Lease, dated October 29, 2014, between John Hancock Life Insurance Company (U.S.A.) and ACSH Service Center, LLC

Date of Lease:

October 29, 2014 (the “Effective Date”)

Landlord:

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.), a wholly owned subsidiary of Manulife Financial Corporation, a Michigan corporation (the “Landlord”)

Tenant:

ACSH SERVICE CENTER, LLC, a Delaware limited liability company (the “Tenant”)

Guarantor:

AMERICAN CARESOURCE HOLDINGS, INC., a Delaware corporation

Leased Premises:

Suite 2350 as shown on Schedule “B-1” attached hereto (the “Leased Premises”) which is located on the Twenty-third (23rd) floor of that certain building (the “Building”) with an address of 1170 Peachtree Street, Atlanta, Georgia 30309, commonly known as The Proscenium (the Leased Premises, the Building, together with the lands described in Schedule “A” attached hereto and present and future improvements, additions and changes thereto being herein called the “Property”).

of Leased Premises:

9,748 square feet, which is stipulated and agreed by the parties.

of Building:

520,094  square feet, which is stipulated and agreed by the parties as the current Rentable Area of the Building.

of Parking Spaces:

Unreserved parking spaces shall be made available to Tenant in the parking deck for the Building located across Crescent Avenue from the Building (the “Parking Deck”) at the ratio of two (2) unreserved parking spaces per 1,000 rentable square feet of the Leased Premises, rounded up to the nearest whole number (the “Parking Ratio”).  Of the spaces allotted to Tenant under the Parking Ratio, two (2) of such spaces may, at Tenant’s request, be reserved spaces for the exclusive use of Tenant in the parking garage located below the Building (the “Parking Garage”); the remainder of the parking spaces allotted to Tenant under the Parking Ratio shall be located in the Parking Deck.  All parking spaces provided to Tenant hereunder shall be subject to payment of the prevailing rates for such spaces, which, as of the Effective Date hereof, are Ninety Dollars ($90.00) per month for each of the unreserved spaces in the Parking Deck; One Hundred Thirty-five Dollars ($135.00) per month for reserved spaces in the Parking Deck; and One Hundred Eighty Dollars ($180.00) per month for each of the reserved spaces in the Parking Garage.  Such parking rates shall be subject to increase upon thirty (30) days prior written notice to Tenant; provided however, that such increased rental rate shall be consistent with parking charges assessed at a majority of Class-A multi-tenant office buildings located in the Midtown, Atlanta submarket that are of similar age, character, quality, size and location to, and which have amenities that are comparable to the amenities of the Building (the “Comparable Buildings”).

Commencement Date:

November 1, 2014 (the “Commencement Date”)

Term:

The “Term” shall commence on the Commencement Date and shall end, unless terminated earlier or extended in accordance with the Option to Renew (if any) set forth in this Lease, on the last day of the month that is Sixty-six (66) months after the month immediately preceding the Commencement Date; provided, however, if the Commencement Date does not occur on the first day of a calendar month, then the Term shall end on the last day of the month that is Sixty-six (66) months after the month in which the Commencement Date occurs.

Option to Renew:

See Schedule “H” attached to the Lease.

Basic Rent:

For each Lease Year, “Basic Rent” shall be as set forth in the table below.  For purposes hereof, “Lease Year” shall mean each and every consecutive twelve (12) month period during the Term, with the first such twelve (12) month period commencing on the Commencement Date; provided, however, that (i) if the Commencement Date does not occur on the first day of a calendar month, then the first Lease Year shall be that partial month plus the first full twelve (12) calendar months thereafter; and (ii) the last Lease Year shall end upon the expiration of the Term.

Security Deposit:

$48,333.84 (the “Security Deposit”).

Allowance:

See Schedule “F-1” attached hereto

Notices:

Tenant’s Address for Notices prior to the Commencement Date:

Landlord’s Real Estate Broker:

N/A

 

 

 

 

 

 

 

(g)  Provided that Tenant is not in default under any term, condition or obligation of the Lease beyond any applicable notice and cure period at the time of the abatement provided below, Tenant’s monthly installment of Basic Rent shall be abated for the first nine (9) full months (as such period may be increased pursuant to Section 2(b) of this Lease) of the Term of this Lease (the “Abatement Period”), in the amount of Twenty-four Thousand, One Hundred Sixty-six and 92/100 Dollars ($24,166.92) per month, for a total abatement of Two Hundred Seventeen Thousand, Five Hundred Two and 28/100 Dollars ($217,502.28) (the “Abated Rent”).  This provision shall not be construed to abate any other sums that may fall due under the terms of this Lease during the Abatement Period, other than the monthly installments of Basic Rent stated above.  The Abated Rent, together with interest thereon calculated at the rate of twelve percent (12%) simple interest per annum (the “Interest Rate”), shall be amortized over the Term of the Lease.  So long as Tenant does not default in its monetary obligations under this Lease, and fail to cure such default within the applicable period of cure, if any, provided under this Lease, then upon Landlord’s receipt of the final monthly installment of Rent due during the Term, Tenant shall have no liability to Landlord for the repayment of any portion of the Abated Rent or the interest thereon that was amortized over the Term. In the event that Tenant shall default in any of its monetary obligations under this Lease, and Tenant shall fail to cure such defaults within the applicable notice and cure periods, if any, specified in this Lease, then in addition to all of Landlord’s other remedies available under the Lease, Tenant shall also become immediately liable to Landlord for the unamortized portion of the Abated Rent existing as of the date of such uncured monetary default, and interest shall accrue thereon at the Default Rate until such sum is paid in full.

 

 

 

(i)

upon payment by Tenant of the Rents herein provided, and upon the observance and performance of all the covenants, terms and conditions on Tenant’s part to be observed and performed hereunder, Tenant shall peaceably and quietly hold and enjoy the Leased Premises for the Term without hindrance by Landlord or any other person or persons lawfully claiming by, through or under Landlord, subject, however, to the terms and conditions of this Lease and all matters of public record;

(ii)

to observe and perform all the covenants and obligations of Landlord herein; and

(iii)

to maintain the Common Areas and Facilities in compliance with all applicable laws, including the Americans With Disabilities Act and all governmental regulations related to the same as the same may become effective, applicable and interpreted from time to time (“ADA”) at Landlord’s initial expense, the cost of which may be included in Operating Costs to the extent permitted under Schedule D.

 

 

 

 

 

 

 

 

(i)

the Rent paid by Tenant to Landlord during the term of the Transfer; and

(ii)

any reasonable and customary out of pocket transaction costs incurred by Tenant in connection with such Transfer including attorneys’ fees, brokerage commissions, cash inducements and alteration costs (which transaction costs shall be amortized on a straight line basis over the term of the Transfer).

 

(a)

(i)       Landlord covenants with Tenant:

 

(A)

to keep in a good and  reasonable state of repair and decoration the Common Areas and Facilities, the Building (excluding the Leased Premises and premises of other tenants) and the exterior portions of the Building (including foundations, walls and roof) and other structures from time to time forming a part of the Property and affecting its general appearance; and

 

(B)

to repair, so far as reasonably feasible, and as expeditiously as reasonably feasible, defects in Building standard demising walls within the Leased Premises, structural elements of the Leased Premises and standard mechanical (including HVAC), electrical, plumbing and fire/life safety systems serving the Building generally (if and to the extent that such defects are sufficient to impair Tenant’s use of the Leased Premises while using them in a manner consistent with this Lease).  Landlord shall in no event be required to make repairs or replacements to Leasehold Improvements within the Leased Premises made by Tenant, or by Landlord on behalf of Tenant or a prior tenant, or to make repairs to wear and tear within the Leased Premises.  Landlord shall exert commercially reasonable efforts to commence and complete any repairs to the Leased Premises that Landlord is required to make hereunder within thirty (30) days after Landlord’s receipt of written notice from Tenant of the need for such repairs.

 

(ii)

Landlord shall not be liable for any failure to make any such repairs or to perform any maintenance unless such failure shall persist for an unreasonable time after written notice of the need of such repairs or maintenance is given to Landlord by Tenant.  If any of the foregoing maintenance or repair is necessitated due to the acts or omissions of Tenant or any employee, agent, contractor or invitee of Tenant, Tenant shall pay the costs of such repairs or maintenance to Landlord within thirty (30) days after receipt of an invoice, together with an administrative charge in an amount equal to fifteen percent (15%) of the cost thereof.  Landlord shall not be liable to Tenant for any interruption of Tenant’s business or inconvenience caused due to any work performed in the Leased Premises pursuant to Landlord’s rights and obligations under this Lease.

(iii)

The cost of any repairs or replacements made by Landlord hereunder shall be included in Operating Costs, subject to the terms and limitations set forth on Schedule “D” attached hereto.

(i)

in the event of damage to the Property or to any part thereof, if in the reasonable opinion of Landlord the damage is such that the Leased Premises or any substantial part thereof is rendered not reasonably capable of use and occupancy by Tenant for the purposes of its business for any period of time in excess of ten (10) consecutive days, then

(A)

unless the damage was caused by the fault or negligence of Tenant or its employees, agents, contractors, invitees or others under its control, from the date of occurrence of the damage until Landlord has completed the repairs required of Landlord hereunder, the Rent payable pursuant to this Lease shall abate from time to time in proportion to the part or parts of the Leased Premises damaged and not reasonably capable of use and occupancy and which in fact are not used by Tenant, and

(B)

unless this Lease is terminated as hereinafter provided, Landlord and/or Tenant as the case may be (according to the nature of the damage and their respective obligations to repair as provided in Sections 8(a) and 8(b) above) shall repair such damage with all reasonable diligence;

(ii)

if the damage is such that the Leased Premises are rendered untenantable, in whole or in part, and if, in the opinion of Landlord, the damage cannot be repaired with reasonable diligence within one hundred eighty (180) days from the occurrence of the damage, or if the damage is not covered by Landlord’s property insurance, or if Landlord’s lender requires that applicable insurance proceeds be applied to its loan rather than being used for reconstruction, or if said damage or destruction occurs within the last twelve (12) months of the Term, then in any of the foregoing events Landlord may, within thirty (30) days after the date of the damage, terminate this Lease by notice to Tenant.  Upon Landlord giving such notice, this Lease shall be terminated as of the date of the damage, Tenant shall vacate and surrender the Leased Premises as otherwise required by this Lease on expiration of the Term and the Rent and all other payments for which Tenant is liable under the terms of this Lease shall be apportioned and paid in full to the date of the damage;

(iii)

Landlord shall not be required to use plans and specifications and working drawings used in the original construction of the Building and nothing in this subsection requires Landlord to rebuild the Building in the condition and state that existed before the damage, but the Building, as rebuilt, will have reasonably similar facilities and services to those in the Building prior to the damage;

(iv)

if premises whether of Tenant or other tenants of the Property comprising in the aggregate half or more of the total number of square feet of rentable office area in the Property or half or more of the total number of square feet of rentable office area in the Building (as determined by Landlord) or portions of the Property which affect access or services essential thereto, are substantially damaged or destroyed by any cause and if in the reasonable opinion of Landlord the damage cannot reasonably be repaired within one hundred eighty (180) days from the happening of the damage, or if the damage is not covered by Landlord’s property insurance, or if Landlord’s lender requires that applicable insurance proceeds be applied to its loan rather than being used for reconstruction, or if said damage or destruction occurs within the last twelve (12) months of the Term, then in any of the foregoing events Landlord may, by written notice to Tenant given within thirty (30) days after the occurrence of such damage or destruction, terminate this Lease, in which event neither Landlord nor Tenant shall be required to make any repairs hereunder, and Tenant shall instead deliver possession of the Leased Premises to Landlord with reasonable diligence but in any event within sixty (60) days after delivery of such notice of termination if the damage or destruction is to the Leased Premises and Tenant is not, following such damage or destruction, then using any substantial portion of the Leased Premises, or within one hundred twenty (120) days after delivery of such notice of termination if the damage or destruction is to the Common Areas and Facilities or other portions of the Building exclusive of the Leased Premises and Tenant, following such damage or destruction, continues to use any substantial portion of the Leased Premises, and Rent shall be apportioned and paid to the date upon which Tenant surrenders possession of the Leased Premises to Landlord (but subject to any abatement to which Tenant may be entitled under Section 7(e)(i)(A) above); and

 

(v)

Notwithstanding anything herein to the contrary, in the event Landlord does not complete its required restoration of the Leased Premises within three hundred sixty-five (365) days after receiving insurance proceeds to be used for such restoration, Tenant shall be entitled to terminate this Lease by giving Landlord written notice of intent to terminate within ten (10) days after expiration of such 365 day period. However, if at any time Landlord believes it will be unable to complete restoration within such 365 day period, it shall be entitled to notify Tenant in writing of Landlord’s estimated time frame for completion of restoration and if Tenant fails to cancel this Lease by notice of cancellation given to Landlord within 10 days following Landlord’s written notice, such 365 day period shall automatically be extended to the last day of Landlord’s estimated time frame.

 

(i)

commercial general liability insurance on an all occurrence basis with respect to the business carried on, in or from the Leased Premises and Tenant’s use and occupancy of the Leased Premises and of any other part of the Property, with coverage for any one occurrence or claim of not less than Five Million Dollars ($5,000,000) or such other amount as Landlord may reasonably require upon not less than one (1) month’s notice at any time during the Term, which insurance shall include Landlord (as well as any mortgagee of Landlord and any other party reasonably designated by Landlord) as an additional insured and shall contain a cross liability clause protecting Landlord in respect of claims by Tenant as if Landlord were separately insured;

 

(ii)

“Causes of Loss – Special Form” property insurance covering the Leasehold Improvements, trade fixtures, furniture, equipment and personal property in the Leased Premises for not less than eighty percent (80%) of the full replacement cost thereof, and which insurance shall include Landlord as a loss payee as its interest may appear;

 

(iii)

Workers’ compensation and employer’s liability insurance affording statutory coverage and containing statutory limits with the employer’s liability portion thereof to have minimum limits of $1,000,000.00;

 

(iv)

business interruption insurance in an amount that will reimburse Tenant for direct or indirect loss of earnings attributable to all perils insured against under Sections 9(b)(i) and (ii) above and other perils commonly insured against by prudent business owners, or attributable to prevention of access to the Leased Premises for a period of at least eighteen (18) months; and

 

(v)

insurance against such other perils and in such amounts as Landlord may from time to time reasonably require upon not less than ninety (90) days’ written notice, such requirement to be made on the basis that the required insurance is customary at the time for prudent tenants of properties similar to the Property.

 

 

 

(i)

all claims for bodily injury or death, property damage or other loss or damage arising from within the Leased Premises or the conduct of any work or any act or omission of Tenant or any Transferee, agent, employee, contractor, invitee or licensee of Tenant, and in respect of all costs (including, without limitation, attorneys’ fees and disbursements, through all appeals), expenses and liabilities incurred by Landlord in connection with or arising out of all such claims including without limitation the expenses of any action or proceeding pertaining thereto; and

 

(ii)

any loss, cost (including, without limitation, attorneys’ fees and disbursements, through all appeals), expense or damage suffered by Landlord arising from any breach by Tenant of any of its covenants and obligations under this Lease.

 

 

 

(i)

all claims for bodily injury or death, property damage or other loss or damage arising from the gross negligence or willful misconduct Landlord, its agents, employees, or contractors, including all costs, expenses and liabilities incurred by Tenant in connection with or arising out of all such claims, including the expenses of any action or proceeding pertaining thereto; and

 

(ii)

any loss, cost, (including, without limitation, attorneys' fees and disbursements, through all appeals), expense or damage suffered by the Tenant arising from any breach by the Landlord of any of its covenants and obligations under this Lease.

 

 

 

(i)

Tenant shall have failed to pay any installment of Rent or any other amount payable hereunder when due, and such failure shall continue for a period of more than ten (10) days after written notice thereof is sent to Tenant by Landlord; provided, however, if Tenant fails to pay any installment of Rent or any other amount payable hereunder when due twice in any twenty-four (24) month period, then any subsequent failure by Tenant within the next twenty-four (24) months to pay any installment of Rent or any other amount payable hereunder when due shall be deemed an Event of Default for purposes of this Lease and Tenant shall not be entitled to any notice or cure period;

 

(ii)

Tenant shall breach any of the terms or provisions of this Lease or fail to perform or abide by any of its covenants or obligations under this Lease (other than a default referenced in Sections 10(a)(i), 10(a)(iii), 10(a)(iv), 10(a)(v), 10(a)(vi) and 10(a)(vii) herein), and such breach or failure is not cured by Tenant within thirty (30) days after Landlord sends Tenant written notice of same; provided, however, that if such breach or failure is of such a nature that it cannot through the exercise of diligent and reasonable efforts be cured within said thirty (30) days, then Tenant shall not be in default in such instance if Tenant promptly commences its cure within said thirty (30) day period and thereafter diligently pursues the cure to completion, except in no event shall Tenant be given more than forty-five (45) days after such initial notice in which to cure such breach or failure;

 

(iii)

if any policy of insurance upon the Property or any part thereof from time to time effected by Landlord shall be canceled or is about to be canceled by the insurer by reason of the use or occupancy of the Leased Premises by Tenant or any assignee, sub-tenant or licensee of Tenant or anyone permitted by Tenant to be upon the Leased Premises and Tenant after receipt of notice in writing from Landlord shall have failed to take such immediate steps in respect of such use or occupation as shall enable Landlord to reinstate or avoid cancellation (as the case may be) of such policy of insurance;

 

(iv)

the Leased Premises shall, without the prior written consent of Landlord, be used by any person or entity other than Tenant, a Controlled Tenant, or a permitted Transferee or for any purpose other than the Permitted Use or by any person or entity whose occupancy is prohibited by this Lease;

 

(v)

the Leased Premises shall be vacated or abandoned, or remain unoccupied without the prior written consent of Landlord for fifteen (15) consecutive days or more while capable of being occupied;

 

(vi)

the balance of the Term of this Lease or any of the goods and chattels of Tenant located in the Leased Premises, shall at any time be seized in execution or attachment; or

 

(vii)

Tenant, Guarantor or any other person occupying the Leased Premises or any part thereof shall make any assignment for the benefit of creditors or become bankrupt or insolvent or take the benefit of any statute for bankrupt or insolvent debtors or, if a corporation, shall take any steps or suffer any order to be made for its winding-up or other termination of its corporate existence; or a trustee, receiver or receiver-manager or agent or other like person shall be appointed over any of the assets of Tenant, Guarantor or any other person occupying the Leased Premises or any part thereof.

 

 

(i)

to remedy or attempt to remedy any default of Tenant, and in so doing to make any payments due or alleged to be due by Tenant to third parties and to enter upon the Leased Premises to do any work or other things therein, and in such event all reasonable expenses of Landlord in remedying or attempting to remedy such default (including all reasonable attorney fees and costs and Landlord’s reasonable administrative charge therefore) shall be payable by Tenant to Landlord on demand;

 

(ii)

to terminate this Lease immediately by leaving upon the Leased Premises or by affixing to an entrance door to the Leased Premises notice terminating this Lease and to immediately thereafter cease to furnish any services hereunder and enter into and upon the Leased Premises or any part thereof in the name of the whole and the same to have again, re-possess and enjoy as of its former estate, anything in this Lease contained to the contrary notwithstanding.  TENANT HEREBY EXPRESSLY WAIVES ANY AND ALL NOTICES (other than those notices specifically outlined in this Lease) TO CURE OR VACATE OR TO QUIT THE LEASED PREMISES PROVIDED BY CURRENT OR FUTURE LAW;

 

(iii)

to terminate Tenant’s occupancy of the Leased Premises without terminating this Lease, in which event, Tenant shall remain liable for the Rent and all other obligations accruing over the balance of the Term, even after eviction of Tenant from the Leased Premises, and thereafter enter the Leased Premises as agent of Tenant and as such agent  to re-let them and to receive the rent therefor and as the agent of Tenant to take possession of any furniture or other property thereon and  upon  giving ten (10) days’  written  notice to Tenant to store the same at the expense and risk of Tenant or to sell or otherwise dispose of the same at public or private sale without further notice and to apply the proceeds thereof and any rent derived from re-letting the Leased Premises first to the costs incurred by Landlord in accomplishing any such re-letting (including, without limitation, brokerage commissions, attorney fees, inducements and any costs incurred to bring the Leased Premises into satisfactory condition for the subsequent tenant) and sale, and thereafter upon account of the Rent due and to become due under this Lease and Tenant shall be liable to Landlord for the deficiency if any (however, Tenant shall not be entitled to any excess rent received by Landlord from such re-letting);

 

(iv)

to recover from Tenant the unamortized portion of the Disbursed Allowance (defined in Schedule F-1, and amortized as provided in Schedule F-1), and the unamortized portions of any other costs, such as leasing commissions, incurred by Landlord in connection with this transaction, existing as of the date of the uncured Event of Default; provided, however, that if Landlord elects to exercise its rights under Paragraph 10(c) of this Lease to accelerate the Rent due from Tenant for the balance of the Term, in accordance with the terms of such paragraph, and Landlord obtains a judgment for, or is paid by Tenant, the entire amount of such accelerated sum, then such judgment for or payment of such accelerated sum shall preclude a separate recovery by Landlord under the foregoing terms of this paragraph of the unamortized portion of the Disbursed Allowance and such other costs; and

 

(v)

to invoke any remedy allowed at law or in equity, including the right of injunction, and the provision in this Lease of any particular remedy shall not preclude Landlord from any other remedy at law or in equity.  TENANT HEREBY EXPRESSLY WAIVES ANY AND ALL RIGHTS OF REDEMPTION OR TO ANY NOTICE TO QUIT GRANTED BY OR UNDER ANY PRESENT OR FUTURE LAWS IN THE EVENT OF THIS LEASE BEING TERMINATED AND/OR LANDLORD OBTAINING POSSESSION OF THE LEASED PREMISES PURSUANT TO THE PROVISIONS OF THIS SECTION.

 

 

 

 

(i)

Landlord shall have no obligation to solicit or entertain negotiations with any other prospective tenants for the Leased Premises until Landlord obtains full and complete possession of the Leased Premises including, without limitation, the final and unappealable legal right to re-let the Leased Premises free of any claim of Tenant;

 

(ii)

Landlord shall not be obligated to offer the Leased Premises to any prospective tenant when other Leased Premises in the Building suitable for that prospective tenant’s use are currently available, or will be available within the next six months;

 

(iii)

Landlord shall not be obligated to lease the Leased Premises to a substitute tenant for a rental less than the current fair market rental then prevailing for similar space in comparable buildings in the same market area as the Building;

 

(iv)

Landlord shall not be obligated to enter into a new lease under terms and conditions that are unacceptable to Landlord under Landlord’s then current leasing policies for comparable space in the Building;

 

(v)

Landlord shall not be obligated to enter into a lease with any proposed substitute tenant that does not have, in Landlord’s reasonable opinion, sufficient financial resources or operating experience to operate the Leased Premises in a first-class manner; and

 

(vi)

Landlord shall not be required to expend any amount of money to alter, remodel, or otherwise make the Leased Premises suitable for use by a substitute tenant unless Tenant pays any such sum to Landlord in advance of Landlord’s execution of a lease with such substitute tenant (which payment shall not be in lieu of any damages or other sums to which Landlord may be entitled to as a result of Tenant’s default under this Lease).

 

(ii)

such financial information concerning Tenant and Tenant’s business operations as may be reasonably requested by Landlord, any prospective purchaser of the Property (or portion thereof including the Leased Premises) or any lessor or mortgagee; provided, however, that so long as current financial information of Tenant (or Guarantor, so long as the Guaranty is then in full force and effect) is included in a public filing at the time such financial information is requested, such financial information shall be limited to the information contained in such public filing.

 

 

(i)

strikes or work stoppages;

 

(ii)

being unable to obtain any material, service, utility or labor required to perform such obligation;

 

(iii)

riots, insurrection, war, acts of God, fire or other casualty;

 

(iv)

any statute, law or regulation of, or inability to obtain any permission from any government authority having lawful jurisdiction preventing, delaying or restricting such performance;

 

(v)

inability to obtain any necessary governmental permits (including building permit) for construction of Landlord’s Work (only for purposes of this Section 11(e), “Landlord’s Work” means any work that Landlord is required to perform pursuant to Schedule “F”) within 30 days after application for any reason other than Landlord having filed an incomplete application for any of such permits or having filed plans for Landlord’s Work that do not comply with applicable laws;

 

(vi)

changes required in the scope of Landlord’s Work by any governmental authority having jurisdiction thereof; or

 

(vii)

other unavoidable occurrence,

 

 

 

 

 

Guaranty

(t)    This Lease has been entered into by Landlord in reliance upon Tenant’s representation that Tenant’s obligations hereunder will be guaranteed by Guarantor.  Contemporaneously with Tenant’s execution of this Lease, Tenant shall have the Guaranty attached hereto as Schedule I  executed by Guarantor, and shall deliver such executed Guaranty to Landlord contemporaneously with Tenant’s delivery of this executed Lease to Landlord.  In the event that Tenant shall fail to deliver such executed Guaranty to Landlord contemporaneously with Tenant’s delivery of this executed Lease, then this Lease shall be voidable at Landlord’s sole option upon written notice to Tenant forwarded no later than thirty (30) days following the Commencement Date of this Lease.

 

 

 

 

 

1.(a)

Tenant covenants to pay all Tenant’s Taxes (as defined below), as and when the same become due and payable. Where any Tenant’s Taxes are payable by Landlord to the relevant taxing authorities, Tenant covenants to pay the amount thereof to Landlord upon demand.

(b)

Tenant covenants to pay to Landlord, or to the taxing authority as Landlord may direct from time to time, Tenant’s Proportionate Share (as defined below) of the amount of Landlord’s Taxes (as defined below) in each Fiscal Period over the Landlord’s Taxes in the “Base Year” (as hereinafter defined).

(c)

Tenant covenants to pay to Landlord Tenant’s Proportionate Share of the costs and expenses (including legal and other professional fees and interest and penalties on deferred payments) incurred in good faith by Landlord in contesting, resisting or appealing any of the Taxes (as defined below).

(d)

Landlord covenants to pay all Landlord’s Taxes subject to the payments on account of Landlord’s Taxes required to be made by Tenant elsewhere in this Lease.  Landlord may appeal any official assessment or the amount of any Taxes or other taxes based on such assessment and relating to the Property. In connection with any such appeal, Landlord may defer payment of any Taxes or other taxes, as the case may be, payable by it to the extent permitted by law, and Tenant shall cooperate with Landlord and provide Landlord with all relevant information reasonably required by Landlord in connection with any such appeal.

(e)

In the event that Landlord is unable to obtain from the taxing authorities any separate allocation of Landlord’s Taxes, Tenant’s Taxes or assessment as required by Landlord to make calculations of Additional Rent under this Lease, such allocation shall be made by Landlord acting reasonably.

(f)

Whenever requested by Landlord, Tenant shall deliver to Landlord receipts for payment of all Tenant’s Taxes and furnish such other information in connection therewith as Landlord may reasonably require.

(g)

If the Building has not been taxed as a completed and fully occupied building for any Fiscal Period, Landlord’s Taxes will be determined by Landlord as if the Building had been taxed as a completed building fully occupied by commercial tenants for any such Fiscal Period.

(a)

“Landlord’s Taxes” shall mean the aggregate of all Taxes attributable to the Property, the Rent or Landlord in respect thereof and including, without limitation, any amounts imposed, assessed, levied or charged in substitution for or in lieu of any such Taxes, but excluding such taxes as capital gains taxes, corporate income, profit or excess profit taxes to the extent such taxes are not levied in lieu of any of the foregoing against the Property or Landlord in respect thereof, and excluding any interest or penalties incurred by Landlord for failure to timely pay such Taxes when due;

(b)

“Taxes” shall mean all taxes, rates, duties, levies, fees, charges, local improvement rates, capital taxes, gross receipt taxes, franchise taxes, transfer taxes, rental taxes and assessments (special or otherwise) of any kind, including, without limitation, fees, rents, levies and assessments imposed, assessed, levied or charged by any school, municipal, regional, state, provincial, federal, or other body, corporation, authority, agency or commission (including special taxing districts), provided that “Taxes” shall not include any special utility, levies, fees or charges imposed, assessed, levied or charged which are directly associated with initial construction of the Property;

(c)

“Tenant’s Taxes” shall mean all Taxes (whether imposed upon Landlord or Tenant) attributable to the personal property, trade fixtures, business, income, occupancy or sales of Tenant or any other occupant of the Leased Premises, and to any Leasehold Improvements or fixtures installed by or on behalf of Tenant within the Leased Premises, and to the use by Tenant of any of the Property; and

 

(d)

“Tenant’s Proportionate Share” shall mean 1.874 percent (1.874%) (determined by dividing 9,748 square feet of Rentable Area of the Leased Premises by 520,094 square feet of Rentable Area of the Building, both as set forth in the BLI Rider), subject to adjustment as reasonably determined by Landlord and notified to Tenant in writing for physical increases or decreases in the total Rentable Area of the Building provided that the total Rentable Area of the Building and the Rentable Area of the Leased Premises shall exclude areas designated (whether or not rented) for parking and for storage.

1.

Landlord covenants with Tenant:

 

(a)

To maintain in the Leased Premises conditions of reasonable temperature and comfort in accordance with good standards applicable to normal occupancy of premises for office purposes subject to governmental regulations during hours to be determined by Landlord (“Normal Business Hours”) (but to be at least the hours from 8:00 a.m. to 6:00 p.m., Monday through Friday, and from 9:00 a.m. to 1:00 p.m. on Saturdays as long as Saturday hours are customary in similar office buildings in the local business district in which the Building is located, except Landlord shall not be obligated to provide such service on Sundays and any nationally recognized holidays, such conditions to be maintained by means of a system for heating and cooling, filtering and circulating air. At times other than the Normal Business Hours and days aforesaid, central air conditioning and heating shall be provided to Tenant upon notice not later than 2:00 p.m. on the business day it is required, and not later than 2:00 p.m. on Friday for service on weekends, and upon payment by Tenant of the hourly charge established by Landlord for each hour (or a portion) of after-hours HVAC usage.  As of the date hereof, the charge for the provision by Landlord of after-hours HVAC service is $25.00 per hour, per floor, for which Tenant requests that Landlord provide such services. Landlord shall have no responsibility for any inadequacy of performance of the said system if the occupancy of the Leased Premises or the electrical power or other energy consumed on the Leased Premises for all purposes exceeds reasonable amounts as determined by Landlord, or if Tenant installs partitions or other installations in locations which interfere with the proper operation of the system of interior climate control or if the window covering on exterior windows is not kept fully closed;

 

(b)

To provide janitor and cleaning services to the Leased Premises and to Common Areas and Facilities of the Building consisting of reasonable services five (5) days per week in accordance with the standards of similar office buildings; and

 

(c)

To  keep available the  following  facilities  for use by Tenant and its  employees and invitees in common with other persons entitled thereto:

(i)

passenger and freight elevator service to each floor upon which the Leased Premises are located provided such service is installed in the Building and provided that Landlord may prescribe the hours during which and the procedures under which freight elevator service shall be available and may limit the number of elevators providing service outside Normal Business Hours;

 

(ii)

common entrances, lobbies, stairways and corridors giving access to the Building and the Leased Premises, including such other areas from time to time which may be provided by Landlord for common use and enjoyment within the Property; and

 

(iii)

the washrooms as Landlord may assign from time to time which are standard to the Building, provided that Landlord and Tenant acknowledge that where an entire floor is leased to Tenant or some other tenant, then Tenant or such other tenant, as the case may be, may exclude others from the washrooms thereon.

 

(d)

To provide security services for the Building and the parking facilities twenty-four (24) hours per day, seven (7) days per week, including video surveillance at multiple points within the Building and the Parking Facilities; provided, however, that the provision of such security services shall not create any liability of Landlord for any injury, damage or loss sustained by Tenant, its agents, employees and visitors, and unless such injury, damage or loss is the result of Landlord’s gross negligence or willful misconduct, Tenant hereby releases Landlord from all liability for such injury, damage or loss.

 

 

2.

(a)

Landlord covenants with Tenant that Landlord shall have the sole right to furnish electricity to the Leased Premises (except Leased Premises which have separate meters) for normal office use for lighting and for office equipment capable of operating from the circuits available to the Leased Premises and standard to the Building twenty-four (24) hours a day, three hundred sixty-five (365) days a year;

 

 

(b)

In the event that (i) Landlord reasonably determines that the amount of electricity consumed on the Leased Premises exceeds the amount of electricity required for normal professional office use, or (ii) Tenant installs one or more supplemental HVAC units in, or which service, the Leased Premises, then Landlord may require Tenant to install metering or submetering devices (for measuring the consumption of electricity in the Leased Premises) approved by Landlord at Tenant’s expense. Tenant shall pay Landlord for the cost of any such excess electricity on demand.  Tenant shall remove all supplemental HVAC units, and all meters or submeters installed by Tenant, from the Building prior to the end of the Term, and prior to the end of the Term, Tenant shall restore the portions of the Leased Premises and the Building affected by such removal to their condition immediately prior to the installation of such equipment.

(c)

Tenant covenants to pay to Landlord Tenant’s Proportionate Share (as defined below) of the cost of all electricity consumed on the Property (except the amounts recovered from and paid by tenants separately metered).

(d)

In calculating electricity costs for any Fiscal Period, if less than one hundred percent (100%) of the Building is occupied by tenants, then the amount of such electricity costs shall be deemed for the purposes of this Schedule to be increased to an amount equal to the like electricity costs which normally would be expected by Landlord to have been incurred had such occupancy been one hundred percent (100%) during such entire period.

 

3.        Landlord shall maintain and keep in repair the facilities required for the provision of the interior climate control, elevator (if installed in the Building) and other services referred to in Paragraphs 1(a), 1(c) and 2(a) of this Schedule in accordance with the standards of office buildings similar to the Building but reserves the right to stop the use of any of these facilities and the supply of the corresponding services when necessary by reason of accident or breakdown or during the making of repairs, alterations or improvements, in the reasonable judgment of Landlord necessary or desirable to be made, until the repairs, alterations or improvements shall have been completed to the satisfaction of Landlord.

 

4.

(a)

Landlord may (but shall not be obligated) on request of Tenant supply services  or materials to the Leased Premises and the Property which are not provided for under this Lease and which are used by Tenant (the “Additional Services”) including, without limitation,

 

(i)        replacement of tubes and ballasts; (ii)      carpet shampooing; (iii)    window covering cleaning; (iv)    locksmithing; (v)     removal of bulk garbage; (vi)    picture hanging; and (vii)  special security arrangement.

 

(b)

When Additional Services are supplied or furnished by Landlord, accounts therefor shall be rendered by Landlord and shall be payable by Tenant to Landlord on demand. In the event Landlord shall elect not to supply or furnish Additional Services, only persons with prior written approval by Landlord (which approval shall not be unreasonably withheld) shall be permitted by Landlord or Tenant to supply or furnish Additional Services to Tenant and the supplying and furnishing shall be subject to the reasonable rules fixed by Landlord with which Tenant undertakes to cause compliance and to comply with said rules.

(b)

Subject to the other terms and conditions of this Lease, Landlord shall not be responsible during the Term for any costs, charges, expenses and outlays of any nature whatsoever arising from or relating to the Leased Premises and Tenant shall pay all charges, impositions, costs and expenses of every nature and kind relating to the Leased Premises and the amounts included as Additional Rent whether or not specifically provided for herein and Tenant covenants with Landlord accordingly;

 

(c)

In this Lease “Operating Costs” shall include all costs incurred or which will be incurred by Landlord in discharging its obligations under this Lease and in the maintenance, operation, administration and management of the Property including without limitation:

(i)

cost of heating, ventilating and air-conditioning;

(ii)

cost of water and sewer charges;

(iii)

cost of electricity, fuel or other form of energy which are not separately metered and paid by tenants;

(iv)

costs of insurance carried by Landlord pursuant to paragraph 9(a) of this Lease and cost of any deductible amount paid by Landlord in connection with each claim made by Landlord under such insurance;

(v)

an administrative and management fee;

(vi)

cost of building office expenses, including telephone, rent, stationery and supplies;

(vii)

costs of all elevator and escalator (if installed in the Building) maintenance and operation;

(viii)

costs of operating staff, management staff and other administrative personnel, including salaries, wages, and fringe benefits;

(ix)

cost of providing security and costs of repair, maintenance and replacement of communications, fire and life safety systems serving the Property;

(x)

cost of providing janitorial services, window cleaning, garbage and snow removal and pest control;

(xi)

cost of supplies and materials;

(xii)

cost of decoration of Common Areas and Facilities;

(xiii)

cost of landscaping;

(xiv)

cost of maintenance and operation of the parking area and costs of operating, maintaining, repairing, and replacing all pedestrian and vehicular entrances and exits, passageways, driveways, tunnels, subway connections and delivery and holding areas used in connection with the Property;

(xv)

cost of consulting, and professional fees including expenses;

(xvi)

cost of repairs, replacements, additions and modifications of the Common Areas and Facilities (subject to subparagraph (xvii) below); and

(xvii)

costs in respect of each Major Expenditure (as hereinafter defined) as amortized over the period of Landlord’s reasonable estimate of the economic life of the Major Expenditure, but not to exceed fifteen (15) years, using equal monthly installments of principal and interest at ten percent (10%) per annum compounded semi-annually. For the purpose hereof “Major Expenditure” shall mean any expenditure incurred after the date of substantial completion of the Building for replacement of machinery, equipment, building elements, systems or facilities forming a part of or used in connection with the Property or for modifications, upgrades or additions to the Property or facilities used in connection therewith.

(d)

In this Lease there shall be excluded from Operating Costs the following:

 

(i)

interest on debt and capital retirement of debt;

(ii)

cost of repairs, replacements, additions and modifications made for the benefit of an individual tenant;

(iii)

such of the Operating Costs as are recovered from insurance proceeds;

(iv)

costs as determined by Landlord of acquiring tenants for the Property, including real estate brokerage and leasing commissions;

(v)

depreciation charges or ground rental payments; and

(vi)

legal and accounting fees relating to (a) disputes with tenants, prospective tenants or other occupants of the Property, (b) disputes with purchasers, prospective purchasers, mortgagees or prospective mortgagees of the Property or any part thereof, (c) negotiations of leases, contracts of sale or mortgages, or (d) reviewing or approving requests for subleases or assignments of leases.

(e)

Notwithstanding any provision to the contrary, in computing the amount of Operating Costs for the Base Year and each following year during the Term, the amount of Controllable Operating Costs, defined below, shall not exceed the amount of Controllable Operating Costs for the previous year, increased at the rate of five percent (5%) per annum computed on a compounding and cumulative basis.  As used herein, the term “Controllable Operating Costs” shall mean all Operating Costs except utilities, insurance, and Taxes.

 

 

 

1.

The sidewalks, entry passages, elevators (if installed in the Building) and common stairways shall not be obstructed by Tenant or used for any other purpose than for ingress and egress to and from the Leased Premises. Tenant will not place or allow to be placed in the Building corridors or public stairways any waste paper, dust, garbage, refuse or anything whatsoever.

 

2.

The washroom plumbing fixtures and other water apparatus shall not be used for any purpose other than those for which they were constructed, and no sweepings, rubbish, rags, ashes or other substances shall be thrown therein. The expense of any damage resulting by misuse by Tenant shall be borne by Tenant.

 

3.	Tenant shall permit window cleaners to clean the windows of the Leased Premises during Normal Business Hours.

 

4.	No birds or animals shall be kept in or about the Property nor shall Tenant operate or permit to be operated any musical or sound-producing instruments or device or make or permit any improper noise inside or outside the Leased Premises which may be heard outside such Leased Premises.

 

5.	No one shall use the Leased Premises for residential purposes, or for the storage of personal effects or articles other than those required for business purposes.

 

6.

All persons entering and leaving the Building at any time other than during Normal Business Hours shall register in the books which may be kept by Landlord at or near the night entrance and Landlord will have the right to prevent any person from entering or leaving the Building or the Property unless provided with a key to the premises to which such person seeks entrance and a pass in a form to be approved by Landlord. Any persons found in the Building at such times without such keys and passes will be subject to the surveillance of the employees and agents of Landlord.

 

7.	No dangerous or explosive materials shall be kept or permitted to be kept in the Leased Premises.

 

8.	No space heating devices of any kind shall be kept or used in the Leased Premises.

 

9.

Tenant shall not and shall not permit any cooking in the Leased Premises except for the use of coffee makers and food warmed up in a microwave for consumption solely by employees or guests of Tenant and Tenant shall ensure that odors do not emanate from the Leased Premises.  Tenant shall not install or permit the installation or use of any machine dispensing goods for sale in the Leased Premises without the prior written approval of Landlord. Only persons authorized by Landlord shall be permitted to deliver or to use the elevators (if installed in the Building) for the purpose of delivering food or beverages to the Leased Premises.

 

10.

Tenant shall not bring in or take out, position, construct, install or move any safe, business machine or other heavy office equipment without first obtaining the prior written consent of Landlord. In giving such consent, Landlord shall have the right in its sole discretion, to prescribe the weight permitted and the position thereof, and the use and design of planks, skids or platforms to distribute the weight thereof. All damage done to the Building by moving or using any such heavy equipment or other office equipment or furniture shall be repaired at the expense of Tenant. The moving of all heavy equipment or other office equipment or furniture shall occur only at times consented to by Landlord and the persons employed to move the same in and out of the Building must be acceptable to Landlord. Safes and other heavy office equipment will be moved through the halls and corridors only upon steel bearing plates. No freight or bulky matter of any description will be received into the Building or carried in the elevators (if installed in the Building) except during hours approved by Landlord.

 

11.	Tenant shall give Landlord prompt notice of any accident to or any defect in the plumbing, heating, air-conditioning, ventilating, mechanical or electrical apparatus or any other part of the Building.

 

12.	The parking of automobiles shall be subject to the charges and the reasonable regulations of Landlord. Landlord shall not be responsible for damage to or theft of any car, its accessories or contents whether the same be the result of negligence or otherwise.

 

13.	Tenant shall not mark, drill into or in any way deface the walls, ceilings, partitions, floors or other parts of the Leased Premises and the Building.

 

14.	Except with the prior written consent of Landlord, no tenant shall use or engage any person or persons other than the janitor or janitorial contractor of Landlord for the purpose of any cleaning of the Leased Premises.

 

15.

If Tenant desires any electrical or communications wiring, Landlord reserves the right to direct qualified persons as to where and how the wires are to be introduced, and without such directions no borings or cutting for wires shall take place. No other wires or pipes of any kind shall be introduced without the prior written consent of Landlord.

 

 

16.	Tenant shall not place or cause to be placed any additional locks upon any doors of the Leased Premises without the approval of Landlord and subject to any conditions imposed by Landlord. Additional keys may be obtained from Landlord at the cost of Tenant.

 

17.

Tenant shall be entitled to have its name shown upon the directory board of the Building, at Landlord’s expense.  Landlord shall in its reasonable discretion design the style of such identification and allocate the space on the directory board for Tenant.  Landlord, at Landlord’s expense, will install an initial Building Standard suite entry sign bearing Tenant’s name which shall be consistent with other suite entry signage in the Building with a size, design, materials and lettering selected by Landlord in its sole discretion.  Any subsequent changes shall be provided by Landlord, at Tenant’s expense.

 

18.	Tenant shall keep window coverings (if any) in a closed position as necessary for temperature control.  Tenant shall not interfere with or obstruct any perimeter heating, air-conditioning or ventilating units.

 

19.	Tenant shall not conduct, and shall not permit any, canvassing in the Building.

 

20.	Tenant shall take care of the rugs and drapes (if any) in the Leased Premises and shall arrange for the carrying-out of regular spot cleaning and shampooing of carpets and dry cleaning of drapes in a manner acceptable to Landlord.

 

21.	Tenant shall permit the periodic closing of lanes, driveways and passages for the purpose of preserving Landlord’s rights over such lanes, driveways and passages.

 

22.

Tenant shall not place or permit to be placed any sign, advertisement, notice or other display on any part of the exterior of the Leased Premises or elsewhere if such sign, advertisement, notice or other display is visible from outside the Leased Premises without the prior written consent of Landlord which may be arbitrarily withheld. Tenant, upon request of Landlord, shall immediately remove any sign, advertisement, notice or other display which Tenant has placed or permitted to be placed which, in the opinion of Landlord, is objectionable, and if Tenant shall fail to do so, Landlord may remove the same at the expense of Tenant.

 

23.

Landlord shall have the right to make such other and further reasonable rules and regulations and to alter the same as in its judgment may from time to time be needful for the safety, care, cleanliness and appearance of the Leased Premises and the Building and for the preservation of good order therein, and the same shall be kept and observed by the tenants, their employees and servants. Landlord also has the right to suspend or cancel any or all of these rules and regulations herein set out.

 

24.

Tenant acknowledges that smoking is prohibited in all areas of the Leased Premises, the Building, the Property (including the Common Areas and Facilities) and the parking facilities except in areas, if any, outside the Building that are designated by Landlord as “Designated Smoking Areas.”  Landlord shall have the right, but not the obligation, to designate an area or areas outside the Building as “Designated Smoking Areas.”  Landlord shall have the right from time to time to change and/or limit such Designated Smoking Areas and to enact future rules and regulations concerning smoking in such Designated Smoking Areas, including the right, in Landlord’s discretion, to prohibit smoking in the Designated Smoking Areas or the right to refuse to designate Designated Smoking Areas.  Tenant agrees to comply in all respects with Landlord’s prohibition and regulation of smoking and to enforce compliance against its employees, agents, invitees, and other persons under the control and supervision of Tenant on Leased Premises, the Building, the Property, and the parking facilities.  Any violation of this provision shall be a default under this Lease.  For purposes hereof, “smoking” means inhaling, exhaling, burning or carrying any lighted cigar, cigarette, pipe or other smoking equipment, including electronic cigarettes.  Notwithstanding anything in this Lease to the contrary, no liability shall attach to the Landlord for any failure to enforce this provision (or similar provisions in other leases).

 

(a)

not bring, or allow its employees, agents, contractors, invitees and those over whom Tenant can reasonably exercise control, to bring any Hazardous Substance (as defined below) onto the Property, the Building or the Leased Premises except in compliance with Environmental Laws (as defined below);

 

(b)

to comply at all times and require all those for whom Tenant is in law responsible to comply at all times with Environmental Laws as same affect the Leased Premises, the Building or the Property;

 

(c)

to give notice to Landlord of the presence at any time during the Term of any Hazardous Substance on the Leased Premises (or the Building or the Property if such Hazardous Substance is in the control of Tenant) together with such information concerning such Hazardous Substance and its presence on the Leased Premises, the Building or the Property as Landlord may require;

 

(d)

to give notice to Landlord of any occurrence which might give rise to a duty under Environmental Laws on either Tenant or Landlord with respect to the presence of any Hazardous Substance on the Leased Premises, the Building or the Property including, without limitation, notice of any release or escape into the environment of any Hazardous Substance at the Leased Premises, the Building or the Property;

 

(e)

in any case where Tenant has given notice as to the presence of a Hazardous Substance at the Leased Premises, the Building or the Property or is required to give such notice or where Landlord has reasonable grounds to believe that any Hazardous Substance is or has been brought upon the Leased Premises, the Building or the Property by Tenant or any person for whom Tenant is in law responsible, to commission an Environmental Site Assessment at Tenant’s expense when required by Landlord to do so;

 

(f)

to comply with any investigative, remedial or precautionary measures required under Environmental Laws or as reasonably required by Landlord, and Tenant shall be fully and completely liable to Landlord for any and all clean up costs or costs incurred to comply with Environmental Laws which are attributable to, either directly or indirectly, any act or omission of Tenant and/or any person for whom Tenant is in law responsible;

 

(g)

to protect, indemnify and save each of Landlord and its directors, officers, employees, agents, successors and assigns completely harmless from and against any Environmental Claim (as defined below), directly or indirectly incurred, sustained or suffered by or asserted against Landlord and/or its directors, officers, employees, agents, successors and assigns caused by or attributable to, either directly or indirectly, any act or omission of Tenant and/or any person for whom Tenant is in law responsible.  The foregoing indemnity obligation shall survive expiration or termination of this Lease;

 

(h)

to enter into any additional contract of insurance respecting the Leased Premises which Landlord may reasonably require to protect Landlord and its directors, officers, employees, agents, successors and assigns from any Environmental Claim respecting the Leased Premises; and

 

(i)

to provide to Landlord such security as Landlord may from time to time require, acting reasonably, to ensure compliance by Tenant with its covenants herein contained.

 

2.

Tenant acknowledges that it has inspected the Leased Premises and has performed (or has had the opportunity to perform) such tests and studies including, without limitation, an Environmental Site Assessment, so as to satisfy itself as to the environmental condition of the Leased Premises and agrees to accept the Leased Premises “as is, where is”.

 

3.

Tenant hereby authorizes Landlord to make inquiries from time to time of any government or governmental agency with respect to Tenant’s compliance with Environmental Laws at the Leased Premises, and Tenant covenants and agrees that Tenant will from time to time provide to Landlord such written authorization as Landlord may reasonably require in order to facilitate the obtaining of such information.  Landlord or its authorized agent may inspect the Leased Premises from time to time, without notice, in order to verify Tenant’s compliance with Environmental Laws and the requirements of this Lease respecting Hazardous Substances.  Upon request by Landlord from time to time, Tenant shall provide to Landlord a certificate executed by a senior officer of Tenant certifying ongoing compliance by Tenant with its covenants contained herein.

 

4.

If Tenant brings or creates on Leased Premises, the Building or the Property any Hazardous Substance or if the conduct of Tenant’s business causes there to be any Hazardous Substance upon the Property, the Building or the Leased Premises then, notwithstanding any rule of law to the contrary, such Hazardous Substance shall be and remain the sole and exclusive property of Tenant and shall not become the property of Landlord notwithstanding the degree of affixation of the Hazardous Substance or the goods containing the Hazardous Substance to the Leased Premises, the Building or the Property and notwithstanding the expiration or earlier termination of this Lease.

 

5.

Upon Tenant’s material default under this Section and in addition to the rights and remedies set forth elsewhere in this Lease, Landlord shall be entitled to the following rights and remedies: to recover any and all damages associated with the material default, including without limitation, in addition to any rights reserved or available to Landlord in respect of an early termination of this Lease, cleanup costs and charges, civil and criminal penalties and fees, loss of business and sales by Landlord and other tenants of the Building, any and all damages and claims asserted by third parties and Landlord’s attorneys’ fees and costs.

 

6.	For the purposes of this lease, the following terms should have the meanings set out below:

 

(a)

“Environmental Site Assessment” means an inspection or inspections of the Leased Premises or other affected locations at the Building or the Property by an independent consultant acceptable to Landlord together with such other tests, surveys and inquiries as such consultant deems advisable in the circumstances into the use, transport, storage, disposal, handling, sale or manufacture of any Hazardous Substance in, on or about the Leased Premises, the Building or the Property by Tenant, those for whom Tenant is in law responsible or any other person using or occupying the Leased Premises, or into the condition or status of the Leased Premises in relation to possible contamination by any Hazardous Substance, and any Environmental Site Assessment by such consultant shall include the said consultant’s written report delivered to Landlord summarizing the nature and results of all inspections, tests, surveys and inquiries conducted by the consultant, and the said consultant’s recommendations for any remedial or precautionary actions to be taken in relation to the presence of Hazardous Substance on the Leased Premises, the Building or the Property.

 

(b)

“Environmental Claim” means all claims, losses, costs, expenses, fines, penalties, payments and/or damages (including, without limitation, all solicitors’ fees on a solicitor and client basis) relating to, arising out of, resulting from or in any way connected with the presence of any Hazardous Substance at the Leased Premises, the Building or the Property, including, without limitation, all costs and expenses of any remediation or restoration of the Leased Premises, the Building, the Property and/or any property adjoining or in the vicinity of the Property required or mandated by the Environmental Law.

 

(c)

“Environmental Laws” means the common law, any law, order, ordinance, ruling, regulation, certificate, approval, policy, guideline, consent or directive of any applicable federal, state or municipal government, governmental department, agency or regulatory authority or any Court of competent jurisdiction, relating to environmental matters and/or regulating the import, storage, distribution, labeling, sale, use, handling, transport or disposal of any Hazardous Substance.

 

(d)

“Hazardous Substance” means:

 

(i)

any substance which is hazardous to persons or property and includes, without limiting the generality of the foregoing, the following:

 

(A)

radioactive materials;

 

(B)

explosives; and

 

(C)

any substance that, if added to any water, would degrade or alter or form part of a process of degradation or alteration of the quality of that water to the extent that it is detrimental to its use by any of man animal, fish or plant;

 

(ii)

any solid, liquid, gas or odor or combination of any of them that, if emitted into the air, would create or contribute to the creation of a condition of the air that:

 

(A)

endangers the health, safety or welfare of persons or the health of animal life;

 

(B)

interferes with normal enjoyment of life or property; or

 

(C)

causes damage to plant life or to property;

 

(iii)

toxic substances;

 

(iv)

any material or substance declared or deemed to be hazardous, deleterious, caustic, dangerous, a contaminant, a waste, a source of contaminant, a pollutant or toxic under the Environmental Law; and

 

(v)

without limiting the generality of the foregoing, Hazardous Substance includes:

 

(A)

polychlorinated biphynels (“PCBs”) or substances containing PCBs;

 

(B)

asbestos or materials containing asbestos;

 

(C)

radon at levels deemed unacceptable by any health, labor or environmental governmental authority;

 

(D)

urea formaldehyde foam insulation; or

 

(E)

underground or above-ground storage tanks.

 

(a)

Tenant shall, prior to the end of the Term, or the earlier termination of this Lease, as applicable, remove:  (i) such of the Leasehold Improvements in the Leased Premises as Landlord shall require to be removed and (ii) all trade fixtures, furniture, equipment and personal property of Tenant;

(b)

Tenant shall, prior to the end of the Term, or the earlier termination of this Lease, as applicable, remove from the Leased Premises (including the plenum) and the Building all wiring, cabling, conduit and appurtenant hardware installed in the Leased Premises or the Building by, or for the benefit of, Tenant (or any Transferee of the Lease or any portion of the Leased Premises), for use in connection with Tenant’s (or such Transferee’s) telecommunications or computer equipment or systems (or for any other purpose);

(c)

Tenant may, at the times appointed by Landlord and subject to availability of elevators (if installed in the Building), remove its furniture and equipment during the Term in the usual and normal course of its business where such furniture or equipment has become excess for Tenant’s purposes or Tenant is substituting therefor new furniture and equipment; and

(d)

Tenant shall, in the case of every removal, repair at the expense of Tenant any damage caused to the Property by the installation and removal. In the event of the non-removal by the end of the Term, or sooner termination of the Lease, as applicable, of the items required by Tenant to be removed under this Paragraph 4 of this Schedule, Landlord shall have the option, in addition to its other remedies under this Lease to declare to Tenant that any or all of such items are the property of Landlord and Landlord upon such a declaration may dispose of same and retain any proceeds of disposition as security for the Debts, Liabilities and Obligations, and Tenant shall be liable to Landlord for any expenses incurred by Landlord in connection with such removal, disposition and/or sale (including any reasonable attorneys’ fees and costs).

 

 

(a)

the term “Tenant’s Work” shall mean all work (there is no Landlord’s Work being performed hereunder) required to be done to complete the Leased Premises for initial occupancy by Tenant.  TENANT ACKNOWLEDGES AND AGREES THAT TENANT’S WORK SPECIFICALLY INCLUDES WITHOUT LIMITATION ANY WORK REQUIRED BY ANY GOVERNMENTAL AUTHORITY IN CONNECTION WITH OBTAINING AN OCCUPANCY PERMIT (OR ITS EQUIVALENT) OR ANY PERMIT FOR TENANT’S WORK, AND ANY AND ALL OF SUCH WORK SHALL BE PERFORMED AT TENANT’S SOLE COST AND EXPENSE.

 

(b)

LANDLORD IS LEASING THE LEASED PREMISES TO TENANT AND TENANT ACCEPTS THE LEASED PREMISES IN ITS “AS IS, WHERE IS, WITH ALL FAULTS” CONDITION, WITHOUT ANY REPRESENTATION OR WARRANTY OF ANY KIND (EXPRESS OR IMPLIED).

1.

Tenant Improvement Allowance.  Landlord shall provide an allowance of Twenty-eight and 50/100 Dollars ($28.50) per rentable square foot of the Leased Premises (the “Tenant Improvement Allowance”) for the design and construction of the Leased Premises, which shall include any permitting and design fees, including Mechanical, Electrical and Plumbing design fees, and the installation of Tenant’s suite signage.  Tenant agrees that the Landlord can deduct from the Tenant Improvement Allowance the cost of Tenant’s Work, defined below, including reasonable out-of-pocket expenses actually incurred by the Landlord and its consultants for said Tenant’s Work (e.g. design and architectural fees, mechanical, electrical, plumbing and structural engineering fees, reproduction costs of permits and inspections for Tenant’s Work) and Landlord’s construction management fee of three percent (3%) of the cost of Tenant’s Work.  Any actual cost of Tenant’s Work in excess of the Tenant Improvement Allowance (the “Excess Cost”) shall be at Tenant’s sole cost and expense and shall be paid by Tenant to Landlord upon within seven (7) days after Tenant’s receipt of written notice thereof from Landlord.  Any unused portion of the Tenant Improvement Allowance, up to but not exceeding Eighteen and 50/100 Dollars ($18.50) per rentable square foot of the Leased Premises, remaining after substantial completion of Tenant’s Work, can be used by Tenant to offset the cost of furniture, fixtures and equipment for the Leased Premises (“FF&E Costs”), as a reimbursement for Tenant’s cost incurred in relocating its business to the Leased Premises (“Moving Expenses”; Tenant’s FF&E Costs and Moving Expenses are collectively referred to herein as “Tenant’s Costs”) or as credit toward future Rent (a “Rent Credit”), provided that notice of such use is provided by Tenant to Landlord on or before the Allowance Expiration Date, defined below.  The election by Tenant to be provided with a Rent Credit, or for reimbursement for Tenant’s Costs, or for some combination thereof, shall be made by Tenant no later than the Allowance Expiration Date.  Any reimbursement of Tenant’s Costs requested by Tenant shall be made by Landlord within thirty (30) days following Landlord’s receipt of documentation reasonably acceptable to Landlord reflecting the amount of such costs, provided that such documentation is received by Landlord prior to the Allowance Expiration Date.  Any portion of the Tenant Improvement Allowance remaining unused after March 31, 2015 (the “Allowance Expiration Date”) shall be retained by Landlord; provided, however, that notifying Landlord on or before the Allowance Expiration Date that Tenant elects to use all or a portion of the unused Tenant Improvement Allowance as a Rent Credit shall constitute using the Rent Credit on or before the Allowance Expiration Date.

 

2.

Construction of Tenant Work.  Landlord shall construct the tenant improvements (the “Tenant’s Work”) as described in those certain plans and specifications to be prepared by VeenendaalCave, Inc. (“Architect”) at Tenant’s expense, and mutually agreed upon by Landlord and Tenant and incorporated herein by this reference (the “Construction Documents”).  All work shall be performed by Landlord in a professional workmanlike manner, in conformance with all applicable codes, laws, rules and regulations.

 

3.

Construction Documents.  Tenant shall deliver to the Architect an approved space plan, (collectively, the “Preliminary Drawings”) prepared in conformance with all applicable code requirements, and with the appropriate level of detail to begin the preparation of construction documents prior to the execution of this Agreement.  The Preliminary Drawings and the Construction Documents shall be subject to Landlord’s approval which shall not be unreasonably withheld or delayed.  Within five (5) Business Days after the execution of this Agreement, Landlord shall cause the Construction Documents to be prepared and delivered to Tenant for its review and approval.  Tenant shall have five (5) Business Days from Landlord’s delivery of the Construction Documents to advise Landlord, in writing, as to whether or not Tenant desires any changes to the Construction Documents.

 

4.	Construction Schedule.

 

 

i.

No later than five (5) days after the Effective Date of this Lease, Tenant shall submit to Architect a schedule of finishes applicable to Tenant’s Work.  Failure of Tenant to act within such time frame or to act within any other time frames required of it shall be deemed a Tenant delay.  Further, any delays in the substantial completion of Tenant’s Work resulting from incomplete or inaccurate information furnished by or on behalf of Tenant to the Architect shall be deemed a Tenant delay.

 

ii.

Within a reasonable period after receipt of the final, approved Construction Documents, Landlord shall make application for building permits.

 

iii.

Landlord shall submit drawings for sealed bidding to three (3) general contractors previously approved by the Landlord.  Upon receipt of the bids, Landlord shall submit copies to the Tenant for Tenant’s review and approval.  Tenant shall have three (3) business days to review and approve any bids submitted to it by Landlord, and any delays in the substantial completion of Tenant’s Work resulting from Tenant’s failure to notify Landlord of Tenant’s selected bid within such three (3) business day period shall be deemed a Tenant delay.  In the event that the lowest bid received exceeds the amount of the Tenant Improvement Allowance, Tenant may propose changes to the Construction Documents within three (3) business days, which revised Construction Documents shall be used to request new sealed bids Upon receipt of the revised bids, Landlord shall submit copies to the Tenant for Tenant’s review and approval.  Selection of the general contractor shall be subject to Tenant’s reasonable consent.  Any delays in the substantial completion of Tenant’s Work resulting from its selection of the general contractor and form changes to the Construction Documents requested by Tenant including subsequent time frames for Tenant’s receipt, review and approval of revised bids shall be deemed a Tenant delay.

 

(b)

Upon receipt of a signed copy of the approved Construction Documents, the required permits and bid approval from the Tenant to the Landlord, construction will commence.  Any changes or additions requested by the Tenant or Landlord require written authorization executed by the Tenant or Tenant’s authorized representative and approval of any municipality or other authority having jurisdiction.

 

(c)

In the event that a “Long Lead Item” (defined below), a change, or addition requested by the Tenant results in an extension of the contract time, then such extension of time shall constitute a Tenant delay.  The term “Long Lead Item” shall mean any item of Tenant’s Work or material thereof which due to long lead times necessary for fabrication or delivery will not be available in time for Tenant’s Work to be substantially completed prior to the Commencement Date.  When choosing finishes, the Architect will advise Tenant if any particular item is a Long Lead Item and provide Tenant with the opportunity to substitute that item for one that is not a Long Lead Item.  Tenant’s selection of any Long Lead Item and any ensuing delay in the substantial completion of Tenant’s Work shall be deemed a Tenant delay.

 

(d)

Should Tenant fail to meet the time periods outlined above, or should Tenant be responsible for any delay in the substantial completion of Tenant’s Work, it is understood the Landlord shall charge Rent in full for those days of delay which Landlord can reasonably demonstrate delayed the date on which the Term would otherwise have commenced.

 

5.

Delivery of Leased Premises.  If Landlord for any reason whatsoever cannot deliver possession of the Leased Premises to Tenant (with Tenant’s Work substantially completed in accordance with the Construction Documents) on or before the Lease Commencement Date, this Lease shall not be void or voidable nor shall Landlord be liable to Tenant for any loss or damage resulting therefrom; but in that event, Landlord shall act diligently and in good faith to complete the work that is necessary to allow Landlord to deliver the Leased Premises to Tenant as specified above.

 

6.

Acceptance of Leased Premises.  Promptly after Tenant’s Work is substantially completed, Landlord and Tenant shall together walk through the Leased Premises and inspect all Tenant’s Work so completed, using reasonable efforts to discover all uncompleted or defective construction in Tenant’s Work.  After such inspection has been completed, each party shall compile a list of all “punch list” items which the parties agree are to be corrected by Landlord.  Tenant’s taking possession of any part of the Leased Premises shall be deemed to be an acceptance by Tenant of Tenant’s Work in such part as is complete and in accordance with the terms of this Agreement, except for the punch list noted above.

 

7.

Scheduling.  Landlord’s obligation to deliver the Leased Premises to Tenant on or before the Commencement Date shall be conditioned upon:  (i) the execution of this Lease by Tenant and delivery of same to Landlord in acceptable form on or before October 17, 2014; and (ii) Tenant’s timely compliance with Tenant’s response obligations described in Section 3. .

 

8.

Tenant Delay.  Tenant acknowledges and agrees that, in addition to any Tenant delay described in the Lease, a Tenant Delay shall include, without limitation, any delays resulting from (i) change orders required by Tenant or by those acting for or under the direction of Tenant; or (ii) the performance or completion by Tenant, or any entity or person employed by Tenant, of any work in or about the Leased Premises (including, without limitation, any delays whatsoever in the substantial completion of Tenant’s Work which are caused by any such Tenant’s work); or (iii) the failure of Tenant to satisfy the conditions described in the immediately preceding paragraph, time being of the essence (collectively, a “Tenant Delay”)

 

9.

Substantial Completion.  For purposes of this Lease, “substantial completion” shall mean the earlier of: (i) date when all of the following have occurred with respect to Tenant’s Work:  (x) the construction of Tenant’s Work has been substantially completed excepting only the punch list, and (y) the building department of the city or county where the Leased Premises are located has completed its final inspection of Tenant’s Work and has issued a Certificate of Occupancy allowing Tenant use and occupancy of the Leased Premises (or such Certificate of Completion or Certificate of Occupancy is ready to be issued subject only to completion of those improvements and/or installation of those fixtures and equipment that are Tenant’s obligations); or (ii) the date Tenant begins conducting business or commences operations within the Leased Premises.  To the extent that the requirement for furnishing the Certificate of Occupancy is a condition to the commencement of the Term and Tenant’s obligation to pay Rent, Landlord may satisfy that requirement by securing a temporary or conditional certificate of occupancy so long as the condition of Tenant’s Work in the absence of those items of construction that Landlord must complete as a condition to the issuance of a final Certificate of Occupancy is adequate for the conduct of Tenant’s business in the Leased Premises.  If Substantial Completion is delayed beyond the Scheduled Commencement Date, and such delay is the result of a Tenant Delay, then the date on which Substantial Completion shall be deemed to have occurred shall be accelerated on a day-for-day basis for each day of Tenant Delay.

 

10.

Repayment of Disbursed Allowance in Event of Default.  After the Tenant Improvement Allowance, or such portion thereof as may expended by Landlord hereunder (the “Disbursed Allowance”), has been paid by Landlord, the principal amount of the Disbursed Allowance, together with interest thereon calculated at the Interest Rate, shall be amortized evenly over the Term, and so long as an Event of Default has not occurred, then the balance of the Disbursed Allowance shall be reduced each month by the principal amount amortized each month, and upon Landlord’s receipt of the final payment of Rent due during the Term of this Lease, Tenant shall have no liability to Landlord for the repayment of any portion of the Disbursed Allowance or the interest thereon that accrued and was amortized over the Term of the Lease.  In the event that an Event of Default has occurred, then in addition to all of Landlord’s other remedies available under the Lease, Tenant shall also be liable to Landlord for the entire unreduced principal balance of the Disbursed Allowance remaining as of the date of the occurrence of such Event of Default, and interest shall accrue thereon at the Interest Rate until such sum is paid in full.  Provided, however, that if Landlord elects to exercise its rights under Paragraph 10(c) of the Lease to accelerate the Rent due from Tenant for the balance of the Term, in accordance with the terms of such paragraph, and Landlord obtains a judgment for, or is paid by Tenant, the entire amount of such accelerated sum, then such judgment for or payment of such accelerated sum shall preclude a separate recovery by Landlord under the foregoing terms of this paragraph of the unreduced balance of the Disbursed Allowance and any interest thereon.

11.

Removal of Improvements.  Portions of the Tenant Work reasonably determined by Landlord to be specialized improvements (e.g. floor and ceiling mounted auxiliary air conditioning units, non-building standard fire suppression/control systems, computer rooms, auditoriums, laboratories, data and voice cabling and wiring and associated appurtenances) shall, at the election of the Landlord, either be removed by Tenant at its expense before the expiration of the Term or shall remain upon the Leased Premises and be surrendered therewith upon the expiration or earlier termination of the Lease as the property of the Landlord.  If Landlord requires the removal of all or part of the Tenant Work, Tenant, at its expense, shall repair any damage to the Leased Premises or the Building caused by such removal and restore the Leased Premises to their condition prior to the installation of the Tenant Work.  If Tenant fails to remove such portions upon Landlord’s request, then Landlord may (but shall not be obligated to) remove the same and the cost of such removal, repair and restoration, together with any and all damages which Landlord may suffer and sustain by reason of the failure of Tenant to remove the same, shall be charged to Tenant and paid upon demand.

 

 

 

 

 

1.	Defined Terms.  Unless otherwise defined or modified herein, all capitalized terms used in this Memorandum shall have the meanings ascribed to them in the Lease.

 

2.

Commencement and Expiration of Term; Lease Year.  The Commencement Date of the Term shall be _________________, 20___ and the Term shall expire on _______________, 20____ (the “Expiration Date”), unless the Term of the Lease is sooner terminated or extended as provided in the Lease.  In accordance with the definition of the term “Basic Rent” set forth in the Basic Lease Information Rider to the Lease (the “BLI Rider”), the first “Lease Year” shall commence on _____________, 20___ (which is the Commencement Date), and shall expire on _______________, 20___.  Accordingly, the first adjustment of Basic Rent set forth in the chart that appears in the BLI Rider shall occur on ____________, 20____, and each subsequent adjustment shall occur on _______________ of each succeeding year throughout the initial Term of the Lease.

 

x.	Abated Rent.  The Abatement Period, defined in Paragraph 3(g) of the Lease, shall commence on _____________, 20___ and expire on _____________, 20___.

 

x.

Rentable Area of Leased Premises.  The Rentable Area of Leased Premises is hereby revised to be _________ rentable square feet; accordingly, Tenant’s Proportionate Share is hereby revised to be ______________ percent (_______%).  As a result of the revision in the Rentable Area of Leased Premises, the Basic Rent chart set forth in the BLI Rider is hereby deleted and replaced with the following chart:

 

 

a.

Tenant has accepted possession of the Leased Premises as provided in the Lease;

 

b.

any work required to be performed or furnished by Landlord under the Lease has been completed and/or furnished;

 

c.

Landlord has fulfilled all of its obligations under the Lease as of the date hereof; and

 

d.

except as may be specifically set forth in this Memorandum, as of the Effective Date hereof, there are no set-offs or credits against Rent, and no Security Deposit or prepaid Rent has been paid except as provided by the Lease.

 

 

x.

Confirmation of Insurance coverage.  By their initials below, Landlord and Tenant confirm that Tenant either has or has not provided Landlord with a certificate of insurance showing Tenant’s insurance coverage is in force in connection with Tenant’s use and occupancy of the Leased Premises, in accordance with the provisions of the Lease.  If Tenant has not provided such certificate to Landlord, Tenant accepts this declaration as Landlord’s written notice requiring Tenant to provide Landlord with such certificate: (a) if Tenant has not yet occupied the Leased Premises at the time Tenant receives this declaration, within five (5) days from the date Tenant commences occupancy of the Leased Premises; or (b) if such occupancy by Tenant commenced prior to the time Tenant receives this declaration, within three (3) days from the date Tenant receives this declaration. Tenant acknowledges and agrees that if it fails to comply with these provisions, then, in accordance with the provisions of the Lease, Landlord may (but shall not be obligated to) obtain the required insurance coverage and Tenant shall pay to Landlord on demand all premiums and other reasonable expenses incurred by Landlord in connection with obtaining such coverage for Tenant.

 

 

x.	Lease in effect.  Except as modified herein, all terms and conditions of the Lease shall continue in full force and effect.