EXHIBIT 10.22


 


	
  EXHIBIT
  A

  
	
  

  	
  CBA Form MT-LS

  Rev’d 6/97

   

   

  	
  LEASE AGREEMENT

  (Single-Tenant Form)

  	
  ©
  Copyright 1997

  Commercial
  Brokers Association

  ALL
  RIGHTS RESERVED

  
	
  This
  Has Been Prepared For Submission To Your Attorney For Review And Approval
  Prior To Signing

  No Representation Is Made By Licensee As To Its Legal Sufficiency Or Tax
  Consequences

  CBA Text Disclaimer:  Text deleted by
  licensee indicated by strike.  New text
  inserted by licensee indicated by small capital letters.

  



 


THIS LEASE AGREEMENT
(the “Lease”) is entered into this 18th day of Aug , 2000, between HARTMANN
LIMITED PARTNERSHIP & WILLIAM LUDWIG HARTMANN MARITAL TRUST (“Landlord”),
and ADVANCED TELCOM, INC.  (“Tenant”). 
Landlord and Tenant agree as follows:


 


1.              LEASE SUMMARY.


 


a.     Leased Premises.  The leased commercial real estate (the “Premises”) consist
of an agreed area of 16,000 rentable
square feet and are outlined on the floor plan attached as Exhibit A,
located on the land legally described on attached Exhibit B, and is
commonly known as THE TRANSNATION BUILDING.  The Premises do not
include, and Landlord reserves, the exterior walls and roof of the Premises,
the land beneath the Premises, the pipes and ducts, conduits, wires, fixtures,
and EQUIPMENT ABOVE THE SUSPENDED CEILING OR STRUCTURAL ELEMENTS
OF THE BUILDING IN WHICH THE PREMISES ARE LOCATED (THE “Building”).  The
Building, the land upon which it is situated, all other improvements located on
such land, and all common areas appurtenant to the Building are referred to
herein as the “Property.”


 


b.     Lease
Commencement Date.  The Lease shall commence on UPON
COMPLETION OF TENANT IMPROVEMENTS OR SEPTEMBER 15 , 2000, WHICHEVER DATE IS EARLIER. 
DURING THE PRE-COMMENCEMENT DATE PERIOD OF TENANT’S WORK, AS DEFINED
BELOW, ALL PROVISIONS OF THE LEASE, EXCEPT FOR 
PAYMENT OF RENT, AS DEFINED HEREIN, SHALL BE APPLICABLE AND BINDING UPON
TENANT.


 


c.     Lease
Termination Date.  The Lease shall terminate at midnight 120 FULL
MONTHS FOLLOWING THE LEASE COMMENCEMENT DATE,          , or
such earlier or later date as provided in Section 3 (the “Termination Date”).


 


d.     Base Rent. 
The base monthly rent shall be (check one): o   $              ,
or ý according to the Rent Rider
attached hereto.  Rent shall be payable
at Landlord’s address shown in Section 1(h) below, or such other
place designated in writing by Landlord.


 


e.     Prepaid Rent.  Upon execution of this Lease, Tenant shall deliver to
Landlord the sum of $6,333.33as
prepaid rent, to be applied to the Rent due for the SECOND month(s) of the Lease.


 


f.      Security
Deposit.  The amount of the security deposit is $NONE.


 


g.     Permitted Use. 
The Premises shall be used only for TELECOMMUNICATIONS SWITCHING OR
COLOCATION FACILITY, OFFICE AND RELATED TELECOMMUNICATIONS ACTIVITIES, and for
no other purpose without the prior written consent of Landlord.


 


h.     Notice and
Payment Addresses:


 


Landlord: COAST
MANAGEMENT COMPANY, INC., ATTN: BRETT CARLTON, 2610 WETMORE AVENUE


 


P.O. BOX
1709, EVERETT, WASHINGTON 98206 Fax No.: (425) 259-5062


 


Tenant: ADVANCED
TELCOM, INC., ATTN: TOM GRINA, SR. VP AND CFO, 110 STONY POINT ROAD, 2ND FLOOR,
SANTA ROSA, CALIFORNIA 95401 Fax No.:  (707) 284-2327


 


 


2.              PREMISES.  Landlord leases
to Tenant, and Tenant leases from Landlord the Premises upon the terms
specified in this Lease.


 


3.              TERM.


 


a.     Commencement
Date.  The Lease shall commence on the date specified in Section 1(b),
or on such earlier or later date as may be specified by written notice
delivered by Landlord to Tenant advising Tenant that the


 


1





















 


Premises are ready
for possession and specifying the Commencement Date, which shall not be less
than            (30 if not
completed) days following the date of such notice.  If Tenant occupies the Premises before the Commencement
Date specified in Section 1(b), then the Commencement Date shall be the
date of occupancy.  If Landlord acts
diligently to make the Premises available to Tenant, neither Landlord nor any
agent or employee of Landlord shall be liable for any damage or loss due to
Landlord’s inability or failure to deliver possession of the Premises to Tenant
as provided in this Lease.  The
Termination Date shall be modified upon any change in the Commencement Date so
that the length of the Lease term is not changed.  If Landlord does not deliver possession of the
Premises to Tenant within          days
(60 if not completed) after the date specified in Section 1(b), Tenant may
elect to cancel this Lease by giving written notice to Landlord within 10 days
after such time period ends.  If Tenant
gives such notice, the Lease shall be canceled, all prepaid rent and security
deposits shall be refunded to tenant, and neither Landlord nor Tenant shall
have any further obligations to the other. 
The first “Lease Year” shall commence on the Commencement Date and shall
end on the date which is twelve (12) months from the end of the month in which
the Commencement Date occurs.  Each
successive Lease Year during the initial term and any extension terms shall be
twelve (12) months, commencing on the first day following the end of the
preceding Lease Year, except that the last Lease Year shall end on the
Termination Date.


 


b.     Tenant
Obligations.  To the extent Tenant’s tenant
improvements are not completed in time for the Tenant to occupy or take
possession of the Premises on the Commencement Date due to the failure of
Tenant to fulfill any of its obligations under this Lease, the Lease shall
nevertheless commence on the Commencement Date.


 


Except as
specified elsewhere in this Lease, Landlord makes no representations or
warranties to Tenant regarding the Premises, including the structural condition
of the Premises and the condition of all mechanical, electrical, and other
systems on the Premises.  Except for any
tenant improvements described on attached Exhibit C to be completed by
Landlord (defined therein as “Landlord’s Work”), Tenant shall be responsible
for performing any work necessary to bring the Premises into condition
satisfactory to Tenant.  By signing this
Lease, Tenant acknowledges that it has had adequate opportunity to investigate
the Premises, acknowledges responsibility for making any corrections,
alterations and repairs to the Premises (other than the Landlord’s Work), and
acknowledges that the time needed to complete any such items shall not delay
the Commencement Date.


 


Attached Exhibit C
sets forth all Landlord’s Work, if any, and all tenant improvements to be
completed by Tenant (“Tenant’s Work”), which is to be performed on the Premises.  Responsibilities for design, payment and
performance of all such work shall be as set forth on attached Exhibit C.  If Tenant fails to notify Landlord of any
defects in the Landlord’s Work within 30 days of
delivery of possession to Tenant, Tenant shall be deemed to have accepted the
Premises in their then condition.  If
Tenant discovers any major defects in the Landlord’s Work during this 10-day
period that would prevent Tenant from using the Premises for its intended
purpose, Tenant shall so notify Landlord in writing and the Commencement Date
shall be delayed until after Landlord has corrected the major defects and
Tenant has had five (5) days to inspect and approve the Premises after Landlord’s
correction of such defects, AFTER RECEIPT FROM
LANDLORD OF NOTICE OF CORRECTION.  The Commencement Date shall not be delayed if
Tenant’s inspection reveals minor defects in the Landlord’s Work that will not
prevent Tenant from using the Premises for their intended purpose.  Tenant shall prepare a punch list of all
minor defects and provide the punch list to Landlord.  Landlord shall promptly correct all punch
list items.


 


4.              RENT.  Tenant shall pay
Landlord without demand, deduction or offset, in lawful money of the United
States, the monthly rental stated in Section 1(d) in advance on or
before the first day of each month during the Lease Term beginning on (check
one): o the Commencement Date, or o           (specify,
but if no date specified, then on the Commencement Date), and any other
additional payments due to Landlord, including Operating Costs (collectively the
“Rent”) when required under this Lease.  Payments
for any partial month at the beginning or end of the Lease term shall be
prorated.


 


If any sums
payable by Tenant to Landlord under this Lease are not received by the SEVENTH (7TH) day of each month, Tenant shall pay
Landlord in addition to the amount due, for the cost of collecting and handling
such late payment, an amount equal to the greater of $100 or five percent (5%)
of the delinquent amount.  In addition,
all delinquent sums payable by Tenant to Landlord and not paid within five days
of the due date shall, at Landlord’s option, bear interest at the rate of twelve
percent (12%) per annum, or the highest rate of interest allowable by


 


2





















 


law, whichever
is less.  Interest on all delinquent
amounts shall be calculated from the original due date to the date of payment.


 


Landlord’s acceptance of less than the full
amount of any payment due from Tenant shall not be deemed an accord and
satisfaction or compromise of such payment unless Landlord specifically
consents in writing to payment of such lesser sum as an accord and satisfaction
or compromise of the amount which Landlord claims.


 


6.              USES.  The Premises
shall be used only for the use(s) specified in Section 1(g) above
(the “Permitted Use”), and for no other business or purpose without the prior
written consent of Landlord, WHICH CONSENT SHALL NOT BE UNREASONABLY
WITHHELD.  No act shall be done on or around the Premises
that is unlawful or that will MATERIALLY increase the existing rate of
insurance on the Premises or the Building, or cause the cancellation of any
insurance on the Premises or the Building. 
TENANT ACKNOWLEDGES AND UNDERSTANDS THAT THE FIRE
INSURANCE PREMIUM ON THE BUILDING MAY BE INCREASED DUE TO THE PRESENCE OF
TENANT’S DIESEL GENERATOR/FUEL. 
Tenant shall not commit or allow to be committed any waste upon the
Premises, or any public or private nuisance. 
TENANT SHALL OPERATE ITS BUSINESS UNDER THESE
PERMITTED USES IN THE PREMISES CONTINUOUSLY DURING THE LEASE TERM.


 


7.              COMPLIANCE WITH LAWS.  Tenant shall not
cause or permit the Premises to be used in any way which violates any law,
ordinance, or governmental regulation or order. 
Landlord represents to Tenant, to the best of Landlord’s knowledge, that
with the exception of any Tenant’s Work, as of the Commencement Date, the
Premises ARE NOT IN VIOLATION OF ANY applicable
laws, rules, regulations, or orders, including without limitation, the
Americans With Disabilities Act, if applicable, and Landlord shall be
responsible to promptly cure any VIOLATION which
existed on the Commencement Date.  Tenant
shall be responsible for complying with all laws applicable to the Premises as
a result of Tenant’s particular use AND TENANT’S WORK,
such as modifications required by the Americans With Disabilities Act as a
result of Tenant opening the Premises to the public as a place of public
accommodation.  If the enactment or
enforcement of any law, ordinance, regulation or code during the Lease term
requires any changes to the Premises during the Lease term, the Tenant shall
perform all such changes at its expense if the changes are required due to the
nature of Tenant’s activities at the Premises, or to alterations that Tenant
seeks to make to the Premises; otherwise, Landlord shall perform all such
changes at its expense.


 


9.              UTILITIES AND SERVICES.  LANDLORD SHALL NOT BE RESPONSIBLE FOR PROVIDING ANY UTILITIES TO THE
PREMISES, BUT REPRESENTS AND WARRANTS TO TENANT THAT AS OF THE COMMENCEMENT
DATE ELECTRICITY, WATER, SEWER, AND TELEPHONE UTILITIES ARE AVAILABLE AT OR
ADJACENT TO THE PREMISES.  TENANT SHALL
DETERMINE WHETHER THE AVAILABLE CAPACITY OF SUCH UTILITIES WILL MEET TENANT’S
NEEDS.  TENANT SHALL INSTALL AND CONNECT,
IF NECESSARY, AND DIRECTLY PAY FOR ALL WATER, SEWER, GAS, JANITORIAL,
ELECTRICITY, GARBAGE REMOVAL, HEAT, TELEPHONE, AND OTHER UTILITIES AND SERVICES
USED BY TENANT ON THE PREMISES DURING THE TERM, WHETHER OR NOT SUCH SERVICES
ARE BILLED DIRECTLY TO TENANT.  TENANT
WILL ALSO PROCURE, OR CAUSE TO BE PROCURED, WITHOUT COST TO LANDLORD, ALL
NECESSARY PERMITS, LICENSES OR OTHER AUTHORIZATIONS REQUIRED FOR THE LAWFUL AND
PROPER INSTALLATION, MAINTENANCE, REPLACEMENT, AND REMOVAL ON OR FROM THE
PREMISES OR WIRES, PIPES, CONDUITS, TUBES, AND OTHER EQUIPMENT AND APPLIANCES
FOR USE IN SUPPLYING ALL UTILITIES OR SERVICES TO THE PREMISES.  LANDLORD, UPON REQUEST OF TENANT, AND AT THE
SOLE EXPENSE AND LIABILITY OF TENANT, SHALL JOIN WITH TENANT IN ANY APPLICATION
REQUIRED FOR OBTAINING OR CONTINUING SUCH UTILITIES OR SERVICES.


 


10.       TAXES.  TENANT SHALL PAY ALL TAXES (DEFINED BELOW) APPLICABLE TO THE PREMISES
DURING THE LEASE TERM.  ALL PAYMENTS FOR
TAXES SHALL BE MADE AT LEAST TEN (10) DAYS PRIOR TO THEIR DUE DATE.  TENANT SHALL PROMPTLY FURNISH LANDLORD WITH
SATISFACTORY EVIDENCE THAT TAXES HAVE BEEN PAID.  IF ANY TAXES PAID BY TENANT COVER ANY PERIOD
OF TIME BEFORE OR AFTER THE EXPIRATION OF THE TERM, TENANT’S SHARE OF THOSE
TAXES PAID WILL BE PRORATED TO COVER ONLY THE PERIOD OF TIME WITHIN THE TAX
FISCAL YEAR DURING WHICH THIS LEASE WAS IN EFFECT, AND LANDLORD SHALL PROMPTLY
REIMBURSE TENANT TO THE EXTENT REQUIRED. 
IF TENANT FAILS TO TIMELY PAY ANY TAXES, LANDLORD MAY PAY THEM, AND
TENANT SHALL REPAY SUCH AMOUNT TO LANDLORD WITH TENANT’S NEXT RENT INSTALLMENT.


 


3





















 


THE TERM “TAXES”
SHALL MEAN: (I) ANY FORM OF REAL ESTATE TAX OR ASSESSMENT IMPOSED ON THE
PREMISES BY ANY AUTHORITY, INCLUDING ANY CITY, STATE OR FEDERAL GOVERNMENT, OR
ANY IMPROVEMENT DISTRICT, AS AGAINST ANY LEGAL OR EQUITABLE INTEREST OF
LANDLORD OR TENANT IN THE PREMISES OR IN THE REAL PROPERTY OF WHICH THE
PREMISES ARE A PART, OR AGAINST RENT PAID FOR LEASING THE PREMISES; AND (II)
ANY FORM OF PERSONAL PROPERTY TAX OR ASSESSMENT IMPOSED ON ANY PERSONAL
PROPERTY, FIXTURES, FURNITURE, TENANT IMPROVEMENTS, EQUIPMENT, INVENTORY, OR
OTHER ITEMS, AND ALL REPLACEMENTS, IMPROVEMENTS, AND ADDITIONS TO THEM, LOCATED
ON THE PREMISES, WHETHER OWNED BY LANDLORD OR TENANT.  “TAXES” SHALL EXCLUDE ANY NET INCOME TAX
IMPOSED ON LANDLORD FOR INCOME THAT LANDLORD RECEIVES UNDER THIS LEASE.


 


TENANT MAY CONTEST
THE AMOUNT OR VALIDITY, IN WHOLE OR IN PART, OF ANY TAXES AT ITS SOLE EXPENSE,
ONLY AFTER PAYING SUCH TAXES OR POSTING SUCH SECURITY AS LANDLORD MAY REASONABLY
REQUIRE IN ORDER TO PROTECT THE PREMISES AGAINST LOSS OR FORFEITURE.  UPON THE TERMINATION OF ANY SUCH PROCEEDINGS,
TENANT SHALL PAY THE AMOUNT OF SUCH TAXES OR PART OF SUCH TAXES AS FINALLY
DETERMINED, TOGETHER WITH ANY COSTS, FEES, INTEREST PENALTIES, OR OTHER RELATED
LIABILITIES.  LANDLORD SHALL COOPERATE
WITH TENANT IN CONTESTING ANY TAXES, PROVIDED LANDLORD INCURS NO EXPENSE OR
LIABILITY IN DOING SO.


 


12.       ALTERATIONS.  Tenant may
make alterations, additions or improvements to the Premises, including any Tenant’s
Work identified on attached Exhibit C (“Alterations”), with the prior
written consent of Landlord, WHICH SHALL NOT BE
UNREASONABLY WITHHELD.  The
term “Alterations” shall not include the installation of shelves, movable
partitions, Tenant’s equipment, and trade fixtures which may be performed
without damaging existing improvements or the structural integrity of the
Premises, and Landlord’s consent shall not be required for Tenant’s
installation of those items.  Tenant
shall complete all Alterations at Tenant’s expense in compliance with all
applicable laws and in accordance with plans and specifications approved by
Landlord, using contractors approved by Landlord.  NON-PERMANENT AND
REMOVABLE ALTERATIONS AND OTHER NON-PERMANENT AND REMOVABLE INTERIOR
IMPROVEMENTS PAID FOR BY TENANT AND TRADE FIXTURES, FURNITURE, EQUIPMENT AND
OTHER PERSONAL PROPERTY USED IN THE OPERATION OF TENANT’S BUSINESS AND
INSTALLED IN THE PREMISES (COLLECTIVELY “TENANT’S PROPERTY”) SHALL AT ALL TIMES
BE AND REMAIN TENANT’S PROPERTY PROVIDED, HOWEVER, THAT TENANT OR TENANT’S
ASSIGNEE MAY AT ANY TIME REMOVE TENANT’S PROPERTY PROVIDED THAT TENANT OR
TENANT’S ASSIGNEE REPAIRS ALL DAMAGE CAUSED BY SUCH REMOVAL AND SUCH REMOVAL
DOES NOT CAUSE MATERIAL DAMAGE TO THE PREMISES. 
ALTERATIONS CONSISTING OF ITEMS OTHER THAN TENANT’S PROPERTY SHALL
BELONG TO THE LANDLORD UPON EXPIRATION OF THE LEASE TERM AND ANY EXTENSION
THEREOF.  LANDLORD SHALL SUBORDINATE ANY
SECURITY INTEREST OR LIEN ON ANY ITEM OR TENANT’S PROPERTY TO ANY SECURITY INTEREST
OR LIEN GRANTED BY TENANT IN OR TO ANY OF ITS PERSONAL PROPERTY, EQUIPMENT OR
TRADE FIXTURES AS SECURITY FOR INDEBTEDNESS INCURRED FOR THE PURPOSE OF
FINANCING THE PURCHASE OR LEASE OF ANY SUCH PROPERTY AND SHALL SUBORDINATE AND
WAIVE ANY RIGHT OF DISTRAINT, DISTRESS FOR RENT OR LANDLORD’S LIEN THAT MAY ARISE
AT LAW TO THE SECURITY INTEREST AND LIEN OF FIRST UNION NATIONAL BANK OR ITS
SUCCESSOR INTEREST.  CONCURRENTLY WITH
THE EXECUTION OF THIS LEASE, LANDLORD SHALL EXECUTE A CERTIFICATE OF LANDLORD
WAIVER ATTACHED THERETO AS EXHIBIT F. 
TENANT SHALL SPECIFICALLY REMOVE AT THE END OF THE LEASE TERM ALL
INSTALLED CABLE/WIRE UNLESS SPECIFICALLY DIRECTED OTHERWISE BY LANDLORD.  TENANT SHALL IMMEDIATELY REPAIR ANY DAMAGE TO
THE PREMISES CAUSED BY REMOVAL OF ALTERATIONS. 
IF TENANT FAILS TO PERFORM THIS REPAIR WORK WITHIN THIRTY (30) DAYS
AFTER TERMINATION OF THE LEASE TERM, LANDLORD MAY PERFORM THIS WORK
WITHOUT NOTICE TO THE TENANT AND CHARGE TENANT ALL EXPENSES ASSOCIATED WITH
SUCH REPAIR WORK.


 


13.       REPAIRS AND MAINTENANCE. 
Tenant shall, at its sole expense, maintain the Premises in good
condition and promptly make all repairs and replacements, whether structural or
non-structural, necessary to keep the Premises safe and in good condition,
including all utilities and other systems serving the Premises.  Landlord shall maintain INCLUDING
ANY NECESSARY REPAIRS the Building structure, foundation, exterior
walls, and roof.  Tenant shall not damage
any demising wall or disturb the structural integrity of the Premises and shall
promptly repair any damage or injury done to any such demising walls or
structural elements caused by Tenant or its employees, agents, contractors, or
invitees.  If Tenant fails to maintain or
repair the Premises, Landlord may enter the Premises and perform such repair or
maintenance on behalf of Tenant.  In such
case, Tenant shall be obligated to pay to Landlord immediately upon receipt of
demand for payment, as additional Rent, all costs incurred by Landlord.  Notwithstanding anything in this Section to
the contrary, Tenant shall not be responsible for any repairs to the Premises
made necessary by the acts of Landlord or its agents, employees, contractors or
invitees therein.


 


4





















 


Upon expiration
of the Lease term, whether by lapse of time or otherwise, Tenant shall promptly
and peacefully surrender the Premises, together with all keys, to Landlord in
as good condition as when received by Tenant from Landlord or as thereafter
improved, reasonable wear and tear and insured casualty excepted.


 


14.       ACCESS.  After
reasonable notice from Landlord (except in cases of emergency, where no notice
is required), Tenant shall permit Landlord and its agents and employees to
enter the Premises at all reasonable times for the purposes of repair or
inspection.  This Section shall not
impose any repair or other obligation upon Landlord not expressly stated
elsewhere in this Lease.  After
reasonable notice to Tenant, Landlord shall have the right to enter the Premises
for the purpose of showing the Premises to prospective purchasers or lenders at
any time, and to prospective tenants within 180 days prior to the expiration or
sooner termination of the Lease term.


 


15.       SIGNAGE.  Tenant shall
obtain Landlord’s written consent before installing any signs upon the
Premises; PROVIDED TENANT SHALL BE PERMITTED TO HAVE SIGNAGE
ON THE BUILDING DIRECTORY, THE FASCIA ON BOTH THE COLBY AND WALL EXPOSURES, AND
ON THE DOOR TO THE PREMISES; ALL SUCH SIGNAGE SHALL BE APPROVED BY THE LANDLORD
Tenant shall install any approved signage at Tenant’s sole expense and in
compliance with all applicable laws.  Tenant
shall not damage or deface the Premises in installing or removing signage and
shall repair any injury or damage to the Premises caused by such installation
or removal.  UPON
TERMINATION OF THIS LEASE, TENANT, AT ITS SOLE COST AND EXPENSE, SHALL REMOVE
ALL SIGNS, AND REPAIR ALL DAMAGE CAUSED BY THE INSTALLATION OR REMOVAL OF ANY
OF ITS SIGNS.


 


16.       DESTRUCTION OR CONDEMNATION.


 


a.     Damage and
Repair.  If the Premises or the portion of the
Property necessary for Tenant’s occupancy are partially damaged but not
rendered untenantable, by fire or other insured casualty, then Landlord shall
diligently restore the Premises and the portion of the Property necessary for Tenant’s
occupancy and this Lease shall not terminate; provided, however, Tenant may
terminate the Lease if Landlord is unable to restore the Premises within ONE HUNDRED TWENTY (120) DAYS
of the casualty event.  The Premises or
the portion of the Property necessary for Tenant’s occupancy shall not be
deemed untenantable if less than twenty-five percent (25%) of each of those
areas are damaged.  Notwithstanding the
foregoing, Landlord shall have no obligation to restore the Premises or the
portion of the Property necessary for Tenant’s occupancy if insurance proceeds
are not available to pay the entire cost of such restoration.  If insurance proceeds are available to
Landlord but are not sufficient to pay the entire cost of restoration, then
Landlord may elect to terminate this Lease and keep the insurance proceeds, by
notifying Tenant within THIRTY
(30) days of the date of such casualty.


 


If the
Premises, the portion of the Property necessary for Tenant’s occupancy, or 50%
or more of the rentable area of the Property are entirely destroyed, or
partially damaged and rendered untenantable, by fire or other casualty,
Landlord may, at its option: (a) terminate this Lease as provided herein,
or (b) restore the Premises and the portion of the Property necessary for Tenant’s
occupancy to their previous condition; provided, however, if such casualty
event occurs during the last 6 months of the Lease term (after considering any
option to extend the term timely exercised by Tenant) then either Tenant or
Landlord may elect to terminate the Lease. 
If, within 30 days after receipt by Landlord
from Tenant of written notice that Tenant deems the Premises or the portion of
the Property necessary for Tenant’s occupancy untenantable, Landlord fails to
notify Tenant of its election to restore those areas, or if Landlord is unable
to restore those areas within six (6) months of the date of the casualty
event, then Tenant may elect to terminate the Lease.


 


If Landlord
restores the Premises or the Property under this Section 16(a), Landlord
shall proceed with reasonable diligence to complete the work, and the base Rent
shall be abated in the same proportion as the untenantable portion of the
Premises bears to the whole Premises, provided that there shall be a rent
abatement only if the damage or destruction of the Premises or the Property did
not result from, or was not contributed to directly or indirectly by the act,
fault or neglect of Tenant, or Tenant’s officers, contractors, licensees,
agents, servants, employees, guests, invitees or visitors.  Provided, Landlord complies with its
obligations under this Section, no damages, compensation or claim shall be
payable by Landlord for inconvenience, loss of business or annoyance directly,
incidentally or consequentially arising from any repair or restoration of any
portion of the Premises or the Property. 
Landlord will not carry insurance of any kind for the protection of Tenant
or any improvements paid for by Tenant or as provided in Exhibit C or on Tenant’s
furniture or on any fixtures, equipment, improvements or appurtenances of Tenant
under this Lease, and Landlord shall not be obligated to repair any damage
thereto or replace the same unless the damage is caused by Landlord’s
negligence.


 


5





















 


b.     Condemnation. 
If the Premises, the portion of the Property necessary for Tenant’s
occupancy, or 50% or more of the rentable area of the Property are made untenantable
by eminent domain, or conveyed under a threat of condemnation, this Lease shall
terminate at the option of either Landlord or Tenant as of the earlier of the
date title vests in the condemning authority or the condemning authority first
has possession of the Premises or the portion of the Property and all Rents and
other payments shall be paid to that date. 
In case of taking of a part of the Premises or the portion of the
Property necessary for Tenant’s occupancy that does not render those areas untenantable,
then this Lease shall continue in full force and effect and the base Rent shall
be equitably reduced based on the proportion by which the floor area of any
structures is reduced, such reduction in Rent to be effective as of the earlier
of the date the condemning authority first has possession of such portion or
title vests in the condemning authority. 
The Premises or the portion of the Property necessary for Tenant’s
occupancy shall not be deemed untenantable if less than twenty-five percent
(25%) of each of those areas are condemned. 
Landlord shall be entitled to the entire award from the condemning
authority attributable to the value of the Premises or the Property and Tenant
shall make no claim for the value of its leasehold PROVIDED, HOWEVER, THAT LANDLORD SHALL PRO-RATE ANY SUCH AWARD WITH RESPECT
TO TENANT IMPROVEMENTS.  Tenant
shall be permitted to make a separate claim against the condemning authority
for moving expenses or damages resulting from interruption in its business,
provided that in no event shall Tenant’s claim reduce Landlord’s award.


 


17.       INSURANCE.


 


a.     Liability
Insurance.  During the Lease term, Tenant
shall pay for and maintain commercial general liability insurance with broad
form property damage and contractual liability endorsements.  This policy shall name Landlord as an additional
insured, and shall insure Tenant’s activities and those of Tenant’s employees,
officers, contractors, licensees, agents, servants, employees, guests, invitees
or visitors with respect to the Premises against loss, damage or liability for
personal injury or death or loss or damage to property AND AGAINST ANY AND ALL CLAIMS, ARISING FROM OR
RELATED TO, THE USE AND OCCUPANCY OF THE PREMISES, AND ALL AREAS APPURTENANT TO
THESE PREMISES, INCLUDING, WITHOUT LIMITATION, THE ENTRANCES AND EXITS TO THE
PREMISES, THE SIDEWALKS IMMEDIATELY ADJACENT AND CONTIGUOUS TO THE PREMISES,
AND/OR ARISING FROM OR RELATED TO THE OPERATION OF THE TENANT’S BUSINESS WITH A
COMBINED SINGLE LIMIT OF NOT LESS THAN TWO MILLION DOLLARS ($2,000,000.00), AND A DEDUCTIBLE OF NOT MORE THAN TEN THOUSAND
DOLLARS ($10,000.00).  The
insurance will be noncontributory with any liability insurance carried by
Landlord.  NOT MORE FREQUENTLY THAN EVERY TWO (2) YEARS, IF, IN THE
REASONABLE OPINION OF LANDLORD, THE AMOUNT OR TYPE OF COMMERCIAL GENERAL
LIABILITY INSURANCE COVERAGE AT THAT TIME IS NOT ADEQUATE, TENANT SHALL
INCREASE OR CHANGE THE INSURANCE COVERAGE AS REASONABLY REQUIRED BY
LANDLORD.  TENANT SHALL IMMEDIATELY
PROVIDE LANDLORD WRITTEN NOTICE OF ANY INCIDENT OR OCCURRENCE GIVING RISE TO
ANY LOSS, DAMAGE, LIABILITY OR CLAIM UNDER THIS SECTION.


 


b.     CASUALTY
INSURANCE.  DURING THE
LEASE TERM, TENANT SHALL PAY FOR A LANDLORD MAINTAINED ALL-RISK COVERAGE
CASUALTY INSURANCE (WITH COVERAGE FOR EARTHQUAKE AND, IF THE PREMISES ARE IN A
FLOOD PLAIN, FLOOD DAMAGE) FOR THE PREMISES, IN AN AMOUNT SUFFICIENT TO PREVENT
LANDLORD OR TENANT FROM BECOMING A CO-INSURER UNDER THE TERMS OF THE POLICY,
AND IN AN AMOUNT NOT LESS THAN THE REPLACEMENT COST OF THE PREMISES, WITH A
DEDUCTIBLE OF NOT MORE THAN $5,000.  THE
CASUALTY INSURANCE POLICY SHALL NAME TENANT AS THE INSURED AND LANDLORD AND
LANDLORD’S LENDER(S) AS ADDITIONAL INSUREDS, WITH LOSS PAYABLE TO LANDLORD,
LANDLORD’S LENDER(S), AND TENANT AS THEIR INTERESTS MAY APPEAR.  IN THE EVENT OF A CASUALTY LOSS ON THE
PREMISES, LANDLORD MAY APPLY INSURANCE PROCEEDS UNDER THE CASUALTY
INSURANCE POLICY IN THE MANNER DESCRIBED IN SECTION 16(A).


 


c.     Tenant’s
Insurance.  During the Lease term, Tenant shall pay for
and maintain insurance, with vandalism and malicious mischief, sprinkler
leakage and earthquake endorsements, in an amount sufficient to cover not less
than 100% of the full replacement cost, as the same may exist from time to
time, of all of Tenant’s personal property, fixtures, equipment and Tenant improvements.  SPECIAL FORM (ALL
RISK AR) COVERAGE.  TENANT, AT ITS COST,
SHALL FURTHER PROCURE AND MAINTAIN WORKER’S COMPENSATION INSURANCE AND EMPLOYER’S
LIABILITY INSURANCE WITH A LIMIT OF NO LESS THAN THE AMOUNT AND IN FORM REQUIRED
BY LAW.


 


TENANT’S CONTRACTOR’S INSURANCE. 
TENANT SHALL REQUIRE ANY
CONTRACTOR PERFORMING WORK FOR IT ON THE PREMISES TO CARRY AND MAINTAIN AT NO
EXPENSE TO LANDLORD: (A) COMPREHENSIVE GENERAL LIABILITY INSURANCE,
INCLUDING CONTRACTOR’S LIABILITY COVERAGE, CONTRACTUAL LIABILITY COVERAGE,
COMPLETED


 


6





















 


OPERATIONS
COVERAGE, BROAD FROM PROPERTY DAMAGE ENDORSEMENT AND CONTRACTOR’S PROTECTIVE
LIABILITY COVERAGE, TO AFFORD PROTECTION, WITH RESPECT TO PERSONAL INJURY,
DEATH OR PROPERTY DAMAGE OF NOT LESS THAN $1,000,000.00 PER OCCURRENCE,
COMBINED SINGLE LIMIT/$2,000,000.00 AGGREGATE; (B) COMPREHENSIVE
AUTOMOBILE LIABILITY INSURANCE WITH LIMITS FOR EACH OCCURRENCE OF NOT LESS THAN
$1,000,000.00 WITH RESPECT TO PERSONAL INJURY OR DEATH AND $500,000.00 WITH
RESPECT TO PROPERTY DAMAGE; AND (C) WORKER’S COMPENSATION OR SIMILAR
INSURANCE IN FORM AND AMOUNTS REQUIRED BY LAW.


 


d.     Miscellaneous. 
Insurance required under this Section shall be with companies rated
A-XV or better in Best’s Insurance Guide, and which are authorized to transact
business in the State of Washington.  No
insurance policy shall be canceled or reduced in coverage and each such policy
shall provide that it is not subject to cancellation or a reduction in coverage
except after thirty (30) days’ prior written notice to Landlord.  Tenant shall deliver to Landlord upon
commencement of the Lease and from time to time thereafter, UPON REASONABLE REQUEST OF LANDLORD,
copies or certificates of the insurance policies required by this Section; WHICH CERTIFICATE SHALL REQUIRE ACTUAL MAILING TO THE
LANDLORD, DELETING ANY “ENDEAVOR TO MAIL” PROVISIONS.  In no event shall the limit of such policies
be considered as limiting the liability of Tenant under this Lease.


 


e.     Waiver of
Subrogation.  Landlord and Tenant hereby release each other
and any other Tenant, their agents or employees, from responsibility for, and
waive their entire claim of recovery for any loss or damage arising from any
cause covered by insurance required to be carried by each of them.  Each party shall provide notice to the
insurance carrier or carriers of this mutual waiver of subrogation, and shall
cause its respective insurance carriers to waive all rights of subrogation
against the other.  This waiver shall not
apply to the extent of the deductible amounts to any such policies or to the
extent of liabilities exceeding the limits of such policies.


 


18.       INDEMNIFICATION.  Tenant shall
defend, indemnify, and hold Landlord harmless against all liabilities, damages,
costs, and expenses, including attorneys’ fees, arising from any negligent or
wrongful act or omission of Tenant or Tenant’s officers, contractors,
licensees, agents, servants, employees, guests, invitees, or visitors on or
around the Premises or arising from any breach of this Lease by Tenant; TENANT SPECIFICALLY ACKNOWLEDGES AND WAIVES ANY IMMUNITY UNDER RCW
TITLE 51.  Tenant shall use
legal counsel REASONABLY acceptable to Landlord
in defense of any action within Tenant’s defense obligation.  Landlord shall defend, indemnify and hold Tenant
harmless against all liabilities, damages, costs, and expenses, including
attorneys’ fees, arising from any negligent or wrongful act or omission of
Landlord or Landlord’s officers, contractors, licensees, agents, servants, employees,
guests, invitees, or visitors on or around the Premises or arising from any
breach of this Lease by Landlord.  Landlord
shall use legal counsel REASONABLY acceptable to Tenant in defense of any
action within Landlord’s defense obligation.


 


19.       ASSIGNMENT AND SUBLETTING. 
EXCEPT AS PROVIDED ON EXHIBIT “E” ATTACHED,
Tenant shall not assign, sublet, mortgage, encumber or otherwise transfer any
interest in this Lease (collectively referred to as a “Transfer”) or any part
of the Premises, without first obtaining Landlord’s written consent, which
shall not be unreasonably withheld or delayed. 
No Transfer shall relieve Tenant of any liability under this Lease
notwithstanding Landlord’s consent to such transfer.  Consent to any Transfer shall not operate as a
waiver of the necessity for Landlord’s consent to any subsequent Transfer.


 


If Tenant is a
partnership, limited liability company, corporation, or other entity, any
transfer of this Lease by merger, consolidation, redemption or liquidation, or
any change(s) in the ownership of, or power to vote, (EXCEPT WITH
RESPECT TO A REGISTERED PUBLIC OFFERING) which singularly or
collectively represents a majority of the beneficial interest in Tenant, shall
constitute a Transfer under this Section; PROVIDED, HOWEVER, THAT
LANDLORD’S WRITTEN CONSENT TO THIS TYPE OF TRANSFER
SHALL NOT BE WITHHELD IF THE NET WORTH DETERMINED IN ACCORDANCE WITH GAAP OF
THE ASSIGNEE UNDER SUCH TRANSFER IS NOT LESS THAN 75% OF THE GAAP  NET WORTH OF THE ASSIGNOR TENANT.  LANDLORD SHALL BE PROVIDED IN ADVANCE ALL
FINANCIAL DOCUMENTATION REASONABLY NECESSARY TO MAKE THIS NET WORTH
DETERMINATION PRIOR TO ANY SUCH TRANSFER.


 


As a condition
to Landlord’s approval, if given, any potential assignee or sublessee otherwise
approved by Landlord shall assume all obligations of Tenant under this Lease
and shall be jointly and severally liable with


 


7





















 


Tenant and any
guarantor, if required, for the payment of Rent and performance of all terms of
this Lease.  In connection with any
Transfer, Tenant shall provide Landlord with copies of all assignments,
subleases and assumption instruments.  EQUIPMENT COLLOCATION AGREEMENTS ENTERED INTO WITH OTHER
TELECOMMUNICATION COMPANIES SHALL NOT CONSTITUTE A SUB-LEASE OR ASSIGNMENT.


 


20.       LIENS.  Tenant shall keep
the Premises free from any liens created by or through Tenant.  Tenant shall indemnify and hold Landlord
harmless from liability from any such liens including, without limitation,
liens arising from any Alterations OR TENANT’S WORK.  If a lien is filed against the Premises by
any person claiming by, through or under Tenant, Tenant shall, upon request of
Landlord, at Tenant’s expense, immediately furnish to Landlord a bond in form
and amount and issued by a surety satisfactory to Landlord, indemnifying
Landlord and the Premises against all liabilities, costs and expenses,
including attorneys’ fees, which Landlord could reasonably incur as a result of
such lien(s), AND SHALL, AT LANDLORD’S REQUEST,
IMMEDIATELY OBTAIN AND RECORD AT TENANT’S EXPENSE A BOND IN LIEU OF CLAIM UNDER
RCW 60.04.161.


 


21.       DEFAULT.  The following
occurrences shall each be deemed an Event of Default by Tenant:


 


a.     Failure To Pay. 
Tenant fails to pay any sum, including Rent, due under this Lease following
five (5) days written notice from Landlord of the failure to pay.


 


b.     Vacation/Abandonment.  Tenant vacates the Premises (defined as an absence for at
least 15 consecutive days without prior notice to Landlord), or Tenant abandons
the Premises (defined as an absence of five (5) days or more while Tenant
is in breach of some other term of this Lease). 
Tenant’s vacation or abandonment of the Premises shall not be subject to
any notice or right to cure.


 


c.     Insolvency.  Tenant becomes insolvent, voluntarily or involuntarily
bankrupt, or a receiver, assignee or other liquidating officer is appointed for
Tenant’s business, provided that in the event of any involuntary bankruptcy or
other insolvency proceeding, the existence of such proceeding shall constitute
an Event of Default only if such proceeding is not dismissed or vacated within
60 days after its institution or commencement.


 


d.     Levy or
Execution.  Tenant’s interest in this Lease or the
Premises, or any part thereof, is taken by execution or other process of law
directed against Tenant, or is taken upon or subjected to any attachment by any
creditor of Tenant, if such attachment is not discharged within 15 days after
being levied.


 


e.     Other
Non-Monetary Defaults.  Tenant breaches any agreement, term or
covenant of this Lease other than one requiring the payment of money and not
otherwise enumerated in this Section, and the breach continues for a period of
30 days after notice by Landlord to Tenant of the breach.


 


f.      Failure to Take
Possession.  Tenant fails to take possession
of the Premises on the Commencement 

Date.


 


22.       REMEDIES.


 


Landlord shall
have the following remedies upon an Event of Default.  Landlord’s rights and remedies under this
Lease shall be cumulative, and none shall exclude any other right or remedy
allowed by law.


 


a.     Termination of
Lease.  Landlord may terminate Tenant’s
interest under the Lease, but no act by Landlord other than written notice from
Landlord to Tenant of termination shall terminate this Lease.  The Lease shall terminate on the date
specified in the notice of termination.  Upon
termination of this Lease, Tenant will remain liable to Landlord for damages in
an amount equal to the rent and other sums that would have been owing by Tenant
under this Lease for the balance of the Lease term, less the net proceeds, if
any, of any reletting of the Premises by Landlord subsequent to the
termination, after deducting all Landlord’s Reletting Expenses (as defined
below).  Landlord shall be entitled to
either collect damages from Tenant monthly on the days on which rent or other
amounts would have been payable under the Lease, or alternatively, Landlord may
accelerate Tenant’s obligations under the Lease and recover from Tenant: (i) unpaid
rent which had been earned at the time of termination; (ii) the amount by
which the unpaid rent which would have been earned after termination until the
time of award exceeds the amount of rent loss that Tenant proves could
reasonably have been avoided; (iii) the amount by which the unpaid rent
for the balance of the term of the Lease after the time of award exceeds the
amount of rent loss that Tenant proves could reasonably be avoided (discounting
such amount by the discount rate of the Federal Reserve Bank of San Francisco
at the time of the award, plus 1%); and (iv) any other amount necessary to
compensate Landlord for all the detriment proximately caused by Tenant’s
failure to perform its


 


8





















 


obligations under
the Lease, or which in the ordinary course would be likely to result from the
Event of Default, including without limitation Reletting Expenses described in Section 22b.


 


b.     Re-Entry and
Reletting.  Landlord may continue this Lease
in full force and effect, and without demand or notice, re-enter and take
possession of the Premises or any part thereof, expel the Tenant from the
Premises and anyone claiming through or under the Tenant, and remove the
personal property of either.  Landlord
may relet the Premises, or any part of them, in Landlord’s or Tenant’s name for
the account of Tenant, for such period of time and at such other terms and
conditions, as Landlord, in its discretion, may determine.  Landlord may collect and receive the rents
for the Premises.  Re-entry or taking
possession of the Premises by Landlord under this Section shall not be
construed as an election on Landlord’s part to terminate this Lease, unless a
written notice of termination is given to Tenant.  Landlord reserves the right following any
re-entry or reletting, or both, under this Section to exercise its right
to terminate the Lease.  During the Event
of Default, Tenant will pay Landlord the rent and other sums which would be
payable under this Lease if repossession had not occurred, plus the net
proceeds, if any, after reletting the Premises, after deducting Landlord’s
Reletting Expenses.  “Reletting Expenses”
is defined to include all expenses incurred by Landlord in connection with
reletting the Premises, including without limitation, all repossession costs,
brokerage commissions, attorneys’ fees, remodeling and repair costs, costs for
removing and storing Tenant’s property and equipment, and rent concessions
granted by Landlord to any new Tenant, prorated over the life of the new lease.


 


c.     Waiver of
Redemption Rights.  Tenant, for itself, and on
behalf of any and all persons claiming through or under Tenant, including
creditors of all kinds, hereby waives and surrenders all rights and privileges
which they may have under any present or future law, to redeem the Premises or
to have a continuance of this Lease for the Lease term, as it may have been
extended.


 


d.     Nonpayment of
Additional Rent.  All costs which Tenant agrees to pay to
Landlord pursuant to this Lease shall in the event of nonpayment be treated as
if they were payments of Rent, and Landlord shall have all the rights herein
provided for in case of nonpayment of Rent.


 


e.     Failure to
Remove Property.  If Tenant fails to remove any of its property
from the Premises at Landlord’s request following an uncured Event of Default,
Landlord may, at its option, remove and store the property at Tenant’s expense
and risk.  If Tenant does not pay the
storage cost within five (5) days of Landlord’s request, Landlord may, at
its option, have any or all of such property sold at public or private sale
(and Landlord may become a purchaser at such sale), in such manner as Landlord
deems proper, UPON REASONABLE NOTICE
to Tenant.  Landlord shall apply the
proceeds of such sale: (I) to the expense of such sale, including reasonable attorneys’
fees actually incurred; (ii) to the payment of the costs or charges for
storing such property; (iii) to the payment of any other sums of money
which may then be or thereafter become due Landlord from Tenant under any of
the terms hereof; and (iv) the balance, if any, to Tenant.  Nothing in this Section shall limit
Landlord’s right to sell Tenant’s personal property as permitted by law to
foreclose Landlord’s lien for unpaid rent.


 


23.       MORTGAGE SUBORDINATION AND ATTORNMENT.  This
Lease shall automatically be subordinate to any mortgage or deed of trust
created by Landlord which is now existing or hereafter placed upon the Premises
including any advances, interest, modifications, renewals, replacements or
extensions (“Landlord’s Mortgage”), provided the holder of any Landlord’s
Mortgage or any person(s) acquiring the Premises at any sale or other
proceeding under any such Landlord’s Mortgage shall elect to continue this
Lease in full force and effect.  Tenant
shall attorn to the holder of any Landlord’s Mortgage or any person(s)
acquiring the Premises at any sale or other proceeding under any Landlord’s
Mortgage provided such person(s) assume the obligations of Landlord under this
Lease.  Tenant shall promptly and in no
event later than fifteen (15) days execute, acknowledge and deliver documents
which the holder of any Landlord’s Mortgage may reasonably require as further
evidence of this subordination and attornment. 
Notwithstanding the foregoing, Tenant’s obligations under this Section are
conditioned on the holder of each of Landlord’s Mortgage and each person
acquiring the Premises at any sale or other proceeding under any such Landlord’s
Mortgage not disturbing Tenant’s occupancy and other rights under this Lease,
so long as no uncured Event of Default exists.


 


24.       NON-WAIVER.  Landlord’s
waiver of any breach of any term contained in this Lease shall not be deemed to
be a waiver of the same term for subsequent acts of Tenant.  The acceptance by Landlord of Rent or other
amounts due by Tenant hereunder shall not be deemed to be a waiver of any
breach by Tenant preceding such acceptance.


 


9





















 


25.       HOLDOVER.  If Tenant
shall, without the written consent of Landlord, hold over after the expiration
or termination of the Term, such tenancy shall be deemed to be on a
month-to-month basis and may be terminated according to Washington law.  During such tenancy, Tenant agrees to pay to
Landlord 125% the rate of rental last payable under this Lease, unless a different
rate is agreed upon by Landlord.  All
other terms of the Lease shall remain in effect.


 


26.       NOTICES.  All notices
under this Lease shall be in writing and effective (I) when delivered in
person, (ii) three (3) days after being sent by registered or certified
mail to Landlord or Tenant, as the case may be, at the Notice Addresses set
forth in Section 1(h); or (iii) upon confirmed transmission by
facsimile to such persons at the facsimile numbers set forth in Section 1(h) or
such other addresses/facsimile numbers as may from time to time be designated
by such parties in writing.


 


27.       COSTS AND ATTORNEYS’ FEES.  If Tenant
or Landlord engage the services of an attorney to collect monies due or to
bring any action for any relief against the other, declaratory or otherwise,
arising out of this Lease, including any suit by Landlord for the recovery of
Rent or other payments, or possession of the Premises, OR
ANY  PROCEEDINGS  IN  A FEDERAL BANKRUPTCY CASE
BY OR AGAINST TENANT, the losing party shall pay the prevailing
party a reasonable sum for attorneys’ fees AND ALL ACTUAL COSTS
in such suit, at trial and on appeal.


 


28.       ESTOPPEL CERTIFICATES.  Tenant
shall, from time to time, upon written request of Landlord, execute,
acknowledge and deliver to Landlord or its designee a written statement
specifying the following, subject to any modifications necessary to make such
statements true and complete: (i) the date the Lease term commenced and
the date it expires; (ii) the amount of minimum monthly Rent and the date
to which such Rent has been paid; (iii) that this Lease is in full force
and effect and has not been assigned, modified, supplemented or amended in any
way; (iv) that this Lease represents the entire agreement between the
parties; (v) that all conditions under this Lease to be performed by
Landlord have been satisfied; (vi) that there are no existing claims,
defenses or offsets which the Tenant has against the enforcement of this Lease
by Landlord; (vii) that no Rent has been paid more than one month in
advance; and (viii) that no security has been deposited with Landlord (or,
if so, the amount thereof).  Any such
statement delivered pursuant to this Section may be relied upon by a
prospective purchaser of Landlord’s interest or assignee of any mortgage or new
mortgagee of Landlord’s interest in the Premises.  If Tenant shall fail to respond within ten (10) days
of receipt by Tenant of a written request by Landlord as herein provided, Tenant
shall be deemed to have given such certificate as above provided without modification
and shall be deemed to have admitted the accuracy of any information supplied
by Landlord to a prospective purchaser or mortgagee.


 


29.       TRANSFER OF LANDLORD’S INTEREST.  This Lease
shall be assignable by Landlord without the consent of Tenant.  In the event of any transfer or transfers of
Landlord’s interest in the Premises, other than a transfer for security
purposes only, upon the assumption of this Lease by the transferee, Landlord
shall be automatically relieved of obligations and liabilities accruing from
and after the date of such transfer, except for any retained security deposit
or prepaid rent, and Tenant shall attorn to the transferee.


 


30.       RIGHT TO PERFORM.  If Tenant
shall fail to timely pay any sum or perform any other act on its part to be
performed hereunder, Landlord may make any such payment or perform any such
other act on Tenant’s part to be made or performed as provided in this Lease.  Tenant shall, on demand, reimburse Landlord
for its expenses incurred in making such payment or performance.  Landlord shall (in addition to any other
right or remedy of Landlord provided by law) have the same rights and remedies
in the event of the nonpayment of sums due under this Section as in the
case of default by Tenant in the payment of Rent.


 


31.       HAZARDOUS MATERIAL.  LANDLORD MAKES NO REPRESENTATION OR WARRANTIES REGARDING “HAZARDOUS
MATERIAL” (AS DEFINED BELOW) ON, IN, OR UNDER THE PREMISES.  IF THERE IS ANY HAZARDOUS MATERIAL ON, IN, OR
UNDER THE PREMISES AS OF THE STARTING DATE OF TENANT’S WORK OR AS OF THE
COMMENCEMENT DATE, WHICH HAS BEEN OR THEREAFTER BECOMES UNLAWFULLY RELEASED
THROUGH NO FAULT OF TENANT, THEN LANDLORD SHALL INDEMNIFY, DEFEND AND HOLD
TENANT HARMLESS FROM ANY AND ALL CLAIMS, JUDGMENTS, DAMAGES, PENALTIES, FINES,
COSTS, LIABILITIES OR LOSSES INCLUDING, WITHOUT LIMITATION, SUMS PAID IN
SETTLEMENT OF CLAIMS, ATTORNEYS FEES, CONSULTANT FEES AND EXPERT FEES, INCURRED
OR SUFFERED BY TENANT EITHER DURING OR AFTER THE LEASE TERM AS A RESULT OF SUCH
CONTAMINATION.


 


Tenant shall
not cause or permit any Hazardous Material to be brought upon, kept, or used in
or about, or disposed of on the Premises by Tenant, its agents, employees,
contractors or invitees, except in strict compliance with all applicable
federal, state and local laws, regulations, codes and ordinances.  If Tenant breaches the


 


10





















 


obligations
stated in the preceding sentence, then Tenant shall indemnify, defend and hold
Landlord harmless from any and all claims, judgments, damages, penalties,
fines, costs, liabilities or losses including, without limitation, diminution
in the value of the Premises, damages for the loss or restriction on use of
rentable or usable space or of any amenity of the Premises, or elsewhere, damages
arising from any adverse impact on marketing of space at the Premises, and sums
paid in settlement of claims, attorneys’ fees, consultant fees and expert fees
incurred or suffered by Landlord either during or after the Lease term.  THESE INDEMNIFICATIONS BY
LANDLORD AND TENANT INCLUDE, without limitation, costs incurred in
connection with any investigation of site conditions or any clean-up, remedial,
removal or restoration work, whether or not required by any federal, state or
local governmental agency or political subdivision, because of Hazardous
Material present in the Premises, or in soil or ground water on or under the
Premises.  Tenant shall immediately
notify Landlord of any inquiry, investigation or notice that Tenant may receive
from any third party regarding the actual or suspected presence of Hazardous
Material on the Premises.


 


Without
limiting the foregoing, if the presence of any Hazardous Material brought upon,
kept or used in or about the Premises by Tenant, its agents, employees, contractors
or invitees, results in any unlawful release of Hazardous Materials on the
Premises or any other property, Tenant shall promptly take all actions, at its
sole expense, as are necessary to return the Premises or any other property, to
the condition existing prior to the release of any such Hazardous Material;
provided that Landlord’s approval of such actions shall first be obtained,
which approval may be withheld at Landlord’s sole discretion.


 


As used
herein, the term “Hazardous Material” means any hazardous, dangerous, toxic or
harmful substance, material or waste including biomedical waste which is or
becomes regulated by any local governmental authority, the State of Washington
or the United States Government, due to its potential harm to the health,
safety or welfare of humans or the environment.


 


32.       QUIET ENJOYMENT.  So long as Tenant
pays the Rent and performs all of its obligations in this Lease, Tenant’s
possession of the Premises will not be disturbed by Landlord or anyone claiming
by, through or under Landlord, or by the holders of any Landlord’s Mortgage or
any successor thereto.


 


33.       RIGHT OF ENTRY.  Landlord
and its agents, employees and contractors shall have the right to enter the
Premises at reasonable times for inspection, to make repairs, alterations, and
improvements, to show the Premises to prospective purchasers and, within six (6) months
prior to the expiration of the Lease term, to show the Premises to prospective Tenants.


 


SURRENDER OF PREMISES.  TENANT SHALL SURRENDER POSSESSION OF THE
PREMISES AND ALL OF TENANT’S ALTERATIONS, AS DEFINED ABOVE, OTHER THAN THOSE
THAT LANDLORD HAS DEMANDED TENANT TO REMOVE IN ACCORDANCE WITH SECTION 12,
TO LANDLORD UPON EXPIRATION OF THIS LEASE, OR UPON ITS EARLIER TERMINATION,
BROOM CLEAN AND IN GOOD CONDITION AND REPAIR (EXCEPT FOR ORDINARY WEAR AND TEAR
OR DESTRUCTION TO THE PREMISES COVERED BY SECTION 16 WHERE LANDLORD ELECTS
TO TERMINATE).  TENANT’S SURRENDER OF THE
PREMISES UPON EXPIRATION OF THE TERM SHALL BE WITHOUT THE NECESSITY OF ANY NOTICE
FROM LANDLORD, AND TENANT HEREBY WAIVES NOTICE TO VACATE THE PREMISES.  IF TENANT FAILS TO SURRENDER THE PREMISES
UPON THE EXPIRATION OF THE TERM, OR UPON TERMINATION OF ANY HOLDOVER PERIOD, IF
APPLICABLE, UNDER SECTION 25 ABOVE, TENANT WILL BE LIABLE TO LANDLORD FOR
ANY AND ALL DAMAGES INCURRED BY LANDLORD AS A RESULT, AND TENANT WILL INDEMNIFY
LANDLORD AGAINST ALL CLAIMS AND DEMANDS MADE BY ANY SUCCEEDING TENANTS AND/OR
BROKERS AGAINST LANDLORD BASED ON DELAY BY LANDLORD IN DELIVERING POSSESSION OF
THE PREMISES TO SUCH SUCCEEDING TENANT OR OWNER.  IN ADDITION, TENANT SHALL PAY TO LANDLORD,
DURING ANY PERIOD THAT IT SHALL REFUSE TO SURRENDER POSSESSION OF THE PREMISES
TO LANDLORD, THE BASE RENT AT THE RATE SPECIFIED IN SECTION 1 TOGETHER
WITH ALL ADDITIONAL RENT DUE HEREUNDER.


 


LIMITATION ON LANDLORD’S LIABILITY.  IF LANDLORD IS IN DEFAULT OF
THIS LEASE, AND AS A CONSEQUENCE TENANT RECOVERS A MONEY JUDGMENT AGAINST
LANDLORD, THE JUDGMENT SHALL BE SATISFIED ONLY OUT OF THE PROCEEDS OF SALE
RECEIVED ON EXECUTION OF THE JUDGMENT AND LEVY AGAINST THE RIGHT, TITLE AND
INTEREST OF LANDLORD IN THE PREMISES, OR OUT OF RENT OR OTHER INCOME FROM THE
BUILDING, RECEIVABLE BY LANDLORD, OR OUT OF THE CONSIDERATION RECEIVED BY
LANDLORD FROM THE SALE OR OTHER DISPOSITION OF ALL OR ANY PART OF LANDLORD’S
RIGHT, TITLE AND INTEREST IN THE PROPERTY; PROVIDED, HOWEVER, THAT THIS
LIMITATION SHALL NOT BE APPLICABLE IF MORE THAN 75% OF THE FAIR MARKET VALUE OF
THE PROPERTY AT THE LEASE COMMENCEMENT DATE IS ENCUMBERED AT THE TIME OF ENTRY
OF ANY SUCH MONETARY JUDGMENT.


 


11





















 


NO INTERFERENCE FROM DELETED TEXT.  THIS LEASE WAS FREELY AND
VOLUNTARILY NEGOTIATED BETWEEN THE PARTIES. 
ALTHOUGH THE PRINTED PROVISIONS OF THIS LEASE WERE INITIALLY DRAWN BY
LANDLORD OR LANDLORD’S AGENT, LANDLORD AND TENANT AGREE THAT THIS CIRCUMSTANCE
SHALL NOT CREATE ANY PRESUMPTION, CANON OF CONSTRUCTION, OR IMPLICATION
FAVORING THE POSITION OF EITHER LANDLORD OR TENANT.  THIS LEASE HAS BEEN SUBMITTED TO THE SCRUTINY
OF ALL PARTIES AND THEIR COUNSEL IF DESIRED OR REQUIRED.  LANDLORD AND TENANT AGREE THAT THE
INTERLINEATION, OBLITERATION, OR DELETION OF LANGUAGE FROM THIS LEASE, OR ANY
OF ITS PRELIMINARY DRAFTS, PRIOR TO ITS MUTUAL EXECUTION BY LANDLORD AND TENANT
SHALL NOT BE CONSTRUED TO HAVE ANY PARTICULAR MEANING OR IMPLICATION,
INCLUDING, WITHOUT LIMITATION, ANY IMPLICATION THAT LANDLORD OR TENANT INTENDED
TO STATE THE OPPOSITE OF THE DELETED LANGUAGE. 
THIS LEASE SHALL BE READ AS IF OBLITERATED OR DELETED LANGUAGE HAD NEVER
EXISTED AND INTERLINEATED LANGUAGE HAD ALWAYS EXISTED AND SHALL BE GIVEN A FAIR
AND REASONABLE INTERPRETATION IN ACCORDANCE WITH THE WORDS HEREOF, WITHOUT
CONSIDERATION OF WEIGHT BEING GIVEN TO ITS HAVING BEEN DRAFTED BY ANY PARTY
HERETO OR ITS COUNSEL.


 


FAILURE TO SEND AN INVOICE NOT WAIVER.  LANDLORD’S FAILURE TO PROVIDE
ANY INVOICES, BILL STATEMENTS, ACCOUNTING NOTICES OR DEMANDS REQUIRED HEREUNDER
WITH RESPECT TO AN OBLIGATION OF TENANT, SHALL IN NO WAY EXCUSE OR RELIEVE
TENANT FROM SUCH OBLIGATION OR CONSTITUTE A WAIVER OF LANDLORD’S RIGHT TO  BILL AND COLLECT SUCH OBLIGATION.


 


34.       GENERAL.


 


a.     Heirs and
Assigns.  This Lease shall apply to and be
binding upon Landlord and Tenant and their respective heirs, executors,
administrators, successors and assigns.


 


b.     Brokers’ Fees.  Tenant represents and warrants to Landlord that it has not
engaged any broker, finder or other person who would be entitled to any
commission or fees for the negotiation, execution, or delivery of this Lease
other than as disclosed in Section 1(i) or elsewhere in this Lease.  Tenant shall indemnify and hold Landlord
harmless against any loss, cost, liability or expense incurred by Landlord as a
result of any claim asserted by any such broker, finder or other person on the
basis of any arrangements or agreements made or alleged to have been made by or
on behalf of Tenant.  This subparagraph
shall not apply to brokers with whom Landlord has an express written brokerage
agreement.


 


c.     Entire
Agreement.  This Lease contains all of the
covenants and agreements between Landlord and Tenant relating to the Premises.  No prior or contemporaneous agreements or
understanding pertaining to the Lease shall be valid or of any force or effect
and the covenants and agreements of this Lease shall not be altered, modified
or added to except in writing signed by Landlord and Tenant.


 


d.     Severability.  Any provision of this Lease which shall prove to be invalid,
void or illegal shall in no way affect, impair or invalidate any other provision
of this Lease.


 


e.     Force Majeure.  Time periods for either party’s performance under any
provisions of this Lease (excluding payment of Rent) shall be extended for
periods of time during which the party’s performance is prevented due to
circumstances beyond such party’s control, including without limitation, fires,
floods, earthquakes, lockouts, strikes, embargoes, governmental regulations,
acts of God, public enemy, war or other strife.


 


f.      Governing Law.  This Lease shall be governed by, construed AND ENFORCED in accordance with the laws of the State of Washington.  JURISDICTION
AND VENUE FOR ANY ACTION RELATED TO THIS LEASE SHALL BE IN THE WASHINGTON STATE
SUPERIOR COURT FOR SNOHOMISH COUNTY.


 


g.     Memorandum of
Lease.  Except for the pages containing
the Broker Provisions and Commission Agreement, the parties signatures and
attached Exhibits A and B, this Lease shall not be recorded.  However, Landlord and Tenant shall, at the
other’s request, execute and record a memorandum of Lease in recordable form that
identifies Landlord and Tenant, the commencement and expiration dates of the
Lease, and the legal description of the Premises as set forth on attached Exhibit B.


 


h.     Submission of
Lease Form Not an Offer.  One party’s submission of this
Lease to the other for review shall not constitute an offer to lease the
Premises.  This Lease shall not become
effective and binding upon Landlord and Tenant until it has been fully signed
by both Landlord and Tenant.


 


i.      No Light, Air
or View Easement.  Tenant has not been granted an
easement or other right for light, air or view to or from the Premises.  Any diminution or shutting off of light, air
or view by any structure which may be


 


 


12





















 


erected on or
adjacent to the Building shall in no way effect this Lease or the obligations
of Tenant hereunder or impose any liability on Landlord.


 


j.      Authority of
Parties.  Any individual signing this
Lease on behalf of an entity represents and warrants to the other that such
individual has authority to do so and, upon such individual’s execution, that
this Lease shall be binding upon and enforceable against the party on behalf of
whom such individual is signing.


 


35.       Exhibits and Riders.  The following
exhibits and riders are made a part of this Lease:


 


Exhibit A        Floor
Plan Outline of the Premises


 


Exhibit B        Legal
Description


 


Exhibit C        Tenant
Improvement Schedule


 


Exhibit D        Rules and
Regulations


 


EXHIBIT E    ENCUMBRANCE
OF LEASEHOLD ESTATE


 


EXHIBIT F    CERTIFICATE
OF LANDLORD WAIVER


 


CHECK THE BOX
FOR ANY OF THE FOLLOWING THAT WILL APPLY. 
ANY RIDERS CHECKED SHALL BE EFFECTIVE ONLY UPON BEING INITIALED BY THE
PARTIES AND ATTACHED TO THE LEASE.  CAPITALIZED
TERMS USED IN THE RIDERS SHALL HAVE THE MEANING GIVEN TO THEM IN THE LEASE.


 


ý    Rent
Rider


 


o    Retail
Use Rider


 


ý    Arbitration
Rider


 


o    Limitation
on Landlord’s Liability Rider


 


ý    Guaranty
of Tenant’s Lease Obligations Rider


 


o    Parking
Rider


 


ý    Option
to Extend Rider


 


36.       AGENCY DISCLOSURE.  At the
signing of this Agreement,


 


Landlord’s Agent
TOM BOHMAN, MIKE LIVINGSTON OF


 


CUSHMAN & WAKEFIELD OF WASHINGTON, INC.


(insert names of Licensee and the Company name as licensed)


 


represented LANDLORD


(insert Landlord, Tenant, both Landlord and Tenant or neither Landlord
nor Tenant)


 


and Tenant’s Broker
(Licensee) SCOTT ROBERTSON OF


 


KIDDER MATHEWS & SEGNER


(insert names of Licensee and the Company name as licensed)


 


represented TENANT


(insert Landlord, Tenant,
both Landlord and Tenant or neither Landlord nor Tenant)


 


If Tenant’s
Licensee and Landlord’s Agent are different salespersons affiliated with the
same Broker, then both Buyer and Seller confirm their consent to that Broker
acting as a dual agent.  If Tenant’s
Licensee and Landlord’s Agent are the same salesperson representing both
parties, then both Landlord and Tenant confirm their consent to that
salesperson and his/her Broker acting as dual agents.  Landlord and Tenant confirm receipt of the
pamphlet entitled “The Law of Real Estate Agency.”


 


13





















 


37.       BROKER PROVISIONS AND COMMISSION AGREEMENT.


 


Landlord shall
pay a commission to            (“Landlord’s
Broker”) in the amount stated BELOW.


 


LANDLORD
SHALL PAY CUSHMAN & WAKEFIELD A REAL ESTATE COMMISSION EQUAL TO FIVE
PERCENT (5%) OF THE AGGREGATE NNN RENT FOR YEARS 1-5 OF THE LEASE AND TWO AND
ONE HALF PERCENT (2 1/2%) OF THE AGGREGATE NNN RENT FOR YEARS 6-10
OF THE LEASE TERM.  CUSHMAN &
WAKEFIELD SHALL SPLIT THE ABOVE COMMISSION ON A 50/50 BASIS WITH KIDDER MATHEWS &
SEGNER.  IN ADDITION TO THE ABOVE
COMMISSION, LANDLORD SHALL PAY CUSHMAN & WAKEFIELD AN ADDITIONAL
COMMISSION EQUAL TO ONE DOLLAR FIFTY CENTS PER SQUARE FOOT ($1.50/SF), ALL OF
WHICH SHALL BE PAID TO KIDDER MATHEWS & SEGNER.  ABOVE COMMISSIONS SHALL BE PAID ONE HALF
(1/2) UPON EXECUTION OF THE LEASE AND THE BALANCE UPON OCCUPANCY.


 


If Landlord’s
Agent is required to employ an attorney to enforce or declare its rights under
this Section, the prevailing party in any such action shall be entitled to
recover its reasonable attorneys’ fees, in an amount determined by the court.  Neither Landlord’s Agent nor Tenant’s
Licensee are receiving compensation from more than one party to this
transaction unless otherwise disclosed on an attached addendum, in which case
Landlord and Tenant consent to such compensation.


 


LANDLORD’S
AGENT AND TENANT’S LICENSEE HAVE MADE NO REPRESENTATIONS OR WARRANTIES
CONCERNING THE PREMISES, THE MEANING OF THE TERMS AND CONDITIONS OF THIS LEASE,
LANDLORD’S OR TENANTS FINANCIAL STANDING, ZONING, COMPLIANCE OF THE PREMISES
WITH APPLICABLE LAWS, SERVICE OR CAPACITY OF UTILITIES, OPERATING EXPENSES, OR
HAZARDOUS MATERIALS.  LANDLORD AND TENANT
ARE EACH ADVISED TO SEEK INDEPENDENT LEGAL ADVICE ON THESE AND OTHER MATTERS
ARISING UNDER THIS LEASE.


 


IN WITNESS
WHEREOF this Lease has been executed the date and year first above written.


 


	
  /s/ Mary
  Stuart Hartman

  	
   

  	
   

  
	
  LANDLORD:

  	
   

  	
  TENANT

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/ Robert
  T. Warstler

  
	
  LANDLORD:

  	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
  BY:

  	
   

  	
  ITS:

  
	
   

  	
   

  	
   

  
	
  BY:

  	
   

  	
  ITS:

  



 


14





















 


	
  STATE OF
  NORTH CAROLINA

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF
  Avery

  	
  )

  



 


I certify that
I know or have satisfactory evidence that Mary Stuart Hartmann as the person who
appeared before me and said person acknowledged that she signed this
instrument, on oath stated that she was authorized to execute the instrument and
acknowledged it as the Trustee of W. L. Hartmann Marital Trust to be the free and
voluntary act of such party for the uses and purposes mentioned in the
instrument.


 


DATED: 24 of August   ,  
2000


 


	
  (Seal or
  stamp)

  	
   

  	
  /s/ Becky I.
  Alghrary

  
	
   

  	
   

  
	
   

  	
  Printed
  Name:

  	
  Becky I.
  Alghrary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NOTARY
  PUBLIC in and for the State

  
	
   

  	
  of North
  Carolina residing at 140 Robert Cook Lane

  
	
   

  	
  Banner Elk,
  NC 2860

  
	
   

  	
  My
  Commission expires:

  	
  3/15/2005

  
							



 


 


	
  STATE OF
  California

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF Sonoma

  	
  )

  



 


I certify that
I know or have satisfactory evidence that Robert T. Warstler is the person who
appeared before me and said person acknowledged that he signed this instrument,
on oath stated that he was authorized to execute the instrument and
acknowledged it as the President of Advanced TelCom, Inc. to be the
free and voluntary act of such party for the uses and purposes mentioned in the
instrument.


 


DATED:  August 18, 2000


 


	
  (Seal or
  stamp)

  	
  /s/ Leanne
  E. Sperry

  
	
   

  	
   

  
	
   

  	
  Printed
  Name:

  	
  Leanne E.
  Sperry

  
	
   

  	
   

  	
   

  
	
  [Notary
  Seal]

  	
  NOTARY
  PUBLIC in and for the State

  
	
   

  	
  of
  California residing at

  	
  110 Stony
  Point Rd #200 Santa

  
	
   

  	
  Rosa CA
  95401

  
	
   

  	
   

  	
   

  
	
   

  	
  My
  Commission expires:

  	
  12-30-03

  
						



 


15





















 


	
  STATE OF
  WASHINGTON

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF

  	
  )

  



 


I certify that
I know or have satisfactory evidence that                                              is
the person who appeared before me and said person acknowledged that                                                 signed
this instrument, on oath stated that                                                   was
authorized to execute the instrument and acknowledged it as the                                                        of
                                     to
be the free and voluntary act of such party for the uses and purposes mentioned
in the instrument.


 


DATED:                       ,
             


 


	
  (Seal or
  stamp)

  	
   

  
	
   

  	
   

  
	
   

  	
  Printed
  Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  NOTARY
  PUBLIC in and for the State

  
	
   

  	
  of
  Washington residing at

  	
   

  
	
   

  	
   

  
	
   

  	
  My
  Commission expires:

  	
   

  
					



 


	
  STATE OF
  WASHINGTON

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF

  	
  )

  



 


I certify that
I know or have satisfactory evidence that                                           is
the person who appeared before me and said person acknowledged that                                             signed
this instrument, on oath stated that                                             was
authorized to execute the instrument and acknowledged it as the                                                                 of
Advanced TelCom, Inc. to be the free and voluntary act of such party for
the uses and purposes mentioned in the instrument.


 


DATED:                      ,
           


 


	
  (Seal or
  stamp)

  	
   

  
	
   

  	
   

  
	
   

  	
  Printed
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
  [Notary
  Seal]

  	
  NOTARY
  PUBLIC in and for the State

  
	
   

  	
  of
  California residing at

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  My
  Commission expires:

  	
   

  
						



 


16





















 


EXHIBIT A
[Outline of the Premises]


 


 


	
  

  



 


17





















 


EXHIBIT B
[Legal Description]


 


 


Lots 15, 16, and 17, re-plat of Block 683,
Plat of Everett, as per plat recorded in volume 4 of Plats on page 49,
records of Snohomish County, State of Washington.


 


18





















 


EXHIBIT C
[Tenant Improvement Schedule]


 


LANDLORD’S WORK:


 


1.                                      LANDLORD SHALL REMOVE THE BRICK CHIMNEY FROM
THE ROOF OF THE BUILDING PRIOR TO LEASE COMMENCEMENT.


 


2.                                      LANDLORD SHALL SEAL OR RESEAL THE EXISTING
ROOF MEMBRANE.  LANDLORD SHALL COORDINATE
SAID ROOF WORK WITH TENANT’S IMPROVEMENT SCHEDULE.


 


TENANTS WORK:


 


ARCHITECTURAL:


 


1.                                      DEMOLITION OF EXISTING WALLS, STRUCTURES, AND
FINISHES TO ACCOMMODATE NEW WORK.


 


2.                                      NEW WALLS AND FLOOR COVERINGS FOR NEW SPACES
THAT INCLUDE WAITING/RECEPTION, CUSTOMER SERVICE AREAS, VARIOUS OFFICES,
SUPPORT, AND ADMINISTRATIVE SPACES, TECHNICIAN AND MCC ROOMS, CONFERENCE ROOMS,
AND SWITCH EQUIPMENT ROOMS.  NEW CEILING
IS PROPOSED FOR THE SWITCH EQUIPMENT ROOM. 
IF BUDGET ALLOWS, NEW CEILINGS WILL REPLACE EXISTING CEILINGS IN OTHER
REMODELED AREAS.


 


3.                                      A NEW 4” NORMAL WEIGHT CONCRETE TOPPING SLAB
IS BEING CONSIDERED FOR THE SWITCH ROOM FOR PURPOSES OF ANCHORING THE RACKS TO
THE FLOOR.


 


4.                                      THE AREA ADJACENT TO THE BASEMENT RAMP WILL
BE ENCLOSED TO ACCOMMODATE THE GENERATOR.


 


5.                                      THE AREA WEST OF THE EXISTING BASEMENT TOILET
ROOMS IS ANTICIPATED TO BE ENCLOSED TO PROVIDE SECURED SPACE FOR THE BATTERY
EQUIPMENT ROOM.


 


6.                                      THE INTERMEDIATE WALLS BETWEEN THE THREE
EXISTING BASEMENT STORAGE ROOMS IS SCHEDULED TO BE DEMOLISHED (ALONG WITH THE
CONCRETE CEILING IN THE CENTER STORAGE ROOM) TO COMBINE ALL THREE ROOMS INTO
ONE NEW CO-LOCATION SPACE.


 


7.                                      NEW BACK PORCH/ENTRY TO ACCOMMODATE THE NEW
GENERATOR EXHAUST SHAFT AND PROVIDE IMPROVED EQUIPMENT ACCESS TO THE INTERIOR.


 


STRUCTURAL:


 


1.                                      PROVIDES NEW COLUMNS AND FOOTINGS TO INCREASE
THE FLOOR LOAD CARRYING CAPACITY FOR THE SWITCH EQUIPMENT ROOM.


 


MECHANICAL AND ELECTRICAL:


 


1.                                      UPGRADE ELECTRICAL POWER SERVICE TO THE
BUILDING.


 


2.                                      REPLACE EXISTING ELECTRICAL SERVICE
SWITCHGEAR AND UPGRADE DISTRIBUTION SYSTEM.


 


3.                                      UPGRADE EMERGENCY EGRESS LIGHTING SYSTEM.


 


4.                                      INSTALL EMERGENCY GENERATOR AND AUTOMATIC
TRANSFER EQUIPMENT.


 


5.                                      AUGMENT EXISTING HVAC SYSTEM TO PROVIDE
ADDITIONAL COOLING AS NECESSARY TO SUPPORT EQUIPMENT


 


19





















 


6.                                      UPGRADE EXISTING TELEPHONE SERVICE TO
BUILDING TO INCLUDE REDUNDANT, FIBER OPTIC CABLE SERVICE.


 


7.                                      MODIFY PLUMBING TO ACCOMMODATE NEW FIXTURES.


 


8.                                      MODIFY EXISTING LIGHTING TO SUPPORT NEW FLOOR
PLAN CONFIGURATION.


 


9.                                      EXTEND EXISTING FIRE SPRINKLER SYSTEM FOR
APPROPRIATE COVERAGE.


 


10.                               PROVIDE AN ELECTRONIC SECURITY SYSTEM.


 


11.                               TENANT SHALL DELIVER TO LANDLORD A COPY OF
THE CERTIFICATE OF OCCUPANCY OR OTHER GOVERNMENTAL SIGN-OFF PERMITTING TENANT’S
OCCUPANCY OF THE PREMISES ISSUED BY THE APPROPRIATE GOVERNMENTAL AGENCY UPON
COMPLETION OF TENANT’S WORK.


 


TENANT UNDERSTANDS AND ACKNOWLEDGES THAT IT SHALL
DESIGN, PAY FOR, AND ARRANGE FOR PERFORMANCE OF ALL TENANT’S WORK, INCLUDING
ALL NECESSARY PERMITS.  ALL OF TENANT’S
WORK IS AT TENANT’S ELECTION AND IS NOT BEING SPECIFICALLY REQUIRED BY THE
LANDLORD AS A CONDITION OF THE PARTIES’ LEASE. 
TENANT’S PLANS SHALL BE SUBJECT TO LANDLORD’S APPROVAL, WHICH APPROVAL
SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED. 
LANDLORD SHALL BE ENTITLED TO WITHHOLD APPROVAL IF THE PROPOSED PLANS
AND SPECIFICATIONS (I) INTERFERE WITH THE STRUCTURAL INTEGRITY OF THE
BUILDINGS, (II) OVERLOAD THE UTILITY SYSTEMS OF THE BUILDINGS, (III) VIOLATE
ANY APPLICABLE LAWS OR REGULATIONS, (IV) MATERIALLY AFFECT THE ARCHITECTURAL
INTEGRITY OF THE BUILDINGS, OR (V) AFFECT THE FUTURE MARKETABILITY OF THE BUILDING.  THE COST TO LANDLORD OF REVIEW OF THE TENANT’S
PLANS BY DESIGN PROFESSIONALS, INCLUDING ARCHITECTS AND ENGINEERS, AS
APPROPRIATE, SHALL BE PAID FOR AND REIMBURSED TO LANDLORD BY TENANT.  IF LANDLORD DISAPPROVES OF ANY OF TENANT’S
PLANS, LANDLORD SHALL ADVISE TENANT IN REASONABLE DETAIL OF REQUIRED REVISIONS
AND THE REASONS THEREFOR, AFTER BEING SO ADVISED BY LANDLORD, TENANT SHALL
PROMPTLY SUBMIT A REDESIGN, INCORPORATING THE REVISIONS REQUIRED BY LANDLORD,
FOR LANDLORD’S APPROVAL.  IF TENANT HAS
REASON TO DISPUTE ANY LANDLORD DISAPPROVAL, THEN THE PARTIES SHALL MEET WITHIN
FIVE (5) DAYS AND ATTEMPT TO RESOLVE THE DISPUTE.


 


IF THE PARTIES ARE UNABLE TO RESOLVE THEIR
DIFFERENCES AS TO TENANT’S PRELIMINARY PLANS WITHIN FIVE (5) DAYS AFTER
MEETING, THEN EITHER PARTY MAY INITIATE AN ARBITRATION PROCEDURE BY
NOTIFYING THE OTHER PARTY OF THE NEED TO SUBMIT THEIR DISAGREEMENTS TO BINDING
AND FINAL ARBITRATION BY A MUTUALLY ACCEPTABLE ARBITRATOR WITH AT LEAST TEN (10) YEARS
COMMERCIAL OFFICE DESIGN EXPERIENCE.  IF
THE PARTIES ARE UNABLE TO AGREE ON THE ARBITRATOR WITHIN A PERIOD OF TEN (10) DAYS
OF NOTICE, THEN EITHER PARTY MAY REQUEST RESOLUTION BYA SINGLE ARBITRATOR
BEFORE THE AMERICAN ARBITRATION ASSOCIATION AS PROVIDED IN THE ARBITRATION
RIDER.


 


THE COMMENCEMENT DATE, AS DEFINED IN SECTION 1(B),
SHALL NOT BE DELAYED BEYOND SEPTEMBER 15, 2000 AS THE RESULT OF TENANT’S
WORK.  ALL OF TENANT’S WORK AND PERMITTED
IMPROVEMENTS SHALL BE IN ACCORDANCE WITH PLANS APPROVED BY LANDLORD.  TENANT SHALL BE RESPONSIBLE FOR AND PAY THE
COSTS OF UTILITIES TO THE PREMISES DURING THE PERIOD OF TENANT’S WORK PRIOR TO
THE COMMENCEMENT DATE.


 


TENANT SHALL HAVE THE RIGHT TO INSTALL ON THE ROOF
(PROVIDED THAT INSTALLATION IS PERFORMED IN ACCORDANCE WITH BUILDING CODES AND
STANDARDS) EITHER: A SATELLITE DISH MEASURING LESS THAN ONE METER IN DIAMETER,
A GPS IN-CAST ANTENNAE OR A CLUSTER OF FOUR ANTENNAS MEASURING LESS THAN 12-1NCHES
SQUARE; AND, UP TO FOUR WHIP ANTENNAS MEASURING LESS THAN 24-INCHES IN LENGTH.


 


TENANT SHALL
BE ENTITLED TO INSTALL AN EMERGENCY POWER GENERATOR FUELED BY DIESEL ON THE
PREMISES; PROVIDED SUCH USE AND OPERATION IS IN ACCORDANCE WITH ALL APPLICABLE
RULES AND LOCAL ORDINANCES.  THE
GENERATOR SHALL BE INSTALLED AS A SELF-CONTAINED UNIT WITHIN THE PREMISES AND VENTED
TO THE OUT SIDE.


 


20





















 


EXHIBIT D


 


[Rules and Regulations]


 


NOTHING IN
THESE RULES AND REGULATIONS SHALL SUPPLANT ANY PROVISION OF THE LEASE.  IN THE EVENT OF A CONFLICT OR INCONSISTENCY
BETWEEN THESE RULES AND REGULATIONS AND THE LEASE, THE LEASE SHALL PREVAIL.


 


1.                                      EXCEPT AS SPECIFICALLY PROVIDED IN THE LEASE
TO WHICH THESE RULES AND REGULATIONS ARE ATTACHED, NO SIGN, PLACARD, PICTURE,
ADVERTISEMENT, NAME OR NOTICE SHALL BE INSTALLED OR DISPLACED ON ANY PART OF
THE OUTSIDE OF THE PREMISES OR THE BUILDING WITHOUT THE PRIOR WRITTEN CONSENT
OF LANDLORD.  LANDLORD SHALL HAVE THE
RIGHT TO REMOVE, AT TENANT’S EXPENSE AND WITHOUT NOTICE, ANY SIGN INSTALLED OR
DISPLAYED IN VIOLATION OF THIS RULE.


 


2.                                      IF LANDLORD OBJECTS IN WRITING TO ANY
CURTAINS, BLINDS, SHADES, SCREENS OR HANGING PLANTS OR OTHER SIMILAR OBJECTS
ATTACHED TO OR USED IN CONNECTION WITH ANY WINDOW OR DOOR OF THE PREMISES, OR
PLACED ON ANY WINDOWSILL, WHICH IS VISIBLE FROM THE EXTERIOR OF THE PREMISES,
AND WHICH IS NOT INCLUDED IN APPROVED TENANT IMPROVEMENT PLANS, TENANT SHALL
REMOVE ANY SUCH OBJECT(S).


 


3.                                      TENANT SHALL NOT OBSTRUCT ANY SIDEWALKS OR
ENTRANCES TO THE BUILDING, OR ANY HALLS, PASSAGES, EXITS, ENTRANCES, OR
STAIRWAYS WITHIN THE PREMISES WHICH ARE REQUIRED TO BE KEPT CLEAR FOR HEALTH
AND SAFETY REASONS.


 


4.                                      NO DELIVERIES SHALL BE MADE WHICH IMPEDE OR
INTERFERE WITH THE OPERATION OF THE BUILDING.


 


5.                                      TENANT SHALL NOT PLACE A LOAD UPON ANY FLOOR
OF THE PREMISES WHICH EXCEEDS THE LOAD PER SQUARE FOOT WHICH SUCH FLOOR WAS
DESIGNED TO CARRY AND WHICH IS ALLOWED BY LAW. 
FIXTURES AND EQUIPMENT WHICH CAUSE NOISE OR VIBRATION THAT MAY BE
TRANSMITTED TO THE STRUCTURE OF THE BUILDING TO SUCH A DEGREE AS TO BE
REASONABLE OBJECTIONABLE TO ADJACENT BUILDING NEIGHBORS SHALL BE PLACED AND
MAINTAINED BY TENANT, AT TENANTS EXPENSE, ON VIBRATION ELIMINATORS OR OTHER
DEVICES SUFFICIENT TO ELIMINATE SUCH NOISE OR VIBRATION OR REDUCE SUCH NOISE
AND VIBRATION TO ACCEPTABLE LEVELS.


 


6.                                      TENANT SHALL NOT USE ANY METHOD OF HEATING OR
AIR-CONDITIONING OTHER THAN THAT SHOWN IN APPROVED TENANT IMPROVEMENT PLANS.


 


7.                                      TENANT SHALL NOT INSTALL ANY RADIO OR
TELEVISION ANTENNA, LOUDSPEAKER, TELECOMMUNICATIONS/WIRELESS EQUIPMENT, OR
OTHER DEVICES ON THE ROOF OR EXTERIOR WALLS OF THE BUILDING WITHOUT LANDLORD’S
CONSENT.


 


8.                                      CANVASSING, PEDDLING, SOLICITING AND
DISTRIBUTION OF HANDBILLS OR ANY OTHER WRITTEN MATERIAL OUTSIDE OF THE PREMISES
ARE PROHIBITED, AND TENANT SHALL COOPERATE TO PREVENT SUCH ACTIVITIES.


 


9.                                      TENANT SHALL STORE ALL ITS TRASH, GARBAGE AND
HAZARDOUS MATERIAL WITHIN ITS PREMISES OR IN DESIGNATED RECEPTACLES OUTSIDE OF
THE PREMISES.  TENANT SHALL NOT PLACE IN
ANY SUCH RECEPTACLE ANY MATERIAL WHICH CANNOT BE DISPOSED OF IN THE ORDINARY
AND CUSTOMARY MANNER OF TRASH, GARBAGE AND HAZARDOUS MATERIAL DISPOSAL.


 


10.                               THE PREMISES SHALL NOT BE USED FOR ANY
IMPROPER, IMMORAL OR OBJECTIONAL PURPOSE. 
NO COOKING SHALL BE DONE OR PERMITTED ON THE PREMISES, EXCEPT THAT USE
BY TENANT OF UNDERWRITER’S LABORATORY APPROVED EQUIPMENT FOR BREWING COFFEE,
TEA, HOT CHOCOLATE AND SIMILAR BEVERAGES OR USE OF MICROWAVE OVENS FOR
EMPLOYEES USE SHALL BE PERMITTED, OR EQUIPMENT SHOWN ON APPROVED TENANT
IMPROVEMENT PLANS, PROVIDED THAT SUCH EQUIPMENT AND USE IS IN ACCORDANCE WITH
ALL APPLICABLE FEDERAL, STATE, COUNTY AND CITY LAWS, CODES, ORDINANCES, RULES
AND REGULATIONS.


 


11.                               WITHOUT THE WRITTEN CONSENT OF THE LANDLORD,
TENANT SHALL NOT USE THE NAME OF THE BUILDING, IF ANY, IN CONNECTION WITH OR IN
PROMOTING OR ADVERTISING THE BUSINESS OF TENANT EXCEPT AS TENANT’S ADDRESS.


 


12.                               TENANT SHALL COMPLY WITH ALL SAFETY, FIRE
PROTECTION AND EVACUATION PROCEDURES AND REGULATIONS ESTABLISHED BY LANDLORD OR
ANY GOVERNMENTAL AGENCY.


 


21





















 


13.                               TENANT ASSUMES ANY AND ALL RESPONSIBILITY FOR
PROTECTING ITS PREMISES FROM THEFT, ROBBERY AND PILFERAGE, WHICH INCLUDES
KEEPING DOORS LOCKED AND OTHER MEANS OF ENTRY TO THE PREMISES CLOSED.


 


14.                               LANDLORD MAY WAIVE ANY ONE OR MORE THESE
RULES AND REGULATIONS FOR THE BENEFIT OF TENANT, BUT NO SUCH WAIVER BY LANDLORD
SHALL BE CONSTRUED AS A WAIVER OF SUCH RULES AND REGULATIONS IN FAVOR OF
TENANT.


 


15.                               THESE RULES AND REGULATIONS ARE IN ADDITION
TO, AND SHALL NOT BE CONSTRUED TO IN ANY WAY MODIFY OR AMEND, IN WHOLE OR IN
PART, THE TERMS, COVENANTS, AGREEMENTS AND CONDITIONS OF THE LEASE.


 


16.                               LANDLORD RESERVES THE RIGHT TO MAKE SUCH
OTHER AND REASONABLE RULES AND REGULATIONS AS, IN ITS JUDGEMENT, MAY FROM
TIME TO TIME BE NEEDED FOR SAFETY AND SECURITY, FOR CARE AND CLEANLINESS OF THE
BUILDING, AND FOR THE PRESERVATION OF GOOD ORDER THEREIN, SUBJECT TO PRIOR
NOTICE TO TENANT AND TENANT’S CONSENT, WHICH WILL NOT BE UNREASONABLY WITHHELD,
CONDITIONED OR DELAYED.  TENANT AGREES TO
ABIDE BY ALL SUCH RULES AND REGULATIONS HEREINABOVE STATED AND ANY ADDITIONAL
RULES AND REGULATIONS WHICH ARE ADOPTED.


 


17.                               TENANT SHALL BE RESPONSIBLE FOR THE
OBSERVANCE OF ALL THE FOREGOING RULES BY TENANT’S EMPLOYEES, AGENTS, CLIENTS,
CUSTOMERS, INVITEES AND GUESTS.


 


22





















 


EXHIBIT E
ENCUMBRANCE OF LEASEHOLD ESTATE


 


TENANT’S RIGHT TO ENCUMBER


 


SECTION 1.01. TENANT
MAY, AT ANY TIME AND FROM TIME TO TIME DURING THE TERM OF THIS LEASE, ENCUMBER
TO ANY INSTITUTIONAL LENDER REGULATED BY STATE OR FEDERAL AUTHORITY (REFERRED
TO IN THIS LEASE AS “LENDER”), BY DEED OF TRUST OR MORTGAGE OR OTHER SECURITY
INSTRUMENT, ALL OF TENANT’S INTEREST UNDER THIS LEASE AND THE LEASEHOLD ESTATE
HEREBY CREATED IN TENANT (REFERRED TO IN THIS LEASE AS A “LEASEHOLD ENCUMBRANCE”
FOR ANY PURPOSE OR PURPOSES WITHOUT THE CONSENT OF LANDLORD.  HOWEVER, NO LEASEHOLD ENCUMBRANCE INCURRED BY
TENANT IN ACCORDANCE WITH THIS SECTION SHALL, AND TENANT SHALL NOT HAVE
POWER TO INCUR ANY ENCUMBRANCE THAT SHALL, CONSTITUTE IN ANY WAY A LIEN OR
ENCUMBRANCE ON LANDLORD’S FEE INTEREST IN THE PREMISES.  ANY LEASEHOLD ENCUMBRANCE SHALL BE SUBJECT TO
ALL COVENANTS, CONDITIONS, AND RESTRICTIONS SET FORTH IN THIS LEASE AND TO ALL
RIGHTS AND INTERESTS OF LANDLORD, EXCEPT AS IS OTHERWISE PROVIDED IN THIS
LEASE.  TENANT SHALL GIVE LANDLORD PRIOR
WRITTEN NOTICE OF ANY LEASEHOLD ENCUMBRANCE, TOGETHER WITH A COPY OF THE DEED
OF TRUST, MORTGAGE, OR OTHER SECURITY INTEREST EVIDENCING THE LEASEHOLD
ENCUMBRANCE.


 


NOTICE TO AND SERVICE ON LENDER


 


SECTION 1.02. LANDLORD
SHALL MAIL TO ANY LENDER WHO HAS GIVEN LANDLORD WRITTEN NOTICE OF ITS NAME AND
ADDRESS, A DUPLICATE COPY OF ANY AND ALL NOTICES LANDLORD MAY FROM TIME TO
TIME GIVE TO OR SERVE ON TENANT IN ACCORDANCE WITH OR RELATING TO THIS LEASE,
INCLUDING BUT NOT LIMITED TO ANY NOTICE OF DEFAULT, NOTICE OF TERMINATION, OR
NOTICE REGARDING ANY MATTER ON WHICH LANDLORD MAY PREDICATE OR CLAIM A
DEFAULT.  ANY NOTICES OR OTHER
COMMUNICATIONS PERMITTED BY THIS OR ANY OTHER SECTION OF THIS LEASE OR BY
LAW TO BE SERVED ON OR GIVEN TO LENDER BY LANDLORD SHALL BE DEEMED DULY SERVED
ON OR GIVEN TO LENDER WHEN DEPOSITED IN THE UNITED STATES MAIL, FIRST-CLASS POSTAGE
PREPAID, ADDRESSED TO LENDER AT THE LAST MAILING ADDRESS FOR LENDER FURNISHED
IN WRITING BY LENDER TO LANDLORD.


 


NO MODIFICATION WITHOUT LENDER’S CONSENT


 


SECTION 1.03. FOR AS
LONG AS THERE IS ANY LEASEHOLD ENCUMBRANCE IN EFFECT, TENANT AND LANDLORD
HEREBY EXPRESSLY STIPULATE AND AGREE THAT THEY WILL NOT MODIFY THIS LEASE IN
ANY WAY BY MUTUAL AGREEMENT NOR CANCEL THIS LEASE BY MUTUAL AGREEMENT WITHOUT
THE WRITTEN CONSENT OF LENDER HAVING THAT LEASEHOLD ENCUMBRANCE, WHICH CONSENT
SHALL NOT BE UNREASONABLY WITHHELD.


 


RIGHT OF LENDER TO REALIZE ON SECURITY


 


SECTION 1.04. A LENDER
WITH A LEASEHOLD ENCUMBRANCE SHALL HAVE THE RIGHT AT ANY TIME DURING THE TERM
OF THIS LEASE AND THE EXISTENCE OF THE ENCUMBRANCE TO DO BOTH OF THE FOLLOWING:


 


(A.) ANY ACT OR THING REQUIRED OF TENANT UNDER THIS
LEASE, AND ANY SUCH ACT OR THING DONE AND PERFORMED BY LENDER SHALL BE AS
EFFECTIVE TO PREVENT A FORFEITURE OF TENANT’S RIGHTS UNDER THIS LEASE AS IF
DONE BY TENANT; AND


 


(B.) REALIZE ON THE SECURITY AFFORDED BY THE LEASEHOLD
ESTATE BY FORECLOSURE PROCEEDINGS, ACCEPTING AN ASSIGNMENT IN LIEU OF
FORECLOSURE, OR OTHER REMEDY AFFORDED IN LAW OR IN EQUITY OR BY THE SECURITY
INSTRUMENT EVIDENCING THE LEASEHOLD ENCUMBRANCE (REFERRED TO IN THIS LEASE AS “THE
SECURITY INSTRUMENT”), AND


 


(1.) TO TRANSFER, CONVEY, OR ASSIGN THE TITLE OF
TENANT TO THE LEASEHOLD ESTATE CREATED BY THIS LEASE TO ANY PURCHASER AT ANY FORECLOSURE
SALE, WHETHER THE FORECLOSURE SALE IS CONDUCTED UNDER COURT ORDER OR A POWER OF
SALE CONTAINED IN THE SECURITY INSTRUMENT, OR TO AN ASSIGNEE UNDER AN
ASSIGNMENT IN LIEU OF FORECLOSURE; AND


 


23





















 


(2.) TO ACQUIRE AND SUCCEED TO THE INTEREST OF TENANT
UNDER THIS LEASE BY VIRTUE OF ANY FORECLOSURE SALE, WHETHER THE FORECLOSURE
SALE IS CONDUCTED UNDER A COURT ORDER OR A POWER OF SALE CONTAINED IN THE
SECURITY INSTRUMENT, OR BY VIRTUE OF AN ASSIGNMENT IN LIEU OF FORECLOSURE.


 


THE LENDER OR ANY PERSON OR
ENTITY ACQUIRING THE LEASEHOLD ESTATE SHALL BE LIABLE TO PERFORM TENANT’S
OBLIGATIONS AND DUTIES, WHETHER DELINQUENT OR OTHERWISE, UNDER THIS LEASE ONLY
DURING THE PERIOD, IF ANY, IN WHICH THAT ENTITY OR PERSON HAS OWNERSHIP OF THE
LEASEHOLD ESTATE OR POSSESSION OF THE PREMISES.


 


RIGHT OF LENDER TO CURE DEFAULTS


 


SECTION 1.05. FOR AS
LONG AS THERE IS IN EFFECT ANY LEASEHOLD ENCUMBRANCE, BEFORE LANDLORD MAY TERMINATE
THIS LEASE BECAUSE OF ANY DEFAULT UNDER OR BREACH OF THIS LEASE BY TENANT,
LANDLORD MUST GIVE A COPY OF ANY NOTICE OF THE DEFAULT OR BREACH TO LENDER AND
AFFORD LENDER THE OPPORTUNITY AFTER SERVICE OF THE NOTICE TO DO ONE OF THE
FOLLOWING:


 


(A.) CURE THE BREACH OR DEFAULT WITHIN THE SAME NUMBER
OF DAYS AFTER EXPIRATION OF THE TIME PERIOD GRANTED TO TENANT UNDER THIS LEASE
FOR CURING A DEFAULT, WHEN THE DEFAULT CAN BE CURED BY THE PAYMENT OF MONEY TO
LANDLORD OR SOME OTHER PERSON;


 


(B.) CURE THE BREACH OR DEFAULT WITHIN THE SAME NUMBER
OF DAYS AFTER EXPIRATION OF THE TIME PERIOD GRANTED TO TENANT UNDER THIS LEASE
FOR CURING A DEFAULT, WHEN THE BREACH OR DEFAULT MUST BE CURED BY SOMETHING
OTHER THAN THE PAYMENT OF MONEY AND CAN BE CURED WITHIN THAT TIME; OR


 


(C.) CURE THE BREACH OR DEFAULT ON ANY REASONABLE TIME
THAT MAY BE REQUIRED WHEN SOMETHING OTHER THAN MONEY IS REQUIRED TO CURE
THE BREACH OR DEFAULT AND CANNOT BE PERFORMED WITHIN THE TIME SPECIFIED IN
SUBPARAGRAPH (B), PROVIDED THAT ACTS TO CURE THE BREACH OR DEFAULT ARE
COMMENCED WITHIN THAT TIME PERIOD AFTER SERVICE OF NOTICE OF DEFAULT ON LENDER
BY LANDLORD AND ARE THEREAFTER DILIGENTLY CONTINUED BY LENDER.


 


ASSIGNMENT WITHOUT CONSENT ON FORECLOSURE


 


SECTION 1.06. A
TRANSFER OF TENANT’S LEASEHOLD INTEREST UNDER THIS LEASE TO ANY OF THE FOLLOWING
SHALL NOT REQUIRE THE PRIOR CONSENT OF LANDLORD SUBJECT TO (D) BELOW.


 


(A.) A PURCHASER AT A FORECLOSURE SALE OF THE
LEASEHOLD ENCUMBRANCE, WHETHER THE FORECLOSURE SALE IS CONDUCTED UNDER COURT
ORDER OR A POWER OF SALE IN THE INSTRUMENT CREATING THE ENCUMBRANCE, PROVIDED
LENDER UNDER THE LEASEHOLD ENCUMBRANCE GIVES LANDLORD WRITTEN NOTICE OF THE
TRANSFER, INCLUDING THE NAME AND ADDRESS OF THE PURCHASER AND THE EFFECTIVE
DATE OF THE TRANSFER;


 


(B.) AN ASSIGNEE OF THE LEASEHOLD ESTATE OF TENANT
UNDER AN ASSIGNMENT IN LIEU OF FORECLOSURE, PROVIDED LENDER UNDER THE LEASEHOLD
ENCUMBRANCE GIVES LANDLORD WRITTEN NOTICE OF THE TRANSFER, INCLUDING THE NAME
AND ADDRESS OF THE ASSIGNEE AND THE EFFECTIVE DATE OF THE ASSIGNMENT; OR


 


(C.) A PURCHASER OR ASSIGNEE OF THE PURCHASER AT A
FORECLOSURE SALE OF THE LEASEHOLD ENCUMBRANCE OR OF THE ASSIGNEE OF THE
LEASEHOLD ESTATE OF TENANT ACQUIRED UNDER AN ASSIGNMENT IN LIEU OF FORECLOSURE,
PROVIDED THE PURCHASER OR ASSIGNEE DELIVERS TO LANDLORD ITS WRITTEN AGREEMENT
TO BE BOUND BY ALL OF THE PROVISIONS OF THIS LEASE.


 


(D.) FOR ANY TRANSFER PURSUANT TO SUBPARAGRAPHS (A),
(B), OR (C) OF THIS SECTION, PRIOR CONSENT OF THE LANDLORD IS NOT REQUIRED
PROVIDED THE NET FINANCIAL WORTH OF THE PURCHASER OR ASSIGNEE, AS THE CASE MAY BE,
DETERMINED IN ACCORDANCE WITH GAAP, IS AT LEAST 75% OF THE IMMEDIATELY PREVIOUS
HOLDER OF THE TENANTS LEASEHOLD INTEREST. 
COMPLETE AND CURRENT FINANCIAL STATEMENTS SHALL BE PROVIDED THE LANDLORD
TO MAKE THIS NET WORTH DETERMINATION BEFORE ANY TRANSFER IN EFFECTUATED.


 


24





















 


NEW LEASE TO LENDER


 


SECTION 1.07.
NOTWITHSTANDING ANY OTHER PROVISION OF THIS LEASE, SHOULD THIS LEASE TERMINATE
BECAUSE OF ANY DEFAULT UNDER OR BREACH OF THIS LEASE BY TENANT, LANDLORD AGREES
TO ENTER INTO A NEW LEASE FOR THE PREMISES WITH LENDER UNDER A LEASEHOLD
ENCUMBRANCE, AS TENANT, PROVIDED ALL OF THE FOLLOWING CONDITIONS ARE SATISFIED:


 


(A.) A WRITTEN REQUEST FOR THE NEW LEASE IS SERVED ON
LANDLORD BY LENDER WITHIN 10 DAYS AFTER SERVICE ON LENDER OF THE NOTICE
DESCRIBED IN SECTION 1.05 OF THIS LEASE;


 


(B.) THE NEW LEASE:


 


(1.) IS FOR A TERM ENDING ON THE SAME DATE THE TERM OF
THIS LEASE WOULD HAVE ENDED HAD THIS LEASE NOT BEEN TERMINATED;


 


(2.) PROVIDES FOR THE PAYMENT OF RENT AT THE SAME RATE
THAT WOULD HAVE BEEN PAYABLE UNDER THIS LEASE DURING THE REMAINING TERM OF THIS
LEASE HAD THIS LEASE NOT BEEN TERMINATED; AND


 


(3.) CONTAINS THE SAME TERMS, COVENANTS, CONDITIONS,
AND PROVISIONS AS ARE CONTAINED IN THIS LEASE (EXCEPT THOSE THAT HAVE ALREADY
BEEN FULFILLED OR ARE NO LONGER APPLICABLE);


 


(C.) LENDER, ON EXECUTION OF THE NEW LEASE BY
LANDLORD, SHALL PAY ANY AND ALL SUMS THAT WOULD AT THE TIME OF THE EXECUTION OF
THE NEW LEASE BE DUE UNDER THIS LEASE BUT FOR ITS TERMINATION AND SHALL OTHERWISE
FULLY REMEDY, OR AGREE IN WRITING TO REMEDY, ANY OTHER DEFAULTS UNDER OR
BREACHES OF THIS LEASE COMMITTED BY TENANT THAT CAN BE REMEDIED;


 


(D.) LENDER, ON EXECUTION OF THE NEW LEASE, SHALL PAY
ALL REASONABLE COSTS AND EXPENSES, INCLUDING ATTORNEYS’ FEES AND COURT COSTS,
INCURRED IN TERMINATING THIS LEASE, RECOVERING POSSESSION OF THE PREMISES FROM
TENANT OR THE REPRESENTATIVE OF TENANT, AND PREPARING THE NEW LEASE;


 


(E.) THE NEW LEASE SHALL BE SUBJECT TO ALL EXISTING
SUBLEASES BETWEEN TENANT AND SUBTENANTS, PROVIDED THAT FOR ANY SUBLEASE, THE
SUBTENANT AGREES IN WRITING TO ATTORN TO LENDER (OR ITS ASSIGNEE); AND


 


(F.) THE NEW LEASE SHALL BE ASSIGNABLE BY LENDER WITH
THE PRIOR WRITTEN CONSENT OF LANDLORD.


 


NO MERGER OF LEASEHOLD AND FEE ESTATES


 


SECTION 1.08. FOR AS
LONG AS ANY LEASEHOLD ENCUMBRANCE IS IN EXISTENCE, THERE SHALL BE NO MERGER OF
THE LEASEHOLD ESTATE CREATED BY THIS LEASE AND THE FEE ESTATE OF LANDLORD IN
THE PREMISES MERELY BECAUSE BOTH ESTATES HAVE BEEN ACQUIRED OR BECOME VESTED IN
THE SAME PERSON OR ENTITY, UNLESS LENDER OTHERWISE CONSENTS IN WRITING.


 


LENDER AS ASSIGNEE OF LEASE


 


SECTION 1.09. NO LENDER
UNDER ANY LEASEHOLD ENCUMBRANCE SHALL BE LIABLE TO LANDLORD AS AN ASSIGNEE OF
THIS LEASE UNLESS AND UNTIL LENDER ACQUIRES ALL RIGHTS OF TENANT UNDER THIS
LEASE THROUGH FORECLOSURE, AN ASSIGNMENT IN LIEU OF FORECLOSURE, OR AS A RESULT
OF SOME OTHER ACTION OR REMEDY PROVIDED BY LAW OR BY THIS INSTRUMENT CREATING
THE LEASEHOLD ENCUMBRANCE.


 


LENDER AS INCLUDING SUBSEQUENT SECURITY HOLDERS


 


SECTION 1.10. EXCEPT
FOR PURPOSES OF SECTION 1.07, THE TERM “LENDER” AS USED IN THIS LEASE
SHALL MEAN NOT ONLY THE INSTITUTIONAL LENDER THAT LOANED MONEY TO TENANT AND IS
NAMED AS BENEFICIARY, MORTGAGEE, SECURED PARTY, OR SECURITY HOLDER IN THE
SECURITY INSTRUMENT CREATING ANY LEASEHOLD ENCUMBRANCE, BUT ALSO ALL SUBSEQUENT
PURCHASERS OR ASSIGNEES OF THE LENDERS LEASEHOLD ENCUMBRANCE.


 


25





















 


TWO OR MORE LENDERS


 


SECTION 1.11. IN THE
EVENT TWO OR MORE LENDERS EACH EXERCISE THEIR RIGHTS UNDER THIS LEASE AND THERE
IS A CONFLICT THAT RENDERS IT IMPOSSIBLE TO COMPLY WITH ALL REQUESTS OF
LENDERS, THE LENDER WHOSE LEASEHOLD ENCUMBRANCE WOULD HAVE SENIOR PRIORITY IN
THE EVENT OF A FORECLOSURE SHALL PREVAIL.


 


26





















 


LANDLORD WAIVER AND ESTOPPLE CERTIFICATE


 


First Union National Bank

as Administrative Agent

One First Union Center, TW-10

301 South College Street

Charlotte, NC 28288-0608


 


Ladies and Gentlemen:


 


This letter acknowledges that the undersigned (the “Landlord”)
have been informed that Advanced Telecom Group, Inc. (the “Tenant”), has
entered into an Amended Restated Credit Agreement dated as of July 30,
1999 (as amended, modified, restated or replaced from time to time, the “Credit
Agreement”) among Advanced Telecom Group, Inc.  and certain of its Subsidiaries
(collectively, the “Borrowers”), First Union National Bank, as administrative
agent (the “Administrative Agent”), J.P. Morgan Bank & Trust, as
documentation agent, General Electric Capital Corporation, as syndication
agent, New court Commercial Finance Corporation, as collateral agent and the
lenders party thereto (the “Lenders”).  As
a precedent condition to the Lenders’ obligation to provide loans and other
financial accommodations to the Tenant under the Credit Agreement (the “Loans”),
the Lenders require, among other things, liens on the Tenant’s personal
property, including, without limitation, equipment, trade fixtures and fixtures
(the “Personal Property”).


 


To induce the Lenders to continue to make the Loans
and provide financial accommodations to the Tenant, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Landlord hereby represents and warrants to the Administrative
agent that as of the date hereof:


 


1.             The Landlord is the current
landlord under the lease described in Attachment 1 attached hereto (the “Lease”)
with Tenant;


 


2.             The Lease is in full force and
effect and there have been no amendments, modifications or other agreements
relating to the Lease except as stated herein;


 


3.             The Lease is not in default, nor
is there in existence any facts which with notice or passage of time or both
would constitute a default or a breach of the terms or conditions of the Lease;
and


 


4.             The Tenant is the Tenant under
the Lease, is in lawful and actual possession of the real property described in
the Lease (the “Premises”) and, to the best of the Landlord’s present and
actual knowledge, is in full compliance with the covenants, agreements and
obligations under the Lease.


 


Subject to the specific provisions of Section 12,
“Alterations” of the parties’ Lease, the Landlord agrees that:  (a) the Tenant (or its representatives)
is the owner of the Personal Property located at or on the Premises, whether
attached to the Premises or not; (b) the Administrative Agent’s lien upon
or security interest in the Personal Property is prior and superior to any
interest, lien or claim of any nature the Landlord may now have or hereafter
obtain in the Personal Property whether by operation of law, contract or
otherwise; (c) either the Tenant or the Administrative Agent may remove
the Personal Property from the Premises at any time without hindrance on the
part of the Landlord, and, upon request, the Landlord will grant the
Administrative Agent (or its representatives) access to the Premises so that
the Administrative Agent (or its representatives) may remove the Personal
Property, provided that the Administrative


 





















 


Agent, on behalf of the
Lenders, indemnifies and holds Landlord harmless from any losses, liability,
costs or damages caused by the Administrative Agent in connection with the
removal of the Personal Property by the Administrative Agent; and (d) the
Personal Property shall remain personal property (to the extent such Personal
Property is not already a fixture as of the date hereof) and shall not become
fixtures, notwithstanding the manner or mode of the attachment of the Personal
Property to the land.  The Landlord
hereby subordinates to Lenders’ lien or security interest any rights it may now
or hereafter have in the Personal Property, including without limitation, any
lien rights available under applicable law.


 


The Landlord understands that the Administrative
Agent and the Lenders will rely on this Landlord Waiver and Estoppel
Certificate in continuing to make Loans and provide financial accommodations to
the Tenant.  Administrative Agent and
Lenders acknowledge and understand that Landlord’s representations above are as
of the date below only.


 


In the event of a default under the Lease, the
Landlord has agreed to the provisions of Section 1.05 “Right of Lender to
Cure Defaults” under Ex. E Encumbrance of Leasehold Estate to the parties’
Lease.


 


Executed and delivered this        day
of                           ,
2000.


 


[spaces for signature lines]


 





















 


	
  

  	
  CBA Form RR

  Rev’d 3/95

   

  	
  ©
  Copyright 1995

  Commercial
  Brokers Association

  ALL
  RIGHTS RESERVED

  
	
  RENT RIDER

  CBA
  Text Disclaimer:  Text deleted by
  licensee indicated by strike.

  New text inserted by licensee indicated by small capital letters.

  



 


 


Landlord and Tenant
should complete only those provisions below which apply.  Any provision below which is not completed
shall not apply to the Lease.


 


1.               BASE MONTHLY RENT SCHEDULE. 
Tenant shall pay Landlord base monthly rent during the Lease Term
according to the following schedule:


 


	
  Lease Year (Stated in Months)

  	
   

  	
  Base Monthly Rent Amount

  	
   

  
	
  0-1

  	
   

  	
  $

  	
  0

  	
   

  
	
  2-12

  	
   

  	
  $

  	
  6,333.33

  	
   

  
	
  13-24

  	
   

  	
  $

  	
  6,520.00

  	
   

  
	
  25-36

  	
   

  	
  $

  	
  6,720.00

  	
   

  
	
  37-48

  	
   

  	
  $

  	
  6,920.00

  	
   

  
	
  49-60

  	
   

  	
  $

  	
  7,120.00

  	
   

  
	
  61-72

  	
   

  	
  $

  	
  7,333.33

  	
   

  
	
  73-84

  	
   

  	
  $

  	
  7,546.66

  	
   

  
	
  85-96

  	
   

  	
  $

  	
  7,773.33

  	
   

  
	
  97-108

  	
   

  	
  $

  	
  8,000.00

  	
   

  
	
  109-120

  	
   

  	
  $

  	
  8,240.00

  	
   

  



 


 


	
  /s/ MSH

  	
   

  	
   

  	
  /s/ RTW

  	
   

  
	
  Landlord’s
  Initials:

  	
   

  	
  Tenant’s
  Initials:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Landlord’s
  Initials:

  	
   

  	
  Tenant’s
  Initials:

  



 


1





















 


	
  

  	
  CBA Form OR

  Rev’d 3/95

   

  	
  © Copyright 1995

  Commercial Brokers Association

  ALL RIGHTS RESERVED

  
	
  OPTION TO EXTEND RIDER

  CBA Text Disclaimer:  Text
  deleted by licensee indicated by strike.

  New text inserted by licensee indicated by small capital letters.

  



 


 


PROVIDED TENANT IS NOT IN
DEFAULT AT THE TIME OF EXERCISE OR UPON THE COMMENCEMENT OF ANY EXTENSION TERM,
TENANT SHALL HAVE (IF NOT COMPLETED, ZERO) ONE (1) OPTION TO EXTEND
THE TERM OF THIS LEASE FOR TEN (10) YEARS EACH.  TENANT SHALL EXERCISE THE OPTION BY
DELIVERING WRITTEN NOTICE TO LANDLORD NOT LESS THAN ONE HUNDRED EIGHTY (180)
DAYS PRIOR TO THE EXPIRATION OF THE THEN CURRENT LEASE TERM.  IF SUCH NOTICE IS NOT SO GIVEN AND TIMELY
RECEIVED, THIS OPTION SHALL AUTOMATICALLY EXPIRE AND BE OF NO FURTHER FORCE OR
EFFECT.  UPON THE EXERCISE OF THE OPTION,
THE TERM OF THIS LEASE SHALL BE EXTENDED FOR THE PERIOD OF THE SUBJECT OPTION
UPON ALL OF THE SAME TERMS, CONDITIONS AND COVENANTS AS SET FORTH HEREIN,
EXCEPT FOR THE AMOUNT OF THE BASE MONTHLY RENTAL STATED IN THE LEASE, WHICH
SHALL BE $8,466.67/MONTH/TRIPLE NET AND INCREASED ANNUALLY BY 3%.


 


	
  /s/ MSH

  	
   

  	
   

  	
  /s/ RTW

  	
   

  
	
  Landlord’s
  Initials:

  	
   

  	
  Tenant’s
  Initials:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Landlord’s
  Initials:

  	
   

  	
  Tenant’s
  Initials:

  
						



 


1





















 


	
  

  	
  CBA Form AR

  Rev’d 3/95

   

  	
  © Copyright
  1995

  Commercial
  Brokers Association

  ALL RIGHTS
  RESERVED

  
	
  ARBITRATION RIDER

  CBA Text Disclaimer:  Text
  deleted by licensee indicated by strike.

  New text inserted by licensee indicated by small capital letters.

  



 


 


Any
controversy or claim arising out of or relating to this Lease, or the breach
thereof, other than an action by Landlord against Tenant for nonpayment of
Rent, or for unlawful detainer or ejectment, shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association, and judgment upon the award rendered by the arbitrator
may be entered in any court having jurisdiction thereof.


 


	
   

  	
   

  	
   

  	
  /s/ RTW

  	
   

  
	
  Landlord’s
  Initials:

  	
   

  	
  Tenant’s
  Initials:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Landlord’s
  Initials:

  	
   

  	
  Tenant’s
  Initials:

  
						



 


1