Exhibit 10.2
LEASE AGREEMENT
BY AND BETWEEN
REC PARTNERS, L.P.
AND
THOMAS GROUP, INC.
Control Date: 01/28/00
REC III Master Lease
MDR/03199-238/BMM/LSE001.001e
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TABLE OF CONTENTS
ARTICLE I
Definitions..........................................................1
ARTICLE II
Premises.............................................................2
ARTICLE III
Term.................................................................2
ARTICLE IV
Base
Rent............................................................3
ARTICLE V
Increases in Real Estate Taxes and Operating-
Costs..................4
ARTICLE VI
Use of
Premises......................................................6
ARTICLE VII
Assignment and
Subletting............................................7
ARTICLE VIII
Maintenance and
Repairs..............................................8
ARTICLE IX
Alterations..........................................................9
ARTICLE X
Signs................................................................10
ARTICLE XI
Security
Deposit.....................................................10
ARTICLE XII
Holding
Over.........................................................10
ARTICLE XIII
Insurance............................................................11
ARTICLE XIV
Services and
Utilities...............................................12
ARTICLE XV
Liability of
Landlord................................................12
ARTICLE XVI
Rules................................................................14
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ARTICLE XVII
Damage or
Destruction................................................14
ARTICLE XVIII
Condemnation.........................................................14
ARTICLE XIX
Default..............................................................15
ARTICLE XX
Bankruptcy...........................................................17
ARTICLE XXI
Subordination........................................................18
ARTICLE XXII
Covenants of
Landlord................................................19
ARTICLE XXIII
General
Provisions...................................................19
ARTICLE XXIV
Right of First
Offer.................................................22
EXHIBIT A -- Plan Showing Premises
EXHIBIT B -- Work Agreement
EXHIBIT C -- Form of Certificate Affirming
Lease Commencement Date
EXHIBIT D -- Rules
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LEASE AGREEMENT
THIS LEASE
AGREEMENT (this "Lease") is dated as of 15th of February,
2000,
by and between REC Partners, L.P., a
Delaware limited partnership ("Landlord"),
and Thomas Group, Inc., a Delaware
corporation ("Tenant").
ARTICLE I
Definitions
1.1 Building: A
six (6) story office building containing approximately One
Hundred Thirty-Seven Thousand Nine Hundred Twenty (137,920) square feet of
rentable area, known as Reston Executive Center, Building III and located on
approximately 4.16031 acres of land at 12120 Sunset Hills Road, Reston,
Virginia.
1.2 Premises:
Approximately twelve
thousand twenty-seven
(12,027) square
feet of rentable area located on the fourth
(4th) floor of the Building commonly
known as 12120 Sunset Hills Road, Reston, Virginia and outlined on Exhibit
A,
attached hereto and incorporated herein by
reference.
1.3 Lease Term:
Eighty-four (84) months.
1.4 Anticipated
Occupancy Date: April 1, 2000.
1.5 Base Rent:
Three hundred sixty
thousand eight hundred ten and 00/100
dollars ($360,810.00) for the first Lease
Year (which amount is based on thirty
and 00/100 dollars ($30.00) per square foot
of rentable area).
1.6 Base Rent
Annual Escalation Percentage: Three percent (3%).
1.7 Operating
Charges Base Year: Calendar year 2000.
1.8 Security Deposit: Thirty thousand sixty-seven dollars and 50/100
Dollars ($30,067.50).
1.9 Broker(s);
Centennial Management Corporation and The Staubach Company.
1.10 Tenant
Address for Notices: 5221 North O=Connor Boulevard, Suite 500,
Irving, Texas 75039-3753, until Tenant has commenced beneficial use of the
Premises, and 12120 Sunset Hills Road,
Reston, Virginia 20190-3231, after Tenant
has commenced beneficial use of the
Premises.
1.11
Complex: That complex (of which the Building is a part) known as
Reston Executive Center and located on approximately 13.8 acres of land at
Sunset Hills Road, Reston, Virginia.
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ARTICLE II
Premises
2.1 Tenant
leases the Premises from Landlord upon the terms stated
herein.
Tenant will have the non-exclusive right to use the common and public
areas of
and the surface parking spaces appurtenant
to the Building.
ARTICLE III
Term
3.1 The Lease
Term shall commence art the Lease Commencement Date specified
in Section 3.2. If the Lease Commencement Date is not the first
day of a month,
then the Lease Term shall be the period set forth in Section 1.3 plus the
partial month in which the Lease
Commencement Date
occurs. The Lease Term shall
also include any renewal or extension of
the term of this Lease.
3.2 The Lease
Commencement
Date shall be the
earlier of the date
(a) the
work and materials to be provided pursuant to Exhibit B are substantially
completed, or (b) Tenant commences
beneficial use of the Premises. Tenant shall
be deemed to have commenced beneficial use
of the Premises when Tenant begins to
move furniture, furnishings, inventory, equipment or trade fixtures into
the
Premises. Promptly after the Lease
Commencement Date is
ascertained,
Landlord
and Tenant shall execute a certificate (in
the form of Exhibit C) confirming the
Lease Commencement Date.
3.3 It is
presently anticipated that the Premises will be delivered to
Tenant on or about the Anticipated
Occupancy Date. If
Landlord does not deliver
possession of the Premises by such date, then Landlord shall not have any
liability whatsoever and this Lease shall
not be rendered voidable, on account
thereof.
3.4 Lease Year shall mean a period of twelve
(12) consecutive months
commencing on the Lease Commencement Date and each
successive twelve (12) month
period thereafter; provided. however, that
if the Lease Commencement Date is not
the first day of a month, then the second
Lease Year shall commence on the first
day of the month in which the first
anniversary of the
Lease Commencement
Date
occurs.
3.5 Landlord
hereby grants to Tenant the right,
exercisable
at Tenant's
option, to renew the tent of this
Lease for one (1)
additional
five (5) year
term ("Renewal Term") pursuant the
following terms and conditions, if exercised,
and if the conditions applicable thereto have been
satisfied, the Renewal
Term
shall commence immediately following the end of the initial
Lease Tent provided
in the Lease. The right of renewal herein
granted to Tenant shall be subject to,
and shall be exercised in accordance with,
the following terms and conditions:
(a) Tenant shall
exercise its right of renewal by giving Landlord
written
notice of such
election not earlier than twelve (12) months nor
later than nine
(9) months prior to
the expiration
of the initial
Lease
Term.
The parties shall have thirty (30) days after Landlord's timely
receipt
of such notice in which to agree on the base rent, escalation
factor and
additional rent which
shall be payable during the Renewal Term.
Among the
factors to be considered by the parties during such negotiations
shall be the
general office rental market in Fairfax County, Virginia, the
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rental
rates then being
charged by landlords
to comparable tenants for
comparable
space in the
Building, and the rents being charged similar
tenants
for similar office space in multi-tenanted, multi-story,
first-class
office buildings. In no event, however, shall Landlord be under
any obligation to agree to a base rent,
escalation
factor or
additional
rent for the
Renewal Term which is less than the Base
Rent, escalation
factor or
additional rent in
effect under this Lease during the Lease Year
immediately
preceding the
commencement of the Renewal Term. If during such
thirty
(30) day period
the parties agree on such base rent,
escalation
factor and
additional
rent payable
during each year of
the Renewal Term,
then they shall
promptly execute an amendment to this Lease stating the
rent so agreed
upon. If during such
thirty (30) day period the parties are
unable, for any
reason whatsoever, to
agree on such base rent, escalation
factor and
additional rent payable then the option to renew shall lapse.
(b) If Tenant's
renewal notice is not
given timely,
then Tenant's
right of renewal
shall lapse and be of no further force or effect.
(c) If Tenant is in default under this Lease on the date
Tenant sends
a renewal notice or any time thereafter until a Renewal Term is to
commence,
and such default is
not cured within the applicable cure period,
then at
Landlord's election,
such Renewal Term
shall not commence and the
Term of this
Lease shall expire at the end of the Lease Term then in
effect.
(d) Tenant's right of renewal under this Section may be exercised
only
by Tenant and
may not be exercised
by any other
transferee, sublesses
or
assignee or
Tenant.
(e) If at any time fifty percent (50%) or more of the square feet
of
rentable area of
the Premises has been terminated pursuant to Section 7.4,
subleased
or assigned to any
entity other than an
entity that is owned by
or affiliated
with Tenant,
then Tenant's
rights pursuant to
this Section
snail lapse and
be of no further force or effect.
ARTICLE IV
Base Rent
4.1 Tenant shall
pay the Base Rent in equal monthly installments in advance
on the first day of each month during a Lease Year. On the first day of the
second and each subsequent Lease Year, the Base Rent in effect shall be
increased by the product of (a) the Base Rent
Annual Escalation Percentage,
multiplied by (b) the Base Rent in effect.
Concurrently with
Tenant's execution
of this Lease, Tenant shall pay an amount equal
to one (1) monthly
installment
of the Base Rent payable during the first Lease Year,
which amount shall be
credited toward the monthly installment of the Base Rent
payable for the first
full calendar month of the Lease Term. If
the Lease Commencement Date is not the
first day of a month, then the Base Rent
from the Lease
Commencement Date until
the first day of the following month shall be prorated on a per diem
basis at
the rate of one-thirtieth (1/30th) of the monthly
installment of the
Base Rent
payable during the first Lease Year, and Tenant shall pay such prorated
installment on the Lease Commencement
Date.
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4.2 All sums
payable by Tenant shall be paid to Landlord in legal tender of
the United States, at the address to which notices to
Landlord are to be given
or to such other party or such other address as Landlord may designate i-n
writing. Landlord's acceptance of rent after it shall have become due and
payable shall not excuse a delay upon
subsequent
occasions or constitute a
waiver of rights.
ARTICLE V
Increases in Real Estate Taxes and Operating- Costs
5.1 Tenant
shall pay Tenant's
proportionate
share of the amount by
which
Operating Charges (as defined in Section
5.2) during each calendar year falling
entirely or partly within the Lease Tern exceed a base amount (the
"Operating
Charges Base Amount") equal to the
Operating Charges
actually incurred during
the Operating Charges Base Year (as defined
in Section 1.7 above).
For purposes
of this Section, Tenant's proportionate share shall
be that percentage which is
equal to a fraction, the numerator of which is the number of square
feet of
rentable area an the Premises, and the denominator of which is the number of
square feet of rentable area in the
Building excluding the number of square feet
of rentable area of basement storage
space.
5.2 Operating Charges shall mean the following expenses incurred by
Landlord in the ownership and operation of
the Building: (a) electricity, water,
sewer and other utility charges;
(b) insurance
premiums; (c) management fees;
(d) costs of service and maintenance contracts; (e) maintenance and repair
exercises which are deducted by Landlord in computing
its federal
income tax
liability; (f) depreciation for capital
expenditures made by Landlord' to reduce
operating expenses if Landlord reasonably
estimates that the annual reduction in
operating expenses shall exceed such depreciation; (g) Real Estate Taxes (as
defined in Section 5.3); (h) charges for
janitorial services;
(i) assessments
imposed by any association now or hereafter
established to maintain common areas
and facilities of the Complex, (j) any business, professional and occupational
License tax payable by Landlord
with respect to the
Building; (k) reasonable
reserves for replacements, repairs and contingencies; (l) Building engineer
salary and employment expenses; and (m) any
other expense reasonably incurred by
Landlord in maintaining, repairing or operating the
Building. Operating Charges
shall not include: (1) principal or interest payments
on any mortgage, deed
of
trust or ground lease; (2) leasing
commissions; (3) depreciation of the Building
or other improvements except as specified above; (4) the costs of special
services or utilities separately charged to particular
tenants of the Building;
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(5) expenses for painting, redecorating, space planning, construction or
other
work which Landlord performs for any tenant
premises of the Building; (6) escrow
fees, brokerage fees or commissions,
loan fees, points,
title charges or other
payments on or arising with regarding to loans to Landlord or indebtedness
secured by the Building, or any costs connected with
refinancing of such loans;
(7) advertising and marketing costs, tenant concessions and any other
costs
associated with the leasing or sale of the Building, Land or any portion
thereof; (8) Landlord's income taxes; (9) Landlord's costs
of any service sold
to any tenant or occupant of the Building
for which Landlord is entitled to be
reimbursed as an additional charge or rental over and above
the base rent and
escalations payable under the lease or
occupancy agreement
with that tenant or
other occupant (including, without limitation, after-hours HVAC costs or
over-standard electrical consumption costs incurred by other tenant or
occupants); (10) the initial cost of
construction of the Building; (11) salaries
or other compensation of any personnel whose salaries are covered by a
management fee (except that the Building
Engineer salary shall be an Operating
Expense and shall not be covered by the
management
fee); (12) expenses for
repairs or replacements to the extent such expenses are covered by and
reimbursed to Landlord by virtue of
warranties from
contractors
or suppliers;
(13) any amounts paid to any person,
firm or corporation related or otherwise
affiliated with Landlord or any general
partner, officer or director of Landlord
or any of its general partners, to the extent same exceeds arms-length
competitive prices paid in the Washington,
DC metropolitan area for the services
or goods provided; (14) costs relating to maintaining
Landlord's
existence,
either as a corporation, partnership, or other entity, such as trustee's
fees,
annual fees, partnership organization or administration expenses, deed
recordation expenses, legal and accounting fees, other than with respect to
Building operations); (15) costs incurred due to Landlord's
violation of any
terms and conditions of this Lease or any
other lease relating to the Building;
(16) overhead profit increments paid to Landlord's subsidiaries or affiliates
for management or other services on or
to the Building or for supplies or other
materials to the extent that the cost of
the services,
supplies, or materials
materially exceeds the cost that would have
been paid had the services, supplies
or materials been provided by unaffiliated
parties on a
competitive basis; (17)
rental and other expenses incurred in leasing air conditioning systems,
elevators, or other equipment ordinarily considered to be of a capital
nature
(excepting equipment used in providing
janitorial services,
when such equipment
is not affixed to the Building);
(18) the cost of any
item of service or repair
to the extent covered by any warranty,
guaranty or insurance
policy maintained
or held by Landlord; (19) any Operating Charges which
are payable by any tenant
directly to the provider of the service or
for which Landlord is
entitled to be
reimbursed directly by a tenant, or by insurance proceeds; and (20) legal or
accounting fees, costs and disbursements
for negotiating leases or enforcing the
lease obligations of other tenants in the
Building.
All Operating Charges shall be "net" only and shall be reduced by the
amount of any insurance or other
reimbursement, recoupment, payment, discount or
allowance received by Landlord.
5.3 Real
Estate Taxes shall mean (a) all real
estate taxes, including
general and special assessments, if any, which are imposed upon Landlord or
assessed against the Building and/or the
land upon which the Building is located
(the "Land"), (b) any other present or
future taxes or governmental charges that
are imposed upon Landlord or assessed
against the Building or the Land which are
in the nature of or in substitution for real estate taxes, including any tax
levied on or measured by the rents payable
by tenants of the
Building, and (c)
expenses (including attorneys' fees) incurred in reviewing or seeking a
reduction of real estate taxes.
5.4 If the
average occupancy rate for the Building during any calendar
year
including the Operating Charges Base Year is less than
ninety-five
percent
(95%), or if any tenant is separately
paying f or the
electricity or janitorial
services furnished to its premises,
then Operating charges for such calendar
year shall be deemed to include all
additional expenses, as reasonably estimated
by Landlord, which would have been incurred during such calendar year if
such
average occupancy rate had been
ninety-five percent
(95%) and if Landlord paid
for electricity and janitorial services
furnished to such premises. For example,
if the average occupancy rate for the Building
during a calendar year is eighty
percent (80%), and if the janitorial contractor charges are $1.00 per square
foot of occupied rentable area per year, and if the Building contains one
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hundred thousand (100,000) square feet of rentable area, then it would be
reasonable for Landlord to estimate
that if the Building
had been
ninety-five
percent (95%) occupied during such year,
then janitorial
charges for such
year
would have been ninety-five thousand
dollars ($95,000.00)
5.5 At the
beginning of the Lease Term and at the beginning of each
calendar year thereafter, Landlord may submit a statement
setting forth the
amount by which Operating Charges that Landlord reasonably expects to be
incurred during each calendar year exceed
the Operating Charges
Base Amount and
Tenant's proportionate share of such
excess. Tenant shall pay to Landlord on the
first day of each month after receipt of
such statement, until
Tenant's receipt
of any succeeding statement, an amount equal to one-twelfth (1/12) of such
share.
5.6 Within
approximately
one hundred
twenty (120) days after the end of
each calendar year, Landlord shall submit a statement showing (a) Tenant's
proportionate share of the amount by which
Operating Charges incurred during the
preceding calendar year exceeded the
Operating Charges Base Amount, and (b) the
aggregate amount of Tenant's estimated payments during such year. If such
statement indicates that the aggregate
amount of such estimated payments exceeds
Tenant's actual liability, then Tenant
shall deduct the net overpayment from its
next estimated payment(s) pursuant to this
Article, If such statement indicates
that Tenant's actual liability exceeds the aggregate amount of such estimated
payments, then Tenant shall pay the amount
of such excess.
If Tenant does not
notify Landlord in writing of any objection
to such statement within thirty (30)
days after receipt, then Tenant shall be
deemed to have waived such objection.
5.7 If the Lease
Term commences or expires on a day other than the
first
day or the last day of a calendar year,
respectively,
then Tenant's
liability
for Operating Charges incurred during such year shall be proportionately
reduced.
ARTICLE VI
Use of
Premises
6.1 Tenant shall
use the Premises
solely for general
office purposes
and
for no other use or purpose. Tenant shall not use the Premises
for any unlawful
purpose or in any manner that in Landlord's opinion will constitute waste,
nuisance or unreasonable annoyance to Landlord or any
tenant of the
Building.
Tenant shall comply with all present and
future laws,
ordinances,
regulations
and orders concerning the use, occupancy and condition of the
Premises and all
machinery, equipment and furnishings therein. If any such law, ordinance,
regulation or order requires an occupancy or use
permit for the Premises, then
Tenant shall obtain and keep current such permit at Tenant's expense and
promptly deliver a copy thereof to
Landlord. Use of the
Premises is subject to
all covenants, conditions and restrictions
of record.
6.2 Tenant shall
pay before delinquency any business, rent or other tax or
fee that is now or hereafter assessed or imposed upon Tenant's
use or occupancy
of the Premises, the conduct of Tenant's
business in the
Premises or Tenant's
equipment, fixtures, furnishings, inventory or personal property. If
any such
tax or fee is enacted or altered so that such tax or fee is imposed upon
Landlord or so that Landlord is responsible
for collection or
payment thereof,
then Tenant shall pay the amount of such
tax or fee.
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6.3 Tenant
shall not generate, use, store or dispose of any Hazardous
Materials in or about the Building. Hazardous Materials shall mean (a)
"hazardous wastes," as defined by the
Resource Conservation
and Recovery Act of
1976, as amended from time to time,
(b) "hazardous
substances,"
as defined by
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended from time to time,
(c) "toxic
substances,"
as defined by the
Toxic Substances Control Act, as amended from time to time, (d) "hazardous
materials," as defined by the Hazardous
Materials Transportation Act, as amended
from time to time, (e) oil or other
petroleum products, and {f) any substance
whose presence could be detrimental to the Building or
hazardous to health or
the environment. Notwithstanding the
foregoing, Tenant may store in manufacturer
provided containers for use in the Premises
office supplies customarily found in
general offices in such quantities suitable
for Tenant's consumption.
ARTICLE VII
Assignment and Subletting
7.1 Tenant shall not assign this Lease or any of Tenant's rights or
obligations hereunder, or sublet or permit anyone to
occupy the Premises or any
part thereof, without Landlord's prior
written consent, which consent may not be
unreasonably withheld, conditioned or
delayed. No assignment or transfer of this
Lease may be effected by operation of law
or otherwise without
Landlord's prior
written consent. Any assignment, subletting or occupancy,
Landlord's
consent
thereto or Landlord's collection or acceptance of rent from any assignee,
subtenant or occupant shall not be construed as a waiver or release
of Tenant
from liability hereunder. Any assignment, subletting or occupancy,
Landlord's
consent thereto or Landlord's collection or acceptance of rent from any
assignee, subtenant or occupant shall not be construed as
relieving Tenant
or
any assignee, subtenant or occupant from the
obligation of obtaining Landlord's
prior written consent to any subsequent assignment, subletting or occupancy.
Upon an event of default, Tenant assigns to Landlord any sum due from any
assignee, subtenant or occupant of Tenant as
security for Tenant's
performance
of its obligations pursuant to this Lease, and Tenant authorizes each such
assignee, subtenant or occupant to pay such sum directly to Landlord if such
assignee, subtenant or occupant receives
written notice from Landlord specifying
that such rent shall be paid directly to
Landlord. Landlord's collection of such
rent shall not be construed as an acceptance of such assignee, subtenant or
occupant as tenant. All restrictions and obligations imposed pursuant to this
Lease on Tenant shall be deemed to extend
to any subtenant, assignee or occupant
of Tenant, and Tenant shall cause such persons to comply with all such
restrictions and obligations. Tenant shall not mortgage this Lease without
Landlord's written consent, which consent may be granted or withheld in
Landlord's sole and absolute discretion. Tenant shall pay the expenses
(including reasonable attorneys' fees) incurred by
Landlord in connection with
Tenant's request for Landlord to give its
consent to any assignment, subletting,
occupancy or mortgage.
7.2 If
Tenant is a partnership, then any dissolution of Tenant or a
withdrawal or change, whether voluntary,
involuntary or by
operation of law, of
partners owning a controlling interest in Tenant shall be deemed a voluntary
assignment of this Lease. If Tenant is a corporation, then any dissolution,
merger, consolidation or other
reorganization of Tenant, or any sale or transfer
of a controlling interest of its capital stock, shall be deemed a voluntary
assignment of this Lease.
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7.3 If Tenant
wants to assign,
sublet or otherwise transfer all or part of
the Premises or this Lease,
then Tenant
shall give
Landlord written notice
("Tenant's Request Notice") of the identity of the proposed assignee or
subtenant and its business, all terms of the proposed
assignment or subletting,
and the commencement date of the proposed assignment or subletting (the
"Proposed Sublease Commencement Date") and the area proposed to be
assigned or
sublet (the "Proposed Sublet Space").
Tenant shall also
transmit therewith
the
most recent financial statement or other
evidence of financial responsibility of
such assignee or subtenant and a certification executed by Tenant and such
proposed assignee or subtenant stating whether any premium or other
consideration is being paid for the
proposed assignment or sublease.
7.4 Landlord
shall have the right
in its sole and absolute discretion to
terminate this Lease with respect to the
Proposed Sublet Space by sending Tenant
written notice within forty-five (45) days
after Landlord's
receipt of Tenant's
Request Notice. If the Proposed Sublet Space does not constitute the entire
Premises and Landlord elects to terminate this Lease with respect to the
Proposed Sublet Space, then (a) Tenant
shall tender the Proposed Sublet Space to
Landlord on the Proposed Sublease
Commencement Date as
if the Proposed Sublease
Commencement Date nad been originally set forth
in this Lease as the expiration
date of the Lease Term with respect to the
Proposed Sublet Space,
and (b) as to
all portions of the Premises other than the Proposed
Sublet space,
this Lease
shall remain in full force and effect
except that the
additional
rent payable
pursuant to Article V and the Base Rent
shall be reduced proportionately. Tenant
shall pay all expenses of construction required to permit the operation
of the
Proposed Sublet Space separate from the
balance of the Premises. If the Proposed
Sublet Space constitutes the entire Premises and Landlord elects to
terminate
this Lease, the (1) Tenant shall tender the
Premises to Landlord on the Proposed
Sublease Commencement Date, and (2) the Lease Term shall terminate on the
Proposed Sublease Commencement Date.
7.5 If any
sublease, assignment
or other transfer (whether by operation of
law or otherwise) provides that subtenant,
assignee or other
transferee is to
pay any amount in excess of the rent and
other charges
due under this Lease,
then, whether such excess be in the form of any
increased rental, lump sum
payment, payment for the sale or lease of fixtures or other leasehold
improvements or any other form (and if the
applicable space does
not constitute
the entire Premises, the existence of such excess shall
be determined on a pro
rata basis), Tenant shall pay to Landlord
one half of any such excess (exclusive
of costs and expenses actually incurred by Tenant associated with
effectuating
such sublease or assignment) upon such terms as shall be
specified by Landlord
and in no event later than ten (10) days after Tenant's receipt thereof.
Landlord shall have the right to inspect
Tenant's books and
records relating to
any sublease, assignment or other transfer.
Any sublease,
assignment or
other
transfer shall be effected on forms
supplied or approved by Landlord.
ARTICLE VIII
Maintenance and Repairs
8.1 Tenant
shall keep and
maintain the Premises and all fixtures and
equipment located therein in clean, safe
and sanitary condition, shall take good
care thereof and make all repairs thereto, shall suffer no waste or injury
thereto, and at the expiration,
or earlier termination
of the Lease Term, shall
surrender the Premises in the same order
and condition in which they were on the
Lease Commencement Date, ordinary wear and tear and
unavoidable damage by the
elements excepted. Except as otherwise
provided in Article XVII or as covered by
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Landlord's insurance, all injury, breakage
and damage to the Premises and to any
other part of the Building or the Land caused by any act or omission of any
invitee, agent, employee, subtenant, assignee, contractor, client, family
member, licensee, customer or guest of Tenant (collectively "Invitees") or
Tenant, shall be repaired by and at
Tenant's expense, except that Landlord shall
have the right at Landlord's option to make
any such repair and to charge Tenant
for all costs and expenses reasonably
incurred in connection
therewith after a
reasonable opportunity to cure (except in case of
emergency).
Landlord shall
provide and install replacement tubes for building
standard fluorescent light
fixtures (subject to reimbursement
pursuant to Article
V); all other bulbs and
tubes for the Premises shall be provided
and installed at Tenant's expense.
ARTICLE IX
Alterations
9.1 The original
improvement
of the Premises shall be accomplished by
Landlord in accordance with Exhibit B. Landlord is under
no obligation to make
any alterations, additions, improvements or other changes (collectively
"Alterations") in or to the Premises except as set forth in Exhibit B or
otherwise expressly provided in this
Lease.
9.2 Tenant shall
not make or permit anyone to make any Alteration in or to
the Premises or the Building without
Landlord's
prior written
consent, which
consent may be granted or withheld in
Landlord's
sole and absolute
discretion
with respect to structural Alterations and
non-structural
Alterations which are
visible from the exterior of the Premises, and which consent shall not be
unreasonably withheld, conditioned or delayed with respect to all other
non-structural Alterations. Structural Alterations shall be deemed to
include
without limitation any Alteration that will or is likely to
necessitate
any
changes, replacements or additions to the electrical, mechanical, plumbing,
heating, ventilating or air conditioning systems of the Premises or the
Building. Any Alteration made by Tenant shall be made: (a) in a good,
workmanlike, first-class and prompt mariner;
(b) using new
materials only; (c)
by a contractor and in accordance with plans and specifications approved in
writing by Landlord; (d) in accordance with legal
requirements and requirements
of any insurance company insuring the
Building; (e) after obtaining any required
consent of the holder of any Mortgage (as defined in Section 21.1); and (2)
after obtaining a workmen's compensation
insurance policy approved in writing by
Landlord. If any lien (or a petition to
establish a lien) is filed in connection
with any Alteration, then such lien (or petition) shall
be discharged by Tenant
at Tenant's expense within thirty (30) days
thereafter by the payment thereof or
filing of a bond acceptable to Landlord.
Landlord's consent to
the making of an
Alteration shall not be deemed to
constitute Landlord's
consent to subject
its
interest in the Premises or the Building to liens which may be filed in
connection therewith.
9.3 If any
Alteration is made
without Landlord's
prior written
consent,
then Landlord shall have the right at
Tenant's expense to remove and correct
such Alteration and restore the Premises
and the Building to
their condition
immediately prior thereto or to require Tenant
to do the same. All
Alterations
to the Premises or the Building
made by either party
shall immediately
become
Landlord's property and shall remain upon and
be surrendered with
the Premises
at the expiration or earlier termination of
the Lease Term;
provided, however,
that if Tenant is not in default
under this Lease,
then Tenant
shall have the
right to remove, prior to the expiration or earlier termination of the Lease
Term, all movable furniture, furnishings
and equipment installed in the Premises
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solely at Tenant's expense. and except that Tenant shall be
required to remove
all Alterations to the Premises or the
Building which Landlord designates at the
time such Alteration was made in writing for removal. Movable furniture,
furnishings and equipment shall be deemed to exclude any item which would
normally be removed from the Premises with the assistance of any tool or
machinery other than a dolly. Landlord shall have the right to repair at
Tenant's expense all damage to the Premises or the building caused by such
removal or to require Tenant to do the
same. If any such
furniture,
furnishing
or equipment is not removed by Tenant prior to the expiration or earlier
termination of the Lease Term, then the same shall become
Landlord's
property
and shall be surrendered with the Premises
as a part thereof; provided, however,
that Landlord shall have the right to remove
from the Premises at Tenant's
expense such furniture, furnishing or equipment and any Alteration which
Landlord designates in writing for
removal.
ARTICLE X
Signs
10.1 Landlord
will list Tenant's
name in the Building
directory, if any,
and provide building standard signage near one suite entry door.
Tenant shall
not paint, affix or otherwise display on
any part of the exterior or interior of
the Building any other sign, advertisement or notice. Notwithstanding the
foregoing, Tenant shall have the right to
have corporate signage
installed by
Landlord within the main suite entry of the
Premises, at Tenant's
sole cost and
expense and subject to Landlord's
reasonable approval. If any such item that has
not been approved by Landlord is so
displayed,
then Landlord shall have the
right to remove such item at Tenant's expense or to require Tenant to do the
same.
ARTICLE XI
Security Deposit
11.1
Concurrently
with Tenant's execution of this Lease, Tenant shall
deposit with Landlord the Security
Deposit. Landlord shall not be required to
pay interest on the Security
Deposit or to maintain
the Security Deposit
in a
separate account. Within three (3) days after
written notice at Landlord's use
of the Security Deposit, Tenant shall deposit with Landlord cash in an
amount
sufficient to restore the Security Deposit to its prior amount, Within
approximately ninety (90) days after the later
of (a) the expiration or earlier
termination of the Lease Term, or (b)
Tenant's vacating the
Premises, Landlord
shall return the Security Deposit less such
portion thereof as Landlord may have
used to satisfy Tenant's obligations. If
Landlord transfers the Security Deposit
to a transferee of the Building or
Landlord's interest therein, then upon notice
to Tenant of such. transfer such transferee (and not Landlord)
shall be liable
for its return. The holder of any Mortgage
shall not be liable for the return of
the Security Deposit unless such holder
actually receives the Security Deposit.
ARTICLE
XII
Holding Over
12.1 Tenant
acknowledges that it
is extremely important that Landlord have
substantial advance notice of the date on
which Tenant will vacate the Premises,
because Landlord will (a) require an extensive
period to locate a
replacement
tenant, and (b) plan its entire leasing and
renovation program f or the Building
in reliance on its lease expiration dates. Tenant also acknowledges that if
Tenant fails to surrender the Premises at
the expiration or earlier termination
of the Lease Term, then it will be conclusively presumed that the value to
10
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Tenant of remaining in possession, and the loss that will be suffered by
Landlord as a result thereof, far exceed the Base Rent and
additional rent that
would have been payable had the Lease Term continued during such holdover
period. Therefore, if Tenant does not immediately
surrender the Premises
upon
the expiration or earlier termination of the Lease Term,
then the rent shall be
increased to equal the greater of (1) fair
market rent far the premises, or (2)
150% for the first month, and 200% for each additional
month of the Base
Rent,
additional rent and other sums that would have been
payable pursuant to the
provisions of this Lease if the Lease Ten had
continued during such holdover
period. Such rent shall be computed on a
monthly basis and
shall be payable on
the first day of such holdover period and the first day of each
calendar month
thereafter during such holdover period until the Premises
have been vacated.
Landlord's acceptance of such rent shall not in any manner
adversely affect
Landlord's other rights and remedies,
including Landlord's right to evict Tenant
and to recover damages.
ARTICLE XIII
Insurance
13.1 Landlord
shall maintain throughout the Lease Term fire and
extended
coverage insurance on the Building in an amount at least
equal to
ninety-five
percent (95%) of the replacement cost thereof. Landlord shall also maintain
through the Lease Term broad form
comprehensive
general liability insurance
(written on an occurrence basis and including an endorsement for personal
injury) in an amount of not less than two
million dollars ($2,000,000) combined
single limit per occurrence. All such insurance shall contain an endorsement
that such insurance
