EXHIBIT 10.1
THIRD AMENDMENT TO LEASE AGREEMENT
(BUILDING 3 )
THIS THIRD AMENDMENT TO LEASE AGREEMENT (the "Third Amendment") is made
and entered into as of this 23rd day of February, 2004, by and between ▇▇▇▇▇
OPERATING PARTNERSHIP, L.P., a Delaware limited partnership ("Landlord"), and
INTERNET SECURITY SYSTEMS, INC., a Georgia corporation ("Tenant").
WITNESSETH:
WHEREAS, Spring Creek Partners, a Georgia limited liability company
("Spring Creek"), as landlord, and Tenant previously entered into that certain
Lease Agreement dated as of June 8, 2001 (the "Original Lease"), as amended by
that certain First Amendment to Lease Agreement between Spring Creek and Tenant,
dated as of July 1, 2002 (the "First Amendment"), as amended by that certain
Second Amendment to Lease Agreement between Spring Creek and Tenant, dated as of
June 27, 2003 (the "Second Amendment"), and as the Landlord's interest was
assigned pursuant to that certain Assignment and Assumption of Lease between
Spring Creek and Landlord, dated as of June 30, 2003 (the Original Lease, as so
previously amended and assigned, is herein referred to as the "Lease"), pursuant
to the terms of which Tenant has leased those certain "Premises" (as defined in
the Lease) located in ▇▇▇▇▇▇ County, Georgia; and
WHEREAS, Landlord and Tenant now desire to further modify and amend the
Lease to eliminate the "tax stop" and "operating expense stop" components of
Base Rent and in lieu thereof, to provide for Tenant's payment of Taxes separate
and apart from Operating Expenses, to provide for Tenant's payment of Taxes and
Operating Expenses based on Landlord's reasonable estimate of the same, together
with annual reconciliations of the amounts of estimated and actual Taxes and
Operating Expenses, and for certain other purposes, all on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, for and in consideration of the sum of Ten and No/100
Dollars ($10.00) and for other good and valuable consideration in hand paid by
each of the parties hereto to the other, the receipt, adequacy, and sufficiency
of which are hereby acknowledged, Landlord and Tenant do hereby covenant and
agree as follows:
1. Defined Terms. Terms used herein and denoted by their initial
capitalization shall have the meanings set forth in the Lease unless
specifically provided herein to the contrary.
2. Base Monthly Rental. Section 5 of the Original Lease is hereby
deleted in its entirety, and the following Section 5 is hereby inserted in lieu
thereof:
5. BASE MONTHLY RENTAL. Tenant agrees to pay Landlord, by
payments to ▇▇▇▇▇ Operating Partnership, L.P., and delivered to
Landlord at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, promptly on the first day of each month in advance, during the
Term of this Lease, without deduction or set
Building 3 Lease
off, in legal tender, a monthly rental in the initial amount of Twenty
and Eighty-Eight /100 Dollars ($20.88), multiplied by the number of
rentable square feet contained within the Premises from time to time,
and subject to adjustment as set forth in Section 6 below, and dividing
said product by twelve (12) (hereinafter referred to as "Base Monthly
Rental"). If the Term commences on a day other than the first day of a
month, or terminates on a day other than the last day of a month, the
Base Monthly Rental for the first or last partial month shall be
prorated based upon the actual number of days in such a month.
Tenant hereby acknowledges that if any monthly payment of rent
or any monies due hereunder from Tenant shall not be received by
Landlord within five (5) business days after written notice from
Landlord to Tenant that such payment is due, then Tenant shall pay the
Landlord a late charge equal to two and one-half percent (2-1/2%) of
such delinquent amount. Any amounts payable hereunder by Tenant to
Landlord which are not paid within five (5) business days after written
notice from Landlord to Tenant that such payment is due shall bear
interest at the rate of one percent (1%) per month until paid.
3. Base Monthly Rental Adjustment. Section 6 of the Original
Lease is hereby deleted in its entirety, and the following Section 6 is hereby
inserted in lieu thereof:
6. BASE MONTHLY RENTAL ADJUSTMENT. Commencing one year from
the date of the initial Lease term hereof (i.e., commencing June 1,
2004), and continuing on June 1 of each year during the initial and any
renewal term hereof, the Base Monthly Rental, as increased by previous
rental adjustments hereunder, shall be increased by the lesser of the
following: (i) the amount of the CPI Increase, as this term is defined
below; or (ii) two and one-half percent (2-1/2 %).
As used in this Section 3, the term "Lease Year" shall mean
the twelve (12) month period commencing on the Commencement Date for
the initial floor of the Building (i.e., June 1, 2003), and each
successive twelve (12) month period thereafter during the Term. The
term "Subsequent Year" shall mean each Lease Year of the Term following
the first Lease Year. The term "Prior Year" shall mean the Lease Year
prior to the Subsequent Year. The term "Index" shall mean the Consumer
Price Index-Seasonally Adjusted U.S. City Average for All Urban
Consumers (Base Year 1982-1984 = 100) published by the Bureau of Labor
Statistics of the United States Department of Labor. The term
"Comparison Month" shall mean the calendar month which is two (2)
months prior to the first full month of each Subsequent Year in
question. On the first day of each Subsequent Year, the CPI Increase
shall be calculated as follows: the Base Monthly Rental shall be
increased to an amount equal to the Base Monthly Rental for the first
Lease Year plus an amount equal to the product of ten (10) times the
percentage increase in the Index for the Comparison Month as compared
to the Index for the Base Month multiplied by Base Monthly Rental for
the first Lease Year; provided, however, in no event shall Base Monthly
Rental for a Subsequent Year be less than Base Monthly Rental
applicable to the Prior Year. In the event the base year (1982-1984
Building 3 Lease
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= 100) used in computing the Index is changed, the figures used in
making the adjustment above shall be changed accordingly. Likewise, if
the Index is discontinued, the index increase shall be in accordance
with an industry wide standard for measuring the cost of living
increase and used at the time of such discontinuation acceptable to
Landlord.
An estimated annual rent schedule of the Base Rental Amounts,
assuming an annual escalation of two and one-half percent (2-1/2 %)
per year in Base Rental occurs pursuant to this Section 6, is set forth
in the illustrative chart below:
AMOUNT OF
BASE MONTHLY AMOUNT OF
RENTAL SUBJECT ANNUAL BASE
BASE TO RENTAL SUBJECT
MONTHLY ASSUMPTIONS TO ASSUMPTIONS
RENTAL SET FORTH SET FORTH
LEASE YEAR ANNUAL RATE BELOW BELOW
---------------------------------------------------------------------------------
First Lease Year
06/01/03 - 08/31/03 $20.88 $ 32,016.00 $ 384,192.00
09/01/03 - 11/30/03 $20.88 $ 59,856.00 $ 718,272.00
12/01/03 - 05/31/04 $20.88 $ 87,696.00 $1,052,352.00
Second Lease Year (6/01/04-5/31/05) $21.40 $ 89,880.00 $1,078,560.00
Third Lease Year (6/01/05-5/31/06) $21.94 $ 92,148.00 $1,105,776.00
Fourth Lease Year (6/01/06-5/31/07) $22.49 $ 94,458.00 $1,133,496.00
Fifth Lease Year (6/01/07-5/31/08) $23.05 $ 96,810.00 $1,161,720.00
Sixth Lease Year (6/01/08-5/31/09) $23.63 $ 99,246.00 $1,190,952.00
Seventh Lease Year (6/01/09-5/31/10) $24.22 $ 101,724.00 $1,220,688.00
Eighth Lease Year (6/01/10-5/31/11) $24.83 $ 104,286.00 $1,251,432.00
Ninth Lease Year (6/01/11-5/31/12) $25.45 $ 106,890.00 $1,282,680.00
Tenth Lease Year (6/01/12-5/31/12) $26.09 $ 109,578.00 $1,314,936.00
The foregoing reflects that the Premises were completed and
occupied in the sequence of first floor, 18,400 square feet; second
floor, 16,000 square feet; and third floor, 16,000 square feet, and in
accordance with the targeted Commencement Dates of Special Stipulation
2(b) (without Tenant having accelerated the Target Commencement Dates
to earlier dates) and assumes that the increases in Base Monthly Rental
under Section 6 of the Lease are two and one-half percent (2-1/2 %)
per year for each and every year commencing on the first (1st)
anniversary of the Commencement Date for the initial floor of the
Building.
4. Definition of Taxes. For all purposes under the Lease, the term
"Taxes" shall have the meaning ascribed thereto in the fifth (5th) item
appearing on the first page of Exhibit "E" (Operating Expenses - Definitions)
attached to the Original Lease to the end that the term "Taxes" shall mean and
refer to all taxes (ad valorem and otherwise), assessments and governmental
charges, whether federal, state, county or municipal, and whether by taxing
districts or authorities presently taxing the Property and the Building, or by
others, subsequently created or otherwise, and any other taxes (other than
federal and state income taxes) and assessments attributable to the Property and
the Building or its operation and any reasonable consultants' fees incurred with
respect
Building 3 Lease
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to issues or concerns involving the taxes of the Building, the Property, or
both. As set forth in the Operating Expense Exclusions in Exhibit "E" attached
to the Original Lease, Taxes shall not include franchise, income, transfer,
inheritance, capital stock taxes or taxes imposed upon or measured by the income
of the Landlord.
5. Modification of Definition of Operating Expenses. Effective as of
the first day of the first full calendar month immediately following the
execution and delivery of this Third Amendment by Landlord and Tenant (the
"Effective Date"), the term "Operating Expenses", as defined in Exhibit "E"
(Operating Expenses - Definitions) attached to the Original Lease, shall no
longer include Taxes, nor shall Taxes be included within Remaining Rental; and
from and after the Effective Date, Taxes shall be apportioned and shall be
payable by Tenant as set forth in this Second Amendment. Accordingly, Exhibit
"E" attached to the Original Lease is hereby deleted, and Exhibit "E" attached
to this Second Amendment is hereby inserted in lieu thereof, effective as of the
Effective Date.
6. Additional Rent, Operating Expense Adjustment and Taxes. Section 8
of the Original Lease is hereby deleted in its entirety, and the following
Section 8 is hereby inserted in lieu thereof:
8. ADDITIONAL RENT, OPERATING EXPENSE ADJUSTMENT, TAXES.
(a) In addition to Tenant's Base Monthly Rental, Tenant shall
pay to Landlord as additional rent an amount equal to Tenant's
proportionate share of Taxes and Operating Expenses for the Premises.
For purposes hereof, the term "Tenant's proportionate share" shall be
the rentable area of the Premises divided by the rentable area of the
Building; it being specifically understood and agreed that from and
after December 1, 2003 (the date on which Tenant became obligated to
commence the payment of Rent on the third and final floor of the
Building) and throughout the balance of the Lease Term, Tenant's
proportionate share shall be one hundred percent (100%). For the
purpose of this Section B, Operating Expenses are defined in Exhibit
"E" of this Lease. In addition, Operating Expenses shall be adjusted
and grossed up so as to show actual Operating Expenses without
computing or taking into account reduced costs because of first year
warranties on materials and equipment.
(b) Subject to the limitations contained in Special
Stipulation 3 of the Original Lease, as affected by Section 12 of the
First Amendment, Tenant shall pay, as additional rent, all of the Taxes
on the Property and the Building for each calendar year (or portion
thereof) during the Term of this Lease. Landlord shall provide to
Tenant a good faith estimate of the total amount of Taxes for each
calendar year (or part thereof) during the Term, and Tenant shall pay
one-twelfth (1/12th) of the amount of estimated Taxes in advance on the
first day of each month during the Term of this Lease. The parties
shall reconcile Tenant's estimated payments on account of Taxes with
the actual Taxes for such year as hereinafter set forth.
Building 3 Lease
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(c) Landlord also shall provide to Tenant a good faith
estimate of the Operating Expenses for each calendar year (or part
thereof) during the Term, and Tenant shall pay one-twelfth (1/12th) of
the amount of estimated Operated Expenses in advance on the first day
of each month during the Term of this Lease. The parties shall
reconcile Tenant's estimated payments on account of Operating Expenses
with the actual Operating Expenses for such year as hereinafter set
forth.
(d) If during any calendar year of the Term of this Lease, the
occupancy of the rentable area of the Building averages less than one
hundred percent (100%), then it is agreed that the Operating Expenses
and Taxes will be adjusted for such year so that all such Operating
Expenses and Taxes shall be computed as though the rentable area of the
Building has been one hundred percent (100%) occupied for such calendar
year. All such expense categories will be accounted for and reported in
accordance with generally accepted accounting principles.
(e) At any time during the Term of this Lease but not later
than fifteen (15) days prior to the date an additional rental payment
is due pursuant to this Section 8, Landlord may deliver to Tenant a
written estimate (or revised estimate) of Taxes or Operating Expenses,
or both, which may be reasonably anticipated hereunder, such estimate
(or revised estimate) to be divided by the number of months remaining
in the calendar year; and Tenant shall pay as additional rental to
Landlord promptly on the first day of each month in advance without
deduction or set off in legal tender the monthly amount called for
under such estimate (or revised estimate) from Landlord to Tenant for
those months for which such additional rental is due pursuant to this
Section 8. Any such written estimate (or revised estimate) from
Landlord to Tenant, as contemplated in this subsection, may also
include amounts reasonably estimated by Landlord to be due as a result
of Landlord's replacing light bulbs and fixtures in the Premises, as
contemplated in Section 14 of this Lease, or as a result of Landlord's
paying utility bills on behalf of Tenant and thereafter receiving
reimbursement from Tenant for such payments by Landlord on Tenant's
behalf, as contemplated under Section 17 of this Lease. SEE SPECIAL
STIPULATION 24.
(f) Statements showing the actual Operating Expenses and the
actual Taxes for the Building (hereinafter referred to as "Statement of
Actual Adjustment") shall be delivered by Landlord to Tenant within one
hundred twenty (120) days after the end of any calendar year in which
additional rental was paid or due by Tenant under provisions hereof.
Within thirty (30) days after written notice by Landlord to Tenant of
such Statement of Actual Adjustment, Tenant shall pay to Landlord the
amount of any additional rent shown as being due and unpaid thereon.
Should such Statement of Actual Adjustment show the Tenant had paid to
Landlord an aggregate amount in excess of the additional rental due for
the preceding calendar year and Tenant is not then in default
hereunder, Landlord shall refund the amount of overpayment.
Building 3 Lease
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(g) If the Term of this Lease begins on a day other than the
first day of the calendar year, or should this Lease terminate on a day
other than the last day of the calendar year, the amount shown as due
by Tenant on the Statement of Actual Adjustment shall reflect a
proration based on the proportion that the number of days this Lease
was in effect during such calendar year bears to 360. Landlord's right
to payment by Tenant of the Operating Expenses and Taxes shall survive
the termination of this Lease.
(h) Provided Tenant is not in default under the terms of this
Lease, Tenant shall have the right to inspect Landlord's books and
records with respect to Operating Expenses and Taxes for any preceding
calendar year. This inspection shall be completed at the Tenant's sole
cost and expense by independent, certified public accountants
practicing for an accounting firm of national prominence and for the
exclusive purpose of determining whether Landlord has complied with the
terms of this Lease relating to Operating Expenses and Taxes. Should
Tenant's inspection reveal that Landlord has overstated or understated
Operating Expenses or Taxes, an appropriate adjustment will be made. If
Tenant owes any amount to Landlord based on such adjustment, it shall
be paid to Landlord within thirty (30) days after the request therefor;
and if Landlord owes any amount to Tenant based on such adjustment,
such amount shall be credited against the rent next coming due under
this Lease.
7. Restatement of Special Stipulation 13. Special Stipulation 13 of the
Original Lease is hereby deleted in its entirety, and the following Special
Stipulation 13 is hereby inserted in lieu thereof:
13. At any time the Base Monthly Rental Rate changes as a
result of any provision of this Lease, then Tenant agrees to execute an
amendment to this Lease setting forth the revised rental rates as a
result of such changes if requested to do so by Landlord; provided,
however, that any such amendment shall not change any other substantive
provision of this Lease.
8. Tax Abatement and Tax Gross-Up Provision. Landlord and Tenant
mutually acknowledge and agree that prior to the date of this Third Amendment,
Tenant has obtained a certain property tax abatement with respect to the
Premises as contemplated in Special Stipulation 23 of the Original Lease, as
restated in Section 19 of the First Amendment pursuant to a sale-leaseback
taxable bond transaction comparable to that certain sale-leaseback transaction
effected by and between Mount ▇▇▇▇▇▇ Place Partners, LLC and the Development
Authority of ▇▇▇▇▇▇ County (the "Authority") in respect of the premises leased
by Tenant pursuant to the Buildings 1 and 2 Lease. Landlord and Tenant further
acknowledge and agree that the provisions of this Third Amendment with respect
to the elimination of the "tax stop" component of Base Rent and Tenant's payment
of Taxes separate and apart from Operating Expenses secure for the benefit of
Tenant any tax savings achieved by Tenant as a result of such property tax
abatements as contemplated under Special Stipulation 23 of the Original Lease,
as restated in Section 19 of the First Amendment. Accordingly, from and after
the Effective Date, Special Stipulation 23 of the Original Lease, as restated in
Section 19 of the First Amendment, shall be deemed deleted in its entirety.
Landlord agrees, upon the request of Tenant and at Tenant's sole cost and
expense
Building 3 Lease
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(including, without limitation, the agreement of Tenant to pay or reimburse
Landlord's actual and reasonable attorneys' fees and expenses incurred in
connection with any such endeavor), to cooperate with Tenant in maintaining and
continuing the benefits of any such tax abatement for the Premises for so long
as may be permissible under Georgia law. It is expressly understood and agreed
that Landlord makes no representations or warranties of any kind whatsoever in
respect of any tax abatement agreement that heretofore or hereafter may be
obtained by Tenant; it being Landlord's sole obligation, at no cost or expense
to Landlord, to cooperate in good faith with Tenant, at Tenant's expense, in
obtaining and maintaining a tax abatement for the Premises for so long as may be
permissible under Georgia law. The failure or inability of Tenant to obtain,
maintain and/or continue any such tax abatement for the Premises shall in no
event affect the obligations of Tenant under this Lease.
9. Deletion of Section 6 of First Amendment. Section 6 of the First
Amendment captioned "Operating Expenses of the Base Year," is hereby deleted in
its entirety.
10. Roll-Back Taxes. If and to the extent the Premises were to be
subjected to a "rollback" of Taxes for any period during Tenant's tax abatement
period (notwithstanding any provisions of Tenant's tax abatement agreement to
the contrary), Landlord and Tenant, upon the request of either party, shall make
such adjustments to Taxes with respect to any periods which may be subject to
any such rollback of Taxes so as to ensure that Tenant's obligation shall be the
payment of Tenant's proportionate share of any Taxes during the Term of this
Lease. Nothing contained herein shall affect Tenant's rights or Landlord's
obligations pursuant to the first grammatical paragraph of Section 17(a) of the
original Lease with respect to the adjustment of additional rental in the event
Tenant elects to provide its own janitorial services to the Premises.
11. Miscellaneous. Except as modified by this Third Amendment, the
Lease shall otherwise remain unmodified and in full force and effect and the
parties do hereby ratify and confirm the terms thereof. In the event of conflict
or inconsistency between the terms and conditions of the Lease and the terms and
conditions of this Third Amendment, the terms of this Third Amendment shall
control and prevail and govern the rights, liabilities and obligations of the
parties. This Third Amendment may be executed in counterparts and/or with
counterpart signature pages, all of which together shall constitute a single
agreement.
[SIGNATURES BEGIN ON NEXT PAGE]
Building 3 Lease
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IN WITNESS WHEREOF, the parties, through their duly authorized
officers, have executed this Second Amendment the day and year first above
written.
"TENANT":
INTERNET SECURITY SYSTEMS, INC.,
a Georgia corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: CFO
Attest: /s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Secretary
[CORPORATE SEAL]
"LANDLORD":
▇▇▇▇▇ OPERATING PARTNERSHIP, LP
A Delaware limited partnership
By: ▇▇▇▇▇ Real Estate Investment Trust, Inc.
A Maryland corporation, its general partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (SEAL)
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President
Building 3 Lease
For Ten and No/100 Dollars ($10.00) and other good and valuable
consideration in hand paid by Landlord to Internet Security Systems, Inc., a
Delaware corporation (successor by name change to ISS Group, Inc., a Delaware
corporation) ("Guarantor"), the receipt and sufficiency of which are hereby
acknowledged by Guarantor, Guarantor agrees that Guarantor's Guaranty Agreement
of the Lease dated November 8, 1999 (the "Guaranty") shall remain in full force
and effect and shall constitute a Guaranty of the Lease, as amended by this
Third Amendment to Lease Agreement. Guarantor, through its duly authorized
officers, join in the execution provisions of this Third Amendment this 23rd day
of February, 2004, for the purpose of reaffirming its guaranty obligations, as
amended by this Third Amendment.
"GUARANTOR":
Signed, sealed and delivered INTERNET SECURITY SYSTEMS, INC.,
in the presence of: a Delaware corporation
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------- ------------------------------------
Unofficial Witness Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: CFO
/s/ ▇▇▇▇▇ ▇. Price
--------------------------------
Notary Public
Attest:
[NOTARIAL SEAL]
By: /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Asst. Secretary
[CORPORATE SEAL]
Building 3 Lease
EXHIBIT "E"
MOUNT ▇▇▇▇▇▇ PLACE
OPERATING EXPENSES - DEFINITIONS
"Operating Expenses" for or attributable to the Premises shall mean the
operating costs and expenses for the Property and the Building, including all
expenses, costs and disbursements of every kind and nature, which Landlord shall
(i) pay and/or; (ii) become obligated to pay, including, but not limited to, the
following:
- Wages and salaries of all employees engaged in the operation
and maintenance of the Property and Building, including, but
not limited to, taxes, insurance and benefits relating
thereto;
- All supplies and materials used in the operation and
maintenance of the Property and Building;
- Cost of all service agreements and maintenance for the
Property and Building and the equipment therein, including,
but not limited to, trash removal, alarm services, window
cleaning, janitorial service, HVAC maintenance, elevator
maintenance and grounds maintenance;
- Cost of all insurance relating to the Property and Building,
including, but not limited to, the cost of casualty and
liability insurance applicable to the Property and Building
and Landlord's personal property used in connection therewith;
- Cost of repairs and general maintenance of the interior and
exterior of the Property and Building (including, but not
limited to, glass breakage), parking areas and landscaping;
- A management fee for general operation and management of the
Property and Building, such management fee to be no greater
than three percent (3%) of Base Monthly Rental net of
electricity for the Term of this Lease; and
- An amortization cost due to any capital expenditures incurred
(i) which reduce or limit Operating Costs of the Property and
Building, if such reduction or limitation inures to Tenant's
benefit (but only to the extent and in the amount that such
Operating Costs of the Property and Building are reduced);
(ii) which may be required by governmental authority or by
Landlord's insurance carrier; or (iii) which are designed to
protect or enhance the health, safety or welfare of the
tenants in the Building or their invitees.
MOUNT ▇▇▇▇▇▇ PLACE
OPERATING EXPENSE EXCLUSIONS
1. Depreciation of the Building, amortization and other non-cash charges;
2. The cost of any alteration, additions, changes or decorations which are
made in order to prepare space (including Premises) for Tenant's
occupancy;
3. The cost of performing work or furnishing services to or for any
Tenant, other than Tenant, at Landlord's expense, to the extent that
such work or service exceeds or is more favorable than comparable work
or service provided to Tenant at Landlord's expense;
4. The cost (including, without limitation, attorney's fees and
disbursements) of any judgment, settlement or arbitration award
resulting from any tort liability;
5. The general overhead of Landlord and labor costs and all other
compensation of all administrative personnel, officers, executives and
staff members of Landlord or Landlord's agents above the grade of
building management or engineer;
6. The cost of installing, operating and maintaining any specialty service
such as an observatory, broadcasting facility, luncheon club, athletic
or recreational club;
7. The costs of defects in the construction, design or equipping of the
Building with respect to the mechanical systems of the Building or with
respect to any of the structural components of the Building;
8. Any cost or expense incurred in connection with correcting latent
defects or inadequacies in the Building;
9. The cost of any special heating, ventilating, air-conditioning,
janitorial or other special or extra services provided to tenants
during other than regular business hours;
10. Legal or auditing fees, other than those reasonably incurred in
connection with the maintenance and operation of the Land and Building
or in connection with the preparation of statements required pursuant
to Additional Rent or lease escalation provisions;
11. Any rent, additional rent or any other charge under any lease or
sublease to or assumed directly or indirectly by Landlord;
12. Expenditure on account of Landlord acquisition of air rights;
13. Any Operating Expenses related exclusively to any retail or storage
space in, on or about the Property or appurtenant or adjacent thereto;
14. Any accrued and unfunded pension or other benefits of any personnel;
15. Any amount paid to any affiliate of Landlord to the extent such amount
is in excess of the amount which would be paid in the absence of such
relationship;
16. Advertising, marketing or promotional expenditures;
17. Any costs incurred in the removal, containment, encapsulation, or
disposal of or repair or cleaning or monitoring of areas affected by
any hazardous material including without limitation, asbestos;
18. Costs incurred to correct any misrepresentation by Landlord expressly
made herein;
19. The value or loss of income to Landlord of any space in the Building
which is utilized for the management of the Building;
20. Any compensation paid to clerks, attendants or other persons in
commercial concessions operated by Landlord or any affiliate of
Landlord;
21. Late fees, penalties, interest charges or similar costs incurred by
Landlord;
22. Costs associated with the operation of the business of the legal entity
that constitute Landlord as the same is separate and apart from the
costs of the operation of the Building, including the legal entity
formation, internal accounting and legal matters;
23. Unrecovered expenses resulting directly from the negligence of the
Landlord, its agents, servants or employees;
24. Costs incurred due to the violation by Landlord or any tenant of the
Building of the terms of any lease or any laws, rules, regulations or
ordinances applicable to the Building;
25. Brokerage commissions paid by Landlord in its leasing of the Building;
and
26. The cost of all utilities for the Premises, including the cost of
electricity, gas, water and sewer services, it being acknowledged that
Tenant shall be responsible for the cost of such utilities as provided
in Section 17 and Special Stipulation 24 of the Original Lease.
SIXTH AMENDMENT TO LEASE AGREEMENT
(BUILDINGS 1 & 2)
THIS SIXTH AMENDMENT TO LEASE AGREEMENT (the "Sixth Amendment") is made
and entered into as of this 23rd day of February, 2004, by and between ▇▇▇▇▇
OPERATING PARTNERSHIP, L.P., a Delaware limited partnership ("Landlord"), and
INTERNET SECURITY SYSTEMS, INC., a Georgia corporation ("Tenant").
WITNESSETH:
WHEREAS, Mount ▇▇▇▇▇▇ Place Partners, LLC, a Georgia limited liability
company ("Mount ▇▇▇▇▇▇"), as landlord, and Tenant previously entered into that
certain Lease Agreement dated November 8, 1999 (the "Original Lease"), as
amended by that certain First Amendment to Lease Agreement between Mount ▇▇▇▇▇▇
and Tenant dated December 7, 1999 (the "First Amendment"), and as further
amended by that certain Second Amendment to Lease Agreement between Mount ▇▇▇▇▇▇
and Tenant dated as of November 27, 2000 (the "Second Amendment"), as further
amended by that certain Third Amendment to Lease Agreement between Mount ▇▇▇▇▇▇
Mount ▇▇▇▇▇▇ and Tenant dated as of February __, 2001, and executed on June 8,
2001 (the "Third Amendment"), as further amended by that certain Fourth
Amendment to Lease Agreement between Mount ▇▇▇▇▇▇ and Tenant dated as of August
17, 2001 (the "Fourth Amendment"), as further amended by that certain Fifth
Amendment to Lease Agreement between Mount ▇▇▇▇▇▇ and Tenant, dated as of July
1, 2002 (the "Fifth Amendment"), and as the landlord's interest was assigned
pursuant to that certain Assignment and Assumption of Sublease, dated as of July
1, 2002, between Mount ▇▇▇▇▇▇ and Landlord (the Original Lease, as so previously
amended and assigned, is herein referred to as the "Lease"), pursuant to the
terms of which Tenant has leased those certain "Premises" (as defined in the
Original Lease) located in ▇▇▇▇▇▇ County, Georgia; and
WHEREAS, Landlord and Tenant now desire to further modify and amend the
Lease to eliminate the "tax stop" component of Base Rent and in lieu thereof, to
provide for Tenant's payment of Taxes separate and apart from Operating
Expenses, and for certain other purposes, all on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, for and in consideration of the sum of Ten and No/100
Dollars ($10.00) and for other good and valuable consideration in hand paid by
each of the parties hereto to the other, the receipt, adequacy, and sufficiency
of which are hereby acknowledged, Landlord and Tenant do hereby covenant and
agree as follows:
1. Defined Terms. Terms used herein and denoted by their initial
capitalization shall have the meanings set forth in the Lease unless
specifically provided herein to the contrary.
2. Definition of Taxes. For all purposes under the Lease, the term
"Taxes" shall have the meaning ascribed thereto in the fifth (5th) item
appearing on the first page of Exhibit "E" (Operating Expenses - Definitions)
attached to the Original Lease to the end that the term "Taxes" shall mean and
refer to all taxes (ad valorem and otherwise), assessments and governmental
charges, whether federal, state, county or municipal, and whether by taxing
districts or authorities presently taxing the Property and the Building, or by
others, subsequently created or otherwise, and any other taxes (other than
federal and state income taxes) and assessments attributable to the
ISS Buildings 1 & 2
Property and the Building or its operation and any reasonable consultants' fees
incurred with respect to issues or concerns involving the taxes of the Building,
the Property, or both. As set forth in the Operating Expense Exclusions in
Exhibit "E" attached to the Original Lease, Taxes shall not include franchise,
income, transfer, inheritance, capital stock taxes or taxes imposed upon or
measured by the income of the Landlord.
3. Modification of Definition of Operating Expenses. Effective as of
the first day of the first full calendar month immediately following the
execution and delivery of this Sixth Amendment by Landlord and Tenant (the
"Effective Date"), the term "Operating Expenses", as defined in Exhibit "E"
(Operating Expenses - Definitions) attached to the Original Lease, shall no
longer include Taxes, nor shall Taxes be included within Remaining Rental; and
from and after the Effective Date, Taxes shall be apportioned and shall be
payable by Tenant as set forth in this Sixth Amendment. Accordingly, Exhibit "E"
attached to the Original Lease is hereby deleted, and Exhibit "E" attached to
this Sixth Amendment is hereby inserted in lieu thereof, effective as of the
Effective Date.
4. Additional Rent, Operating Expense Adjustment and Taxes. From and
after the Effective Date, Section 8 of the Original Lease is amended and
restated as follows:
8. ADDITIONAL RENT, OPERATING EXPENSE ADJUSTMENT, TAXES.
(a) The Operating Expense Base Year of the rentable area of
the Building shall be the calendar year of January 1, 2001 through
December 31, 2001. As set forth in Section 4 of the Fifth Amendment,
Landlord and Tenant acknowledge, stipulate and agree that the Building
and the Premises contain the total rentable area of the 238,600
rentable square feet. If in any calendar year after the Operating
Expense Base Year during the Term hereof, the Operating Expenses should
exceed the Operating Expenses of the Base Year, which Base Year
Operating Expenses were $3.37 per rentable square foot, or $804,082.00
(the amount of any such excess being herein referred to as the "Excess
Operating Expenses"), then as additional rent for the calendar year,
Tenant shall pay such excess within thirty (30) days after written
notice from Landlord as to the amount due. For the purpose of this
Paragraph 8, Operating Expenses are defined in Exhibit "E" of this
Lease. In addition, Operating Expenses shall be adjusted and grossed up
so as to show actual Operating Expenses without computing or taking
into account reduced costs because of first year warranties on
materials and equipment.
(b) Subject to the limitations contained in Special
Stipulation 6 of the Original Lease, as affected by Section 10 of the
Fifth Amendment, Tenant shall pay, as additional rent, all Taxes for
each calendar year (or portion thereof) during the Term of this Lease.
Landlord shall provide Tenant with a good faith estimate of the total
amount of Taxes for each calendar year (or part thereof) during the
Term, and Tenant shall pay one-twelfth (1/12th) of the amount of
estimated Taxes in advance on the first day of each month during the
Term of this Lease. The parties
ISS Buildings 1 & 2
2
shall reconcile Tenant's estimated payments on account of Taxes with
the actual Taxes for such year as hereinafter set forth.
(c) At any time during the Term of this Lease but not later
than fifteen (15) days prior to the date an additional rental payment
is due pursuant to this Section 8, Landlord may deliver to Tenant a
written estimate (or revised estimate) of Taxes or Excess Operating
Expenses, or both, which may be reasonably anticipated hereunder, such
estimate (or revised estimate) to be divided by the number of months
remaining in the calendar year; and Tenant shall pay as additional
rental to Landlord promptly on the first day of each month in advance
without deduction or set off in legal tender the monthly amount called
for under such estimate (or revised estimate) from Landlord to Tenant
for those months for which such additional rental is due pursuant to
this Section 8. Any such written estimate (or revised estimate) from
Landlord to Tenant, as contemplated in this subsection, may also
include amounts reasonably estimated by Landlord to be due as a result
of Landlord's replacing light bulbs and fixtures in the Premises, as
contemplated in Section 14 of this Lease, or as a result of Landlord's
paying utility bills on behalf of Tenant and thereafter receiving
reimbursement from Tenant for such payments by Landlord on Tenant's
behalf, as contemplated under Section 17 of this Lease. SEE SPECIAL
STIPULATION 31.
(d) Statements showing the actual Operating Expenses and the
actual Taxes for the Building (hereinafter referred to as "Statement of
Actual Adjustment") shall be delivered by Landlord to Tenant within one
hundred twenty (120) days after the end of any calendar year in which
additional rental was paid or due by Tenant under provisions hereof.
Within thirty (30) days after written notice by Landlord to Tenant of
such Statement of Actual Adjustment, Tenant shall pay to Landlord the
amount of any additional rent shown as being due and unpaid thereon.
Should such Statement of Actual Adjustment show the Tenant had paid to
Landlord an aggregate amount in excess of the additional rental due for
the preceding calendar year and Tenant is not then in default
hereunder, Landlord shall refund the amount of overpayment.
(e) If the Term of this Lease begins on a day other than the
first day of the calendar year, or should this Lease terminate on a day
other than the last day of the calendar year, the amount shown as due
by Tenant on the Statement of Actual Adjustment shall reflect a
proration based on the proportion that the number of days this Lease
was in effect during such calendar year bears to 360. Landlord's right
to payment by Tenant of the Excess Operating Expenses and Taxes shall
survive the termination of this Lease.
(f) Provided Tenant is not in default under the terms of this
Lease, Tenant shall have the right to inspect Landlord's books and
records with respect to Operating Expenses and Taxes for any preceding
calendar year. This inspection shall be completed at the Tenant's sole
cost and expense by independent, certified
ISS Buildings 1 & 2
3
public accountants practicing for an accounting firm of national
prominence and for the exclusive purpose of determining whether
Landlord has complied with the terms of this Lease relating to
Operating Expenses and Taxes. Should Tenant's inspection reveal that
Landlord has overstated or understated Operating Expenses or Taxes, an
appropriate adjustment will be made. If Tenant owes any amount to
Landlord based on such adjustment, it shall be paid to Landlord within
thirty (30) days after the request therefor; and if Landlord owes any
amount to Tenant based on such adjustment, such amount shall be
credited against the rent next coming due under this Lease.
5. Base Monthly Rental. After giving effect to the removal of Taxes
from Operating Expenses and Remaining Rental as set forth in this Sixth
Amendment, the Net Rental annual rate and the Base Monthly Rental annual rate,
assuming an annual escalation of two and one-half percent (2-1/2%) per year in
Net Rental occurs pursuant to Section 6 of the Original Lease, are set forth in
the illustrative chart below:
AMOUNT OF
BASE MONTHLY
RENTAL AMOUNT OF
SUBJECT TO ANNUAL BASE
BASE MONTHLY ASSUMPTIONS RENTAL SUBJECT
NET RENTAL REMAINING RENTAL SET FORTH TO ASSUMPTIONS
LEASE YEAR ANNUAL RATE RENTAL RATE ANNUAL RATE ABOVE SET FORTH ABOVE
---------- ----------- ----------- ----------- ----- ---------------
See Lease See Lease
First Lease Year (11/18/00-11/30/01) $16.1800 $4.87 $21.0500 prior to prior to date
date hereof hereof
Second Lease Year (12/1/01-11/30/02) $16.5845 $4.87 $21.4545 $426,586.98(1) $5,119,043.70(1)
Third Lease Year (12/1/02-11/30/03) $16.9991 $4.87 $21.8691 $434,830.61 $5,217,967.26
Fourth Lease Year (12/01/03-1/31/04) $17.4241 $4.87 $22.2941 $443,281.02 $ 886,562.04(2)
Fourth Lease Year (2/1/04-11/30/04) $17.4241 $3.37 $20.7941 $413,456.02 $4,134,560.20(3)
Fifth Lease Year (12/1/04-11/30/05) $17.8597 $3.37 $21.2297 $422,117.20 $5,065,406.42
Sixth Lease Year (12/1/05-11/30/06) $18.3062 $3.37 $21.6762 $430,995.11 $5,171,941.32
Seventh Lease Year (12/1/06-11/30/07) $18.7638 $3.37 $22.1338 $440,093.72 $5,281,124.68
Eighth Lease Year (12/1/07-11/30/08) $19.2329 $3.37 $22.6029 $449,421.00 $5,393,051.94
Ninth Lease Year (12/1/08-11/30/09) $19.7138 $3.37 $23.0838 $458,982.89 $5,507,794.68
Tenth Lease Year (12/1/09-11/30/10) $20.2066 $3.37 $23.5766 $468,781.40 $5,625,376.76
Eleventh Lease Year (12/1/10-11/30/11) $20.7118 $3.37 $24.0818 $478,826.46 $5,745,917.48
Twelfth Lease Year (12/1/11-11/30/12)(4) $21.2296 $3.37 $24.5996 $489,122.05 $5,869,464.56
Last Six Months (12/1/12-5/31/13)(4) $21.2296 $3.37 $24.5996 $489,122.05 $5,869,464.56
--------------
(1) Based on Tenant's occupancy of 238,600 rentable square feet, commencing as
of August 1, 2002. See Sections 4 and 6 of the Fifth Amendment regarding
Tenant's occupancy and payment of Base Monthly Rental, as of July 1, 2002 and
continuing through July 31, 2002, calculated on the basis of 215,500 rentable
square feet.
(2) Based on two (2) months' Base Rental.
(3) Based on ten (10) months' Base Rental and assumes that the "Effective Date",
for purposes of this Sixth Amendment, is February 1, 2004.
(4) Nothing contained in this illustrative chart is intended to modify the
expiration date of the Lease, which expiration date shall continue to be
governed by and subject to adjustment as provided in Section 2 of the Original
Lease, as replaced in the Third Amendment.
ISS Buildings 1 & 2
4
The foregoing chart does not take into account any Operating Expense
Differential, Taxes or other amounts payable by, or reimbursable to, Tenant
pursuant to the Lease, including without limitation Sections 8, 14 and 17 and
Special Stipulation 31 of the Lease. The foregoing chart replaces and supersedes
all prior charts contained in the Lease with respect to all periods from and
after the Effective Date, but shall not affect the rent payable by Tenant prior
to the date hereof with respect to Tenant's staged occupancy of the Premises.
7. Operating Expenses of the Base Year. From and after the Effective
Date, Section 7 of the Fifth Amendment shall be deemed amended and restated as
follows:
7. Operating Expenses of the Base Year. Landlord and Tenant
acknowledge, stipulate and agree that the Operating Expenses of the
Base Year, as adjusted and grossed up as provided in the Lease,
including Section 8 and Special Stipulation 30 thereof, were $4.87 per
rentable square foot of the Premises, inclusive of $3.37 per rentable
square foot, or $806,468.00 (representing the product of $3.37 per
square foot, multiplied by 238,600 rentable square feet contained
within the Premises) for all Operating Expenses other than Taxes (said
expenses being herein referred to as the "Non-Tax Operating Expenses"
and the Base Year amount thereof being referred to as the "Non-Tax
Expense Base Year Amount"), and $1.50 per rentable square foot, or
$357,900 (representing the product of $1.50 per square foot, multiplied
by 238,600 rentable square feet contained within the Premises) for
Taxes (the "Tax Expense Base Year Amount"). The foregoing stipulated
amounts of the Operating Expenses of the Base Year, the Non-Tax Expense
Base Year Amount and the Tax Expense Base Year Amount, shall be deemed
to be final and not subject to adjustment under any circumstances and
without regard to the validity or enforceability of the tax abatement
agreement which has been obtained by Tenant prior to the date hereof.
If and to the extent the Premises were to be subjected to a "rollback"
of Taxes for any period during Tenant's tax abatement period
(notwithstanding any provisions of Tenant's tax abatement agreement to
the contrary), Landlord and Tenant, upon the demand of either party,
shall make such adjustments to Taxes with respect to any periods
subjected to any such rollback of Taxes. Nothing contained herein shall
affect Tenant's rights or Landlord's obligations pursuant to the first
grammatical paragraph of Section 17(a) of the Original Lease with
respect to the adjustment of additional rental in the event Tenant
elects to provide its own janitorial services to the Premises.
8. Tax Abatement and Tax Gross-Up Provision. Landlord and Tenant
mutually acknowledge and agree that prior to the date of this Sixth Amendment,
Tenant obtained certain property tax abatements with respect to the Premises as
contemplated in Special Stipulation 30 of the Original Lease. Landlord and
Tenant further acknowledge and agree that the provisions of this Sixth Amendment
with respect to the elimination of the "tax stop" component of Base Rent and
Tenant's payment of Taxes separate and apart from Operating Expenses secure for
the benefit of Tenant any tax savings achieved by Tenant as a result of such
property tax abatements as contemplated under Special Stipulation 30 of the
Lease. Accordingly, from and after the Effective
ISS Buildings 1 & 2
5
Date, Special Stipulation 30 of the Original Lease, as amended in Section 17 of
the Fifth Amendment, shall be deemed deleted in its entirety. Landlord agrees,
upon the request of Tenant and at Tenant's sole cost and expense (including,
without limitation, the agreement of Tenant to pay or reimburse Landlord's
actual and reasonable attorneys' fees and expenses incurred in connection with
any such endeavor), to cooperate with Tenant in maintaining and continuing the
benefits of any such tax abatement for the Premises for so long as may be
permissible under Georgia law. It is expressly understood and agreed that
Landlord makes no representations or warranties of any kind whatsoever in
respect of any tax abatement agreement that heretofore or hereafter may be
obtained by Tenant; it being Landlord's sole obligation, at no cost or expense
to Landlord, to cooperate in good faith with Tenant, at Tenant's expense, in
obtaining and maintaining a tax abatement for the Premises for so long as may be
permissible under Georgia law. The failure or inability of Tenant to obtain,
maintain and/or continue any such tax abatement for the Premises shall in no
event affect the obligations of Tenant under this Lease.
9. Mount ▇▇▇▇▇▇ Place Reciprocal Easement Agreement. Landlord and
Tenant mutually acknowledge, stipulate and agree that the execution, delivery
and recording of that certain Mount ▇▇▇▇▇▇ Place Reciprocal Easement Agreement,
dated as of July 1, 2002, among Mount ▇▇▇▇▇▇, Spring Creek Partners, LLC, and
the Development Authority of ▇▇▇▇▇▇ County, recorded in Deed Book 32669, Page
234, ▇▇▇▇▇▇ County, Georgia records (the "Mount ▇▇▇▇▇▇ ▇▇▇"), satisfies all
requirements contained in Special Stipulation 32 of the Lease (which is set
forth in the Third Amendment) for the amendment of the Existing Easement
Documents, and that the Mount ▇▇▇▇▇▇ ▇▇▇ constitutes the amendment to the
Existing Easement Documents that is referenced in clause (c) of Section 14 of
the Fifth Amendment, appearing on page 9 of the Fifth Amendment.
10. Actual Commencement Date for the Fifth Floor. Landlord and Tenant
mutually acknowledge, stipulate and agree that the Commencement Date for the
fifth (5th) floor of the Phase II Building occurred on August 1, 2002.
11. Miscellaneous. Except as modified by this Sixth Amendment, the
Lease shall otherwise remain unmodified and in full force and effect and the
parties do hereby ratify and confirm the terms thereof. In the event of conflict
or inconsistency between the terms and conditions of the Lease and the terms and
conditions of this Sixth Amendment, the terms of this Sixth Amendment shall
control and prevail and govern the rights, liabilities and obligations of the
parties. This Sixth Amendment may be executed in counterparts and/or with
counterpart signature pages, all of which together shall constitute a single
agreement.
[SIGNATURES BEGIN ON NEXT PAGE]
ISS Buildings 1 & 2
6
IN WITNESS WHEREOF, the parties, through their duly authorized
officers, have executed this Sixth Amendment the day and year first above
written.
"TENANT":
INTERNET SECURITY SYSTEMS, INC.,
a Georgia corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: CFO
Attest: /s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Secretary
[CORPORATE SEAL]
"LANDLORD":
▇▇▇▇▇ OPERATING PARTNERSHIP, LP
A Delaware limited partnership
By: ▇▇▇▇▇ Real Estate Investment Trust, Inc.
A Maryland corporation, its general partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (SEAL)
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President
ISS Buildings 1 & 2
For Ten and No/100 Dollars ($10.00) and other good and valuable
consideration in hand paid by Landlord to Internet Security Systems, Inc., a
Delaware corporation (successor by name change to ISS Group, Inc., a Delaware
corporation) ("Guarantor"), the receipt and sufficiency of which are hereby
acknowledged by Guarantor, Guarantor agrees that Guarantor's Guaranty Agreement
of the Lease dated November 8, 1999 (the "Guaranty") shall remain in full force
and effect and shall constitute a Guaranty of the Lease, as amended by this
Sixth Amendment to Lease Agreement. Guarantor, through its duly authorized
officers, join in the execution provisions of this Sixth Amendment this 23rd day
of February, 2004, for the purpose of reaffirming its guaranty obligations, as
amended by this Sixth Amendment.
"GUARANTOR":
Signed, sealed and delivered INTERNET SECURITY SYSTEMS, INC.,
in the presence of: a Delaware corporation
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------- ---------------------------------------
Unofficial Witness Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: CFO
/s/ ▇▇▇▇▇ ▇. Price
----------------------------------
Notary Public
Attest:
[NOTARIAL SEAL]
By: /s/ ▇▇▇▇ ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Asst. Secretary
[CORPORATE SEAL]
ISS ▇▇▇▇▇▇▇▇▇ ▇ & ▇
▇▇▇▇▇▇▇ "▇"
▇▇▇▇▇ ▇▇▇▇▇▇ PLACE
OPERATING EXPENSES - DEFINITIONS
"Operating Expenses" for or attributable to the Premises shall mean the
operating costs and expenses for the Property and the Building, including all
expenses, costs and disbursements of every kind and nature, which Landlord shall
(i) pay and/or; (ii) become obligated to pay, including, but not limited to, the
following:
- Wages and salaries of all employees engaged in the operation
and maintenance of the Property and Building, including, but
not limited to, taxes, insurance and benefits relating
thereto;
- All supplies and materials used in the operation and
maintenance of the Property and Building;
- Cost of all service agreements and maintenance for the
Property and Building and the equipment therein, including,
but not limited to, trash removal, alarm services, window
cleaning, janitorial service, HVAC maintenance, elevator
maintenance and grounds maintenance;
- Cost of all insurance relating to the Property and Building,
including, but not limited to, the cost of casualty and
liability insurance applicable to the Property and Building
and Landlord's personal property used in connection therewith;
- Cost of repairs and general maintenance of the interior and
exterior of the Property and Building (including, but not
limited to, glass breakage), parking areas and landscaping;
- A management fee for general operation and management of the
Property and Building, such management fee to be no greater
than three percent (3%) of Base Monthly Rental net of
electricity for the Term of this Lease; and
- An amortization cost due to any capital expenditures incurred
(i) which reduce or limit Operating Costs of the Property and
Building, if such reduction or limitation inures to Tenant's
benefit (but only to the extent and in the amount that such
Operating Costs of the Property and Building are reduced);
(ii) which may be required by governmental authority or by
Landlord's insurance carrier; or (iii) which are designed to
protect or enhance the health, safety or welfare of the
tenants in the Building or their invitees.
MOUNT ▇▇▇▇▇▇ PLACE
OPERATING EXPENSE EXCLUSIONS
1. Depreciation of the Building, amortization and other non-cash charges;
2. The cost of any alteration, additions, changes or decorations which are
made in order to prepare space (including Premises) for Tenant's
occupancy;
3. The cost of performing work or furnishing services to or for any
Tenant, other than Tenant, at Landlord's expense, to the extent that
such work or service exceeds or is more favorable than comparable work
or service provided to Tenant at Landlord's expense;
4. The cost (including, without limitation, attorney's fees and
disbursements) of any judgment, settlement or arbitration award
resulting from any tort liability;
5. The general overhead of Landlord and labor costs and all other
compensation of all administrative personnel, officers, executives and
staff members of Landlord or Landlord's agents above the grade of
building management or engineer;
6. The cost of installing, operating and maintaining any specialty service
such as an observatory, broadcasting facility, luncheon club, athletic
or recreational club;
7. The costs of defects in the construction, design or equipping of the
Building with respect to the mechanical systems of the Building or with
respect to any of the structural components of the Building;
8. Any cost or expense incurred in connection with correcting latent
defects or inadequacies in the Building;
9. The cost of any special heating, ventilating, air-conditioning,
janitorial or other special or extra services provided to tenants
during other than regular business hours;
10. Legal or auditing fees, other than those reasonably incurred in
connection with the maintenance and operation of the Land and Building
or in connection with the preparation of statements required pursuant
to Additional Rent or lease escalation provisions;
11. Any rent, additional rent or any other charge under any lease or
sublease to or assumed directly or indirectly by Landlord;
12. Expenditure on account of Landlord acquisition of air rights;
13. Any Operating Expenses related exclusively to any retail or storage
space in, on or about the Property or appurtenant or adjacent thereto;
14. Any accrued and unfunded pension or other benefits of any personnel;
15. Any amount paid to any affiliate of Landlord to the extent such amount
is in excess of the amount which would be paid in the absence of such
relationship;
16. Advertising, marketing or promotional expenditures;
17. Any costs incurred in the removal, containment, encapsulation, or
disposal of or repair or cleaning or monitoring of areas affected by
any hazardous material including without limitation, asbestos;
18. Costs incurred to correct any misrepresentation by Landlord expressly
made herein;
19. The value or loss of income to Landlord of any space in the Building
which is utilized for the management of the Building;
20. Any compensation paid to clerks, attendants or other persons in
commercial concessions operated by Landlord or any affiliate of
Landlord;
21. Late fees, penalties, interest charges or similar costs incurred by
Landlord;
22. Costs associated with the operation of the business of the legal entity
that constitute Landlord as the same is separate and apart from the
costs of the operation of the Building, including the legal entity
formation, internal accounting and legal matters;
23. Unrecovered expenses resulting directly from the negligence of the
Landlord, its agents, servants or employees;
24. Costs incurred due to the violation by Landlord or any tenant of the
Building of the terms of any lease or any laws, rules, regulations or
ordinances applicable to the Building;
25. Brokerage commissions paid by Landlord in its leasing of the Building;
and
26. The cost of all utilities for the Premises, including the cost of
electricity, gas, water and sewer services, it being acknowledged that
Tenant shall be responsible for the cost of such utilities as provided
in Section 17 and Special Stipulation 31 of the Original Lease.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ OPERATING EXPENSES
(Per Square Foot)
Building Maintenance .71
Janitorial Maintenance .85
Grounds Maintenance .33
Administrative .52
Insurance .13
Management Fee .63
Reserves .20
-----
TOTAL 2000 OPERATING EXPENSES $3.37
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