Exhibit 10.14
COMMERCIAL SPACE LEASE AGREEMENT
THIS AGREEMENT (the "Lease"), made and entered into as of the 6th day of
August, 1999, by and between J & N Realty Company, Inc., a Tennessee corporation
(hereinafter called "Lessor"), and Elastic Networks, Inc. a Georgia corporation
(hereinafter called "Lessee").
1. Term and Premises.
(a) Subject to the terms and conditions set forth herein, Lessor hereby
leases and lets to Lessee, and Lessee leases and accepts from Lessor, for an
original term of Thirty Six (36) Months commencing on September 01, 1999, and
expiring on August 31, 2000 (the "Original Term") which shall initially
consist of approximately Seventy-Five Hundred (7,500)/rsf (and shall thereafter
on January 1, 2000 automatically increase in size to a total of Ten Thousand
(l0,OOO)/rsf for the remaining Term) in the office building situated at 0000
Xxxxxxxx Xxxxx Xxxxxxxxxx, Xxxxxxx 00000 (such building hereinafter referred to
as the "Building," and such space being assigned Suite No. 100 and hereinafter
referred to as the "Premises"). The entire Premises is marked in blue on the
plat attached hereto and made a part hereof as Exhibit "A, " with the initial
7,500/rsf being called the "Initial Premises" and the additional 2,500/rsf
(outlined in yellow) being called the "Expansion Space."
(b) Lessee accepts the Premises in its current "AS-IS" condition without
requiring any improvements or alterations by Lessor. Lessee represents that it
has been afforded the opportunity and has the expertise, or the resources
necessary to engage others with the expertise, to fully inspect and examine the
condition of the Building and the Premises, and Lessee has concluded that the
existing condition of the Premises and the Building is acceptable to Lessee and
suitable for Lessee's intended uses and purposes, except for any latent defects
contained in the Premises that would materially interfere with the use of the
Premises as general office space.
(c) As used throughout this Lease, the phrase "Term" shall mean the
Original Term, and any renewal term which is exercised by the Lessee pursuant to
the provisions hereof, and any other extensions or renewals of this Lease. As
used throughout this Lease, any reference to "termination" of the Lease shall
include termination by expiration of the Term, as well as any other termination
of the Lease. No termination of this Lease shall be deemed to release any party
hereunder from any obligations or liabilities owed to the other party hereunder
which accrued prior to the date of termination.
(d) As used throughout this Lease, the phrase "Unencumbered Space" means
that certain office space on the first floor of the Building which is not
currently subject to any lease and not part of the Expansion Space (and which
for identification purposes is more particularly marked on Exhibit "A" hereto in
pink).
2. Base Rent Amount.
(a) Tenant covenants and agrees, beginning on the Commencement Date
established in accordance with Section 1.1, to pay Landlord initial base rent
(hereinafter referred to as "Base Rent Amount") in accordance with the following
schedule:
Annual Monthly
Months Rate/SF Rent
------ ------ ----------
1-4 $18.00 $11,250.00
5-12 $18.00 $15,000.00
13-24 $18.36 $15,300.00
25-36 $18.73 $15,608.33
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The Base Rent Amount shall be due and payable in advance on the first (1st) day
of each and every calendar month during the term of this Lease, all without
deduction or setoff whatsoever.
(b) Simultaneously with the execution of this Lease by Lessee, Lessee
shall deposit with Lessor the sum of Thirteen Thousand Five Hundred Dollars
($13,500), as a security deposit (the "Security Deposit"). The Security Deposit
shall be security for the payment and performance by Lessee of all of Lessee's
obligations and agreements under this Lease. Lessor shall have the right, but
shall not be obligated, to apply all or any portion of the Security Deposit to
cure any Default under this Lease by Lessee, in which event, Lessee shall
promptly deposit with Lessor the amount necessary to restore the Security
Deposit to its original amount. The Security Deposit shall not be deemed
liquidated damages, and application of the Security Deposit to reduce Lessor's
damages shall not preclude Lessor from recovering from Lessee all additional
damages incurred by Lessor. To the extent the Security Deposit is not applied by
Lessor as aforesaid (or subject to application by Lessor as aforesaid) within
ninety days after the Lease, the balance of the Security Deposit shall be
returned to Lessee, without interest.
3. Payment Provision.
(a) All installments of Rent, and all other amounts of money payable by
Tenant to Landlord under this lease, if not received by Landlord within five (5)
days of the date due, shall: (a) be subject to a late fee equal to the greater
of (1) five percent (5%) of the amount past due, or (2) $50.00, which late fee
represents an agreed upon charge for the administrative expense suffered by
Landlord as a result of such payment and not payment for the use of money or a
penalty; and (b) the amount past due (excluding late fees), shall bear simple
interest from the date due until paid at twelve percent (12%) per annum (the
"Interest Rate"); and Tenant agrees to pay said late fee and interest
immediately and without demand. However, if at the time such interest is sought
to be imposed, the Interest Rate exceeds the maximum rate permitted under
federal law or under the laws of the State of Georgia, the Interest Rate shall
be the maximum rate of interest then permitted by applicable law. Should Tenant
make a partial payment of past due amounts, the amounts of such partial payment
shall be applied first to late fees, second to accrued but unpaid interest at
the Interest Rate, and third to past due amounts in the order of their due
dates. The provision for such late charges shall be in addition to all of
Landlord's other rights and remedies hereunder or at law and shall not be
construed as liquidated damages or as limiting Landlord's remedies in any
manner.
4. Services Provided BY Lessor.
(a) Lessor shall provide the following utilities and services to or for
the Premises:
(i) Hot and cold water and lavatory supplies at those points of
supply provided for the general use of all tenants in the Building;
(ii) Hot and cold water at those points of supply within the
Premises which exist on the date of this Lease;
(iii) Heat and air-conditioning in season, Monday through Friday
from 8:00 A.M. to 6:00 P.M., and on Saturday from 8:00 A.M. to 1:00 P.M.,
except for New Years Day, Memorial Day (on the date federally observed),
July Fourth, Labor Day, Thanksgiving Day, and Christmas Day. Lessor shall
provide heat and air conditioning to the Premises at additional times if
so requested by Lessee at least seventy-two (72) hours in advance. Lessor
shall be entitled to charge Lessee for said after-hours services the same
rate it charges other tenants, which is $50.00 per hour on the date of
execution of this Lease. Lessor reserves the right, in its sole
discretion, to increase the hourly charge for said after-hours service,
but in no event shall the rate per hour charged Lessee be more than the
rate per hour charged other tenants;
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(iv) Maintenance of the Common Areas (as defined herein) in good
condition and repair;
(v) Electricity for any fixtures of Lessor located in the Premises
or Common Areas on the date hereof (and any replacements thereof) and for
equipment and machinery of Lessee which comply with the provisions of this
Lease.
(vi) Replacement of lights for building standard lights.
(vii) Trash removal from the loading dock area of the Building.
(viii) Window washing and janitor services in a manner such services
are customarily furnished to comparable office buildings.
Lessee shall be responsible for obtaining all other utilities and services
required by Lessee, and shall pay directly all costs and charges therefor.
(b) Unless caused by Lessor's willful misconduct or gross negligence that
materially interferes with the use of the Premises as general office space,
Lessor's inability to furnish, to any extent, the foregoing services, or any
cessation thereof, resulting from any causes, shall not render Lessor liable for
damages to either person or property, nor be construed as an eviction of Lessee
nor work an abatement of any portion of the rent, nor relieve Lessee from
fulfillment of any covenant or agreement hereof. Lessor shall use reasonable
diligence to restore said services promptly.
(c) LESSEE ACKNOWLEDGES AND AGREES THAT LESSOR IS NOT AND SHALL NOT BE
REQUIRED TO FURNISH ANY SECURITY SERVICES OR SECURITY PERSONNEL ON OR WITH
RESPECT TO THE COMMON AREAS, THE BUILDING, OR THE LAND UPON WHICH IT IS LOCATED.
5. Common Areas.
(a) As used herein, "Common Areas" shall mean the lobbies, atriums,
hallways, seating areas, bathrooms, entrances, elevators, passageways,
corridors, elevator foyers, vending areas and other similar areas or facilities
that are provided for the common use or benefit of all tenants generally and/or
the general public (but shall not include any such areas for the exclusive use
of a particular tenant), the outside walls of the Building, the roof of the
Building, the stairs, fire towers, elevator shafts, flues, vents, stacks, pipe
shafts, common pipes, ducts, conduits, wires, and appurtenant equipment serving
the Building, all parking areas, enclosed or otherwise, and all streets,
sidewalks and landscaped areas abutting the Building. The Common Areas include
the Reserved Common Area (as described below).
(b) The Common Areas shall at all times be subject to the control and
management of Lessor or such other parties as Lessor may designate. Lessee shall
have no right or interest in the Common Areas. Lessor reserves the following
rights, exercisable with three (3) days prior notice to Lessee, without
liability for damage or injury to business and without effecting an eviction,
constructive or actual, or disturbances of Lessee's use or possession of the
Premises or giving rise to any claim for set-off, abatement of rent or otherwise
(provided that Lessor's exercise of such rights do not materially interfere with
the Lessee's use of the Premises as general office space):
(i) the right to redesignate, modify, alter, expand, reduce and
change the Common Areas;
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(ii) the right to construct buildings on the Common Areas for lease
to tenants or for such other uses as Lessor desires;
(iii) the right to temporarily close doors and entry ways in the
Common Areas and to temporarily interrupt or temporarily suspend Building
services and facilities, all without affecting Lessee's obligations
hereunder, so long as the Premises remain tenantable;
(iv) the right to change the Building's name or street address; and
(v) the right to grant to anyone the exclusive right to conduct any
business or render any service in the Building.
(c) As used throughout this Lease, the phrase "Reserved Common Area" means
that particular Common Area adjoining the Unencumbered Space (and which for
identification purposes is more particularly marked on Exhibit "A" hereto in
green). Notwithstanding section 5(b) hereof, or anything to the contrary
contained herein, the parties expressly agree that if Lessor leases all or part
of the Unencumbered Space to one or more third parties, Lessor shall be
entitled, in its sole discretion, to convert all or part of the Reserved Common
Area into private lease space, and lease it to any such third parties for their
sole use and benefit.
6. Deliveries of Lessee's Property: Maintenance; Surrender of Premises.
(a) Lessee shall obtain Lessor's approval prior to moving its property
into the Building. All moving of furniture, equipment and other material within
the Common Areas shall, at Lessor's option, be subject to the direct control and
supervision of Lessor who shall, however, not be responsible for any damage to
or charges for moving same.
(b) Lessee shall keep the Premises and the fixtures and equipment therein
in a clean, safe and sanitary condition, and shall not commit or allow any waste
to occur on the Premises. In the event Lessee acquires knowledge of any damage
to the Premises, the Common Areas, or the Building, Lessee shall give Lessor
prompt written notice thereof. Subject to the provisions of section 11, Lessor
shall repair or replace such damage within a reasonable time after receipt of
such notice. Any and all damage to the Premises, the Common Areas, or the
Building caused by any act or any negligence of Lessee, its agents, servants,
employees, contractors, guests, invitees, or licensees (including persons making
deliveries to the Building for Lessee), which is not covered by (or falls within
the deductible of) Lessor's Hazard Insurance Policy (as defined herein) shall be
repaired or replaced by Lessor at Lessee's reasonable expense. Payment of the
reasonable cost of such repairs or replacements by Lessee shall be due within
five (5) days after Lessee receives a xxxx for such repairs or replacements from
Lessor. This provision shall not be in limitation of any other rights or
remedies, which Lessor may have under such circumstances.
(c) Upon any termination of this Lease, Lessee shall surrender the
Premises back to Lessor broom-clean and in the same order and condition as
received on the commencement date of this Lease, except for (i) ordinary wear
and tear, or (ii) damage by fire or other casualty or event to the extent such
damage is covered by (and is not within the deductible of) Lessor's Hazard
Insurance Policy, or (iii) damage that was not caused by any act and not caused
by any negligence of Lessee, its agents, servants, employees, contractors,
guests, invitees, or licensees. Upon any termination of this Lease, Lessor shall
have the right immediately to re-enter and resume possession of the Premises.
7. Use of Premises by the Lessee. Continuously throughout the Term of the
Lease:
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(a) Permitted Use. Lessee shall use and occupy the Premises solely for
general office purposes. The Premises shall not be used for any other purpose
without the prior written consent of Lessor, which consent may be withheld in
Lessor's reasonable discretion.
(b) No Extra Hazardous Activities. Lessee will not occupy or use, or
permit any portion of the Premises to be occupied or used, in any manner or for
any purpose which is extra hazardous or which will in any way increase the rate
of fire or casualty insurance on the Building and/or it contents.
(c) No Hazardous Materials. Lessee shall not cause or permit any Hazardous
Material (as defined herein) to be brought upon, kept or used in or about the
Premises by Lessee, its agents, servants, employees, contractors, guests,
invitees, or licensees, except for ordinary office products and materials to the
extent used, stored, removed, and disposed of by Lessee in accordance with all
Applicable Laws relating to Hazardous Material. If Lessee breaches the
obligations stated in the preceding sentence, then Lessee shall indemnify,
defend and hold Lessor harmless from any and all claims, judgments, damages,
penalties, fines, costs, liabilities or losses which arise during or after the
Term as a result of such Hazardous Material. As used herein, the term "Hazardous
Material" means any hazardous or toxic substance, material or waste, including,
but not limited to, those substances, materials and wastes listed in the United
States Department of Transportation Hazardous Materials Table (49 CFR 172.101),
and any amendments thereto, or by the Environmental Protection Agency as
hazardous substances (40 CFR Part 302), and any amendments thereto, and any
substances, materials or wastes that are or become regulated under any other
local, state or federal law, rule or regulation relation to the environment or
pollution.
(d) Compliance with Laws. Lessee shall comply with all present and future
federal, state, and local laws, statutes, ordinances, orders, rules and
regulations relating to Lessee's use, operation, occupancy, or maintenance of
the Premises (all of the foregoing being collectively called herein "Applicable
Laws").
(e) Permitted Equipment and Machinery. Lessee shall not install or operate
equipment or machinery in the Premises except for equipment or machinery which:
(i) is of a type normally used in an office setting; (ii) will not necessitate
any structural changes to the Building; and (iii) does not require electricity
consumption that is unreasonably high (in Lessor's reasonable judgment) or that
exceeds the safe (or building code) load capacity of the electrical wiring,
fixtures or systems now or hereafter located in the Building.
(f) Lessor Rules and Regulations. Lessee and its agents, servants, and
employees shall abide by and observe all rules and regulations as may be
promulgated from time to time by Lessor for the operation and maintenance of the
Building, provided that such rules and regulations apply with substantial
uniformity to all tenants.
(g) Taxes on Lessee's Property. Lessee shall pay as and when due all taxes
assessed against or levied upon any trade fixtures, furnishings, equipment and
any other personal property of Lessee located at the Premises (herein, "Personal
Property Taxes"). When possible, the Lessee shall cause such trade fixtures,
furnishings, equipment and other personal property to be assessed and billed
separately from the real property of Lessor. If any of Lessee's said personal
property shall be assessed with Lessor's real property, Lessee shall pay all
such Personal property Taxes to the appropriate taxing authorities as and when
due. At Lessor's option, Lessor may require Lessee to pay such Personal Property
Taxes directly to Lessor as Additional Rent, in order to reimburse Lessor for
the payment of such taxes or to enable Lessor to pay such taxes to the
appropriate taxing authorities prior to the due date thereof.
8. Entry for Repairs and Inspection. Lessee shall permit Lessor and its
agents, servants, employees and contractors the right to enter into and upon any
and all parts of the
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Premises at all reasonable hours (or at any time upon twenty-four hours prior
notice) to inspect same or clean or make repairs or alterations or additions as
Lessor may deem necessary or desirable. Lessee shall not be entitled to any
abatement or reduction of rent by reason thereof except to the extent such
activities preclude Lessee from operating its business at the Premises, as
ordinarily conducted, for a period of five (5) business days per lease year
during the Term.
9. Condemnation.
(a) If the whole or a substantial part of the Premises or the Building is
condemned or acquired in lieu of condemnation for any public or quasi-public use
or purpose, by right of eminent domain or otherwise, then the Term of this Lease
shall cease and terminate as of the date when title vests in such governmental
authority. Lessee shall have no claim against Lessor or the condemning authority
for any portion of the amount of the condemnation award or settlement that
Lessee claims as its damages arising from such condemnation or acquisition, or
for the value of any unexpired Term of the Lease. For purposes of this section
9, a "substantial part of the Premises" shall be considered to have been taken
if twenty-five percent (25%) or more of the Premises is condemned or acquired
in lieu of condemnation, or if less than twenty-five percent (25%) of the
Premises is taken and the portion of the Premises taken renders the entire
Premises untenantable, in Lessor's sole judgment, for general office use. For
purposes of this section 9, a "substantial part of the Building" shall be
considered to have been taken if twenty-five percent (25%) or more of the
Building is condemned or acquired in lieu of condemnation, or if less than
twenty-five percent (25%) of the Building is taken and the portion of the
Building taken renders the Building untenantable, in Lessor's sole judgment, for
general office use.
(b) If less than a substantial part of the Premises is condemned or
acquired in lieu of condemnation for any public or quasi-public use or purpose,
by right of eminent domain or otherwise, all rent required to be paid by Lessee
hereunder shall be equitably adjusted on the date when title vests in such
governmental authority and the Lease shall otherwise continue in full force and
effect.
10. Holding Over.
(a) In the event Lessee does not immediately surrender the Premises on the
date of expiration of the Term of this Lease, Lessee shall become a tenant by
the month and hereby agrees to pay to Lessor (i) a Base Rent Amount equal to one
and one-half (i.e. 150%) times the amount of the Base Rent Amount in effect
during the last month of the Term of this Lease, plus (ii) all Additional Rent
due under the Lease. Lessee as a month-to-month tenant shall continue to be
subject to all of the conditions and covenants of this Lease. Lessee shall give
to Lessor at least thirty (30) days advance written notice of any intention to
quit the Premises. Lessee shall be entitled to thirty (30) days advance written
notice to quit the Premises, except in the event of nonpayment of the modified
Base Rent Amount in advance, in which event Lessee shall not be entitled to any
notice to quit, the usual thirty (30) days advance written notice to quit being
hereby expressly waived.
(b) In the event that (i) Lessee has become a month-to-month tenant
pursuant to Section 10(a) above by remaining in the Premises after the
expiration of the Term, and (ii) Lessee has remained in the Premises as a
month-to-month tenant for at least three lease months after the Term, and (iii)
Lessor has given Lessee thirty (30) days advance written notice to quit the
Premises on a quit date which is on or after such three month period, and (iv)
Lessee does not thereafter surrender the Premises on such quit date, than so
long as Lessor has not accepted the modified Base Rent amount from Lessee for
the month following such three month period, Lessor's acceptance of modified
Base Rent Amount from Lessee as a month-to-month tenant, hereunder, Lessor, at
its option, may reenter and take possession of the Premises without process, or
by any legal process in force in the jurisdiction in which the Building is
located.
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11. Damage or Destruction to Premises by Fire, Casualty, or Other Event.
(a) If at any time prior to or during the Term hereof, the Premises is
damaged by fire, casualty or other event insured against by Lessor's Hazard
Insurance Policy (as defined herein), and the Premises can be fully repaired
with the proceeds of such insurance, in Lessor's reasonable judgment, within 180
days after the date of the fire, casualty or other event, Lessor, shall repair
such damage. In connection with such repair:
(i) Lessor shall have no obligation to repair any damage to, or to
replace, Lessee's tenant improvements or any other property of Lessee
located in the Premises;
(ii) Lessor shall not be liable for any inconvenience or annoyance
to Lessee or injury to Lessee's business resulting in any way from such
damage or repair thereof;
(iii) except as otherwise provided herein, if the entire Premises is
rendered untenantable by reason of the insured fire, casualty or other
event, then the Base Rent Amount shall xxxxx for the period from the date
of such damage to the date when Lessor has completed repairs to the
Premises as specified above, and if only a portion of the Premises is so
rendered untenantable, then the Base Rent Amount shall xxxxx for such
period in the percentage which the area of the portion of the Premises so
rendered untenantable bears to the total area of the Premises; provided,
however, that no abatement of Base Rent Amount shall occur if such fire,
casualty or other event arose by reason of any negligent act or omission
of Lessee, its agents, servants, employees, contractors, guests, invitees,
or licensees;
(iv) if the Base Rent Amount is abated pursuant to the foregoing
section (iii), and thereafter (prior to the date when such repairs have
been completed) any portion of the Premises so damaged shall be rendered
tenantable and shall be used or occupied by Lessee or any person claiming
through or under Lessee, then the amount by which the Base Rent Amount
shall xxxxx shall be equitably apportioned for the period from the date of
any such use or occupancy to the date when such repairs are completed.
(b) Notwithstanding the foregoing, if at any time prior to or during the
Term hereof, (i) the Premises is so damaged by any fire, casualty or other event
that, in Lessors sole judgment, the Premises cannot be fully repaired within 180
days from the date such fire, casualty or other event occurred (regardless of
whether such fire, casualty, or other event is insured against by Lessor's
Hazard Insurance Policy), or (ii) the Premises is so damaged by a fire, casualty
or other event not insured against by Lessor's Hazard Insurance Policy that, in
Lessor's reasonable judgment, repair of such damage would cost more than
$50,000.00, or (iii) any Mortgagee (as defined herein) of Lessor requires that
the insurance proceeds from any fire, casualty or other event be used to reduce
any debt owed to such Mortgagee rather than repairing or reconstructing the
Premises or Building, then, in any of such events, Lessor, at its option, may
give to Lessee, within thirty (30) days after such fire, casualty, or other
event, a thirty (30) days notice of termination of this Lease and, in the event
such notice is given, this Lease shall terminate (whether or not the Term shall
have commenced) upon the expiration of such thirty (30) days with the same
effect as if the date of expiration of such thirty (30) days was the date
definitely fixed for expiration of the Term of this Lease, and the
then-applicable Base Rent Amount shall be apportioned as of such date. Such
termination shall not, however, impair any rights of Lessor against Lessee under
the terms of this Lease with respect to such damage. If Lessor does not
terminate the Lease as aforesaid, then Lessor shall proceed within forty-five
(45) days to initiate the repairs or reconstruction of the Premises or the
Building, as the case may be, and in such event the provisions of sections 1
1(a)(i) through (iv) above shall also apply.
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12. Default; Specific Remedies.
(a) Default. If any of the following events occur, then Lessee shall be in
default of this Lease (each such event, a "Default"):
(i) Lessee vacates or abandons the Premises without paying the Base
Rent Amounts (and any Additional Rent) as and when due;
(ii) Lessee fails to pay when due any rent, including any Base Rent
Amount or Additional Rent, or any other sums, charges, expenses or costs
of any kind owed by Lessee to Lessor hereunder, and such failure to pay
continues for a period of ten (10) days after written notice of such
failure has been given by Lessor to Lessee or delivered by Lessor to the
Premises;
(iii) Lessee violates or fails to perform any of the other
conditions, covenants or agreements of this Lease made by Lessee, and any
violation or failure to perform any of those conditions, covenants or
agreements continues for a period of thirty (30) days after written notice
thereof has been delivered by Lessor to Lessee, or, in cases where the
violation or failure to perform cannot be corrected within thirty (30)
days, Lessee does not begin to correct the violation or failure to perform
within thirty (30) days after receiving Lessor's written notice and/or
Lessee thereafter does not diligently pursue the correction of the
violation or failure to perform; or
(iv) Lessee or any guarantor of this Lease becomes bankrupt or
insolvent, or files or has filed against it pursuant to any statute either
of the United States or of any state, a petition in bankruptcy or
insolvency or for reorganization or for the appointment of a receiver or
trustee of all or a substantial portion of Lessee's or any such
guarantor's property, or if Lessee or any such guarantor makes an
assignment for the benefit of creditors, or petitions for or enters into
an arrangement with creditors.
(b) Repeated Noncompliance. Notwithstanding the foregoing, or anything to
the contrary herein, if Lessee more than twice during any twelve (12) month
period during the Term of this Lease, fails to satisfy or comply with the same
or substantially the same requirements or provisions under this Lease, including
the non-payment when due of rent of any kind or nature, then notwithstanding any
provisions of section 12(a), at Lessor's election, Lessee shall not have any
right to cure such repeated failure to satisfy or comply, and Lessee shall be in
Default of this Lease. In the event of Lessor's election not to allow a cure of
a repeated failure to satisfy or comply, Lessor shall have all of the rights for
a Default provided for in this Lease.
(c) Specific Remedies of Lessor. Upon the occurrence of any Default,
Lessor shall have the option to do and perform any one or more of the following:
(i) Terminate this Lease, in which event Lessee shall immediately
surrender the Premises to Lessor. If Lessee shall fail to do so, Lessor
may (after compliance with all dispossessory procedures required by
applicable law), and without being liable for any claim for trespass or
damages therefor, expel or remove Lessee, re-key the Premises, remove
Lessee's effects therefrom and store the same at Lessee's reasonable
expense, without being liable for any damage thereto. Upon any such
termination, Lessee shall remain liable to Lessor for damages, due and
payable monthly on the day the Base Rent Amount would have been payable
hereunder, in an amount equal to the Base Rent Amount, any Additional
Rent, and any other amounts which would have been owing by Lessee for the
balance of the Term had this Lease not been terminated, less the net
proceeds, if any, of any reletting of the Premises by Lessor, plus the
aggregate amount of all of Lessor's costs and expenses (including, without
limitation, advertising expenses and
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professional fees) incurred in connection with or in any way related to
the termination of this Lease, the eviction of Lessee, or such reletting;
(ii) Enter the Premises as the agent of Lessee (after compliance
with all dispossessory procedures required by applicable law) and without
being liable for any claim for trespass or damages therefor, re-key the
Premises, remove Lessee's effects therefrom and store the same at Lessee's
reasonable expense, without being liable for any damage thereto, and relet
the Premises as the agent of Lessee, without advertisement, by private
negotiations, for any term Lessor deems proper, at a rental rate which is
commercially reasonable under the circumstances, and receive the rent
therefor. Upon such reletting, all rentals received by the Lessor from
such reletting shall be applied first, to the payment of any sums other
than the Base Rent Amount and Additional Rent due hereunder from Lessee to
Lessor; secondly, to the payment of any costs and expenses of such
reletting, including, without limitation, brokerage fees and attorneys'
fees and the costs of such alterations and repairs as may be necessary
relative to such re-letting; third, to the payment of all Base Rent Amount
and Additional Rent then due and unpaid under the Lease; and the residue,
if any, shall be held by the Lessor and applied in payment of future Base
Rent Amount and Additional Rent, as the same may become due and payable
hereunder. Lessee shall pay Lessor on demand any deficiency that may arise
by reason of such reletting, but Lessee shall not be entitled to any
surplus so arising. Lessee shall reimburse Lessor for all costs and
expenses (including, without limitation, advertising expenses and
professional fees) incurred in connection with or in any way related to
the eviction of Lessee and re-letting the Premises;
(iii) Lessor (to the extent such sum is not reimbursed to Lessor in
conjunction with any other payment made by Lessee to Lessor), shall have
the right to be immediately repaid by Lessee the amount of all sums
expended by Lessor and not repaid by Lessee in connection with preparing
or improving the Premises to Lessee's specifications and any and all costs
and expenses incurred in renovating or altering the Premises to make it
suitable for re-letting;
(iv) As agent of Lessee, do whatever Lessee is obligated to do by
the provisions of this Lease, including, but not limited to, entering the
Premises, in order to accomplish this purpose. Lessee agrees to reimburse
Lessor immediately upon demand for any reasonable expenses which Lessor
may incur in thus effecting compliance with this Lease on behalf of
Lessee, and Lessee further agrees that Lessor shall not be liable for any
damages resulting to Lessee from such action, unless caused by the
negligence or willful misconduct of Lessor;
(v) Lessor may declare the entire amount of all Base Rent Amount and
Additional Rent which would have become due and payable during the
remainder of the Term of this Lease to be due and payable immediately
without notice to Lessee, and thereafter Lessor may terminate this Lease
and recover from Lessee, as liquidated damages for all damages Lessor may
incur by reason of Lessee's Default, the dollar amount equal to: (a) all
amounts due and owing under this Lease prior to such termination, plus (b)
the cost of recovering the Premises, plus (c) reasonable attorney's fees
and costs, plus (d) a sum which, at the date of such termination, equals
the present value [discounted at eight percent (8%) per annum] of: (i) all
Base Rent Amount and Additional Rent which would have been due and payable
by Lessee hereunder for the remainder of the Term, less (ii) the aggregate
reasonable rental value of the Premises for the same period, taking into
account the probability of reletting the Premises and any cost, time and
other factors necessary to relet the Premises, all of which amounts shall
be immediately due and payable. For purposes of making such computation,
the parties shall assume that the total dollar amounts of the Operating
Expense Change and Additional Rent for each remaining
9
month of the Term shall be equal to one-twelfth of the total amounts of
such items for the twelve calendar months immediately preceding the date
of the Default, and that the Lessee's proportionate shares of Additional
Rent remain unchanged from the date of the Default through the remainder
of the Term. If Lessor recovers damages pursuant to the forgoing
liquidated damages formula, Lessor shall not be entitled to recover
additional damages for the Default under the provisions of any other
remedies set forth herein or otherwise available at law or equity;
provided, however, that notwithstanding the foregoing, the foregoing
limitation of remedies shall not be deemed to impair or limit, and is
without prejudice to, Lessors right to enforce Lessee's indemnity
obligations pursuant to sections 15(a) and/or (b) of this Lease (other
than for any sums specifically included in the foregoing damage
computation). Lessor and Lessee agree that the foregoing damages formula
constitutes a good faith reasonable estimate of the probable damages to be
suffered by Lessor upon the occurrence of a Default, and that it is
impossible to estimate more precisely such damages, and that the amount
computed pursuant to the foregoing damages formula is not intended as a
penalty, but as liquidated damages; and
(vi) Lessor may exercise any other rights or remedies provided
herein, or existing at law or in equity.
(d) All rights and remedies of Lessor provided in this Lease, or existing
at law or in equity, are and shall be cumulative, and the exercise by Lessor of
any rights or remedies shall not preclude the exercise by Lessor of any other
rights or remedies, whether cumulatively or successively; provided, however,
that recovery by Lessor of damages measured by the liquidated damages formula in
section 12(c)(v) above shall exclude the right of Lessor to recover any other
damages incurred by Lessor by reason of the Default, except as provided in said
section 12(c)(v).
(e) The acceptance by Lessor of any Base Rent Amount or Additional Rent
from Lessee with knowledge of any breach or Default of any covenant in this
Lease shall not be deemed a waiver of such breach or Default.
(f) Lessor's reentry, demand for possession, notice that the tenancy
hereby created will be terminated on the date therein named, institution of an
action of unlawful detainer or ejectment or the entering of a judgment for
possession in such action or any other act or acts resulting in the termination
of Lessee's right to possession of the Premises shall not relieve Lessee from
Lessee's obligation to pay all sums due hereunder during the balance of the
Term, except as herein expressly provided. Lessor may collect and receive any
Base Rent Amount, Additional Rent, or other sums due from Lessee, and the
payment thereof shall not constitute a waiver of or affect any notice or demand
given, suit instituted or judgment obtained by Lessor, or be held to waive,
affect, change, modify or alter the rights or remedies which Lessor has under
the terms of this Lease, or at law or in equity.
(g) In the event Lessor commences any proceedings for nonpayment of Base
Rent Amount, Additional Rent or other sums due hereunder, Lessee will not
interpose any noncompulsory counterclaim of whatever nature or description which
is not directly related to the Lease in any such proceeding. This shall not,
however, be construed as a waiver of the Lessee's right to assert such claims in
any separate action or actions brought by the Lessee.
(h) In the event that the applicable statute of limitations for
enforcement of this Lease by Lessor against Lessee for any breach or Default
would expire sooner than one year after the Term of this Lease, then Lessee
hereby waives such statute of limitations and agrees that it is extended for a
period of one year after the Term.
13. Alterations and Additions Etc.
10
(a) As used in this Lease, the term "Utility Installation" shall mean air
ducts, power panels, lighting fixtures, space heaters, and all plumbing,
electrical, heating, ventilation, and air conditioning systems.
(b) Lessee shall be entitled to make alterations, improvements, or
additions in or upon the Premises only as follows: Lessee shall not, without
Lessor's prior written consent (which shall not be unreasonably denied or
delayed), make (i) any installations of or changes to Utility Installations in
or upon the Premises, or (ii) any other alterations, improvements, or additions
in or upon the Premises except for non-structural alterations, improvements or
additions not exceeding $10,000 in cumulative costs during the Term of this
Lease, the removal of which will not materially damage the Premises (provided
that Lessee at its expense removes same and restores the Premises to its prior
condition at the termination of the Term). Should Lessee make any alterations,
improvements, or additions without the prior written consent of Lessor when
required above, Lessor may require that Lessee remove any or all of the same at
any time. Regardless of any consent granted by Lessor, if at the time of
granting such consent the Lessor notifies Lessee that removal and restoration in
respect of the alteration, improvement or addition will be required, then Lessee
shall remove, at its expense, any and all of said alterations, improvements, and
additions at the termination of the Term, and restore the Premises to its prior
condition.
(c) Lessee shall pay, when due, all claims for labor or materials
furnished to or for Lessee at or for use in the Premises, which claims are or
may be secured by any mechanics' or materialmen's lien against the Premises or
any interest therein. If Lessee shall, in good faith, contest the validity of
any such lien, claim or demand, then Lessee shall, at its sole expense, defend
itself and Lessor against the same and shall pay and satisfy any such adverse
judgment that may be rendered thereon before the enforcement thereof against the
Lessor or the Premises, upon the condition that if Lessor shall require, Lessee
shall furnish to Lessor a surety bond satisfactory to lessor in an amount equal
to such contested lien claim or demand indemnifying Lessor against liability for
the same and holding the Premises free from the effect of such lien or claim.
(d) Unless Lessor requires their removal as set forth in this section, all
alterations, improvements, additions and Utility Installations which may be made
on the Premises, shall become the property of Lessor and remain upon and be
surrendered with the Premises at the termination of the Term.
14. Insurance; Waiver of Subrogation; Liability for Damage to Premises.
(a) Liability Insurance required by Lessee. Lessee shall, at Lessee's
expense, obtain and keep in force during the Term of this Lease a policy of
Commercial General Liability Insurance (or policy with equivalent coverage),
with such additional coverages and endorsements as Lessor may reasonably request
from time to time, insuring Lessee as the named insured, and Lessor as an
additional insured, and in any event carrying the following special
endorsements: contractual liability with respect to contractual obligations of
the Lessee. Such insurance shall be in an amount not less than One Million
Dollars ($1,000,000) CSL (combined single limit) per occurrence, and not less
than Three Million Dollars ($3,000,000) in the aggregate.
(b) Property Insurance on Building, Etc. Lessor shall obtain and keep in
force during the Term of this Lease a policy or policies of insurance
(collectively, the "Lessor's Hazard Insurance Policy"), naming Lessor as loss
payee, covering loss or damage to the Building (including all fixtures of
Lessor), in an amount not less than the full replacement value thereof (plus
loss of rents coverage), providing protection against all perils of Fire,
Lightening, Extended Coverage, Vandalism and Malicious Mischief, extended by
Special Extended Coverage
11
Endorsement, to insure against all risks of direct physical loss ("all risk," as
such term is now or hereafter used in the insurance industry), and carrying
deductibles that do not exceed $1,000 per occurrence. Lessee acknowledges that
the cost of such insurance shall constitute an Operating Expense.
(c) Property Insurance on Lessee's Property, Etc. At Lessee's expense,
Lessee shall obtain and keep in force during the Term of this Lease a business
personal property insurance policy (the "Lessee's Hazard Insurance Policy"),
naming Lessee as loss payee, covering loss or damage to the Lessee's contents on
the Premises (including all fixtures, equipment, inventory, and other property
of Lessee located thereon), in an amount not less than the full replacement
value thereof, providing protection against all perils of Fire, Lightening,
Extended Coverage, Vandalism and Malicious Mischief, extended by Special
Extended Coverage Endorsement, to insure against all risks of direct physical
loss ("all risk," as such term is now or hereafter used in the insurance
industry).
(d) Requirements for Insurance Policies The insurance companies issuing
all policies shall be reputable and responsible companies in the insurance
industry (with a Best Rating of A-X or better), reasonably acceptable to both
Lessor and Lessee. Lessor and Lessee shall deliver to each other copies of the
policies of insurance required to be obtained by them under this section 14, or
certificates evidencing the existence, terms and amounts of such insurance. Each
policy shall provide that it shall not be cancelable or subject to reduction of
coverage or other modification except after thirty (30) days' prior written
notice to Lessor and Lessee. Lessor and Lessee shall, at least thirty (30) days
prior to the expiration of such policies, furnish each other with renewals or
"binders" thereof.
(e) Waiver of Subrogation. Notwithstanding anything to the contrary
herein, Lessee and Lessor each hereby release and relieve the other (and it's
officers, directors, shareholders, employees, agents, and servants) from, and
each hereby waive their entire right of recovery and subrogation against the
other (and it's officers, directors, shareholders, employees, agents, and
servants) for, any loss or damage to the respective properties of Lessee and
Lessor, but only to the extent such loss or damage is covered by (and not within
the deductibles of) the insurance provided pursuant to section 14(b) or (c) of
this Lease, whether or not due to the negligence, gross negligence, or other
conduct of Lessor or Lessee or their respective agents, servants, employees,
contractors, guests, invitees, licensees, officers, directors or shareholders.
Lessor and Lessee agree that the insurers providing such insurance shall have no
rights of subrogation against Lessor or Lessee (or their respective officers,
directors, shareholders, employees, agents, or servants) on account of such loss
or damage. All policies of insurance required by section 14(b) or (c) of this
Lease shall provide that the coverages provided thereby shall not be invalidated
by reason of the foregoing waivers and shall contain appropriate waiver of
subrogation endorsements by the insurers. In connection therewith, the party
responsible for obtaining a particular insurance policy under section 14(b) or
(c) shall give the insurer under the policy actual notice of the waivers of
subrogation contained herein. Without limiting any other provision of this
Lease, the parties acknowledge that the provisions of this section 14(e) shall
specifically survive any termination of this Lease.
(f) Except to the extent expressly provided in this Lease, nothing
contained in this Lease shall relieve either party of any liability which the
other party may have under law or the provisions of this Lease in connection
with any damage to the Premises, the Building, the Common Areas, or any personal
property.
15. Indemnification by Lessee. Subject to the particular losses and
damages released by Lessor in section 14(e) hereof, Lessee agrees that from and
after the date hereof, it shall indemnify, hold harmless, and defend Lessor (and
its officers, directors, shareholders, agents, servants, and employees) from and
against, any losses, claims, demands, damages, suits,
12
liabilities, costs or expenses (including without limitation costs of
investigation, remediation costs, reasonable attorneys fees, and court costs)
arising from, relating to, or consisting of damages to the Common Areas, the
Building, or the land on which it is situated, caused by any act or any
negligence of Lessee, its agents, servants, employees, contractors, guests,
invitees, or licensees.
The foregoing duties of the Lessee shall apply regardless of any actual or
alleged negligence of Lessor (or its officers, directors, shareholders, agents,
servants, employees, contractors, guests, invitees, or licensees). Without
limiting any other provision of this Lease, the parties acknowledge that the
provisions of this section shall specifically survive any termination of this
Lease. The provisions of this section shall be in addition to all other remedies
now or hereafter available to Lessor at law or in equity.
16. Waiver of Certain Claims by Lessee
(a) Except for damages or losses caused by the gross negligence or willful
misconduct of Lessor, Lessee hereby waives and releases Lessor from all
liability arising from any loss of or damage to any personal property of Lessee,
its agents, servants, employees, contractors, guests, invitees, and licensees,
in or on the Premises or the Building, including loss or damage arising from:
(i) any act, including theft, or any failure to act, of any other persons; (ii)
the leaking of the roof, (iii) the bursting, rupture, leaking or overflowing of
water, sewer or steam pipes, or heating, cooling, electrical, or plumbing
fixtures; (iv) short-circuiting or malfunction of electrical wires or fixtures,
including any security or protective systems; or (v) the failure of the heating
or air-conditioning systems. Lessor shall also not be liable for the
interruption or loss to Lessee's business arising from any of the
above-described acts or causes. Lessee specifically agrees to save Lessor
harmless for losses and damages in all of the foregoing cases.
17. Subordination.
(a) Lessee accepts this Lease subject and subordinate to the lien of any
and all Mortgages (which term "Mortgages" shall include all mortgages, deeds of
trust, similar security instruments, and other liens of record) which may now or
hereafter encumber or otherwise affect the real estate (including the Building)
of which the Premises is a part, or Lessor's leasehold interest therein, and to
all and any renewals, extensions, modifications, recastings or refinancings
thereof, and all zoning ordinances and governmental ordinances, easements and
other restrictions of record. In confirmation of such subordination, Lessee
shall, at Lessor's request, promptly execute any appropriate certificate or
other document with respect thereto. Lessee hereby irrevocably constitutes and
appoints Lessor as Lessee's attorney-in-fact to execute any such certificate or
other document for or on behalf of Lessee if Lessee does not execute said
certificate or document within five (5) days after receipt thereof.
(b) Lessee agrees that in the event any proceedings are brought for the
foreclosure of any such Mortgage, Lessee shall attorn to the purchaser at such
foreclosure sale, if requested to do so by such purchaser. Lessee shall also
recognize such purchaser as the Lessor under this Lease and shall exercise such
purchaser's standard attornment agreement if requested to do so by Lessor or
such purchaser. Lessee waives the provisions of any statute or rule of law, now
or hereafter in effect, which may give or purport to give Lessee any right to
terminate or otherwise adversely affect this Lease and the obligations of Lessee
hereunder in the event that any such foreclosure proceeding is prosecuted or
completed.
(c) If the Building, the Premises or any part respectively thereof is at
any time subject to a Mortgage and this Lease or the rents are assigned to the
mortgagee, trustee or beneficiary thereof (each being referred to herein as a
"Mortgagee"), and Lessee is given written
13
notice thereof, including the post office address of such assignee, then Lessee
may not terminate this Lease for any Default on the part of Lessor without first
giving written notice by certified or registered mail, return receipt requested,
to such assignee, Attention: Mortgage Loan Department. The notice shall specify
the Default in reasonable detail, and afford such assignee a reasonable
opportunity to make performance, at its election, for and on behalf of Lessor.
18. Assignment and Subletting; Recourse. Lessee will not assign or sublet
all or part of this Lease (except to a parent, subsidiary, or affiliate
corporation or entity of Lessee, which directly or indirectly owns, is owned by,
or is under common ownership with, Lessee), without the written consent of
Lessor, which consent shall not be unreasonably withheld. No such assignment
shall operate to relieve the Lessee from any of its obligations under this
Lease. Lessor is entitled, at any time, without the consent of Lessee, to assign
any or all of its interest in this Lease to any person or entity. In the event
Lessee shall recover a money judgement against Lessor, such judgement shall be
satisfied only out of the proceeds of sale received upon execution of such
judgement against the right, title and interest of Lessor in the Building as the
same may then be constituted and encumbered, and Lessor shall not be liable for
any deficiency. In no event shall Lessee have the right to levy against any
property of Lessor other than Lessor's interest in the Building.
19. Waiver. Any waiver of any rights hereunder must be in writing and
signed by the party whose rights are waived thereby. No waiver granted on any
one occasion shall be deemed to constitute a waiver with respect to any other
occasions.
20. Benefit. This Lease shall be binding upon, and inure to the benefit
of, the parties hereto and their respective heirs, executors, administrators,
successors and permitted assigns, as the case may be.
21. Integration Clause; Modifications. This Lease and its exhibits and any
schedules hereto constitute the entire agreement between Lessor and Lessee
relating to the lease of the Premises which commences on the first day of the
Term hereof, and this instrument may not be altered, changed or amended except
by an instrument in writing signed by both parties hereto.
22. Gender and Number. The use of any gender word herein shall be deemed
to include all other genders, and the use of any singular word shall be deemed
to include the plural, and vice versa, whenever the context plainly requires.
23. Notices and Addresses. All notices, offers, acceptances, waivers, and
other communications under this Lease shall be in writing, and shall be deemed
to have been both given and received when delivered to the party in person or,
if mailed, on the third day after it is deposited in the U.S. Mails addressed to
the party at the following address, by certified mail, postage prepaid, with
return receipt requested, or, if sent via a reputable overnight courier service
for overnight delivery, on the next business day following the day on which it
is deposited with such service addressed to the party at the following address:
(i) If to Lessor:
J & N Realty Company, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
14
(ii) If to Lessee:
Elastic Networks, Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 3005
Attn: Xxx Xxxxx
or to such other address as any party, by notice to the other, may designate
from time to time. All rental payments and other payments by Lessee to Lessor
under this Lease shall be made by Lessee to Lessor at the above-listed address
of Lessor (or to such other person or address as Lessor may direct from time to
time by written notice to Lessee), and shall not be deemed to have been paid or
received until delivered to the Lessor (or such designee) in person, or, if
mailed, when physically delivered by the U.S. Mail to such address.
24. Counterparts. This Lease may be executed in one or more counterparts,
each of, which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
25. Severability. If any provision of this Lease or the application
thereof to any person or circumstance is to any extent held invalid, then the
remainder of this Lease or the application of such provision to persons or
circumstances other than those as to which it is held invalid shall not be
affected thereby, and each provision of the Lease shall be valid and enforced to
the fullest extent permitted by law.
26. [This Section Not Utilized.]
27. Law. This Lease shall be governed by and construed in accordance with
the internal substantive laws of the State of Georgia, without reference to
principles of conflicts of laws.
28. Attorneys' Fees. In addition to any other rights to attorneys fees and
costs, in the event either party breaches any of the provisions contained in
this Lease, and the other party prevails in any legal proceeding against the
breaching party to enforce this Lease, then such prevailing party shall be
entitled to recover all court costs and reasonable attorneys' fees from the
breaching party.
29. Recording. Neither party shall record this Lease without the prior
written consent of the other. However, either party may, at any time, elect to
record a memorandum of this Lease, which sets forth any terms hereof except the
amount of rents payable hereunder, and upon request, the other party shall duly
execute and acknowledge such a memorandum.
30. Further Assurances. Lessor and Lessee each agree that upon request by
the other from time to time, they shall each execute and deliver such other
documents and instruments, and perform such other acts and deeds, as may be
necessary, helpful or incidental to carry out or further confirm the terms
hereof or the intents and purposes hereof.
31. Estoppel Certificates. Lessee agrees, upon not less than five (5) days
prior written notice by Lessor, to execute, acknowledge and deliver to Lessor a
statement in writing: (i) certifying that this Lease is unmodified and in full
force and effect (or, if there have been modifications, that the Lease is in
full force and effect as modified and stating the modifications), (ii) stating
the dates to which rent and other charges hereunder have been paid by Lessee,
(iii) stating whether or not, to the best knowledge of Lessee, Lessor is in
default in the performance of any covenant, agreement or condition contained in
this Lease, and, if so, specifying each such default of which Lessee may have
knowledge, and (iv) agreeing not to pay Base Rent Amount or Additional Rent more
than thirty (30) days in advance or to amend the
15
Lease without the consent of any Mortgagee having an interest in the Building.
Any such statement delivered pursuant hereto may be relied upon by any owner of
the Building, any prospective purchaser of the Building, any Mortgagee or
prospective Mortgagee of the Building or of Lessor's interest, or any
prospective assignee of any Mortgage.
32. Opinion to Renew. Lessee shall have the option to renew this Lease
for one additional consecutive renewal term of nine (9) months (the "renewal
term") commencing immediately after the expiration of the Original Term, upon
the same terms and conditions as set forth herein (provided, however, that the
Base Rent Amount for the renewal term shall automatically be equal to 102% times
the Base Rent Amount in effect for the last month of the Original Term). In
order to exercise the Option to Renew, Lessee must give a written notice of
exercise to Lessor not less than six (6) months prior to the expiration of the
Original Term.
33. Broker. Lessor and Lessee represent and warrant to each other that
they have not been in contact with any broker in regard to this Lease; except
that (i) Lessee has employed The Windsor Realty Group as its broker; and (ii)
Lessor has employed Xxxxxxx, Xxxxxxx & Xxxxxxxx, Inc. as its broker. Lessor
shall promptly pay any commissions owed by them to the respective brokers.
Tenant represents and warrants to Landlord that it nor its officers or agents
nor anyone acting on their behalf has dealt with any real estate broker other
than The Windsor Realty Group LLC who represented the Tenant in the negotiating
or making of this Amendment, and Tenant agrees to indemnify and hold Landlord,
its agents, employees, partners, directors, shareholders, and independent
contractors harmless from all liabilities, costs, demands, judgments,
settlements, claims and losses, including reasonable attorneys' fees and costs,
incurred by Landlord in conjunction with any such claims or claims of any other
broker or brokers claiming to have interested Tenant in the building or Premises
or claiming to have caused Tenant to enter into this amendment.
34. Additional Provisions by Addendum. The provisions of this Lease also
include the terms and conditions set forth on Addendum No. 1 attached hereto,
which is incorporated herein by reference.
35. Waiver of Jury Trial. LESSOR AND LESSEE HEREBY WAIVE TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO
AGAINST TUE OTHER ON OR WITH RESPECT TO ANY MATTER WHATSOEVER ARISING OUT OF OR
IN ANY WAY CONNECTED WITH THIS LEASE.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
date first above written.
LESSOR LESSEE
J & N Realty Company, Inc. Elastic Networks, Inc.
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxx Elop
------------------------ ---------------------------
Name: Xxxxxx X. Xxxxxxx Name: Xxxxx Elop
---------------------- -------------------------
Title:President Title: Secretary & Treasurer
--------------------- ------------------------
Date: 8/10/99 Date: Aug. 6, 1999
---------------------- -------------------------
16
Addendum No. 1 to Lease Agreement dated August 6, 1999 (the "Lease")
between J & N Realty Company, Inc. ("Lessor"),
and Elastic Networks, Inc. ("Lessee")
As an integral part of the Lease, the parties further agree as follows:
1. New Security System, Partition Walls, Etc. The parties agree that for
so long as the Unencumbered Space is not leased to a third party tenant, Lessee
shall use (and be provided all access codes for) the security system currently
installed for the first floor of the Building, consisting of a keypad access
panel at the front entrance (the "Existing Security System"). However, if Lessor
leases any of the Unencumbered Space to any third party tenant, then at the time
such third party tenant takes possession of its lease space, the following terms
and conditions shall apply:
(a) Prior to occupancy by the third party tenant of its lease space,
Lessor shall, at its expense, construct privacy walls and privacy doorways at
the particular parts of the Premises respectively marked on Exhibit "A" hereto,
in order to physically partition the Premises from the Common Areas and
Unencumbered Space. Such doorways shall be for the sole use and access of Lessee
and Lessor, and shall not be available for access by third party tenants.
(b) All third party tenants shall be entitled to use (and shall be
provided all access codes for) the Existing Security System, in order to provide
security to their respective lease spaces.
(c) Lessee shall be entitled, at its expense, to install its own separate
security system (the "New Security System"), to restrict access to its Premises,
but only upon the following terms and conditions:
(i)Lessee shall furnish to Lessor, at least ten (10) days prior to
installation, a written description of the New Security System, including
a reasonable description of all major electrical requirements and
components for its installation and use.
(ii) the New Security System shall not adversely affect any Utility
Installation in the Building, and shall not affect or restrict the access,
use, occupancy, or enjoyment by the Lessor or any third party tenant of
any areas outside of the Premises. Lessee shall give Lessor at least three
(3) days prior written notice of any installation work or material repair
work with respect to the New Security System, and Lessor shall be
entitled, at its option, to cause an agent or representative of Lessor to
observe all such installation and repair work in order to assure
compliance with this Lease.
(iii) Upon the installation of the New Security System, Lessee shall
immediately provide Lessor in writing with copies of all procedures (and
all access codes) required to operate the New Security System and gain
entry into all parts of the Premises, in order to enable Lessor to enter
upon the Premises in accordance with the other terms and provisions of
this Lease. Lessee shall not make any changes or alterations in such
procedures or access codes, unless it provides at least three (3) days
prior written notice to Lessor of such changes or alterations.
(iv) At the termination of the Term of this Lease, Lessee shall, at
its expense, remove the New Security System and restore the Premises to
its prior condition (unless Lessor waives such requirement in writing, in
which case Lessor shall automatically succeed to ownership of the New
Security System).
2. Thermal Unit. As used herein, the term "Thermal Unit" means a
free-standing piece of testing equipment (into which manufactured components may
be placed in order to subject them to hot or cold temperature changes for
evaluation purposes) of the same make and model as the thermal unit previously
inspected by Lessor at Lessee's current place of business. The parties agree
that Lessee shall be entitled to install a Thermal Unit in the Premises, upon
the following terms and conditions:
1
(a) The Thermal Unit may only be installed at Lessee's expense, on or
after January 1, 2000, in the portion of the Premises consisting of the
warehouse area. The Thermal Unit shall not preclude Lessor from obtaining (or
increase the cost of) Lessor's Hazard Insurance Policy.
(b) When installing the Thermal Unit, Lessee shall not install or alter
any Utility Installations without the prior written consent of Lessor (which
shall not be unreasonably denied or delayed).
(c) At the termination of the Term of this Lease, Lessee shall at its
expense remove all alterations and installations made by Lessee at the Premises
in connection with the Thermal Unit, as well as the Thermal Unit itself, and
restore the Premises to its prior condition.
(d) Lessee understands that the Thermal Unit will be located directly
below office space leased to third parties on the second floor of the Building,
and that use or operation of the Thermal Unit during the hours of 5:00 a.m.
through 5:00 p.m. (Eastern Time) on Mondays through Saturdays ("Restricted
Hours") may create noise levels which disturb the quiet enjoyment of such third
party tenants. Accordingly, Lessee expressly agrees that if any third party
tenant complains to Lessor with respect to such noise, or Lessor determines in
good faith that such noise creates the potential for tenant problems or
adversely impairs the lease value of any portion of the Building, then upon
written notice by Lessor to Lessee, Lessee agrees that it shall only operate the
Thermal Unit during hours of the day which are not Restricted Hours.
(e) Lessee warrants to Lessor that Lessee's use and operation of the
Thermal Unit will not consume electricity in an amount which is substantially in
excess of ordinary office equipment. In the event that Lessor determines in its
reasonable judgment (including without limitation by comparison of monthly
electric bills for the Building, for monthly periods before and after the
installation and use of the Thermal Unit, pro-rated for the area comprising the
Premises) that the Thermal Unit is or may be consuming excessive amounts of
electricity, then Lessor shall be entitled, at its option, to require Lessee to
do the following:
(i) install at Lessee's expense a separate electronic gauge to
measure the electricity consumption of the Thermal Unit itself, and permit
Lessor to read such gauge on a monthly basis, and pay Lessor for the
electricity consumed by the Thermal Unit at the same rates charged by the
local electric company, within five days of the presentation of an invoice
by Lessor for such electricity; or
(ii) install at Lessee's expense a separate electric line and meter
from the local electric company, in the name of Lessee, pursuant to which
Lessee shall be billed by the electric company for, and Lessee shall
promptly pay for, all electricity consumed by the Thermal Unit during the
Term of the Lease.
3. Access to Warehouse Area Prior to January 1 2000. Lessee acknowledges
that the warehouse area on the first floor of the Building will not constitute
part of the Premises until January 1, 2000. For purposes of compliance with fire
safety laws, however, Lessee acknowledges that Lessor is required to provide on
the interior of the current Premises an exit door into the warehouse area, to
permit occupants to exit the Building in the event of a fire or other emergency
by passing through the warehouse area and then through an exterior doorway.
Accordingly, Lessee agrees that until such time as the warehouse area becomes
part of the Premises on January 1, 2000, Lessee (its agents, servants,
employees, contractors, guests, invitees, and licensees) shall not enter into or
pass through the warehouse area except (i) for purposes of evacuating the
building in the event of an actual or threatened fire or other emergency, or
(ii) during the hours of 8:00 A.M. to 5:00 P.M. (except for New Years Day,
Memorial Day (on the date federally observed), July Fourth, Labor Day,
Thanksgiving Day, and Christmas Day), for the purpose of moving Lessee's
furniture, equipment, or supplies from the exterior of the Building into or out
of the Premises. For purposes of the foregoing uses by Lessee, the warehouse
area shall be considered part of the "Common Areas" under this Lease until
January 1, 2000. It is expressly understood that Lessee shall not leave or store
any property in the warehouse area prior to January 1, 2000.
4. Right of First Refusal. Provided that Lessee is not in Default of this
Lease, Lessor grants to Lessee a right of first refusal during the Term of this
Lease, with respect to the Unencumbered Space, on the following terms and
conditions (the "Right of Refusal"):
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(a) In the event Lessor desires to lease any of the Unencumbered Space to
a particular third party tenant, then Lessor shall first deliver to Lessee, in
writing, a lease proposal which sets forth the rental rate, escalation
provisions, term, tenant improvement provisions, commencement date, and lease
space description of the proposed lease, initialed by the prospective third
party tenant (the "Lease Proposal"). If Lessee desires to exercise its Right of
Refusal for the space covered by the Lease Proposal, then Lessee must deliver to
Lessor, within five days after receipt of the Lease Proposal, a written notice
exercising the Right of Refusal. Upon such exercise, Lessee shall automatically
be obligated to lease from Lessor, beginning on such commencement date and
extending through the remaining Term of this Lease, the particular space covered
by the Lease Proposal, upon the same terms as are set forth in the Lease
Proposal (with all other terms and conditions of such lease by Lessee to be
substantially the same as contained in this Lease), and Lessee shall thereafter
promptly execute and deliver to Lessor, at Lessor's option, either an Amendment
to this Lease to govern the demising of such additional space to Lessee, or a
separate lease agreement to govern the demising of such additional space to
Lessee. If Lessee fails to exercise its Right of Refusal as set forth above,
then provided that Lessor enters into a lease agreement with the proposed third
party tenant upon substantially the same terms as were set forth in the Lease
Proposal, then the particular space covered by the Lease Proposal shall
thereafter be forever free of the Right of Refusal in all respects. Upon the
leasing by Lessee of the additional space, the cost of erecting any additional
privacy walls or privacy doorways, or making any changes in the security
systems, shall be at the expense of Lessee.
(b) Notwithstanding the foregoing, if the particular space set forth in
any Lease Proposal consists of 70% or more of the original Unencumbered Space,
and Lessee exercises its Right of Refusal, then Lessee shall be obligated to
lease from Lessor all of the Unencumbered Space, on the terms and conditions
described in (a) above.
5. Option on Unencumbered Space. Subject to the rights of Lessor under the
Right of Refusal, and provided that Lessee is not in Default under this Lease,
Lessor grants to Lessee an option to lease all (but not less than all) of the
Unencumbered Space, on the following terms and conditions (the "Option"):
(a) In order to exercise the Option, Lessee must deliver to Lessor, within
one year after September 1, 1999, and prior to the delivery to Lessee of any
Lease Proposal arising under the Right of Refusal, a written notice which states
that Lessee is exercising the Option and which sets forth the date on which
Lessee desires for such lease to commence (which commencement date shall be not
less than thirty (30) days and not more than sixty (60) days after the date of
delivery of the written notice).
(b) Upon a valid exercise of the Option, Lessee shall automatically be
entitled to lease from Lessor, beginning on such commencement date and extending
for the remaining Term of this Lease, all but not less than all of the
Unencumbered Space, upon the same terms and conditions, and for the same rental
rates per square foot, as provided in this Lease with respect to the Premises,
and Lessee shall thereafter promptly execute and deliver to Lessor, an Amendment
to this Lease to govern the demising of the Unencumbered Space to Lessee, and to
recognize that the Unencumbered Space has become part of the Premises. Upon the
leasing by Lessee of the Unencumbered Space, the costs of erecting any
additional privacy walls or privacy doorways, or making any changes in the
security systems, shall be at the expense of Lessee.
Lessor's Initials: Lessee's Initials:
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EXHIBIT "A"
PREMISES
[Floor Plan of 0000 Xxxxxxxx Xxxxx]
0000
XXXXXXXX XXXXX
7,500 RSF Sept 1- Dec 31, 1999
10,000 RSF Starting Jan 1, 2000
