SECOND AMENDMENT TO LEASE
This Second Amendment (the "Amendment") is made and entered into as of
the 6th day of March, 1997, by and between Burlington Associates General
Partnership, an Illinois General Partnership ("Landlord") by its agent,
Equity Office Holdings, L.L.C., a Delaware limited liability company, and
Network Express, Inc., a Michigan corporation ("Tenant") and Cabletron
Systems, Inc., a Delaware Corporation ("Guarantor").
WITNESSETH
A. WHEREAS, Landlord and Tenant are parties to that certain lease dated
the 20th day of May, 1996, as amended by First Amendment dated November 18, 1996
(collectively, the "Lease") currently containing approximately 21,469 square
feet, consisting of 2,425 square feet on the 1st floor (office #112), 12,714
square feet on the 2nd floor and 6,330 square feet on the third floor (the
"Premises") of the building located at 305 E. Eisenhower Parkway, Ann Arbor, MI
48108 and commonly known as Building III at Burlington Office Center (the
"Building"); and
B. WHEREAS, Guarantor has purchased all of or a controlling interest in
Tenant; and
C. WHEREAS, Tenant and Guarantor have requested, in consideration for
Guarantor's agreement to guaranty Tenant's obligations under the Lease pursuant
to the terms and conditions of the Guaranty of Lease attached to and made a part
of this Amendment, that the Lease be amended to delete the requirement that the
Tenant thereunder maintain a Security Deposit; and
D. WHEREAS, Landlord has agreed to amend the lease in such a manner, all
upon the terms and conditions contained in this Amendment.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, Landlord, Tenant and Guarantor
agree as follows:
1. GUARANTY. Simultaneous with its execution of this Amendment,
Guarantor agrees to execute and be bound by the terms of that certain Guaranty
of Lease attached hereto and made a part hereof.
2. SECURITY DEPOSIT. In consideration for Guarantor's agreement
to guaranty Tenant's obligations under the Lease, Section VI of the Lease
(Security Deposit) and Exhibit F of the Lease (Sample Letter of Credit) are
hereby deleted from the Lease in their entirety, it being agreed that Tenant
shall be under no obligation to maintain a Security Deposit. Landlord, Tenant
and Guarantor acknowledge that Landlord is unable to locate the letter of credit
that was intended to serve as a Security Deposit under the Lease due to either
Tenant's failure to provide Landlord with the letter of credit or Landlord's
misplacement of the letter of credit after initially being furnished by Tenant.
Regardless of the cause, Landlord hereby waives any interest in such letter of
credit, including any right to draw against such letter of credit in connection
with a default by Tenant under the Lease. In addition, Landlord agrees to
promptly execute any and all documents as are reasonably required by the issuer
of the letter of credit to cancel such letter of credit and render the same null
and void and of no further force and effect.
III. MISCELLANEOUS.
A. This Amendment sets forth the entire agreement between the
parties with respect to the matters set forth herein. There have been no
additional oral or written representations or agreements.
B. Except as herein modified or amended, the provisions, conditions
and terms of the Lease shall remain unchanged and in full force and effect.
C. In the case of any inconsistency between the provisions of the
Lease and this Amendment, the provisions of this Amendment shall govern and
control.
D. Submission of this Amendment by Landlord is not an offer to
enter into this Amendment but rather is a solicitation for such an offer by
Tenant. Landlord shall not be bound by this Amendment until Landlord has
executed and delivered the same to Tenant.
E. The capitalized terms used in this Amendment shall have the same
definitions as set forth in the Lease to the extent that such capitalized terms
are defined therein and not redefined in this Amendment.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment in
multiple original counterparts as of the day and year first above written.
WITNESS/ATTEST:
LANDLORD: BURLINGTON ASSOCIATES GENERAL
PARTNERSHIP, an Illinois General
Partnership
BY: EQUITY OFFICE HOLDINGS, L.L.C., a
Delaware limited liability company, as
agent
- ----------------------------------
Name (print): Angel Rivera By:
- ---------------------------------- --------------------------------------
Name: Eric Marx
- --------------------------------- ------------------------------------
Title: Vice-President, Asset Management
Name (print): -----------------------------------
-------------------- Date: 3/6/97
-----------------------------------
WITNESS/ATTEST:
TENANT: NETWORK EXPRESS, INC., a
Michigan corporation
- ---------------------------------
Name(print): Shawn L. Benoit By:
--------------------- -------------------------------------
Name: John R. Ternes
- --------------------------------- ------------------------------------
Name(print): Karen Coch Title: Controller
--------------------- ------------------------------------
Date: 3/6/97
------------------------------------
WITNESS/ATTEST:
GUARANTOR: CABLETRON SYSTEMS, INC., a
Delaware Corporation
- ---------------------------------
Name(print): Shawn L. Benoit By: David Kirkpatrick
-------------------- -------------------------------------
- --------------------------------- Name:
-----------------------------------
Name(print): Karen Coch Title: CFO
-------------------- -----------------------------------
Date: 3/6/97
-----------------------------------
2
GUARANTY OF LEASE DATED MAY 20, 1996 BETWEEN
BURLINGTON ASSOCIATES GENERAL PARTNERSHIP,
AN ILLINOIS GENERAL PARTNERSHIP ("LANDLORD") AND
NETWORK EXPRESS, INC., A MICHIGAN CORPORATION ('TENANT')
This Guaranty is entered into with respect to that certain lease dated
the 20th day of May, 1996, as amended by First Amendment dated November 18, 1996
and a Second Amendment to be executed simultaneously herewith (collectively, the
"Lease") by and between Burlington Associates General Partnership, an Illinois
General Partnership ("Landlord") and Network Express, Inc., a Michigan
corporation ("Tenant"), which Lease currently contains approximately 21,469
square feet, consisting of 2,425 square feet on the 1st floor (office #112),
12,714 square feet on the 2nd floor and 6,330 square feet on the third floor of
the building located at 305 E. Eisenhower Parkway, Ann Arbor, MI 48108 and
commonly known as Building III at Burlington Office Center. For value received
and in consideration for and as an inducement to Landlord to enter into the
Second Amendment to the Lease, the undersigned, CABLETRON SYSTEMS, INC., a
Delaware Corporation, does hereby unconditionally and irrevocably guarantee to
Landlord the punctual payment of all Rent, (as such term is defined in the
Lease) payable by Tenant under the Lease throughout the term of the Lease and
any and all renewals and extensions thereof in accordance with and subject to
the provisions of the Lease, and the full performance and observance of all
other terms, covenants, conditions and agreements therein provided to be
performed and observed by Tenant under the terms of the Lease, for which the
undersigned shall be jointly and severally liable with Tenant. If any default
on the part of Tenant shall occur under the Lease, the undersigned does hereby
covenant and agree to pay to Landlord in each and every instance such sum or
sums of money and to perform each and every covenant, condition and agreement
under the Lease as Tenant is and shall become liable for or obligated to pay or
perform under the Lease, together with the costs reasonably incurred by Landlord
in connection therewith, including without limitation reasonable attorneys'
fees. Such payments of Rent and other sums shall be made monthly or at such
other intervals as the same shall or may become payable under the Lease,
including any accelerations thereof, all without requiring any notice from
Landlord (other than any notice required by the Lease) of such non-payment or
non performance, all of which the undersigned hereby expressly waives.
The maintenance of any action or proceeding by Landlord to recover any
sum or sums that may be or become due under the Lease and to secure the
performance of any of the other terms, covenants and conditions of the Lease
shall not preclude Landlord from thereafter instituting and maintaining
subsequent actions or proceedings for any subsequent default or defaults of
Tenant under the Lease. The undersigned does hereby consent that without
affecting the liability of the undersigned under this Guaranty and without
notice to the undersigned, time may be given by Landlord to Tenant for payment
of Rent and such other sums and performance of said other terms, covenants and
conditions, or any of them, and such time extended and indulgence granted, from
time to time, or Tenant may be dispossessed or Landlord may avail itself of or
exercise any or all of the rights and remedies against Tenant provided by law or
by the Lease, and may proceed either against Tenant alone or jointly against
Tenant and the undersigned or against the undersigned alone without first
prosecuting or exhausting any remedy or claim against Tenant. The undersigned
does hereby further consent to any subsequent change, modification or amendment
of the Lease in any of its terms, covenants or conditions, or in the Rent
payable thereunder, or in the premises demised thereby, or in the term thereof,
and to any assignment or assignments of the Lease, and to any subletting or
sublettings of the premises demised by the Lease, and to any renewals or
extensions thereof, all of which may be made without notice to or consent of the
undersigned and without in any manner releasing or relieving the undersigned
from liability under this Guaranty.
The undersigned does hereby agree that the bankruptcy of Tenant shall
have no effect on the obligations of the undersigned hereunder. The undersigned
does hereby further agree that in respect of any payments made by the
undersigned hereunder, the undersigned shall not have any rights based on
suretyship, subrogation or otherwise to stand in the place of Landlord so as to
compete with Landlord as a creditor of Tenant, unless and until all claims of
Landlord under the Lease shall have been fully paid and satisfied.
Neither this Guaranty nor any of the provisions hereof can be modified,
waived or terminated, except by a written instrument signed by Landlord. The
provisions of this Guaranty
shall apply to, bind and inure to the benefit of the undersigned and Landlord
and their respective heirs, legal representatives, successors and assigns. The
undersigned, if there be more than one, shall be jointly and severally liable
hereunder, and for purposes of such several liability the word "undersigned"
wherever used herein shall be construed to refer to each of the undersigned
parties separately, all in the same manner and with the same effect as if each
of them had signed separate instruments, and this Guaranty shall not be revoked
or impaired as to any of such parties by the death or another party or by
revocation or release of any obligations hereunder of any other party. This
Guaranty shall be governed by and construed in accordance with the internal laws
of the state where the premises demised by the Lease are located. For the
purpose solely of litigating any dispute under this Guaranty, the undersigned
submits to the jurisdiction of the courts of said state.
IN WITNESS WHEREOF, the undersigned has executed this Guaranty as of
the _____ day of ____________________, 1997.
WITNESS/ATTEST:
GUARANTOR: CABLETRON SYSTEMS, INC., a
Delaware Corporation
_________________________________
Name(print):_____________________ By:_____________________________________
_________________________________ Name:___________________________________
Name(print):_____________________ Title:__________________________________
Date:___________________________________
STATE OF )
COUNTY OF )ss:
On this the _____ day of ________, 1997, before me a Notary Public
duly authorized in and for the said County in the State aforesaid to take
acknowledgments personally appeared _____________________________ known to me to
be ____________ President of _________________________, the Guarantor under the
foregoing instrument, and acknowledged that as such officer, being authorized so
to do, (s)he executed the foregoing instrument on behalf of said corporation by
subscribing the name of such corporation by himself/herself as such officer and
caused the corporate seal of said corporation to be affixed thereto, as a free
and voluntary act, and as the free and voluntary act of said corporation, for
the uses and purposes therein set forth.
IN WITNESS WHEREOF, I hereunto set my hand and official seal as of the
date set forth above.
___________________________________
Notary Public
My Commission Expires: ____________________________
BURLINGTON OFFICE CENTER - BUILDING III
STANDARD FORM OFFICE LEASE
BETWEEN
BURLINGTON ASSOCIATES GENERAL PARTNERSHIP ("LANDLORD") by its agent,
Equity Office Holdings, L.L.C., a Delaware limited liability company
AND
NETWORK EXPRESS, INC., a Michigan corporation ("TENANT").
TABLE OF CONTENTS
I. Basic Lease Information; Definitions. . . . . . . . . . 1
II. Lease Grant . . . . . . . . . . . . . . . . . . . . . . 2
III. Possession. . . . . . . . . . . . . . . . . . . . . . . 2
IV. Use . . . . . . . . . . . . . . . . . . . . . . . . . . 3
V. Rent. . . . . . . . . . . . . . . . . . . . . . . . . . 4
VI. Security Deposit. . . . . . . . . . . . . . . . . . . . 7
VII. Services to be Furnished by Landlord. . . . . . . . . . 8
VIII. Leasehold Improvements. . . . . . . . . . . . . . . . . 9
IX. Repairs and Alterations by Tenant . . . . . . . . . . . 9
X. Use of Electrical Services by Tenant. . . . . . . . . . 10
XI. Entry by Landlord . . . . . . . . . . . . . . . . . . . 11
XII. Assignment and Subletting . . . . . . . . . . . . . . . 11
XIII. Liens . . . . . . . . . . . . . . . . . . . . . . . . . 12
XIV. Indemnity and Waiver of Claims. . . . . . . . . . . . . 12
XV. Insurance . . . . . . . . . . . . . . . . . . . . . . . 12
XVI. Subrogation . . . . . . . . . . . . . . . . . . . . . . 13
XVII. Casualty Damage . . . . . . . . . . . . . . . . . . . . 13
XVIII. Demolition. . . . . . . . . . . . . . . . . . . . . . . 14
XIX. Condemnation. . . . . . . . . . . . . . . . . . . . . . 14
XX. Events of Default . . . . . . . . . . . . . . . . . . . 15
XXI. Remedies. . . . . . . . . . . . . . . . . . . . . . . . 15
XXII. LIMITATION OF LIABILITY . . . . . . . . . . . . . . . . 16
XXIII. No Waiver . . . . . . . . . . . . . . . . . . . . . . . 17
XXIV. Relocation. . . . . . . . . . . . . . . . . . . . . . . 17
XXV. Holding Over. . . . . . . . . . . . . . . . . . . . . . 17
XXVI. Subordination to Mortgages; Estoppel Certificate. . . . 17
XXVII. Notice. . . . . . . . . . . . . . . . . . . . . . . . . 18
XXVIII. Landlord's Lien . . . . . . . . . . . . . . . . . . . . 18
XXIX. Excepted Rights . . . . . . . . . . . . . . . . . . . . 18
XXX. Surrender of Premises . . . . . . . . . . . . . . . . . 18
XXXI. Miscellaneous . . . . . . . . . . . . . . . . . . . . . 19
XXXII. Entire Agreement. . . . . . . . . . . . . . . . . . . . 20
EXHIBIT A-1 - Outline and Location of Premises on 1st floor
EXHIBIT A-2 - Outline and Location of Premises on 2nd floor
EXHIBIT A-3 - Outline and Location of Premises on 3rd floor
EXHIBIT B - Cleaning Specifications
EXHIBIT C - Building Rules and Regulations
EXHIBIT D - Additional Terms and Conditions
EXHIBIT E - Commencement Letter Agreement
EXHIBIT F - Form of Letter of Credit
EXHIBIT G - Form of Subordination, Non-disturbance and Attornment Agreement
i
OFFICE LEASE AGREEMENT
This Office Lease Agreement (the "Lease") is made and entered into as of the
20th day of May, 1996 by and between Burlington Associates General Partnership,
an Illinois General Partnership ("Landlord") by its agent, Equity Office
Holdings, L.L.C., a Delaware limited liability company, and Network Express,
Inc., a Michigan corporation ("Tenant"), whose address for the purpose of
notices to Tenant prior to commencement of the Term of this Lease shall be at
4251 Plymouth Road, Ann Arbor, MI 48105, Attn: Vice President, Finance.
I. BASIC LEASE INFORMATION; DEFINITIONS.
A. The following is some of the basic lease information and defined
terms used in this Lease.
1. "Additional Base Rental" shall mean Tenant's Pro Rata
Share of Basic Costs and any other sums (exclusive of Base Rental)
that are required to be paid by Tenant to Landlord hereunder.
Additional Base Rental and Base Rental sometimes collectively are
referred to herein as "Rent".
2. "Base Rental" shall mean the sum of one million two
hundred seventy-seven thousand eight hundred thirty-nine and 68/100
dollars ($1,277,839.68), payable by Tenant to Landlord in
forty-eight (48) monthly installments as follows:
a. twenty-four (24) equal installments of twenty-six thousand
two hundred forty-five and 22/100 dollars ($26,245.22), each
payable on or before the first day of each month during the
period beginning on the Commencement Date and ending on the day
prior to the second (2nd) anniversary of the Commencement Date.
b. twenty-four (24) equal installments of twenty-six thousand
nine hundred ninety-eight and 10/100 dollars ($26,998.10), each
payable on or before the first day of each month during the
period beginning on the second (2nd) anniversary of the
Commencement Date and ending on the day prior to the fourth
(4th) anniversary of the Commencement Date.
3. "Base Year" shall mean the 1996 calendar year.
4. "Building" shall mean the office building located at 305
E. Eisenhower Parkway, Ann Arbor, MI 48108 and commonly known as
Building III at Burlington Office Center.
5. The "Lease Term" shall mean a period of four (4) years
commencing on the earlier to occur of (i) sixty (60) days after
Tenant is issued a building permit to perform the Initial
Alterations (hereinafter defined), or (ii) August 1, 1996 (the
earlier of such dates being referred to as the "Commencement Date")
and, unless sooner terminated as provided herein, ending on the day
prior to the fourth (4th) anniversary of the Commencement Date (the
"Termination Date"). For example, if the Commencement Date is July
1, 1996, the Termination Date will be June 30, 2000. Promptly after
the determination of the Commencement Date by Landlord, Landlord
shall prepare a letter agreement (the "Commencement Letter") on the
form attached hereto as Exhibit E setting forth the Commencement
Date, the Termination Date and any other dates that are affected by
the adjustment of the Commencement Date. Tenant, within ten (10)
days after receipt thereof from Landlord, shall execute the
Commencement Letter and return the same to Landlord.
6. Intentionally Omitted.
7. "Notice Addresses" shall mean the Premises for Tenant
after the commencement of the Term of this Lease, and, for
Landlord, shall mean: Ann Arbor Associates, 315 E. Eisenhower
Parkway, Suite 220, Ann Arbor, MI 48108, with a copy to Equity
Office Properties, L.L.C., Two North Riverside Plaza, Suite 2200,
Chicago, Illinois 60606, Attention: General Counsel.
1
8. "Permitted Use" shall mean: General office use and
research and development. In addition, with respect to the 2,425
square foot portion of the Premises located on the first floor, the
Permitted Use shall include the assembly and repair of computer
equipment for third parties. A minor amount of assembly and repair
of Tenant owned computer equipment shall also be permitted in other
portions of the Premises outside of the first floor space.
Notwithstanding the foregoing or anything in this Lease to the
contrary, the first floor space shall be designed in such a manner
that the unique use of the first floor space will not be apparent
from outside the Building or any of the Common Areas on the first
floor of the Building. Landlord shall be deemed to be acting
reasonably in withholding its consent to any plans and
specifications for the first floor space that fails to accomplish
such purpose. Landlord's approval of the final plans, however,
shall also constitute Landlord's approval of Tenant's design of the
first floor space.
9. "Premises" shall mean the area located on the 1st, 2nd and
3rd floors of the Building and outlined on Exhibits A-1, A-2 and
A-3 attached hereto and incorporated herein. Landlord and Tenant
hereby stipulate and agree that the square footage of the Premises
shall mean 18,069 square feet, consisting of 2,425 square feet on
the 1st floor (office #112), 12,714 square feet on the 2nd floor
and 2,930 square feet on the third floor. The square footage of
the Building" shall mean approximately 34,456 square feet.
10. Intentionally Omitted.
11. "Tenant's Pro Rata Share" shall mean fifty-two and
forty-four one hundredths percent (52.44%), which is the quotient
(expressed as a percentage) derived by dividing the Rentable Area
of the Premises by the Rentable Area of the Building.
B. The following are additional definitions of some of the defined
terms used in the Lease: (1) "Common Areas" shall mean those areas provided by
Landlord within the Building for the common use or benefit of all tenants
generally and/or the public; (2) "Owner" shall mean the entity(ies), from time
to time, which own the Property or any portion thereof; (3) "Prime Rate" shall
mean the per annum interest rate publicly announced by The First National Bank
of Chicago or any successor thereof from time to time (whether or not charged in
each instance) as its prime or base rate in Chicago, Illinois; and (4)
"Property" shall mean the Building and the parcel of land on which it is located
and all other improvements serving the Building and the tenants thereof and the
parcel(s) of land on which they are located.
II. LEASE GRANT.
Subject to and upon the terms herein set forth, Landlord leases to Tenant
and Tenant leases from Landlord the Premises. In addition, Tenant shall have
the right to use the Common Areas of the Building (including, without
limitation, the parking areas on the Property and ingress and egress thereto) in
common with the other tenants and occupants of the Building. Tenant, in common
with the other tenants of Burlington Office Center, shall also be entitled to
use the walkways, picnic tables and other outdoor amenities at Burlington Office
Center so long as either (i) the Building and the buildings commonly known as
Building I and Building II at Burlington Office Center are owned by the same
party, or (ii) reciprocal easement agreements are in place to permit such use.
III. POSSESSION.
A. Upon the full and final execution of this Lease by Landlord and
Tenant, Tenant shall have the right to occupy the Premises for the performance
of the Initial Alterations (as defined in Exhibit D). Notwithstanding the
foregoing, Tenant and its contractors shall not have the right to perform
Initial Alterations in the Premises unless and until Tenant has complied with
all of the terms and conditions of Article IX.B. of this Lease, including,
without limitation, approval by Landlord of the final plans for the Initial
Alterations and the contractors to be retained by Tenant to perform such Initial
Alterations. Landlord agrees to act reasonably in connection with its approval
of Tenant's plans and specifications for the Initial Alterations and in its
approval of any contractor proposed by Tenant, provided that in no event shall
Landlord be required to grant its approval to any contractor that is not
licensed, is not capable of being bonded for the amount of the Initial
2
Alterations or does not maintain insurance of the types and amounts required by
this Lease. Tenant's occupancy of the Premises for the period prior to the
Commencement Date shall be subject to all of the terms and conditions of the
Lease, provided that, with the exception of electricity charges and charges for
special services requested by Tenant, Tenant shall not be required to pay Base
Rental or Additional Base Rental with respect to the period of time prior to the
Commencement Date. Notwithstanding the foregoing, if Tenant begins to conduct
its business in the Premises prior to the Commencement Date, Tenant shall pay
Base Rental to Landlord for the period beginning on the date Tenant first begins
to conduct its business and ending on the day prior to the Commencement Date at
the rate of twenty-six thousand two hundred forty-five and 22/100 dollars
($26,245.22), pro rated for any partial months.
B. Tenant hereby accepts the Premises in its as-is condition and
configuration, with no representation or warranty by Landlord as to the
condition of the Premises or suitability thereof for Tenant's use. Landlord
hereby represents that the Building is zoned to permit general office use. In
addition, Landlord, to the best of its knowledge, hereby represents that as of
the date hereof the Building is in good condition and in compliance with all
applicable building codes. In the event it is discovered that the Building is
not in compliance with certain building codes as of the date hereof, Landlord,
at its sole cost and expense, shall be responsible for correcting such
violations.
C. Notwithstanding anything to the contrary contained in the Lease,
Landlord shall not be obligated to tender possession of any portion of the
Premises or other space leased by Tenant from time to time hereunder that, on
the date possession is to be delivered, is occupied by a tenant or other
occupant or that is subject to the rights of any other tenant or occupant, nor
shall Landlord have any other obligations to Tenant under this Lease with
respect to such space until the date Landlord: (1) recaptures such space from
such existing tenant or occupant; and (2) regains the legal right to possession
thereof. This Lease shall not be affected by any such failure to deliver
possession and Tenant shall have no claim for damages against Landlord as a
result thereof, all of which are hereby waived and released by Tenant.
Notwithstanding the foregoing, if Landlord is unable to provide Tenant with
possession of the Premises on or before seven (7) days after the full and final
execution and delivery of this Lease, Tenant, as its sole remedy, shall be
entitled to terminate this Lease by providing written notice of termination to
Landlord on or before the date on which Landlord provides Tenant with possession
of the Premises.
IV. USE.
The Premises shall be used for the Permitted Use and for no other
purpose. Tenant agrees not to use or permit the use of the Premises for any
purpose which is illegal, dangerous or which, in Landlord's opinion, creates a
nuisance or which would increase the cost of insurance coverage with respect to
the Building. Tenant shall conduct its business and control its agents,
servants, contractors, employees, customers, licensees, and invitees
(collectively, the "Tenant Related Parties") in such a manner as not to
unreasonably interfere with, annoy or disturb other tenants, or in any way
unreasonably interfere with Landlord in the management and operation of the
Building, provided that, while such parties are outside of the Premises, Tenant
shall only be required to use good faith efforts to cause its agents,
contractors, customers, licensees and invitees to comply with the terms of this
sentence. Tenant will maintain the Premises in a clean and healthful condition,
and comply with all laws, ordinances, orders, rules and regulations of any
governmental entity with reference to the operation of Tenant's business and to
the use, condition, configuration or occupancy of the Premises, including
without limitation, the Americans with Disabilities Act (collectively referred
to as "Laws"). Tenant, within ten (10) days after receipt thereof, shall provide
Landlord with copies of any written notices it receives with respect to a
violation or alleged violation of any Laws. Landlord, within ten (10) days
after receipt thereof, shall provide Tenant with copies of any written notices
it receives with respect to a violation or alleged violation of any Laws with
regard to the condition of the Premises. Tenant will comply with the rules and
regulations of the Building attached hereto as Exhibit C and such other
reasonable rules and regulations adopted and altered by Landlord from time to
time and of which Tenant has received prior written notice. Tenant will also
cause all Tenant Related Parties to comply with the rules and regulations,
provided that, while such parties are outside of the Premises, Tenant shall only
be required to use good faith efforts to cause its agents, contractors,
customers, licensees and invitees to comply with the rules and regulations.
Landlord shall make reasonable efforts to enforce all such rules and regulations
in a non-discriminatory and uniform manner.
3
V. RENT.
A. During each calendar year (excluding the Base Year), or portion
thereof, falling within the Lease Term, Tenant shall pay to Landlord as
Additional Base Rental hereunder Tenant's Pro Rata Share of the amount, if any,
by which Basic Costs for the applicable calendar year exceed the Basic Costs for
the Base Year (the "Excess"). In the event that Basic Costs in any calendar year
decrease below the amount of Basic Costs for the Base Year, Tenant's Pro Rata
Share of Basic Costs for such calendar year shall be deemed to be $0, it being
understood that Tenant shall not be entitled to any credit or offset if Basic
Costs decrease below the corresponding amount for the Base Year. Prior to
January 1, 1997 and prior to January 1 of each subsequent calendar year during
the Lease Term, or as soon thereafter as practical, Landlord shall make a good
faith estimate of the Excess for the applicable calendar year. On or before the
first day of each month during such calendar year, Tenant shall pay to Landlord,
as Additional Base Rental, a monthly installment equal to one-twelfth of
Tenant's Pro Rata Share of Landlord's estimate of the Excess. Landlord shall
have the right from time to time during any such calendar year to revise the
estimate of the Excess for such year and provide Tenant with a revised statement
therefor, and thereafter the amount Tenant shall pay each month shall be based
upon such revised estimate. If Landlord does not provide Tenant with an estimate
of the Excess by January 1 of any calendar year, Tenant shall continue to pay a
monthly installment based on the previous year's estimate until such time as
Landlord provides Tenant with an estimate of the Excess for the current year.
Upon receipt of such current year's estimate, an adjustment shall be made for
any month during the current year with respect to which Tenant paid monthly
installments of Additional Base Rental based on the previous year's estimate of
the Excess. Tenant shall pay Landlord for any underpayment within thirty (30)
days after demand. Any overpayment shall be credited against the installment of
Base Rental and Additional Base Rental due for the months immediately following
the furnishing of such estimate. Any amounts paid by Tenant based on Landlord's
estimate of the Excess shall be subject to adjustment pursuant to the
immediately following paragraph when actual Basic Costs are determined for such
calendar year.
As soon as is practical following the end of each calendar year during
the Lease Term, Landlord shall furnish to Tenant a statement of Landlord's
actual Basic Costs and the actual Excess for such previous calendar year,
provided that Landlord shall use good faith efforts to provide Tenant with such
statement on or before April 15th of each such calendar year. If the estimated
Excess actually paid by Tenant for the prior year is in excess of Tenant's
actual Pro Rata Share of the Excess for such prior year, then Landlord shall
apply such overpayment against Base Rental and Additional Base Rental due or to
become due hereunder, provided if the Lease Term expires prior to the
determination of such overpayment, Landlord shall refund such overpayment to
Tenant after first deducting the amount of any Rent due hereunder. Likewise,
Tenant shall pay to Landlord, within thirty (30) days after demand, any
underpayment with respect to the prior year, whether or not the Lease has
terminated prior to receipt by Tenant of a statement for such underpayment, it
being understood that this clause shall survive the expiration of the Lease.
Within sixty (60) days after written request from Tenant from time to time (but
not more than one time per year), Landlord shall provide Tenant with a detailed
statement containing a breakdown of the various categories of Expenses for the
Base Year and the calendar year for which Landlord's statement is being issued,
provided that Landlord shall not be required to provide Tenant with a detailed
statement for the Base Year more than three (3) years after the Commencement
Date.
Notwithstanding anything herein to the contrary, for purposes of
computing Tenant's Pro Rata Share of Basic Costs, Controllable Basic Costs
(hereinafter defined) shall not increase by more than eight percent (8%) per
calendar year on a cumulative basis over the course of the Lease Term. In other
words, Controllable Basic Costs for the first calendar year after the Base Year
shall not exceed 108% of the Controllable Basic Costs for the Base Year.
Controllable Basic Costs for the second calendar year after the Base Year shall
not exceed 116.64% of the Controllable Basic Costs for the Base Year, etc.
"Controllable Basic Costs" shall mean all Basic Costs exclusive of the cost of
Taxes, insurance and utilities.
B. Basic Costs shall mean all costs and expenses paid or incurred in
each calendar year in connection with operating, maintaining, repairing,
managing and owning the Building and the Property, including, but not limited
to, the following:
1. All labor costs for all persons performing services
required or utilized in connection with the operation, repair,
replacement and maintenance of and
4
control of access to the Building and the Property, including but
not limited to amounts incurred for wages, salaries and other
compensation for services, payroll, social security, unemployment
and other similar taxes, workers' compensation insurance, uniforms,
training, disability benefits, pensions, hospitalization,
retirement plans, group insurance or any other similar or like
expenses or benefits. Notwithstanding the foregoing, Basic Costs
shall not include wages, salaries and other compensation for
employees of Landlord above the level of general manager.
2. All management fees, the cost of equipping and maintaining
a management office at the Building, accounting services, legal
fees not attributable to leasing and collection activity, and all
other administrative costs relating to the Building and the
Property.
3. All rental and/or purchase costs of materials, supplies,
tools and equipment used in the operation, repair, replacement and
maintenance and the control of access to the Building and the
Property. Notwithstanding the foregoing, except as provided in
section V.B.11. below, replacements shall not be included in Basic
Costs if such replacements would be considered to be capital
improvements under generally accepted accounting principles.
4. All amounts charged to Landlord by contractors and/or
suppliers for services, replacement parts, components, materials,
equipment and supplies furnished in connection with the operation,
repair, maintenance, replacement of and control of access to any
part of the Building, or the Property generally, including the
heating, air conditioning, ventilating, plumbing, electrical,
elevator and other systems and equipment. At Landlord's option,
major repair items may be amortized over a period of up to five (5)
years. Notwithstanding the foregoing, except as provided in section
V.B.11. below, replacements shall not be included in Basic Costs if
such replacements would be considered to be capital improvements
under generally accepted accounting principles.
5. All premiums and deductibles paid by Landlord for fire and
extended coverage insurance, earthquake and extended coverage
insurance, liability and extended coverage insurance, rental loss
insurance, elevator insurance, boiler insurance and other insurance
customarily carried from time to time by lessors of comparable
office buildings or required to be carried by Landlord's Mortgagee.
6. Charges for all utilities other than gas and electricity,
it being agreed that Tenant's obligation to pay for gas and
electricity is contained in Article X of this Lease.
7. "Taxes," which for purposes hereof, shall mean: (a) all
real estate taxes and assessments on the Property, the Building or
the Premises, and taxes and assessments levied in substitution or
supplementation in whole or in part of such taxes, (b) all personal
property taxes for the Building's personal property, including
license expenses, (c) all taxes imposed on services provided to the
Tenant's of the Building by Landlord's agents and employees, (d)
all other taxes, fees or assessments now or hereafter levied by any
governmental authority on the Property, the Building or its
contents or on the operation and use thereof (except as relate to
specific tenants), and (e) all costs and fees incurred in
connection with seeking reductions in or refunds in Taxes
including, without limitation, any reasonable costs incurred by
Landlord to challenge the tax valuation of the Building, but
excluding income taxes. For the purpose of determining real estate
taxes and assessments for any given calendar year, the amount to be
included in Taxes for such year shall be as follows: (1) with
respect to any special assessment that is payable in installments,
Taxes for such year shall include the amount of the installment
(and any interest) due and payable during such year; and (2) with
respect to all other real estate taxes, Taxes for such year shall,
at Landlord's election, include either the amount accrued, assessed
or otherwise imposed for such year or the amount due and payable
for such year, provided that Landlord's election shall be applied
consistently throughout the Lease Term. If a reduction in Taxes is
obtained for any year of the Lease Term during which Tenant paid
its Pro Rata Share of Basic Costs,
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then Basic Costs for such year will be retroactively adjusted and
Landlord shall provide Tenant with a credit, if any, based upon
such adjustment. Likewise, if a reduction is subsequently obtained
for the tax component of Basic Costs for the Base Year (if Tenant's
Pro Rata Share is based upon increases in Basic Costs over a Base
Year), Basic Costs for the Base Year shall be restated and the
Excess for all subsequent years recomputed. Tenant shall pay
Landlord Tenant's Pro Rata Share of any such increase in the Excess
within thirty (30) days after Tenant's receipt of a statement
therefor from Landlord.
8. All costs of maintaining, repairing, resurfacing and
striping of the parking areas and garages of the Property, if any.
9. Cost of all maintenance service agreements with respect to
the Building, including those for equipment, alarm service, window
cleaning, janitorial services, pest control, uniform supply, plant
maintenance, landscaping, and any parking equipment.
10. Cost of all other repairs, replacements and general
maintenance of the Property and Building neither specified above
nor directly billed to tenants.
11. The amortized cost of capital improvements made to the
Building or the Property which are: (a) primarily for the purpose
of reducing operating expense costs or otherwise improving the
operating efficiency of the Property or Building; or (b) required
to comply with any laws, rules or regulations of any governmental
authority or a requirement of Landlord's insurance carrier. The
cost of such capital improvements shall be amortized over a period
of five (5) years and shall, at Landlord's option, include interest
at a rate that is reasonably equivalent to the interest rate that
Landlord would be required to pay to finance the cost of the
capital improvement in question as of the date such capital
improvement is performed, provided if the payback period for any
capital improvement is less than five (5) years, Landlord may
amortize the cost of such capital improvement over the payback
period. Except as specifically provided in this section V.B.11,
Basic Costs shall not include the cost of capital improvements. In
no event, however, shall Basic Costs include the cost of correcting
any existing (as of the date hereof) violations of any laws, rules
or regulations of any governmental authority. In addition, the
portion of the annual amortized costs to be included in Basic Costs
in any calendar year with respect to a capital improvement which is
intended to reduce expenses or improve the operating efficiency of
the Property or Building shall equal the lesser of: a) such annual
amortized costs; and b) the projected annual amortized reduction in
expenses for that portion of the useful life of the capital
improvement which falls within the Lease Term (based on the total
cost savings for such period, as reasonably estimated by Landlord).
12. Any other expense or charge of any nature whatsoever
which, in accordance with general industry practice with respect to
the operation of a first-class office building, would be construed
as an operating expense.
Notwithstanding the foregoing, if Landlord incurs any common
expenses in connection with the Building and one or more of the buildings
commonly known as Building I at Burlington Office Center, located at 325
Eisenhower Parkway, and/or Building II at Burlington Office Center, located at
315 Eisenhower Parkway, the cost of such expenses shall be equitably prorated
between the Building and such other buildings based upon the portion of such
services that are being provided to each building in question. If the Building
is not at least ninety-five percent (95%) occupied during the Base Year (if
applicable) or any calendar year of the Lease Term or if Landlord is not
supplying services to at least ninety-five percent (95%) of the total square
footage of the Building at any time during the Base Year (if applicable) or any
calendar year of the Lease Term, actual Basic Costs for purposes hereof shall,
at Landlord's option, be determined as if the Building had been ninety-five
percent (95%) occupied and Landlord had been supplying services to ninety-five
percent (95%) of the square footage of the Building during such year. Any
necessary extrapolation of Basic Costs under this Article shall be performed by
adjusting the cost of those components of Basic Costs that are impacted by
changes in the occupancy of the Building to the cost that would have been
incurred if the Building had been ninety-five percent (95%) occupied and
Landlord had been supplying services to ninety-five percent (95%) of the
Rentable Area of the Building.
6
C. If Basic Costs for any calendar year increase by more than five
percent (5%) over Basic Costs for the immediately preceding calendar year,
Tenant, within ninety (90) days after receiving Landlord's statement of actual
Basic Costs for a particular calendar year, shall have the right to provide
Landlord with written notice (the "Review Notice") of its intent to review
Landlord's books and records relating to the Basic Costs for such calendar year.
Within a reasonable time after receipt of a timely Review Notice, Landlord shall
make such books and records available to Tenant or Tenant's agent for its review
at either Landlord's home office or the office of the Building, provided that if
Tenant retains an agent to review Landlord's books and records for any calendar
year, such agent must be CPA firm licensed to do business in the state in which
the Building is located. If Tenant fails to give Landlord written notice of
objection within sixty (60) days after its review or fails to provide Landlord
with a Review Notice within the ninety (90) day period provided above, Tenant
shall be deemed to have approved Landlord's statement of Basic Costs in all
respects and shall thereafter be barred from raising any claims with respect
thereto. Upon Landlord's receipt of a timely objection notice from Tenant,
Landlord and Tenant shall work together in good faith to resolve the discrepancy
between Landlord's statement and Tenant's review. If Landlord and Tenant
determine that Basic Costs for the calendar year in question are less than
reported, Landlord shall provide Tenant with a refund of such overpayment within
thirty (30) days after the determination thereof. Likewise, if Landlord and
Tenant determine that Basic Costs for the calendar year in question are greater
than reported, Tenant shall, within thirty (30) days after the determination
thereof, pay to Landlord the amount of underpayment by Tenant. Any information
obtained by Tenant pursuant to the provisions of this Section shall be treated
as confidential. Notwithstanding anything herein to the contrary, Tenant shall
not be permitted to examine Landlord's books and records or to dispute any
statement of Basic Costs unless Tenant has paid to Landlord the amount due as
shown on Landlord's statement of actual Basic Costs, said payment being a
condition precedent to Tenant's right to examine Landlord's books and records.
D. Tenant covenants and agrees to pay to Landlord during the Lease
Term, without any setoff or deduction whatsoever, the full amount of all Base
Rental and Additional Base Rental due hereunder from time to time. In addition,
Tenant shall pay and be liable for, as additional Rent, all rental, sales and
use taxes or other similar taxes, if any, levied or imposed by any city, state,
county or other governmental body having authority upon the Rent required to be
paid by Tenant under this Lease, such payments to be in addition to all other
payments required to be paid to Landlord by Tenant under the terms and
conditions of this Lease. Any such payments shall be paid concurrently with the
payments of the Rent on which the tax is based. The Base Rental, Tenant's Pro
Rata Share of Basic Costs and any recurring monthly charges due hereunder shall
be due and payable in advance on the first day of each calendar month during the
Lease Term without demand. All other items of Rent shall be due and payable by
Tenant on or before thirty (30) days after billing by Landlord. If the Lease
Term commences on a day other than the first day of a calendar month or
terminates on a day other than the last day of a calendar month, then the
monthly Base Rental and Tenant's Pro Rata Share of Basic Costs for such month
shall be prorated for the number of days in such month occurring within the Term
based on a fraction, the numerator of which is the number of days of the Lease
Term that fell within such calendar month and the denominator of which is thirty
(30).
E. All Rent not paid when due and payable shall bear interest from the
date due until paid at the lesser of: (1) the Prime Rate plus four percent (4%)
per annum; or (2) the Maximum Rate. In addition, if Tenant fails to pay any
installment of Rent when due and payable hereunder and such failure continues
for five (5) days after written notice from Landlord to Tenant, a service fee
equal to five percent (5%) of such unpaid amount will be due and payable
immediately by Tenant to Landlord.
VI. SECURITY DEPOSIT.
A. A Security Deposit in the amount of one hundred twenty thousand and
00/100 dollars ($120,000.00) shall be delivered to Landlord upon the execution
of this Lease by Tenant and shall be held by Landlord without liability for
interest and as security for the performance of Tenant's obligations under this
Lease. Notwithstanding the foregoing, if Tenant exercises its rights with
respect to the Leasehold Improvement Loan described in Section 2 of Exhibit D to
the Lease, Tenant shall be required to increase the amount of the Security
Deposit as described in such Section 2 of Exhibit D. The Security Deposit shall
be in the form of a letter of credit, which letter of credit shall (a) be in the
form and substance of the sample letter of credit attached hereto as Exhibit F,
(b) name Landlord as its beneficiary, (c) expire no earlier than sixty (60) days
after
7
the Termination Date, and (d) be drawn on an FDIC-insured financial
institution satisfactory to Landlord. If the initial term of the letter of
credit will expire prior to sixty (60) days after the Termination Date, Tenant
shall from time to time, as necessary, renew or replace the original and any
subsequent letter of credit not less than sixty (60) days prior to its stated
expiration date so that it will remain in full force and effect until sixty (60)
days after the Termination Date of the Lease. If Tenant fails to furnish such
renewal or replacement at least sixty (60) days prior to the stated expiration
date of the letter of credit then held by Landlord, Landlord may draw upon such
letter of credit and hold the proceeds thereof (and such proceeds need not be
segregated) as a Security Deposit pursuant to the terms of this Article VI. Any
renewal of or replacement for the original or any subsequent letter of credit
shall meet the requirements for the original letter of credit as set forth
above, except that such replacement or renewal shall be issued by a national
bank satisfactory to Landlord at the time of the issuance thereof.
B. Landlord may, from time to time, without prejudice to any other
remedy, use all or a portion of the Security Deposit to make good any arrearages
of Rent, to repair damages to the Premises caused by Tenant, to clean the
Premises upon termination of this Lease or otherwise to satisfy any other
covenant or obligation of Tenant hereunder. Following any such application of
the Security Deposit, Tenant shall, upon demand, either (i) restore the letter
of credit to its full amount, or (ii) provide Landlord with an additional cash
security deposit in an amount equal to the amount of Security Deposit applied by
Landlord. If Tenant is not in default at the termination of this Lease, after
Tenant surrenders the Premises to Landlord in accordance with this Lease and all
amounts due Landlord from Tenant are finally determined and paid by Tenant or
through application of the Security Deposit, the balance of the Security Deposit
shall be returned to Tenant. If Landlord transfers its interest in the Premises
during the Lease Term, Landlord shall assign the Security Deposit to the
transferee and, provided the transferee accepts such assignment, Landlord shall
thereafter shall have no further liability for the return of such Security
Deposit. Landlord shall not be required to segregate the Security Deposit from
its other accounts.
C. Notwithstanding anything herein to the contrary, provided Tenant
has not been in default under this Lease prior to the effective date of any
reduction of the Security Deposit, Tenant shall have the right to reduce the
amount of the Security Deposit (i.e. the letter of credit) by twenty-five
percent (25%) of the original amount thereof effective as of the first (1st)
anniversary of the Commencement Date, the second (2nd) anniversary of the
Commencement Date and the third (3rd) anniversary of the Commencement Date.
Such reduction shall be accomplished by having Tenant provide Landlord with a
substitute letter of credit in the reduced amount. For example, assuming that
the initial amount of the letter of credit is one hundred sixty thousand dollars
($160,000.00), the letter of credit shall be reduced to (i) $120,000.00
effective as of the first anniversary of the Commencement Date, (ii) $80,000.00
effective as of the second anniversary of the Commencement Date, and (iii)
$40,000.00 effective as of the third anniversary of the Commencement Date.
VII. SERVICES TO BE FURNISHED BY LANDLORD.
Landlord, as part of Basic Costs (except as provided herein to the
contrary), agrees to provide the following services to Tenant at the Premises:
(a) cold water at those points of supply provided for general use of tenants in
the Building; (b) central heat, ventilation and air conditioning in season
during Landlord's normal business hours and at such temperatures as are
necessary for comfortable occupancy, or as otherwise required by law; (c)
routine maintenance and electric lighting service for all Common Areas of the
Building; (d) janitor service on business days exclusive of Saturdays, Sundays
and holidays in accordance with the cleaning specifications attached hereto as
Exhibit B (or such reasonably comparable specifications as Landlord may
designate from time to time); (e) elevator service in common with other tenants
of the Building for ingress and egress to and from the floor of the Premises
during Landlord's normal business hours, and (f) the replacement of building
standard light bulbs. For purposes of this section, Landlord's normal business
hours are hereby agreed to be 7:30 a.m. to 6:00 p.m. Monday through Friday,
holidays excluded. The failure by Landlord to any extent to furnish, or the
interruption or termination of these services in whole or in part, shall not
render Landlord liable in any respect nor be construed as an eviction of Tenant
or breach of any implied warranty of habitability, nor give rise to an abatement
of Rent, nor relieve Tenant from the obligation to fulfill any covenant or
agreement hereof. Notwithstanding anything to the contrary contained in this
Section VII if: (i) Landlord ceases to furnish any service in the Building for a
period in excess of ten (10) consecutive days after Tenant notifies Landlord of
such
8
cessation (the "Interruption Notice"), (ii) such cessation does not arise as a
result of an act or omission of Tenant, (iii) such cessation is not caused by a
fire or other casualty (in which case Article XVII shall control), (iv) the
restoration of such service is reasonably within the control of Landlord, and
(v) as a result of such cessation, the Premises or a material portion thereof,
is rendered untenantable (meaning that Tenant is unable to use the Premises in
the normal course of its business) and Tenant in fact ceases to use the
Premises, or material portion thereof, then Tenant, as its sole remedy, shall be
entitled to receive an abatement of Base Rental and Additional Base Rental
payable hereunder during the period beginning on the eleventh (11th) consecutive
day of such cessation and ending on the day when the service in question has
been restored. In the event the entire Premises has not been rendered
untenantable by the cessation in service, the amount of abatement that Tenant is
entitled to receive shall be prorated based upon the percentage of the Premises
so rendered untenantable and not used by Tenant. Tenant expressly acknowledges
that if Landlord, from time to time, elects to provide security services,
Landlord shall not be deemed to have warranted the efficiency of any such
security personnel, service, procedures or equipment and Landlord shall not be
liable in any manner for the failure of any such security personnel, services,
procedures or equipment to prevent or control, or apprehend any one suspected of
personal injury, property damage or criminal conduct in, on or around the
Property.
VIII. LEASEHOLD IMPROVEMENTS.
Any and all alterations, additions and improvements to the Premises, all
attached furniture, equipment and non-trade fixtures (collectively, "Leasehold
Improvements") shall be owned and insured by Landlord and shall remain upon the
Premises, all without compensation to Tenant. Any unattached and movable
equipment or furniture, trade fixtures or other personalty ("Tenant's Property")
shall be owned and insured by Tenant. Landlord may, nonetheless, at any time
within one (1) month after the expiration or earlier termination of this Lease
or Tenant's right to possession, require Tenant to remove any Leasehold
Improvements performed by or for the benefit of Tenant (other than electronic,
phone and data cabling) as are designated by Landlord (the "Required
Removables") at Tenant's sole cost. In the event that Landlord so elects, Tenant
shall remove such Required Removables within ten (10) days after notice from
Landlord, provided that in no event shall Tenant be required to remove such
Required Removables prior to the expiration or earlier termination of this Lease
or Tenant's right to possession. In addition to Tenant's obligation to remove
the Required Removables, Tenant shall repair any damage caused by such removal
and perform such other work as is reasonably necessary to remove any evidence
that the Required Removable in question has been removed. For example, if Tenant
removes a work station, Tenant may be required to patch the portion of carpet
upon which the work station was located and repaint the portion of the wall
against which the work station was placed. If Tenant fails to remove the
Required Removables after Landlord's request therefor, Landlord may remove,
store or dispose of the Required Removables at Tenant's cost, and repair any
damage caused by such removal and Tenant shall pay Landlord as additional Rent
hereunder, on demand, all such costs. Notwithstanding the foregoing, except for
any vault, stairway, structural alterations or supplemental HVAC equipment
installed in the Premises, Tenant shall not be required to remove any portion of
the Initial Alterations. In addition, with respect to any subsequent
alterations, additions or improvements performed by Tenant, Tenant may request
in writing at the time it submits its plans and specifications for an
alteration, addition or improvement, that Landlord advise Tenant whether
Landlord will require Tenant to remove, at the termination of this Lease or
Tenant's right to possession hereunder, such alteration, addition or
improvement, or any particular portion thereof. Landlord, within ten (10) days
after receipt of Tenant's request, shall advise Tenant as to whether Landlord
will require removal of such alteration, addition or improvement, or any
particular portion thereof, provided, however, Landlord shall have the right to
require Tenant to remove any vault, stairway or structural alterations in the
Premises, regardless of whether Landlord timely notified Tenant that it would
require such removal.
IX. REPAIRS AND ALTERATIONS BY TENANT.
A. Tenant shall, at Tenant's own cost and expense, keep the Premises
in good condition and repair. Such repairs shall maintain the Premises in as
good a condition and repair as it was at the Commencement Date and shall be
effected in compliance with the reasonable directions of Landlord. If Tenant
fails to make such repairs to the Premises within thirty (30) days after written
notice by Landlord, Landlord may, at its option, make such repairs, and Tenant
shall pay the reasonable cost thereof to the Landlord on demand as additional
Rent.
9
Notwithstanding the foregoing, the thirty (30) day notice period shall not be
required in the event of an emergency.
B. Tenant shall not make or allow to be made any alterations,
additions or improvements ("Alterations") to the Premises, without first
obtaining the written consent of Landlord, which consent shall not be
unreasonably withheld. Notwithstanding the foregoing, Landlord's consent shall
not be required for any alteration, addition or improvement that satisfies all
of the following criteria: 1) costs less than $10,000.00, 2) is of a cosmetic
nature such as painting, wallpapering, hanging pictures and installing
carpeting, 3) is not visible from the exterior of the Premises or Building, and
4) will not affect the systems or structure of the Building and does not require
work to be performed inside the walls or above the ceiling of the Premises;
provided that even if consent is not required, Tenant shall still comply with
all the other provisions of this Section IX.B. Prior to commencing any such
work and as a condition to obtaining Landlord's consent, Tenant must furnish
Landlord with plans and specifications; names and addresses of contractors;
copies of contracts; necessary permits (if required by applicable law); evidence
of contractor's and subcontractor's insurance in a type and amount acceptable to
Landlord; and payment bond or other security, all in form and amount
satisfactory to Landlord. All such Alterations shall be installed in a good
workmanlike manner using new materials. Landlord shall have the right to
designate the time when any such alterations, additions and improvements may be
performed and to otherwise designate reasonable rules, regulations and
procedures for the performance of work in the Building. Upon completion, Tenant
shall furnish "as-built" plans, contractor's affidavits and full and final
waivers of lien and receipted bills covering all labor and materials. All
Alterations shall comply with all insurance requirements, codes, ordinances,
laws and regulations, including without limitation, the Americans with
Disabilities Act. Tenant shall reimburse Landlord within thirty (30) days after
demand as additional Rent for all sums expended by Landlord for examination of
the architectural, mechanical, electric and plumbing plans for any Alterations.
If Landlord so requests, Tenant shall permit Landlord to supervise construction
operations, but no such supervision shall impose any liability upon Landlord. If
due to the nature of the alterations, additions or improvements, work needs to
be performed in the Premises after normal business hours, Tenant, within thirty
(30) days after demand, shall reimburse Landlord for the reasonable cost (on an
hourly basis) of having Landlord's management or engineering personnel oversee
the performance of such work. Landlord's approval of Tenant's plans and
specifications or supervision of any work performed for or on behalf of Tenant
shall not be deemed to be a representation by Landlord that such plans and
specifications comply with applicable insurance requirements, building codes,
ordinances, laws or regulations or that any such alterations, additions and
improvements will be adequate for Tenant's use.
X. USE OF ELECTRICAL SERVICES BY TENANT.
A. All electricity consumed in the Premises for lighting and power
shall be paid for by Tenant on a quarterly basis by a separate charge that is
over and above the Base Rental and Additional Base Rental payable under the
other provisions of this Lease. Such charge for electricity shall be based upon
the amount of electricity consumed in the Premises during each such quarterly
period as measured by a submeter installed in or about the Premises. Tenant
shall pay such charge to Landlord as additional Rent within thirty (30) days
after receipt of an invoice from Landlord setting forth such charge.
Notwithstanding the foregoing, Tenant acknowledges that the portion of the
Premises located on the third (3rd) floor is not currently submeter and that
Landlord shall bill Tenant for electricity with respect to such space based upon
Tenant's proportionate share of all spaces connected to the shared meter on the
third (3rd) floor. Tenant shall have the right to review the readings on such
shared meter and the manner in which Landlord allocates the electricity measured
by such meter. In addition, Tenant shall have the right to install a submeter
at its sole cost and expense for the purpose of measuring electricity consumed
by Tenant in such third (3rd) floor space. From and after the installation of
such submeter, Tenant's charge for electricity for the third (3rd) floor space
shall be based upon the electricity consumed in such space as measured by the
submeter. Tenant's use of electrical service in the Premises shall not exceed,
either in voltage, rated capacity, use or overall load, that which Landlord
deems to be standard for the Building.
B. In addition to the electrical charges set forth in Section X.A.
above, Tenant shall pay for its Pro Rata Share of all electricity and gas
consumed in connection with the operation of the Building and Property,
including, without limitation, all electricity and gas consumed in the operation
of the Building HVAC system. The electrical charge to be paid by Tenant under
this Section X.B. shall not, however, include the cost of electricity provided
to individual tenant
10
premises in the Building for lighting and power. Tenant shall pay for its Pro
Rata Share of all electricity and gas consumed in connection with the operation
of the Building and Property on a quarterly basis by a separate charge that is
over and above the Base Rental and Additional Base Rental payable under the
other provisions of this Lease. Tenant shall pay such charge to Landlord as
additional Rent within thirty (30) days after receipt of an invoice from
Landlord setting forth such charge. Notwithstanding the foregoing, in no event
shall the charge payable by Tenant for electricity and gas under this Section
X.B. exceed the sum of thirty-two thousand five hundred twenty-four and 20/100
($32,524.20) (i.e. $1.80 per square foot) during any calendar year during the
Lease Term.
XI. ENTRY BY LANDLORD.
Landlord and its agents or representatives shall have the right to enter
the Premises to inspect the same, or to show the Premises to prospective
purchasers, mortgagees, tenants or insurers, or to clean or make repairs,
alterations or additions thereto, including any work that Landlord deems
necessary for the safety, protection or preservation of the Building or any
occupants thereof, or to facilitate repairs, alterations or additions to the
Building or any other tenants' premises. Except for any entry by Landlord in an
emergency situation or to provide normal cleaning and janitorial service,
Landlord shall provide Tenant with reasonable prior notice of any entry into the
Premises, which notice may be given verbally. If reasonably necessary for the
protection and safety of Tenant and its employees, Landlord shall have the right
to temporarily close the Premises to perform repairs, alterations or additions
in the Premises. Entry by Landlord hereunder shall not constitute a constructive
eviction or entitle Tenant to any abatement or reduction of Rent by reason
thereof. Notwithstanding anything to the contrary contained herein, Landlord
shall perform any entry into the Premises in a manner that is reasonably
designed to minimize any interference with Tenant's access to or use of the
Premises. In the event the making of any such repair, alteration, improvement
or addition shall cause the Premises to be inaccessible or unusable by Tenant,
as determined in Tenant's reasonable judgment, for a period of ten (10) days,
then Base Rental and Additional Base Rental payable under the Lease shall abate
during the period beginning on the eleventh (11th) day that the Premises are
inaccessible or unusable and ending on the date on which the Premises are once
again accessible and usable by Tenant.
XII. ASSIGNMENT AND SUBLETTING.
Tenant shall not assign, sublease, transfer or encumber this Lease or any
interest therein or grant any license, concession or other right of occupancy of
the Premises or any portion thereof or otherwise permit the use of the Premises
or any portion thereof by any party other than Tenant (any of which events is
hereinafter called a "Transfer") without the prior written consent of Landlord,
which consent shall not be unreasonably withheld with respect to a subletting or
assignment. If Tenant requests Landlord's consent to a Transfer, Tenant,
together with such consent, shall provide Landlord with the name of the proposed
transferee and the nature of the business of the proposed transferee, the term,
use, rental rate and all other material terms and conditions of the proposed
Transfer, including, without limitation, a copy of the proposed assignment,
sublease or other contractual documents and evidence satisfactory to Landlord
that the proposed transferee is financially responsible. Landlord may, within
thirty (30) days after receipt of all information and documentation required
herein, (a) consent to or refuse to consent to such Transfer in writing; or (b)
negotiate directly with the proposed transferee and upon execution of a lease
with such transferee, terminate this Lease (in part or in whole, as appropriate)
upon thirty (30) days' notice; or (c) cancel and terminate this Lease, in whole
or in part as appropriate, upon thirty (30) days' notice. In the event Landlord
consents to any such Transfer, Tenant shall bear all actual reasonable costs and
expenses (including attorney review fees) incurred by Landlord in connection
with the review and approval of such documentation. Tenant hereby covenants and
agrees to pay to Landlord all rent and other consideration which it receives
which is in excess of the Rent payable hereunder within ten (10) days following
receipt thereof by Tenant. In addition to any other rights Landlord may have,
Landlord shall have the right to contact any transferee and require that all
payments made pursuant to the Transfer shall be made directly to Landlord. For
purposes of this Article XII, an assignment shall be deemed to include a change
in the majority control of Tenant, if Tenant is a partnership or a corporation
whose stock is not traded publicly. Any Transfer consented to by Landlord in
accordance with this Article XII shall be only for the Permitted Use and for no
other purpose, and in no event shall any Transfer release or relieve Tenant or
any Guarantors from any obligations under this Lease.
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XIII. LIENS.
Tenant will not permit any mechanic's liens or other liens to be placed
upon the Premises or Tenant's leasehold interest therein, the Building, or the
real estate associated therewith. In the event any such lien does attach, Tenant
shall, within five (5) days of notice of the filing of said lien, discharge such
lien to the satisfaction of Landlord and Landlord's Mortgagee (as hereinafter
defined). If Tenant shall fail to so discharge such lien, then, in addition to
any other right or remedy of Landlord, Landlord may, but shall not be obligated
to, discharge the same. Any amount paid by Landlord for any of the aforesaid
purposes, including reasonable attorneys' fees, shall be paid by Tenant to
Landlord on demand as additional Rent. Notwithstanding the foregoing, if any
mechanics lien or other lien is placed solely against Tenant's leasehold
interest (and not the Building or Property), Tenant shall have the right to
diligently contest such lien in accordance with applicable law. Landlord shall
have the right to post and keep posted on the Premises any notices that may be
provided by law or which Landlord may deem to be proper for the protection of
Landlord, the Premises and the Building from such liens.
XIV. INDEMNITY AND WAIVER OF CLAIMS.
A. Tenant shall indemnify, defend and hold Landlord, its partners,
managing agents, and Mortgagee(s) (collectively the "Landlord Related Parties")
harmless against and from all liabilities, obligations, damages, penalties,
costs, charges and expenses, including, without limitation, reasonable
architects' and attorneys' fees (if and to the extent permitted by law), which
may be imposed upon, incurred by, or asserted in connection with any third party
claims brought against Landlord or any of the Landlord Related Parties and
arising out of or in connection with the acts and omissions of Tenant and, while
such parties are either (i) in the Premises, or (ii) outside the Premises but
acting within the scope of Tenant's control or authority, the acts or omissions
of Tenant's transferees, agents, servants, contractors, employees or licensees.
In case any action or proceeding is brought against Landlord or any of the
Landlord Related Parties by reason of any of the foregoing, Tenant shall, at
Tenant's sole cost and expense, resist and defend such action or proceeding with
counsel reasonably acceptable to Landlord.
B. Landlord and the Landlord Related Parties shall not be liable for,
and Tenant waives, all claims for loss or damage to Tenant's business or damage
to person or property sustained by Tenant or any person claiming by, through or
under Tenant (including Tenant's employees) resulting from any accident or
occurrence in, on or about the Premises, the Building or the Property,
including, without limitation, claims for loss, theft or damage resulting from:
1. wind or weather; 2. any defect in any sprinkler, heating or air-conditioning
equipment, electric wiring, gas, water or steam pipes; 3. the backing up of any
sewer pipe or downspout; 4. the bursting, leaking or running of any tank, water
closet, drain or other pipe; 5. the escape of steam or water; 6. water, snow or
ice being upon or coming through the roof, skylight, stairs, doorways, windows,
walks or any other place upon or near the Building; 7. the falling of any
fixture, plaster, tile or other material; 8. any act, omission or negligence of
other tenants, licensees or any other persons or occupants of the Building or of
adjoining or contiguous buildings, of owners of adjacent or contiguous property
or the public, or by construction of any private, public or quasi-public work;
except where such loss or damage is due to Landlord's negligence or willful
failure to make repairs required to be made pursuant to other provisions of this
Lease, after the expiration of a reasonable time after written notice to
Landlord of the need for such repairs. Notwithstanding the foregoing, nothing
contained herein shall be construed to be a waiver by Tenant of its right to
receive an abatement of Rent in accordance with the terms and conditions of
Articles VII, XI and/or XVII of this Lease.
C. Landlord shall indemnify, defend and hold Tenant harmless against
and from all liabilities, obligations, damages, penalties, costs, charges and
expenses, including, without limitation, reasonable architects' and attorneys'
fees (if and to the extent permitted by law), which may be imposed upon,
incurred by, or asserted in connection with any third party claims brought
against Tenant and arising, directly or indirectly, out of or in connection with
the acts and omissions of Landlord and, if and to the extent such parties are
acting within the scope of Landlord's control or authority, the acts or
omissions of Landlord's agents, servants, contractors or employees. In case any
action or proceeding is brought against Tenant or any of the Tenant Related
Parties by reason of any of the foregoing, Landlord shall, at Landlord's sole
cost and expense, resist and defend such action or proceeding with counsel
reasonably acceptable to Tenant.
XV. INSURANCE.
A. Tenant shall, at all times, carry and maintain, at its sole cost
and expense: (a) Commercial General Liability Insurance applicable to the
Premises and its appurtenances
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providing, on an occurrence basis, a minimum combined single limit of Two
Million Dollars ($2,000,000.00); (b) All Risks of Physical Loss Insurance
written at replacement cost value and with a replacement cost endorsement
covering all of Tenant's Property in the Premises; (c) Workers' Compensation
Insurance as required by the state in which the Premises is located and in
amounts as may be required by applicable statute, and Employers Liability
Coverage of Five Hundred Thousand Dollars ($500,000.00) per occurrence; (d)
additional insurance as reasonably required by Landlord to insure against risks
related to Tenant's use of the Premises for purposes other than general office
use. Any company writing any insurance to be maintained pursuant to the terms of
this Lease (all such insurance being referred to as "Tenant's Insurance"), as
well as the form of such insurance, shall at all times be subject to Landlord's
reasonable approval. All policies evidencing Tenant's Insurance (except for
Workers' Compensation) shall specify Tenant and the "owner(s) of the Building
and its respective managing agents, partners and mortgagee(s)" as additional
insureds. All policies of Tenant's Insurance shall contain endorsements that the
insurer(s) will give to Landlord and its designees at least thirty (30) days'
advance written notice of any change, cancellation, termination or lapse of said
insurance. Tenant shall deliver to Landlord at least fifteen (15) days prior to
the time Tenant's Insurance is first required to be carried by Tenant, and upon
renewals at least fifteen (15) days prior to the expiration of any such
insurance coverage, a certificate of insurance of all policies procured by
Tenant in compliance with its obligations under this Lease. The limits of
Tenant's Insurance shall in no event limit Tenant's liability under this Lease.
B. Landlord shall maintain all-risk, extended coverage property
insurance on the Building and the Leasehold Improvements (excluding Tenant's
Property) in an amount equal to not less than ninety percent (90%) of the full
replacement value. The cost of all such insurance shall be included as a part of
the Basic Costs, and payments for losses and recoveries thereunder shall be made
solely to Landlord or the Mortgagees of Landlord as their interests shall
appear.
XVI. SUBROGATION.
Notwithstanding anything set forth in this Lease to the contrary,
Landlord and Tenant do hereby agree to cause their respective insurance carriers
to waive any and all right of recovery, claim, action or cause of action against
the other, their respective principals, beneficiaries, partners, officers,
directors, agents, and employees, and, with respect to Landlord, its
Mortgagee(s), for any loss or damage that may occur to Landlord or Tenant or any
party claiming by, through or under Landlord or Tenant, as the case may be, with
respect to their respective property, the Building, the Property or the Premises
or any addition or improvements thereto, or any contents therein including the
negligence of Landlord or Tenant, or their respective principals, beneficiaries,
partners, officers, directors, agents and employees and, with respect to
Landlord, its Mortgagee(s), which loss or damage is (or would have been, had the
insurance required by this Lease been carried) covered by insurance.
XVII. CASUALTY DAMAGE.
A. If the Premises or any part thereof shall be damaged by fire or
other casualty, Tenant shall give prompt written notice thereof to Landlord. In
case the Building shall be so damaged that substantial alteration or
reconstruction of the Building shall, in Landlord's sole opinion, be required
(whether or not the Premises shall have been damaged by such casualty) or in the
event the Premises have been damaged and there is less than two (2) years of the
Lease Term remaining on the date of such casualty or in the event any Mortgagee
should require that the insurance proceeds payable as a result of a casualty be
applied to the payment of the mortgage debt or in the event of any material
uninsured loss to the Building or in the event Landlord will not be permitted by
applicable law to rebuild the Building in substantially the same form as existed
prior to the fire or casualty, Landlord may, at its option, terminate this Lease
by notifying Tenant in writing of such termination within ninety (90) days'
after the date of such casualty. Such termination shall be effective as of the
date of fire or casualty, with respect to any portion of the Premises that was
rendered untenantable, and the date specified in Landlord's notice, with respect
to any portion of the Premises that remained tenantable. If Landlord does not
elect to terminate this Lease, Landlord, as soon as reasonably possible, shall
commence (and thereafter diligently pursue to completion) the restoration of
the Premises (but excluding any improvements, alterations or additions made by
Tenant in violation of this Lease) to substantially the same condition they were
in immediately prior to the happening of the casualty. Notwithstanding the
foregoing, Landlord's obligation to restore the Building, and the
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Leasehold Improvements shall not require Landlord to expend for such repair and
restoration work more than the insurance proceeds actually received by the
Landlord as a result of the casualty, provided if Landlord has insufficient
insurance proceeds to restore the Premises and Landlord elects not to fund such
shortfall, Landlord shall so notify Tenant (the "Insurance Notice") and Tenant
shall have the right to terminate this Lease by written notice to Landlord
within ten (10) days after the date of Landlord's Insurance Notice. When the
repairs have been completed by Landlord, Tenant shall complete the restoration
or replacement of all Tenant's Property necessary to permit Tenant's reoccupancy
of the Premises, and Tenant shall present Landlord with evidence satisfactory to
Landlord of Tenant's ability to pay such costs prior to Landlord's commencement
of repair and restoration of the Premises. Landlord shall not be liable for any
inconvenience or annoyance to Tenant or injury to the business of Tenant
resulting in any way from such damage or the repair thereof, except that,
subject to the provisions of the next sentence, Landlord shall allow Tenant an
abatement of Rent on a per diem basis during the time and to the extent any
damage to the Premises causes the Premises to be rendered untenantable. If the
Premises or any other portion of the Building is damaged by fire or other
casualty resulting from the fault or negligence of Tenant or any of Tenant's
agents, employees, or contractors, the Rent hereunder shall not be diminished
during any period during which the Premises, or any portion thereof, is
untenantable, and Tenant shall be liable to Landlord for the cost of the repair
and restoration of the Building caused thereby to the extent such cost and
expense is not covered by insurance proceeds. Landlord and Tenant hereby waive
the provisions of any law from time to time in effect during the Lease Term
relating to the effect upon leases of partial or total destruction of leased
property. Landlord and Tenant agree that their respective rights in the event of
any damage to or destruction of the Premises shall be those specifically set
forth herein.
B. Notwithstanding Section XVII above to the contrary, if all or any
portion of the Premises shall be made untenantable or inaccessible by a fire or
other casualty, Landlord shall within sixty (60) days of the fire or other
casualty, cause an architect or general contractor selected by Landlord to
estimate the amount of time required to substantially complete repair and
restoration of the Premises and make the Premises tenantable and accessible
again, using standard working methods (the "Completion Estimate"). If the
Completion Estimate indicates that the Premises cannot be made tenantable and
accessible within nine (9) months from the date the repair and restoration is
started, Tenant shall have the right to terminate this Lease by giving written
notice to Landlord within ten (10) days after its receipt of the Completion
Estimate. In addition, in the event that there is less than two (2) years
remaining in the Lease Term and the Completion Estimate indicates that the
remaining Lease Term of this Lease following such restoration period is less
than 2.5 times as long as such restoration period, then Tenant may terminate
this Lease by written notice to Landlord within ten (10) days following Tenant's
receipt of the Completion Estimate. If the Completion Estimate indicates that
the Premises can be made tenantable and accessible within nine (9) months from
the date the repair and restoration is started and neither Tenant (with respect
to the last two years of the Lease Term) nor Landlord has otherwise exercised
its right to terminate the Lease pursuant to the terms hereof, or if the
Completion Estimate indicates that the Premises cannot be made tenantable and
accessible within nine (9) months but neither party terminates this Lease
pursuant to this Article XVII, Landlord shall proceed to repair and restore the
Premises as provided in section XVII.A. above. Notwithstanding the foregoing,
if Landlord does not substantially complete the repair and restoration of the
Premises by the expiration of the estimated period of time set forth in the
Completion Estimate, which period shall be extended to the extent of any
Reconstruction Delays, then Tenant may terminate this Lease by written notice
to Landlord within fifteen (15) days after the expiration period, as the same
may be extended. For purposes of this Lease, the term "Reconstruction Delays"
shall mean" (i) any delays caused by Tenant, and (ii) any delays caused by
events of Force Majeure, provided that Landlord shall only be entitled to claim
Force Majeure delays of which Landlord has provided Tenant written notice. Such
termination shall be effective as of the date of fire or casualty, with respect
to any portion of the Premises that was rendered untenantable or inaccessible,
and the effective date of termination specified in Tenant's notice, with respect
to any portion of the Premises that remained tenantable and accessible.
XVIII. DEMOLITION.
Intentionally Omitted.
XIX. CONDEMNATION.
If (a) the whole or any substantial part of the Premises or (b) any
portion of the Building or Property which would leave the remainder of the
Building unsuitable for use as an office building comparable to its use on the
Commencement Date, shall be taken or condemned for any public or quasi-public
use, then Landlord may, at its option, terminate this Lease effective as of the
date the physical taking of said Premises or said portion of the Building or
Property
14
shall occur. In addition, if (x) the whole or any material part of the Premises
or access thereto shall be taken or condemned for any public or quasi-public use
under governmental law, ordinance or regulation, or by right of eminent domain,
or by private purchase in lieu thereof, or (x) all or any portion of the
parking for the Building shall be taken or condemned for any public or
quasi-public use under governmental law, ordinance or regulation, or by right of
eminent domain, or by private purchase in lieu thereof so as to reduce the
parking ratio for the Building below applicable zoning requirements (and
provided Landlord does not furnish reasonable substitute parking), Tenant shall
also have the right to terminate this Lease effective as of the date of such
physical taking. Such right to terminate shall be exercised by written notice
to Landlord within thirty (30) days after the date on which Tenant is first
notified by Landlord of the taking. In the event this Lease is not terminated,
the square footage of the Building, the square footage of the Premises and
Tenant's Pro Rata Share shall be appropriately adjusted. In addition, Rent for
any portion of the Premises so taken or condemned shall be abated during the
unexpired term of this Lease effective when the physical taking of said portion
of the Premises shall occur. All compensation awarded for any such taking or
condemnation, or sale proceeds in lieu thereof, shall be the property of
Landlord, and Tenant shall have no claim thereto, the same being hereby
expressly waived by Tenant. Notwithstanding the foregoing, Tenant shall have
the right to bring a separate claim provided that such claim does not reduce the
amount of the award that would otherwise be payable to Landlord.
XX. EVENTS OF DEFAULT.
The following events shall be deemed to be events of default under this
Lease: (a) Tenant shall fail to pay when due any Base Rental, Additional Base
Rental or other Rent under this Lease and such failure shall continue for five
(5) business days after written notice from Landlord (hereinafter sometimes
referred to as a "Monetary Default"); (b) any failure by Tenant (other than a
Monetary Default) to comply with any term, provision or covenant of this Lease,
which failure is not cured within thirty (30) days after delivery to Tenant of
notice of the occurrence of such failure, provided that if such failure creates
a hazardous condition, such failure must be cured immediately. Notwithstanding
the foregoing, except in the case of a hazardous condition, if such failure or
default cannot practicably be cured within the thirty (30) day period provided
in the foregoing sentence, then such thirty (30) day cure period shall be
extended to the extent reasonably necessary to permit Tenant to cure such
default, provided further that Tenant shall diligently proceed to cure such
default and, from time to time upon request, shall furnish Landlord with
evidence of Tenant's efforts to cure such default. Notwithstanding subsections
(a) above, if Tenant fails to cure a monetary default within applicable grace
periods on three (3) occasions during any twelve (12) month period, any
subsequent monetary default shall, at Landlord's option, be considered to be an
incurable default by Tenant; (c) Tenant or any Guarantor shall become insolvent,
or shall make a transfer in fraud of creditors, or shall commit an act of
bankruptcy (provided that Tenant shall have the right to discharge any
involuntary bankruptcy within applicable statutory periods) or shall make an
assignment for the benefit of creditors, or Tenant or any Guarantor shall admit
in writing its inability to pay its debts as they become due; (d) the leasehold
estate hereunder shall be taken on execution or other process of law or equity
in any action against Tenant; or (e) Tenant shall be in default beyond any
notice and cure period under any other lease with Landlord.
XXI. REMEDIES.
A. Upon the occurrence of any event or events of default under this
Lease, Landlord shall have the option to pursue any one or more of the following
remedies without any notice (except as expressly prescribed herein):
1. Terminate this Lease, in which event Tenant shall
immediately surrender the Premises to Landlord. If Tenant fails to
surrender the Premises upon termination of the Lease hereunder,
Landlord may enter upon and take possession of the Premises and
expel or remove Tenant and any other person who may be occupying
said Premises, or any part thereof, by force, if necessary, without
being liable for prosecution or any claim of damages therefor, and
Tenant hereby agrees to pay to Landlord on demand the amount of all
loss and damage which Landlord may suffer by reason of such
termination, whether through inability to relet the Premises on
satisfactory terms or otherwise, specifically including but not
limited to all reasonable costs of reletting (which for purposes of
this Lease shall include all costs of preparing the Premises for
occupancy and all costs of concessions and brokerage commissions in
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connection with any new lease for the Premises) and any deficiency
that may arise by reason of any reletting or failure to relet.
2. Enter upon and take possession of the Premises and expel
or remove Tenant or any other person who may be occupying said
Premises, or any part thereof, without liability therefor and
without terminating this Lease. Landlord may (but shall be under no
obligation to) relet the Premises or any part thereof for the
account of Tenant, upon such terms, conditions and uses as Landlord
in its absolute discretion may determine, and Landlord may collect
and receive any rents payable by reason of such reletting. Tenant
agrees to pay Landlord on demand all costs of reletting and any
deficiency that may arise by reason of such reletting or failure to
relet. Landlord shall not be responsible or liable for any failure
to relet the Premises. No such re-entry or taking of possession of
the Premises by Landlord shall be construed as an election on
Landlord's part to terminate this Lease unless a written notice of
such termination is given to Tenant.
3. Terminate this Lease, in which event, Tenant shall
immediately surrender the Premises to Landlord and pay to Landlord
the sum of: (a) all Rent accrued hereunder through the date of
termination, and, upon Landlord's determination thereof, (b) an
amount equal to the total Rent that Tenant would have been required
to pay for the remainder of the Lease Term discounted to present
value at the prime rate then in effect, minus the then present fair
rental value of the Premises for the remainder of the Lease Term,
similarly discounted, after deducting all anticipated costs of
reletting. Landlord's determination of such amount shall be
conclusive and binding on Tenant, and shall be deemed to have been
made in good faith, subject only to manifest error.
B. No right or remedy herein conferred upon or reserved to Landlord is
intended to be exclusive of any other right or remedy, and each and every right
and remedy shall be cumulative and in addition to any other right or remedy
given hereunder or now or hereafter existing by agreement, applicable law or in
equity. Tenant shall be liable for all costs, expenses, and reasonable
attorneys' fees incurred by Landlord in connection with the exercise of any of
its remedies hereunder.
XXII. LIMITATION OF LIABILITY.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS LEASE, THE
LIABILITY OF LANDLORD (AND OF ANY SUCCESSOR LANDLORD HEREUNDER) TO TENANT SHALL
BE LIMITED TO THE INTEREST OF LANDLORD IN THE BUILDING, AND TENANT AGREES TO
LOOK SOLELY TO LANDLORD'S INTEREST IN BURLINGTON CENTER FOR THE RECOVERY OF ANY
JUDGMENT OR AWARD AGAINST THE LANDLORD, IT BEING INTENDED THAT NEITHER LANDLORD
NOR ANY MEMBER, PRINCIPAL, PARTNER, SHAREHOLDER, OFFICER, DIRECTOR OR
BENEFICIARY OF LANDLORD SHALL BE PERSONALLY LIABLE FOR ANY JUDGMENT OR
DEFICIENCY. TENANT HEREBY COVENANTS THAT, PRIOR TO THE FILING OF ANY SUIT FOR AN
ALLEGED DEFAULT BY LANDLORD HEREUNDER, IT SHALL GIVE LANDLORD AND ALL MORTGAGEES
WHOM TENANT HAS BEEN NOTIFIED HOLD MORTGAGES OR DEED OF TRUST LIENS ON THE
PROPERTY, BUILDING OR PREMISES NOTICE AND THIRTY (30) DAY PERIOD IN WHICH TO
CURE SUCH ALLEGED DEFAULT BY LANDLORD. NOTWITHSTANDING THE FOREGOING, IF SUCH
ALLEGED DEFAULT CANNOT PRACTICABLY BE CURED WITHIN THE THIRTY (30) DAY PERIOD
PROVIDED IN THE FOREGOING SENTENCE, THEN SUCH THIRTY (30) DAY CURE PERIOD SHALL
BE EXTENDED TO THE EXTENT REASONABLY NECESSARY TO PERMIT LANDLORD AND ANY
MORTGAGEE TO CURE SUCH DEFAULT, PROVIDED FURTHER THAT EITHER LANDLORD OR SUCH
MORTGAGEE SHALL DILIGENTLY PROCEED TO CURE SUCH DEFAULT AND, FROM TIME TO TIME
UPON REQUEST, SHALL FURNISH TENANT WITH EVIDENCE OF LANDLORD'S OR SUCH
MORTGAGEE'S EFFORTS TO CURE SUCH DEFAULT. NOTHING HEREIN, HOWEVER, SHALL BE
CONSTRUED TO IMPOSE ANY OBLIGATION ON ANY MORTGAGEE TO CURE A DEFAULT BY
LANDLORD. IN ADDITION, TENANT ACKNOWLEDGES THAT EQUITY OFFICE HOLDINGS, L.L.C.,
EQUITY OFFICE PROPERTIES, L.L.C., AND ANN ARBOR ASSOCIATES ARE ACTING SOLELY IN
THEIR CAPACITY AS AGENTS FOR LANDLORD.
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XXIII. NO WAIVER.
Failure of Landlord to declare any default immediately upon its
occurrence, or delay in taking any action in connection with an event of default
shall not constitute a waiver of such default, nor shall it constitute an
estoppel against Landlord. Failure by Landlord to enforce its rights with
respect to any one default shall not constitute a waiver of its rights with
respect to any subsequent default. Receipt by Landlord of Tenant's keys to the
Premises shall not constitute an acceptance or surrender of the Premises.
XXIV. RELOCATION.
Intentionally Omitted.
XXV. HOLDING OVER.
In the event of holding over by Tenant after expiration or other
termination of this Lease or Tenant's right to possession, occupancy of the
Premises subsequent to such termination or expiration shall be that of a tenancy
at sufferance and in no event for month-to-month or year-to-year, but Tenant
shall, throughout the entire holdover period, be subject to all the terms and
provisions of this Lease and shall pay for its use and occupancy an amount (on a
per month basis without reduction for any partial months during any such
holdover) equal to one hundred fifty percent (150%) of the sum of the Base
Rental and Additional Base Rental due for the period immediately preceding such
holding over, provided if such holding over continues for more than thirty (30)
days, effective as of the thirty-first (31st) day, the amount of such holdover
rental shall increase to two hundred percent (200%) of the sum of the Base
Rental and Additional Base Rental due for the period immediately preceding such
holding over. No holding over by Tenant or payments of money by Tenant to
Landlord after the expiration of the term of this Lease shall be construed to
extend the Lease Term or prevent Landlord from recovery of immediate possession
of the Premises by summary proceedings or otherwise. In addition to the
obligation to pay the amounts set forth above during any such holdover period,
Tenant shall also be liable to Landlord for all damage, including any
consequential damage, which Landlord may suffer by reason of any holding over by
Tenant.
XXVI. SUBORDINATION TO MORTGAGES; ESTOPPEL CERTIFICATE.
A. Tenant accepts this Lease subject and subordinate to any mortgage,
deed of trust, ground lease or other lien presently existing or hereafter
arising upon the Premises, or upon the Building and/or the Property and to any
renewals, modifications, refinancings and extensions thereof (any such mortgage,
deed of trust, lease or other lien being hereinafter referred to as a
"Mortgage", and the person or entity having the benefit of same being referred
to hereinafter as a "Mortgagee"), but Tenant agrees that any such Mortgagee
shall have the right at any time to subordinate such Mortgage to this Lease on
such terms and subject to such conditions as such Mortgagee may deem appropriate
in its discretion. This clause shall be self-operative and no further instrument
of subordination shall be required. If any person shall succeed to all or part
of Landlord's interests in the Premises whether by purchase, foreclosure, deed
in lieu of foreclosure, power of sale, termination of lease or otherwise, and if
and as so requested or required by such successor-in-interest, Tenant shall,
without charge, attorn to such successor-in-interest. Tenant agrees that it will
from time to time upon request by Landlord and as soon as reasonably possible
following the date of such request (but in no event later than fifteen days
after the date of the request), execute and deliver to such persons as Landlord
shall request a subordination agreement or an estoppel certificate or other
similar statement in recordable form certifying (if and to the extent true to
the best of Tenant's knowledge) that this Lease is unmodified and in full force
and effect, stating the dates to which Rent and other charges payable under this
Lease have been paid, stating that Landlord is not in default hereunder and
further stating such other matters as Landlord shall reasonably require.
B. Notwithstanding Section XXVI.A. above to the contrary, Landlord
will use reasonable efforts to obtain a non-disturbance, subordination and
attornment agreement from its current Mortgagee on such Mortgagee's current
standard form of agreement, a copy of which is attached hereto as Exhibit G.
Tenant agrees to execute such agreement simultaneously with its execution of
this Lease. In addition, Landlord will use reasonable efforts to obtain a
non-disturbance, subordination and attornment agreement in favor of Tenant from
any future Mortgagee on such Mortgagee's then current form of agreement. Tenant
will execute such Mortgagee's form of non-disturbance, subordination and
attornment agreement and return the same to Landlord for
17
execution by the Mortgagee. "Reasonable efforts" of Landlord shall not require
Landlord to incur any cost, expense or liability to obtain such agreement, it
being agreed that Tenant shall be responsible for any fee or review costs
charged by the Mortgagee.
XXVII. NOTICE.
Whenever any demand, request, approval, consent or notice ("Notice")
shall or may be given to either of the parties by the other, each such Notice
shall be in writing and shall be sent by registered or certified mail with
return receipt requested, or sent by overnight courier service (such as Federal
Express) provided that if Tenant has vacated the Premises or is in default of
this Lease Landlord may serve notice by any manner permitted by Law. Any Notice
under this Lease delivered by registered or certified mail shall be deemed to
have been given and effective on the earlier of (a) the third day following the
day on which the same shall have been mailed with sufficient postage prepaid or
(b) the delivery date indicated on the return receipt. Notice sent by overnight
courier service shall be deemed given and effective upon the day after such
notice is delivered to or picked up by the overnight courier service. Either
party may, at any time, change its Notice Address by giving the other party
Notice stating the change and setting forth the new address.
XXVIII. LANDLORD'S LIEN.
Intentionally Omitted.
XXIX. EXCEPTED RIGHTS.
This Lease does not grant any rights to light or air over or about the
Building. Landlord specifically excepts and reserves to itself the use of such
areas within the Premises as are required for installation of utility lines and
other installations required to serve any occupants of the Building and the
right to maintain and repair the same, and no rights with respect thereto are
conferred upon Tenant unless otherwise specifically provided herein. Landlord
further reserves to itself the right from time to time: (a) to change the
Building's name or street address; (b) to install, fix and maintain signs on the
exterior and interior of the Building; (c) to designate and approve window
coverings; (d) to make any decorations, alterations, additions, improvements to
the Building, or any part thereof (including the Premises) which Landlord shall
desire, or deem necessary for the safety, protection, preservation or
improvement of the Building, or as Landlord may be required to do by law; (e) to
retain at all times and to use pass-keys to all locks within and into the
Premises; (f) to approve the weight, size, or location of heavy equipment and
articles in and about the Premises; (g) to close or restrict access to the
Building at all times other than normal business hours subject to Tenant's right
to admittance at all times under such regulations as Landlord may prescribe from
time to time, or to close (temporarily or permanently) any of the entrances to
the Building; (h) to change the arrangement and/or location of entrances of
passageways, doors and doorways, and Common Areas of the Building; (i) if Tenant
has vacated the Premises during the last six (6) months of the Lease Term, to
perform additions, alterations and improvements to the Premises in connection
with a reletting or anticipated reletting thereof without being responsible or
liable for the value or preservation of any then existing improvements to the
Premises; and (j) to grant to anyone the exclusive right to conduct any business
or undertaking in the Building. Any and all entries into the Premises pursuant
to this Article XXIX shall be performed in accordance with the terms and
conditions of Article XI and, if and to the extent applicable, shall entitle
Tenant to the same rental abatement rights as are set forth in such Article XI.
XXX. SURRENDER OF PREMISES.
At the expiration or earlier termination of this Lease or Tenant's right
of possession hereunder, Tenant shall remove all Tenant's Property from the
Premises, remove all Required Removables designated by Landlord and quit and
surrender the Premises to Landlord, broom clean, and in good order, condition
and repair, ordinary wear and tear and damage by fire or other casualty
excepted. If Tenant fails to remove any of Tenant's Property within three (3)
business days after the termination of this Lease or Tenant's right to
possession hereunder, Landlord, at Tenant's sole cost and expense, shall be
entitled to remove and/or store such Tenant's Property and Landlord shall in no
event be responsible for the value, preservation or safekeeping thereof. Tenant
shall pay Landlord, upon demand, any and all expenses caused by such removal and
all storage charges against such property so long as the same shall be in the
possession of Landlord or under the control of Landlord. In addition, if Tenant
fails to remove
18
any Tenant's Property from the Premises or storage, as the case may be, within
ten (10) days after written notice from Landlord, Landlord, at its option, may
deem all or any part of such Tenant's Property to have been abandoned by Tenant
and title thereof shall immediately pass to Landlord.
XXXI. MISCELLANEOUS.
Landlord and Tenant hereby agree that: (a) If any term or provision of
this Lease shall, to any extent, be invalid or unenforceable, the remainder of
this Lease shall not be affected thereby, and each term and provision of this
Lease shall be valid and enforced to the fullest extent permitted by law;
(b)Tenant shall not record this Lease or any memorandum hereof; (c) This Lease
shall be interpreted, construed, and enforced in accordance with the laws of the
state in which the Building is located; (d) Events of "Force Majeure" shall
include strikes, riots, acts of God, shortages of labor or materials, war,
governmental law, regulations or restrictions and any other cause whatsoever
that is beyond the control of Landlord or Tenant, as the case may be, and
whenever a period of time is herein prescribed for the taking of any action by
Landlord or Tenant (other than the payment of Rent and the determination of the
Commencement Date), such party shall not be liable or responsible for, and there
shall be excluded from the computation of such period of time, any delays due to
events of Force Majeure; (e) Landlord shall have the right to transfer and
assign, in whole or in part, all of its rights and obligations hereunder and in
the Building and Property referred to herein, and in such event and upon such
transfer to and assumption by Landlord's transferee, Landlord shall be released
from any further obligations hereunder, and Tenant agrees to look solely to such
successor in interest of Landlord for the performance of such obligations; (f)
Tenant hereby represents to Landlord that it has not dealt with a broker (other
than Friedman Real Estate Group) in connection with this Lease and Tenant agrees
to indemnify and hold Landlord and the Landlord Related Parties harmless from
all claims of any brokers other than Friedman Real Estate Group claiming to have
represented Tenant in connection with this Lease. Landlord agrees to indemnify
and hold Tenant harmless from all claims of any brokers claiming to have
represented Landlord in connection with this Lease; (g) If there is more than
one Tenant, or if the Tenant is comprised of more than one person or entity, the
obligations hereunder imposed upon Tenant shall be joint and several obligations
of all such parties and all notices, payments, and agreements given or made by,
with or to any one of such persons or entities shall be deemed to have been
given or made by, with or to all of them; (h) Tenant hereby covenants, warrants
and represents: (1) that the individual executing this Lease on its behalf is
duly authorized to execute or attest and deliver this Lease on behalf of Tenant
in accordance with the organizational documents of Tenant; (2) that this Lease
is binding upon Tenant; (3) that Tenant is duly organized and legally existing
in the state of its organization, and is qualified to do business in the state
in which the Premises is located; and (4) that the execution and delivery of
this Lease by Tenant will not result in any breach of, or constitute a default
under, any mortgage, deed of trust, lease, loan, credit agreement, partnership
agreement or other contract or instrument to which Tenant is a party or by which
Tenant may be bound. Landlord hereby covenants, warrants and represents: (1)
that the individual executing this Lease on its behalf is duly authorized to
execute or attest and deliver this Lease on behalf of Landlord in accordance
with the management agreement for the Building and the organizational documents
of Landlord's agent; (2) that this Lease is binding upon Landlord; (3) that
Landlord is duly organized and legally existing in the state of its
organization, and is qualified to do business in the state in which the Premises
is located; and (4) that the execution and delivery of this Lease by Landlord
will not result in any breach of, or constitute a default under, any mortgage,
deed of trust, lease, loan, credit agreement, partnership agreement or other
contract or instrument to which Landlord is a party or by which Landlord may be
bound.; (i) At any time during the Lease Term, Tenant shall provide Landlord,
upon ten (10) days' prior written notice from Landlord, with (y) a current
financial statement and financial statements of the two (2) years prior to the
current financial statement year and such statements shall be prepared in
accordance with generally accepted accounting principles and shall be audited by
an independent certified public accountant, and (z) such other information as
Landlord or its Mortgagee many reasonably request in order to create a
"business-profile" of Tenant and determine Tenant's ability to fulfill its
obligations under this Lease; (j) With respect to all required acts of Tenant,
time is of the essence of this Lease; (k) This Lease and the covenants and
conditions herein contained shall inure to the benefit of and be binding upon
Landlord and Tenant and their respective permitted successors and assigns; (l)
Notwithstanding anything to the contrary contained in this Lease, the expiration
of the Lease Term, whether by lapse of time or otherwise, shall not relieve
Tenant from Tenant's obligations accruing prior to the expiration of the Lease
Term and such obligations shall survive any such expiration or other termination
of the Lease Term. Except as
19
provided in subsection XXXI (e) above, the expiration of the Lease Term, whether
by lapse of time or otherwise, shall not relieve Landlord from Landlord's
obligations accruing prior to the expiration of the Lease Term and such
obligations shall survive any such expiration or other termination of the Lease
Term; (m) The headings and titles to the paragraphs of this Lease are for
convenience only and shall have no effect upon the construction or
interpretation of any part hereof; (n) This Lease may be modified only by a
written agreement signed by Landlord and Tenant; (o) Landlord has delivered a
copy of this Lease to Tenant for Tenant's review only, and the delivery hereof
does not constitute an offer to Tenant or option.
XXXII. ENTIRE AGREEMENT.
This Lease Agreement, including the following Exhibits, constitutes the
entire agreement between the parties hereto with respect to the subject matter
of this Lease: (a) Exhibit A-1 Outline and Location of the 1st floor Premises;
Exhibit A-2 Outline and Location of the 2nd floor Premises (b) Exhibit B -
Cleaning Specifications; (c) Exhibit C - Rules and Regulations (d) Exhibit D -
Additional Terms and Conditions; (e) Exhibit E - Commencement Letter; (f)
Exhibit F - Form of Letter of Credit; (g) Exhibit G - Subordination,
Non-disturbance and attornment agreement.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease in
multiple original counterparts as of the day and year first above written.
WITNESS/ATTEST:
LANDLORD: BURLINGTON ASSOCIATES GENERAL
PARTNERSHIP, an Illinois General
Partnership
BY: EQUITY OFFICE HOLDINGS, L.L.C., a
Delaware limited liability company, as
agent
- ---------------------------------
Name (print): /s/ Angel Rivera By:
------------------- --------------------------------------
Name: /s/ Eric Marx
- --------------------------------- ------------------------------------
Name (print): Title: Vice President
-------------------- -----------------------------------
Date: 5/20/96
------------------------------------
WITNESS/ATTEST:
TENANT: NETWORK EXPRESS, INC., a
Michigan corporation
- ---------------------------------
Name (print): /s/ R. Hawkins By:
------------------- --------------------------------------
Name: /s/ John R. Ternes
- --------------------------------- ------------------------------------
Name (print): Title: V.P. Finance & CFO
-------------------- -----------------------------------
Date: 5/20/96
------------------------------------
20
EXHIBIT A-3
OUTLINE AND LOCATION OF 3RD FLOOR PREMISES
EXHIBIT B
CLEANING SPECIFICATIONS
TO BE ATTACHED
EXHIBIT C
RULES AND REGULATIONS
TO BE ATTACHED
EXHIBIT D
ADDITIONAL TERMS AND CONDITIONS
This exhibit is attached to and made a part of the Lease dated May 20, 1996,
by and between Burlington Associates General Partnership, an Illinois General
Partnership, by its agent Equity Office Holdings, L.L.C., ("Landlord"), and
Network Express, Inc., a Michigan corporation ("Tenant") for space in the
building located at 305 E. Eisenhower Parkway, Ann Arbor, MI 48108.
1. INITIAL ALTERATIONS. Landlord, provided Tenant is not in default after
the expiration of applicable cure periods, agrees to contribute (the "Work
Allowance") an amount not to exceed eighty-one thousand three hundred ten and
50/100 dollars ($81,310.50) toward the cost of performing improvements to the
Premises in preparation of Tenant's occupancy thereof (the "Initial
Alterations"), the cost of preparing design and construction documents for the
Initial Alterations, and the cost of preparing mechanical and electrical plans
for the Initial Alterations. The Work Allowance, less a 10% retainage (which
retainage shall be payable as part of the final draw) shall be paid to Tenant
within thirty (30) days after receipt of the following documentation: (i) an
application for payment and sworn statement of contractor substantially in the
form of AIA Document G-702 covering all work for which disbursement is to be
made to a date specified therein; (ii) a certification from an AIA architect
substantially in the form of the Architect's Certificate for Payment which is
located on AIA Document G702, Application and Certificate of Payment; (iii)
Contractor's, subcontractor's and material supplier's waivers of liens which
shall cover all Initial Alterations for which disbursement is being requested,
which waivers of lien shall be on the form specified by the mechanics' lien laws
of the State of Michigan, together with all such invoices, contracts, or other
supporting data as Landlord or Landlord's Mortgagee may reasonably require; (iv)
a cost breakdown for each trade or subcontractor performing the Initial
Alterations; (v) plans and specifications for the Initial Alterations, together
with a certificate from an AIA architect that such plans and specifications
comply in all material respects with all laws affecting the Building, Property
and Premises; (vi) copies of all construction contracts for the Initial
Improvements, together with copies of all change orders, if any, and (vii) a
request to disburse from Tenant containing an approval by Tenant of the work
done and a good faith estimate of the cost to complete the Initial Alterations.
In no event shall Landlord be required to disburse the Work Allowance more than
one time per month. If the cost of the Initial Alterations exceeds the Work
Allowance, the Work Allowance shall be disbursed in the proportion that the Work
Allowance bears to the total cost of the Initial Alterations. If the cost of
the Initial Alterations is less than the Work Allowance, any such unused Work
Allowance shall accrue to the sole benefit of Landlord.
2. LEASEHOLD IMPROVEMENT LOAN. In the event that Tenant has used the
entire eighty-one thousand three hundred ten and 50/100 dollars ($81,310.50)
Work Allowance for the performance of Initial Alterations, Tenant, provided it
is not in default under this Lease, shall have the right to borrow up to
forty-five thousand one hundred seventy-two and 50/100 dollars ($45,172.50)(the
"Additional Work Allowance") from Landlord in order to help finance the amount
by which the cost of the Initial Alterations exceeds the Work Allowance. Such
Additional Work Allowance shall be disbursed to Tenant in accordance with the
provisions of Section 1. Any Additional Work Allowance borrowed by Tenant
hereunder shall be repaid to Landlord as additional Base Rental in equal monthly
installments over the initial Lease Term, together with interest at an annual
rate of thirteen percent (13%). In addition, the amount of the Security Deposit
to be furnished by Tenant to Landlord shall be increased by the amount of the
Additional Work Allowance actually borrowed by Tenant from Landlord. In the
event that Tenant is in default under this Lease after the expiration of
applicable cure periods, the entire unamortized balance of the Additional Work
Allowance borrowed by Tenant shall become immediately due and payable and,
except to the extent required by applicable law, shall not be subject to
mitigation or reduction in connection with a reletting of the Premises by
Landlord. Upon request by Landlord, Tenant shall enter into an amendment to this
Lease to document any Additional Work Allowance borrowed by Tenant and to
reflect any corresponding increases in the Security Deposit and the Base Rental
to be paid by Tenant hereunder.
3. SIGNAGE.
A. Tenant, at its sole cost and expense, shall have the right to
install a sign on the exterior portion of the east face of the Building (the
"Sign") in a location mutually agreed upon by Landlord and Tenant. Such Sign
shall list the name of Tenant. Tenant, at its sole cost and expense, shall
obtain all necessary building permits and zoning and regulatory approval in
connection with the Sign. All costs of design, materials, fabrication,
installation, supervision of installation, wiring and maintaining and repairing
the Sign will be at Tenant's expense. Tenant
shall submit to Landlord reasonably detailed drawings of the Sign, including
without limitation, the size, material, shape and lettering for review and
approval by Landlord. Any such Sign shall conform to the standards of design and
motif reasonably established by Landlord for the exterior of the Building and
the Property on which it is located. Tenant shall reimburse Landlord for any
costs associated with Landlord's review and supervision as hereinbefore provided
including, but not limited to, engineers and other professional consultants.
B. Tenant shall be responsible for maintaining the Sign in a first
class manner and, except to the extent any damage is caused by the negligence of
Landlord or any Landlord Related Parties, for all costs of repairing the Sign,
including, without limitation, all cost of repairing or replacing any damaged
portions of the Sign and the cost of replacing any lightbulbs, florescent or
neon tubes or other illumination device. All such work shall be performed with
reasonable prior notice to Landlord by contractors approved by Landlord.
Notwithstanding the foregoing, if Tenant fails to properly maintain and repair
the Sign and such failure continues for thirty (30) days after written notice
from Landlord setting forth the items that are in need or maintenance or repair,
Landlord shall have the right to maintain and repair the Sign with contractors
selected by Landlord and to bill Tenant for the reasonable cost thereof as
additional Rent.
C. Tenant, upon the expiration date or sooner termination of this
Lease, shall remove the Sign and restore any damage to the Property at Tenant's
expense. Such removal and restoration work shall be performed by contractors
reasonably approved by Landlord. In addition, Landlord shall have the right to
remove Tenant's name from the Sign at Tenant's sole cost and expense, if, at any
time during the Lease Term: (1) Tenant assigns this Lease, (2) Tenant sublets
more than 25% of the Premises, (3) Tenant ceases to occupy at least 75% of the
Premises, or (4) Tenant defaults under any term or condition of the Lease and
fails to cure such default within any applicable grace period.
4. RIGHT OF REFUSAL.
A. Tenant shall have the one time right of refusal with respect to
any space that comes available for lease in the Building, ( the "Refusal
Space"). Tenant's right with respect to the Refusal Space on the first (1st)
floor of the Building shall be a right of first refusal. Tenant's right with
respect to the Refusal Space on the third (3rd) floor of the Building shall be a
right of second refusal, subject and subordinate to the rights of Environmental
Resourse Management. In addition, if Landlord provides Tenant with an Advice
that contains expansion rights (whether such rights are described as an
expansion option, right of first refusal, right to first offer or otherwise) and
Tenant does not exercise its Right of First Refusal to lease the Refusal Space
described in the Advice, Tenant's Right of First Refusal shall be subject and
subordinate to all such expansion rights contained in the Advice.
Tenant's right of refusal shall be exercised as follows: when Landlord
has a prospective tenant ("Prospect") interested in leasing all or any portion
of the Refusal Space, Landlord shall advise Tenant (the "Advice") of the terms
under which Landlord is prepared to lease the Refusal Space to such Prospect and
Tenant may lease the Refusal Space, under such terms, by providing Landlord with
written notice of exercise ("Notice of Exercise") within five (5) business days
after the date of the Advice. If the Refusal Space is located on the third
floor, Landlord may either postpone sending Tenant an Advice until after the
Refusal Space has been offered to Environmental Resource Management or
simultaneously send Tenant an Advice, which Advice will be subject to the
superior rights of Environmental Resource Management. Notwithstanding the
foregoing, Tenant shall have no such Right of Refusal and Landlord need not
provide Tenant with an Advice if:
1. Tenant is in default under the Lease at the time Landlord would
otherwise deliver the Advice; or
2. the Premises, or any portion thereof, is sublet at the time
Landlord would otherwise deliver the Advice; or
3. the Lease has been assigned prior to the date Landlord would
otherwise deliver the Advice; or
4. the Refusal Space is not intended for the exclusive use of
Tenant during the Lease Term; or
5. the Tenant is not occupying the Premises on the date Landlord
would otherwise deliver the Advice.
B. The term for the Refusal Space shall commence upon the
commencement date stated in the Advice and thereupon such Refusal Space shall be
considered a part of the Premises, provided that all of the terms stated in the
Advice (including, without limitation, the expiration date set forth in the
Advice) shall govern Tenant's leasing of the Refusal Space and only to the
extent that they do not conflict with the Advice, the terms and conditions of
this Lease shall apply to the Refusal Space. Notwithstanding the foregoing, if
the lease term for the Refusal Space will expire prior to the Termination Date
of this Lease, Landlord, to the extent it is able to do so without violating the
rights of any other tenant in the Building, shall work together with Tenant in
good faith to agree upon the terms under which Tenant may lease the Refusal
Space for a term that expires coterminously with the Termination Date. The
Refusal Space (including improvements and personalty, if any) shall be accepted
by Tenant in its condition and as-built configuration existing on the earlier of
the date Tenant takes possession of the Refusal Space or the date the term for
such Refusal Space commences, unless the Advice specifies work to be performed
by Landlord in the Refusal Space, in which case Landlord shall perform such work
in the Refusal Space.
C. The rights of Tenant hereunder with respect to any portion of
the Refusal Space for which Landlord has a Prospect shall terminate on the
earlier to occur of (i) Tenant's failure to exercise its Right of First Refusal
within the five (5) business day period provided in paragraph A above, and (ii)
the date Landlord would have provided Tenant an Advice if Tenant had not been in
violation of one or more of the conditions set forth in Paragraph A above.
Notwithstanding the foregoing, if (i) Tenant was entitled to exercise its Right
of First Refusal, but failed to provide Landlord with a Notice of Exercise
within the five (5) business day period provided in paragraph A above, and (ii)
Landlord does not enter into a lease for the Refusal Space with the Prospect or
any other prospect within a period of six (6) months following the date of the
Advice, Tenant shall once again have a Right of First Refusal with respect to
such Refusal Space. In addition, Tenant shall once again have the Right of First
Refusal with respect to the Refusal Space if, within such six (6) months period,
Landlord proposes to lease the Refusal Space to the Prospect or any other
Prospect on terms that are substantially different than those set forth in the
Advice. For purposes hereof, the terms offered to a prospect shall be deemed to
be substantially the same as those set forth in the Advice as long as there is
no more than a ten percent (10%) reduction in the "bottom line" cost per
rentable square foot of the Refusal Space to the Prospect when compared with the
"bottom line" cost per rentable square foot under the Advice, considering all of
the economic terms of the both deals, respectively, including, without
limitation, the net rent, any tax or expense escalation or other financial
escalation and any financial concessions. To the extent such rights have not
terminated on an earlier date, Tenant's rights hereunder shall terminate on July
1, 1999.
D.1. If Tenant exercises its Right of First Refusal, Landlord shall
prepare an amendment (the "Refusal Space Amendment") adding the Refusal Space to
the Premises on the terms set forth in the Advice and reflecting the changes in
the Base Rental, square footage of the Premises, Tenant's Pro Rata Share and
other appropriate terms.
2. A copy of the Refusal Space Amendment shall be (i) sent to
Tenant within a reasonable time after Landlord's receipt of the Notice of
Exercise, and (ii) executed by Tenant and returned to Landlord within ten (10)
days thereafter.
5. RENEWAL OPTION.
A. Tenant shall have the right to extend the Lease Term for one
additional period of three (3) years commencing on the day following the
Termination Date of the initial Lease Term and ending on the third (3rd)
anniversary of the Termination Date of the initial Lease Term (the "Renewal
Term"), if:
1. Landlord receives notice of exercise ("Initial Renewal Notice")
not less then twelve (12) full calendar months prior to the expiration
of the initial Lease Term and not more than fifteen (15) full calendar
months prior to the expiration of the initial Lease Term; and
2. Tenant is not in default under the Lease beyond any applicable
cure periods at the time that Tenant delivers its Initial Renewal
Notice or at the time Tenant delivers its
Binding Renewal Notice; and
3. No part of the Premises is sublet at the time that Tenant
delivers its Initial Renewal Notice or at the time Tenant delivers its
Binding Renewal Notice; and
4. The Lease has not been assigned prior to the date that Tenant
delivers its Initial Renewal Notice or prior to the date Tenant
delivers its Binding Renewal Notice.
B. The initial Base Rental rate per rentable square foot for the
Premises during the Renewal Term shall equal the Prevailing Market (hereinafter
defined) rate per rentable square foot for the Premises.
C. Tenant shall pay Additional Base Rental (i.e. Basic Costs) for
the Premises during the Renewal Term in accordance with the terms and conditions
of the Lease, provided that the eight percent (8%) cap on Controllable Expenses
shall not be applicable during the Renewal Term.
D. Within thirty (30) days after receipt of Tenant's Initial
Renewal Notice, Landlord shall advise Tenant of the applicable Base Rental rate
for the Premises for the Renewal Term. Tenant, within fifteen (15) days after
the date on which Landlord advises Tenant of the applicable Base Rental rate for
the Renewal Term, shall either (i) give Landlord final binding written notice
("Binding Notice") of Tenant's exercise of its option, or (ii) if Tenant
disagrees with Landlord's determination, provide Landlord with written notice of
rejection (the "Rejection Notice"). If Tenant fails to provide Landlord with
either a Binding Notice or Rejection Notice within such fifteen (15) day period,
Tenant's Renewal Option shall be null and void and of no further force and
effect. If Tenant provides Landlord with a Binding Notice, Landlord and Tenant
shall enter into the Renewal Amendment upon the terms and conditions set forth
herein. If Tenant provides Landlord with a Rejection Notice, Landlord and
Tenant shall work together in good faith to agree upon the Prevailing Market
Base Rental rate for the Premises during the Renewal Term. Upon agreement
Tenant shall provide Landlord with Binding Notice and Landlord and Tenant shall
enter into the Renewal Amendment in accordance with the terms and conditions
hereof. Notwithstanding the foregoing, if Landlord and Tenant are unable to
agree upon the Prevailing Market Base Rental rate for the Premises within thirty
(30) days after the date on which Tenant provides Landlord with a Rejection
Notice, Tenant's Renewal Option shall be null and void and of no force and
effect.
E. If Tenant is entitled to and properly exercises its Renewal
Option, Landlord shall prepare an amendment (the "Renewal Amendment") to reflect
changes in the Base Rental, Lease Term, Termination Date and other appropriate
terms. The Renewal Amendment shall be:
1. sent to Tenant within a reasonable time after receipt of the
Renewal Notice; and
2. executed by Tenant and returned to Landlord within fifteen (15)
days thereafter.
F. For purposes hereof, "Prevailing Market" shall mean the arms
length fair market annual rental rate per rentable square foot under renewal
leases and amendments entered into on or about the date on which the Prevailing
Market is being determined hereunder for space comparable to the Premises in the
Building and office buildings comparable to the Building in Ann Arbor, Michigan.
The determination of Prevailing Market shall take into account any material
economic differences between the terms of this Lease and any comparison lease,
such as rent abatements, construction costs and other concessions and the
manner, if any, in which the landlord under any such lease is reimbursed for
operating expenses and taxes. The determination of Prevailing Market shall also
take into consideration any reasonably anticipated changes in the Prevailing
Market rate from the time such Prevailing Market rate is being determined and
the time such Prevailing Market rate will become effective under this Lease.
6. RULES AND REGULATIONS. Notwithstanding anything to the contrary in
rule #7 of the Rules and Regulations attached to this Lease as Exhibit C, Tenant
shall be permitted to store bicycles in the first floor portion of the Premises
so long as (i) Tenant uses the side entrance of the Building for the purpose of
bringing any bicycles into the first floor portion of the Premises,
and (ii) bringing such bicycles through the Building into the first floor
portion of the Premises does not unreasonably disturb any of the other tenants
and occupants of the Building.
7. BROKERAGE COMMISSION. Landlord and Tenant acknowledge that the Base
Rental set forth in Section I.A.2. of the Lease assumes that (i) Landlord will
pay the brokerage commission due to Friedman Real Estate Group in connection
with this Lease, and (ii) Tenant will repay Landlord for such commission as part
of Base Rental at the rate of (a) $632.41 per month with respect to the first
twenty-four (24) months of the Lease Term and (b) $647.47 per month with respect
to the second twenty-four (24) months of the Lease Term. Notwithstanding the
foregoing, Tenant, by notice to Landlord within fifteen (15) days after the full
and final execution of this Lease, shall have the right to pay such brokerage
commission directly to Friedman Real Estate Group. If Tenant elects to pay such
commission directly to Friedman Real Estate Group and, in addition, provides
Landlord with a waiver of claims from Friedman Real Estate Group on a form
reasonably acceptable to Landlord, the Base Rental schedule set forth in Section
I.A.2. shall automatically be amended to be as follows:
2. "Base Rental" shall mean the sum of one million two hundred
forty-seven thousand one hundred twenty-two and 56/100 dollars
($1,247,122.56), payable by Tenant to Landlord in forty-eight
(48) monthly installments as follows:
a. twenty-four (24) equal installments of twenty-five
thousand six hundred twelve and 81/100 dollars ($25,612.81),
each payable on or before the first day of each month during
the period beginning on the Commencement Date and ending on the
day prior to the second (2nd) anniversary of the Commencement
Date.
b. twenty-four (24) equal installments of twenty-six thousand
three hundred fifty and 63/100 dollars ($26,350.63), each
payable on or before the first day of each month during the
period beginning on the second (2nd) anniversary of the
Commencement Date and ending on the day prior to the fourth
(4th) anniversary of the Commencement Date.
In order to be acceptable to Landlord, any waiver from Friedman Real
Estate Group must contain (i) a statement from Friedman Real Estate Group
acknowledging that it has been paid in full for any and all commissions and
other sums due in connection with this Lease, and (ii) a waiver or any and all
claims against Landlord in connection with this Lease.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease in multiple
original counterparts as of the day and year first above written.
WITNESS/ATTEST:
LANDLORD: BURLINGTON ASSOCIATES GENERAL
PARTNERSHIP, an Illinois General
Partnership
BY: EQUITY OFFICE HOLDINGS, L.L.C., a
Delaware limited liability company, as
agent
- -----------------------------------
Name (print): Angel Rivera By:
- ----------------------------------- -------------------------------------
Name: Eric Marx
- ----------------------------------- -----------------------------------
Name (print): Title: Vice President
---------------------- ----------------------------------
Date: 5/20/96
----------------------------------
WITNESS/ATTEST:
TENANT: NETWORK EXPRESS, INC., a
Michigan corporation
- ---------------------------------
Name(print): R. Hawkins By:
--------------------- -------------------------------------
Name: John R. Ternes
- --------------------------------- -----------------------------------
Name(print): Title: V P Finance & CFO
--------------------- ----------------------------------
Date: 5/20/96
----------------------------------
and (ii) bringing such bicycles through the Building into the first floor
portion of the Premises does not unreasonably disturb any of the other tenants
and occupants of the Building.
7. BROKERAGE COMMISSION. Landlord and Tenant acknowledge that the Base
Rental set forth in Section I.A.2. of the Lease assumes that (i) Landlord will
pay the brokerage commission due to Friedman Real Estate Group in connection
with this Lease, and (ii) Tenant will repay Landlord for such commission as part
of Base Rental at the rate of (a) $632.41 per month with respect to the first
twenty-four (24) months of the Lease Term and (b) $647.47 per month with respect
to the second twenty-four (24) months of the Lease Term. Notwithstanding the
foregoing, Tenant, by notice to Landlord within fifteen (15) days after the full
and final execution of this Lease, shall have the right to pay such brokerage
commission directly to Friedman Real Estate Group. If Tenant elects to pay such
commission directly to Friedman Real Estate Group and, in addition, provides
Landlord with a waiver of claims from Friedman Real Estate Group on a form
reasonably acceptable to Landlord, the Base Rental schedule set forth in Section
I.A.2. shall automatically be amended to be as follows:
2. "Base Rental" shall mean the sum of one million two hundred
forty-seven thousand one hundred twenty-two and 56/100 dollars
($1,247,122.56), payable by Tenant to Landlord in forty-eight
(48) monthly installments as follows:
a. twenty-four (24) equal installments of twenty-five
thousand six hundred twelve and 81/100 dollars ($25,612.81),
each payable on or before the first day of each month during
the period beginning on the Commencement Date and ending on the
day prior to the second (2nd) anniversary of the Commencement
Date.
b. twenty-four (24) equal installments of twenty-six thousand
three hundred fifty and 63/100 dollars ($26,350.63), each
payable on or before the first day of each month during the
period beginning on the second (2nd) anniversary of the
Commencement Date and ending on the day prior to the fourth
(4th) anniversary of the Commencement Date.
In order to be acceptable to Landlord, any waiver from Friedman Real
Estate Group must contain (i) a statement from Friedman Real Estate Group
acknowledging that it has been paid in full for any and all commissions and
other sums due in connection with this Lease, and (ii) a waiver or any and all
claims against Landlord in connection with this Lease.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease in multiple
original counterparts as of the day and year first above written.
WITNESS/ATTEST:
LANDLORD: BURLINGTON ASSOCIATES GENERAL
PARTNERSHIP, an Illinois General
Partnership
BY: EQUITY OFFICE HOLDINGS, L.L.C., a
Delaware limited liability company, as
agent
_________________________________
Name (print):____________________ By:_____________________________________
_________________________________ Name:___________________________________
Name (print):____________________ Title:__________________________________
Date:___________________________________
WITNESS/ATTEST:
TENANT: NETWORK EXPRESS, INC., a
Michigan corporation
_________________________________
Name(print):_____________________ By:_____________________________________
_________________________________ Name:___________________________________
Name(print):_____________________ Title:__________________________________
Date:__________________________________