Exhibit 10.7
HFL-1
OFFICE LEASE
(Full Service Expense Stop Lease)
▇▇▇▇▇▇ ▇▇▇▇▇ LAKESIDE
PHASE I
Between
▇▇▇▇▇▇ ▇▇▇▇▇ LAKESIDE, LLC
and
MEDAIRE, INCORPORATED
▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇
TABLE OF CONTENTS
BASIC LEASE INFORMATION ... 1 - 3
PREMISES; PROJECT; ▇▇▇▇▇▇ ▇▇▇▇▇ LAKESIDE DEVELOPMENT; 'OWNERS'
ASSOCIATION ... 4
1.1 Description of Premises; Agreement to Lease; Project ... 4
1.2 Rentable Area ... 4
1.3 ▇▇▇▇▇▇ ▇▇▇▇▇ Lakeside; Easements; Additional CC&R's ... 4
1.4 Owners' Association 5
2. TERM ... 5
2.1 Lease Term ... 6
2.2 Term Commencement ... 6
2.3 Delay in Tender of Possession ... 6
2.4 Confirmation of Commencement Date ... 6
2.5 Holding Over ... 6
2.6 Lessor's Contingencies; Lessor's Right to Terminate 7
3. RENTAL ... 7
3.1 Base Rental 7
3.2 Payment ... 8
3.3 Additional Rent 8
3.4 Rental Taxes ... 8
4. OPERATING COSTS ... 8
4.1 Lessee's Obligation to Pay ... 9
4.2 Monthly Impound 9
4.3 Definition of Operating Costs 9
4.4 Definition of Parking Facilities 13
4.5 Amounts Excluded from Operating Costs; Application of Income ... 13
4.6 Abatement of Real Estate Taxes 14
4.7 Lessee's Prorata Share ... 14
4.8 Verification of Operating Costs 14
4.9 Adjustment for Partial Vacancy ... 15
5. SECURITY DEPOSIT ... 15
5.1 Initial Security Deposit 15
5.2 Increased Security Deposit ... 15
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6. USE OF PREMISES ... 16
6.1 Permitted Uses ... 16
6.2 Compliance with Insurance Requirements 16
6.3 Waste, Nuisance, Etc ... 16
6.4 Area Above Standard Finish Ceiling Line ... 17
6.5 Common Areas 17
6.6 Compliance with Laws 17
6.7 Rules and Regulations ... 17
6.8 Project Signs 17
6.9 Hazardous Substances 18
7. CONDITION OF PREMISES; CONSTRUCTION ... 18
7.1 Condition of Premises 18
7.2 Construction ... 18
8. BUILDING SERVICES 19
8.1 Services 19
8.2 Interruption of Services 19
8.3 Prohibitions; Excess Utilities ... 20
8.4 Utility Deregulation ... 20
8.4.1 Lessor Controls Selection of Power Provider 20
8.4.2 Lessee Shall Give Lessor Access ... 21
8.4.3 Lessor Not Responsible for Interruption of Service 21
8.5 District Cooling Services ... 21
8.6 Telecommunications Provider ... 22
9. MAINTENANCE AND REPAIR ... 23
9.1 Lessor's Obligations ... 23
9.2 Lessee's Obligations ... 24
10. ALTERATIONS TO PREMISES ... 24
10.1 Lessor's Prior Written Consent Required ... 24
10.2 Alterations Become Part of Premises 25
11. LIENS 25
12. LESSOR'S ENTRY ... 26
13. INDEMNITY; WAIVER ... 26
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14. INSURANCE ... 27
14.1 Types of Insurance ... 27
14.2 Notice of Insurance ... 27
14.3 Waiver of Subrogation ... 28
15. DAMAGE OR DESTRUCTION ... 28
15.1 Termination ... 28
15.2 Repair ... 28
15.3 No Abatement of Rent ... 29
16. CONDEMNATION ... 29
16.1 Termination ... 29
16.2 Abatement of Rent ... 29
16.3 Award ... 30
16.4 Restoration ... 30
16.5 Date of Condemnation ... 30
17. QUIET ENJOYMENT ... 30
18. ESTOPPEL CERTIFICATE ... 30
19. MASTER LEASE; LENDER; SUBORDINATION ... 31
19.1 Master Lease ... 31
19.2 Lease Subordinate to Liens ... 31
20. ASSIGNMENT AND SUBLETTING ... 32
20.1 Lessor's Consent Required ... 32
20.2 No Release of Lessee ... 32
20.3 Attorneys' Fees ... 33
20.4 Corporations, Associations and Partnerships ... 33
20.5 No Merger ... 33
21. [INTENTIONALLY DELETED] 33
22. ABANDONMENT OF PREMISES ... 33
23. LESSEE'S PROPERTY ... 33
23.1 Lessee's Property ... 33
23.2 Removal ... 34
23.3 Taxes ... 34
24. SURRENDER ... 34
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25. PARKING ... 34
25.1 Surface Parking 34
25.2 P-1 Parking Structure; Underground Parking Facility ... 35
25.3 Parking Ratio ... 37
26. FORCE MAJEURE ... 37
27. RIGHTS RESERVED BY LESSOR ... 37
28. NOTICES ... 37
29. DEFAULTS; REMEDIES ... 38
29.1 Defaults 38
29.2 Remedies 38
29.3 Reletting the Premises 40
29.4 No Waiver ... 40
29.5 Late Charges 41
29.6 Interest 41
29.7 Attorneys' Fees ... 41
30. LESSOR LIABILITY ... 41
30.1 Default by Lessor ... 41
30.2 Sale of Lessor's Interest 42
30.3 No Liability for Loss, Theft, Etc 42
30.4 Lessor's Liability 42
31. GENERAL ... 43
31.1 Captions ... 43
31.2 Time of the Essence ... 43
31.3 No Partnership; No Third Party Rights 43
31.4 Entire Agreement ... 43
31.5 Joint and Several Obligations 43
31.6 Authority to Execute 43
31.7 Arizona Law ... 43
31.8 Partial Invalidity ... 44
31.9 Incorporation of Exhibits ... 44
31.10 Waiver of Notice 44
31.11 Binding on Successors and Assigns ... 44
31.12 Impartial Interpretation 44
31.13 Not Binding Until Signed 44
31.14 No Recording ... 44
31.15 Calendar Days
iv
31.16 Lessee's Financial Statements ... 44
31.17 Brokers ... 45
31.18 Waiver and Release 45
31.19 Consent of Lessor 45
31.20 Other Tenants ... 45
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BASIC LEASE INFORMATION
LEASE DATE: ▇▇▇▇▇ ▇, ▇▇▇▇
▇▇▇▇▇▇: ▇▇▇▇▇▇ ▇▇▇▇▇ Lakeside, LLC, an Arizona limited liability company
Address: c/o SunCor Development Company
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Property Manager and Corporate Counsel
Fax number: ▇▇▇-▇▇▇-▇▇▇▇
LESSEE: MedAire, Incorporated, an Arizona corporation
Address: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Fax number: (▇▇▇) ▇▇▇-▇▇▇▇
PREMISES: Suite Number: 610 Floor: 6th
Rentable Area: 16,424 square feet (SEE SECTION 1.2)
BUILDING: The Premises are within the Building known as ▇▇▇▇▇▇ ▇▇▇▇▇ Lakeside
Phase I, with the street address noted below, located at the
northeast corer of Mill Avenue and Rio Salado Parkway, Tempe,
Arizona.
STREET ADDRESS OF BUILDING: ▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇
RENTABLE AREA OF THE BUILDING: 202,000 square feet (SEE SECTION 1.2)
LESSEE'S PRO-RATA SHARE OF RENTABLE AREA: 8.13%
TERM: (See Section 2):
Commencement Date: September 1, 2002
Termination Date: December 31, 2009
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BASE RENTAL:
Annual Monthly Rent per square foot
Lease Term Rental Rental per year of Rentable Area
---------- ----------- ---------- -------------------------
Months I through 62* $427,024.00 $35,585.33 $26.00
Months 63 through 88 $459,872.00 $38,322.67 $28.00
* See Section 3.5 for rent abatement provisions
EXPENSE STOP (YEARLY): $6.00 times the number of square feet of Rentable Area in
the Premises. (NOTE: Certain tax abatement benefits applicable to the Building
and adjacent land are not included in the Expense Stop figure - see Section
4.6).
PERMITTED USE: Lessee shall use the Premises in a respectable and reputable
manner for the operation of MedAire, Incorporated's primary business of selling
and providing medical emergency consulting services to airlines and other
customers, security consulting services and ancillary uses directly related to
the same, including without limitation the training of employees and clients as
an ancillary use in connection with its primary business as described above, and
for no other purpose.
TENANT IMPROVEMENT ALLOWANCE: $432,210.00 (total allowance for entire Premises
calculated as follows: $30.00 times 14,407, which is the number of usable square
feet selected by Lessor to calculate the Tenant Improvement Allowance; rentable
square feet have been used to calculate Base Rental). For Lessor's Work, see
Section 7.2 and Exhibit "C".
FIRST MONTH'S RENT: [Intentionally Omitted]
SECURITY DEPOSIT: $35,585.33 - (See Section 5)
REQUIRED INSURANCE: (Article 14):
Fire Damage Liability Endorsement: Two Hundred Fifty Thousand Dollars
($250,000.00)
Commercial General Liability Insurance: Three Million Dollars-Combined
Single Limit ($3,000,000)
All-Risk Insurance on Lessee's Personal Property: See Section 14.1.2 for
required coverage.
Business Interruption: See Section 14.1.3.
2
PARKING SPACES AND PARKING RENTAL (If none, state "NONE"):
Number
Type of Parking of Spaces
--------------- ------------
Executive Parking (1) 10
Reserved Covered (2) -0
Unreserved (2) 65
Total Parking Rental = $800.00/mo
Lessor and Lessee agree that, so long as Lessee is not in default under this
Lease beyond applicable cure periods as set forth in Section 29.1 below, Lessee
shall be entitled to free parking for the above-mentioned parking spaces for the
first twenty- two (22) months of the Lease Term. At any time when Lessee is in
default during said 22-month period, Lessee shall pay to Lessor the sum of
$800.00 per month for said parking spaces, which amount shall be due in advance
upon demand by Lessor. In any event, Lessee shall begin paying to Lessor on the
first day of the 231 month of the Lease Term, and on the same day of each month
thereafter through the duration of the Lease Term, the amount of $800.00 in
advance for the monthly parking fee for said parking spaces.
(1) located below grade beneath the Building (See Section 25)
(2) located in the P-1 Parking Structure (See Section 25)
BROKERS (see Section 31.17):
Lessor's Broker: CB ▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc.
Address: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Lessee's Broker: Westmark Realty Partners LLC
Address: ▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
The foregoing Basic Lease Information is part of the Lease. Each reference in
the Lease to any of the Basic Lease Information shall mean the respective
information set forth above. In the event of a conflict, the Lease shall
prevail. Lessee acknowledges that it has read and understands all of the
provisions contained in the entire Lease and all Exhibits which are a part
thereof and agrees that the Lease, including the Basic Lease Information and all
Exhibits, reflects the entire understanding and reasonable expectations of
Lessor and Lessee regarding the Premises.
Lesee's Initials
3
OFFICE LEASE
1. PREMISES; PROJECT; ▇▇▇▇▇▇ ▇▇▇▇▇ LAKESIDE DEVELOPMENT; OWNERS'
ASSOCIATION
1.1 Description of Premises; Agreement to Lease; Project. On the terms
and conditions contained herein, Lessor hereby leases to Lessee and Lessee
hereby leases from Lessor those premises referred to in the Basic Lease
Information and designated on the floor plan(s) attached hereto as Exhibit "A"
(the "Premises") . The Premises shall have an upper boundary of the underside of
the floor immediately above the Premises (subject to the use restriction
contained in Section 6.4), and a lower boundary of the unfinished surface of the
floor upon which the Premises are situated. The Building of which the Premises
are a part with the address set forth in the Basic Lease Information (the
"Building") are a part of that portion of ▇▇▇▇▇▇ ▇▇▇▇▇ Lakeside (as hereafter
defined) designated for office, retail and parking uses as generally outlined on
Exhibit "A-1" attached hereto (the "Project").
1.2 Rentable Area. THE PARTIES AGREE THAT FOR PURPOSES OF CALCULATING
BASE RENTAL AND LESSEE'S PRO-RATA SHARE, (A) THE PREMISES WILL BE DEEMED TO
CONTAIN A RENTABLE AREA COMPRISING THE NUMBER OF SQUARE FEET DESIGNATED IN THE
BASIC LEASE INFORMATION, AND (B) THE BUILDING WILL BE DEEMED TO CONTAIN A
RENTABLE AREA COMPRISING THE NUMBER OF SQUARE FEET DESIGNATED IN THE BASIC LEASE
INFORMATION, AND (C) SAID SQUARE FOOTAGE OF THE PREMISES AND THE BUILDING ARE
STIPULATED AMOUNTS BASED ON LESSOR'S METHOD OF DETERMINING SAID SQUARE FOOTAGE
TO INCLUDE A LOAD FACTOR AND OTHER CONSIDERATIONS AND MAY NOT REFLECT THE ACTUAL
AMOUNT OF FLOOR SPACE AVAILABLE FOR THE USE OF LESSEE OR OTHER TENANTS, AND WILL
NOT BE ADJUSTED TO REFLECT CHANGES DURING THE TERM OF THIS LEASE IN RENTABLE OR
USABLE AREA AS TYPICALLY CALCULATED USING BOMA STANDARDS.
1.3 ▇▇▇▇▇▇ ▇▇▇▇▇ Lakeside; Easements; Additional CC&R's. Lessee
acknowledges that the Project is part of a master-planned area known as ▇▇▇▇▇▇
▇▇▇▇▇ Lakeside ("▇▇▇▇▇▇ ▇▇▇▇▇ Lakeside"), which is or may be comprised of
office, retail, hotel, residential and other uses, together with a parking
structure and underground parking facilities. Lessee also acknowledges and
agrees that this Lease, Lessee's use of the Premises, and the exercise of any
rights set forth in this Lease are subject and subordinate to any and all
easements, covenants, conditions, restrictions, and similar matters of record
against the Project, including, without limitation, the Master Declaration of
Covenants, Conditions, Restrictions Development Standards and Easements for
▇▇▇▇▇▇ ▇▇▇▇▇ Lakeside, and the Declaration of Covenants, Conditions,
Restrictions Development Standards and Easements for ▇▇▇▇▇▇ ▇▇▇▇▇ Lakeside
4
West ("Existing CC&R's"). In addition, Lessee agrees that Lessor must reserve
full flexibility and the legal right to impose upon the Project such easements,
rights, dedications, plats and restrictions as Lessor deems necessary or
desirable, in its discretion, to facilitate the development, use and operation
of ▇▇▇▇▇▇ ▇▇▇▇▇ Lakeside, so long as such easements, rights, dedications, plats
and restrictions do not unreasonably and materially interfere with the use of
the Premises by Lessee. Lessor reserves to itself the right, from time to time,
to grant and record such easements, rights, dedications, plats and restrictions
as Lessor deems necessary or desirable with respect to the Project and/or ▇▇▇▇▇▇
▇▇▇▇▇ Lakeside, so long as such easements, rights, dedications, plats and
restrictions do not unreasonably and materially interfere with the use of the
Premises by Lessee ("Additional CC&R's"). The Existing CC&R's and the Additional
CC&R's are hereafter collectively referred to as the "CC&R's". Lessee shall not
be required or permitted to sign any of the foregoing documents, and Lessee
agrees that this Lease shall be subordinate and subject to all CC&R's recorded
by Lessor, including without limitation any amendments, modifications or
restatements of any such documents, whether or not of record prior to the
execution of this Lease.
1.4 Owners' Association. Lessor anticipates that one or more
associations of property owners within all or a portion of ▇▇▇▇▇▇ ▇▇▇▇▇ Lakeside
and/or the Project will be hereafter formed to own and/or operate the
Underground Parking Facilities and/or the P-1 Parking Structure (as those terms
are defined in Section 25), and/or to manage, operate, maintain and replace all
or portions of the common areas and common facilities outside of the Building
and other buildings within the Project and/or all of ▇▇▇▇▇▇ ▇▇▇▇▇ Lakeside,
together with property adjacent to ▇▇▇▇▇▇ ▇▇▇▇▇ Lakeside that will be maintained
and managed for the benefit thereof or as may be required by the City of Tempe
(each referred to herein as an "Owners' Association"). If and when an Owners'
Association is formed, Lessor reserves the right, in its discretion, to assign
to an Owners' Association, on terms acceptable to Lessor, all or a certain
portion of the duties and obligations of Lessor with respect to the maintenance,
repair, operation and replacement of the Underground Parking Facilities, and/or
the P-1 Parking Structure, and/or all or a portion of the common areas and
common facilities owned by Lessor within the Project located outside of the
Building (including those described in Section 4.3 with respect to Operating
Costs, as therein defined). Lessor will in turn pay assessments and other
charges to each Owners' Association, and Lessor shall have the right to include
the same in the Operating Costs under this Lease. Upon assumption of such duties
and obligations by an Owners' Association in writing, Lessor shall be
permanently relieved of any responsibility accruing thereafter with respect
thereto if the assignment is a permanent assignment, or if the assignment is for
a period of time, for the period of time specified in the assignment document.
2. TERM'
2.1 Lease Term. Except as provided herein, the term of this Lease
shall be for the period set forth in the Basic Lease Information, subject to
early commencement as provided in Section 2.2 ("Lease Term").
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2.2 Term Commencement. The Lease Term shall commence at 12:01 a.m. on
the Commencement Date, and shall end at 12:01 a.m. on the day following the
Termination Date set forth in the Basic Lease Information, provided that Lessee
has been granted the right to occupy and open for business in the Premises,
pursuant to Section 2.1 of Exhibit C, prior to the Commencement Date.
2.3 Delay in Tender of Possession. If Lessor is unable to tender
exclusive possession of the Premises to Lessee on or before the Commencement
Date for any reason whatsoever, including, without limitation, the holding over
of a previous occupant or Lessor's inability to complete any required
construction or delays caused by Lessee (as that term is defined in Exhibit "C"
attached hereto), Lessor shall not be liable to Lessee for any damages or losses
resulting therefrom and this Lease shall continue in full force and effect,
except that, unless the delay in tender of possession is the result of delays
caused by Lessee, then (i) the term hereof and Lessee's obligation to pay Base
Rental or other rental pursuant hereto shall commence on the day after Lessor
tenders possession of the Premises to Lessee (regardless of whether Lessee
actually takes possession as of that date), and (ii) the Termination Date shall
be advanced by the number of days that commencement of the term hereof was so
delayed. Notwithstanding the foregoing, in the event Lessor has not delivered
possession of the Premises within fifteen (15) days of the Commencement Date for
reasons other than delays caused by Lessee, Lessor shall pay to Lessee a fee in
the amount of $100 per day until possession of the Premises is delivered to
Lessee, which amount shall be paid within ten (10) days after Lessor delivers
possession to Lessee. If delay in tender of possession is the result of delays
caused by Lessee, Base Rental and other rental due hereunder shall commence as
of the Commencement Date. If Lessor, however, is unable to tender possession of
the Premises to Lessee on or before 90 days after the Commencement Date for
reasons other than delays caused by Lessee, Lessee shall be entitled to
terminate this Lease by written notice to Lessor given within 5 days after the
expiration of said 90-day period, which shall constitute Lessee's sole right and
remedy with respect thereto. Section 2.6 below shall prevail over this Section.
2.4 Confirmation of Commencement Date. If the term hereof commences as
herein provided on other than the Commencement Date, the parties shall confirm
in writing the date the term hereof commences and any adjustment to the
Termination Date, which confirmation shall be attached hereto and made a part
hereof
2.5 Holding Over. If Lessee remains in possession of the Premises
after the expiration or termination of this Lease with Lessor's written consent,
and no other lease is executed, Lessee shall be deemed a tenant on a
month-to-month basis on the terms and conditions herein, but shall pay the
monthly Base Rental in effect prior to the date of such expiration or
termination, together with Lessee's Pro-rata Share of Excess Operating Costs (as
defined in Section 4.2) and all other Rent owing hereunder. Either Lessor or
Lessee may terminate such month-to-month tenancy upon 30 days' prior written
notice. If Lessee remains in possession of the Premises after the expiration or
termination of this Lease without Lessor's written consent and without a new
lease in effect, then Lessee shall be a tenant at sufferance,
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Lessor shall be entitled to immediate possession, and Lessor shall be entitled
to collect from Lessee for each day of such possession (as Base Rental hereunder
and not as liquidated damages) an amount equal to 150% of the daily Base Rental
in effect prior to the date of such expiration or termination, together with
Lessee's Pro-rata Share of Excess Operating Costs and all other Rent owing
hereunder, and Lessee shall indemnify, defend and hold Lessor harmless from any
losses, damages, liabilities, obligations, expenses, fees and costs (including
attorneys' fees and costs) resulting from such holding over, provided that the
foregoing indemnity shall not apply to a holding over after the Termination Date
unless Lessor gives notice to Lessee at least 60 days prior to the Termination
Date that this Lease will terminate as of said date. Lessor's right to collect
such Base Rental and other Rent shall be in addition to and shall not preclude
concurrent, alternative or successive exercise of any other rights or remedies
available to Lessor.
2.6 Lessor's Contingencies; Lessor's Right to Terminate. Lessee
acknowledges and agrees that the Project, and adjacent buildings, the
Underground Parking Facilities, the P-1 Parking Structure and other improvements
planned for development as part of ▇▇▇▇▇▇ ▇▇▇▇▇ Lakeside, have not been
constructed and that construction will not commence unless and until the
following contingencies in favor of Lessor have been satisfied in all respects
suitable to Lessor in its discretion:
2.6.1 recording any CC&R's Lessor may require before or after it
commences construction of the Project or other portions of ▇▇▇▇▇▇ ▇▇▇▇▇ Lakeside
and/or opens the Project or other portions of ▇▇▇▇▇▇ ▇▇▇▇▇ Lakeside for
business; and
2.6.2 obtaining construction and permanent financing suitable to
Lessor for the planning, construction, development and operation of the Project.
If within eighteen (18) months from the date of this Lease or by
June 1, 2002, whichever is later ("Contingency Period"), the foregoing
contingencies are not satisfied to the satisfaction of Lessor (or waived in a
written notice from Lessor to Lessee), or the Premises are not substantially
completed by Lessor as provided in this Lease, then Lessor may terminate this
Lease by giving written notice thereof to Lessee within ten (10) days after the
expiration of the Contingency Period, in which event Lessor shall have no
further obligations under this Lease. The foregoing notwithstanding, if
completion of the Premises and/or the Project is delayed due to the acts of
Lessee, its agents, employees or contractors, then in addition to all remedies
available to Lessor at law or in equity, Lessor shall be entitled to extend the
Contingency Period by the amount of time lost as a result of such delay.
3. RENTAL.
3.1 Base Rental. Throughout the Lease term, Lessee shall pay to Lessor
as rental hereunder that sum identified as the monthly Base Rental in the Basic
Lease Information, as may be increased from time to time if so provided in the
Basic Lease Information, or in an addendum to this Lease. Base Rental shall be
paid in advance on the first day of each calendar
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month of the term hereof If the Term commences or terminates on other than the
first day of the calendar month, then the Base Rental for said partial month
shall be prorated on a per diem basis (based on a 30-day month), and shall be
paid in full on the first day of such partial month in which the term commences.
3.2 Payment. Base Rental and all other Rent and other sums payable
pursuant to this Lease shall be paid, without deduction, offset, prior notice or
demand, to Lessor at the address set forth in the Basic Lease Information, or at
such other place or to such other person as Lessor may from time to time
designate by notice hereunder. All payments shall be made in lawful money of the
United States of America.
3.3 Additional Rent. All sums due from Lessee to Lessor under this
Lease, including Base Rental, Lessee's Pro-rata share of Excess Operating Costs,
parking rental due to Lessor or its manager for any Parking Spaces (as defined
in Section 25) leased to Lessee, and other sums shall constitute rent due to
Lessor and may be referred to collectively from time to time as "Rent".
3.4 Rental Taxes. Together with, and in addition to, any payment of
rental or any other sums payable to or for the benefit of Lessor pursuant to
this Lease, Lessee shall pay to Lessor any excise, sales, occupancy, franchise,
privilege, rental, or transaction privilege tax levied by any governmental
authority upon Lessor (except Lessor's income tax) and/or the Premises as a
result and to the extent of such payments hereunder or as a result of Lessee's
use or occupancy of the Premises, and any taxes assessed or imposed in lieu of
or in substitution for any of the foregoing taxes whether now existing or
hereafter enacted.
3.5 Abatement of Base Rental. Notwithstanding any other provisions in
this Lease to the contrary, so long as Lessee is not in default under this Lease
beyond applicable cure periods as set forth in Section 29.1 below (otherwise,
Base Rental shall be due and full as set forth in the Basic Lease Information),
Lessee shall be entitled to the following Base Rental abatement or reduction of
Base Rental, as the case may be:
3.5.1 For months I through 4 of the Lease Term, Base Rental shall
▇▇▇▇▇ in full, and no monthly Base Rental will be due for said period, but any
other sums due under this Lease shall be due and payable.
3.5.2 The monthly Base Rental due for months 5 through 12 of the
Lease Term shall be $21,667.00 per month (calculated by using 10,000 rentable
square feet multiplied by $26.00), notwithstanding the amount set forth for such
period in the Basic Lease Information, but Lessee shall be required to pay all
other sums due under this Lease for said period.
4. OPERATING COSTS.
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4.1 Lessee's Obligation to Pay. In addition to the Base Rental and all
other sums payable pursuant hereto, Lessee shall pay to Lessor, commencing
January 1st of the first complete calendar year of the term of this Lease, and
continuing thereafter during the entire term hereof as additional rental
hereunder, Lessee's Pro-rata Share (as set forth in the Basic Lease Information
and Section 4.7) of that amount by which the Operating Costs (as defined in
Section 4.3 below) for each calendar year during the term hereof exceeds the
Expense Stop (as set forth in the Basic Lease Information).
4.2 Monthly Impound. Prior to January 1st of each calendar year during
the term of this Lease, Lessor shall prepare or cause to be prepared in good
faith an estimate of the total Operating Costs for the upcoming calendar year
for the Building and those Operating Costs for the entire Project allocated to
Lessor's portion of the Project. Should Lessee's Pro-rata Share of this
estimated amount exceed the Expense Stop (such excess shall hereinafter be
referred to as "Excess Operating Costs"), Lessee shall pay, concurrently with
the monthly Base Rental payments, an amount equal to one-twelfth (1/12) of
Lessee's Pro-rata Share of such Excess Operating Costs. Within 3 months after
the expiration of such calendar year, Lessor shall furnish Lessee with a
statement setting forth in reasonable detail the Operating Costs for such
calendar year, determined on a cash basis, as of December 31. If the amount paid
by Lessee towards Excess Operating Costs for such calendar year as provided for
above is greater than Lessee's Prorata Share of the actual excess as set forth
in the statement delivered by Lessor to Lessee for such calendar year, then
Lessor shall credit the additional amount paid by Lessee toward the next
installments of Base Rental, or, if at the end of the Term, reimburse said
amount to Lessee within thirty (30) days after the end of the Term. If the
amount paid by Lessee is less than Lessee's Prorata Share of the Excess
Operating Costs, then Lessee shall pay the additional amount to Lessor on or
before 30 days after receipt by Lessee of said statement. If the term of this
Lease terminates on other than the last day of a calendar year, Lessee's
Pro-rata Share of Excess Operating Costs for the year in which this Lease
terminates shall be prorated on a per diem basis (based on a 365-day year). If
Lessor's statement for said final year of the Lease discloses that Lessee has
underpaid or overpaid Lessee's Pro-rata Share, then Lessor or Lessee, as the
case may be, shall remit the difference to the other party on or before 15 days
after Lessee's receipt of said statement (or Lessor may apply the same against
any past due amounts Lessee may owe to Lessor). The provisions of this Section
shall survive the expiration or termination of this Lease.
4.3 Definition of Operating Costs. The term "Operating Costs" for
purposes of this Lease means all costs, expenses and fees now or hereafter
incurred by Lessor, an Owners' Association or the property managers thereof, in
managing, maintaining, repairing, replacing (except as limited by Section 4.5)
and operating the Building, the Project and all Parking Facilities (as defined
in Section 4.4), and certain areas which are adjacent to and benefit the Project
(whether or not presently incurred with respect to the Project and whether or
not now customary or in the contemplation of the parties), including, but not
limited to, the following:
4.3.1 Real property taxes and assessments and any other taxes
imposed or levied by any governmental entity upon the Project and/or the Parking
Facilities (including,
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without limitation, personal property taxes on equipment, fixtures and other
property of Lessor used in connection with the operation, repair and maintenance
thereof), and costs, expenses and fees (including reasonable attorneys' fees and
property tax consultants' fees) incurred by Lessor in contesting any of said
taxes.
4.3.2 Fees and charges for property management (consistent with
other Class A office buildings in the Phoenix metropolitan area), building
superintendents, telecommunications managers, monitoring personnel and other
services of independent contractors (including, without limitation, alarm and
monitoring services, maintenance of surface parking and loading areas and other
exterior portions of the common areas, window cleaning and replacement (except
as limited by Section 4.5), landscaping maintenance and replacement, elevator
maintenance, telecommunications riser and roof management/maintenance services,
lobby maintenance, maintenance of fountains and other water features and
maintenance of decorative items and artwork); and wages, charges, taxes, fringe
benefits or other labor costs for all onsite agents or employees engaged in the
operation, maintenance, cleaning, repairing, decoration, monitoring and
management of the Project, including without limitation (i) a facilities
coordinator that will coordinate the use of loading areas, trash removal and
other facilities benefiting the Project, a portion of which will be located in
the P-1 Parking Structure, and (ii) a telecommunications manager to manage,
oversee and operate all telecommunications facilities within or otherwise
serving the Building and/or the Project, including the use thereof and access
thereto by the telecommunication service providers for Lessee and other tenants,
provided that Lessor shall have the option, but not the duty, to hire a
facilities coordinator and/or a telecommunications manager in Lessor's sole
discretion.
4.3.3 Equipment, supplies and materials (new or replacement) used
in connection with the operation, maintenance, decoration, repairing and
cleaning of the Project and the Parking Facilities; the cost of water, sewer
service, gas, electricity, chilled water service provided for the Chilled Water
System (as defined in Section 8.5), and other utilities and services for the
Project and the Parking Facilities (except telephone service for lessees, which
shall be the obligation of each lessee, and any utilities to be paid by Lessee
pursuant to the terms of this Lease); the cost of refuse, garbage and trash
removal, collection and disposal; and the cost of vermin and pest control.
4.3.4 The cost of janitorial service for, and cleaning and other
care of, the Project and the Parking Facilities;
4.3.5 The cost and expense of use, upkeep, maintenance and repair
(including restoration and/or replacement of components, component parts,
equipment, systems, and other items necessary for the use, upkeep, updating
increased efficiency, compliance with applicable laws, operation and
maintenance), management and protection of all interior, exterior and below
grade portions of the Building and Project, including without limitation (i) the
roof membrane, structural elements of the roof and screening structures and
improvements on the roof of the Building; (ii) entryways; (iii) windows and
doors; (iv) elevators and related
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equipment; (v) signs and signage support structures; (vi) plumbing, electrical,
fire systems and sprinklers; (vii) heating, ventilating and air conditioning
systems, including the Chilled Water System; (viii) canopies, shading devices,
parapets and support columns and cables; (ix) retaining walls; (x) storage and
equipment rooms and similar areas; (xi) lighting facilities; (xii) utility lines
outside of the premises of a lessee; (xiii) hallways, stairways, lobby areas,
service corridors, benches, toilets and other interior common facilities; (xiv)
drainage systems and retention areas for the Project; (xv) landscape
maintenance, repair and replacement (including irrigation and sprinkler
systems); (xvi) all surface parking, parking meters and loading areas, (xvii)
public sidewalks, walkways and other public areas adjacent to the Project if
Lessor believes removal of trash and debris or other maintenance or repair work
would be beneficial to the Project, (xviii) telecommunications riser space,
conduits and similar areas, (xix) sidewalks, bike paths, pedestrian ways, roads,
curbs, and other paved or improved surfaces, including without limitation,
access roads and facilities for fire protection and to accommodate the needs of
the Maricopa County Flood Control District, (xx) all benches, bike racks,
traffic control signs and devices, and directional and identification signs,
(xxi) misting systems, and (xxii) monitoring systems.
4.3.6 The cost and expense of use, upkeep, maintenance and repair
(including restoration and/or replacement of components, component parts,
equipment, systems, and other items necessary for the use, upkeep, updating
increased efficiency, compliance with applicable laws, operation and
maintenance), management and protection of all interior, exterior and below
grade portions of the Parking Facilities, including without limitation (i)
entryways, ramps, driveways and parking areas; (ii) windows and doors; (iii)
elevators and related equipment; (iv) signs and signage support structures; (v)
plumbing, electrical, fire systems and sprinklers; (vi) heating, ventilating and
air conditioning systems, including the Chilled Water System; (vii) canopies,
shading devices, and support columns and cables; (viii) storage and equipment
rooms and similar areas; (ix) lighting facilities; (x) utility lines; (xi)
curbs, sidewalks, hallways, stairways, and other common facilities; (xii) booths
for parking fee collection, entryway gates, card systems and other improvements
regulating access to and from the Parking Facilities; (xiii) office areas for
personnel operating and maintaining the Parking Facilities; (xiv) all loading
areas, trash removal areas and facilities, and transformer rooms; (xv)
janitorial and storage rooms; (xvi) curbs, bumpers and other protective devices,
(xvii) the cost of painting, re striping and other traffic control markings,
signs and devices with respect to parking spaces, ramps, entryways and other
portions of the Parking Facilities, and (xviii) monitoring systems. Any other
provisions in this Lease to the contrary notwithstanding, Lessor reserves the
right to allocate those Operating Costs relating to Underground Parking
Facilities based on the number of Parking Spaces located under the Building
compared to all Parking Spaces in the Underground Parking Facilities.
4.3.7 The cost of fire insurance with extended and/or "all risk"
coverage, food insurance, general public liability insurance, business
interruption, rental income, and workmen's compensation insurance obtained for
the Project and/or the Building and all other insurance obtained from time to
time with respect to the Project and/or the Building.
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4.3.8 Capital improvements made to the Project or the Parking
Facilities after the year in which the same are substantially completed, which
improvements are required to comply with applicable laws, rules and regulations
or were undertaken with a reasonable expectation that they would result in more
efficient operation if Lessor reasonably determines that the cost to be incurred
is justified in comparison with the savings to be achieved during the useful
life of such improvements; provided that the cost of each such capital
improvement, together with any financing charges incurred in connection
therewith, shall be amortized over the useful life thereof and only that portion
attributable to each Operating Year shall be included herein for such Operating
Year.
4.3.9 All assessments, fees and charges due from Lessor with
respect to its portion of ▇▇▇▇▇▇ ▇▇▇▇▇ Lakeside under any CC&R's, including
assessments, fees and charges due to an Owners' Association responsible for
common facilities maintained, operated, repaired and replaced for the benefit of
property Owners in ▇▇▇▇▇▇ ▇▇▇▇▇ Lakeside.
4.3.10 Any costs and expenses shared by the Project or Lessor's
portion thereof with other portions of ▇▇▇▇▇▇ ▇▇▇▇▇ Lakeside (whether Lessor is
the owner and/or manager thereof), if the nature of such costs and expenses are
otherwise includable as Operating Costs as herein described, and if such
allocation is made on a reasonable and consistent basis that fairly reflects the
share of such costs actually attributable to the Building and the Project.
4.3.11 If and when an Owners' Association is formed for the
Project, any assessments, fees and charges due from Lessor to the Owners'
Association with respect to (i) those portions of the common areas and common
facilities within or adjacent to the Project outside of the Building or other
buildings and the P-1 Parking Structure, including without limitation, the
master drainage system and master utility system for ▇▇▇▇▇▇ ▇▇▇▇▇ Lakeside, and
access roads and facilities for fire protection and to accommodate the needs of
the Maricopa County Flood Control District, and/or (ii) the Parking Facilities,
the responsibility for which is assigned by the Lessor to the Owners'
Association as provided in Section 1.4 above, as may be set forth in a separate
agreement between Lessor and the Owners' Association and/or in the CC&R's.
4.3.12 Assessments, taxes and fees levied, assessed or imposed on
the Project in connection with the development of Tempe Town Lake, adjacent park
areas, the Rio Salado Parkway and similar improvements, including without
limitation assessments, taxes, and/or fees due with respect to (i) the Community
Facilities District (both for payment of the bonds related to the initial
development of the Tempe Town Lake and adjacent park facilities and related
improvements, and for the ongoing operation, maintenance and replacement of the
same), (ii) the Rio Salado Parkway Improvement District and the costs incurred
to place major electric lines underground and to develop the Rio Salado Parkway,
and (iii) payments due to Downtown Tempe Community, Inc.
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4.3.13 All costs and expenses incurred by Lessor or owed by
Lessor to another person or entity with respect to the maintenance, repair,
operation and replacement of those portions of the P-1 Parking Structure
dedicated for trash removal, loading and unloading areas, and utility,
transformer, and telecommunication rooms serving the Building and other
buildings within the Project, but only that portion of such costs and expenses
reasonably allocated to the Building based on the benefits received by the
Building compared to other buildings within the Project, as reasonably
determined by Lessor.
4.3.14 Reasonable reserve funds for all of the foregoing.
4.4 Definition of Parking Facilities. The term "Parking Facilities"
for purposes of this Lease means all surface parking within the Project and the
Underground Parking Facilities, but shall not include the P-1 Parking Structure
(except for the costs and expenses referred to in subsection 4.3.13 above)
unless and until Lessor elects to convey the P-1 Parking Structure to an Owners'
Association, and/or to assign to an Owners' Association all or a portion of
Lessor's Duties with respect to repair, maintenance, operation and replacement
(except as limited by Section 4.5) of the P-1 Parking Structure, in which event
the term "Parking Facilities" will thereafter be deemed to include the P-1
Parking Structure for purposes of this Lease.
4.5 Amounts Excluded from Operating Costs; Application of Income.
"Operating Costs" will not include any of the following: (i) costs of capital
improvements or capital repairs unless amortized over a period of five (5) or
more years on a straight line basis, with ten percent (10%) interest; provided,
however, that only the amortized portion may be included in the Operating Costs
for each year, (ii) costs of improvements, repairs or replacements covered by
insurance or reimbursed by third parties, (iii) repairs (including replacement
or rebuilding) caused or occasioned by insured casualty or condemnation, (iv)
the cost of repairing design or construction defects, (v) costs and expenses
related to investigation, removal and/or clean-up of hazardous substances (as
defined in Section 6.9), (vi) real estate commissions paid in connection with
the leasing of space within the Project; (vii) depreciation of the Building for
tax purposes; (viii) payments of principal and interest on any mortgages, deeds
of trust or other financing instruments relating to the financing of the Project
(except as described in subsection 4.3.8 above); (ix) costs directly related to
improving tenant space for leasing within the Building; (x) items subject to
reimbursement by, or chargebacks to, tenants in the Building pursuant to any
tenant lease; (xi) attorneys' fees, costs, disbursements, and other expenses
incurred in connection with negotiations or disputes with tenants or leasing,
renovating, or improving space for tenants or other occupants or prospective
tenants or other occupants; (xii) rental payments incurred in leasing air
conditioning systems (except temporary systems utilized in the event of an
emergency as a back-up system) and elevators; (xiii) repairs and maintenance for
items that are covered by guarantees or service contracts; (xiv) extra costs
incurred due to a breach of this Lease by Lessor which is not cured within
applicable grace periods; (xv) overhead and profit increments paid to
subsidiaries and affiliates of Lessor for management or other services to the
Project, or for supplies or other materials, to the extent the cost of such
services, supplies, or materials exceed
13
the cost of what would have been paid to affiliated parties on a competitive
basis; (xvi) compensation paid to clerks, attendants, or other persons in
commercial concessions operated by Lessor for its benefit and not the benefit of
the Project (and Operating Costs shall specifically include compensation paid to
clerks, attendants and other persons in connection with the Parking Facilities
and parking valet services); (xvii) promotional and advertising costs for the
Project; (xviii) wages, salaries and other compensation paid to Lessor's
employees who are not on-site on a full-time basis (except that the wages,
salaries, and other compensation paid to Lessor's employees working part-time at
the Project will be included in Operating Costs on a fair and equitable basis
based on time devoted by each such employee to the Project); (xix) costs for
acquiring and replacing sculptures, paintings, and other objects of art (but
costs incurred in maintaining, repairing, and cleaning the same shall be
included in Operating Costs); (xx) costs arising from Lessor's charitable or
political contributions; and (xxi) costs for services provided exclusively to a
single tenant. In addition, if major capital replacement or repair projects are
paid from a reasonable reserve fund, the cost of which Lessor may include in the
Operating Costs, it will not be necessary for Lessor to amortize and collect the
cost thereof on an amortized basis as provided in subsection (i) above.
4.6 Abatement of Real Estate Taxes. LESSEE IS HEREBY ADVISED THAT THE
MASTERLEASE (AS DEFINED IN SECTION 19.1) WILL BE EXECUTED BY LESSOR IN ORDER FOR
LESSOR TO OBTAIN THE BENEFITS OF TAX ABATEMENT UNDER APPLICABLE ARIZONA LAW.
ACCORDINGLY, THE ABATED TAXES ARE NOT INCLUDED WITHIN THE EXPENSE STOP SET FORTH
IN THE BASIC LEASE INFORMATION. LESSEE ALSO ACKNOWLEDGES AND AGREES THAT
OPERATING COSTS WILL INCREASE SIGNIFICANTLY WHEN THE TAX ABATEMENT IS NO LONGER
IN EFFECT AND TAXES FOR REAL AND PERSONAL PROPERTY ARE PAID.
4.7 Lessee's Prorata Share. Lessee's Pro-rata Share shall be the
percentage set forth in the Basic Lease Information.
4.8 Verification of Operating Costs. Lessor shall keep books, records
and accounts of the Operating Costs for each calendar year. Lessee shall have
the right, exercisable after it pays to Lessor Lessee's Pro-rata Share, but in
any event within 60 days after receipt by Lessee of the statement of Operating
Costs for the preceding year, during the regular business hours of Lessor, to
examine and inspect such books, records and accounts. Lessee may, within said
60-day period, cause an audit of the Operating Costs by a certified public
accountant. If the statement of Operating Costs previously submitted to Lessee
is more than the amount of Operating Costs shown by such audit, or another audit
conducted by a certified public accountant on behalf of another tenant, Lessor
shall credit Lessee's Pro-rata Share of such amount to the next monthly
installment of rental due from Lessee, or, if at the end of the Term, reimburse
said amount to Lessee within thirty (30) days after receiving a written request
for reimbursement from Lessee. Additionally, if said statement of Operating
Costs shall be determined to be at least 5% more than the amount of Operating
Costs shown by such an audit, Lessor shall credit an amount equal to the
reasonable cost of such audit to the next monthly installment of rental due from
14
Lessee. Otherwise, Lessee shall bear the cost of such audit. Notwithstanding the
foregoing, if the Operating Costs of any calendar year are audited by a
certified public accountant on behalf of another tenant of the Building or the
Project, Lessee shall be entitled to receive a copy of such audit and thereafter
Lessee shall have no right to cause a subsequent audit of the Operating Costs
for the same calendar year, and such audit by the other tenant, if not contested
by Lessor, shall be binding on Lessee.
4.9 Adjustment for Partial Vacancy. For any calendar year during which
less than 95% of the Rentable Area of the Building is occupied, the calculation
of estimated and actual Operating Costs for such year shall be adjusted to equal
the estimated and actual Operating Costs which Lessor projects would have been
incurred had 95% of the Rentable Area of the Building been occupied during such
year.
5. SECURITYDEPOSIT
5.1 Initial Security Deposit. After Lessor obtains a building permit
to perform Lessor's Work in the Premises, Lessee shall, within 5 business days
after it receives Lessor's request therefore, deposit with Lessor that sum
identified in the Basic Lease Information as the Security Deposit as security
for the full performance by Lessee of its obligations hereunder. If the Security
Deposit is not received within said 5-day period, Lessor may delay performance
of Lessor's Work until the full Security Deposit is received, and Lessor may
delay delivery of the Premises one day for each day Lessee is late in depositing
the same, but base Rental (or abatement thereof pursuant to Section 3.5) shall
nevertheless be due on the Commencement Date, notwithstanding any other
provisions in this Lease. If Lessee defaults under any provision hereof Lessor
shall be entitled, at its option, to apply and retain all or any part of the
Security Deposit for the payment of any Rent or other sum in default or any
other amount which Lessor may spend or become obligated to spend because of
Lessee's default, or to compensate Lessor for any other loss or damage which
Lessor has suffered because of Lessee's default. If any portion of the Security
Deposit is so used or applied, Lessee shall, within five (5) business days after
written demand, deposit cash with Lessor in an amount sufficient to restore the
Security Deposit to its original amount, and Lessee's failure to do so shall be
a material breach of this Lease. Lessor shall not be required to keep the
Security Deposit separate from its general funds, and Lessee shall not be
entitled to interest on the Security Deposit. If Lessee fully performs every
provision of this Lease to be performed by it, the Security Deposit or any
balance thereof shall be returned to Lessee within 30 days after the expiration
of the term of this Lease or any period of holding over with the written consent
of Lessor. Lessor's rights with respect to the Security Deposit shall be in
addition to and shall not preclude concurrent, alternative or successive
exercise of any other rights or remedies available to Lessor.
5.2 Increased Security Deposit. If Lessee is in default under this
Lease more than two (2) times within any twelve-month period, irrespective of
whether or not such default is cured, then, without limiting Lessor's other
rights and remedies provided for in this Lease or at law or in equity, the
Security Deposit shall automatically be increased by an amount equal to two
15
(2) times the original Security Deposit and Lessee shall, within five (5) days
after written demand, deposit cash with Lessor in an amount equal to two (2)
times the original Security Deposit, less amounts previously deposited as a
Security Deposit by Lessee pursuant to Section 5.1 if and to the extent not
applied by Lessor as provided in Section 5.1.
6. USE OF PREMISES.
6.1 Permitted Uses. Lessee shall not use or permit the use of the
Premises for any purpose, except the purpose set forth in the Basic Lease
Information, without the prior written consent of Lessor. However, Lessee is in
any event prohibited from engaging in any of the following uses unless (i)
specifically allowed in the Basic Lease Information as a Permitted Use (i.e., a
reference to "reputable general office uses" does not qualify as specifically
allowing such uses), or (ii) specifically consented to in writing by Lessor in
an Amendment to this Lease (although Lessor may allow other tenants to engage in
such uses): any retail or wholesale sales activities (except sales of Lessee's
services as permitted in the Basic Lease Information as part of Lessee's
permitted use); gif shops; restaurants; news stands; food, tobacco or alcoholic
beverage sales or services (including restaurants, snack or smoke shops or
lounges), but specifically excluding up to four (4) vending machines within the
Premises if available only for use by the employees and clients of Lessee and if
the same are not visible from outside the Premises (both inside or outside the
Building); bail bond operations; public stenographer or typist; secretarial
service or messenger service; schools, classrooms or training activities, except
for the training of employees and clients as an ancillary part of Lessee's
primary business as set forth in the Basic Lease Information; employment
agencies; telemarketing or telephone solicitation activities; or hair salon,
▇▇▇▇▇▇ shop or manicure shop.
6.2 Compliance with Insurance Requirements. Lessee shall not knowingly
engage in or permit any activity which will cause the cancellation or increase
the existing premium rate of fire, liability or other insurance on or relating
to the Premises or the Project. Lessee shall not sell or permit to remain in or
about the Premises any article that may be prohibited by the standard or "All
Risk" fire and extended coverage insurance policies to be maintained pursuant to
this Lease. Lessee shall comply with all requirements pertaining to the use of
the Premises necessary for maintenance of such fire and public liability
insurance as Lessor may from time to time obtain for the Premises or the
Project.
6.3 Waste, Nuisance, Etc. Lessee shall not commit or permit any waste
on the Premises nor in any manner deface or injure the Premises, the Building,
the Underground Parking Facilities, the P-1 Parking Structure or the Project.
Lessee shall not use or permit the use of the Premises for the protection,
preparation, or distribution of pornographic materials or for other offensive or
immoral purposes (in the sole judgment of Lessor), or commit or permit on the
Premises any offensive, noisy or dangerous activity or other nuisance, activity
or thing, or generate or permit any noxious, putrid or foul odor, which may
disturb the quiet enjoyment or peaceable possession of any other tenant in the
Project. Lessee shall not overload the floor of the Premises beyond the load
limit therefore established by Lessor and provided to Lessee. Lessee
16
shall not employ any device in or about the Premises that emits any sound,
frequency, radio waves or radiation that are audible or detectable outside the
Premises, except fire and burglar alarms, cellular telephones and customary and
usual office equipment.
6.4 Area Above Standard Finish Ceiling Line. Lessee shall have no
right to use, enter into or cause to be entered into that portion of the
Premises above the standard ceiling line (as established by Lessor) without the
prior written consent of Lessor.
6.5 Common Areas. Subject to the rules and regulations referred to in
Section 6.7, the rights reserved by Lessor in Section 27 below, and the
provisions of Section 25, Lessee shall be entitled to the non-exclusive use in
common with Lessor, other tenants and occupants of the Building and the Project,
and other parties authorized by Lessor, their respective employees, agents,
contractors, customers and invitees, of such entryways, sidewalks, hallways,
stairways, toilets, elevators, lobby areas, and other common areas and
facilities in the Building or outside the Building and within the Project as
Lessor may from time to time designate for common use, provided such designation
does not materially and adversely affect Lessee's access to the Premises. Lessor
reserves the right to grant exclusive use of designated parking spaces and other
portions of the common areas and facilities to other tenants or occupants and
their employees and invitees.
6.6 Compliance with Laws. Lessee shall comply, at its expense, with
all laws, ordinances, rules and regulations of any public authority at any time
now or hereafter applicable to the Premises or any activity therein or use
thereof, and shall, at its expense, construct and install any improvements which
may be required from time to time by applicable laws, ordinances, rules and
regulations as a result of the use or occupancy of the Premises.
6.7 Rules and Regulations. Lessee shall comply, and shall cause its
employees, agents, contractors, customers and invitees to comply, with the rules
and regulations for the Project, the Underground Parking Facilities and the P-1
Parking Structure (and adjacent areas, if any, over which Lessor and Lessor's
tenants may be granted non-exclusive use rights from time to time in the
discretion of Lessor) including those attached to this Lease as Exhibit "B" and
with such modifications and additions thereto as Lessor, in its reasonable
discretion, may hereafter make for the Building, the Project and adjacent areas,
provided such rules or regulations do not materially and adversely affect
Lessee's use and occupancy of and access to, the Premises. Any violation of such
rules and regulations by Lessee, its employees, agents, contractors, customers
and invitees, shall constitute a breach of this Lease. All amounts due from
Lessee to Lessor pursuant to such rules and regulations shall be paid within 3
days after demand therefore by Lessor, and shall constitute additional rental
due under this Lease.
6.8 Project Signs. Lessee shall have no right to use the signs for the
Project or to use any exterior surfaces of the Building or other portions of the
Project to identify Lessee's business, provided Lessor will erect within the
interior of the sixth floor of the Building adjacent to the entry of the
Premises a sign with Lessee's name and suite number, which will conform to
17
Lessor's sign criteria for the Building. Lessee shall be permitted to list its
name and suite number within the Building on each interior directory maintained
by Lessor in the lobby of the Building or on the sixth floor thereof.
6.9 Hazardous Substances. Lessee agrees that it will not knowingly use
or allow the Premises to be used for the storage, use, discharge, production,
release, treatment or disposal of any "hazardous substance", as that term is
defined under either the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (42 U.S.C. 9601, et seq., as amended from time to time) or
any other federal, state or local environmental law, rule, regulation, order or
directive now or hereafter existing (the "Environmental Laws") in violation of
any Environmental Laws. Lessee shall otherwise comply at all times with all
Environmental Laws. Lessee shall immediately notify Lessor of any hazardous
substance on or about the Premises, any investigation by any governmental
authority regarding the violation of any Environmental Law, and any claims by
third parties against Lessee relating to the violation of any Environmental Law
regarding the Premises.
7. CONDITION OF PREMISES; CONSTRUCTION
7.1 Condition of Premises. Lessee acknowledges, represents and agrees
to the following: (i) Lessee shall be responsible for making its own inspection
and investigation of the Premises, the Building and other portions of the
Project, (ii) Lessee shall be responsible for investigating and establishing the
suitability of the Premises for Lessee's intended use thereof and all zoning and
regulatory matters pertinent thereto, (iii) Lessee is leasing the Premises "AS
IS" based on its own inspection and investigation and not in reliance on any
statement, representation, inducement or agreement of Lessor or its agents,
employees or representatives, except as expressly set forth in Section 7.2 below
or elsewhere in this Lease, (iv) the Premises, upon the earliest of Lessee's
possession or Lessee's entry into the Premises to construct or install
improvements, were in good order and satisfactory condition, subject to Section
2.2 of Exhibit C attached hereto, and (v) the Premises and Lessee's rights
thereto under this Lease include only the interior space within the Premises.
Lessee's rights do not include and Lessee has no rights to or expectations of
any improvements below floor level, above ceiling level, or rights to any
particular view or view corridor, any particular angle or degree of sun or light
exposure, or any particular air rights or corridor above or around the Premises.
7.2 Construction. Subject to Sections 2.3, 2.6 and 26, Lessor shall,
in the exercise of reasonable diligence, perform the demolition, remodeling,
replacement and/or installation work provided for on Exhibit "C" attached
hereto, if any. For purposes of this Lease, possession of the Premises shall be
deemed delivered or tendered to Lessee upon substantial completion of Lessor's
Work (as those terms are defined in Exhibit "C") and Lessor has given Lessee
written notice thereof. Upon receipt of such written notice or upon any earlier
date Lessor and Lessee may agree upon, Lessee shall, in the exercise of
reasonable diligence, perform the remodeling, replacement and/or installation
work designated as Lessee's responsibility on Exhibit "C", subject to all of the
provisions of this Lease. The expense of all work specified on
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Exhibit "C", whether performed by Lessor or Lessee, shall be allocated between
the parties as specified on Exhibit "C". In no event (i) will Lessor's
obligations exceed the Tenant Improvement Allowance set forth in the Basic Lease
Information, or (ii) will Lessor be responsible for performing any other work or
installing any other improvements except for Lessor's Work.
8. BUILDING SERVICES.
8.1 Services. Subject to the rules and regulations attached to this
Lease, Lessor agrees to furnish to the Premises, during normal business hours
(as hereafter defined), janitorial service and elevator service, water and
electricity suitable for the intended use of the Premises, and heat and air
conditioning required in Lessor's reasonable judgment for the comfortable use
and occupancy of the Premises. Lessor will furnish such utilities to the
Premises, upon reasonable prior notice from Lessee (as hereafter defined),
beyond normal business hours provided that Lessee shall pay an additional charge
(to be established by Lessor from time to time) consistent with other Class A
Office Buildings in the Phoenix metropolitan area within three (3) days after
receipt of an invoice from Lessor, provided such additional charge shall reflect
Lessor's actual out-of-pocket costs for such additional services, without
▇▇▇▇-up or premium. As used in this Section, "normal business hours" shall mean
7:00 a.m. to 6:00 p.m., Monday through Friday (except legal holidays), and 8:00
a.m. to noon on Saturday (except legal holidays); and "Reasonable prior notice
from Lessee" shall mean notice to Lessor by 1:00 p.m. on weekdays for service
beyond normal business hours for the next weekday, by 1:00 p.m. on Friday for
such service on Saturday or Sunday, or by 1:00 p.m. on the first business day
immediately preceding a holiday for such service on a holiday. Lessor
acknowledges that portions of Lessee's operations will function 24 hours a day
and agrees (i) Lessee shall have continuous, 24- hour access to the Premises,
and (ii) to provide utilities continuously to those portions of the Premises
identified by Lessee, without further prior notice, subject to Lessee's payment
of such additional charges as set forth above, provided that, upon request from
Lessee and at Lessee's expense, Lessor will install additional heating,
ventilating, and air conditioning facilities which are not part of the Building
standard facilities, and will separately meter the cost of providing utilities
continuously to those portions of the Premises requiring 24-hour service, which
shall be billed directly to Lessee.
8.2 Interruption of Services. Lessor shall not be liable for, nor
shall Lessee be entitled to, any abatement or reduction of rental or others due
hereunder by reason of Lessor's failure to furnish any of the foregoing when
such failure is caused by the acts of Lessee or other tenants of the Building or
by any causes beyond the reasonable control of Lessor, including without
limitation the following: (i) disruption of electrical, water, sewer, or
telecommunication services, (ii) weather, casualty, accidents, or breakage,
(iii) installing or remodeling improvements, or making repairs, (iv) strikes,
lockouts or other labor disturbances or disputes of any character, (v) as a
consequence of the voluntary or mandatory compliance by Lessor with any
governmental or independent service operator orders, regulations or directives
to reduce electrical consumption, or (vi) by any other cause, similar or
dissimilar. It is expressly
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understood and agreed that except only for Lessor's gross negligence, or willful
misconduct, Lessor shall have no liability or responsibility under any
circumstances for loss or damage, however occurring, arising out of or incurred
in connection with any failure of or interruption in or failure to provide any
services or utilities which Lessor is to provide hereunder. Wherever heat
generating machines or equipment are used in the Premises which affect the
temperature otherwise maintained by the air conditioning system, Lessor reserves
the right to install supplementary air conditioning units in the Premises. The
cost of such supplementary units, including the cost of installation, operation
and maintenance, shall be paid by Lessee to Lessor within three (3) days after
demand by Lessor. Notwithstanding the foregoing, if any utility or Building
service is disrupted to such an extent that Lessee cannot operate its business
in the Premises and such disruption continues for more than 72 consecutive
hours, then Base Rental shall ▇▇▇▇▇ thereafter for each day Lessee cannot
operate its business as a direct result of such disruption.
8.3 Prohibitions; Excess Utilities. Lessee will not, without the prior
written consent of Lessor (which Lessor may withhold in its discretion), (i) use
any apparatus or device in the Premises which will increase the amount of water,
electricity, chilled water for the Chilled Water System or other utilities
otherwise furnished or supplied for use of the Premises as general office space,
including, without limitation, computers and machines using current in excess of
110 volts; (ii) install any 220 volt outlets in the Premises (unless otherwise
specifically permitted by the provisions of Exhibit "C"), nor (iii) connect into
the electric current or the water supply except through existing electrical
outlets or existing water taps in the Premises. If Lessor gives its consent,
Lessor may cause water, electric, chilled water or other utility measuring
devices to be installed in the Premises for the purpose of measuring the amount
of water, electric current, chilled water for the Chilled Water System or other
utilities consumed for any such purpose. The cost of any such meters and the
installation, maintenance and repair thereof shall be paid for by Lessee, and
Lessee agrees to pay Lessor, within 3 days after demand, for the cost of all
water, electric current, chilled water for the Chilled Water System or other
utilities consumed as shown by said meters, at the rates charged for such
services by the suppliers thereof If separate meters cannot be installed, Lessor
shall have the right to estimate the additional cost of the utilities utilized
by Lessee and charge the same directly to Lessee, who shall pay the same to
Lessor within 3 days after demand.
8.4 Utility Deregulation.
8.4.1 Lessor Controls Selection of Power Provider. Lessor hereby
advises Lessee that presently APS ("Electric Service Provider") is the utility
company selected by Lessor to provide electricity service for the Project.
Notwithstanding the foregoing, if permitted by Law, Lessor shall have the right
at any time and from time to time during the Lease Term to either contract for
service from a different company or companies providing electricity service
(each such company shall hereinafter be referred to as an "Alternative Service
Provider") or continue to contract for service from the Electric Service
Provider. If Lessor selects an Alternative Service Provider, Lessor shall use
commercially reasonable efforts to contract for
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services at rates competitive in the Phoenix metropolitan area.
8.4.2 Lessee Shall Give Lessor Access. Lessee shall cooperate
with Lessor, the Electric Service Provider, and any Alternative Service Provider
at all times and, as reasonably necessary, shall allow Lessor, Electric Service
Provider, and any Alternative Service Provider reasonable access to the electric
lines, feeders, risers, wiring, and any other machinery within the Premises;
provided, however, that Lessor shall endeavor to cause the Electric Service
Provider or Alternative Service Provider to minimize, to the extent reasonably
possible given the circumstances, its interference with electricity service to
the Premises and Lessee's access to or permitted use of the Premises.
8.4.3 Lessor Not Responsible for Interruption of Service. It is
expressly understood and agreed that Lessor does not warrant or promise that any
services or utilities or any service or utility provider will be free from
shortages, failures, loss of availability, variations, changes in quality,
character or quantity, disruptions, defects, poor service, interference or
interruptions caused by or related to governmental requirements or requests,
inability to obtain services, so-called ▇▇▇▇▇-outs, rolling black-outs,
accidents, repairs, maintenance, strikes, lockouts, labor controversies,
replacements, alterations, construction delays or interruptions, changes of or
in service, or other causes; or that such services or utilities will be suitable
for Lessee's requirements. Lessor shall have no liability or responsibility for
any loss, damage, cost or expense (however incurred) sustained or incurred by
Lessee or those claiming by, through or under Lessee, incidental to or arising
out of any of the foregoing unless caused by or due to Lessor's sole and gross
negligence. Lessor shall in no way be liable or responsible for any loss,
damage, or expense that Lessee may sustain or incur as a consequence of the
voluntary or mandatory compliance by Lessor with any governmental or independent
service operator orders, regulations, or directives to reduce electrical
consumption. Under no circumstances shall any of the foregoing be deemed an
actual or constructive eviction of Lessee or a disturbance of Lessee's
possession, use or occupancy of any or all of the Premises, or entitle Lessee to
an abatement or diminution of rent, except as provided in Section 8.2, or
relieve Lessee from its obligations under this Lease.
8.5 District Cooling Services. Lessor hereby advises Lessee that
Lessor has or may enter into an agreement with Northwind Rio Salado, LLC, or one
or more other companies ("Chilled Water Provider") who will operate one or more
district cooling plants and other facilities to provide chilled water to the
Project, other portions of ▇▇▇▇▇▇ ▇▇▇▇▇ Lakeside and other areas. Lessor
reserves the right to tap into such chilled water lines for the benefit of the
Building to provide chilled water for the Buildings air conditioning system
designed for such purposes ("Chilled Water Systems"), and to pay any reasonable
fees, assessments or charges due to the Chilled Water Provider, and shall have
the right to include the same within the Operating Costs pursuant to Section 4.3
above.
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8.6 Telecommunications Provider.
8.6.1 Any and all telecommunications and voice and data
technology equipment, cabling, wiring, panels and other facilities required for
Lessee's telecommunications requirements ("Telecommunications Equipment") shall
be located solely in the Premises, other than and except for any cabling and
wiring that provides connectivity from the Premises to one or more intermediate
demarcation points for telecommunication service providers (the "IDF") located
in the Building and to the main telecommunications demarcation point for the
Project (the "MPOE"), which may be located in the Building or elsewhere within
the Project. Lessee shall only be permitted to access the IDF and the MPOE with
the prior consent of Lessor (and only in accordance with such access control
procedures implemented from time to time by Lessor), for the limited purpose of
confirming interconnection with the facilities and equipment of the
telecommunications service provider ("TSP") that provides services to the
Premises. The number and type of lines allocated to Lessee at the IDF and/or the
MPOE shall be designated by Lessor, and shall not be increased or added to
without the prior written consent of Lessor. By its acceptance of possession of
the Premises, Lessee shall be deemed to have agreed that the allocated number
and type of lines serving the Premises are adequate for Lessee's occupancy.
8.6.2 Only Lessor and/or Lessor's approved installers,
contractors and vendors are authorized to install and/or connect
telecommunications lines from the MPOE and/or the IDF to the Premises, and any
such work shall be done at Lessee's expense; provided that Lessor's approval of
an installer, contractor, or vendor shall not in any way constitute a
representation or warranty with respect to the quality of the work, services, or
operations of any of the foregoing, and Lessee assumes all risk with respect
thereto. Lessee shall reimburse Lessor, within ten (10) days after written
request, for the reasonable cost of Lessor's designated telecommunications
manager with respect to monitoring any installation work performed for Lessee
requiring access to the IDF and/or MPOE. None of the Telecommunications
Equipment, wherever located, shall interfere with the telecommunications
equipment of any other tenant or occupant of the Building or of any
telecommunications service provider granted a right of access to the Building by
Lessor, and Lessee shall at all times during the term of this Lease cause its
Telecommunications Equipment to be operated within the technical and frequency
transmission and reception parameters specified by the equipment manufacturer
and any governmental license. If Lessee, its employees, agents or contractors,
should cause any measurable interference with any Building systems or equipment,
or the systems or equipment of any of the other tenants of the Project, or of
any telecommunications service provider that, with the permission of Lessor, has
installed equipment in the Building (collectively, "Approved Telecommunications
Facilities"), Lessor shall have the right, upon twenty-four (24) hours verbal
notice to Lessee, to disconnect any equipment or wiring located outside the
Premises until Lessee resolves the interference issues in a manner satisfactory
to Lessor. Lessee shall be liable to Lessor for, and shall indemnify, defend and
hold harmless Lessor from and against, any loss, claim, damage, liability, fine,
penalty, fee, cost and expense, including Lessor's attorneys' fees and costs,
incurred in connection with or arising from any damage to or interference with
any Approved Telecommunications Facilities,
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and any riser infrastructure in the Building due to the act or omission
(negligent or otherwise) of Lessee, or any employee, agent or contractor of
Lessee.
8.6.3 Lessor reserves the right to limit the number of local
exchange carriers and competitive alternative telecommunications providers
(collectively, "TSPs") having access to the Building's riser system and
infrastructure, and Lessor reserves the right to charge TSPs for access to and
use of the Building's telecommunications riser system and infrastructure, and to
require, as a condition to any such access or use, that the TSPs enter into a
written agreement with Lessor governing the terms and conditions of such access.
Lessor has the sole right to designate the risers and other vertical and
horizontal pathways to be utilized by TSPs and/or Lessee for access and
connectivity to and from the Premises, the IDF and the MPOE.
8.6.4 Lessee hereby waives any claim against Lessor for any
damages, liabilities, costs or expenses attributable to or resulting from any
interruption of service, damage or interference with or to any of the
Telecommunications Equipment, except to the extent caused by the gross
negligence or willful misconduct of Lessor, its agents or employees; provided,
however, in no event shall any such interruption, damage or interference entitle
Lessee to any consequential damages (including damages for loss of business),
constitute an actual or constructive eviction, in whole or in part, or relieve
Lessee of any of its obligations under this Lease.
8.6.5 Upon the expiration or earlier termination of this Lease,
Lessee shall remove, at its sole cost and expense (and by installers approved by
Lessor as hereinabove provided), all Telecommunications Equipment in the
Premises and/or exclusively serving the Premises, whether located at the IDF
and/or along any path of travel to the MPOE.
9. MAINTENANCE AND REPAIR.
9.1 Lessor's Obligations. Subject to the terms and conditions of this
Lease and to compliance by Lessee with its obligations under this Lease, Lessor
shall, as a part of Operating .Costs: (a) clean, maintain and repair, subject to
normal wear and tear, the common areas of the Building and Lessor's portion of
the Project as described in Section 6.5; the roof and structural elements of the
Building; building-standard plumbing and electrical wiring and heating,
ventilating and air conditioning systems and equipment; and the exterior of the
Building (except for Lessee's signs, if and as approved by Lessor); and (b)
provide Building-standard janitorial service for and in the common areas and the
Premises. "Building-standard" shall mean and include: (i) those items or
services provided by or through Lessor, with Lessor's prior written approval and
in compliance with Lessor's standard specifications for such items or services;
and (ii) those items installed by Lessor or by Lessee (with the prior written
approval and under the express direction of Lessor) in compliance with Lessor's
standard specifications therefore, but shall not include any items installed by
Lessor pursuant to Exhibit "C" attached hereto unless the same are specifically
designated thereon by Lessor as Building-standard items. Lessor shall have the
right to recover, under Article 4 above, the cost of performing its
23
obligations under this Section 9.1. In no event shall Lessee be entitled to
undertake any such maintenance or repairs, whether at the expense of Lessee or
Lessor, and Lessee hereby waives the benefits of any law now or hereafter in
effect which would otherwise provide Lessee with such right.
9.2 Lessee's Obligations. Unless such maintenance or repairs are
specifically designated as the obligation of Lessor under Section 9.1 above,
Lessee shall, at its expense, maintain or cause to be maintained the Premises in
a safe and clean condition and in good order and repair, reasonable wear and
tear excluded, including, without limitation, the interior of the Premises, all
partitions and other interior improvements, all walls (including any non
Building standard exteriors of any walls of the Premises adjacent to a hallway),
all floors and floor coverings (excluding vacuuming of Building-standard floor
coverings), Lessee's Property, including Telecommunications Equipment, all other
telephone and other communication systems installed by Lessee or its
telecommunication service providers, Lessee's signs located in or on the
Premises or the Building (whether interior or exterior, if exterior signs are
permitted in an Addendum to this Lease), all of Lessee's equipment and fixtures,
and all of the following which are not Building-standard items: lighting,
draperies, window coverings, ceilings, plumbing, doors, glass, cabinet work and
shelving.' Lessee shall also perform promptly, subject to Section 6.4, at its
expense, all maintenance or repairs with respect to the Premises and the Project
required because of any negligent or intentional acts or omissions of Lessee,
its agents, employees, contractors, customers or invitees, including without
limitation Lessee's telecommunication service providers. Lessee shall maintain,
repair, replace and remove, or shall cause its telecommunication service
providers to maintain, repair, replace or remove, all Telecommunications
Equipment within the Building or areas adjacent thereto or the Project in which
Lessee has elected to install or provide the telecommunications services it
requires with respect to the Premises in accordance with Section 8.6. Lessee
shall perform its obligations under this Section regardless of whether or not:
(i) such portions of the Premises requiring repair are reasonably or readily
accessible, (ii) the means of making the required repairs are convenient or
reasonable, or (iii) the need for such repairs occurs as a result of Lessee's
use, the elements or the age of such portions of the Premises. Lessee's
obligations under this Section shall be performed only by persons or contractors
approved by Lessor.
10. ALTERATIONS TO PREMISES.
10.1 Lessor's Prior Written Consent Required. Except as provided for
on Exhibit "C", Lessee shall not make any alteration, addition or improvement to
the Premises (other than non-structural decorations such as painting,
wallpapering, and hanging of pictures or other objects d'art) or to any fixture,
wiring, plumbing, lighting, heating, air conditioning or other equipment
therein, or to any of the Telecommunications Equipment after installation in
accordance with Section 8.6, without the prior written consent of Lessor in each
instance. Lessor shall be entitled to impose any condition to such consent as it
may deem necessary or desirable (including, without limitation, the posting of
bonds or use of a contractor designated or approved by Lessor). Any alteration,
addition or improvement to which Lessor consents or which is
24
required by law shall be completed free of liens in a good and workmanlike
manner in accordance with plans, specifications and drawings approved in writing
by Lessor, and in compliance with all applicable laws, regulations and codes.
Lessee shall timely pay all costs and fees incurred by Lessee in connection with
all alterations, additions and improvements permitted or required hereunder.
10.2 Alterations Become Part of Premises. Unless Lessor requires the
removal thereof upon the termination of this Lease (Lessor to notify Lessee at
time of Lessor's approval whether or not Lessee is required to remove), all such
alterations, additions or improvements to the Premises by Lessee (including,
without limitation, demolition of earlier improvements, construction or
remodeling of interior walls, doors, ceilings, built-in cabinetwork and
shelving, lunchroom facilities, and installation, remodeling or replacement of
lighting, heating and air conditioning equipment, electrical and telephone
circuits, draperies, carpets and other floor coverings, wall coverings, and
interior glasswork) shall become part of the Premises and the property of Lessor
immediately upon installation thereof The foregoing shall not apply to Lessee's
Property, except that all Telecommunications Equipment shall be removed as
provided in subsection 8.5.5. Any alteration, addition or improvement which
Lessee is required or permitted to remove hereunder (including Lessee's
Property) shall be removed at Lessee's expense immediately prior to the
termination of this Lease, and Lessee shall promptly repair any damage to the
Premises, the Building, or the Project (including without limitation any damage
to the telecommunications facilities or the telecommunications equipment, wires
and cables of other tenants and occupants of the Building or the Project to the
extent damaged or altered by the removal of any Telecommunications Equipment)
caused by installation or removal of such alteration, addition or improvement.
11. LIENS. Lessee shall keep the Premises, the Building and the Project
free of any liens arising out of any work performed, materials furnished or
obligations incurred by or on behalf of Lessee (or on behalf of Lessor if the
same arise as a result of Lessor's performing an obligation of Lessee hereunder
and Lessee fails to reimburse Lessor immediately for the cost thereof). If any
such lien is fled, Lessee shall, within 10 days thereafter, cause the lien to be
fully discharged by either paying the obligation secured thereby or obtaining
and recording a payment bond in accordance with the provisions of Section
33-1004, Arizona Revised Statutes. Lessee is not authorized to act for or on
behalf of Lessor as its agent, or otherwise, for the purpose of constructing any
improvements to the Premises, and neither Lessor nor Lessor's interest in the
Premises shall be subject to any obligations incurred by Lessee. Lessor shall be
entitled to post on the Premises during the course of any construction by Lessee
such notices of non-responsibility as Lessor deems appropriate for its
protection. If Lessee fails to discharge fully any such lien within said 10-day
period, Lessor may (but without obligation) pay the entire claim secured by such
lien, and the amount so paid, together with reasonable attorneys' fees and costs
incurred, shall be immediately due to Lessor, and Lessee shall pay the same to
Lessor with interest at the rate provided in section 29.6 from the dates of
Lessor's payments.
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12. LESSOR'S ENTRY In addition to any right of entry provided for in this
Lease, Lessor, its employees, agents and contractors, shall be entitled to enter
the Premises at any reasonable time during normal business hours following
reasonable prior notice (except in the event of an emergency) for the purposes
of conducting any inspections thereof, posting non responsibility notices,
making repairs, additions or alterations thereto or to the Building, showing the
Premises to any prospective purchaser, lessee, mortgagee or insurer, and taking
necessary action in the event of any emergency. In connection with such entry,
Lessor shall be entitled to erect such scaffolding and other necessary
structures or equipment as reasonably required by the character of the work to
be performed, provided that Lessor shall not, during normal business hours for
the Building, unreasonably interfere with the conduct of Lessee's business, or
materially interfere with the use of, or access to, the Premises. No entry by
Lessor hereunder shall entitle Lessee to terminate this Lease or to a reduction
or abatement of rental or other amounts owed by Lessee hereunder nor to any
claims for damages. Lessor shall have the right to retain at all times keys to
all doors within and into the Premises. No lock shall be changed without the
prior written consent of Lessor. Lessor shall be entitled to use in good faith
any means to gain entry to the Premises in the event of an emergency and shall
not be liable for any damages resulting therefrom.
13. INDEMNITY WAIVER. Subject to the provisions of Section 14 hereof Lessee
shall indemnify, defend, and hold Lessor harmless for, from and against any and
all claims, liabilities, costs, attorneys' fees and expert fees and court costs,
expenses, penalties or demands of any nature arising from (i) Lessee's use of
the Premises, or from the conduct of Lessee's business thereon or from any
activity, work or things done, permitted or allowed by Lessee or its agents or
contractors in or about the Premises, including without limitation any work
performed by and/or the acts and omissions of Lessee's telecommunication service
providers in the Premises or other portions of the Building or the Project,
and/or (ii) any breach or default in the performance of any obligation or
covenant on Lessee's part to be performed under the terms of this Lease
(including without limitation Lessee's obligations under Section 6.9), or
arising from any negligence or willful misconduct of Lessee, or any of Lessee's
agents, contractors, employees, customers or invitees; and from and against all
costs, attorneys' fees, environmental consultants' fees, expenses and
liabilities incurred in the defense of any such claim or any action or
proceeding brought thereon. If any claim, action or proceeding is threatened or
commenced against Lessor which is or may be covered by the foregoing indemnity,
Lessee, upon notice from Lessor, shall defend the same, at Lessee's expense,
utilizing counsel reasonably acceptable to Lessor. Lessor shall indemnify,
defend, and hold Lessee harmless for, from and against any and all claims,
suits, actions, proceedings, liabilities, damages, costs or expenses, including
reasonable attorneys' and expert fees and court costs arising from any act,
omission or negligence of Lessor or its agents, contractors or employees, or
from Lessor's breach of its obligations under this Lease.
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14. INSURANCE.
14.1 Types of Insurance. Lessee, at its sole cost and expense, shall
procure and maintain the following insurance from and after the date Lessee, its
employees, agents, or contractors, enter the Premises for any purpose and during
the entire Lease Term:
14.1.1 Commercial general liability insurance providing coverage
against claims for bodily injury, death, property damage, or fire damage
liability occurring in, on or about the Premises, the elevators, the adjoining
sidewalks and passageways, or any of the Parking Facilities or resulting from
Lessee's use, occupancy or maintenance thereof which policy shall name Lessor
(and any first mortgagee or first beneficiary under a deed of trust of record
against the Building or the Project) as additional insured parties. Such
insurance shall be primary with respect to Lessor. Any commercial general
liability insurance carried by Lessor shall apply in excess of the primary
coverage required herein to be carried by Lessee.
14.1.2 Insurance on an "All-Risk" basis providing coverage
against damage and destruction to Lessee's Property (as defined in Section
23.1), including Telecommunications Equipment, and any improvements, additions
and other alterations to the Premises which Lessee installs or constructs in the
amount of full replacement value. If such items are damaged or destroyed, Lessee
shall bear all risk of loss with respect thereto. Lessee hereby waives as
against Lessor any and all claims or demands whatsoever pertaining to damage,
loss or injury caused by or resulting from fire or other perils, events or
occurrences which are or could have been covered by insurance.
14.1.3 Business interruption insurance in amounts adequate, to
cover, in addition to Lessee's other business expenses, payment of Base Rental
and Lessee's Prorata Share of Operating Costs for a 12-month period.
14.2 Notice of Insurance. All insurance provided for in this Article
shall be effected under valid and enforceable policies issued by financially
sound insurance companies reasonably acceptable to Lessor and authorized to do
business in the State of Arizona. Such policies shall be endorsed to indicate
that Lessee's coverage shall not be invalid due to any act or omission by
Lessor. The policies shall further be endorsed to indicate that such policies
shall cover Lessee's obligations pursuant to Article 13. Lessee shall use
commercially reasonable efforts to cause all insurance companies issuing such
insurance to notify Lessor in writing of any cancellation, alteration or
non-renewal of said insurance at least thirty (30) days prior thereto. Lessee
shall deliver to Lessor, within fifteen (15) days after execution of this Lease,
certificates evidencing the insurance coverage required herein and confirming
that the premiums therefore have been paid in full. Said certificates shall also
include a footnote referring to this Lease and certifying that the policy or
policies issued to Lessee comply with all of the provisions of this Article 14.
If Lessee fails to obtain the insurance required herein and deliver said
certificates to Lessor as provided above, Lessor shall be entitled, but without
obligation, to obtain said policies at Lessee's expense.
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14.3 Waiver of Subrogation. Notwithstanding any other provisions in
this Lease, Lessee and Lessor hereby waive any and all rights of recovery
against the other, or against the officers, employees, agents and
representatives of the other, for loss of, 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 under any insurance policy in force at the
time of such loss or damage. Lessee shall, upon obtaining the policies of
insurance required hereunder, give notice to the insurance carrier or carriers
of the waiver of subrogation set forth in this Lease and shall obtain, at
Lessee's expense, an appropriate waiver of subrogation endorsement from the
insurer. If the Premises, the Project or Lessee's Property are damaged or
destroyed by fire or any other cause against which Lessee is required to
maintain insurance pursuant to this Lease, Lessor shall not be liable to Lessee
for any such damage or destruction.
15. DAMAGE OR DESTRUCTION
15.1 Termination. If the Premises or any portion thereof are damaged
or destroyed by any cause, Lessor shall reasonably determine, within 45 days
after such casualty, whether it would take more than 120 days from the date of
such damage or destruction to repair the same. If Lessor determines that greater
than 120 days would be required to repair such damage or destruction, then
Lessor shall be entitled to terminate this Lease by written notice to Lessee
within said 45-day period, which termination shall be effective 10 days after
receipt. The foregoing notwithstanding, if all or part of the Premises and/or
the Building are damaged or destroyed and Lessor, upon inspection, reasonably
determines that (i) the cost of repairing the Premises will exceed 10% of the
replacement cost of the Premises or the Building and such damage is not covered
by insurance maintained by or payable to Lessor (provided that Lessor agrees to
maintain fire insurance with extended and/or "all risk" coverage for the
Building), or (ii) the cost of repairing the Premises will exceed 25% of the
replacement cost of the Premises and such damage occurs within the last 18
months of the term of this Lease (excluding any option periods), or (iii) the
Building is damaged to an extent greater than 25% of its replacement value
(whether or not the Premises are damaged or destroyed), then Lessor shall be
entitled to terminate this Lease by written notice to Lessee given on or before
60 days after the occurrence of such casualty, which termination shall be
effective 10 days after receipt.
15.2 Repair. If this Lease is not terminated as provided above, the
damage to the Premises shall be repaired as follows:
15.2.1 Lessee shall promptly repair, at its expense, any damage
to Lessee's Property and any improvements, additions and other alterations
installed or constructed by Lessee.
15.2.2 Lessor shall have the option of repairing any damage
caused by any act or neglect of Lessee or its employees, agents or invitees and
shall charge to Lessee all costs and expenses incurred in connection therewith
(including a service fee for Lessor equal to 10% of all sums expended by Lessor
in performing or supervising the repairs). Lessee shall pay
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the same within 5 days after presentment of a statement to Lessee indicating the
amount thereof If Lessor elects not to repair the damage, Lessee shall promptly
repair the damage at its expense.
15.2.3 Lessor shall repair, at its expense, the damage not
specified in subsections 15.2.1 and 15.2.2 above.
All repairs performed pursuant to this Section shall be performed
in a good and workmanlike manner, in accordance with plans and specifications
approved by Lessor, and in compliance with applicable laws, regulations and
building codes. Lessor shall have the right to designate or approve the
contractors) performing repairs required to be made by Lessee and shall have the
right to require Lessee to post such bonds as Lessor deems necessary, including
furnishing to Lessor evidence of compliance with Section 33-1003, Arizona
Revised Statutes, or such successor statute as may then be in effect.
15.3 No Abatement of Rent. Lessee shall not be entitled to terminate
this Lease or to receive a reduction or abatement of any rental or other sums
payable hereunder in the event of any damage or destruction from any cause
whatsoever, provided that (i) if Lessee maintains typical and customary business
interruption insurance from a reputable and financially sound company reasonably
acceptable to Lessor, and such policy does not provide for the payment of rental
given the nature of the damage and destruction, and (ii) if the damage and
destruction is not caused by the acts or omissions of Lessee, its employees,
agents or contractors, then rent shall ▇▇▇▇▇ proportionately based on the size
of the portion of the Premises which cannot reasonably be used by Lessee.
16. CONDEMNATION
16.1 Termination. If the Premises or any portion thereof are taken
under power of eminent domain or conveyed by Lessor under the threat thereof (a
"Condemnation") , this Lease shall automatically terminate as to the part so
taken as of the date of Condemnation. If a portion of the floor area of the
Premises, or all or a substantial portion of the parking area within the Project
(including the P-1 Parking Structure and the Underground Parking Facilities), is
taken by Condemnation, and Lessor reasonably determines that it would not be
economically feasible to utilize the Premises for the purposes for which the
same were being used at the time of said taking, then Lessor may terminate this
Lease as of the date of condemnation by giving written notice thereof to Lessee
on or before 20 days after said date. If more than 25% of the floor area of the
Building and/or more than 25% of the land area of the entire Project is taken by
Condemnation (regardless of whether or not any portion of the Premises is
taken), then Lessor shall be entitled to terminate this Lease as of the date of
Condemnation by written notice to Lessee on or before 20 days after said date.
16.2 Abatement of Rent. In the event of Condemnation of only a portion
of the Premises, rental and Lessee's parking rights and obligations shall also
be reduced in proportion to the amount of rentable area taken.
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16.3 Award. Lessor shall be entitled to the entire Condemnation award
for any partial or entire taking of the Premises or the Project, including any
award for the leasehold estate created hereby, and Lessee hereby waives any
claim with respect thereto; provided that Lessee may seek a separate award from
the taking authority (and not from Lessor), in Lessee's own name, for any
damages to Lessee's business (excluding the loss of its leasehold estate) and
any costs incurred by Lessee in removing and relocating Lessee's Property.
16.4 Restoration. If only a part of the Premises is condemned and this
Lease is not terminated pursuant hereto, then Lessor shall, in the exercise of
reasonable diligence and its own cost, restore the Premises to its previous
condition as nearly as is reasonable under the circumstances. In no event,
however, shall Lessor be obligated to commence such restoration until it has
received the entire Condemnation award and in no event shall Lessor be obligated
to incur restoration expenses in an amount greater than such award, less costs,
expenses and fees (including reasonable attorneys' fees and costs) incurred by
Lessor in collecting such award.
16.5 Date of Condemnation. The date of Condemnation, for the purposes
hereof is the earlier of the date (i) possession of the Premises is delivered to
the taking authority, or (ii) title is vested in the taking authority.
17. QUIET ENJOYMENT. If Lessee pays all Rent and other sums payable
hereunder and performs all of its other obligations hereunder, Lessor shall take
no action to disturb Lessee's peaceable and quiet possession of the Premises
during the term hereof and Lessor shall not permit Lessee's peaceable and quiet
possession of the Premises to be disturbed by anyone claiming by, through, or
under Lessor.
18. ESTOPPEL CERTIFICATE. Upon receipt of a written request from Lessor,
Lessee shall, from time to time, and within fifteen (15) days after receipt of
such request, execute, acknowledge and deliver to Lessor a statement in writing
(a) 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
Rent and other charges are paid in advance, if any, (b) acknowledging that there
are no uncured defaults on the part of Lessor, or specifying such defaults if
any are claimed, and (c) certifying or acknowledging any other matters that
Lessor may reasonably request for certification or acknowledgment. Any such
statements may be relied upon by any prospective purchaser or encumbrances of
all or any portion of the Premises, the Building, or the Project. If Lessee
fails to deliver such statement within such time period and Lessor thereafter
provides a second request for such statement and Lessee fails to deliver such
statement within 5 days thereafter, then Lessee's failure to deliver such
statement shall be conclusive against Lessee that (i) this Lease is in full
force and effect, without modification except as may be represented by Lessor,
(ii) there are no uncured defaults in Lessor's performance, and (iii) not more
than one month's rent has been paid in advance.
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19. MASTER LEASE; LENDER; SUBORDINATION
19.1 Master Lease. Pursuant to all of the terms and conditions of a
Lease to be executed by the City of Tempe, an Arizona municipal corporation
("City"), as lessor, and ▇▇▇▇▇▇ ▇▇▇▇▇ Lakeside LLC, an Arizona limited liability
company, as lessee, as may be amended from time to time ("Master Lease") for
purposes of providing tax abatement benefits to Lessor, fee title to the
Building and certain land area has been or will be conveyed to the City and
leased back to Lessor. Lessor warrants, covenants and agrees that the Master
Lease will ▇▇▇▇▇ ▇▇▇▇▇▇ full right and authority to continue leasing the
Premises to Lessee as provided in this Lease, and Lessee's right to occupy and
use the Premises will be subject to the covenant of quiet enjoyment in its favor
set forth in Section 17 of this Lease. Upon transfer of title to the Building
and adjacent land to the City, this Lease shall automatically constitute a
sublease. Lessee, at the request of the City, shall deliver to the City an
agreement, in form and substance satisfactory to the City, whereby Lessee shall
agree that (i) no action taken by the City to enforce the Master Lease,
including without limitation any termination thereof shall terminate this Lease
or invalidate any of the terms hereof and, (ii) upon termination of the Master
Lease after default by Lessor, Lessee will recognize the City as Lessor
hereunder for the balance of the term of this Lease, provided that the City also
agrees that Lessee's possession will not be disturbed by the City as long as
Lessee pays the rental and other sums payable hereunder and performs all of the
other covenants of Lessee to be performed hereunder.
19.2 Lease Subordinate to Liens. This Lease and the rights of Lessee
hereunder shall be, at the option of Lessor to be exercised from time to time,
either subordinate to, or superior to, the lien of any mortgages, deeds of
trust, security agreements or other security instruments now or hereafter placed
on or against the land and/or the Building and/or other improvements comprising
the Project (and all extensions, modifications, renewals and refnancings
thereof) without the necessity of executing and delivering any other or further
instruments on the part of Lessee to effectuate such subordination; provided,
however, that Lessor shall, upon Lessee's written request with respect to each
and any such mortgages, deeds of trust, security agreements or other security
instruments, exercise commercially reasonable efforts to cause the mortgagee,
deed of trust beneficiary, or secured party ("Mortgagee") to agree to deliver to
Lessee a non-disturbance and/or attornment agreement in favor of Lessee and in
form generally used by such Mortgagee for such purposes. Lessee hereby agrees,
at the written request of the purchaser of the Lessor's interest pursuant to
such foreclosure or other proceedings (or a conveyance in lieu thereof), to
attom to such purchaser or, at such purchaser's option, 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, Lessee shall execute
and deliver such further instrument or instruments evidencing such subordination
of this Lease to the lien of any such mortgages, deeds of trust or other
security instruments as may be requested by Lessor within 10 days after Lessee's
receipt of such request, provided that such Mortgagee and/or purchaser also
agrees that Lessee's possession will not be disturbed by such Mortgagee and/or
purchaser as long as Lessee pays the rental and other sums payable hereunder
when due and is not otherwise in default of the other covenants of Lessee to be
performed hereunder. If Lessee
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fails, neglects, or refuses to execute and deliver any such instruments within
10 days after receipt of written notice to do so together with the instruments
to be executed by it, and Lessee still fails to do so within 5 days after a
second notice from Lessor, Lessee hereby irrevocably appoints Lessor, its
successors and assigns, as the attorney-in-fact of Lessee to execute and deliver
any and all such instruments for and on behalf of Lessee.
20. ASSIGNMENTAND SUBLETTING.
20.1 Lessor's Consent Required. Lessee shall not convey, transfer,
sublease, assign, hypothecate, encumber, or otherwise dispose of this Lease or
any right, title or interest therein (including without limitation with respect
to Parking Spaces), or grant any licenses, concessions, or other rights to use
or occupy the Premises, whether voluntarily or by operation of law ("Transfer"),
without the prior written consent of Lessor, which may be withheld in Lessor's
sole discretion, and any such Transfer shall be void and/or shall terminate this
Lease at the option of Lessor. In no event shall Lessee be entitled to sublease
the Premises or assign this Lease so that the Premises are occupied by more than
one (1) tenant, nor shall Lessee be entitled to sublease the Premises or assign
this Lease to any other tenant in the Building. If Lessor consents to any
Transfer, Lessor may impose on Lessee or the transferee such conditions as
Lessor deems commercially reasonable. Lessee's request for consent to a Transfer
must describe in reasonable detail the parties involved, the terms of the
Transfer, the portion of the Premises affected by the Transfer and other terms
and conditions of the proposed Transfer, and Lessee upon written request from
Lessor, shall provide to Lessor any additional information Lessor deems
reasonably necessary to evaluate and consider the proposed Transfer or proposed
transferee. The consent by Lessor to any Transfer shall not be construed as a
consent to any other Transfer. If Lessor approves any Transfer by Lessee, it is
hereby agreed by Lessor and Lessee that Lessee shall not realize any financial
gain resulting from any increase in the rental value of the Premises. Therefore,
as a condition of any Transfer, it is agreed by the parties that Lessor shall
receive all consideration due or to become due to Lessee from any assignee,
sublessee or transferee with respect to such Transfer, including, without
limitation, the full and complete rental payments paid by such assignee,
sublessee or transferee, including any amounts paid in excess of Lessee's
financial obligations set forth in this Lease, measured on a square foot basis
with respect to the Rentable Area involved or the per space rental to be paid
with respect to the Parking Spaces.
20.2 No Release of Lessee. Regardless of whether Lessor's consent is
granted, no Transfer shall release Lessee of Lessee's obligations hereunder or
alter the primary liability of Lessee to pay the Rent and to perform all other
obligations to be performed by Lessee hereunder. The acceptance of Rent by
Lessor from any other person shall not be deemed to be a waiver by Lessor of any
provision hereof Upon a default by any assignee or successor of Lessee in the
performance of any of the terms hereof, Lessor may proceed directly against
Lessee without the necessity of commencing or exhausting remedies against said
assignee or successor.
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20.3 Attorneys' Fees. If Lessor is asked to consent to a Transfer
under Section 20.1 hereof, Lessee shall reimburse Lessor for reasonable
attorneys' fees incurred by Lessor in connection with giving such consent.
20.4 Corporations, Associations and Partnerships. If Lessee is a
corporation, a limited liability company ("LLC"), an unincorporated association,
or a partnership, the transfer, assignment, or hypothecation of any stock
membership or other interest in such corporation, LLC, association or
partnership in the aggregate in excess of 49% shall be deemed a Transfer within
the meaning of this Article 20, except that an initial public offering of stock
by MedAire, Incorporated utilizing a nationally recognized market such as NASDAQ
shall not be deemed a Transfer. Lessee shall have the right without Lessor's
consent to assign this Lease or sublet the Premises, or any part thereof to any
corporation or LLC into which or with which Lessee merges or consolidates, to
any entity which acquires all or substantially all of Lessee's assets, and to
any parent, subsidiary or affiliated corporation or LLC provided that the
resulting entity from such merger or consolidation shall have a net worth not
less than Lessee's prior to the merger, and provided further that any such
assignee shall deliver to Lessor a copy of a document satisfactory to Lessor by
which such assignee agrees to assume and perform all of the terms and conditions
of this Lease on Lessee's part from and after the effective date of such
assignment.
20.5 No Merger. The voluntary or other surrender of this Lease by
Lessee, a mutual cancellation of this Lease, or the termination of this Lease by
Lessor pursuant to any provision contained herein, shall not work a merger, but,
at Lessor's option, shall either terminate any or all existing assignments or
subleases hereunder, or operate as an assignment to Lessor of any such
assignments or subleases.
21. [INTENTIONALLY DELETED]
22. ABANDONMENT OF PREMISES. Lessee shall at all times during the term
hereof occupy and use the Premises during normal business hours. If Lessee
ceases to so occupy and use the Premises or abandons, vacates or surrenders the
Premises or is dispossessed by process of law or otherwise, Lessee's Property
remaining on the Premises shall be deemed abandoned and, at the option of
Lessor, may be kept or disposed of by Lessor as provided in section 23.2 hereof
The failure of Lessee to be open for business in the Premises for a period of 10
consecutive business days or longer, other than as a result of events of force
majeure as described in Section 26, shall constitute an abandonment of the
Premises.
23. LESSEE'S PROPERTY.
23.1 Lessee's Property. The term "Lessee's Property," as used in this
Lease, is defined as those items specifically designated as Lessee's Property on
Exhibit "D" attached hereto, the Telecommunications Equipment, and any
furniture, trade fixtures, equipment and personal property installed in, on or
about the Premises by Lessee at Lessee's expense, such as freestanding
cabinetwork and casework, metal storage units, signs, office machines, data
33
processing equipment, monitoring devices and chests, kitchen appliances (if
permitted by this Lease), and other items of personal property which are not
attached or built in.
23.2 Removal. Unless Lessee is in default hereunder, Lessee may remove
any of Lessee's Property (except that Lessee shall be obligated to remove the
Telecommunications Equipment as provided in Section 8.5) immediately upon the
expiration or termination of this Lease, and any of such Lessee's Property
remaining on the Premises upon such expiration or termination shall, at Lessor's
option, become the property of Lessor, or Lessor may dispose of same, as
attorney-in-fact for and at the expense of Lessee, as Lessor may deem
appropriate in its discretion and retain the proceeds therefrom. The power of
attorney granted herein is a power coupled with an interest. Lessee shall
promptly repair, in a good and workmanlike manner, at its own expense, any
damage to the Premises or the Building caused by the installation or removal of
Lessee's Property.
23.3 Taxes. Lessee shall pay, prior to delinquency, all taxes assessed
against or levied upon Lessee's Property. Lessee shall cause Lessee's Property
to be assessed and billed separately from the real property of which the
Premises are a part. If any or all of Lessee's Property is assessed and taxed
with said real property, Lessee shall pay to Lessor its share of such taxes, as
reasonably determined by Lessor, within 10 days after delivery to Lessee of a
statement in writing setting forth the amount due, together with reasonable
documentation supporting the claim.
24. SURRENDER. Upon the expiration or termination of this Lease for any
reason, Lessee shall immediately and peaceably surrender the Premises to Lessor
in a safe and clean condition and in good order and repair, normal wear and tear
excepted. Should Lessee fail to surrender the Premises upon the expiration or
termination of this Lease, Lessor shall have the immediate right to re-enter the
Premises and act in accordance with Section 29.2.1 hereof No act or conduct of
Lessor, whether consisting of the acceptance of the keys to the Premises, or
otherwise, shall be deemed to be, or constitute an acceptance by Lessor of, the
surrender of the Premises by Lessee prior to the expiration of the Lease Term
hereof unless Lessor provides Lessee with a written acknowledgment of acceptance
of surrender signed by Lessor.
25. PARKING
25.1 Surface Parking. Lessee acknowledges that limited surface parking
is available within the Project and that Lessee's invitees will be entitled to
use the same on a nonexclusive basis for loading and unloading passengers and
for short term parking for periods of time designated by Lessor, provided that
(i) Lessor may grant or permit exclusive use of portions of such surface parking
area (not to exceed fifty percent (50%) of the available spaces) for the benefit
of other tenants or occupants within or adjacent to the Project, and may install
or permit the installation of parking meters for some or all of such surface
parking area, and (ii) Lessee shall in any event cause its employees to park
outside of the Project or in the Underground Parking Facilities or the P-1
Parking Structure (as those terms are hereinafter defined) pursuant
34
to a parking agreement with the owner or manager thereof and (iii) the surface
parking areas shall be used only for the parking of automobiles and small trucks
but in no event shall recreational vehicles, boats or trailers be allowed while
doing business at the Project or otherwise, and no parking beyond the time
limits posted by Lessor with respect thereto shall be allowed.
25.2 P-1 Parking Structure; Underground Parking Facility. Lessor will
develop, or cause to be developed, a multi-floor parking structure designated
"P-I" on Exhibit AI attached hereto to the south of the Building ("P-1 Parking
Structure") and an underground parking area below the Building and other
portions of the Project ("Underground Parking Facilities"), which will be owned
by Lessor, an Owners' Association, or another entity (and the owner of each
parking facility will be referred to herein as a "Parking Facility Owner"). As
used in this Lease, the term "Parking Spaces" refers to parking spaces existing
from time to time in the P-1 Parking Structure or the Underground Parking
Facilities. Parking for Lessee's customers and clients, and the customers and
clients of other tenants of the Project, will be available in the P-I Parking
Structure, or if the same are constructed and made available by Lessor from time
to time, surface parking areas serving the Project, subject to Section 25.1. If
Parking Spaces for the P-I Parking Structure and/or the Underground Parking
Facilities are allocated to Lessee in the Basic Lease Information, then the
number stated therein are hereby granted to Lessee at the monthly rental set
forth in the Basic Lease Information, expressly subject to the following:
25.2.1 [Intentionally Deleted)
25.2.2 If the Parking Facility Owner for all or a portion of the
Parking Spaces is at any time not Lessor, Lessee shall, within thirty (30) days
after written direction from Lessor to do so, enter into a separate parking
agreement with the Parking Facility Owner, or its manager, providing for the
number of Parking Spaces at the monthly rental set forth in the Basic Lease
Information. Upon execution of such separate agreement, Lessor shall be relieved
of all further responsibility under this Lease with respect to the Parking
Spaces covered by said agreement.
25.2.3 The Parking Facility Owner of the P-1 Parking Structure
shall have the right to construct the same in three or more stages. During
construction, Lessor or other Parking Facility Owner shall be entitled to
require Lessee to use alternative parking facilities provided by the Parking
Facility Owner within ▇▇▇▇▇▇ ▇▇▇▇▇ Lakeside so long as the number of alternative
spaces equals the number of Parking Spaces allocated in the Basic Lease
Information to Lessee in the P-I Parking Structure. The Parking Facility Owner
shall be entitled to provide such alternative parking spaces during construction
of each stage of the P-1 Parking Structure and Lessee agrees to use such
alternative spaces. If the Parking Facility Owner is not Lessor, then the
Parking Facility Owner shall constitute a third party beneficiary of this
Section 25.2.2.
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25.2.4 The P-1 Parking Structure and Underground Parking
Facilities shall only be used for the parking of automobiles and small trucks
(but in no event shall recreational vehicles, boats or trailers be allowed) and
shall be subject to height limitations established from time to time by each
Parking Facility Owner.
25.2.5 The Parking Spaces in the P-1 Parking Structure as
designated in the Basic Lease Information shall be available for use during
"normal business hours" of the Building, which shall mean 7:00 a.m. to 6:00
p.m., Monday through Friday (except legal holidays), and 8:00 a.m. to noon on
Saturday (except legal holidays). Parking access cards for the Parking Spaces
allocated to Lessee will entitle the holder to obtain access to the P-1 Parking
Structure and/or the Underground Parking Facilities during and after normal
business hours, but reserved Parking Spaces in the P-1 Parking Structure will
only be available during normal business hours Monday through Friday (except
legal holidays). After such normal business hours, holders of parking access
cards will be allowed to use the parking access cards to obtain access to the
P-1 Parking Structure, but will not be guaranteed the use of the Parking Spaces
therein, including reserved Parking Spaces, provided that the foregoing shall
not apply to the ten (10) executive parking spaces referred to in the Basic
Lease Information, which are located below the Building and not in the P-1
Parking Structure. Lessee is hereby advised that the P-1 Parking Structure will
be available for public use both during and after normal business hours and that
sporting events or other activities in the vicinity of ▇▇▇▇▇▇ ▇▇▇▇▇ Lakeside may
create a significant demand for spaces within the P-1 Parking Structure.
25.2.6 The Parking Spaces in the Underground Parking Facilities
will not be available to the public during or after normal business hours or on
legal holidays.
25.2.7 Lessee will not park, or permit its employees or
contractors to park, in any areas designated by a Parking Facility Owner or its
manager for parking by visitors to the Project or for the exclusive use of other
tenants or occupants of the Project.
25.2.8 Any parking access cards, parking stickers or other
devices or forms of identification supplied by a Parking Facility Owner as a
condition to using its parking facilities shall remain the property of the
Parking Facility Owner, and the same must be displayed as requested and not
mutilated or obstructed in any manner. Parking access cards, stickers and other
devices are not transferable, and any parking sticker or other device found in
the possession of an unauthorized holder will be void. Each Parking Facility
Owner may charge a fee for parking access cards, parking stickers or other
parking control devices supplied or replaced by the Parking Facility Owner.
25.2.9 No over night or extended term parking or storage of
vehicles shall be permitted. Parking is prohibited on or in (i) areas not
striped for parking, (ii) aisles, (iii) areas where "no parking" signs are
posted or marked on the parking surface, (iv) any ramps, entries or exits, (v)
any cross-hatched areas, any (vi) designated loading areas, or (vii) such other
areas as may be designated from time to time by the Parking Facility Owner for
maintenance, repair or
36
other purposes.
25.2.10 All responsibility for damage to, or loss or theft of any
vehicles or any contents thereof are expressly assumed by Lessee or other
persons parking their vehicle in the Underground Parking Facilities or P-1
Parking Structure, except for Lessor's (or its successor's) gross negligence.
11 25.2.11 Lessor reserves the right to require Lessee, as a
condition to using its allocated Parking Spaces, to enter into a parking
agreement providing for additional regulations, restrictions, and requirements
with respect to use of its allocated Parking Spaces as long as the terms and
conditions thereof are not materially inconsistent with this Lease or the rules
and regulations referred to in Section 6.7 of this Lease.
25.2.12 Lessor, on its behalf and on behalf of any other Parking
Facility Owner, reserves the right to refuse parking identification devices
and/or parking rights to Lessee or any other person who fails to comply with the
covenants in this Section 25.2, or in any separate parking agreement provided
for in this Section 25.2, or in any of the rules and regulations provided for in
Section 6.7; and any violation thereof shall subject the vehicle of the
offending person to be removed or immobilized at such person's expense.
25.3 Parking Ratio. The surface parking within the Project, the P-1
Parking Structure, and the Underground Parking Facilities (including areas
designated for visitor parking) will together offer parking to tenants and
visitors of the Building, on a non-exclusive basis, at a ratio of four (4)
parking spaces for each 1,000 square feet of usable area within the Building.
26. FORCE MAJEURE. If Lessor or Lessee is delayed or prevented from the
performance of any act required hereunder by reason of 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 reasonable control of such party (financial inability excepted),
performance of such act shall be excused for the period of delay.
27. RIGHTS RESERVED BY LESSOR. The rights set forth on Exhibit "E" are
hereby reserved by Lessor and are exercisable without notice to Lessee or
liability for any inconvenience suffered by Lessee as a result thereof
(including, without limitation, any diminution of light, air. or view), and
Lessee shall not be entitled by reason thereof to terminate this Lease or
receive any abatement or reduction of Rent or other sums.
28. NOTICES. No notice, consent, approval or other communication given in
connection herewith shall be validly given, made, delivered or served unless in
writing and sent by facsimile transmission or by registered or certified United
States mail, postage prepaid, or by nationally-recognized overnight delivery
service, to Lessor (or the Managing Agent if Lessor so designates in the Basic
Lease Information) or Lessee, as the case may be, at the respective addresses or
fax numbers set forth in the Basic Lease Information, or to such other addresses
or
37
fax numbers as either party hereto may from time to time designate in writing
and deliver in accordance herewith to the other party. Notices, consents,
approval or communications shall be deemed given or received 24 hours after
deposit in the mail as hereinabove provided, or immediately if sent by facsimile
transmission.
29. DEFAULTS; REMEDIES.
29.1 Defaults. The occurrence of anyone or more of the following
events shall constitute a default and breach of this Lease by Lessee:
29.1.1 Lessee abandons the Premises, or fails to surrender the
Premises as provided in Section 24 above.
29.1.2 Lessee fails to make any payment of Base Rental or any
other Rent or other sum due under this Lease, together with interest thereon as
herein provided, as and when due, where such failure shall continue for a period
of five (5) days after written notice thereof from Lessor to Lessee.
29.1.3 Lessee fails to observe or perform any of the covenants,
conditions or provisions of this Lease to be observed or performed by Lessee,
other than as described in Sections 29.1.1 or 29.1.2 above, where such failure
shall continue for a period of 15 days after written notice thereof to Lessee;
provided, however, that if the nature of Lessee's failure is such that more time
is reasonably necessary in order to cure Lessee's failure, then Lessee shall not
be in default under this Lease if Lessee diligently commences to cure within
said 15-day period, exercises its consistent and best efforts to cure such
failure, keeps Lessor reasonably advised of its efforts and progress to cure,
and completes such cure within not more than 45 days after the written notice
from Lessor provided for above.
29.1.4 To the extent that a declaration of default is not
prohibited by law, (i) the making by Lessee of any general assignment, or
general arrangement for the benefit of creditors; (ii) the fling by or against
Lessee of a proceeding under state or federal insolvency and/or bankruptcy laws
(unless, in the case of a petition fled against Lessee, the same is dismissed
within 30 days); (iii) the appointment of a trustee or receiver to take
possession of substantially all of Lessee's assets located at the Premises or of
Lessee's interest in this Lease, where possession is not restored to Lessee
within 30 days; or (iv) the attachment, execution or other judicial seizure of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease.
29.1.5 An assignment or subletting of the Premises without the
written consent of Lessor as provided in Article 20.
29.2 Remedies. Upon any such default or breach by Lessee, Lessor shall
be entitled to exercise the following rights and remedies at any time
thereafter, with or without notice or demand, and without limiting Lessor in the
exercise of any right or remedy which
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Lessor may have by reason of such default or breach (and Lessor shall be
entitled to recover from Lessee all reasonable attorneys' fees and costs
incurred by Lessor in enforcing its rights and remedies, regardless of whether
legal proceedings are commenced):
29.2.1 Lessor shall have the immediate right of re-entry and may
remove all persons and property from the Premises, without liability for damages
sustained by reason of such removal. Such property may be removed and stored in
a public warehouse or elsewhere at the cost of and for the account of Lessee.
Should Lessor elect to re-enter as herein provided, or should it take possession
pursuant to legal proceedings or pursuant to any notice provided by law, it may
either terminate this Lease to the same extent and with all the legal incidents
as if the term hereof had expired by lapse of time, or it may from time to time,
without termination of this Lease, relet the Premises or any part thereof in
accordance with Section 29.3 below. No such reentry or taking possession of the
Premises by Lessor shall be construed as an election on its part to terminate
this Lease unless a written notice of such intention is given to Lessee.
Notwithstanding any such reletting without termination, Lessor may, at any time
thereafter, elect to terminate this Lease for such previous breach. Regardless
of whether or not the Lease is terminated as provided above, Lessor shall be
entitled to terminate all of the rights of Lessee and/or its employees or other
Persons with respect to all Parking Spaces, and to recover from Lessee all
damages incurred by Lessor as a result of Lessee's default, including without
limitation (i) the worth at the time of Lessee's default, all unpaid Base Rental
(and upon Lessee's default, all Base Rental abated pursuant to Section 3.5.1,
and the difference between the Base Rental paid pursuant to Section 3.5.2 and
the amount of Base Rental otherwise due as set forth in the Basic Lease
Information, shall become immediately due and payable and shall be deemed unpaid
Base Rental for purposes of this provision), Operating Expenses and other Rent
and sums due from Lessee under this Lease through the date Lessor elects to
re-enter the Premises and/or terminate this Lease, and all Base Rental,
Operating Expenses, and other Rent and sums due under this Lease after re-entry
and/or termination through the end of this term of this Lease as set forth in
Article 2, and (ii) all other amounts necessary to compensate Lessor for all
detriment caused by Lessee's default. Lessor shall be entitled to receive a
judgment for the full amount of such damages as may be reduced by any amounts
received and applied by Lessor as provided in Section 29.3. In determining worth
at the time of Lessee's default, a discount rate equal to I% above the discount
rate then in effect at the Federal Reserve Bank serving Phoenix shall be used.
29.2.2 Lessor shall have the right, but not the obligation, to
render the performance required to cure such default or breach and to charge to
Lessee all costs and expenses incurred in connection therewith (including a
service fee equal to 15% of all sums expended by Lessor to. cure the default or
breach), together with interest thereon from the date incurred by Lessor at the
rate provided below, and Lessee shall immediately pay the same upon presentment
of a statement to Lessee.
29.2.3 No remedy herein conferred upon Lessor shall be considered
exclusive of any other remedy, but the same shall be cumulative and shall be in
addition to every other remedy given hereunder, or now or hereafter existing at
law or in equity or by statute,
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including, but not limited to, the right to maintain an action to recover all
amounts due hereunder. Lessor may exercise its rights and remedies at anytime,
in any order, to any extent, and as often as Lessor deems advisable.
29.2.4 In addition to every other remedy available to Lessor,
Lessor may, in the event of default as defined in this Article, obtain the
appointment of a receiver in any court of competent jurisdiction, and the
receiver may enter the Premises and take possession of Lessee's Property and any
other personal property belonging to the Lessee and used in the conduct of
Lessee's business in the Premises. Such entry or possession by said receiver
shall not constitute an eviction of Lessee from the Premises or any portion
thereof and Lessee shall indemnify, defend and hold Lessor harmless from any
claim by any person arising out of or in anyway connected with the entry by said
receiver in taking possession of the Premises and/or said personal property.
Neither the application for the appointment of such receiver, nor the
appointment of such receiver, shall be construed as an election on Lessor's part
to terminate this Lease unless a written notice of such intention is given to
Lessee.
29.3 Reletting the Premises. Lessor, in the exercise of its rights
under Section 29.2.1, shall have the right to relet the Premises or any portion
thereof, and to grant the use of all or a portion of the Parking Spaces made
available to Lessee pursuant to this Lease, for such term or terms (which may be
for a term extending beyond the term of this Lease) and at such rental and upon
such other terms and conditions as Lessor, in its sole discretion, may deem
advisable. Lessor shall also have the right to make such alterations and repairs
to the Premises as Lessor may deem advisable, in its sole discretion. Upon such
reletting, the rents received by Lessor for the Premises shall be applied first
to the payment of any indebtedness other than rent due hereunder from Lessee to
Lessor; second, to the payment of all costs and expenses of such reletting
(including leasing commissions) and of such alterations and repairs; third, to
the payment of rent due and unpaid hereunder; and the residue, if any, shall be
held by Lessor and applied to payment of future rent as the same may become due
and payable hereunder. If the rents for the Premises received from such
reletting during any month are less than that to be paid during that month by
Lessee hereunder, Lessee shall immediately pay any such deficiency to Lessor.
Such deficiency shall be calculated and paid monthly.
29.4 No Waiver. No delay or omission of Lessor to exercise any right
or power arising from any default shall impair any such right or power, and
shall not be construed to be a waiver of any such default or an acquiescence
therein. No waiver of a default shall be effective unless it is in writing. No
written waiver by Lessor of any provision of this Lease or any breach by Lessee
hereunder shall be deemed to be a waiver of any other provision hereof, or of
any subsequent breach by Lessee of the same or any other provision. Lessor's
consent to or approval of any act by Lessee requiring Lessor's consent or
approval shall not be deemed to render unnecessary the procurement of Lessor's
consent to or approval of any subsequent act of Lessee, whether or not similar
to the act so consented to or approved.
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29.5 Late Charges. Lessee hereby acknowledges that late payment by
Lessee of rent and other sums due hereunder will cause Lessor to incur costs not
contemplated by this Lease, the exact amount of which will be difficult to
ascertain. Such costs include, but are not limited to, processing and accounting
charges, and charges which may be incurred by Lessor pursuant to its financing
for the Building. Accordingly, if any monthly Base Rental payment or other
amount due to Lessor hereunder shall not be received by Lessor within 10 days
after the due date therefore, more than once during any 12-month period, and
then on the second and all subsequent occasions, Lessee shall pay to Lessor a
late charge equal to 10% of such amount. The parties agree that such late charge
represents a fair and reasonable estimate of the costs Lessor will incur by
reason of late payment by Lessee, and shall be in addition to any interest which
may accrue thereon pursuant to Section 29.6 below. Lessor shall have the right
to require Lessee to pay all past-due obligations, including late charges and
interest, in the form of a cashier's check.
29.6 Interest. Any amount due to Lessor or Lessee which is not paid
when due shall bear interest, not to exceed the maximum rate allowed by law,
from the date due until paid at a rate equal to the greater of (i) 15% per
annum, or (ii) a rate per annum equal to 3% in excess of the "Prime Rate"
designated by Bank One (or its successor(s)) from time to time as its prime
commercial lending rate during the period said amounts are owed by Lessee or
Lessor. Payment of such interest shall not excuse or cure any default under this
Lease.
29.7 Attorneys' Fees. If either party resorts to judicial proceedings
to enforce any right under this Lease or to obtain relief for any default by the
other party, the party prevailing in such proceedings shall be entitled to
recover from the non-prevailing party the costs thereof, including reasonable
attorneys' fees (as determined by the court).
30. LESSOR LIABILITY
30.1 Default by Lessor. Lessor shall not be considered in default or
breach of this Lease for the non-performance of any obligation imposed herein
unless Lessee provides Lessor with written notice of said non-performance and:
30.1.1 If the same relates solely to the payment of money, Lessor
fails to perform within 20 days after receipt of said written notice, or
30.1.2 If the same does not relate to the payment of money,
Lessor fails to commence performance within 30 days after receipt of written
notice from Lessor, and to diligently continue such performance until the
obligation is fulfilled.
If Lessor grants a security interest in this Lease to any person
or entity and if Lessee has been notified in writing of the name and address of
said lienholder, then Lessee shall simultaneously upon giving any notice of
non-performance to Lessor deliver a copy of same to each such lienholder, by
personal delivery or certified or registered United States mail,
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postage prepaid (notices sent by mail shall be deemed delivered upon receipt) .
Each such lienholder shall be entitled to perform such obligation within 45 days
after the expiration of any period of time within which Lessor is entitled to
perform such obligation.
30.2 Sale of Lessor's Interest. Upon any sale or conveyance of
Lessor's interest in this Lease (excluding a transfer of title to the Building
and adjacent land to the City of Tempe pursuant to Section 19.1 above, but
including Lessor's assignment of its interest as lessee under the Master Lease
and Lessor under this Lease to another person or entity), Lessor shall be
entirely relieved of all liability for Lessor's obligations under this Lease
accruing thereafter, and the assignee or purchaser shall be deemed without any
further agreement between the parties or their successors in interest to have
assumed all of the obligations of Lessor under this Lease accruing after such
conveyance. This Lease shall not be affected by any such sale or conveyance and
Lessee agrees to attorn to such successor in interest- The Security Deposit made
by Lessee hereunder shall be transferred by Lessor to such successor in interest
and thereupon Lessor shall be discharged from any further liability in reference
thereto.
30.3 No Liability for Loss, Theft, Etc. Except for the gross
negligence or willful misconduct of Lessor, Lessor and its agents shall not be
liable to Lessee for any damage to property entrusted to Lessor's employees,
agents or contractors, nor for loss of or damage to any property by theft,
disappearance or otherwise, nor for any injury or damage to persons or property
resulting from any cause whatsoever, including without limitation fire,
explosion, falling ceiling material or wall board, steam, gas, electricity, any
act or omission of co-tenants or other occupants of the Building or of adjoining
or contiguous property or buildings, water or rain which may leak from any part
of the Premises or the Building or from the pipes, tanks, appliances or plumbing
works therein, or from the roof street or subsurface, or from any other place.
Lessor and its agents shall not be liable to Lessee for interference with the
natural light, and except as otherwise specifically provided in this Lease,
Lessor and its agents shall not be liable to Lessee for any latent defect in the
Premises or in the Project. Lessee shall give prompt notice to Lessor of any
fire, accident or defect discovered within the Premises or the Project.
30.4 Lessor's Liability. Notwithstanding anything to the contrary
contained in this Lease, it is expressly understood and agreed by and between
the parties hereto that, except as provided in the last sentence of this
Section: (i) the recourse of Lessee, or its successors or assigns, against
Lessor with respect to any alleged breach by or on the part of Lessor of any
representation, warranty, covenant, undertaking or agreement contained in the
Lease or otherwise arising out of Lessee's use of the Premises or the Project
(collectively "Lessor's Lease Obligations") shall extend only to Lessor's
interest in the real estate of which the Premises are a part ("Lessor's Real
Estate") and the rents derived therefrom, and not to any other real property,
personal property or other assets of Lessor or its former or current members, or
any of the current or former directors, officers, employees, agents, members, or
partners thereof and (ii) except to the extent of Lessor's interest in Lessor's
Real Estate, no personal liability or personal responsibility of any sort with
respect to any of Lessor's Lease Obligations or any alleged breach thereof is
assumed by, or shall be asserted or enforceable against, Lessor or any current
or former
42
members thereof, or any of Lessor's or such member's current or former
directors, officers, employees, agents, members, or partners. If Lessee first
diligently attempts to collect a judgment obtained after a breach of Lessor's
Lease Obligations against only Lessor's Real Estate and the rents derived
therefrom, and the equity therein or the amount of rents are insufficient to
satisfy said judgment, then and only then may Lessee levy against other assets
of Lessor.
31. GENERAL.
31.1 Captions. The headings of the Articles and the Sections hereof
are inserted for convenience only and shall not affect the construction of any
of the provisions hereof.
31.2 Time of the Essence. Time is of the essence with respect to this
Lease.
31.3 No Partnership; No Third Party Rights. Nothing contained in this
Lease shall create any partnership, joint venture or other arrangement between
Lessor and Lessee. Except as expressly provided herein, no provision of this
Lease is intended to benefit, and shall not benefit, any person not a part
hereto and no such other person shall have any right or cause or action
hereunder.
31.4 Entire Agreement. This Lease constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and shall not
be changed or added to except in writing signed by all parties hereto. All prior
and contemporaneous agreements, representations, statements and understandings
of the parties, oral or written, that modify, amend or vary any of the terms of
this Lease, are hereby superseded and merged herein.
31.5 Joint and Several Obligations. If Lessee comprises two or more
persons, corporations, LLC's, or other entities, all agreements, covenants,
representations and warranties of Lessee herein are the joint and several
obligations of the entities comprising Lessee. If Lessee is husband and wife,
the obligations hereunder shall extend individually to the sole and separate
property of each as well as to their community property. Notice given to any one
of the entities constituting Lessee shall be deemed as having been given to all
such entities.
31.6 Authority to Execute. Any individual executing this Lease on
behalf of a corporation, LLC, or other partnership or entity represents and
warrants that he or she is duly authorized to execute and deliver this Lease on
behalf thereof and that this Lease is binding thereon in accordance with its
terms. If Lessee is a corporation or LLC, Lessee shall deliver to Lessor within
15 days after the execution hereof a certified copy of a resolution of the Board
of Directors of said corporation, or a member resolution of said LLC,
authorizing or ratifying the execution and delivery of this Lease by the
individuals executing and delivering same.
31.7 Arizona Law. This Lease shall be governed by and interpreted in
accordance with the laws of Arizona.
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31.8 Partial Invalidity. If any provision of this Lease is held by a
court to be invalid, void or unenforceable, the remainder of this Lease shall
remain in full force and effect and shall in no way be affected or invalidated.
31.9 Incorporation of Exhibits. All exhibits attached hereto shall be
deemed a part of this Lease.
31.10 Waiver of Notice. Unless Lessor is otherwise specifically
obligated to do so by the terms of this Lease, Lessee hereby expressly waives
the service of any notice of intention to terminate this Lease or to re-enter
the Premises and waives the service of any demand for payment of rent or for
possession and waives the service of any other notice or demand prescribed by
any statute or other law.
31.11 Binding on Successors and Assigns. Each of the provisions of
this Lease shall bind, extend to, and inure to the benefit of the respective
heirs, legal representatives, and successors and assigns of both Lessor and
Lessee; provided, however, that this clause shall not permit any assignment or
transfer contrary to the provisions of Article 20.
31.12 Impartial Interpretation. This Lease is the result of
negotiations between Lessor and Lessee. The language in this Lease shall be
construed as a whole according to its fair meaning and not strictly for or
against either party.
31.13 Not Binding Until Signed. Submission of this instrument for
examination shall not bind Lessor in any manner, and no lease or obligation
shall arise until this instrument is executed and delivered by Lessor and
Lessee.
31.14 No Recording Lessee shall not record this Lease nor a memorandum
of this Lease.
31.15 Calendar Days. Whenever in this Lease references made to "days"
(for example, when payment or other performances due within a specified number
of days), the reference shall refer to calendar days unless reference is
specifically made to "business days". As used in this Lease, the term "business
days" shall mean Monday through Friday excluding legal holidays recognized by
the State of Arizona.
31.16 Lessee's Financial Statements. Within 15 days after request
therefore, and not more often than once annually except in connection with a
sale or financing of the Building or Project, Lessee shall deliver to Lessor a
copy of Lessee's financial statements (including, but not limited to, an audited
balance sheet, if available, and an income statement) for the prior fiscal year
certified by an executive officer of Lessee, together with the annual
shareholders' report of Lessee or any then parent of Lessee, along with, if
available, consolidated financial statements of the parent and its subsidiaries.
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31.17 Brokers. Lessor and Lessee represent that they have dealt
directly with and only with the Brokers in connection with this Lease and that
insofar as either party knows, no other broker, agent or finder negotiated or
participated in this transaction or the negotiation of this Lease or submitted
or showed the Premises or is entitled to any commission or finder's fee in
connection therewith, and that each party shall be solely responsible with
respect to any dealings of such party with any such other real estate broker,
agent, finder or other person, and Lessor and Lessee each shall protect and
indemnify, hold harmless and defend the other from any liability with respect
thereto. Lessor shall pay a commission to Lessor's Broker pursuant to a separate
agreement signed by Lessor's Broker, but shall not pay a commission directly to
Lessee's Broker. Any commission due to Lessee's Broker shall be paid by Lessor's
Broker pursuant to a separate agreement between Lessor's Broker and Lessee's
Broker. Lessor and Lessee agree that no broker (including Brokers) shall be
entitled to any commission in connection with any extension of the Lease Term or
any expansion of the Premises.
31.18 Waiver and Release. Lessee acknowledges that the Project is
within the flight path for flights arriving at and departing from Sky Harbor
International Airport ("Sky Harbor"). Lessee hereby waives and releases Lessor
from and against any and all claims by Lessee relating to noise or vibration
caused by aircraft or other vehicles approaching or leaving Sky Harbor.
31.19 Consent of Lessor . With regard to any provision requiring
Lessor's consent or approval, Lessor shall be entitled to withhold such consent
or approval for any reason in its sole discretion, unless the applicable
provision in this Lease expressly states Lessor's consent or approval will not
be unreasonably withheld. Lessor's consent to, or approval of any matter
requiring Lessor's consent or approval shall not be deemed a waiver of the
requirement to obtain Lessor's consent to or approval of any similar matter.
31.20 Other Tenants. Lessor reserves the absolute right to allow such
other tenants and occupants in the Project as Lessor, in the exercise of its
business judgment, shall determine will best promote the interests of the
Project. Except as otherwise specifically provided for in this Lease, Lessee
does not rely on the fact, nor does Lessor represent, that any specific tenant
or number of tenants shall, during the term of this Lease, occupy any space in
the Project.
45
IN WITNESS WHEREOF, the parties hereto have executed this Lease the day and
year hereinabove written.
LESSEE: LESSOR:
MEDAIRE, INC., INCORPORATED ▇▇▇▇▇▇ ▇▇▇▇▇ LAKESIDE, LLC,
an Arizona corporation an Arizona limited liability
company
Its: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ By: SunCor Development Company,
-------------------------------- an Arizona corporation, as Managing
Member
Its: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
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LIST OF EXHIBITS
EXHIBIT "A" Floor Plan with Premises Designated (Section 1.1)
EXHIBIT "A-1" Diagram of entire ▇▇▇▇▇▇ ▇▇▇▇▇ Lakeside Development with Project
outlined
EXHIBIT "B" Project Rules and Regulations (Section 6.7)
EXHIBIT "C" Construction Obligations of Lessor and Lessee (Section 7.2)
SCHEDULE "1" to Exhibit C - Building Standards
EXHIBIT "D" Description of Lessee's Property (Section 23.1)
EXHIBIT "E" Rights Reserved by Lessor (Section 27)
EXHIBIT "F" Rooftop License Agreement
Exhibit "A"
(graphic)
Exhibit "A-1"
Diagram of Entire ▇▇▇▇▇▇ ▇▇▇▇▇ Lakeside Development with Project Outlined
(diagram)
EXHIBIT "B"
PROJECT RULES AND REGULATIONS
1. No sign (including without limitation neon signs), placard, picture,
advertisement, name, notice or other information of any kind shall be inscribed,
displayed, printed or affixed on or to any part of the outside or inside of the
Building, the Premises, the Project or the surrounding area without the prior
written consent of Lessor. If such consent is given by Lessor, Lessor may
regulate and approve the manner of display. Lessor shall have the right to
remove any such item which has not been approved by Lessor without notice to and
at the expense of Lessee. All approved signs or lettering on doors shall be
printed, painted, affixed or inscribed at the expense of Lessee by a person
approved by Lessor. Lessee shall not place anything or allow anything to be
placed near any window or any glass door, partition or wall which may appear
unsightly, in Lessor's reasonable discretion, from outside the Premises. Lessee
shall not display or exhibit any products, goods, wares, or merchandise and
shall not distribute advertising materials outside of the Premises. Lessee shall
not install exterior lighting on or decorate, paint or otherwise alter or
improve the exterior of the Project or the Premises, and Lessee shall not
install any antenna or other structure or object on the roof or any other
portion of the Project, except to the extent provided in an addendum to its
lease for the Premises, if any. Lessee shall not store products, containers or
merchandise on the Project in areas outside of the Premises except for such
short periods of time as may be necessary for loading or unloading delivery
vehicles, which shall only occur in areas specifically designated for such
purposes by Lessor from time to time within the P-1 Parking Structure and shall
be regulated by Lessor's facilities coordinator.
2. The directory for the Building will be provided exclusively for the
display of the name and location of the lessees only. Lessor reserves the right
to exclude any other names therefrom and to charge a reasonable fee for each
name, other than Lessee's name, placed upon such directory at the request of
Lessee.
3. The sidewalks, parking areas, halls, lobby areas, toilets, stairways,
passages, exits, entrances, elevators, driveways, loading areas and trash
pick-up areas shall not be obstructed by Lessee, its customers, invitees,
licensees and guests, or used for any purpose other than for ingress to and
egress from the Premises. The halls, lobby areas, passages, exits, entrances,
sidewalks, parking areas, elevators, stairways, toilets, balconies and roof are
not for the use of the general public and Lessor shall in all cases retain the
right to control the same and prevent access thereto by all persons whose
presence in the judgment of the Lessor shall be prejudicial to the safety,
character, reputation and interests of the Project or its lessees. Neither
Lessee nor the employees, contractors or invitees of Lessee shall go upon the
roof of the Building. The sashes, sash doors, skylights, windows, and doors that
reflect or admit light and air into halls, passageways or other public places in
the Building shall not be covered or obstructed.
Exhibit B - Page 1
4. The toilets, urinals, sinks, drains, and other apparatus shall not be
used for any purpose other than that for which they were constructed and no
foreign substance of any kind whatsoever shall be thrown therein. The expense of
any breakage, stoppage or damage resulting from a violation of this rule shall
be borne by Lessee if Lessee or its agents, contractors, employees or invitees
caused the same.
5. Lessor shall have the right to prescribe the weight, size and position
of all safes and other heavy equipment brought into the Building and also the
times and manner of moving the same in and out of the Building. Safes or other
heavy objects shall, if considered necessary by Lessor, stand on wood strips of
such thickness as may be necessary to properly distribute the weight. Lessor
will not be responsible for loss of or damage to any such safe or property from
any cause and all damage done to the Building by moving or maintaining any such
safe or other property shall be repaired at the expense of Lessee. There shall
not be used in the Premises or the Building any hand trucks except those
equipped with rubber tires and side guards.
6. Lessor shall have the right to designate and control any service in or
to the Building and its lessees. Lessee shall not employ any person other than
the janitor of Lessor for the purpose of cleaning the Premises unless otherwise
agreed by Lessor in writing. Lessor will require any janitorial service to
maintain commercially reasonable levels of insurance coverage insuring its
activities. Except with the written consent of Lessor, no person or persons
other than those approved by Lessor shall be permitted to enter the Building for
the purpose of cleaning the same. Lessee shall not cause any unnecessary labor
by reason of Lessee's carelessness or indifference in the preservation of good
order and cleanliness. Lessor shall not be responsible to Lessee for any theft
or loss of property on the Premises, however occurring, or for any damage done
to the effects of Lessee, by or as a result of the acts of the janitor, any
other employee or contractor of Lessor, or any other person. Lessor's janitor
service will provide the level of service consistent with other Class A office
buildings within the Phoenix metropolitan area, but shall not include cleaning
of non-standard Building draperies or moving of furniture and other special
services. Janitor service will not be furnished in any room occupied at the time
the janitor attempts to clean such room. Window cleaning shall be done only by
Lessor at intervals it deems appropriate.
7. Lessee shall not use, keep or permit to be used or kept, except as
specifically allowed in this Paragraph, any noxious gas or substance in the
Premises, nor permit the Premises to be occupied or used in a manner offensive
or objectionable to Lessor and other occupants of the Building by reason of
odors and/or vibrations, or interfere in any way with other lessees or occupants
conducting business in the Building. With respect to any lessees who are
specifically allowed to operate a restaurant by Lessor, may generate cooking
odors which may be allowed by Lessor if in Lessor's sole and absolute
discretion, the same are not noxious, putrid, foul or offensive. No bicycles,
scooters or similar equipment shall be allowed in the Building, and no animals
(except seeing eye dogs) or birds shall be brought or kept in or about the
Premises or the Building. No Lessee shall make or permit to be made any
disturbing noises or disturb or
Exhibit B - Page 2
interfere with occupants of the Project or neighboring property, or with those
having business with such occupants, by the use of any musical instrument,
radio, phonograph, electronic device, or other devices. No cooking of any kind
shall be done or permitted by Lessee in the Premises, except the preparation of
microwave items such as popcorn, soup, and frozen food items, and of coffee,
tea, hot chocolate and similar items. However, all of the foregoing must be
prepared only for incidental consumption by Lessee, its employees, clients and
guests, and not for retail or commercial purposes.
8. The Premises shall not be used for manufacturing or for the storage of
merchandise except as such storage may be incidental to the use of the Premises
for the purposes permitted by the Lease. Lessee shall not conduct any auction or
permit any fire sale or bankruptcy sale to be held on the Premises. The Premises
shall not be used for lodging or for illegal purposes.
9. Lessee shall not (i) use any method of heating or air conditioning other
than that supplied by Lessor, nor (ii) use or keep in the Premises, the
Building, or the Project any kerosene, gasoline, naphtha, benzene or other
explosive or inflammable fluid or material, except for customary and usual (both
as to type and quantities stored) office and cleaning supplies, but only if such
use, presence or storage does not result in the violation of any Environmental
Laws.
10. Lessee shall not allow the installation of telephone wires or
electrical or computer wires or circuits, except with Lessor's prior written
approval, which consent shall not be unreasonably withheld. The location of
telephones and other office equipment affixed to the Premises shall be subject
to the approval of Lessor, but the installation of same shall be at the expense
of Lessee.
11. All keys to the Building, offices, rooms and toilets, and all parking
cards for the Parking Spaces, shall be obtained from Lessor. Should Lessee
require any duplicate keys or parking cards, Lessee shall request the same from
Lessor, who shall provide such keys or parking cards at a reasonable charge.
Lessee, upon termination of its tenancy, shall deliver to Lessor all keys and
parking cards which shall have been furnished, pay Lessor the cost of replacing
any parking card or lost key, or changing any lock which can be opened by such
lost key if Lessor deems it necessary to make such change, and disclose to
Lessor the combination of any safes, cabinets or vaults left in the Premises.
Lessee shall not alter or replace any lock or install any additional locks or
any bolts on any door of the Premises without the prior written consent of
Lessor, which consent shall not be unreasonably withheld.
12. Lessee shall not lay linoleum, tile, carpet or other similar floor
coverings in any manner except as approved by Lessor, which consent shall not be
unreasonably withheld conditioned or delayed. The expense of repairing any
damage resulting from a violation of this rule or removal of any floor covering
shall be borne by Lessee.
Exhibit B - Page 3
13. On Saturdays, Sundays and legal holidays, and on other days during
which the Building may be closed after normal business hours, access to the
Building or to the halls, corridors or stairways in the Building, or to the
Premises may be controlled through the use of monitoring personnel and/or
monitoring systems and devices. Such personnel will have the right to demand of
any and all persons seeking access to the Building proper identification to
determine if they have right of access to the Premises. Lessor shall in no case
be liable for damages for any error with regard to the admission to or exclusion
from the Building of any person, except for damages arising from Lessor's gross
negligence or willful misconduct. In case of invasion, mob, riot, public
excitement or other commotion, Lessor reserves the right to prevent access to
the Building by closing the doors or otherwise. The foregoing notwithstanding,
Lessor shall have no duty to anyone to provide monitoring protection for the
Building at any time or to monitor access thereto.
14. Lessee shall see that the exterior doors of the Premises are kept
closed at all times except for entry and exit purposes, and that the same are
not kept open by a chair or other device. Lessee shall also cause all exterior
doors of the Premises to be closed and securely locked before leaving the
Building, and shall cause all water faucets and water apparatus to be shut off
before Lessee or its employees leave the Building. Lessee shall be responsible
for any damage to the Building or to other lessees caused by a failure to comply
with this rule.
15. Lessor reserves the right to exclude or expel from the Building any
person who, in the judgment of Lessor, is intoxicated or under the influence of
liquor or drugs, or who shall in any manner do any act in violation of any of
the rules and regulations of the Building.
16. Employees, contractors or agents of Lessor shall not be requested to
perform any work or do anything outside of their regular duties unless under
special instructions from Lessor.
17. No more than four (4) vending machines shall be installed, maintained
or operated in the Premises without the written consent of Lessor, which consent
shall not be unreasonably withheld, conditioned or delayed, but all such vending
machines shall be available for use only by Lessee's employees and shall not be
visible from the exterior of the Premises (both inside and outside the
Building). In addition, Lessee covenants and agrees that it will not install,
maintain or operate or cause to be installed, maintained or operated, any
vending machines outside of the Premises or in the Project without the prior
written consent of Lessor, which may be withheld in its sole and absolute
discretion.
18. Lessee agrees that it shall comply with all fire regulations that may
be issued from time to time by Lessor and/or fire authorities, and Lessee shall
also provide Lessor with the names of a designated responsible employee to
represent Lessee in all matters pertaining to fire regulations.
Exhibit B - Page 4
19. Lessor reserves the right to rescind, alter or waive any rule or
regulation at any time prescribed for the Building when, in Lessor's judgment,
it is necessary, desirable or proper for the best interest of the Building or
one or more of its lessees.
20. Lessee and its employees and contractors shall not disturb, solicit or
canvass any occupant of the Building and shall cooperate to prevent the same.
Lessee and its employees and contractors shall not exhibit, sell or offer to
sell, use, rent or exchange any item or service in or from the Premises unless
ordinarily embraced within Lessee's use of the Premises specified in the Lease.
21. Without the written consent of Lessor, in Lessor's sole discretion,
Lessee shall not use the name or logo of the Project in connection with or in
promoting or advertising the business of Lessee, except as Lessee's address.
22. All interior window coverings must be approved by Lessor, and Lessee
may not install any awnings or other exterior window shades or coverings. Lessor
has designed the Building's standard internal ceiling lighting system to provide
for uniform ceiling lighting throughout the Building, and accordingly, Lessor
shall have the right to control all internal lighting that may be visible from
the exterior of the Building. Lessor's control shall not extend to recessed down
lights, track lighting, torchiers, table or desk lights or task lights within
the Premises.
23. Lessee and its employees shall not park in driveways or loading areas
or in reserved parking spaces of other lessees. Lessor or its agents shall have
the right to immobilize or cause to be removed any car of Lessee, its.
employees, agents, contractors, customers and invitees, that is parked in
unauthorized areas, and Lessee hereby waives and releases Lessor and its agents
and contractors from all claims, losses, damages and demands arising or asserted
in connection with the removal of any such vehicle. Lessee will, from time to
time, upon request of Lessor, supply Lessor with a list of license plate numbers
or vehicles owned or operated by its employees and agents.
24. Lessee shall endeavor and use commercially reasonable efforts not to
waste electricity, water, heating or cooling and agrees to cooperate fully with
Lessor to assure the most effective operation of the Building's heating and air
conditioning equipment and shall refrain from adjusting or attempting to adjust
any controls.
25. Lessee assumes full responsibility for protecting, at all times, the
Premises and all personal effects of Lessee, its employees, agents and invitees,
from theft, robbery and pilferage, which includes keeping doors locked and other
means of entry to the Premises closed and secured, and Lessor shall have no
liability with respect thereto.
Exhibit B - Page 5
26. Lessee shall not install or operate machinery, equipment or any
mechanical or electrical device of a nature not directly related to Lessee's
ordinary use of the Premises, without the written permission of Lessor.
27. Lessee shall not be entitled, solely by virtue of this Lease, to use or
patronize any service, business or facility in the Building, but may become
entitled to use or patronize the same by satisfactory arrangements with the
operator of such business or facility.
28. Lessee shall place all refuse or trash in receptacles provided for the
Project by Lessor. If Lessee creates an unusual amount of trash in the
reasonable opinion of Lessor and Lessor so requests in writing, Lessee shall
provide, at its own cost, for its own trash disposal and pickup at such
intervals as Lessor may deem reasonably necessary so that no refuse or trash is
visible on the Premises.
29. Lessor shall have the right to designate and/or approve, prior to
installation on the Premises, all types of window shades, blinds, drapes,
awnings, window ventilators and other similar window coverings and equipment.
30. All installers, contractors and vendors accessing any facilities in the
Building shall be required to adhere to "sign-in" and access control procedures
adopted from time to time by Lessor.
31. Lessor may from time to time perform coring and other Building
infrastructure improvements associated with technology and voice and data
service upgrades, including the use of X-ray and other equipment, that may
require the temporary relocation of business sensitive equipment and files
within Lessee's Premises. Lessee shall be responsible for taking such
precautions with regard to its business operations, equipment, files and other
property as it deems appropriate following notice of such activity from Lessor.
Following such work, Lessor may require Lessee to relocate its technology and
voice and data equipment and systems to one or more central distribution
systems.
By executing a copy of these Project Rules and Regulations, Lessee agrees
that it has read and understands the same, and will comply with all of the
provisions contained herein, as may be amended by Lessor from time to time.
LESSEE:
MedAire Incorporated /Date 3/6/02
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ------------
Exhibit B - Page 6
EXHIBIT "C"
CONSTRUCTION OBLIGATIONS OF LESSOR AND LESSEE
This Exhibit "C" sets forth the respective obligations of and the procedures to
be followed by, Lessor and Lessee in the design and construction of the Premises
described in the Lease to which this Exhibit is attached, and the payment of
design and construction costs. Capitalized terms used herein which are not
otherwise defined shall have the meanings set forth in the Lease.
1. Lessor's Obligations. The only improvements to be constructed by Lessor
within the Premises shall be the building standard improvements set forth on
Schedule 1 attached hereto (referred to hereafter as "Lessor's Work"). Subject
to the performance by Lessee of all of its obligations set forth in Section 2
below of this Exhibit, Lessor will obtain a certificate of completion or
occupancy required by the local building department or governmental agency with
respect to the Premises. The foregoing notwithstanding, Lessor shall not be
obligated to incur any costs or expenses for Lessor's Work in excess of the
Tenant Improvement Allowance, and Lessee shall be responsible for paying all
costs and expenses of performing Lessor's Work in excess of the Tenant
Improvement Allowance set forth in the Basic Lease Information. The Tenant
Improvement Allowance will be applied to all hard and soft costs necessary or
appropriate to complete Lessor's Work, including without limitation, all costs
of labor and materials, fees for architectural, engineering design and
construction drawings, and other professional fees, and permitting fees. If the
actual cost of Lessor's Work exceeds the Tenant Improvement Allowance, Lessee
shall reimburse Lessor for such excess cost, as additional rent, by either:
1.1 paying to Lessor all of such excess cost within ten (10) days after
Lessor delivers its request for payment and evidence of payment by Lessor,
provided that if at the time Lessor submits its request for payment, all of the
final ▇▇▇▇▇▇▇▇ have not been received and the actual costs have not yet been
calculated, Lessor may request payment based on a reasonable estimate of the
excess cost and an adjustment will be made at the time the actual cost is
confirmed by Lessor, in which event any additional amounts due from Lessee as
estimated by Lessor shall be paid within ten (10) days after Lessor delivers its
request for payment and evidence of the amounts Lessor expects to pay, if the
actual excess costs are less than the estimated costs paid by Lessee, the
savings shall be credited to Lessee in the form of a credit against successive
installments of Base Rental, or
1.2 Lessee approving modifications to the plans and specifications for
Lessor's Work prior to or during construction of Lessor's Work to reduce the
cost thereof by an amount equal to all or a portion of such excess (and if any
excess remains, Section 1.1 will apply thereto).
Notwithstanding the foregoing, upon the request of Tenant, Lessor shall finance
such excess cost (but in no event exceeding an amount equal to $4.00 per usable
square foot of the Premises), with any amounts so financed bearing interest at a
rate of 12% per annum and payments of principal and interest being amortized and
paid over the Lease Term. --
--- ---
2. Lessee's Obligations.
2.1 Lessor's obligation to construct or improve the Premises shall be
strictly limited to Lessor's Work, subject to Lessee's obligation to pay for all
costs and expenses in excess of the Tenant Improvement Allowance as set forth in
Section 1 of this Exhibit "C". All other work and improvements required for the
operation of Lessee's business at the Premises, including without limitation
installation and delivery of Lessee's Telecommunications Equipment and other
property constituting Lessee's Property, and all damage to Lessor's Work arising
from the acts or omissions of Lessee, its employees, agents, contractors or
invitees ("Lessee's Work"), shall be performed, completed and installed by
Lessee at its expense (subject to Lessor's approval rights as provided in the
Lease and this Exhibit "C". Lessee shall be allowed to enter upon the Premises
to perform Lessee's Work ninety (90) days prior to the Commencement Date, as may
be delayed as provided in Sections 2.3, 2.6 and 26 of the Lease (in which event
Lessee will be allowed access to the Premises ninety (90) days prior to the date
Lessor reasonably estimates will be the date of substantial completion of
Lessor's Work); provided, however, that Lessee shall not unreasonably interfere
with the performance of Lessor's Work in the Premises. Lessor will substantially
complete Lessor's Work at least 60 days prior to the Commencement Date, subject
to Sections 2.3, 2.6 and 26 of the Lease and delays caused by Lessee. Upon
substantial completion of Lessor's Work, Lessee may occupy all or a portion of
the Premises and operate its business prior to the Commencement Date while
Lessee completes Lessee's Work. If Lessor tenders possession of the Premises to
Lessee for any reason other than delays caused by Lessee less than ninety (90)
calendar days before the Commencement Date, then the obligation to pay Base
Rental shall be advanced by the number of days necessary to provide ninety
calendar days between the tender of possession and the commencement of Base
Rental.
2.2 Upon receipt of written notice from Lessor that it has substantially
completed Lessor's Work, Lessee shall have 30 days thereafter within which to
give Lessor written notice of any alleged defects in Lessor's Work. Upon the
expiration of said 30-day period, the Premises and Lessor's Work shall be deemed
to be in satisfactory condition and in compliance with the terms of this Lease,
except as specifically set forth to the contrary in the written notice delivered
by Lessee to Lessor, if any, within said 30-day period, and except for latent
defects in Lessor's Work that cannot be reasonably detected by Lessee within
said 30-day period. If Lessee fails to give such notice within said 30-day
period or to specify in reasonable detail a defect or variance in a notice
(except for latent defects that cannot be reasonably detected by Lessee within
said 30 day period), Lessee shall be deemed to have irrevocably waived all
rights with respect to such defects or variances. Upon timely receipt of such
written notice, if any, from Lessee, Lessor shall repair any actual defects or
variances in the exercise of reasonable diligence to the extent such work is
required by Schedule "1 ". Notwithstanding the foregoing, Lessor shall remain
responsible for latent defects in Lessor's Work which Lessee cannot reasonably
detect within said 30-day period, but Lessor shall remain responsible only for
such latent defects which are detected within one (1) year after Lessor has
tendered possession of Premises to Lessee. The existence of any defects or
variances shall not affect Lessee's obligations set forth in this Section 2.
Exhibit C - Page 2
2.3 All of Lessee's Work shall be performed (i) through the services of a
licensed, bonded and insured contractor approved in writing by Lessor, (ii) in a
good and workmanlike manner, (iii) free and clear of any liens or encumbrances,
(iv) in strict accordance with plans and specifications approved by Lessor in
writing ("Plans and Specifications"), and (v) in compliance with the Lease and
all applicable statutes, ordinances, rules, regulations and building codes of
any governmental authority having jurisdiction over the Premises.
2.4 Lessee must provide proof of a performance and payment bond in an
amount and in a form acceptable to Lessor, and insurance (including builder's
risk, worker's compensation and liability insurance) in amounts and with
coverages required by Lessor, with each policy naming Lessor as an additional
insured. All subcontractors shall also be duly licensed, bonded and insured in a
commercially reasonable manner.
2.5 Lessee shall cause its contractor to provide a complete list of all
subcontractors entering the Building and all contractors and subcontractors
shall abide by the rules and hours established by Lessor from time to time.
2.6 To ensure that the Building and tenant operations continue smoothly,
Lessee shall cause its contractor to coordinate with Lessor to ensure all of the
plumbing, mechanical, HVAC, energy management systems, fire sprinkler and fire
alarm systems and other equipment are properly connected to the Building shell,
and Lessee will be solely responsible for the costs of such connections. Lessee
also acknowledges that Lessor's approved HVAC contractor must be used to
maintain warranties. Lessor shall provide reasonable access to the Premises and
provide information necessary to Lessee's contractor to complete such
connections. Lessee agrees the proper connection of these items is essential to
maintaining Lessor's warranty on the Building, and such connections must be
properly and completely made.
2.7 Lessee and its contractor shall be required to hire a roofing company
approved by Lessor, in its sole discretion, to complete all repairs and other
work on the roof, if and to the extent approved by Lessor as part of Lessee's
Work, so that Lessor's roof warranties are properly maintained. Lessee shall
also cause its contractor to coordinate all roofing work with Lessor and
Lessor's selected roof contractor.
2.8 During the course of Lessee's Work, Lessor may enter upon the Premises
at all reasonable times for the purpose of inspecting Lessee's Work. If Lessor
finds any workmanship inferior, defective or not in accordance with the Plans
and Specifications, the Lease or this Exhibit "C", Lessee shall promptly correct
the same. Lessor's authority to act under this subsection shall not give rise to
a duty of Lessor to make inspections or otherwise enforce Lessee's compliance
with the terms of the Lease, this Exhibit "C" or the Plans and Specifications.
-Lessee's failure to comply with the terms of this Exhibit "C" or the Lease
shall constitute a default under the Lease.
Exhibit C - Page 3
2.9 All work performed by Lessee, or any fixtures or personal property
moved onto and/or installed in the Premises during the completion of Lessor's
Work, shall be at Lessee's own risk. Neither Lessor nor its agents or
contractors shall be responsible to Lessee for damage or destruction of Lessee's
Work or property, and any damage, cost or expense incurred by Lessor or its
other tenants as a result of Lessee's construction shall be the sole
responsibility of Lessee, and Lessee shall indemnify, defend and hold harmless
Lessor with respect to any such damages, costs or expenses, and any attorneys'
fees incurred with respect thereto.
3. Definition of "Substantial completion". The term "substantial completion" as
used in this Exhibit "C" or in the Lease means that state of completion of the
Premises which will allow Lessee to commence its obligations hereunder without
material interference from Lessor's contractor.
4. Definition of "Delays Caused by Lessee". As used in the Lease and this
Exhibit "C", the term "delays caused by Lessee" shall mean and refer to any
delays caused by Lessee or its agents, employees, contractors, architects or
engineers, including without limitation as a result of the following:
4.1 Lessee's failure to furnish, approve, or authorize, or provide
information for, any portion of any plans and specifications for Lessor's Work
within five (5) business days after receipt of a written request by Lessor.
4.2 Changes in or additions to Lessor's plans and specifications as may be
requested by Lessee (notwithstanding Lessor's approval of such changes);
4.3 The performance or completion of any work in the Premises by Lessee or
any agent, contractor, employee, architect or engineer of Lessee;
4.4 Lessee's request for materials, components, finishes, or improvements
other than Lessor's building standard or which are not available in a
commercially reasonable time given the anticipated date of substantial
completion of Lessor's Work, as set forth in Schedule 1 attached hereto;
4.5 Lessee's failure to pay, when due, any amounts required to be paid by
Lessee pursuant hereto;
4.6 Lessee's failure to comply with all federal, state, or local laws,
regulations, codes and ordinances;
4.7 Lessee's request for additional bidding or rebidding of the cost of all
or a portion of Lessor's Work;
Exhibit C - Page 4
4.8 Changes or postponements requested by Lessee to Lessor's Work;
4.9 Any error in Lessor's plans and specifications or other documents
caused by Lessee, or its employees, contractors, architects, design engineers,
or agents; and
4.10 Any other act or omission of Lessee, its agents, contractors or
employees.
The determination by Lessor's architect responsible for Lessor's Work as to the
existence and duration of a delay caused by Lessee shall be conclusive and
binding absent bad faith on the part of such architect. Lessee shall pay all
costs and expenses incurred by Lessor that result from any delay caused by
Lessee, including, without limitation, additional architectural and other
professional fees and any costs and expenses attributable to increases in the
cost of labor or materials.
Exhibit C - Page 5
SCHEDULE "1"
[to Exhibit "C"]
BUILDING STANDARDS
1. Lessor will provide the following as part of the Tenant Improvement
Allowance if sufficient to cover the cost of Lessor's Work, provided that
fifty percent (50%) of the cost of item 1 and all of items 2, 7, 11, and 16
shall be provided by Lessor in addition to the Tenant Improvement
Allowance, and provided further that with respect to items 14 and 15, the
primary distribution of the fire protection system and the primary
distribution of the HVAC system shall be provided by Lessor in addition to
the Tenant Improvement Allowance:
1. Demising and Corridor Partitioning
Full-height demising partition with 5 " type gypsum wallboard attached to
both sides of 35/$", 20-gauge metal studs at 24" on center. Demising partition
to extend to underside of floor deck with smooth finish and eggshell paint on
the Lessee side. Corridor partition to have same construction as demising
partition, and to include as a part of tenant improvement R-11 insulation,
gypsum board, and sound caulking at floor. Corridor side of the partition wall
to be finished with wall covering and 6'/"-high hardwood base with finish to
match the entry doors; Lessee side of the partition to be completed with smooth
finish and eggshell paint.
2. Lessee's Partitioning
2%/", 25-gauge metal studs at 24" on center with one layer %" gypsum
wallboard on both sides. Partitions to extend from floor to underside of ceiling
grid with smooth finish and eggshell paint and base both sides.
3. Lessee's Entry Doors/Frames
Recessed 3-0" x 7-10" x 1%" solid core, plain sliced, hardwood door (type
of stain to be selected by Lessor) with mortised lever lockset and clear
anodized aluminum Western Integrated frame. Entry doors to have 2-0" x 4-10"
sidelight at 36" A.F.F., aligning with top of doorframe. A secondary entry/exit
door (without sidelight) shall be provided if required by code.
4. Lessee's Interior Doors/Frames
3-0" x +/-7-10" x 13/" solid-core, plain-sliced, hardwood door (type of
stain to be selected by Lessor). Clear anodized aluminum doorframe by Timely.
Schedule 1 - Page 1
5. Lessee's Entry Hardware
Schlage mortise lever lockset with 07 lever; finish to be "US26D" stainless
steel. LCN closer #4040 series. 2 pair ▇▇▇▇▇ butt hinges, 4'/" x 4'/"; finish to
be US26D. Pemko smoke and fire gasket. Trimco wall stop; finish to be #US26D.
6. Lessee's Interior Hardware
Schlage mortise lever latch set with 07 lever, finish to be "US26D"
stainless steel. 2 pair ▇▇▇▇▇ butt hinges, 4'/" x 4'/"; finish to be US26D.
Pemko smoke and fire gasket. Trimco wall stop; finish to be #US26D. If required,
LCN closer #4040 series.
7. Acoustical Ceiling
Suspended white 2 x 2 ▇▇▇▇▇▇▇▇▇ Optima Open Plan Ceilings with DuraBrite
acoustically transparent membrane; NRC 0.95; LRV 0.89; square tegular in 9/16"
grid.
8. Floor Coverings
Carpet: Bentley 36 ounce (or equal). VCT: ▇▇▇▇▇▇▇▇▇ "Imperial Texture,
Standard Excelon" (or equal), 12" x 12",1/8" gauge.
9. Base
▇▇▇▇▇ (or equal) 2'/"-high coved rubber base. Base to be 2'/"-high coved
rubber base at vinyl composition tile and straight at carpet or 4" carpet base.
10. Paint
▇▇▇▇ ▇▇▇▇▇▇▇ "Suprema", ▇▇▇▇▇▇ "Lo Glo", or equal; eggshell paint on smooth
finish.
11. Window Coverings
1" mini-blinds with dust guard provided at all exterior windows, Levelor
(or equal), color to be determined by Lessor. Lock up position for cleaning
only; otherwise, blinds are in full down position.
12. Signage
One standard tenant identification in each building, suite number sign and
directory strip to be provided as approved by Lessor.
Schedule 1 - Page 2
13. Fire Extinguisher Cabinet
▇▇▇▇▇▇-▇▇▇▇▇▇ semi-recessed cabinet #9731-C, (or equal).
14. Fire Protection Sprinkler System
Semi-recessed sprinkler head with white escutcheon, centered in ceiling
tile. Necessary sprinkler drops to meet City of Tempe codes.
15. Heating, Ventilating, and Air Conditioning
2 x 2, white diffuser and return air grille, thermostat installation,
flexible duct and air devices. All thermostats to be located above light
switches.
16. Lessee's Light Fixtures
Suspended linear ambient uplight. Peerlite, Prima, or equal with single T5
lamp, minimum 54 ▇▇▇▇▇, available in lengths of 4, 8, 12, and 16. Bottom of
fixture mounted at 8-0"' above finished floor. Coordinate with Lessor for
orientation of fixtures.
17. Light Switches
Single-pole rocker switch and coverplate in white.
18. Exit Lights
Provided as required by code. Lithonia "Precise Collection" "LRP" exit
lights. LED lamps red letters on clear mirrored background.
19. Electrical Convenience Outlet
_______________Duplex wall outlet and coverplate in white.
20. Telephone Outlet
Building standard rough-in box with mudring and pull string. Lessee will
coordinate with its communications equipment company to obtain detailed
requirements for inclusion in construction plans and schedule.
Schedule 1 - Page 3
21. Telephone Mounting Board
One 4 x 8x1/0 ACX plywood mounting board with dedicated duplex outlet per
Lessee suite. Plywood painted to match adjacent walls. (Smaller tenants may only
require a 4 x 4 mounting board).
II. Upgrades
Some common upgrades Lessee may request, at its expense if the cost of
Lessor's Work exceeds the Tenant Improvement Allowance, are as follows:
Small appliances, such as refrigerator, microwave, dishwasher, garbage
disposal, reverse osmosis system, etc.
- Receptionist desk and other millwork w Plumbing work.
- All furniture systems or office furniture; e.g., credenzas, file
cabinets, and counters not noted in millwork.
- Overtime construction costs for an accelerated construction schedule
or phased move in.
- Hook-up, power wiring, handling, or installation of Lessee's furniture
or office equipment.
- Special electrical systems, such as Muzak, paging, clocks, security
systems, card readers, etc.
- Telephone communication system.
- Supply and installation of data cabling.
- Computer room requirements; e.g., special fire-suppression systems,
raised flooring, special HVAC requirements, 24-hour cooling, etc.
- Dedicated electrical and/or isolated grounding requirement.
- Wood base.
Schedule 1 - Page 4
EXHIBIT "D"
DESCRIPTION OF LESSEE'S PROPERTY
(graphic)
EXHIBIT "E"
RIGHTS RESERVED BY LESSOR
Notwithstanding any other provisions in the Office Lease, Lessor reserves
the following rights:
1. Lessor shall have the right to use the parking areas and other areas outside
of the buildings within the Project for the promotion and marketing of space
within the Project, or within property adjacent to the Project which may be
developed by Lessor or a member, affiliate or subsidiary of Lessor, including
without limitation, the right to maintain signs and other promotional devices on
the Project.
2. Lessor shall have the right to construct additional improvements within the
Project to improve and enhance the same, including without limitation,
additional landscaping and other common facilities.
3. Lessor, or any member, affiliate or subsidiary of Lessor, may construct
additional phases similar to or compatible with the Project, including office,
retail, restaurant, hotel and residential uses, and may connect the same to the
parking facilities and other common areas of the Project to provide access upon
and across the parking areas, driveways, and other paved surfaces of the Project
for vehicular and pedestrian ingress and egress to and from such additional
phases, provided such additional phases shall not be considered part of the
Project for purposes of Operating Costs under this Lease.
4. Lessor further reserves the right to grant temporary or permanent easements
from time to time for construction, access, utilities, drainage and/or other
purposes for the development of property within or adjacent to the Project,
provided that such easements shall not materially and adversely impair the use
of the parking areas, driveways, and other paved surfaces within the Project.
5. Lessor reserves the right to name the Project or the Building or to change
the name and/or street address of the Project or Building, which may constitute
the name of another tenant in the Building or the Project.
6. The right to grant to anyone the exclusive right to conduct any business upon
and/or render any service to the Project, provided such exclusive right shall
not operate to exclude Lessee from using the Premises for the purposes
specifically set forth in the Basic Lease Information.
7. The right to designate and/or control any service in or to the Building and
its tenants.
Exhibit E - Page 1
8. The right not to enforce a particular rule or regulation against a particular
tenant in Lessor's sole discretion; provided, however, that Lessor agrees the
rules and regulations will, to the extent reasonably practicable, be enforced in
a non-discriminatory manner against all similarly situated lessees or tenants of
the Project.
9. The right to allow portions of the common areas within or outside the
Building to be used (i) exclusively by certain tenants of the Project (including
without limitation for outdoor seating for restaurants and bars), and/or (ii)
kiosks, displays, carts or stands, and/or (iii) ATM machines, mailboxes,
overnight courier dropboxes, or other equipment.
The foregoing rights in favor of Lessor shall not in any way be construed as
creating any obligation on the part of Lessor to exercise any such rights or to
perform any of the activities, construct any improvements, develop any property,
or grant any easements referred to in this Exhibit "E". The foregoing rights are
exercisable without notice to Lessee or liability for any inconvenience suffered
by Lessee as a result thereof (including without limitation any diminution of
light, air or view), and Lessee shall not be entitled by reason thereof to
terminate this Lease or to receive an abatement or reduction of any rental
provided for under this Lease.
Exhibit E - Page 2