XXXXXX XXXXX
XXXXXXX XXXX XXXXXX
XXXXX XXXX XXXXXX LIMITED PARTNERSHIP,
a Delaware limited partnership,
as Landlord,
and
MICROAGE COMPUTER CENTERS, INC.,
a Delaware corporation,
as Tenant.
CENTRAL PARK SQUARE
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TABLE OF CONTENTS
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ARTICLE SUBJECT MATTER
------- --------------
ARTICLE 1 REAL PROPERTY, BUILDING AND PREMISES
ARTICLE 2 LEASE TERM
ARTICLE 3 BASE RENT AND INTERIM RENT
ARTICLE 4 ADDITIONAL RENT
ARTICLE 5 USE OF PREMISES
ARTICLE 6 SERVICES AND UTILITIES
ARTICLE 7 REPAIRS
ARTICLE 8 ADDITIONS AND ALTERATIONS
ARTICLE 9 COVENANT AGAINST LIENS
ARTICLE 10 INSURANCE
ARTICLE 11 DAMAGE AND DESTRUCTION
ARTICLE 12 NONWAIVER
ARTICLE 13 CONDEMNATION
ARTICLE 14 ASSIGNMENT AND SUBLETTING
ARTICLE 15 SURRENDER OF PREMISES; OWNERSHIP AND
REMOVAL OF TRADE FIXTURES
ARTICLE 16 HOLDING OVER
ARTICLE 17 ESTOPPEL CERTIFICATES
ARTICLE 18 SUBORDINATION
ARTICLE 19 DEFAULTS; REMEDIES
ARTICLE 20 COVENANT OF QUIET ENJOYMENT
ARTICLE 21 [INTENTIONALLY DELETED]
ARTICLE 22 SUBSTITUTION OF OTHER PREMISES
ARTICLE 23 SIGNS
ARTICLE 24 COMPLIANCE WITH LAW
ARTICLE 25 LATE CHARGES
ARTICLE 26 RIGHT TO CURE DEFAULT; PAYMENTS
ARTICLE 27 ENTRY BY LANDLORD
ARTICLE 28 TENANT PARKING
ARTICLE 29 MISCELLANEOUS PROVISIONS
EXHIBITS
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EXHIBIT A OUTLINE OF FLOOR PLAN OF PREMISES
EXHIBIT A-1 DEPICTION OF RESERVED PARKING SPACES
EXHIBIT B TENANT WORK LETTER
EXHIBIT C NOTICE OF LEASE TERM DATES
EXHIBIT D RULES AND REGULATIONS
(i)
EXHIBIT E FORM OF TENANT'S ESTOPPEL CERTIFICATE
EXHIBIT F FORM OF SUBORDINATION, NON-DISTURBANCE AND
ATTORNMENT AGREEMENT
(ii)
CENTRAL PARK SQUARE
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INDEX OF MAJOR DEFINED TERMS
----------------------------
LOCATION
OF DEFINITION
DEFINED TERMS IN OFFICE LEASE
------------- ---------------
Additional Rent 7
Alterations 14
Approved Working Drawings Exhibit B
Architect Exhibit B
Availability Notice 3
Availability Space 3
Base Rent 6
Base Year 7
Basic Terms 4
BOMA 11
Brokers 35
Building l
Building Top Signage 28
Cabling Exhibit B
Calendar Year 7
Common Areas 11
Construction Drawings Exhibit B
Contract Exhibit B
Contractor Exhibit B
Cost Pools 8
Damage Repair Estimate 17
Direct Competitors 38
Direct Expenses 7
Early Occupancy Space 6
Election Date 3
Engineers Exhibit B
Environmental Condition 38
Estimate 10
Estimate Statement 10
Estimated Excess 10
Excess 10
Expense Year 7
Final Retention Exhibit B
Final Space Plan Exhibit B
Final Working Drawings Exhibit B
(iii)
First Refusal Notice 2
First Refusal Space 2
Force Majeure 34
Hazardous Material 3 7
Holidays 12
Interest Notice 5
Interest Rate 30
Interim Rent 6
Interim Term 6
Invoice 3 1
Landlord 11
Landlord Delays Exhibit B
Landlord Parties 15
Laws 37
Lease 11
Lease Commencement Date 4
Lease Expiration Date 4
Lease Notice 4
Lease Term 4
Lease Year 4
Must Take Effective Date 2
Must Take Rent Commencement Date 2
Must Take Space 2
Notices 3 5
Objectionable Name 29
Operating Expenses 7
Option Notice 4
Option Rent 5
Option Rent Notice 5
Option Term 4
Original Tenant 2
Outside Agreement Date 5
Parking Facilities 11
Partial Floor Premises 28
Permitted Transfer 19
Premises 11
Real Property 11
Renovations 36
Rent 7
Response Notice 4
Review Period 11
Rules and Regulations 11
SNDA 24
(iv)
Specifications Exhibit B
Standard Improvement Package Exhibit B
Statement 10
Subject Space 20
Subleasing Costs 21
Summary 11
Superior Leases 2
Superior Rights 3
Systems and Equipment 8
Tax Expenses 8
Tenant 11
Tenant Improvement Allowance Exhibit B
Tenant Improvement Allowance Items Exhibit B
Tenant Improvements Exhibit B
Tenant Representative 11
Tenant's Agents Exhibit B
Tenant's Election Notice 4
Tenant's Share 9
Transfer Notice 19
Transfer Premium 21
Transferee 19
Transfers 19
(v)
CENTRAL PARK SQUARE
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SUMMARY OF BASIC LEASE INFORMATION
----------------------------------
The undersigned hereby agree to the following terms of this Summary of
Basic Lease Information (the "Summary"). This Summary is hereby incorporated
into and made a part of the attached Office Lease (this Summary and the Office
Lease to be known collectively as the "Lease") which pertains to the office
building (the "Building") which is located at 0000 Xxxxx Xxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxx 00000. Each reference in the Office Lease to any term of this
Summary shall have the meaning as set forth in this Summary for such term. In
the event of a conflict between the terms of this Summary and the Office Lease,
the terms of the Office Lease shall prevail. Any capitalized terms used herein
and not otherwise defined herein shall have the meaning as set forth in the
Office Lease.
TERMS OF LEASE
(References are to the Office Lease DESCRIPTION
----------------------------------- -----------
1. Date: _______________________, 1997
2. Landlord: WHCPS REAL ESTATE LIMITED
PARTNERSHIP, a Delaware limited partnership
3. Address of Landlord WHCPS Real Estate Limited Partnership
(Section 29.19): c/o WCB Properties
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxxx X. Lack
4. Tenant: MICROAGE COMPUTER CENTERS, INC.,
a Delaware corporation.
Tenant's Affiliates: MICROAGE, Inc. and any subsidiary of
MICROAGE, Inc.
5. Address of Tenant and Tenant's 0000 X. XXXXXXXX Xxx
Affiliates (Section 29.19): Xxxxx, Xxxxxxx 00000
Attention: V. P. Administration
(Prior to Lease Commencement Date)
(vi)
and
0000 X. XXXXXXXX Xxx
Xxxxx, Xxxxxxx 00000
Attention: V. P. Administration
(After Lease Commencement Date)
6. Premises (Article 1): Initially, approximately 54,522 rentable square feet
of space located on the first (1st), seventh (7th),
eighth (8th) and ninth (9th) floors, as set forth in
Exhibit A attached hereto. Effective on the Must
Take Effective Date, the Premises will increase to
include approximately 26,906 rentable square feet
of space located on the third (3rd) floor, as set forth
on Exhibit A attached hereto, for a total of 81,428
rentable square feet.
7. Term (Article 2).
7.1 Lease Term: Five (5) years and six (6) months.
7.2 Lease Commencement The earlier of (i) the date Tenant commences
Date: business in the Premises (excluding the Early
Occupancy Space), and (ii)
the date that is sixty (60)
days following Landlord's
delivery of the Premises to
Tenant.
7.3 Lease Expiration Date: Five (5) years and six (6) months following the Lease
Commencement Date (however, if the Lease
Commencement Date is not the first day of the month,
then the foregoing time period shall commence to run
on the first day of the month following the months in
which the Lease Commencement Date occurs).
(vii)
8. Base Rent (Article 3):
Annual
Monthly Rental Rate
Annual Installment per Rentable
Lease Year Base Rent of Base Rent Square Foot
---------- --------- ------------ -----------
Lease Commencement $1,547,132.00 $128,927.67* $19.00
Date - Lease Year 2
Lease Year 3 - Lease Year 4 $1,628,560.00 $135,713.33 $20.00
Lease Year 5 - Lease $1,709,988.00 $142,499.00 $21.00
Expiration Date
*Note: Until the Must Take Rent Commencement Date, the Monthly
Installment of Base Rent will be $86,326.50, based upon 54,522
rentable square feet.
9. Additional Rent (Article 4).
9.1 Base Year: Calendar year 1997.
9.2 Tenant's Share of Initially, approximately 23.82%. Upon the Must
Direct Expenses: Take Effective Date, Tenant's share of Direct
Expenses will increase to approximately 35.58%.
10. Security Deposit Waived.
(Article 21):
11. Parking Pass Ratio Five (5) parking passes for every 1,000 rentable
(Article 28): square feet of the Premises, ten percent (10%) of
which will provide for reserved parking at the
locations depicted on Exhibit X- 0.
00. Broker CB Commercial Real Estate Group, Inc.
(Section 29.25):
13. Interim Rent $15,833.33 per month.
(Section 3.1):
(viii)
The foregoing terms of this Summary are hereby agreed to by Landlord and Tenant.
"Landlord":
WHCPS REAL ESTATE LIMITED
PARTNERSHIP, a Delaware limited partnership
By: WHCPS GEN-PAR, INC.,
a Delaware corporation
General Partner
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
"Tenant":
MICROAGE COMPUTER CENTERS, INC.
By:
-------------------------------------
Xxxx X. Xxxxx
Vice President Administration
(ix)
CENTRAL PARK SQUARE
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OFFICE LEASE
------------
This Office Lease, which includes the preceding Summary of Basic Lease
Information (the "Summary") attached hereto and incorporated herein by this
reference (the Office Lease and Summary to be known sometimes collectively
hereafter as the "Lease"), dated as of the date set forth in Section 1 of the
Summary, is made by and between WHCPS REAL ESTATE LIMITED PARTNERSHIP, a
Delaware limited partnership ("Landlord"), and MICROAGE COMPUTER CENTERS, INC.,
a Delaware corporation ("Tenant").
ARTICLE 1
---------
REAL PROPERTY, BUILDING AND PREMISES
------------------------------------
1.1 Real Property. Building and Premises. Upon and subject to the
terms, covenants and conditions hereinafter set forth in this Lease, Landlord
hereby leases to Tenant and Tenant hereby leases from Landlord the premises set
forth in Section 6 of the Summary (the "Premises"), which Premises are located
in the "Building," as that term is defined in this Section 1.1. The outline of
the floor plan of the Premises is set forth in Exhibit A attached hereto. The
Premises are a part of the building (the "Building") located at 0000 Xxxxx
Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000. The Building, the parking facilities
serving the Building ("Parking Facilities"), the outside plaza areas, land and
other improvements surrounding the Building which are designated from time to
time by Landlord as common areas appurtenant to or servicing the Building, and
the land upon which any of the foregoing are situated, are herein sometimes
collectively referred to as the "Real Property." Tenant is hereby granted the
right to the nonexclusive use of the common corridors and hallways, stairwells,
elevators, restrooms and other public or common areas located on the Real
Property ("Common Areas"); provided, however, that the manner in which such
Common Areas are maintained and operated shall be at the sole discretion of
Landlord and the use thereof shall be subject to such reasonable Rules and
Regulations as Landlord may make from time to time. Landlord reserves the right
to make alterations or additions to or to change the location of elements of the
Real Property and the Common Areas.
1.2 Delivery and Condition of the Premises. Except as specifically set
forth in this Lease, Landlord shall not be obligated to provide or pay for any
improvement work or services related to the improvement of the Premises. Tenant
also acknowledges that Landlord has made no representation or warranty regarding
the condition of the Premises or the Building except as specifically set forth
in this Lease. Landlord shall deliver the Premises to Tenant within two (2)
business days following the full execution hereof by Tenant and Tenant's
delivery to Landlord of the first month's installment of Base Rent and Interim
Rent and evidence of insurance coverage required of Tenant pursuant to Article
10. The Premises shall be improved by Tenant in accordance with the Tenant Work
Letter attached hereto as Exhibit B and incorporated herein by reference.
1.3 Verification of Rentable Square Feet of Premises and Building. For
purposes of this Lease, "rentable square feet" shall mean "rentable area"
calculated pursuant to the Standard Method for Measuring Floor Area in Office
Buildings, ANSVBOMA Z65.1 - 1996 ("BOMA"), provided that the rentable square
footage of the Building may include all of, and the rentable square footage of
the Premises therefore may include a portion of, the square footage of the
ground floor Common Areas located within the Building and the Common Area and
other space in the Building dedicated to the service of the Building. At
Landlord's discretion, the number of rentable square feet of the Premises and
the Building shall be subject to verification from time to time by Landlord's
space measurement consultant, and such verification shall be made in accordance
with the provisions of this Article 1. Tenant's architect may consult with
Landlord's space measurement consultant regarding verification of the number of
rentable square feet of the Premises; however, the determination of Landlord's
space measurement consultant shall be conclusive and binding upon the parties.
In the event that Landlord's space measurement consultant determines that the
amounts thereof shall be different from those set forth in this Lease, Landlord
shall modify all amounts, percentages and figures appearing or referred to in
this Lease to conform to such corrected rentable square footage (including,
without limitation, the amount of the "Rent, " as that term is defined in
Article 4 of this Lease). If such modification is made, it will be confirmed in
writing by Landlord to Tenant.
1.4 Must Take Space. Tenant and Landlord agree to add to the Premises
approximately 26,906 additional rentable square feet of space located on the
third (3rd) floor of the Building as set forth on Exhibit A attached hereto
("Must Take Space"). The effective date of Tenant's lease of the Must Take Space
(the "Must Take Effective Date") shall be the date of Landlord's delivery of the
Must Take Space to Tenant. The date that Tenant's obligation to commence the
payment of Rent for the Must Take Space (the "Must Take Rent Commencement Date")
shall be the earlier of (i) the date Tenant commences business in the Must Take
Space and (ii) sixty (60) days following the Must Take Effective Date. Tenant's
lease of the Must Take Space shall be on the same terms and conditions as affect
the original Premises throughout the Lease Term, including, without limitation,
the same Base Rent rate (per rentable square foot) as then applies to the
original Premises, provided, however, that Tenant's Share of Direct Expenses
shall be increased to take into account the additional number of rentable square
feet of the Must Take Space. The Must Take Space shall be improved in accordance
with the Tenant Work Letter Agreement attached hereto as Exhibit B as if the
Must Take Space were the original Premises. The Lease Term for the Must Take
Space and Tenant's obligation to pay Rent with respect to the Must Take Space
shall commence upon the Must Take Rent Commencement Date and shall expire
co-terminously with the Lease Term for the original Premises. Landlord shall not
be liable to Tenant or otherwise be in default hereunder in the event that
Landlord is unable to deliver the Must Take Space to Tenant on the projected
delivery date thereof due to the failure of any other tenant to timely vacate
and surrender to Landlord such Must Take Space, or any portion thereof;
provided, however, Landlord agrees to use its commercially reasonable efforts to
enforce its right to possession of such Must Take Space against such other
tenant. Promptly after Landlord's delivery of the Must Take Space to Tenant,
Landlord and Tenant shall, at either party's election, execute an instrument
acknowledging the date of the Must Take Effective Date and the Must Take Rent
Commencement Date.
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1.5 Right of First Refusal. Landlord hereby grants to the Tenant named
in the Summary ("Original Tenant") a right of first refusal with respect to all
remaining space located on the first (1st), second (2nd), fourth (4th), sixth
(6th) and tenth (10th) floors of the Building (collectively, the "First Refusal
Space"). Notwithstanding the foregoing (i) for First Refusal Space which is
subject to a lease as of the date of this Lease, such first refusal right of
Tenant shall commence only following the expiration or earlier termination of
such existing lease (such existing leases may be collectively referred to herein
as the "Superior Leases"), including any renewal of such Superior Leases,
whether or not such renewal is pursuant to an express written provision in such
lease, and regardless of whether any such renewal is consummated pursuant to a
lease amendment or a new lease, and (ii) such first refusal right shall be
subordinate and secondary to all rights of expansion, first refusal, first offer
or similar rights granted to the tenant(s) of the Superior Leases or any other
leases existing as of the date of this Lease (the rights described in items (i)
and (ii), above to be known collectively, for purposes of this Section 1.5 only,
as "Superior Rights"). Tenant's right of first refusal shall be on the terms and
conditions set forth in this Section 1.5. Notwithstanding the foregoing, if any
right of expansion, first refusal, first offer or other similar right is granted
under any renewal of a Superior Lease or an existing lease, and if the granting
of such right is not required by the terms of the Superior Lease or existing
lease, then such right will not be a Superior Right.
1.5.1 Procedure for Notice. Landlord shall notify Tenant (the
"First Refusal Notice") from time to time when Landlord receives a proposal or
request for proposal that Landlord would seriously consider for all or any
portion of the First Refusal Space, where no holder of a Superior Right desires
to lease such space. The First Refusal Notice shall describe the space which is
the subject of the proposal or request for proposal and shall set forth the
terms and conditions (including the proposed lease term) set forth in the
proposal or request for proposal (collectively, the "Terms"). Notwithstanding
the foregoing, Landlord's obligation to deliver the First Refusal Notice shall
not apply during the last nine (9) months of the Lease Term unless Tenant has
delivered an Interest Notice to Landlord pursuant to Section 2.2.2 below nor
shall Landlord be obligated to deliver the First Refusal Notice during the last
six (6) months of the Lease Term unless Tenant has delivered the Option Notice
to Landlord pursuant to Section 2.2.2 below.
1.5.2 Procedure for Acceptance. If Tenant wishes to exercise
Tenant's right of first refusal with respect to the space described in the First
Refusal Notice, then within five (5) business days after delivery of the First
Refusal Notice to Tenant (the "Election Date"), Tenant shall deliver written
notice to Landlord ("Tenant's Election Notice") pursuant to which Tenant shall
elect either to (i) lease the entire First Refusal Space described in the First
Refusal Notice upon the Terms set forth in the First Refusal Notice; (ii) refuse
to lease such First Refusal Space identified in the First Refusal Notice,
specifying that such refusal is not based upon the Terms set forth by Landlord
in the First Refusal Notice, but upon Tenant's lack of need for such First
Refusal Space, in which event Landlord may lease such First Refusal Space to any
person or entity on any terms Landlord desires and Tenant's right of first
refusal with respect to the First Refusal Space specified in Landlord's First
Refusal Notice shall thereupon terminate and be of no further force or effect;
or (iii) refuse to lease the First Refusal Space, specifying that such refusal
is based upon the Terms set forth in the First Refusal Notice, in which event
Tenant shall also specify in Tenant's Election Notice revised Terms upon which
3
Tenant would be willing to lease such First Refusal Space from Landlord. If
Tenant does not so respond in writing to Landlord's First Refusal Notice by the
Election Date, Tenant shall be deemed to have elected the option described in
clause (ii) above. If Tenant timely delivers to Landlord Tenant's Election
Notice pursuant to clause (iii) above, Landlord may elect either to: (a) lease
such First Refusal Space to Tenant upon the revised Terms specified by Tenant in
Tenant's Election Notice; or (b) lease the First Refusal Space to any person or
entity upon any terms Landlord desires; provided, however, if (1) the Terms of
Landlord's proposed lease to said third party are materially more favorable to
the third party than those Terms proposed by Tenant in Tenant's Election Notice,
or (2) the size of the First Refusal Space to be leased to such third party is
less than the size of the First Refusal Space offered to Tenant, before entering
into such third party lease, Landlord shall notify Tenant of such more favorable
Terms (or such reduced size) and Tenant shall have the right to lease the First
Refusal Space upon such more favorable Terms (or as to such reduced size) by
delivering written notice thereof to Landlord within five (5) business days
after Tenant's receipt of Landlord's notice. If Tenant does not elect to lease
such space from Landlord within said five (5) business day period, Tenant shall
be deemed to have elected the option described in clause (ii) above and Tenant's
right of first refusal with respect to the First Refusal Space specified in
Landlord's First Refusal Notice shall thereupon terminate and be of no further
force or effect.
1.5.3 Lease of First Refusal Space. If Tenant timely exercises
Tenant's right to lease the First Refusal Space as set forth herein, Landlord
and Tenant shall execute an amendment to this Lease incorporating into this
Lease the Terms applicable to such First Refusal Space.
1.5.4 Termination of Right of First Refusal. The rights set
forth in this Section 1.5, and Landlord's obligations with respect thereto,
shall be personal to the Original Tenant and Tenant's Affiliates. The right of
first refusal granted herein shall terminate as to a particular First Refusal
Space upon the failure by Tenant to exercise its right of first refusal with
respect to such First Refusal Space as offered by Landlord but shall remain in
effect for any subsequent availability of all or any portion of the remaining
First Refusal Space. Tenant shall not have the right to lease the First Refusal
Space if, as of the date of the attempted exercise of any right of first refusal
by Tenant, or, at Landlord's option, as of the scheduled date of delivery of
such First Refusal Space to Tenant, Tenant is in material default under this
Lease after any applicable notice and cure periods.
1.6 Right of Availability. Tenant shall has e a right of availability
with respect to any then available space in the Building that is not subject to
the right of first refusal under Section 1.5 above ("Availability Space") upon
the terms and conditions set forth in this Section 1.6. Tenant's right of
availability shall be subject and subordinate to any then-existing expansion,
extension, first offer, first refusal or similar rights granted under lease to
any other tenant of the Building and any potential tenant with whom Landlord has
signed or is negotiating a request for proposal or a letter of intent
(collectively and for purposes of this Section 1.6 only, the "Superior Rights").
Landlord shall, every six (6) months during the Term, deliver to Tenant a notice
(the "Availability Notice") indicating which of the Availability Space is then
available or is expected to become available in the next six (6) months. If
Tenant desires to lease any portion of the Availability Space described in the
4
Availability Notice, Tenant may so notify Landlord (the "Lease Notice"), which
Lease Notice shall describe the number of square feet and location so desired by
Tenant. Within ten (10) business days after Landlord's receipt of the
Availability Notice, Landlord shall notify Tenant in writing ("Response
Notice"), Landlord's proposed terms and conditions applicable to Tenant's lease
of such space including, without limitation, the proposed rental rate, Base
Year, term of such lease, rentable abatement concessions (if any) and any
contribution by Landlord toward the improvement of such space (collectively, the
"Basic Terms"). Within five (5) business days after Tenant's receipt of
Landlord's Response Notice, Tenant shall notify Landlord in writing whether
Tenant accepts such proposed Basic Terms or whether Tenant elects to negotiate,
in good faith, such Basic Terms ("Tenant's Election Notice"). If, in Tenant's
Election Notice, Tenant accepts such Basic Terms, then Landlord and Tenant shall
promptly enter into an amendment to this Lease incorporating into this Lease the
Basic Terms applicable to such space. If, in Tenant's Election Notice, Tenant
elects to negotiate such Basic Terms, the parties shall enter into good faith
negotiations for a period of fifteen (15) days after Landlord's receipt of
Tenant's Election Notice. If Landlord and Tenant reach an agreement on the
negotiated Basic Terms, then Landlord and Tenant shall enter into an amendment
to this Lease incorporating into this Lease the negotiated Basic Terms
applicable to such space. If Landlord and Tenant are unable to reach agreement
on such Basic Terms within said fifteen (15) day period, or if Tenant fails to
timely give Tenant's Election Notice, Tenant shall have no further rights to
such portion of the Availability Space specified in Landlord's Response Notice,
and Landlord shall be free to lease such space to anyone to whom Landlord
desires on any terms Landlord desires, until the later to occur of ninety (90)
days thereafter or the date of Tenant's delivery of another Lease Notice for
such space. The right of availability set forth in this Section 1.5 and
Landlord's obligations with respect thereto shall be personal to, and may only
be exercised by, the Original Tenant and/or Tenant's Affiliates. Tenant shall
not have the right to lease Availability Space if, as of the date of the
attempted exercise of any such right by Tenant, or, at Landlord's option, as of
the scheduled date of delivery of such space to Tenant, Tenant is in default
under this Lease after any applicable notice and cure periods. Notwithstanding
the foregoing, Tenant's rights and Landlord's obligation under this Section 1.6
shall not apply during the last nine (9) months of the Lease Term unless Tenant
has delivered an Interest Notice to Landlord pursuant to Section 2.2.2 below nor
shall Landlord be obligated to deliver the First Refusal Notice during the last
six (6) months of the Lease Term unless Tenant has delivered the Option Notice
to Landlord pursuant to Section 2.2.2 below.
ARTICLE 2
---------
LEASE TERM
----------
2.1 Initial Term. The terms and provisions of this Lease shall be
effective as of the date of this Lease except for the provisions of this Lease
relating to the payment of Rent. The term of this Lease (the "Lease Term") shall
be as set forth in Section 7.1 of the Summary and shall commence on the date
(the "Lease Commencement Date") set forth in Section 7.2 of the Summary
(subject, however, to the terms of the Tenant Work Letter, if applicable), and
shall terminate on the date (the "Lease Expiration Date" set forth in Section
7.3 of the Summary, unless this Lease is sooner terminated as hereinafter
5
provided. For purposes of this Lease, the term "Lease Year" shall mean each
consecutive twelve (12) month period during the Lease Term, provided, however,
that the first Lease Year shall commence on the Lease Commencement Date and end
on the last day of the eleventh month thereafter and the second and each
succeeding Lease Year shall commence on the first day of the next calendar
month; and further provided that the last Lease Year shall end on the Lease
Expiration Date. At any time during the Lease Term, Landlord may deliver to
Tenant a notice of Lease Term dates in the form as set forth in Exhibit C,
attached hereto, which notice Tenant shall execute and return to Landlord within
ten (10) business days of receipt thereof.
2.2 Option Term. Landlord hereby grants to the Original Tenant two (2)
options to extend the Lease Term for a period of five (5) years (each an "Option
Term"), which options shall be exercisable only by written notice ("Option
Notice") delivered by Tenant to Landlord as provided in Section 2.2.2 below,
provided that, as of the date of delivery of such notice and, at Landlord's
option, as of the last day of the Lease Term, Tenant is not in material default
under this Lease after expiration of applicable cure periods. The right
contained in this Section 2.2 shall be personal to the Original Tenant and may
only be exercised by the Original Tenant or any of Tenant's Affiliates that have
succeeded to the Original Tenant's interest under this Lease (and not any other
assignee, sublessee or other transferee of the Original Tenant's interest in
this Lease) if the Original Tenant and/or any of Tenant's Affiliates
collectively occupy the entire Premises as of the date of the Option Notice.
2.2.1 Option Rent. The Rent payable by Tenant during the
Option Term (the "Option Rent") shall be equal to ninety-five percent (95%) of
the then prevailing fair market rent for the Premises (together with the fair
market rental value of the parking rights granted under Article 28) as of the
commencement date of the Option Term, but in no event may the Option Rent be
less than ninety percent (90%) of the sum of Base Rent plus Tenant's Share of
Direct Expenses payable by Tenant immediately prior to the Option Term. The then
prevailing fair market rent shall be the rental rate, including all escalations,
at which new, non-renewal tenants, as of the commencement of the Option Term,
are leasing non-sublease, non-encumbered space comparable in size, location and
quality to the Premises for a term of five (5) years, which comparable space is
located in the Building taking into consideration the following concessions: (a)
rental abatement concessions, if any, being granted such tenants in connection
with such comparable space and (b) tenant improvements or allowances provided or
to be provided for such comparable space, taking into account, and deducting the
value of, the existing improvements in the Premises, with such value to be based
upon the age, quality and layout of the improvements and the extent to which the
same could be utilized by Tenant based upon the fact that the precise tenant
improvements existing in the Premises are specifically suitable to Tenant.
2.2.2 Exercise of Option. The option contained in this Section
2.2 shall be exercised by Tenant, if at all, only in the following manner: (i)
Tenant shall deliver written notice ("Interest Notice") to Landlord on or before
the date which is nine (9) months prior to the expiration of the Lease Term,
stating that Tenant is interested in exercising its option; (ii) Landlord, after
receipt of Tenant's notice, shall deliver notice (the "Option Rent Notice") to
Tenant not less than seven (7) months prior to the expiration of the Lease Term,
6
setting forth the Option Rent; and (iii) if Tenant wishes to exercise such
option, Tenant shall, on or before the earlier of (A) the date occurring six (6)
months prior to the expiration of the Lease Term, and (B) the date occurring
thirty (30) days after Tenant's receipt of the Option Rent Notice, exercise the
option by delivering the Option Notice to Landlord and upon, and concurrent
with, such exercise, Tenant may, at its option, object to the Option Rent
determined by Landlord. If Tenant exercises the option to extend but objects to
the Option Rent contained in the Option Rent Notice, the parties shall follow
the procedure, and the Option Rent shall be determined, as set forth in Section
2.2.3 below. Failure of Tenant to deliver the Interest Notice to Landlord on or
before the date specified in (i) above or to deliver the Option Notice to
Landlord on or before the date specified in (iii) above shall be deemed to
constitute Tenant's failure to exercise its option to extend. If Tenant timely
and properly exercises its option to extend, the Lease Term shall be extended
for the Option Term upon all of the terms and conditions set forth in this
Lease, except that the Rent shall be as indicated in the Option Rent Notice or
as determined in accordance with Section 2.2.3 below, as applicable.
2.2.3 Determination of Option Rent. In the event Tenant
exercises its option to extend but objects to Landlord's determination of the
Option Rent concurrently with its exercise of the option to extend, Landlord and
Tenant shall attempt to agree in good faith upon the Option Rent. If Landlord
and Tenant fail to reach agreement within twenty (20) days following Tenant's
delivery of the Option Notice (the "Outside Agreement Date") then each party
shall make a separate determination of the Option Rent, within five (5) business
days after the Outside Agreement Date, concurrently exchange such determinations
and such determinations shall be submitted to arbitration in accordance with
Sections 2.2.3.1 through 2.2.3.7 below.
2.2.3.1 Landlord and Tenant shall each appoint one
arbitrator who shall by profession be a real estate broker or appraiser who
shall have been active over the five (5) year period ending on the date of such
appointment in the leasing (or appraisal, as the case may be) of commercial
high-rise properties in the central corridor area of Phoenix. The determination
of the arbitrators shall be limited solely to the issue area of whether
Landlord's or Tenant's submitted Option Rent is the closest to the actual Option
Rent, as determined by the arbitrators, taking into account the requirements of
Section 2.2.1 of this Lease. Each such arbitrator shall be appointed within
fifteen (15) business days after the applicable Outside Agreement Date.
2.2.3.2 The two (2) arbitrators so appointed shall
within five (5) days of the date of the appointment of the last appointed
arbitrator agree upon and appoint a third arbitrator who shall be qualified
under the same criteria set forth hereinabove for qualification of the initial
two (2) arbitrators.
2.2.3.3 The three (3) arbitrators shall within five
(5) days of the appointment of the third arbitrator reach a decision as to
whether the parties shall use Landlord's or Tenant's submitted Option Rent and
shall notify Landlord and Tenant thereof.
7
2.2.3.4 The decision of the majority of the three
(3) arbitrators shall be binding upon Landlord and Tenant.
2.2.3.5 If either Landlord or Tenant fails to
appoint an arbitrator within fifteen (15) business days after the applicable
Outside Agreement Date, the arbitrator appointed by one of them shall reach a
decision, notify Landlord and Tenant thereof, and such arbitrator's decision
shall be binding upon Landlord and Tenant.
2.2.3.6 If the two (2) arbitrators fail to agree
upon and appoint a third arbitrator, or both parties fail to appoint an
arbitrator, then the appointment of the third arbitrator or any arbitrator shall
be dismissed and the Option Rent to be decided shall be forthwith submitted to
arbitration under the provisions of the American Arbitration Association, but
subject to the instruction set forth in this Section 2.2.3.
2.2.3.7 The cost of arbitration shall be paid by
Landlord and Tenant equally.
ARTICLE 3
---------
BASE RENT AND INTERIM RENT
--------------------------
3.1 Interim Rent. As consideration for Tenant's occupancy of, and
conduct of business within, approximately 10,000 rentable square feet of the
Premises (the "Early Occupancy Space") from the date of Landlord's delivery of
the Premises to Tenant until the Lease Commencement Date (the "Interim Term"),
Tenant shall pay to Landlord at the location designated in Section 3.2 below,
rent in the monthly amount of Fifteen Thousand Eight Hundred Thirty-Three and
33/100 Dollars ($15,833.33) ("Interim Rent"), without notice, deduction or
setoff, commencing upon the commencement of the Interim Term and continuing on
the first day of each month thereafter during the Interim Term, provided,
however, Interim Rent for the first full month shall be paid at the time of
Tenant's execution of this Lease. Interim Rent for any partial month shall be
prorated as set forth in Section 3.2 below.
3.2 Base Rent. Tenant shall pay, without notice or demand, to Landlord
or Landlord's agent at the management office of the Building, or at such other
place within the continental United States as Landlord may from time to time
designate in writing, in currency or a check for currency which, at the time of
payment, is legal tender for private or public debts in the United States of
America, base rent ("Base Rent") as set forth in Section 8 of the Summary,
payable in equal monthly installments as set forth in Section 8 of the Summary
in advance on or before the first day of each and every month during the Lease
Term, without any setoff or deduction whatsoever. The Base Rent for the first
full month of the Lease Term, which occurs after the expiration of any free rent
period, shall be paid at the time of Tenant's execution of this Lease. If any
rental payment date (including the Lease Commencement Date) falls on a day of
the month other than the first day of such month or if any rental payment is for
a period which is shorter than one month, then the rental for any such
8
fractional month shall be a proportionate amount of a full calendar month's
rental based on the proportion that the number of days in such fractional month
bears to the number of days in the calendar month during which such fractional
month occurs. All other payments or adjustments required to be made under the
terms of this Lease that require proration on a time basis shall be prorated on
the same basis.
ARTICLE 4
---------
ADDITIONAL RENT
---------------
4.1 Additional Rent. In addition to paying the Base Rent specified in
Article 3 of this Lease, Tenant shall pay as additional rent "Tenant's Share" of
the annual "Direct Expenses," as those terms are defined in Sections 4.2.8 and
4.2.3 of this Lease, respectively, which are in excess of the amount of Direct
Expenses applicable to the "Base Year," as that term is defined in Section 4.2.1
of this Lease. Such additional rent, together with any and all other amounts
payable by Tenant to Landlord pursuant to the terms of this Lease, shall be
hereinafter collectively referred to as the "Additional Rent." The Base Rent and
Additional Rent are herein collectively referred to as the "Rent." All amounts
due under this Article 4 as Additional Rent shall be payable for the same
periods and in the same manner, time and place as the Base Rent. Without
limitation on other obligations of Tenant which shall survive the expiration of
the Lease Term, the obligations of Tenant to pay the Additional Rent provided
for in this Article 4 shall survive the expiration of the Lease Term.
4.2. Definitions. As used in this Article 4, the following terms shall
have the meanings hereinafter set forth:
4.2.1 "Base Year" shall mean the year set forth in Section 9.1
of the Summary.
4.2.2 "Calendar Year" shall mean each calendar year in which
any portion of the Lease Term falls, through and including the calendar year in
which the Lease Term expires.
4.2.3 "Direct Expenses" shall mean "Operating Expenses" and
"Tax Expenses."
4.2.4 "Expense Year" shall mean each Calendar Year, provided
that Landlord, upon notice to Tenant, may change the Expense Year from time to
time to any other twelve (12) consecutive-month period, and, in the event of any
such change, Tenant's Share of Direct Expenses shall be equitably adjusted for
any Expense Year involved in any such change.
4.2.5 "Operating Expenses" shall mean all expenses, costs and
amounts of every kind and nature which Landlord shall actually pay during any
Expense Year because of or in direct connection with the ownership, management,
maintenance, repair, restoration or operation of the Real Property, including,
without limitation, any amounts paid for (i) the cost of supplying all
utilities, the cost of operating, maintaining, repairing, renovating (which is
not a capital expenditure unless otherwise expressly permitted herein) and
9
managing the utility systems, mechanical systems, sanitary and storm drainage
systems, and any escalator and/or elevator systems, and the cost of supplies and
equipment and maintenance and service contracts in connection therewith; (ii)
the cost of licenses, certificates, permits and inspections and the cost of
contesting the validity or applicability of any governmental enactments which
may affect Operating Expenses; (iii) the cost of insurance carried by Landlord,
in such amounts as Landlord may reasonably determine or as may be required by
any mortgagees or the lessor of any underlying or ground lease affecting the
Real Property; (iv) the cost of landscaping, relamping, and all supplies, tools,
equipment and materials used in the operation, repair and maintenance of the
Real Property; (v) the cost of parking area repair, restoration, and
maintenance, including, but not limited to, repainting, restriping, and
cleaning; (vi) fees, charges and other costs, including consulting fees, legal
fees and accounting fees, of all contractors engaged by Landlord in connection
with the management, operation, maintenance and repair of the Real Property;
(vii) any equipment rental agreements or management agreements (including the
cost of any management fee); (viii)wages, salaries and other compensation and
benefits of all persons engaged in the operation, management, maintenance or
security of the Real Property, and employer's Social Security taxes,
unemployment taxes or insurance, and any other taxes which may be levied on such
wages, salaries, compensation and benefits; provided, that if any employees of
Landlord provide services for more than one building of Landlord, then a
prorated portion of such employees' wages, benefits and taxes shall be included
in Operating Expenses based on the portion of their working time devoted to the
Real Property; (ix) payments under any easement, license, operating agreement,
declaration, restrictive covenant, underlying or ground lease (excluding rent or
similar charge in the nature of rent), or instrument pertaining to the sharing
of costs by the Real Property; (x) operation, repair, maintenance and
replacement (which is not a capital expenditure unless otherwise expressly
permitted herein) of all "Systems and Equipment," as that term is defined in
Section 4.2.6 of this Lease, and components thereof; (xi) the cost of janitorial
service, alarm and security service, window cleaning, trash removal, replacement
of wall and floor coverings, ceiling tiles and fixtures in lobbies, corridors,
restrooms and other common or public areas or facilities, maintenance and
replacement of curbs and walkways, repair to roofs and re-roofing; (xii) costs
incurred by Landlord in connection with the operation of a concierge service (if
such service is provided) and the reasonable costs of an attendant, if
necessary, to operate the conference rooms of the Building; (xiii) amortization
(including interest on the unamortized cost) of the cost of acquiring or the
rental expense of personal property used in the maintenance, operation and
repair of the Real Property; and (xiv) the cost of any capital improvements or
other costs (a) which are intended as a labor-saving device or to effect other
economies in the operation or maintenance of the Real Property, (b) made to the
Building after the Lease Commencement Date that are required under any
governmental law or regulation or (c) for the refurbishment or replacement of
Real Property improvements or amenities; provided, however, that if any such
cost described in (a), (b) or (c) above is a capital expenditure, such cost
shall be amortized (including interest on the unamortized cost) over its useful
life as Landlord shall reasonably determine in accordance with generally
accepted accounting policies and treatments. If Landlord is not furnishing any
particular work or service (the cost of which, if performed by Landlord, would
be included in Operating Expenses) to a tenant who has undertaken to perform
such work or service in lieu of the performance thereof by Landlord, Operating
Expenses shall be deemed to be increased by an amount equal to the additional
10
Operating Expenses which would reasonably have been incurred during such period
by Landlord if it had at its own expense furnished such work or service to such
tenant. If the average occupancy of the Building during any Expense Year
(including the Base Year) is less than seventy-five percent (75%), Landlord
shall make an appropriate adjustment to the variable components of Operating
Expenses for such year, employing sound accounting and management principles, to
determine the amount of Operating Expenses that would have been paid had the
Building been seventy-five percent (75%) occupied. Landlord shall have the
right, from time to time, to equitably allocate some or all of the Operating
Expenses among different tenants of the Building (the "Cost Pools"). Such Cost
Pools may include, but shall not be limited to, the office space tenants of the
Building and the retail space tenants of the Building. Notwithstanding anything
to the contrary set forth in this Article 4, when calculating Direct Expenses
for the Base Year, Operating Expenses shall exclude market-wide labor-rate
increases due to extraordinary circumstances, including, but not limited to,
boycotts and strikes, amortization of the cost of any capital improvements and
utility rate increases due to extraordinary circumstances including, but not
limited to, conservation surcharges, boycotts, embargoes or other shortages. As
long as the athletic facility (described in Section 4.2.8) is not converted to
general office space, the expenses, costs and amounts associated with, or
related to, the athletic facility, shall not be included in Operating Expenses.
4.2.6 "Systems and Equipment" shall mean any plant, machinery,
transformers, duct work, cable, wires, and other equipment, facilities, and
systems designed to supply heat, ventilation, air conditioning and humidity or
any other services or utilities, or comprising or serving as any component or
portion of the electrical, gas, steam, plumbing, sprinkler, communications,
alarm, security, or fire/life safety systems or equipment, or any other
mechanical, electrical, electronic, computer or other systems or equipment which
serve the Real Property in whole or in part.
4.2.7 "Tax Expenses" shall mean all federal, state, county, or local
governmental or municipal taxes, fees, charges or other impositions of every
kind and nature, whether general, special, ordinary or extraordinary (including,
without limitation, real estate taxes, general and special assessments, transit
taxes, leasehold taxes or taxes based upon the receipt of rent, including gross
receipts or sales taxes applicable to the receipt of rent, unless required to be
paid by Tenant, personal property taxes imposed upon the fixtures, machinery,
equipment, apparatus, systems and equipment, appurtenances, furniture and other
personal property used in connection with the Building), which Landlord shall
actually pay during any Expense Year because of or in connection with the
ownership, leasing and operation of the Real Property or Landlord's interest
therein.
4.2.7.1 Tax Expenses shall include, without limitation:
(i) Any tax on Landlord's rent, right to rent or
other income from the Real Property or as against Landlord's business
of leasing any of the Real Property, including transaction privilege
taxes;
11
(ii) Any assessment, tax, fee, levy or charge in
addition to, or in substitution, partially or totally, of any
assessment, tax, fee, levy or charge previously included within the
definition of real property tax. It is the intention of Tenant and
Landlord that all such new and increased assessments, taxes, fees,
levies, and charges and all similar assessments, taxes, fees, levies
and charges be included within the definition of Tax Expenses for
purposes of this Lease;
(iii) Any assessment, tax, fee, levy, or charge
allocable to or measured by the area of the Premises or the rent
payable hereunder, including, without limitation, any gross income tax
with respect to the receipt of such rent, or upon or with respect to
the possession, leasing, operating, management, maintenance,
alteration, repair, use or occupancy by Tenant of the Premises, or any
portion thereof; and
(iv) Any assessment, tax, fee, levy or charge, upon
this transaction or any document to which Tenant is a party, creating
or transferring an interest or an estate in the Premises.
4.2.7.2 [Intentionally Omitted]
4.2.7.3 If Tax Expenses for any period during the Lease Term
or any extension thereof are increased after payment thereof by Landlord for any
reason, including, without limitation, error or reassessment by applicable
governmental or municipal authorities, Tenant shall pay Landlord upon demand
Tenant's Share of such increased Tax Expenses.
4.2.7.4 Notwithstanding anything to the contrary contained in
this Section 4.2.7 (except as set forth in Sections 4.2.7.1 and 4.2.7.2, above),
there shall be excluded from Tax Expenses (i) all excess profits taxes,
franchise taxes, gift taxes, capital stock taxes, inheritance and succession
taxes, estate taxes, federal and state income taxes, and other taxes to the
extent applicable to Landlord's general or net income (as opposed to rents,
receipts or income attributable to operations at the Building), (ii) any items
included as Operating Expenses, and (iii) any items paid by Tenant under Section
4.4 of this Lease.
4.2.7.5 Notwithstanding anything to the contrary set forth in
this Article 4, when calculating Direct Expenses for the Base Year, such Direct
Expenses shall not include any increase in Tax Expenses attributable to special
assessments, charges, costs, or fees, or due to modifications or changes in
governmental laws or regulations, including, but not limited to, the institution
of a split tax roll.
4.2.7.6 Where commercially reasonable to do so in Landlord's
good faith judgment, Landlord shall timely file and pursue an appeal, or similar
objection, of annual and special real estate tax assessments and adjust the Tax
Expenses accordingly, net of any actual costs incurred directly in pursuit of
such appeal or objection.
12
4.2.8 "Tenant's Share" shall mean the percentage set forth in
Section 9.2 of the Summary. Tenant's Share was calculated by multiplying the
number of rentable square feet of the Premises by 100 and dividing the product
by the total rentable square feet in the Building. The total rentable square
footage of the Building, for purposes of determining Tenant's Share, as of the
date hereof is 228,846 (Tenant acknowledges that the actual total rentable
square footage of the Building is 247,911, but that, for purposes of determining
Tenant's Share, Landlord has excluded the square footage of the athletic
facility within the Building consisting of 19,065 rentable square feet. In the
event that the athletic facility is converted to general office space, Landlord
reserves the right to subsequently include the square footage of the athletic
facility within the Building for purposes of determining Tenant's Share). In the
event either the rentable square feet of the Premises and/or the total rentable
square feet of the Building is changed, Tenant's Share shall be appropriately
adjusted, and, as to the Expense Year in which such change occurs, Tenant's
Share for such year shall be determined on the basis of the number of days
during such Expense Year that each such Tenant's Share was in effect.
4.3 Calculation and Payment of Additional Rent.
4.3.1 Calculation of Excess. If for any Expense Year ending or
commencing within the Lease Term, Tenant's Share of Direct Expenses for such
Expense Year exceeds Tenant's Share of Direct Expenses for the Base Year, then
Tenant shall pay to Landlord, in the manner set forth in Section 4.3.2, below,
and as Additional Rent, an amount equal to the excess (the "Excess").
4.3.2 Statement of Actual Direct Expenses and Payment by
Tenant. Landlord shall endeavor to give to Tenant on or before the first day of
April following the end of each Expense Year, a statement (the "Statement")
which shall state the Direct Expenses incurred or accrued for such preceding
Expense Year, and which shall indicate the amount, if any, of any Excess. Upon
receipt of the Statement for each Expense Year ending during the Lease Term, if
an Excess is present, Tenant shall pay, with its next installment of Base Rent
due, the full amount of the Excess for such Expense Year, less the amounts, if
any, paid during such Expense Year as Estimated Excess. The failure of Landlord
to timely furnish the Statement for any Expense Year shall not prejudice
Landlord from enforcing its rights under this Article 4; provided, however,
Tenant shall have no liability for Operating Expenses not contained in a
Statement given to Tenant within one (l) year after the end of the Expense Year
in which the expense was incurred. Even though the Lease Term has expired and
Tenant has vacated the Premises, when the final determination is made of
Tenant's Share of the Direct Expenses for the Expense Year in which this Lease
terminates, if an Excess is present, Tenant shall immediately pay to Landlord an
amount as calculated pursuant to the provisions of Section 4.3.1 of this Lease.
The provisions of this Section 4.3.2 shall survive the expiration or earlier
termination of the Lease Term.
4.3.3 Statement of Estimated Direct Expenses. In addition,
Landlord shall endeavor to give Tenant a yearly expense estimate statement (the
"Estimate Statement") which shall set forth Landlord's reasonable estimate (the
"Estimate") of what the total amount of Direct Expenses for the then-current
Expense Year shall be and the estimated Excess (the "Estimated Excess") as
13
calculated by comparing Tenant's Share of Direct Expenses, which shall be based
upon the Estimate, to Tenant's Share of Direct Expenses for the Base Year. The
failure of Landlord to timely furnish the Estimate Statement for any Expense
Year shall not preclude Landlord from enforcing its rights to collect any
Estimated Excess under this Article 4, provided, however, Tenant shall have no
liability for Operating Expenses not contained in a Statement given to Tenant
within one (1) year after the end of the Expense Year in which the expense was
incurred. If pursuant to the Estimate Statement an Estimated Excess is
calculated for the then current Expense Year, Tenant shall pay, with its next
installment of Base Rent due, a fraction of the Estimated Excess for the
then-current Expense Year (reduced by any amounts paid pursuant to the last
sentence of this Section 4.3.3). Such fraction shall have as its numerator the
number of months which have elapsed in such current Expense Year to the month of
such payment, both months inclusive, and shall have twelve (12) as its
denominator. Until a new Estimate Statement is furnished, Tenant shall pay
monthly, with the monthly Base Rent installments, an amount equal to one-twelfth
(1/12) of the total Estimated Excess set forth in the previous Estimate
Statement delivered by Landlord to Tenant.
4.4 Taxes and Other Charges for Which Tenant Is Directly Responsible.
Tenant shall reimburse Landlord upon demand for any and all taxes or assessments
required to be paid by Landlord (except to the extent included in Tax Expenses
by Landlord), excluding state, local and federal personal or corporate income
taxes measured by the net income of Landlord from all sources and estate and
inheritance taxes, whether or not now customary or within the contemplation of
the parties hereto, when:
4.4.1 Said taxes are measured by or reasonably attributable to
the cost or value of Tenant's equipment, furniture, fixtures and other personal
property located in the Premises, or by the cost or value of any leasehold
improvements made in or to the Premises by or for Tenant, to the extent the cost
or value of such leasehold improvements exceeds the cost or value of a building
standard build-out as reasonably determined by Landlord regardless of whether
title to such improvements shall be vested in Tenant or Landlord;
4.4.2 Said taxes are assessed upon or with respect to the
possession, leasing, operation, management, maintenance, alteration, repair, use
or occupancy by Tenant of the Premises or any portion of the Real Property
(including the Parking Facilities);
4.4.3 Said taxes are assessed upon this transaction or any
document to which Tenant is a party creating or transferring an interest or an
estate in the Premises; or
4.4.4 Said assessments are levied or assessed upon the Real
Property or any part thereof or upon Landlord and/or by any governmental
authority or entity, and relate to the construction, operation, management, use,
alteration or repair of mass transit improvements.
Notwithstanding the foregoing, with respect to any of such aforementioned taxes
described in Sections 4.4.1, 4.4.2 or 4.4.3 that are attributable to Tenant,
Tenant's obligation to reimburse Landlord shall be conditioned upon Landlord
giving Tenant written notice thereof and the opportunity to pay, or contest (in
14
good faith) to the assessment thereof. If Tenant does not give Landlord written
notice of Tenant's payment of such taxes or contest of the assessment thereof
within ten (10) days following Tenant's receipt of such notice, Landlord may pay
the same and Tenant shall reimburse Landlord upon demand therefor. If Tenant
desires to contest the assessment thereof, then Tenant may do so provided that
legal procedures for the contesting of such taxes are available that will not
subject Landlord or its property to a penalty or lien, and further provided that
Tenant complies with such procedures. Landlord will cooperate with Tenant in
contesting such assessment and Tenant shall indemnify Landlord from all
liability, loss and expense (including reasonable attorneys' fees) incurred by
Landlord resulting from such contest and/or failure to pay such assessment.
4.5 Landlord's Books and Records. Within one (1) year after receipt of
a Statement by Tenant ("Review Period"), Tenant's employees or an accountant
designated by Tenant (collectively, "Tenant Representative"), may, after
reasonable notice to Landlord and during normal business hours, inspect and
photocopy Landlord's records at Landlord's offices, provided that Tenant and the
Tenant Representative shall, and each of them shall use their commercially
reasonable efforts to cause their respective employees to, maintain all
information contained in Landlord's records in strict confidence. After such
inspection, Tenant may cause a certification as to the proper amount of
Additional Rent, at Tenant's expense, by an independent certified public
accountant (which accountant is a member of a nationally recognized accounting
firm, and which firm has not provided services to Landlord or Tenant within the
preceding five (5) years) selected by Landlord and approved by Tenant. The
designated accountant shall review Landlord records and calculations, each
parties' contentions and this Lease. Landlord shall cooperate in good faith with
Tenant and the designated accountant to show Tenant and the designated
accountant the information upon which the certification is to be based. Tenant
shall pay the cost of the designated accountant and the cost of such
certification; provided that if such certification by the designated accountant
proves that the Direct Expenses set forth in the Statement were overstated by
more than three percent (3%), then the cost of the designated accountant and the
cost of such certification shall be paid for by Landlord. Promptly following the
parties receipt of such certification, the parties shall make such appropriate
payments or reimbursements, as the case may be, to each other, as are determined
to be owing pursuant to such certification, together with interest at the
Interest Rate from the date due until paid, in the case of payments by Tenant to
Landlord, or from the date paid until reimbursed, in the case of reimbursements
by Landlord to Tenant; provided, however, if Tenant is in monetary default
hereunder, Landlord may credit any sums owing to Tenant under this Section 4.5
against the delinquent sums payable by Tenant. The payment by Tenant of any
amounts pursuant to this Article 4 shall not preclude Tenant from questioning
the correctness of any Statement delivered by Landlord, provided that the
failure of Tenant to object thereto prior to the expiration of the Review Period
shall be conclusively deemed Tenant's approval of the applicable Statement.
15
ARTICLE 5
---------
USE OF PREMISES
---------------
5.1 Permitted Use. Tenant shall use the Premises solely for general
office purposes consistent with the character of the Building as a first-class
office building, and Tenant shall not use or permit the Premises to be used for
any other purpose or purposes whatsoever.
5.2 Prohibited Uses. Tenant further covenants and agrees that it shall
not use, or authorize any person or persons to use the Premises, the Parking
Facilities or any other Common Areas or any part thereof for any use or purpose
contrary to the provisions of Exhibit D attached hereto ("Rules and
Regulations"), or in violation of the laws of the United States of America, the
State of Arizona, or the ordinances, regulations or requirements of the local
municipal or county governing body or other lawful authorities having
jurisdiction over the Building. Tenant shall, promptly upon acquiring knowledge
thereof, give Landlord written notice of any person using the Premises, the
Parking Facilities or any other Common Areas in violation of any laws. Tenant
shall comply with all recorded covenants, conditions, and restrictions, and the
provisions of all ground or underlying leases, now or hereafter affecting the
Real Property which Landlord supplies to Tenant. Tenant shall not use or allow
another person or entity to use any part of the Premises for the storage, use,
treatment, manufacture or sale of any hazardous or toxic material except for
ordinary office and janitorial supplies in quantities customarily used by office
tenants.
ARTICLE 6
---------
SERVICES AND UTILITIES
----------------------
6.1 Standard Tenant Services. Landlord shall provide the following
services on all days during the Lease Term, unless otherwise stated below.
6.1.1 Subject to all governmental rules, regulations and
guidelines applicable thereto, Landlord shall provide heating and air
conditioning when necessary for normal comfort for normal office use in the
Premises, from Monday through Friday, during the period from 8:00 a.m. to 6:00
p.m., and on Saturday during the period from 8:00 a.m. to 12:00 noon, except for
the date of observation of New Year's Day, Presidents' Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, Christmas Day and other
nationally recognized holidays (collectively, the "Holidays").
6.1.2 Landlord shall provide adequate electrical wiring and
facilities and power for normal general office use as reasonably determined by
Landlord. Tenant shall bear the cost of replacement of lamps, starters and
ballasts for lighting fixtures within the Premises.
6.1.3 Landlord shall provide city water from the regular
Building outlets for drinking, lavatory and toilet purposes.
16
6.1.4 Landlord shall provide janitorial services five (5) days
per week, except the date of observation of the Holidays, in and about the
Premises and window washing services in a manner consistent with other
comparable buildings in the vicinity of the Building.
6.1.5 Landlord shall provide nonexclusive automatic passenger
elevator service at all times.
6.1.6 Landlord shall provide nonexclusive freight elevator
service subject to scheduling by Landlord.
6.2 Overstandard Tenant Use. Tenant shall not, without Landlord's prior
written consent, which shall not be unreasonably delayed or withheld, use
heat-generating machines, machines other than normal fractional horsepower
office machines or normal office computer equipment, or equipment or lighting
other than building standard lights in the Premises, which may affect the
temperature otherwise maintained by the air conditioning system or increase the
water normally furnished for the Premises by Landlord pursuant to the terms of
Section 6.1 of this Lease. If such consent is given, Landlord shall have the
right, where necessitated by the basis of such consent, to install supplementary
air conditioning units or other facilities in the Premises, including
supplementary or additional metering devices, and the cost thereof, including
the cost of installation, operation and maintenance, increased wear and tear on
existing equipment and other similar charges, shall be paid by Tenant to
Landlord upon billing by Landlord. If Tenant uses electricity, water or heat or
air conditioning in excess of that supplied by Landlord pursuant to Section 6.1
of this Lease, Tenant shall pay to Landlord, upon billing, the cost of such
excess consumption, the cost of the installation, operation, and maintenance of
equipment which is installed in order to supply such excess consumption, and the
cost of the increased wear and tear on existing equipment caused by such excess
consumption, and Landlord may install devices to separately meter any increased
use and in such event Tenant shall pay the increased cost directly to Landlord,
on demand, including the cost of such additional metering devices (if Landlord
separately meters all of any particular utility use by Tenant, as opposed to
only the increased use, then Landlord shall make an appropriate adjustment to
Operating Expenses so that Tenant is not double-billed for the cost of such
utility). If Tenant desires to use heat, ventilation or air conditioning during
hours other than those for which Landlord is obligated to supply such utilities
pursuant to the terms of Section 6.1 of this Lease, Tenant shall give Landlord
such prior notice, as Landlord shall from time to time establish as appropriate,
of Tenant's desired use and Landlord shall supply such utilities to Tenant at
such hourly, full-floor cost to Tenant as Landlord shall from time to time
reasonably establish. Amounts payable by Tenant to Landlord for such use of
additional utilities shall be deemed Additional Rent hereunder and shall be
billed on a monthly basis. Landlord may increase the hours or days during which
air conditioning, heating and ventilation are provided to the Premises and the
Building to accommodate the usage by tenants occupying two-thirds or more of the
rentable square feet of the Building or to conform to practices of other
buildings in the area comparable to the Building.
6.3 Interruption of Use. Tenant agrees that Landlord shall not be
liable for damages, by abatement of Rent or otherwise, for failure to furnish or
delay in furnishing any service (including telephone and telecommunication
17
services), or for any diminution in the quality or quantity thereof, when such
failure or delay or diminution is occasioned, in whole or in part, by repairs,
replacements, or improvements, by any strike, lockout or other labor trouble, by
inability to secure electricity, gas, water, or other fuel at the Building after
reasonable effort to do so, by any accident or casualty whatsoever, by act or
default of Tenant or other parties, or by any other cause beyond Landlord's
reasonable control; and such failures or delays or diminution shall never be
deemed to constitute an eviction or disturbance of Tenant's use and possession
of the Premises or relieve Tenant from paying Rent or performing any of its
obligations under this Lease. Furthermore, Landlord shall not be liable under
any circumstances for a loss of, or injury to, property or for injury to, or
interference with, Tenant's business, including, without limitation, loss of
profits, however occurring, through or in connection with or incidental to a
failure to furnish any of the services or utilities as set forth in this Article
6, except for loss or injury that is not covered by insurance carried, or
required to be carried hereunder, by Tenant and which is caused by the gross
negligence or willful misconduct of Landlord.
6.4 Additional Services. Landlord shall also have the exclusive right,
but not the obligation, to provide any additional services which may be required
by Tenant, including, without limitation, locksmithing, lamp replacement,
additional janitorial service, and additional repairs and maintenance, provided
that Tenant shall pay to Landlord upon billing, the sum of all reasonable costs
to Landlord of such additional services plus an administration fee not to exceed
fifteen percent (15%). Charges for any service for which Tenant is required to
pay from time to time hereunder, shall be deemed Additional Rent hereunder and
shall be billed on a monthly basis.
ARTICLE 7
---------
REPAIRS
-------
Tenant shall, at Tenant's own expense, keep the Premises, including all
improvements, fixtures and furnishings therein, in good order, repair and
condition at all times during the Lease Term. In addition, Tenant shall, at
Tenant's own expense but under the supervision and subject to the prior approval
of Landlord, and within any reasonable period of time specified by Landlord,
promptly and adequately repair all damage to the Premises and replace or repair
all damaged or broken fixtures and appurtenances; provided however, that, at
Landlord's option, or if Tenant fails to make such repairs, Landlord may, but
need not, make such repairs and replacements, and Tenant shall pay Landlord the
cost thereof, including a percentage of the cost thereof (to be uniformly
established for the Building) sufficient to reimburse Landlord for all overhead,
general conditions, fees and other costs or expenses arising from Landlord's
involvement with such repairs and replacements forthwith upon being billed for
same. Landlord may, but shall not be required to, enter the Premises, after
reasonable notice (except in an emergency situation), at all reasonable times to
make such repairs, alterations, improvements and additions to the Premises or to
the Building or to any equipment located in the Building as Landlord shall
desire or deem necessary or as Landlord may be required to do by governmental or
quasi-governmental authority or court order or decree. Except as expressly
stated in this Lease, Tenant hereby waives and releases its right to make
repairs at Landlord's expense under any Arizona law, statute, or ordinance now
or hereafter in effect.
18
ARTICLE 8
---------
ADDITIONS AND ALTERATIONS
-------------------------
8.1 Landlord's Consent to Alterations. Except for nonstructural
alterations not affecting Building systems, the cost of which does not in each
instance exceed Ten Thousand Dollars ($10,000.00), Tenant may not make any
improvements, alterations, additions or changes to the Premises (collectively,
the "Alterations") without first procuring the prior written consent of Landlord
to such Alterations, which consent shall be requested by Tenant not less than
thirty (30) days prior to the commencement thereof, and which consent shall not
be unreasonably withheld or delayed by Landlord. The construction of the initial
improvements to the Premises shall be governed by the terms of the Tenant Work
Letter and not the terms of this Article 8.
8.2 Manner of Construction. Landlord may impose, as a condition of its
consent to all Alterations or repairs of the Premises or about the Premises,
such requirements as Landlord in its sole discretion may deem desirable,
including, but not limited to, the requirement that upon Landlord's request,
Tenant shall, at Tenant's expense, remove such Alterations upon the expiration
or any early termination of the Lease Term, and/or the requirement that Tenant
utilize for such purposes only contractors, materials, mechanics and materialmen
selected by Landlord. In any event, a contractor of Landlord's selection shall
perform all mechanical, electrical, plumbing, structural, and heating,
ventilation and air conditioning work, and such work shall be performed at
Tenant's cost. Tenant shall construct such Alterations and perform such repairs
in conformance with any and all applicable rules and regulations of any federal,
state, county or municipal code or ordinance and pursuant to a valid building
permit, issued by the appropriate governmental authorities, in conformance with
Landlord's construction rules and regulations. Landlord~s approval of the plans,
specifications and working drawings for Tenant's Alterations shall create no
responsibility or liability on the part of Landlord for their completeness,
design "sufficiency, or compliance with all laws, rules and regulations of
governmental agencies or authorities. All work with respect to any Alterations
must be done in a good and workmanlike manner and diligently prosecuted to
completion. In performing the work of any such Alterations, Tenant shall have
the work performed in such manner as not to obstruct access to the Building or
the common areas for any other tenant of the Building, and as not to obstruct
the business of Landlord or other tenants in the Building, or interfere with the
labor force working in the Building. Upon completion of any Alterations and
receipt of Landlord's written request, Tenant agrees to cause a Notice of
Completion to be recorded in the office of the Recorder of the County of
Maricopa in accordance with the laws of the State of Arizona, and Tenant shall
deliver to the Building management office a reproducible copy of the "as built"
drawings of the Alterations.
8.3 Payment for Improvements. In the event Tenant orders any Alteration
or repair work directly from Landlord, or from the contractor selected by
Landlord, the charges for such work shall be deemed Additional Rent under this
Lease, payable upon billing therefor, either periodically during construction or
upon the substantial completion of such work, at Landlord's option. Upon
completion of such work, Tenant shall deliver to Landlord, if payment is made
directly to contractors, evidence of payment, contractors' affidavits and full
19
and final waivers of all liens for labor, services or materials. Whether or not
Tenant orders any work directly from Landlord, Tenant shall pay to Landlord a
percentage not to exceed ten percent (10%) of the cost of such work (such
percentage, which shall vary depending upon whether or not Tenant orders the
work directly from Landlord, to be established on a uniform basis for the
Building) sufficient to compensate Landlord for all overhead, general
conditions, fees and other costs and expenses arising from Landlord's
involvement with such work.
8.4 Construction Insurance. In the event that Tenant makes any
Alterations, Tenant agrees to carry "Builder's All Risk" insurance in an amount
reasonably approved by Landlord covering the construction of such Alterations,
and such other insurance as Landlord may reasonably require, it being understood
and agreed that all of such Alterations shall be insured by Tenant pursuant to
Article 10 of this Lease immediately upon completion thereof. In addition,
Landlord may, in its reasonable discretion, require Tenant to obtain a lien and
completion bond or some alternate form of security satisfactory to Landlord in
an amount sufficient to ensure the lien-free completion of such Alterations and
naming Landlord as a co-obligee.
8.5 Landlord's Property. All Alterations, improvements, fixtures and/or
equipment which may be installed or placed in or about the Premises, and all
signs installed in, on or about the Premises, from time to time, shall be at the
sole cost of Tenant and shall be and become the property of Landlord, except
that Tenant may remove any Alterations, improvements, fixtures and/or equipment
which Tenant can substantiate to Landlord have not been paid for with any tenant
improvement allowance funds provided to Tenant by Landlord, provided Tenant
repairs any damage to the Premises and Building caused by such removal.
Furthermore, if Landlord, as a condition to Landlord's consent to any
Alteration, requires that Tenant remove any Alteration upon the expiration or
early termination of the Lease Term, Landlord may, by written notice to Tenant
prior to the end of the Lease Term, or given upon any earlier termination of
this Lease, require Tenant at Tenant's expense to remove such Alterations and to
repair any damage to the Premises and Building caused by such removal. If Tenant
fails to complete such removal and/or to repair any damage caused by the removal
of any Alterations, Landlord may do so and may charge the actual cost thereof to
Tenant.
ARTICLE 9
---------
COVENANT AGAINST LIENS
----------------------
Landlord shall have the right at all times to post and keep posted on
the Premises any notice which it deems necessary for protection from such liens.
Tenant covenants and agrees not to suffer or permit any lien of mechanics or
materialmen or others to be placed against the Real Property, the Building or
the Premises with respect to work or services performed for or materials
furnished to Tenant or the Premises, and, in case of any such lien attaching or
notice of any lien, Tenant covenants and agrees to cause it to be released and
removed of record immediately following Tenant's knowledge thereof (however,
Tenant may contest such lien by posting a bond in accordance with applicable law
provided such bond protects Landlord's interest in the Real Property and further
20
provided that such contest does not hinder or delay any proposed sale or
financing of the Real Property or cause Landlord to be in default under any loan
secured by the Real Property). Notwithstanding anything to the contrary set
forth in this Lease, in the event that such lien is not released, discharged or
removed within fifteen (15) days after the date notice of such lien is delivered
by Landlord to Tenant, Landlord, at its sole option, may immediately take all
action necessary to release and remove such lien, without any duty to
investigate the validity thereof, and all sums, costs and expenses, including
reasonable attorneys' fees and costs, incurred by Landlord in connection with
such lien shall be deemed Additional Rent under this Lease and shall immediately
be due and payable by Tenant.
ARTICLE 10
----------
INSURANCE
---------
10.1 Indemnification and Waiver. To the extent not prohibited by law,
Landlord, its partners and their respective officers, agents, servants,
employees, and independent contractors (collectively, "Landlord Parties") shall
not be liable for any damage either to person or property or resulting from the
loss of use thereof, which damage is sustained by Tenant or by other persons
claiming through Tenant, except for damage that is not covered by insurance
carried, or required to be carried hereunder, by Tenant and which is caused by
the negligence or willful misconduct of a Landlord Party. Tenant shall
indemnify, defend, protect, and hold harmless Landlord Parties for, from and
against any and all loss, cost, damage, expense and liability (including without
limitation court costs and reasonable attorneys' fees) incurred in connection
with or arising from any cause in, on or about the Premises either prior to,
during, or after the expiration of the Lease Term, provided that the terms of
the foregoing indemnity shall not apply to the sole negligence or willful
misconduct of Landlord. The provisions of this Section 10.1 shall survive the
expiration or sooner termination of this Lease with respect to any claims or
liability occurring prior to such expiration or termination.
10.2 Tenant's Compliance with Landlord's Fire and Casualty Insurance.
Tenant shall, at Tenant's expense, comply with all insurance company
requirements pertaining to the use of the Premises of which Tenant has been
given written notice. If Tenant's conduct or use of the Premises causes any
increase in the premium for such insurance policies, then, after receipt of
notice of such increase followed by a reasonable cure period, Tenant shall
reimburse Landlord for any such increase. Tenant, at Tenant's expense, shall
comply with all rules, orders, regulations or requirements of the American
Insurance Association (formerly the National Board of Fire Underwriters) and
with any similar body.
10.3 Tenant's Insurance. Tenant shall maintain the following coverages
in the following amounts.
10.3.1 Commercial General Liability Insurance, on an
occurrence basis, covering the insured against claims of bodily injury, personal
injury and property damage arising out of Tenant's operations, assumed
liabilities or use of the Premises, including a Broad Form Commercial General
21
Liability endorsement covering the insuring provisions of this Lease and the
performance by Tenant of the indemnity agreements set forth in Section 10.1 of
this Lease, for limits of liability not less than:
Bodily Injury and
Property Damage Liability $3,000,000 each occurrence
$3,000,000 annual aggregate
Personal Injury Liability $3,000,000 each occurrence
$3,000,000 annual aggregate
0% Insured's participation
10.3.2 Physical Damage Insurance covering (i) all office
furniture, trade fixtures, office equipment, merchandise and all other items of
Tenant's property on the Premises installed by, for, or at the expense of
Tenant, (ii)the Tenant Improvements, including any Tenant Improvements which
Landlord permits to be installed above the ceiling of the Premises or below the
floor of the Premises, and (iii) all other improvements, alterations and
additions to the Premises, including any improvements, alterations or additions
installed at Tenant's request above the ceiling of the Premises or below the
floor of the Premises. Such insurance shall be written on an "all risks" of
physical loss or damage basis, for the full replacement cost value new without
deduction for depreciation of the covered items and in amounts that meet any
co-insurance clauses of the policies of insurance and shall include a vandalism
and malicious mischief endorsement, sprinkler leakage coverage and earthquake
sprinkler leakage coverage.
10.3.3 Loss of income and extra expense insurance in such
amounts as will reimburse Tenant for direct or indirect loss of earnings
attributable to all perils commonly insured against by prudent tenants or
attributable to prevention of access to the Premises or to the Building as a
result of such perils.
10.4 Form of Policies. The minimum limits of policies of insurance
required of Tenant under this Lease shall in no event limit the liability of
Tenant under this Lease. All insurance shall (i) be issued by an insurance
company having a rating of not less than A-X in Best's Insurance Guide or which
is otherwise acceptable to Landlord and licensed to do business in the State of
Arizona; and (ii) provide that said insurance shall not be canceled or coverage
changed unless thirty (30) days' prior written notice shall have been given to
Landlord and any mortgagee or ground or underlying lessor of Landlord. In
addition, the insurance described in Section 10.3.1 above shall (a) name
Landlord, and any other party specified by Landlord, as an additional insured;
(b) specifically cover the liability assumed by Tenant under this Lease
including, but not limited to, Tenant's obligations under Section 10.1 of this
Lease; (c) be primary insurance as to all claims thereunder and provide that any
insurance required by Landlord is excess and is noncontributing with any
insurance requirement of Tenant; and (d) contain a cross-liability endorsement
or severability of interest clause reasonably acceptable to Landlord. In
addition, the insurance described in Section 10.3.2 shall name Landlord and any
other party specified by Landlord as loss-payee as to all items referred to in
clauses (ii) and (iii) of Section 10.3.2. Tenant shall deliver all policies or
22
certificates thereof to Landlord on or before the Lease Commencement Date and at
least thirty (30) days before the expiration dates thereof. In the event Tenant
shall fail to procure such insurance, or to deliver such policies or
certificate, Landlord may, at its option upon notice to Tenant, procure such
policies for the account of Tenant, and the cost thereof shall be paid to
Landlord as Additional Rent within five (5) days after delivery to Tenant of
bills therefor.
10.5 Subrogation. Landlord and Tenant agree to have their respective
insurance companies issuing property damage and loss of income and extra expense
insurance waive any rights of subrogation that such companies may have against
Landlord or Tenant, as the case may be. Landlord and Tenant hereby waive any
right that either may have against the other on account of any loss or damage to
the extent such loss or damage is insurable under such policies of insurance.
10.6 Additional Insurance Obligations. Tenant shall carry and maintain
during the entire Lease Term, at Tenant's sole cost and expense, increased
amounts of the insurance required to be carried by Tenant pursuant to this
Article 10, and such other reasonable types of insurance coverage and in such
reasonable amounts covering the Premises and Tenant's operations therein, as may
be reasonably requested by Landlord.
ARTICLE 11
----------
DAMAGE AND DESTRUCTION
----------------------
11.1 Repair of Damage to Premises by Landlord. Tenant shall promptly
notify Landlord of any damage to the Premises resulting from fire or any other
casualty. If the Premises or any common areas of the Building serving or
providing access to the Premises shall be damaged by fire or other casualty,
Landlord shall promptly and diligently, subject to reasonable delays for
insurance adjustment or other matters beyond Landlord's reasonable control, and
subject to all other terms of this Article 11, restore the base, shell, and core
of the Premises and such common areas. Such restoration shall be to
substantially the same condition of the base, shell, and core of the Premises
and common areas prior to the casualty, except for modifications required by
zoning and building codes and other laws or by the holder of a mortgage on the
Building, or the lessor of a ground or underlying lease with respect to the Real
Property and/or the Building, or any other modifications to the common areas
deemed desirable by Landlord, provided access to the Premises and any common
restrooms serving the Premises shall not be materially impaired. Notwithstanding
any other provision of this Lease, upon the occurrence of any damage to the
Premises, Tenant shall assign to Landlord (or to any party designated by
Landlord) all insurance proceeds payable to Tenant for loss or repair of the
base, shell and core of the Premises plus the completed Tenant Improvements
under Tenant's insurance required under Section 10.3 of this Lease, and Landlord
shall repair any injury or damage to the Tenant Improvements installed in the
Premises and shall return such Tenant Improvements to their original condition;
provided that if the cost of such repair by Landlord exceeds the amount of
insurance proceeds received by Landlord from Tenant's insurance carrier, as
assigned by Tenant, the cost of such repairs shall be paid by Tenant to Landlord
prior to Landlord's repair of the damage. In connection with such repairs and
23
replacements, Tenant shall, prior to the commencement of construction, submit to
Landlord, for Landlord's review and approval, which shall not be unreasonably
withheld or delayed, all plans, specifications and working drawings relating
thereto, and the contractors selected to perform such improvement work shall be
subject to Landlord's approval, which shall not be unreasonably withheld or
delayed. Such submittal of plans and construction of improvements shall be
performed in substantial compliance with the terms of the Tenant Work Letter as
though such construction of improvements were the initial construction of the
Tenant Improvements. Landlord shall not be liable for any inconvenience or
annoyance to Tenant or its visitors, or injury to Tenant's business resulting in
any way from such damage or the repair thereof; provided however, that if such
fire or other casualty shall have damaged the Premises or common areas necessary
to Tenant's occupancy, and if such damage is not the result of the negligence or
willful misconduct of Tenant or Tenant's employees, contractors, licensees, or
invitees, Landlord shall allow Tenant a proportionate abatement of Rent, during
the time and to the extent the Premises are unfit for occupancy for the purposes
permitted under this Lease, and not occupied by Tenant conducting its normal
business as a result thereof.
11.2 Landlord's Option to Repair. Within forty-five (45) days after the
date Landlord learns of the necessity for repairs as a result of damage,
Landlord shall notify Tenant ("Damage Repair Estimate") of Landlord's estimated
assessment of the period of time in which the repairs will be completed, which
assessment shall be based upon the opinion of a contractor reasonably selected
by Landlord and experienced in comparable repairs of high-rise office buildings.
Notwithstanding the terms of Section 11.1 of this Lease, Landlord may elect not
to rebuild and/or restore the Premises and/or Building and instead terminate
this Lease by notifying Tenant in writing of such termination within forty-five
(45) days after the date Landlord learns of the necessity for repairs as the
result of damage, such notice to include a termination date giving Tenant ninety
(90) days to vacate the Premises, but Landlord may so elect only if the Building
shall be damaged by fire or other casualty or cause, whether or not the Premises
are affected, and one or more of the following conditions is present: (i)
repairs are not likely to be completed within one hundred eighty (180) days
after delivery of the Damage Repair Estimate to Tenant (when such repairs are
made without the payment of overtime or other premiums); (ii) the holder of any
mortgage on the Building or ground or underlying lessor with respect to the Real
Property and/or the Building shall require that the insurance proceeds or any
portion thereof be used to retire the mortgage debt, or shall terminate the
ground or underlying lease, as the case may be; (iii) the damage is not fully
covered, except for deductible amounts, by Landlord's insurance policies; or
(iv) an election is made not to repair the damage by the parties to the
Reciprocal Easement and Operating Agreement for Central Park Square recorded in
the Official Records of Maricopa County on February 9, 1996, as Instrument No.
96-0091365. However, if Landlord does not elect to terminate this Lease pursuant
to Landlord's termination right as provided above, and the Damage Repair
Estimate indicates that repairs are not likely to be completed within one
hundred eighty (180) days after Tenant's receipt of the Damage Repair Estimate,
Tenant may elect, not later than thirty (30) days after Tenant's receipt of the
Damage Repair Estimate, to terminate this Lease by written notice to Landlord
effective as of the date specified in Tenant's notice; provided, however, Tenant
may not elect to terminate this Lease if the damage was the result of the
24
negligence or willful misconduct of Tenant or its employees, contractors or
licensees.
11.3 Waiver of Statutory Provisions. The provisions of this Lease,
including this Article 11, constitute an express agreement between Landlord and
Tenant with respect to any and all damage to, or destruction of, all or any part
of the Premises, the Building or any other portion of the Real Property, and any
statute, regulation or case law of the State of Arizona with respect to any
rights or obligations concerning damage or destruction in the absence of an
express agreement between the parties, and any other statute, regulation or case
law, now or hereafter in effect, shall have no application to this Lease or any
damage or destruction to all or any part of the Premises, the Building or any
other portion of the Real Property.
11.4 Damage Near End of Term. In the event that the Premises or the
Building is destroyed or damaged to any substantial extent during the last
twenty-four (24) months of the Lease Term and the Damage Repair Estimate
indicates that repairs cannot be completed within ninety (90) days after being
commenced, then notwithstanding anything contained in this Article 11, Landlord
and Tenant (but, as for Tenant, only with respect to damage to the Premises or
common areas necessary to Tenant's occupancy and which is not the result of the
negligence or willful misconduct of Tenant or its employees, contractors,
licensees or invitees) shall each have the option to terminate this Lease by
giving written notice to the other party of the exercise of such option within
thirty (30) days after Landlord's delivery of the Damage Repair Estimate, in
which event this Lease shall cease and terminate as of the date of such notice,
Tenant shall pay the Base Rent and Additional Rent, properly apportioned up to
such date of damage, and both parties hereto shall thereafter be freed and
discharged of all further obligations hereunder, except as provided for in
provisions of this Lease which by their terms survive the expiration or earlier
termination of the Lease Term.
ARTICLE 12
----------
NONWAIVER
---------
No waiver of any provision of this Lease shall be implied by any
failure of either party to enforce any remedy on account of the violation of
such provision, even if such violation shall continue or be repeated
subsequently, any waiver by either party of any provision of this Lease may only
be in writing, and no express waiver shall affect any provision other than the
one specified in such waiver and that one only for the time and in the manner
specifically stated. No receipt of monies by Landlord from Tenant after the
termination of this Lease shall in any way alter the length of the Lease Term or
of Tenant's right of possession hereunder or after the giving of any notice
shall reinstate, continue or extend the Lease Term or affect any notice given
Tenant prior to the receipt of such monies, it being agreed that after the
service of notice or the commencement of a suit or after final judgment for
possession of the Premises, Landlord may receive and collect any Rent due, and
the payment of said Rent shall not waive or affect said notice, suit or
judgment.
25
ARTICLE 13
----------
CONDEMNATION
------------
13.1 Permanent Taking. If the whole or any part of the Premises or
Building shall be taken by power of eminent domain or condemned by any competent
authority for any public or quasi-public use or purpose, or if any adjacent
property or street shall be so taken or condemned, or reconfigured or vacated by
such authority in such manner as to require the use, reconstruction or
remodeling of any part of the Premises or Building, or if Landlord shall grant a
deed or other instrument in lieu of such taking by eminent domain or
condemnation, Landlord shall have the option to terminate this Lease upon ninety
(90) days' notice, provided such notice is given no later than one hundred
eighty (180) days after the date of such taking, condemnation, reconfiguration,
vacation, deed or other instrument. If more than twenty-five percent (25%) of
the rentable square feet of the Premises is taken, or if access to the Premises
is substantially impaired, Tenant shall have the option to terminate this Lease
upon ninety (90) days' notice, provided such notice is given no later than one
hundred eighty (180) days after the date of such taking. Landlord shall be
entitled to receive the entire award or payment in connection therewith, except
that Tenant shall have the right to file any separate claim available to Tenant
for any taking of Tenant's personal property and fixtures belonging to Tenant
and removable by Tenant upon expiration of the Lease Term pursuant to the terms
of this Lease, and for moving expenses, so long as such claim does not diminish
the award available to Landlord, its ground lessor with respect to the Real
Property or its mortgagee, and such claim is payable separately to Tenant. All
Rent shall be apportioned as of the date of such termination, or the date of
such taking, whichever shall first occur. If any part of the Premises shall be
taken, and this Lease shall not be so terminated, the Rent shall be
proportionately abated. Tenant hereby waives any and all rights it might
otherwise have under Arizona law to seek termination of this Lease because an
essential part of the Premises is taken or the remainder of the Premises is no
longer suitable for the purposes of this Lease, it being the intent of the
parties that the provisions of Article 13 of this Lease shall govern the right
of the parties in such event.
13.2 Temporary Taking. Notwithstanding anything to the contrary
contained in this Article 13, in the event of a temporary taking of all or any
portion of the Premises for a period of ninety (90) days or less, then this
Lease shall not terminate but the Base Rent and the Additional Rent shall be
abated for the period of such taking in proportion to the ratio that the number
of rentable square feet of the Premises taken bears to the total number of
rentable square feet of the Premises. Landlord shall be entitled to receive the
entire award made in connection with any such temporary taking
ARTICLE 14
----------
ASSIGNMENT AND SUBLETTING
-------------------------
14.1 Transfers. Tenant shall not, without the prior written consent of
Landlord, assign or otherwise transfer this Lease or any interest hereunder,
permit any assignment or other such foregoing transfer of this Lease or any
interest hereunder by operation of law, sublet the Premises or any part thereof,
26
or permit the use of the Premises by any persons other than Tenant and its
employees (all of the foregoing are hereinafter sometimes referred to
collectively as "Transfers" and any person to whom any Transfer is made or
sought to be made is hereinafter sometimes referred to as a "Transferee").
Notwithstanding the foregoing and upon written notice to Landlord, Tenant may
assign this Lease to any of Tenant's Affiliates provided that the Transferee(s)
assume the obligations of Tenant hereunder pursuant to an instrument reasonably
acceptable to Landlord and further provided that the Transfer is not a
subterfuge by Tenant to avoid its obligations under this Lease (the foregoing is
hereinafter sometimes referred to as a "Permitted Transfer"). In no event may
Tenant mortgage, pledge, hypothecate, encumber, or permit any lien to attach to,
this Lease. If Tenant shall desire Landlord's consent to any Transfer other than
a Permitted Transfer, Tenant shall notify Landlord in writing, which notice (the
"Transfer Notice") shall include (i) the proposed effective date of the
Transfer, which shall not be less than forty-five (45) days nor more than one
hundred eighty (180) days after the date of delivery of the Transfer Notice,
(ii) a description of the portion of the Premises to be transferred (the
"Subject Space"), (iii) all of the terms of the proposed Transfer and the
consideration therefor, including a calculation of the "Transfer Premium," as
that term is defined in Section 14.3 below, in connection with such Transfer,
the name and address of the proposed Transferee, and a copy of all existing
and/or proposed documentation pertaining to the proposed Transfer, including all
existing operative documents to be executed to evidence such Transfer or the
agreements incidental or related to such Transfer, and (iv) current financial
statements of the proposed Transferee certified by an officer, partner or owner
thereof, and any other information required by Landlord, which will enable
Landlord to determine the financial responsibility, character, and reputation of
the proposed Transferee, nature of such Transferee's business and proposed use
of the Subject Space, and such other information as Landlord may reasonably
require. Any Transfer made without Landlord's prior written consent shall, at
Landlord's option, be null, void and of no effect, and shall, at Landlord's
option, constitute a default by Tenant under this Lease. Whether or not Landlord
shall grant consent, Tenant shall pay Landlord's review and processing fees, as
well as any reasonable legal fees (such legal fees not to exceed One Thousand
Five Hundred Dollars ($1,500.00) per Transfer) incurred by Landlord, within
thirty (30) days after written request by Landlord.
14.2 Landlord's Consent. Landlord shall not unreasonably withhold or
delay its consent to any proposed Transfer of the Subject Space to the
Transferee on the terms specified in the Transfer Notice. The parties hereby
agree that it shall be reasonable under this Lease and under any applicable law
for Landlord to withhold consent to any proposed Transfer where one or more of
the following apply, without limitation as to other reasonable grounds for
withholding consent:
14.2.1 The Transferee is of a character or reputation or
engaged in a business which is not consistent with the quality of the Building,
or would be a significantly less prestigious occupant of the Building than
Tenant;
14.2.2 The Transferee intends to use the Subject Space for
purposes which are not permitted under this Lease;
27
14.2.3 The Transferee is either a governmental agency or
instrumentality thereof;
14.2.4 The Transfer will result in more than a reasonable and
safe number of occupants per floor within the Subject Space;
14.2.5 The Transferee is not a party of reasonable financial
worth and/or financial stability in light of the responsibilities involved under
the Lease on the date consent is requested;
14.2.6 The proposed Transfer would cause Landlord to be in
violation of another lease or agreement to which Landlord is a party, or would
give an occupant of the Building a right to cancel its lease;
14.2.7 The terms of the proposed Transfer will allow the
Transferee to exercise a right of renewal, right of expansion, right of first
offer, or other similar right held by Tenant (or will allow the Transferee to
occupy space leased by Tenant pursuant to any such right); or
14.2.8 Either the proposed Transferee, or any person or entity
which directly or indirectly, controls, is controlled by, or is under common
control with, the proposed Transferee, (i) occupies space in the Building at the
time of the request for consent, (ii) is negotiating with Landlord to lease
space in the Building at such time, or (iii) has negotiated with Landlord during
the twelve (12)-month period immediately preceding the Transfer Notice.
If Landlord consents to any Transfer pursuant to the terms of
this Section 14.2 (and does not exercise any recapture rights Landlord may have
under Section 14.4 of this Lease), Tenant may within six (6) months after
Landlord's consent, but not later than the expiration of said six-month period,
enter into such Transfer of the Premises or portion thereof, upon substantially
the same terms and conditions as are set forth in the Transfer Notice furnished
by Tenant to Landlord pursuant to Section 14.1 of this Lease, provided that if
there are any changes in the terms and conditions from those specified in the
Transfer Notice (i) such that Landlord would initially have been entitled to
refuse its consent to such Transfer under this Section 14.2, or (ii) which would
cause the proposed Transfer to be more favorable to the Transferee than the
terms set forth in Tenant's original Transfer Notice, Tenant shall again submit
the Transfer to Landlord for its approval and other action under this Article 14
(including Landlord's right of recapture, if any, under Section 14.4 of this
Lease). Notwithstanding any contrary provision of this Lease, if Tenant or any
proposed Transferee claims that Landlord has unreasonably withheld or delayed
its consent to a proposed Transfer or otherwise has breached its obligations
under this Article 14, Tenant's and such Transferee's only remedy shall be to
seek a declaratory judgment and/or injunctive relief, and Tenant, on behalf of
itself and, to the extent permitted by law, such proposed Transferee waives all
other remedies against Landlord, including without limitation, the right to seek
monetary damages or to terminate this Lease.
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14.3 Transfer Premium.
14.3.1 Definition of Transfer Premium. If Landlord consents to
a Transfer, as a condition thereto which the parties hereby agree is reasonable,
Tenant shall pay to Landlord fifty percent (50%) of any "Transfer Premium," as
that term is defined in this Section 14.3, received by Tenant from such
Transferee. "Transfer Premium" shall mean all rent, additional rent or other
consideration paid by such Transferee in excess of the Rent and Additional Rent
payable by Tenant under this Lease on a per rentable square foot basis if less
than all of the Premises is transferred, after deducting the reasonable expenses
incurred by Tenant for (i) any changes, alterations and improvements to the
Premises in connection with the Transfer, and (ii) any brokerage commissions in
connection with the Transfer (collectively, the "Subleasing Costs"). "Transfer
Premium" shall also include, but not be limited to, key money and bonus money
paid by Transferee to Tenant in connection with such Transfer, and any payment
in excess of fair market value for services rendered by Tenant to Transferee or
for assets, fixtures, inventory, equipment, or furniture transferred by Tenant
to Transferee in connection with such Transfer.
14.3.2 Payment of Transfer Premiums. The determination of the
amount of the Transfer Premium shall be made on an annual basis in accordance
with the terms of this Section 14.3.2, but an estimate of the amount of the
Transfer Premium shall be made each month and one-twelfth of such estimated
amount shall be paid to Landlord promptly, but in no event later than the next
date for payment of Base Rent hereunder, subject to an annual reconciliation on
each anniversary date of the Transfer. If the payments to Landlord under this
Section 14.3.2 during the twelve (12) months preceding each annual
reconciliation exceed the amount of Transfer Premium determined on an annual
basis, then Landlord shall credit the overpayment against Tenant's future
obligations under this Section 14.3.2 or if the overpayment occurs during the
last year of the Transfer in question, refund the excess to Tenant. If Tenant
has underpaid the Transfer Premium, as determined by such annual reconciliation,
Tenant shall pay the amount of such deficiency to Landlord promptly, but in no
event later than the next date for payment of Basic Rent hereunder. For purposes
of calculating the Transfer Premium on an annual basis, Tenant's Subleasing
Costs shall be deemed to be offset against the first rent, additional rent or
other consideration payable by the Transferee, until such Subleasing Costs are
exhausted.
14.3.3 Calculations of Rent. In the calculation of the Rent,
as it relates to the Transfer Premium calculated under Section 14.3.1 of this
Lease, the Rent paid during each annual period for the Subject Space by Tenant,
shall be computed after adjusting such rent to the actual effective rent to be
paid, taking into consideration any and all leasehold concessions granted in
connection therewith, including, but not limited to, any rent credit and tenant
improvement allowance. For purposes of calculating any such effective rent, all
such concessions shall be amortized on a straight-line basis over the relevant
term.
14.4 Landlord's Option as to Subject Space. Notwithstanding anything to
the contrary contained in this Article 14, Landlord and Tenant shall have the
option, by mutual written consent within thirty (30) days after receipt of any
Transfer Notice, to have Landlord (i) recapture the Subject Space, or (ii) take
29
an assignment or sublease of the Subject Space from Tenant. Such recapture, or
sublease or assignment notice shall cancel and terminate this Lease, or create a
sublease or assignment, as the case may be, with respect to the Subject Space as
of the date stated in the Transfer Notice as the effective date of the proposed
Transfer until the last day of the term of the Transfer as set forth in the
Transfer Notice. In the event of a recapture by Landlord, if this Lease shall be
canceled with respect to less than the entire Premises, the Rent reserved herein
shall be prorated on the basis of the number of rentable square feet retained by
Tenant in proportion to the number of rentable square feet contained in the
Premises, and this Lease as so amended shall continue thereafter in full force
and effect, and upon request of either party, the parties shall execute written
confirmation of the same. If the Subject Space shall be assigned or subleased by
Tenant to Landlord, the rent for the Subject Space payable by Landlord to Tenant
shall be-the lesser of (i) the effective Base Rent plus the Additional Rent
payable by Tenant under this Lease for the Subject Space on a prorated basis
based upon the number of rentable square feet in the Subject Space, or (ii) the
effective rent (taking into account all concessions made by Tenant to the
Transferee) set forth in the Transfer Notice, and all other provisions of this
Lease shall remain in full force and effect, and upon request of either party,
the parties shall execute a written confirmation of the same. If the parties
decline, or fail to elect in a timely manner to recapture, sublease or take an
assignment of the Subject Space under this Section 14.4, then, provided Landlord
has consented to the proposed Transfer, Tenant shall be entitled to proceed to
transfer the Subject Space to the proposed Transferee, subject to provisions of
the last paragraph of Section 14.2 of this Lease.
14.5 Effect of Transfer. If Landlord consents to a Transfer (including
a Permitted Transfer), (i) the terms and conditions of this Lease shall in no
way be deemed to have been waived or modified, (ii) such consent shall not be
deemed consent to any further Transfer by either Tenant or a Transferee, (iii)
Tenant shall deliver to Landlord, promptly after execution, an original executed
copy of all documentation pertaining to the Transfer in form reasonably
acceptable to Landlord, (iv) Tenant shall furnish upon Landlord's request a
complete statement, certified by an independent certified public accountant, or
Tenant's chief financial officer, setting forth in detail the computation of any
Transfer Premium Tenant has derived and shall derive from such Transfer, and (v)
no Transfer relating to this Lease or agreement entered into with respect
thereto, whether with or without Landlord's consent, shall relieve Tenant or any
guarantor of the Lease from liability under this Lease unless otherwise
specified in writing by the parties to this Lease in their respective sole and
absolute discretion. Landlord or its authorized representatives shall have the
right at all reasonable times to audit the books, records and papers of Tenant
relating to any Transfer, and shall have the right to make copies thereof. If
the Transfer Premium respecting any Transfer shall be found understated, Tenant
shall, within thirty (30) days after demand, pay the deficiency and Landlord's
costs of such audit, and if understated by more than thirty percent (30%),
Landlord shall have the right to cancel this Lease upon thirty (30) days' notice
to Tenant.
14.6 Additional Transfers. The provisions of this Section 14.6. shall
not apply to the Original Tenant, Tenant's Affiliates or any entity resulting
from the merger, consolidation or reorganization of the Original Tenant or
Tenant's Affiliates. For purposes of this Lease, the term "Transfer" shall also
include (i) if Tenant is a partnership, the withdrawal or change, voluntary,
30
involuntary or by operation of law, of twenty-five percent (25%) or more of the
partners, or transfer of twenty-five percent or more of partnership interests,
within a twelve (12)-month period, or the dissolution of the partnership without
immediate reconstitution thereof, and (ii) if Tenant is a closely held
corporation (i.e., whose stock is not publicly held and not traded through an
exchange or over the counter), (A) the dissolution, merger, consolidation or
other reorganization of Tenant, the sale or other transfer of more than an
aggregate of twenty-five percent (25%) of the voting shares of Tenant (other
than to immediate family members by reason of gift or death), within a twelve
(12)-month period, or (C) the sale, mortgage, hypothecation or pledge of more
than an aggregate of twenty-five percent (25%) of the value of the unencumbered
assets of Tenant within a twelve (12) month period.
ARTICLE 15
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SURRENDER OF PREMISES: OWNERSHIP AND
------------------------------------
REMOVAL OF TRADE FIXTURES
-------------------------
15.1 Surrender of Premises. No act or thing done by Landlord or any
agent or employee of Landlord during the Lease Term shall be deemed to
constitute an acceptance by Landlord of a surrender of the Premises unless such
intent is specifically acknowledged in a writing signed by Landlord. The
delivery of keys to the Premises to Landlord or any agent or employee of
Landlord shall not constitute a surrender of the Premises or effect a
termination of this Lease, whether or not the keys are thereafter retained by
Landlord, and notwithstanding such delivery Tenant shall be entitled to the
return of such keys at any reasonable time upon request until this Lease shall
have been properly terminated. The voluntary or other surrender of this Lease by
Tenant, whether accepted by Landlord or not, or a mutual termination hereof,
shall not work a merger, and at the option of Landlord shall operate as an
assignment to Landlord of all subleases or subtenancies affecting the Premises.
15.2 Removal of Tenant Property by Tenant. Upon the expiration of the
Lease Term, or upon any earlier termination of this Lease, Tenant shall, subject
to the provisions of this Article 15, quit and surrender possession of the
Premises to Landlord in as good order and condition as when Tenant took
possession and as thereafter improved by Landlord and/or Tenant, reasonable wear
and tear and repairs which are specifically made the responsibility of Landlord
hereunder excepted. Upon such expiration or termination, Tenant shall, without
expense to Landlord, remove or cause to be removed from the Premises all debris
and rubbish, and such items of furniture, equipment (including the Cabling),
free-standing cabinet work, and other articles of personal property owned by
Tenant or installed or placed by Tenant at its expense in the Premises, and such
similar articles of any other persons claiming under Tenant, as Landlord may, in
its sole discretion, require to be removed, and Tenant shall repair at its own
expense all damage to the Premises and Building resulting from such removal.
31
ARTICLE 16
----------
HOLDING OVER
------------
If Tenant holds over after the expiration of the Lease Term hereof,
with or without the express or implied consent of Landlord, such tenancy shall
be from month-to-month only, and shall not constitute a renewal hereof or an
extension for any further term, and in such case Base Rent shall be payable at a
monthly rate equal to one hundred fifty percent (150%) of the Base Rent
applicable during the last rental period of the Lease Term under this Lease.
Such month-to-month tenancy shall be subject to every other term, covenant and
agreement contained herein. Nothing contained in this Article 16 shall be
construed as consent by Landlord to any holding over by Tenant, and Landlord
expressly reserves the right to require Tenant to surrender possession of the
Premises to Landlord as provided in this Lease upon the expiration or other
termination of this Lease. The provisions of this Article 16 shall not be deemed
to limit or constitute a waiver of any other rights or remedies of Landlord
provided herein or at law. If Tenant fails to surrender the Premises upon the
termination or expiration of this Lease, in addition to any other liabilities to
Landlord accruing therefrom, Tenant shall protect, defend, indemnify and hold
Landlord harmless for, from and against all loss, costs (including reasonable
attorneys' fees) and liability resulting from such failure, including, without
limiting the generality of the foregoing, any claims made by any succeeding
tenant founded upon such failure to surrender, and any lost profits to Landlord
resulting therefrom. The foregoing indemnity is conditioned on prompt notice,
tender of defense/settlement, and reasonable cooperation by Landlord.
ARTICLE 17
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ESTOPPEL CERTIFICATES
---------------------
Within ten (10) business days following a request in writing by
Landlord, Tenant shall execute and deliver to Landlord an estoppel certificate,
which, as submitted by Landlord, shall be substantially in the form of Exhibit
E, attached hereto, (or such other form as may be required by any prospective
mortgagee or purchaser of the Real Property, or any portion thereof), indicating
therein any exceptions thereto that may exist at that time, and shall also
contain any other information reasonably requested by Landlord or Landlord's
mortgagee or prospective mortgagee. Tenant shall execute and deliver whatever
other instruments may be reasonably required for such purposes. Failure of
Tenant to timely execute and deliver such estoppel certificate or other
instruments shall constitute an acceptance of the Premises and an acknowledgment
by Tenant that statements included in the estoppel certificate are true and
correct, without exception. Notwithstanding the foregoing, Tenant's obligation
to execute, or be bound under, an estoppel certificate shall not extend to any
document which in any way diminishes Tenant's rights or expands Tenant's
obligations relating to this Lease.
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ARTICLE 18
----------
SUBORDINATION
-------------
This Lease is subject and subordinate to all present and future ground
or underlying leases of the Real Property and to the lien of any mortgages or
trust deeds, now or hereafter in force against the Real Property and the
Building, if any, and to all renewals, extensions, modifications, consolidations
and replacements thereof, and to all advances made or hereafter to be made upon
the security of such mortgages or trust deeds, unless the holders of such
mortgages or trust deeds or the lessors under such ground lease or underlying
leases, require in writing that this Lease be superior thereto. Tenant covenants
and agrees in the event any proceedings are brought for the foreclosure of any
such mortgage, or if any ground or underlying lease is terminated, to attorn,
without any deductions or set-offs whatsoever, to the purchaser upon any such
foreclosure sale, or to the lessor of such ground or underlying lease, as the
case may be, if so requested to do so by such purchaser or lessor, and to
recognize such purchaser or lessor as the lessor under this Lease provided that
such purchaser or lessor agrees to be bound as landlord under this Lease. Tenant
shall, within ten (10) business days of request by Landlord, execute such
further instruments or assurances as Landlord may reasonably deem necessary to
evidence or confirm such attornment and/or the subordination or superiority of
this Lease to any such mortgages, trust deeds, ground leases or underlying
leases. Tenant waives the provisions of any current or future statute, rule or
law which may give or purport to give Tenant any right or election to terminate
or otherwise adversely affect this Lease and the obligations of the Tenant
hereunder in the event of any foreclosure proceeding or sale.
Attached hereto as Exhibit F is the form of Landlord lender's
subordination, nondisturbance and attornment agreement (the "SNDA").
Concurrently with Tenant's execution hereof, Tenant shall execute the SNDA and
Landlord shall deliver the same to its lender. Landlord shall exercise good
faith efforts to cause its lender to execute and deliver the SNDA to Tenant
within fifteen (15) days following the date hereof. If Landlord's lender fails
to execute and deliver the SNDA within said fifteen (15) day period, then Tenant
may terminate this Lease by giving Landlord written notice thereof within ten
(10) days following the expiration of said fifteen ( 15) day period and prior to
the delivery of the SNDA to Tenant. If Tenant so elects to terminate this Lease,
Landlord shall return the first month of Base Rent to Tenant and neither party
shall have any further obligations to the other hereunder.
ARTICLE 19
----------
DEFAULTS; REMEDIES
------------------
19.1 Events of Default. The occurrence of any of the following shall
constitute a default of this Lease by Tenant:
19.1.1 Any failure by Tenant to pay any Rent or any other
charge required to be paid under this Lease, or any part thereof, after five (5)
business days following written notice of non-payment; provided, however, that
33
any such notice shall be in lieu of, and not in addition to, any notice required
under any Arizona law; or
19.1.2 Any failure by Tenant to observe or perform any other
provision, covenant or condition of this Lease to be observed or performed by
Tenant where such failure continues for thirty (30) days after written notice
thereof from Landlord to Tenant; provided however, that any such notice shall be
in lieu of, and not in addition to, any notice required under any Arizona law;
and provided further that if the nature of such default is such that the same
cannot reasonably be cured within a thirty (30)-day period, Tenant shall not be
deemed to be in default if it diligently commences such cure within such period
and thereafter diligently proceeds to rectify and cure said default as soon as
possible, or
19.1.3 Abandonment or vacation of the Premises by Tenant.
Abandonment is herein defined to include, but is not limited to, any absence by
Tenant from the Premises for ten ( 10) business days or longer while in default
of any provision of this Lease.
19.2 Remedies.
19.2.1 In the event of any default by Tenant, Landlord, in
addition to any other rights or remedies it may have by statute or otherwise,
will be entitled to pursue any one or more of the following remedies: (i)
Landlord may terminate this Lease and Tenant's right to possession of the
Premises by Landlord's specific written election, (ii) Landlord may reenter and
retake possession of the Premises through judicial process or through self-help
by lock out under A.R.S. ss. 33-361(A) and remove any or all persons or property
from the Premises; (iii) Landlord may commence a forcible entry and detainer
action for recovery of possession of the Premises and all due and unpaid Rent
under A.R.S. ss. 33-361(A); (iv) Landlord may retain the Security Deposit and
apply the Security Deposit toward accrued and accruing Rent and damages under
this Lease; (v) Landlord may commence an action for ejectment under A.R.S. ss.
12-1251; (vi) Landlord may enforce any common law, statutory, or contractual
Landlord's lien under Arizona law, A.R.S. ss. 33-361(D) or this Lease; (vii)
Landlord may commence an action for Rent under A.R.S. ss. 12-1271; and (viii)
Landlord may commence, from time to time, an action to recover any Rent,
accelerated Rent, liquidated damages, or any other sums due to Landlord under
this Lease. The remedies established above will be in addition to all other
legal remedies available to Landlord under Arizona law and not in lieu of any
other remedies.
19.2.2 Landlord and Tenant agree that, unless Landlord has
made a specific written election to terminate this Lease, Landlord will not be
deemed to have elected to terminate this Lease as a result of Landlord's
exercise of any of its remedies outlined in Section 19.2.1. Specifically, but
without limitation of the previous sentence, neither Landlord's acts nor
Landlord's reentry and retaking of the Premises nor Tenant's surrender of the
Premises nor Landlord's commencement of an action for future Rent will result in
a termination of this Lease, absent a written election to terminate by Landlord,
and the commencement by Landlord of a forcible entry and detainer action will
34
not, by itself, indicate Landlord's election to terminate this Lease absent a
specific written election by Landlord in the complaint or in a separate written
notice.
19.3 Reentry.
19.3.1 If Landlord elects to reenter the Premises upon
Tenant's default, any personal property that belongs to Tenant may, but need
not, be removed by Landlord and stored in a public warehouse or elsewhere at the
cost and for the account of Tenant. Any and all property that is removed from
the Premises by Landlord pursuant to the authority of this Lease or Arizona law
may be handled, removed, and stored by or at the direction of Landlord at the
sole risk, cost, and expense of Tenant, and Landlord will not be responsible for
its value, preservation, or safekeeping. Tenant will pay to Landlord, upon
Landlord's demand and as Additional Rent, any and all reasonable expenses and
storage charges actually incurred in the removal.
19.3.2 If Landlord elects to reenter by giving notice of its
intention to Tenant or if Landlord actually takes possession by physical act or
legal proceedings, Landlord may either terminate this Lease or attempt to relet
all or part of the Premises for any length of lease term (which may be for a
term shorter than or extending beyond the Lease Term). Any relet by Landlord
will be at a rate acceptable to Landlord and will be subject to any other terms
and conditions that Landlord in the exercise of Landlord's reasonable discretion
may deem advisable (including the right to change the character and use of the
Premises and the right to make alterations and repairs to the Premises at
Tenant's expense for the purpose of the reletting). If Landlord elects to
reenter and attempts to relet the Premises, Tenant will remain fully liable for
all obligations of Tenant under this Lease, and Landlord's actions in reentering
or attempting to relet will not be deemed a full or partial waiver of any
obligations of Tenant. Notwithstanding anything to the contrary herein, if
Landlord relets the entire Premises, then this Lease shall terminate upon such
reletting, and Landlord's damage remedies will be as set forth in Section 19.4.
However, if Landlord relets only a portion or portions of the Premises,
Landlord's damage remedies will be as set froth in Sections 19.3.3, 19.3.4 and
19.3.5 below.
19.3.3 Landlord will give notice of any reletting of a portion
or portions of the Premises. Upon each such reletting, Tenant will be liable for
and will pay immediately to Landlord, as Additional Rent and in addition to any
other sums due under this Lease: (i) the costs and expenses of reletting
(including advertising costs, brokerage fees, attorney fees, and the cost of any
alterations and repairs incurred by Landlord); and (ii) the amount, discounted
at a present value basis (which present value, for purposes of this Lease, shall
be calculated at the then applicable discount rate of the Federal Reserve Bank
of San Francisco plus one (1) percentage point), by which the Rent reserved in
this Lease for the period of the reletting (up to but not beyond the Lease Term)
exceeds, if at all, the amount to be paid as Rent under the relet for the
Premises for the relet term.
19.3.4 At the option of Landlord and in lieu of requiring
immediate payment from the Tenant under the terms of Section 19.3.3 above, rents
received by Landlord from reletting will be applied: first, to the payment of
any indebtedness other than Rent due under this Lease from Tenant to Landlord;
35
second, to the payment of the costs and expenses of reletting, as described
above; third, to the payment of Rent and other charges due and unpaid under this
Lease. After application by Landlord under the terms of the previous sentence,
the residue, if any, will be held without interest to Tenant by Landlord and
applied to the payment of future Rent as it becomes due and payable.
19.3.5 If Tenant has been credited with any rent to be
received by reletting under the terms of Section 19.3.4 above and these rents
are not promptly paid to Landlord by the new tenant, or if rent received from
the reletting under the terms of Section 19.3.4 above during any month is less
than that to be paid during that month by Tenant, Tenant will pay any deficiency
to Landlord upon Landlord's demand. The deficiency will be fairly calculated by
Landlord. If any payments are not made upon demand, Landlord may undertake legal
proceedings to recover all payments, whether one or more payments are past due,
and Tenant will be liable for all attorney fees incurred by Landlord in
connection with attempts to recover the payments, whether or not legal
proceedings are commenced.
19.4 Accelerated Rent -Termination. If Landlord terminates this Lease
for any default, Landlord, in addition to any other remedy, may only recover the
following damages from Tenant: (i) all actual damages and expenses that Landlord
may incur by reason of the default including the cost of recovering the Premises
(including attorney fees, court costs, and storage charges); (ii) the amount of
unpaid Rent payment as of the date this Lease is terminated; (iii) the present
value, at the time of termination of this Lease, of the excess, if any, of the
amount of Rent reserved in this Lease for the remainder of the Lease Term less
the fair rental value of the Premises for the remainder of the Term; and (iv)
any other amount necessary to compensate Landlord for damages actually incurred
by Landlord arising out of Tenant's failure to perform Tenant's obligations
under this Lease or for damages that, in the ordinary course of events, would be
likely to result to Landlord from the failure of performance. All amounts
described in this Section 19.4 will be immediately due and payable from Tenant
to Landlord upon demand.
19.5 Future Rents - No Termination.
19.5.1 Upon Tenant's default under this Lease, Landlord,
without terminating this Lease, may elect to: (i) bring actions at various times
during the remainder of the Lease Term to collect all then-accrued and unpaid
Rent and other actual damages (without waiving any right to receive future
Rents); (ii) bring an action upon the expiration of the Lease Term for all
unpaid Rent and other damages; or (iii) as provided in Section 19.3.3 above,
bring an action upon the reletting of the Premises for unpaid Rent and other
actual damages through the date of reletting plus the present value of the
difference between the Rent specified in this Lease and the rent paid by any new
tenant or tenants.
19.5.2 In addition to the remedies described elsewhere in this
Lease, if Tenant is in default of this Lease, Landlord without terminating this
Lease, may recover from Tenant all Rent and other sums due and payable by Tenant
under this Lease as of the date of entry of a judgment against Tenant plus the
36
difference between: (i) the Rent due for the remainder of the Lease Term; less
(ii) the fair rental value of the Premises for the remainder of the Lease Term.
19.5.3 Any acceleration and full recovery of Rent will not
restrict in any way the right of Landlord to exercise any other remedy or
remedies set forth in this Article 19 in the event Tenant defaults in the
performance of any other obligations of Tenant in this Lease.
19.6 Calculation of Additional Rent. Whenever under this Article 19
Tenant is liable for the payment of any Additional Rent to Landlord, and the
amount of the Additional Rent that would have accrued for a specific period is
not known, then Additional Rent may be estimated by Landlord on the basis of
past Additional Rent. If this Lease continues in effect after any payment of
Additional Rent calculated on the basis of estimates or averages as above
provided, Tenant's actual liability for these charges will be adjusted as any
Additional Rent from tenants to whom the Premises are relet is received or as
the actual amount of Additional Rent due from Tenant is known. These adjustments
will be made periodically as Landlord deems appropriate, but not less often than
yearly, and Landlord will give Tenant notice of these adjustments and of any
amounts due from Tenant to Landlord, which amounts will be payable on demand.
19.7 Sublessees of Tenant. Whether or not Landlord elects to terminate
this Lease on account of any default by Tenant, as set forth in this Article 19,
Landlord shall have the right to terminate any and all subleases, licenses,
concessions or other consensual arrangements for possession entered into by
Tenant and affecting the Premises or may, in Landlord's sole discretion, succeed
to Tenant's interest in such subleases, licenses, concessions or arrangements.
In the event of Landlord's election to succeed to Tenant's interest in any such
subleases, licenses, concessions or arrangements, Tenant shall, as of the date
of notice by Landlord of such election, have no further right to or interest in
the rent or other consideration receivable thereunder.
19.8 Form of Payment After Default. Following the occurrence of an
event of default by Tenant, Landlord shall have the right to require that any or
all subsequent amounts paid by Tenant to Landlord hereunder, whether in the cure
of the default in question or otherwise, be paid in the form of cash, money
order, cashier's or certified check drawn on an institution acceptable to
Landlord, or by other means approved by Landlord, notwithstanding any prior
practice of accepting payments in any different form.
19.9 Waiver of Default. No waiver by Landlord or Tenant of any
violation or breach of any of the terms, provisions and covenants herein
contained shall be deemed or construed to constitute a waiver of any other or
later violation or breach of the same or any other of the terms, provisions, and
covenants herein contained. Forbearance by Landlord or Tenant in enforcement of
one or more of the remedies herein provided upon an event of default shall not
be deemed or construed to constitute a waiver of such default. The acceptance of
any Rent hereunder by Landlord following the occurrence of any default, whether
or not known to Landlord, shall not be deemed a waiver of any such default,
except only a default in the payment of the Rent so accepted.
37
19.10 Efforts to Relet. For the purposes of this Article 19, Tenant's
right to possession shall not be deemed to have been terminated by efforts of
Landlord to relet the Premises, by its acts of maintenance or preservation with
respect to the Premises, or by appointment of a receiver to protect Landlord's
interests hereunder. The foregoing enumeration is not exhaustive, but merely
illustrative of acts which may be performed by Landlord without terminating
Tenant's right to possession. In the event Tenant has defaulted under this Lease
and no longer occupies the Premises, Landlord shall use commercially reasonable
efforts to relet the Premises, but Tenant acknowledges that Landlord may give
preference to reletting space that is not subject to a lease over reletting the
Premises.
ARTICLE 20
----------
COVENANT OF QUIET ENJOYMENT
---------------------------
Landlord covenants that Tenant, on paying the Rent, charges for
services and other payments herein reserved and on keeping, observing and
performing all the other terms, covenants, conditions, provisions and agreements
herein contained on the part of Tenant to be kept, observed and performed,
shall, during the Lease Term, peaceably and quietly have, hold and enjoy the
Premises subject to the terms, covenants, conditions, provisions and agreements
hereof without interference by any persons lawfully claiming by or through
Landlord. The foregoing covenant is in lieu of any other covenant express or
implied.
ARTICLE 21
----------
[INTENTIONALLY DELETED]
-----------------------
ARTICLE 22
----------
SUBSTITUTION OF OTHER PREMISES
------------------------------
If any contiguous portion of the Premises is located on less than
one-half (1/2) of a floor ("Partial Floor Premises"), Landlord shall have the
right to move Tenant from the Partial Floor Premises to other space in the
Building comparable to the Premises, and all terms hereof shall apply to the new
space with equal force; provided, however, Landlord may only exercise this right
once during the initial Lease Term and once during each Option Term. In such
event, Landlord shall give Tenant prior notice of Landlord's election to so
relocate Tenant, and shall move Tenant's effects from the Partial Floor Premises
to the new space at Landlord's sole cost and expense at such time and in such
manner as to inconvenience Tenant as little as reasonably practicable and
Landlord shall immediately pay to Tenant all other reasonable out-of-pocket
costs and reasonable and actual internal costs (but not lost productivity or
lost profits) incurred by Tenant as a direct result of such relocation,
including without limitation the cost of data and voice lines, stationery,
business cards and telephone directories; provided, however, prior to incurring
internal costs for which Tenant desires reimbursement, Tenant shall first obtain
Landlord's approval thereof, which approval shall not be unreasonably withheld
38
or delayed. The new space shall be delivered to Tenant with improvements
substantially similar to those improvements existing in the Partial Floor
Premises at the time of Landlord's notification to Tenant of the relocation.
Simultaneously with such relocation of the Partial Floor Premises, the parties
shall execute an amendment to this Lease stating the relocation of the Partial
Floor Premises.
ARTICLE 23
----------
SIGNS
-----
23.1 In General. Tenant shall be entitled, at Landlord's sole cost and
expense, to Building-standard identification signage outside of Tenant's
Premises on the floor on which Tenant's Premises are located. The location,
quality, design, style, and size of such signage shall be consistent with the
Landlord's Building standard signage program
23.2 Building Directory. Tenant shall be entitled to twenty (20) lines
on the Building directory to display Tenant's name and locations in the
Building.
23.3 Prohibited Signage and Other Items. Any signs, notices, logos,
pictures, names or advertisements which are installed and that have not been
individually approved by Landlord may be removed by Landlord at the sole expense
of Tenant provided Landlord has given Tenant ten (10) business days' notice and
Tenant has failed to remove such items within said time period. Except as
otherwise in permitted in Section 23.4, Tenant may not install any signs on the
exterior or roof of the Building or the common areas of the Building or the Real
Property. Any signs, window coverings, or blinds (even if the same are located
behind the Landlord approved window coverings for the Building), or other items
visible from the exterior of the Premises or Building are subject to the prior
approval of Landlord, in its sole discretion.
23.4 Top of the Building Signage.
23.4.1 Description of Building Top Signage. Tenant shall be
entitled to install two (2) signs identifying Tenant at the top of the Building,
which signs are to be located on the sides of the Building facing North and
South (the "Building Top Signage"). The graphics, materials, color, design,
lettering, lighting, size, specifications and exact location of the Building Top
Signage shall be subject to the prior written approval of Landlord, which
approval shall not be unreasonably withheld or delayed. In addition, such
signage shall be subject to Tenant's receipt of all required governmental
permits and approvals and shall be subject to all applicable governmental laws
and ordinances. Landlord makes no representation that such permits and approvals
are available for the Building Top Signage. The cost of installation of the
Building Top Signage as well as all costs of design and construction of such
signage and all other costs associated with such signage, including, without
limitation, utility charges and hook-up fees, permits, maintenance and repair,
shall be the sole responsibility of Tenant. Tenant further acknowledges that any
repairs necessitated as a result of window washing equipment cabling
passing-over such signage in the normal course of cleaning the exterior windows
39
of the Building shall be the sole responsibility of Tenant. During the Lease
Term, Tenant may, at its sole cost and expense, install substitute Building Top
Signage in accordance with this Article 23 or remove the Building Top Signage.
If Tenant does not install the Building Top Signage within two (2) years
following the Lease Commencement Date, Tenant's rights under this Section 23.4
shall terminate.
23.4.2 Transfer of Building Top Signage. In connection with
any assignment of Tenant's interest under this Lease or any single sublease of
the entire Premises, which assignment or sublease is permitted pursuant to the
provisions of Article 14 of this Lease, the Building Top Signage may be assigned
to the assignee or sublessee with Landlord's prior consent, which consent shall
not be unreasonably withheld by Landlord so long as the name of the
assignee/sublessee is not an "Objectionable Name," as that term is defined
below. Should the name of the Original Tenant change, Tenant shall be entitled
to modify, at Tenant's sole cost and expense, the Building Top Signage to
reflect Tenant's new name, but only if Tenant's new name is not an
"Objectionable Name." The term "Objectionable Name" shall mean any name which
relates to an entity that (i) is of a character or reputation that is materially
inconsistent with the quality of the Building, (ii) is of a political
orientation, (iii) would otherwise reasonably offend a landlord of a comparable
building taking into consideration the level and visibility of signage rights
inherent in the Building Top Signage, (iv) would conflict with any covenants in
leases of space in the Building, or (v) is a competitor of any tenant of the
Building.
23.4.3 Termination of Building Top Signage. Notwithstanding
anything to the contrary contained herein, in the event that at any time after
the Must Take Effective Date, Tenant or any entity with Building Top Signage
rights fails to occupy at least 50,000 rentable square feet in the Building,
Tenant's rights to the Building Top Signage shall thereupon terminate and
Landlord shall have the right to remove, at Tenant's expense, the Building Top
Signage.
23.4.4 Maintenance of Building Top Signage. Should the
Building Top Signage require maintenance or repairs as determined in Landlord's
reasonable judgment, Landlord shall have the right to provide written notice
thereof to Tenant and Tenant shall cause such repairs and/or maintenance to be
performed within thirty (30) days after receipt of such notice from Landlord, at
Tenant's sole cost and expense; provided, however, if such repairs and/or
maintenance are reasonably expected to require longer than thirty (30) days to
perform, Tenant shall commence such repairs and/or maintenance within such
thirty (30) day period and shall diligently prosecute such repairs and
maintenance to completion. Should Tenant fail to perform such maintenance and
repairs within the periods described in the immediately preceding sentence,
Landlord shall have the right to cause such work to be performed and to charge
Tenant as Additional Rent for the costs of such work plus interest at the
Interest Rate from the date of Landlord's payment of such costs to the date of
Tenant's reimbursement to Landlord. Upon the expiration or earlier termination
of this Lease, Tenant shall, at Tenant's sole cost and expense, cause the
Building Top Signage to be removed from the exterior of the Building and shall
cause the exterior of the Building to be restored to the condition existing
prior to the placement of such signage. If Tenant fails to remove such signage
and to restore the exterior of the Building as provided in the immediately
preceding sentence within thirty (30) days following the expiration or earlier
40
termination of this Lease, then Landlord may perform such work, and all costs
and expenses incurred by Landlord in so performing plus interest at the Interest
Rate from the date of Landlord's payment of such costs to the date of Tenant's
reimbursement to Landlord shall be reimbursed by Tenant to Landlord within ten
(10) days after Tenant's receipt of invoice therefor. The immediately preceding
sentence shall survive the expiration of earlier termination of this Lease.
ARTICLE 24
----------
COMPLIANCE WITH LAW
-------------------
Tenant shall not do anything or suffer anything to be done in or about
the Premises which will in any way conflict with any law, statute, ordinance or
other governmental rule, regulation or requirement now in force or which may
hereafter be enacted or promulgated. At its sole cost and expense, Tenant shall
promptly comply with all such governmental measures directly related to Tenant's
use of the Premises, other than the making of structural changes or changes to
the Building's life safety system. Should any standard or regulation now or
hereafter be imposed on Landlord or Tenant by a state, federal or local
governmental body charged with the establishment, regulation and enforcement of
occupational, health or safety standards for employers, employees, landlords or
tenants, then Tenant agrees, at its sole cost and expense, to comply promptly
with such standards or regulations directly related to Tenant's use of the
Premises. The judgment of any court of competent jurisdiction or the admission
of Tenant in any judicial action, regardless of whether Landlord is a party
thereto, that Tenant has violated any of said governmental measures, shall be
conclusive of that fact as between Landlord and Tenant.
Landlord represents and warrants to Tenant as follows:
(i) To Landlord's actual knowledge, the Real Property is
currently zoned C-2, HRI, which allows Tenant to use the Premises for
the permitted uses described in this Lease;
(ii) To Landlord's actual knowledge, Landlord has received no
notice from any governmental authority that the Real Property
(inclusive of the Building and the Premises) is not in compliance with
the Americans With Disabilities Act and/or any comparable state
statute; and
(iii) To Landlord's actual knowledge, the Real Property
(inclusive of the Building and the Premises) is not in violation of any
applicable laws, rules, regulations, ordinances and local laws
(excepting the Americans With Disabilities Act and any comparable state
statutes, which are the subject of the representation set forth in
clause (ii) above, and except for Environmental Conditions, which are
the subject of the representation set forth in Section 29.31.6).
41
ARTICLE 25
----------
LATE CHARGES
------------
If any installment of Rent or any other sum due from Tenant shall not
be received by Landlord or Landlord's designee within five (5) days after said
amount is due, then Tenant shall pay to Landlord a late charge equal to five
percent (5%) of the amount due plus any attorneys' fees incurred by Landlord by
reason of Tenant's failure to pay Rent and/or other charges when due hereunder.
The late charge shall be deemed Additional Rent and the right to require it
shall be in addition to all of Landlord's other rights and remedies hereunder or
at law and shall not be construed as liquidated damages or as limiting
Landlord's remedies in any manner. In addition to the late charge described
above, any Rent or other amounts owing hereunder which are not paid within three
(3) days after the date they are due shall thereafter bear interest until paid
at a rate equal to the discount rate of the Federal Reserve Bank of San
Francisco at the time of accrual plus five percent (5%) per annum, provided that
in no case shall such rate be higher than the highest rate permitted by
applicable law (the "Interest Rate").
ARTICLE 26
----------
RIGHT TO CURE DEFAULT; PAYMENTS
-------------------------------
26.1 Landlord's Cure. All covenants and agreements to be kept or
performed by Tenant under this Lease shall be performed by Tenant at Tenant's
sole cost and expense and without any reduction of Rent except as specified in
this Lease. If Tenant shall fail to perform any of its obligations under this
Lease, within a reasonable time after such performance is required by the terms
of this Lease, Landlord may, but shall not be obligated to, after reasonable
prior written notice to Tenant, make any such payment or perform any such act on
Tenant's part without waiving its right based upon any default of Tenant and
without releasing Tenant from any obligations hereunder.
26.2 Tenant's Reimbursement. Except as may be specifically provided to
the contrary in this Lease, Tenant shall pay to Landlord, within fifteen (15)
days after delivery by Landlord to Tenant of statements therefor: (i) sums equal
to expenditures reasonably made and obligations actually paid by Landlord in
connection with the remedying by Landlord of Tenant's defaults pursuant to the
provisions of Section 26.1; (ii) sums equal to all actual losses, costs,
liabilities, damages and expenses referred to in Article 10 of this Lease; and
(iii) sums equal to all expenditures made and obligations actually paid by
Landlord in collecting or attempting to collect the Rent or in enforcing or
attempting to enforce any rights of Landlord under this Lease or pursuant to
law, including, without limitation, all legal fees and other amounts so
expended. Tenant's obligations under this Section 26.2 shall survive the
expiration or sooner termination of the Lease Term. Should Tenant bring an
action to enforce any provision, or collect damages, under this Lease, Tenant
shall be entitled to its reasonable attorneys' fees and costs associated with
such action.
42
26.3 Tenant's Cure Rights. If Tenant provides written notice to
Landlord of the need for repairs and/or maintenance which are Landlord's
obligation under this Lease, and Landlord fails to undertake such repairs and/or
maintenance within a reasonable period of time, given the circumstances, after
the receipt of such written notice, but in no event earlier than ten (10) days
after receipt of such written notice, and if such failure continues after five
(5) days following an additional notice to Landlord specifying that Tenant
intends to undertake such repairs and/or maintenance, then Tenant may proceed to
undertake such repairs and/or maintenance and if such action was required under
the terms of this Lease to be taken by Landlord, then Tenant shall be entitled
to reimbursement by Landlord for Tenant's reasonable costs and expenses in
taking such action within thirty (30) days following delivery of an invoice
therefor containing a reasonably particularized breakdown of such costs and
expenses (the "Invoice"). In the event Tenant undertakes such repairs and/or
maintenance, and such work will affect the Building's life safety system,
heating, ventilating and air conditioning systems or elevator systems, Tenant
shall use only those contractors used by Landlord in the Building for work on
such systems. If (i) the amount set forth in the Invoice is less than or equal
to Two Thousand Dollars ($2,000.00) and Landlord does not pay the amount within
thirty (30) days following receipt of the Invoice (regardless of whether
Landlord has delivered a written objection to Tenant) or (ii) the amount set
forth in the Invoice is greater than Two Thousand Dollars ($2,000.00) and
Landlord has neither paid the amount within thirty (30) days following
Landlord's receipt of the Invoice nor delivered a written objection to Tenant
within thirty (30) days after receipt of the Invoice, then Tenant shall be
entitled to deduct from Base Rent payable by Tenant under this Lease, the amount
set forth in such Invoice, together with interest thereon at the Interest Rate,
in monthly installments not to exceed twenty percent (20%) of monthly Base Rent,
until fully reimbursed. If the amount set forth in the Invoice is less than or
equal to Two Thousand Dollars ($2,000.00) and Tenant elects to deduct such
amount against Base Rent as set forth above, and if Landlord delivers to Tenant
within thirty (30) days following receipt of the Invoice, a written objection on
the basis that such repair and/or maintenance was not required to be undertaken
by Landlord pursuant to the terms of this Lease, then Landlord may elect to have
the determination of the issue of whether such repair and/or maintenance was
Landlord's responsibility resolved pursuant to the manner described below, and
if it is determined that Landlord was not responsible for such repair and/or
maintenance, Tenant shall, within thirty (30) days following such determination,
pay to Landlord the amount of such deduction from Base Rent, together with
interest thereon at the Interest Rate from the date of such deduction until
paid. If, however, the amount of the Invoice is greater than Two Thousand
Dollars ($2,000.00) and Landlord delivers to Tenant within thirty (30) days
after receipt of the Invoice, a written objection to the payment of such
Invoice, setting forth with reasonable particularity Landlord's reasons for its
claim that such repairs and/or maintenance was not to have been undertaken by
Landlord pursuant to the terms of this Lease, then Tenant shall not be entitled
to such deduction from Base Rent but as Tenant's sole remedy, Tenant may proceed
to claim a default by Landlord or, if elected by either Landlord or Tenant, the
matter shall proceed to resolution by the selection of an arbitrator to resolve
the dispute, which arbitrator shall be selected and qualified pursuant to the
rules of the American Arbitration Association, and whose costs shall be paid for
by the losing party unless it is not clear that there is a "losing" party in
which event the costs of arbitration shall be shared equally. The purpose of the
use of an arbitrator to resolve such dispute is to avoid the delays incident to
the court calendar system of the jurisdiction within which the Premises are
43
located. Therefore, the parties agree that if the issue in dispute between
Landlord and Tenant under this Section 26.3 may be expected to be resolved under
the then current calendar of the court of appropriate jurisdiction within a
period not exceeding six (6) months from the date the issue is raised by
Landlord's objection to Tenant's invoice, then the arbitration process described
hereinabove shall not be utilized and the matter shall proceed through the
judicial process in the court of appropriate jurisdiction.
ARTICLE 27
----------
ENTRY BY LANDLORD
-----------------
Landlord reserves the right at all reasonable times and upon reasonable
notice to the Tenant to enter the Premises to (i) inspect them; (ii) show the
Premises to prospective purchasers, mortgagees or tenants (but, as to tenants,
only during the last nine (9) months of Lease Term), or to the ground or
underlying lessors; (iii) post notices of nonresponsibility; or (iv) alter,
improve or repair the Premises or the Building if necessary to comply with
current building codes or other applicable laws, or for structural alterations,
repairs or improvements to the Building. Notwithstanding anything to the
contrary contained in this Article 27, Landlord may enter the Premises at any
time to (A) perform services required of Landlord at reasonable times and upon
reasonable notice (except in an emergency); (B) take possession due to any
breach of this Lease in the manner provided herein; and (C) perform any
covenants of Tenant which Tenant fails to perform at reasonable times and upon
reasonable notice (except in an emergency). Any such entries shall be without
the abatement of Rent and shall include the right to take such reasonable steps
as required to accomplish the stated purposes. Tenant hereby waives any claims
for damages or for any injuries or inconvenience to or interference with
Tenant's business, lost profits, any loss of occupancy or quiet enjoyment of the
Premises, and any other loss directly occasioned by such entry. For each of the
above purposes, Landlord shall at all times have a key with which to unlock all
the doors in the Premises, excluding Tenant's vaults, safes and special security
areas designated in advance by Tenant. In an emergency, Landlord shall have the
right to use any means that Landlord may deem proper to open the doors in and to
the Premises. Any entry into the Premises in the manner hereinbefore described
shall not be deemed to be a forcible or unlawful entry into, or a detainer of,
the Premises, or an actual or constructive eviction of Tenant from any portion
of the Premises.
ARTICLE 28
----------
TENANT PARKING
--------------
Landlord shall provide parking passes on a monthly basis throughout the
Lease Term in the amount set forth in Section 11 of the Summary to park in the
Parking Facilities. During the Lease Term (including the Option Term), such
parking passes will be provided to Tenant at no charge, except that Landlord may
require a reasonable security deposit for each parking pass. Tenant's continued
right to use the parking passes is conditioned upon Tenant abiding by all Rules
And Regulations which are prescribed from time to time for the orderly operation
and use of the Parking Facilities and upon Tenant's cooperation in seeing that
44
Tenant's employees and visitors also comply with such Rules and Regulations.
Landlord specifically reserves the right to (i) change the size, configuration,
design, layout, location and all other aspects of the Parking Facilities and/or
(ii) perform repairs to the Parking Facilities, and Tenant acknowledges and
agrees that Landlord may, without incurring any liability to Tenant and without
any abatement of Rent under this Lease, from time to time, for a period not to
exceed ninety (90) days (unless due to Force Majeure) close-off or restrict
access to the Parking Facilities, or relocate Tenant's parking passes to other
parking structures and/or surface parking areas within a reasonable distance of
the Premises, for purposes of permitting or facilitating any such construction,
alteration, improvements or repairs with respect to the Parking Facilities or to
accommodate or facilitate renovation, alteration, construction or other
modification of other improvements or structures located on the Real Property.
Landlord may delegate its responsibilities hereunder to a parking operator in
which case such parking operator shall have all the rights of control attributed
hereby to the Landlord and such owner.
ARTICLE 29
----------
MISCELLANEOUS PROVISIONS
------------------------
29.1 Terms. The necessary grammatical changes required to make the
provisions hereof apply either to corporations or partnerships or individuals,
men or women, as the case may require, shall in all cases be assumed as though
in each case fully expressed.
29.2 Binding Effect. Each of the provisions of this Lease shall extend
to and shall, as the case may require, bind or inure to the benefit not only of
Landlord and of Tenant, but also of their respective successors or assigns,
provided this clause shall not permit any assignment by Tenant contrary to the
provisions of Article 14 of this Lease.
29.3 No Air Rights. No rights to any view or to light or air over any
property, whether belonging to Landlord or any other person, are granted to
Tenant by this Lease. If at any time any windows of the Premises are temporarily
darkened or the light or view therefrom is obstructed by reason of any repairs,
improvements, maintenance or cleaning in or about the Building, the same shall
be without liability to Landlord and without any reduction or diminution of
Tenant's obligations under this Lease.
29.4 Modification of Lease. Should any current or prospective mortgagee
or ground lessor for the Building require a modification or modifications of
this Lease, which modification or modifications will, in Tenant's reasonable
discretion, not cause an increased cost or expense to Tenant or in any other way
adversely change the rights and obligations of Tenant hereunder, then and in
such event, Tenant agrees that this Lease may be so modified and agrees to
execute whatever documents are required therefor and deliver the same to
Landlord within ten (10) business days following the request therefor. Should
Landlord or any such current or prospective mortgagee or ground lessor require
execution of a short form of Lease for recording, accurately reflecting the
terms of this Lease and containing, among other customary provisions, the names
of the parties, a description of the Premises and the Lease Term, Tenant agrees
45
to execute such short form of Lease and to deliver the same to Landlord within
ten (10) business days following the request therefor.
29.5 Transfer of Landlord's Interest. Tenant acknowledges that Landlord
has the right to transfer all or any portion of its interest in the Real
Property and Building and in this Lease, and Tenant agrees that in the event of
any such transfer, and provided notice of such transfer is given to Tenant
within ten (10) days following the effective date of such transfer, Tenant
agrees to look solely to such transferee for the performance of Landlord's
obligations hereunder accruing after the date of transfer. Tenant further
acknowledges that Landlord may assign its rights to payments under this Lease to
a mortgage lender as additional security and agrees that such an assignment
shall not release Landlord from its obligations hereunder and that Tenant shall
continue to look to Landlord for the performance of its obligations hereunder.
29.6 Prohibition Against Recording. Except as provided in Section 29.4
of this Lease, neither this Lease, nor any memorandum, affidavit or other
writing with respect thereto, shall be recorded by Tenant or by anyone acting
through, under or on behalf of Tenant.
29.7 Landlord's Title. Landlord's title is and always shall be
paramount to the title of Tenant: Nothing herein contained shall empower Tenant
to do any act which can, shall or may encumber the title of Landlord.
29.8 Captions. The captions of Articles and Sections are for
convenience only and shall not be deemed to limit, construe, affect or alter the
meaning of such Articles and Sections.
29.9 Relationship of Parties. Nothing contained in this Lease shall be
deemed or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, joint venturer or any
association between Landlord and Tenant, it being expressly understood and
agreed that neither the method of computation of Rent nor any act of the parties
hereto shall be deemed to create any relationship between Landlord and Tenant
other than the relationship of landlord and tenant.
29.10 [Intentionally Deleted].
29.11 Time of Essence. Time is of the essence of this Lease and each of
its provisions.
29.12 Partial Invalidity. If any term, provision or condition contained
in this Lease shall, to any extent, be invalid or unenforceable, the remainder
of this Lease,. or the application of such term, provision or condition to
persons or circumstances other than those with respect to which it is invalid or
unenforceable, shall not be affected thereby, and each and every other term,
provision and condition of this Lease shall be valid and enforceable to the
fullest extent possible permitted by law.
46
29.13 No Warranty. In executing and delivering this Lease, Tenant has
not relied on any representation, including, but not limited to, any
representation whatsoever as to the amount of any item comprising Additional
Rent or the amount of the Additional Rent in the aggregate or that Landlord is
furnishing the same services to other tenants, at all, on the same level or on
the same basis, or any warranty or any statement of Landlord which is not set
forth herein or in one or more of the exhibits attached hereto.
29.14 Landlord Exculpation. It is expressly understood and agreed that
notwithstanding anything in this Lease to the contrary, and notwithstanding any
applicable }aw to the contrary, the liability of Landlord and the Landlord
Parties hereunder (including any successor landlord) and any recourse by Tenant
against Landlord or the Landlord Parties shall be limited solely and exclusively
to an amount which is equal to the interest of Landlord in the Building and
neither Landlord, nor any of the Landlord Parties shall have any personal
liability therefor, and Tenant hereby expressly waives and releases such
personal liability on behalf of itself and all persons claiming by, through or
under Tenant. Notwithstanding the foregoing, the limitation of liability and
waiver in favor of Landlord under this Section 29.14 shall not apply to claims
of fraud or malicious acts.
29.15 Entire Agreement. It is understood and acknowledged that there
are no oral agreements between the parties hereto affecting this Lease and this
Lease supersedes and cancels any and all previous negotiations, arrangements,
brochures, agreements and understandings, if any, between the parties hereto or
displayed by Landlord to Tenant with respect to the subject matter thereof, and
none thereof shall be used to interpret or construe this Lease. This Lease and
any side letter or separate agreement executed by Landlord and Tenant in
connection with this Lease and dated of even date herewith contain all of the
terms, covenants, conditions, warranties and agreements of the parties relating
in any manner to the rental, use and occupancy of the Premises, shall be
considered to be the only agreement between the parties hereto and their
representatives and agents, and none of the terms, covenants, conditions or
provisions of this Lease can be modified, deleted or added to except in writing
signed by the parties hereto. All negotiations and oral agreements acceptable to
both parties have been merged into and are included herein.
29.16 Right to Lease. Except as otherwise provided in Section 29.33,
Landlord reserves the absolute right to effect such other tenancies in the
Building as Landlord in the exercise of its sole business judgment shall
determine to best promote the interests of the Building. Tenant does not rely on
the fact, nor does Landlord represent, that any specific tenant or type or
number of tenants shall, during the Lease Term, occupy any space in the
Building.
29.17 Force Majeure. Any prevention, delay or stoppage due to strikes,
lockouts, labor disputes, acts of God, inability to obtain services, labor, or
materials or reasonable substitutes therefor, governmental actions, civil
commotions, fire or other casualty, and other causes beyond the reasonable
control of the party obligated to perform, except with respect to the
obligations imposed with regard to Rent and other charges to be paid by Tenant
pursuant to this Lease (collectively, the "Force Majeure"), notwithstanding
anything to the contrary contained in this Lease, shall excuse the performance
of such party for a period equal to any such prevention, delay or stoppage and,
47
therefore, if this Lease specifies a time period for performance of an
obligation of either party, that time period shall be extended by the period of
any delay in such party's performance caused by a Force Majeure.
29.18 Waiver of Redemption by Tenant. Tenant hereby waives for Tenant
and for all those claiming under Tenant all right now or hereafter existing to
redeem by order or judgment of any court or by any legal process or writ,
Tenant's right of occupancy of the Premises after any termination of this Lease.
29.19 Notices. All notices, demands, statements or communications
(collectively, "Notices") given or required to be given by either party to the
other hereunder shall be in writing, shall be sent by United States certified or
registered mail, postage prepaid, return receipt requested, or delivered
personally (i) to Tenant at the appropriate address set forth in Section 5 of
the Summary, or to such other place as Tenant may from time to time designate in
a Notice to Landlord; or (ii) to Landlord at the addresses set forth in Section
3 of the Summary, or to such other firm or to such other place as Landlord may
from time to time designate in a Notice to Tenant. Any Notice will be deemed
given five (5) days after the date it is mailed as provided in this Section
29.19 or upon the date personal delivery is made. If Tenant is notified of the
identity and address of Landlord's mortgagee or ground or underlying lessor,
Tenant shall concurrently give to such mortgagee or ground or underlying lessor
written notice of any default by Landlord under the terms of this Lease by
registered or certified mail, and such mortgagee or ground or underlying lessor
shall be given the same opportunity to cure such default as permitted by
Landlord prior to Tenant's exercising any remedy available to Tenant.
29.20 Joint and Several. If there is more than one Tenant, the
obligations imposed upon Tenant under this Lease shall be joint and several.
29.21 Authority. If Tenant is a corporation or partnership, each
individual executing this Lease on behalf of Tenant hereby represents and
warrants that Tenant is a duly formed and existing entity qualified to do
business in Arizona and that Tenant has full right and authority to execute and
deliver this Lease and that each person signing on behalf of Tenant is
authorized to do so.
29.22 Attorneys' Fees. If either party commences litigation against the
other for the specific performance of this Lease, for damages for the breach
hereof or otherwise for enforcement of any remedy hereunder, the parties hereto
agree to and hereby do waive any right to a trial by jury and, in the event of
any such commencement of litigation, the prevailing party shall be entitled to
recover from the other party such costs and reasonable attorneys' fees as may
have been incurred, including any and all costs incurred in enforcing,
perfecting and executing such judgment.
29.23 Governing Law. This Lease shall be construed and enforced in
accordance with the laws of the State of Arizona.
48
29.24 Submission of Lease. Submission of this instrument for
examination or signature by Tenant does not constitute a reservation of or an
option for lease, and it is not effective as a lease or otherwise until
execution and delivery by both Landlord and Tenant.
29.25 Brokers. Landlord and Tenant hereby warrant to each other that
they have had no dealings with any real estate broker or agent in connection
with the negotiation of this Lease, excepting only the real estate brokers or
agents specified in Section 12 of the Summary (the "Brokers"), and that they
know of no other real estate broker or agent who is entitled to a commission in
connection with this Lease. Each party agrees to indemnify and defend the other
party against and hold the other party harmless for, from and against any and
all claims, demands, losses, liabilities, lawsuits, judgments, and costs and
expenses (including without limitation reasonable attorneys' fees) with respect
to any leasing commission or equivalent compensation alleged to be owing on
account of the indemnifying party's dealings with any real estate broker or
agent other than the Brokers.
29.26 Independent Covenants. This Lease shall be construed as though
the covenants herein between Landlord and Tenant are independent and not
dependent and Tenant hereby expressly waives the benefit of any statute to the
contrary and, except as stated in this Lease, agrees that if Landlord fails to
perform its obligations set forth herein, Tenant shall not be entitled to make
any repairs or perform any acts hereunder at Landlord's expense or to any setoff
of the Rent or other amounts owing hereunder against Landlord; provided,
however, that the foregoing shall in no way impair the right of Tenant to
commence a separate action against Landlord for any violation by Landlord of the
provisions hereof so long as notice is first given to Landlord and any holder of
a mortgage or deed of trust covering the Building, Real Property or any portion
thereof, of whose address Tenant has theretofore been notified, and an
opportunity is granted to Landlord and such holder to correct such violations as
provided above.
29.27 Building Name and Signage. Landlord shall have the right at any
time to change the name of the Building and to install, affix and maintain any
and all signs on the exterior and on the interior of the Building as Landlord
may, in Landlord's sole discretion, desire. Tenant shall not use the name of the
Building or use pictures or illustrations of the Building in advertising or
other publicity, without the prior written consent of Landlord, which consent
shall not be unreasonably withheld or delayed.
29.28 Transportation Management. Tenant shall use commercially
reasonable efforts to fully comply with all present or future programs intended
to manage parking, transportation or traffic in and around the Building, and in
connection therewith, Tenant shall take responsible action for the
transportation planning and management of all employees located at the Premises
by working directly with Landlord, any governmental transportation management
organization or any other transportation-related committees or entities. Such
programs may include, without limitation: (i) restrictions on the number of
peak-hour vehicle trips generated by Tenant, (ii) increased vehicle occupancy;
(iii) implementation of an in-house ridesharing program and an employee
transportation coordinator; (iv) working with employees and any Building or
area-wide ridesharing program manager; (v) instituting employer-sponsored
49
incentives (financial or in-kind) to encourage employees to rideshare; and (vi)
utilizing flexible work shifts for employees.
29.29 Confidentiality. Tenant acknowledges that the content of this
Lease and any related documents are confidential information. Tenant shall
exercise commercially reasonable efforts to keep such confidential information
strictly confidential and shall exercise commercially reasonable efforts to not
disclose such confidential information to any person or entity other than
Tenant's financial, legal, and space planning consultants or as otherwise
required by law.
29.30 Landlord Renovations. It is specifically understood and agreed
that Landlord has no obligation and has made no promises to alter, remodel,
improve, renovate, repair or decorate the Premises, Building, or any part
thereof and that no representations respecting the condition of the Premises or
the Building have been made by Landlord to Tenant except as specifically set
forth herein or in the Tenant Work Letter. However, Tenant acknowledges that
Landlord may during the Lease Term renovate, improve, alter, or modify
(collectively, the "Renovations") the Building, Premises, and/or Real Property,
including without limitation the Parking Facilities, common areas, systems and
equipment, roof, and structural portions of the same, which Renovations may
include, without limitation, (i) modifying the common areas and tenant spaces to
comply with applicable laws and regulations, including regulations relating to
the physically disabled, seismic conditions, and building safety and security,
and (ii) installing new carpeting, lighting, and wall coverings in the Building
common areas, and in connection with such Renovations, Landlord may, among other
things, erect scaffolding or other necessary structures in the Building, limit
or eliminate access to portions of the Real Property, including portions of the
common areas, or perform work in the Building, which work may create noise, dust
or leave debris in the Building. Tenant hereby agrees that such Renovations and
Landlord's actions in connection with such Renovations shall in no way
constitute a constructive eviction of Tenant nor entitle Tenant to any abatement
of Rent. Landlord shall have no responsibility or for any reason be liable to
Tenant for any direct or indirect injury to or interference with Tenant's
business arising from the Renovations, nor (except for injury not covered by
insurance carried, or required to be carried by Tenant hereunder, and which is
caused by Landlord's negligence or willful misconduct) shall Tenant be entitled
to any compensation or damages from Landlord for loss of the use of the whole or
any part of the Premises or of Tenant's personal property or improvements
resulting from the Renovations or Landlord's actions in connection with such
Renovations, or for any inconvenience or annoyance occasioned by such
Renovations or Landlord's actions in connection with such Renovations.
29.31 Hazardous Material.
29.31.1 Except for ordinary office and janitorial supplies in
quantities customarily used by office tenants, Tenant shall not cause or
authorize any Hazardous Material (as defined in Section 29.31.4 below) to be
brought, kept or used in or about the Real Property by Tenant, its agents,
employees, contractors, or invitees. Tenant indemnifies Landlord for, from and
against any breach by Tenant of the obligations stated in the preceding
sentence, and agrees to defend and hold Landlord harmless from and against any
and all claims, judgments, damages, penalties, fines, costs, liabilities, or
50
losses (including, without limitation, diminution in value of the Real Property,
damages for the loss or restriction or use of rentable or usable space or of any
amenity of the Real Property, damages arising from any adverse impact or
marketing of space in the Real Property, and sums paid in settlement of claims,
attorneys' fees, consultant fees, and expert fees) which arise during or after
the Lease Term as a result of such breach. This indemnification of Landlord by
Tenant includes, without limitation, costs incurred in connection with any
investigation of site conditions or any cleanup, remedial, removal, or
restoration work required by any federal, state, or local governmental agency or
political subdivision because of Hazardous Material present in the soil or
ground water on or under the Real Property. Without limiting the foregoing, if
the presence of any Hazardous Material on the Real Property caused or authorized
by Tenant results in any contamination of the Real Property and subject to the
provisions of Articles 8 and 9 hereof, Tenant shall promptly take all actions at
its sole expense as are necessary to return the Real Property to the condition
existing prior to the introduction of any such Hazardous Material and the
contractors to be used by Tenant for such work must be approved by Landlord,
which approval shall not be unreasonably withheld or delayed so long as such
actions would not potentially have any material adverse long-term or short-term
effect on the Real Property and so long as such actions do not materially
interfere with the use and enjoyment of the Real Property by the other tenants
thereof. Tenant's indemnity under this Section 29.31.1 is strictly conditioned
on prompt notice, tender of defense/settlement, and reasonable cooperation by
Landlord.
29.31.2 [Intentionally Omitted]
29.31.3 It shall not be unreasonable for Landlord to withhold
its consent to any proposed Transfer if (i) the proposed transferee's
anticipated use of the Premises involves the generation, storage, use,
treatment, or disposal of Hazardous Material other than ordinary office and
janitorial supplies in quantities customarily used by office tenants; (ii) the
proposed Transferee has been required by any prior landlord, lender, or
governmental authority to take remedial action in connection with Hazardous
Material contaminating a property if the contamination resulted from such
Transferee's actions or use of the property in question; or (iii) the proposed
Transferee is subject to an enforcement order issued by any governmental
authority in connection with the use, disposal, or storage of a Hazardous
Material.
29.31.4 As used herein, the term "Hazardous Material" means
any hazardous or toxic substance, material, or waste which is or becomes
regulated by any local governmental authority, the State of Arizona or the
United States Government. The term "Hazardous Material" includes, without
limitation, any material or substance which is (i) designated as a "Hazardous
Substance" pursuant to Section 311 of the Federal Water Pollution Control Act
(33 U.S.C. ss. 1317), (ii) defined as a "Hazardous Waste" pursuant to Section
1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.C. ss. 6901
et seq. (42 U.S.C. ss. 6903), (iii) defined as a "Hazardous Substance" pursuant
to Section 101 of the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. ss. 9601 et seq. (42 U.S.C. ss. 9601) or (iv)
identified in the Arizona Environmental Quality Act, including provisions on
aquifer protection (A.R.S. xx.xx. 49-241 et seq.), remedial action (A.R.S.
xx.xx. 49-281 et seq.), air quality (A.R.S. xx.xx. 49-401 et seq.), solid waste
51
management (A.R.S. xx.xx. 49-701 et seq.), hazardous waste disposal (A.R.S.
xx.xx. 49-901 et seq.), and underground storage tank regulation (A.R.S. xx.xx.
49-1001 et seq.).
29.31.5 As used herein, the term "Laws" mean any applicable
federal, state or local laws, ordinances, or regulations relating to any
Hazardous Material affecting the Real Property, including, without limitation,
the laws, ordinances, and regulations referred to in Section 29.31.4 above.
29.31.6 Landlord hereby represents that, to its actual
knowledge, no Environmental Condition (as defined below) presently exists or has
existed prior to the Lease Commencement Date on, under, or within the Real
Property except as disclosed in that certain Phase One Environmental Site
Assessment prepared by Envirotest Inc. dated February 1997.
Landlord shall indemnify, protect, defend (by counsel
reasonably acceptable to Tenant) and hold harmless Tenant and Tenant's
Affiliates, and all of their directors, officers, employees, shareholders,
lenders, agents, contractors and each of their respective successors and
assigns, from and against (i) any and all claims, judgments, causes of action,
damages, penalties, fines, taxes, costs, liabilities, losses and expenses
arising at any time during or after the Lease Term as a result of any
Environmental Condition which (A)constitutes a breach of the representation set
forth in this Section 29.31.6, or (B) was authorized or caused by Landlord, its
employees, agents or contractors and (ii) any and all orders, penalties, fines,
administrative actions, or other proceedings commenced by any governmental
agency including, without limitation, the United States Environmental Protection
Agency as a result of an Environment Condition that was authorized or caused by
Landlord, its employees, agents or contractors. Landlord's obligations pursuant
to the foregoing indemnity shall survive the expiration or termination of this
Lease (including any extension hereof), and shall be strictly conditioned upon
prompt notice, tender of defense/settlement and reasonable cooperation by
Tenant.
The phrase "Environmental Condition" shall mean the existence of any
Hazardous Materials on, under or within the Real Property in violation of Laws.
29.32 Conference Facility. Landlord shall provide Tenant up to a total
of forty (40) hours per month of free usage for the two (2) conference
facilities in the Building. Tenant's use of the conference facilities will be
subject to the reservation procedures established by Landlord from time to time.
If Tenant does not utilize all forty (40) free hours in a month, any unused
amount will expire and will not be carried forward to future months. Nothing in
this Lease shall be construed to obligate Landlord to continue the operation of
the conference facilities.
29.33 Tenant's Exclusive. Landlord shall not, from and after the date
hereof, enter into a lease for space in the Building to any of Tenant's Direct
Competitors. "Direct Competitors" mean only the following entities: Tech Data,
Inacom, Xxxxxx Micro, Merisel, Intelligent Electronics, Ikon, Vanstar, Entex and
GE Systems, and any subsidiary, affiliate or successor of such entities but only
if Landlord had, at the time of entering into such lease, actual knowledge that
the tenant was a subsidiary, affiliate or successor of any such entity (if any
52
proposed tenant's primary business is providing personal computer products and
services to resellers or end-user clients, Landlord will endeavor to inquire
whether such proposed tenant is a subsidiary, affiliate or successor of the
foregoing named entities, but Landlord's failure to do so will not constitute a
default hereunder by Landlord). This exclusive shall not apply to any existing
leases in the Building or to any assignments under any existing leases or future
leases in the Building, nor shall it apply to an attornment by a subtenant to
Landlord upon the termination of any existing or future lease. This exclusive
right shall terminate upon the first to occur of (i) the date the Original
Tenant or any of Tenant's Affiliates cease to occupy and conduct business in at
least 50,000 rentable square feet of the Premises in the aggregate, or (ii) a
default by Tenant under this Lease that is not cured within the applicable
notice and cure period, or (iii) nine (9) months prior to the expiration of the
Lease Term unless Tenant has delivered an Interest Notice to Landlord pursuant
to Section 2.2.2, or (iv) six (6) months prior to the expiration of the Lease
Term unless Tenant has delivered an Option Notice to Landlord pursuant to
Section 2.2.2. Tenant shall indemnify, defend, protect and hold harmless the
Landlord Parties for, from and against any and all loss, cost, damage, expense
and liability (including, without limitation, court costs and reasonable
attorneys' fees) incurred in connection with or arising from any claim or action
alleging that the provisions of this Section 29.33 constitute a restraint of
trade or violate federal or state anti-trust laws or similar laws, which
obligation shall survive the expiration or earlier termination of this Lease.
IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be
executed the day and date first above written.
"Landlord":
WHCPS REAL ESTATE LIMITED
PARTNERSHIP, a Delaware limited partnership
By: WHCPS GEN-PAR, INC.,
a Delaware corporation
General Partner
By:
--------------------------------
Name:
-------------------------
Title:
------------------------
"Tenant":
MICROAGE COMPUTER CENTERS, INC.
By:
---------------------------------------
Xxxx X. Xxxxx
Vice President Administration
53
EXHIBIT B
---------
CENTRAL PARK SQUARE
-------------------
TENANT WORK LETTER
------------------
This Tenant Work Letter shall set forth the terms and conditions
relating to the construction of the tenant improvements in the Premises. This
Tenant Work Letter is essentially organized chronologically and addresses the
issues of the construction of the tenant improvements in the Premises, in
sequence, as such issues will arise during the actual construction of the
Premises. All references in this Tenant Work Letter to Articles or Sections of
"this Lease" shall mean the relevant portions of Articles I through 29 of this
Lease to which this Tenant Work Letter is attached as Exhibit B, and all
references in this Tenant Work Letter to Sections of "this Tenant Work Letter"
shall mean the relevant portions of Sections I through 5 of this Tenant Work
Letter.
SECTION 1
---------
DELIVERY OF THE PREMISES AND BASE, SHELL AND CORE
-------------------------------------------------
Upon the full execution and delivery of this Lease by Landlord and
Tenant, Landlord shall deliver the Premises to Tenant, and Tenant shall accept
the Premises from Landlord, in their presently existing, "as-is" condition.
SECTION 2
---------
TENANT IMPROVEMENTS
-------------------
2.1 Tenant Improvement Allowance. Tenant shall be entitled to a
one-time tenant improvement allowance (the "Tenant Improvement Allowance") in
the amount of $8.60 per usable square foot (as calculated in accordance with
BOMA) of the Premises for the costs relating to the initial design and
construction of Tenant's improvements, which are permanently affixed to the
Premises (the "Tenant Improvements") and the acquisition and installation costs
of computer cabling (the "Cabling"). In no event shall Landlord be obligated to
make disbursements pursuant to this Tenant Work Letter in a total amount which
exceeds the Tenant Improvement Allowance.
2.2 Disbursement of the Tenant Improvement Allowance.
2.2.1 Tenant Improvement Allowance Items. Except as otherwise
set forth in this Tenant Work Letter, the Tenant Improvement Allowance shall be
disbursed by Landlord only for the following items and costs (collectively the
"Tenant Improvement Allowance Items"):
EXHIBIT B - Page 1
2.2.1.1 Payment of the fees of the "Architect" and
the "Engineers," as those terms are defined in Section 3.1 of this Tenant Work
Letter, which fees shall, notwithstanding anything to the contrary contained in
this Tenant Work Letter, not exceed an aggregate amount equal to $1.25 per
usable square foot of the Premises, and payment of the fees incurred by, and the
cost of documents and materials supplied by, Landlord and Landlord's
consultants, architects and engineers in connection with the preparation and
review of the "Construction Drawings," as that term is defined in Section 3.1 of
this Tenant Work Letter and attending the design and construction meetings
referred to in Section 4.2.5 of this Tenant Work Letter;
2.2.1.2 The payment of plan check, permit and
license fees relating to construction of the Tenant Improvements;
2.2.1.3 The cost of construction of the Tenant
Improvements, including, without limitation, testing and inspection costs,
hoisting and trash removal costs, and contractors' fees and general conditions;
2.2.1.4 The cost of any changes in the Building
when such changes are required by the Construction Drawings, such cost to
include all direct architectural and/or engineering fees and expenses incurred
in connection therewith;
2.2.1.5 The cost of any changes to the Construction
Drawings or Tenant Improvements required by applicable code;
2.2.1.6 The Cabling, and
2.2.1.7 Sales and use taxes and Title 24 fees.
2.2.2 Disbursement of Tenant Improvement Allowance. During the
construction of the Tenant Improvements, Landlord shall make monthly
disbursements of the Tenant Improvement Allowance for Tenant Improvement
Allowance Items for the benefit of Tenant and shall authorize the release of
monies for the benefit of Tenant as follows.
2.2.2.1 Monthly Disbursements. On or before the
first day of each calendar month during the construction of the Tenant
Improvements (or such other date as Landlord may designate), Tenant shall
deliver to Landlord: (i) a request for payment of the "Contractor," as that term
is defined in Section 4.1 of this Tenant Work Letter, approved by Tenant, in a
form to be provided by Landlord, showing the schedule, by trade, of percentage
of completion of the Tenant Improvements in the Premises, detailing the portion
of the work completed and the portion not completed; (ii) invoices from all of
"Tenant's Agents," as that term is defined in Section 4.1.2 of this Tenant Work
Letter, for labor rendered and materials delivered to the Premises; (iii)
properly executed mechanic's lien releases from Contractor and/or all of
Tenant's Agents (as applicable) in form and substance reasonably acceptable to
Landlord; and (iv) all other information reasonably requested by Landlord.
Thereafter, within thirty (30) days, Landlord shall deliver a check to Tenant
EXHIBIT B - Page 2
in payment of the lesser of: (A) the amounts so requested by Tenant, less a ten
percent (10%) retention (the aggregate amount of such retentions to be known as
the "Final Retention"), and (B) the balance of any remaining available portion
of the Tenant Improvement Allowance (not including the Final Retention),
provided that Landlord does not dispute any request for payment based on
non-compliance of any work with the "Approved Working Drawings," as that term is
defined in Section 3.4 below, or due to any substandard work, or for any other
reason. Landlord's payment of such amounts shall not be deemed Landlord's
approval or acceptance of the work furnished or materials supplied as set forth
in Tenant's payment request.
2.2.2.2 Final Retention. Subject to the provisions
of this Tenant Work Letter, a check for the Final Retention payable to Tenant
shall be delivered by Landlord to Tenant following the completion of
construction of the Premises, provided that (i) Tenant delivers to Landlord
properly executed mechanics lien releases from Contractor and/or all Tenant's
Agents (as applicable) in form and substance acceptable to Landlord, (ii)
Landlord has reasonably determined (which determination shall be made within
thirty(30) days following Landlord's receipt of all the items required to be
delivered to Landlord pursuant to this Section 2.2.2.2) that no substandard work
exists which adversely affects the mechanical, electrical, plumbing, heating,
ventilating and air conditioning, life-safety or other systems of the Building,
the curtain wall of the Building, the structure or exterior appearance of the
Building, or any other tenant's use of such other tenant's leased premises in
the Building, (iii) Architect delivers to Landlord a certificate, in a form
reasonably acceptable to Landlord, certifying that the construction of the
Tenant Improvements in the Premises has been substantially completed and (iv)
the requirements of Section 4.3 have been satisfied.
2.2.2.3 Other Terms. Landlord shall only be
obligated to make disbursements from the Tenant Improvement Allowance to the
extent costs are incurred by Tenant for Tenant Improvement Allowance Items. All
Tenant Improvement Allowance Items for which the Tenant Improvement Allowance
has been made available (except for the Cabling) shall be deemed Landlord's
property. If there is any balance remaining in the Tenant Improvement Allowance
after disbursement pursuant to Sections 2.2.2.1 and 2.2.2.2 above, Landlord
shall, within thirty (30) days following request therefor from Tenant and
provided that Tenant is not then in default under this Lease, either pay the
remaining balance to Tenant or permit Tenant to deduct such amount against the
next installment(s) of Base Rent, at Landlord's election.
2.3 Standard Tenant Improvement Package. Landlord has established
specifications (the "Specifications") for the Building standard components to be
used in the construction of the Tenant Improvements in the Premises
(collectively, the "Standard Improvement Package"). The quality of Tenant
Improvements shall be equal to or of greater quality than the quality of the
Specifications, provided that the Tenant Improvements shall comply with certain
Specifications as designated by Landlord. Landlord may make changes to the
Specifications for the Standard Improvement Package from time to time.
EXHIBIT B - Page 3
SECTION 3
---------
CONSTRUCTION DRAWINGS
---------------------
3.1 Selection of Architect/Construction Drawings. Tenant shall retain
KRAUSETHOMAS as the architect/space planner (the "Architect") to prepare the
"Construction Drawings," as that term is defined in this Section 3.1 Tenant
shall retain the engineering consultants designated by Landlord (the
"Engineers") to prepare all plans and engineering working drawings relating to
the structural, mechanical, electrical, plumbing, HVAC and lifesafety work in
the Premises. The plans and drawings to be prepared by Architect and the
Engineers hereunder shall be known collectively as the "Construction Drawings."
All Construction Drawings shall be subject to Landlord's approval. Tenant,
Architect and Engineers shall verify, in the field, the dimensions and
conditions as shown on the relevant portions of the base building plans, and
Tenant, Architect and Engineers shall be solely responsible for the same, and
Landlord shall have no responsibility in connection therewith. Landlord's review
of the Construction Drawings as set forth in this Section 3, shall be for its
sole purpose and shall not imply Landlord's review of the same, or obligate
Landlord to review the same, for quality, design, Code compliance or other like
matters. Accordingly, notwithstanding that any Construction Drawings are
reviewed by Landlord or its space planner, architect, engineers and consultants,
and notwithstanding any advice or assistance which may be rendered to Tenant by
Landlord or Landlord's space planner, architect, engineers, and consultants,
Landlord shall have no liability whatsoever in connection therewith and shall
not be responsible for any omissions or errors contained in the Construction
Drawings, and Tenant's waiver and indemnity set forth in Section 10.1 of this
Lease shall specifically apply to the Construction Drawings.
3.2 Final Space Plan. Tenant shall supply Landlord with two (2) copies
signed by Tenant of its final space plan for the Premises before any
architectural working drawings or engineering drawings have been commenced. The
final space plan (the "Final Space Plan") shall include a layout and designation
of all offices, rooms and other partitioning, their intended use, and equipment
to be contained therein. Landlord may request clarification or more specific
drawings for special use items not included in the Final Space Plan. Landlord
shall advise Tenant within five (5) business days after Landlord's receipt of
the Final Space Plan for the Premises if the same is unsatisfactory or
incomplete in any respect. If Tenant is so advised, Tenant shall promptly cause
the Final Space Plan to be revised to correct any deficiencies or other matters
Landlord may reasonably require.
3.3 Final Working Drawings. After the Final Space Plan has been
approved by Landlord, Tenant shall supply the Engineers with a complete listing
of standard and non-standard equipment and specifications, including, without
limitation, B.T.U. calculations, electrical requirements and special electrical
receptacle requirements for the Premises, to enable the Engineers and the
Architect to complete the "Final Working Drawings" (as that term is defined
below) in the manner as set forth below. Upon the approval of the Final Space
Plan by Landlord and Tenant, Tenant shall promptly cause the Architect and the
Engineers to complete the architectural and engineering drawings for the
Premises, and Architect shall compile a fully coordinated set of architectural,
structural, mechanical, electrical and plumbing working drawings in a form which
EXHIBIT B - Page 4
is complete to allow subcontractors to bid on the work and to obtain all
applicable permits (collectively, the "Final Working Drawings") and shall submit
the same to Landlord for Landlord's approval. Tenant shall supply Landlord with
two (2) copies signed by Tenant of such Final Working Drawings. Landlord shall
advise Tenant within five (5) business days after Landlord's receipt of the
Final Working Drawings for the Premises if the same is unsatisfactory or
incomplete in any respect. If Tenant is so advised, Tenant shall immediately
revise the Final Working Drawings in accordance with such review and any
disapproval of Landlord in connection therewith.
3.4 Approved Working Drawings. The Final Working Drawings must be
approved by Landlord (the "Approved Working Drawings") prior to the commencement
of construction of the Premises by Tenant. After approval by Landlord of the
Final Working Drawings, Tenant may submit the same to the appropriate
municipality for all applicable building permits. Tenant hereby agrees that
neither Landlord nor Landlord's consultants shall be responsible for obtaining
any building permit or certificate of occupancy for the Premises and that
obtaining the same shall be Tenant's responsibility; provided,. however, that
Landlord shall cooperate with Tenant in executing permit applications and
performing other ministerial acts reasonably necessary to enable Tenant to
obtain any such permit or certificate of occupancy. No changes, modifications or
alterations in the Approved Working Drawings may be made without the prior
written consent of Landlord, which consent may not be unreasonably withheld or
delayed.
SECTION 4
---------
CONSTRUCTION OF THE TENANT IMPROVEMENTS
---------------------------------------
4.1 Tenant's Selection of Contractors.
4.1.1 The Contractor. A general contractor shall be retained
by Tenant to construct the Tenant Improvements. Such general contractor
("Contractor") shall be acceptable to Landlord. Landlord hereby approves
Tenant's selection of Avalon Construction, Inc. as Contractor.
4.1.2 Tenant's Agents. All subcontractors, laborers,
materialmen, and suppliers used by Tenant (such subcontractors, laborers,
materialmen, and suppliers, and the Contractor to be known collectively as
"Tenant's Agents") must be approved in writing by Landlord, which approval shall
not be unreasonably withheld or delayed. If Landlord does not approve any of
Tenant's proposed subcontractors, laborers, materialmen or suppliers, Tenant
shall submit other proposed subcontractors, laborers, materialmen or suppliers
for Landlord's written approval, which shall not be unreasonably withheld or
delayed.
EXHIBIT B - Page 5
4.2 Construction of Tenant Improvements by Tenant's Agents.
4.2.1 Construction Contract. Prior to Tenant's execution of
the construction contract and general conditions with Contractor (the
"Contract"), Tenant shall submit the Contract to Landlord for its approval,
which approval shall not be unreasonably withheld or delayed.
4.2.2 Tenant's Agents.
4.2.2.1 Landlord's General Conditions for Tenant's
Agents and Tenant Improvement Work. Tenant's and Tenant's Agent's construction
of the Tenant Improvements shall comply with the following: (i) the Tenant
Improvements shall be constructed in strict accordance with the Approved Working
Drawings; (ii) Tenant's Agents shall submit schedules of all work relating to
the Tenant's Improvements to Contractor and Contractor shall, within five (5)
business days of receipt thereof, inform Tenant's Agents of any changes which
are necessary thereto, and Tenant's Agents shall adhere to such corrected
schedule; and (iii) Tenant shall abide, and shall cause Tenant's Agents to
abide, by all rules, including the rules attached hereto as Schedule 1, made by
Landlord with respect to the use of freight, loading dock and service elevators,
storage of materials, coordination of work with the contractors of other
tenants, and any other matter in connection with this Tenant Work Letter,
including, without limitation, the construction of the Tenant Improvements.
4.2.2.2 Indemnity. Tenant's indemnity of Landlord
as set forth in Section 10.1 of this Lease shall also apply with respect to any
and all costs, losses, damages, injuries and liabilities (including damage to
the Building or its systems) related in any way to any act or omission of Tenant
or Tenant's Agents (or anyone directly or indirectly employed by any of them) in
connection with the performance of Tenant's obligations under this Tenant Work
Letter, or in connection with Tenant's non-payment of any amount arising out of
the Tenant Improvements and/or Tenant's disapproval of all or any portion of any
request for payment. Such indemnity by Tenant, as set forth in Section 10.1 of
this Lease, shall also apply with respect to any and all costs, Tosses, damages,
injuries and liabilities related in any way to Landlord's performance of any
ministerial acts reasonably necessary and requested by Tenant (i) to permit
Tenant to complete the Tenant Improvements, and (ii) to enable Tenant to obtain
any building permit or certificate of occupancy for the Premises. Tenant's
indemnity obligations under this Section 4.2.2.2 are subject to the waiver under
Section 10.5 of the Lease.
4.2.2.3 Requirements of Tenant's Agents. Tenant
shall cause each of Tenant's Agents to guarantee to Tenant and for the benefit
of Landlord that the portion of the Tenant Improvements for which it is
responsible shall be free from any defects in workmanship and materials for a
period of not less than one (1) year from the date of completion thereof. Tenant
shall cause each of Tenant's Agents to replace or repair, without additional
charge, of all work done or furnished in accordance with its contract that shall
become defective within one (1) year after the later to occur of (i) completion
of the work performed by such contractor or subcontractors and (ii) the Lease
Commencement Date or Must Take Rent Commencement Date, as applicable. The
correction of such work shall include, without additional charge, all additional
expenses and damages incurred in connection with such removal or replacement of
EXHIBIT B - Page 6
all or any part of the Tenant Improvements, and/or the Building and/or common
areas that may be damaged or disturbed thereby. All such warranties or
guarantees as to materials or workmanship of or with respect to the Tenant
Improvements shall be contained in the Contract or subcontract and shall be
written such that such guarantees or warranties shall inure to the benefit of
both Landlord and Tenant, as their respective interests may appear, and can be
directly enforced by either. Tenant covenants to give to Landlord any assignment
or other assurances which may be necessary to effect such right of direct
enforcement.
4.2.2.4 Insurance Requirements.
4.2.2.4.1 General Coverages. All of Tenant's Agents
shall carry worker's compensation insurance covering all of their respective
employees, and shall also carry public liability insurance, including property
damage, all with limits, in form and with companies as are required to be
carried by Tenant as set forth in Article 10 of this Lease.
4.2.2.4.2 Special Coverages. Tenant shall carry
"Builder's All Risk" insurance in an amount approved by Landlord covering the
construction of the Tenant Improvements, and such other insurance as Landlord
may require, it being understood and agreed that the Tenant Improvements shall
be insured by Tenant pursuant to Article 10 of this Lease. Such insurance shall
be in amounts and shall include such extended coverage endorsements as may be
reasonably required by Landlord including, but not limited to, the requirement
that all of Tenant's Agents shall carry excess liability and Products and
Completed Operation Coverage insurance, each in amounts not less than $500,000
per incident, $1,000,000 in aggregate, and in form and with companies as are
required to be carried by Tenant as set forth in Article 10 of this Lease.
4.2.2.4.3 General Terms. Certificates for all
insurance carried pursuant to this Section 4.2.2.4 shall be delivered to
Landlord before the commencement of construction of the Tenant Improvements and
before the Contractor's equipment is moved onto the site. All such policies of
insurance must contain a provision that the company writing said policy will
give Landlord thirty (30) days prior written notice of any cancellation or lapse
of the effective date or any reduction in the amounts of such insurance. In the
event that the Tenant Improvements are damaged by any cause during the course of
the construction thereof, Tenant shall immediately repair the same at Tenant's
sole cost and expense, except to the extent such damage is caused by Landlord or
its agents, employees or subcontractors and such damage is of a type not covered
by insurance carried, or required to be carried hereunder, by Tenant or Tenant's
Agents. Tenant's Agents shall maintain all of the foregoing insurance coverage
in force until the Tenant Improvements are fully completed and accepted by
Landlord. All policies carried under this Section 4.2.2.4 shall insure Landlord
and Tenant, as their interests may appear, as well as Contractor and Tenant's
Agents. All insurance maintained by Tenant's Agents shall preclude subrogation
claims by the insurer against anyone insured thereunder. Such insurance shall
provide that it is primary insurance as respects the owner and that any other
insurance maintained by owner is excess and noncontributing with the insurance
required hereunder. The requirements for the foregoing insurance shall not
derogate from the provisions for indemnification of Landlord by Tenant under
EXHIBIT B - Page 7
Section 4.2.2.2 of this Tenant Work Letter. Landlord may, in its discretion,
require Tenant to obtain a lien and completion bond or some alternate form of
security satisfactory to Landlord in an amount sufficient to ensure the
lien-free completion of the Tenant Improvements and naming Landlord as a
co-obligee.
4.2.3 Governmental Compliance. The Tenant Improvements shall
comply in all respects with the following: (i) all applicable codes and other
state, federal, city or quasi-governmental laws, codes, ordinances and
regulations, as each may apply according to the rulings of the controlling
public official, agent or other person; (ii) applicable standards of the
American Insurance Association (formerly, the National Board of Fire
Underwriters) and the National Electrical Code; and (iii) building material
manufacturer's specifications.
4.2.4 Inspection by Landlord. Landlord shall have the right to
inspect the Tenant Improvements at all reasonable times, provided however, that
Landlord's failure to inspect the Tenant Improvements shall in no event
constitute a waiver of any of Landlord's rights hereunder nor shall Landlord's
inspection of the Tenant Improvements constitute Landlord's approval of the
same. Should Landlord disapprove any portion of the Tenant Improvements,
Landlord shall promptly notify Tenant in writing of such disapproval and shall
specify the items disapproved. Any defects or deviations in, and/or disapproval
by Landlord of, the Tenant Improvements shall be rectified by Tenant at no
expense to Landlord; provided however, that in the event Landlord determines
that a defect or deviation exists or disapproves of any matter in connection
with any portion of the Tenant Improvements and such defect, deviation or matter
might adversely affect the mechanical, electrical, plumbing, heating,
ventilating and air conditioning or life-safety systems of the Building, the
structure or exterior appearance of the Building or any other tenant's use of
such other tenant's leased premises, and if Tenant fails to cure such default,
deviation or matter within a reasonable period of time following Tenant's
receipt of written notice thereof, then Landlord may take such action as
Landlord deems necessary, at Tenant's expense and without incurring any
liability on Landlord's part, to correct any such defect, deviation and/or
matter, including, without limitation, causing the cessation of performance of
the construction of the Tenant Improvements until such time as the defect,
deviation and/or matter is corrected to Landlord's satisfaction.
4.2.5 Meetings. Commencing upon the execution of this Lease,
Tenant shall hold weekly meetings at a reasonable time, with the Architect and
the Contractor regarding the progress of the preparation of Construction
Drawings and the construction of the Tenant Improvements, which meetings shall
be held at the Real Property or another location acceptable to Landlord and
Tenant, and Landlord and/or its agents shall receive prior notice of, and shall
have the right to attend, all such meetings, and, upon Landlord's request,
certain of Tenant's Agents shall attend such meetings. In addition, minutes
shall be taken at all such meetings, a copy of which minutes shall be promptly
delivered to Landlord. One such meeting each month shall include the review of
Contractor's current request for payment.
4.3 Notice of Completion; Copy of Record Set of Plans. Within ten (10)
days after completion of construction of the Tenant Improvements, Tenant shall
cause a Notice of Completion to be recorded in the office of the Recorder of the
EXHIBIT B - Page 8
appropriate County in accordance with applicable law, and shall furnish a copy
thereof to Landlord upon such recordation. If Tenant fails to do so, Landlord
may execute and file the same on behalf of Tenant as Tenant's agent for such
purpose, at Tenant's sole cost and expense. At the conclusion of construction,
(i)Tenant shall cause the Architect and Contractor (A) to update the Approved
Working Drawings as necessary to reflect all changes made to the Approved
Working Drawings during the course of construction, (B) to certify to the best
of their knowledge that the "record-set" of as-built drawings are true and
correct, which certification shall survive the expiration or termination of this
Lease, and (C) to deliver to Landlord a copy of such record set of drawings (on
CAD disk) within thirty (30) days following issuance of a certificate of
occupancy for the Premises, and (ii) Tenant shall deliver to Landlord a copy of
all warranties, guaranties, and operating manuals and information relating to
the improvements, equipment, and systems in the Premises.
SECTION 5
---------
MISCELLANEOUS
-------------
5.1 Tenant's Representative. Tenant has designated Xxxx X. Xxxxx or
Xxxxx Xxxxxxxx as its sole representative with respect to the matters set forth
in this Tenant Work Letter, who shall have full authority and responsibility to
act on behalf of the Tenant as required in this Tenant Work Letter.
5.2 Landlord's Representative. Landlord has designated Xxxxx Xxxxxx as
its sole representatives with respect to the matters set forth in this Tenant
Work Letter, who, until further notice to Tenant, shall have full authority and
responsibility to act on behalf of the Landlord as required in this Tenant Work
Letter.
5.3 Time of the Essence in This Tenant Work Letter. Time is of the
essence in this Work Letter and each of its provisions. Unless otherwise
indicated, all references herein to a "number of days" shall mean and refer to
calendar days. If any item requiring approval is timely disapproved by Landlord,
the procedure for preparation of the document and approval thereof shall be
repeated until the document is approved by Landlord.
5.4 Tenant's Lease Default. Notwithstanding any provision to the
contrary contained in this Lease, if an event of default as described under the
Lease or this Tenant Work Letter has occurred at any time on or before the
completion of the Tenant Improvements, then (i) in addition to all other rights
and remedies granted to Landlord pursuant to this Lease, Landlord shall have the
right to withhold payment of all or any portion of the Tenant Improvement
Allowance and/or Landlord may cause Contractor to cease the construction of the
Tenant Improvements (in which case, Tenant shall be responsible for any delay in
the substantial completion of the Tenant Improvements caused by such work
stoppage), and (ii) all other obligations of Landlord under the terms of this
Tenant Work Letter shall be forgiven until such time as such default is cured
pursuant to the terms of this Lease (in which case, Tenant shall be responsible
EXHIBIT B - Page 9
for any delay in the substantial completion of the Tenant Improvements caused by
such inaction by Landlord).
5.5 Landlord Delays. If there shall be a delay or there are delays in
the completion of the Tenant Improvements, as a direct or total result of any of
the following (collectively, "Landlord Delays"):
5.5.1 Landlord's failure to timely approve or disapprove any
matter requiring Landlord's approval;
5.5.2 A breach by Landlord of the terms of this Tenant Work
Letter or the Lease;
5.5.3 Changes in any of the Final Space Plans or Final Working
Drawings requested by Landlord after Landlord's approval thereof, unless such
change is requested because the same do not comply with Code or other applicable
laws; or
5.5.4 The failure of an Engineer designed by Landlord to
complete its engineering drawings within ten (10) business days following
receipt of all information necessary to complete the same;
Then, provided Tenant has given Landlord written notice specifying in
reasonable detail the nature of such delay within two (2) business days
following the occurrence thereof and such delay is not cured within two (2)
business days following Landlord's receipt of such notice, the sixty (60) day
period specified in Section 7.2 of the Summary shall be extended by one day for
each day of such delay.
5.6 Must Take Space. The provisions of this Tenant Work Letter will
govern the design and construction of the Must Take Space as well. Accordingly,
all references in this Tenant Work Letter to the Premises will include the Must
Take space, except that for purposes of Sections I. I and 2, reference to the
Premises will mean either the original Premises or the Must Take Space, as
applicable.
EXHIBIT B - Page 10
SCHEDULE I
----------
TO
--
EXHIBIT B
---------
CONSTRUCTION RULES AND REGULATIONS
----------------------------------
1. Daytime work is allowed, but only to the extent that it will not cause
inconvenience to tenants in the building. Activities causing odors or
noise that can be detected in other suites (above, below or same floor)
must be performed before 7:00 a.m. or after 6:00 p.m. For remodels of
existing tenant space, the amount of work allowed during business hours
will be determined by the tenant.
If access tot he surrounding occupied space is required, building
management must be notified 24 hours in advance so arrangements can be
made with the tenants that are affected.
2. Parking is allowed only in areas designated by management. Parking in
garage - Level I after 6:00 p.m. and before 6:00 a.m. (The garage
elevators close at 9:30 p.m. and open at 5:25 a.m.). If contractors are
in the building after 6:00 a.m., they must move their vehicles to Xxxxx
X0, middle section, where it is marked "Authorized Personnel."
Loading dock is to be used only for deliveries and those trucks that
are too high for garage. Notify building management for access to
load/unload trucks, as required.
If a parking ticket is issued, write the name of the general contractor
on the parking ticket to receive free parking.
3. Each subcontractor will remove any trash he creates from the job site,
and leave floor in a clean-swept condition for the next trade.
Common areas of the building are to be kept clean at all times (lobby,
corridors, elevators, restrooms).
4. Upon job completion, contractor will promptly remove any "left-over"
materials, tools, gang boxes, etc.
5. Contractor's employees shall only use the loading dock restroom, unless
otherwise directed by management.
6. Contractor will use freight elevator only for bringing materials into
the building. It is available upon request (24-hour notice), except
during heavy tenant traffic times (i.e. 7:30 - 9:00 a.m., 11:30 a.m. -
1:30 p.m., 4:30 - 5:30 p.m.)
SCHEDULE I
TO
EXHIBIT B - Page 1
7. Stairwells are off limits for use, except in the event of an emergency.
If roof access is required, it will be done from the 11th floor.
8. Working area shall be maintained in a neat and orderly condition at all
times. All material must be kept orderly and debris removed as soon as
accumulated. No materials, supplies, etc. are to be left in the common
areas at any time.
9. All tools and equipment provided by contractor shall be of the property
type, be safe for the performance of work being performed, and comply
with the applicable codes and laws (i.e.
OSHA).
10. Areas in which work is being performed must be posted and roped off, as
necessary. Corridor and lobby doors will need to be protected with
masonite while materials are being brought in or out of the building.
11. A responsible supervisor shall be present at all times, and his duties
shall include the prevention of fires and accidents.
12. Contractor will notify the building management office on a weekly basis
or before 3:00 p.m. each day of which subcontractors will be in the
building that night. (By 3:00 p.m. Friday, for weekend access).
Contractor should also indicate whether they will need access to the
freight elevator and loading dock. (Security will not allow access
without prior notification.)
13. Contractor/subcontractors will sign in at the security desk upon
entering the building.
14. Contractor will notify security when they are finished for the
day/night.
15. All wood staining will be done off the property.
16. Security is to be notified of any problems/emergencies. They will
contact the appropriate personnel (i.e. building engineers).
17. Sprinkler System Modification - contractor must give building
maintenance personnel minimum 24-hour notice of work to be performed.
Building maintenance personnel will be responsible for disabling fire
alarms and sprinkler systems prior to work being performed. The system
must e operational by 4:00 p.m. and building maintenance notified to
refill and reactivate the system. Contractor must check for leaks each
day If a job involves multiple floors, only one floor can be disabled
at any one time.
SCHEDULE I
TO
EXHIBIT B - Page 2
18. If there is any work involving an open flame (i.e. welding, pipe
sweating, etc.) the contractor is required to have a fire extinguisher
available in the immediate vicinity, and must perform a minimum
30-minute fire watch after completion.
19. All combustible materials are to be removed from the job site each day
when the work is completed for the day.
20. This building is a "Non-Smoking" building. Therefore, no smoking is
allowed in the building.
21. The playing of radios is not allowed.
SCHEDULE I
TO
EXHIBIT B - Page 3
EXHIBIT C
---------
CENTRAL PARK SQUARE
-------------------
NOTICE OF LEASE TERM DATES
--------------------------
To: --------------------
--------------------
--------------------
--------------------
Re: Office Lease dated ______________, 19____, between WHCPS REAL
ESTATE LIMITED PARTNERSHIP, a Delaware limited partnership
("Landlord"), and __________________________________, a
_______________ ("Tenant") concerning Suite _____________ on
floor(s) ______ of the Office Building located at
________________________.
Gentlemen:
In accordance with the Office Lease (the "Lease"), we wish to advise
you and/or confirm as follows:
1. That the Premises are Ready for Occupancy, and that the Lease Term
shall commence as of _________________ for a term of ______________ ending on
_______________.
2. That in accordance with the Lease, Rent commenced to accrue on
___________________.
3. If the Lease Commencement Date is other than the first day of the
month, the first billing will contain a pro rata adjustment. Each billing
thereafter, with the exception of the final billing, shall be for the full
amount of the monthly installment as provided for in the Lease.
4. Rent is due and payable in advance on the first day of each and
every month during the Lease Term. Your rent checks should be made payable to
________________ at ___________________.
5. The exact number of rentable square feet within the Premises is
________ square feet.
6. Tenant's Share as adjusted based upon the exact number of rentable
square feet within the Premises is _______%.
EXHIBIT C - Page 1
"Landlord":
WHCPS REAL ESTATE LIMITED
PARTNERSHIP, a Delaware limited
partnership
By: WHCPS GEN-PAR, INC.,
a Delaware corporation
General Partner
By:
--------------------------------
Name:
-------------------------
Title:
------------------------
Agreed to and Accepted as
of ________, 19___.
"Tenant":
---------------------------,
a
--------------------------
By:
--------------------------------
Name:
-------------------------
Title:
------------------------
EXHIBIT C - Page 2
EXHIBIT D
---------
CENTRAL PARK SQUARE
-------------------
RULES AND REGULATIONS
---------------------
Tenant shall faithfully observe and comply with the following Rules and
Regulations. Landlord shall not be responsible to Tenant for the nonperformance
of any of said Rules and Regulations by or otherwise with respect to the acts or
omissions of any other tenants or occupants of the Building.
1. Tenant shall not alter any lock or install any new or additional
locks or bolts on any doors or windows of the Premises without obtaining
Landlord's prior written consent. Tenant shall bear the cost of any lock changes
or repairs required by Tenant. Two keys will be furnished by Landlord for the
Premises.
2. All doors opening to public corridors shall be kept closed at all
times except for normal ingress and egress to the Premises, unless electrical
hold backs have been installed.
3. Landlord reserves the right to close and keep locked all entrance
and exit doors of the Building during such hours as are customary for comparable
buildings in the vicinity of the Building. Tenant, its employees and agents must
be sure that the doors to the Building are securely closed and locked when
leaving the Premises if it is after the normal hours of business for the
Building. Any tenant, its employees, agents or any other persons entering or
leaving the Building at any time when it is so locked, or any time when it is
considered to be after normal business hours for the Building, may be required
to sign the Building register when so doing. Access to the Building may be
refused unless the person seeking access has proper identification or has a
previously arranged pass for access to the Building. The Landlord and its agents
shall in no case be liable for damages for any error with regard to the
admission to or exclusion from the Building of any person. In case of invasion,
mob, riot, public excitement, or other commotion, Landlord reserves the right to
prevent access to the Building during the continuance of same by any means it
deems appropriate for the safety and protection of life and property.
4. Landlord shall have the right to prescribe the weight, size and
position of all safes and other heavy property brought into the Building. Safes
and other heavy objects shall, if considered necessary by Landlord, stand on
supports of such thickness as is necessary to properly distribute the weight.
Landlord will not be responsible for loss of or damage to any such safe or
property in any case. All damage done to any part of the Building, its contents,
occupants or visitors by moving or maintaining any such safe or other property
shall be the sole responsibility of Tenant and any expense of said damage or
injury shall be borne by Tenant.
EXHIBIT D - Page 1
5. No furniture, freight, packages, supplies, equipment or merchandise
will be brought into or removed from the Building or carried up or down in the
elevators, except upon prior notice to Landlord, and in such manner, in such
specific elevator, and between such hours as shall be designated by Landlord.
Tenant shall use reasonable efforts to provide Landlord with not less than 24
hours prior notice of the need to utilize an elevator for any such purpose, so
as to provide Landlord with a reasonable period to schedule such use and to
install such padding or take such other actions or prescribe such procedures as
are appropriate to protect against damage to the elevators or other parts of the
Building. In no event shall Tenant's use of the elevators for any such purpose
be permitted during the hours of 7 00 a.m.-9:00 a.m., 11:30 a.m.-1:30 p.m. and
4:30 p.m.-6:30 p.m.
6. Landlord shall have the right to control and operate the public
portions of the Building, the public facilities, the heating and air
conditioning, and any other facilities furnished for the common use of tenants,
in such manner as is customary for comparable buildings in the vicinity of the
Building.
7. The requirements of Tenant will be attended to only upon application
at the Office of the Building or at such office location designated by Landlord.
Employees of Landlord shall not perform any work or do anything outside their
regular duties unless under special instructions from Landlord.
8. Tenant shall not disturb, solicit, or canvass any occupant of the
Building and shall cooperate with Landlord or Landlord's agents to prevent same.
9. The toilet rooms, urinals, wash bowls and other apparatus shall not
be used for any purpose other than that for which they were constructed, and no
foreign substance of any kind whatsoever shall be thrown therein. The expense of
any breakage, stoppage or damage resulting from the violation of this rule shall
be borne by the tenant who, or whose employees or agents, shall have caused it.
10. Tenant shall not overload the floor of the Premises, nor xxxx,
drive nails or screws, or drill into the partitions, woodwork or plaster or in
any way deface the Premises or any part thereof without Landlord's consent first
had and obtained.
11. Except for vending machines intended for the sole use of Tenant's
employees and invitees, no vending machine or machines of any description other
than fractional horsepower office machines shall be installed, maintained or
operated upon the Premises without the written consent of Landlord.
12. Tenant shall not use or keep in or on the Premises or the Building
any kerosene, gasoline or other inflammable or combustible fluid or material
other than ordinary office and cleaning supplies in quantities customarily used
by office tenants.
EXHIBIT D - Page 2
13. Tenant shall not use any method of heating or air conditioning
other than that which may be supplied by Landlord, without the prior written
consent of Landlord.
14. Tenant shall not use, keep or permit to be used or kept, any foul
or noxious gas or substance in or on the Premises, or permit or allow the
Premises to be occupied or used in a manner offensive or objectionable to
Landlord or other occupants of the Building by reason of noise, odors, or
vibrations, or interfere in any way with other Tenants or those having business
therein.
15. Tenant shall not bring into or keep within the Building or the
Premises any animals, birds, bicycles or other vehicles.
16. No cooking shall be done or permitted by any tenant on the
Premises, nor shall the Premises be used for the storage of merchandise for
lodging. Notwithstanding the foregoing, Underwriters' laboratory-approved
equipment and microwave ovens may be used in the Premises for heating or cooking
food and brewing coffee, tea, hot chocolate and similar beverages, provided that
such use is in accordance with all applicable federal, state and city laws,
codes, ordinances, rules and regulations, and does not cause odors which are
objectionable to Landlord and other Tenants.
17. Landlord will approve where and how telephone and telegraph wires
are to be introduced to the Premises. No boring or cutting for wires shall be
allowed without the consent of Landlord. The location of telephone, call boxes
and other office equipment affixed to the Premises shall be subject to the
approval of Landlord.
18. Landlord reserves the right to exclude or expel from the Building
any person who, in the judgment of Landlord, is intoxicated or under the
influence of liquor or drugs, or who shall in any manner do any act in major
violation of any of these Rules and Regulations.
19. Tenant, its employees and agents shall not loiter in the entrances
or corridors, nor in any way obstruct the sidewalks, lobby, halls, stairways or
elevators, and shall use the same only as a means of ingress and egress for the
Premises.
20. Tenant shall not waste electricity, water or air conditioning and
agrees to cooperate reasonably with Landlord to promote effective operation of
the Building's heating and air conditioning system, and shall refrain from
attempting to adjust any controls.
21. Tenant shall store all its trash and garbage within the interior of
the Premises. No material shall be placed in the trash boxes or receptacles if
such material is of such nature that it may not be disposed of in the ordinary
and customary manner of removing and disposing of trash and garbage in the
Downtown Phoenix area without violation of any law or ordinance governing such
disposal. All trash, garbage and refuse disposal shall be made only through
entry-ways and elevators provided for such purposes at such times as Landlord
shall designate.
EXHIBIT D - Page 3
22. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.
23. Tenant shall assume any and all responsibility for protecting the
Premises from theft, robbery and pilferage, which includes keeping doors locked
and other means of entry to the Premises closed, when the Premises are not
occupied.
24. Landlord may waive any one or more of these Rules and Regulations
for the 'benefit of any particular tenant or tenants, but no such waiver by
Landlord shall be construed as a waiver of such Rules and Regulations in favor
of any other tenant or tenants, nor prevent Landlord from thereafter enforcing
any such Rules or Regulations against any or all tenants of the Building.
25. No awnings or other projection shall be attached to the outside
walls of the Building without the prior written consent of Landlord. 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 without the prior written
consent of Landlord. All electrical ceiling fixtures hung in offices or spaces
along the perimeter of the Building must be fluorescent and/or of a quality,
type, design and bulb color approved by Landlord.
26. The sashes, sash doors, skylights, 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 by Tenant, nor shall any bottles,
parcels or other articles be placed on the windowsills.
27. The washing and/or detailing of or, the installation of
windshields, radios, telephones in or general work on, automobiles shall not be
allowed on the Real Property.
28. Food vendors shall be allowed in the Building upon receipt of a
written request from the Tenant. The food vendor shall service only the tenants
that have a written request on file in the Building Management Office. Under no
circumstance shall the food vendor display their products in a public or common
area including corridors and elevator lobbies. Any failure to comply with this
rule shall result in immediate permanent withdrawal of the vendor from the
Building.
29. Tenant must comply with requests by the Landlord concerning the
informing of their employees of items of importance to the Landlord.
30. Tenant shall comply with any non-smoking ordinance adopted by any
applicable governmental authority.
31. Tenant and Tenant's employees, agents, contractors and other
invitees shall not be permitted to bring firearms into the Building or
surrounding areas at any time.
32. Landlord reserves the right at any time to change or rescind any
one or more of these Rules and Regulations, or to make such other and further
reasonable Rules and Regulations as in Landlord's judgment may from time to time
be necessary for the management, safety, care and cleanliness of the Premises
EXHIBIT D - Page 4
and Building, and for the preservation of good order therein, as well as for the
convenience of other occupants and tenants therein. Landlord shall not be
responsible to Tenant or to any other person for the nonobservance of the Rules
and Regulations by another tenant or other person. Tenant shall be deemed to
have read these Rules and Regulations and to have agreed to abide by them as a
condition of its occupancy of the Premises.
EXHIBIT D - Page 5
EXHIBIT E
---------
CENTRAL PARK SQUARE
-------------------
FORM OF TENANT'S ESTOPPEL CERTIFICATE
-------------------------------------
The undersigned as Tenant under that certain Office Lease (the "Lease")
made and entered into as of ______________, 19___ and between WHCPS REAL ESTATE
LIMITED PARTNERSHIP, a Delaware limited partnership, as Landlord, and the
undersigned as Tenant, for Premises on the ________________ floor(s) of the
Office Building located at ________________________________ certifies as
follows:
1. Attached hereto as Exhibit A is a true and correct copy of the Lease
and all amendments and modifications thereto. The documents contained in Exhibit
A represent the entire agreement between the parties as to the Premises.
2. The undersigned has commenced occupancy of the Premises described in
the Lease, currently occupies the Premises, and the Lease Term commenced on
_____________.
3. The Lease is in full force and effect and has not been modified,
supplemented or amended in any way except as provided in Exhibit A.
4. Tenant has not transferred, assigned, or sublet any portion of the
Premises nor entered into any license or concession agreements with respect
thereto except as follows:
5. Tenant shall not modify the documents contained in Exhibit A or
prepay any amounts owing under the Lease to Landlord in excess of thirty (30)
days without the prior written consent of Landlord's mortgagee.
6. Base Rent became payable on _______________.
7. The Lease Term expires on _________________.
8. To Tenant's knowledge, all conditions of the Lease to be performed
by Landlord necessary to the enforceability of the Lease have been satisfied and
Landlord is not in default thereunder.
9. No rental has been paid in advance and no security has been
deposited with Landlord except as provided in the Lease.
EXHIBIT E - Page 1
10. To Tenant's knowledge, as of the date hereof, there are no existing
defenses or offsets that the undersigned has, which preclude enforcement of the
Lease by Landlord
11. All monthly installments of Base Rent, all Additional Rent and all
monthly installments of estimated Additional Rent have been paid when due
through _______________________. The current monthly installment of Base Rent is
$__________.
12. The undersigned acknowledges that this Estoppel certificate may be
delivered to Landlord's prospective mortgagee, or a prospective purchaser, and
acknowledges that it recognizes that if same is done, said mortgagee,
prospective mortgagee, or prospective purchaser will be relying upon the
statements contained herein in making the loan or acquiring the property of
which the Premises are a part, and in accepting an assignment of the Lease as
collateral security, and that receipt by it of this certificate is a condition
of making of the loan or acquisition of such property.
13. If Tenant is a corporation or partnership, each individual
executing this Estoppel Certificate on behalf of Tenant hereby represents and
warrants that Tenant is a duly formed and existing entity qualified to do
business in Arizona and that Tenant has full right and authority to execute and
deliver this Estoppel Certificate and that each person signing on behalf of
Tenant is authorized to do so.
Executed at ________________________ on the_______day of____________, 19___.
"Tenant":
------------------------------------
a
----------------------------------
By:
--------------------------------
Name:
-------------------------
Title:
------------------------
By:
--------------------------------
Name:
-------------------------
Title:
------------------------
EXHIBIT E - Page 2
EXHIBIT F
---------
CENTRAL PARK SQUARE
-------------------
FORM OF SUBORDINATION,
NON-DISTURBANCE AND ATTORNMENT AGREEMENT
----------------------------------------
RECORDING REQUESTED BY AND |
WHEN RECORDED RETURN TO: |
|
Xxxxxxxx & Xxxxxxxx |
000 Xxxxx Xxxxxx x
Xxx Xxxx, Xxx Xxxx 00000 |
Attn: Xxxxxxx X. Xxxxxxxx, Esq. |
--------------------------------------------------------------------------------
Space above this line for Recorder's use only
SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
This Subordination, Non-Disturbance and Attornment Agreement, made and
entered into as of the ______ day of ____________ 1997, between WH VII-2
ACQUISITION FINANCE, L.P., a Delaware limited partnership ("Lender"), and
MICROAGE COMPUTER CENTERS, ENC., a Delaware corporation ("Tenant").
R E C I T A L S :
- - - - - - - -
A. WHCPS Real Estate Limited Partnership, a Delaware limited
partnership ("Landlord"), and Tenant are parties to a certain Lease dated
__________, 1997, (the "Lease"), demising the premises more particularly
described in the Lease (the "Premises");
B. Lender has made a mortgage loan (the "Loan") to Landlord, secured by
a First Deed of Trust, dated April 22, 1997, encumbering the real estate on
which the Premises are located and recorded April 24, 1997 as document
#97-0271748, Official Records, Maricopa County, State of Arizona (the
"Mortgage");
C. The parties hereto desire to enter into this Agreement on the terms
and conditions hereinafter provided.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants contained herein, the parties hereto covenant and agree as follows:
EXHIBIT F - Page 1
1. The parties acknowledge that the Lease is subject and subordinate to
the Mortgage and is hereby made subject and subordinate to all renewals,
modifications, consolidations, replacements and extensions of the Mortgage, so
that all rights of Tenant under the Lease shall be subject and subordinate to
the rights of Lender under all renewals, modifications, consolidations,
replacements and extensions of the Mortgage, as fully as if all such instruments
had been executed, delivered and recorded prior to the Lease.
2. Upon receipt of written notice, and conditioned on Lender or any
such purchaser as appropriate agreeing in writing to become Landlord under the
Lease, Tenant agrees to recognize Lender or any purchaser at a foreclosure sale
involving the Mortgage as its landlord under the Lease without the necessity of
any other or further attornment than in this paragraph contained. Provided the
purchaser at a foreclosure sale involving the Mortgage agrees in writing to
become Landlord under the Lease, Tenant hereby waives any and all rights to
terminate the Lease by reason of the foreclosure of the Mortgage, and, under the
same proviso, if any court holds the Lease to be terminated by reason of a
foreclosure of the Mortgage, this Agreement shall be deemed to be a new lease
between the purchaser at such foreclosure, as landlord, and Tenant, as tenant,
for the balance of the term of the Lease for the same Premises at the same
rental and upon the same terms and conditions as therein provided. Also, in the
event of such holding, at the written request of Tenant or the purchaser at
foreclosure, Tenant and such purchaser at foreclosure shall execute and deliver
to each other a new lease for the balance of the term of the Lease for the same
Premises at the same rental and upon the same terms and conditions as therein
provided.
3. Lender agrees that so long as Tenant shall not be in default under
the Lease, Tenant's right of possession and enjoyment of the Premises shall be
and remain undisturbed and unaffected by any foreclosure or other proceedings
involving the Mortgage; provided, however, that Lender or any purchaser at
foreclosure shall not be:
(a) liable for any act or omission of a prior landlord
(including Landlord); or
(b) subject to any offsets or defenses which the Tenant might
have against any prior landlord (including Landlord) which relate to periods
before the foreclosure; or
(c) bound by any rent or additional rent which the Tenant
might have paid in advance to any prior landlord (including Landlord) for any
period beyond the month in which the foreclosure occurs;
(d) liable for any security deposit paid to Landlord, not
actually turned over to Lender.
4. This Agreement shall be binding upon and inure to the benefit of the
parties hereto, and their respective successors and assigns, heirs, executors
and administrators.
EXHIBIT F - Page 2
IN WITNESS WHEREOF, the undersigned have executed and delivered this
Agreement as of the date and year first above written.
LENDER:
WH VII-2 ACQUISITION FINANCE, L.P.,
a Delaware limited partnership
By: WH VII-2 Acquisition Finance, Gen-Par, Inc.,
a Delaware corporation, as sole general partner
By:
--------------------------------------
Printed Name:
------------------------
Title:
------------------------------
TENANT:
ATTEST: MICROAGE COMPUTER CENTER, INC.,
a Delaware corporation
By:
--------------------- ------------------------------------------
Secretary Printed Name:
-----------------------------
Title:
------------------------------------
(Seal)
EXHIBIT F - Page 3
STATE OF_____________________)
) ss.
COUNTY OF____________________)
On ________________________, before me,______________________, a Notary
Public in and for said state, personally appeared __________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
----------------------------------------------------
Notary Public in and for said State
STATE OF_____________________)
) ss.
COUNTY OF____________________)
On ____________________, before me, ______________________, a Notary
Public in and for said state, personally appeared ___________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
----------------------------------------------------
Notary Public in and for said State
EXHIBIT F - Page 4
