Exhibit 10.9
FIFTH AMENDMENT TO LEASE
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THIS FIFTH AMENDMENT TO LEASE (this "Amendment") is made and entered
into as of this 14th day of October, 1998 by and between TIAA REALTY, INC., a
Delaware corporation, successor-in-interest to Teachers Insurance and Annuity
Association of America, ("Landlord") and FOCAL COMMUNICATIONS CORPORATION OF
ILLINOIS (formerly known as Focal Communications Corporation), a Delaware
corporation, ("Tenant").
W I T N E S S E T H
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WHEREAS, Landlord's predecessor-in-interest and Tenant have heretofore
entered into that certain lease dated as of December 31, 1996 (the "Original
Lease"), pursuant to which Landlord leased to Tenant 10,236 rentable square feet
located on the lower level (the "Original Space") of the building commonly known
as 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx (the "Building");
WHEREAS, Landlord's predecessor-in-interest and Tenant have heretofore
entered into that certain First Amendment to Lease dated May 14, 1997 (the
"First Amendment") to evidence Tenant's expansion into the additional space of
6,202 rentable square feet on the eighth (8th) floor of the Building (the
"Additional Space"), as more particularly set forth in the First Amendment;
WHEREAS, Landlord's predecessor-in-interest and Tenant entered into
that certain Second Amendment to Lease dated November 15, 1997 (the "Second
Amendment") to evidence Tenant's expansion into the additional space of 4,153
rentable square feet on the eighth (8th) floor of the Building (the "Eighth
Floor Second Additional Space"), collectively (such Additional Space and the
Second Additional Space referred to herein as the "Eighth Floor Space"), as more
particularly set forth in the Second Amendment;
WHEREAS, Landlord's predecessor-in-interest and Tenant entered into
that certain Third Amendment to Agreement of Lease dated March 2, 1998 (the
"Third Amendment") to evidence Tenant's installation of a communication device,
as more particularly set forth in the Third Amendment;
WHEREAS, Landlord's predecessor-in-interest and Tenant entered into
that certain Fourth Amendment to Lease dated April 24, 1998 (the "Fourth
Amendment") to extend the term of the Lease with respect to the Eighth Floor
Space and to evidence Tenant's expansion into the additional space of 11,956
rentable square feet on the Seventh (7th) Floor of the Building (the "Seventh
Floor Space"), as more particularly set forth in the Fourth Amendment (such
Original Lease as amended by the First Amendment, the Second Amendment, the
Third Amendment and the Fourth Amendment and as modified or amended from time to
time, hereafter is called the "Lease");
WHEREAS, Landlord's predecessor-in-interest and Tenant desire to amend
the Lease according to the terms hereof in order to document the leasing of
additional space on the Seventh Floor. This Amendment does not modify the terms
of the Lease with respect to the Original Space, the Seventh Floor Space or the
Eighth Floor Space;
NOW THEREFORE, for and in consideration of the covenants and agreements
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant
hereby mutually agree as follows:
1. Recitals. The foregoing recitals are true and correct and are
incorporated herein by reference.
2. Controlling Language. Insofar as the specific terms and provisions
of this Amendment purport to amend or modify or are in conflict with the
specific terms, provisions and exhibits of the Lease, the terms and provisions
of this Amendment shall govern and control; in all other respects, the terms,
provisions and exhibits of the Lease shall remain unmodified in full force and
effect.
3. Seventh Floor Additional Space/Term. Landlord and Tenant hereby
agree that beginning on the earlier of December 1, 1998 or the date upon which
Tenant commences business operations at the demised premises (the "Seventh Floor
Additional Space Commencement Date"), Landlord shall lease to Tenant
approximately 4,593 rentable square feet of space on the seventh (7th) floor of
the Building as more particularly described on Exhibit A attached hereto (the
"Seventh Floor Additional Space") for the remaining portion of the Seventh Floor
Space Term (as defined in the Fourth Amendment). The Seventh Floor Additional
Space shall be subject to all the terms and conditions of the Lease except to
the extent expressly modified or excluded hereby or herein and shall be included
in the "Premises" as the term is used in the Lease. Landlord and Tenant hereby
acknowledge that notwithstanding anything to the contrary set forth in the
Lease, the Seventh Floor Space Term and the Eighth Floor Space Term will each
end on June 30, 2003, such date being the Seventh Floor Termination Date and the
Eighth Floor Termination Date for all purposes in the Lease.
4. Seventh Floor Additional Space Rent. Effective as of the Seventh
Floor Additional Space Commencement Date and for the duration of the Seventh
Floor Additional Space Term, in addition to (and not in substitution for) the
Rent payable with respect to the Original Space and the Eighth Floor Space and
the Seventh Floor Space under the Lease, Tenant shall pay to Landlord Rent with
respect to the Seventh Floor Additional Space as follows:
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A. Base Rent. Base Rent to be paid in monthly installments in advance
on or before the first day of each month of the Term of this Lease set forth in
the following schedule:
Period Annual Base Rent Monthly Base Rent
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Seventh Floor Additional Space $60,857.25* ($13.25 x 4,593
Commencement Date rentable square feet) $5,071.44
through 6/30/99
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7/1/99 through 6/30/00 $63,153.75 ($13.75 x 4,593
rentable square feet) $5,262.81
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7/1/00 through 6/30/01 $65,450.25 ($14.25 x 4,593
rentable square feet) $5,454,19
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7/1/01 through 6/30/02 $67,746.75 ($14.75 x 4,593
rentable square feet) $5,645.56
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7/1/02 through 6/30/03 $70,043.25 ($15.25 x 4,593
rentable square feet) $5,836.94
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*the parties acknowledge that this is an annualized amount and that tenant will
not be obligated to pay the entire amount, but rather will be responsible for
making monthly payments for the period indicated.
B. Operating Cost Share Rent. Operating Cost Share Rent in an
amount equal to the Tenant's Proportionate Share of the
Operating Costs for the applicable Fiscal Year of the Lease,
paid monthly in advance in an estimated amount.
C. Tax Share Rent. Tax Share Rent in an amount equal to the
Tenant's Proportionate Share of Taxes for the applicable
Fiscal Year of this Lease, paid monthly in advance in an
estimated amount.
The method of billing and payment of Operating Cost Share Rent and Tax Share
Rent are set forth in Section 5 of this Amendment.
Any provision of the Lease or this Amendment to the contrary
notwithstanding, the abatement of Rent payable with respect to the Original
Space pursuant to the Schedule of the Lease shall not apply to the payment of
Rent with respect to the Seventh Floor Additional Space, and such Rent, with
respect to the Seventh Floor Additional Space, shall accrue and Tenant shall be
liable for payment thereof without regard to such abatement provision.
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5. Payment of Operating Cost Share Rent and Tax Share Rent. During the
Seventh Floor Additional Space Term, Tenant shall pay Operating Expenses Share
Rent and Tax Share Rent for the Seventh Floor Additional Space in the manner set
forth below.
A. Payment of Estimated Operating Cost Share Rent and
Tax Share Rent. Landlord shall reasonably estimate
the Operating Costs and Taxes of the Project each
Fiscal Year, generally after the beginning of the
year. Landlord may revise these estimates, but no
more often than twice during any Fiscal Year,
whenever it obtains more accurate information, such
as the final real estate tax assessment or tax rate
for the Project.
Within ten (10) days after notice from Landlord
setting forth an estimate of Operating Costs for a
particular Fiscal Year, Tenant shall pay Landlord an
amount equal to one-twelfth (1/12th) of Tenant's
Proportionate Share of such estimated Operating Costs
for such Fiscal Year, multiplied by the number of
months that have elapsed in the applicable Fiscal
Year to the date of such payment including the
current month, minus payments previously made by
Tenant for the months elapsed during the Term.
Thereafter on the first day of each month, Tenant
shall pay monthly until a new estimate of Operating
Costs is applicable, one-twelfth (1/12th) of Tenant's
Proportionate Share of the estimated Operating Costs.
Within ten (10) days after notice from Landlord
setting forth an estimate of Taxes for a particular
Fiscal Year, Tenant shall pay Landlord an amount
equal to one-twelfth (1/12th) of Tenant's
Proportionate Share of such estimated Taxes,
multiplied by the number of months that have elapsed
during the Term in the applicable Fiscal Year to the
date of such payment, including the current month,
minus payments previously made by Tenant for the
months elapsed. Thereafter on the first day of each
month, Tenant shall pay monthly until a new estimate
of Taxes is applicable, one-twelfth (1/12th) of
Tenant's Proportionate Share of the estimated Taxes.
In no event shall anything contained in this Lease be
construed to allow Landlord to be reimbursed for
greater than one-hundred percent (100%) of the actual
Taxes or Operating Costs.
B. Correction of Operating Cost Share Rent. As soon as
reasonably possible after the end of each Fiscal
Year, Landlord shall deliver to Tenant a report for
such year (the "Operating Cost Report") setting forth
(a) the actual Operating Costs incurred, (b) the
amount of Operating Cost Share Rent due from Tenant,
and (c) the amount of Operating Cost Share Rent paid
by Tenant. Within twenty (20) days after such
delivery, Tenant shall pay to Landlord the amount due
minus the amount paid. If the amount paid exceeds the
amount due, Landlord shall apply the excess to
Tenant's next month's payment of Operating Cost Share
Rent, refunding any
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overage directly to Tenant within a reasonable period
of time after the determination of such overage.
C. Correction of Tax Share Rent. As soon as reasonably
possible after the end of each Fiscal Year, Landlord
shall deliver to Tenant a report for such Fiscal Year
(the "Tax Report") setting forth (a) the actual
Taxes, (b) the amount of Tax Share Rent due from
Tenant, and (c) the amount of Tax Share Rent paid by
Tenant. Within twenty (20) days after such delivery,
Tenant shall pay to Landlord the amount due from
Tenant minus the amount paid by Tenant. If the amount
paid exceeds the amount due, Landlord shall apply the
excess as a credit against Tenant's next month's
payment of Tax Share Rent, refunding any overage
directly to Tenant within a reasonable period of time
after the determination of such overage.
The definition of Taxes and Operating Costs shall be as set forth in
Section 2C of the Original Lease.
"Tenant's Proportionate Share," with respect to the Seventh Floor
Additional Space, for calculating the Operating Cost Share Rent and Tax Share
Rent is 0.7376% (based upon 4,593 rentable square feet in the Seventh Floor
Additional Space and 622,667 rentable square feet in the Building).
6. Condition of the Seventh Floor Additional Space. Landlord is leasing
the Seventh Floor Additional Space to Tenant on the Seventh Floor Additional
Space Commencement Date "AS IS", without any representations or warranties of
any kind (including, without limitation, any express or implied warranties of
merchantability, fitness or habitability) and without any obligation on the part
of Landlord to alter, remodel, improve, repair, or decorate the Premises or any
part thereof.
7. Tenant's Seventh Floor Additional Space Improvements. Tenant shall
improve the Seventh Floor Additional Space, at its own cost and expenses except
as provided herein, in accordance with plans and specifications approved in
advance by Landlord (such improvements are referred to herein as the "Tenant's
Seventh Floor Additional Space Improvements"). Tenant hereby agrees that the
plans and specifications for the Tenant's Seventh Floor Additional Space
Improvements shall comply with all applicable statutes, ordinances, regulations,
laws and codes. Landlord's approval of any of such plans and specifications (or
any modifications or changes thereto) shall not impose upon Landlord or its
agents or representatives any obligation with respect to the design of the
Tenant's Seventh Floor Additional Space Improvements or with respect to the
compliance of such Tenant's Seventh Floor Additional Space Improvements and/or
the plans and specifications therefor with applicable laws, codes, ordinances
and regulations, it being expressly understood that the obligation with respect
to the design of the Tenant's Seventh Floor Additional Space Improvements and
its compliance with applicable laws, codes, ordinances and regulations rests
with the Tenant and the party responsible for preparing such plans and
specifications.
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Tenant's Seventh Floor Additional Space Improvements shall be performed
in accordance with Sections 5(A)(1)-(5), 5(B), 5(C), and 5(D) of the Lease. All
Tenant's Seventh Floor Additional Space Improvements shall be constructed in a
good and workmanlike manner, and only good grades of material shall be used. All
Tenant's Seventh Floor Additional Space Improvements shall be performed in such
a fashion and by such means as necessary to maintain a professional work
environment in the areas surrounding the space to be improved. Tenant shall only
use labor that will work in peace and harmony with other contractors and workers
serving the Building in constructing Tenant's Seventh Floor Additional Space
Improvements. Tenant shall use reasonable efforts to avoid actions which may
unreasonably interfere with or delay the activities of other contractors serving
the Building and other tenants. Tenant shall permit Landlord to observe and
monitor all Tenant's Seventh Floor Additional Space Improvements.
If Tenant completes the Seventh Floor Additional Space Improvements
within six (6) months of the Seventh Floor Additional Space Commencement Date,
then Landlord hereby agrees to provide Tenant an amount not to exceed
seventy-eight thousand eighty-one dollars ($78,081.00) ($17.00 per rentable
square foot x 4,593 rentable square feet) (the "Improvement Allowance") to be
applied to the cost of the Seventh Floor Additional Space Improvements. Landlord
shall deliver the Improvement Allowance, in whole or in part, to Tenant upon
Landlord's receipt of paid invoices for such Seventh Floor Additional Space
Improvements. Any costs incurred by Tenant with respect to the Seventh Floor
Additional Space Improvements in excess of the Improvement Allowance shall be
paid by Tenant. If Tenant is entitled to receive the Improvement Allowance and
the total cost incurred by Tenant in connection with the Seventh Floor
Additional Space Improvements is less than the Improvement Allowance (the
difference being the "Excess Allowance"), then Landlord hereby agrees that, at
Landlord's option, an amount not in excess of Six Thousand, Eight Hundred and
Eighty-Nine and 50/100 Dollars ($6,889.50) ($1.50 x 4,593 rentable square feet)
of such Excess Allowance may be used as a credit against the first installments
of Base Rent falling due after the Seventh Floor Additional Space Commencement
Date or may be paid in cash by Landlord to Tenant, or both.
8. Brokerage Commission. Tenant represents that it has dealt with no
broker in connection with this Amendment other than Xxxxxx-Xxxxxxx Management
Corporation, and that no other broker is entitled to or has made any claims to
any commission or fee in connection with this Amendment. Tenant hereby
indemnifies, defends and holds harmless Landlord and its agents and employees
from all claims of any broker arising through Tenant in connection with this
Amendment.
9. Incorporation of Lease. Landlord and Tenant hereby agree that (a)
this Amendment is incorporated into and made a part of the Lease, (b) any and
all references herein to the Lease shall include this Amendment, and (c) the
Lease and all terms, conditions and provisions of the Lease are in full force
and effect as of the date hereof, except as expressly modified and amended
hereinabove.
10. Defined Terms. All terms capitalized but not defined herein shall
have the same meaning ascribed to such terms in the Lease. The marginal headings
and titles to the paragraphs
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of this Amendment are not a part of this Amendment and shall have no effect upon
the construction or interpretation of any part hereof.
11. Governing Law. This Amendment shall be governed by and construed
under the laws of the State of Illinois.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
LANDLORD: TENANT:
TIAA REALTY, INC. FOCAL COMMUNICATIONS
a Delaware corporation CORPORATION OF ILLINOIS
a Delaware corporation
By: Teachers Insurance and
Annuity Association of America,
a New York corporation,
its authorized representative
By: /s/ S. Xxxx Xxxxxxxx By: /s/ Xxxxx X. Xxxx
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Name: S. Xxxx Xxxxxxxx Name: Xxxxx X. Xxxx
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Title: Title: Executive Vice President
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Exhibit A
[Seventh Floor Floorplan Appears Here]
THE FLORSHEIM TOWER
000 XXXXX XXXXXXX XXXXXXX, XX 00000
TEACHERS INSURANCE AND ANNUITY ASSOCIATION
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XXXXXX-XXXXXXX MANAGEMENT CORPORATION
(000) 000-0000 UPDATED SEPTEMBER 25, 1998
