Exhibit 10.8
FIRST AMENDMENT TO LEASE
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THIS FIRST TO LEASE (this "Amendment") is made and entered into as of this
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day of May, 1997 by and between Teachers Insurance and Annuity Association of
America, a New York corporation ("Landlord") and Focal Communications
Corporation, a Delaware corporation("Tenant").
W I T N E S S E T H
WHEREAS, Landlord and Tenant have heretofore entered into that certain
lease dated as of December 31, 1996 (the "Leases"), pursuant to which Landlord
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leased to Tenant certain premises (the "Premises") on the lower level of the
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building commonly known as 000 Xxxxx XxXxxxx, Xxxxxxx, Xxxxxxxx (the
"Building");
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WHEREAS, Landlord and Tenant desire to amend the Lease according to the
terms hereof;
NOW THEREFORE, for and in consideration of the covenants and agreements
hereinafter set forth, and also in consideration of the sum of Ten Dollars
($10.00) and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Landlord and Tenant hereby mutually agree as
follows:
1. Controlling Language. Insofar as the specific terms and provisions of
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this Amendment purport to amend or modify or are in conflict with the specific
terms, provisions and exhibits of the Lease, the terms and provisions of this
Amendment shall govern and control; in all other respects, the terms, provisions
and exhibits of the Lease shall remain unmodified in full force and effect. All
capitalized terms not defined herein shall have the meaning given them in the
Lease.
2. Additional Space/Term. Landlord and Tenant hereby agree that beginning
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on the later o(June 1, 1997 or substantial completion of the "Build-Out"(defined
in Exhibit B) (the "Additional Space Commencement Date"), Landlord shall lease
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to Tenant approximately 6,202 rentable square feet of space on the eighth (8th)
floor of the Building as more particularly described on Exhibit A attached
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hereto (the "Additional Space") for a period of three (3) years and six (6)
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months (the "Additional Space Term"). The Additional Space shall be subject to
all the terms and conditions of the Lease except to the extent expressly
modified or excluded hereby or herein.
3. Tenant's Proportionate Share for the Additional Space. Tenant's
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Proportionate Share for the Additional Space shall be .9960% (the "Additional
Space Proportionate Share").
4. Additional Space Rent. Beginning on the Additional Space Commencement
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Date and for the duration of the Additional Space Term, in addition to (and not
in substitution for) the Rent Tenant is obligated to pay under the Lease, Tenant
shall pay to Landlord Rent as follows:
(1) Additional Space Base Rent. Tenant shall pay Landlord Additional
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Space Base Rent with respect to the Additional Space in accordance with the
following schedule in the same manner as Tenant pays Base Rent under the Lease:
Annual Additional Space Monthly Installment
Base Rent per Rentable of Additional Space
Period Square Foot (6.202) Base Rent
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Additional Space $13.34 $ 6,892.49
Commencement Date
through 12/31/97
1/1/98 through $17.26 $ 8,902.54
5/31/98
6/1/98 through $18.26 $ 9,437.38
5/31/99
6/1/99 through $19.26 $ 9,954.21
5/31/00
6/1/00 through $20.26 $10,471.04
11/30/00
Any provision of the Lease or this Amendment to the contrary
notwithstanding, the abatement of Base Rent payable with respect to the Premises
pursuant to the Schedule of the Lease shall not apply to the payment of
Additional Space Base Rent, and such Additional Space Base Rent shall accrue and
Tenant shall be liable for payment thereof without regard to such abatement
provision.
(2) Operating Cost Share Rent. Tenant shall pay the Additional Space
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Proportionate Share of the excess of Operating Costs over Base Operating Costs
(as those terms are defined in the Lease) in accordance with Section 2A(2) of
the Lease.
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(3) Tax Share Rent. Tenant shall pay the Additional Space
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Proportionate Share of the excess of Tax Rent over Base Taxes (as those terms
are defined in the Lease) in accordance with Section 2A(3) of the Lease.
(4) Additional Rent. Tenant shall pay Additional Rent for the
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Additional Space in accordance with Section 2A(4) of the Lease.
5. Tenant Improvements. Landlord shall perform the Build-Out on the
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Additional Space in accordance with the Tenant Improvement Agreement attached
hereto as Exhibit B.
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6. Security Deposit. To secure Tenant's obligations in connection
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with the Additional Space, in addition to the Letter of Credit referenced in
Section 20 of the Lease, Tenant shall provide Landlord with a second Letter of
Credit in the amount of $76,595.00, which second Letter of Credit and Tenant's
obligations in accordance therewith, shall be subject to all of the terms and
provisions of Section 20 of the Lease.
7. Expansion Option. The following Expansion Option shall apply to
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the Additional Space:
Subject to Subsection 7C below, Tenant may at its option expand
the Additional Space as described below for the remaining Additional Space Term,
upon the terms contained herein and in the Lease, except that Tenant shall pay
Additional Space Base Rent as described in Subsection A below. Any expansion
space shall be delivered "As Is"; Landlord shall have no obligation to perform
any construction in such space or to contribute to the cost of any construction
by Tenant.
A. Tenant shall have the option to expand into approximately
4,153 of rentable square feet on the eighth (8th) floor of the Building located
adjacent to the Additional Space (the "Expansion Space") at any time during the
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first year of the Additional Space Term upon three (3) months prior written
notice to Landlord. The initial Base Rent for the Expansion Space shall be
$17.26 per rentable square foot which shall be increased annually as provided in
the Section 4 hereof. The Expansion Space shall become a part of the Additional
Space for all purposes of the Lease and this Amendment.
B. If Tenant fails to deliver notice to Landlord within the
required time period, Tenant will be deemed to have waived such option to
expand. Promptly after Tenant's exercise of its expansion option, Landlord shall
execute and deliver to Tenant an amendment to the Lease to reflect changes in
the Additional Space, Additional Space Base Rent, the Additional Space
Proportionate Share, and any other appropriate terms changed by the addition of
the Expansion Space. Within 15 days thereafter, Tenant shall execute, review and
return the amendment.
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C. Tenant's option to expand the Additional Space is subject to
the conditions that: (i) no existing tenant in the Building has any rights to
the Expansion Space, (ii) on the date that Tenant delivers its notice exercising
its option to expand Tenant is not in default under the Lease after the
expiration of any applicable notice and cure periods, and (iii) Tenant shall not
have assigned the Lease or sublet any portion of the Premises or Additional
Space under a sublease which is effective at any time during the final 9 months
of the Additional Space Term.
8. Definition of "Premises". All references in the Lease to the
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"Premises" shall also be deemed to include reference to the Addition Space,
unless such inclusion shall be inconsistent with the terms of this Amendment.
9. Non-Applicability of Certain Lease Provisions. Sections 31 and 32
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of the Lease shall not apply to the Additional Space, and shall not be construed
as creating any obligation on the part of Landlord with respect to the
Additional Space.
10. Miscellaneous. Landlord and Tenant hereby agree that (a) this
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Amendment is incorporated into and made a part of the Lease, (b) any and all
references to the Lease hereinafter shall include this Amendment, and (c) except
as specifically amended hereby, the Lease and all terms, conditions and
provisions thereof, shall remain in full force and effect.
11. Governing Law. This Amendment shall be governed by and construed
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under the laws of the State of Illinois.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first above written.
LANDLORD:
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA, a New York corporation
By: /s/ S. Xxxx Xxxxxxxx
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Print Name: S. Xxxx Xxxxxxxx
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Print Title: Assistant Secretary
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TENANT:
FOCAL COMMUNICATIONS CORPORATION,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxx
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Print Name: Xxxxxx X. Xxxxxx
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Print Title: Executive Vice President
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EXHIBIT A
(GRAPHICS)
EXHIBIT B
TENANT IMPROVEMENT AGREEMENT
1. LANDLORD'S WORK. Landlord shall, at Landlord's expense, improve the
Additional Space (as defined in the First Amendment to Lease to which this
Agreement is attached (the "First Amendment"))pursuant to certain architectural
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plans and specifications prepared by Whitney Architects, dated March 25, 1997
and agreed to by both Landlord and Tenant (the "Architectural Plans") (such
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improvement is sometimes referred to herein as the "Landlord's Work"). Any
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changes to the Architectural Plans (the "Additional Work") shall also be
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performed by Landlord, at Tenant's expense. For purposes of the Lease and First
Amendment, the Landlord's Work and the Additional Work are sometimes
collectively referred to herein as the "Build-Out".
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The Architectural Plans shall comply with all applicable statutes,
ordinances, regulations, laws and codes. Landlord's approval of the
Architectural Plans or any modifications or changes thereto shall not impose
upon Landlord or its agents or representatives any obligation with respect to
the design of the Build-Out or with respect to the compliance of the Build-Out
and/or such Architectural Plans (or modifications or changes thereto) with
applicable laws, codes, ordinances and regulations, it being expressly
understood that the obligation with respect to the design of the Build-Out and
its compliance with applicable laws, codes, ordinances and regulations rests
with the Tenant and the party responsible for preparing such Architectural
Plans.
The parties hereby agree that the entire Build-Out will be done on behalf
of Landlord by a qualified contractor selected by Landlord pursuant to this
grammatical paragraph. Landlord shall obtain bids for the Build-Out from at
least three (3) qualified contractors selected by Landlord (the "Acceptable
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Contractors"). The Build-Out shall be performed by the Acceptable Contractor
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selected by Landlord as the contractor most qualified to complete the Build-Out
(the "Landlord's Contractors", as determined by Landlord in its sole and
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reasonable judgment.
2. ADDITIONAL WORK. Except to the extent described herein, Landlord has
no obligation to do or pay for any work to the Additional Space (or any plans or
specifications relating thereto).
If Tenant shall require Additional Work in the Additional Space in addition
to or in substitution for Landlord's Work, Tenant shall deliver to Landlord for
its approval final Architectural Plans for such Additional Work. If T landlord
does not approve of the Architectural Plans for the Additional Work, as
delivered by Tenant, Landlord shall advise Tenant generally of the changes
required in such Plans so that they will meet with Landlord's approval. Tenant
shall cause the Architectural Plans for the Additional Work to be revised
Exhibit B
Page 1 to 4
and delivered to Landlord for its final review and approval within five (5)
business days after Tenant's receipt of such advice or Tenant shall be deemed to
have abandoned its request for such Additional Work. All Architectural Plans and
Engineering Plans (as hereinafter defined) for the Additional Work (together
with any changes to the Architectural Plans for Landlords Work which may be
required as a result thereof) shall be prepared and completed at Tenant's sole
cost and expense (without regard to whether the Additional Work is actually
performed by Landlord or an Acceptable Contractor hereunder).
If the Additional Work is to be performed by Landlord's Contractor,
Landlord shall furnish Tenant with written estimates of the cost of the
Additional Work within fifteen (15) business days after receipt by Landlord of
the final mechanical and engineering plans and specifications (the "Engineering
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Plans") for the Additional Work. If Tenant shall fail to approve in writing such
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estimates within seven (7) business days from receipt thereof, the estimates
shall be deemed disapproved in all respects by Tenant. Landlord's Contractor
shall not be authorized or required to proceed with any Additional Work, and
Tenant shall be deemed to have abandoned its request therefor. If, however,
Tenant approves in writing such estimates as furnished by Landlord within said
seven (7) day period, Tenant shall pay Landlord the actual cost of such
Additional Work, and, provided Tenant has made all payments and borne all costs
when required herein, Landlord agrees to cause the Additional Work to be
performed by Landlord's Contractor. All sums due hereunder from Tenant shall be
deemed to be rent for any and all purposes of the Lease.
If Landlord is not required to perform Additional Work pursuant to and in
accordance with the foregoing provisions of this Section 2, the alterations and
improvements to be made to the Additional Space shall be limited to Landlord's
Work and any additional alterations and improvements to the Additional Space
desired by Tenant shall be made after the commencement of the term of said Lease
and shall be subject to the provisions of Section 5 of the Lease.
All designs for public areas must conform to Building Standard and be
approved by the Landlord.
3. COMMENCEMENT OF RENT. If Landlord's Contractor performs the Build-Out,
the Commencement Date and Tenant's obligation to pay rent in connection with the
Additional Space shall not commence until Landlord's Contractor shall have
substantially completed all Landlord's Work; provided, however, that if Landlord
shall be delayed in substantially completing such Landlord's Work as a result of
any one or more of the following:
(a) Tenant's request for, or Landlord's or an Acceptable Contractor's
performance of, Additional Work, and any time related thereto,
notwithstanding
Exhibit B
Page 2 of 4
Tenant's compliance with the time periods specified in Sections 1 and 2 of
this Exhibit B. and whether or not any such Additional Work is actually
performed; or
(b) Tenant's request for materials, finishes or installations
requiring unusually long lead times, provided one of Landlord, Landlord's
Contractor or Landlord's agents or employees has given Tenant notice of
such long lead time; or
(c) Any other act or omission by Tenant or its agents;
then and in any such event, Landlord shall cause the Landlord's Architect to
certify the date on which the Landlord's Work would have been completed but for
the delay resulting from one of the conditions described in 3(a)-(c) (the
"Completion Dates), and the Commencement Date and Tenant's obligation to
commence the payment of rent in connection with the Additional Space shall arise
as of such date, and shall not otherwise be affected or deferred on account of
such delay.
As used herein, the term "substantial completion" or any similar term,
shall mean substantial completion of all of Landlord's Work in accordance with
the Architectural Plans, subject to the joint preparation of a punch list by
Tenant and Landlord specifying all items of Landlord's Work which have not been
completed. Landlord shall use reasonable diligence to cause all items on the
punch list to be completed within thirty (30) days after Landlord and Tenant
have agreed to the contents of the punch list.
4. ACCESS BY TENANT PRIOR TO COMMENCEMENT OF ADDITIONAL SPACE TERM.
Landlord, at Landlord's discretion may permit Tenant and Tenant's agents to
enter the Additional Space prior to the date specified as the Commencement Date
in the First Amendment in order that Tenant may make the Additional Space ready
for Tenant's use and occupancy. If Landlord permits such entry prior to the
commencement of the Additional Space Term, such permission shall constitute a
license only and not a lease and such license shall be conditioned upon: (a)
Tenant working in harmony and not interfering with Landlord and Landlord's
agents, contractors, workmen, mechanics and suppliers in doing Landlord's Work,
"Special Work" or Additional Work, if any, or Landlord's work in the Building or
with other tenants and occupants of the Building; (b) except for an Acceptable
Contractor who shall be governed by Section 1 of this Exhibit B. Tenant
obtaining in advance Landlord's approval of the contractors proposed to be used
by Tenant and depositing with Landlord in advance of any work (i) security
reasonably satisfactory to Landlord for the completion thereof, (ii) general
contractor's affidavit for proposed work and waiver of lien from general
contractor, all subcontractors and suppliers of material; and (c) Tenant
furnishing Landlord with such insurance and other security as Landlord may
reasonably require against liabilities which may arise out of such entry.
Landlord shall have the right to withdraw such license for any reason upon
twenty-four (24) hours' written notice to Tenant. Tenant agrees that Landlord
shall not be liable in any way for any injury, loss or damage
Exhibit B
Page 3 of 4
which may occur to any of Tenant's property placed or installations made in the
Additional Space prior to the commencement of the Additional Space Term, the
same being at Tenant's sole risk and Tenant agrees to protect, defend, indemnify
and save harmless Landlord from all liabilities, costs, damages, fees and
expenses arising out of or connected with the activities of Tenant or its
agents, contractors, suppliers or workmen in or about the Additional Space or
the Building. Tenant further agrees that any entry and occupation permitted
under this paragraph shall be governed by Section 5 of the Lease and all other
relevant terms of the Lease.
5. MISCELLANEOUS.
(a) Except to the extent otherwise indicated herein, the initially
capitalized terms used in this Agreement shall have the meanings assigned
to them in the Lease or First Amendment.
(b) The terms and provisions of this Agreement are intended to
supplement and are specifically subject to all the terms and provisions of
the Lease and First Amendment.
(c) This Agreement may not be amended or modified other than by
supplemental written agreement executed by authorized representatives of
the parties hereto.
Exhibit B
Page 4 of 4
