Exhibit 10.6
RAINIER PLAZA
BELLEVUE,
WASHINGTON
OFFICE LEASE
AGREEMENT
BETWEEN
EOP-NORTHWEST PROPERTIES,
L.L.C.,
a Delaware limited liability
company
(“LANDLORD”)
AND
SAFLINK CORPORATION, a Delaware
corporation
(“TENANT”)
TABLE OF CONTENTS
|
|
|
|
|
|
|
I.
|
|
BASIC LEASE INFORMATION
|
|
1
|
|
|
|
|
|
II.
|
|
LEASE GRANT
|
|
3
|
|
|
|
|
|
III.
|
|
ADJUSTMENT OF COMMENCEMENT DATE;
POSSESSION
|
|
3
|
|
|
|
|
|
IV.
|
|
RENT
|
|
3
|
|
|
|
|
|
V.
|
|
COMPLIANCE WITH LAWS; USE
|
|
7
|
|
|
|
|
|
VI.
|
|
SECURITY DEPOSIT
|
|
7
|
|
|
|
|
|
VII.
|
|
SERVICES TO BE FURNISHED BY LANDLORD
|
|
7
|
|
|
|
|
|
VIII.
|
|
LEASEHOLD IMPROVEMENTS
|
|
8
|
|
|
|
|
|
IX.
|
|
REPAIRS AND ALTERATIONS
|
|
8
|
|
|
|
|
|
X.
|
|
USE OF ELECTRICAL SERVICES BY TENANT
|
|
9
|
|
|
|
|
|
XI.
|
|
ENTRY BY LANDLORD
|
|
10
|
|
|
|
|
|
XII.
|
|
ASSIGNMENT AND SUBLETTING
|
|
10
|
|
|
|
|
|
XIII.
|
|
LIENS
|
|
11
|
|
|
|
|
|
XIV.
|
|
INDEMNITY AND WAIVER OF CLAIMS
|
|
11
|
|
|
|
|
|
XV.
|
|
INSURANCE
|
|
12
|
|
|
|
|
|
XVI.
|
|
SUBROGATION
|
|
12
|
|
|
|
|
|
XVII.
|
|
CASUALTY DAMAGE
|
|
13
|
|
|
|
|
|
XVIII.
|
|
CONDEMNATION
|
|
13
|
|
|
|
|
|
XIX.
|
|
EVENTS OF DEFAULT
|
|
14
|
|
|
|
|
|
XX.
|
|
REMEDIES
|
|
14
|
|
|
|
|
|
XXI.
|
|
LIMITATION OF LIABILITY
|
|
15
|
|
|
|
|
|
XXII.
|
|
NO WAIVER
|
|
15
|
|
|
|
|
|
XXIII.
|
|
QUIET ENJOYMENT
|
|
15
|
|
|
|
|
|
XXIV.
|
|
RELOCATION
|
|
16
|
|
|
|
|
|
XXV.
|
|
HOLDING OVER
|
|
16
|
|
|
|
|
|
XXVI.
|
|
SUBORDINATION TO MORTGAGES; ESTOPPEL
CERTIFICATE
|
|
16
|
|
|
|
|
|
XXVII.
|
|
ATTORNEYS’ FEES
|
|
16
|
|
|
|
|
|
XXVIII.
|
|
NOTICE
|
|
16
|
|
|
|
|
|
XXIX.
|
|
EXCEPTED RIGHTS
|
|
17
|
|
|
|
|
|
XXX.
|
|
SURRENDER OF PREMISES
|
|
17
|
|
|
|
|
|
XXXI.
|
|
MISCELLANEOUS
|
|
17
|
|
|
|
|
|
XXXII.
|
|
ENTIRE AGREEMENT
|
|
19
|
i
OFFICE LEASE
AGREEMENT
This Office Lease Agreement (the
“Lease”) is made and entered into as of the 14
th
day of March, 2003, by
and between EOP-NORTHWEST PROPERTIES, L.L.C., a Delaware limited
liability company (“Landlord”), and SAFLINK
CORPORATION, a Delaware corporation
(“Tenant”).
|
I.
|
Basic Lease
Information.
|
|
|
A.
|
“Building” shall mean the building
located at 777 108th Avenue NE, Bellevue, Washington, and commonly
known as Rainier Plaza.
|
|
|
B.
|
“Rentable
Square Footage of the Building” is deemed to be 431,233
square feet.
|
|
|
C.
|
“Premises” shall mean the area shown
on Exhibit A to this Lease. The Premises are located on
floor 21 and known as suite number 2100. The “Rentable Square
Footage of the Premises” is deemed to be 9,569 square feet,
which square footage was calculated according to BOMA ANSI-Z65.1
(1996) standards. If the Premises include one or more floors in
their entirety, all corridors and restroom facilities located on
such full floor(s) shall be considered part of the Premises.
Landlord and Tenant stipulate and agree that the Rentable Square
Footage of the Building and the Rentable Square Footage of the
Premises are correct and shall not be remeasured.
|
|
|
|
|
|
|
|
|
|
|
|
|
Months of Term
|
|
Annual Rate
Per Square Foot
|
|
Annual
Base Rent
|
|
Monthly
Base Rent
|
|
Months 1 – 12
|
|
$
|
22.50
|
|
$
|
215,302.56
|
|
$
|
17,941.88
|
|
|
|
|
|
|
Months 13 – 24
|
|
$
|
22.75
|
|
$
|
217,694.76
|
|
$
|
18,141.23
|
|
|
|
|
|
|
Months 25 – 38
|
|
$
|
23.00
|
|
$
|
220,086.96
|
|
$
|
18,340.58
|
|
|
|
Notwithstanding
the Base Rent schedule set forth above, as long as Tenant is not in
default, Tenant shall be entitled to an abatement of Base Rent in
the approximate amount of $598.06 per day for the first 30
consecutive calendar days of the Term (the “Rent Abatement
Period”). The total amount of Base Rent abated during the
Rent Abatement Period shall equal Seventeen Thousand Nine Hundred
Forty-one and 88/100 Dollars ($17,941.88) (the “Abated Base
Rent”). During the Rent Abatement Period, all other costs and
charges specified in this Lease shall remain as due and payable
pursuant to the provisions of this Lease. In the event Tenant
defaults at any time during the Term, all Abated Base Rent shall
immediately become due and payable. The payment by Tenant of the
Abated Base Rent in the event of a default shall not limit or
affect any of Landlord’s other rights, pursuant to this Lease
or at law or in equity.
|
|
|
E.
|
“Tenant’s Pro Rata Share”:
2.2190%.
|
|
|
F.
|
“Base
Year” for Taxes: 2003; “Base Year” for Expenses:
2003.
|
|
|
G.
|
“Term”: A period of 38 months and 0
days. The Term shall commence on April 1, 2003 (the
“Commencement Date”), and, unless terminated early in
accordance with this Lease, end on May 31, 2006 (the
“Termination Date”). However, if Landlord is required
to Substantially Complete (defined in Section III.A) any Landlord
Work (defined in Section I.O.) prior to the Commencement Date under
the terms of a Work Letter (defined in Section I.O): (1) the date
set forth in the prior sentence as the “Commencement
Date” shall instead be defined as the “Target
Commencement Date” by which date Landlord will use reasonable
efforts to Substantially Complete the Landlord Work; and (2) the
actual “Commencement Date” shall be the date on which
the Landlord Work is Substantially Complete, as determined by
Section III.A. In such circumstances, the Termination Date will
instead be the last day of the Term as determined based upon the
actual Commencement Date. Landlord’s failure to Substantially
Complete the Landlord Work by the Target Commencement Date shall
not be a default by Landlord or otherwise render Landlord liable
for damages. Promptly
|
1
|
|
|
after the
determination of the Commencement Date, Landlord and Tenant shall
enter into a commencement letter agreement in the form attached as
Exhibit C .
|
|
|
H.
|
Tenant
allowance(s): $57,414.00 (i.e., $6.00 per rentable square foot of
the Premises), as more particularly described in Exhibit D
hereof.
|
|
|
I.
|
“Security
Deposit”: $18,340.58.
|
|
|
J.
|
“Guarantor(s)”: None as of the date
of this Lease.
|
|
|
K.
|
“Broker”: The Staubach Company and
Equity Office Properties Management Corporation
|
|
|
L.
|
“Permitted Use”: general office
use.
|
|
|
|
On and after
the Commencement Date, notices shall be sent to Tenant at the
Premises. Prior to the Commencement Date, notices shall be sent to
Tenant at the following address:
|
|
|
|
|
|
Landlord:
|
|
With a copy to:
|
|
|
|
|
EOP-Northwest Properties,
L.L.C.
c/o Equity Office Properties
Trust
777 108th Avenue N.E., Suite
2050
Bellevue, Washington
98004
Attention: Building
Manager
|
|
Equity Office Properties
Two North Riverside Plaza
Suite 2200
Chicago, Illinois 60606
Attention: Regional
Counsel
|
|
|
|
Rent (defined
in Section IV.A) is payable to the order of Equity Office
Properties at the following address:
|
EOP-Northwest Properties,
L.L.C.
Rainier Plaza
Department 11610 - (Lease
Id)
PO Box 23044
Chicago, Illinois 60673
|
|
N.
|
“Business
Day(s)” are Monday through Friday of each week, exclusive of
New Year’s Day, President’s Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day
(“Holidays”). Landlord may designate additional
Holidays, provided that the additional Holidays are commonly
recognized by other office buildings in the area where the Building
is located.
|
|
|
O.
|
“Landlord
Work” means the work that Landlord is obligated to perform in
the Premises pursuant to a separate work letter agreement (the
“Work Letter”) attached as Exhibit D
.
|
|
|
P.
|
“Law(s)” means all applicable
statutes, codes, ordinances, orders, rules and regulations of any
municipal or governmental entity.
|
|
|
Q.
|
“Normal
Business Hours” for the Building are 7:00 A.M. to 6:00 P.M.
on Business Days and 8:00 A.M. to 1:00 P.M. on
Saturdays.
|
|
|
R.
|
“Property” means the Building and
the parcel(s) of land on which it is located and, at
Landlord’s discretion, the Building garage and other
improvements serving the Building, if any, and the parcel(s) of
land on which they are located.
|
2
Landlord leases the Premises to
Tenant and Tenant leases the Premises from Landlord, together with
the right in common with others to use any portions of the Property
that are designated by Landlord for the common use of tenants and
others, such as sidewalks, unreserved parking areas, common
corridors, elevator foyers, restrooms, vending areas and lobby
areas (the “Common Areas”).
|
III.
|
Adjustment
of Commencement Date; Possession.
|
|
|
A.
|
The Landlord
Work shall be deemed to be “Substantially Complete” on
the date that all Landlord Work has been performed, other than any
details of construction, mechanical adjustment or any other similar
matter, the noncompletion of which does not materially interfere
with Tenant’s use of the Premises. However, if Landlord is
delayed in the performance of the Landlord Work as a result of any
Tenant Delay(s) (defined below), the Landlord Work shall be deemed
to be Substantially Complete on the date that Landlord could
reasonably have been expected to Substantially Complete the
Landlord Work absent any Tenant Delay. “Tenant Delay”
means any act or omission of Tenant or its agents, employees,
vendors or contractors that actually delays the Substantial
Completion of the Landlord Work, including, without limitation: (1)
Tenant’s failure to furnish information or approvals within
any time period specified in this Lease, including the failure to
prepare or approve preliminary or final plans by any applicable due
date; (2) Tenant’s selection of equipment or materials that
have long lead times after first being informed by Landlord that
the selection may result in a delay; (3) changes requested or made
by Tenant to previously approved plans and specifications; (4)
performance of work in the Premises by Tenant or Tenant’s
contractor(s) during the performance of the Landlord Work; or (5)
if the performance of any portion of the Landlord Work depends on
the prior or simultaneous performance of work by Tenant, a delay by
Tenant or Tenant’s contractor(s) in the completion of such
work.
|
|
|
B.
|
Subject to
Landlord’s obligation, if any, to perform Landlord Work and
Landlord’s obligations under Section IX.B., the Premises are
accepted by Tenant in “as is” condition and
configuration. By taking possession of the Premises, Tenant agrees
that the Premises are in good order and satisfactory condition, and
that there are no representations or warranties by Landlord
regarding the condition of the Premises or the Building. If
Landlord is delayed delivering possession of the Premises or any
other space due to the holdover or unlawful possession of such
space by any party, Landlord shall use reasonable efforts to obtain
possession of the space. If Landlord is not required to
Substantially Complete Landlord Work before the Commencement Date,
the Commencement Date shall be postponed until the date Landlord
delivers possession of the Premises to Tenant free from occupancy
by any party, and the Termination Date, at the option of Landlord,
may be postponed by an equal number of days. If Landlord is
required to Substantially Complete Landlord Work before the
Commencement Date, the Commencement Date and Termination Date shall
be determined by Section I.G.
|
|
|
C.
|
If Tenant takes
possession of the Premises before the Commencement Date, such
possession shall be subject to the terms and conditions of this
Lease and Tenant shall pay Rent (defined in Section IV.A.) to
Landlord for each day of possession before the Commencement Date.
However, except for the cost of services requested by Tenant (e.g.
freight elevator usage), Tenant shall not be required to pay Rent
for any days of possession before the Commencement Date during
which Tenant, with the approval of Landlord, is in possession of
the Premises for the sole purpose of performing improvements or
installing furniture, equipment or other personal
property.
|
|
|
A.
|
Payments . As consideration for this Lease, Tenant shall
pay Landlord, without any setoff or deduction, the total amount of
Base Rent and Additional Rent due for the Term. “Additional
Rent” means all sums (exclusive of Base Rent) that Tenant is
required to pay Landlord. Additional Rent and Base Rent are
sometimes collectively referred to as “Rent”. Tenant
shall pay and be liable for all rental, sales and use taxes (but
excluding income taxes), if any, imposed upon or measured by Rent
under applicable Law. Base Rent and recurring monthly charges of
Additional Rent shall be due and payable in advance on the first
day of each calendar month without notice or demand, provided that
the installment of Base Rent for the first full calendar month of
the Term shall be payable upon
|
3
|
|
|
the execution
of this Lease by Tenant. All other items of Rent shall be due and
payable by Tenant on or before 30 days after billing by Landlord.
All payments of Rent shall be by good and sufficient check or by
other means (such as automatic debit or electronic transfer)
acceptable to Landlord. If Tenant fails to pay any item or
installment of Rent when due, Tenant shall pay Landlord an
administration fee equal to 5% of the past due Rent, provided that
Tenant shall be entitled to a grace period of 5 days for the first
2 late payments of Rent in a given calendar year. If the Term
commences on a day other than the first day of a calendar month or
terminates on a day other than the last day of a calendar month,
the monthly Base Rent and Tenant’s Pro Rata Share of any Tax
Excess (defined in Section IV.B.) or Expense Excess (defined in
Section IV.B.) for the month shall be prorated based on the number
of days in such calendar month. Landlord’s acceptance of less
than the correct amount of Rent shall be considered a payment on
account of the earliest Rent due. No endorsement or statement on a
check or letter accompanying a check or payment shall be considered
an accord and satisfaction, and either party may accept the check
or payment without prejudice to that party’s right to recover
the balance or pursue other available remedies. Tenant’s
covenant to pay Rent is independent of every other covenant in this
Lease.
|
|
|
B.
|
Expense
Excess and Tax Excess .
Tenant shall pay Tenant’s Pro Rata Share of the amount, if
any, by which Expenses (defined in Section IV.C.) for each calendar
year during the Term exceed Expenses for the Base Year (the
“Expense Excess”) and also the amount, if any, by which
Taxes (defined in Section IV.D.) for each calendar year during the
Term exceed Taxes for the Base Year (the “Tax Excess”).
If Expenses and/or Taxes in any calendar year decrease below the
amount of Expenses and/or Taxes for the Base Year, Tenant’s
Pro Rata Share of Expenses and/or Taxes, as the case may be, for
that calendar year shall be $0. Landlord shall provide Tenant with
a good faith estimate of the Expense Excess and of the Tax Excess
for each calendar year during the Term. On or before the first day
of each month, Tenant shall pay to Landlord a monthly installment
equal to one-twelfth of Tenant’s Pro Rata Share of
Landlord’s estimate of the Expense Excess and one-twelfth of
Tenant’s Pro Rata Share of Landlord’s estimate of the
Tax Excess. If Landlord determines that its good faith estimate of
the Expense Excess or of the Tax Excess was incorrect by a material
amount, Landlord may provide Tenant with a revised estimate. After
its receipt of the revised estimate, Tenant’s monthly
payments shall be based upon the revised estimate. If Landlord does
not provide Tenant with an estimate of the Expense Excess or of the
Tax Excess by January 1 of a calendar year, Tenant shall continue
to pay monthly installments based on the previous year’s
estimate(s) until Landlord provides Tenant with the new estimate.
Upon delivery of the new estimate, an adjustment shall be made for
any month for which Tenant paid monthly installments based on the
previous year’s estimate(s). Tenant shall pay Landlord the
amount of any underpayment within 30 days after receipt of the new
estimate. Any overpayment shall be refunded to Tenant within 30
days or credited against the next due future installment(s) of
Additional Rent.
|
|
|
|
As soon as is
practical following the end of each calendar year, Landlord shall
furnish Tenant with a statement of the actual Expenses and Expense
Excess and the actual Taxes and Tax Excess for the prior calendar
year. If the estimated Expense Excess and/or estimated Tax Excess
for the prior calendar year is more than the actual Expense Excess
and/or actual Tax Excess, as the case may be, for the prior
calendar year, Landlord shall apply any overpayment by Tenant
against Additional Rent due or next becoming due, provided if the
Term expires before the determination of the overpayment, Landlord
shall refund any overpayment to Tenant after first deducting the
amount of Rent due. If the estimated Expense Excess and/or
estimated Tax Excess for the prior calendar year is less than the
actual Expense Excess and/or actual Tax Excess, as the case may be,
for such prior year, Tenant shall pay Landlord, within 30 days
after its receipt of the statement of Expenses and/or Taxes, any
underpayment for the prior calendar year.
|
4
|
|
C.
|
Expenses
Defined .
“Expenses” means all costs and expenses incurred in
each calendar year in connection with operating, maintaining,
repairing, and managing the Building and the Property, including,
but not limited to:
|
|
|
1.
|
Labor costs,
including, wages, salaries, social security and employment taxes,
medical and other types of insurance, uniforms, training, and
retirement and pension plans.
|
|
|
2.
|
Management
fees, the cost of equipping and maintaining a management office,
accounting and bookkeeping services, legal fees not attributable to
leasing or collection activity, and other administrative costs.
Landlord, by itself or through an affiliate, shall have the right
to directly perform or provide any services under this Lease
(including management services), provided that the cost of any such
services shall not exceed the cost that would have been incurred
had Landlord entered into an arms-length contract for such services
with an unaffiliated entity of comparable skill and
experience.
|
|
|
3.
|
The cost of
services, including amounts paid to service providers and the
rental and purchase cost of parts, supplies, tools and
equipment.
|
|
|
4.
|
Premiums and
deductibles paid by Landlord for insurance, including workers
compensation, fire and extended coverage, earthquake, general
liability, rental loss, elevator, boiler and other insurance
customarily carried from time to time by owners of comparable
office buildings.
|
|
|
5.
|
Electrical
Costs (defined below) and charges for water, gas, steam and sewer,
but excluding those charges for which Landlord is reimbursed by
tenants. “Electrical Costs” means: (a) charges paid by
Landlord for electricity; (b) costs incurred in connection with an
energy management program for the Property; and (c) if and to the
extent permitted by Law, a fee for the services provided by
Landlord in connection with the selection of utility companies and
the negotiation and administration of contracts for electricity,
provided that such fee shall not exceed 50% of any savings obtained
by Landlord. Electrical Costs shall be adjusted as follows: (i)
amounts received by Landlord as reimbursement for above standard
electrical consumption shall be deducted from Electrical Costs;
(ii) the cost of electricity incurred to provide overtime HVAC to
specific tenants (as reasonably estimated by Landlord) shall be
deducted from Electrical Costs; and (iii) if Tenant is billed
directly for the cost of building standard electricity to the
Premises as a separate charge in addition to Base Rent, the cost of
electricity to individual tenant spaces in the Building shall be
deducted from Electrical Costs.
|
|
|
6.
|
The amortized
cost of capital improvements (as distinguished from replacement
parts or components installed in the ordinary course of business)
made to the Property which are: (a) performed primarily to reduce
operating expense costs or otherwise improve the operating
efficiency of the Property; or (b) required to comply with any Laws
that are enacted, or first interpreted to apply to the Property,
after the date of this Lease. The cost of capital improvements
shall be amortized by Landlord over the lesser of the Payback
Period (defined below) or 5 years. The amortized cost of capital
improvements may, at Landlord’s option, include actual or
imputed interest at the rate that Landlord would reasonably be
required to pay to finance the cost of the capital improvement.
“Payback Period” means the reasonably estimated period
of time that it takes for the cost savings resulting from a capital
improvement to equal the total cost of the capital
improvement.
|
|
|
|
If Landlord
incurs Expenses for the Property together with one or more other
buildings or properties, whether pursuant to a reciprocal easement
agreement, common area agreement or otherwise, the shared costs and
expenses shall be equitably prorated and apportioned between the
Property and the other buildings or properties. Expenses shall not
include: (i) the cost of repairs reimbursed by Tenant or other
third parties; (ii) alterations solely attributable to tenants of
the Building other than Tenant; (iii) costs of abatement or
remediation of “hazardous materials” brought upon,
stored, used or disposed of in or about the Building by LL or by a
particular tenant or occupant of the Building other than Tenant,
except to the extent such abatement or remediation is related to
the general repair and maintenance of the Building; (iv) the cost
or expense of any services or benefits provided generally to other
tenants in the Building and not provided or available to Tenant;
(v) legal fees associated with disputes with other tenants in
the
|
5
|
|
|
Building; (vi)
the cost of capital improvements (except as set forth above); (vii)
depreciation; (viii) interest (except as provided above for the
amortization of capital improvements); (ix) principal payments of
mortgage and other non-operating debts of Landlord; (x) the cost of
repairs or other work to the extent Landlord is reimbursed by
insurance or condemnation proceeds; (xi) costs in connection with
leasing space in the Building, including brokerage commissions;
(xii) lease concessions, including rental abatements and
construction allowances, granted to specific tenants; (xiii) costs
incurred in connection with the sale, financing or refinancing of
the Building; (xiv) fines, interest and penalties incurred due to
the late payment of Taxes (defined in Section IV.D) or Expenses;
(xv) organizational expenses associated with the creation and
operation of the entity which constitutes Landlord; or (xvi) any
penalties or damages that Landlord pays to Tenant under this Lease
or to other tenants in the Building under their respective leases.
If the Building is not at least 95% occupied during any calendar
year or if Landlord is not supplying services to at least 95% of
the total Rentable Square Footage of the Building at any time
during a calendar year, Expenses shall, at Landlord’s option,
be determined as if the Building had been 95% occupied and Landlord
had been supplying services to 95% of the Rentable Square Footage
of the Building during that calendar year. If Tenant pays for its
Pro Rata Share of Expenses based on increases over a “Base
Year” and Expenses for a calendar year are determined as
provided in the prior sentence, Expenses for the Base Year shall
also be determined as if the Building had been 95% occupied and
Landlord had been supplying services to 95% of the Rentable Square
Footage of the Building. The extrapolation of Expenses under this
Section shall be performed by appropriately adjusting the cost of
those components of Expenses that are impacted by changes in the
occupancy of the Building.
|
|
|
D.
|
Taxes
Defined .
“Taxes” shall mean: (1) all real estate taxes and other
assessments on the Building and/or Property, including, but not
limited to, assessments for special improvement districts and
building improvement districts, taxes and assessments levied in
substitution or supplementation in whole or in part of any such
taxes and assessments and the Property’s share of any real
estate taxes and assessments under any reciprocal easement
agreement, common area agreement or similar agreement as to the
Property; (2) all personal property taxes for property that is
owned by Landlord and used in connection with the operation,
maintenance and repair of the Property; and (3) all costs and fees
incurred in connection with seeking reductions in any tax
liabilities described in (1) and (2), including, without
limitation, any costs incurred by Landlord for compliance, review
and appeal of tax liabilities. Without limitation, Taxes shall not
include any income, capital levy, franchise, capital stock, gift,
estate or inheritance tax. If an assessment is payable in
installments, Taxes for the year shall include the amount of the
installment and any interest due and payable during that year. For
all other real estate taxes, Taxes for that year shall, at
Landlord’s election, include either the amount accrued,
assessed or otherwise imposed for the year or the amount due and
payable for that year, provided that Landlord’s election
shall be applied consistently throughout the Term. If a change in
Taxes is obtained for any year of the Term during which Tenant paid
Tenant’s Pro Rata Share of any Tax Excess, then Taxes for
that year will be retroactively adjusted and Landlord shall provide
Tenant with a credit, if any, based on the adjustment. Likewise, if
a change is obtained for Taxes for the Base Year, Taxes for the
Base Year shall be restated and the Tax Excess for all subsequent
years shall be recomputed. Tenant shall pay Landlord the amount of
Tenant’s Pro Rata Share of any such increase in the Tax
Excess within 30 days after Tenant’s receipt of a statement
from Landlord.
|
|
|
E.
|
Audit
Rights . Tenant may,
within 90 days after receiving Landlord’s statement of
Expenses, give Landlord written notice (“Review
Notice”) that Tenant intends to review Landlord’s
records of the Expenses for that calendar year. Within a reasonable
time after receipt of the Review Notice, Landlord shall make all
pertinent records available for inspection that are reasonably
necessary for Tenant to conduct its review. If any records are
maintained at a location other than the office of the Building,
Tenant may either inspect the records at such other location or pay
for the reasonable cost of copying and shipping the records. If
Tenant retains an agent to review Landlord’s records, the
agent must be with a licensed CPA firm. Tenant shall be solely
responsible for all costs, expenses and fees incurred for the
audit. Within 60 days after the records are made available to
Tenant, Tenant shall have the right to give Landlord written notice
(an
|
6
|
|
|
“Objection Notice”) stating in
reasonable detail any objection to Landlord’s statement of
Expenses for that year. If Tenant fails to give Landlord an
Objection Notice within the 60 day period or fails to provide
Landlord with a Review Notice within the 90 day period described
above, Tenant shall be deemed to have approved Landlord’s
statement of Expenses and shall be barred from raising any claims
regarding the Expenses for that year. If Tenant provides Landlord
with a timely Objection Notice, Landlord and Tenant shall work
together in good faith to resolve any issues raised in
Tenant’s Objection Notice. If Landlord and Tenant determine
that Expenses for the calendar year are less than reported,
Landlord shall provide Tenant with a credit against the next
installment of Rent in the amount of the overpayment by Tenant.
Likewise, if Landlord and Tenant determine that Expenses for the
calendar year are greater than reported, Tenant shall pay Landlord
the amount of any underpayment within 30 days. The records obtained
by Tenant shall be treated as confidential. In no event shall
Tenant be permitted to examine Landlord’s records or to
dispute any statement of Expenses unless Tenant has paid and
continues to pay all Rent when due.
|
|
V.
|
Compliance
with Laws; Use.
|
The Premises shall be used only for
the Permitted Use and for no other use whatsoever. Tenant shall not
use or permit the use of the Premises for any purpose which is
illegal, dangerous to persons or property or which, in
Landlord’s reasonable opinion, unreasonably disturbs any
other tenants of the Building or interferes with the operation of
the Building. Tenant shall comply with all Laws, including the
Americans with Disabilities Act, regarding the operation of
Tenant’s business and the use, condition, configuration and
occupancy of the Premises. Tenant, within 10 days after receipt,
shall provide Landlord with copies of any notices it receives
regarding a violation or alleged violation of any Laws. Tenant
shall comply with the rules and regulations of the Building
attached as Exhibit B and such other reasonable rules and
regulations adopted by Landlord from time to time. Tenant shall
also cause its agents, contractors, subcontractors, employees,
customers, and subtenants to comply with all rules and regulations.
Landlord shall not knowingly discriminate against Tenant in
Landlord’s enforcement of the rules and
regulations.
The Security Deposit shall be
delivered to Landlord upon the execution of this Lease by Tenant
and shall be held by Landlord without liability for interest
(unless required by Law) as security for the performance of
Tenant’s obligations. The Security Deposit is not an advance
payment of Rent or a measure of Tenant’s liability for
damages. Landlord may, from time to time, without prejudice to any
other remedy, use all or a portion of the Security Deposit to
satisfy past due Rent or to cure any uncured default by Tenant. If
Landlord uses the Security Deposit, Tenant shall within 5 days
restore the Security Deposit to its original amount. Landlord shall
return any unapplied portion of the Security Deposit to Tenant
within 45 days after the later to occur of: (1) the determination
of Tenant’s Pro Rata Share of any Tax Excess and Expense
Excess for the final year of the Term; (2) the date Tenant
surrenders possession of the Premises to Landlord in accordance
with this Lease; or (3) the Termination Date. If Landlord transfers
its interest in the Premises, Landlord may assign the Security
Deposit to the transferee and, following the assignment, Landlord
shall have no further liability for the return of the Security
Deposit. Landlord shall not be required to keep the Security
Deposit separate from its other accounts.
|
VII.
|
Services to
be Furnished by Landlord.
|
|
|
A.
|
Landlord agrees
to furnish Tenant with the following services: (1) Water service
for use in the lavatories on each floor on which the Premises are
located; (2) Heat and air conditioning in season during Normal
Business Hours, at such temperatures and in such amounts as are
standard for comparable buildings or as required by governmental
authority. Tenant, upon such advance notice as is reasonably
required by Landlord, shall have the right to receive HVAC service
during hours other than Normal Business Hours. Tenant shall pay
Landlord the standard charge for the additional service as
reasonably determined by Landlord from time to time; (3)
Maintenance and repair of the Property as described in Section
IX.B.; (4) Janitor service on Business Days. If Tenant’s use,
floor covering or other improvements require special services in
excess of the standard services for the Building, Tenant shall pay
the additional cost attributable to the special services; (5)
Elevator service; (6) Electricity to the Premises for general
office use, in accordance with and subject to the terms and
conditions in Article X; and (7) such other services as Landlord
reasonably determines are necessary or appropriate for the
Property.
|
7
|
|
B.
|
Landlord’s failure to furnish, or any
interruption or termination of, services due to the application of
Laws, the failure of any equipment, the performance of repairs,
improvements or alterations, or the occurrence of any event or
cause beyond the reasonable control of Landlord (a “Service
Failure”) shall not render Landlord liable to Tenant,
constitute a constructive eviction of Tenant, give rise to an
abatement of Rent, nor relieve Tenant from the obligation to
fulfill any covenant or agreement. However, if the Premises, or a
material portion of the Premises, is made untenantable for a period
in excess of 3 consecutive Business Days as a result of the Service
Failure, then Tenant, as its sole remedy, shall be entitled to
receive an abatement of Rent payable hereunder during the period
beginning on the 4th consecutive Business Day of the Service
Failure and ending on the day the service has been restored. If the
entire Premises has not been rendered untenantable by the Service
Failure, the amount of abatement that Tenant is entitled to receive
shall be prorated based upon the percentage of the Premises
rendered untenantable and not used by Tenant. In no event, however,
shall Landlord be liable to Tenant for any loss or damage,
including the theft of Tenant’s Property (defined in Article
XV), arising out of or in connection with the failure of any
security services, personnel or equipment.
|
|
VIII.
|
Leasehold
Improvements.
|
All improvements to the Premises
(collectively, “Leasehold Improvements”) shall be owned
by Landlord and shall remain upon the Premises without compensation
to Tenant. However, Landlord, by written notice to Tenant within 30
days prior to the Termination Date, may require Tenant to remove,
at Tenant’s expense: (1) Cable (defined in Section IX.A)
installed by or for the exclusive benefit of Tenant and located in
the Premises or other portions of the Building; and (2) any
Leasehold Improvements that are performed by or for the benefit of
Tenant and, in Landlord’s reasonable judgment, are of a
nature that would require removal and repair costs that are
materially in excess of the removal and repair costs associated
with standard office improvements (collectively referred to as
“Required Removables”). Without limitation, it is
agreed that Required Removables include internal stairways, raised
floors, personal baths and showers, vaults, rolling file systems
and structural alterations and modifications of any type. The
Required Removables designated by Landlord shall be removed by
Tenant before the Termination Date, provided that upon prior
written notice to Landlord, Tenant may remain in the Premises for
up to 5 days after the Termination Date for the sole purpose of
removing the Required Removables. Tenant’s possession of the
Premises shall be subject to all of the terms and conditions of
this Lease, including the obligation to pay Rent on a per diem
basis at the rate in effect for the last month of the Term. Tenant
shall repair damage caused by the installation or removal of
Required Removables. If Tenant fails to remove any Required
Removables or perform related repairs in a timely manner, Landlord,
at Tenant’s expense, may remove and dispose of the Required
Removables and perform the required repairs. Tenant, within 30 days
after receipt of an invoice, shall reimburse Landlord for the
reasonable costs incurred by Landlord. Notwithstanding the
foregoing, Tenant, at the time it requests approval for a proposed
Alteration (defined in Section IX.C), may request in writing that
Landlord advise Tenant whether the Alteration or any portion of the
Alteration will be designated as a Required Removable. Within 10
days after receipt of Tenant’s request, Landlord shall advise
Tenant in writing as to which portions of the Alteration, if any,
will be considered to be Required Removables.
|
IX.
|
Repairs and
Alterations.
|
|
|
A.
|
Tenant’s Repair Obligations
. Tenant shall, at its sole cost and
expense, promptly perform all maintenance and repairs to the
Premises that are not Landlord’s express responsibility under
this Lease, and shall keep the Premises in good condition and
repair, reasonable wear and tear excepted. Tenant’s repair
obligations include, without limitation, repairs to: (1) floor
covering; (2) interior partitions; (3) doors; (4) the interior side
of demising walls; (5) electronic, phone and data cabling and
related equipment (collectively, “Cable”) that is
installed by or for the exclusive benefit of Tenant and located in
the Premises or other portions of the Building; (6) supplemental
air conditioning units, private showers and kitchens, including hot
water heaters, plumbing, and similar facilities serving Tenant
exclusively; and (7) Alterations performed by contractors retained
by Tenant, including related HVAC balancing. All work shall be
performed in accordance with the rules and procedures described in
Section IX.C. below. If Tenant fails to make any repairs to the
Premises for more than 15 days after
|
8
|
|
|
notice from
Landlord (although notice shall not be required if there is an
emergency), Landlord may make the repairs, and Tenant shall pay the
reasonable cost of the repairs to Landlord within 30 days after
receipt of an invoice, together with an administrative charge in an
amount equal to 10% of the cost of the repairs.
|
|
|
B.
|
Landlord’s Repair Obligations
. Landlord shall keep and maintain
in good repair and working order and make repairs to and perform
maintenance upon: (1) structural elements of the Building; (2)
mechanical (including HVAC), electrical, plumbing and fire/life
safety systems serving the Building in general; (3) Common Areas;
(4) the roof of the Building; (5) exterior windows of the Building;
and (6) elevators serving the Building. Landlord shall promptly
make repairs (considering the nature and urgency of the repair) for
which Landlord is responsible.
|
|
|
C.
|
Alterations . Tenant shall not make alterations, additions
or improvements to the Premises or install any Cable in the
Premises or other portions of the Building (collectively referred
to as “Alterations”) without first obtaining the
written consent of Landlord in each instance, which consent shall
not be unreasonably withheld or delayed. However, Landlord’s
consent shall not be required for any Alteration that satisfies all
of the following criteria (a “Cosmetic Alteration”):
(1) is of a cosmetic nature such as painting, wallpapering, hanging
pictures and installing carpeting; (2) is not visible from the
exterior of the Premises or Building; (3) will not affect the
systems or structure of the Building; and (4) does not require work
to be performed inside the walls or above the ceiling of the
Premises. However, even though consent is not required, the
performance of Cosmetic Alterations shall be subject to all the
other provisions of this Section IX.C. Prior to starting work,
Tenant shall furnish Landlord with plans and specifications
reasonably acceptable to Landlord; names of contractors reasonably
acceptable to Landlord (provided that Landlord may designate
specific contractors with respect to Building systems); copies of
contracts; necessary permits and approvals; evidence of
contractor’s and subcontractor’s insurance in amounts
reasonably required by Landlord; and any security for performance
that is reasonably required by Landlord. Changes to the plans and
specifications must also be submitted to Landlord for its approval.
Alterations shall be constructed in a good and workmanlike manner
using materials of a quality that is at least equal to the quality
designated by Landlord as the minimum standard for the Building.
Landlord may designate reasonable rules, regulations and procedures
for the performance of work in the Building and, to the extent
reasonably necessary to avoid disruption to the occupants of the
Building, shall have the right to designate the time when
Alterations may be performed. Tenant shall reimburse Landlord
within 30 days after receipt of an invoice for sums paid by
Landlord for third party examination of Tenant’s plans for
non-Cosmetic Alterations. In addition, within 30 days after receipt
of an invoice from Landlord, Tenant shall pay Landlord a fee for
Landlord’s oversight and coordination of any non-Cosmetic
Alterations equal to 10% of the cost of the non-Cosmetic
Alterations. Upon completion, Tenant shall furnish
“as-built” plans (except for Cosmetic Alterations),
completion affidavits, full and final waivers of lien and receipted
bills covering all labor and materials. Tenant shall assure that
the Alterations comply with all insurance requirements and Laws.
Landlord’s approval of an Alteration shall not be a
representation by Landlord that the Alteration complies with
applicable Laws or will be adequate for Tenant’s
use.
|
|
X.
|
Use of
Electrical Services by Tenant.
|
|
|
A.
|
Electricity
used by Tenant in the Premises shall, at Landlord’s option,
be paid for by Tenant either: (1) through inclusion in Expenses
(except as provided in Section X.B. for excess usage); (2) by a
separate charge payable by Tenant to Landlord within 30 days after
billing by Landlord; or (3) by separate charge billed by the
applicable utility company and payable directly by Tenant.
Electrical service to the Premises may be furnished by one or more
companies providing electrical generation, transmission and
distribution services, and the cost of electricity may consist of
several different components or separate charges for such services,
such as generation, distribution and stranded cost charges.
Landlord shall have the exclusive right to select any company
providing electrical service to the Premises, to aggregate the
electrical service for the Property and Premises with other
buildings, to purchase electricity through a broker and/or buyers
group and to change the providers and manner of purchasing
electricity. Landlord shall be entitled to receive a fee (if
permitted by Law) for the selection
|
9
|
|
|
of utility
companies and the negotiation and administration of contracts for
electricity, provided that the amount of such fee shall not exceed
50% of any savings obtained by Landlord.
|
|
|
B.
|
Tenant’s
use of electrical service shall not exceed, either in voltage,
rated capacity, use beyond Normal Business Hours or overall load,
that which Landlord deems to be standard for the Building. If
Tenant requests permission to consume excess electrical service,
Landlord may refuse to consent or may condition consent upon
conditions that Landlord reasonably elects (including, without
limitation, the installation of utility service upgrades, meters,
submeters, air handlers or cooling units), and the additional usage
(to the extent permitted by Law), installation and maintenance
costs shall be paid by Tenant. Landlord shall have the right to
separately meter electrical usage for the Premises and to measure
electrical usage by survey or other commonly accepted
methods.
|
Landlord, its agents, contractors
and representatives may enter the Premises to inspect or show the
Premises, to clean and make repairs, alterations or additions to
the Premises, and to conduct or facilitate repairs, alterations or
additions to any portion of the Building, including other
tenants’ premises. Except in emergencies or to provide
janitorial and other Building services after Normal Business Hours,
Landlord shall provide Tenant with reasonable prior notice of entry
into the Premises, which may be given orally. If reasonably
necessary for the protection and safety of Tenant and its
employees, Landlord shall have the right to temporarily close all
or a portion of the Premises to perform repairs, alterations and
additions. However, except in emergencies, Landlord will not close
the Premises if the work can reasonably be completed on weekends
and after Normal Business Hours. Entry by Landlord shall not
constitute constructive eviction or entitle Tenant to an abatement
or reduction of Rent.
|
XII.
|
Assignment
and Subletting.
|
|
|
A.
|
Except in
connection with a Permitted Transfer (defined in Section XII.E.
below), Tenant shall not assign, sublease, transfer or encumber any
interest in this Lease or allow any third party to use any portion
of the Premises (collectively or individually, a
“Transfer”) without the prior written consent of
Landlord, which consent shall not be unreasonably withheld if
Landlord does not elect to exercise its termination rights under
Section XII.B below. Without limitation, it is agreed that
Landlord’s consent shall not be considered unreasonably
withheld if: (1) the proposed transferee’s financial
condition does not meet the criteria Landlord uses to select
Building tenants having similar leasehold obligations; (2) the
proposed transferee’s business is not suitable for the
Building considering the business of the other tenants and the
Building’s prestige, or would result in a violation of
another tenant’s rights; (3) the proposed transferee is a
governmental agency or occupant of the Building; (4) Tenant is in
default after the expiration of the notice and cure periods in this
Lease; or (5) any portion of the Building or Premises would likely
become subject to additional or different Laws as a consequence of
the proposed Transfer. Tenant shall not be entitled to receive
monetary damages based upon a claim that Landlord unreasonably
withheld its consent to a proposed Transfer and Tenant’s sole
remedy shall be an action to enforce any such provision through
specific performance or declaratory judgment. Any attempted
Transfer in violation of this Article shall, at Landlord’s
option, be void. Consent by Landlord to one or more Transfer(s)
shall not operate as a waiver of Landlord’s rights to approve
any subsequent Transfers. In no event shall any Transfer or
Permitted Transfer release or relieve Tenant from any obligation
under this Lease.
|
|
|
B.
|
As part of its
request for Landlord’s consent to a Transfer, Tenant shall
provide Landlord with financial statements for the proposed
transferee, a complete copy of the proposed assignment, sublease
and other contractual documents and such other information as
Landlord may reasonably request. Landlord shall, by written notice
to Tenant within 30 days of its receipt of the required information
and documentation, either: (1) consent to the Transfer by the
execution of a consent agreement in a form reasonably designated by
Landlord or reasonably refuse to consent to the Transfer in
writing; or (2) exercise its right to terminate this Lease with
respect to the portion of the Premises that Tenant is proposing to
assign or sublet. Any such termination shall be effective on the
proposed effective date of the Transfer for which Tenant requested
consent. Tenant shall pay Landlord a review fee of $2,000.00 for
Landlord’s review of any Permitted
|
10
|
|
|
Transfer or
requested Transfer, provided if Landlord’s actual reasonable
costs and expenses (including reasonable attorney’s fees)
exceed $2,000.00, Tenant shall reimburse Landlord for its actual
reasonable costs and expenses in lieu of a fixed review
fee.
|
|
|
C.
|
Tenant shall
pay Landlord 50% of all rent and other consideration which Tenant
receives as a result of a Transfer that is in excess of the Rent
payable to Landlord for the portion of the Premises and Term
covered by the Transfer. Tenant shall pay Landlord for
Landlord’s share of any excess within 30 days after
Tenant’s receipt of such excess consideration. Tenant may
deduct from the excess all reasonable and customary expenses
directly incurred by Tenant attributable to the Transfer (other
than Landlord’s review fee), including brokerage fees, legal
fees and construction costs. If Tenant is in Monetary Default
(defined in Section XIX.A. below), Landlord may require that all
sublease payments be made directly to Landlord, in which case
Tenant shall receive a credit against Rent in the amount of any
payments received (less Landlord’s share of any
excess).
|
|
|
D.
|
Except as
provided below with respect to a Permitted Transfer, if Tenant is a
corporation, limited liability company, partnership, or similar
entity, and if the entity which owns or controls a majority of the
voting shares/rights at any time changes for any reason (including
but not limited to a merger, consolidation or reorganization), such
change of ownership or control shall constitute
|
|