<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934. For the quarterly period ended June 30, 1999.
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
Commission File Number: 000-21433
-------------
FORRESTER RESEARCH, INC.
(Exact name of registrant as specified in its charter)
Delaware 04-2797789
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1033 Massachusetts Avenue
Cambridge, Massachusetts 02138
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 497-7090
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
As of August 11, 1999 8,964,823 shares of the registrant's common stock
were outstanding.
<PAGE> 2
FORRESTER RESEARCH, INC.
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Consolidated Balance Sheets at June 30, 1999 and December 31,
1998 3
Consolidated Statements of Income for the Three and Six
Months Ended June 30, 1999 and 1998 4
Consolidated Statements of Cash Flows for the Six Months Ended
June 30, 1999 and 1998 5
Notes to Consolidated Financial Statements 6
ITEM 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 8
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk 14
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings 15
ITEM 2. Changes in Securities 15
ITEM 3. Defaults Upon Senior Securities 15
ITEM 4. Submission of Matters to a Vote of Security-Holders 15
ITEM 5. Other Information 15
ITEM 6. Exhibits and Reports on Form 8-K 15
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FORRESTER RESEARCH, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
<TABLE>
<CAPTION>
ASSETS
JUNE 30, DECEMBER 31,
1999 1998
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 8,121 $ 10,414
Marketable securities 71,118 56,070
Accounts receivable, net 17,542 21,158
Deferred commissions 3,275 2,124
Prepaid income taxes 1,288 334
Prepaid expenses and other current assets 2,995 2,605
---------- ----------
Total current assets 104,339 92,705
---------- ----------
Property and equipment, net 7,398 7,813
Other assets 1,470 --
---------- ----------
Total assets $ 113,207 $ 100,518
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,581 $ 1,434
Customer deposits 546 264
Accrued expenses 5,909 5,051
Accrued income taxes 313 933
Deferred revenue 41,455 38,894
Deferred income taxes 871 409
---------- ----------
Total current liabilities 50,675 46,985
---------- ----------
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value
Authorized--500,000 shares
Issued and outstanding--none -- --
Common stock, $.01 par value
Authorized--25,000,000 shares
Issued and outstanding--shares 8,922,666 and 8,654,175
shares at June 30, 1999 and December 31, 1998, respectively 89 86
Additional paid-in capital 44,898 39,575
Retained earnings 17,695 13,555
Accumulated other comprehensive income (150) 317
---------- ----------
Total stockholders' equity 62,532 53,533
---------- ----------
Total liabilities and stockholders' equity $ 113,207 $ 100,518
========== ==========
</TABLE>
See accompanying notes.
3
<PAGE> 4
FORRESTER RESEARCH, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
REVENUES:
Core research $14,773 $11,202 $27,751 $21,671
Advisory services and other 4,898 3,841 9,849 6,503
------- ------- ------- -------
Total revenues 19,671 15,043 37,600 28,174
------- ------- ------- -------
OPERATING EXPENSES:
Cost of services and fulfillment 6,424 5,782 13,036 10,610
Selling and marketing 7,276 5,078 13,468 9,845
General and administrative 2,213 1,642 4,254 3,199
Depreciation and amortization 1,048 648 1,921 1,179
------- ------- ------- -------
Total operating expenses 16,961 13,150 32,679 24,833
------- ------- ------- -------
Income from operations 2,710 1,893 4,921 3,341
OTHER INCOME 895 715 1,755 1,431
------- ------- ------- -------
Income before income tax provision 3,605 2,608 6,676 4,772
INCOME TAX PROVISION 1,370 991 2,537 1,812
------- ------- ------- -------
Net income $ 2,235 $ 1,617 $ 4,139 $ 2,960
======= ======= ======= =======
BASIC NET INCOME PER COMMON SHARE $ 0.25 $ 0.19 $ 0.47 $ 0.35
======= ======= ======= =======
DILUTED NET INCOME PER COMMON SHARE $ 0.24 $ 0.17 $ 0.43 $ 0.32
======= ======= ======= =======
BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 8,881 8,496 8,814 8,466
======= ======= ======= =======
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 9,482 9,510 9,607 9,292
======= ======= ======= =======
</TABLE>
See accompanying notes.
4
<PAGE> 5
FORRESTER RESEARCH, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
1999 1998
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 4,139 $ 2,960
Adjustments to reconcile net income to net cash provided
by operating activities-
Depreciation and amortization 1,921 1,179
Deferred income taxes 462 121
Cumulative translation adjustment (184) -
Accretion of discount on marketable securities (28) (16)
Changes in assets and liabilities-
Accounts receivable 3,615 (2,435)
Deferred commissions (1,151) (400)
Prepaid expenses and other (390) (1,201)
Prepaid income taxes (954) --
Other assets (470) --
Accounts payable 148 288
Customer deposits 282 (60)
Accrued expenses 858 (256)
Accrued income taxes (620) --
Deferred revenue 2,560 3,777
---------- ---------
Net cash provided by operating activities 10,188 3,957
---------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of non-marketable investment (Note 7) (1,000) --
Purchases of property and equipment (1,504) (4,031)
Purchase of marketable securities (180,672) (186,860)
Proceeds from sales and maturities of marketable securities 165,375 179,570
---------- ---------
Net cash used in investing activities (17,801) (11,321)
---------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock under stock option
plan and employee stock purchase plan, including tax
benefit on exercise of stock options 5,326 2,431
---------- ---------
Net cash provided by financing activities 5,326 2,431
---------- ---------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (6) --
---------- ---------
NET DECREASE IN CASH AND CASH EQUIVALENTS (2,293) (4,933)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 10,414 7,742
---------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 8,121 $ 2,809
========== =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes $ 1,062 $ 280
========== =========
</TABLE>
See accompanying notes.
5
<PAGE> 6
FORRESTER RESEARCH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Interim Consolidated Financial Statements
The accompanying unaudited interim consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and pursuant to the rules and regulations of the
Securities and Exchange Commission (SEC) for reporting on Form 10-Q.
Accordingly, certain information and footnote disclosures required for complete
financial statements are not included herein. It is recommended that these
financial statements be read in conjunction with the consolidated financial
statements and related notes of Forrester Research, Inc. (the "Company") as
reported in the Company's Annual Report on Form 10-K for the year ended December
31, 1998. In the opinion of management, all adjustments (consisting of normal
recurring adjustments) considered necessary for a fair presentation of the
financial position, results of operations, and cash flows at the dates and for
the periods presented have been included. The consolidated balance sheet
presented as of December 31, 1998 has been derived from the consolidated
financial statements that have been audited by the Company's independent public
accountants. The results of operations for the quarter ended June 30, 1999 may
not be indicative of the results that may be expected for the year ended
December 31, 1999, or any other period.
Note 2 - Net Income Per Common Share
Basic net income per common share was computed by dividing net income by the
basic weighted average number of common shares outstanding during the period.
Diluted net income per common share was computed by dividing net income by the
diluted weighted average number of common shares outstanding during the period.
The weighted average number of common equivalent shares outstanding has been
determined in accordance with the treasury-stock method. Common stock
equivalents consist of common stock issuable on the exercise of outstanding
options. Reconciliation of basic to diluted weighted average shares outstanding
is as follows (in thousands):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Basic weighted average common shares outstanding 8,881 8,496 8,814 8,466
Weighted average common equivalent shares 601 1,014 793 826
----- ----- ----- -----
Diluted weighted average shares outstanding 9,482 9,510 9,607 9,292
----- ----- ----- -----
</TABLE>
As of June 30, 1999 and 1998, 162,568 and 14,384 stock options, respectively,
were not included in diluted weighted average shares outstanding as the effect
would have been anti-dilutive.
Note 3 - Comprehensive Income
Comprehensive income is defined as the change in equity of a business enterprise
during a period from transactions and other events and circumstances from
non-owner sources. The components of other comprehensive income for the three-
and six-month periods ended June 30, 1999 and 1998 are as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Unrealized (loss) gain on marketable securities,
net of taxes $(189) $ 6 $(277) $ 31
Cumulative translation adjustment (81) -- (190) --
----- --- ----- ----
Total other comprehensive income $(271) $ 6 $(467) $ 31
----- --- ----- ----
</TABLE>
6
<PAGE> 7
Note 4 - Capitalized Software Costs
In March 1998, the American Institute of Certified Public Accountants (AICPA)
issued Statement of Position (SOP) No. 98-1, Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use. SOP No. 98-1 requires
certain computer software costs associated with internal-use software to be
expensed as incurred until certain capitalization criteria are met. The Company
adopted SOP No. 98-1 beginning January 1, 1999. SOP No. 98-1 had no effect upon
adoption. The net book value of capitalized internal-use software costs at June
30, 1999 and December 31, 1998 was $2.0 million and $1.9 million, respectively.
Note 5 - New Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 133, Accounting for Derivative
Instruments and Hedging Activities. SFAS No. 133 is effective for all periods
beginning after June 15, 2000, and establishes methods of accounting for
derivative financial instruments and hedging activities related to those
instruments as well as other hedging activities. Adoption of SFAS No. 133 is not
expected to have a material impact on the Company's consolidated financial
position or results from operations.
Note 6 - Segment and Enterprise-Wide Reporting
The Company adopted SFAS No. 131, Disclosures About Segments of an Enterprise
and Related Information, in the fiscal year ended December 31, 1998. SFAS No.
131 establishes selected standards for reporting information regarding operating
segments in annual financial statements and requires selected information for
those segments to be presented in interim financial reports issued to
stockholders. SFAS No. 131 also establishes standards for related disclosures
about products and services and geographic areas. Operating segments are defined
as components of an enterprise about which separate, discrete financial
information is evaluated regularly by the chief operating decision maker, or
decision-making group, in deciding how to allocate resources and assess
performance. The Company's chief decision-making group, as defined under SFAS
No. 131, is the Executive Team, consisting of the executive officers. To date,
the Company has viewed its operations and managed its business principally as
one segment, research services. As a result, the financial information disclosed
herein materially represents all of the financial information related to the
Company's principal operating segment.
Substantially all of the Company's assets are located in the United States.
Net revenues by geographic destination and as a percentage of total revenues are
as follows:
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1999 1998 1999 1998
United States $15,563 $11,739 $29,756 $22,276
Europe 2,398 1,947 4,640 3,335
Other 1,710 1,357 3,204 2,563
------- ------- ------- -------
$19,671 $15,043 $37,600 $28,174
======= ======= ======= =======
United States 79% 78% 79% 79%
Europe 12% 13% 12% 12%
Other 9% 9% 9% 9%
------- ------- ------- -------
100% 100% 100% 100%
======= ======= ======= =======
7
<PAGE> 8
Note 7 - Investment in Greenfield Online, Inc.
In May 1999, the Company invested $1.0 million in a holding company that is the
majority shareholder of Greenfield Online, Inc., an Internet-based marketing
research firm. As a result of this investment, the Company effectively owns
approximately a 3.4% interest in Greenfield Online, Inc. This investment is
being accounted for using the cost method, and accordingly is valued at cost
until it has been determined that a permanent impairment in its value has
occurred.
Note 8 - New Lease
In May 1999, the Company signed a seven-year lease to move its headquarters to a
new location within Cambridge, Mass. The new lease term begins in October 1999
and has two options to extend, each option for an additional five years. The
Company has incurred approximately $465,000 in lease acquisition costs to date
which will be amortized over the initial term of the lease.
The Company is currently evaluating its alternatives regarding its existing
headquarter's lease. As of June 30, 1999 the net book value of leasehold
improvements at the Company's headquarters was approximately $1.3 million. The
total commitment of lease payments over the remaining lease term as of June 30,
1999 was $3.4 million. The Company does not expect to incur a material loss
related to the termination of its lease.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
This Quarterly Report on Form 10-Q contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
Words such as "expects," "believes," "anticipates," "intends," "plans,"
"estimates," or similar expressions are intended to identify these
forward-looking statements. These statements are based on the Company's current
plans and expectations and involve risks and uncertainties that could cause
actual future activities and results of operations to be materially different
from those set forth in the forward-looking statements. Important factors that
could cause actual results to differ materially from those indicated by
forward-looking statements include, among others, the need to attract and retain
professional staff, management of growth, variability of quarterly operating
results, possible volatility of stock price, dependence on renewals of
membership-based research services, dependence on key personnel, risks
associated with anticipating market trends, new products and services, and
competition. The Company undertakes no obligation to update publicly any
forward-looking statements, whether as a result of new information, future
events, or otherwise.
Forrester Research, Inc. ("Forrester" or the "Company") is a leading
independent research firm offering products and services that help its clients
assess the effect of technology on their businesses. The Company provides
analysis and insight into a broad range of technology areas such as electronic
commerce and the Internet, computing, software, networking, and
telecommunications, and projects how technology trends will impact businesses,
consumers, and society. Forrester's clients, which include senior management,
business strategists, and marketing and information technology ("IT")
professionals within large enterprises, use Forrester's prescriptive research to
understand and benefit from current developments in technology, and as support
for their development and implementation decisions.
Forrester offers its clients annual memberships to core research that is
organized into three Coverage Areas: Internet Commerce, Corporate Technology,
and Technographics(R) Data & Analysis ("Coverage Areas"). Such memberships are
renewable contracts, typically annual and payable in advance. Accordingly, a
substantial portion of the Company's billings are recorded initially as deferred
revenue. Revenues for core research are recognized pro rata on a monthly basis
over the contract period. The Company's other revenues are derived from advisory
services rendered pursuant to Forrester's Partners Program and Strategy Review
Program and from Forrester Forums ("Forums"). The Company's advisory service
clients purchase such services together with core research memberships. Billings
attributable to advisory services are recorded initially as deferred revenue and
recognized as revenue when performed. Similarly, Forum billings are recorded
initially as deferred revenue and are recognized as revenue upon completion of
each event.
8
<PAGE> 9
The Company's operating expenses consist of cost of services and
fulfillment, selling and marketing expenses, general and administrative
expenses, and depreciation and amortization. Cost of services and fulfillment
represent the costs associated with production and delivery of the Company's
products and services, and include the costs of salaries, bonuses, and related
benefits for research personnel, and all associated editorial, travel, and
support services. Selling and marketing expenses include salaries, employee
benefits, travel expenses, promotional costs, sales commissions, and other costs
incurred in marketing and selling the Company's products and services. General
and administrative expenses include the costs of the finance, operations,
technology, and strategy groups, and other administrative functions of the
Company.
The Company believes that the "agreement value" of contracts to purchase
core research and advisory services provides a significant measure of the
Company's business volume. Forrester calculates agreement value as the total
revenues recognizable from all core research and advisory service contracts in
force at a given time without regard to how much revenue already has been
recognized. Agreement value increased 43% to $80.3 million at June 30, 1999 from
$56.0 million at June 30, 1998. No single client company accounted for more than
3% of agreement value at June 30, 1999. The Company's experience is that a
substantial portion of client companies renew expiring contracts for an equal
or higher level of total core research and advisory service fees each year.
Approximately 76% of Forrester's client companies with memberships expiring
during the 12-month period ended June 30, 1999 renewed one or more memberships
for the Company's products and services. This renewal rate is not necessarily
indicative of the rate of future retention of the Company's revenue base.
RESULTS OF OPERATIONS
The following table sets forth certain financial data as a percentage of
total revenues for the periods indicated:
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1999 1998 1999 1998
Core research 75% 74% 74% 77%
Advisory services and other 25 26 26 23
--- --- --- ---
Total revenues 100 100 100 100
Cost of services and fulfillment 33 38 35 38
Selling and marketing 37 34 36 35
General and administrative 11 11 11 11
Depreciation and amortization 5 4 5 4
--- --- --- ---
Income from operations 14 13 13 12
Interest income 4 5 5 5
--- --- --- ---
Income before income tax provision 18 18 18 17
Provision for income taxes 7 7 7 6
--- --- --- ---
Net income 11% 11% 11% 11%
=== === === ===
THREE MONTHS ENDED JUNE 30, 1999 AND JUNE 30, 1998
REVENUES. Total revenues increased 31% to $19.7 million in the three months
ended June 30, 1999 from $15.0 million in the three months ended June 30, 1998.
Revenues from core research increased 32% to $14.8 million in the three months
ended June 30, 1999 from $11.2 million in the three months ended June 30, 1998.
Increases in total revenues and revenues from core research were primarily
attributable to an increase in the number of client companies to 1,466 at June
30, 1999 from 1,113 at June 30, 1998, an increase in the sales organization to
130 employees at June 30, 1999 from 97 employees at
9
<PAGE> 10
June 30, 1998, and sales of additional core research to existing clients. No
single client company accounted for more than 3% of revenues for the three
months ended June 30, 1999.
Advisory services and other revenues increased 28% to $4.9 million in the
three months ended June 30, 1999 from $3.8 million in the three months ended
June 30, 1998. This increase was primarily attributable to the demand for the
Partners and Strategy Review Programs and the increase in analyst staff
providing advisory services to 117 at June 30, 1999 from 87 at June 30, 1998.
Revenues attributable to customers outside the United States increased 24%
to $4.1 million in the three months ended June 30, 1999 from $3.3 million in the
three months ended June 30, 1998, and decreased as a percentage of total
revenues to 21% for the three months ended June 30, 1999 from 22% for the three
months ended June 30, 1998. The increase in international revenues was
attributable primarily to the company's opening of its European headquarters in
Amsterdam, the Netherlands, and the related increase in sales personnel. The
Company invoices its international clients in U.S. dollars.
COST OF SERVICES AND FULFILLMENT. Cost of services and fulfillment
decreased as a percentage of total revenues to 33% in the three months ended
June 30, 1999 from 38% in the three months ended June 30, 1998. These expenses
increased 11% to $6.4 million in the three months ended June 30, 1999 from $5.8
million in the three months ended June 30, 1998. The decrease in expense as a
percentage of revenues is primarily due to hosting only one event in the three
month period ended June 30, 1999 versus three events in the three month period
ended June 30, 1998. The expense increase in the current period reflects
increased analyst staffing and related compensation expense.
SELLING AND MARKETING. Selling and marketing expenses increased as a
percentage of total revenues to 37% in the three months ended June 30, 1999 from
34% in the three months ended June 30, 1998. These expenses increased 43% to
$7.3 million in the three months ended June 30, 1999 from $5.1 million in the
three months ended June 30, 1998. The increase in expenses and expense as a
percentage of revenues was principally due to one-time production costs
associated with new product marketing collateral and the addition of direct
salespersons and related commission expense.
GENERAL AND ADMINISTRATIVE. General and administrative expenses remained
constant as a percentage of total revenues at 11% in the three months ended June
30, 1999 and 1998. These expenses increased 35% to $2.2 million in the three
months ended June 30, 1999 from $1.6 million in the three months ended June 30,
1998. The increase in expenses was principally due to staffing increases in the
Company's operations, finance, technology, and strategy groups.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense
increased 62% to $1.0 million in the three months ended June 30, 1999, from
$648,000 in the three months ended June 30, 1998. The increase in this expense
was principally due to purchases of computer equipment, software, office
furnishings, and leasehold improvements to support business growth.
OTHER INCOME. Other income, consisting primarily of interest income,
increased to $895,000 in the three months ended June 30, 1999 from $715,000 in
the three months ended June 30, 1998. The increase was due to the Company's
higher cash and marketable securities balances resulting from positive cash
flows from operations.
PROVISION FOR INCOME TAXES. During the three months ended June 30, 1999,
the Company recorded a tax provision of $1.4 million, reflecting an effective
tax rate of 38%. During the three months ended June 30, 1998, the Company
recorded a tax provision of $1.0 million, reflecting an effective tax rate of
38%.
SIX MONTHS ENDED JUNE 30, 1999 AND 1998
REVENUES. Total revenues increased 33% to $37.6 million in the six months
ended June 30, 1999 from $28.2 million in the six months ended June 30, 1998.
Revenues from core research increased 28% to $27.8 million in the six months
ended June 30, 1999 from $21.7 million in the six months ended June 30, 1998.
Increases in total revenues and revenues from core research were primarily
attributable to an increase in the number of client companies to 1,466 at June
30, 1999 from 1,113 at June 30, 1998, an increase in the sales organization to
130 employees at June 30, 1999 from 97 employees at June 30, 1998, and sales of
10
<PAGE> 11
additional core research to existing clients. No single client company accounted
for more than 3% of revenues for the six months ended June 30, 1999.
Advisory services and other revenues increased 51% to $9.8 million in the
six months ended June 30, 1999 from $6.5 million in the six months ended June
30, 1998. This increase was primarily attributable to increased demand for both
the Partners and Strategy Review Programs and Forrester Forum events, and the
increase in analyst staff providing advisory services to 117 at June 30, 1999
from 87 at June 30, 1998.
Revenues attributable to customers outside the United States increased 33%
to $7.8 million in the six months ended June 30, 1999 from $5.9 million in the
six months ended June 30, 1998. Revenues attributable to customers outside the
United States remained constant as a percentage of total revenues at 21% for the
six months ended June 30, 1999 and 1998. The increase in international revenues
was attributable primarily to the company's opening of its European headquarters
in Amsterdam, the Netherlands, and the increase in sales personnel there.
COST OF SERVICES AND FULFILLMENT. Cost of services and fulfillment
decreased as a percentage of total revenues to 35% in the six months ended June
30, 1999 from 38% in the six months ended June 30, 1998. These expenses
increased 23% to $13.0 million in the six months ended June 30, 1999 from $10.6
million in the six months ended June 30, 1998. The decrease in expense as a
percentage of revenues is primarily due to expense from Forrester Forums
remaining relatively constant against a larger revenue base. The expense
increase in the current period reflects increased analyst staffing and related
compensation expense.
SELLING AND MARKETING. Selling and marketing expenses increased as a
percentage of total revenues to 36% in the six months ended June 30, 1999 from
35% in the six months ended June 30, 1998. These expenses increased 37% to
$13.4 million in the six months ended June 30, 1999 from $9.8 million in the
six months ended June 30, 1998. The increase in expenses and expense as a
percentage of revenues was principally due to one-time production costs
associated with new product marketing collateral and the addition of direct
salespersons and related commission expense.
GENERAL AND ADMINISTRATIVE. General and administrative expenses remained
constant as a percentage of total revenues at 11% in the six months ended June
30, 1999 and 1998. These expenses increased 34% to $4.3 million in the six
months ended June 30, 1999 from $3.2 million in the six months ended June 30,
1998. The increase in expenses was principally due to staffing increases in the
Company's operations, finance, technology, and strategy groups.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense
increased 63% to $1.9 million in the six months ended June 30, 1999 from $1.2
million in the six months ended June 30, 1998. The increase in this expense was
principally due to purchases of computer equipment, software, office
furnishings, and leasehold improvements to support business growth.
OTHER INCOME. Other income, consisting primarily of interest income,
increased to $1.8 million in the six months ended June 30, 1999 from $1.4
million in the six months ended June 30, 1998. The increase was due to the
Company's higher cash and marketable securities balances resulting from
positive cash flows from operations.
PROVISION FOR INCOME TAXES. During the six months ended June 30, 1999, the
Company recorded a tax provision of $2.5 million, reflecting an effective tax
rate of 38%. During the six months ended June 30, 1998, the Company recorded a
tax provision of $1.8 million, reflecting an effective tax rate of 38%.
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its operations during the periods discussed
through funds generated from operations. Memberships for core research, which
constituted approximately 75% of the Company's revenues for the three months
ended June 30, 1999, are annually renewable and are generally payable in
advance. The Company generated $10.0 and $4.0 million in cash from operating
activities during the six-month periods ended June 30, 1999 and 1998,
respectively. The significant increase is primarily due to increased income and
positive cash flow resulting from the collection of receivables.
During the six-month period ended June 30, 1999, the Company used $17.5
million of cash in investing activities, consisting of $1.5 million for
purchases of property and equipment, $1.0 million for a minority investment in
Greenfield Online, Inc., and $15.0 million for net purchases of marketable
11
<PAGE> 12
securities. The Company regularly invests excess funds in short- and
intermediate-term interest-bearing obligations of investment grade.
As of June 30, 1999, the Company had cash and cash equivalents of $8.1
million and $71.1 million in marketable securities. The Company does not have a
line of credit and does not anticipate the need for one in the foreseeable
future. The Company plans to continue to introduce new products and services and
to invest in its infrastructure over the next 12 months. The Company believes
that its current cash balance, marketable securities, and cash flows from
operations will satisfy working capital, financing activities, and capital
expenditure requirements for at least the next two years.
YEAR 2000 DISCLOSURE
THE COMPANY'S STATE OF READINESS. The Company is implementing a broad-based
remediation effort to address the year 2000 problem. This effort consists of the
following three stages: (i) survey and assess the Company's operations for year
2000 compliance; (ii) execute the necessary software and hardware remedial
changes; and (iii) test the remediation efforts to ensure year 2000 compliance.
There can be no assurance that the Company's survey will identify all year 2000
problems in these areas or that the necessary corrective actions will be
completed in a timely manner.
The first stage of the effort, a survey and assessment of the Company's
operations for year 2000 compliance, has been completed. The Company identified
three areas of operations where the year 2000 problem could arise:
External product delivery systems. This includes the Company's three main
platforms for electronic product delivery: Forrester's web site, FTP site,
and Lotus Notes system.
Internal information technology systems. This includes the Company's MIS
functions, customer service applications, and production systems.
Third-party vendors and service providers. This includes a review of the
Company's third-party vendor and service providers to establish their
readiness for the year 2000 problem and assess any risks to the Company.
Material third-party vendor and service providers include: printers,
mailing houses, and CD-ROM duplicators.
This survey included a review of the year 2000 compliance of the Company's
European Research Center. The Company's external product delivery systems,
internal information technology systems, and a number of third-party vendors and
service providers are also utilized by the European Research Center. The Company
continues to monitor and review non-IT facilities and third-party vendors that
are used exclusively by the European Research Center.
The Company is currently implementing the second stage, executing the
software and hardware changes necessary to remediate potential year 2000
problems identified in the survey. The year 2000 compliance of the Company's
external product delivery systems and internal information technology systems
ultimately depends upon the delivery of year 2000-compliant systems from the
Company's vendors. The Company is working closely with these vendors to ensure
the timely delivery of year 2000- compliant systems. The Company's Lotus Notes
system is fully year 2000-compliant, and the Company has released updated
versions of its web site and FTP site, which bring these external delivery
systems into year 2000 compliance. The Company's MIS systems are fully compliant
and vendor-supplied upgrades for the Company's customer service applications and
production systems have been delivered and will be installed. The Company's
survey of non-IT facilities technology, which included a review of the elevator,
HVAC, security, and energy management systems, indicated that these systems are
currently year 2000-compliant due to the absence of date-sensitive
microcontrollers.
During this second stage the Company is also assessing its vulnerability to
year 2000 problems of third-party vendors and service providers. The Company
relies on third-party suppliers primarily to deliver printing services, mailing
services, Internet and web hosting services, and CD-ROM duplication. The Company
intends to continuously identify and prioritize critical service providers and
vendors, and communicate with them about their plans and progress in addressing
the year 2000 problem.
12
<PAGE> 13
The final stage of the Company's year 2000 efforts, the internal testing of
all systems, is also currently underway. In the fourth quarter of 1998 the
Company completed a successful test of its internal IT systems and intends to
continue to test these systems during 1999. The Company has completed all
testing for year 2000 compliance and will continue to monitor all of its systems
during the second half of 1999.
THE COMPANY'S YEAR 2000 RISK. Based on the efforts described above, the
Company currently believes that its systems are year 2000 compliant as of
mid-1999. However, there can be no assurance that all year 2000 problems will be
successfully identified or that the necessary corrective actions will be
completed in a timely manner. In addition, the survey has indicated that the
Company's compliance will require the delivery of upgrades by various vendors,
and any failure to deliver these upgrades in a timely manner will adversely
affect the Company's readiness for the year 2000 problem. The Company relies on
the Internet for its external distribution systems, and any failure of the
Internet due to year 2000 issues could adversely affect the Company.
THE COMPANY'S CONTINGENCY PLANS. The Company is designing a contingency
plan for year 2000 problems. This contingency plan will be in place by the end
of the third quarter 1999 and will be designed to mitigate the effects of third
parties' failures to remediate their year 2000 issues and for unexpected
failures in its own systems. Pursuant to the contingency plan, the Company has
made arrangements for some alternate suppliers, such as Internet service
providers, and will continue to identify potential alternate suppliers. If it
becomes necessary for the Company to take these corrective actions, it is
uncertain whether this would result in significant interruptions in service or
delays in business operations or whether it would have a material adverse effect
on the Company's results of operations, financial position, or cash flow.
COSTS OF YEAR 2000 REMEDIATION. As of June 30, 1999, the Company has not
incurred material costs related to the year 2000 problem. In the future, the
Company may incur small incremental costs in connection with the upgrades of its
external delivery systems and internal information technology systems. The
Company has not deferred other information technology projects due to year 2000
expenses and does not expect to defer such projects in the future.
13
<PAGE> 14
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The following discussion about the Company's market risk disclosures
involves forward-looking statements. Actual results could differ materially from
those projected in the forward-looking statements. The Company is exposed to
market risk related to changes in interest rates and foreign currency exchange
rates. The Company does not use derivative financial instruments for speculative
or trading purposes.
INTEREST RATE SENSITIVITY. The Company maintains an investment portfolio
consisting mainly of corporate obligations, federal agency obligations, state
and municipal bonds, and U.S. Treasury notes with a weighted average maturity of
less than one year. These held-to-maturity securities are subject to interest
rate risk and will fall in value if market interest rates increase. If market
interest rates were to increase immediately and uniformly by 10% from levels at
June 30, 1999, the fair market value of the portfolio would decline by an
immaterial amount. The Company has the ability to hold its fixed income
investments until maturity. Therefore, the Company would not expect its
operating results or cash flows to be affected to any significant degree by the
effect of a sudden change in market interest rates on its securities portfolio.
The following table provides information about the Company's investment
portfolio. For investment securities, the table presents principal cash flows
and related weighted average interest rated by expected maturity dates.
Principal amounts by expected maturity in U.S. Dollars (in thousands except
interest rates):
<TABLE>
<CAPTION>
Fair Value FY 2001
at June 30, and
1999 FY 1999 FY 2000 Thereafter
<S> <C> <C> <C> <C>
Cash equivalents $ 8,638 $ 8,638 $ -- $ --
Weighted average interest rate 3.97% 3.97% --% --%
Investments $69,860 $28,980 $25,168 $15,712
Weighted average interest rate 4.93% 4.86% 4.82% 5.23%
Total Portfolio $78,498 $37,618 $25,168 $15,712
Weighted average interest rate 4.82% 4.66% 4.82% 5.23%
</TABLE>
FOREIGN CURRENCY EXCHANGE. On a global level, the Company faces exposure to
adverse movements in foreign currency exchange rates. This exposure may change
over time as business practices evolve and could have a material adverse impact
on the Company's financial results. Historically, the Company's primary exposure
had been related to non-dollar-denominated operating expenses in Europe, Canada,
and Asia, where the Company sells primarily in U.S. dollars. The introduction of
the Euro as a common currency for members of the European Monetary Union has
taken place in the Company's fiscal year 1999. The Company has not determined
what impact, if any, the Euro will have on foreign exchange exposure. The
Company is prepared to hedge against fluctuations the Euro will have on foreign
exchange exposure if this exposure becomes material. As of June 30, 1999, the
assets and liabilities related to non-dollar-denominated currencies was
approximately $1.3 million.
14
<PAGE> 15
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not currently a party to any material legal proceedings.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
The Annual Meeting of Stockholders ("Meeting") was held on May 11, 1999. At such
meeting, the stockholders elected the following person as a Class I Director of
the Board of Directors by the following votes:
Total Vote For Total Vote Withheld
Director From Director
-------------- -------------------
George F. Colony 8,395,575 42,765
Henk W. Broeders and George R. Hornig's terms of office as Class II Directors
continued after the Meeting. Robert M. Galford and Michael H. Welles' terms of
office as Class III Directors continued after the Meeting.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.11 Lease dated May 6, 1999 between Technology Square LLC and the
Company for the premises located at 565 Technology Square,
Cambridge, Massachusetts (the "Technology Square Lease").
27 Financial Data Schedule
(b) Reports on Form 8-K
None.
15
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Forrester Research, Inc.
By: /s/ George F. Colony
-------------------------------------
George F. Colony
Chairman of the Board, President, and
Chief Executive Officer
Date: August 16, 1999
By: /s/ Susan M. Whirty
-------------------------------------
Susan M. Whirty
Chief Financial Officer, Vice President,
Operations
(principal financial and accounting
officer)
Date: August 16, 1999
<PAGE> 1
CONTENTS
<TABLE>
<CAPTION>
<S> <C>
1. REFERENCE DATA 1
1.1 Exhibits 1
1.2 Definition References 1
2. DESCRIPTION OF PREMISES 1
2.1 Demised Premises 1
2.2 Complex 1
2.3 Appurtenant Rights 1
3. TERM OF LEASE 7
3.1 Definitions 7
3.2 Habendum 7
3.3 Declaration Fixing Rent Commencement Date 8
4. READINESS FOR OCCUPANCY - ENTRY BY TENANT PRIOR TO TERM COMMENCEMENT DATE 8
4.1 Completion Date - Delays 8
4.2 When Premises Deemed Substantially Complete 11
4.3 Plans and Specifications 13
4.4 Preparation of Premises 14
4.5 Quality and Cost of Materials 16
4.6 Tenant's Delay - Additional Costs 17
4.7 Entry by Tenant Prior to Rent Commencement Date 17
4.8 Conclusiveness of Landlord's Performance 18
4.9 Tenant Payments of Construction Cost 18
5. USE OF PREMISES 18
5.1 Permitted Use 18
5.2 Prohibited Uses 19
5.3 Licenses and Permits 19
6. RENT 20
7. HAZARDOUS MATERIALS 22
8. SERVICES FURNISHED BY LANDLORD 25
8.1 Electric Current 25
8.2 Water 26
8.3 Heat and Cleaning 26
8.3A Tenant's Election to Perform Premises Cleaning 26
8.4 Air Conditioning 27
8.5 Additional Heat, Cleaning and \Air Conditioning Services 27
8.6 Additional Air Conditioning Equipment 28
</TABLE>
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<PAGE> 2
<TABLE>
<CAPTION>
<S> <C>
8.7 Repairs 28
8.8 Interruption or Curtailment of Services 29
8.9 Energy Conservation 30
8.10 Miscellaneous 30
8.11 Security and Access 31
8.12 Disputes 31
9. ESCALATION 31
9.1 Definitions 31
9.2 Tax Excess 40
9.3 Operating Expense Excess 41
9.4 Part Years 43
9.5 Effect of Taking 43
9.6 Adjustment of Operating Costs 43
Based upon Occupancy
9.7 Disputes, etc. 44
9.8 Adjustment for Changed Operating Costs 44
10. CHANGES OR ALTERATIONS BY LANDLORD 45
11. FIXTURES, EQUIPMENT AND IMPROVEMENTS - REMOVAL BY TENANT 46
12. ALTERATIONS AND IMPROVEMENTS BY TENANT 47
13. TENANT'S CONTRACTORS - MECHANIC'S AND OTHER LIENS - STANDARD OF TENANT'S PERFORMANCE -
COMPLIANCE WITH LAWS 49
14. REPAIRS BY TENANT - FLOOR LOAD 50
14.1 Repairs by Tenant 50
14.2 Floor Load - Heavy Machinery 50
15. INSURANCE, INDEMNIFICATION, EXONERATION AND EXCULPATION 51
15.1 General Liability Insurance 52
15.2 Certificates of Insurance 51
15.3 General 52
15.4 Property of Tenant 52
15.5 Bursting of Pipes, etc. 53
15.6 Repairs and Alterations - No Diminution 53
of Rental Value
15.7 Landlord Indemnity of Tenant 55
16. ASSIGNMENT, MORTGAGING AND SUBLETTING 55
</TABLE>
-ii-
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C>
17. MISCELLANEOUS COVENANTS 60
17.1 Rules and Regulations 60
17.2 Access to Premises - Shoring 61
17.3 Accidents to Sanitary and Other Systems 62
17.4 Signs, Blinds and Drapes 62
17.5 Estoppel Certificate 62
17.6 Prohibited Materials and Property 63
17.7 Requirements of Law - Fines and Penalties 63
17.8 Tenant's Acts - Effect on Insurance 64
17.9 Miscellaneous 64
18. DAMAGE BY FIRE, ETC. 65
18.1 Casualty Insurance 65
18.2 Repair of Damage Caused by Casualty 65
18.3 Landlord's Termination Rights 66
18.4 Tenant's Termination Rights 66
18.5 General Provisions Relating to Any Casualty Termination 68
19. WAIVER OF SUBROGATION 68
20. CONDEMNATION - EMINENT DOMAIN 69
20.1 Landlord's Termination Rights 69
20.2 Tenant's Termination Rights 70
20.3 General Taking Provisions 70
20.4 Taking Process 71
20.5 Temporary Takings 71
21. DEFAULT 71
21.1 Conditions of Limitation - Re-entry - Termination 71
21.2 Damages - Assignment for Benefit of Creditors 72
21.3 Damages - Termination 72
21.4 Fees and Expenses 74
21.5 Waiver of Redemption 75
21.6 Landlord's Remedies Not Exclusive 75
21.7 Grace Period 75
21.8 Tenant's Self-Help 76
22. END OF TERM - ABANDONED PROPERTY 76
23. SUBORDINATION 78
24. QUIET ENJOYMENT 80
</TABLE>
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<PAGE> 4
<TABLE>
<CAPTION>
<S> <C>
25. ENTIRE AGREEMENT - WAIVER - SURRENDER 80
25.1 Entire Agreement 80
25.2 Waiver 80
25.3 Surrender 80
26. INABILITY TO PERFORM - EXCULPATORY CLAUSE 81
27. BILLS AND NOTICES 82
28. PARTIES BOUND - SEIZIN OF TITLE 83
29. MISCELLANEOUS 83
29.1 Separability 83
29.2 Captions, etc. 83
29.3 Broker 83
29.4 Modifications 84
29.5 Arbitration 84
29.6 Governing Law 84
29.7 Assignment of Rents 85
29.8 Representation of Authority 85
29.9 Expenses Incurred by Landlord Upon Tenant Requests 85
29.10 Survival 85
29.11 Rule of Interpretation 86
29.12 Consumer Price Index 86
</TABLE>
-iv-
<PAGE> 5
EXHIBITS
Exhibit 1 Lease Data Exhibit
Exhibit 2 Lease Plan
Exhibit 3 Plan and Legal Description of Complex
Exhibit 4 Base Building Work
Exhibit 4A Plans and Response Schedule
Exhibit 5 Building Services
Exhibit 6 Building Standard Items
Exhibit 7 Hazardous Materials
Exhibit 8 Rules and Regulations
Exhibit 9 Table of Definitions
Exhibit 10 Signs
Exhibit 11 Measurement Standards
Exhibit 12 Letter of Credit
Exhibit 13 Building Parking Area and Building Courtyard Area
Exhibit 14 Security Services
Exhibit 15 Confidentiality Agreement
Exhibit 16 Operating Cost Categories
Exhibit 17 Floor Load Capacities
Exhibit 18 Off-Site Parking Agreement
Exhibit 19 Tax Lots
Exhibit 20 Definition of General Conditions
Exhibit 21 Form of Overlandlord's Consent
Exhibit 22 Form of Assignment and Assumption Agreement
Rider
-v-
<PAGE> 6
THIS INDENTURE OF LEASE made and entered into as of this ___ day of
___________, 1999 by and between Forrester Research, Inc., a Delaware
corporation ("Tenant") and Technology Square LLC, a Delaware limited liability
company ("Landlord").
Landlord does hereby demise and lease to Tenant, and Tenant does hereby
hire and take from Landlord, the Premises hereinafter mentioned and described
(hereinafter referred to as "Premises"), upon and subject to the covenants,
agreements, terms, provisions and conditions of this Lease for the term
hereinafter stated:
1. REFERENCE DATA
1.1 Exhibits. Each reference in this Lease to any of the terms and titles
contained in any Exhibit attached to this Lease shall be deemed and construed to
incorporate the data stated under that term or title in such Exhibit.
1.2 Definitions. See Exhibit 9.
2. DESCRIPTION OF DEMISED PREMISES
2.1 Demised Premises. The Premises are located in the Building as
described in Exhibit 1. The Premises are substantially as shown on the Lease
Plan, Exhibit 2, Sheets 1 through 7, attached hereto and incorporated by
reference as a part hereof. There is hereby expressly reserved to Landlord any
space in or adjacent to the Premises used for shafts, stacks, pipes, conduits,
wires, and appurtenant fixtures, fan rooms, ducts, electric and other utilities,
sinks or other Building facilities serving any other area(s) in the Building to
the extent the same are installed in or adjacent to each Portion of the Premises
as of the Rent Commencement Date in respect of such Portion of the Premises.
2.2 Complex. The Building is located in the Complex described in Exhibits
1 and 3, which Complex may be changed, increased or decreased by addition or
subdivision of parcels and/or by construction and/or demolition of buildings
and/or other improvements by Landlord from time to time, in accordance with and
subject to the terms of this Lease.
2.3 Appurtenant Rights.
(a) Tenant shall have, as appurtenant to the Premises, rights to use
in common with others entitled thereto, subject to the Rules and Regulations, as
defined in Article 17.1 and with due regard for the rights of others to use the
same: (i) the common roadways, sidewalks and walkways of the Complex, (ii)
subject to the provisions of Paragraphs (b) and (c) of this Article 2.3, the
On-Site Parking Areas and the Off-Site Parking Areas, as hereinafter defined,
for the purpose of parking of motor vehicles, (iii) any common area amenities of
the Complex (e.g., benches and lawns) for the purposes for which the same are
intended, (iv) the loading docks and delivery areas of the
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<PAGE> 7
Building, and (v) any common cafeteria and/or common fitness center if and to
the extent operated at the Complex; and no other appurtenant rights or
easements. Except as otherwise provided in this Paragraph (a), Tenant shall have
equal access to the common areas of the Building and the Complex.
Notwithstanding the foregoing, Landlord shall have the right, subject to the
limitations specified below in this Paragraph (a), to grant exclusive rights in
the common areas to other tenants of the Complex including, without limitation,
the right to install signage and equipment on portions of the roofs of the
buildings, the right to the exclusive use of risers within buildings,
installation of plaza kiosks and the right to exclusive parking in the On-Site
Parking Areas (as hereinafter defined).
Landlord's right to grant exclusive rights in the common areas shall be
subject to the following restrictions and limitations:
1. Landlord may not grant exclusive rights that would materially
adversely affect either (a) Tenant's use of the Premises as contemplated
hereunder, or (b) any of the other rights of Tenant expressly granted under
this Lease with respect to the Building or the Complex, including, without
limitation, Tenant's exclusive signage rights, as specified in Exhibit 10.
2. Tenant shall not be responsible for subsidizing such exclusive uses
through the payment of Operating Expense Excess or otherwise.
3. Landlord may not grant exclusive parking rights in the Garage (as
hereinafter defined) to any user other than Draper Labs or MIT and if
Landlord shall so grant exclusive parking rights to Draper Labs and/or MIT,
then Landlord shall grant Tenant a pro rata number of exclusive parking
spaces in the Garage on a relative per square footage basis at the higher
of the ratios of exclusive parking spaces in the Garage granted by Landlord
to Draper Labs and MIT. Notwithstanding anything to the contrary herein
contained, Landlord shall have the right to grant up to four (4) exclusive
parking passes in the Garage to retail tenants of the Building or Complex.
Any such exclusive parking spaces for Tenant shall be the spaces located on
the lowest floor or floors in the Garage that are not then subject to the
exclusive rights of another user of the Garage. The granting to Tenant of
exclusive parking spaces in the Garage shall not be deemed to increase the
overall number of passes allocable to Tenant for parking in the On-Site
Parking Areas. (For example, if MIT is granted 1.5 exclusive spaces in the
Garage per 1,000 square feet of Total Rentable Area of the Premises and
Tenant is granted .5 spaces in the Garage per 1,000 square feet of Total
Rentable Area of the Premises, the Landlord shall grant Tenant 1.5
exclusive parking spaces in the Garage, up to the number of parking passes
with respect to the Garage to which Tenant is entitled under this Lease.)
4. Landlord may not grant exclusive rights of any kind in (a) the surface
parking area depicted on Exhibit 13 as the "Building Parking Area", (b) the
area
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<PAGE> 8
depicted on Exhibit 13 as the "Building Courtyard Area" (except for retail
uses available to all tenants of the Complex) or (c) the lobby of the
Building (except for retail uses available to all tenants of the Building).
Notwithstanding anything to the contrary herein or in the Lease contained,
Landlord shall provide redundant conduit access into the Building for two (2)
independent and separate local telecommunications service providers and Landlord
shall have the right to charge Tenant's telecommunication service providers fees
in connection with the services being performed by such providers at the rates,
from time to time, then being charged by Landlord to other telecommunication
service providers in the Building and in the Complex providing the same or
similar services to other tenants in the Building or Complex. Landlord agrees
not to discriminate against Tenant or to act arbitrarily in assessing such fees
to, or collecting such fees from, Tenant's providers.
Landlord agrees that a common cafeteria shall be open, functioning and
available to Tenant as of the Rent Commencement Date in respect of Portion 2-6.
(b) For the purposes of this Lease, the "On-Site Parking Areas" shall
be defined as the garage ("Garage") and the surface parking areas now and from
time to time hereafter within the Complex. Commencing as of the Rent
Commencement Date in respect of Portion 2-6 and continuing thereafter throughout
the term of the Lease, the Landlord will make available monthly parking passes
for use in the On-Site Parking Areas, in accordance with the following schedule:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
Time Period Number of Passes
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
<S> <C>
Rent Commencement Date in respect of Portion 2-6
through the day before the Rent Commencement Date in 156
respect of Portion 7
- ------------------------------------------------------------------------------------------------------------
Rent Commencement Date in respect of Portion 7
through the day before the Rent Commencement Date in 187
respect of Portion 8
- ------------------------------------------------------------------------------------------------------------
Rent Commencement Date in respect of Portion 8
through Termination Date 218
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
</TABLE>
Landlord shall have the right to designate whether such passes shall be for
the Garage or the surface parking areas, and to change such designation (and the
number of passes designated for each of the Garage and the surface parking
areas) from time to time, provided that the On-Site Parking Areas shall be
located within the areas shown on Exhibit 13, attached hereto, and that at least
sixty-six percent (66%) of such passes shall be for the Garage. Tenant shall
have no right to sublet or assign such parking passes, except as set forth in
this Paragraph (b). Tenant shall have the right, without obtaining
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<PAGE> 9
Landlord's consent, and without giving Landlord the right to take back such
parking passes, to assign said parking passes to a permitted assignee under
Article 16 of this Lease, and to sublet a pro rata number of such parking passes
(i.e., based upon the ratio of the Total Rentable Area subleased to the then
current Total Rentable Area of the Premises) to a subtenant permitted under
Article 16. In addition, Tenant shall have the right to sublease or assign
spaces to any other users from time to time permitted by law subject to the
following procedure. Tenant shall first offer such spaces to Landlord by a
written notice ("Parking Offer Notice") setting forth the number of spaces
("Parking Offer Spaces") and the period ("Parking Offer Period") Tenant desires
to sublease or assign the Parking Offer Spaces. The Parking Offer Period shall
be at least six (6) months long. Landlord shall have the right, within fifteen
(15) days after Landlord's receipt of Tenant's Parking Offer Notice, to take
back one or more of the Parking Offer Spaces for the Parking Offer Period. If
Landlord exercises such right, Tenant shall have no obligation to pay for the
Parking Offer Spaces taken back by Landlord during the Parking Offer Period.
After the expiration of the Parking Offer Period, the Parking Offer Spaces taken
back by Landlord shall then revert to Tenant on the terms and conditions herein
contained. Tenant shall have no right to give a Parking Offer Notice more often
than once every six (6) months during the term of the Lease. If Landlord does
not elect to take back the Parking Offer Spaces, then Tenant shall have the
right to assign or sublease said Parking Offer Spaces to any other users from
time to time permitted by law. Except as set forth in the immediately preceding
sentence, Tenant shall have no other right to sublet, assign, or otherwise
transfer said parking passes. Except as otherwise expressly provided herein,
said parking passes will be on an unassigned, non-reserved basis.
Said parking passes shall be paid for by Tenant, as additional Rent ("Parking
Rent") hereunder, in accordance with the following schedule:
The initial Parking Rent shall be $140 per pass per month. Commencing as of
the first (1st) anniversary of the Rent Commencement Date in respect of
Portion 2-6 of the Premises, and on each anniversary of such Rent
Commencement Date thereafter during the term of this Lease, the Parking
Rent for such passes shall be increased to equal the sum of : (x) $140 per
pass per month, plus (y) the product of (i) the percentage increase in the
Consumer Price Index, defined in Article 29.12, during the period from the
Rent Commencement Date in respect of Portion 2-6 through the applicable
anniversary of the Rent Commencement Date in respect of Portion 2-6,
multiplied by (ii) $140 per pass per month.
In addition, to the extent that Landlord, in its sole discretion, from time
to time, decides to offer monthly at-will parking in the On-Site Parking Areas,
Landlord shall offer Tenant the first 70 passes for such monthly at-will
parking. Tenant shall have ten (10) business days after Landlord's offer within
which to accept such parking passes. Landlord and Tenant shall each have the
right to terminate Tenant's right to use any or all of such parking passes upon
thirty (30) days' notice to the other party. Landlord shall have the right to
designate whether such passes shall be for the Garage or the surface parking
areas, and to change such designation (and the number of passes designated for
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<PAGE> 10
each of the Garage and the surface parking areas) from time to time provided
that the On Site Parking Areas shall be located within the areas shown on
Exhibit 13, attached hereto. Tenant shall have the right, without Landlord's
consent, to assign said parking passes to a permitted assignee under Article 16
of the Lease and to sublease on a pro rata basis, based upon the Total Rentable
Area of the sublet premises to the then current Total Rentable Area of the
Premises, to permitted subtenants under Article 16 of the Lease. Except as set
forth in the immediately preceding sentence, Tenant shall have no right to
sublet, assign, or otherwise transfer said parking passes. Said parking passes
shall be paid for by Tenant, as additional Rent hereunder, at the then current
rate in the On-Site Parking Areas, as such rate may vary from time to time,
determined as aforesaid. Said parking passes will be on an unassigned,
non-reserved basis.
Notwithstanding anything to the contrary herein contained, if Tenant is
unable for any reason other than a casualty or taking or order of governmental
authority, to park one (1) or more vehicles for which Tenant is then holding
parking passes in the On-Site Parking Areas due to a lack of space in the
On-Site Parking Areas ("Parking Violation"), then Tenant may send a written
notice ("Parking Violation Notice") of the Parking Violation to Landlord. Tenant
shall provide evidence reasonably acceptable to Landlord of any Parking
Violation. If another Parking Violation occurs within the thirty (30) day period
after which Landlord receives the first Parking Violation Notice, then Landlord
shall, after receiving a second Parking Violation Notice from Tenant, be
obligated, at Landlord's sole cost and expense, to adequately staff the On-Site
Parking Areas in order to prevent the occurrence of any subsequent Parking
Violations. If, during the second five (5) business day period after Landlord
receives the second Parking Violation Notice, a third Parking Violation occurs
for which Landlord receives a Parking Violation Notice, then (i) Landlord shall
grant Tenant a number of reserved parking spaces in the On-Site Parking Areas in
locations designated by Landlord equal to the greatest number of vehicles which
were unable to park in the On-Site Parking Areas on any day during such second
five (5) business day period, despite holding parking passes for the On-Site
Parking Areas, and (ii) Landlord shall pay to Tenant, within thirty (30) days of
receipt of bills therefor, the costs incurred by Tenant to park vehicles during
any period after Landlord's receipt of the second Parking Violation Notice until
Landlord grants to Tenant such reserved parking rights in which such vehicles
are unable to park in the On-Site Parking Areas.
(c) Commencing as of the Rent Commencement Date in respect of Portion
2-6, and continuing thereafter through the term of this Lease, the Landlord will
make available the following monthly parking passes for use in the garage at One
Kendall Square, subject to relocation to an alternative location (which may be a
garage or a surface parking lot) located no further from the Building than the
garage at One Kendall Square (the "Off-Site Parking Areas"), in accordance with
the following schedule:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
Time Period Number of Passes
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
<S> <C>
Rent Commencement Date in respect of
- ------------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE> 11
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
<S> <C>
Portion 2-6 through the day before the Rent
Commencement Date in respect of Portion 7 52
- ------------------------------------------------------------------------------------------------------------
Rent Commencement Date in respect of Portion 7
through the day before the Rent Commencement Date in 62
respect of Portion 8
- ------------------------------------------------------------------------------------------------------------
Rent Commencement Date in respect of Portion 8
through the Expiration or earlier termination of the 73
initial term of this Lease
- ------------------------------------------------------------------------------------------------------------
</TABLE>
Tenant shall have the right to assign such parking passes to a permitted
assignee under Article 16 of this Lease and to sublease, on a pro rata basis
(determined as described above in subparagraph (b)) to permitted subtenants
under Article 16 of this Lease, such parking passes without Landlord's consent
and without offering Landlord an opportunity to recapture, as described below.
If Tenant desires to otherwise assign or to otherwise sublease any such parking
passes, then Tenant shall first give Landlord a Parking Offer Notice, as defined
in Paragraph (b) of this Article 2.3 with respect to such Off-Site Parking Area,
and Landlord shall have the right, in accordance with the procedure set forth in
said Paragraph (b), to take back any or all of the Parking Offer Spaces in the
Off-Site Parking Location for the Parking Offer Period. If Landlord exercises
such right, Tenant shall have no obligation to pay for the Parking Offer Spaces
taken back by Landlord during the Parking Offer Period. After the expiration of
the Parking Offer Period, the Parking Offer Spaces taken back by Landlord shall
then revert to Tenant on the terms and conditions herein contained. If Landlord
does not elect to take back the Parking Offer Spaces, then Tenant shall have the
right to assign said parking passes to any user permitted by law. Except as set
forth in the immediately preceding sentence, Tenant shall have no right to
sublet, assign, or otherwise transfer said parking passes. Said parking passes
shall be paid for by Tenant, as additional Rent hereunder, at the then current
prevailing rate in the Off-Site Parking Area, as such rate may vary from time to
time. Said parking passes will be on an unassigned, non-reserved basis. Tenant
shall, and Landlord shall cause One Kendall LLC (the owner of the Off-Site
Parking Area) to, execute an Off-Site Parking Agreement in the form attached
hereto as Exhibit 18.
(d) As used herein, the term "Parking Areas" shall refer to the
On-Site Parking Areas and the Off-Site Parking Areas, collectively.
3. TERM OF LEASE
3.1 Definitions. As used in this Lease, the words and terms which follow
mean and include the following:
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<PAGE> 12
(a) "Specified Rent Commencement Date" - With respect to Portion 2-6
and Portion 7 of the Premises, the date (as stated in Exhibit 1) on which it is
estimated that the Portion of the Premises in question will be deemed
Substantially Completed, as defined in Article 4.2.
(b) "Rent Commencement Date" - With respect to Portion 8 of the
Premises, the "Rent Commencement Date" is the date set forth in Exhibit 1; with
respect to Portion 2-6 and Portion 7 of the Premises, the "Rent Commencement
Date" is the date on which such Portion of the Premises is Substantially
Completed, as defined in Article 4.2, provided, however that, subject to the
immediately following sentence, the Rent Commencement Date in respect of any
Portion of the Premises shall not be earlier than the respective Specified Rent
Commencement Date in respect of such Portion. If such Portion of the Premises is
not Substantially Completed but if, pursuant to consent therefor duly given by
Landlord, which consent shall not be unreasonably withheld, conditioned or
delayed, Tenant (i) takes possession of the whole of such Portion of the
Premises for use as set forth in Exhibit 1, "Rent Commencement Date" for such
Portion shall be the date on which Tenant takes such possession, or (ii) takes
possession of any part of a floor(s) of such Portion of the Premises for use as
set forth in Exhibit 1, "Rent Commencement Date" in respect of the entirety of
such floor(s) of such Portion shall be the date on which Tenant takes possession
of any portion of such floor(s). The Rent Commencement Date in respect of
Portion 2-6 shall, for all purposes of this Lease, be deemed to be the date as
of which the Rent Commencement Date has occurred for all of the floors in
Portion 2-6; provided however, that Tenant's obligation to pay Rent in respect
of such floor in Portion 2-6 shall commence on the Rent Commencement Date in
respect of such floor, as aforesaid. Subject to the last sentence of this
Article 3.1(b), Landlord shall give Tenant fourteen (14) days advance notice of
the date on which, in Landlord's judgment, any Portion of the Premises is or
will be Substantially Completed. Such notice and the date therein contained
shall be subject to Force Majeure Delays, and, subject to the provisions of
Article 4, Landlord shall not be liable to Tenant for any loss, cost, liability
or expense resulting from such delay, provided however that in the event of any
delay in the date such Portion of the Premises is Substantially Completed beyond
the date specified in Landlord's notice to Tenant, Landlord shall give Tenant a
subsequent fourteen (14) day notice(s).
3.2 Habendum. TO HAVE AND TO HOLD the Premises for a term of years
commencing on the date hereof and ending on the Termination Date as stated in
Exhibit 1 or on such earlier date upon which said term may expire or be
terminated pursuant to this Lease or pursuant to law (which date for the
termination of the term hereof is herein referred to as the "Termination Date"),
provided, however, that Tenant shall have no obligations under Articles 6(a)
(other than the last sentence thereof with respect to sums due hereunder other
than Rent), 9, 15.3(a), the first (1st) sentence of Article 14.1, and Articles
8.1(a) and 17.3 of the Lease ("Inapplicable Provisions") prior to the Rent
Commencement Date for Portion 2-6 and Tenant shall in no event incur any
liability under the Inapplicable Provisions attributable to the time prior to
the Rent Commencement Date for Portion 2-6. In addition, in no event shall
Tenant be
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<PAGE> 13
responsible under Articles 17.6, 17.8 and 17.9 of the Lease for the acts of
Landlord, Landlord's Contractor, or anyone performing Landlord's Work.
Notwithstanding the foregoing, if the Termination Date as stated in Exhibit 1
shall fall on other than the last day of a calendar month, said Termination Date
shall be deemed to be the last day of the calendar month in which said
Termination Date occurs.
3.3 Declaration Fixing Rent Commencement Date. As soon as may be practical
after the Rent Commencement Date in respect of Portion 2-6 of the Premises, each
of the parties hereto agrees, upon demand of the other party to join in the
execution, in recordable form, of a statutory notice, memorandum, etc. of lease
and/or written declaration in which shall be stated the Rent Commencement Date
in respect of Portion 2-6 of the Premises, and (if need be) the Termination
Date. If this Lease is terminated before the term expires, then upon Landlord's
request the parties shall execute, deliver and record an instrument
acknowledging such fact and the date of termination of this Lease, and Tenant
hereby appoints Landlord its attorney-in-fact in its name and behalf to execute
such instrument if Tenant shall fail to execute and deliver such instrument
after Landlord's request therefor within ten (10) days, unless Tenant disputes
such termination in writing.
4. READINESS FOR OCCUPANCY - ENTRY BY TENANT PRIOR TO TERM COMMENCEMENT DATE
4.1 COMPLETION DATE - DELAYS. (a) Subject to delay due to causes beyond
Landlord's reasonable control ("Force Majeure Delays") or caused by a Tenant
Delay, as hereinafter defined, Landlord shall use reasonable speed and diligence
to have Landlord's Work in Portion 2-6 and Portion 7 of the Premises
Substantially Completed, as hereinafter defined, on their respective Specified
Rent Commencement Dates. Except as set forth in this Article 4.1, (i) the
failure to have such Portion of the Premises Substantially Completed, as
hereinafter defined, on the Specified Rent Commencement Date for such Portion
shall in no way affect the validity of this Lease or the obligations of Tenant
hereunder, and (ii) if Landlord's Work in a Portion of the Premises is not
Substantially Completed on the Specified Rent Commencement Date for such
Portion, Tenant shall not have any claim against Landlord, and Landlord shall
have no liability to Tenant, by reason thereof.
(b) ABATEMENT OF RENT BASED UPON DELAY IN RENT COMMENCEMENT DATE. If the
Rent Commencement Date in respect of Portion 2-6 has not occurred on or before
the Target Date, as hereinafter defined, then Tenant shall be entitled to a
credit against the Yearly Rent otherwise payable from and after the Rent
Commencement Date for such Portion equal to the amount of Yearly Rent payable
for one (1) day for each day between the Target Date and the Rent Commencement
Date in respect of Portion 2-6. For the purposes hereof, the "Target Date" shall
be November 1, 1999, provided however, that the Target Date shall be extended by
the number of days that Landlord's Work is delayed due to Force Majeure Delays
and/or Tenant Delays.
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<PAGE> 14
(c) Tenant's Termination Right. If, for any reason, the Rent Commencement
Date in respect of Portion 2-6 of the Premises does not occur on or before
January 1, 2000 then, subject to the provisions of this Paragraph (c) and of
Paragraph (d) of this Section 4.1, Tenant shall have the right, exercisable by a
written termination notice ("Tenant's First Termination Notice") given on or
after January 3, 2000, to terminate the Lease effective as of the Outside
Completion Date, as hereinafter defined. If Tenant gives Tenant's First
Termination Notice and the Rent Commencement Date in respect of Portion 2-6
occurs on or before the Outside Completion Date, as hereinafter defined,
Tenant's First Termination Notice shall be deemed to be void and of no force or
effect. If, subject to subparagraph (d) of this Section 4.1, Tenant gives
Tenant's First Termination Notice and the Rent Commencement Date in respect of
Portion 2-6 does not occur for any reason on or before the Outside Completion
Date, this Lease shall terminate and shall be of no further force or effect. For
the purposes hereof, the "Outside Completion Date" shall be the date
twenty-eight (28) days after Tenant gives Tenant's First Termination Notice,
provided however, that the Outside Completion Date shall be extended one (1) day
for each day of Tenant Delay which exceed five (5) days in the aggregate and
shall also be extended by the lesser of (i) ninety (90) days or (ii) one (1) day
for each day of Force Majeure Delays which exceed twenty (20) days in the
aggregate. Notwithstanding the foregoing, if, on January 1, 2000, there have
been five (5) or fewer days of Tenant Delay and/or twenty (20) days or fewer of
Force Majeure Delays, Tenant's First Termination Notice may be given as late as
January 8, 2000 for an Outside Completion Date of January 31, 2000.
(d) Notwithstanding the provisions of clause (c) above, if Tenant gives
Tenant's First Termination Notice and if the reason the Rent Commencement Date
in respect of Portion 2-6 of the Premises has not occurred by January 1, 2000 is
that Landlord has previously experienced more than twenty (20) days of Force
Majeure Delays in the aggregate, then Landlord shall, within fourteen (14) days
of receipt of Tenant's First Termination Notice, advise Tenant in writing
("Landlord's Force Majeure Notice") of (i) the nature of the Force Majeure
Delays, (ii) the amount of time the Rent Commencement Date in respect of Portion
2-6 has been delayed due to such Force Majeure Delays and (iii) the date ("Force
Majeure Date") that Landlord reasonably estimates will be the Rent Commencement
Date in respect of Portion 2-6 based on the actual number of days of delay due
to such Force Majeure Delays and Landlord's reasonable estimate of additional
days of delay due to such Force Majeure Delays.
(i) If Landlord specifies a Force Majeure Date on or after April 30,
2000, then Tenant shall have the right, within fourteen (14) days of
receipt of Landlord's Force Majeure Notice, to terminate the term of the
Lease by written notice to Landlord ("Tenant's Second Termination Notice"),
effective as of the date of Tenant's Second Termination Notice. If Tenant
fails timely to give Tenant's Second Termination Notice, and if the Rent
Commencement Date in respect of Portion 2-6 occurs on or before the Force
Majeure Date, then Tenant shall have no further right to terminate the
Lease pursuant to this Article 4.2(d)(i).
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<PAGE> 15
(ii) If Landlord specifies a Force Majeure Date on or before April 30,
2000, then Tenant shall have no right to terminate the Lease pursuant to
this Article 4.2(d)(ii) unless the Rent Commencement Date in respect of
Portion 2-6 occurs on or after the Force Majeure Date. In such event (x)
Tenant shall have the right to terminate the Lease by giving written notice
to Landlord on or after the Force Majeure Date but on or before the Rent
Commencement Date in respect of Portion 2-6, and (y) Landlord shall
thereupon pay Tenant liquidated damages for all losses, costs and expenses
incurred by Tenant in connection with this Lease of One Million and 00/100
Dollars ($1,000,000.00) ("Tenant's Termination Damages").
(iii) If Landlord specifies a Force Majeure Date on or after May 1,
2000 but Tenant does not give Tenant's Second Termination Notice, and if
the Rent Commencement Date in respect of Portion 2-6 occurs after the Force
Majeure Date, then Tenant shall have the right to terminate the Lease by
giving written notice to Landlord on or after the Force Majeure Date but on
or before the Rent Commencement Date in respect of Portion 2-6, effective
as of the date of Tenant's notice. In such event, Landlord shall have no
obligation to pay any Tenant's Termination Damages.
(e) Landlord Bankruptcy. Notwithstanding anything to the contrary in the
Lease contained, if, prior to the Rent Commencement Date in respect of Portion
2-6, any proceeding ("Bankruptcy Proceeding") shall be instituted by or against
Landlord pursuant to any of the provisions of any Act of Congress or State law
relating to bankruptcy, reorganizations, arrangements, compositions or other
relief from creditors (collectively, "Bankruptcy Law") and, as a result of such
Bankruptcy Proceeding, this Lease is either: (i) rejected prior to Substantial
Completion of Landlord's Work or (ii) Landlord ceases for a period of sixty (60)
days or more to pursue Landlord's Work other than by reason of Force Majeure
Delays, then Tenant shall have the right, after giving Landlord fifteen (15)
days' prior written notice, to complete Landlord's Work. If Tenant elects to
complete Landlord's Work pursuant to this paragraph (e), then Tenant shall
diligently prosecute Landlord's Work to completion and Tenant shall have the
right, from and after the Rent Commencement Date in respect of Portion 2-6, to
offset the amount of the actual and reasonable costs incurred by Tenant in
completing Landlord's Work against Rent, provided, however, that in no event
shall the costs deducted in any month exceed the amount by which Rent payable
for such month exceeds the sum of (i) one-twelfth (1/12th) of the sum of (a)
Tenant's Building Operating Cost Percentage of the annualized debt service
payable by Landlord to its mortgagee(s) and properly allocable to the Building
under its loan agreements with such mortgagee(s), and (b) Tenant's Building Tax
Percentage of the Building Taxes for the Tax Period in question, (ii)
one-twelfth (1/12th) of the sum of Tenant's Complex Operating Cost Percentage of
the annualized debt service payable by Landlord to its mortgagee(s) and properly
allocable to the Land of the Complex under its loan agreements with such
mortgagee(s), and (iii) Tenant's Building Operating Cost Percentage and Tenant's
Complex Operating Cost Percentage of Building Operating Costs and Complex
Operating Costs, respectively, for the month in question.
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<PAGE> 16
Nothing herein shall be deemed to be a waiver or limitation upon any of Tenant's
rights under Bankruptcy Law.
(f) Except for delays in the Rent Commencement Date pursuant to Article
3.1, this Article 4.1 sets forth all of Tenant's remedies based upon Landlord's
failure timely to Substantially Complete Landlord's Work.
4.2 When Premises Substantially Completed.
(a) Definition of Substantially Completed. Portion 2-6 and Portion 7 of
the Premises shall be "Substantially Completed" in each Portion on such date as
is specified in a 14-day notice as contemplated by Article 3.1 and on or before
which date (i) Landlord's Work in such Portion has been completed except for
minor or insubstantial details of construction, decoration or mechanical
adjustments remaining to be done in such Portion of the Premises or any part
thereof which details will not materially interfere with Tenant's conduct of
business in such Portion of the Premises and which can be completed without
causing material interference with Tenant's use and occupancy of such Portion,
all as set forth in a so-called punch list prepared and signed by Tenant and
Landlord ("Punch List Items"), the first floor lobby area is finished and no
staging, scaffolding, vertical hoists or other construction apparatus or
construction materials remain in such Portion or first floor lobby area, (ii)
the elevator, plumbing, heating, ventilating, air conditioning, life safety,
sprinkler and electric facilities are installed and operating for such Portion,
and (iii) Landlord has delivered to Tenant a certificate of occupancy permitting
Tenant to legally occupy the Portion of the Premises then being delivered to
Tenant ("Certificate of Occupancy").
(b) Definition of Tenant Delays. For the purposes hereof, a "Tenant Delay"
shall be defined as any delay that actually results in a delay in Landlord
having Landlord's Work Substantially Completed to the extent that such actual
delay is:
(i) caused by Tenant's failure to timely respond within the
time/response schedules specified in the Plans and Response Schedule set
forth in Exhibit 4A, attached hereto; or
(ii) due to long-lead items of which Landlord advises Tenant in
writing at the time that Landlord approves Tenant's construction drawings;
or
(iii) due to changes, alterations or additions required or made by
Tenant in the layout or finish of the Premises or any part thereof after
Landlord approves Tenant's plans; or
(iv) caused by delay and/or default on the part of Tenant or its
contractors including, without limitation, the utility companies and other
entities furnishing communications, data processing or other service or
equipment (including, without limitation, any such delay which results in a
delay in Landlord
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<PAGE> 17
obtaining the Certificate of Occupancy). With respect to any Tenant Delay
under this clause (iv), no period of time prior to the date that Landlord
notifies Tenant of a Tenant Delay shall be considered to be a potential
Tenant Delay; or
(v) caused by Tenant or Tenant's Representatives, as hereinafter
defined, taking any action under Article 4.4(v) hereof, or failing to take
any action under Article 4.4(v) hereof which Tenant is required to take
(including, without limitation, failing to timely respond within the time
periods set forth in Article 4.4(v) or unreasonably withholding any
approval required of Tenant under Article 4.4(v).
Tenant shall not be responsible for any delay in Landlord's Work,
including the Tenant Improvement Work, as hereinafter defined, other than a
Tenant Delay.
In the event of a Tenant Delay(s), Tenant shall pay to Landlord, on
the last day of the month in question, as rent, on a monthly basis in
arrears, an amount ("Tenant Delay Payment") equal to the Yearly Rent which
would have been payable to Landlord during the length of any Tenant Delays.
For example, if Landlord's Work in Portion 2-6 is delayed for forty-five
(45) days due to Tenant Delays, then on September 30, 1999, Tenant shall
pay to Landlord $303,251.25 for thirty (30) days of Tenant Delays for the
month of September, 1999, and on October 31, 1999, Tenant shall pay to
Landlord $151,615.62 for fifteen (15) days of Tenant Delays for the period
October 1, 1999 through October 15, 1999 . Tenant shall have the right to
submit any dispute to arbitration in accordance with Article 29.5 as to
whether Tenant is obligated to make any Tenant Delay Payment by giving
Landlord written notice of such dispute within ten (10) days after Landlord
makes written demand upon Tenant to make such Tenant Delay Payment.
(c) If a Portion of the Premises is not Substantially Completed, Tenant
shall not (except with Landlord's consent, which consent shall not be
unreasonably withheld, conditioned or delayed) be entitled to take possession of
such Portion for use as set forth in Exhibit 1 until such Portion is
Substantially Completed.
(d) Punch List Items. Any of the Punch List Items in a Portion of the
Premises not fully completed on the Rent Commencement Date in respect of such
Portion shall thereafter be completed within thirty (30) days after the Rent
Commencement Date, subject to Force Majeure Delays.
4.3 Plans and Specifications. (a) Tenant shall be solely responsible for
the timely preparation and submission to Landlord of the final architectural,
electrical and mechanical construction drawings, plans and specifications
(called " Tenant's plans") for the Tenant Improvement Work, which Tenant's plans
shall be subject to approval by Landlord, which approval shall not be
unreasonably withheld, conditioned or delayed and
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<PAGE> 18
which approval may be reasonably withheld in the event of material aesthetic or
other conflicts with the design and function of the balance of the Building.
Landlord's approval is solely given for the benefit of Landlord under this
Article 4.3 and neither Tenant nor any third party shall have the right to rely
upon Landlord's approval of Tenant's plans for any other purpose whatsoever.
Without limiting the foregoing, Tenant shall be responsible for all elements of
the design of Tenant's plans (including, without limitation, compliance with
law, functionality of design, the structural integrity of the design, the
configuration of the Premises and the placement of Tenant's furniture,
appliances and equipment), and Landlord's approval of Tenant's plans shall in no
event relieve Tenant of the responsibility for such design.
(b) Tenant shall be permitted to include equipment for a so-called
"fitness center" in the Tenant Improvement Work, provided that (i) the proposed
equipment for and location of such fitness center shall be shown on Tenant's
plans, (ii) such fitness center may, subject to the provisions of this clause
(h), be installed on any floor of the Premises, (iii) in no event shall a
swimming pool, hot tub, whirlpool or other similar water based equipment, other
than sinks, toilets and showers, be installed, (iv) Tenant shall insure that no
noise or vibration from the fitness center disturbs other tenants of the
Building, and (v) all of the equipment in such fitness center shall be
maintained in good operating condition at all times. Notwithstanding anything to
the contrary herein or in the Lease contained, Tenant shall be responsible for
any and all construction measures as Landlord determines in its sole judgment to
prevent noise, vibration, water damage, odors or any other adverse affect to
other portions of the Building in connection with the location of the fitness
center ("Fitness Center Issues"). If, at any time during the term, Landlord
receives a written complaint from a tenant or other occupant of the Building
("Complaining Tenant") of any Fitness Center Issues ("Complaining Tenant
Complaint"), then Landlord shall give written notice to Tenant advising Tenant
of such Complaining Tenant Complaint. If Tenant fails to cure the condition that
is the subject of such Complaining Tenant Complaint to the satisfaction of the
Complaining Tenant within thirty (30) days of such notice, Landlord shall have
the right to require Tenant, at Tenant's sole cost and expense, to relocate the
fitness center to a floor of the Building ("Relocation Floor") where Tenant
occupies the entirety of both the floor above and the floor below the Relocation
Floor. Landlord may exercise such right by giving Tenant written notice, and, in
such event, Tenant shall, within ninety (90) days of its receipt of such notice,
relocate the fitness center to a Relocation Floor.
4.4 Preparation of Premises.
(a) By Landlord. (i) Except as is otherwise herein provided or as may be
otherwise approved by the Landlord, all Landlord's Work, including Base Building
Work, as defined in Exhibit 4, and the Tenant Improvement Work, as hereinafter
defined, shall be performed by contractors employed by Landlord.
(ii) Landlord shall engage Beacon-Skanska Construction Company
("Beacon-Skanska") as the general contractor to perform the Landlord's
Work.
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<PAGE> 19
Landlord's Work consists of the Base Building Work, and the tenant
improvement work to be designed by Tenant and shown on Tenant's plans for
Tenant's use and occupancy of the Premises (which tenant improvement work
is herein referred to as the "Tenant Improvement Work"). Landlord's
contract with Beacon-Skanska for the Tenant Improvement Work shall provide
for a guaranteed maximum price ("GMP"), which GMP shall be subject to
Tenant's prior approval, which approval shall not be unreasonably withheld
or delayed, to be developed from the T.I. Control Budget, attached hereto
as Exhibit 4B and, subject to adjustment by reason of changes requested by
Tenant or by reason of Tenant Delays, include a fee of 2.85% of the total
construction costs for the Tenant Improvement Work including, without
limitation, the general conditions, and general conditions of $240,000.00
(based on the most recent T.I. Control Budget dated March 17, 1999),
subject to adjustment for Tenant Delays, change orders and by any other
adjustments permitted in the GMP under Landlord's contract with
Beacon-Skanska.
(iii) The parties hereby acknowledge that, as of the Execution Date of
this Lease, Landlord and Tenant have agreed upon an estimated budget for
the performance of the Tenant Improvement Work based upon the T.I. Control
Budget. The parties further acknowledge that the T.I. Control Budget is
only an estimate for the Tenant Improvement Work. At the time that the
actual cost of the Tenant Improvement Work is obtained and the GMP is
determined, any changes from the T.I. Control Budget shall be reflected in
the schedule of values supporting the GMP.
(iv) Landlord shall cause Beacon-Skanska to obtain at least three (3)
subcontractor bids for each trade in connection with the Tenant Improvement
Work. Tenant shall have the right to propose subcontractors for each trade
for the Tenant Improvement Work, which subcontractors shall be subject to
Landlord's prior consent, which consent shall not be unreasonably withheld,
conditioned or delayed. Landlord and Tenant shall prequalify each
subcontractor for each trade on the bid list. After Landlord's receipt of
bids for the Tenant Improvement Work, Tenant shall have the right, in
accordance with the Plans and Response Schedule set forth on Exhibit 4A, to
select the subcontractor in each trade from the prequalified list for the
Tenant Improvement Work.
(v) (A) Landlord shall cooperate with Tenant and Tenant's
Representatives (which shall include Tenant's architect, Mr. Niles of
Trammell Crow Company and such different or additional Tenant's
Representatives as Tenant may from time to time identify by written notice
to Landlord) in such manner as Tenant may reasonably request by: (i)
providing to Tenant and Tenant's Representatives, in good faith, "open
book" full access to all aspects of the design of, contracting for, and
pricing and construction of the Tenant Improvement Work, (ii) providing
Tenant and Tenant's Representatives complete access to the job site
(subject to the general contractor's reasonable security
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<PAGE> 20
requirements) both prior to and during construction, (iii) providing the
Tenant and Tenant's Representatives the right to attend all job meetings,
(iv) notifying Tenant and Tenant's Representatives of all meetings
including standing job meetings whether held on or off site, related to
scope determination, purchasing or procurement, scheduling, and to design
modifications, change orders, cost reporting and pricing, (v) permitting
Tenant and Tenant's Representatives the right to approve, which approval
shall not be unreasonably withheld, changes to the GMP (based upon Tenant
requested changes), changes in or substitutions to equipment or materials
proposed by subcontractors or suppliers and changes to the scope of the
Tenant Improvement Work (Tenant hereby agreeing that if Tenant fails to
approve any such changes or substitutions within the time periods specified
on Exhibit 4A, such failure shall constitute a Tenant Delay), and any such
changes or substitutions requested by Tenant or Tenant's Representatives
hereunder shall be subject to the approval of Landlord and Beacon-Skanska,
which approval shall not be unreasonably withheld.
B. Tenant shall also have the right, within two (2) business days of
receipt thereof, to review and approve or reject all requisitions for
payment for the Tenant Improvement Work submitted by Beacon-Skanska, which
approval shall not be unreasonably withheld based on the progress, quality
of construction and compliance with Tenant's plans. If Tenant fails to
respond to any requisition within such two (2) business day period, Tenant
shall be deemed to have approved such requisition.
C. Landlord hereby represents to Tenant that Andrew Moore shall be the
Project Executive for Beacon-Skanska in connection with the Tenant
Improvement Work. The Project Manager and the Project Superintendent shall
be designated by Beacon-Skanska and approved by Tenant, which approval
shall not be unreasonably withheld, conditioned or delayed. Such
individuals may not be replaced without obtaining Tenant's prior approval
thereto, which approval shall not be unreasonably withheld. If Tenant fails
to respond to Landlord's request for approval within two (2) business days
of such request, Tenant shall be deemed to have approved such replacements.
D. Tenant acknowledges and agrees that Tenant's Representatives shall
have full power and authority to act on behalf of Tenant and any action
taken by Tenant's Representatives shall be fully binding upon Tenant.
(b) By Tenant. Subject always to the provisions of Articles 4.2 and 4.3,
if Tenant will be employing any contractors in preparing the Premises for
Tenant's occupancy, Landlord will give Tenant reasonable advance notice of the
date on which the Premises will be ready for such other contractors and a
reasonable time will be allowed from such date for doing the work to be
performed by such other contractors.
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(c) If any work, including but not by way of limitation, installation of
built-in equipment by the manufacturer or distributor thereof, shall be
performed by contractors not employed by Landlord, Tenant shall take necessary
reasonable measures to the end that such contractors shall cooperate in all ways
with Landlord's contractors to avoid any delay to the work being performed by
Landlord's contractors or conflict in any other way with the performance of such
work.
4.5 Quality and Cost of Materials. (i) Any construction or finish of the
Premises, whether by Landlord or Tenant, shall equal or exceed the
specifications and quantities provided in Exhibit 6.
(ii) Landlord's Work consists of the Base Building Work and the Tenant
Improvement Work. The Base Building Work shall be performed by Landlord at
Landlord's expense. In addition, Landlord shall contribute up to Thirty-One and
50/100 ($31.50) Dollars per square foot of Total Rentable Area of Floors 2-6 and
Floor 7, respectively ("Landlord's Contribution") towards the cost of the Tenant
Improvement Work on such floors. In addition, at Tenant's election given to
Landlord in writing on or before May 7, 1999, Landlord shall contribute up to an
additional Eight and 50/100 ($8.50) Dollars per square foot of Total Rentable
Area of Floors 2-6 and Floor 7, respectively ("Landlord's Additional
Contribution") towards the cost of the Tenant Improvement Work on such floors,
to be reimbursed in accordance with Article 6 of this Lease. Tenant's obligation
to repay such Landlord's Additional Contribution shall be secured by the
security deposit referenced in the Rider to this Lease, and Landlord's
obligation to make Landlord's Additional Contribution shall be conditioned on
Tenant having provided such security deposit. Tenant shall, within thirty (30)
days of billing therefor, reimburse Landlord for all costs of the Tenant
Improvement Work in excess of Landlord's Contribution and, if applicable,
Landlord's Additional Contribution, up to the GMP, as the same may be adjusted
by change orders and by any other adjustments permitted in the GMP under
Landlord's contract with Beacon-Skanska, provided however, that there shall be
no adjustments in the GMP to the extent that Beacon-Skanska is entitled to
compensation in excess of the GMP by reason of the negligence or fault of
Landlord. Tenant shall have the right, upon Landlord's receipt of paid invoices
evidencing such costs, to apply any unused portion of Landlord's Contribution
and, if applicable, Landlord's Additional Contribution, towards (i) the costs
incurred by Tenant in installing Tenant's telecommunications systems and
computer wiring, (ii) the costs incurred by Tenant in preparing Tenant's plans,
and (iii) reasonable professional fees incurred by Tenant in connection with
this Lease and the design and performance of Landlord's Work. Except as set
forth in the immediately preceding sentence, Tenant shall have no right to use
any unused portion of Landlord's Contribution or, if applicable, Landlord's
Additional Contribution.
(iii) Except for the Landlord's Contribution and, if applicable, Landlord's
Additional Contribution, and the cost of the Base Building Work, Tenant shall
bear all other costs of preparing the Premises for its occupancy in accordance
with the Tenant's
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plans including, without limitation, the cost of substitutes for any items
specified in Exhibit 6.
4.6 Tenant's Delay - Additional Costs. In the event of a Tenant Delay, any
additional cost to Landlord in connection with the completion of the Base
Building Work shall be promptly paid by Tenant to Landlord to the extent arising
directly from such Tenant Delay. For the purposes of the next preceding
sentence, the expression "additional cost to Landlord" shall mean the sum of the
following: (i) the cost of additional General Conditions which are incurred to
perform the Base Building Work as a result of a Tenant Delay, but not to exceed
$3,428.57 per business day of Tenant Delay plus (ii) the cost of additional
General Conditions which are incurred to perform the Tenant Improvement Work as
a result of a Tenant Delay, but not to exceed $2,000 per business day of Tenant
Delay, plus (iii) any other costs (i.e., other than General Conditions) over and
above such cost as would have been the aggregate cost to Landlord of completing
the Base Building Work had there been no such Tenant Delay. For the purposes of
this Article 4.6, "General Conditions" shall be defined as set forth on Exhibit
20. Except for the failure of Tenant to pay the Tenant Delay Payment, or such
additional cost to Landlord pursuant to this Article 4.6 (subject to arbitration
thereof), no Tenant Delay shall be a default of Tenant under this Lease provided
however, that if the aggregate of such Tenant Delays exceed six (6) months, such
event shall be deemed a default permitting Landlord to terminate the Lease
pursuant to Article 21.
4.7 Entry by Tenant Prior to Rent Commencement Date. Except as provided in
Articles 3.1(b), 4.4(b) and (c) and this Article 4.7, Tenant shall have no right
to enter any Portion of the Premises prior to Landlord's Work therein being
Substantially Completed. With Landlord's prior written consent, which shall not
be unreasonably withheld, conditioned or delayed, Tenant shall have the right to
enter the Premises prior to the Rent Commencement Date, during normal business
hours and without payment of rent, to perform such work or decoration as is to
be performed by, or under the direction or control of, Tenant and as is
otherwise in compliance with the terms of this Lease. Such right of entry shall
be deemed a license from Landlord to Tenant, and any entry thereunder shall be
at the risk of Tenant.
4.8 Conclusiveness of Landlord's Performance. With respect to patent
defects, other than Punch List Items, Tenant shall be conclusively deemed to
have agreed that Landlord has performed all of its obligations under this
Article 4 with respect to each Portion of the Premises unless not later than the
end of the second calendar month next beginning after the Rent Commencement Date
in respect of such Portion of the Premises Tenant shall give Landlord written
notice specifying the respects in which Landlord has not performed any such
obligation. Notwithstanding the foregoing, Landlord covenants to Tenant that,
during the period expiring as of the Warranty Expiration Date, as hereinafter
defined, all Landlord's Work will be free from, and that it shall, at Landlord's
expense promptly upon written notice thereof, correct any defects in workmanship
and materials. Tenant shall be conclusively deemed to have agreed that Landlord
has performed all of its obligations under this Article 4 (and Tenant shall be
deemed to have
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waived any claim which it has under the foregoing warranty) unless, not later
than the date ("Warranty Expiration Date") eleven (11) months from the day
("Warranty Commencement Date") Landlord's Work is Substantially Completed,
Tenant shall have given written notice to Landlord specifying the respects in
which Landlord has not performed any such obligation. Notwithstanding the
foregoing, with respect to Punch List Items which is not complete on the
Warranty Commencement Date, the Warranty Expiration Date shall be the date
eleven (11) months from the day such work is, in fact, completed. If latent
defects in any portion of the Tenant Improvement Work are discovered by Tenant
after the Warranty Expiration Date with respect to such portion of the Tenant
Improvement Work, Landlord shall assign to Tenant Landlord's rights against
Beacon-Skanska under Landlord's contract to the extent necessary to enable
Tenant to remedy such latent defect.
4.9 Tenant Payments of Construction Cost. Landlord shall have the same
rights and remedies which Landlord has upon the nonpayment of Rent for
nonpayment of any amounts, subject to arbitration thereof, which Tenant is
required to pay to Landlord or Landlord's contractor in connection with the
Tenant Improvement Work (including, without limitation, any amounts which Tenant
is required to pay in accordance with Articles 4.4, 4.5 and 4.6 hereof) or in
connection with any construction in the Premises performed for Tenant by
Landlord, Landlord's contractor or any other person, firm or entity after the
Rent Commencement Date.
5. USE OF PREMISES
5.1 Permitted Use. Tenant shall not during the term hereof occupy and use
the Premises for any purposes other than as stated in Exhibit 1. Utility areas
(whether or not a part of the Premises) shall be used only for their intended
purpose. Subject to the other terms and provisions of this Lease, Tenant shall
be permitted to install and operate the fitness center equipment and the kitchen
equipment shown on Tenant's final approved plans (which approval shall not be
unreasonably withheld), provided that, and so long as, the same is maintained in
good operating condition. The kitchen equipment and fitness center in the
Premises may be used only for the purposes of serving Tenant's employees and
individuals who are on the Premises for the purpose of conducting business with
Tenant, permitted assignees and subtenants of Tenant and the family members of
employees thereof ("Permitted Users"). Tenant agrees to institute such
reasonable measures as may be required from time to time by Landlord, including,
without limitation, a card control system or other system reasonably acceptable
to Landlord to monitor the use of such facilities so as to limit, to the maximum
extent possible, such use to the Permitted Users.
5.2 Prohibited Uses. Notwithstanding any other provision of this Lease,
Tenant shall not use, or suffer or permit the use or occupancy of, or suffer or
permit anything to be done in or anything (including, without limitation, any
materials used by Tenant to perform the Tenant's Work) to be brought into or
kept in or about the Premises, the Building, the Complex or any part thereof
(the parties hereby agreeing that Tenant
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shall not be considered to have suffered or permitted an action or omission
occurring outside of the Premises unless such action or omission was taken by
Tenant or those for whom Tenant is legally responsible): (i) which would violate
any of the covenants, agreements, terms, provisions and conditions of this
Lease, (ii) for any unlawful purposes or in any unlawful manner; (iii) which, in
the reasonable judgment of Landlord shall in any way (a) materially adversely
impair the exterior appearance of the Building or the Complex; or (b) materially
adversely impair, interfere with or otherwise diminish the quality of any of the
Building services or the heating, cleaning, air conditioning or other servicing
of the Building or Premises, or with the use or occupancy of any of the other
areas of the Building or the Complex, or occasion material adverse interruption
to the quiet enjoyment of, or injury or damage to any occupants of the Premises
or other tenants or occupants of the Building or the Complex; or (iv) which is
materially inconsistent with the maintenance of the Building and/or the Complex
as facilities comparable to first-class office/research and development
buildings in the Market Area, as hereinafter defined, in the quality of their
maintenance, use, or occupancy. For the purposes of the Lease, the "Market Area"
shall be defined as East Cambridge, Massachusetts. Any disputes between Landlord
and Tenant arising under this Article 5.2 shall be submitted to arbitration in
accordance with Article 29.5.
5.3 Licenses and Permits. If any governmental license or permit shall be
required for the proper and lawful conduct of Tenant's business (as opposed to
general office use, the licenses and permits for which shall be the
responsibility of Landlord), and if the failure to secure such license or permit
would in any way adversely affect Landlord, the Premises, the Building, the
Complex or Tenant's ability to perform any of its obligations under this Lease,
Tenant, at Tenant's expense, shall duly procure and thereafter maintain such
license and submit the same to inspection by Landlord. Tenant, at Tenant's
expense, shall at all times comply with the terms and conditions of each such
license or permit.
6. RENT
(a) In General. Except as otherwise expressly herein provided, during
the term of this Lease the Yearly Rent, at the rate stated in Exhibit 1, Tax
Excess, and Operating Expense Excess together with Parking Rent (collectively,
"Rent") shall be payable by Tenant to Landlord by monthly payments, as stated in
Exhibit 1, in advance and without demand on the first day of each month for and
in respect of such month. Tenant's obligation to pay the Rent in respect of each
Portion of the Premises shall commence to accrue as of the Rent Commencement
Date for each respective Portion of the Premises. If, by reason of any
provisions of this Lease, the Rent shall commence or terminate on any day other
than the first day of a calendar month, the Rent for such calendar month shall
be prorated. The Rent shall be payable to Landlord or, if Landlord shall so
direct in writing, to Landlord's agent or nominee, in lawful money of the United
States which shall be legal tender for payment of all debts and dues, public and
private, at the time of payment, at the office of the Landlord or such place as
Landlord may designate, and the Rent and other charges in all circumstances
shall be payable without
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any setoff or deduction whatsoever, except as otherwise expressly provided
herein and only to that extent. Rent and any other sums due hereunder not paid
within ten (10) days after the date due shall bear interest for each month or
fraction thereof from the due date until paid computed at the annual rate of two
percentage points over the so-called prime rate then currently from time to time
published in the WALL STREET JOURNAL, (or if the WALL STREET JOURNAL ceases to
publish a prime rate, then the prime rate charged to its most favored corporate
customers by the largest national bank (N.A.) located in the City of Boston), or
at any applicable lesser maximum legally permissible rate for debts of this
nature ("Lease Rate"), provided however, that with respect to other than the
monthly installments of Rent, as defined in the first sentence of this Article
6(a), such interest shall cease with respect to the period between the date
thirty (30) days after the due date with respect to such payment and the date
that Landlord gives Tenant written notice that such interest will be accruing
until such payment is made.
(b) Construction Rent. Commencing as of the Rent Commencement Date in
respect of Portion 2-6 (if the Rent Commencement Date in respect of Portion 2-6
is the first day of a calendar month, or otherwise on the first day of the
calendar month next following such Rent Commencement Date), and continuing on
the first day of each month thereafter throughout the term of the Lease, Tenant
shall pay to Landlord, as additional rent, Construction Rent, as hereinafter
defined, based upon the Landlord's Additional Contribution. Tenant's monthly
payments of Construction Rent shall be equal to the amount of equal monthly
payments of principal and interest which would be necessary to repay a loan in
the amount of Landlord's Additional Contribution, together with interest at the
rate of ten percent (10%) per annum, on a level direct reduction, level payments
of principle and interest, basis over a term equal to the initial term of the
Lease. Monthly payments of Construction Rent shall be payable at the same time
and in the same manner as Yearly Rent is payable under the Lease. Tenant shall
have the right at any time to prepay, without penalty or fees, Construction Rent
by paying to Landlord the entire unamortized balance of Landlord's Additional
Contribution. Upon such prepayment, Tenant shall have no further obligation to
pay Construction Rent. Except as expressly set forth in this Paragraph (b),
Construction Rent shall not be abated or reduced for any reason whatsoever
(including, without limitation, untenantability of the Premises or termination
of the Lease). Without limiting the foregoing, the rent abatement provisions of
Articles 8.8, 15.6, 18 and 20 of the Lease shall not apply to Construction Rent.
Since the payment of Construction Rent represents a reimbursement to Landlord of
costs which Landlord will incur in connection with the construction of the
Premises, if there is any default of any of Tenant's obligations under the Lease
(including, without limitation, its obligation to pay Construction Rent) or if
the term of this Lease is terminated for any reason whatsoever prior to the
termination of the term of the Lease, Tenant shall pay to Landlord, immediately
upon demand, the unamortized principal balance of Landlord's Additional
Contribution. Tenant's obligation to pay the unamortized principal balance of
Landlord's Additional Contribution shall be in addition to all other rights and
remedies which Landlord has based upon any default of Tenant under the Lease,
and Tenant shall not be entitled to any credit or reduction in such payment
based upon amounts collected by Landlord from reletting the premises after the
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default of Tenant. Notwithstanding anything to the contrary herein contained,
Tenant shall be relieved of its obligation to pay Construction Rent in the
following circumstances: (i) from and after the termination of the term of this
Lease, if the Lease is terminated due to a default of Landlord under the Lease;
or (ii) from and after the termination of the term of this Lease, if the Lease
is terminated on account of a fire or other casualty. In addition, if Landlord
receives rental interruption insurance proceeds covering the Construction Rent
payable by Tenant hereunder, in the event of a fire or other casualty where the
Lease is not terminated, Tenant shall be entitled to a credit against its
obligation to pay Construction Rent to the extent such Construction Rent is
covered by such insurance proceeds.
(c) Rentable Area. Landlord and Tenant acknowledge the Total Rentable
Area of the Premises and the Building have been determined pursuant to the
Measurement Standards set forth in Exhibit 11, and the parties hereby agree that
the figures set forth in Exhibit 1 with respect to the Building and the Premises
shall be conclusive and binding on Landlord and Tenant. Landlord represents and
warrants to Tenant that the Total Rentable Area of the other buildings in the
Complex have been determined pursuant to the Measurement Standards set forth in
Exhibit 11 and Landlord and Tenant acknowledge that the figure set forth in
Exhibit 1 for the Total Rentable Area of the Complex does not include the floor
area of the building known as 549 Technology Square, as that building is
currently vacant. The Total Rentable Area of the Complex shall not include the
floor area of Building 549 unless and until: (i) all or any portion of Building
549 is actually occupied (other than for construction) continuously for at least
six (6) months, in which case the Total Rentable Area of the Complex shall
include the floor area of Building 549 as of the date such occupancy commenced
and thereafter throughout the time of such occupancy, or (ii) if Landlord
executes a lease with respect to all or any portion of Building 549 with a term
of two (2) years or more, in which case the Total Rentable Area of the Complex
shall thereafter include the floor area of Building 549 as of the commencement
of occupancy of Building 549 by such tenant; provided however, that upon the
demolition of Building 549, the Total Rentable Area of Building 549 shall
thereafter be excluded from the Total Rentable Area of the Complex. In the event
that Landlord alters any of the buildings in, or adds other buildings to, the
Complex, the Total Rentable Area of any such buildings shall be calculated in
accordance with the Measurement Standards attached hereto as Exhibit 11, and
shall be included in the Total Rentable Area of the Complex when first occupied.
Landlord shall, in connection with renovation or alteration of any of the
buildings in the Complex that changes the Total Rentable Area of such building,
and in connection with construction of any new rentable area in the Complex,
represent to Tenant in writing ("Expansion Notice") as to the size of such
rentable area. The Expansion Notice shall be conclusive and binding on Tenant
unless, within thirty (30) days after Tenant's receipt of such Expansion Notice,
Tenant gives Landlord written notice ("Area Objection Notice") objecting
thereto. Any Area Objection Notice shall set forth with specificity Tenant's
objections to the Expansion Notice. Landlord shall make available to Tenant, for
Tenant's review, at Landlord's architect's office during business hours and upon
reasonable notice, the plans and calculations on which the Expansion Notice is
based.
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Any dispute as to a change in the Total Rentable Area of the Complex shall be
submitted to arbitration in accordance with Article 29.5. Notwithstanding
anything to the contrary herein or in the Lease contained, Tenant's sole right
and remedy against Landlord based upon any inaccuracy of the representations by
Landlord under this Article 6(c) shall be limited to claims that Tenant overpaid
Tax Excess and/or Operating Expense Excess based on inaccurate square footage
(i.e., affecting the calculation of Tenant's Complex Operating Cost Percentage).
If Tenant fails to assert such claim in writing in respect of any Operating Year
to Landlord on or before the date three (3) years after the end of the Operating
Year in question, then Tenant shall be conclusively deemed to have waived its
right to assert its claim against Landlord in all circumstances.
7. HAZARDOUS MATERIALS
Landlord and Tenant agree as follows with respect to the existence or use
of "Hazardous Material" in or on the Premises.
(a) Tenant, at its sole cost and expense, shall comply with all laws,
statutes, ordinances, orders, rules and regulations of any local, state or
federal governmental authority having jurisdiction concerning environmental,
health and safety matters (collectively, "Environmental Laws") applicable to the
activities of Tenant and those for whom Tenant is legally responsible,
including, but not limited to, any disposal of or discharge into the air,
surface, water, sewers, soil or groundwater of any Hazardous Material (as
defined in Article 7(c)), whether within or outside the Premises, within the
Complex. Tenant shall have the right, in good faith, to contest the
applicability or requirements as applicable to Tenant of any such Environmental
Laws, provided that Tenant furnishes security which, in Landlord's reasonable
judgment, is sufficient to cover any risk of delayed compliance to the
operation, safety or value of the Complex. Notwithstanding the foregoing,
nothing contained in this Lease requires, or shall be construed to require,
Tenant to incur any liability related to or arising from environmental
conditions for which the Landlord is responsible pursuant to the terms of this
Lease, which existed prior to Tenant's occupancy of the Premises, which result
from the acts or negligence of Landlord, its agents, contractors or employees,
or which result from the acts of other tenants.
(b) Tenant shall not cause or knowingly permit any Hazardous Material
to be brought upon, kept or used in or about the Premises or otherwise in the
Complex by Tenant, or those for whom Tenant is legally responsible, without the
prior written consent of Landlord, which consent shall not be unreasonably
withheld, conditioned or delayed, except for Hazardous Materials which are
typically used in the operation of offices provided that the same shall at all
times be brought upon, kept or used in accordance with all applicable
Environmental Laws. Notwithstanding the foregoing, with respect to any of
Tenant's Hazardous Material which Tenant does not properly handle, store or
dispose of in compliance with all applicable Environmental Laws, Tenant shall,
upon written notice from Landlord, no longer have the right to bring such
material into the buildings or the Complex until Tenant has demonstrated, to
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Landlord's reasonable satisfaction, that Tenant has implemented programs to
thereafter properly handle, store or dispose of such material.
(c) As used herein, the term "Hazardous Material" means any
hazardous, radioactive or toxic substance, material or waste (including medical
waste or so-called "biohazard" materials) or petroleum derivative which is or
becomes regulated by any Environmental Law. The term "Hazardous Material"
includes, without limitation, any material or substance which is (i) designated
as a "hazardous substance" pursuant to Section 1311 of the Federal Water
Pollution Control Act (33 U.S.C. Section 1317), (ii) 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), (iii)
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. (42 U.S.C. Section 9601) or (iv) defined as "hazardous substance" or
"oil" under Chapter 21E of the General Laws of Massachusetts, and "Environmental
Laws" include, without limitation, the laws listed in the preceding clauses (i)
through (iv).
(d) Any increase in the premium for necessary insurance on the
Premises or the Complex which arises from Tenant's use and/or storage of these
Hazardous Materials shall be solely at Tenant's expense. Tenant shall procure
and maintain at its sole expense such additional insurance as may be necessary
to comply with any requirement of any Federal, State or local government agency
with jurisdiction for such use and/or storage.
(e) Tenant hereby covenants and agrees to indemnify, defend and hold
Landlord harmless from any and all claims, judgments, damages, penalties, fines,
costs, liabilities or losses (collectively "Losses") which Landlord may suffer
arising out of contamination of real estate, the Complex or other property not a
part of the Premises, which contamination arises as a result of: (i) the
presence of Hazardous Material in the Premises, the presence of which is caused
or knowingly permitted by Tenant or those for whom Tenant is legally
responsible, or (ii) from a breach by Tenant of its obligations under the first
two sentences of Article 7(b). This indemnification of Landlord by Tenant
includes, without limitation, reasonable costs incurred in connection with any
investigation of site conditions to the extent required by any Environmental
Laws or any cleanup, remedial, removal or restoration work to the extent
required by any federal, state or local governmental agency or political
subdivision because of Hazardous Material present in the soil or ground water on
or under the Premises based upon the circumstances identified in the first
sentence of this Article 7(e). The indemnification and hold harmless obligations
of Tenant under this Article 7(e) shall survive any termination of this Lease as
to claims based upon events which occurred prior to the later of (i) such
termination or (ii) the date Tenant or anyone for whom Tenant is legally
responsible vacates the Premises. Without limiting the foregoing, to the extent
the presence of any Hazardous Material in the buildings or otherwise in the
Complex is caused or knowingly permitted by Tenant results in any contamination
of the Premises, Tenant shall, subject to Tenant's right to contest the same as
set forth in Article 7(a), promptly take all actions at
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its sole expense as are necessary to return the Premises to a condition which
complies with all Environmental Laws; provided that Landlord's approval of such
actions shall first be obtained, which approval shall not be unreasonably
withheld so long as such actions, in Landlord's reasonable discretion, would not
potentially have any materially adverse long-term or short-term effect on the
Premises, and, in any event, Landlord shall not withhold its approval of any
proposed actions which are required by applicable Environmental Laws.
(f) To the best of Landlord's knowledge, except as set forth in the
Phase I Environmental Site Assessment Report referenced in Exhibit 7 attached
hereto, no Hazardous Materials exist in the Premises, the Building, or the
Complex. Landlord agrees that neither Landlord, nor its agents, employees or
contractors, shall cause or permit any Hazardous Materials (other than materials
which are typically used in the operation of offices) to be brought upon, kept,
or used in or about the Complex, but Landlord shall not be liable for any such
Hazardous Materials brought upon, kept or used in or about the Complex by
others.
(g) Landlord hereby covenants and agrees to indemnify, defend and
hold Tenant harmless from any Losses which Tenant may suffer from any breach by
Landlord of its representations or agreements under Article 7(f) above provided
that Landlord shall have no liability to Tenant in the event of a breach by
another tenant of the Complex of its obligations with respect to Hazardous
Materials other than to use reasonable efforts to cause such tenant, without
cost to Tenant, to remove such Hazardous Materials from the Complex if, at the
time, and in the manner, required by Environmental Laws. The indemnification and
hold harmless provisions of this Article 7(g) shall survive any termination of
this Lease.
8. SERVICES FURNISHED BY LANDLORD
8.1 Electric Current.
(a) The parties acknowledge and agree that the consumption of
electricity for outlet plug use, lights and supplemental HVAC in the Premises
will be measured by a separate meter, which shall be installed by Landlord as
part of the Tenant Improvement Work, and maintained by Tenant, provided that
electricity for the operation of the non-metered (i.e., Base Building) HVAC
system serving the Premises and the Building and parking lot lighting in the
Complex shall not be connected to such meter. Tenant shall contract and pay for
the entire cost of the metered electric current directly with the responsible
utility.
(b) Landlord shall permit its risers, conduits and feeders to the
extent available, suitable and safely capable, to be used for the purpose of
enabling Tenant to purchase and obtain electric current directly from such
company. Nothing contained in this clause (b) shall be deemed to relieve
Landlord of its obligations under Article 8.7 to maintain the electrical system
serving the Building.
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(c) If Tenant shall require electric current for use in the Premises
in excess of the capacity set forth in Exhibit 4 and if (i) in Landlord's
reasonable judgment, Landlord's facilities are inadequate for such excess
requirements or (ii) such excess use shall result in a material additional
burden on the Building air conditioning system and additional cost to Landlord
on account thereof, then Landlord, at the sole cost and expense of Tenant, shall
have the right to furnish and install such additional wire, conduits, feeders,
switchboards and appurtenances as reasonably may be required to supply such
additional requirements of Tenant if current therefor is or can be available to
Landlord, provided that the same shall be permitted by applicable laws and
insurance regulations and shall not cause damage to the Building or the Premises
or cause or create a dangerous or hazardous condition or entail excessive or
unreasonable alterations or repairs or materially interfere with the quiet
enjoyment of the other tenants or occupants of the Building.
(d) Landlord, at Tenant's expense and upon Tenant's request, shall
purchase and install all replacement lamps of types generally commercially
available (including, but not limited to, incandescent and fluorescent) used in
the Premises.
(e) Subject to Tenant's rights under Paragraphs (b), (c) and (d) of
Article 8.8, Landlord shall not in any way be liable or responsible to Tenant
for any loss, damage or expense which Tenant may sustain or incur if the
quantity, character, or supply of electrical energy is changed or is no longer
available or suitable for Tenant's requirements. Notwithstanding the foregoing,
in the event that Landlord modifies the electrical system serving the Premises
or said electrical system is damaged by the negligent act or omission of
Landlord or Landlord's contractors, agents or employees, and if such
modification or damage materially adversely affects the electric service
provided to the Premises, then, provided that Landlord fails to cure such
condition within seven (7) days of Tenant's notice to Landlord advising Landlord
of such condition, Rent, as defined in the first sentence of Article 6(a), shall
thereafter be equitably abated until the day such condition is completely
corrected.
(f) Tenant agrees that it shall not overload the electrical capacity
of the Premises as set forth in Exhibit 4.
8.2 Water. Landlord shall furnish hot and cold water for lavatory purposes
in the common lavatories and cold water for ordinary office purposes and for
cleaning, toilet, drinking and kitchen purposes and for the cafeteria, showers
and fitness center within the Premises. Landlord shall have the right at any
time during the Term, to install a water meter to measure the consumption of
water used in the cafeteria, showers and fitness center or other non-standard
uses by Tenant, provided that Landlord also separately meters water for similar
uses by other tenants of the Building/Complex. If Landlord elects to install
such meter for said purposes, Landlord shall pay the cost of the meter and the
cost of installation thereof and shall keep said meter and installation
equipment in good working order and repair. Tenant agrees to pay for water
consumed,
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as shown on said meter, together with the sewer charge based on said meter
charges, within thirty (30) days after receipt of Landlord's bill therefor, and
on default in making such payment Landlord may pay such charges and collect the
same from Tenant.
8.3 Heat and Cleaning. Landlord at its expense shall: (i) furnish heat to
the Premises by means of the system described in Article 8.4 during the normal
heating season and as normal seasonal changes may require on Mondays through
Fridays, excepting legal holidays, from 8:00 a.m. to 6:00 p.m. and on Saturdays,
excepting legal holidays, from 8:00 a.m. to 1:00 p.m. (called "business days")
and (ii) cause the office areas of the Premises to be cleaned on business days
after 5:30 p.m. (except on Saturdays) in accordance with the cleaning standards
attached as Exhibit 5, unless such offices are kept in gross disorder by Tenant.
8.3A Tenant's Election to Perform Premises Cleaning. Landlord and Tenant
acknowledge that a portion of the Yearly Rent (i.e., $.65 per square foot of
Total Rentable Area) is allocable to the initial cost of providing cleaning
services to the Premises, as such services are described in Exhibit 5. Tenant
shall have the right, with or without cause and at any time during the term of
this Lease, to contract independently with a cleaning contractor selected by
Tenant and approved by Landlord, which approval shall not be unreasonably
withheld, conditioned or delayed for the cleaning of the Premises, provided that
the cleaning by Tenant's contractor shall be performed to at least the level of
services set forth in Exhibit 5. Tenant shall give Landlord at least thirty (30)
days prior written notice of Tenant's election. If Tenant elects to contract
independently, then, beginning with the effective date of the institution of
such services (which effective date shall be no less than thirty (30) days after
the date of Tenant's notice), the Yearly Rent shall be reduced on a per rentable
square foot basis (i.e., $.65 per square foot of Total Rentable Area), the
Building Operating Cost Base shall thereafter be reduced by $.65 per square foot
of Total Rentable Area and Building Operating Costs for all calendar years from
and after such effective date shall not include the cost of such cleaning
services assumed by Tenant.
8.4 Air Conditioning. Landlord shall furnish to and distribute in the
Premises air conditioning as normal seasonal changes may require on business
days during the hours as aforesaid in Article 8.3. Heat and air conditioning
shall be provided through a system which is designed and built in accordance
with the Base Buildings specifications set forth on Exhibit 4, and Landlord
shall maintain such system throughout the term of this Lease so as to achieve
the following: the air conditioning system referred to in this Article 8.4 shall
be capable of providing 75(degree) F dry bulb and 50% of relative humidity with
outside conditions of 91(degree) F dry bulb and 73(degree) F wet bulb. Tenant
agrees to use reasonable efforts to lower and close the blinds or drapes when
necessary because of the sun's position, whenever the air conditioning system is
in operation; provided, however, that Tenant's failure to comply with the
foregoing shall not be a default hereunder. Tenant further agrees to cooperate
fully with Landlord with regard to, and to abide by all the Rules and
Regulations (as defined in Article 17.1) which Landlord may prescribe for the
proper functioning and protection of the air conditioning system.
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8.5 Additional Heat, Cleaning and Air Conditioning Services.
(a) Landlord will use reasonable efforts upon reasonable advance
written notice from Tenant of its requirements in that regard, to furnish
additional heat, cleaning to the Premises on days and at times other than as
above provided ("the Overtime Hours"). Tenant shall have the right, through the
control system to be installed as part of the Tenant Improvement Work, to
furnish additional heat and air conditioning to the Premises during Overtime
Hours.
(b) Tenant will pay to Landlord a charge which, as of the Rent
Commencement Date in respect of Portion 2-6, shall be equal to $65.25 per hour
(the "Overtime HVAC Charge"), for any such additional heat or air conditioning
service required by Tenant for the Overtime Hours. The Overtime HVAC Charge
shall only be increased in relation to the increase in actual costs incurred by
Landlord in providing such additional heat and air conditioning service. In no
event shall the Overtime HVAC Charge be increased more often than annually.
Tenant shall also pay to Landlord a charge (which charge shall be the Landlord's
actual incremental cost for providing such additional cleaning services
resulting therefrom, but excluding profit) for any extra cleaning of the
Premises required because of the gross carelessness of Tenant and, if requested
by Tenant, for any cleaning beyond the requirements of Exhibit 5, or any
cleaning of any portions of the Premises which may be used for storage, shipping
room or other non-office purposes. If the cost to Landlord for cleaning the
Premises shall be increased due to the installation in the Premises, by Tenant
or at Tenant's request, of any materials or finish other than as set forth in
Exhibit 5, Tenant shall pay to Landlord an amount equal to such increase in
cost. Landlord shall, upon Tenant's written request made at the time that
Landlord approves Tenant's plans pursuant to Article 4.3, advise Tenant as to
whether any materials or finishes shown on Tenant's plans will cause such an
increase in cleaning.
8.6 Additional Air Conditioning Equipment. In the event Tenant requires
additional air conditioning (other than the air conditioning referred to in
Section 8.4 above and any supplemental air conditioning that is part of Tenant's
plans) for business machines, meeting rooms or other special purposes, or
because of occupancy or excess electrical loads, Tenant may install, at its sole
cost and expense, any additional air conditioning units, chillers, condensers,
compressors, ducts, piping and other equipment, but only with the Landlord's
prior written consent, which consent shall not be withheld, delayed or
conditioned if, in Landlord's reasonable judgment, the same will not cause
damage or injury to the Building or create a dangerous or hazardous condition or
interfere with the use of the Building by other tenants. Tenant shall have the
right, on a first come, first-served basis, to use any additional capacity in
the Building's heating, ventilating and air conditioning system to the extent
that such capacity is then available. Notwithstanding anything in this Lease to
the contrary, Landlord shall not be responsible for performing or paying for the
repair and maintenance of, or the replacement of, such additional air
conditioning equipment, unless, subject to Article 19, any such repair,
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maintenance or replacement is necessitated by the negligence or willful
misconduct of Landlord or those for whom Landlord is legally responsible.
8.7 Repairs. Except as otherwise provided in Articles 18 and 20, Landlord
shall keep and maintain the roof, exterior walls, exterior windows, structure
(including floor slabs and columns), elevators, public stairways, common lobbies
and corridors, lavatories, equipment (including, without limitation, sanitary,
electrical, heating, ventilation, air conditioning, or other systems) and the
common facilities of the Premises, the Building and the Complex, including,
without limitation, all parking area lighting, signage and sewer facilities, in
good operating condition and repair, and shall maintain all lawns and planted
areas in the Complex and keep in good repair and condition all surfaced
roadways, walks, and parking and loading areas which Tenant has a right to use
under this Lease, and shall keep the same clear and free of snow and ice as
necessary.
8.8 Interruption or Curtailment of Services.
(a) When necessary by reason of accident or emergency, or, subject to
the terms of Article 10, for repairs, alterations, replacements or improvements
to the Premises and/or the Complex which in the reasonable judgment of Landlord
are desirable or necessary to be made, or of difficulty or inability in securing
supplies or labor, or of strikes, or of any other cause beyond the reasonable
control of Landlord, until said cause has been removed, Landlord reserves the
right to interrupt, curtail, stop or suspend (i) the furnishing of heating,
elevator, air conditioning, and cleaning services and (ii) the operation of the
plumbing and electric systems. Landlord shall use its best efforts to secure
alternative means of providing such services including, without limitation,
electric current, or otherwise minimize or eliminate the cause of any such
interruption, curtailment, stoppage or suspension, but, subject to Paragraphs
(b) and (c) of this Article 8.8, there shall be no diminution or abatement of
Yearly Rent or other compensation due from Tenant to Landlord hereunder, nor
shall this Lease be affected or any of the Tenant's obligations hereunder
reduced, and the Landlord shall have no responsibility or liability for any such
interruption, curtailment, stoppage, or suspension of services or systems.
Landlord shall, except in an emergency or accident, give Tenant advance notice
of any interruption in Building services.
(b) Notwithstanding anything to the contrary in this Lease contained,
if the Premises shall lack any service which Landlord is required to provide
hereunder or electric current (thereby rendering the Premises or a portion
thereof untenantable) so that, for the Landlord Service Interruption Cure
Period, as hereinafter defined, the continued operation in the ordinary course
of Tenant's business is materially adversely affected and if Tenant ceases to
use the affected portion of the Premises during the period of untenantability as
the direct result of such lack of service, then, provided that Tenant ceases to
use the affected portion of the Premises during the entirety of the Landlord
Service Interruption Cure Period and that such untenantability and Landlord's
inability to cure such condition is not caused by the fault or neglect of Tenant
or Tenant's agents, employees or contractors, Rent shall thereafter be abated in
proportion to such
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untenantability and its impact on Tenant's use of the Premises and the Parking
Areas until the day such condition is completely corrected.
For the purposes hereof, the "Landlord Service Interruption Cure
Period" shall be defined as five (5) consecutive business days after Landlord's
receipt of written notice from Tenant of the condition causing untenantability
in the Premises, provided however, that the Landlord Service Interruption Cure
Period shall be ten (10) consecutive business days after Landlord's receipt of
written notice from Tenant of such condition causing untenantability in the
Premises if either the condition was caused by causes beyond Landlord's control
or Landlord is unable to cure such condition as the result of causes beyond
Landlord's control.
(c) Notwithstanding anything to the contrary in this Lease contained,
in the event that the Premises lack any service which Landlord is required to
provide hereunder or electric current, thereby rendering the Premises or any
material portion thereof untenantable, the untenantability of which
substantially adversely affects the continued operation in the ordinary course
of Tenant's business, and (i) if such untenantability continues for one hundred
eighty (180) consecutive days after Landlord's receipt of written notice of such
condition from Tenant, and (ii) such untenantability is not caused by the fault
or neglect of Tenant, or Tenant's agents, employees, or contractors, then,
provided that Tenant ceases to use the affected portion of the Premises during
the entire period of such untenantability, Tenant shall have the right to
terminate this Lease as to either the entire Premises or the affected portion of
the Premises. Tenant may exercise such termination right by giving Landlord a
written notice after such one hundred eighty (180) day period. If Landlord fails
to cure such condition within ten (10) days after its receipt of such notice,
then this Lease as to either the entire Premises or the affected portion of the
Premises, if Tenant so elects in such termination notice, shall terminate at the
expiration of said ten (10) day period.
(d) If pursuant to this Article 8.8, Tenant terminates this Lease as
to only a portion of the Premises, Rent shall be equitably adjusted to account
for the decrease in space.
(e) The provisions of Paragraphs (b), (c) and (d) of this Article 8.8
shall not apply in the event of untenantability caused by fire or other
casualty, or taking (see Articles 18 and 20).
8.9 Energy Conservation. Notwithstanding anything to the contrary in this
Article 8 or in this Lease contained, Landlord may institute, and Tenant shall
comply with, such reasonable policies, programs and measures as may be
reasonably necessary, required, or expedient for the conservation and/or
preservation of energy or energy services to the Premises, provided however,
that Landlord does not, by reason of such policies, programs and measures,
reduce the level of energy or energy services being provided to the Premises
below the level of energy or energy services then being provided in comparably
aged, first-class office buildings in the Market Area (Landlord hereby
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agreeing that, for the purposes of this Article 8.9, the Building will, as of
the Rent Commencement Date in respect of Portion 2-6, be treated as a new
building), or as may be necessary or required to comply with applicable codes,
rules regulations or standards.
8.10 Miscellaneous. Other than air conditioning, all services provided by
Landlord to Tenant are based upon an assumed maximum Premises population of one
person per one hundred fifty (150) square feet of Total Rentable Area, which
limit Tenant shall in no event exceed, provided however, that such limit shall
only apply to permanent office residents (i.e., such limits shall not be
applicable with respect to individuals within the Premises for the purpose of
meetings, etc.).
8.11 Security and Access. Without making any warranty or guaranty as to the
effectiveness of its efforts hereunder, Landlord agrees that the Building shall
have the security services set forth on Exhibit 14, attached hereto. If Tenant
desires additional security services, then Tenant shall have the right, at
Tenant's sole cost and expense, to contract for such additional services,
Landlord shall cooperate with Tenant, at no cost to Landlord, to arrange for
such additional services. Tenant shall have access, subject to the reasonable
requirements of Landlord's security program for the Building and the Complex, to
the Premises twenty-four (24) hours per day, seven (7) days per week, during the
term of this Lease.
8.12 Disputes. Any disputes arising under this Article 8 shall, at the
election of either party, be submitted to arbitration in accordance with Article
29.5, provided however, that Landlord shall have the right to perform or take
any actions which Landlord is entitled to take under this Lease and that the
only issues which may be submitted to arbitration are limited solely to Tenant's
rent abatement and termination rights and whether Tenant is obligated to pay for
the cost of the actions so taken by Landlord.
9. ESCALATION
9.1 Definitions. As used in this Article 9, the words and terms which
follow mean and include the following:
(a) "Operating Year" shall mean a calendar year in which occurs any
part of the term of this Lease.
(b) "Building Operating Cost Base" and "Complex Operating Cost Base"
shall be determined as stated in Exhibit 1. Notwithstanding the foregoing, if at
any time during the term of this Lease, a category of Building Operating Costs
or Complex Operating Costs ("New Category") is included for an Operating Year
after calendar year 1999 ("Base Year"), which New Category is not set forth in
the initial Operating Cost Categories defined in Exhibit 16, then, prior to
determining Operating Expense Excess for the Operating Year in which the New
Category is first included, and each Operating Year thereafter for so long as
such New Category is included, the Building Operating Cost Base and/or the
Complex Operating Cost Base, as the case may be, shall be
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appropriately adjusted to reflect what would have been the cost of such New
Category in the Base Year, adjusted to reflect 95% occupancy for a full
Operating Year.
(c) "Tenant's Building Operating Cost Percentage", "Tenant's Complex
Operating Cost Percentage," and "Tenant's Building Tax Percentage," shall be
determined as stated in Exhibit 1. Notwithstanding the foregoing, if the Total
Rentable Area of the Premises, the Building, or the Complex changes, the various
percentages shall be appropriately adjusted.
(d) "Taxes":
(d1) "Building Taxes" shall mean the real estate taxes and other
taxes, levies and assessments imposed upon the Building and that portion of
the land of the Complex comprised of the Building's footprint and an area
surrounding the Building as shown on Exhibit 19, and upon any personal
property of Landlord used in the operation of the Building, or on
Landlord's interest in the Building or such personal property (provided
that to the extent such taxes, levies, and assessments are also allocable
to property other than the Building, such amounts shall be equitably
allocated among all real estate which is so jointly assessed); governmental
charges, fees and assessments for transit, housing, police, fire or other
governmental services or purported benefits to the Building; governmental
service or user payments in lieu of taxes; and any and all other taxes,
levies, betterments, assessments and charges arising from the ownership,
leasing, operating, use or occupancy of the Building or based upon rentals
derived therefrom, which are or shall be imposed by federal, state, county,
municipal or other governmental authorities. The definition of Building
Taxes is subject to the provisions of Article 9.1(d4)
(d2) "Land" shall mean all of the land of the Complex, excluding,
however, the land on which the Garage and all other parking areas are
located and the portions of land under each building in the Complex (but
not Building 549, except as hereinafter provided) and an area surrounding
each such building as shown on Exhibit 19. Real estate taxes with respect
to such parking areas are included in the parking fees charged to users and
real estate taxes attributable to the land comprised of the footprint and
such perimeter area of such building in the Complex (but not Building 549,
except as hereinafter provided) shall be allocated on a
building-by-building basis. Until such time as the floor area of Building
549 is included in the Total Rentable Area of the Complex pursuant to
Article 6(c), all of the buildings from time to time in the Complex shall
share the cost of real estate taxes attributable to Building 549's
footprint and the area surrounding Building 549 as shown on Exhibit 19. If
at any time, however, the floor area of Building 549 is included in the
Total Rentable Area of the Complex pursuant to Article 6(c), the real
estate taxes attributable to the land comprised of Building 549's footprint
and such Building 549 perimeter area shall be allocated in full to the
tenant or tenants of Building 549.
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(d3) "Land Taxes" shall mean the real estate taxes and other
taxes, levies and assessments imposed upon the Land, and upon any personal
property of Landlord used in connection with the Land, or on Landlord's
interest in the Land or such personal property (provided that to the extent
such taxes, levies, and assessments are also allocable to property other
than the Land, such amounts shall be equitably allocated among all real
estate which is so jointly assessed); governmental charges, fees and
assessments for transit, housing, police, fire or other governmental
services or purported benefits to the Land; governmental service or user
payments in lieu of taxes; and any and all other taxes, levies,
betterments, assessments and charges arising from the ownership, leasing,
operating, or use of the Land or based upon rentals derived therefrom,
which are or shall be imposed by federal, state, county, municipal or other
governmental authorities. The definition of Land Taxes is subject to the
provisions of Article 9.1(d4).
(d4) As of the Rent Commencement Date, neither Building Taxes nor
Land Taxes shall include any franchise, rental, income or profit tax,
capital levy or excise, provided, however, that any of the same and any
other tax, excise, fee, levy, charge or assessment, however described, that
may in the future be levied or assessed as a substitute for or an addition
to, in whole or in part, any tax, levy or assessment which would otherwise
constitute "Taxes," whether or not now customary or in the contemplation of
the parties on the Rent Commencement Date of this Lease, shall constitute
"Taxes," but only to the extent calculated as if the Complex were the only
real estate owned by Landlord. "Taxes" shall also include reasonable
expenses of tax abatement or other proceedings contesting assessments or
levies. Notwithstanding anything to the contrary herein contained, with
respect to betterments or other extraordinary or special assessments,
Tenant's obligations shall apply only to the extent such assessments would
be payable during and in respect of the term of the Lease if paid over the
longest period permitted by law.
(d5) Notwithstanding anything to the contrary herein contained,
Taxes shall in no event include any voluntary payments made by Landlord.
(e) "Building Tax Base" shall be the amount determined as set forth
in Exhibit 1 and shall apply to a Tax Period of twelve (12) months. The Building
Tax Base shall be reduced pro rata if and to the extent that the Tax Period
contains fewer than twelve (12) months.
(f) "Tax Period" shall be any fiscal/tax period in respect of which
Taxes are due and payable to the appropriate governmental taxing authority
(i.e., as mandated by the governmental taxing authority), any portion of which
period occurs during the term of this Lease, the first such Tax Period being the
one in which the Rent Commencement Date occurs. The parties acknowledge that as
of the Term
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Commencement Date, the Tax Period commences as of each July 1 and ends as of the
following June 30.
(g) "Operating Costs":
(g1) Definition of Building Operating Costs. "Building Operating
Costs" shall mean all costs incurred and expenditures made by Landlord in
the operation and management, for repair and replacements, cleaning and
maintenance of the Building as determined under generally accepted
accounting principles consistently applied , including, without limitation,
vehicular and pedestrian passageways serving the Building, related
equipment, facilities and appurtenances, and cooling and heating equipment
(g2) Definition of Complex Operating Costs. "Complex Operating
Costs" shall mean all costs incurred and expenditures made by Landlord for
the benefit of all office tenants in the Complex (subject to Landlord's
right to grant exclusive rights in accordance with Article 2.3(a)) in the
operation and management, for repair and replacements, cleaning and
maintenance of the Complex, exclusive of the Garage, the Building, and
other buildings in the Complex, as determined under generally accepted
accounting principles consistently applied and Land Taxes. Any expenses
incurred by Landlord that can be allocated on a building-by-building basis
shall be so allocated in accordance with Subparagraph (g3). To the extent
that a cost included in Complex Operating Costs is also allocable to
property other than the Complex, such cost shall be equitably allocated to
each parcel of property which benefits from such cost.
(g3) The allocation of costs and expenditures among the various
buildings in the Complex shall be on the basis of the ratio of the Total
Rentable Area of each building in the Complex to the Total Rentable Area of
the Complex, unless such allocation would result in a disproportionate
charge based upon the relative usage of the service on which such cost is
based, in which case such allocation shall be based upon such relative
usage. Building Operating Costs and Complex Operating Costs shall include,
without limitation, those categories of "Specifically Included Operating
Costs", as set forth below, but shall not include "Excluded Costs", as
hereinafter defined.
(g4) Definition of Excluded Costs. "Excluded Costs" shall be
defined as:
(i) Mortgage charges, brokerage commissions, salaries of
executives and owners not directly employed in the
management/operation of the Complex, the cost of work done by Landlord
for a particular tenant for which Landlord has the right to be
reimbursed by such tenant, and, subject to Subparagraph (3) below,
such portion of
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expenditures as are, under generally accepted accounting principles
consistently applied, not properly currently chargeable against
income.
(ii) Repairs or other work occasioned by fire, windstorm or
other casualty or by the exercise of eminent domain, including any
costs of repair within any deductible carried by Landlord under its
casualty insurance and any uninsured losses.
(iii) Leasing commissions, attorneys' fees, accountants'
fees, architects' fees, costs and disbursements and other expenses
incurred in connection with negotiations or disputes with Tenant,
other tenants, other occupants, or prospective tenants or occupants or
associated with the enforcement of any leases or defenses of
Landlord's title to or interest in the Complex or any part thereof.
(iv) Renovating or otherwise improving, decorating, painting
or redecorating space for tenants or other occupants of the Complex.
(v) Landlord's cost of electricity and other services that
are sold to tenants and for which Landlord is entitled to be
reimbursed by tenants as an additional charge or rental over and above
the basic rent, tax escalation, and operating expense escalation
payable under Landlord's lease with such tenant.
(vi) Depreciation and amortization, except as provided in
Article 9.1(g5).
(vii) Expenses in connection with services or other benefits
of a type or to the extent which are not provided Tenant or the
Premises but which are provided to another tenant or occupant.
(viii) Penalties or damages incurred due to violation by
Landlord or any tenant of the terms and conditions of any lease.
(ix) Overhead and profit increment paid to subsidiaries or
affiliates of Landlord for services on or to the Complex, to the
extent only that the costs of such services exceed competitive costs
of such services were they not so rendered by a subsidiary or
affiliate. The provisions of this clause (ix) shall not apply to any
management fees payable to Landlord's managing agent, which is
governed by clause (xi) below.
(x) Interest on debt or amortization payments on any
mortgage or mortgages (except to the extent that such payments are
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included in the Annual Charge-Off for a capital expenditure which is
permitted to be included in Operating Costs in accordance with Article
9.1(g5)).
(xi) Landlord's general overhead, Tenant hereby
acknowledging that Building Operating Costs shall include an
allocation to the Building of a management fee for operation and
management of the Complex which shall not exceed the market rate,
taking into account the salaries, benefits and space costs of property
management personnel separately reimbursable as a Building Operating
Cost hereunder.
(xii) Any compensation paid to clerks, attendants or other
persons in commercial concessions operated by Landlord in the Building
or the Complex.
(xiii) All items and services for which Tenant or any other
tenant in the Complex is separately charged, reimburses Landlord or
pays third persons or for which Landlord is reimbursed by any other
party including, without limitation, reimbursements under insurance
policies, and the net amount recovered by Landlord under any
warranties.
(xiv) Advertising and promotional expenditures.
(xv) Any fines or penalties incurred due to violations by
Landlord of any governmental rule or authority.
(xvi) Any costs incurred by Landlord in the event that the
Building or the Complex does not comply with governmental rules in
effect as of the Rent Commencement Date.
(xvii) Costs for sculpture, paintings or other objects of
art.
(xviii) Wages, salaries, or other compensation paid to any
executive employees of Landlord and/or Landlord's managing agent above
the grade of senior property manager of the Complex, except that if
any such employee performs a service which would have been performed
by an outside consultant, the compensation paid to such employee for
performing such service shall be included in Complex Operating Costs,
to the extent only that the cost of such service does not exceed
competitive cost of such service had such service been rendered by an
outside consultant.
(xix) Repair and replacement costs in connection with
defects in Landlord's Work which are incurred by Landlord prior to the
third (3rd) anniversary of the initial Rent Commencement Date.
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(xx) The cost of testing, remediation or removal,
transportation or storage of "Hazardous Materials" (as defined in
Article 7(c)) in the Building or in the Complex required by
"Environmental Laws" (as defined in Article 7(a)), provided however,
that with respect to the testing, remediation or removal of (i) any
material or substance located in the Building or in the Complex on the
Rent Commencement Date and which, as of the Rent Commencement Date, is
not considered, as a matter of law, to be a Hazardous Material, but
which is subsequently determined to be a Hazardous Material as a
matter of law, and (ii) any material or substance located in the
Building or in the Complex after the Rent Commencement Date and which,
when placed in the Building or the Complex, was not considered, as a
matter of law, to be a Hazardous Material, but which is subsequently
determined to be a Hazardous Material as a matter of law, the costs
thereof shall be included in Operating Expenses as and to the extent
provided under Article 9.1(g5)(i) below.
(xxi) Payments under any ground lease.
(xxii) Charitable or political contributions.
(xxiii) Costs incurred in connection with the repair,
maintenance, operation or management of the On-Site Parking Areas or
the Off-Site Parking Areas, except for premiums for liability
insurance allocable to the On-Site Parking Areas.
(xxiv) Expenditures that are, under generally accepted
accounting principles consistently applied, of a capital nature,
except to the extent provided in Subparagraph 9.1(g5) below; and
(xxv) Costs of subsidizing more than one (1) common
cafeteria at the Complex.
(g5) Capital Expenditures.
(i) CAPITAL ITEMS. If Landlord makes any capital
expenditures or acquires a capital item, whether new or a replacement
of a capital item which was worn out, has become obsolete, etc.,
(collectively called "Capital Expenditures"), then there shall be
included in Building Operating Costs or Complex Operating Costs, as
the case may be, for each Operating Year in which and after such
capital expenditure is made the Annual Charge-
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Off of such capital expenditure. Notwithstanding the foregoing, with
respect to such Capital Expenditure, the Annual Charge-Off of such
Capital Expenditure, shall be included in Building Operating Costs or
Complex Operating Costs, as the case may be, only:
1. if the capital item being acquired is required by
a change in law after the Rent Commencement Date for the Portion
of the Premises for which such Capital Expenditure is made, or
2. to the extent the capital item is reasonably
projected to reduce Building Operating Costs or Complex Operating
Costs, as the case may be, as and when such reductions are
reasonably projected to occur.
(ii) ANNUAL CHARGE-OFF. "Annual Charge-Off" shall be defined
as the annual amount of principal and interest payments which would be
required to repay a loan ("Capital Loan") in equal monthly
installments over the Useful Life, as hereinafter defined, of the
capital item in question on a direct reduction, level payments of
principle and interest, basis at an annual interest rate equal to the
Capital Interest Rate, as hereinafter defined, where the initial
principal balance is the cost of the capital item in question.
(iii) USEFUL LIFE. "Useful Life" shall be reasonably
determined by Landlord in accordance with generally accepted
accounting principles and practices in effect at the time of
acquisition of the capital item.
(iv) CAPITAL INTEREST RATE. "Capital Interest Rate" shall be
defined as an annual rate of either one percentage point over the AA
Bond rate (Standard & Poor's corporate composite or, if unavailable,
its equivalent) as reported in the financial press at the time the
capital expenditure is made or, if the capital item is acquired
through third-party financing, then the actual (including fluctuating)
rate paid by Landlord in financing the acquisition of such capital
item.
(g6) Specifically Included Categories of Operating Costs. Subject
to the Excluded Costs definition, the qualifications on reimbursable
Building Operating Costs and Complex Operating Costs set forth in Articles
9.1(g1) 9.1(g2) and 9.1(g3), and except as otherwise expressly excluded
from the definition of Building Operating Costs and Complex Operating Costs
pursuant to the provisions of this Lease, Building Operating Costs and
Complex Operating Costs shall include, but not be limited to, the
following, provided that if such costs are attributable to the Building and
to other buildings in the Complex, then such costs shall be equitably
apportioned among the Building and such other buildings in accordance with
Article 9.1(g3), and if such costs are attributable to common areas of the
Complex and to other property which is not part of the
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Complex, then such costs shall be equitably apportioned among the Complex
and such other property:
REAL ESTATE TAXES: Land Taxes only, and not Building Taxes, as such terms
are defined in Article 9.1(d).
TAXES (other than real estate taxes): Sales, Federal Social Security,
Unemployment and Old Age Taxes and contributions and State Unemployment
taxes and contributions accruing to and paid by the Landlord on account of
all employees of Landlord and/or Landlord's managing agent whose salaries
are reimbursable by Tenant hereunder, but only to that extent. Taxes levied
upon the net income of the Landlord and taxes withheld from employees shall
not be included herein.
WATER: All charges and rates connected with water supplied to the Premises
and/or the Complex and related sewer use charges for normal office use and
incidental uses, provided however, that in no event shall water for more
than one (1) cafeteria to be opened by Landlord be in included in Complex
Operating Costs.
HEAT AND AIR CONDITIONING: All charges connected with heat and air
conditioning supplied to the Premises and/or Complex.
WAGES: Wages and cost of all employee benefits of all employees of the
Landlord and/or Landlord's managing agent who are employed in, about or on
account of the Premises and/or Complex provided that wages and costs for
employees who also work on other properties shall be allocated to the
Complex based upon the proportion of their time spent working on the
Complex and then allocated to the Premises on a square foot basis.
CLEANING: Subject to Article 8.3A, the cost of labor and material for
cleaning the Premises, surrounding areaways and windows in the Premises
and/or Complex, including, without limitation, the services listed on
Exhibit 5.
ELEVATOR MAINTENANCE: All expenses for or on account of the upkeep and
maintenance of all elevators in the Premises, Building and/or the Complex
(if any).
ELECTRICITY: The cost of all electric current for the operation of any
machine, appliance or device used for the operation of the Premises and the
Building and/or Complex, including the cost of electric current for the
elevators, lights, air conditioning and heating, but not including electric
current which is to be paid for directly to the utility by each user/tenant
in the Premises and/or Complex. (If and so long as Tenant is billed
directly by the electric utility for its own consumption of electricity for
lights and plugs as determined by its separate meter or by
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submeter, then Operating Costs shall include only public area electric
current consumption and electricity for base building HVAC and not any
demised Premises electric current consumption for lights and plugs.)
Wherever separate metering is unlawful, prohibited by utility company
regulation or tariff or is otherwise impracticable, relevant consumption
figures for the purposes of this Article 9 shall be determined by fair and
reasonable allocations and engineering estimates made by Landlord.
INSURANCE: Fire, casualty, liability and such other insurance as may from
time to time be reasonably required by lending institutions on first-class
office buildings in the City or Town wherein the Building is located. To
the extent that Landlord's general liability policy insures the Complex
under one (1) policy, rather than individual policies on the buildings,
then the premiums for such insurance shall be allocated among the buildings
in the Complex on a per square foot basis.
MISCELLANEOUS: All other expenses customarily incurred in connection with
the operation and maintenance of first-class office buildings in the Market
Area to the extent not otherwise excluded under this Lease.
MANAGEMENT SPACE: Market rate rental costs associated with the Complex's
management office.
COMPLEX AMENITIES: The cost of operating any amenities in the Complex
available to all tenants of the Complex including, without limitation, any
cafeteria. The costs to be included in Operating Costs shall include any
subsidy, including lower than market rate rent, provided by Landlord for or
with respect to such amenity.
9.2 Tax Excess.
(a) IN GENERAL. Commencing as of the Rent Commencement Date, and
continuing thereafter throughout the term of this Lease, if the Building Taxes
in any Tax Period exceed the Building Tax Base, Tenant shall pay to Landlord
Tenant's Building Tax Percentage of such excess, such amounts being hereinafter
referred to as "Tax Excess." Tax Excess shall be due within thirty (30) days of
Tenant's receipt of Landlord's bill therefor. In implementation and not in
limitation of the foregoing, Tenant shall remit to Landlord pro rata monthly
installments on account of projected Tax Excess, as reasonably calculated by
Landlord on the basis of the most recent Tax data available. Landlord shall,
within one hundred twenty (120) days after the end of each Tax Period, deliver
to Tenant a reasonably detailed statement of the actual amount of Building Taxes
for such Tax Period ("Tax Year End Statement"). If the total of such monthly
remittances on account of any Tax Period is greater than the actual Tax Excess
for such Tax Period, Tenant may credit the difference against the next
installment of rental or other charges due to Landlord hereunder, except that if
such difference is determined after the end of the term of this Lease, Landlord
shall refund such difference to Tenant to the
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extent that such difference exceeds any amounts then due from Tenant to
Landlord. If the total of such remittances is less than the actual Tax Excess
for such Tax Period, Tenant shall pay the difference to Landlord within thirty
(30) days of Tenant's receipt of the bill.
(b) TAX ABATEMENTS. Appropriate credit against Tax Excess shall be
given for any refund obtained by reason of a reduction in any Taxes by the
Assessors or the administrative, judicial or other governmental agency
responsible therefor. The original computations, as well as reimbursement or
payments of additional charges, if any, or allowances, if any, under the
provisions of this Article 9.2 shall be based on the original assessed
valuations with adjustments to be made at a later date when the tax refund, if
any, shall be paid to Landlord by the taxing authorities. Expenditures for legal
fees and for other similar or dissimilar expenses incurred in obtaining the tax
refund may be charged against the tax refund before the adjustments are made for
the Tax Period to the extent not included in Operating Costs pursuant to Article
9.1(d). Provided that (i) Tenant is occupying at least 100,000 square feet of
Total Rentable Area in the Building, (ii) Tenant gives written notice to
Landlord electing to seek a reduction or abatement in Building Taxes in respect
of the Tax Period in question, and (iii) Landlord will not be seeking a
reduction or abatement for such Tax Period, then Tenant shall have the right,
subject to the provisions of this Article 9.2(b), to initiate and prosecute tax
abatement proceedings with respect to Building Taxes at Tenant's sole cost and
expense. Landlord shall have the right to participate in all phases of such
abatement proceedings, including without limitation, approval (not to be
unreasonably withheld, conditioned or delayed) of all filings by Tenant in
connection with such proceedings and the right to attend meetings between Tenant
and its representatives and counsel with the representatives and/or counsel for
the City of Cambridge. If Landlord initiates proceedings, or assumes a
prosecution initiated by Tenant, with respect to Building Taxes, Tenant shall
have the right to participate in all phases of such abatement proceedings,
including without limitation, approval (not to be unreasonably withheld or
delayed) of any settlement and all filings by Landlord in connection with such
proceedings and the right to attend meetings between Landlord and its
representatives and counsel with the representatives and counsel for the City of
Cambridge.
Nothing herein shall be deemed to be a waiver by Tenant of its rights
under statutory law or common law to seek an abatement of Taxes.
9.3 Operating Expense Excess.
(a) IN GENERAL. Commencing as of the Rent Commencement Date, and
continuing thereafter throughout the term of the Lease, if the Building
Operating Costs in any Operating Year exceed the Building Operating Cost Base,
or if the Complex Operating Costs in any Operating Year exceed the Complex
Operating Cost Base, Tenant shall pay to Landlord Tenant's Building or Complex
Operating Cost Percentage, respectively, of such excess, such amounts being
hereinafter collectively referred to as "Operating Expense Excess." In
implementation and not in limitation of the foregoing, Tenant shall remit to
Landlord pro rata monthly installments on account of projected
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Operating Expense Excess, calculated by Landlord on the basis of the most recent
Operating Costs data or budget available. Landlord shall, within one hundred
twenty (120) days after the end of each Operating Year, deliver to Tenant a
reasonably detailed line-item statement ("Operating Year End Statement") of the
actual amount of Operating Costs for such Operating Year. If the total of such
monthly remittances on account of any Operating Year is greater than the actual
Operating Expense Excess for such Operating Year, Tenant may credit the
difference against the next installment of rent or other charges due to Landlord
hereunder, except that if such difference is determined after the end of the
term of this Lease, Landlord shall refund such difference to Tenant to the
extent that such difference exceeds any amounts then due from Tenant to
Landlord. If the total of such remittances is less than actual Operating Expense
Excess for such Operating Year, Tenant shall pay the difference to Landlord
within thirty (30) days of Tenant's receipt of Landlord's bill therefor.
Landlord shall (or shall cause its managing agent to) maintain its books
relating to Tax Excess and Operating Expense Excess and retain all receipts,
paid invoices and other supporting documentation reasonably necessary to
evidence Operating Expense Excess and Tax Excess for at least three (3) years
after the expiration of the Operating Year and/or Tax Period in question.
(b) TENANT'S AUDIT RIGHTS. Subject to the provisions of this
paragraph, Tenant shall have the right, at Tenant's cost and expense, to examine
all documentation and calculations prepared in the determination of Operating
Expense Excess and Tax Excess:
(1) Such documentation and calculation shall be made available
to Tenant at the offices where Landlord keeps such records during normal
business hours within a reasonable time after Landlord receives a written
request from Tenant to make such examination.
(2) Tenant shall have the right to make such examination no more
than once in respect of any period in which Landlord has given Tenant an
Operating Year End Statement or a Tax Year End Statement.
(3) Any request for examination in respect of any Operating Year
and/or Tax Period may be made and completed no more than one (1) year after
Landlord has given Tenant an Operating Year End Statement for such
Operating Year or one (1) year after Landlord has provided Tenant with the
final Tax Year End Statement in respect of the relevant Tax Period, as the
case may be, provided however, if such examination results in a
determination that Tenant was overcharged with respect to an Operating Year
and/or a Tax Period, then Tenant shall have the right to review Landlord's
books as to the erroneous items for the two (2) Operating Years and/or a
Tax Periods, as the case may be, immediately prior to the Operating Year
and/or a Tax Period in question, and if such examination results in a
determination that Landlord committed a fraud with respect to an Operating
Year and/or a Tax Period, then Tenant shall have the right to review
Landlord's books for the three (3) Operating Years immediately prior to
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the Operating Year and/or a Tax Period in question. If Tenant fails to
submit to Landlord in writing any objections to Operating Costs or Taxes
with respect to any Operating Year or Tax Period, as the case may be,
within the foregoing time limits, Tenant shall be conclusively deemed to
have accepted the amounts billed by Landlord to Tenant on account of such
Operating Year or Tax Period, as the case may be.
(4) Such examination may be made first by Tenant and any
employees of Tenant, and then, at Tenant's election, by an independent firm
(including Fallon Hines & O'Connor), provided that in no event shall the
compensation payable by Tenant to such firm be on the basis of a contingent
fee.
(5) As a condition to performing any such examination, Tenant
and its examiners shall be required to execute and deliver to Landlord a
confidentiality agreement in the form attached hereto as Exhibit 15,
agreeing to keep confidential any information which it discovers about
Landlord or the Complex in connection with such examination.
9.4 Part Years. If any Rent Commencement Date or if the Termination Date
occurs in the middle of an Operating Year or Tax Period, Tenant shall be liable
for only that portion of the Operating Expense or Tax Excess, as the case may
be, in respect of such Operating Year or Tax Period represented by a fraction
the numerator of which is the number of days of the herein term (commencing as
of the applicable Rent Commencement Date) which falls within the Operating Year
or Tax Period and the denominator of which is three hundred sixty-five (365), or
the number of days in said Tax Period, as the case may be.
9.5 Effect of Taking. In the event of any taking of a portion of the
Complex, the Building or the land upon which it stands under circumstances
whereby this Lease shall not terminate under the provisions of Article 20 then,
for the purposes of determining Tax Excess, there shall be substituted for the
Tax Base originally provided for herein a fraction of such Tax Base, the
numerator of which fraction shall be the Taxes for the first Tax Period
subsequent to the condemnation or taking which takes into account such
condemnation or taking, and the denominator of which shall be the Taxes for the
last Tax Period prior to the condemnation or taking, which did not take into
account such condemnation or taking. Tenant's Tax Percentage shall be adjusted
appropriately to reflect the proportion of the Premises, the Building and/or the
Complex remaining after such taking, effective as of the date of such taking.
9.6 Adjustment of Operating Costs based upon Occupancy. If less than
ninety-five percent (95%) of the rentable area of the Building shall have been
occupied by tenants at any time during any Operating Year (including the Base
Year), then, at Landlord's election, Building Operating Costs for such Operating
Year shall be adjusted to equal the amount Building Operating Costs would have
been for such period had occupancy been ninety-five percent (95%) throughout
such period.
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9.7 Disputes, etc. Any disputes arising under this Article 9 shall, at the
election of either party, be submitted to arbitration as hereinafter provided.
Any obligations under this Article 9 which shall not have been paid at the
expiration or sooner termination of the term of this Lease shall survive such
expiration and shall be paid when and as the amount of same shall be determined
and be due.
9.8 ADJUSTMENT FOR CHANGED OPERATING COSTS. If because of a change of
policy or practice in operating the Building and/or the Complex, there is a
material increase in the line item cost for any category of Building Operating
Costs and/or Complex Operating Costs set forth in the initial Operating Cost
Categories defined in Exhibit 16 (an "Existing Category"), as compared to the
costs attributable to such line item as included in the Building Operating Cost
Base or the Complex Operating Cost Base, as the case may be ("Dispute
Increase"), Tenant may object to such increase on a going forward basis by
providing written notice to Landlord ("Cost Objection") on the basis that such
policy or practice is not reasonably necessary for the operation and maintenance
of a first-class office building in the Market Area. If the parties cannot agree
upon the Dispute Increase within thirty (30) days after Landlord's receipt of
the Cost Objection, then the Cost Objection shall be submitted to arbitration in
accordance with Article 29.5, during which the arbitrators shall determine only
if such change in policy or practice is reasonably necessary for the operation
and maintenance of a first-class office building in the Market Area. If either
the parties agree, or the arbitrators determine, that such policy or practice is
not reasonably necessary as aforesaid, Landlord shall elect, by providing
written notice to Tenant within ten (10) days following such agreement of the
parties or decision by the arbitrators, as the case may be, to either (a)
continue with such change in policy or practice but exclude any increased costs
from Tenant's obligation to pay Building Operating Costs or Complex Operating
Costs, as the case may be, (b) revoke such change in policy or practice so as to
eliminate the additional Building Operating Costs and/or Complex Operating
Costs, as the case may be, or (c) continue with such change in policy or
practice, in which case, for so long as such change in policy or practice
remains in effect, the Building Operating Cost Base and/or the Complex Operating
Cost Base, as the case may be, shall be adjusted to reflect what would have been
the cost of such Existing Category in the Base Year if such policy or practice
had been in effect during the Base Year, adjusted to reflect 95% occupancy for a
full Operating Year. Landlord's election, if necessary, of option (a), (b), or
(c) as aforesaid shall be effective as of the date the parties agree thereto or
the date the arbitrators make their decision.
10. CHANGES OR ALTERATIONS BY LANDLORD
Landlord reserves the right, exercisable by itself or its nominee, at any
time and from time to time without the same constituting an actual or
constructive eviction and without incurring any liability to Tenant therefor or
otherwise affecting Tenant's obligations under this Lease, to make such changes,
alterations, additions, improvements, repairs or replacements in or to the
Premises, the Building and/or the Complex and the
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fixtures and equipment thereof, as well as in or to the street entrances, halls,
passages, elevators, escalators, parking areas, tunnels, and stairways thereof,
as it may deem necessary or desirable, and to change the arrangement and/or
location of entrances or passageways, doors and doorways, and corridors,
elevators, stairs, toilets, or other public parts of the Building and/or the
Complex (including without limitation, all On-Site Parking Areas), provided,
however, that there be no material interference with the right of access to, or
with the use and enjoyment of, the Premises or Tenant's appurtenant rights
(including the right to use to the full extent provided herein the Parking
Areas, as the same may change from time to time). Any disputes relating to the
change of location of the On-Site Parking Areas shall be submitted to
arbitration in accordance with Article 29.5 of the Lease. The foregoing rights
shall include, without limitation, the right to add additional land and/or
buildings to the Complex. Notwithstanding the foregoing: (i) Landlord and its
agents, employees and contractors shall not, except in an emergency and except
for normal cleaning and maintenance operations, exercise any right which
Landlord has to enter the Premises without giving Tenant reasonable advance
notice, and, in exercising any such right of access, Landlord shall use
reasonable efforts to minimize any interference with Tenant's use and enjoyment
of the Premises, and (ii) Landlord shall not make any alteration, addition, or
improvement within the Premises which is not above the ceiling, behind the walls
or below the floor unless either: (i) Landlord obtains Tenant's prior written
consent, which consent shall not be unreasonably withheld, conditioned, or
delayed or (ii) such work is required by law. Furthermore, in performing any
such repair or alteration work, Landlord shall make reasonable efforts to
minimize any interference with Tenant's use and enjoyment of the Premises, which
shall include, at a minimum, all reasonable efforts to maintain continuous
operation of the Building's cooling tower and electrical system 24 hours per
day, 7 days per week during the period of any such alteration or repair, and if,
despite such reasonable efforts, the Building's cooling tower or electrical
system must be shut-down for any period of time, Landlord shall make reasonable
efforts to provide Tenant with at least two (2) weeks' prior written notice of
such shut-down, except that no notice shall be required in an emergency. Nothing
contained in this Article 10 shall be deemed to relieve Tenant of any duty,
obligation or liability of Tenant under this Lease with respect to making any
repair, replacement or improvement or complying with any law, order or
requirement of any governmental or other authority. Subject to the Tenant's
exclusive signage rights specified in Exhibit 10 attached hereto and Paragraph 5
of the Rider to Lease, Landlord reserves the right to adopt and at any time and
from time to time to change the name and/or street address of the Building
and/or the Complex, provided, however that the name and street address of the
Building shall not be a corporate or company name other than Forrester Research,
Inc. Neither this Lease nor any use by Tenant shall give Tenant any right or
easement for the use of any door or any passage or any concourse connecting with
any other building or to any public convenience, and the use of such doors,
passages and concourses and of such conveniences may be regulated or
discontinued at any time and from time to time by Landlord without notice to
Tenant and without affecting the obligation of Tenant hereunder or incurring any
liability to Tenant therefor, provided, however, that there be no material
interference with the right of access to, or with the use of the Premises or
Tenant's appurtenant rights (including the right to use to the full extent
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provided herein the Parking Areas, as the same may change, from time to time) by
Tenant. If at any time any windows of the Premises are temporarily (i.e. not in
excess of five (5) business days) closed or darkened for any reason whatsoever
relating to any maintenance or repair work, but Tenant shall not otherwise be
prevented from occupying or using the Premises for the uses set forth herein,
Landlord shall not be liable for any damage Tenant may sustain thereby and
Tenant shall not be entitled to any compensation therefor nor abatements of rent
nor shall the same release Tenant from its obligations hereunder nor constitute
an eviction.
11. FIXTURES, EQUIPMENT AND IMPROVEMENTS--REMOVAL BY TENANT
Except as provided for in this Article 11 and Articles 12 and 22, all
fixtures, equipment, improvements and appurtenances attached to or built into
the Premises prior to or during the term, whether by Landlord at its expense or
at the expense of Tenant (either or both), or by Tenant, shall be and remain
part of the Premises and shall not be removed by Tenant during or at the end of
the term. All electric, plumbing, heating and sprinkling systems, fixtures and
outlets, vaults, paneling, molding, shelving, radiator enclosures, cork, rubber,
linoleum and composition floors, ventilating, silencing, air conditioning and
cooling equipment, shall be deemed to be included in such fixtures, equipment,
improvements and appurtenances, whether or not attached to or built into the
Premises. All fitness center equipment, electric fixtures, carpets, drinking or
tap water facilities, furniture, trade fixtures and business equipment
(including any specialty equipment used by Tenant), the Other Removable
Property, as hereinafter defined, and Tenant's inventory and stock in trade
(collectively, "Tenant's Trade Fixtures") shall not be deemed to be included in
such fixtures, equipment, improvements and appurtenances and may be, and if
required pursuant to Article 12, will be, removed by Tenant at the expiration or
prior termination of the term of this Lease, upon the condition that Tenant
shall repair any damage to the Premises or the Building arising from
installation or such removal. For the purposes hereof, the "Other Removable
Property" shall be defined as those items which Tenant identifies in writing at
the time Tenant submits plans to Landlord, either in connection with the Tenant
Improvement Work, or in connection with future alterations, provided that
Landlord approved such items. Landlord agrees that it will approve such items at
the time that Landlord approves Tenant's plans for the work in question unless,
in Landlord's reasonable judgment, the removal of such items at the expiration
or prior termination of the term of the Lease will prevent Tenant from
delivering the Premises to Landlord in a Building standard condition (i.e., as
set forth in Exhibit 6).
12. ALTERATIONS AND IMPROVEMENTS BY TENANT
(a) Except as provided in Article 12(d), Tenant shall make no
alterations, decorations, installations, removals (other than Tenant's Trade
Fixtures, which Tenant has the right to remove pursuant to Article 11),
additions or improvements in or to the Premises without Landlord's prior written
consent, which consent shall not be
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unreasonably withheld, conditioned or delayed, obtained after reasonable prior
notice, and then only those (i) which equal or exceed the specifications and
quantities provided in Exhibit 6, and (ii) made by contractors or mechanics
approved by Landlord (provided however, that Tenant shall not be required to
obtain Landlord's approval of contractors who perform only decorative work). No
such installations or work shall be undertaken or begun by Tenant until: (i)
Landlord has approved written plans and specifications and a time schedule for
such work; (ii) where such work requires Landlord's consent pursuant to this
Article 12, Tenant has made provision for either written waivers of liens from
all contractors, laborers and suppliers of materials for such installations or
work, the filing of lien bonds on behalf of such contractors, laborers and
suppliers, or other appropriate protective measures approved by Landlord; and
(iii) Tenant has procured appropriate surety payment and performance bonds.
Notwithstanding the foregoing, the provisions of clause (iii) of this Article 12
shall only be applicable if the cost of such work exceeds ten (10%) percent of
Tenant's then current assets, net of receivables. No material amendments or
additions to such plans and specifications shall be made without the prior
written consent of Landlord, which consent shall not be unreasonably withheld,
conditioned or delayed.
(b) Landlord's consent and approval required under this Article 12
shall not be unreasonably withheld, conditioned or delayed. Landlord's approval
is solely given for the benefit of Landlord and neither Tenant nor any third
party shall have the right to rely upon Landlord's approval of Tenant's plans
for any other purpose whatsoever. Without limiting the foregoing, Tenant shall
be responsible for all elements of the design of Tenant's plans (including,
without limitation, compliance with law, functionality of design, the structural
integrity of the design, the configuration of the Premises and the placement of
Tenant's furniture, appliances and equipment), and Landlord's approval of
Tenant's plans shall in no event relieve Tenant of the responsibility for such
design. Landlord shall have no liability or responsibility for any claim, injury
or damage alleged to have been caused by the particular materials, whether
building standard or non-building standard, appliances or equipment selected by
Tenant in connection with any work performed by or on behalf of Tenant in the
Premises including, without limitation, furniture, carpeting, copiers, laser
printers, computers and refrigerators.
(c) Subject to Landlord's Contribution, any such work, alterations,
decorations, installations, removals, additions and improvements shall be done
at Tenant's sole expense and at such times and in such manner as Landlord may
from time to time reasonably designate. If Tenant shall make any alterations,
decorations, installations, removals, additions or improvements (collectively
"Alterations") which, at the expiration or sooner termination of the term of
this Lease, would reasonably be unusually expensive to demolish or remove
("Alterations Which Must Be Removed By Tenant"), then Landlord may elect to
require Tenant to remove such Alterations Which Must Be Removed By Tenant.
Landlord shall, at the time it approves Tenant's plans and specifications for
such Alteration, determine whether such Alteration is an Alteration Which Must
Be Removed By Tenant and shall make its election as to whether Tenant
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shall be required to remove such Alteration Which Must Be Removed By Tenant at
the expiration or sooner termination of the term of this Lease. If Landlord
fails to notify Tenant at the time Tenant's plans and specifications for such
Alteration are approved that such Alteration is an Alteration Which Must Be
Removed By Tenant, such alteration shall be conclusively deemed not to be an
Alteration Which Must Be Removed By Tenant. Notwithstanding anything in the
foregoing to the contrary, Tenant's data lines and cable installed prior to the
Rent Commencement Date in respect of Portion 2-6 or from time to time during the
term of this Lease, shall not be an Alteration Which Must Be Removed By Tenant
if such data lines and cable are installed in a manner consistent with similar
installations in other first class office buildings, if such data lines and
cable are labeled for identification purposes, and if Tenant delivers a plan
showing the location of such data lines and cable. In any event, Tenant shall be
required to remove any internal stairways specifically for Tenant's use (i.e.,
not base Building standard fire stairways) and restore the openings at the end
of the term of the Lease. Notwithstanding the foregoing, Tenant shall only be
obligated to remove such stairways and restore the openings thereto if the next
tenant of the Premises will not be using the internal stairways and such
internal stairways need to be closed to prepare the Premises for the next
tenant. Such determination shall be made in connection with the planning process
for the improvements to be made for the next tenant(s) of the Premises. In
addition, at Tenant's election, Tenant shall have the right to either perform
the removal and restoration of the internal stairways or to reimburse Landlord,
as additional rent, for the reasonable out-of-pocket costs actually incurred by
Landlord in performing such removal and restoration of the internal stairways.
Tenant's obligations under this clause (c) shall survive the expiration or
earlier termination of the term of the Lease.
(d) Notwithstanding anything to the contrary herein contained, Tenant
shall have the right, without obtaining Landlord's consent, to make interior
nonstructural decorations, alterations, additions, or improvements, provided
however, that:
a. Tenant shall give prior written notice to Landlord of such
decorations, alterations, additions or improvements;
b. Tenant shall submit to Landlord plans for such decorations,
alterations, additions, or improvements if Tenant utilizes plans for
such decorations, alterations, additions or improvements; and
c. such decorations, alterations, additions or improvement
shall not materially, adversely affect any of the Building's systems.
(e) Any disputes arising under this Article 12 shall be submitted to
arbitration in accordance with Article 29.5 of the Lease.
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13. TENANT'S CONTRACTORS--MECHANICS' AND OTHER LIENS--STANDARD OF TENANT'S
PERFORMANCE--COMPLIANCE WITH LAWS
Whenever Tenant shall make any alterations, decorations, installations,
removals, additions or improvements in or to the Premises--whether such work be
done prior to or after the Rent Commencement Date--Tenant will strictly observe
the following covenants and agreements:
(a) Tenant agrees that it will not, either directly or indirectly,
use any contractors and/or materials if their use will create any difficulty,
whether in the nature of a labor dispute or otherwise, with other contractors
and/or labor engaged by Tenant or Landlord or others in the construction,
maintenance and/or operation of the Building or any part thereof.
(b) In no event shall any material or equipment be incorporated in or
added to the Premises, so as to become a fixture or otherwise a part of the
Building, in connection with any such alteration, decoration, installation,
addition or improvement which is subject to any lien, charge, mortgage or other
encumbrance of any kind whatsoever or is subject to any security interest or any
form of title retention agreement. Any mechanic's lien filed against the
Premises or the Complex for work claimed to have been done for, or materials
claimed to have been furnished to, Tenant shall be discharged by Tenant within
ten (10) days after receipt of written notice thereof from Landlord, at Tenant's
expense by filing the bond required by law or otherwise. If Tenant fails so to
discharge any lien, Landlord may do so at Tenant's expense and Tenant shall
reimburse Landlord for any expense or cost incurred by Landlord in so doing
within fifteen (15) days after rendition of a bill therefor.
(c) All installations or work done by Tenant shall be at its own
expense and shall at all times comply with (i) laws, rules, orders and
regulations of governmental authorities having jurisdiction thereof; (ii)
orders, rules and regulations of any Board of Fire Underwriters, or any other
body hereafter constituted exercising similar functions, and governing insurance
rating bureaus; (iii) Rules and Regulations of Landlord, as defined in Article
17.1; and (iv) except as set forth in Article 12(d), plans and specifications
prepared by and at the expense of Tenant theretofore submitted to and approved
by Landlord.
(d) Tenant shall procure all necessary permits before undertaking any
work in the Premises; do all of such work in a good and workmanlike manner,
employing materials of good quality and complying with all governmental
requirements; and defend, save harmless, exonerate and indemnify Landlord from
all injury, loss or damage to any person or property occasioned by such work.
Tenant shall cause contractors employed by Tenant (i) to carry Worker's
Compensation Insurance in accordance with statutory requirements, Automobile
Liability Insurance and, naming Landlord and Landlord's managing agent as
additional insured parties, Commercial General Liability Insurance covering such
contractors on or about the Premises in the amounts stated in Article 15
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hereof or in such other reasonable amounts as Landlord shall require and (ii) to
submit certificates evidencing such coverage to Landlord prior to the
commencement of such work.
14. REPAIRS BY TENANT--FLOOR LOAD
14.1 Repairs by Tenant. Tenant shall keep all and singular the interior of
the Premises, and any appurtenant areas which serve the Premises exclusively,
neat and clean including, as necessary, periodic rug shampoo and waxing of tiled
floors and cleaning of blinds and drapes as reasonably determined by Tenant
(provided that nothing herein shall require Tenant to perform any services or
repairs which Landlord is required to perform under Article 8.7 and Exhibit 5)
and in such repair, order and condition as the same are in on the Rent
Commencement Date or may be put in during the term hereof, reasonable use and
wearing thereof, damage by fire or by other casualty, damage caused by
Landlord's failure to comply with its obligations under this Lease and damage
caused by the negligence or willful misconduct of Landlord, Landlord's agents,
employees, or contractors excepted. Subject to Article 19, Tenant shall make, as
and when needed as a result of neglect by Tenant or Tenant's servants,
employees, agents, contractors, invitees, or licensees or otherwise, all repairs
outside the Premises necessary to preserve them in such repair, order and
condition, which repairs shall be in quality and class equal to the original
work, provided however, that Tenant shall not be required to make any such
repairs to the extent caused by a peril covered by insurance carried by Landlord
or required to be carried by Landlord pursuant to the Lease (Tenant hereby
acknowledging, however, that Tenant shall be responsible for any reasonable
costs incurred by Landlord within Landlord's deductible, provided that such
deductible does not exceed Twenty-Five Thousand and 00/100 Dollars ($25,000.00)
per occurrence.)
14.2 Floor Load--Heavy Machinery. Tenant shall not place a load upon any
floor of the Premises exceeding the floor load per square foot of area which
such floor was designed to carry as set forth in Exhibit 17 to this Lease and
which is allowed by law. Landlord reserves the right to approve the weight of
all business machines and mechanical equipment, including safes, which shall be
placed so as to distribute the weight. Business machines and mechanical
equipment shall be maintained by Tenant at Tenant's expense sufficient in
Landlord's judgment to absorb and prevent vibration, noise and annoyance to
other tenants of the Building. Tenant shall not move any safe, heavy machinery,
heavy equipment, freight, bulky matter, or fixtures into or out of the Building
without Landlord's prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed. If such safe, machinery,
equipment, freight, bulky matter or fixtures requires special handling, Tenant
agrees to employ only persons holding a Master Rigger's License to do said work,
and that all work in connection therewith shall comply with applicable laws and
regulations and the Rules and Regulations as defined in Article 17.1. Any such
moving shall be at the sole risk and hazard of Tenant and Tenant will defend,
indemnify and save Landlord harmless against and from any liability, loss,
injury, claim or suit for personal injury and, subject to Article 19, property
damage resulting from such moving. Proper placement of all such business
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machines, etc., in the Premises shall be Tenant's responsibility. Landlord
agrees that it shall exercise its rights under this Article 14.2 on a reasonable
basis. Tenant's failure to comply with any of the requirements under this
Article 14.2 shall not be a default permitting Landlord to terminate this Lease
under Article 21 but such failure by Tenant shall not limit any other rights or
remedies to which Landlord may be entitled for breach of Tenant's obligations
under this Article 14.2.
15. INSURANCE, INDEMNIFICATION, EXONERATION AND EXCULPATION
15.1 General Liability Insurance. Tenant shall procure, and keep in force
and pay for Commercial General Liability Insurance insuring Tenant on an
occurrence basis against all claims and demands for personal injury liability
(including, without limitation, bodily injury, sickness, disease, and death) or
damage to property which may be claimed to have occurred from and after the time
Tenant and/or its contractors enter the Premises in accordance with Article 4 of
this Lease, of not less than Two Million ($2,000,000) Dollars in the event of
personal injury to any number of persons or damage to property, arising out of
any one occurrence, and from time to time thereafter shall be not less than such
higher amounts, if procurable, as may be reasonably required by Landlord and are
customarily carried by responsible similar tenants in the City or Town wherein
the Building is located. Landlord agrees it shall exercise its right to increase
Tenant's insurance limits no more often than one time every three years. Any
disputes as to increases in insurance limits required by Landlord hereunder
shall be submitted to arbitration within thirty (30) days after Landlord's
notice to Tenant of such increase, failing which, Tenant shall have no right to
dispute such increases.
15.2 Certificates of Insurance. Such insurance shall be effected with
insurers with a Best rating of at least XI, A-, authorized to do business in the
State wherein the Building is situated under valid and enforceable policies
wherein Tenant names Landlord and Landlord's managing agent as additional
insureds. Such insurance shall provide that it shall not be canceled or modified
without at least thirty (30) days' prior written notice to each insured named
therein. On or before the time Tenant and/or its contractors enter the Premises
in accordance with Articles 4 and 14 of this Lease and thereafter not less than
fifteen (15) days prior to the expiration date of each expiring policy, original
copies of the policies provided for in Article 15.1 issued by the respective
insurers, or certificates of such policies setting forth in full the provisions
thereof and issued by such insurers together with evidence satisfactory to
Landlord of the payment of all premiums for such policies, shall be delivered by
Tenant to Landlord and certificates as aforesaid of such policies shall upon
request of Landlord, be delivered by Tenant to the holder of any mortgage
affecting the Premises.
15.3 Tenant Indemnity of Landlord. Subject to Articles 19 and 26, Tenant
will save Landlord, its agents and employees, harmless and will exonerate,
defend and indemnify Landlord, its agents and employees, from and against any
and all claims, liabilities or penalties asserted by or on behalf of any person,
firm, corporation or public authority arising:
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(a) On account of or based upon any injury to person, or loss of or
damage to property, sustained or occurring in the Premises on account of or
based upon the act, omission, fault, negligence or misconduct of any person
whomsoever (except to the extent caused by the willful misconduct or negligence
of Landlord, its agents, contractors or employees);
(b) On account of or based upon any injury to person, or loss of or
damage to property, sustained or occurring elsewhere (other than in the
Premises) in the Complex (and, in particular, without limiting the generality of
the foregoing, on or about the elevators, stairways, public corridors,
sidewalks, concourses, arcades, malls, galleries, vehicular tunnels, approaches,
areaways, roof, or other appurtenances and facilities used in connection with
the Complex, Building or Premises) to the extent caused by the negligence or
willful misconduct of Tenant or those for whom Tenant is legally responsible;
and
(c) On account of or based upon (including monies due on account of)
any suits filed against Landlord or the Building arising from mechanics' liens
which Tenant has failed to pay or bond over in accordance with Article 13(b).
Tenant's obligations under clauses (a) and (b) of this Article 15.3 shall be
insured either under the Commercial General Liability Insurance required under
Article 15.1, above, or by a contractual insurance rider or other coverage; and
certificates of insurance in respect thereof shall be provided by Tenant to
Landlord upon request.
15.4 Property of Tenant. In addition to and not in limitation of the
foregoing, Tenant covenants and agrees that, to the maximum extent permitted by
law, all merchandise, furniture, fixtures and property of every kind, nature and
description related or arising out of Tenant's leasehold estate hereunder, which
may be in or upon the Premises or Building, in the public corridors, or on the
sidewalks, areaways and approaches adjacent thereto, shall be at the sole risk
and hazard of Tenant, and that if the whole or any part thereof shall be
damaged, destroyed, stolen or removed from any cause or reason whatsoever no
part of said damage or loss shall be charged to, or borne by, Landlord; unless,
subject to Article 19 hereof, such damage or loss is due to the negligence or
willful misconduct of Landlord or Landlord's agents, employees, or contractors,
in which case Landlord shall bear such loss or damage.
15.5 Bursting of Pipes, etc. Landlord shall not be liable for any injury or
damage to persons or property resulting from fire, explosion, falling plaster,
steam, gas, electricity, electrical or electronic emanations or disturbance,
water, rain or snow or leaks from any part of the Building or from the pipes,
appliances, equipment or plumbing works or from the roof, street or sub-surface
or from any other place or caused by dampness, vandalism, malicious mischief or
by any other cause of whatever nature, unless caused by or due to the negligence
or willful misconduct of Landlord, its agents, servants or employees, or the
breach by Landlord of its maintenance and repair
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obligations under this Lease. Where Tenant has actual knowledge of such
condition sufficiently in advance of the occurrence of any such injury or damage
resulting therefrom as would have enabled Landlord to prevent such damage or
loss had Tenant notified Landlord of such condition) and Landlord has no actual
knowledge of such condition, then, subject to Article 19, Landlord shall only be
responsible for injury or damage after (i) notice to Landlord of the condition
and (ii) the expiration of a reasonable time after such notice has been received
by Landlord to enable Landlord to take all reasonable and practicable means to
cure or correct such condition. Pending such cure or correction by Landlord,
Tenant shall take all reasonably prudent temporary measures and safeguards to
prevent any injury, loss or damage to persons or property, the reasonable,
out-of-pocket cost of which shall be reimbursed by Landlord within thirty (30)
days of receiving a bill from Tenant therefor, for measures or safeguards taken
by Tenant no earlier than one (1) business day after written notice to Landlord.
Neither Landlord nor its agents shall be liable for any such damage caused by
other tenants or persons in the Building or the Complex (other than Landlord's
agents, employees or contractors) or caused by operations in construction of any
public, or quasi-public work; nor shall Landlord be liable for any latent defect
in the Premises, or the Building, provided that the foregoing shall not relieve
Landlord from any obligation which it has to perform maintenance or repairs in
accordance with the Lease or relieve Landlord of any obligation which it has to
repair any latent defects in Landlord's Work to the extent that Tenant has
complied with the notice requirements of Article 4.8.
15.6 Repairs and Alterations--No Diminution of Rental Value.
(a) Except as otherwise provided in paragraphs (b) and (c) of this
Article 15.6 and as provided in Articles 18 and 20, there shall be no allowance
to Tenant for diminution of rental value and no liability on the part of
Landlord by reason of inconvenience or annoyance to Tenant arising from any
repairs, alterations, additions, replacements or improvements made by Landlord,
Tenant or others in or to any portion of the Complex, Building or Premises or
any property adjoining the Complex, or in or to fixtures, appurtenances, or
equipment thereof, or from failure of Landlord or others to make any repairs,
alterations, additions or improvements in or to any portion of the Complex, the
Building or the Premises, or in or to the fixtures, appurtenances or equipment
thereof.
(b) Notwithstanding anything to the contrary in this Lease contained,
if due to any such repairs, alterations, replacements, or improvements made by
Landlord or if due to Landlord's failure to make any repairs, alterations, or
improvements required to be made by Landlord, or if due to the presence of any
Hazardous Material not introduced or caused by Tenant or anyone for whom Tenant
is legally responsible, any portion of the Premises becomes untenantable so that
for the Premises Untenantability Cure Period, as hereinafter defined, the
continued operation in the ordinary course of Tenant's business is materially
adversely affected, then, provided that Tenant ceases to use the affected
portion of the Premises during the entirety of the Premises Untenantability Cure
Period by reason of such untenantability, and that such untenantability and
Landlord's inability
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to cure such condition is not caused by the fault or neglect of Tenant or
Tenant's agents, employees or contractors, Rent, shall thereafter be abated in
proportion to such untenantability and its impact on Tenant's use of the
Premises and the Parking Areas until the day such condition is completely
corrected.
For the purposes hereof, the "Premises Untenantability Cure Period" shall
be defined as five (5) consecutive business days after Landlord's receipt of
written notice from Tenant of the condition causing such untenantability in the
Premises, provided however, that the Premises Untenantability Cure Period shall
be ten (10) consecutive business days after Landlord's receipt of written notice
from Tenant of such condition causing such untenantability in the Premises if
either the condition was caused by causes beyond Landlord's control or Landlord
is unable to cure such condition as the result of causes beyond Landlord's
control.
(c) Notwithstanding anything to the contrary herein contained, if due
to such repairs, alterations, replacements or improvements made by Landlord or
if due to Landlord's failure to make any repairs, alterations or improvements
required to be made by Landlord, or if due to the presence of any Hazardous
Material not introduced or caused by Tenant or anyone for whom Tenant is legally
responsible, any material portion of the Premises becomes untenantable for a
period of one hundred eighty (180) consecutive days after Landlord's receipt of
written notice of such condition from Tenant, then, provided that Tenant ceases
to use the affected portion of the Premises during the entire period of such
untenantability, such untenantability and Landlord's inability to cure such
condition is not caused by the fault or neglect of Tenant, or Tenant's agents,
employees or contractors, then Tenant may terminate this Lease as to such
portion or all of the Premises by giving Landlord written notice as follows:
(i) Said notice shall be given after said one hundred
eighty (180) day period.
(ii) Said notice shall set forth an effective date which is
not earlier than ten (10) days after Landlord receives said
notice.
(iii) If said condition is remedied on or before said
effective date, said notice shall have no further force and
effect.
(iv) If said condition is not remedied on or before said
effective date for any reason other then Tenant's fault, as
aforesaid, the Lease shall terminate as of said effective date,
and the Yearly Rent, escalations and other charges due under the
Lease shall be apportioned as of said effective date.
(d) The provisions of Paragraphs (b) and (c) of this Article 15.6
shall not apply in the event of untenantability caused by fire or other
casualty, or taking (see Articles 18 and 20).
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15.7 Landlord Indemnity of Tenant. Landlord, subject to the limitations on
Landlord's liability contained elsewhere in this Lease, agrees to hold Tenant
harmless and to defend, exonerate and indemnify Tenant from and against any and
all claims, liabilities, penalties and costs and expenses (including reasonable
attorneys' fees) asserted by or on behalf of any third party (i.e. any person,
firm, corporation or public authority) based upon any injury to persons, or loss
of or damage to property, sustained or occurring in the Complex to the extent
arising from the negligence, or willful misconduct of Landlord or Landlord's
agents, employees or contractors. The provisions of this Article 15.7 shall
survive any termination of the Lease.
16. ASSIGNMENT, MORTGAGE AND SUBLETTING
(a) Except as provided in this Article 16, Tenant covenants and
agrees that neither this Lease nor the term and estate hereby granted, nor any
interest herein or therein, will be assigned, mortgaged, pledged, encumbered or
otherwise transferred, voluntarily, by operation of law or otherwise and that
neither the Premises, nor any part thereof will be encumbered in any manner by
reason of any act or omission on the part of Tenant, or used or occupied, or
permitted to be used or occupied, or utilized for desk space or for mailing
privileges, by anyone other than Tenant, or any employee, agent or invitees of
Tenant, or for any use or purpose other than as stated in Exhibit 1, or be
sublet, or offered or advertised for subletting.
(b) If Tenant is a corporation, the assignment or transfer of this
Lease, and the term and estate hereby granted, to any corporation ("Permitted
Tenant Successor") into which Tenant is merged or with which Tenant is
consolidated, is permitted without Landlord's consent, provided that: (x) such
Permitted Tenant Successor shall have a net worth at least equal to the product
of (i) ten (10) multiplied by (ii) the then current Rent per annum payable by
Tenant and (y) such Permitted Tenant Successor and Tenant shall promptly
execute, acknowledge and deliver to Landlord an agreement ("Assumption
Agreement") in form and substance reasonably satisfactory to Landlord whereby
such Permitted Tenant Successor shall agree to be independently bound by and
upon all the covenants, agreements, terms and provisions and conditions set
forth in this Lease on the part of Tenant to be performed, and whereby such
Permitted Tenant Successor shall expressly agree that the provisions of this
Article 16 shall, notwithstanding such assignment or transfer, continue to be
binding upon it with respect to all future assignments and transfers.
(c) Tenant shall have the right to assign its interest in this Lease,
and sublet the Premises or any portion thereof without Landlord's consent to an
Affiliate of Tenant, as hereinafter defined. For the purposes hereof, an
"Affiliate of Tenant" shall be defined as any entity which controls, is
controlled by, or is under common control with, Tenant, so long as such entity
is not formed for the purposes of circumventing the prohibitions set forth in
this Article 16. Tenant's right to assign its interest in this Lease to an
Affiliate of Tenant shall be further conditioned upon such Affiliate, prior to
such
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assignment, executing and delivering to Landlord an Assumption Agreement, as
defined in Paragraph (b) of this Article 16(b).
(d) The following provisions shall apply to any proposed sublease of
the Premises, or any portion thereof, other than a Protected Sublease (as
defined in Article 16(d)(5)(iii) below), and to any proposed assignment of
Tenant's interest in the Lease, except, however, such provisions shall not apply
to either an assignment or sublease to an Affiliate of Tenant, or an assignment
or transfer of this Lease to a Permitted Tenant Successor:
(1) Tenant shall, prior to offering or advertising the Premises,
or any portion thereof for sublease or assignment, give Landlord a
Recapture Offer, as hereinafter defined.
(2) For the purposes hereof a "Recapture Offer" shall be defined
as notice in writing from Tenant to Landlord which:
(i) States that Tenant desires to sublet the Premises,
or a portion thereof for all or a portion of the then-remaining
term of the Lease, including any extension terms, whether or not
then exercised (provided, however that neither Landlord's
acceptance of a Recapture Offer or Landlord's consent to a
sublease of the Recapture Premises after the Landlord has
rejected a Recapture Offer shall affect the Occupancy Condition
to the exercise of Tenant's extension option rights under
Paragraph 1 of the Rider to the Lease) or to assign its interest
in this Lease.
(ii) In the case of a sublease, identifies the affected
portion of the Premises ("Recapture Premises").
(iii) In the case of a sublease, identifies the period
of time ("Recapture Period") during which Tenant proposes to
sublet the Recaptured Premises.
(iv) Offers to Landlord to terminate the Lease in
respect of the Recapture Premises (in the case of a proposed
assignment of Tenant's interest in the Lease or a subletting for
the remainder of the term of the Lease) or to suspend the term of
the Lease PRO TANTO in respect of the Recapture Period (i.e., the
term of the Lease in respect to the Recapture Premises shall be
terminated during the Recapture Period and Tenant's rental
obligations shall be reduced in proportion to the ratio of the
Total Rentable Area of the Recapture Premises to the Total
Rentable Area of the Premises
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then demised to Tenant).
(3) Landlord shall have sixty (60) days after Landlord's receipt
of a Recapture Offer ("Landlord's Response Period") to accept a
Recapture Offer, and to recapture a pro rata number of Tenant's
parking passes in the On-Site Parking Areas, based on the Total
Rentable Area of the Recapture Premises to the Total Rentable Area of
the then Premises demised by Tenant. In recapturing such parking
passes, Landlord shall recapture from the Tenant's parking passes in
respect of the On-Site Parking Areas first, and then only in the same
proportion for both the Garage and the surface parking areas. After
all parking passes in the On-Site Parking Areas have been recaptured
by Landlord, Landlord shall recapture parking passes in the Off-Site
Parking Areas. Notwithstanding the foregoing, if the Recapture
Premises are one (1) floor or less, then the Landlord's Response
Period shall be thirty (30) days. If Landlord does not timely give
written notice to Tenant accepting a Recapture Offer, then Landlord
agrees that it will not withhold or delay its consent to a sublease of
the Recapture Premises for the Recapture Period, or an assignment of
Tenant's interest in the Lease, as the case may be, to a Qualified
Transferee, as hereinafter defined.
(4) For the purposes of hereof, "Qualified Transferee" shall
mean any person, firm, corporation, partnership or other entity which,
in Landlord's reasonable opinion:
(i) is financially responsible (considering that Tenant
remains liable for the obligations of the party tenant under the
Lease) and is not of bad business reputation (i.e., criminal
activities or the like);
(ii) is not a competitor of another tenant or subtenant in
the Complex (if such tenant has the benefit of an exclusive
agreement in its lease with Landlord), unless such entity is then
a current tenant of the Complex and such leasing does not violate
an exclusive to which Landlord is then subject; and
(iii) is not a tenant or subtenant in the Complex unless (x)
such tenant or subtenant desires to sublease the Recapture
Premises for expansion purposes only; AND (y) such tenant's or
subtenant's occupancy of the Recapture Premises will not cause a
vacancy in the premises which such tenant or subtenant then
occupies in the Complex; AND (z) such tenant's or subtenant's
need, as to the size of premises and length of term, cannot then
(i.e., at the time that Tenant requests
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Landlord's consent to such tenant or subtenant) be satisfied by
Landlord in the Complex.
(5) Notwithstanding anything to the contrary in this Article 16
contained:
(i) If Tenant is in default of its obligations under the
Lease at the time that it makes the aforesaid offer to Landlord,
such default shall be deemed to be a "reasonable" reason for
Landlord withholding its consent to any proposed subletting or
assignment; and
(ii) If Tenant does not enter into a sublease with a
subtenant (or an assignment to an assignee, as the case may be)
approved by Landlord, as aforesaid, on or before the date which
is one hundred eighty (180) days after the earlier of: (x) the
expiration of Landlord's Response Period, or (y) the date that
Landlord notifies Tenant that Landlord will not accept Tenant's
offer to terminate or suspend the Lease, then Landlord shall have
the right arbitrarily to withhold its consent to any subletting
or assignment proposed to be entered into by Tenant after the
expiration of said one hundred eighty (180) day period unless
Tenant again offers, in accordance with this Article 16, either
to terminate or to suspend the Lease in respect of the portion of
the Premises proposed to be sublet (or in respect of the entirety
of the Premises in the event of a proposed assignment, as the
case may be). If Tenant shall make any subsequent offers to
terminate or suspend the Lease pursuant to this Paragraph (d),
any such subsequent offers shall be treated in all respects as if
it is Tenant's first offer to suspend or terminate the Lease
pursuant to this Paragraph (d), provided that the period of time
Landlord shall have in which to accept or reject such subsequent
offer shall be thirty (30) days.
(iii) Notwithstanding the foregoing, Tenant shall have the
right to sublease up to thirty percent (30%), in the aggregate,
of the Premises for a term not in excess of fifty percent (50%)
of the then-remaining term of this Lease (a "Protected Sublease")
without the requirement of giving Landlord a Recapture Notice
with respect thereto. Such Protected Sublease shall, however,
require Landlord's consent, which shall not be unreasonably
withheld, conditioned or delayed for a sublease to a Qualified
Transferee, as defined in Paragraph (4) above.
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(6) Notwithstanding anything to the contrary herein contained,
Tenant shall have no rights under this Paragraph (d) prior to the date
one (1) year after the Rent Commencement Date in respect of the
Portion of the Premises containing the area proposed to be assigned or
sublet, other than in connection with a Permitted Initial Sublease, as
hereinafter defined. Without limiting the foregoing, Tenant shall have
no right to give Landlord a Recapture Offer prior to the date one (1)
year after said Rent Commencement Date. Tenant shall have the right,
however, prior to the date one (1) year after said Rent Commencement
Date, to enter into one or more Permitted Initial Subleases to
Qualified Transferree(s) without providing Landlord with a Recapture
Offer. For the purposes hereof, a Permitted Initial Sublease(s) shall
be a sublease of up to one (1) full floor in the Premises or space of
equivalent size to a Qualified Transferee, the term of which shall not
exceed two (2) years.
(e) The listing of any name other than that of Tenant, as its name
(including any d/b/a's) may change, from time to time, whether on the doors of
the Premises or on the Building directory, or otherwise, shall not operate to
vest in any such other person, firm or corporation any right or interest in this
Lease or in the Premises or be deemed to effect or evidence any consent of
Landlord, it being expressly understood that any such listing is a privilege
extended by Landlord revocable at will by written notice to Tenant.
(f) (i) If this Lease is assigned, Landlord shall, or (ii) if Tenant
is in default of any of its obligations under this Lease beyond the expiration
of any applicable grace periods, and the Premises or any part thereof has been
sublet or occupied by anybody other than Tenant, Landlord may, collect rent and
other charges from the assignee, subtenant or occupant, and apply the net amount
collected to the rent and other charges herein reserved then due and thereafter
becoming due, but no such assignment, subletting, occupancy or collection shall
be deemed a waiver of this covenant, or the acceptance of the assignee,
subtenant or occupant as a tenant, or a release of Tenant from the further
performance by Tenant of covenants on the part of Tenant herein contained.
(g) Any consent by Landlord to a particular assignment or subletting
shall not in any way diminish the prohibition stated in the first sentence of
this Article 16. No subletting or assignment shall relieve Tenant of its primary
obligations as party - Tenant hereunder, nor shall it reduce or increase
Landlord's obligations under the Lease.
(h) No assignment or subletting or use of the Premises by an
Affiliate of Tenant shall affect the purpose for which the Premises may be used
as stated in Exhibit 1.
(i) In the event of an assignment of this Lease to anyone other than
an Affiliate of Tenant or Permitted Tenant Successor, Tenant shall pay to
Landlord twenty-five percent (25%) percent of any Net Sublease Profits (as
defined below), payable in accordance with the following. In the case of an
assignment of this Lease, "Net Sublease
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Profit": (1) shall be defined as a lump sum in the amount (if any) by which any
consideration paid by the assignee in consideration of or as an inducement to
Tenant to make said assignment exceeds the reasonable attorneys' fee,
construction costs and brokerage fees incurred by Tenant in order to effect such
assignment (collectively, "Sublease Expenses"), and (2) shall be paid to
Landlord within ten (10) days of receipt of the same by Tenant. In the case of a
sublease, "Net Sublease Profit": (3) shall be defined as a monthly amount equal
to the amount by which the sublease rent and other charges payable by the
subtenant to Tenant under the sublease exceed the sum of the rent and other
charges payable under this Lease for the Premises or the sublet portion thereof,
plus a monthly payment equal to the Sublease Expenses divided by the number of
months in the term of the sublease, and (4) shall be payable on a monthly basis
within ten (10) days of receipt of the subtenant's payment of rent to Tenant
under the sublease.
17. MISCELLANEOUS COVENANTS
Landlord and Tenant, as the case may be, each covenants and agrees as
follows:
17.1 Rules and Regulations. Tenant will faithfully observe and comply with
the Rules and Regulations annexed hereto as Exhibit 8, and such other and
further reasonable Rules and Regulations as Landlord hereafter at any time or
from time to time may make and for which Landlord provides at least five (5)
business days prior notice in writing to Tenant (referred to collectively herein
as "Rules and Regulations"), which in the reasonable judgment of Landlord shall
be necessary for the reputation, safety, care or appearance of the Building
and/or the Complex, or the preservation of good order therein, or the operation
or maintenance of the Building and/or the Complex, or the equipment thereof, or
the comfort of tenants or others in the Complex, provided, however, that in the
case of any conflict between the provisions of this Lease and any such Rules and
Regulations, the provisions of this Lease shall control, and provided further
that nothing contained in this Lease shall be construed to impose upon Landlord
any duty or obligation to enforce the Rules and Regulations or the terms,
covenants or conditions in any other lease as against any other tenant and
Landlord shall not be liable to Tenant for violation of the same by any other
tenant, its servants, employees, agents, contractors, visitors, invitees or
licensees. All Rules and Regulations shall be of general applicability to, and
non-discriminatorily applied against, all comparable tenants in the Complex.
17.2 Access to Premises--Shoring. Subject to Article 10, Tenant shall: (i)
permit Landlord to erect, use and maintain pipes, ducts and conduits in and
through the Premises, provided the same do not materially reduce the floor area,
materially adversely affect the appearance thereof, or materially adversely
affect Tenant's use of the Premises; (ii) permit Landlord and any mortgagee of
the Building and/or the Complex or of the interest of Landlord therein, and any
lessor under any ground or underlying lease, and their representatives, to have
access to and to enter upon the Premises at all reasonable hours for the
purposes of inspection or of making repairs, replacements or improvements in or
to the Premises, the Building and/or the Complex or equipment (including,
without limitation, sanitary, electrical, heating, air conditioning or other
systems) or of complying
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with all laws, orders and requirements of governmental or other authority or of
exercising any right reserved to Landlord by this Lease (including the right
during the progress of any such repairs, replacements or improvements or while
performing work and furnishing materials in connection with compliance with any
such laws, orders or requirements to take upon or through, or to keep and store
within, the Premises all necessary materials, tools and equipment); and (iii)
permit Landlord, at reasonable times, to show the Premises during ordinary
business hours to any existing or prospective mortgagee, ground lessor,
purchaser, or assignee of any mortgage, of the Building and/or the Complex and
the land or of the interest of Landlord therein, and during the period of 12
months next preceding the Termination Date to any person contemplating the
leasing of the Premises or any part thereof. If, during the last month of the
term, Tenant shall have removed all or substantially all of Tenant's property
therefrom, Landlord may immediately enter (at its own risk and without the
benefit of any indemnity from Tenant hereunder) and alter, renovate and
redecorate the Premises, and Tenant shall be entitled to an abatement of Rent
from the date of such entry for the remainder of the term, but otherwise without
incurring liability to Tenant for any compensation, and such acts shall
otherwise have no effect upon this Lease. In an emergency, if Tenant shall not
be personally present to open and permit an entry into the Premises, Landlord or
Landlord's agents may enter the same by a master key, or may forcibly enter the
same, without rendering Landlord or such agents liable therefor (if during such
entry Landlord or Landlord's agents shall accord reasonable care to Tenant's
property), and without in any manner affecting the obligations and covenants of
this Lease. Landlord shall exercise its rights of access to the Premises
permitted under any of the terms and provisions of this Lease, including,
without limitation, Article 10, in such manner as to minimize to the extent
practicable interference with Tenant's use and occupation of the Premises. If an
excavation shall be made upon land adjacent to the Premises or shall be
authorized to be made, Tenant shall afford to the person causing or authorized
to cause such excavation, license to enter upon the Premises for the purpose of
doing such work as said person shall deem necessary to preserve the Building
from injury or damage and to support the same by proper foundations without any
claims for damages or indemnity against Landlord, or diminution or abatement of
rent (subject, however, to the provisions of Articles 8.8, 15.4, 15.5, and 15.6
of this Lease).
17.3 Accidents to Sanitary and Other Systems. Tenant shall give to Landlord
prompt notice of any fire or casualty in the Premises or in the Building and of
any damage to, or defective condition in, any part or appurtenance of the
Building including, without limitation, sanitary, electrical, heating and air
conditioning or other systems located in, or passing through, the Premises for
which it has actual knowledge. Tenant shall not be required to give Landlord
notice of accidents which are covered by Workers Compensation laws. Subject to
the provisions of Articles 8.8, 15.4, 15.5, and 15.6 of this Lease, Tenant shall
not be entitled to claim any eviction from the Premises or any damages arising
from any such damage or defect unless the same (i) shall have been occasioned by
the negligence of the Landlord, its agents, servants or employees and (ii) shall
not, after notice to Landlord of the condition claimed to constitute negligence,
have been cured or corrected within a reasonable time after such notice has been
received by
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Landlord; and in case of a claim of eviction unless such damage or defective
condition shall have rendered the Premises untenantable and they shall not have
been made tenantable by Landlord within a reasonable time.
17.4 Signs, Blinds and Drapes.
Except as provided in Exhibit 10, Tenant shall put no signs in any part of
the Building or the Complex. No signs may be put on or in any window or
elsewhere if visible from the exterior of the Building. Tenant may hang its own
drapes or blinds, provided that they shall not in any way interfere with the
building standard drapery or blinds or be visible from the exterior of the
Building and that such drapes are so hung and installed that when drawn, the
Building standard drapery or blinds are automatically also drawn. Tenant's
failure to comply with the provisions of this Article 17.4 shall not be a
default permitting Landlord to terminate the Lease under Article 21 but such
failure by Tenant shall not limit any other rights or remedies to which Landlord
may be entitled for breach of Tenant's obligations under this Article 17.4.
17.5 Estoppel Certificate. Each party ("Responding Party") shall at any
time and from time to time upon not less than ten (10) days' prior notice from
the other party ("Requesting Party"), execute, acknowledge and deliver to the
Requesting Party a statement in writing certifying that this Lease is unmodified
and in full force and effect (or if there have been modifications, that the same
is in full force and effect as modified and stating the modifications), and the
dates to which the Yearly Rent and other charges have been paid in advance, if
any, stating whether or not the Requesting Party is in default in performance of
any covenant, agreement, term, provision or condition contained in this Lease
and, if so, specifying each such default and such other facts as the Requesting
Party may reasonably request, it being intended that any such statement
delivered pursuant hereto may be relied upon by any prospective purchaser of the
Building or of the Building and the land or of any interest of Landlord therein,
any mortgagee or prospective mortgagee thereof, any lessor or prospective lessor
thereof, any lessee or prospective lessee thereof, or any prospective assignee
of any mortgage thereof, or any prospective subtenant or assignee.
17.6 Prohibited Materials and Property. Tenant shall not bring or permit to
be brought or kept in or on the Premises or elsewhere in the Building or the
Complex any unique, unusually valuable, rare or exotic property, work of art or
the like unless the same is fully insured under all-risk coverage nor shall
Tenant cause or permit any odors of cooking or other processes, or any unusual
or other objectionable odors to emanate from or permeate the Premises, provided
however, that a breach by Tenant of any of the covenants contained in this
sentence shall not be deemed to be a default permitting Landlord to terminate
the Lease under Article 21 but such breach by Tenant shall not limit any other
rights or remedies to which Landlord may be entitled for breach of Tenant's
obligations under this Article 17.6.
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17.7 Requirements of Law--Fines and Penalties.
(a) Subject to the provisions of this Article 17.7, Tenant at its sole
expense shall comply with all laws, rules, orders and regulations, including,
without limitation, all energy-related requirements, of federal, state, county
and municipal authorities and with any direction of any public officer or
officers, pursuant to law (collectively "Laws"), which shall impose any duty
upon Landlord or Tenant with respect to or arising out of Tenant's particular
use or occupancy of the Premises. If Tenant receives notice of any violation of
law, ordinance, order or regulation applicable to the Premises, it shall give
prompt notice thereof to Landlord.
(b) Landlord, subject to inclusion of the cost of compliance as Operating
Costs in accordance with the provisions of Article 9.1(g) of this Lease, shall
comply with (i) all Laws which relate to the structure of the Building, unless
the need for such compliance arises from Tenant's particular use of the
Premises, and (ii) all other Laws applicable to the Complex other than those
Laws for which Tenant is responsible pursuant to Article 17.7(a) above.
(c) Landlord shall comply with the Americans with Disabilities Act of
1990, and the rules and regulations promulgated thereunder ("ADA") so far as
they relate to the On-Site Parking Areas and other common areas of the Building
and of the Complex and any Base Building Work within the Premises (e.g.,
bathrooms). Operating Costs shall not include any costs incurred by Landlord in
order to bring the On-Site Parking Areas and other common areas of the Building,
the Complex, or other buildings in the Complex and any Base Building Work within
the Premises into compliance with the ADA, as amended through the Rent
Commencement Date (including any regulations promulgated through the Rent
Commencement Date). Tenant shall comply with the ADA within the Premises (other
than any compliance which is the responsibility of Landlord, as aforesaid) and
in connection with the performance of any alterations, additions, or
improvements which Tenant makes in the Premises.
17.8 Tenant's Acts--Effect on Insurance. Tenant shall not knowingly do or
permit to be done any act or thing upon the Premises and Tenant shall not do any
act or thing elsewhere in the Building or the Complex, which Tenant actually
knows will invalidate or be in conflict with any insurance policies covering the
Building, the Complex and the fixtures and property therein; and shall not do,
or permit to be done, any act or thing upon the Premises which shall subject
Landlord to any liability or responsibility for injury to any person or persons
or to property by reason of any business or operation being carried on upon said
Premises or for any other reason. Tenant at its own expense shall comply with
all rules, orders, regulations and requirements of the Board of Fire
Underwriters, or any other similar body having jurisdiction, and shall not (i)
do, or permit anything to be done, in or upon the Premises, or bring or keep
anything therein, except as now or hereafter permitted by the Fire Department,
Board of Underwriters, Fire Insurance Rating Organization, or other authority
having jurisdiction, and then only in such quantity and manner of storage as
will not increase the rate for any
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insurance applicable to the Building and/or the Complex, or (ii) use the
Premises in a manner which shall increase such insurance rates on the Building,
the Complex or on property located therein, over that applicable when Tenant
first took occupancy of the Premises hereunder, unless Tenant reimburses
Landlord for that part of any insurance premiums thereafter paid by Landlord in
excess of the premium amount that would otherwise be in effect but for such acts
or sufferance by Tenant. Notwithstanding anything to the contrary herein
contained, Landlord hereby acknowledges that the use of the Premises for the
permitted use, as opposed to the manner of use, shall not be deemed to violate
the provisions of this Article 17.8.
17.9 Miscellaneous. Subject to the provisions of Article 12, Tenant shall
not suffer or permit the Premises or any Landlord fixtures, equipment or
utilities therein or serving the same, to be overloaded, damaged or defaced, nor
permit any hole to be drilled or made in any part thereof. Tenant shall not
suffer or permit any employee, contractor, business invitee or visitor to
violate any covenant, agreement or obligations of the Tenant under this Lease.
18. DAMAGE BY FIRE, ETC.
18.1 Casualty Insurance. During the entire term of this Lease, and
adjusting insurance coverages to reflect current values from time to time: (i)
Landlord shall keep the Building, including all work which Landlord or Tenant
initially installs in the Premises pursuant to Article 4 and including any
improvements made by Tenant after the initial Rent Commencement Date (Tenant
hereby agreeing to reimburse Landlord for any additional increase in premiums
incurred by Landlord on account of any improvements made by Tenant after the
initial Rent Commencement Date which are in excess of the quality of the initial
buildout of the Premises) insured against loss or damage caused by any peril
covered under fire, extended coverage and all risk insurance with coverage
against vandalism, malicious mischief and such other insurable hazards and
contingencies as are from time to time normally insured against by owners of
first-class multi-tenant office buildings in the Market Area or which are
required by Landlord's mortgagee, in an amount equal to one hundred percent
(100%) of the full replacement cost thereof above foundation walls; and (ii)
Tenant shall keep its personal property in and about the Premises and any other
property installed by or at the expense of Tenant insured against loss or damage
caused by any peril covered under fire, extended coverage and all risk insurance
in an amount equal to one hundred percent (100%) of the full replacement cost
thereof. Such Tenant's insurance shall insure the interests of both Landlord and
Tenant as their respective interests may appear from time to time and shall name
Landlord as an additional insured; and, if neither party exercises its right to
terminate the Lease under this Article 18, the proceeds thereof shall be used
only for the replacement or restoration of such personal property.
18.2 Repair of Damage Caused by Casualty. If any portion of the Premises
required to be insured by Landlord under Article 18.1 shall be damaged by fire
or other insured casualty, Landlord shall proceed with diligence, subject to the
then applicable
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statutes, building codes, zoning ordinances, and regulations of any governmental
authority, and at the expense of Landlord (but only to the extent of insurance
proceeds made available to Landlord by any mortgagee and/or ground lessor of the
real property of which the Premises are a part) to repair or cause to be
repaired such damage, provided however, that all repairs to and replacements of
Tenant's personal property shall be made by and at the expense of Tenant. If the
Premises or any part thereof shall have been rendered unfit for the Tenant's use
as contemplated hereunder by reason of such damage the Rent or a just and
proportionate part thereof, according to the nature and extent to which the
Premises shall have been so rendered unfit, shall be suspended or abated until
the date which is the earlier of: (x) the date the Premises (except as to the
personal property which is to be repaired by or at the expense of Tenant) shall
have been restored as nearly as practicably may be to the condition in which
they were immediately prior to such fire or other casualty, or (y) the date that
Tenant first recommences its use and occupancy of the Premises or any portion
thereof (Landlord agreeing that it shall reasonably cooperate with any request
by Tenant for a phased re-occupancy and that Rent shall only resume on a
floor-by-floor basis during such phased re-occupancy, provided however, that
nothing in this parenthetical shall affect the provisions of clause (x) of this
sentence). Tenant agrees to cooperate with Landlord and Landlord's Mortgagee in
such manner as Landlord may reasonably request in assisting Landlord and
Landlord's Mortgagee in collecting insurance proceeds (including rent insurance
proceeds) due in connection with any casualty affecting the Premises. Landlord
shall not be liable for delays in the making of any such repairs which are due
to government regulation, casualties and strikes, unavailability of labor and
materials, and other causes beyond the reasonable control of Landlord (financial
inability shall not be deemed to constitute causes beyond Landlord's reasonable
control), nor shall Landlord be liable for any inconvenience or annoyance to
Tenant or injury to the business of Tenant resulting from delays in repairing
such damage.
18.3 Landlord's Termination Rights. Landlord shall use reasonable efforts
to cause Landlord's mortgagee to make sufficient proceeds available to Landlord
to repair such damage. If despite using such reasonable efforts, Landlord will
not receive sufficient insurance proceeds to repair such damage, Landlord shall
use reasonable efforts to obtain alternative financing for the difference
between the amount of proceeds which Landlord will receive and the estimated
cost of such repairs. If despite such efforts, Landlord is unable to obtain such
financing within ninety (90) days after the date of such casualty, Landlord
shall have no further obligation to obtain such financing. If (i) the Premises
are so damaged by fire or other casualty (whether or not insured) at any time
during the last eighteen (18) months of the term hereof and the estimated time
to complete such repairs or restoration exceeds three (3) months, or (ii) the
Building is so damaged by fire or other casualty (whether or not insured) that
substantial alteration or reconstruction or demolition of the Building shall in
Landlord's good faith judgment be required, then and in either of such events,
this Lease and the term hereof may be terminated at the election of Landlord by
a notice in writing of its election so to terminate which shall be given by
Landlord to Tenant within thirty (30) days following such fire or other
casualty, the effective termination date of which shall be the earlier of (x)
the
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Termination Date of the Lease or (y) the date that demolition of the
Building first commences. Notwithstanding the foregoing, Landlord shall have no
right to terminate this Lease pursuant to clause (ii) hereof unless Landlord
simultaneously terminates the leases of all other tenants in the Building who
are similarly situated and razes the Building.
18.4 Tenant's Termination Rights.
(a) TERMINATION BASED UPON SUFFICIENCY OF INSURANCE PROCEEDS.
If all or any portion of the Premises shall be damaged or destroyed by fire
or other casualty to the extent that the operation of Tenant's business in the
Premises in the normal course is materially adversely affected, then, within
ninety (90) days of such fire or other casualty, Landlord shall provide to
Tenant a statement of whether or not Landlord will receive sufficient proceeds
from insurance, or funds from alternative financing, to repair such damage. If
Landlord in good faith advises Tenant in such notice that Landlord will not
receive sufficient proceeds, or funds from alternative financing, to repair such
damage, Tenant may elect, by a notice sent within thirty (30) days after such
notice is received by Tenant, to terminate this Lease. If Landlord in good faith
advises Tenant in such notice that Landlord will receive sufficient proceeds, or
funds from alternative financing, to repair such damage, Tenant shall have no
such right to terminate and Landlord shall, subject to the provisions of this
Article 18, proceed with due diligence and promptness to complete the repairs or
restoration.
(b) TERMINATION BASED UPON ESTIMATED RESTORATION PERIOD.
If all or any portion of the Premises shall be damaged or destroyed by fire
or other casualty to the extent that the operation of Tenant's business in the
Premises in the normal course is materially adversely affected, then, within
ninety (90) days of such fire or other casualty, Landlord shall submit to Tenant
a reasonable engineering estimate as to the estimated length of time required to
complete such repairs. If the time period ("Estimated Restoration Period") set
forth in such estimate shall exceed one hundred eighty (180) days ("Outside
Restoration Period") from the date of such casualty, Tenant may elect, by a
notice sent within thirty (30) days after notice of such estimate is received by
Tenant, to terminate this Lease. If such estimate shall fall within said one
hundred eighty (180) day limit, Tenant shall have no such right to terminate and
Landlord shall, subject to the provisions of this Article 18, proceed with due
diligence and promptness to complete the repairs or restoration within such one
hundred eighty (180) day period. Notwithstanding the foregoing, if the casualty
occurs during the last year of the term of the Lease, the Outside Restoration
Period shall be sixty (60) days from the date of the casualty.
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(c) TERMINATION BASED UPON ACTUAL RESTORATION PERIOD.
If all or any portion of the Premises is damaged by fire or other casualty
to such an extent that the operation of Tenant's business in the Premises in the
normal course is materially adversely affected, and Tenant does not terminate
this Lease pursuant to this Article 18 and if Landlord shall fail to
substantially complete the restoration work on or before the date (the
"Restoration Deadline Date") which is the later of: (1) the end of the Estimated
Restoration Period or (2) one hundred ninety-five (195) days after the date of
such fire or other casualty, (except that if the casualty occurs during the last
year of the term of the Lease, said one hundred ninety-five (195) day period
shall be sixty (60) days, and except that, in the event that Landlord is
prevented from completing such restoration by reason of causes beyond Landlord's
reasonable control, (the parties agreeing that financial inability shall not
constitute a cause beyond Landlord's reasonable control) such one hundred
ninety-five (195) day period shall be extended for an additional forty-five (45)
days) for any reason other than Tenant's fault, Tenant may terminate this Lease
by giving Landlord written notice as follows:
(i) Said notice shall be given after the Restoration Deadline
Date.
(ii) Said notice shall set forth an effective date which is not
earlier than thirty (30) days after Landlord receives said
notice.
(iii) If the restoration work is substantially complete within
thirty (30) days (which thirty-(30)-day period shall be extended
by the length of any delays caused by Tenant or Tenant's
contractors) after Landlord receives such notice, said notice
shall have no further force and effect.
(iv) If the restoration work is not substantially complete on or
before the date thirty (30) days (which thirty-(30)-day period
shall be extended by the length of any delays caused by Tenant or
Tenant's contractors) after Landlord receives such notice, the
Lease shall terminate as of said effective date.
18.5 General Provisions Relating to Any Casualty Termination.
In the event of any termination, this Lease and the term hereof shall
expire as of such effective termination date as though that were the Termination
Date as stated in Exhibit 1 and Rent and other charges payable under this Lease
shall be apportioned as of such date; and if the Premises or any part thereof
shall have been rendered unfit for use and occupation by reason of such damage
Rent and other charges under this Lease for the period from the date of the fire
or other casualty to the effective termination date, or a just and proportionate
part thereof according to the nature and extent to which the Premises shall have
been so rendered unfit, shall be abated.
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18.6 If Landlord exercises its right to terminate the Lease pursuant to
Article 18.3 or if Tenant shall terminate the Lease pursuant to Article 18.4,
and Landlord commences the restoration of the Building within two (2) years of
the date this Lease was terminated, Landlord shall give written notice of such
fact to Tenant, and Tenant shall have sixty (60) days after receipt thereof to
elect whether to take a new lease of the Premises commencing on completion of
such restoration for a term equal to the balance of the term remaining under the
Lease at its termination. All other terms and conditions of the new lease shall
be on the same terms and conditions as this Lease.
19. WAIVER OF SUBROGATION
(a) In any case in which Tenant shall be obligated to pay to Landlord any
loss, cost, damage, liability, or expense suffered or incurred by Landlord,
Landlord shall allow to Tenant as an offset against the amount thereof the
greater of (i) the net proceeds of any insurance collected by Landlord for or on
account of such loss, cost, damage, liability or expense, provided that the
allowance of such offset does not invalidate or prejudice the policy or policies
under which such proceeds were payable, or (ii) the amount of any loss, cost,
damage, liability or expense caused by a peril which could be covered by fire
insurance with the broadest form of property insurance generally available on
property in buildings of the type of the Building, whether or not actually
procured by Landlord.
(b) In any case in which Landlord or Landlord's managing agent shall be
obligated to pay to Tenant any loss, cost, damage, liability or expense suffered
or incurred by Tenant, Tenant shall allow to Landlord or Landlord's managing
agent, as the case may be, as an offset against the amount thereof the greater
of (i) the net proceeds of any insurance collected by Tenant for or on account
of such loss, cost, damage, liability, or expense, provided that the allowance
of such offset does not invalidate or prejudice the policy or policies under
which such proceeds were payable or (ii) the amount of any loss, cost, damage,
liability or expense caused by a peril which could be covered by fire insurance
with the broadest form of property insurance generally available on property in
buildings of the type of the Building, whether or not actually procured by
Tenant.
(c) The parties hereto shall each procure an appropriate clause in, or
endorsement on, any property insurance policy covering the Premises and the
Complex and personal property, fixtures and equipment located thereon and
therein, pursuant to which the insurance companies waive subrogation or consent
to a waiver of right of recovery in favor of either party, its respective agents
or employees. Each party shall, upon the written request of the other party,
provide to such party a certificate or other evidence setting forth such waiver
of subrogation. Each party hereby agrees that it will not make any claim against
or seek to recover from the other or its agents or employees for any loss or
damage to its property or the property of others resulting from fire or other
perils covered by such property insurance.
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20. CONDEMNATION - EMINENT DOMAIN
20.1 Landlord's Termination Rights. In the event that the Premises or any
part thereof, or the whole or any material part of the Building, shall be taken
or appropriated by eminent domain or shall be condemned for any public or
quasi-public use, or (by virtue of any such taking, appropriation or
condemnation) shall suffer any damage (direct, indirect or consequential) for
which Landlord or Tenant shall be entitled to compensation, so that, in
Landlord's bona fide business judgment, the continued operation of the Complex
shall be rendered uneconomic or non-operational, then (and in any such event)
this Lease and the term hereof may be terminated at the election of Landlord by
a notice in writing of its election to so terminate which shall be given by
Landlord to Tenant within sixty (60) days following the date on which Landlord
shall have received notice of such taking, appropriation or condemnation. Such
termination shall be effective in accordance with Article 20.3. Notwithstanding
the foregoing, it shall be a condition to Landlord's right to terminate the term
of the Lease pursuant to this Article 20 that Landlord shall terminate the
leases of all other tenants in the Building and that Landlord shall raze the
Building. If the Premises are not damaged by a taking, and if Landlord elects to
terminate the term of the Lease pursuant to this Article 20, Tenant shall have
the right to extend the effective termination date to a date designated by
Tenant which is not later than the actual commencement of demolition of the
Building or the Termination Date. Tenant may exercise such right by giving
Landlord written notice of such election within thirty (30) days of Tenant's
receipt of Landlord's notice, and by providing Landlord with documentation
(e.g., agreement for judgment in a summary process action) satisfactory to
Landlord, assuring Landlord that Tenant will vacate the Premises prior to the
commencement of demolition of the Building.
20.2 Tenant's Termination Rights. In the event that a material part of the
Premises, the means of access thereto, or a portion of the Parking Areas so that
Tenant, as a result, has the use of less than two-thirds (2/3rds) of the monthly
parking passes to which Tenant is then entitled under the Lease ("Condemnation
Parking Limit"), shall be taken or appropriated by eminent domain or shall be
condemned for any public or quasi-public use, or (by virtue of any such taking,
appropriation or condemnation) shall suffer any damage (direct, indirect or
consequential) for which Landlord or Tenant shall be entitled to compensation,
so that, in Tenant's bona fide business judgment, the continued operation of
Tenant's business in the Premises is materially adversely affected, then (and in
any such event) this Lease and the term hereof may be terminated at the election
of Tenant by a notice in writing of its election to so terminate which shall be
given by Tenant to Landlord within sixty (60) days following the date on which
Tenant shall have received notice of such taking, appropriation or condemnation.
Such termination shall be effective in accordance with Article 20.3.
Notwithstanding the foregoing, if the basis of the exercise by Tenant of its
termination right pursuant to this Article 20.2 is a taking of either access or
the Parking Areas, Landlord may nullify such termination if, within sixty (60)
days following receipt by Landlord of Tenant's termination notice, Landlord
provides Tenant with substitute access, or Parking Areas sufficient to provide
Tenant with access and/or the use of at least the Condemnation Parking Limit as
the case may be,
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which are reasonably acceptable to Tenant and such alternative access or parking
shall remain available for the balance of the term of this Lease (including all
extension periods whether or not then exercised). Landlord shall be obligated to
provide such alternative access and/or parking during the term of this Lease for
so long as such taking lasts, failure of which shall entitle Tenant to terminate
this Lease pursuant to this Article 20.2.
20.3 General Taking Provisions. Upon the giving of any notice of
termination (either by Landlord or Tenant, subject however, to the last sentence
of Article 20.2), this Lease and the term hereof shall terminate on or
retroactively as of the date on which Tenant shall be required to vacate any
part of the Premises or shall be deprived of a substantial part of the means of
access thereto or a portion of the Parking Areas shall be taken so that Tenant
has the use of less than the Condemnation Parking Limit. In the event of any
such termination, this Lease and the term hereof shall expire as of such
effective termination date as though that were the Termination Date as stated in
Exhibit 1, and the Rent shall be apportioned as of such date. If neither party
(having the right so to do) elects to terminate, Landlord will, with reasonable
diligence and at Landlord's expense, restore the remainder of the Premises, or
the remainder of the means of access, to as nearly as practicably may be to the
same condition as they were immediately prior to such taking, appropriation or
condemnation in which event (i) the Total Rentable Area shall be adjusted, (ii)
a just proportion of the Rent according to the nature and extent of the taking,
appropriation or condemnation and the resulting permanent injury to the Premises
and the means of access thereto, shall be permanently abated, and (iii) a just
proportion of the remainder of Rent, according to the nature and extent of the
taking, appropriation or condemnation and the resultant injury sustained by the
Premises and the means of access thereto, shall be abated until what remains of
the Premises and the means of access thereto shall have been restored as fully
as may be for permanent use and occupation by Tenant hereunder.
20.4 Taking Proceeds. Except for any award specifically reimbursing Tenant
for moving, business interruption or relocation expenses, there are expressly
reserved to Landlord all rights to compensation and damages created, accrued or
accruing by reason of any such taking, appropriation or condemnation, in
implementation and in confirmation of which Tenant does hereby acknowledge that
Landlord shall be entitled to receive all such compensation and damages, grant
to Landlord all and whatever rights (if any) Tenant may have to such
compensation and damages, and agree to execute and deliver all and whatever
further instruments of assignment as Landlord may from time to time request.
20.5 Temporary Takings. In the event of any taking of the Premises or any
part thereof for temporary use (i.e. not in excess of one hundred eighty days):
(i) this Lease shall be and remain unaffected thereby, and (ii) Tenant shall be
entitled to receive for itself any award made for such use, provided that if any
taking is for a period extending beyond the term of this Lease, such award shall
be apportioned between Landlord and Tenant as of the Termination Date or earlier
termination of this Lease.
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21. DEFAULT
21.1 Conditions of Limitation - Re-entry - Termination. This Lease and the
herein term and estate are upon the condition that if (a) subject to Article
21.7, Tenant shall neglect or fail to perform or observe any of the Tenant's
covenants or agreements herein, including (without limitation) the covenants or
agreements with regard to the payment when due of Rent, additional charges,
reimbursement for increase in Landlord's costs, or any other charge payable by
Tenant to Landlord in accordance with the provisions of this Lease (all of which
shall be considered as part of Rent for the purposes of invoking Landlord's
statutory or other rights and remedies in respect of payment defaults); or (b)
Tenant shall be involved in financial difficulties as evidenced by an admission
in writing by Tenant of Tenant's inability to pay its debts generally as they
become due, or by the making or offering to make a composition of its debts with
its creditors; or (c) Tenant shall make an assignment or trust mortgage, or
other conveyance or transfer of like nature, of all or a substantial part of its
property for the benefit of its creditors, or (d) the leasehold hereby created
shall be taken on execution or by other process of law and shall not be revested
in Tenant within sixty (60) days thereafter; or (e) a receiver, sequesterer,
trustee or similar officer shall be appointed by a court of competent
jurisdiction to take charge of all or any part of Tenant's property and such
appointment shall not be vacated within one hundred twenty (120) days; or (f)
any proceeding shall be instituted by or against Tenant pursuant to any of the
provisions of any Act of Congress or State law relating to bankruptcy,
reorganizations, arrangements, compositions or other relief from creditors, and,
in the case of any proceeding instituted against it, if Tenant shall fail to
have such proceedings dismissed within one hundred twenty (120) days or if
Tenant is adjudged bankrupt or insolvent as a result of any such proceeding, or
(g) any event shall occur or any contingency shall arise whereby this Lease, or
the term and estate thereby created, would (by operation of law or otherwise)
devolve upon or pass to any person, firm or corporation other than Tenant,
except as expressly permitted under Article 16 hereof - then, and in any such
event (except as hereinafter in Article 21.2 otherwise provided) Landlord may,
by notice to Tenant, elect to terminate this Lease; and thereupon (and without
prejudice to any remedies which might otherwise be available for arrears of rent
or other charges due hereunder or preceding breach of covenant or agreement and
without prejudice to Tenant's liability for damages as hereinafter stated), upon
the giving of such notice, this Lease shall terminate as of the date specified
therein as though that were the Termination Date as stated in Exhibit 1. Without
being taken or deemed to be guilty of any manner of trespass or conversion, and
without being liable to indictment, prosecution or damages therefor, Landlord
may, forcibly if necessary, enter into and upon the Premises (or any part
thereof in the name of the whole); repossess the same as of its former estate;
and expel Tenant and those claiming under Tenant. The words "re-entry" and
"re-enter" as used in this Lease are not restricted to their technical legal
meanings.
21.2 Damages - Assignment for Benefit of Creditors. For the more effectual
securing to Landlord of the rent and other charges and payments reserved
hereunder, it is agreed as a further condition of this Lease that if at any time
Tenant shall make any
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transfer similar to or in the nature of an assignment of its property for the
benefit of its creditors, the term and estate hereby created shall terminate
ipso facto, without entry or other action by Landlord; and notwithstanding any
other provisions of this Lease, Landlord shall forthwith upon such termination,
without prejudice to any remedies which might otherwise be available for arrears
of rent or other charges due hereunder or preceding breach of this Lease, be
ipso facto entitled to recover as liquidated damages the sum of (a) the amount
described in clause (x) of Article 21.3 and (b) (in view of the uncertainty of
prompt re-letting and the expense entailed in re-letting the Premises) an amount
equal to the rent and other charges payable for and in respect of the
twelve-(12)-month period next preceding the date of termination, as aforesaid.
21.3 Damages - Termination.
(a) Upon the termination of this Lease under the provisions of this
Article 21, then except as hereinabove in Article 21.2 otherwise provided,
Tenant shall pay to Landlord the Rent and other charges payable by Tenant to
Landlord up to the time of such termination, shall continue to be liable for any
preceding breach of covenant, and in addition, shall pay to Landlord as damages,
at the election of Landlord, which election shall be made within six (6) months
after such termination
either:
(x) the amount (discounted to present value) by which, at the time of
the termination of this Lease, (i) the aggregate of the Rent and other
charges that would have been payable by Tenant under this Lease had this
Lease not been so terminated projected over the period commencing with such
termination and ending on the Termination Date as stated in Exhibit 1
exceeds (ii) the aggregate fair market rental value of the Premises for
such period;
or:
(y) amounts equal to the Rent and other charges which would have been
payable by Tenant under this Lease had this Lease not been so terminated,
payable upon the due dates therefor specified herein following such
termination and until the Termination Date as specified in Exhibit 1,
provided, however, that if Landlord shall re-let the Premises during such
period, Landlord shall credit Tenant with the net rents received by
Landlord from such re-letting, such net rents to be determined by first
deducting from the gross rents as and when received by Landlord from such
re-letting the out-of-pocket expenses incurred or paid by Landlord in good
faith in terminating this Lease, as well as the out-of-pocket expenses of
re-letting, including altering and preparing the Premises for new tenants,
brokers' commissions, and all other similar and dissimilar expenses
properly chargeable against the Premises and the rental therefrom, it being
understood that any such re-letting may be for a period equal to or shorter
or longer than the remaining term of this Lease; and provided, further,
that (i) in no
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event shall Tenant be entitled to receive any excess of such net rents over
the sums payable by Tenant to Landlord hereunder and (ii) in no event shall
Tenant be entitled, in any suit for the collection of damages pursuant to
this Subparagraph (y), to a credit in respect of any net rents from a
re-letting except to the extent that such net rents are actually received
by Landlord with respect to the period on which the judgment obtained by
Landlord in such suit is based. If the Premises or any part thereof should
be re-let in combination with other space, then proper apportionment on a
square foot area basis shall be made of the rent received from such
re-letting and of the expenses of re-letting.
In calculating the Rent and other charges under Subparagraph (x), above, there
shall be included, in addition to the Rent, all other considerations agreed to
be paid or performed by Tenant hereunder, on the assumption that all such
amounts and considerations would have remained constant (except as herein
otherwise provided) for the balance of the full term hereby granted.
(b) Suit or suits for the recovery of such damages, or any installments
thereof, may be brought by Landlord from time to time at its election, and
nothing contained herein shall be deemed to require Landlord to postpone suit
until the date when the term of this Lease would have expired if it had not been
terminated hereunder.
(c) Nothing herein contained shall be construed as limiting or precluding
the recovery by Landlord against Tenant of any sums or damages to which, in
addition to the damages particularly provided above, Landlord may lawfully be
entitled by reason of any default hereunder on the part of Tenant.
(d) Landlord agrees to use reasonable efforts to relet the Premises after
Tenant vacates the Premises in the event that the Lease is terminated based upon
a default by Tenant hereunder. Marketing of Tenant's Premises in a manner
similar to the manner in which Landlord markets other premises within Landlord's
control in the Complex shall be deemed to have satisfied Landlord's obligation
to use "reasonable efforts." In no event shall Landlord be required to (i)
solicit or entertain negotiations with any other prospective tenants for the
Premises until Landlord obtains full and complete possession of the Premises
including, without limitation, the final and unappealable legal right to re-let
the Premises free of any claim of Tenant, (ii) lease the Premises to a tenant
whose proposed use, in Landlord's sole but bona fide judgment, will cause an
unacceptable mix of uses in the Complex, (iii) relet the Premises before leasing
other vacant space in the Complex or (iv) lease the Premises for a rental less
than the current fair market rental then prevailing for similar space in the
Complex.
21.4 Fees and Expenses.
(a) Landlord's Self Help. If Tenant shall default in the performance of
any covenant on Tenant's part to be performed as in this Lease contained,
Landlord may, subject to Article 21.7, except that Landlord shall not be
required to provide notice and an
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opportunity to cure in emergency situations, perform the same for the account of
Tenant. If Landlord at any time is compelled to pay, or elects pursuant to this
Subparagraph 21.4(a), to pay, any sum of money, or do any act which will require
the payment of any sum of money, by reason of the failure of Tenant to comply
with any provision hereof, or if Landlord is compelled to or does incur any
expense, including reasonable attorneys' fees, in instituting, prosecuting,
and/or defending any action or proceeding instituted by reason of any default of
Tenant hereunder, Tenant shall on demand pay to Landlord by way of reimbursement
the sum or sums reasonably paid by Landlord with all costs and damages, plus (if
applicable) interest computed as provided in Article 6 hereof.
(b) Attorneys' Fees. In the event of any litigation or other legal
proceeding (e.g. arbitration) between Landlord and Tenant relating to the
provisions of this Lease or Tenant's occupancy of the Premises, the losing party
shall, upon demand, reimburse the prevailing party for its reasonable costs of
prosecuting and/or defending such proceeding (including, without limitation,
reasonable attorneys fees), provided however, that with respect to arbitration,
the losing party shall only be obligated to reimburse the prevailing party for
attorneys' fees if such fees are awarded by the arbitrator(s).
21.5 Waiver of Redemption. Intentionally Omitted.
21.6 Remedies Not Exclusive. Unless otherwise specified in this Lease, the
specified remedies to which either party may resort hereunder are cumulative and
are not intended to be exclusive of any remedies or means of redress to which
either party may at any time be lawfully entitled, and either party may invoke
any remedy (including the remedy of specific performance) allowed at law or in
equity as if specific remedies were not herein provided for.
21.7 Grace Period. Notwithstanding anything to the contrary in this Lease
contained, Landlord agrees not to take any action to terminate this Lease and
Tenant shall not be deemed to be in default under this Lease, and, except for
Landlord's self-help rights in emergencies, as set forth in Article 21.4,
Landlord shall not exercise any other remedies under this Lease (a) for default
by Tenant in the payment when due of any sum of money, if Tenant shall cure such
default within ten (10) days after written notice thereof is given by Landlord
to Tenant, provided, however, that no such notice need be given and no such
default in the payment of money shall be curable if on two (2) prior occasions
in the same twelve (12) month period, there had been a default in the payment of
money which had been cured after notice thereof had been given by Landlord to
Tenant as herein provided or (b) for default by Tenant in the performance of any
covenant other than a covenant to pay a sum of money, if Tenant shall cure such
default within a period of thirty (30) days after written notice thereof given
by Landlord to Tenant, or within such additional period as may reasonably be
required to cure such default if (because of governmental restrictions or any
other cause beyond the reasonable control of Tenant) the default is of such a
nature that it cannot be cured within such thirty-(30)-day period, provided,
however, (1) that there shall be no extension of time beyond such
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thirty-(30)-day period for the curing of any such non-monetary default unless,
not more than thirty (30) days after the receipt of the notice of default,
Tenant in writing (i) shall specify the cause on account of which the default
cannot be cured during such period and shall advise Landlord of its intention
duly to institute all steps necessary to cure the default and (ii) shall, as
soon as reasonably practicable, duly institute and thereafter diligently
prosecute to completion all steps necessary to cure such default and, (2) that
no notice of the opportunity to cure a non-monetary default need be given, and
no grace period whatsoever shall be allowed to Tenant, if the condition on which
Landlord seeks to terminate this Lease is based upon subdivisions (b), (c), (d),
(e), (f) or (g) of Article 21.1.
21.8 Tenant's Self-Help. If a Landlord Default, as hereinafter defined,
shall occur, Tenant may, without the need of Landlord's consent, if Landlord
fails to cure such Landlord Default within the Landlord Cure Period, as
hereinafter defined, perform the same for the account of Landlord. Landlord
shall, within thirty (30) days of demand therefor, reimburse Tenant the sums so
paid by Tenant in curing such Landlord Default. However, in no event shall
Tenant have the right to offset against, withhold or deduct from Rent or
additional Rent payable under this Lease for any reason relating to this Article
21.8, except as expressly hereinafter provided. If (i) Landlord fails to
reimburse Tenant for the sums paid by Tenant within thirty (30) days of Tenant's
demand therefor, and (ii) if Tenant obtains a judgment against Landlord in
connection with such breach by Landlord, which judgment is final, and beyond
appeal, and (iii) if Landlord fails to pay Tenant such sums within thirty (30)
days after Tenant obtains such judgment, then Tenant shall have the right to
offset the amount of such sums paid by Tenant against Rent. For the purposes of
this Article 21.8, a "Landlord Default" shall be defined as a failure by
Landlord to perform Landlord's obligation to clean the Premises pursuant to
Article 8.3 and/or to perform any of Landlord's service, maintenance or repair
obligations under the Lease. Notwithstanding the foregoing, Tenant shall not
exercise its self help rights provided in this Article 21.8 if the Landlord
Default relates to maintenance and repair obligations, the cure or performance
of which would adversely affect any other tenant in the Building or the Complex
in other than a de minimis way, unless such Landlord Default either (i) is
material to Tenant's use of the Premises and/or the common areas of the Building
or the Complex, or (ii) relates to the Building and Tenant is then in occupancy
of at least 120,000 square feet of Total Rentable Area in the Building. For the
purposes of this Article 21.8, the "Landlord Cure Period" shall be defined as
follows:
(1) In the event of an emergency threatening life or property, or
Tenant's interest in this Lease, three (3) days after receipt by
Landlord of written notice from Tenant of such default;
(2) In the event of any other Landlord Default, thirty (30) days
after receipt by Landlord of written notice from Tenant of such
Landlord Default. Notwithstanding the foregoing, in the event that
Landlord has commenced to cure such Landlord Default within said
thirty (30) day period, and so long as Landlord thereafter diligently
prosecutes such cure
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to completion, the thirty (30) day period shall be extended to such
period of time as Landlord reasonably requires to cure such default.
22. END OF TERM - ABANDONED PROPERTY
(a) Upon the expiration or other termination of the term of this Lease,
Tenant shall peaceably quit and surrender to Landlord the Premises and all
alterations and additions thereto, in the condition in which Tenant is required
to repair and maintain the Premises pursuant to Article 14. Subject to Article
12, Tenant shall remove all of its property and, to the extent specified by
Landlord, all alterations and additions made by Tenant and all partitions wholly
within the Premises, and shall repair any damages to the Premises, the Complex
or the Building caused by their installation or by such removal. Tenant's
obligation to observe or perform this covenant shall survive the expiration or
other termination of the term of this Lease.
(b) Tenant will remove any personal property from the Building, the
Complex and the Premises upon or prior to the expiration or termination of this
Lease and any such property which shall remain in the Building, the Complex or
the Premises ten (10) days or more after written notice thereof from Landlord
shall be conclusively deemed to have been abandoned, and may either be retained
by Landlord as its property or sold or otherwise disposed of in such manner as
Landlord may see fit. If any part thereof shall be sold, that Landlord may
receive and retain the proceeds of such sale and apply the same, at its option,
against the expenses of the sale, the cost of moving and storage, any arrears of
Yearly Rent, additional or other charges payable hereunder by Tenant to Landlord
and any damages to which Landlord may be entitled under Article 21 hereof or
pursuant to law.
(c) If Tenant or anyone claiming under Tenant shall remain in possession
of the Premises or any part thereof after the expiration or prior termination of
the term of this Lease without any agreement in writing between Landlord and
Tenant with respect thereto, then, prior to the acceptance of any payments for
rent or use and occupancy by Landlord, the person remaining in possession shall
be deemed a tenant-at-sufferance. Whereas the parties hereby acknowledge that
Landlord may need the Premises after the expiration or prior termination of the
term of the Lease for other tenants and that the damages which Landlord may
suffer as the result of Tenant's holding-over cannot be determined as of the
Execution Date hereof, in the event that Tenant so holds over, Tenant shall pay
to Landlord in addition to all rental and other charges due and accrued under
the Lease prior to the date of termination, charges (based upon fair market
rental value of the Premises) for use and occupation of the Premises thereafter
and, in addition to such sums and any and all other rights and remedies which
Landlord may have at law or in equity, an additional use and occupancy charge in
the amount of fifty percent (50%) of either the Yearly Rent and other charges
calculated (on a daily basis) at the highest rate payable under the terms of
this Lease, but measured from the later of (x) the day that Landlord gives
Tenant written notice that such charges will commence and (y) the day on which
Tenant's hold-over commenced, and terminating on the day on which Tenant
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vacates the Premises or the fair market value of the Premises for such period,
whichever is greater. In addition, if such holdover continues for sixty (60)
days or more, following the date Tenant receives written notice from Landlord
that it has entered into a lease or leases ("New Leases") with new tenants for
the Premises or any portion thereof to commence at any time following such
60-day period, Tenant shall indemnify, defend and hold Landlord harmless from
and against any loss, cost or damages (including, without limitation reasonable
attorneys' fees) which Landlord may actually suffer
23. SUBORDINATION
(a) Subject to the last sentence of this Article 23(a), and subject to any
mortgagee's or ground lessor's election, as hereinafter provided for, this Lease
is subject and subordinate in all respects to all matters of record (including,
without limitation, deeds and land disposition agreements) and all mortgages,
any of which may now or hereafter be placed on or affect such leases and/or the
real property of which the Premises are a part, or any part of such real
property, and/or Landlord's interest or estate therein, and to each advance made
and/or hereafter to be made under any such mortgages, and to all renewals,
modifications, consolidations, replacements and extensions thereof and all
substitutions therefor. This Article 23 shall be self-operative and no further
instrument or subordination shall be required. In confirmation of such
subordination, Tenant shall execute, acknowledge and deliver promptly any
certificate or instrument that Landlord and/or any mortgagee and/or their
respective successors in interest may reasonably request. Notwithstanding
anything to the contrary in this Article 23 contained, as to any future
mortgages, ground leases, and/or underlying lease or deeds of trust, the herein
provided subordination and attornment shall be effective only if the mortgagee
agrees, by a written Nondisturbance, Subordination, and Attornment Agreement
("Nondisturbance Agreement") in the customary form of such mortgagee, with such
revisions as Tenant may reasonably request that it will, in foreclosing against
(or in accepting a deed in lieu of foreclosure) or taking possession of the
Building, the Complex, or any part thereof, or in otherwise exercising its
rights under such mortgage, be bound by, and will not disturb Tenant's
possession of the Premises or any rights under, this Lease. Landlord hereby
represents to Tenant that, as of the Execution Date of this Lease, there is no
mortgage affecting the Premises, the Building, other buildings in the Complex or
the Garage.
(b) Any such mortgagee or ground lessor may from time to time subordinate
or revoke any such subordination of the mortgage or ground lease held by it to
this Lease. Such subordination or revocation, as the case may be, shall be
effected by written notice to Tenant and by recording an instrument of
subordination or of such revocation, as the case may be, with the appropriate
registry of deeds or land records and to be effective without any further act or
deed on the part of Tenant. In confirmation of such subordination or of such
revocation, as the case may be, Tenant shall execute, acknowledge and promptly
deliver any certificate or instrument that Landlord, any mortgagee or ground
lessor may reasonably request.
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(c) Without limitation of any of the provisions of this Lease, if any
ground lessor or mortgagee shall succeed to the interest of Landlord by reason
of the exercise of its rights under such ground lease or mortgage (or the
acceptance of voluntary conveyance in lieu thereof) or any third party
(including, without limitation, any foreclosure purchaser or mortgage receiver)
shall succeed to such interest by reason of any such exercise or the expiration
or sooner termination of such ground lease, however caused, then such successor
shall succeed to the interest of Landlord under this Lease, provided, however,
that such successor shall not: (i) be liable for any previous act or omission of
Landlord under this Lease; (ii) be subject to any offset, defense, or
counterclaim which shall theretofore have accrued to Tenant against Landlord;
(iii) have any obligation with respect to any security deposit unless it shall
have been paid over or physically delivered to such successor; or (iv) be bound
by any previous modification of this Lease or by any previous payment of Yearly
Rent for a period greater than one (1) month, made without such ground lessor's
or mortgagee's consent where such consent is required by applicable ground lease
or mortgage documents. In the event of such succession to the interest of the
Landlord -- and notwithstanding that any such mortgage or ground lease may
antedate this Lease -- the Tenant shall attorn to such successor and shall ipso
facto be and become bound directly to such successor in interest to Landlord to
perform and observe all the Tenant's obligations under this Lease without the
necessity of the execution of any further instrument. Nevertheless, Tenant
agrees at any time and from time to time during the term hereof to execute a
suitable instrument in confirmation of Tenant's agreement to attorn, as
aforesaid, subject to Landlord's, mortgagee's and ground lessor's right to do so
for, on behalf and in the name of Tenant under certain circumstances, as
hereinafter provided.
(d) The term "mortgage(s)" as used in this Lease shall include any
mortgage or deed of trust. The term "mortgagee(s)" as used in this Lease shall
include any mortgagee or any trustee and beneficiary under a deed of trust or
receiver appointed under a mortgage or deed of trust. The term "mortgagor(s)" as
used in this Lease shall include any mortgagor or any grantor under a deed of
trust.
(e) Tenant agrees to send to any mortgagee (ground lessor and/or trustee)
of which Tenant shall have been previously advised in writing ("Mortgagee") a
copy of any notice of default given to Landlord at the same time as such notice
is given to Landlord prior to claiming an abatement of rent or a right to
terminate the Lease. Tenant further agrees that if Landlord shall have failed to
cure such default within the time provided for in this Lease, then Mortgagee
shall have the reasonable additional periods of time to cure such default before
Tenant is entitled to exercise its rights under the Lease
24. QUIET ENJOYMENT
Landlord covenants that if Tenant is not in default hereunder, Tenant shall
quietly enjoy the Premises and its appurtenant rights without disturbance from
and against the claims of all persons claiming by, through or under Landlord
subject, nevertheless, to the covenants, agreements, terms, provisions and
conditions of this Lease. Landlord hereby
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represents to Tenant that, as of the Execution Date of this Lease, Landlord has
the power and authority to enter into this Lease.
25. ENTIRE AGREEMENT -- WAIVER -- SURRENDER
25.1 Entire Agreement. This Lease and the Exhibits made a part hereof
contain the entire and only agreement between the parties with respect to the
Premises, the Building and the Complex, and any and all statements and
representations, written and oral, including previous correspondence and
agreements between the parties hereto, are merged herein. Tenant acknowledges
that all representations and statements upon which it relied in executing this
Lease are contained herein and that the Tenant in no way relied upon any other
statements or representations, written or oral. Any executory agreement
hereafter made shall be ineffective to change, modify, discharge or effect an
abandonment of this Lease in whole or in part unless such executory agreement is
in writing and signed by the party against whom enforcement of the change,
modification, discharge or abandonment is sought.
25.2 Waiver. The failure of either party to seek redress for violation, or
to insist upon the strict performance, of any covenant or condition of this
Lease, or any of the Rules and Regulations promulgated hereunder, shall not
prevent a subsequent act, which would have originally constituted a violation,
from having all the force and effect of an original violation. The receipt by
Landlord of Rent with knowledge of the breach of any covenant of this Lease
shall not be deemed a waiver of such breach. The failure of Landlord to enforce
any of such Rules and Regulations against Tenant and/or any other tenant in the
Complex shall not be deemed a waiver of any such Rules and Regulations. No
provisions of this Lease shall be deemed to have been waived by either unless
such waiver be in writing signed by Landlord. No payment by Tenant or receipt by
Landlord of a lesser amount than the monthly Rent herein stipulated shall be
deemed to be other than on account of the stipulated rent, nor shall any
endorsement or statement on any check or any letter accompanying any check or
payment as Rent be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord's right to recover the
balance of such rent or pursue any other remedy in this Lease provided.
25.3 Surrender. No act or thing done by Landlord during the term hereby
demised shall be deemed an acceptance of a surrender of the Premises, and no
agreement to accept such surrender shall be valid, unless in writing signed by
Landlord. No employee of Landlord or of Landlord's agents shall have any power
to accept the keys of the Premises prior to the termination of this Lease. The
delivery of keys to any employee of Landlord or of Landlord's agents shall not
operate as a termination of the Lease or a surrender of the Premises. In the
event that Tenant at any time desires to have Landlord underlet the Premises for
Tenant's account, Landlord or Landlord's agents are authorized to receive the
keys for such purposes without releasing Tenant from any of the obligations
under this Lease, and Tenant hereby relieves Landlord of any liability for loss
of or damage to any of Tenant's effects in connection with such underletting.
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26. INABILITY TO PERFORM - EXCULPATORY CLAUSE
Except as expressly provided in this Lease, this Lease and the obligations
of Tenant to pay Rent hereunder and perform all the other covenants, agreements,
terms, provisions and conditions hereunder on the part of Tenant or Landlord to
be performed shall in no way be affected, impaired or excused because the other
party is unable to fulfill any of its obligations under this Lease or is unable
to supply or is delayed in supplying any service expressly or impliedly to be
supplied or is unable to make or is delayed in making any repairs, replacements,
additions, alterations, improvements or decorations or is unable to supply or is
delayed in supplying any equipment or fixtures if such party is prevented or
delayed from so doing by reason of strikes or labor troubles or any other cause
whatsoever beyond such party's control, including but not limited to,
governmental preemption in connection with a national emergency or by reason of
any rule, order or regulation of any department or subdivision thereof of any
governmental agency or by reason of the conditions of supply and demand which
have been or are affected by war, hostilities or other emergency. Financial
inability shall not be considered a cause beyond either party's reasonable
control excusing such party's performance hereunder. In each such instance of
inability of Landlord or Tenant to perform, such party shall exercise reasonable
diligence to eliminate the cause of such inability to perform. Nothing contained
in this Article 26 shall excuse the payment of Rent by Tenant under the Lease.
Tenant shall neither assert nor seek to enforce any claim against Landlord,
or Landlord's agents or employees, or the assets of Landlord or of Landlord's
agents or employees, for breach of this Lease or otherwise, other than against
Landlord's interest in the Complex and in the uncollected rents, issues and
profits thereof, and Tenant agrees to look solely to such interest for the
satisfaction of any liability of Landlord under this Lease, it being
specifically agreed that in no event shall Landlord or Landlord's agents or
employees (or any of the officers, trustees, directors, partners, beneficiaries,
joint venturers, members, stockholders or other principals or representatives,
and the like, disclosed or undisclosed, thereof) ever be personally liable for
any such liability. This paragraph shall not limit any right that Tenant might
otherwise have to obtain injunctive relief against Landlord or to take any other
action which shall not involve the personal liability of Landlord to respond in
monetary damages from Landlord's assets other than the Landlord's interest in
said real estate, as aforesaid.
In no event shall Landlord or Landlord's agents or employees (or any of the
officers, trustees, directors, partners, beneficiaries, joint venturers,
members, stockholders or other principals or representatives and the like,
disclosed or undisclosed, thereof) ever be liable for indirect or incidental
damages or for lost profits. Notwithstanding anything to the contrary in the
Lease contained, except for Landlord's right to recover damages in accordance
with Article 22(c), neither Tenant nor Tenant's agents or employees (or any of
the officers, trustees, directors, partners, beneficiaries, joint venturers,
members, stockholders or other principals or representatives and the like,
disclosed or undisclosed,
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thereof) shall be liable to Landlord for indirect or incidental damages, or lost
profits of Landlord.
27. BILLS AND NOTICES
Any notice, consent, request, bill, demand or statement hereunder by either
party to the other party shall be in writing and, if received at Landlord's or
Tenant's address, shall be deemed to have been duly given when either delivered,
served personally, sent by recognized overnight courier service, or mailed in a
postpaid envelope, deposited in the United States mail (except that in the case
of mailing, where a time period commences under this Lease, upon the giving of
notice, such notice shall be deemed given when postal records indicate that
delivery by the postal service was either made or first attempted) addressed to
Landlord at its address as stated in Exhibit 1 and to Tenant at the Premises (or
at Tenant's address as stated in Exhibit 1, if mailed prior to Tenant's
occupancy of the Premises), or if any address for notices shall have been duly
changed as hereinafter provided, if mailed as aforesaid to the party at such
changed address. Either party may at any time change the address or specify an
additional address, provided that at least one address for each party or
authorized individual is available during business hours to accept deliveries,
for such notices, consents, requests, bills, demands or statements by delivering
or mailing, as aforesaid, to the other party a notice stating the change and
setting forth the changed or additional address, provided such changed or
additional address is within the United States.
If Tenant's interest in the Lease is assigned to a partnership, Tenant, for
itself, and on behalf of all of its partners, shall appoint a partner of Tenant
as Tenant's Service Partner, to accept service of any notice, consent, request,
bill, demand or statement hereunder by Landlord and any service of process in
any judicial proceeding with respect to this Lease on behalf of Tenant and as
agent and attorney-in-fact for each partner of Tenant.
All bills and statements for reimbursement or other payments or charges due
from Tenant to Landlord hereunder shall be due and payable in full thirty (30)
days from receipt of the same by Tenant, unless herein otherwise provided.
Tenant's failure to make timely payment of any amounts indicated by such bills
and statements, whether for work done by Landlord at Tenant's request,
reimbursement provided for by this Lease or for any other sums properly owing by
Tenant to Landlord, shall be treated as a default in the payment of rent, in
which event Landlord shall have all rights and remedies provided in this Lease
for the nonpayment of rent.
28. PARTIES BOUND -- SEISIN OF TITLE
The covenants, agreements, terms, provisions and conditions of this Lease
shall bind and benefit the successors and assigns of the parties hereto with the
same effect as if mentioned in each instance where a party hereto is named or
referred to, except that no violation of the provisions of Article 16 hereof
shall operate to vest any rights in any
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successor or assignee of Tenant and that the provisions of this Article 28 shall
not be construed as modifying the conditions of limitation contained in Article
21 hereof.
If, in connection with or as a consequence of the sale, transfer or other
disposition of the real estate (land and/or Building, either or both, as the
case may be) of which the Premises are a part, Landlord ceases to be the owner
of the reversionary interest in the Premises, Landlord shall be entirely freed
and relieved from the performance and observance thereafter of all covenants and
obligations hereunder on the part of Landlord thereafter to be performed and
observed, it being understood and agreed in such event (and it shall be deemed
and construed as a covenant running with the land) that the person succeeding to
Landlord's ownership of said reversionary interest shall thereupon assume, and
perform and observe, any and all of such covenants and obligations of Landlord.
29. MISCELLANEOUS
29.1 Separability. If any provision of this Lease or portion of such
provision or the application thereof to any person or circumstance is for any
reason held invalid or unenforceable, the remainder of the Lease (or the
remainder of such provision) and the application thereof to other persons or
circumstances shall not be affected thereby.
29.2 Captions, etc. The captions are inserted only as a matter of
convenience and for reference, and in no way define, limit or describe the scope
of this Lease nor the intent of any provisions thereof. References to "State"
shall mean, where appropriate, the District of Columbia and other Federal
territories, possessions, as well as a state of the United States.
29.3 Broker.
(a) Tenant represents and warrants that it has not directly or indirectly
dealt, with respect to the leasing of space in the Building or the Complex
(called "Building, etc." in this Article 29.3) with any broker or had its
attention called to the Premises or other space to let in the Building, etc. by
anyone other than the brokers, persons, or firms designated in Exhibit 1. Tenant
agrees to defend, exonerate and save harmless and indemnify Landlord and anyone
claiming by, through or under Landlord against any claims for a commission
arising in breach of the representation and warranty set forth in the
immediately preceding sentence.
(b) Landlord shall be solely responsible for the payment of brokerage
commissions to the broker, person or firm, if any, designated in Exhibit 1.
Landlord represents and warrants that, in connection with the execution and
delivery of the Lease, it has not directly or indirectly dealt with any broker
other than the brokers designated on Exhibit 1. Landlord agrees to defend,
exonerate, save harmless, and indemnify Tenant and anyone claiming by, through,
or under Tenant against any claims arising in breach of the representation and
warranty set forth in the immediately preceding sentence.
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29.4 Modifications. Intentionally Omitted.
29.5 Arbitration. Any disputes relating to (i) provisions or obligations in
this Lease as to which a specific provision for a reference to arbitration is
made herein, (ii) matters for which the Tenant and/or Landlord have agreed to
treat each other reasonably, (iii) matters for which Landlord and/or Tenant may
not unreasonably withhold consent, judgment, approval or other action, and (iv)
Articles 4, 15.6, 18 and 20 of the Lease shall be submitted to arbitration in
accordance with the provisions of applicable state law (as identified on Exhibit
1), as from time to time amended. Arbitration proceedings, including the
selection of an arbitrator, shall be conducted pursuant to the rules,
regulations and procedures from time to time in effect as promulgated by the
American Arbitration Association. Prior written notice of application by either
party for arbitration shall be given to the other at least ten (10) days before
submission of the application to the said Association's office in the City of
Boston. The arbitrator shall hear the parties and their evidence. The decision
of the arbitrator shall be binding and conclusive, and judgment upon the award
or decision of the arbitrator may be entered in the appropriate court of law (as
identified on Exhibit 1); and the parties consent to the jurisdiction of such
court and further agree that any process or notice of motion or other
application to the Court or a Judge thereof may be served outside the State
wherein the Building is situated by registered mail or by personal service,
provided a reasonable time for appearance is allowed. The costs and expenses of
each arbitration hereunder and their apportionment between the parties shall be
determined by the arbitrator in his award or decision. No arbitrable dispute
shall be deemed to have arisen under this Lease prior to (i) the expiration of
the period of twenty (20) days after the date of the giving of written notice by
the party asserting the existence of the dispute together with a description
thereof sufficient for an understanding thereof; and (ii) where a Tenant payment
(e.g., Tax Excess or Operating Expense Excess under Article 9 hereof) is in
issue, the amount billed by Landlord having been paid by Tenant.
29.6 Governing Law. This Lease is made pursuant to, and shall be governed
by, and construed in accordance with, the laws of the Commonwealth of
Massachusetts and any applicable local municipal rules, regulations, by-laws,
ordinances and the like.
29.7 Assignment of Rents. With reference to any assignment by Landlord of
its interest in this Lease, or the rents payable hereunder, conditional in
nature or otherwise, which assignment is made to or held by a bank, trust
company, insurance company or other institutional lender holding a mortgage or
ground lease on the Building, Tenant agrees:
(a) that the execution thereof by Landlord and the acceptance thereof
by such mortgagee and/or ground lessor shall never be deemed an assumption by
such mortgagee and/or ground lessor of any of the obligations of the Landlord
thereunder, unless such mortgagee and/or ground lessor shall, by written notice
sent to the Tenant, specifically otherwise elect; and
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(b) that, except as aforesaid, such mortgagee and/or ground lessor
shall be treated as having assumed the Landlord's obligations thereunder only
upon foreclosure of such mortgagee's mortgage or deed of trust or termination of
such ground lessor's ground lease or the taking of possession of the Premises by
such mortgagee or ground lessor.
29.8 Representation of Authority. By his or her execution hereof each of
the signatories on behalf of the respective parties hereby warrants and
represents to the other that he or she is duly authorized to execute this Lease
on behalf of such party.
29.9 Expenses Incurred by Landlord Upon Tenant Requests. Tenant shall, upon
demand, reimburse Landlord for all reasonable out-of-pocket third party
expenses, including, without limitation, legal fees, incurred by Landlord in
connection with the review and approval of Tenant's plans and specifications in
connection with proposed alterations to be made by Tenant to the Premises after
the initial Rent Commencement Date and requests by Tenant to sublet the Premises
or assign its interest in the Lease (provided that such costs in connection with
requests for subletting or assignment shall not exceed the Maximum Consent
Charge, as hereinafter defined, per request, provided that Tenant does not
request any changes to Landlord's standard forms of consent, which forms are
attached hereto as Exhibits 21 and 22). For the purposes hereof, the "Maximum
Consent Charge" as of the Rent Commencement Date shall be $750.00 and shall be
increased by $250.00 every five (5) years during the term of the Lease. Such
costs shall be deemed to be additional rent under the Lease.
29.10 Survival. Without limiting any other obligation of Tenant or Landlord
which may survive the expiration or prior termination of the term of the Lease,
all obligations on the part of each party to indemnify, defend, or hold the
other party harmless, as set forth in this Lease shall survive the expiration or
prior termination of the term of the Lease.
29.11 Rule of Interpretation. Wherever the provision "Notwithstanding
anything to the contrary herein contained" is used in the Lease such term shall
be deemed to mean "Notwithstanding anything to the contrary in the Lease
contained."
29.12 Consumer Price Index. For the purposes of Article 2.3, the "Consumer
Price Index" shall mean the Consumer Price Index for All Urban Consumers (CPI-U)
(Revised), Boston, Massachusetts All Items - Series A (1982-84=100) as published
by the United States Bureau of Labor Statistics; and the percentage increase
therein shall be calculated on the basis of the Index figure for the reporting
date next prior to the Rent Commencement Date in respect of Portion 2-6 and
prior to each anniversary of the Rent Commencement Date, during the term of the
Lease.
It is the purpose and intent of the parties, by these adjustment
provisions, to maintain the purchasing power of the aforesaid Parking Rent
throughout the term of this Lease by means of periodic adjustments; and further,
that such adjustments be measured
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and determined by reference to the Consumer Price Index in effect, and generally
as it is calculated, computed, and constituted on the Rent Commencement Date.
Such adjustments shall be made as of each such anniversary during the term of
this Lease so that the purchasing power of the Parking Rent as of each
anniversary of the Rent Commencement Date during the term of the Lease shall in
no event be less than the purchasing power of the Parking Rent as of the
immediately preceding anniversary of the Rent Commencement Date. Accordingly,
for example, if the compilation and/or publication of such Index shall be
discontinued or transferred to any other governmental department or bureau or
agency, Landlord shall fix by written notice to Tenant ("CPI Change Notice") an
alternate index or method to compute such change in the Parking Rent so as to
reflect the parties' intention as aforesaid. Likewise, if such Index shall be
modified as to components, computing methods or otherwise, Landlord may fix by
CPI Change Notice an alternate index or method, as aforesaid, or Landlord may
utilize an appropriate conversion factor so as to achieve substantially the same
result as would have been obtained if the Consumer Price Index in effect and as
computed, calculated and constituted on the Rent Commencement Date were still
then in effect. Any CPI Change Notice shall be conclusive and binding upon
Tenant unless, within thirty (30) days of Tenant's receipt of such CPI Change
Notice, Tenant gives a written notice to Landlord setting forth Tenant's
objections to said Notice. Any dispute as to a CPI Change Notice shall be
submitted to arbitration in accordance with Article 29.5.
Within a reasonable time after obtaining the appropriate data necessary to
calculate the increase (if any) in the Parking Rent pursuant to the foregoing,
Landlord shall give Tenant notice thereof; and if such notice shall not be given
by the anniversary of the Rent Commencement Date in question, Tenant shall
continue to pay the Parking Rent that was payable during the immediately
preceding period, and the accrued deficiency (if any) shall be due and payable
with the monthly installment of Parking Rent next following thirty (30) days
after such notice.
IN WITNESS WHEREOF the parties hereto have executed this Indenture of Lease
in multiple copies, each to be considered an original hereof, as a sealed
instrument on the day and year noted in Exhibit 1 as the Execution Date.
LANDLORD: TENANT:
TECHNOLOGY SQUARE LLC, FORRESTER RESEARCH, INC.,
a Delaware limited liability company a Delaware corporation
By: Beacon Capital Partners L.P.,
a Delaware limited partnership
d/b/a Beacon Capital Partners
Limited Partnership, its manager
By: Beacon Capital Partners, Inc., a
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Maryland corporation, its general
partner
By: _____________________ By: _______________________
Name: ___________________ Name: _____________________
Title: __________________ Title: ____________________
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EXHIBIT 4
---------
BASE BUILDING WORK
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EXHIBIT 4A
----------
PLANS AND RESPONSE SCHEDULE
<TABLE>
<CAPTION>
DATE ACTION REQUIRED
---- ---------------
<S> <C>
May 4, 1999: Landlord submits list of subcontractors to Tenant
May 7, 1999: Final 100% construction documents submitted to Landlord.
May 10, 1999: Tenant responds to Landlord's list of subcontractors with
approvals, disapprovals and additions
Three (3) business days after the
date that Landlord provides Tenant
with the GMP and the subcontractor
bids and appropriate analysis: Tenant approves GMP, selects subcontractors in each trade
from prequalified list, and authorizes Landlord in writing
to proceed with the Tenant Improvement Work.
</TABLE>
In addition to the schedule set forth above, Tenant shall respond, within two
(2) business days, to any request for approval from Landlord or Landlord's
contractor in connection with Landlord's Work, provided however, that Tenant
shall have three (3) business days to respond to proposed specification
substitutions, and to approvals based upon unforeseen conditions.
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EXHIBIT 5
---------
BUILDING SERVICES
A. General Cleaning (Monday through Friday)
1. All stone, ceramic, tile, marble, terrazzo and other unwaxed flooring
to be swept nightly, using approved dust-down preparation.
2. All wood, linoleum, vinyl-asbestos, vinyl and other similar types of
floors to be swept or dry mopped nightly, using dust-down preparation;
all carpeting and rugs in the main traffic areas (corridors, reception
areas, etc.) to be vacuumed nightly and all other carpeted areas to be
vacuumed at least once each week.
3. Wax all public areas monthly.
4. Hand dust all furniture, files and fixtures nightly.
5. Empty all waste receptacles nightly and remove waste paper and waste
materials, including folded paper boxes and cartons, to a designated
area.
6. Empty and clean all ash trays and screen all sand urns nightly.
7. Wash and clean all water fountains and coolers nightly. Sinks and
floors adjacent to sinks to be washed nightly.
8. Hand dust all door and other ventilating louvers within reach, as
necessary, but not less often than monthly.
9. Dust all telephones as necessary.
10. Keep lockers and janitor sink rooms in a neat, orderly condition at
all times.
11. Wipe clean all bright metal work as necessary.
12. Check all stairwells throughout entire building nightly and keep in
clean condition.
13. Metal doors and trim of all public elevator cars to be properly
maintained and kept clean.
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B. Common Area Lavatories
1. Sweep and wash all lavatory floors nightly, using proper non-scented
disinfectants.
2. Clean all mirrors, powder shelves, bright work and enameled surfaces
in all lavatories nightly. Scour, wash and disinfect all basins, bowls
and urinals using non-scented disinfectants.
3. Police lavatories during the day with matron or porter to pick up
waste and replenish materials.
4. Wash all toilet seats nightly.
5. Fill toilet tissue holders nightly.
6. Empty paper towel receptacles nightly.
7. Empty sanitary disposal receptacles nightly.
8. Thoroughly clean all wall tile and stall surfaces as necessary.
C. High Dusting
Do all high dusting (not reached in nightly cleaning) quarterly which
includes the following:
1. Dust all pictures, frames, charts, graphs, and similar wall hangings.
2. Dust exposed pipes, ventilation and air conditioning louvers, ducts
and high moldings.
D. Window Cleaning
1. All exterior windows (except for any retail/commercial areas) from the
second floor and above will be cleaned inside and outside except when
cleaning is rendered impracticable by inclement weather.
2. Entrance doors and elevator lobby glass to be cleaned daily and kept
in a clean condition at all times during the day.
3. Wipe down all metal window frames as necessary but not less often than
monthly.
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E. Building Lobbies
1. Floors to be swept and washed or vacuumed nightly, and machine
scrubbed according to Building Standard frequency.
2. Carpeting in passenger elevator cabs to be vacuum cleaned nightly.
3. Lobby walls to be dusted as often as necessary, but not less than
weekly.
4. Screen and clean sand urns nightly.
5. Clean all unpainted metal work in a manner appropriate to original
finish.
F. Porters
Necessary number of day porters under supervision will be assigned for the
following services:
1. Service all public and building operating space throughout the
Building.
2. Keep elevator cars clean and neat during the day.
3. Maintain lobbies clean and, during wet weather, mopped dry to the
extent practicable.
4. Dust and rub down all elevator doors, frames, telephone booths and
directories daily.
5. Sweep sidewalks, ramps, etc. daily.
6. Clean roofs and setbacks as often as necessary.
7. Maintain firehose and equipment clean.
8. Lay and remove lobby runners as necessary.
9. Replenish toilet tissue, towels and other supplies in lavatories.
10. Maintain fan rooms, motor rooms and air conditioning rooms in clean
condition.
11. Check stairways and keep same neat and clean during the day.
12. Clean exterior columns, exterior signs and metal work, standpipe and
sprinkler system, walkways and stairs as necessary.
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13. If directed by superintendent, fill towel and soap dispensers and
perform any emergency cleaning required.
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EXHIBIT 6
---------
BUILDING STANDARD ITEMS
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EXHIBIT 7
---------
HAZARDOUS MATERIALS
Phase I Environmental Site Assessment report prepared by Levine-Fricke-Recon
dated October 3, 1997
Revised Asbestos-Containing Materials Summary Report for the Technology Square
Complex, Cambridge, Massachusetts 02139, prepared by Levine-Fricke-Recon dated
November 21, 1997.
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EXHIBIT 8
---------
RULES AND REGULATIONS
1. The entrances, lobbies, passages, corridors, elevators, halls, courts,
sidewalks, vestibules, and stairways shall not be encumbered or obstructed
by Tenant, Tenant's agents, servants, employees, licensees or visitors or
be used by them for any purposes other than ingress or egress to and from
the premises.
2. The moving in or out of all safes, freight, furniture, or bulky matter of
any description shall take place on weekends or before 8 a.m. and/or after
6 p.m., Monday through Friday, or during other hours that Landlord may
decide from time to time or as otherwise approved by Landlord, which
approval shall not be unreasonably withheld or delayed. Landlord reserves
the right to inspect all freight and bulky matter to be brought into the
Building and to exclude from the Building all freight and bulky matter
which violates any of these Rules and Regulations or the Lease of which
these Rules and Regulations are a part. Landlord reserves the right to have
Landlord's structural engineer review Tenant's floor loads on the premises
at Tenant's expense at the time Tenant is installing safes, freight,
furniture or bulky matter.
3. Tenant or the employees, agents, servants, visitors or licensees of Tenant
shall not at any time place, lease or discard any rubbish, paper, articles,
or objects of any kind whatsoever outside the doors of the premises or in
the corridors or passageways of the Building. No animals or birds shall be
brought or kept in or about the Building, other than seeing eye dogs.
Bicycles shall not be permitted in the Building.
4. Tenant shall not place objects against glass partitions or doors or windows
or adjacent to any common space which would be unsightly from the Building
corridors or from the exterior of the Building and will promptly remove the
same upon notice from Landlord.
5. Tenant or the employees, agents, servants, visitors or licensees of Tenant
shall not make noises, cause disturbances, create vibrations, odors or
noxious fumes or use or operate any electrical devices or other devices
that emit sound waves or are dangerous to other tenants and occupants of
the Building or that interferes with the operation of any device or
equipment or radio or television broadcasting or reception from or within
the Building or elsewhere or with the operation of roads or highways in the
vicinity of the Building.
6. Tenant shall not place or install any projections, antennae, aerials, or
similar devices inside or outside of the premises without the prior written
approval of Landlord.
7. Tenant may not (without Landlord's approval therefor, which approval will
be signified on Tenant's Plans submitted pursuant to the Lease) and Tenant
shall not permit or suffer anyone to: (a) cook in the premises (other than
in microwave ovens); (b) at any time sell, purchase or give away or permit
the sale, purchase, or gift of food in any form, except that food vendors
shall be permitted to deliver prepared food ordered by invitees of Tenant
and to collect money for such deliveries.
8. Tenant shall not: (a) use the premises for lodging, manufacturing or for
any immoral or illegal purposes; (b) use the premises to engage in the
manufacture or sale of spirituous, fermented, intoxicating or alcoholic
beverages on the premises; (c) use the premises to engage in the
manufacture or sale of, or permit the use of, any illegal drugs on the
premises.
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9. Tenant shall not use the name of the Building or use pictures or
illustrations of the Building in advertising or other publicity without the
prior written consent of Landlord, which consent will not be unreasonably
withheld or delayed. Landlord shall have the right to prohibit any
advertising by Tenant which, in Landlord's opinion, tends to impair the
reputation of the Building or its desirability for offices, and, upon
written notice from Landlord, Tenant will refrain from or discontinue such
advertising.
10. Door keys for doors in the premises will be furnished at the commencement
of the Lease by Landlord. No additional locks or bolts of any kind shall be
placed upon any of the doors or windows by Tenant, nor shall any changes be
made in existing locks or the mechanism thereof without the prior written
consent of Landlord. Tenant shall purchase duplicate keys only from
Landlord and will provide to Landlord the means of opening of safes,
cabinets, or vaults left on the premises. Upon the termination of its
tenancy, Tenant must return to Landlord all keys either furnished to or
otherwise procured by Tenant, and in the event of the loss of any keys so
furnished by Landlord, Tenant shall pay to Landlord the cost thereof.
11. Tenant assumes full responsibility for protecting its space from theft,
robbery and pilferage, which includes keeping doors locked and other means
of entry to the premises closed and secured.
12. Tenant shall not make any room-to-room canvass to solicit business from
other tenants in the Building and shall not exhibit, sell or offer to sell,
use, rent or exchange any item or services in or from the premises unless
ordinarily embraced within Tenant's use of the premises as specified in its
Lease. Canvassing, soliciting and peddling in the Building are prohibited,
and Tenant shall cooperate to prevent the same. Peddlers, solicitors and
beggars shall be reported to Landlord's management office.
13. Tenant shall not waste electricity or water and agrees to cooperate fully
with Landlord to assure the most effective operation of the Building's
heating and air conditioning and shall refrain from attempting to adjust
controls. Tenant shall keep corridor doors closed except when being used
for access and except for Tenant's main entry door on the fourth (4th)
floor of the Premises during normal business hours.
14. The water and wash closets and other plumbing fixtures shall not be used
for any purpose other than those for which they were constructed, and no
sweepings, rubbish, rags, or other substances shall be thrown therein.
15. Building employees shall not be required to perform, and shall not be
requested by any tenant or occupant to perform, any work outside of their
regular duties, unless under specific instructions from Landlord's
management office.
16. Tenant shall comply with all security measures from time to time
established by Landlord for the Building including, but not limited to, the
below-listed procedure for the control of all building access cards issued
to Tenant, Tenant's employees or agents.
(a) Upon occupancy, Tenant shall submit a list of all authorized personnel
who will require building access cards. This list is to be on the form
provided in the Tenant's Handbook.
(b) During tenancy, Tenant shall notify Landlord in writing when
additional building access cards are required for new employees.
Additionally, Tenant shall promptly notify Landlord in writing when a
cardholder's authorization has been revoked (e.g., upon termination of
employment).
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(c) Upon termination of tenancy, Tenant shall promptly return all building
access cards issued to Tenant, Tenant's employees or agents. For all
access cards not returned to Landlord, Tenant will be charged a fee to
cover Landlord's cost to replace each card.
17. All wiring installed in Tenant's premises by Tenant or Tenant's agents
shall be done in compliance with the rules and regulations of the State
Building Code Commission.
18. Tenant shall become familiar with the proper use and handling of all fire
extinguishers provided by Landlord in Tenant's premises and shall be
responsible for the periodic inspection and maintenance of said
extinguishers in accordance with the manufacturer's instructions.
19. Tenant shall participate in Landlord's semi-annual fire drills for the
Building and shall appoint a fire marshal representing the Tenant and one
additional fire marshal for each group of 50 employees.
20. Smoking is strictly prohibited by law in all areas of the Building
including, without limitation, tenant premises, lobbies, elevators, rest
rooms, vacant tenant spaces, entranceways, vestibules, stairwells, etc.).
Tenant shall inform its employees of this law and shall be responsible for
any violation of this law by its employees.
21. In the event Landlord has deposited a check from Tenant, and said check is
returned to Landlord by Landlord's bank, then Landlord shall charge Tenant
as additional rent a $35 processing fee (the "Processing Fee") for the
returned check. In addition, until Landlord is able to redeposit Tenant's
check, Landlord shall charge interest on the uncollectible funds in
accordance with the provisions of Article 6(a) of the Lease. In the event
the fee charged to Landlord for the returned check increases, then the
Processing Fee shall be increased accordingly.
22. Parking is strictly prohibited in all handicapped spaces (unless vehicle
has the appropriate handicapped sticker or license plate), fire lanes, tow
zones, and other "no parking" areas (the "restricted areas"). Any vehicle
found parking in a restricted area will be issued a citation and fined by
the Cambridge Police Department. Repeated violators of this rule will have
their vehicles towed without notice at their own expense. Tenant shall be
responsible for notifying its employees of this rule and shall be
responsible for any violation of this rule by its employees, including, but
not limited to, reimbursing Landlord for all costs incurred in towing
Tenant's employees' vehicles from the restricted areas.
23. Rollerblading and skateboarding are strictly prohibited within the Complex.
Tenant shall be responsible for notifying its employees of this rule and
shall be responsible for any violation of this rule by its employees.
24. Tenant shall abide by Landlord's move-in/move-out procedures contained in
the Tenant Handbook, including, but not limited to, (i) scheduling Tenant's
move-in and move-out only on weekends or after 6 p.m. Monday through
Friday, and (ii) using only one padded building elevator during these
moves. Notwithstanding the foregoing, Tenant shall not be required to
comply with clause (i) hereof in connection with Tenant's initial move into
the Premises and Tenant shall have the right to use more than one padded
building elevator during such initial move. Tenant must notify Landlord 24
hours in advance so that Landlord can arrange for the padding of the
elevator.
25. The speed limit at all times within the Complex is 20 miles per hour.
Tenant shall adhere to this speed limit, shall be responsible for notifying
its employees of this rule, and shall be responsible for any violation of
this rule by its employees.
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26. In the event Landlord permits Tenant to hire its own contractors to perform
any tenant construction work, Tenant shall make its contractors aware of
these Rules and Regulations and shall be responsible for any violation of
these Rules and Regulations by Tenant's contractors.
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EXHIBIT 9
---------
TABLE OF DEFINITIONS
Defined Term Article
- ------------ -------
ADA 17.7(c)
additional cost to Landlord 4.6
Additional Letter of Credit Rider, Para. 8(D)
Affiliate of Tenant 16(c)
Alterations 12(c)
Alterations Which Must Be Removed by Tenant 12(c)
Annual Charge-Off 9.1(g5)(ii)
Antenna Rider, Para. 7
Antenna Area Rider, Para. 7
Arbitration Exhibit 1
Area Objection Notice 6(c)
Assumption Agreement 16(b)
available for lease to Tenant Rider, Para. 3(A)
Bankruptcy Law 4.1(e)
Bankruptcy Proceeding 4.1(e)
Base Building Exhibit 4
Base Building Work 4.5(ii)
Base Year 9.1(b)
Beacon - Skanska 4.4(a)(ii)
Brokers Exhibit 1
Building Exhibit 1
Building 549 6(c)
Building Courtyard Area 2.3(a)(4)
Building Operating Cost Base Exhibit 1
Building Operating Costs 9.1(g1)
Building Parking Area 2.3(a)
Building Services Exhibit 5
Building Tax Base Exhibit 1
Building Taxes 9.1(d1)
Building, etc. 29.3(a)
business days 8.3
Capital Expenditures 9.1(g5)(i)
Capital Interest Rate 9.1(g5)(iv)
Capital Loan 9.1(g5)(ii)
Central Building System Rider, Para. 7(S)(i)
Certificate of Occupancy 4.2(a)
Collateral Rider, Para. 8(F)
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Complex Exhibit 1
Complex Operating Costs 9.1(g2)
Complex Operating Cost Base Exhibit 1
Condemnation Parking Limit 20.2
Construction Rent 6(b)
Consumer Price Index 29.12
Cooling Tower Rider, Para. 10
CPI Change Notice 29.12
Dispute Increase 9.8
Environmental Laws 7(a)
Estimated Restoration Period 18.4(b)
Excluded Costs 9.1(g4)
Execution Date Exhibit 1
Exercise Notice Rider, Para. 2(B)
Existing Category 9.8
Expansion Area A Rider, Para. 2(A)
Expansion Area B Rider, Para. 2(A)
Expansion Area C Rider, Para. 2(A)
Expansion Area(s) Rider, Para. 2(A)
Expansion Notice 6(c)
Expiration Date Rider, Para. 6(A)
Exterior Sign Exhibit 10
Fair Market Rental Value Rider, Para. 4
First Target Date 4.1(b)
fitness center 4.3(b)
Floor 8 Rider, Para. 6(A)
Floor 8 Contribution Rider, Para. 6(C)(i)
Force Majeure Date 4.1(d)
Force Majeure Delays 4.1(b)
Form of Overlandlord's Consent Exhibit 21
Form of Assignment and Assumption Agreement Exhibit 22
GMP 4.4(a)(ii)
Garage 2.3(b)
General Conditions Exhibit 20
Hazardous Material 7(c)
Holdover Damages 22(c)
Inapplicable Provisions 3.2
Land 9.1(d2)
Land Taxes 9.1(d3)
Landlord Exhibit 1
Landlord Cure Period 21.8
Landlord Service Interruption Cure Period 8.8(b)
Landlord's Additional Contribution 4.5(ii)
Landlord's Contribution 4.5(ii)
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Landlord's Default 21.8
Landlord's Force Majeure Notice 4.1(d)
Landlord's Notice Rider, Para. 3(B)
Landlord's Response Period 16(d)(3)
Landlord's Work Exhibit 4
Laws 17.7(a)
Lease Rate 6(a)
Lease Year Exhibit 1
Letter of Credit Rider, Para. 8(A)
Letter of Credit Amount Rider, Para. 8(B)
Losses 7(e)
Market Area 5.2
Mailing Address Exhibit 1
Maximum Consent Charge 29.9
Measurement Standards Exhibit 11
Mortgage(s) 23(d)
Mortgagee 23(e)
Mortgagee(s) 23(d)
Mortgagor(s) 23(d)
Net Sublease Profit 16(i)
New Category 9.1(b)
New Leases 22(c)
Nondisturbance Agreement 23(a)
Notice Date Rider, Para. 2(D)
Occupancy Condition Rider, Para. 1(A)
Off-Site Parking Agreement Exhibit 18
Off-Site Parking Areas 2.3(c)
On-Site Parking Areas 2.3(b)
Open Book 4.4(a)(v)(A)
Operating and Tax Escalation Exhibit 1
Operating Costs 9.1(g)
Operating Expense Excess Exhibit 1 and 9.3(a)
Operating Year 9.1(a)
Operating Year End Statement 9.3(a)
Outside Completion Date 4.1(c)
Outside Restoration Period 18.4(b)
Overtime HVAC Charge 8.5(b)
Overtime Hours 8.5(a)
Parking Areas 2.3(d)
Parking Offer Notice 2.3(b)
Parking Offer Period 2.3(b)
Parking Offer Spaces 2.3(b)
Parking Rent 2.3(b)
Parking Violation 2.3(b)
Parking Violation Notice 2.3(b)
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Permitted Initial Sublease 16(d)(6)
Permitted Tenant Successor 16(b)
Permitted Users 5.1
Plans and Response Schedule Exhibit 4A
Premises Exhibit 1
Premises Untenantability Cure Period 15.6(b)
Prohibited Expansion Area Lease Rider, Para. 2(C)
Project Executive 4.4(a)(v)(C)
Project Manager 4.4(a)(v)(C)
Protected Sublease 16(d)(5)(iii)
Provider Rider, Para. 10
Punch List Items 4.2(a)
Qualified Transferee 16(d)(4)
Recapture Offer 16(d)(2)
Recapture Period 16(d)(2)(iii)
Recapture Premises 16(d)(2)(ii)
Relocated Rooftop Area Rider, Para. 7(O)
Relocated Telecommunications Space Rider, Para. 10(H)
Rent 6(a)
Rent Commencement Date Exhibit 1 and 3.1(b)
Rent Commencement Date in respect to the Expansion Rider, Para. 2(E)(i)
Areas
Requesting Party 17.5
requisition Rider, Para. 6(C)(ii)
Responding Party 17.5
Restoration Deadline Date 18.4(c)
RFO Premises Rider, Para. 3(A)
RFO Premises A Rider, Para. 3(A)
RFO Premises B Rider, Para 3(A)
Rooftop Installations Rider, Para. 7(D)
Rules and Regulations 17.1
Second Target Date 4.1(b)
Security Proceeds Rider, Para. 8(E)
Specifically Included Operating Costs 9.1(g6)
Specified Commencement Date Rider, Para. 3(B)
Specified Rent Commencement Date Exhibit 1
State 29.2
Sublease Expenses 16(i)
Substantially Completed 4.2(a)
Substitute Letter of Credit Rider, Para. 8(C)
Suitable for Tenant's Rooftop Installations Rider, Para. 7
T.I. Control Budget 4.4(a)(iii)
Tax Excess 9.2(a)
Tax Period 9.1(f)
Taxes 9.1(d)
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Tax Year End Statement 9.2(a)
Tenant Exhibit 1
Tenant Delay 4.2(b)
Tenant Delay Payment 4.2(b)
Tenant Improvement Work 4.4(a)(ii)
Tenant's Building Operating Cost Percentage Exhibit 1
Tenant's Building Tax Percentage Exhibit 1
Tenant's Complex Operating Cost Percentage Exhibit 1
Tenant's Exercise Notice Rider, Para. 3(B)
Tenant's First Termination Notice 4.1(c)
Tenant's Operating Cost Percentage Exhibit 1
Tenant's Plans 4.3(a)
Tenant's Representative 4.4(a)(v)
Tenant's Request Rider, Para. 1(B)(ii)
Tenant's Second Termination Notice 4.1(d)(i)
Tenant's Service Partner 27
Tenant's Tax Percentage Exhibit 1
Tenant's Termination Damage 4.1(d)(ii)
Tenant's Trade Fixtures 11
Term Commencement Date Exhibit 1 and 3.1(a)
Term Commencement Date in respect of each Expansion Rider, Para. 2(E)(i)
Area
Term Commencement Date in respect of such RFO Premises Rider, Para. 2(C)(i)
Term Commencement Date in respect of the Antenna Area Rider, Para. 7
Termination Date Exhibit 1
Total Rentable Area Exhibit 1
Use Exhibit 1
Useful Life 9.1(g5)(iii)
Vacant RFO Premises Rider, Para. 3(A)
Warranty Commencement Date 4.8
Warranty Expiration Date 4.8
wet laboratory Rider, Para. 5(A)
Yearly Rent Exhibit 1
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EXHIBIT 10
SIGNS
1. Landlord, at Tenant's cost and expense, shall install a Building standard
sign at the entrance door of the Premises identifying Tenant.
2. Any changes in the signs or listings identifying Tenant shall be at
Tenant's expense.
3. Neither Landlord's name, nor the name of the Building or the Complex, or
the name of any other structure erected therein shall be used without
Landlord's consent in any advertising material (except on business
stationery or as an address in advertising matter), nor shall any such
name, as aforesaid, be used in any undignified, confusing, detrimental or
misleading manner.
4. Provided that and for so long as Forrester Research, Inc., is itself
occupying at least 100,000 square feet of space in the Building, Tenant
shall have the exclusive right (subject to Landlord's right to erect and
maintain a Building name and street address sign on the exterior of the
Building) to erect and maintain two signs on the exterior of the Building
("Exterior Signs") as shown on the attached exhibit provided (i) the
Exterior Signs comply with all applicable laws (and Tenant shall have
obtained any necessary permits prior to erecting the Exterior Sign), (ii)
the Exterior Signs shall be located as shown on the elevations attached
hereto as part of this Exhibit 10, (iii) the materials, design and lighting
of the Exterior Signs shall be subject to Landlord's prior written
approval, which approval shall not be unreasonably withheld, and (iv)
Tenant shall at all times maintain the Exterior Signs in good order and
condition and shall remove the Exterior Signs at the expiration or earlier
termination of the term hereof and shall repair any damage to the Building
caused by the Exterior Signs or its installation or removal. Landlord
agrees, at Tenant's cost, to reasonably cooperate with Tenant in obtaining
any necessary governmental approvals, permits, etc. in connection with the
Exterior Signs.
5. Tenant shall have the right, during the term of the Lease, to use up to
Tenant's Building Operating Cost Percentage of the Building directory to
list the name of Tenant, subtenants or assignees permitted to occupy the
Premises pursuant to Article 16, and the names of employees of any of the
foregoing. Listings, as of the Rent Commencement Date, shall be at
Landlord's cost and expense. Any changes, replacements or additions by
Tenant to such directory shall be at Tenant's sole cost and expense.
6. So long as Forrester Research, Inc., an Affiliate of Tenant and/or a
Permitted Tenant Successor, as such terms are defined in Article 16 of the
Lease, collectively are occupying at least 100,000 square feet of Total
Rentable Area in the Building, Landlord shall not grant any tenant in the
Building the right to install any signs in the lobby of the Building. This
Paragraph 6 shall not limit Landlord's right to install a
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Building directory or to permit tenants who lease premises on the first
floor of the Building to install and maintain tenant identification signage
at their entrance doors.
7. Subject to all necessary governmental approvals, Tenant shall have
non-exclusive rights to space on signage which Landlord will install at the
exterior entrance or entrances of the Building. Such space shall based upon
Tenant's Building Operating Cost Percentage of the Building.
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EXHIBIT 10 - CONTINUED
SIGN EXHIBIT
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EXHIBIT 11
MEASUREMENT STANDARDS
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EXHIBIT 12
LETTER OF CREDIT
BENEFICIARY: ISSUANCE DATE:
________________, 199__
[Landlord's Name]
c/o___________________________ IRREVOCABLE STANDBY
LETTER OF CREDIT NO.
ACCOUNTEE/APPLICANT: MAXIMUM/AGGREGATE
CREDIT AMOUNT:_________
_________________ USD ___________________
[TENANT NAME]
LADIES AND GENTLEMEN:
We hereby establish our irrevocable letter of credit in your favor for
account of the applicant up to an aggregate amount not to exceed
____________________ US Dollars ($___________) available by your draft(s) drawn
on ourselves at sight accompanied by:
Your statement, signed by a purportedly authorized officer/official
certifying that the Beneficiary is entitled to draw upon this Letter of Credit
(in the amount of the draft submitted herewith) pursuant to Paragraph 8 of the
Rider to the Lease (the "Lease") dated ________________ by and between
____________________, as Landlord, and _________________, as Tenant.
Draft(s) must indicate name and issuing bank and credit number and must be
presented at this office.
You shall have the right to make partial draws against this Letter of
Credit, from time to time.
Except as otherwise expressly stated herein, this Letter of Credit is
subject to the "Uniform Customs and practice for Documentary Credits,
International Chamber of Commerce, Publication No. 500 (1993 Revision)".
This Letter of Credit shall expire at our office on ________________ (the
"Stated Expiration Date"). It is a condition of this Letter of Credit that the
Stated Expiration Date shall be deemed automatically extended without amendment
for successive one (1) year
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periods from such Stated Expiration Date, unless at least forty-five (45) days
prior to such Stated Expiration Date (or any anniversary thereof) we shall
notify you and the Accountee/Applicant in writing by registered mail (return
receipt) that we elect not to consider this Letter of Credit extended for any
such additional one (1) year period.
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EXHIBIT 13
BUILDING PARKING AREA AND BUILDING COURTYARD AREA
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EXHIBIT 14
SECURITY SERVICES
1. Contract security personnel will be posted on the Complex (including the
Garage) and will tour all buildings and exterior areas periodically on a 24
hour 7 day per week basis.
2. Building Common Areas and exterior areas of the Complex (including the
Garage) will be monitored by closed circuit video cameras, which will be
monitored by security personnel on a 24 hour 7 day per week basis.
3. An electronic card access system will be installed at Building entrance
doors and in passenger elevators.
4. The Garage will be patrolled by security personnel Monday through Friday
from 8:00 A.M. to 9:00 A.M. and from 5:00 P.M. to 7:00 P.M.
5. Call box on buildings to permit business invitees access to tenant
premises.
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EXHIBIT 15
CONFIDENTIALITY AGREEMENT
TECHNOLOGY SQUARE LLC
c/o BEACON CAPITAL PARTNERS
ONE FEDERAL STREET
BOSTON, MASSACHUSETTS 02110
______________, 1999
Forrester Research, Inc.
1033 Massachusetts Avenue
Cambridge, Massachusetts
Attention: PRESIDENT
Dear Sir or Madam:
As you are aware, we are about to enter into a certain business relationship
with you ("Relationship") pursuant to which we shall disclose to you certain
financial and other information ("Confidential Information") relating to us. The
Confidential Information is proprietary and confidential to us and is of
significant importance and value to us and our business. Accordingly, in order
to induce us to provide to you such Confidential Information and in
consideration of our entering into the Relationship with you, you have agreed as
follows:
1. You shall not at any time -
(a) publish or disclose any Confidential Information heretofore or
hereafter disclosed to you to anyone other than only to those persons
who have a need to know such Confidential Information at the time of
such disclosure to you; or
(b) directly or indirectly use any Confidential Information for your own
benefit or for the benefit of any third party.
2. You shall use Confidential Information solely for the purpose for which it
may have been disclosed to you at the time of such disclosure. You shall
apply to Confidential Information such security procedures as you apply to
like information of your own, and, at our expense, such reasonable
additional security procedures as we may require in order to avoid
inadvertent disclosure of Confidential Information to unauthorized
employees or to third parties, and to avoid commingling of Confidential
Information with information of third parties,
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provided that you shall in any event, at your expense, provide a secure
place for your retention and use of Confidential Information and observe
and comply with Paragraph 3 hereof.
3. You have represented and warranted to and agreed with us that each of your
directors, officers and employees or other persons to whom Confidential
Information may be disclosed will be advised in advance of the terms of
this Agreement and will be required to enter into or to have entered into
written agreements which shall preserve, for our benefit and for yours, the
confidentiality of such Confidential Information.
4. You understand and acknowledge and agree that Confidential Information is
of great competitive as well as monetary value to us and that, therefore,
we shall have the right to bring an action to enjoin the disclosure of
Confidential Information, it being agreed that a suit for monetary damages
alone would be an inadequate remedy.
5. You agree to mark any written record made by you of our Confidential
Information or acquired by you as "TECHNOLOGY SQUARE - CONFIDENTIAL" or to
like effect.
6. Upon our written request, you shall promptly return to us all documents or
records and all copies thereof containing our Confidential Information. All
documents, memoranda, notes and other writings prepared by you on the basis
of our Confidential Information, or a license under any patent or trade
secret of ours.
7. Nothing contained herein shall be construed to grant you a license or right
to use any Confidential Information, or a license under any patent or trade
secret of ours.
8. "Confidential Information" is defined for purposes of this Agreement to
include, but not to be limited to, any one or more of the following: the
existence of this Agreement between the parties hereto, non-public
financial data provided to Tenant in connection with Tenant's rights under
Article 9 of the Lease. Confidential Information includes, without
limitation, such of the foregoing as may be disclosed to you, directly or
indirectly, by any party in any manner from time to time.
9. You acknowledge that with respect to Confidential Information, Confidential
Information will be disclosed, or otherwise made available to you incident
to a relationship of trust and confidence.
10. Anything herein to the contrary notwithstanding, you shall not have any
obligation of confidentiality with respect to any Confidential Information
which:
(a) was already known to you prior to acquisition from, or disclosure by
us; or
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(b) is or becomes publicly known through no fault or act of yours; or
(c) is rightfully received by you from a third party not known by you to
have an obligation of confidentiality to us with respect thereto; or
(d) is approved for release by our written authorization; or
(e) you are ordered by a court of competent jurisdiction to disclose;
provided such disclosure is strictly in accordance with such order,
and provided further that you shall have given us prompt prior notice
of such order and of any request therefor and a reasonable
opportunity, at our expense, to object to or appeal from, or to
require you to object to or appeal from, any such order or request
therefor and/or to obtain a protective order with respect thereto.
11. This Agreement is executed as a sealed instrument and shall be construed
and governed by the laws of the Commonwealth of Massachusetts without
regard to conflicts of law principles and shall be enforceable for our
benefit and the benefit of our affiliates, successors and assigns.
Kindly confirm that the foregoing correctly states our agreement by signing the
extra copy of this letter and returning it to us.
* * *
Very truly yours,
TECHNOLOGY SQUARE LLC
By: Beacon Capital Partners, L.P.,
a Delaware limited partnership
d/b/a Beacon Capital Partners
Limited Partnership, its manager
By: Beacon Capital Partners, Inc.
a Maryland corporation, its
general partner
By:___________________________
(Name) (Title)
Confirmed and agreed to:
FORRESTER RESEARCH, INC.
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By:__________________________________
Its ______________, Authorized Signatory
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EXHIBIT 16
OPERATING COST CATEGORIES
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EXHIBIT 17
FLOOR LOAD CAPACITIES
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EXHIBIT 18
OFF-SITE PARKING AGREEMENT
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EXHIBIT 19
TAX LOTS
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EXHIBIT 20
DEFINITION OF GENERAL CONDITIONS
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EXHIBIT 21
FORM OF OVERLANDLORD'S CONSENT
A. The undersigned Overlandlord, as Landlord, under a certain lease dated
________________ (the "Lease"), by and between ____________________, a
Delaware limited liability company, Landlord, and ______________, Tenant,
for premises in the Building (the "Premises"), hereby consents to a
sublease ("Sublease") by and between _______________, as Sublandlord, and
________________, as Subtenant, for premises on the ____________ floor of
the Building ("Sublet Premises"), provided that:
1. A copy of any notice sent pursuant to said Sublease shall be sent to:
Beacon Capital Partners, Inc., One Federal Street, Boston,
Massachusetts 02110, Attention: Treasurer.
2. Subtenant shall have no right, without Overlandlord's prior written
consent, to further sublet the Sublet Premises or any portion thereof
nor shall the Subtenant have any right, without Overlandlord's prior
written consent, to assign said sublease.
3. Subtenant shall name Overlandlord as an additional insured party under
any liability insurance policy which Subtenant is required to maintain
and, prior to taking possession of the Sublet Premises, Subtenant
shall deliver to Overlandlord a certificate of such insurance.
B. Nothing herein contained shall:
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1. Be deemed to diminish or relieve ________________ of its primary
responsibility as party-tenant under the Lease;
2. Be deemed in any way to limit, restrict, or diminish Overlandlord's
rights under the Lease;
3. Extend, or otherwise increase, Overlandlord's obligations under the
Lease;
or
4. Extend the term of the Lease.
Without limiting the foregoing, in the event that the Lease is
terminated for any reason, Subtenant shall have no further right to
occupy the Sublet Premises.
C. Anything to the contrary to provisions and conditions of this
Overlandlord's Consent which is contained in any instrument of sublease
shall be null and void and of no force and effect so far as it relates to
the rights and obligations of Overlandlord.
D. By executing this Overlandlord's Consent, the Overlandlord shall not be
deemed to have consented to any work proposed to be performed by Tenant or
Subtenant in the Premises. Any and all alterations, additions and
improvements in or to the Sublet Premises shall be subject to
Overlandlord's prior written consent.
E. The undersigned Overlandlord hereby reserves its right to withhold consent
where the Lease allows the Landlord to withhold consent.
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F. To the best of Landlord's knowledge, Tenant is not, as of the date of this
Overlandlord's Consent, in default of any of its obligations under the
Lease.
OVERLANDLORD:
TECHNOLOGY SQUARE LLC,
a Delaware limited liability company
By: Beacon Capital Partners L.P.,
a Delaware limited partnership
d/b/a Beacon Capital Partners
Limited Partnership, its manager
By: Beacon Capital Partners, Inc., a
Maryland corporation, its general
partner
By: ____________________________
Name: __________________________
Title: _________________________
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EXHIBIT 22
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT is made as of the date first above
written by and among ___________________, a __________________("Assignor"),
______________________("Assignee "), and ______________________("Landlord").
WHEREAS, Assignor is Tenant under a lease with Landlord dated
_________________ (the "Lease") in respect of certain space located in the
Building ("Premises"):
WHEREAS, Assignor desires to assign its interest in the Lease to Assignee;
WHEREAS, Landlord is willing to consent to such assignment on the terms and
conditions hereinafter set forth; NOW THEREFORE, in consideration of the mutual
agreements herein contained, it is agreed between the parties as follows:
1. Effective as of _______________, Assignor hereby assigns to Assignee
all of its right, title and interest in the Lease.
2. For the express benefit of Landlord, Assignee hereby assumes all of
the obligations of Assignor under the Lease and Assignee agrees to perform and
keep all covenants, conditions and agreements of Assignor under the Lease.
3. Assignee hereby covenants and agrees that the provisions of Article 16
of the Lease shall apply to all future proposed assignments of
Assignee's interest under the Lease and to all future proposed
subleases of said Premises.
-xxxviii-
<PAGE> 129
4. In consideration of the foregoing agreements by Assignee, and without
in any way diminishing the primary liability of Assignor as party-tenant under
the Lease, the Landlord hereby consents and agrees to the foregoing assignment
by Assignor to Assignee.
EXECUTED under seal as of the date first above written.
LANDLORD: ASSIGNOR:
TECHNOLOGY SQUARE LLC,
a Delaware limited liability company
By: Beacon Capital Partners L.P.,
a Delaware limited partnership
d/b/a Beacon Capital Partners
Limited Partnership, its manager
By: Beacon Capital Partners, Inc., a
Maryland corporation, its general
partner
By: _____________________ By: _______________________
Name: ___________________ Name: _____________________
Title: __________________ Title: ____________________
Date Signed:_____________________ Date Signed:________________
ASSIGNEE:
By: ______________________
(Name) (Title)
Hereunto Duly Authorized
Date Signed: _______________
<PAGE> 130
EXHIBIT 1
Building No. 565
TECHNOLOGY SQUARE
Cambridge, Massachusetts
Tenant: FORRESTER RESEARCH, INC.
Execution Date: May 6, 1999
Tenant: FORRESTER RESEARCH, INC.
a Delaware corporation
Mailing Address: Forrester Research, Inc.
1033 Massachusetts Avenue
Cambridge, Massachusetts 02138
Attn: President
with a copy to: Chief Financial Officer
and with a copy to:
Stephen P. Lindsay, Esq.
Ropes & Gray
One International Place
Boston, Massachusetts 02110
Landlord: TECHNOLOGY SQUARE LLC
a Delaware limited liability company (the sole
manager of which is Beacon Capital Partners, L.P., a
Delaware limited partnership, d/b/a Beacon Capital
Partners Limited Partnership, the sole general
partner of which is Beacon Capital Partners, Inc., a
Maryland corporation.)
Mailing Address: c/o Beacon Capital Partners, One Federal Street, Boston,
Massachusetts 02110, Attention: General Counsel
Complex: The land, buildings and other improvements thereon,
from time to time, located off Main Street in the
City of Cambridge, Middlesex County, Commonwealth of
Massachusetts known as Technology Square. The Complex
is initially substantially as shown on Exhibit 3,
Sheet 1, and the legal description of the Complex is
set forth on Exhibit 3, Sheets 2, 3, and 4; however,
the Complex may change from time to time as set forth
herein.
Building: 565 Technology Square, Cambridge, Massachusetts
Premises: Areas on Floors 2-8 of the Building, substantially as
shown on Lease Plan, Exhibit 2, Sheets 1 through 7.
Floors 2-6 are hereinafter referred to as "Portion
2-6" of the Premises; Floor 7 is hereinafter referred
to as "Portion 7" of the Premises, and Floor 8 is
hereinafter referred to as "Portion 8" of the
Premises; each of
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<PAGE> 131
EXHIBIT 1
Building No. 565
TECHNOLOGY SQUARE
Cambridge, Massachusetts
Tenant: FORRESTER RESEARCH, INC.
Execution Date: May 6, 1999
Portion 2-6, Portion 7 and Portion
8 of the Premises is hereinafter referred to as a
"Portion" of the Premises.
Art. 3.1 Term Commencement Date:
Portion 2-6 and Portion 7: May 6, 1999
Portion 8: Rent Commencement Date in respect of
Portion 8
Specified Rent Commencement Date:
Portion 2-6: September 1, 1999
Portion 7: July 1, 2000
Rent Commencement Date:
Portion 8: A date between July 1, 2002 and December
31, 2002, as determined pursuant to the
provisions of Paragraph 6 of the Rider
to Lease
Art. 3.2 Termination Date: Subject to the provisions of the Lease,
seven (7) years after the Rent
Commencement Date in respect of Portion
2-6 of the Premises or such later date
to which the term of this Lease may be
extended by Tenant pursuant to the terms
of Paragraph 1 of the Rider to Lease
Art. 4.3 Plans and
Construction
Schedule: See Exhibit 4A to Lease
Art. 5 Use of Premises: General business office use and, subject
to the provisions of the Lease, such
ancillary or incidental uses (including,
without limitation, cafeteria, fitness
center, day care, and computer rooms) as
are not inconsistent with a first-class
office park
Art. 6 Yearly Rent:
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<PAGE> 132
EXHIBIT 1
Building No. 565
TECHNOLOGY SQUARE
Cambridge, Massachusetts
Tenant: FORRESTER RESEARCH, INC.
Execution Date: May 6, 1999
With respect to Portion 2-6:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
Yearly Rent Rate Per
Lease Year1 Yearly Rent Monthly Payment Square Foot of Total
Rentable Area
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1-2 $3,638,775.00 $303,231.25 $35.00
- -------------------------------------------------------------------------------------------------------------
3-4 $3,898,687.50 $324,890.62 $37.50
- -------------------------------------------------------------------------------------------------------------
5-7 $4,158,600.00 $346,550.00 $40.00
- -------------------------------------------------------------------------------------------------------------
</TABLE>
With respect to Portion 7:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
Yearly Rent Rate Per
Lease Year1 Yearly Rent Monthly Payment Square Foot of Total
Rentable Area
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Rent Commencement Date in $727,755.00 $60,646.25 $35.00
respect of Portion 7-end
of Lease Year 2
- -------------------------------------------------------------------------------------------------------------
3-4 $779,737.50 $64,978.13 $37.50
- -------------------------------------------------------------------------------------------------------------
5-7 $831,720.00 $69,310.00 $40.00
- -------------------------------------------------------------------------------------------------------------
</TABLE>
With respect to Portion 8:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
Yearly Rent Rate Per
Lease Year1 Yearly Rent Monthly Payment Square Foot of Total
Rentable Area
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Rent Commencement Date in $779,737.50 $64,978.13 $37.50
respect of Portion 8-end
of Lease Year 4
- -------------------------------------------------------------------------------------------------------------
5-7 $831,720.00 $69,310.00 $40.00
- -------------------------------------------------------------------------------------------------------------
</TABLE>
Art. 7 Total Rentable Area of the Premises:
- ------------------------------
1 For the purposes hereof, "Lease Year" shall be defined as any twelve (12)
month period commencing as of the Rent Commencement Date for Portion 2-6 of the
Premises or as of any anniversary of said Rent Commencement Date, except that
the last Lease Year shall end on the expiration or earlier termination of the
term hereof.
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<PAGE> 133
EXHIBIT 1
Building No. 565
TECHNOLOGY SQUARE
Cambridge, Massachusetts
Tenant: FORRESTER RESEARCH, INC.
Execution Date: May 6, 1999
Floors 2-8: 20,793 square feet each
Expansion Space A: 20,144 square feet
Expansion Space B: 16,702 square feet
Total Rentable Area of the Building: 197,069 square feet
(the Total Rentable Area of the Building excludes the 10th
floor of the Building)
Initial Total Rentable Area of the Complex: 540,959
square feet
Art. 8 Electricity: Electric current will be metered and
paid for by Tenant in accordance with
Article 8.1 of the Lease.
Art. 9 Operating and Tax Escalation:
Operating Expense Excess:
Tenant's Building Operating Cost Percentage
(subject to Article 9.1(c)):
Portion 2-6: 52.76% (i.e., 103,965 /
197,069)
Portion 7: 10.55% (i.e., 20,793 /
197,069)
Portion 8: 10.55% (i.e., 20,793 /
197,069)
Tenant's Complex Operating Cost Percentage
(subject to Article 9.1(c)):
Portion 2-6: 19.22% (i.e., 103,965 /
540,959)
Portion 7: 3.84% (i.e., 20,793 /
540,959)
Portion 8: 3.84% (i.e., 20,793 /
540,959)
Note: Tenant's Complex Operating Cost
Percentage is a ratio of the Total
Rentable Area of the Premises to the
Total Rentable Area of the Complex,
and will change if the Total Rentable
Area of the Premises or the Complex
changes.
Building Operating Cost Base: Building
Operating Costs for calendar year 1999,
adjusted to
-4-
<PAGE> 134
EXHIBIT 1
Building No. 565
TECHNOLOGY SQUARE
Cambridge, Massachusetts
Tenant: FORRESTER RESEARCH, INC.
Execution Date: May 6, 1999
reflect 95% occupancy for a full
Operating Year.
Complex Operating Cost Base: Complex
Operating Costs for calendar year 1999,
adjusted to reflect 95% occupancy for a
full Operating Year.
Tax Excess:
Tenant's Building Tax Percentage:
Portion 2-6: 52.76% (i.e., 103,965 /
197,069)
Portion 7: 10.55% (i.e., 20,793 /
197,069)
Portion 8: 10.55% (i.e., 20,793 /
197,069)
Building Tax Base: $788,276.00
Art. 29.3 Brokers: Lynch, Murphy, Walsh & Partners and Fallon,
Hines and O'Connor
Art. 29.5 Arbitration: Superior Court; Middlesex County
LANDLORD: TENANT:
TECHNOLOGY SQUARE LLC, FORRESTER RESEARCH, INC.,
a Delaware limited liability company a Delaware corporation
By: Beacon Capital Partners L.P.,
a Delaware limited partnership
d/b/a Beacon Capital Partners
Limited Partnership, its manager
By: Beacon Capital Partners, Inc., a
Maryland corporation, its general
partner
By: _______________________ By: _______________________
Name: _____________________ Name: _____________________
Title: ____________________ Title: ____________________
-5-
<PAGE> 135
Rider to Lease
Forrester Research, Inc.
565 Technology Square, Cambridge, Massachusetts
May 6, 1999
1. TENANT'S OPTION TO EXTEND THE TERM OF LEASE
A. On the conditions, which conditions Landlord may waive, at its
election, by written notice to Tenant at any time, that Tenant is not in default
of its covenants and obligations under the Lease at the time of option exercise
(provided, however, that Tenant may cure any such default at the time of option
exercise), and that Forrester Research, Inc., an Affiliate of Tenant and/or a
Permitted Tenant Successor, as such terms are defined in Article 16 of the
Lease, collectively are occupying at least 100,000 square feet of Total Rentable
Area of the Premises then demised to Tenant ("Occupancy Condition"), as of the
commencement of the hereinafter described additional term, Tenant shall have the
option to extend the term of this Lease for two (2) additional five (5) year
terms, each such additional term commencing as of the expiration of the term
(initial or as previously extended) of the Lease. Tenant may exercise such
option to extend by giving Landlord written notice on or before the date twelve
(12) months prior to the expiration date of the then current term of the Lease.
Upon the timely giving of such notice, the term of this Lease shall be deemed
extended upon all of the terms and conditions of this Lease, except that
Landlord shall have no obligation to construct or renovate the Premises and that
the Yearly Rent, Operating Costs in the Base Year, and Tax Base during such
additional term shall be as hereinafter set forth. If Tenant fails to give
timely notice, as aforesaid, Tenant shall have no further right to extend the
term of this Lease, time being of the essence of this Paragraph 1.
B. YEARLY RENT
(i) The Yearly Rent during each additional term shall be based upon
the Fair Market Rental Value, as defined in Paragraph 4 of this Rider, as of the
commencement of such additional term, of the premises then demised to Tenant.
(ii) If Tenant gives Landlord a written notice ("Tenant's Request")
requesting that Landlord advise Tenant of Landlord's designation of the Fair
Market Rental Value applicable during the additional term on or after the date
fifteen (15) months prior to the expiration of the then current term of the
Lease but on or before the date thirteen (13) months prior to the expiration of
the then current term of the Lease, Landlord shall give Tenant Landlord's
initial designation of the Fair Market Rental Value pursuant to Subparagraph C
of Paragraph 4 of this Rider within fifteen (15) days after Landlord receives
Tenant's Request.
C. TENANT'S TERMINATION RIGHT AFTER THE FAIR MARKET RENTAL VALUE IN
RESPECT OF AN ADDITIONAL TERM IS DETERMINED.
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<PAGE> 136
If Tenant, in accordance with Subparagraph (C) of Paragraph 4 of this
Rider, timely elects to arbitrate the Fair Market Rental Value applicable to an
additional term, and if Tenant has exercised its right to extend the term of the
Lease in respect of said additional term, Tenant shall have the right to
terminate the term of the Lease as follows: Tenant may exercise such right by
giving written notice to Landlord on or before the date fifteen (15) days after
the Yearly Rent for the extension term in question is either agreed to by the
parties or is determined by the arbitrators, as the case may be. The effective
termination date shall be twelve (12) months after Landlord receives such
termination notice from Tenant. If Tenant timely exercises such termination
right, then: (i) the Yearly Rent payable by Tenant for the period commencing as
of the day after the expiration of the then current term of the Lease through
the effective termination date shall be based upon the Fair Market Rental Value,
as determined by the arbitrators or as agreed to by the parties, as the case may
be, and (ii) Tenant shall be required to reimburse Landlord, within ten (10)
days of billing therefor, for any and all reasonable out-of-pocket expenses
incurred by Landlord in connection with the arbitration proceedings.
D. Tenant shall have no further option to extend the term of the Lease
other than the two (2) additional five (5) year terms herein provided.
E. Notwithstanding the fact that upon Tenant's exercise of the herein
option to extend the term of the Lease such extension shall be self-executing,
as aforesaid, the parties shall promptly execute a lease amendment reflecting
such additional term after Tenant exercises the herein option, except that the
Yearly Rent payable in respect of such additional term, the Operating Costs in
the Base Year during such additional term, and the Tax Base during such
additional term, may not be set forth in said amendment. Subsequently, after
such Yearly Rent, Operating Costs in the Base Year, and Tax Base are determined,
the parties shall execute a written agreement confirming the same. The execution
of such lease amendment shall not be deemed to waive any of the conditions to
Tenant's exercise of its rights under this Paragraph 1, unless otherwise
specifically provided in such lease amendment.
2. TENANT'S EXPANSION OPTION
On the conditions (which conditions Landlord may waive, at its election, by
written notice to Tenant at any time) that Tenant is not in default of its
covenants and obligations under the Lease at the time of option exercise
(provided, however, Tenant may cure any such default at the time of option
exercise) and that the Occupancy Condition, as defined in Paragraph 1 of this
Rider, is satisfied at the respective Term Commencement Dates in respect of each
Expansion Area, as hereinafter defined, Tenant shall have the following options
to lease additional premises in the Building from Landlord:
A. EXPANSION AREAS
For the purposes hereof, the Expansion Areas shall be defined as follows.
<TABLE>
- -------------------------------------------------------------------------------------------------------------
<S> <C>
Expansion Area Location
- -------------------------------------------------------------------------------------------------------------
</TABLE>
-2-
<PAGE> 137
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
<S> <C>
Expansion Area A The entirety of the ninth (9th) floor of the
Building, containing 20,144 square feet of Total
Rentable Area, and as substantially as shown on
Lease Plan, Exhibit 2.
- -------------------------------------------------------------------------------------------------------------
Expansion Area B The entirety of the first (1st) floor of the
Building, containing 16,702 square feet of Total
Rentable Area, and as substantially as shown on
Lease Plan, Exhibit 2.
- -------------------------------------------------------------------------------------------------------------
Expansion Area C Part or all of the tenth (10th) floor of the
Building, which floor contains approximately
6,200 square feet of Total Rentable Area. The
exact location of Expansion Area C within the
tenth (10th) floor of the Building shall be as
determined by Landlord.
- -------------------------------------------------------------------------------------------------------------
</TABLE>
Expansion Area A, Expansion Area B and Expansion Area C are hereinafter
collectively referred to as the Expansion Areas.
B. EXERCISE OF RIGHTS TO EXPANSION AREAS
Tenant may exercise its option to lease any of the Expansion Areas by
giving written notice ("Exercise Notice") to Landlord on or before the Notice
Date, as defined in Subparagraph D of this Paragraph 2, in respect of such
Expansion Area. If Tenant fails timely to give such notice, Tenant shall have no
further right to lease such Expansion Area, time being of the essence of this
Paragraph 2. Upon the timely giving of such notice, Landlord shall lease and
demise to Tenant, and Tenant shall hire and take from Landlord, such Expansion
Area, without the need for further act or deed by either party, for the term and
upon all of the same terms and conditions of this Lease, except as hereinafter
set forth.
C. EXPIRATION DATES OF OTHER LEASES IN EXPANSION AREA
Landlord hereby agrees that unless Tenant's right to lease an
Expansion Area has lapsed unexercised or has not been timely and properly
exercised, Landlord has not and will not enter into a Prohibited Expansion Area
Lease, as hereinafter defined. For the purposes hereof, a "Prohibited Expansion
Area Lease" shall be defined as a lease of an Expansion Area, the term of which
expires after the Expiration Period in respect of such Expansion Area, as set
forth below. Landlord shall advise Tenant, upon written request made from time
to time during the initial term of the Lease, of the expiration date of the
lease of any tenant of any of the Expansion Areas.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
Expansion Area Expiration Period
- -------------------------------------------------------------------------------------------------------------
<S> <C>
Expansion Area A July 1, 2003-December 31, 2003
- -------------------------------------------------------------------------------------------------------------
</TABLE>
-3-
<PAGE> 138
<TABLE>
- -------------------------------------------------------------------------------------------------------------
<S> <C>
Expansion Area B July 1, 2004-December 31, 2004
- -------------------------------------------------------------------------------------------------------------
Expansion Area C Not applicable; Landlord agrees not to lease
Expansion Area C to another tenant prior to the
Notice Date with respect to Expansion Area C.
- -------------------------------------------------------------------------------------------------------------
</TABLE>
D. NOTICE DATE
The Notice Date in respect of each of the Expansion Areas shall be
defined as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
Expansion Area Notice Date
- -------------------------------------------------------------------------------------------------------------
<S> <C>
Expansion Area A April 1, 2002
- -------------------------------------------------------------------------------------------------------------
Expansion Area B April 1, 2003
- -------------------------------------------------------------------------------------------------------------
Expansion Area C May 10, 1999. Tenant's notice to Landlord
exercising its option with respect to Expansion
Area C shall specify the size of the portion of
the tenth (10th) floor desired to be rented by
Tenant.
- -------------------------------------------------------------------------------------------------------------
</TABLE>
E. LEASE PROVISIONS APPLYING TO EXPANSION AREA
The leasing to Tenant of each Expansion Area shall be upon all the
same terms and conditions of the Lease except as follows:
(i) TERM COMMENCEMENT DATE AND RENT COMMENCEMENT DATE
With respect to Expansion Areas A and B, if no tenant is
occupying an Expansion Area during the Expiration Period in respect of such
Expansion Area, then the Rent Commencement Date in respect of such Expansion
Area shall be the first day of the Expiration Period. Otherwise, the Rent
Commencement Date in respect of such Expansion Area shall be the later of the
day after: (i) the expiration date of the lease of the tenant occupying such
Expansion Area, and (ii) the date that such tenant (and anyone claiming by,
through or under such tenant) vacates the Expansion Area and has no further
rights to occupy such Expansion Area. If the tenant (or anyone claiming by,
through or under such tenant) occupying such Expansion Area fails to vacate the
Expansion Area at the expiration of its lease, then Landlord shall use
reasonable efforts to obtain possession of such Expansion Area for Tenant,
including, without limitation, commencing eviction proceedings. With respect to
Expansion Area C, the Rent Commencement Date in respect of such Expansion Area
shall be the Rent Commencement Date in respect of Floors 2-6. The Term
Commencement Date in respect of each Expansion Area shall be the Rent
Commencement date in respect of such Expansion Area.
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<PAGE> 139
(ii) YEARLY RENT
The Yearly Rent payable in respect of each of the Expansion Areas
shall be as set forth below:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
Expansion Area Yearly Rent
- -------------------------------------------------------------------------------------------------------------
<S> <C>
Expansion Area A The Fair Market Rental Value, as defined in
Paragraph 4 of this Rider, of Expansion Area A
- -------------------------------------------------------------------------------------------------------------
Expansion Area B The Fair Market Rental Value, as defined in
Paragraph 4 of this Rider, of Expansion Area B
- -------------------------------------------------------------------------------------------------------------
Expansion Area C Twelve and 00/100 Dollars ($12.00) per square
foot of Total Rentable Area of Expansion Area C
- -------------------------------------------------------------------------------------------------------------
</TABLE>
Notwithstanding anything to the contrary in this Lease contained, Landlord shall
not be obligated to provide any cleaning or other services to Expansion Area C,
and the Total Rentable Area of Expansion Area C shall not be taken into account
in determining the Operating Expense Excess and Tax Excess payable by Tenant
under this Lease - in other words, no Operating Expense Excess and Tax Excess
shall be due on account of Expansion Area C.
(iii) CONDITION OF EXPANSION AREA
Each Expansion Area shall be delivered by Landlord and accepted
by Tenant "as-is", in its then state of construction, finish and decoration on
the Notice Date in respect of such Expansion Area, subject to reasonable wear
and tear and the rights of the existing tenant of such Expansion Area to remove
items therefrom, to the extent any such rights exist under such tenant's lease
as of the date the Fair Market Rental Value in respect of such Expansion Area is
established, without any obligation on the part of Landlord to prepare or
construct the Expansion Area for Tenant's occupancy. In implementation of the
foregoing, Landlord shall have no obligation under Article 4 or Exhibit 4 of the
Lease, and Landlord shall not be obligated to perform any Base Building Work or
provide a Landlord's Construction Allowance, in respect of such Expansion Area.
(iv) PARKING
The number of parking passes available for Tenant's use, pursuant
to the terms hereof, in connection with Expansion Area A and Expansion Area B
shall be as specified by Landlord, but shall not be less than 1.5 passes per
1,000 square feet of Total Rentable Area in such Expansion Area. Such parking
passes shall be subject to the terms and conditions of this Lease including
without limitation, Article 2 of the Lease.
-5-
<PAGE> 140
Landlord shall not be obligated to make any parking passes available for
Tenant's use in connection with Expansion Area C.
F. Notwithstanding the fact that Tenant's exercise of the above-described
expansion option shall be self-executing, as aforesaid, the parties hereby agree
promptly to execute a lease amendment reflecting the addition of an Expansion
Area, except that the Yearly Rent payable in respect of such Expansion Area, the
Tax Base in respect of such Expansion Area and the Operating Costs in the Base
Year in respect of such Expansion Area shall not be as set forth in such
Amendment. Subsequently, after such Yearly Rent, Tax Base and Operating Costs in
the Base Year are determined, the parties shall execute a written agreement
confirming the same. The execution of such lease amendment shall not be deemed
to waive any of the conditions to Tenant's exercise of the herein expansion
options, unless otherwise specifically provided in such lease amendment.
3. TENANT'S RIGHT OF FIRST OFFER
On the conditions (which conditions Landlord may waive, at its election, by
written notice to Tenant at any time) that Tenant is not in default of its
covenants and obligations under the Lease at the time that Landlord is required
to give Landlord's Notice (as hereinafter defined), (or Tenant cures any such
default within seven (7) days after Landlord provides Landlord's Notice), and
that the Occupancy Condition, as defined in Paragraph 1 of this Rider, is
satisfied as of the Term Commencement Date in respect of the RFO Premises (as
hereinafter defined), Tenant shall have the following right to lease the RFO
Premises, as hereinafter defined, when the RFO Premises become available for
lease to Tenant, as hereinafter defined.
A. DEFINITION OF RFO PREMISES
"RFO Premises" shall be defined as (i) any separately demised area
containing at least one (1) full floor located in the building known as 575
Technology Square ("RFO Premises A") and (ii) the entire Lower Level of the
Building, containing 14,669 square feet of Total Rentable Area ("RFO Premises
B"), in either case, when such area becomes available for lease to Tenant, as
hereinafter defined. As to RFO Premises A, Tenant's rights under this Paragraph
3 shall only extend to the first two (2) full floors located in 575 Technology
Square which become "available for lease", as hereinafter defined (i.e., after
Landlord has offered Tenant two (2) full floors in 575 Technology Square as RFO
Premises A, Tenant shall have no right to lease RFO Premises A). For the
purposes of this Paragraph 3, an RFO Premises shall be deemed to be "available
for lease to Tenant" if Landlord, in its sole judgment, determines that such
area will become available for leasing to Tenant (i.e., when Landlord determines
that the then current tenant of such RFO Premises will vacate such RFO Premises,
and when Landlord intends to offer such area for lease). In the event that
either or both of the RFO Premises are vacant as of the Rent Commencement Date
in respect of Portion 2-6, then in no event shall such RFO Premises be deemed to
be "available for lease to Tenant" until such RFO Premises have been leased to a
third party, and thereafter Landlord determines that such third party tenant of
such RFO Premises will vacate such RFO Premises, and then
-6-
<PAGE> 141
Landlord intends to offer such area for lease. However, if three (3) years or
more have expired following the Rent Commencement Date in respect of Portion
2-6, and such vacant RFO Premises has not been leased to a third party, then
such RFO Premises shall be deemed "available for lease to Tenant" on the third
(3rd) anniversary of the Rent Commencement Date in respect of Portion 2-6
("Vacant RFO Premises"). Landlord specifically reserves the right to grant other
tenants rights in the second floor which becomes available for lease to Tenant
as RFO Premises A, which rights will take precedence over Tenant's rights
pursuant to this Paragraph 3. Notwithstanding anything to the contrary herein
contained, Landlord shall have no obligation to provide a Landlord's Notice and
Landlord shall have right, without restriction or limitation, to lease or grant
rights to other tenants in any RFO Premises during the following periods: (i)
the last twelve months ("Last Year") of the current term of the Lease (i.e.
taking into account any extension options which have been previously exercised
by Tenant, and (ii) after the fifth (5th) anniversary of the Rent Commencement
Date in respect of Portion 2-6 except during any twelve (12) month commencing as
the date that Landlord receives an Interest Notice, as hereinafter defined. An
"Interest Notice" shall be a written notice from Tenant to Landlord that Tenant
is interested in leasing any remaining RFO Premises which may become available
for lease during the next following twelve (12) month period. Tenant may give
Interest Notice from time to time during the term of the Lease, except that
Tenant shall have no right to give an Interest Notice with respect to any
portion of the Last Year.
B. EXERCISE OF RIGHT TO LEASE RFO PREMISES
Landlord shall give Tenant written notice ("Landlord's Notice") at the
time that Landlord determines, as aforesaid, that an RFO Premises will become
available for lease to Tenant; provided however, that in no event shall Landlord
give a Landlord's Notice more than eighteen (18) months prior to the Specified
Commencement Date in respect of such RFO Premises in question. A Landlord's
Notice may specify one or more RFO Premises as being available for lease to
Tenant. Landlord's Notice shall set forth the exact locations of the RFO
Premises, Landlord's initial designation of the Fair Market Rental Value (as
defined in Paragraph 4 hereof) applicable to the RFO Premises and the date the
term of the Lease in respect of the RFO Premises shall commence, which date
shall not be earlier than twenty (20) days following the date Tenant receives
Landlord's Notice ("Specified Commencement Date"). Tenant shall have the right,
exercisable upon written notice ("Tenant's Exercise Notice") given to Landlord
within twenty (20) days after the receipt of Landlord's Notice, to lease the RFO
Premises specified in Landlord's Notice, or if Landlord's Notice contains more
than one (1) RFO Premises, Tenant shall have the right to lease any one or more
of the RFO Premises specified in Landlord's Notice. If Tenant fails timely to
give Tenant's Exercise Notice, Tenant shall have no further right to lease such
RFO Premises pursuant to this Paragraph 3, provided however, that Tenant shall
have the right from time to time thereafter throughout the term of the Lease
until Tenant's right to lease the RFO Premises has lapsed, to give Tenant's
Exercise Notice as to any other subsequently available RFO Premises, and
provided further, that if the Vacant RFO Premises have not been leased by
Landlord to a third party within one (1) year after the date of Landlord's
Notice in respect of such Vacant RFO Premises, then Landlord shall give Tenant a
subsequent Landlord's Notice with
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<PAGE> 142
respect to the Vacant RFO Premises after the expiration of said one (1) year
period. Upon the timely giving of such notice, Landlord shall lease and demise
to Tenant and Tenant shall hire and take from Landlord, such RFO Premises
specified in the Tenant's Exercise Notice, upon all of the same terms and
conditions of the Lease except as hereinafter set forth.
C. LEASE PROVISIONS APPLYING TO RFO PREMISES
The leasing to Tenant of such RFO Premises shall be upon all of the
same terms and conditions of the Lease, except as follows:
(i) TERM COMMENCEMENT DATE AND RENT COMMENCEMENT DATE
The Term Commencement Date in respect of such RFO Premises shall be
the later of: (x) the Specified Commencement Date in respect of such RFO
Premises or (y) the date that Landlord actually delivers such RFO Premises to
Tenant pursuant to the terms of clause (iii) below.
(ii) YEARLY RENT
The Yearly Rent rental rate in respect of such RFO Premises shall be
based upon the Fair Market Rental Value, as defined in Paragraph 4 of this
Rider, of such RFO Premises as of the Term Commencement Date in respect of such
RFO Premises.
(iii) CONDITION OF RFO PREMISES
Tenant shall take such RFO Premises "as-is" in its then state of
construction, finish, and decoration on the date of Tenant's Exercise Notice,
subject to reasonable wear and tear and the right of the existing tenant of such
RFO Premises to remove items therefrom to the extent any such rights exist under
such tenant's lease as of the date the Fair Market Rental Value in respect of
such RFO Premises is established, without any obligation on the part of Landlord
to construct or prepare any RFO Premises for Tenant's occupancy. In
implementation of the foregoing, Landlord shall have no obligation under Article
4 or Exhibit 4 of the Lease, and Landlord shall not be obligated to perform any
Base Building Work or provide a Landlord's Construction Allowance, in respect of
such RFO Premises. The RFO Premises shall be delivered by Landlord to Tenant
free and clear of all tenants (and anyone claiming by, through or under any
tenants). If on the Specified Commencement Date in respect of the RFO Premises,
a tenant (or anyone claiming by, through or under any tenant) has failed to
vacate the RFO Premises, then Landlord shall use reasonable efforts to obtain
possession of such RFO Premises for Tenant, including, without limitation,
commencing eviction proceedings.
D. EXECUTION OF LEASE AMENDMENTS
Notwithstanding the fact that Tenant's exercise of the above-described
option to lease RFO Premises shall be self-executing, as aforesaid, the parties
hereby agree to promptly execute a lease amendment reflecting the addition of an
RFO Premises,
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except that the Yearly Rent payable in respect of such RFO Premises, Operating
Costs in the Base Year in respect of such RFO Premises, and Tax Base in respect
of such RFO Premises may not be as set forth in such Amendment. At the time that
such Yearly Rent, Operating Costs in the Base Year and Tax Base are determined,
the parties shall execute a written agreement confirming the same. The execution
of such lease amendment shall not be deemed to waive any of the conditions to
Tenant's exercise of the herein option to lease the RFO Premises, unless
otherwise specifically provided in such lease amendment.
4. DEFINITION OF FAIR MARKET RENTAL VALUE
For the purposes of this Rider:
A. "Fair Market Rental Value" shall be computed as of the date in
question at the then current annual rental charge (i.e., the sum of Yearly rent
plus escalation and other charges), including provisions for subsequent
increases and other adjustments, for leases or agreements to lease then
currently executed or memorialized by fully executed letters of intent (or term
sheets) for comparable office space located in the Complex, and in comparable
office space located elsewhere in first-class office buildings comparable to the
Complex located in the Market Area. In determining Fair Market Rental Value, all
relevant factors shall be taken into account and given effect.
B. Notwithstanding anything to the contrary herein contained, the parties
hereby agree that, in the determination of any Fair Market Rental Value,
Operating Costs in the Base Year shall be changed from the amount stated in
Exhibit 1 to an amount equal to the actual amount of Operating Costs for the
Operating Year immediately preceding the effective date for the determination of
such Fair Market Rental Value, and the Tax Base shall be changed from the amount
stated on Exhibit 1 to an amount equal to the actual amount of Taxes for the
most recent fiscal/tax year for which Landlord has actual data.
C. DISPUTES AS TO FAIR MARKET RENTAL VALUE
(i) Landlord shall initially designate Fair Market Rental Value and
Landlord shall furnish data in support of such designation. If Tenant disagrees
with Landlord's designation of a Fair Market Rental Value, Tenant shall have the
right, by written notice given within thirty (30) days after Tenant has been
notified of Landlord's designation, to request a dialogue with Landlord to
arrive at a mutually acceptable Fair Market Rental Value. If the parties are
unable so to agree within thirty (30) days after Tenant's notice to Landlord,
then they shall submit the determination of such Fair Market Rental Value to
arbitration. Fair Market Rental Value shall be submitted to arbitration as
follows:
(ii) Fair Market Rental Value shall be determined by impartial arbitrators,
one to be chosen by the Landlord, one to be chosen by the Tenant, and a third to
be selected, if necessary, as below provided. The unanimous written decision of
the two first chosen, without any hearings and without selection and
participation of a third arbitrator, or otherwise, the written decision of a
majority of three arbitrators chosen and selected as aforesaid, shall be
conclusive and binding upon Landlord and Tenant. Landlord and
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Tenant shall each notify the other of its chosen arbitrator within ten (10) days
following the call for arbitration and, unless such two arbitrators shall have
reached a unanimous decision within thirty (30) days after designation, they
shall so notify the President of the Boston Bar Association (or such
organization as may succeed to said Boston Bar Association) and request him or
her to select an impartial third arbitrator. All arbitrators shall have at least
ten (10) years' experience as a real estate broker dealing with like types of
properties, to determine Fair Market Rental Value as herein defined.
(iii) In submitting the determination of Fair Market Rental Value to
arbitration, each party shall submit in writing its last and best offer to the
other party of Fair Market Rental Value, and the arbitrators' determination of
Fair Market Rental Value shall not be less than Tenant's last and best offer nor
greater than Landlord's last and best offer.
(iv) Such third arbitrator and the first two chosen shall, subject to
commercial arbitration rules of the American Arbitration Association, hear the
parties and their evidence and render their decision within thirty (30) days
following the conclusion of such hearing and notify Landlord and Tenant thereof.
(v) Landlord and Tenant shall bear the expense of the third arbitrator (if
any) equally.
(vi) The decision of the arbitrators shall be binding and conclusive, and
judgment upon the award or decision of the arbitrators may be entered in the
appropriate court of law (as identified on Exhibit 1); and the parties consent
to the jurisdiction of such court and further agree that any process or notice
of motion or other application to the Court or a Judge thereof may be served
outside the Commonwealth of Massachusetts by registered mail or by personal
service, provided a reasonable time for appearance is allowed.
(vii) If the dispute between the parties as to a Fair Market Rental Value
has not been resolved before the commencement of Tenant's obligation to pay rent
based upon such Fair Market Rental Value, then Tenant shall pay Yearly Rent and
other charges under the Lease in respect of the premises in question based upon
Fair Market Rental Value designated by Landlord until either the agreement of
the partes as to the Fair Market Rental Value, or the decision of the
arbitrators, as the case may be, at which time Tenant shall pay any underpayment
of rent and other charges to Landlord, or Landlord shall refund to Tenant any
overpayment of rent and other charges.
5. BUILDING RESTRICTIONS
A. Landlord agrees that for so long as Tenant is not then in default
under this Lease and Forrester Research, Inc., itself is then in occupancy of at
least 100,000 square feet of Total Rentable Area of the Premises, (i) Landlord
will not enter into another lease of space in the Complex which lease (by its
terms) has as a tenant any of the following entities: Gartner Group, Inc.; META
Group, Inc.; GIGA Information Group, Inc.; Jupiter Communications; The Yankee
Group, a subsidiary of Primark corporation; Odyssey Research; or Mainspring
Communications, Inc., and (ii) Landlord will not enter into
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another lease of space in the Building which lease (by its terms) permits the
use of the premises demised thereunder for a so-called "wet laboratory," which
for purposes of this Lease shall mean laboratory space including fume hoods and
multiple sinks. Furthermore, Landlord shall include a provision in each lease
executed after the Term Commencement Date prohibiting assignments and subleases
to an entity or for a use which would violate either of the foregoing
restrictions. Notwithstanding anything to the contrary herein contained: (x) the
provisions of clause (i) of this Paragraph 5 shall not apply to any lease which
Landlord has or may have with MIT in Building 545, and (y) the provisions of
clause (i) of this Paragraph 5 shall not apply to any lease which Landlord has
with Draper Labs if Draper Labs leases space in the Building or Complex pursuant
to the rights and options which currently exist in the lease with Draper Labs.
In the event another tenant or other occupant of the Complex uses its premises
in violation of its lease, the same shall not relieve Tenant from any of its
obligations under this Lease nor constitute a breach of this Lease by Landlord
and Landlord shall have no liability whatsoever to Tenant on account thereof,
except that at Tenant's request and expense, Landlord shall use reasonable
efforts to enforce the provisions of such other tenant's lease prohibiting the
use of its premises as set forth above. (In using such reasonable efforts,
Landlord shall not, however, be required to terminate such other tenant's lease
or to evict such other tenant or occupant from its premises).
B. Notwithstanding anything to the contrary contained in the foregoing,
Landlord's obligations under this Paragraph 5 shall be subject to all applicable
laws; and inasmuch as this Paragraph 5 has been included in this Lease at the
request, and for the sole benefit of, Tenant, in the event that Landlord is made
party to any action or proceeding based upon a claim that the existence or
operation of the provisions of this Paragraph 5 violates Anti-Trust, unfair
competition, or similar laws, then Tenant shall indemnify, defend and hold
harmless Landlord against and from such claims, suits, attorneys' fees,
liabilities, costs, damages and expenses incurred by Landlord in connection with
such action or proceeding.
6. TERM COMMENCEMENT DATE WITH RESPECT TO FLOOR 8
A. Landlord hereby agrees that if Floor 8 is occupied by another tenant
during the Expiration Period, as hereinafter defined, the expiration date of the
lease of such tenant shall occur during the period ("Expiration Period")
commencing as of July 1, 2002 and terminating as of December 31, 2002. Landlord
shall advise Tenant, upon written request made from time to time during the
initial term of the Lease, of the expiration date of the lease of any tenant of
Floor 8.
B. If no tenant is occupying Floor 8 during the Expiration Period in
respect of such Floor 8, then the Term Commencement Date in respect of Floor 8
shall be the first day of the Expiration Period. Otherwise, the Term
Commencement Date in respect of Floor 8 shall be the later of: (i) the
expiration date of the lease of the tenant occupying Floor 8, and (ii) the date
that such tenant vacates Floor 8. The Rent Commencement Date in respect of Floor
8 shall be the Term Commencement date in respect of Floor 8.
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<PAGE> 146
C. Tenant shall take Floor 8 "as-is" in its then (i.e. as of the date of
premises delivery) state of construction, finish, and decoration, without any
obligation on the part of Landlord to construct or prepare Floor 8 for Tenant's
occupancy. In implementation of the foregoing, Landlord shall have no obligation
under Article 4 or Exhibit 4 of the Lease in respect of such Floor 8. Floor 8
shall be delivered by Landlord to Tenant free and clear of all tenants (and
anyone claiming by, through or under any tenants). If the tenant (or anyone
claiming by, through or under such tenant) occupying Floor 8 fails to vacate
Floor 8 at the expiration of its lease, then Landlord shall use reasonable
efforts to obtain possession of Floor 8 for Tenant, including, without
limitation, commencing eviction proceedings.
(i) Notwithstanding anything to the contrary herein contained, if
Floor 8 has not previously been built out, then Landlord shall, in the manner
hereinafter set forth, provide to Tenant a contribution ("Floor 8 Contribution")
equal to the product of (x) $654,979.50 (i.e., $31.50 multiplied by the Total
Rentable Area of Floor 8) multiplied by (y) a fraction, the numerator of which
is the number of months, or portion thereof, between the Term Commencement Date
in respect of Floor 8 and the initial Termination Date, and the denominator of
which is eighty-four (84). Provided that Tenant is not in default under the
Lease at the time that Tenant submits any requisition on account of the Floor 8
Contribution, Landlord shall pay the cost of the work shown on each requisition
(as hereinafter defined) submitted by Tenant to Landlord within thirty (30) days
of submission thereof by Tenant to Landlord.
(ii) For the purposes hereof, a "requisition" shall mean written
documentation (including, without limitation, invoices from Tenant's contractor,
written lien waivers and such other documentation as Landlord's mortgagee may
reasonably request) showing in reasonable detail the costs of the improvements
installed to date in Floor 8, accompanied by certifications from Tenant,
Tenant's architect, and Tenant's contractor that the work performed to date has
been performed in accordance with applicable laws and in accordance with
Tenant's approved plans, and that the amount of the requisition in question does
not exceed the amount of the work covered by such requisition. Each requisition
shall be accompanied by evidence reasonable satisfactory to Landlord that all
work covered by previous requisitions has been fully paid by Tenant. Landlord
shall have the right, upon reasonable advance notice to Tenant, to inspect
Tenant's books and records relating to each requisition in order to verify the
amount thereof. Tenant shall submit requisition(s) no more often than monthly.
(iii) Notwithstanding anything to the contrary herein contained:
(a) Landlord shall have no obligation to advance funds on
account of the Floor 8 Contribution unless and until Landlord has
received the requisition in question, together with the certifications
required above, certifying that the work shown on the requisition has
been performed in accordance with applicable law and in accordance
with Tenant's plans.
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(b) Except with respect to work and/or material previously paid
for by Tenant, as evidenced by paid invoices and written lien waivers
provided to Landlord, Landlord shall have the right to have the Floor
8 Contribution paid to both Tenant and Tenant's contractor(s) and
vendor(s) jointly.
(c) Tenant shall not be entitled to any portion of the Floor 8
Contribution, and Landlord shall have no obligation to pay the Floor 8
Contribution in respect of any requisition submitted after the date
which is three(3) months after the Term Commencement Date in respect
of Floor 8.
(d) Tenant shall have no right to any unused portion of the
Floor 8 Contribution.
(iv) If Floor 8 has previously been built out as other than office
premises, then Landlord shall build out Floor 8 as office premises
consistent with the Premises (in which event the Term Commencement Date and
the Rent Commencement Date in respect of Floor 8 shall be the date that
Floor 8 is deemed to be Substantially Complete) or, at Landlord's election,
Landlord shall increase the Floor 8 Contribution by the amount necessary to
demolish the Floor 8 improvements.
7. ANTENNA AREA
Tenant shall have the right to use the Antenna Area, as hereinafter
defined, to install, use, improve, repair and replace a satellite dish antenna
or other similar equipment ("Antenna") for a period commencing as of the date
that Tenant installs the Antenna, as hereinafter defined, in the Antenna Area
("Term Commencement Date in respect of the Antenna Area") and continuing
throughout the term of this Lease, provided however, that prior to the Term
Commencement Date in respect of the Antenna Area, Landlord shall reserve areas
on the roofs of the Building for the Antenna Area. The "Antenna Area" shall be
an area on the 11th floor roof of the Building containing approximately 100
square feet in a location to be mutually agreed upon by Landlord and Tenant.
Tenant shall be permitted to use the Antenna Area solely for one or more
Antennae installed in accordance with specifications approved by Landlord in
advance utilizing a frequency or frequencies and transmission power identified
in such approved specifications and no other frequencies or transmission power
shall be used by Tenant without Landlord's prior written consent, which consent
shall not be unreasonably withheld, conditioned or delayed. Such installation
shall be designed in such manner as to be easily removable and so as not to
damage the roof of the Building. The Antenna and any replacement shall be
subject to Landlord's approval. Tenant's use of the Antenna Area shall be upon
all of the conditions of the Lease, except as follows:
A. Subject to Subparagraph H of this Paragraph 7, the Yearly Rent in
respect of the Antenna Area shall be Zero Dollars;
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B. Tenant shall have no obligation to pay Tax Excess or Operating Expense
Excess in respect of the Antenna Area.
C. Landlord shall have no obligation to provide any services to the
Antenna Area, except for those services that Landlord is obligated under this
Lease to provide in respect of the roof of the Building generally, subject to
Subparagraph G of this Paragraph 7.
D. Tenant shall have no right to make any material changes, alterations,
signs, decoration, or other improvements (which changes, alterations, signs,
decoration or other improvements, together with the Antenna, are hereby
collectively referred to as "Rooftop Installations") to the Antenna Area or to
the Antenna without Landlord's prior written consent, which consent shall,
subject to Paragraph P hereof, not be unreasonably withheld, conditioned or
delayed.
E. Tenant shall have no right of access to the roof of the Building
unless Tenant has given Landlord reasonable advance notice and unless Tenant's
representatives are accompanied by a representative of Landlord. Landlord shall
provide Tenant with 24-hour access to the Antenna Area, subject to Landlord's
reasonable security procedures and restrictions based on emergency conditions
and to other causes beyond Landlord's reasonable control. Tenant shall give
Landlord reasonable advance written notice of the need for access to the Antenna
Area (except that such notice may be oral in an emergency), and a representative
of Landlord must be present during any entry by Tenant onto the Antenna Area.
Each notice for access shall be in the form of a work order referencing the
lease and describing, as applicable, the date access is needed, the name of the
contractor or other personnel requiring access, the name of the supervisor
authorizing the access/work, the areas to which access is required, the Building
common elements to be impacted (risers, electrical rooms, etc.) and the
description of new equipment or other Rooftop Installations to be installed and
evidence of Landlord's approval thereof. In the event of an emergency, such
notice shall follow within five (5) days after access to the Antenna Area.
F. At the expiration or prior termination of Tenant's right to use the
Antenna Area, Tenant shall remove all Rooftop Installations (including, without
limitation, the Antenna) from the Antenna Area.
G. Tenant shall be responsible for the cost of repairing any damage to
the roof of the Building caused by the installation or removal of any Rooftop
Installations.
H. Tenant shall have no right to assign or sublet the Antenna Area,
except that permitted assignees or subtenants under Article 16 of the Lease
shall be permitted to use the Antenna Area, provided that such assignees and
subtenants (other than an Affiliate of Tenant and/or a Permitted Tenant
Successor) pay to Landlord directly a rental equal to the market rate then being
charged by Landlord for use of rooftop areas for similar use in the Market Area.
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I. No other person, firm or entity (including, without limitation, other
tenants, licensees or occupants of the Building) shall have the right to benefit
from the services provided by the Rooftop Installations other than Tenant, and,
subject to Subparagraph H hereof, its permitted assignees and subtenants under
Article 16 of the Lease.
J. In the event that Landlord performs repairs to or replacement of the
roof and it is reasonably necessary to remove the Rooftop Installations in order
for Landlord to perform such repairs or replacement, Tenant shall, upon
reasonable prior written notice, at Tenant's cost, remove the Rooftop
Installations until such time as Landlord has completed such repairs or
replacements. Tenant recognizes that there may be an interference with Tenant's
use of the Rooftop Installations in connection with such work. Landlord shall
use reasonable efforts to complete such work as promptly as possible and to
perform such work in a manner which will minimize or, if reasonably possible,
eliminate any interruption in Tenant's use of the Rooftop Installations.
K. Any services required by Tenant in connection with Tenant's use of the
Antenna Area or the Rooftop Installations shall be installed by Tenant, at
Tenant's expense, subject to Landlord's prior approval, which approval shall not
be unreasonably withheld, delayed or conditioned.
L. To the maximum extent permitted by law, all Rooftop Installations in
the Antenna Area shall be at the sole risk of Tenant, and Landlord shall have no
liability to Tenant in the event that any Rooftop Installations are damaged,
except however, subject to Article 19 of the Lease, Landlord shall be
responsible for damage to the Rooftop Installations caused by the negligence or
willful misconduct of Landlord or those for whom Landlord is legally
responsible.
M. Tenant shall take the Antenna Area "as-is" in the condition in which
the Antenna Area is in as of the Commencement Date in respect of the Antenna
Area.
N. Tenant shall comply with all applicable laws, ordinances and
regulations in Tenant's use of the Antenna Area and the Rooftop Installations.
O. Landlord shall have the right, upon thirty (30) days' notice to
Tenant, to require Tenant to relocate the Antenna Area to another area
("Relocated Rooftop Area") on the roof of the Building in a location to be
mutually agreed upon by Landlord and Tenant. In such event, Tenant shall, at
Landlord's cost and expense, on or before the thirtieth (30th) day after
Landlord gives such notice, relocate all of its Rooftop Installations from the
Antenna Area to the Relocated Rooftop Area, but only if Landlord has provided
Tenant with uninterrupted access to the Relocated Rooftop Area prior to the
expiration of such 30-day period, so as to allow Tenant, in accordance with this
Paragraph 7, to set-up an antenna to prevent any interruption in Tenant's
receiving and transmitting capabilities.
P. In addition to complying with the applicable construction provisions
of the Lease, Tenant shall not install or operate Rooftop Installations in any
portion of the
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Antenna Area until (x) Tenant shall have obtained Landlord's prior written
approval, which approval will not be unreasonably withheld or delayed, of
Tenant's plans and specifications for the placement and installation of the
Rooftop Installations in the Premises, and (y) Tenant shall have obtained and
delivered to Landlord copies of all required governmental and quasi-governmental
permits, approvals, licenses and authorizations necessary for the lawful
installation, operation and maintenance of the Rooftop Installations. The
parties hereby acknowledge and agree, by way of illustration and not limitation,
that Landlord shall have the right to withhold its approval of Tenant's plans
and specifications hereunder, and shall not be deemed to be unreasonable in
doing so, if Tenant's intended placement or method of installation or operation
of the Rooftop Installations (i) is reasonably likely to subject other
licensees, tenants or occupants of the Building, or other surrounding or
neighboring landowners or their occupants, to signal interference, Tenant hereby
acknowledging that a shield may be required in order to prevent such
interference, (ii) does not minimize to the fullest extent reasonably
practicable the obstruction of the views from the windows of the Building that
are adjacent to the Rooftop Installations, if any, (iii) does not complement (in
Landlord's sole judgment, which shall not, however, require Tenant to incur
unreasonable expense) the design and finish of the Building, (iv) is reasonably
likely to damage the structural integrity of the Building or the roof thereof,
or (v) is reasonably likely to constitute a violation of any consent, approval,
permit or authorization necessary for the lawful installation of the Rooftop
Installations.
Q. In addition to the indemnification provisions set forth in this Lease,
which shall be applicable to the Antenna Area, Tenant shall, to the maximum
extent permitted by law, indemnify, defend, and hold Landlord, its agents,
contractors and employees harmless from any and all claims, losses, demands,
actions or causes of actions suffered by any person, firm, corporation, or other
entity arising from Tenant's use of the Antenna Area.
R. Landlord shall have the right to designate or identify the Rooftop
Installations with or by a lease or license number (or other marking) and to
place such number (or marking) on or near such Rooftop Installations.
S. From and after the date that Tenant installs the Rooftop
Installations, Landlord will use reasonable efforts to avoid installation by
another tenant or Landlord of an antenna or other installation on the roof of
the Building which will interfere with the operation of the Rooftop
Installations. If, during the term of this Lease, another tenant's antenna or
other rooftop installation interferes with the operation of the Rooftop
Installations, then Landlord shall, at Landlord's expense, relocate the Rooftop
Installations to a Relocated Rooftop Area, as defined in Subparagraph O of this
Paragraph 7.
T. (i) Tenant recognizes that Landlord may wish to (and Landlord hereby
reserves the right to) install a central Building system (the "Central Building
System") capable of, among other things, providing Tenant with the type of
service (to be) provided by Tenant's Rooftop Installations. If Landlord elects
to install the Central Building System, (i) Tenant and, subject to Subparagraph
H hereof, its permitted
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assignees and subtenants may, at Tenant's expense, and subject to the provisions
of this Agreement (including, without limitation, subparagraph P hereof), have
access to and use (and tie into) the Central Building System for the uses
permitted hereunder, and (ii) commencing upon Tenant's use of the Central
Building System and continuing thereafter throughout the term, the Yearly Rent
payable hereunder shall be adjusted to be that which is reasonably designated by
Landlord from time to time based upon Landlord's determination of the fair
market value of the access rights to the Central Building System granted herein.
(ii) Landlord shall maintain, repair or replace the Central Building
System, in accordance with the standards for the repair and maintenance of such
systems generally prevailing in the industry from time to time, so as to
eliminate any material interruption or other adverse effects caused by
malfunction, damage or destruction of the Central Building System, the cost of
which shall be borne by Tenant if the problem was caused by the negligence or
willful misconduct of Tenant or its agents, contractors or employees.
Notwithstanding the foregoing, Landlord's obligation to maintain, repair or
replace the Central Building System shall apply only to the extent necessary to
reach premises in the Building that are then used by tenants after the
malfunction, damage or destruction or that, if damaged or destroyed, will be
again used by tenants upon the completion of restoration or repair thereof. In
no event shall Tenant have any claim or right to make any claim against Landlord
whatsoever for any damages, including, without limitation, consequential or
incidental damages, or lost profits, in any such circumstance.
8. SECURITY DEPOSIT IN RESPECT OF CONSTRUCTION RENT
A. Tenant acknowledges that Landlord is unwilling to provide Landlord's
Additional Contribution unless Tenant provides Landlord with security for
Tenant's obligations to pay Construction Rent under the Lease. Therefore, Tenant
shall deliver to Landlord, on the date that Tenant delivers its election to have
Landlord provide Landlord's Additional Contribution to Landlord, cash or an
Irrevocable Standby Letter of Credit ("Letter of Credit") which shall be (1) in
the case of a Letter of Credit, in the form attached hereto as Exhibit 8, and
issued by a bank reasonably acceptable to Landlord upon which presentment may be
made in Boston, MA, and for a term of one (1) year, subject to the provisions of
Subparagraph D of this Paragraph 8, and (2) in the case of cash or a Letter of
Credit, equal to the Letter of Credit Amount, as hereinafter defined.
B. For the purposes hereof, the "Letter of Credit Amount" shall be
defined as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
Reduction Date Letter of Credit Amount
- -------------------------------------------------------------------------------------------------------------
<S> <C>
N/A (Initial amount) Fifty percent (50%) of the amount of the
Landlord's Additional Contribution
- -------------------------------------------------------------------------------------------------------------
First anniversary of the Term Commencement Date in Forty percent (40%) of the amount of the
respect of Portion 2-6 Landlord's Additional Contribution
- -------------------------------------------------------------------------------------------------------------
</TABLE>
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<TABLE>
- -------------------------------------------------------------------------------------------------------------
<S> <C>
Second anniversary of the Term Commencement Date in Thirty percent (30%) of the amount of the
respect of Portion 2-6 Landlord's Additional Contribution
- -------------------------------------------------------------------------------------------------------------
Third anniversary of the Term Commencement Date in Twenty percent (20%) of the amount of the
respect of Portion 2-6 Landlord's Additional Contribution
- -------------------------------------------------------------------------------------------------------------
Fourth anniversary of the Term Commencement Date in Ten percent (10%) of the amount of the
respect of Portion 2-6 Landlord's Additional Contribution
- -------------------------------------------------------------------------------------------------------------
Fifth anniversary of the Term Commencement Date in Zero
respect of Portion 2-6
- -------------------------------------------------------------------------------------------------------------
</TABLE>
If Tenant is in default of any of its obligations hereunder beyond any
applicable grace periods, then there shall be no further reductions of the
Letter of Credit Amount.
C. The Letter of Credit shall be automatically renewable in accordance
with the second to last grammatical paragraph of Exhibit 12; provided however,
that Tenant shall be required to deliver to Landlord a new Letter of Credit
satisfying the conditions set forth in Subparagraph A of this Paragraph 8
("Substitute Letter of Credit") on or before the date fifteen (15) days prior to
the expiration of the term of such Letter of Credit, if the issuer of such
Letter of Credit gives notice of its election not to renew such Letter of Credit
for any additional period pursuant thereto. Upon written request of Tenant,
Landlord shall deliver to the issuing bank an instruction authorizing the
issuing bank to reduce the Letter of Credit Amount in accordance with the
schedule set forth herein.
D. In the event that Tenant is in default, beyond the expiration of any
applicable grace periods, of its obligations under the Lease, then the Landlord
shall have the right, at any time after such event, and after having given
Tenant seven (7) additional days written notice, to draw down from said cash or
Letter of Credit (Substitute Letter of Credit or Additional Letter of Credit, as
defined below, as the case may be) the amount necessary to cure such default. In
the event of any such draw by the Landlord, Tenant shall, within fifteen (15)
business days of written demand therefor, deliver to Landlord additional cash in
the amount of such draw or an additional Letter of Credit satisfying the
foregoing conditions ("Additional Letter of Credit"), except that the amount of
such Additional Letter of Credit shall be the amount of such draw. In addition,
in the event of a termination based upon the default of Tenant under the Lease,
or a rejection of the Lease pursuant to the provisions of the Federal Bankruptcy
Code, Landlord shall have the right to draw upon the Letter of Credit (from time
to time, if necessary) to cover the full amount of damages and other amounts due
from Tenant to Landlord under the Lease. Any amounts so drawn shall, at
Landlord's election, be applied first to any unpaid rent and other charges which
were due prior to the filing of the petition for protection under the Federal
Bankruptcy Code.
-18-
<PAGE> 153
E. In the event that Tenant fails timely to deliver to Landlord a
Substitute Letter of Credit, then Landlord shall have the right, at any time
after such event, without giving any further notice to Tenant, to draw down the
Letter of Credit (or Substitute Letter of Credit and/or Additional Letter(s) of
Credit) and to hold the proceeds thereof ("Security Proceeds") in a segregated
interest bearing bank account in the name of Landlord as security for Tenant's
obligations to pay Construction Rent under the Lease in accordance with the
provisions of this Paragraph 8. If Landlord draws down the Letter of Credit (or
Substitute Letter of Credit and/or Additional Letter(s) of Credit) pursuant to
this Subparagraph E, then:
(1) Such draw and Landlord's right to hold the Security Proceeds pursuant
to this Subparagraph E shall be Landlord's sole remedy based on Tenant's failure
to timely deliver a Substitute Letter of Credit as required hereunder;
(2) Provided that Tenant has not been in default of its obligations under
the Lease as of Reduction Date following such draw, Landlord shall, upon written
request of Tenant, return to Tenant a portion of the Security Proceeds then
being held by Landlord necessary so that Landlord will be holding, as of such
Reduction Date, an amount of Security Proceeds equal to what would have been the
applicable Letter of Credit Amount.
(4) Upon the expiration or prior termination of the term of the Lease,
Landlord shall return to Tenant any Security Proceeds then being held by
Landlord, to the extent that such Security Proceeds exceed any amounts then due
from Tenant to Landlord.
F. To the extent that Landlord has not previously drawn upon any cash,
Letter of Credit, Substitute Letter of Credit, Additional Letter of Credit or
Security Proceeds (collectively "Collateral") held by Landlord, and to the
extent that Tenant is not otherwise in default of its obligations under the
Lease as of the Termination Date, Landlord shall return such Collateral to
Tenant on the Termination Date.
G. In no event shall the proceeds of any Letter of Credit be deemed to be
a prepayment of rent nor shall it be considered as a measure of liquidated
damages.
9. COURTYARD.
Landlord agrees to use reasonable efforts to obtain the necessary
governmental approvals for redesigning the courtyard of the Complex if and to
the extent that Landlord elects to apply for the necessary governmental
approvals to expand the Complex. If Landlord obtains such courtyard redesign
approvals, and if Landlord elects to move forward with construction of a new
building on the site of the building currently numbered 549 Technology Square,
then Landlord shall perform the work necessary to so redesign the courtyard in
accordance with the courtyard redesign approvals. If for any reason Landlord has
not obtained such courtyard redesign approvals by September 1, 2000, then
Landlord shall proceed to undertake a program to update and beautify the
courtyard commencing no later than September 1, 2000 and completing the same no
later than August 31, 2001.
-19-
<PAGE> 154
10. HEAT REJECTION AREA
Tenant shall have the right to use the Heat Rejection Area, as hereinafter
defined, to install, use, improve, repair and replace a computer room heat
rejection system ("Heat Rejection System") and for no other purpose for a period
commencing as of the date that Tenant installs the Heat Rejection System in the
Heat Rejection Area ("Term Commencement Date in respect of the Heat Rejection
Area") and continuing throughout the term of this Lease, provided, however, that
prior to the Term Commencement Date in respect of the Heat Rejection Area,
Landlord shall reserve an area on the roof of the Building for the Heat
Rejection Area. The "Heat Rejection Area" shall be an area on the 11th floor
roof of the Building containing approximately 200 square feet designated by
Landlord. Tenant shall be permitted to use the Heat Rejection Area solely for
one Heat Rejection System installed in accordance with specifications approved
by Landlord in advance. Such installation shall be designed in such manner as to
be easily removable and so as not to damage the roof of the Building. The Heat
Rejection System and any replacement shall be subject to Landlord's approval.
Tenant's use of the Heat Rejection Area shall be upon all of the conditions of
the Lease, except as follows:
A. The Yearly Rent in respect of the Heat Rejection Area shall be Zero
Dollars;
B. Tenant shall have no obligation to pay Tax Excess or Operating Expense
Excess in respect of the Heat Rejection Area.
C. Landlord shall have no obligation to provide any services to the Heat
Rejection Area, except for those services that Landlord is obligated under this
Lease to provide in respect of the roof of the Building generally, subject to
Subparagraph G of this Paragraph 10.
D. Tenant shall have no right to make any material changes, alterations,
signs, decoration, or other improvements (which changes, alterations, signs,
decoration or other improvements, together with the Heat Rejection System, are
hereby collectively referred to as "System Rooftop Installations") to the Heat
Rejection Area or to the Heat Rejection System without Landlord's prior written
consent, which consent shall, subject to Paragraph P hereof, not be unreasonably
withheld, conditioned or delayed.
E. Tenant shall have no right of access to the roof of the Building
unless Tenant has given Landlord reasonable advance notice and unless Tenant's
representatives are accompanied by a representative of Landlord. Landlord shall
provide Tenant with 24-hour access to the Heat Rejection Area, subject to
Landlord's reasonable security procedures and restrictions based on emergency
conditions and to other causes beyond Landlord's reasonable control. Tenant
shall give Landlord reasonable advance written notice of the need for access to
the Heat Rejection Area (except that such notice may be oral in an emergency),
and a representative of Landlord must be present during any entry by Tenant onto
the Heat Rejection Area. Each notice for access shall be in the form of a work
order referencing the lease and describing, as applicable, the date access is
needed,
-20-
<PAGE> 155
the name of the contractor or other personnel requiring access, the name of the
supervisor authorizing the access/work, the areas to which access is required,
the Building common elements to be impacted (risers, electrical rooms, etc.) and
the description of new equipment or other System Rooftop Installations to be
installed and evidence of Landlord's approval thereof. In the event of an
emergency, such notice shall follow within five (5) days after access to the
Heat Rejection Area.
F. At the expiration or prior termination of Tenant's right to use the
Heat Rejection Area, Tenant shall remove all System Rooftop Installations
(including, without limitation, the Heat Rejection System ) from the Heat
Rejection Area.
G. Tenant shall be responsible for the cost of repairing any damage to
the roof of the Building caused by the installation or removal of any System
Rooftop Installations.
H. Tenant shall have no right to assign or sublet the Heat Rejection
Area, except that permitted assignees or subtenants under Article 16 of the
Lease shall be permitted to use the Heat Rejection Area.
I. No other person, firm or entity (including, without limitation, other
tenants, licensees or occupants of the Building) shall have the right to benefit
from the services provided by the Heat Rejection System other than Tenant, and,
subject to Subparagraph H hereof, its permitted assignees and subtenants under
Article 16 of the Lease.
J. In the event that Landlord performs repairs to or replacement of the
roof and it is reasonably necessary to remove the Heat Reduction System in order
for Landlord to perform such repairs or replacement, Tenant shall, upon
reasonable prior written notice, at Tenant's cost, remove the Heat Rejection
System until such time as Landlord has completed such repairs or replacements.
Tenant recognizes that there may be an interference with Tenant's use of the
Heat Rejection System in connection with such work. Landlord shall use
reasonable efforts to complete such work as promptly as possible and to perform
such work in a manner which will minimize or, if reasonably possible, eliminate
any interruption in Tenant's use of the Heat Rejection System .
K. Any services required by Tenant in connection with Tenant's use of the
Heat Rejection Area or the Heat Rejection System shall be installed by Tenant,
at Tenant's expense, subject to Landlord's prior approval, which approval shall
not be unreasonably withheld, delayed or conditioned.
L. To the maximum extent permitted by law, all System Rooftop
Installations in the Heat Rejection Area shall be at the sole risk of Tenant,
and Landlord shall have no liability to Tenant in the event that any System
Rooftop Installations are damaged, except however, subject to Article 19 of the
Lease, Landlord shall be responsible for damage to the System Rooftop
Installations caused by the negligence or willful misconduct of Landlord or
those for whom Landlord is legally responsible.
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<PAGE> 156
M. Tenant shall take the Heat Rejection Area "as-is" in the condition in
which the Heat Rejection Area is in as of the Commencement Date in respect of
the Heat Rejection Area.
N. Tenant shall comply with all applicable laws, ordinances and
regulations in Tenant's use of the Heat Rejection Area and the Heat Rejection
System .
O. Landlord shall have the right, upon thirty (30) days' notice to
Tenant, to require Tenant to relocate the Heat Rejection Area to another area
("Relocated Rooftop Area") on the roof of the Building. In such event, Tenant
shall, at Landlord's cost and expense, on or before the thirtieth (30th) day
after Landlord gives such notice, relocate all of its System Rooftop
Installations from the Heat Rejection Area to the Relocated Rooftop Area, but
only if Landlord has provided Tenant with uninterrupted access to the Relocated
Rooftop Area prior to the expiration of such 30-day period, so as to allow
Tenant, in accordance with this Paragraph 10, to set-up the Heat Rejection
System to prevent any interruption in Tenant's use of the Heat Rejection System.
P. In addition to complying with the applicable construction provisions
of the Lease, Tenant shall not install or operate System Rooftop Installations
in any portion of the Heat Rejection Area until (x) Tenant shall have obtained
Landlord's prior written approval, which approval will not be unreasonably
withheld or delayed, of Tenant's plans and specifications for the placement and
installation of the System Rooftop Installations in the Premises, and (y) Tenant
shall have obtained and delivered to Landlord copies of all required
governmental and quasi-governmental permits, approvals, licenses and
authorizations necessary for the lawful installation, operation and maintenance
of the System Rooftop Installations. The parties hereby acknowledge and agree,
by way of illustration and not limitation, that Landlord shall have the right to
withhold its approval of Tenant's plans and specifications hereunder, and shall
not be deemed to be unreasonable in doing so, if Tenant's intended placement or
method of installation or operation of the System Rooftop Installations (i) does
not minimize to the fullest extent reasonably practicable the obstruction of the
views from the windows of the Building that are adjacent to the System Rooftop
Installations, if any, (ii) does not complement (in Landlord's sole judgment,
which shall not, however, require Tenant to incur unreasonable expense) the
design and finish of the Building, (iii) is reasonably likely to damage the
structural integrity of the Building or the roof thereof, or (iv) is reasonably
likely to constitute a violation of any consent, approval, permit or
authorization necessary for the lawful installation of the System Rooftop
Installations.
Q. In addition to the indemnification provisions set forth in this Lease,
which shall be applicable to the Heat Rejection Area, Tenant shall, to the
maximum extent permitted by law, indemnify, defend, and hold Landlord, its
agents, contractors and employees harmless from any and all claims, losses,
demands, actions or causes of actions suffered by any person, firm, corporation,
or other entity arising from Tenant's use of the Heat Rejection Area.
-22-
<PAGE> 157
R. Landlord shall have the right to designate or identify the System
Rooftop Installations with or by a lease or license number (or other marking)
and to place such number (or marking) on or near such System Rooftop
Installations.
S. From and after the date that Tenant installs the System Rooftop
Installations, Landlord will use reasonable efforts to avoid installation by
another tenant or Landlord of a Heat Rejection System or other installation on
the roof of the Building which will interfere with the operation of the System
Rooftop Installations. If, during the term of this Lease, another tenant's
rooftop installation interferes with the operation of the System Rooftop
Installations, then Landlord shall, at Landlord's expense, relocate the System
Rooftop Installations to a Relocated Rooftop Area, as defined in Subparagraph O
of this Paragraph 10.
11. GENERATOR AREA
Tenant shall have the right to use the Generator Area, as hereinafter
defined, to install, use, improve, repair and replace an emergency generator
("Generator") and for no other purpose for a period commencing as of the date
that Tenant installs the Generator in the Generator Area ("Term Commencement
Date in respect of the Generator Area") and continuing throughout the term of
this Lease, provided, however, that prior to the Term Commencement Date in
respect of the Generator Area, Landlord shall reserve an area on the roof of the
Building for the Generator Area. The "Generator Area" shall be an area on the
10th floor roof of the Building containing approximately 400 square feet
designated by Landlord. Tenant shall not install or operate the Generator until
Tenant has obtained and submitted to Landlord copies of all required
governmental permits, licenses, and authorizations necessary for the
installation and operation of the Generator. Tenant shall be permitted to use
the Generator Area solely for the maintenance and operation of one Generator,
and the Generator and Generator Area are solely for the benefit of Tenant. All
electricity generated by the Generator may only be consumed by Tenant, its
permitted assignees and subtenants under Article 16 of the Lease in the
Premises. Tenant shall be permitted to use the Generator Area solely for one
Generator installed in accordance with specifications approved by Landlord in
advance. Such installation shall be designed in such manner as to be easily
removable and so as not to damage the roof of the Building. The Generator and
any replacement shall be subject to Landlord's approval. Tenant's use of the
Generator Area shall be upon all of the conditions of the Lease, except as
follows:
A. The Yearly Rent in respect of the Generator Area shall be Zero
Dollars;
B. Tenant shall have no obligation to pay Tax Excess or Operating Expense
Excess in respect of the Generator Area.
C. Landlord shall have no obligation to provide any services to the
Generator Area, except for those services that Landlord is obligated under this
Lease to provide in respect of the roof of the Building generally, subject to
Subparagraph G of this Paragraph 11.
-23-
<PAGE> 158
D. Tenant shall have no right to make any material changes,
alterations, signs, decoration, or other improvements (which changes,
alterations, signs, decoration or other improvements, together with the
Generator, are hereby collectively referred to as "Generator Rooftop
Installations") to the Generator Area or to the Generator without Landlord's
prior written consent, which consent shall, subject to Paragraph P hereof, not
be unreasonably withheld, conditioned or delayed.
E. Tenant shall have no right of access to the roof of the Building
unless Tenant has given Landlord reasonable advance notice and unless Tenant's
representatives are accompanied by a representative of Landlord. Landlord shall
provide Tenant with 24-hour access to the Generator Area, subject to Landlord's
reasonable security procedures and restrictions based on emergency conditions
and to other causes beyond Landlord's reasonable control. Tenant shall give
Landlord reasonable advance written notice of the need for access to the
Generator Area (except that such notice may be oral in an emergency), and a
representative of Landlord must be present during any entry by Tenant onto the
Generator Area. Each notice for access shall be in the form of a work order
referencing the lease and describing, as applicable, the date access is needed,
the name of the contractor or other personnel requiring access, the name of the
supervisor authorizing the access/work, the areas to which access is required,
the Building common elements to be impacted (risers, electrical rooms, etc.) and
the description of new equipment or other Generator Rooftop Installations to be
installed and evidence of Landlord's approval thereof. In the event of an
emergency, such notice shall follow within five (5) days after access to the
Generator Area.
F. At the expiration or prior termination of Tenant's right to use the
Generator Area, Tenant shall remove all Generator Rooftop Installations
(including, without limitation, the Generator ) from the Generator Area.
G. Tenant shall be responsible for the cost of repairing any damage to
the roof of the Building caused by the installation or removal of any Generator
Rooftop Installations.
H. Tenant shall have no right to assign or sublet the Generator Area,
except that permitted assignees or subtenants under Article 16 of the Lease
shall be permitted to use the Generator Area.
I. No other person, firm or entity (including, without limitation,
other tenants, licensees or occupants of the Building) shall have the right to
benefit from the services provided by the Generator other than Tenant, and,
subject to Subparagraph H hereof, its permitted assignees and subtenants under
Article 16 of the Lease.
J. In the event that Landlord performs repairs to or replacement of the
roof and it is reasonably necessary to remove the Heat Reduction System in order
for Landlord to perform such repairs or replacement, Tenant shall, upon
reasonable prior written notice, at Tenant's cost, remove the Generator until
such time as Landlord has completed such repairs or replacements. Tenant
recognizes that there may be an interference with Tenant's use of the Generator
in connection with such work. Landlord
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<PAGE> 159
shall use reasonable efforts to complete such work as promptly as possible and
to perform such work in a manner which will minimize or, if reasonably possible,
eliminate any interruption in Tenant's use of the Generator .
K. Any services required by Tenant in connection with Tenant's use of
the Generator Area or the Generator shall be installed by Tenant, at Tenant's
expense, subject to Landlord's prior approval, which approval shall not be
unreasonably withheld, delayed or conditioned.
L. To the maximum extent permitted by law, all Generator Rooftop
Installations in the Generator Area shall be at the sole risk of Tenant, and
Landlord shall have no liability to Tenant in the event that any Generator
Rooftop Installations are damaged, except however, subject to Article 19 of the
Lease, Landlord shall be responsible for damage to the Generator Rooftop
Installations caused by the negligence or willful misconduct of Landlord or
those for whom Landlord is legally responsible.
M. Tenant shall take the Generator Area "as-is" in the condition in
which the Generator Area is in as of the Commencement Date in respect of the
Generator Area.
N. Tenant shall comply with all applicable laws, ordinances and
regulations in Tenant's use of the Generator Area and the Generator.
O. Landlord shall have the right, upon thirty (30) days' notice to
Tenant, to require Tenant to relocate the Generator Area to another area
("Relocated Rooftop Area") on the roof of the Building. In such event, Tenant
shall, at Landlord's cost and expense, on or before the thirtieth (30th) day
after Landlord gives such notice, relocate all of its Generator Rooftop
Installations from the Generator Area to the Relocated Rooftop Area, but only if
Landlord has provided Tenant with uninterrupted access to the Relocated Rooftop
Area prior to the expiration of such 30-day period, so as to allow Tenant, in
accordance with this Paragraph 11, to set-up the Generator to prevent any
interruption in Tenant's use of the Generator.
P. In addition to complying with the applicable construction provisions
of the Lease, Tenant shall not install or operate Generator Rooftop
Installations in any portion of the Generator Area until (x) Tenant shall have
obtained Landlord's prior written approval, which approval will not be
unreasonably withheld or delayed, of Tenant's plans and specifications for the
placement and installation of the Generator Rooftop Installations in the
Premises, and (y) Tenant shall have obtained and delivered to Landlord copies of
all required governmental and quasi-governmental permits, approvals, licenses
and authorizations necessary for the lawful installation, operation and
maintenance of the Generator Rooftop Installations. The parties hereby
acknowledge and agree, by way of illustration and not limitation, that Landlord
shall have the right to withhold its approval of Tenant's plans and
specifications hereunder, and shall not be deemed to be unreasonable in doing
so, if Tenant's intended placement or method of installation or operation of the
Generator Rooftop Installations (i) does not minimize to the fullest extent
reasonably practicable the obstruction of the views from the windows of the
Building that are adjacent to the Generator Rooftop Installations, if any, (ii)
does not
-25-
<PAGE> 160
complement (in Landlord's sole judgment, which shall not, however, require
Tenant to incur unreasonable expense) the design and finish of the Building,
(iii) is reasonably likely to damage the structural integrity of the Building or
the roof thereof, or (iv) is reasonably likely to constitute a violation of any
consent, approval, permit or authorization necessary for the lawful installation
of the Generator Rooftop Installations.
Q. In addition to the indemnification provisions set forth in this
Lease, which shall be applicable to the Generator Area, Tenant shall, to the
maximum extent permitted by law, indemnify, defend, and hold Landlord, its
agents, contractors and employees harmless from any and all claims, losses,
demands, actions or causes of actions suffered by any person, firm, corporation,
or other entity arising from Tenant's use of the Generator Area.
R. Landlord shall have the right to designate or identify the Generator
Rooftop Installations with or by a lease or license number (or other marking)
and to place such number (or marking) on or near such Generator Rooftop
Installations.
S. From and after the date that Tenant installs the Generator Rooftop
Installations, Landlord will use reasonable efforts to avoid installation by
another tenant or Landlord of a Generator or other installation on the roof of
the Building which will interfere with the operation of the Generator Rooftop
Installations. If, during the term of this Lease, another tenant's rooftop
installation interferes with the operation of the Generator Rooftop
Installations, then Landlord shall, at Landlord's expense, relocate the
Generator Rooftop Installations to a Relocated Rooftop Area, as defined in
Subparagraph O of this Paragraph 11.
-26-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORRESTER
RESEARCH, INC'S DECEMBER 31, 1998 CONSOLIDATED FINANCIAL STATEMENTS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS CONTAINED IN
FORM 10-K.
</LEGEND>
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<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> APR-01-1999
<PERIOD-END> JUN-30-1999
<EXCHANGE-RATE> 1
<CASH> 8,121,490
<SECURITIES> 71,117,323
<RECEIVABLES> 17,903,001
<ALLOWANCES> 360,390
<INVENTORY> 0
<CURRENT-ASSETS> 104,339,316
<PP&E> 14,136,036
<DEPRECIATION> 6,738,403
<TOTAL-ASSETS> 113,207,126
<CURRENT-LIABILITIES> 50,675,242
<BONDS> 0
0
0
<COMMON> 89,226
<OTHER-SE> 62,442,658
<TOTAL-LIABILITY-AND-EQUITY> 113,207,126
<SALES> 0
<TOTAL-REVENUES> 19,671,254
<CGS> 0
<TOTAL-COSTS> 6,423,760
<OTHER-EXPENSES> 10,537,357
<LOSS-PROVISION> 0
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<INCOME-PRETAX> 3,604,805
<INCOME-TAX> 1,369,826
<INCOME-CONTINUING> 2,234,979
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