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EXHIBIT 10.11
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LEASE BY AND BETWEEN
VISUAL NETWORKS, INC.
AND
TA/WESTERN, LLC
a Delaware limited liability company
of
0000 Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
DATED
April 7, 2000
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TABLE OF CONTENTS
PAGE
1. Basic Lease Provisions.................................................. 1
2. Premises................................................................ 3
2.1. Lease of Premises and Definition of Project.................. 3
2.2. Calculation of Size of Building and Premises................. 3
2.3. Common Areas-Defined......................................... 3
3. Term.................................................................... 3
3.1. Term and Commencement Date................................... 3
3.2. Delay in Possession.......................................... 3
3.3. Delays Caused by Tenant...................................... 4
3.4. Tender of Possession......................................... 4
3.5. Early Possession............................................. 4
4. Rent.................................................................... 4
4.1. Base Rent.................................................... 4
4.2. Operating Expense Increases.................................. 4
4.3. Base Rent Increase........................................... 7
5. Security Deposit........................................................ 7
6. Use.................................................................... 7
6.1. Use.......................................................... 7
6.2. Compliance with Law.......................................... 8
6.3. Condition of Premises........................................ 8
7. Maintenance, Repairs and Alterations.................................... 8
7.1. Landlord's Obligations....................................... 8
7.2. Tenant's Obligations......................................... 8
7.3. Alterations and Additions.................................... 9
7.4. Failure of Tenant to Remove Property......................... 10
8. Insurance............................................................... 10
8.1. Insurance-Tenant............................................. 10
8.2. Insurance-Landlord........................................... 10
8.3. Insurance Policies........................................... 11
8.4. Waiver of Subrogation........................................ 11
8.5. Coverage..................................................... 11
9. Damage or Destruction................................................... 12
9.1. Effect of Damage or Destruction.............................. 12
9.2. Definition of Material Damage................................ 12
9.3. Abatement of Rent............................................ 12
9.4. Tenant's Acts................................................ 12
9.5. Tenant's Property............................................ 13
9.6. Waiver....................................................... 13
10. Real and Personal Property Taxes....................................... 13
10.1. Payment of Taxes............................................ 13
10.2. Definition of "Real Property Tax.".......................... 13
10.3. Personal Property Taxes..................................... 13
10.4. Reassessments............................................... 13
11. Utilities.............................................................. 13
11.1. Services Provided by Landlord............................... 13
11.2. Occupant Density............................................ 14
11.3. Hours of Service............................................ 14
11.4. Excess Usage by Tenant...................................... 14
11.5. Interruptions............................................... 14
12. Assignment and Subletting.............................................. 15
12.1. Landlord's Consent Required................................. 15
12.2. Leveraged Buy-Out........................................... 15
12.3. Standard For Approval....................................... 16
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TABLE OF CONTENTS
(Continued)
PAGE
12.4. Additional Terms and Conditions............................. 16
12.5. Additional Terms and Conditions Applicable to Subletting.... 17
12.6. Transfer Premium from Assignment or Subletting.............. 17
12.7. Landlord's Option to Recapture Space........................ 18
12.8. Landlord's Expenses......................................... 18
13. Default; Remedies...................................................... 18
13.1. Default by Tenant........................................... 18
13.2. Remedies.................................................... 19
13.3. Default by Landlord......................................... 20
13.4. Late Charges................................................ 20
13.5. Interest on Past-due Obligations............................ 20
13.6. Payment of Rent and Security Deposit After Default.......... 20
14. Landlord's Right to Cure Default; Payments by Tenant.................. 21
15. Condemnation........................................................... 21
16. Vehicle Parking........................................................ 21
16.1. Use of Parking Facilities................................... 21
16.2. Parking Charges............................................. 21
17. Broker's Fee........................................................... 22
18. Estoppel Certificate................................................... 22
18.1. Delivery of Certificate..................................... 22
18.2. Failure to Deliver Certificate.............................. 22
19. Landlord's Liability................................................... 23
20. Indemnity.............................................................. 23
21. Exemption of Landlord from Liability................................... 24
22. Hazardous Material..................................................... 24
22.1. Definition and Consent...................................... 24
22.2. Duty to Inform Landlord..................................... 24
22.3. Inspection; Compliance...................................... 24
23. Medical Waste.......................................................... 25
23.1. Disposal of Medical Waste................................... 25
23.2. Duty to Inform Landlord..................................... 25
23.3. Inspection; Compliance...................................... 25
24. Tenant Improvements.................................................... 25
25. Subordination.......................................................... 25
25.1. Effect of Subordination..................................... 25
25.2. Execution of Documents...................................... 26
26. Options................................................................ 26
26.1. Definition.................................................. 26
26.2. Options Personal............................................ 26
26.3. Multiple Options............................................ 26
26.4. Effect of Default on Options................................ 26
26.5. Limitations on Options...................................... 26
26.6. Notice of Exercise of Option................................ 26
27. Landlord Reservations.................................................. 27
28. Changes to Project..................................................... 27
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TABLE OF CONTENTS
(Continued)
PAGE
29. Substitution of Other Premises......................................... 27
30. Holding Over........................................................... 28
31. Landlord's Access...................................................... 28
31.1. Access...................................................... 28
31.2. Keys........................................................ 28
32. Security Measures...................................................... 29
33. Easements.............................................................. 29
34. Transportation Management.............................................. 29
35. Severability........................................................... 29
36. Time of Essence........................................................ 29
37. Definition of Additional Rent.......................................... 29
38. Incorporation of Prior Agreements...................................... 29
39. Amendments............................................................. 29
40. Notices................................................................ 30
41. Waivers................................................................ 30
42. Covenants.............................................................. 30
43. Binding Effect; Choice of Law.......................................... 30
44. Attorneys' Fees........................................................ 30
45. Auctions............................................................... 30
46. Signs.................................................................. 31
47. Merger................................................................. 32
48. Quiet Possession....................................................... 32
49. Authority.............................................................. 32
50. Conflict............................................................... 32
51. Multiple Parties....................................................... 32
52. Interpretation......................................................... 32
53. Prohibition Against Recording.......................................... 32
54. Relationship of Parties................................................ 32
55. Rules and Regulations.................................................. 32
56. Right to Lease......................................................... 32
57. Security Interest...................................................... 33
58. Security for Performance of Tenant's Obligations....................... 33
59. Financial Statements................................................... 33
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TABLE OF CONTENTS
(Continued)
PAGE
60. Attachments............................................................ 33
61. Confidentiality........................................................ 33
62. WAIVER OF JURY TRIAL................................................... 34
ADDENDUM..................................................................... Add-1
EXHIBIT A.................................................................... A-1
EXHIBIT B.................................................................... B-1
EXHIBIT C.................................................................... C-1
EXHIBIT D.................................................................... D-1
SCHEDULE 1................................................................... Sch 1-1
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0000 XXXXXXX XXXX
XXXXXXXXX, XXXXXXXX
STANDARD OFFICE LEASE
1. BASIC LEASE PROVISIONS.
1.1. PARTIES: This Lease, dated for reference purposes only April 7, 2000,
is made by and between TA/WESTERN, LLC, a Delaware limited liability
corporation, ("Landlord") and VISUAL NETWORKS, INC., a Delaware
corporation ("Tenant").
1.2. PREMISES: Suite Number 100, as shown on Exhibit "A" attached hereto
(the "Premises").
1.3. RENTABLE AREA: Premises: 21,333 rentable square feet; Building: 49,569
rentable square feet.
1.4. BUILDING ADDRESS: 0000 Xxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxx 00000.
1.5. USE: General office; electronic assembly and product development; and
engineering uses, subject to the requirements and limitations contained
in Section 6.
1.6. TERM: Approximately six (6) years and eight (8) months, commencing on
the Commencement Date and expiring on December 31, 2006. SEE ADDENDUM
PARAGRAPH 12
1.7. COMMENCEMENT DATE: SEE ADDENDUM PARAGRAPH 1
1.8. BASE RENT: $37,738.92 per month.
1.9. BASE RENT PAID UPON EXECUTION: $37,738.92 for the first full month of
the Term of this Lease.
1.10. SECURITY DEPOSIT: $37,738.92.
1.11. TENANT'S SHARE: 43%.
1.12. BASE YEAR: The calendar year 2000.
1.13. NUMBER OF PARKING SPACES: Reserved: Zero (0) Unreserved: Seventy (70).
1.14. INITIAL MONTHLY PARKING RATES PER SPACE: Reserved: $N/A Unreserved:
$0.00.
1.15. REAL ESTATE BROKER:
LANDLORD: XxXxxx & Company, Inc.
TENANT: The Xxxx Xxxx Company
1.16. ATTACHMENTS TO LEASE: Addendum; Exhibit A - "Premises"; Exhibit B -
"Verification Letter"; Exhibit C - "Rules and Regulations"; Exhibit D -
"Option Space"; Schedule 1 - "Work Letter Agreement".
1.17. ADDRESS FOR NOTICES:
LANDLORD: TA/Western, LLC
c/x XxXxxx & Company, Inc.
Xxx Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxx
WITH COPY TO: TA Associates Realty
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
TENANT: Visual Networks, Inc.
Prior to 0000 Xxxxxxx Xxxx
Xxxxxxxxx: Xxxxxxxxx, Xxxxxxxx 00000
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Attention: Xx. Xxxxxxx X. Xxxxx
After Occupancy: Visual Networks, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxx
1.18. AGENT FOR SERVICE OF PROCESS: If Tenant is a corporation, the name and
address of Tenant's registered agent for service of process is:
_____________________________________________
_____________________________________________
_____________________________________________
_____________________________________________
1.19 INTERPRETATION. The Basic Lease Provisions shall be interpreted in
conjunction with all of the other terms and conditions of this Lease.
Other terms and conditions of this Lease modify and expand on the Basic
Lease Provisions. If there is a conflict between the Basic Lease
Provisions and the other terms and conditions of this Lease, the other
terms and conditions shall control.
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2. PREMISES.
2.1. LEASE OF PREMISES AND DEFINITION OF PROJECT. The "Premises" shall
mean the area shown on Exhibit "A" to this Lease. Landlord hereby leases to
Tenant, and Tenant hereby leases from Landlord, upon all of the conditions set
forth herein the Premises, together with certain rights to the Common Areas (as
defined in Section 2.3 below) as hereinafter specified. The Premises shall not
include an easement for light, air or view. The building of which the Premises
is a part (the "Building"), the Common Areas, the land upon which the same are
located, along with the three (3) other buildings located within the complex
with the current addresses of 2092, 2094, 2096 and 0000 Xxxxxxx Xxxx, Xxxxxxxxx,
Xxxxxxxx and improvements thereon or thereunder, including all parking
facilities, are herein collectively referred to as the "Project." The Project
currently contains Two Hundred Five Thousand Nine Hundred Ninety Four (205,994)
rentable square feet.
2.2. CALCULATION OF SIZE OF BUILDING AND PREMISES. The number of rentable
square feet in the Premises has been calculated in accordance with the methods
of measuring rentable square feet, as that method is described by the Washington
D.C. Association of Realtors, Inc. (the "WDCAR Method"). If the rentable square
feet in the Premises changes after this Lease is executed by Landlord and
Tenant, the Base Rent and any advance rent shall be adjusted by multiplying the
actual number of rentable square feet in the Premises by the per square foot
rental obtained by dividing the Base Rent initially set forth in Section 1.8 by
the number of rentable square feet initially set forth in Section 1.3. If the
number of rentable square feet in the Premises is changed, Tenant's Share shall
be adjusted as provided in Section 4.2(a).
2.3. COMMON AREAS-DEFINED. The term "Common Areas" is defined as all areas
and facilities outside the Premises and within the exterior boundary line of the
Project that are designated by Landlord from time to time for the general
non-exclusive use of Landlord, Tenant and the other tenants of the Project and
their respective employees, suppliers, customers and invitees, including, but
not limited to, common entrances, lobbies, corridors, stairwells, public
restrooms, elevators, parking areas, loading and unloading areas, roadways and
sidewalks. Landlord may also designate other land and improvements outside the
boundaries of the Project to be a part of the Common Areas, provided that such
other land and improvements have a reasonable and functional relationship to the
Project and such other land and improvements do not impose a material increase
in Tenant's obligation hereunder.
3. TERM.
3.1. TERM AND COMMENCEMENT DATE. The Term and Commencement Date of this
Lease are as specified in Sections 1.6 and 1.7. The Commencement Date set forth
in Section 1.7 is an estimated Commencement Date. The actual Commencement Date
shall be ; determined in accordance with Paragraph 1 of the Addendum attached
hereto, provided, however, that if the Commencement Date is other than the first
day of a month, then the Term of this Lease shall be computed from the first day
of the calendar month following the Commencement Date. When the actual
Commencement Date is established , Tenant shall, within twenty (20) days after
Landlord's request, complete and execute the letter attached hereto as Exhibit
"B" and deliver it to Landlord. Tenant's failure to execute the letter attached
hereto as Exhibit "B" within said twenty (20) day period shall be a material
default hereunder and shall constitute Tenant's acknowledgement of the truth of
the facts contained in the letter delivered by Landlord to Tenant.
3.2. DELAY IN POSSESSION. [INTENTIONALLY OMITTED]
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3.3. DELAYS CAUSED BY TENANT. [INTENTIONALLY OMITTED]
3.4 TENDER OF POSSESSION. [INTENTIONALLY OMITTED]
3.5. EARLY POSSESSION. [INTENTIONALLY OMITTED]
4. RENT.
4.1. BASE RENT. Subject to adjustment as hereinafter provided in Section
4.3, Tenant shall pay to Landlord the Base Rent for the Premises set forth in
Section 1.8, without offset or deduction on the first day of each calendar month
during the Term of this Lease. At the time Tenant executes this Lease it shall
pay to Landlord the advance Base Rent described in Section 1.9. Base Rent for
any period during the Term hereof which is for less than one month shall be
prorated based upon the actual number of days of the calendar month involved.
Base Rent and all other amounts payable to Landlord hereunder shall be payable
to Landlord in lawful money of the United States and Tenant shall be responsible
for delivering said amounts to Landlord at the address stated herein or to such
other persons or to such other places as Landlord may designate in writing.
4.2. OPERATING EXPENSE INCREASES. Tenant shall pay to Landlord during the
Term hereof, in addition to the Base Rent, Tenant's Share of the amount by which
all Operating Expenses for each Comparison Year (as defined in Section 4.2(b)
below) exceeds the amount of all Operating Expenses (as defined in Section
4.2(c) below) for the Base Year. If less than 95% of the rentable square feet in
the
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Project is occupied by tenants or Landlord is not supplying services to 95% of
the rentable square feet of the Project at any time during any calendar year
(including the Base Year), Operating Expenses for such calendar year shall be an
amount equal to the Operating Expenses which would normally be expected to be
incurred had 95% of the Project's rentable square feet been occupied and had
Landlord been supplying services to 95% of the Project's rentable square feet
throughout such calendar year (hereinafter the "Grossed Up Operating Expenses").
Tenant's Share of Operating Expense increases shall be determined in accordance
with the following provisions:
(a) "TENANT'S SHARE" is defined as the percentage set forth in
Section 1.11, which percentage has been determined by dividing the number of
rentable square feet in the Premises by the total number of rentable square feet
in the Building and multiplying the resulting quotient by one hundred (100). In
the event that the number of rentable square feet in the Building or the
Premises changes, Tenant's Share shall be adjusted in the year the change
occurs, and Tenant's Share for such year shall be determined on the basis of the
days during such year that each Tenant's Share was in effect. For purposes of
determining Tenant's Share of Operating Expenses relating to expenses which are
shared by tenant's in other office buildings in the Project, only a fraction of
such Operating Expenses shall be allocated to the Building, the numerator of
which is the number of square feet of rentable area in the Building and the
denominator of which is the number of square feet of rentable area in the
Project.
(b) "COMPARISON YEAR" is defined as each calendar year during the
Term of this Lease after the Base Year. Tenant's Share of the Operating Expense
increases for the last Comparison Year of the Term of this Lease shall be
prorated according to that portion of such Comparison Year as to which Tenant is
responsible for a share of such increase.
(c) "OPERATING EXPENSES" shall include all costs, expenses and fees
incurred by Landlord in connection with or attributable to the Project,
including but not limited to, the following items: (i) all costs, expenses and
fees associated with or attributable to the ownership, management, operation,
repair, maintenance, improvement, alteration and replacement of the Project, or
any part thereof, including but not limited to, the following: (A) all surfaces,
coverings, decorative items, carpets, drapes, window coverings, parking areas,
loading and unloading areas, trash areas, roadways, sidewalks, stairways, walls,
structural elements, landscaped areas, striping, bumpers, irrigation systems,
lighting facilities, building exteriors and roofs, fences and gates; (B) all
heating, ventilating and air conditioning equipment ("HVAC") (including, but not
limited to, the cost of replacing or retrofitting HVAC equipment to comply with
laws regulating or prohibiting the use or release of chlorofluorocarbons or
hydrochlorofluorocarbons), plumbing, mechanical, electrical systems, life safety
systems and equipment, telecommunication equipment, elevators, escalators,
tenant directories, fire detection systems including sprinkler system
maintenance and repair; (ii) the cost of trash disposal, janitorial services and
security services and systems; (iii) the cost of all insurance purchased by
Landlord and enumerated in Section 8 of this Lease, including any deductibles;
(iv) the cost of water, sewer, gas, electricity, and other utilities available
at the Project and paid by Landlord; (v) the cost of labor, salaries and
applicable fringe benefits incurred by Landlord; (vi) the cost of materials,
supplies and tools used in managing, maintaining and/or cleaning the Project;
(vii) the cost of accounting fees, management fees, legal fees and consulting
fees attributable to the ownership, operation, management, maintenance and
repair of the Project plus the cost of any space occupied by the property
manager and leasing agent (if Landlord is the property manager, Landlord shall
be entitled to receive a fair market management fee); (viii) the cost of
operating, replacing, modifying and/or adding improvements or equipment mandated
by any law, statute, regulation or directive of any governmental agency and any
repairs or removals necessitated thereby (including, but not limited to, the
cost of complying with the Americans With Disabilities Act and regulations of
the Occupational Safety and Health Administration); (ix) payments made by
Landlord under any easement, license, operating agreement, declaration,
restrictive covenant, or instrument pertaining to the payment or sharing of
costs among property owners; (x) any business property taxes or personal
property taxes imposed upon the fixtures, machinery, equipment, furniture and
personal property used in connection with the operation of the Project; (xi) the
cost of all business licenses, including Business Professional and Occupational
License Taxes and Business Improvements Districts Taxes, any gross receipt taxes
based on rental income or other payments received by Landlord, commercial rental
taxes or any similar taxes or fees; (xii) transportation taxes, fees or
assessments, including but not limited to, mass transportation fees, metrorail
fees, trip fees, regional and transportation district fees; (xiii) all costs and
expenses associated with or related to the implementation by Landlord of any
transportation demand management program or similar program; (xiv) fees assessed
by any air quality management district or other governmental or
quasi-governmental entity regulating pollution; (xv) the cost of installing
intra-building network cabling ("INC") and maintaining, repairing, securing and
replacing existing INC; and (xvi) the cost of any other service provided by
Landlord or any cost that is elsewhere stated in this Lease to be an "Operating
Expense". Real Property Taxes (as defined in Section 10 hereof) shall be paid in
accordance with Section 10 below and shall not be included in Operating
Expenses. Landlord shall have the right but not the obligation, from time to
time, to equitably allocate some or all of the Operating Expenses among
different tenants of the Project or among the different buildings which comprise
the
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Project (the "Cost Pools"). Such Cost Pools may include, but shall not be
limited to, the office space tenants of the Project and the retail space tenants
of the Project.
(d) Operating Expenses shall not include any expenses paid by any
tenant directly to third parties, or as to which Landlord is otherwise
reimbursed by any third party or by insurance proceeds.
SEE ADDENDUM PARAGRAPH 2
(e) If the cost incurred in making an improvement or replacing any
equipment is not fully deductible as an expense in the year incurred in
accordance with generally accepted accounting principles, the cost shall be
amortized over the useful life of the improvement or equipment, as reasonably
determined by Landlord, together with an interest factor on the unamortized cost
of such item equal to the lesser of (i) twelve percent (12%) per annum, or (ii)
the maximum rate of interest permitted by applicable law.
(f) Tenant's Share of Operating Expense increases shall be payable
by Tenant within thirty (30) days after a reasonably detailed statement of
actual expenses is presented to Tenant by Landlord. At Landlord's option,
however, Landlord may, from time to time, estimate what Tenant's Share of
Operating Expense increases will be, and the same shall be payable by Tenant
monthly during each Comparison Year of the Term of the Lease, on the same day as
the Base Rent is due hereunder. In the event that Tenant pays Landlord's
estimate of Tenant's Share of Operating Expense increases, Landlord shall use
its best efforts to deliver to Tenant within one hundred eighty (180) days after
the expiration of each Comparison Year a reasonably detailed statement (the
"Statement") showing Tenant's Share of the actual Operating Expense increases
incurred during such year. Landlord's failure to deliver the Statement to Tenant
within said period shall not constitute Landlord's waiver of its right to
collect said amounts or otherwise prejudice Landlord's rights hereunder. If
Tenant's payments under this Section 4.2(f) during said Comparison Year exceed
Tenant's Share as indicated on the Statement, Tenant shall be entitled to credit
the amount of such overpayment against Tenant's Share of Operating Expense
increases next falling due. If Tenant's payments under this Section 4.2(f)
during said Comparison Year were less than Tenant's Share as indicated on the
Statement, Tenant shall pay to Landlord the amount of the deficiency within
thirty (30) days after delivery by Landlord to Tenant of the Statement. Landlord
and Tenant shall forthwith adjust between them by cash payment any balance
determined to exist with respect to that portion of the last Comparison Year for
which Tenant is responsible for Operating Expense increases, notwithstanding
that the Term of the Lease may have terminated before the end of such Comparison
Year; and this provision shall survive the expiration or earlier termination of
the Lease.
(g) The computation of Tenant's Share of Operating Expense increases
is intended to provide a formula for the sharing of costs by Landlord and Tenant
and will not necessarily result in the reimbursement to Landlord of the exact
costs it has incurred.
(h) If Tenant disputes the amount set forth in the Statement, Tenant
shall have the right, at Tenant's sole expense, not later than one hundred
twenty (120) days following receipt of such Statement, to cause Landlord's books
and records in respect to the calendar year which is the subject of the
Statement to be audited by a certified public accountant mutually acceptable to
Landlord and Tenant. The audit shall take place at the offices of Landlord where
its books and records are located at a mutually convenient time during
Landlord's regular business hours. Tenant's Share of Operating Expenses shall be
appropriately adjusted based upon the results of such audit, provided Tenant
shall be permitted to conduct an audit on such subtenant, and the results of
such audit shall be final and binding upon Landlord and Tenant. Tenant shall
have no right to conduct an audit or to give Landlord notice that it desires to
conduct an audit at any time Tenant is in default beyond any applicable notice
or cure period under the Lease. The accountant conducting the audit shall be
compensated on an hourly basis and shall not be compensated based upon a
percentage of overcharges it discovers. No subtenant shall have any right to
conduct an audit, provided Tenant shall be permitted to conduct an audit on such
subtenant's behalf, and no assignee shall conduct an audit for any period during
which such assignee was not in possession of the Premises. Tenant's right to
undertake an audit with respect to any calendar year shall expire one hundred
twenty (120) days after Tenant's receipt of the Statement for such calendar
year, and such Statement shall be final and binding upon Tenant and shall, as
between the parties, be conclusively deemed correct, at the end of such one
hundred twenty (120) day period, unless prior thereto Tenant shall have given
Landlord written notice of its intention to audit Operating Expenses for the
calendar year which is the subject of the Statement. If Tenant gives Landlord
notice of its intention to audit Operating Expenses, it must commence such audit
within ninety (90) days after such notice is delivered to Landlord, and the
audit must be completed within one hundred twenty (120) days after such notice
is delivered to Landlord. If Tenant does not commence and complete the audit
within such periods, the Statement which Tenant elected to audit shall be deemed
final and binding upon Tenant and shall, as between the parties, be conclusively
deemed correct. Tenant agrees that the results of any Operating Expenses audit
shall be kept strictly confidential by Tenant and shall not be disclosed to any
other person or entity. . If such audit determines that an error has been made
in Landlord's determination and calculation which results in an adjustment to
the amounts determined and calculated by Landlord in the amount of five percent
(5%) or more, Landlord
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shall pay for the fees and expenses of such firm, but if such adjustment is less
than five percent (5%), Tenant shall pay for such fees.
4.3. BASE RENT INCREASE.
SEE ADDENDUM PARAGRAPH 3
5. SECURITY DEPOSIT. Tenant shall deliver to Landlord at the time it executes
this Lease the Security Deposit set forth in Section 1.10 as security for
Tenant's faithful performance of Tenant's obligations hereunder. If Tenant fails
to pay Base Rent or other charges due hereunder, or otherwise defaults with
respect to any provision of this Lease, Landlord may use all or any portion of
said deposit for the payment of any Base Rent or other charge due hereunder, to
pay any other sum to which Landlord may become obligated by reason of Tenant's
default, or to compensate Landlord for any loss or damage which Landlord may
suffer thereby. If Landlord so uses or applies all or any portion of said
deposit, Tenant shall within ten (10) days after written demand therefor deposit
cash with Landlord in an amount sufficient to restore said deposit to its full
amount. Landlord shall not be required to keep said Security Deposit separate
from its general accounts. If Tenant performs all of Tenant's obligations
hereunder, said deposit, or so much thereof as has not heretofore been applied
by Landlord, shall be returned, without payment of interest or other amount for
its use, to Tenant (or, at Landlord's option, to the last assignee, if any, of
Tenant's interest hereunder) at the expiration of the Term hereof, and after
Tenant has vacated the Premises. No trust relationship is created herein between
Landlord and Tenant with respect to said Security Deposit. Tenant acknowledges
that the Security Deposit is not an advance payment of any kind or a measure of
Landlord's damages in the event of Tenant's default. Tenant hereby waives the
provisions of any law which is inconsistent with this Section 5.
6. USE.
6.1. USE. The Premises shall be used and occupied only for the purpose set
forth in Section 1.5 and for no other purpose. If Section 1.5 gives Tenant the
right to use the Premises for general office use, by way of example and not
limitation, general office use shall not include medical office use or any
similar use, medical laboratory use, classroom use (provided that Tenant shall
have the right to conduct training sessions at the Premises, provided such
training sessions do not unreasonably impact the parking at the Building), any
use not characterized by applicable zoning and land use restrictions as general
office use, or
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any use which would require Landlord or Tenant to obtain a conditional use
permit or variance from any federal, state or local authority, or any use not
compatible, in Landlord's sole but reasonable judgment, with a first class
office building. Notwithstanding any permitted use inserted in Section 1.5,
Tenant shall not use the Premises for any purpose which would violate the
Project's certificate of occupancy, any conditional use permit or variance
applicable to the Project or violate any covenants, conditions or other
restrictions applicable to the Project. No exclusive use has been granted to
Tenant hereunder.
6.2. COMPLIANCE WITH LAW.
(a) Landlord warrants to Tenant that, to the best of Landlord's
knowledge, the Premises, in the state existing on the date this Lease is
executed by Landlord and Tenant, but without regard to alterations or
improvements to be made by the Tenant or the use for which Tenant will occupy
the Premises, does not violate any covenants or restrictions of record, or any
applicable building code, regulation or ordinance in effect on such date.
(b) Tenant shall, at Tenant's sole expense, promptly comply with all
applicable laws, ordinances, rules, regulations, orders, certificates of
occupancy, conditional use or other permits, variances, covenants and
restrictions of record, the reasonable recommendations of Landlord's engineers
or other consultants, and requirements of any fire insurance underwriters,
rating bureaus or government agencies, now in effect or which may hereafter come
into effect, whether or not they reflect a change in policy from that now
existing, during the Term or any part of the Term hereof, relating in any manner
to the Premises or the occupation and use by Tenant of the Premises. Tenant
shall, at Tenant's sole expense, comply with all requirements of the Americans
With Disabilities Act that relate to the Premises, and all federal, state and
local laws and regulations governing occupational safety and health. Tenant
shall conduct its business and use the Premises in a lawful manner and shall not
use or permit the use of the Premises or the Common Areas in any manner that
will tend to create waste or a nuisance or shall tend to disturb other occupants
of the Project. Tenant shall obtain, at its sole expense, any permit or other
governmental authorization required to operate its business from the Premises.
Landlord shall not be liable for the failure of any other tenant or person to
abide by the requirements of this Section or to otherwise comply with applicable
laws and regulations, and Tenant shall not be excused from the performance of
its obligations under this Lease due to such a failure.
SEE ADDENDUM PARAGRAPH 4
6.3. CONDITION OF PREMISES. Except as otherwise provided in this Lease,
Tenant hereby accepts the Premises and the Project in their condition existing
as of the date this Lease is executed by Landlord and Tenant, subject to all
applicable federal, state and local laws, ordinances, regulations and permits
governing the use of the Premises, the Project's certificate of occupancy, any
applicable conditional use permits or variances, and any easements, covenants or
restrictions affecting the use of the Premises or the Project. Tenant
acknowledges that it has satisfied itself by its own independent investigation
that the Premises and the Project are suitable for its intended use, and that
neither Landlord nor Landlord's agents has made any representation or warranty
as to the present or future suitability of the Premises, or the Project for the
conduct of Tenant's business.
7. MAINTENANCE, REPAIRS AND ALTERATIONS.
7.1. LANDLORD'S OBLIGATIONS. Landlord shall keep the Project (excluding
the interior of the Premises and space leased to other occupants of the Project)
in good condition and repair, including the roof, foundation, exterior walls,
landscaping, parking lots, common area drives and roadways, exterior doors,
mechanical, plumbing, electrical and HVAC systems servicing more than one
premises within the Building. If plumbing pipes, electrical wiring, HVAC ducts
or vents within the Premises are in need of repair, Tenant shall immediately
notify Landlord, and Landlord shall cause the repairs to be completed within a
reasonable time, and the entire cost of the repairs shall be considered an
Operating Expense and reimbursed to Landlord in accordance with Section 4.2
herein. Except as provided in Section 9.3, there shall be no abatement of rent
or liability to Tenant on account of any injury or interference with Tenant's
business with respect to any improvements, alterations or repairs made by
Landlord to the Project or any part thereof. Tenant expressly waives the
benefits of any statute now or hereafter in effect which would otherwise afford
Tenant the right to make repairs at Landlord's expense or to terminate this
Lease because of Landlord's failure to keep the Project in good order, condition
and repair.
7.2. TENANT'S OBLIGATIONS.
(a) Subject to the requirements of Section 7.3, Tenant shall be
responsible for keeping the Premises in good condition and repair, at Tenant's
sole expense. By way of example, and not limitation,
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Tenant shall be responsible, at Tenant's sole expense, for repairing and/or
replacing, carpet, marble, tile or other flooring, paint, wall coverings,
interior corridors and interior doors and door hardware, telephone and computer
equipment, interior glass, window treatments, ceiling tiles, shelving, cabinets,
millwork and other tenant improvements. In addition, Tenant shall be responsible
for the installation, maintenance and repair of all telephone, computer and
related cabling from the telephone terminal room on the floor on which the
Premises is located to and throughout the Premises, and Tenant shall be
responsible for any loss, cost, damage, liability and expense (including
attorneys' fees) arising out of or related to the installation, maintenance,
repair and replacement of such cabling. If Tenant fails to keep the Premises in
good condition and repair, Landlord may, but shall not be obligated to, make any
necessary repairs. If Landlord makes such repairs, Landlord shall xxxx Tenant
for the cost of the repairs as additional rent, and said additional rent shall
be payable by Tenant within thirty (30) days.
(b) On the last day of the Term hereof, or on any sooner
termination, Tenant shall surrender the Premises to Landlord in the same
condition as received, ordinary wear and tear and casualty damage excepted,
clean and free of debris and Tenant's personal property. Tenant shall repair any
damage to the Premises occasioned by the installation or removal of Tenant's
trade fixtures, furnishings and equipment. Tenant shall leave the electrical
distribution systems, plumbing systems, lighting fixtures, HVAC ducts and vents,
window treatments, wall coverings, carpets and other floor coverings, doors and
door hardware, millwork, ceilings and other tenant improvements at the Premises
and in good condition, ordinary wear and tear and casualty damage excepted.
7.3. ALTERATIONS AND ADDITIONS.
(a) Tenant shall not, without Landlord's prior written consent,
which may be given or withheld in Landlord's sole discretion, make any
alterations, improvements, additions, utility installations or repairs
(hereinafter collectively referred to as "Alteration(s)") in, on or about the
Premises or the Project. Alterations shall include, but shall not be limited to,
the installation or alteration of security or fire protection systems,
communication systems, millwork, shelving, file retrieval or storage systems,
carpeting or other floor covering, window and wall coverings, electrical
distribution systems, lighting fixtures, telephone or computer system wiring,
HVAC and plumbing. At the expiration of the Term, Landlord may require the
removal of any Alterations installed by Tenant and the restoration of the
Premises and the Project to their prior condition, at Tenant's expense. If a
work letter agreement is entered into by Landlord and Tenant, Tenant shall not
be obligated to remove the tenant improvements constructed in accordance with
the work letter agreement. If, as a result of any Alteration made by Tenant,
Landlord is obligated to comply with the Americans With Disabilities Act or any
other law or regulation and such compliance requires Landlord to make any
improvement or Alteration to any portion of the Project, as a condition to
Landlord's consent, Landlord shall have the right to require Tenant to pay to
Landlord prior to the construction of any Alteration by Tenant, the entire cost
of any improvement or Alteration Landlord is obligated to complete by such law
or regulation. Should Landlord permit Tenant to make its own Alterations, Tenant
shall use only such contractor as has been reasonably approved by Landlord, and
Landlord may require Tenant to provide to Landlord, at Tenant's sole cost and
expense, a lien and completion bond in an amount equal to the estimated cost of
such Alterations, to insure Landlord against any liability for mechanic's and
materialmen's liens and to insure completion of the work. In addition, Tenant
shall pay to Landlord a fee equal to one percent (1%) of the cost of the
Alterations to compensate Landlord for the overhead and other costs it incurs in
reviewing the plans for the Alterations and in monitoring the construction of
the Alterations. Should Tenant make any Alterations without the prior approval
of Landlord, or use a contractor not expressly approved by Landlord, Landlord
may, at any time during the Term of this Lease, require that Tenant remove all
or part of the Alterations and return the Premises to the condition it was in
prior to the making of the Alterations. In the event Tenant makes any
Alterations, Tenant agrees to obtain or cause its contractor to obtain, prior to
the commencement of any work, "builders all risk" insurance in an amount
approved by Landlord and workers compensation insurance.
SEE ADDENDUM PARAGRAPH 5
(b) Any Alterations requiring Landlord's prior approval in or about
the Premises that Tenant shall desire to make shall be presented to Landlord in
written form, with plans and specifications which are sufficiently detailed to
obtain a building permit. If Landlord consents to an Alteration, the consent
shall be deemed conditioned upon Tenant acquiring a building permit from the
applicable governmental agencies, furnishing a copy thereof to Landlord prior to
the commencement of the work, and compliance by Tenant with all conditions of
said permit in a prompt and expeditious manner. Tenant shall provide Landlord
with as-built plans and specifications for any Alterations made to the Premises.
(c) Tenant shall pay, when due, all claims for labor or materials
furnished or alleged to have been furnished to or for Tenant at or for use in
the Premises, which claims are or may be secured by any mechanic's or
materialmen's lien against the Premises or the Project, or any interest therein.
If Tenant shall, in good faith, contest the validity of any such lien, Tenant
shall furnish to Landlord a surety bond
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satisfactory to Landlord in an amount equal to not less than one and one half
times the amount of such contested lien or claim indemnifying Landlord against
liability arising out of such lien or claim. Such bond shall be sufficient in
form and amount to free the Project from the effect of such lien. In addition,
Landlord may require Tenant to pay Landlord's reasonable attorneys' fees and
costs in participating in such action.
(d) Tenant shall give Landlord not less than five (5) business days'
advance written notice prior to the commencement of any work in the Premises by
Tenant, and Landlord shall have the right to post notices of non-responsibility
in or on the Premises or the Project.
(e) All Alterations (whether or not such Alterations constitute
trade fixtures of Tenant) which may be made to the Premises by Tenant shall be
paid for by Tenant, at Tenant's sole expense, and shall be made and done in a
good and workmanlike manner and with new materials and such Alterations,
excluding Tenant's trade fixtures, shall be the property of Landlord and remain
upon and be surrendered with the Premises at the expiration of the Term of the
Lease. Provided Tenant is not in default, Tenant's personal property and
equipment, other than that which is affixed to the Premises so that it cannot be
removed without material damage to the Premises or the Project, shall remain the
property of Tenant and may be removed by Tenant subject to the provisions of
Section 7.2(b).
7.4. FAILURE OF TENANT TO REMOVE PROPERTY. If this Lease is terminated due
to the expiration of its Term or otherwise, and Tenant fails to remove its
property as required by Section 7.2(b), in addition to any other remedies
available to Landlord under this Lease, and subject to any other right or remedy
Landlord may have under applicable law, Landlord may remove any property of
Tenant from the Premises and store the same elsewhere at the expense and risk of
Tenant.
8. INSURANCE.
8.1. INSURANCE-TENANT.
(a) Tenant shall obtain and keep in force during the Term of this
Lease a commercial general liability policy of insurance with coverages
acceptable to Landlord, in Landlord's sole, but reasonable, discretion, which by
way of example and not limitation, protects Tenant and Landlord (as an
additional insured) against claims for bodily injury, personal injury and
property damage based upon, involving or arising out of the ownership, use,
occupancy or maintenance of the Premises and all areas appurtenant thereto. Such
insurance shall be on an occurrence basis providing single limit coverage in an
amount of not less than One Million Dollars ($ 1,000,000) per occurrence with an
"Additional Insured-Managers and Landlords of Premises Endorsement" and contain
the "Amendment of the Pollution Exclusion" for damage caused by heat, smoke or
fumes from a hostile fire. The policy shall not contain any intra-insured
exclusions as between insured persons or organizations, but shall include
coverage for liability assumed under this Lease as an "insured contract" for the
performance of Tenant's indemnity obligations under this Lease. In addition,
Tenant covenants to keep in place blanket "umbrella" insurance policies covering
the risks enumerated in this subsection (a) in the amount of Ten Million Dollars
($10,000,000.00).
(b) Tenant shall obtain and keep in force during the Term of this
Lease "all risk" extended coverage property insurance with coverages acceptable
to Landlord, in Landlord's sole, but reasonable, discretion. Said insurance
shall be written on a one hundred percent (100%) replacement cost basis on
Tenant's personal property, all tenant improvements installed at the Premises by
Landlord or Tenant, Tenant's trade fixtures and other property. By way of
example and not limitation, such policies shall provide protection against any
peril included within the classification "fire and extended coverage," against
vandalism and malicious mischief, theft, sprinkler leakage, earthquake damage
and flood damage. If this Lease is terminated as the result of a casualty in
accordance with Section 9, the proceeds of said insurance attributable to the
replacement of all tenant improvements at the Premises shall be paid to
Landlord. If insurance proceeds are available to repair the tenant improvements,
at Landlord's option, all insurance proceeds Tenant is entitled to receive to
repair the tenant improvements shall be paid by the insurance company directly
to Landlord. Landlord shall select the contractor to repair and/or replace the
tenant improvements, and Landlord shall cause the tenant improvements to be
repaired and/or replaced to the extent insurance proceeds are available.
(c) Tenant shall, at all times during the Term hereof, maintain in
effect workers' compensation insurance as required by applicable law and
business interruption and extra expense insurance .
8.2. Insurance-Landlord.
(a) Landlord shall obtain and keep in force a policy of general
liability insurance with coverage against such risks and in such amounts as
Landlord deems advisable insuring Landlord against liability arising out of the
ownership, operation and management of the Project.
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(b) Landlord shall also obtain and keep in force during the Term of
this Lease a policy or policies of insurance covering loss or damage to the
Project in the amount of not less than the full replacement cost thereof,
excluding foundations, as reasonably determined by Landlord from time to time.
The terms and conditions of said policies and the perils and risks covered
thereby shall be determined by Landlord, from time to time, in Landlord's sole
discretion but in no event shall such coverage be less in amount and perils
covered than that maintained by a prudent commercial property owner of
comparable office buildings in the Washington, D.C. metropolitan area. In
addition, at Landlord's option, Landlord shall obtain and keep in force, during
the Term of this Lease, a policy of rental interruption insurance, with loss
payable to Landlord, which insurance shall, at Landlord's option, also cover all
Operating Expenses. At Landlord's option, Landlord may obtain insurance
coverages and/or bonds related to the operation of the parking areas. At
Landlord's option, Landlord may obtain coverage for flood and earthquake
damages. In addition, Landlord shall have the right to obtain such additional
insurance as is customarily carried by owners or operators of other comparable
office buildings in the geographical area of the Project. Tenant will not be
named as an additional insured in any insurance policies carried by Landlord and
shall have no right to any proceeds therefrom. The policies purchased by
Landlord shall contain such deductibles as Landlord may determine. In addition
to amounts payable by Tenant in accordance with Section 4.2, Tenant shall pay
any increase in the property insurance premiums for the Project over what was
payable immediately prior to the increase to the extent the increase is
specified by Landlord's insurance carrier as being caused by the nature of
Tenant's occupancy or any act or omission of Tenant.
8.3. INSURANCE POLICIES. Tenant shall deliver to Landlord copies of the
insurance policies required under Section 8.1 within fifteen (15) days prior to
the Commencement Date of this Lease . Tenant's insurance policies shall not be
cancelable or subject to reduction of coverage or other modification except
after thirty (30) days prior written notice to Landlord. Tenant shall, at least
thirty (30) days prior to the expiration of such policies, furnish Landlord with
renewals thereof. Tenant's insurance policies shall be issued by insurance
companies authorized to do business in the state in which the Project is
located, and said companies shall maintain during the policy term a "General
Policyholders' Rating" of at least "A" and a financial rating of at least "Class
X" (or such other rating as may be required by any lender having a lien on the
Project), as set forth in the most recent edition of "Best Insurance Reports."
All insurance obtained by Tenant shall be primary to and not contributory with
any similar insurance carried by Landlord, whose insurance shall be considered
excess insurance only. Landlord, and at Landlord's option, the holder of any
mortgage or deed of trust encumbering the Project and any person or entity
managing the Project on behalf of Landlord, shall be named as an additional
insured on all insurance policies Tenant is obligated to obtain by Section 8.1
above. Tenant's insurance policies shall not include deductibles in excess of
Five Thousand Dollars ($5,000).
8.4. WAIVER OF SUBROGATION. Tenant and Landlord each hereby release and
relieve the other, and waive their entire right of recovery against the other,
for direct or consequential loss or damage arising out of or incident to the
perils covered by insurance carried by such party (or required to be carried by
such party by this Lease) to the extent of the insurance proceeds actually
received, whether due to the negligence of Landlord or Tenant or their agents,
employees, contractors and/or invitees. Landlord and Tenant shall each cause the
insurance policies they obtain in accordance with this Section 8 to provide that
the insurance company waives all right of recovery by subrogation against either
party in connection with any damage covered by any policy.
8.5. Coverage. Landlord makes no representation to Tenant that the limits
or forms of coverage specified above or approved by Landlord are adequate to
insure Tenant's property or Tenant's obligations under this Lease, and subject
to Section 8.4 above, the limits of any insurance carried by Tenant shall not
limit Tenant's obligations or liability under any indemnity provision included
in this Lease or under any other provision of this Lease.
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9. DAMAGE OR DESTRUCTION.
9.1. EFFECT OF DAMAGE OR DESTRUCTION. If all or part of the Project is
damaged by fire, earthquake, flood, explosion, the elements, riot, the release
or existence of Hazardous Substances (as defined in Section 22 below) or by any
other cause whatsoever (hereinafter collectively referred to as "Damages"), but
the Damages are not "Material" (as defined in Section 9.2 below), Landlord shall
repair the Damages to the Project as soon as is reasonably possible, and this
Lease shall remain in full force and effect and during such period, Rent shall
xxxxx as provided in Section 9.3 below. If all or part of the Project is
destroyed or Materially Damaged, Landlord shall have the right, in its sole and
complete discretion, to repair or to rebuild the Project or to terminate this
Lease. Landlord shall use commercially reasonable efforts within sixty (60)
days, but in no event later than ninety (90) days after the discovery of such
Material Damage or destruction notify Tenant in writing of Landlord's intention
to repair or to rebuild or to terminate this Lease. Tenant shall in no event be
entitled to compensation or damages on account of annoyance or inconvenience in
making any repairs, or on account of construction, or on account of Landlord's
election to terminate this Lease. Notwithstanding the foregoing, if Landlord
shall elect to rebuild or repair the Project after Material Damage or
destruction, but in good faith determines that the Premises cannot be
substantially repaired within two hundred ten (210) days after the date of the
discovery of the Material Damage or destruction, without payment of overtime or
other premiums, and the Damage to the Project will render the entire Premises
unusable during said three hundred sixty (360) day period, Landlord shall notify
Tenant thereof in writing at the time of Landlord's election to rebuild or
repair, and Tenant shall thereafter have a period of fifteen (15) days within
which Tenant may elect to terminate this Lease, upon thirty (30) days' advance
written notice to Landlord. Tenant's termination right described in the
preceding sentence shall not apply if the Damage was caused by the negligent or
intentional acts of Tenant or its employees, agents, contractors or invitees.
Failure of Tenant to exercise said election within said fifteen (15) day period
shall constitute Tenant's agreement to accept delivery of the Premises under
this Lease whenever tendered by Landlord, provided Landlord thereafter pursues
reconstruction or restoration diligently to completion, subject to delays caused
by Force Majeure Events. If Landlord is unable to repair the Damage to the
Premises or the Project during such two hundred ten (210) day period due to
Force Majeure Events, the two hundred ten (210) day period shall be extended by
the period of delay caused by the Force Majeure Events. Subject to Section 9.3
below, if Landlord or Tenant terminates this Lease in accordance with this
Section 9.1, Tenant shall continue to pay all Base Rent, Operating Expense
increases, Real Property Tax increases and other amounts due hereunder which
arise prior to the date of termination.
9.2. DEFINITION OF MATERIAL DAMAGE. "Material Damage" to the Building
shall occur if, in Landlord's reasonable judgment, (a) the entire cost of
repairing all of the Damage to the Building , exceeds thirty five percent (35%)
of the replacement cost of the Building; (b) the holder of any mortgage or deed
of trust encumbering the Project requires that insurance proceeds available to
repair the Damage in excess of Two Hundred Fifty Thousand Dollars ($250,000) be
applied to the repayment of the indebtedness secured by the mortgage or the deed
of trust, or (c) the Damage occurs during the last twelve (12) months of the
Term of the Lease.
9.3. ABATEMENT OF RENT. If Landlord elects to repair Damage to the Project
and all or part of the Premises will be unusable or inaccessible to Tenant in
the ordinary conduct of its business until the Damage is repaired, and the
Damage was not caused by the negligence or intentional acts of Tenant or its
employees, agents, contractors or invitees, Tenant's Base Rent, Tenant's Share
of Operating Expense increases and Tenant's Share of Real Property Taxes shall
be abated until the repairs are completed in proportion to the amount of the
Premises which is unusable or inaccessible to Tenant in the ordinary conduct of
its business. Notwithstanding the foregoing, there shall be no abatement of Base
Rent, Tenant's Share of Operating Expense increases and Tenant's Share of Real
Property Taxes by reason of any portion of the Premises being unusable or
inaccessible for a period equal to five (5) consecutive business days or less.
If the cause of the Damage or destruction is an earthquake or a flood, Tenant
shall only be entitled to an abatement of rent when and if Landlord receives
reimbursement for such rent from insurance proceeds, if any.
9.4.
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9.5. TENANT'S PROPERTY. As more fully set forth in Section 21, Landlord
shall not be liable to Tenant or its employees, agents, contractors, invitees or
customers for loss or Damage to merchandise, tenant improvements, fixtures,
automobiles, furniture, equipment, computers, files or other property
(hereinafter collectively "Tenant's property") located at the Project. Tenant
shall repair or replace all of Tenant's property at Tenant's sole cost and
expense. Tenant acknowledges that it is Tenant's sole responsibility to obtain
adequate insurance coverage to compensate Tenant for Damage to Tenant's
property.
9.6. WAIVER. Landlord and Tenant hereby waive the provisions of any
statutes which relate to the termination of leases when leased property is
damaged or destroyed and agree that such event shall be governed by the terms of
this Lease.
10. REAL AND PERSONAL PROPERTY TAXES.
10.1. PAYMENT OF TAXES. Tenant shall pay to Landlord during the Term
hereof, in addition to Base Rent and Tenant's Share of Operating Expense
increases, Tenant's Share of the amount by which all "Real Property Taxes" (as
defined in Section 10.2 below) for each Comparison Year exceeds the amount of
all Real Property Taxes for the Base Year. Tenant's Share of Real Property Tax
increases shall be payable by Tenant at the same time, in the same manner and
under the same terms and conditions as Tenant pays Tenant's Share of Operating
Expense increases as provided in Section 4.2(f) of this Lease. Except as
expressly provided in Section 10.4 below, if the Real Property Taxes incurred
during any Comparison Year are less that the Real Property Taxes incurred during
the Base Year, Tenant shall not be entitled to receive any credit, offset,
reduction or benefit as a result of said occurrence.
10.2. DEFINITION OF "REAL PROPERTY TAX." As used herein, the term "Real
Property Tax" shall include any form of real estate tax or assessment, general,
special, ordinary or extraordinary, improvement bond or bonds imposed on the
Project or any portion thereof by any authority having the direct or indirect
power to tax, including any city, county, state or federal government, or any
school, agricultural, sanitary, fire, street, drainage or other improvement
district thereof, as against any legal or equitable interest of Landlord in the
Project or in any portion thereof, unless such tax is defined as an Operating
Expense by Section 4.2(c). Real Property Taxes shall not include income,
inheritance and gift taxes.
10.3. PERSONAL PROPERTY TAXES. Tenant shall pay prior to delinquency all
taxes assessed against and levied upon trade fixtures, furnishings, equipment
and all other personal property of Tenant contained in the Premises or related
to Tenant's use of the Premises. If any of Tenant's personal property shall be
assessed with Landlord's real or personal property, Tenant shall pay to Landlord
the taxes attributable to Tenant within THIRTY (30) days after receipt of a
written statement from Landlord setting forth the taxes applicable to Tenant's
property.
10.4. REASSESSMENTS. From time to time Landlord may challenge the assessed
value of the Project as determined by applicable taxing authorities and/or
Landlord may attempt to cause the Real Property Taxes to be reduced on other
grounds. If Landlord is successful in causing the Real Property Taxes to be
reduced or in obtaining a refund, rebate, credit or similar benefit (hereinafter
collectively referred to as a "reduction"), Landlord shall have the option, in
its sole discretion, to (a) retain the benefit of the reduction and to pay, at
Landlord's sole expense, the costs incurred by Landlord in causing the reduction
to be made or (b) to the extent practicable, to credit the reduction(s) to Real
Property Taxes for the calendar year to which a reduction applies and to
recalculate the Real Property Taxes owed by Tenant for years after the year in
which the reduction applies based on the reduced Real Property Taxes (if a
reduction applies to Tenant's Base Year, the Base Year Real Property Taxes shall
be reduced by the amount of the reduction and Tenant's Share of Real Property
Tax increases shall be recalculated for all Comparison Years following the year
of the reduction based on the lower Base Year amount). If Landlord proceeds in
accordance with (b) above, all costs incurred by Landlord in obtaining the Real
Property Tax reductions shall be considered an Operating Expense and Landlord
shall determine, in its sole discretion to which years any reductions will be
applied. In addition, if Landlord proceeds in accordance with (b) above, all
accounting and related costs incurred by Landlord in calculating new Base Years
for tenants and in making all other adjustments shall be an Operating Expense.
If Landlord proceeds in accordance with (a) above, Landlord shall not be
obligated to refund to Tenant all or any portion of the reduction or to reduce
Real Property Taxes for the years to which any reductions apply.
11. UTILITIES.
11.1. SERVICES PROVIDED BY LANDLORD. Subject to all governmental rules,
regulations and guidelines applicable thereto, Landlord shall provide HVAC to
the Premises for normal office use during the times described in Section 11.3,
reasonable amounts of electricity for normal office lighting and fractional
horsepower office machines, water in the Premises or in the Common Areas
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for reasonable and normal drinking and lavatory use, replacement light bulbs
and/or fluorescent tubes and ballasts for standard overhead fixtures, and
Building standard janitorial services pursuant to Exhibit D attached hereto.
11.2. OCCUPANT DENSITY. Tenant shall maintain a ratio of not more than one
Occupant (as defined below) for each one hundred seventy five (175) square feet
of rentable area in the Premises. For purposes of this Section, "Occupants"
shall be deemed to mean employees and contractors of Tenant and shall not
include people not employed by Tenant that deliver or pick up mail or other
packages at the Premises, employees of Landlord or employees of Landlord's
agents or contractors. Tenant acknowledges that increased numbers of Occupants
causes additional wear and tear on the Premises and the Common Areas, additional
use of electricity, water and other utilities, and additional demand for other
Building services. Tenant's failure to comply with the requirements of this
Section shall constitute a default under Section 13.1 and Landlord shall have
the right, in addition to any other remedies it may have at law or equity, to
specifically enforce Tenant's obligations under this Section.
11.3. HOURS OF SERVICE. Building services and utilities shall be provided
Monday through Friday from 8:00 a.m. to 6:00 p.m. and Saturdays from 9:00 a.m.
to 1:00 p.m. Janitorial services shall be provided Monday through Friday. Except
as specifically provided below, HVAC and other Building services shall not be
provided at other times or on nationally recognized holidays. Tenant
acknowledges that there will be no air circulation or temperature control within
the Premises when the HVAC is not operating and , consequently, during such
times the Premises may not be suitable for human occupation or for the operation
of computers and other heat sensitive equipment. Holidays shall mean New Year's
Day, Xxxxxx Xxxxxx Xxxx Xx. Day, Presidents' Day, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day. Landlord shall use its best
efforts to provide HVAC to Tenant at times other than those set forth above
subject to (a) the payment by Tenant of Landlord's standard charge, as
determined by Landlord from time to time, in the manner set forth in the
following sentence, for after hours HVAC and (b) Tenant providing to Landlord at
least one (1) business day's advance written notice of Tenant's need for after
hours HVAC. As of the date of this Lease, and subject to future increases equal
to actual increases in electrical charges, the standard charge for after hours
HVAC is Forty Dollars ($40.00) per hour. Tenant shall pay all after hours HVAC
charges to Landlord within thirty (30) days after Landlord bills Tenant for said
charges.
SEE ADDENDUM PARAGRAPH 6
11.4. EXCESS USAGE BY TENANT. Notwithstanding the use set forth in Section
1.5, Tenant shall not use Building utilities or services in excess of those used
by the average office building tenant using its premises for ordinary office
use. Tenant shall not install at the Premises office machines, lighting fixtures
or other equipment which will generate above average heat, noise or vibration at
the Premises or which will adversely effect the temperature maintained by the
HVAC system. If Tenant does use Building utilities or services in excess of
those used by the average office building tenant, Landlord shall have the right,
in addition to any other rights or remedies it may have under this Lease, to (a)
at Tenant's expense, install separate metering devices at the Premises, and to
charge Tenant for its usage, (b) require Tenant to pay to Landlord all costs,
expenses and damages incurred by Landlord as a result of such usage, and (c)
require Tenant to stop using excess utilities or services.
11.5. INTERRUPTIONS. Subject to Addendum Paragraph 7, Tenant agrees that
Landlord shall not be liable to Tenant for its failure to furnish gas,
electricity, telephone service, water, HVAC or any other utility services or
building services when such failure is occasioned, in whole or in part, by
repairs, replacements, or improvements, by any strike, lockout or other labor
trouble, by inability to secure electricity, gas, water, telephone service or
other utility at the Project, by any accident, casualty or event arising from
any cause whatsoever, including the negligence of Landlord, its employees,
agents and contractors, by act, negligence or default of Tenant or any other
person or entity, or by an other cause, and such failures shall never be deemed
to constitute an eviction or disturbance of Tenant's use and possession of the
Premises or relieve Tenant from the obligation of paying rent or performing any
of its obligations under this Lease. Furthermore, Landlord shall not be liable
under any circumstances for loss of property or for injury to, or interference
with, Tenant's business, including, without limitation, loss of profits, however
occurring, through or in connection with or incidental to a failure to furnish
any such services or utilities. Landlord may comply with voluntary controls or
guidelines promulgated by any governmental entity relating to the use or
conservation of energy, water, gas, light or electricity or the reduction of
automobile or other emissions without creating any liability of Landlord to
Tenant under this Lease.
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SEE ADDENDUM PARAGRAPH 7
12. Assignment and Subletting.
12.1. LANDLORD'S CONSENT REQUIRED. Tenant shall not voluntarily or by
operation of law assign, transfer, hypothecate, mortgage, sublet, or otherwise
transfer or encumber all or any part of Tenant's interest in this Lease or in
the Premises (hereinafter collectively a "Transfer"), without Landlord's prior
written consent, which shall not be unreasonably withheld. Landlord shall
respond to Tenant's written request for consent hereunder within thirty (30)
days after Landlord's receipt of the written request from Tenant. Any attempted
Transfer without such consent shall be void and shall constitute a material
default and breach of this Lease. Tenant's written request for Landlord's
consent shall include, and Landlord's thirty (30) day response period referred
to above shall not commence, unless and until Landlord has received from Tenant,
all of the following information: (a) financial statements for the proposed
assignee for the lesser of the past three (3) years or for so many years as such
proposed assignee or subtenant shall have been in existence prepared in
accordance with generally accepted accounting principles, (b) federal tax
returns for the proposed assignee for the lesser of the past three (3) years or
for so many years as such proposed assignee or subtenant shall have been in
existence, (c) a TRW credit report or similar report on the proposed assignee or
subtenant, (d) a detailed description of the business the assignee or subtenant
intends to operate at the Premises, (e) the proposed effective date of the
assignment or sublease, (f) a copy of the proposed sublease or assignment
agreement which includes all of the terms and conditions of the proposed
assignment or sublease, (g) a description of any ownership or commercial
relationship between Tenant and the proposed assignee or subtenant, and (h) a
detailed description of any Alterations the proposed assignee or subtenant
desires to make to the Premises. If the obligations of the proposed assignee or
subtenant will be guaranteed by any person or entity, Tenant's written request
shall not be considered complete until the information described in (a), (b) and
(c) of the previous sentence has been provided with respect to each proposed
guarantor. "Transfer" shall also include the transfer (a) if Tenant is a
corporation, and Tenant's stock is not publicly traded over a recognized
securities exchange, of more than forty-nine percent (49%) of the voting stock
of such corporation during the Term of this Lease (whether or not in one or more
transfers) or the dissolution, merger or liquidation of the corporation, or (b)
if Tenant is a partnership or other entity, of more than forty-nine percent
(49%) of the profit and loss participation in such partnership or entity during
the Term of this Lease (whether or not in one or more transfers) or the
dissolution, merger or liquidation of the partnership or entity. If Tenant is a
limited or general partnership (or is comprised of two or more persons,
individually or as co-partners), Tenant shall not be entitled to change or
convert to (i) a limited liability company, (ii) a limited liability partnership
or (iii) any other entity which possesses the characteristics of limited
liability without the prior written consent of Landlord, which consent may be
given or withheld in Landlord's sole discretion. Tenant's sole remedy in the
event that Landlord shall wrongfully withhold consent to or disapprove any
assignment or sublease shall be to obtain an order by a court of competent
jurisdiction that Landlord grant such consent; in no event (provided Landlord
has acted in good faith) shall Landlord be liable for damages with respect to
its granting or withholding consent to any proposed assignment or sublease. If
Landlord (having acted in good faith) shall exercise any option to recapture the
Premises, or shall deny a request for consent to a proposed assignment or
sublease, Tenant shall indemnify, defend and hold Landlord harmless from and
against any and all losses, liabilities, damages, costs and claims that may be
made against Landlord by the proposed assignee or subtenant, or by any brokers
or other persons claiming a commission or similar compensation in connection
with the proposed assignment or sublease.
SEE ADDENDUM PARAGRAPH 8
12.2. LEVERAGED BUY-OUT. The involvement by Tenant or its assets in any
transaction, or series of transactions (by way of merger, sale, acquisition,
financing, refinancing, transfer, leveraged buy-out or otherwise) whether or not
a formal assignment or hypothecation of this Lease or Tenant's assets occurs,
shall be considered to be an assignment of this Lease by Tenant to which
Landlord may reasonably withhold its consent unless after such transaction or
series of transactions, the surviving entity will have sufficient assets to meet
Tenant's then remaining obligations under this Lease. If any of the foregoing
transactions result in a violation of this Section 12.2, Landlord shall have the
right to exercise such remedies as are provided for such violation in this
Lease, but neither such remedies nor this Section 12.2 shall be construed to
confer upon Landlord any right to seek or obtain an injunction to prohibit any
merger, sale, acquisition, financing, refinancing, leveraged buyout or transfer
of Tenant or its assets which gives rise to any such violation or alleged
violation.
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12.3. STANDARD FOR APPROVAL. Landlord shall not unreasonably withhold
its consent to a Transfer provided that Tenant has complied with each and every
requirement, term and condition of this Section 12. Tenant acknowledges and
agrees that each requirement, term and condition in this Section 12 is a
reasonable requirement, term or condition. It shall be deemed reasonable for
Landlord to withhold its consent to a Transfer if any requirement, term or
condition of this Section 12 is not complied with or: (a) the Transfer would
cause Landlord to be in violation of its obligations under another lease or
agreement to which Landlord is a party; (b) in Landlord's reasonable judgment, a
proposed assignee has a smaller net worth than Tenant had on the date this Lease
was entered into with Tenant or is less able financially to pay the rents due
under this Lease as and when they are due and payable; (c) a proposed assignee's
or subtenant's business will impose a burden on the Project's parking
facilities, elevators, Common Areas or utilities that is greater than the burden
imposed by Tenant, in Landlord's reasonable judgment; (d) the terms of a
proposed assignment or subletting will allow the proposed assignee or subtenant
to exercise a right of renewal, right of expansion, right of first offer, right
of first refusal or similar right held by Tenant; (e) a proposed assignee or
subtenant refuses to enter into a written assignment agreement or sublease,
reasonably satisfactory to Landlord, which provides that it will abide by and
assume all of the terms and conditions of this Lease for the term of any
assignment or sublease and containing such other terms and conditions as
Landlord reasonably deems necessary; (f) the use of the Premises by the proposed
assignee or subtenant will not be identical to the use permitted by this Lease;
(g) any guarantor of this Lease refuses to consent to the Transfer or to execute
a written agreement reaffirming the guaranty; (h) Tenant is in default as
defined in Section 13.1 at the time of the request after the expiration of all
applicable notice and cure periods; (i) if requested by Landlord, the assignee
or subtenant refuses to sign a non-disturbance and attornment agreement in favor
of Landlord's lender; (j) Landlord has sued or been sued by the proposed
assignee or subtenant or has otherwise been involved in a legal dispute with the
proposed assignee or subtenant; (k) the assignee or subtenant is involved in a
business which is not in keeping with the then current standards of the Project;
(l) the proposed assignee or subtenant is an existing tenant of the Project or
is a person or entity then negotiating with Landlord for the lease of space in
the Project; (m) the assignment or sublease will result in there being more than
one subtenant of the Premises (e.g., the assignee or subtenant intends to use
the Premises as an executive suite); (n) the assignee or subtenant is a
governmental or quasi-governmental entity or an agency, department or
instrumentality of a governmental or quasi-governmental agency; or (o) the terms
of a proposed assignment or subletting will allow the proposed assignee or
subtenant to pay a base rent less than the prevailing rental rate in the
Building at the time of Tenant's request to such Transfer.
12.4. ADDITIONAL TERMS AND CONDITIONS. The following terms and
conditions shall be applicable to any Transfer:
(a) Regardless of Landlord's consent, no Transfer shall
release Tenant from Tenant's obligations hereunder or alter the primary
liability of Tenant to pay the rent and other sums due Landlord hereunder and to
perform all other obligations to be performed by Tenant hereunder or release any
guarantor from its obligations under its guaranty.
(b) Landlord may accept rent from any person other than Tenant
pending approval or disapproval of an assignment or subletting.
(c) Neither a delay in the approval or disapproval of a
Transfer, nor the acceptance of rent, shall constitute a waiver or estoppel of
Landlord's right to exercise its rights and remedies for the breach of any of
the terms or conditions of this Section 12.
(d) The consent by Landlord to any Transfer shall not
constitute a consent to any subsequent Transfer by Tenant or to any subsequent
or successive Transfer by an assignee or subtenant. However, Landlord may
consent to subsequent Transfers or any amendments or modifications thereto
without notifying Tenant or anyone else liable on the Lease and without
obtaining their consent, and such action shall not relieve such persons from
liability under this Lease.
(e) In the event of any default under this Lease, Landlord may
proceed directly against Tenant, any guarantors or anyone else responsible for
the performance of this Lease, including any subtenant or assignee, without
first exhausting Landlord's remedies against any other person or entity
responsible therefor to Landlord, or any security held by Landlord.
(f) Landlord's written consent to any Transfer by Tenant shall
not constitute an acknowledgment that no default then exists under this Lease
nor shall such consent be deemed a waiver of any then existing default.
(g) The discovery of the fact that any financial statement
relied upon by Landlord in giving its consent to an assignment or subletting was
materially false when made shall, at Landlord's election, render Landlord's
consent null and void.
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(h) Landlord shall not be liable under this Lease or under any
sublease to any subtenant.
(i) No assignment or sublease may be modified or amended
without Landlord's prior written consent.
(j) The occurrence of a transaction described in Section 12.2
shall give Landlord the right (but not the obligation) to require that Tenant
immediately provide Landlord with an additional Security Deposit equal to an
amount reasonably determined by Landlord to secure Tenant's then remaining
obligations under this Lease and Landlord may make its receipt of such amount a
condition to Landlord's consent to such transaction.
(k) Any assignee of, or subtenant under, this Lease shall, by
reason of accepting such assignment or entering into such sublease, be deemed,
for the benefit of Landlord, to have assumed and agreed to conform and comply
with each and every term, covenant, condition and obligation herein to be
observed or performed by Tenant during the term of said assignment or sublease,
other than such obligations as are contrary or inconsistent with provisions of
an assignment or sublease to which Landlord has specifically consented in
writing.
12.5. ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. The
following terms and conditions shall apply to any subletting by Tenant of all or
any part of the Premises and shall be deemed included in all subleases under
this Lease whether or not expressly incorporated therein:
(a) Tenant hereby absolutely and unconditionally assigns and
transfers to Landlord all of Tenant's interest in all rentals and income arising
from any sublease entered into by Tenant, and Landlord may collect such rent and
income and apply same toward Tenant's obligations under this Lease; provided,
however, that until a default shall occur in the performance of Tenant's
obligations under this Lease, Tenant may receive, collect and enjoy the rents
accruing under such sublease. Landlord shall not, by reason of this or any other
assignment of such rents to Landlord nor by reason of the collection of the
rents from a subtenant, be deemed to have assumed or recognized any sublease or
to be liable to the subtenant for any failure of Tenant to perform and comply
with any of Tenant's obligations to such subtenant under such sublease,
including, but not limited to, Tenant's obligation to return any Security
Deposit. Tenant hereby irrevocably authorizes and directs any such subtenant,
upon receipt of a written notice from Landlord stating that a default exists in
the performance of Tenant's obligations under this Lease, to pay to Landlord the
rents due as they become due under the sublease. Tenant agrees that such
subtenant shall have the right to rely upon any such statement and request from
Landlord, and that such subtenant shall pay such rents to Landlord without any
obligation or right to inquire as to whether such default exists and
notwithstanding any notice from or claim from Tenant to the contrary.
(b) In the event Tenant shall default in the performance of
its obligations under this Lease, Landlord at its option and without any
obligation to do so, may require any subtenant to attorn to Landlord, in which
event Landlord shall undertake the obligations of Tenant under such sublease
from the time of the exercise of said option to the termination of such
sublease; provided, however, Landlord shall not be liable for any prepaid rents
or Security Deposit paid by such subtenant to Tenant or for any other prior
defaults of Tenant under such sublease.
12.6. TRANSFER PREMIUM FROM ASSIGNMENT OR SUBLETTING. Landlord shall be
entitled to receive from Tenant (as and when received by Tenant) as an item of
additional rent one-half of all amounts received by Tenant from the subtenant or
assignee in excess of the amounts payable by Tenant to Landlord hereunder
(hereinafter the "Transfer Premium") . The Transfer Premium shall be reduced by
the reasonable brokerage commissions, reasonable and customary subtenant
improvement allowances and legal fees actually paid by Tenant in order to assign
the Lease or to sublet a portion of the Premises. "Transfer Premium" shall mean
all Base Rent, additional rent or other consideration of any type whatsoever
payable by the assignee or subtenant in excess of the Base Rent and additional
rent payable by Tenant under this Lease. If less than all of the Premises is
transferred, the Base Rent and the additional rent shall be determined on a per
rentable square foot basis. Transfer Premium shall also include, but not be
limited to, key money and bonus money paid by the assignee or subtenant to
Tenant in connection with such Transfer, and any payment in excess of fair
market value for services rendered by Tenant to the assignee or subtenant or for
assets, fixtures, inventory, equipment, or furniture transferred by Tenant to
the assignee or subtenant in connection with such Transfer. For purposes of
calculating the Transfer Premium, expenses will be amortized over the life of
the sublease. This Section 12.6 shall not apply to a Transfer to a Permitted
Transferee as defined in Paragraph 8 of the Addendum.
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12.7. LANDLORD'S OPTION TO RECAPTURE SPACE. Notwithstanding anything to
the contrary contained in this Section 12, Landlord shall have the option, by
giving written notice to Tenant within thirty (30) days after receipt of any
request by Tenant to assign this Lease or to sublease space in the Premises, to
terminate this Lease with respect to said space as of the date thirty (30) days
after Landlord's election. In the event of a recapture by Landlord, if this
Lease shall be canceled with respect to less than the entire Premises, the Base
Rent, Tenant's Share of Operating Expense increases, Tenant's Share of Real
Property Tax increases and the number of parking spaces Tenant may use shall be
adjusted on the basis of the number of rentable square feet retained by Tenant
in proportion to the number of rentable square feet contained in the original
Premises, and this Lease as so amended shall continue thereafter in full force
and effect, and upon request of either party, the parties shall execute written
confirmation of same. If Landlord recaptures only a portion of the Premises, it
shall construct and erect at its sole cost such partitions as may be required to
sever the space to be retained by Tenant from the space recaptured by Landlord.
Landlord may, at its option, lease any recaptured portion of the Premises to the
proposed subtenant or assignee or to any other person or entity without
liability to Tenant. Tenant shall not be entitled to any portion of the profit,
if any, Landlord may realize on account of such termination and reletting.
Tenant acknowledges that the purpose of this Section 12.7 is to enable Landlord
to receive profit in the form of higher rent or other consideration to be
received from an assignee or sublessee, to give Landlord the ability to meet
additional space requirements of other tenants of the Project and to permit
Landlord to control the leasing of space in the Project. Tenant acknowledges and
agrees that the requirements of this Section 12.7 are commercially reasonable
and are consistent with the intentions of Landlord and Tenant. This Section 12.7
shall not apply to a Transfer to a Permitted Transferee as defined in Paragraph
8 of the Addendum.
12.8. LANDLORD'S EXPENSES. In the event Tenant shall assign this Lease
or sublet the Premises or request the consent of Landlord to any Transfer, then
Tenant shall pay Landlord's reasonable costs and expenses incurred in connection
therewith, including, but not limited to, reasonable attorneys', architects',
accountants', engineers' or other consultants' fees.
13. DEFAULT; REMEDIES.
13.1. DEFAULT BY TENANT. Landlord and Tenant hereby agree that the
occurrence of any one or more of the following events is a material default by
Tenant under this Lease and that said default shall give Landlord the rights
described in Section 13.2. Landlord or Landlord's authorized agent shall have
the right to execute and deliver any notice of default, notice to pay rent or
quit or any other notice Landlord gives Tenant.
(a) Tenant's failure to make any payment of Base Rent,
Tenant's Share of Operating Expense increases, Tenant's Share of Real Property
Tax increases, parking charges, charges for after hours HVAC, late charges, or
any other payment required to be made by Tenant hereunder, as and when due,
where such failure shall continue for a period of five (5) days after written
notice thereof from Landlord to Tenant. In the event that Landlord serves Tenant
with a notice to pay rent or quit pursuant to applicable unlawful detainer
statutes, such notice shall also constitute the notice required by this Section
13.1(a).
(b)
(c) The failure of Tenant to comply with any of its
obligations under Sections 6.1, 6.2(b), 7.2, 7.3, 8, 12, 18, 20, 22, 23, 25, 33,
34, and 55 and 59 where Tenant fails to comply with its obligations or fails to
cure any earlier breach of such obligation within ten (10) days following
written notice from Landlord to Tenant. In the event Landlord serves Tenant with
a notice to quit or any other notice pursuant to applicable unlawful detainer
statutes, said notice shall also constitute the notice required by this Section
13.1(c).
(d) The failure by Tenant to observe or perform any of the
covenants, conditions or provisions of this Lease to be observed or performed by
Tenant (other than those referenced in Sections 13.1(a), (b) and (c), above),
where such failure shall continue for a period of twenty (20) days after written
notice thereof from Landlord to Tenant; provided, however, that if the nature of
Tenant's non-performance is such that more than twenty (20) days are reasonably
required for its cure, then Tenant shall not be deemed to be in default if
Tenant commences such cure within said twenty (20) day period and thereafter
diligently pursues such cure to completion. In the event that Landlord serves
Tenant with a notice to quit pursuant to applicable unlawful detainer statutes,
said notice shall also constitute the notice required by this Section 13.1(d).
(e) (i) The making by Tenant or any guarantor of Tenant's
obligations hereunder of any general arrangement or general assignment for the
benefit of creditors; (ii) Tenant or any guarantor becoming a "debtor" as
defined in 11 U.S.C. 101 or any successor statute thereto (unless, in the case
of a
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petition filed against Tenant or guarantor, the same is dismissed within sixty
(60) days); (iii) the appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where possession is not restored to Tenant within thirty
(30) days; (iv) the attachment, execution or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such seizure is not discharged within thirty (30)
days; or (v) the insolvency of Tenant. In the event that any provision of this
Section 13.1(e) is contrary to any applicable law, such provision shall be of no
force or effect.
(f) If any financial statement, representation or warranty
given to Landlord by Tenant, or by any guarantor of Tenant's obligations
hereunder is determined to have been materially false at the time given
(g) If Tenant is a corporation, a partnership, or a limited
liability company, the dissolution or liquidation of Tenant, other than in
connection with a Permitted Transfer.
(h) If Tenant's obligations under this Lease are guaranteed;
(i) the death of a guarantor, (ii) the termination of a guarantor's liability
with respect to this Lease other than in accordance with the terms of such
guaranty, (iii) a guarantor becoming insolvent or the subject of a bankruptcy
filing, (iv)a guarantor's refusal to honor the guaranty, or (v) a guarantor's
breach of its guaranty obligation on an anticipatory breach basis.
13.2. REMEDIES.
(a) In the event of any material default or breach of this
Lease by Tenant, Landlord may, at any time thereafter, with or without notice or
demand, and without limiting Landlord in the exercise of any right or remedy
which Landlord may have by reason of such default:
(i) terminate Tenant's right to possession of the
Premises by any lawful means, in which case this Lease and the Term hereof shall
terminate and Tenant shall immediately surrender possession of the Premises to
Landlord. If Landlord terminates this Lease, Landlord may recover from Tenant
(A) the worth at the time of award of the unpaid rent which had been earned at
the time of termination; (B) the worth at the time of award of the amount by
which the unpaid rent which would have been earned after termination until the
time of award exceeds the amount of such rental loss that Tenant proves could
have been reasonably avoided; (C) the worth at the time of award of the amount
by which the unpaid rent for the balance of the Term after the time of award
exceeds the amount of such rental loss that Tenant proves could be reasonably
avoided; and (D) any other amount necessary to compensate Landlord for all
detriment proximately caused by Tenant's failure to perform its obligations
under the Lease or which in the ordinary course of things would be likely to
result therefrom, including, but not limited to, the cost of recovering
possession of the Premises, expenses of releasing, including necessary
renovation and alteration of the Premises, reasonable attorneys' fees, any real
estate commissions actually paid by Landlord and the unamortized value of any
free rent, reduced rent, tenant improvement allowance or other economic
concessions provided by Landlord. The "worth at time of award" of the amounts
referred to in Section 13.2(a)(i)(A) and (B) shall be computed by allowing
interest at the lesser of ten percent (10%) per annum or the maximum interest
rate permitted by applicable law. The worth at the time of award of the amount
referred to in Section 13.2(a)(i)(C) shall be computed by discounting such
amount at the discount rate of the Federal Reserve Bank of Baltimore at the time
of award plus one percent (1%). For purposes of this Section 13.2(a)(i), "rent"
shall be deemed to be all monetary obligations required to be paid by Tenant
pursuant to the terms of this Lease.
(ii) maintain Tenant's right of possession in which
event Landlord shall have the remedy which permits Landlord to continue this
Lease in effect after Tenant's breach and abandonment and recover rent as it
becomes due.
(iii) collect sublease rents (or appoint a receiver
to collect such rent) and otherwise perform Tenant's obligations at the
Premises, it being agreed, however, that the appointment of a receiver for
Tenant shall not constitute an election by Landlord to terminate this Lease.
(iv) pursue any other remedy now or hereafter
available to Landlord under the laws or judicial decisions of the state in which
the Premises are located.
(b) No remedy or election hereunder shall be deemed exclusive,
but shall, wherever possible, be cumulative with all other remedies at law or in
equity. The expiration or termination of this Lease and/or the termination of
Tenant's right to possession of the Premises shall not relieve Tenant of
liability under any indemnity provisions of this Lease as to matters occurring
or accruing during the Term hereof or by reason of Tenant's occupancy of the
Premises.
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(c) If Tenant abandons or vacates the Premises, Landlord may
re-enter the Premises and such re-entry shall not be deemed to constitute
Landlord's election to accept a surrender of the Premises or to otherwise
relieve Tenant from liability for its breach of this Lease. No surrender of the
Premises shall be effective against Landlord unless Landlord has entered into a
written agreement with Tenant in which Landlord expressly agrees to (i) accept a
surrender of the Premises and (ii) relieve Tenant of liability under the Lease.
The delivery by Tenant to Landlord of possession of the Premises shall not
constitute the termination of the Lease or the surrender of the Premises.
13.3. DEFAULT BY LANDLORD. Landlord shall not be in default under this
Lease unless Landlord fails to perform obligations required of Landlord within
twenty (20) days after written notice by Tenant to Landlord and to the holder of
any mortgage or deed of trust encumbering the Project whose name and address
shall have theretofore been furnished to Tenant in writing, specifying wherein
Landlord has failed to perform such obligation, except in the event of an
emergency in which case Landlord shall perform such obligations as soon as
commercially reasonable; provided, however, that if the nature of Landlord's
obligation is such that more than twenty (20) days are required for its cure,
then Landlord shall not be in default if Landlord commences performance within
such twenty (20) day period and thereafter diligently pursues the same to
completion. In no event shall Tenant have the right to terminate this Lease as a
result of Landlord's default, and Tenant's remedies shall be limited to damages
and/or an injunction. This Lease and the obligations of Tenant hereunder shall
not be affected or impaired because Landlord is unable to fulfill any of its
obligations hereunder or is delayed in doing so, if such inability or delay is
caused by reason of a Force Majeure Event, and the time for Landlord's
performance shall be extended for the period of any such delay. Any claim,
demand, right or defense by Tenant that arises out of this Lease or the
negotiations which preceded this Lease shall be barred unless Tenant commences
an action thereon, or interposes a defense by reason thereof, within the earlier
to occur of (i) one (1) year after the expiration of the Lease, and (ii) the
expiration of the applicable statute of limitation with respect to the inaction,
omission, event or action that gave rise to such claim, demand, right or
defense.
13.4. LATE CHARGES. Tenant hereby acknowledges that late payment by
Tenant to Landlord of Base Rent, Tenant's Share of Operating Expense increases,
Tenant's Share of Real Property Tax increases, parking charges, after hours HVAC
charges, or other sums due hereunder will cause Landlord to incur costs not
contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to, processing
and accounting charges and late charges which may be imposed on Landlord by the
terms of any mortgage or trust deed encumbering the Project. Accordingly, if any
installment of Base Rent, Tenant's Share of Operating Expense increases,
Tenant's Share of Real Property Tax increases, parking charges, after hours HVAC
charges or any other sum due from Tenant shall not be received by Landlord
within five (5) days of when such amount shall be due, then, without any
requirement for notice or demand to Tenant, Tenant shall immediately pay to
Landlord a late charge equal to six percent (6%) of such overdue amount. The
parties hereby agree that such late charge represents a fair and reasonable
estimate of the costs Landlord will incur by reason of late payment by Tenant.
Acceptance of such late charge by Landlord shall in no event constitute a waiver
of Tenant's default with respect to such overdue amount, nor prevent Landlord
from exercising any of the other rights and remedies granted hereunder including
the assessment of interest under Section 13.5. Notwithstanding the foregoing,
Landlord agrees to waive imposition of such late charge on one (1) occasion in
any twelve (12) month period provided the overdue payment is made within five
(5) days after Landlord gives Tenant written notice that payment was not made
when due.
13.5. INTEREST ON PAST-DUE OBLIGATIONS. Except as expressly herein
provided, any amount due to Landlord that is not paid within five (5) days of
when due shall bear interest at the lesser of ten percent (10%) per annum, or
the maximum rate permitted by applicable law. Payment of such interest shall not
excuse or cure any default by Tenant under this Lease; provided, however, that
interest shall not be payable on late charges incurred by Tenant nor on any
amounts upon which late charges are paid by Tenant.
13.6. PAYMENT OF RENT AND SECURITY DEPOSIT AFTER DEFAULT. If Tenant
fails to pay Base Rent, Tenant's Share of Operating Expense increases, Tenant's
Share of Real Property Tax increases, parking charges or any other monetary
obligation due hereunder on the date it is due, after Tenant's second failure to
pay any monetary obligation on the date it is due beyond the expiration of any
applicable notice and cure and grace periods set forth herein in any twelve (12)
month period, at Landlord's option, all monetary obligations of Tenant hereunder
shall thereafter be paid by cashiers check, and Tenant shall, upon demand,
provide Landlord with an additional Security Deposit equal to three (3) months'
Base Rent. If Landlord has required Tenant to make said payments by cashiers
check or to provide an additional Security Deposit, Tenant's failure to make a
payment by cashiers check or to provide an additional Security Deposit, shall be
a material default hereunder.
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14. LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT. All covenants and
agreements to be kept or performed by Tenant under this Lease shall be performed
by Tenant at Tenant's sole cost and expense and without any reduction of rent.
If Tenant shall fail to perform any of its obligations under this Lease, within
a reasonable time after such performance is required by the terms of this Lease,
Landlord may, but shall not be obligated to, after five (5) days' prior written
notice to Tenant, make any such payment or perform any such act on Tenant's
behalf without waiving its rights based upon any default of Tenant and without
releasing Tenant from any obligations hereunder. Tenant shall pay to Landlord,
within thirty (30) days after delivery by Landlord to Tenant of statements
therefor, an amount equal to the expenditures reasonably made by Landlord in
connection with the remedying by Landlord of Tenant's defaults pursuant to the
provisions of this Section 14.
15. CONDEMNATION. If any portion of the Premises or the Project are taken under
the power of eminent domain, or sold under the threat of the exercise of said
power (all of which are herein called "Condemnation"), this Lease shall
terminate as to the part so taken as of the date the condemning authority takes
title or possession, whichever first occurs; provided that if so much of the
Premises or Project are taken by such Condemnation as would substantially and
adversely affect the operation of Tenant's business conducted from the Premises,
and said taking lasts for ninety (90) days or more, Tenant shall have the
option, to be exercised only in writing within thirty (30) days after Landlord
shall have given Tenant written notice of such taking (or in the absence of such
notice, within thirty (30) days after the condemning authority shall have taken
possession), to terminate this Lease as of the date the condemning authority
takes such possession. If a taking lasts for less than ninety (90) days,
Tenant's rent shall be abated during said period but Tenant shall not have the
right to terminate this Lease. If Tenant does not terminate this Lease in
accordance with the foregoing, this Lease shall remain in full force and effect
as to the portion of the Premises remaining, except that the rent, Tenant's
Share of Operating Expenses and Tenant's Share of Real Property Tax increases
shall be reduced in the proportion that the usable floor area of the Premises
taken bears to the total usable floor area of the Premises. Common Areas taken
shall be excluded from the Common Areas usable by Tenant and no reduction of
rent shall occur with respect thereto or by reason thereof. Landlord shall have
the option in its sole discretion to terminate this Lease as of the taking of
possession by the condemning authority, by giving written notice to Tenant of
such election within thirty (30) days after receipt of notice of a taking by
Condemnation of any part of the Premises or the Project. Any award for the
taking of all or any part of the Premises or the Project under the power of
eminent domain or any payment made under threat of the exercise of such power
shall be the property of Landlord, whether such award shall be made as
compensation for diminution in value of the leasehold, for good will, for the
taking of the fee, as severance damages, or as damages for tenant improvements;
provided, however, that Tenant shall be entitled to any separate award for loss
of or damage to Tenant's removable personal property, for moving expenses and
for any other damages recoverable at law or in equity. In the event that this
Lease is not terminated by reason of such Condemnation, and subject to the
requirements of any lender that has made a loan to Landlord encumbering the
Project, Landlord shall to the extent of severance damages received by Landlord
in connection with such Condemnation, repair any damage to the Project caused by
such Condemnation except to the extent that Tenant has been reimbursed therefor
by the condemning authority. This Section, not general principles of law or the
State of Maryland Code of Civil Procedure shall govern the rights and
obligations of Landlord and Tenant with respect to the Condemnation of all or
any portion of the Project.
16. VEHICLE PARKING.
16.1. USE OF PARKING FACILITIES. During the Term and subject to the
rules and regulations attached hereto as Exhibit "C", as modified by Landlord
from time to time (the "Rules"), Tenant shall be entitled to use the number of
parking spaces set forth in Section 1.13 in the parking facility of the Project
. For purposes of this Lease, a "parking space" refers to the space in which one
(1) motor vehicle is intended to park . Landlord reserves the right at any time
to relocate Tenant's reserved and unreserved parking spaces provided Tenant's
use thereof is not materially and adversely affected by such relocation. If
Tenant commits or allows in the parking facility any of the activities
prohibited by the Lease or the Rules, then Landlord shall have the right,
without notice, in addition to such other rights and remedies that it may have,
to remove or tow away the vehicle involved and charge the cost to Tenant, which
cost shall be payable by Tenant within thirty (30) days of demand by Landlord.
Tenant's parking rights are the personal rights of Tenant and Tenant shall not
transfer, assign, or otherwise convey its parking rights separate and apart from
this Lease.
16.2. PARKING CHARGES.
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In no event shall Tenant be obligated to pay parking charges during the Term of
this Lease.
17. BROKER'S FEE. Tenant and Landlord each represent and warrant to the other
that neither has had any dealings or entered into any agreements with any
person, entity, broker or finder other than the persons, if any, listed in
Section 1.15, in connection with the negotiation of this Lease, and no other
broker, person, or entity is entitled to any commission or finder's fee in
connection with the negotiation of this Lease, and Tenant and Landlord each
agree to indemnify, defend and hold the other harmless from and against any
claims, damages, costs, expenses, attorneys' fees or liability for compensation
or charges which may be claimed by any such unnamed broker, finder or other
similar party by reason of any dealings, actions or agreements of the
indemnifying party.
18. ESTOPPEL CERTIFICATE.
18.1. DELIVERY OF CERTIFICATE. Tenant shall at any time but not more
than twice in any twelve (12) month period, upon not less than fifteen (15)
days' prior written notice from Landlord execute, acknowledge and deliver to
Landlord a statement in writing certifying to the best knowledge of Tenant such
information as Landlord may reasonably request including, but not limited to,
the following: (a) that this Lease is unmodified and in full force and effect
(or, if modified, stating the nature of such modification and certifying that
this Lease, as so modified, is in full force and effect) (b) the date to which
the Base Rent and other charges are paid in advance and the amounts so payable,
(c) that there are not, to Tenant's knowledge, any uncured defaults or
unfulfilled obligations on the part of Landlord, or specifying such defaults or
unfulfilled obligations, if any are claimed, (d) that all tenant improvements to
be constructed by Landlord, if any, have been completed in accordance with
Landlord's obligations and (e) that Tenant has taken possession of the Premises.
Any such statement may be conclusively relied upon by any prospective purchaser
or encumbrancer of the Project. Landlord agrees, at any time and from time to
time (but no more often than once annually) upon not less than twenty (20) days'
prior written notice by Tenant, to execute, acknowledge and deliver to Tenant a
statement in writing certifying to any proposed Transferee, or any other person
designated by Tenant, as of the date of such estoppel certificate (i) that this
Lease is unmodified and in full force and effect (or if there have been any
modifications, that the Lease is in full force and effect as modified and
stating the modifications), (ii) the dates to which the rent and any other
charges hereunder have been paid, (iii) whether or not, to the knowledge of
Landlord, Tenant is in default in the performance of any covenant, agreement or
condition contained in this Lease, and if so, specifying the nature of such
default, (iv) the address to which notices to Landlord are to be sent, and (v)
other matters reasonably requested by Tenant.
18.2. FAILURE TO DELIVER CERTIFICATE. If Tenant shall fail to execute
and deliver such statement within such fifteen (15) days, then Landlord shall
send Tenant a second written request for such statement. If Tenant shall fail to
so execute and deliver such written statement within five (5) business days
after this second request then , the failure of Tenant to deliver such statement
within such time shall constitute a material default of Tenant hereunder .
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19. LANDLORD'S LIABILITY. Tenant acknowledges that Landlord shall have the right
to transfer all or any portion of its interest in the Project and to assign this
Lease to the transferee. Tenant agrees that in the event of such a transfer
Landlord shall automatically be released from all liability under this Lease;
and Tenant hereby agrees to look solely to Landlord's transferee for the
performance of Landlord's obligations hereunder after the date of the transfer.
Upon such a transfer, Landlord shall, at its option, return Tenant's Security
Deposit to Tenant or transfer Tenant's Security Deposit to Landlord's transferee
and, in either event, Landlord shall have no further liability to Tenant for the
return of its Security Deposit. Subject to the rights of any lender holding a
mortgage or deed of trust encumbering all or part of the Project, Tenant agrees
to look solely to Landlord's equity interest in the Project for the collection
of any judgment requiring the payment of money by Landlord arising out of (a)
Landlord's failure to perform its obligations under this Lease or (b) the
negligence or willful misconduct of Landlord, its partners, employees and
agents. No other property or assets of Landlord shall be subject to levy,
execution or other enforcement procedure for the satisfaction of any judgment or
writ obtained by Tenant against Landlord. No partner, employee or agent of
Landlord shall be personally liable for the performance of Landlord's
obligations hereunder or be named as a party in any lawsuit arising out of or
related to, directly or indirectly, this Lease and the obligations of Landlord
hereunder. The obligations under this Lease do not constitute personal
obligations of the individual partners of Landlord and Tenant shall not seek
recourse against the individual partners of Landlord or their assets.
20. INDEMNITY.
SEE ADDENDUM PARAGRAPH 9
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21. EXEMPTION OF LANDLORD FROM LIABILITY. Tenant hereby agrees that Landlord
shall not be liable for injury to Tenant's business or any loss of income
therefrom or for loss of or damage to the merchandise, tenant improvements,
fixtures, furniture, equipment, computers, files, automobiles, or other property
of Tenant, Tenant's employees, agents, contractors or invitees, or any other
person in or about the Project, nor shall Landlord be liable for injury to the
person of Tenant, Tenant's employees, agents, contractors or invitees, whether
such damage or injury is caused by or results from any cause whatsoever
including, but not limited to, theft, criminal activity at the Project,
negligent security measures, bombings or bomb scares, Hazardous Substances or
Medical Waste, fire, steam, electricity, gas, water or rain, flooding, breakage
of pipes, sprinklers, plumbing, air conditioning or lighting fixtures, or from
any other cause, whether said damage or injury results from conditions arising
upon the Premises or upon other portions of the Project, or from other sources
or places, or from new construction or the repair, alteration or improvement of
any part of the Project, unless the cause of the damage or injury arises out of
Landlord's or its employees, agents or contractors grossly negligent or
intentional acts. Landlord shall not be liable for any damages arising from any
act or neglect of any employees, agents, contractors or invitees of any other
tenant, occupant or user of the Project, nor from the failure of Landlord to
enforce the provisions of the lease of any other tenant of the Project. Tenant,
as a material part of the consideration to Landlord hereunder, hereby assumes
all risk of damage to Tenant's property or business or injury to persons, in,
upon or about the Project arising from any cause, excluding Landlord's gross
negligence or willful misconduct, or the gross negligence or willful misconduct
of its employees, agents or contractors, and Tenant hereby waives all claims in
respect thereof against Landlord, its employees, agents and contractors.
22. HAZARDOUS MATERIAL.
22.1. DEFINITION AND CONSENT. The term "Hazardous Substance" as used in
this Lease shall mean any product, substance, chemical, material or waste whose
presence, nature, quantity and/or intensity of existence, use, manufacture,
disposal, transportation, spill, release or affect, either by itself or in
combination with other materials expected to be on the Premises, is either: (a)
potentially injurious to the public health, safety or welfare, the environment
or the Premises, (b) regulated or monitored by any governmental entity, (c) a
basis for liability of Landlord to any governmental entity or third party under
any federal, state or local statute or common law theory or (d) defined as a
hazardous material or substance by any federal, state or local law or
regulation. Except for small quantities of ordinary office supplies such as
copier toner, liquid paper, glue, ink and common household cleaning materials,
Tenant shall not cause or permit any Hazardous Substance to be brought, kept, or
used in or about the Premises or the Project by Tenant, its agents, employees,
contractors or invitees.
22.2. DUTY TO INFORM LANDLORD. If Tenant knows, or has reasonable cause
to believe, that a Hazardous Substance, or a condition involving or resulting
from same, has come to be located in, on or under or about the Premises or the
Project, Tenant shall immediately give written notice of such fact to Landlord.
Tenant shall also immediately give Landlord (without demand by Landlord) a copy
of any statement, report, notice, registration, application, permit, license,
given to or received from, any governmental authority or private party, or
persons entering or occupying the Premises, concerning the presence, spill,
release, discharge of or exposure to, any Hazardous Substance or contamination
in, on or about the Premises or the Project.
22.3. INSPECTION; COMPLIANCE. Landlord and Landlord's employees, agent,
contractors and lenders shall have the right to enter the Premises at any time
in the case of an emergency, and otherwise at reasonable times, for the purpose
of inspecting the condition of the Premises and for verifying compliance by
Tenant with this Section 22. Landlord shall have the right to employ experts
and/or consultants in connection with its examination of the Premises and with
respect to the installation, operation, use, monitoring, maintenance, or removal
of any Hazardous Substance on or from the Premises. The costs and expenses of
any such inspections shall be paid by the party requesting same, unless a
contamination, caused or materially contributed to by Tenant, is found to exist
or be imminent, or unless the inspection is requested or ordered by governmental
authority as the result of any such existing or imminent violation or
contamination. In any such case, Tenant shall upon request reimburse Landlord
for the cost and expenses of such inspection. To the best of Landlord's actual
knowledge,
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there is no Hazardous Material in violation of any applicable environmental law
in the Building as of the date this Lease is fully executed by Landlord and
Tenant.
23. MEDICAL WASTE.
23.1. DISPOSAL OF MEDICAL WASTE. Tenant hereby agrees, at Tenant's sole
expense, to dispose of its medical waste in compliance with all federal, state
and local laws, rules and regulations relating to the disposal of medical waste
and to dispose of the medical waste in a prudent and reasonable manner. Tenant
shall not place any medical waste in refuse containers emptied by Landlord's
janitorial staff or in the Project's refuse containers. At Landlord's option, in
Landlord's sole discretion, Landlord shall have the right, upon sixty (60) days'
advance written notice to Tenant, at any time and from time to time, to elect to
provide medical waste disposal services to Tenant. If Landlord elects to provide
medical waste disposal services to Tenant, all costs incurred by Landlord in
providing such services shall be paid by Tenant to Landlord as additional rent.
Landlord may xxxx Tenant for said costs based upon the actual cost of providing
said services to Tenant, as determined by Landlord, in Landlord's sole
discretion, or Landlord may xxxx said expenses based upon Tenant's Share of the
total cost of providing said services.
23.2. DUTY TO INFORM LANDLORD. Within ten (10) days following
Landlord's written request, Tenant shall provide Landlord with any information
requested by Landlord concerning the existence, generation or disposal of
medical waste at the Premises, including, but not limited to, the following
information: (a) the name, address and telephone number of the person or entity
employed by Tenant to dispose of its medical waste, including a copy of any
contract with said person or entity, (b) a list of each type of medical waste
generated by Tenant at the Premises and a description of how Tenant disposes of
said medical waste, (c) a copy of any laws, rules or regulations in Tenant's
possession relating to the disposal of the medical waste generated by Tenant,
and (d) copies of any licenses or permits obtained by Tenant in order to
generate or dispose of said medical waste. Tenant shall also immediately provide
to Landlord (without demand by Landlord) a copy of any notice, registration,
application, permit, or license given to or received from any governmental
authority or private party, or persons entering or occupying the Premises,
concerning the presence, release, exposure or disposal of any medical waste in
or about the Premises or the Project.
23.3. INSPECTION; COMPLIANCE. Landlord and Landlord's employees,
agents, contractors and lenders shall have the right to enter the Premises at
any time in the case of an emergency, and otherwise at reasonable times, for the
purpose of verifying compliance by Tenant with this Section 23. Landlord shall
have the right to employ experts and/or consultants in connection with its
examination of the Premises and with respect to the generation and disposal of
medical waste on or from the Premises. The cost and expenses of any such
inspection shall be paid by Landlord, unless it is determined that Tenant is not
disposing of its medical waste in a manner permitted by applicable law, in which
case Tenant shall immediately reimburse Landlord for the cost of such
inspection.
24. TENANT IMPROVEMENTS. Tenant acknowledges and agrees that Landlord shall not
be obligated to construct any tenant improvements on behalf of Tenant unless a
work letter agreement (the "Work Letter") is attached to this Lease as Schedule
1. If a space plan is attached to the Work Letter, the space plan shall not be
binding on Landlord unless the space plan has been approved by Landlord in
writing. Except as set forth in a Work Letter, it is specifically understood and
agreed that Landlord has no obligation and has made no promises to alter,
remodel, improve, renovate, repair or decorate the Premises, the Project, or any
part thereof, or to provide any allowance for such purposes, and that no
representations respecting the condition of the Premises or the Project have
been made by Landlord to Tenant.
SEE ADDENDUM PARAGRAPH 10
25. SUBORDINATION.
25.1. EFFECT OF SUBORDINATION. This Lease, and any Option (as defined
in Section 26 below) granted hereby, upon Landlord's written election, shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or any
other hypothecation or security now or hereafter placed upon the Project and to
any and all advances made on the security thereof and to all renewals,
modifications, consolidations, replacements and extensions thereof.
Notwithstanding such subordination, Tenant's right to quiet possession of the
Premises shall not be disturbed if Tenant is not in default and so long as
Tenant shall pay the rent and observe and perform all of the provisions of this
Lease, unless this Lease is otherwise terminated pursuant to its terms. At the
request of any mortgagee, trustee or ground lessor, Tenant shall attorn to such
person or entity. If any mortgagee, trustee or ground lessor shall elect to have
this Lease and any Options granted hereby prior to the lien of its mortgage,
deed of trust or ground lease, and shall give written notice thereof to Tenant,
this Lease and such Options shall be deemed prior to such mortgage, deed of
trust or ground lease, whether this Lease or such Options are dated prior or
subsequent to the date of said mortgage, deed of trust or ground lease or the
date of recording thereof. In the event of the foreclosure of a
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security device, the new owner shall not (a) be liable for any act or omission
of any prior landlord or with respect to events occurring prior to its
acquisition of title, (b) be liable for the breach of this Lease by any prior
landlord, or (c) be subject to any offsets or defenses which Tenant may have
against the prior landlord . Landlord represents and warrants to Tenant that as
of the date this Lease is executed, the Project is not subject to any mortgage,
deed of trust or any other hypothecation or security. In the event that, the
Project or the Building shall become subject to any lien of any ground lease,
mortgage, deed of trust or any other hypothecation or security after the
Commencement Date, Landlord shall obtain a subordination, non-disturbance and
attornment agreement on behalf of Tenant on the lender's commercially reasonable
form.
25.2. EXECUTION OF DOCUMENTS. Tenant agrees to execute and acknowledge
any documents Landlord reasonably requests that Tenant execute to effectuate an
attornment, a subordination, or to make this Lease or any Option granted herein
prior to the lien of any mortgage, deed of trust or ground lease, as the case
may be.
26. OPTIONS.
26.1. DEFINITION. As used in this Lease, the word "Option" has the
following meaning: (1) the right or option to extend the Term of this Lease or
to renew this Lease, and (2) the option or right of first refusal to lease the
Premises or the right of first offer to lease the Premises or the right of first
refusal to lease other space within the Project or the right of first offer to
lease other space within the Project, and (3) the right or option to terminate
this Lease prior to its expiration date or to reduce the size of the Premises.
Any Option granted to Tenant by Landlord must be evidenced by a written option
agreement attached to this Lease as a rider or addendum or said option shall be
of no force or effect.
26.2. OPTIONS PERSONAL. Each Option granted to Tenant in this Lease, if
any, is personal to the original Tenant and may be exercised only by the
original Tenant while occupying the entire Premises and may not be exercised or
be assigned, voluntarily or involuntarily, by or to any person or entity other
than Tenant, including, without limitation, any permitted transferee as defined
in Section 12. The Options, if any, herein granted to Tenant are not assignable
separate and apart from this Lease, nor may any Option be separated from this
Lease in any manner, either by reservation or otherwise. If at any time an
Option is exercisable by Tenant, the Lease has been assigned, or a sublease
exists as to any portion of the Premises, the Option shall be deemed null and
void and neither Tenant nor any assignee or subtenant shall have the right to
exercise the Option.
26.3. MULTIPLE OPTIONS. In the event that Tenant has multiple Options
to extend or renew this Lease a later Option cannot be exercised unless the
prior Option to extend or renew this Lease has been so exercised.
26.4. EFFECT OF DEFAULT ON OPTIONS. Tenant shall have no right to
exercise an Option (i) during the time commencing from the date Landlord gives
to Tenant a notice of default pursuant to Section 13.1 and continuing until the
noncompliance alleged in said notice of default is cured, or (ii) if Tenant is
in default of any of the terms, covenants or conditions of this Lease. The
period of time within which an Option may be exercised shall not be extended or
enlarged by reason of Tenant's inability to exercise an Option because of the
provisions of this Section 26.4.
26.5. LIMITATIONS ON OPTIONS. Notwithstanding anything to the contrary
contained in any rider or addendum to this Lease, any options, rights of first
refusal or rights of first offer granted hereunder shall be subject and
secondary to Landlord's right to first offer and lease any such space to any
tenant who is then occupying or leasing such space at the time the space becomes
available for leasing and shall be subject and subordinated to any other
options, rights of first refusal or rights of first offer previously given to
any other person or entity.
26.6. NOTICE OF EXERCISE OF OPTION. Notwithstanding anything to the
contrary contained in Section 40, Tenant may only exercise an option by
delivering its written notice of exercise to Landlord by certified mail, return
receipt and date of delivery requested. It shall be Tenant's obligation to prove
that such notice was so sent in a timely manner and was delivered to Landlord by
the U.S. Postal Service.
SEE ADDENDUM PARAGRAPH 11 AND 12
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27. LANDLORD RESERVATIONS. Landlord shall have the right: (a) to change the name
and address of the Project or Building upon not less than ninety (90) days prior
written notice; (b) to, as an Operating Expense reimbursable in accordance with
the provisions of Section 4.2 herein, provide and install Building standard
graphics on or near the door of the Premises and such portions of the Common
Areas as Landlord shall determine, in Landlord's sole discretion; (c) to permit
any tenant the exclusive right to conduct any business as long as such exclusive
right does not conflict with any rights expressly given herein; and (d) to place
signs, notices or displays upon the roof, interior, exterior or Common Areas of
the Project. Tenant shall not use a representation (photographic or otherwise)
of the Building or the Project or their name(s) in connection with Tenant's
business or suffer or permit anyone, except in an emergency, to go upon the roof
of the Building. Landlord reserves the right to use the exterior walls of the
Premises, and the area beneath, adjacent to and above the Premises, together
with the right to install, use, maintain and replace equipment, machinery,
pipes, conduits and wiring through the Premises, which serve other parts of the
Project, provided that Landlord's use does not unreasonably interfere with
Tenant's use of the Premises.
28. CHANGES TO PROJECT. Landlord shall have the right, in Landlord's sole
discretion, from time to time, to make changes to the size, shape, location,
number and extent of the improvements comprising the Project (hereinafter
referred to as "Changes") including, but not limited to, the Project interior
and exterior, the Common Areas, elevators, escalators, restrooms, HVAC,
electrical systems, communication systems, fire protection and detection
systems, plumbing systems, security systems, parking control systems, driveways,
entrances, parking spaces, parking areas and landscaped areas provided such
Changes do not unreasonably interfere with Tenant's use of the Premises. In
connection with the Changes, Landlord may, among other things, erect scaffolding
or other necessary structures at the Project, limit or eliminate access to
portions of the Project, including portions of the Common Areas, or perform work
in the Building, which work may create noise, dust or leave debris in the
Building. Provided the work necessary to effect such Changes is carried out so
as not to unreasonably interfere with Tenant's use of the Premises, Tenant
hereby agrees that such Changes and Landlord's actions in connection with such
Changes shall in no way constitute a constructive eviction of Tenant or entitle
Tenant to any abatement of rent. Landlord shall have no responsibility or for
any reason be liable to Tenant for any direct or indirect injury to or
interference with Tenant's business arising from the Changes, nor shall Tenant
be entitled to any compensation or damages from Landlord for any inconvenience
or annoyance occasioned by such Changes or Landlord's actions in connection with
such Changes.
29.
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30. HOLDING OVER. If Tenant remains in possession of the Premises or any part
thereof after the expiration or earlier termination of the term hereof with
Landlord's consent, such occupancy shall be a tenancy from month to month upon
all the terms and conditions of this Lease pertaining to the obligations of
Tenant, except that the Base Rent payable shall be one hundred fifty percent
(150%) of the Base Rent payable immediately preceding the termination date of
this Lease and all Options, if any, shall be deemed terminated and be of no
further effect. If Tenant remains in possession of the Premises or any part
thereof after the expiration of the Term hereof without Landlord's consent,
Tenant shall, at Landlord's option, be treated as a tenant at sufferance or a
trespasser. Nothing contained herein shall be construed to constitute Landlord's
consent to Tenant holding over at the expiration or earlier termination of the
Term. Tenant hereby agrees to indemnify, hold harmless and defend Landlord from
any cost, loss, claim or liability (including attorneys' fees) Landlord may
incur as a result of Tenant's failure to surrender possession of the Premises to
Landlord upon the termination of this Lease.
31. LANDLORD'S ACCESS.
31.1. ACCESS. Upon reasonable advance notice, except in the event of an
emergency, where no advance notice shall be required and subject to Landlord's
reasonable security measures, Landlord and Landlord's agents, contractors and
employees shall have the right to enter the Premises at reasonable times for the
purpose of inspecting the Premises, performing any services required of
Landlord, showing the Premises to prospective purchasers, lenders, or tenants,
undertaking safety measures and making alterations, repairs, improvements or
additions to the Premises or to the Project. In the event of an emergency,
Landlord may gain access to the Premises by any reasonable means, and Landlord
shall not be liable to Tenant for damage to the Premises or to Tenant's property
resulting from such access. In the event of any such entry, including any entry
in an emergency, Landlord shall use commercially reasonable efforts (given the
situation) to refrain from unreasonably interfering (again, given the situation)
with Tenant's use of the Premises or damaging Tenant's property. Landlord may at
any time place on or about the Building for sale or for lease signs and Landlord
may at any time during the last one hundred twenty (120) days of the Term hereof
place on or about the Premises for lease signs. Notwithstanding anything to the
contrary contained in this Lease, all entries to the Premises shall be subject
to Tenant's reasonable security requirements and procedures of which Landlord
has been given prior written notice.
31.2. KEYS. Landlord shall have the right to retain keys to the locks
on the entry doors to the Premises and all interior doors at the Premises. At
Landlord's option, Landlord may require Tenant to obtain all keys to door locks
at the Premises from Landlord's engineering staff or Landlord's locksmith and to
only use Landlord's engineering staff or Landlord's locksmith to change locks at
the Premises. Tenant shall pay Landlord's or its locksmith's standard charge for
all keys and other services obtained from Landlord's engineering staff or
locksmith.
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32. SECURITY MEASURES. Tenant hereby acknowledges that Landlord shall have no
obligation whatsoever to provide guard service or other security measures for
the benefit of the Premises or the Project, and Landlord shall have no liability
to Tenant due to its failure to provide such services. Tenant assumes all
responsibility for the protection of Tenant, its agents, employees, contractors
and invitees and the property of Tenant and of Tenant's agents, employees,
contractors and invitees from acts of third parties. Nothing herein contained
shall prevent Landlord, at Landlord's sole option, from implementing security
measures for the Project or any part thereof, in which event Tenant shall
participate in such security measures and the cost thereof shall be included
within the definition of Operating Expenses, and Landlord shall have no
liability to Tenant and its agents, employees, contractors and invitees arising
out of Landlord's negligent provision of security measures. Landlord shall have
the right, but not the obligation, to require all persons entering or leaving
the Project to identify themselves to a security guard and to reasonably
establish that such person should be permitted access to the Project.
33. EASEMENTS. Landlord reserves to itself the right, from time to time, to
grant such easements, rights and dedications that Landlord deems necessary or
desirable, and to cause the recordation of parcel maps and restrictions, so long
as such easements, rights, dedications, maps and restrictions do not
unreasonably interfere with the use of the Premises by Tenant. Tenant shall sign
any of the aforementioned documents within ten (10) days after Landlord's
request . The obstruction of Tenant's view, air, or light by any structure
erected in the vicinity of the Project, whether by Landlord or third parties,
shall in no way affect this Lease or impose any liability upon Landlord.
34. TRANSPORTATION MANAGEMENT. Tenant shall fully comply at its sole expense
with all present or future programs implemented or required by any governmental
or quasi-governmental entity or Landlord to manage parking, transportation, air
pollution, or traffic in and around the Project or the metropolitan area in
which the Project is located.
35. SEVERABILITY. The invalidity of any provision of this Lease as determined by
a court of competent jurisdiction shall in no way affect the validity of any
other provision hereof.
36. TIME OF ESSENCE. Time is of the essence with respect to each of the
obligations to be performed by Tenant and Landlord under this Lease.
37. DEFINITION OF ADDITIONAL RENT. All monetary obligations of Tenant to
Landlord under the terms of this Lease, including, but not limited to, Base
Rent, Tenant's Share of Operating Expenses, Tenant's Share of Real Property
Taxes, parking charges, late charges and charges for after hours HVAC shall be
deemed to be rent.
38. INCORPORATION OF PRIOR AGREEMENTS. This Lease and the attachments listed in
Section 1.16 contain all agreements of the parties with respect to the lease of
the Premises and any other matter mentioned herein. No prior or contemporaneous
agreement or understanding pertaining to any such matter shall be effective.
Except as otherwise stated in this Lease, Tenant hereby acknowledges that no
real estate broker nor Landlord or any employee or agents of any of said persons
has made any oral or written warranties or representations to Tenant concerning
the condition or use by Tenant of the Premises or the Project or concerning any
other matter addressed by this Lease.
39. AMENDMENTS. This Lease may be modified in writing only, signed by the
parties in interest at the time of the modification.
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40. NOTICES. Subject to the requirements of Section 26.6 of this Lease, all
notices required or permitted by this Lease shall be in writing and may be
delivered (a) in person (by hand, by messenger or by courier service), (b) by
U.S. Postal Service certified mail, return receipt requested, (c) by U.S. Postal
Service Express Mail, Federal Express or other overnight courier and shall be
deemed sufficiently given if served in a manner specified in this Section 40.
The addresses set forth in Section 1.17 of this Lease shall be the address of
each party for notice purposes. Landlord or Tenant may by written notice to the
other specify a different address for notices purposes, except that upon
Tenant's taking possession of the Premises, the Premises shall constitute
Tenant's address for the purpose of mailing or delivering notices to Tenant. A
copy of all notices required or permitted to be given to Landlord hereunder
shall be concurrently transmitted to such party or parties at such addresses as
Landlord may from time to time hereinafter designate by written notice to
Tenant. Any notice sent by certified mail, return receipt requested, shall be
deemed given three (3) days after deposited with the U.S. Postal Service.
Notices delivered by U.S. Express Mail, Federal Express or other courier shall
be deemed given on the date delivered by the carrier to the appropriate party's
address for notice purposes. If notice is received on Saturday, Sunday or a
legal holiday, it shall be deemed received on the next business day. Nothing
contained herein shall be construed to limit Landlord's right to serve any
notice to pay rent or quit or similar notice by any method permitted by
applicable law, and any such notice shall be effective if served in accordance
with any method permitted by applicable law whether or not the requirements of
this Section have been met.
41. WAIVERS. No waiver by Landlord or Tenant of any provision hereof shall be
deemed a waiver of any other provision hereof or of any subsequent breach by
Landlord or Tenant of the same or any other provision. Landlord's consent to, or
approval of, any act shall not be deemed to render unnecessary the obtaining of
Landlord's consent to or approval of any subsequent act by Tenant. The
acceptance of rent hereunder by Landlord shall not be a waiver of any preceding
breach by Tenant of any provision hereof, other than the failure of Tenant to
pay the particular rent so accepted, regardless of Landlord's knowledge of such
preceding breach at the time of acceptance of such rent. No acceptance by
Landlord of partial payment of any sum due from Tenant shall be deemed a waiver
by Landlord of its right to receive the full amount due, nor shall any
endorsement or statement on any check or accompanying letter from Tenant be
deemed an accord and satisfaction. Tenant hereby waives for Tenant and all those
claiming under Tenant all rights now or hereafter existing to redeem by order or
judgment of any court or by legal process or writ, Tenant's right of occupancy
of the Premises after any termination of this Lease.
42. COVENANTS. This Lease shall be construed as though the covenants contained
herein are independent and not dependent and Tenant hereby waives the benefit of
any statute to the contrary. All provisions of this Lease to be observed or
performed by Tenant are both covenants and conditions.
43. BINDING EFFECT; CHOICE OF LAW. Subject to any provision hereof restricting
assignment or subletting by Tenant, this Lease shall bind the parties, their
heirs, personal representatives, successors and assigns. This Lease shall be
governed by the laws of the state in which the Project is located and any
litigation concerning this Lease between the parties hereto shall be initiated
in the county in which the Project is located.
44. ATTORNEYS' FEES. If Landlord or Tenant brings an action to enforce the terms
hereof or declare rights hereunder, the prevailing party in any such action, or
appeal thereon, shall be entitled to its reasonable attorneys' fees and court
costs to be paid by the losing party as fixed by the court in the same or
separate suit, and whether or not such action is pursued to decision or
judgment. The attorneys' fee award shall not be computed in accordance with any
court fee schedule, but shall be such as to fully reimburse all attorneys' fees
and court costs reasonably incurred in good faith. Landlord shall be entitled to
reasonable attorneys' fees and all other costs and expenses incurred in the
preparation and service of notices of monetary default and consultations in
connection therewith, whether or not a legal action is subsequently commenced in
connection with such default. Landlord and Tenant agree that attorneys' fees
incurred with respect to defaults and bankruptcy are actual pecuniary losses
within the meaning of Section 365(b)(1)(B) of the Bankruptcy Code or any
successor statute.
45. AUCTIONS. Tenant shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises or the Common Areas.
The holding of any auction on the Premises or Common Areas in violation of this
Section 45 shall constitute a material default hereunder.
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46. SIGNS. Tenant shall not place any sign upon the Premises (including on the
inside or the outside of the doors or windows of the Premises) or the Project
without Landlord's prior written consent, which may be given or withheld in
Landlord's sole discretion. Landlord shall have the right to place any sign it
deems appropriate on any portion of the Project except the interior of the
Premises. Any sign Landlord permits Tenant to place upon the Premises shall be
maintained by Tenant, at Tenant's sole expense. If Landlord permits Tenant to
include its name in the Building's directory, the cost of placing Tenant's name
in the directory and the cost of any subsequent modifications thereto shall be
paid by Tenant, at Tenant's sole expense.
SEE ADDENDUM PARAGRAPH 13
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47. MERGER. The voluntary or other surrender of this Lease by Tenant, or a
mutual cancellation thereof, or a termination by Landlord, shall not result in
the merger of Landlord's and Tenant's estates, and shall, at the option of
Landlord, terminate all or any existing subtenancies or may, at the option of
Landlord, operate as an assignment to Landlord of any or all of such
subtenancies.
48. QUIET POSSESSION. Subject to the other terms and conditions of this Lease,
and the rights of any lender, and provided Tenant is not in default hereunder,
Tenant shall have quiet possession of the Premises for the entire term hereof,
subject to all of the provisions of this Lease.
49. AUTHORITY. If either Landlord or Tenant is a corporation, trust, general or
limited partnership, or other entity, Landlord and Tenant, and each individual
executing this Lease on behalf of such entity, represents and warrants that such
individual is duly authorized to execute and deliver this Lease on behalf of
said entity, that said entity is duly authorized to enter into this Lease, and
that this Lease is enforceable against said entity in accordance with its terms.
If either Landlord or Tenant is a corporation, trust or partnership, each such
party shall deliver to the other party upon demand evidence of such authority
satisfactory to the other party.
50. CONFLICT. Except as otherwise provided herein to the contrary, any conflict
between the printed provisions, exhibits, addenda or riders of this Lease and
the typewritten or handwritten provisions, if any, shall be controlled by the
typewritten or handwritten provisions.
51. MULTIPLE PARTIES. If more than one person or entity is named as Tenant
herein, the obligations of Tenant shall be the joint and several responsibility
of all persons or entities named herein as Tenant. Service of a notice in
accordance with Section 40 on one Tenant shall be deemed service of notice on
all Tenants.
52. INTERPRETATION. This Lease shall be interpreted as if it was prepared by
both parties and ambiguities shall not be resolved in favor of Tenant because
all or a portion of this Lease was prepared by Landlord. The captions contained
in this Lease are for convenience only and shall not be deemed to limit or alter
the meaning of this Lease. As used in this Lease the words tenant and landlord
include the plural as well as the singular. Words used in the neuter gender
include the masculine and feminine gender.
53. PROHIBITION AGAINST RECORDING. Neither this Lease, nor any memorandum,
affidavit or other writing with respect thereto, shall be recorded by Tenant or
by anyone acting through, under or on behalf of Tenant. Landlord shall have the
right at its sole cost and expense to record a memorandum of this Lease, and
Tenant shall execute, acknowledge and deliver to Landlord for recording any
memorandum prepared by Landlord.
54. RELATIONSHIP OF PARTIES. Nothing contained in this Lease shall be deemed or
construed by the parties hereto or by any third party to create the relationship
of principal and agent, partnership, joint venturer or any association between
Landlord and Tenant.
55. RULES AND REGULATIONS. Tenant agrees to abide by and conform to the Rules
and to cause its employees, suppliers, customers and invitees to so abide and
conform. Landlord shall have the right, from time to time, to modify, amend and
enforce the Rules. Landlord shall not be responsible to Tenant for the failure
of other persons including, but not limited to, other tenants, their agents,
employees and invitees to comply with the Rules provided, in the event of any
conflict between the Rules and this Lease, the Lease shall be deemed to control.
Landlord shall have the right from time to time to enact reasonable
modifications and amendments to the Rules provided any such modification or
amendment does not adversely affect Tenant's rights hereunder in any material
respect. Landlord shall use commercially reasonable efforts to enforce the Rules
in a non-discriminating manner as against all tenants in the Building.
56. RIGHT TO LEASE. Landlord reserves the absolute right to effect such other
tenancies in the Project as Landlord in its sole discretion shall determine, and
Tenant is not relying on any representation that any specific tenant or number
of tenants will occupy the Project provided, in no event shall Landlord lease
any space in the Building except for use as office space by users customarily
found in comparable office buildings in the same geographic area.
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57. SECURITY INTEREST. (Intentionally omitted).
58. SECURITY FOR PERFORMANCE OF TENANT'S OBLIGATIONS. (Intentionally omitted).
59. FINANCIAL STATEMENTS. From time to time, at Landlord's request, Tenant shall
cause the following financial information to be delivered to Landlord, at
Tenant's sole cost and expense, upon not less than ten (10) days' advance
written notice from Landlord: the most recent quarterly financial statement for
Tenant and Tenant's financial statements for the previous two accounting years,
and such other financial information pertaining to Tenant or any guarantor as
Landlord or any lender or purchaser of Landlord may reasonably request. All
financial statements shall be prepared in accordance with generally accepted
accounting principals consistently applied and, if such is the normal practice
of Tenant, shall be audited by an independent certified public accountant.
Tenant hereby authorizes Landlord, from time to time, without notice to Tenant,
to obtain a credit report or credit history on Tenant form any credit reporting
company. Notwithstanding the foregoing, so long as Tenant is a publicly traded
company, Tenant needs only to submit its annual report to comply with the
provisions of this Section 59.
60. ATTACHMENTS. The items listed in Section 1.16 are a part of this Lease and
are incorporated herein by this reference.
61. CONFIDENTIALITY. (Intentionally omitted).
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62. WAIVER OF JURY TRIAL. LANDLORD AND TENANT HEREBY WAIVE THEIR RESPECTIVE
RIGHT TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM, COUNTERCLAIM OR
CROSS-COMPLAINT IN ANY ACTION, PROCEEDING AND/OR HEARING BROUGHT BY EITHER
LANDLORD AGAINST TENANT OR TENANT AGAINST LANDLORD ON ANY MATTER WHATSOEVER
ARISING OUT OF, OR IN ANY WAY CONNECTED WITH, THIS LEASE, THE RELATIONSHIP OF
LANDLORD AND TENANT, TENANT'S USE OR OCCUPANCY OF THE PREMISES, OR ANY CLAIM OF
INJURY OR DAMAGE, OR THE ENFORCEMENT OF ANY REMEDY UNDER ANY LAW, STATUTE, OR
REGULATION, EMERGENCY OR OTHERWISE, NOW OR HEREAFTER IN EFFECT.
LANDLORD AND TENANT ACKNOWLEDGE THAT THEY HAVE CAREFULLY READ AND REVIEWED THIS
LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS
LEASE, SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. TENANT ACKNOWLEDGES
THAT IT HAS BEEN GIVEN THE OPPORTUNITY TO HAVE THIS LEASE REVIEWED BY ITS LEGAL
COUNSEL PRIOR TO ITS EXECUTION. PREPARATION OF THIS LEASE BY LANDLORD OR
LANDLORD'S AGENT AND SUBMISSION OF SAME TO TENANT SHALL NOT BE DEEMED AN OFFER
BY LANDLORD TO LEASE THE PREMISES TO TENANT OR THE GRANT OF AN OPTION TO TENANT
TO LEASE THE PREMISES. THIS LEASE SHALL BECOME BINDING UPON LANDLORD AND TENANT
ONLY WHEN FULLY EXECUTED BY BOTH PARTIES AND WHEN LANDLORD HAS DELIVERED A FULLY
EXECUTED ORIGINAL OF THIS LEASE TO TENANT.
LANDLORD TENANT
TA/WESTERN, LLC, a Delaware limited liability
company VISUAL NETWORKS, INC.,
a Delaware corporation
BY: REALTY ASSOCIATES ADVISORS LLC, A By: /s/ XXXXX X. XXXXXXXX
DELAWARE LIMITED LIABILITY COMPANY, -----------------------
MANAGER
Xxxxx X. Xxxxxxxx
BY: REALTY ASSOCIATES ADVISORS
TRUST, A MASSACHUSETTS
BUSINESS TRUST, SOLE Chief Operating Officer
MEMBER
BY: /S/ XXXXX X. XXXXXXX
----------------------
Xxxxx X. Xxxxxxx
Regional Director
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ADDENDUM
THIS ADDENDUM (the "Addendum") is attached to the Lease dated as of
April 7, 2000, by and between TA/WESTERN, LLC, a Delaware limited liability
company ("Landlord") and VISUAL NETWORKS, INC., a Delaware corporation
("Tenant") and incorporated herein by reference thereto. To the extent that
there are any conflicts between the provisions of the Lease and the provisions
of this Addendum, the provisions of this Addendum shall supersede the
conflicting provisions of the Lease.
1. COMMENCEMENT DATE. Notwithstanding anything to the contrary herein,
the Commencement Date of this Lease shall be the earlier to occur of (a) the
substantial completion of the Improvements, as defined in Paragraph 10
hereinbelow, and (b) May 1, 2000.
2. OPERATING EXPENSES EXCLUSIONS.
Notwithstanding anything to the contrary contained in the
definitions of Operating Expenses set forth in Section 4.2(c) of the Lease,
Operating Expenses shall not include the following:
i.) Expenses incurred in leasing or procuring
tenants for the Building (including lease
commissions, advertising expenses and
expenses of renovating space for tenants);
ii.) Legal fees and other expenses incurred by
Landlord or agents in connection with
negotiations or disputes with other tenants
in the Building or Project or prospective
tenants for the Building or Project;
iii.) Allowances, concessions, permits, licenses,
inspections and other costs and expenses
incurred in the build-out of space for
tenants (including Tenant), or any cash or
other consideration paid by Landlord on
account of, with respect to, or in lieu of
the build-out described above;
iv.) Interest or amortization payments on any
mortgages or deeds of trust;
v.) Rents under ground leases;
vi.) Costs incurred to contain, xxxxx, remove,
clean up or otherwise modify the Building,
Project or the Land required as a result of
the presence of Hazardous Materials in,
about or below the Building, Project or the
Land, except to the extent caused by Tenant
or Tenant's employees, agents or invitees;
vii.) Expenses for which Landlord is reimbursed
(either by an insurer, condemnor, tenant,
warrantor or otherwise);
viii.) Increased insurance premiums caused by
Landlord's or any tenant's (other than
Tenant's) hazardous acts;
ix.) Landlord's costs of any services sold or
provided to tenants for which Landlord is
otherwise reimbursed by Tenant separately
under this Lease or any other tenant;
x.) Expenses for the correction of defects in
the initial construction of the Building or
Project;
xi.) Expenses in connection with services or
other benefits of a type which are not made
available to Tenant but which are provided
to another tenant or occupant, if any;
xii.) Landlord's general overhead expenses;
xiii.) The cost of maintaining any specialty
service such as a luncheon club, athletic or
recreational club;
xiv.) The cost of any special heating,
ventilating, air-conditioning, janitorial or
other special or extra services provided
exclusively to other tenants in excess of
the standard Building services;
xv.) Salaries, wages and benefits of any employee
above the level of senior property manager;
xvi.) Rental for any leased systems or equipment
which, if purchased, would constitute
capital expenditures;
xvii.) Costs of acquisition of sculpture, paintings
or other objects of art;
xviii.) Costs resulting from the gross negligence or
willful misconduct of Landlord, its
employees, agents, contractors or employees;
xix.) Fines, penalties or interest for failure to
make any payment in a timely fashion;
xx.) Costs incurred to correct violations by
Landlord of any law, rule, order or
regulation which was in effect as of the
Lease Commencement Date;
xxi.) Charges incurred to any affiliate of
Landlord or Landlord's managing agent, to
the extent such charges are in excess of the
prevailing market rate in transactions
between unrelated parties for comparable
goods or services;
xxii.) Advertising and marketing costs;
xxiii.) Costs incurred for capital improvements
unless made with the reasonable expectation
of reducing Operating Expenses (and all such
permitted capital costs shall be amortized
on a straight line basis over the useful
life of the capital improvement with only
the annual amortized portion being included
in Operating Expenses for any
Add-1
41
Comparison Year) or are required by law
first taking effect after the Commencement
Date; and
xxiv.) Management fees in excess of four percent
(4%) of gross revenues collected.
3. BASE RENT INCREASE. Section 4.3 of the Lease is hereby deleted in
its entirety and the following Section 4.3 is substituted in its place: "The
Base Rent set forth in Section 1.8 hereinabove shall be adjusted annually on
each anniversary of the Commencement Date (unless the Commencement Date is other
than the first day of a month, in which event the Base Rent shall be adjusted
annually commencing on the first day of the calendar month following the first
anniversary of the Commencement Date) during the Term of the Lease as follows:
Lease Period in Months Annual Base Rent Monthly Base Rent
---------------------- ---------------- -----------------
Commencement Date - End of $452,867.00 $37,738.92
first twelve months
13-24 $466,453.01 $38,871.08
25-36 $480,446.60 $40,037.22
37-48 $494,860.00 $41,238.33
49-60 $509,705.80 $42,475.48
61-72 $524,996.97 $43,749.75
73-12/31/06 $540,746.88 (annualized) $45,062.24
4. COMPLIANCE WITH LAW. Landlord warrants to Tenant that, to the best
of Landlord's knowledge, the Building, in the state existing on the date this
Lease is executed by Landlord and Tenant, but without regard to alterations or
improvements to be made by Tenant or the use for which Tenant will occupy the
Premises, does not violate any covenants or restrictions of record, or any
applicable building code, regulation or ordinance in effect on such date. To the
extent that the Landlord receives any notice from a governmental entity that the
Building is not in compliance with the Americans with Disabilities Act ("ADA"),
or any similar state or local law, and the Landlord is obligated pursuant to a
final determination to undertake action in order to comply with ADA, then in
such event Landlord agrees to undertake such remedial action at Landlord's sole
cost and expense. To the extent that such notice requires action with regard to
Tenant's particular use of the Premises, Tenant shall be obligated to undertake
such action at Tenant's sole cost and expense.
5. ALTERATIONS AND ADDITIONS. Section 7.3(a) of the Lease is hereby
modified by inserting the following at the end of such Section 7.3(a):
"Notwithstanding anything to the contrary in Section 7.3(a), Landlord will not
unreasonably withhold, condition or delay its consent to any non-structural
Alterations provided that Tenant otherwise complies with the provisions of this
Article 7 and that the same (i) are not visible from the outside of the
Premises, and (ii) do not adversely effect the structural integrity of the
Building or any of the Building systems which are not located within the
Premises and which provide services to other occupants of the Building in
addition to Tenant, including the structural, electrical, plumbing and HVAC
systems. In the event Landlord consents to any such Alterations, the same shall
be performed in accordance with plans and specifications reasonably approved in
writing by Landlord, which approval shall not be deemed to assure compliance
with applicable laws, regulations and codes. Furthermore, Tenant shall have the
right to make cosmetic, non-structural Alterations to the Premises without
obtaining Landlord's prior written consent, but otherwise in accordance with the
provisions of this Article 7, provided that Tenant provides Landlord with
written notice of its intention to make such Alterations together with the plans
and specifications for the same, if applicable. For purposes of this Section 7.3
"cosmetic, non-structural Alterations" shall be deemed to mean paint, carpet,
wallcovering and installation of internal data and telephone communications
systems. Tenant shall not be required to obtain a lien and completion bond in
connection with such cosmetic nonstructural Alterations. For purposes of the
Lease, its shall be deemed reasonable for Landlord to require Tenant to perform
any Alterations during non-business hours if such Alterations will create
unreasonable noise, noxious fumes or otherwise interfere with the quiet
enjoyment of the other tenants in the Building. In addition, Landlord shall have
the right to reasonably approve the vendor who shall perform said Alterations.
In the event such Alterations are required to be performed during non-business
hours, Tenant shall reimburse Landlord for any costs Landlord incurs with
staffing the Building during such non-business hours in connection with such
Alterations. To the extent the Landlord's consent is required pursuant to this
Section 7.3, at the written request of Tenant, Landlord agrees to notify Tenant
concurrently with Landlord's consent of any such Alterations whether Landlord
will require Tenant to remove such Alterations at the end of the Lease Term.
6. HOURS OF SERVICE. Landlord may, from time to time, reasonably
estimate what Tenant's after hours HVAC usage for the Premises shall be and the
same shall be payable by Tenant monthly during the Term on the same day as Base
Rent is due hereunder provided Landlord affords Tenant thirty (30) days notice
of the amount of such estimate. Landlord's estimate of Tenant's after hours HVAC
usage shall be based on Tenant's actual historical after hours HVAC usage.
Landlord shall periodically deliver, or upon Tenant's request, to Tenant
invoices for actual after hours HVAC usage supplied to the Premises. If Tenant's
payments for estimated after hours HVAC exceeds the actual usage, then Tenant
shall receive a credit against the estimated payment for after hours HVAC next
falling due. If Tenant's payments for estimated after hours HVAC were less than
the
Add-2
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actual usage, then Tenant shall pay to Landlord the amount of the deficiency
within thirty (30) days after delivery by Landlord to Tenant of said invoice.
7. INTERRUPTION IN SERVICES. Notwithstanding anything contained in
Section 11 of the Lease to the contrary, if any interruption of utilities or
services shall continue for more than three (3) consecutive business days and
shall render any portion of the Premises unusable for the normal conduct of
Tenant's business, and if Tenant does not in fact use or occupy such portion of
the Premises, then all Base Rent and additional rent payable hereunder with
respect to such portion of the Premises which Tenant does not occupy shall be
abated from and after such third (3rd) business day of such interruption and
such abatement shall continue until full use of such portion of the Premises is
restored to Tenant. Except in the case of emergency, the Landlord will give
Tenant at least two (2) business days' prior notice if Landlord intends to
interrupt any services required to be furnished by the Landlord that may
unreasonably interfere with Tenant's occupancy of the Premises.
8. ASSIGNMENT. "Notwithstanding anything to the contrary contained in
Section 12 of the Lease, provided Tenant is not in default after expiration of
all applicable notice and cure periods at the time of such Transfer, Tenant
shall have the right, without Landlord's consent, upon thirty (30) days advance
written notice to Landlord, to assign the Lease or sublet the whole or any part
of the Premises (i) to any entity or entities which are owned by or under common
control with Tenant, or which owns or is under common control with Tenant, (ii)
in connection with the sale or transfer of substantially all of the assets of
the Tenant or the sale or transfer of substantially all of the outstanding
ownership interests in Tenant, or (iii) in connection with a merger,
consolidation or other corporate reorganization of Tenant (each of the
transactions referenced in the above subparagraphs (i), (ii), and (iii) are
hereinafter referred to as a "Permitted Transfer," and each surviving entity
shall hereinafter be referred to as a "Permitted Transferee"); provided, that
such assignment or sublease is subject to the following conditions:
(i) Tenant shall remain fully liable under the terms of the Lease
provided Tenant is the entity which survives the merger, consolidation or
corporate reorganization;
(ii) such Permitted Transfer shall be subject to all of the terms,
covenants and conditions of the Lease;
(iii) to the extent Tenant does not survive the Permitted Transfer,
such Permitted Transferee has a net worth at least equal to the net worth of
Tenant as of the date of this Lease, and
(iv) such Permitted Transferee shall expressly assume the obligations
of Tenant under the Lease by a document reasonably satisfactory to Landlord.
9. MUTUAL INDEMNITY. Tenant hereby agrees to indemnify, defend and hold
harmless Landlord and its employees, partners, agents, contractors, lenders and
ground lessors (said persons and entities are hereinafter collectively referred
to as the "Landlord Indemnified Parties") from and against any and all
liability, loss, cost, damage, claims, loss of rents, liens, judgments,
penalties, fines, settlement costs, investigation costs, the cost of consultants
and experts, reasonable attorneys' fees, court costs and other reasonable legal
expenses, the effect of environmental contamination, the removal, remediation
and/or abatement of Hazardous Substances (as said term is defined in Section 22
of the Lease) and other expenses (hereinafter collectively referred to as
"Damages") arising out of or related to a "Landlord Indemnified Matter," as
defined below. For purposes of this Paragraph 9, a "Landlord Indemnified Matter"
shall mean any matter for which one or more of the Landlord Indemnified Parties
incurs liability or Damages if the liability or Damages arise out of or involve,
i) Tenant or its employees or agents, (all of said persons or entities are
hereinafter collectively referred to as "Tenant Parties"), negligent use or
occupancy of the Premises or the Project; ii) any negligent act or omission of a
Tenant Party; iii) Tenant's failure to perform any of its obligations under the
Lease; iv) the existence, use or disposal of any Hazardous Substance brought on
to the Project by a Tenant Party; or v) any other matter for which Tenant has
agreed to indemnify Landlord pursuant to any other provision of this Lease.
Landlord hereby agrees to indemnify, defend and hold harmless Tenant and its
shareholders, affiliated entities, employees, partners, agents, contractors and
lenders (said persons and entities are hereinafter collectively referred to as
the "Tenant Indemnified Parties") from and against any and all Damages arising
out of or related to "Tenant Indemnified Matters," as defined below. For
purposes of this Paragraph 9, a "Tenant Indemnified Matter" shall mean any
matter for which one or more of the Tenant Indemnified Parties incurs liability
or Damages if the liability or Damages arise out of or involve, i) Landlord or
its employees or agents (said persons are hereinafter collectively referred to
as "Landlord Parties") negligent use, occupancy or operation of the Project; ii)
any negligent act or omission of a Landlord Party; iii) Landlord's failure to
perform any of its obligations under the Lease or the Work Letter Agreement; iv)
the existence, use or disposal of any Hazardous Substances brought on to the
Project by a Landlord Party; or v) any other matters for which Landlord has
agreed to indemnify Tenant pursuant to any other provisions of this Lease.
Landlord's and Tenant's obligations hereunder shall include, but shall not be
limited to i) compensating the Landlord Indemnified Parties or the Tenant
Indemnified Parties, as the case may be, for damages arising out of Landlord
Indemnified Matters or Tenant Indemnified Matters and ii) providing defense,
with counsel reasonably satisfactory to the indemnified party, at the other
party's sole expense, of any claims, actions or proceedings arising out of or
relating to a Landlord Indemnified Matter or a Tenant Indemnified Matter, as the
case may be, whether or not litigated or
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reduced to judgment and whether or not well founded. The indemnified parties
need not first pay any Damages to be indemnified hereunder. This indemnity is
intended to apply to the fullest extent permitted by applicable law. The
parties' obligations under this Paragraph shall survive the expiration or
termination of the Lease.
10. TENANT IMPROVEMENTS.
a. Tenant shall construct improvements ("Improvements") for
the Premises in accordance with the Work Letter Agreement attached hereto as
Schedule 1. In connection thereto, Landlord hereby grants to Tenant an
"Improvement Allowance" of up to Ten and 00/100 Dollars ($10.00) per rentable
square foot of space in the Premises (i.e., 21,333 rentable square feet
multiplied by $10.00 = $213,330.00), which Improvement Allowance shall be used
only for the items specified in the Cost Breakdown, as that term is defined in
the Work Letter Agreement. In the event the actual cost of the Improvements is
less than the Improvement Allowance, the unused portion of the Improvement
Allowance shall not be paid or refunded to Tenant or be available to Tenant as a
credit against any obligations of Tenant under the Lease.
b. As part of the Improvements, and in accordance with the
provisions of Schedule 1 attached hereto, Tenant shall be permitted to install a
conduit to connect the Building to the building located at 0000 Xxxxxxx Xxxx in
which building Tenant also leases space.
c. Tenant hereby accepts the Premises in its current "as-is"
condition, and Landlord shall have no obligation to construct any tenant
improvements to the Premises on behalf of Tenant.
11. RIGHT OF FIRST OFFER. Provided Tenant is not in default hereunder
beyond any applicable cure periods at the time of Tenant's exercise of the
option described in this Paragraph 11 or at the commencement of the option term,
and subject to all other options held by existing tenants of the Building as of
the date of this Lease, Tenant shall have the right of first offer with respect
to Option Space #1, Option Space #2 or Option Space #3 all as shown on Exhibit
"D" attached hereto (individually and collectively referred to herein as the
"Option Space" hereinafter) that is vacant or becomes vacant in the Building.
Prior to leasing any of the Option Space, Landlord shall give Tenant written
notice of its intent to lease the Option Space. If the Option Space consists of
any combination of Option Space #1, Option Space #2 and Option Space #3, Tenant
may exercise such right as to any one, two or three of the Option Spaces being
offered and therefore is not required to exercise such right as to all the
Option Space offered. Tenant shall have ten (10) business days in which to
provide Landlord with written notice of its election to exercise such right. If
Tenant does not give Landlord written notice of its election to lease such
Option Space within the ten (10) business day period, Landlord shall thereafter
be free to lease such Option Space to a third party on any terms and conditions
that Landlord shall select, with no further obligation to Tenant. In the event
that Landlord offers any space to Tenant pursuant to this right of first offer,
and Tenant elects not to lease the space, the space so offered shall not be
subject to this right of first offer, and thereafter Landlord shall not be
obligated to offer said space to Tenant. In the event Tenant elects to exercise
its Option described in this Paragraph 11 during the first two (2) years of the
initial Term, the Base Rent payable for the Option Space shall be at the same
Base Rent rate in effect for the Premises as of the date the Option Space is
delivered to Tenant and shall escalate at the same time and at the same rate as
the Base Rent for the Premises. The lease term for the Option Space shall be
coterminous with the Lease. All other terms and conditions of the Lease shall
remain the same.
12. OPTION TO RENEW.
a. Subject to the provisions of Section 26 of the Lease, and
provided that Tenant is not in default beyond any applicable cure period at the
time of Tenant's exercise of the Option, Tenant shall have one (1) five (5) year
option to renew this Lease. In the event Tenant exercises the Option pursuant to
this Paragraph 12, Tenant must concurrently exercise its right to renew the
lease by and between Landlord and Tenant dated December 12, 1996, as amended by
that certain Lease Amendment dated September 2, 1997 (the "First Amendment"), as
further amended by that certain Second Lease Amendment dated February 8, 1999
(the "Second Amendment), as further amended by that certain Third Lease
Amendment dated ________________, and as further amended by that certain Fourth
Lease Amendment dated as of the date hereof (the "Fourth Amendment"), and as the
same may hereafter be amended from time to time, for the premises located at
0000 Xxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxx 00000. Tenant shall provide to Landlord
on a date which is prior to the date that the option period would commence (if
exercised) by at least two hundred seventy (270) days and not more than three
hundred sixty five (365) days, a written notice of the exercise of the option to
extend the Lease for the additional option term, time being of the essence. Such
notice shall be given in accordance with Section 40 of the Lease as modified by
Section 26.6 hereof. If notification of the exercise of this Option is not so
given and received, the Option granted under this Paragraph 12 shall
automatically expire. Base Rent applicable to the Premises for the Option Term
shall be equal to the Fair Market Rental, as defined hereinafter. All other
terms and conditions of the Lease shall remain the same.
b. If the Tenant exercises the Option, the Landlord shall
determine the Fair Market Rental by using its good faith judgment. Landlord
shall provide Tenant with written notice of such amount within fifteen
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44
(15) days after Tenant exercises its Option. Tenant shall have fifteen (15) days
("Tenant's Review Period") after receipt of Landlord's notice of the new base
rent within which to accept such rental. In the event Tenant fails to accept in
writing such rental proposal by Landlord, then such proposal shall be deemed
rejected and Landlord and Tenant shall attempt to agree upon such Fair Market
Rental, using their best good faith efforts. If Landlord and Tenant fail to
reach agreement within fifteen (15) days following Tenant's Review Period
("Outside Agreement Date") then the parties shall each within ten (10) days
following the Outside Agreement Date appoint a real estate broker who shall be
licensed in the State of Maryland and who specializes in the field of commercial
office space leasing in the Rockville, Maryland market, has at least ten (10)
years of experience and is recognized within the field as being reputable and
ethical. If one party does not timely appoint a broker, then the broker
appointed by the other party shall promptly appoint a broker for such party.
Such two individuals shall each determine within ten (10) days after their
appointment such base rent. If such individuals do not agree on Fair Market
Rental, then the two individuals shall, within five (5) days, render separate
written reports of their determinations and together appoint a third similarly
qualified individual having the qualifications described above. If the two
brokers are unable to agree upon a third broker, the third broker shall be
appointed by the President of the Xxxxxxxxxx County Board of Realtors. In the
event the Xxxxxxxxxx County Board of Realtors is no longer in existence, the
third broker shall be appointed by the President of its successor organization.
If no successor organization is in existence, the third broker shall be
appointed by the Chief Judge of the Circuit Court of Xxxxxxxxxx County,
Maryland. The third individual shall within ten (10) days after his or her
appointment make a determination of such Fair Market Rental. The third
individual shall determine which of the determinations of the first two
individuals is closest to his own and the determination that is closest shall be
final and binding upon the parties, and such determination may be enforced in
any court of competent jurisdiction. Landlord and Tenant shall each bear the
cost of its broker and shall share equally the cost of the third broker. Upon
determination of the base rent payable pursuant to this Section, the parties
shall promptly execute an amendment to this Lease stating the rent so
determined.
c. The term "Fair Market Rental" shall mean the annual amount
per rentable square foot that a willing, comparable renewal tenant would pay and
a willing, comparable landlord of a similar office building would accept at
arm's length for similar space, giving appropriate consideration to the
following matters: (i) annual rental rates per rentable square foot; (ii) the
type of escalation clauses (including, without limitation, operating expenses,
real estate taxes, and CPI) and the extent of liability under the escalation
clauses (i.e., whether determined on a "net lease" basis or by increases over a
particular base year or base dollar amount); (iii) rent abatement provisions
reflecting free rent and/or no rent during the lease term; (iv) length of lease
term; (v) size and location of premises being leased; and (vi) other generally
applicable terms and conditions of tenancy for similar space; provided, however,
Tenant shall not be entitled to any tenant improvement or refurbishment
allowance. The Fair Market Rental may also designate periodic rental increases,
a new Base Year and similar economic adjustments. The Fair Market Rental shall
be the Fair Market Rental in effect as of the beginning of the Option period,
even though the determination may be made in advance of that date, and the
parties may use recent trends in rental rates in determining the proper Fair
Market Rental as of the beginning of the Option period.
13. SIGNS. Section 46 of the Lease is hereby modified by adding the
following to the end of Section 46: "Landlord and Tenant will cooperatively
develop and implement a signage program for the purpose of providing improved
directional signage to the Premises within the Project. The directional signage
shall be installed by Landlord, at Tenant's sole cost and expense. In the event
of the expiration or earlier termination of the lease between Landlord and the
existing tenant on the second (2nd) floor of the Building, then Tenant shall
have the non-exclusive right, exercisable at any time during the remaining Term
of this Lease, including any renewal period, at its sole cost and expense, but
subject to all applicable codes and regulations and Landlord's signage and
design criteria, and otherwise subject to Landlord's prior approval, to place
signage on the exterior of the Building. The size, design, color, lighting and
installation method of such sign shall be subject to Landlord's approval which
may be given or denied in Landlord's sole discretion. Such exterior Building
signage rights granted to Tenant in this Paragraph 13 are personal to the
original Tenant and any Permitted Transferee under Paragraph 8 hereinabove and
may not be assigned by or to any person or entity other than Tenant or such
Permitted Transferee."
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EXHIBIT A
PREMISES
FLOOR PLAN
A-1
46
EXHIBIT B
VERIFICATION LETTER
VISUAL NETWORKS, INC., a Delaware corporation, ("Tenant") hereby
certifies that it has entered into a lease with T/A WESTERN, LLC, a Delaware
limited liability company ("Landlord") and verifies the following information as
of the _______ day of _______________, 200__:
Number of Rentable Square Feet in Premises: _________________________________
Number of Rentable Square Feet in Building: _________________________________
Commencement Date: _________________________________
Lease Termination Date: _________________________________
Tenant's Share: _________________________________
Initial Base Rent: _________________________________
Billing Address for Tenant: _________________________________
_________________________________
_________________________________
Attention: _________________________________
Telephone Number: _________________________________
Federal Tax I.D. No.: _________________________________
Tenant acknowledges and agrees that all tenant improvements Landlord is
obligated to make to the Premises, if any, have been completed and that Tenant
has accepted possession of the Premises and that as of the date hereof, there
exist no offsets or defenses to the obligations of Tenant under the Lease.
Tenant acknowledges that it has inspected the Premises and found them suitable
for Tenant's intended commercial purposes subject to minor punch list items,
latent defects and any continuing obligation of Landlord under the Lease.
TENANT
VISUAL NETWORKS, INC.,
a Delaware corporation
By: _______________________________________
_______________________________________
(print name)
Its: _______________________________________
(print title)
ACKNOWLEDGED AND AGREED TO:
X-0
00
XXXXXXXX
XX/XXXXXXX, LLC, a Delaware limited liability company
BY: REALTY ASSOCIATES ADVISORS LLC, A DELAWARE
LIMITED LIABILITY COMPANY, MANAGER
BY: REALTY ASSOCIATES ADVISORS TRUST, A
MASSACHUSETTS BUSINESS TRUST, SOLE
MEMBER
BY: ______________________________
[Officer]
B-2
48
EXHIBIT C
RULES AND REGULATIONS
GENERAL RULES
Tenant shall faithfully observe and comply with the following Rules and
Regulations.
1. Tenant shall not alter any locks or install any new or additional locks or
bolts on any doors or windows of the Premises without obtaining Landlord's prior
written consent. Tenant shall bear the cost of any lock changes or repairs
required by Tenant. Keys required by Tenant must be obtained from Landlord at a
reasonable cost to be established by Landlord.
2. All doors opening to public corridors shall be kept closed at all times
except for normal ingress and egress to the Premises. Tenant shall assume any
and all responsibility for protecting the Premises from theft, robbery and
pilferage, which includes keeping doors locked and other means of entry to the
Premises closed.
3. Landlord reserves the right to close and keep locked all entrance and exit
doors of the Project except during the Project's normal hours of business as
defined in Section 11.3 of the Lease. Tenant, its employees and agents must be
sure that the doors to the Project are securely closed and locked when leaving
the Premises if it is after the normal hours of business of the Project. Tenant,
its employees, agents or any other persons entering or leaving the Project at
any time when it is so locked, or any time when it is considered to be after
normal business hours for the Project, may be required to sign the Project
register. Access to the Project may be refused unless the person seeking access
has proper identification or has a previously received authorization for access
to the Project. Landlord and its agents shall in no case be liable for damages
for any error with regard to the admission to or exclusion from the Project of
any person. In case of invasion, mob, riot, public excitement, or other
commotion, Landlord reserves the right to prevent access to the Project during
the continuance thereof by any means it deems appropriate for the safety and
protection of life and property.
4. No furniture, freight or equipment of any kind shall be brought into the
Project without Landlord's prior authorization. All moving activity into or out
of the Project shall be scheduled with Landlord and done only at such time and
in such manner as Landlord designates. Landlord shall have the right to
prescribe the weight, size and position of all safes and other heavy property
brought into the Project and also the times and manner of moving the same in and
out of the Project. Safes and other heavy objects shall, if considered necessary
by Landlord, stand on supports of such thickness as is necessary to properly
distribute the weight, and Tenant shall be solely responsible for the cost of
installing all supports. Landlord will not be responsible for loss of or damage
to any such safe or property in any case. Any damage to any part of the Project,
its contents, occupants or visitors by moving or maintaining any such safe or
other property shall be the sole responsibility and expense of Tenant.
5. The requirements of Tenant will be attended to only upon application at the
management office for the Project or at such office location designated by
Landlord. Tenant shall not ask employees of Landlord to do anything outside
their regular duties without special authorization from Landlord.
6. Tenant shall not disturb, solicit, or canvass any occupant of the Project and
shall cooperate with Landlord and its agents to prevent the same. Tenant, its
employees and agents shall not loiter in or on the entrances, corridors,
sidewalks, lobbies, halls, stairways, elevators, or any Common Areas for the
purpose of smoking tobacco products or for any other purpose, nor in any way
obstruct such areas, and shall use them only as a means of ingress and egress
for the Premises. Smoking shall not be permitted in the Common Areas.
7. The toilet rooms, urinals and wash bowls shall not be used for any purpose
other than that for which they were constructed, and no foreign substance of any
kind whatsoever shall be thrown therein. The expense of any breakage, stoppage
or damage resulting from the violation of this rule shall be borne by the tenant
who, or whose employees or agents, shall have caused it.
8. Except for vending machines intended for the sole use of Tenant's employees
and invitees, no vending machine or machines other than fractional horsepower
office machines, coffee brewing equipment, microwave ovens or refrigerators
shall be installed, maintained or operated upon the Premises without the written
consent of Landlord.
9. Tenant shall not use or keep in or on the Premises or the Project any
kerosene, gasoline or other inflammable or combustible fluid or material. Tenant
shall not bring into or keep within the Premises or the Project any animals,
birds, bicycles or other vehicles.
C-1
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10. Tenant shall not use, keep or permit to be used or kept, any foul or noxious
gas or substance in or on the Premises, or permit or allow the Premises to be
occupied or used in a manner offensive or objectionable to Landlord or other
occupants of the Project by reason of noise, odors, or vibrations, or to
otherwise interfere in any way with the use of the Project by other tenants.
11. No cooking shall be done or permitted on the Premises, nor shall the
Premises be used for the storage of merchandise, for loading or for any
improper, objectionable or immoral purposes. Notwithstanding the foregoing,
Underwriters' Laboratory approved equipment and microwave ovens may be used in
the Premises for heating food and brewing coffee, tea, hot chocolate and similar
beverages for employees and visitors of Tenant, provided that such use is in
accordance with all applicable federal, state and city laws, codes, ordinances,
rules and regulations; and provided further that such cooking does not result in
odors escaping from the Premises.
12. Landlord shall have the right to approve where and how telephone wires are
to be introduced to the Premises. No boring or cutting for wires shall be
allowed without the consent of Landlord. The location of telephone call boxes
and other office equipment affixed to the Premises shall be subject to the
approval of Landlord. Tenant shall not xxxx, drive nails or screws, or drill
into the partitions, woodwork or plaster contained in the Premises or in any way
deface the Premises or any part thereof, other than that reasonably necessary to
hang pictures, paintings and artwork, office name plates, shelving, bulletin
boards, white boards and similar types of items, without Landlord's prior
written consent. Tenant shall not install any radio or television antenna,
satellite dish, loudspeaker or other device on the roof or exterior walls of the
Project. Tenant shall not interfere with broadcasting or reception from or in
the Project or elsewhere.
13. Landlord reserves the right to exclude or expel from the Project any person
who, in the judgment of Landlord, is intoxicated or under the influence of
liquor or drugs, or who shall in any manner do any act in violation of any of
these Rules and Regulations.
14. Tenant shall not waste electricity, water or air conditioning and agrees to
cooperate fully with Landlord to ensure the most effective operation of the
Project's heating and air conditioning system, and shall refrain from attempting
to adjust any controls. Tenant shall not without the prior written consent of
Landlord use any method of heating or air conditioning other than that supplied
by Landlord.
15. Tenant shall store all its trash and garbage within the interior of the
Premises. No material shall be placed in the trash boxes or receptacles if such
material is of such nature that it may not be disposed of in the ordinary and
customary manner of removing and disposing of trash in the vicinity of the
Project without violation of any law or ordinance governing such disposal. All
trash, garbage and refuse disposal shall be made only through entry-ways and
elevators provided for such purposes at such times as Landlord shall designate.
16. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.
17. No awnings or other projection shall be attached to the outside walls or
windows of the Project by Tenant. No curtains, blinds, shades or screens shall
be attached to or hung in any window or door of the Premises without the prior
written consent of Landlord. All electrical ceiling fixtures hung in the
Premises must be fluorescent and/or of a quality, type, design and bulb color
approved by Landlord. Tenant shall abide by Landlord's regulations concerning
the opening and closing of window coverings which are attached to the windows in
the Premises. The skylights, windows, and doors that reflect or admit light and
air into the halls, passageways or other public places in the Project shall not
be covered or obstructed by Tenant, nor shall any bottles, parcels or other
articles be placed on the windowsills.
18. Tenant shall not employ any person or persons other than the janitor of
Landlord for the purpose of cleaning the Premises unless otherwise agreed to in
writing by Landlord. Except with the prior written consent of Landlord, no
person or persons other than those approved by Landlord shall be permitted to
enter the Project for the purpose of cleaning same. Landlord shall in no way be
responsible to Tenant for any loss of property on the Premises, however
occurring, or for any damage done to the effects of Tenant or any of its
employees or other persons by the janitor of Landlord. Janitor service shall
include ordinary dusting and cleaning by the janitor assigned to such work and
shall not include cleaning of carpets or rugs, except normal vacuuming, or
moving of furniture and other special services. Window cleaning shall be done
only by Landlord at reasonable intervals and as Landlord deems necessary.
PARKING RULES
1. Parking areas shall be used only for parking by vehicles no longer than full
size, passenger automobiles herein called "Permitted Size Vehicles".
2. Tenant shall not permit or allow any vehicles that belong to or are
controlled by Tenant or Tenant's employees, suppliers, shippers, customers, or
invitees to be loaded, unloaded, or parked in areas other than
C-2
50
those designated by Landlord for such activities. Users of the parking area will
obey all posted signs and park only in the areas designated for vehicle parking.
3. Parking stickers or identification devices shall be the property of Landlord
and shall be returned to Landlord by the holder thereof upon termination of the
holder's parking privileges. Tenant will pay such replacement charges as is
reasonably established by Landlord for the loss of such devices. Loss or theft
of parking identification stickers or devices from automobiles must be reported
to the parking operator immediately. Any parking identification stickers or
devices reported lost or stolen found on any unauthorized car will be
confiscated and the illegal holder will be subject to prosecution.
4. Landlord reserves the right to relocate all or a part of parking spaces from
floor to floor, within one floor, and/or to reasonably adjacent off site
locations(s), and to allocate them between compact and standard size and tandem
spaces, as long as the same complies with applicable laws, ordinances and
regulations.
5. Unless otherwise instructed, every person using the parking area is required
to park and lock his own vehicle. Landlord will not be responsible for any
damage to vehicles, injury to persons or loss of property, all of which risks
are assumed by the party using the parking area.
6. Validation of visitor parking, if established, will be permissible only by
such method or methods as Landlord may establish at rates determined by
Landlord, in Landlord's sole discretion.
7. The maintenance, washing, waxing or cleaning of vehicles in the parking
structure or Common Areas is prohibited.
8. Tenant shall be responsible for seeing that all of its employees, agents and
invitees comply with the applicable parking rules, regulations, laws and
agreements. Garage managers or attendants are not authorized to make or allow
any exceptions to these Parking Rules and Regulations. Landlord reserves the
right to terminate parking rights for any person or entity that willfully
refuses to comply with these rules and regulations.
9. Every driver is required to park his own car. Where there are tandem spaces,
the first car shall pull all the way to the front of the space leaving room for
a second car to park behind the first car. The driver parking behind the first
car must leave his key with the parking attendant. Failure to do so shall
subject the driver of the second car to a Fifty Dollar ($50.00) fine. Refusal of
the driver to leave his key when parking in a tandem space shall be cause for
termination of the right to park in the parking facilities. The parking
operator, or his employees or agents, shall be authorized to move cars that are
parked in tandem should it be necessary for the operation of the garage. Tenant
agrees that all responsibility for damage to cars or the theft of or from cars
is assumed by the driver, and further agrees that Tenant will hold Landlord
harmless for any such damages or theft.
10. No vehicles shall be parked in the parking garage overnight except on an
occasional basis in connection with Tenant's business operations. The parking
garage shall only be used for daily parking and no vehicle or other property
shall be stored in a parking space.
Subject to the term of the Lease, Landlord reserves the right at any
time to change or rescind any one or more of these Rules and Regulations, or to
make such other and further reasonable Rules and Regulations as in Landlord's
judgment may from time to time be necessary for the management, safety, care and
cleanliness of the Project, and for the preservation of good order therein, as
well as for the convenience of other occupants and tenants therein. Landlord may
waive any one or more of these Rules and Regulations for the benefit of any
particular tenant, but no such waiver by Landlord shall be construed as a waiver
of such Rules and Regulations in favor of any other tenant, nor prevent Landlord
from thereafter enforcing any such Rules or Regulations against any or all
tenants of the Project. Tenant shall be deemed to have read these Rules and
Regulations and to have agreed to abide by them as a condition of its occupancy
of the Premises.
C-3
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EXHIBIT D
OPTION SPACE
Sch-1D-1
52
SCHEDULE 1
WORK LETTER AGREEMENT
1. Plans.
Tenant shall cause its architects and engineers to prepare and submit
to Landlord for approval detailed plans, specifications and working drawings
("Plans") for the construction of Tenant's leasehold improvements
("Improvements") to the Premises. Landlord reserves the right to approve any
space planner, architect or engineer employed by Tenant. Tenant's Plans shall
include items and information as Landlord shall reasonably require to evaluate
Tenant's work. Tenant shall use the Plans to obtain all permits and approvals
which are necessary to construct the Improvements. All Improvements shall be
constructed in a good and workmanlike manner and in accordance with all
applicable laws, codes and regulations, including the Americans with
Disabilities Act ("ADA"). It is expressly agreed that (a) Tenant shall not
commence any such work until said Plans have been approved by Landlord, and (b)
the Plans which have been so approved by Landlord shall be used by Tenant to
obtain all permits that are necessary to construct the Improvements. As used
herein, the term "Improvements" shall include all work to be done in the
Premises pursuant to the Plans, including, but not limited to: demolition work,
partitioning, doors, ceiling, floor coverings, wall finishes (including paint
and wallcoverings), window coverings, electrical (excluding the cost of computer
cabling, Tenant's telephone system and wiring, and any other special electrical
or wiring dedicated to Tenant's operations or business), plumbing, heating,
ventilating and air conditioning, fire protection, cabinets and other millwork.
After approval of the Plans by Landlord, no further changes to the Plan shall be
made without the prior written approval of Landlord. Tenant acknowledges that
Landlord's review and approval of the Plans is not conducted for the purpose of
determining the accuracy and completeness of the Plans, their compliance with
applicable codes and governmental regulations including ADA, or their
sufficiency for purposes of obtaining a building permit, all of which shall
remain the responsibility of Tenant and Tenant's architect. Accordingly,
Landlord shall not be responsible for any delays in obtaining the building
permit due to the insufficiency of the Plans or any delays due to changes in the
Plans required by the applicable governmental regulatory agencies reviewing the
Plans.
2. Improvement Allowance.
Tenant shall provide Landlord with a breakdown of the estimated total
cost of the Improvements ("Cost Breakdown"). Landlord hereby grants to Tenant an
"Improvement Allowance" of up to Ten and 00/100 Dollars ($10.00) per rentable
square foot of space in the Premises (i.e., 21,333 rentable square feet
multiplied by $10.00 = $213,330.00). The Improvement Allowance shall be
disbursed to Tenant not more frequently than once per month based on
disbursement requests submitted by Tenant to Landlord and certified by Tenant's
architect. Such disbursement request shall set forth the total amount incurred,
expended and/or due for each requested item less prior disbursements and a
description of the work performed, and materials supplied and/or costs incurred
or due with respect to each item for which disbursement is requested. Each such
disbursement request shall be accompanied by invoices, vouchers, statements,
affidavits, payroll records and/or other documents reasonably requested by
Landlord, which substantiate costs incurred to justify such a disbursement,
together with lien waivers for those contractors and materialmen providing
construction services or materials. In addition, each disbursement shall be
subject to inspection and approval of completed work by Landlord's construction
engineer. In the event the Cost Breakdown exceeds the Improvement Allowance,
Tenant shall pay from another source of funds the amount by which the Cost
Breakdown exceeds the Improvement Allowance prior to any disbursement of the
Improvement Allowance by Landlord. If, at any time during the construction of
the Improvements, the total amount remaining to be paid for construction of the
Improvements exceeds the amount of the Improvement Allowance remaining to be
disbursed, at Landlord's option, no further disbursement of the Improvement
Allowance shall be made by Landlord unless, and until Tenant has expended such
sums as to cause the Improvement Allowance to again be sufficient to pay the
remaining costs. In the event the actual cost of the Improvements is less than
the Improvement Allowance, the unused portion of the Improvement Allowance shall
not be paid or refunded to Tenant or be available to Tenant as a credit against
any obligations of Tenant under the Lease.
3. Construction of Improvements.
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3.1 Tenant shall obtain Landlord's approval of Tenant's contractor.
Additionally, Tenant shall submit a copy of the proposed construction contract
to Landlord for Landlord's approval. Landlord's approval, when required in this
Work Letter Agreement, shall be given or denied (as applicable) within ten (10)
business days of receipt of the necessary information from Tenant. Tenant's
contractors and subcontractors shall be required to provide the following types
of insurance, in the minimum amounts indicated, naming Landlord (and Landlord's
mortgagee, if required by Landlord) as additional insured:
(a) Workmen's Compensation with full statutory limits for
employer's liability.
(b) Commercial General Liability Insurance including direct and
contingent liability in the aggregate amount of One Million
and No/100 Dollars ($1,000,000.00) combined single limit
coverage per occurrence for personal injury, death or property
damage.
(c) The Liability Policy shall include coverage for Broad Form
Hold Harmless Agreement as is contained in the standard
contract.
(d) Automobile Liability insurance with bodily injury limits of
$250,000 per person, $500,000 per accident, and $50,000 per
accident for Property Damage.
Original policies or copies of all of the foregoing insurance shall be delivered
to Landlord before construction of the Improvements is started and before
Tenant's contractor's equipment is placed upon the Premises. In all other
respects, the insurance coverage above mentioned shall comply with the Lease
provisions.
3.2 It is agreed that Tenant assumes the entire responsibility and
liability due to its negligence, including statutory or common law, for any and
all injuries or death of any or all persons, including its contractor,
subcontractors and employees, and for any and all damages to property caused by
or resulting from or arising out of any act or omission on the part of Tenant,
its contractor, subcontractors or employees, in the prosecution of the work
thereunder. With respect to such work Tenant agrees to indemnify and save
harmless Landlord, its mortgagee, architect, engineers and their employees and
all other tenants of the Property from and against all losses and expense,
including legal fees, which they may suffer or pay as the result of claims or
lawsuits due to, because of or arising out of any and all such injuries, death
or damage, whether real or alleged, and Tenant, its contractor and
subcontractors shall assume and defend at their own expense all such claims or
lawsuits. Tenant agrees to insure this assumed liability in its Comprehensive
General Liability Policy and the original or copy of the policy delivered to
Landlord shall indicate this contractual coverage.
3.3 For and during the period of construction, Tenant shall provide and
pay for all utilities consumed upon the Premises during said period and for the
removal of all temporary connections.
3.4 Upon completion of the Improvements, Tenant's contractors and/or
subcontractors shall provide Landlord, without cost to Landlord, with one (1)
set of transparent "as built" drawings.
3.5 Completion. Tenant shall endeavor to cause the contractor to
substantially complete construction of the Improvements in a diligent manner. It
shall be the sole responsibility of Tenant to file all drawings and
specifications, pay all fees and obtain all permits and applications from any
governmental authorities having jurisdiction, and to obtain any certificates or
approvals, including a certificate of occupancy, required to enable Tenant to
occupy the Premises. Landlord shall not be liable for any loss or damages as a
result of delays in construction of the Premises. No delay in completion of
construction of the Improvements shall delay the Commencement Date of the Lease
beyond the date specified in the Lease.
3.6 Construction Supervisory Fee. The cost of the Improvements shall
include a construction supervisory fee equal to one percent (1%) of the total
cost of the Improvements payable to Landlord for the supervision of the
construction of the Improvements.
4. Incorporation. This Agreement is and shall be incorporated by reference in
the Lease, and all of the terms
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and conditions of the Lease are and shall be incorporated herein by this
reference.
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