. metropolitan area reasonably acceptable to
Landlord or by ▇▇▇▇ ▇▇▇▇▇▇ Bank. Any letter of credit delivered hereunder by
Tenant shall be issued in favor of Landlord. The letter of credit shall be
payable to Landlord on sight and shall have an initial expiration date of no
sooner than December 31, 2000. In addition, in the event the issuer of the
Letter of Credit shall be either closed or taken over by a federal or state
regulatory agency or board, or Landlord shall reasonably determine that such
issuer may likely be closed or taken over by a federal or state regulatory
agency or board, and the Landlord shall be advised or shall reasonably determine
that the Letter of Credit may not be able to be drawn against, Tenant shall
within ten (10) days from written demand by Landlord either replace the Letter
of Credit with an alternate Letter of Credit or substitute cash. The letter of
credit shall also contain such other terms and conditions as shall be reasonably
acceptable to Landlord.
Notwithstanding any provision contained herein to the contrary,
provided Tenant shall have timely paid the Base Rental and Additional Rent
required to be paid hereunder, and there shall not have occurred any uncured
Event of Default prior to November 30, 2000, Landlord agrees to return to Tenant
the Deposit no later than December 15, 2000 whereupon Tenant shall have no
further obligation to maintain a security deposit under this Lease.
VII. SERVICES TO BE FURNISHED BY LANDLORD.
A. Landlord, as part of Basic Costs (except as otherwise provided),
agrees to furnish Tenant the following services:
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1. Hot and cold water for use in the lavatories on the floor on
which the Premises is located, with hot water provided during normal Business
Hours only. If Tenant desires water in the Premises for any approved reason,
including a private lavatory or kitchen, cold water shall be supplied, at
Tenant's sole cost and expense, from the Building water main through a line and
fixtures installed at Tenant's sole cost and expense with the prior reasonable
consent of Landlord. If Tenant desires hot water in the Premises, Tenant, at its
sole cost and expense and subject to the prior reasonable consent of Landlord,
may install a hot water heater in the Premises. Tenant shall be solely
responsible for maintenance and repair of any such hot water heater.
2. Central heat and air conditioning is not furnished by Landlord.
Should Landlord be requested to provide central heat and air conditioning, all
costs, including, but not limited to, installation, repair, maintenance,
utilities (i.e. gas, water, electricity) shall be at Tenant's sole expense. If
Tenant desires to utilize the base building HVAC System and/or the 24-hour
cooling system central plants, all services, including, but not limited to
repair, maintenance, utilities or installation shall be metered and/or
calculated by Landlord to identify the costs associated with such service for
reimbursement to Landlord, together with a reasonable and customary overhead
charge and fee to Landlord or its agent as reasonably determined by Landlord
from time to time. Temperatures and hours of operation within the Premises shall
be at Tenant's discretion. Temperatures and hours of operation within the
building core/public space shall be at the building standard temperatures and
hours. At the option of Tenant, maintenance and/or repair of Tenant's special
equipment by Landlord shall be available at a reasonable fee to be determined by
Landlord upon request.
3. Maintenance and repair of the roof and exterior walls of the
Building, and all Common Areas (inclusive of structural elements thereof) in the
manner and to the extent reasonably deemed by Landlord to be standard for
buildings of similar class, size, age and location. However, in no event shall
Landlord be obligated to make any repairs or maintenance caused by reason of any
of Tenant's equipment or other installations installed, placed or located on the
roof, or to any exterior wall or structural element caused by any act or
omission of Tenant or any agent, employee or contractor of Tenant.
4. Tenant shall furnish at its sole cost and expense janitor service
(char and cleaning) for the Premises from its own service contractor, or at
Tenant's option from Landlord's contractor. Landlord shall retain the right to
approve the particular service contractor, which approval shall not be
unreasonably withheld, conditioned or delayed.
5. Passenger elevator service in common with other tenants of the
Building.
6. Existing 500 AMP service at Landlord's electrical vault, with
Tenant responsible for all consumption and hook-up charges for such service.
B. The failure by Landlord to any extent to furnish, or the
interruption or termination of, any services in whole or in part, resulting from
adherence to laws, regulations and administrative orders, wear, use, repairs,
improvements, alterations or any causes beyond the reasonable control of
Landlord shall not render Landlord liable in any respect nor be construed as a
constructive eviction of Tenant, nor give rise to an abatement of Rent, nor
relieve Tenant from the obligation to fulfill any covenant or agreement hereof.
Should any of the equipment or machinery used in the provision of such services
for any cause cease to function properly, Landlord shall use reasonable
diligence to repair such equipment or machinery. Notwithstanding the foregoing,
in the event the Premises shall be without electricity (i.e. there shall be no
power within the Premises) by reason of matters within the control of Landlord
for more than fifteen (15) consecutive days, and if as a result thereof Tenant
shall suspend using the Premises for the conduct of its business operations,
then and in such event as the sole and exclusive
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remedy available to Tenant, Landlord agrees to ▇▇▇▇▇ Base Rental and Additional
Base Rental for the period of time during which such failure shall continue.
C. Tenant expressly acknowledges that if Landlord, from time to time,
elects to provide a lobby attendant or security services, Landlord shall not be
deemed to have warranted the efficiency of any lobby attendant, security
personnel, service, procedures or equipment and Landlord shall not be liable in
any manner for the failure of any such security personnel, services, procedures
or equipment to prevent or control, or apprehend anyone suspected of personal
injury, property damage or any criminal conduct in, on or around the Property.
VIII. LEASEHOLD IMPROVEMENTS.
Any trade fixtures, unattached and movable equipment or furniture, or
other personalty brought into the Premises by Tenant ("Tenant's Property") shall
be owned and insured by Tenant. Tenant shall remove all such Tenant's Property
from the Premises in accordance with the terms of Article XXXVI hereof. Any and
all alterations, additions and improvements to the Premises, including any
built-in furniture (collectively, "Leasehold Improvements") shall be owned by
Landlord and shall remain upon the Premises, all without compensation, allowance
or credit to Tenant. However, in no event shall any switches or racks installed
at the Premises by Tenant be deemed to constitute Landlord's Property and shall
be removed by Tenant upon expiration or termination of this Lease. Landlord may,
nonetheless, at any time prior to, or within six (6) months after, the
expiration or earlier termination of this Lease or Tenant's right to possession,
require Tenant to remove any Leasehold Improvements performed by or for the
benefit of Tenant and all electronic, phone and data cabling as are designated
by Landlord (the "Required Removables") at Tenant's sole cost. In the event that
Landlord so elects, Tenant shall remove such Required Removables within ten (10)
days after notice from Landlord, provided that in no event shall Tenant be
required to remove such Required Removables prior to the expiration or earlier
termination of this Lease or Tenant's right to possession. In addition to
Tenant's obligation to remove the Required Removables, Tenant shall repair any
damage caused by such removal. If Tenant fails to remove any specified Required
Removables or to perform any required repairs within the time period specified
above, Landlord, at Tenant's sole cost and expense, may remove, store, sell
and/or dispose of the Required Removables and perform such required repairs.
Tenant, within five (5) days after demand from Landlord, shall reimburse
Landlord for any and all reasonable costs incurred by Landlord in connection
with the Required Removables or the performance of such repairs.
Connecting equipment and telecommunications equipment located within
the Premises or at the Building by or on behalf of Tenant shall not be deemed to
constitute a fixture and shall be deemed the property of Tenant or its customers
or co-locators. Landlord hereby waives its rights, statutory or otherwise, to
any lien on such telecommunication equipment and the Connecting Equipment
(defined in Article X below). Upon expiration or termination of this Lease,
Tenant shall remove all of the Connecting Equipment and telecommunications
equipment from the Premises or Building in a good and workmanlike manner. Tenant
shall be entitled to obtain the waiver from Landlord in writing of Landlord's
right to require removal of any particular equipment at the time of Landlord's
consent to the installation of same, and Landlord shall be bound by any such
written waiver in the event this Lease shall be terminated or expire other than
by reason of an uncured Event of Default.
IX. GRAPHICS.
Tenant shall not be permitted to install any signs or other
identification without Landlord's prior written consent. In no event shall
Tenant be entitled to any exterior signage at the Building.
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X. REPAIRS AND ALTERATIONS.
A. Except to the extent such obligations are imposed upon Landlord
hereunder, Tenant, at its sole cost and expense, shall perform all maintenance
and repairs to the Premises as are necessary to keep the same in good condition
and repair throughout the entire Lease Term, reasonable wear and tear excepted.
Tenant's repair and maintenance obligations with respect to the Premises shall
include, without limitation, any necessary repairs with respect to: (1) any
carpet or other floor covering, (2) any interior partitions, (3) any doors, (4)
the interior side of any demising walls, (5) any telephone and computer cabling
that serves Tenant's equipment exclusively, (6) any air conditioning units,
private showers and kitchens, including any plumbing in connection therewith,
and similar facilities serving Tenant exclusively, and (7) any alterations,
additions or improvements performed by contractors retained by Tenant. All such
work shall be performed in accordance with section X.B. below and the rules,
policies and procedures reasonably enacted by Landlord from time to time for the
performance of work in the Building. If Tenant fails to make any necessary
repairs to the Premises, Landlord may, at its option, make such repairs, and
Tenant shall pay the cost thereof to the Landlord on demand as Additional Base
Rental, together with an administrative charge in an amount equal to ten percent
(10%) of the cost of such repairs. Landlord shall, at its expense (except as
included in Basic Costs), keep and maintain in good repair and working order,
and make all repairs to and perform necessary maintenance upon: (a) all
structural elements of the Building; and (b) all mechanical, electrical and
plumbing systems that serve the Building in general; and (c) the Building
facilities common to all tenants including, but not limited to, the ceilings,
walls and floors in the Common Areas.
B. Tenant shall not make or allow to be made any alterations, additions
or improvements to the Premises without first obtaining the written consent of
Landlord in each such instance. Prior to commencing any such work and as a
condition to obtaining Landlord's consent, Tenant must furnish Landlord with
plans and specifications reasonably acceptable to Landlord; names and addresses
of contractors reasonably acceptable to Landlord; copies of contracts; necessary
permits and approvals; evidence of contractor's and subcontractor's insurance in
accordance with Article XVI section B. hereof; and payment bond or other
security, all in form and amount reasonably satisfactory to Landlord. All such
improvements, alterations or additions shall be constructed in a good and
workmanlike manner using Building Standard materials or other new materials of
equal or greater quality. Landlord, to the extent reasonably necessary to avoid
any unreasonable disruption to the tenants and occupants of the Building, shall
have the right to designate the time when any such alterations, additions and
improvements may be performed and to otherwise designate reasonable rules,
regulations and procedures for the performance of work in the Building. Upon
completion, Tenant shall furnish "as-built" plans, contractor's affidavits and
full and final waivers of lien and receipted bills covering all labor and
materials. All improvements, alterations and additions shall comply with all
insurance requirements, codes, ordinances, laws and regulations, including
without limitation, the Americans with Disabilities Act. Tenant shall reimburse
Landlord upon demand as Additional Base Rental for all sums, if any, expended by
Landlord for third party examination of the architectural, mechanical, electric
and plumbing plans for any alterations, additions or improvements. In addition,
if Landlord so requests, Landlord shall be entitled to oversee the construction
of any alterations, additions or improvements that may affect the structure of
the Building or any of the mechanical, electrical, plumbing or life safety
systems of the Building. In the event Landlord elects to oversee such work,
Landlord shall be entitled to receive a reasonable hourly fee for such services
and Tenant shall reimburse Landlord no later than thirty (30) days following
written demand those amounts requested by Landlord for such hourly fee as
Additional Base Rental. Landlord's approval of Tenant's plans and specifications
for any work performed for or on behalf of Tenant shall not be deemed to be a
representation by Landlord that such plans and specifications comply with
applicable insurance requirements, building codes, ordinances, laws or
regulations or that the alterations, additions and improvements constructed in
accordance with such plans and specifications will be adequate for Tenant's use.
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C. It is agreed that with respect to the Initial Leasehold
Improvements:
1. All of Tenant's construction activities shall be scheduled at
such times and in such manner by Tenant so as to minimize unreasonable
interference with other tenants, and to avoid disruption in the provision of
Building services to such tenants during Business Hours.
2. Tenant shall be entitled to use the service elevator on a
scheduled basis (as to date and time) with Landlord for the purpose of
installing such equipment scheduled (as to approximate size and weight) with
Landlord in advance. There shall be no charge to Tenant for access to the
service elevator during Business Hours.
3. Landlord shall not unreasonably delay or withhold its approval of
any proposed plans or specifications, nor of the particular contractor proposed
by Tenant to perform such work. Landlord shall be entitled to also approve in
advance in writing any subcontractors or sub-subcontractors proposed to be
engaged by Tenant, its contractor or any subcontractor performing work on or to
any Building system, or performing connections to any utility, fire or life
safety system of the Building.
4. At Tenant's sole cost and expense, and following written approval
by Landlord (which approval shall not be unreasonably withheld or delayed) of
all plans and specifications relating thereto, Tenant shall be entitled to
install within the areas indicated on Exhibit A attached hereto dampers on the
rear alley exterior wall of the Premises for Tenant's liebert air conditioning
unit(s). Tenant shall coordinate with Landlord location of such unit(s) in order
to cause the alley frontage to be reasonably free and clear of all obstacles,
automobiles or trucks at the height of the louvers. Tenant will place the
dampers as indicated on sketches 1 through 4 attached to Exhibit "A" dated March
10, 1999.
5. Tenant shall be entitled to install a battery back-up system
within the Premises and an electrical grounding system, following receipt of
prior written approval by Landlord and its engineer of the plans and
specifications for same. Tenant shall also be entitled to install a diesel
generator and fuel tank on the roof of the Building. In lieu of its own fuel
tank, Tenant shall be entitled to purchase from Landlord diesel fuel from
Landlord's existing tank, at Tenant's expense, located in the alley of the
Building.
D. During the Lease Term, Tenant is also hereby granted the right to
install and maintain telecommunications wiring and cabling (including, without
limitation, supporting structures such as conduits, trenches, backboards, slots,
sleeves, utility spaces, interconnecting locations and facilities (recognizing,
however that Tenant shall be required to use existing risers, chaseways, shafts,
ducts, and conduits on a non-exclusive basis), and related service locations
(collectively the "Connecting Equipment"). Tenant shall be permitted at no
additional rental charge by Landlord to receive at its sole cost, risk and
expense, without any representation or warranty from Landlord as to the
sufficiency or quality, telephone and other data communication services from any
telecommunications service provider serving the area. Any such provider shall
use the Connecting Equipment. Routing of conduit, cable, pipes, and all other
devices shall be coordinated with and approved in advance by Landlord and
restricted to areas that do not interfere with the operations of the Building or
any of its other tenants. Any such Connecting Equipment shall be removed and the
Building restored by Tenant at Tenant's expense upon expiration or earlier
termination of this Lease, or as reasonably required by Landlord. Provisions
addressing Tenant's access to such areas are contained in Article XXXVIII below.
Landlord shall provide existing openings to adequate spaces within the shafts of
the Building for use by Tenant in common with others in order to install power
lines to the generator and any liebert units to be located on the roof by
Tenant. The portion of the roof in which such generator and liebert units is
herein referred to as the "Roof Area". There shall be no additional rent charged
to Tenant for use of the Roof Area for such purposes. Landlord expressly
reserves the right at its expense to revise the designation of the Roof Area to
facilitate future upgrades by its other tenants, and Tenant shall fully
cooperate with Landlord in such regard. None of Tenant's rooftop
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equipment shall be visible from the ground immediately surrounding the Building.
None of Tenant's equipment or modifications shall interfere with any existing,
or to the extent notice thereof is provided to Tenant, presently contemplated,
installations of antennaes by other tenants or Landlord at the Building. The
roof area used shall only be available to Tenant on an "as-needed" basis in
accordance with Tenant's current needs and shall remain subject to Landlord's
reasonable coordination and approval, taking into consideration other current
and future users of the roof.
In addition to any other common rules and regulations Landlord may
reasonably establish from time to time, Tenant shall comply with the following
with respect to the roof of the Building: (i) Tenant's use of any portions of
the Building beyond the Premises shall be at Tenant's sole risk, cost and
expense and Landlord shall have no responsibility therefore and no liability on
account of any damage to or interference with Tenant's equipment; (ii) Tenant
shall be solely responsible for installing, operating, maintaining and repairing
its equipment at its own expense in a manner that causes no interference with or
damage to the roof itself or any other person's use of the roof; (iii) Tenant
shall perform all of such work in such a way as to not damage any Building
systems or void any warranty or guaranty relating thereto of which Tenant is
aware, and Landlord may require that Tenant use contractors reasonably approved
by Landlord in performing such work; (iv) Tenant shall be responsible for
obtaining and paying for all governmental licenses and permits required by law
(and shall deliver copies thereof to Landlord as a condition precedent to its
use of the roof) and for complying with all applicable laws relating to its
exercise of said right; and (v) Tenant shall remove all of its rooftop equipment
no later than thirty (30) days following the expiration of the Lease Term and
shall repair any damage resulting from such removal and restore the roof to the
condition they were in (ordinary wear and tear and damage by fire or other
casualty excepted) before Tenant exercised said right.
Tenant's rights under this subsection D may not be separately assigned
or subleased to a party other than a party succeeding to all of the right, title
or interest of Tenant under this Lease.
E. Landlord shall not be the guarantor of, or responsible for, the
correctness or accuracy of any of Tenant's plans and specifications or for their
compliance with any applicable law, rule or regulation of any governmental or
quasi-governmental authority. All costs associated with the installation,
maintenance, repair, replacement and removal of any of Tenants' roof top
equipment, including, without limitation, all design and engineering costs and
governmental charges, and insurance costs, shall be paid by Tenant. Landlord
shall have no liability, obligation or responsibility with respect to any actual
or alleged failure to perform any of its obligations under this section or under
comparable provisions of leases with other tenants in the Building, unless
Landlord shall have acted with negligence or willful misconduct in connection
therewith. Landlord shall have no liability, obligation or responsibility with
respect to any service actually or allegedly performed or not performed by the
third person, unless Landlord shall have acted with negligence or willful
misconduct in selection of the third person.
XI. USE OF ELECTRICAL SERVICES BY TENANT.
A. All electricity used by Tenant in the Premises shall be paid for by
Tenant either directly to the utility service provider or as additional rent to
Landlord. Tenant also shall be responsible for all costs incurred by reason
thereof, including, without limitation, costs to furnish and install any
separate submeters, checkmeters, utility deposits, etc. Tenant shall be solely
responsible for the costs to furnish and install any switches required to
connect to the existing Building electrical service. Landlord shall be entitled
to establish such conditions as Landlord reasonably elects (including the
installation of utility service upgrades, air handlers or cooling units), and
all such additional usage (to the extent permitted by law), installation and
maintenance thereof shall be paid for by Tenant as Additional Base Rental.
Tenant shall be required to separately meter electrical usage for the Premises
at all times during the Lease Term. Tenant shall be solely responsible for any
increased demand charges resulting to Landlord for the Building by reason of
Tenant's
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consumption of electricity within the Premises. Landlord shall not be entitled
to any profit or markup for any electricity billed to Tenant by Landlord
hereunder.
B. If Landlord generates or distributes electric current for the
Building, Tenant shall obtain all current from Landlord and pay as Additional
Base Rental Landlord's charges therefor, provided, however, the charges to
Tenant shall not exceed the rate that would be charged Tenant if billed directly
by the local utility for the same services. Landlord may cease to furnish
electricity upon thirty (30) days' prior written notice, provided within the
thirty (30) days' Landlord connects the Building to a comparable source of
electric supply. It is expressly agreed that in the event the utility company
shall require Landlord to either generate or distribute electric current to
Tenant or, to require Tenant to obtain such electric current directly from the
utility provider, Tenant shall bear the cost incurred in connection with such
provision of electric current or change of electric current source.
C. It is expressly agreed that Tenant shall have the right, on a
scheduled basis with Landlord, to exercise its generator at least as frequently
as semi-monthly; recognizing that any such exercise by Tenant shall not
interfere with Building operations or other tenants.
XII. ENTRY BY LANDLORD.
Landlord and its agents or representatives shall have the right to
enter the Premises to inspect the same, or to show the Premises to prospective
purchasers, mortgagees, tenants (during the last twelve months of the Lease Term
or earlier in connection with a potential relocation) or insurers, or to clean
or make repairs, alterations or additions thereto, including any work that
Landlord deems necessary for the safety, protection or preservation of the
Building or any occupants thereof, or to facilitate repairs, alterations or
additions to the Building or any other tenants' premises. Landlord will use all
reasonable efforts to minimize interference with Tenant's business operations in
the exercise of its rights hereunder. Except for any entry by Landlord in an
emergency situation, Landlord shall provide Tenant with reasonable prior notice
of any entry into the Premises, which notice may be given verbally. If
reasonably necessary for the protection and safety of Tenant and its employees,
Landlord shall have the right to temporarily close the Premises to perform
repairs, alterations or additions in the Premises, provided that Landlord shall
use reasonable efforts to perform all such work on weekends and after Normal
Business Hours. Entry by Landlord hereunder shall not constitute a constructive
eviction or entitle Tenant to any abatement or reduction of Rent by reason
thereof.
XIII. ASSIGNMENT AND SUBLETTING.
A. Tenant shall not assign, sublease, transfer or encumber this Lease
or any interest therein or grant any license, concession or other right of
occupancy of the Premises or any portion thereof or otherwise permit the use of
the Premises or any portion thereof by any party other than Tenant (any of which
events is hereinafter called a "Transfer") without the prior written consent of
Landlord, which consent shall not be unreasonably withheld, conditioned or
delayed with respect to any proposed assignment or subletting. Landlord's
consent shall not be considered unreasonably withheld if: (1) the proposed
transferee's financial responsibility does not meet the same criteria Landlord
uses to select Building tenants; (2) the proposed transferee's business is not
reasonably suitable for the Building considering the business of the other
tenants and the Building's prestige or would result in a violation of an
exclusive right granted to another tenant in the Building; (3) the proposed use
is different than the Permitted Use; (4) the proposed transferee is a government
agency; (5) an Event of Default exists; or (6) any portion of the Building or
Premises would become subject to additional or different governmental laws or
regulations as a consequence of the proposed Transfer and/or the proposed
transferee's use and occupancy of the Premises. Tenant acknowledges that the
foregoing is not intended to be an exclusive list of the reasons for which
Landlord may reasonably withhold its consent to a proposed Transfer. Any
attempted Transfer in violation of the terms of this Article shall, at
Landlord's option, be void. Consent by Landlord to one or
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more Transfers shall not operate as a waiver of Landlord's rights as to any
subsequent Transfers. In addition, Tenant shall not, without Landlord's consent,
publicly advertise the proposed rental rate for any Transfer.
B. If Tenant requests Landlord's consent to a Transfer, Tenant,
together with such request for consent, shall provide Landlord with the name of
the proposed transferee and the nature of the business of the proposed
transferee, the term, use, rental rate and all other material terms and
conditions of the proposed Transfer, including, without limitation, a copy of
the proposed assignment, sublease or other contractual documents and evidence
satisfactory to Landlord that the proposed transferee is financially
responsible. Tenant shall reimburse Landlord on demand for any reasonable costs
that may be incurred by Landlord in connection with said Transfer, including,
without limitation, the costs of making investigations as to the acceptability
of the proposed assignee or subtenant, and reasonable legal costs incurred in
connection with the granting of any requested consent. Notwithstanding
Landlord's agreement to act reasonably under Section XIII.A. above, Landlord
may, within forty-five (45) days after its receipt of all information and
documentation required herein, either, (1) consent to or reasonably refuse to
consent to such Transfer in writing; or (2) negotiate directly with the proposed
transferee and in the event Landlord is able to reach an agreement with such
proposed transferee, terminate this Lease (in part or in whole, as appropriate)
upon thirty (30) days' notice; or (3) cancel and terminate this Lease, in whole
or in part as appropriate. In the event Landlord consents to any such Transfer,
the Transfer and consent thereto shall be in a form approved by Landlord. Tenant
shall bear all costs and expenses reasonably incurred by Landlord in connection
with the review and approval of such documentation, including without
limitation, Landlord's reasonable attorneys' fees as well as a special
administrative charge of One Thousand Dollars ($1,000.00).
C. Notwithstanding anything to the contrary in this Lease, Tenant shall
have the right to transfer and assign this Lease and/or sublet all or any part
of the Leased Premises without obtaining Landlord's consent (and therefor
Landlord shall have no right to terminate the Lease by reason thereof under this
Article) to any of the following: (1) any entity into which Tenant has been
consolidated; (2) any entity which shall result from a merger of the Tenant with
one or more entities; (3) any affiliate or subsidiary of Tenant or to such other
parties as may be required in connection with any offering on a recognized
security exchange (i.e NYSE, AMEX or NASDAQ) (recognizing that Tenant shall
remain jointly and severally liable with such affiliate, subsidiary or other
party at all times thereafter for the performance and payment of the various
obligations of the original Tenant under this Lease) or (4) any entity to whom
Tenant shall have sold all or substantially all of its assets or stock. Tenant
shall be required to provide Landlord with copies of the Agreement executed by
the assignee of this Lease evidencing the assumption by such assignee of all of
the obligations and liabilities imposed upon Tenant under the Lease.
D. Any Transfer consented to by Landlord in accordance with this
Article XIII shall be only for the Permitted Use and for no other purpose. In no
event shall any Transfer release or relieve Tenant or any Guarantors from any
obligations under this Lease.
E. If Tenant shall sublease the Sublet Premises or assign this Lease to
anyone for rents, additional charges related to the value of the Lease or other
consideration which for any period shall exceed the Rent payable under this
Lease for the same period, Tenant shall pay Landlord, as Additional Rent
hereunder, fifty percent (50%) of any such rents, additional charges, fees or
other consideration (net of any expenses of Tenant reasonably related to making
the Sublet Premises or the Premises, as the case may be, available for the
sublessee or the assignee which is in excess of the rent and Additional Rent
accruing during the term of the sublease with respect to the Sublet Premises or
during the Term with respect to an assignment pursuant to the terms hereof. The
sums payable under this section E shall be paid to Landlord as Additional Rent
as and when payable by the subtenant or assignee to Tenant.
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F. Tenant shall not be prohibited from negotiating or consummating a
sublease at a lower rental rate than the average rental rate then being paid by
tenants in the Building if, and only if, Tenant shall first have offered to
sublet the Sublet Premises to Landlord for the same rent and terms by written
notice given with or after Tenant's request for consent to the subletting or
assignment. Landlord shall accept or reject such offer within fifteen (15) days
from receipt of such request for consent or ten (10) days after receipt of the
offer, whichever is later. Notwithstanding anything to the contrary contained in
this Lease, no assignment of Tenant's interest in this Lease shall be binding
upon Landlord unless the assignee shall execute and deliver to Landlord an
agreement whereby such assignee agrees unconditionally to be bound by and to
perform all of the obligations of Tenant hereunder and further expressly agrees
that notwithstanding such assignment the provisions of this paragraph shall
continue to be binding upon such assignee with respect to all future assignments
and transfers. A failure or refusal of such assignee to execute or deliver such
an agreement shall not release the assignee from its liability for the
obligations of Tenant hereunder assumed by acceptance of the assignment of this
Lease.
G. If Landlord shall decline to give its consent to any proposed
Transfer, or if Landlord shall exercise any of its options under this Article,
Tenant shall indemnify, defend and hold harmless Landlord against and from any
and all loss, liability, damages, costs and expenses (including attorneys' fees
and disbursements) resulting from any claims that may be made against Landlord
by the proposed assignee or sublessee or by any brokers or other persons
claiming a commission or similar compensation in connection with the proposed
assignment or sublease.
XIV. LIENS.
Tenant will not permit any mechanic's liens or other liens to be placed
upon the Premises or Tenant's leasehold interest therein, the Building, or the
Property. Landlord's title to the Building and Property is and always shall be
paramount to the interest of Tenant, and nothing herein contained shall empower
Tenant to do any act that can, shall or may encumber Landlord's title. In the
event any such lien does attach, Tenant shall, within ten (10) days of notice of
the filing of said lien, either discharge or bond over such lien to the
satisfaction of Landlord and Landlord's Mortgagee (as hereinafter defined), and
in such a manner as to remove the lien as an encumbrance against the Building
and Property. If Tenant shall fail to so discharge or bond over such lien, then,
in addition to any other right or remedy of Landlord, Landlord may, but shall
not be obligated to bond over or discharge the same. Any amount paid by Landlord
for any of the aforesaid purposes, including reasonable attorneys' fees (if and
to the extent permitted by law) shall be paid by Tenant to Landlord on demand as
Additional Base Rental. Landlord shall have the right to post and keep posted on
the Premises any notices that may be provided by law or which Landlord may deem
to be proper for the protection of Landlord, the Premises and the Building from
such liens. Nothing contained herein shall be deemed to affect the rights of
Tenant to contest any such lien, so long as the bond has been provided to
protect the interests of Landlord. Notice is hereby given that the Landlord
shall not be liable for any labor or materials furnished or to be furnished to
the Tenant upon credit, and that no mechanic's or materialmen's or other lien
for any such labor or materials shall attach to or affect the reversionary or
other estate or interest of the Landlord in and to the Land and Building. In no
event shall Tenant be deemed to be the agent of Landlord for purposes of Title
38-101 of the District of Columbia Code (1981 Edition, as amended) and no
contractor of Tenant shall by virtue of its contract be entitled to assert any
mechanic's lien against the Building or land appurtenant thereto.
XV. INDEMNITY AND WAIVER OF CLAIMS.
A. Tenant shall indemnify, defend and hold Landlord, its members,
principals, beneficiaries, partners, officers, directors, employees,
Mortgagee(s) and agents, and the respective principals and members of any such
agents (collectively the "Landlord Related Parties") harmless against and from
all liabilities, obligations, damages, penalties, claims, costs, charges and
expenses, including, without limitation, reasonable attorneys' fees and other
professional fees (if and to the extent permitted by law), which may be imposed
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upon, incurred by, or asserted against Landlord or any of the Landlord Related
Parties and arising, directly or indirectly, out of or in connection with the
use, occupancy or maintenance of the Premises by, through or under Tenant
including, without limitation, any of the following: (1) any work or thing done
in, on or about the Premises or any part thereof by Tenant or any of its
transferees, agents, servants, contractors, employees, customers, licensees or
invitees; (2) any use, non-use, possession, occupation, condition, operation or
maintenance of the Premises or any part thereof; (3) any act or omission of
Tenant or any of its transferees, agents, servants, contractors, employees,
customers, licensees or invitees, regardless of whether such act or omission
occurred within the Premises; (4) any injury or damage to any person or property
occurring in, on or about the Premises or any part thereof; or (5) any failure
on the part of Tenant to perform or comply with any of the covenants,
agreements, terms or conditions contained in this Lease with which Tenant must
comply or perform. In case any action or proceeding is brought against Landlord
or any of the Landlord Related Parties by reason of any of the foregoing, Tenant
shall, at Tenant's sole cost and expense, resist and defend such action or
proceeding with counsel approved by Landlord or, at Landlord's option, reimburse
Landlord for the cost of any counsel retained directly by Landlord to defend and
resist such action or proceeding.
B. Landlord and the Landlord Related Parties shall not be liable for,
and Tenant hereby waives, all claims for loss or damage to Tenant's business or
damage to person or property sustained by Tenant or any person claiming by,
through or under Tenant [including Tenant's principals, agents and employees
(collectively, the "Tenant Related Parties")] resulting from any accident or
occurrence in, on or about the Premises, the Building or the Property,
including, without limitation, claims for loss, theft or damage resulting from:
(1) the Premises, Building, or Property, or any equipment or appurtenances
becoming out of repair; (2) wind or weather; (3) any defect in or failure to
operate, for whatever reason, any sprinkler, heating or air-conditioning
equipment, electric wiring, gas, water or steam pipes; (4) broken glass; (5) the
backing up of any sewer pipe or downspout; (6) the bursting, leaking or running
of any tank, water closet, drain or other pipe; (7) the escape of steam or
water; (8) water, snow or ice being upon or coming through the roof, skylight,
stairs, doorways, windows, walks or any other place upon or near the Building;
(9) the falling of any fixture, plaster, title or other material; (10) any act,
omission or negligence of other tenants, licensees or any other persons or
occupants of the Building or of adjoining or contiguous buildings, or owners of
adjacent or contiguous property or the public, or by construction of any
private, public or quasi-public work; or (11) any other cause of any nature
except, as to items 1-9 and item 11, where such loss or damage is due to
Landlord's willful failure to make repairs required to be made pursuant to other
provisions of this Lease, after the expiration of a reasonable time after
written notice to Landlord of the need for such repairs. To the maximum extent
permitted by law, Tenant agrees to use and occupy the Premises, and to use such
other portions of the Building as Tenant is herein given the right to use, at
Tenant's own risk.
C. Notwithstanding any provision contained herein to the contrary,
Landlord shall not be indemnified from any liability for damage or injury to
persons or property caused by or resulting from the negligence or wanton
misconduct of Landlord or any employee or agent of Landlord in the operation or
maintenance of the Building.
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XVI. TENANT'S INSURANCE.
A. At all times commencing on and after the earlier of the Commencement
Date and the date Tenant or its agents, employees or contractors enters the
Premises for any purpose, Tenant shall carry and maintain, at its sole cost and
expense:
1. Commercial General Liability Insurance applicable to the Premises
and its appurtenances providing, on an occurrence basis, a minimum combined
single limit of Two Million Dollars ($2,000,000.00), with a contractual
liability endorsement covering Tenant's indemnity obligations under this Lease.
2. All Risks of Physical Loss Insurance written at replacement cost
value and with a replacement cost endorsement covering all of Tenant's Property
in the Premises.
3. Workers' Compensation Insurance as required by the state in which
the Premises is located and in amounts as may be required by applicable statute,
and Employers' Liability Coverage of One Million Dollars ($1,000,000.00) per
occurrence.
4. Whenever good business practice, in Landlord's reasonable
judgment, indicates the need of additional insurance coverage or different types
of insurance in connection with the Premises or Tenant's use and occupancy
thereof, Tenant shall, upon request, obtain such insurance at Tenant's expense
and provide Landlord with evidence thereof.
B. Before any repairs, alterations, additions, improvements, or
construction are undertaken by or on behalf of Tenant, Tenant shall carry and
maintain, at its expense, or Tenant shall require any contractor performing work
on the Premises to carry and maintain, at no expense to Landlord, In addition to
workers' compensation insurance as required by the jurisdiction in which the
Building is located, All Risk Builder's Risk Insurance in the amount of the
replacement cost of any alterations, additions or improvements (or such other
amount reasonably required by Landlord) and Commercial General Liability
Insurance (including, without limitation, Contractor's Liability coverage,
Contractual Liability coverage and Completed Operations coverage), written on an
occurrence basis with a minimum combined single limit of Two Million Dollars
($2,000,000.00) and adding the "owner(s) of the Building and its (or their)
respective members, principals, beneficiaries, partners, officers, directors,
employees, agents (and their respective members and principals) and
mortgagee(s)" (and any other designees of Landlord as the interest of such
designees shall appear) as additional insureds.
C. Any company writing any insurance which Tenant is required to
maintain or cause to be maintained pursuant to the terms of this Lease (all such
insurance as well as any other insurance pertaining to the Premises or the
operation of Tenant's business therein being referred to as "Tenant's
Insurance"), as well as the form of such insurance, shall at all times be
subject to Landlord's reasonable approval, and each such insurance company shall
have an A.M. Best rating of "A-" or better and shall be licensed and qualified
to do business in the state in which the Premises is located. All policies
evidencing Tenant's Insurance (except for Workers' Compensation) shall specify
Tenant as named insured and the "owner(s) of the Building and its (or their)
respective members, principals, beneficiaries, partners, officers, directors,
employees, agents (and their respective members and principals) and
mortgagee(s)" (and any other designees of Landlord as the interest of such
designees shall appear) as additional insureds. Provided that the coverage
afforded Landlord and any designees of Landlord shall not be reduced or
otherwise adversely affected, all of Tenant's Insurance may be carried under a
blanket policy covering the Premises and any other of Tenant's locations. All
policies of Tenant's Insurance shall contain endorsements that the insurer(s)
will give to Landlord and its designees at least fifteen (15) days' advance
written notice of any change, cancellation, termination or lapse of said
insurance. Tenant shall be solely responsible for payment of premiums for all of
Tenant's Insurance. Tenant shall deliver to Landlord at least fifteen (15) days
prior to the time Tenant's Insurance is first required to be carried by Tenant,
and
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upon renewals at least fifteen (15) days prior to the expiration of any such
insurance coverage, a certificate of insurance of all policies procured by
Tenant in compliance with its obligations under this Lease. The limits of
Tenant's Insurance shall in no event limit Tenant's liability under this Lease.
D. Tenant shall not do or fail to do anything in, upon or about the
Premises which will: (1) violate the terms of any of Landlord's insurance
policies; (2) prevent Landlord from obtaining policies of insurance acceptable
to Landlord or any Mortgagees; or (3) result in an increase in the rate of any
insurance on the Premises, the Building, any other property of Landlord or of
others within the Building. In the event of the occurrence of any of the events
set forth in this Section, Tenant shall pay Landlord upon demand, as Additional
Base Rental, the cost of the amount of any increase in any such insurance
premium, provided that the acceptance by Landlord of such payment shall not be
construed to be a waiver of any rights by Landlord in connection with a default
by Tenant under the Lease. If Tenant fails to obtain the insurance coverage
required by this Lease, Landlord may, at its option, obtain such insurance for
Tenant, and Tenant shall pay, as Additional Base Rental, the cost of all
premiums thereon and all of Landlord's costs associated therewith.
XVII. SUBROGATION.
Notwithstanding anything set forth in this Lease to the contrary,
Landlord and Tenant do hereby waive any and all right of recovery, claim, action
or cause of action against the other, their respective principals,
beneficiaries, partners, officers, directors, agents, and employees, and, with
respect to Landlord, its Mortgagee(s), for any loss or damage that may occur to
Landlord or Tenant or any party claiming by, through or under Landlord or
Tenant, as the case may be, with respect to their respective property, the
Building, the Property or the Premises or any addition or improvements thereto,
or any contents therein, by reason of fire, the elements or any other cause,
regardless of cause or origin, including the negligence of Landlord or Tenant,
or their respective principals, beneficiaries, partners, officers, directors,
agents and employees and, with respect to Landlord, its Mortgagee(s), which loss
or damage is (or would have been, had the insurance required by this Lease been
carried) covered by insurance. Since this mutual waiver will preclude the
assignment of any such claim by subrogation (or otherwise) to an insurance
company (or any other person), Landlord and Tenant each agree to give each
insurance company which has issued, or in the future may issue, policies of
insurance, with respect to the items covered by this waiver, written notice of
the terms of this mutual waiver, and to have such insurance policies properly
endorsed, if necessary, to prevent the invalidation of any of the coverage
provided by such insurance policies by reason of such mutual waiver. For the
purpose of the foregoing waiver, the amount of any deductible applicable to any
loss or damage shall be deemed covered by, and recoverable by the insured under
the insurance policy to which such deductible relates. In the event that Tenant
is permitted to and self-insures any risk which would have been covered by the
insurance required to be carried by Tenant pursuant to Article XVI of the Lease,
or if Tenant fails to carry any insurance required to be carried by Tenant
pursuant to Article XVI of this Lease, then all loss or damage to Tenant, its
leasehold interest, its business, its property, the Premises or any additions or
improvements thereto or contents thereof shall be deemed covered by and
recoverable by Tenant under valid and collectible policies of insurance.
XVIII. LANDLORD'S INSURANCE.
Landlord agrees that Landlord will maintain or cause to be maintained
in full force and effect at all times during the Term fire and extended coverage
insurance covering the Building and the leasehold improvements to the Leased
Premises originally supplied, furnished or installed at Landlord's expense in
amounts equal to no less than ninety percent (90%) of the full insurable value
thereof (actual replacement value, without deduction for physical depreciation
as such may be adjusted to account for increased replacement value costs) or in
such lesser amount as shall be sufficient to avoid the effects of co-insurance
provisions of the policies and public liability insurance with limits no less
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than the minimum limits required of Tenant in the case of Tenant's public
liability insurance required above. The cost of such insurance shall be included
as a part of the Basic Costs, and payments for losses and recoveries thereunder
shall be made solely to Landlord or the Mortgagees of Landlord as their
interests shall appear.
XIX. CASUALTY DAMAGE.
If the Premises or any part thereof shall be damaged by fire or other
casualty, Tenant shall give prompt written notice thereof to Landlord. In case
(i) the Building shall be so damaged that in Landlord's reasonable judgment,
substantial alteration or reconstruction of the Building shall be required
(whether or not the Premises has been damaged by such casualty), (ii) Landlord
will not be permitted by applicable law to rebuild the Building in substantially
the same form as existed prior to the fire or casualty, or (iii) Material Damage
(below defined) has occurred and there is less than one (1) year of the Lease
Term remaining on the date of such casualty, (iv) any Mortgagee should require
that the insurance proceeds payable as a result of a casualty be applied to the
payment of the mortgage debt, or (v) any material uninsured loss to the
Building, Landlord may, at its option, terminate this Lease by notifying Tenant
in writing of such termination within forty-five (45) days after the date of
such casualty. In addition, provided an Event of Default shall not then be
continuing, in the event the Premises has suffered Material Damage and either
(x) there is less than one (1) year of the Lease Term remaining on the date of
such casualty or (y) there shall require more than four (4) months for Landlord
to complete Landlord's completion of repairs or restoration required of Landlord
following the date of the fire or casualty, then and in either such event Tenant
also shall be entitled to terminate this Lease by notifying Landlord in writing
of such termination, within forty-five (45) days after the date of such casualty
(in the case of (x) above) or within fifteen (15) days after the date of
Landlord's estimate (which shall be provided by Landlord no later than
forty-five days following the casualty) to Tenant of the time reasonably
anticipated to be required to complete the requisite repairs and restorations
(in the case of (y) above). Such termination shall be effective as of the date
of fire or casualty, with respect to any portion of the Premises that was
rendered untenantable, and the effective date of termination specified in
Landlord's notice, or, if applicable, Tenant's notice, with respect to any
portion of the Premises that remained tenantable. However, no portion of the
Premises shall be deemed to be tenantable in the event by reason of the damage
to the remaining portion of the Premises Tenant is unable to reasonably conduct
its business therein and Tenant actually does not conduct business within such
undamaged portion of the Premises. If Landlord, or if applicable, Tenant, does
not does not elect to terminate this Lease, Landlord shall commence and proceed
with reasonable diligence to restore the Building (provided that Landlord shall
not be required to restore any unleased premises in the Building) and the
Leasehold Improvements (but excluding any improvements, alterations or additions
made by Tenant in violation of this Lease) located within the Premises, if any,
which Landlord has insured to substantially the same condition they were in
immediately prior to the happening of the casualty. Notwithstanding the
foregoing, Landlord's obligation to restore the Building, and the Leasehold
Improvements, if any, shall not require Landlord to expend for such repair and
restoration work more than the insurance proceeds actually received by the
Landlord (plus the deductible maintained by Landlord) as a result of the
casualty. When repairs to the Premises have been completed by Landlord, Tenant
shall complete the restoration or replacement of all Tenant's Property necessary
to permit Tenant's reoccupancy of the Premises, and Tenant shall present
Landlord with evidence satisfactory to Landlord of Tenant's ability to pay such
costs prior to Landlord's commencement of repair and restoration of the
Premises. Landlord shall not be liable for any inconvenience or annoyance to
Tenant or injury to the business of Tenant resulting in any way from such damage
or the repair thereof, except that, subject to the provisions of the next
sentence, Landlord shall allow Tenant a fair diminution of Rent on a per diem
basis during the time and to the extent any damage to the Premises causes the
Premises to be rendered untenantable and not used by Tenant. If the Premises or
any other portion of the Building is damaged by fire or other casualty resulting
from the negligence of Tenant or any Tenant Related Parties, the Rent hereunder
shall not be diminished during any period during which
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the Premises, or any portion thereof, is untenantable (except to the extent
Landlord is entitled to be reimbursed by the proceeds of any rental interruption
insurance), and Tenant shall be liable to Landlord for the cost of the repair
and restoration of the Building caused thereby to the extent such cost and
expense is not covered by insurance proceeds. Landlord and Tenant hereby waive
the provisions of any law from time to time in effect during the Lease Term
relating to the effect upon leases of partial or total destruction of leased
property. Landlord and Tenant agree that their respective rights in the event of
any damage to or destruction of the Premises shall be those specifically set
forth herein.
For purposes hereof, "Material Damage" shall be deemed to have occurred
if fifty percent (50%) or more of the rentable area of the first floor of the
Building shall have been damaged or destroyed or if the Premises are rendered
inaccessible, impossible to be occupied or impossible to conduct business
operations therein for more than ninety (90) consecutive days.
Notwithstanding anything in this Lease to the contrary, if Landlord
does not so complete such restoration of the Premises within thirty (30) days
following the date estimated by Landlord for such restoration to be completed
within its notice to Tenant, and provided that such delay in such completion
results from a cause other than force majeure, Tenant shall have the right, to
be exercised no later than fifteen (15) days following expiration of such 30
days period, to terminate this Lease by delivering at least fifteen (15) days
prior written notice to Landlord of Tenant's exercise of such termination right.
In the event the restoration of the Leased Premises is completed as required in
this section is restored to Tenant within fifteen (15) days after Tenant's
delivery of such notice to Landlord, such right of termination arising from that
occurrence shall be deemed to be void and without effect.
XX. INTENTIONALLY OMITTED
XXI. CONDEMNATION.
If (a) the whole or any substantial part of the Premises or (b) any
portion of the Building or Property which would leave the remainder of the
Building unsuitable for use as an office building comparable to its use on the
Commencement Date, shall be taken or condemned for any public or quasi-public
use under governmental law, ordinance or regulation, or by right of eminent
domain, or by private purchase in lieu thereof, then Landlord may, at its
option, terminate this Lease effective as of the date the physical taking of
said Premises or said portion of the Building or Property shall occur. In the
event of a taking affecting a substantial portion of the Premises, or of a
taking beyond the Premises which materially and adversely impacts either access
to or use of the Premises by Tenant, then and in either such event Tenant shall
also be entitled to terminate this Lease, effective as of the date the physical
taking shall occur. In the event this Lease is not terminated, the Rentable Area
of the Building, the Rentable Area of the Premises and Tenant's Pro Rata Share
shall be appropriately adjusted. In addition, Rent for any portion of the
Premises so taken or condemned shall be abated during the unexpired term of this
Lease effective when the physical taking of said portion of the Premises shall
occur. All compensation awarded for any such taking or condemnation, or sale
proceeds in lieu thereof, shall be the property of Landlord, and Tenant shall
have no claim thereto, the same being hereby expressly waived by Tenant, except
for any portions of such award or proceeds which are specifically allocated by
the condemning or purchasing party for the taking of or damage to Tenant's
Property or for moving costs, or for any other amounts personal to Tenant which
if paid to Tenant will not reduce the award to which Landlord would in the
absence of such payment be entitled to claim for its account, all of which
Tenant specifically reserves to itself.
XXII. EVENTS OF DEFAULT.
The following events shall be deemed to be Events of Default under this
Lease:
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A. Tenant shall fail to pay when due any Base Rental, Additional Base
Rental or other Rent under this Lease and such failure shall continue for three
(3) days after written notice from Landlord (hereinafter sometimes referred to
as a "Monetary Default").
B. Any failure by Tenant (other than a Monetary Default) to comply with
any term, provision or covenant of this Lease, including, without limitation,
the rules and regulations, which failure is not cured within ten (10) days after
delivery to Tenant of notice of the occurrence of such failure, provided that if
any such failure creates a hazardous condition, such failure must be cured
immediately. However, with respect to any failure to comply with or perform any
covenant or obligation which is not curable within such ten (10) day period, if
(i) Tenant has expeditiously commenced to cure same, (ii) the failure does not
affect the Building or other tenants therein and does not result in any
liability to, or expenditure of funds by, Landlord, and (iii) Tenant diligently
pursues the cure of such condition, the cure period shall be extended to the
time reasonably necessary to cure the condition, not to exceed sixty (60) days
(inclusive of the original 10 days). Notwithstanding the foregoing, if Tenant
fails to comply with any particular provision or covenant of this Lease,
including, without limitation, Tenant's obligation to pay Rent when due, on
three (3) occasions during any twelve (12) month period, any subsequent
violation of such provision or covenant shall be considered to be an incurable
default by Tenant.
C. Tenant or any Guarantor shall become insolvent, or shall make a
transfer in fraud of creditors, or shall commit an act of bankruptcy or shall
make an assignment for the benefit of creditors, or Tenant or any Guarantor
shall admit in writing its inability to pay its debts as they become due.
D. Tenant or any Guarantor shall file a petition under any section or
chapter of the United States Bankruptcy Code, as amended, pertaining to
bankruptcy, or under any similar law or statute of the United States or any
State thereof, or Tenant or any Guarantor shall be adjudged bankrupt or
insolvent in proceedings filed against Tenant or any Guarantor thereunder; or a
petition or answer proposing the adjudication of Tenant or any Guarantor as a
debtor or its reorganization under any present or future federal or state
bankruptcy or similar law shall be filed in any court and such petition or
answer shall not be discharged or denied within sixty (60) days after the filing
thereof.
E. A receiver or trustee shall be appointed for all or substantially
all of the assets of Tenant or any Guarantor or of the Premises or of any of
Tenant's Property located thereon in any proceeding brought by Tenant or any
Guarantor, or any such receiver or trustee shall be appointed in any proceeding
brought against Tenant or any Guarantor and shall not be discharged within sixty
(60) days after such appointment or Tenant or such Guarantor shall consent to or
acquiesce in such appointment.
F. The leasehold estate hereunder shall be taken on execution or other
process of law or equity in any action against Tenant.
G. Tenant shall abandon or vacate any substantial portion of the
Premises without the prior written permission of Landlord.
H. Omitted intentionally.
I. The liquidation, termination, dissolution, forfeiture of right to do
business, or death of Tenant or any Guarantor.
J. Tenant is in default beyond any notice and cure period under any
other lease with Landlord for premises in the Building.
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XXIII. REMEDIES.
A. Upon the occurrence of any event or events of default under this
Lease, Landlord shall have the option to pursue any one or more of the following
remedies without any notice (except as expressly prescribed in Article XXII
above) or demand whatsoever (and without limiting the generality of the
foregoing, Tenant hereby specifically waives notice and demand for payment of
Rent or other obligations due [except as expressly prescribed in Article XXII
above] and waives any and all other notices or demand requirements imposed by
applicable law):
1. Terminate this Lease, in which event Tenant shall immediately
surrender the Premises to Landlord. If Tenant fails to surrender the Premises
upon termination of the Lease hereunder, Landlord may without prejudice to any
other remedy which it may have, enter upon and take possession of the Premises
and expel or remove Tenant and any other person who may be occupying said
Premises, or any part thereof, and Tenant hereby agrees to pay to Landlord on
demand the amount of all loss and damage, including consequential damage, which
Landlord may suffer by reason of such termination, whether through inability to
relet the Premises on satisfactory terms or otherwise, specifically including
but not limited to all Costs of reletting (hereinafter defined) and any
deficiency that may arise by reason of any reletting or failure to relet.
2. Enter upon and take possession of the Premises and expel or
remove Tenant or any other person who may be occupying said Premises, or any
part thereof, without having any civil or criminal liability therefor and
without terminating this Lease. Landlord may (but shall be under no obligation
to) relet the Premises or any part thereof for the account of Tenant, in the
name of Tenant or Landlord or otherwise, without notice to Tenant, for such term
or terms which may be greater or less than the period which would otherwise have
constituted the balance of the Lease Term and on such conditions (which may
include concessions, free rent and alterations of the Premises) and for such
uses as Landlord in its absolute discretion may determine, and Landlord may
collect and receive any rents payable by reason of such reletting. Tenant agrees
to pay Landlord on demand all Costs of Reletting and any deficiency that may
arise by reason of such reletting or failure to relet. Landlord shall not be
responsible or liable for any failure to relet the Premises or any part thereof
or for any failure to collect any Rent due upon any such reletting. No such
re-entry or taking of possession of the Premises by Landlord shall be construed
as an election on Landlord's part to terminate this Lease unless a written
notice of such termination is given to Tenant.
3. Enter upon the Premises without having any civil or criminal
liability therefor, and do whatever Tenant is obligated to do under the terms of
this Lease, and Tenant agrees to reimburse Landlord on demand for any expense
which Landlord may incur in thus affecting compliance with Tenant's obligations
under this Lease together with interest at the per annum rate equal to the
Maximum Rate.
4. In order to regain possession of the Premises and to deny Tenant
access thereto in any instance in which Landlord has terminated this Lease or
Tenant's right to possession, or to limit access to the Premises in accordance
with local law in the event of a default by Tenant, Landlord or its agent may,
at the expense and liability of the Tenant, alter or change any or all locks or
other security devices controlling access to the Premises without posting or
giving notice of any kind to Tenant. Landlord shall have no obligation to
provide Tenant a key or grant Tenant access to the Premises so long as Tenant is
in default under this Lease. Tenant shall not be entitled to recover possession
of the Premises, terminate this Lease, or recover any actual, incidental,
consequential, punitive, statutory or other damages or award of attorneys' fees,
by reason of Landlord's alteration or change of any lock or other security
device. Landlord may, without notice, remove and either dispose of or store, at
Tenant's expense, any property belonging to Tenant that remains in the Premises
after Landlord has regained possession thereof.
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5. Terminate this Lease, in which event, Tenant shall immediately
surrender the Premises to Landlord and pay to Landlord the sum of: (a) all Rent
accrued hereunder through the date of termination, and, upon Landlord's
determination thereof, (b) an amount equal to: the total Rent that Tenant would
have been required to pay for the remainder of the Lease Term discounted to
present value at the Prime Rate then in effect, minus the then present fair
rental value of the Premises for the remainder of the Lease Term, similarly
discounted, after deducting all anticipated Costs of Reletting (as defined
below).
B. For purposes of this Lease, the term "Costs of Reletting" shall mean
all costs and expenses reasonably incurred by Landlord in connection with the
reletting of the Premises, including without limitation, the cost of cleaning,
renovation, repairs, decoration and alteration of the Premises for a new tenant
or tenants, advertisement, marketing, brokerage and legal fees (if and to the
extent permitted by law), the cost of protecting or caring for the Premises
while vacant, the cost of removing and storing any property located on the
Premises, any increase in insurance premiums caused by the vacancy of the
Premises and any other out-of-pocket expenses incurred by Landlord including
tenant incentives, allowances and inducements.
C. Except as otherwise herein provided, no repossession or re-entering
of the Premises or any part thereof pursuant to Article XXIII hereof or
otherwise shall relieve Tenant or any Guarantor of its liabilities and
obligations hereunder, all of which shall survive such repossession or
re-entering. Notwithstanding any such repossession or re-entering by reason of
the occurrence of an event of default, Tenant will pay to Landlord the Rent
required to be paid by Tenant pursuant to this Lease.
D. No right or remedy herein conferred upon or reserved to Landlord is
intended to be exclusive of any other right or remedy, and each and every right
and remedy shall be cumulative and in addition to any other right or remedy
given hereunder or now or hereafter existing by agreement, applicable law or in
equity. In addition to other remedies provided in this Lease, Landlord shall be
entitled, to the extent permitted by applicable law, to injunctive relief, or to
a decree compelling performance of any of the covenants, agreements, conditions
or provisions of this Lease, or to any other remedy allowed to Landlord at law
or in equity. Forbearance by Landlord to enforce one or more of the remedies
herein provided upon an event of default shall not be deemed or construed to
constitute a waiver of such default.
E. This Article XXIII shall be enforceable to the maximum extent such
enforcement is not prohibited by applicable law, and the unenforceability of any
portion thereof shall not thereby render unenforceable any other portion.
XXIV. LIMITATION OF LIABILITY.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS LEASE, THE
LIABILITY OF LANDLORD (AND OF ANY SUCCESSOR LANDLORD HEREUNDER) TO TENANT SHALL
BE LIMITED TO THE INTEREST OF LANDLORD IN THE BUILDING, AND TENANT AGREES TO
LOOK SOLELY TO LANDLORD'S INTEREST IN THE BUILDING FOR THE RECOVERY OF ANY
JUDGMENT OR AWARD AGAINST THE LANDLORD, IT BEING INTENDED THAT NEITHER LANDLORD
NOR ANY MEMBER, PRINCIPAL, PARTNER, SHAREHOLDER, OFFICER, DIRECTOR OR
BENEFICIARY OF LANDLORD SHALL BE PERSONALLY LIABLE FOR ANY JUDGMENT OR
DEFICIENCY. TENANT HEREBY COVENANTS THAT, PRIOR TO THE FILING OF ANY SUIT FOR AN
ALLEGED DEFAULT BY LANDLORD HEREUNDER, IT SHALL GIVE LANDLORD AND ALL MORTGAGEES
WHOM TENANT HAS BEEN NOTIFIED IN WRITING HOLD MORTGAGES OR DEED OF TRUST LIENS
ON THE PROPERTY, BUILDING OR PREMISES NOTICE AND REASONABLE TIME TO CURE SUCH
ALLEGED DEFAULT BY LANDLORD.
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XXV. NO WAIVER.
Failure of Landlord or Tenant to declare any default immediately upon
its occurrence, or delay in taking any action in connection with an event of
default shall not constitute a waiver of such default, nor shall it constitute
as estoppel against Landlord or Tenant, as the case may be, but Landlord or
Tenant shall have the right to declare the default at any time and take such
action as is lawful or authorized under this Lease. Failure by Landlord or
Tenant to enforce its rights with respect to any one default shall not
constitute a waiver of its rights with respect to any subsequent default.
Receipt by Landlord of Tenant's keys to the Premises shall not constitute an
acceptance or surrender of the Premises.
XXVI. EVENT OF BANKRUPTCY.
In addition to, and in no way limiting the other remedies set forth
herein, Landlord and Tenant agree that if Tenant ever becomes the subject of a
voluntary or involuntary bankruptcy, reorganization, composition, or other
similar type proceeding under the federal bankruptcy laws, as now enacted or
hereinafter amended, then:
A. "Adequate protection" of Landlord's interest in the Premises
pursuant to the provisions of Section 361 and 363 (or their successor sections)
of the Bankruptcy Code, 11 U.S.C. Section 101 et seq., (such Bankruptcy Code as
amended from time to time being herein referred to as the "Bankruptcy Code"),
prior to assumption and/or assignment of the Lease by Tenant shall include, but
not be limited to all (or any part) of the following:
1. the continued payment by Tenant of the Base Rental and all other
Rent due and owing hereunder and the performance of all other covenants and
obligations hereunder by Tenant;
2. the furnishing of an additional/new security deposit by Tenant in
the amount of three (3) times the then current monthly Base Rental.
B. "Adequate assurance of future performance" by Tenant and/or any
assignee of Tenant pursuant to Bankruptcy Code Section 365 will include (but not
be limited to) payment of an additional/new Security Deposit in the amount of
three (3) times the then current monthly Base Rental payable hereunder.
C. Any person or entity to which this Lease is assigned pursuant to the
provisions of the Bankruptcy Code, shall be deemed without further act or deed
to have assumed all of the obligations of Tenant arising under this Lease on and
after the effective date of such assignment. Any such assignee shall, upon
demand by Landlord, execute and deliver to Landlord an instrument confirming
such assumption of liability.
D. Notwithstanding anything in this Lease to the contrary, all amounts
payable by Tenant to or on behalf of the Landlord under this Lease, whether or
not expressly denominated as "Rent," shall constitute "rent" for the purposes of
Section 502(b)(6) of the Bankruptcy Code.
E. If this Lease is assigned to any person or entity pursuant to the
provisions of the Bankruptcy Code, any and all monies or other considerations
payable or otherwise to be delivered to Landlord (including Base Rentals and
other Rent hereunder), shall be and remain the exclusive property of Landlord
and shall not constitute property of Tenant or of the bankruptcy estate of
Tenant. Any and all monies or other considerations constituting Landlord's
property under the preceding sentence not paid or delivered to Landlord shall be
held in trust by Tenant or Tenant's bankruptcy estate for the benefit of
Landlord and shall be promptly paid to or turned over to Landlord.
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F. If Tenant assumes this Lease and proposes to assign the same
pursuant to the provisions of the Bankruptcy Code to any person or entity who
shall have made a bona fide offer to accept an assignment of this Lease on terms
acceptable to the Tenant, then notice of such proposed offer/assignment, setting
forth: (1) the name and address of such person or entity, (2) all of the terms
and conditions of such offer, and (3) the adequate assurance to be provided
Landlord to assure such person's or entity's future performance under the Lease,
shall be given to Landlord by Tenant no later than twenty (20) days after
receipt by Tenant, but in any event no later than ten (10) days prior to the
date that Tenant shall make application to a court of competent jurisdiction for
authority and approval to enter into such assumption and assignment, and
Landlord shall thereupon have the prior right and option, to be exercised by
notice to Tenant given at any time prior to the effective date of such proposed
assignment, to accept an assignment of this Lease upon the same terms and
conditions and for the same consideration, if any, as the bona fide offer made
by such persons or entity, less any brokerage commission which may be payable
out of the consideration to be paid by such person for the assignment of this
Lease.
G. To the extent permitted by law, Landlord and Tenant agree that this
Lease is a contract under which applicable law excuses Landlord from accepting
performance from (or rendering performance to) any person or entity other than
Tenant within the meaning of Sections 365(c) and 365(e)(2) of the Bankruptcy
Code.
XXVII. WAIVER OF JURY TRIAL.
Landlord and Tenant hereby waive any right to a trial by jury in any
action or proceeding based upon, or related to, the subject matter of this
Lease. This waiver is knowingly, intentionally, and voluntarily made by Tenant,
and Tenant acknowledges that neither Landlord nor any person acting on behalf of
Landlord has made any representations of fact to induce this waiver of trial by
jury or in any way to modify or nullify its effect. Tenant further acknowledges
that it has been represented (or has had the opportunity to be represented) in
the signing of this Lease and in the making of this waiver by independent legal
counsel, selected of its own free will, and that it has had the opportunity to
discuss this waiver with counsel.
XXVIII. LANDLORD'S ALLOWANCE AND INITIAL IMPROVEMENTS.
Tenant shall receive a total construction allowance (the "Allowance")
in the amount of up to Fifteen Dollars ($15.00) per rentable square foot of the
Premises (namely $115,200.00 assuming a Rentable Area of the Premises of 7,680
square feet), which shall be applied towards the cost of Tenant's Initial
Leasehold Improvements over the existing "as is" condition. For the purposes of
this paragraph, leasehold improvements may specifically include, but not be
limited to, construction of tenant improvements, construction management
services, permit fees, fire suppression systems, HVAC, cabling, DC power
sources, Tenant's design costs (to include architectural, mechanical, electrical
and plumbing drawings), suite security systems, and millwork, or items which
either Tenant may require Landlord or the Tenant's Contractor to furnish,
provide or complete or which under the terms of this Lease shall be provided or
furnished by Landlord or Tenant's Contractor in connection with the completion
of the Initial Leasehold Improvements.
Landlord agrees to disburse the Allowance to Tenant or as directed by
Tenant on account of items delivered to the Premises when delivered, after
approval of such payment by Tenant, provided Landlord receives no less than ten
(10) days advance written notice of such payment. Landlord also agrees to
disburse the Allowance on a monthly basis directly to the general contractor or
others as directed by Tenant on account of work performed, or in the event
Tenant has paid the requested amount itself directly to such contractor or other
party, Landlord shall reimburse Tenant the portion of the Allowance to which
Tenant is then entitled, based upon paid receipts submitted to Landlord. Tenant
shall provide a proposed monthly requisition no later than the twentieth (20th)
day of the calendar month preceding the month in which Tenant requests such
disbursement in order
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to permit Landlord to process Tenant's request by the tenth (10th) day of the
following month. It is hereby agreed that all leasehold improvements paid for by
Landlord out of the Allowance shall immediately become the property of Landlord
upon completion unless otherwise agreed to in writing. In the event the total
cost of the Initial Leasehold Improvements exceeds the Allowance, all such
excess costs shall be solely payable by Tenant. In no event shall any contractor
of Tenant be considered as a third party beneficiary hereunder, and Landlord's
agreement to provide payments directly to Tenant's contractor shall not create
any contractual relationship between Landlord and such contractor, or otherwise
constitute an acknowledgment or representation by Landlord that the particular
work being paid for by Landlord has been performed in accordance with the
specifications therefor, or is otherwise sufficient to fulfill Tenant's
expectations.
XXIX. HOLDING OVER.
In the event of holding over by Tenant after expiration or other
termination of this Lease or in the event Tenant continues to occupy the
Premises after the termination of Tenant's right of possession pursuant to
Articles XXII and XXIII hereof, occupancy of the Premises subsequent to such
termination or expiration shall be that of a tenancy at sufferance and in no
event for month-to-month or year-to-year, but Tenant shall, throughout the
entire holdover period, be subject to all the terms and provisions of this Lease
and shall pay for its use and occupancy an amount (on a per month basis without
reduction for any partial months during any such holdover) equal to twice the
sum of the Base Rental and Additional Base Rental due for the period immediately
preceding such holding over, provided that in no event shall Base Rental and
Additional Base Rental during the holdover period be less than the fair market
rental for the Premises. No holding over by Tenant or payments of money by
Tenant to Landlord after the expiration of the term of this Lease shall be
construed to extend the Lease Term or prevent Landlord from recovery of
immediate possession of the Premises by summary proceedings or otherwise. In
addition to the obligation to pay the amounts set forth above during any such
holdover period, Tenant also shall be liable to Landlord for all damage,
including any consequential damage, which Landlord may suffer by reason of any
holding over by Tenant, and Tenant shall indemnify Landlord against any and all
claims made by any other tenant or prospective tenant against Landlord for delay
by Landlord in delivering possession of the Premises to such other tenant or
prospective tenant.
XXX. SUBORDINATION TO MORTGAGES.
Tenant accepts this Lease subject and subordinate to any mortgage, deed
of trust, ground lease or other lien presently existing or hereafter arising
upon the Premises, or upon the Building and/or the Property and to any renewals,
modifications, refinancings and extensions thereof (any such mortgage, deed of
trust, lease or other lien being hereinafter referred to as a "Mortgage", and
the person or entity having the benefit of same being referred to hereinafter as
a "Mortgagee"), but Tenant agrees that any such Mortgagee shall have the right
at any time to subordinate such Mortgage to this Lease on such terms and subject
to such conditions as such Mortgagee may deem appropriate in its discretion
provided the mortgagee for itself and any party claiming by, through or under
such mortgagee agrees in writing to recognize this Lease in the event it or such
party acquires the Building by foreclosure or deed-in-lieu of foreclosure.
Tenant agrees upon demand to execute such further instruments subordinating this
Lease, acknowledging the subordination of this Lease or attorning to the holder
of any such Mortgage as Landlord may reasonably request. If any person shall
succeed to all or part of Landlord's interests in the Premises whether by
purchase, foreclosure, deed in lieu of foreclosure, power of sale, termination
of lease or otherwise, and if and as so requested or required by such
successor-in-interest, Tenant shall, without charge, attorn to such
successor-in-interest.
Tenant waives the provisions of any statute or rule of law, now or
hereafter in effect, which may give or purport to give Tenant any right to
terminate or otherwise adversely affect this Lease and the obligations of Tenant
hereunder in the event that any such
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foreclosure proceeding is prosecuted or completed. In addition, if the
Landlord's leasehold interest in any ground lease shall be terminated, Tenant
agrees that this Lease shall, at the option of the ground lessor, remain in full
force and effect (or if terminated by law as a result of Landlord's interest
being terminated, Tenant will enter into a new Lease with the identical terms
and conditions of this Lease). Tenant agrees to give any Mortgagee, by certified
mail, return receipt requested, a copy of any notice of default served upon
Landlord, provided that prior to such notice Tenant has been notified in writing
(by way of notice of Assignment of Rents and Leases, or otherwise) of the
address of such mortgagees and/or trust deed holders. Tenant further agrees that
if Landlord shall have failed to cure such default within the time provided for
in this Lease, then the mortgagees and/or trust deed holders shall have an
additional thirty (30) days within which to cure such default or if such default
cannot be cured within that time, then such additional time as may be necessary
if within such thirty (30) days, the mortgagee and/or trust deed holder has
commenced and is diligently pursuing the remedies necessary to cure such default
(including but not limited to commencement of foreclosure proceedings, if
necessary, to effect such cure), in which event this Lease shall not be
terminated while such remedies are being so diligently pursued. Tenant agrees
that in the event of the sale of the Land or the Building, by foreclosure or
deed in lieu thereof, Tenant shall substitute the letter of credit, if any, held
by Landlord hereunder in the name of the new purchaser, upon surrender of the
letter of credit then held by the former landlord hereunder. Landlord agrees to
turn over to the purchaser at such sale any Security Deposit paid by Tenant to
Landlord in connection with this Lease whereupon such purchaser shall be
thereafter responsible for its return to Tenant. Tenant further agrees that any
successor to Landlord's interest shall not be bound by (i) any payment of
monthly Rent or Additional Rent for more than one (1) month in advance, except
prepayments in the nature of security for the performance by Tenant of its
obligations under this Lease or (ii) any amendment or modification of this Lease
made without the consent of Landlord's mortgagee or such successor in interest.
Landlord agrees to use all reasonable efforts to obtain from the party
presently holding the note secured by a deed of trust against the Building, and
shall, as a condition to any future subordination obtain from any future
Mortgagee, an agreement (a "Nondisturbance Agreement") which shall provide that,
as long as Tenant is not in default under this Lease after written notice and
expiration of the applicable cure period, this Lease will not be terminated
during the Lease term hereof as a result of any foreclosure or conveyance in
lieu of foreclosure under the deed of trust on the Building held by such
mortgagee. Any such Nondisturbance Agreement shall be in form and content as
required by Landlord's mortgagee, and shall also include such subordination and
attornment provisions as such mortgagee may reasonably require. Landlord has
delivered to Tenant the form of Nondisturbance Agreement received from its
present lender, with the understanding that such lender will not complete its
review of this Lease until it has received a final signed copy. In the event
Tenant desires to negotiate the provisions contained in any such Nondisturbance
Agreement Tenant shall indemnify and hold Landlord harmless from any costs or
expenses incurred with either Landlord's or Lender's counsel in connection
therewith. The form of Nondisturbance Agreement to be used by Landlord's current
lender has been provided to Tenant. Landlord shall obtain approval thereof by
its lender within thirty (30) days of receipt of such agreement signed by
Tenant.
XXXI. ATTORNEYS' FEES.
In the event that Landlord should retain counsel and/or institute any
suit against Tenant for violation of or to enforce any of the covenants or
conditions of this Lease, or should Tenant institute any suit against Landlord
for violation of any of the covenants or conditions of this Lease, or should
either party intervene in any suit in which the other is a party to enforce or
protect its interest or rights hereunder, the prevailing party in any such suit
shall be entitled to all of its costs, expenses and reasonable fees of its
attorney(s) (if and to the extent permitted by law) in connection therewith.
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XXXII. NOTICE.
Whenever any demand, request, approval, consent or notice ("Notice")
shall or may be given to either of the parties by the other, each such Notice
shall be in writing and shall be sent by registered or certified mail with
return receipt requested, or sent by overnight courier service (such as Federal
Express) at the respective addresses of the parties for notices as set forth in
Section I.A.10. of this Lease, provided that if Tenant has vacated the Premises
or an Event of Default has occurred and is continuing under this Lease, Landlord
may serve Notice by any manner permitted by law. Any Notice under this Lease
delivered by registered or certified mail shall be deemed to have been given,
delivered, received and effective on the earlier of (a) the third day following
the day on which the same shall have been mailed with sufficient postage prepaid
or (b) the delivery date indicated on the return receipt. Notice sent by
overnight courier service shall be deemed given, delivered, received and
effective upon the day after such notice is delivered to or picked up by the
overnight courier service. Either party may, at any time, change its Notice
Address by giving the other party Notice stating the change and setting forth
the new address.
XXXIII. ESTOPPEL CERTIFICATES.
Tenant agrees, at any time and from time to time during the Term of
this Lease, upon not more than ten (10) days prior written notice by Landlord,
to execute, acknowledge and deliver to Landlord a statement certifying to
substantially the following provisions (recognizing that any of such statement
may be modified by Tenant to reflect the then state of facts): (i) a statement
that this Lease is unmodified and in full force and effect (or if there have
been modifications, that the Lease is in full force as effect as modified and
stating the modifications), (ii) a statement of the dates to which the Rent and
any other charges hereunder have been paid by Tenant, (iii) a statement of
whether or not, to the best knowledge of Tenant, Landlord is in default in the
performance of any covenant, agreement or condition contained in this Lease, and
if so, specifying each such default of which Tenant may have knowledge, (iv) a
statement of the address to which notices to Tenant should be sent, (v) a
statement that all work required to be performed by the Landlord under this
Lease has been completed and that Tenant accepts the Premises and improvements
therein and/or that all payments of the Allowance have been satisfied by
Landlord, (vi) a statement that Tenant will not attempt to terminate this Lease
by reason of Landlord's default or omission without giving written notice of
such default or omission to Landlord and any mortgagee of which Tenant has
knowledge and (vi) such other statement or statements as Landlord, any
prospective purchaser of the Building or the Land, any mortgagee or prospective
mortgagee of the Building or the Land or of Landlord's interest in either and/or
any prospective assignee of any such mortgagee, may reasonably request. Any such
statement delivered pursuant hereto, may be relied upon by any owner of the
Building or the Land, any prospective purchaser of the Building or the Land, any
mortgagee or prospective mortgagee of the Building or the Land or of Landlord's
interest in either, or any prospective assignee of any such mortgagee. Tenant
will agree to make such reasonable changes or modifications to this Lease as may
be required by any mortgagee of the Building and/or the Land, provided that such
changes or modifications shall not increase the amount of Base Rental,
Additional Base Rental, shorten the Term of this Lease or change or redefine the
Premises, or otherwise adversely affect the rights or obligations of the parties
hereunder.
XXXIV. LANDLORD'S LIEN.
In addition to any statutory lien for rent in Landlord's favor,
Landlord (the secured party for purposes hereof) shall have and Tenant (the
debtor for purposes hereof) hereby grants to Landlord, an express contract lien
and a continuing security interest to secure the payment of all Rent due
hereunder from Tenant, upon all goods, wares, equipment, fixtures, furniture,
inventory, accounts, contract rights, chattel paper and other personal property
of Tenant (and any transferees or other occupants of the Premises) presently or
hereafter situated on the Premises and upon all proceeds of any insurance which
may accrue to Tenant by reason of damage or destruction of any such property. In
the event of a default under this Lease, Landlord shall have, in addition to any
other remedies
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provided herein or by law, all rights and remedies under the Uniform Commercial
Code of the state in which the Premises is located, including without limitation
the right to sell the property described in this paragraph at public or private
sale upon ten (10) days' notice to Tenant, which notice Tenant hereby agrees is
adequate and reasonable. Tenant hereby agrees to execute such other instruments
necessary or desirable in Landlord's discretion to perfect the security interest
hereby created. Any statutory lien for rent is not hereby waived, the express
contractual lien herein granted being in addition and supplementary thereto.
Landlord and Tenant agree that this Lease and the security interest granted
herein serve as a financing statement, and a copy or photographic or other
reproduction of this Paragraph of this Lease may be filed of record by Landlord
and have the same force and effect as the original. Tenant warrants and
represents that the collateral subject to the security interest granted herein
is not purchased or used by Tenant for personal, family or household purposes.
Tenant further warrants and represents to Landlord that the lien granted herein
constitutes a first and superior lien and that Tenant will not allow the placing
of any other lien upon any of the property described in this Article without the
prior written consent of Landlord.
XXXV. EXCEPTED RIGHTS.
This Lease does not grant any rights to light or (except for the
liebert vents) air over or about the Building. Landlord specifically excepts and
reserves to itself the use of any roofs, the exterior portions of the Premises,
all rights to the land and improvements below the improved floor level of the
Premises, the improvements and air rights above the Premises and the
improvements and air rights located outside the demising walls of the Premises,
and such areas within the Premises as are required for installation of utility
lines and other installations required to serve any occupants of the Building
and the right to maintain and repair the same, and no rights with respect
thereto are conferred upon Tenant unless otherwise specifically provided herein.
Landlord further reserves to itself the right from time to time: (a) to change
the Building's name or street address; (b) to install, fix and maintain signs on
the exterior and interior of the Building; (c) to designate and approve window
coverings; (d) to make any decorations, alterations, additions, improvements to
the Building, or any part thereof (including the Premises) which Landlord shall
desire, or deem necessary for the safety, protection, preservation or
improvement of the Building, or as Landlord may be required to do by law; (e) to
have access to the Premises to perform its duties and obligations and to
exercise its rights under this Lease; (f) to retain at all times and to use
pass-keys to all locks within and into the Premises recognizing nevertheless
that Tenant may at its election install its own security in the Premises
provided that Tenant provides Landlord in advance with information necessary to
allow Landlord (and emergency personnel) ready access to the Premises in the
event of circumstances reasonably believed by Landlord or such personnel to
constitute an emergency); (g) to approve the weight, size, or location of heavy
equipment, or articles in and about the Premises; (h) to close or restrict
access to the Building at all times other than Normal Business Hours subject to
Tenant's right to admittance at all times under such regulations as Landlord may
prescribe from time to time, or to close (temporarily or permanently) any of the
entrances to the Building; (i) to change the arrangement and/or location of
entrances of passageways, doors and doorways, corridors, elevators, stairs,
toilets and public parts of the Building; (j) if Tenant has vacated the Premises
during the last six (6) months of the Lease Term, to perform additions,
alterations and improvements to the Premises in connection with a reletting or
anticipated reletting thereof without being responsible or liable for the value
or preservation of any then existing improvements to the Premises; and (k) to
grant to anyone the exclusive right to conduct any business or undertaking in
the Building. Landlord, in accordance with Article XII hereof, shall have the
right to enter the Premises in connection with the exercise of any of the rights
set forth herein and such entry into the Premises and the performance of any
work therein shall not constitute a constructive eviction or entitle Tenant to
any abatement or reduction of Rent by reason thereof.
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XXXVI. SURRENDER OF PREMISES.
At the expiration or earlier termination of this Lease or Tenant's
right of possession hereunder, Tenant shall remove all Tenant's Property from
the Premises, remove all Required Removables designated by Landlord and quit and
surrender the Premises to Landlord, broom clean, and in good order, condition
and repair, ordinary wear and tear excepted. If Tenant fails to remove any of
Tenant's Property within one (1) day after the termination of this Lease or
Tenant's right to possession hereunder, Landlord, at Tenant's sole cost and
expense, shall be entitled to remove and/or store such Tenant's Property and
Landlord shall in no event be responsible for the value, preservation or
safekeeping thereof. Tenant shall pay Landlord, upon demand, any and all
expenses caused by such removal and all storage charges against such property so
long as the same shall be in the possession of Landlord or under the control of
Landlord. In addition, if Tenant fails to remove any Tenant's Property from the
Premises or storage, as the case may be, within ten (10) days after written
notice from Landlord, Landlord, at its option, may deem all or any part of such
Tenant's Property to have been abandoned by Tenant and title thereof shall
immediately pass to Landlord.
XXXVII. PARKING.
A. Any areas of the Building which may be set aside by Landlord for the
parking of automobiles may be used by Tenant and Tenant's visitors, invitees and
licensees while engaged in business in the Premises, for the parking of their
automobiles, in common with like use by other tenants of space in the Building,
but subject to any charges which Landlord as its operator may impose from time
to time on such use. The use of said automobile parking areas by Tenant and
Tenant's visitors, invitees and licensees shall be at their sole risk and
expense, and in no event shall Landlord have any liability for damage to, theft
or loss of property of the Tenant or of Tenant's employees, visitors, licensees
or invitees suffered or sustained in or about said parking areas. Said parking
areas (if any) shall be under the exclusive control of Landlord, or its operator
who shall have the right to establish rules and regulations governing the use of
said parking areas, and the right to change such rules and regulations from time
to time, and the right to limit or terminate the right of Tenant, its visitors,
invitees and licensees or any other parties to use such parking areas. Tenant
agrees to keep, observe and comply with all such rules and regulations so
established by Landlord, and will direct and require its employees, licensees,
visitors and invitees to comply therewith. No employee of Landlord is authorized
to accept possession of any vehicle from the Tenant or from Tenant's employees,
licensees, visitors or invitees, nor to accept custody of any articles from
Tenant.
B. Subject to the terms and conditions hereinafter set forth in this
Paragraph (B), Tenant may during the term of this Lease, execute with Landlord
or its designee, parking contracts in the Building garage, at the ratio of one
(1) contract for each 1,800 rentable square feet of area demised hereunder, at
locations to be designated from time to time by Landlord, for parking of
automobiles of Tenant's executives and personnel, such contracts to be upon the
monthly rental and upon the terms and conditions, rules and regulations
prevailing and imposed from time to time by Landlord or its designees. The terms
of such garage contracts shall be as set forth therein. In addition, Tenant will
execute and deliver promptly upon Landlord's request any future garage contracts
which Landlord may require from time to time, covering the spaces to be leased
under this Section XXXVII.B.
C. Upon expiration or any termination of any such garage contracts, the
Tenant will cause all of its automobiles and those of its executives and
personnel (or such automobiles to which the terminated, and not renewed, garage
contract has ceased, as the case may be) to be immediately removed from the
garage. If this Lease is terminated or expires, then in any such event all
parking contracts of Tenant for parking shall thereupon also terminate.
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XXVIII. ACCESS.
Tenant shall have access to the Premises twenty-four (24) hours per
day, seven (7) days per week (subject, however, to the rules and regulations
established from time to time by Landlord for the Building). Access to the
Building entrance outside the Normal Business Hours will be by means of a
security card access system, guard system or other system or arrangement as
established from time to time by Landlord. There will be a minimum of one (1)
elevator in operation for Tenant's use outside of the Normal Business Hours.
In the event of any emergency, or to prevent the interruption of
essential services, Tenant shall have access (without any requirement of prior
notification to Landlord but to be followed by written notice to the Landlord
within three (3) business days thereafter) at all times, 24 hours per day, seven
(7) days per week, 365 days a year, to the Premises, roof, ducts and telephone
closets, equipment rooms and equipment areas, (subject to the requirements of
the next sentence in the case of certain areas more particularly described
therein) required for the replacement and repair of the Connecting Equipment.
Provided Tenant shall first install at its sole cost and expense appropriate
card readers with Landlord's security company at the entrances therefor, in
order to permit Landlord with the ability to monitor Tenant's access thereto at
all times, Tenant shall also have access pursuant to the immediately preceding
sentence to the roof, equipment rooms and electrical systems of the Building.
Tenant agrees to give Landlord a courtesy notice of any access made by Tenant to
any portion of the Building beyond the Premises within the hour of such access,
or, to the extent practical, in advance. Landlord agrees to cooperate with
Tenant in coordinating Tenant's access to any other areas required in order for
Tenant to perform requisite repairs and/or replacements required by reason of
any emergency as described above, following notice to Landlord from Tenant.
XXXIX. MISCELLANEOUS.
A. If any term or provision of this Lease, or the application thereof
to any person or circumstance shall, to any extent, be invalid or unenforceable,
the remainder of this Lease, or the application of such term or provision to
persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each term and provision of
this Lease shall be valid and enforced to the fullest extent permitted by law.
This Lease represents the result of negotiations between Landlord and Tenant,
each of which has been (or has had opportunity to be) represented by counsel of
its own selection, and neither of which has acted under duress or compulsion,
whether legal, economic or otherwise. Consequently, Landlord and Tenant agree
that the language in all parts of the Lease shall in all cases be construed as a
whole according to its fair meaning and neither strictly for nor against
Landlord or Tenant.
B. Tenant agrees not to record this Lease or any memorandum hereof
without Landlord's prior written consent.
C. This Lease and the rights and obligations of the parties hereto
shall be interpreted, construed, and enforced in accordance with the laws of the
state in which the Building is located.
D. Events of "Force Majeure" shall include strikes, riots, acts of God,
shortages of labor or materials, war, governmental law, regulations or
restrictions and any other cause whatsoever that is beyond the control of
Landlord or Tenant, as the case may be. Whenever a period of time is herein
prescribed for the taking of any action by Landlord or Tenant, such party shall
not be liable or responsible for, and there shall be excluded from the
computation of such period of time, any delays due to events of Force Majeure.
However, in no event shall Force Majeure serve to delay the due dates of any
payment required hereunder.
E. Landlord shall have the right to transfer and assign, in whole or in
part, all of its rights and obligations hereunder and in the Building and
Property referred to herein, and
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in such event and upon such transfer, Landlord shall be released from any
further obligations hereunder, and Tenant agrees to look solely to such
successor in interest of Landlord for the performance of such obligations
provided such successor has assumed or is deemed to have assumed all prospective
obligations of Landlord under this Lease and Tenant has been given notice of the
successor. Landlord agrees to give Tenant notice of any such successor and to
tender to such successor any security deposit then held by Landlord hereunder.
Any such successor shall be subject to the terms and provisions contained within
this Lease.
F. Tenant hereby represents to Landlord that it has dealt directly with
and only with the party[ies] designated as the Broker under Section 1 of this
Lease as the broker[s] in connection with this Lease. Tenant agrees to indemnify
and hold Landlord and the Landlord Related Parties harmless from all claims of
any other brokers claiming to have represented Tenant in connection with this
Lease. Landlord agrees to indemnify and hold Tenant and the Tenant Related
Parties harmless from all claims of any brokers claiming to have represented
Landlord in connection with this Lease. Landlord agrees to compensate the Broker
in accordance with the terms of a separate written agreement heretofore entered
into by and between Landlord and the Broker.
G. If there is more than one Tenant, or if the Tenant is comprised of
more than one person or entity, the obligations hereunder imposed upon Tenant
shall be joint and several obligations of all such parties. All notices,
payments, and agreements given or made by, with or to any one of such persons or
entities shall be deemed to have been given or made by, with or to all of them.
H. In the event Tenant is a corporation (including any form of
professional association), partnership (general or limited), or other form of
organization other than an individual (each such entity is individually referred
to herein as an "Organizational Entity"), then Tenant hereby covenants, warrants
and represents: (1) that such individual is duly authorized to execute or attest
and deliver this Lease on behalf of Tenant in accordance with the organizational
documents of Tenant and has been duly appointed as the attorney-in-fact for the
Tenant; (2) that this Lease is binding upon Tenant; (3) that Tenant is duly
organized and legally existing in the state of its organization, and is
qualified to do business in the state in which the Premises is located; and (4)
that the execution and delivery of this Lease by Tenant will not result in any
breach of, or constitute a default under any mortgage, deed of trust, lease,
loan, credit agreement, partnership agreement or other contract or instrument to
which Tenant is a party or by which Tenant may be bound. If Tenant is an
Organizational Entity, upon request, Tenant will, prior to the Commencement
Date, deliver to Landlord true and correct copies of all organizational
documents of Tenant, including, without limitation, copies of an appropriate
resolution or consent of Tenant's board of directors or other appropriate
governing body of Tenant authorizing or ratifying the execution and delivery of
this Lease, which resolution or consent will be duly certified to Landlord's
satisfaction by an appropriate individual with authority to certify such
documents, such as the secretary or assistant secretary or the managing general
partner of Tenant.
I. Tenant acknowledges that the financial capability of Tenant to
perform its obligations hereunder is material to Landlord and that Landlord
would not enter into this Lease but for its belief, based on its review of
Tenant's financial statements, that Tenant is capable of performing such
financial obligations. Tenant hereby represents, warrants and certifies to
Landlord that its financial statements previously furnished to Landlord were at
the time given true and correct in all material respects and that there have
been no material subsequent changes thereto as of the date of this Lease. At any
time during the Lease Term, Tenant shall provide Landlord, upon ten (10) days'
prior written notice from Landlord, with its most current financial statement if
requested by Landlord in connection with a proposed sale or refinancing of the
Building. Such statement shall be prepared in accordance with generally accepted
accounting principles and, if such is the normal practice of Tenant, shall be
audited by an independent certified public accountant.
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J. Except as expressly otherwise herein provided, with respect to all
required acts of Tenant, time is of the essence of this Lease. This Lease shall
create the relationship of Landlord and Tenant between the parties hereto.
K. This Lease and the covenants and conditions herein contained shall
inure to the benefit of and be binding upon Landlord and Tenant and their
respective permitted successors and assigns.
L. Notwithstanding anything to the contrary contained in this Lease,
the expiration of the Lease Term, whether by lapse of time or otherwise, shall
not relieve Tenant or Landlord from their respective obligations accruing prior
to the expiration of the Lease Term, and such obligations shall survive any such
expiration or other termination of the Lease Term.
M. The headings and titles to the paragraphs of this Lease are for
convenience only and shall have no affect upon the construction or
interpretation of any part hereof.
N. LANDLORD HAS DELIVERED A COPY OF THIS LEASE TO TENANT FOR TENANT'S
REVIEW ONLY, AND THE DELIVERY HEREOF DOES NOT CONSTITUTE AN OFFER TO TENANT OR
OPTION. THIS LEASE SHALL NOT BE EFFECTIVE UNTIL AN ORIGINAL OF THIS LEASE
EXECUTED BY BOTH LANDLORD AND TENANT AND AN ORIGINAL GUARANTY, IF ANY, EXECUTED
BY EACH GUARANTOR IS DELIVERED TO AND ACCEPTED BY LANDLORD.
O. Tenant shall, and may peacefully have, hold, and enjoy the Premises,
subject to the other terms of this Lease (including, without limitation, Article
XXX hereof), provided that Tenant pays the Rent herein recited to be paid by
Tenant and performs all of Tenant's covenants and agreements herein contained.
This covenant and any and all other covenants of Landlord shall be binding upon
Landlord and its successors only during its or their respective periods of
ownership of the Landlord's interest hereunder.
P. Landlord hereby advises Tenant that Landlord has no actual knowledge
or credible reports of the presence in the Premises or in the Building or in or
on the land associated with the Building of any Hazardous Material, recognizing,
however, that Landlord has not undertaken any studies or investigations
pertaining to same. Tenant shall defend, indemnify and hold harmless Landlord
from all claims, costs or damages of any kind whatsoever arising during or after
the Term hereof from or in connection with the presence or suspected presence of
Hazardous Materials (including without limitation the diesel fuel permitted
below) in the Premises, the Building or the soil, groundwater or soil vapor on
or under the Building to the extent arising by reason of any act or omission of
Tenant or any agent, employee or contractor of Tenant. Landlord acknowledges
that Tenant shall be storing in lawful manner in strict accordance with all
Environmental Law diesel fuel for its diesel generator to be located at the
Building. "Hazardous Material" means (1) asbestos and any asbestos containing
material and any substance that is then defined or listed in, or otherwise
classified pursuant to, any Environmental Law (as hereinafter defined) as a
"hazardous substance," "hazardous material," "hazardous waste," "infectious
waste," "toxic substance," "toxic pollutant" or any other formulation intended
to define, list, or classify substances by reason of deleterious properties such
as ignitability, corrosivity, reactivity, carcinogenicity, toxicity,
reproductive toxicity, or Toxicity Characteristic Leaching Procedure (TCLP)
toxicity, (2) any petroleum and drilling fluids, produced waters, and other
wastes associated with the exploration, development or production of crude oil,
natural gas, or geothermal resources, and (3) any petroleum product,
polychlorinated biphenyls, urea formaldehyde, radon gas, radioactive material
(including any source, special nuclear, or by-product material), medical waste,
chlorofluorocarbons lead or lead-based product, and any other substance whose
presence could be detrimental to the Building or the Land or hazardous to health
or the environment. Environmental Law" means any present and future Law and any
amendments (whether common law, statute, rule, order, regulation or otherwise),
permits and other requirements or guidelines of governmental authorities
applicable to the Building or the Land and relating to the environment and
environmental conditions or to any Hazardous Material (including,
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without limitation, CERCLA, 42 U.S.C. section 9601 et seq., the Resource
Conservation and Recovery Act of 1976, 42 U.S.C. section 6901 et seq., the
Hazardous Materials Transportation Act, 49 U.S.C. section 1801 et seq., the
Federal Water Pollution Control Act, 33 U.S.C. section 1251 et seq., the Clean
Air Act, 42 U.S.C. section 7401 et seq., the Toxic Substances Control Act, 15
U.S.C. section 2601 et seq., the Safe Drinking Water Act, 42 U.S.C. section 300f
et seq., the Emergency Planning and Community Right-To-Know Act, 42 U.S.C.
section 11.01 et seq., the Occupational Safety and Health Act, 29 U.S.C. section
651 et seq., and any so-called "Super Fund" or "Super Lien" law, any Law
requiring the filing of reports and notices relating to hazardous substances,
environmental laws administered by the Environmental Protection Agency, and any
similar state and local Laws, all amendments thereto and all regulations,
orders, decisions, and decrees now or hereafter promulgated thereunder
concerning the environment, industrial hygiene or public health or safety).
Q. Landlord has been advised by Tenant that the business intended to be
conducted by Tenant at the Premises requires the installation of certain
telecommunications equipment owned by customers and co-locators of Tenant in
order to interconnect with Tenant's facilities. Tenant shall be entitled to
license to such customers and co-locators the right to access and use portions
of the Premises to locate their equipment (as opposed to operate and conduct
business within the Premises) during the Lease Term for such purposes without
further consent from Landlord notwithstanding the provisions contained in
Article XIII to the contrary. All such usage and access by Tenant's customers
and co-locators shall remain subject to the remaining terms and conditions of
this Lease, and shall be conducted in strict accordance with applicable laws,
rules and regulations. Nothing contained herein shall be deemed to create a
landlord-tenant relationship between Landlord and any such co-locator or
customer of Tenant, nor to constitute the consent of Landlord to anything other
than a license to locate equipment within the Premises subject to the remaining
terms and provisions of this Lease.
XXXX. RENEWAL OPTION TERMS.
Tenant shall have and is hereby granted options to extend the Term
("Option") for up to two (2) periods of five (5) additional Lease Years each
(herein each referred to as an "Extension Period") provided (i) Tenant gives
written notice to Landlord of its election to exercise such Option no earlier
than fifteen (15) months and no later than twelve (12) months prior to the
expiration of the last Lease Year of the Term (recognizing that the Term shall
also include any previously exercised Extension Period); and (ii) no Event of
Default shall then remain uncured, and no Event of Default exists at the
commencement of the Extension Period. In the event Tenant assigns or sublets the
Premises in violation of the terms of this Lease, this Option shall become null
and void.
All terms and conditions of this Lease, including without limitation,
all provisions governing the payment of Additional Rent, shall remain in full
force and effect during the Extension Periods, except that:
(a) Base Rental payable during each such Extension Period shall be
at the 95% of then-current market rental rate then being
offered by landlords for comparable space in comparable
buildings in the central business district of the District of
Columbia (the "Market Rate") at the time of the commencement
of the respective Extension Period, but in no event less than
the fully escalated Base Rent in effect for the calendar month
immediately prior to the commencement of the Extension Period.
Each such Extension Period shall be upon the same terms and
conditions of this Lease, with the exception that (i) Landlord
shall not be required to provide any concessions, allowances,
incentives or similar items ("concessions"); and (ii) no
brokerage commissions shall be payable by Landlord in
connection with the Option.
(b) Landlord shall not be required to provide any Allowance during
either Extension Period. Landlord and Tenant shall negotiate
in good faith to
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determine the amount of Base Rent for the Extension Period
within thirty (30) days of the date of Landlord's receipt of
Tenant's written notice of its election to exercise the
Option. In the event Landlord and Tenant are unable to agree
upon the Base Rent for the Extension Period within said thirty
(30)-day period, the Base Rent shall be determined by the
three (3) broker method. In such event, Landlord and Tenant
shall each select a non-related impartial commercial real
estate broker having no less than ten (10) years experience in
the Central Business District of the District of Columbia and
generally recognized as reputable within the real estate
industry. Within ten days of selection by Landlord and Tenant
of their respective brokers, such brokers shall appoint a
similarly qualified third broker. Each broker shall consider
all components of this Lease. Fair market rental value shall
be determined with reference to the average or normal values
being achieved by landlords in leases entered into with
private sector tenants for comparable space in comparable
buildings in equally desirable locations within the same
market assuming that the Tenant is responsible for payment of
its own electric and char services and assuming no concessions
are provided by Landlord and a constant 3% per annum fixed
increase during the respective extension period, and assuming
that the tenant is being provided with the roof-top and
exterior area rights provided under this Lease for the benefit
of Tenant. If the three brokers cannot agree to a net
effective market rental rate, the determination of the broker
who is the mean of the two extremes shall be binding and
conclusive. Each party shall pay all costs, fees and expenses
of the broker they select and the parties shall share equally
the costs, fees and expenses of the third broker. Upon
agreement on the Base Rent whether by the parties or the
brokers, Landlord and Tenant shall enter into an amendment
modifying this Lease to set forth the Base Rent for the
Premises during the Extension Period within ten (10) days
following written request of either party.
XXXXI. ENTIRE AGREEMENT.
This Lease Agreement, including the following Exhibits:
Exhibit A - Outline and Location of Premises
Exhibit B - Rules and Regulations
Exhibit C - Commencement Letter
constitutes the entire agreement between the parties hereto with
respect to the subject matter of this Lease and supersedes all prior agreements
and understandings between the parties related to the Premises, including all
lease proposals, letters of intent and similar documents. TENANT EXPRESSLY
ACKNOWLEDGES AND AGREES THAT LANDLORD HAS NOT MADE AND IS NOT MAKING, AND
TENANT, IN EXECUTING AND DELIVERING THIS LEASE, IS NOT RELYING UPON, ANY
WARRANTIES, REPRESENTATIONS, PROMISES OR STATEMENTS, EXCEPT TO THE EXTENT THAT
THE SAME ARE EXPRESSLY SET FORTH IN THIS LEASE. ALL UNDERSTANDINGS AND
AGREEMENTS HERETOFORE MADE BETWEEN THE PARTIES ARE MERGED IN THIS LEASE WHICH
ALONE FULLY AND COMPLETELY EXPRESSES THE AGREEMENT OF THE PARTIES, NEITHER PARTY
RELYING UPON ANY STATEMENT OR REPRESENTATION NOT EMBODIED IN THIS LEASE. THIS
LEASE MAY BE MODIFIED ONLY BY A WRITTEN AGREEMENT SIGNED BY LANDLORD AND TENANT.
LANDLORD AND TENANT EXPRESSLY AGREE THAT THERE ARE AND SHALL BE NO IMPLIED
WARRANTIES OF MERCHANTABILITY, HABITABILITY, SUITABILITY, FITNESS FOR A
PARTICULAR PURPOSE OR OF ANY OTHER KIND ARISING OUT OF THIS LEASE, ALL OF WHICH
ARE HEREBY WAIVED BY TENANT, AND THAT THERE ARE NO WARRANTIES WHICH EXTEND
BEYOND THOSE EXPRESSLY SET FORTH IN THIS LEASE.
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IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the day and year first above written.
WITNESS/ATTEST: LANDLORD:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ASSOCIATES
/s/Signature Illegible
J. ▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
General Partner
TENANT:
ATTEST: UNIVERSAL ACCESS, INC.
N/A By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
(Secretary) Authorized Officer and
Attorney-In-Fact
(Corporate Seal) /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Secretary and Chief
Operating Officer
44
EXHIBIT A
PREMISES
--------
[CHART OMITTED]
45
[CHART OMITTED]
46
[CHART OMITTED]
47
[CHART OMITTED]
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EXHIBIT B
BUILDING RULES AND REGULATIONS
The following rules and regulations shall apply, where applicable, to
the Premises, the Building, the parking garage associated therewith (if any),
the Property and the appurtenances thereto:
The Landlord may, upon request by any Tenant, waive the compliance by
such Tenant of any of the foregoing rules and regulations, provided that (a) no
waiver shall be effective unless signed by Landlord or Landlord's authorized
agent, (b) any such waiver shall not relieve such Tenant from the obligation to
comply with such rule or regulation in the future unless expressly consented to
by Landlord, and (c) no waiver granted to any Tenant shall relieve any other
Tenant from the obligation of complying with the foregoing rules and regulations
unless such other Tenant has received a similar waiver in writing from Landlord.
In the event of any conflict between these Rules and Regulations and
the terms of the attached Lease, the terms of the attached Lease shall govern
and control.
1. The sidewalks, entrances, passages, courts, elevators,
vestibules, stairways, corridors or halls or other parts of
the Building not occupied by any Tenant shall not be
obstructed or encumbered by any Tenant or used for any purpose
other than ingress and egress to and from the demised
premises. Landlord shall have the right to control and operate
the public portions of the Building, and the facilities
furnished for the common use of the Tenants, in such manner as
Landlord deems best for the benefit of the Tenants generally.
No Tenant shall permit the visit to the demised premises of
persons in such numbers or under such conditions as to
interfere with the use and enjoyment by other Tenants of the
entrances, corridors, elevators and other public portions of
facilities of the Building.
2. No awnings or other projections shall be attached to the
outside walls of the Building without the prior written
consent of the Landlord, which consent may be consented or
denied in Landlord's sole and exclusive discretion. No drapes,
blinds, shades, or screens shall be attached to or hung in, or
used in connection with, any window or door of the demised
premises, without the prior written consent of the Landlord
which shall not be unreasonably withheld, conditioned or
delayed. Such projections, curtains, blinds, shades, screens
or other fixtures must be of a quality, type, design and
color, and attached in the manner approved by Landlord.
3. No sign, advertisement, notice or other lettering shall be
exhibited, inscribed, painted or affixed by any Tenant on any
part of the outside or inside of the demised premises or the
Building without the prior written consent of the Landlord. In
the event of the violation of the foregoing by Tenant,
Landlord may remove same without any liability, and may charge
the expense incurred by such removal to the Tenant or Tenants
violating this rule. Interior signs on doors and directory
tablet shall be inscribed, painted or affixed for each Tenant
by the Landlord at the expense of such Tenant, and shall be of
a size, color and style reasonably acceptable to the Landlord.
4. No show cases or other articles shall be put in front of or
affixed to any part of the exterior of the Building, nor
placed in the halls, corridors or vestibules without the prior
written consent of the Landlord.
5. The water and wash closets and other plumbing fixtures shall
not be used for any purposes other than those for which they
were constructed, and no sweepings, rubbish, rags, or other
substances shall be thrown therein. All damages resulting from
any misuse of the fixtures shall be borne by the Tenant who,
or whose servants, employees, agents, visitors or licensees,
shall have caused the same.
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6. There shall be no marking, painting, drilling into or in any
way defacing any part of the demised premises or the Building.
No boring, cutting or stringing of wires shall be permitted.
Tenant shall not construct, maintain, use or operate within
the demised premises or elsewhere within or on the outside of
the Building, any electrical device, wiring or apparatus in
connection with a loud speaker system or other sound system
that can be heard outside the demised premises.
7. No bicycles, vehicles or animals (other than guide dogs),
birds or pets of any kind shall be brought into or kept in or
about the demised premises, and no cooking shall be done or
permitted by any Tenant on said premises. No Tenant shall
cause or permit any unusual or objectionable odors to be
produced upon or permeate from the demised premises.
8. No space in the Building shall be used for manufacturing, for
the storage of merchandise, or for the sale of merchandise,
goods or property of any kind at auction.
9. No Tenant shall make, or permit to be made, any unseemly or
disturbing noises or disturb or interfere with occupants of
this or neighboring buildings or premises of those having
business with them whether by the use of any musical
instrument, radio, talking machines, unmusical noise,
whistling, singing, or in any other way. No Tenant shall throw
anything out of the doors or windows or down the corridors or
stairs.
10. No inflammable, combustible or explosive fluid, chemical or
substance shall be brought or kept upon the demised premises
except for ordinary cleaning supplies.
11. No additional locks or bolts of any kind shall be placed upon
any of the doors, or windows by any Tenant, nor shall any
changes be made in existing locks or the mechanism thereof
without the prior written consent of the Landlord which shall
not be unreasonably withheld, conditioned or delayed. The
doors leading to the corridors or main halls shall be kept
closed during business hours, except as they may be used for
ingress or egress. Each Tenant shall, upon the termination of
his tenancy, restore to Landlord all keys of stores, offices,
storage, and toilet rooms either furnished to, or otherwise
procured by, such Tenant, and in the event of the loss of any
keys so furnished, such Tenant shall pay to the Landlord the
cost thereof.
12. All removals, or the carrying in or out of any safes, freight,
furniture or bulky matter of any description must take place
during the hours which the Landlord or its agent may
reasonably determine from time to time. The Landlord reserves
the right to inspect all freight to be brought into the
Building and to exclude from the Building all freight which
violates any of these Rules and Regulations or the lease of
which these Rules and Regulations are a part.
13. Any person employed by any Tenant to do janitor work within
the demised premises must obtain Landlord's consent and such
person shall, while in the Building and outside of said
demised premises, comply with all reasonable instructions
issued by the Property Manager of the Building. No Tenant
shall engage or pay any employees on the demised premises,
except those actually working for such Tenant on said
premises.
14. No Tenant shall purchase spring water, ice, coffee, soft
drinks, towels, or other like service from any company or
persons who, in Landlord's reasonable opinion, has proven to
be an unsatisfactory vendor.
15. Landlord shall have the right to prohibit any advertising by
any Tenant which, in Landlord's opinion, tends to impair the
reputation of the Building or its
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50
desirability as a building for offices, and upon written
notice from Landlord, Tenant shall refrain from or discontinue
such advertising.
16. The Landlord reserves the right to exclude from the Building
at all times any person who is not known or does not properly
identify himself to the Building management or watchman on
duty. Landlord may, at his option, require all persons
admitted to or leaving the Building between the hours of 6
P.M. and 7 A.M., Tuesdays through Fridays or at all times
after 6:00 P.M. on Friday through 7:00 A.M. on Mondays or at
all times during any legal holidays, to register. Each Tenant
shall be responsible for all persons for whom he authorizes
entry into or exit out of the Building, and shall be liable to
the Landlord for all acts of such persons.
17. The demised premises shall not be used for lodging or sleeping
or for any immoral or illegal purposes.
18. No Tenant shall occupy or permit any portion of the demised
premises to be used or occupied as an office for a public
stenographer or typist, or for the possession, storage,
'manufacture, or sale of liquor, narcotics, dope, tobacco in
any form, or as a ▇▇▇▇▇▇ or manicure shop, or as an employment
bureau, unless said Tenant's lease expressly grants permission
to do so. No Tenant shall engage or pay any employees on the
demised premises, except those actually working for such
Tenant on said premises, nor advertise for laborers giving an
address at said premises.
19. Each Tenant, before closing and leaving the demised premises
at any time, shall see that all windows are closed and all
lights turned off.
20. The requirements of Tenants will be attended to only upon
application at the office of the Building. Employees shall not
perform any work or do anything outside of their regular
duties, unless under special instruction from the management
of the Building.
21. Canvassing, soliciting and peddling in the Building is
prohibited and each Tenant shall cooperate to prevent the
same.
22. No water cooler, plumbing or electrical fixtures shall be
installed by any Tenant, except in accordance with the Lease.
23. There shall not be used in any space, or in the public halls
of the Building, either by any Tenant or by jobbers or others,
in the delivery or receipt of merchandise, any hand trucks,
except those equipped with rubber tires and side guards.
24. Access plates to underfloor conduits shall be left exposed.
where carpet is installed, carpet shall be cut around access
plates.
25. Mats, trash or other objects shall not be placed in the public
corridors.
26. Drapes installed by the Landlord for the use of the Tenant or
drapes installed by the Tenant, which are visible from the
exterior of the Building must be cleaned by Tenant at Tenant's
expense as required to maintain an image consistent with a
first class office building.
27. There shall be no incandescent bulbs or fixtures used in the
Building.
28. Portable fans and heaters or extension cords shall not be used
within the Building.
29. Microwaves, refrigerators, coffee makers, and warmers shall be
used solely within the kitchenette areas of the Premises.
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51
EXHIBIT C
COMMENCEMENT LETTER
-------------------
Date:______________________________________
Tenant:____________________________________
Address:___________________________________
Re: Commencement Letter with respect to that certain Lease dated _____
____________ by and between ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Associates, as Landlord, and
_______________________, as Tenant, for ________ square feet of Rentable Area on
_____________________ the _____________________ floor of the Building located at
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ___________________ N.W., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇.
DEAR ____________________:
In accordance with the terms and conditions of the above referenced
Lease, Tenant hereby accepts possession of the Premises and agrees as follows:
1. The Commencement Date of the Lease is_________________________;
2. The Termination Date of the Lease is _________________________.
Please acknowledge your acceptance of possession and agreement to the
terms set forth above by signing all three (3) copies of this Commencement
Letter in the space provided and returning two (2) fully executed copies of the
same to my attention.
Sincerely,
Agreed and Accepted:
Tenant: _____________________
By:__________________________
Name:________________________
Title:_______________________
Date:________________________