EXHIBIT 10.24
TRIPLE-NET LEASE AGREEMENT
This LEASE AGREEMENT (this “Lease”)
is entered into effective the 11 th day of March, 2005,
by and among the following parties:
LANDLORD:
Sunwest Properties II, LLC
3723 Fairview Industrial Drive SE, Suite 270
PO Box 3006
Salem, Oregon 97302-0006
EIN: 93-1272486
TENANT:
Eschelon Telecom, Inc.
730 2nd Avenue South, Suite 900
Minneapolis, MN 55402
EIN: 41-1843131
Landlord leases to Tenant under the terms and
conditions listed below:
1.
PROPERTY
. Certain portions, aggregating approximately 11,400 square
feet of rentable interior space on the first floor and
approximately 2,295 square feet rentable interior space on the
second floor which will include the “computer room”,
together with the non-exclusive right to use the outside deck area
on the second level of the building and sufficient spaces
(approximately 47) in the parking lot on a first come-first served
basis, on the northwest side of the building, of the real property
known as 3723 Fairview Industrial Drive SE, Salem, Oregon, more
thoroughly described in the attached Exhibit A (the
“Premises”), reserving, however, unto Landlord the
non-exclusive use of the elevator for ingress and egress serving
the remainder of the second floor of the building. Tenant may
remove, at its expense and without damage to the Premises, upon
expiration of this Lease or the last renewal term, as applicable,
the property listed in the attached Exhibit B.
2.
TERM
. This Lease shall
commence on the 1st day of May, 2005, (the “Commencement
Date”), and shall continue through April 30, 2006, (the
“Expiration Date”), unless earlier terminated in
accordance with the provisions of this Lease.
3.
PAYMENT
.
Tenant shall pay lease payments in the amount of $17,120.00 per
month in advance on the first day of each month during the term of
this Lease, beginning with the first such monthly payment on May 1,
2005, and the first and last lease payments shall be prorated if
the Commencement Date is on a day other than the first day of the
month.
4.
TRIPLE-NET
LEASE
. This is a true
triple-net lease. Tenant shall pay all costs relating to the
Premises, including but not limited to real and personal property
taxes, utilities, maintenance, repairs, interior and exterior
structural repairs, interior and exterior nonstructural repairs,
interior and exterior maintenance, insurance and all other expenses
relating to the Premises.
1
5.
SUBORDINATION
.
Tenant shall subordinate Tenant’s interest in the Premises to
secured financing obtained by Landlord in an amount not to exceed
$5,361,600.00. Tenant shall sign all necessary documents reasonably
acceptable to Tenant to complete such subordination.
6.
OPTION
.
If Tenant shall not be in default, Tenant has the option to renew
this Lease for two (2) successive one-year terms following
expiration of the then current term of this Lease on identical
terms, exercisable on ninety (90) days prior written notice from
Tenant to Landlord, except the rent provided for in Section 3
hereof shall be increased by four percent (4%) for each renewal
over the rent for the immediately preceding term.
7.
NOT A PARTNER
.
Landlord is not a partner nor a joint venturer with Tenant in
connection with the business carried on under this Lease, and shall
have no obligations with respect to Tenant’s debts or other
liabilities, and no interest in Tenant’s profits.
8.
USE OF THE
PREMISES . The Premises shall be used for
office purposes and uses incidental thereto and for no other
purpose without the consent of Landlord, which consent may be
withheld in Landlord’s sole discretion.
9.
NO UNLAWFUL
USE . In
connection with the use of the Premises, the Tenant shall conform
to all applicable laws and ordinances of any public agency
affecting the Premises and their use and shall correct, at
Tenant’s own expense, any failure of compliance where such
failure is by fault of Tenant or by reason of Tenant’s use.
Tenant will also refrain from any use which would be reasonably
offensive to owners or users of neighboring premises or which would
tend to create a nuisance or damage the reputation of the
Premises.
10.
COMPLIANCE WITH LENDER
OBLIGATIONS .
Landlord may obtain a loan to be secured by Landlord’s
interest in the Premises. As a condition to the loan,
Landlord’s lender may impose certain requirements regarding
the possession and use of the Premises, all of which will be
consistent with the use of the Premises for Tenant’s offices
(the “Lender Requirements”). Tenant agrees that, so
long as the Lender Requirements remain in force and do not
adversely affect any right, benefit or privilege of Tenant or
increase Tenant’s obligations under this Lease in any
material respect, including, without limitation, any monetary
obligations, Tenant shall possess and use the Premises in full
compliance with the Lender Requirements.
11.
TENANT
RESPONSIBILITY
. The
Premises are being leased in an “as is” condition and
Landlord shall not be liable for repairs or maintenance of the
Premises or other charges. Landlord shall not bear any
responsibility for any costs, tax, fee or other expense relating to
the Premises since this is a true triple-net lease and all such
costs, fees, taxes and expenses shall be paid by Tenant, including
but not limited to real and personal property taxes; utility costs;
costs of repair and maintenance of the roof and gutters, exterior
walls (including painting), bearing walls, structural members, and
foundation; repair of sidewalks, driveways, curbs and parking
areas; repair and maintenance of water, sewage, gas and electrical
services; repair of the heating and air conditioning system,
including ordinary maintenance; repair of interior walls, ceilings,
doors and windows and related hardware, light fixtures, switches,
and wiring and plumbing; any repairs necessitated by the negligence
of Tenant, its agents, employees
2
and
invitees; and any repairs or alterations required under
Tenant’s obligation to comply with laws and regulations as
set forth above, with the right to offset rent hereunder for
Landlord’s share of such costs, as reasonably approved by
Landlord. To the extent any of Tenant’s obligations pursuant
to this paragraph are a part of obligations of the property of
which the Premises are a part, Landlord and Tenant shall divide the
costs pro-rata on the basis of Tenant’s occupancy as a
percentage of the rentable space in the entire
building.
12.
RIGHT OF
INSPECTION . Landlord shall have the right to
inspect the Premises at any reasonable time or times upon
reasonable notice to determine the necessity of repairs.
13.
ALTERATIONS .
Tenant shall make no improvements or alterations on the Premises
without first obtaining Landlord’s written consent, which
consent shall not be unreasonably withheld, conditioned or delayed.
All improvements and alterations performed on the Premises by
either Landlord or Tenant shall be the property of Landlord when
installed unless the applicable Landlord’s consent provides
otherwise.
14.
TENANT’S
INSURANCE . Tenant shall pay Landlord Tenant’s
pro-rata share for Landlord to maintain a standard fire and hazard
insurance policy covering any improvements to the property of which
the Premises are a part, which policy shall consist of property
insurance providing a limit equal to the full insurable value
naming Landlord and Tenant as insureds. In addition, Tenant shall
maintain liability insurance, which policy shall consist of a
general liability policy with a limit of no less than $1,000,000
per occurrence, protecting both Landlord and Tenant against any
claim, loss or liability arising out of or relating to any activity
of Tenant upon the Premises, or any condition of the Premises in
the possession or under the control of Tenant, including any such
claim, loss or liability which may be caused or contributed to in
whole or in part by Landlord’s own negligence or failure to
effect any repair or maintenance required by this Lease, and Tenant
shall also indemnify and defend Landlord from any such claim. Each
shall obtain from its respective insurance carrier waivers of
subrogation against the other party, agents, employees and, as to
Tenant, invitees. The liability policy shall also contain a
provision requiring thirty (30) days’ written notice to
Landlord prior to any change or cancellation of such
insurance.
15.
LIABILITY AND
INDEMNITY .
|