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