1
LEASE
BY AND BETWEEN
5025 EAST WASHINGTON ASSOCIATES
LIMITED PARTNERSHIP
"LANDLORD"
AND
SSE TELECOM, INC.
"TENANT"
LOCATED AT
0000 XXXX XXXXXXXXXX,
XXXXXXX, XXXXXXX
SEPTEMBER 23, 1997
2
TABLE OF CONTENTS
LEASE OF PREMISES....................................................................... 1
Base Year............................................................................. 1
Commencement Date..................................................................... 1
Common Areas.......................................................................... 1
Default Interest...................................................................... 1
Expiration Date....................................................................... 1
Index................................................................................. 1
Tenant's Mailing Address.............................................................. 1
Landlord's Mailing Address............................................................ 1
Project............................................................................... 1
Rentable Area......................................................................... 1
Security Deposit...................................................................... 1
State................................................................................. 1
Term.................................................................................. 1
DELIVERY OF POSSESSION.................................................................. 1
RENT.................................................................................... 1
ADDITIONAL RENT: OPERATING EXPENSE ADJUSTMENT........................................... 1
Comparison Year....................................................................... 1
Direct Expenses....................................................................... 1
Tenant's Share of the Direct Expenses................................................. 1
The Excess............................................................................ 1
INTEREST AND LATE CHARGES............................................................... 2
SECURITY DEPOSIT........................................................................ 2
USE OF PREMISES BY TENANT............................................................... 2
PARKING................................................................................. 3
SERVICES AND UTILITIES.................................................................. 3
TAXES PAYABLE BY TENANT................................................................. 3
CONDITION OF THE PREMISES............................................................... 4
REPAIRS AND MAINTENANCE................................................................. 4
FIRE OR CASUALTY........................................................................ 4
ALTERATIONS AND ADDITIONS............................................................... 5
LEASEHOLD IMPROVEMENTS, TENANT'S PROPERTY............................................... 5
HAZARDOUS MATERIALS..................................................................... 5
Hazardous Materials Laws.............................................................. 5
Hazardous Materials................................................................... 5
RULES AND REGULATIONS................................................................... 6
CERTAIN RIGHTS RESERVED TO THE LANDLORD................................................. 6
ASSIGNMENT AND SUBLETTING............................................................... 7
HOLDING OVER............................................................................ 8
SURRENDER OF PREMISES................................................................... 8
EMINENT DOMAIN.......................................................................... 8
INDEMNIFICATION......................................................................... 8
TENANT'S INSURANCE...................................................................... 9
LANDLORD'S INSURANCE.................................................................... 9
WAIVER OF SUBROGATION................................................................... 9
WAIVER.................................................................................. 10
SUBORDINATION AND ATTORNMENT............................................................ 10
3
ESTOPPEL CERTIFICATE BY TENANT.......................................................... 10
TRANSFER OF LANDLORD'S INTEREST......................................................... 10
DEFAULT; INSOLVENCY..................................................................... 10
Default............................................................................... 10
Insolvency............................................................................ 11
INABILITY TO PERFORM.................................................................... 11
BROKERAGE FEES.......................................................................... 11
NOTICES................................................................................. 11
GOVERNMENT ENERGY OR UTILITY CONTROLS................................................... 11
QUIET ENJOYMENT......................................................................... 11
MISCELLANEOUS........................................................................... 11
Attorneys' Fees....................................................................... 11
Severability.......................................................................... 11
Successors and Assigns................................................................ 11
Choice of Law......................................................................... 11
Prior Agreement; Amendments........................................................... 12
Captions, Articles and Section Numbers................................................ 12
Recording............................................................................. 12
Consent............................................................................... 12
Counterparts.......................................................................... 12
Furnishing of Financial Statements; Tenant's Representations.......................... 12
Accord and Satisfaction............................................................... 12
Execution of Lease; No Option......................................................... 12
Corporate Authority................................................................... 12
Changes Requested by Lender........................................................... 12
Further Assurances.................................................................... 12
Mortgage Protection................................................................... 12
Time is of the Essence................................................................ 12
Light or Air.......................................................................... 12
Exhibits.............................................................................. 12
Landlord's Liability.................................................................. 12
RENEWAL OPTION.......................................................................... 12
RIGHT OF REFUSAL........................................................................ 12
4
This Lease, dated September 23, 1997, is made by and between 5025 EAST
WASHINGTON ASSOCIATES LIMITED PARTNERSHIP ("Landlord") and SSE TELECOM, INC., a
Delaware Corporation ("Tenant").
1. Lease of Premises. Landlord hereby leases to Tenant and Tenant hereby
leases from Landlord that certain office space, known as Suite 200, (the
"Premises"), as shown on Exhibit "D", located on the 2nd floor, 0000 Xxxx
Xxxxxxxxxx, Xxxxxxx (the "Building").
2. Definitions. The following definitions shall apply:
a. Base Year: The calendar year starting 1998.
b. Commencement Date: November 1, 1997.
c. Common Areas: All portions of the building and associated
facilities walkways and hallways, restrooms, parking areas, stairways,
elevators, courtyards, landscaped areas and other areas designated for use
in common by the public and tenants of the Building.
d. Default Interest: The prime rate of interest announced by the Bank
of America plus three percent, adjusted as and when said prime rate is
adjusted.
e. Expiration Date: October 31, 2000.
f. Index: The Metropolitan Phoenix Consumer Price Index compiled by
the Bureau of Business and Economic Research, College of Business
Administration, Arizona State University (1982-84 = 100) or, if said Index
should be discontinued or modified, such substitute Index as Landlord, in
the exercise of its sole discretion, shall select.
g. Tenant's Mailing Address:
00000 Xxxxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxx
h. Landlord's Mailing Address:
Xxxxxxxxx-Xxxxx Associates, Inc.
X.X. Xxx 00000
Xxxxxxx, Xxxxxxx 00000-0000
i. Project: The Building, the real property described on Exhibit "A"
(the "Real Property") and all other buildings or improvements now or
hereafter constructed on the Real Property.
j. Rentable Area: For the purpose of all calculations under this
lease, the Rentable Area of the Premises shall be conclusively deemed to be
7000 square feet, regardless of whether the actual area is greater or less
than this amount.
k. Security Deposit: $10,000.00
l. State: The State of Arizona.
m. Term: The period commencing on the Commencement Date and expiring
at midnight on the Expiration Date, or on such other date as this Lease may
be terminated in accordance with its terms.
3. Delivery of Possession: Landlord shall endeavor to deliver possession
of the Premises to Tenant on the Commencement Date, but if for any reason
Landlord does not deliver possession of the Premises to Tenant on the
Commencement Date, Landlord shall not be subject to any liability for such
failure, the Expiration Date shall not change, the validity of this Lease shall
not be impaired, and rent shall be abated until delivery of possession. If
Landlord permits Tenant to enter into possession of the Premises before the
Commencement Date, the Commencement Date shall be advanced to the date Tenant
takes possession. Notwithstanding the foregoing, if Landlord fails to deliver
possession within 15 days after the Commencement Date, Tenant, as its sole
remedy, may elect to terminate this Lease by written notice to Landlord, and
upon such termination both Landlord and Tenant shall be released of all
liability and obligation hereunder.
1
5
4. Rent. Tenant shall pay to Landlord, without deduction, offset, notice
or demand, a Base Rent of EIGHT THOUSAND SEVEN HUNDRED FIFTY United States
Dollars ($8,750.00) per month during the first Lease year, a Base Rent of NINE
THOUSAND THREE HUNDRED THIRTY THREE United States Dollars ($9,333.00) per month
during the second Lease year, and a Base Rent of NINE THOUSAND NINE HUNDRED
SEVENTEEN United States Dollars ($9,917.00) per month during the last Lease
year, in advance on the first day of each calendar month, at X.X. Xxx 00000,
Xxxxxxx, Xxxxxxx 00000-0000 or at such other place as Landlord may designate
from time to time in writing; beginning on November 1, 1997 provided, however,
that Tenant shall pay upon the execution of this Lease the Base Rent for the
first full calendar month and for the fractional month, if any, preceding the
first full calendar month. The Base Rent payable for any fractional month at the
beginning or end of the Term shall be pro-rated,
5. Additional Rent: Operating Expense Adjustment.
a. For the purpose of this Article, the following definitions shall apply:
Comparison Year. Each successive 12 month period after the Base Year.
Direct Expenses. All direct costs of operation and maintenance of the
Building and associated improvements, including parking and other Common
Areas, as determined by standard accounting practices, including without
limitation: real property taxes and assessments; water and sewer charges;
insurance premiums; utilities; security; janitorial services; trash
removal; costs incurred in the management of the Building and associated
Real Property, if any, including administrative overhead and property
management fees (said management fees not to exceed 5% of gross rental
income); air conditioning and heating; elevator maintenance; supplies;
materials; equipment and tools; plumbing and electrical systems; paving,
re-paving and re-striping; and costs of maintenance, repair and replacement
of all structures, improvements, facilities, equipment and systems. "Direct
Expenses" shall not include depreciation on the Building or equipment
therein, loan payments, executive salaries or real estate brokers'
commissions.
Tenant's Share of the Direct Expenses. 19.42% of the Direct Expenses
for a Base or Comparison Year, representing the percentage of the total
rentable area of the Building contained within the Premises.
The Excess. The amount by which Tenant's share of actual or estimated
Direct Expenses exceeds the Base Year Direct Expenses.
b. All payments required by this Article shall constitute additional rent.
c. Landlord shall endeavor to give to Tenant on or before the first day of
the third month following the end of the Base Year and of each Comparison Year a
statement (the "Statement") of:
i. The Direct Expenses for the preceding Base or Comparison Year;
ii. An estimate of the Direct Expenses for the current Comparison
Year;
iii. Either (1) the amount due from Tenant for Tenant's Share of the
actual Direct Expenses for the preceding year over the Base Year Direct
Expenses or, (2) if the payments by Tenant for the preceding year were in
excess of Tenant's Share of actual Direct Expenses over the Base Year
Direct Expenses, a statement of the refund due from Landlord to Tenant as
hereinafter provided.
Failure by Landlord to give the Statement by said date shall not constitute
a waiver by Landlord of any of its rights under this Article.
d. On the first day of each calendar month commencing on or after receipt
of the Statement, and continuing until revised in the next annual Statement,
Tenant shall pay to Landlord an amount equal to one-twelfth of the Landlord's
estimate of the Excess for the then current Comparison Year as set forth in the
Statement. In addition, on the first day of the first calendar month commencing
on or after receipt of the Statement, Tenant shall pay to Landlord: (i) the
Excess for the prior year (as reduced by all payments made by Tenant on account
of the estimated Excess for that prior year) plus (ii) one-twelfth of the
Landlord's estimate of the Excess for the then current Comparison Year times the
number of months in the current
2
6
Comparison Year which commenced prior to receipt of the Statement, less all
payments previously made by Tenant on account of the Excess for the current
Comparison Year. If the actual Excess payable by Tenant for any Comparison Year
as shown on a Statement is less than the payments made by Tenant on account of
the estimated Excess for that Comparison Year, the overpayment by Tenant shall,
so long as Tenant is not then in default and Landlord has no claim against
Tenant for any prior default, be credited towards the next monthly Base Rent
falling due. In no event, however, shall Tenant be entitled to a refund of the
amount, if any, by which the Base Year Direct Expenses exceeds Tenant's Share of
actual Direct Expenses.
e. If the Lease expires on other than the last day of a Comparison Year,
the amount of the Excess payable by Tenant for that year shall be prorated.
f. Even though the Term has expired or the Lease terminated and Tenant has
vacated the Premises, when the final determination is made of the Excess for the
Year in which this Lease terminates or for the preceding year, Tenant shall
immediately pay any unpaid portion of the Excess, and conversely, so long as
Tenant is not then in default and Landlord has no claim against Tenant for any
prior default, any overpayment shall be refunded by Landlord to Tenant.
g. The annual Statement shall be prepared in accordance with generally
accepted accounting practices, shall be certified by Landlord, and shall be
final and conclusive on both parties.
6. Interest and Late Charges. Tenant acknowledges that the late payment of
any installment of Base Rent or additional rent will cause Landlord to lose the
use of that money and incur costs and expenses not contemplated under this
Lease, including without limitation, administrative and collection costs and
processing and accounting expenses, the exact amount of which is extremely
difficult to ascertain. Therefore, if any installment of Base Rent or additional
rent is not received by Landlord within ten (10) days from the date it is due
and noticed, Tenant shall pay Landlord a late charge equal to ten percent (10%)
of such installment. Landlord and Tenant agree that this late charge represents
a reasonable estimate of such costs and expenses and is fair compensation to
Landlord for the loss suffered from such non-payment by Tenant. In addition, all
unpaid amounts shall bear interest beginning thirty days after they fall at the
Default Interest, but in no event higher than the maximum rate allowed by law.
Assessment or acceptance of any interest or late charge shall not constitute a
waiver of Tenant's default with respect to such nonpayment by Tenant nor prevent
Landlord from exercising any other rights or remedies available to Landlord
under this Lease.
7. Security Deposit. Upon execution of this Lease, Tenant agrees to
deposit with Landlord the Security Deposit in the amount set forth in Article
2.k, as security for Tenant's full and faithful performance of every provision
of this Lease. Landlord is not required to keep the Security Deposit separate
from its general funds, and Tenant is not entitled to interest on the deposit.
Tenant shall not mortgage, assign, transfer or encumber the Security Deposit
without the prior written consent of Landlord and any attempt by Tenant to do so
shall be void, without force or effect, and shall not be binding upon the
Landlord. If Tenant fully and faithfully performs every provision of this Lease
to be performed by it, the Security Deposit or any remaining balance thereof
shall be returned to Tenant (or, at Landlord's option, to the last assignee of
Tenant's interest hereunder) at the expiration of the Term and the surrender of
possession of the Premises to Landlord in accordance with Article 22.
8. Use of Premises by Tenant. Tenant shall continuously use and occupy the
Premises for Office and Research and for no other purpose whatsoever. Tenant
shall not use or occupy the Premises in violation of law or any covenant,
condition or restriction affecting the Building or Project or the certificate of
occupancy issued for the Building or Project, and shall, upon notice from
Landlord, immediately discontinue any use of the Premises which is declared by
any governmental authority having jurisdiction to be a violation of law or the
certificate of occupancy. Tenant, at Tenant's own cost and expense, shall comply
with all laws, ordinances, regulations, rules and/or any directions of any
governmental agencies or authorities having jurisdiction which shall, by reason
of the nature of Tenant's use or occupancy of the Premises, impose any duty upon
Tenant or Landlord with respect to the Premises or its use or occupation. A
judgment of any court of competent jurisdiction or the admission by Tenant in
any action or proceeding against Tenant that Tenant has violated any such laws,
ordinances, regulations, rules and/or directions in the use of the Premises
shall be deemed to be a conclusive determination of that fact as between
Landlord and Tenant. Tenant shall not do or permit to be
3
7
done anything which will invalidate or increase the cost of any fire, extended
coverage or other insurance policy covering the Building or Project and/or
property located therein, and shall comply with all rules, orders, regulations,
requirements and recommendations of any insurer or any governmental agency
having jurisdiction over the insurance business. Tenant shall promptly upon
demand reimburse Landlord for any additional premium charges for such policy by
reason of Tenant's failure to comply with the provision of this Article. Tenant
shall not do or permit anything to be done in or about the Premises which will
in any way obstruct or hereunder) at the expiration of the Term and the
surrender of possession of the Premises to Landlord in accordance with Article
22.
8. Use of Premises by Tenant. Tenant shall continuously use and occupy the
Premises for Office and Research and for no other purpose whatsoever. Tenant
shall not use or occupy the Premises in violation of law or any covenant,
condition or restriction affecting the Building or Project or the certificate of
occupancy issued for the Building of Project, and shall, upon notice from
Landlord, immediately discontinue any use of the Premises which is declared by
any governmental authority having jurisdiction to be a violation of law or the
certificate of occupancy. Tenant, at Tenant's own cost and expense, shall comply
with all laws, ordinances, regulations, rules and/or any directions of any
governmental agencies or authorities having jurisdiction which shall, by reason
of the nature of Tenant's use or occupancy of the Premises, impose any duty upon
Tenant or Landlord with respect to the Premises or its use or occupation. A
judgment of any court of competent jurisdiction or the admission by Tenant in
any action or proceeding against Tenant that Tenant has violated any such laws,
ordinances, regulations, rules and/or directions in the use of the Premises
shall be deemed to be a conclusive determination of that fact as between
Landlord and Tenant. Tenant shall not do or permit to be done anything which
will invalidate or increase the cost of any fire, extended coverage or other
insurance policy covering the Building or Project and/or property located
therein, and shall comply with all rules, orders, regulations, requirements and
recommendations of any insurer or any governmental agency having jurisdiction
over the insurance business. Tenant shall promptly upon demand reimburse
Landlord for any additional premium charges for such policy by reason of
Tenant's failure to comply with the provision of this Article. Tenant 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 tenants or occupants of the
Building or Project, or injure or annoy them, or use or allow the Premises to be
used for any improper, immoral, unlawful or objectionable purpose, nor shall
Tenant cause, maintain or permit any nuisance in, on or about the Premises.
Tenant shall not commit or suffer to be committed any waste in or upon the
Premises.
9. Parking. When not in default hereunder, Tenant shall be entitled, at no
additional cost or expense, to the exclusive use of seven designated covered
parking spaces at such locations as Landlord may from time to time select at the
Project.
10. Services and Utilities. Provided that Tenant is not in default
hereunder, Landlord agrees to furnish to the Premises during generally
recognized business days, and during hours determined by Landlord in its sole
discretion, and subject to the Rules and Regulations of the Building or Project,
electricity for normal desk top office equipment and normal copying equipment,
and heating, ventilation and air conditioning ("HVAC") as required in Landlord's
judgement for the comfortable use and occupancy of the premises. If Tenant
desires HVAC at any other time, Landlord shall use reasonable efforts to furnish
such service upon request from Tenant and Tenant shall pay Landlord's charges
therefor on demand. For pre-scheduled HVAC and electrical use in excess of fifty
hours per weekly period for the Premises, Tenant shall pay as additional monthly
rent an amount equivalent to the excess hourly usage times Thirty Two United
States Dollars ($32). For "on demand" supplemental HVAC use in excess of the
base 50 hours per week plus any pre-scheduled times, Tenant shall pay as
additional rent an amount equivalent to Two and 00/000 Xxxxxx Xxxxxx Dollars per
hour of usage per HVAC air handling unit. Landlord shall also maintain and keep
lighted the common stairs, common entries and rest-rooms in the Building.
Landlord shall not be in default hereunder or be liable for any damages directly
or indirectly resulting from, nor shall the rent be abated by reason of (a) the
installation, use or interruption of use of any equipment in connection with the
furnishing of any of the foregoing services (b) failure to furnish or delay in
furnishing any such services where such failure to delay is caused by accident
or any condition or event beyond the reasonable control of Landlord, or by the
making of necessary repairs or improvements to the Premises, Building or
Project. Landlord shall not be liable under any circumstances for a
4
8
loss of or injury to property or business, however occurring, through or in
connection with or incidental to failure to furnish any such services. If Tenant
uses heat generating machines, electronic data processing equipment, or
equipment in the Premises which affect the temperature otherwise maintained by
the HVAC system, Landlord reserves the right to install supplementary air
conditioning units in the Premises and the cost thereof, including the cost of
installation, operation and maintenance thereof, shall be paid by Tenant to
Landlord upon demand by Landlord.
Tenant shall not, without the written consent of Landlord, use any
apparatus or device in the Premises, including without limitation, electronic
data processing machines, photocopiers or machines using in excess of 220 volts,
which consume more electricity than is usually furnished or supplied for the use
of premises as general office space, as determined by the Landlord. Tenant shall
not consume water or electric current in excess of that usually furnished or
supplied for the use of Premises as general office space (as determined by
Landlord), without first procuring the written consent of Landlord, which
Landlord may refuse, and in the event of consent, Landlord may have installed a
water meter or electrical current meter in the Premises to measure the amount of
water or electric current consumed. The cost of any such meter and of its
installation, maintenance and repair shall be paid for by the Tenant and Tenant
agrees to pay to Landlord promptly upon demand, as additional rent, for all such
water and electric current consumed as shown by said meters, at the rates
charged for such services by the local public utility plus any additional
expense incurred in keeping account of the water and electric current so
consumed. If a separate meter is not installed, the excess cost for such water
and electric current shall be established by an estimate made by a utility
company or electrical engineer hired by Landlord at Tenant's expense.
Nothing contained in this Article shall restrict Landlord's right to
require at any time separate metering of utilities furnished to the Premises. In
the event utilities are separately metered, Tenant shall pay promptly upon
demand for all utilities consumed at utility rates charged by the local public
utility plus any additional expense incurred by Landlord in keeping account of
the utilities so consumed. Tenant shall be responsible for the maintenance and
repair of any such meter at its sole cost.
Provided that Tenant is not in default hereunder, Landlord agrees to
furnish janitorial and cleaning services to the Premises at least five (5) days
per week, except recognized federal, state and local holidays. Tenant shall pay
to Landlord, within five (5) business days after receipt of Landlord's xxxx, the
reasonable costs incurred by Landlord for extra cleaning in the Premises
required because of (a) misuse or neglect on the part of Tenant, its employees
or invitees, (b) use of portions of the Premises for special purposes requiring
greater or more difficult cleaning work than office areas, (c) interior glass
partitions or unusual quantities of glass surfaces, (d) non-building standard
materials or finishes installed by Tenant, and (e) removal from the premises of
refuse and rubbish of Tenant in excess of that ordinarily accumulated in general
office occupancy or at times other than landlord's standard cleaning times.
11. Taxes Payable by Tenant. In addition to all other rents and any other
charges to be paid by Tenant hereunder, Tenant shall pay Landlord, as additional
rent, a sum equal to the aggregate of any municipal, city, county, state or
federal excise, sales, use or transaction privilege taxes now or hereafter
levied or imposed, directly or indirectly, against or on account of the amounts
payable hereunder or the receipts thereof by Landlord, which sum shall be paid
with each installment of rent or additional rent. Tenant also shall reimburse
Landlord upon demand for any and all taxes payable by Landlord (other than net
income taxes) which are not otherwise reimbursable under this Lease, whether or
not now customary or within the contemplation of the parties, where such taxes
are imposed upon, measured by or reasonably attributable to: (a) the cost or
value of Tenant's equipment, furniture, fixtures and other personal property
located in the Premises, or the cost or value of any leasehold improvements made
in or on the Premises by or for Tenant, other than Building Standard Work made
by Landlord, regardless of whether title to such improvements is held by Tenant
or Landlord; (b) the gross or net rent payable under this Lease, including,
without limitation, any rental or gross receipts tax levied by any taxing
authority with respect to the receipt of the rent hereunder; (c) the possession,
leasing, operation, management, maintenance, alteration, repair, use or
occupancy by Tenant of the Premises or any portion thereof; or (d) this
transaction or any document to which Tenant is a party creating or transferring
an interest or any estate in the Premises. If it becomes unlawful for Tenant to
reimburse Landlord for any costs as required under this Lease, the Base Rent
shall be revised to net Landlord the same net rent
5
9
after imposition of any tax or other charge upon Landlord as would have been
payable to Landlord but for the reimbursement being unlawful.
12. Condition of the Premises. Tenant's taking of possession of the
Premises shall be deemed conclusive evidence that as of the date of taking
possession the Premises are in good order and satisfactory condition except for
such matters as to which Tenant gave Landlord notice or before the Commencement
Date. No promise of Landlord to alter, remodel, repair or improve the Premises,
the Building or the Project and no representation, express or implied respecting
any matter or thing relating to the Premises, Building, Project or this Lease
(including without limitation the condition of the Premises, the Building or the
Project) have been made to Tenant by Landlord or its broker or sales agent other
than as may be contained herein or in a separate exhibit or addendum signed by
Landlord and Tenant.
13. Repairs and Maintenance. Tenant shall, at Tenant's sole cost and
expense, keep the Premises and every part thereof in good condition and repair,
damage thereto from causes beyond the control of Tenant (and not caused by any
act or omission of Tenant's agents, officers, employees, contractors, servants,
invitees, licensees or guests) and ordinary wear and tear excepted. If Tenant
does not make such repairs, Landlord may make such repairs and replacements, and
Tenant shall pay Landlord the costs thereof upon receipt of a statement
therefor. Tenant shall, upon the expiration or sooner termination of this Lease,
surrender the Premises to Landlord in good condition, ordinary wear and tear and
damage from causes beyond the control of Tenant (and not caused by any act or
omission of Tenant's agents, officers, employees, contractors, servants,
licensees, invitees or guests) excepted. Except as specifically provided in an
addendum, if any, to this Lease, Landlord shall have no obligation whatsoever to
alter, remodel, improve, repair, decorate or paint the Premises or any part
thereof and the parties hereto affirm that Landlord has made no representations
to Tenant respecting the condition of the Premises or the Building except as
specifically herein set forth.
Notwithstanding the provisions hereinabove, Landlord shall repair and
maintain the structural portions of the Building, including the basic plumbing,
air conditioning, heating, and electrical systems installed or furnished by
Landlord, unless such maintenance or repairs are caused in part or in whole by
the act, neglect, fault or omission of any duty by the Tenant, its agents,
officers, employees, contractors, servants, licensees, invitees or guests, in
which case Tenant shall pay to Landlord the reasonable cost of such maintenance
or repairs. Landlord shall not be liable for any failure to make any such
repairs or to perform any maintenance for which Landlord is responsible as
provided above unless such failure shall persist for an unreasonable time after
the written notice of the need of such repairs or maintenance is given to
Landlord by Tenant and is due solely to causes within Landlord's reasonable
control. Actual notice shall not be a substitute for written notice hereunder.
In any event there shall be no liability of Landlord by reason of any injury to
or interference with Tenant's business arising from the making of any repairs,
alterations or improvements in or to any portion of the Building or the Premises
or in or to fixtures, appurtenances and equipment therein. Tenant waives the
right to make repairs at Landlord's expense under any law, statute or ordinance
now or hereafter in effect. Landlord may enter the Premises at all reasonable
times to make any repairs Landlord deems necessary or desirable or as Landlord
may be required to do by any governmental authority.
14. Fire or Casualty. In the event less than ten percent (10%) of the
Premises or the Building is damaged by fire or other perils covered by the
extended coverage insurance carried by Landlord for the Building, Landlord
agrees to repair the same with reasonable promptness and this Lease shall remain
in full force and effect, except that Tenant shall be entitled to a
proportionate reduction of the rent while such repairs are being made, such
proportionate reduction to be based upon the extent to which the making of such
repairs shall materially interfere with the business carried on by the Tenant in
the Premises. If the damage is due to the fault or neglect of Tenant, or its
agents, officers, employees, contractors, servants, invitees, licensees or
guests, there shall be no reduction or abatement of rent.
In the event more than ten percent (10%) of the Premises is damaged by any
perils covered or not covered by the extended coverage insurance carried by
Landlord for the Building, Tenant shall have the right to give notice to
Landlord, at any time within 30 days after such damage, terminating this Lease
as of the date specified in such notice, which date shall be no less than 30 and
no more than 60 days after the giving of such notice. In the event of giving
such notice, this Lease shall expire and all interest of the Tenant in the
Premises
6
10
shall terminate on the date so specified in such notice and the rent, reduced by
a proportionate amount based upon the extent, if any, to which such damage has
materially interfered with the business carried on by Tenant in the Premises,
shall be paid up to the date of such termination.
In the event the Premises or the Building is damaged as a result of any
cause other than the perils covered by the fire and extended coverage insurance
carried by Landlord on the Building, then Landlord shall forthwith repair the
same, provided the extent of the destruction be less than ten percent (10%) of
the then full replacement cost of the Premises or the Building, as applicable.
In the event the destruction of the Premises or the Building is to an extent
greater than ten percent of the full replacement cost thereof, then Landlord
shall have the option: (a) to repair or restore such damage, this Lease
continuing in full force and effect, but the rent to be proportionately reduced
as provided above; or (b) to give notice to Tenant at any time within 60 days
after such damage terminating this Lease as of the date specified in such
notice, which date shall be no less than 30 and no more than 60 days after the
giving of such notice. In the event of giving such notice, this Lease shall
expire and all interest of the Tenant in the Premises shall terminate on the
date so specified in such notice and the rent, reduced by a proportionate amount
based upon the extent, if any, to which such damage has materially interfered
with the business carried on by Tenant in the Premises, shall be paid up to the
date of such termination.
Notwithstanding anything to the contrary contained in this Article or any
other Articles, Landlord shall not have any obligation whatsoever to repair,
reconstruct, or restore the Premises when any damage thereto or to the Building
occurs during the last 12 months of the term of this Lease or any extension
thereof; provided, however, that Landlord shall not be relieved of the
obligation to perform such routine maintenance as is provided elsewhere in this
Lease. Landlord shall not be required to repair any injury or damage by fire or
other cause, or to make any repairs or replacements, of any panels, decoration,
office fixtures, furniture, railings, floor coverings, partitions, or any other
property installed or placed in the Premises by Tenant.
Tenant shall not be entitled to any compensation or damages from Landlord
for loss of the use of the whole or any part of the Premises, for damage to or
loss of any of Tenant's fixtures or personal property, or for any damage to
Tenant's business, or any inconvenience or annoyance occasioned by such damage,
or by any repair, reconstruction or restoration by Landlord, or by any failure
of Landlord to make any repairs, reconstruction or restoration under this
Article or any other provision of this Lease.
With respect to damage which Landlord is obligated or elects to repair,
Tenant shall continue to be liable to pay rent and shall not be entitled to quit
and surrender possession of the Premises except as specifically provided in this
Article.
15. Alterations and Additions. Tenant shall not make any additions,
alterations or improvements to the Premises without Landlord's prior written
consent. All work with respect to any addition, alteration or improvement shall
be done in a good and workmanlike manner by properly qualified and licensed
personnel approved by Landlord, and such work shall be diligently prosecuted to
completion. Landlord may, at Landlord's option, require that any such work be
performed by Landlord's contractor, in which case the cost of such work shall be
paid for before commencement of the work. Tenant shall pay to Landlord upon
completion of any such work by Landlord's contractor, an administrative fee of
ten percent (10%) of the cost of the work.
Tenant shall pay the costs of any work done on the Premises pursuant to
this Article and shall keep the Premises, Building and Project free and clear of
liens of any kind. Tenant shall indemnify, defend against and keep Landlord free
and harmless from all liability, loss, damage, costs, attorney's fees and any
other expenses incurred on account of claims by any person performing work or
furnishing materials or supplies for Tenant or any person claiming under Tenant.
Tenant shall keep Tenant's leasehold interest, and any additions or
improvements which are or become the property of Landlord under this Lease, free
and clear of all attachment or judgment liens. Before the actual commencement of
any work for which a claim or lien may be filed, Tenant shall give Landlord
notice of the intended commencement date a sufficient time before that date to
enable Landlord to post notices of non-responsibility or any other notices which
Landlord deems necessary for the proper protection of Landlord's
7
11
interest in the Premises, Building or the Project, and Landlord shall have the
right to enter the Premises and post such notices at any reasonable time.
Landlord may require, at Landlord's sole option, that Tenant provide to
Landlord, at Tenant's expense, a performance and payment bond in an amount equal
to at least one and one-half (1 1/2) times the total estimated cost of any
additions, alterations or improvements to be made in or to the Premises, to
protect Landlord against any liability for mechanics' and materialmen's liens
and to insure timely completion of the work. Nothing contained in this Article
shall relieve Tenant of its obligation under this Article to keep the Premises,
Building and Project free of all liens.
16. Leasehold Improvements, Tenant's Property. All fixtures, equipment,
improvements and appurtenances attached to or built into the Premises at the
commencement of or during the term, whether or not by or at the expense of
Tenant ("Leasehold Improvements"), shall be and remain a part of the Premises,
shall be the property of Landlord and shall not be removed by Tenant, except as
expressly provided in this Article or Article 22.
All movable partitions, business and trade fixtures, machinery and
equipment, communications equipment and office equipment located in the Premises
and acquired by or for the account of Tenant, without expense to Landlord, which
can be removed without structural damage to the Building, and all furniture,
furnishings and other articles of movable personal property owned by Tenant and
located in the Premises (collectively "Tenant Property") shall be and shall
remain the property of Tenant and may be removed by Tenant at any time during
the Term; provided that if any of Tenant's property is removed, Tenant shall
promptly repair any damage to the Premises or to the Building resulting from
such removal.
17. Hazardous Materials.
a. For the purposes of this Article, the following definition shall apply:
Hazardous Materials Laws: Any and all federal, state, local,
ordinances, rules, decrees, orders, regulations or court decisions
(including the so called "common-law") relating to hazardous substances,
hazardous materials, hazardous waste, toxic substances, environmental
conditions on, under or about the Premises, or soil and ground water
conditions, including, but not limited to, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 ("CERCLA"), as amended, 42
U.S.C. sec.9601, et seq., the Resource Conservation and Recovery Act
("RCRA"), 42 U.S.C. sec.6901, et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. sec.1801, et seq., any amendments to the
foregoing, and any similar federal, state or local laws, ordinances, rules
decrees, orders or regulations.
Hazardous Materials: Any chemical, compound, material, substance or
other matter that: (i) is a flammable explosive, asbestos, radioactive
material, nuclear medicine material, drug, vaccine, bacteria, virus,
hazardous waste, toxic substance, petroleum product, or related injurious
or potentially injurious material, whether injurious or potentially
injurious by itself or in combination with other materials; (ii) is
controlled, designated in or governed by any Hazardous Materials Law; (iii)
gives rise to any reporting, notice or publication requirement under any
Hazardous Materials Law; or (iv) gives rise to any liability,
responsibility or duty on the part of Tenant or Landlord with respect to
any third person under any Hazardous Materials Law.
b. Tenant shall not allow any Hazardous Material to be used, generated,
released, stored or disposed of on, under or about, or transported from, the
Premises, the Building or the Project, unless: (i) such uses is specifically
disclosed to and approved by Landlord in writing prior to such use; and (ii)
such uses is conducted in compliance with the provisions of this Article.
Landlord may approve such use subject to reasonable conditions to protect the
Premises, the Building or the Project, and Landlord's interests. Landlord may
withhold approval if Landlord determines that such proposed use involves a
material risk of a release or discharge of Hazardous Materials or a violation of
any Hazardous Materials Laws or that Tenant has not provided reasonable
assurances of its ability to remedy such a violation and fulfill its obligation
under this Article.
8
12
c. Tenant shall strictly comply with, and shall maintain the Premises in
compliance with, all Hazardous Materials laws. Tenant shall obtain and maintain
in full force and effect all permits, licenses and other governmental approvals
required for Tenant's operations on the Premises under any Hazardous Materials
Laws and shall comply with all terms and conditions thereof. At Landlord's
request, Tenant shall deliver copies of, or allow Landlord to inspect, all such
permits, licenses and approvals. Tenant shall perform any monitoring,
investigation, clean-up, removal and other remedial work (collectively,
"Remedial Work") required as a result of any release or discharge of Hazardous
Materials affecting the Premises, the Building or the Project, or any violation
of Hazardous Materials Laws by Tenant or any assignee or sublessee of Tenant or
their respective agents, contractors, employees, licensees, or invitees.
Landlord shall have the right to intervene in any governmental action or
proceeding involving any Remedial Work, and to approve performance of the work,
in order to protect Landlord's interest.
d. Tenant shall comply with the requirements of Landlord's and Tenant's
respective insurers regarding Hazardous Materials and with such insurer's
recommendations based upon prudent industry practices regarding management of
Hazardous Materials.
e. Tenant shall notify Landlord, in writing, within two (2) days after any
of the following: (i) a release or discharge of any Hazardous Material, whether
or not the release or discharge is in quantities that would otherwise be
reportable to a public agency; (ii) Tenant's receipt of any order of a
governmental agency requiring any Remedial Work pursuant to any Hazardous
Materials Laws; (iii) Tenant's receipt of any warning, notice of inspection,
notice of violation or alleged violation, or Tenant's receipt of notice or
knowledge of any proceeding, investigation of enforcement action, pursuant to
any Hazardous Materials Laws; or (iv) Tenant's receipt of notice or knowledge of
any claims made or threatened by any third party against Tenant or the Premises,
the Building or the Project, relating to any loss or injury resulting from
Hazardous Materials. Tenant shall deliver to Landlord copies of all test
results, reports and business or management plans required to be filed with any
governmental agency pursuant to any Hazardous Materials laws.
f. Upon the termination of this Lease, Tenant shall remove any equipment,
improvements or storage facilities utilized in connection with any Hazardous
Materials and shall clean-up, detoxify, repair and otherwise restore the Leased
Premises to a condition free of Hazardous Materials.
g. Tenant shall protect, indemnify, defend and hold Landlord harmless from
and against, and shall be responsible for, any and all claims, costs, expenses,
suits, judgements, actions, investigations, proceedings and liabilities arising
out of or in connection with any breach of any provisions of this Article or
directly or indirectly arising out of the uses, generation, storage, release,
disposal or transportation of Hazardous Materials by Tenant or any sublessee or
assignee of Tenant, or their respective agents, contractors, employees,
licensees, or invitees, on, under or about the Premises, the Building or the
Project during the Term or Tenant's occupancy of the Premises, including, but
not limited to, all foreseeable and unforeseeable consequential damage and the
cost of any Remedial Work. Neither the consent by Landlord nor the use,
generation, storage, release, disposal or transportation of Hazardous Materials
nor the strict compliance with all Hazardous Material Laws shall excuse Tenant
from Tenant's indemnification obligations pursuant to this Article. The
foregoing indemnity shall be in addition to and not a limitation of the
indemnification provision of Article 24 of this Lease. Tenant's obligation
pursuant to this Article shall survive the termination or expiration of this
Lease.
h. If Landlord's consent is required for an assignment of this Lease or a
subletting of the Premises, Landlord shall have the right to refuse such consent
if the possibility of a release of Hazardous Materials is materially increased
as a result of the assignment or sublease or if Landlord does not receive
reasonable assurances that the new tenant has the experience and the financial
ability to remedy a violation of the Hazardous Materials Laws and fulfill its
obligations under this Article.
i. Landlord and its agents, employees and contractors, shall have the
right, but not the obligation, to enter the Premises at all reasonable times to
inspect the Premises and Tenant's compliance with the terms and conditions of
this Article, or to conduct investigations and tests. No prior notice to Tenant
shall be required in the event of an emergency, or if Landlord has reasonable
cause to believe that violations of this Article have occurred, or if Tenant
consents at the time of entry. In all other cases, Landlord shall give at least
twenty-four
9
13
(24) hours prior notice to Tenant. Landlord shall have the right, but not the
obligation, to remedy any violation by Tenant of the provision of this Article
or to perform any Remedial Work which is necessary or appropriate as a result of
any governmental order, investigation or proceeding. Tenant shall pay, upon
demand, as additional rent, all costs incurred by Landlord in remedying such
violations or performing all Remedial Work, plus interest thereon at the Default
Interest from the date of demand until the date received by Landlord.
j. The release or discharge of any Hazardous Material or the violation of
any Hazardous Materials Laws shall constitute an event of default by Tenant
under this Lease. In addition to and not in lieu of the remedies available under
this Lease as a result of such event of default, Landlord shall have the right,
without terminating this Lease, to require Tenant to suspend its operations and
activities on the Premises until Landlord is satisfied that appropriate Remedial
Work has been or is being adequately performed and Landlord's election to this
remedy shall not constitute a waiver of Landlord's right thereafter to pursue
the other remedies set forth in this Lease.
18. Rules and Regulations. Tenant shall faithfully observe and comply with
the rules and regulations attached to this Lease as Exhibit "E" and such other
reasonable rules and regulations as Landlord may from time to time promulgate.
Landlord reserves the right from time to time to make reasonable modifications
to said rules. The additions and modifications to those rules shall be binding
upon Tenant upon delivery of a copy of them to Tenant. Landlord shall not be
liable to Tenant for the nonperformance of any said rules and regulations by any
other tenants or occupants of the Building.
19. Certain Rights Reserved to the Landlord. Landlord reserves the
following rights, exercisable without liability to Tenant for (i) damage or
injury to property, person or business, (ii) causing an actual or constructive
eviction from the premises, or (iii) disturbing Tenant's use or possession of
the Premises:
a. To name the Building and Project and to change the name or street
address of the Building or Project;
b. To install and maintain all signs on the exterior and interior of
the Building and Project;
c. To have master keys to the Premises and all doors within the
Premises, excluding Tenant's vaults and safes;
d. At any time during the Term, and on reasonable prior notice to
Tenant, to inspect the Premises, and to show the Premises to any
prospective purchaser or mortgagee of the Project, or to any assignee of
any mortgage on the Project, or to others having an interest in the Project
or Landlord, and during the last six months of the Term, to show the
Premises to prospective tenants thereof; and
e. To enter the Premises for the purpose of making inspections,
repairs, alterations, additions or improvements to the Premises or the
Building (including, without limitation, checking, calibrating, adjusting
or balancing controls and other parts of the HVAC system), and to take all
steps as may be necessary or desirable for the safety, protection,
maintenance or preservation of the Premises or the Building or Landlord's
interest therein, or as may be necessary or desirable for the operation or
improvement of the Building or in order to comply with laws, orders, or
requirements of governmental or other authority. Landlord agrees to use its
best efforts (except in an emergency) to minimize interference with
Tenant's business in the Premises in the course of any such entry;
f. To designate and/or approve, prior to installation, any type of
window shades, blinds, drapes, awnings, window ventilators or other similar
equipment and to control all internal lighting that may be visible from the
Building's exterior;
g. To designate, limit, restrict and/or control any business and any
service in or to the Building and its tenants;
h. To decorate, repair, alter, add to or improve structurally or
otherwise, the Building or any part thereof and to enter the Premises for
such purposes and, during the continuance of such work, to temporarily
close doors, entryways, public space and corridors in the Building and to
interrupt or
10
14
temporarily suspend Building services and facilities, so long as the
Premises are reasonably accessible by Tenant;
i. To grant to anyone the exclusive right to conduct a business or
render a service in or to the Building, provided such exclusive right does
not operate to exclude Tenant from the use expressly permitted herein;
j. To require that moving of furniture and similar items in and out of
the Building and the Premises be only at such times and in such manner as
Landlord directs in writing. Movement of Tenant's property in or out of the
Building and within the Building is entirely at Tenant's risk and
responsibility and Landlord reserves the right to require permits before
allowing such property to be moved in or out of the Building;
k. To require Tenant to obtain Landlord's written approval before
vending or dispensing machines of any kind are placed in or about the
Premises;
l. To have access for itself and Building tenants to mail chutes
located on the Premises according to the rules of the United States Postal
Service;
m. To permit Landlord and its agents to enter the Premises at all
reasonable times to examine or inspect the same, to show the same to
prospective purchasers or lessees, and to make such alterations, repairs,
improvements or additions to the Premises or to the Building as Landlord is
required or permitted to do under the terms of this Lease. If Tenant is not
personally present to open and permit entry into the Premises when
Landlord's entry is necessary or permitted hereunder, Landlord may enter by
means of a master key or may enter forcibly, without liability to Tenant
except for failure to exercise due care for Tenant's property, and without
breaching the terms of this Lease.
20. Assignment and Subletting. No assignment of this Lease by Tenant or
sublease of all or any part of it shall be permitted except as provided in this
Article. Tenant shall not, without the prior written consent of Landlord, assign
or hypothecate this Lease or any interest herein or sublet the Premises or any
part thereof, or permit the use of the Premises by any party other than Tenant.
Any of the foregoing acts without such consent shall be void and shall, at the
option of the Landlord, terminate this Lease. This Lease shall not, nor shall
any interest of Tenant herein, be assignable by operation of law without the
written consent of Landlord.
If at any time or from time to time during the Term, Tenant desires to
assign this Lease or sublet all or any part of the Premises, Tenant shall given
notice to Landlord setting forth the terms and provisions of the proposed
assignment or sublease, and the identity of the proposed assignee or subtenant.
Tenant shall promptly supply Landlord with such information concerning the
business background and financial condition of such proposed assignee or
subtenant as Landlord may reasonably request. Tenant thereafter may assign the
Lease or sublet such space to such proposed assignee or subtenant if and only if
all of the following conditions are satisfied;
a. Landlord shall have given its written consent to the assignment or
sublease, which consent shall not be unreasonably withheld;
b. The assignment or sublease shall be on the same terms set forth in
the notice given to Landlord;
c. No assignment or sublease shall be valid and no assignee or
sublessee shall take possession of the Premises until an executed
counterpart of such assignment or sublease has been delivered to Landlord;
d. No assignee or sublessee shall have a further right to assign or
sublet except on the terms herein contained; and
e. Any sums or other economic consideration received by Tenant from
time to time as a result of such assignment or subletting, however
denominated under the assignment or sublease, which exceed, in the
aggregate (i) the total sums which Tenant is obligated to pay Landlord
under this Lease (prorated to reflect obligations allocable to any portion
of the Premises subleased), plus (ii) any real estate brokerage commission
or fees payable in connection with such assignment or subletting, shall be
paid to Landlord as
11
15
additional rental under this Lease without affecting or reducing any other
obligations of Tenant hereunder.
Notwithstanding the foregoing, Tenant may assign this Lease or sublet the
Premises or any portion thereof, without Landlord's consent to any corporation
which controls, is controlled by or is under common control with Tenant, or to
any corporation resulting from a merger or consolidation with Tenant, provided
that (i) the assignee or sublessee assumes, in full, the obligations of Tenant
under this Lease, (ii) Tenant remains fully liable under this Lease, and (iii)
the use of the Premises under Article 8 remains unchanged.
No subletting or assignment shall release Tenant of Tenant's obligations
under this Lease or alter the primary liability of Tenant to pay the rent and to
perform all other obligations to be performed by Tenant hereunder. The
acceptance of rent by Landlord from any other person shall not be deemed to be a
waiver by Landlord 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 assignee or subtenant of Tenant or any
successor of Tenant in the performance of any of the terms hereof, Landlord may
proceed directly against Tenant without the necessity of exhausting remedies
against such assignee, subtenant or successor. Landlord may consent to
subsequent assignments of the Lease or sublettings or amendments or
modifications to the Lease with assignees of Tenant, without notifying Tenant,
or any successor of Tenant, and without obtaining its or their consent thereto
and any such actions shall not relieve Tenant of liability under this Lease.
For purposes of this Article, any transfer or transfers of ownership or
control of Tenant (if Tenant is not an individual and is not a corporation whose
shares are publicly traded on a national stock exchange) resulting, in the
aggregate, in the ownership or control by persons not shareholders, partners, or
joint ventures with Tenant as of the execution of this Lease of more than a 25%
interest in Tenant shall constitute an assignment of this Lease.
21. Holding Over. Tenant shall not, without Landlord's prior written
consent, hold over after the termination or expiration of this Lease. If Tenant
holds over with Landlord's prior written consent, the tenancy shall be from
month-to-month terminable upon ten days notice by Landlord and upon thirty days
notice by Tenant. Any holdover without Landlord's prior written consent shall be
a tenancy at will terminable upon demand for possession regardless of whether
any rental has been paid in advance. In either event, Tenant shall comply with
all of the terms of this Lease, including the payment of all additional rent,
except that the Base Rent shall be 125% of the Base Rent, as adjusted,
immediately prior to expiration or termination of this Lease.
22. Surrender of Premises. Upon expiration or termination of this Lease or
upon the termination of Tenant's right of possession, whether by lapse of time
or at the Landlord's option as herein provided, Tenant shall immediately
surrender possession of the Premises to Landlord and remove all of its property
therefrom as permitted or required hereunder, and if such possession is not
immediately surrendered, Landlord may re-enter the Premises and remove all
persons and property therefrom. Without limiting the generality of the
foregoing, Tenant agrees to remove at the termination of this Lease all personal
property to which Tenant is entitled under Article 16 hereof, together with any
Leasehold Improvements Landlord designates in writing to be removed. All damage
to the Premises or the Building arising from Tenant's moving of property in or
out of the Building including damage to floors due to overloading, shall be
fully repaired at Tenant's sole expense. If Tenant fails or refuses to remove
any such property from the Premises, Tenant shall be conclusively presumed to
have abandoned the same, and title thereto shall thereupon pass to Landlord
without cost, set-off, credit allowance or otherwise, and Landlord may accept
title to such property, or at Tenant's expense, remove it or any part thereof in
any manner that Landlord shall choose and store or dispose of it without
incurring liability to Tenant or any other person.
Neither surrender of this Lease by Tenant nor a mutual cancellation thereof
shall cause a merger, but rather shall, at Landlord's option, operate to
terminate any or all subleases or subtenancies or operate as an assignment to
Landlord of any or all of such subleases or subtenancies.
23. Eminent Domain. If the whole of the Building or Premises is lawfully
taken by condemnation or in any other manner for any public or quasi-public
purpose, this Lease shall terminate as of the date of such taking, and rent
shall be prorated to such date. If less than the whole of the Building or
Premises is so taken,
12
16
this Lease shall be unaffected by such taking, provided that (a) Tenant shall
have the right to terminate this Lease by notice to Landlord given within ninety
(90) days after the date of such taking if twenty percent (20%) or more of the
Premises is taken and the remaining areas of the Premises is not reasonably
sufficient for Tenant to continue operation of its business; and (b) Landlord
shall have the right to terminate this Lease by notice to Tenant given within
ninety (90) days after the date of such taking. If either Landlord or Tenant so
elects to terminate this Lease, the Lease shall terminate on the thirtieth
(30th) day after either such notice. The rent shall be prorated to the date of
termination. If this Lease continues in force upon such partial taking, the Base
Rent and Tenant's proportionate Share of Direct Expenses shall be equitably
adjusted according to the remaining rentable area of the Premises and the
Building.
In the event of any taking, partial or whole, all of the proceeds of any
award, judgment or settlement payable by the condemning authority shall be the
exclusive property of Landlord, and Tenant hereby assigns to Landlord all of its
right, title and interest in any award, judgment or settlement from the
condemning authority. Tenant, however, shall have the right, to the extent that
Landlord's award is not reduced or prejudiced, to claim from the condemning
authority (but not from Landlord) such compensation as may be recoverable by
Tenant in its own right for relocation expenses and damages to Tenant's personal
property.
In the event of a partial taking of the Premises which does not result in a
termination of this Lease, Landlord shall restore the remaining portion of the
Premises as nearly as practicable to its condition prior to the condemnation or
taking, but only to the extent of building standard work. Tenant shall be
responsible at its sole cost and expense for the repair, restoration and
replacement of any other Leasehold improvements and Tenant's Property.
24. Indemnification. Tenant shall defend, indemnify and hold Landlord
harmless, regardless of any negligence which may be imputed or charged to
Landlord as the owner of real property alleged to be dangerous or defective,
from and against any and all claims arising out of (a) Tenant's use of the
Premises or any part thereof or the conduct of its business, or (b) any
activity, work or other thing done, permitted or suffered by Tenant in or about
the Building or the Premises, or any part thereof, or (c) any breach or default
in the performance of any obligation on Tenant's part to be performed under the
terms of this Lease, or (d) any act or negligence of the Tenant, or any officer,
agent, employee, contractor, servant, licensee, invitee or guest of Tenant, and
in each case from and against any and all damages, losses, liabilities,
lawsuits, judgments, and costs and expenses (including without limitation expert
witness fees and reasonable attorneys' fees) arising in connection with any such
claim or claims as described in clauses (a) through (d) above, or any action or
proceeding brought thereon. If any such action or proceeding be brought against
Landlord, Tenant upon notice from Landlord shall defend the same at Tenant's
sole expense by counsel reasonably satisfactory to Landlord. Tenant as a
material part of the consideration to Landlord hereby assumes all risk of damage
or loss to property or injury or death to persons, in, upon or about the
Premises, from any cause other than Landlord's sole and active negligence, and
Tenant hereby waives all claims in respect thereof against Landlord.
Landlord or its agents shall not be liable for any damage or loss to
property entrusted to employees of the Building, nor for loss or damage to any
property by theft or otherwise, nor for any injury to or death of or damage or
loss to persons or property resulting from any accident, casualty or condition
occurring in or about the Building or the Premises, or any part thereof, or any
equipment, appliances or fixtures therein, or from any other cause whatsoever,
unless caused solely by the active negligence of Landlord, its agents, servants
or employees.
25. Tenant's Insurance. All insurance required to be carried by Tenant
hereunder shall be issued by responsible insurance companies acceptable to
Landlord and Landlord's Lender and qualified to do business in the State. Each
policy, except the worker's compensation insurance policy, shall name Landlord,
and at Landlord's request any mortgagee of Landlord, as an additional insured,
as their respective interests may appear. Each policy shall contain (a) a
cross-liability endorsement, (b) a provision that such policy and the coverage
evidenced thereby shall be primary and non-contributing with respect to any
policies carried by Landlord and that any coverage carried by Landlord shall be
excess insurance. A copy of each paid up policy (authenticated by the insurer)
or certificate of the insurer evidencing the existence and amount of each
13
17
insurance policy required hereunder shall be delivered to Landlord before the
date Tenant is first given the right of possession of the Premises, and
thereafter within thirty (30) days after any demand by Landlord therefor.
Landlord may, at any time and from time to time, inspect and/or copy any
insurance policies required to be maintained by Tenant hereunder. No such policy
shall be cancelable except after twenty (20) days written notice to Landlord and
Landlord's Lender. Tenant shall furnish Landlord with renewals or "binders" of
any such policy at least ten (10) days prior to the expiration thereof. Tenant
agrees that if Tenant does not take out and maintain such insurance, Landlord
may (but shall not be required to) procure said insurance on Tenant's behalf and
charge the Tenant the premiums together with a twenty-five (25%) handling
charge, payable upon demand. Tenant shall have the right to provide such
insurance coverage pursuant to blanket policies obtained by the Tenant, provided
such blanket policies expressly afford coverage to the Premises, Landlord,
Landlord's mortgagee and Tenant as required by this Lease.
Beginning on the date Tenant is given access to the Premises for any
purpose and continuing until expiration of the Term, Tenant shall procure, pay
for and maintain in effect policies of casualty insurance covering (i) all
Leasehold Improvements (including any alterations, additions or improvements as
may be made by Tenant pursuant to the provisions of Article 16 hereof), and (ii)
trade fixtures, merchandise and other personal property from time to time in, on
or about the Premises, in an amount not less than one hundred percent (100%) of
their actual replacement cost from time to time, providing protection against
any peril included with the classification "Fire and Extended Coverage" together
with insurance against sprinkler damage, vandalism and malicious mischief. The
proceeds of such insurance shall be used for the repair or replacement of the
property so insured. Upon termination of this Lease following a casualty as set
forth herein, the proceeds under (i) above shall be paid to Landlord, and the
proceeds under (ii) above shall be paid to Tenant.
Beginning on the date Tenant is given access to the Premises for any
purpose and continuing until expiration of the Term, Tenant shall procure, pay
for and maintain in effect workers' compensation insurance as required by law
and comprehensive general liability and property damage insurance with respect
to the construction of improvements on the Premises, the use, operation or
condition of the Premises and the operations of Tenant in, on or about the
Premises, providing personal injury and broad form property damage coverage for
not less than One Million Dollars ($1,000,000.00) combined single limit for
bodily injury, death and property damage liability.
Not less than every three (3) years during the Term, Landlord and Tenant
shall mutually agree to increases in all of Tenant's insurance policy limits for
all insurance to be carried by Tenant as set forth in this Article. In the event
Landlord and Tenant cannot mutually agree upon the amounts of said increases,
then Tenant agrees that all insurance policy limits as set forth in this Article
shall be adjusted for increases in the cost of living.
26. Landlord's Insurance. Landlord covenants and agrees that throughout
the Term it will insure the Building (excluding any property with respect to
which Tenant is obligated to insure pursuant to the provisions of Article 25
against damage by fire and standard extended coverage perils and public
liability insurance in such reasonable amounts with such reasonable deductibles
as would be carried by a prudent owner of a similar building in the geographic
area in which the Building is situated. In addition, Landlord may keep and
maintain in full force and effect during the Term, rental income insurance
insuring Landlord against abatement or loss of rent, including items of
additional rent, in case of fire or other casualty similarly insured against, in
an amount at least equal to the Annual Fixed rent during one calendar year
hereunder. Landlord may, but shall not be obligated to, take out and carry any
other form or forms of insurance as it or the mortgagee or ground lessors (if
any) of Landlord may reasonably determine advisable. Notwithstanding any
contribution by Tenant to the cost of insurance premiums as provided herein,
Tenant acknowledges that it has no right to receive any proceeds from any such
insurance policies carried by Landlord, although Landlord shall use such
proceeds in the repair and reconstruction of the Building and the Premises
unless the provisions of Article 14 above shall apply. Landlord will not carry
insurance of any kind on Tenant's furniture or furnishings, 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 to replace the
same.
14
18
27. Waiver of Subrogation. Landlord and Tenant each hereby waive all
rights of recovery against the other and against the officers, employees, agents
and representatives of the other, on account of loss by or damage to the waiving
party or its property or the property of others under its control, to the extent
that such loss or damage is insured against and under any fire and extended
coverage insurance policy which either may have in force at the time of the loss
or damage. Tenant shall, upon obtaining the policies of insurance required Lease
unless written notice of termination is given to Tenant. Notwithstanding any
termination of Tenant's right to possession without terminating the Lease,
Landlord may at any time thereafter elect to terminate this Lease for such
previous breach.
No remedy herein conferred upon Landlord is exclusive of any other remedy;
Landlord's remedies are cumulative and in addition to every other remedy given
hereunder, or now or hereafter existing at law or in equity or by statute.
Landlord's delay or omission to exercise any right or power arising from any
default shall not impair any such right or power, nor waive any such default.
No act or conduct of Landlord, or its agent, whether by acceptance of the
keys to the Premises or otherwise, shall constitute Landlord's re-entry,
acceptance of Tenant's surrender of the Premises prior to the expiration of the
term hereof. Landlord's acceptance of Tenant's surrender shall occur only by a
written acceptance of surrender signed by Landlord.
Tenant shall serve any notice of claimed default or breach by Landlord
under this Lease upon the lender (if any) holding a first trust deed or mortgage
against the Building or any part thereof and notwithstanding anything contained
herein, shall allow such lender the same period following any default to cure
the same as provided in Article 38.p. No notice of default shall be effective
against Landlord unless the requirements of Article 38.p have been satisfied.
b. Insolvency. Tenant agrees that neither this Lease nor its interest
hereunder in the Premises or the improvements thereon shall be subject to
involuntary assignment, transfer, or sale by operation of law or otherwise and
that any attempted involuntary assignment, transfer or sale shall be void.
Without limiting the generality of the preceding sentence, Tenant agrees that if
any proceeding under the Federal Bankruptcy Code is commenced by or against
Tenant (and if against Tenant, said proceeding is not dismissed before either
any order for relief is entered or the confirmation of an arrangement) or if
Tenant is adjudged insolvent or makes an assignment for the benefit of its
creditors, or if a writ of attachment or execution is levied on the leasehold
estate hereby created and is not released or satisfied in any proceeding to
which Tenant is a party within a period of 30 days, or if a trustee, receiver,
examiner, liquidator or custodian is appointed with authority to take possession
or control of the Premises or Tenant's business conducted thereon and he is not
discharged within a period of 30 days after his appointment; any such event or
involuntary assignment shall constitute a breach of this Lease by Tenant and, at
Landlord's option, in addition to its rights or remedies hereunder or as
provided by law, Landlord may, without notice of entry and without the ten days'
notice described in the first sentence of Article 32.a, and without other
action, terminate this Lease and all Tenant's rights under this Lease and those
of any persons claiming under Tenant in and to the Premises.
33. Inability to Perform. If either party hereto is delayed or prevented
from performing any act required hereunder by acts of God, strikes, lockouts,
labor troubles, civil disorder, inability to procure materials, restrictive
governmental laws or regulations or other cause without fault and beyond the
control of the party obligated (financial inability excepted), performance of
such act shall be excused for the period of delay and the period for the
performance of any such act shall be extended for a period equivalent to the
period of such delay; provided, however, nothing contained in this Article shall
excuse Tenant from the prompt payment of rent and other charge required of
Tenant.
34. Brokerage Fees. Tenant warrants that it has had no dealings with any
real estate broker or agents in connection with the negotiation of this Lease
excepting Xxxxxxxxx-Xxxxx Associates, Inc. and Xxxxxx Commercial (Xxxxx Xxxxxx)
and that it knows of no other real estate broker or agent who is entitled or
claims to be entitled to a commission in connection with this Lease. Tenant
agrees to indemnify and hold Landlord harmless from and against any and all
claims, demands, losses, liabilities, lawsuits, judgments, and costs and
expenses (including without limitation reasonable attorneys' fees) with respect
to any alleged leasing
15
19
commission or equivalent compensation alleged to be owing on account of Tenant's
dealings with any real estate broker or agent other than the aforesaid broker.
35. Notices. All notices, approvals and demands permitted or required to
be given under this Lease shall be in writing and (a) if to Landlord, shall be
given by personal delivery or by certified mail, return receipt requested, to
Landlord's Mailing Address as set forth in Article 2.h and (b) if to Tenant,
shall be given by first class or certified mail to Tenant's Mailing Address as
set forth in Article 2.g or to the Premises. All notices to Tenant shall be
deemed given when delivered or mailed and all notices to Landlord shall be
deemed given when received. Either party may from time to time change its
Mailing Address by notice to the other party.
36. Government Energy or Utility Controls. In the event of imposition of
federal, state or local government controls, rules, regulations, or restrictions
on the use of consumption of energy or other utilities during the Term, both
Landlord and Tenant shall be bound thereby. In the event of a difference in
interpretation by Landlord and Tenant of any such controls, the interpretation
of Landlord shall prevail, and Landlord shall have the right to enforce
compliance therewith, including the right of entry into the Premises to effect
compliance.
37. Quiet Enjoyment. Tenant, upon paying the rent and performing all of
its obligations under this Lease, shall peaceably and quietly enjoy the
Premises, subject to the terms of this Lease and to any mortgage, lease, or
other agreement to which this Lease may be subordinate, provided, however, that
Landlord shall have no duty to protect Tenant against disturbance by any person
not employed by Landlord.
38. Miscellaneous.
a. Attorneys' Fees. If any action or proceeding is brought by either party
against the other arising out of this Lease, the prevailing party shall be
entitled to recover all costs and expenses, including reasonable attorneys' fees
and expert witness fees, incurred on account of such action or proceeding.
b. Severability. A final determination by a court of competent
jurisdiction that any provision of this Lease is invalid shall not affect the
validity of any other provision, and any provision so determined to be invalid
shall, to the extent possible, be construed to accomplish its intended effect.
c. Successors and Assigns. Subject to the provisions of Article 20, this
Lease shall be binding upon and inure to the benefit of the heirs, personal
representatives, successors and assigns of the parties.
d. Choice of Law. This Lease shall be construed and enforced in accordance
with the laws of the State.
e. Prior Agreement; Amendments. This Lease constitutes the entire
agreement of the parties with respect to its subject matter, and no prior
agreement or understanding pertaining to its subject matter shall be effective
for any purpose. No provision of this Lease may be waived or modified except in
writing signed by the party (or its successor in interest) against whom
enforcement of the waiver or modification is sought.
f. Captions, Articles and Section Numbers. The captions appearing within
the body of this Lease have been inserted as a matter of convenience and for
reference only and in no way define, limit or enlarge the scope or meaning of
this Lease.
g. Recording. Tenant shall not record this Lease without the prior written
consent of Landlord. Tenant, upon the request of Landlord, shall execute and
acknowledge a "short form" memorandum of this Lease for recording purposes.
h. Consent. Notwithstanding anything contained in this Lease to the
contrary, Tenant shall have no claim, and hereby waives all claims against
Landlord for money damages by reason of any refusal, withholding or delay by
Landlord of any consent or approval, and in such event, Tenant's sole remedy
shall be an action for specific performance, injunction or declaratory judgment
for the determination of the issue by a court of competent jurisdiction.
i. Counterparts. This Lease may be executed in multiple counterparts, all
of which shall constitute one and the same Lease.
16
20
j. Furnishing of Financial Statements; Tenant's Representations. Upon
Landlord's written request, Tenant shall promptly furnish Landlord, from time to
time, with financial statements reflecting Tenant's current financial condition.
Tenant represents and warrants that all financial statements, records and
information furnished by Tenant to Landlord in connection with this Lease are
true, correct and complete in all respects, and have been submitted to Landlord
to induce Landlord to enter into this Lease.
k. Accord and Satisfaction. No payment by Tenant or receipt by Landlord of
a lesser amount than the rent provided for in this Lease shall be deemed to be
other than on account of the earliest due rent, nor shall any endorsement or
statement on any check or letter accompanying any check or payment be effective
to give rise to an accord and satisfaction, and Landlord may accept such check
or payment without prejudice to Landlord's right to recover the balance of the
amounts due and to pursue any other remedy provided for in this Lease.
l. Execution of Lease; No Option. The submission of this Lease to Tenant
shall be for examination purposes only and does not and shall not constitute a
reservation of or option for Tenant to lease, or otherwise create any interest
of Tenant in the Premises or any other premises within the Building or Project.
Execution of this Lease by Tenant and its return to Landlord shall not be
binding on Landlord notwithstanding any delay and notwithstanding any delivery
of possession of the Premises to Tenant, until Landlord has signed and delivered
this Lease to Tenant.
m. Corporate Authority. If Tenant is a corporation, each individual
signing this Lease on behalf of Tenant represents and warrants that he is duly
authorized to execute and deliver this Lease on behalf of the corporation, and
that this Lease is binding on Tenant in accordance with its terms. Tenant shall,
at Landlord's request, deliver a certified copy of a resolution of its Board of
Directors authorizing such execution.
n. Changes Requested by Lender. Neither Landlord nor Tenant shall
unreasonably withhold its consent to changes or amendments to this Lease
requested by the lender on Landlord's interest, so long as these changes do not
alter the basic business terms of this Lease or otherwise materially diminish
any rights or materially increase any obligation of the party from whom consent
to such change or amendment is requested.
o. Further Assurances. The parties agree to promptly sign all documents
reasonably requested to give effect to the provisions of this Lease.
p. Mortgage Protection. Tenant agrees to send by certified or registered
mail to any first mortgagee or first deed of trust beneficiary of Landlord whose
address has been furnished to Tenant, a copy of any notice of default served by
Tenant on Landlord. If Landlord fails to cure such default within the time
provided for in this Lease, such mortgagee or beneficiary shall have an
additional thirty (30) days to cure such default; provided that if such default
cannot reasonably be cured within that thirty (30) day period, then such
mortgagee or beneficiary shall have such additional time to cure the default as
is reasonably necessary under the circumstances.
q. Time is of the Essence. Time is of the essence of this Lease.
r. Light or Air. No rights to light or air across or over any property,
whether belonging to Landlord or any other person, are granted to Tenant by this
Lease, and Landlord shall not be liable for interference with the natural light
to the Premises or for any latent defect in the Premises, Building or Project.
s. Exhibits. The exhibits attached hereto constitute part of this Lease
and are incorporated herein by reference.
t. Landlord's Liability. If, at any time during the Term, the holder of
Landlord's interest is a partnership or joint venture, Tenant agrees to look
only to the assets of such partnership or joint venture (and not to the partners
or joint ventures personally) with respect to any obligations or payments due or
which may become due from Landlord hereunder.
The parties hereto have executed this Lease on the dates specified
immediately adjacent to their respective signatures.
17
21
39. Renewal Option. If not in default hereunder, Tenant shall have the
right to renew this Lease for a two (2) year period at prevailing market rates.
40. Right of Refusal. If Tenant is not in default hereunder, Tenant shall
have a right of first refusal for the vacant space contiguous to the Premises to
the East, during the term of this Lease. Landlord will notify Tenant of the
availability of the space. Tenant will be given ten (10) working days to
exercise its right to lease the contiguous premise at the same terms offered to
a prospective tenant.
IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN PREPARED FOR SUBMISSION TO
YOUR ATTORNEY FOR HIS APPROVAL. NO REPRESENTATION OR RECOMMENDATION IS MADE BY
LANDLORD OR BY THE REAL ESTATE BROKER OR ITS AGENTS OR EMPLOYEES AS TO THE LEGAL
SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTIONS
RELATING THERETO.
Executed on September 29, 1997 LANDLORD: By: [Illegible Signature]
---------------------------------------
Its: Agent
--------------------------------------
Executed on September 26, 1997 TENANT: By: [Illegible Signature]
---------------------------------------
Its: Chief Financial Officer
--------------------------------------
18
22
EXHIBIT "A"
LEGAL DESCRIPTION OF PROPERTY
ON WHICH PREMISES ARE LOCATED
That certain parcel of land being situated in the west half of Section 8,
Township 1 North, Range 4 East of the Gila and Salt River Base and Meridian,
Maricopa County, Arizona, more particularly described as follows:
COMMENCING at the West quarter corner of said Section 8;
thence East 33.00 feet to a point on the Easterly line of 00xx Xxxxxx;
thence North parallel to and 33 feet Easterly from the center line of 00xx
Xxxxxx and the West line of said Section 8, 1227.83 feet to a point 50 feet
Southerly from the center line of Washington Street;
thence South 81 degrees 50 minutes 00 seconds East parallel to and 50 feet
Southerly from the center line of Washington Street 1402.28 feet to a point,
said point being the Northeast corner of that certain parcel of land described
in Deed recorded in Docket 7997, page 474, in the office of the Maricopa County
Recorder;
thence South 8 degrees 10 minutes 00 seconds West along the East line of
said last mentioned 666.51 feet to the Southeast corner thereof and the True
Point of Beginning:
THENCE South 81 degrees 50 minutes 00 seconds East parallel with said
center line of Washington Street, 346.14 feet;
thence North 8 degrees 10 minutes 00 seconds East parallel to the East line
of said parcel, described in said Deed, 666.51 feet to a point 50 feet Southerly
from the center line of Washington Street;
thence North 81 degrees 50 minutes 00 seconds West parallel to the East
line of said parcel, described in said Deed, 666.51 feet to a point that bears
North 81 degrees 50 minutes 00 seconds West 30.00 feet from the True Point of
Beginning;
thence South 81 degrees 50 minutes 00 seconds East parallel with said
center line of Washington Street 30.00 feet to the True Point of Beginning.
23
EXHIBIT "B"
PROJECT SITE PLAN
[DRAWING TO COME]
24
EXHIBIT "C"
TENANT IMPROVEMENTS
LANDLORD SHALL PROVIDE THE FOLLOWING IMPROVEMENTS:
Improvements to the Premises according to agreed upon drawings, attached
herewith after approval, with cost of improvements not to exceed TWENTY EIGHT
THOUSAND United States Dollars ($28,000.00) and executed according to provisions
of Paragraph 15. ALTERATIONS AND ADDITIONS.
TENANT SHALL PROVIDE THE FOLLOWING IMPROVEMENTS:
Improvements to the Premises according to agreed upon drawings, attached
herewith after approval, with cost of improvements in excess of Landlord's
participation as stated above, and for all costs defined in Paragraph 16.
LEASEHOLD IMPROVEMENTS.
