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OFFICE LEASE

Office Lease Agreement

OFFICE LEASE | Document Parties: BEHRINGER HARVARD REIT I  INC | TIC MANAGEMENT SERVICES LP, | BEHRINGER HARVARD EXCHANGE CONCEPTS LP You are currently viewing:
This Office Lease Agreement involves

BEHRINGER HARVARD REIT I INC | TIC MANAGEMENT SERVICES LP, | BEHRINGER HARVARD EXCHANGE CONCEPTS LP

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Title: OFFICE LEASE
Governing Law: Texas     Date: 11/14/2005

OFFICE LEASE, Parties: behringer harvard reit i  inc , tic management services lp  , behringer harvard exchange concepts lp
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                                                                    Exhibit 10.2

 

 

                                BEHRINGER HARVARD

                           TIC MANAGEMENT SERVICES LP,

 

                           ON BEHALF OF THE OWNERS OF

                                   TRAVIS TOWER

                                  ("LANDLORD")

 

 

                     BEHRINGER HARVARD EXCHANGE CONCEPTS LP

                                   ("TENANT")

 

 

                                   1301 TRAVIS

                                  HOUSTON, TEXAS

 

                                  OFFICE LEASE

 

 

<PAGE>

 

                                TABLE OF CONTENTS

 

1.    BASIC LEASE PROVISIONS....................................................1

 

2.    PROJECT...................................................................2

 

3.    TERM......................................................................3

 

4.    RENT......................................................................4

 

5.    USE & OCCUPANCY...........................................................6

 

6.    SERVICES & UTILITIES......................................................7

 

7.    REPAIRS...................................................................9

 

8.    ALTERATIONS...............................................................9

 

9.    INSURANCE................................................................11

 

10.   DAMAGE OR DESTRUCTION....................................................11

 

11.   INDEMNITY................................................................12

 

12.   CONDEMNATION.............................................................13

 

13.   TENANT TRANSFERS.........................................................13

 

14.   LANDLORD TRANSFERS.......................................................14

 

15.   DEFAULT AND REMEDIES.....................................................15

 

16.   SECURITY DEPOSIT.........................................................19

 

17.   MISCELLANEOUS............................................................19

 

 

                                       i

<PAGE>

 

                                      LEASE

 

        Landlord and Tenant enter into this Lease ("Lease") as of the Execution

Date on the following terms, covenants, conditions and provisions:

 

1.       BASIC LEASE PROVISIONS

 

        1.1      BASIC LEASE DEFINITIONS. In this Lease, the following defined

                terms have the meanings indicated.

 

 

        (a)      Execution Date:      November ____, 2005.

 

        (b)      Landlord:            BEHRINGER HARVARD TIC MANAGEMENT SERVICES

                                    LP, ON BEHALF OF THE OWNERS OF TRAVIS TOWER

 

        (c)      Tenant:              BEHRINGER HARVARD EXCHANGE CONCEPTS LP, a

                                    Texas limited partnership

 

         (d)      Building:            1301 Travis

                                    Houston, Texas

                                    deemed to contain: 508,656 rentable square

                                    feet ("RSF")

 

        (e)      Premises:             As described on Exhibit A attached hereto

 

        (f)      Use:                 Any lawful use

 

        (g)      Scheduled Term:      36 months, subject to earlier termination as

                                    provided in this Lease.

 

        (h)      Scheduled

                Commencement Date:   January 1, 2006.

 

        (i)      Base Rent:           The following amounts payable in accordance

                                    with Article 4:

<TABLE>

<CAPTION>

                ----------------------------------------------------------------------------------------------------------

                          MONTHS               ANNUAL RATE PER RSF          ANNUAL BASE RENT          MONTHLY BASE RENT

                ----------------------------------------------------------------------------------------------------------

<S>                        <C>                        <C>                      <C>                         <C>

                          1 - 36                     $16.36                   $500,000.04                 $41,666.67

                ----------------------------------------------------------------------------------------------------------

</TABLE>

 

        (j)      Tenant's Share:      Zero percent (0%).

 

        (k)      Base Year:            The calendar year 2006.

 

        (l)      Security Deposit:    None.

 

        (m)      Notice Address:      For each party, the following address(es):

 

<TABLE>

<CAPTION>

<S>                                                                            <C>

                 ----------------------------------------------------------------------------------------------------------

                                     TO LANDLORD                                           TO TENANT

                ----------------------------------------------------------------------------------------------------------

 

                15601 Dallas Parkway, Suite 600                          15601 Dallas Parkway, Suite 600

                Dallas, Texas 75001                                       Dallas, Texas   75001

                Attn:   Kmeal Winters                                     Attn: Terry Kennon

                Facsimile: (214) 655-1610                                Facsimile: (214) 655-1610

 

                and a copy of notices of default to:

 

                Property Manager

                1301 Travis, Suite 1260

                Houston, Texas   77002

                Facsimile: (713) 651-1214

                ----------------------------------------------------------------------------------------------------------

</TABLE>

 

                                       1

<PAGE>

 

        (n)      Billing Address:     For each party, the following address:

 

<TABLE>

<CAPTION>

<S>                                                                             <C>

                ----------------------------------------------------------------------------------------------------------

                For Landlord                                          For Tenant

                ----------------------------------------------------------------------------------------------------------

 

                c/o Bank One                                          15601 Dallas Parkway, Suite 600

                P.O. Box 974238                                        Dallas, Texas 75001

                Dallas, Texas 75397-2438                              Attn: Terry Kennon

                ----------------------------------------------------------------------------------------------------------

</TABLE>

 

        (o)       Brokers:             None.

 

        (p)      Parking Allotment:   None.

 

        (q)      Liability Limit:     $1,000,000.00 for any one accident or

                                    occurrence.

 

        (r)      Construction

                Allowance:            None

 

        (s)      Business Hours:      From 7:00 a.m. to 7: 00 p.m. on Monday

                                    through Friday and from 7:00 a.m. to 12:00

                                    noon on Saturday, excepting: New Year's Day,

                                     Memorial Day, Independence Day, Labor Day,

                                    Thanksgiving Day and the Friday following,

                                    Christmas Day, and any other holiday

                                     recognized and taken by tenants cumulatively

                                    occupying at least one-half of the Net

                                    Rentable Area of office space of the

                                    Building ("Holidays").

 

2.       PROJECT

 

        2.1      PROJECT. The Land, Building, Common Areas and Premises (as

defined in ss.1 and below) are collectively referred to as the "Project."

 

        2.2      LAND. "Land" means the real property on which the Project,

Building and Common Areas are located, and all other leaseholds, easements or

other interests owned by Landlord in connection with the Project, Building or

Common Areas., whether Landlord's interest in the Land is in fee or is a

leasehold. The Land is subject to expansion or reduction after the Execution

Date.

 

        2.3      BASE BUILDING. "Base Building" means Building Structure and

Mechanical Systems, collectively, defined as follows:

 

        (a)      BUILDING STRUCTURE. "Building Structure" means the foundations,

                floor/ceiling slabs, roofs, exterior walls, exterior glass and

                mullions, columns, beams, shafts (including elevator shafts),

                stairs, stairwells, elevators, Building mechanical, electrical

                and telephone closets, Common Areas, public areas, and any other

                structural components in the Building. The Building Structure

                excludes the Leasehold Improvements (and similar improvements to

                other premises) and the Mechanical Systems.

 

        (b)      MECHANICAL SYSTEMS. "Mechanical Systems" means the mechanical,

                electronic, physical or informational systems generally serving

                the Building or Common Areas, including the sprinkler, plumbing,

                heating, ventilating, air conditioning, lighting,

                communications, security, drainage, sewage, waste disposal,

                vertical transportation, fire/life safety systems.

 

        2.4      COMMON AREAS. Tenant will have a non-exclusive right to use the

Common Areas subject to the terms of this Lease. "Common Areas" means those

interior and exterior common and public areas on the Land and in the Building

(and appurtenant easements) designated by Landlord for the non-exclusive use by

Tenant in common with Landlord, other tenants and occupants, and their

employees, agents and invitees, including any parking facilities serving the

Building that are owned or leased by Landlord.

 

        2.5      PREMISES. Landlord leases to Tenant the Premises subject to the

terms of this Lease. Except as provided elsewhere in this Lease, by taking

possession of the Premises Tenant accepts the Premises in its "as is" condition

and with all faults, and the Premises is deemed in good order, condition, and

repair. The Premises includes the Leasehold Improvements and excludes certain

areas, facilities and systems, as follows:

 

        (a)      LEASEHOLD IMPROVEMENTS. "Leasehold Improvements" means all

                non-structural improvements in the Premises or exclusively

                serving the Premises, and any structural improvements to the

                Building made to accommodate Tenant's particular use of the

                Premises. The Leasehold Improvements may exist in the Premises

                as of the Execution Date, or be installed by Landlord or Tenant

                under this

 

                                       2

<PAGE>

 

                Lease at the cost of either party. The Leasehold Improvements

                 include: (1) interior walls and partitions (including those

                surrounding structural columns entirely or partly within the

                Premises); (2) the interior one-half of walls that separate the

                Premises from adjacent areas designated for leasing; (3) the

                interior drywall on exterior structural walls, and walls that

                separate the Premises from the Common Areas (defined below); (4)

                stairways and stairwells connecting parts of the Premises on

                different floors, except those required for emergency exiting;

                (5) the frames, casements, doors, windows and openings installed

                in or on the improvements described in (1-4), or that provide

                entry/exit to/from the Premises; (6) all hardware, fixtures,

                cabinetry, railings, paneling, woodwork and finishes in the

                Premises or that are installed in or on the improvements

                described in (1-5); (7) if any part of the Premises is on the

                ground floor, the ground floor exterior windows (including

                mullions, frames and glass); (8) integrated ceiling systems

                (including grid, panels and lighting); (9) carpeting and other

                floor finishes; (10) kitchen, rest room, lavatory or other

                similar facilities that exclusively serve the Premises

                (including plumbing fixtures, toilets, sinks and built-in

                 appliances); and (11) the sprinkler, plumbing, heating,

                ventilating, air conditioning, lighting, communications,

                security, drainage, sewage, waste disposal, vertical

                transportation, fire/life safety, and other mechanical,

                electronic, physical or informational systems that exclusively

                serve the Premises, including the parts of each system that are

                connected to the Mechanical Systems (defined below) from the

                common point of distribution for each system to and throughout

                the Premises.

 

        (b)      EXCLUSIONS FROM THE PREMISES. The Premises does not include: (1)

                any areas above the finished ceiling or integrated ceiling

                systems, or below the finished floor coverings that are not part

                of the Leasehold Improvements, (2) janitor's closets, (3)

                stairways and stairwells to be used for emergency exiting or as

                 Common Areas, (4) rooms for Mechanical Systems or connection of

                telecommunications equipment, (5) vertical transportation

                shafts, (6) vertical or horizontal shafts, risers, chases, flues

                or ducts, and (7) any easements or rights to natural light, air

                or view.

 

        2.6      BUILDING STANDARD. "Building Standard" means the minimum or

exclusive type, brand, quality or quantity of materials Landlord designates for

use in the Building from time to time.

 

        2.7      TENANT'S PERSONAL PROPERTY. "Tenant's Personal Property" means

those trade fixtures, furnishings, equipment, work product, inventory,

stock-in-trade and other personal property of Tenant that are not permanently

affixed to the Project in a way that they become a part of the Project and will

not, if removed, impair the value of the Leasehold Improvements that Tenant is

required to deliver to Landlord at the end of the Term under ss.3.3.

 

3.       TERM

 

        3.1      TERM. "Term" means the period that begins on the Commencement

Date and ends on December 31, 2008 (the "Expiration Date"), subject to earlier

termination as may be further provided in this Lease. "Month" means a full

calendar month of the Term.

 

        3.2      HOLDOVER. If Tenant keeps possession of the Premises after the

end of the Term (a "Holdover") without Landlord's prior written consent (which

may be withheld in its sole discretion), then in addition to the remedies

available elsewhere under this Lease or by Law, Tenant will be a tenant at

sufferance and must comply with all of Tenant's obligations under this Lease,

except that during the Holdover Tenant will pay 150% of the monthly Rent last

payable under this Lease, without prorating for any partial month of Holdover.

Tenant shall indemnify and defend Landlord from and against all claims and

damages, both consequential and direct, that Landlord suffers due to Tenant's

failure to return possession of the Premises to Landlord at the end of the Term.

Landlord's deposit of Tenant's Holdover payment will not constitute Landlord's

consent to a Holdover, or create or renew any tenancy.

 

        3.3      CONDITION ON EXPIRATION. By the end of the Term, Tenant will

return possession of the Premises to Landlord vacant, free of Tenant's Personal

Property, in broom-clean condition, and with all Leasehold Improvements in good

working order and repair (excepting ordinary wear and tear), except that Tenant

will remove Tenant's Wiring and those Leasehold Improvements and Alterations

that, when approved by Landlord, were required to be removed at the end of the

Term. If Tenant fails to return possession of the Premises to Landlord in this

condition, Tenant shall reimburse Landlord for the costs incurred to put the

Premises in the condition required

 

                                       3

<PAGE>

 

under this ss.3.3, including Landlord's standard administration fee. Tenant's

Personal Property left behind in the Premises after the end of the Term will be

considered abandoned and Landlord may move, store, retain or dispose of these

items at Tenant's cost, including Landlord's standard administration fee.

 

4.       RENT

 

        4.1      BASE RENT. During the Term, Tenant shall pay all Base Rent in

advance, in monthly installments, on the 1st of each calendar month. Base Rent

for any partial month will be prorated.

 

        4.2      ADDITIONAL RENT. Tenant's obligation, if any, to pay Taxes and

Expenses under this ss.4.2 is referred to in this Lease as "Additional Rent."

 

        (a)       TAXES. For each calendar year after the Base Year (each, a

                "Comparison Year"), Tenant shall pay as in the manner described

                below the Tenant's Share of the amount that Taxes for the

                Comparison Year exceed Taxes for the Base Year. "Taxes" means

                the total costs incurred by Landlord for: (1) real and personal

                property taxes and assessments (including ad valorem and special

                assessments) levied on the Project and Landlord's personal

                property used in connection with the Project; (2) taxes on rents

                or other income derived from the Building; (3) capital and

                place-of-business taxes; (4) taxes, assessments or fees in lieu

                 of the taxes described in (1-3); and (5) the reasonable costs

                incurred to reduce the taxes described in (1-4). Taxes excludes

                net income taxes and taxes paid under ss.4.3.

 

        (b)      EXPENSES. For each Comparison Year, Tenant shall pay in the

                manner described below the Tenant's Share of the amount that

                Expenses for the Comparison Year exceed Expenses for the Base

                Year. "Expenses" means the total costs incurred by Landlord to

                operate, manage, administer, equip, secure, protect, repair,

                replace, refurbish, clean, maintain, decorate and inspect the

                Project, including a market fee to manage the Project of not

                 less than three percent (3%) of the gross revenue of the

                Project. Expenses that vary with occupancy will be calculated as

                if the Building is 100% occupied and operating and all such

                services are provided to all tenants.

 

                (1)      Expenses include:

 

                        (A)      Standard Services provided under ss.6.1;

 

                        (B)      Repairs and maintenance performed under ss.7.2;

 

                        (C)      Insurance maintained under ss.11.1 (including

                                deductibles paid);

 

                        (D)      Wages, salaries and benefits of personnel to the

                                extent they render services to the Project;

 

                         (E)      Costs of operating the Project management office

                                (including reasonable rent);

 

                        (F)      Amortization installments of costs required to

                                be capitalized and incurred to:

 

                                (i)      Comply with laws ("Government Mandated

                                        Expenses");

 

                                (ii)     Reduce other Expenses or the rate of

                                         increase in other Expenses ("Cost-Saving

                                        Expenses"); or

 

                                (iii)    Improve or maintain the safety, health

                                        or access of Project occupants, and

                                        otherwise maintain the quality,

                                        appearance, or integrity of the Project

                                        ("Well-Being Expenses").

 

                (2)       Expenses exclude:

 

                        (A)      Taxes;

 

                        (B)      Mortgage payments (principal and interest), and

                                ground lease rent;

 

                        (C)      Commissions, advertising costs, attorney's fees

                                and costs of improvements in connection with

                                leasing space in the Building;

 

                        (D)      Costs reimbursed by insurance proceeds or

                                 tenants of the Building (other than as

                                Additional Rent);

 

                                       4

<PAGE>

 

                        (E)      Depreciation;

 

                        (F)      Except for the costs identified in

                                ss.4.2(b)(1)(F), costs required to be

                                capitalized according to sound real estate

                                accounting and management principles,

                                consistently applied;

 

                        (G)      Collection costs and legal fees paid in disputes

                                with tenants;

 

                        (H)      Costs to maintain and operate the entity that is

                                 Landlord (as opposed to operation and

                                maintenance of the Project); and

 

                        (I)      In the Base Year, only, installments of costs

                                amortized under subsection (c) of this ss.4.2;

                                and

 

                        (J)      Costs of operating the parking facilities.

 

        (c)      AMORTIZATION AND ACCOUNTING PRINCIPLES.

 

                (1)      Each item of Government Mandated Expenses and Well-Being

                        Expenses will be fully amortized in equal annual

                        installments, with interest on the principal balance at

                        Amortization Rate, over the number of years, not to

                         exceed 10, that Landlord projects the item of Expenses

                        will be productive for its intended use, without

                        replacement, but properly repaired and maintained.

 

                (2)      Each item of Cost-Saving Expenses will be fully

                        amortized in equal annual installments, with interest on

                        the principal balance at the Amortization Rate, over the

                        number of years that Landlord reasonably estimates for

                        the present value of the projected savings in Expenses

                        (discounted at the Amortization Rate) to equal the cost.

 

                (3)      Any item of Expenses of significant cost that is not

                         required to be capitalized but is unexpected or does not

                        typically recur may, in Landlord's discretion, be

                        amortized in equal annual installments, with interest on

                        the principal balance at the Amortization Rate, over a

                        number of years determined by Landlord.

 

                (4)      "Amortization Rate" means the prime rate of Citibank,

                        N.A. (or a comparable financial institution selected by

                        Landlord), plus 3%.

 

                (5)      Landlord will otherwise use sound real estate accounting

                        and management principles, consistently applied, to

                        determine Additional Rent.

 

        (d)      ESTIMATES. Landlord will reasonably estimate Additional Rent

                each calendar year that Additional Rent may be payable. Tenant

                will pay the estimated Additional Rent in advance, in monthly

                 installments, on the first day of each month, until the estimate

                is revised by Landlord. Landlord may reasonably revise its

                estimate during a calendar year and the monthly installments

                after the revision will paid based on the revised estimate. The

                aggregate estimates of Additional Rent paid by Tenant in a

                calendar year is the "Estimated Additional Rent."

 

        (e)      SETTLEMENT. As soon as practical after the end of each calendar

                year that Additional Rent is payable, Landlord will give Tenant

                a statement of the actual Additional Rent for the calendar year.

                The statement of Additional Rent is conclusive, binds Tenant,

                 and Tenant waives all rights to contest the statement, except

                for items of Additional Rent to which Tenant objects by notice

                to Landlord given within 90 days after receipt of Landlord's

                statement; however, Tenant's objection will not relieve Tenant

                from its obligation to pay Additional Rent pending resolution of

                any objection. If the Additional Rent exceeds the Estimated

                Additional Rent for the calendar year, then Tenant shall pay the

                underpayment to Landlord in a lump sum as Rent within 30 days

                after receipt of Landlord's statement of Additional Rent. If the

                Estimated Additional Rent exceeds the Additional Rent for the

                calendar year, then Landlord shall credit the overpayment

                against Rent next due. However, if the Term ends during a

                calendar year, then Landlord may, in Landlord's sole discretion,

                 elect either of the following: (1) to forego the settlement of

                Additional Rent for the calendar year that is otherwise required

                and accept the Estimated Additional Rent payable in the calendar

                year in satisfaction of Tenant's obligations to pay Additional

                Rent for the final

 

                                       5

<PAGE>

 

                calendar year, or (2) to have Landlord's and Tenant's

                obligations under this ss.4.2(e) survive the end of the Term.

 

        4.3      OTHER TAXES. Upon demand, Tenant will reimburse Landlord for

taxes paid by Landlord on (a) Tenant's Personal Property, (b) Rent, (c) Tenant's

occupancy of the Premises, or (d) this Lease. If Tenant cannot lawfully

reimburse Landlord for these taxes, then the Base Rent will be increased to

yield to Landlord the same amount after these taxes were imposed as Landlord

would have received before these taxes were imposed.

 

        4.4      TERMS OF PAYMENT. "Rent" means all amounts payable by Tenant

under this Lease. If a time for payment of an item of Rent is not specified in

this Lease, then Tenant will pay Rent within 30 days after receipt of Landlord's

statement or invoice. Unless otherwise provided in this Lease, Tenant shall pay

Rent without notice, demand, deduction, abatement or setoff, in lawful U.S.

currency, at Landlord's Billing Address. Landlord will send invoices payable by

Tenant to Tenant's Billing Address; however, neither Landlord's failure to send

an invoice nor Tenant's failure to receive an invoice for Rent will relieve

Tenant of its obligation to timely pay Rent. Each partial payment by Tenant

shall be deemed a payment on account; and, no endorsement or statement on any

check or any accompanying letter shall constitute an accord and satisfaction, or

affect Landlord's right to collect the full amount due. No payment by Tenant to

Landlord will be deemed to extend the Term or render any notice, pending suit or

judgment ineffective. By notice to the other, each party may change its Billing

Address.

 

        4.5      LATE PAYMENT. If Landlord does not receive all or part of any

item of Rent within ten (10) days after same becomes due, then Tenant shall pay

Landlord a "Late Charge" of 5% of the overdue amount. Tenant agrees that the

Late Charge is not a penalty, and will compensate Landlord for costs not

contemplated under this Lease that are impracticable or extremely difficult to

fix. Landlord's acceptance of a Late Charge does not waive Tenant's default.

 

        4.6      WAIVER OF TENANT RIGHTS AND BENEFITS UNDER SECTION 93.012, TEXAS

PROPERTY CODE. Landlord and Tenant are knowledgeable and experienced in

commercial leasing transactions and agree that the provisions of this Lease for

determining all charges and amounts payable by Tenant are commercially

reasonable and valid even though such methods may not state a precise

mathematical formula for determining such charges. Accordingly, Tenant

voluntarily and knowingly waives all rights and benefits of a tenant under

Section 93.012, Texas Property Code, as such section now exists or as may be

hereafter amended or succeeded. Nothing contained in this waiver however is

intended to limit or impair Tenant's audit rights granted hereunder, or except

as otherwise expressly set forth in this Lease to the contrary, any other remedy

available to Tenant under the Lease or law or in equity (other than Section

93.012, Texas Property Code). In addition, nothing in this ss.4.7 shall

constitute a waiver of Tenant's right to dispute and/or initiate a claim

disputing Landlord's calculation or determination of Rent.

 

5.       USE & OCCUPANCY

 

        5.1      USE. Tenant shall use and occupy the Premises only for the Use.

Landlord does not represent or warrant that the Project is suitable for the

conduct of Tenant's particular business.

 

        5.2      COMPLIANCE WITH LAWS AND DIRECTIVES.

 

        (a)      TENANT'S COMPLIANCE. Subject to the remaining terms of this

                Lease, Tenant shall comply at Tenant's expense with all

                directives of Landlord's insurers or laws concerning:

 

                (1)      The Leasehold Improvements and Alterations,

 

                (2)      Tenant's use or occupancy of the Premises,

 

                (3)      Tenant's employer/employee obligations,

 

                (4)      A condition created by Tenant,

 

                (5)      Tenant's failure to comply with this Lease or its

                        invitees,

 

                (6)      The negligence of Tenant, the Tenant Parties, or

                        Tenant's Affiliates or contractors, or

 

                (7)      Any chemical wastes, contaminants, pollutants or

                        substances that are hazardous, toxic, infectious,

                        flammable or dangerous, or regulated by any local, state

                        or federal statute, rule, regulation or ordinance for

                        the protection of health or the environment ("Hazardous

 

                                       6

<PAGE>

 

                         Materials") that are introduced to the Project, handled

                        or disposed by Tenant or its Affiliates, or any of their

                        contractors.

 

        (b)      LANDLORD'S COMPLIANCE. Subject to the remaining terms of this

                Lease, Landlord shall comply at Landlord's cost with all

                directives of Landlord's insurers or laws concerning the Project

                other than those that are Tenant's obligation under subsection

                 (a). The costs of compliance under this subsection (b) will be

                included in Expenses to the extent allowed under ss.4.2.

 

        5.3      OCCUPANCY. Tenant shall not interfere with Building services or

other tenants' rights to quietly enjoy their respective premises or the Common

Areas. Tenant shall not make or continue any nuisance, including any

objectionable odor, noise, fire hazard, vibration, or wireless or

electromagnetic transmission. Tenant's will not maintain any Leasehold

Improvements or use the Premises in a way that increases the cost of insurance

required under ss.9.2, or requires insurance in addition to the coverage

required under ss.9.2.

 

        5.4      PROHIBITED PERSONS AND TRANSACTIONS. Tenant represents and

warrants to Landlord that (a) Tenant is currently in compliance with and shall

at all times during the Scheduled Term (including any extension thereof) remain

in compliance with the regulations of the Office of Foreign Asset Control

("OFAC") of the Department of the Treasury (including those named on the OFAC's

Specially Designated and Blocked Persons List) and any statute, executive order

(including the September 24, 2001, Executive Order No. 13224 Blocking Property

and Prohibiting Transactions with Persons Who Commit, Threaten to Commit or

Support Terrorism (the "Executive Order")), or other governmental action

relating thereto; and (b) Tenant is not, and will not be, a person with whom

Landlord is restricted from doing business under the Uniting and Strengthening

America by Providing Appropriate Tools Required to Intercept and Obstruct

Terrorist Act of 2001 (USA Patriot Act), H.R. 3152, Public Law 107-56 and the

Executive Order and regulations promulgated hereunder and including persons and

entities named on the OFAC Specially Designated Nations and Blocked Persons

List.

 

6.       SERVICES & UTILITIES

 

        6.1      STANDARD SERVICES.

 

        (a)      STANDARD SERVICES DEFINED. "Standard Services" means:

 

                (1)      Heating, ventilation and air-conditioning ("HVAC")

                        during Business Hours as reasonably required to

                        comfortably use and occupy the Premises and interior

                        Common Areas;

 

                (2)      Tempered water from the public utility for use in Common

                        Areas rest rooms;

 

                (3)      Janitorial services to the Premises and interior Common

                        Areas 5 days a week, except Holidays, to the extent

                        reasonably determined by Landlord;

 

                (4)      Access to the Premises (by at least 1 passenger elevator

                        if not on the ground floor);

 

                (5)      Building standard bulbs are provided to Tenant,

                         specialty bulbs will be billed to Tenant;

 

                (6)      Labor to replace fluorescent tubes and ballasts in

                        Building Standard light fixtures in the Premises; and

 

                (7)      Electricity from Landlord's selected provider(s) for

                        lighting in the Common Areas and as follows from

                        convenience outlets in the Premises: Building Standard

                        lighting, Building Standard HVAC and the operation of

                         customary quantities and types of office equipment

                        (excluding data processing), so long as (i) the

                        connected load does not exceed five (5) watts per RSF of

                        the Premise, and (ii) any item of electrical equipment

                        does not (singly) consume more than 500 watts per hour

                        at rated capacity or require a voltage other than one

                        hundred twenty (120) volts single phase.

 

        (b)      STANDARD SERVICES PROVIDED. During the Term, Landlord shall

                provide the Standard Services to Tenant. The cost of the

                Standard Services is included in Expenses. Landlord is not

                responsible for any inability to provide Standard Services due

                to either: the concentration of personnel or equipment in the

                Premises; or Tenant's use of equipment in the Premises that is

                not customary office equipment, has special cooling

                requirements, or generates heat.

 

                                       7

<PAGE>

 

        6.2      ADDITIONAL SERVICES. Unless Tenant obtains Landlord's prior

written consent, Tenant will not use utilities or services in excess of the

Standard Services. If Landlord so consents, Landlord may provide utilities and

services in excess of the Standard Services subject to the following however, if

Tenant shall fail to pay for such Additional Services, in addition to Landlord's

other remedies under the Lease, Landlord may discontinue the Additional

Services:

 

        (a)      HVAC. If Tenant requests HVAC service to the Premises during

                non-Business Hours, Tenant will give Landlord at least 24 hour

                 notice of same, and Tenant will pay as Rent Landlord's scheduled

                rate for this service.

 

        (b)      LIGHTING. Landlord will furnish both Building Standard and

                non-Building Standard lamps, bulbs, ballasts and starters that

                are part of the Leasehold Improvements for purchase by Tenant at

                Landlord's cost, plus Landlord's standard administration fee.

                Landlord will install non-Building Standard items at Landlord's

                 scheduled rate for this service.

 

        (c)      OTHER UTILITIES AND SERVICES. Tenant will pay as Rent the actual

                cost of utilities or services (other than HVAC and lighting

                addressed in (a) and (b)) either used by Tenant or provided at

                Tenant's request in excess of that provided as part of the

                Standard Services, plus Landlord's standard administration fee.

                Tenant's excess consumption may be estimated by Landlord unless

                either Landlord requires or Tenant elects to install Building

                Standard meters to measure Tenant's consumption.

 

        (d)      ADDITIONAL SYSTEMS AND METERING. Landlord may require Tenant, at

                Tenant's expense, to upgrade or modify existing Mechanical

                Systems serving the Premises or the Leasehold Improvements to

                the extent necessary to meet Tenant's excess requirements

                (including installation of Building Standard meters to measure

                the same).

 

        6.3      ALTERNATE ELECTRICAL BILLING. Landlord may elect at any time

during the Term after the Base Year, and continuing for the remainder of the

Term, to separately meter Tenant's total consumption of electricity in the

Premises, including lighting and convenience outlets. If Landlord so elects,

then Landlord shall notify Tenant of such election and in lieu of including

consumption of electricity of tenanted premises in Expenses, Tenant shall pay to

Landlord as Rent the actual cost of Tenant's electricity consumption to the

extent that it exceeds Tenant's Proportional Share of the consumption of

electricity of tenanted premises in the Base Year (as reasonably estimated by

Landlord if this consumption was not then separately metered), plus Landlord's

standard administration fee.

 

        6.4      TELECOMMUNICATIONS SERVICES. Tenant will contract directly with

third party providers and will be solely responsible for paying for all

telephone, data transmission, video and other telecommunication services

("Telecommunication Services") subject to the following:

 

        (a)      PROVIDERS. Each Telecommunications Services provider that does

                not already provide service to the Building shall be subject to

                Landlord's approval, which Landlord may withhold in Landlord's

                sole discretion. Without liability to Tenant, the license of any

                Telecommunications Services provider servicing the Building may

                 be terminated under the terms of the license, or not renewed

                upon the expiration of the license.

 

        (b)      TENANT'S WIRING. Landlord may, in its sole discretion, designate

                the location of all wires, cables, fibers, equipment, and

                connections ("Tenant's Wiring") for Tenant's Telecommunications

                Services, restrict and control access to telephone cabinets and

                rooms. Tenant may not use or access the Base Building, Common

                Areas or roof for Tenant's Wiring without Landlord's prior

                written consent, which Landlord may withhold in Landlord's sole

                discretion, or for which Landlord may charge a fee determined by

                 Landlord.

 

        (c)      TENANT SOLE BENEFICIARY. This ss.6.4 is solely for Tenant's

                benefit, and no one else shall be consid


 
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