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LEASE

Lease Agreement

LEASE | Document Parties: RACKSPACE HOSTING, INC. | DuPont Fabros Technology, Inc | RACKSPACE US, INC | Safari Ventures LLC | Tarantula Interests LLC | TARANTULA VENTURES LLC You are currently viewing:
This Lease Agreement involves

RACKSPACE HOSTING, INC. | DuPont Fabros Technology, Inc | RACKSPACE US, INC | Safari Ventures LLC | Tarantula Interests LLC | TARANTULA VENTURES LLC

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Title: LEASE
Governing Law: Illinois     Date: 8/13/2009
Law Firm: McKenna Long;Cooley Godward    

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Exhibit 10.1

 

CONFIDENTIAL MATERIAL HAS BEEN OMMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISION.  BOXES AND ASTERIXES DENOTE SUCH OMISSION

 

 

 

 

 

 

 

 

 

 

 

 

 

LEASE

BY AND BETWEEN

TARANTULA VENTURES LLC

AND

RACKSPACE US, INC.

 

 

 

 

 

 

 

CH1 DATA CENTER

2200 BUSSE ROAD

ELK GROVE VILLAGE, ILLINOIS

 

 

 

 


 

CONFIDENTIAL MATERIAL HAS BEEN OMMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISION.  BOXES AND ASTERIXES DENOTE SUCH OMISSION

 

 

LEASE

 

This Lease (the “ Lease ”) is made as of the 31 st day of July, 2009 (the “ Lease Commencement Date ”) by and between Tarantula Ventures LLC , a Delaware limited liability company (hereinafter referred to as “ Landlord ”), and Rackspace US, Inc. , a Delaware corporation (hereinafter referred to as “ Tenant ”).

 

RECITALS:

 

A.            Landlord has constructed a data center facility known as “ CH1 Phase I ”, located in 2200 Busse Road, Elk Grove Village, Illinois (the “ Building ”) situated on certain real property owned by Landlord legally described on Exhibit A attached hereto (the “ Land ”).  The Building and the Land shall constitute the “ Property ”.

 

B.            CH1 Phase I contains approximately two hundred fifty-three thousand (253,000) gross square feet, comprised in part of approximately one hundred twenty-one thousand (121,000) square feet of raised floor area, and has 18.2 megawatts of Critical Load Power (as defined in Section 13.2 below) available to it.  The raised floor space in CH1 Phase I is divided into computer rooms of varying sizes (each a “ Pod ”).

 

C.            Adjoining the Building is an office building (the “ Office Building ”).  Moreover, the Building and Land contain additional space sufficient to construct another data center facility (“ CH1 Phase II ”) which Landlord (in its sole discretion) may, but shall be under no obligation to, construct.

 

D.            The Tenant desires to lease a portion of the rentable area of said Building and a portion of the rentable area of said Office Building, and Landlord is willing to rent such portion of the rentable area of said Building and such portion of the rentable area of said Office Building to Tenant, upon the terms, conditions, covenants and agreements set forth herein.

 

Now, Therefore , the parties hereto, intending to be legally bound, hereby covenant and agree as follows:

 

ARTICLE I

 

THE PREMISES

 

1.1   Landlord hereby leases and demises to Tenant and Tenant hereby leases and accepts from Landlord, for the term and upon the terms and conditions hereinafter set forth, the space in CH1 Phase I designated on the floor plan attached hereto as Exhibit B as computer rooms 1, 5, 6, 7 and 8 (“ Pod 1 ”, “ Pod 5 ”, “ Pod 6 ”, “ Pod 7 ”, and “ Pod 8 ”, respectively; each, a “ Pod ”; collectively, the “ Pods ”).  Pod 1 contains approximately two thousand seven hundred

 

 


 

CONFIDENTIAL MATERIAL HAS BEEN OMMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISION.  BOXES AND ASTERIXES DENOTE SUCH OMISSION

 

 

(2,700) rentable square feet of raised floor and each of Pod 5, Pod 6, Pod 7 and Pod 8 contains approximately eight thousand five hundred (8,500) rentable square feet of raised floor.  The Pods, together with the Office Space (defined below) and the Storage Space (defined below) are hereinafter referred to as the “ Premises ”.  Subject to the terms and provisions of Section V below, Tenant shall at all times throughout the Lease Term, have access to the Premises twenty-four (24) hours per day, seven (7) days per week.

 

1.2   Subject to the terms of this Lease, Tenant shall also have the right to use the public and common areas and facilities in the Building and the Office Building and on the Land (the “ Common Areas ”), including any lobby area, the loading dock and any other areas devoted to the public such as corridors, fire vestibules, restrooms, janitor closets and other similar facilities, and those areas of the Building and the Office Building provided for use in common by Landlord and Tenant and other tenants of the Building and Office Building, whether or not any such area is open to the general public, but includes no other rights not specifically set forth herein.  In addition, Tenant shall have the right, to the extent reasonably necessary in order for Tenant to use the Premises for Permitted Uses (as defined in Section 6.1 below), upon request to Landlord whenever practicable, (but in all cases subject to Landlord’s reasonable security procedures), to access the telephone rooms located in the Building and the Office Building.  Tenant shall have the right to access the mechanical and electrical rooms and closets located in the Building and the Office Building, to the extent such access is reasonably necessary or desirable in connection with Tenant’s use of the Premises for the Permitted Uses, subject to Landlord’s approval, not to be unreasonably withheld or delayed and subject further to Landlord’s reasonable security procedures.

 

1.3   Landlord hereby leases to and demises to Tenant and Tenant hereby leases and accepts from Landlord for the period beginning on the Rent Commencement Date and ending upon the expiration of the Lease Term (defined below) (the “ Office Space Term ”) and upon the terms and conditions hereinafter set forth, office space in the Office Building consisting of approximately eight thousand four hundred eighty-four (8,484) rentable square feet on the first floor of the Office Building, as more particularly described on the floor plan attached hereto as Exhibit B-1 (the “ Office Space ”).  Tenant shall occupy the Office Space in two (2) phases (“ Office Space Phase I ” and “ Office Space Phase II ”).  It is anticipated that Office Space Phase I will consist of approximately five thousand three hundred eighty-five (5,385) rentable square feet and Office Space Phase II approximately three thousand ninety-nine (3,099) rentable square feet, provided that the exact area of the two phases shall be as mutually agreed between Landlord and Tenant within thirty (30) days after the Lease Commencement Date.  Provided Landlord [*****] delivers the Office Space to Tenant as provided herein below, Tenant shall be obligated to take occupancy of Office Space Phase I on the Rent Commencement Date, and Office Space Phase II on the earlier to occur of (i) [*****] or (ii) such earlier date as requested by Tenant upon one hundred twenty (120) days advance written notice (the “ Office Space Phase II Notice ”) to Landlord (“ Office Space Phase II Commencement Date ”).  Except as otherwise expressly provided herein, the Office Space shall be considered a part of the Premises for all purposes hereunder.  [*****].  Notwithstanding anything to the contrary contained herein, in the event Landlord does not deliver the Office Space Phase I [*****] broom clean, with a security

 

 

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access card reader allowing entry only to persons on the Tenant Access List pursuant to Article V below, on the Rent Commencement Date, then Tenant’s obligation to commence paying Office Rent in accordance with Section 3.3 below shall be delayed until the date on which Landlord delivers the Office Space Phase I to Tenant as aforesaid.  Further notwithstanding anything to the contrary contained herein, in the event Landlord does not deliver the Office Space Phase II [*****] broom clean, on the Office Space Phase II Commencement Date, then Tenant’s obligation to commence paying full Office Rent in accordance with Section 3.3 below [i.e., that portion of Office Rent allocable to Office Space Phase II] shall be delayed until the date on which Landlord delivers the Office Space Phase II to Tenant as aforesaid.

 

1.4   Landlord hereby leases to and demises to Tenant and Tenant hereby leases and accepts from Landlord for the period beginning on the Rent Commencement Date (“ Storage Space Commencement Date ”) and ending upon the expiration of the Lease Term (the “ Storage Space Term ”), and upon the terms and conditions hereinafter set forth, storage space in the Building consisting of Storage Room No. 1001-A (containing approximately one thousand six hundred (1,600) square feet), as more particularly described on the floor plan attached hereto as Exhibit B (the “ Storage Space ”).  Except as otherwise expressly provided herein, the Storage Space shall be considered a part of the Premises for all purposes hereunder.  Notwithstanding anything to the contrary contained herein, in the event Landlord does not deliver the Storage Space broom clean, with a security access card reader allowing entry only to persons on the Tenant Access List pursuant to Article V below, and with appropriate demising walls (walls consist of coated and painted steel mesh), on the Storage Space Commencement Date, then Tenant’s obligation to commence paying Storage Rent in accordance with Section 3.3 below shall be delayed until the date on which Landlord delivers the Storage Space to Tenant as aforesaid.

 

ARTICLE II

 

TERM

 

2.1   Except as otherwise set forth herein, all of the provisions of this Lease shall be in full force and effect from and after the Lease Commencement Date.  The term of this Lease (hereinafter referred to as the “ Lease Term ” or “ Term ”) shall commence on the Rent Commencement Date, as determined pursuant to Section 2.2 below, and continue for a period of fifteen (15) years thereafter, unless such Lease Term shall be extended, renewed or terminated earlier in accordance with the provisions hereof.  Notwithstanding the foregoing, if the Rent Commencement Date shall occur on a day other than the first day of a month, the Lease Term shall commence on such date and continue for the balance of such month and for a period of fifteen (15) years thereafter.  The term “ Lease Term ” shall include any properly exercised renewals and extensions of the term of this Lease.

 

2.2   (a)           The “ Rent Commencement Date ” shall be the earlier of (i) November 1, 2009 (the “ Anticipated Rent Commencement Date ”) or (ii) the date on which Tenant commences the conduct of its business upon any portion of the Premises, but only with respect to such portion.  Landlord represents that as of the Lease Commencement Date, the following items

 

 

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have been completed, obtained and/or are true, as applicable, and Landlord warrants and covenants that the same will be completed, in effect and/or true, as applicable, as of the Rent Commencement Date:  (I) Landlord’s Work (as hereinafter defined) [*****] has been substantially completed in accordance with Section 9.1 below; (II) all mechanical and electrical systems for each Pod, and all components thereof, including, without limitation, power distribution units (“ PDUs ”), power distribution boards, computer room air conditioning units (“ CRACs ”) and other components of the HVAC system, uninterruptible power systems (“ UPSs ”), EPO kiosks, and back-up diesel engine generators (“ Engine Generators ”), and the Security Systems (as hereinafter defined) and Building Management System (as hereinafter defined), are in good working order; (III) data center level 4 testing and level 5 commissioning have been completed with respect to all mechanical and electrical systems for each Pod as certified by EYP Mission Critical Facilities, the Building engineer; and (IV) a certificate of occupancy and any other required occupancy and/or use permits have been issued by Cook County and/or such other applicable governmental authority for the Building, including the Pods.  For avoidance of doubt, except as otherwise expressly provided in Section 2.4 below, the Early Access (as hereinafter defined), the Electrical and Mechanical Systems Testing (as hereinafter defined) and Tenant’s performance of Tenant’s Installations (as hereinafter defined) shall not constitute the conduct of Tenant’s business upon any portion of the Premises.

 

(b)   [*****].  Notwithstanding the foregoing, 5.633 megawatts of Critical Load Power will be available to the Premises as of the Rent Commencement Date, and Tenant may use more than the applicable Phase Load Limit, up to 5.633 megawatts, at any time during the Lease Term, subject to and in accordance with the terms and provisions of this Section 2.2(b).  [*****].

 

(c)   Notwithstanding anything to the contrary contained herein, in the event Landlord or an affiliate of Landlord fails to complete Tenant’s Deployment Work to the extent required to support the delivery of Phase 1 in accordance with Section 2.2(b) above on or prior to the Anticipated Rent Commencement Date, then the Rent Commencement Date shall be delayed until the date on which such condition is satisfied or completed as provided herein.  Notwithstanding the foregoing, if Landlord shall be delayed in satisfying the condition set forth herein above as a result of delays caused by Tenant, then, for purposes of determining when such condition is satisfied, such condition shall be deemed satisfied on the date such condition would have been satisfied absent any such Tenant-caused delay.  Within ten (10) days after the occurrence of a Tenant-caused delay, Landlord shall notify Tenant in writing of such Tenant-caused delay.  If Landlord fails to so notify Tenant within said ten (10) day period and such failure to notify continues for twenty (20) days thereafter, then Landlord shall be deemed to have waived and excused any such Tenant-caused delay.

 

(d)   Promptly after the Rent Commencement Date and the commencement of each subsequent Phase are ascertained, Landlord and Tenant shall execute a written declaration setting forth, as applicable, the Rent Commencement Date, the commencement date of each subsequent Phase (subject to the provisions of Section 2.2(b) above), and the date upon which

 

 

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the Lease Term and the applicable Phase will expire.  The form of such declaration is attached hereto as Exhibit C and made a part hereof.

 

2.3   For purposes of this Lease, the term “ Lease Year ” shall mean either (a) if the Rent Commencement Date shall not occur on the first day of a calendar month, each period of twelve (12) consecutive calendar months commencing on the first day of the month immediately following the month in which the Rent Commencement Date occurs, and on each anniversary of such date, provided that the first Lease Year shall also include the period from the Rent Commencement Date to the first day of the month immediately following the Rent Commencement Date; or (b) if the Rent Commencement Date shall occur on the first day of a calendar month, each period of twelve (12) consecutive calendar months commencing on the Rent Commencement Date and on each anniversary of such date, whichever is applicable.

 

2.4   Landlord shall permit Tenant to enter the Premises starting on the Lease Commencement Date (the “ Early Access ”), in order to commence installation of racks, infrastructure, furniture and other equipment in the Premises (“ Tenant’s Installations ”) provided that, prior to commencing any such work in the Premises, Tenant shall comply in all respects with the requirements of Article IX below.  In performing Tenant’s Installations during Tenant’s Early Access, Tenant shall be permitted to use [*****] and normal, non-Critical Load Power in the Premises, at its expense, for installation and testing.  Except as otherwise expressly provided herein below, [*****], Tenant will be deemed to have commenced the conduct of its business for purposes of subpart (ii) of the first sentence of Section 2.2(a) hereof, provided, that Landlord shall not be required to give Tenant more than one (1) such notice and opportunity to cure during Early Access.  All terms and conditions of this Lease, as executed, shall apply to Tenant’s Early Access, [*****].  Notwithstanding anything to the contrary contained herein, Landlord acknowledges and agrees that: (a) Tenant, at Tenant’s sole cost and expense pursuant to a separate agreement between Tenant and DFTS (as hereinafter defined), shall be permitted during the Early Access to perform certain testing reasonably agreed to by Landlord, Tenant and DFTS, with respect to the electrical and mechanical systems for the Building and the Pods (the “ Electrical and Mechanical Systems Testing ”), and (b) the use of Critical Load Power, including the use of [*****], in the Premises for any period of time in connection with such Electrical and Mechanical Systems Testing shall not be considered the conduct of Tenant’s business for purposes of subpart (ii) of the first sentence of Section 2.2(a) above.

 

ARTICLE III

 

BASE RENT

 

3.1   Commencing on the Rent Commencement Date, Tenant shall pay to Landlord as monthly base rent (“ Base Rent ”), net of all Operating Expenses (which term is defined in Section 4.2 below), without set off, deduction (unless otherwise expressly agreed to herein) or demand, an amount equal to [*****] on the date that such monthly Base Rent is due and payable subject to annual adjustment pursuant to Section 3.2 below.  The monthly Base Rent payable hereunder shall be due and payable in advance on the first day of each month.  Payment of monthly Base Rent for any fractional calendar month shall be prorated.  [*****].

 

 

 

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3.2 The Base Rent Rate shall be escalated on the first day of the second (2nd) Lease Year and each anniversary of such date thereafter during the Lease Term (each, an “ Escalation Date ”) by [*****].

 

3.3   Subject to the terms and provisions of Section 1.3 above, commencing on later to occur of (i) the Rent Commencement Date, or (ii) the date on which [*****], in addition to the monthly Base Rent set forth in Section 3.1 above, Tenant shall, subject to adjustment as set forth in Section 1.3 above [*****], pay to Landlord monthly base rent in the amount of [*****] for the Office Space (the “ Office Rent ”); provided, however, that subject to the terms and provisions of Section 1.3 above, until the Office Space Phase II Commencement Date occurs Tenant shall be obligated to pay only a pro-rata share of Office Rent based on the ratio of the area of Office Space Phase I over the total area of the Office Space.  Subject to the terms and provisions of Section 1.4 above, commencing on the Rent Commencement Date, Tenant shall pay to Landlord monthly base rent in the amount of [*****] for the Storage Space (the “ Storage Rent ”).  The Office Rent and Storage Rent shall be due and payable in advance of the first day of each month.  The Office Rent and Storage Rent shall be increased each Lease Year as and when Base Rent is increased pursuant to Section 3.2 above.  Payments of Office Rent and/or Storage Rent for any fractional calendar month shall be prorated.

 

3.4   All rent shall be paid to Landlord in legal tender of the United States at the address to which notices to Landlord are to be given or to such other address as Landlord may designate from time to time by written notice to Tenant.  If Landlord shall at any time accept rent after it shall come due and payable, such acceptance shall not excuse a delay upon subsequent occasions, or constitute or be construed as a waiver of any of Landlord’s rights hereunder.

 

ARTICLE IV

 

ADDITIONAL RENT

 

4.1   From and after the Rent Commencement Date, Tenant shall pay as additional rent, (i) its Pro Rata Share of Operating Expenses (as defined in Section 4.2(a) below) incurred each year in the operation of CH1 Phase I and (ii) a management fee for the management and operation of CH1 Phase I equal to [*****] (the “ Management Fee ”).  Tenant’s “ Pro Rata Share ” shall mean thirty and ninety-five one hundredths percent (30.95%).  Commencing on the Rent Commencement Date, [*****], Tenant shall pay the Management Fee and Tenant’s Pro Rata Share of all Operating Expenses for CH1 Phase I with respect to the entire Premises [*****].  If Landlord elects to construct CH1 Phase II and to operate CH1 Phase I and CH1 Phase II as an integrated facility, upon completion of CH1 Phase II, Tenant’s Pro Rata Share shall be reduced to the ratio of the Critical Load Power available to the Premises compared to the Critical Load Power available, in the aggregate, to both CH1 Phase I and CH1 Phase II.  [*****].

 

4.2   (a)           “ Operating Expenses ” shall, subject to the exclusions set forth below, mean and include those direct reasonable expenses actually incurred (directly or indirectly) by Landlord in operating and maintaining the Property (or any portion thereof), but only to the extent directly attributable or reasonably allocable to CH1 Phase I calculated in accordance with

 

 

 

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generally accepted accounting principles and real property management practices, both consistently applied, including the following:  [*****].  Notwithstanding the foregoing to the contrary, Operating Expenses shall not include (i) the cost of any capital improvement to the Property other than those included in clause (5) above; (ii) expenses Landlord incurs in connection with leasing or procuring tenants or renovating space for new or existing tenants, including brokerage commissions, legal fees, lease concessions, rental abatements and construction allowances; (iii) costs and fees including, without limitation, legal fees, incurred in disputes with Tenant or other tenants at the Building, in connection with enforcing leases at the Building and/or in connection with violations of laws by Landlord with respect to the Property; (iv) interest or principal payments on any mortgages or, subject to clause (5) above, other indebtedness of Landlord; (v) ground lease payments; (vi) the cost of repairs or other work to the extent Landlord is reimbursed by insurance (or would have been reimbursed had Landlord maintained the insurance coverages required in Article 12 below) or condemnation proceeds; (vii) costs incurred in connection with the sale, financing or refinancing of the Building; (viii) organizational expenses associated with the creation and/or operation of the ownership entity which constitutes Landlord; (ix) Landlord’s administrative costs; (x) advertising, promotion, charitable and tenant relations expenses; (xi) any amount for which Landlord receives payment directly by a tenant or non-tenant other than as an Operating Expense; (xii) the cost of correcting defects in the original construction or any renovation of the Building; (xiii) the cost of maintaining, repairing and/or replacing the foundation, roof, exterior walls and/or any other structural element of the Building; (xiv) depreciation (except to the extent permitted in clause (5) above); (xv) costs associated with the cleanup or removal of Hazardous Materials that are in existence as of the Lease Commencement Date in violation of applicable laws; and (xvi) costs for which Landlord is compensated by warranties.  For avoidance of doubt, Landlord and Tenant acknowledge and agree that, other pursuant to Section 4.2(c) below, Operating Expenses shall not include any costs or expenses associated with the Office Building.

 

(b)   Taxes ” shall mean and include (i) all taxes on real property and personal property, ad valorem taxes, surcharges, general and special assessments and impositions, general and special, ordinary and extraordinary, foreseen or unforeseen, of any kind levied or imposed upon Landlord, the Building or the Land, or assessed against the Property or any machinery, equipment, fixtures or other personal property of Landlord thereon or therein, or in connection with the use thereof (including any transit, personal property, sales, rental, use, gross receipts and occupancy tax and other similar charges); (ii) any other present or future taxes or governmental charges which are imposed upon Landlord or assessed against the Building or the Land, and which are in the nature of, or in substitution for, real property taxes, including any tax levied on or measured by rents payable by tenants of the Property, any public safety fee or similar charge, any transit, sales, receipts, rental, use or occupancy tax or fee, and any assessment imposed in connection with business improvement, transportation or similar districts; (iii) any assessments against the Building or the Land, or against Landlord with respect to the Building or the Land, by any association now or hereafter established to administer, oversee or enforce common covenants or other rules and regulations to which the Building, Land or common areas are subject or to operate, maintain, repair or replace common or public areas or facilities thereof; and (iv) all taxes which are imposed upon Landlord, and which are assessed against the value of any

 

 

 

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improvements to the Premises made by Tenant or any machinery, equipment, fixtures or other personal property of Tenant used therein.  Notwithstanding anything to the contrary contained herein, taxes shall not include any income taxes, excess profits taxes, excise taxes, franchise taxes, estate taxes, inheritance taxes, succession taxes, gains taxes, grantor’s taxes, recordation taxes and/or transfer taxes, except to the extent such taxes fall within clause (ii) above.  If the Land and all buildings comprising the Complex are assessed together, then the Taxes for CH1 Phase I shall be a fraction of such Taxes, such fraction to be based upon a fair and equitable allocation determined in Landlord’s reasonable discretion.  The tax and assessment bills used in calculating Tenant's obligation attributable to Taxes in a given Lease Year shall be those which become due for payment during such Lease Year, without regard to the period for which the Taxes are levied or assessed and without regard to whether or not the Lease was in existence during such period.  Landlord and Tenant agree and acknowledge that the Property is located in Cook County, Illinois, and that Cook County real property taxes are customarily billed and payable one (1) year in arrears.  If Landlord contests Taxes for any calendar year contained within the Lease Term and such contest results in a decrease in Taxes for such calendar year, then Landlord shall credit against the monthly installments of Base Rent next coming due Tenant’s proportionate share of such refund, but only up to an amount equal to the payment made by Tenant for such calendar year on account of Taxes.  If Landlord contests the Taxes for any calendar year and such contest results in an increase in Taxes for such calendar year, Landlord shall have the right to bill Tenant for prior underpayments of Taxes thereby resulting.  Landlord’s and Tenant’s obligations under this Section 4.2(b) shall survive the expiration or earlier termination of the Lease Term.

 

(c)   CH1 Phase I is operated as part of a complex that includes:  (i) the Office Building; (ii) the Building; (iii) the portion of the structure, of which the Building is a part,  remaining for construction of CH1 Phase II; and (iv) the vacant future development site located at the northwestern corner of the Land (collectively the “ Complex ”).  As a result, there shall be included in Operating Expenses a fraction of Complex Common Area Expenses, which fraction shall be based on a fair and equitable allocation reasonably determined by Landlord.  As used above, the term “ Complex Common Area Expenses ” shall mean those Operating Expenses incurred by Landlord in owning, operating and/or managing the common areas of the Complex, including common parking areas and facilities (as opposed to those Operating Expenses related exclusively to CH1 Phase I), but only to the extent directly attributable or reasonably allocable to CH1 Phase I.

 

(d)   Notwithstanding anything to the contrary contained herein, Landlord shall use commercially reasonable efforts to minimize Operating Expenses without compromising the integrity of the Building, the Premises or the services Landlord is required to provide under the Lease.  Furthermore, Landlord shall pay, promptly when due, all Taxes relating to the Property.

 

4.3   If the Lease Term commences or expires on a day other than the first day or the last day of a calendar year, respectively, then Tenant’s Pro Rata Share of Operating Expenses shall be apportioned so that Tenant shall pay Tenant’s Pro Rata Share of Operating Expenses

 

 

 

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attributable to only that portion of such year as falls within the Lease Term.  This Section 4.3 shall survive the expiration or earlier termination of this Lease.

 

4.4   In the event the average occupancy rate for the entire Building shall be less than one hundred percent (100%), or if any tenant is paying separately for electricity or other utilities or services furnished to its premises, then, for purposes of calculating the additional rent payable by Tenant pursuant to this Article IV for each calendar year, the Operating Expenses for such calendar year that fluctuate depending on the level of occupancy of the Building shall be increased by the amount of additional costs and expenses that Landlord reasonably estimates would have been incurred if the average occupancy rate for the entire Building had been one hundred percent (100%) and as if no tenants had separately paid for electricity or other utilities and services for such calendar year.  It is the intent of this provision to permit Landlord to recover Operating Expenses attributable to occupied space in the Building only, even though the aggregate of such expenses shall have been reduced as a result of vacancies in the Building.  This Section 4.4 shall not be construed to permit Landlord to, and Landlord shall not, recover from Tenant additional rent on account of Operating Expenses for any calendar year which when added to the total amount of additional rent payable by all tenants of the Building on account of Operating Expenses for such year, will exceed the actual Operating Expenses incurred by Landlord for such year.

 

4.5   Subject to Section 4.3 above, commencing on the Rent Commencement Date and on the first day of each month thereafter, Tenant shall make estimated monthly payments to Landlord on account of the Operating Expenses that are expected to be incurred during each calendar year falling entirely or partially within the Lease Term.  The amount of such monthly payments shall be determined as follows: commencing with the Rent Commencement Date and at the beginning of each calendar year thereafter, Landlord shall submit to Tenant a statement setting forth Landlord’s reasonable estimate of the Operating Expenses that are expected to be incurred during such calendar year and Tenant’s Pro Rata Share thereof (as determined in accordance with Section 4.1 hereof).    Except with respect to charges for heat rejection HVAC (as defined below in Section 13.2(i)), which shall be paid by Tenant pursuant to Section 13.4 below, Tenant shall pay to Landlord on the first day of each month following receipt of such statement during such calendar year an amount equal to Tenant’s Pro Rata Share of the anticipated Operating Expenses multiplied by a fraction, the numerator of which is one (1) and the denominator of which is twelve (12).  Except with respect to estimated charges for heat rejection HVAC, which shall be reconciled in accordance with Section 13.4 below, within approximately ninety (90) days, but not later than one hundred fifty (150) days, after the expiration of each calendar year, Landlord shall submit to Tenant a statement (the “ Reconciliation Statement ”), showing (i) the Operating Expenses actually incurred during the preceding calendar year and Tenant’s Pro Rata Share thereof, and (ii) the aggregate amount of the estimated payments made by Tenant on account thereof.  If the aggregate amount of such estimated payments exceeds Tenant’s actual liability for such Operating Expenses, then Landlord shall credit the net overpayment against the next monthly installment(s) of Additional Rent coming due under this Lease (except that any such overpayment during the last calendar year falling wholly or partly within the Lease Term shall be promptly refunded to Tenant by

 

 

 

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Landlord).  If Tenant’s actual liability for such Operating Expenses exceeds the estimated payments made by Tenant on account thereof, then Tenant shall pay to Landlord the total amount of such deficiency within thirty (30) days after its receipt of the applicable Reconciliation Statement from Landlord.  The provisions of this paragraph shall survive the expiration or earlier termination of this Lease.  [*****].

 

4.6   Provided no Event of Default exists hereunder, Tenant or an independent certified public accountant (on behalf of Tenant) reasonably approved by Landlord, shall have the right, during regular business hours, at the metropolitan [ Washington, D.C. ] [ Chicago, Illinois ] area management office for the Building, and after giving at least fifteen (15) days’ advance written notice to Landlord, to commence to have Landlord’s books and records related to Operating Expenses for the immediately preceding calendar year reviewed (and if so commenced, to diligently pursue such review to completion), provided that such review shall be concluded not later than nine (9) months following the date of Tenant’s receipt of the Reconciliation Statement for the year to which such review relates, so long as Landlord’s books and records remain reasonably available for review by Tenant and/or Tenant’s accountant.  In connection therewith, Landlord shall maintain its books and records in a commercially reasonable condition, capable of being audited by Tenant and/or its accountant.  If Landlord disagrees with the results of Tenant’s review and audit, then Landlord and Tenant’s auditor shall together select a neutral auditor of similar qualifications to conduct a review of such books and records (the fees of such neutral auditor to be shared equally by Landlord and Tenant), and the determination of Operating Expenses reached by such neutral auditor shall be final and conclusive.  Notwithstanding anything to the contrary contained herein, in the event Landlord does not contest Tenant’s review and audit within forty-five (45) days after receipt thereof, then Landlord shall be deemed to have approved such review and audit.  If the amounts paid by Tenant to Landlord on account of Operating Expenses (a) exceed the amounts to which Landlord is entitled hereunder, then Landlord shall credit the amount of such excess toward the next monthly payment(s) of Additional Rent due hereunder, or (b) are less than the amounts to which Landlord is entitled hereunder, then Tenant shall pay such deficiency as Additional Rent within thirty (30) days after final determination of said Operating Expenses and receipt of written request.  Excluding the fees of any neutral auditor selected by the parties hereto as aforesaid, which shall be shared equally by Landlord and Tenant, all costs and expenses of any such review by Tenant and/or Tenant’s accountant shall be paid by Tenant; provided, however, that if the amount of Operating Expenses used in such Reconciliation Statement to calculate Tenant’s Proportionate Share thereof was overstated by Landlord by more than five percent (5%), Landlord shall, within thirty (30) days after receipt of written request from Tenant, accompanied by back-up documentation reasonably acceptable to Landlord, reimburse Tenant for the commercially reasonable, out of pocket hourly or flat fee costs and expenses paid by Tenant in connection with Tenant’s review.  Any and all information obtained through any such review (including without limitation, any matters pertaining to Landlord, its managing agent or the Building), and any compromise, settlement or adjustment that may be proposed or reached between Landlord and Tenant as a result of such review, shall be held in strict confidence, and neither Tenant nor any of Tenant’s Agents shall disclose any such information to any person or entity other than a Permitted Recipient.  A “ Permitted Recipient ” shall be the officers, directors, partners and employees of

 

 

 

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Tenant, Tenant’s certified public accountants who have responsibilities related to Operating Expenses, Tenant’s attorneys  involved with the Lease or such review, any employees of Tenant’s auditor involved with such review, or any person or entity to whom disclosure is required by applicable judicial or governmental authority.  Prior to disclosing any such information to any Permitted Recipient (including its auditor), Tenant shall instruct such Permitted Recipient to abide by this confidentiality provision.  Notwithstanding anything herein to the contrary, if Tenant does not notify Landlord in writing of any objection to an annual Operating Expenses Reconciliation Statement within one hundred fifty (150) days after receipt thereof, then Tenant shall be deemed to have waived any such objection and shall have no right to review Landlord’s books and records related to Operating Expenses that are the subject of such Reconciliation Statement; [*****].

 

ARTICLE V

 

SECURITY

 

5.1   Landlord shall provide the following security services and operate and maintain, in a manner consistent with a first-class data center, the following systems with respect to the Office Building, the Building and the Premises, the cost of which shall be included in Operating Expenses if and to the extent permitted under Article IV above: (i) administration of Office Building perimeter security and Building perimeter security including, without limitation, the Common Areas, (ii) monitoring and administration of the Building’s access card system and the Office Building’s access card system, (iii) monitoring and oversight of loading dock security and the parking lot located on the Land (the “ Parking Lot ”), (iv) monitoring and operation of security cameras throughout the Office Building and throughout the Building, and (v) monitoring of the routes of ingress to, and egress from, the Premises, the Building and the Office Building (the “ Security Systems ”).

 

5.2   Tenant shall have the right to, subject to Article IX hereof, install, manage and/or maintain, at its sole cost and expense, security services and systems to protect the Premises and vault environments including, without limitation, a secondary security perimeter within the Premises and electronic “key card” security system and/or biometric access system, in addition to the standard Building, Office Building and Property security services provided by Landlord.  Tenant agrees that such security systems shall not (i) limit Landlord’s ability to access the space in the event of an emergency or to perform routine maintenance, subject to Section 11.1 hereof and Exhibit F attached hereto, or (ii) materially, adversely affect any area outside of the Premises.  Tenant shall, upon ten (10) days’ advance written notice to Landlord, have the right to obtain, at no additional cost to Tenant, monthly reports from Landlord regarding entry data and card access for: (a) each person on the Tenant Access List (as hereinafter defined) that enters the

 

 

 

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Building and Office Building and (b) each person that enters the Premises.  Tenant shall, further, have the right to request entry data, review video and card access for the Premises, the Building, the Office Building and the Parking Lot, as situations dictate to resolve its own reasonable security concerns or support any necessary personnel inquires, and Landlord or the Management Company (defined in Section 13.5 below) shall use commercially reasonable efforts to furnish all such records, all subject to availability, no more than forty-eight (48) hours after such request by Tenant.

 

5.3   Notwithstanding anything to the contrary contained herein, if (i) any breach of security in the Premises shall occur, (ii) any Service Interruption (as defined in Section 13.8 below) shall occur, or (iii) any other event adversely impacting the operation of the Premises occurs, Tenant shall immediately provide notice to Landlord via (a) email to the following (twenty-four (24) hours per day, seven (7) days per week and three hundred sixty-five (365) days per year) [*****] and (b) telephone call to the following (twenty-four (24) hours per day, seven (7) days per week and three hundred sixty-five (365) days per year) Landlord’s Emergency/Security Response Center [*****] and/or such other email address and/or phone number as Landlord shall from time to time notify Tenant in writing (“ Landlord’s Emergency Contacts ”).

 

5.4   Notwithstanding anything to the contrary contained herein, if (i) any breach of security in the Building and/or the Premises shall occur, (ii) any Service Interruption (as hereinafter defined) and/or reductions in levels of redundancy as provided in Section 13.2 below shall occur, or (iii) any other event adversely impacting the operation of the Premises and/or the Building occurs, Landlord shall immediately provide notice to Tenant via (a) email to [*****] (twenty-four (24) hours per day, seven (7) days per week and three hundred sixty-five (365) days per year) and (b) telephone call to [*****] (twenty-four (24) hours per day, seven (7) days per week and three hundred sixty-five (365) days per year), and/or to such other email address and/or phone number as Tenant shall from time to time notify Landlord in writing  (“ Tenant’s Emergency Contacts ”).

 

5.5   Tenant shall provide to Landlord an access list (as updated and/or modified from time to time by Tenant, the “ Tenant Access List ”) designating employees of Tenant and Permitted Licensees (defined in Section 7.6 below) that are permitted to enter the Premises.  Each Tenant employee/Permitted Licensee designated by Tenant on the Tenant Access List shall receive a permanent access badge (an “ Access Badge ”).  [*****]. Tenant shall be solely responsible for updating the Tenant Access List and providing any changes to Landlord.  In the event that any Tenant employee or Permitted Licensee is removed from the Tenant Access List by Tenant or no longer requires access to the Premises for any reason, Tenant shall return such Tenant employee/Permitted Licensee’s Access Badge to Landlord promptly.  Landlord agrees and acknowledges that: (a) the contents of the Tenant Access List and/or the identities of those parties visiting the Premises shall remain strictly confidential and shall not be disclosed to any other party, other than the Management Company, without the prior written consent of Tenant, and (b) Landlord shall destroy, and not re-use, any and all Access Badges returned by Tenant to Landlord as aforesaid.  If any person seeking to gain access to the Premises is not on the Tenant

 

 

 

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Access List, then such person shall be refused access to the Premises; provided, however, that, so long as an employee or representative of Tenant has escort authorization as specifically indicated on the Tenant Access List, such employee and/or representative may escort any visitor, including, without limitation, any vendor, supplier, partner, customer or prospective customer of Tenant, that is not on the Tenant Access List to and/or within the Premises.  Without limiting the foregoing, in no event shall Landlord permit any representative or employee of Tenant that does not have escort authorization to escort any person that is not on the Tenant Access List to and/or within the Premises.  Notwithstanding anything to the contrary contained herein, Landlord shall have the right, at any time, to require the immediate removal of any employee, agent, representative, and/or contractor of Tenant, including, but not limited to, persons included on the Tenant Access List, from: (i) the Building or the Land for disruptive behavior or safety concerns occurring on the Property outside of the Premises or (ii) the Premises for material interference with Landlord’s performance of its obligations within the Premises, as determined in the sole but reasonable discretion of Landlord.  [*****].  Landlord will provide a security orientation for its non-employee, third-party contractors, consultants, technicians and other personnel (excluding Tenant, Permitted Licensees or any of Tenant’s employees, agents or invitees) that will have access to the Premises.  [*****].

 

5.6   [*****].

 

ARTICLE VI

 

USE OF PREMISES

 

6.1   Tenant shall use and occupy the Premises solely for data center computing, hosting and managed services purposes (including Permitted Interconnections (as defined in Section 7.6 below)) and uses accessory thereto, including, without limitation, general office, storage, assembly, and repair (“ Permitted Uses ”), and for no other use or purpose.  Tenant shall not use or occupy the Premises for any unlawful purpose, or in any manner that will violate the certificate of occupancy for the Premises or the Building or that will constitute waste, nuisance or unreasonable annoyance to Landlord or any other tenant or user of the Building, or in any manner (other than the Permitted Uses) that will increase the number of parking spaces required for the Building as required by law.  Tenant’s use of the Premises shall comply with all present and future laws (including, without limitation, the Americans with Disabilities Act (the “ ADA ”) and the regulations promulgated thereunder, as the same may be amended from time to time), ordinances (including without limitation, zoning ordinances and land use requirements), regulations, orders and recommendations (including, without limitation, those made by any public or private agency having authority over insurance rates) (collectively, “ Laws ”) concerning the use, occupancy and condition of the Premises and of all Tenant’s machinery, equipment, furnishings, fixtures and improvements therein, all of which shall be complied with in a timely manner at Tenant’s sole expense.  Notwithstanding the foregoing, Landlord at its expense (subject to reimbursement pursuant to Article IV above, if and to the extent permitted thereby) shall comply with Laws (including, without limitation, the ADA and Environmental Laws (hereinafter defined)) to the extent the same apply directly to the Building Structure and Systems

 

 

 

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(as hereinafter defined in Section 8.2), Common Areas of the Property as a whole, and any other portions of the Building located outside of tenant premises, including, without limitation, telephone rooms, mechanical and electrical rooms and closets; provided, however, that to the extent any non-compliance is a result of Tenant’s particular use or occupancy of the Premises (as opposed to the Permitted Uses) or any negligence or willful misconduct of Tenant or any Agent, or if any improvements made by Landlord to comply with such Laws benefit solely the Premises (and not any other premises) and are atypical of those performed for similarly-situated tenants, then such compliance shall be at Tenant’s cost.  Landlord represents and warrants that, as of the Rent Commencement Date, the Premises and the Building shall be in material compliance with all Laws.  Notwithstanding any other provisions herein to the contrary, the parties hereto acknowledge and agree that in the event the Premises and/or the Building are not in compliance with all laws as of the Rent Commencement Date, and provided that any non-compliance is not a result of Tenant’s breach of its obligations under this Lease or any negligence or willful misconduct of Tenant or any Agent, Landlord shall bear any and all costs and expenses of achieving such compliance, and such costs and expenses shall not be included as an Operating Expense.  If any such Law requires an occupancy or use permit or license for the Premises or the operation of the business conducted therein, then Tenant shall obtain and keep current such permit or license at Tenant’s expense and shall promptly deliver a copy thereof to Landlord, provided, that Landlord shall be responsible, at its sole cost and expense and not to be included as an Operating Expense, for obtaining the initial certificate of occupancy required for the Premises and Tenant’s use of the Premises for the Permitted Uses.  Use of the Premises is subject to all covenants, conditions and restrictions of record.  Tenant shall not use any space in the Building or the Land for the sale of goods to the public at large or for the sale at auction of goods or property of any kind.  Tenant shall not conduct any operations, sales, promotions, advertising or special events outside the Premises, whether in the Building or on the Land.

 

6.2   Tenant shall pay before delinquency any business, rent or other taxes or fees that are now or hereafter levied, assessed or imposed upon Tenant’s use or occupancy of the Premises, the conduct of Tenant’s business at the Premises, or Tenant’s equipment, fixtures, furnishings, inventory or personal property.  If any such tax or fee is enacted or altered so that such tax or fee is levied against Landlord or so that Landlord is responsible for collection or payment thereof, then Tenant shall pay as Additional Rent the amount of such tax or fee.

 

6.3   (a)           Tenant shall not allow, cause or permit any Hazardous Materials to be generated, used, treated, released, stored or disposed of in or about the Building or the Land by Tenant’s employees, agents, contractors, licensees (including, without limitation Permitted Licensees) and/or invitees [but excluding Landlord or Landlord’s agents, contractors or employees], provided that Tenant and Permitted Licensees may use and store normal and reasonable quantities of Hazardous Materials in the Premises as are customarily maintained by data center tenants and as may be reasonably necessary for Tenant and Permitted Licensees to conduct normal operations in the Premises, taking into account the Permitted Uses, so long as such Hazardous Materials are properly, safely and lawfully stored and used by Tenant and Permitted Licensees.  At the expiration or earlier termination of this Lease, with respect to conditions existing on account of Tenant’s use or occupancy of the Premises, Tenant shall

 

 

 

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surrender the Premises to Landlord free of Hazardous Materials attributable to an Environmental Default and in full compliance with all Environmental Laws.

 

(i)   Hazardous Materials ” means (a) asbestos and any asbestos containing material and any substance that is then defined or listed in, or otherwise classified pursuant to, any Environmental Law or any other applicable Law as a “hazardous substance,” “hazardous material,” “hazardous waste,” “infectious waste,” “toxic substance,” “toxic pollutant” or any other formulation intended to define, list, or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity, or Toxicity Characteristic Leaching Procedure (TCLP) toxicity, (b) any petroleum and drilling fluids, produced waters, and other wastes associated with the exploration, development or production of crude oil, natural gas, or geothermal resources, and (c) any petroleum product, polychlorinated biphenyls, urea formaldehyde, radon gas, radioactive material (including any source, special nuclear, or by product material), medical waste, chlorofluorocarbon, lead or lead based product, and any other substance whose presence could be detrimental to the Building or the Land or hazardous to health or the environment.

 

(ii)   Environmental Law ” means any present and future Law and any amendments (whether common law, statute, rule, order, regulation or otherwise), permits and other requirements or guidelines of governmental authorities applicable to the Building or the Land and relating to the environment and environmental conditions or to any Hazardous Material (including, without limitation, CERCLA, 42 U.S.C. § 9601 et seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. § 1801 et seq., the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq., the Clean Air Act, 42 U.S.C. § 7401 et seq., the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq., the Safe Drinking Water Act, 42 U.S.C. § 300f et seq., the Emergency Planning and Community Right To Know Act, 42 U.S.C. § 1101 et seq., the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq., and any so called “Super Fund” or “Super Lien” law, any Law requiring the filing of reports and notices relating to hazardous substances, environmental laws administered by the Environmental Protection Agency, and any similar state and local Laws, all amendments thereto and all regulations, orders, decisions, and decrees now or hereafter promulgated thereunder concerning the environment, industrial hygiene or public health or safety).

 

(iii)   Environmental Default ” means any material violation of any Environmental Law by Tenant or any Tenant invitee (other than Landlord or Landlord’s agents, contractors, employees or agents) including, without limitation, a release, spill, or discharge of a Hazardous Material on or from the Premises, the Land or the Building.

 

(b)   Notwithstanding any termination of this Lease, Tenant shall indemnify and hold Landlord, its employees and agents harmless from and against any damage, injury, loss, liability, charge, demand or claim based on or arising out of the presence or removal of, or failure to remove, Hazardous Materials generated, used, released, spilled, stored or disposed of by Tenant or any Tenant invitee (other than Landlord or Landlord’s agents, contractors or employees) in or about the Building, after the date hereof.  In addition, Tenant shall give

 

 

 

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Landlord prompt written notice of any actual or threatened Environmental Default of which Tenant has actual knowledge, which Environmental Default Tenant shall cure in accordance with all Environmental Laws.  Upon any Environmental Default, in addition to all other rights available to Landlord under this Lease, at law or in equity, Landlord shall have the right but not the obligation to immediately enter the Premises, to supervise and approve any actions taken by Tenant to address the Environmental Default, and, if Tenant fails to promptly address same to Landlord’s reasonable satisfaction, to perform, at Tenant’s sole cost and expense, any lawful action necessary to address same.   If any lender or governmental agency shall require testing to ascertain whether an Environmental Default is pending or threatened, and such testing discloses the existence of an Environmental Default, then Tenant shall pay the reasonable costs of such testing as Additional Rent.

 

(c)   Notwithstanding anything to the contrary contained herein, Landlord represents and warrants to Tenant that Landlord has no knowledge of the current existence of any Hazardous Materials in or about the Property or the Office Building.  Notwithstanding anything to the contrary contained herein, Landlord shall indemnify and hold Tenant, its employees and agents harmless from and against any damage, injury, loss, liability, charge, demand or claim based on, or arising out of, the presence or removal of, or failure to remove, Hazardous Materials generated, used, released, stored or disposed of by Landlord, any Landlord invitee or any other party (other than Tenant or Tenant’s agents, contractors, employees, invitees or guests) prior to or after the Lease Commencement Date.  In addition, Landlord shall give Tenant prompt written notice of any actual or threatened violation of any Environmental Law affecting the Premises of which Landlord has actual knowledge, which violation Landlord shall cure in accordance with all Environmental Laws.  For purposes of this Section 6.3(c), Hazardous Materials excludes substances of a type and in a quantity normally used in connection with the occupancy or operation of data centers, provided such substances are being held, stored and used in compliance with federal, state and local Laws.

 

ARTICLE VII

 

ASSIGNMENT AND SUBLETTING

 

7.1   Subject to the terms and provisions of Sections 7.2(b) and 7.6 below, Tenant shall not assign, transfer or otherwise encumber (collectively, “ assign ”) this Lease or all or any of Tenant’s rights hereunder or interest herein, or sublet or permit anyone to use or occupy (collectively, “ sublet ”) the Premises or any part thereof, without obtaining the prior written consent of Landlord, which consent, provided no Event of Default exists under this Lease, and subject to Landlord’s rights and Tenant’s obligations pursuant to Sections 7.3, 7.4 and 7.5 below, Landlord shall not unreasonably withhold, condition or delay.  For purposes of the immediately preceding sentence, it shall be reasonable for Landlord to withhold its consent if, for example: (i) the proposed subtenant or assignee is engaged in a business, or the Premises will be used in a manner, that is inconsistent with the use of the Property as a first-class data center; or (ii) Landlord is not reasonably satisfied with the financial condition of the proposed subtenant or assignee taking into account the remaining obligations under this Lease and the fact that Tenant

 

 

 

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is not released; or (iii) the proposed use of the Premises is not in compliance with Article VI or is not compatible with the other uses within, and the terms of other leases with respect to, the Building; or (iv) the initial Tenant does not remain fully liable as a primary obligor for the payment of all rent and other charges payable by Tenant under this Lease and for the performance of all other obligations of Tenant under this Lease; or (v) the proposed subtenant or assignee is a governmental or quasi governmental agency; or (vi) the holders of Mortgages encumbering the Building shall fail to consent (Landlord hereby agreeing to use commercially reasonable diligent efforts to obtain such consent if Landlord approves such transaction); or (vii) the proposed subtenant or assignee is either (A) an existing tenant of the Building (or any parent, subsidiary or affiliate thereof) if Landlord has adequate space available in the Building for a comparable term, or (B) for a period of forty-five (45) days following the submission of a written proposal for the lease of space (and thereafter if a mutual agreement such as a letter of intent is executed within such period), any other person or entity with which Landlord is in the process of negotiating for the rental of space in the Building.  Except as otherwise set forth herein, no assignment or right of occupancy hereunder may be effectuated by operation of law or otherwise without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed.  Any assignment or subletting, Landlord’s consent thereto, the listing or posting of any name other than Tenant’s, or Landlord’s collection or acceptance of rent from any assignee or subtenant, shall not be construed either as waiving or releasing Tenant from any of its liabilities or obligations under this Lease as a principal and not as a guarantor or surety, or as relieving Tenant or any assignee or subtenant from the obligation of obtaining Landlord’s prior written consent to any subsequent assignment or subletting.  As security for this Lease, Tenant hereby assigns to Landlord the rent due from any assignee or subtenant of Tenant.  During any period that there exists an Event of Default under this Lease, Tenant hereby authorizes each such assignee or subtenant to pay said rent directly to Landlord upon receipt of notice from Landlord specifying same.  Landlord’s collection of such rent shall not be construed as an acceptance of such assignee or subtenant as a tenant.  Tenant shall not mortgage, pledge, hypothecate or encumber (collectively “ mortgage ”) this Lease without Landlord’s prior written consent, which consent may be granted or withheld in Landlord’s sole but reasonable discretion.  Any sublease, assignment or mortgage shall, at Landlord’s option, be effected on forms reasonably approved by Landlord.  Tenant shall deliver to Landlord a fully executed copy of each agreement evidencing a sublease, assignment or mortgage, and Landlord’s consent thereto, within thirty (30) days after execution thereof.

 

7.2   (a)           If Tenant is a partnership or a limited liability company, then any event (whether voluntary, concurrent or related) resulting in a dissolution of Tenant, any withdrawal or change (whether voluntary, involuntary or by operation of law) of the partners or members, as applicable, owning a controlling interest in Tenant (including each general partner or manager, as applicable), or any structural or other change having the effect of limiting the liability of the partners shall be deemed a voluntary assignment of this Lease subject to the provisions of this Article VII.  If Tenant is a corporation or a partnership with a corporate general partner, then any event (whether voluntary, concurrent or related) resulting in a dissolution, merger, consolidation or other reorganization of Tenant (or such corporate general partner) and that causes a change in control of Tenant, or the sale or transfer or relinquishment of the interest of shareholders who, as

 

 

 

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of the date of this Lease, own a controlling interest of the capital stock of Tenant (or such corporate general partner) and that causes a change in control of Tenant, shall be deemed a voluntary assignment of this Lease subject to the provisions of this Article VII; provided, however, that if Tenant is a corporation, or a wholly-owned subsidiary of a corporation, whose stock is traded through a national or regional exchange or over the counter market, then the foregoing portion of this sentence shall be applicable only if such event has or is intended to have the effect of eliminating liability under this Lease.

 

(b)   Notwithstanding anything contained in this Article VII to the contrary, provided no Event of Default exists hereunder, Tenant may, upon not less than ten (10) days’ prior written notice to Landlord (which notice shall contain a written certificate from Tenant, signed by an authorized representative of Tenant, containing a representation as to the true, correct and complete legal and beneficial relationship of Tenant and the proposed assignee, transferee or subtenant) but without Landlord’s prior written consent and without being subject to Landlord’s rights and Tenant’s obligations set forth in Sections 7.4 and 7.5 below, assign or transfer its entire interest in this Lease or sublease the entire or any portion of the Premises to any of the following (each, an “ Affiliate ”): (i) to a corporation or other business entity (herein sometimes referred to as a “ successor corporation ”) into or with which Tenant shall be merged or consolidated, or to which substantially all of the assets of Tenant may be transferred or sold, provided that such successor corporation shall have a net worth and liquidity factor at least equal to the net worth and liquidity factor of Tenant as of the date hereof or otherwise reasonably acceptable to Landlord taking into account the fact that the original Tenant under this Lease is not being released, and provided that the successor corporation shall assume in writing all of the obligations and liabilities of Tenant under this Lease and the proposed use of the Premises is in compliance with Article VI above; or (ii) to a corporation or other business entity (herein sometimes referred to as a “ related corporation ”) which shall control, be controlled by or be under common control with Tenant, provided that such related corporation shall assume in writing all of the obligations and liabilities of Tenant under this Lease (without relieving Tenant therefrom) and the proposed use of the Premises is in compliance with Article VI above.  In the event of any such assignment or subletting, Tenant shall remain fully liable as a primary obligor for the payment of all rent and other charges required hereunder and for the performance of all obligations to be performed by Tenant hereunder.  For purposes of this Section 7.2, “control” shall be deemed to be ownership of more than fifty percent (50%) of the stock or other voting interest of the controlled corporation or other business entity.  Notwithstanding the foregoing, if Tenant structures one or more assignment or sublease transactions to an entity that meets the definition of Affiliate as specified above for the purpose of circumventing the restrictions on subleases and assignments provided elsewhere in this Article VII, then such subtenant(s) or assignee(s) shall conclusively be deemed not to be an Affiliate and subject to all such restrictions.

 

7.3   (a)           If at any time during the Lease Term Tenant desires to assign, sublet or mortgage all or part of this Lease or the Premises, then in connection with Tenant’s request to Landlord for Landlord’s consent thereto, Tenant shall give notice to Landlord in writing (“ Tenant’s Request Notice ”) containing: the identity of the proposed assignee, subtenant or

 

 

 

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other party and a description of its business; the terms of the proposed assignment, subletting or other transaction (including a copy of the proposed document for same) including whether any premium or other consideration is being paid for the assignment, sublease or other transaction; the anticipated commencement date of the proposed assignment, subletting or other transaction (the “ Proposed Sublease Commencement Date ”); the area proposed to be assigned, sublet or otherwise encumbered (the “ Proposed Sublet Space ”); and either financial statements for the prior two (2) years certified by an authorized officer of Tenant or a certified public accounting firm or other evidence of financial responsibility of such proposed assignee, subtenant or other party.  If financial statements for such proposed assignee, subtenant or other party are not available for the prior two years, then Tenant shall submit any financial statements that are available for the prior two years and any other available evidence of financial responsibility reasonably requested by Landlord.

 

(b)   Landlord shall grant or deny, with reasonable specificity, Tenant’s request for consent contained in any Tenant’s Request Notice within thirty (30) days after Landlord has received any such Tenant’s Request Notice (including all other items required to be delivered by Tenant to Landlord as set forth in Section 7.3(a) above).  If Landlord fails to timely grant or deny such request with reasonable specificity, then Landlord shall be deemed to have granted its consent thereto.

 

7.4   If the proposed term with respect to the Proposed Sublet Space extends (including any renewal or extension options) beyond the first (1st) day of the twelfth (12th) calendar month before the then-scheduled expiration of the Lease Term, or if the Proposed Sublet Space is (or, when aggregated with other space being sublet or assigned by Tenant, will be) more than fifty percent (50%) of the total number of rentable square feet in the Premises or if the Critical Load Power associated with the Proposed Sublet Space is (or, when aggregated with the Critical Load Power associated with other space being sublet or assigned by Tenant, will be) more than fifty percent (50%) of the Maximum Load Limit (hereinafter defined), then, in any such event, except as set forth in Section 7.2(b) concerning Affiliates, Landlord shall have the right in its sole and absolute discretion to terminate this Lease with respect to the Proposed Sublet Space by sending Tenant written notice of such termination within thirty (30) days after Landlord’s receipt of Tenant’s Request Notice.  Notwithstanding any of the foregoing to the contrary, if Landlord sends Tenant a written notice pursuant to the immediately preceding sentence indicating Landlord’s intention to terminate this Lease with respect to the Proposed Sublet Space, then Tenant shall have the right, for a period of ten (10) days after receipt of such notice, to withdraw (by written notice to Landlord) the applicable Tenant’s Request Notice.  If the Proposed Sublet Space does not constitute the entire Premises and Landlord exercises its option to terminate this Lease with respect to the Proposed Sublet Space, then (a) Tenant shall tender the Proposed Sublet Space to Landlord on the Proposed Sublease Commencement Date and such space shall thereafter be deleted from the Premises, and (b) as to that portion of the Premises which is not part of the Proposed Sublet Space, this Lease shall remain in full force and effect except that Base Rent and additional rent shall be reduced pro rata.  Fifty percent (50%) of the cost of any construction required to permit the operation of the Proposed Sublet Space separate from the balance of the Premises shall be paid by Tenant to Landlord as additional rent hereunder.  If the

 

 

 

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Proposed Sublet Space constitutes the entire Premises and Landlord elects to terminate this Lease, then Tenant shall tender the Proposed Sublet Space to Landlord, and this Lease shall terminate, on the Proposed Sublease Commencement Date.

 

7.5   If any sublease or assignment (whether by operation of law or otherwise, including without limitation an assignment pursuant to the provisions of the Bankruptcy Code or any other Insolvency Law) provides that the subtenant or assignee thereunder is to pay any amount in excess of the sum of (a) the rent and other charges due under this Lease plus (b) the reasonable out-of-pocket expenses (including any costs attributable to vacancy periods or “downtime”), that Tenant reasonably incurred in connection with the procurement of such sublease, assignment or other transfer (which expenses shall be amortized on a straight-line basis over the initial sublease term for the purposes hereof), then whether such net excess be in the form of an increased monthly or annual rental, a lump sum payment, payment for the sale, transfer or lease of Tenant’s fixtures, leasehold improvements, furniture and other personal property, or any other form of payment having the effect of a “disguised” rental payment (and if the subleased or assigned space does not constitute the entire Premises, the existence of such excess shall be determined on a pro rata basis), Tenant shall pay to Landlord, along with the next monthly installment of Base Rent due, [*****] of any such net excess or other premium applicable to the sublease or assignment, which amount shall be calculated and paid by Tenant to Landlord on a monthly basis as Additional Rent.  Acceptance by Landlord of any payments due under this Section 7.5 shall not be deemed to constitute approval by Landlord of any sublease or assignment, nor shall such acceptance waive any rights of Landlord hereunder.  Landlord shall have the right to inspect and audit Tenant’s books and records relating to any sublease or assignment.

 

7.6   Landlord acknowledges that the business to be conducted by Tenant in the Premises may include the installation of certain equipment (described below) owned, licensed or otherwise used by customers, vendors or co-locators of the undersigned Tenant (“ Permitted Licensees ”) in the Premises, in order for Permitted Licensees to place, use, operate and/or maintain computer, switch, communications and/or other related facilities and equipment which may interconnect with Tenant’s equipment and facilities and/or other Permitted Licensees’ equipment and facilities (the “ Permitted Interconnection ”).  To expedite Permitted Licensees’ access to the Premises for Permitted Interconnections, Landlord expressly agrees that Tenant may, without Landlord’s consent, license portions of the Premises to Permitted Licensees for the sole purpose of Permitted Interconnections pursuant to written agreements or other arrangements by and between Tenant and Permitted Licensees (collectively, “ Permitted Agreements ”); provided, however, that (a) Tenant acknowledges and agrees that access of Permitted Licensees to the Building and the Premises is subject to the terms and provisions of Article V above and (b) the Permitted Licensee’s license of a portion of the Premises may not violate the terms of this Lease or any Applicable Laws.  The Permitted Agreements and the Permitted Licensees’ rights thereunder shall be subject and subordinate at all times to the Lease and all of its provisions, covenants and conditions.  Except to the extent caused by the negligence or willful acts or omissions of Landlord or its agents, and subject to Section 12.3 below, Tenant hereby agrees to indemnify, defend, and hold harmless Landlord from and against (and to reimburse Landlord for)

 

 

 

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any and all claims, costs, damages, causes of action and/or litigation arising from or in any manner relating to (i) any Permitted Agreement, (ii) the use of the Premises or any other portion of the Building or the Property by any Permitted Licensee or any person claiming by, through or under any Permitted Licensee, its officers, agents or employees (collectively, the “ Colocating Parties ”), and (iii) the acts or omissions of any Permitted Licensee or any Colocating Parties.  Notwithstanding anything to the contrary contained herein, Landlord and Tenant acknowledge and agree that Permitted Agreements shall not constitute, or be deemed to be, (I) the grant of a leasehold interest or otherwise constitute, or be deemed to be, a real property interest or (II) an assignment of this Lease or a sublet of the Premises, or any portion thereof, requiring Landlord’s consent, and the Permitted Interconnections and Permitted Agreements shall not be subject to Landlord’s rights and Tenant’s obligations set forth in Section 7.4 and 7.5 above.  Additionally, Landlord and Tenant agree that Tenant’s right to enter into Permitted Agreements related to the Premises is a right that is granted specifically and solely to Rackspace U.S., Inc. and Rackspace Hosting, Inc. and Affiliates of each, and, as such, such right shall not be exercisable by any party (who is not an Affiliate of Rackspace U.S., Inc. and/or Rackspace Hosting, Inc.) to whom any or all of the rights of “Tenant” under this Lease are hereafter assigned or otherwise transferred, or by any Colocating Party (who is not an Affiliate of Rackspace U.S., Inc. and/or Rackspace Hosting, Inc.).

 

7.7   All restrictions and obligations imposed pursuant to this Lease on Tenant shall be deemed to extend to any subtenant, assignee, licensee, concessionaire or other occupant or transferee, and Tenant shall cause such person to comply with such restrictions and obligations.  Any assignee shall be deemed to have assumed obligations from and after the effective date of the relevant assignment and at Landlord’s request shall execute promptly a document confirming such assumption.  Each sublease is subject to the condition that if the Lease Term is terminated or Landlord succeeds to Tenant’s interest in the Premises by voluntary surrender or otherwise, at Landlord’s option the subtenant shall be bound to Landlord for the balance of the term of such sublease and shall attorn to and recognize Landlord as its landlord under the then executory terms of such sublease.

 

ARTICLE VIII

 

MAINTENANCE AND REPAIRS

 

8.1   Subject to Landlord’s obligations in Section 8.2, Article XVI and Article XVII below and in the Services Exhibit attached hereto as Exhibit F , Tenant, at Tenant’s sole cost and expense, shall promptly make all repairs, perform all maintenance, and make all replacements in and to the Premises that are necessary or desirable to keep the Premises in proper operating condition and repair, in a clean, safe and tenantable condition, and otherwise in accordance with all Laws and the requirements of this Lease (Tenant’s repair, maintenance and replacement obligations, including but not limited to obligations with respect to the Tenant Items (as hereinafter defined), shall hereinafter be collectively referred to as “ Tenant’s Repair and Maintenance Obligations ”).  Subject to Landlord’s obligations in Section 8.2, Article XVI and Article XVII below, Tenant shall maintain all fixtures, furnishings and equipment installed by

 

 

 

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Tenant or any Tenant invitee in the Premises (excluding any PDUs installed by Tenant) in clean, safe and sanitary condition, shall take good care thereof and make all required repairs and replacements thereto.  Tenant shall maintain throughout the Lease Term, at Tenant’s sole cost and expense, customary maintenance and service contracts for the maintenance and repair of any and all non-Building standard supplemental heating, ventilation and air conditioning equipment and systems and any and all non-Building standard supplemental power distribution equipment and systems installed by Tenant or any Tenant invitee in the Premises, and Tenant shall maintain throughout the Lease Term, at Tenant’s sole cost and expense, all such supplemental heating, ventilation and air conditioning equipment and systems and supplemental power distribution equipment and systems, as well as any special tenant areas, facilities and finishes installed by Tenant or any Tenant invitee; special fire protection equipment, telecommunications and computer equipment installed by Tenant or any Tenant invitee; kitchen/galley equipment and fixtures, all other furniture, furnishings, equipment and systems of Tenant and all Alterations (collectively, “ Tenant Items ”).  Each such contract shall be with a contractor licensed to do business in the jurisdiction in which the Building is located and otherwise reasonably approved by Landlord.  From time to time, at Landlord’s request, Tenant shall provide Landlord with copies of all maintenance and service contracts.  In the event that Tenant fails to commence and diligently prosecute to completion any item of Tenant’s Repair and Maintenance Obligations within fifteen (15) Business Days following Tenant’s receipt of notice from Landlord, then Landlord shall have the right, at Landlord’s option, to perform any such item of Tenant’s Repair and Maintenance Obligations and to charge Tenant for all reasonable costs and expenses actually incurred by Landlord in connection therewith.  Tenant shall give Landlord prompt written notice of any defects or damage to the structure of, or equipment or fixtures in, the Building or any part thereof of which Tenant has knowledge.  Tenant shall suffer no waste or injury to any part of the Premises, and shall, at the expiration or earlier termination of the Lease Term, surrender the Premises in an order and condition equal to or better than their order and condition on the Rent Commencement Date, except for ordinary wear and tear and as otherwise provided in Article IX, Article XII and/or Article XVI.  Except as otherwise provided in Article XVI, all injury, breakage and damage to the Premises and to any other part of the Building or the Land caused by any act or omission of any agent, employee, subtenant, assignee, contractor, client, licensee, customer, invitee or guest of Tenant (collectively, “ Agents ”) or Tenant, shall be repaired by and at Tenant’s expense, except that:  (A) if either an emergency condition exists or the Lease Term has expired or Tenant fails to commence and diligently prosecute to completion repair of any such injury, breakage or damage within ten (10) days following Tenant’s receipt of notice from Landlord, then Landlord shall have the right at Landlord’s option to make any such repair and to charge Tenant for all reasonable costs and expenses actually incurred by Landlord in connection therewith; and (B) if such injury, breakage and damage is caused by the negligence of Tenant or any Agent (as opposed to the gross negligence or willful misconduct of Tenant or any Agent), then the mutual waiver of subrogation specified in Sections 12.2 and 12.3 shall apply (subject to the limitations of the remainder of Article XII, including without limitation the fact that Tenant’s insurance shall be primary and non-contributory).  Landlord shall provide and install replacement tubes for Building-standard fluorescent light fixtures (subject to reimbursement pursuant to Article IV).  All other lights and/or light bulbs within the Premises shall be provided and installed by Tenant at Tenant’s sole cost and expense.  The provision, installation and

 

 

 

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replacement of such lights and light bulbs shall be expressly required as an item of Tenant’s Repair and Maintenance Obligations.

 

8.2   Except as otherwise provided in this Lease, Landlord, at its expense (subject to reimbursement pursuant to Article IV if and to the extent permitted thereby), shall promptly make all repairs, perform all maintenance and make all replacements (which shall be new or comparable materials, facilities or equipment only) to keep the exterior and demising walls, main lobby in the Building and main lobby in the Office Building, slab floors, exterior windows, load bearing elements, foundations, roof and common areas that form a part of the Building and that form a part of the Office Building; the driveways, parking and grounds on the Land; the raised floor, the PDUs (up to the load side of each PDU, up to and including the output bus), CRACs, Engine Generators, electrical distribution switchgear, uninterruptible power systems, HVAC cooling support equipment, the Building Management System, the Security Systems, fire detection and alarm system and fire protection system, any other equipment, facilities or other property of Landlord, located within the Premises, the Building and the Office Building, as well as the mechanical, telecommunications, electrical, HVAC and plumbing systems, equipment, rooms, closets, pipes, cables, risers, vaults, manholes and conduits that are provided by Landlord in the operation of the Building and the Office Building (collectively, the “ Building Structure and Systems ”), clean and in good operating condition, consistent with industry standards for first-class data centers (Landlord’s repair, maintenance and replacement obligations, collectively, “Landlord’s Repair and Maintenance Obligations” ).  Landlord’s Repair and Maintenance Obligations shall include Landlord’s duties and obligations set forth in Section B of the Services Exhibit attached hereto as Exhibit F .  Notwithstanding any of the foregoing to the contrary, maintenance and repair of all Tenant Items shall be the sole responsibility of Tenant and Tenant Items shall be deemed not to be a part of the Building Structure and Systems.

 

ARTICLE IX

 

ALTERATIONS

 

9.1   (a)           Landlord represents and warrants that it has constructed and installed at its sole cost and expense, the Building and data center infrastructure and leasehold improvements (“ Landlord’s Work ”) as outlined in Exhibit D attached hereto and made a part hereof, all in a good, workmanlike and first-class manner, and all in compliance with all applicable Laws and building codes.  [*****].  It is understood and agreed that, except for the Landlord’s Work [*****] and delivery of the Office Space and Storage Space as set forth in Sections 1.3 and 1.4 above, Landlord will not make, and is under no obligation to make, any structural or other alterations, installations, additions or improvements in or to the Building, Land or Premises.

 

(b)   [*****].

 

 

 

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(c)   [*****].

 

9.2   Tenant shall not make or permit anyone to make any material alterations, additions, improvements or replacements in or to the Premises, the Building, the Office Building or the Property (collectively, “ Alterations ”) without the prior written consent of Landlord, which consent may be withheld or granted in Landlord’s sole and absolute discretion with respect to structural Alterations and those non-structural Alterations which are visible from the exterior of the Premises, and which consent shall not be unreasonably withheld, conditioned or delayed with respect to all other non-structural Alterations.  Structural Alterations shall be deemed to include, without limitation, any Alteration that will or may necessitate any changes, replacements or additions to the load-bearing or exterior walls, non-drop ceilings, partitions (load-bearing or non-demising), columns or floor, or to the fire protection, water, sewer, electrical, mechanical, plumbing or HVAC systems, of the Premises or the Building.  Notwithstanding the foregoing, Tenant shall have the right to make Minor Changes (as defined below) within the Premises without requiring the consent of Landlord.  “ @Minor Changes ” shall mean those minor, non-structural Alterations which will not cause an interruption of, or a reduction in, the functioning of the Building’s mechanical, electrical, life safety, security, plumbing, HVAC, telecommunications or other systems, and which cost (including installation) in the aggregate less than [*****] (as reasonably determined by Landlord).  The construction of any cage(s), security fencing or similar structure within the Premises shall not be a Minor Change and shall be subject to Landlord’s consent, such consent not to be unreasonably withheld, conditioned or delayed.  Any Alterations made by Tenant shall be made: (a) in a good, workmanlike, first class and prompt manner; (b) using new or comparable materials only; (c) by a contractor included on Landlord’s list of approved contractors or a contractor otherwise reasonably approved in writing by Landlord (each, an “ Approved Contractor ”); (d) on days and at times that do not unreasonably interfere with Landlord’s performance of its obligations under this Lease; (e) under the supervision of an architect reasonably approved in writing by Landlord; (f) in accordance with plans and specifications prepared by an engineer and/or architect reasonably acceptable to Landlord, and, with respect to Alterations that are not Minor Changes, which plans and specifications shall be approved in writing by Landlord at Landlord’s standard charge, which shall not exceed [*****] except in the event that Landlord reasonably obtains the services of a non-affiliated third party to review such plans and specifications (i.e., where an Alteration affects the Building Structure and Systems), in which event Tenant shall be responsible for all reasonable, third-party, out-of-pocket costs and expenses actually incurred by Landlord; (g) in accordance with all Laws and, if made available to Tenant by Landlord, the reasonable requirements of any insurance company insuring the Building or any portion thereof; (h) with respect to any Alterations that are not Minor Changes, after Landlord shall have obtained any required consent of the holder of any Mortgage of whom Tenant has notice; (i) after obtaining public liability and worker’s compensation insurance policies approved in writing by Landlord, which policies shall cover every person who will perform any work with respect to such Alteration; and (j) with the obligation for Tenant to obtain and deliver to Landlord written, unconditional full or partial (as applicable) waivers of mechanics’ and materialmen’s liens against the Premises, the Building and the Property from all contractors, subcontractors, laborers and material suppliers (individually and collectively, “ Contractors ”) for all work, labor and

 

 

 

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services performed and materials furnished in connection with Alterations within ten (10) Business Days after Tenant submits payment to the applicable Contractor(s) for the applicable portion(s) of the Alterations.  If any lien (or a petition to establish such lien) is filed in connection with any Alteration made by or on behalf of Tenant, such lien (or petition) shall be discharged by Tenant as soon as commercially reasonable, but in no event more than thirty (30) days after Tenant receives notice thereof, at Tenant’s sole cost and expense, by the payment thereof or by the filing of a bond legally sufficient to discharge such lien.  If Landlord gives its consent to the making of any Alteration, such consent shall not be deemed to be an agreement or consent by Landlord to subject its interest in the Premises, or the Building to any liens which may be filed in connection therewith.  Tenant acknowledges that any Alterations are accomplished for Tenant’s account, Landlord having no obligation or responsibility in respect thereof.  Landlord’s approval of any plans and drawings (and changes thereto) regarding any Alterations or any contractor or subcontractor performing such Alterations shall not constitute Landlord’s representation that such approved plans, drawings, changes or Alterations comply with all Laws.  Any deficiency in design or construction, although same had prior approval of Landlord, shall be solely the responsibility of Tenant, unless Landlord performed design work or construction work (other than reviewing and/or approving plans, drawings or construction work) with respect to such Alterations.  All Alterations involving structural, electrical, mechanical or plumbing work, the heating, ventilation and air conditioning system of the Premises or the Building, fire and life safety system or the roof of the Building shall, at Landlord’s election, be performed by Landlord’s designated contractor or subcontractor, who shall be reasonably approved by Tenant, at Tenant’s expense (provided the cost therefor is competitive).  For any approved Alterations performed by Tenant and/or its contractor(s), Tenant shall not be required to pay a construction supervision fee or coordination fee to Landlord; however, if Landlord’s contractor or subcontractor performs any Alteration, then, except with respect to any of Landlord’s Work, [*****], Tenant shall pay a reasonable construction supervision fee [*****]. Promptly after the completion of an Alteration, Tenant, at its expense, shall deliver to Landlord three (3) sets of as-built (or record) drawings and CAD drawings prepared by Tenant’s engineer showing such Alteration in place.  Notwithstanding the foregoing, subject to Landlord’s written approval, which shall not be unreasonably withheld or delayed, Tenant may elect not to cause as-built drawings and CAD drawings to be prepared for Minor Changes that, in Landlord’s sole but reasonable discretion, do not affect the Building Structure and Systems.

 

9.3   If any Alterations that require Landlord’s consent are made without the prior written consent of Landlord then, if either an emergency condition exists or the Lease Term has expired or Tenant fails to commence and diligently prosecute to completion, removal and correction of such Alterations and restoration of the Premises and the Building within ten (10) days following Tenant’s receipt of notice from Landlord, Landlord shall have the right, at Tenant’s expense, to so remove and correct such Alterations and restore the Premises and the Building to their condition immediately prior thereto.  Subject to the immediately succeeding sentence, all tenant improvements, to the Premises made by Landlord, [*****] (excluding moveable furniture, furnishings, trade fixtures and equipment) shall immediately become the property of Landlord and shall remain upon and be surrendered with the Premises as a part thereof at the expiration or earlier termination of the Lease Term.  Tenant shall have the right to

 

 

 

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remove, at or prior to the expiration or earlier termination of the Lease Term, all movable furniture, furnishings, trade fixtures, facilities and equipment installed in the Premises or elsewhere in the Building or on the Land solely at the expense of Tenant, including all Tenant Items, and Tenant may remove, at its expense, all Alterations and other items (including any telecommunications equipment and wiring) made or installed by Tenant in the Premises or the Building, provided, that Tenant may, at its option, surrender those Alterations and/or Tenant Items or other Tenant facilities or equipment requested by Landlord in writing.

 

9.4   Landlord waives, releases and relinquishes any statutory, common law or constitutional liens it may have or at any time hereafter be entitled to assert against the personal property, trade fixtures and telecommunications, computer or other equipment and facilities which Tenant, its agents, employees and/or its Permitted Licensees, install in the Premises or elsewhere in the Building, the Office Building or on the Land, or is otherwise located in the Premises.

 

ARTICLE X

 

SIGNS

 

Tenant shall not place, inscribe, paint, affix or otherwise display any sign, advertisement or notice of any kind on any part of the exterior or the interior of the Building without the prior written approval of Landlord, which may be granted or withheld in Landlord’s sole and absolute discretion, provided, that Tenant may display signs within the Premises without Landlord’s consent; however, the location of any such sign displayed within the Premises is subject to Landlord’s approval, not to be unreasonably withheld or delayed.  All signage installed by Tenant in accordance with this Article X shall be installed and removed at the expiration or earlier termination of the Lease Term, and Tenant shall repair any damage to the Building resulting therefrom, at Tenant’s cost and expense.  If any sign, advertisement or notice requiring Landlord’s approval as aforesaid is exhibited or installed by Tenant without Landlord’s prior approval, Landlord shall have the right to immediately remove the same at Tenant’s expense.  Landlord reserves the right to affix, install and display signs, advertisements and notices on any part of the exterior or interior of the Building, including those required by applicable law, provided, that Landlord shall not affix, install or display any signs, advertisements or notices not required by applicable law and identifying Tenant, Tenant’s Affiliates, any Permitted Licensees or Tenant’s customers on or within the Building and/or the Office Building without Tenant’s prior written consent, which consent may be granted or withheld in Tenant’s sole and absolute discretion.

 

ARTICLE XI

 

LANDLORD ACCESS

 

11.1   Tenant will permit Landlord, or its agents or representatives, and the holder of any Mortgage to enter the Premises, without charge therefor to Landlord and without diminution of the rent payable by Tenant, (i) to examine, inspect and protect the Premises, the Building and

 

 

 

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the Office Building, (ii) to make such alterations, replacements and/or repairs as in Landlord’s reasonable judgment may be required by law or be necessary in order for Landlord to perform its obligations under Article VIII hereof, and (iii) to otherwise comply with and carry out Landlord’s obligations under this Lease.  In connection with any such entry, Landlord shall (A) diligently endeavor to minimize the disruption to Tenant’s use of the Premises, and, in all events, shall not materially interfere with Tenant’s use of, or access to, the Premises for the Permitted Uses, (B) except in the event of emergency, give Tenant reasonable advance written, telephonic or email notice of such entry pursuant to Section 5.4 above, which shall not be less than two (2) Business Days prior to the date of entry and (C) diligently endeavor to conduct such entry only during normal working hours (except in the event of an emergency).  Tenant may, at its option, require that Landlord be accompanied by a representative of Tenant during any such entry (except in the case of emergency), provided that such representative of Tenant does not interfere with or delay Landlord exercising its rights or satisfying its obligations hereunder.

 

11.2   Landlord reserves the right to grant easements, rights, and dedications that Landlord deems necessary or desirable for the benefit of the Property, and to record personal maps and restrictions in connection therewith; provided, however, Landlord shall not enter into any such agreement or grant any such rights that would unreasonably interfere with Tenant’s use or occupancy of, or access to, the Premises in accordance with the Permitted Uses.

 

11.3   Upon written request by Tenant, Landlord shall grant, subject to Landlord’s rules and regulations and upon commercially reasonable terms, as determined by Landlord in its sole but reasonable discretion, license rights coterminous with the Lease Term to one or more reputable telecommunications utility provider(s) designated by Tenant (any such utility provider, an “ Approved Fiber Provider ”), to permit any such Approved Fiber Provider to bring such Approved Fiber Provider’s telecommunications fiber, cable and related equipment and facilities from and through conduits [*****] duct banks on the Property (the “ Telecommunications Duct Banks ”) into [*****] of the Building’s telecommunications points of entry (each, a “ POE ”), to provide cross-connects within the Premises and to permit any such Approved Fiber Provider to maintain and operate such cable, fiber and related facilities and equipment on the Property.  Landlord agrees that Landlord shall not charge Tenant or any Approved Fiber Provider any fee and/or other amount in connection with any such license granted pursuant to this Section 11.3 (other than direct costs incurred in connection with maintaining and restoring the Property, systems, and equipment directly affected by such license).  Tenant shall have the right, subject to Landlord’s reasonable rules and regulations, to use the secure telecommunications conduits exclusively serving each Pod in the Premises and extending from each Pod within the Premises to two (2) POEs within the Building (the “ Telecommunications Conduits ”) in order to connect Tenant’s telecommunications network cables and related telecommunications and computer facilities and equipment to the telecommunications equipment and facilities of third parties located within the two (2) POEs (“ AFP Telecommunications Facilities ”).  Tenant shall not be charged any fee for the use of the Telecommunications Duct Banks, the Telecommunications Conduits and/or the POEs in accordance with this Section 11.3.  Furthermore, Tenant shall have the right, subject to Article IX above and Landlord’s reasonable rules and regulations, and accompanied by an employee of Landlord or the Management Company or an agent designated

 

 

 

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by Landlord or the Management Company, to enter the POEs solely to install, use, operate, maintain, inspect, repair, replace and remove telecommunications facilities and equipment reasonably approved by Landlord in order to connect to AFP Telecommunications Facilities located within the POEs, all in locations reasonably designated by Landlord.  Tenant acknowledges and agrees that, in connection with its use of the Telecommunications Conduits and the POEs: (a) any of Tenant’s telecommunications network cables and wires entering the POEs must terminate in optical cable entrance termination facilities reasonably approved by Landlord, (b) Tenant may use only non-heat rejecting fiber termination facilities within the POEs, and (c) Tenant shall not materially disrupt, interfere with, or adversely affect (i) the operations of Landlord or other tenants within the Building, (ii) the structure of the Premises or the Building, and/or (iii) the telecommunications equipment and facilities or other personal property of Landlord or other tenants within the Building.  Tenant shall be responsible, at its sole cost and expense, for (1) connections to Approved Fiber Providers and for any services provided by Approved Fiber Providers to Tenant and (2) all costs associated with the population of the Telecommunications Conduits, including the installation of innerducts.  [*****].

 

ARTICLE XII

 

INSURANCE

 

12.1   Tenant shall not conduct or permit to be conducted any activity, or place or permit to be placed any equipment or other item in or about the Premises or the Building, which is inconsistent with the Permitted Uses and which will in any way increase the rate of property insurance or other insurance on the Building.  If any increase in the rate of property or other insurance is due to any specific activity, equipment or other item of Tenant, then (whether or not Landlord has consented to such activity, equipment or other item) Tenant shall pay, as Additional Rent due hereunder, the amount of such increase.  The statement of any applicable insurance company or insurance rating organization (or other organization exercising similar functions in connection with the prevention of fire or the correction of hazardous conditions) that an increase is due to any such specific activity, equipment or other item shall be conclusive evidence thereof.

 

12.2   (a)           Throughout the Lease Term, Tenant shall obtain and maintain:  (1) commercial general liability insurance (written on an occurrence basis) including contractual liability coverage insuring the obligations assumed by Tenant under this Lease, premises and operations coverage, broad form property damage coverage, independent contractors coverage, and personal injury, an exception to any pollution exclusion which insures damage or injury arising out of heat, smoke or fumes from a hostile fire, and a standard separation of insureds provision; (2) business interruption insurance; (3) all risk property insurance; (4) comprehensive automobile liability insurance (covering automobiles owned, hired or used by Tenant in carrying on its business, if any); (5) worker’s compensation insurance (covering Tenant’s employees); (6) employer’s liability insurance (covering Tenant’s employees); and (7) umbrella excess liability coverage on a following form basis in excess of the primary commercial liability, business auto liability, and employer’s liability coverages specified above and which insures against bodily

 

 

 

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CONFIDENTIAL MATERIAL HAS BEEN OMMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISION.  BOXES AND ASTERIXES DENOTE SUCH OMISSION

 

 

injury, property damage, personal injury and advertising injury claims.  Such commercial general liability insurance shall be in amounts of One Million Dollars ($1,000,000) combined single limit per occurrence, and Two Million Dollar ($2,000,000) annual general aggregate (on a per location basis).  Such business interruption insurance shall be in minimum amounts typically carried by prudent tenants engaged in similar operations, but in no event shall be in an amount less than the Base Rent then in effect during any Lease Year.  Such property insurance shall be in an amount not less than that required to replace all tenant improvements installed by Tenant in the Premises, all Alterations [*****] and all of Tenant’s contents within the Premises (including, without limitation, Tenant’s trade fixtures, decorations, furnishings, inventory, equipment, facilities and personal property), but excluding PDUs, CRACs, HVAC cooling support equipment, fire detection and alarm and fire suppression systems and equipment and any other equipment, facilities or other property of Landlord comprising the Building Structure and Systems and located within the Premises.  Such automobile liability insurance shall be in an amount of One Million Dollars ($1,000,000) combined single limit for each accident.  Such worker’s compensation insurance shall meet statutory limits as defined by the law of the jurisdiction in which the Building is located (as the same may be amended from time to time).  Such employer’s liability insurance shall be in an amount of One Million Dollars ($1,000,000) for each accident, One Million Dollars ($1,000,000) disease policy limit, and One Million Dollars ($1,000,000) disease each employee.  Such umbrella excess liability insurance shall be in amounts of Five Million Dollars ($5,000,000) per occurrence and Five Million Dollars ($5,000,000) annual aggregate, in addition to the limits stated above for the commercial general liability, business auto liability and employer’s liability insurance.

 

(b)   All such insurance shall:  (1) be issued by a company that is licensed to do business in the jurisdiction in which the Building is located, and that has a rating equal to or exceeding A:XII from the most current Best’s Insurance Guide; (2) with respect to Tenant’s commercial general liability insurance, name Landlord, the Management Company and the holder of any Mortgage (as hereinafter defined) of which Tenant has notice as additional insureds; (3) contain a waiver of subrogation (Tenant hereby waiving its right of action and recovery against and releasing Landlord and Landlord’s shareholders, partners, directors, officers and employees (“ Landlord’s Representatives ”) from liabilities, claims and losses for which they may otherwise be liable to the extent that (i) Tenant is covered therefor by insurance carried or required to be carried under this Lease and (ii) provided that Tenant is carrying such required insurance, Tenant receives proceeds therefor); (4) be reasonably acceptable in form and content to Landlord; (5) be primary and non-contributory; and (6) contain an endorsement requiring the insurance company to provide Landlord with written notice (by certified or registered mail, return receipt requested to the addresses listed in Section 24.6 hereof) of cancellation or non-renewal at least thirty (30) days’ prior to the effective date of such cancellation or non renewal.  Landlord reserves the right from time to time to require higher minimum amounts or different types of insurance if it becomes customary for other landlords of comparable data centers in the Chicago, Illinois area to require similar tenants in similar industries to carry insurance of such higher minimum amounts or of such different types.  Tenant shall deliver an Accord 27 certificate of all such insurance (which certificate shall evidence an endorsement for each policy indicating that the Landlord Insured Parties are named as additional insureds on liability policies

 

 

 

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CONFIDENTIAL MATERIAL HAS BEEN OMMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISION.  BOXES AND ASTERIXES DENOTE SUCH OMISSION

 

 

(except employer’s liability, workers’ compensation and umbrella excess liability coverage) and that Landlord is named as a loss payee on the property insurance policies with respect to Landlord’s interest in improvements and betterments)  to Landlord on or before the Rent Commencement Date and at least annually thereafter.  If Tenant fails to provide evidence of insurance required to be provided by Tenant hereunder, prior to the Rent Commencement Date and, thereafter, within thirty (30) days following Landlord’s request during the Lease Term (and in any event within thirty (30) days prior to the expiration date of any such coverage, any other cure or grace period provided in this Lease not being applicable hereto), Landlord shall be authorized (but not required), after ten (10) days’ prior notice, to procure such coverage in the amount stated, with all costs thereof to be chargeable to Tenant and payable as Additional Rent within thirty (30) days after receipt of written invoice therefor.

 

12.3   Throughout the Lease Term, Landlord agrees to carry and maintain all-risk property insurance (with full replacement cost coverage) covering the Building and the Office Building, including the Building Structure and Systems, and any other equipment, fixtures and property of Landlord therein, in an amount required by its insurance company to avoid the application of any coinsurance provision.  Landlord hereby waives its right of action and recovery against and releases Tenant and Tenant’s Affiliates, shareholders, partners, directors, officers, employees, agents and representatives (“ Tenant’s Representatives ”) from any and all liabilities, claims and losses for which they may otherwise be liable to the extent that (i) Landlord is covered therefor by insurance carried or required to be carried under this Lease and (ii) provided that Landlord is carrying such required insurance, Landlord receives proceeds therefor.  Landlord shall secure a waiver of subrogation endorsement from its insurance carrier with respect to Tenant and Tenant’s Representatives.  Landlord also agrees to carry and maintain, throughout the Lease Term, commercial general liability insurance in limits it reasonably deems appropriate (but in no event less than the limits required of Tenant pursuant to Section 12.2 above).  Landlord may elect to carry such other additional insurance or higher limits as it reasona


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