1
Exhibit 10.23
LEASE
THIS LEASE (this "Lease") is made as of February 8, 2000 by and between
"Landlord" XXXXX & CO., a division of XXXXX BANK N.A., as Trustee of the
Multi-Employer Property Trust, a trust organized under 12 C.F.R.
Section 9.18
and
"Tenant" Integrated Information Systems, Inc., a Delaware corporation
SECTION A: TABLE OF CONTENTS
SECTION 1: DEFINITIONS ............................................................. 1
SECTION 2: PREMISES AND TERM ....................................................... 3
2.1 Lease of Premises ...................................................... 3
2.2 Lease Term ............................................................. 3
2.3 Plans and Specifications ............................................... 4
2.4 Commencement Date ...................................................... 4
2.5 Tenant's Contribution to Tenant Improvement Costs ..................... 5
2.6 Memorandum of Commencement Date ........................................ 5
2.7 Use and Conduct of Business ............................................ 5
2.8 Compliance with Governmental Requirements and Rules and Regulations .... 6
SECTION 3: BASE RENT, ADDITIONAL RENT AND OTHER SUMS PAYABLE UNDER LEASE ........... 6
3.1 Payment of Rental ...................................................... 6
3.2 Base Rent .............................................................. 6
3.3 Security Deposit ....................................................... 6
3.4 Additional Rent ........................................................ 7
3.5 Utilities .............................................................. 9
3.6 Holdover ............................................................... 9
3.7 Late Charge ............................................................ 9
3.8 Default Rate ........................................................... 9
3.9 Operating Cost Audit ................................................... 10
SECTION 4: GENERAL PROVISIONS ...................................................... 10
4.1 Maintenance and Repair by Landlord ..................................... 10
4.2 Maintenance and Repair by Tenant ....................................... 10
4.3 Common Areas/Security; Building Services ............................... 10
4.4 Tenant Alterations ..................................................... 11
4.5 Tenant's Work Performance .............................................. 11
4.6 Surrender of Possession ................................................ 11
4.7 Removal of Property .................................................... 12
4.8 Access ................................................................. 12
4.9 Damage or Destruction .................................................. 12
4.10 Condemnation ........................................................... 13
4.11 Parking ................................................................ 13
4.12 Indemnification ........................................................ 13
4.13 Tenant Insurance ....................................................... 14
4.14 Landlord's Insurance ................................................... 14
4.15 Waiver of Subrogation .................................................. 15
4.16 Assignment and Subletting by Tenant .................................... 15
4.17 Assignment by Landlord ................................................. 17
4.18 Estoppel Certificates and Financial Statements ......................... 17
4.19 Modification for Lender ................................................ 18
4.20 Hazardous Substances ................................................... 18
4.21 Access Laws ............................................................ 18
4.22 Quiet Enjoyment ........................................................ 19
4.23 Signs .................................................................. 19
4.24 Subordination .......................................................... 19
4.25 Workers Compensation Immunity .......................................... 20
4.26 Brokers ................................................................ 20
4.27 Exculpation and Limitation of Liability ................................ 20
4.28 Mechanic's Liens and Tenant's Personal Property Taxes .................. 20
4.29 Landlord's Security Interest ........................................... 20
SECTION 5: DEFAULT AND REMEDIES .................................................... 21
5.1 Events of Default ...................................................... 21
5.2 Remedies ............................................................... 21
5.3 Right to Perform ....................................................... 22
5.4 Landlord's Default ..................................................... 23
SECTION 6: MISCELLANEOUS PROVISIONS ................................................ 23
6.1 Notices ................................................................ 23
6.2 Attorney's Fees and Expenses ........................................... 23
6.3 No Accord and Satisfaction ............................................. 23
6.4 Successors; Joint and Several Liability ................................ 23
6.5 Choice of Law .......................................................... 23
6.6 No Waiver of Remedies .................................................. 23
6.7 Offer to Lease ......................................................... 24
6.8 Force Majeure .......................................................... 24
6.9 Landlord's Consent ..................................................... 24
6.10 Severability; Captions ................................................. 24
6.11 Interpretation ......................................................... 24
6.12 Incorporation of Prior Agreement; Amendments ........................... 24
6.13 Authority .............................................................. 24
6.14 Time of Essence ........................................................ 24
6.15 Survival of Obligations ................................................ 25
6.16 Consent to Service ..................................................... 25
6.17 Landlord's Authorized Agents ........................................... 25
6.18 Waiver of Jury Trial ................................................... 25
6.19 Substitute Space ....................................................... 25
6.20 Year 2000 Compliance ................................................... 25
6.21 Condition of Landlord's Execution of Lease ............................. 26
2
LISTING OF EXHIBITS
Exhibit A Drawing Showing Location of the Premises
Exhibit B Listing of Plans and Specifications for Tenant Improvements
Exhibit C Form of Memorandum of Commencement Date
Exhibit D Rules and Regulations
Exhibit E Fee Schedule
Exhibit F Cleaning Schedule
SECTION 1: DEFINITIONS
1.1 DEFINITIONS. Each underlined term in this section shall have the meaning set
forth next to that underlined term.
1.2 ACCESS LAWS: The Americans With Disabilities Act of 1990 (including the
Americans with Disabilities Act Accessibility Guidelines for Building and
Facilities) and all other Governmental Requirements relating to the foregoing.
1.3 ADDITIONAL RENT: Defined in paragraph captioned "Additional Rent".
1.4 BASE AMOUNT: Defined in paragraph captioned "Additional Rent".
1.5 BASE RENT: Base Rent shall be as follows:
Lease Year Annual Base Rent Monthly Payment
---------- ---------------- ---------------
1 $198,520.00 $ 16,543.33
2 $205,610.00 $ 17,134.17
3 $212,700.00 $ 17,725.00
"Lease Year" shall mean the twelve (12) month period commencing on the
Commencement Date or on any anniversary of the Commencement Date. In all events,
the final Lease Year shall expire on the expiration date or sooner termination
of the Lease Term.
1.6 BROKERS: Tenant was represented in this transaction by Xxxx Xxxxx of
Xxxxxxxx Xxxx Company, a licensed real estate broker. Landlord was represented
in this transaction by said Xxxxxxxx Xxxx Company.
1.7 BUILDING: The building located on the Land at 00 Xxxxxxxxx Xxxxx,
Xxxxxxxxxx, Xxxxxxxxxxxxx, commonly known as 000 Xxxxxxxxxx Xxxxxx and
containing approximately 124,854 rentable square feet.
1.8 BUSINESS DAY: Calendar days, except for Saturdays and Sundays and holidays
when banks are closed in the Commonwealth of Massachusetts.
1.9 CLAIMS: An individual and collective reference to any and all claims,
demands, damages, injuries, losses, liens, liabilities, penalties, fines,
lawsuits, actions, other proceedings and expenses (including attorneys' fees and
expenses incurred in connection with the proceeding whether at trial or on
appeal).
1.10 COMMENCEMENT DATE: The earlier of (i) the date on which the Premises shall
have attained Substantial Completion (see paragraph 1.34 for the definition of
"Substantial Completion") or (ii) the date on which Tenant shall occupy all or
any part of the Premises.
1.11 ESTIMATED OPERATING COSTS ALLOCABLE TO THE PREMISES AND ESTIMATED PROPERTY
TAXES ALLOCABLE TO THE PREMISES: Each defined in paragraph captioned "Additional
Rent".
1.12 EVENTS OF DEFAULT: One or more of those events or states of facts defined
in the paragraph captioned "Events of Default".
1.13 GOVERNMENTAL AGENCY: The United States of America, the state in which the
Land is located, any county, city, district, municipality or other governmental
subdivision, court or agency or quasi-governmental agency having jurisdiction
over the Land and any board, agency or authority associated with any such
governmental entity, including the fire department having jurisdiction over the
Land.
1.14 GOVERNMENTAL REQUIREMENTS: Any and all statutes, ordinances, codes, laws,
rules, regulations, orders
1
3
and directives of any Governmental Agency as now or later amended.
1.15 HAZARDOUS SUBSTANCE(S): Asbestos, PCBs, petroleum or petroleum-based
chemicals or substances, urea formaldehyde or any chemical, material, element,
compound, solution, mixture, substance or other matter of any kind whatsoever
which is now or later defined, classified, listed, designated or regulated as
hazardous, toxic or radioactive by any Governmental Agency.
1.16 LAND: The land upon which the Building is located in Burlington, Middlesex
County, Massachusetts.
1.17 LANDLORD: The trust named on the first page of this Lease, or its
successors and assigns as provided in paragraph captioned "Assignment by
Landlord".
1.18 LANDLORD'S AGENTS: Any and all partners, officers, agents, employees,
trustees, investment advisors and consultants of Landlord.
1.19 LEASE TERM: Commencing on the Commencement Date and ending on the date
immediately preceding the third (3rd) anniversary of the Commencement Date.
1.20 MANAGER: Xxxxxxxx Xxxx Company, or its replacement as specified by written
notice from Landlord to Tenant.
1.21 MANAGER'S ADDRESS: 00 Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000,
which address may be changed by written notice from Landlord to Tenant.
1.22 OPERATING COSTS: Defined in paragraph captioned "Additional Rent".
1.23 OPERATING COSTS ALLOCABLE TO THE PREMISES: Defined in paragraph captioned
"Additional Rent".
1.24 PARKING RATIO: Not applicable
1.25 PERMITTED USE: General business offices, and for no other use whatsoever,
and so long as such use is consistent with Governmental Requirements and with
first-class buildings of the same or similar use as the Building located in the
metropolitan area in which the Building is located.
1.26 PLANS AND SPECIFICATIONS: (a) Those certain plans and specifications for
the Tenant Improvements as listed in Exhibit B and any modifications to them
approved in writing by Landlord and Tenant; or (b) if Exhibit 8 does not include
a listing of such plans and specifications, then such plans and specifications
shall be prepared by Tenant (the "Preparing Party") and delivered to Landlord
(the "Receiving Party") and approved by Landlord and Tenant as set forth in the
paragraph captioned "Plans and Specifications".
1.27 PREPAID RENT: $16,543.33 in respect of the first month of the Lease Term.
1.28 PREMISES: Approximately 7,090 rentable square feet located on the second
(2nd) floor of the Building, substantially as depicted on the plan attached to
this Lease as Exhibit A.
1.29 PRIME RATE: Defined in paragraph captioned Default Rate".
1.30 PROPERTY TAXES: (a) Any form of ad valorem real or personal property tax or
assessment imposed by any Governmental Agency on the Land, Building, related
improvements or any personal property owned by Landlord associated with such
Land, Building or improvements; (b) any other form of tax or assessment, license
fee, license tax, tax or excise on rent or any other levy, charge, expense or
imposition made or required by any Governmental Agency on any interest of
Landlord in such Land, Building, related improvements or personal property; (c)
any fee for services charged by any Governmental Agency for any services such as
fire protection, street, sidewalk and road maintenance, refuse collection,
school systems or other services provided or formerly provided to property
owners and residents within the general area of the Land; (d) any governmental
impositions allocable to or measured by the area of any or all of such Land,
Building, related improvements or personal property or the amount of any base
rent, additional rent or other sums payable under any lease for any or all of
such Land, Building, related improvements or personal property, including any
tax on gross receipts or any excise tax or other charges levied by any
Governmental Agency with respect to the possession, leasing, operation,
maintenance, alteration, repair, use or occupancy of any or all of such Land,
Building, related improvements, personal property or the rent earned by any part
of or interest in such Land, Building, related improvements or personal
property; (e) any impositions by any Governmental Agency on any transaction
evidenced by a lease of any or all of such Land,
-2-
4
Building, related improvements or personal property or charge with respect to
any document to which Landlord is a party creating or transferring an interest
or an estate in any or all of such Land, Building, related improvements or
personal property; (f) any increase in any of the foregoing based upon
construction of improvements or change of ownership of any or all of such Land,
Building, related improvements or personal property; and (g) tax consultant fees
and expenses and costs of appeals of any property taxes. Property Taxes shall
not include taxes on Landlord's net income or any inheritance, estate or gift
taxes.
1.31 PROPERTY TAXES ALLOCABLE TO THE PREMISES: Defined in paragraph captioned
"Additional Rent".
1.32 PUNCH LIST WORK: Minor items of repair, correction, adjustment or
completion as such phrase is commonly understood in the construction industry in
the metropolitan area in which the Land is located, the completion of which will
not unreasonably interfere with Tenant's use and occupancy of the Premises.
1.33 SECURITY DEPOSIT: $69,198.40
1.34 SUBSTANTIAL COMPLETION: The date that the Tenant Improvements have been
completed substantially in accordance with the Plans and Specifications, subject
to Punch List Work, and Landlord shall have obtained from the appropriate
permitting authorities a certificate of occupancy in respect of the Premises,
which may be a temporary certificate if required by the said permitting
authorities at the time the Tenant Improvements shall have been substantially
completed, such temporary certificate being deemed as fully effective for
purposes of establishing Substantial Completion hereunder as the issuance of a
permanent certificate of occupancy.
1.35 TENANT: The person or entity named on the first page of this Lease.
1.36 TENANT ALTERATIONS: Defined in paragraph captioned "Tenant Alterations".
1.37 TENANT IMPROVEMENT ALLOWANCE: The maximum amount to be expended by
Landlord, if any, for the cost of Tenant Improvements (including architectural,
engineering, permitting and space planning fees) which maximum shall not exceed
Forty-Two Thousand Five Hundred Forty and 00/100 Dollars ($42,540.00), or Six
and 00/100 Dollars ($6.00) per rentable square foot. There shall be no credit or
payment due Tenant on account of any unexpended portion of the Tenant
Improvement Allowance.
1.38 TENANT IMPROVEMENTS: Those alterations or improvements to the Premises as
appear and are depicted in the Plans and Specifications.
1.39 TENANT'S AGENTS: Any and all officers, partners, contractors,
subcontractors, consultants, licensees, agents, concessionaires, subtenants,
servants, employees, customers, guests, invitees or visitors of Tenant.
1.40 TENANT'S PRO RATA SHARE: five and sixty-eight one hundredths percent
(5.68%).
1.41 YEAR: A calendar year commencing January 1 and ending December 31.
SECTION 2: PREMISES AND TERM
2.1 LEASE OF PREMISES. Landlord demises and leases the Premises to Tenant, and
Tenant hires and takes the Premises from Landlord, upon the terms and conditions
set forth in this Lease.
2.2 LEASE TERM. The Lease Term shall be for the period stated in the definition
of that term, unless earlier terminated as provided in this Lease.
2.2.1 OPTION TO EXTEND. While the Lease is in full force and effect,
provided the Tenant is not in default of any of the terms, covenants and
conditions thereof, beyond any applicable notice and cure periods, and that
Integrated Information Systems, Inc. is itself occupying not less than one
hundred percent (100%) of the Premises then demised to Tenant both as of the
time of option exercise and as of the commencement of the herein additional
term, Tenant shall have the right or option to extend the original term of this
Lease for one (1) additional period of three (3) years. Such extension of the
original term shall be on the same terms, covenants and conditions as provided
for in the original Term except that Tenant shall have no further option to
extend the Term, and except that the base rental during the extended term shall
be the then fair market rental value, as determined by Landlord, taking into
account provisions for subsequent increases and other adjustments for new leases
then currently being negotiated or executed in comparable space located in the
office park in which the Building is located, or if no new leases are then being
negotiated or executed in such office park, the fair market rental value shall
be determined by Landlord taking into account new leases then being negotiated
or executed for comparable space located elsewhere
-3-
5
in first-class office buildings located in the Burlington, Massachusetts area,
provided, however, that in no event shall the Base Rent payable on account of
the additional term be less than the annual Base Rent payable for the Premises
as of the date immediately preceding the commencement of such additional term.
Notice of Tenant's intention to exercise this option must be given to Landlord,
in writing, not less than nine (9) months prior to the expiration of the then
current Term of the Lease. Landlord shall have no obligation to prepare,
refurbish or construct the Premises or any part thereof prior to the
commencement of the herein additional term or otherwise provide any amount of
improvement allowance in respect of the Premises.
2.3 PLANS AND SPECIFICATIONS. If clause (b) of the definition of Plans and
Specifications is applicable, then the Preparing Party shall deliver the plans
and specifications for the Tenant Improvements to the Receiving Party. Upon
receipt of the proposed plans and specifications, the Receiving Party shall
either (a) approve and return them to the Preparing Party within ten (10)
Business Days after such receipt in which case such proposed plans and
specifications shall be the Plans and Specifications, or (b) if the Receiving
Party disapproves the plans and specifications, it shall provide the Preparing
Party with notice of disapproval together with its specific objections within
such ten (10) Business Day period. If the Receiving Party disapproves any
portion of the proposed plans and specifications in accordance with the previous
sentence, then Landlord and Tenant shall use good faith efforts to reach
mutually acceptable Plans and Specifications. If Landlord and Tenant are unable
to reach mutually acceptable Plans and Specifications within twenty (20)
Business Days of the Preparing Party's receipt of the Receiving Party's notice
of disapproval, then Landlord may terminate this Lease, without any liability to
Tenant, upon five (5) Business Days' written notice.
2.4 COMMENCEMENT DATE. Landlord shall prepare the Premises for Tenant's
occupancy in accordance with the Plans and Specifications. Landlord's
preparation of the Premises ("Landlord's Work") shall be performed by Landlord's
contractors and the Tenant Improvement Allowance shall be applied against the
cost thereof as provided in paragraph 2.5 hereof. Landlord shall notify Tenant
in writing of Substantial Completion. If Tenant believes that Substantial
Completion has not occurred, Tenant shall notify Landlord in writing of its
objections within ten (10) Business Days after its receipt of the Landlord's
notice described in the preceding sentence. Landlord shall have a reasonable
time after its receipt of Tenant's notice in which to take such action as may be
necessary to achieve Substantial Completion, and shall notify Tenant in writing
when such has been completed. Taking of possession by Tenant of the whole or any
part of the Premises shall establish the Commencement Date as specified in the
definition of that term and the establishment of such fact upon the taking of
possession shall occur even if Tenant disputes whether Substantial Completion
has occurred or attempts to condition or qualify the taking of possession. Such
taking of possession shall further establish that the Premises are in good and
satisfactory condition when possession was so taken and the Commencement Date
has occurred. Tenant acknowledges that no representations as to the condition of
the Premises have been made by Landlord, unless such are expressly set forth in
this Lease. In the event of any dispute as to whether Substantial Completion has
occurred, the certificate of Landlord's architect or general contractor shall be
conclusive. If on the Commencement Date, Punch List Work remains to be
completed, Landlord and Tenant shall agree on such Punch List Work prior to
occupancy by Tenant and Landlord will promptly complete it after the
Commencement Date. In no event shall Tenant's refusal or failure to agree on the
nature and extent of Punch List Work or the existence of items of Punch List
Work delay or postpone the occurrence of the Commencement Date. Tenant shall
make no changes to the Plans and Specifications or the work reflected in the
Plans and Specifications without the written consent of Landlord.
Notwithstanding anything to the contrary herein contained, if the Commencement
Date shall not have occurred by the date ("Last Construction Completion Date")
which IS [SEVEN (7)] months after the date of this Lease for any reason other
than delays caused by Tenant or delays attributable to force majeure (see
paragraph 6.8), then Tenant shall have the right to terminate this Lease,
exercisable by giving Landlord a written thirty (30) day termination notice on
or after the Last Construction Completion Date and on or before the date which
is fourteen (14) calendar days after the Last Construction Completion Date, time
being of the essence in respect of Tenant's giving said notice. If the
Commencement Date shall occur on or before the thirtieth (30th) day following
Landlord's receipt of such notice, Tenant's termination notice shall be deemed
null and void and of no further force or effect. Notwithstanding anything to the
contrary in the foregoing contained, there shall be no postponement of the
Commencement Date if delay in Substantial Completion shall be due to any change
required by Tenant in the Plans and Specifications.
-4-
6
2.4.1 ACCESS FOR FIXTURES AND EQUIPMENT INSTALLATION. During the period which is
two (2) weeks prior to the Commencement Date, and as to the occurrence of which
Landlord shall notify Tenant of its reasonable estimate, Tenant and its
contractors shall be permitted reasonable access to the Premises in order to
install Tenant's fixtures and equipment. Access to the Premises by Tenant or
such contractors as provided above shall not require Tenant to commence paying
Base Rent or Additional Rent prior to the Commencement Date, provided, however,
upon entry into the Building by Tenant or Tenant's Agent's, including, without
limitation, Tenant's contractors, all of the other terms, provisions and
conditions of the Lease shall be deemed to be in full force and effect,
including without limitation, paragraphs 4.4, 4.5, 4.12, 4.13 and 4.28. Tenant's
contractors who are employed for the foregoing purposes shall conform in all
respects to the requirements set forth in paragraph 4.5. All such installation
work to be performed in the Building or in the Premises, as the case may be,
shall be subject to Landlord's review and prior written approval in accordance
with the terms of the Lease, including, without limitation, paragraph 4.4. All
such work to be performed in connection with this paragraph 2.4.1 shall be
performed by or at the expense of Tenant. Neither Tenant, Tenant's Agents nor
Tenant's contractors shall interfere with or cause delay to the performance of
Landlord's Work.
2.5 TENANT'S CONTRIBUTION TO TENANT IMPROVEMENT COSTS. Tenant shall be
responsible for all costs to prepare the Premises for Tenant's occupancy,
including all hard and soft costs, such as and without limitation, labor and
materials, architectural, engineering, permitting and space planning fees
(collectively, the "Tenant Improvement Costs"). Tenant further agrees to pay
Landlord a construction management fee (the "Construction Management Fee") equal
to three percent (3%) of the Tenant Improvement Costs. The Tenant Improvement
Allowance shall be applied against the Tenant Improvement Costs and the
Construction Management Fee. Tenant shall not be entitled to receive any credit
or payment on account of any unexpended portion of the Tenant Improvement
Allowance. If the cost of the Tenant Improvements and the Construction
Management Fee exceed the Tenant Improvement Allowance, Tenant shall pay to
Landlord on demand and prior to Landlord's commencement of the work to prepare
the Premises for Tenant's occupancy, any amount which is Tenant's responsibility
to pay. If Tenant fails to pay to Landlord the cost of any such excess Tenant
Improvements and Construction Management Fee as and when due, Landlord may elect
to suspend work on the Tenant Improvements pending such timely payment, and the
Commencement Date shall be deemed to have occurred on the date that the Tenant
Improvements would have achieved Substantial Completion absent such suspension
of work. All Tenant Improvements, regardless of which party constructed them,
shall become the property of Landlord and shall remain upon and be surrendered
with the Premises upon the expiration or earlier termination of this Lease;
provided that, at Landlord's election and upon notice to Tenant, Tenant shall be
required to remove all or any portion of the Tenant Improvements upon the
expiration or earlier termination of this Lease.
2.6 MEMORANDUM OF COMMENCEMENT DATE. At Landlord's election and request, Tenant
shall execute a Memorandum of Commencement Date in the form attached as Exhibit
C. In no event shall Tenant record this Lease or the Memorandum of Commencement
Date.
2.7 USE AND CONDUCT OF BUSINESS. The Premises are to be used only for the
Permitted Uses, and for no other business or purpose without the prior consent
of Landlord. Landlord makes no representation or warranty as to the suitability
of the Premises for Tenant's intended use. Tenant shall, at its own cost and
expense, obtain and maintain any and all licenses, permits, and approvals
necessary or appropriate for its use, occupation and operation of the Premises.
Tenant's inability to obtain or maintain any such license, permit or approval
necessary or appropriate for its use, occupation or operation of the Premises
shall not relieve it of its obligations under this Lease, including the
obligation to pay Base Rent and Additional Rent. No act shall be done in or
about the Premises that is unlawful or that WILL increase the existing rate of
insurance on any or all of the Land or Building. Tenant shall not commit or
allow to be committed or exist: (a) any waste upon the Premises, (b) any public
or private nuisance, or (c) any act or condition which disturbs the quiet
enjoyment of any other tenant in the Building, violates any of Landlord's
contracts affecting any or all of the Land or Building, creates or contributes
to any work stoppage, strike, picketing, labor disruption or dispute, interferes
in any way with the business of Landlord or any other tenant in the Building or
with the rights or privileges of any contractors, subcontractors, licensees,
agents, concessionaires, subtenants, servants, employees, customers, guests,
invitees or visitors or any other persons lawfully in and upon the Land or
Building, or causes any impairment or reduction of the good will or reputation
of the Land or Building. Tenant shall not, without the prior consent of
Landlord, use any apparatus, machinery or
-5-
7
device in or about the Premises which will cause any substantial noise or
vibration or any increase in the normal consumption level of electric power. If
any of Tenant's machines and equipment should disturb the quiet enjoyment of any
other tenant in the Building, then Tenant shall provide, at its sole cost and
expense, adequate insulation or take other such action, including removing such
machines and equipment, as may be necessary to eliminate the disturbance.
2.8 COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS AND RULES AND REGULATIONS.
Landlord shall deliver the Premises in compliance with all applicable
Governmental Requirements. From and after the Commencement Date, Tenant shall
comply with all Governmental Requirements relating to its use, occupancy and
operation of the Premises and shall observe such reasonable rules and
regulations as may be adopted and published by Landlord from time to time for
the safety, care and cleanliness of the Premises and the Building, and for the
preservation of good order in the Building, including the Rules and Regulations
attached to this Lease as Exhibit D. If any provision of the Rules and
Regulations conflicts with any provision of the Lease, the terms of the Lease
shall prevail. Landlord agrees that it shall not enforce any of the Rules and
Regulations in a discriminatory manner against Tenant.
SECTION 3: BASE RENT, ADDITIONAL RENT AND OTHER SUMS PAYABLE UNDER LEASE
3.1 PAYMENT OF RENTAL. Tenant agrees to pay Base Rent, Additional Rent and any
other sum due under this Lease to Landlord without demand, deduction, credit,
adjustment or offset of any kind or nature, in lawful money of the United States
when due under this Lease, at the offices of Manager at Manager's Address, or to
such other party or at such other place as Landlord may from time to time
designate in writing.
3.2 BASE RENT. Tenant agrees to pay Base Rent to Landlord without demand, in
advance on or before the first day of each calendar month of the Lease Term.
Base Rent for any partial month at the beginning or end of the Lease Term shall
be prorated. On execution of this Lease, Tenant has paid to Landlord the amount
specified in the definition of Prepaid Rent for the month specified in the
definition of that term. Base Rent for any partial month at the beginning of the
Lease Term shall be paid by Tenant on the Commencement Date.
3.3 SECURITY DEPOSIT. As security for the full and faithful payment of all sums
due under this Lease and the full and faithful performance of every covenant and
condition of this Lease to be performed by Tenant, Tenant agrees to pay to
Landlord upon execution of this Lease the sum specified in the definition of the
term Security Deposit. If Tenant shall breach or default with respect to any
payment obligation or other covenant or condition of this Lease, Landlord may
apply all or any part of the Security Deposit to the payment of any sum in
default or any damage suffered by Landlord as a result of such breach or
default, and in such event, Tenant shall, upon demand by Landlord, deposit with
Landlord the amount so applied so that Landlord shall have the full amount of
the Security Deposit on hand at all times during the Lease Term. Landlord's use
or application of all or any portion of the Security Deposit shall not impair
any other rights or remedies provided under this Lease or under applicable law
and shall not be construed as a payment of liquidated damages. If Tenant shall
have fully complied with all of the covenants and conditions of this Lease, the
Security Deposit shall be repaid to Tenant, without interest, within ten (10)
Business Days after the expiration of this Lease. Tenant may not mortgage,
assign, transfer or encumber the Security Deposit and any such act on the part
of Tenant shall be without force or effect. In the event any bankruptcy,
insolvency, reorganization or other creditor-debtor proceedings shall be
instituted by or against Tenant, the Security Deposit shall be deemed to be
applied first to the payment of Base Rent, Additional Rent and all other sums
payable under this Lease to Landlord for all periods prior to the institution of
such proceedings and the balance, if any, may be retained by Landlord and
applied against Landlord's damages.
3.3.1 LETTER OF CREDIT IN LIEU OF CASH SECURITY DEPOSIT. In lieu of a cash
Security Deposit, Tenant may deliver to Landlord an irrevocable and
unconditional standby letter of credit made payable to Landlord, its successors
and assigns, in the sum of the applicable amount of the Security Deposit (the
"Letter of Credit"), in such form as is reasonably acceptable to Landlord, which
shall secure the performance by Tenant of all obligations on the part of Tenant
hereunder. The issuer of the Letter of Credit shall be a banking institution
with at least a rating of A and otherwise reasonably acceptable to Landlord.
Although Landlord shall only have the right to draw under the Letter of Credit
as set forth herein, under the terms of the Letter of Credit, the sole condition
to Landlord's draw upon the Letter of Credit shall be presentment to the issuer
thereof, prior to or on the expiration date, of a demand for payment. The Letter
of Credit shall be self-renewing from year to year during the Term of this Lease
(in the
-6-
8
applicable amount of the Security Deposit as may be in effect from time to time)
so as to expire no earlier than thirty (30) days following the Lease expiration
date and shall contain such other customary terms as Landlord requires in its
reasonable discretion. It is agreed: (i) that the Letter of Credit may be drawn
upon to cure any Event of Default that may exist, without prejudice to any other
remedy or remedies which Landlord may have on account thereof; and upon
Landlord's demand, Tenant shall reimburse the issuer for the amount so drawn so
that the Letter of Credit will be restored to its original amount; (ii) that the
Letter of Credit may be drawn upon if the Letter of Credit has not been extended
or renewed without amendment at least forty five (45) days prior to any then
current expiration date thereof; (iii) that if the rating of the issuer of the
Letter of Credit at any time drops below A, within sixty (60) days of Landlord's
demand, Tenant shall replace the Letter of Credit with another Letter of Credit
in a form reasonably acceptable to Landlord and with an issuer with a rating of
at least an A and otherwise reasonably acceptable to Landlord; Landlord may draw
on the existing Letter of Credit if, after Landlord requests that Tenant replace
the Letter of Credit as aforesaid, Landlord is not provided with a substitute
Letter of Credit in a form, and from an issuer, satisfactory to Landlord as
provided above at least fifteen (15) days prior to the then-current expiration
date of the Letter of Credit; (iv) that should the Premises be conveyed by
Landlord, the Letter of Credit or any portion thereof shall be assigned to
Landlord's transferee and thereafter Landlord shall be released from any and all
liability with respect to the Letter of Credit and its application or return,
and Tenant agrees to look to such transferee for such application or return; and
(v) that the Letter of Credit shall be returned to Tenant no later than thirty
(30) days after the expiration of the Term or any renewal or extension thereof,
provided Tenant has vacated the Premises and surrendered possession thereof to
Landlord at the expiration of the Term or any extension thereof as provided
herein and has paid Landlord all sums due and owing under this Lease.
3.4 ADDITIONAL RENT. Definitions of certain terms used in this paragraph are set
forth in subparagraph 3.4.5. Tenant agrees to pay to Landlord additional rent as
computed in this paragraph (individually and collectively the "Additional
Rent"):
3.4.1 RENTAL ADJUSTMENT FOR ESTIMATED OPERATING COSTS AND PROPERTY
TAXES. Landlord shall furnish Tenant a written statement of Estimated Operating
Costs Allocable to the Premises and estimated Property Taxes Allocable to the
Premises for each Year and the amount payable monthly by Tenant for such Costs
shall be computed as follows: one-twelfth (1/12) of the amount, if any, by
which the Estimated Operating Costs Allocable to the Premises and the Estimated
Property Taxes Allocable to the Premises exceeds the Base Amount shall be
Additional Rent and shall be paid monthly by Tenant for each month during such
Year after the Commencement Date. If the Commencement Date occurs on a date
other than the first day of the Year, the statements provided by Landlord to
Tenant and the computation of the monthly payment amounts shall be determined
based on a proration of the excess amount over a 360-day year. If such written
statement (except the first statement, which shall be prorated pursuant to the
previous sentence) is furnished after the commencement of the Year, Tenant shall
also make a retroactive lump-sum payment equal to the amount of the monthly
payment amount multiplied by the number of months during the Year after the
Commencement Date for which no payment was paid.
3.4.2 ACTUAL COSTS. After the close of each Year, Landlord shall
deliver to Tenant a written statement setting forth the Operating Costs
Allocable to the Premises and Property Taxes Allocable to the Premises during
the preceding Year. If such costs for any Year exceed the Estimated Operating
Costs Allocable to the Premises or the Estimated Property Taxes Allocable to the
Premises paid by Tenant to Landlord pursuant to subparagraph 3.4.1 for such
Year, Tenant shall pay the amount of such excess to Landlord within twenty (20)
Business Days after receipt of such statement by Tenant. If such statement shows
the Operating Costs Allocable to the Premises or the Property Taxes Allocable to
the Premises to be less than the Estimated Operating Costs Allocable to the
Premises or the Property Taxes Allocable to the Premises, as the case may be,
paid by Tenant to Landlord pursuant to subparagraph 3.4.1, then the amount of
such overpayment shall be paid by Landlord to Tenant within twenty (20) Business
Days following the date of such statement or, at Landlord's option, shall be
credited towards the installment(s) of Additional Rent next coming due from
Tenant.
3.4.3 DETERMINATION. The determination of Operating Costs Allocable to
the Premises and Property Taxes Allocable to the Premises shall be made by
Landlord. Any sums payable under this Lease pursuant to this paragraph shall be
Additional Rent and, in the event of nonpayment of such sums, Landlord shall
have the same rights and remedies with respect to such nonpayment as it has with
respect to nonpayment of the Base Rent due
-7-
9
under this Lease.
3.4.4 END OF TERM. If this Lease shall terminate on a day other than
the last day of a Year, (a) Landlord shall estimate the Operating Costs
Allocable to the Premises and the Property Taxes Allocable to the Premises for
such Year predicated on the most recent reliable information available to
Landlord; (b) the amounts determined under clause (a) of this sentence shall be
prorated by multiplying each such amount by a fraction, the numerator of which
is the number of days within the Lease Term in such Year and the denominator of
which is 360; (c) the Base Amount Allocable to the Premises on account of
Operating Expense, net of Property Taxes and the Base Amount Allocable to the
Premises on account of Property Taxes shall be prorated in the manner described
in clause (b); (d) the clause (c) amounts (i.e., the prorated Base Amount
Allocable to the Premises on account of Operating Expense, net of Property Taxes
and the Base Amount Allocable to the Premises on account of Property Taxes,
respectively) shall be deducted from the clause (b) amounts (i.e., the prorated
Operating Costs Allocable to the Premises and the prorated Property Taxes
Allocable to the Premises, respectively); (e) if the respective clause (d)
amounts exceed the Estimated Operating Costs Allocable to the Premises and the
Estimated Amount of Property Taxes Allocable to the Premises, respectively, paid
by Tenant for the last Year in the Lease Term, then Tenant shall pay the excess
to Landlord within twenty (20) Business Days after Landlord's delivery to Tenant
of a statement for such excess; and (f) if the Estimated Operating Costs
Allocable to the Premises and the Estimated Amount of Property Taxes Allocable
to the Premises, respectively, paid by Tenant for the last Year in the Lease
Term exceed the respective clause (d) amounts, then Landlord shall refund to
Tenant the excess within the twenty (20) Business Day period described in clause
(e) Landlord's and Tenant's obligations under this paragraph shall survive the
expiration or other termination of this Lease.
3.4.5 DEFINITIONS. Each underlined term in this subparagraph shall have
the meaning set forth next to that underlined term:
BASE AMOUNT: The Base Amount on account of Operating Costs, net of
Property Taxes, shall be Six and 28/100 Dollars ($6.28). The Base
Amount on account of Property Taxes shall be Three and 20/100 Dollars
($3.20).
ESTIMATED OPERATING COSTS ALLOCABLE TO THE PREMISES: Landlord's
estimate of Operating Costs allocable to the Premises for a Year to be
given by Landlord to Tenant pursuant to subparagraph 3.4.1.
ESTIMATED PROPERTY TAXES ALLOCABLE TO THE PREMISES: Landlord's
estimated Property Taxes Allocable to the Premises for a Year to be
given by Landlord to Tenant pursuant to subparagraph 3.4.1.
OPERATING COSTS: All expenses paid or incurred by Landlord for
maintaining, operating, owning and repairing any or all of the Land,
Building, related improvements, and the personal property used in
conjunction with such Land, Building and related improvements,
including all expenses paid or incurred by Landlord for: (a) utilities,
including electricity, water, gas, sewers, refuse collection, telephone
charges, cable television or other electronic or microwave signal
reception, steam, heat, cooling or any other service which is now or in
the future considered a utility and which are not payable directly by
tenants in the Building; (b) supplies; (c) cleaning and janitorial
services (including window washing), landscaping and landscaping
maintenance (including irrigating, trimming, moving, fertilizing,
seeding and replacing plants), snow removal and other services; (d)
security services, if any; (e) insurance; (f) management fees; (g)
services of independent contractors; (h) compensation (including
employment taxes and fringe benefits) of all persons who perform duties
in connection with any service, repair, maintenance, replacement or
improvement or other work included in this subparagraph; (i) license,
permit and inspection fees; (j) assessments and special assessments due
to deed restrictions, declarations or owners associations or other
means of allocating costs of a larger tract of which the Land is a
part; (k) rental of any machinery or equipment; (1) audit fees and
accounting services related to the Building, and charges for the
computation of the rents and charges payable by tenants in the Building
(but only to the extent the cost of such fees and services are in
addition to the cost of the management fee); (m) the cost of
improvements, repairs or replacements; (n) maintenance and service
contracts; (o) legal fees and other expenses of legal or other dispute
resolution proceedings; (p) maintenance and repair of the roof and roof
membranes, (q) costs incurred by Landlord for compliance with Access
Laws, as set forth in the paragraph captioned "Access Laws"; (r)
elevator service and repair, if any; and (s) any other expense or
charge which in accordance with generally accepted accounting and
management principles
-8-
10
would be considered an expense of maintaining, operating, owning or
repairing the Building. Without limiting the foregoing, Operating Costs
shall include replacement of roofs and roof membranes; exterior
painting; parking area resurfacing, resealing and restriping parking
areas and driveways; upgrading of the HVAC systems in the Building, and
other capital improvements which are intended to reduce Operating
Costs; provided that, such capital improvements, whether installed
before or after the Commencement Date, shall be amortized with market
interest over their estimated useful lives as determined by Landlord
and only the amortization installments and interest attributable to the
Lease Term shall be an Operating Cost under this Lease.
Operating Costs shall not include any of the following: ground
rent; interest and amortization of funds borrowed by Landlord for items
other than capital improvements; leasing commissions and advertising
and space planning expenses incurred in procuring tenants; and
salaries, wages, or other compensation paid to officers or executives
of Landlord in their capacities as officers and executives. If less
than ninety-five percent (95%) of the net rentable area of the Building
is occupied by tenants at all times during any Year, then Operating
Costs for such Year may include all additional costs and expenses that
Landlord reasonably determines would have been incurred had ninety-five
percent (95%) of the Building been occupied at all times during such
Year by tenants.
OPERATING COSTS ALLOCABLE TO THE PREMISES: The product of Tenant's Pro
Rata Share times Operating Costs.
PROPERTY TAXES ALLOCABLE TO THE PREMISES: The product of Tenant's Pro
Rata Share times Property Taxes.
3.5 UTILITIES. Tenant shall contract directly and pay for all water, gas, heat,
light, power, telephone, sewer, sprinkler charges and other utilities used on or
from the Premises together with any taxes, penalties, surcharges or similar
charges relating to such utilities. If any such service is not separately
metered to the Premises, the cost therefor shall be billed by Landlord to Tenant
as a part of Tenant's share of Operating Costs, provided that the cost of
electric current for lights and convenience outlets shall be billed by Landlord
to Tenant separately from, and in addition to, Operating Costs. Landlord
estimates that the present cost of electric current for lights and convenience
outlets only shall be $1.00 per square foot. Landlord makes no warranty or
representation that such cost will not increase during the Term due to increases
in electric rates or electricity consumption, as the case may be. HVAC service
shall be provided to the Premises Monday through Friday (excluding holidays)
from 8:00 a.m. to 6:00 p.m. and Saturdays (excluding holidays) from 8:00 a.m. to
12:00 noon. If Tenant shall require after-hours HVAC, Tenant may request such
service by notifying Landlord's Manager not later than 11:00 a.m. of the day
prior to the day on which such after-hours service shall be needed, and not
later than 2:00 p.m. on the Thursday preceding any weekend for which such
after-hours service shall be needed reasonably estimating the number of hours
required for such after-hours service. Tenant shall pay for such additional HVAC
service at Landlord's hourly rate in effect from time to time, the fee schedule
initially in effect being attached as Exhibit E, and shall pay all charges
therefor when and as billed by Landlord. Such charges shall be deemed Additional
Rent under the Lease.
3.6 HOLDOVER. If Tenant shall, without the prior consent of Landlord, hold over
after the expiration or termination of the Lease Term, Tenant shall be deemed to
be occupying the Premises under a month-to-month tenancy, which tenancy may be
terminated as provided by the laws of the state in which the Premises are
located. During such tenancy, Tenant agrees to pay to Landlord at twice the rate
of Base Rent in effect on the expiration or termination of the Lease Term, plus
all Additional Rent and other sums payable under this Lease, and to be bound by
all of the other covenants and conditions specified in this Lease, so far as
applicable. The preceding provisions shall not be construed as consent for
Tenant to hold over.
3.7 LATE CHARGE. If Tenant fails to make any payment of Base Rent, Additional
Rent or other amount when due under this Lease, Tenant shall also pay a late
charge equal to five percent (5%) of the amount of any such payment. Landlord
and Tenant agree that this charge compensates Landlord for the administrative
costs caused by the delinquency. The parties agree that Landlord's damage would
be difficult to compute and the amount stated in this paragraph represents a
reasonable estimate of such damage. Assessment or payment of the late charge
contemplated in this paragraph shall not excuse or cure any Event of Default or
breach by Tenant under this Lease or impair any other right or remedy provided
under this Lease or under law.
3.8 DEFAULT RATE. Any Base Rent, Additional Rent or other sum payable under this
Lease which is not paid when due shall bear interest at a rate equal to the
lesser of: (a) the published prime rate of Xxxxx Bank N.A., or
-9-
11
such other national banking institution designated by Landlord if such bank
ceases to publish a prime rate (the "Prime Rate"), then in effect, plus four (4)
percentage points, or (b) the maximum rate of interest per annum permitted by
applicable law (the "Default Rate"), but the payment of such interest shall not
excuse or cure any Event of Default or breach by Tenant under this Lease or
impair any other right or remedy provided under this Lease or under law.
3.9 OPERATING COST AUDIT. Landlord shall maintain records concerning estimated
and actual Operating Costs Allocable to the Premises for no less than twelve
(12) months following the period covered by the statement or statements
furnished Tenant, after which time Landlord may dispose of such records.
Provided that Tenant is not then in default of its obligation to pay Base Rent,
Additional Rent or other payments required to be made by it under this Lease and
provided that Tenant is not otherwise in default under this Lease, Tenant may,
at Tenant's sole cost and expense, cause a Qualified Person (defined below) to
inspect Landlord's records. Such inspection, if any, shall be conducted no more
than once each Year, during Landlord's normal business hours within seventy five
(75) Business Days after receipt of Landlord's written statement of Operating
Costs Allocable to the Premises for the previous year, upon first furnishing
Landlord at least fifteen (15) Business Days prior written notice. Any errors
disclosed by the review shall be promptly corrected by Landlord; provided,
however, that if Landlord disagrees with any such claimed errors, Landlord shall
have the right to cause another review to be made by an auditor of Landlord's
choice. In the event the results of the review of records (taking into account,
if applicable, the results of any additional review caused by Landlord) reveal
that Tenant has overpaid obligations for a preceding period, the amount of such
overpayment shall be credited against Tenant's subsequent installment of Base
Rent, Additional Rent or other payments due to Landlord under the Lease. In the
event that such results show that Tenant has underpaid its obligations for a
preceding period, the amount of such underpayment shall be paid by Tenant to
Landlord with the next succeeding installment obligation of estimated Operating
Costs Allocable to the Premises. If the actual Operating Costs Allocable to the
Premises for any given Year were improperly computed and if the actual Operating
Costs Allocable to the Premises are overstated by more than 5%, Landlord shall
reimburse Tenant for the cost of its audit. A "Qualified Person" means an
accountant or other person experienced in accounting for income and expenses of
office projects, who is engaged solely by Tenant on terms which do not entail
any compensation based or measured in any way upon any savings in Additional
Rent or reduction in Operating Costs Allocable to the Premises achieved through
the inspection process described in this subparagraph.
SECTION 4: GENERAL PROVISIONS
4.1 MAINTENANCE AND REPAIR BY LANDLORD. Subject to the paragraphs captioned
"Damage or Destruction" and "Condemnation", Landlord shall maintain the public
and common areas of the Building in reasonably good order and condition, except
for damage occasioned by the act or omission of Tenant or Tenant's Agents which
shall be paid for entirely by Tenant upon demand by Landlord, and ordinary wear
and tear. In the event any or all of the Building becomes in need of maintenance
or repair which Landlord is required to make under this Lease, Tenant shall
immediately give written notice to Landlord, and Landlord shall not be obligated
in any way to commence such maintenance or repairs until a reasonable time
elapses after Landlord's receipt of such notice.
4.2 MAINTENANCE AND REPAIR BY TENANT. Except as is expressly set forth as
Landlord's responsibility pursuant to the paragraph captioned "Maintenance and
Repair by Landlord," Tenant shall at Tenant's sole cost and expense keep and
maintain the Premises in good condition and repair, including interior painting,
cleaning of the interior side of all exterior glass, plumbing and utility
fixtures and installations, carpets and floor coverings, all interior wall
surfaces and coverings including tile and paneling, replacement of all broken
windows (including without limitation any exterior windows), exterior and
interior doors, roof penetrations and membranes in connection with any Tenant
installations on the roof including satellite dishes, light bulb replacement and
interior preventative maintenance. If Tenant fails to maintain or repair the
Premises in accordance with this paragraph, then Landlord may, but shall not be
required to, enter the Premises upon two (2) Business Days prior written notice
to Tenant (or immediately without any notice in the case of an emergency) to
perform such maintenance or repair at Tenant's sole cost and expense. Tenant
shall pay to Landlord the cost of such maintenance or repair within ten (10)
Business Days of written demand from Landlord.
4.3 COMMON AREAS/SECURITY. The common areas of the Building shall be subject to
Landlord's sole Management and control. Without limiting the generality of the
immediately preceding sentence, Landlord reserves
-10-
12
the exclusive right as it deems necessary or desirable to install, construct,
remove, maintain and operate lighting systems, facilities, improvements,
equipment and signs on, in or to all parts of the common areas; change the
number, size, height, layout, or locations of walks, driveways and truckways or
parking areas now or later forming a part of the Land or Building; make
alterations or additions to the Building or common area; close temporarily all
or any portion of the common areas to make repairs, changes or to avoid public
dedication; grant easements to which the Land will be subject, replat,
subdivide, or make other changes to the Land; place, relocate and operate
utility lines through, over or under the Land and Building; and use or permit
the use of all or any portion of the roofs of the Building. Landlord has no duty
or obligation to provide any security services in, on or around the Premises,
Land or Building, and Tenant recognizes that security services, if any, provided
by Landlord will be for the sole benefit of Landlord and the protection of
Landlord's property and under no circumstances shall Landlord be responsible
for, and Tenant waives any rights with respect to, Landlord providing security
or other protection for Tenant or Tenant's Agents or property in, on or about
the Premises, Land or Building. Landlord reserves the right to relocate parking
areas and driveways and to build additional improvements in the common areas.
4.4 TENANT ALTERATIONS. Tenant shall not make any alterations, additions or
improvements in or to the Premises, or make changes to locks on doors, or add,
disturb or in any way change any floor covering, wall covering, fixtures,
plumbing or wiring (individually and collectively "Tenant Alterations"), without
first obtaining the consent of Landlord which may be withheld in Landlord's
discretion. Tenant shall deliver to Landlord full and complete plans and
specifications for any proposed Tenant Alterations and, if consent by Landlord
is given, all such work shall be performed at Tenant's expense by Landlord or by
Tenant at Landlord's election and by contracts previously approved by Landlord.
Without limiting the generality of the foregoing, Landlord may require Tenant
(if Landlord has elected to require Tenant to perform the Tenant Alterations),
at Tenant's sole cost and expense, to obtain and provide Landlord with proof of
insurance coverage and a payment and performance bond, in forms, amounts and by
companies acceptable to Landlord. All Tenant Alterations to the Premises,
regardless of which party constructed them, shall become the property of
Landlord and shall remain upon and be surrendered with the Premises upon the
expiration or earlier termination of this Lease, unless Landlord's consent to
such Tenant Alterations is conditioned upon Tenant removing the Tenant
Alterations upon the expiration or earlier termination of this Lease. If Tenant
fails to remove any such Tenant Alterations as required by Landlord's consent,
Landlord may do so and Tenant shall pay the entire cost thereof to Landlord
within ten (10) Business Days after Tenant's receipt of Landlord's written
demand therefor, which obligation shall survive expiration or earlier
termination of the Lease. Tenant shall reimburse Landlord, upon receipt of
demand therefor, for all out-of-pocket costs and expenses incurred by Landlord
related to its review of Tenant's plans and specifications (regardless of
whether Landlord approves Tenant's request) and Tenant's construction. Nothing
contained in this paragraph or the paragraph captioned "Tenant's Work
Performance" shall be deemed a waiver of the provisions of the paragraph
captioned "Mechanic's Liens".
4.5 TENANT'S WORK PERFORMANCE. If Landlord elects to require Tenant to perform
the Tenant Alterations, then the Tenant Alterations shall be performed by
contractors employed by Tenant under one or more construction contracts, in form
and content approved in advance in writing by Landlord (which approval shall be
subject to Landlord's discretion and may include a requirement that the prime
contractor and the respective subcontractors: (a) be parties to, and bound by, a
collective bargaining agreement with a labor organization affiliated with the
Building and Construction Trades Council of the AFL-CIO and (b) employ only
members of such labor organizations to perform work within their respective
jurisdictions). Tenant's contractors, workers and suppliers shall work in
harmony with and not interfere with workers or contractors of Landlord or other
tenants of Landlord. If Tenant's contractors, workers or suppliers do, in the
opinion of Landlord, cause such disharmony or interference, Landlord's consent
to the continuation of such work may be withdrawn upon written notice to Tenant.
All Tenant Alterations shall be (1) completed in accordance with the plans and
specifications approved by Landlord; (2) completed in accordance with all
Governmental Requirements; (3) carried out promptly in a good and workmanlike
manner; (4) of all new materials; and (5) free of defect in materials and
workmanship. Tenant shall pay for all damage to the Premises, Building and Land
caused by Tenant or Tenant's Agents. Tenant shall indemnify, defend and hold
harmless Landlord and Landlord's Agents from any Claims arising as a result of
any defect in design, material or workmanship of any Tenant Alterations.
4.6 SURRENDER OF POSSESSION. Tenant shall, at the expiration or earlier
termination of this Lease, surrender
-11-
13
and deliver the Premises to Landlord in as good condition as when received by
Tenant from Landlord or as later improved, reasonable use and wear excepted.
4.7 REMOVAL OF PROPERTY. Upon expiration or earlier termination of this Lease,
Tenant may remove its trade fixtures, office supplies and office furniture and
equipment if (a) such items are readily moveable and are not attached to the
Premises; (b) such removal is completed prior to the expiration or earlier
termination of this Lease; (c) Tenant is not in default of any covenant or
condition of this Lease at the time of such removal; and (d) Tenant immediately
repairs all damage caused by or resulting from such removal. All other property
in the Premises and any Tenant Alterations (including, wall-to-wall carpeting,
paneling, wall covering or lighting fixtures and apparatus) or any other article
affixed to the floor, walls, ceiling or any other part of the Premises or
Building, shall become the property of Landlord and shall remain upon and be
surrendered with the Premises, except as may be otherwise provided in the
paragraph captioned "Tenant Alterations" or the paragraph captioned "Tenant's
Contribution to Tenant Improvement Costs". Tenant waives all rights to any
payment or compensation for such property. If, at the expiration or earlier
termination of this Lease or at such time as Landlord exercises its right of
re-entry, Tenant has failed to remove any property from the Premises, Building
or Land which it is entitled or required to remove as provided in this Lease,
Landlord may, at its option, remove and store such property without liability
for loss of or damage to such property, such storage to be for the account and
at the expense of Tenant. If Tenant fails to pay the cost of storing any such
property, Landlord may, at its option, after it has been stored for a period of
twenty (20) Business Days or more, sell or permit to be sold, any or all such
property at public or private sale (and Landlord may become a purchaser at such
sale), in such manner and at such times and places as Landlord in its sole
discretion may deem proper, without notice to Tenant, and Landlord shall apply
the proceeds of such sale: first, to the cost and expense of such sale,
including reasonable attorney's fees actually incurred; second to the payment of
the costs or charges for storing any such property; third to the payment of any
other sums of money which may then be or later become due Landlord from Tenant
under this Lease; and, fourth the balance, if any, to Tenant.
4.8 ACCESS. Tenant shall permit Landlord and Landlord's Agents to enter into the
Premises at any time on at least two (2) Business Days' notice (except in case
of emergency, in which case no notice shall be required), for the purpose of
inspecting the same or for the purpose of repairing, altering or improving the
Premises or the Building. Nothing contained in this paragraph shall be deemed to
impose any obligation upon Landlord not expressly stated elsewhere in this
Lease. When reasonably necessary, Landlord may temporarily close Building or
Land entrances, Building doors or other facilities, without liability to Tenant
by reason of such closure and without such action by Landlord being construed as
an eviction of Tenant or as relieving Tenant from the duty of observing or
performing any of the provisions of this Lease. Landlord shall have the right to
enter the Premises for the purpose of showing the Premises to prospective
tenants within the period of one-hundred twenty (120) Business Days prior to the
expiration or sooner termination of this Lease and to erect on the Premises a
suitable sign indicating the Premises are available. Landlord shall exercise its
foregoing rights under this paragraph 4.8 so as not to unreasonably interfere
with Tenant's use and occupancy of the Premises. Tenant shall give written
notice to Landlord at least twenty (20) Business Days prior to vacating the
Premises and shall arrange to meet with Landlord for a joint inspection of the
Premises prior to vacating. In the event of Tenant's failure to give such notice
or arrange such joint inspection, Landlord's inspection at or after Tenant's
vacating the Premises shall be conclusively deemed correct for purposes of
determining Tenant's responsibility for repairs and restoration. Landlord shall
not be liable for the consequences of admitting by passkey, or refusing to admit
to the Premises, Tenant or any of Tenant's Agents, or other persons claiming
the right of admittance
4.9 DAMAGE OR DESTRUCTION.
4.9.1 If the Premises are damaged by fire, earthquake or other
casualty, Tenant shall give immediate written notice thereof to Landlord. If
Landlord estimates that the damage can be repaired within one hundred twenty
(120) Business Days after Landlord is notified by Tenant of such damage and if
there are sufficient insurance proceeds available to repair such damage, then
Landlord shall proceed with reasonable diligence to restore the Premises to
substantially the condition which existed prior to the damage and this Lease
shall not terminate. If, in Landlord's estimation, the damage cannot be repaired
within such 120 Business Day period or if there are insufficient insurance
proceeds available to repair such damage, Landlord may elect in its absolute
discretion to either: (a) terminate this lease or (b) restore the Premises to
substantially the condition which existed prior to the damage and this lease
will continue. If Landlord restores the Premises under this paragraph, then (1)
-12-
14
the Lease Term shall be extended for the time required to complete such
restoration, (2) Tenant shall pay to Landlord, upon demand, Tenant's Pro Rata
Share of any applicable deductible amount specified under Landlord's insurance
and (3) Landlord shall not be required to repair or restore Tenant Improvements,
Tenant Alterations, or any or all furniture, fixtures, equipment, inventory,
improvements or other property which was in or about the Premises at the time of
the damage and was not owned by Landlord. Base Rent, Additional Rent and any
other sum due under this Lease during any reconstruction period shall not be
abated. Tenant agrees to look to the provider of Tenant's insurance for coverage
for the loss of Tenant's use of the Premises and any other related losses or
damages incurred by Tenant during any reconstruction period.
4.9.2 If the Building is damaged by fire, earthquake or other casualty
and more than fifty percent (50%) of the Building is rendered untenantable,
without regard to whether the Premises are affected by such damage, Landlord may
in its absolute discretion and without limiting any other options available to
Landlord under this Lease or otherwise, elect to terminate this Lease by notice
in writing to Tenant within forty (40) Business Days after the occurrence of
such damage. Such notice shall be effective twenty (20) Business Days after
receipt by Tenant unless a later date is set forth in Landlord's notice,
4.9.3 Notwithstanding anything contained in this Lease to the contrary,
if there is damage to the Premises, or Building and the holder of any
indebtedness secured by a mortgage or deed of trust covering any such property
requires that the insurance proceeds be applied to such indebtedness, then
Landlord shall have the right to terminate this Lease by delivering written
notice of termination to Tenant within fifteen (15) Business Days after such
requirement is made by such holder.
4.10 CONDEMNATION. If all of the Premises, or such portions of the Building as
may be required for the Tenant's reasonable use of the Premises, are taken by
eminent domain or by conveyance in lieu thereof, this Lease shall automatically
terminate as of the date the physical taking occurs, and all Base Rent,
Additional Rent and other sums payable under this Lease shall be paid to that
date. In case of taking of a part of the Premises or a portion of the Building
not required for the Tenant's reasonable use of the Premises, then this Lease
shall continue in full force and effect and the Base Rent shall be equitably
reduced based on the proportion by which the floor area of the Premises is
reduced, such reduction in Base Rent to be effective as of the date the physical
taking occurs. Additional Rent and all other sums payable under this Lease shall
not be abated but Tenant's Pro Rata Share may be redetermined as equitable under
the circumstances. Landlord reserves all rights to damages or awards for any
taking by eminent domain relating to the Premises, Building, Land and the
unexpired term of this Lease. Tenant assigns to Landlord any right Tenant may
have to such damages or award and Tenant shall make no claim against Landlord
for damages for termination of its leasehold interest or interference with
Tenant's business. Tenant shall have the right, however, to claim and recover
from the condemning authority compensation for any loss to which Tenant may be
entitled for Tenant's moving expenses or other relocation costs; provided that,
such expenses or costs may be claimed only if they are awarded separately in the
eminent domain proceedings and not as a part of the damages recoverable by
Landlord.
4.11 PARKING. Tenant shall have the nonexclusive privilege to use parking spaces
on the Land in common with other tenants of Landlord, but only in areas
reasonably designated by Landlord and only on a first-come-first-served basis.
Tenant's parking privileges shall be subject to the rules and regulations
relating to parking adopted by Landlord from time to time. Landlord shall have
the right to grant designated, reserved parking stalls to other tenants in the
Building. Landlord makes no representations or warranties concerning the
availability of parking for Tenant's use at any time during the Term. Landlord
shall have no obligation whatsoever to monitor or police the use of the parking
or other common areas.
4.12 INDEMNIFICATION. Tenant shall indemnify, defend and hold harmless Landlord
and Landlord's Agents from and against any and all Claims, arising in whole or
in part out of (a) the possession, use or occupancy of the Premises or the
business conducted in the Premises, (b) any act, omission or negligence of
Tenant or Tenant's Agents, (c) any breach or default under this Lease by Tenant,
or (d) the installation, interconnection and use of Tenant's telecommunications
equipment. Neither Landlord nor Landlord's Agents shall, to the extent permitted
by law, have any liability to Tenant, or to Tenant's Agents, for any Claims
arising out of any cause whatsoever, including repair to any portion of the
Premises; interruption in the use of the Premises or any equipment therein; any
accident or damage resulting from any use or operation by Landlord, Tenant or
any person or entity of heating, cooling, electrical, sewerage or plumbing
equipment or apparatus; termination of this Lease by reason of damage to
-13-
15
the Premises or Building; fire, robbery, theft, vandalism, mysterious
disappearance or any other casualty; actions of any other tenant of the Building
or of any other person or entity; inability to furnish any service required of
Landlord as specified in this Lease; or leakage in any part of the Premises or
the Building from rain, ice or snow, or from drains, pipes or plumbing fixtures
in the Premises or the Building; except for Claims arising solely out of the
gross negligence or willful misconduct of Landlord in failing to repair or
maintain the Building as required by this Lease after notice by Tenant as
required by the paragraph captioned "Maintenance and Repair by Landlord";
provided that, in no event shall Landlord be responsible for any interruption to
Tenant's business or for any indirect or consequential losses suffered by Tenant
or Tenant's Agents. The obligations of this paragraph shall be subject to the
paragraph captioned "Waiver of Subrogation". Landlord, subject to the
limitations on Landlord's liability contained above and elsewhere in this Lease,
agrees to hold Tenant harmless and to defend and indemnify Tenant from and
against any and all claims and liabilities arising from any failure to perform
or observe any of the terms, covenants or conditions of this Lease on the part
of Landlord to be performed or observed as required by this Lease following all
applicable notice and cure periods available to Landlord under this Lease.
4.13 TENANT INSURANCE.
4.13.1 Tenant shall, throughout the Lease Term, at its own expense,
keep and maintain in full force and effect:
(a) A policy of commercial general liability insurance, including a
contractual liability endorsement covering Tenant's obligations under the
paragraph captioned "Indemnification", on or before the time Tenant and/or its
contractors enter the Premises and insuring against claims of bodily injury and
death or property damage or loss with a combined single limit at the
Commencement Date of this Lease of not less than Two Million Dollars
($2,000,000.00), which limit shall be reasonably increased during the Lease Term
at Landlord's request to reflect both increases in liability exposure arising
from inflation as well as from changing use of the Premises or changing legal
liability standards, which policy shall be payable on an "occurrence" rather
than a "claims made" basis, and which policy names Landlord and Manager and, at
Landlord's request Landlord's mortgage lender(s) or investment advisors, as
additional insureds;
(b) A policy of extended property insurance (which is commonly called
"all risk") covering Tenant Improvements, Tenant Alterations, and any and all
furniture, fixtures, equipment, inventory, improvements and other property in or
about the Premises which is not owned by Landlord, for one hundred percent
(100%) of the then current replacement value of such property; and
(c) Business interruption insurance in an amount sufficient to cover
costs, damages, lost income, expenses, Base Rent, Additional Rent and all other
sums payable under this Lease, should any or all of the Premises not be usable
for a period of up to six (6) months.
4.13.2 All insurance policies required under this paragraph shall be
with companies reasonably approved by Landlord and each policy shall provide
that it is not subject to cancellation or reduction in coverage except after
thirty (30) days' written notice to Landlord. Tenant shall deliver to Landlord
and, at Landlord's request Landlord's mortgage lender(s), prior to the
Commencement Date and from time to time thereafter, certificates evidencing the
existence and amounts of all such policies.
4.13.3 If Tenant fails to acquire or maintain any insurance or provide
any certificate required by this paragraph, Landlord may, but shall not be
required to, obtain such insurance or certificates and the costs associated with
obtaining such insurance or certificates shall be payable by Tenant to Landlord
on demand.
4.14 LANDLORD'S INSURANCE. Landlord shall, throughout the Lease Term, keep and
maintain in full force and effect:
(a) A policy of commercial general liability insurance, insuring
against claims of bodily injury and death or property damage or loss with a
combined single limit at the Commencement Date of not less than Five Million
Dollars ($5,000,000.00), which policy shall be payable on an "occurrence" rather
than a "claims made" basis; and
(b) A policy of extended property insurance (what is commonly called
"all risk") covering the Building and Landlord's personal property, if any,
located on the Land in the amount of one hundred percent (100%) of the then
-14-
16
current replacement value of such property.
Landlord may, but shall not be required to, maintain property insurance coverage
for earthquakes and floods in such amounts as Landlord deems appropriate. Such
policies may be "blanket" policies which cover other properties owned by
Landlord. To the extent that any payment on an insurance claim under any
Landlord's policy is reduced by a deductible, such deductible shall be an
Operating Cost.
4.15 WAIVER OF SUBROGATION. Notwithstanding anything in this Lease to the
contrary, Landlord and Tenant hereby each waive and release the other from any
and all Claims or any loss or damage that may occur to the Land, Building,
Premises, or personal property located therein, by reason of fire or other
casualty regardless of cause or origin, including the negligence or misconduct
of Landlord, Tenant, Landlord's Agents or Tenant's Agents, but only to the
extent of the insurance proceeds paid to such releasor under its policies of
insurance or, if it fails to maintain the required policies, the insurance
proceeds that would have been paid to such releasor if it had maintained such
policies. Each party to this Lease shall promptly give to its insurance company
written notice of the mutual waivers contained in this subparagraph, and shall
cause its insurance policies to be properly endorsed, if necessary, to prevent
the invalidation of any insurance coverages by reason of the mutual waivers
contained in this subparagraph.
4.16 ASSIGNMENT AND SUBLETTING BY TENANT.
4.16.1 Tenant shall not have the right to assign, transfer, mortgage or
encumber this Lease in whole or in part, nor sublet the whole or any part of the
Premises, nor allow the occupancy of all or any part of the Premises by another,
without first obtaining Landlord's written consent. Notwithstanding the
foregoing Tenant shall have the right, without Landlord's consent, but upon
giving prior written notice to Landlord, to assign this Lease or to sublet all
or any part of the Premises to an affiliated entity controlling, controlled by,
or under common control with Tenant or to a corporation or other entity
resulting from a merger of or consolidation with Tenant or to an entity to which
all or substantially all of Tenant's assets shall be transferred (such entity
being referred to herein as a "Permitted Assignee" or "Permitted Subtenant," as
the case may be) provided, that the assignee or subtenant thereof executes and
delivers to Landlord an agreement ("Assumption Agreement") pursuant to which
such transferee shall agree to be bound by all of the terms, provisions and
conditions of the Lease including, without limitation, the provisions of this
paragraph 4.16 and, provided further, such Permitted Assignee or Permitted
Subtenant, as the case may be, shall have, at the time of the transfer, a net
worth equal to the greater of (x) the net worth of Tenant as of the date of this
Lease or (y) the net worth of Tenant as of the date of the transaction in
question. For purposes of the preceding sentence, "control" shall mean direct or
indirect ownership of more than fifty percent (50%) of the beneficial interest
of the entity in question. Notwithstanding any permitted assignment or
subletting, Tenant shall at all times remain directly, primarily and fully
responsible and liable for the payment of all sums payable under this Lease and
for compliance with all of its other obligations as tenant under this Lease.
Upon the occurrence of an Event of Default, if the Premises or any part of the
Premises are then subject to an assignment or subletting, Landlord, in addition
to any other remedies provided in this Lease or by law, may at its option
collect directly from such assignee or subtenant all rents becoming due to
Tenant under such assignment or sublease and apply such rents against any sums
due to Landlord from Tenant under this Lease, and no such collection shall be
construed to constitute a novation or release of Tenant from the further
performance of Tenant's obligations under this Lease. Tenant makes an absolute
assignment to Landlord of such assignments and subleases and any rent, security
deposits and other sums payable under such assignments and subleases as
collateral to secure the performance of the obligations of Tenant under this
Lease. No consent once given by Landlord to any assignment or subletting shall
be deemed to relieve Tenant or any assignee or subtenant from the obligations of
seeking Landlord's prior written consent to any subsequent transfer.
4.16.2 In the event Tenant desires to assign this Lease or to sublet
all or any portion of the Premises, Tenant shall give written notice of such
desire to Landlord setting forth the name of the proposed subtenant or assignee,
the proposed term, the nature of the proposed subtenant's or assignee's business
to be conducted on the Premises, the rental rate, and any other particulars of
the proposed subletting or assignment that Landlord may reasonably request.
Without limiting the preceding sentence, Tenant shall also provide Landlord
with: (a) such financial information as Landlord may reasonably request
concerning the proposed subtenant or assignee, including recent financial
statements certified as accurate and complete by a certified public accountant
and by the president, managing partner or other appropriate officer of the
proposed subtenant or assignee; (b) proof satisfactory to
-15-
17
Landlord that the proposed subtenant or assignee will immediately occupy and
thereafter use the entire Premises (or any sublet portion of the Premises) for
the remainder of the Lease Term (or for the entire term of the sublease, if
shorter) in compliance with the terms of this Lease; and (c) a copy of the
proposed sublease or assignment or letter of intent. At the same time that
Tenant provides Landlord with notice of its desire to assign or sublease, Tenant
shall pay to Landlord the sum of $1500 as Landlord's fee for processing such
proposed assignment and sublease, including attorneys' fees incurred by Landlord
with respect to such processing. Receipt of such fee shall not obligate Landlord
to approve the proposed assignment or sublease.
4.16.3 In determining whether to grant or withhold consent to a
proposed assignment or sublease, Landlord may consider, and weigh, any
commercial factor it deems relevant. Without limiting what may be construed as a
factor considered by Landlord in good faith, Tenant agrees that any one or more
of the following will be proper grounds for Landlord's disapproval of a proposed
assignment or sublease:
(a) The proposed assignee or subtenant does not, in Landlord's good
faith judgment, have financial worth or creditworthiness equal to or greater
than that of Tenant as of the execution date of this Lease or sufficient
financial worth to insure full and timely performance under this Lease;
(b) Landlord has received insufficient evidence of the financial worth
or creditworthiness of the proposed assignee or subtenant to make the
determination set forth in clause (a);
(c) The proposed assignee or subtenant has a reputation for disputes in
contractual relations, for failure to observe and perform its contractual
obligations in a timely and complete manner or for negative business relations
in the business community as a tenant of property or otherwise;
(d) Landlord has received from any prior lessor of the proposed
assignee or subtenant a negative report concerning such prior lessor's
experience with the proposed assignee or subtenant;
(e) Landlord has had prior negative leasing experience with the
proposed assignee or subtenant;
(f) The use of the Premises by the proposed assignee or subtenant will
not be identical with the Permitted Uses;
(g) In Landlord's judgment, the proposed assignee or subtenant is
engaged in a business, or the Premises or any part of the Premises will be used
in a manner, that is not in keeping with the then standards of the Building, or
that is not compatible with the businesses of other tenants in the Building, or
that is inappropriate for the Building, or that will violate any negative
covenant as to use contained in any other lease of space in the Building;
(h) The use of the Premises by the proposed assignee or subtenant will
violate any Governmental Requirement or create a violation of Access Laws;
(i) Tenant is in default of any obligation of Tenant under this Lease,
or Tenant has defaulted under this Lease on three (3) or more occasions during
the twenty-four (24) months preceding the date that Tenant shall request such
consent;
(j) Landlord does not approve of any of the tenant improvements
required for the proposed assignee or subtenant; or
(k) Landlord has had contact with the proposed assignee or subtenant,
in the six (6) months preceding Tenant's request, regarding the leasing of space
by such proposed assignee or subtenant in the Building or any other buildings
owned by Landlord in the metropolitan area in which the Land is located.
(1) the proposed assignee or subtenant is then a tenant of Landlord in
the Building or a tenant of Landlord or an affiliate of Landlord in another
property.
4.16.4 Within fifteen (15) Business Days after Landlord's receipt of
all required information to be supplied by Tenant pursuant to this paragraph,
Landlord shall notify Tenant of Landlord's approval, disapproval or conditional
approval of any proposed assignment or subletting. Landlord shall have no
obligation to respond unless and until all required information has been
submitted. In the event Landlord approves of any proposed assignment or
subletting, Tenant and the proposed assignee or sublessee shall execute and
deliver to Landlord an assignment (or sublease) and Assumption Agreement in form
and content satisfactory to Landlord.
-16-
18
4.16.5 Any transfer, assignment or hypothecation, whether singly or
through an orchestrated series of transactions, of any of the stock or interest
in, or the assets of, Tenant which is either: (a) greater than fifty percent
(50%) of such stock, interest or (except as provided above) assets or (b)
intended as a subterfuge denying Landlord the benefits of this paragraph, shall
be deemed to be an assignment within the meaning and provisions of this
paragraph and shall be subject to the provisions of this paragraph.
4.16.6 If Landlord consents to any assignment or sublease and Tenant
receives rent or any other consideration, either initially or over the term of
the assignment or sublease, in excess of the Base Rent and Additional Rent (or,
in the case of a sublease of a portion of the Premises, in excess of the Base
Rent paid by Tenant on a square footage basis under this Lease), Tenant shall
pay to Landlord fifty percent (50%) of such excess.
4.16.7 Except in the case of an assignment or sublet to a Permitted
Assignee or Permitted Subtenant, If Tenant shall propose to assign this Lease or
to sublet all or any portion of the Premises, Landlord shall have the right to
recapture the Premises or the applicable portion thereof (a "Recapture") by
giving written notice of such Recapture to Tenant within fifteen (15) Business
Days after receipt of Tenant's written request for Landlord's consent to such
proposed assignment or subletting. Tenant shall have no right to retract its
request for Landlord's consent to assign or sublease once such request has been
made. Such Recapture shall terminate this Lease as to the applicable space
effective on the prospective effective date of assignment or subletting, which
shall be the last day of a calendar month and shall not be earlier than
forty-five (45) Business Days after receipt of Tenant's request hereunder. If
less than the entire Premises are recaptured, Landlord and Tenant agree that
this Lease shall remain in full force and effect with respect to that remaining
area not recaptured by Landlord. Tenant agrees to surrender that portion of the
Premises recaptured by Landlord in accordance with the terms and conditions of
this Lease. Landlord's election not to recapture the Premises or applicable
portion thereof shall not be deemed to negate Landlord's other rights set forth
in this paragraph 4.16 with respect to any proposed assignment, sublet or other
transfer as described above.
4.17 ASSIGNMENT BY LANDLORD. Landlord shall have the right to transfer and
assign, in whole or in part, its rights and obligations under this Lease and in
any and all of the Land or Building. If Landlord sells or transfers any or all
of the Building, including the Premises, Landlord and Landlord's Agents shall,
upon consummation of such sale or transfer, be released automatically from any
liability relating to obligations or covenants under this Lease to be performed
or observed after the date of such transfer, and in such event, Tenant agrees to
look solely to Landlord's successor-in-interest with respect to such liability;
provided that, as to the Security Deposit and Prepaid Rent, Landlord shall not
be released from liability therefor unless Landlord has delivered (by direct
transfer or credit against the purchase price) the Security Deposit or Prepaid
Rent to its successor-in-interest.
4.18 ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS. Tenant shall, from time to
time, upon the written request of Landlord, execute, acknowledge and deliver to
Landlord or its designee a written statement stating:
(a) the date this Lease was executed and the date it expires; (b) the
date Tenant entered into occupancy of the Premises; (c) the amount of monthly
Base Rent and Additional Rent and the date to which such Base Rent and
Additional Rent have been paid; and (d) certifying that (1) this Lease is in
full force and effect and has not been assigned, modified, supplemented or
amended in any way (or specifying the date of the agreement so affecting this
Lease); (2) Landlord is not in breach of this Lease (or, if so, a description of
each such breach) and that no event, omission or condition has occurred which
would result, with the giving of notice or the passage of time, in a breach of
this Lease by Landlord; (3) this Lease represents the entire agreement between
the parties with respect to the Premises; (4) all required contributions by
Landlord to Tenant on account of Tenant Improvements have been received; (5) on
the date of execution, there exist no defenses or offsets which the Tenant has
against the enforcement of this Lease by the Landlord; (6) no Base Rent,
Additional Rent or other sums payable under this Lease have been paid in advance
except for Base Rent and Additional Rent for the then current month; (7) no
security has been deposited with Landlord (or, if so, the amount of such
security); (8) it is intended that any Tenant's statement may be relied upon by
a prospective purchaser or mortgagee of Landlord's interest or an assignee of
any such mortgagee; and (9) such other information as may be reasonably
requested by Landlord. If Tenant fails to respond within ten (10) Business Days
of its receipt of a written request by Landlord as provided in
-17-
19
this paragraph, such shall be a breach of this Lease and Tenant shall be deemed
to have admitted the accuracy of any information supplied by Landlord to a
prospective purchaser, mortgagee or assignee. In addition, Tenant shall, from
time to time, upon the written request of Landlord, deliver to or cause to be
delivered to Landlord or its designee then current financial statements
(including a statement of operations and balance sheet) certified as accurate by
a certified public accountant and prepared in conformance with generally
accepted accounting principles for (i) Tenant, (ii) any entity which owns a
controlling interest in Tenant, (iii) any entity the controlling interest of
which is owned by Tenant, (iv) any successor entity to Tenant by merger or
operation of law, and (v) any guarantor of this Lease.
4.19 MODIFICATION FOR LENDER. If, in connection with obtaining construction,
interim or permanent financing for the Building or Land, Landlord's lender, if
any, shall request reasonable modifications to this Lease as a condition to such
financing, Tenant will not unreasonably withhold or delay its consent to such
modifications; provided that, such modifications do not increase the obligations
of Tenant under this Lease or materially adversely affect Tenant's rights under
this Lease.
4.20 HAZARDOUS SUBSTANCES.
4.20.1 Tenant agrees that neither Tenant, any of Tenant's Agents nor
any other person will store, place, generate, manufacture, refine, handle, or
locate on, in, under or around the Land or Building any Hazardous Substance,
except for storage, handling and use of reasonable quantities and types of
cleaning fluids and office supplies in the Premises in the ordinary course and
the prudent conduct of Tenant's business in the Premises, provided that, (a) the
storage, handling and use of such permitted Hazardous Substances must at all
times conform to all Governmental Requirements and to applicable fire, safety
and insurance requirements; (b) the types and quantities of permitted Hazardous
Substances which are stored in the Premises must be reasonable and appropriate
to the nature and size of Tenant's operation in the Premises and reasonable and
appropriate for a first-class building of the same or similar use and in the
same market area as the Building; (c) no Hazardous Substance shall be spilled or
disposed of on, in, under or around the Land or Building or otherwise discharged
from the Premises or any area adjacent to the Land or Building; and (d) in no
event will Tenant be permitted to store, handle or use on, in, under or around
the Premises any Hazardous Substance which will increase the rate of property
coverage insurance on the Land or Building, unless: (1) such Hazardous Substance
and the expected rate increase have been specifically disclosed in writing to
Landlord; (2) Tenant has agreed in writing to pay any rate increase related to
each such Hazardous Substance; and (3) Landlord has approved in writing each
such Hazardous Substance, which approval shall be subject to Landlord's
discretion.
4.20.2 Tenant shall indemnify, defend and hold harmless Landlord and
Landlord's Agents from and against any and all Claims arising out of any breach
of any provision of this paragraph, which expenses shall also include laboratory
testing fees, personal injury claims, clean-up costs and environmental
consultants' fees. Tenant agrees that Landlord may be irreparably harmed by
Tenant's breach of this paragraph and that a specific performance action may
appropriately be brought by Landlord; provided that, Landlord's election to
bring or not bring any such specific performance action shall in no way limit,
waive, impair or hinder Landlord's other remedies against Tenant.
4.20.3 As of the execution date of this Lease, Tenant represents and
warrants to Landlord that, except as otherwise disclosed by Tenant to Landlord,
Tenant has no intent to bring any Hazardous Substances on, in or under the
Premises except for the type and quantities authorized in the first paragraph of
the paragraph captioned "Hazardous Substances."
4.21 ACCESS LAWS.
4.21.1 Tenant agrees to notify Landlord immediately if Tenant receives
notification or otherwise becomes aware of: (a) any condition or situation on,
in, under or around the Land or Building which may constitute a violation of any
Access Laws or (b) any threatened or actual lien, action or notice that the Land
or Building is not in compliance with any Access Laws. If Tenant is responsible
for such condition, situation, lien, action or notice under this paragraph,
Tenant's notice to Landlord shall include a statement as to the actions Tenant
proposes to take in response to such condition, situation, lien, action or
notice.
4.21.2 Tenant shall not alter or permit any assignee or subtenant or
any other person to alter the Premises in any manner which would violate any
Access Laws or increase Landlord's responsibilities for compliance with Access
Laws, without the prior approval of the Landlord. In connection with any such
approval, Landlord may
-18-
20
require a certificate of compliance with Access Laws from an architect, engineer
or other person acceptable to Landlord. Tenant agrees to pay the reasonable fees
incurred by such architect, engineer or other third party in connection with the
issuance of such certificate of compliance. Landlord's consent to any proposed
Tenant Alteration shall (a) not relieve Tenant of its obligations or indemnities
contained in this paragraph or this Lease or (b) be construed as a warranty that
such proposed alternation complies with any Access Law.
4.21.3 Tenant shall be solely responsible for all costs and expenses
relating to or incurred in connection with: (a) failure of the Premises to
comply with the Access Laws; and (b) bringing the Building and the common areas
of the Building into compliance with Access Laws, if and to the extent such
noncompliance arises out of or relates to: (1) Tenant's use of the Premises,
including the hiring of employees; (2) any Tenant Alterations to the Premises;
or (3) any Tenant Improvements constructed in the Premises at the request of
Tenant, regardless of whether such improvements are constructed prior to or
after the Commencement Date.
4.21.4 Landlord shall be responsible for all costs and expenses
relating to or incurred in connection with bringing the common areas of the
Building into compliance with Access Laws, unless such costs and expenses are
Tenant's responsibility as provided in the preceding subparagraph. Any cost or
expense paid or incurred by Landlord to bring the Premises or common areas of
the Building into compliance with Access Laws which is not Tenant's
responsibility under the preceding subparagraphs shall be amortized over the
useful economic life of the improvements (not to exceed ten (10) years) using an
amortization rate of twelve percent (12%) per annum, and shall be an Operating
Cost for purposes of this Lease.
4.21.5 Tenant agrees to indemnify, defend and hold harmless Landlord
and Landlord's Agents from and against any and all Claims arising out of or
relating to any failure of Tenant or Tenant's Agents to comply with Tenant's
obligations under this paragraph.
4.21.6 The provisions of this paragraph shall supersede any other
provisions in this Lease regarding Access Laws, to the extent inconsistent with
the provisions of any other paragraphs.
4.22 QUIET ENJOYMENT. Landlord covenants that Tenant, upon paying Base Rent,
Additional Rent and all other sums payable under this Lease and performing all
covenants and conditions required of Tenant under this Lease and otherwise
subject to all of the terms and conditions of this Lease, shall and may
peacefully have, hold and enjoy the Premises without hindrance or molestation by
Landlord. The foregoing covenant is in lieu of any other covenant express or
implied.
4.23 SIGNS. Tenant shall be permitted to have its entity name listed on the main
directory sign for the Building situated in the main lobby of the Building.
Tenant shall be permitted to install next to Tenant's entryway into the
Premises, as part of the preparation of the Premises for Tenant's occupancy
(with the cost thereof included in the Tenant Improvement Costs), one (1)
entryway sign bearing Tenant's name. Said sign shall be of a size, design and
coloration, and in a location consistent with Landlord's standard tenant
entryway signage for the Building.
4.24 SUBORDINATION. Tenant subordinates this Lease and all rights of Tenant
under this Lease to any mortgage, deed of trust, ground lease or vendor's lien,
or similar instrument which may from time to time be placed upon the Premises
(and all renewals, modifications, replacements and extensions of such
encumbrances), and each such mortgage, deed of trust, ground lease or lien or
other instrument shall be superior to and prior to this Lease; provided that,
Landlord provides Tenant with a commercially reasonable nondisturbance agreement
on the standard form of the applicable lender or ground lessor. Notwithstanding
the foregoing, the holder or beneficiary of such mortgage, deed of trust, ground
lease, vendor's lien or similar instrument shall have the right to subordinate
or cause to be subordinated any such mortgage, deed of trust, ground lease,
vendor's lien or similar instrument to this Lease. Tenant further covenants and
agrees that if the lender or ground lessor acquires the Premises as a purchaser
at any foreclosure sale or otherwise, Tenant shall recognize and attorn to such
party as landlord under this Lease, and shall make all payments required
hereunder to such new landlord without deduction or set-off and, upon the
request of such purchaser or other successor, execute, deliver and acknowledge
documents confirming such attornment. Tenant waives the provisions of any law or
regulation, now or hereafter in effect, which may give or purport to give Tenant
any right to terminate or otherwise adversely affect this Lease or the
obligations of Tenant hereunder in the event that any such foreclosure or
termination or other proceeding is prosecuted or completed.
-19-
21
4.25 WORKERS COMPENSATION IMMUNITY. If and to the extent that Tenant is
obligated to indemnify, defend or hold harmless Landlord or Landlord's Agents
from any Claims arising from its use of the Premises or any act or failure to
act by Tenant or Tenant's Agents or otherwise, Tenant expressly waives, to and
in favor of Landlord and Landlord's Agents, its statutory workers compensation
act employers immunity relative to any injury to an employee or employees of
Tenant,
4.26 BROKERS. Each party to this Lease shall indemnify, defend and hold harmless
the other party from and against any and all Claims asserted against such other
party by any real estate broker, finder or intermediary relating to any act of
the indemnifying party in connection with this Lease.
4.27 EXCULPATION AND LIMITATION OF LIABILITY. Landlord has executed this Lease
by its trustee signing solely in a representative capacity. Notwithstanding
anything contained in this Lease to the contrary, Tenant confirms that the
covenants of Landlord are made and intended, not as personal covenants of the
trustee, or for the purpose of binding the trustee personally, but solely in the
exercise of the representative powers conferred upon the trustee by its
principal. Liability with respect to the entry and performance of this Lease by
or on behalf of Landlord, however it may arise, shall be asserted and enforced
only against the Landlord's estate and interest in the Building and Landlord
shall have no personal liability in the event of any claim against Landlord
arising out of or in connection with this Lease, the relationship of Landlord
and Tenant or Tenant's use of the Premises. Further, in no event whatsoever
shall any Landlord's Agent have any liability or responsibility whatsoever
arising out of or in connection with this Lease, the relationship of Landlord
and Tenant or Tenant's use of the Premises. Any and all personal liability, if
any, beyond that which may be asserted under this paragraph, is expressly waived
and released by Tenant and by all persons claiming by, through or under Tenant.
In no event shall Landlord or Landlord's Agents ever be liable for indirect or
consequential damages.
4.28 MECHANIC'S LIENS AND TENANT'S PERSONAL PROPERTY TAXES.
4.28.1 Tenant shall have no authority, express or implied, to create or
place any lien or encumbrance of any kind or nature whatsoever upon, or in any
manner to bind, the interest of Landlord or Tenant in the Premises or to charge
the rentals payable under this Lease for any Claims in favor of any person
dealing with Tenant, including those who may furnish materials or perform labor
for any construction or repairs. Tenant shall pay or cause to be paid all sums
legally due and payable by it on account of any labor performed or materials
furnished in connection with any work performed on the Premises on which any
lien is or can be validly and legally asserted against its leasehold interest in
the Premises and Tenant shall indemnify, defend and hold harmless Landlord from
any and all Claims arising out of any such asserted Claims. Tenant agrees to
give Landlord immediate written notice of any such Claim. If Tenant fails to
discharge any lien, Landlord may do so at Tenant's expense and Tenant shall
reimburse Landlord for any expense or cost incurred by Landlord in so doing
within fifteen (15) days after rendition of xxxx therefor.
4.28.2 Tenant shall be liable for all taxes levied or assessed against
personal property, furniture or fixtures placed by Tenant in the Premises. If
any such taxes for which Tenant is liable are levied or assessed against
Landlord or Landlord's property and Landlord elects to pay them or if the
assessed value of Landlord's property is increased by inclusion of such personal
property, furniture or fixtures and Landlord elects to pay the taxes based on
such increase, Tenant shall reimburse Landlord for the sums so paid by Landlord,
upon demand by Landlord.
4.29 LANDLORD'S SECURITY INTEREST. In addition to any statutory lien for rent in
Landlord's favor, Landlord shall have and Tenant hereby grants to Landlord a
continuing security interest for all Base Rent, Additional Rent and other sums
becoming due under this Lease from Tenant, upon all goods, wares, equipment,
fixtures, furniture, inventory, accounts, intangibles, chattel paper and other
personal property of Tenant situated in or arising out of the Premises, and such
property shall not be removed therefrom without the consent of Landlord until
all arrearages in Base Rent, Additional Rent and other sums due under this Lease
shall first have been paid and discharged. On the occurrence of an Event of
Default, Landlord shall have, in addition to any other remedies provided herein
or by law, all rights and remedies under the Uniform Commercial Code, including,
the right to sell the property described in this paragraph at public or private
sale upon five (5) Business Days notice to Tenant. Tenant hereby agrees to
execute such financing statements and other instruments necessary or desirable
in Landlord's discretion to perfect the security interest hereby created. Any
statutory lien for rent is not waived, and the express contractual lien GRANTED
IN THIS PARAGRAPH CONSTITUTES A security agreement and is in addition and
supplementary to such statutory lien.
-20-
22
SECTION 5: DEFAULT AND REMEDIES
5.1 EVENTS OF DEFAULT.
5.1.1 The occurrence of any one or more of the following events shall
constitute a material default and breach of this Lease by Tenant ('EVENT OF
DEFAULT"):
(a) vacation or abandonment of all or any portion of the Premises;
(b) failure by Tenant to make any payment of Base Rent, Additional Rent
or any other sum payable by Tenant under this Lease within three (3) Business
Days after its due date;
(c) failure by Tenant to observe or perform any covenant or condition
of this Lease, other than the making of payments, where such failure shall
continue for a period of ten (10) Business Days after written notice from
Landlord;
(d) (1) the making by Tenant of any general assignment or general
arrangement for the benefit of creditors; (2) the filing by or against Tenant of
a petition in bankruptcy, including reorganization or arrangement, unless, in
the case of a petition filed against Tenant, unless the same is dismissed within
twenty (20) Business Days; (3) the appointment of a trustee or receiver to take
possession of substantially all of Tenant's assets located in the Premises or of
Tenant's interest in this Lease; (4) any execution, levy, attachment or other
process of law against any property of Tenant or Tenant's interest in this
Lease, unless the same is dismissed within twenty (20) Business Days; (5)
adjudication that Tenant is bankrupt; (6) the making by Tenant of a transfer in
fraud of creditors; or (7) the failure of Tenant to generally pay its debts as
they become due; or
(e) any information furnished by or on behalf of Tenant to Landlord in
connection with the entry of this Lease is determined to have been materially
false, misleading or incomplete when made.
5.1.2 Tenant shall notify Landlord promptly of any Event of Default or
any facts, conditions or events which, with the giving of notice or passage of
time or both, would constitute an Event of Default.
5.1.3 If a petition in bankruptcy is filed by or against Tenant, and if
this Lease is treated as an "unexpired lease" under applicable bankruptcy law in
such proceeding, then Tenant agrees that Tenant shall not attempt nor cause any
trustee to attempt to extend the applicable time period within which this Lease
must be assumed or rejected.
5.2 REMEDIES. If any Event of Default occurs, Landlord may at any time after
such occurrence, with or without notice or demand except as stated in this
paragraph, and without limiting Landlord in the exercise of any right or remedy
at law which Landlord may have by reason of such Event of Default, exercise the
rights and remedies, either singularly or in combination, as are specified or
described in the subparagraphs of this paragraph.
5.2.1 Landlord may terminate this Lease and all rights of Tenant under
this Lease either immediately or at some later date by giving Tenant written
notice that this Lease is terminated. If Landlord so terminates this Lease, then
Landlord may recover from Tenant the sum of:
(a) the unpaid Base Rent, Additional Rent and all other sums payable
under this Lease which have been earned at the time of termination;
(b) interest at the Default Rate on the unpaid Base Rent, Additional
Rent and all other sums payable under this Lease which HAVE BEEN EARNED AT the
time of termination; plus
(c) the amount by which the unpaid Base Rent, Additional Rent and all
other sums payable under this Lease which WOULD HAVE BEEN EARNED AFTER
termination until the time of award exceeds the amount of such rental loss, if
any, as Tenant affirmatively proves could have been reasonably avoided and
interest on such excess at the Default Rate; plus
(d) the amount by which the aggregate of the unpaid Base Rent,
Additional Rent and all other sums payable under this Lease for the balance of
the Lease Term after the time of award exceeds the amount of such rental loss,
if any, as Tenant affirmatively proves could be reasonably avoided, with such
difference being discounted to present value at the Prime Rate at the time of
award; plus
(e) any other amount necessary to compensate Landlord for the detriment
proximately caused by
-21-
23
Tenant's failure to perform Tenant's obligations under this Lease or which, in
the ordinary course of things, would be likely to result from such failure,
including, leasing commissions, tenant improvement costs, renovation costs and
advertising costs; plus
(f) all such other amounts in addition to or in lieu of the foregoing
as may be permitted from time to time by applicable law.
5.2.2 Landlord shall also have the right, with or without terminating
this Lease, to re-enter the Premises and remove all persons and property from
the Premises. Landlord may cause property so removed from the Premises to be
stored in a public warehouse or elsewhere at the expense and for the account of
Tenant.
5.2.3 Landlord shall also have the right, without terminating this
Lease, to accelerate and recover from Tenant the sum of all unpaid Base Rent,
Additional Rent and all other sums payable under the then remaining term of the
Lease, discounting such amount to present value at the Prime Rate.
5.2.4 If Tenant vacates, abandons or surrenders the Premises without
Landlord's consent, or if Landlord re-enters the Premises as provided in
subparagraph 5.2.2 or takes possession of the Premises pursuant to legal
proceedings or through any notice procedure provided by law, then, if Landlord
does not elect to terminate this Lease, Landlord may, from time to time, without
terminating this Lease, either (a) recover all Base Rent, Additional Rent and
all other sums payable under this Lease as they become due or (b) relet the
Premises or any part of the Premises on behalf of Tenant for such term or terms,
at such rent or rents and pursuant to such other provisions as Landlord, in its
sole discretion, may deem advisable, all with the right, at Tenant's cost, to
make alterations and repairs to the Premises and recover any deficiency from
Tenant as set forth in subparagraph 5.2.5.
5.2.5 None of the following remedial actions, singly or in combination,
shall be construed as an election by Landlord to terminate this Lease unless
Landlord has in fact given Tenant written notice that this Lease is terminated:
an act by Landlord to maintain or preserve the Premises; any efforts by Landlord
to relet the Premises; any repairs or alterations made by Landlord to the
Premises; re-entry, repossession or reletting of the Premises by Landlord
pursuant to this paragraph; or the appointment of a receiver, upon the
initiative of Landlord, to protect Landlord's interest under this Lease. If
Landlord takes any of the foregoing remedial action without terminating this
Lease, Landlord may nevertheless at any time after taking any such remedial
action terminate this Lease by written notice to Tenant.
5.2.6 If Landlord relets the Premises, Landlord shall apply the revenue
from such reletting as follows: first, to the payment of any indebtedness of
Tenant to Landlord other than Base Rent, Additional Rent or any other sums
payable by Tenant under this Lease; second, to the payment of any cost of
reletting (including finders' fees and leasing commissions); third, to the
payment of the cost of any alterations, improvements, maintenance and repairs to
the Premises; and fourth, to the payment of Base Rent, Additional Rent and other
sums due and payable and unpaid under this Lease. Landlord shall hold and apply
the residue, if any, to payment of future Base Rent, Additional Rent and other
sums payable under this Lease as the same become due, and shall deliver the
eventual balance, if any, to Tenant. Should revenue from letting during any
month, after application pursuant to the foregoing provisions, be less than the
sum of the Base Rent, Additional Rent and other sums payable under this Lease
and Landlord's expenditures for the Premises during such month, Tenant shall be
obligated to pay such deficiency to Landlord as and when such deficiency arises.
5.2.7 Pursuit of any of the foregoing remedies shall not preclude
pursuit of any of the other remedies provided in this Lease or by law (all such
remedies being cumulative), nor shall pursuit of any remedy provided in this
Lease constitute a forfeiture or waiver of any Base Rent, Additional Rent or
other sum payable under this Lease or of any damages accruing to Landlord by
reason of the violation of any of the covenants or conditions contained in this
Lease.
5.3 RIGHT TO PERFORM. If Tenant shall fail to pay any sum of money, other than
Base Rent or Additional Rent, required to be paid by it under this Lease or
shall fail to perform any other act on its part to be performed under this
Lease, and such failure shall continue for ten (10) Business Days after notice
of such failure by Landlord, or such shorter time if reasonable under the
circumstances, Landlord may, but shall not be obligated to, and without waiving
or releasing Tenant from any obligations of Tenant, make such payment or perform
such other act on Tenant's part to be made or performed as provided in this
Lease. Landlord shall have (in addition to any other right
-22-
24
or remedy of Landlord) the same rights and remedies in the event of the
nonpayment of sums due under this paragraph as in the case of default by Tenant
in the payment of Base Rent.
5.4 LANDLORD'S DEFAULT. In the event that Landlord defaults under or breaches
this Lease, Tenant shall notify Landlord of such default or breach in writing,
and Tenant shall not exercise any right or remedy which Tenant may have under
this Lease or at law if Landlord commences to cure such default or breach within
twenty (20) Business Days after receipt of Tenant's notice and thereafter
diligently prosecutes the cure to completion.
SECTION 6: MISCELLANEOUS PROVISIONS
6.1 NOTICES. Any notice, request or written communication required or permitted
to be delivered under this Lease shall be: (a) in writing; (b) transmitted by
personal delivery, express or courier service, United States Postal Service in
the manner described below, or electronic means of transmitting written
material; and (c) deemed to be delivered on the earlier of the date received or
four (4) Business Days after having been deposited in the United States Postal
Service, postage prepaid. Such writings shall be addressed to Landlord or
Tenant, as the case may be, at the respective designated addresses set forth
opposite their signatures, or at such other address(es) as they may, after the
execution date of this Lease, specify by written notice delivered in accordance
with this paragraph, with copies to the persons at the addresses, if any,
designated opposite each party's signature. Those notices which contain a notice
of breach or default or a demand for performance may be sent by any of the
methods described in clause (b) above, but if transmitted by personal delivery
or electronic means, shall also be sent concurrently by certified or registered
mail, return receipt requested.
6.2 ATTORNEY'S FEES AND EXPENSES. In the event either party requires the
services of an attorney in connection with enforcing the terms of this Lease, or
in the event suit is brought for the recovery of Base Rent, Additional Rent or
any other sums payable under this Lease or for the breach of any covenant or
condition of this Lease, or for the restitution of the Premises to Landlord or
the eviction of Tenant during the Lease Term or after the expiration or earlier
termination of this Lease, the non-breaching party shall be entitled to a
reasonable sum for attorney's and paralegal's fees, expenses and court costs,
including those relating to any appeal.
6.3 NO ACCORD AND SATISFACTION. No payment by Tenant or receipt by Landlord of
an amount less than the Base Rent or Additional Rent or any other sum due and
payable under this Lease shall be deemed to be other than a payment on account
of the Base Rent, Additional Rent or other such sum, nor shall any endorsement
or statement on any check or any letter accompanying any check or payment be
deemed an accord and satisfaction, nor preclude Landlord's right to recover the
balance of any amount payable or Landlord's right to pursue any other remedy
provided in this Lease or at law.
6.4 SUCCESSORS; JOINT AND SEVERAL LIABILITY. Except as provided in the paragraph
captioned "Exculpation and Limitation of Liability" and subject to the paragraph
captioned "Assignment by Landlord", all of the covenants and conditions
contained in this Lease shall apply to and be binding upon Landlord and Tenant
and their respective heirs, executors, administrators, successors and assigns.
In the event that more than one person, partnership, company, corporation or
other entity is included in the term "Tenant," then each such person,
partnership, company, corporation or other entity shall be jointly and severally
liable for all obligations of Tenant under this Lease.
6.5 CHOICE OF LAW. This Lease shall be construed and governed by the laws of the
state in which the Land is located. Tenant consents to Landlord's choice of
venue for any legal proceeding brought by Landlord or Tenant to enforce the
terms of this Lease.
6.6 NO WAIVER OF REMEDIES. The waiver by Landlord of any covenant or condition
contained in this Lease shall not be deemed to be a waiver of any subsequent
breach of such covenant or condition nor shall any custom or practice which may
develop between the parties in the administration of this Lease be construed to
waive or lessen the rights of Landlord to insist on the strict performance by
Tenant of all of the covenants and conditions of this Lease. No act or thing
done by Landlord or Landlord's Agents during the Lease Term shall be deemed an
acceptance or a surrender of the Premises, and no agreement to accept a
surrender of the Premises shall be valid unless made in writing and signed by
Landlord. The mention in this Lease of any particular remedy shall not preclude
Landlord from any other remedy it might have, either under this Lease or at law,
nor shall the waiver of or redress for any violation of any covenant or
condition in this Lease or in any of the rules or regulations attached to
-23-
25
this Lease or later adopted by Landlord, prevent a subsequent act, which would
have originally constituted a violation, from having all the force and effect
of an original violation. The receipt by Landlord of Base Rent, Additional Rent
or any other sum payable under this Lease with knowledge of a breach of any
covenant or condition in this Lease shall not be deemed a waiver of such
breach. The failure of Landlord to enforce any of the rules and regulations
attached to this Lease or later adopted, against Tenant or any other tenant in
the Building, shall not be deemed a waiver. Any waiver by Landlord must be in
writing and signed by Landlord to be effective.
6.7 OFFER TO LEASE. The submission of this Lease to Tenant or its broker or
other agent does not constitute an offer to Tenant to lease the Premises. This
Lease shall have no force or effect until: (a) it is executed and delivered by
Tenant to Landlord; and (b) it is executed and delivered by Landlord to Tenant.
6.8 FORCE MAJEURE. In the event that Landlord shall be delayed, hindered in
or prevented from the performance of any act or obligation required under this
Lease by reason of acts of God, strikes, lockouts, labor troubles or disputes,
inability to procure or shortage of materials or labor, failure of power or
utilities, delay in transportation, fire, vandalism, accident, flood, severe
weather, other casualty, Governmental Requirements (including mandated changes
in the Plans and Specifications or the Tenant Improvements resulting from
changes in pertinent Governmental Requirements or interpretations thereof),
riot, insurrection, civil commotion, sabotage, explosion, war, natural or local
emergency, acts or omissions of others, including Tenant, or other reasons of a
similar or dissimilar nature not solely the fault of, or under the exclusive
control of, Landlord, then performance of such act or obligation shall be
excused for the period of the delay and the period for the performance of any
such act or obligation shall be extended for the period equivalent to the
period of such delay.
6.9 LANDLORD'S CONSENT. Unless otherwise provided in this Lease, whenever
Landlord's consent, approval or other action is required under the terms of
this Lease, such consent, approval or action shall be subject to Landlord's
judgment or discretion exercised in good faith and shall be delivered in
writing.
6.10 SEVERABILITY; CAPTIONS. If any clause of provision of this Lease is
determined to be illegal, invalid, or unenforceable under present or future
laws, the remainder of this Lease shall not be affected by such determination,
and in lieu of each clause or provision that is determined to be illegal,
invalid or unenforceable, there be added as a part of this Lease a clause or
provision as similar in terms to such illegal, invalid or unenforceable clause
or provision as may be possible and be legal, valid and enforceable. Headings
or captions in this Lease are added as a matter of convenience only and in no
way define, limit or otherwise affect the construction or interpretation of
this Lease.
6.11 INTERPRETATION. Whenever a provision of this Lease uses the term (a)
"include" or "including", that term shall not be limiting but shall be
construed as illustrative, (b) "covenant", that term shall include any
covenant, agreement, term or provision, (c) "at law", that term shall mean at
law or in equity, or both, and (d) "day", that uncapitalized word shall mean a
calendar day. This Lease shall be given a fair and reasonable interpretation of
the words contained in it without any weight being given to whether a provision
was drafted by one party or its counsel.
6.12 INCORPORATION OF PRIOR AGREEMENT; AMENDMENTS. This Lease contains all of
the agreements of the parties to this Lease with respect to any matter covered
or mentioned in this Lease, and no prior agreement or understanding pertaining
to any such matter shall be effective for any purpose. No provision of this
Lease may be amended or added to except by an agreement in writing signed by
the parties to this Lease or their respective successors in interest.
6.13 AUTHORITY. If Tenant is a partnership, company, corporation or other
entity, each individual executing this Lease on behalf of Tenant represents and
warrants to Landlord that he or she is duly authorized to so execute and
deliver this Lease and that all partnership, company, corporation or other
entity actions and consents required for execution of this Lease have been
given, granted or obtained. If Tenant is a partnership, company, corporation or
other business organization, it shall, within ten (10) Business Days after
demand by Landlord, deliver to Landlord satisfactory evidence of the due
authorization of this Lease and the authority of the person executing this
Lease on its behalf.
6.14 TIME OF ESSENCE. Time is of the essence with respect to the performance
of every covenant and condition of this Lease.
-24-
26
6.15 SURVIVAL OF OBLIGATIONS. Notwithstanding anything contained in this Lease
to the contrary or the expiration or earlier termination of this Lease, any and
all obligations of either party accruing prior to the expiration or termination
of this Lease shall survive the expiration or earlier termination of this Lease,
and either party shall promptly perform all such obligations whether or not this
Lease has expired or terminated. Such obligations shall include any and all
indemnity obligations set forth in this Lease.
6.16 CONSENT TO SERVICE. Tenant irrevocably consents to the service of process
of any action or proceeding at the address of the Premises. Nothing in this
paragraph shall affect the right to serve process in any other manner permitted
by law.
6.17 LANDLORD'S AUTHORIZED AGENTS. Notwithstanding anything contained in the
Lease to the contrary, including without limitation, the definition of
Landlord's Agents, only officers of Xxxxx Bank N.A., are authorized to amend,
renew or terminate this Lease, or to compromise any of Landlord's claims under
this Lease or to bind Landlord in any manner. Without limiting the effect of the
previous sentence, no property manager or broker shall be considered an
authorized agent of Landlord to amend, renew or terminate this Lease or to
compromise any of Landlord's claims under this Lease or to bind Landlord in any
manner.
6.18 WAIVER OF JURY TRIAL. Landlord and Tenant agree to waive trial by jury in
any action, proceeding or counterclaim brought by either against the other on
any matter arising out of or relating in any way to this Lease.
6.19 SUBSTITUTE SPACE. Notwithstanding anything herein to the contrary, Landlord
shall have the right and power to relocate Tenant within the Building to space
(the "Relocation Space") which contains at least as many rentable square feet as
the space from which Tenant is being moved and which is reasonably suited to
Tenant's use. Any relocation shall be made at Landlord's expense, including
remodeling or refurbishing the Relocation Space such that its condition is
substantially equivalent to that of the Premises immediately prior to the move.
Landlord shall not be liable for any claims, damages or liabilities in
connection with or occasioned by such relocation. Landlord's right shall be
exercised by delivery to Tenant of a "Relocation Notice" specifying the location
of the Relocation Space and the date it will be available for occupancy (the
"Relocation Date"), which date shall be not fewer than sixty (60) days from the
date of the Relocation Notice. Landlord shall, at Landlord's expense, move
Tenant's personal property and trade fixtures into the Relocation Space as of
the Relocation Date. The move shall be accomplished as expeditiously as possible
without unreasonable interference with Tenant's business. There shall be no
abatement of rent during the period of the move. Upon Tenants taking possession
of the Relocation Space the term "Premises" as used herein shall be deemed to
refer to the Relocation Space, a plan of which shall be used to replace Exhibit
A hereof.
6.20 YEAR 2000 COMPLIANCE.
6.20.1 CORRECTIONS AND CONTINGENCY PLAN. With regard to the "Landlord
Systems and Equipment" (defined below), Landlord will make good faith efforts to
locate and correct any "Year 2000 Problems' (defined below) where it is
reasonably feasible to do so. With regard to "Tenant Systems and Equipment'
(defined below), Tenant will make good faith efforts to locate and correct any
"Year 2000 Problems where it is reasonably feasible to do so.
6.20.2 DAMAGES AND RENT ABATEMENT. As long as Landlord has complied in
good faith with the obligations stated in subsection 6.20. 1, Landlord shall
have no liability to Tenant for any damage to Tenant's business or property
occurring in connection with the millennium change. If the millennium change
causes a failure in Landlord's Equipment or Systems, Landlord shall use
commercially reasonable efforts to correct the failure in Landlord's Equipment
or Systems as promptly as reasonably possible and the Base Rent due hereunder
shall be abated during the period that the Premises are untenantable due to that
failure. If the millennium change causes a failure in Tenant's Equipment or
Systems, which is not the direct result of a failure in Landlord's Equipment or
Systems, there shall be no abatement.
6.20.3 DEFINITIONS. "Landlord's Systems and Equipment" shall mean the
building-wide systems and equipment which Landlord is responsible for
maintaining and repairing pursuant to Section 4. 1. "Tenant's Equipment and
Systems' shall mean the systems and equipment which Tenant is responsible for
maintaining and repairing pursuant to Section 4.3, including, without
limitation, Tenant's telecommunications equipment (phones, faxes, etc.). "Year
2000 Problem* means a failure of equipment or systems to operate properly due to
computer programming errors associated with the change in the millennium, often
associated with programming which provides only a two (2) digit date field.
-25-
27
6.21 CONDITION TO LANDLORD'S EXECUTION OF LEASE. Tenant acknowledges that
Landlord is unwilling to execute the herein Lease unless another tenant,
Metropolitan Life Insurance Company ("Metropolitan"), agrees to terminate its
present lease of the Premises. Therefore, Landlord shall have the right,
exercisable upon written notice to Tenant, to render the herein Lease void and
without force or effect unless both of the following events occur on or before
February 7, 2000:
6.21.1 Tenant executes and delivers this Lease to Landlord; and
6.21.2 Metropolitan executes and delivers to Landlord a termination
agreement in form and substance satisfactory to Landlord terminating its lease
the Premises.
[Remainder of this page intentionally left blank; signature page follows]
-26-
28
IN WITNESS WHEREOF, this Lease has been executed the day and year first above
set forth.
Designated Address for Landlord: LANDLORD:
c/x Xxxxx Trust Group XXXXX & CO., a division of XXXXX
Attn: MEPT BANK N.A., as Trustee of
000 00xx Xxxxxx, X.X. the Multi-Employer Property Trust,
Xxxxxxxxxx, XX 00000 a trust organized under 12 C.F.R.
Facsimile: 000-000-0000 Section 9.18.
By: /s/ Xxxxxx Xxxxxx
-------------------------------
Name: Xxxxxx Xxxxxx
------------------------
Its: Managing Director
------------------------
with copy to Manager at:
00 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Designated Address for Tenant: TENANT:
0000 Xxxx Xxxxxxxxxxxx Xxxxxxx
Xxxxx, XX 00000 INTEGRATED INFORMATION SYSTEMS, INC.,
Attn: General Counsel an Delaware corporation
Facsimile: 000-000-0000
By: /s/ Xxxxxxx Xxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxx
--------------------------
Its: V.P. & Corp counsel
---------------------------
-27-
29
LANDLORD ACKNOWLEDGEMENT
DISTRICT OF COLUMBIA ss.
On this 8th day of February 2000, before me personally appeared Xxxxxx
Xxxxxx, to me known to be a Managing Director of Xxxxx & Co., a division of
Xxxxx Bank N.A., the Trustee of the Multi-Employer Property Trust, the national
banking association that executed the within and foregoing instrument, and
acknowledged said instrument to be the free and voluntary act and deed of said
national banking association as trustee, for the uses and purposes therein
mentioned, and on oath stated that she was authorized to execute said
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year first above written.
Name: /s/ Xxxxxx Xxxx Xxxxxx
----------------------------
NOTARY PUBLIC in and for the
District of Columbia, residing at
Xxxxx Bank N.A.
My appointment expires:
March 31, 2003
[NOTARY STAMP]
-28-
30
TENANT ACKNOWLEDGEMENT (CORPORATION)
Maricopa County )
)ss.
State of Arizona )
On this 4th day of February , 2000 before me, a Notary Public in and
for the Commonwealth of Massachusetts personally appeared Xxxxxxx Xxxxxxx, the
VP of Integrated Information Systems, Inc., the Delaware corporation that
executed the within and foregoing instrument, and acknowledged said instrument
to be the free and voluntary act and deed of said corporation for the uses and
purposes therein mentioned, and on oath stated that s/he/they was/were
authorized to execute said instrument.
WITNESS my hand and official seal hereto affixed the day and year first as above
written.
OFFICIAL SEAL
XXXXXX X. XXXXXXXX /s/ Xxxxxx X. Xxxxxxxx
Notary Public - State of Arizona ----------------------------------------
Maricopa County Name: Xxxxxx X. Xxxxxxxx
My Comm. Expires Dec. 25, 2003 NOTARY PUBLIC in and for the State of
Arizona residing at
[NOTARIAL SEAL] 0000 X. Xxxxxxxxxxxx Xxxx Xxxxx, XX 00000
My appointment expires: 12/25/2003
31
EXHIBIT A TO LEASE
DRAWING SHOWING LOCATION OF THE PREMISES
