COMMERCIAL LEASE - NET
(Single Tenant Building)
Basic Lease Information
Date: January 15, 1998
Landlord: TriNet Essential Facilities X, Inc., a Maryland corporation
Tenant: ICG Holdings, Inc., a Colorado corporation
Premises (section 1.1): Address: 161 Inverness Drive West, City of Englewood,
County of Arapahoe, State of Colorado
Term (section 2.1): Fifteen (15) years plus the partial month between the
Commencement Date and the last day of the calendar month during which the
Commencement Date occurs.
Commencement Date (section 2.1): January 20, 1998
Expiration Date (section 2.1): January 31, 2013
Initial Base Rent (section 3.1(a)): $395,222.00 per month.
Use (section 6.1): Office purposes and, to the extent permitted by Legal
Requirements and subject to the terms of section 6.1, ancillary uses
typical of headquarters buildings such as employee cafeteria, training
rooms, child-care center, testing laboratories, light assembly of products
and storage of inventory and supplies.
Liability Insurance (section 10.3): $5,000,000
Insuring Party for Property Insurance (section 10.4): Landlord.
Landlord's Address (section 23.1): Four Embarcadero Center, Suite 3150, San
Francisco, CA 94111, Attn: Mr. Mark W. Whiting.
Tenant's Address (section 23.1): 9605 East Maroon Circle, Englewood, CO 80112,
Attn: Mr. Douglas McKinnon; with a copy to Tenant at the same address,
Attention: General Counsel.
Guarantors (section 24.1): ICG Communications, Inc., a Delaware corporation; ICG
Holdings (Canada), Inc., a Federal Canadian corporation.
Exhibits and Addenda (section 24.3): Exhibit A - Form of Estoppel Certificate;
Exhibit B - Form of Lease Guaranty.
The foregoing Basic Lease Information is incorporated in and made a part of
the Lease to which it is attached. If there is any conflict between the Basic
Lease Information and the Lease, the Lease shall control.
Landlord: Tenant:
TRINET ESSENTIAL FACILITIES X, INC., ICG HOLDINGS, INC.,
a Maryland corporation a Colorado corporation
By /s/Gary P. Lyon By /s/ James D. Grenfell
----------------------------- ---------------------------
Gary P. Lyon James D. Grenfell
Its Executive Vice President Its Executive Vice President
and Chief Financial Officer
TABLE OF CONTENTS
Page
ARTICLE 1 Premises....................................................1
ARTICLE 2 Term........................................................1
ARTICLE 3 Rent........................................................2
ARTICLE 4 Payment of Operating Expenses...............................5
ARTICLE 5 Operating Expenses, Property Taxes and Other Taxes
Defined; Contest Rights.....................................7
ARTICLE 6 Use....................................................... 11
ARTICLE 7 Services.................................................. 12
ARTICLE 8 Maintenance and Repairs; Capital Improvements............. 13
ARTICLE 9 Alterations............................................... 14
ARTICLE 10 Insurance................................................. 16
ARTICLE 11 Compliance With Legal Requirements........................ 19
ARTICLE 12 Assignment or Sublease.................................... 20
ARTICLE 13 Entry by Landlord......................................... 21
ARTICLE 14 Events of Default and Remedies............................ 22
ARTICLE 15 Damage or Destruction..................................... 27
ARTICLE 16 Eminent Domain............................................ 29
ARTICLE 17 Subordination, Merger and Sale............................ 31
ARTICLE 18 Estoppel Certificate...................................... 32
ARTICLE 19 Holding Over.............................................. 33
ARTICLE 20 Financial Statements...................................... 33
ARTICLE 21 Hazardous Materials....................................... 34
ARTICLE 22 Waiver.................................................... 36
ARTICLE 23 Notices................................................... 36
ARTICLE 24 Guaranties; Security Deposit.............................. 36
ARTICLE 25 Miscellaneous............................................. 42
ARTICLE 26 Option to Expand the Building............................. 43
1
LEASE
THIS LEASE, made as of the date specified in the Basic Lease Information,
by and between the landlord specified in the Basic Lease Information
("Landlord"), and the tenant specified in the Basic Lease Information
("Tenant"),
W I T N E S S E T H:
ARTICLE 1
Premises
1.1 Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, for the term and subject to the covenants hereinafter set forth, to
all of which Landlord and Tenant hereby agree, the building located at the
address specified in the Basic Lease Information (the "Building") containing
approximately 239,749 rentable square feet of space, and the land on which the
Building is located (such land, together with the Building and the other
improvements thereon are referred to herein, collectively, as the "Premises").
ARTICLE 2
Term
2.1 The term of this Lease shall be the term specified in the Basic Lease
Information, which shall commence on the commencement date specified in the
Basic Lease Information (the "Commencement Date") and, unless sooner terminated
as hereinafter provided, shall end on the expiration date specified in the Basic
Lease Information (the "Expiration Date").
2.2 If the Commencement Date is not the first day of a calendar month,
Tenant shall pay to Landlord, as additional rent, the Base Rent payable under
section 3.1, calculated on a per diem basis, for the period from the
Commencement Date until the first day of the next full calendar month. Tenant
shall pay the Base Rent in respect of such period to Landlord on the
Commencement Date.
2.3 Tenant shall accept the Premises "as is" on the Commencement Date.
Landlord shall have no obligation to construct or install any improvements in
the Premises. Tenant acknowledges that, prior to the Commencement Date, Tenant
occupied the Premises. Tenant's possession of the Premises shall constitute
Tenant's acknowledgment that the Premises are in all respects in the condition
in which Landlord is required to deliver the Premises to Tenant under this Lease
and that Tenant has examined the Premises and is fully informed to Tenant's
satisfaction of the physical and environmental condition and the utility of the
Premises. Tenant acknowledges that Landlord, its agents and employees and other
persons acting on behalf of Landlord have made no representation or warranty of
any kind in connection with any matter relating to the physical or environmental
condition, value, fitness, use or zoning of the Premises upon which Tenant has
relied directly or indirectly for any purpose.
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2.4 Provided that Tenant is not in monetary or other material default under
or breach of this Lease, either at the time of exercising the applicable option
to renew described below or at the time such renewal term commences, Tenant
shall have the option to renew this Lease for two (2) additional terms of ten
(10) years each. Tenant shall exercise each option to renew by delivering to
Landlord written notice of Tenant's election to renew the term of this Lease at
least eighteen (18) months before the expiration of the then-existing term of
this Lease. Landlord's failure to receive Tenant's written notice duly electing
to renew the term of this Lease shall be conclusively deemed Tenant's election
not to exercise its option to renew, in which event the term shall expire on the
last day of the then-existing term. If Tenant duly exercises an option to renew,
then Tenant shall continue to occupy the Premises on all of the terms and
conditions of this Lease, except that: (a) the Base Rent payable by Tenant
during the applicable renewal term shall be increased as set forth in section
3.1(a); and (b) after the second renewal term, Tenant shall have no further
renewal options under this Lease. Tenant's rights to extend the term of this
Lease are personal to Tenant, may not be exercised by or be assigned to any
person or entity other than Tenant or a Corporate Successor (as defined in
section 12.1), and shall terminate and be of no further effect upon any
assignment of this Lease or subletting of all or any part of the Premises to any
person or entity.
ARTICLE 3
Rent
3.1 Tenant shall pay to Landlord the following amounts as base monthly rent
for the Premises ("Base Rent"):
(a) During the period between the Commencement Date and the last day of the
twelfth full calendar month thereafter, Tenant shall pay to Landlord the amount
of monthly rent specified in the Basic Lease Information (the "Initial Base
Rent"). Commencing on the first day of the thirteenth full calendar month after
the Commencement Date, and on each anniversary of that date thereafter,
including during all renewal terms (each, an "Adjustment Date"), the Base Rent
shall be increased to an amount equal to the greater of:
(i) the sum of (A) the Base Rent in effect during the month
immediately preceding the Adjustment Date, plus (B) the product of (1) the
Base Rent in effect during the month immediately preceding the Adjustment
Date, multiplied by (2) the lesser of (x) three percent (3.0%), and (y) the
product of two (2), multiplied by the percentage increase in the Consumer
Price Index (as defined below) measured from the last month for which the
Consumer Price Index is published immediately preceding the date twelve
(12) months prior to the Adjustment Date in question to the last month for
which the Consumer Price Index is published immediately preceding the CPI
Adjustment Date in question; and
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(ii) the lesser of (A) the Initial Base Rent increased by three
percent (3%) per year, compounded, from the Commencement Date to the
Adjustment Date in question, and (B) the sum of (1) an amount equal to the
Initial Base Rent, plus (2) the product of (x) an amount equal to the
Initial Base Rent, multiplied by (y) the product of two (2), multiplied by
the percentage increase in the Consumer Price Index measured from the last
month for which the Consumer Price Index is published immediately preceding
the Commencement Date to the last month for which the Consumer Price Index
is published immediately preceding the Adjustment Date in question;
provided, however, that in no event shall the Base Rent after any Adjustment
Date be less than the product of an amount equal to the Base Rent in effect for
the month immediately preceding such Adjustment Date, multiplied by one hundred
one and one-half percent (101.5%).
(b) Landlord and Tenant each shall, promptly after any determination of the
Base Rent pursuant to section 3.1(a), execute and deliver to the other a written
confirmation which sets forth the Base Rent, but such Base Rent shall become
effective whether or not such confirmation is executed.
(c) As used in this Lease, "Consumer Price Index" shall mean the Consumer
Price Index for All Cities, All Urban Consumers, All Items, 1982-1984 equals
100, published by the United States Department of Labor, Bureau of Labor
Statistics. If the comparison Consumer Price Index required for the calculation
specified in section 3.1(a) is not available on the Adjustment Date in question,
Tenant shall to pay, as of such Adjustment Date, one hundred three percent
(103%) of the Base Rent payable during the period immediately preceding such
Adjustment Date until the Consumer Price Index is available and the necessary
calculation is made. As soon as such calculation is made, Tenant shall
immediately pay to Landlord or Landlord shall credit Tenant (as the case may be)
the amount of any underpayment or overpayment of Base Rent for the month or
months that may have elapsed pending the calculation of the Base Rent for the
Adjustment Date in question. If the federal government revises or ceases to
publish the Consumer Price Index, this section 3.1 shall automatically be
amended to provide that, as of each Adjustment Date thereafter, the Base Rent
shall be one hundred three percent (103%) of the Base Rent payable during the
period immediately preceding such Adjustment Date.
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(d) Throughout the term of this Lease, Tenant shall pay, as additional
rent, all Other Taxes (as defined in section 5.3), all Operating Expenses (as
defined in section 5.1) and all other amounts of money and charges required to
be paid by Tenant under this Lease, whether or not such amounts of money or
charges are designated "additional rent." As used in this Lease, "rent" shall
mean and include all Base Rent and additional rent payable by Tenant in
accordance with this Lease.
3.2 It is the intention of Landlord and Tenant that the Base Rent payable
by Tenant to Landlord during the entire term of this Lease shall be absolutely
net of all costs and expenses incurred in connection with the management,
operation, maintenance, repair and replacement of the Premises in accordance
with this Lease, except as expressly provided in section 8.3. Landlord shall
have no obligations or liabilities whatsoever with respect to the costs and
expenses of management, operation, maintenance, repair or replacement of the
Premises during the term of this Lease, except as expressly provided in section
8.3, and Tenant shall pay all costs and expenses incurred in connection
therewith. Without limiting the generality of the foregoing, throughout the
entire term of this Lease, Tenant shall pay, as additional rent, all Operating
Expenses (as defined in section 5.1) that accrue during or are allocable to the
term of this Lease.
3.3 Tenant shall pay all Base Rent to Landlord, in advance, on or before
the first day of each and every calendar month during the term of this Lease.
Tenant shall pay all additional rent upon demand. Tenant shall pay all rent to
Landlord without notice, demand, deduction or offset, in lawful money of the
United States of America, at the address of Landlord specified in the Basic
Lease Information, or to such other person or at such other place as Landlord
may from time to time designate in writing.
3.4 Tenant acknowledges that the late payment by Tenant of any Base Rent or
additional rent (including the items described in section 3.2) will cause
Landlord to incur costs and expenses, the exact amount of which is extremely
difficult and impractical to fix. Such costs and expenses will include
administration and collection costs and processing and accounting expenses.
Therefore, if any Base Rent or additional rent is not received by Landlord
within five (5) Business Days (as defined below) after it is due, Tenant shall
immediately pay to Landlord a late charge equal to six percent (6%) of such
delinquent amount. The term "Business Days" means any day other than Saturdays,
Sundays and days on which national banks are permitted to be closed in
accordance with Federal banking laws and regulations. Landlord and Tenant agree
that such late charge represents a reasonable estimate of such costs and
expenses and is fair compensation to Landlord for the loss suffered by Tenant's
failure to make timely payment. In no event shall such late charge be deemed to
grant to Tenant a grace period or extension of time within which to pay any rent
or prevent Landlord from exercising any right or enforcing any remedy available
to Landlord upon Tenant's failure to pay all rent due under this Lease in a
timely fashion, including the right to terminate this Lease. All amounts of
money payable by Tenant to Landlord hereunder, if not paid when due, shall bear
interest from the due date until paid at a rate (the "Interest Rate") per annum
equal to five (5) percentage points plus the prime or reference rate announced
from time to time by Bank of America N.T.&S.A. (the "Reference Rate"), provided
that the Interest Rate shall at no time exceed twelve percent (12%) per annum.
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ARTICLE 4
Payment of Operating Expenses
4.1(a) In addition to the Base Rent payable during the term of this Lease,
Tenant shall pay to Landlord, as additional rent, an amount equal to the
Operating Expenses paid or incurred by Landlord in any calendar year (or partial
year) during the term of this Lease. If it shall not be lawful for Tenant to
reimburse Landlord for any Operating Expenses, as defined herein, the Base Rent
payable to Landlord shall be increased to net Landlord the same net Base Rent
after payment of such Operating Expenses as would have been received by Landlord
prior to the payment of such Operating Expenses.
(b) During December of each calendar year or as soon thereafter as
practicable, Landlord shall give Tenant notice of its estimate of the amounts
payable pursuant to section 4.1(a) above for the succeeding calendar year. On or
before the first day of each month during the succeeding calendar year, Tenant
shall pay to Landlord, as additional rent, one twelfth (1/12) of such estimated
amounts. If Landlord fails to deliver such notice to Tenant in December, Tenant
shall continue to pay Operating Expenses on the basis of the prior year's
estimate until the first day of the next calendar month after such notice is
given, provided that on such date Tenant shall pay to Landlord the amount of
such estimated adjustment payable to Landlord for prior months during the year
in question, less any portion thereof previously paid by Tenant. If at any time
it appears to Landlord that the amounts payable under this section 4.1(b) for
the current calendar year will vary from Landlord's estimate, Landlord may, by
giving written notice to Tenant, revise Landlord's estimate for such year, and
subsequent payments by Tenant for such year shall be based on such revised
estimate.
(c)(i) Within ninety (90) days after the close of each calendar year or as
soon after such ninety (90) day period as practicable, Landlord shall deliver to
Tenant a statement of the amounts payable under section 4.1(a) above for such
calendar year (the "annual statement") and such statement shall be final and
binding upon Landlord and Tenant, subject to the terms of section 4.1(c)(ii). If
on the basis of such statement Tenant owes an amount that is more than the
estimated payments for such calendar year previously made by Tenant, Tenant
shall pay the deficiency to Landlord within fifteen (15) days after delivery of
the statement. If on the basis of such statement Tenant has paid to Landlord an
amount in excess of the amounts payable under section 4.1(a) above for the
preceding calendar year and Tenant is not in default in the performance of any
of its covenants under this Lease, then Landlord, at its option, shall either
promptly refund such excess to Tenant or credit the amount thereof to the Base
Rent next becoming due from Tenant until such credit has been exhausted.
6
(ii) Tenant shall have the right, during the one hundred eighty (180) day
period following delivery of an annual statement, at Tenant's sole cost to
review in Landlord's offices Landlord's records of Operating Expenses and Real
Property Taxes for the subject calendar year. Such review shall be carried out
only by regular employees of Tenant or by a "Big Six" accounting firm and not by
any other third party. No person conducting such an audit shall be compensated
on a "contingency" or other incentive basis. If, as of the one hundred eightieth
day after delivery to Tenant of an annual statement, Tenant shall not have
delivered to Landlord an objection statement (as defined below), then such
annual statement shall be final and binding upon Landlord and Tenant, and Tenant
shall have no further right to object to such annual statement. If within such
one hundred eighty (180) day period, Tenant delivers to Landlord a written
statement specifying objections to such annual statement (an "objection
statement"), then Tenant and Landlord shall meet to attempt to resolve such
objection within thirty (30) days after delivery of the objection statement. If
such objection is not resolved within such thirty (30) day period, then either
party shall have the right to require that the dispute be submitted to binding
arbitration under the rules of the American Arbitration Association.
Notwithstanding that any such dispute remains unresolved, Tenant shall be
obligated to pay Landlord all amounts payable in accordance with this section
4.1 (including any disputed amount). If such dispute results in an agreement or
an arbitrator's determination that Tenant is entitled to a refund, Landlord
shall, at its option, either pay such refund or credit the amount thereof to the
Base Rent next becoming due from Tenant.
(d) If this Lease terminates on a day other than the last day of a calendar
year, the amounts payable by Tenant under section 4.1(a) above with respect to
the calendar year in which such termination occurs shall be prorated on the
basis which the number of days from the commencement of such calendar year, to
and including such termination date, bears to 360. The termination of this Lease
shall not affect the obligations of Landlord and Tenant pursuant to section
4.1(c) above to be performed after such termination.
7
ARTICLE 5
Operating Expenses, Property Taxes and
Other Taxes Defined; Contest Rights
5.1 "Operating Expenses" shall mean the total costs and expenses incurred
by Landlord in connection with the management, operation, maintenance, repair
and ownership of the Premises, including, without limitation, the following
costs: (a) salaries, wages, bonuses and other compensation (including
hospitalization, medical, surgical, retirement plan, pension plan, union dues,
life insurance, including group life insurance, welfare and other fringe
benefits, and vacation, holidays and other paid absence benefits) relating to
employees of Landlord or its agents engaged in the management, operation,
repair, or maintenance of the Premises and costs of training such employees; (b)
payroll, social security, workers' compensation, unemployment and similar taxes
with respect to such employees of Landlord or its agents, and the cost of
providing disability or other benefits imposed by law or otherwise, with respect
to such employees; (c) Property Taxes and Other Taxes (as such terms are defined
below); (d) premiums and other charges incurred by Landlord with respect to
fire, other casualty, boiler and machinery, theft, rent interruption and
liability insurance and any other insurance as is deemed necessary or advisable
in the reasonable judgment of Landlord, all in such amounts as Landlord
determines to be appropriate, and costs of repairing an insured casualty to the
extent of the deductible amount under the applicable insurance policy; (e) water
charges and sewer rents or fees; (f) license, permit and inspection fees and
charges; (g) sales, use and excise taxes on goods and services purchased by
Landlord in connection with the operation, maintenance or repair of the Premises
and building systems and equipment; (h) telephone, telegraph, postage,
stationery supplies and other expenses incurred in connection with the
operation, maintenance, or repair of the Premises; (i) reasonable management
fees and expenses (including fees and expenses for accounting, financial
management, data processing and information services); (j) repairs to and
physical maintenance of the Premises, including building systems and
appurtenances thereto and normal repair and replacement of worn-out equipment,
facilities and installations, but excluding the replacement of major building
systems (except to the extent otherwise included as an Operating Expense
pursuant to this section 5.1); (k) janitorial, window cleaning, guard,
extermination, water treatment, rubbish removal, plumbing and other services and
inspection or service contracts for elevator, electrical, mechanical, sanitary,
heating, ventilation and air conditioning, and other building equipment and
systems or as may otherwise be necessary or proper for the operation or
maintenance of the Premises; (l) supplies, tools, materials and equipment used
in connection with the operation, maintenance or repair of the Premises; (m)
accounting, legal and other professional, consulting or service fees and
expenses; (n) painting the exterior or the interior areas of the Premises and
the cost of maintaining the sidewalks, landscaping and other outdoor areas of
the Premises; (o) all costs and expenses for electricity, chilled water, air
8
conditioning, water for heating, gas, fuel, steam, heat, lights, sewer service,
communications service, power and other energy related utilities required in
connection with the operation, maintenance and repair of the Premises; (p) the
cost of any capital improvements made by Landlord to the Premises or capital
assets acquired by Landlord required under any governmental law, regulation or
insurance requirement with which the Premises was not required to comply on the
Commencement Date, such cost or allocable portion to be amortized over the
useful life thereof, together with interest on the unamortized balance at a rate
per annum equal to the Reference Rate (as defined in section 3.4 hereof) charged
at the time such capital improvements or capital assets are constructed or
acquired or such higher rate as may have been paid by Landlord on funds borrowed
for the purpose of constructing or acquiring such capital improvements or
capital assets; (q) the cost of any capital improvements made by Landlord to the
Building or capital assets acquired by Landlord for the protection of the health
and safety of the occupants of the Premises (provided that, as to any such
improvements or assets which would be considered unnecessary or unreasonably
expensive by a reasonable owner of a comparable building, Landlord shall first
have obtained Tenant's reasonable approval) or that are designed to reduce other
Operating Expenses, such cost or allocable portion thereof to be amortized over
the useful life thereof (except that Landlord may include as an Operating
Expense in any calendar year a portion of the cost of such a capital improvement
or capital asset equal to Landlord's estimate of the amount of the reduction of
other Operating Expenses in such year resulting from such capital improvement or
capital asset), together with interest on the unamortized balance at a rate per
annum equal to the Reference Rate charged at the time such capital improvements
or capital assets are constructed or acquired or such higher rate as may have
been paid by Landlord on funds borrowed for the purpose of constructing or
acquiring such capital improvements or capital assets; (r) the cost of
furniture, window coverings, carpeting, decorations, landscaping and other
customary and ordinary items of personal property provided by Landlord for use
in common areas of the Premises or in the Building office (to the extent that
such Building office is dedicated to the operation and management of the
Premises), such costs to be amortized over the useful life thereof; (s) the cost
of any capital improvements made by Landlord to the Premises or capital assets
acquired by Landlord to the extent that the cost of any such improvement or
asset is less than fifty thousand dollars ($50,000); (t) the cost of any capital
improvements made by Landlord to the Premises or capital assets acquired by
Landlord after the Base Year which have a useful life of five (5) years or less
(and the cost of which is not otherwise included in Operating Costs pursuant to
this section 5.1), such cost to be amortized over the useful life thereof,
together with interest on the unamortized balance at a rate per annum equal to
the Reference Rate charged at the time such capital improvements or capital
assets are constructed or acquired or such higher rate as may have been paid by
Landlord on funds borrowed for the purpose of constructing or acquiring such
capital improvements or capital assets; (u) any such expenses and costs
9
resulting from substitution of work, labor, material or services in lieu of any
of the above itemizations, or for any such additional work, labor, services or
material resulting from compliance with any governmental laws, rules,
regulations or orders applicable to the Premises or any part thereof; (v)
property management office rent or rental value; (w) cost of operation, repair
and maintenance of the parking areas on the Premises, including resurfacing,
restriping and cleaning; and (x) appropriate reserves to provide for
maintenance, repair and replacement of improvements (specifically including
roofs, structural components and building systems), fixtures, equipment and
personal property, as determined by Landlord consistent with prudent accounting
practices.
To the extent costs and expenses described above relate to both the
Premises and other property, such costs and expenses shall, in determining the
amount of Operating Expenses, be allocated as Landlord may reasonably determine
to be appropriate.
Prior to the beginning of each calendar year during the term of this Lease,
or as soon thereafter as practicable, Landlord shall deliver to Tenant an
operating and capital budget for such year setting forth the estimated Operating
Expenses. The operating and capital budget shall be consistent with reasonable
and prudent property management practices.
Operating Expenses shall not include the following: (i) depreciation on the
Building; (ii) debt service; (iii) rental under any ground or underlying lease;
(iv) interest (except as expressly provided in this section 5.1); (v) attorneys'
fees and expenses incurred in connection with lease negotiations with
prospective tenants; (vi) the cost of any improvements or equipment (except to
the extent such costs are included in amounts payable by Tenant as reserves as
set forth in clause (x) above) which would be properly classified as capital
expenditures (except for any capital expenditures expressly included in
Operating Expenses pursuant to this section 5.1); (vii) advertising expenses
relating to vacant space; or (viii) real estate brokers' or other leasing
commissions.
Landlord may, but shall not be obligated to, cause some or all of its
duties under this agreement to be performed by a property management company on
such terms as Landlord may deem appropriate. The property management company
shall be subject to the approval of Tenant, which approval shall not be
unreasonably withheld.
5.2 "Property Taxes" shall mean all taxes, assessments, excises, levies,
fees and charges (and any tax, assessment, excise, levy, fee or charge levied
wholly or partly in lieu thereof or as a substitute therefor or as an addition
thereto) of every kind and description, general or special, ordinary or
extraordinary, foreseen or unforeseen, secured or unsecured, whether or not now
customary or within the contemplation of Landlord and Tenant, that are levied,
assessed, charged, confirmed or imposed by any public or government authority on
or against, or otherwise with respect to, the Premises or any part thereof or
any personal property used in connection with the Premises. Property Taxes shall
not include net income (measured by the income of Landlord from all sources or
from sources other than solely rent), franchise, inheritance or capital stock
taxes of Landlord, unless levied or assessed against Landlord in whole or in
part in lieu of, as a substitute for, or as an addition to any Property Taxes.
10
5.3 "Other Taxes" shall mean all taxes, assessments, excises, levies,
owner's association dues or similar charges, fees and charges, including all
payments related to the cost of providing facilities or services, whether or not
now customary or within the contemplation of Landlord and Tenant, that are
levied, assessed, charged, confirmed or imposed by any public or government
authority upon, or measured by, or reasonably attributable to (a) the Premises,
(b) the cost or value of Tenant's equipment, furniture, fixtures and other
personal property located in the Premises or the cost or value of any leasehold
improvements made in or to the Premises by or for Tenant, regardless of whether
title to such improvements is vested in Tenant or Landlord, (c) any rent payable
under this Lease, including any gross receipts tax or excise tax levied by any
public or government authority with respect to the receipt of any such rent, (d)
the possession, leasing, operation, management, maintenance, alteration, repair,
replacement, use or occupancy by Tenant of the Premises, or (e) this transaction
or any document to which Tenant is a party creating or transferring an interest
or an estate in the Premises. Other Taxes shall not include net income taxes
(measured by the income of Landlord from all sources or from sources other than
solely rent), franchise, inheritance or capital stock taxes of Landlord, unless
levied or assessed against Landlord in whole or in part in lieu of, as a
substitute for, or as an addition to any Other Taxes.
5.4 In the event that Tenant reasonably and in good faith disputes the
validity or amount of any Property Taxes or Other Taxes, then Tenant shall have
the right to defer payment thereof, provided that (a) Tenant shall have given
Landlord written notice of such contest and the nature thereof and Tenant shall
thereafter diligently and continuously prosecute such contest to completion or
compromise, (b) no such deferral of payment shall result in any fines or
penalties being assessed against Tenant, Landlord or the Premises or any lien
foreclosure rights against the Premises being commenced, (c) Tenant shall
promptly pay any amounts (including any interest, fines or penalties) finally
determined to be owing, and (d) at Landlord's reasonable request, Tenant shall
provide such bond or other security as may be necessary to protect Landlord and
the Premises against any loss or liability.
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ARTICLE 6
Use
6.1 The Premises shall be used only for the purpose specified in the Basic
Lease Information and no other purpose without Landlord's prior written consent,
which consent shall not be unreasonably withheld or delayed; provided, however,
Landlord's withholding of consent shall be conclusively presumed reasonable if
the proposed use would materially increase the wear and tear on or the risk of
damage to the Premises above levels or risks resulting from Tenant's use of the
Premises exclusively for office purposes or if the proposed use is for an
illegal, immoral or disreputable purpose; and provided, further, that only the
Tenant originally named herein, and no subtenant, assignee or other successor to
such original Tenant, shall have the right to use the Premises or any part
thereof for any purpose other than office use. Notwithstanding anything to the
contrary in the Basic Lease Information, (a) Tenant's right to use the Premises
or any part thereof for any use other than general office use (whether or not
such other use is listed in the Basic Lease Information) is subject to the
following conditions: (i) such ancillary (non-office) uses shall be limited to
areas comprising less than thirty percent (30%) of the total rentable square
footage of the building in the aggregate, and (ii) all such uses shall be
consistent with Tenant's obligations under Articles 11 and 21 hereof; and (b)
any subtenant or assignee of the original Tenant named herein shall use the
Premises exclusively for office purposes and no other use shall be permitted,
except that the original Tenant named herein may sublease the portions of the
Premises to be used as an employee cafeteria or child care center to the
operators of those facilities. Tenant shall not do or permit to be done in, on
or about the Premises, nor bring or keep or permit to be brought or kept
therein, anything which is prohibited by or will in any way conflict with any
law, ordinance, rule, regulation or order now in force or which may hereafter be
enacted, or which is prohibited by any insurance policy for the Premises, or
will in any way increase the existing rate of, or cause a cancellation of, or
affect any insurance for the Premises. Tenant shall not do or permit anything to
be done in, on or about the Premises which will in any way obstruct or interfere
with the rights of Landlord. Tenant shall not maintain or permit any nuisance
in, on or about the Premises or commit or suffer to be committed any waste in,
on or about the Premises.
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ARTICLE 7
Services
7.1 Landlord shall, at Tenant's sole cost and expense, supply the Premises
with electricity, heating, ventilating and air conditioning, water, natural gas,
lighting replacement for all lights, restroom supplies, telephone service,
window washing, security service, janitor, scavenger and disposal services, and
such other services as Landlord determines to furnish to the Premises. Landlord
shall not be in default hereunder or be liable for any damage or loss directly
or indirectly resulting from, nor shall the rent be abated or a constructive or
other eviction be deemed to have occurred by reason of, the installation, use or
interruption of use of any equipment in connection with the furnishing of any of
the foregoing services, any failure to furnish or delay in furnishing any such
services, whether such failure or delay is caused by accident or any condition
beyond the control of Landlord or Tenant or by the making of repairs or
improvements to the Premises, or any limitation, curtailment, rationing or
restriction on use of water, electricity, gas or any form of energy serving the
Premises, whether such results from mandatory governmental restriction or
voluntary compliance with governmental guidelines. Tenant shall pay the full
cost of all of the foregoing services as additional rent in accordance with
Article 4.
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ARTICLE 8
Maintenance and Repairs; Capital Improvements
8.1 Landlord shall, at all times during the term of this Lease and at
Tenant's sole cost and expense (except as otherwise provided in section 8.3),
maintain, repair and replace the Premises and every part thereof and all
grounds, landscaping, parking areas, lighting, roof, walls, floors, foundations,
signs, heating, ventilating and air conditioning, mechanical, electrical,
plumbing, sprinkler and life safety systems, equipment, fixtures, alterations,
additions and improvements therein or thereon and keep all of the foregoing
clean and in good order and operating condition (including painting the exterior
of the Premises as often as reasonably needed to keep such exterior in a good,
well painted condition, cleaning interior and exterior doors, windows and glass,
and repairing and replacing any exterior windows and glass that is broken,
cracked or damaged). Landlord shall engage a duly licensed independent
contractor to perform all maintenance and repair services on all heating,
ventilating and air conditioning, mechanical, electrical, plumbing, sprinkler
and life safety systems and equipment in the Premises that is to be performed by
Landlord in accordance with this section 8.1. Tenant hereby waives all rights to
make repairs at the expense of Landlord or in lieu thereof to vacate the
Premises. Subject to section 9.2, Tenant shall, at the end of the term of this
Lease, surrender to Landlord the Premises and all alterations, additions,
fixtures and improvements therein or thereto in the same condition as when
received, ordinary wear and tear and damage thereto by fire or other casualty
excepted.
8.2 In the event Landlord fails to perform any maintenance and repair
obligation under section 8.1 within fifteen (15) days after Tenant delivers to
Landlord notice specifying such obligation (or such longer period as may be
reasonably required due to the nature of such obligation), then Tenant may, upon
a further ten (10) days' notice to Landlord, perform at Tenant's own expense
such obligation (unless Landlord cures its nonperformance within such 10-day
period). Notwithstanding the foregoing, in the event that (a) maintenance or
repairs are, in Tenant's reasonable judgment, urgently required to avoid
material disruption of or interference with the operation of Tenant's business
on the Premises or to avoid imminent danger to health or safety, and (b)
Landlord, having received notice thereof, does not, in Tenant's reasonable
judgment, commence with appropriate promptness and pursue with appropriate
diligence the required maintenance or repairs, then Tenant may perform such
maintenance or repairs without waiting for the time periods set forth in the
preceding sentence.
8.3 To the extent included within the definition of "Operating Expenses" in
section 5.1, the costs incurred by Landlord in performing its obligations under
section 8.1 shall be recoverable from Tenant pursuant to Article 4. To the
extent such costs are excluded from the definition of "Operating Expenses," such
costs shall be Landlord's responsibility, subject to Landlord's right to collect
reserves for anticipated capital repairs, improvements and replacements in
accordance with the definition of "Operating Expenses". In the event that the
cost of any such capital repairs, improvements or replacements exceeds the
amount that Landlord has specified to be reserved therefor, Landlord shall bear
such cost to the extent of such excess.
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ARTICLE 9
Alterations
9.1 Tenant shall not make any alterations, additions or improvements in or
to the Premises or any part thereof, or attach any fixtures or equipment
thereto, without Landlord's prior written consent, which consent shall not be
unreasonably withheld. Notwithstanding the preceding sentence, Tenant may make
such alterations, additions or improvements without Landlord's consent only if
the total cost of such alterations, additions or improvements is fifty thousand
dollars ($50,000) or less and such alterations, additions or improvements will
not affect in any way the structural, exterior or roof elements of the Premises
or mechanical, electrical, plumbing, utility or life safety systems of the
Premises, but Tenant shall give prior written notice of any such alterations,
additions or improvements to Landlord. In no event shall Tenant be permitted to
install underground storage tanks (excepting a single 20,000 gallon water tank)
or fuel systems on the Premises. Landlord's refusal to consent to the
installation of an underground tank or fuel system shall be conclusively
presumed to be reasonable. All alterations, additions and improvements in or to
the Premises to which Landlord consents shall be made by Tenant at Tenant's sole
cost and expense as follows:
(a) Tenant shall submit to Landlord, for Landlord's written approval,
complete plans and specifications for all work to be done by Tenant. Such plans
and specifications shall be prepared by the licensed architect(s) and
engineer(s), shall comply with all applicable codes, laws, ordinances, rules and
regulations, shall not adversely affect the structural elements of the Premises,
shall be in a form sufficient to secure the approval of all government
authorities with jurisdiction over the Premises, and shall be otherwise
satisfactory to Landlord in Landlord's reasonable discretion.
(b) Landlord shall notify Tenant in writing, within fifteen (15) Business
Days after Landlord's receipt of such plans and specifications, whether Landlord
approves or disapproves such plans and specifications and, if Landlord
disapproves such plans and specifications, Landlord shall describe the reasons
for disapproval. Tenant may submit to Landlord revised plans and specifications
for Landlord's prior written approval. Tenant shall pay all costs, including the
fees and expenses of the licensed architect(s) and engineer(s), in preparing
such plans and specifications.
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(c) All changes in the plans and specifications approved by Landlord shall
be subject to Landlord's prior written approval. If Tenant wishes to make any
such change in such approved plans and specifications, Tenant shall have such
architect(s) and engineer(s) prepare plans and specifications for such change
and submit them to Landlord for Landlord's written approval. Landlord shall
notify Tenant in writing promptly whether Landlord approves or disapproves such
change and, if Landlord disapproves such change, Landlord shall describe the
reasons for disapproval. Tenant may submit to Landlord revised plans and
specifications for such change for Landlord's written approval. After Landlord's
written approval of such change, such change shall become part of the plans and
specifications approved by Landlord.
(d) Tenant shall obtain and comply with all building permits and other
governmental permits and approvals required in connection with the work. Tenant
shall, through Tenant's licensed contractor, perform the work substantially in
accordance with (i) the plans and specifications approved in writing by
Landlord, (ii) the permits obtained by Tenant, and (iii) all applicable codes,
laws, ordinances, rules and regulations. Tenant shall pay, as additional rent,
the entire cost of all work (including the cost of all utilities, permits, fees,
taxes, and property and liability insurance premiums in connection therewith)
required to make the alterations, additions and improvements. Under no
circumstances shall Landlord be liable to Tenant for any damage, loss, cost or
expense incurred by Tenant on account of any plans and specifications,
contractors or subcontractors, design of any work, construction of any work, or
delay in completion of any work.
(e) Tenant shall give written notice to Landlord of the date on which
construction of any work will be commenced at least ten (10) days prior to such
date. Tenant shall keep the Premises free from mechanics', materialmen's and all
other liens arising out of any work performed, labor supplied, materials
furnished or other obligations incurred by Tenant. Tenant shall promptly and
fully pay and discharge all claims on which any such lien could be based or, in
the event Tenant reasonably disputes the validity or amount of any such claim,
Tenant may bond over such lien to Landlord's reasonable satisfaction. 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 and the Premises from such liens, and to take any other
action Landlord deems necessary to remove or discharge liens or encumbrances at
the expense of Tenant.
9.2 All alterations, additions, fixtures and improvements, whether
temporary or permanent in character, made in or to the Premises by Landlord or
Tenant, shall become part of the Premises and Landlord's property excluding,
however, underground tanks which shall remain the property of Tenant and shall
be registered in the name of Tenant so long as this Lease remains in effect.
Upon termination of this Lease, Landlord shall have the right, at Landlord's
option, by giving written notice to Tenant at any time before or within ten (10)
days after such termination, to retain all such alterations, additions, fixtures
and improvements in the Premises, without compensation to Tenant, or to remove
all such alterations, additions, fixtures and improvements from the Premises,
repair all damage caused by any such removal, and restore the Premises to the
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condition in which the Premises existed before such alterations, additions,
fixtures and improvements were made, and in the latter case Tenant shall pay to
Landlord, upon billing by Landlord, the cost of such removal, repair and
restoration (including a reasonable charge for Landlord's oversight and
administration of such work). Notwithstanding the foregoing, all movable
furniture, equipment, trade fixtures (including the video screen walls, visual
systems, projectors and related equipment in Tenant's service reliability
center) and other personal property shall remain the property of Tenant. Upon
termination of this Lease, Tenant shall, at Tenant's expense, remove all such
movable furniture, equipment, trade fixtures other personal property from the
Premises and repair all damage caused by any such removal. Termination of this
Lease shall not affect the obligations of Tenant pursuant to this section 9.2 to
be performed after such termination.
ARTICLE 10
Insurance
10.1 Landlord shall not be liable to Tenant for any damage to or loss or
theft of any property or for any bodily or personal injury, illness or death of
any person in, on or about the Premises arising at any time and from any cause
whatsoever, except to the extent caused by the gross negligence or willful
misconduct of Landlord. Tenant waives all claims against Landlord arising from
any liability described in this section 10.1, except to the extent caused by the
gross negligence or willful misconduct of Landlord.
10.2 Tenant shall indemnify and defend Landlord against and hold Landlord
harmless from all claims, demands, liabilities, damages, losses, costs and
expenses, including reasonable attorneys' fees and disbursements, arising from
or related to any use or occupancy of the Premises, or any condition of the
Premises, or any default in the performance of Tenant's obligations, or any
damage to any property (including property of employees and invitees of Tenant)
or any bodily or personal injury, illness or death of any person (including
employees and invitees of Tenant) occurring in, on or about the Premises or any
part thereof or any part of the building or the land containing the Premises
arising at any time and from any cause whatsoever (except to the extent caused
by the gross negligence or willful misconduct of Landlord) or occurring outside
the Premises when such damage, bodily or personal injury, illness or death is
caused by any act or omission of Tenant or its agents, officers, employees,
contractors, invitees or licensees. This section 10.2 shall survive the
termination of this Lease with respect to any damage, bodily or personal injury,
illness or death occurring prior to such termination.
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10.3 Tenant shall, at all times during the term of this Lease and at
Tenant's sole cost and expense, obtain and keep in force commercial general
liability insurance, including contractual liability (specifically covering this
Lease), cross liability, fire legal liability, and premises operations, all on
an "occurrence" policy form, with a minimum combined single limit in the amount
specified in the Basic Lease Information per occurrence for bodily or personal
injury to, illness of, or death of persons and damage to property occurring in,
on or about the Premises, such insurance shall name the Landlord and any other
parties designated by Landlord, or any other party with an insurable interest,
as additional insureds. Tenant shall, at Tenant's sole cost and expense, be
responsible for insuring Tenant's furniture, equipment, fixtures, computers,
office machines and personal property.
10.4 Tenant shall, at all times during the term of this Lease and at
Tenant's sole cost and expense, obtain and keep in force worker's compensation
and employer's liability insurance in all states in which the Premises and any
other operations of the Tenant are located and any other state in which the
Tenant or its contractors or subcontractors may be subject to any statutory or
other liability arising in any manner whatsoever out of the actual or alleged
employment of others. The total limits of the employer's liability coverage
required hereunder shall not be less than the amounts specified in section 10.3.
10.5 The insuring party for property insurance specified in the Basic Lease
Information shall, at all times during the term of this Lease, at such party's
sole cost and expense, obtain and keep in force (a) insurance against loss or
damage to the Premises by fire and all other risks of physical loss covered by
insurance of the type now known as "all risk," with difference in conditions
coverage, in an amount not less than the full replacement cost of the Premises
(without deduction for depreciation), including the cost of debris removal, and
such endorsements as Landlord may reasonably require, including the "Replacement
Cost Endorsement"; (b) boiler and machinery insurance covering pressure vessels,
air tanks, boilers, machinery, pressure piping, heating, ventilation and air
conditioning equipment, and elevator and escalator equipment, provided the
Premises contain equipment of such nature and insurance against loss of
occupancy or use arising from any breakdown of any such items, in such amounts
as Landlord may reasonably determine; and (c) plate glass insurance in such
amounts as Landlord may reasonably determine if the Premises contain plate
glass. In addition to the insurance specifically described above, Tenant shall
obtain and keep in force such other insurance (or the above-described insurance
at increased limits) as Landlord may reasonably require from time to time.
10.6 All insurance required to be maintained by Tenant under this Article
10 and all renewals thereof shall be issued by good and responsible companies
qualified to do and doing business in the state where the Premises are located
and having a rating in Best's Insurance Guide of at least A-XI. All deductible
amounts under each such insurance policy shall be subject to Landlord's prior
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written approval. Each policy to be maintained by Tenant shall expressly provide
that the policy shall not be canceled or altered without sixty (60) days' prior
written notice to Landlord and shall remain in effect notwithstanding any such
cancellation or alteration until such notice shall have been given to Landlord
and such period of sixty (60) days shall have expired. All insurance under this
Article 10 to be maintained by Tenant shall name Landlord and any other parties
designated by Landlord, or any other party with an insurable interest, as an
additional insured or loss payee, shall be primary and noncontributing with any
insurance which may be carried by Landlord, shall afford coverage for all claims
based on any act, omission, event or condition that occurred or arose (or the
onset of which occurred or arose) during the policy period, and shall expressly
provide that Landlord, although named as an additional insured, shall
nevertheless be entitled to recover under the policy for any loss, injury or
damage to Landlord. Upon the issuance of each such policy to be maintained by
Tenant, Tenant shall deliver each such policy or a certified copy and a
certificate thereof to Landlord for retention by Landlord. If Tenant fails to
insure or fails to furnish to Landlord upon notice to do so any policy to be
maintained by Tenant or certified copy and certificate thereof as required,
Landlord shall have the right from time to time to effect such insurance for the
benefit of Tenant or Landlord or both of them and all premiums paid by Landlord
shall be payable by Tenant as additional rent on demand. Tenant shall pay to
Landlord, immediately upon demand all costs incurred by Landlord as a result of
Tenant's failure to obtain and maintain in effect the policies of insurance
required under this Article 10.
10.7 Tenant waives on behalf of all insurers under all policies of
property, liability and other insurance (excluding workers' compensation) now or
hereafter carried by Tenant insuring or covering the Premises, or any portion or
any contents thereof, or any operations therein, all rights of subrogation which
any insurer might otherwise, if at all, have to any claims of Tenant against
Landlord. Landlord waives on behalf of all insurers under all policies of
property, liability and other insurance (excluding workers' compensation) now or
hereafter carried by Landlord insuring or covering the Premises or any portion
or any contents thereof, or any operations therein, all rights of subrogation
which any insurer might otherwise, if at all, have to any claims of Landlord
against Tenant. Tenant shall, prior to or immediately after the date of this
Lease, procure from each of the insurers under all policies of property,
liability and other insurance (excluding workers' compensation) now or hereafter
carried by Tenant insuring or covering the Premises, or any portion or any
contents thereof, or any operations therein, a waiver of all rights of
subrogation which the insurer might otherwise, if at all, have to any claims of
Tenant against Landlord as required by this section 10.6.
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ARTICLE 11
Compliance With Legal Requirements
11.1 Tenant shall, at Tenant's sole cost and expense, promptly comply with
all of the following (collectively, "Legal Requirements") laws, ordinances,
rules, regulations, orders and other requirements of any government or public
authority now in force or which may hereafter be in force, with all requirements
of any board of fire underwriters or other similar body now or hereafter
constituted, with all directions and certificates of occupancy issued pursuant
to any law by any governmental agency or officer and with all recorded
covenants, conditions or restrictions, insofar as any thereof relate to or are
required by the condition, use or occupancy of the Premises or the operation,
use or maintenance of any personal property, fixtures, machinery, equipment or
improvements in the Premises. Tenant's obligations under this section 11.1 shall
include the obligation to make alterations or improvements to the Premises if
required to comply with any Legal Requirements.
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ARTICLE 12
Assignment or Sublease
12.1 Tenant shall not, directly or indirectly, without the prior written
consent of Landlord (which consent shall not be unreasonably withheld), assign
this Lease or any interest herein or sublease the Premises or any part thereof,
or permit the use or occupancy of the Premises by any person or entity other
than Tenant; provided, however, Landlord's withholding of consent shall be
conclusively presumed reasonable if: (a) the financial condition of the proposed
transferee is not suitable to perform the obligations being assumed by it
hereunder; or (b) the proposed use of the Premises (i) is not permitted
hereunder or under any Legal Requirements, or (ii) is other than office use
(except in the case of a sublease of the portions of the Premises to be used for
an employee cafeteria and child care center to the operators of those
facilities). This Lease shall not, nor shall any interest herein, be assignable
as to the interest of Tenant involuntarily or by operation of law without the
prior written consent of Landlord. Any of the foregoing acts without such prior
written consent of Landlord shall be void and shall, at the option of Landlord,
constitute a default that entitles Landlord to terminate this Lease.
Notwithstanding the foregoing, Landlord hereby consents to any sublease or
assignment to any direct or indirect wholly-owned subsidiary of either Tenant or
ICG Communications, Inc., a Delaware corporation or to any surviving corporation
resulting from a merger with Tenant, or to any corporation as part of the
acquisition of all or substantially all of the assets and business of Tenant
(collectively, a "Corporate Successor"), provided such sublease or assignment
otherwise complies with this Article 12, and provided further that Landlord does
not approve any such sublease or assignment in connection with a merger or
acquisition if the net worth or creditworthiness of such subtenant or assignee
is, in Landlord's reasonable judgment, less than that of Tenant prior to such
merger or acquisition transaction. Tenant agrees that the instrument by which
any assignment or sublease to which Landlord consents is accomplished shall
expressly provide that the assignee or subtenant will perform all of the
covenants to be performed by Tenant under this Lease (in the case of a sublease,
only insofar as such covenants relate to the portion of the Premises subject to
such sublease) as and when performance is due after the effective date of the
assignment or sublease and that Landlord will have the right to enforce such
covenants directly against such assignee or subtenant. Any purported assignment
or sublease without an instrument containing the foregoing provisions shall be
void. Tenant shall in all cases remain liable for the performance by any
assignee or subtenant of all such covenants.
12.2 If Landlord consents in writing, Tenant may complete the intended
assignment or sublease subject to the following covenants: (a) no assignment or
sublease shall be valid and no assignee or subtenant shall take possession of
the Premises or any part thereof until an executed duplicate original of such
assignment or sublease, in compliance with section 12.1, has been delivered to
Landlord, (b) no assignee or subtenant shall have a right further to assign or
sublease.
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12.3 No assignment or sublease whatsoever shall release Tenant from
Tenant's obligations and liabilities under this Lease or alter the primary
liability of Tenant to pay all rent and to perform all obligations to be paid
and performed by Tenant. The acceptance of rent by Landlord from any other
person or entity shall not be deemed to be a waiver by Landlord of any provision
of this Lease. Consent to one assignment or sublease shall not be deemed consent
to any subsequent assignment or sublease. If any assignee, subtenant or
successor of Tenant defaults in the performance of any obligation to be
performed by Tenant under this Lease, Landlord may proceed directly against
Tenant without the necessity of exhausting remedies against such assignee,
subtenant or successor. Landlord may consent to subsequent assignments or
subleases or amendments or modifications to this Lease with assignees,
subtenants or successors of Tenant, without notifying Tenant or any successor of
Tenant and without obtaining any consent thereto from Tenant or any successor of
Tenant, and such action shall not release Tenant from liability under this
Lease.
12.4 Upon Tenant's entering into any agreement to sell or transfer all or
substantially all of its assets (whether or not the assets to be sold or
transferred include this Lease), Tenant shall within three (3) days thereafter
notify Landlord of the essential terms of such agreement. If Tenant sells or
transfers substantially all of its assets but does not expressly assign this
Lease to the transferee, then at Landlord's option, this Lease shall be deemed
to have been assigned to such transferee and such transferee shall be deemed to
have assumed all of Tenant's obligations under this Lease. If such transferee
does not expressly assume such obligations in writing within ten (10) days after
demand delivered to Tenant, the Stipulated Difference (as defined in section
14.2(c)) shall be increased by five million dollars ($5,000,000).
ARTICLE 13
Entry by Landlord
13.1 Landlord shall have the right, upon not less than twenty-four (24)
hours prior notice (except in cases of emergency), to enter the Premises at any
time to (a) inspect the Premises, (b) exhibit the Premises to prospective
purchasers, lenders or (during the last eighteen (18) months of the term)
tenants, (c) determine whether Tenant is performing all of Tenant's obligations,
(d) perform any obligations of Tenant in accordance with section 14.5, (e) post
notices of nonresponsibility in and about the Premises, (f) make any repairs to
the Premises and (g) investigate and perform tests to determine Tenant's
compliance with Article 21. In connection with any such entry, Landlord shall
use reasonable efforts to avoid any unnecessary disruption of or interference
with Tenant's business operation. Tenant waives all claims for damages for any
injury or inconvenience to or interference with Tenant's business, any loss of
occupancy or quiet enjoyment of the Premises or any other loss occasioned by
such entry. If Landlord removes any existing underground tanks and fueling
system from the Premises, Landlord shall have no obligation to replace them or
provide alternate tanks or a fueling system. Landlord shall at all times have a
key to unlock all such doors and Landlord shall have the right to use any and
all means which Landlord may deem proper to open such doors in an emergency to
obtain entry to the Premises. Any entry to the Premises obtained by Landlord by
any of such means shall not under any circumstances be construed or deemed to be
a forcible or unlawful entry into or a detainer of the Premises or an eviction,
actual or constructive, of Tenant from the Premises or any portion thereof.
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ARTICLE 14
Events of Default and Remedies
14.1 The occurrence of any one or more of the following events ("Event of
Default") shall constitute a breach of this Lease by Tenant:
(a) Tenant fails to pay any Base Rent within five (5) days after the date
when such rent becomes due or fails to make the additional deposits to the Draw
Account within the time period set forth in section 24.5; or
(b) Tenant fails to pay any additional rent or other amount of money or
charge payable by Tenant hereunder as and when such additional rent or amount or
charge becomes due and payable and such failure continues for more than ten (10)
Business Days after Landlord gives written notice thereof to Tenant; provided,
however, that after the second such failure in a calendar year, only the passage
of time, but no further notice, shall be required to establish an Event of
Default in the same calendar year; or
(c) Tenant fails to perform or breaches any other agreement or covenant of
this Lease to be performed or observed by Tenant as and when performance or
observance is due and such failure or breach continues for more than ten (10)
Business Days after Landlord gives written notice thereof to Tenant; provided,
however, that if, by the nature of such agreement or covenant, such failure or
breach cannot reasonably be cured within such period of ten (10) Business Days,
an Event of Default shall not exist as long as Tenant commences with due
diligence and dispatch the curing of such failure or breach within a reasonable
period of time after becoming aware of such failure or breach and, having so
commenced, thereafter prosecutes with diligence and dispatch and completes the
curing of such failure or breach within a reasonable time; or
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(d) Tenant or any Guarantor (i) files, or consents by answer or otherwise
to the filing against it of, a petition for relief or reorganization or
arrangement or any other petition in bankruptcy or for liquidation or to take
advantage of any bankruptcy, insolvency or other debtors' relief law of any
jurisdiction, (ii) makes an assignment for the benefit of its creditors, (iii)
consents to the appointment of a custodian, receiver, trustee or other officer
with similar powers of Tenant (or any Guarantors) or of any substantial part of
Tenant's (or any Guarantor's) property, or (iv) takes action for the purpose of
any of the foregoing; or
(e) Without consent by Tenant or a Guarantor (as the case may be), a court
or government authority enters an order, and such order is not vacated within
thirty (30) days, (i) appointing a custodian, receiver, trustee or other officer
with similar powers with respect to Tenant or any Guarantor, or with respect to
any substantial part of Tenant's or any Guarantor's property, or (ii)
constituting an order for relief or approving a petition for relief or
reorganization or arrangement or any other petition in bankruptcy or for
liquidation or to take advantage of any bankruptcy, insolvency or other debtors'
relief law of any jurisdiction, or (iii) ordering the dissolution, winding-up or
liquidation of Tenant or any Guarantor; or
(f) This Lease or any estate of Tenant hereunder is levied upon under any
attachment or execution and such attachment or execution is not vacated within
thirty (30) days; or
(g) Tenant vacates or abandons the Premises; or
(h) Any Lease Guaranty (as defined in section 24.1) ceases to be in full
force and effect; or
(i) Tenant merges or sells or transfers all or substantially all of its
assets (whether or not the assets sold or transferred include this Lease),
unless Landlord consents to such transaction in accordance with section 12.1.
14.2 If an Event of Default occurs, Landlord shall have the right at any
time to give a written termination notice to Tenant and, on the date specified
in such notice, Tenant's right to possession shall terminate and this Lease
shall terminate. Upon such termination, Landlord shall have the right to recover
from Tenant:
(a) The worth at the time of award of all unpaid rent which had been earned
at the time of termination;
(b) The worth at the time of award of the amount by which all unpaid rent
which would have been earned after termination until the time of award exceeds
the amount of such rental loss that Tenant proves could have been reasonably
avoided;
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(c) The worth at the time of award of the amount by which all unpaid rent
for the balance of the term of this Lease after the time of award exceeds the
amount of such rental loss that Tenant proves could be reasonably avoided;
provided that, in the event that, at the time of the termination of this Lease,
the Premises or any substantial portion of the Premises have not been relet, in
lieu of such amount, Landlord shall be entitled to withdraw the balance then
held in the Draw Account and retain such balance as liquidated damages for the
loss of the rents payable under this Lease for the balance of the term of this
Lease, in which event such liquidated damages would be accepted by Landlord in
full satisfaction of all damages suffered by Landlord for the loss of rents that
would have been payable under the Lease with respect to the period after the
date of termination of the Lease. The amount of funds from time to time in the
Draw Account pursuant to this Article 24 (subject to section 12.4) is referred
to herein as the "Stipulated Difference." Tenant and Landlord agree that (a) the
Stipulated Difference is a fair and reasonable estimate of the difference in
value of the Premises if Tenant's covenants and obligations, as tenant under the
Leases, are performed in all material respects and the value of the Premises if
such covenants and obligations are not performed in all material respects, (b)
that the definition of the term "Event of Default" reflects Tenant's and
Landlord's negotiated agreement as to a fair standard for determining whether
such covenants and obligations are being performed in all material respects, and
(c) that such difference in value will not be precisely calculable since it will
involve complex and intangible factors such as reduced salability of the
Premises, reduced creditworthiness of Landlord and harm to Landlord's business
reputation. Said liquidated damages would not be in lieu of or otherwise replace
amounts that Landlord would be entitled to collect under sections 14.2(a), (b)
and (d), and Landlord would be entitled to collect all of the same from Tenant
in addition to the liquidated damages provided for in this section 14.2(c); and
(d) All other amounts necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform all of Tenant's
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom. The "worth at the time of award" of the amounts
referred to in clauses (a) and (b) above shall be computed by allowing interest
at the Interest Rate (as defined in section 3.4). The "worth at the time of
award" of the amount referred to in clause (c) above shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank located
nearest the Premises at the time of award plus one percent (1%). For the purpose
of determining unpaid rent under clauses (a), (b) and (c) above, the rent
reserved in this Lease shall be deemed to be the total rent payable by Tenant
under Articles 3 and 5 hereof.
14.3 If an Event of Default occurs, Landlord may, without terminating this
Lease, terminate Tenant's right to possession of the Premises, in which event:
(a) Landlord may, with or without process of law, retake possession of
the Premises;
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(b) Tenant's obligations under this Lease (including the obligation to
pay rent on the dates specified in this Lease) shall continue unaffected
for the entire term of this Lease or until such earlier time as Landlord
may, at its option, elect to terminate this Lease which Landlord may, at
its option, do at any time;
(c) Without being deemed to have elected to terminate this Lease,
Landlord may relet the Premises in accordance with section 14.4 for the
account of Tenant, in the name of Landlord or in the name of Tenant on such
terms and conditions and to such tenants as Landlord may, in its
discretion, determine. Landlord shall be entitled to remodel and repair the
Premises, to subdivide the Premises, or to combine all or any portion or
portions of the Premises with other premises in any manner which Landlord
shall deem appropriate in order to accomplish such reletting; and Tenant
shall reimburse Landlord, on demand, for all costs and expenses in
connection with such repair or remodeling and reletting ("Reletting
Costs"). Notwithstanding Landlord's recovery of possession and
notwithstanding any reletting, Tenant shall continue to pay all rent
provided for herein as and when it comes due, less the net proceeds
received by Landlord from any reletting; provided that, if the proceeds of
reletting exceed the amount due from Tenant, on or before the 15th day of
each month, Landlord shall refund to Tenant any amount by which the rent
paid by Tenant through such date, when added to the amount, if any,
recovered by Landlord through any reletting of the Premises through such
date, reduced by all Reletting Costs for which Tenant has not paid
Landlord, and reduced by all amounts Landlord has previously refunded to
Tenant under this subsection, and reduced any other amounts Tenant owes
Landlord under this Lease, exceeds the rent due under this Lease through
such date. Tenant shall reimburse Landlord upon demand for all Reletting
Costs and any other costs and expenses which Landlord may incur in
connection with recovery of possession or repair of the Premises;
(d) In the event Landlord proceeds under this section 14.3, Landlord
may at any time terminate this Lease by notice to Tenant. Such termination
shall have the effect specified in section 14.2 and Landlord shall be
entitled to all remedies under section 14.2 upon termination.
14.4 Landlord shall have no duty to attempt to mitigate its damages by
retaking and reletting the Premises; provided that, if Landlord retakes
possession of the Premises under either section 14.2 or section 14.3, Landlord
shall use good faith reasonable efforts to relet the Premises, subject to the
following terms, conditions and limitations:
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(a) Any reletting of the Premises shall be on the terms and conditions
determined by Landlord in its reasonable good faith discretion and to such
tenants as Landlord shall approve in its reasonable good faith discretion.
Without limiting the generality of the foregoing, Tenant acknowledges that,
in reletting the Premises, Landlord may legitimately consider the effect of
any such reletting on the Premises and on any other property owned by
Landlord or any other person or entity controlling, controlled by, or under
common control with Landlord, or otherwise affiliated with Landlord (which
parties are referred to herein collectively as "Landlord Affiliates"), and,
therefore, may decide not to lease the Premises at rates which are lower
than Landlord is otherwise endeavoring to maintain in the Premises, or at
rates which are lower than the rate that Landlord believes to be
appropriate for the Premises.
(b) Tenant recognizes that Landlord and Landlord's Affiliates
currently and in the future may have vacant space in the Premises and other
property and may in the future also have vacant space in new projects in
competition with the Premises. In no event shall Landlord be obligated to
use any effort to relet the Premises in preference to leasing any such
other vacant space then available for leasing by landlord or any of
Landlord's Affiliates. Landlord shall not be deemed to have failed to
mitigate damages solely on account of the leasing of other space which
Landlord or Landlord's Affiliates have available instead of the reletting
of the Premises.
14.5 Whether or not Landlord elects to terminate this Lease on account of
any Event of Default by Tenant, and subject to Landlord's duty to attempt to
mitigate its damages as provided herein, Landlord shall have the right to
terminate any and all subleases, licenses, concessions or other consensual
arrangements for possession entered into by Tenant and affecting the Premises or
may, in Landlord's sole discretion, succeed to Tenant's interest in such
sublease, licenses, concessions or arrangements. In the event of Landlord's
election to succeed to Tenant's interest in any such subleases, licenses,
concessions or arrangements, Tenant shall, as of the date of notice by Landlord
of such election, have no further right to or interest in the rent or other
consideration receivable thereunder, except that amounts actually received by
Landlord thereunder shall be credited against any amounts payable by Tenant
hereunder.
14.6 Except as otherwise provided in section 14.2(c), the remedies provided
for in this Lease are in addition to all other remedies available to Landlord at
law or in equity by statute or otherwise.
14.7 All agreements and covenants to be performed or observed by Tenant
under this Lease shall be at Tenant's sole cost and expense and without any
abatement of rent. If Tenant fails to pay any sum of money to be paid by Tenant
or to perform any other act to be performed by Tenant under this Lease, Landlord
shall have the right, but shall not be obligated, and without waiving or
releasing Tenant from any obligations of Tenant, to make any such payment or to
perform any such other act on behalf of Tenant in accordance with this Lease.
All sums so paid by Landlord and all necessary incidental costs shall be deemed
additional rent hereunder and shall be payable by Tenant to Landlord on demand,
together with interest on all such sums from the date of expenditure by Landlord
to the date of repayment by Tenant at the Interest Rate. Landlord shall have, in
addition to all other rights and remedies of Landlord, the same rights and
remedies in the event of the nonpayment of such sums plus interest by Tenant as
in the case of default by Tenant in the payment of rent.
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14.8 If Tenant abandons or surrenders the Premises, or is dispossessed by
process of law or otherwise, any movable furniture, equipment, trade fixtures or
personal property belonging to Tenant and left in the Premises shall be deemed
to be abandoned, at the option of Landlord, and Landlord shall have the right to
sell or otherwise dispose of such personal property in any commercially
reasonable manner.
ARTICLE 15
Damage or Destruction
15.1 If the Premises, or any part thereof, is damaged by fire or other
casualty before the Commencement Date or during the term of this Lease, Tenant
shall repair such damage and restore the Premises to substantially the same or
better condition as existed before the occurrence of such fire or other
casualty, Tenant shall repair and replace all such movable furniture, equipment,
trade fixtures and personal property, and this Lease shall remain in full force
and effect. Such repair and replacement by Tenant shall be done in accordance
with Article 9. In no event shall rent abate. Provided that Tenant shall have
unconditionally ratified in writing its repair and restoration obligations
pursuant to this section 15.1 with respect to such casualty, Tenant shall have
the right to participate in the adjustment of any insurance claim arising from
such casualty and shall have the right to approve any settlement or adjustment,
which approval shall not unreasonably be withheld or delayed. Provided Tenant is
not in default under this Lease (and no event has occurred which, with the
passage of time, the giving of notice, or both, would constitute a default), and
provided Tenant has (i) delivered to Landlord plans and specifications and a
budget for such repair and restoration (all of which Landlord shall have
approved in its reasonable judgment), and (ii) deposited with Landlord cash in
the sum equal to the excess, if any, of the total cost set forth in such
approved budget over the amount of insurance proceeds received on account of
such casualty, then Landlord shall make available to Tenant all insurance
proceeds actually received by Landlord on account of such casualty, for
application to the costs of such approved repair and restoration, as follows:
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(a) No more frequently than once per calendar month, Tenant may
request that Landlord reimburse Tenant for costs incurred by Tenant for
work in place to repair and restore the Premises during the immediately
preceding calendar month. Tenant's request shall certify that all work for
which reimbursement is requested was performed in compliance with the plans
and specifications approved by Landlord pursuant to Article 9 and all
applicable laws, and shall include reasonably satisfactory evidence of the
costs incurred by Tenant and unconditional lien releases in form and
substance required by applicable law executed by all mechanic's,
materialmen, laborers, suppliers and contractors who performed any portion
of the repair work or supplied materials.
(b) Within fifteen (15) days after receiving Tenant's request,
Landlord shall approve or disapprove Tenant's request, which approval shall
not be unreasonably withheld, by written notice to Tenant. If Landlord
approves all or any portion of a request and Landlord has received (and not
previously disbursed) insurance proceeds, then Landlord's approval shall
include a check in the amount approved by Landlord. If Landlord disapproves
all or any portion of a request, then Landlord's notice shall state the
reasons for that disapproval. Landlord's failure to deliver a notice
approving or disapproving a request shall be conclusively deemed Landlord's
disapproval of the request. In addition, Landlord shall have the right to
impose other conditions upon disbursement so long as they are consistent
with customary construction loan disbursement practices. Landlord shall
maintain in an interest-bearing account any proceeds of insurance held by
Landlord and any sums deposited with Landlord by Tenant pursuant to this
section 15.1, and so long as no default by Tenant under this Lease has
occurred, interest earned on such account shall be disbursed to Tenant upon
completion of such repair and restoration, except to the extent such
interest has been applied to the costs of such repair and restoration.
15.2 If the Premises, or any part thereof, is damaged by fire or other
casualty and (a) such fire or other casualty occurs during the last twelve (12)
months of the term of this Lease and the repair and restoration work to be
performed by Tenant in accordance with section 15.1 cannot, as reasonably
estimated by Landlord, be completed within four (4) months after the occurrence
of such fire or other casualty, or (b) the insurance proceeds received by
Landlord and Tenant in respect of such damage are not adequate to pay the entire
cost, as reasonably estimated by Landlord, of the repair and restoration work to
be performed by Landlord in accordance with section 15.1 and Tenant does not
deposit such shortfall with Landlord, then, in any such event, Landlord shall
have the right, by giving written notice to Tenant within sixty (60) days after
the occurrence of such fire or other casualty, to terminate this Lease as of the
date of such notice, in which case all insurance proceeds on account of such
casualty shall be paid to Landlord. If Landlord does not exercise the right to
terminate this Lease in accordance with this section 15.2, Tenant shall repair
such damage and restore the Premises in accordance with section 15.1 and this
Lease shall remain in full force and effect.
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ARTICLE 16
Eminent Domain
16.1 If a substantial portion of the Premises is taken and the remaining
portion of the Premises is not reasonably suitable for Tenant's purposes, or if
a portion of the Premises is taken resulting in a substantial loss of access to
and from the Premises without reasonable substitute access being available,
Landlord and Tenant each shall have the right, by giving written notice to the
other within thirty (30) days after the date of such taking, to terminate this
Lease. If either Landlord or Tenant exercises such right to terminate this Lease
in accordance with this section 16.1, this Lease shall terminate as of the date
of such taking. If neither Landlord nor Tenant exercises such right to terminate
this Lease in accordance with this section 16.1, this Lease shall terminate as
to the portion of the Premises so taken as of the date of such taking and shall
remain in full force and effect as to the portion of the Premises not so taken,
Tenant shall restore the portion of the Premises not so taken to an integrated
architectural unit in accordance with Article 9 and the Base Rent shall be
reduced as of the date of such taking in the proportion that the rentable area
of the Premises so taken bears to the total rentable area of the Premises. If
all of the Premises is taken by exercise of the power of eminent domain before
the Commencement Date or during the term of this Lease, this Lease shall
terminate as of the date of such taking.
16.2 If all or any part of the Premises is taken by exercise of the power
of eminent domain, all awards, compensation, damages, income, rent and interest
payable in connection with such taking shall, except as expressly set forth in
this section 16.2, be paid to and become the property of Landlord, and Tenant
hereby assigns to Landlord all of the foregoing. Without limiting the generality
of the foregoing, Tenant shall have no claim against Landlord or the entity
exercising the power of eminent domain for the value of the leasehold estate
created by this Lease or any unexpired term of this Lease. Tenant shall have the
right to claim and receive directly from the entity exercising the power of
eminent domain only the share of any award determined to be owing to Tenant for
the taking of improvements installed in the portion of the Premises so taken by
Tenant at Tenant's sole cost and expense based on the unamortized cost actually
paid by Tenant for such improvements, for the taking of Tenant's movable
furniture, equipment, trade fixtures and personal property, for loss of
goodwill, for interference with or interruption of Tenant's business, or for
removal and relocation expenses.
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16.3 In the event of any taking other than a taking referred to in section
16.1, this Lease shall continue in full force and effect, Tenant shall continue
to pay all of the rent and to perform all of the covenants of Tenant in
accordance with this Lease and Tenant shall restore the Premises to an
integrated architectural unit in accordance with Article 9. Provided Tenant is
not in default under this Lease (and no event has occurred which, with the
passage of time, the giving of notice, or both, would constitute a default), and
provided Tenant has (i) delivered to Landlord plans and specifications and a
budget for such repair and restoration (all of which Landlord shall have
approved in its reasonable judgment), and (ii) deposited with Landlord cash in
the sum equal to the excess, if any, of the total cost set forth in such
approved budget over the amount of condemnation award proceeds received on
account of such taking, then Landlord shall make available to Tenant all
condemnation award proceeds actually received by Landlord on account of such
taking, for application to the costs of such approved repair and restoration, as
follows:
(a) No more frequently than once per calendar month, Tenant may
request that Landlord reimburse Tenant for costs incurred by Tenant for
work in place to repair and restore the Premises during the immediately
preceding calendar month. Tenant's request shall certify that all work for
which reimbursement is requested was performed in compliance with the plans
and specifications approved by Landlord pursuant to Article 9 and all
applicable laws, and shall include reasonably satisfactory evidence of the
costs incurred by Tenant and unconditional lien releases in form and
substance required by applicable law executed by all mechanic's,
materialmen, laborers, suppliers and contractors who performed any portion
of the repair work or supplied materials.
(b) Within fifteen (15) days after receiving Tenant's request,
Landlord shall approve or disapprove Tenant's request, which approval shall
not be unreasonably withheld, by written notice to Tenant. If Landlord
approves all or any portion of a request and Landlord has received (and not
previously disbursed) condemnation award proceeds, then Landlord's approval
shall include a check in the amount approved by Landlord. If Landlord
disapproves all or any portion of a request, then Landlord's notice shall
state the reasons for that disapproval. Landlord's failure to deliver a
notice approving or disapproving a request shall be conclusively deemed
Landlord's disapproval of the request. In addition, Landlord shall have the
right to impose other conditions upon disbursement so long as they are
consistent with customary construction loan disbursement practices.
Landlord shall maintain in an interest-bearing account any condemnation
award held by Landlord and any sums deposited with Landlord by Tenant
pursuant to this section 16.3, and so long as no default by Tenant under
this Lease has occurred, interest earned on such account shall be disbursed
to Tenant upon completion of such repair and restoration, except to the
extent such interest has been applied to the costs of such repair and
restoration.
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16.4 As used in this Article 16, a "taking" means the acquisition of all or
part of the Premises for a public use by exercise of the power of eminent domain
(or a sale of any or all of the Premises in lieu, or under threat, thereof) and
the taking shall be considered to occur as of the earlier of the date on which
possession of the Premises (or part so taken) by the entity exercising the power
of eminent domain is authorized as stated in an order for possession or the date
on which title to the Premises (or part so taken) vests in the entity exercising
the power of eminent domain.
ARTICLE 17
Subordination, Merger and Sale
17.1 This Lease shall be subject and subordinate at all times to the lien
of all mortgages and deeds of trust securing any amount or amounts whatsoever,
and any ground lease or master lease of the Premises, which may now exist or
hereafter be placed on or against the Premises or on or against Landlord's
interest or estate therein, all without the necessity of having further
instruments executed by Tenant to effect such subordination. Notwithstanding the
foregoing, in the event of a foreclosure of any such mortgage or deed of trust
or of any other action or proceeding for the enforcement thereof, or of any sale
thereunder, or in the event any such ground lease or master lease is terminated,
this Lease shall not be terminated or extinguished, nor shall the rights and
possession of Tenant hereunder be disturbed, if no Event of Default then exists
under this Lease, and Tenant shall attorn to the person who acquires Landlord's
interest hereunder through any such mortgage or deed of trust. Tenant agrees to
execute, acknowledge and deliver upon demand such further instruments evidencing
such subordination of this Lease to the lien of all such mortgages and deeds of
trust or to all such ground leases or master leases of the Premises as may
reasonably be required by Landlord, but Tenant's covenant to subordinate this
Lease to mortgages or deeds of trust, or ground leases or master leases,
hereafter executed is conditioned upon each such senior mortgage or deed of
trust, or ground lease or master lease, or a separate subordination agreement,
containing the commitments specified in the preceding sentence. Without limiting
the generality of the foregoing, Tenant agrees to enter into a subordination,
nondisturbance and attornment agreement in the form required by the holder of
any such mortgage or deed of trust or by any party to any such ground lease or
master lease.
17.2 The voluntary or other surrender of this Lease by Tenant, or a mutual
cancellation thereof, shall not work a merger and shall, at the option of
Landlord, terminate all or any existing subleases or subtenancies or operate as
an assignment to Landlord of any or all such subleases or subtenancies.
17.3 If the original Landlord hereunder, or any successor owner of the
Premises, sells or conveys the Premises, all liabilities and obligations on the
part of the original Landlord, or such successor owner, under this Lease
accruing after such sale or conveyance shall terminate and the original
Landlord, or such successor owner, shall automatically be released therefrom,
and thereupon all such liabilities and obligations shall be binding upon the new
owner. Tenant agrees to attorn to such new owner.
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ARTICLE 18
Estoppel Certificate
18.1(a) At any time and from time to time, Tenant shall, within ten (10)
days after written request by Landlord, execute, acknowledge and deliver to
Landlord a certificate, in the form attached as Exhibit A, or such other form as
may be requested, certifying: (i) that this Lease is unmodified and in full
force and effect (or, if there have been modifications, that this Lease is in
full force and effect as modified, and stating the date and nature of each
modification); (ii) the Commencement Date and the Expiration Date determined in
accordance with Article 2 and the date, if any, to which all rent and other sums
payable hereunder have been paid; (iii) that no notice has been received by
Tenant of any default by Tenant hereunder which has not been cured, except as to
defaults specified in such certificate; (iv) that Landlord is not in default
under this Lease, except as to defaults specified in such certificate; and (v)
such other matters as may be reasonably requested by Landlord or any actual or
prospective purchaser or mortgage lender. Any such certificate may be relied
upon by Landlord and any actual or prospective purchaser or mortgage lender of
the Premises or any part thereof.
(b) At any time and from time to time, Landlord shall, within ten (10) days
after written request by Tenant, execute, acknowledge and deliver to Tenant a
certificate certifying: (i) that this Lease is unmodified and in full force and
effect (or, if there have been modifications, that this Lease is in full force
and effect as modified, and stating the date and nature of each modification);
(ii) the Commencement Date and the Expiration Date determined in accordance with
Article 2 and the date, if any, to which all rent and other sums payable
hereunder have been paid; (iii) that no notice has been received by Landlord of
any default by Landlord hereunder which has not been cured, except as to
defaults specified in such certificate; (iv) that Tenant is not in default under
this Lease, except as to defaults specified in such certificate; and (v) such
other matters as may be reasonably requested by Tenant. Any such certificate may
be relied upon by Tenant and any actual or prospective lender.
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ARTICLE 19
Holding Over
19.1 If, without objection by Landlord, Tenant holds possession of the
Premises after expiration of the term of this Lease, Tenant shall become a
tenant from month to month upon the terms herein specified but at a Base Rent
equal to one hundred twenty percent (120%) of the Base Rent in effect at the
expiration of the term of this Lease pursuant to Article 3, payable in advance
on or before the first day of each month. Such month to month tenancy may be
terminated by either Landlord or Tenant by giving thirty (30) days' written
notice of termination to the other at any time.
ARTICLE 20
Financial Statements
20.1 On or before April 1 of each year, Tenant shall deliver to Landlord
audited consolidated financial statements of ICG Communications, Inc., a
Delaware corporation ("ICGC"), and its consolidated subsidiaries ("Financial
Statements") for the fiscal year of ICGC ended on the previous December 31,
which Financial Statements shall include an audited consolidated balance sheet
of ICGC and its consolidated subsidiaries as at the end of such fiscal year, a
consolidated statement of operations of ICGC and its consolidated subsidiaries
for such fiscal year, and a certificate of ICGC's auditor (which shall be a
recognized national independent accounting firm) to the effect that such
Financial Statements were prepared in accordance with generally accepted
accounting principals consistently applied and fairly present the financial
condition and operations of ICGC and its consolidated subsidiaries for and as at
the end of such fiscal year.
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ARTICLE 21
Hazardous Materials
21.1 As used herein, the term "Hazardous Material" means any hazardous or
toxic substance, material or waste, or any pollutant or contaminant, or words of
similar import, which is or becomes regulated by any local governmental
authority, the state in which the Premises are located, or the United States
Government. The term "Hazardous Material" includes, but is not limited to, any
material or substance which is, (a) designated as a "hazardous substance"
pursuant to section 311 of the Federal Water Pollution Control Act (33 U.S.C.
section 1317), (b) defined as a "hazardous waste" pursuant to section 1004 of
the Federal Resource Conservation and Recovery Act, 42 U.S.C. section 6901 et
seq. (42 U.S.C. section 6903), (c) defined as a "hazardous substance" pursuant
to section 101 of the Comprehensive Environmental Response Compensation and
Liability Act (42 U.S.C. section 9601 et seq.), (d) asbestos, (e) petroleum
(including crude oil or any fraction thereof, natural gas, natural gas liquids,
liquefied natural gas, or synthetic gas usable for fuel, or any mixture
thereof), (f) petroleum products, (g) polychlorinated biphenyls, (h) urea
formaldehyde, (i) radon gas, (j) radioactive matter, (k) medical waste, and (l)
chemicals which may cause cancer or reproductive toxicity.
21.2 As used herein, the term "Environmental Requirements" means all laws,
ordinances, rules, regulations, orders and other requirements of any government
or public authority now in force or which may hereafter be in force relating to
protection of human health or the environment, including all requirements
pertaining to reporting, licensing, permitting, investigation and remediation of
emissions, discharges, storage, disposal or releases of Hazardous Materials and
all requirements pertaining to the protection of the health and safety of
employees or the public.
21.3 Tenant shall not permit or conduct the handling, use, generation,
treatment, storage or disposal on, in or about the Premises of any Hazardous
Material (other than normal quantities of office supplies and cleaning supplies
which Tenant shall handle, use, store and dispose of in compliance with all
Environmental Requirements) without prior written notice to Landlord. Any such
notice by Tenant to Landlord shall be in writing and shall demonstrate to the
reasonable satisfaction of Landlord that such Hazardous Material is necessary to
the business of Tenant and will be handled, used, generated, treated, stored or
disposed of in a manner that complies with all Environmental Requirements. Any
such handling, use, generation, treatment, storage or disposal of any Hazardous
Material permitted by Landlord hereunder shall be in compliance with all
Environmental Requirements.
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21.4 Tenant shall, within five (5) days after the receipt thereof, give
written notice to Landlord of any notice or other communication regarding any
(a) actual or alleged violation of Environmental Requirements by Tenant or with
respect to the Premises, (b) actual or threatened migration of Hazardous
Material from the Premises, or (c) the existence of Hazardous Material in or on
the Premises or regarding any actual or threatened investigation, inquiry,
lawsuit, claim, citation, directive, summons, proceeding, complaint, notice,
order, writ or injunction relating to any of the foregoing.
21.5 Tenant shall indemnify and defend Landlord against and hold Landlord
harmless from all claims, demands, liabilities, damages, fines, encumbrances,
liens, losses, costs and expenses, including reasonable attorneys' fees and
disbursements, and costs and expenses of investigation, arising from or related
to the existence on or after the Commencement Date of Hazardous Material in or
on the Premises or the actual or threatened migration on or after the
Commencement Date of Hazardous Material from the Premises or the existence on or
after the Commencement Date of a violation of Environmental Requirements by
Tenant or with respect to the Premises. The obligations of Tenant under this
section 21.5 shall not be affected by any investigation by or on behalf of
Landlord or by any information which Landlord may have or obtain with respect
thereto. Tenant shall, to the reasonable satisfaction of Landlord, perform all
remedial actions necessary to remove any Hazardous Material in or on the
Premises on or after the Commencement Date or to remedy actual or threatened
migration from the Premises of any Hazardous Material or to remedy any actual or
threatened violation of Environmental Requirements, provided such remedial
action is required under Environmental Requirements. This section 21.5 shall
survive termination of this Lease.
21.6 If, at any time when the term of this Lease (including any renewal
term) would expire but for the terms of this section 21.6, Hazardous Material
exists in, on, about or under the Premises, then the term of this Lease shall
automatically be extended and this Lease shall remain in effect until the
earlier of (a) the completion of all remedial action required under section
21.5, or (b) the date specified in a written notice from Landlord to Tenant
terminating this Lease. During any such extension period, Tenant shall perform
all of its obligations under this Lease including payments of all rent due
hereunder.
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ARTICLE 22
Waiver
22.1 The waiver by Landlord or Tenant of any breach of any covenant in this
Lease shall not be deemed to be a waiver of any subsequent breach of the same or
any other covenant in this Lease, nor shall any custom or practice which may
grow up between Landlord and Tenant in the administration of this Lease be
construed to waive or to lessen the right of Landlord or Tenant to insist upon
the performance by Landlord or Tenant in strict accordance with this Lease. The
subsequent acceptance of rent hereunder by Landlord or the payment of rent by
Tenant shall not waive any preceding breach by Tenant of any covenant in this
Lease, nor cure any Event of Default, nor waive any forfeiture of this Lease or
unlawful detainer action, other than the failure of Tenant to pay the particular
rent so accepted, regardless of Landlord's or Tenant's knowledge of such
preceding breach at the time of acceptance or payment of such rent.
ARTICLE 23
Notices
23.1 All requests, approvals, consents, notices and other communications
given by Landlord or Tenant under this Lease shall be properly given only if
made in writing and either deposited in the United States mail, postage prepaid,
certified with return receipt requested, or delivered by hand (which may be
through a messenger or recognized delivery or courier service) and addressed as
follows: To Landlord at the address of Landlord specified in the Basic Lease
Information, or at such other place as Landlord may from time to time designate
in a written notice to Tenant; and to Tenant, before the Commencement Date, at
the address of Tenant specified in the Basic Lease Information, and after the
Commencement Date, at the Premises, or at such other place as Tenant may from
time to time designate in a written notice to Landlord. Such requests,
approvals, consents, notices and other communications shall be effective on the
date of receipt (evidenced by the certified mail receipt) if mailed or on the
date of delivery if hand delivered.
ARTICLE 24
Guaranties; Security Deposit
24.1 As a condition precedent for Landlord's benefit to the effectiveness
of this Lease and the Commencement Date, on or before the Commencement Date
Tenant shall cause to be delivered to Landlord Continuing Lease Guaranties in
the form attached hereto as Exhibit B, executed by the respective Guarantors
specified in the Basic Lease Information (the "Lease Guaranties").
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24.2 As a condition precedent for Landlord's benefit to the effectiveness
of this Lease and the Commencement Date, on or before the Commencement Date
Tenant shall deposit with Landlord by wire transfer the amount of ten million
dollars ($10,000,000) (the "Security Amount") to be held by Landlord as a
security deposit in accordance with this Article 24. The Security Amount shall
be held in an interest-bearing account in Landlord's own name as secured party
with respect to the security interest hereby granted by Tenant, as cash
collateral (the "Draw Account"), established with a financial institution
selected by Landlord and reasonably satisfactory to Tenant. Funds in the Draw
Account shall be invested in such Permitted Investments (as hereinafter
defined), as Tenant may from time to time designate by written notice to
Landlord and as approved by Landlord in its reasonable discretion. The term
"Permitted Investments" means money market accounts with, or certificates of
deposit issued by, a national bank or other depository institution which bank or
institution is satisfactory to Landlord in its sole discretion; United States
Treasury securities; or commercial paper rated AAA or better by Standard and
Poors Corporation (or equivalent rating of another nationally recognized credit
rating agency). Risk of loss of the amounts held in the Draw Account shall be
borne by Tenant, and Landlord shall have no liability for any loss, or
diminution in value, of the Draw Account due to any failure of, or other
financial problems affecting, such financial institution. Interest earned on the
Draw Account shall for all purposes become part of the Draw Account. On each
anniversary of the date the funds are deposited in the Draw Account, amounts
held in the Draw Account in excess of the Security Amount (as the same may have
been adjusted pursuant to section 24.6) shall be disbursed as follows: (a)
first, to pay all reasonable costs to establish and maintain the Draw Account;
and (b) second, the balance, if any, to Tenant. Tenant hereby grants to Landlord
a security interest in the Draw Account and all proceeds thereof to secure the
full and timely performance of Tenant's obligations under this Lease. In
addition to the remedies set forth in this Lease, Landlord shall have all of the
rights and remedies of a secured party pursuant to the Massachusetts Uniform
Commercial Code. At any time upon Landlord's request, Tenant shall execute and
deliver to Landlord such security agreements, financing statements and other
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documents as Landlord may reasonably require to further evidence and perfect
such security interest.
24.3 If this Lease is terminated and Landlord is entitled to liquidated
damages in accordance with section 14.2(c), Landlord may withdraw all of the
funds then remaining in the Draw Account and retain the withdrawn amount.
24.4 Landlord may, from time to time, withdraw funds from the Draw Account
for application against any installment of Rent not paid when due or to pay any
other amount payable by Tenant hereunder that is not paid when due, including
amounts payable by Tenant under this Lease to reimburse Landlord for amounts
paid by Landlord for the account of Tenant as provided for in this Lease.
24.5 In the event of a partial withdrawal of funds from the Draw Account in
accordance with section 24.4, Tenant shall, within five (5) business days after
Landlord has given Tenant notice of such withdrawal (including the purpose of
such withdrawal), deposit to the Draw Account such additional funds as shall be
necessary to cause the amount of funds in the Draw Account to be returned to the
Security Amount and if Tenant fails to do so within that 5-day period, an Event
of Default shall be deemed to have occurred and the Landlord may terminate this
Lease and/or exercise any of its other rights and remedies, including its rights
under this Article 24.
24.6 The Security Amount shall be subject to adjustment on the terms and
conditions set forth in this section 24.6. As of April 15 of each year
commencing with April 15, 2001 (each a "Reduction Date"), the Security Amount
shall be reduced by the Reduction Amount (as defined below) applicable to such
Reduction Date, provided that, as of such Reduction Date, all of the following
conditions (the "Reduction Conditions") are satisfied:
(a) Either
(i)(A) the net income of ICGC during each of the immediately
preceding three fiscal years shall have been more than one dollar
($1.00), and (B) the average annual net income of ICGC during the
immediately preceding three fiscal years shall have been more than an
amount equal to (1) ten (10), multiplied by (2) the average annual
Base Rent payable under this Lease during such three fiscal year
period; or
(ii)(A) during each of the immediately preceding three (3) fiscal
years, the ratio of (1) ICGC's Net Cash Flow (as defined below) during
such year, to (2) ICGC's Fixed Charges (as defined below) during such
year shall have exceeded 2.0 to 1, and (B) the average annual Net Cash
Flow of ICGC during the immediately preceding three (3) fiscal years
shall have been more than an amount equal to (1) ten (10), multiplied
by (2) the average annual Base Rent payable under this Lease during
such three fiscal year period; and
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(b) ICGC's Market Capitalization (as defined below) exceeds one
billion dollars ($1,000,000,000); and
(c) ICG Holdings, Inc. occupies one hundred percent (100%) of the
Premises as its headquarters and system operations center; and
(d) no Event of Default has occurred and is continuing; and
(e) no Reduction Event shall have occurred during the previous three
hundred sixty-five (365) days; and
(f) Tenant shall have delivered to Landlord (i) a certificate signed
by the Chief Financial Officer of ICGC and a senior executive officer of
Tenant, certifying that, as of the date of such certificate, each of the
Reduction Conditions is satisfied, and (ii) detailed calculations, based
upon the Financial Statements of ICGC for the relevant years, demonstrating
to Landlord's reasonable satisfaction that the Reduction Condition set
forth in clause (a) above is satisfied.
References in this section 24.6 to ICGC mean ICGC and its consolidated
subsidiaries, on a consolidated basis in accordance with GAAP. References in
this section 24.6 to financial terms refer to such terms determined in
accordance with GAAP. As used herein, the following terms have the meanings
indicated below:
"Fixed Charges" means, for any period, all taxes, interest expense
(cash and non-cash), rent and lease expenses and the current portion of
long-term debt for such period.
"Market Capitalization" means, as of any date, the product of (1) the
total number of shares of common stock of ICGC traded on a major stock
exchange or on the NASDAQ National Market System, multiplied by (2) the per
share price of such common stock most recently quoted on such exchange or
Market System, as published in The Wall Street Journal.
"Net Cash Flow" means, for any period, net income during such period,
plus depreciation, amortization, impairment losses [and non-cash interest]
during such period.
"Reduction Amount" means the respective amounts set forth below for
the respective Reduction Dates indicated:
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Reduction Date Reduction Amount
--------------------- ------------------
April 15, 2001 $1,250,000
April 15, 2002 $1,250,000
Each April 15
from April 15,
2003 to April 15,
2007, inclusive $1,500,000
Each April 15
from April 15,
2008 to April 15,
2012, inclusive $2,000,000
Upon the occurrence of any Reduction Event, Landlord shall deliver to Tenant an
amount equal to the excess of the funds then held in the Draw Account over the
adjusted Security Amount becoming effective upon such Reduction Date.
24.7(a) The Security Amount shall be reduced to five million dollars
($5,000,000) at any time that Tenant delivers to Landlord reasonably
satisfactory evidence that:
(i) either Tenant or ICGC shall have obtained, and maintained for a
continuous period of not less than twelve (12) months (without any
"CreditWatch" or downgrade consideration), ratings of its unsecured debt of
BBB- or better from Standard and Poor's Corporation ("S&P") and Baa3 or
better from Moody's Investors Service ("Moody's"); or
(ii) either Tenant or ICGC shall have obtained, and maintained for a
continuous period of not less than eighteen (18) months (without any
"CreditWatch" or downgrade consideration), a rating of its unsecured debt
of BBB- or better from S&P or Baa3 or better from Moody's, and a rating of
its unsecured debt of BBB- or better from Duff & Phelps Credit Rating Co.
("Duff");
provided that, as of the date Tenant would be entitled to such reduction, no
Event of Default has occurred and is continuing. Upon the occurrence of any such
reduction, Landlord shall deliver to Tenant from the Draw Account an amount
equal to the excess (if any) of the funds then held in the Draw Account over the
adjusted Security Amount becoming effective upon such reduction. If the Security
Amount is less than five million dollars ($5,000,000), this section 24.7(a)
shall have no effect.
(b) Tenant's obligations pursuant to this Article 24 to provide security
shall terminate, and Landlord shall return to Tenant all funds remaining in the
Draw Account at any time that Tenant delivers to Landlord reasonably
satisfactory evidence that:
(i) either Tenant or ICGC shall have obtained, and maintained for a
continuous period of not less than eighteen (18) months (without any
"CreditWatch" or downgrade consideration), ratings of its unsecured debt of
BBB or better from S&P and Baa2 or better from Moody's; or
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(ii) either Tenant or ICGC shall have obtained, and maintained for a
continuous period of not less than twenty-four (24) months (without any
"CreditWatch" or downgrade consideration), ratings of its unsecured debt of
BBB- or better from S&P and Baa3 or better from Moody's; or
(iii) either Tenant or ICGC shall have obtained, and maintained for a
continuous period of not less than thirty (30) months (without any
"CreditWatch" or downgrade consideration), a rating of its unsecured debt
of BBB- or better from S&P or Baa3 or better from Moody's, and a rating of
its unsecured debt of BBB- or better from Duff & Phelps Credit Rating Co.
("Duff");
provided that, as of the time that Tenant delivers to Landlord such evidence of
such ratings, no Event of Default has occurred and is continuing.
24.8 Upon the expiration or sooner termination of this Lease, Landlord
shall return to Tenant any funds remaining in the Draw Account, provided that
Landlord shall have the right to retain in the Draw Account (and draw in
accordance with this Article 24) an amount which Landlord reasonably determines
to be equal to the damages Landlord has suffered arising from any uncured
default by Tenant.
24.9 So long as no Event of Default has occurred and is continuing, Tenant
shall have the right to provide Landlord, in lieu of the security described in
this Article 24, an irrevocable standby letter of credit in the amount of the
Security Amount, in form and substance satisfactory to Landlord and issued by a
bank satisfactory to Landlord (a "Letter of Credit"). In the event Tenant elects
to so provide a Letter of Credit, Landlord and Tenant shall negotiate in good
faith an amendment to this Lease to set forth the rights and obligations of
Landlord and Tenant with respect to the Letter of Credit, the terms of which
amendment shall provide Landlord with comparable security, in Landlord's
reasonable judgment, to that provided pursuant to this Article 24.
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ARTICLE 25
Miscellaneous
25.1 The words "Landlord" and "Tenant" as used herein shall include the
plural as well as the singular. The words "include," "includes" and "including"
shall be deemed to be followed by the phrase "without limitation." Tenant shall
indemnify and defend Landlord against and hold Landlord harmless from all
claims, demands, liabilities, damages, losses, costs and expenses, including
reasonable attorneys' fees and disbursements, arising out of or resulting from
any failure by Tenant to perform any of its obligations or any breach by Tenant
of any of its representations or warranties in accordance with this Lease. If
there is more than one Tenant, the obligations hereunder imposed upon Tenant
shall be joint and several. Time is of the essence of this Lease and each and
all of its provisions. Submission of this instrument for examination or
signature by Tenant does not constitute a reservation of or option for lease,
and it is not effective as a lease or otherwise until execution and delivery by
both Landlord and Tenant. Subject to Article 12, this Lease shall benefit and
bind Landlord and Tenant and the personal representatives, heirs, successors and
assigns of Landlord and Tenant. If any provision of this Lease is determined to
be illegal or unenforceable, such determination shall not affect any other
provision of this Lease and all such other provisions shall remain in full force
and effect. This Lease shall be governed by and construed in accordance with the
laws of the state where the Premises are located.
25.2 If there is any legal action or proceeding between Landlord and Tenant
to enforce this Lease or to protect or establish any right or remedy under this
Lease, the unsuccessful party to such action or proceeding shall pay to the
prevailing party all costs and expenses, including reasonable attorneys' fees
and disbursements, incurred by such prevailing party in such action or
proceeding and in any appeal in connection therewith. If such prevailing party
recovers a judgment in any such action, proceeding or appeal, such costs,
expenses and attorneys' fees and disbursements shall be included in and as a
part of such judgment.
25.3 The exhibits and addenda, if any, specified in the Basic Lease
Information are attached to and made a part of this Lease.
25.4 Tenant warrants and represents to Landlord that Tenant and has not
authorized or employed, or acted by implication to authorize or to employ, any
real estate broker or salesman to act for Tenant in connection with this Lease.
25.5 Tenant and each person executing this Lease on behalf of Tenant
represents and warrants to Landlord that (a) Tenant is a corporation, duly
organized and validly existing under the laws of the State of Colorado, (b)
Tenant is qualified to do business in the state where the Premises is located,
(c) Tenant has full right, power and authority to enter into this Lease and to
perform all of Tenant's obligations hereunder, and (d) each person signing this
Lease on behalf of Tenant is duly and validly authorized to do so.
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25.6 There are no oral agreements between Landlord and Tenant affecting
this Lease, and this Lease supersedes and cancels any and all previous
negotiations, arrangements, brochures, offers, agreements and understandings,
oral or written, if any, between Landlord and Tenant or displayed by Landlord to
Tenant with respect to the subject matter of this Lease or the Premises. There
are no representations between Landlord and Tenant or between any real estate
broker and Tenant other than those expressly set forth in this Lease and all
reliance with respect to any representations is solely upon representations
expressly set forth in this Lease. This Lease may not be amended or modified in
any respect whatsoever except by an instrument in writing signed by Landlord and
Tenant.
ARTICLE 26
Option to Expand the Building
26.1(a) Upon and subject to the terms and conditions of this Article 26,
Landlord hereby grants to Tenant the right and option (the "Expansion Option")
(i) to request that Landlord construct the Expansion Improvements (as defined
below) and lease the Expansion Improvements to Tenant in accordance with
sections 26.2 and 26.4, or (ii) to request that Landlord purchase from, and
lease back to, Tenant the Expansion Improvements upon Tenant's construction
thereof in accordance with sections 26.3 and 26.4, or (iii) if Landlord declines
to construct or purchase from Tenant the Expansion Improvements, to (A)
subdivide the Premises and purchase the portion of the Premises on which the
Expansion Improvements are to be constructed and construct the Expansion
Improvements itself in accordance with section 26.5, or (B) construct the
Expansion Premises itself as a leasehold improvement without subdividing the
Premises in accordance with section 26.6.
(b) The additional improvements to be constructed if the Expansion Option
is exercised (the "Expansion Improvements") shall (i) be one or more buildings
separate from the existing Building, of design, nature and type substantially
similar to the existing Building, and (ii) be of a size and be located and
configured per the location and configuration of "Phase 2" shown in the Site
Plan attached hereto as Exhibit C, unless at the request of the Tenant,
Landlord, in its sole and absolute discretion, shall agree to construct or allow
Tenant to construct Expansion Improvements of a different design, nature or
type. Landlord shall have the right, but not the obligation, to provide a
proposal to construct the Expansion Improvements.
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(c) The Expansion Option shall be exercised by Tenant, if at all, by
written notice thereof (an "Expansion Notice") to Landlord given not earlier
than the Commencement Date and not later than the tenth (10th) anniversary of
the Commencement Date (the "Exercise Period"). The Expansion Notice may propose
either one or two buildings and shall be accompanied by preliminary conceptual
plans and specifications for the Expansion Improvements ("Preliminary Plans").
The Expansion Notice shall specify whether Tenant (i) proposes to construct the
Expansion Improvements itself and requests that Landlord purchase and lease back
the Expansion Improvements in accordance with sections 26.3 and 26.4, or (ii)
requests that Landlord construct the Expansion Improvements and lease them to
Tenant in accordance with sections 26.2 and 26.4. The Expansion Option may be
exercised from time to time, each exercise relating to a single additional
building. No purported exercise of the Expansion Option which fails to satisfy
the conditions set forth in section 26.7 and no valid exercise which is later
rescinded shall impair Tenant's right thereafter to exercise the Expansion
Option during the Exercise Period. As of the end of the Exercise Period, the
Expansion Option shall lapse and be of no further force and effect, except to
the extent theretofore exercised. Time is of the essence of this provision.
26.2 If the Expansion Notice requests that Landlord constructs the
Expansion Improvements, then not later than sixty (60) days after delivery of
the Expansion Notice, Landlord shall notify Tenant if it elects not to construct
the Expansion Improvements (which election shall be in Landlord's sole
discretion), or, in the event Landlord proposes to construct the Expansion
Improvements, Landlord shall submit to Tenant a notice (the "Specification
Notice") which notice shall contain Landlord's best good faith estimate of (a)
the total costs (hard and soft) of constructing the Expansion Improvements, (b)
the projected date for completion and delivery to Tenant of the Expansion
Improvements, and (c) the projected Expansion Base Rent. Tenant may elect, by
written notice to Landlord within sixty (60) days following Tenant's receipt of
the Specification Notice, either to accept the terms of the Specification Notice
or to rescind its exercise of the Expansion Option. In the event Landlord shall
have notified Tenant that Landlord elects not to construct the Expansion
Improvements, then Tenant may elect, by written notice to Landlord within sixty
(60) days following Tenant's receipt of Landlord's notice, to either (i) rescind
its exercise of the Expansion Option, (ii) exercise the right (the "Leasehold
Improvement Option") to construct the Expansion Improvements on the Premises at
its sole cost in accordance with section 26.6, or (iii) exercise the right (the
"Tenant Subdivision Option") to cause the Premises to be subdivided such that
the site on which the proposed Expansion Improvements are to be constructed (the
"Expansion Site") is a separate legal parcel in compliance with all applicable
laws, codes, ordinances and regulations and with the requirements of section
26.5 and to purchase the Expansion Site from Landlord and construct the
Expansion Improvements itself, all in accordance with section 26.5; provided,
however, that if Tenant elects to either rescind the exercise of the Expansion
Option or to exercise the Tenant Subdivision Option or the Leasehold Improvement
Option, Tenant shall pay to Landlord as additional rent an amount equal to 150%
of Landlord's out-of-pocket costs incurred to third parties (including, without
limitation, architects, engineers and other design professionals) in preparing
the Specification Notice, and Tenant shall, upon payment, be entitled to copies
of all plans, specifications and designs. Tenant's failure to timely exercise
the Tenant Subdivision Option or the Leasehold Improvement Option shall be
conclusively deemed to constitute a rescission of the exercise of the Expansion
Option. Time is of the essence of this provision.
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26.3 If the Expansion Notice proposes that Tenant constructs the Expansion
Improvements and requests that Landlord purchase the Expansion Improvements,
then not later than sixty (60) days after delivery of the Expansion Notice,
Landlord shall notify Tenant whether or not it elects to purchase the Expansion
Improvements (which election shall be in Landlord's sole discretion), and the
provisions of subsection (a) or (b) of this section 26.3, as applicable, shall
apply.
(a) In the event Landlord shall have notified Tenant that Landlord elects
to purchase the Expansion Improvements (the "Purchase Notice"), then Tenant
shall undertake construction of the Expansion Improvements ("Tenant's Work") and
the provisions of section 26.3(a)(i) through 26.3(a)(ix) hereinbelow shall be
applicable.
(i) Tenant shall cause to be constructed the Expansion Improvements in
accordance with all applicable laws and the procedures set forth
hereinbelow. Upon the Expansion Rent Commencement Date (as defined in
section 26.4(a)), Landlord shall purchase and Tenant shall sell the
Expansion Improvements for a net price equal to Tenant's Expansion Costs
(as defined below), and Tenant shall execute and deliver to Landlord such
documents and instruments as Landlord may reasonably request in connection
with such purchase and sale. The term "Tenant's Expansion Costs" means all
hard and soft costs incurred by Tenant (but excluding land costs) in
connection with the design and construction of the Expansion Improvements,
as said term may be further defined in the Lease Amendment described below.
Tenant shall pay all closing costs in connection with such purchase and
sale, including the premium for an endorsement to Landlord's title policy
to increase the liability amount to reflect the price of the Expansion
Improvements. From and after the Expansion Rent Commencement Date and for
the remainder of the term (as the same may be extended pursuant to section
26.4(c)), Tenant pay Expansion Base Rent (as defined in section 26.4(a))
for the Expansion Improvements; the Expansion Improvements shall be deemed
to be a part of the Premises hereunder; and Tenant shall pay all Operating
Expenses for the Expansion Improvements as set forth in section 3.1(b) and
shall perform all other obligations of Tenant under this Lease as if the
Expansion Improvements were part of the original Premises. At the
conclusion of this Lease, the Expansion Improvements shall be delivered to
Landlord in good condition (reasonable wear and tear excepted). Title to
the Expansion Improvements shall, at all times, remain in the name of
Landlord and shall not pass to Tenant.
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(ii) On or before ten (10) days from the date of the Purchase Notice,
Tenant shall notify Landlord of the identity and mailing address of the
licensed architect engaged by Tenant for the preparation of plans for
Tenant's Work. On or before forty-five (45) days from the date of the
Purchase Notice, Tenant, at Tenant's expense, shall cause Tenant's
architect to prepare and deliver to Landlord for Landlord's reasonable
approval five (5) sets of final plans and specifications for Tenant's Work.
(iii) Landlord shall review said plans and specifications and notify
Tenant within fifteen (15) days of receipt of said plans and specifications
in Landlord's office, of the matters, if any, in said plans which fail to
conform to Landlord's construction requirements or otherwise fail to meet
with Landlord's approval which approval shall not be unreasonably withheld,
conditioned or delayed. Tenant shall, within ten (10) days from receipt of
any such notice from Landlord, cause said plans to be revised in such
manner as is requisite to obtaining Landlord's approval and shall submit
revised plans for Landlord's approval. When Landlord has approved Tenant's
plans, Landlord shall initial and return one (1) set of approved plans to
Tenant, which set shall also show the date of Landlord's approval. Tenant's
Work shall be carried out pursuant to a fixed price or not-to-exceed
construction contract in form and substance reasonably satisfactory to
Landlord, and with a licensed contractor reasonably satisfactory to
Landlord. Landlord shall have the right to require that Tenant obtain
payment and completion bonds on terms satisfactory to Landlord prior to
commencing Tenant's Work. Tenant agrees not to commence Tenant's Work until
Landlord has approved the final plans, the contractor and the construction
contract, all required permits have been issued and this Lease has been
amended in accordance with section 26.8. Tenant shall reimburse Landlord
for actual costs expended for review of all plans.
(iv) Tenant shall not deviate from the final set of plans and
specifications approved by Landlord without Landlord's prior written
consent, which consent shall not be unreasonably withheld. Landlord's
approval of plans and specifications shall not constitute the assumption of
any responsibility by Landlord for any of Tenant's Work or the accuracy or
sufficiency of Tenant's plans and specifications.
(v) If Tenant fails to complete the Tenant's Work in accordance with
such plans and specifications prior to the Construction Deadline (as
defined below), Landlord, at Landlord's option, may terminate this Lease
or, at Landlord's option, may enter the Expansion Improvements, complete
Tenant's Work, and Tenant shall pay the cost thereof to Landlord upon
demand. The term "Construction Deadline" means the date eighteen (18)
months after commencement of construction, plus the number of days that
construction is delayed due to Force Majeure; provided that such date shall
be extended an additional six (6) months so long as Tenant is continuously
and diligently proceeding with construction.
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(vi) Tenant shall comply with and shall require its contractors to
comply with all federal, state, and local laws, ordinances, regulations and
directions relating to the employment, conditions of employment and hours
of labor in connection with any construction, alteration, installation or
repair work done by or for Tenant in or about the Premises. If Landlord is
damaged as a result of any breach by Tenant of these covenants, Tenant
shall pay to Landlord the amount of such damage, upon demand.
(vii) Upon completion of construction of the Expansion Improvements,
Tenant shall submit:
(A) Properly notarized final releases of liens from Tenant's
general contractor and all subcontractors.
(B) Properly notarized final releases of liens from Tenant's
major suppliers, architect or anyone supplying a significant amount of
materials or services for the construction of the Expansion
Improvements.
(C) A certificate of occupancy and a final inspection report (as
applicable) from the appropriate governing body, indicating that the
Expansion Improvements has no violation of local building codes.
(viii) At all times prior to the completion of Tenant's Work, Tenant
shall cause its general contractor and subcontractors to maintain such
insurance as Landlord may reasonably require, with insurance carriers
reasonably approved by Landlord, in amounts reasonably approved by
Landlord.
(ix) Tenant's Work shall be completed, lien-free in a good and
workmanlike manner, and shall constitute Class A office space constructed
to the same standards as the existing Building. Tenant hereby agrees to
indemnify, defend and hold Landlord harmless from any and all liens and/or
claims placed against the Premises, arising out of, or in connection with,
Tenant's Work; and notwithstanding anything to the contrary contained in
this Lease, no liens of any nature, whether voluntary or involuntary, may
be placed or allowed by Tenant on the Premises. However, Tenant may bond
around any mechanic's liens within thirty (30) days of recording, without
an Event of Default occurring. Landlord shall have no liability of any
kind, and Tenant shall be solely responsible, for any defects or legal
violations respecting the Expansion Improvements. Tenant hereby agrees to
indemnify, defend and hold Landlord harmless from any and all claims and
liabilities of any kind, howsoever arising, relating to the Expansion
Improvements and Tenant shall execute an indemnity, reasonably satisfactory
to Landlord in form and content, prior to commencement of Tenant's Work.
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(b) In the event Landlord shall have notified Tenant that Landlord elects
not to purchase the Expansion Improvements, then Tenant may elect, by written
notice to Landlord within sixty (60) days following Tenant's receipt of
Landlord's notice, to either (i) rescind its exercise of the Expansion Option,
(ii) exercise the Leasehold Improvement Option, or (iii) exercise the Tenant
Subdivision Option. Tenant's failure to timely exercise the Tenant Subdivision
Option or the Leasehold Improvement Option shall be conclusively deemed to
constitute a rescission of the exercise of the Expansion Option. Time is of the
essence of this provision.
26.4(a) Base Rent for the Expansion Improvements if the Expansion
Improvements are constructed by Landlord or if Landlord purchases the Expansion
Improvements in accordance with section 26.3(a) ("Expansion Base Rent"),
calculated as provided in section 26.4(b), shall commence upon the date (the
"Expansion Rent Commencement Date") the Expansion Improvements are substantially
completed, subject only to "punch list" items and other items of incomplete work
that do not materially interfere with the use and occupancy of the Expansion
Improvements (as certified to Landlord and Tenant by the supervising architect,
or, as evidenced by the issuance of a temporary or permanent certificate of
occupancy), and delivered to Tenant for Tenant's occupancy. Expansion Base Rent
shall be included in "Base Rent" for purposes of this Lease, and shall be
payable concurrently with payments of Base Rent hereunder as set forth in
Article 3 of this Lease. From and after the Expansion Rent Commencement Date,
the Expansion Improvements shall be deemed to be a part of the Premises
hereunder, and in addition to Expansion Base Rent, Tenant shall pay all
Operating Expenses for the Expansion Improvements as set forth in section 3.1(b)
and shall perform all other obligations of Tenant under this Lease as if the
Expansion Improvements were part of the original Premises.
(b) If the Expansion Improvements are constructed by Landlord or if
Landlord purchases the Expansion Improvements in accordance with section
26.3(a), Expansion Base Rent shall be: (i) for the first twelve (12) months
after the Expansion Rent Commencement Date, an amount calculated to provide
Landlord with an annual return on Landlord's investment of Total Expansion Costs
(as defined below) equal to the Rent Yield (as defined below), and (ii) for each
successive twelve (12) month period thereafter, an amount equal to one hundred
three percent (103%) of the Expansion Base Rent in effect during the preceding
12-month period. The term "Total Expansion Costs" means all hard and soft costs
incurred by Landlord (including a reasonable development fee payable to Landlord
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and financing charges, but excluding land costs) in connection with the design
and construction of the Expansion Improvements, as said term may be further
defined in the Lease Amendment described below. In the event Landlord purchases
the Expansion Improvements in accordance with section 26.3(a), "Total Expansion
Costs" shall mean Tenant's Expansion Costs. The term "Rent Yield" means a
percentage equal to Landlord's Spread (as defined below) plus the Assumed Loan
Constant (as defined below). The term "Landlord's Spread" means (x) if, as of
the Expansion Rent Commencement Date, Tenant shall have satisfied the debt
rating conditions set forth in section 24.7, seventy-five (75) basis points; and
(y) if, as of the Expansion Rent Commencement Date, Tenant shall not have
satisfied the debt rating conditions set forth in section 24.7, one hundred
twenty-five (125) basis points. The term "Assumed Loan Constant" means a
percentage equal to the percentage of Total Expansion Costs which Landlord would
be required to pay annually as debt service on a secured loan in a principal
amount equal to Total Expansion Costs, with amortization of principal over a
term which ends five (5) years after the term of this Lease (as the same may be
extended pursuant to section 26.4(c)) and interest at the then prevailing rate
(determined with reference to loan terms being proposed by major life insurance
company lenders such as Principal Mutual, Metropolitan Life and Teachers
Insurance) for fully amortizing mortgage loans of like tenor secured by property
comparable to the Premises. Effective upon the Expansion Rent Commencement Date,
the Security Amount shall be increased by an amount equal to twenty percent
(20%) of the Total Expansion Costs, provided that the Security Amount shall not
be required to exceed ten million dollars ($10,000,000). Effective upon the
Expansion Rent Commencement Date, section 24.6 shall be amended to provide that
the first Reduction Date shall occur on the fourth (4th) April 15 to occur after
the Expansion Rent Commencement Date, and subsequent Reduction Dates shall occur
annually thereafter (but the Reduction Amounts applicable on the successive
Reduction Dates shall remain as set forth in section 24.6).
(c) In the event the Expansion Commencement Date occurs later than the
third (3rd) anniversary of the Commencement Date, the term of this Lease shall
automatically be extended such that the Expiration Date shall be the date twelve
(12) years after the Expansion Commencement Date. If Landlord constructs or
purchases the Expansion Improvements, Base Rent for the extended term shall be
calculated in accordance with section 3.1 based upon the Base Rent (including
Expansion Base Rent).
26.5 In the event that Landlord elects not to undertake construction of the
Expansion Improvements or elects not to purchase the Expansion Improvements
pursuant to section 26.3(a), and Tenant exercises the Tenant Subdivision Option
and elects to undertake construction of the Expansion Improvements ("Tenant's
Work"), the provisions of section 26.5(a) through 26.5(f) hereinbelow shall be
applicable.
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(a) Tenant shall, at its sole cost and expense and upon and subject to the
terms of this section 26.5 and the other applicable provisions of this Article
26, (i) cause the Premises to be subdivided so that the Expansion Site is a
separate legal parcel, (ii) purchase the Expansion Site from Landlord, and (iii)
cause to be constructed the Expansion Improvements in accordance with all
applicable laws and the procedures set forth hereinbelow. For the remainder of
the term of this Lease, the Expansion Site and the Expansion Improvements shall
not be a part of the Premises hereunder.
(b) On or before forty-five (45) days after the date of Tenant's exercise
of the Tenant Subdivision Option, Tenant, at Tenant's expense, shall (i) cause a
registered surveyor or civil engineer to prepare and deliver to Landlord a
proposed subdivision map (the "Proposed Subdivision Map"), complying in all
respects with all laws, statutes, codes and ordinances, to legally separate the
Expansion Site and the remainder of the Premises (the "Remaining Parcel") such
that each parcel complies with all applicable laws, statutes, codes, ordinances
and covenants, conditions and restrictions ("Legal Requirements"), and (iii)
cause Tenant's architect to prepare and deliver to Landlord for Landlord's
approval five (5) sets of final plans and specifications for Tenant's Work
including a detailed depiction of all proposed improvements (the "Final Plans").
The Proposed Subdivision Map shall be subject to Landlord's approval, which
shall not be unreasonably withheld. Without limiting the foregoing, Landlord may
disapprove the Proposed Subdivision Map if (A) Landlord would be required to
expend any sums to improve the Remaining Parcel to cause it to be in compliance
with any Legal Requirements, (B) the Remaining Parcel would, in Landlord's
reasonable judgment, be of less value than the value prior to the subdivision
minus the Site Price (as defined below), or (C) the expense of owning,
operating, managing or maintaining the Remaining Parcel would be increased by
the subdivision. Landlord shall review the Proposed Subdivision Map and notify
Tenant within fifteen (15) days of receipt of the matters, if any, which fail to
conform to Landlord's reasonable requirements.
(c) Landlord shall review the Final Plans and notify Tenant within fifteen
(15) days of receipt of said plans and specifications in Landlord's office, of
the matters, if any, in said plans which fail to meet with Landlord's approval
which approval shall not be unreasonably withheld, conditioned or delayed.
Tenant shall, within ten (10) days from receipt of any such notice from
Landlord, cause the Proposed Subdivision Map and/or the Final Plans, as the case
may be, to be revised in such manner as is requisite to obtaining Landlord's
approval and shall submit a revised Proposed Subdivision Map and/or Final Plans
for Landlord's approval. The Proposed Subdivision Map as approved by Landlord is
referred to herein as the "Subdivision Map." As promptly as reasonably
practicable after Landlord's approval of the Subdivision Map and the Final
Plans, Tenant shall cause the Subdivision Map to be recorded and shall take all
other steps necessary to cause the Premises to be subdivided. Tenant agrees not
to commence Tenant's Work until Landlord has approved the Subdivision Map and
the Final Plans, the Premises has been legally subdivided in accordance with the
approved Subdivision Map, Tenant has purchased the Expansion Site in accordance
with this section 26.5, all required permits have been issued and this Lease has
been amended in accordance with section 26.8. Tenant shall reimburse Landlord
for actual costs expended for review of all maps and plans. Tenant shall not
materially deviate from the Final Plans approved by Landlord without Landlord's
prior written consent, which shall not be unreasonably withheld. Landlord's
approval of plans and specifications shall not constitute the assumption of any
responsibility by Landlord for any of Tenant's Work or the accuracy or
sufficiency of Tenant's plans and specifications.
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(d) Immediately upon recordation of the Subdivision Map and completion of
all procedures necessary to legally subdivide the Premises, Tenant shall
purchase the Expansion Site from Landlord for a price (the "Site Price"), net to
Landlord, equal to the product of (i) the number of gross square feet of land
area in the Expansion Site, multiplied by (ii) the Square Foot Price (as defined
below) in effect as of the date of the sale. The term "Square Foot Price" means
(A) during the twelve (12) month period commencing on the Commencement Date,
seven and one-half dollars ($7.50) (the "Initial Price"), and (B) during each
successive twelve (12) month period, the Initial Price increased by five percent
(5%) per year on a compounded basis. Tenant shall bear all costs and expenses,
and shall reimburse Landlord for all costs and expenses incurred by Landlord, in
connection with such purchase, including the subdivision of the Premises and the
Lease Amendment. After the recordation of the Subdivision Map and upon
completion of the sale of the Expansion Site to Tenant, Tenant shall be subject
to no further restriction on encumbrance of the Expansion Site with a mortgage
or deed of trust.
(e) If Tenant fails to commence construction of Tenant's work within nine
(9) months after delivery of the Expansion Notice or fails to complete the
Tenant's Work in accordance with the Final Plans prior to the Construction
Deadline, Landlord, at Landlord's option, may rescind the sale of the Expansion
Site in which case the sale of the Expansion Site shall be reversed (with Tenant
conveying the Expansion Site to Landlord at a net price equal to the Site
Price), and Tenant shall be deemed to have elected not to exercise the Expansion
Option.
(f) Landlord and Tenant acknowledge that the subdivision of the Premises
and construction of the Expansion Improvements will require modification of
and/or additions to the parking facilities on the Premises. Landlord and Tenant
shall include in the Final Plans provisions for parking facilities serving both
the existing Building and the Expansion Improvements. Such parking facilities
shall be designed and constructed at Tenant's sole cost and expense. If adequate
parking facilities are not constructed on each respective parcel sufficient to
serve that parcel and it is necessary or appropriate to construct parking
facilities on one of the parcels to provide parking for both parcels, then
Landlord and Tenant shall enter into an appropriate perpetual access and parking
easement simultaneously with Tenant's purchase of the Expansion Site.
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26.6 In the event that Landlord elects not to undertake construction of the
Expansion Improvements or elects not to purchase the Expansion Improvements
pursuant to section 26.3(a), and Tenant exercises the Leasehold Improvement
Option and elects to undertake construction of the Expansion Improvements
("Tenant's Work"), the provisions of section 26.6(a) through 26.6(c) hereinbelow
shall be applicable.
(a) Tenant shall cause to be constructed the Expansion Improvements in
accordance with all applicable laws and the procedures set forth hereinbelow.
Landlord shall have no obligation to purchase the Expansion Improvements, and
Tenant shall, for the remainder of the term, pay no Expansion Base Rent for the
Expansion Improvements, but the Expansion Improvements shall be deemed to be a
part of the Premises hereunder, and Tenant shall pay all Operating Expenses for
the Expansion Improvements as set forth in section 3.1(b) and shall perform all
other obligations of Tenant under this Lease as if the Expansion Improvements
were part of the original Premises. At the conclusion of this Lease, the
Expansion Improvements shall be delivered to Landlord in good condition
(reasonable wear and tear excepted). Title to the Expansion Improvements shall,
at all times, remain in the name of Landlord and shall not pass to Tenant.
Landlord shall have no liability of any kind, and Tenant shall be solely
responsible, for any defects or legal violations respecting the Expansion
Improvements in the event Tenant performs Tenant's Work. Tenant hereby agrees to
indemnify, defend and hold Landlord harmless from any and all claims and
liabilities of any kind, howsoever arising, relating to the Expansion
Improvements and Tenant shall execute an indemnity, reasonably satisfactory to
Landlord in form and content, prior to commencement of Tenant's Work.
(b) The design and construction of the Expansion Improvements shall be
carried out in accordance with the terms of sections 26.3(a)(ii) through
26.3(a)(ix), all of which shall be applicable to Tenant's Work pursuant to this
section 26.6.
(c) Notwithstanding that Tenant may pay for the construction of the
Expansion Improvements, if an Event of Default occurs, Landlord shall retain all
rights in law and equity against Tenant, including, without limitation, the
right to dispossess Tenant from the Expansion Improvements without compensation
for the cost thereof.
26.7 Anything in this Article 26 to the contrary notwithstanding, Tenant's
notice of exercise of the Expansion Option or the Tenant Subdivision Option or
the Leasehold Improvement Option shall be effective, only if at the time of such
notice of exercise the following conditions (the "Expansion Conditions") shall
be satisfied:
(i) Landlord shall not have notified Tenant that Tenant is in default
in the performance of any of the terms, covenants or conditions contained
in this Lease which default has not been cured within any applicable grace
period or cure period.
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(ii) This Lease shall not have been terminated and shall be in full
force and effect.
(iii) There shall have been no assignment of Tenant's interest in this
Lease except to a Corporate Successor as permitted by section 12.1 hereof.
Tenant acknowledges that the Expansion Option and all other rights of
Tenant under this Article 26 are personal to Tenant, and not a right of any
successor to the rights of Tenant under this Lease.
(iv) There shall have been no material adverse change in the financial
condition of Tenant or the Guarantor since the execution of this Lease, and
Landlord shall determine, at its sole reasonable discretion, that Tenant
and Guarantor are each creditworthy in light of the obligations undertaken
pursuant to this Lease and the other existing obligations of Tenant and
Guarantor.
26.8 Notwithstanding anything to the contrary herein, promptly after Tenant
accepts the proposal in Landlord's Specification Notice, or Landlord elects to
purchase the Expansion Improvements pursuant to section 26.3(a), or Tenant
exercises the Tenant Subdivision Option or the Leasehold Improvement Option, as
the case may be, Landlord and Tenant shall enter into an amendment to this Lease
(the "Lease Amendment") setting forth the terms of the expanded lease or the
terms relating to Tenant's Subdivision Option or Leasehold Improvement Option,
in form and substance mutually agreeable to Landlord and Tenant which shall be
consistent with the applicable terms of this Article 26.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the
date first hereinabove written.
Landlord: Tenant:
TRINET ESSENTIAL FACILITIES X, INC., ICG HOLDINGS, INC.,
a Maryland corporation a Colorado corporation
By /s/Gary P. Lyon By /s/ James D. Grenfell
----------------------------- ---------------------------
Gary P. Lyon James D. Grenfell
Its Executive Vice President Its Executive Vice President
and Chief Financial Officer
1
EXHIBIT A
TENANT ESTOPPEL CERTIFICATE
TO: TriNet Corporate Realty Trust, Inc. Four Embarcadero Center, Suite 3150 San
Francisco, CA 94111 Attn: Mr. Mark S. Whiting
Re: Lease, dated as of January 15, 1998, between ICG HOLDINGS, INC., a
Colorado corporation, as tenant (the original named tenant under the
Lease, together with such tenant's successors and assigns, being
hereinafter referred to as the "Tenant"), and TRINET ESSENTIAL
FACILITIES X, INC., a Maryland corporation, as landlord ("TriNet"),
covering certain premises known by the street address 161 Inverness
Drive West, in the City of Englewood, County of Arapahoe, State of
Colorado (the "Leased Premises"), as amended as noted on attached
Schedule A (collectively, the "Lease")
Gentlemen:
The undersigned Tenant hereby represents, warrants and certifies to TriNet
that:
1. The Lease has not been modified, changed, altered or amended in any
respect, either orally or in writing, except as may be indicated on Schedule A
annexed hereto, and constitutes the entire agreement between Tenant and TriNet
affecting Tenant's leasing of the Leased Premises. A true and correct copy of
the Lease is attached as Schedule B. The Lease is in full force and effect and
is not subject to any contingencies or conditions not set forth in the Lease.
2. The term of the Lease commenced on __________________, 1998, and will
expire on __________________, 2013; Tenant has two (2) successive options to
renew the Lease term, each for an additional period of ten (10) years.
3. Tenant has paid all fixed and additional rent and other sums which are
due and payable under the Lease through the date hereof, and Tenant has not made
and will not make any prepayments of fixed rent for more than one month in
advance. There are no presently unexpired rental concessions or abatements due
under the Lease except as set forth on Schedule A annexed hereto. Tenant has no
credits, offsets, abatements, defenses, counterclaims or deductions against any
rental or other payments due under the Lease or with respect to its performance
of the other terms and conditions of the Lease, and has asserted no claims
against TriNet.
2
4. Tenant has paid to TriNet a security deposit in the amount of
$___________. Tenant has not made any other the payments to TriNet as a security
deposit, advance or prepaid rent.
5. TriNet has completed, and, if required under the Lease, paid for, any
and all tenant work required under the Lease and Tenant has accepted the Leased
Premises. Tenant is not entitled to any further payment or credit for tenant
work.
6. To the best knowledge of Tenant, TriNet is not in default in the
performance of any of the terms of the Lease, nor is there now any fact or
condition which, with notice or lapse of time or both, will become such a
default. Tenant has not delivered to TriNet any notice of default with respect
to the TriNet's obligations under the Lease.
7. Tenant is in actual possession of the entire Leased Premises and, to the
best knowledge of Tenant, is not in any respect in default under any of the
terms and conditions of the Lease, nor is there now any fact or condition which,
with notice or lapse of time or both, will become such a default. Tenant has not
received from TriNet any notice of default with respect to Tenant's obligations
under the Lease.
8. Tenant has not assigned, transferred, mortgaged or otherwise encumbered
its interest under the Lease, nor subleased any of the Leased Premises, nor
permitted any person or entity to use the Leased Premises, except as otherwise
indicated on Schedule A annexed hereto.
9. Except as expressly provided in the Lease, Tenant
(i) does not have any right to renew or extend the term of the Lease,
(ii) does not have any right to cancel or surrender the Lease prior to
the expiration of the term of the Lease,
(iii) does not have any option or rights of first refusal or first
offer to purchase or lease all or any part of the Leased Premises or the
real property of which the Leased Premises are a part,
(iv) does not have any right, title or interest with respect to the
Leased Premises other than as lessee under the Lease, and
(v) does not have any right to relocate into other property owned by
TriNet or any of TriNet's affiliates.
3
10. There has not been filed by or against Tenant a petition in bankruptcy,
voluntary or otherwise, any assignment for the benefit of creditors, any
petition seeking reorganization or arrangement under the bankruptcy laws of the
United States, or any state thereof, or any other action brought under said
bankruptcy laws with respect to Tenant.
11. If Tenant is required to provide insurance coverage under the Lease,
Tenant has not given or received written notice that Tenant insurance coverage
will be canceled or will not be renewed.
12. To the best knowledge of Tenant, all systems, elements and components
of the Leased Premises are in good working order and repair and sound operating
condition. To the best knowledge of Tenant, Tenant's use and occupancy of the
Leased Premises complies with all applicable building, zoning, land use,
environmental, anti-pollution, health, fire, safety, access accommodations for
the physically handicapped, subdivision, energy and resource conservation and
similar laws, statutes, rules, regulations and ordinances, and all covenants,
conditions and restrictions applicable to the Leased Premises. Tenant has not
received any notice, citation or other claim alleging any violation of any such
law, statute, rule, regulation, ordinance, covenant, condition or restriction.
13. To the best knowledge of Tenant, any and all brokerage and leasing
commissions relating to and/or resulting from Tenant's execution and delivery of
the Lease and occupancy of the Leased Premises have been paid in full.
14. The individual executing this Tenant Estoppel Certificate on behalf of
Tenant represents and warrants that __he has the power and the authority to
execute this Tenant Estoppel Certificate on behalf of Tenant.
Dated this ____ day of _______________, 199_.
Tenant
ICG HOLDINGS, INC., a Colorado corporation
By:
Its:
4
SCHEDULE A
TO ESTOPPEL CERTIFICATE
5
SCHEDULE B
TO ESTOPPEL CERTIFICATE
1
EXHIBIT B
CONTINUING LEASE GUARANTY
THIS GUARANTY, made as of ___________ __, ____, by _______________________
("Guarantor") to TriNet Essential Facilities X, Inc., a Maryland corporation
("Landlord").
W I T N E S S E T H:
1. For valuable consideration, receipt of which is acknowledged, and to
satisfy certain requirements under the Lease dated January 15, 1998 (the
"Lease") between Landlord and ICG Holdings, Inc., a Colorado corporation
("Tenant"), Guarantor hereby absolutely, unconditionally and irrevocably
guarantees to Landlord, and agrees fully to pay, perform and discharge, as and
when payment, performance and discharge are due, all of the covenants,
obligations and liabilities of Tenant under the Lease and all amendments,
modifications, renewals, extensions, supplements, substitutions and replacements
of the Lease arising during the period beginning on the date hereof and ending
on the date this Guaranty is terminated (the "Guaranteed Obligations"). The
obligations of Guarantor under this Guaranty shall be absolute, unconditional
and irrevocable and shall continue and remain in full force and effect until all
of the Guaranteed Obligations have been fully paid, performed and discharged.
2. The obligations of Guarantor under this Guaranty shall not be affected,
modified or impaired by the occurrence of any of the following events, whether
or not with notice to, or the consent of, Guarantor: (a) the waiver, surrender,
compromise, settlement, release or termination of any or all of the Guaranteed
Obligations; (b) the failure to give notice to Guarantor of the occurrence of an
event of default under the Guaranteed Obligations; (c) the extension of the time
for the payment, performance or discharge of any or all of the Guaranteed
Obligations; (d) the amendment or modification (whether material or otherwise)
of the Guaranteed Obligations in any respect; (e) any failure, omission, delay
or lack on the part of Landlord to enforce, assert or exercise any right, power
or remedy conferred on Landlord under the Guaranteed Obligations; (f) the
voluntary or involuntary liquidation, dissolution, sale or other disposition of
all or substantially all of the assets, marshalling of assets and liabilities,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition with creditors or adjustment of debts,
or other similar proceedings affecting Tenant or Guarantor or any of the assets
of either of them; (g) the release or discharge by operation of law of Tenant
from the payment, performance or discharge of any or all of the Guaranteed
Obligations; (h) the release or discharge by operation of law of Guarantor from
any or all of the obligations of Guarantor under this Guaranty; or (i) the
invalidity or unenforceability of any or all of the Guaranteed Obligations.
Guarantor acknowledges that Landlord would not enter into the Lease without this
Guaranty and that Landlord is relying on this Guaranty.
2
3. The obligations of Guarantor under this Guaranty are independent of the
Guaranteed Obligations. Guarantor agrees that Landlord shall have the right to
proceed against Guarantor directly and independently of Tenant. A separate
action may be brought and prosecuted against Guarantor whether or not an action
is brought against Tenant or Tenant is joined in any such action. Guarantor
authorizes Landlord and Tenant, without notice to, demand of, or consent from
Guarantor and without releasing or affecting Guarantor's liability under this
Guaranty, from time to time to amend, modify, renew, extend, supplement or
replace the Guaranteed Obligations or otherwise change the terms of the
Guaranteed Obligations, to take and hold security for the Guaranteed
Obligations, and to enforce, waive, surrender, impair, compromise or release any
such security or any or all of the Guaranteed Obligations or any person or
entity liable for any or all of the Guaranteed Obligations. Guarantor shall be
and remain bound under this Guaranty notwithstanding any such act or omission by
Tenant or Landlord. Guarantor waives the right, if any, to require Landlord to
proceed against Tenant, to proceed against or exhaust any security held by
Landlord, or to pursue any other remedy in Landlord's power. Landlord shall have
the right to exercise or enforce any right or remedy Landlord may have against
Tenant or any security held by Landlord. Guarantor waives the right, if any, to
the benefit of, or to direct the application of, any security held by Landlord.
Guarantor waives (a) any defense arising out of any alteration of the original
Guaranteed Obligations, (b) any defense arising out of the absence, impairment
or loss of any right of reimbursement or subrogation or other right or remedy of
Guarantor against Tenant or any security held by Landlord, and (c) any defense
arising by reason of any disability or other defense of Tenant or by reason of
the cessation or reduction from any cause whatsoever of the liability of Tenant
other than full payment, performance and discharge of the Guaranteed
Obligations. The cessation or reduction of the liability of Tenant for any
reason whatsoever other than full payment, performance and discharge of the
Guaranteed Obligations shall not release or affect in any way the liability of
Guarantor under this Guaranty.
4. If Tenant becomes insolvent or is adjudicated bankrupt or files a
petition for reorganization, arrangement, composition or similar relief under
any present or future provision of the federal Bankruptcy Code, or if such a
petition is filed against Tenant, or if Tenant makes a general assignment for
the benefit of creditors, and in any such proceeding any or all of the
Guaranteed Obligations are terminated or rejected or any or all of the
Guaranteed Obligations are modified or abrogated, then Guarantor agrees that
Guarantor's liability under this Guaranty shall not thereby be affected or
modified and such liability shall continue in full force and effect as if no
such action or proceeding had occurred. This Guaranty shall continue to be
effective or be reinstated, as the case may be, if any payment of the Guaranteed
Obligations must be returned by Landlord upon the insolvency, bankruptcy or
reorganization of Tenant or Guarantor, or otherwise, as though such payment had
not been made.
3
5. Guarantor assumes the responsibility for being and keeping Guarantor
informed of the financial condition of Tenant and of all other circumstances
bearing upon the risk of failure to pay, perform or discharge any of the
Guaranteed Obligations which diligent inquiry would reveal, and Guarantor agrees
that Landlord has no duty to advise Guarantor of information known to Landlord
regarding such condition or any such circumstance. Guarantor acknowledges that
repeated and successive demands may be made and payments or performance made
hereunder in response to such demands as and when, from time to time, Tenant
defaults in the payment, performance or discharge of the Guaranteed Obligations.
Notwithstanding any such payments and performance hereunder, this Guaranty shall
remain in full force and effect and shall apply to any and all subsequent
defaults by Tenant. It is not necessary for Landlord to inquire into the
capacity, authority or powers of Tenant or the partners, directors, officers,
employees, agents or representatives acting or purporting to act on behalf of
Tenant, and all of the Guaranteed Obligations made or created in reliance upon
the purported exercise of such powers shall be guaranteed under this Guaranty.
6. If Tenant and Guarantor fail to pay, perform and discharge, as and when
payment, performance and discharge are due, all of the Guaranteed Obligations,
Landlord shall have the right, but no obligation, and without releasing Tenant
or Guarantor from any of the Guaranteed Obligations, to pay, perform and
discharge any or all of the Guaranteed Obligations on behalf of Tenant and
Guarantor. Guarantor shall, on demand, pay to Landlord all sums expended by
Landlord in the payment, performance and discharge of the Guaranteed
Obligations, together with interest on all such sums from the date of
expenditure to the date all such sums are paid by Tenant or Guarantor to
Landlord at the Interest Rate (as defined in the Lease). Guarantor waives all
presentments, demands for performance, notices of nonperformance, protests,
notices of protest, notices of dishonor and notices of acceptance of this
Guaranty. Guarantor agrees to pay all costs and expenses, including reasonable
attorneys' fees and disbursements, which are incurred by Landlord in the
enforcement of this Guaranty. If any provision of this Guaranty is held to be
invalid or unenforceable, the validity or enforceability of the other provisions
of this Guaranty shall not be affected. If there is more than one Guarantor, all
obligations of Guarantor under this Guaranty shall be the joint and several
obligations of each Guarantor. This Guaranty may not be amended or modified in
any respect except by a written instrument signed by Guarantor and Landlord. As
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used in this Guaranty, the singular shall include the plural. This Guaranty
shall bind and inure to the benefit of Guarantor and Landlord and their
respective transferees, personal representatives, heirs, successors and assigns.
This Guaranty shall be governed by and construed in accordance with the laws of
the State where the premises leased by Tenant from Landlord are located.
Guarantor hereby irrevocably consents to the non-exclusive jurisdiction of the
courts of the States of Colorado and California and any federal court of the
United States of America located in the City of San Francisco, California, or
the city of Denver, Colorado. Guarantor and Landlord each waive any right to
trial by jury in connection herewith. Without limiting anything else contained
herein, the fullest extent it may effectively do so under applicable law,
Guarantor irrevocably waives and agrees not to assert, by way of motion, as a
defense or otherwise, any claim that it is not subject to the jurisdiction of
any such court, any objection that it may now or hereafter have to the laying of
the venue of any such suit, action or proceeding brought in any such court and
any claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.
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7. To induce Landlord to enter into the Lease, Guarantor represents and
warrants to Landlord as follows: Guarantor is a corporation existing under the
laws of the ________ of _________. Guarantor has full power and authority to
enter into this Guaranty and to perform its obligations under this Guaranty. The
execution, delivery and performance of this Guaranty by Guarantor have been duly
and validly authorized by all necessary action on the part of Guarantor and all
required consents and approvals have been duly obtained. This Guaranty is a
legal, valid and binding obligation of Guarantor, enforceable against Guarantor
in accordance with its terms, subject to the effect of applicable bankruptcy,
insolvency, reorganization, arrangement, moratorium or other similar laws
affecting the rights of creditors generally. Neither the execution and delivery
of this Guaranty nor the consummation of the transactions contemplated hereby
will conflict with, or (with or without notice or lapse of time, or both) result
in a termination, breach, impairment or violation of, or give rise to a default
under (i) any provision of Guarantor's articles of incorporation or bylaws, (ii)
any material instrument or contract to which Guarantor is a party or by which
Guarantor is bound, or (iii) any federal, state, local or foreign judgment,
writ, decree, order, statute, rule or regulation applicable to Guarantor, or any
property of Guarantor.
IN WITNESS WHEREOF, Guarantor has executed this Continuing Lease Guaranty
as of the date first hereinabove written.
Guarantor:
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EXHIBIT C