LEASE AGREEMENT

 

Exhibit 99.1

 

LEASE AGREEMENT

 

BETWEEN

 

CORNERS REALTY CORPORATION, INC.

(Landlord)

 

AND

 

XTEND NETWORKS, INC.

(Tenant)

 

Dated: DECEMBER                      , 2004

 

 

TABLE OF CONTENTS

 

 

 

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This Lease Agreement (“Lease”) is made this 14th day of December, 2004 by and between CORNERS REALTY CORPORATION, INC., a Delaware corporation (“Landlord”), and XTEND NETWORKS, Inc., a Delaware corporation, (“Tenant”).

 

W I T N E S S E T H:

 

The parties hereto, for themselves, their legal representatives, successors and assigns, agree as follows:

 

1. BASIC LEASE INFORMATION. The terms used in this Lease shall have the meanings set forth in this Paragraph 1.

 

(a) Building. The office building located at 6625 The Corners Parkway, Norcross, GA 30092 and commonly known as “The Corners Office Park.”

 

(b) Land. Those certain parcels of land more particularly described on Exhibit A attached hereto and made a part hereof. The Land is part of the Park.

 

(c) Park. The Land and all improvements thereon, including, without limitation, the Building and the Common Areas.

 

(d) Premises. Suite Number 210 substantially as shown on Floor Plan(s) attached hereto as Exhibit B and made a part hereof, which the parties agree contains 5,740 rentable square feet as of the date of this Lease.

 

(e) Common Areas. Those certain areas and facilities of the Building and the Park which are from time to time provided by Landlord, in its discretion, for the use of tenants and their employees, clients, customers, guests, licensees and invitees or for use by the public.

 

(f) Permitted Uses. Executive and administrative offices reasonable and customary for Tenant’s business as a sales office and related uses there to.

 

(g) Commencement Date. January 1, 2005

 

(h) Expiration Date. December 31, 2009

 

(i) Term. Approximately sixty (60) Months, beginning on the Commencement Date and ending at 11:59 p.m. on the Expiration Date, unless this Lease is sooner terminated as provided herein.

 

(j) Tenant’s Share. 5.5%

 

(k) Rent. The Base Rent, the Additional Rent, as defined in Paragraph 3 , and all other sums due from Tenant to Landlord hereunder.

 

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(l) Base Rent:

 

 

(m) Operating Expense Base. The Operating Expenses paid or incurred with respect to the year beginning January 1, 2005.

 

(n) Refundable Security Deposit. $8,131.67

 

(o) Tenant’s Broker(s). The Staubach Company

 

(p) Landlord’s Broker/Manager. Trammell Crow Services, Inc.

 

(q) Tenant Improvements: Tenant shall receive an allowance (the “Tenant Improvement Allowance”) of up to $57,400.00 (or $10.00 per rentable square foot) to be applied toward construction to the Premises, space plans, construction documents, installation of cable television to Building and Premises, new finishes, construction management fee, permitting and related fees. Landlord agrees to repaint and recarpet the suite prior to occupancy with Tenant’s choice of building standard materials. The cost of said repainting and recarpeting of the Premises shall be deducted from the Tenant Improvement Allowance. Any unused portion of the Tenant Improvement Allowance can be used by Tenant for moving expenses or any additional mutually approved alterations to the suite in the first six months of the Lease Term, or as a credit against Base Rent due immediately following the period of rental abatement, in Tenant’s sole discretion.

 

2. TERM AND POSSESSION.

 

(a) Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the Premises for the Term. During the Term, Tenant shall have the right to use the Common Areas in common with others and in accordance with the Lease and the Rules and Regulations.

 

(b) Tenant hereby agrees to accept the Premises “as is” on the Commencement Date except as otherwise expressly set forth in this Lease. The taking of possession by Tenant shall be deemed conclusively to establish that the Building and other improvements are in good and satisfactory condition, as of that date except as otherwise expressly set forth in this Lease.

 

(c) In the event this Lease pertains to Premises in which building interior finish is to be constructed by Landlord (the “Leasehold Improvements”), the Commencement Date shall be the date set forth in Subparagraph 1(g) ; provided however that if for whatever reason Landlord cannot deliver possession of the Premises on the date set forth in Subparagraph 19g), the Commencement Date shall be the date that Landlord is able to deliver possession of the Premises. If a Leasehold Improvement Allowance is set forth in Paragraph 1 above, then Tenant shall be responsible for all hard and soft costs incurred in connection with the

 

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design and construction of the Leasehold Improvements which are in excess of the Tenant Improvement Allowance. The “Substantial Completion Date,” if relevant, shall be the date upon which the Leasehold Improvements have been substantially completed (anda Certificate of Occupancy or other documents required by the governing authority if applicable are obtained), except for punch list items, in accordance with the plans and specifications (“Plans and Specifications”) attached hereto as Exhibit C and made a part hereof and the Work Agreement (“Work Agreement”) attached hereto as Exhibit D and made a part hereof, provided however, that if Landlord shall be delayed in such substantial completion as a result of: (i) Tenant’s failure to agree to plans, specifications, and cost estimates within five (5) Business Days; (ii) Tenant’s request for materials, finishes or installations other than Landlord’s standard; (iii) Tenant’s material changes in plans and specifications; (iv) the performance or completion by a party employed by Tenant, or (v) the failure by Tenant to make payment for the cost of the Leasehold Improvements in excess of the Tenant Improvement Allowance as set forth above, the Commencement Date and the payment of Rent hereunder shall be accelerated by the number of days of such delay, and provided further that if Landlord cannot substantially complete the Premises as a result of any of events (i) through (v) above, Landlord may at its election complete so much of the Leasehold Improvements as may be practical under the circumstances and, by written notice to Tenant, establish the Commencement Date as the date of such partial completion, subject to any applicable accelerations due to delays resulting from events (i) through (v) above. Tenant shall provide Landlord with a punch list within ten (10) days of the Substantial Completion Date, and Landlord shall proceed to complete these items promptly. The taking of possession by Tenant shall be deemed conclusively to establish that the Leasehold Improvements have been completed in accordance with the plans and specifications (except for punch list items) and that the Premises are in good and satisfactory condition.

 

(d) Intentionally Omitted.

 

(e) Landlord may submit to Tenant a written agreement, substantially in the form annexed as Exhibit D , confirming the date fixed by Landlord, in accordance with the provisions of this Lease, as the Commencement Date and the Expiration Date, and Tenant shall execute such agreement and return it to Landlord within fifteen (15) calendar days thereafter. Any failure of the parties to execute such written agreement shall not affect the validity of the Commencement Date or the Expiration Date as fixed and determined by Landlord. In the event of any dispute as to the substantial completion of work required to be performed by Landlord, the certificate of Landlord’s architect or general contractor shall be conclusive.

 

3. BASE RENT; ADDITIONAL RENT.

 

(a) Tenant shall pay in advance to Corners Realty Corporation, Inc. P. O. Box 531258, Atlanta, Georgia 30353-1258, Accounts Receivable, or at such other place as Landlord shall designate in writing, promptly, without notice, demand, offset or deduction, in lawful money of the United States of America on the first day of each calendar month during the Term: (i) the Base Rent as set forth in Paragraph 1(l) in equal installments in advance of the first day of each calendar month of the Term; and (ii) the additional rent (“Additional Rent”) consisting of all other sums of money as shall become due from and be payable by Tenant under this Lease including, but not limited to, those described in Subparagraph 3(b) below (for default in the payment of which Landlord shall have the same remedies as for a default in the payment of Base Rent). If the Term commences on a day other than the first day of a month, or terminates on a day other than the last day of a month, the Base Rent for the first and last partial month shall be prorated based upon the actual number of days leased in such month.

 

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(b) Tenant shall pay to Landlord, as Additional Rent, at the same time as the monthly installment of Base Rent is paid, an amount equal to one-twelfth (1/12th) of Landlord’s estimate (as determined by Landlord using its best business judgment) of Tenant’s Share of any projected increase in Operating Expenses for the particular calendar year in excess of the Operating Expense Base (the “Estimated Escalation Increase”). If, for any reason, Landlord has not provided Tenant with Estimated Escalation Increase Statement (“Estimated Escalation Increase Statement”) on or before the first day of any year during the Term, then, (i) until the first day of the calendar month following the month in which Tenant is given the Estimated Escalation Increase Statement, Tenant shall continue to pay to Landlord on the first day of each calendar month the sum, if any, payable by Tenant under this Paragraph for the month of December of the preceding year. Within nine (9) months after January 1 of each year during the Term, or as soon thereafter as is practicable, Landlord shall furnish Tenant with a statement of the actual Operating Expenses for the preceding year and the actual amount of Tenant’s Share of any increase in Operating Expenses in excess of the Operating Expense Base (“Revised Escalation Statement”). Thereafter, Landlord shall be entitled, if circumstances warrant, to issue revised, corrected or supplemental statements at any time and from time to time following the issuance of the initial Estimated Escalation Increase Statement. Within thirty (30) days after Landlord’s delivery of such Revised Escalation Statement, Tenant shall make a lump sum payment to Landlord in the amount, if any, by which Tenant’s Share of the increase in the Operating Expenses for the preceding calendar year in excess of the Operating Expense Base, as shown on such Revised Escalation Statement, exceeds the aggregate of the monthly installments of Tenant’s payments of the Estimated Escalation Increase paid during such preceding year. If Tenant’s Share of the actual increase in Operating Expenses, as shown on such Revised Escalation Statement, is less than the aggregate of the monthly installments of the Estimated Escalation Increase actually paid by Tenant during such preceding year, then Landlord shall apply such amount to the next accruing installments of Additional Rent due from Tenant under this Paragraph 3 until fully credited to Tenant. Landlord’s rendering or failure to render any Revised Escalation Statement with respect to any calendar year shall not prejudice Landlord’s right thereafter to render a Revised Escalation Statement. Any Revised Escalation Statement shall be conclusively binding upon Tenant unless Tenant shall send written notice to Landlord objecting to and specifying, to the extent reasonably practicable, the respects in which the Revised Escalation Statement is disputed within thirty (30) days after such Revised Escalation Statement is sent. Pending the resolution of any dispute concerning a Revised Escalation Statement, Tenant shall pay to Landlord the amounts shown on the Revised Escalation Statement when due.

 

(c) For the purposes of this Lease, the term “Operating Expenses” shall mean all expenses and disbursements of every kind (subject to the limitations set forth below) which Landlord incurs, pays or becomes obligated to pay in connection with the ownership, operation and maintenance of the Building and the Park, determined in accordance with generally accepted accounting principles consistently applied, including but not limited to the following: (i) wages and salaries of all employees engaged in the operation, repair, replacement, maintenance and security of the Building, including taxes, insurance, bonuses, pension and benefits relating thereto; (ii) Social Security, unemployment and other payroll taxes, the cost of providing disability and worker’s compensation coverage imposed by any requirement, union contract or otherwise of such employees; (iii) all supplies and materials whether purchased or rented, used in the operation, maintenance, repair, replacement and security of the Building; (iv) all expenditures, whether by purchase or lease, made for the Building or Park for the intended purpose of (A) making the Building or Park more energy efficient, (B) reducing Operating Expenses, (C) enhancing the health, safety or welfare of the tenants (D) improving telecommunications, or (E) complying with all applicable laws, rules ordinances and codes as may be promulgated by any governmental

 

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authority, the total cost of which is not generally includable in Operating Expenses for the operating year in which they were made shall nevertheless be included in such Operating Expenses for the operating year in which they were made and in Operating Expenses for each succeeding operating year, and such annual expense shall be determined by dividing the original capital expenditure, plus an interest factor computed at the Applicable Rate (as defined below) in effect at the time of Landlord’s having made the expenditure, by the number of years of useful life of the expenditure (the useful life being determined by Landlord in accordance with generally accepted accounting principles and practices in effect at the time of such expenditure); (v) all gas, oil, steam, electricity, water, sewer rental, HVAC and other utilities, other than the cost of utilities directly reimbursed to Landlord (i.e., through submeters or comparable devices) by the Building’s tenants; (vi) all insurance costs (including deductibles) applicable to the Park and Landlord’s personal property used in connection therewith, including but not limited to casualty, liability, workers’ compensation and rent insurance; (vii) all taxes and assessments and governmental charges whether federal, state, county or municipal, and whether they be by taxing or management districts or authorities presently taxing or by others, subsequently created or otherwise, and any other taxes and assessments attributable to the Building, equipment and facilities, Land and Common Areas of the Park (or their operation), excluding, however, federal and state taxes on income (collectively, “Taxes”), and all expenses, including fees and disbursements incurred by Landlord in contesting the validity or amount of Taxes or in obtaining a refund of Taxes shall be considered as part of the Taxes for the calendar year (and if the present method of taxation changes so that in lieu of the whole or any part of any Taxes levied on the Park or Building, there is levied on Landlord a capital tax directly on the rents received or a franchise tax, assessment, or charge based, in whole or in part, upon such rents for the Building, then all such taxes, assessments or charges or the part thereof so based, shall be deemed to be included within the term “Taxes” for the purposes hereof); (viii) the cost of security, repairs, replacements and general maintenance (including service or maintenance contracts with independent contractors) of the interior and exterior of the Building and the Park (including, but not limited to, the roof, the foundation and the exterior walls, light bulbs and glass breakage, redecorating, repainting, recarpeting and other such work of any Common Areas, heating, ventilation and air conditioning, plumbing and electrical equipment and maintenance, trash and rubbish removal, security services, concierge service, janitorial service, grounds maintenance, alarm services, window cleaning, promotional and seasonal expenses, telephones and stationery, parking areas and landscaping), whether performed by Landlord or pursuant to service or maintenance contracts with independent contractors; (ix) rent and escalations payable under any ground lease pertaining to the Land; (x) depreciation of hand tools and other movable equipment; (xi) management fees in keeping with those at comparable office buildings in the Peachtree Corners submarket of Atlanta.; (xii) sales, use and other similar taxes; (xii) legal, accounting and other professional fees and expenses; and (xiv) anything which could be classified as an Operating Expense under generally accepted accounting principles, consistently applied, but not specified or expressly set forth hereunder. The “Applicable Rate” shall mean the lesser of (a) three percentage points over the then current “Base Rate” announced by Citibank, N.A., or its successor (or such other term as may be used by Citibank, N.A. or its successor from time to time for the rate presently referred to as its “Base Rate”), and (b) the maximum rate permitted by law. If occupancy during the Operating Expense Base set forth in Subparagraph 1(m) or any subsequent Operating Expense year (“Subsequent Term”) is less than ninety-five percent (95%), then Operating Expenses for that Base or Subsequent Term shall be “grossed up’ to the amount of Operating Expenses that, using reasonable projections, would normally be expected to be incurred during the Base or Subsequent Year, as determined under generally accepted accounting principles.

 

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(d) There shall be specifically excluded from the definition of the term Operating Expenses the following expenses: (1) repairs or replacements incurred by reason of fire or other casualty or condemnation to the extent Landlord is compensated by the proceeds of insurance or by Tenant or other third parties; (2) capital improvements made to the Building, other than improvements described in Subparagraph 3(c)(iv) above and except for items which, though capital for accounting purposes, are properly considered maintenance and repair items, such as painting of Common Areas, replacement of carpet in lobbies, parking lot paving, light poles and fixtures, and the like; (3) costs incurred in performing work or furnishing services or utilities for any tenant, whether at such tenant’s or Landlord’s expense, to the extent that such work or service is in excess of any work or service or utilities that Landlord is obligated to furnish to Tenant at Landlord’s expense; (4) refinancing costs, mortgage interest and amortization payments; (5) leasing commissions, rental concessions and lease buy-outs; (6) any expense for which Landlord is entitled to be reimbursed by any tenant as an additional charge in excess of Base Rent and Additional Rent; (7) amortization and depreciation, except as otherwise specifically provided in Subparagraph 3(c)(iv) above and in this Subparagraph; (8) overhead and profit increments paid to affiliates of Landlord for services to the extent that such costs exceed the costs of such services were they not rendered by an affiliate; (9) professional fees not allocated to the operation or management of the Land or Building and professional fees allocable to disputes with, or preparation of leases for, tenants and prospective tenants; (10) advertising and promotional expenses with respect to the Property; and (11) Landlord’s income, franchise, estate or inheritance taxes.

 

(e) Only Landlord shall be eligible to institute any proceedings to reduce Taxes. If a refund of Taxes is actually received by Landlord or credited to Landlord, Landlord shall send Tenant a Revised Escalation Statement adjusting the Taxes for such calendar year, taking into account Landlord’s expenses and setting forth Tenant’s Share of such refund, and Tenant shall be entitled to receive such amount by way of a credit against the Additional Rent; provided, however, that Tenant’s Share of such refund shall be limited to the amount of Tenant’s Share of the tax payment previously paid to Landlord and attributable to the tax year to which the refund applies.

 

(f) Simultaneously with the execution of this Lease, Tenant shall pay to Landlord the first installment of the Base Rent. Such sum shall be applied by Landlord to the first installment of Base Rent. In the event Tenant fails to take possession of the Premises in accordance with all of the terms hereof, the first installment of the Base Rent shall be retained by Landlord for application in reduction, but not in satisfaction, of damages suffered by Landlord as a result of such breach by Tenant.

 

(g) In the event Tenant shall fail to pay by the fifth (5 ^th ) day of the month when due any Rent or any other charges, fees, costs or expenses which Tenant is obligated or liable to pay to, refund to or reimburse Landlord, Tenant shall be obligated to pay interest at the rate of one and one-half percent (1½%) per month (or any portion of a month) during which such Rent or other obligation remains outstanding together with a late charge, which shall constitute liquidated damages, equal to five percent (5%) of the then outstanding Rent or other obligation. Such interest and late charges shall be deemed Additional Rent and shall become immediately due and payable along with the Base Rent and Additional Rent.

 

(h) Within one hundred eighty (180) days (the “Audit Election Period”) after Landlord furnishes Tenant a statement of Operating Expenses for the prior calendar year, Tenant may, at its expense during Landlord’s normal business hours, elect to audit Landlord’s Operating Costs, Taxes and Insurance for such calendar year only,

 

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subject to the following conditions: (1) there is no uncured Event of Default under this Lease; (2) the audit shall be prepared by an independent certified public accounting firm of recognized national or regional standing, or otherwise approved by Landlord; (3) in no event shall any audit be performed by a firm retained on a “contingency fee” basis; (4) the audit shall commence within thirty (30) days after Landlord makes Landlord’s books and records available to Tenant’s auditor and shall conclude within sixty (60) days after commencement; (5) the audit shall be conducted where Landlord maintains its books and records and shall not unreasonably interfere with the conduct of Landlord’s business; and (6) Tenant and its accounting firm shall treat any audit in a confidential manner and shall each execute Landlord’s confidentiality agreement for Landlord’s benefit prior to commencing the audit. Tenant shall deliver a copy of such audit to Landlord within five (5) business days of receipt by Tenant. This paragraph shall not be construed to limit, suspend, or abate Tenant’s obligation to pay Rent when due, including estimated Operating Costs, Taxes and Insurance. After verification, Landlord shall credit any overpayment determined by the audit report against the next Rent due and owing by Tenant or, if no further Rent is due, refund such overpayment directly to Tenant within thirty (30) days of determination. Likewise, Tenant shall pay Landlord any underpayment determined by the audit report within thirty (30) days of determination. The foregoing obligations shall survive the expiration or early termination of the Lease. If Tenant does not give written notice of its election to audit during the Audit Election Period, Landlord’s Operating Costs, Taxes and Insurance for the applicable calendar year shall be deemed approved for all purposes, and Tenant shall have no further right to review or contest the same. If any audit discloses an overpayment by Tenant of ten percent (10%) or more, then Landlord shall reimburse Tenant for the actual cost of conducting the audit.

 

The obligations contained in this Paragraph 3 shall survive the Expiration Date or earlier termination of this Lease.

 

4. USE.

 

(a) Tenant shall occupy, operate and use the Premises only for the Permitted Uses during Business Hours (as hereinafter defined) of the Building. Tenant shall comply with all governmental laws, ordinances and regulations (including, but not limited to, the Americans with Disabilities Act of 1990), now or hereinafter enacted (“Laws”) applicable to the Premises, Tenant’s occupancy, use or manner of use of the Premises and shall promptly comply with all governmental orders and directives at Tenant’s sole expense. Tenant shall not permit any objectionable or unpleasant odors, smoke, dust, gas, noise or vibrations to emanate from the Premises or take any other action which would constitute a nuisance or would disturb or endanger any other tenants of the Building or unreasonably interfere with their use of their respective premises or the Common Areas. Tenant shall not receive, store or otherwise handle any product, material or merchandise which is explosive or highly flammable.

 

(b) Tenant shall not use, handle, store, discharge or fabricate any Hazardous Substances (as hereinafter defined) in the Premises. The term “Hazardous Substances,” as used in this Lease shall mean pollutants, contaminants, toxic or hazardous wastes or pollutants or contaminants, or any other substances, the removal of which is required or the use of which is restricted, prohibited or penalized by any “Environmental Law,” which term shall mean any federal, state or local law, ordinance, statute, rule, regulation or directive promulgated by any governmental authority relating to pollution or protection of the environment. Tenant hereby agrees that: (i) no activity will be conducted on the Premises that will produce any Hazardous Substance; (ii) the Premises will not be used in any manner for the storage of any Hazardous Substances except for the temporary storage of such materials as are customarily used in general business offices in

 

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office buildings of this type (the “Permitted Materials”) provided such Permitted Materials are properly stored in a manner and location meeting all Environmental Laws and approved in advance in writing by Landlord; (iii) Tenant will not permit any Hazardous Substances to be brought onto the Premises, except for the Permitted Materials, and if so brought or found located thereon, the same shall be immediately removed, with proper disposal, and all required cleanup procedures shall be diligently undertaken pursuant to all Environmental Laws. Furthermore, Tenant shall not use any part of the Premises or the Park without the written consent of Landlord and lender, for any dry cleaning activities involving chlorinated solvents or use chlorinated solvents in the operation of its business, except for products typically used in offices or restaurants, in which case, all of the removal, disposal and indemnification provisions of this Lease shall apply. If, at any time during or after the Term, the Premises are found to be so contaminated or subject to said conditions, Tenant agrees to indemnify and hold Landlord, its trustees, partners, affiliates, shareholders, officers, directors, employees, agents, contractors and the Manager (“Indemnitees”), harmless from all claims, demands, actions, liabilities, costs, expenses, damages and obligations of any nature arising from or as a result of the presence or the use of Hazardous Substances in the Premises by Tenant.

 

(c) Tenant will not permit the Premises to be used for any purpose or in any manner (including without limitation any method of storage) which would render the insurance thereon void or the insurance risk more hazardous or cause the Insurance Commissioner or other insurance authority to disallow any sprinkler credits. If any increase in the fire and extended coverage insurance premiums paid by Landlord or other tenants for the Building is caused by Tenant’s use and occupancy of the Premises, or if Tenant vacates the Premises and causes an increase in such premiums, then Tenant shall pay the amount of such increase to Landlord as Additional Rent.

 

(d) If Tenant shall receive notice of any violation of, or defaults under, any Laws or Environmental Laws, liens or other encumbrances applicable to the Premises, Tenant shall give prompt notice thereof to Landlord.

 

(e) Tenant agrees that the floor load resulting from Tenant’s furniture, inventory and equipment pertaining to Tenant’s use of the Premises shall not exceed allowable design floor loading for the Building. Tenant shall hold harmless Landlord from any loss, liability and expenses, both real and alleged, arising out of or caused by Tenant’s negligence or failure to comply with this Subparagraph (e) .

 

(f) The Premises shall not be used for any purpose that would, in Landlord’s reasonable judgment, tend to lower the character of the Building, create unreasonable or excessive elevator or floor loads, violate the certificate of occupancy of the Building, impair or interfere with any of the Building operations or the proper and economic heating, air-conditioning, cleaning or any other services of the Building or impair the appearance of the Building.

 

(g) The provisions of Paragraph 4 shall survive the termination or earlier expiration of this Lease.

 

5. LANDLORD’S SERVICES.

 

(a) Landlord shall furnish seasonal air conditioning and heating from 7:00 A.M. to 6:00 P.M. on Mondays through Fridays and from 9:00 A.M. until 1:00 P.M. on Saturdays (“Business Hours”) except holidays observed by the City of Atlanta, State of Georgia, the federal government or labor unions servicing the Building (“Business Days”). As of the date of this Lease, New Year’s Day, Martin Luther King Day, Memorial Day, Independence Day, Labor Day, Thanksgiving, the

 

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Friday after Thanksgiving and Christmas Day are holidays observed by the Building (“Holidays”). The Holidays are subject to change from time to time by Landlord. Should Tenant desire either heating or air conditioning at other times, Landlord agrees to provide same upon reasonable advance written request by Tenant, but at Tenant’s expense and at such hourly rates as may be determined from time to time by Landlord, which charge Tenant shall pay promptly upon demand by Landlord. Tenant agrees to keep and cause to be kept closed all window coverings, if any, when necessary because of the sun’s position, and Tenant also agrees at all times to cooperate fully with Landlord and to abide by all the regulations and requirements which Landlord may prescribe for the proper functioning and protection of the heating, ventilating, and air conditioning system and to comply with all laws, ordinances and regulations respecting the conservation of energy. Landlord will not be responsible for failure of the HVAC System to provide sufficient cooling if such failure results from occupancy of the Premises by more than one (1) person per two hundred (200) square feet of usable area or if Tenant shall use in excess of five (5) watts of electricity per usable square foot for lighting and power. If the occupancy rate is greater than as described in the previous sentence or if Tenant’s partitions are arranged in a way which interferes with the normal operation of the HVAC System, Landlord may elect to make changes to the HVAC System or the ducts, and the cost shall be reimbursed by Tenant to Landlord as Additional Rent within ten (10) days after demand. Tenant shall not construct partitions or other obstructions that may interfere with Landlord’s free access to mechanical installations in the Premises or interfere with the moving of Landlord’s equipment to and from such installations. Neither Tenant nor its agents, employees or contractors shall at any time enter such enclosures or tamper with, adjust, touch or otherwise affect the mechanical installations. If Tenant installs equipment which in Landlord’s opinion produces enough heat to cause comfort problems in the Building or any part thereof, or if Tenant desires a supplemental air conditioning system and Landlord has approved same, then Landlord may, at its option, either cause to be designed or permit Tenant to design a supplemental air conditioning system, subject to Landlord’s approval, and Landlord shall install such system substantially in accordance with such design. If Tenant has requested such supplemental system, Tenant shall be responsible for determining that the design of such system is adequate for its needs. Tenant agrees to pay Landlord for such equipment, design, review by Landlord’s architect and engineer, installation, metering and consumption of electricity for supplemental air conditioning. Any such system shall be maintained, at Tenant’s sole cost and expense, by a contractor approved by Landlord. Landlord shall be named as an additional beneficiary under any warranty on the supplemental air conditioning system. Landlord shall provide after hours HVAC upon request at Landlord’s then current charge.

 

(b) Landlord shall cause the Premises (excluding any secured areas designated by Tenant or used for the storage, preparation, service or consumption of food or beverage) to be cleaned five (5) days per week, excluding Holidays, provided that Tenant shall keep the Premises in order. Tenant shall not provide any janitorial services from independent contractors without Landlord’s prior written consent and then subject only to supervision by Landlord and by a janitorial contractor or employees at all times satisfactory to Landlord. Any such services provided by Tenant shall be at Tenant’s sole risk, cost and responsibility. Tenant shall pay the cost of removing any of Tenant’s refuse and rubbish from the Premises and the Building to the extent that the same, in any one day, exceeds the average daily amount of refuse and rubbish accumulated in the use of such Premises as offices, as described in Landlord’s cleaning contract or recommended by Landlord’s cleaning contractor. Bills rendered by Landlord shall be paid as Additional Rent within ten (10) days after demand. Tenant shall cause all portions of the Premises used for the storage, preparation, service or consumption of food or beverages to be cleaned daily in a manner reasonably satisfactory to Landlord and to be treated whenever there is evidence of any

 

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infestation. Landlord shall have no obligation to clean, repair, replace or maintain any “private” plumbing fixtures or facilities.

 

(c) Landlord shall furnish electric current for Building standard tenant lighting and for standard office business machinery only from electric circuits designated by Landlord for Tenant’s use. Such circuits shall be fed into one or more of the existing electrical panel(s) in the electrical closets located on the same Building floor as the Premises. Tenant’s usage of the panels on any given floor shall not exceed Tenant’s pro rata share (based on rentable square footage) of the panels’ capacity. Tenant agrees that at no time will the connected electrical load in the Premises exceed in the aggregate five (5) watts per usable square foot of the Premises. Tenant will not use any electrical equipment which, in Landlord’s reasonable opinion, will overload the wiring installations or interfere with the reasonable use thereof by other users in the Building. Tenant will not, without Landlord’s prior written consent in each instance, connect any items such as non-Building standard tenant lighting, vending equipment, printing or duplicating machines, or auxiliary air conditioners to the Building’s electrical system or make any alteration or addition to the system.

 

(d) Landlord shall maintain the Common Areas including, but not limited to the corridors, the windows in the Building, the mechanical, plumbing and electrical equipment serving the Building and the structure itself, in good order and condition, except for damage occasioned by the act of Tenant, its agents, servants, employees, guests of invitees, which damage shall be repaired by Landlord at Tenant’s expense.

 

(e) Landlord shall furnish hot and cold water for ordinary drinking, cleaning and lavatory purposes. If Tenant requires, uses or consumes water for other purposes, Tenant agrees to install and pay for the cost and maintenance of a meter or other means to measure Tenant’s water consumption. Tenant shall reimburse Landlord for the cost of all water excess consumed (including costs of generating hot water) as Additional Rent, within ten (10) days after demand.

 

(f) Landlord shall not be in default hereunder or be liable for any damages directly or indirectly resulting from, nor shall the Rent herein reserved be abated by reason of: (i) the installation, use or interruption of use of any equipment in connection with the furnishing of any of the foregoing utilities and services; (ii) failure to furnish or delay in furnishing any such utilities or services when such failure or delay is caused by Acts of God or the elements, labor disturbances of any character, any other accidents or other conditions beyond the reasonable control of Landlord, or by the making of repairs or improvements to the Premises or to the Building; or (iii) the limitation, curtailment, rationing or restriction on use of water or electricity, gas or any other form of energy or any other service or utility whatsoever serving the Premises or the Building. No diminution or abatement of Rent or other compensation will be claimed by Tenant as a result therefrom, and no obligations of Tenant shall be affected or reduced by reason of such interruption, curtailment or suspension, and the same shall not constitute an actual or constructive eviction.

 

(g) Landlord shall provide elevator service to the Premises during Business Days, and subject to Subparagraph (f) above, on call at all other times.

 

(h) Any sums payable under this Paragraph 5 shall be considered Additional Rent and may be added to any installment of Rent thereafter becoming due and shall accrue late charges as Rent as set forth in Paragraph 16 of this Lease, and Landlord shall have the same remedies for a default in payment of such sums as for a default in the payment of Rent.

 

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(i) Subject to the provisions of this Lease, Tenant shall have access to the Premises 24 hours per day, 7 days per week, 365 days per year. Notwithstanding anything to the contrary, it is not the intention of Landlord or Tenant for Tenant to occupy the Premises for a 24-hours per day business operation.

 

6. REPAIRS.

 

(a) Tenant shall, at its own cost and expense, keep in good repair all portions of the Premises, including but not limited to glass and plate glass doors, any special store front, interior walls and finish work, floors and floor coverings, and supplemental or special heating and air conditioning systems, and shall take good care of the Premises and its fixtures and permit no waste, except for normal wear and tear. Except as otherwise provided in this Paragraph 6 , Tenant shall not be obligated to repair any Building Systems (as defined in Subparagraph 7(a)) . Notwithstanding any provision to the contrary, all damage or injury to the Building, or to its fixtures and appurtenances (including Building Systems), resulting from any act or omission of, or Alterations made by Tenant or persons within Tenant’s control shall be repaired by Tenant at Tenant’s sole cost and expense to the reasonable satisfaction of Landlord if the required repairs are non-structural in nature and do not affect any Building Systems or by Landlord at Tenant’s sole cost and expense if the required repairs are structural in nature or affect any Building Systems. If Tenant shall fail, after ten (10) days notice (or such shorter period as may be required because of an emergency) to proceed with due diligence to make required repairs, the same may be made by Landlord, and the expenses incurred with interest at the Applicable Rate (as defined below), shall be paid as Additional Rent within ten (10) days after demand. Except as otherwise provided in this Subparagraph 6(a) , Landlord shall not be required to make any repairs or improvements to the Premises, other than structural, mechanical or electrical repairs necessary for safety and tenantability, and such repairs shall be made during Business Hours. “Applicable Rate” shall mean the lesser of (i) three percentage points over the then current “Base Rate” announced by Citibank, N.A. or its successor (or such other term as may be used by Citibank, N.A. for the rate presently referred to as its “Base Rate”), and (ii) the maximum rate permitted by law.

 

(b) Landlord shall operate, maintain and make all necessary repairs to the Building Systems and the public portions of the Building in conformance with standards applicable to non-institutional, office buildings in Atlanta, except for those repairs for which Tenant is responsible pursuant to this Lease. Landlord shall use reasonable efforts to minimize interference with Tenant’s use and occupancy of the Premises in making any repairs, alterations, additions or improvements; provided, however, that Landlord shall perform such work during Business Hours. Except as expressly provided in this Lease, there shall be no allowance to Tenant for a diminution of rental value and no liability on the part of Landlord for inconvenience, annoyance or injury to business arising from Landlord, Tenant or others making, or failing to make, any repairs, alterations, additions or improvements in or to any portion of the Building or the Premises, or its fixtures, appurtenances or equipment.

 

7. ALTERATIONS .

 

(a) Tenant shall not make or permit to be made, any alterations, additions or improvements (“Alterations”) to the Premises, the Building or the Building’s systems (including but not limited to the roof, floor and wall penetrations, the HVAC system, the electrical system and the plumbing (“Building Systems”)) without the prior written consent of Landlord, which Landlord may grant in its sole reasonable discretion. In the event Landlord consents to the making of any Alterations, by Tenant, the same shall be made at Tenant’s sole cost and

 

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expense, in accordance with all applicable laws, ordinances and regulations, and all requirements of Landlord’s and Tenant’s insurance policies and only in accordance with plans and specifications approved by Landlord (except that any such requested Alterations to the Building or Building Systems shall be done by Landlord, and Tenant shall reimburse Landlord for the entire cost thereof). Any contractor or person selected by Tenant to make the same and all subcontractors must first be approved in writing by Landlord, or, the Alterations, shall be made by Landlord for Tenant’s account and Tenant shall fully reimburse Landlord for the entire cost thereof within twenty (20) days after written notification of Tenant by Landlord providing Tenant with an invoice or other request (or statement). Promptly after completion of any Alterations that are structural or affect the mechanical, electrical or plumbing systems to the Premises made by Tenant, Tenant shall supply Landlord with a set of scaled and dimensioned, reproducible mylars of “as-built” plans for such Alterations certified by Tenant’s architect or space planner. Notwithstanding the foregoing, with respect to any Alterations affecting any Building Systems, Tenant shall employ Landlord’s designated contractor, and such Alterations shall be designed by the Landlord’s engineer at Tenant’s reasonable expense. For the avoidance of doubt, the term “Alterations” does not include any Tenant Improvements as defined in Section 1(q).

 

(b) All Alterations erected by Tenant shall be the property of Tenant during the Term and the property of Landlord as of the Expiration Date or earlier termination of this Lease. Landlord reserves the right to require Tenant to remove Tenant’s Alterations erected and restore the Premises to their condition as of the Commencement Date, reasonable wear and tear excepted, on or before the Expiration Date or any sooner date of termination of this Lease; provided, however, that if Landlord so elects prior to termination or expiration of this Lease, such Alterations shall become the property of Landlord as of the Expiration Date or any sooner date of termination of this Lease and shall be delivered to the Landlord with the Premises. The provisions of this Paragraph 7 shall survive the Expiration Date or earlier termination of this Lease.

 

(c) Tenant shall pay Manager a supervisory fee equal to four (4%) percent of the cost of Alterations over $10,000.00 but less than $100,000.00 and three (3%) percent of the cost of Alterations over $100,000.00, which fee shall be paid within thirty (30) days after demand by Landlord.

 

8. RULES AND REGULATIONS. Tenant, its employees and agents shall comply with the Rules and Regulations attached to this Lease as Exhibit F and made a part hereof, and any amendments or additions as may be made from time to time by Landlord. Landlord shall not be responsible for the nonperformance by any other tenant or occupant of the Building of any of the Rules and Regulations. In case of any conflict or inconsistency between the provisions of this Lease and of any of the Rules and Regulations as originally or as hereinafter adopted, the provisions of this Lease shall control.

 

9. ACCESS BY LANDLORD.

 

(a) Landlord or its agents may enter the Premises at reasonable hours to exhibit same to prospective purchasers, mortgagees or, within 12 months of the Expiration Date to prospective tenants, to inspect the Premises to see that Tenant is complying with all of its obligations hereunder, to supply janitorial and other services, and to make repairs, maintenance, improvements, alterations or additions which Landlord shall deem necessary for the safety, preservation or improvement of the Building or to make repairs or modifications to any adjoining space. Landlord shall be allowed to take all material into and upon the Premises that may be required to make such repairs, improvements, alterations or additions for the benefit of Tenant without in any way being deemed or held guilty of an eviction of Tenant, and the Base Rent and other charges hereunder shall not abate

 

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while such repairs, maintenance, improvements, alterations or additions are being made. All such repairs, maintenance, improvements, alterations and additions shall be done during regular business hours, or, if any such work is at the request of Tenant to be done during any other hours, Tenant shall pay for all overtime costs. Notwithstanding anything to the contrary, Landlord shall have the right to enter the Premises at any time and without notice in the event of emergency without the same constituting an eviction, nuisance or disturbance. Landlord shall use reasonable efforts not to materially interfere with Tenant’s business operations while Landlord is performing any such repairs, maintenance, etc.

 

(b) Landlord shall at all times retain a key with which to unlock all the doors in the Premises, excluding Tenant’s vaults, safes or special security areas (designated in advance by Tenant in writing and made known to Landlord), and Landlord shall have the right to use any and all means which Landlord may deem necessary or proper to open said doors in an emergency, in order to obtain entry to any portion of the Premises, and any entry to the Premises, or portions thereof obtained by Landlord by any of said means, or otherwise, shall not under any circumstances be construed or deemed to be a forcible or unlawful entry into the Premises, or an eviction, actual or constructive, of Tenant from the Premises or any portions thereof. Landlord shall also have the right at any time, without the same constituting an actual or constructive eviction and without incurring any liability to Tenant therefor, to erect, use and maintain scaffolding, conduits and other necessary structures in the Premises. Landlord shall use commercially reasonable efforts not to interfere with Tenant’s business operations while Landlord is in the Premises.

 

10. ASSIGNMENT AND SUBLETTING.

 

(a) Except as specifically provided herein, Tenant shall not voluntarily or involuntarily, whether by operation of law or otherwise, assign, transfer, mortgage, hypothecate or otherwise encumber this Lease or any interest herein and shall not sublet or permit the use by others of the Premises or any portion thereof without obtaining Landlord’s prior written consent, which consent Landlord shall not unreasonably withhold, deny or delay based on the factors set forth in Subparagraph 10(e) below. Landlord’s consent to one assignment, sublease, transfer or hypothecation shall not be deemed as a consent to any other or further assignment, sublease, transfer or hypothecation. Any assignment, sublease, transfer or hypothecation without Landlord’s prior written consent shall be void and shall, at Landlord’s option, constitute a default under this Lease. No acceptance by Landlord of any rent or any other sum of money from any assignee, sublessee or other category of transferee shall release Tenant from any of its obligations hereunder or be deemed to constitute Landlord’s consent to any assignment, sublease, transfer or hypothecation. Fifty percent (50%) of all cash or other proceeds that exceed the Rent in the case of a subletting or fifty percent (50%) of all cash or other proceeds of any other transfer of Tenant’s interest that exceed the Rent in this Lease shall be paid to Landlord, after deduction for reasonable expenses.

 

(b) Should Tenant desire to assign this Lease or sublet the Premises or any part thereof, Tenant shall give Landlord prior written notice, which notice (“Sublease or Assignment Statement”) shall specify (i) the name and business of the proposed assignee or sublessee, (ii) the amount and location of the space affected, (iii) the proposed effective date and duration of the subletting or assignment (which shall not be less than thirty (30) or more than ninety (90) days after the date of Tenant’s Sublease or Assignment Statement), and (iv) the proposed rent or other consideration to be paid to Tenant by such sublessee or assignee. Landlord shall then have a period of fifteen (15) Business Days following receipt of such notice within which to notify Tenant in writing that

 

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Landlord elects either (1) to terminate this Lease as to the space so affected as of the date so specified by Tenant, in which event Tenant will on that date be relieved of all further obligations to pay Rent hereunder as to such space, or (2) to permit Tenant to assign or sublet such space, or (3) to withhold consent to Tenant’s assigning or subleasing such space and to continue this Lease in full force and effect as to the entire Premises and provide Tenant the grounds for such withholding of consent. If Landlord should fail to notify Tenant in writing of such election within said fifteen (15) Business Day period, Landlord shall be deemed to have withheld its consent. Any person to whom this Lease is assigned with Landlord’s consent shall be deemed without more to have assumed all of the obligations arising under this Lease from and after the date of such assignment and shall execute and deliver to Landlord, upon demand, an instrument confirming such assumption. If Tenant shall not enter into a sublease or assignment pursuant to the notice set forth in this Subparagraph 10(b) within one hundred eighty (180) days after the delivery of the said notice, then the provisions of this Subparagraph 10(b) shall again be applicable.

 

(c) Tenant agrees to reimburse Landlord for Landlord’s reasonable attorneys’ fees and costs incurred in connection with the processing and documentation of any request made pursuant to this Paragraph 10, not to exceed $1,000 for any single transfer. Tenant shall deliver to Landlord, within five (5) days after execution by Tenant, an original counterpart of any executed sublease or instrument of assignment, together with Tenant’s and the subtenant’s (or assignee’s) affidavit that such sublease or assignment instrument is the true and complete statement of the subletting or assignment and reflects all sums and other consideration passing between the parties. Tenant shall pay, indemnify and hold Landlord harmless from and against, any and all cost or expense (including reasonable attorneys’ fees and disbursements) and liability in connection with any compensation, commissions or charges claimed by any broker or agent with respect to any assignment or subletting.

 

(d) No assignment, subletting or other transfer, whether or not consented to by Landlord, shall relieve Tenant of its liability under this Lease. Upon the occurrence of a default under this Lease, if the Premises or any part thereof are then assigned or sublet, Landlord, in addition to any other remedies herein provided or provided by law, may at its option collect directly from such assignee or subtenant all Rent becoming due to Tenant under such assignment or sublease and apply such Rent against any sums due to Landlord from Tenant hereunder, and such collection shall not be construed to constitute a novation or release of Tenant from the further performance of Tenant’s obligations hereunder.

 

(e) In the granting of Landlord’s consent, Landlord shall take into consideration any meaningful factors, including, but not limited to: (i) the relative financial strength of the proposed subtenant or assignee as compared to the Tenant; (ii) the bad business reputation and bad character of the proposed subtenant or assignee, if any; (iii) the type of business of the proposed subtenant or assignee; (iv) any increased burden on services (parking, electricity, etc.) and the Common Areas that would be imposed by the proposed subtenant or assignee; (v) (v) whether the proposed subtenant or assignee is an existing tenant or is currently in negotiations with Landlord for space within the Building unless landlord is unable to accommodate said proposed subtenant elsewhere in the Building; (vi) the amount of square footage in the Premises to be sublet or assigned; (vii) the number of subtenants or assignees already in the Premises; (viii) whether the proposed subtenant or assignee shall place any additional responsibilities on the Landlord in connection with the Americans With Disabilities Act; (ix) whether the Tenant has an existing default under its Lease; (x) whether the Landlord has comparable space available in the Building or expects to have comparable space within the next three months;(xi) intentionally omitted.

 

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(f) For purposes of this Paragraph 10 , (i) the transfer of a majority of the issued and outstanding capital stock of any corporate tenant or subtenant, or the transfer of a majority of the total interest in any partnership tenant or subtenant, or the transfer of control in any general or limited liability partnership tenant or subtenant, or the transfer of a majority of the issued and outstanding membership interests in a limited liability company tenant or subtenant, however accomplished (other than pursuant to transfers among current owners or the issuance of ownership interests to new owners made in the ordinary course of business), shall be deemed an assignment of this Lease or sublease, except that the foregoing shall be inapplicable in cases of the transfer of the outstanding capital stock of any corporate tenant through the “over-the-counter market” or through any recognized stock exchange, (ii) an agreement by any other person or entity, directly or indirectly, to assume Tenant’s obligations under this Lease shall be deemed an assignment, (iii) any person or legal representative of Tenant to whom Tenant’s interest under this Lease passes by operation of law or otherwise shall be bound by the provisions of this Paragraph 10 , and (iv) a modification, amendment or extension of a sublease shall be deemed a sublease. Tenant agrees to furnish to Landlord on request at any time such information and assurances as Landlord may reasonably request that neither Tenant nor any previously permitted subtenant has violated the provisions of this Paragraph 10 . The provisions of Subparagraph 10(a) shall not apply to transactions with a corporation or limited liability company into or with which Tenant is merged or consolidated or with a Person to which substantially all of Tenant’s assets are transferred (provided such merger or transfer of assets is for a good business purpose and not principally for the purpose of transferring this leasehold estate and that the assignee has a net worth at least equal to the net worth of Tenant as of the date of this Lease or, if Tenant is a general, limited or limited liability partnership, with a successor partnership, or to transactions with an entity that controls or is controlled by Tenant or is under common control with Tenant. Tenant shall notify Landlord before any such transaction is consummated and, in the case of an assignment, shall send Landlord an original written instrument in which the assignee assumes all of Tenant’s liabilities under this Lease. The term “control” as used in this Lease shall mean (i) ownership of more than 50% of the outstanding capital stock in the case of a corporation, (ii) more than 50% of the general partnership or membership interest of the partnership in the case of a general or limited liability partnership, (iii) more than 50% of the general partnership interests of limited partnership in the case of a limited partnership, and (iv) more than 50% of the membership interests of a limited liability company.

 

(g) If Tenant sublets any portion of the Premises pursuant to Subparagraph 10(b) , Tenant shall pay to Landlord, as Additional Rent (the “ Sublease Additional Rent ”), a sum equal to fifty percent (50%) of any rents, additional charges and other consideration payable under the sublease to Tenant in excess of the Base Rent and Additional Rent accruing during the term of the sublease in respect of the subleased space pursuant to this Lease (including, but not limited to, sums paid for the sale or rental of Tenant’s property and Alterations less the then net unamortized or undepreciated cost thereof determined on the basis of Tenant’s federal income tax or federal information returns), after deduction for actual expenses. Such Sublease Additional Rent shall be payable as and when received by Tenant. If Tenant shall assign this Lease pursuant to Subparagraph 10(b) , and Landlord’s consent is required, Tenant shall pay to Landlord, as Additional Rent, an amount equal to all sums and other consideration paid to Tenant by the assignee for or by reason of such assignment (including, but not limited to, sums paid for the sale or rental of Tenant’s property and Alterations less the then net unamortized or undepreciated cost thereof determined on the basis of Generally Accepted Accounting Principals. Such Additional Rent shall be payable as and when received by Tenant.

 

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(h) Any sublease shall provide that, if the Lease shall expire or terminate during the term of the sublease for any reason other than condemnation or destruction by fire or other cause, or if Tenant shall surrender the Lease to Landlord during the term of the sublease, Landlord, in its sole discretion, upon written notice given to Tenant and subtenant, may elect to continue the sublease as a direct lease between Landlord and subtenant. In that event, subtenant shall attorn to Landlord, and Landlord and subtenant shall enter into a new lease on the Landlord’s then current form of lease.

 

11. CONDEMNATION .

 

(a) If any part of the Premises shall be taken or appropriated by any public or quasi-public authority under the power of eminent domain, Landlord shall have the right, at its option, to terminate this Lease effective as of the date possession is taken by said authority (unless all of the Premises are so taken in which case this Lease shall terminate), and shall be entitled to any and all income, rent or award and any interest thereon whatsoever which may be paid or made in connection with such public or quasi-public use or purpose. Tenant hereby assigns to Landlord its entire interest in any and all such awards, and shall have no claim against Landlord for the value of any portion of the unexpired Term. If a part of the Premises shall be so taken or appr