North Carolina-Durham-2600 Meridian Parkway Lease - CMD Properties Inc. and Red Hat Software Inc.
CMD 103A (8/98)
Base Years
OFFICE LEASE
WITH
RED HAT SOFTWARE, INC.
SUITE(S): 100
BUILDING: 2600 Meridian Parkway
Durham, North Carolina 27713
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TABLE OF CONTENTS
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ARTICLE 1: BASIC PROVISIONS....................................................................
ARTICLE 2: TERM AND COMMENCEMENT...............................................................
ARTICLE 3: BASE RENT AND ADDITIONAL RENT.......................................................
ARTICLE 4: CONDITION OF PREMISES...............................................................
ARTICLE 5: QUIET ENJOYMENT.....................................................................
ARTICLE 6: UTILITIES AND SERVICES..............................................................
ARTICLE 7: USE, COMPLIANCE WITH LAWS, AND RULES................................................
ARTICLE 8: MAINTENANCE AND REPAIRS.............................................................
ARTICLE 9: ALTERATIONS AND LIENS...............................................................
ARTICLE 10: INSURANCE, SUBROGATION, AND WAIVER OF CLAIMS........................................
ARTICLE 11: CASUALTY DAMAGE.....................................................................
ARTICLE 12: CONDEMNATION........................................................................
ARTICLE 13: ASSIGNMENT AND SUBLETTING...........................................................
ARTICLE 14: PERSONAL PROPERTY, RENT AND OTHER TAXES.............................................
ARTICLE 15: LANDLORD'S REMEDIES.................................................................
ARTICLE 16: SECURITY DEPOSIT....................................................................
ARTICLE 17: ATTORNEYS' FEES AND VENUE...........................................................
ARTICLE 18: SUBORDINATION, ATTORNMENT AND LENDER PROTECTION.....................................
ARTICLE 19: ESTOPPEL CERTIFICATES...............................................................
ARTICLE 20: RIGHTS RESERVED BY LANDLORD.........................................................
ARTICLE 21: RIGHT TO CURE.......................................................................
ARTICLE 22: INDEMNIFICATION.....................................................................
ARTICLE 23: RETURN OF POSSESSION................................................................
ARTICLE 24: HOLDING OVER........................................................................
ARTICLE 25: NOTICES.............................................................................
ARTICLE 26: REAL ESTATE BROKERS.................................................................
ARTICLE 27: NO WAIVER...........................................................................
ARTICLE 28: TELECOMMUNICATION LINES.............................................................
ARTICLE 29: HAZARDOUS MATERIALS.................................................................
ARTICLE 30: DEFINITIONS.........................................................................
ARTICLE 31: OFFER...............................................................................
ARTICLE 32: MISCELLANEOUS.......................................................................
ARTICLE 33: ENTIRE AGREEMENT....................................................................
EXHIBITS .................................................................Listed in Article 1.P
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OFFICE LEASE
THIS OFFICE LEASE ("Lease") is made and entered into as of the 13th day
of November, 1998, by and between CMD PROPERTIES, INC. ("Landlord"), an Illinois
corporation, and RED HAT SOFTWARE, INC. ("Tenant"), a Delaware corporation.
ARTICLE 1: BASIC PROVISIONS
This Article contains the basic lease provisions between Landlord and
Tenant.
A. Building: Located at 2600 Meridian Parkway, Durham,
North Carolina (the "Property", as further
described in Article 30).
B. Premises: Those three (3) certain spaces designated as
"Space A," "Space B" and "Space C," to be
collectively known as "Suite 100,"located on
the 1st floor of the Building as outlined or
crosshatched on EXHIBIT A hereto.
C. Commencement Date: January 15, 1999, subject to Articles
2 and 4 (including later Possession bates
for Space B and Space C per Article 2.D).
D. Expiration Date: January 14, 2004, subject to Articles 2 and
4.
E. Rentable Area: The rentable area of: (i) Space A shall be
deemed to be 25,000 square feet (as further
described in Article 2D), (ii) Space B shall
be deemed to be 18,737 square feet, and
(iii) Space C shall be deemed to be 8,124
square feet, such that the rentable area of
the total Premises shall be deemed to be
51,861 square feet, and the rentable area of
the Property shall be deemed to be 65,401
square feet, for purposes of this Lease,
subject to Article 30. The preceding
measurements were made using the BOMA/ANSI
Standards as of June 7, 1996 and shall not
be subject to remeasurement except as
provided in Article 30 and in Article 2F.
F. Tenant's Share: Sixty-six and 88/100 percent (66.88%) until
the Space C Possession Date; and thereafter,
Seventy-nine and 30/100 percent (79.30%),
subject to Articles 3 and 30.
G. Base Rent: Tenant shall pay monthly Base Rent pursuant
to the following schedule and as described
in Article 3:
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Period Monthly Base Rent
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Commencement Date - 3/31/99 $39,804.08
4/l/99 - 1/14/00 $65,957.81
1/15/00 - 1/14/01 $74,922.94
1/15/01 - 1/14/02 $77,545.24
1/15/02 - 1/14/03 $80,259.32
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1/15/03 - 1/14/04 $83,068.40
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H. Additional Rent: Tenant shall pay Tenant's Share of Taxes
and Expenses in excess of the amounts
respectively for 1999 ("Base Tax Year")
and 1999 ("Base Expense Year"), as further
described in Article 3.
I. Permitted Use: General office use, which shall be deemed
to include, as related uses, a telephone
call center (i.e., a computer "help desk"),
sales and service, research and development,
and a training center, which uses shall be
in connection with Tenant's business and
for its customers and employees, subject to
Article 7.
J. Security Deposit: $65,957.81, subject to Article 16 and
Exhibit 1.
K. Broker (if any): Corporate Realty Advisors and Park City
Developments, Inc., subject to Article 26.
L. Guarantor(s): N/A.
M. Landlord's Notice Address (subject to Article 25):
c/o CMD Realty Investors, Inc., Suite 135,
2500 Meridian Parkway, Durham, North
Carolina 27713, Attn.: Regional Manager;
with copies c/o CMD Realty Investors, Inc.,
227 West Monroe Street, Suite 3900, Chicago,
Illinois 60606, Attn.: General Counsel and
Attn: National Leasing Manager.
N. Tenant's Notice Address (subject to Article 25):
Until the Commencement Date: Red Hat
Software, Inc., 4201 Research Commons, Suite
100, Research Triangle Park, North Carolina
27709. Attn: Manoj George, CFO
On the Commencement Date: Red Hat
Software, Inc., 2600 Meridian Parkway, Suite
100, Durham, North Carolina 27713, Attn:
Chief Financial Officer
With a copy to: Steven 1. Reinhard, Esq.,
Ragsdale, Liggett & Foley, CrossPointe
Plaza, 2840 Plaza Place, Suite 400, Raleigh,
North Carolina 27612.
0. Rent Payments: Rent shall be paid to Landlord c/o The
First National Bank of Chicago, P.O. Box
93150, Chicago, Illinois 60673-3150, or
such other parties and addresses as to
which Landlord shall provide with thirty
(30) days' advance notice.
P. Exhibits: This Lease includes, and incorporates by
this reference:
EXHIBIT A: Premises
EXHIBIT B: Rules
EXHIBIT C: Work Letter
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EXHIBIT D: Parking
EXHIBIT E: Tenant Exterior Sign
EXHIBIT F: Option to Expand
EXHIBIT G: Extension Option
EXHIBIT H: Antenna
EXHIBIT H-1: Area of Roof or Other
Structure Identified
EXHIBIT I: Letter of Credit
Requirements
EXHIBIT I-1: Form of Letter of Credit
EXHIBIT J: Cleaning Specifications
EXHIBIT K: Storage Space
EXHIBIT L: Right of First Offer
The foregoing provisions shall be interpreted and applied in accordance
with the other provisions of this Lease. The terms of this Article, and the
terms defined in Article 30 and other Articles, shall have the meanings
specified therefor when used as capitalized terms in other provisions of this
Lease or related documentation (except as expressly provided to the contrary
therein).
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ARTICLE 2: TERM AND COMMENCEMENT
A. TERM. Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord the Premises for the Term, subject to the other provisions of this
Lease, including the provisions of Paragraph D below respecting later possession
dates for Space B and Space C. The term ("Term") of this Lease shall commence on
the Commencement Date and end on the Expiration Date set forth in Article 1,
unless sooner terminated as provided in this Lease, subject to adjustment as
provided below and the other provisions of this Lease.
B. EARLY COMMENCEMENT. The Commencement Date, Rent and Tenant's other
obligations shall be advanced to such earlier date Tenant, with Landlord's
written permission, commences occupying the Premises for the operation and
conduct of business. If such event occurs with respect to a portion of the
Premises, the Commencement Date, Rent and Tenant's other obligations shall be so
advanced with respect to such portion (and fairly prorated based on the rentable
square footage involved). During any period that Tenant shall be permitted to
enter the Premises prior to the Commencement Date other than to occupy the same
for the operation and conduct of business (e.g., to perform alterations or
improvements), Tenant shall comply with all terms and provisions of this Lease,
except those provisions requiring the payment of Rent. Landlord shall permit
early entry, so long as the Premises are legally available, Landlord has
completed any work required to be performed by Landlord under this Lease (or can
reasonably accommodate the scheduling of minor work Tenant desires to perform,
such as cabling, without delaying any such Landlord work), and Tenant is in
compliance with the other provisions of the Lease, including the insurance
requirements.
C. COMMENCEMENT DELAYS. The Commencement Date (or the Space B
Possession Date or Space C Possession Date, as the case may be), and Rent and
Tenant's other obligations relating thereto shall be postponed to the extent
Tenant is not reasonably able to occupy Space A (or Space B or Space C, as the
case may be) for the operation and conduct of business because Landlord fails,
by the Commencement Date set forth in Article 1 (or the Space B Possession Date
or Space C Possession Date, as the case may be) to: (i) deliver possession and
(ii) substantially complete the improvements required to be performed by
Landlord under Exhibit C to this Lease with respect to the applicable space,
except to the extent that Tenant, its space planners, architects, contractors,
agents or employees in any way contribute to such failure. The substantial
completion referred to in subsection (ii) above, Section 4B of the Lease and in
Exhibit C shall be deemed to have occurred when evidenced by the city of Durham
inspector's issuance of a temporary certificate of occupancy and a certificate
of substantial completion issued by the Architect (as defined in Exhibit C). If
such failure occurs with respect to a portion of the subject space, the
Commencement Date (or the Space B Possession Date or Space C Possession Date, as
the case may be), Rent and Tenant's other obligations shall be so postponed with
respect to such portion (and fairly prorated based on the rentable square
footage involved). Any such delay in the Commencement Date shall not subject
Landlord to liability for loss or damage resulting therefrom, and Tenant's sole
recourse with respect thereto shall be the postponement of Rent and other
obligations described herein, except as follows: (1) If the Commencement Date
has not occurred by January 25, 1999 then beginning on January 25, 1999 and
continuing until the Commencement Date has occurred, the commencement of Base
Rent shall be delayed as provided above and Tenant shall also be entitled one
(1) day of Base Rent abatement for each day of delay of the Commencement Date;
and (2) If the Commencement Date has not occurred by May 17, 1999, Tenant shall
have the right to terminate this Lease by written notice to Landlord given no
later than May 27, 1999; provided, however, that the dates set forth in
subsections (1) and (2) immediately above shall
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be extended by the number of days of delay in the Commencement Date to which
Tenant or its space planners, architects, contractors, agents or employees have
in any way contributed. In the event that Tenant elects not to terminate the
Lease, then the one (1) day of Rent abatement per day of delay as set forth in
subsection (1) above shall cease as of May 17, 1999, and Tenant's only remedy
for further delays in delivery of possession of the Premises shall be the delay
in the commencement of Rent.
D. SPACE B AND SPACE C POSSESSION DATES. Notwithstanding anything to
the contrary contained in this Lease:
(i) Tenant shall not be entitled to use or occupy Space B
until April 1, 1999 ("SPACE B POSSESSION DATE"), unless (a) Tenant elects to
accelerate the Space B Possession Date by written notice to Landlord, (b)
Landlord has substantially completed the Work to Space B as defined in EXHIBIT C
attached hereto, and (c) Tenant shall pay to Landlord additional Base Rent in
the amount of $26,153.73 per month (as and when the Base Rent for Space A is due
for the applicable month provided that Base Rent for any partial month with
respect to Space B shall be paid no later that the date of Tenant's occupancy of
Space B) for the period from the date of occupancy of Space B through March 31,
1999 (prorated on a per diem basis). It is understood and agreed that Space B is
not a fixed block of space but rather, consists of 18,737 rentable square feet
within (i.e. approximately 43% of) the area designated as "Space A and B" in
Exhibit A and which Tenant has agreed not to occupy until the Space B Possession
Date. Tenant agrees to act in good faith in observing the preceding distinction
between Spaces A and B.
(ii) Tenant shall not be entitled to use or occupy Space C
until January 15, 2000 ("SPACE C POSSESSION DATE"), unless (a) Tenant elects to
accelerate the Space C Possession Date by written notice to Landlord, (b)
Landlord has substantially completed the Work to Space C as defined in EXHIBIT C
attached hereto, and (c) Tenant shall pay to Landlord additional Base Rent in
the amount of $6,431.50 per month (as and when the Base Rent for Space A is due
for the applicable month provided that Base Rent for any partial month with
respect to Space C shall be paid no later that the date of Tenant's occupancy of
Space C) for the period from the date of occupancy of Space C through January
14, 2000 (prorated on a per diem basis).
(iii) Until the Space B Possession Date and Space C Possession
Date occur, the Base Rent and Additional Rent under this Lease shall be deemed
to constitute rent with respect to Space A, and additional consideration for
Landlord's agreement not to lease Space B or Space C to any other party, and
instead to include Space B and Space C in the Premises, subject to staged
possession dates as provided herein.
E. ADJUSTMENTS TO DATES, RENTABLE AREAS AND OTHER MATTERS;
CONFIRMATION. If the Commencement Date is advanced to an earlier date as
provided above, the Expiration Date shall not be changed. If the Commencement
Date is postponed as provided above, the Expiration Date shall be extended by
the same length of time and all other specific dates within this Lease
(including Base Rent increases and dates contained within options) shall
likewise be postponed. If the Commencement Date occurs other than on the first
day of a calendar month, then the Term shall be extended so that the Expiration
Date is the last day of the calendar month in which it would otherwise occur,
and the dates for any fixed increases in the Base Rent shall be adjusted so that
they occur on the first day of the calendar month following the month in which
they would otherwise occur. Tenant shall execute a confirmation of any dates
and/or remeasurements and adjustments based on such remeasurements, as adjusted
herein, in such
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form as Landlord may reasonably request; any failure to respond within thirty
(30) days after requested shall be deemed an acceptance of the matters set forth
in Landlord's confirmation. If Tenant disagrees with Landlord's adjustment of
such dates, and/or Landlord's remeasurements and adjustments based on such
remeasurements under Paragraph F below, then Tenant shall pay Rent and perform
all other obligations, in the amounts and on the dates set forth in Article 1,
subject to retroactive and prospective adjustment between the parties promptly
after the matter is resolved.
F. REMEASUREMENT OF PREMISES. Within ten (10) business days after the
substantial completion of the Building, Landlord shall cause the Building, the
Premises and the combined Spaces A and B to be remeasured by a architect
selected by Landlord ("Landlord's Architect"). The remeasurement shall be
performed in accordance with BOMA/ANSI Standards as of June 7, 1996. Landlord
shall provide the results of such remeasurement to Tenant, together with the
architect's calculations therefor with three (3) business days after the
completion of such remeasurement. The results of the remeasurement shall be
provided to Tenant as follows:
(1) total rentable square footage of the Building,
(2) total rentable square footage of the Premises,
(3) total rentable square footage of the combined Spaces A and B,
(4) total rentable square footage of Space C, calculated by subtracting
(3) above from (2) above.
For the purposes of the Lease, the numbers for rentable square feet to
be used for the Building, the Premises and the various parts thereof shall be as
determined by Landlord's Architect.
If Tenant disputes the results of such remeasurement, Landlord and
Tenant shall select an architect (whose fees and costs shall be shared equally
by Landlord and Tenant) mutually and reasonably agreeable to both parties who
shall releaser the various areas set forth above and such architect's decision
shall be final and binding on the parties.
If square footages of the Building, Premises or Spaces A, B or C
changes as the result of remeasurement as provided herein, all relevant square
footage numbers and terms of this Lease relating to such square footage numbers
(including without limitation, Rent, Tenant's Share and Allowances) shall be
appropriately adjusted.
ARTICLE 3: BASE RENT AND ADDITIONAL RENT
A. BASE RENT. Tenant shall pay Landlord the monthly Base Rent set forth
in Article 1 in advance on or before the first day of each calendar month during
the Term; provided, Tenant shall pay Base Rent for the first full calendar month
for which Base Rent shall be due (and any initial partial month) when Tenant
executes this Lease.
B. TAXES AND EXPENSES. Tenant shall pay Landlord Tenant's Share of
Taxes and Expenses in excess of the amounts of Taxes and Expenses respectively
for the Base Tax Year and Base Expense Year in the manner described below. The
foregoing capitalized terms shall have the meanings specified therefor in
Articles 1 and 30.
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C. PAYMENTS.
(i) Landlord may reasonably estimate in advance the amounts Tenant
shall owe for Taxes and Expenses for any full or partial calendar year of the
Term; such estimate shall be made by Landlord in good faith and shall contain a
listing in reasonable detail for categories of Expenses. In such event, Tenant
shall pay such estimated amounts, on a monthly basis, on or before the first day
of each calendar month, together with Tenant's payment of Base Rent. Such
estimate may be reasonably adjusted from time to time by Landlord, but not more
than once per calendar year.
(ii) Within 120 days after the end of each calendar year, or as soon
thereafter as practicable, Landlord shall provide a statement (the "Statement")
to Tenant showing: (a) the amount of actual Taxes and Expenses for such calendar
year, with a listing in reasonable detail of amounts for categories of Expenses,
(b) any amount paid by Tenant towards Taxes and Expenses during such calendar
year on an estimated basis, and (c) any further revised estimate of Tenant's
obligations for Taxes and Expenses for the current calendar year.
(iii) If the Statement shows that Tenant's estimated payments were less
than Tenant's actual obligations for Taxes and Expenses for such year, Tenant
shall pay the difference within thirty (30) days after Landlord sends the
Statement. If the Statement shows that Tenant's estimated payments exceeded
Tenant's actual obligations for Taxes and Expenses, Landlord shall credit the
difference against the payment of Rent next due. If the Term shall have expired
or been terminated and no further Rent shall be due, Landlord shall provide a
refund of such difference at the time Landlord sends the Statement.
(iv) If the Statement shows a further increase in Tenant's estimated
payments for the current calendar year, Tenant shall: (a) thereafter pay the new
estimated amount until Landlord further revises such estimated amount, and (b)
pay the difference between the new and former estimates for the period from
January 1 of the current calendar year through the month in which the Statement
is sent within thirty (30) days after Landlord sends the Statement, provided
that Landlord has sent the Statement by April 30 of the calendar following the
calendar year to which the Statement relates. If Landlord sends the Statement
after April 30 of the calendar following the calendar year to which the
Statement relates, then Tenant's payments shall be as follows: (1) within thirty
(30) days after Landlord sends the Statement, Tenant shall pay the difference
between the new and former estimates for the months of January through April of
the current year, (2) within sixty (60) after Landlord sends the Statement,
Tenant shall pay the difference between the new and former estimates for the
month of May through the month in which Landlord sends the Statement.
(v) Intentionally omitted.
D. TAX REFUNDS, PROTEST COSTS, FISCAL YEARS AND SPECIAL ASSESSMENTS.
Landlord shall each year: (i) credit against Taxes any refunds received during
such year, whether or not for a prior year, (ii) include in Taxes any additional
amount paid during such year involving an adjustment to Taxes for a prior year
due to error by the taxing authority, supplemental assessment, or other reason,
(iii) for Taxes payable in installments over more than one year, include only
the minimum amounts payable each year and any interest thereon, and (iv)
include, in either Taxes or Expenses, any fees for attorneys, consultants and
experts, and other costs paid during such year in attempting to protest, appeal
or otherwise seek to reduce or minimize Taxes, whether or not successful.
Notwithstanding anything to the contrary contained in this Lease, if any taxing
authority, at any time, uses a fiscal year other than a current calendar
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year, Landlord may elect to require payments by Tenant based on: (a) amounts
paid or payable during each calendar year without regard to such fiscal years,
or (b) amounts paid or payable for or during each fiscal tax year.
E. GROSSING UP VARIABLE EXPENSES; TAXES. In order to allocate variable
Expenses (i.e. those items that vary based on occupancy levels, such as
janitorial and utility costs) among those parties who are incurring such
Expenses when the Property is not fully occupied during all or a portion of any
calendar year, Landlord may, in accordance with sound accounting and management
practices, determine the amount of such variable Expenses that would have been
paid had the Property been fully occupied, and the amount so determined shall be
deemed to have been the amount of Expenses for such year (rather than adjusting
Tenant's Share by subtracting vacant space from the denominator); if Landlord
makes such an adjustment to Expenses for any year following the Base Expense
Year, Landlord shall also make such an adjustment to Expenses for the Base
Expense Year. If Landlord adds a new type of expense in a subsequent year that
was not included in the Base Year (e.g. an annual HVAC maintenance contract that
was not needed during the Base Expense Year because of an HVAC warranty), then
Landlord shall make an appropriate adjustment to the Base Expense Year by adding
thereto a reasonable amount to reflect the expense that would have been incurred
if such new type of expense (e.g. such annual HVAC maintenance contract) had
been incurred in the Base Expense Year. Similarly, if Landlord is not furnishing
any particular utility or service (the cost of which, if performed by Landlord,
would be included in Expenses) to a tenant during any period, Landlord may for
such period: (i) adjust Expenses to reflect the additional amount that would
reasonably have been incurred during such period had Landlord furnished such
utility or service to such tenant, or (ii) exclude the rentable area of such
tenant from the rentable area of the Property in computing Tenant's Share of the
component of Expenses for such utility or service.
Landlord shall adjust the Taxes for the Base Tax Year to the amount
that the Taxes would have been for the Base Tax Year if the Building had been
fully occupied and fully improved.
F. PRORATIONS; PAYMENTS AFTER TERM ENDS. If the Term commences on a day
other than the first day of a calendar month or ends on a day other than the
last day of a calendar month, the Base Rent and any other amounts payable on a
monthly basis shall be prorated on a per diem basis for such partial calendar
months. If the Base Rent is scheduled to increase under Article 1 other than on
the first day of a calendar month, the amount for such month shall be prorated
on a per them basis to reflect the number of days of such month at the then
current and increased rates, respectively. If the Term commences other than on
January 1, or ends other than on December 31, Tenant's obligations to pay
amounts towards Taxes and Expenses for such first or final calendar years shall
be prorated on a per diem basis to reflect the portion of such years included in
the Term. Tenant's and Landlord's obligations regarding Taxes and Expenses (or
any other amounts) accruing during, or relating to, the period prior to
expiration or earlier termination of this Lease, shall survive such expiration
or termination.
G. LANDLORD'S ACCOUNTING PRACTICES AND RECORDS. Landlord shall maintain
records respecting Taxes and Expenses and determine the same in accordance with
sound accounting and management practices consistently applied in accordance
with this Lease. Although this Lease contemplates the general computation of
Taxes and Expenses on a cash basis, Landlord shall make reasonable and
appropriate accrual adjustments to ensure that each calendar year includes
substantially the same recurring items. Landlord reserves the right to apply a
full accrual system of accounting so long as the same is consistently applied
and
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Tenant's obligations are not materially adversely affected, and further provided
that Landlord shall continue to pay Expenses and Taxes on a timely basis. Tenant
or its representative (acting on a noncontingent fee basis) shall have the right
to review such records by sending notice to Landlord no later than ninety (90)
days following the furnishing of the Statement specifying such records as Tenant
reasonably desires to review. Such review shall be subject to the continuing
condition that Tenant not be in Default, and subject to reasonable scheduling by
Landlord during normal business hours at the place or places where such records
are normally kept provided that such records shall be kept within the 48
continental United States. No later than ninety (90) days after Landlord makes
such records available for review, Tenant shall send Landlord notice specifying
any exceptions that Tenant takes to matters included in such Statement, Tenant's
detailed reasons for each exception which support a conclusion that such
exception properly identifies an error in such Statement, and a complete copy of
the review report. Such Statement shall be considered final and binding on
Tenant, except as to matters to which exception is taken after review of
Landlord's records in the foregoing manner and within the foregoing times. The
foregoing times for sending Tenant's notices hereunder are critical to
Landlord's budgeting process, and are therefore of the essence of this
Paragraph. If Tenant takes timely exception as provided herein, Landlord may
seek certification from an independent certified public accountant or financial
consultant (who shall be subject to Tenant's reasonable approval) as to the
proper amount of Taxes and Expenses or the items as to which Tenant has taken
exception. In such case: (i) such certification shall be considered final and
binding on both parties (except as to additional amounts not then known or
omitted by error), and (ii) Tenant shall pay Landlord for the cost of such
certification, unless it shows that Tenant's Share of Taxes and Expenses were
overstated by a net amount of three percent (3%) or more, in which event
Landlord shall pay the reasonable cost of such certification provided that such
reasonable cost does not exceed the amount of the overstatement. Pending review
of such records and resolution of any exceptions, Tenant shall pay Tenant's
Share of Taxes and Expenses in the amounts shown on such Statement, subject to
credit, refund or additional payment after any such exceptions are resolved.
H. BASE YEAR ADJUSTMENTS. If Taxes for the Base Tax Year are reduced as
the result of protest or otherwise, Landlord may use the final reduced amount of
Taxes for the Base Tax Year to compute Tenant's obligations for increases in
Taxes during the Term. In such case, Tenant shall pay Landlord, within fifteen
(15) days after notice, any additional amount of Taxes required by such
computation for any period that has theretofore occurred during the Term
following the Base Tax Year. Landlord may exclude from Base Year Expenses any
nonrecurring items, including capital expenditures otherwise permitted under
Article 30 (and shall only include the amortization of such expenditures in
subsequent year Expenses to the extent permitted under Article 30). If Landlord
eliminates from any subsequent year Expenses a recurring category of Expenses
previously included in Base Year Expenses, Landlord may subtract such category
from Base Year Expenses commencing with such subsequent year.
I. GENERAL PAYMENT MATTERS. Base Rent, Taxes, Expenses and any other
amounts which Tenant is or becomes obligated to pay Landlord under this Lease or
other agreement entered in connection herewith are sometimes herein referred to
collectively as "Rent," and all remedies applicable to the nonpayment of rent
shall be applicable thereto. Tenant shall pay Rent in good funds and legal
tender of the United States of America, together with any applicable sales tax
or other taxes on Rent as further described in Article 14. Tenant shall pay Rent
without any deduction, recoupment, setoff or counterclaim, and without relief
from any valuation or appraisement laws, except as may be expressly provided in
this Lease. No delay by Landlord in providing the Statement shall be deemed a
default by Landlord or, unless Landlord fails to provide the Statement within
one (1) calendar year following the close of
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the calendar year to which the Statement relates, a waiver of Landlord's right
to require payment of Tenant's obligations for actual or estimated Taxes or
Expenses. In no event shall a decrease in Taxes or Expenses serve to decrease
Base Rent. Landlord may apply payments received from Tenant to any obligations
of Tenant then accrued, without regard to such obligations as may be designated
by Tenant.
ARTICLE 4: CONDITION OF PREMISES
A. GENERAL CONDITION OF PREMISES. Tenant has inspected, or had an
opportunity to inspect, the Premises (and portions of the Property, Systems and
Equipment providing access to or serving the Premises), and agrees to accept the
same "as is" without any agreements, representations, understandings or
obligations on the part of Landlord to perform any alterations, repairs or
improvements, except as may be expressly provided under this Lease (which term
includes any Exhibit hereto). To the extent that Landlord has expressly agreed
to perform any improvements to the Premises under this Lease, the following
provisions shall apply.
Landlord warrants and represents that, as of the date that Landlord
delivers possession of the Premises to Tenant: (1) the Systems and Equipment
serving the Property and the systems and equipment serving the Premises (to the
extent that the same are part of the Work under Exhibit C) shall be in good
working order, (2) the Building and the Premises have been constructed in a good
and workmanlike manner, so as to be free of defects, and (3) the common areas of
the Building shall comply with all Laws, including, but not limited to, the
Americans with Disabilities Act. Landlord's sole liability for breach of any of
the foregoing warranties shall be the obligation to make such repairs or
alterations to the Property and the Premises as are necessary to cure the
violation of the warranty.
B. IMPROVEMENTS. With respect to the improvements to the Premises that
Landlord is required to perform under EXHIBIT C to this Lease: (i) Landlord
shall use diligent, good faith efforts to substantially complete any such
improvements to an extent that Tenant can reasonably occupy the Premises for the
operation and conduct of business by the Commencement Date set forth in Article
1, subject to Article 2 and the other provisions of this Lease, (ii) Tenant
shall use diligent, good faith efforts to cooperate, and to cause its space
planners, architects, contractors, agents and employees to cooperate, diligently
and in good faith with Landlord and any space planners, architects, contractors
or other parties designated by Landlord, such that any such improvements to the
Premises can be planned, permits can be obtained, and the work can be
substantially completed by the Commencement Date set forth in Article 1, and
(ii) the Commencement Date, Rent and Tenant's other obligations shall be subject
to postponement as further described in Article 2. In the event of any dispute
as to whether any such improvements have been substantially completed, Landlord
shall refer the matter to a third party mutually and reasonably agreeable to
both Landlord and Tenant whose decision shall be final and binding on the
parties.
ARTICLE 5: QUIET ENJOYMENT
Landlord agrees that, if Tenant timely pays the Rent and performs the
terms and provisions hereunder, Tenant shall hold and enjoy the Premises during
the Term free of lawful claims by any party acting by or through Landlord,
subject to all other terms and provisions of this Lease.
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ARTICLE 6: UTILITIES AND SERVICES
A. STANDARD LANDLORD UTILITIES AND SERVICES. Landlord shall provide the
following utilities and services (the cost of which shall be included in
Expenses):
(i) Heat and air-conditioning to provide a temperature required, in
Landlord's reasonable opinion and in accordance with applicable Law, for
occupancy of the Premises as offices during Building Hours (as defined in
Article 30).
(ii) Water from city mains for drinking, lavatory and toilet purposes
only, at those points of supply provided for nonexclusive general use of tenants
at the Property, or points of supply in the Premises installed by or with
Landlord's written consent for such purposes.
(iii) Cleaning and trash removal in and about the Premises
substantially in accordance with the specifications attached hereto as Exhibit
J.
(iv) Passenger elevator service at all times (if the Property has such
equipment serving the Premises, and subject to changes in the number of
elevators in service after Building Hours or at other times), and freight
elevator service (if the Property has such equipment serving the Premises, and
subject to scheduling by Landlord), in common with Landlord and other parties.
(v) Electricity for building standard overhead office lighting
fixtures, and equipment and accessories customary for offices, where: (a) Tenant
uses an amount of electricity that is generally consistent with average office
use at the Property, as reasonably determined by Landlord, (b) the Systems and
Equipment are suitable, and the safe and lawful capacity thereof is not
exceeded, and (c) sufficient capacity remains at all times for other existing
and future tenants, as reasonably determined by Landlord. Landlord shall include
in Expenses the cost of replacement of lamps, starters and ballasts for Building
standard lighting fixtures within the Premises; Tenant shall pay such costs for
non-Building standard lighting fixtures within the Premises.
(vi) Sprinklering of the Building in accordance with
applicable Laws.
(vii) Landscaping and snow removal services comparable to those
provided as standard services by landlords for office space in comparable
buildings in the vicinity.
B. ADDITIONAL UTILITIES AND SERVICES. Landlord shall seek to provide
such extra utilities. or services as Tenant may from time to time request, if
the same are reasonable and feasible for Landlord to provide and do not involve
modifications or additions to the Property or existing Systems and Equipment,
and if Landlord shall receive Tenant's request within a reasonable period prior
to the time such extra utilities or services are required. Landlord may comply
with written or oral requests by any officer or employee of Tenant, unless
Tenant shall notify Landlord of, or Landlord shall request, the names of
authorized individuals (up to 3 for each floor on which the Premises are
located) and procedures for written requests. Tenant shall pay for the actual
cost to Landlord of any extra utilities or services, including Landlord's
actual, reasonable out-of-pocket costs for architects, engineers, consultants
and other parties relating to such extra utilities or services, and a fee equal
to five percent (5%) of such costs. All payments for such extra utilities or
services shall be due at the same time as the installment of
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Base Rent with which the same are billed, or if billed separately, shall be due
within fifteen (15) days after such billing. Landlord shall not be responsible
for inadequate air-conditioning or ventilation whenever the use or occupancy of
the Premises exceeds the normal capacity or design loads of, affects the
temperature or humidity otherwise maintained by, or otherwise adversely affects
the operation of, the Systems and Equipment for the Property, whether due to
items of equipment or machinery generating heat, above normal concentrations of
personnel or equipment, or alterations to the Premises made by or through Tenant
without balancing the air or installing supplemental HVAC equipment. In any such
case, Landlord may elect to balance the air and/or install, operate, maintain
and replace such supplemental HVAC equipment during the Term, at Tenant's
expense, as an extra utility or service (or require that Tenant arrange for the
same as Work under Article 9). Notwithstanding the foregoing to the contrary, in
lieu of charging separately for additional utilities and services, Landlord may
reasonably elect from time to time to expand the amounts of services and
utilities available without separate charge, in which case the costs thereof
shall be included in Expenses, subject to the following sentence. In the event
that, in any calendar year, any increase in Expenses resulting from the
expansion of the amounts of services and utilities included in Expenses pursuant
to the preceding sentence is estimated to exceed $0.50 per rentable square foot
in the aggregate in any calendar year, then Landlord shall be required to obtain
Tenant's approval (which shall not be unreasonably withheld, conditioned or
delayed) of any amounts exceeding $0.50 per rentable square foot, provided that
this sentence shall not apply to: (1) any increase in Expenses due to a
reasonable increase in normal Building hours, and (2) any increase in Expenses
due to changes in how a service or utility already included in Expenses is
furnished.
Notwithstanding anything to the contrary contained herein, it is
understood and agreed by the parties that, due to the size and manner of design
of the Building, HVAC services shall be available at all times without
additional charge therefor (other than as part of Expenses), except that
Landlord reserves the right pursuant to Article 6A(v) above to determine in a
reasonable manner and charge Tenant for the cost of electricity used by Tenant
in excess of average office use. If Tenant disputes the excess electricity
charges as determined by Landlord, Tenant shall have the right, at Tenant's
expense, to engage a consultant to provide another determination of such charges
and Landlord agrees to reasonably and in good faith consider the merit and
accuracy of such alternative determination in making its final determination of
the excess electricity charges.
C. MONITORING. Landlord may install and operate meters, submeters or
any other reasonable system for monitoring or estimating any services or
utilities used by Tenant in excess of those required to be provided by Landlord
under this Article (including a system for Landlord's engineer to reasonably
estimate any such excess usage). If such system indicates such excess services
or utilities, Tenant shall pay Landlord's charges and fees as described in
Paragraph B above for installing and operating such system and any supplementary
air-conditioning, ventilation, heat, electrical or other systems or equipment
(or adjustments or modifications to the existing Systems and Equipment) which
Landlord may make, and Landlord's charges for such amount of excess services or
utilities used by Tenant.
D. INTERRUPTIONS AND CHANGES. Landlord shall have no liability for
interruptions, variations, shortages, failures, changes in quality, quantity,
character or availability of any utilities or services caused by repairs,
maintenance, replacements, alterations (including any freon retrofit work),
labor controversies, accidents, inability to obtain services, utilities or
supplies, governmental or utility company acts or omissions, requirements,
guidelines or requests, or other causes beyond Landlord's reasonable control (or
under any circumstances with respect to utilities or services not required to be
provided by Landlord hereunder). Under
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no circumstances whatsoever shall any of the foregoing be deemed an eviction or
disturbance of Tenant's use and possession of the Premises or any part thereof,
serve to abate Rent, or relieve Tenant from performance of Tenant's obligations
under this Lease; provided, however, after Landlord's receipt of notice,
Landlord shall act reasonably and in good faith to cure the interruption or
curtailment of services or utilities as soon as practicable thereafter.
E. ABATEMENT OF RENT. Notwithstanding Paragraph D above to the
contrary, if (a) any services or utilities required to be provided by Landlord
hereunder are interrupted or discontinued as a result of Landlord's negligence
(and not caused by Tenant or its employees, agents or contractors), and Tenant
is unable to and does not use, the Premises as a result of such interruption or
discontinuance, and (b) Tenant shall have given written notice respecting such
interruption or discontinuance to Landlord, and Landlord shall have failed to
cure such interruption or discontinuance within five (5) consecutive business
days after receiving such notice, Base Rent hereunder shall thereafter be abated
until such time as such services or utilities are restored or Tenant begins
using, the Premises again, whichever shall first occur. Notwithstanding anything
to the contrary contained herein, if Tenant, or its contractors, or their
respective officers, employees, contractors, invitees or agents, delay Landlord
in restoring the utilities or services, Landlord shall have additional time to
complete the restoration equal to such delay and Tenant shall pay Landlord all
Rent for the period of such delay.
ARTICLE 7: USE, COMPLIANCE WITH LAWS, AND RULES
A. USE OF PREMISES. Tenant shall use the Premises only for the
permitted use identified in Article 1, and no other purpose whatsoever, subject
to the other provisions of this Article and this Lease. Unless expressly
permitted in Article 1. Tenant shall not use or permit the Premises to be used
as a: (1) social welfare office, (ii) medical, dental, psychology, psychiatry,
or science office or laboratory, (iii) multiparty "executive" or "legal" suite
type offices, (iv) data processing, telecommunications or telemarketing center,
(v) school, educational or training facility, (vi) employment, placement,
recruiting or clerical support agency, (vii) computerized vehicle sales, loan or
"findee" service, (viii) governmental, quasi-governmental trade association or
union office or activities, (ix) travel agency or reservation center, (x) radio
or television studio or broadcasting or recording facility, or (xi) retail real
estate brokerage, retail stock brokerage, retail bank or other retail financial
institution, loan office, depository, check-cashing or wire transferring
service.
B. COMPLIANCE WITH LAWS. Subject to Section 4A and except to the extent
that such compliance is allocated to Landlord elsewhere under this Lease, the
Tenant shall comply with all Laws relating to the Premises and Tenant's use of
the Premises and Property, and shall promptly reimburse (within thirty (30) days
after Tenant's receipt of Landlord's invoice) Landlord for any expenses Landlord
incurs for work or other matters relating to areas outside of the Premises in
order to comply with Laws as a result of Tenant's use of the Premises or
Property; provided, Tenant shall not be required by this provision to perform
structure or capital improvements to the Premises unless required by a Law
pertaining to, (i) Tenant's particular use of the Premises (as opposed to a Law
that applies to office tenants in general), (ii) work performed by or for Tenant
or any Transferee (i.e. excluding any improvements in work that Landlord is
required to perform under this Lease), or (iii) other acts or omissions of
Tenant or any Transferee.
Landlord shall comply with all Laws affecting the structure or common
areas of the Property (the cost of which shall be included in Expenses, but only
to the extent permitted in the definition thereof in Article 30), except to the
extent that such compliance is Tenant's
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responsibility under this Lease or is the responsibility of another occupant of
the Property. To best of Landlord's actual knowledge as of the date of this
Lease and as of the Commencement Date, there are no current violations of Laws
affecting the Premises or Tenant's use of the Property.
C. RULES. Tenant shall comply with the Rules set forth in EXHIBIT B
attached hereto (the "Rules"). Landlord shall have the right, by notice to
Tenant, to reasonably amend such Rules and supplement the same with other
reasonable Rules relating to the Property, or the promotion of safety, care,
efficiency, cleanliness or good order therein provided that such amended Rules
are not contrary to this Lease. Although Landlord shall not discriminate against
Tenant in the enforcement of the Rules, nothing herein shall be construed to
give Tenant or any other Person any claim, demand or cause of action against
Landlord arising out of the violation of Laws or the Rules by any other tenant
or visitor of the Property, or out of the enforcement, modification or waiver of
the Rules by Landlord in any particular instance.
D. OTHER REQUIREMENTS. So long as Tenant receives written notification
of the applicable requirements, Tenant shall not use or permit the Premises or
Property to be used in a way that will: (i) violate the requirements of
Landlord's insurers, the American Insurance Association, or any board of
underwriters, (ii) cause a cancellation of Landlord's policies, impair the
insurability of the Property, or increase Landlord's premiums (any such increase
shall be paid by Tenant without such payment being deemed permission to continue
such activity or a waiver of any other remedies of Landlord), or (iii) violate
the requirements of any certificates of occupancy issued for the Premises or the
Property, or any other requirements, covenants, conditions or restrictions
affecting the Property at any time (provided none of the foregoing shall
prohibit or materially impair use of the Premises as set forth in Article 1 in
compliance with the other provisions of this Lease and the enjoyment of the
other rights accorded to Tenant under this Lease). Landlord hereby warrants that
the Plans for initial construction of the Property have been approved under that
certain Declaration of Covenants, Conditions, Restrictions and Easements of the
Meridian Business Campus filed with the Durham County Register of Deeds in Book
1235, pages 404 through 437 and Book 2285, pages 810-815.
E. ANTENNA. Landlord agrees that Tenant shall have the right to install
an antenna on the roof of the Building provided that the parties enter into an
amendment to the Lease substantially in the form of Exhibits H and H-1 which are
attached hereto and made a part hereof. The size, location and other matters
relating to the antenna shall be subject to Landlord's approval as further set
forth in Exhibit H.
ARTICLE 8: MAINTENANCE AND REPAIRS
Except for customary cleaning and trash removal provided by Landlord
under Article 6, casualty damage to be repaired by Landlord under Article 11 and
any other obligation of Landlord hereunder. Tenant shall keep and maintain (or
cause to be kept and maintained) the Premises in good and sanitary condition,
working order and repair, in compliance with all applicable Laws as described in
Article 7, and as required under other provisions of this Lease, including the
Rules (including any carpet and other flooring material, paint and
wall-coverings, doors, windows, ceilings, interior surfaces of walls, lighting,
plumbing and other fixtures, alterations, improvements, and systems and
equipment in or exclusively serving the Premises whether installed by Landlord
or Tenant). In the event that any repairs, maintenance or replacements are
required, Tenant shall promptly notify Landlord and arrange for the same either:
(i) through Landlord for such reasonable charges as Landlord may establish from
time to time, payable within fifteen (15) days after billing, or (ii) at
Tenant's option, by engaging such
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contractors or staff as Landlord shall first designate or approve in writing to
perform such work, all in a first class, workmanlike manner approved by Landlord
in advance in writing and otherwise in compliance with Article 9 respecting
"Work". Tenant shall promptly notify Landlord concerning the necessity for any
repairs or other work hereunder and upon completion thereof. Tenant shall pay
Landlord for any repairs, maintenance and replacements to areas of the Property
outside the Premises caused, in whole or in part, as a result of moving any
furniture, fixtures, or other property to or from the Premises, or otherwise by
Tenant or its employees, agents, contractors, or visitors (subject to Article
10C). Except as provided in the preceding sentence, or for damage covered under
Article 11, Landlord shall keep the roof, structure, Systems and Equipment, and
common areas of the Property in good and sanitary condition, working order and
repair (the cost of which shall be included in Expenses to the extent permitted
in the definition thereof in Article 30).
ARTICLE 9: ALTERATIONS AND LIENS
A. ALTERATIONS AND APPROVAL. Tenant shall not attach any fixtures,
equipment or other items to the Premises, or paint or make any other additions,
changes, alterations or improvements to the Premises or the Systems and
Equipment serving the Premises (all such work is referred to collectively herein
as the "Work"), without the prior written consent of Landlord. Landlord shall
not unreasonably withhold, condition or delay consent, except that Landlord
reserves the right to withhold consent in Landlord's sole discretion for Work
affecting the structure, safety, efficiency or security of the Property or
Premises, the Systems and Equipment, or the appearance of the Premises from any
common or public areas. Landlord may only require removal of Work installed by
or for Tenant as provided under Article 23.
Notwithstanding the foregoing to the contrary, Tenant may perform minor
Work in the Premises without Landlord's consent, and without paying Landlord's
fee described below (but subject to paying Landlord's out-of-pocket costs as
described below), provided: (i) such work shall be primarily cosmetic in nature
(i.e. shall primarily consist of paint, carpeting and/or wallcoverings), shall
not affect the Systems or Equipment, and shall not affect the structure of the
Property, (ii) Tenant shall give reasonable advance notice to, and shall
coordinate the scheduling of such work with, Landlord, (iii) such Work shall not
cost more than $100,000 in the aggregate in any twelve (12) month period, and
(iv) such Work shall be subject to all other provisions of this Lease,
including, but not limited to, the other provisions of this Article (other than
Paragraph B), and the Rules attached hereto as EXHIBIT B.
B. APPROVAL CONDITIONS. Landlord reserves the right to impose
reasonable requirements as a condition of such consent or otherwise in
connection with the Work, including requirements that Tenant: (i) use parties
contained on Landlord's approved list (if reputable and available on
commercially reasonable terms) or submit for Landlord's prior written approval
the names, addresses and background information concerning all architects,
engineers, contractors, subcontractors and suppliers Tenant proposes to use,
(ii) submit for Landlord's written approval detailed plans and specifications
prepared by licensed and competent architects and engineers, (iii) obtain and
post permits, (iv) provide additional insurance, bonds (or evidence reasonably
satisfactory to Landlord that the contractor(s) to be used by Tenant are
bondable) and/or other reasonable security and/or documentation protecting
against damages, liability and liens, (v) use union labor (if Landlord uses
union labor in the Durham area or if the use of nonunion labor would cause
strikes, picketing, boycotts or other labor disturbances, disputes or unrest at
the Property or at Landlord's other buildings in the Durham area), (vi) permit
Landlord or its representatives to inspect the Work at reasonable times, and
(vii) comply
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with such other reasonable requirements as Landlord may impose concerning the
manner and times in which such Work shall be done. Landlord may require that all
Work be performed under Landlord's supervision. If Landlord consents, inspects,
supervises, recommends or designates any architects, engineers, contractors,
subcontractors or suppliers, the same shall not be deemed a warranty as to the
adequacy of the design, workmanship or quality of materials, or compliance of
the Work with the plans and specifications or any Laws.
C. PERFORMANCE OF WORK. All Work shall be performed: (i) in a
thoroughly first class, professional and workmanlike manner, (ii) only with
materials that are new, high quality, and free of material defects, (iii) only
by parties, and strictly in accordance with plans, specifications, and other
matters, approved or designated by Landlord in advance in writing, (iv) so as
not to adversely affect the Systems and Equipment or the structural components
of the Property, (v) diligently to completion and so as to avoid any
disturbance, disruption or inconvenience to other tenants and the operation of
the Property, and (vi) in compliance with all Laws, the Rules and other
provisions of this Lease, and such other reasonable requirements as Landlord may
impose concerning the manner and times in which such Work shall be done. Any
floor, wall or ceiling coring work or penetrations or use of noisy or heavy
equipment, any of which occurs at or near a demising wall and which may
interfere with the conduct of business by other tenants at the Property shall,
at Landlord's option, be performed at times other than Building Hours (at
Tenant's sole cost). If Tenant fails to perform the Work as required herein or
the materials supplied fail to comply herewith or with the specifications
approved by Landlord, and Tenant fails to cure such failure within 48 hours
after written or oral notice by Landlord (except notice shall not be required in
emergencies), Landlord shall have the right to stop the Work until such failure
is cured (which shall not limit Landlord's other remedies and shall not serve to
abate the Rent or Tenant's other obligations under this Lease). Upon completion
of any Work hereunder, Tenant shall provide Landlord with "as built" plans,
copies of all construction contracts, and proof of payment for all labor and
materials.
D. LIENS. Tenant shall pay all costs for the Work when due. Tenant
shall keep the Property, Premises and this Lease free from any mechanic's,
materialman's, architect's, engineer's or similar liens or encumbrances, and any
claims therefor, or stop or violation notices, in connection with any Work.
Tenant shall give Landlord notice at least ten (10) days prior to the
commencement of any Work (or such additional time as may be necessary under
applicable Laws), to afford Landlord the opportunity of posting and recording
appropriate notices of nonresponsibility. Tenant shall remove any such claim,
lien or encumbrance, or stop or violation notices of record, by bond or
otherwise within thirty (30) days after notice by Landlord. If Tenant fails to
do so, Landlord may pay the amount (or any portion thereof) or take such other
action as Landlord deems necessary to remove such claim, lien or encumbrance, or
stop or violation notices, without being responsible for investigating the
validity thereof. The amount so paid and costs incurred by Landlord shall be
deemed additional Rent under this Lease payable upon demand, without limitation
as to other remedies available to Landlord. Nothing contained in this Lease
shall authorize Tenant to do any act which shall subject Landlord's title to, or
any Lender's interest in, the Property or Premises to any such claims, liens or
encumbrances, or stop or violation notices, whether claimed pursuant to statute
or other Law or express or implied contract.
E. LANDLORD'S FEES AND COSTS. Except as specifically provided to the
contrary in Exhibit C, Tenant shall pay Landlord a fee for reviewing,
scheduling, monitoring, supervising, and providing access for or in connection
with the Work, in an amount equal to five percent (5%) of the total cost of the
Work (including costs of plans and permits therefor), and Landlord's
out-of-pocket costs, including any costs for security, utilities, trash removal,
temporary barricades,
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janitorial, engineering, architectural or consulting services, and other matters
in connection with the Work, payable within fifteen (15) days after billing.
ARTICLE 10: INSURANCE, SUBROGATION, AND WAIVER OF CLAIMS
A. REQUIRED INSURANCE. Tenant shall maintain during the Term: (i)
commercial general liability ("CGL") insurance, with limits of not less than
$1,000,000 for personal injury, bodily injury or death, and property damage or
destruction (including loss of use thereof, combined single limit, for any one
occurrence, and $2,000,000 in the aggregate per policy year, with endorsements
(a) for contractual liability covering Tenant's indemnity obligations under this
Lease, and (b) adding Landlord, the management company for the Property, and
other parties reasonably designated by Landlord, as additional insureds, and
(ii) primary, noncontributory, extended coverage or "allrisk" property damage
insurance (including installation floater insurance during any alterations or
improvements that Tenant makes to the Premises after the improvements made
pursuant to Exhibit C) covering any alterations or improvements beyond any work
or allowance provided by Landlord under this Lease (provided that Tenant shall
be required to insure improvements made pursuant to Exhibit C only to the extent
that the cost of such improvements exceeds $2.00 per rentable square foot over
the Allowance given by Landlord pursuant to Exhibit C, as further set forth
below), and Tenant's personal property, business records, fixtures and
equipment, for damage or other loss caused by fire or other casualty or cause
including, but not limited to, vandalism and malicious mischief, theft, water
damage of any type, including sprinkler leakage, bursting or stoppage of pipes,
explosion, business interruption (for at least nine (9) months), and other
insurable risks in amounts not less than the full insurable replacement value of
such property and full insurable value of such other interests of Tenant
(subject to reasonable deductible amounts).
B. CERTIFICATES AND OTHER MATTERS. Tenant shall provide Landlord with
certificates evidencing the coverage required hereunder prior to the
Commencement Date, or Tenant's entry to the Premises for delivery of materials
or construction of improvements or any other purpose (whichever first occurs).
Such certificates shall state that such insurance coverage may not be reduced,
canceled or allowed to expire without at least thirty (30) days' prior written
notice to Landlord, and shall include, as attachments, originals of the
additional insured endorsements to Tenant's CGL policy required above. Tenant
shall provide renewal certificates to Landlord at least thirty (30) days prior
to expiration of such policies. Except as provided to the contrary herein, any
insurance carried by Landlord or Tenant shall be for the sole benefit of the
party carrying such insurance. Tenant's insurance policies shall be primary to
all policies of Landlord and any other additional insureds (whose policies shall
be deemed excess and noncontributory). All insurance required hereunder shall be
provided by responsible insurers licensed in the State in which the Property is
located, and shall have a general policy holders rating of at least A and a
financial rating of at least X in the then current edition of Best's Insurance
Reports. Landlord disclaims any, representation as to whether the foregoing
coverages will be adequate to protect Tenant.
C. MUTUAL WAIVER OF CLAIMS AND SUBROGATION. Notwithstanding anything to
the contrary contained in this Lease (including indemnity provisions), the
parties hereby mutually hereby waive all claims against each other for all
losses covered or required to be covered hereunder by their respective insurance
policies, and waive all rights of subrogation of their respective insurers; for
purposes hereof, any deductible amount shall be treated as though it were
recoverable under such policies. SUCH MUTUAL WAIVER OF CLAIMS SHALL APPLY
REGARDLESS OF THE NEGLIGENCE OR GROSS NEGLIGENCE OF THE OTHER PARTY
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OR ITS AFFILIATES, AGENTS OR EMPLOYEES. The parties agree that their respective
insurance policies are now, or shall be, endorsed such that said waiver of
subrogation shall not affect the right of the insured to recover thereunder.
D. LANDLORD'S INSURANCE. Landlord agrees to maintain, as part of
Expenses, during the Term, commercial general liability insurance, and property
damage insurance on the Property covering such risks and in such amounts as
Landlord shall deem commercially reasonable, and such other insurance as
Landlord shall deem commercially reasonable (subject to such deductibles,
self-insurance retention amounts, blanket and umbrella policy arrangements or
other features as Landlord deems commercially reasonable); provided, (i) such
commercial general liability insurance shall be at least One Million Dollars
($1,000,000.00) per occurrence and Two Million Dollars ($2,000,000.00) general
aggregate, and (ii) such property damage insurance shall cover the Building, and
leasehold improvements to the extent provided or paid for by Landlord (provided
that Landlord shall be required to insure improvements made pursuant to Exhibit
C to the extent that the cost of such improvements does not exceed $2.00 per
rentable square foot over the Allowance given by Landlord pursuant to Exhibit
C), and shall be in the amount of the full replacement cost, excluding
basements, footings and foundations (subject, in each case, to such deductibles,
self-insurance retention amounts, blanket and umbrella policy arrangements or
other features as Landlord deems commercially reasonable).
ARTICLE II: CASUALTY DAMAGE
A. RESTORATION. Tenant shall promptly notify Landlord of any damage to
the Premises by fire or other casualty. If the Premises or any common areas of
the Property providing access thereto shall be damaged by fire or other
casualty, Landlord shall use available insurance proceeds and diligently proceed
in good faith to restore the same. Such restoration shall be to substantially
the same condition as prior to the casualty, except for modifications required
by zoning and building codes and other Laws or by any Lender, any other
modifications to the common areas deemed desirable by Landlord (provided access
to the Premises is not materially impaired), and except that Landlord shall not
be required to repair or replace any of Tenant's furniture, furnishings,
fixtures, systems or equipment, or any alterations or improvements in excess of
the improvements made pursuant to Exhibit C which Landlord is required to insure
pursuant to Section 10D above. Tenant shall reasonably cooperate in approving
any plans for repairs to the Premises hereunder, and in vacating the Premises to
the extent reasonably required to avoid any interference or delay in Landlord's
repair work. Promptly following completion of Landlord's work, Tenant shall
repair and replace Tenant's furniture, furnishings, fixtures, systems or
equipment, and any alterations or improvements made by Tenant in excess of those
provided by Landlord, subject to and in compliance with the other provisions of
this Lease.
B. ABATEMENT OF RENT. Landlord shall not be liable for any
inconvenience or annoyance to Tenant or its visitors, or injury to Tenant's
business resulting in any way from such damage or the repair thereof. However,
Landlord shall allow Tenant a proportionate abatement of Rent from the date of
the casualty through the date that Landlord substantially completes Landlord's
repair obligations hereunder (or the date that Landlord would have substantially
completed such repairs, but for delays by Tenant or any other occupant of the
Premises, or any of their agents, employees, invitees, Transferees and
contractors), provided such abatement: (i) shall apply only to the extent the
Premises are untenantable for the purposes permitted under this Lease and not
used by Tenant as a result thereof, based proportionately on the square footage
of the Premises so affected and not used, and (ii) shall not apply if Tenant or
any other
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occupant of the Premises, or any of their agents, employees, invitees,
Transferees or contractors were negligent in causing the damage.
C. TERMINATION OF LEASE BY LANDLORD. Notwithstanding the foregoing to
the contrary, in lieu of performing the restoration work, Landlord may elect to
terminate this Lease by notifying Tenant in writing of such termination within
sixty (60) days after the date of damage (such termination notice to specify the
basis for termination and to include a termination date providing at least
thirty (30) days for Tenant to vacate the Premises), if the Property shall be
materially damaged by the negligence or intentional misconduct of Tenant or any
other occupant of the Premises, or any of their agents, employees, invitees,
Transferees or contractors, or if the Property shall be damaged by fire or other
casualty or cause such that: (i) repairs to the Premises and access thereto
cannot reasonably be completed within 120 days after the casualty without the
payment of overtime or other premiums, (ii) more than twenty-five percent (25%)
of the Premises is affected by the damage and fewer than twenty-four (24) months
remain in the Term, or any material damage occurs to the Premises during the
last twelve (12) months of the Term, unless, in either event, Tenant elects to
irrevocably exercise the extension option set forth in Exhibit G, (iii) any
Lender shall require that the insurance proceeds or any material portion thereof
be used to retire the Mortgage debt (or shall terminate the ground lease, as the
case may be), provided, however, that Landlord shall use commercially reasonable
efforts to cause the Lender to permit such insurance proceeds to be used for
restoration of the Property, or the damage is not fully covered, except for
reasonable deductible amounts, by Landlord's insurance policies, or (iv) the
cost of the repairs, alterations, restoration or improvement work would exceed
thirty-five percent (35%) of the replacement value of the Building (whether or
not the Premises are affected by the damage). Tenant agrees that the abatement
of Rent provided herein shall be Tenant's sole recourse in the event of such
damage, and waives any other rights Tenant may have under any applicable Law to
perform repairs or terminate the Lease by reason of damage to the Premises or
Property.
D. TERMINATION OF LEASE BY TENANT. Notwithstanding Paragraph C above to
the contrary, Tenant may terminate this Lease if Tenant is unable to use all or
a substantial portion of the Premises as a result of fire or other casualty not
caused by the negligence or intentional misconduct of Tenant or its employees or
agents, and: (i) Landlord fails to commence the restoration work within sixty
(60) days after the casualty, (ii) such work is estimated (which estimate
Landlord shall provide within sixty (60) days following the casualty) to take
(without the use of overtime labor or other premiums) more than 120 days to
complete after the casualty, (iii) Landlord fails to substantially complete the
repairs to the Premises and access thereto within 180 days after the casualty,
(iv) more than 50% of the Premises is affected by the damage, and fewer than 24
months remain in the Term, or (v) more than 25% of the Premises is affected by
the damage, and fewer than 12 months remain in the Term. In order to exercise
any of the foregoing termination rights, Tenant must send Landlord at least
sixty (60) days (but not more than 120 days) advance notice specifying the basis
for termination, and such notice must be given no later than fifteen (15) days
following the occurrence of the condition serving as the basis for the
termination right invoked by Tenant. Such termination rights shall not be
available to Tenant if: (a) Landlord substantially completes the repairs to the
Premises and access thereto within thirty (30) days after Tenants notice.
Notwithstanding anything to the contrary contained herein, if Tenant, or its
officers, employees, contractors, invitees or agents delay Landlord in
performing the repairs, Landlord shall have additional time to complete the work
equal to such delay and Tenant shall pay Landlord all Rent for the period of
such delay.
E. TERM. The word "Term" as used in this Article 11, subclauses C and D
shall include any extension or renewal period duly exercised by Tenant pursuant
to any express
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option granted to Tenant under or in connection with this Lease; such option may
be exercised before or after the casualty, so long as it is duly exercised
pursuant to the terms and within the time periods specified in the provision
granting such option to extend or renew.
ARTICLE 12: CONDEMNATION
If at least fifty percent (50%) of the rentable area of the Premises
shall be taken by power of eminent domain or condemned by a competent authority
or by conveyance in lieu thereof for public or quasi-public use
("Condemnation"), including any temporary taking for a period of one year or
longer, this Lease shall terminate on the date possession for such use is so
taken. If: (i) less than fifty percent (50%) of the Premises is taken, but the
taking includes or affects a material portion of the Building or Property, or
the economical operation thereof, or (ii) the taking is temporary and will be in
effect for less than one year but more than thirty (30) days, then in either
such event, Landlord may elect to terminate this Lease upon at least thirty (30)
days' prior notice to Tenant. The parties further agree that: (a) if this Lease
is terminated, all Rent shall be apportioned as of the date of such termination
or the date of such taking, whichever shall first occur, (b) if the taking is
temporary, Rent shall not be abated for the period of the taking, but Tenant may
seek a condemnation award therefor (and the Term shall not be extended thereby),
and (c) if this Lease is not terminated but any part of the Premises is
permanently taken, the Rent shall be proportionately abated based on the square
footage of the Premises so taken. Landlord shall be entitled to receive the
entire award or payment in connection with such Condemnation and Tenant hereby
assigns to Landlord any interest therein for the value of Tenant's unexpired
leasehold estate or any other claim and waives any right to participate therein,
except that Tenant shall have the right to file any separate claim available to
Tenant for a temporary taking of the leasehold as described above, and for
moving expenses and any taking of Tenant's personal property, provided such
award is separately payable to Tenant and does not diminish the award available
to Landlord or any Lender.
ARTICLE 13: ASSIGNMENT AND SUBLETTING
A. TRANSFERS. Tenant shall not, without the prior written consent of
Landlord, which consent shall not be unreasonably withheld, conditioned or
delayed as further described below: (i) assign, mortgage, pledge, hypothecate,
encumber, or permit any lien to attach to, or otherwise transfer, this Lease or
any interest hereunder, by operation of Law or otherwise, (ii) sublet the
Premises or any part thereof, (iii) permit the use of the Premises by any
Persons other than Tenant and its employees and Tenant Affiliates (all of the
foregoing are hereinafter sometimes referred to collectively as "Transfers" and
any Person to whom any Transfer is made or sought to be made is hereinafter
sometimes referred to as a "Transferee"), or (iv) advertise the Premises or
Lease for Transfers. If Tenant shall desire Landlord's consent to any Transfer,
Tenant shall notify Landlord in writing, which notice shall include: (a) the
proposed effective date (which shall not be less than thirty (30) nor more than
180 days after Tenant's notice), (b) the portion of the Premises to be
Transferred (herein called the "Subject Space"), (c) the terms of the proposed
Transfer and the consideration therefor, the name, address and background
information concerning the proposed Transferee, and a true and complete copy of
all proposed Transfer documentation, (d) financial statements (balance sheets
and income/expense statements for the current and prior two (2) years) of the
proposed Transferee, in form and detail reasonably satisfactory to Landlord,
certified by an officer, partner or owner of the Transferee, (e) at least two
(2) favorable financial and business character/reputation references respecting
the Transferee from independent third parties (including a current or recent
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commercial landlord), and any other reasonable information to enable Landlord to
determine the financial responsibility, character, and reputation of the
proposed Transferee, nature of such Transferee's business and proposed use of
the Subject Space, and such other information as Landlord may reasonably
require. Any Transfer made without complying with this Article shall, at
Landlord's option, be null, void and of no effect, or shall constitute a Default
under this Lease. Whether or not Landlord shall grant consent, Tenant shall pay
$500 towards Landlord's review and processing expenses, as well as any
reasonable legal fees incurred by Landlord for outside counsel within fifteen
(15) days after written request by Landlord.
B. APPROVAL. Landlord will not unreasonably withhold its consent to any
proposed Transfer of the Subject Space to the Transferee on the terms specified
in Tenant's notice. The parties hereby agree that it shall be reasonable under
this Lease and under any applicable Law for Landlord to withhold consent to any
proposed Transfer where one or more of the following applies (without limitation
as to other reasonable grounds for withholding consent): (i) the Transferee is
of a character or reputation or engaged in a business which is not consistent
with the quality or nature of the Property or other tenants of the Property,
(ii) the Transferee intends to use the Subject Space for purposes which are not
permitted under this Lease, (iii) the Subject Space is not regular in shape with
appropriate means of ingress and egress suitable for normal renting purposes,
would result in more than a reasonable number of occupants, or would require
increased services by Landlord, (iv) the Transferee is either a government (or
agency or instrumentality thereof), (v) the proposed Transferee or any affiliate
thereof is an occupant of the Property or has negotiated to lease space in the
Property from Landlord during the prior six (6) months, (vi) the proposed
Transferee does not have, in Landlord's sole but reasonable good faith
determination, satisfactory references or a reasonable financial condition in
relation to the obligations to be assumed in connection with the Transfer, (vii)
the Transfer involves a partial or collateral assignment, or a mortgage, pledge,
hypothecation, or other encumbrance or lien on this Lease, (viii) the proposed
Transfer involves conversion, merger or consolidation of Tenant into a limited
liability company or limited liability partnership which would have the legal
effect of releasing Tenant from any obligations under this Lease, unless all or
substantially all of the business and assets of Tenant are transferred from
Tenant to the surviving limited liability company or limited liability
partnership, (ix) the proposed Transfer would cause Landlord to be in violation
of any Laws or any other lease or agreement to which Landlord is a party as of
the date of this Lease, or (x) Tenant has committed and failed to cure a
Default.
C. TRANSFER PREMIUMS. If Landlord consents to a Transfer, and as a
condition thereto which the parties hereby agree is reasonable, Tenant shall
retain fifty percent (50%) of any Transfer Premium, and shall pay Landlord fifty
percent (50%) of any Transfer Premium, derived by Tenant from such Transfer.
"Transfer Premium" shall mean: (i) for a lease assignment, all consideration
paid or payable therefor, and (ii) for a sublease, all rent, additional rent or
other consideration paid by such Transferee in excess of the Rent payable by
Tenant under this Lease (on a monthly basis during the Term, and on a per
rentable square foot basis, if less than all of the Premises is transferred). In
exchange for Landlord's agreement to permit Tenant to retain fifty percent (50%)
of any Transfer Premium herein, Tenant shall be responsible for any costs
incurred by Tenant in connection with such Transfer, such as brokerage
commissions, attorneys' fees and leasehold improvements; Tenant shall have the
right to recover the aforesaid costs prior to making any payments of the
Transfer Premium to Landlord. "Transfer Premium" shall also include so-called
"key money," or other bonus amount paid by Transferee to Tenant, and any payment
in excess of fair market value for services rendered by Tenant to Transferee or
in excess of Tenant's fair market value for assets, fixtures, inventory,
equipment or furniture transferred by Tenant to Transferee; provided, however,
that this sentence shall not apply to sale by Tenant of all or substantially all
of its assets. If part of the
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consideration for such Transfer shall be payable other than in cash, Landlord's
share of such non-cash consideration shall be in such form as is reasonably
satisfactory to Landlord. Tenant shall pay the percentage of the Transfer
Premium due Landlord hereunder within fifteen (15) days after Tenant receives
any Transfer Premium from the Transferee.
D. INTENTIONALLY OMITTED.
E. TERMS OF CONSENT. If Landlord consents to a Transfer: (i) the terms
and conditions of this Lease, including Tenant's liability for the Subject
Space, shall in no way be deemed to have been waived or modified, (ii) such
consent shall not be deemed consent to any further Transfer by either Tenant or
a Transferee, (iii) intentionally omitted, (iv) Tenant shall deliver to
Landlord, promptly after execution, an original executed copy of all
documentation pertaining to the Transfer in form reasonably acceptable to
Landlord, and (v) Tenant shall furnish a complete statement, certified by an
independent certified public accountant, or Tenant's chief financial officer,
setting forth in detail the computation of any Transfer Premium that Tenant has
derived and shall derive from such Transfer. Landlord or its authorized
representatives shall have the right at all reasonable times to audit the books,
records and papers of Tenant and any Transferee relating to any Transfer (except
a Transfer in connection with a sale by Tenant of all or substantially all of
its assets), and shall have the right to make copies thereof. If the Transfer
Premium respecting any Transfer shall be found to have been understated, Tenant
shall pay the deficiency within fifteen (15) days after demand (and if
understated by more than five percent (5%), Tenant shall include with such
payment Landlord's costs of such audit). Any sublease hereunder shall be
subordinate and subject to the provisions of this Lease, and if this Lease shall
be terminated during the term of any sublease, whether based on Default or
mutual agreement, Landlord shall have the right to: (a) deem such sublease as
merged and canceled and repossess the Subject Space by any lawful means, or (b)
require that such subtenant attorn to and recognize Landlord as its landlord
under such sublease with respect to obligations arising thereafter, subject to
the terms of Landlord's standard form of attornment documentation. If Tenant
shall commit a Default under this Lease, Landlord is hereby irrevocably
authorized to direct any Transferee to make all payments under or in connection
with the Transfer directly to Landlord (which Landlord shall apply toward
Tenant's obligations under this Lease).
F. CERTAIN TRANSFERS. For purposes of this Lease, the term "Transfer"
shall also include, and all of the foregoing provisions shall apply to: (i) the
conversion, merger or consolidation of Tenant into a limited liability company
or limited liability partnership, (ii) if Tenant is a partnership or limited
liability company, the withdrawal or change, voluntary, involuntary or by
operation of law, of a majority of the partners or members, or a transfer of a
majority of partnership or membership interests, within a twelve month period,
or the dissolution of the partnership or company, and (iii) if Tenant is a
closely held corporation (i.e., whose stock is not publicly held and not traded
through an exchange or over the counter), the dissolution, merger, consolidation
or other reorganization of Tenant, or within a twelve month period: (a) the sale
or other transfer of more than an aggregate of 50% of the voting shares of
Tenant (other than to immediate family members by reason or gift or death) or
(b) the sale, mortgage, hypothecation or pledge of more than an aggregate of 50%
of Tenant's net assets.
Notwithstanding the foregoing to the contrary, a transaction described
in Section 13F above shall not be deemed to be a Transfer requiring Landlord's
consent so long as, after the transaction, Tenant or the surviving entity (as
the case may be) shall directly or indirectly own all or substantially all of
the business and assets of Tenant.
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G. TRANSFER TO TENANT AFFILIATES. Notwithstanding anything to the
contrary in this Article, Tenant may, without Landlord's consent, assign this
Lease to any party (herein referred to as a "Tenant Affiliate") which directly
or indirectly: (i) wholly owns or controls Tenant, (ii) is wholly owned or
controlled by Tenant, (iii) is under common ownership or control with Tenant, or
(iv) into which Tenant or any of the foregoing parties is merged, consolidated
or reorganized, or to which all or substantially all of Tenant's assets or any
such other party's assets are sold, so long as the resulting entity will be an
ongoing business with a net worth and financial condition at least as strong as
that of the initial named Tenant herein on the date of this Lease (and in the
event of such a sale of all or substantially all of Tenant's assets to any
party, Tenant shall include an assignment and assumption of this Lease as part
of the assets transferred thereunder); provided: (a) Landlord shall receive at
least fifteen (15) days advance notice describing the structure of the
transaction, the parties involved, and the financial information required
herein, certified by an officer of Tenant and/or the Transferee, and a copy of
the executed transfer document (in form reasonably acceptable to Landlord
consistent with the foregoing provisions) promptly after execution, (b) Tenant
shall remain liable for all of Tenant's obligations under this Lease, (c) the
Transferee shall expressly assume all of Tenant's obligations under this Lease,
and (d) this provision shall not be deemed consent to any further sublease,
assignment or other Transfer.
ARTICLE 14: PERSONAL PROPERTY, RENT AND OTHER TAXES
Tenant shall pay, prior to delinquency, all taxes, charges or other
governmental impositions assessed against or levied upon all of Tenant's
fixtures, furnishings, personal property, built-in and modular furniture, and
systems and equipment located in or exclusively serving the Premises (to the
extent that such items are not included in Taxes), notwithstanding that certain
such items may become Landlord's property under Article 23 upon termination of
the Lease. Whenever possible, Tenant shall cause all such items to be assessed
and billed separately from the other property of Landlord. In the event any such
items shall be assessed and billed with the other property of Landlord, Tenant
shall pay Landlord its share of such taxes, charges or other governmental
impositions within fifteen (15) days after Landlord delivers a statement and a
copy of the assessment or other documentation showing the amount of impositions
applicable to Tenant's property. Tenant shall pay any rent tax, sales tax,
service tax, transfer tax, value added tax, or any other applicable tax on the
Rent, utilities or services herein, the privilege of renting, using or occupying
the Premises or collecting Rent therefrom, or otherwise respecting this Lease or
any other document entered in connection herewith.
ARTICLE 15: LANDLORD'S REMEDIES
A. DEFAULT. The occurrence of any one or more of the following events
shall constitute a "Default" by Tenant and shall give rise to Landlord's
remedies set forth in Paragraph B below: (i) failure to make when due any
payment of Rent, unless such failure is cured within five (5) business days
after notice; (ii) failure to observe or perform any term or condition of this
Lease other than the payment of Rent (or the other matters expressly described
herein), unless such failure is cured within any period of time following notice
expressly provided with respect thereto in other Articles hereof, or otherwise
within thirty (30) days following notice (provided, if the nature of Tenant's
failure is such that more time is reasonably required in order to cure, Tenant
shall not be in Default if Tenant commences to cure promptly within such period,
diligently seeks, and keeps Landlord reasonably advised of efforts to cure such
failure to completion, and completes such cure within sixty (60) days following
Landlord's notice); (iii) failure to cure immediately upon notice thereof any
condition which is hazardous, materially
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interferes with another tenant or the operation or leasing of the Property, or
may cause the imposition of a fine, penalty or other remedy on Landlord or its
agents or affiliates, (iv) violating Article 13 respecting Transfers, or
abandoning, vacating or failing to occupy the Premises for more than thirty (30)
days coupled with a failure to pay Rent for such period beyond the applicable
cure period, or (v) (a) making by Tenant or any guarantor of this Lease
("Guarantor") of any general assignment for the benefit of creditors, (b) filing
by or for reorganization or arrangement under any Law relating to bankruptcy or
insolvency (unless, in the case of a petition filed against Tenant or such
Guarantor, the same is dismissed within ninety (90) days), (c) 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, where possession
is not restored to Tenant within thirty (30) days, (d) attachment, execution or
other judicial seizure of substantially all of Tenant's assets located in the
Premises or of Tenant's interest in this Lease, (e) Tenant's or any Guarantor's
convening of a meeting of its creditors or any class thereof for the purpose of
effecting a moratorium upon or composition of its debts, (o Tenant's or any
Guarantor's insolvency or failure, or admission of an inability, to pay debts as
they mature, or (g) a violation by Tenant under any other lease or agreement
with Landlord or any affiliate thereof which is not cured within the time
permitted for cure thereunder. If Tenant violates the same term or condition of
this Lease within the scope of subsections (i) or (ii) above on more than two
(2) occasions during any twelve (12) month period, and Landlord has provided
notice to Tenant thereof within thirty (30) days following each such violation,
then Landlord shall have the right to exercise all remedies for any further
violations of the same term or condition during the next twelve (12) months
without providing further notice or an opportunity to cure such violation,
except that with respect to defaults in the payment of Rent, Tenant shall have
the cure period set forth in Article 30A(i) above . The notice and cure periods
herein are intended to satisfy and run concurrently with any notice and cure
periods provided by Law, and shall not be in addition thereto; provided,
Landlord may elect to comply with such notice and cure periods provided by Law
in lieu of the notice and cure periods provided herein.
B. REMEDIES. If a Default occurs, Landlord shall have the rights and
remedies hereinafter set forth to the extent permitted by Law, which shall be
distinct, separate and cumulative with and in addition to any other right or
remedy allowed under any Law or other provision of this Lease:
(1) Landlord may terminate this Lease, reenter and repossess the
Premises by detainer suit, summary proceedings or other lawful means, and
recover from Tenant: (i) any unpaid Rent as of the termination date, (ii) the
amount by which: (a) any unpaid Rent which would have accrued after the
termination date during the balance of the Term exceeds (b) the reasonable
rental value of the Premises under a lease substantially similar to this Lease,
taking into account, among other things, the condition of the Premises, market
conditions, the period of time the Premises may reasonably remain vacant before
Landlord is able to release the same to a suitable replacement tenant, and (iii)
any other amounts necessary to compensate Landlord for all damages proximately
caused by Tenant's failure to perform its obligations under this Lease. For
purposes of computing the amount of Rent herein that would have accrued after
the termination date, Tenant's obligations for Taxes and Expenses shall be
projected based upon the average rate of increase in such items from the
Commencement Date through the termination date (or if such period shall be less
than three years, then based on Landlord's reasonable estimates). The amounts
computed in accordance with the foregoing subclauses (a) and (b) shall both be
discounted in accordance with accepted financial practice at the rate of five
percent (5%) per annum to the then present value.
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(2) Landlord may terminate Tenant's right of possession, reenter and
repossess the Premises by detainer suit, summary proceedings or other lawful
means, with or without terminating this Lease (except as required by Law), and
recover from Tenant: (i) any unpaid Rent as of the date possession is
terminated, (ii) any unpaid Rent which thereafter accrues during the Term from
the date possession is terminated through the time of judgment (or which may
have accrued from the time of any earlier judgment obtained by Landlord), less
any consideration received from replacement tenants as further described and
applied pursuant to Paragraph H, below, and (iii) any other amounts necessary to
compensate Landlord for all damages proximately caused by Tenant's failure to
perform its obligations under this Lease. Tenant shall pay any such amounts to
Landlord as the same accrue or after the same have accrued from time to time
upon demand. At any time after terminating Tenant's right to possession as
provided herein, Landlord may terminate this Lease as provided in clause (1)
above by notice to Tenant, and Landlord may pursue such other remedies as may be
available to Landlord under this Lease or applicable Law.
Notwithstanding anything in this Lease to the contrary or under law or
in equity, Landlord shall not be entitled to terminate this Lease or Tenant's
rights of possession hereunder without obtaining a judgment or order from a
court of competent jurisdiction.
C. MITIGATION OF DAMAGES. If Landlord terminates this Lease or Tenant's
right to possession, Landlord shall be obligated to mitigate Landlord's damages,
provided, however, that: (i) Landlord shall be required only to use reasonable
efforts to mitigate, which shall not exceed such efforts as Landlord generally
uses to lease other space at the Property, (ii) Landlord will not be deemed to
have failed to mitigate if Landlord or its affiliates lease any other portions
of the Property or other projects owned by Landlord or its affiliates in the
same geographic area, before reletting all or any portion of the Premises, and
(iii) any failure to mitigate as described herein with respect to any period of
time shall only reduce the Rent and other amounts to which Landlord is entitled
hereunder by the reasonable rental value of the Premises during such period,
taking into account the factors described in clause B(l) above. In recognition
that the value of the Property depends on the rental rates and terms of leases
therein, Landlord's rejection of a prospective replacement tenant based on an
offer of rentals below fair market value (as reasonably determined by Landlord)
for new leases of comparable space at the Property at the time in question, or
at Landlord's option, below the rates provided in this Lease, or containing
terms less favorable than those contained herein, shall not, in and of itself,
give rise to a claim by Tenant that Landlord failed to mitigate Landlord's
damages. If Landlord has not terminated this Lease or Tenant's right to
possession, Landlord shall have no obligation to mitigate under any
circumstances and may permit the Premises to remain vacant or abandoned; in such
case, Tenant may seek to mitigate damages by attempting to sublease the Premises
or assign this Lease pursuant to Article 13.
D. RELETTING. If this Lease or Tenant's right to possession is
terminated, or Tenant abandons the Premises, Landlord may: (i) enter and secure
the Premises, change the locks, install barricades, remove any improvements,
fixtures or other property of Tenant therein, perform any decorating,
remodelling, repairs, alterations, improvements or additions and take such other
actions as Landlord shall determine in Landlord's sole discretion to prevent
damage or deterioration to the Premises or prepare the same for reletting, and
(ii) relet all or any portion of the Premises (separately or as part of a larger
space), for any rent, use or period of time (which may extend beyond the Term
hereof, and upon any other terms as Landlord shall determine in Landlord's sole
discretion, directly or as Tenant's agent (if permitted or required by
applicable Law). The consideration received from such reletting shall be applied
pursuant to the terms of Paragraph H hereof, and if such consideration, as so
applied, is not sufficient to cover
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all Rent and damages to which Landlord may be entitled hereunder, Tenant shall
pay any deficiency to Landlord as the same accrues or after the same has accrued
from time to time upon demand, subject to the other provisions hereof.
E. SPECIFIC PERFORMANCE, COLLECTION OF RENT AND ACCELERATION. Landlord
shall at all times have the right without prior demand or notice except as
required by applicable Law to: (i) seek any declaratory, injunctive or other
equitable relief, and specifically enforce this Lease or restrain or enjoin a
violation of any provision hereof, and (ii) sue for and collect any unpaid Rent
which has accrued.
F. LATE CHARGES, INTEREST, AND RETURNED CHECKS. Beginning with the next
such occurrence within twelve (12) months after Landlord's written notice to
Tenant that Rent or any portion thereof was not received within five (5)
business days after the date that it was due, Tenant shall pay, as additional
Rent, a service charge of Two Hundred Fifty Dollars ($250.00) or three and
00/100 percent (3.0%) of the delinquent amount, whichever is greater, if any
portion of Rent is not received within five (5) business days after it is due.
In addition, any Rent not paid when due shall accrue interest from the due date
at the Default Rate until payment is received by Landlord. Such service charges
and interest payments shall not be deemed consent by Landlord to late payments,
nor a waiver of Landlord's right to insist upon timely payments at any time, nor
a waiver of any remedies to which Landlord is entitled as a result of the late
payment of Rent. If Landlord receives two (2) or more checks from Tenant which
are returned by Tenant's bank for insufficient funds, Landlord may require that
all checks thereafter be bank certified or cashier's checks (without limiting
Landlord's other remedies). All bank service charges resulting from any returned
checks shall be borne by Tenant.
G. LANDLORD'S CURE OF TENANT VIOLATIONS. If Tenant fails to perform any
obligation under this Lease for ten (10) days after notice thereof by Landlord
(except that no notice shall be required in emergencies), Landlord shall have
the right (but not the duty), to perform such obligation on behalf and for the
account of Tenant. In such event, Tenant shall reimburse Landlord upon demand,
as additional Rent, for all expenses incurred by Landlord in performing such
obligation, and interest thereon at the Default Rate from the date such expenses
were incurred. Landlord's performance of Tenant's obligations hereunder shall
not be deemed a waiver or release of Tenant therefrom.
H. OTHER MATTERS. No reentry or repossession, repairs, changes,
alterations and additions, reletting, or any other action or omission by
Landlord shall be construed as an election by Landlord to terminate this Lease
or Tenant's right to possession, nor shall the same operate to release Tenant in
whole or in part from any of Tenant's obligations hereunder, unless express
notice of such intention is sent by Landlord to Tenant (and if applicable Law
permits, and Landlord shall not have expressly terminated this Lease in writing,
then any termination shall be deemed a termination of Tenant's right of
possession only). Landlord may bring suits for amounts owed by Tenant hereunder
or any portions thereof, as the same accrue or after the same have accrued, and
no suit or recovery of any portion due hereunder shall be deemed a waiver of
Landlord's right to collect all amounts to which Landlord is entitled hereunder,
nor shall the same serve as any defense to any subsequent suit brought for any
amount not theretofore reduced to judgment. Landlord may pursue one or more
remedies against Tenant and need not make an election of remedies until findings
of fact are made by a court of competent jurisdiction. All rent and other
consideration paid by any replacement tenants shall be applied at Landlord's
option: (i) first, to the Costs of Reletting, (ii) second, to the payment of all
costs of enforcing this Lease against Tenant or any Guarantor, (iii) third, to
the payment of all interest and service charges accruing hereunder, (iv) fourth,
to the payment of Rent theretofore accrued, and (v)
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with the residue, if any, to be held by Landlord and applied to the payment of
Rent and other obligations of Tenants as the same become due (and with any
remaining residue to be retained by Landlord). "Costs of Reletting" shall
include without limitation, all costs and expenses incurred by Landlord for any
repairs or other matters described in Paragraph D above, brokerage commissions,
advertising costs, attorney's fees, any economic incentives given to enter
leases with replacement tenants, and costs of collecting rent from replacement
tenants. Landlord shall be under no obligation to observe or perform any
provision of this Lease on its part to be observed or perform any provision of
this Lease on its part to be observed or performed which involves the payment of
money by Landlord to Tenant, or the performance of alterations or improvements
to the Premises, while Tenant is in violation or Default of this Lease. The
times set forth herein for the curing of Defaults by Tenant are of the essence
of this Lease. Tenant hereby irrevocably waives any right otherwise available
under any Law to redeem or reinstate this Lease, or Tenant's right to
possession, after this Lease, or Tenant's rights to possession, is terminated
based on a Default by Tenant.
ARTICLE 16: SECURITY DEPOSIT
Tenant shall deposit with Landlord a letter of credit ("Letter of
Credit") in the amount set forth in Article 1 ("Security Deposit"), upon
Tenant's execution and submission of this Lease. The Security Deposit shall
serve as security for the prompt, full and faithful performance by Tenant of the
terms and provisions of this Lease. If Tenant commits a Default, or owes any
amounts to Landlord upon the expiration or earlier termination of this Lease,
Landlord may use or apply the whole or any part of the Security Deposit for the
payment of Tenants obligations hereunder. The use or application of the Security
Deposit or any portion thereof shall not prevent Landlord from exercising any
other right or remedy provided hereunder or under any Law and shall not be
construed as liquidated damages. In the event the Security Deposit is reduced by
such use or application. Tenant shall deposit with Landlord within ten (10) days
after notice, an amount sufficient to restore the full amount of the Security
Deposit. Unless required by applicable Law, Landlord shall not be required to
keep any cash portion of the Security Deposit separate from Landlord's general
funds or pay interest on the Security Deposit. Any remaining portion of the
Security Deposit shall be returned to Tenant (or, at Landlord's option, to the
last assignee of Tenant's interest in this Lease) within sixty (60) days after
Tenant (or such assignee) has vacated the Premises in accordance with Article
23. Tenant shall not assign, pledge or otherwise transfer any interest in the
Security Deposit except as part of an assignment of this Lease approved by
Landlord under Article 13, and any attempt to do so shall be null and void. See
Exhibit l for additional requirements regarding this Letter of Credit.
ARTICLE 17: ATTORNEYS' FEES AND VENUE
In the event of any litigation or arbitration between the parties
relating to this Lease, the Premises or Property (including pretrial, trial,
appellate, administrative, bankruptcy or insolvency proceedings), the prevailing
party shall be entitled to recover its attorney's fees and costs as part of the
judgment, award or settlement therein. In the event, of a breach of this Lease
by either party which does not result in litigation but which causes the
non-breaching party to incur attorney's fees or costs, the breaching party shall
reimburse such reasonable fees and costs to the non-breaching party upon demand.
If either party or any of its officers, directors, trustees, beneficiaries,
partners, agents, affiliates or employees shall be made a party to any
litigation or arbitration commenced by or against the other party and is not at
fault, the other party shall pay all costs, expenses and attorney's fees
incurred by such parties in connection with such litigation. Any action or
proceeding brought by either party against the other for any matter
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arising out of or in any way relating to this Lease. the Premises or the
Property, shall be heard, at Landlord's option, in the court having jurisdiction
located closest to the Property.
ARTICLE 18: SUBORDINATION, ATTORNMENT AND LENDER PROTECTION
This Lease is subject and subordinate to all Mortgages now or hereafter
placed upon the Property, and all other encumbrances and matters of public
record applicable to the Property; provided, this Lease shall only be
subordinate to Mortgages made hereafter if the holders thereof agree to enter
into their commercially reasonable standard forms of subordination, non-
disturbance and attornment agreement with Tenant. Whether before or after any
foreclosure or power of sale proceedings are initiated or completed by any
Lender or a deed in lien is granted (or any ground lease is terminated), Tenant
agrees, upon written request of any such Lender or any purchaser at such sale,
to attorn and pay Rent to such party, and recognize such party as Landlord
(provided such Lender or purchaser shall agree not to disturb Tenant's occupancy
and other rights of Tenant hereunder so long as Tenant does not Default
hereunder, on a form of agreement customarily used by, or otherwise reasonably
acceptable to, such party). However, in the event of attornment, no Lender shall
be: (i) liable for any act or omission of Landlord, or subject to any offsets or
defenses which Tenant might have against, Landlord (arising prior to such Lender
becoming Landlord under such attornment), or (ii) liable for any security
deposit or bound by any Rent prepaid more than one (1) month and not actually
received by Lender. Any Lender may elect to make this Lease prior to the lien of
its Mortgage by written notice to Tenant, and if the Lender of any prior
Mortgage shall require, this Lease shall be prior to any subordinate Mortgage,
such elections shall be effective upon written notice to Tenant, or shall be
effective as of such earlier or later date set forth in such notice. Tenant
agrees to give any Lender by certified mail, return receipt requested, a copy of
any notice of default served by Tenant upon Landlord, provided that prior to
such notice Tenant has been notified in writing (by way of service on Tenant of
a copy of an assignment of leases, or otherwise) of the address of such Lender
Tenant further agrees that if Landlord shall have failed to cure such default
within the time permitted Landlord for, cure under this Lease, any such Lender
whose address has been provided to Tenant shall have an additional period of
thirty (30) days in which to cure (or such additional time as may be required
due to causes beyond such Lender's reasonable control, including time to obtain
possession of the Property by appointment of receiver, power of sale or judicial
action). Except as expressly provided to the contrary herein, the provisions of
this Article shall be self-operative; however Tenant shall execute and deliver,
within ten (10) days after request therefor, such documentation as Landlord or
any Lender may request from time to time, whether prior to or after a
foreclosure or power of sale proceeding is initiated or completed, a deed in
lieu is delivered, or a ground lease is terminated, in order to further confirm
or effectuate the matters set forth in this Article in recordable form.
Landlord hereby represents and warrants that there is no Mortgage
encumbering the Property as of the date of this Lease.
ARTICLE 19: ESTOPPEL CERTIFICATES
Tenant shall from time to time, within fifteen (15) days after written
request from Landlord, execute, acknowledge and deliver a statement certifying,
(1) that this Lease is unmodified and in full force and effect or, if modified,
stating the nature of such modification and certifying that this Lease as so
modified, is in full force and effect (or specifying the ground for claiming
that this Lease is not in force and effect), (ii) the dates to which the Rent
has been paid, and the amount of any Security Deposit, (iii) that Tenant is in
possession of the Premises,
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and paying Rent on a current basis with, to Tenant's actual knowledge, no
offsets, defenses or claims, or specifying the same if any are claimed, (iv)
that there are not, to Tenant's actual knowledge, any uncured defaults on the
part of Landlord or Tenant, or specifying the same if any are claimed, and (v)
certifying such other factual matters as Landlord may reasonably request, or as
may be reasonably requested by Landlord's current or prospective Lenders,
insurance carriers, auditors, and prospective purchasers (and including a
comparable certification statement from any subtenant respecting its sublease).
Any such statement may be relied upon by any such parties. If Tenant shall fail
to execute and return such statement within the time required herein, Tenant
shall be in Default, and shall be deemed to have agreed with the matters set
forth therein (which shall not be in limitation of Landlord's other remedies).
ARTICLE 20: RIGHTS RESERVED BY LANDLORD
Except to the extent expressly limited herein, Landlord reserves full
rights to control the Property (which rights may be exercised without subjecting
Landlord to claims for constructive eviction, abatement of Rent, damages or
other claims of any kind), including more particularly, but without limitation,
the following rights:
A. GENERAL MATTERS. To: (i) change the name or street address of the
Property or designation of the Premises, (ii) install and maintain signs on and
about the Property, and grant any other Person the right to do so, (iii) retain
at all times, and use in appropriate instances, keys to all doors within and
into the Premises (subject to the following paragraph concerning Secure Areas),
(iv) grant to any Person the right to conduct any business or render any service
at the Property, whether or not the same are similar to the use permitted Tenant
by this Lease, (v) have access for Landlord and other tenants of the Property to
any mail chutes located on the Premises according to the rules of the United
States Postal Service (and to install or remove such chutes), and (vi) in case
of fire, invasion, insurrection, riot, civil disorder, public excitement or
other dangerous condition, or threat thereof: (a) limit or prevent access to the
Property, (b) shut down elevator service, (c) activate elevator emergency
controls, and (d) otherwise take such action or preventative measures deemed
necessary by Landlord for the safety of tenants of the Property or the
protection of the Property and other property located thereon or therein (but
this provision shall impose no duty on Landlord to take such actions, and no
liability for actions taken in good faith).
Notwithstanding anything contained in this Lease to the contrary,
Tenant shall have the right to designate certain areas within the Premises as
secure areas ("Secure Areas") which shall be locked by Tenant and to which
Landlord shall not have the key or other method of access (such as key cards or
security codes). Tenant acknowledges that Landlord's lack of access to the
Secure Areas may impair the ability of Landlord or other persons (including,
without limitation, fire and police personnel) to respond to emergency
situations in the Secure Areas. Tenant waives and releases all claims, demands,
liabilities or losses (collectively, "claims") which may arise or occur as a
result of any delay in gaining access to the Secure Areas by Landlord or other
persons (including, without limitation, fire and police personnel) in emergency
situations, and Tenant shall defend, indemnify and hold Landlord and its agents
and employees harmless from any such claims by third parties. Landlord shall
have no obligation to provide any janitorial services to the Secure Areas.
B. ACCESS TO PREMISES. Subject to the following provisions, to enter
the Premises in order to: (i) inspect the Premises during normal business hours,
(ii) supply cleaning service or other services to be provided Tenant hereunder,
(iii) show the Premises (during normal
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business hours and after at least one (1) business day prior notice) to current
and prospective Lenders, insurers, purchasers, governmental authorities, and
their representatives, and during the last twelve (12) months of Tenant's
occupancy, show the Premises (during normal business hours and after at least
one (1) business days' prior notice) to prospective tenants and leasing brokers,
and (iv) intentionally omitted, and (v) perform any work or take any other
actions under Paragraph C below, or exercise other rights of Landlord under this
Lease or applicable Laws, However, except in emergencies, or for cleaning or
other routine services to be provided Tenant under this Lease, Landlord shall:
(a) provide reasonable advance written or oral notice to Tenant's onsite manager
or other appropriate person, (b) take reasonable steps to minimize any
disruption to Tenant's business, and (c) at Tenant's option, be accompanied
during entry into the Premises by a representative of Tenant. If Tenant requests
that any such access occur before or after Building Hours, and Landlord
schedules the work accordingly, Tenant shall pay all overtime and other
additional costs in connection therewith.
C. CHANGES TO THE PROPERTY. Subject to the last sentence of this
Paragraph, to: (i) paint and decorate, (ii) perform repairs or maintenance,
(iii) add land, buildings, easements or other interests to, or sell or eliminate
the same from, the Property, grant interests and rights in the Property to other
parties, and convert common areas to rentable areas and rentable areas to common
areas, and (iv) make replacements, restorations, renovations, alterations,
additions and improvements, structural or otherwise (including freon retrofit
work), in and to the Property or any part thereof, including any adjacent
building, structure, facility, land, street or alley, or change the uses thereof
(other than Tenant's permitted use under this Lease), including changes,
reductions or additions of corridors, entrances, doors, lobbies, parking
facilities and other areas, structural support columns and shear walls,
elevators, stairs, escalators, mezzanines, solar tint windows or film, kiosks,
planters, sculptures, displays, and other amenities and features therein, and
changes relating to the connection with or entrance into or use of the Property
or any other adjoining or adjacent building or buildings, now existing or
hereafter constructed. In connection with such matters, Landlord may among other
things erect scaffolding, barricades and other structures, open ceilings, close
entry ways, restrooms, elevators, stairways, corridors, parking and other areas
and facilities, and take such other actions as Landlord deems appropriate.
However, Landlord shall: (a) maintain reasonable access to the Premises, (b) in
connection with entering the Premises, comply with Paragraph B above, and (c) to
the extent that, in Landlord's reasonable opinion, the Premises are materially
affected, give Tenant reasonable prior notice of such changes to the Property.
Notwithstanding anything to the contrary contained herein, changes which may be
made by Landlord as permitted under this Section shall not increase Tenant's
Share.
D. INTENTIONALLY OMITTED.
ARTICLE 21: RIGHT TO CURE
If Landlord shall fail to perform any obligation under this Lease
required to be performed by Landlord, Landlord shall not be deemed to be in
default hereunder nor subject to any claims for damages of any kind, unless such
failure shall have continued for a period of thirty (30) days (or, in an
emergency situation, five (5) days) after notice thereof by Tenant (provided, if
the nature of Landlord's failure is such that more time is reasonably required
in order to cure, Landlord shall not be in default if Landlord commences to cure
within such applicable period and thereafter diligently seeks to cure such
failure to completion). If Landlord shall default and fail to cure as provided
herein, Tenant shall have such rights and remedies as may be available to Tenant
under applicable Laws, subject to the other provisions of this Lease; provided,
Tenant shall have no right of self-help to perform repairs or any other
obligation of Landlord (except as
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set forth in the following paragraph), and shall have no right to withhold,
setoff, or abate Rent, except as may be expressly provided in this Lease
(including, without limitation, Section 6E), and shall have no right to
terminate this Lease without entry of an order and judgment by a court of
competent jurisdiction (provided that should Tenant prove a breach by Landlord
entitling Tenant to terminate this Lease, Tenant shall not be responsible for
performance of obligations under this Lease arising after the earlier to occur
of the following:
(a) the effective termination date as determined by the court in its
order or judgment, or
(b) the later to occur of: (i) Landlord's breach giving rise to such
termination, or (ii) any applicable period for Landlord to cure following notice
or other time period specifically set forth in this Lease, such as the time
periods set forth in Article 11.D (as determined by the court in its order or
judgment); provided, in any case, Tenant shall comply with all obligations under
this Lease until Tenant vacates the Premises in the condition required Article
23 of this Lease. Tenant hereby expressly waives the provisions of any Law to
the contrary.
Notwithstanding anything to the contrary contained herein, if Landlord
fails to make any repairs within the Premises which Landlord is obligated to
perform under this Lease, and which do not affect the Systems or Equipment, and
such failure directly and adversely affects Tenants use of the Premises, and
Tenant gives Landlord reasonable advance notice of Tenant's intent to perform
such work, describing the same in detail, and enclosing a copy of the proposed
contract (which notice shall be at least ten (10) days in advance, except to the
extent that there is an immediate threat to Tenants property or business or to
persons), then Tenant may make such repairs in a good and workmanlike manner
using a contractor which is then currently approved in writing by Landlord to
perform work in the Property provided Landlord has previously provided to Tenant
such a list (and in absence of such list, such repairs shall be made by a
contractor selected by Tenant), at a competitive and reasonable cost, and
subject to all of the other provisions of this Lease respecting work at the
Property other than those provisions requiring any additional approvals from
Landlord, and the Property rules and regulations pertaining thereto. In such
case, Landlord shall reimburse Tenant therefor within thirty (30) days after the
completion of the repairs by Tenant and Landlord's receipt of a copy of the paid
invoice and reasonable supporting documentation, including, but not limited to,
recordable lien releases and affidavits of payment in statutory form acceptable
to Landlord, but Tenant shall have no right to withhold or set off such amount
against Rent.
ARTICLE 22: INDEMNIFICATION
Subject to the provisions of Articles 10C and 11, Tenant shall defend,
indemnify and hold Landlord harmless from and against any and all claims,
demands, losses, penalties, fines, fees, charges, assessments, liabilities,
damages, judgments, orders, decrees, actions, administrative or other
proceedings, costs and expenses (including reasonable attorneys' and expert
witness fees, and court costs actually incurred), arising or alleged to arise
from: (i) any violation or breach of this Lease or applicable Law by any Tenant
Parties (as defined below), (ii) damage, loss or injury to persons, property or
business directly or indirectly arising out of any Tenant Party's use of the
Premises or negligent use of the Property, or out of any other intentional
misconduct or negligent act or omission of any Tenant Parties, and (iii) any
other damage, loss or injury to persons, property or business occurring in,
about or from the Premises, except to the extent that such other damage, loss or
injury to persons, property or business is caused by the negligence or
intentional misconduct of Landlord. For purposes of
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this provision, "Tenant Parties" shall mean Tenant, any other occupant of the
Premises and any of their respective agents, employees, invitees, Transferees
and contractors.
Subject to Articles 10C and 11 of this Lease, and excluding matters
covered by Tenant's foregoing indemnity obligations, Landlord shall defend,
indemnify and hold harmless Tenant from and against claims, demands, losses,
penalties, fines, fees, charges, assessments, liabilities, damages, judgments,
orders, decrees, actions, administrative or other proceedings, costs and
expenses (including reasonable attorneys' and expert witness fees, and court
costs) arising in the common areas of the Property from or relating to any loss
of life, damage or injury to persons, property or business to the extent caused
by or in connection with any violation of this Lease by, or any intentional
misconduct or negligent acts or omissions of, Landlord or Landlord's agents or
employees.
ARTICLE 23: RETURN OF POSSESSION
A. GENERAL PROVISIONS. At the expiration or earlier termination of this
Lease or Tenant's right of possession, Tenant shall vacate and surrender
possession of the entire Premises in the condition required under Article 8 and
the Rules, ordinary wear and tear and casualty damage excepted shall surrender
all keys and key cards, and any parking transmitters, stickers or cards, to
Landlord, and shall remove all personal property and office trade fixtures that
may be readily removed without damage to the Premises or Property (and Tenant
hereby waives any statutory notices to vacate or quit the Premises upon
expiration of this Lease), subject to the following provisions.
B. LANDLORD'S PROPERTY. All improvements, fixtures and other items,
including ceiling light fixtures; HVAC equipment (unless paid for by Tenant);
plumbing fixtures; hot water heaters; fire suppression and sprinkler systems;
Lines under Article 28; interior partitioning, built-in shelves and cabinets,
interior stairs, wall coverings, carpeting and other flooring, blinds, drapes
and window treatments (unless paid for by Tenant); in or serving the Premises,
whether installed by Tenant or Landlord, and any other items installed or
provided by Landlord or at Landlord's expense, shall be Landlord's property and
shall remain upon the Premises, all without compensation, allowance or credit to
Tenant, unless Landlord elects otherwise as provided in Paragraph C below.
C. REMOVAL OF ITEMS BY TENANT. Notwithstanding the foregoing to the
contrary, if prior to expiration or earlier termination of this Lease or within
thirty (30) days thereafter Landlord so directs by notice, Tenant shall promptly
remove such of the items described in Paragraph B above as are designated in
such notice and restore the Premises to the condition prior to the installation
of such items in a good and workmanlike manner; provided, Landlord shall not
require removal of any such items that: (i) already existed in the Premises
before this Lease and Tenant's occupancy of the Premises, or (ii) involve office
improvements that are installed by or for Tenant pursuant to the provisions of
this Lease (including any Exhibit hereto) except to the extent that Landlord
reserves the right to require such removal in connection with Landlord's
approval of the plans for such improvements.
If Tenant elects to remove any HVAC equipment and/or backup generators
that were paid for by Tenant, it is understood and agreed that Tenant's
obligation to restore the Premises shall include both the obligation to repair
any physical damage to the Premises or Property caused by such removal and to
rebalance the HVAC system within the Premises to the extent that such
rebalancing is necessary because of such removal of HVAC equipment being removed
by Tenant.
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D. TENANT'S FAILURE TO REMOVE ITEMS. If Tenant shall fail to remove any
items from the Premises as required hereunder, Landlord may do so and Tenant
shall pay Landlord's charges therefor upon demand. All such property removed
from the Premises by Landlord pursuant to any provisions of this Lease or any
Law may be handled or stored by Landlord at Tenant's expense, and Landlord shall
in no event be responsible for the value, preservation or safekeeping thereof.
All such property not removed from the Premises or retaken from storage by
Tenant within thirty (30) days after expiration or earlier termination of this
Lease or Tenant's right to possession shall, at Landlord's option, be
conclusively deemed to have been conveyed by Tenant to Landlord as if by bill of
sale without payment by Landlord. Unless prohibited by applicable Law, Landlord
shall have a lien against such property for the costs incurred in removing and
storing the same.
ARTICLE 24: HOLDING OVER
Unless Landlord expressly agrees otherwise in writing, Tenant shall pay
Landlord 150% for the first month and 200% thereafter of the amount of Rent then
applicable prorated on a per diem basis for each day that Tenant shall fail to
vacate or surrender possession of the Premises or any part thereof after
expiration or earlier termination of this Lease as required under Article 23,
together with all damages (direct and consequential) sustained by Landlord on
account thereof. Tenant shall pay such amount of Rent monthly in advance
(subject to refund of any partial month occupancy), and such other amounts on
demand. The foregoing provisions, and Landlord's acceptance of any such amounts,
shall not serve as permission for Tenant to holdover, nor serve to extend the
Term (although Tenant shall remain a tenant-at-sufferance bound to comply with
all other provisions of this Lease until Tenant properly vacates the Premises,
including Article 23). Landlord shall have the right at any time after
expiration or earlier termination of this Lease or Tenant's right to possession
to reenter and possess the Premises and remove all property and persons
therefrom, and Landlord shall have such other remedies for holdover as may be
available to Landlord under other provisions of this Lease or applicable Laws.
ARTICLE 25: NOTICES
Except as expressly provided to the contrary in this Lease, every
notice or other communication to be given by either party to the other with
respect hereto or to the Premises or Property, shall be in writing and shall not
be effective for any purpose unless the same shall be served personally or by
national air courier service providing for next business day delivery, or United
States certified mail, return receipt requested, postage prepaid, to the parties
at the addresses set forth in Article 1, or such other address or addresses as
Tenant or Landlord may from time to time designate by notice given as above
provided. Every notice or other communication hereunder shall be deemed to have
been given as of the third business day following the date of such mailing (or
as of any earlier date evidenced by a receipt from such national air courier
service or the United States Postal Service) or immediately if personally
delivered. Notices not sent in accordance with the foregoing shall be of no
force or effect until received by the foregoing parties at such addresses
required herein.
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ARTICLE 26: REAL ESTATE BROKERS
Landlord and Tenant hereby mutually: (i) represent and warrant to each
other that they have dealt only with the broker, if any, designated in Article 1
(whose commission, if any, shall be paid pursuant to separate written agreement
by the party signing such agreement) as broker, agent or finder in connection
with this Lease, and (ii) agree to defend, indemnify and hold each other
harmless from and against any and all claims, demands, losses, liabilities,
damages, judgments, costs and expenses (including reasonable attorneys' and
expert witness fees, and court costs), arising or alleged to arise from any
breach of their respective foregoing representation and warranty under this
Article.
ARTICLE 27: NO WAIVER
No provision of this Lease will be deemed waived by either party unless
expressly waived in writing and signed by the waiving party. No waiver shall be
implied by delay or any other act or omission of either party. No waiver by
either party of any provision of this Lease shall be deemed a waiver of such
provision with respect to any subsequent matter relating to such provision, and
Landlord's consent or approval respecting any action by Tenant shall not
constitute a waiver of the requirement for obtaining Landlord's consent or
approval respecting any subsequent action. Acceptance of Rent by Landlord
directly or through any agent or lockbox arrangement shall not constitute a
waiver of any breach by Tenant of any term or provision of this Lease (and
Landlord reserves the right to return or refund any untimely payments if
necessary to preserve Landlord's remedies). No acceptance of a lesser amount of
Rent shall be deemed a waiver of Landlord's right to receive the full amount
due, nor shall any endorsement or statement on any check or payment or any
letter accompanying such check or payment be deemed an accord and satisfaction,
and Landlord may accept such check or payment without prejudice to Landlord's
right to recover the full amount due. The acceptance of Rent or of the
performance of any other term or provision from, or providing directory listings
or services for, any Person other than Tenant shall not constitute a waiver of
Landlord's right to approve any Transfer. No delivery to, or acceptance by,
Landlord or its agents or employees of keys, nor any other act or omission of
Tenant or Landlord or their agents or employees, shall be deemed a surrender, or
acceptance of a surrender, of the Premises or a termination of this Lease,
unless stated expressly in writing by Landlord.
ARTICLE 28: TELECOMMUNICATION LINES
A. TELECOMMUNICATION LINES. Subject to Landlord's continuing right of
supervision and approval, which approval shall not be unreasonably withheld,
conditioned or delayed and the other provisions hereof, Tenant may: (i) install
telecommunication lines (`Lines") connecting the Premises to any Property
terminal block already serving or available to serve the Premises, or (ii) use
such Lines as may currently exist and already connect the Premises to such
terminal block. Such terminal block may comprise, or be connected through riser
or other Lines with, a main distribution frame (`MDF") for the Property.
Landlord disclaims any representations, warranties or understandings concerning
the capacity, design or suitability of any such terminal or MFD, Property riser
Lines, or related equipment. If there is, or will be, more than one tenant in
the Property, at any time, Landlord may allocate, and periodically reallocate,
connections to the terminal blocks and MFD based on the proportion of rentable
area each tenant leases, or the type of business operations or requirements of
such tenants, in Landlord's reasonable discretion. Landlord may arrange for an
independent contractor to review Tenant's requests for
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approval hereunder, monitor or supervise Tenant's installation, connection and
disconnection of Lines, and provide other such services, or Landlord may provide
the same. In each case, Tenant shall pay Landlord's fees and costs therefor as
provided in Article 9.
B. INSTALLATION. Tenant may install and use Tenant's Lines and make
connections and disconnections at the terminal blocks as described above,
provided Tenant shall: (i) obtain Landlord's prior written approval of all
aspects thereof, (ii) use an experienced and qualified contractor designated or
approved in writing in advance by Landlord (whom Landlord may require to enter
an access and indemnity agreement on Landlord's then standard form of agreement
therefor), (iii) comply with such inside wire standards as Landlord may adopt
from time to time, and all other provisions of this Lease, including Article 9
respecting Work, and the Rules respecting access to the wire closets, (iv) not
install Lines in the same sleeve, chaseway or other enclosure in close proximity
with electrical wire, and not install PVC-coated Lines under any circumstances,
(v) thoroughly test any riser Lines to which Tenant intends to connect any Lines
to ensure that such riser Lines are available and are not then connected to or
used for telephone, data transmission or any other purpose by any other party
(whether or not Landlord has previously approved such connections), and not
connect to any such unavailable or connected riser Lines, and (vi) not connect
any equipment to the Lines which may create an electromagnetic field exceeding
the normal insulation ratings of ordinary twisted pair riser cable or cause
radiation higher than normal background radiation, unless the Lines therefor
(including riser Lines) are appropriately insulated to prevent such excessive
electromagnetic fields or radiation (and such insulation shall not be provided
by the use of additional unused twisted pair Lines). As a condition to
permitting installation of new Lines, Landlord may require that Tenant remove
any existing Lines located in or serving the Premises which are not being used.
C. LIMITATION OF LIABILITY. Except to the extent due to Landlord's
intentional misconduct or grossly negligent acts, Landlord shall have no
liability for damages arising, and Landlord does not warrant that the Tenant's
use of the Lines will be free, from the following (collectively called "Line
Problems"): (i) any eavesdropping, wiretapping or theft of long distance access
codes by unauthorized parties, (ii) any failure of the Lines to satisfy Tenant's
requirements, or (iii) any capacitance, attenuation, crosstalk or other problems
with the Lines, any misdesignation of the Lines in the MDF room or wire closets,
or any shortages, failures, variations, interruptions, disconnections, loss or
damage caused by or in connection with the installation, maintenance,
replacement, use or removal of any other Lines or equipment at the Property by
or for other tenants at the Property, by any failure of the environmental
conditions at or the power supply for the Property to conform to any
requirements of the Lines or any other problems associated with any Lines or by
any other cause. Under no circumstances shall any Line Problems be deemed an
actual or constructive eviction of Tenant, render Landlord liable to Tenant for
abatement of any Rent or other charges under the Lease, or relieve Tenant from
performance of Tenant's obligations under the Lease as amended herein. Landlord
in no event shall be liable for damages by reason of loss of profits, business
interruption or other consequential damage arising from any Line Problems.
ARTICLE 29: HAZARDOUS MATERIALS
A. HAZARDOUS MATERIALS GENERALLY PROHIBITED. Except as provided herein,
Tenant shall not transport, use, store, maintain, generate, manufacture, handle,
dispose, release, discharge, spill or leak any "Hazardous Material" (as defined
in Article 30), or permit Tenant's employees, agents, contractors, or other
occupants of the Premises to engage in such activities on or about the Property.
However, the foregoing provisions shall not prohibit the transportation
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to and from, and use, storage, maintenance and handling within, the Premises of
substances customarily and lawfully used in the business which Tenant is
permitted to conduct in the Premises under this Lease, as an incidental and
minor part of such business, and provided: (i) such substances shall be properly
labeled, contained, used and stored only in small quantities reasonably
necessary for such permitted use of the Premises and the ordinary course of
Tenant's business therein, strictly in accordance with applicable Laws, highest
prevailing standards, and the manufacturers' instructions therefor, (ii) such
substances shall not be disposed of, released, discharged or permitted to spill
or leak in or about the Premises or the Property (and under no circumstances
shall any Hazardous Material be disposed of within the drains or plumbing
facilities in or serving the Premises or Property or in any other public or
private drain or sewer, regardless of quantity or concentration), (iii) if any
applicable Law or Landlord's trash removal contractor requires that any such
substances be disposed of separately from ordinary trash, Tenant shall make
arrangements at Tenant's expense for such disposal in approved containers
directly with a qualified and licensed disposal company at a lawful disposal
site, (iv) any remaining such substances shall be completely, properly and
lawfully removed from the Property upon expiration or earlier termination of
this Lease, and (v) for purposes of removal and disposal of any such substances,
Tenant shall be named as the owner, operator and generator, shall obtain a waste
generator identification number, and shall execute all permit applications,
manifests, waste characterization documents and any other required forms.
B. CLEAN UP RESPONSIBILITY. If any Hazardous Material is released,
discharged or disposed of, or permitted to spill or leak, in violation of the
foregoing provisions, Tenant shall immediately and properly clean up and remove
the Hazardous Materials from the Premises, Property and any other affected
property and clean or replace any affected personal property (whether or not
owned by Landlord) in compliance with applicable Laws and then prevailing
industry practices and standards, at Tenant's expense (without limiting
Landlord's other remedies therefor). Such clean up and removal work ("Tenant
Remedial Work") shall be considered Work under Article 9 and subject to the
provisions thereof, including Landlord's prior written approval (except in
emergencies), and any testing, investigation, feasibility and impact studies,
and the preparation and implementation of any remedial action plan required by
any court or regulatory authority having jurisdiction or reasonably required by
Landlord. In connection therewith, Tenant shall provide documentation evidencing
that all Tenant Remedial Work or other action required hereunder has been
properly and lawfully completed (including a certificate addressed to Landlord
from a environmental consultant reasonably acceptable to Landlord, in such
detail and form as Landlord may reasonably require). If any Hazardous Material
is released, discharged, disposed of, or permitted to spill or leak on or about
the Property and is not caused by Tenant or other occupants of the Premises, or
their agents, employees, Transferees, or contractors, such release, discharge,
disposal, spill or leak shall be deemed casualty damage under Article 11 to the
extent that the Premises and Tenant's use thereof is affected thereby; in such
case, Landlord and Tenant shall have the obligations and rights respecting such
casualty damage provided under this Lease.
C. MISCELLANEOUS. Tenant shall immediately upon written request from
time to time provide Landlord with copies of all material safety data sheets,
permits, approvals, memos, reports, correspondence, complaints, demands, claims,
subpoenas, requests, redemption and cleanup plans, and all papers of any kind
filed with or by any regulatory authority and any other books, records or items
pertaining to Hazardous Materials that are subject to the provisions of this
Article (collectively referred to herein as "Tenant's Hazardous Materials
Records"). Tenant shall pay, prior to delinquency, any and all fees, taxes
(including excise taxes), penalties and fines arising from or based on Tenant's
activities involving Hazardous Material on or about the
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Premises or Property, and shall not allow such obligations to become a lien or
charge against the Property or Landlord. If Tenant violates any provision of
this Article with respect to any Hazardous Materials, Landlord may: (i) require
that Tenant immediately remove all Hazardous Materials from the Premises and
discontinue using, storing and handling Hazardous Materials in the Premises,
and/or (ii) pursue such other remedies as may be available to Landlord under
this Lease or applicable Law.
ARTICLE 30: DEFINITIONS
(A) "BUILDING" shall mean the structure (or the portion thereof owned
by Landlord) identified in Article 1.
(B) "BUILDING HOURS" shall mean 8:00 A.M. to 6:00 P.M. Monday through
Friday, and 8:00 A.M. to 12:00 P.M on Saturday (if comparable buildings in the
area have standard Saturday hours), excluding Holidays. "Holidays" shall mean
New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
Christmas Day, and any other state or federal holidays observed by majority of
businesses in the Durham area.
(C) "DEFAULT RATE" shall mean the rate of interest announced from time
to time by the main Chicago office of Bank of America or its successor ("Bank")
as its published Prime Rate plus four percent (4%) per annum, unless a lesser
rate shall then be the maximum rate permissible by law, in which event the said
lesser rate shall be charged. The term "Prime Rate" means the rate of interest
announced by Bank from time to time as its "Prime Rate" Rate or "Corporate Base
Rate" (or other such designation as determined by Landlord), of interest,
changing automatically and simultaneously with each change in the Prime Rate
made by Bank from time to time. Any publication issued or published by Bank or a
certificate signed by an officer of Bank stating its Prime Rate as of a date
shall be conclusive evidence of the Prime Rate on that date. If during the Term
hereof, Bank should not issue or publish the Prime Rate, then Landlord shall
designate a similar rate published by any national banking association.
(D) "EXPENSES" shall mean all expenses, costs and amounts (other than
Taxes) of every kind and nature relating to the ownership, management, repair,
maintenance, replacement, insurance and operation of the Property, including,
without limitation (except as expressly set forth herein), any amounts paid for:
(i) Utility Costs, (ii) complying with Laws (but subject to the exclusions set
forth below), (iii) insurance, not limited to that required under this Lease,
and which may include flood, earthquake, boiler, rent loss, workers'
compensation and employers' liability, builders' risk, automobile and other
coverages, including a reasonable allocation of costs under any blanket
policies, (iv) supplies, materials, tools, equipment, uniforms, and vehicles
used in the operation, repair, maintenance, security, and other services for the
Property, including rental, installment purchase and financing agreements
therefor and interest thereunder, (v) accounting, alarm monitoring, security,
janitorial, trash removal, snow and ice removal, and other services, (vi)
customary management fees, not to exceed four percent (4%) of gross revenues of
the Property (vii) compensation and benefits for any personnel to the extent
such persons are engaged in the operation, repair, maintenance, security or
other services for the Property at or below the level of senior property
manager, and employer's FICA contributions, unemployment taxes or insurance, any
other taxes which may be levied on such compensation and benefits, and data or
payroll processing expenses relating thereto (if personnel handle other
properties, the foregoing expenses shall be allocated appropriately between the
Property and such other properties), (viii) payments under any easement, cross
or reciprocal easement, operating agreement, declaration, covenant, or other
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agreement or instrument pertaining to the sharing of costs for common areas or
other matters in a development or complex of which the Property is a part, (ix)
sales, use, value-added or other taxes on supplies or services for the Property,
(x) the costs of operating and maintaining any onsite office at the Property or
an adjoining property (such costs to be appropriately allocated between the
Property and any such adjoining property served by such office), including the
fair rental value thereof, (xi) operation, maintenance, repair, installation,
replacement, inspection, testing, painting, decorating and cleaning of the
Property, and any items located offsite but installed for the benefit of the
Property, including Property identification and pylon signs, directional signs,
traffic signals and markers, flagpoles and canopies, sidewalks, curbs,
stairways, parking structures, lots, loading and service areas and driveways,
storm and sanitary drainage systems, irrigation systems, elevators, escalators,
trash compactors, and Systems and Equipment, landscaping, and all other aspects
of the Property, including common area fixtures, equipment and other items
therein or thereon, doors, locks and hardware, windows, gutters, downspouts,
roof flashings and roofs. The foregoing provision is for definitional purposes
only and shall not be construed to impose any obligation upon Landlord to incur
such expenses, nor as a limitation as to other Expenses that Landlord may incur
with respect to the Property. Landlord may retain independent contractors (or
affiliated contractors at market rates) to provide any services or perform any
work, in which case the costs thereof shall be deemed Expenses. Expenses shall,
however, exclude:
(1) the following items: (a) interest and amortization on
Mortgages, and other debt costs or ground lease payments, if any, except as
provided herein, (b) depreciation of buildings and other improvements (except
permitted amortization of certain capital expenditures as provided below), (c)
legal fees in connection with leasing, tenant disputes or enforcement of leases,
(d) real estate brokers' commissions or marketing costs, (e) improvements or
alterations to tenant spaces, (f) the cost of providing any service directly to,
and paid directly by, any tenant, (g) costs of any items to the extent Landlord
receives reimbursement from insurance proceeds or from a warranty or other such
third party (such proceeds to be deducted from Expenses in the year in which
received); (h) items charged as Taxes under this Lease, (i) Mortgage principal,
interest or penalties or any other costs associated with the financing of the
Property, (j) leasing commissions, findees fees and all other leasing expenses
incurred in procuring tenants in the Property, including marketing, promotion
and advertising expenses in connection with leasing of space, (k) the cost of
constructing tenant improvements or installations for any tenant in the
Property, including any relocation costs, (1) expenditures for repairing and/or
replacing any defect in any tenant improvement work performed by Landlord
pursuant to the provisions of any lease for space in the Property, (m) lease
takeover or termination costs incurred by Landlord in connection with any lease
in the Property, including any tax payments required to be made in connection
therewith, (n) any amount (other than management fees) paid to any affiliate of
Landlord to the extent that such payments materially exceed competitive charges
from an equivalent quality provider that would have been paid at arms-length for
comparable services and goods, (o) expenses, fines, interest or penalties
payable by Landlord resulting from noncompliance with any Laws or late payment
of Taxes, unless caused by Tenant (in which case, Tenant shall pay the same as a
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separate obligation of Tenant and not as part of Expenses), (p) attorneys' fees
and disbursements incurred in connection with the leasing of space or
enforcement of leases in the Property (including without limitation the
enforcement of any lease or the surrender, termination or modification of any
lease of space in the Property), (q) attorneys' fees and disbursements and other
costs in connection with any judgment, settlement or arbitration award
(including arbitration fees and expenses) resulting from any tort or contract
liability on the part of Landlord and the amount of such settlement, judgment or
award, except for business related tort or contract liabilities where Tenant is
contributorily liable (in which case, Tenant shall pay its share of the same as
a separate obligation and not as part of Expenses), (r) Landlord's cost of any
utilities or services supplied to any tenant or occupant in the Property and for
which Landlord is directly reimbursed (other than through Expenses) as an
additional charge (provided Landlord may characterize payments received from a
tenant in connection with any lease surrender or cancellation as Landlord deems
appropriate without causing any such items to be excluded from Expenses), (s)
costs of acquiring, leasing or restoring any items in the nature of "fine art,"
(rather than decorative art work and seasonal decorations), (t) the cost of
repairs and replacements incurred by reason of fire or other casualty or
condemnation, to the extent Landlord is reimbursed therefor by insurance
proceeds or condemnation award, (u) rent paid under any ground lease or
underlying lease of the land beneath the Property (but including charges such as
Taxes and Expenses under this Lease), (v) any costs that duplicate costs for
which Landlord is reimbursed by Tenant under other provisions of this Lease)
expenses (including, without limitation, attorneys' fees and overtime pay)
incurred in curing a default by Landlord under this Lease or any other lease of
space in the Property, including, without limitation, a contract for services at
the Property, or under any mortgage or insurance policy affecting the Property,
but only to the extent that such expenses are greater than the expenses Landlord
would have incurred had Landlord timely performed such obligation, (x) to the
extent any costs that are otherwise permitted to be included in Expenses are
incurred with respect to both the Property and other properties (including,
without limitation, salaries, fringe benefits and other compensation of
Landlord's personnel who provide services to both the Property and such other
properties), there shall be excluded from Expenses a fair and reasonable
percentage thereof that is property allocable to such other properties, (y) the
cost of installing a cafeteria, auditorium, conference room, telecommunications
facility (such as a microwave dish or antenna) or other such facility and the
cost of operating and maintaining any such facility, if such facility is
operated by Landlord and not leased to a third party (except to the extent that
Landlord elects to credit revenues, if any, derived from such facilities against
Expenses), (z) any compensation paid to clerks, attendants or other persons in
commercial concessions operated by Landlord or any affiliate (except to the
extent that Landlord elects to credit revenues, if any, derived from such
concessions against Expenses), (aa) Landlord's general corporate overhead and
general and administrative expenses to the extent same are not specifically
incurred in connection with the ownership, management, repair, maintenance,
replacement, insurance and operation of the Property, and (bb) the costs of
curing or repairing any defects in the initial construction of the Building.
(2) capital expenditures, except those: (a) made primarily to
reduce Expenses or increases therein, or to comply with Laws or insurance
requirements (excluding capital expenditures to cure violations of Laws or
insurance requirements that existed prior to the Commencement Date or which
relate to the initial construction of the Building or the Property), or (b) for
replacements (as opposed to additions or new improvements) of roofs, parking
areas, and nonstructural items located in the common areas of the Property
required to keep such areas in good condition; provided, any such permitted
capital expenditure shall be amortized for purposes of this Lease (with interest
at the prevailing loan rate available to Landlord when the cost was incurred)
over: (x) the period during which the reasonably estimated savings in Expenses
equals the expenditure, if applicable, or (y) the useful life of the item as
reasonably determined by Landlord, but in no event less than five (5) years.
(E) "HAZARDOUS MATERIAL" shall include, but not be limited to: (i) any
flammable, explosive, toxic, radioactive, biological, corrosive or otherwise
hazardous chemical, substance, liquid, gas, device, form of energy, material or
waste or component thereof, (ii) petroleum-based products, diesel fuel, paints,
solvents, lead, radioactive materials, cyanide, biohazards, infectious or
medical waste and "sharps", printing inks, acids, DDT, pesticides, ammonia
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compounds, and any other items which now or subsequently are found to have an
adverse effect on the environment or the health and safety of persons or animals
or the presence of which require investigation or remediation under any Law or
governmental policy, and (iii) any item defined as a "hazardous substance",
"hazardous material", "hazardous waste", "regulated substance" or "toxic
substance" under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. ss.9601, et seq., Hazardous
Materials Transportation Act, 49 U.S.C. ss.1801, et seq., Resource Conservation
and Recovery Act of 1976, 42 U.S.C. ss.6901 et seq., Clean Water Act, 33 U.S.C.
ss.1251, et seq., Safe Drinking Water Act, 14 U.S.C. ss.300f, et seq., Toxic
Substances Control Act, 15 U.S.C. ss.2601, et seq., Atomic Energy Act of 1954,
42 U.S.C. ss.2014 et seq., and any similar federal, state or local Laws, and all
regulations, guidelines, directives and other requirements thereunder, all as
may be amended or supplemented from time to time.
(F) "LANDLORD" shall mean only the landlord from time to time, except
that for purposes of any provisions defending, indemnifying and holding Landlord
harmless hereunder, "Landlord" shall include past, present and future landlords
and their respective partners, beneficiaries, trustees, officers, directors,
employees, shareholders, principals, agents, affiliates, successors and assigns.
(G) "LAW" or "LAWS" shall mean all federal, state, county and local
governmental and municipal laws, statutes, ordinances, rules, regulations,
codes, decrees, orders and other such requirements, applicable equitable
remedies and decisions by courts in cases where such decisions are considered
binding precedents in the State in which the Property is located, and decisions
of federal courts applying the Laws of such State, at the time in question. This
Lease shall be interpreted and governed by the Laws of the State in which the
Property is located.
(H) "LENDER" shall mean the holder of any Mortgage at the time in
question, and where such Mortgage is a ground lease, such term shall refer to
the ground lessor (and the term "ground lease" although not capitalized is
intended throughout this Lease to include any superior or master lease).
(I) "MORTGAGE" shall mean all mortgages, deeds of trust, ground leases
and other such encumbrances now or hereafter placed upon the Property or
Building, or any part thereof, and all renewals, modifications, consolidations,
replacements or extensions thereof, and all indebtedness now or hereafter
secured thereby and all interest thereon.
(J) "PERSON" shall mean an individual, trust, partnership, limited
liability company, joint venture, association, corporation and any other entity.
(K) "PREMISES" shall mean the area within the Building identified in
Article 1 and EXHIBIT A. Possession of areas necessary for utilities, services,
safety and operation of the Property, including the Systems and Equipment, fire
stairways, perimeter walls, space between the finished ceiling of the Premises
and the sale of the floor or roof of the Property thereabove, and the use
thereof together with the right to install, maintain, operate, repair and
replace the Systems and Equipment, including any of the same in, through, under
or above the Premises in locations that will not materially interfere with
Tenant's use of the Premises, are hereby excepted and reserved by Landlord, and
not demised to Tenant.
(L) "PROPERTY" shall mean the Building, and any common or public areas
or facilities, easements, corridors, lobbies, sidewalks, loading areas,
driveways, landscaped areas, skywalks, parking rights, garages and lots, and any
and all other rights, structures or facilities
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