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Exhibit
10.6
OFFICE
LEASE
BETWEEN
CRESCENT REAL ESTATE
FUNDING VIII, L.P.
(“LANDLORD”)
AND
PAR3 COMMUNICATIONS,
INC.
(“TENANT”)
OFFICE
LEASE
This Office Lease (this
“ Lease ” ) is entered into
by and between CRESCENT REAL ESTATE FUNDING VIII, L.P., a Delaware
limited partnership ( “ Landlord
” ), and PAR3 COMMUNICATIONS, INC., a Washington
corporation ( “ Tenant ” ),
and shall be effective as of the date set forth below
Landlord’s signature (the “ Effective
Date ” ).
1. Basic Lease Information
. The key business terms used in this Lease are defined as
follows:
A. “
Building ” : The building commonly known
as The Exchange Building and located at 821 Second Avenue, Seattle,
Washington 98104.
B. “
Rentable Square Footage of the Building
” is agreed and stipulated to be 295,515 square
feet.
C. “
Premises ” : The area shown on
Exhibit A-1 to this Lease. The Premises are located
on the 9 th
and 10 th floors of the Building and known as
suite number 1000. The “ Rentable Square Footage
of the Premises ” is deemed to be 30,712
square feet. If the Premises include, now or hereafter, 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. Tenant shall
have the right to designate up to (i) 13,350 square feet of
Rentable Area within the Premises as the “ First
Space Pocket ” during the period commencing
upon the Commencement Date and expiring on the earlier of
(a) the first date Tenant actually uses any portion of the
First Space Pocket for business operations, or (b) six
(6) months after the Commencement Date (the “
First Pocket Period ” ); (ii) 8,900
square feet of Rentable Area within the Premises as the
“ Second Space Pocket ”
during the period commencing upon the Commencement Date and
expiring on the earlier of (a) the first date Tenant actually
uses any portion of the Second Space Pocket for business
operations, or (b) twelve (12) months after the
Commencement Date (the “ Second Pocket
Period ” ); and (iii) 4,450 square feet
of Rentable Area within the Premises as the “
Third Space Pocket ” during the period
commencing upon the Commencement Date and expiring on the earlier
of (a) the first date Tenant actually uses any portion of the
Third Space Pocket for business operations, or (b) eighteen
(18) months after the Commencement Date (the “
Third Pocket Period ” ). Tenant shall
not pay Rent, either Base Rent or Tenant’s Pro rata Share of
Operating Expenses, in connection with the First Space Pocket,
Second Space Pocket and Third Space Pocket during the First Pocket
Period, Second Pocket Period and Third Pocket Period, respectively.
In the event the Pocket Periods expire out of numerical order,
e.g. , the Third Space Pocket is occupied prior to the
Second Space Pocket, the rent table will be adjusted using the
Annual Rate per Square Foot and the number of square feet of
Rentable Area within the applicable Space Pockets to calculate the
Base Rent.
D. “
Base Rent ” :
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Period
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Annual Rate
Per Square Foot |
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Monthly Base Rent |
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From
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Through
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| CD |
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Month
5 |
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$ |
0.00 |
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$ |
0.00 |
| Month
6 |
|
FPPED |
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$ |
22.00 |
|
$ |
31,830.33 |
| DAEFPP |
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SPPED |
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$ |
22.00 |
|
$ |
39,988.67 |
| DAESPP |
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TPPED |
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$ |
22.00 |
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$ |
48,147.00 |
| DAETPP |
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Month
24 |
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$ |
22.00 |
|
$ |
56,305.33 |
| Month
25 |
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Month
36 |
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$ |
23.00 |
|
$ |
58,864.67 |
| Month
37 |
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Month
48 |
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$ |
24.00 |
|
$ |
61,424.00 |
| Month
49 |
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Month
60 |
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$ |
25.00 |
|
$ |
63,983.33 |
| Month
61 |
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Month
72 |
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$ |
26.00 |
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$ |
66,542.67 |
| Month
73 |
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ED |
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$ |
26.50 |
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$ |
67,822.33 |
CD = Commencement
Date
FPPED = First Pocket Period
Expiration Date
DAEFPP = day immediately
after expiration of the First Pocket Period
SPPED = Second Pocket Period
Expiration Date
DAESPP = day immediately
after Second Pocket Period
TPPED = Third Pocket Period
Expiration Date
DAETPP = day immediately
after Third Pocket Period
ED = Expiration
Date
-1-
E. “
Tenant’s Pro Rata Share ” : The
percentage equal to the Rentable Square Footage of the Premises
divided by the Rentable Square Footage of the Building.
F. “
Base Year ” for Operating Expenses: 2005
calendar year.
G. “
Term ” : The period of approximately
eighty-four (84) months starting on the Commencement Date,
subject to the provisions of Article 3 .
H. “
Estimated Commencement Date ” :
July 1, 2005, subject to adjustment, if any, as provided in
Section 3.A and the Work Letter, if any.
I. “
Security Deposit ” : See Article
6 .
J . “
Guarantor(s) ” : None.
K. “
Business Day(s) ” : Monday through
Friday of each week, exclusive of New Year’s Day, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day, the day after
Thanksgiving 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.
L. “
Law(s) ” : All applicable statutes,
codes, ordinances, orders, rules and regulations of any municipal
or governmental entity, now or hereafter adopted, including the
Americans with Disabilities Act and any other law pertaining to
disabilities and architectural barriers (collectively,
“ ADA ” ), and all laws
pertaining to the environment, including the Comprehensive
Environmental Response, Compensation and Liability Act, as amended,
42 U.S.C. §9601 et seq. ( “ CERCLA
” ), and all restrictive covenants existing of record
and all rules and requirements of any existing association or
improvement district affecting the Property.
M. “
Normal Business Hours ” : 7:00 A.M. to
6:00 P.M. on Business Days and 9:00 A.M. to 1:00 P.M. on Saturdays,
exclusive of Holidays.
N. “
Notice Addresses ” :
Tenant : On or 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:
100 South King Street
Suite 100
Seattle, Washington 98104
Attn: Michael Quan
Phone #: (206) 902-3900
Fax #: (206) 902-3902
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Landlord:
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With a
copy to: |
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And
to: |
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821 Second Avenue
Suite 1600
Seattle, Washington
98104
Attn: Property
Manager
Phone #:
(206) 223-9452
Fax #:
(206) 223-1003
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The Crescent®
200 Crescent Court, Suite 250
Dallas, Texas 75201
Attn: Senior Vice President,
Asset Management &
Leasing
Phone #: (214) 880-4545
Fax #: (214) 880-4547
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777 Main Street
Suite 2100
Fort Worth, Texas 76102
Attn: Legal Department
Phone #: (817) 321-2100
Fax #: (817) 321-2000
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Rent (defined in
Section 4.A ) is payable to the order of Crescent Real
Estate Funding VIII, L.P. at the following address: The Exchange
Building, File 30543, P.O. Box 60000, San Francisco, California
94160 or by wire transfer to Bank of America, N.A., ABA #
111000025, for further credit to The Exchange Building, Account #
478-901-8144 with reference to Par3 Communications, Inc.
O. “
Other Defined Terms ” : In addition to
the terms defined above, an index of the other defined terms used
in the text of this Lease is set forth below, with a
cross-reference to the paragraph in this Lease in which the
definition of such term can be found:
-2-
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| Affiliate |
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11.E |
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| Alterations |
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9.C(1) |
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| Audit
Election Period |
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4.G |
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| Cable |
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9.A |
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| Claims |
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13 |
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| Collateral |
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19.E |
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| Commencement
Date |
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3.A |
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| Common
Areas |
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2 |
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| Completion
Estimate |
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16.B |
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| Contamination |
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30.C |
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| Costs of
Reletting |
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19.B |
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| Excess
Operating Expenses |
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4.B |
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| Expiration
Date |
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3.A |
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| Force
Majeure |
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31.C |
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| Hazardous
Materials |
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30.C |
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| Landlord
Parties |
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13 |
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| Landlord
Work |
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3.A |
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| Landlord’s Rental Damages |
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19.B |
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| Leasehold Improvements |
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29 |
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| Minor
Alterations |
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9.C(1) |
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| Monetary
Default |
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18.A |
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| Mortgage |
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25 |
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| Mortgagee |
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25 |
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| Operating
Expenses |
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4.D |
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| Permitted
Transfer |
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11.E |
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| Permitted
Use |
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5.A |
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| Prime
Rate |
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19.B |
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| Property |
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2 |
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| Provider |
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7.C |
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| Relocated
Premises |
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23 |
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| Relocation
Date |
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23 |
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| Rent |
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4.A |
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| Service
Failure |
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7.B |
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| Special
Installations |
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29 |
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| Substantial
Completion |
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Work Letter |
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| Taking |
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17 |
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| Tenant
Parties |
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13 |
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| Tenant’s Insurance |
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14.A |
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| Tenant’s Property |
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14.A |
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| Tenant’s Removable Property |
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29 |
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| Time
Sensitive Default |
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18.B |
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| Transfer |
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11.A |
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| Work
Letter |
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3.A |
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-3-
2. Lease Grant . 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 (defined below) that are designated by
Landlord for the common use of tenants and others, such as
sidewalks, common corridors, vending areas, lobby areas and, with
respect to multi-tenant floors, restrooms and elevator foyers (the
“ Common Areas ” ).
“ Property ” means the
Building and the parcel(s) of land on which it is located as more
fully described on Exhibit A-2 , together with all
other buildings and improvements located thereon; and the Building
garage(s) and other improvements serving the Building, if any, and
the parcel(s) of land on which they are located.
3. Term; Adjustment of
Commencement Date; Early Access .
A. Term
. This Lease shall govern the relationship between Landlord and
Tenant with respect to the Premises from the Effective Date through
the last day of the Term specified in Section 1.G (the
“ Expiration Date ” ),
unless terminated early in accordance with this Lease. The Term of
this Lease (as specified in Section 1.G) shall commence on the
“ Commencement Date ” ,
which shall be the earliest of (1) the date on which the
Landlord Work (defined below) is Substantially Complete, as
determined pursuant to the Work Letter (defined below), or
(2) the date on which the Landlord Work would have been
Substantially Complete but for Tenant Delay, as such term is
defined in the Work Letter, or (3) the date Tenant takes
possession of any part of the Premises for purposes of conducting
business. If Landlord is delayed in delivering possession of the
Premises or any other space due to any reason, including
Landlord’s failure to Substantially Complete the Landlord
Work by the Estimated Commencement Date, the holdover or unlawful
possession of such space by any third party, or for any other
reason, such delay shall not be a default by Landlord, render this
Lease void or voidable, or otherwise render Landlord liable for
damages. Notwithstanding the foregoing, if Landlord has not
delivered the Premises within one hundred eighty (180) days
after the Estimated Commencement Date, subject to Tenant Delay and
Force Majeure (as defined in Section 31.C ), then
Tenant shall have the right, as its sole remedy, to terminate this
Lease upon written notice to Landlord given at any time after such
180-day period and prior to delivery of the Premises. Promptly
after the determination of the Commencement Date (and if necessary,
the expiration of the First Pocket Period, Second Pocket Period
and/or Third Pocket Period), the Expiration Date, the Rent schedule
and any other variable matters, Landlord shall prepare and deliver
to Tenant a commencement letter agreement substantially in the form
attached as Exhibit C . If such commencement letter
is not executed by Tenant within 30 days after delivery of same by
Landlord, then Tenant shall be deemed to have agreed with the
matters set forth therein. Notwithstanding any other provision of
this Lease to the contrary, if the Expiration Date would otherwise
occur on a date other than the last day of a calendar month, then
the Term shall be automatically extended to include the last day of
such calendar month, which shall become the Expiration Date.
“ Landlord Work ” means the
work, if any, that Landlord is obligated to perform in the Premises
pursuant to a separate work letter agreement (the “
Work Letter ” ), if any, attached as
Exhibit D . If a Work Letter is not attached to this
Lease or if an attached Work Letter does not require Landlord to
perform any work, the occurrence of the Commencement Date shall not
be conditioned upon the performance of work by Landlord.
B. Acceptance of
Premises . The Premises are accepted by Tenant in “as
is” condition and configuration subject to (1) any
Landlord obligation to perform Landlord Work as provided in the
Work Letter, and (2) any latent defects in the Premises of
which Tenant notifies Landlord within one year after the
Commencement Date [other than work performed by Tenant Parties
(defined below)]. S UBJECT TO L
ANDLORD ’ S
OBLIGATIONS SET FORTH
IN THE IMMEDIATELY
PRECEDING SENTENCE , T
ENANT HEREBY AGREES
THAT THE P REMISES
ARE IN GOOD
ORDER AND SATISFACTORY
CONDITION AND THAT ,
EXCEPT AS OTHERWISE
EXPRESSLY SET FORTH
IN THIS LEASE ,
THERE ARE NO
REPRESENTATIONS OR
WARRANTIES OF ANY
KIND , EXPRESS OR
IMPLIED , BY L ANDLORD
REGARDING THE P
REMISES , THE B
UILDING OR THE P
ROPERTY .
C. Early
Access . Prior to the date the Landlord Work is
Substantially Complete, Tenant’s access to the Premises shall
be permitted only with the prior written consent of Landlord. Early
access to the Premises shall be subject to the terms and conditions
of this Lease and Tenant shall pay Rent (defined in
Section 4.A ) to Landlord for each day of such early
access. However, if such early access to the Premises is permitted
by Landlord for the sole purpose of performing improvements or
installing furniture, equipment or other personal property, Tenant
shall not be required to pay Base Rent and Tenant’s Pro Rata
Share of Excess Operating Expenses for any days of such early
access; provided however, Tenant shall pay for the cost of any
other Building services
requested by Tenant ( e.g. ,
freight elevator usage). In connection with the foregoing, Landlord
agrees that Tenant may enter the Premises no more than 15 days
prior to the anticipated Commencement Date for the sole purpose of
installing furniture, fixtures and equipment (the “
Early Entry ”) provided that such Early Entry
is conducted in a manner as to not unreasonably interfere with any
Landlord Work occurring in or around the Premises, and further
provided that such Early Entry shall be subject to all of the terms
and conditions contained in this Lease (other than the payment of
Base Rent and Tenant’s Pro Rata Share of Excess Operating
Expenses), including, without limitation, Tenant’s insurance
and indemnity obligations as contained in this Lease. Prior to any
such Early Entry, Tenant shall provide Landlord with certificates
of insurance or other evidence acceptable to Landlord evidencing
Tenant’s compliance with its insurance obligations. In the
event that Tenant’s Early Entry interferes with the Landlord
Work or otherwise disrupts Landlord’s operations or the
operations of other tenants in the Building, Landlord may terminate
Tenant’s right to Early Entry, and any delay in the Landlord
Work attributable to such Early Entry will be deemed a Tenant Delay
as provided in this Lease.
4. Rent .
A.
Payments . As consideration for this Lease,
commencing on the Commencement Date, Tenant shall pay Landlord,
without any demand, setoff or deduction, the total amount of Base
Rent, Tenant’s Pro Rata Share of Excess Operating Expenses
(defined in Section 4.B ) and any and all other sums
payable by Tenant under this Lease (all of which 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. The monthly Base
Rent and Tenant’s Pro Rata Share of Excess Operating Expenses
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 for which Base Rent is payable ( i.e. , Month 6) shall
be payable upon 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 the Term
commences on a day other than the first day of a calendar month,
the monthly Base Rent and Tenant’s Pro Rata Share of any
Excess Operating Expenses for the month shall be prorated on a
daily basis based on a 360 day calendar year. 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 such check or payment without such
acceptance being considered a waiver of any rights such party may
have under this Lease or applicable Law. Tenant’s covenant to
pay Rent is independent of every other covenant in this
Lease.
B. Excess
Operating Expenses . Tenant shall pay Tenant’s Pro
Rata Share of the amount, if any, by which Operating Expenses
(defined in Section 4.D ) for each calendar year during
the Term exceed Operating Expenses for the Base Year (the
“ Excess Operating Expenses
” ). If Operating Expenses in any calendar year
decrease below the amount of Operating Expenses for the Base Year,
Tenant’s Pro Rata Share of Operating Expenses for that
calendar year shall be $0. In no event shall Base Rent be reduced
if Operating Expenses for any calendar year are less than Operating
Expenses for the Base Year. On or about January 1 of each
calendar year, Landlord shall provide Tenant with a good faith
estimate of the Excess Operating Expenses for such 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
Excess Operating Expenses. If Landlord determines that its good
faith estimate of the Excess Operating Expenses was incorrect,
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 Excess Operating Expenses by
January 1 of a calendar year, Tenant shall continue to pay
monthly installments based on the most recent 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 same
year’s prior incorrect estimate(s). Tenant shall pay Landlord
the amount of any underpayment within 30 days after receipt of the
new estimate. Any overpayment shall be credited against the next
sums due and owing by Tenant or, if no further Rent is due,
refunded directly to Tenant within 30 days of determination. The
obligation of Tenant to pay for Excess Operating Expenses as
provided herein shall survive the expiration or earlier termination
of this Lease.
C.
Reconciliation of Operating Expenses . Within 120
days after the end of each calendar year or as soon thereafter as
is practicable, Landlord shall furnish Tenant with a statement of
the actual Operating Expenses and Excess Operating Expenses for
such calendar year. If the most recent estimated Excess Operating
Expenses paid by Tenant for such calendar year are more than the
actual Excess Operating Expenses for such calendar year, Landlord
shall apply any overpayment by Tenant against Rent due or next
becoming due; provided, if the Term expires before the
determination of the overpayment, Landlord shall, within 30 days of
determination, refund any overpayment to Tenant after first
deducting the amount of Rent due. If the most recent estimated
Excess Operating Expenses paid by Tenant for the prior calendar
year are less than the actual Excess Operating Expenses for such
year, Tenant shall pay Landlord, within 30 days after its receipt
of the statement of Operating Expenses, any underpayment for the
prior calendar year.
D. Operating
Expenses Defined . “ Operating
Expenses ” means all costs and expenses
incurred or accrued in each calendar year in connection with the
ownership, operation, maintenance, management, repair and
protection of the Property which are directly attributable or
reasonably allocable to the Building, including Landlord’s
personal property used in connection with the Property and
including all costs and expenditures relating to the
following:
(1) Operation, maintenance,
repair and replacements of any part of the Property, including the
mechanical, electrical, plumbing, HVAC, vertical transportation,
fire prevention and warning and access control systems; materials
and supplies (such as building standard light bulbs and ballasts);
equipment and tools; floor, wall and window coverings; personal
property; required or beneficial easements; and related service
agreements and rental expenses.
(2) Administrative costs and
management fees, including accounting, information and professional
services (except for negotiations and disputes with specific
tenants not affecting other parties); management office(s); and
wages, salaries, benefits, reimbursable expenses and taxes (or
allocations thereof) for full and part time personnel involved in
operation, maintenance and management.
(3) Janitorial service;
window cleaning; waste disposal; gas, water and sewer and other
utility charges (including add-ons); and landscaping, including all
applicable tools and supplies.
(4) Property, liability and
other insurance coverages carried by Landlord, including
deductibles and risk retention programs and a proportionate
allocation of the cost of blanket insurance policies maintained by
Landlord and/or its Affiliates (defined below).
(5) Real estate taxes,
assessments, business taxes, excises, association dues, fees,
levies, charges and other taxes of every kind and nature
whatsoever, general and special, extraordinary and ordinary,
foreseen and unforeseen, including interest on installment
payments, which may be levied or assessed against or arise in
connection with ownership, use, occupancy, rental, operation or
possession of the Property (including personal property taxes for
property that is owned by Landlord and used in connection with the
operation, maintenance and repair of the Property), or substituted,
in whole or in part, for a tax previously in existence by any
taxing authority, or assessed in lieu of a tax increase, or paid as
rent under any ground lease. Real estate taxes do not include
Landlord’s income, franchise or estate taxes (except to the
extent such excluded taxes are assessed in lieu of taxes included
above).
(6) Compliance with Laws,
including license, permit and inspection fees (but not in
duplication of capital expenditures amortized as provided in
Section 4.D(9) and only to the extent that such
compliance relates to Laws which are amended, become effective, or
are interpreted or enforced differently, after the date of this
Lease); and all expenses and fees, including attorneys’ fees
and court or other venue of dispute resolution costs, incurred in
negotiating or contesting real estate taxes or the validity and/or
applicability of any governmental enactments which may affect
Operating Expenses; provided Landlord shall credit against
Operating Expenses any refunds received from such negotiations or
contests to the extent originally included in Operating Expenses
(less Landlord’s costs).
(7) Building safety services,
to the extent provided or contracted for by Landlord.
(8) Goods and services
purchased from Landlord’s subsidiaries and Affiliates to the
extent the cost of same is generally consistent with rates charged
by unaffiliated third parties for similar goods and
services.
(9) Amortization of capital
expenditures incurred: (a) to conform with Laws, which are
amended, become effective, or are interpreted or enforced
differently, after the date of this Lease; provided, however, all
capital expenditures made in order to conform to or comply with ADA
shall be included in Operating Expenses; (b) to maintain
building standards (other than building standard tenant
improvements); or (c) with the intention of promoting safety
or reducing or controlling increases in Operating Expenses, such as
lighting retrofit and installation of energy management systems.
Such expenditures shall be amortized uniformly over the following
periods of time (together with interest on the unamortized balance
at the Prime Rate (defined in Section 19.B ) as of the
date incurred plus 2%): for building improvements, the shorter of
10 years or the estimated useful life of the improvement; and for
all other items, 3 years for expenditures under $50,000 and 5 years
for expenditures in excess of $50,000. Notwithstanding the
foregoing, Landlord may elect to amortize capital expenditures
under this subsection over a longer period of time based upon
(i) the purpose and nature of the expenditure, (ii) the
relative capital burden on the Property, (iii) for cost
savings projects, the anticipated payback period, and
(iv) otherwise in accordance with sound real estate accounting
principles consistently applied.
(10) Electrical services used
in the operation, maintenance and use of the Property; sales, use,
excise and other taxes assessed by governmental authorities on
electrical services supplied to the Property, and other costs of
providing electrical services to the Property.
E. Exclusions
from Operating Expenses . Operating Expenses exclude the
following expenditures:
(1) Leasing commissions,
attorneys’ fees and other expenses related to leasing tenant
space and constructing improvements for the sole benefit of an
individual tenant.
(2) Goods and services
furnished to an individual tenant of the Building which are above
building standard and which are separately reimbursable directly to
Landlord in addition to Excess Operating Expenses.
(3) Repairs, replacements and
general maintenance paid by insurance proceeds, condemnation
proceeds, or by another tenant or responsible third party,
including repairs or replacements covered by warranty.
(4) Except as provided in
Section 4.D(9) , depreciation, amortization, interest
payments on any encumbrances on the Property and the cost of
capital improvements or additions.
(5) Costs of installing any
specialty service, such as an observatory, broadcasting facility,
luncheon club, or athletic or recreational club.
(6) Expenses for repairs or
maintenance related to the Property which have been reimbursed to
Landlord pursuant to warranties or service contracts.
(7) Costs (other than
maintenance costs) of any art work (such as sculptures or
paintings) used to decorate the Building.
(8) Principal payments on
indebtedness secured by liens against the Property, or costs of
refinancing such indebtedness.
(9) Costs for which Landlord
has been compensated by a management fee.
(10) The cost of any work or
service performed for any tenant (including Tenant) at such
tenant’s cost.
(11) Legal, auditing,
consulting and professional fees paid or incurred in connection
with negotiations for financings, refinancings or sales of the
Property.
(12) Expenses incurred in
leasing or procuring new tenants, including advertising and
marketing expenses and expenses for preparation of leases or
renovating space for new tenants, rent allowances, lease takeover
costs, payment of moving costs and similar costs and
expenses.
(13) Costs incurred in
removing the personal property of former tenants or other occupants
of the Property.
(14) The cost (including
legal fees) of any disputes (other than tax disputes and those
which generally benefit the tenants of the Property), between
Landlord or any employee or agent of Landlord, and any
Mortgagee(s).
(15) Overtime and other costs
of curing defaults by Landlord or performing work which is required
to be performed by Landlord at Landlord’s sole cost and
expense.
(16) Salaries of officers and
executives of Landlord, except as included in
Section 4.D(2) .
(17) Landlord’s general
overhead and general administrative expenses except as provided in
Section 4.D(2) .
(18) Costs, penalties and
fines incurred due to the violation by Landlord or any other tenant
of the Building of Laws, or the terms and conditions of any lease
pertaining to the Building.
(19) Costs of correcting
latent defects in the Premises which are disclosed to Landlord
within one year after the Commencement Date; provided, however,
that the foregoing exclusion shall not apply to any latent defect
in any work performed by Tenant Parties.
(20) Subject to
Landlord’s obligations to handle Hazardous Materials
discovered in the Premises, which obligations are contained in
Section 30.D , all costs, in excess of $300,000 in any
calendar year, not to exceed $1,000,000 in any consecutive 5
calendar year period, arising from the release, removal or
remediation (including encapsulation) of Hazardous Materials in or
about the Building or the Property, including, without limitation,
Hazardous Materials in the ground water or soil, which Hazardous
Materials are discovered, or must be handled, in connection with
the day-to-day operation of the Property ( e.g. , cleaning
up diesel fuel from emergency generator used to power elevator
equipment, handling Hazardous Materials discovered during repair or
maintenance of Common Areas, etc.), unless caused by the acts or
omissions of any Tenant Party.
(21) Costs arising from
Landlord’s charitable or political contributions.
F. Proration of
Operating Expenses; Adjustments . If Landlord incurs
Operating 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 by Landlord
between the Property and the other buildings or properties. If the
Building is not 100% occupied during any calendar year or partial
calendar year or if Landlord is not supplying services to 100% of
the total Rentable Square Footage of the Building at any time
during a calendar year or partial calendar year, Operating Expenses
shall be determined as if the Building had been 100% occupied and
Landlord had been supplying services to 100% of the Rentable Square
Footage of the Building during that calendar year. If Tenant pays
for Tenant’s Pro Rata Share of Operating Expenses based on
increases over a “ Base Year
” and Operating Expenses for a calendar year are
determined as provided in the prior sentence, Operating Expenses
for the Base Year shall also be determined as if the Building had
been 100% occupied and Landlord had been supplying services to 100%
of the Rentable Square Footage of the Building. The extrapolation
of Operating Expenses under this Section shall be performed by
Landlord by adjusting the cost of those components of Operating
Expenses that are impacted by changes in the occupancy of the
Building.
G. Audit
Rights . Within 90 days after Landlord furnishes its
statement of actual Operating Expenses for any calendar year
(including the Base Year) (the “ Audit Election
Period ” ), Tenant may, at its expense, elect
to audit Landlord’s Operating Expenses for such calendar year
only, subject to the following conditions: (1) there is no
uncured event of default under this Lease; (2) the audit shall
be prepared by an independent certified public accounting firm of
recognized regional standing; (3) in no event shall any audit
be performed by a firm retained on a “contingency fee”
basis; (4) the audit shall commence within 30 days after
Landlord makes Landlord’s books and records available to
Tenant’s auditor and shall conclude within 60 days after
commencement; (5) the audit shall be conducted during
Landlord’s normal business hours at the location where
Landlord maintains its books and records and shall not unreasonably
interfere with the conduct of Landlord’s business;
(6) Tenant and its accounting firm shall treat any audit in a
confidential manner and shall each execute Landlord’s
confidentiality agreement for Landlord’s benefit prior to
commencing the audit; and (7) the accounting firm’s
audit report shall, at no charge to Landlord, be submitted in draft
form for Landlord’s review and comment before the final
approved audit report is delivered to
Landlord, and any reasonable comments by
Landlord shall be incorporated into the final audit report. This
paragraph shall not be construed to limit, suspend, or abate
Tenant’s obligation to pay Rent when due, including estimated
Excess Operating Expenses. Landlord shall credit any overpayment
determined by the final approved audit report against the next Rent
due and owing by Tenant or, if no further Rent is due, refund such
overpayment directly to Tenant within 30 days of determination.
Likewise, Tenant shall pay Landlord any underpayment determined by
the final approved audit report within 30 days of determination.
The foregoing obligations shall survive the expiration or
termination of this Lease. If Tenant does not give written notice
of its election to audit Landlord’s Operating Expenses during
the Audit Election Period, Landlord’s Operating Expenses for
the applicable calendar year shall be deemed approved for all
purposes, and Tenant shall have no further right to review or
contest the same. The right to audit granted hereunder is personal
to the initial Tenant named in this Lease and to any assignee under
a Permitted Transfer (defined below) and shall not be available to
any subtenant under a sublease of the Premises.
5. Tenant’s Use of
Premises .
A. Permitted
Uses . The Premises shall be used only for general office
use (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, creates
obnoxious odors (including tobacco smoke), noises or vibrations, is
dangerous to persons or property, could increase Landlord’s
insurance costs, or which, in Landlord’s reasonable opinion,
unreasonably disturbs any other tenants of the Building or
interferes with the operation or maintenance of the Property or any
work by Landlord or its contractors in the Premises. Except as
provided below, the following uses are expressly prohibited in the
Premises: schools, government offices or agencies; personnel
agencies; collection agencies; credit unions; data processing,
telemarketing or reservation centers; medical treatment and health
care; radio, television or other telecommunications broadcasting;
restaurants and other retail; customer service offices of a public
utility company; or any other purpose which would, in
Landlord’s reasonable opinion, impair the reputation or
quality of the Building, overburden any of the Building systems,
Common Areas or parking facilities (including any use which would
create a population density in the Premises which is in excess of
the density which is standard for the Building), impair
Landlord’s efforts to lease space or otherwise interfere with
the operation of the Property. Notwithstanding the foregoing, the
following ancillary uses are permitted in the Premises only so long
as they do not, in the aggregate, occupy more than 10% of the
Rentable Square Footage of the Premises or any single floor
(whichever is less): (1) the following services provided by
Tenant exclusively to its employees: schools, training and other
educational services; credit unions; and similar employee services;
and (2) the following services directly and exclusively
supporting Tenant’s business: telemarketing; reservations;
storage; data processing; debt collection; and similar support
services.
B. Compliance
with Laws . Tenant shall comply with all Laws regarding the
operation of Tenant’s business and the use, condition,
configuration and occupancy of the Premises and the use of the
Common Areas. Tenant, within 10 days after receipt, shall provide
Landlord with copies of any notices Tenant receives regarding a
violation or alleged or potential 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 (or modifications thereto) adopted by Landlord from
time to time provided such modifications do not materially diminish
the rights of Tenant under this Lease and provided further that in
the event there is a conflict between the rules and regulations and
this Lease, the terms of this Lease shall govern. Landlord shall
enforce the rules and regulations for the Property in a reasonably
nondiscriminatory manner, taking prevailing circumstances into
account. Tenant shall also cause its agents, contractors,
subcontractors, employees, customers, and subtenants to comply with
all rules and regulations.
C.
Tenant’s Security Responsibilities . Tenant
shall (1) lock the doors to the Premises and take other
reasonable steps to secure the Premises and the personal property
of all Tenant Parties (defined in Section 13 ) and any
of Tenant’s transferees, contractors or licensees in the
Common Areas and parking facilities of the Building and Property,
from unlawful intrusion, theft, fire and other hazards;
(2) keep and maintain in good working order all security and
safety devices installed in the Premises by or for the benefit of
Tenant (such as locks, smoke detectors and burglar alarms); and
(3) cooperate with Landlord and other tenants in the Building
on Building safety matters. Tenant acknowledges that any security
or safety measures employed by Landlord are for the protection of
Landlord’s own interests; and that Landlord is not a
guarantor of the security or safety of the Tenant Parties or their
property.
6. Security Deposit . The
parties have agreed that no Security Deposit will be required of
Tenant at the outset of this Lease. However, upon the expiration of
the Basic Letter of Credit Term, as defined in
Section 31.L below, a Security Deposit in an amount
equal to the last month’s payment of Rent shall be delivered
by Tenant to Landlord. Such Security Deposit shall be held by
Landlord (without liability for interest, except to the extent
required by Law) as security for the performance of Tenant’s
obligations under this Lease. Failure to provide such Security
Deposit when required shall constitute a Time Sensitive Default.
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 while an event of default remains uncured, without prejudice
to any other remedy, use all or a portion of the Security Deposit
to satisfy past due Rent, cure any uncured default by Tenant, or
repay Landlord for damages and charges for which Tenant is legally
liable under this Lease or resulting from Tenant’s breach of
this Lease. If Landlord uses the Security Deposit, Tenant shall on
demand restore the Security Deposit to its original amount and such
use by Landlord of the Security Deposit shall not constitute a cure
of the existing event of default until such time as the entire
amount owing to Landlord is paid in full and the Security Deposit
is fully restored. Provided that Tenant has performed all of its
obligations hereunder, Landlord shall return any unapplied portion
of the Security Deposit to Tenant within 30 days after the later to
occur of: (A) the date Tenant surrenders possession of the
Premises to Landlord in accordance with this Lease; or (B) the
Expiration Date. Tenant does hereby authorize Landlord to withhold
from the Security Deposit all amounts allowed by Law and the amount
reasonably anticipated by Landlord to be owed by Tenant as a result
of an underpayment of Tenant’s Pro Rata Share of any Excess
Operating Expenses for the final year of the Term. To the fullest
extent permitted by applicable Law, Tenant agrees that the
provisions of this Article 6 shall supersede and replace all
statutory rights of Tenant under applicable Law regarding the
retention, application or return of security deposits. If Landlord
transfers its interest in the Premises, Landlord shall assign the
Security Deposit to the transferee and, following the assignment
and the delivery to Tenant of an acknowledgement of the
transferee’s responsibility for the Security Deposit if
required by Law, 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.
7. Services Furnished by
Landlord .
A. Standard
Services . Subject to the provisions of this Lease,
Landlord agrees to furnish (or cause a third party provider to
furnish) the following services to Tenant during the
Term:
(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 required by governmental authority or as Landlord
determines are standard for the Building. Tenant, upon such notice
as is reasonably required by Landlord, and subject to the capacity
of the Building systems, may request HVAC service during hours
other than Normal Business Hours. Tenant shall pay Landlord for
such additional service at a rate equal to $25.00 per operating
hour per floor (the “ Hourly HVAC Charge
” ). Landlord shall have the right, upon 30 days prior
written notice to Tenant, to adjust the Hourly HVAC Charge from
time to time, but not more than once per calendar year, based
proportionately upon increases in HVAC costs, which costs include
utilities, taxes, surcharges, labor, equipment, maintenance and
repair.
(3) Maintenance and repair of
the Property as described in Section 9.B .
(4) Janitorial service five
days per week (excluding Holidays), as determined by Landlord. If
Tenant’s use of the Premises, 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, subject
to proper authorization and Landlord’s policies and
procedures for use of the elevator(s) in the Building.
(6) Exterior window washing
at such intervals as determined by Landlord.
(7) Electricity to the
Premises for general office use, in accordance with and subject to
the terms and conditions in Article 8 .
B. Service
Interruptions . For purposes of this Lease, a “
Service Failure ” shall mean any interruption,
suspension or termination of services being provided to Tenant by
Landlord or by
third-party providers,
whether engaged by Tenant or pursuant to arrangements by such
providers with Landlord, which are due to (1) the application
of Laws; (2) the failure, interruption or malfunctioning of
any electrical or mechanical equipment, utility or other service to
the Building or Property; (3) the performance of repairs,
maintenance, improvements or alterations; or (4) the
occurrence of any other event or cause whether or not within the
reasonable control of Landlord. No Service Failure shall render
Landlord liable to Tenant, constitute a constructive eviction of
Tenant, give rise to an abatement of Rent, except as specifically
provided herein, or relieve Tenant from the obligation to fulfill
any covenant or agreement. Commencing on the 3 rd consecutive Business Day of any Service
Failure within Landlord’s control, i.e. , caused by
Landlord’s negligence or willful misconduct, (unless the
Service Failure is caused by a fire or other casualty, in which
event Section 16 controls), Tenant shall, as its sole
remedy, be entitled to an equitable diminution of Base Rent based
upon the pro rata portion of the Premises which is rendered unfit
for occupancy for the Permitted Use, except to the extent such
Service Failure is caused by a Tenant Party. In no event shall
Landlord be liable to Tenant for any loss or damage, including the
theft of Tenant’s Property (defined in Article 14 ),
arising out of or in connection with any Service Failure or the
failure of any Building safety services, personnel or
equipment.
C. Third Party
Services . If Tenant desires any service which Landlord has
not specifically agreed to provide in this Lease, such as private
security systems or telecommunications services serving the
Premises, Tenant shall procure such service directly from a
reputable third party service provider ( “
Provider ” ) for Tenant’s own
account. Tenant shall require each Provider to comply with the
Building’s rules and regulations, all Laws, and
Landlord’s reasonable policies and practices for the
Building. Tenant acknowledges Landlord’s current policy that
requires all Providers utilizing any area of the Property outside
the Premises to be approved by Landlord and to enter into a written
agreement acceptable to Landlord prior to gaining access to, or
making any installations in or through, such area. Accordingly,
Tenant shall give Landlord written notice sufficient for such
purposes.
8. Use of Electrical Services by
Tenant .
A.
Landlord’s Electrical Service . Subject to the
terms of this Lease, Landlord shall furnish building standard
electrical service to the Premises sufficient to operate customary
lighting, office machines and other equipment of similar low
electrical consumption. Landlord may, at any time and from time to
time, calculate Tenant’s actual electrical consumption in the
Premises by a survey conducted by a reputable consultant selected
by Landlord, all at Tenant’s expense. If such survey does not
indicate above building standard usage by Tenant, Landlord shall
pay the cost of such survey. The cost of any electrical consumption
in excess of that which Landlord determines is standard for the
Building shall be paid by Tenant in accordance with
Section 8.D . The furnishing of electrical services to
the Premises shall be subject to the rules, regulations and
practices of the supplier of such electricity and of any municipal
or other governmental authority regulating the business of
providing electrical utility service. Landlord shall not be liable
or responsible to Tenant for any loss, damage or expense which
Tenant may sustain or incur if either the quantity or character of
the electrical service is changed or is no longer available or no
longer suitable for Tenant’s requirements.
B. Selection of
Electrical Service Provider . Landlord shall have and
retain the sole right to select the provider of electrical services
to the Building and/or the Property. To the fullest extent
permitted by Law, Landlord shall have the continuing right to
change such utility provider. All charges and expenses incurred by
Landlord due to any such changes in electrical services, including
maintenance, repairs, installation and related costs, shall be
included in the electrical services costs referenced in
Section 4.D(10) , unless paid directly by
Tenant.
C.
Submetering . Landlord shall have the continuing
right, upon 30 days written notice, to install a submeter for the
Premises at Tenant’s expense, but such expense shall only be
charged to Tenant if Landlord is installing submeters for all or
substantially all tenants or if Tenant’s electrical
consumption is above building standard. If submetering is installed
for the Premises, Landlord may charge for Tenant’s actual
electrical consumption monthly in arrears for the kilowatt hours
used, a rate per kilowatt hour equal to that charged to Landlord by
the provider of electrical service to the Building during the same
period of time, except as to electricity directly purchased by
Tenant from third party providers after obtaining Landlord’s
consent to the same. In the event Landlord is unable to determine
the exact kilowatt hourly charge during the period of time,
Landlord shall use the average kilowatt hourly charge to the
Building for the first billing cycle ending after the period of
time in question. Even if the Premises are submetered, Tenant shall
remain obligated to pay
Tenant’s Pro Rata Share of the
cost of electrical services as provided in Section 4.B
, except that Tenant shall be entitled to a credit against
electrical services costs equal to that portion of the amounts
actually paid by Tenant separately and directly to Landlord which
are attributable to building standard electrical services
submetered to the Premises. [NOTE: credit for electrical
charges paid according to submeter already covered in last sentence
of this section.]
D. Excess
Electrical Service . Tenant’s use of electrical
service shall not exceed, 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 the installation of utility service upgrades,
meters, submeters, air handlers or cooling units). The costs of any
approved additional consumption (to the extent permitted by Law),
installation and maintenance shall be paid by Tenant.
9. Repairs and Alterations
.
A.
Tenant’s Repair Obligations . Tenant shall keep
the Premises in good condition and repair, ordinary wear and tear
excepted. Tenant’s repair obligations include, without
limitation, repairs to: (1) floor covering and/or raised
flooring; (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 benefit of Tenant whether located in the
Premises or in other portions of the Building;
(6) supplemental air conditioning units, private showers and
kitchens, including hot water heaters, plumbing, dishwashers, ice
machines and similar facilities serving Tenant exclusively;
(7) phone rooms used exclusively by Tenant;
(8) Alterations (defined below) performed by contractors
retained by Tenant, including related HVAC balancing; and
(9) all of Tenant’s furnishings, trade fixtures,
equipment and inventory. Prior to performing any such repair
obligation, Tenant shall give written notice to Landlord describing
the necessary maintenance or repair. Upon receipt of such notice,
Landlord may elect either to perform any of the maintenance or
repair obligations specified in such notice, or require that Tenant
perform such obligations by using contractors approved by Landlord.
All work shall be performed at Tenant’s expense in accordance
with the rules and procedures described in Section 9.C
below. If Tenant fails to make any repairs to the Premises for more
than 15 days after notice from Landlord (although notice shall not
be required if there is an emergency), Landlord may, in addition to
any other remedy available to Landlord, make the repairs, and
Tenant shall pay to Landlord the reasonable cost of the repairs
within 30 days after receipt of an invoice, together with an
administrative charge in an amount equal to 5% 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, including, without limitation, the foundation,
exterior structural walls, roof and structure of the Building;
(2) standard mechanical (including HVAC), electrical, plumbing
and fire/life safety systems serving the Building generally;
(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 (taking
into account the nature and urgency of the repair) for which
Landlord is responsible. If any of the foregoing maintenance or
repair is necessitated due to the acts or omissions of any Tenant
Party (defined in Section 13 ), Tenant shall pay the
costs of such repairs or maintenance to Landlord within 30 days
after receipt of an invoice, together with an administrative charge
in an amount equal to 5% of the cost of the repairs. Landlord
agrees to cause the repairs and replacements to be effected in
compliance with all applicable Laws.
C.
Alterations .
(1) When Consent Is
Required . 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, “
Alterations ” ) without first obtaining
the written consent of Landlord in each instance. However,
Landlord’s consent shall not be required for any Alteration
that satisfies all of the following criteria (a “
Minor Alteration ” ): (a) is of a
cosmetic nature such as painting, wallpapering, hanging pictures
and installing carpeting; (b) is not visible from outside the
Premises or Building; (c) will not affect the systems or
structure of the Building; (d) does not require work to be
performed inside the walls or above the ceiling of the Premises
other than electronic, phone, broadcasting and data cabling work
solely affecting Tenant, and (e) does not require the issuance
of a building permit.
(2) Requirements For
All Alterations, Including Minor Alterations . Prior to
starting work on any Alteration, Tenant shall furnish to Landlord
for review and approval: plans and
specifications; names of proposed
contractors (provided that Landlord may designate specific
contractors with respect to Building systems); copies of contracts;
necessary permits and approvals; evidence of contractors’ and
subcontractors’ insurance; and Tenant’s security for
performance of the Alteration. Changes to the plans and
specifications must also be submitted to Landlord for its approval.
Some of the foregoing requirements may be waived by Landlord for
the performance of specific Minor Alterations; provided that such
waiver is obtained in writing prior to the commencement of such
Minor Alterations. Landlord’s waiver on one occasion shall
not waive Landlord’s right to enforce such requirements on
any other occasion. 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 Alterations 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 out-of-pocket sums paid by Landlord for third party examination
of Tenant’s plans for Alterations. In addition, within 30
days after receipt of an invoice from Landlord, Tenant shall pay to
Landlord a fee equal to 5% of the total cost of such Alterations
for Landlord’s oversight and coordination of any Alterations.
No later than 30 days after completion of the Alterations, Tenant
shall furnish “as-built” plans (which shall not be
required for Minor Alterations), completion affidavits, full and
final waivers of liens, receipts and bills covering all labor and
materials. Provided the extent and complexity of the Alterations is
sufficiently limited, upon Tenant’s prior request, Landlord
will accept “marked-up” plans as the
“as-built” plans required in the preceding sentence.
Tenant shall assure that the Alterations comply with all insurance
requirements and Laws.
(3) Landlord’s
Liability For Alterations . 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. Tenant acknowledges that Landlord is not an
architect or engineer, and that the Alterations will be designed
and/or constructed using independent architects, engineers and
contractors. Accordingly, Landlord does not guarantee or warrant
that the applicable construction documents will comply with Laws or
be free from errors or omissions, or that the Alterations will be
free from defects, and Landlord will have no liability
therefor.
10. Entry by Landlord .
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. Landlord shall have the right to temporarily close
all or a portion of the Premises to perform repairs, alterations
and additions, if reasonably necessary for the protection and
safety of Tenant and its employees. Except in emergencies, Landlord
will not close the Premises if the work can reasonably be completed
on weekends and after Normal Business Hours; provided, however,
that Landlord is not required to conduct work on weekends or after
Normal Business Hours if such work can be conducted without closing
the Premises. Entry by Landlord for any such purposes shall not
constitute a constructive eviction or, subject to
Section 7.B , entitle Tenant to an abatement or
reduction of Rent.
11. Assignment and
Subletting .
A.
Landlord’s Consent Required . Subject to the
remaining provisions of this Article 11 , but
notwithstanding anything to the contrary contained elsewhere in
this Lease, Tenant shall not assign, transfer or encumber any
interest in this Lease (either absolutely or collaterally) or
sublease 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. Without limitation, Tenant agrees 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 is a governmental organization or present occupant of
the Property (unless Landlord is unable to accommodate such present
occupant’s need for additional space in the Building of a
size comparable to that portion of the Premises covered by the
proposed Transfer), or Landlord is otherwise engaged in lease
negotiations with the proposed transferee for other premises in the
Property; (3) any event of default exists under this Lease;
(4) any portion of the Building or Premises would likely
become subject to additional or different Laws as a consequence of
the proposed Transfer; (5) the proposed transferee’s use
of the Premises conflicts with the Permitted Use or any
exclusive usage rights granted to any
other tenant in the Building; (6) the use, nature, business,
activities or reputation in the business community of the proposed
transferee (or its principals, employees or invitees) does not meet
Landlord’s standards for Building tenants; (7) either
the Transfer or any consideration payable to Landlord in connection
therewith adversely affects the real estate investment trust
qualification tests applicable to Landlord or its Affiliates; or
(8) the proposed transferee is or has been involved in
litigation with Landlord or any of its Affiliates. Notwithstanding
anything to the contrary contained in the immediately preceding
sentence, in the event Tenant is in default under the Lease at the
time Tenant requests Landlord’s consent to Transfer, Landlord
shall notify Tenant in writing of such default, and Tenant shall be
allowed to cure such default during any cure period applicable to
the default. Any deadlines set forth regarding Tenant’s
request for consent shall be tolled until the expiration of such
cure period. In the event Tenant fails to cure such default during
any applicable cure period, Landlord may deny Tenant’s
request to Transfer in addition to pursuing any and all remedies
available to Landlord. 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 is voidable at
Landlord’s option.
B. Consent
Parameters/Requirements . As part of Tenant’s request
for, and as a condition to, Landlord’s consent to a Transfer,
Tenant shall provide Landlord with financial statements for the
proposed transferee, a complete copy (unexecuted) of the proposed
assignment or sublease and other contractual documents, and such
other information as Landlord may reasonably request. Other than in
connection with (1) a Permitted Transfer, or (2) a
Transfer where less than twelve months will remain in the Term of
this Lease at the expiration of the Transfer ( e.g. , a
sublease with a term that expires within 12 months of the
Expiration Date), Landlord shall then have the right (but not the
obligation) to terminate this Lease as of the date the Transfer
would have been effective ( “ Landlord
Termination Date ” ) with respect to the
portion of the Premises which Tenant desires to Transfer. Landlord
shall provide written notice to Tenant of its election to terminate
this Lease ( “ Landlord’s Termination
Notice ” ). Tenant shall have the right to
withdraw its request for Landlord’s consent to the proposed
Transfer ( “ Withdrawal Right
” ), provided Tenant exercises such Withdrawal Right
within 5 Business Days after receipt of Landlord’s
Termination Notice. If Tenant timely exercises its Withdrawal
Right, the Lease shall continue in full force and effect as if
Tenant had not requested Landlord’s consent to the proposed
Transfer. If Tenant does not timely exercise its Withdrawal Right,
Tenant shall vacate such portion of the Premises by the Landlord
Termination Date and upon Tenant’s vacating such portion of
the Premises, the rent and other charges payable shall be
proportionately reduced. 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
a
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