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OFFICE LEASE

Office Lease Agreement

OFFICE LEASE | Document Parties: TOMOTHERAPY INC | OLD SAUK TRAILS PARK LIMITED PARTNERSHIP You are currently viewing:
This Office Lease Agreement involves

TOMOTHERAPY INC | OLD SAUK TRAILS PARK LIMITED PARTNERSHIP

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Title: OFFICE LEASE
Governing Law: Wisconsin     Date: 2/12/2007

OFFICE LEASE, Parties: tomotherapy inc , old sauk trails park limited partnership
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Exhibit 10.13

OFFICE LEASE

BETWEEN

OLD SAUK TRAILS PARK LIMITED PARTNERSHIP

LANDLORD

AND

TOMOTHERAPY INCORPORATED

TENANT

1240 Deming Way

Madison, Wisconsin

 


 

1240 Deming Way
Madison, Wisconsin 53717

 

 

 

 

 

 

 

 

 

 

No. 6

 

REFERENCE DATA

 

January 26, 2005

These terms are specific to, and incorporated in, this lease.

 

 

 

 

 

¶ no.

 

Item

 

Lease Provision

1.01

 

Tenant

 

TomoTherapy Incorporated, a Wisconsin corporation

 

 

 

 

 

1.02

 

Premises
Area of the Premises

 

all of the building including seven below-grade test bunkers
61,410 rentable square feet (“RSF”) excluding the test bunkers

 

 

 

 

 

1.03

 

Additional Permitted uses

 

manufacture, testing and assembly of medical imaging equipment

 

 

 

 

 

1.04

 

Term
Effective Date

 

Through May 31,2014
this Reference Data page #6 is effective March 14, 2005.

 

 

 

 

 

2.01

 

Rent

 

14.25/RSF/yr.

 

 

 

 

 

2.02

 

Rent Adjustment
Tenant’s pro rata share
Additional Rent

 

$0.50/RSF/yr. each June 1 st
100.00%
$6.82/RSF/yr [subject to adjustment per §2.02]

 

 

 

 

 

2.05

 

Security deposit

 

NONE

 

 

 

 

 

4.01

 

Build out Allowance

 

PAID

 

 

 

 

 

10.01

 

Extension term

 

Four terms, five years each

 

 

 

 

LANDLORD

 

TENANT

Old Sauk Trails Park Limited Partnership

 

TomoTherapy Incorporated

Old Sauk Trails Park Development Company, gen’l partner

 

1240 Deming Way

8020 Excelsior Drive, Ste. 300

 

Madison WI 53717-2911

Madison WI 53717-1998

 

 

 

 

 

 

 

 

/s/ George Gialamas

 

George Gialamas, President

 

/s/ Dr. Frederick A. Robertson

 

Dr. Frederick A. Robertson, C.E.O.

 

 

 


 

1240 Deming Way
Madison, Wisconsin 53717

 

 

 

 

 

 

 

 

 

 

No. 1

 

REFERENCE DATA

 

October 22, 2001

These terms are specific to, and incorporated in, this lease.

 

 

 

 

 

¶ no.

 

Item

 

Lease Provision

1.01

 

Tenant

 

Tomotherapy Incorporated, a Wisconsin corporation

 

 

 

 

 

1.02

 

Premises

Area of the Premises
1

 

1 st and 2 nd floor, building to be constructed at 1240 Deming Way, including test bunkers
appx. 40,000 rentable square feet (“RSF”) of office and manufacturing space excluding the test bunkers

 

 

 

 

 

1.03

 

Additional Permitted uses

 

manufacture, testing and assembly of medical imaging equipment

 

 

 

 

 

1.04

 

Term
Target Date

 

Ten (10) years
May 1, 2002, for 1
st floor & bunkers; June 1, 2002, for 2 nd floor

 

 

 

 

 

2.01

 

Rent at commencement

 

13.00/RSF/yr.

 

 

 

 

 

2.02

 

Rent Adjustment
Tenant’s pro rata share
1
Additional Rent

 

$0.50/RSF/yr.
60.6%
$5.50/RSF/yr [est.]

 

 

 

 

 

2.05

 

Security deposit

 

NONE

 

 

 

 

 

4.01

 

Build out Allowance

 

$23.25/RSF

 

 

 

 

 

10.01

 

Extension term

 

Four terms, five years each

 

 

 

 

LANDLORD

 

TENANT

Old Sauk Trails Park Limited Partnership

 

Tomotherapy Incorporated

Old Sauk Trails Park Development Company, gen’ l partner

 

2228 Evergreen Road

8020 Excelsior Drive, Ste. 300

 

Middleton, WI 53562-4241

Madison WI 53717-1998        

 

 

 

 

 

 

 

 

/s/ George Gialamas

 

George Gialamas, President

 

/s/ John J. Barni

 

John J. Barni, C.E.O.

 

 

 

 

 

 

1

 

Area of the Premises and of the Building and the Tenant’s pro rata share to be confirmed upon completion of the final building plans, and prior to commencement, by execution of another Reference Data page.

 


 

TABLE OF CONTENTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PAGE

 

ARTICLE 1

 

BASIC LEASE PROVISIONS

 

 

 

 

 

 

Section 1.01

 

 

 

Date and Parties

 

 

1

 

 

 

Section 1.02

 

 

 

Premises

 

 

1

 

 

 

Section 1.03

 

 

 

Use

 

 

1

 

 

 

Section 1.04

 

 

 

Term

 

 

1

 

 

 

Section 1.05

 

 

 

Improvements

 

 

3

 

 

 

 

 

 

 

 

 

 

 

 

ARTICLE 2

 

RENT AND SECURITY

 

 

 

 

 

 

Section 2.01

 

 

 

Rent and Rent Adjustment

 

 

3

 

 

 

Section 2.02

 

 

 

Additional Rent

 

 

4

 

 

 

Section 2.03

 

 

 

Personal Property Tax

 

 

9

 

 

 

Section 2.04

 

 

 

Security Deposit

 

 

9

 

 

 

Section 2.05

 

 

 

Sales Tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ARTICLE 3

 

AFFIRMATIVE OBLIGATIONS

 

 

 

 

 

 

Section 3.01

 

 

 

Compliance with Laws

 

 

9

 

 

 

Section 3.02

 

 

 

Services and Utilities

 

 

10

 

 

 

Section 3.03

 

 

 

Repairs and Maintenance

 

 

12

 

 

 

 

 

 

 

 

 

 

 

 

ARTICLE 4

 

NEGATIVE OBLIGATIONS

 

 

 

 

 

 

Section 4.01

 

 

 

Alterations

 

 

14

 

 

 

Section 4.02

 

 

 

Assignment and Subleasing

 

 

16

 

 

 

 

 

 

 

 

 

 

 

 

ARTICLE 5

 

INSURANCE

 

 

 

 

 

 

Section 5.01

 

 

 

Insurance

 

 

17

 

 

 

Section 5.02

 

 

 

Indemnification

 

 

20

 

 

 

Section 5.03

 

 

 

Limitation of Landlord’s Liability

 

 

20

 

 

 

 

 

 

 

 

 

 

 

 

ARTICLE 6

 

LOSS OF PREMISES

 

 

 

 

 

 

Section 6.01

 

 

 

Damages

 

 

21

 

 

 

Section 6.02

 

 

 

Condemnation

 

 

23

 

 

 

 

 

 

 

 

 

 

 

 

ARTICLE 7

 

DEFAULT

 

 

 

 

 

 

Section 7.01

 

 

 

Tenant’s Default

 

 

25

 

 

 

Section 7.02

 

 

 

Landlord’s Remedies

 

 

26

 

 

 

Section 7.03

 

 

 

Landlord’ Default

 

 

27

 

 

 

Section 7.04

 

 

 

Exception to Cure Periods

 

 

27

 

 

 

Section 7.05

 

 

 

Self-Help

 

 

27

 

 

 

Section 7.06

 

 

 

Survival

 

 

27

 

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PAGE

 

ARTICLE 8

 

NONDISTURBANCE

 

 

 

 

 

 

Section 8.01

 

 

 

Subordination

 

 

28

 

 

 

Section 8.02

 

 

 

Estoppel Certificate

 

 

28

 

 

 

Section 8.03

 

 

 

Quiet Possession

 

 

29

 

 

 

 

 

 

 

 

 

 

 

 

ARTICLE 9

 

LANDLORD’S RIGHTS

 

 

 

 

 

 

Section 9.01

 

 

 

Rules

 

 

29

 

 

 

Section 9.02

 

 

 

Mechanic’s Liens

 

 

29

 

 

 

Section 9.03

 

 

 

Right to Enter

 

 

30

 

 

 

Section 9.04

 

 

 

Holdover

 

 

31

 

 

 

Section 9.05

 

 

 

Signs

 

 

32

 

 

 

 

 

 

 

 

 

 

 

 

ARTICLE 10

 

OPTIONS

 

 

 

 

 

 

Section 10.01

 

 

 

Option to Extend

 

 

33

 

 

 

 

 

 

 

 

 

 

 

 

ARTICLE 11

 

DISPUTES

 

 

 

 

 

 

Section 11. 01

 

 

 

Arbitration

 

 

33

 

 

 

 

 

 

 

 

 

 

 

 

ARTICLE 12

 

MISCELLANEOUS

 

 

 

 

 

 

Section 12.01

 

 

 

Broker’s Warranty

 

 

34

 

 

 

Section 12.02

 

 

 

Attorney’s Fees

 

 

35

 

 

 

Section 12.03

 

 

 

Notices

 

 

35

 

 

 

Section 12.04

 

 

 

Partial Invalidity

 

 

35

 

 

 

Section 12.05

 

 

 

Waive

 

 

35

 

 

 

Section 12.06

 

 

 

Construction

 

 

35

 

 

 

Section 12.07

 

 

 

Binding on Successors

 

 

35

 

 

 

Section 12.08

 

 

 

Governing Law

 

 

35

 

 

 

Section 12.09

 

 

 

Insurance Increase

 

 

35

 

 

 

Section 12.10

 

 

 

Lease not an Offer

 

 

35

 

 

 

Section 12.11

 

 

 

Recording

 

 

36

 

 

 

Section 12.12

 

 

 

Survival of Remedies

 

 

36

 

 

 

Section 12.13

 

 

 

Authority of Parties

 

 

36

 

 

 

Section 12.14

 

 

 

Business Days

 

 

36

 

 

 

Section 12.15

 

 

 

Entire Agreement

 

 

36

 

 

 

Section 12.16

 

 

 

Definition of Lease

 

 

36

 

                                                                  EXHIBITS

 

 

 

 

 

 

 

Exhibit A

 

Floor Plan

 

 

Exhibit B

 

Building

 

 

Exhibit C

 

Land

 

 

Exhibit D 2

 

Space Plan

 

 

Exhibit E

 

Specifications

 

 

Exhibit F

 

Janitorial Services

 

 

Exhibit G

 

Rules

 

 

Exhibit H

 

Building Standard

 

 

Exhibit I

 

Tenant Build Out Agreement

 

 

 

 

2

 

Exhibits D & E are to be agreed on by Landlord and Tenant and added hereto by 10/31/01

 


 

DEFINITIONS

 

 

 

Additional Rent

 

§2.02

Alterations

 

§4.01(a)

Applicable Laws

 

§3.01

Asking/Answering Party

 

§8.02(a)

Building

 

§1.01

Business Days

 

§12.13

Business Hours

 

§3.02(b)

Canceling/Complying Party

 

§3.01

Commencement Date

 

§l.04

Default

 

§7.01(a)

Defaulting Party

 

§7.05

Excess Consideration

 

§4.02(f)

Extension Term

 

§10.01(a)

HVAC

 

§3.02(a)

Holdover

 

§9.04(a)

Improvements

 

§1.05

Injured Party

 

§5.01(d)

Land

 

§1.02

Landlord

 

§1.01

Late Payment

 

§2.01 (b)

Lease

 

§1.01

Operating Expenses

 

§2.02

Premises

 

§1.02

Property

 

§2.02(a)

Pro Rata Share

 

§2.02(a)

Real Estate Taxes

 

§2.02(a)

Reference Data

 

§1.01

Relevant Space

 

§6.01 (a)

Rent

 

§2.01

Statement

 

§2.02(d)

Substantial Completion

 

.§1.04(b)

Successor Landlord

 

§8.0l(b)

Target Date

 

§1.04(a)

Temporary Condemnation

 

§6.02(h)

Tenant

 

§1.01

Term

 

§1.04(a)

 


 

ARTICLE 1 — BASIC LEASE PROVISIONS

1.01. Date and parties. This lease (Lease) is entered into between Old Sauk Trails Park Limited Partnership, as lessor (Landlord) and the tenant identified on the Reference Data page at the front of this Lease, as lessee (Tenant) for space in the building to be constructed on Lots 65 and 66, Old Sauk Trails Park, Sixth Addition, Madison, Wisconsin (Building).

1.02. Premises. Landlord leases to Tenant the space identified in the Reference Data (Premises) as shown outlined on the attached floor plan (Exhibit A). The Premises contain the fixtures, improvements, and other property now installed therein plus any improvements required by section 1.05 and Exhibits D and E.

The Building (Exhibit B) will contain approximately 59,235 rentable square feet excluding the test bunkers and the Premises will contain the rentable area which is designated in the Reference Data. These measurements were made using the American National Standard Method of Measuring Floor Area in Office Buildings, ANSI/BOMA Z65.1-1996, published by the Building Owners and Managers Association International. Any change in the rentable area of the Building or Premises will be incorporated herein by a revision of the Reference Data.

Tenant and its agents, employees, and invitees, have the nonexclusive right with others designated by Landlord to the free use of the common areas in the Building and of the land (Land) on which the Building is located (Exhibit C) for the common areas’ intended and normal purpose. Common areas include elevators, sidewalks, surface-lot parking areas, driveways, hallways, stairways, public bathrooms, common entrances, lobby, and other similar public areas and access ways. Landlord may change the common areas if the changes do not materially and unreasonably interfere with Tenant’s access to the Premises or use of them.

1.03. Use. Tenant shall use the Premises for business office purposes only, unless Landlord gives its advance written consent to another use which shall be evidenced by inclusion in the Reference Data. Landlord warrants that applicable laws, ordinances, regulations, and restrictive covenants permit the Premises to be used for any use permitted by the Lease. Tenant shall not create a nuisance or use the Premises for any immoral or illegal purposes.

1.04.Term.

      1.04(a). Term. The Lease begins (Commencement Date) for any part of the Premises on the earlier of:

(i) the date Tenant takes possession and occupies any part of the Premises, but only for that portion so occupied; or

 


 

(ii) the Target Date for each portion of the Premises, if said portion is substantially completed on that date; or

(iii) thirty (30) days after the delivery of the notice required by subsection 1.04(c), if the applicable part of the Premises is substantially completed on that date.

If the Commencement Date would be a Saturday, Sunday, or holiday listed in paragraph 3.02(b)(ii), the Commencement Date shall be the first business day following that Saturday, Sunday, or holiday. Within thirty days after the Commencement Date, the parties shall confirm the Commencement Date by an amendment to the Reference Data.

The Lease shall continue in force from the Commencement Date if said date is the first day of a calendar month, or else from the first day of the month following the Commencement Date for the term designated in the Reference Data, unless ended earlier pursuant to the terms of this Lease.

1.04(b). Substantial completion. Landlord shall use its best efforts to substantially complete the Premises by the Target Dates set in the Reference Data. Substantially complete means:

(i) the decoration, fixtures, and equipment to be installed by Landlord (“Building Standard”, described in Exhibit H) are installed and in good operating order;

(ii) Tenant, its employees, agents, and invitees, have ready access to the Building and Premises through the lobby, entranceways, elevators, and hallways;

(iii) completing Tenant’s improvements (section 1.05 and Exhibits D and E) so that (A) Tenant can use the premises for their intended purposes without material interference to Tenant conducting its ordinary business activities, and

(B) the only incomplete items are minor or insubstantial details of construction, mechanical adjustments, or finishing touches like touch-up plastering or painting;

(iv) the Premises are ready for the installation of any equipment, furniture, fixtures, or decoration that Tenant will install;

(v) the following items are installed and in good operating order:

(A) building lobby,

(B) hallways on floor on which Premises are located (including walls, flooring, ceiling, lighting, etc.),

(C) elevators, HVAC, utilities, and plumbing serving the Premises, and

(D) the doors and hardware; and

(vi) the Premises are broom clean.

 

 

 

 

 

 

 

 

 

 

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1.04(c). Notice. Landlord shall give Tenant at least thirty (30) days advance written notice of the estimated substantial completion date if different from the Target Date. If the estimated substantial completion date changes at any time after Landlord gives notice, then Landlord shall give thirty (30) calendar days advance notice of the new estimated substantial completion date.

1.04(d). Inspection and Punchlist. Before the Commencement Date, the parties shall inspect the Premises, have all systems demonstrated, and prepare a punch-list. The punch-list shall list incomplete, minor, or insubstantial details of construction; necessary mechanical adjustments, and needed finishing touches. Landlord will complete the punch-list items within thirty (30) days after the Commencement Date. Landlord will promptly correct any latent defects as they become known, if Tenant notifies Landlord within thirty (30) days after Tenant first learns of the defect.

1.04(e). Delayed Possession. Tenant may cancel this Lease if Landlord cannot deliver actual possession of the substantially complete Premises by one hundred and twenty (120) days after the Target Date. To cancel Tenant must give notice to Landlord within one hundred and eighty (180) days after the Target Date and before Landlord gives notice to Tenant that the Premises are substantially complete. The one hundred and twenty (120) day and one hundred and eighty (180) day periods above shall be extended by the time equal to any period of delay caused by the Tenant. Within thirty (30) days after cancellation Landlord shall return to Tenant prepaid consideration including Rent and deposits.

1.05. Improvements. Landlord shall make improvements to the Premises in accord with Exhibits D and E (Improvements) and Exhibit I (Tenant Build Out Agreement). The Improvements shall be completed in a good and workmanlike manner and comply with all applicable laws, ordinances, rules, and regulations of governmental authorities.

ARTICLE 2 — RENT AND SECURITY

2.01. Rent. Tenant shall pay rent (Rent) to Landlord in the amounts designated in the Reference Data.

(a) Payment. The Rent shall be paid in equal monthly installments:

(i) without advance notice, demand, offset, or deduction unless the offset or deduction is made by Tenant as permitted under paragraph 11.01(b)(ii) or to recover any unpaid (nonappealable) court judgment Tenant has against Landlord;

(ii) by the first day of each month during the Term; and

 

 

 

 

 

 

 

 

 

 

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(iii) to Landlord or to Landlord’s agent as identified in the Reference Data, or as Landlord may specify in writing to the Tenant.

If the Term does not begin on the first day or end on the last day of a month, the Rent for that partial month shall be prorated by multiplying the monthly Rent by a fraction, the numerator of which is the number of days of the partial month included in the Term and the denominator of which is the total number of days in the full calendar month.

(b) Late payment. If Tenant fails to pay part or all of the Rent or Additional Rent (section 2.02) within ten (10) days after it is due, the Tenant shall also pay:

     (i) a late charge equal to 1 percent of the unpaid Rent and Additional Rent, plus

     (ii) interest at 18 percent per annum or the maximum then allowed by applicable law, whichever is less, on the remaining unpaid balance, retroactive to the date originally due until paid, but the interest accumulation shall stop after thirty (30) days unless Landlord gives Tenant written notice of the Tenant’s failure to pay Rent or Additional Rent within 30 days of the date payment was due.

2.02. Additional Rent . Tenant shall also pay its pro rata share of real estate taxes and operating expenses for the Property as Additional Rent in accordance with the following provisions.

2.02(a). Definitions.

(i) Tenant’s pro rata share, which is shown in the Reference Data, was calculated by dividing the rentable area of the Premises by the rentable area of the Building and expressing the fraction as a percentage.

(ii) Property means the Building and its equipment and systems, and the Land.

(iii) Real Estate Taxes means real property taxes and currently due installments of assessments, special or otherwise, imposed upon the Property, and reasonable legal fees, costs, and disbursements incurred for proceedings to contest, determine, or reduce Real Estate Taxes, but only to the extent the Real Estate Taxes are reduced.

Real Estate Taxes do not include:

(A) federal, state, or local income taxes,

(B) franchise, gift, transfer, excise, capital stock, estate, succession, or inheritance taxes,

(C) penalties or interest for late payment of Real Estate Taxes, and

 

 

 

 

 

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(D) the portion of Real Estate Taxes that is allocable to any Building capital improvements made after the Building was fully assessed as a completed and occupied unit and the Lease was signed except to the extent the additional improvements benefit the Tenant.

(iv) Operating Expenses means Landlord’s operating expenses that are reasonable, actual and necessary, out-of-pocket, obtained at competitive prices, and that are directly attributable to the operation, maintenance, management, and repair of the Property, as determined under generally accepted accounting principles consistently applied, including:

(A) salaries, and other compensation; including payroll taxes, vacation, holiday, and other paid absences; and welfare, retirement, and other fringe benefits; that is paid to employees, independent contractors, or agents of Landlord engaged in the operation, repair, management, or maintenance of the Property;

(B) repairs and maintenance of the Property and the cost of necessary supplies, tools, materials, and equipment for Property repairs and maintenance, that under generally accepted accounting principles would not be capitalized;

(C) premiums and other charges incurred by Landlord for insurance on the Property and for employees specified in subparagraph 2.02(a)(iv)(A)(l);

(D) costs incurred for inspection and servicing, including all outside maintenance contracts necessary or proper for the maintenance of the Property, such as janitorial and window cleaning, rubbish removal, exterminating, water treatment, elevator, electrical, plumbing, and mechanical equipment, and the cost of materials, tools, supplies, and equipment used for inspection and servicing;

(E) costs incurred for electricity, water, gas, fuel, or other utilities;

(F) sales, use, and excise taxes on goods and services purchased by Landlord;

(G) license, permit, and inspection fees;

(H) fees for public accounting;

(I) legal fees, costs, and disbursements but excluding those

(1) relating to disputes with tenants,

(2) based upon Landlord’s negligence or other tortious conduct,

(3) relating to enforcing any leases except for enforcing lease provisions for the benefit of the Building tenants generally, or

(4) relating to the defense of Landlord’s title to, or interest in, the Property;

(J) management fees to a person or entity other than Landlord;

(K) the annual amortization over its useful life with a reasonable salvage value on a straight-line basis of the costs of any capital improvements made by

 

 

 

 

 

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Landlord and (i) required by any changes in applicable laws, rules, or regulations of any governmental authorities enacted after the Building was assessed as a completed and occupied unit and the Lease was signed, or (ii) which are for the benefit of the Building tenants generally;

(L) the annual amortization over its useful life with a reasonable salvage value on a straight-line basis of the costs of any capital improvements made by Landlord as a labor-saving measure or to accomplish other savings in operating, repairing, managing, or maintaining the Property, after the Building was assessed as a completed and occupied unit and the Lease was signed, but only to the extent of the savings; and

(M) other costs reasonably necessary to operate, repair, manage, and maintain the Property in a first class manner and condition.

Operating Expenses exclude:

(A) Real Estate Taxes as defined in paragraph 2.02(a)(iii);

(B) leasing commissions, costs, disbursements, and other expenses incurred for leasing, renovating, or improving space for tenants;

(C) costs incurred by Landlord in discharging its obligations under section 1.05 and Exhibit C;

(D) costs (including permit, license, and inspection fees) incurred in renovating, improving, decorating, painting, or redecorating vacant space or space for tenants;

(E) Landlord’s cost of electricity or other service sold to tenants for which Landlord is to be reimbursed as a charge over the Rent and Additional Rent payable under the lease with that tenant;

(F) depreciation and amortization on the Building except as expressly permitted elsewhere in the Lease;

(G) costs of a capital nature including capital improvements, capital repairs, capital equipment, and capital tools, as determined under generally accepted accounting principles consistently applied, except that the annual amortization of these costs shall be included to the extent expressly permitted in subparagraph 2.02(a)(iv)(K) and (L);

(H) costs incurred because the Landlord or another tenant violated the terms of any lease;

(I) interest on debt or amortization payments on mortgages or deeds of trust or any other debt for borrowed money;

(J) items and services for which Landlord is reimbursed by Tenant or others or which Landlord provides selectively to one or more tenants of the Building other than Tenant without reimbursement;

(K) advertising and promotional expenditures;

 

 

 

 

 

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(L) repairs or other work needed because of fire, windstorm, or other casualty or cause insured against by Landlord or to the extent Landlord’s insurance required under Article 5 would have provided insurance, whichever is the greater coverage;

(M) nonrecurring costs incurred to remedy structural defects in original construction materials or installations;

(N) any costs, fines, or penalties incurred because Landlord violated any governmental rule or authority;

(O) costs incurred to test, survey, cleanup, contain, abate, remove, or otherwise remedy hazardous wastes or asbestos-containing materials from the Property unless the wastes or asbestos-containing materials were in or on the Property because of Tenant’s negligence or intentional acts;

(P) other expenses that under generally accepted accounting principles consistently applied would not be considered normal maintenance, repair, management, or operation expenses.

2.02(b). Adjustments. Operating Expenses as defined in paragraph 2.02(a)(iv) shall be adjusted as follows:

(i) Vacancy Adjustment . If, during the term of this Lease, any area of the Building reserved for occupancy by tenants is vacant, Landlord shall pay the Pro Rata Share of the Operating Expenses and Real Estate Taxes allocated to that area. The amount paid by Landlord under this paragraph shall be reduced by the full amount of any reduction in Operating Expenses directly attributable to the vacancy.

(ii) Credits/Reimbursements. Operating Expenses shall be reduced by reimbursements, credits, discounts, reductions, refunds or other allowances received or receivable by Landlord for items of cost included in Operating Expenses, except reimbursements to the Landlord by tenants under the Additional Rent (Operating Expenses/Taxes) provision.

(iii) Increased Building Rentable Square Feet. If Landlord increases the Building’s rentable square feet after the Building was fully assessed as a completed and occupied unit and the Lease was signed, then the Operating Expenses and Real Estate Taxes attributable to the additional rentable square feet shall be included in the Operating Expenses and Real Estate Taxes and Tenant’s pro rata share shall be reduced using the same formula in paragraph 2.02(a)(i).

2.02(c). Payment by Landlord. Subject to reimbursement under subsection 2.02(d), Landlord shall pay the Property’s Operating Expenses and Real Estate Taxes before delinquency.

 

 

 

 

 

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2.02(d). Payment by Tenant.

(i) From and after the commencement date of this Lease, the Tenant shall pay monthly, together with the Rent, Additional Rent in the amount designated in the Reference Data. Landlord reserves the right to adjust the amount of Additional Rent due from Tenant in accordance with the following paragraph (ii).

(ii) On or before January 21 st of each year during the term of this Lease, or as soon thereafter as reasonably practical, Landlord shall deliver to Tenant:

(A) an itemized statement (Statement) showing the amount of Additional Rent received from Tenant together with the Real Estate Taxes and actual Operating Expenses for the prior year broken down by component expenses, such as repairs, management fees, utility charges and janitorial costs; and

(B) a budget showing the estimated cost for Real Estate Taxes and Operating Expenses for the next twelve calendar months and a calculation of the Tenant’s Pro Rata Share of Additional Rent for the next twelve months. Landlord shall supply, upon Tenant’s request, reasonable additional information to explain or support the Statement. Any adjustment of the amount of Additional Rent due from Tenant shall be effective, and paid by the Tenant, with the Monthly Rent payment which is due at least ten (10) days after Tenant’s receipt of a revised Reference Data page for this Lease showing the adjusted amount of Additional Rent due from Tenant.

(iii) If the Statement shows that the amount of Tenant’s pro rata share for the prior year is less than the amount of Additional Rent paid by Tenant during that year, Landlord shall credit the difference to the installment(s) of Rent and Additional Rent next due from Tenant (or, after expiration of the Lease, mail a refund with the statement). If the Statement shows that the amount of Tenant’s pro rata share for the prior year is greater than the amount of Additional Rent paid by Tenant during that year, the difference shall be assessed to Tenant as Additional Rent and shall be due with the installment of Rent which is due thirty (30) days following Landlord’s delivery of an invoice for said assessment to Tenant. Any overpayment or underpayment of Additional Rent, including interest and penalty, shall survive the ending of the Lease.

(iv) For any year in which this Lease is not in effect for the complete calendar year, unless it was ended because of Tenant’s default, Tenant’s obligation for Additional Rent for that year shall be prorated by multiplying Tenant’s pro rata share by a fraction expressed as a percentage, the numerator of which is the number of days of the year included in the Term and the denominator of which is 365.

 

 

 

 

 

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2.03. Personal Property Tax. Tenant shall pay, before they become delinquent, taxes assessed during the Term against trade fixtures or personal property placed by Tenant in the Premises. If these taxes are assessed against the Building, Tenant shall pay its share of the taxes to the Landlord within ten (10) days after receiving Landlord’s written statement setting forth the amount of taxes applicable to Tenant’s property and the basis for the charge to Tenant. Tenant’s failure to pay within the ten-day period shall entitle the Landlord to the same remedies it has upon Tenant’s failure to pay Rent.

2.04. Security Deposit. The Tenant has deposited the amount designated in the Reference Data (Security Deposit) with the Landlord to secure Tenant’s performance of its Lease obligations. If Tenant defaults Landlord may, after giving five (5) days advance notice to Tenant, without prejudice to Landlord’s other remedies, apply part or all of the Security Deposit to cure Tenant’s default. If Landlord so uses part or all of the Security Deposit, then Tenant shall within ten (10) days after written demand, pay Landlord the amount used to restore the Security Deposit to its original amount.

     Any part of the Security Deposit not used by the Landlord as permitted by this section shall be returned to Tenant, without interest, within thirty (30) days after the Lease ends. If Landlord sells the Building then the Landlord shall be relieved of any liability for the Security Deposit and accumulated interest if the requirements of subsection 5.03(a) are met.

2.05. Sales Tax . Tenant shall pay sales, excise or any similar taxes which may be levied against the Rent, Additional Rent, or any other payments due to Landlord under this Lease.

ARTICLE 3 — AFFIRMATIVE OBLIGATIONS

3.01. Compliance with Laws.

3.01(a). Compliance at Commencement. Landlord and Tenant warrant, each to the other, that on the Commencement Date, the Premises and the Tenant’s use of the same, will comply with all applicable laws, ordinances, rules, and regulations of governmental authorities (Applicable Laws). Any failure to comply with the Applicable Laws following notice from the other party and a reasonable period of cure shall constitute a default under this Lease.

3.01(b). Notice of Noncompliance. If there should be a change in the Applicable Laws which would cause either party to be found out of compliance therewith, that party shall immediately notify the other party and undertake all actions necessary to achieve compliance with the changed Laws, subject to the limits in the following subsection 3.01(c).

3.01(c). Compliance Limits. Either party, instead of complying with Applicable Laws as required by subsection 3.01(b), may cancel the Lease by giving prompt notice to the other if:

 

 

 

 

 

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(i) the estimated cost to comply exceeds an amount equal to six months’ current rent

(A) due from Tenant to Landlord if Tenant is not in compliance; or

(B) due from all tenants in the Building then paying rent to Landlord if Landlord is not in compliance;

 

(ii)

 

less than twelve (12) months remain in the Term and Tenant does not have an option to extend the Term.

If either party (Canceling Party) cancels the Lease under (i) above, the other (Complying Party) may, within ten (10) days of receiving the Canceling Party’s notice, agree to achieve compliance with the Applicable Laws at its expense by giving notice to the Canceling Party and this Lease shall continue in effect. If the Complying Party incurs any expense in its exercise of this right, then the Canceling Party shall promptly reimburse the Complying Party the amount of the limit identified for the Canceling Party in (i) above, or the Complying Party’s actual cost of compliance, whichever is less.

3.02. Services and Utilities.

3.02(a). Services. Landlord shall provide at its expense, subject to reimbursement under subsection 2.02(d):

(i) Heating, ventilation, and air conditioning (HVAC) for the Premises during business hours to maintain temperatures for comfortable use and occupancy in light of Tenant’s space plan (Exhibit D);

(ii) Automatic passenger elevators providing adequate service leading to the floor on which the Premises are located;

(iii) Janitorial services to the Premises as specified in Exhibit F;

(iv) Hot and cold water sufficient for drinking, lavatory, toilet, and ordinary cleaning purposes to be drawn from approved fixtures in the Premises if shown on Exhibit D or on the floor on which the Premises are located;

(v) Electricity to the Premises during business hours that provides electric current in reasonable amounts necessary for normal office use, lighting, and HVAC;

(vi) Replacement of lighting tubes, lamp ballasts, and bulbs;

 

 

 

 

 

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(vii) Extermination and pest control when necessary; and

(viii) Maintenance of common areas in a first class manner comparable to other first class office buildings in the area. The maintenance shall include cleaning, HVAC, illumination, snow shoveling, deicing, repairs, replacements, lawn care, and landscaping.

3.02(b). Business Hours . In section 3.02 business hours means:

(i) Monday through Friday, 7:00 a.m. to 7:00 p.m., and

(ii) Saturday, 8:00 a.m. to 1:00 p.m., but excludes the following holidays or the days on which the holidays are designated for observance: New Year’s Day, Memorial Day, July Fourth, Labor Day, Thanksgiving Day, and Christmas Day.

3.02(c). 24 Hour Access. Tenant, its employees, agents, and invitees shall have access to the Premises twenty-four (24) hours a day, seven (7) days a week. During nonbusiness hours Landlord may restrict access by requiring an entry or identification card issued by the Landlord. Landlord shall not be liable for denying entry to any person who does not have the required card.

     Landlord may temporarily close the Building if required because of a life-threatening or Building-threatening situation. Landlord shall use its best efforts to close the Building during nonbusiness hours only. If, however, the Building must be closed during business hours, then the Rent and Additional Rent shall abate during any closing that lasts more than eight (8) consecutive business hours.

3.02(d). Extra Services . Whenever Landlord knows that any tenant (including Tenant) is using extra services because of either nonbusiness-hours use or high electricity consumption installations, the Landlord will directly charge that tenant for the extra use and exclude those charges form Operating Expenses. Extra services include:

(i) NonBusiness-Hours Use . HVAC and electricity required by Tenant during nonbusiness hours shall be supplied upon reasonable advance verbal notice. If more than one tenant directly benefits from these services then the cost shall be allocated proportionately between or among the benefitting tenants based upon the amount of time each tenant benefits and the square footage each leases.

(ii) Excess Utility Use. Tenant shall not place or operate in the Premises any electrically operated equipment or other machinery, other than typewriters, personal computers, adding machines, reproduction machines, and other machinery and equipment normally used in offices, unless Tenant receives Landlord’s advance written consent. Landlord shall not unreasonably withhold or delay its consent. But Landlord

 

 

 

 

 

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may require payment for the extra use of electricity caused by operating this equipment or machinery.

     Landlord may require that special, high electricity consumption installations of Tenant such as computer or reproduction facilities (except personal computers or normal office photocopy machines) be separately ventilated or sub-metered for electrical consumption at Tenant’s cost.

(iii) Payment. Tenant’s charges for the utilities provided under (i) and (ii) above shall be the lesser of:

(A) one hundred and ten percent (110%) of Landlord’s actual cost of labor and utilities; or

(B) the lowest rate charged to any other tenant in the Building for extra services during the calendar year.

Tenant’s failure to pay the charges in (i) and (ii) above within thirty (30) days of receiving a proper and correct invoice shall entitle Landlord to the same remedies it has upon Tenant’s failure to pay Rent.

3.02(e). Interruption of Services.

(i) Interruptions. Landlord does not warrant that any services Landlord supplies will not be interrupted. Services may be interrupted because of accidents, repairs, alterations, improvements, or any reason beyond the reasonable control of the Landlord. Except as noted in (ii) below, any interruption shall not:

(A) be considered an eviction or disturbance of Tenant’s use and possession of the Premises;

(B) make Landlord liable to Tenant for damages;

(C) abate Rent or Additional Rent; or

(D) relieve Tenant from performing Tenant’s Lease obligations.

(ii) Remedy. If any essential services (such as HVAC, passenger elevators, electricity, water) supplied by Landlord are interrupted, and the interruption does not result from the negligence or willful misconduct of Tenant, its employees, invitees, or agents, Tenant shall be entitled to an abatement of Rent and Additional Rent. The abatement shall begin on the third consecutive business day of the interruption or when Tenant stops using the Premises because of the interruption, whichever is later. The abatement shall end on the second day after the services are restored. Tenant shall have the option to cancel the Lease if the interruption unreasonably and materially interferes with Tenant’s use of or access to the Premises for at least thirty (30) consecutive days and Landlord is not exercising its best efforts to restore the services. To exercise this

 

 

 

 

 

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option Tenant must give Landlord notice of the cancellation within ten (10) days from the end of the thirty (30) day period.

3.03. Repairs and Maintenance.

3.03(a). Tenant’s Care of Premises. Tenant shall:

(i) keep the Premises and fixtures in good order;

(ii) make repairs and replacements to the Premises or Building needed because of Tenant’s misuse or primary negligence, except to the extent that the repairs or replacements are covered by Landlord’s insurance or the insurance Landlord is required to carry under Article 5, whichever is greater;

(iii) repair and replace special equipment or decorative treatments installed by or at Tenant’s request and that serve the Premises only, except

(A) to the extent the repairs or replacements are needed because of Landlord’s misuse or primary negligence, and are not covered by Tenant’s insurance or the insurance Tenant is required to carry under Article 5, whichever is greater; or

(B) if the Lease is ended under sections 6.01 (Damage) or 6.02 (Condemnation) or 7.03 (Landlord’s Default); and

(iv) not commit waste.

3.03(b). Landlord’s Repairs. Except for repairs and replacements that Tenant must make under subsection 3.03(a), Landlord shall make all other repairs and replacements to the Premises, common areas and Building (including Building fixtures and equipment).

     Landlord shall make the repairs and replacements to maintain the Building in a first class condition comparable to other first class buildings in the area. This maintenance shall include the roof, foundation, exterior walls, interior structural walls, all structural components, and all systems such as mechanical, electrical, HVAC, and plumbing.

3.03(c). Time for Repairs . Repairs or replacements required under subsections 3.03(a) or 3.03(b) shall be made within a reasonable time (depending on the nature of the repair or replacement needed) after receiving notice or having actual knowledge of the need for a repair or replacement.

 

 

 

 

 

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3.03(d). Surrendering the Premises. Upon the last day of the initial or of the last extension term elected by Tenant (if any), Tenant shall surrender the Premises to Landlord in the same broom clean condition that the Premises were in on the Commencement Date except for:

(i) ordinary wear and tear;

(ii) damage by the elements, fire, and other casualty unless Tenant would be required to repair under subsection 3.03(a);

(iii) condemnation;

(iv) damage arising from any cause not required to be repaired or replaced by Tenant; and

(v) alterations as permitted by this Lease unless consent was conditioned on their removal.

On surrender Tenant shall remove from the Premises its personal property, trade fixtures, and any alterations required to be removed under section 4.01 and repair any damage to the Premises caused by the removal. Any items not removed by Tenant as required above shall be considered abandoned. Landlord may dispose of abandoned items as Landlord chooses and bill the Tenant for the cost of their disposal, minus any revenues received by Landlord for their disposal.

ARTICLE 4 — NEGATIVE OBLIGATIONS

4.01. Alterations.

4.01(a). Definition. “Alterations” means alterations, additions, substitutions, installations, changes, and improvements, but excludes minor decorations and the Improvements Landlord is to make under section 1.05 and Exhibits D and E.

4.01(b). Consent. Tenant shall not make Alterations without the Landlord’s advance written consent. Landlord’s consent shall not be unreasonably withheld or unduly delayed for non-structural interior Alterations to the Premises that do not adversely affect the Building’s appearance, value, or structural strength.

4.01(c). Conditions of consent. Landlord may condition its consent under subsection 4.01(b) on all or any part of the following:

 

 

 

 

 

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(i) Tenant shall furnish Landlord with reasonably detailed plans and specifications of the Alterations;

(ii) The Alterations shall be performed and completed:

(A) in accord with the submitted plans and specifications,
(B) in a workmanlike manner,
(C) in compliance with all Applicable Laws,
(D) using new materials and installations at least equal in quality to the original Building materials and installations,
(E) by not disturbing the quiet possession of the other tenants,
(F) by not interfering with the construction, operation, or maintenance of the Building, and
(G) with due diligence;

(iii) Tenant shall use workers and contractors whom Landlord employs or approves in writing, which approval shall not be unreasonably withheld or unduly delayed;

(iv) Tenant shall modify plans and specifications because of reasonable conditions set by Landlord after reviewing the plans and specifications;

(v) Tenant’s contractors shall carry builder’s risk insurance in an amount then customarily carried by prudent contractors and workers’ compensation insurance for its employees in statutory limits;

(vi) Tenant’s workers or contractors shall work in harmony and not unreasonably interfere with Landlord’s w


 
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