EXHIBIT 10.15
LEASE AGREEMENT
1. BASIC PROVISIONS
1.1 Date: July 25, 2003
1.2 Landlord: Orsett/Piedmont Limited Partnership
1.3 Landlord's Address:
For Payments: Orsett Properties, Ltd.
X.X. Xxx 00000
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
For Notices: Orsett Properties, Ltd.
0000 Xxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Legal
With a Copy to: Orsett Properties, Ltd.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxx Xxxxxx
1.4 Tenant: Asset Acceptance LLC, a Delaware limited
liability company
1.5 Tenant's Address: 0000 Xxxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
With a copy to:
Xxxx Xxxxxx
Asset Acceptance LLC
0000 Xxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
With an additional copy to:
Xxxxxxxxx X. Xxxxxx
Signature Associates - ONCOR International
Xxx Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
1.6 Property: The parcel of real estate located in
Maricopa County, Arizona, described on
Exhibit "A" attached hereto and incorporated
herein by this reference, together with the
office buildings now or hereafter situated
thereon, the landscaping, parking facilities
and all other improvements, rights and
appurtenances thereto.
1.7 Building: That building known as the Piedmont
Corporate Center, located at 0000 Xxxxx 00xx
Xxxxxx in Phoenix, Arizona, and situated on
the Property. The Building has a stipulated
total rentable space of approximately 71,550
square feet.
1.8 Leased Premises: Stipulated to be 71,550 rentable square feet
as outlined on the Floor Plan attached
hereto as Exhibit "B".
1.9 Permitted Use: General office use and such other uses as
may be allowed by the zoning for the
Property and no other
1.10 Lease Term: 78 full calendar months following the
Commencement Date
1.11 Renewal Option: 2 term of 5 years, to be exercised no less
than 180 days prior to the end of the Lease
Term or Option Period, as applicable.
1.12 Commencement Date: October 1, 2003
1.13 Basic Rent: $0.9324 per square foot per month for months
1-78 ($66,713.22), plus NNN charges and
rental tax
1.14 Security Deposit: Waived
1.15 Amount Due at Lease Execution: $0
1.16 Building Hours: 24 hours per day, 7 days per week, 365 days
per year
1.17 Tenant's Pro Rata Share: 100%
1.18 Deleted
1.19 Tenant Improvement Allowance: $1,379,943. Of that sum, $664,443
shall be paid by Landlord to Tenant
on October 1, 2003, with the
balance of the allowance to be paid
as described in the Work Letter
attached as Exhibit "D".
1.20 Parking Spaces: Tenant to have sole and exclusive use of all
parking spaces (496) (both covered and
uncovered) on the Property
1.21 Parking Charges: None
1.22 Guarantor(s): None
1.23 Tenant's Broker: Signature Associates - ONCOR International
and CORE Realty Partners-ONCOR International
1.24 Exhibits Exhibit "A" Legal Description
Exhibit "B" Floor Plan
Exhibit "C" Deleted
Exhibit "D" Work Letter
Exhibit "E" Renewal Option
Exhibit "F" Rules and Regulations
2. LEASED PREMISES
Landlord hereby leases to Tenant, and Tenant hereby leases and accepts
the Leased Premises from Landlord upon the terms and conditions set forth in
this Lease (including the Basic Provisions of Section 1 which are incorporated
herein by this reference). Except as may be otherwise provided herein, Tenant
shall have the exclusive right to use the Building Common Areas (as defined
below). For the purposes of this Lease, the term "Building Common Areas" means
common walkways and footpaths, electrical and telephone closets, landscaped
areas, parking areas and such other areas of the Property which are not part of
the Leased Premises. Landlord and Tenant agree that the rentable area of the
Leased Premises for all purposes under this Lease shall be the Rentable Area
specified in Section 1.8 above.
3. LEASE TERM; COMMENCEMENT DATE
3.1 Lease Term. The Lease Term shall begin on the Commencement
Date and shall be for the period set forth in Section 1.10 above, unless sooner
terminated in accordance with the further provisions of this Lease. Prior to
occupying the Premises, Tenant shall execute and deliver to Landlord a letter
acknowledging the Commencement Date.
3.2 Commencement Date. The "Commencement Date" shall mean the date
referenced in Section 1.12 above. Landlord shall deliver the Premises to Tenant
within 5 days after execution of this Lease.
4. SECURITY DEPOSIT
Deleted.
5. RENT
5.1 Payment of Basic Rent. Tenant shall pay to Landlord the Basic
Rent set forth in Article 1.13 above. The Basic Rent shall be paid in equal
monthly installments, on or before the first day of each and every calendar
month during the Lease Term, in advance, without notice or demand and without
abatement, deduction or set-off. Basic Rent for the first full calendar month in
which Basic Rent is payable shall be paid upon Tenant's execution of this Lease
(along with the Security Deposit) and Basic Rental for any partial month at the
beginning of the Lease Term shall be paid on the Commencement Date. Basic Rental
and Additional Rent for any partial month at the beginning or the end of the
Lease Term shall be prorated based on a 30-day month. All payments under this
Lease shall be paid in lawful money of the United States of America to Landlord
or its agent at the following address: Orsett Properties, XX Xxx 00000,
Xxxxxxxxx, XX, 00000, or to such other person or at such other place as Landlord
may from time to time designate in writing.
5.2 Rent Tax. In addition to the Basic Rent and Additional Rent,
Tenant shall pay to Landlord, together with the monthly installments of Basic
Rent and payments of Additional Rent, an amount equal to any taxes, impositions,
fees, including, without limitation, any sales, rental, occupancy, excise, use
or transaction privilege taxes assessed or levied upon Landlord with respect to
the amounts
paid by Tenant to Landlord hereunder, as well as all taxes assessed or imposed
upon Landlord's gross receipts or gross income from leasing the Leased Premises
to Tenant, including, without limitation, any tax now or subsequently imposed by
the city in which the Property is located, the County of Maricopa, the State of
Arizona, any other governmental or municipal body, and any taxes assessed or
imposed in lieu of or in substitution of any of the foregoing taxes. Such taxes
shall not, however, include any franchise, gift, estate, inheritance, or income
tax assessed against Landlord.
5.3 Additional Rent. In addition to Basic Rent, all other amounts
to be paid by Tenant to Landlord pursuant to this Lease (including amounts to be
paid by Tenant pursuant to Article 6 below) shall be deemed to be Additional
Rent, whether or not designated as such, and shall be due and payable on a
monthly basis at the same time the Basic Rent is due. Landlord shall have the
same remedies for the failure to pay Additional Rent as for the nonpayment of
Basic Rent.
6. NET COSTS
6.1 Generally. In addition to the Basic Rent set forth in Article
1 above, Tenant agrees to pay to Landlord at the times and in the manner
hereinafter provided Tenant's Pro Rata Share of the net costs (hereinafter
defined) paid or incurred by Landlord or its designated agent during the term
hereof. For the purpose of this Article 6, the term "net costs" means all costs
and expenses of any kind accrued, paid or incurred by Landlord or on Landlord's
behalf in connection with the ownership, use, management, repair, service,
insurance, operation and maintenance of the Building and the Property, including
without limitation: landscaping; line painting; lighting; sanitary control;
removal of trash and other refuse; and reasonable reserves for replacements and
repairs and the cost of personnel to implement such services. Also included in
the net costs are Landlord's costs incurred from capital expenditures which
benefit, maintain, or improve the Building and Building Common Areas, capital
expenditures reasonably calculated to reduce the operating cost of same, and
capital expenditures required to comply with governmental laws, rules,
regulations, codes or ordinances. The cost of capital expenditures shall be
amortized over the number of years of the useful life of the expenditure. Any
item expensed by Landlord on its federal tax return shall be conclusively deemed
an operating expense for purposes of determining whether an item is a capital
expenditure or an operating expense. Tenant shall also pay Tenant's Pro Rata
Share of Owner's reasonable management fees incurred for the operation of the
Building and Building Common Areas, such fees in no event to exceed 3% of gross
receipts.
Notwithstanding anything to the contrary contained herein, in no event
shall Tenant's Pro Rata Share of controllable net costs (which shall mean all
net costs except Taxes, costs of utilities, insurance, and costs to comply with
laws) increase by more than 5% over Tenant's Pro Rata Share of controllable net
costs for the prior calendar year of the Lease Term. Any increases in Tenant's
Pro Rata Share of controllable net costs that shall be in excess of such 5% cap
(the "carryover amount") may be included by Landlord in increases in Tenant's
Pro Rata Share of controllable net costs payable by Tenant in any subsequent
year until such carryover amount is recouped), provided that the Tenant's Pro
Rata Share of controllable net costs for such subsequent year shall not,
inclusive of the carryover amount, exceed 5% over the previous year's amount.
Landlord will annually provide to Tenant a breakdown of the
controllable net costs. In the event that Tenant shall reasonably object to one
or more of said net costs (i.e., landscaping, parking lot sweeping, etc.) Tenant
shall provide written notice thereof to Landlord within 10 days after receipt of
the breakdown of such objection. If following discussion of the matter with
Landlord Tenant still objects to the item or items, Landlord will solicit at
least 2 additional bids for such service or item, and if one of the bids is less
than the current amount, then Landlord will use the low bid.
Notwithstanding anything to the contrary contained in this Section, the
following costs shall specifically not be deemed to be net costs as defined
herein:
1. Repairs or other work occasioned by fire, windstorm or other
casualty of an insurable nature or by the exercise of the
right of eminent domain;
2. Leasing commission, attorneys' fees, costs and disbursement
and other expenses incurred in connection with negotiations or
disputes with tenants/Tenant, other occupants, or prospective
tenants of other occupants, or purchasers or mortgagees of the
Building;
3. Expenses incurred in renovating or otherwise improving or
decorating, painting, or redecorating space for tenants/Tenant
or other occupants or vacant space;
4. Landlord's costs of electricity and other services sold to
tenants/Tenant and for which Landlord is entitled to be
reimbursed by tenants/Tenant as an additional charge or
rentable over and above the basic rent payable under the Lease
with such tenants/Tenant;
5. Except as otherwise provided herein, costs incurred by
Landlord for alterations which are considered capital
improvements and replacements under generally accepted
accounting principles; provided, however, that Landlord may
include capital expenditures to the extent that the same is
amortized over the useful life of the improvement;
6. Except as otherwise provided herein, depreciation and
amortization;
7. Except as otherwise provided herein, costs of a capital
nature, including, but not limited to, capital improvements,
capital repairs, capital equipment, and capital tools all in
conformance with generally accepted accounting principles;
provided, however, that Landlord may include any such capital
costs in operating expenses to the extent that the same is
amortized over the useful life of the improvement;
8. Expenses in connection with services or other benefits of a
type which are not provided Tenant but which are provided to
another tenant or occupant;
9. Costs incurred due to violation by Landlord or any tenant or
other occupant of the terms and conditions of any lease;
10. Overhead and profit increments paid to subsidiaries or
affiliates of Landlord for services on or to the real
property, to the extent only that the costs of services exceed
competitive costs of such services were they not so rendered
by a subsidiary or affiliate;
11. Interest on debt or amortization payments on any mortgage or
mortgages, and rental under any ground or underlying leases or
lease;
12. Landlord's general partnership overhead;
13. Any compensation paid to clerks, attendants, or other persons
in commercial concessions operated by Landlord;
14. All items and services for which Tenant or tenants reimburse
Landlord or pay third persons;
15. Advertising and promotional expenditures;
16. Any costs, fines or penalties incurred due to violations by
Landlord of any governmental rule or authority;
17. Costs incurred in connection with the sale, refinancing,
mortgaging or selling or change of ownership of the Building,
including brokerage commissions, attorneys' and accountants'
fees, closing costs and interest charges, as well as increases
in real estate taxes arising directly from the sale of the
project;
18. Costs, fines, interest, penalties, legal fees or costs of
litigation incurred due to the late payments of taxes,
utilities, xxxx and other costs incurred by Landlord's failure
to make such payments when due;
19. Costs or expenses for owning, leasing and/or maintaining
sculpture, painting, or other works or art (but excluding
lobby plants, which are leased) installed in and on the
Building or the Land;
20. Any other expenses which, under generally accepted accounting
principles, consistently applied, would not be rendered as, or
otherwise considered to be, a normal maintenance or operating
expense of the Building, except as otherwise set forth in this
Lease;
21. State, local or federal personal or corporate income taxes
measured by the income of Landlord from all sources or from
sources other than rent alone, estate and inheritance taxes,
franchise, succession and transfer taxes and interest on taxes
and penalties resulting from failure to pay real estate taxes.
Further, the amount of tax expenses paid by Tenant and
attributable to tenant improvements, or tax expenses in
connection with other alterations, additions, substitutions
and improvements done by or for the tenants in the Building
which is separately assessed to and paid by such other tenants
or directly received by Landlord from such other tenants,
shall be excluded from operating expenses;
22. Expenses and costs relating in any way whatsoever to the
identification, testing, monitoring, control, encapsulation,
removal, replacement, repair and abatement of any hazardous
materials within the Building, Leased Premises and the Land;
23. Costs with respect to Landlord's central office, if any, or
its operations conducted, or employees engaged, therein,
except costs that directly relate to or are otherwise
allocable to the Land, the Building, or any portion thereof;
24. Initial construction of the Building;
25. Initial supplies for the Building, or otherwise incidental to
preparing the Building for initial operation;
26. The costs of correcting defects in the construction of the
building or in the building equipment, except that conditions
(not occasioned by construction defects) resulting from
ordinary wear and tear will not be deemed defects for the
purpose of this category;
27. The cost incurred by Lessor or any other lessee of complying
with building codes, any other governmental rule or
requirement; however, the cost of complying with any building
code or any other governmental rule or requirements enacted
after this Lease is signed shall be borne by Lessee only in
proportion to Lessee's premises' share of the total Building
and Lessee's remaining lease term as a percentage of the
useful life of the compliance measure; in no instance will
Lessee pay any fines or penalties incurred by Lessor for
failure to comply with such codes, rules or regulations.
6.2 Taxes. Tenant covenants and agrees to pay Tenant's Pro Rata
Share of "Taxes" which may be levied or assessed for each calendar year during
the entire term of this Lease, against the Building, Property, and any
improvements thereon, or relating to the operation or use thereof. For purposes
hereof, "Taxes" means all forms of real estate taxes, impositions, charges, fees
and assessments (including, without limitation, all assessments for public
improvement or benefit), duties, excises, levies, licenses, permit fees and
other charges of governmental authorities (including, without limitation,
transaction privilege, sales, gross receipts, rental occupancy or other like
taxes), whether general or special, ordinary or extraordinary, foreseen or
unforeseen, of every kind and nature whatsoever, which, at any time prior to or
during the Lease Term, may have been or may be assessed, levied, imposed upon or
arise or become due or payable out of or in respect of the Building or Property
or any part thereof, any legal or equitable interest of Landlord or Tenant
therein, Landlord's rentals or other income therefrom, Landlord's leasing of the
Building or any part thereof, any use, occupancy or operation of the Leased
Premises or any part thereof, provided, however, that such term shall not
include any income or any estate, inheritance, succession, capital stock, or
capital gains tax, levied upon Landlord. Notwithstanding the foregoing, if at
any time after the date hereof; the methods of taxation shall be changed so that
in lieu of, as a substitute for, or in addition to, the whole or any part of any
Taxes now levied, assessed or imposed, there shall be levied, assessed or
imposed (a) a tax, assessment, levy, imposition or charge on the rents received
from real property, or (b) a license fee measured by the rent payable by Tenant
to Landlord, or (c) any other substitute tax, assessment, levy, imposition or
charge, then all such license fees, taxes, assessments, levies, impositions and
charges shall constitute Tax for the purposes hereof. All costs, expenses,
attorneys' fees and consulting fees (including, without limitation, the costs of
tax consultants) incurred by Landlord in connection with attempting to reduce
the assessed valuation of land, buildings and improvements on the Property
and/or in protesting or contesting the amount or validity of any Taxes also
shall also constitute Taxes for the purposes hereof. The certificate of
non-payment or xxxx for any Tax issued by the appropriate governmental authority
shall be prima facie evidence that such Tax is due and unpaid.
Landlord and Tenant understand and agree that they have a mutual
interest in keeping the Taxes as low as possible, and that Landlord will
annually consult with an independent third-party expert regarding whether or not
to protest the valuation of the Taxes. Following consultation with such expert,
Landlord shall notify Tenant of Landlord's determination. If Tenant disagrees
with the determination of Landlord, Tenant shall provide written notice thereof
to Landlord and thereafter Landlord and Tenant shall discuss Landlord's
decision, along with such expert if necessary. Notwithstanding the foregoing,
Landlord and Tenant agree that the decision whether or not to protest Taxes must
ultimately lie with the Landlord.
Should the state in which the Building and Property is located or any
political subdivision thereof or any governmental authority having jurisdiction
over the Building and Property impose a tax or assessment (other than an income
or franchise tax) either upon or against the rent payable by tenants in the
Building to Landlord or upon or against the business of renting land or
buildings, either by way of substitution for the taxes and assessments levied or
assessed against such land and buildings, or in addition thereto, such tax or
assessment shall be deemed to constitute a tax or assessment against such land
and such buildings for the purpose of this section.
Tenant shall pay directly to the levying governmental authority prior
to delinquency, all personal property taxes levied upon all of Tenant's trade
fixtures, equipment and other personal property located in, on or about the
Leased Premises (collectively, "Tenant's Equipment") and all other taxes which
may be imposed, levied or assessed upon this Lease or upon any rental or other
payments of any kind or nature whatsoever made hereunder or in connection
herewith or with the conduct of Tenant's business operations or any rentals
received by Tenant from permitted subtenants, licensees, concessionaires or
other permitted users or occupants of all or any portion of the Premises. If any
or all of Tenant's Equipment shall be assessed and taxed with Landlord's real or
personal property, Tenant shall, within 5 days after written demand from
Landlord, pay the amount of such taxes which are attributable to Tenant's
Equipment as reasonably determined by Landlord.
6.3 Payment of Tenant's Pro Rata Share. Tenant's Pro Rata Share of
all Taxes and net costs shall be paid to Landlord, as additional rent, in
monthly installments on or before the first day of each calendar month, in
advance, in an amount estimated by Landlord. Within sixty (60) days after the
close of each calendar year of the Lease Term, Landlord shall furnish Tenant
with a written statement of the actual amount of Tenant's Pro Rata Share for
such year. If the total amount paid by Tenant under this section for any
calendar year during the term of this Lease shall be less than the actual amount
due from Tenant for such year as shown on such statement, Tenant shall pay to
Landlord the difference between the amount paid by Tenant and the actual amount
due, such deficiency to be paid within 10 days alter demand therefor by
Landlord; and if the total amount paid by Tenant hereunder for any calendar year
shall exceed such actual amount due from Tenant for such calendar year, such
excess shall promptly be refunded by Landlord to Tenant. All amounts due
hereunder shall be payable to Landlord at the place where the Basic Rent is
payable. For the calendar years in which this Lease commences and terminates,
the provisions of this section shall apply, and Tenant's liability for Tenant's
Pro Rata Share for such years shall be subject to a pro rata adjustment based on
the number of days of said calendar years.
6.4 Tenant's Audit Rights. Upon at least seven (7) days' written
notice to Landlord, Tenant shall have the right, at its sole cost, for a period
of one hundred eighty (180) days after Tenant's receipt of a Statement, to
review and/or audit Landlord's records of Operating Expenses and Taxes for the
calendar year to which such Statement pertains, such review or audit to be
performed during normal business hours at Landlord's business office. If such
audit discloses an error in this Statement, the difference shall promptly be
paid by, or credited to, Tenant, as appropriate. If Tenant does not exercise its
right of review and/or audit within such one hundred eighty (180) day period,
this right of review and/or audit shall expire and the Statement to which such
one hundred eighty (180) day period pertains shall be final and binding upon
Tenant.
7. CONDITION, REPAIRS AND ALTERATIONS
7.1 Condition of Leased Premises. Landlord shall provide the
Leased Premises to Tenant, and Tenant accepts the Leased Premises in the "AS IS"
condition, and Landlord makes no representations, covenants or warranties
whatsoever concerning the condition of the Leased Premises and has no obligation
to construct, remodel, improve, repair, decorate or paint the Leased Premises or
any improvement on or part of the Leased Premises, except as set forth in the
"Work Letter" marked as Exhibit "D" below and except for the replacement of
defective thermostats and maintenance as generally described in the report by
Tri-City Mechanical dated June 16, 2003. Landlord shall not be required to use
Tri-City Mechanical for the completion of such work. Tenant represents and
warrants that it has inspected the Leased Premises prior to execution of the
Lease, and that it is relying on its own inspection in executing this Lease and
not any statement, representation or warranty of Landlord, its agents, employees
or contractors. Tenant's taking possession of the Leased Premises shall be
deemed conclusive evidence that as of the date of taking possession the Leased
Premises are in good order and satisfactory condition. Tenant acknowledges and
agrees that it has received and reviewed a copy of the plans for the Building.
Landlord acknowledges and agrees that the Building and the existing improvements
were constructed in compliance with the Americans with Disabilities Act.
7.2 Alterations and Improvements. Other than the initial
improvements to the Leased Premises, which shall be governed by the Work Letter
attached hereto, Tenant shall not make any material improvements (defined as
having a construction cost in excess of $10,000) or other alterations to the
interior of the Leased Premises, or undertake any construction whatsoever
involving structural components or roof penetrations, without prior to
commencing any such work obtaining the written consent of Landlord to the
proposed work, which shall not be unreasonably withheld, including the approval
by Landlord of the plans, specifications, the proposed architect and/or
contractor(s) for such alterations and/or improvements, and the materials used
in connection with such alterations. Landlord may, as a condition to consenting
to such work, require that Tenant provide security adequate in Landlord's
judgment so that the improvements or other alterations to the interior of the
Leased Premises will be completed in a good and workmanlike manner. Landlord may
also require that any work done to the Leased Premises (such as any roof
penetrations or other structural changes) be done by Landlord's own employees or
contractors, but at Tenant's expense. Other than improvements by Tenant made
pursuant to the Work Letter attached hereto, any additional improvements and
alterations to the interior of the Leased Premises shall be subject to the
supervision of Landlord or its designee, and Tenant shall pay to Landlord, upon
completion of such work, a supervision fee in an amount equal to 5% of the cost
of such work. All such improvements or alterations must conform to and be in
substantial accordance in quality and appearance with those improvements and
alterations that are standard for the Building, and upon completion shall be the
property of Landlord. Tenant may remove its trade fixtures, property (including
office supplies) and moveable office furniture and equipment not attached to the
Building provided: (i) such removal is made prior to the expiration or
termination of this Lease; (ii) Tenant is not then in default in the performance
of its obligations under this Lease; and (iii) Tenant promptly repairs all
damage caused by such removal. Tenant shall give Landlord written notice of such
removal at least three (3) business days prior to commencement thereof. In the
event Landlord consents to the use by Tenant of its own architect and/or
contractor for the installation of any such alterations or improvements, prior
to the commencement of such work, Tenant shall provide Landlord with evidence
that Tenant's contractor has procured worker's compensation, liability and
property damage insurance (naming Landlord as an additional insured) in a form
and in an amount reasonably acceptable to Landlord, and evidence that Tenant's
architect and/or contractor has procured the necessary permits, certificates and
approvals from the appropriate governmental authorities. Tenant acknowledges and
agrees that any review by Landlord of Tenant's plans and specifications and/or
right of approval exercised by Landlord with respect to Tenant's architect
and/or contractor is for Landlord's benefit only and Landlord shall not, by
virtue of such review or right of approval, be deemed to make any
representation, warranty or acknowledgment to
Tenant or to any other person or entity as to the adequacy of Tenant's plans and
specifications or as to the ability, capability or reputation of Tenant's
architect and/or contractor.
7.3 Tenant's Obligations. Tenant shall, at Tenant's sole cost and
expense, maintain the Leased Premises in a clean, neat and sanitary condition
and shall keep the Leased Premises and every part thereof (including without
limitation, interior walls, floor coverings, ceilings (including tiles and grid)
all improvements to the Leased Premises (including the Tenant Improvement Work
(as defined in the Work Letter)) outlets and fixtures in good condition and
repair except where the same is required to be done by Landlord pursuant to
Article 7.4. Tenant hereby waives all rights to make repairs at the expense of
Landlord as provided by any law, statute or ordinance now or hereafter in
effect. Upon the expiration or earlier termination of the Lease Term, Tenant
shall surrender the Leased Premises, including Tenant's alterations and/or
improvements, to Landlord, janitorial clean and in the same condition as when
received, ordinary wear and tear and damage from casualty excepted. Except as
set forth in Article 7.4 below, Landlord has no obligation to construct,
remodel, improve, repair, decorate or paint the Leased Premises or any
improvement thereon or part thereof. Tenant shall pay for any repairs to the
Leased Premises, the Building and the Property made necessary by any action or
inaction of Tenant, its employees, contractors, agents or invitees.
7.4 Landlord's Obligations. Landlord shall make all necessary
repairs and replacement if necessary to the structural portion of the roof,
foundation, floors and exterior walls of the Building. Landlord shall not be
liable or responsible for breakdowns or interruptions in service when reasonable
efforts are made to restore such service, except to the extent specifically
provided in Section 8.2.
7.5 Removal of Alterations. Upon the expiration or earlier
termination of this Lease, Tenant shall remove from the Leased Premises all
movable trade fixtures and Tenant's personal property, and shall promptly repair
any damage to the Leased Premises, the Building and/or the Property caused by
such removal. All such removal and repair shall be at Tenant's sole cost and
expense. All repairs required of Tenant pursuant to the provisions of this
Article 7.5 shall be performed in a manner reasonably satisfactory to Landlord,
and shall include, but not be limited to, repairing plumbing, electrical wiring
and holes in walls, restoring damaged floor and/or ceiling tiles, repairing any
other cosmetic damage, and cleaning the Leased Premises.
7.6 No Abatement. Except as specifically provided herein, Landlord
shall have no liability to Tenant, nor shall Tenant's covenants and obligations
under this Lease, including without limitation, Tenant's obligation to pay Basic
Rent and Additional Rent, be reduced or abated in any manner whatsoever by
reason of any inconvenience, annoyance, interruption or injury to business
arising from Landlord's making any repairs or changes which Landlord is required
or permitted to make pursuant to the terms of this Lease or by any other
tenant's Lease or are required by law to be made in and to any portion of the
Leased Premises, the Building or the Property. Landlord shall, nevertheless, use
reasonable efforts to minimize any interference with Tenant's business in the
Leased Premises.
8. SERVICES
8.1 Utilities. Tenant shall be solely responsible for and shall
promptly pay all charges for heat, water, gas, telephone, electricity or any
other utility used or consumed in the Leased Premises commencing upon delivery
of the Leased Premises to Tenant. Should Landlord elect to supply the water,
gas, heat, electricity or any other utility used or consumed in the Leased
Premises, Tenant agrees to purchase any such utilities from Landlord and pay for
same as Additional Rent. Tenant agrees to cooperate fully at all times with
Landlord to abide by all rules, regulations and requirements for the use and
conservation of the above utilities. Any failure to pay any amounts owed by
Tenant under this Article shall constitute a breach of the obligation to pay
rent under this Lease and shall entitle Landlord to the rights granted in this
Lease for such breach.
8.2 Interruptions in Service. Landlord does not warrant that any
of the foregoing utilities or any other services which Landlord may elect to
supply will be free from interruption. Tenant acknowledges that any one or more
of such utilities or services may be suspended by reason of accident, repairs,
inspections, alterations or improvements necessary to be made, or by strikes or
lockouts, or by reason of operation of law, or by causes beyond the reasonable
control of Landlord. Except as specifically set forth below, Landlord shall not
be liable for and Tenant shall not be entitled to any abatement or reduction of
Basic Rent or Additional Rent by reason of any disruption of any utilities or
any services that may be provided by Landlord from time to time. Notwithstanding
the foregoing, if any interruption of utilities causes all or a portion of the
Premises to be untenantable for a period of three (3) business days or more and
is caused by Landlord or Landlord's employees, authorized agents or
representatives, Rent shall be abated proportionately (based on both time and
portion of Leased Premises left untenantable) from the date of interruption
until the service is restored.
8.3 Telephone Service. Tenant shall be solely responsible for
obtaining and installing and shall promptly pay all charges for telephone
service used by Tenant. Tenant specifically agrees that Landlord will not be
providing any telephone or telecommunications services or equipment to the
Leased Premises, and that the date upon which any such telephone or
telecommunication services shall be available or installed in the Leased
Premises shall not effect the Commencement Date of this Lease. The Commencement
Date shall not be modified regardless of whether Tenant is able to obtain such
telecommunications service on or before the Commencement Date.
9. LIABILITY AND PROPERTY INSURANCE
9.1 Liability Insurance. Tenant shall, during the Lease Term, keep
in full force and effect, a policy or policies of commercial general liability
insurance for personal injury (including wrongful death) and damage to property
covering (a) any occurrence in the Leased Premises, (b) any act or omission by
Tenant, by any subtenant of Tenant, or by any of their respective invitees,
agents, contractors, servants or employees anywhere in the Leased Premises or
the Property, (c) the business operated by Tenant and by any subtenant of Tenant
in the Leased Premises, and (d) the contractual liability of Tenant to Landlord
pursuant to the indemnification provisions of Article 16 below, which coverage
shall not be less than $3,000,000.00 per occurrence and $3,000,000.00 combined
single limit. If Landlord shall so request, Tenant shall increase the amount of
such liability insurance to the amount then customary for premises and uses
similar to the Leased Premises and Tenant's use thereof. The liability policy or
policies shall contain an endorsement naming Landlord, its partners, members or
shareholders (as applicable), Landlord's lender and management agent and any
persons, firms or corporations designated by Landlord as additional insureds,
and shall provide that the insurance carrier shall have the duty to defend
and/or settle any legal proceeding filed against Landlord seeking damages based
upon bodily injury or property damage liability even if any of the allegations
of such legal proceedings are groundless, false or fraudulent.
9.2 Property Insurance. Tenant shall, during the Lease Term, keep
in full force and effect, a policy or policies of insurance with "Special Form
Coverage," including coverage for vandalism or malicious mischief, insuring the
Tenant Improvement Work and Tenant's alterations and/or improvements made
pursuant to Article 7 above and Tenant's stock in trade, furniture, personal
property, fixtures, equipment and other items in the Leased Premises, with
coverage in an amount equal to the full replacement cost thereof.
9.3 Worker's Compensation Insurance. Tenant shall, during the
Lease Term, keep in full force and effect, a policy or policies of worker's
compensation insurance with an insurance carrier and in amounts approved by the
Industrial Commission of the State of Arizona.
9.4 Business Interruption Insurance. Tenant shall, during the
Lease Term, keep in full force and effect, a policy or policies of business
interruption insurance in an amount equal to 12 monthly installments of Basic
Rent and Additional Rent payable to Landlord, together with taxes thereon,
insuring Tenant against losses sustained by Tenant as a result of any cessation
or interruption of Tenant's business in the Leased Premises for any reason.
9.5 Insurance Requirements. Each insurance policy and certificate
thereof obtained by Tenant pursuant to this Lease shall contain a clause that
the insurer will provide Landlord with at least 30 days prior written notice of
any material change, non-renewal or cancellation of the policy. Each such
insurance policy shall be with an insurance company authorized to do business in
the State of Arizona and rated not less than A-VIII in the then most current
edition of "Best's Key Rating Guide". Certificates of Insurance relative to all
insurance policies evidencing the coverage under each such policy, as well as
the required additional insured endorsement(s), shall be delivered to Landlord
no less than 15 days prior to the Commencement Date. Each such policy shall
provide that any loss payable thereunder shall be payable notwithstanding (a)
any act, omission or neglect by Tenant or by any subtenant of Tenant, or (b) any
occupation or use of the Leased Premises or any portion thereof by Tenant or by
any subtenant of Tenant for purposes more hazardous than permitted by the terms
of such policy or policies, or (c) any foreclosure or other action or proceeding
taken by any mortgagee or trustee pursuant to any provision of any mortgage or
deed of trust covering the Leased Premises, the Building or the Property, or (d)
any change in title or ownership of the Property. All insurance policies
required pursuant to this Article 9 shall be written as primary policies, not
contributing with or in excess of any coverage which Landlord may carry. Tenant
shall procure and maintain all policies entirely at its own expense and shall,
at least 20 days prior to the expiration of such policies, furnish Landlord with
certified copies of replacement policies or renewal certificates for existing
policies. Tenant shall not do or permit to be done anything which shall
invalidate the insurance policies maintained by Landlord or the insurance
policies required pursuant to this Article 9 or the coverage thereunder. If
Tenant or any subtenant of Tenant does or permits to be done anything which
shall increase the cost of any insurance policies maintained by Landlord, then
Tenant shall reimburse Landlord for any additional premiums attributable to any
act or omission or operation of Tenant or any subtenant of Tenant causing such
increase in the cost of insurance. Any such amount shall be payable as
Additional Rent within 5 days after receipt by Tenant of a xxxx from Landlord.
All policies of insurance shall name both Landlord and Tenant (and/or such other
party or parties as Landlord may require) as insureds and shall be endorsed to
indicate that the coverage provided shall not be invalid due to any act or
omission on the part of Landlord. In addition, the policy of property insurance
described in Article 9.2 shall name Landlord (and Landlord's lender, if Landlord
shall so require) as a co-loss payee.
9.6 Co-Insurance. If on account of the failure of Tenant to comply
with the provisions of this Article 9, Landlord is deemed a co-insurer by its
insurance carrier, then any loss or damage which
Landlord shall sustain by reason thereof shall be borne by Tenant, and shall be
paid by Tenant within 5 days after receipt of a xxxx therefor.
9.7 Adequacy of Insurance. Landlord makes no representation or
warranty to Tenant that the amount of insurance to be carried by Tenant under
the terms of this Lease is adequate to fully protect Tenant's interests. If
Tenant believes that the amount of any such insurance is insufficient, Tenant is
encouraged to obtain, at its sole cost and expense, such additional insurance as
Tenant may deem desirable or adequate. Tenant acknowledges that Landlord shall
not, by the fact of approving, disapproving, waiving, accepting, or obtaining
any insurance, incur any liability for or with respect to the amount of
insurance carried, the form or legal sufficiency of such insurance, the solvency
of any insurance companies or the payment or defense of any lawsuit in
connection with such insurance coverage, and Tenant hereby expressly assumes
full responsibility therefor and all liability, if any, with respect thereto.
9.8 Landlord Insurance. Landlord shall maintain fire and extended
coverage insurance and any other such insurance as Landlord shall deem
appropriate for the Building and Property, including without limitation
environmental, loss of rent insurance, plate glass insurance and insurance on
additions and improvements required to be made by Tenant and which have become
or are to become the property of Landlord upon vacation of the Leased Premises
by Tenant, in amounts reasonably determined by Landlord, but in any event no
less than the full replacement cost thereof. Such insurance shall be maintained
with insurance company(s) authorized to do business in Arizona and the proceeds
of such insurance shall be payable solely to Landlord. If the annual premiums
paid by Landlord shall exceed the standard rates for comparable buildings as a
result of Tenant's use of the Leased Premises or the value of the contents
thereof, Tenant shall promptly pay within thirty (30) days written notice
thereof from Landlord the excess amount of such premiums. Landlord shall
maintain a policy or policies of comprehensive general liability insurance with
insurance company(s) authorized to do business in Arizona in amounts that
Landlord shall reasonably determine, such insurance to afford minimum protection
of not less than $3,000,000.00 in respect of personal injury or death in respect
to any one occurrence, and of not less than $3,000,000.00 for property damage in
any one occurrence.
10. RECONSTRUCTION
10.1 Obligation to Repair. In the event of any damage to the Leased
Premises, Tenant shall promptly notify Landlord in writing thereof. If the
Leased Premises or any part of the Building are damaged by fire or other
casualty, the damage to the Building and/or the Leased Premises shall be
repaired by and at the expense of Landlord, excluding any alterations or
improvements made by Tenant (including, without limitation, the Tenant
Improvement Work), unless this Lease is terminated in accordance with the
provisions of Article 10.2 below. Until such repairs by Landlord are completed,
Basic Rent and Additional Rent shall be abated in proportion to the part of the
Leased Premises which is unusable by Tenant in the conduct of its business.
Notwithstanding anything to the contrary contained herein, if such damage is due
in whole or in part to the fault or neglect of Tenant, or any subtenant of
Tenant, or any of their respective agents, employees, servants, contractors or
invitees, there shall be no abatement of Basic Rent or Additional Rent and
Tenant shall be required to repair all such damage at its sole cost and expense.
There shall be no abatement of Basic Rent or Additional Rent on account of
damage to the Building or the Property unless there is also damage to the Leased
Premises.
10.2 Cancellation Option. If the damage is not fully covered by
Landlord's insurance, or if Landlord determines in good faith that the cost of
repairing the damage is more than one-third of the then-replacement cost of the
Building, or if Landlord has determined in good faith that the required
repairs to the Building cannot be made within 120 days of the date of the damage
without the payment of overtime and other premiums, or in the event a Superior
Mortgagee requires that all or any portion of the insurance proceeds be applied
in reduction of the mortgage debt, or if such damage occurs during the final
year of the Lease Term, then Landlord may, by written notice to Tenant within 60
days after the occurrence of such damage, terminate this Lease as of the date
set forth in Landlord's notice to Tenant. If Landlord does not elect to
terminate this Lease, Landlord shall, at its sole cost and expense, repair the
Building and the Leased Premises, and while such repair work is being performed,
the Basic Rent and Additional Rent shall be abated as provided above. Nothing in
this Article shall be construed as a limitation of Tenant's liability for any
such damage, should such liability otherwise exist.
In the event that damage or destruction of the Leased Premises (which
for purposes of this paragraph only shall mean the Leased Premises and any areas
of the Building necessary for Tenant's use and enjoyment of the Leased Premises)
shall (a) not be repaired by Landlord within 9 months after the date that
Landlord shall receive all of the insurance proceeds in connection with such
damage or destruction or (b) occur during the last 6 months of the initial term
hereof or the last 6 months of any extension term, Tenant shall have the right
to terminate this Lease by giving Landlord written notice thereof, which notice
must be served no later than 30 days after the date that such right to terminate
shall arise.
10.3 Reconstruction. Landlord's obligation to reconstruct the
Leased Premises shall be only to the comparable condition of the Leased Premises
immediately prior to the Commencement Date. Landlord's obligation to repair and
reconstruct the Leased Premises shall be limited to the amount of net proceeds
of insurance received by Landlord, subject to reduction by a Superior Mortgagee.
Tenant, at Tenant's sole cost and expense, shall be responsible for the repair
and restoration of all items of the Tenant Improvement Work or Tenant's
improvements and/or alterations installed pursuant to Article 7 and the
replacement of Tenant's stock in trade, trade fixtures, furniture, finishings
and equipment. Tenant shall commence the installation of fixtures, equipment and
merchandise promptly upon delivery to Tenant of possession of the Leased
Premises and shall diligently prosecute such installation to completion.
10.4 Waiver. Tenant hereby waives any statutory and common law
rights of termination which may arise by reason of any partial or total
destruction of the Leased Premises which Landlord is obligated to restore or may
restore under any of the provisions of this Lease, including the provisions of
ARS Section 33-343.
11. WAIVER OF SUBROGATION
Anything in this Lease to the contrary notwithstanding, Landlord and
Tenant each hereby waive any and all rights of recovery, claim, action or cause
of action, against the other, its agents, officers, or employees, for any loss
or damage that may occur to the Leased Premises, or any improvements thereto, or
the Building or any improvements thereto, or any personal property of such party
therein, by reason of fire, the elements, or any other cause which is insured
against under the terms of standard fire and extended coverage insurance
policies required to be maintained according to this Lease, regardless of cause
or origin, including negligence of the other party hereto, its agents, officers
or employees, and covenants that no insurer shall hold any right of subrogation
against such other party.
12. LANDLORD'S RIGHT TO PERFORM TENANT OBLIGATIONS
All covenants and agreements to be performed by Tenant under any of the
terms of this Lease shall be performed by Tenant at Tenant's sole cost and
expense and without any abatement of Basic Rent or Additional Rent. If Tenant
shall fail to pay any sum of money, other than Basic Rent, required to be paid
by it hereunder, or shall fail to perform any other act on its part to be
performed hereunder, and such failure shall continue for seven (7) days after
notice thereof by Landlord, Landlord may (but shall not be obligated to do so)
without waiving or releasing Tenant from any of Tenant's obligations, make any
such payment or perform any such other act on behalf of Tenant. All sums so paid
by Landlord and all necessary incidental costs, together with interest thereon
at the greater of (a) 16% per annum or (b) the rate of interest per annum
publicly announced, quoted or published, from time to time, by Bank of America,
at its Phoenix, Arizona office as its "reference rate" plus 4 percentage points,
from the date of such payment by Landlord until reimbursement in full by Tenant
(the "Interest Rate"), shall be payable to Landlord as Additional Rent with the
next monthly installment of Basic Rent; provided, however, in no event shall the
Interest Rate exceed the maximum rate (if any) permitted by applicable law.
13. DEFAULT AND REMEDIES
13.1 Event of Default. The occurrence of any one or more of the
following events will constitute an "Event of Default" on the part of Tenant:
(a) Failure to pay all or any installment of Basic Rent when due;
provided however, that Tenant's failure to pay Basic Rent when due shall not be
deemed an Event of Default if Tenant cures such failure by the payment of such
Basic Rent within five (5) days of written notice from Landlord, and such
failure and subsequent cure does not occur more than twice in any twelve (12)
month period.
(b) Failure to pay any Additional Rent or other payments required
to be paid by Tenant under this Lease as the same becomes due, and such failure
shall continue for seven (7) days after delivery of written notice to Tenant of
such failure;
(c) Failure to perform any of the other covenants or conditions
which Tenant is required to observe and perform (except failure in the payment
of Basic Rent, Additional Rent or any other monetary obligation contained in
this Lease) and such failure shall continue for 30 days (or such shorter period
of time as may be specified by Landlord in the event of an emergency) after
written notice thereof by Landlord to Tenant, provided that if such default is
other than the payment of money and cannot be cured within such 30 day period,
then an Event of Default shall not have occurred if Tenant, within such 30 day
period, commences curing of such failure and diligently in good faith prosecutes
the same to completion and furnishes evidence thereof to Landlord within 30 days
thereafter;
(d) If any warranty, representation or statement made by Tenant to
Landlord in connection with this Lease is or was materially false or misleading
when made or furnished;
(e) If Tenant makes a bulk sale of its goods located on the Leased
Premises;
(f) The levy of a writ of attachment or execution or other
judicial seizure of substantially all of Tenant's assets or its interest in this
Lease, such attachment, execution or other seizure remaining undismissed or
discharged for a period of 30 days after the levy thereof;
(g) The filing of any petition by or against Tenant or any
Guarantor to declare Tenant or any Guarantor a bankrupt or to delay, reduce or
modify Tenant's or any Guarantor's debts or obligations, which petition is not
discharged within forty 45 days after the date of filing;
(h) The filing with a court of any petition or other court action
taken to reorganize or modify Tenant's or any Guarantor's capital structure,
which petition is not discharged within 45 days after the date of filing;
(i) If Tenant or any Guarantor shall be declared insolvent
according to law;
(j) A general assignment by Tenant or any Guarantor for the
benefit of creditors;
(k) The appointment of a receiver or trustee for Tenant or any
Guarantor or all or any of their respective property, which appointment is not
discharged within 45 days after the date of filing;
(l) The filing by Tenant or any Guarantor of a voluntary petition
pursuant to the Bankruptcy Code or any successor thereto or the filing of an
involuntary petition against Tenant or any Guarantor pursuant to the Bankruptcy
Code or any successor legislation, which petition is not discharged within 45
days after the date of filing; or
(m) The occurrence of an Event of Default under the other
provisions of this Lease.
13.2 Remedies. Upon the occurrence of an Event of Default under
this Lease by Tenant, Landlord may, without prejudice to any other rights and
remedies available to a Landlord at law, in equity or by statute, exercise one
or more of the following remedies, all of which shall be construed and held to
be cumulative and non-exclusive: (a) terminate this Lease and re-enter and take
possession of the Leased Premises, in which event Landlord is authorized to make
such repairs, redecorating, refurbishment or improvements to the Leased Premises
as may be necessary in the reasonable opinion of Landlord acting in good faith
for the purposes of reletting the Leased Premises and the costs and expenses
incurred in respect of such repairs, redecorating and refurbishment and the
expenses of such reletting (including brokerage commissions) shall be paid by
Tenant to Landlord within 5 days after receipt of Landlord's statement; or (b)
without terminating this Lease, re-enter and take possession of the Leased
Premises; or (c) without such re-entry, recover possession of the Leased
Premises in the manner prescribed by any statute relating to summary process,
and any demand for Basic Rent, re-entry for condition broken, and any and all
notices to quit, or other formalities of any nature to which Tenant may be
entitled, are hereby specifically waived to the extent permitted by law; or (d)
without terminating this Lease, Landlord may relet the Leased Premises as
Landlord may see fit without thereby avoiding or terminating this Lease, and for
the purposes of such reflecting, Landlord is authorized to make such repairs,
redecorating, refurbishments or improvements to the Leased Premises as may be
necessary in the reasonable opinion of Landlord acting in good faith for the
purpose of such reletting, and if a sufficient sum is not realized from such
reletting (after payment of all costs and expenses of such repairs, redecorating
and refurbishments and expenses of such reflecting (including brokerage
commissions) and the collection of rent accruing therefrom) each month to equal
the Basic Rent and Additional Rent payable hereunder, then Tenant shall pay such
deficiency each month within 5 days after receipt of Landlord's statement; or
(e) Landlord may declare immediately due and payable all the remaining
installments of Basic Rent and Additional Rent and all amounts previously
provided to Tenant in the form of "free rent", and such amount, less the fair
rental value of the Leased Premises for the remainder of the Lease Term, shall
be paid by Tenant within 5 days after receipt of Landlord's statement. Landlord
shall not by re-entry or any other act, be deemed to have terminated this Lease,
or the liability of Tenant for the total Basic Rent and Additional Rent reserved
hereunder or for any installment thereof then due or thereafter accruing, or for
damages, unless Landlord notifies Tenant in writing that Landlord has so elected
to terminate this Lease. After the occurrence of an Event of Default, the
acceptance of Basic Rent or Additional Rent, or the failure to re-enter by
Landlord, shall not be deemed to be a waiver of
Landlord's right to thereafter terminate this Lease and exercise any other
rights and remedies available to it, and Landlord may re-enter and take
possession of the Leased Premises as if no Basic Rent or Additional Rent had
been accepted after the occurrence of an Event of Default. Upon an Event of
Default, Tenant shall also pay to Landlord all costs and expenses incurred by
Landlord, including court costs and attorneys' fees, in retaking or otherwise
obtaining possession of the Leased Premises, removing and storing all equipment,
fixtures and personal property on the Leased Premises and otherwise enforcing
any of Landlord's rights and remedies arising as a result of an Event of
Default. Notwithstanding anything to the contrary contained herein, Landlord
shall make commercially reasonable efforts to relet the Leased Premises in the
event Landlord shall recover possession of the Leased Premises pursuant to an
Event of Default by Tenant.
13.3 Additional Remedies. All of the remedies given to Landlord in
this Lease in the event Tenant commits an Event of Default are in addition to
all other rights or remedies available to a landlord at law, in equity or by
statute, including, without limitation, the right to seize and sell all goods,
equipment and personal property of Tenant located in the Leased Premises and
apply the proceeds thereof to all due and unpaid Basic Rent, Additional Rent and
other amounts owing under the Lease. All rights, options and remedies available
to Landlord shall be construed and held to be cumulative, and no one of them
shall be exclusive of the other. Upon the occurrence of an Event of Default, all
rights, privileges and contingencies which may be exercised by Tenant under the
Lease, including, without limitation, options to renew, extend and expand, as
well as relocation rights, contraction rights and any other rights which may be
exercised by Tenant during the Lease Term, shall be void and of no further force
and effect.
13.4 Interest on Past Due Amounts. In addition to the late charge
described in Article 14 below, if any installment of Basic Rent or Additional
Rent is not paid promptly when due, it shall bear interest at the Interest Rate
from the date due; provided, however, this provision shall not relieve Tenant
from any default in the making of any payment at the time and in the manner
required by this Lease.
13.5 Default by Landlord. Landlord shall be in default in the
performance of any obligations required to be performed by Landlord under the
Lease if Landlord has failed to perform such obligation within 30 days after the
receipt of notice from Tenant specifying in detail Landlord's failure to
perform; provided, however, that if the nature of Landlord's obligation is such
that more than 30 calendar days are required for its performance, Landlord shall
not be deemed in default if it shall commence such performance within 30 days
and thereafter diligently pursues the same to completion.
14. LATE PAYMENTS
Tenant hereby acknowledges that the late payment by Tenant to Landlord
of any monthly installment of Basic Rent, any Additional Rent or any other sums
due hereunder will cause Landlord to incur costs not contemplated by 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 monthly installment of Basic Rent, any
Additional Rent or any other sum due from Tenant shall not be received by
Landlord, on or before the fifth (5th) day of the month which it is due, Tenant
shall pay to Landlord a late charge equal to 10% of such overdue amount or
$250.00, whichever is greater. Tenant acknowledges that such late charge
represents a fair and reasonable estimate of the costs Landlord will incur by
reason of late payments by Tenant. Neither assessment nor acceptance of a late
charge by Landlord shall constitute a waiver of Tenant's default by Landlord
with respect to such overdue amount, nor prevent Landlord from exercising any of
the other rights and remedies available to Landlord hereunder.
15. ABANDONMENT AND SURRENDER
15.1 Abandonment. No act or thing done by Landlord or by any agent
or employee of Landlord during the Lease Term shall be deemed an acceptance of a
surrender of the Leased Premises unless such acceptance is expressed in writing
and duly executed by Landlord. Unless Landlord so agrees in writing, the
delivery of the key to the Leased Premises to any employee or agent of Landlord
shall not operate as a termination of this Lease or as a surrender of the Leased
Premises.
15.2 Surrender. Tenant shall, upon the expiration or earlier
termination of this Lease, peaceably surrender the Leased Premises, including
the Tenant Improvement Work and Tenant's improvements and/or alterations
installed pursuant to Article 7, in a janitorial clean condition and otherwise
in as good condition as when Tenant took possession, except for (i) reasonable
wear and tear subsequent to the last repair, replacement, restoration,
alteration or renewal; (ii) loss by fire or other casualty, and (iii) loss by
condemnation. Landlord may, however, elect to remove all or any part of such
personal property from the Leased Premises, and the costs incurred by Landlord
in connection with such removal, including storage costs and the cost of
repairing any damage to the Leased Premises, the Building and/or the Property
caused by such removal shall be paid by Tenant within 5 days after receipt of
Landlord's statement. Upon the expiration or earlier termination of this Lease,
Tenant shall surrender to Landlord all keys to the Leased Premises and shall
inform Landlord of the combination of any vaults, locks and safes left on the
Leased Premises. The obligations of Tenant under this Article shall survive the
expiration or earlier termination of this Lease. Tenant shall indemnify Landlord
against any loss or liability resulting from delay by Tenant in so surrendering
the Premises, including, without limitation, any claims made by any succeeding
Tenant founded on such delay. Tenant shall give written notice to Landlord at
least 30 days prior to vacating the Leased Premises for the express purpose of
arranging a meeting with Landlord for a joint inspection of the Leased Premises.
In the event of Tenant's failure to give such notice or to participate in such
joint inspection, Landlord's inspection at or after Tenant's vacation of the
Leased Premises shall be conclusively deemed correct for purposes of determining
Tenant's liability for repairs and restoration hereunder.
16. INDEMNIFICATION AND EXCULPATION
16.1 Tenant Indemnity. Tenant shall indemnify, protect, defend and
hold Landlord harmless for, from and against, and shall be responsible for, all
claims, damages, losses, costs, liens, encumbrances, liabilities and expenses,
including, without limitation, reasonable attorneys', accountants' and
investigators' fees and court costs (collectively, the "Claims"), however
caused, arising out of or related to any actions, events or occurrences in the
Building, and shall further indemnify, protect, defend and hold Landlord
harmless for, from and against, and shall be responsible for, all Claims arising
in whole or in part from any breach or default in the performance of any
obligation on Tenant's part to be performed under the terms of this Lease. In
case any action or proceeding is brought against Landlord to which this
indemnification shall be applicable, Tenant shall pay all Claims resulting
therefrom and shall defend such action or proceeding, if Landlord shall so
request, at Tenant's sole cost and expense, by counsel reasonably satisfactory
to Landlord. The obligations of Tenant under this Article shall survive the
expiration or earlier termination of this Lease.
16.2 Landlord Indemnity. Landlord shall indemnify, protect, defend
and hold Tenant harmless for, from and against, and shall be responsible for,
all claims, damages, losses, costs, liens, encumbrances, liabilities and
expenses, including, without limitation, reasonable attorneys', accountants' and
investigators' fees and court costs (collectively, the "Claims"), however
caused, arising out of or
related to any actions, events or occurrences outside of the Building, and shall
further indemnify, protect, defend and hold Tenant harmless for, from and
against, and shall be responsible for, all Claims arising in whole or in part
from any breach or default in the performance of any obligation on Landlord's
part to be performed under the terms of this Lease. In case any action or
proceeding is brought against Tenant to which this indemnification shall be
applicable, Landlord shall pay all Claims resulting therefrom and shall defend
such action or proceeding, if Tenant shall so request, at Landlord's sole cost
and expense, by counsel reasonably satisfactory to Tenant. The obligations of
Landlord under this Article shall survive the expiration or earlier termination
of this Lease.
16.3 Waivers. To the fullest extent permitted by applicable law
Tenant waives all claims against Landlord for any damage or injury of any kind
to persons or property during the term of this Lease from any cause whatsoever,
including, but not limited to: (a) the use, occupancy and enjoyment of the
Leased Premises by Tenant; (b) the acts or failure to act of any party or
parties entering the Land, Building or Leases Premises; (c) the acts, or failure
to act of any other tenant or such other tenant's officer, agents, invitees or
other parties contracting with them; (d) the condition or design of the
Building; (e) the Building becoming out of repair; (f) the failure of or defect
in any mechanical equipment in the Building; or (g) the leaking of gas, oil,
steam, or water. All property of every kind which may be on the Leased Premises
during the term of the Lease shall be at the sole risk of Tenant, and Landlord
shall not be liable for any loss or damage thereto.
16.4 Limitations and Liability. Notwithstanding anything to the
contrary in this Lease, Landlord and Tenant agree that: Neither Landlord nor its
officers, employees, contractors, property manager, consultants, or agents will
be liable and Tenant hereby waives and releases all claims, causes of action, or
other rights of recovery it may ever have against Landlord or its officers,
employees, contractors, property manager, consultants and agents for (i) theft
or other crimes or similar misconduct on the Property by persons other than
Landlord and its officers, employees, contractors, property manager, consultants
and employees; (ii) any consequential, exemplary, punitive, or other special
damages of any kind or nature. Tenant also agrees to look solely to Landlord's
interest in the property for the recovery of any damages or other sums of money
that Landlord may ever owe Tenant under or in connection with this Lease or the
Property, and Landlord and its members will never be personally liable for
payment of any such damages or other sums of money, or any judgment therefor.
17. ENTRY BY LANDLORD
Landlord reserves and shall at all reasonable times and after
reasonable notice (except in an emergency, where no notice shall be required)
have the right to enter the Leased Premises to inspect the same, to supply
janitorial service and other services to be provided by Landlord to Tenant
hereunder, to submit the Leased Premises to prospective purchasers or tenants,
to post notices of non-responsibility, and to alter, improve or repair the
Leased Premises and any portion of the Building of which the Leased Premises are
a part, without abatement of Basic Rent or Additional Rent, and may for that
purpose erect scaffolding and other necessary structures where reasonably
required by the character of the work to be performed, always providing that
access into the Leased Premises shall not be blocked thereby, and further
providing that the business of Tenant shall not be interfered with unreasonably.
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 or any loss occasioned thereby except caused by Landlord's
gross negligence or intentional misconduct. Entry by Landlord 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 all or
any portion of the Leased Premises. Nothing in this Article shall be construed
as obligating Landlord to perform any repairs, alterations or maintenance except
as otherwise expressly required elsewhere in this Lease.
18. ASSIGNMENT AND SUBLETTING
18.1 Consent of Landlord Required. Tenant shall not transfer or
assign this Lease or any right or interest hereunder, or sublet the Leased
Premises or any part thereof, without first obtaining Landlord's prior written
consent, which consent shall not be unreasonably withheld. No transfer or
assignment (whether voluntary or involuntary, by operation of law or otherwise)
or subletting shall be valid or effective without such prior written consent.
Should Tenant attempt to make or allow to be made any such transfer, assignment
or subletting (collectively, a "Transfer"), except as aforesaid, or should any
of Tenant's rights under this Lease be sold or otherwise transferred by or under
court order or legal process or otherwise, then, and in any of the foregoing
events Landlord may, at its option, treat such act as an Event of Default by
Tenant. Should Landlord consent to a Transfer, such consent shall not constitute
a waiver of any of the restrictions or prohibitions of this Article, and such
restrictions or prohibitions shall apply to each successive Transfer hereunder,
if any.
18.2 Permitted Transfers. Notwithstanding anything to the contrary
contained in Section 18.1, without Landlord's consent and without triggering any
termination right or recapture right or any obligation to pay Landlord any other
fee or charge, Tenant shall have the right to assign the Lease or to sublet all
or a portion of the Leased Premises to any entity controlled by, or under common
control with Tenant, or in connection with a merger, consolidation or sale of
all or substantially all of Tenant's assets, as long as the use is for general
office purposes. Transfers made pursuant to this Section 18.2 and as permitted
by Section 18.3(c)(x), (y) and (z) are hereinafter called "Permitted Transfers",
and Tenant shall promptly give Landlord written notice of same.
18.3 Deemed Transfers. For the purposes of this Section 18, a
Transfer shall be deemed to include (without limitation) the following: (a) if
Tenant is a partnership, a withdrawal or change (voluntary, involuntary, by
operation of law or otherwise) of any of the partners thereof a purported
assignment, transfer, mortgage or encumbrance (voluntary, involuntary, by
operation of law or otherwise) by any partner thereof of such partner's interest
in Tenant, or the dissolution of the partnership; (b) if Tenant consists of more
than one person, a purported assignment, transfer, mortgage or encumbrance
(voluntary, involuntary, by operation of law or otherwise) from one person to
the other or others; (c) if Tenant is a corporation or a limited liability
company, the occurrence of any of the following events: (i) the acquisition of
ownership by a person, firm or corporation, or a group acting in concert, of
more than fifty percent (50%) of the outstanding voting securities of the Tenant
in a single
transaction or a series of related transactions within a one-year period; (ii) a
sale of all or substantially all of the assets of the Tenant to any person, firm
or corporation; or (iii) a merger, share exchange, reorganization or other
business combination; provided, however, that none of the following will be
deemed a transfer: (x) any event described in clauses (i) or (iii) involving any
of the equity owners of the Tenant as of the date set forth in Article 1 above
(or any entity Affiliated (as defined below) with any such equity owners of the
Tenant); (y) any sale of securities by and for the account of the Tenant or any
of its Affiliates pursuant to an underwritten public offering registered under
the Securities Act of 1933, regardless of the magnitude in the change in equity
ownership resulting therefrom; or (z) a merger, share exchange, reorganization
or other business combination in the event that the equity owners of the Tenant
(or its Affiliates) immediately prior to any such business combination hold at
least a majority of the voting securities of the surviving entity resulting from
such business combination or in the event that the surviving entity resulting
from any such business combination has a financial condition at least equal to
that of the Tenant immediately prior to any such business combination; (d) if
Tenant is an unincorporated association, a purported assignment, transfer,
mortgage or encumbrance (voluntary, involuntary, by operation of law or
otherwise) of any interest in such unincorporated association; or (e) the sale,
at any time, of 20% or more in the then value of the assets of Tenant not in the
ordinary course of business. As used in this Section 18, (x) an "Affiliate" of,
or a person "Affiliated" with, a specified person, is a person that directly, or
indirectly, through one or more intermediaries, controls, or is controlled by or
is under common control with, the person specified, and (y) the term "control"
(including the terms "controlling," "controlled by," and "under common control
with") means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a person, whether through
the ownership of voting securities, by contract or otherwise.
18.4 Delivery of Information. Except for Permitted Transfers, if
Tenant wishes at any time to Transfer the Lease Premises or any portion thereof,
it shall first notify Landlord of its desire to do so and shall submit in
writing to Landlord: (a) the name of the proposed subtenant or assignee; (b) the
nature of the proposed subtenant's or assignee's business to be carried on in
the Leased Premises; (c) the terms and the provisions of the proposed sublease
or assignment; and (d) such financial information as Landlord may reasonably
request concerning the proposed subtenant or assignee.
18.5 Recapture. If Tenant proposes to Transfer its interest in all
or any part of the Leased Premises, Landlord may, at its option, upon written
notice to Tenant within 30 days after Landlord's receipt of the information
specified in Article 18.4 above, elect to recapture all or any portion of the
Leased Premises, and within 60 days after notice of such election has been given
to Tenant, this Lease shall terminate as to the portion of the Leased Premises
recaptured. If all or a portion of the Leased Premises is recaptured by Landlord
pursuant to this Article 18.5, Tenant shall promptly execute and deliver to
Landlord a termination agreement setting forth the termination date with respect
to the Leased Premises or the recaptured portion thereof, and prorating the
Basic Rent, Additional Rent and other charges payable hereunder to such date. If
Landlord does not elect to recapture as set forth above, Tenant may thereafter
enter into a valid assignment or sublease with respect to the Leased Premises,
provided that Landlord consents thereto pursuant to this Article 18.5, and
provided further, that (a) such assignment or sublease is executed within 90
days after Landlord has given its consent, (b) Tenant pays all amounts then owed
to Landlord under this Lease, (c) there is not in existence an Event of Default
as of the effective date of the Transfer, (d) there have been no material
changes with respect to the financial condition of the proposed subtenant or
assignee or the business such party intends to conduct in the Leased Premises,
and (e) a fully executed original of such assignment or sublease providing for
an express assumption by the assignee or subtenant of all of the terms,
covenants and conditions of this Lease is promptly delivered to Landlord. In the
event that Landlord does not elect to recapture as provided herein, Tenant shall
remit to Landlord 50% of Tenant's profit derived from such Transfer. For
purposes of the foregoing, profit shall be deemed to include, without
limitation, the amount of all rent
payable by such assignee, transferee or sublessee in excess of the Basic Rent
and Additional Rent payable by Tenant under this Lease less Tenant's reasonable
marketing costs and commissions paid in connection with such transfer, if any.
If a part of the consideration for such Transfer shall be payable other than in
cash, the payment to Landlord shall be in cash for its share of any non-cash
consideration based upon the fair market value thereof.
18.6 No Release from Liability. Landlord may collect Basic Rent and
Additional Rent from the assignee, subtenant, occupant or other transferee, and
apply the amount so collected, first to the monthly installments of Basic Rent,
then to any Additional Rent and other sums due and payable to Landlord, and the
balance, if any, to Landlord, but no such subletting, occupancy, transfer or
collection shall be deemed a waiver of Landlord's rights under this Article, or
the acceptance of the proposed assignee, subtenant, occupant or transferee.
Notwithstanding any Transfer (with or without the consent of Landlord), Tenant
shall remain primarily liable under this Lease and shall not be released from
performance of any of the terms, covenants and conditions of this Lease.
18.7 Landlord's Expenses. If Landlord consents to the Transfer by
Tenant of all or any portion of Tenant's interest under this Lease, Tenant shall
reimburse Landlord for Landlord's reasonable administrative expenses and for
legal, accounting and other out of pocket expenses incurred by Landlord in
connection with such Transfer by Tenant.
18.8 Assumption Agreement. If Landlord consents to a Transfer by
Tenant of all or any portion of Tenant's interest under this Lease, Tenant shall
execute and deliver to Landlord, and cause the transferee to execute and deliver
to Landlord, an instrument in the form and substance reasonably acceptable to
Landlord in which (a) the transferee adopts this Lease and assumes and agrees to
perform, jointly and severally with Tenant, all of the obligations of Tenant
hereunder, (b) Tenant acknowledges that it remains primarily liable for the
payment of Basic Rent, Additional Rent and other obligations under this Lease,
(c) Tenant subordinates to Landlord's statutory lien, contract lien and security
interest, any liens, security interests or other rights which Tenant may claim
with respect to any property of transferee and (d) the transferee agrees to use
and occupy the Leased Premises solely for the purpose specified in Article 1 and
otherwise in strict accordance with this Lease.
19. USE OF LEASED PREMISES
19.1 Use. The Leased Premises are leased to Tenant solely for the
Permitted Use set forth in Article 1 above and for no other purpose whatsoever.
Tenant shall not use or occupy or permit the Leased Premises to be used or
occupied, nor shall Tenant do or permit anything to be done in or about the
Leased Premises nor bring or keep anything therein which will in any way
increase the existing rate of or affect any casualty or other insurance on the
Building or the Property, or any of their respective contents, or make void or
voidable or cause a cancellation of any insurance policy covering the Building
or the Property, or any part thereof or any of their respective contents. Tenant
shall not do or permit anything to be done in or about the Leased Premises, the
Building and/or the Property which will in any way obstruct or interfere with
the rights of other tenants or occupants of the Building or the Property and
Tenant will not in any way pass out flyers or any promotional material to any
individual or automobile that may be on the Property at any time. Tenant shall
not use or allow the Leased Premises to be used for any improper, immoral,
unlawful or objectionable purpose, nor shall Tenant cause, maintain or permit
any nuisance in, on or about the Leased Premises, the Building and/or the
Property. In addition, Tenant shall not commit or suffer to be committed any
waste in or upon the Leased Premises, the Building and/or the Property. Tenant
shall not use the Leased Premises, the Building and/or the Property, or permit
anything to be done in or about the Leased Premises, the Building and/or the
Property which will in any way conflict with any matters of record, or any law,
statute, ordinance or governmental rule or regulation now in force or which may
hereafter be enacted or promulgated, and shall, at its sole cost and expense,
promptly comply with all matters of record and all laws, statutes, ordinances
and governmental rules, regulations and requirements now in force or which may
hereafter be in force and with the requirements of any Board of Fire
Underwriters or other similar body now or hereafter constituted, foreseen or
unforeseen, ordinary as well as extraordinary, relating to or affecting the
condition, use or occupancy of the Property, excluding structural changes not
relating to or affected by Tenant's improvements or acts. The judgment of any
court of competent jurisdiction or the admission by Tenant in any action against
Tenant, whether Landlord be a party thereto or not, that Tenant has violated any
matters of record, or any law, statute, ordinance or governmental rule,
regulation or requirement, shall be conclusive of that fact between Landlord and
Tenant. In addition, Tenant shall not place a load upon any floor of the Leased
Premises which exceeds the load per square foot which the floor was designed to
carry, nor shall Tenant install business machines or other mechanical equipment
in the Leased Premises which cause noise or vibration that may be transmitted to
the structure of the Building.
19.2 Rubbish Removal. Tenant shall keep the Leased Premises clean,
both inside and outside. Tenant shall not burn any materials or rubbish of any
description upon the Leased Premises. Tenant shall keep all accumulated rubbish
in covered containers. In the event Tenant fails to keep the Leased Premises in
the proper condition, Landlord may cause the same to be done for Tenant and
Tenant shall pay the expenses incurred by Landlord on demand, together with
interest at the Interest Rate, as Additional Rent. Tenant shall, at its sole
cost and expense, comply with all present and future laws, orders and
regulations of all state, county, federal, municipal governments, departments,
commissions and boards regarding the collection, sorting, separation, and
recycling of waste products, garbage, refuse and trash. Landlord reserves the
right to refuse to collect or accept from Tenant any waste products, garbage,
refuse or trash that is not separated and sorted as required by law, and to
require Tenant to arrange for such collection at Tenant's sole cost and expense
using a contractor reasonably satisfactory to Landlord. Tenant shall pay all
costs, expenses, fees, penalties or damages that may be imposed on Landlord or
Tenant by reason of Tenant's failure to comply with the provisions of this
Article.
20. SUBORDINATION AND ATTORNMENT
20.1 Subordination. This Lease and all rights of Tenant hereunder
shall be, at the option of Landlord, subordinate to (a) all matters of record,
(b) all ground leases, overriding leases and underlying leases (collectively
referred to as the "Leases") of the Building or the Property now or hereafter
existing, (c) all mortgages and deeds of trust (collectively referred to as the
"mortgages") which may now or hereafter encumber or affect the Building or the
Property, and (d) all renewals, modifications, amendments, replacements and
extensions of leases and mortgages and to spreaders and consolidations of the
mortgages, whether or not leases or mortgages shall also cover other lands,
buildings or leases. The provisions of this Article shall be self-operative and
no further instruments of subordination shall be required. In confirmation of
such subordination, Tenant shall promptly execute, acknowledge and deliver any
instrument that Landlord, the lessor under any lease or the holder of any
mortgage or any of their respective assigns or successors in interest may
reasonably request to evidence such subordination. Any lease to which this Lease
is subject and subordinate is called a "Superior Lease" and the lessor under a
Superior Lease or its assigns or successors in interest is called a "Superior
Lessor". Any mortgage to which this Lease is subject and subordinate is called a
"Superior Mortgage" and the holder of a Superior Mortgage is called a "Superior
Mortgagee". If Landlord, a Superior Lessor or a Superior Mortgagee requires that
such instruments be executed by Tenant, Tenant's failure to do so within seven
(7) business days after request therefor shall be deemed an Event of Default
under this Lease. Tenant waives any right to terminate this Lease because of any
foreclosure proceedings.
Notwithstanding the foregoing, Landlord shall use reasonable efforts to
obtain a non-disturbance agreement from Landlord's current Superior Mortgagee
within 30 days after execution of the Lease stating that Tenant's right of
possession will not be disturbed by such Superior Mortgagee (or by any
subsequent transferee of the Landlord's interest) in connection with any
enforcement of such party's rights so long as Tenant performs its obligations
set forth in the Lease, and that Tenant shall attorn to such Superior Mortgagee
or purchaser whether the latter takes title by foreclosure, trustee's sale, deed
transfer, or otherwise.
20.2 Attornment. If any Superior Lessor or Superior Mortgagee (or
any purchaser at a foreclosure sale) succeeds to the rights of Landlord under
this Lease, whether through possession or foreclosure action, or the delivery of
a new lease or deed (a "Successor Landlord"), Tenant shall attorn to and
recognize such Successor Landlord as Tenant's landlord under this Lease and
shall promptly execute and deliver any instrument that such Successor Landlord
may reasonably request to evidence such attornment; provided, however, that
Tenant shall receive from Successor Landlord a commercially reasonable agreement
stating that Tenant shall have quiet possession of the Leased Premises and that
the Successor Landlord shall perform all of Landlord's obligations and shall
honor this Lease as long as Tenant is not in default hereunder.
21. ESTOPPEL CERTIFICATE
Tenant shall within ten (10) days after written request by Landlord,
execute, acknowledge and deliver to Landlord a statement in writing certifying:
(a) 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); (b) the dates to which
Basic Rent, Additional Rent and other charges are paid in advance, if any; (c)
that there are not, to Tenant's knowledge, any uncured defaults on the part of
Landlord hereunder or specifying such defaults if any are claimed; (d) that
Tenant has paid Landlord the Security Deposit (if any); (e) the Commencement
Date and the scheduled expiration date of the Lease Term; (f) the rights (if
any) of Tenant to extend or renew this Lease or to expand the Leased Premises;
(g) the amount of Basic Rent, Additional Rent and other charges currently
payable under this Lease; and (h) any other matters as reasonably requested by
Landlord. Any such statement may be relied upon by any prospective or existing
purchaser, ground lessee or mortgagee of all or any portion of the Property, as
well as by any other assignee of Landlord's interest in this Lease. Tenant's
failure to deliver such statement within such time shall be conclusive upon
Tenant (i) that this Lease is in full force and effect, without modification
except as may be represented by Landlord; (ii) that there are no uncured
defaults in Landlord's performance hereunder; (iii) that Tenant has paid to
Landlord the Security Deposit; (iv) that not more than one month's installment
of Basic Rent or Additional Rent has been paid in advance; (v) that the
Commencement Date and the scheduled expiration date of the Lease Term are as
stated therein; (vi) that Tenant has no rights to extend or renew this Lease or
to expand the Leased Premises; (vii) that the Basic Rent, Additional Rent and
other charges are as set forth therein and (viii) that the other information and
facts set forth therein are true and correct. Landlord may also elect to treat
Tenant's failure to provide the Estoppel Certificate within 20 days as an Event
of Default.
22. SIGNS
Landlord shall control the exterior appearance of the Building and the
exterior appearance of the Leased Premises at all times. Tenant shall 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 Building Common Areas or the exterior of the Building without Landlord's
prior written consent, which consent may be withheld in Landlord's sole and
absolute discretion. Landlord may relocate, alter or remove, at Landlord's cost,
any exterior signage previously approved by Landlord. In no event may Tenant
utilize trucks, automobiles or other vehicles on the Property for signage
purposes. Landlord shall install, at Tenant's sole cost and expense, letters or
numerals using graphics standard for the Building to identify the Leased
Premises at or near the entryway to the Leased Premises. In addition, Landlord
shall install, at Landlord's sole cost and expense, Tenant's name and suite
number on the Building directory; provided, however, any additions, deletions or
other modifications to the Building directory shall be at Tenant's sole cost and
expense. All signs shall comply with the Landlord's sign criteria.
Subject to Landlord's approval of Tenant's signage package and provided
that Tenant's signs are constructed and situated in accordance with applicable
City of Phoenix regulations, Tenant may place maximum amount of signage on the
Building as may be permitted by applicable municipal authority.
23. PARKING
23.1 Parking Areas. Tenant shall have sole and exclusive use of the
parking areas located on the Project for the term of the Lease, and any
extensions thereof, together with necessary access thereto. No storage of
vehicles or parking for more than twenty-four (24) hours is allowed without
Landlord's prior written consent, which consent may be withheld in its sole and
absolute discretion. Tenant acknowledges and agrees that Landlord shall not be
liable for damage, loss or theft of property or injury to persons in, upon or
about the Parking Areas from any cause whatsoever, excluding Landlord's gross
negligence or intentional misconduct. Landlord shall have the right to
establish, and from time to time change, alter and amend, and to enforce against
all users of the Parking Areas, such reasonable requirements and restrictions as
Landlord deems necessary and advisable for the proper operation and maintenance
of the Parking Areas. Landlord may in its reasonable discretion reconfigure,
improve, or otherwise modify the Parking Area; provided, however, that any such
changes shall not decrease the number of parking spaces (including covered
spaces) designated for use by Tenant pursuant to Article 1 above without
Tenant's written consent thereto. In the event that Tenant shall violate any of
the terms of this Article, or any of the Rules and Regulations related to the
Parking Areas, Landlord may: (a) attach violation notices to such vehicle or
vehicles, (b) cause such vehicle(s) to be towed at Tenant's expense, or (c)
charge Tenant, as Additional Rent hereunder, $50.00 per violating vehicle.
Tenant hereby waives any liability of Landlord to Tenant resulting from the
exercise of (a) or (b) in the immediately preceding sentence and agrees to
indemnify and hold harmless Landlord from any claims by any of Tenant's
Employees in connection with the exercise of either (a) or (b) in the
immediately preceding sentence.
24. LIENS
Tenant shall keep the Leased Premises free and clear of all mechanic's
and materialmen's liens. If, because of any act or omission (or alleged act or
omission) of Tenant, any mechanics, materialmen's or other lien, charge or order
for the payment of money shall be filed or recorded against the Leased Premises,
the Property or the Building, or against any other property of Landlord (whether
or not such lien, charge or order is valid or enforceable as such), Tenant
shall, at its own expense, cause the same to be canceled or discharged of record
within 15 days after Tenant shall have received written notice of the filing
thereof, or Tenant may, within such 15 day period, furnish to Landlord, a bond
pursuant to A.R.S. ss. 33-1004 (or any successor statute) satisfactory to
Landlord and all Superior Lessors and Superior Mortgagees against the lien,
charge or order, in which case Tenant shall have the right to contest, in good
faith, the validity or amount thereof. Landlord may require Tenant to post
notices of non-responsibility or similar notices on the Leased Premises and
portions of the Building to provide notice that Tenant is solely responsible for
the payment of fees, costs and expenses incurred in connection with work on the
Leased Premises.
25. HOLDING OVER
It is agreed that the date of termination of this Lease and the right
of Landlord to recover immediate possession of the Leased Premises thereupon is
an important and material matter affecting the parties hereto and the rights of
third parties, all of which have been specifically considered by Landlord and
Tenant. In the event of any continued occupancy or holding over of the Leased
Premises without the express written consent of Landlord beyond the expiration
or earlier termination of this Lease or of Tenants right to occupy the Leased
Premises, whether in whole or in part, or by leaving property on the Leased
Premises or otherwise, this Lease shall be deemed a monthly tenancy and Tenant
shall pay 150% of the Basic Rent then in effect, in advance at the beginning of
the hold-over month(s), plus any Additional Rent or other charges or payments
contemplated in this Lease, and any other costs, expenses, damages, liabilities
and attorneys' fees incurred by Landlord on account of Tenant's holding over.
26. ATTORNEYS' FEES
In the event any action or proceeding brought by either party hereto
against the other based upon or arising out of the terms and conditions hereof,
the prevailing party shall be entitled to recover all costs and expenses,
including reasonable attorney's fees, from the other. In addition, Tenant agrees
to pay all costs and reasonable attorney's fees which may be incurred or paid by
Landlord in enforcing this Lease, with or without litigation, to the full extent
allowable by law, and all such amounts shall be deemed additional rent payable
upon demand.
27. RESERVED RIGHTS OF LANDLORD
Landlord reserves the following rights, exercisable without liability
to Tenant for damage or injury to property, persons or business and without
effecting an eviction, constructive or actual, or disturbance of Tenant's use or
possession or giving rise to any claim:
(a) To change the name or street address of the Building or the
Property if required to do so by the applicable governmental or judicial
authority;
(b) To exercise approval rights over all signs on the exterior of
the Building and the Property;
(c) To have pass keys to the Leased Premises and all doors
therein, excluding Tenant's vaults and safes;
(d) To require Tenant to remove any unusual or extraordinary
alterations to the Leased Premises (such as safes) at the expiration or earlier
termination of the Lease Term, provided that Landlord has given notice thereof
at the time that installation or alteration was approved by Landlord;
(e) On reasonable prior notice to Tenant, to exhibit the Leased
Premises to any prospective purchaser, mortgagee, or assignee of any mortgage on
the Building or the Property and to others having interest therein at any time
during the Lease Term, and to prospective Tenants during the last 6 months of
the Lease Term;
(f) To take any and all measures, including entering the Leased
Premises for the purposes of making inspections, repairs, alterations, additions
and improvements to the Leased Premises or to the Building (including, for the
purposes of checking, calibrating, adjusting and balancing controls and other
parts of the Building systems) as may be necessary or desirable for the
operation, improvement, safety, protection or preservation of the Leased
Premises or the Building, or in order to comply with all laws, orders and
requirements of governmental or other authorities, or as may otherwise be
permitted or required by this Lease; provided, however, that Landlord shall
endeavor (except in an emergency) to minimize interference with Tenant's
business in the Leased Premises;
(g) To temporarily close any or all portions of the Parking Areas
to such extent as may, in the opinion of Landlord's counsel, be legally
sufficient to prevent a dedication thereof or the accrual or any rights to any
person or to the public therein and to close temporarily, if necessary, any part
of the Parking Areas in order to discourage unauthorized parking therein.
Landlord further reserves the exclusive right to the roof of the
Building. No easement for light, air, or view is included in the leasing of the
Leased Premises to Tenant. Accordingly, any diminution or shutting off of light,
air or view by any structure which may be erected on the Property or other
properties in the vicinity of the Building shall in no way affect this Lease or
impose any liability upon Landlord.
28. EMINENT DOMAIN
28.1 Taking. If the whole of the Building is lawfully and
permanently taken by condemnation or any other manner for any public or
quasi-public purpose, or by deed in lieu thereof, this Lease shall terminate as
of the date of vesting of title in such condemning authority and the Basic Rent
and Additional Rent shall be pro rated to such date. If any part of the Building
or Property is so taken, or if the whole of the Building is taken, but not
permanently, then this Lease shall be unaffected thereby, except that (a)
Landlord may terminate this Lease by notice to Tenant within 90 days after the
date of vesting of title in the condemning authority, and (b) if 20% or more of
the Leased Premises shall be permanently taken and the remaining portion of the
Leased Premises shall not be reasonably sufficient for Tenant to continue
operation of its business, Tenant may terminate this Lease by notice to Landlord
within 90 days after the date of vesting of title in such condemning authority.
This Lease shall terminate on the 30th day after receipt by Landlord of such
notice, by which date Tenant shall vacate and surrender the Leased Premises to
Landlord. The Basic Rent and Additional Rent shall be pro rated to the earlier
of the termination of this Lease or such date as Tenant is required to vacate
the Leased Premises by reason of the taking. If this Lease is not terminated as
a result of a partial taking of the Leased Premises, the Basic Rent and
Additional Rent shall be equitably adjusted according to the rentable area of
the Leased Premises and Building remaining.
28.2 Award. In the event of a taking of all or any part of the
Building or the Property, all of the proceeds or the award, judgment, settlement
or damages payable by the condemning authority shall be and remain the sole and
exclusive property of Landlord, and Tenant hereby assigns all of its right,
title and interest in and to any such award, judgment, settlement or damages to
Landlord. Tenant shall, however, have the right, to the extent that the same
shall not reduce or prejudice amounts available to Landlord, to claim from the
condemning authority, but not from Landlord, such compensation as may be
recoverable by Tenant in its own right for relocation benefits, moving expenses,
and damage to Tenant's personal property and trade fixtures.
29. NOTICES
Any notice or communication given under the terms of this Lease shall
be in writing and shall be delivered in person, sent by express or overnight
courier or delivery service or deposited with the United States Postal Service,
certified or registered mail, return receipt requested, postage pre-paid,
addressed as set forth in the Basic Provisions, or at such other address as a
party may from time to time designate by notice hereunder. Notice shall be
effective upon delivery. The inability to deliver a notice because of a changed
address of which no notice was given or a rejection or other refusal to accept
any notice shall be deemed to be the receipt of the notice as of the date of
such inability to deliver or rejection or refusal to accept. Any notice to be
given by Landlord may be given by the legal counsel and/or the authorized agent
of Landlord.
30. RULES AND REGULATIONS
Tenant shall abide by all rules and regulations (the "Rules and
Regulations") of the Building and the Property imposed by Landlord and currently
existing as set forth on Exhibit "F" attached hereto or as may hereafter from
time to time be issued by Landlord. Such Rules and Regulations are imposed to
enhance the cleanliness, appearance, maintenance, order and use of the Leased
Premises, the Building and the Property, and the proper enjoyment of the
Building and the Property by all tenants and their clients, customers and
employees. The Rules and Regulations may be changed from time to time upon 10
days notice to Tenant. Breach of the Rules and Regulations by Tenant shall
constitute an Event of Default if such breach is not fully cured within 10 days
after written notice to Tenant by Landlord. Landlord shall not be responsible to
Tenant for nonperformance by any other tenant, occupant or invitee of the
Building or the Property of any Rules or Regulations.
31. ACCORD AND SATISFACTION
No payment by Tenant or receipt by Landlord of a lesser amount than the
monthly installment of Basic Rent and Additional Rent (jointly called "Rent" in
this Article 31), shall be deemed to be other than on account of the earliest
stipulated Rent due and not yet paid, nor shall any endorsement or statement on
any check or any letter accompanying any check or payment as Rent be deemed an
accord and satisfaction. Landlord may accept such check or payment without
prejudice to Landlord's right to recover the balance of such Rent or to pursue
any other remedy in this Lease. No receipt of money by Landlord from Tenant
after the termination of this Lease, after the service of any notice relating to
the termination of this Lease, after the commencement of any suit, or after
final judgment for possession of the Leased Premises, shall reinstate, continue
or extend the Lease Term or affect any such notice, demand, suit or judgment.
32. BANKRUPTCY OF TENANT
32.1 Chapter 7. If a petition is filed by, or an order for relief
is entered against Tenant under Chapter 7 of the Bankruptcy Code and the trustee
of Tenant elects to assume this Lease for the purpose of assigning it, the
election or assignment, or both, may be made only if all of the terms and
conditions of Articles 32.2 and 32.4 below are satisfied. If the trustee fails
to elect to assume this Lease for the purpose of assigning it within 60 days
after appointment, this Lease will be deemed to have been rejected. To be
effective, an election to assume this Lease must be in writing and addressed to
Landlord and, in Landlord's business judgment, all of the conditions hereinafter
stated, which Landlord and Tenant acknowledge to be commercially reasonable,
must have been satisfied. Landlord shall then immediately be entitled to
possession of the Premises without further obligation to Tenant or the trustee,
and this Lease will be terminated. Landlord's right to be compensated for
damages in the bankruptcy proceeding, however, shall survive.
32.2 Chapters 11 and 13. If Tenant files a petition for
reorganization under Chapters 11 or 13 of the Bankruptcy Code or a proceeding
that is filed by or against Tenant under any other chapter of the Bankruptcy
Code is converted to a Chapter 11 or 13 proceeding and Tenant's trustee or
Tenant as a debtor-in-possession fails to assume this Lease within 60 days from
the date of the filing of the petition or the conversion, the trustee or the
debtor-in-possession will be deemed to have rejected this Lease. To be
effective, an election to assume this Lease must be in writing and addressed to
Landlord and, in Landlord's business judgment, all of the following conditions,
which Landlord and Tenant acknowledge to be commercially reasonable, must have
been satisfied:
(a) The trustee or the debtor-in-possession has cured or has
provided to Landlord adequate assurance, as defined in this Article 32.2, that:
(1) The trustee will cure all monetary defaults under
this Lease within 10 days from the date of the
assumption; and
(2) The trustee will cure all non-monetary defaults under
this Lease within 30 days from the date of the
assumption.
(b) The trustee or the debtor-in-possession has compensated
Landlord, or has provided to Landlord adequate assurance, as defined in this
Article 32.2, that within 10 days from the date of the assumption Landlord will
be compensated for any pecuniary loss it incurred arising from the default of
Tenant, the trustee, or the debtor-in-possession as recited in Landlord's
written statement of pecuniary loss sent to the trustee or the
debtor-in-possession. For purposes of this Lease, pecuniary loss shall include
all attorneys' fees and court costs incurred by Landlord in connection with any
bankruptcy proceeding filed by or against Tenant.
(c) The trustee or the debtor-in-possession has provided Landlord
with adequate assurance of the future performance of each of Tenant's
obligations under the Lease; provided, however, that:
(1) The trustee or debtor-in-possession will also deposit
with Landlord as security for the timely payment of
Basic Rent and Additional Rent, an amount equal to 3
months' Basic Rent and Additional Rent accruing under
this Lease.
(2) If not otherwise required by the terms of this Lease,
the trustee or the debtor-in-possession will also pay
in advance, on each day that the Basic Rent is
payable, 1/12th of Tenant's estimated annual
obligations under the Lease for the Additional Rent.
(3) From and after the date of the assumption of this
Lease, the trustee or the debtor-in-possession will
pay the Basic Rent and Additional Rent as provided
herein.
(4) The obligations imposed upon the trustee or the
debtor-in-possession will continue for Tenant after
the completion of bankruptcy proceedings.
(d) Landlord has determined that the assumption of the Lease will
not:
(1) Breach any provisions in any other lease, mortgage,
financing agreement, or other agreement by which
Landlord is bound relating to the Property; or
(2) Disrupt, in Landlord's judgement, the tenant mix of
the Building or any other attempt by Landlord to
provide a specific variety of Tenants in the Building
that, in Landlord's judgment, would be most
beneficial to all of the tenants of the Building; and
would enhance the image, reputation, and
profitability of the Building.
(e) For purposes of this Article 32.2 "adequate assurance" means
that: (i) Landlord will determine that the trustee or the debtor-in-possession
has, and will continue to have, sufficient unencumbered assets after the payment
of all secured obligations and administrative expenses to assure Landlord that
the trustee or the debtor-in-possession will have sufficient fluids to perform
Tenant's obligations under this Lease and to keep the Leased Premises properly
staffed with sufficient employees
to conduct a fully operational, actively promoted business on the Leased
Premises; and (ii) an order will have been entered segregating sufficient cash
payable to Landlord and/or a valid and perfected first lien and security
interest will have been granted in property of Tenant, trustee, or
debtor-in-possession that is acceptable for value and kind to Landlord, to
secure to Landlord the obligation of the trustee or debtor-in-possession to cure
the monetary or non-monetary defaults under this Lease within the time periods
set forth above.
32.3 Landlord's Right to Terminate. In the event that this Lease is
assumed by a trustee appointed for Tenant or by Tenant as debtor-in-possession
under the provisions of Article 32.2 above and, thereafter, Tenant is either
adjudicated a bankrupt or files a subsequent petition for arrangement under
Chapter 11 of the Bankruptcy Code, then Landlord may terminate, at its option,
this Lease and all Tenant's rights under it, by giving written notice of
Landlord's election to terminate.
32.4 Assignment by Trustee. If the trustee or the
debtor-in-possession has assumed the Lease, under the terms of Article 32.1 or
32.2 above, and elects to assign Tenant's interest under this Lease or the
estate created by that interest to any other person, that interest or estate may
be assigned only if Landlord acknowledges in writing that the intended assignee
has provided adequate assurance, as defined in this Article 32.4, of future
performance of all of the terms, covenants, and conditions of this Lease to be
performed by Tenant.
32.5 Adequate Assurance. For the purposes of this Article 32
"adequate assurance of future performance" means that Landlord has ascertained
that each of the following conditions has been satisfied:
1. The assignee has submitted a current financial statement,
audited by a certified public accountant, that shows a net
worth and working capital in amounts determined by Landlord to
be sufficient to assure the future performance by the assignee
of Tenant's obligations under this Lease;
2. If requested by Landlord, the assignee will obtain guarantees,
in form and substance satisfactory to Landlord from one or
more persons who satisfy Landlord's standards of
creditworthiness;
3. Landlord has obtained all consents or waivers from any third
party required under any lease, mortgage, financing
arrangement or other agreement by which Landlord is bound, to
enable Landlord to permit the assignment;
4. When, pursuant to the Bankruptcy Code, the trustee or the
debtor-in-possession is obligated to pay reasonable use and
occupancy charges for the use of all or part of the Leased
Premises, the charges will not be less than the Basic Rent and
Additional Rent.
32.6 Consent of Landlord. Neither Tenant's interest in the Lease
nor any estate of Tenant created will pass to any trustee, receiver, assignee
for the benefit of creditors, or any other person or entity, or otherwise by
operation of law under the laws of any state having jurisdiction of the person
or property of Tenant unless Landlord consents in writing to the transfer.
Landlord's acceptance of Basic Rent or Additional Rent or any other payments
from any trustee, receiver, assignee, person, or other entity will not be deemed
to have waived, or waive, the need to obtain Landlord's consent or Landlord's
right to terminate this Lease for any transfer of Tenant's interest under this
Lease without that consent.
33. HAZARDOUS MATERIALS
33.1 Hazardous Materials Laws. "Hazardous Materials Laws" means any
and all federal, state or local laws, ordinances, rules, decrees, orders,
regulations or court decisions (including the so-called "common-law") relating
to hazardous substances, hazardous materials, hazardous waste, toxic substances,
environmental conditions on, under or about the Premises, or soil and ground
water conditions, including, but not limited to, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 as amended, 42 U.S.C. Section
9601, et seq., the Resource Conversation and Recovery Act ("RCRA"), 42 U.S.C.
Section 6901, et seq., the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801, et seq., any amendments to the foregoing, and any similar federal,
state or local laws, ordinances, rules, decrees, orders or regulations.
33.2 Hazardous Materials. "Hazardous Materials" means any chemical,
compound, material, substance or other matter that: (i) is a flammable
explosive, asbestos, radioactive material, nuclear medicine material, drug,
vaccine, bacteria, virus, hazardous waste, toxic substance, petroleum product,
or related injurious or potentially injurious material, whether injurious or
potentially injurious by itself or in combination with other materials; (ii) is
controlled, designated in or governed by any Hazardous Materials Law; (iii)
gives rise to any reporting, notice or publication requirements under any
Hazardous Materials Law; or (iv) gives rise to any liability, responsibility or
duty on the part of Tenant or Landlord with respect to any third person under
any Hazardous Materials Law.
33.3 Use. Tenant shall not allow any Hazardous Material to be used,
generated, released, stored or disposed of on, under or about, or transported
from, the Leased Premises, the Building or the Property, unless: (i) such use is
specifically disclosed to and approved by Landlord in writing prior to such use;
and (ii) such use is conducted in compliance with the provisions of this Article
33. Landlord may approve such use subject to reasonable conditions to protect
the Leased Premises, the Building or the Property, and Landlord's interests.
Landlord may withhold approval if Landlord determines that such proposed use
involves a material risk of a release or discharge of Hazardous Materials or a
violation of any Hazardous Materials Laws or that Tenant has not provided
reasonable assurances of its ability to remedy such a violation and fulfill its
obligations under this Article 33.
33.4 Compliance With Laws. Tenant shall strictly comply with, and
shall maintain the Leased Premises in compliance with, all Hazardous Materials
Laws. Tenant shall obtain and maintain in full force and effect all permits,
licenses and other governmental approvals required for Tenant's operations on
the Leased Premises under any Hazardous Materials Laws and shall comply with all
terms and conditions thereof. At Landlord's request, Tenant shall deliver copies
of, or allow Landlord to inspect, all such permits, licenses and approvals.
Tenant shall perform any monitoring, investigation, clean-up, removal and other
remedial work (collectively, "Remedial Work") required as a result of any
release or discharge of Hazardous Materials affecting the Leased Premises, the
Building or the Property, or any violation of Hazardous Materials Laws by Tenant
or any assignee or sublessee of Tenant or their respective agents, contractors,
employees, licensees, or invitees. Landlord shall have the right to intervene in
any governmental action or proceeding involving any Remedial Work, and to
approve performance of the work, in order to protect Landlord's interests.
33.5 Compliance With Insurance Requirements. Tenant shall comply
with the requirements of Landlord's and Tenant's respective insurers regarding
Hazardous Materials and with such insurers' recommendations based upon prudent
industry practices regarding management of Hazardous Materials.
33.6 Reporting. Tenant shall notify Landlord, in writing, as soon
as reasonably possible, but in no event later than 2 days after any of the
following: (a) a release or discharge of any Hazardous Material, whether or not
the release or discharge is in quantities that would otherwise be reportable to
a public agency; (b) Tenant's receipt of any order of a governmental agency
requiring any Remedial Work pursuant to any Hazardous Materials Laws; (c)
Tenant's receipt of any warning, notice of inspection, notice of violation or
alleged violation, or Tenant's receipt of notice or knowledge of any proceeding,
investigation of enforcement action, pursuant to any Hazardous Materials Laws;
or (d) Tenant's receipt of notice or knowledge of any claims made or threatened
by any third party against Tenant or the Leased Premises, the Building or the
Property, relating to any loss or injury resulting from Hazardous Materials.
Tenant shall deliver to Landlord copies of all test results, reports and
business or management plans required to be filed with any governmental agency
pursuant to any Hazardous Materials Laws.
33.7 Termination; Expiration. Upon the termination or expiration of
this Lease, Tenant shall remove any equipment, improvements or storage
facilities utilized in connection with any Hazardous Materials and shall, clean
up, detoxify, repair and otherwise restore the Leased Premises to a condition
free of Hazardous Materials.
33.8 Indemnity. Tenant shall protect, indemnify, defend and hold
Landlord harmless from and against, and shall be responsible for, any and all
claims, costs, expenses, suits, judgments, actions, investigations, proceedings
and liabilities arising out of or in connection with any breach of any
provisions of this Article 33 or directly or indirectly arising out of the use,
generation, storage, release, disposal or transportation of Hazardous Materials
by Tenant or any sublessee or assignee of Tenant, or their respective agents,
contractors, employees, licensees, or invitees, on, under or about the Leased
Premises, the Building or the Property during the Lease Term or Tenant's
occupancy of the Leased Premises, including, but not limited to, all foreseeable
and unforeseeable consequential damages and the cost of any Remedial Work.
Neither the consent by Landlord to the use, generation, storage, release,
disposal or transportation of Hazardous Materials nor the strict compliance with
all Hazardous Material Laws shall excuse Tenant from Tenant's indemnification
obligations pursuant to this Article 33. The foregoing indemnity shall be in
addition to and not a limitation of the indemnification provisions of Article 16
of this Lease. Tenant's obligations pursuant to this Article 33 shall survive
the termination or expiration of this Lease.
33.9 Transfer. If Landlord's consent is required for an assignment
of this Lease or a subletting of the Leased Premises, Landlord shall have the
right to refuse such consent if the possibility of a release of Hazardous
Materials is materially increased as a result of the assignment or sublease or
if Landlord does not receive reasonable assurances that the new tenant has the
experience and the financial ability to remedy a violation of the Hazardous
Materials Laws and fulfill its obligations under this Article 33.
33.10 Entry, Inspection, Cure. Landlord and its agents, employees
and contractors, shall have the right, but not the obligation, to enter the
Leased Premises at all reasonable times and upon reasonable notice to inspect
the Leased Premises and Tenant's compliance with the terms and conditions of
this Article 33, or to conduct investigations and tests. No prior notice to
Tenant shall be required in the event of an emergency, or if Landlord has
reasonable cause to believe that violations of this Article 33 have occurred, or
if Tenant consents at the time of entry. In all other cases, Landlord shall give
at least 24 hours prior notice to Tenant. Landlord shall have the right, but not
the obligation, to remedy any violation by Tenant of the provisions of this
Article 33 or to perform any Remedial Work which is necessary or appropriate as
a result of any governmental order, investigation or proceeding. Tenant shall
pay, upon demand, as Additional Rent, all costs incurred by Landlord in
remedying such violations or
performing all Remedial Work, plus interest thereon at the Interest Rate from
the date of demand until the date received by Landlord.
33.11 Event of Default. The release or discharge of any Hazardous
Material or the violation of any Hazardous Materials Law shall constitute an
Event of Default by Tenant under this Lease. In addition to and not in lieu of
the remedies available under this Lease as a result of such Event of Default,
Landlord shall have the right, without terminating this Lease, to require Tenant
to suspend its operations and activities on the Leased Premises until Landlord
is satisfied that appropriate Remedial Work has been or is being adequately
performed and Landlord's election of this remedy shall not constitute a waiver
of Landlord's right thereafter to pursue the other remedies set forth in this
Lease.
33.12 Landlord Representation. To the actual knowledge of Landlord
based solely upon Landlord's review of that certain Phase I environmental site
assessment prepared by Certified Environmental Services, dated March 4, 1996 as
Project No. 96060S01R04E08BDD, a copy of which has been delivered to Tenant, no
Hazardous Materials exist or are located on the Property in violation of any
applicable Hazardous Materials Law. Landlord agrees to indemnify and hold Tenant
harmless from any loss, expense, fine, penalty or damage resulting from a breach
by Landlord of the foregoing representation.
34. DECLARATION OF EASEMENTS
AND OF COVENANTS AND RESTRICTIONS
Tenant and all persons in possession or holding under Tenant shall
conform to and shall not violate the terms of any matters of record. This Lease
is and shall remain subordinate to any Declaration of Easements and of Covenants
and Restrictions or similar document now in force or hereinafter recorded
against the Property (collectively, the "CC&Rs"). As provided in any CC&R's, no
use or operation will be made, conducted or permitted by Tenant on or with
respect to all or any part of the Property which is obnoxious to or out of
harmony with the development or operation of similar properties, including,
without limitation, the following: (a) any public or private nuisance; (b) any
noise or sound that is objectionable due to intermittency, beat, frequency,
shrillness or loudness; (c) any obnoxious odor; (d) any noxious, toxic, caustic
or corrosive fuel or gas; (e) any dust or other dirt in excessive quantities;
(f) any unusual fire, explosion or other damaging or dangerous hazard; (g) the
conduct of any sexually oriented business, or a so-called "head" shop or
businesses featuring, as a principal portion of a business, the sale or
presentation of so-called "adult" products, sexually explicit products, or drug
paraphernalia; (h) any activity outside the ordinary course of business which
physically and substantially interferes with the business of any other tenant or
any other individual or entity using any portion of the Property; (i) the
violation of any law, ordinance, or rule or regulation of any governmental
authority having jurisdiction over the Property; or (j) for any other
unreasonable use of the Property not compatible with the operation of a
first-class commercial office development, including, without limitation,
advertising media which can be heard or experienced in an annoying manner from
the exterior of the Building, the Premises or the Property, or other improvement
from which it emanates, such a searchlights, loud speakers, phonographs, radios
or television.
35. NOTICE TO LANDLORD'S MORTGAGEE
In the event that Tenant at any time or from time to time receives a
written notice from Landlord specifying the name and address of the beneficiary
(Landlord's Mortgagee") under any deed of trust, mortgage or other security
agreement covering the Property, the Building and/or Landlord's interest in this
Lease, Tenant agrees that, in the event of a default hereunder by Landlord which
would give Tenant the right to terminate this Lease or declare a total or
partial eviction (constructive or otherwise), Tenant shall not seek to terminate
this Lease or so declare an eviction by Landlord until (i) Tenant shall have
given written notice of such default (which notice shall specify the exact
nature of such default and how the same may be cured) to Landlord and Landlord's
Mortgagee by certified mail, postage prepaid, return receipt requested, and (ii)
thirty (30) days shall have elapsed following the giving of such notice. If,
during such thirty (30) day period, Landlord or Landlord's Mortgagee shall cure
or substantially undertake to cure such default, Tenant shall waive its right to
either terminate this Lease or declare an eviction with respect to the default
by Landlord specified in such notice.
36. MISCELLANEOUS
36.1 Quiet Enjoyment. If, and so long as, Tenant pays the Rent
reserved hereunder and keeps and performs each and every term, covenant and
condition herein contained on the part and on behalf of Tenant to be kept and
performed, Tenant shall quietly enjoy the Leased Premises without hindrance or
molestation by Landlord or any person or entity claiming by or through Landlord,
subject to the terms, covenants and conditions of this Lease.
36.2 Entire Agreement; Amendments. This Lease and any Exhibits and
Riders attached hereto and forming a part hereof, set forth all of the
covenants, promises, agreements, conditions and understandings between Landlord
and Tenant concerning the Leased Premises and there are no covenants, promises,
agreements, representations, warranties, conditions or understandings either
oral or written between them other than as contained in this Lease. Except as
otherwise provided in this Lease, no subsequent alteration, amendment, change or
addition to this Lease shall be binding unless it is in writing and signed by
both Landlord and Tenant.
36.3 Time of the Essence. Time is of the essence of each and every
term, covenant and condition of this Lease.
36.4 Binding Effect. The covenants and conditions of this Lease
shall, subject to the restrictions on assignment and subletting, apply to and
bind the heirs, executors, administrators, personal representatives, successors
and assigns of the parties hereto.
36.5 Recordation. Neither this Lease nor any memorandum hereof
shall be recorded by Tenant. At the sole option of Landlord, Tenant and Landlord
shall execute, and Landlord may record, a short form memorandum of this Lease in
form and substance satisfactory to Landlord.
36.6 Governing Law. This Lease and all the terms and conditions
thereof shall be governed by and construed in accordance with the laws of the
State of Arizona. The venue for any dispute arising under this Lease shall be a
court of competent jurisdiction in Maricopa County, Arizona.
36.7 Defined Terms and Paragraph Headings. The words "Landlord" and
"Tenant" as used in this Lease 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 in this Lease 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 hereof. The
word "including" shall be deemed to mean "including, without limitation" or by
way of example and not by limitation.
36.8 Representations and Warranties of Tenant. Tenant represents
and warrants to Landlord as follows:
(a) Tenant has been duly organized, is validly existing,
and is in good standing under the laws of its state of organization and is
qualified to transact business in Arizona. All necessary action on the part of
Tenant has been taken to authorize the execution, delivery and performance of
this Lease and of the other documents, instruments and agreements, if any,
provided for herein. The persons who have executed this Lease on behalf of
Tenant are duly authorized to do so;
(b) This Lease constitutes the legal, valid and binding
obligation of Tenant, enforceable against Tenant in accordance with its terms,
subject, however, to bankruptcy, insolvency, reorganization, arrangement,
moratorium or other similar laws relating to or affecting the rights of
creditors generally, general principles of equity, whether enforceability is
considered in a proceeding in equity or at law, and to the qualification that
certain waivers, procedures, remedies and other provisions of this Lease may be
unenforceable under or limited by applicable law, however, none of the foregoing
shall prevent the practical realization to Landlord of the benefits intended by
this Lease;
(c) To the best of its knowledge, there are no suits,
actions, proceedings or investigations pending, or to the best of its knowledge,
threatened against or involving Tenant before any court, arbitrator or
administrative or governmental body which might reasonably result in any
material adverse change in the contemplated business, condition or operations of
Tenant;
(d) To the best of its knowledge, Tenant is not, and the
execution, delivery and performance of this Lease and the documents, instruments
and agreements, if any, provided for herein will not result in any breach of or
default under any other document, instrument or agreement to which Tenant is a
party or by which Tenant is subject or bound;
(e) To the best of its knowledge, Tenant has obtained all
required licenses and permits, both governmental and private, to use and operate
the Leased Premises in the manner intended by this Lease; and
(f) All financial statements, tax returns and other
financial information delivered by Tenant to Landlord prior to the execution of
this Lease is true, correct and complete in all material respects and all
financial statements, tax returns or other financial information to be delivered
by Tenant to Landlord subsequent to the execution of this Lease shall be true,
correct and complete in all material respects.
36.9 No Waiver. The failure of either party to insist in any one or
more instances upon the strict performance of any one or more of the obligations
of this Lease, or to exercise any election herein contained, shall not be
construed as a waiver or relinquishment for the future of the performance of
such one or more obligations of this Lease or the right to exercise such
election, but the same shall continue and remain in full force and effect with
respect to any subsequent breach, act or omission.
36.10 Severability. If any clause or provision of this Lease is or
becomes illegal or unenforceable because of any present or future law or
regulation of any governmental body or entity
effective during the Lease Term, the intention of the parties is that the
remaining provisions of this Lease shall not be affected thereby.
36.11 Exhibits. If any provision contained in an Exhibit, Rider or
Addenda to this Lease is inconsistent with any other provision of this Lease,
the provision contained in this Lease shall supersede the provisions contained
in such Exhibit, Rider or Addenda, unless otherwise provided.
36.12 Fair Meaning. The language of this Lease shall be construed to
its normal and usual meaning and not strictly for or against either Landlord or
Tenant. Landlord and Tenant acknowledge and agree that each party has reviewed
and revised this Lease and that any rule of construction to the effect that
ambiguities are to be resolved against the drafting party shall not apply to the
interpretation of this Lease, or any Exhibits, Riders or amendments hereto.
36.13 No Merger. The voluntary or other surrender of this Lease by
Tenant or a mutual cancellation of this Lease shall not work as a merger and
shall, at Landlord's option, either terminate any or all existing subleases or
subtenancies, or operate as an assignment to Landlord of any or all of such
subleases or subtenancies.
36.14 Force Majeure. Any prevention, delay or stoppage due to
strikes, lockouts, labor disputes, acts of God, inability to obtain labor or
materials for reasonable substitutes therefor, governmental restrictions,
regulations or controls (including inability to obtain building or occupancy
permits), judicial orders, enemy or hostile government actions, civil commotion,
fire or other casualty and other causes beyond the reasonable control of
Landlord shall excuse the Landlord's performance hereunder for the period of any
such prevention, delay, or stoppage.
36.15 Government Energy or Utility Controls. In the event of the
imposition of federal, state or local governmental controls, rules, regulations
or restrictions on the use or consumption of energy or other utilities during
the Lease Term, both Landlord and Tenant shall be bound thereby. In the event of
a difference in interpretation of any governmental control, rule, regulation or
restriction between Landlord and Tenant, the interpretation of Landlord shall
prevail, and Landlord shall have the right to enforce compliance, including the
right of entry into the Leased Premises to effect compliance.
36.16 Shoring. If any excavation or construction is made adjacent
to, upon or within the Building, or any part thereof, Tenant shall afford to any
and all persons causing or authorized to cause such excavation or construction
license to enter onto the Leased Premises for the purpose of doing such work as
such persons shall deem necessary to preserve the Building or any portion
thereof from injury or damage and to support the same by proper foundations,
braces and supports without any claim for damages, indemnity or abatement of
Basic Rent or Additional Rent or for a constructive or actual eviction of
Tenant.
36.17 Transfer of Landlord's Interest. The term "Landlord" as used
in this Lease, insofar as the covenants or agreements on the part of the
Landlord are concerned, shall be limited to mean and include only the owner or
owners of Landlord's interest in this Lease at the time in question. Upon any
transfer or transfers of such interest, the Landlord herein named (and in the
case of any subsequent transfer, the then-transferor) shall thereafter be
relieved of all liability for the performance of any covenants or agreements on
the part of the Landlord contained in this Lease.
36.18 Brokerage Fees. Tenant warrants and represents that it has not
dealt with any realtor, broker or agent in connection with this Lease except the
Broker identified in Article 1 above. Tenant shall
indemnify, defend and hold Landlord harmless for, from and against, and shall be
responsible for, any cost, expense or liability (including the cost of suit and
reasonable attorneys' fees) for any compensation, commission or charges claimed
by any other realtor, broker or agent in connection with this Lease or by reason
of any act of Tenant. Landlord and Tenant recognize that Tenant has been
represented by Signature Associates-ONCOR International and CORE Realty
Partners-ONCOR International in this transaction. If and only if this Lease is
executed by Landlord and Tenant, a real estate commission shall be paid pursuant
to the terms of a separate agreement between Landlord and Signature Associates
and CORE Realty Partners dated June 23, 2003.
36.19 Continuing Obligations. All obligations of Lessee hereunder
not fully performed as of the expiration or earlier termination of this Lease
shall survive the expiration or earlier termination of this Lease, including,
without limitation, all payment obligations with respect to Basic Rent,
Additional Rent and all obligations concerning the condition of the Premises.
36.20 Financial Statements. If required by a third party in
connection with the sale or financing of the Building or Property, or if Tenant
shall be in default hereunder, Tenant shall, within 30 days after receipt of
such request by Landlord, deliver to Landlord its most current financial
statements including a balance sheet, a statement of income and expenses, and a
statement of cash flows, all in reasonable detail and prepared according to
generally accepted accounting principles, consistently applied. Year-end
statements shall be reviewed by an independent certified public accountant and
interim statements shall be certified by Tenant, if Tenant is an individual, by
the chief financial officer of Tenant, if Tenant is a corporation, by the
manager or a member of Tenant if Tenant is a limited liability company or by a
general partner of Tenant, if Tenant is a partnership. Tenant shall supply
Landlord with audited financial statements if Tenant prepares audited financial
statements in the ordinary course of its business.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the date and year first above written.
LANDLORD
Orsett/Piedmont Limited Partnership
By: Orsett/Piedmont Properties, Ltd., general
partner
TENANT
Asset Acceptance, LLC, a Delaware limited
liability company
EXHIBIT "A"
LEGAL DESCRIPTION
EXHIBIT "B"
FLOOR PLAN
EXHIBIT "C"
DELETED
42
EXHIBIT "D"
WORK LETTER
WORK LETTER
This Exhibit is attached to and made a part of the Lease dated
________________, 2003, by and between Orsett/Piedmont Limited Partnership
("Landlord") and Asset Acceptance LLC ("Tenant") for space in the Building
commonly known as Piedmont Corporate Center.
1. Tenant shall submit for Landlord's review and approval complete
architectural, electrical, plumbing, and mechanical plans and specifications for
the construction of alterations, additions, and improvements to the Leased
Premises (the "Improvements") and Tenant's sign specifications and criteria.
Landlord will advise Tenant of any reasonably required revisions in writing.
Within 5 days thereafter, Tenant must deliver to Landlord revised plans and
specifications incorporating the revisions required by Landlord. The plans and
specifications as revised in accordance with Landlord's requirements will
constitute the "Plans" for purposes of this Work Letter. If Tenant thereafter
requests any changes in the Plans, Tenant must submit revised drawings and
specifications for Landlord's approval. If Landlord approves the changes, the
changes may then be incorporated in the Tenant Improvement Work (as hereafter
defined) following Landlord's receipt of a change order executed by Tenant, and
all references in this Work Letter to the Plans will thereafter be deemed to
refer to the Plans as so revised.
2. Tenant will construct Improvements as described in the Plans. Before
Tenant begins construction of the Improvements, Tenant must furnish all of the
following to Landlord:
(a) Evidence that all building and other permits for the
Improvements have been issued.
(b) A list of all contractors and subcontractors to be employed by
Tenant in connection with construction of the Improvements, each of whom must be
approved in writing in advance by Landlord.
(c) A copy of each contract or subcontract relating to the
construction of the Improvements.
(d) Evidence of insurance satisfactory to Landlord in all respects
(including without limitation, coverages, amount insured, and rating of the
insurance company), which must name Landlord and its property manager and/or
lender as additional insureds.
3. During the course of constructing the Improvements, Tenant must comply,
and must cause its contractors and subcontractors to comply, with the Building
Rules and Regulations and with all directions and instructions of Landlord and
its property manager with respect to construction of the Improvements, means of
access to the Leased Premises and the Property, parking, storage and disposal of
materials, and other matters. From and after the date of the Lease, Tenant's
occupancy in the Leased Premises shall be subject to all terms and provisions of
the Lease other than the payment of Basic Rent, which commences on the
Commencement Date. Tenant assumes all risks of completing the Improvements,
including all risks that Tenant's intended occupancy of the Leased Premises may
be delayed owing to delays in completing the Improvements.
4. Prior to occupying the Leased Premises, Tenant must do all of the
following:
43
(a) Deliver to Landlord a certificate of substantial completion
executed by Tenant's architect and approved by Tenant and Landlord, identifying
any defective or nonconforming work, including any punchlist items.
(b) Repair any damage to the Property resulting from construction
of the Improvements.
(c) Deliver to Landlord as-built drawings for the Improvements.
(d) Deliver to Landlord a copy of all building and construction
permits issued in connection with the construction of the Improvements.
(e) Deliver to Landlord an original certificate of occupancy for
the Leased Premises.
(f) Deliver to Landlord a list of all contractors, subcontractors,
and suppliers of materials for the Improvements certified by Tenant as correct
and complete, together with a release of liens in a form satisfactory to
Landlord from Tenant and from each party named on the list.
(g) Deliver to Landlord bills, invoices, or other reasonable
evidence of the amount of the Construction Costs paid by Tenant. The
"Construction Costs" will equal the actual amount of (i) fees and expenses of
the Architect in connection with preparation of the Plans and construction of
the Improvements, (ii) costs of labor and materials incorporated or used in the
Improvements (the "hard costs"), (iii) fees and other charges payable to
contractors for construction of the Improvements, and (iv) fees to governmental
authorities for permits, inspections, and certificates of occupancy required in
connection with the Improvements.
5. Within 30 days after delivery of the certificate of substantial
completion of the Improvements, Tenant must repair or replace any defective
portions of the Improvements and any portions of the Improvements that fail to
conform to the Plans, including punchlist items, as identified in the
certificate of substantial completion. Notwithstanding anything to the contrary
in the Lease or any inspection or approval by or on behalf of Landlord, Landlord
will have no obligation to repair or replace any portion of the Improvements,
and Landlord makes no warranties, express or implied, with respect to the
Improvements.
6. Provided that all repairs and replacements required by Section 6 of
this Work Letter have been completed and no Event of Default has occurred,
Landlord will pay to Tenant the sum of $715,500 (the "Allowance") to be used to
offset the costs to Tenant of the Improvements. If and only if Tenant shall use
90% or more of the Allowance for hard costs, but less than 100%, Tenant may use
the balance of the amount for moving, furniture or any other costs at Tenant's
discretion. Periodically, but in no event more than at 30-day intervals, Tenant
shall deliver to Landlord invoices from Tenant's contractor related to work
completed to Landlord along with lien waivers with respect thereto. Subject to
the limitations defined herein, within 10 days after receipt thereof, Landlord
shall remit to Tenant's contractor the payments requested thereby (such
payments, however, will in no event exceed the Allowance).
Subject to the foregoing, within 15 days after completion of all the
items listed in Section 5 of this Work Letter, and provided that all repairs and
replacements required by Section 6 of this Work Letter have been completed and
no Event of Default has occurred, Landlord shall remit to Tenant and/or Tenant's
contractor the balance of the tenant improvement allowance.
7. Tenant will indemnify, defend, and hold Landlord and its officers,
employees, agents, directors, shareholders, and partners harmless against (a)
any and all Construction Costs, (b) any other cost or
44
expense relating to preparation of the Plans or construction of the Improvements
to the extent not deducted in computing the Tenant Improvement Allowance, and
(c) any loss, liability, damage, cost, or expense (including reasonable
attorneys' fees and costs of litigation), or any claim therefor, resulting from
injury to persons or loss or damage to property arising from or in connection
with the construction of the Improvements.
45
EXHIBIT "E"
RENEWAL OPTION
A. If Tenant has not committed an Event of Default under the Lease either
at the time of exercise or at the time of effect, Tenant shall have the right to
extend the term of the Lease for the period(s) described in Article 1.11 (an
"Option Period") commencing at the expiration of the initial term or at the
expiration of any Option Period (if applicable). Except as may be provided
herein, the Lease of the Leased Premises during any Option Period shall be upon
the same terms and conditions as set forth in the Lease, other than Basic Rent,
which shall be as defined below. If Tenant does not exercise its option by
giving written notice to Landlord of Tenant's exercise thereof (the "Option
Notice") within the time period described in Article 1.11, then all rights of
under this Schedule shall automatically terminate. Time is of the essence
herein.
B. The Basic Rent payable by Tenant for the first year of any Option
Period shall be the greater of (a) the Basic Rent payable by Tenant in the last
month of the initial term or Option Period then in effect (as applicable), or
(b) the current "Market Rate" for the Leased Premises, defined as the
then-current fair market rental value (expressed as a per rentable square foot
annual rental rate) for comparable properties in the Phoenix metropolitan area
at the expiration of the initial term or any Option Period, as applicable. The
"Market Rate" shall be determined as follows:
1. Promptly following receipt by Landlord an Option Notice,
Landlord and Tenant shall attempt to reach agreement on the Basic Rent for the
applicable Option Period. If Landlord and Tenant are able to agree on the Basic
Rent for such Option Period, Landlord and Tenant shall execute an amendment to
this Lease stating the agreed upon Basic Rent.
2. If the parties are unable to agree on the Basic Rent for an
Option Period within 30 days following the Option Notice, then each party, at
its cost and by giving notice to the other party, shall have 10 days within
which to appoint an MAI full-time commercial appraiser with at least 5 years
experience to appraise and determine the Market Rate for the Leased Premises
during the applicable Option Period. Within 60 days following the Option Notice,
each appraiser shall appraise and determine the Market Rate for such Option
Period. The appraisers shall arrange for (a) the simultaneous exchange of each
appraiser's determination of the Market Rate for the other appraiser's
determination of the market Rate and (b) the communication of both
determinations of Market Rate to Landlord and Tenant. If the difference between
the two determinations of Market Rate is less than or equal to 10% of the higher
of the two determinations of Market Rate, then the Market Rate shall be the
average of the two determinations of Market Rate and the appraisers shall notify
Landlord and Tenant of the Market Rate so determined. If the difference between
the two determinations of Market Rate is more than 10% of the higher of the two
determinations of Market Rate, then the Market Rate shall be determined as set
forth in Paragraph 3. If a party does not appoint an appraiser within such 10
day period or the appraiser appointed by a party does not appraise and determine
the Market Rate within such 60 day period, the determination of the Market Rate
by the single appraiser appointed by the other party shall be the Market Rate
for the applicable Option Period. Each of the parties shall bear the cost of its
own appraiser.
3. In the event that the Market Rate shall be determined by this
Paragraph 3, then, within 70 days following the Option Notice, the two
appraisers appointed by the parties shall meet to select a third appraiser. Each
appraiser shall nominate no more than three such appraisers (with qualifications
as described in Paragraph 2 and with the added qualification that each such
nominee shall
46
be a person who has not previously acted in any capacity for either party). The
two appraisers shall either agree on the third appraiser from among the nominees
or, if they are unable to agree, select the third appraiser by lot from among
the nominees and notify Landlord and Tenant of the third appraiser so selected.
Within 85 days following the Option Notice, the third appraiser shall review the
work product of the two appraisers appointed by the parties and determine which
of the two determinations of Market Rate made by such appraisers is, in the
judgment of the third appraiser, the more accurate determination of Market Rate
and shall notify Landlord and Tenant of such determination. The third appraiser
may select only one of the two determinations of Market Rate made by the two
appraisers appointed by the parties and may not select another rate. Each of the
parties shall bear one-half of the cost of the third appraiser.
C. In the event that Tenant shall validly transfer this Lease in
accordance with the provisions of Section 18, the Renewal Option described
herein shall specifically be transferred therewith.
EXHIBIT "F"
RULES AND REGULATIONS
1. Unless otherwise specifically defined herein, all capitalized
terms in these Rules and Regulations shall have the meaning set forth in the
Lease to which these Rules and Regulations are attached.
2. The sidewalks, driveways, entrances, passages, courts,
elevators, vestibules, stairways, corridors or halls of the Building and the
Property shall not be obstructed or encumbered or used for any purpose other
than ingress and egress to and from the premises demised to any tenant or
occupant. The halls, passages, exits, entrances, elevators, stairways, and roof
are not for the use of the general public, and the Landlord shall in all cases
retain the right to control and prevent access thereto by all persons whose
presence in the judgment of Landlord shall be prejudicial to the safety,
character, reputation and interests of the Building and its tenants.
3. No awnings or other projection shall be attached to the
outside walls or windows of the Building. No curtains, blinds, shades, or
screens shall be attached to or hung in, or used in connection with, any window
or door of the premises demised to any tenant or occupant, without the prior
written consent of Landlord. All electrical fixtures hung in any premises
demised to any tenant or occupant must be of a type, quality, design, color,
size and general appearance approved by Landlord.
4. No tenant shall place objects against glass partitions, doors
or windows which would be in sight from the Building corridors or from the
exterior of the Building and such tenant will promptly remove any such objects
when requested to do so by Landlord.
5. The windows and doors that reflect or admit light and air into
the halls, passageways or other public places in the Building shall not be
covered or obstructed, nor shall any bottles, parcels, or other articles be
placed on any window xxxxx.
6. No show cases or other articles shall be put in front of or
affixed to any part of the exterior of the Building or the other buildings in
the Property, nor placed in the halls, corridors, walkways, landscaped areas,
vestibules or other public parts of the Building or the Property.
7. The restrooms, water and wash closets and other plumbing
fixtures shall not be used for any purposes other than those for which they were
constructed, and no sweepings, rubbish, rags or other substances shall be thrown
therein. No tenant shall bring or keep, or permit to be brought or kept, any
flammable, combustible, explosive or hazardous fluid, material, chemical or
substance in or about the premises demised to such tenant or the Property.
8. No tenant or occupant shall xxxx, paint, drill into, or in any
way deface any part of the Property, the Building or the premises demised to
such tenant or occupant. No boring, cutting or strings of wires shall be
permitted, except with the prior consent of Landlord, and as Landlord may
direct. No tenant or occupant shall install any resilient tile or similar floor
covering in the premises demised to such tenant or occupant except in a manner
approved by Landlord.
9. Any carpeting cemented down by a tenant shall be installed
with a releasable adhesive. In the event of a violation of the foregoing by a
tenant, Landlord may charge the expense incurred in such removal to such tenant.
10. No bicycles, vehicles or animals of any kind (except service
dogs) shall be brought into or kept in or about the premises demised to any
tenant. No cooking shall be done or permitted in the Building by any tenant
without the written approval of Landlord, except for microwaves and coffee
makers. No tenant shall cause or permit any unusual or objectionable odors to
emanate from the premises demised to such tenant.
11. No space in the Building or the Property shall be used for
manufacturing, for the storage of merchandise, or for the sale of merchandise,
goods or property of any kind at auction.
12. No tenant and no employee, visitor, agent, or licensee of any
Tenant shall make, or permit to be made, any unseemly or disturbing noises or
vibrations or disturb or interfere with other tenants or occupants of the
Building or neighboring buildings or premises whether by the use of any musical
instrument, radio, television set, broadcasting equipment or other audio device,
noise, whistling, singing, yelling or screaming, or in any other way. Nothing
shall be thrown out of any doors. No tenant and no employee, visitor, agent, or
licensee of any Tenant shall conduct itself in any manner that is inconsistent
with the character of the Building as a first quality building or that will
impair the comfort, convenience or safety of other tenants in the Building.
13. No additional locks or bolts of any kind shall be placed upon
any of the doors, nor shall any changes be made in locks or the mechanism
thereof without notice to Landlord and without furnishing a key to same to
Landlord. Each tenant must, upon the termination of its tenancy, return to
Landlord all keys of stores, offices and toilet rooms, either furnished to, or
otherwise procured by, such tenant.
14. All removal from the Building, or the carrying in or out of
the Building or from the premises demised to any tenant, of any safes, freight,
furniture or bulky matter of any description must take place at such time and in
such manner as Landlord or its agents may determine from time to time. Landlord
reserves the right to inspect all freight to be brought into the Building and to
exclude from the Building all freight which violates any of the Rules and
Regulations or the provisions of such tenant's lease.
15. No tenant or occupant shall engage or pay any employees in the
Building or the Property, except those actually working for such tenant or
occupant in the Building or the Property, nor advertise for day laborers giving
an address at the Building or the Property.
16. Each tenant shall, at its expense, provide artificial light in
the premises demised to such tenant for Landlord's agents, contractors and
employees while making repairs or alterations in said premises.
17. No premises shall be used, or permitted to be used for lodging
or sleeping, or for any immoral or illegal purposes or in any matter that, in
Landlord's reasonable business judgment, threatens the safety of the Building or
the tenants of the Building and their employees and invitees. In addition, each
tenant shall maintain its furniture, fixtures and equipment within its premises
in a manner that presents a pleasant appearance both in daylight and nighttime
from the surrounding streets and roadways.
18. Canvassing, soliciting and peddling in the Building or the
Property are prohibited and each tenant and occupant shall cooperate in seeking
their prevention.
19. There shall not be used in the Building, either by any tenant
or occupant or by their agents or contractors, in the delivery or receipt of
merchandise, freight or other matter, any hand trucks or other means of
conveyance except those equipped with rubber tires, rubber side guards and such
other safeguards as Landlord may reasonably require.
20. If the premises demised to any tenant become infested with
vermin, such tenant, at its sole cost and expense, shall cause its premises to
be exterminated, from time to time, to the satisfaction of Landlord, and shall
employ such exterminators therefor as shall be approved in writing by Landlord.
21. No premises shall be used, or permitted to be used, at any
time, as a store for the sale or display of goods, wares or merchandise of any
kind, or as a restaurant, shop, booth, bootblack or other stand, or for the
conduct of any business or occupation which predominantly involves direct
patronage of the general public in the premises demised to such tenant, or for
manufacturing or for other similar purposes.
22. No tenant shall clean any window of the Building from the
outside.
23. No tenant shall move, or permit to be moved, into or out of
the Building or the premises demised to such tenant, any heavy or bulky matter,
without the specific approval of Landlord. If any such matter requires special
handling, only a qualified person shall be employed to perform such special
handling. No tenant shall place or permit to be placed, on any part of the floor
or floors of the premises demised to such tenant, a load exceeding the floor
load per square foot which such floor was designed to carry or which is allowed
by law. Landlord reserves the right to prescribe the weight and position of
safes and other heavy objects, which must be placed so as to distribute the
weight.
24. Landlord shall not be responsible for lost or stolen personal
property, equipment, money, or jewelry from the premises of tenants or public
rooms whether or not such loss occurs when the Building or the premises are
locked against entry.
25. Landlord may permit entrance to the premises of tenants by use
of pass keys controlled by Landlord employees, contractors, or service personnel
directly supervised by Landlord and employees of the United States Postal
Service.
26. Each tenant and all of tenant's representatives, shall observe
and comply with the directional and parking signs on the property surrounding
the Building, and Landlord shall not be responsible for any damage to any
vehicle towed because of non-compliance with parking regulations.
27. Except as may be specifically provided in the tenant's lease,
Tenant shall not install any radio, telephone, television, microwave or
satellite antenna, or other device on the roof or exterior walls of the Building
without written approval of Landlord.
28. Each tenant shall store all trash and garbage within its
premises. No material shall be placed in the trash boxes or receptacles in the
Building or the Property unless such material may be disposed of in the ordinary
and customary manner of removing and disposing of trash and garbage and will not
result in a violation of any law or ordinance governing such disposal. All
garbage and refuse
disposal shall be made only through entryways and elevators provided for such
purposes and at such times as Landlord shall designate.
29. Each tenant shall give prompt notice to Landlord of any
accidents to or defects in plumbing, electrical or heating apparatus so that
same may be attended to properly.
30. No tenant shall bring onto the Property or into the Building
any pollutants, contaminants, inflammable, gasolines, kerosene or hazardous
substances (as now or later defined under State or Federal law).
31. All tenants and tenants' servants, employees, agents,
visitors, invitees and licensees shall observe faithfully and comply strictly
with the foregoing Rules and Regulations and such other and further appropriate
Rules and Regulations as Landlord or Landlord's agent from time to time adopt.
Each tenant shall at all times keep the premises leased to such tenant, its
employees, agents and invitees under its control so as to prevent the
performance of any act that would damage the Building or its reputation or the
premises leased to such tenant or could injure, annoy, or threaten the security
of the other tenants in the Building or their respective employees, agents or
invitees or the public.
32. Each person using the Parking Area or other areas designated
by Landlord where parking will be permitted shall comply with all Rules and
Regulations adopted by Landlord with respect to the Parking Areas or other
areas, including any employee or visitor parking restrictions. The Rules and
Regulations applicable to the Parking Areas and the outside parking areas are as
follows:
(a) The maximum speed limit within the Parking Area shall
be 5 miles per hour.
(b) All directional signs and arrows must be strictly
observed.
(c) All vehicles must be parked entirely within painted
stall lines.
(d) No intermediate or full-sized car may be parked in
any parking space reserved for a compact car; no bicycle,
motorcycle or other 2 or 3 wheeled vehicle, and no truck, van
or other oversized vehicle, may be parked in any area not
specifically designated for use thereby.
(e) No vehicle may be parked (i) in an area not striped
for parking, (ii) in a space which has been reserved for
visitors or for another person or firm, (iii) in an aisle or
on a ramp, (iv) where a "no parking" sign is posted or which
has otherwise designated as a no parking area, (v) in a cross
hatched area, (vi) in an area bearing a "handicapped parking
only" or similar designation unless the vehicle bears an
appropriate handicapped designation, (vii) in an area bearing
a "loading zone" or similar designation unless the vehicle is
then engaged in a loading or unloading function and (viii) in
an area with a posted height limitation if the vehicle exceeds
the limitation.
(f) Each operator shall be required to park and lock his
or her own vehicle, shall use the parking facilities at his or
her own risk and shall bear full
responsibility for all damage to or loss of his or her
vehicle, and for all injury to persons and damage to property
caused by his or her operation of the vehicle.
(g) Landlord reserves the right to tow away, at the
expense of the owner, any vehicle which is inappropriately
parked or parked in violation of these Rules and Regulations.
33. Landlord reserves the right at any time and from time to time
to rescind, alter or waive, in whole or in part, any of the Building Rules and
Regulations when it is deemed necessary, desirable or proper, in Landlord's
judgment for its best interest or of the best interests of the tenants of the
Property.
34. Landlord has designated the Building a "non-smoking" building.
Accordingly, smoking of tobacco or any other weed plant is prohibited in the
Building, Building Common Areas, including the Building Lobby, the Building
entrances and exits, including the portions of the Property adjacent thereto,
public corridors, lavatories, elevators and other public areas.
35. Bicycles, motorcycles and other 2 or 3 wheeled vehicles may
only be stored or parked in areas designated, from time to time, by Landlord.
ASSIGNMENT, ASSUMPTION AND
CONSENT TO ASSIGNMENT OF LEASE
THIS AGREEMENT is made as of this 7/25 day of July, 2003 by and between
ORSETT/XXXXXXX L.L.C., an Arizona limited liability company ("Landlord"); ASSET
ACCEPTANCE LLC, a Michigan limited liability company ("Assignor"); and ORSETT
PROPERTIES, LTD., an Arizona corporation ("Assignee").
RECITALS
1. Landlord and Assignor, as successor-in-interest to OSI, Inc., are the
parties to that certain lease dated May 19, 1998 (as amended, the "Lease") for
approximately 8,350 rentable square feet of office space ("Premises") located in
the building commonly known as the Xxxxxxx Center, which is located in Phoenix,
Arizona, as more fully described in the Lease.
2. Assignor now desires to assign all of its right, title and interest in
and to the Lease to Assignee, and Landlord agrees to release Assignor from its
obligations under the Lease as provided herein.
3. Section 10 of the Lease requires Landlord's written approval of any
proposed assignment of the Lease and Landlord has agreed to grant such approval
subject to the terms of this Agreement.
AGREEMENT
NOW, THEREFORE, for and in consideration of the facts mentioned above, the
mutual promises set forth below and other good and valuable consideration, the
sufficiency and receipt of which is hereby acknowledged, the parties hereto do
agree as follows:
1. Assignment. Subject to the terms hereof, Assignor does hereby assign
to Assignee all of its right, title and interest in and to the Lease as of
October 1, 2003 (the "Effective Date"). As of the Effective Date, Assignee
accepts, assumes and agrees to make all payments and to be bound by and perform
all covenants, conditions, obligations, and duties of Assignor under the Lease
first arising after the Effective Date.
2. Consent and Release. Landlord consents to the assignment of
Assignor's interests in and to the Lease to Assignee, but does not waive any
rights Landlord may have against Assignor that accrued prior to the date hereof.
Assignee shall be responsible to Landlord for any and all payment obligations
under the Lease, as well as the faithful performance of all of the terms and
conditions in the Lease arising after the Effective Date. Provided that there
shall not be any default hereunder or under the Lease, or under that certain
lease entered into by Assignor and Orsett/Piedmont Limited Partnership of even
date herewith (the "Other Lease"), Landlord will release Assignor from its
obligations under the Lease as of the Effective Date. Assignor understands and
agrees that such release will not relate to any rights or actions or obligations
(including, without limitation, indemnity obligations) of Assignor that may
exist or accrue prior to the Effective Date.
3. Assurances. Assignor represents and warrants to Assignee and Landlord
that (a) the Lease is in full force and effect and has not previously been
amended or modified except as reflected in Exhibit A, and (b) there exists no
event or circumstance that with or without notice, or the passage of time, or
both, could constitute a default or breach of the Lease by Landlord or by
Assignor. Landlord covenants and represents that it is the holder of the
interests of Landlord under the Lease, and has full right and authority to
enter into this Agreement.
4. Conditions Precedent. The effectiveness of tis Assignment is subject
to Assignor's compliance with following: (a) Assignor must surrender possession
of the Premises to Assignee on the Effective Date (the "Delivery Date"), and
Assignor will have no right to enter or occupy the Premises thereafter; (b)
from the date of this Agreement until the Effective Date, Assignor must pay all
Rent or other sums due Landlord as and when provided in the Lease and must
otherwise comply with its obligations under the Lease; and (c) Assignee shall
have executed and delivered the Other Lease to Orsett/Piedmont Limited
Partnership, shall have accepted the Premises as defined therein, and shall not
have been in default thereunder as of the Effective Date.
5. Tenant Reconciliations. Notwithstanding the Effective Date of this
Agreement or anything to the contrary set forth herein, if, as the result of
Landlord's reconciliation of Additional Rent for the calendar year ended
December 31, 2003, Assignor: (a) owes additional sums to Landlord for its share
of Additional Rent for such calendar year, Assignor shall be solely responsible
for the payment of the additional sums to Landlord, or (b) has paid Landlord
more than its share of Additional Rent for such calendar year, Assignor shall
be solely entitled to the refund for such overpayment.
6. Notices. As of the date of this Agreement, all written notices
required to be given by Landlord to the Tenant under the Lease shall be sent to
Assignee at the following address:
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Lease Admin.
7. No Amendment. Except as expressly provided herein, no provision of
this Agreement alters or modifies any of the terms and conditions of the Lease.
8. Severability. If any provision of this Agreement or its application to
any entity, person or circumstance shall be invalid or unenforceable to any
extent, the remainder of this Agreement and the application of such provisions
to other entities, persons or circumstances shall not be affected and shall be
enforced to the greatest extent permitted by law.
9. Entire Agreement. This document contains the entire agreement between
the
2
EXHIBIT A
FIRST AMENDMENT TO LEASE
LANDLORD: Orsett/Xxxxxxx L.L.C., an Arizona limited liability company
TENANT: Outsourcing Solutions, Inc., a Delaware corporation
DATE: September 2, 1998
Recitals
A. Landlord and Tenant previously entered into that certain Lease
Agreement dated May 19, 1998 (the "Lease"); and
B. Landlord and Tenant now wish to amend the terms of said Lease.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and in the Lease, the parties hereby agree as follows, all capitalized terms
having the same meaning as in the Lease unless specifically defined herein.
Agreement
1. Parking. Section 6.1 of the Lease is hereby amended to read in full
as follows:
"During the term of this Lease, Tenant shall have the use of 10
covered and reserved parking spaces (the exact location of which shall be
determined by Landlord) at no cost to Tenant. Tenant shall also have the
use of 50 uncovered parking spaces located in the surface parking area of
the Parking Facilities on a non-exclusive basis at no cost to Tenant.
Tenant shall not park in any areas that are reserved for other tenants or
in areas marked for visitor parking."
2. Interpretation. In the event of any conflict between the terms and
provisions of this First Amendment and the Lease, the terms and provisions of
this First Amendment shall govern and control.
3. Ratification. Except as expressly modified hereby, the Lease is
hereby ratified and confirmed in its entirety.
IN WITNESS WHEREOF, Landlord and Tenant have executed this First Amendment
as of the date first appearing above.
ORSETT/XXXXXXX L.L.C., an Arizona limited
liability company
By: -s- ?
-------------------------------------
Its: Member
------------------------------------
"Landlord"
OUTSOURCING SOLUTIONS, INC., a Delaware
corporation
By: -s- Xxxxx X. Xxxxxxxxx
-------------------------------------
Its: Senior Vice President
------------------------------------
"Tenant"
2
parties regarding the matter addressed by this Agreement. No variations,
modifications or changes relating to this Agreement shall be binding upon any
party unless set forth in a document duly executed by or on behalf of such
party.
10. Due Authorization. Each party represents that the person executing
this Agreement for such party is acting on behalf of such party and is duly
authorized to execute this Agreement for such party.
11. Governing Law. The law of the State of Arizona shall govern the
validity, interpretation, construction and performance of this Agreement.
12. Successors and Assigns. The provisions of this Agreement shall bind
and inure to the benefit of the representatives, successors and assigns of the
parties hereto.
13. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same Agreement.
[Signatures on following page]
3
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
LANDLORD: ORSETT/XXXXXXX LLC, an Arizona limited liability company
By: CRF Manager, Inc.
Its: Manager
By: XXXX XXXXXX
---------------------
Name: XXXX XXXXXX
-------------------
Title: Secretary
------------------
ASSIGNOR: ASSET ACCEPTANCE LLC, a Delaware limited liability company
By: XX Xxxxxxx
-----------------------
Name: X.X. Xxxxxxx
---------------------
Title: Pres/CEO
--------------------
ASSIGNEE: ORSETT PROPERTIES, LTD., an Arizona corporation
By: XXXX XXXXXX
-----------------------
Name: XXXX XXXXXX
---------------------
Title: CEO
--------------------
4
EXHIBIT "A"
PARCEL NO. 1:
Lot 3, of WESTMOUNT TECH CENTER, according to the plat of record in the office
of the County Recorder of Maricopa County Arizona, recorded in Book 283 of Maps,
Page 7;
EXCEPT BEGINNING at the Southwest xxxxxx of said Lot 3;
thence North 00 degrees 53 minutes 32 seconds West, along the West line of said
Lot 3, a distance of 425.31 feet, to the beginning of a tangent curve, concave
Southeasterly, said curve having a radius of 291.28 feet;
thence Northeasterly along the arc of said curve and said West line, through a
central angle of 34 degrees 38 minutes 36 seconds, a distance of 176.12 feet,
to the beginning of a compound curve, concave Southeasterly, said curve
having a radius of 40.00 feet;
thence Northeasterly along the arc of said curve and said West line, through a
central angle of 43 degrees 06 minutes 49 seconds, a distance of 30.10 feet, to
the beginning of a reverse curve, concave Northwesterly, said curve having a
radius of 60.0 feet;
thence Northeasterly along the arc of said curve and said West line, through a
central angle of 43 degrees 06 minutes 49 seconds, a distance of 45.15 feet,
to the Northernmost corner line of said Lot 3;
thence South 56 degrees 14 minutes 56 seconds East, along said North line, a
distance of 40.00 feet;
thence North 89 degrees 26 minutes 14 seconds East, along said North line, a
distance of 275.46 feet; to a line parallel to and 421.07 feet Easterly of the
tangent portion of the West line of said Lot 3;
thence South 00 degrees 53 minutes 32 seconds East, a distance of 607.45 feet,
to the South line of said Lot 3;
thence South 89 degrees 06 minutes 28 seconds West, along the South line of
said Lot 3, a distance of 421.07 feet to the POINT OF BEGINNING.
PARCEL NO. 2:
An Easement for ingress and egress as created in instrument recorded June 10,
1986 in 86-290529, of Official Records and First Amendment recorded July 15,
1991 in 91-325216, of Official Records.
