EXHIBIT 10.36
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LEASE
DATE APRIL 23, 2003
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LANDLORD ▇▇▇▇ ▇. & ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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TENANT IMPROVENET, INC., A DELAWARE CORPORATION
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I. LEASED Premises
The leased premises (the "Leased Premises") are as shown on Exhibit "B"
attached hereto and are further defined as: The SECOND FLOOR OF 10799 N. 90TH
STREET, SCOTTSDALE, ARIZONA. In total, the two story office building consists of
approximately 10,000 Rentable Square Feet, with the Second Floor consisting of
APPROXIMATELY 5,000 RENTABLE SQUARE FEET.
II. LEASE
The Landlord hereby leases to the Tenant, and the Tenant hereby leases from
the Landlord, the Leased Premises, upon the terms and conditions set forth in
this Lease (the " Lease").
III. TERM
This Lease is for a term of 2 YEARS AND 2 MONTHS commencing JUNE 1, 2003
(the "Commencement Date") and terminating JULY 31, 2005 (the " Termination
Date'').
If the Leased Premises or the building in which the Leased Premises are
located are not completed at the Commencement Date and possession of the Leased
Premises is not delivered to Tenant by the Commencement Date, the Commencement
Date shall be the first day of the calendar month following the delivery of the
Leased Premises to Tenant. If the Leased Premises are delivered to Tenant and
Tenant accepts possession on any day earlier than the Commencement Date, the
rental for the interim shall be paid by Tenant on a prorata basis, but such
earlier taking of possession shall not change the Termination Date of this
Lease.
IV. SECURITY DEPOSIT
Tenant has paid Landlord at the execution hereof, the amount of FIVE
THOUSAND DOLLARS ($5,000.00) as security for the performance by Tenant of the
terms hereof, which amount shall be returned to Tenant at the Termination Date
if Tenant has discharged its obligations to Landlord in full pursuant to this
Lease and all amendments thereto.
The foregoing security deposit, at the election of the Landlord, may be
forfeited to and retained by Landlord as and for its full damages, or at the
election of the Landlord, may be applied and credited in reduction of any loss
and/or damages sustained by Landlord at any time by reason of the occurrence of
any breach, nonperformance of, or default of, Tenant, under this Lease without
loss, waiver or exclusion of any other or additional rights, recourse or
remedies Landlord may have for such occurrence, whether at law, in equity or
under the terms of the Lease. In the event Landlord applies any or all of the
foregoing security deposit to the correction of any breach or default of this
Lease by Tenant, then Tenant agrees to, within five (5) days notice by Landlord
of Landlord's so doing, replenish said security deposit to its full amount for
the purposes hereinabove specified. Tenant hereby acknowledges that the
foregoing security deposit need not be held in any trust account.
V. RENTAL & OPERATING EXPENSES
Tenant agrees to pay as base rental NO CHARGE ($0.00) FOR MONTHS ONE (1)
AND TWO (2), THEREAFTER FIVE THOUSAND DOLLARS ($5,000.00) PER MONTH PLUS SALES
TAX FOR MONTHS' THREE (3) THROUGH TWENTY SIX (26) (the "Base Rent") for each and
every month of the Lease (plus any excise, privilege or sales taxes levied on
the rentals or the receipt thereof, except Landlord's income tax), payable in
advance, without offset or deduction, on the first day of each month commencing
with the Commencement Date of the Lease.
THIS LEASE IS NET "JANITORIAL" SERVICE IN THAT THE TENANT IS RESPONSIBLE
FOR CONTRACTING AND PAYING FOR THEIR OWN INTERIOR JANITORIAL SERVICE AND
JANITORIAL SUPPLIES.
The Base Rent shall be subject to adjustment each calendar year to
compensate for increases in Landlord's "Operating Costs" (as hereinafter
defined). However, in no event, shall Tenant's Base Rent be less than the Base
Rent specified herein.
Landlord's "Base Operating Cost" is $(2004 BASE YEAR) per square foot of
rentable area in the Building, which represents that portion of the annual rent
per square foot which Landlord has allocated to the Operating Costs on an annual
basis.
"Operating Costs" shall be determined on an accrual basis for each calendar
year by taking into account, on a consistent basis, all costs of management,
maintenance, and operation of the Building, including but not limited to the
costs of cleaning, utilities, air conditioning and heating, plumbing, elevator,
insurance, landscaping costs and the cost of improvements installed to reduce
the above-listed operating costs and all other costs which can properly be
considered operating expenses incurred in the management, maintenance and
operation of the Building.
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The Operating Costs shall be determined for each calendar year. If the
Operating Costs for any calendar year exceed the Base Operating Cost, Tenant's
rent for said calendar year shall be increased by an amount equal to Tenant's
"Proportionate Share" (as hereinafter defined) of such excess which increased
rental for such calendar year Tenant agrees to pay to Landlord in accordance
with the statements rendered.
Each calendar year Landlord may elect to require that the rental be
adjusted for that year effective January 1 on the basis of Landlord's estimates
of increases or decreases in Operating Costs, which adjusted rental Tenant
agrees to pay in accordance with the statements rendered. A final adjustment of
the rental for each calendar year shall be made the following year based upon
the final Operating Costs, determined as herein provided and examined by
Landlord's accountants. Appropriate fair adjustments shall be made for costs
which vary with occupancy and where tenants pay costs that in other leases are
paid by Landlord. In no event, however, shall Tenant's rent be less than the
Base Rent specified above.
Tenant hereby agrees to pay, as additional rent, Tenant's Proportionate
Share of any Real and Personal Property taxes (as hereinafter defined) assessed
or levied for any tax year (the "Tax Year") or portion thereof occurring during
the term of this Lease in excess of $(2004 BASE YEAR) per square foot per annum
of rentable area in the Building, which Landlord hereby agrees to contribute
toward Real and Personal Property taxes for each Tax Year during the Lease Term
("Landlord's Contribution"). If the Real and Personal Property taxes for any Tax
Year are lower than Landlord's Contribution, Tenant shall not be entitled to any
refund whatsoever.
After Landlord has received the tax ▇▇▇▇(s) for each Tax Year, Landlord
shall furnish Tenant with a written statement of the amount due as Tenant's
Proportionate Share of Real and Personal Property taxes in excess of Landlord's
Contribution, and within thirty (30) days of the date of such statement, Tenant
shall pay the amount due in one lump sum. Alternatively, Landlord shall have the
right to estimate Tenant's Proportionate Share of Real and Personal Property
taxes in excess of Landlord's Contribution, which sums Tenant agrees to pay in
accordance with the statements rendered, in which event a final annual
adjustment shall be made based upon the Real and Personal Property taxes
actually assessed or levied. The failure of Landlord to send Tenant any such
statement shall not constitute a waiver by Landlord of its right to require
Tenant to pay its Proportionate Share of such excess. Any fractional Tax Year in
the first or final year of the Lease term shall be treated proportionately on a
360-day year basis.
For the purposes of this Paragraph V. Rental, Definitions, the following
terms shall have the following meanings:
1. "Tax Year" shall mean the 12 month period employed for real and
personal property taxation purposes by each of the taxing authorities in the
State of Arizona.
2. "Real and Personal Property taxes" shall mean and include a) all
real property taxes and personal property taxes, charges and general and special
assessments which are levied or assessed upon or with respect to the Building
and any improvements, fixtures and equipment and all other personal property of
Landlord located on, in or about the Building and/or used in connection with the
operation thereof and b) all taxes which shall be levied or assessed in addition
to or in lieu of such real or personal property taxes, but shall not include any
net income, franchise, capital stock, estate or inheritance taxes.
3. Tenant's "Proportionate Share" shall mean the ratio, expressed as a
percentage, of the rentable area of the Leased Premises to the rentable area of
the Building, which the parties hereby stipulate to be 50% percent.
4. As used in this Lease, the term "Building" includes the and
adjoining parking areas, if any, and the land and/or air space which is the site
and grounds for such buildings and parking areas, regardless of the name under
which such buildings may be known.
5. As used in this Lease, the term "Prime Rate" shall mean the sum of
(a) that rate of interest, charged by Bank One - Arizona, a national banking
association (or any successor to the business of such bank), and announced by
such bank, from time to time, as its "prime rate,'' and (b) two (2) percentage
points above the annual rate of interest specified in clause "(a)" immediately
hereinabove.
VI. COST OF LIVING ADJUSTMENT TO RENTAL - NOT APPLICABLE
VII. INITIAL CONSTRUCTION
Construction, if any, to be completed by Landlord will be in accordance
with the plans, specifications and agreements approved by both parties in the
Tenant Build-Out Agreement. Landlord will not be obligated to construct or
install any improvements or facilities of any kind other than those called for
in the Tenant Build-Out Agreement. Landlord agrees to commence and complete such
construction with reasonable diligence. All such improvements are to be the
property of Landlord and upon termination of this Lease, Tenant shall deliver
the Leased premises to Landlord in good condition and repair, broom clean,
normal wear and tear excepted.
VIII. REPAIRS AND ALTERATIONS
Tenant agrees that it will pay for the cost of all repairs to the Leased
Premises not required to be made by Landlord and be responsible for all
redecorating, remodeling, alteration and painting required by it during the term
of this Lease. Tenant shall pay for any repairs to the Leased Premises or the
Building made necessary by any negligence or carelessness of Tenant, it's
employees or invitees. Tenant agrees to maintain the Leased Premises in a clean,
neat and sanitary condition.
Tenant may place partitions and fixtures and make improvements and other
alterations to the interior of the
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Leased Premises at Tenant's expense, provided, however, that prior to commencing
any such work Tenant shall first obtain the written consent of Landlord to do
the proposed work. Landlord may require that said work be done by Landlord's own
employees or under Landlord's direction but at the expense of Tenant, and
Landlord may, as a condition to consenting to such work, require that Tenant
give security that the Leased Premises will be completed free and clear of liens
and in a manner satisfactory to Landlord. Notwithstanding the foregoing, any
such improvements or alterations by Tenant shall conform to and be in
substantial accordance in quality and appearance with the quality and appearance
of the improvements in the remainder of the Building. Any such improvements
shall become the property of Landlord upon expiration of this Lease. Tenant
shall remove any movable furniture and equipment upon termination of this Lease
and shall deliver the Leased Premises to Landlord in as good condition as
received, broom clean, normal wear and tear excepted. In the event Tenant
receives consent of the Landlord and uses Tenant's own contractor for any such
improvements then Tenant must provide Landlord with contractor's evidence of
workmen's compensation and liability insurance in amounts sufficient to Landlord
and have acquired the necessary building permits prior to commencing any such
construction.
All such improvements are to be the property of Landlord and upon
termination of this Lease, Tenant shall remove their exterior signs and restore
the areas of the building affected by the exterior signs, and deliver the Leased
Premises to Landlord in good condition and repair, broom clean, normal wear and
tear excepted.
IX. FIRE OR CASUALTY INSURANCE
In the event that the Leased Premises are wholly or partially destroyed by
fire or other casualty covered by the usual form of tire and extended coverage
insurance rendering them untenantable, Landlord shall, to the extent of
insurance proceeds actually received by Landlord, rebuild, repair or restore the
Leased Premises to substantially the same condition as when the same were
furnished to Tenant and this Lease shall remain in effect during such period. In
the event of total destruction, rent shall ▇▇▇▇▇ during the period of
reconstruction, and in the event of partial destruction, rent shall ▇▇▇▇▇
prorata during the period of reconstruction. In the event, however, that the
building containing the Leased Premises is damaged or destroyed to the extent of
more than one-third (1/3) of its replacement cost, Landlord or Tenant may elect
to terminate this Lease.
Tenant shall be responsible for and shall provide Tenant's own insurance
coverage, and supply Landlord with evidence of such coverage with respect to any
furniture, fixtures, improvements, betterments, equipment and personal property
belonging to Tenant and placed by Tenant in or upon the Leased Premises. Tenant
agrees and warrants to Landlord that any fire insurance policy, extended
coverage policy, casualty and loss policy, or other policy or policies carried
by Tenant in connection with this Lease or the Leased Premises and/or insuring
Tenant's property or effects located in or upon the Leased Premises shall each
contain a provision whereby the insurance carrier waives any right of
subrogation against the Landlord.
Provided Landlord can obtain such waiver of subrogation rights with regard
to policies of fire or casualty insurance obtained by Landlord with regard to
the Building, Landlord hereby releases and waives any and all rights of
subrogation against Tenant which, in the absence of this release and waiver,
would arise in favor of any insurance company insuring Landlord against loss of
fire, extended coverage casualty and loss of any other type, resulting from
damage to or destruction of the building of which the Leased Premises form a
part or any portion thereof or in damage to or destruction of the property of
Landlord in the Building. Landlord shall not be required to obtain such
insurance policies except through insurance companies satisfactory to the
Landlord and the holder of any mortgage covering the Leased Premises.
X. USE OF LEASED Premises
The Leased Premises are leased to Tenant for the sole purpose of GENERAL
OFFICE and for no other purpose whatsoever. Tenant agrees that it will use the
Leased Premises in such manner as to not interfere with or infringe upon the
rights of other tenants in the area of the Building. Tenant agrees to comply
with all applicable laws, ordinances and regulations in connection with its use
of the Leased Premises.
XI. SIGNS
Landlord shall retain control over the exterior appearance of the building
and the exterior appearance of the Leased Premises as viewed from the public
halls. Tenant will not install, or permit to be installed, any drapes, shutters,
signs, lettering, advertising, or any items that will in any way alter the
exterior appearance of the Building or the exterior appearance of the Leased
Premises as viewed from the public halls or exterior without prior written
approval of Landlord.
XII. CONFIDENCE REPOSED IN TENANT
It is agreed that one of the conditions moving Landlord to make this Lease
is the personal confidence reposed by it the Tenant, combined with the belief
that Tenant will be a tenant and occupant satisfactory to Landlord and the other
occupants of the Building. Should Tenant vacate or abandon the Leased Premises
during the term hereof, Landlord, at Landlord's discretion, shall have the right
to cancel this Lease without obligation to Tenant.
XIII. ASSIGNMENT AND SUBLETTING
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(a) Tenant for itself, its heirs, distributees, successors and
assigns, expressly covenants that it shall not, by operation of law or
otherwise, assign, sublet, mortgage or encumber all or any part of this Lease or
the Leased Premises or permit the Leased Premises to be used by others without
the prior written consent of Landlord in each instance. Any attempt to do so by
the Tenant shall be void. The consent by Landlord to any assignment, sublet,
mortgage or encumbrance or use of all or any part of the Leased Premises by
others, shall not constitute a waiver of Landlord's right to withhold its
consent to any other assignment, sublet, mortgage, or encumbrance or use of all
or any part of the Leased Premises by others. Without the prior written consent
of Landlord, this Lease and the interest of Tenant therein or any assignee of
Tenant therein, shall not pass by operation of law, and shall not be subject to
garnishment or sale under execution in any lawsuit or proceeding which may be
brought against or by Tenant or any sublessee or assignee of Tenant.
(b) If Tenant requests Landlord's consent to an assignment of this
Lease or subletting of all or any part of the Leased Premises, Tenant shall
submit to Landlord: (l) the name of the proposed assignee or subtenant, (2) the
terms of the proposed assignment or subletting, (3) the nature of the proposed
subtenant's or assignee's business; and (4) such information as to such
subtenant's or assignee's financial responsibility and general reputation as
Landlord may require.
(c) Upon the receipt of the request pursuant to Paragraph XIII(b)
hereinabove and information from Tenant, Landlord shall have the option, at
Landlord's discretion, to be exercised in writing within thirty (30) days after
such receipt, to either (1) cancel or terminate this Lease, if the request is to
assign or sublet all of the Lease and/or the Leased Premises or, if the request
is to sublet or assign a portion of the Lease and/or the Leased Premises, to
cancel and terminate this Lease with respect to such portion, in each case as of
the date set forth in Landlord's notice of exercise of such option, or (2) grant
said request, or (3) deny said request if Landlord finds such subtenant or
assignee unacceptable. Excluding Landlord's right to exercise option #1 in this
paragraph; Landlord shall not unreasonably withhold consent to assign or sublet
the Leased Premises.
(d) In the event Landlord shall cancel this Lease, Tenant shall
surrender possession of the Leased Premises, or the portion of the Leased
Premises which is the subject of the request, as the case may be, on the date
set fourth in such notice in accordance with the provisions of this Lease
relating to surrender of the Leased Premises. If the lease shall be canceled as
to a portion of the Leased Premises only, the rent and other charges payable by
Tenant hereunder shall be reduced proportionately according to the ratio that
the number of square feet in the portion of space surrendered bears to the
square feet of space at the initial Leased Premises.
(e) In the event that Landlord shall consent to a sublease or
assignment pursuant to the request from Tenant, Tenant shall cause to be
executed by its assignee or subtenant an agreement satisfactory to Landlord,
whereby such assignee or subtenant agrees to perform faithfully and to assume
and be bound by all of the terms, covenants, conditions, provisions and
agreements of this Lease for the period covered by the assignment or sublease
and to the extent of the space sublet or assigned. In addition, Tenant agrees
that with regard to each such sublease or assignment so consented to by
Landlord, Tenant: (l) will not collect more than one month's rent in advance,
(2) will not terminate or cancel such sublease or assignment without Landlord's
prior written consent, (3) will be responsible for all the acts and omissions of
said sublessees or assignees, (4) will only sublease at the rental which Tenant
is then paying to Landlord, (5) shall pay to Landlord promptly, following
receipt of the amount of the value of any consideration received by Tenant from
any assignment of this Lease, (6) Tenant shall not assign or sublet the Premises
to another existing tenant in the building housing the Leased Premises, and (7)
An executed copy of each sublease or assignment and assumption of performance by
the sublessee or assignee, on Landlord's standard form, shall be delivered to
Landlord within five (5) days prior to the commencement of occupancy set forth
in such assignment or sublease. No such assignment or sublease shall be binding
on Landlord until Landlord shall have actually received such copies as required
herein.
(f) in no event shall any assignment of subletting to which landlord
may consent, release or relieve Tenant from its obligations to fully perform all
of the terms, covenants and conditions of this Lease on its part to be
performed.
(g) In the event this Lease is canceled at Landlord's option as
provided hereinabove, neither of the parties shall have any further obligations
hereunder, except as may be expressly provided herein and except Tenant shall
pay all rents, charges and all other amounts due as set out in the Lease, to the
date Tenant is notified of such cancellation.
XIV. EMINENT DOMAIN
In the event any portion of the Leased Premises is taken from Tenant under
eminent domain proceedings, Tenant shall have no right, title or interest in any
award made for such taking.
XV. WAIVER AND SEVERABILITY
The consent of the Landlord in any instance to any variation of the terms
of the Lease or the receipt of rent with knowledge of any breach, shall not be
deemed to be a waiver as to any breach of any covenant or condition herein
contained, nor shall any waiver be claimed as to any provisions of this Lease
unless the same be in writing, signed by Landlord. This Lease and any written
amendment, exhibits or addenda hereto contain the entire agreement between the
parties. If any term or provision of this Lease or any application thereof shall
be invalid or unenforceable, then the remaining items and provisions of this
Lease and any other application of such term or provision shall not be affected
thereby.
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XVI. USE OF COMMON FACILITIES
All elevators, stairways, halls and areas for the common use of all tenants
at the Building shall be open to reasonable use by Tenant, its customers,
clients and employees. Tenant and its officers, agents and employees agree to
park their motor vehicles only in areas designated from time to time for that
purpose or otherwise as permitted in writing by Landlord.
XVII. SERVICES
(a) Landlord agrees to provide air conditioning, heat, water and
electricity for lighting and normal office usage during the customary business
hours of the Building as established by Landlord the costs of which shall be
includable in Operating Costs hereunder.
(b) TENANT IS RESPONSIBLE FOR CONTRACTING AND PAYING FOR THEIR OWN
INTERIOR JANITORIAL SERVICE AND JANITORIAL SUPPLIES.
XVIII. ENTRY OF LANDLORD
Landlord reserves the right, without abatement of rent and other charges
due hereunder from Tenant to enter upon the Leased Premises at reasonable times
for the inspection of the same, to make necessary repairs, to post notices of
non-responsibility and Landlord reserves the right, during the last six (6)
months of the term of this Lease to show the Leased Premises, at reasonable
times, to prospective purchasers or tenants.
Tenant hereby waives any claim for damages for any injury or inconvenience
to or interference with Tenant's business, any loss of occupancy or quiet
enjoyment of the Leased Premises, and any other loss occasioned by Landlord's
entry, except for damage to property or injury to persons caused by the willful
or negligent actions of Landlord or its Agents. Landlord shall at all times have
and retain a key with which to unlock all of the doors in, upon and about the
Leased Premises, excluding Tenant's vaults and safes (as the same are permitted
by Landlord to be upon the Leased Premises), and Landlord shall have the right
to use any and all means which Landlord may deem proper to open said doors in an
emergency in order to obtain entry to the Leased Premises and any entry into the
Leased Premises obtained by Landlord by any of said means, or otherwise, shall
not under any circumstances be construed or deemed to be a forcible or unlawful
entry into, or a detainer of, the Leased Premises, or an eviction of Tenant from
the Leased Premises or any portion thereof.
XIX. SUBSTITUTED Premises - NOT APPLICABLE
XX. SUBORDINATION AND ATTORNMENT
Landlord reserves the right to place liens and encumbrances on the Leased
Premises superior in lien and effect to this Lease. This Lease, and any and all
renewals, modifications, replacements or extensions thereof, at the option of
the Landlord, shall be subject and subordinate to any liens and encumbrances now
or hereinafter imposed by Landlord upon the Leased Premises or the Building and
Tenant agrees to execute and deliver upon demand (and to cause all sublessees
and assignees under Tenant to execute and deliver upon demand) such instruments
subordinating this Lease (and all subleases and assignments pursuant to this
Lease) to any such lien or encumbrance as shall be required by Landlord.
In the event Landlord' s interest in the Leased Premises is derived from a
lease from another party and said Lease should be terminated by the other party,
Tenant agrees to attorn (and to cause all sublessees and assignees under Tenant
to so attorn) to the other party, its successors and assigns as Landlord on this
Lease.
In the event any proceedings are brought for the foreclosure of any
mortgage on the Leased Premises, Tenant will attorn (and Tenant will cause all
sublessees and assignees under Tenant to so attorn) to the purchaser at
foreclosure sale and recognize the purchaser as the Landlord under this Lease.
The purchaser by virtue of such foreclosure shall be deemed to have assumed, as
substitute Landlord, the terms and conditions of this Lease until the resale or
other disposition of its interest by such purchaser. Such assumption, however
shall not be deemed of itself an acknowledgment by the purchaser of the validity
of any then existing claims of Tenant (or the claims of any sublessees or
assignees under Tenant) against the prior Landlord.
Tenant agrees to execute and deliver (and to cause all sublessees and
assignees under Tenant to execute and deliver) such further assurance and other
documents (including but not limited to a new lease upon the same terms and
conditions as this lease) confirming the foregoing as such purchaser may
reasonably request. Tenant on behalf of itself and on behalf of all sublessees
and assignees under Tenant waives any right of election to terminate this Lease
because of any such foreclosure proceedings. Tenant hereby irrevocably
constitutes and appoints Landlord as Tenant' s attorney-in-fact to execute (and
to deliver to any third party) any documents hereinabove required to be executed
by Tenant, for and on behalf of Tenant, if Tenant shall have failed to do so
within ten (10) days after the request therefore by Landlord.
XXI. NOTICES
Any notices or demands to be given hereunder shall be in writing and shall
be given to Landlord and to Landlord's managing agent with regard to the
Building, at their respective offices and to Tenant at the Leased Premises, or
at
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such other address as either party shall designate, and shall be by registered
or certified United States mail , postage prepaid or, at the election of
Landlord, hand delivered.
XXII. DEFAULT
In the event Tenant fails to pay any rental due hereunder or fails to keep
and perform any of the other terms or conditions hereof, time being of the
essence, then five (5) days after written notice of default from Landlord, the
Landlord may, if such default has not been corrected, resort to any and all
legal remedies or combination of remedies which Landlord may desire to assert
including but not limited to one or more of the following: (1) lock the doors to
the Leased Premises and exclude Tenant therefrom, (2) retain or take possession
of any property on the Leased Premises pursuant to Landlord's statutory lien,
(3) enter the Leased Premises and remove all persons and property therefrom, (4)
declare this Lease at an end and terminated, (5) ▇▇▇ for the rent due and to
become due under this Lease, and for any damages sustained by Landlord, (6)
collect, directly from any sublessee or assignee under Tenant all subrents and
other charges payable by such sublessees or assignees, Tenant hereby assigning
to Landlord such subrents and other charges in the event of a default by Tenant
under this lease, and (7) continue this Lease in effect and relet the Leased
Premises on such terms and conditions as Landlord may deem advisable with Tenant
remaining liable for the monthly rent plus the reasonable cost of obtaining
possession of the Leased Premises and of any repairs and alterations necessary
to prepare the Leased Premises for reletting, less the rentals received from
such reletting, if any. No action of Landlord shall be construed as an election
to terminate this Lease unless written notice of such intention be given to
Tenant. Tenant agrees to pay as additional rental all attorney's fees and other
costs and expenses incurred by Landlord in enforcing any of Tenant's obligations
under this Lease. Any amount due from Tenant to Landlord under this Lease which
is not paid when due shall bear interest at the "Prime Rate" that is in effect
on the date such amount is due, accruing from such date until paid. Furthermore,
that rate of interest paid by Tenant on any such amount shall be adjusted as the
"Prime Rate" is adjusted.
XXIII. LATE PAYMENTS
Tenant hereby acknowledges that the late payment by tenant to Landlord of
rent or any additional rent or other sums due hereunder will cause Landlord to
incur costs not contemplated in this Lease, the exact amount of which will be
extremely difficult and impracticable to ascertain. Such costs include but are
not limited to processing, administrative and accounting costs.
Accordingly, if any installment of rent or any additional rent or any other
sum due from Tenant shall not be received by Landlord within five (5) business
days after such amount shall be due, Tenant shall pay to Landlord a late charge
equal to five percent (5%) of such overdue amount. if any installment of rent or
any additional rent or any other sum due from Tenant shall not be received
within thirty (30) days after such amount shall be due, Landlord shall incur
additional processing, administrative and accounting costs. In order to
compensate Landlord therefore, Tenant shall pay to landlord an additional late
charge equal to five percent (5%) of such overdue amount, including previous
penalties. The parties hereby agree that such late charges represent a fair and
reasonable estimate of the costs Landlord will incur by reason of late payment
by Tenant. Neither assessment nor acceptance of such late charge by Landlord
shall constitute a waiver of Tenant's default with respect to such overdue
amount, nor prevent Landlord from exercising any of the other rights and
remedies granted under the Lease. Nothing contained in this paragraph shall be
deemed to condone, authorize, sanction or grant to Tenant an option for the late
payment of rent, and Tenant shall be deemed in default in the payment of its
rent should the same not be paid by the date on which it is due.
XXIV. BUILDING RULES AND REGULATIONS
Tenant agrees to abide by all rules and regulations of the building imposed
by Landlord and attached hereto as Exhibit "A". Such rules and regulations are
imposed for the cleanliness, good appearance, proper maintenance, good order and
reasonable use of the Leased Premises and the Building, and as may be necessary
for the proper enjoyment of the Building by all Tenants and their clients,
customers and employees. The rules and regulations may be changed from time to
time upon ten (10) days notice to Tenant. Breach of the rules and regulations of
the Building shall not be grounds for termination of the Lease unless tenant
continues to breach the same after ten (10) days written notice by Landlord.
Landlord shall not be responsible to Tenant for nonperformance by any tenant or
occupant of the Building of any rules or regulations.
XXV. LIENS
Tenant shall keep the Landlord, Leased Premises and Building harmless from
and against any liens or claims arising out of any work performed, materials
furnished or obligations incurred by Tenant, and shall indemnify and hold
Landlord harmless against the same, together with all costs of suit and
attorney's fees incurred by Landlord in connection therewith. Except Tenant has
the right to contest any liens in good faith and agrees to pay any judgment
rendered against Tenant Immediately thereafter.
XXVI. INDEMNIFICATION OF LANDLORD
Landlord shall not be liable to Tenant, and Tenant hereby waives all claims
against Landlord, for any injury (including death) or damage to any person or
property in or about the leased premises by or from any cause
Page 6 of 11
whatsoever and Tenant shall hold Landlord harmless from any and all claims or
liability from injury (including death) or damage to any person or property
whatsoever occurring in or about the leased premises.
Tenant shall obtain and keep in effect during the term of this Lease a
policy of comprehensive liability insurance, including public liability and
property damage, with a minimum combined single limit of liability of One
Million Dollars ($l,000,000.00). Said policy or policies shall name Landlord and
its agents as additional insureds and shall be issued by an insurance company,
licensed to do business in the State of Arizona, and acceptable to Landlord.
Said policy or policies shall additionally provide that the insurance shall not
be canceled or modified unless thirty (30) days prior written notice has been
given to Landlord. Tenant shall supply Landlord with a certificate of the
insurance which it has obtained prior to its occupation of the Leased Premises.
XXVII. TAXES
Tenant agrees to pay or cause to be paid, before delinquency, any and all
taxes levied or assessed and which become payable during the term hereof upon
all of Tenant's equipment, furniture, fixtures and other personal property
located in the Leased Premises.
XXVIII. HOLDING OVER
Upon the expiration of this Lease, Tenant shall immediately surrender the
Leased Premises to Landlord, such Leased Premises to be broom clean, in good
condition and repair, ordinary wear and tear excepted. If the Tenant or any
sublessee or assignee under Tenant holds over after the expiration or earlier
termination of this Lease without Landlord's express written consent, Tenant
shall be in default hereunder and in addition to all of the rights or remedies
available to Landlord. Tenant shall be obligated to pay to Landlord rent at a
rate equal to 150% of current base rental rate with regard to the Leased
Premises for the time during which Tenant retains possession, which payment
shall not constitute a waiver of any of Landlord's other rights or remedies
provided herein.
XXIX. INSOLVENCY OR BANKRUPTCY
Either (a) the appointment of a receiver to take possession of all or
substantially all of the assets of Tenant; or (b) an assignment by Tenant for
the benefit of creditors; or (c) any action taken or suffered by Tenant under
any insolvency, bankruptcy or reorganization act, shall constitute a default and
breach of this Lease by Tenant. Upon the happening of any such event, Landlord
shall have all the rights herein provided in the event of any such default or
breach, including without limitation the right, at Landlord's option, to
terminate this Lease and enter the Leased Premises and remove all persons and
property therefrom. In no event shall this Lease be assigned or assignable by
operation of law or by voluntary or involuntary bankruptcy proceedings or
otherwise and in no event shall this Lease or any rights or privileges hereunder
be an asset of tenant under any bankruptcy, insolvency or reorganization
proceedings.
XXX. SALE BY LANDLORD
In the event of a sale or conveyance by Landlord of the Leased Premises,
the same shall operate to release Landlord from any further liability upon any
of the covenants or conditions, express or implied, herein contained in favor of
tenant and in such event Tenant agrees to look solely to the responsibility of
the successor in interest of Landlord in and to this Lease. This Lease shall not
be affected by any such sale, and Tenant agrees to attorn to the purchaser or
assignee upon Landlord's request. Tenant shall deliver to such purchaser an
offset statement and an estoppel certificate in such form as Landlord may
request and, in the event Tenant fails to deliver said statement and certificate
within ten (10) days after demand by Landlord. Tenant hereby constitutes and
appoints Landlord as Tenant's attorney-in-fact to execute said statement and
certificate.
XXXI. ATTORNEY'S FEES
In the event of any action or proceeding brought by either party against
the other under this Lease, the prevailing party shall be entitled to recover
it's attorney's fees and costs in such action or proceeding. In the event
Landlord intervenes in or becomes a party or is made a party to any action or
proceeding arising in connection with this Lease in order to protect its rights,
then Tenant shall pay to Landlord the fees of Landlord's attorneys therein as
fixed by the court.
XXXII. SURRENDER OF Premises
The voluntary or other surrender of this Lease by Tenant, or a mutual
cancellation thereof shall not work a merger, and shall, at the option of
Landlord, terminate all or any existing subleases or subtenancies, or may, at
the option of Landlord, operate as an assignment to Landlord of any or all such
subleases or subtenancies. Tenant agrees that there shall be no value to the
leasehold upon termination or cancellation of the Lease under its terms.
XXXIII. LIMITATION OF LANDLORD'S LIABILITY
Tenant covenants and agrees that any claims that tenant may have now or
hereafter against Landlord shall be asserted solely against and satisfied only
out of Landlord's right, title and interest in the Building and not from any
Page 7 of 11
other thing or asset of Landlord.
XXXIV. TIME OF THE ESSENCE
Time is of the essence of this Lease and all of its provisions.
XXXV. BINDING EFFECT
The covenants and conditions herein contained shall, subject to the
provisions restricting Tenant's assignment and subletting, apply to and bind the
heirs, executors, administrators, personal representatives, successors and
assigns of the parties hereto.
XXXVI. RECORDATION
Tenant shall not record this Lease or any short form memorandum thereof,
without the prior written consent of Landlord.
XXXVII. NAME OF BUILDING
Tenant shall not use the name of the Building for any purpose other than as
an address of the business to be conducted by Tenant in the Leased Premises.
XXXVIII. GOVERNING LAW
This Lease and all the terms and conditions thereof shall be governed by
the laws of the State of Arizona.
XXXIX. LANDLORD'S RIGHT TO MARKET AND ADVERTISE
Tenant recognizes the right of the Landlord or its agent to advertise and
market the Premises and show it to prospective tenants during normal business
hours beginning 180 days prior to the expiration of the lease term.
XXXX. DEFINED TERMS AND PARAGRAPH HEADINGS
The words "Landlord" and "Tenant" as used herein shall include the plural
as well as the singular. Words used in masculine gender include the feminine and
neuter. If there is more than one Tenant, the obligations hereunder imposed upon
Tenant shall be joint and several. The paragraph headings and titles to the
paragraphs of this Lease are not a part of this Lease and shall have no effect
upon the construction or interpretation of any part thereof.
Improvenet, Inc., a Delaware Corporation
----------------------------------------
(Name of Tenant)
BY /s/ ▇▇▇▇▇▇▇▇ ▇. Farsi, President
-------------------------------------
Date May 2, 2003
-----------------------------------
▇▇▇▇ ▇. & ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------
(Name of Landlord)
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Date May 2, 2003
-------------------------------- ------------------------
Date
-------------------------------- ------------------------
Page 8 of 11
EXHIBIT A
RULES AND REGULATIONS
1. PUBLIC AREAS. All public areas of the Building shall be under the sole and
absolute control of Landlord and Landlord shall have the exclusive right to
regulate, modify and control these areas.
2. INCREASE IN RISK. No tenant shall do anything in the Leased Premises and/or
the Building, or bring to keep anything therein which will in any way increase
or tend to increase the risk of fire, or which shall conflict with the
regulations of the Fire Department or the fire laws, or with any rules or
ordinances established by the Board of Health. No tenant shall use any machinery
which may cause any objectionable noise, jar, or tremor to the floors or walls,
or which, by its weight, might injure the floors of the Building.
3. NO AUCTIONS. No tenant shall conduct any auction on the Leased Premises. No
tenant shall store goods, wares or merchandise on the Leased Premises except for
such tenant's own personal use.
4. TENANT REQUESTS. The requests of any tenant will be attended to only upon
written application to the Landlord. Employees of Landlord shall not perform any
work, nor do anything outside of their regular duties unless special written
instructions from the Landlord are first had and obtained and no employee shall
admit any person (whether a tenant or otherwise) to any part of the Building
without specific instructions from the Landlord or Landlord's agent.
5. KEYS. All keys shall be obtained from the Landlord and all keys shall be
returned to the Landlord upon the termination or earlier expiration of this
Lease. No tenant shall change the locks, or install other locks on the doors to
the Leased Premises or elsewhere without the written consent of Landlord.
6. LOCKING OF LEASED PREMISES. Each tenant shall see that the windows and doors
of the Leased Premises are closed and securely locked before leaving the Leased
Premises and that all lights are properly turned off.
7. NOTICE OF ACCIDENTS. Each tenant shall give Landlord prompt notice of any
accident to, or defects in,, the Leased Premises.
8. CONTROL BY LANDLORD. Landlord reserves the right to exclude or expel from the
Building any person who, in the judgment of Landlord is intoxicated or under the
influence of liquor or drugs, or who shall in any manner act in violation of any
of the rules and regulations of the Building.
9. PLUMBING. The toilets, wash basins and other plumbing fixtures shall not be
used for any purpose other than those for which they were constructed, and no
sweepings, rubbish, rags or other substance shall be thrown therein. All damage
resulting from any misuse of fixtures shall be borne by the tenant who or whose
employees, agents or visitors shall have caused the same.
10. AMENDMENT. Landlord reserves the right at any time to rescind any one or
more of these rules and regulations, or to make such other and further
reasonable rules and regulations as in Landlord's judgment may from time to time
be necessary for the safety, care and cleanliness of the Leased Premises, the
Building and for the preservation of order therein.
11. HEADINGS. The headings of the Paragraphs of these rules and regulations are
for convenience of reference only and shall not limit or define, in any way the
terms and provisions hereof.
12. COMBUSTIBLE MATERIALS. No tenant shall use or keep in any Premises or at the
Building any kerosene, gasoline or inflammable or combustible fluid or material.
13. WINDOW COVERINGS. Tenant shall not place any coverings on the windows
without first obtaining Landlord's written consent. The acceptability of any
such covering shall be at Landlord's sole discretion.
14. EXTERIOR FURNITURE. Tenant shall not place any furnishings in or about the
common exterior areas of the Building.
Page 9 of 11
EXHIBIT B
BUILDING SUITE LOCATION EXHIBIT
[DRAWING OF FLOOR PLAN OF BUILDING SUITE APPEARS HERE]
Page 10 of 11
ADDENDUM
This shall serve as the Addendum to that Lease dated April 23, 2003, by and
between ▇▇▇▇ ▇. & ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (Landlord), and Improvenet, Inc., a
Delaware Corporation (Tenant), for the Second Floor of ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
The language contained herein shall prevail if in conflict with any previous
language.
o Base Rent includes five (5) covered/reserved parking stalls throughout the
term of the lease located at the north end of the covered parking area and
thirteen (13) uncovered/unreserved parking stalls that directly adjoin the foot
print of the building. This parking count is based on the existing striping,
which may or may not change from time to time based on government regulations
that are beyond the Landlord's control.
o Operating expenses as described in Paragraph V shall be grossed up and based
on the greater of 95% occupancy or actual expenses in determining the Base Year
and pro-rata share of expense pass through.
o Signage: Tenant shall have the right to place a sign on the building and at
the entrance to Tenant's suite. The cost and responsibility of permitting,
installing and removing the sign (including restoring the area of the building
▇▇▇▇ the sign was) at the end of the tenant's lease term shall be Tenant's.
Actual signage is subject to Landlord's prior written approval.
o Tenant shall re-carpet and paint the interior of the suite as desired prior to
occupancy. Landlord and Tenant shall equally share in the cost of this
re-carpeting and painting. The cost to the Landlord for re-carpeting and
painting shall not exceed three thousand dollars ($3,000.00).
Improvenet, Inc., a Delaware Corporation
----------------------------------------
(Name of Tenant)
BY /s/ ▇▇▇▇▇▇▇▇ ▇. Farsi, President
-------------------------------------
Date May 2, 2003
-----------------------------------
▇▇▇▇ ▇. & ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------
(Name of Landlord)
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Date May 2, 2003
-------------------------------- ------------------------
Date
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Page 11 of 11