<PAGE>
.
.
.
Exhibit 10.38
INDEX
<TABLE>
<CAPTION>
SECTION TITLE
PAGE
------- -----
----
<S>
<C>
<C>
1.
Term & Possession
1
(a) Duration
1
(b) Memoranda
1
2.
Rent
1
(a) Minimum Rent
1
(b) Consumer Price Index
2
3.
Rent Adjustment Increases in Operating Expenses and Taxes
3
(a) Definitions
3
(b) Share of Operating Expenses and Taxes
6
(c) Operating Expense and Tax Statements
6
(d) Survival After Termination
6
(e) Reduction or Elimination of Operating Expenses Component
7
(f) Essential Capital Improvement
7
(g) Tenant's Proportionate Share
8
(h) Review of Books
8
4.
Improvement of the Demised Premises
8
(a) Tenant's Plans
8
(b) Tenant's Improvement Plans
8
(c) Tenant's Work
8
(d) Charges For Work
8
(e) Tenant's Contractor
9
5.
Services
10
(a) Water
10
(b) Electric Current
10
(c) HVAC
10
</TABLE>
<PAGE>
INDEX - CONTINUED
<TABLE>
<S>
<C>
<C>
(d) Janitorial
11
(e) Elevators
11
6.
Quiet Enjoyment
7.
Certain Rights Reserved to Landlord
11
8.
Estoppel Certificate By Tenant
12
9.
Waiver of Certain Claims
13
10.
Liability Insurance
13
11.
Holding Over
14
12.
Assignment and Subletting
14
13.
Condition of Premises
16
14. Use
of Premises
16
15.
Repairs
19
16.
Untenantability
19
17.
Eminent Domain
20
18.
Landlord's Remedies
20
19.
Notice and Consents
23
20.
Invalidity of Particular Provisions
23
21
Waiver of Benefits
23
22.
Miscellaneous Taxes
24
23.
Sprinklers
24
24. No
Estate in Land
24
</TABLE>
<PAGE>
INDEX - CONTINUED
<TABLE>
<S>
<C>
<C>
25.
Security
Deposit
24
26.
Substitute Premises
24
27.
Brokerage
25
28.
Special Stipulations
25
29.
Subordination
27
30.
Option to Renew
28
31.
Right of First Refusal
28
</TABLE>
<PAGE>
WITNESSETH that ONE TRIAD CENTER ASSOCIATES (the Landlord), a North
Carolina
Partnership, hereby leases unto ANALOG DEVICES, INC. having its
principal place
of business at One Triad Center, Greensboro, North Carolina 27409
(the Tenant),
and the Tenant accepts from Landlord, the premises containing
approximately
23,734 square feet located on the first floor outlined on the floor
plans
hatched in black and attached hereto as Exhibit A (the "Premises")
in the
Building known as "One Triad Center" (the "Building"), the
Building, together
with the land on which it is located and all other improvements
thereon being
called the Property), for the term, the rent, and subject to the
conditions and
covenants hereinafter provided.
In Consideration thereof, the parties covenant and agree as
follows:
1. Term and Possession
(a)
Duration. The term of this Lease shall commence upon the date
of
execution of this Lease (the "Commencement Date"),. The term shall
continue for
a period terminating on December 31, 2000, unless extended or
sooner terminated
as herein provided. During any period of time prior to the
commencement date in
which Tenant takes full or partial possession of the Premises for
the purpose of
making its improvements thereto or otherwise, Tenant shall be bound
by all the
terms and provisions hereof other than the requirement of payment
of minimum
rent. It is understood and agreed that the Commencement Date and
occupancy may
be extended to the date of execution of the prior tenant's lease
termination
agreement.
(b)
Memoranda. When the date of commencement of the term of this Lease
is
established, Landlord and Tenant shall promptly execute and
acknowledge a
memorandum in form substantially as set forth in Exhibit "B"
hereto, containing
the information set forth in said Exhibit.
2. Rent
(a)
Rent shall accrue and be payable effective January 1, 1998, Rent
shall
accrue and be payable during the term as follows: minimum annual
rent shall be
equal to Three Hundred Fifty Thousand Seventy-Six and 50/100
Dollars
($350,076.50) payable in equal monthly installments of Twenty-Nine
Thousand One
Hundred Seventy Three and 04/100 Dollars ($29,173.04) for a term of
January 1,
1998 through June 30, 1998. In addition, Tenant shall pay an
additional $.29 per
square foot for Operating Expenses and Taxes for the term of
January 1, 1998
through December 31, 1998 and thereafter as set forth in Paragraph
3(b) hereof.
Beginning July 1, 1998, the minimum annual rent shall be equal to
Three Hundred
Eighty-Five Thousand Six Hundred Seventy-Seven and 50/100 Dollars
($385,677.50)
payable in equal monthly installments of Thirty-Two Thousand One
Hundred
Thirty-Nine and 79/100 Dollars ($32,139.79). Such minimum annual
rent shall be
payable in advance, in equal monthly installments of one twelfth
(1/12th) of the
annual amount, the first monthly installment to be payable upon
4
<PAGE>
the commencement date of the term of this Lease, subject to
proration based upon
a thirty day month if such commencement date is other than the
first day of a
month, and subsequent monthly installments to be payable on the
first day of
each successive month of the term hereof following the first month
of such term.
(b)
In addition to the rental payable under Section 3 hereof, the
minimum
annual rental payable hereunder by Tenant shall be increased as of
the first day
of each lease year commencing July 1, 1399 (the "CPI Increase
Date") as set
forth below, without duplication.
(i) "Index" - The Index shall mean the index now known as The
United
States Bureau of Labor Statistics, Department of Labor, Consumer
Price
Index for All Urban Consumers, United States city average, all
items
(1982-84 - 100). In the event the foregoing Index shall hereafter
be
converted or otherwise revised, "Index" shall mean such index
or
combination of indices as Landlord shall select, from any
available
indices, for the purposes of this Section. If the said Bureau shall
cease
publication of indices relating to the foregoing statistical
information,
"Index" shall mean such index or combination of indices of
similar
statistical information as Landlord shall select for the purposes
of this
Section.
(ii) "Base Index" shall mean the Index for the month two (2)
months
prior to the month in which the term of this Lease shall
commence.
(iii) "Anniversary Index" shall mean the Index for the month
(the
"Anniversary Month") two months prior to the month in which the
CPI
Increase Date shall occur.
(iv) "Cost of Living Increase" shall mean a fraction, the numerator
of
which shall be the Index in an Anniversary Month less the Base
Index, and
the
denominator of which shall be the Base Index.
Landlord shall furnish to Tenant, after the Index for each
Anniversary
Month is published, a statement setting forth the Base Index, the
Index for that
Anniversary Month, and the Cost of Living Increase. If the Index
for that
Anniversary Month shall exceed the Base Index, there shall accrue,
and be
payable by Tenant on the first day of each calendar month in equal
monthly
installments as additional minimum rent, for and with respect to
each twelve
month (12) month period on and after the CPI Increase Date, an
amount determined
by multiplying the Cost of Living Increase times the minimum annual
rental under
Section 2.(a) at the commencement date of this Lease. Should the
foregoing
calculations be delayed beyond the CPI Increase Date for any year,
on or before
the tenth (10th) day following submission of said statement to
Tenant, Tenant
shall pay to Landlord a lump sum equal to one-twelfth (1/12) of
said additional
minimum annual rent multiplied by the number of full or partial
calendar months
elapsed from said CPI Increase Date to the end of the month in
5
<PAGE>
which the day of payment occurs. On the first day of each
succeeding calendar
month, Tenant shall pay to Landlord one-twelfth (1/12) of said
additional
minimum annual rent.
6
<PAGE>
3. Rent Adjustment: Increases in Operating Expenses and Taxes
(a)
Definitions. As used in this Paragraph 3, the following terms shall
be
defined as hereinafter set forth:
(i) "Taxes" shall mean all taxes, assessments, and charges levied
upon
or
with respect to the Property or any personal property of Landlord
used
in
the operation thereof, or Landlord's interest in the Property or
such
personal property. Taxes shall include, without limitation, all
general
real
property taxes and general and special assessments, charges, fees,
or
assessments for transit, housing, police, fire, or other
governmental
services or purported benefits to the Property, service payments in
lieu of
taxes, and any tax, fee, or excise on the act of entering into this
Lease
or
any other lease of space in the Building, on the use or occupancy
of the
Building or any part thereof, or on the rent payable under any
lease or in
connection with the business of renting space in the Building, that
are now
or
hereafter levied or assessed against Landlord by the United States
of
America, the State of North Carolina, or any political subdivision,
public
corporation, district, or other political or public entity. Taxes
shall
also
include any other tax, fee, or other excise, however described,
that
may
be levied or assessed as a substitute for or as an addition to,
in
whole or in part, any other Taxes, whether or not now customary or
in the
contemplation of the parties on the date of this Lease. Taxes shall
not
include franchise, transfer, inheritance, or capital stock taxes or
income
taxes measured by the net income of Landlord from all sources,
unless, due
to a
change in the method of taxation, any such tax is levied or
assessed
against Landlord as a substitute for or as an addition to, in whole
or in
part, any other tax that would otherwise constitute a property Tax.
Taxes
shall also include reasonable legal fees, costs, and disbursements
incurred
in
connection with proceedings to contest, determine, or reduce
Taxes.
(ii)
"Operating Expenses" shall include all expenses, costs and
charges paid or incurred by Landlord for the management,
operation,
maintenance and repair ("repair" as used in connection with
operating
expenses shall not include
7
<PAGE>
alterations or other capital expenditures made by Landlord, but
shall
include the cost of any capital improvements made that were
required under
any
governmental law or regulation that was not applicable to the
Premises
at
the time of delivery of possession of the Premises to Tenant for
the
benefit of the Premises) of the Land and Building (as a first class
office
building) and shall include, but not be limited to, the
following:
(A) "Labor Costs" (as hereinafter defined) for first class
office
buildings, for the services of the following classes of
employees
performing services required in connection with the operation,
repair and maintenance of the Building:
(1) the Building superintendent, his assistants and the
clerical staff attached to the Building superintendent's
office;
(2) window cleaners and miscellaneous handymen;
(3) cleaners and janitors employed in and about the Building
for the performance of services;
(4) watchmen and persons engaged in patrolling and
protecting
the Building;
(5) carpenters, engineers, mechanics, electricians, painters
and plumbers engaged in the operation, repair and
maintenance of any part of the Building, the sidewalks
around the Building and the heating, air-conditioning,
ventilating, plumbing, electrical, elevator and other such
systems of the Building;
(6) such other personnel employed from time to time in order
to properly maintain and operate the Building; and
(7) personnel engaged exclusively in supervision of any of
the persons mentioned above in subparagraphs (1) through
(6).
(B) The cost of materials and supplies used only in the
operation, repair and maintenance of the Building.
8
<PAGE>
(C) The cost of replacement for tools and equipment used on the
operation, repair and maintenance of the Building.
(D) The amounts paid to managing agents for the Building employed
by
Landlord, or for reasonable legal, accounting or other
professional
fees
[necessarily incurred in connection with the operation of the
Building].
(E) Amounts charged to Landlord by contractors for services,
materials
and supplies furnished in connection with the operation, repair
and
maintenance of any part of the Building and Land, and the
heating,
air-conditioning, ventilating, plumbing, electrical, elevator
and
other systems of the Building.
(F) Amounts charged to Landlord by contractors for window
cleaning,
and cleaning and janitorial services in and about the Building;
(G) Premiums paid by Landlord for All Risk Insurance for the
Building,
including, without limitation, fire insurance, with such
extended
coverage, vandalism and malicious, mischief coverage, and rent
insurance coverage, of the type and character usually carried
by
landlords of similar first class buildings and premiums paid
for
comprehensive general public liability insurance against claims
for
bodily injury, death or property damage, and if carried by
Landlord,
9
<PAGE>
boiler and machinery insurance and war risk insurance, and such
other
insurance as may from time to time be reasonably required by
Landlord
to protect Landlord against other insurable hazards, which at the
time
are commonly insured against in the case of premises similar to
the
Building.
(H) Water
charges and sewer rents.
(I) The cost of utilities necessary for the operation, maintenance
and
repair of the Building.
(J) The cost of electricity (including with out limitation,
fuel
adjustment charges) used to operate lighting fixtures, power
appliances, machinery, heating, ventilation and
air-conditioning
equipment and all equipment used in connection with the
operation,
maintenance and repair of the Building and the offices therein
located.
(K) Any other expense or charge which, in accordance with sound
accounting and management principles generally accepted with
respect
to first class buildings in Greensboro, North Carolina, would
be
construed as an operating expense.
Operating Expenses shall be "net only", and for that purpose shall
be
reduced by the amounts of any reimbursement, credit, recoupment,
discount, or
allowance received by Landlord in connection with such
expenses.
"Labor Costs" shall mean all expenses incurred by Landlord or on
Landlord's
behalf which shall be directly related to employment of personnel,
including but
not limited to, amounts incurred for wages, salaries and other
compensation for
services, payroll, social security, unemployment and other similar
taxes,
workmen's compensation insurance, disability benefits,
pensions,
hospitalization, retirement plans and group insurance, uniforms and
working
clothes and the cleaning thereof, and expenses imposed on or on
behalf of the
Landlord pursuant to any collective bargaining agreement.
The
following items shall be excluded from Operating Expenses:
(i) Labor Costs in respect of officers and executives of Landlord
or
individual partners of a successor of Landlord if such successor be
a
partnership.
(ii) Any insurance premium to the extent that Landlord is
reimbursed
for
such premium.
(iii) The cost of any items for which Landlord is reimbursed by
insurance.
(iv) The cost of any additions to the Building subsequent to the
date
of
original construction or any alterations or refurbishing of space
leased
to
other tenants of the Building.
10
<PAGE>
If the Landlord is not furnishing any particular work or service
which Landlord
is obligated to perform under this Lease (the cost of which if
performed by the
Landlord would constitute an Operating Expense) to a tenant who has
undertaken
to perform such work or service in lieu of the performance thereof
by the
Landlord, Operating Expenses shall be deemed for the purposes of
this section to
be adjusted downward by an amount equal to the additional Operating
Expense
which would reasonably have been incurred during such period by the
Landlord if
it had at its own expense furnished such work or service to such
tenant.
(b)
Share of Operating Expenses and Taxes. For and with respect to
each
calendar year of the term of this Lease that the "Operating
Expenses and Taxes"
as hereinabove defined exceed the "Operating Expenses and Taxes"
for 1998 (the
"Base Year"), there shall_ accrue, as additional rent, Tenant's
Share of
Operating Expenses and Taxes, being a percentage of such excess
Operating
Expenses and Taxes based on Tenant's rentable square footage as
relayed to the
total rentable square footage in the Building. Such additional rent
shall be on
a per-diem basis for any partial calendar year included within the
beginning and
end of the term. Any additional rent under this Paragraph shall be
paid by
Tenant as a lump sum after the end of the calendar year for which
such payment
is first due, and within thirty (30) days after submission of a
bill therefor.
In addition, Tenant shall pay as estimated additional monthly rent
one-twelfth
of the amount of such additional rent, per month for each calendar
month during
the calendar year immediately succeeding the calendar year in which
the actual
operating expenses and taxes were incurred, with such procedure
being followed
for each year thereafter. If such estimated additional monthly
rental payments
for any calendar year exceed the actual additional monthly rent
under this
Section 3 for such year, such excess shall be applied as a credit
against
subsequent payments of estimated additional monthly rent. The
portion of such
additional rent allocable to the months of the then current
calendar year
(including the month in which such notice is received) which have
then elapsed
(computed on the basis of one-twelfth of Tenant's pro rata portion
of such
increases for each elapsed month) shall be due and payable to
Landlord fort
with; thereafter, Tenant shall pay on the first day of each
calendar month
one-twelfth of the amount of such additional rent.
(c)
Operating Expense and Tax Statements. Landlord shall furnish to
Tenant,
contemporaneously with the furnishing of billings to Tenant on
account of
Operating Expense and Taxes as hereinbefore provided, a comparative
statement
setting forth in reasonable detail the basis for the amount due by
Tenant. Any
such comparative statement shall be deemed approved by Tenant
unless within
thirty (30) days after the furnishing thereof, Tenant shall notify
Landlord that
it disputes the correctness of the statement, specifying in detail
the basis for
such assertion. Pending the resolution of such dispute, however,
Tenant shall
make payment in accordance with said comparative statement.
(d)
Survival After Termination. If, upon termination of this Lease for
any
cause, the amount of any additional rent due pursuant to this
Section 3 has not
yet been determined, Tenant
11
<PAGE>
shall pay Landlord an estimated amount of additional rent as
determined by
Landlord based upon the preceding year's additional rent and, an
appropriate
payment from Tenant to Landlord, or refund from Landlord to Tenant,
shall be
made promptly after such determination.
(e)
Reduction or Elimination of An Operating Expense Component. If,
during
any calendar year, there shall be a reduction or elimination of any
particular
component of Operating Expenses by reason of the introduction of a
labor saving
device, energy conservation device, capital improvement or
replacement installed
by Landlord, the corresponding item of expense in the Operating
Expense for the
Base Year, shall be eliminated or reduced (in the same proportion
as the
reduction of that item in the period set forth below). The
reduction of the
operating expense item in the Base Year shall be made on an
annualized basis, in
the same proportion as the reduction of that item for the first 12
months of the
new operation.
(f)
Essential Capital Improvement. In the event Landlord shall
hereafter
make a capital expenditure for an "Essential Capital Improvement"",
as
hereinafter defined in this Section, the annual amortization of
such expenditure
(determined by dividing the amount of the expenditure by the
reasonable useful
life of the improvement) shall be deemed a cost to be included
within "Operating
Expenses" for each year of such useful life. As used herein, an
"Essential
Capital Improvement" means any one or more of the following:
(1) a labor saving device or other installation, improvement or
replacement which reduces Operating Expenses, whether or not
voluntary or
required by governmental mandate; or
(ii) an installation or improvement required by reason of any
law,
ordinance or regulation of any governmental or quasigovernmental
body,
which requirement did not exist on the date hereof, and is
applicable
generally to similar office buildings in the City of Greensboro,
North
Carolina; or
(iii) an installation or improvement which directly enhances
the
safety of tenants in the Building generally, whether or not
voluntary or
required by governmental mandate (as, for example, but without
limitation,
for
fire safety or security).
In no event shall an Essential Capital Improvement be treated as an
Operating
Expense component as described under Section 3(e) above.
In determining Operating Expenses for any year, including the Base
Year for
Operating Expenses, if less than 95% of the rentable area of the
Building shall
have been occupied by tenants for more than thirty (30) days during
such year,
Operating Expenses shall be deemed for such year to be an amount
equal to the
expenses which would be incurred had such occupancy of the Building
been 95%
12
<PAGE>
throughout such year, as reasonably determined by Landlord, except
that in no
event shall Operating Expenses for any year be based upon a
percentage of
occupancy less than that utilized for the Base Year for Operating
Expenses.(
(g)
For the purpose of this Section, Tenant's Proportionate Share
of
Operating Expenses and Taxes shall be 32.07% which is based on the
gross
rentable square foot area of the demised premises of 23,734 sq. ft.
as it
relates to the gross rentable square foot area of the Building of
74,000 square
feet.
(h)
Tenant may review Landlord's books and records related to
Operating
Expenses and Taxes and the calculation of Tenant's Proportionate
Share during
regular business hours upon forty-eight (48) hours notice.
4. Improvement of the Demised Premises
(a) Tenant's Plans.
Landlord or Tenant with Landlord's written approval
agrees to perform work in the Premises as shown on Tenant's Layout
Plans, as
prepared by Tenant, and attached hereto and made a part hereof,
which plans
designate the construction and finishing of the Premises for
Tenant's occupancy.
Tenant's Layout Plans shall be in conformity with the floor plans
annexed hereto
as Exhibit "A" and with all applicable laws and requirements of
public
authorities. Tenant's Layout Plans shall designate, among other
things, the
locations of and specifications for all plumbing, electrical and
mechanical
equipment to be installed in the 'remises, all partitions, doors,
lighting
fixtures, electric receptacles and switches, telephone outlets and
special
air-conditioning and other installations.
(b)
Tenant's Improvement Plans. Tenant's Layout Plans and Finish Plans
are
collectively referred to in this Lease as "Tenant's Improvement
Plans". The work
required to be performed pursuant to Tenant's Improvement Plans and
the
Engineering Plans is herein sometimes referred to as "Tenant
Work."
(c)
Tenant's Work. Tenant shall complete and prepare the Premises
for
Tenant's initial occupancy in a good and workmanlike manner
substantially in
accordance with Tenant's Improvement Plans and the Engineering
Plans. Landlord
reserves the right, however:
(1) to make substitutions of material of equivalent grade and
quality when and if any specified material shall not be readily
and
reasonably available, and
(ii) to make changes necessitated by conditions met in the
course
of construction, provided that Tenant's approval of any
substantial
change shall first be obtained (which approval shall not be
unreasonably withheld or delayed so long as there shall be
general
conformity with Tenant's Improvement Plans).
(d)
Charges for Work. In the completion and preparation of the Premises
in
accordance with Tenant's Improvement Plans, Tenant agrees to
perform at its own
expense those items of the work set forth on Exhibit "C" attached
hereto (herein
referred to as "Standard Tenant Work") 'as shall be reflected in
Tenant's
Improvement Plans. All work performed by Tenant in addition to
or
13
<PAGE>
in substitution for Standard Tenant Work is hereinafter referred to
as "Special
Tenant Work". All special Tenant Work shall be furnished, installed
and
performed by Tenant upon Landlord's
14
<PAGE>
written approval of such Special Tenant Work and at Tenant's
expense, utilizing
a general contractor (" Tenant's Contractor") approved by Landlord.
Unless
otherwise agreed in writing, the charge to Tenant for Special
Tenant Work shall
be Tenant's out-of-pocket expenses of every kind and nature in
connection
therewith, including without limitation Tenant's contract or
purchase price for
materials, labor and services.
(e)
Tenant's Contractor. Tenant may at its sole expense select and
employ
its own contractors for specialized finishing work in the Premises
which is not
to be performed by Landlord and which is reflected as such in
Tenant's
Improvement Plans, such as carpeting, telephone installation,
special cabinet
work and millwork, decoration and installation of specialized
equipment, subject
to the following qualifications:
(1) Tenant shall first obtain the approval of Landlord, in
writing, of the specific work it proposes to perform and
shall furnish Landlord with reasonably detailed plans and
specifications therefor (such approval not to be
unreasonably withheld);
(2) The work shall be performed by responsible contractors
and subcontractors approved in advance by Landlord, who
shall not, in Landlord's reasonable opinion, prejudice
Landlord's relationship with Landlord's contractors or
subcontractors or the relationship between such contractors
and their subcontractors or employees, or disturb harmonious
labor relations, who shall furnish in advance and maintain
in
effect Workmen's Compensation Insurance in accordance
with statutory requirements and comprehensive public
liability insurance (naming, Landlord and Landlord's
contractors and subcontractors and Landlord's managing agent
as additional insureds) with limits satisfactory to
Landlord, and who shall, prior to the commencement of any
work, file waivers of mechanic's liens on account of the
work to be performed by any of Tenant's contractors,
sub-contractors or materialmen;
(3) No such work shall be performed in such manner or at
such times as to interfere with any work being done by any
of Landlord's contractors or subcontractors in the Premises
or in the Building or about the Property generally. Landlord
shall, however, endeavor to allow Tenant access for such
work prior to the commencement of the term hereof at the
earliest time consistent with the restrictions of this
subsection (g);
(4) Tenant and its contractors and subcontractors shall be
solely responsible for the transportation, safekeeping and
storage of materials and equipment used in the performance
of such finishing work, for the removal of waste and debris
resulting therefrom, and for any damage caused by them to
any installation or work performed by Landlord's contractors
and subcontractors; and
15
<PAGE>
(5) Tenant's contractors and subcontractors shall be subject to
the general administrative supervision of Landlord's general
contractor for scheduling purposes, but said general contractor
of Landlord shall not be responsible for any aspect of the work
performed by Tenant's contractors or subcontractors or for the
coordination of the work of Landlord's contractors with
Tenant's
contractors.
5. Services
The Landlord shall provide, at Landlord's expense, except as
otherwise provided,
the following services on Monday through Friday from 8:00 A.M. to
6:00 P.M., and
on Saturday from 8:00 A.M. to 1:00 P.M., legal holidays
excepted.
(a)
Reasonable quantities of water to lavatories, toilets and water
fountains in or appurtenant to the Premises.
(b)
Reasonable amounts of electric current as are customarily provided
in
Class A office space. If tenant shall require electric current in
excess of that
usually furnished or supplied for use of the Premises as general
office space,
Tenant shall first procure the consent of the Landlord which
consent Landlord
may refuse. In the event Landlord shall approve Tenant's request
for excess
electric current, Landlord may cause an electric check meter to be
installed in
the Premises or Landlord shall have the right to cause a reputable
independent
electrical engineer or consulting firm to survey and determine the
value of such
excess electric current. The cost of any such survey or meters and
installation,
maintenance and repairs thereof shall be paid for by Tenant. Tenant
agrees to
pay the Landlord, promptly upon demand therefor, for all such
excess electrical
current consumed plus any additional expenses incurred in keeping
account of the
excess electrical current so consumed. Tenant covenants and agrees
that at all
times its use of electrical current shall never exceed Tenant's
proportionate
share of the capacity of existing feeders to the Building or the
riser or risers
or wiring installation. Any riser or wiring to meet Tenant's excess
electric
requirements upon written request of Tenant, will be installed by
Landlord at
the sole cost and expense of Tenant, if in Landlord's sole
judgment, the same is
necessary and will not cause permanent damage or injury to the
Building or the
Premises or cause or create a dangerous or hazardous condition or
entail
excessive or unreasonable alteration, repairs or expenses or
interfere with or
disturb other tenants or occupants.
(c)
HVAC. Landlord shall furnish heat, ventilation and air-conditioning
to
the Premises, Monday through Friday from 8:00 A.M. to 6:00 P.M.,
and on Saturday
from 8:00 A.M. to 1:00 P.M., legal holidays excepted. Heat and
air-conditioning
required by Tenant at times other than those mentioned above shall
be supplied
upon reasonable prior notice, and shall be paid for by Tenant,
promptly upon
billing, at such rates as Landlord shall from time to time
establish therefor.
The heating and air-conditioning systems intended to service the
Premises have
been designed to be capable of providing comfortable occupancy for
normal office
uses. Any additional or supplementary heating or cooling
systems
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required or desired by Tenant may be installed by Tenant, at
Tenant's cost, in
accordance with the provisions of Paragraph 4 hereof. The
furnishing of heat and
air-conditioning shall be subject to any statute, ordinance, rule,
regulation,
resolution or recommendation for energy conservation which may be
promulgated by
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any governmental agency or organization which Landlord shall be
required to
abide by, or in good faith may elect to abide with.
(d)
Janitorial. Landlord shall provide janitorial services to all
portions
of the Premises as specified on Exhibit "D" annexed hereto. Any and
all
additional or specialized janitorial service desired by Tenant may
be contracted
for by Tenant directly with Landlord's janitorial agent, and the
cost and
payment therefor shall be and remain the sole responsibility of
Tenant.
(e)
Landlord will keep in operation in the Building during the
aforesaid
business period, as many of the passenger elevators as in
Landlord's judgment
are necessary to maintain elevator service. In case of accident,
labor strikes,
repairs, renewals or improvements to the Building or machinery
therein, or for
other cause deemed sufficient by Landlord, or those acting for
Landlord, the
operation of said elevators and other machinery may be changed or
suspended.
Landlord reserves the right to alter the hours during which the
above
services are to be provided during the term hereof; however
services as are
customarily offered in Class A office space shall be provided.
Should Tenant require any additional work or service, including but
not
limited to the additional work or service described above,
including service
furnished outside the stipulated hours, Landlord may, on terms to
be agreed,
upon reasonable advance notice by Tenant, furnish such additional
service and
Tenant agrees to pay the Landlord such charges as may be agreed on,
but in no
event at a charge less than Landlord's actual cost plus overhead
for the
additional services provided.
It is understood that
Landlord does not warrant that any of the services
referred to above, or any other services which Landlord may supply,
will be free
from interruption, Tenant acknowledging that any one or more such
services may
be suspended by reason of accident or of repairs, alterations or
improvements
necessary to be made, or by strikes or lockouts, or by reason of
operation of
law, or causes beyond the reasonable control of Landlord. Any such
interruption
or discontinuance of service shall never be deemed an eviction or
disturbance of
Tenant's use and possession of the Premises, or any part thereof,
or render
Landlord liable to Tenant for damages by abatement of rent or
otherwise, or
relieve Tenant from performance of Tenant's obligations under this
Lease.
6. Quiet Enjoyment
So
long as the Tenant shall observe and perform the covenants and
agreements binding on it hereunder, the Tenant shall at all times
during the
term herein granted peacefully and quietly have and enjoy
possession of the
Premises without any encumbrance or hindrance by, from or through
the Landlord,
subject to Section 29.
7. Certain Rights Reserved To The Landlord
The
Landlord reserves all rights with respect to the Property not
Leased to
Tenant hereby, including without limitation, the following
rights:
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(a)
To name the Building and/or to change the name or street address of
the
Building.
(b)
To install and maintain a sign or signs on the exterior or interior
of
the Building.
(c)
To designate all sources furnishing sign painting and lettering,
ice,
drinking water, towels, toilet supplies, shoe shining, vending
machines, mobile
vending service, catering, and like services used on the Premises
or in the
Building.
(d)
During the last ninety (90) days of the term, if during or prior
to
that time the Tenant vacates the Premises, to decorate, remodel,
repair, alter
or otherwise prepare the Premises for reoccupancy, without
affecting Tenant's
obligation to pay rental for the Premises.
(e)
To constantly have pass keys to the Premises.
(f)
On reasonable prior notice to the Tenant, to exhibit the Premises
to
prospective tenants during the last twelve (12) months of the term,
and to any
prospective purchaser, mortgagee, or assignee of any mortgage on
the Property
and to others having a legitimate interest at any time during the
term.
(g)
At any time in the event of an emergency, and otherwise at
reasonable
times, to take any and all measures, including inspections,
repairs,
alterations, additions, and improvements to the Premises or to the
Building, as
may be necessary or desirable for the safety, protection or
preservation of the
Premises or the Building or the Landlord's interests, or as may be
necessary or
desirable in the operation or improvement of the Building or in
order to comply
with all laws, orders and requirements of governmental or other
authority.
(h)
To install vending machines of all kinds in the Premises, and
to
provide mobile vending service therefor, and to receive all of the
revenue
derived therefrom, provided, however, that no vending machines
shall be
installed by Landlord in the Premises nor shall any mobile vending
service be
provided therefor, unless Tenant so requests.
8. Estoppel Certificate by Tenant
The
Tenant agrees that from time to time upon not less than ten (10)
days
prior request by the Landlord, the Tenant will deliver to the
Landlord a
statement in writing certifying (a) that this Lease is unmodified
and in full
force and effect (or if there have been modifications that the same
is in full
force and effect as modified and identifying the modifications),
(b) the dates
to which the minimum annual rent and other charges have been paid,
(c) whether
or not Tenant has or claims any offset, deduction or counter claims
against
Landlord under this Lease and (d) that, so far as the person making
the
certificate knows, the Landlord is not in default under any
provision of this
Lease, and, if the Landlord is in default, specifying each such
default of which
the person making the certificate may have knowledge, it being
understood that
any such statement so delivered may be relied upon by any landlord
under any
ground or underlying lease, or any prospective purchaser,
mortgagee, or any
assignee of any mortgage on the Property.
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<PAGE>
9. Waiver of Certain Claims
The
Tenant, to the extent permitted by law, waives all claims it may
lave
against the Landlord, and against the Landlord's agents and
employees for damage
to person or property sustained by the Tenant or by any occupant of
the
Premises, or by any other person, resulting from any part of the
Property or any
equipment or appurtenances becoming out of repair, or resulting
from any
accident in or about the Property or resulting directly or
indirectly from any
act or neglect of any tenant or occupant of any Dart of the
Property or of any
other person, unless such damage is a result of the negligence or
contributory
negligence of Landlord, or Landlord's agents or employees. If any
damage results
from any act or neglect of the Tenant, the Landlord may, at the
Landlord's
option, repair such damage and the Tenant shall thereupon pay to
the Landlord
the total cost of such repair.
All
personal property belonging to the Tenant or any occupant of
the
Premises that is in or on any part of the Property shall be there
at the risk of
the Tenant or of such other person only, and the Landlord, its
agents and
employees shall not be liable for any damage thereto or for the
theft or
misappropriation thereof unless such damage, theft or
misappropriation is a
result of the negligence or contributory negligence of Landlord or
Landlord's
agents or employees. The Tenant agrees to hold the Landlord
harmless and
indemnified against claims and liability for injuries to all
persons and for
damage to or loss of property occurring in or about the Property,
due to any act
of negligence or default under this lease by the Tenant, its
contractors, agents
or employees.
To
the extent that the Tenant carries hazard insurance on any of
its
property in the Premises and to the extent that the Landlord
carries hazard
insurance on the Property, each policy of insurance shall contain,
if obtainable
from the insurer selected by the Tenant or the Landlord, as the
case may be,
without additional expense, a provision waiving subrogation against
the other
party to this Lease. If such provision can be obtained only at
additional
expense, the obligation to obtain such provision shall continue if
the other
party, on notice shall pay the amount of such additional expense.
Each of the
parties hereto hereby releases the other with respect to any
liability which the
other may have for any damage by fire or other casualty with
respect to which
the party against whom such release is claimed shall be insured
under a policy
or policies of insurance containing such provision waiving
subrogation.
10. Liability Insurance
Tenant shall, at its expense, maintain during the term,
comprehensive
public liability insurance, contractual liability insurance and
property damage
insurance under policies issued by insurers, with limits of not
less than
$5,000,000 for personal injury, bodily injury, death, or for damage
or injury to
or destruction of property'(including the loss of use thereof) for
any one
occurrence. Tenant's policies shall name Landlord, its
20
<PAGE>
agents, servants and employees as additional insureds. At the
option of the
Landlord, copies of certificates of insurance coverage shall be
held by
Landlord.
11. Holding Over
If
the Tenant retains possession of the Premises or any part thereof
for a
period of one (1) month after the termination of the term, the
Tenant shall pay
the Landlord Rent at triple the monthly rate specified in Section 2
and Section
3. If Tenant retains possession beyond that one (1) month period,
tenancy shall
continue at sufferance on a month-to-month basis at double the
monthly rent
specified in Section 2 and Section 3 for the time the Tenant thus
remains in
possession and, in addition thereto, shall pay the Landlord for all
damages
consequential as well as direct, sustained by reason of the
Tenant's retention
of possession. If the Tenant remains in possession of the Premises,
or any part
thereof, for a period greater than one (1) month after the
expiration of the
term, such holding over shall, at the election of the Landlord
expressed in a
written notice to the Tenant and not otherwise, constitute a
renewal of this
lease for one year. The provisions of this Section do not exclude
the Landlord's
rights of re-entry or any other right hereunder.
12. Assignment and Subletting
The
Tenant shall not, without the Landlord's prior written consent
which
shall not be unreasonably withheld, (a) assign, convey, mortgage,
pledge,
encumber or otherwise transfer (whether voluntarily or otherwise)
this Lease or
any interest under it; (b) allow any transfer thereof or any lien
upon the
Tenant's interest by operation of law; (c) sublet the Premises or
any part
thereof, or (J) permit the use or occupancy of the Premises or any
part thereof
by any one other than the Tenant.
Tenant agrees to pay to Landlord, on demand, reasonable costs
incurred by
Landlord in connection with any request by Tenant for Landlord to
consent to any
assignment or subletting by Tenant.
If
this lease be assigned or if the Premises or any part thereof be
sublet
or occupied by anybody other than Tenant, Landlord may, after
default by Tenant,
collect rent from the assignee, subtenant or occupant, and apply
the net amount
collected to the Rent herein reserved, but no such assignment,
subletting,
occupancy or collection shall be deemed a waiver of any of Tenants
covenants
contained in this Lease or the acceptance of the assignee,
subtenant or occupant
as Tenant, or a release of Tenant from further performance by
Tenant of
covenants on the part of Tenant herein contained.
Notwithstanding anything contained herein to the contrary, and in
addition
to the Landlord's right to consent to such assignment, in toe event
that any
time during the term of this Lease, Tenant desires to assign this
Lease, Tenant
should notify the Landlord in writing (hereinafter referred to as
"Assignment
Notice") of the terms of the proposed assignment and shall give the
Landlord the
21
<PAGE>
option to accept an assignment from the Tenant of this Lease on the
same terms
as this Lease or, at Landlord's option, to terminate this lease.
The option to
accept such assignment or to terminate this Lease shall be
exercisable by
Landlord in writing for a period of fifteen (15) days after the
receipt of the
Assignment Notice.
Notwithstanding anything contained herein to the contrary, and in
addition
to Landlord's right to consent to such sublet, in the event that at
any time
during the term of this lease Tenant desires to sublet all or part
of the
Premises, Tenant shall notify the Landlord in writing (hereinafter
referred to
as "Sublet Notice") of the terms of the proposed subletting and the
area so
proposed to be sublet and shall give the Landlord the option to
sublet from
Tenant such space (hereinafter referred to as "sublet space") at
the same rent
and additional rent as Tenant is required to pay to Landlord under
this lease
for the same space or, at Landlord's option, to terminate the lease
with respect
to the sublet space. If the sublet space does not constitute the
entire Premises
and Landlord exercises its option to terminate this lease with
respect to the
sublet space, then as to that portion of the Premises which is not
part of the
sublet space, this lease shall remain in full force and effect
except that the
Rent shall be reduced by a fraction, the numerator of which shall
be the
rentable square feet of the sublet space and the denominator of
which shall be
the rentable square feet of the Premises. The option to sublet, or
to terminate
the lease, shall be exercisable by Landlord in writing for a period
of fifteen
(15) days after receipt of the Sublet Notice.
In
the event Landlord exercises its option to accept such assignment
or to
sublease the sublet space, the terms of the assignment or the term
of the
subletting from the Tenant to the Landlord for the sublet space
shall be as set
forth in the Assignment Notice or the Sublet Notice, as the case
may be, and
shall be on such other terms and conditions as are contained in
this lease to
the extent applicable.
Tenant shall be entitled to receive Gross Proceeds (as hereinafter
defined)
in an amount (the "Priority Tenant Share") equal to the sum of
$1,000. After
Tenant has received the Priority Tenant Share, Tenant shall pay
Landlord, as
additional rent, as and when received, fifty percent (50%) of Gross
Proceeds.
"Gross Proceeds" means an amount equal to the excess, if any, of
(x) :he
amounts which are payable by the sublessee or an assignee under or
in connection
with any sublease or assignment of the Premises (less, in the case
of each
payment of fixed rent or basic rent, an amount equal to five (5%)
percent of
each such payment) over (y) the corresponding amounts, if any,
payable under
this Lease (or if there be no such corresponding amount, in excess
of zero).
Amounts which are payable by the sublessee or an assignee under or
in connection
with any sublease or assignment of the Premises shall be deemed (x)
not to be
Gross Proceeds until such payment is received by Tenant and (y) not
to include
any payment
22
<PAGE>
by the sublessee or an assignee under such sublease or operative
document(s)
with respect to such assignment which is identified as a payment
for tenant
improvements which were constructed by Tenant, or at Tenant's
direction, for
such sublessee or assignee, which shall not exceed in the aggregate
the then
unamortized cost to Tenant of such tenant improvements.
In
the event Landlord does not exercise either of its options
specified
above and Tenant completes an assignment or a sublease with a third
party, the
assignee or subtenant shall be subject to and comply with the
requirements of
this Section.
13. Condition of Premises
Tenant's taking possession of the Premises shall be conclusive
evidence as
against the Tenant that the Premises were in good order and
satisfactory
condition when the Tenant took possession. No promises of the
Landlord to alter,
remodel, repair or improve the Premises or the Building and no
representation
respecting the condition of the Premises or the Building have been
made by
Landlord to Tenant, other than as may be contained herein or in a
separate Work
Letter Agreement signed by Landlord and Tenant. At the termination
of this
Lease, the Tenant shall return the Premises broom-clean and in as
good condition
as when the Tenant took possession, ordinary wear and loss by fire
or other
casualty excepted, failing which the Landlord may restore the
Premises to such
condition and the Tenant shall pay the cost thereof on demand.
14. Use Of Premises
The
Tenant agrees to comply with the following rules and regulations
and
with such reasonable modifications thereof and additions thereto as
the Landlord
may hereafter from time to time make for the Building. The Landlord
shall not be
responsible for the -Ion-observance by any other tenant of any of
said rules and
regulations.
(a)
The Tenant shall not exhibit, sell or offer for sale on the
Premises or
in the Building, any article or thing except those articles or
things
essentially connected with the stated use of the Premises by the
Tenant without
the advance consent of the Landlord.
(b)
The Tenant will not make or permit to be made any use of the
Premises
or any part thereof which would violate any of the covenants,
agreements, terms,
provisions and conditions of this Lease or which directly or
indirectly is
forbidden by public law, ordinance or governmental regulation or
which may be
dangerous to life, limb, or property, or which may invalidate or
increase the
premium cost of any policy of insurance carried on the Building or
covering its
operation, or which will suffer or permit the Premises or any part
thereof to be
used in any manner or anything to be brought into or kept therein
which, in the
judgment of Landlord, shall in any way impair or tend to impair the
character,
reputation or appearance of the Property as a high quality office
building, or
which will impair or interfere with or tend to impair or interfere
with any of
the services performed by Landlord for
23
<PAGE>
the Property.
(c)
The Tenant shall not display, inscribe, print, paint maintain or
affix
on any place in or about the Building any sign, notice, legend,
direction,
figure or advertisement, except on the doors of the Premises and on
the
Directory Board, which shall be maintained by Landlord,, and then
only such
names(s) and matter, and in such color, size, style, place and
materials, as
shall firs: have been approved by the Landlord. The listing of any
name other
than that of Tenant, whether on the doors of the Premises, on the
Building
directory, or otherwise, shall not operate to vest
24
<PAGE>
any right or interest in this Lease or in the Premises or be deemed
to be the
written consent of Landlord mentioned in Section 12, it being
expressly
understood that any such listing is a privilege extended by
Landlord revocable
at will by written notice to Tenant.
(d)
The Tenant shall not advertise the business, profession or
activities
of the Tenant conducted in the Building in any manner which
violates the letter
or spirit of any code of ethics adopted by any recognized
association or
organization pertaining to such business, profession or activities,
and shall
not use the name of the Building for any purposes other than that
of the
business address of the Tenant and shall never use any picture or
likeness of
the Building in any circulars, notices, advertisements or
correspondence without
the Landlord's consent.
(e)
No additional locks or similar devices shall be attached to any
door or
window without Landlord's prior written consent which shall not be
unreasonably
withheld, so long as keys or access cards to such locks or devices
are provided
to Landlord. No keys for any doors other than those provided by the
Landlord
shall be made. If more than five (5) keys for one lock are desired,
the Landlord
will provide the same upon payment by the Tenant. All keys must be
returned to
the Landlord at the expiration or termination of this Lease.
(f)
The Tenant shall not make any alterations, improvements or
additions to
the Premises including, but not limited to, wall coverings, floor
coverings and
special lighting installations, without the Landlord's advance
written consent
in each and every instance, unless such alterations, improvements
or additions
are non-structural and the cost of such is less than, or equal to,
one thousand
dollars ($1,000.00). In the event Tenant desires to make
alterations,
improvements or additions, Tenant shall first submit to Landlord
plans and
specifications therefor and obtain Landlord's written approval
thereof prior to
commencing any such work. All alterations, improvements or
additions, whether
temporary or permanent in character, made by Landlord or Tenant in
or upon the
Premises shall become Landlord's property and shall remain upon the
Premises at
the termination of this Lease without compensation to Tenant
(excepting only
Tenant's movable office furniture, trade fixtures, office and
professional
equipment) provided, however, that Landlord shall have the right to
require
Tenant to remove such alterations, improvements or additions, at
Tenant's cost,
upon the termination of this Lease and to repair any damage to the
Premises
resulting therefrom.
(g)
All persons entering or leaving the Building after hours on
Monday
through Friday, or at any time on Saturdays, Sundays or holidays,
may be
required to do so under such regulations as the Landlord may
impose. The
Landlord may exclude or expel any peddler.
(h)
The Tenant shall not overload any floor. The Landlord may direct
the
time and manner of delivery, routing and removal, and the location,
of safes and
other heavy articles.
(i)
Unless the Landlord gives advance written consent, the Tenant shall
not
install or operate any steam or internal
25
<PAGE>
combustion engine, boiler, machinery, refrigerating or heating
device or
air-conditioning apparatus in or about the Premises, or carry on
any mechanical
business therein, or use the Premises for housing accommodations or
lodging or
sleeping purposes, or use any illumination other than electric
light, or use or
permit to be brought into the Building any inflammable fluids such
as gasoline,
kerosene, naphtha, and benzine, or any explosives, radioactive
materials or
other articles deemed extra hazardous to life, limb or property
except in a
manner which would not violate any ordinance or regulation of the
City. The
Tenant shall not use the Premises for any illegal or immoral
purpose. Tenant
shall be permitted to install a refrigerator, microwave oven, and
coffee machine
for its own use.
(j)
The Tenant shall cooperate fully with the Landlord to assure
the
effective operation of the Building's air-conditioning system
including the
closing of venetian blinds and drapes, and if windows are operable
to keep them
closed when the air-conditioning system is in use.
(k)
The Tenant shall not contract for any work or service which
might
involve the employment of labor incompatible with the Building
employees or
employees of contractors doing work or performing services by or on
behalf of
the Landlord.
(l)
The sidewalks, halls, passages, exits, entrances, elevators and
stairways shall not be obstructed by the Tenant or used for any
purpose other
than for ingress to and egress from its Premises. The halls,
passages, exits,
entrances, elevators, stairways and roof are not for the use of the
general
public and the Landlord shall in all cases retain the right to
control and
prevent access thereto by all persons whose presence, in the
judgment of the
Landlord, shall be prejudicial to the safety, character, reputation
and
interests of the Building and its tenants, provided that nothing
herein
contained shall be construed to prevent such access to persons with
whom the
Tenant normally deals in the ordinary course of Tenant's business
unless such
persons are engaged in illegal activities. No Tenant and no
employees or
invitees of any Tenant shall go upon the roof or mechanical floors
of the
Building.
(m)
Tenant shall not use, keep or permit to be used or kept any foul
or
noxious gas or substance in the Premises, or permit or suffer the
Premises to be
occupied or used in a manner offensive or objectionable to the
Landlord or other
occupants of the Building by reason of noise, odors and/or
vibrations, or
interfere in any way with other tenants or those having business
therein, nor
shall any animals or birds be brou
