COMMERCIAL LEASE
(Triple Net)
This lease entered into January 20, 2000 between Fairmont Commerce Center, LLC,
("Lessor") and Xxxxx, Incorporated, a Delaware Corporation ("Lessee").
WITNESSETH:
1. PREMISES.
In consideration of the rents and covenants herein set forth, Lessor hereby
leases to Lessee and Lessee hereby rents from Lessor the premises shown outlined
on Exhibit "A" attached hereto (hereinafter referred to as the "Premises"). The
Premises is located at 1919 West Fairmont Suites 1 through 6, in Tempe, Arizona
as part of Fairmont Commerce Center, 0000 Xxxx Xxxxxxxx, Xxxxx XX 00000
hereinafter referred to as the "Project". The Premises is comprised of
approximately 29,181 square feet of rentable area. The lease of the Premises
shall be for the term, upon the rentals and subject to the terms and conditions
set forth in this Lease Agreement and Exhibits hereto.
2. TERM.
With respect to Suites 1, 2, 3 and 4, the term of this Lease shall be for 36
months, commencing on June 1, 2000, and terminating on May 31, 2003. With
respect to Suite 5, the term of this Lease shall commence on March 1, 2000 and
terminate on May 31, 2003. With respect to Suite 6, the term of this Lease shall
commence as soon as the new demising wall between Suite 6 and the adjacent Suite
7 is completed and a Certificate of Occupancy is obtained for Suite 6 from the
City of Tempe, whichever is the last to occur and terminate on May 31, 2003.
3. RENT.
3.1 Lessee shall pay to Lessor as rent for the Premises monthly payments, in
advance, on the first day of each month during the term of this Lease Agreement
as follows:
RENTS PRIOR TO JUNE 1, 2000
From March 1, 2000 to May 31, 2000 the rent for Suite 5 shall be 00.00 per
month.
From date of delivery of Suite 6 to May 31, 2000, the rent for Suite 6
shall be 00.00 per month.
RENTS FROM AND AFTER JUNE 1, 2000
From June 1, 2000 to May 31, 2001 the rent shall be $15,000.00 per month
From June 1, 2001 to May 31, 2002 the rent shall be $16,000.00 per month
From June 1, 2002 to May 31, 2003 the rent shall be $17,000.00 per month
In addition, Lessee shall pay any privilege, excise, sales, gross receipts, rent
or other tax levied or assessed by any governmental authority against Lessor in
respect to the rent or other charges due under this lease or as a result of
Lessor's receipt of such rents or other charges.
3.2 Rent for any period during the term hereof which is for less than one month
shall be a pro rata portion of the monthly installment. Rent shall be payable in
lawful money of the United States to Lessor at the address referred to in
paragraph 30 hereof or to such other persons or at such other places as Lessor
may designate in writing. Rent shall be payable without notice, demand,
deduction or any offset whatever.
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3.3 In the event Lessee fails to make any installment payment of rent within
five (5) days of the date due, without written demand or notice for payment,
then Lessee shall, the next day, pay to Lessor a late charge equal to five
percent (5%) of the amount due. In addition, such delinquent amount and the late
charge shall bear interest from the due date of the rent as provided herein at
the rate of twenty percent (20%), per annum, until paid.
4. SECURITY DEPOSIT.
4.1 Lessor acknowledges that Lessee has already paid a $6,780.00 security
deposit under Lessee's current Lease. Lessee hereby agrees to pay an additional
$10,220.00 to bring the total security deposit to $17,000.00. Lessee shall pay
to Lessor upon execution hereof the sum of $10,220.00 as additional security for
the faithful performance and observance by Lessee of the terms of this Lease
Agreement. It is agreed that in the event Lessee defaults in respect of any of
the terms of this Lease Agreement, including, but not limited to, the payment of
rent and additional rent, Lessor may, in addition to any other rights and
remedies it may have, use, apply or retain the whole or any part of the security
so deposited to the extent required for the payment of any rent and additional
rent or any other sum as to which Lessor may expend or be required to expend by
reason of Lessee's default in respect of any of the terms of this Lease
Agreement. If Lessor applies any part of said deposit to cure any default of
Lessee, Lessee shall upon demand deposit with Lessor the amount so applied so
that Lessor shall have the full deposit on hand at all times during the terms of
this Lease Agreement.
4.2 In the event that Lessee shall fully and faithfully comply with all of the
terms and conditions of this Lease Agreement, the security shall be returned to
Lessee without interest after the date fixed as of the end of the term of this
Lease Agreement and after delivery of the entire possession of the Premises to
Lessor. In the event of a sale or lease of the Project, Lessor shall have the
right to transfer the security to the vendee or lessee and Lessor shall
thereupon be released by Lessee from all liability for the return of such
security, and Lessee agrees to look solely to the new landlord for the return of
said security, and it is agreed that all of the provisions hereof shall apply to
every transfer or assignment made of the security to a new landlord.
5. USES AND SUITABILITY.
5.1 Use. The Premises shall be used and occupied by Lessee for only the
following purposes and for no other purposes whatsoever, without obtaining the
prior written consent of Lessor which consent shall not be unreasonably
withheld: General office and assembly, manufacture, storage and use of
electronic and semiconductor equipment and related activities.
5.2 Suitability. The acceptance of possession of the Premises by Lessee shall be
deemed to conclusively establish that Lessee has accepted the Premises as
complete for all purposes. In any event this Lease Agreement shall be subject to
all applicable zoning ordinances and to any municipal, county and state laws and
regulations governing and regulating the use of the Premises. Lessee
acknowledges that neither Lessor nor Lessor's agent has made any representation
or warranty as to the suitability or condition of the Premises for the conduct
of Lessee's business.
5.3 Uses Prohibited.
5.3.1 Lessee shall not do or permit anything to be done in or about the
Premises which will increase the existing rate of insurance upon the building in
which the Premises are contained (unless Lessee shall pay any increased premium
as a result of such use or acts) or cause the cancellation of any insurance
policy covering said Premises or any building, nor shall Lessee sell or permit
to be kept, used or sold in or about said Premises any articles which may be
prohibited by a standard form of policy of fire insurance.
5.3.2 Lessee shall not do or permit anything to be done in or about the
Premises which will in any way obstruct or interfere with the rights of other
Lessees or occupants of the Project or injure or annoy them or use or allow the
Premises to be used for any unlawful or objectionable purposes, nor shall Lessee
cause, maintain or permit any nuisance in, on or about the Premises. Lessee
shall not commit or suffer to be committed any waste in or upon the Premises.
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5.3.3 Lessee shall not use the Premises or permit anything to be done in or
about the Premises which will in any way conflict with any law, statute, zoning
restriction, ordinance or governmental rule or regulation or requirements of
duly constituted public authorities now in force or which may hereafter be
enacted or promulgated. Without the prior written consent of Lessor, which
consent must not be unreasonably withheld, Lessee shall not (either with or
without negligence) cause or permit the escape, generation, manufacture,
storage, disposal or release of any hazardous substances or materials in, on or
about the Premises or Project. With respect to any such hazardous substances or
materials which have been approved by Lessor in writing, Lessee shall not allow
the storage or use of such substances or materials in any manner not sanctioned
by law and by the highest standards prevailing in the industry for the storage
and use of such substances or materials, nor allow to be brought into the
Project any such materials or substances except to use in the ordinary course of
Lessee's business, and then only in quantities approved by Lessor in writing.
Without limitation, hazardous substances and materials shall include those
described in the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et seq., the Resource
Conservation and Recovery Act, as amended, 42 U.S. C. Section 6901 et seq., any
applicable state or local laws and the regulations adopted under these acts. In
all events, Lessee shall indemnify Lessor in the manner elsewhere provided in
this Lease Agreement from any release of hazardous materials on the Premises
occurring while Lessee is in possession, if caused by Lessee or persons acting
under Lessee. The within covenants shall survive the expiration or earlier
termination of the term of this Lease Agreement.
6. REAL PROPERTY TAXES AND COMMON AREA EXPENSES.
6.1 For purposes of this Lease, the following terms shall be defined as follows:
(a) The term "Common Areas" shall be defined to mean those areas to be used
in common with others entitled thereto, except the Premises and all similar
areas leased to others or reserved to Lessor's exclusive use. The Common Areas
include, without limitation, parking areas, service roads and areas, loading and
dock facilities, sidewalks, courtyards, gardens, and such other common
additional areas and facilities as may be REASONABLY designated as a part of the
Common Areas from time to time by Lessor.
(b) The term "Common Area Expenses" shall be defined to mean the total cost
and expense incurred by Lessor or Lessor's agents in operating and maintaining
the Common Areas actually used or available for use by Lessee and Lessee's
employees, agents, servants, customers and other invitees, excluding only items
of expense commonly known and designated as carrying charges, but specifically
including, without limitation, all sums expended by Lessor for gardening,
repairing, repaving, painting, restriping, cleaning, sweeping, planting and
landscaping, janitorial services, pest control, traffic control, security guards
or systems, repairs, preventive and routine maintenance, line painting, lighting
and other utilities, directional signs and other markers and bumpers, sanitary
control, including, without limitation, all costs of maintaining and operating
any air conditioning and heating, sewer, septic, or waste disposal
installations, removal of garbage, trash and other refuse, depreciation on
machinery and equipment used in such maintenance, cost of all utilities and
services consumed or performed on the Common Areas, required fees or charges
levied pursuant to any governmental authority, and a management fee (which may
be payable to Lessor or its affiliates), not to exceed current market rates.
Lessor shall also have the right to include the cost of public liability and
property damage insurance on the Common Areas as part of the Common Area
Expenses or to separate such cost and xxxx Lessee separately for its pro rata
share thereof.
(c) The term "Real Property Taxes" shall be defined to mean all taxes and
assessments imposed upon the real property and permanent improvements thereto
comprising the Project, or applicable to the Premises and Common Areas or any
portion thereof, but shall not include personal income taxes, personal property
taxes, inheritance taxes or franchise taxes levied upon the Lessor, but not
directly against said real property, even though such taxes may or shall become
alien against said real property. Any such Real Property Taxes for the year in
which this Lease commences or ends shall be apportioned and adjusted
accordingly. With respect to any assessment which may be levied against or upon
the Project or the Premises and which, under the laws then in force, may be
evidenced by improvements or other bonds payable in annual installments, only
the annual payments on such assessments shall be included in computing Lessee's
obligation for Real Property Taxes.
(d) Lessee's pro rata share of Real Property Taxes and Common Area Expenses
shall be determined based upon the ratio of the gross floor area of the Premises
to the gross floor area of the building and/or complex of buildings comprising
the Project. In this regard, the parties agree that Lessee's pro rata share for
Suite 5 is 5.5% and Lessee's pro rata share for Suites 5 and 6 is 12.9%. In this
regard, the parties hereby agree that commencing June 1, 2000, Lessee's pro rata
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share for Suites 1 through 6 shall be thirty-four point one percent (34.1%)
based upon application of the above formula to the facts prevailing at the date
hereof. The "gross floor area" is the area measured in square feet to the center
of all party walls and the exterior face of all other exterior walls. Changes in
any gross floor area occurring during any monthly period shall be effective on
the first day of the next succeeding month, and the amount of any gross floor
area in effect for the whole of any monthly period shall be the average of the
total amounts in effect on the first day of each calendar month.
(e) Notwithstanding the foregoing, any expense incurred by Lessor or
Lessor's agents in maintaining the Common Area that exceeds the sum of
$50,000.00 shall be amortized over the succeeding sixty (60) month period.
Lessee shall pay its pro rata share for such Common Area Expense in sixty (60)
equal consecutive monthly installments commencing the month immediately
following the month in which such expense was incurred, provided, however Lessee
shall not be liable for any such installments which first become payable after
May 31, 2003.
6.2 Throughout the term of this Lease, Lessee shall pay to Lessor, as additional
rent, the following:
(a) All Real Property Taxes applicable to the Premises during the term of
this Lease together with Lessee's pro rata share of Real Property Taxes
applicable to the Common Areas; provided, however, in the event the Real
Property Taxes applicable to the Premises are not separately assessed and
identified by separate tax xxxx or otherwise, the amount due from Lessee
hereunder shall be Lessee's pro rata share of Real Property Taxes applicable to
the Project; and
(b) Lessee's pro rata share of Common Area Expenses. Such additional rent
shall be computed annually, but may be estimated by Lessor and collected from
Lessee on a monthly basis, together with the rent provided in paragraph 3
hereof. Lessor shall provide Lessee with a reconciliation of Lessee's
contributions toward Real Property Taxes and Common Area Expenses on an annual
basis. If such reconciliation shall determine that Lessee's contributions are
insufficient to satisfy Lessee's obligations hereunder, as finally determined
and actually incurred by Lessor for such period, Lessee shall immediately pay to
Lessor any such deficiency. Any contributions by Lessee in excess of such actual
expenses shall be credited to any amounts owed by Lessee under this Lease, or
refunded to Lessee, at Lessor's election.
7. PERSONAL PROPERTY TAXES.
Lessee shall pay prior to delinquency all taxes assessed or levied upon Lessee's
occupancy of the Premises or upon Lessee's trade fixtures, furniture, equipment
and all other personal property of Lessee contained in the Premises or
elsewhere. When possible, Lessee shall cause said trade fixtures, furnishings,
equipment and all other personal property to be assessed and billed separately
from the real property of Lessor.
8. UTILITIES.
All utilities shall be separately metered for the Premises, and Lessee shall pay
when billed and before delinquent all charges for gas (if available),
electricity, air conditioning, heating, telephone, janitorial services and other
utilities or services furnished to the Premises or to Lessee during the term of
this Lease Agreement. Lessee shall keep the Premises free of any liens created
by Lessee's failure to make such payments. If any utility is not separately
metered, Lessee agrees to promptly pay when billed, as additional rent, a
reasonable portion to be determined by Lessor of all charges jointly metered.
9. DAMAGE OR DESTRUCTION.
9.1 Except as otherwise provided in this Lease Agreement, in the event that the
Premises or the Project is damaged by fire or other casualty fully covered by
Lessor's insurance, such damage shall be repaired by and at the expense of
Lessor. Until such repairs are completed, and except to the extent such damage
is caused by Lessee or its agent or employees, the rent payable hereunder shall
be abated in proportion to the portion of the Premises which is rendered
unusable by Lessee in the conduct of its business. In no event shall Lessor be
obligated to spend more than the net insurance proceeds received by Lessor on
account of any casualty in order to repair or restore the Premises.
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9.2 In the event such repairs cannot, in the reasonable opinion of Lessor, be
substantially completed within sixty (60) days after the occurrence of such
damage (without the payment of overtime or other premiums), Lessor may, at its
option, exercisable by giving reasonable notice to Lessee, make such repairs
with due diligence. In such event, this Lease Agreement shall continue in full
force and effect and the rent payable by Lessee hereunder shall be reduced as
above set forth until such repairs are completed.
9.3 In the event Lessor determines in its reasonable opinion that such repairs
cannot be substantially completed within such sixty (60) day period and does not
elect to make such repairs during a reasonable time in excess of such 60-day
period, then either Lessor or Lessee may, by written notice given to the other
within ten (10) additional days, terminate this Lease Agreement effective as of
the date of the occurrence of such damage.
9.4 With respect to any damage which Lessor is obligated to repair or elects to
repair, Lessee waives the provisions of Arizona Revised Statutes, Section 33-343
(which section deals with Lessee's rights to termination in the event of damage
or destruction of the Premises).
9.5 Lessor shall not under any circumstances be required to make any repairs to
or replacements of any paneling, decoration, office fixtures, railing, ceiling
or floor covering, partitions or any other property installed in the Premises by
Lessee.
9.6 Notwithstanding anything to the contrary above, in the event of damage to or
destruction of all or any portion of the Premises or the Project to the extent
of five percent (5%) or more of the then insurable replacement value of the
Project, Lessor shall have the right to terminate this Lease Agreement by
written notice to Lessee, given within thirty (30) days after the date of such
damage, destruction or declaration. Upon the giving of any such notice, this
Lease Agreement shall terminate.
9.7 In the event that the damage or cost of repair is less than five percent
(5%) of the replacement value, or in the event Lessor does not elect to
terminate this Lease Agreement, the Lease Agreement shall remain in full force
and effect and the Premises shall be repaired and rebuilt in accordance with the
other provisions of this Lease Agreement.
10. LIABILITY INSURANCE.
10.1 During the term of this Lease Agreement, Lessee shall at Lessee's expense,
maintain general public liability insurance against claims for injury, wrongful
death or property damage occurring upon, in or about the Premises with companies
and in form acceptable to Lessor, with minimum limits of One Million Dollars
($1,000,000.00) on account of bodily injuries to or death of one person, Three
Million Dollars ($3,000,000) on account of bodily injuries to or death of more
than one person as the result of any one accident or disaster, and property
damage insurance with minimum limits of One Hundred Thousand Dollars
($100,000.00). Lessee shall add the name of Lessor to the policies and agrees to
insure the interest of Lessor so long as this Lease Agreement is in effect.
Lessee shall file proof of insurance with Lessor prior to Lessee's possession of
the Premises. Lessee hereby releases and waives any and all rights of
subrogation against Lessor, and Lessee shall ensure that such policy or policies
of insurance shall contain a waiver of subrogation clause as to Lessor.
10.2 During the entire term of this Lease, Lessor shall, at the expense of
Lessee as set forth below, procure and maintain the following policies of
insurance:
(a) Commercial general liability insurance for personal injury, death and
property damage occurring on the Common Areas, the limits of liability thereof
to be in such amounts as Lessor may reasonably require under the circumstances
existing from time to time; and
(b) "Special Form" property coverage insurance against loss due to fire,
vandalism, malicious mischief, sprinkler leakage and special extended perils in
an amount adequate to cover the full cost of replacement of the Premises. Said
insurance shall provide for payment of loss thereunder to Lessor or to the
holders of mortgages or deeds of trust on the Premises. Lessee shall pay to
Lessor, as additional rent, the cost of the insurance to be carried by Lessor
pursuant hereto; provided, however, if the cost applicable to the Premises
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cannot otherwise be separately identified, the amount(s) payable by Lessee
hereunder shall be determined based upon the ratio of the gross floor area of
the Premises to the gross floor area of the building and/or complex of buildings
comprising the Project, in a manner consistent with paragraph 6.1(d) hereof.
Lessee agrees to pay to Lessor such amount(s) within ten (10) days after written
demand is sent by Lessor to Lessee accompanied by the insurance premium
notice(s) and evidence of the amount due. Notwithstanding the foregoing, Lessor
shall have the option to include the cost of the insurance on the Common Areas
set forth in subparagraph (a) hereof as part of the Common Area Expenses
pursuant to paragraph 6 hereof, instead of billing Lessee separately for such
cost.
11. LIABILITY AND INDEMNIFICATION.
11.1 Lessee shall indemnify and hold Lessor harmless from and against all
liabilities, obligations, losses, damages, penalties, claims, actions, suits,
costs, charges and expenses, including reasonable attorneys' fees, which may be
imposed upon or incurred by or asserted against Lessor arising from any breach
or default by Lessee, from any use, non-use or condition of the Premises created
by or attributable to Lessee or Lessee's employees, customers, agents, invitees,
licensees, guests or lessees, and from any negligence, act or omission
attributable to Lessee or Lessee's employees, customers, agents, invitees,
licensees, guests or lessees. In the event that any action or proceeding shall
be brought against Lessor by reason of any claim referred to in this paragraph
11.1, Lessee, upon written notice from Lessor, shall at Lessee's sole cost and
expense resist or defend the same through counsel selected by Lessor. Lessor
shall not be liable for any damage to or theft of any personal property, goods,
commodities or materials in or about the Premises. Lessee agrees that Lessor and
Lessor's agents, employees and servants shall not be liable, and Lessee waives
all claims for damage to property and business sustained during the term of this
Lease Agreement by Lessee occurring in or about the Project, resulting directly
or indirectly from any existing or future condition, defect, matter or thing in
the Premises, the Project or any part thereof, or from equipment or
appurtenances becoming out of repair or from accident, or from any occurrence,
act or omission of Lessor, Lessor's agents, employees or servants, any tenant or
occupant of the Project or any other person.
11.2 The term "Lessor" as used in this Lease Agreement so far as covenants or
obligations on the part of Lessor are concerned shall be limited to mean and
include only the owner or owners of the Project at the time in question, and in
event of any transfer or conveyance the then grantor shall be automatically
freed and released from all personal liability accruing from and after the date
of such transfer or conveyance as respects the performance of any covenant or
obligation on the part of Lessor contained in this Lease Agreement to be
performed, it being intended hereby that the covenants and obligations contained
in this Lease Agreement on the part of Lessor shall be binding on the then
Lessor only during and in respect to its period of ownership. In the event of a
sale or conveyance by Lessor of the Project, the same shall operate to release
Lessor from any future liability upon any of the covenants or conditions herein
contained and in such event Lessee agrees to look solely to the responsibility
of the successor in interest of Lessor in and to this Lease Agreement. This
Lease Agreement shall not be affected by any such sale or conveyance, and Lessee
agrees to attorn to the purchaser or grantee, which purchaser or grantee shall
be personally obligated on this Lease Agreement only so long as it is the owner
of Lessor's interest in and to this Lease Agreement. Furthermore, Lessee agrees
to look solely to Lessor's interest in the Project for the recovery of any
judgment from Lessor, it being agreed that Lessor and each of its general
partners shall never be personally liable for any such judgment.
12. EMINENT DOMAIN.
If the Premises shall be taken, or if a substantial portion thereof shall be
taken, which shall prevent Lessee from conducting its business under this Lease
Agreement, by proper authority for public or quasi-public use, Lessee may
terminate this Lease Agreement by giving Lessor written notice of such
termination within two (2) months after such taking and the rent shall xxxxx
during the unexpired portion of this Lease Agreement, effective from the date
when possession of the part so taken shall be required for the use and purpose
for which it has been taken. If only a part of the Premises is so taken and the
part not so taken shall be sufficient for the reasonable use of the remainder
for the purpose of Lessee's business under this Lease Agreement, this Lease
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Agreement shall remain in full force and effect, except that the rent shall be
reduced in proportion of Project square footage to which the Premises so taken
bears to the Premises originally leased. All compensation awarded for any such
taking shall belong to and be the property of Lessor.
13. REPAIRS.
13.1 Lessor shall make all necessary repairs to the exterior walls, roof,
structural components, plumbing, electrical wiring and air conditioning system
of the Project of which the Premises are a part except exterior glass, windows
and doors. Lessor also shall maintain and keep in good repair the exterior
lighting, parking areas, docks and sidewalks appurtenant to the Project.
Notwithstanding anything to the contrary, any damage caused or permitted by
Lessee, or by Lessee's employees, agents or invitees, to the Premises or to the
Project shall be repaired by Lessee, or at Lessor's election, Lessor may repair
such damage at the expense of Lessee and Lessee shall promptly reimburse Lessor
for such expense upon Lessor's demand.
13.2 Lessee, at Lessee's expense, shall maintain and keep the Premises in as
good order, condition and repair, including doors, windows and interior glass,
as they were at the time Lessee took possession of the same, reasonable wear and
tear excepted. Lessee shall keep the Premises in a neat and sanitary condition.
All repairs, restorations and replacements shall be in quality and class equal
to the original work.
13.3 Lessee agrees to notify Lessor promptly of any defective condition known to
Lessee which Lessor is required to repair, and the failure to report such
defects shall make Lessee responsible to Lessor for any additional liability,
cost or expense incurred by Lessor by reason of Lessee's failure to notify
Lessor of such defect. Lessor shall be under no duty to inspect the Premises.
14. LIENS.
If the Premises, or any part thereof, or Lessee's leasehold interest
therein, shall at any time during the term of the Lease Agreement become subject
to the lien of any vendor, mechanic, laborer or materialman based upon the
furnishing of materials or labor to Lessee or the Premises and contracted for by
Lessee, Lessee shall cause the same, at Lessee's expense, to be discharged
within fifteen (15) days after notice thereof.
15. NUISANCE.
15.1 Notwithstanding anything in this Lease Agreement to the contrary, including
without limitation the use by Lessee of the Premises in accordance with
paragraph 5 hereunder, Lessee shall not commit or permit any nuisance or other
act, whether noise, odor, smoke, sewerage, chemical waste or otherwise, which
may disturb the quiet enjoyment of any other tenants of Lessor in the Project.
15.2 Lessee shall not obstruct or cause to be obstructed any public or private
roadways, sidewalks or common areas appurtenant to the Project, or any parking
areas or docking areas of other tenants of Lessor in the Project. In the event
Lessee commits or permits any nuisance or act set forth in this paragraph, the
same shall be a material breach of this Lease Agreement.
16. ASSIGNMENT AND SUBLETTING.
16.1 Lessee shall not voluntarily or by operation of law assign, transfer,
mortgage or encumber this Lease Agreement, or any interest therein, and shall
not sublet the Premises or any part thereof or suffer any other person (other
than the employees and agents of Lessee) to occupy or use the Premises or any
portion thereof, without obtaining Lessor's prior written consent.
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16.2 Regardless of Lessor's consent, no subletting or assignment shall release
Lessee from Lessee's obligations or alter the primary liability of Lessee to pay
the rent and to perform all other obligations to be performed by Lessee
hereunder. The acceptance of rent by Lessor from any other person shall not be
deemed a waiver by Lessor of any provision hereof. Consent to one assignment or
subletting shall not be deemed consent to any subsequent assignment or
subletting. In the event of default by any assignee of Lessee or any successor
of Lessee, in the performance of any of the terms hereof, Lessor may proceed
directly against Lessee without the necessity of exhausting remedies against
said assignee. Lessor may consent to subsequent assignments or subletting of
this Lease or amendments or modifications to this Lease with assignees of
Lessee, without notifying Lessee, or any successor of Lessee, and without
obtaining its or their consent thereto and such action shall not relieve Lessee
of liability under this Lease.
16.3 In the event Lessee shall assign or sublet the Premises or request the
consent of Lessor to any assignment or subletting, or if Lessee shall request
the consent of Lessor for any act Lessee proposes to do, the Lessee shall pay
Lessor's reasonable attorneys' fees incurred in connection therewith.
17. SURRENDER OF PREMISES AND HOLDING OVER.
17.1 Except as provided hereinafter, upon the expiration or earlier termination
of this Lease, Lessee shall quit and surrender the Premises, "broom-clean," in
good condition and repair (reasonable wear and tear excepted). If the Premises
are not surrendered at the end of the Lease term, Lessee shall indemnify Lessor
against loss or liability resulting from delay by Lessee in so surrendering the
Premises, including, without limitation, any claims made by any succeeding
tenant based on such delay.
17.2 If Lessee or any successor in interest of Lessee, should remain in
possession of the Premises after the expiration of the Lease term without
executing a new lease, then such holding over shall be construed as a tenancy
from month to month, subject to all the covenants, terms, provisions and
obligations of this Lease except Minimum Monthly Rent, which shall be subject to
an automatic increase of twenty-five percent (25%), over and above the amount
paid in the last full calendar month of the Lease term. Nothing contained herein
shall be construed as Lessor's permission for Lessee to hold over.
18. DEFAULT.
18.1 If Lessee fails to pay any rents when due within ten (10) days of the due
date, or if Lessee commits a breach under paragraph 17 hereof, or if Lessee
defaults in the performance of any other term or covenant of this Lease
Agreement, and any such default is not cured within five (5) days after written
notice thereof from Lessor to Lessee, then, in any such event Lessor may, at
Lessor's option, terminate this Lease Agreement and/or re-enter the Premises and
remove all persons and all or any property therefrom either by summary
dispossess proceedings or by any other suitable action or proceeding at law or
by force or otherwise, without being guilty of trespass or liable to indictment,
prosecution or damage therefor, and repossess and enjoy the Premises, together
with all improvements, additions, alterations, installations and fixtures,
without such re-entry and repossession working a forfeiture or waiver of the
rents to be paid and the covenants to be performed by Lessee during the full
term of this Lease Agreement, and upon such termination or re-entry, Lessee will
quit and surrender the Premises to Lessor, but Lessee shall remain liable as
hereinafter provided. Upon termination of this Lease Agreement or expiration of
Lessee's right to occupy the Premises by reason of the happening of any of the
foregoing events, or in any other manner or circumstances whatsoever, whether
with or without legal proceedings, by reason of or based upon or arising out of
a default or breach of this Lease Agreement on the part of Lessee, or upon the
happening of any default hereunder, Lessor may, at its option, at any time and
from time to time, relet the Premises or any part or parts thereof, for the
account of Lessee or otherwise, and receive and collect the rent therefor,
applying the same first to the payment of such expenses as Lessor may have
incurred in recovering possession of the Premises, including attorneys' fees and
expenses for putting the same into good order and condition or preparing or
altering the same for re-rental to the extent Lessor deems necessary or
desirable and all other expenses, commissions and charges paid, assumed or
incurred by Lessor in or about reletting the Premises and then to the
fulfillment of the covenants of Lessee hereunder. Any such reletting herein
provided for may be for the remainder of the term of this Lease Agreement, as
originally granted, or for a longer or shorter period. Lessor shall have the
right to change the character and use made of the Premises, and Lessor shall not
be required to accept any substitute tenant offered by Lessee or to observe any
instructions given by Lessee up to the later of the time of such termination of
this Lease Agreement or of such recovery of possession of the Premises by
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Lessor, as the case may be, and thereafter, except in a case in which liability
of Lessee as hereinafter provided arises by reason of the happening of the
insolvency of Lessee, Lessee covenants and agrees, if required by Lessor, to pay
to Lessor until the end of the initial term of this Lease Agreement, and/or any
renewal term, as the case may be, the equivalent of the amount of all rent
reserved hereunder, and all other charges required to be paid by Lessee, less
the net proceeds of reletting, if any. Lessor shall have the election in place
of and instead of holding Lessee so liable forthwith to recover against Lessee
as damages for loss of the bargain and not as a penalty, an aggregate sum which
at the time of such termination of this Lease Agreement or of such recovery of
possession of the Premises by Lessor, as the case may be, represents the then
present worth of the excess, if any, of the aggregate of the rent and all other
charges payable by Lessee hereunder that would have accrued for the balance of
the initial term, and/or any renewal term, as the case may be, over the then
present worth of the fair market rents and all other charges for the Premises
for the balance of such term. In addition, upon any default hereunder, Lessor
shall have the right to exercise in connection therewith or separately any other
rights or remedies provided by law.
18.2 The rights and remedies of Lessor shall include, but are not limited to,
enforcement of any rights and privileges hereunder by mandatory injunction,
restraining order or other equitable relief. In the event of re-entry by Lessor
as hereinabove provided, Lessor shall not be or become responsible for or incur
any liability to Lessee or other persons for any personal property, goods,
commodities or materials in or about the Premises at the time of re-entry, the
Lessor may store or dispose of such personal property, goods, commodities or
materials at the expense of Lessee with payment therefore to be made by Lessee
upon demand of Lessor.
19. INSOLVENCY.
In addition to any other rights or remedies of Lessor hereunder, if Lessee, at
any time during the term of this Lease Agreement, shall be or become insolvent,
or if Lessee shall compound Lessee's debts or sign over Lessee's estate or
effects for payment thereof, or if any sheriff, marshal, constable or any other
officer take possession of the Premises by virtue of any execution or
attachment, or if any receiver or trust is appointed of any property of Lessee,
or in the event Lessee shall be adjudged bankrupt, then and in any such event it
shall be lawful for Lessor at Lessor's election to enter into and upon the
Premises, or any part thereof, and to have, hold and possess and enjoy the same
as in the Lessor's former estate, discharged from these presents, and this Lease
Agreement shall thereupon be terminated, anything herein contained to the
contrary notwithstanding.
20. LEGAL EXPENSES.
In the event of any suit instituted by either Lessor or Lessee against the other
in any way connected with this Lease Agreement, or for the recovery of rent or
possession of the Premises, the successful party to any such action shall
recover from the other party reasonable attorneys' fees and Court costs in
connection with said suit.
21. LESSOR'S RIGHT.
In the event that Lessee does not pay before delinquent any taxes, assessments
or other charges to be paid hereunder by Lessee, Lessor shall have the right to
make such payment and to thereupon charge Lessee for the amount of such payment,
together with interest thereon from the date of such payment to the date of
repayment by Lessee to Lessor at the rate of twenty percent (20%), per annum.
9
22. SUBORDINATION.
22.1 This Lease Agreement and the estate granted hereby shall be subject and
subordinate to the lien of any mortgage or mortgages which now or hereafter may
constitute alien on the Premises, and to any agreements at any time made,
modifying, supplementing, extending or renewing any such mortgages; provided,
however, that Lessor shall attempt to obtain from the mortgagee under any such
mortgage an agreement in substance that, so long as Lessee shall not be in
default in the terms of this Lease Agreement, this Lease Agreement and the
estate hereby granted shall not be terminated. The provisions for the
subordination of this Lease Agreement and the estate hereby granted shall be
self operative and no further instruments shall be required to effect such
subordination; provided, that the parties hereto shall, upon request by any
mortgagee at any time or times, execute and deliver any and all instruments that
may be reasonably necessary or proper to effect such subordination or to confirm
or evidence the same.
22.2 Lessee shall at any time upon not less than ten (10) days prior written
notice from Lessor execute, acknowledge and deliver to Lessor a statement in
writing: (a) certifying that this Lease Agreement is unmodified and in full
force and effect (or, if modified stating the nature of such modification and
certifying that this Lease Agreement as so modified in full force and effect)
and the date to which the rent and other charges are paid in advance, if any;
(b) acknowledging that there are not any uncured defaults on the part of the
Lessor hereunder, or specifying such defaults if any are claimed. Any such
statement may be conclusively relied upon by a prospective purchaser or
encumbrancer of the Premises. Lessee's failure to deliver such statement within
such time shall be deemed Lessee's acknowledgment that: (i) This Lease Agreement
is in full force and effect, without modification except as may be represented
by Lessor; (ii) There are no uncured defaults in Lessor's performance; and (iii)
Not more than one month's rent has been paid in advance. If Lessor desires to
sell, finance or refinance the Premises, or any part thereof, Lessee hereby
agrees to deliver to any purchaser or lender designated by Lessor sce# THE MOST
RECENTLY AVAILABLE financial statements of Lessee. All such financial statements
shall be received by Lessor in confidence and shall be used only for the
purposes therein set forth.
23. SIGNS.
No signs, advertisements or notices shall be placed by Lessee visible from the
outside of the Project, whether walls, roofs, windows, sidewalks, doors or
otherwise, except such as shall first be approved in writing by Lessor, which
approval shall not be unreasonably withheld. If such approval by Lessor is
given, such signs, advertisements or notices shall be installed and maintained
at Lessee's expense and shall conform to all applicable governmental laws, rules
and regulations. The standard sign criteria for the Premises is set forth on
Exhibit "D" which is attached hereto and incorporated herein by this reference.
24. PROJECT RULES.
Lessee shall abide by all rules and regulations of the Project imposed by Lessor
for the cleanliness, good appearance, proper maintenance, good order and
reasonable use of the Premises and the Project by all the tenants of the Project
and their clients, customers and employees. The rules and regulations, a copy of
which are attached hereto as Exhibit " C" and made a part hereof, may be changed
from time to time on reasonable notice to Lessee. A breach of Project rules and
regulations shall be a material breach of this Lease Agreement.
25. RIGHT OF ENTRY.
Lessor may, during the term of this Lease Agreement, at all reasonable times and
during usual business hours, enter upon the Premises for the purpose of
inspection of same or for the purpose of showing same to prospective lenders and
purchasers, and in addition, may, at any time within the last six (6) months of
the term of this Lease Agreement show, the Premises to prospective lessees.
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26. SURRENDER.
Upon the expiration of the term of this Lease Agreement, or upon the early
termination of this Lease Agreement, Lessee shall surrender up peaceable
possession of the Premises in the same condition as the Premises are at the
commencement of this Lease Agreement, reasonable wear and tear is excepted.
27. CERTAIN RIGHTS RESERVED BY LESSOR.
Lessor reserves the following rights exercisable without notice and without
liability to Lessee and without effecting an eviction, constructive or actual,
or disturbance of Lessee's use or possession, or giving rise to any claim for
set off or abatement of rent: (a) to control, install, affix and maintain any
and all signs on the property, or on the exterior of the Project and in the
corridors, entrances and other common areas thereof, except those signs within
the Premises not visible from outside the Premises; (b) to reasonably designate,
limit, restrict and control any service in or to the Project, including but not
limited to the designation of sources from which Lessee may obtain sign painting
and lettering; any restriction, designation, limitation or control imposed by
reason of this subparagraph shall be imposed uniformly on Lessee and other
tenants occupying space in the Project; (c) to retain at all times and to use in
appropriate instances keys to all doors within and into the Premises; no locks
shall be changed without the prior written consent of Lessor; this provision
shall not apply to Lessee's safes or other areas maintained by Lessee for the
safety and security of monies, securities, negotiable instruments or like items;
(d) to make repairs, improvements, alterations, additions or installations,
whether structural or otherwise, in and about the Project, or any part thereof,
and for such purposes to enter upon the Premises, and during the continuation of
any of said work, to temporarily close doors, entryways, public spaces and
corridors in the Project and to interrupt or temporarily suspend services and
facilities; and (e) to approve the size and location of safes and other heavy
equipment and articles in and about the Premises and the Project and to require
all such items to be moved into and out of the Project and the Premises only at
such times and in such manner as Lessor shall direct in writing.
28. NOTICES.
28.1 Any notice required or permitted to be given or served by either party to
this Lease Agreement shall be deemed to have been given or served when made in
writing, by certified or registered mail, addressed as follows:
LESSOR: Fairmont Commerce Center, LLC
000 Xxxxxxxx Xxxxx 000
Xxxxx Xxxxxx, XX 00000
LESSEE: Xxxxx, Incorporated
Attn: Chief Financial Officer
0000 Xxxx Xxxxxxxx Xxxxx 0
Xxxxx, Xxxxxxx
28.2 All rental payments shall be made to Lessor at the above address. The
addresses may be changed from time to time by either party by serving notice as
above provided. All notices shall be effective if mailed as aforesaid on the
second business day following deposit in the mail, or otherwise upon actual
receipt by the recipient.
29. DELAYS; DEFAULT BY LESSOR.
29.1 Lessor shall not be responsible for any delay or failure in the observance
or performance of any term or condition of this Lease Agreement to be observed
or performed by Lessor to the extent that such delay results from action or
order of governmental authorities civil commotion, strikes, fires, acts of God
or the public enemy act or default of any tenant in the Project, the inability
to procure labor, material, fuel, electricity, or other forms of energy or any
other cause beyond the reasonable control of Lessor, whether or not similar to
the matters herein specifically enumerated. Any delay shall extend by like time
any period of performance by Lessor and shall not be deemed a breach of or
failure to perform this Lease Agreement or any provisions hereof.
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29.2 In the event of any default under this Lease Agreement by Lessor, Lessee,
before exercising any rights that it may have at law to cancel this Lease
Agreement, shall have given written notice of such default to Lessor and shall
have offered Lessor a reasonable opportunity to correct and cure the default.
Lessee also agrees to give the holders of any mortgages or deeds of trust
("mortgagees") by registered mail, a copy of any notice of default served upon
Lessor, provided that prior to such notice Lessee has been notified in writing
(by way of Notice of Assignment of Rents and Leases, or otherwise) of the
addresses of such mortgagees. Lessee further agrees that if Lessor shall have
failed to cure such default within the aforesaid time limit, then the mortgagees
shall have an additional twenty (20) days within which to cure such default or
if such default cannot be cured within that time, then such additional time as
may be necessary, if within such twenty (20) days any mortgagee has commenced
and is diligently pursuing the remedies necessary to cure such default
(including but not limited to commencement of foreclosure proceedings if
necessary to effect such cure) in which event this Lease Agreement shall not be
terminated while such remedies are being so diligently pursued.
30. PARKING.
30.1 Lessee also acknowledges that there are unreserved surface parking spaces
in an uncovered parking area adjoining the building. Lessee and visitors of the
Project may park in such spaces without charge on a non-exclusive basis.
33.2 Lessee's use of all parking areas shall be subject to any rules and
regulations relating thereto included from time to time in the Project Rules and
Regulations, including regulations governing the designation of specific parking
spaces for use by the Lessee and its guests and invites, the hours during which
such parking spaces may be used, the size of such parking spaces, and the
traffic flow in the parking areas. Lessor shall not be responsible for any
vandalism or other damages from any cause occurring to automobiles or their
contents while located in such parking spaces or moving in the parking area.
31. NO WAIVER.
Any waiver by any of the parties hereto of any breach of this Lease Agreement,
or of any right of any party, must be in writing, and in any event shall not
constitute a waiver of any other breach or of any other right.
32. ENTIRE AGREEMENT.
This Lease Agreement contains the entire agreement between the parties hereto
and no term or provision hereof may be changed, waived, discharged or terminated
unless the same be in writing executed by both parties hereto.
33. APPLICABLE LAW.
The laws of Arizona shall govern the construction, performance and enforcement
of this Lease Agreement.
34. TIME OF ESSENCE.
Time shall be of the essence in the performance of every term, covenant and
condition of this Lease Agreement.
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35. HEADINGS.
The paragraph headings contained herein are inserted only for convenience of
reference and are in no way to be construed as a part of this Lease Agreement or
as a limitation on the scope of the particular paragraphs to which they refer.
36. BENEFITS.
Subject to paragraph 18 hereof, this Lease Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective heirs, executors,
administrators, legal representatives, successors and assigns.
37. SEVERABILITY.
If any term or provision of this Lease Agreement shall, to any extent, be
determined by a court of competent jurisdiction to be invalid or unenforceable,
the remainder of this Lease Agreement shall not be affected thereby, and each
other term and provision of this Lease Agreement shall be valid and be
enforceable to the fullest extend permitted by law.
38. ABANDONMENT.
Lessee shall not vacate or abandon Premises at any time during the term of this
Lease Agreement, nor permit the Premises to remain unoccupied for a period
longer than fifteen (15) consecutive days during the term of this Lease
Agreement; and if Lessee shall abandon, vacate or surrender the Premises, or be
dispossessed by process of law, or otherwise, any personal property belonging to
Lessee and left on the Premises shall be deemed abandoned.
39. LESSEE AUTHORITY.
Lessee shall furnish to Lessor a corporate resolution, proof of due
authorization of partners, or other appropriate documentation reasonably
requested by Lessor evidencing the due authorization of Lessee to enter into
this Lease Agreement.
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40. ADDITIONAL TERMS AND CONDITIONS.
Additional terms and conditions which apply to this Lease Agreement, if any, are
set forth on Exhibit "D" which is attached hereto and incorporated herein by
this reference. The attached Exhibit "D" will be effective when the same is
signed by both parties hereto.
IN WITNESS WHEREOF, the parties have executed this Lease Agreement as of the day
and year first above written.
LESSOR: Fairmont Commerce Center, LLC LESSEE: Xxxxx, Incorporated
----------------------------------- ---------------------------------------
By: DMC Investment Co, LLC, Manager By: Xxxxxx Xxxxx, Chief Financial
Xxxxx Xxxxx, Manager Officer, Vice President and
Treasurer
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EXHIBIT "A"
THE PREMISES
[FAIRMONT COMMERCE CENTER FLOORPLAN]
15
EXHIBIT "B"
OUTLINE SPECIFICATIONS FOR IMPROVEMENTS TO BE PAID FOR BY LESSOR
See the provisions in Exhibit "D" of this lease.
-------------------------- --------------------------
Lessor's Initials Lessee's Initials
16
EXHIBIT "C"
PROJECT RULES AND REGULATIONS
1. Any sign, lettering, picture, notice or advertisement installed on or in any
part of the leased premises and visible from the exterior of the Project, or
visible from the exterior of the Premises, shall be installed at Lessee's sole
cost and expense, and in such manner, character and style as Lessor may approve
in writing which approval shall not be unreasonably withheld. In the event of a
violation of the foregoing by Lessee, Lessor may remove the same without any
liability and may charge the expense incurred by such removal to Lessee.
2. No awning or other projection shall be attached to the outside walls of the
Project. No curtains, blinds, shades or screens visible from the exterior of the
Project or visible from the exterior of the Premises, shall be attached to or
hung in, or used in connection with any window or door of the Premises without
the prior written consent of Lessor. Such curtains, blinds, shades, screens or
other fixtures must be of a quality, type, design and color, and attached in a
manner approved by Lessor.
3. Lessee, its servants, employees, customers, invitees and guests shall not
obstruct sidewalks, entrances, passages, corridors, vestibules, halls, in and
about the Project which are used in common with other tenants and their
servants, employees, customers, guests and invitees, and which are not a part of
the Premises of Lessee. Lessee shall not place objects against glass partitions
or doors or windows which would be unsightly from the exterior of the Project,
and will promptly remove any such objects upon notice from Lessor.
4. Lessee shall not make excessive noises, cause disturbances or vibrations or
use or operate any electrical or mechanical devices that emit excessive sound or
other waves or disturbances or create obnoxious odors any of which may be
offensive to the other tenants and occupants of the Project, or that would
interfere with the operation of any device, equipment, radio, television
broadcasting or reception from or within the Project or elsewhere and shall not
place or install any projections, antennas, aerials or similar devices inside or
outside of the Premises or on the Project.
5. Lessee shall not waste electricity, water or air conditioning and shall
cooperate fully with Lessor it insure the most efficient operation of the
Project's heating and air conditioning systems.
6. Lessee assumes full responsibility for protecting its space from theft,
robbery and pilferage, which includes keeping doors locked and other means of
entry to the Premises closed and secured after normal business hours.
7. Lessee shall comply with all applicable federal, state and municipal laws,
ordinances and regulations, and Project Rules and shall not directly or
indirectly make any use of the Premises which may be prohibited by any of the
foregoing or which may be dangerous to persons or property or may increase the
cost of insurance or require additional insurance coverage.
8. Lessor shall have the right to prohibit any advertising by Lessee which in
Lessor's reasonable opinion tends to impair the reputation or character of the
Project, and upon written notice from Lessor, Lessee shall refrain from or
discontinue such advertising.
9. The Premises shall not be used for cooking (as opposed to heating of food),
lodging, sleeping or for any immoral or illegal purpose.
10. Any carpeting cemented down by Lessee shall be installed with a releasable
adhesive. In the event of a violation of the foregoing by Lessee, Lessor may
charge the expense incurred by such removal to Lessee.
11. The water and wash closets, drinking fountains and other plumbing fixtures
shall not be used for any purpose other than those for which they were
constructed, and no sweepings, rubbish, rags, coffee grounds, or other
substances shall be thrown therein. All damages resulting from any misuse of the
fixtures shall be borne by the Lessee who or whose servants, employees, agents,
visitors, or licensees, shall have caused same. No person shall waste water by
interfering with the faucets or otherwise.
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12. No electric circuit for any purpose shall be brought into the Premises
without Lessor's written permission specifying the manner in which same may be
done.
13. Based upon reasonable structural /imitations in the Premises, Lessee may
limit the weight, size and position of all safes, fixtures and other equipment
or machinery used in the Premises. In the event Lessee shall require extra heavy
equipment or machinery, Lessee shall notify Lessor of such fact, and shall pay
the cost of structural bracing to accommodate same. All damage done to the
Premises or Project by installing, removing or maintaining extra heavy equipment
or machinery shall be repaired at the expense of the Lessee.
14. Canvassing, soliciting and peddling in the Project is prohibited and each
tenant of the Project shall cooperate to prevent the same.
15. Lessee shall not xxxx, drive nails, screw or drill into, paint or in any way
deface the exterior walls, roof, foundations, bearing walls or pillars without
the prior written consent of Lessor. No boring or cutting for wires shall be
allowed, except with the prior written consent of Lessor.
16. Lessee, its servants, employees, customers, invitees and guests shall, when
using the common parking facilities in and around the Project observe and obey
all signs regarding fire lanes and no parking zones, and when parking always
park between the designated lines. Lessor reserves the right to tow away, at the
expense of the owner, any vehicles which in improperly parked or parked in a no
parking zone. All vehicles shall be parked at the sole risk of the owner, and
Lessor assumes no responsibility for any damage to or loss of vehicles. No
vehicles shall be parked overnight.
17. Wherever in these Project Rules and Regulations the word "Lessee" occurs, it
is understood and agreed that it shall mean Lessee's associates, agents, clerks,
servants and visitors. Wherever the word "Lessor" occurs, it is understood and
agreed that it shall mean Lessor's assigns, agents, clerks, servants, and
visitors.
18. Lessor reserves the right at any time to change or rescind any one or more
of these rules and regulations as in Lessor's judgment may from time to time may
be necessary for the management, safety, care and cleanliness of the Project.
Lessor shall not be responsible to Lessee or to any other person for the
non-observance or violation of these rules and regulations by any other Lessee
or other person.
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EXHIBIT "D"
CONSTRUCTION PROVISIONS FOR LESSEE IMPROVEMENTS TO PREMISES
1. SCOPE OF WORK. These provisions define the scope of work to be provided by
Lessor and Lessee in the Premises under the terms of the Lease. Words and
phrases used herein which are defined in the Lease have the meanings set forth
therein unless provided otherwise.
2. INTENT OF EXHIBIT. It is the intent of these provisions that Lessee shall be
permitted freedom in the interior design and layout of its space so long as same
is consistent with Lessor's policies and structural requirements, applicable
building codes, and with sound architectural and construction practices. Any
additional cost of design, construction, operation, insurance, maintenance,
taxes, fees or utilities which results there from shall be charged to Lessee and
paid for by Lessee in accordance with the provisions hereof and of the Lease.
3. LESSOR'S ALLOWANCE. Lessor hereby grants Lessee a construction allowance not
to exceed One Hundred Thousand Dollars ($100,000) ("Construction Allowance"),
which shall be used only as a credit towards the cost of improvements to Suites
4, 5 and 6 of the Premises.
4. LESSEE'S COSTS. All costs incurred in excess of the foregoing allowance for
improvements, services or materials required by Lessee in or for the Premises
shall be for the account of Lessee and at Lessee's sole cost and expense.
5. SPACE PLAN. Lessee shall prepare a space layout and working drawings and
specifications for all construction work in the Premises. Interior design, and
details and specifications for improvements, shall be for the account of Lessee
and shall be paid by Lessee upon invoice therefor. Lessee shall develop complete
working drawings and specifications (the "Plans") for construction of
improvements in the Premises, showing thereon partitions, doors, electrical and
telephone outlets, light fixture locations, wall finishes, floor coverings and
special requirements (if any) for Lessor's review and approval. Failure of
Lessor to approve the Plans within the time limit specified in Section 7 hereof
shall be deemed approval.
6. COST ESTIMATE AND PAYMENTS.
6.1 COST ESTIMATES. As soon as practicable after Lessor's approval of the
Plans, Lessee will advise Lessor of the total estimated cost for the
improvements (including architectural and engineering, administrative fees and
preinstalled work) together with supporting evidence as Lessor shall require
from Lessee (e.g., the contractor bid). Lessor will have no obligation
whatsoever to make any disbursement from the Construction Allowance until Lessee
has complied with the provisions of this Section 6.1.
6.2 PAYMENTS. During the course of construction of the Improvement Work
(defined below), Lessor shall make progress payments to Lessee from the
Construction Allowance less a fifty percent (50%) retainage. Progress payments
shall be made within ten (10) days after receipt by Lessor of the following: (i)
a draw request; (ii) substantiation of the construction costs to be paid; (iii)
a statement as to the percentage of work completed; and (iv) conditional partial
lien releases on account of the work completed. Upon completion of construction
of the Improvement Work, Lessor shall pay to Lessee the final installment of the
Construction Allowance (including the retainage), provided Lessee has supplied
the following items to Lessor: (i) The "Certificate of Occupancy"; (ii) A copy
of Lessee's recorded "Notice of Completion"; (iii) A copy of all TI Contractor
(as hereinafter defined) paid invoices totaling or in excess of the Construction
Allowance; (iv) copy of all construction lien releases or other lien releases on
account of such construction work, including an affidavit from TI Contractor
that no liens exist; (v) A copy of all building permits with all sign-offs
executed; (vi) An architect's certification that the Premises were constructed
per plans and specifications and are one hundred percent (100%) complete in
accordance with this EXHIBIT "D"; (vii) Any and all insurance certificates
required under the Lease; (viii) One (1) set of "as built" drawings; and (ix)
Copies of all manufacturer's warranties, owner's manuals, etc., for equipment or
materials installed by TI Contractor and a warranty statement, naming Lessor as
the beneficiary of such warranty, from the general contractor guaranteeing all
improvements for at least one (1) year from the date of substantial completion
of the Premises.
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7. TIME LIMITS. The following maximum time periods shall be allowed for the
indicated matters: (i) Lessor approves (or disapproves with explanation) the
working drawings - 5 business days; Lessor approves (or disapproves with
explanation) the TI Contractor - 5 business days. In the event that Lessor fails
to provide its approval in the time frames required in (i) or (ii) above, and
does not provide written notification of its reason for any disapproval (which
disapproval must be reasonable), such item is hereby deemed to be approved by
Lessor. Lessee may commence with that portion of the work that is not
disapproved.
8. CONSTRUCTION BY TI CONTRACTOR. All construction work in the Premises
(sometimes referred to herein as "Improvement Work") shall be performed by the
tenant improvement contractor ("TI Contractor") retained by Lessee. The TI
Contractor shall perform such work in a good and workmanlike manner and shall
construct the Improvement Work substantially in accordance with the Plans. All
Improvement Work shall be performed in accordance with all laws, ordinances and
requirements of government agencies having jurisdiction therefor. The following
conditions shall apply to Lessee's selection and use of the TI Contractor:
8.1 CONTRACTOR SELECTION. Subject to the provisions of this EXHIBIT "D",
Lessee may select any contractor for the construction of Improvement Work,
provided such contractor is bondable and has received the prior written approval
of Lessor. Within five (5) days after the receipt by Lessor of a written request
by Lessee to approve a contractor, Lessor shall either approve or disapprove of
such contractor. In the event Lessor fails to approve or disapprove of a
contractor within such five (5) day period, such contractor shall be deemed
approved.
8.2 INDEMNITY. Lessee hereby indemnifies and holds Lessor harmless from and
against any and all costs arising out of or in connection with damage to the
Project caused by Lessee's contractors.
8.3 SPECIAL CONDITIONS. Lessee agrees that the provisions set forth below
shall be incorporated as "Special Conditions" into the contract between Lessee
and TI Contractor for the benefit of Lessor, and agrees that as to such
provisions, Lessor shall have the rights of enforcement of a third party
beneficiary (with a copy of the contract to be furnished Lessor prior to the
commencement of the Improvement Work):
8.3.1 Prior to starting any of the Improvement Work, TI Contractor
shall also deliver to Lessor duplicate originals of insurance policies (or
certificates of insurance if such certificates shall, in Lessor's sole judgment,
provide clear and unambiguous evidence of insurance). The insurance provided
Lessor by TI Contractor pursuant to this paragraph 8.3.1 shall be primary
insurance without the right of contribution from any insurance maintained by the
Lessor and shall name Lessor and Lessor's agent as additional insured. The
insurance required shall be written for not less than the following (or such
amount required by law, if the same is greater than the following):
8.3.1.1 WORKER'S COMPENSATION:
(a) State Statutory Requirements
(b) Applicable Federal Statutory Requirements
(c) Employer's Liability $1,000,000
8.3.1.2 COMPREHENSIVE GENERAL LIABILITY: (including
Premises-Operations; Independent Contractor's Protective;
Products and Completed Operations; Broad Form Property Damage:
(a) Combined Single Limits for Bodily Injury and Property
Damage: $1,000,000 Each Occurrence.
(b) Products and Completed Operations to be maintained:
(c) Property Damage Liability Insurance shall provide X, C,
or U coverage.
8.3.1.3 CONTRACTUAL LIABILITY:
(a) Combined Single Limits for Bodily Injury and Property
Damage: $1,000,000 Each Occurrence.
8.3.1.4 PERSONAL INJURY, WITH EMPLOYMENT EXCLUSION DELETED:
1,000,000 Annual Aggregate.
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8.3.1.5 COMPREHENSIVE AUTOMOBILE LIABILITY:
(a) Combined Single Limits for Bodily Injury and Property
Damage: $1,000,000 Each Occurrence.
8.3.1.6 UMBRELLA EXCESS LIABILITY: $3,000,000
8.3.2 TI Contractor shall be responsible for, and shall pay the cost,
the repair, replacement or clean-up of any damage done by it to other
contractors' work, which specifically includes access ways to the Premises which
may be concurrently used by others.
8.3.3 Under no circumstances shall TI Contractor cause or permit
anything to be hung from or supported by any duct work or piping above the
Premises. All suspended ceilings and other fixtures and improvements shall be
installed in a proper manner and in accordance with applicable building codes.
8.3.4 TI Contractor shall contain the storage of its materials and its
operations within the Premises and such other space, if any, as he may be
assigned by Lessor. Should TI Contractor be assigned space outside of the
Premises, he shall move to such other space as Lessor shall direct from time to
time to avoid interference or delays with other work. In no event shall
materials be stored in corridors in the Common Area. No flammable materials
shall be stored or kept in the Premises or anywhere else in the Project, except
that which is to be used during the single day of construction that it is there.
8.3.5 All trash and surplus construction materials shall be stored
within the Premises and shall be promptly removed from the Project. TI
Contractor shall confirm with Lessor on the placement of any trash bin prior to
placing the same on site.
8.3.6 At Lessor's option, Lessor may provide trash removal services
for TI Contractor (who shall purchase such services by use of Lessor's form of
Lessee work order), and Lessee shall cause the cost thereof to be reimbursed to
Lessor within ten (10) days after demand. Failure by Lessee to cause any such
payment to be made shall be deemed a default under the Lease the same as a
failure to pay Rent.
8.3.7 TI Contractor shall provide Lessor prior written notice of any
planned work to be done on weekends or during other than normal job hours for
the purpose of obtaining Lessor's consent thereto. TI Contractor shall also
refrain during normal building hours, as such hours are determined by Lessor,
from proceeding with construction that impacts, or may create an annoyance for,
any tenant or any tenant's use of its premises, for example, work that causes
excessive noise (such as floor coring) or creates fumes or odors (such as wall
covering preparation, painting, millwork and door or wood finishing).
8.3.8 Lessee and TI Contractor are responsible for compliance with all
applicable codes and regulations of duly constituted authorities having
jurisdiction insofar as the performance of the work and completed improvements
are concerned for all work performed by Lessee or TI Contractor, and with all
applicable safety regulations established by the general contractor for the
Project. Lessee further agrees to save and hold Lessor harmless for said work as
provided in the Lease.
8.3.9 Neither TI Contractor nor the subcontractors shall post signs on
any part of the Project or on the Premises.
8.3.10 TI Contractor shall agree that the contract between Lessee and
TI Contractor is solely for the benefit of Lessee and TI Contractor, except for
the provisions referred to above as being for the benefit of Lessor (as to which
provisions Lessor shall have the rights of enforcement of a third party
beneficiary). TI Contractor shall further agree that it and its subcontractors
shall look only to Lessee for payment of any sums due under its contract with
Lessee. TI Contractor, for itself and its subcontractors, shall waive any and
all claims or actions (including mechanics' or materialmen's lien rights) that
it or its subcontractors may have against Lessor for amounts owing to it or its
subcontractors under the contract between TI Contractor and Lessee.
8.4 ELECTRICAL POWER. Upon written notice from TI Contractor that it needs
temporary electrical power, Lessor shall make same available. Lessee shall
reimburse Lessor for the cost thereof, together with a charge for Lessor's
direct and indirect administrative costs related thereto, within ten (10) days
after the demand. Failure by Lessee to make any such payment shall be deemed a
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default under the Lease the same as a failure to pay Rent. Unless TI Contractor
shall notify Lessor in writing that such temporary power is no longer needed by
it, Lessor may continue to make such temporary power available until the
Premises shall open for business, and Lessee shall pay Lessor therefor as above
provided.
8.5 NOTICE OF COMPLETION AND LIENS. Lessee shall be responsible for and
shall (a) obtain and record a Notice of Completion promptly following completion
of Lessee's Work and promptly forward a copy to Lessor, (b) post a Notice of
Completion on the Premises and promptly forward a copy to Lessor, (c) obtain
executed lien waiver for all work performed by TI Contractor and an executed
affidavit from TI Contractor that no liens exist, and shall provide the
originals thereof to Lessor promptly upon substantial completion of the
Improvement Work, (d) obtain a Certificate of Occupancy for the Premises and
provide Lessor with a duplicate original thereof promptly after substantial
completion of the Improvement Work, (e) obtain from TI Contractor a copy of the
contract with TI Contractor and a list of all components of construction in the
Premises, broken down into items and the cost of each item, and provide the
original thereof to Lessor promptly upon substantial completion of the
Improvement Work, (f) provide Lessor with one (1) set of "as -built drawings
within thick-j (3% days following substantial completion of the Improvement
Work, (g) obtain a copy of all building permits with sign-offs executed and
provide copies thereof to Lessor promptly upon substantial completion, (h)
obtain an architect's certification that the Improvement Work was constructed in
accordance with this EXHIBIT "D", and (i) obtain and deliver to Lessor copies of
any owner's manuals for any equipment or other improvements. The failure of
Lessee to provide to Lessor with any one (1) or more of the foregoing items
within thirty (30) days after request therefor by Lessor, shall be a default
under the Lease.
8.6 WARRANTIES. Lessee shall assign any and all warranties and guaranties
provided by TI Contractor and subcontractors to Lessor immediately upon
completion of Improvement Work. All improvements shall be guaranteed or
warrantied for a period of at least one (1) year.
8.7 RESPONSIBILITY FOR LESSEE'S MATERIALS. All materials, work,
installations and decorations of any nature whatsoever brought on or installed
in the Premises before the commencement of the term of the Lease shall be at
Lessee's risk, and neither Lessor nor any party acting on Lessor's behalf shall
be responsible for any damage thereto or loss or destruction thereof.
9. LESSEE COORDINATOR. Lessor has designated a "Lessee Coordinator" who shall be
responsible for the management and coordination of all work to be performed in
the Premises and coordination with Lessee on all matters governed by the
provisions contained in this EXHIBIT "D". Lessee Coordinator will furnish Lessee
with notices of substantial completion, Lessor's approval or disapproval of
Plans and changes thereto, and other similar notices. Lessee shall deliver any
payments that may be required hereunder to be paid to Lessor to the Lessee
Coordinator unless written notice is given by Lessor to the contrary.
10. CHANGES. If Lessee requests or necessitates any change, addition or deletion
to the Premises after approval of the Plans, as described in Section 7 above, a
request for the change shall be submitted to the Lessee coordinator accompanied
by revised plans prepared by Lessor's space planner at Lessee's sole expense.
11. INCORPORATION BY REFERENCE. This EXHIBIT "D" is and shall be incorporated by
reference in the Lease, and all of the terms and provisions of the Lease are
incorporated herein by this reference.
12. ATTORNEYS' FEES. In the event of any action or proceeding initiated by a
party hereto for the enforcement or interpretation of the provisions contained
herein, the prevailing party shall be entitled to recover its costs incurred in
connection therewith, including its reasonable attorneys' fees.
AGREED:
LESSOR: Fairmont Commerce Center, LLC LESSEE: Xxxxx, Incorporated
----------------------------------- ---------------------------------------
By: DMC Investment Co, LLC, Manager By: Xxxxxx Xxxxx, Chief Financial
Xxxxx Xxxxx, Manager Officer, Vice President and
Treasurer
22
EXHIBIT "E"
ADDENDUM RELATING TO THE EXTENSION OF TERMS
This ADDENDUM (the "Addendum") is entered into this December 9, 1999 between
Fairmont Commerce Center, L.L.C. ("Lessor") and Xxxxx, Incorporated ("Lessee"),
and modifies and supplements that certain Commercial Lease (as it may have been
amended, the "Lease") between Lessor and Lessee dated January 20, 2000.
1. Lessee shall have one option to extend the term of the Lease by 36 months
(the "Extension Term"), commencing on the day following the expiration date of
the original term of the Lease or the first option, by giving Lessor written
notice, at least four (4) months prior to the expiration of the original term of
the Lease or the first option, of Lessee's election to extend; provided,
however, that the option granted herein shall automatically and forever
terminate if not exercised by written notice in a timely manner or if Lessee is
in breach of the Lease at the time the notice of extension is given or at the
time of the expiration date of the original term of the Lease.
2. The amount of the monthly installments of rent due during the Extension Term
shall be the greater of: (a) the monthly rental installments in effect
immediately prior to the expiration date of the original term of the Lease, or
(b) the then current market rental rate (under prevailing market conditions) for
similar space in the Building as reasonably determined by Lessor. Lessor shall,
upon Lessee's request within the one- month period preceding the deadline for
the giving of Lessee's notice (or otherwise at such time as Lessee delivers to
Lessor Lessee's written notice of election), make a reasonable determination
with respect to the market rental rate that would be applicable to the Leased
Premises during the Extension Term.
3. Upon the termination of the Lease, abandonment of the Leased Premises or
termination of Lessee's right to possession of the Leased Premises, Lessee shall
not thereafter be entitled to exercise its option to extend under this Addendum.
4. Except as specifically modified by this Addendum, all of the provisions of
the Lease (and any other addendum or amendment thereto not inconsistent
herewith) shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Lease as of the day and year
first above written.
LESSOR: Fairmont Commerce Center, LLC LESSEE: Xxxxx, Incorporated
----------------------------------- ---------------------------------------
By: DMC Investment Co, LLC, Manager By: Xxxxxx Xxxxx, Chief Financial
Xxxxx Xxxxx, Manager Officer, Vice President and
Treasurer
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