EXHIBIT 10.53
GROUND LEASE AGREEMENT
FOR THE ASML BUILDING
ASU RESEARCH PARK
LEASE
FUNDAMENTAL LEASE PROVISIONS
----------------------------
DATE: August 22, 1997
LANDLORD: XXXXX-XXXXXXX RESEARCH PARK, INC.,
an Arizona nonprofit corporation
TENANT: XXXX COMPANIES US, INC.
DEMISED PREMISES: Lot 44 containing approximately 9.5076 net,
acres 14.3207 gross acres and 414,151 net
square feet (623,810 gross square feet). See
Exhibits A and A-1.
LEASE TERM: From the date hereof through December 31,
2082 subject to Tenant's right to terminate
the Term, as provided in Section 2.
RENT COMMENCEMENT DATE: See Section 3.
ANNUAL RENT: See Section 3.
MUNICIPAL SERVICE
FEE: $0.08337 per square foot of Floor Area
constructed on the Demised Premises per year,
payable in twelve equal monthly installments,
subject to adjustments as provided in
Section 6(d).
COMMON AREA EXPENSES: Allocable Share payable monthly beginning on
the Rent Commencement Date.
INFRASTRUCTURE
ASSESSMENT: Approximately $248,490.61 based upon $.60 per
net square foot of land area.
SECURITY DEPOSIT: None Required.
PERMITTED USES: Those uses permitted under the Restrictions
attached hereto as Exhibit F. Unlimited
manufacturing is prohibited
(A.R.S. (s)15-1636).
RESTRICTIONS: Attached hereto as Exhibit F.
ADDRESS OF LANDLORD: 0000 Xxxxx Xxxxxxx Xxxxx,
Xxxxx, Xxxxxxx 00000
ADDRESS OF TENANT: 0000 X. Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxxxxxxxxxxx
The foregoing Fundamental Lease Provisions are an integral part of this Lease,
and each reference in the body of the Lease to any Fundamental Lease Provisions
shall be construed to incorporate all of the terms set forth above with respect
to such Provisions.
INDEX
Section Page
1. DEMISED PREMISES.................................................... 1
2. TERM................................................................ 1
3. RENT................................................................ 1
4. ADDITIONAL CHARGES.................................................. 3
5. NO COUNTERCLAIM OR ABATEMENT OF ADDITIONAL CHARGES.................. 3
6. RENTAL TAXES, UTILITIES, REAL ESTATE TAXES AND MANAGEMENT FEE....... 4
7. USE OF DEMISED PREMISES............................................. 8
8. CONSTRUCTION BY TENANT.............................................. 8
9. INFRASTRUCTURE ASSESSMENT........................................... 9
10. MAINTENANCE AND REPAIRS............................................. 9
11. REGULATORY REQUIREMENTS............................................. 9
12. INDEMNIFICATION..................................................... 11
13. INSURANCE........................................................... 12
14. LIENS............................................................... 12
15. DAMAGE OR DESTRUCTION............................................... 13
16. EMINENT DOMAIN...................................................... 13
17. DEFAULTS AND REMEDIES............................................... 14
18. ASSIGNMENT AND SUBLETTING........................................... 16
19. HYPOTHECATION OF LEASEHOLD ESTATE................................... 17
20. SUBORDINATION....................................................... 19
21. ESTOPPEL CERTIFICATE................................................ 19
22. CONFLICT OF LAWS.................................................... 20
23. STATUS OF TENANT.................................................... 19
24. SUCCESSORS AND ASSIGNS.............................................. 20
25. ATTORNEYS' FEES..................................................... 20
26. PERFORMANCE BY TENANT............................................... 20
27. MORTGAGEE PROTECTION................................................ 21
28. WAIVER.............................................................. 21
29. EXAMINATION OF LEASE................................................ 21
30. TIME................................................................ 21
31. PRIOR AGREEMENTS, AMENDMENTS........................................ 21
32. SEVERABILITY........................................................ 22
33. RECORDING........................................................... 22
34. LIMITATION ON LIABILITY............................................. 22
35. NONSUBORDINATED SUBLEASE............................................ 22
36. CONSENT OF LANDLORD AND TENANT...................................... 22
37. DARK PERIOD......................................................... 22
38. TITLE TO BUILDINGS AND IMPROVEMENTS................................. 23
39. SURRENDER........................................................... 23
40. RESTRICTIONS - AMENDMENTS........................................... 24
41. QUIET POSSESSION.................................................... 24
42. WATER RESOURCES..................................................... 24
43. NOTICES............................................................. 24
44. BROKERS............................................................. 25
45. NET LEASE........................................................... 25
46. TENANT'S TITLE INSURANCE............................................ 25
47. SHARED DRIVEWAYS.................................................... 24
48. HEIGHT RESTRICTIONS................................................. 25
Exhibit A Legal Description of the Demised Premises
Exhibit A-1 Site Plan of the Demised Premises
Exhibit B Site Plan of the Research Park
Exhibit C Preliminary Plan Package
Exhibit D Recognition, Non-Disturbance and Attornment Agreement
Exhibit E Memorandum of Lease
exhibit F Restrictions
ASU RESEARCH PARK
LEASE
1. DEMISED PREMISES
----------------
Subject to the covenants and conditions herein contained, Landlord
hereby leases to Tenant, and Tenant leases from Landlord (this "Lease"), the
land situated in the City of Tempe, Maricopa County, Arizona, legally described
on Exhibit A attached hereto and graphically depicted on Exhibit A-1 attached
hereto (the "Land"). Said Land and all buildings and other improvements to be
constructed by or for Tenant thereon (the "Improvements") are hereinafter
referred to collectively as the "Demised Premises". The Demised Premises is a
part of an integrated research park development located within the City of
Tempe, Arizona ("Research Park") which is graphically depicted on the Site Plan
attached hereto as Exhibit B. It is acknowledged that Landlord has an interest
in the Research Park as a ground lessee under that certain Ground Lease dated
October 8, 1984, and all amendments thereto ("Ground Lease"), wherein the
Arizona Board of Regents, acting for and on behalf of Arizona State University,
appears as Lessor ("Ground Lessor"). This Lease is a sublease under the Ground
Lease
2. TERM
----
(a) The term of this Lease ("Term") shall commence as of the
date hereof and shall expire on December 31, 2082, unless the Term shall be
sooner terminated as hereinafter provided.
(b) The term "year" as used in this Lease shall mean each period
of twelve (12) consecutive months commencing on each January 1 and ending at
midnight on the next succeeding December 31, except that any partial year at
the beginning of the Term shall constitute the first year of the Lease, in which
event the first year of the Term will be shorter than twelve months.
(c) Tenant shall have the right to terminate this Lease prior to
expiration of the 30th year and prior to expiration of each subsequent 10-year
period. In order to exercise the termination right, Tenant must provide Landlord
with written notice of Tenant's termination election not more than 360 nor less
than 180 days prior to the expiration of the 30th year. If this termination
right is not exercised prior to the 30th year, the termination right shall then
correspond to the expiration of each successive 10th year (i.e., the 40th, 50th,
60th, 70th and 80th years) subject to being exercised in the manner herein
described.
3. RENT
----
(a) Upon the Rent Commencement Date (as defined below), Tenant
agrees to pay Annual Rent to Landlord, without demand, in twelve (12) equal
monthly installments in advance on the first day of each month, as follows:
1
Lease Years Per Net Sq. Foot Annual Monthly
----------- ---------------- ------ -------
1-15 $0.45 $190,727 $15,894
16-25 $0.66 $279,733 $23,311
26-35 $0.86 $364,500 $30,375
36-85 See (b) below
(b) During the 35th year and again during the 65th year,
Landlord shall have the option, in each such case, to cause the fair market
value of the Land (as an improved parcel of land but subject to the
Restrictions) to be determined by appraisal as set forth below. In each such
case, the Annual Rent applicable to the Demised Premises for the ensuing ten-
year period shall be equal to 10% of the fair market value of the Land. Annual
Rent so determined shall be in effect for the years 36-45. Annual Rent shall
then be adjusted every ten years so that Annual Rent for the years 46-55 and 56-
65 shall reflect cumulative non-compounded increases of three percent (3%) per
year over the Annual Rent in effect for the previous ten year period. Likewise,
Annual Rent shall be established by appraisal as set forth herein during the
65th year for the years 66-75. Annual Rent shall then be adjusted after ten
years so that Annual Rent for the years 76-85 shall reflect non-compounded
cumulative increases of three percent (3%) per year over the Annual Rent in
effect for the previous ten-year period.
In order to invoke the appraisal procedure, Landlord shall
provide to Tenant at least 270 days but not more than 360 days prior to
expiration of the 35th year (or 65th year as the case may be) an appraisal of
the Land. Tenant shall have 30 days after receipt of Landlord's appraisal either
to accept Landlord's appraisal or to submit to Landlord an appraisal of the Land
establishing a different fair market value. Failure to provide Landlord with an
appraisal before expiration of the 30 day period shall be deemed Tenant's
acceptance of Landlord's appraisal. If Tenant submits its own appraisal,
Landlord shall have 30 days within which to notify Tenant that it accepts or
rejects Tenant's appraisal. Failure to provide such notice within the 30 day
period shall constitute acceptance by Landlord of Tenant's appraisal.
If Landlord rejects Tenant's appraisal, then the appraisers
previously selected by Landlord and Tenant shall select a third appraiser,
except that if the valuations of the two appraisals are less than 10% apart, the
valuations shall be averaged and the resulting amount shall be the fair market
value. If the appraisers are unable to agree on a third appraiser within ten
(10) days, either party, by giving ten (10) days notice to the other party may
apply to the American Arbitration Association for the purpose of selecting a
third appraiser.
Within 30 days after the selection of the third appraiser, the
third appraiser shall submit to Landlord and Tenant an appraisal of the Land. A
valuation agreed upon by two of the three appraisers shall be binding upon
Landlord and Tenant If none of the appraisers agree, the values determined by
the two appraisers whose valuations are closer (in absolute dollar terms, not
percentage terms) shall be averaged and the resulting amount shall be the fair
market value. If one valuation is equally close (in absolute dollar terms, not
percentage terms) to the other two, the middle valuation shall be the fair
market value.
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Landlord and Tenant each shall bear the cost of its own appraiser
and shall bear one-half of the cost of the third appraiser. All appraisers shall
be members of the American Institute of Real Estate Appraisers (M.A.I.) or, if
such Institute shall not then exist, members of its successor or a substantially
equivalent organization.
(c) All sums to be paid by Tenant to Landlord pursuant to this
Lease shall be paid in lawful money of the United States to Landlord at its
address, or at such other place as Landlord may from time to time designate in
writing.
(d) The "Rent Commencement Date" shall be the earlier to occur
of (i) the first anniversary of the date of this Lease as set forth in the
Fundamental Lease Provisions or (ii) the date Tenant obtains a certificate of
occupancy for the Improvements.
(e) All payments of Annual Rent and "Additional Charges" (as
defined in Section 4) shall be considered delinquent if not received by Landlord
on or before the 10th day after the date any such payment originally became due.
Tenant shall pay to Landlord a late charge equal to five percent (5%) of any
amount of delinquent Annual Rent or Additional Charges. In addition, interest
shall accrue on any amount of delinquent Annual Rent or Additional Charges at an
annual rate equal to two (2) percentage points (2%) in excess of the annual
interest rate published from time to time in the Wall Street Journal under the
masthead "Money Rates" as the Prime Rate in effect as of the payment due date
(or, if such Prime Rate ceases to be published, a reasonably equivalent index
selected by Landlord) such interest to be adjusted quarterly and to accrue from
the date such amount was originally due until the date such amount is actually
paid.
4. ADDITIONAL CHARGES
------------------
All taxes, assessments, insurance premiums, charges, costs and
expenses which Tenant assumes or agrees to pay hereunder, together with all
interest and penalties that may accrue thereon in the event of Tenant's failure
to pay the same as herein provided, and all other damages, costs and expenses
which Landlord may suffer or incur, and any and all other sums which may become
due, by reason of any default of Tenant or failure on Tenant's part to comply
with the agreements, terms, covenants and conditions of this Lease on Tenant's
part to be performed shall be referred to herein as "Additional Charges," and,
in the event of their nonpayment, Landlord shall have with respect thereto all
rights and remedies herein provided the same as though Tenant failed to pay
Annual Rent.
5. NO COUNTERCLAIM OR ABATEMENT OF ADDITIONAL CHARGES
--------------------------------------------------
Except to the extent expressly provided otherwise in this Lease, the
Annual Rent and all Additional Charges payable by Tenant hereunder shall be paid
without notice, demand, counterclaim, setoff, recoupment, deduction or defense
of any kind or nature and without abatement, suspension, deferment, diminution
or reduction, and, except to the extent expressly provided otherwise in this
Lease, the obligations and liabilities of Tenant hereunder shall in no way be
released, discharged or otherwise affected by reason of (i) any damage to or
destruction of any buildings or improvements on the Demised Premises; (ii) any
taking of the Demised Premises
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or any part thereof, or (iii) any restriction or prevention of or interference
with any use of the Demised Premises or any part thereof not the result of a
breach of this Lease by Landlord.
6. RENTAL TAXES, UTILITIES, REAL ESTATE TAXES AND MANAGEMENT FEE
-------------------------------------------------------------
MANAGEMENT FEE
--------------
(a) Any excise, transaction privilege or rental occupancy tax
now or hereafter actually Imposed by any government or governmental agency upon
Landlord on account of, attributed to, or measured by rent or other charges
payable by Tenant to Landlord shall be paid by Tenant to Landlord in addition to
and along with the annual Rent and Additional Charges payable hereunder.
(b) Tenant shall not be required to pay, or reimburse Landlord
for (i) any local, state or federal capital levy, franchise tax, revenue tax,
income tax, or profits tax of Landlord unless and to the extent such levy, tax
or impost is in lieu of or a substitute for any other levy, tax or impost now or
later in existence upon or with respect to the Demised Premises which, if such
other levy, tax or impost were in effect, would be payable by Tenant under the
provisions hereof, or (ii) any estate, inheritance, devolution, succession or
transfer tax which may be imposed upon or with respect to any transfer (other
than taxes in connection with a conveyance by Landlord to Tenant) of Landlord's
interest in the Demised Premises.
(c) During the Term, Tenant shall pay prior to delinquency all
taxes assessed against and levied upon fixtures, furnishings, equipment and all
other personal property of Tenant situated on or within the Demised Premises,
and when possible Tenant shall cause said fixtures, furnishings, equipment and
other personal property to be assessed and billed separately from the real
property demised to Tenant. Tenant shall pay and discharge punctually, as and
when the same shall become due and payable without penalty, all business,
occupation and occupational license taxes.
(d) The City of Tempe requires that Tenant be assessed and pay
a municipal service fee (the "Municipal Service Fee") as hereinafter provided to
reimburse the City for the cost of providing municipal services to the Research
Park. The annual amount of the Municipal Service Fee payable by Tenant shall be
calculated by multiplying the aggregate number of square feet of Floor Area
constructed, or to be constructed, on the Demised Premises from time to time by
the "Multiplier" (determined as set forth below) in effect from time to time.
With regard to new construction of Floor Area, assessment of the Municipal
Service Fee shall commence at the beginning of the calendar quarter following
issuance of a Building Permit. For the fiscal year beginning July 1, 1996, the
Multiplier shall be the amount of $0.08337. Thereafter, the Multiplier shall be
adjusted annually as of each July I ("Adjustment Date") to reflect the
percentage of change in the Metropolitan Phoenix Consumer Price Index as
published by Arizona State University, College of Business, Center for Business
Research ("Index"), for the calendar year ended December 31 immediately
preceding said Adjustment Date as compared to the Index for the calendar year
ended December 31 one year earlier. Annual percentage changes shall be applied
to the Multiplier in effect for the previous year. The Multiplier thus adjusted
shall be rounded to the nearest tenth of a cent. So long as the City of Tempe
requires the assessment of
4
the Municipal Service Fee, Tenant shall pay to Landlord on a monthly basis, on
or before the first day of each month during the Term, a sum equal to one-
twelfth (1/12th) of the then annual Municipal Service Fee due and payable to the
City of Tempe calculated as set forth above for the Floor Area constructed, or
to be constructed, on the Demised Premises. The term "Floor Area" as used in
this Lease shall have the same meaning as provided in the City of Tempe Building
Code in effect from time to time. The aggregate number of square feet of Floor
Area constructed, or to be constructed, on the Demised Premises shall be the
aggregate amount of Floor Area as set forth on building permits issued by the
City of Tempe to Tenant.
(e) Landlord represents and warrants to Tenant that, to the
extent of Landlord's actual knowledge, the fee estate of Ground Lessor is
presently exempt from ad valorem taxes, and the leasehold interest of Landlord
as lessee under the Ground Lease is not currently being taxed. In the event of a
change in the law such that said ad valorem tax exempt status of Ground Lessor
is no longer recognized by taxing authorities, or in the event of a change in
the law such that Landlord's possessory interest shall be taxed, then Tenant
shall fully pay and punctually discharge its proportionate share of all
Impositions as and when they are due and payable, as provided in Section 6(g)
below. "Impositions" shall include but are not limited to any and all ad valorem
taxes, assessments (excluding special improvement district assessments) and
other governmental taxes, impositions and charges of every kind and nature
measured or calculated based on the value of the property involved,
extraordinary or ordinary, general or special, unforeseen or foreseen, which at
any time during the Term shall become due and payable by either Ground Lessor or
Landlord.
(f) In the event any obligation to pay Impositions accrues under
Section 6(e) above and if the Demised Premises constitute a separate tax parcel
for purposes of assessing and levying such Impositions, Tenant shall have the
right to contest the amount or validity of any Impositions by appropriate legal
proceedings, diligently pursued, in the name of Landlord if required by any law,
rule or regulation, provided that (i) Tenant shall first make all contested
payments, under protest if it desires, but if payment under protest is not
permitted by the taxing authority, such contested payment need not be made, (ii)
neither the Demised Premises, any part thereof, nor any interest therein shall
be in any danger of being sold, forfeited, lost or interfered with, (iii) Tenant
shall have furnished such security, if any, as may be required in the
proceedings or reasonably requested by Landlord, and (iv) all expenses incurred
in connection with such proceedings shall be paid by Tenant.
(g) In the event any obligation to pay Impositions accrues under
Section 6(e) above and if the Demised Premises are not separately assessed, but
are part of a larger tract or parcel for assessment purposes, then Tenant shall
pay to Landlord Tenant's proportionate share of such Impositions determined as
follows:
(i) With respect to any ad valorem taxes on the land
area of the larger land parcel including the Demised Premises, but not
with respect to special or extraordinary assessments, Tenant shall pay
that portion of such taxes which the total number of square feet of
land area within the Demised Premises bears to the number of square
feet of land area within such larger land parcel.
5
(ii) With respect to any special or extraordinary
assessments on the larger land parcel including the Demised Premises,
Tenant shall pay only that portion of such assessments which would have
been levied upon the Demised Premises had the Demised Premises been
separately assessed based upon the methods of assessments utilized for
such assessments.
Tenant shall pay such sums to Landlord within thirty (30) days of the receipt of
a written statement from Landlord indicating the amount of such Impositions as
so determined and showing in reasonable detail the manner in which such
Impositions were determined. Landlord, upon Tenant's request, shall furnish
Tenant, within twenty (20) days thereafter, proof of Landlord's payment of said
Impositions. However, in no event shall Tenant be required to make such payments
more than fifteen (15) days in advance of the date such payments would be
delinquent if they were to be made directly to the taxing authorities. The right
to contest Impositions attributable to the Demised Premises, if not a separate
tax parcel, shall initially belong to Landlord but may be exercised by Tenant at
its own expense if Landlord fails to contest any Imposition after written
request from Tenant to do so.
(h) Landlord represents and warrants to Tenant that: (i) this
Lease is issued on lands owned by the Arizona Board of Regents; and (ii) the
Demised Premises is part of a "Research Park" as such term is now defined in
A.R.S. (S) 35-701. In the event any existing or future property classification
or assessment ratio which treats the Demised Premises and the Improvements to be
constructed thereon more favorably for property tax purposes than they otherwise
might be treated is lost or is no longer applicable due to the occurrence of an
event or condition within the reasonable control of Landlord or Ground Lessor,
then the Landlord shall be responsible for that portion of the Impositions (as
defined in Section 6(e)) thereafter measured by the value of the Land, and
Tenant shall be responsible for that portion of the Impositions measured by the
value of the Improvements, and title to the Improvements shall automatically
revert to Tenant unless Tenant, at its sole option exercisable within one
hundred twenty (120) days after Tenant learns of the loss of the favorable
property classification or assessment ratio, elects that title to the
Improvements shall remain with the Ground Lessor. The parties agree that a
change in the law regarding the taxation of interests in land or improvements
located within the Research Park shall not be deemed to be an event or condition
within the reasonable control of Landlord or Ground Lessor except as otherwise
provided in the preceding paragraph.
(i) All entrance and exit areas, open space, landscaped space,
easements, lighting, street furniture, water bodies, jogging paths, pedestrian
walkways, bicycling paths, equestrian trails, parking areas, and other similar
facilities furnished by Landlord in the Research Park (hereinafter referred to
collectively as "Common Area") are dedicated public easements for said purposes
and shall at all times be subject to the joint control and management of
Landlord and the City of Tempe, and Landlord shall have the right from time to
time to establish, modify and enforce reasonable non-discriminatory rules and
regulations with respect to the same as long as they do not materially interfere
with Tenant's normal conduct of its business on the Demised Premises. Landlord
shall have the right to construct, maintain and operate lighting facilities on
all said Common Area; to police the same; from time to time to change the area,
grade, location and arrangement thereof; to confine to the Demised Premises all
parking by
6
Tenant, its officers, agents, customers and employees; to close temporarily all
or any portion thereof, and to do and perform such other acts in and to said
area as in Landlord's judgment is reasonably advisable as long as such does not
unreasonably affect Tenant's use and enjoyment of the Demised Premises. Landlord
is contractually bound to the City of Tempe to operate and maintain the Common
Area and will do so in such a manner as the common areas in similar first-class
business and industrial parks located in the southwestern United States are
operated and maintained.
(j) Subject to the standards as provided in Section 6(i) above,
the term "Common Area Expenses" as used herein shall mean all sums expended by
Landlord and Ground Lessor in connection with the operation, maintenance, repair
or replacement of the Common Area, including premiums paid for adequate public
liability and property damage insurance (which insurance Landlord is hereby
required to maintain throughout the Term); provided, however, that Common Area
Expenses shall not include Landlord's overhead, administrative and general
office expenses except as may be incurred relative to persons directly employed
to perform Common Area operation, maintenance, repair or replacement services,
expense for any work which Landlord performs for any other tenant of the
Research Park, expenses for repairs or other work to correct original
construction defects or occasioned by condemnation or by fire, windstorm, or
other insurable casualty, expenses incurred in leasing or procuring new tenants
for the Research Park, legal expenses incurred in enforcing the terms of any
lease pertaining to the Research Park, interest or amortization payments on any
mortgage or deed of trust pertaining to the Research Park, gross or net income
taxes imposed on Landlord or on any rental revenue received by Landlord,
expenses directly payable by any tenant of the Research Park, any costs, fines
and the like due to Landlord's violation of any governmental rule or regulation;
or the cost of any items for which Landlord is reimbursed by third parties, but
only to the extent of such reimbursement. Any Common Area Expenses that are
required to be capitalized, in accordance with generally accepted accounting
principles, shall be amortized and charged in accordance with generally accepted
accounting practices. Only the annual amortized amounts of any such expenses
shall be included in Common Area Expenses. The cost of any capital improvements
not in repair or replacement of existing improvements shall not be included in
Common Area Expenses. Landlord may cause any or all of said operation and
management responsibilities to be performed by an independent contractor or
contractors. Tenant shall pay to Landlord Tenant's pro rata share of such Common
Area Expenses in the following manner:
(1) Commencing on the Rent Commencement Date, and
thereafter on the first day of each calendar month of the Term, Tenant
shall pay to Landlord an amount estimated by Landlord to be Tenant's
share of Common Area Expenses. Landlord may adjust the monthly Common
Area charge of Tenant at the end of any calendar quarter on the basis
of Landlord's experience and reasonably anticipated costs.
(2) Prior to the expiration of each year, Landlord shall
deliver to Tenant a statement covering the fiscal year of Landlord just
expired, certified as correct by an authorized but independent
representative of Landlord, showing the Common Area Expenses for such
fiscal year, the amount of Tenant's pro rata share of such expenses for
7
such fiscal year and the payments made by Tenant with respect to such
fiscal year as set forth in subparagraph (1) immediately above. If
Tenant's pro rata share of such Common Area Expenses exceeds Tenant's
payments so made, Tenant shall pay Landlord the deficiency within
thirty (30) days after receipt of such statement. If said payments
exceed Tenant's pro rata share of such Common Area Expenses, Landlord
shall refund the excess to Tenant within thirty (30) days following
delivery of the aforesaid statement. If Landlord fails to furnish
Tenant the required statement as provided herein, Landlord shall be
deemed to have waived any right to payment from Tenant for any Common
Area Expenses for the preceding fiscal year in excess of that
previously paid by Tenant for such fiscal year.
(3) Tenant's pro rata share of the Common Area Expenses
shall be that portion of all such expenses which the number of square
feet of land area within the Demised Premises bears to the total number
of square feet of leaseable land area within the Research Park
(presently 9,010,380 square feet) which is from time to time under
lease; provided, however, the latter number shall never be less than
90% (presently 8,109,342 square feet) of the total number of square
feet of leaseable land area within the Research Park. There shall be an
appropriate adjustment of Tenant's share of the Common Area Expenses as
of the expiration of the Term of this Lease.
(k) Landlord shall save, hold harmless and indemnify Tenant from
and against all liabilities, obligations, claims, suits, damages, penalties,
causes of action, costs and expenses (including without limitation, reasonable
attorneys' fees and expenses) imposed or asserted against Tenant by reason of
any accident, injury to or death of persons, or loss or damage to property
occurring on the Common Areas to the extent the same is a result of the
negligence of Landlord or its agents, servants, contractors or employees.
(l) Tenant shall pay and discharge punctually all charges for
utility services used by it.
7. USE OF DEMISED PREMISES
-----------------------
Landlord hereby consents to and Tenant may only use the Demised
Premises for those uses described in the Fundamental Lease Provisions
("Permitted Uses"). Tenant represents, warrants and covenants to Landlord that
the Demised Premises shall be used only for Permitted Uses.
8. CONSTRUCTION BY TENANT
----------------------
(a) Tenant shall construct a building on the Demised Premises,
consisting of approximately 97,963 square feet of Floor Area. Such construction,
which is subject to Tenant's compliance with the Restrictions, shall commence
within one (1) year from final Plan approval as set forth in said Restrictions.
Submittals toward Plan approval shall promptly commence.
8
(b) Plan submittals as well as construction in connection with
any Improvements, once commenced, and all required reviews by Landlord, shall be
diligently pursued to substantial completion. Attached hereto as Exhibit C is a
listing of documents constituting Tenant's "Preliminary Plan Package." All
further plan or driveway submittals required by the Restrictions will be
approved by Landlord so long as they are substantially consistent with the
Preliminary Plan Package. Tenant, at its expense and subject to compliance with
the Restrictions and all applicable building regulations, may from time to time
remodel or demolish any Improvements, or construct other Improvements on the
Demised Premises and remodel or demolish such other Improvements. Tenant may
construct, remodel, or demolish the interior of the Improvements as it may
desire from time to time and nothing in the Restrictions shall be construed to
require any approval of Landlord with respect thereto.
9. INFRASTRUCTURE ASSESSMENT
-------------------------
Tenant shall pay to Landlord upon execution of this Lease an
infrastructure assessment of $248,490.61 as Tenant's share of Landlord's cost of
constructing and installing on and off-site infrastructure facilities which
serve or will serve the Demised Premises in common with other premises.
10. MAINTENANCE AND REPAIRS
-----------------------
Tenant shall at all times during the Term keep and maintain in good
order and repair the Land as well as the exterior of all Improvements, howsoever
the necessity or desirability of maintenance or repairs may occur. Tenant waives
any right created by any law now or hereafter in force to maintain or make
repairs to any portion of the Demised Premises at Landlord's expense, it being
understood that neither Ground Lessor nor Landlord shall in any event be
required to maintain or make any alterations, rebuildings, restorations,
replacements, changes, additions, improvements or repairs to the Demised
Premises. Nothing in the Lease shall be construed to require the Tenant to
maintain the interior of the Improvements beyond the extent necessary to comply
with applicable laws.
11. REGULATORY REQUIREMENTS
-----------------------
(a) Tenant shall promptly observe and comply with all present
and future laws, ordinances, requirements, orders, directions, rules and
regulations of all governmental authorities having or claiming jurisdiction over
the Demised Premises or any part thereof and of all insurance companies writing
policies covering the Demised Premises or any part thereof Without limiting the
generality of the foregoing, Tenant shall also procure each and every permit,
license, certificate or other authorization required in connection with the
lawful and proper use of the Demised Premises or required in connection with any
building or improvement now or hereafter erected thereon.
(b) Tenant covenants and agrees to pay all costs and expenses
associated with enforcement, removal, remedial or other governmental or
regulatory actions, agreements or orders threatened, instituted or completed
pursuant to any Hazardous Materials Laws, and all audits, tests, investigations,
cleanup, reports and other such items incurred in
9
connection with any efforts to complete, satisfy or resolve any matters, issues
or concerns, whether governmental or otherwise, arising out of or in any way
related to the use, generation, release, management, treatment, manufacture,
storage or disposal of, on, under or about, or transport to or from (any of the
foregoing hereinafter a "Use") the Demised Premises of any Hazardous Materials
in any amount by Tenant, its employees, agents, invitees, subtenants, licensees,
assignees or contractors. For purposes of this Lease (1) the term "Hazardous
Materials" shall include but not be limited to asbestos, urea formaldehyde,
polychlorinated biphenyls, oil, petroleum products, pesticides, radioactive
materials, hazardous wastes, toxic substances and any other related or
dangerous, toxic or hazardous chemical, material or substance defined as
hazardous or regulated or as a pollutant or contaminant in, or the Use of or
exposure to which is prohibited, limited, governed or regulated by, any
Hazardous Materials Laws; and (2) the term "Hazardous Materials Laws" shall mean
any federal, state, county, municipal, local or other statute, law, ordinance or
regulation now or hereafter enacted which may relate to or deal with the
protection of human health or the environment, including but not limited to the
Comprehensive Environment Response, Compensation and Liability Act of 1980,
42 U.S.C. Section 9601, et seq.; the Hazardous Materials Transportation Act,
--
49 U.S.C. Section 1801, et seq.; the Resource Conservation and Recovery Act,
--
42 U.S.C. Section 6901, et seq.; the Federal Water Pollution Control Act,
--
33 U.S.C. Section 1251, et seq. the Toxic Substances Control Act of 1976,
--
15 U.S.C. Section 2601, et seq.; Ariz. Rev. Stat. Xxx., Title 49 (the "Arizona
--
Environmental Quality Act of 1986"); and any rules, regulations or guidelines
adopted or promulgated pursuant to any of the foregoing as they may be amended
or replaced from time to time.
(c) Upon reasonable advance notice to Tenant, Landlord shall
have the right, from time to time during Tenant's regular business hours, to
enter upon and, as accompanied by a representative of Tenant, inspect the
Demised Premises for purposes of satisfying itself as to whether Tenant is in
compliance with the requirements of Section 11 (a) above.
(d) Tenant acknowledges that Landlord has provided to Tenant an
environmental assessment report on the Research Park (excluding Xxxx 0, 0, 0, 0,
00, 00, 00, 19, 32, 39, 42 and 44) prepared by Xxxxx & Xxxx, Inc., dated October
13, 1993 ("Report"). Except as otherwise disclosed in said Report, Landlord, to
the extent of its current actual knowledge, knows of no Hazardous Materials
contamination of the Research Park or the Demised Premises.
(e) Landlord covenants and agrees to pay all costs and expenses
associated with enforcement, removal, remedial or other governmental or
regulatory actions, agreements or orders threatened, instituted or completed
pursuant to any Hazardous Materials Laws, and all audits, tests, investigations,
cleanup, reports and other such items incurred in connection with any efforts to
complete, satisfy or resolve any matters, issues or concerns, whether
governmental or otherwise, arising out of or in any way related to the Use of
Hazardous Materials in any amount by Landlord, its employees, agents, invitees,
predecessors in interest, licensees, assignees or contractors.
10
(f) Landlord covenants and agrees diligently to enforce against
other tenants of the Research Park those provisions of applicable tenant leases
which pertain to Hazardous Materials and Hazardous Materials Laws.
12. INDEMNIFICATION
---------------
(a) Except to the extent caused by the gross negligence of
Ground Lessor or Landlord, or their agents, contractors, servants or employees,
Tenant shall save, hold harmless and indemnify Ground Lessor, Landlord and their
agents, employees and contractors performing management functions for the
Research Park from and against all liabilities, obligations, claims, causes of
action, suits, damages, penalties, assessments, taxes, fees, costs and expenses
(including without limitation, reasonable attorneys' fees and expenses) imposed
upon or asserted against Ground Lessor or Landlord by reason of (i) any use,
nonuse or condition of the Demised Premises or any part thereof, (ii) any
accident, injury to or death of persons (including workmen) or loss of or damage
to property occurring on the Demised Premises or any part thereof, (iii) any
failure on the part of Tenant to perform or comply with any of the terms of this
Lease, (iv) performance of any labor or services or the furnishing of any
materials or other property in respect of the Demised Premises or any part
thereof by, on behalf of or at the request of Tenant, (v) any accident, injury
to or death of persons (including workmen) or loss of or damage to property
arising from or in any way related to construction of the Improvements, (vi) any
failure on the part of Tenant to comply with any of the matters set forth in
Section 7 and Section I 1; and (vii) any violation or breach by Tenant of the
Restrictions or the Declaration of Height Limitations referred to in Section 48
below.
(b) Landlord shall save, hold harmless and indemnify Tenant and
its agents, employees and contractors from and against all liabilities,
obligations, claims, suits, damages, penalties, costs and expenses (including
without limitation, reasonable attorneys' fees and expenses) imposed upon or
asserted against Tenant by reason of (i) the gross negligence of Landlord or its
agents, contractors, servants or employees, or (ii) any failure on the part of
Landlord to perform or comply with any of the terms of this Lease including any
failure on the part of Landlord to comply with any of the matters set forth in
Section I1.
(c) In the event any indemnified party should be made a
defendant in any action, suit or proceeding brought by reason of any act or
omission of the indemnifying party, the indemnifying party shall at its own
expense resist and defend such action, suit or proceeding by counsel reasonably
approved by the indemnified party. If any such action, suit or proceeding should
result in a final judgment against the indemnified party, the indemnifying party
shall promptly satisfy and discharge such judgment or shall cause such judgment
to be promptly satisfied and discharged. The obligations of the indemnifying
party under this Section arising by reason of any such occurrence taking place
while this Lease is in effect shall survive any termination of this Lease
11
13. INSURANCE
---------
(a) Without limiting Tenant's indemnify obligations set forth in
this Lease (but subject to the waiver of subrogation provided in Section 13(c)
below), Tenant shall, at its sole cost and expense, procure and maintain
throughout the Term commercial general liability insurance in the amount of
$10,000,000 combined single limit (CSL).
(b) All policies of insurance required under Section 13 (a)
above will name the Ground Lessor and Landlord and its managing agent(s) as
additional insureds, and certificates thereof will be delivered to Landlord
within ten (10) days after delivery of possession of the Demised Premises to
Tenant and within 30 days prior to the expiration of the term of each policy.
All policies of insurance required hereunder must contain a provision that the
insurance carrier will notify in writing the insured and Landlord thirty (30)
days in advance of any cancellation or lapse or the effective date of a
reduction in the amount of insurance. All policies of insurance required
hereunder shall be written as primary policies. The Tenant further covenants and
agrees to increase liability insurance in additional amounts as Landlord may
reasonably require. All policies of insurance required hereunder shall be issued
by responsible insurance companies qualified to do business in the State of
Arizona with a Best's Rating Guide rating of at least A-Class VIII.
(c) In the event any liability indemnified against under
Section 12 or elsewhere in this Lease is also insured against under Section 13
or otherwise, the indemnification obligation shall only extend to the portion of
the liability exceeding the amount of insurance proceeds, if any, received by
the party being indemnified, the parties hereby waiving all rights of
subrogation to the extent permitted by any applicable insurance policies.
(d) Tenant may procure, but shall not be required to procure,
property damage and/or casualty insurance. In the event Tenant does so, Tenant
shall be the sole owner thereof and Landlord shall have no interest or rights
therein.
14. LIENS
-----
(a) Tenant shall have no power to do any act or make any
contract which may create or be the basis for any lien, mortgage or other
encumbrance upon the interest of Landlord in the Demised Premises. Under no
circumstances shall the interest of Ground Lessor in and to the Demised Premises
be subject to any such lien, mortgage or other encumbrance.
(b) If, because of any act or omission or alleged act or
omission of Tenant, any mechanics', materialmen's or other lien, charge or order
for the payment of money shall be filed or recorded against Ground Lessor,
Landlord or the Demised Premises (whether or not such lien, charge or order is
valid or enforceable as such), Tenant shall, at its own expense, cause the same
to be released and discharged of record within thirty (30) days after Tenant
shall have received notice of the filing or recording thereof, or Tenant may,
within said period, record a surety bond pursuant to Section 33-1004, Arizona
Revised Statutes, in the case of a mechanics' or materialmen's lien, or furnish
to Landlord a bond satisfactory to Landlord against any other
12
lien, charge or order, in which case Tenant shall have the right in good faith
to contest the validity or amount thereof
15. DAMAGE OR DESTRUCTION
---------------------
In the event any portion of the Demised Premises is damaged by fire or
any other peril, Tenant, at its election, either (a) shall promptly commence and
proceed diligently with the work of restoring the same, or (b) shall raze all
damaged Improvements and return the Demised Premises to their condition
preceding execution of this Lease. If Tenant elects to do the latter, Tenant may
terminate this Lease upon completion by Tenant of such work.
16. EMINENT DOMAIN
--------------
(a) If the whole of the Demised Premises shall be taken or
condemned under the right of eminent domain or if such a substantial part of the
Demised Premises shall be taken as shall result in the portion remaining being
unsuitable for the use being made thereof at the time of such taking, then this
Lease shall terminate as of the date upon which title shall vest in such
condemning authority. The net awards or payments on account of any taking shall
be apportioned as follows:
(i) Ground Lessor shall receive that portion of the award
attributable to the value of the Land.
(ii) Tenant shall receive that portion of the award
attributable to the value of the Improvements.
(b) If only a part of the Demised Premises shall be so taken
or condemned and the part not so taken can, in Tenant's reasonable judgment, be
adapted for the use then being made thereof, this Lease shall remain in full
force and effect without any abatement or reduction in rent except as provided
in Section 16(c), and Tenant, whether or not its portion of the awards or
payments, if any, on account of such taking shall be sufficient for the purpose,
at its own expense shall promptly commence and complete the restoration of the
Improvements on the Demised Premises as nearly as possible to their value,
condition and character immediately prior to such taking or condemnation. Tenant
shall have no entitlement to any rent reduction for any taking or condemnation
of Land which does not result in a reduction in the net square footage of the
Demised Premises.
(c) In the event that a taking or condemnation results in a
reduction of the net square footage of the Land, the Annual Rent and Additional
Charges payable by Tenant hereunder shall be reduced, effective as of the date
of Tenant's loss of use thereof, by a fraction the numerator of which shall be
the total reduction in the net square footage of the Land and the denominator of
which shall be the total net square footage of the Land as originally set forth
in the Fundamental Lease Provisions.
(d) If the award or payments on account of any taking shall
not be divided or apportioned by the court or the condemning authority into the
portions set forth in
13
Section 16(a), and if Landlord and Tenant shall be unable to agree on such
apportionment, then such apportionment shall be determined by appraisers.
Landlord and Tenant shall each appoint an appraiser, and the two appraisers so
appointed shall promptly appoint a third appraiser. Within thirty (30) days
after the appointment of the third appraiser, the two appraisers appointed by
Landlord and Tenant shall each determine and report to the third appraiser the
appropriate apportionment. Within ten (10) days thereafter, the third appraiser
shall determine which of the two apportionments determined by the appraisers
appointed by Landlord and Tenant is the more appropriate apportionment and the
apportionment chosen by the third appraiser shall be binding upon the parties.
All appraisers shall be members of the American Institute of Real Estate
Appraisers (M.A.I.) or, if such Institute shall not then exist, members of its
successor organization or an organization of substantially equivalent stature.
The fees of the appraisers shall be borne equally by Landlord and Tenant.
17. DEFAULTS AND REMEDIES
---------------------
(a) The occurrence of any one or more of the following events
shall constitute a "Default" hereunder by Tenant:
(1) The failure by Tenant to make any payment of Annual
Rent or any Additional Charges required to be paid by Tenant hereunder on
the date such payment was due (and expiration if any applicable grace
period), where such failure shall continue for a period of thirty (30) days
after written notice thereof from Landlord to Tenant.
(2) The failure by Tenant or any sublessee of Tenant to
observe or perform the covenant set forth in Section 7 where such failure
shall continue for a period of sixty (60) days after written notice thereof
from Landlord to Tenant.
(3) The failure by Tenant to observe or perform any express
or implied covenant or provision of this Lease to be observed or performed
by Tenant, other than as specified in (1) and (3) above, where such failure
shall continue for a period of sixty (60) days after written notice thereof
from Landlord to Tenant; provided, however, that if the nature of Tenant's
default is such that it is capable of being cured but more than sixty (60)
days are reasonably required for its cure, then Tenant shall not be deemed
to be in Default if Tenant shall commence such cure within said sixty (60)
day period and thereafter diligently prosecute such cure to completion.
(b) In the event of a Default by Tenant, in addition to any
other remedies available to Landlord at law or in equity, Landlord may, without
notice or demand of any kind to Tenant, have any one or more of the following
described remedies:
(1) Landlord shall have the right, at its election, to
reenter the Demised Premises, or any part thereof, either with or without
process of law, and to expel, remove and put out Tenant and persons
occupying the Demised Premises under Tenant, using such force as may be
necessary in so doing, to take full possession of and control over the
Demised Premises and to have, hold and enjoy the same and to receive all
14
rental income of and from the same. No reentry by Landlord shall be deemed
an acceptance of a surrender of this Lease, nor shall it absolve or
discharge Tenant from any liability under this Lease. No reentry by
Landlord shall be deemed to effect a termination of this Lease unless so
stated by Landlord in a written notice delivered to Tenant.
(2) Landlord shall have the right, at its election, with or
without reentry as provided in subparagraph (1) immediately above, to give
written notice to Tenant stating that this Lease and the Term hereby
demised shall terminate on the date specified by such notice, and upon the
date specified in such notice this Lease and the Term hereby demised and
all rights of Tenant hereunder shall terminate. Upon such termination,
Tenant shall quit and peacefully surrender to Landlord the Demised Premises
and the Improvements then situated hereon.
(3) At any time and from time to time after such reentry,
Landlord may relet the Demised Premises, or any part thereof, in the name
of Landlord or otherwise, for such term or terms (which may be greater or
less than the period which would otherwise have constituted the balance of
the Term of this Lease), and on such conditions (which may include
concessions or free rental) as Landlord, in its reasonable discretion, may
determine and may collect and receive the rental therefor. However, in no
event shall Landlord be under any obligation to relet the Demised Premises
or any part thereof, and Landlord shall in no way be responsible or liable
for any failure to relet or for any failure to collect any rental due upon
any such reletting. Even though it may relet the Demised Premises, Landlord
shall have the right thereafter to terminate this Lease and all of the
fights of Tenant in or to the Demised Premises.
(4) Unless Landlord shall have notified Tenant in writing
that it has elected to terminate this Lease, no such reentry or action in
lawful detainer or otherwise to obtain possession of the Demised Premises
shall relieve Tenant of its liability and obligations under this Lease; and
all such liability and obligations shall survive any such reentry. In the
event of any such reentry, whether or not the Demised Premises, or any part
thereof, shall have been relet, Tenant shall pay to Landlord the entire
rental and all other charges required to be paid by Tenant up to the time
of such reentry of this Lease, and thereafter Tenant, until the end of what
would have been the Term of this Lease in the absence of such reentry,
shall be liable to Landlord, and shall pay to Landlord, as and for
liquidated and agreed damages for Tenant's Default:
(i) The amount of Annual Rental and Additional Charges
which would be payable under this lease by Tenant if this Lease were
still in effect, less
(ii) The net proceeds of any reletting, after deducting
all of Landlord's reasonable expenses in connection with such
reletting, including without limitation all reasonable repossession
costs, brokerage commissions, legal expenses, attorneys' fees,
alteration and repair costs and expenses of preparation for such
reletting.
15
Tenant shall pay such damages to Landlord monthly as and when payments of Annual
Rent are due, and Landlord shall be entitled to recover from Tenant monthly as
the same shall arise. Tenant shall be liable for such damages on a monthly
basis, where or not in any prior year or years the net proceeds described in
subparagraph (ii) above shall have exceeded the Annual Rent and Additional
Charges described in subparagraph (i) above.
(5) In the event of any breach or threatened breach by
Tenant of any of the terms, covenants or agreements contained in this
Lease, Landlord shall have, in addition to any specific remedies provided
in this Lease, the right to invoke any right or remedy allowed by law or in
equity or by statute or otherwise, including the right to enjoin such
breach or threatened breach.
(6) Each right and remedy of Landlord provided for in this
Lease shall be cumulative and in addition to every other right or remedy
provided for in this Lease or now or hereafter existing at law or in equity
or by statute or otherwise; and the exercise or beginning of the exercise
by Landlord of any one or more of such rights or remedies shall not
preclude the simultaneous or later exercise by Landlord of any or all other
rights or remedies provided for in this Lease or now or hereafter existing
at law or in equity or by statute or otherwise.
(c) No waiver or breach of any term of this Lease shall be
construed as a waiver of any succeeding breach of the same or any other term.
18. ASSIGNMENT AND SUBLETTING
-------------------------
(a) Tenant shall not, either voluntarily or by operation of law,
sell, hypothecate or transfer this Lease, or sublet the Demised Premises or any
part thereof, or permit the Demised Premises or any part thereof to be occupied
by anyone other than Tenant or Tenant's employees or invitees (all of the
foregoing collectively referred to in this Section 18 as an "Transfer"), without
providing Landlord at least 30 days advance notice of such Assignment and
without the prior written consent of Landlord, such consent not to be
unreasonably withheld.
(b) No Transfer, even with the consent of Landlord, shall
relieve Tenant of its obligation to pay the Annual Rent and the Additional
Charges and to perform all the other obligations to be performed by Tenant
hereunder. The acceptance by Landlord of any payment of Annual Rent or
Additional Charges from any other person shall not be deemed to be a waiver by
Landlord of any provision of this Lease or to be a consent to any Assignment.
(c) Each Transfer shall be by a written instrument executed by
the assignor, sublessor or transferor, and by which the assignee, sublessee or
transferee shall agree in writing for the benefit of Landlord: (i) if a
sublessee, to abide by and in its use and occupancy of the Demised Premises to
comply with the terms and conditions of this Lease, or (ii) if an assignee of
Tenant's interest, to assume, to be bound by, and to perform the terms,
covenants and conditions of this Lease to be done, kept and performed by Tenant.
One executed copy of such written instrument shall be delivered to Landlord.
16
(d) Tenant has informed Landlord that Tenant is negotiating to
sublet all or a portion of the Demised Premises to ASM Lithography, Inc. Tenant
represents and warrants to Landlord that ASM Lithography, Inc. intends to use
the Demised Premises for the following purposes: United States corporate
headquarters, research and development and training facility. Based upon the
foregoing representation, Landlord confirms that the foregoing described use is
a "Permitted Use" under this Lease as well as a "Statutory Use" (as that term is
defined in Article 38 below).
19. HYPOTHECATION OF LEASEHOLD ESTATE
---------------------------------
(a) Tenant is hereby given the right, at any time and from time
to time, to mortgage its leasehold estate in the Demised Premises (but in no
event the fee or Landlord's leasehold estate), provided that any such leasehold
mortgage shall be subject and subordinate to the rights of Landlord hereunder.
As used in this Section and throughout this Lease, the noun "mortgage" shall
include a deed of trust, the verb "mortgage" shall include the creation of a
deed of trust, the word "mortgagee" shall include the beneficiary under a deed
of trust, and the terms "foreclose" or "foreclosure" shall include a trustee's
sale under a deed of trust as well as a foreclosure by judicial process.
(b) If a mortgagee shall have given Landlord, before any Default
shall have occurred hereunder, a written notice specifying the name and mailing
address of the mortgagee, then Landlord shall not terminate this Lease by reason
of the occurrence of any Default hereunder unless Landlord shall have given the
mortgagee a copy of its notice to Tenant of such Default addressed to the
mailing address last furnished by the mortgagee, and such Default shall not have
been cured by said mortgagee as provided in Sections 19 (c) or 19 (d) below.
(c) Tenant irrevocably directs that Landlord accept, and
Landlord agrees to accept, performance by any such mortgagee of any term,
covenant, agreement, provision, condition or limitation on Tenant's part to be
performed or observed as though performed or observed by Tenant, provided such
performance by said mortgagee shall occur within the time prescribed therefor in
this Lease, plus an additional grace period of thirty (30) days thereafter or,
if said Default is curable but not within said thirty (30) day period, then
within such additional time as may be necessary to cure the same provided the
mortgagee commences the curing thereof within such thirty (30) day period and
thereafter prosecutes the curing of such Default to completion with all due
diligence; provided, however, with respect to any Default hereunder which cannot
be cured by said mortgagee until it obtains possession of the Demised Premises,
the provisions of Section 19 (d) shall apply.
(d) In the event of a Default by Tenant under this Lease which
annot be cured by a mortgagee without first obtaining possession of the Demised
Premises, then, and notwithstanding any other provision contained in this Lease,
Landlord shall not terminate this Lease by reason of such Default if (i) said
mortgagee, within the thirty (30) day grace period set forth in Section 19(c)
shall have commenced, and thereafter diligently proceeds with, an appropriate
proceeding to foreclose such mortgage or otherwise obtains possession of the
17
Demised Premises, and (ii) said mortgagee shall have cured such Default within
30 days following its obtaining possession of the Demised Premises (or, if said
Default is curable but not within said thirty [30] day period, then within such
additional time as may be necessary to cure the same provided the mortgagee
commences the curing thereof within such thirty [30] day period and thereafter
prosecutes the curing of such Default to completion with all due diligence).
(e) During the pendency of any foreclosure proceedings,
mortgagee shall fully perform all the obligations of Tenant under this Lease
that can be performed by such mortgagee without possession of the Demised
Premises (including, but not limited to, payment of all Rent, all Additional
Charges, and any and all other monies due and payable by Tenant hereunder)-
provided, however, that if such mortgagee obtains possession of the Demised
Premises during the time that it is enforcing its foreclosure remedy or as a
result thereof, then such mortgagee shall perform fully all of Tenant's
obligations under this Lease. In the event such mortgagee or any purchaser at a
judicial or non-judicial foreclosure sale ("purchaser") acquires title to the
leasehold estate through such a foreclosure proceeding, or otherwise, it shall
thereupon become subrogated to all the rights of the Tenant under this Lease
whereupon:
(i) Tenant shall have no further right hereunder; and
(ii) Such mortgagee or purchaser shall forthwith be
obligated to assume and perform each and all of Tenant's obligations
and covenants hereunder.
(f) In the event such mortgagee or purchaser acquires title to
the leasehold estate of Tenant, then, at any time thereafter when said mortgagee
or purchaser is not then in default under this Lease, Landlord shall, upon
written request of mortgagee or purchaser deliver a new lease of the Demised
Premises to mortgagee or purchaser. The new lease (whether it be granted to the
mortgagee or purchaser) shall have a term equal to the remainder of the Term of
this Lease and shall be upon the terms and conditions herein contained, except
for requirements which are no longer applicable or have already been performed.
Mortgagee or purchaser shall have the right to a new lease as set forth above
provided that mortgagee or purchaser shall reimburse Landlord for all of
Landlord's expenses, including reasonable attorneys' fees, incident to such
efforts.
(g) Upon the written request of any mortgagee or prospective
mortgagee, and for the benefit of said mortgagee or its nominee, Landlord will
promptly deliver to said mortgagee a certificate setting forth the matters set
forth in Section 21.
(h) Notwithstanding anything to the contrary contained in this
Section 19, the mortgagee, on or after acquiring ownership of Tenant's leasehold
estate, may assign this Lease without the necessity of obtaining Landlord's
consent and, upon any such assignment, provided such assignee shall assume and
agree to perform and be bound by all of the terms hereof, be released from all
liability hereunder except for obligations occurring during its ownership of
said leasehold estate.
18
20. SUBORDINATION
-------------
(a) This Lease shall be subject and subordinate at all times to
the Ground Lease, and to the lien of any mortgages or deeds of trust in any
amount or amounts whatsoever now or hereafter placed on or against the Demised
Premises, the Ground Lease, or Landlord's leasehold estate in this Lease without
the necessity of the execution and delivery of any further instruments on the
part of Tenant to effectuate such subordination; provided, however, that so long
as no Default exists, the terms of this Lease shall not be affected by
termination proceedings in respect to the Ground Lease or by foreclosure or
other proceedings under such mortgages or deeds of trust, Tenant hereby
agreeing, at the written request of the Ground Lessor, or the purchaser in such
foreclosure or other proceedings, to attorn to the Ground Lessor, or to such
purchaser, as applicable (provided the Ground Lessor or such purchaser agrees to
recognize Tenant's leasehold estate and not disturb Tenant's tenancy so long as
Tenant is not in Default under any of the terms, covenants or conditions of this
Lease), or, at Ground Lessor's or such purchaser's option, as the case may be,
to enter into a new lease for the balance of the term hereof upon the same terms
and provisions as are contained in this Lease. Notwithstanding the foregoing,
Tenant shall execute and deliver such further instrument or instruments
evidencing such subordination of this Lease to the Ground Lease, or the lien of
any such mortgage or mortgages or deeds of trust as may be requested by Landlord
within twenty (20) days from Tenant's receipt of such request provided such
instrument also evidences Tenant's rights of recognition and non-disturbance.
(b) Any transfer by Landlord of its leasehold estate under this
Lease shall be subject to the rights and obligations of Tenant hereunder; and
Tenant shall attorn to Landlord's transferee. Upon any such transfer and the
assumption of liability therefor by Landlord's transferee, and written notice of
such transfer to Tenant, Landlord shall be and is hereby entirely freed and
released of all liability under any and all of its covenants and obligations
contained in or derived from this Lease arising out of any act or omission
related to the Project or this Lease occurring after the consummation of such
transfer.
(c) To evidence the agreements set forth in paragraphs (a) and
(b) above, simultaneously with the execution of this Lease, Ground Lessor,
Landlord and Tenant shall execute and record a Recognition, Non-Disturbance and
Attornment Agreement in the form of Exhibit D attached hereto.
21. ESTOPPEL CERTIFICATE
--------------------
(a) Upon receipt of a written request from the other, Landlord
and Tenant shall each, from time to time, and within twenty (20) days from
receipt of such request, execute, acknowledge and deliver a statement in writing
(i) certifying that this Lease is unmodified and in full force and effect (or,
if modified, stating the nature of such modification and certifying that this
Lease as so modified, is in full force and effect) and the dates to which the
rental and other charges are paid in advance, if any, and (ii) acknowledging
that there are not, to its knowledge, any uncured defaults on the part of the
other hereunder, or specifying such defaults
19
if any are claimed. Any such statement may be relied upon by a prospective
purchaser or encumbrance of all or any portion of an estate in the Demised
Premises.
(b) Failure to deliver such statement within such time shall be
conclusive (i) that this lease is in full force and effect, without modification
except as may be represented by the party requesting the certificate, (ii) that
there are no uncured defaults in performance by the party requesting the
certificate, and (iii) that all Annual Rent and Additional Charges have been
paid as of the date set forth in such certificate.
22. CONFLICT OF LAWS
----------------
The Lease shall be governed by and construed pursuant to the laws
of the State of Arizona and it is agreed that the venue of any legal suit or
action for enforcement of any obligation contained herein shall be Maricopa
County, Arizona. This Lease shall not be construed either for or against
Landlord or Tenant, but rather shall be interpreted in accordance with the
general terms of the language in an effort to reach an equitable result.
23. STATUS OF TENANT
----------------
Tenant covenants that it is a valid and existing corporation
under the laws of the State of Minnesota, that it is duly authorized to transact
business in the State of Arizona, and that it has full right and authority to
enter into this Lease.
24. SUCCESSORS AND ASSIGNS
----------------------
Except as otherwise provided in this Lease, all of the covenants,
conditions and provision of this Lease shall be binding upon and shall inure to
the benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns.
25. ATTORNEYS' FEES
---------------
In the event that either Landlord or Tenant bring suit against the
other because of the breach of any provision of this Lease, then all costs and
expenses, including reasonable attorneys' fees, incurred by the prevailing party
therein shall be paid by the other party, which obligation on the part of the
other party shall be deemed to have accrued on the date of the commencement of
such action and shall be enforceable whether or not the action is prosecuted to
judgment.
26. PERFORMANCE BY TENANT
---------------------
All covenants to be performed by Tenant shall be performed at Tenant's
sole cost and expense and without any abatement of Annual Rent or Additional
Charges. If Tenant shall fail to pay any sum of money, other than Annual Rent,
required to be paid by it hereunder or shall fail to perform any other act on
its part to be performed hereunder, and such failure shall continue for ten (10)
days after notice thereof by Landlord, Landlord may, without releasing Tenant
from any obligations, but shall not be obligated to, make any such payment or
perform any such other act
20
on Tenant's part to be made or performed. All sums so paid by Landlord, and all
necessary incidental costs shall bear interest thereon at an annual rate of two
(2) percentage points above the annual interest rate published from time to time
by The Wall Street Journal under the masthead "Money Rates" as the Prime Rate in
effect at the due date (and thereafter adjusted quarterly, but not more than the
maximum contractual rate permissible by law), from the date of such payment by
Landlord and shall be payable to Landlord on demand. In the event that The Wall
Street Journal ceases to publish a Prime Rate, then interest shall be calculated
with reference to a equivalent index selected by Landlord.
27. MORTGAGEE PROTECTION
--------------------
In the event of any default on the part of Landlord, Tenant will give
notice by registered or certified mail to any beneficiary of a deed of trust or
mortgagee of a mortgage covering Landlord's leasehold estate under this Lease
whose address shall have been furnished it, and shall offer such beneficiary or
mortgagee a reasonable opportunity to cure the default, including time to obtain
possession of the Demised Premises by power of sale or a judicial foreclosure,
if such should prove necessary to effect a cure.
28. WAIVER
------
The waiver by either Landlord or Tenant of any breach of any term
herein contained shall not be deemed to be a waiver of any subsequent breach of
the same or any other term herein contained, nor shall any custom or practice
which may grow up between the parties in the administration of the terms hereof
be deemed a waiver of, or in any way affect, the rights of either Landlord or
Tenant to insist upon the performance by the other in strict accordance with
said terms. The subsequent acceptance of Annual Rent or any Additional Charges
by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant
of any term of this Lease, other than the failure of Tenant to pay the Annual
Rent or Additional Charges so accepted, regardless of Landlord's knowledge of
such preceding breach at the time of acceptance of such Annual Rent or
Additional Charges.
29. EXAMINATION OF LEASE
--------------------
Submission of this instrument for examination or signature by Tenant
does not constitute a reservation of or option for Lease, and it is not
effective as a Lease or otherwise until execution by and delivery to both
Landlord and Tenant.
30. TIME
----
Time is of the essence with respect to the performance of every
provision of this Lease in which time or performance is a factor.
31. PRIOR AGREEMENTS, AMENDMENTS
----------------------------
This Lease contains all of the agreements of the parties hereto with
respect to any matter covered or mentioned in this Lease, and no prior agreement
or understanding pertaining to
21
any such matter shall be effective for any purpose. No provision of this Lease
may be amended or added to except by an agreement in writing signed by the
parties hereto or their respective successors in interest.
32. SEVERABILITY
------------
Any provision of this Lease which shall prove to be invalid, void or
illegal in no way affects, impairs or invalidates any other provision hereof,
and such other provision shall remain in full force and effect.
33. RECORDING
---------
A Memorandum of Lease in the form attached hereto as Exhibit E shall
be executed and recorded promptly after the full execution of this Lease.
34. LIMITATION ON LIABILITY
-----------------------
In consideration of the benefits accruing hereunder, Tenant and all
successors and assigns covenant and agree that, in the event of any actual or
alleged failure, breach or default hereunder by Landlord, Tenant shall not have
recourse against any of the assets of Landlord except Landlord's leasehold
estate under this Lease and Landlord's leasehold estate under the Ground
Sublease.
35. NONSUBORDINATED SUBLEASE
------------------------
This is a nonsubordinated sublease. Neither Ground Lessor nor Landlord
is obligated to subordinate its rights in the Demised Premises to any loan or
money encumbrance that Tenant shall place against Tenant's subleasehold
interest.
36. CONSENT OF LANDLORD AND TENANT
------------------------------
In the event of the failure of Landlord or Tenant to give any consent
or approval required herein, if it is either provided herein or held to be that
any such consent or approval shall not be unreasonably withheld or delayed, the
requesting party shall be entitled to seek specific performance at law and shall
have such other remedies as are reserved to it under this Lease, but in no event
shall Landlord or Tenant be responsible for damages to anyone for such failure
to give consent or approval.
37. DARK PERIOD
-----------
In the event the Demised Premises are not occupied with at least 25%
of the Floor Area of the Demised Premises being actively used for a period of
730 consecutive days ("Dark Period"), then Landlord after notice to Tenant as
provided below and to any trust deed beneficiary or mortgagee as provided in
Section 27 above (a "Lender"), shall have the right, but not the obligation, to
terminate this Lease and retake possession of the Demised Premises unless within
(sixty) 60 days after the giving of Landlord's notice of intent to terminate:
22
a. The Demised Premises are occupied with at least 25% of the
Floor Area of the Demised Premises being actively used, or
b. Tenant provides to Landlord reasonable evidence that Tenant
is actively and diligently exercising such rights or remedies available to
Tenant to cause a sublessee or sublessees approved by Landlord pursuant to
Section 18 above (an "Approved Sublessee") to end the Park Period, or
C. Tenant or any Approved Sublessee provides to Landlord
reasonable evidence that the Approved Sublessee is actively and diligently
exercising commercially reasonable efforts to assign or sublease its interest in
the Demised Premises and such efforts thereafter are diligently continued to end
the Dark Period, or
d. Tenant or any Lender provides Landlord with reasonable
evidence that the Lender is actively and diligently exercising its rights and
remedies under its deed of trust or mortgage to cause Tenant pursuant to Section
18 above to end the Dark Period (the foregoing notice and cure rights provided
to a Lender are not in limitation of the rights provided to a Lender under
Section 27 above); and
e. At all times Tenant shall continue to maintain or cause the
Demised Premises to be maintained in accordance with the standards prescribed in
this Lease and in the Restrictions.
Upon such termination, Tenant shall have no further fights or obligations under
this Lease.
38. TITLE TO BUILDINGS AND IMPROVEMENTS
-----------------------------------
It being the intent of the parties that, at all times, Tenant shall
have only a leasehold interest in the Demised Premises, including the
Improvements, ownership of all Improvements shall automatically be vested in
Ground Lessor. Notwithstanding the foregoing, neither Landlord nor Ground Lessor
shall be entitled to claim depreciation on the Improvements for income taxation
purposes. Landlord and Tenant agree that title to the Improvements shall remain
vested in Ground Lessor only for so long as the Demised Premises are used for
uses enumerated in A.R.S. (S). 15-1636 ("Statutory Uses") as now existing or as
hereafter amended, or any successor provision. In the event Tenant or any
sublessee of Tenant engages in a use of the Demised Premises which is not a
Statutory Use, then, at Landlord's sole election, title to the Improvements
shall be deemed vested in Tenant effective as of the date Tenant (or a sublessee
of Tenant) engaged in a use which is not a Statutory Use and shall remain vested
in Tenant for the remainder of the Term.
39. SURRENDER
---------
Upon the expiration or other termination of the Term, Tenant shall
quit and surrender to Landlord the Demised Premises, including all Improvements,
buildings, replacements, changes, additions and other improvements thereon, with
all non-trade fixtures and equipment in or appurtenant thereto in their then
existing condition (but excluding any personal
23
property of Tenant) or, if requested by Landlord, shall clear the land, putting
the same into the same condition as existed prior to the execution of this
Lease.
40. RESTRICTIONS - AMENDMENTS
-------------------------
Tenant agrees that its construction, use, maintenance, ownership and
operation of the Demised Premises are subject to the Restrictions. Subject to
the limitations set forth in Section 6(I), Tenant specifically acknowledges and
agrees that Landlord may effect amendments to the Restrictions without the prior
written consent of Tenant so long as any such amendments (i) shall apply equally
and without discrimination to all persons entitled to the use and occupancy of
land within the Research Park, (ii) shall not prohibit or adversely affect the
use then being made of the Demised Premises or any use of the Demised Premises
permitted at the time of execution of this Lease, (iii) shall not permit uses
within the Research Park which are not then common to first class research parks
located within the southwestern United States, and (iv) do not, in Tenant's
reasonable judgment, impose an excessive financial burden on Tenant. Tenant
further agrees upon reasonable advance written notice to allow Landlord to enter
upon and inspect the Demised Premises during Tenant's normal working hours for
purposes of monitoring Tenant's compliance with said Restrictions.
41. QUIET POSSESSION
----------------
Landlord agrees that Tenant, upon paying the rent, Additional Charges
and performing all other covenants and conditions of this Lease, may quietly
have, hold and enjoy the Demised Premises during the Term hereof or any renewal
thereof. It is further the intention of the parties hereto that the covenants of
this Lease be independent of each other.
42. WATER RESOURCES
---------------
It is the announced policy of the State of Arizona, that groundwater
resources be conserved and therefore, with respect to any landscaped area of the
Demised Premises as required by the Restrictions, Tenant will use only those
plants and planting materials that have been approved for use in the Research
Park by the Arizona Department of Water Resources. Upon request, Landlord will
furnish Tenant with a listing of such approved plants and planting materials.
Furthermore, Tenant will not allocate more than 15% of its landscaped area to
turf. Furthermore, no more than 20% of the turned area developed by Tenant will
be overseeded with any seed variety during the winter dormancy period for
Bermuda grass. Furthermore, no outdoor water bodies such as fountains and
reflecting ponds will be installed by Tenant. For purposes of this Section 42,
"landscaped area" shall mean all areas of the Demised Premises not improved with
Improvements, parking areas and driveways.
43. NOTICES
-------
Any notice required or permitted to be given hereunder must be in
writing and may be given by personal delivery or by mail, and if given by mail
shall be deemed given if sent by registered or certified mail addressed to
Tenant, or to Landlord at the addresses set forth in the
24
Fundamental Lease Provisions. Either may, by written notice to the other,
specify a different address for notice purposes.
44. BROKERS
-------
(a) Except as set forth in (b) and (c) below, each party warrants
to the other party that the warranting party had no dealings with any real
estate broker or agent in connection with the negotiation of this Lease, and
that it knows of no real estate broker or agent who is or might be entitled to a
commission in connection with this Lease and agrees to hold the other party
harmless from any claims of any brokers claiming a commission on account of any
actions of the warranting party.
(b) Landlord and Tenant acknowledge that CB Commercial Real Estate
Group, Inc. (Xxxxxxx X. Xxxxx) ("Broker") has been retained, pursuant to a
separate agreement, as a real estate broker in connection with this transaction.
The commission payable to Broker shall be paid by Landlord upon completion of
this transaction.
(c) Landlord has informed Tenant that Landlord is represented by
P.C.I. Associates, Ltd., and by Sunbelt Holdings Management, Inc., pursuant to
an asset management agreement with Landlord. Landlord shall be solely
responsible for all fees payable to said entities as a result of the closing of
this lease transaction.
45. NET LEASE
---------
It is the intention of the parties hereto that, except as otherwise
provided in this Lease, this Lease shall be a net lease and that Landlord shall
receive the rents herein reserved and all sums which shall or may become payable
hereunder by Tenant free from all taxes, charges and expenses of every kind or
sort whatsoever (exclusive of rentals due under either the Ground Lease or the
Ground Sublease) and that Tenant shall and will and hereby expressly agrees to
pay all such sums which, except for the execution and delivery of this Lease,
would have been chargeable against the Demised Premises and payable by Landlord.
46. TENANT'S TITLE INSURANCE
------------------------
At Tenant's option and at Tenant's sole expense, Tenant may obtain a
policy of title insurance insuring Tenant's subleasehold interest in the Demised
Premises. Tenant's obligations under this Lease shall not be contingent upon
the form or content of any such policy of title insurance.
47. SHARED DRIVEWAYS
----------------
Tenant acknowledges that the driveways which provide access to the
Demised Premises from River Parkway and from Science Drive are part of the
Common Area and that Tenant may use such driveways on a non-exclusive basis
with all other persons or entities entitled to the use of the Common Area.
25
48. HEIGHT RESTRICTIONS
-------------------
Tenant acknowledges that it has received a copy of that certain
Declaration of Height Limitations ("Declaration") recorded at Document No. 96-
0774295, Official Records of Maricopa County, Arizona. Tenant agrees to comply
with said Declaration.
[SIGNATURES ON FOLLOWING PAGE]
26
IN WITNESS WHEREOF, the parties have executed this Lease as of the day
and year first above written.
XXXXX-XXXXXXX RESEARCH PARK, INC.,
an Arizona nonprofit corporation
By: /s/ X. X. Xxxxxxx
----------------------------
X. X. Xxxxxxx
Its: President
LANDLORD
XXXX COMPANIES US, INC.,
a Minnesota corporation
By: /s/ Xxxx Xxxxxxxxxxxx
---------------------------
Name: Xxxx Xxxxxxxxxxxx
---------------------------
Title: VP
---------------------------
TENANT
27
