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Exhibit
10.36
U NION H
EIGHTS O FFICE B
UILDING
Sandy, Utah
L EASE A
GREEMENT
Landlord:
RADDON UNION HEIGHTS,
LLC
T ENANT
:
UCN, INC.
U NION H
EIGHTS O FFICE B
UILDING
L EASE S
UMMARY
| 1. |
Landlord: Raddon Union Heights, LLC. |
| 3. |
Leased Premises: All of the fourth and fifth floors of the
Building. |
| 4. |
Square Footage of Leased Premises: Approximately 49,716 RSF and
46,248 useable square feet. |
| 5. |
Square Footage of Building: Approximately 140,907
RSF. |
| 6. |
Nonexclusive Parking Spaces: In compliance with Legal
Requirements; provided that Tenant will have the non-exclusive use
of 6.0 parking spaces per 1,000 usable square feet in Leased
Premises. |
| 7. |
Term of Lease: 66 consecutive months following the Commencement
Date. |
| 8. |
Commencement Date: December 1, 2007 (subject to
Section 3.1). |
| 9. |
Monthly Rent: $23.00 per RSF of Leased Premises (approximately
$95,289.00 per month, subject to adjustment when
completed.). |
| 10. |
Free Rent Period: Monthly Rent is abated for the first six
(6) months following the Commencement Date as to all of the
Leased Premises, and Monthly Rent is abated thereafter for three
(3) additional months but only as to 11,000 rentable square
feet of the Leased Premises (i.e., Tenant shall pay Monthly Rent as
to the balance of the Leased Premises). Additional Rent shall not
be abated during the Free Rent Period. |
| 11. |
Rent Escalations: Three percent (3.00%) per
year. |
| 12. |
Tenant’s Proportionate Share: Approximately 35.283% of
Operating Expenses. |
| 14. |
Tenant Improvement Allowance: $30.00 per Usable Square Foot of
Leased Premises or approximately $1,387,440.00. |
| 15. |
Option to Extend: One (1) five (5) year extension
(See Section 3.2). |
1
| 16. |
Security Deposit: None. |
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|
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L ANDLORD
:
Raddon Union Heights,
LLC
c/o Raddon Brothers Construction,
Inc.
1111 E Draper Parkway, Suite
101
Draper, UT 84020
Phone: 801-576-9451 or 801-576-1553 Fax:
801-576-9452
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|
T ENANT
:
UCN, Inc. 14870 Pony Express
Road
Bluffdale, Utah 84065
Phone: 801-320-3200
Fax: 801-320-3531
|
|
|
| with a copy
to: |
|
with a copy
to: |
|
|
|
Parr Waddoups Brown Gee &
Loveless
185 S State Street, Suite
1300
Salt Lake City, UT
84111-1537
Attn : David E . Gee,
Esq .
|
|
Parsons Behle &
Latimer
201 S Main Street, Suite
1800
Salt Lake City, UT
84111
Attn: Jason S. Nichols,
Esq.
|
2
U NION H
EIGHTS O FFICE B
UILDING
L EASE A
GREEMENT
This Lease Agreement (“
Lease ”) is entered into as of June
,
2007, by and between Raddon Union Heights, LLC, a Utah limited
liability company (“ Landlord ”), and UCN, Inc.,
a Utah corporation (“ Tenant ”) (each, a “
Party ”, collectively, the “ Parties
”).
The Lease Summary above is
intended only as a convenient summary of certain terms of this
Lease. In the event of a conflict between the Lease Summary and
this Lease, this Lease shall govern.
Landlord and Tenant agree as
follows:
1. Definitions. As used in this Lease,
the terms set forth below shall have the following
meanings:
1.1 Additional Rent :
Defined in Section 4.2.
1.2 Affiliates :
Agents, contractors, employees, invitees, licensees, and/or
assignees, as the context requires.
1.3 Appraisal : An
unbiased analysis and opinion by an Appraiser as to the Fair Market
Rental Value.
1.4 Appraisal Demand
Notice : A written notice demanding an Appraisal delivered by a
Party pursuant to the terms of Section 3.2.
1.5 Appraiser : A
“state certified general appraiser” (as that term is
defined in Utah Code Annotated Section 61-2b-2(15)) who has at
least ten (10) years of experience in appraising commercial
office building projects in Salt Lake County, Utah.
1.6 Base Year : 2008
(provided that such consists of a full operating and assessed
year).
1.7 Building : Defined
in Section 2.1(a).
1.8 Commencement Date
: The Commencement Date shall be the last to occur of
December 1, 2007 or the Delivery Date. The “ Delivery
Date ” is ninety (90) days after both of the
following are satisfied: (i) the final Plans (as defined on
Exhibit “B”) are completed and approved by all
governmental authorities; and (ii) bids are approved by UCN.
Landlord shall provide Tenant access to the Leased Premises prior
to the Commencement Date to perform wiring and other work at such
time as Landlord completes the Building in accordance with
Exhibit B to a point where it can allow Tenant to safely begin
Tenant’s Work; provided, Tenant acknowledges that Landlord
and Landlord’s contractor shall be completing
Landlord’s Work (as defined on Exhibit “B”), and
Tenant’s entry for such purpose shall be subject to the
reasonable supervision of Landlord and Landlord’s contractor.
If the Delivery Date occurs on or before October 1, 2007 but
Tenant is not permitted to occupy the Leased Premises on or before
December 31, 2007, and, as a result, Tenant must continue to
occupy its existing premises on a “hold-over” basis,
then Tenant shall be provided a credit against Rent in the amount
of $9,985.20 for month or partial month beyond December 31,
2007 that Tenant is not permitted to occupy the Leased Premises,
but only if and to the extent Tenant actually pays such amount to
its existing landlord. Tenant’s entry prior to the
Commencement Date for the limited purposes described above shall be
free of charge; provided, Tenant shall indemnify, hold harmless and
defend Landlord against any damage or caused by Tenant or its
agents and contractors. If the Commencement Date does not occur on
or before 180 days after the Delivery Date then, except if delayed
for reasons of force majeure , Tenant shall have the right
to terminate this Lease.
1.9 Common Areas :
(a) all hallways, corridors, foyers, restrooms, porches,
entryways, doorways, walkways, driveways, landscaped areas and
other elements of the Property which are for the joint use of the
tenants of the Building and their respective customers, employees,
and invitees, including those Parking Areas
3
located on the Property, notwithstanding
that a portion of such elements are included in the calculation of
the Rentable Square Feet contained within the Leased Premises
(hereafter referred to as the “ Property Common Areas
”); and (b) the Parking Areas (except to the extent
located on the Property), walkways, driveways, and landscaped areas
located in the Project (but excluding any such areas located on the
Property), (hereafter referred to as the “ Project Common
Areas ”), and the benefits and burdens of any easement,
and parking and other rights provided by any declaration of
covenants, conditions, and restrictions affecting the Property and
the Project, including the Declaration of Covenants, Restrictions
and Easements dated February 28, 2005 (the “
Easements Declaration ”). The Property Common Areas
and the Project Common Areas are collectively referred to as the
“ Common Areas ”.
1.10 Condemnation
Proceeding : Any action or proceeding in which an interest in
the Leased Premises is taken for any public or quasi-public purpose
by any lawful authority through exercise of the power of eminent
domain or right of condemnation or by transfer under threat of
condemnation.
1.11 Condominium
Declaration : Declaration of Condominium for Raddon Union
Heights Condominiums recorded March 1, 2005 as Entry
No. 9311073 in Book 9100 at Page 1384 of the Official Records
of the Salt Lake County Recorder as amended by Supplement
Concerning Convertible Land to Declaration of Condominium for
Raddon Union Heights Condominiums dated January 5,
2007.
1.12 Fair Market Rental
Value : The fair market value of the Leased Premises,
determined in comparison to Class A buildings in the Union
Heights and Cottonwood market area.
1.13 Free Rent Period
: Monthly Rent is abated for the first six (6) months
following the Commencement Date as to all of the Leased Premises,
and Monthly Rent is abated thereafter for three (3) additional
months but only as to 11,000 rentable square feet of the Leased
Premises (i.e., Tenant shall pay Monthly Rent as to the balance of
the Leased Premises). Additional Rent shall not be abated during
the Free Rent Period.
1.14 Hazardous
Materials : Any hazardous or toxic substance, material, or
waste which now is or at any time hereafter becomes regulated or
restricted by any governmental authority having jurisdiction over
the Property. “ Hazardous Materials ” includes,
without limitation, any petroleum products or byproducts, asbestos
(in any form), chemicals, gases, or any other material or substance
which upon exposure or ingestion may reasonably be anticipated to
pose a hazard to the health or safety of the anticipated occupants
of, or visitors to, the Property.
1.15 Initial Term :
The Term, but specifically excluding the Extension Term.
1.16 Landlord’s
Broker : Greg Gunn and Brandon D. Fugal of Coldwell Banker
Commercial NRT.
1.17 Lease Summary .
The Lease Summary (at the beginning of this Lease) serves as a
convenient location for and summary of certain provisions of this
Lease. The Lease Summary is part of this Lease, but must be
interpreted in light of the provisions in the body of the
Lease.
1.18 Legal Requirement
. Any federal, state, or local law, statute, ordinance, code, rule,
regulation, order, or decree applicable to a specified
matter.
1.19 Monthly Rent :
Gross monthly rent in the amount set forth in Section 9 of the
Lease Summary. Monthly Rent is subject to a 3% annual increase for
each Year of the Term, beginning in 2008.
1.20 Mortgagee : The
holder of any mortgage, the beneficiary under any deed of trust, or
the holder of any other similar security interest which encumbers
the Property or any part thereof.
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1.21 Notice Addresses
: The addresses listed for Landlord and Tenant on the Lease
summary, as modified from time to time by either Party in a writing
delivered to the other Party.
1.22 Operating
Expenses :
(a) All costs, expenses, and
amounts which are incurred by Landlord during the period in
question or which are allocable to such period in connection with
Landlord’s ownership, operation, management, or maintenance
of the Property and Common Areas, including, without limitation:
(1) premiums and deductibles for insurance carried with
respect to the Property and Common Areas; (2) costs of
supplies, materials, equipment, and utilities used in or related to
the operation, maintenance, and repair of the Property and Common
Areas; (3) labor costs, including without limitation,
salaries, wages, payroll and other taxes, unemployment insurance
costs, and employee benefits; (4) maintenance, management,
janitorial, inspection, legal, accounting, and service agreement
costs related to the operation, maintenance, and repair of the
Property and Common Areas, including, without limitation, service
contracts with independent contractors; (5) costs associated
with maintaining office space for a Building manager and security
personnel, including overhead and accounting expenses;
(6) property taxes associated with ownership of the Property
and Common Areas; and (7) costs of capital improvements,
maintenance, or repairs made to the Property and Common Areas after
the Commencement Date, including, without limitation, costs of:
(A) reducing Operating Expenses, (B) improving the
operating efficiency of the Building or Common Areas,
(C) extending the life of the Building or Common Areas, and
(D) bringing the Building or Common Areas into compliance with
changing Legal Requirements; provided, such costs shall be either,
in Landlord’s sole and reasonable discretion,
(i) amortized over the useful economic life of the
improvements (without regard to the period over which such
improvements may be depreciated for federal income tax purposes),
or (ii) recovered in each year to the extent that, in
Landlord’s reasonable determination, the improvements reduced
Operating Expenses for the applicable year.
(b) “ Operating
Expenses ” does not include: (1) leasing
commissions; (2) repair costs paid by insurance proceeds or by
any tenant or third party; (3) the initial construction cost
of the Building and the Common Areas and any depreciation thereof;
(4) debt service or costs related to the sale or financing of
the Property; (5) the cost of tenant improvements provided for
any tenant; (6) the cost of services provided to tenants for
which a separate charge is made, including, without limitation, the
cost of any service provided by Landlord to specific tenants that
is not uniformly available to or performed for substantially all
Building tenants (such cost to be allocated equitably among, and
billed directly to, the tenants benefiting from the service);
(7) costs arising from the gross negligence or willful
misconduct of Landlord; (8) capital expenditures (except as
provided subsection (a) above or elsewhere in this Lease);
(9) costs of repair, restoration or other work occasioned by
initial defective construction; (10) costs, fines and
penalties due to Landlord’s intentional or grossly negligent
violation of Legal Requirements; (11) costs and expenses
associated with hazardous materials, waste or toxic substances; or
(12) collection costs due to Landlord’s or any other
tenant’s violation of terms and conditions of any
lease.
1.24 Parking
Areas : The areas within the Property or the Project designated
by Landlord as suitable for parking by Tenant, other Building
tenants, and their Affiliates including, without limitation, the
Parking Unit.
1.25 Parking Unit:
means the Parking Unit as defined in the Condominium Declaration.
The Parking Unit is adjacent to the Property.
1.26 Permitted
Assignee : (a) A person or entity that controls Tenant, is
controlled by Tenant, or is under common control with Tenant
(“ control ” meaning ownership of greater
than fifty percent (50%) of the equity interest in the
controlled entity); and/or (b) a person or entity that
acquires substantially all of the assets or stock of
Tenant.
1.27 Project. The
larger mixed-use development of which the Property is a part, as
described in and governed by the Condominium
Declaration.
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1.28 Rent : Monthly
Rent and Additional Rent collectively.
1.28 Rentable Square Feet
(RSF) : Rentable square feet as measured according to ANSI/BOMA
Standard Z65.1-1996 (or any successor standard).
1.26 Rules and
Regulations : The Rules and Regulations set forth on
Exhibit C hereto, as amended from time to time by
Landlord.
1.27 Tenant
Alterations . Defined in Section 9.1.
1.28 Tenant’s
Broker : Brandon D. Fugal of Coldwell Banker Commercial
NRT.
1.29 Tenant Improvement
Allowance : Defined in Section 5.2.
1.30 Tenant’s
Proportionate Share : The percentage determined by dividing the
Rentable Square Feet of the Leased Premises (see Lease Summary
Section 4) by the aggregate amount of Rentable Square Feet in
the Building (see Lease Summary Section 5).
1.31 Term : The
Initial Term set forth in Section 7 of the Lease Summary. If
Tenant exercises its Option to Extend, “Term” shall
include the Extension Term, unless otherwise specified or otherwise
required by the context.
1.32 Useable Square Feet
(USF) : Usable square feet as measured according to ANSI/BOMA
Standard Z65.1-1996 (or any successor standard).
1.33 Year : A calendar
year during the Term other than the Base Year.
2. Leased Premises.
2.1 Description of Leased
Premises . Landlord does hereby demise, lease, and let unto
Tenant, and Tenant does hereby take and receive from Landlord the
following:
(a) That certain floor area
containing approximately the number of rentable square feet set
forth in Section 4 of the Lease Summary (“ Leased
Premises ”) on the fourth and fifth floors of the Union
Heights Office Building (“ Building ”), located
at approximately 7730 South Union Park Avenue, Midvale Utah 84047,
on certain real property located in Salt Lake County, Utah, which
is referenced in the Condominium Declaration as Convertible Land A
or Unit 6, a legal description of which is attached hereto as
Exhibit A (“ Property ”). For all
purposes of this Lease, the calculation of Rentable Square Feet
contained within the Leased Premises and the Building shall be
subject to final measurement and verification by Landlord’s
architect prior to the Commencement Date, and in the event of any
variation, Landlord and Tenant shall amend this Lease accordingly.
Tenant shall have the right to independently verify the calculation
of rentable square feet contained within the Leased Premises and
the Building; provided, any objection to the measurement of
Landlord’s architect shall be made in writing within ten
(10) business days after Tenant is provided with such
measurement and the burden shall be on Tenant to prove the
measurement by Landlord’s architect to be clearly
incorrect.
(b) In connection with
renting and leasing the Leased Premises, Tenant shall have the
non-exclusive right to use the Common Areas. Subject to rules and
regulations promulgated by Landlord or its successors (“
Rules and Regulations ”), Tenant and its employees and
patrons shall have the non-exclusive right to use the number of
exclusive parking spaces (located in the Parking Areas) set forth
on the Lease Summary. Landlord agrees that the Rules and
Regulations shall be reasonable, uniformly applied to all tenants
and not
6
deprive Tenant of any
material benefit provided under the Lease. The exact location of
Tenant’s parking spaces within the Parking Areas shall be
specified by Landlord.
2.2 Limitation . The
Leased Premises do not include, and Landlord reserves, the exterior
walls and roof of the Leased Premises, the land and other area
beneath the floor of the Leased Premises, the pipes, ducts,
conduits, wires, fixtures and equipment above the suspended ceiling
of the Leased Premises, and the structural elements that serve the
Leased Premises or comprise the Building. Landlord’s
reservation includes the right with reasonable notice in the
circumstance to install, inspect, maintain, use, repair, alter, and
replace the foregoing areas and items and to enter the Leased
Premises at any and all times in order to do so. If the rights of
Landlord exercised pursuant to this Section materially and
adversely interfere for a period of more than six
(6) consecutive business days with the conduct of
Tenant’s business in the Leased Premises and such
interference is reasonably avoidable by Landlord, then the Monthly
Rent payable under this Lease shall abate, from such sixth
(6 th ) day until such material adverse interference terminates,
in proportion to the extent of such interference, as the same may
vary from time to time.
2.3 Right of First
Offer . During the Term, Tenant shall have a right of first
offer to lease all space on the third and sixth floors of the
Building (“ Right of First Offer Space ”) as and
when the same becomes available for lease. If such space becomes
available during the Term, Landlord shall notify Tenant of the
availability and the proposed Monthly Rent therefore, and Tenant
shall have seven (7) business days from the receipt of such
notification to elect to lease such Right of First Offer Space on
the same terms and conditions set forth herein except Monthly Rent
which shall be the Fair Market Rental Value (but as determined for
the Right of First Offer Space). The tenant improvement allowance
applicable to the Right of First Offer Space shall be determined by
prorating the Tenant Improvement Allowance over the remainder of
the Initial Term. The term for all Right of First Offer Space shall
be coterminous with the Term of this Lease. Notwithstanding the
foregoing:
(a) This Right of First Offer
is subject to prior rights granted to tenants with respect to
leases covering the sixth floor (Coldwell Banker) and the third
floor (Ameriprise Financial Services, Inc.).
(b) In addition, this Right
of First Offer shall not initially apply to any space on the third
floor as to which Landlord has executed a lease or letter of intent
prior to December 1, 2007. On or before December 1, 2007,
Landlord shall provide Tenant with a written notice of any space on
the third floor as to which a lease or letter of intent has been
executed which shall identify the space being taken and the
proposed tenant. If the proposed tenant under the lease or letter
of intent does not take occupancy, the space will become subject to
Tenant’s right of first offer set forth in this Section.
Likewise, upon the expiration or earlier termination of the initial
lease with said proposed tenant, absent said tenant’s renewal
or extension of its lease for said space, said space will become
subject to Tenant’s right of first offer granted
herein.
(c) The maximum parking
spaces that shall be available for the third and sixth floors shall
be four spaces per 1,000 usable square feet.
3. Term.
3.1 Commencement Date and
Obligation to Pay Rent . The Term of this Lease and, subject to
Section 4.3, Tenant’s obligation to pay Monthly Rent
hereunder shall begin on the Commencement Date and shall continue
for the period set forth in Section 7 of the Lease
Summary.
3.2 Option to Extend
.
(a) Tenant shall have one
option to extend the Lease (“Option to Extend”) for a
period of five (5) years (“Extension Term”).
Tenant must notify Landlord at least one hundred twenty
(120) days before the expiration of the Initial Term of its
intent to exercise its Option to Extend. The Extension Term shall
begin immediately after the expiration of the Initial Term. The
Extension Term shall be subject to all the terms of
7
this Lease (other than the
length of the term), except that Monthly Rent shall be set at Fair
Market Rental Value, determined as of the commencement of the
Extension Term.
(b) If Tenant exercises its
Option to Extend, Landlord and Tenant shall negotiate in good faith
to reach agreement on the Fair Market Rental Value of the Leased
Premises for the Extension Term. If Landlord and Tenant do not
agree on the Fair Market Rental Value by one hundred eighty
(180) days before the commencement of the Extension Term, then
either Landlord or Tenant may deliver the Appraisal Demand Notice,
in which event the Fair Market Rental Value shall be determined
pursuant to Section 3.2(c).
(c) Within five
(5) business days after delivery of an Appraisal Demand
Notice, Landlord and Tenant shall designate one (1) Appraiser
by written notice to the other party. Each appointed Appraiser
shall then, within five (5) business days, select a third
Appraiser who shall determine the Fair Market Rental Value. Each
Party shall pay the fees and costs of its selected Appraiser and
one-half (2) of the fees and costs of the third
Appraiser.
3.3 Tenant’s
Certificate . Tenant shall, from time to time, within twenty
(20) days after receipt of Landlord’s written request,
execute and deliver to Landlord a written certificate in recordable
form: (a) ratifying this Lease; (a) setting forth the
Commencement Date and termination date hereof; (b) certifying
that this Lease is in full force and effect and has not been
assigned, modified, supplemented, or amended (except by such
writings as shall be stated); (c) stating that, to the best of
Tenant’s knowledge, all conditions under this Lease to be
performed by Landlord have been satisfied (or stating which
conditions remain unsatisfied); (d) stating that, to the best
of Tenant’s knowledge, there are no defenses or offsets
against the enforcement of this Lease by Landlord (or stating those
claimed by Tenant); (e) verifying the amount of advance
rental, if any, paid by Tenant; (f) stating the date through
which rental has been paid; and (g) setting forth such other
information as Landlord may reasonably request. Landlord,
Landlord’s mortgage lenders, and any purchasers of all or a
portion of the Building shall be entitled to rely upon such
certificate.
3.4 Landlord’s
Certificate . Within twenty (20) days after the request by
Tenant, Landlord agrees to deliver to Tenant and to any potential
mortgagee, assignee or purchaser of Tenant’s interest in the
Leased Premises an estoppel certificate, in form and substance
reasonably satisfactory to both parties, certifying that this Lease
is unmodified and in full force and effect (or, if there have been
modifications, whether same is in full force and effect as
modified, and stating the modifications); that, to Landlord’s
actual knowledge and belief, there are no defenses or offsets
thereto (or stating those claimed by Landlord); that there are no
defaults by Landlord or, to the actual knowledge and belief of
Landlord, on the part of Tenant (or, if such defaults exist,
stating their nature). No estoppel certificate provided pursuant to
this provision shall amend or modify this Lease.
4. Rent.
4.1 Monthly Rent .
Tenant agrees to pay to Landlord at Landlord’s Notice
Address, without prior demand therefor and without any deduction or
offset whatsoever, the Monthly Rent set forth in Section 9 of
the Lease Summary. Monthly Rent is due in advance on the first day
of each calendar month during the Term of this Lease. Monthly Rent
for any partial month shall be prorated on a per diem basis.
Monthly Rent, as previously adjusted, shall automatically be
increased by three percent (3%) each Year, beginning in
2008.
4.2 Additional Rent
.
(a) Yearly Statement .
After the end of each calendar year of the Term following the Base
Year, including the last year of the Term (“ Year
”), Landlord shall provide to Tenant a statement (“
Yearly Statement ”) detailing the Operating Expenses
for the Year and billing Tenant for Tenant’s Proportionate
Share of the Operating Expenses which are in excess of Base Year
Operating Expenses (“ Excess Operating Expenses
”). Within thirty (30) days after its receipt of the
Yearly Statement, including the Yearly Statement delivered after
the end of the Term for the last Year of the Term, Tenant shall pay
Tenant’s Proportionate Share of the Excess Operating Expenses
(“ Additional Rent ”).
8
(b) Gross-Up .
Notwithstanding Section 4.2(a), if the Building is less than
95% occupied during any Year, Operating Expenses shall be
calculated as if the Building were 95% occupied during such
Year.
(c) Partial Year .
Landlord shall prorate Tenant’s Proportionate Share of Excess
Operating Expenses for any partial Year during the Term based on
the number of days in such partial Year occurring during the
Term.
(d) Monthly Payment of
Additional Rent . Notwithstanding Section 4.2(a), Landlord
may at any time require Tenant to pay Additional Rent on a monthly
basis (in addition to Monthly Rent), based on Landlord’s
reasonable estimate of the Operating Expenses for the applicable
Year or portion thereof. Such monthly payments shall prorated based
on the number of months covered by the period of Landlord’s
estimate. After the end of each Year during which Tenant has paid
to Landlord such estimated monthly payments of Additional Rent,
Landlord shall indicate in the Yearly Statement the difference
between Tenant’s actual Proportionate Share of Excess
Operating Expenses for that Year (or portion thereof) and the
aggregate amount of monthly estimated Additional Rent payments made
by Tenant for that Year (or portion thereof). Tenant shall pay any
shortage to Landlord within ten (10) days after Tenant’s
receipt of such Yearly Statement. Correspondingly, Tenant shall
receive a credit in the amount of any overpayment, which credit may
be applied toward Rent.
(e) Statements Final .
Each of the final Yearly Statements and other statements and
determinations provided for above shall become binding on Tenant
(and no longer subject to challenge by Tenant) fifteen
(15) months after the date the statement in question is
delivered to Tenant, unless Tenant appeals such statement or
determination to Landlord in writing within such fifteen
(15) month period. Within fifteen (15) months of the
issuance of any statement under this Lease, Tenant or its
authorized representatives may, at any reasonable time, upon seven
(7) days prior written notice to Landlord, have the right to
audit the Landlord’s business records relating to any
statement issued by Landlord for the period covered by the
statement. In the event the audit discloses an overpayment of more
than ten percent (10%), which payment was made in accordance with
an over-billing, Landlord shall reimburse Tenant for the cost of
the audit. In addition, the amount of overpayment disclosed by the
audit shall be paid to Tenant by Landlord regardless of amount. In
the event the audit discloses an underpayment by Tenant, Tenant
shall promptly reimburse Landlord for the amount of such
underpayment.
4.3 Free Rent Period .
Notwithstanding Sections 4.1 and 4.2, Rent shall be abated during
the Free Rent Period.
5. Landlord’s Work.
5.1 Obligations of the
Parties . Landlord shall construct the Building shell (“
Landlord’s Work ”), and Tenant shall build out
the Leased Premises (“ Tenant’s Work ”) in
accordance with Exhibit B.
5.2 Tenant Improvement
Allowance . Landlord shall provide Tenant with a Tenant
Improvement Allowance in the amount listed in Section 14 of
the Lease Summary, to be used for Tenant’s Work. Any costs
and expenses associated with Tenant’s Work which are in
excess of the amount of the Tenant Improvement Allowance shall be
borne by Tenant. Any unused portion of the Tenant Improvement
Allowance shall, at Landlord’s option, be applied toward Rent
or refunded to Tenant.
5.3 Avoidance of Labor
Disputes . During Tenant’s construction of Tenant’s
Work, Tenant agrees to conduct its labor relations so as to
minimize the chances of strikes, picketing, and boycotts which
could delay completion of Tenant’s Work or affect any other
construction then occurring in the Building or on the Property.
Tenant shall ensure that any pickets or boycotts resulting from
such labor disputes are sufficiently contained within the Leased
Premises so as to avoid a secondary boycott or picket line which
could affect other construction then occurring in the Building or
on the Property. Tenant also agrees to include within
any
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construction contract it may execute,
language requiring the general contractor to, in the event of a
labor dispute: (a) find alternative labor to complete
Tenant’s Work on schedule; or (b) terminate the
construction contract and cease its activities as general
contractor for Tenant’s Work. This Section shall also apply
to Tenant’s construction of any Tenant
Alterations.
5.4 Changes to
Building . Landlord reserves the right to at any time:
(a) make changes, alterations, or additions to the Building;
(b) lease additional commercial space in the Building; and
(c) change or withdraw areas from the Common Areas; provided
such changes, alterations, additions, leases, or withdrawals do not
materially interfere with Tenant’s business operations or
Tenant’s right to quiet enjoyment of the Leased Premises or
materially diminish Tenant’s parking rights hereunder. Except
as provided below, Tenant shall have no claim for damages or right
to terminate this Lease for injury or inconvenience occasioned
thereby. If the rights of Landlord exercised pursuant to this
Section materially and adversely interfere for a period of more
than six (6) business days with the conduct of Tenant’s
business in the Leased Premises and such interference is reasonably
avoidable by Landlord, then the Monthly Rent payable under this
Lease shall abate after said sixth (6 th ) consecutive business day in
proportion to the extent of the interference (as the same may vary
from time to time) until the interference ceases.
6. Use.
6.1 Single-Purpose Use
. Tenant shall use the Leased Premises solely for the purpose of
conducting the software development and call services business,
including incidental office and storage use. Tenant shall not use
or permit the Leased Premises to be used for any other purpose,
including, without limitation, for the purpose of delivering or
receiving financial deposits, except with the prior written consent
of Landlord, which consent shall not be unreasonably withheld,
conditioned or delayed if the use is permitted by Applicable Law
and does not violate the provisions of any other Lease affecting
the Property or the surrounding multi-use project.
6.2 Orderly Operation
. Tenant further agrees to abide by the following provisions, which
are designed to insure the attractiveness and orderly operation of
the Building and the Property:
(a) Tenant shall keep the
Leased Premises free of objectionable noise, odors, or
nuisances.
(b) Tenant shall not overload
the floors or permit or allow any waste, abuse, deterioration, or
destructive use of the Leased Premises.
(c) Tenant shall not cause or
permit any Hazardous Materials to be brought upon, kept, or used in
or about the Leased Premises.
(d) The loading and unloading
of merchandise, supplies, and fixtures shall be done only at such
times as do not unreasonably interfere with other tenants and
customers of the Building and the Property, and only in the areas
and through the entrances designated for such purposes.
(e) Tenant shall store all
trash and garbage within the Leased Premises or within areas
specifically designated by Landlord for such purpose.
(f) Plumbing facilities
within the Building shall not be used for any purpose other than
that for which they are constructed, and no foreign substance of
any kind shall be thrown therein. The cost of repairing any
breakage, stoppage, or damage to plumbing facilities within the
Common Areas resulting from a violation of this provision by Tenant
or Tenant’s Affiliates shall be borne by Tenant.
(g) Without the prior consent
of Landlord, no portion of the Leased Premises or the Property
shall be used to distribute handbills, circulars, or other
political, charitable, or similar material, or to seek members for
any organization, or to solicit contributions, or to carry on a
parade or demonstration or other conduct which may tend to
interfere with or impede the use of the Property by Landlord, other
Building tenants, permanent occupants of the Building, or their
respective Affiliates.
(h) The Leased Premises shall
not be used for lodging purposes.
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7. Signs, Awnings, Roof.
Landlord shall, at
Landlord’s expense, provide Tenant with Building-standard
lobby directory, suite entrance, and the basic monument signage
(but not Tenant’s separate sign on the monument sign, the
cost of which shall be paid by Tenant). The cost of all other
signage shall be at Tenant’s expense. Tenant may, at
Tenant’s sole cost and expense (including, without
limitation, payment of all fees and charges of governments having
jurisdiction), install “crown” exterior building
signage of a size and in a location set forth on Exhibit
“D” which signage shall comply with the Building
standards applicable to all tenants and all Legal Requirements.
Tenant shall not, without Landlord’s prior written consent:
(a) make any changes to the exterior of the Leased Premises or
the Common Areas; (b) install any exterior decorations or
paintings; (c) install any drapes, blinds, shades, or other
coverings on exterior windows and doors; or (d) except as set
forth above, erect or install any sign, window, or door lettering,
placards, decorations, or advertising media of any type which can
be viewed from the exterior of the Leased Premises. In no event
shall Tenant erect or install “banner”- or “help
wanted”-type signs, or other temporary signs which can be
seen from the exterior of the Leased Premises. All signs,
lettering, or other items approved by Landlord and installed by
Tenant shall be kept in good repair and in proper operating
condition at all times and shall be removed upon the termination of
the Lease. Any damage caused by such items or their removal shall
be promptly repaired at Tenant’s expense. All items installed
in violation of this Section may be promptly removed by Landlord at
Tenant’s expense. Use of the roof is reserved to Landlord,
and Landlord may install upon the roof such equipment, signs, and
antennae as Landlord deems appropriate.
8. Maintenance, Services, and
Utilities.
8.1 Maintenance by
Tenant . By taking possession of the Leased Premises, Tenant
shall be deemed to have accepted the Leased Premises as being in
good order, condition, and repair except for any punchlist items
identified at that time to be corrected by Landlord within thirty
(30) days. Tenant shall, at Tenant’s expense:
(a) maintain the Leased Premises in a clean and sanitary
condition (but Landlord shall furnish the janitorial services
described in Section 8.3 below); and (b) maintain the
Leased Premises in as good condition and repair as they were in at
the Commencement Date, reasonable wear and tear and damage from
fire and other casualty excepted. Unless covered by insurance
maintained by Landlord, Tenant shall in a good and workmanlike
manner repair or replace any damage to the Property occasioned by
the willful or negligent acts of Tenant or its
Affiliates.
8.2 Maintenance by
Landlord .
(a) Subject to any right of
reimbursement or recovery hereunder, Landlord shall maintain the
Building, the Common Areas, and the structural components of the
Leased Premises, including the roof, load-bearing walls,
foundations, and floor slabs, and systems such as plumbing and
water, electrical, and HVAC (but not floor and wall coverings);
provided, if Landlord is required to make structural repairs by
reason of the negligent acts or omissions of Tenant or
Tenant’s Affiliates (and such is not covered by insurance
maintained by Landlord), Tenant shall pay Landlord’s costs
for making such repairs plus twenty percent (20%) for overhead
immediately upon presentation of a bill therefor. Failure of Tenant
to pay such amount immediately shall constitute a default by Tenant
hereunder. Landlord shall be responsible for latent defects in the
original construction of the Leased Premises.
(b) Landlord shall perform
its maintenance and repair obligations in a reasonable and
efficient manner and in way that reasonably minimizes interference
with Tenant’s business operations. Landlord shall initiate
and complete repairs of an emergency nature (including, without
limitation, roof leaks and failure of the HVAC) as soon as
reasonably possible after receipt of Tenant’s notice thereof,
and in any event shall commence such repair no later than two
(2) business days after receipt of Tenant’s written
notice thereof unless prevented from doing so for reasons beyond
Landlord’s control. Tenant shall endeavor to give Landlord
written notice of the need for such repair(s), but may do so
initially by telephone followed up by written notice in the event
of an emergency.
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8.3 Janitorial Services
and Utilities . Landlord shall provide to the Leased Premises
janitorial services no less often than five (5) days per week
(emptying of wastebaskets, dusting, cleaning of glass, cleaning of
bathrooms, and vacuuming). Landlord shall furnish electricity for
normal lighting and fractional horsepower office machines and for
heating and air conditioning required (in Landlord’s
reasonable judgment) for the comfortable use and occupancy of the
Leased Premises. Landlord shall also maintain and keep lighted and
maintained the common stairs, common entries, and toilet rooms in
the Building. Except as may be caused by the gross negligence or
willful misconduct of Landlord, Landlord shall not be liable for,
and Tenant shall not be entitled to, any damages or reduction of
Rent by reason of Landlord’s failure to furnish any of the
foregoing when such failure is caused by accident, breakage,
repairs, strikes, labor disturbances, or labor disputes of any
character, or by any other cause beyond the reasonable control of
Landlord. Tenant shall be charged twenty dollars ($20.00) per hour
per approximate 8,000 rentable square foot area for any HVAC use
other than between the hours of 7:00 a.m. and 6:00 p.m. on
weekdays, and 8:00 a.m. and 1:00 p.m. on Saturdays, excluding
holidays (“ after-hours ”). Tenant shall pay
Landlord five dollars ($5.00) per hour per approximate 8,000
rentable square foot area for any after-hours use of electricity.
All such charges shall be adjusted from time to time to reflect the
market rate for utilities. Back-up power will be available on the
fourth and fifth floors in sufficient capacity to operate
Tenant’s business in the ordinary course subject to first
supplying the life-safety requirements of the remainder of the
Building.
8.4 Landlord’s Right
to Cure . If Tenant refuses or neglects to repair property as
required hereunder to the reasonable satisfaction of Landlord
within the time periods set forth in Section 18.1(d), Landlord
may make such repairs without liability on its part to Tenant for
any loss or damage that may occur to Tenant’s merchandise,
fixtures, or other property, or to Tenant’s business by
reason thereof, and upon completion, Tenant shall reimburse
Landlord for the cost of making such repairs, plus twenty percent
(20%) for overhead, immediately upon presentation of a bill
therefor. Failure of Tenant to pay such amount immediately shall
constitute a default by Tenant hereunder.
8.5 Maintenance Firm .
Landlord may elect to engage a maintenance firm to service the
heating, ventilating, cooling, air-handling, and control systems
serving Landlord’s tenants.
9. Tenant Alterations and
Improvements.
9.1 Additional
Improvements . Except as set forth on Exhibit B, Tenant
shall not make any alterations, additions, or improvements to the
Leased Premises, or install any exterior signs or lettering,
interior or exterior lighting, or plumbing or mechanical fixtures
(“ Tenant Alterations ”) without first obtaining
Landlord’s written approval, which approval shall not be
unreasonably withheld, conditioned or delayed. Tenant shall present
to Landlord plans and specifications for any Tenant Alterations at
the time approval is sought. Any Tenant Alterations approved by
Landlord shall be performed by Tenant at Tenant’s sole cost
and expense. All Tenant Alterations shall be performed only by
contractors or mechanics approved by Landlord, which approval shall
not be unreasonably withheld. All Tenant Alterations shall be done
in a good and workmanlike manner and diligently prosecuted to
completion so that the Leased Premises operates as a complete unit
at all times. All Tenant Alterations shall be performed in strict
compliance with applicable Legal Requirements. Tenant shall have
Tenant Alterations performed in such a manner as not to obstruct
access to any portion of the Building. All Tenant Alterations,
including, but not limited to, wall and floor coverings, paneling,
HVAC, electrical and plumbing systems, cabinet portions of any
exterior signs, and built-in cabinet work (but excepting movable
furniture, equipment, sign fascia, and individual sign lettering
and trade fixtures), shall at once become a part of the realty and
shall be surrendered with the Leased Premises. Notwithstanding the
foregoing, however, for tax purposes, Tenant shall be deemed to be
the owner (without removal rights) of such permanent alterations,
additions, or improvements until the expiration or earlier
termination of this Lease. Notwithstanding the foregoing, Tenant
shall be permitted to make Tenant Alterations (without the consent
of Landlord) that (i) are nonstructural, (ii) do not
affect the exterior appearance of the Leased Premises; and
(iii) do not exceed $10,000.00. At the request of Landlord,
Tenant shall be obligated to remove the Tenant Alterations upon
termination of the Lease and to restore the Leased Premises to its
previous state.
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10. Discharge of Liens.
If any mechanic’s lien
or other lien is filed against the Leased Premises or the Property,
or any part thereof, because of Tenant’s Work, Tenant’s
acts or omissions, or a claim against Tenant, Tenant shall, within
ten (10) days following receipt of notice of the existence of
such lien, cause the same to be canceled and discharged of record.
If Tenant desires to contest any claim or lien, Tenant shall
furnish Landlord with a bond of a responsible corporate surety
containing such terms and having a face amount sufficient to
discharge the lien, including interest and costs, or, if requested
by Landlord, having a face amount sufficient to induce a
responsible title insurance company to insure title to the
Building, the Property, or the Leased Premises without showing such
lien as an exception to title. If a final judgment establishing the
validity or existence of any contested lien is entered, Tenant
shall pay and satisfy the same at once.
11. Utilities.
Landlord shall not be liable
in the event of an interruption in the supply of any utility
services to the Leased Premises or Building from causes arising
from the gross negligence or willful acts of Landlord, its agents
or employees. Tenant agrees that it will not install any equipment
which is likely to exceed or overload the capacity of any utility
facilities, and that if any equipment installed by Tenant requires
additional utility facilities; the same shall be installed at
Tenant’s expense in accordance with plans and specifications
to be approved in writing by Landlord.
12. Common Areas; Parking.
12.1 Common Areas .
All Common Areas and other facilities in or about the Building or
the Property shall be subject to the exclusive control and
management of Landlord. Landlord shall have the right to:
(a) construct, maintain, and operate lighting and other
facilities on all Common Areas; (b) police the Common Areas;
(c) change the area, level, location, and arrangement of the
Parking Areas and other facilities; (d) temporarily close all
or any portion of the Parking Areas or other facilities to prevent
a dedication thereof or the accrual of any right therein to any
person or the public. Landlord shall operate and maintain the
Common Areas in such manner as Landlord in its discretion shall
determine, shall have full right and authority to employ and
discharge all personnel with respect thereto, and shall have the
right, through reasonable Rules and Regulations and/or restrictive
covenants promulgated by it from time to time, to regulate the use
and operation of the Common Areas.
12.2 Parking . Tenant
shall have the number of non-exclusive, non-reserved parking spaces
indicated on the Lease Summary. Within thirty (30) days of a
request by Landlord, Tenant shall furnish Landlord with the vehicle
license plate numbers of Tenant’s employees and shall
thereafter notify Landlord of any change thereto within thirty
(30) days after such change occurs. Landlord reserves the
right to set aside and make available reserved parking spaces for
the use of Building tenants and their Affiliates, and in such event
shall use commercially reasonable efforts to make reserved parking
spaces available to Tenant for a fee.
13. Assignment.
13.1 Assignment and
Subletting . Tenant shall have the right to transfer, assign,
mortgage, or hypothecate this Lease (“ Transfer
”), or sublet the Leased Premises, subject to
Landlord’s consent, which shall not be unreasonably withheld.
Reasonable justification for Landlord to withhold consent to a
Transfer includes, without limitation: (a) the proposed
Transferee has a financial net worth, managerial skills, or an
operational or business history inferior to that of Tenant;
(b) the character and reputation of the proposed Transferee is
not satisfactory to Landlord; or (c) the occupancy of the
Leased Premises by the proposed Transferee would likely violate a
provision of this Lease or any other lease or agreement then in
effect concerning the Building or the Property. As a condition of
Landlord’s consent, Landlord may require Transferee to enter
into a new lease directly with Landlord, or may require reasonable
modifications to this Lease. Any assignment from Tenant by
merger,
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consolidation, transfer of assets, or
liquidation shall constitute a Transfer. If Tenant is a
corporation, a limited liability company, an unincorporated
association, or a partnership, the Transfer of any stock or
interest in such corporation, limited liability company,
association, or partnership that exceeds an aggregate of forty-nine
percent (49%) shall be deemed a Transfer. A merger,
consolidation, reorganization, or sale of stock or other equity
interests in Tenant on a public stock exchange (e.g., NYSE or
NASDAQ), whether in connection with an initial public offering or
thereafter, shall not be deemed a Transfer.
13.2 Permitted
Assignees . Notwithstanding Section 13.1, Tenant may
Transfer its interest in this Lease or sublet the Leased Premises
to a Permitted Assignee without Landlord’s prior written
consent; provided, Tenant shall not be relieved of its obligations
under this Lease.
13.3 Prohibited Transfer
Void . Any attempted Transfer or subletting without
Landlord’s consent shall be void, shall confer no benefit on
any third party, and shall constitute a default hereunder.
Landlord’s consent to a Transfer or sublease shall not
operate as a waiver of the necessity for consent to any subsequent
Transfer or sublease, and the terms of such consent shall be
binding upon any person holding by, under, or through
Tenant.
13.4 Request for
Consent . Should Tenant desire Landlord’s consent to a
proposed Transfer or sublease, Tenant shall request such consent in
writing and provide Landlord with
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