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EXHIBIT 10.26
BUILD TO SUIT LEASE
DATED APRIL 8,1998
between
TACC INVESTORS, LLC, LANDLORD
and
INTUIT INC., TENANT.
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BUILD TO SUIT LEASE
1. PARTIES. This lease, dated, for reference purposes only, April 8,
1998, is made by and between TACC Investors, LLC, an Arizona limited liability
company (herein called "Landlord"), and Intuit Inc., a Delaware corporation
(herein called "Tenant").
2. PREMISES; ACCESS. Landlord hereby leases to Tenant and Tenant leases
from Landlord for the term, at the rent, and upon all of the conditions set
forth herein, the real property (consisting of approximately fifteen (15) acres
of land) shown on EXHIBIT A, together with a facility consisting of two (2)
buildings connected by a common entryway and lobby to be constructed on such
real property pursuant to this Lease, containing approximately 135,000 square
feet (the buildings and related improvements are sometimes called the
"Improvements"), all of the foregoing being called the "Premises." The
Improvements will be constructed in two (2) phases: Phase I will consist of a
65,000 square foot shell Base Building, related Tenant Improvements, a 5,000
square foot common entryway and lobby, no fewer than 650 paved parking spaces
and related site work. Phase II will consist of a 65,000 square foot shell Base
Building, related Tenant Improvements, an additional 450 paved parking spaces
and related site work.
Upon completion of Phase I, the Premises will have access to
and from Tucson Boulevard. It is anticipated that at some future date Tucson
Airport Commerce Center may construct road improvements connecting the Premises
to Country Club Road as part of future phases of development of Tucson Airport
Commerce Center. Landlord is making no assurances to Tenant regarding such
additional access to Country Club Road.
3. TERM; IMPROVEMENTS; COMMENCEMENT DATE.
3.1. TERM. The term (the "Term") of this Lease shall be for
approximately ten (10) years commencing on the Commencement Date (as defined in
paragraph 3.3) and ending on the earlier of (a) ten (10) years following the
date Phase II is Ready for Occupancy (as defined in paragraph 3.3), or (b) July
31, 2009, unless this Lease is sooner terminated or extended, or the Premises
are expanded, pursuant to any provision hereof.
3.2. IMPROVEMENTS.
(a) The Improvements are preliminarily described in
EXHIBIT B (the "Outline Specifications"). Tenant has previously approved the
Outline Specifications. The Outline Specifications describe certain elements of
the Tenant Improvements and certain elements of the site and the shell Base
Building for Phase I. The Improvements described in the Outline Specifications
are to be designed and constructed with provision for special improvements and
other features keyed to Tenant's particular business. The parties recognize
there will continue to occur a rapid process of
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refinement of the Improvements and the Outline Specifications to meet Tenant's
particular needs, City of Tucson and regulatory requirements and any
contingencies that arise in achieving final plans and specifications. Landlord
and Tenant agree to act reasonably, diligently and in good faith to produce
final plans and specifications for the Improvements (which term shall include
all agreed changes). Tenant acknowledges that Tenant's timely and diligent
cooperation with Landlord is essential to timely completion. Tenant agrees to
provide Landlord and Landlord's agents with timely and thorough programs of
Tenant's requirements, reviews, comments and approvals.
(b) In particular, set forth in EXHIBIT C is the
critical path schedule which shall be adhered to by Landlord and Tenant in order
to develop expeditiously final plans and specifications (the "Plans") for the
Improvements and to achieve the delivery dates set forth in paragraph 3.4.
Landlord and Tenant shall use all reasonable efforts to perform their respective
obligations within the time periods set forth in EXHIBIT C. The critical path
schedule will allow insubstantial and harmless deviations from the strict
schedule but not substantial departures therefrom unless Landlord and Tenant
agree so in a writing that commensurately extends the delivery dates under
paragraph 3.4. Landlord and Tenant acknowledge that some of the approvals
required in the critical path schedule have already been given. Eric Johnson
will be Tenant's contact person for purpose of submittals and approvals.
(c) Any change in the Outline Specifications, the
Improvements or the other plans and specifications envisioned under this
paragraph 3.2 requested by Tenant shall (i) be reasonable, (ii) not involve
major structural changes (unless Landlord agrees), (iii) require no additional
land (unless Landlord agrees), (iv) result in no violation of any existing or
future CC&R's or applicable laws and regulations, (v) have Landlord's written
approval, which Landlord may not unreasonably withhold or delay, and (vi)
require Tenant to pay any additional cost required to implement such change. The
cost of any Tenant-requested change to the Tenant Improvements will be handled
pursuant to subparagraph (f) below. The cost of any Tenant-requested change to
the site or to the shell Base Buildings will be handled pursuant to
subparagraph (h) below. Any CC&R's not in force as of the date of execution of
this Lease shall be reasonably derivative from any draft of CC&R's delivered to
Tenant before such execution date, and in no event will any future CC&R's impair
the right of Tenant to use the Premises for the uses permitted under paragraph
8.1. No change in the Base Buildings will occur after the design process for the
Tenant Improvements has commenced, without Landlord's written approval.
(d) "Tenant Improvements" will consist of all fixed
Tenant improvement work shown on the Plans including but not limited to all
interior walls, heating/ventilating/air conditioning systems, architecture and
engineering fees, building permit fees and general contractor fees associated
with the Tenant Improvements. Tenant will furnish an emergency generator from
Tenant's existing facility and Tenant shall provide all fixtures, furnishings
and equipment not expressly shown as Landlord-provided on the Plans, including,
without limitation, the air conditioning for the telephone/computer room.
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(e) Upon completion of the process described above,
Landlord shall submit the Plans to the City of Tucson for approval. If the City
of Tucson review process necessitates material changes in the Plans, Landlord
will notify Tenant promptly and Tenant shall deliver to Landlord Tenant's
written comments on such changes within five (5) days after Landlord has
notified Tenant. Landlord and Tenant shall have the right to approve any such
material changes in the Plans.
(f) Landlord shall provide Tenant with an allowance
(the "Allowance") for Tenant Improvements not to exceed $28.00 per square foot
in the Improvements as reasonably calculated by Landlord. At the very earliest
practicable date Landlord will provide Tenant with written notice of the
estimated if not final square footage of the Improvements so that Tenant has a
reasonable cost guideline to work with. If the actual cost of the Tenant
Improvements exceeds the Allowance, the excess will be amortized over the
ten-year Term of this Lease at 9% interest and shall be added to monthly Rent.
If the actual cost of the Tenant Improvements is less than the Allowance, Tenant
will receive a credit against monthly Rent equal to 60% of the actual cost
reduction.
Example:
If the Tenant Improvements are constructed at $30/sq. ft. over the
70,000 sq. ft. (approx.) comprising Phase II, the rental rate will
increase from $0.7475 to $0.7728, or an increase of $1,773.46 per month
($2 x 70,000 = 140,000, amortized over 10 years at 9%).
Example:
If the Tenant Improvements are constructed at $26/sq. ft. over the
70,000 sq. ft (approx.) comprising Phase I, the rent credit would be
$84,000 ($2 x 70,000 = 140,000 x 60% = 84,000), credited against the
rent due for the first two (2) months.
(g) After Landlord and Tenant have completed the
foregoing process and reached agreement in writing, Landlord shall meet all
conditions of zoning and obtain the necessary permits and commence and
diligently proceed to complete at its sole cost and expense, through reputable
contractors of Landlord's choice, the construction of the Improvements in a good
and workmanlike manner substantially as described in the Plans, and provide all
necessary transportation, labor, materials, tools, implements and appliances
required to construct the Improvements. Notwithstanding the provisions of the
Outline Specifications or the Plans, Landlord may make reasonable substitutions
and other "value engineering" changes so long as the substitutions or changes
result in Improvements capable of at least equal performance. Landlord shall
promptly inform Tenant of any substitutions and changes. Tenant may protest any
proposed substitution that is likely to lower the quality of the Improvements.
Landlord and Tenant will collaborate promptly with each other to eliminate any
dispute over substitutions. Landlord will be required to provide no improvements
other than the
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Improvements described in the Plans, subject only to those changes mutually
approved by Landlord and Tenant in writing.
(h) Landlord and Tenant recognize that the process of
designing and constructing the Improvements may result in additional cost to
Landlord and require an adjustment of the Rent payable by Tenant inasmuch as the
process will be devoted to Tenant's particular needs. The cost of any material
change or addition to the site or the shell Base Building components of the
Improvements described in the Outline Specifications, or any material change in
the scope or quality thereof, including the additional costs to Landlord
resulting from change orders to the general contract(s), together with the
associated costs of the contractors' general conditions, shall result in an
increase in the Rent. If such adjustment becomes necessary, Landlord will
recalculate the Rent and promptly provide Tenant with new Rent figures for the
Premises with such detail and other back-up information as may reasonably be
requested by Tenant to fairly demonstrate the basis for such an adjustment, to
which Tenant's approval shall not be unreasonably withheld. Landlord and Tenant
will collaborate promptly with each other to eliminate any dispute over
recalculation of the Rent. The adjustment sum will be amortized over the
ten-year Term of this Lease at nine percent (9%) interest and shall be added to
monthly Rent.
(i) Landlord is making no express or implied
warranties to Tenant regarding the condition of the Premises or the Improvements
excepting only those express warranties set forth in this Lease. Tenant
acknowledges that Landlord will be utilizing the professional services of an
architect and a general contractor and although Landlord is making no
representations or warranties other than the express warranties set forth in
this Lease, Landlord will provide Tenant with the benefits of any standard
warranty that Landlord receives on building components, as well as the ten (10)
year manufacturers' warranty/bond on the roof membrane (the cost of which Tenant
shall pay to Landlord before taking possession of the Premises). Tenant
acknowledges that some or all of these warranties require ongoing maintenance of
building components for the warranties to remain valid, and Tenant agrees to
discharge all maintenance required by the terms of any warranties and to enter
into the appropriate service agreements at Tenant's sole expense.
Notwithstanding the foregoing, Tenant shall also have the benefit of any express
or written warranty provided by any architect, contractor, subcontractor or
supplier (a "Provider") providing services, labor, materials, supplies and
equipment for the Improvements, as well as any other warranty available to
Tenant under applicable law, excepting only any implied warranty of habitability
or fitness for any particular purpose, which implied warranty, if any, Tenant
hereby disclaims as to Landlord but reserves as to all Providers.
Notwithstanding anything to the contrary in the preceding
paragraph, Landlord expressly warrants to Tenant that the Improvements will be
constructed in compliance with applicable laws and building codes, subject to
the time requirements for assertion of claims set forth in other paragraphs of
this Lease.
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3.3. COMMENCEMENT DATE. The Term of this Lease shall commence
on the earlier of (the "Commencement Date") (i) the date on which Tenant takes
possession of the first sub-phase of Phase I of the Premises to conduct its
business (for a purpose other than fixturization or fit-up), or (ii) the day on
which a temporary certificate of occupancy (or equivalent approval of
completion) has been issued for the first sub-phase of Phase I of the Premises
by the appropriate governmental agency, whereupon such sub-phase shall be deemed
"Ready for Occupancy." The Commencement Date shall not, under any circumstances,
occur before September 1, 1998. Each of the sub-phases of Phase I and the
entirety of Phase II shall be deemed Ready for Occupancy the day on which a
temporary certificate of occupancy (or equivalent approval of completion) has
been issued for such sub-phase or Phase II by the appropriate governmental
agency. For a phase or sub-phase to be considered "Ready for Occupancy" any
required parking spaces shall then be available for Tenant's use. Each
certificate of occupancy may contain stipulations and conditions so long as it
permits Tenant to take occupancy of a given sub-phase or phase of the Premises
and use such sub-phase or phase of the Premises for all of the purposes
contemplated by this Lease. Landlord and Tenant shall execute, as soon as
determinable, a written statement specifying (a) the Commencement Date and/or
(b) the termination date of this Lease, which, when executed, will become part
of this Lease.
3.4. DELIVERY. Delivery of Phase I of the Premises Ready for
Occupancy will occur in three (3) successive sub-phases consisting of the
following Improvements, on the following dates:
First sub-phase: a 65,000 sq. ft. shell Base Building, 650
paved parking spaces, and approximately
37,000 sq. ft. of contiguous Tenant
Improvements, including an approximately
2,000 sq. ft. computer room and
approximately 500 telemarketing call
stations, or such fewer number of
stations as may be determined by Tenant's
needs (as to which Tenant will notify
Landlord on or before April 15, 1998), or
by area constraints: September 1, 1998
Second sub-phase: approximately 28,000 sq. ft. of Tenant
Improvements: September 30, 1998
Third sub-phase: 5,000 sq. ft. common entryway and lobby:
October 15, 1998
In addition, Landlord will make every reasonable effort to have the first
sub-phase shell (including the computer room) ready for Tenant fit-up by August
1, 1998, provided that Landlord shall have no liability to Tenant if
notwithstanding Landlord's reasonable efforts Landlord is unable to meet this
schedule.
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On or before April 30, 1998, Tenant shall notify Landlord in
writing of the date by which Tenant desires Phase II of the Premises, consisting
of a 65,000 sq. ft. shell Base Building, an additional 450 paved parking spaces
and related Tenant Improvements, to be delivered to Tenant Ready for Occupancy,
which shall occur no earlier than May 1, 1999, and no later than September 1,
1999 (the "Phase II Delivery Date").
In addition, Landlord will make every reasonable effort to
have the Phase II shell Base Building and 450 paved parking spaces ready for
Tenant fit-up seventy-five (75) days prior to the Phase II Delivery Date,
provided that Landlord shall have no liability to Tenant if notwithstanding
Landlord's reasonable efforts Landlord is unable to meet this schedule.
Notwithstanding any provision in this Lease to the contrary,
each scheduled date of delivery and any other scheduled date of performance by
Landlord under this paragraph 3.4 shall be extended one (1) day for each day of
Tenant Delay and one (1) day for each day of delay caused by Force Majeure.
"Tenant Delay" shall mean any delay in Landlord's commencement or completion of
Improvements that occurs as a result of: (i) any request by Tenant either that
Landlord perform any work in addition to that required under the Plans or that
Landlord delay commencement or completion of the Improvements for any reason
including, without limitation, time for contractor, subcontractor, supplier or
materialman performance arising out of a change order or a material change in
the Plans or the Improvements requested by Tenant, (ii) any material change by
Tenant to the Plans after final approval thereof, (iii) any failure of Tenant to
respond to any request for approval required hereunder within the time period
specified for such response or, where no specific response time is specified,
within a reasonable period of time after the request, (iv) any delay in
Landlord's construction of the Improvements caused by Tenant's interference with
Landlord's work or Tenant's activities in the Premises, or (v) any other act or
omission of Tenant or an Event of Default by Tenant under this Lease that
effectively delays commencement or completion of the Improvements. If loss of
schedule time due to Tenant Delay reasonably can be avoided by Tenant's own
action within twenty-four (24) hours after receipt of notice of the problem from
Landlord, Tenant Delay in such instance will not be incurred until Landlord
gives Tenant such notice, unless an emergency or other highly compelling
circumstances obviate the necessity of notice. Force Majeure shall have the
meaning ascribed to it in paragraph 42, except that for purposes of this
paragraph, Force Majeure will not include Landlord's failure to meet applicable
zoning conditions to the development and use of the Premises as contemplated by
Landlord and Tenant. The parties acknowledge that Landlord has accrued, as of
April 7, 1998, eight (8) days of Force Majeure credit due to weather-caused
delays prior to that date, which Landlord may use, at Landlord's election, to
extend the scheduled dates of delivery and performance under this paragraph 3.4
for Phase I.
If any sub-phase of Phase I is not Ready for Occupancy, or if
Phase II is not Ready for Occupancy, by the respective date(s) set forth above
for any reason other than (i) Tenant Delay or (ii) Force Majeure, Tenant's sole
and exclusive
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remedy shall be a credit against Rent next coming due under this Lease equal to
the sum of (a) any bona fide "holdover" penalty that Tenant is required to pay,
and demonstrates that it has paid, to its present landlord because of Tenant's
inability to vacate its present premises, or some portion thereof, and take
scheduled occupancy of the Improvements, and (b) any expenses or charges
actually incurred by Tenant as a result of the delayed delivery of the Premises,
excluding loss of profits and other special or consequential damages. The term
"holdover" penalty is defined as the difference between (iii) Tenant's then base
rent at its present facility and (iv) any additional rent imposed on Tenant
under its present lease due to Tenant's failure to vacate its present premises
on schedule.
Notwithstanding anything to the contrary in this Lease, other
than Tenant Delay, Tenant shall have the right in its sole and absolute
discretion, and for its sole and exclusive remedy, to terminate this Lease if
the first sub-phase of Phase I of the Premises is not Ready for Occupancy by
December 31, 1998.
3.5. EARLY ENTRY. Landlord shall permit Tenant to enter the
Premises prior to the Commencement Date for the purpose of placing on the
Premises furniture, fixtures, wire, cabling and equipment earlier approved by
Landlord in writing and any improvements and alterations permitted under
paragraph 9.5.
If Tenant does enter the Premises prior to the Commencement
Date, Tenant shall procure and maintain insurance policies required pursuant to
paragraph 10 and provide written indemnification to Landlord in form reasonably
acceptable to Landlord prior to such entry. Landlord and Tenant shall carefully
coordinate their respective efforts so as not to interfere with the objectives
of paragraphs 3.2 and 3.4. Entry by Tenant shall be made so as to comply in all
respects with paragraph 9.5 and the other provisions of this Lease, all
applicable ordinances, regulations and requirements of the City of Tucson, any
applicable CC&R's, and in such a manner so as not to interfere with Landlord or
Landlord's contractors in the performance of the construction work contemplated
hereby. Tenant shall not use the Premises for the storage of inventory or
otherwise commence business without the express prior written consent of
Landlord. Landlord shall not be responsible for repainting or cleaning the
Improvements as a result of any damage or wear resulting from Tenant's early
entry.
4. RENT; OTHER CHARGES.
4.1. MONTHLY RENT. Subject to the qualification in the
following subparagraph, Tenant shall pay to Landlord rent ("Rent") for the
Premises monthly payments, in advance, without deduction, off-set or demand, on
the first (1st) day of each month of the Term hereof at the rates set forth
below. Rent for any period during the Term hereof which is for less than one
month shall be a pro rata portion of the monthly installment based upon a thirty
(30) day month. Rent shall be payable in lawful money of the United States to
Landlord at the address stated herein or to such other persons or at such other
places as Landlord may designate by written notice to Tenant from time to time.
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Rent for each phase or sub-phase of the Premises shall
commence upon, but not before, the earlier of (a) Tenant's taking possession of
such phase or sub-phase to conduct its business (for a purpose other than
fixturization or fit-up), or (b) Landlord's delivery of such phase or sub-phase
Ready for Occupancy. If Tenant elects, pursuant to paragraph 3.4, to defer
taking possession of Phase II until a date subsequent to May 1, 1999, Tenant
shall nevertheless pay rent thereon to Landlord as compensation for Landlord's
holding the space, commencing on May 1, 1999, at a rate equal to twenty percent
(20%) of the scheduled Rent for Phase II until Tenant starts to pay Rent for
Phase II, which shall occur no later than September 1, 1999.
Monthly Rent payable by Tenant to Landlord for the initial ten
(10) year Term of this Lease shall be calculated as follows:
Months 1 - 48: $0.7475/sq. ft. NNN
("Initial Rate")
Months 49 - 96: No less than the Initial Rate, subject
to increase effective at month 49 in
accordance with paragraph 4.2 ("First
Adjusted Rate")
Months 97 - end No less than the First Adjusted
of initial Term: Rate, subject to increase
effective at month 97 in accordance
with paragraph 4.3 ("Second Adjusted
Rate")
For purposes of calculating Rent payable by Tenant to Landlord during the entire
Term of this Lease (including the Renewal Terms), Landlord and Tenant hereby
agree that the Premises shall be deemed to contain 135,000 square feet, subject
to increase by expansion under paragraph 47 below. Notwithstanding the
foregoing, square footage (and the resultant Rent calculations) shall be based
on the final Plans (measurements to extend to the outside of exterior walls)
once completed.
4.2. FIRST ADJUSTED RATE. The Rent payable by Tenant to
Landlord during months 49-96 of the Lease shall be no less than the Initial Rate
increased (but not decreased) by a factor equal to the cumulative percentage
increases in the U.S. Department of Labor, Bureau of Labor Statistics Consumer
Price Index for All Urban Consumers (Tucson, Arizona, region) (All items;
1982-84 = 100) (the "Consumer Price Index") occurring between the Commencement
Date and the forty-ninth (49th) month of this Lease, not to be less than one
percent (1%) nor to exceed four percent (4%), per year.
4.3. SECOND ADJUSTED RATE. The Rent payable by Tenant to
Landlord during months 97-120 of the Lease shall be no less than the First
Adjusted Rate increased (but not decreased) by a factor equal to the cumulative
percentage increases in
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the Consumer Price Index occurring between the forty-ninth (49th) month of this
Lease and the ninety-seventh (97th) month of this Lease, not to be less than one
percent (1%) nor to exceed four percent (4%), per year.
4.4. RENTAL TAXES. Tenant further agrees to pay to Landlord
with Rent, or at any other time during or after the Term of this Lease within
thirty (30) days after Landlord's demand therefor, at Landlord's election, any
excise, sales or transaction privilege tax imposed or levied by any government
or governmental agency upon Landlord on account of this Lease, Rent paid
hereunder by Tenant or any other payments made or obligations discharged or
benefits conferred by Tenant hereunder, including without limitation, payments
of Tenant's Proportionate Share of the expenses, if any, under paragraph 5, Real
Property Tax under paragraph 6, and the costs of insurance under paragraph 10.
Tax calculations will be subject to applicable changes in local and state tax
ordinances.
4.5. PROPORTIONATE SHARE. Tenant's Proportionate Share of the
expenses under paragraph 5, if any, Real Property Tax under paragraph 6, and the
costs of insurance under paragraph 10, to be paid by Tenant to Landlord, as
additional rent, shall be one hundred percent (100%).
5. COMMON CHARGES; LEGAL COMPLIANCE; ESTIMATED PAYMENTS. Tenant shall
pay to Landlord as additional rent, which shall be due within thirty (30) days
after demand, any fee, charge or other assessment against the Premises or any
portion thereof that is levied or assessed pursuant to any property owners'
association, CC&R's or similar authority, or any fee, charge or other assessment
against the Premises or any portion thereof that represents a fair and equitable
percentage of the cost of repair, maintenance, upkeep, and replacement
(including periodic resurfacing) of any road, street, amenity or common area
directly serving the Premises. Landlord will provide Tenant with prior notice of
the amount and due dates of potential charges under this paragraph as soon as
possible after the information is available to Landlord. Landlord will also make
every reasonable effort to provide Tenant with prior notice of the work to be
done, which shall be reasonable under the circumstances, but Landlord's good
faith failure to give this notice does not relieve Tenant of its payment
obligation for the reasonable fee, charge or other assessment due.
Tenant shall also pay to Landlord as additional rent, which
shall be due within thirty (30) days after demand, the yearly amortization of
capital costs incurred by Landlord for improvements or structural repairs to the
Premises required to comply with any laws, rules or regulations of any
governmental authority having jurisdiction over the Premises which are enacted
after the Commencement Date of this Lease, or with any changes in laws, rules or
regulations of any governmental authority having jurisdiction over the Premises
which existed on the Commencement Date, but which were enacted or come into
effect after the Commencement Date, or the application of either, which shall be
amortized over the useful life of such improvements or repairs, as reasonably
estimated by Landlord.
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Landlord at its option may invoice Tenant on a monthly,
quarterly or other periodic basis for Tenant's Proportionate Share of the
expenses under paragraph 5, if any, Real Property Tax under paragraph 6, and the
cost of insurance under paragraph 10, based on Landlord's good faith estimate of
such charges. Tenant will pay the invoiced sum(s) to Landlord within thirty (30)
days after Tenant receives the invoice(s). Within ninety (90) days after the end
of each calendar or fiscal year, whichever period permits the greatest accuracy
in recapitulation, estimated charges will be reconciled with actual charges, and
within thirty (30) days following Landlord's delivery of a reconciliation to
Tenant, Landlord shall pay to Tenant, or Tenant to Landlord, as the case may be,
the difference between such actual and estimated charges. On reasonable prior
notice to Landlord, Tenant shall have the right to audit Landlord's books with
respect to common charges within twelve (12) months of Tenant's receipt of final
reconciliation. If the audit discloses an overcharge of five percent (5%) or
more, Landlord will pay for Tenant's reasonable audit fees and promptly refund
to Tenant any overcharge. At least thirty (30) days before Tenant takes
possession of any portion of the Premises, Landlord will deliver to Tenant a
good faith estimate prepared by Landlord of the charges Tenant will be required
to pay under this Lease and will deliver to Tenant thereafter from time to time
at periodic intervals, but no more frequently than twice per calendar year, a
revised estimate of the charges.
6. TAXES.
6.1. PAYMENT OF TAXES. Within thirty (30) days after demand by
Landlord, Tenant shall pay to Landlord, as additional rent, Tenant's
Proportionate Share of the Real Property Tax, as defined in paragraph 6.2,
applicable to the Premises during the Term of this Lease. If any such taxes
shall cover any period of time prior to or after the expiration of the Term,
Tenant's share of such taxes shall be equitably prorated to cover only the
period of time within the tax fiscal year during which this Lease shall be in
effect, and Landlord shall reimburse Tenant to the extent required.
6.2. DEFINITION OF "REAL PROPERTY TAX". As used herein, the
term "Real Property Tax" shall include any form of real estate tax or
assessment, general, special, ordinary or extraordinary, commercial rental tax,
improvement bond or bonds, levy or tax (other than inheritance, personal income
or estate taxes) imposed on the Premises by any authority having the direct or
indirect power to tax, including any city, state or federal government, or any
school, agricultural, sanitary, fire, street, drainage or other improvement
district thereof, as against any legal or equitable interest of Landlord in the
Premises, as against Landlord's right to rent or other income therefrom. The
term "Real Property Tax" shall also include any tax, fee, levy, assessment or
charge (i) in substitution of, partially or totally, any tax, fee, levy,
assessment or charge hereinabove included within the definition of "Real
Property Tax," or (ii) the nature of which was hereinbefore included within the
definition of "Real Property Tax", or (iii) which is imposed by reason of this
transaction, any modifications or changes hereto or any transfers hereof. The
term "Real Property Tax" shall also include the reasonable cost to Landlord of
any tax protest conducted by Landlord that results in a decrease in the Real
Property Tax, but only to the extent that Tenant benefits from the decrease. The
term "Real Property Tax" shall not
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include (a) inheritance or estate taxes imposed upon the Premises or any portion
thereof, (b) federal, state or local income taxes imposed upon Landlord, and (c)
late payment charges or other penalties.
6.3. JOINT ASSESSMENT. Until the Premises are a separately
assessed tax parcel, Tenant's liability under paragraph 6 shall be a fair and
equitable proportion of the Real Property Tax for all of the land and
improvements included within the tax parcels assessed, such proportion allocable
to the Premises to be reasonably determined by Landlord from the valuations
assigned in the assessor's work sheets or other reliable information. Landlord
will make every reasonable effort to cause the Premises to become a separately
assessed tax parcel at the earliest possible date.
6.4. PERSONAL PROPERTY TAXES.
(a) Tenant shall pay prior to delinquency all taxes
assessed against and levied upon trade fixtures, furnishings, furniture,
equipment and all other personal property of Tenant contained in the Premises or
elsewhere. When possible, Tenant shall cause such trade fixtures, furnishings,
furniture, equipment and all other personal property to be assessed and billed
separately from the Premises.
(b) If any of Tenant's personal property shall be
assessed with the Premises, Tenant shall pay Landlord the taxes attributable to
Tenant within thirty (30) days after receipt of a written statement from
Landlord setting forth the taxes applicable to Tenant's property, accompanied by
reasonable supportive documentation of the taxes.
6.5. TAX PROTEST. If Tenant desires to have the Real Property
Tax protested, Tenant shall notify Landlord at least sixty (60) days prior to
any deadline to protest the Real Property Tax. At Landlord's option Landlord may
elect to protest the Real Property Tax itself, in which event Landlord shall
diligently pursue such protest, the reasonable cost of which shall be charged to
Tenant and payable to Landlord within thirty (30) days after Landlord's demand
therefor, or Landlord may elect to permit Tenant to protest the Real Property
tax at Tenant's sole expense. If required by law, the Real Property Tax shall be
paid under protest and in the lawfully prescribed manner to preserve the right
of protest. Landlord and Tenant shall cooperate one with the other in
conjunction with any protest of the Real Property Tax. Nothing in this paragraph
shall relieve Tenant of its obligation to pay to Landlord the Real Property Tax
required under this Lease when due. In any event, Landlord shall always have the
right to protest the Real Property Tax at its sole expense.
7. INTENTIONAL DELETION
8. USE; COMPLIANCE WITH LAW; ENVIRONMENTAL; CONDITION.
8.1. USE. The Premises shall be used and occupied only for (a)
general office and telemarketing purposes (and related activities) and (b) such
other
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similar purposes as may be approved by Landlord in writing, which approval shall
not be unreasonably withheld; provided, however, that all uses of the Premises
must be lawful, shall be in compliance with all applicable zoning regulations,
codes, stipulations and conditions, as well as any CC&R's, shall be compatible
with Landlord's overall development, of which the Premises are a part, and shall
not result in, nor have a reasonable likelihood of resulting in, the release or
discharge of contaminants, pollutants or hazardous substances or wastes or give
rise to cleanup or other liabilities or obligations under the environmental
laws. The Premises shall not, however, be used for manufacturing purposes
without the prior written consent of Landlord, which may be withheld in
Landlord's sole discretion for any reason. It is Tenant's responsibility to
comply with all applicable zoning ordinances or other ordinances, regulations,
requirements, stipulations, covenants and restrictions affecting Tenant's use or
occupation of the Premises.
8.2. COMPLIANCE WITH LAW.
(a) Landlord warrants to Tenant that the Premises, in
their state existing on the Commencement Date, but without regard to the
specific use for which Tenant will use the Premises, does not materially violate
any covenants or restrictions of record, or any applicable zoning or building
code in effect on the Commencement Date. In the event it is determined that this
warranty has been materially violated and such violation will adversely affect
Tenant's actual use and enjoyment of the Premises, or put Tenant to expense, of
which Tenant must give Landlord written notice within one (1) year after the
Commencement Date, then it shall be the obligation of Landlord, after written
notice from Tenant, to promptly, at Landlord's sole cost and expense, rectify
any such violation to the extent necessary to facilitate Tenant's use and
enjoyment of the Premises.
(b) Except as provided in paragraph 8.2(a), Tenant
shall, at Tenant's expense, comply promptly with all applicable laws, statutes,
ordinances, rules, regulations, orders, covenants, restrictions of record,
insurance underwriters' requirements, and all other requirements in effect
during the Term or any part of the Term, present or future, regulating Tenant's
operation on and occupancy and use of the Premises. Tenant shall not use the
Premises, including placing loads upon any floor or wall, in a manner for which
the Premises were not designed, engineered or constructed. Tenant shall not
place a load upon any floor or wall exceeding the load per square foot (or other
applicable unit) area which such floor or wall was designed to carry and/or
which is prescribed by any law or regulation in existence during the Term of
this Lease. Tenant shall not use nor permit the use of the Premises in any
manner that will tend to create waste or a nuisance or, if there shall be more
than one tenant in the building containing the Premises, shall offend, annoy or
disturb such other tenants. Tenant shall not cause the Premises to fall out of
compliance with the Americans with Disabilities Act (the Premises at Landlord's
expense shall be in compliance with the Americans with Disabilities Act at the
Commencement Date excepting only any noncompliance resulting from design or
other error caused by Tenant or its own agents or consultants). The Premises,
this Lease and Tenant's use of the Premises shall at all times during this Lease
be subject to and in full compliance with any CC&R's now or later in force
against the Premises.
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8.3. ENVIRONMENTAL.
(a) The terms "Environmental Law" and "Environmental
Laws" include all current and future federal, state and local environmental
laws, statutes, rules, regulations and ordinances, as the same may be amended
and modified from time to time, including but not limited to, common law, the
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"),
the Resource Conservation and Recovery Act ("RCRA"), the Toxic Substances
Control Act ("TSCA"), and also including, but not limited to, any current or
future law, statute, rule, regulation or ordinance (whether federal, state or
local) regulating, protecting, preserving, or concerning the environment
(including air, soil, subsoil, water, ground water, land use or operations).
(b) The terms "Hazardous Substance" and "Hazardous
Substances" include any and all hazardous substances, hazardous wastes,
hazardous materials, regulated substances, toxic substances, pesticides,
fungicides, rodenticides, petroleum products, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, urea formaldehyde foam
insulation, flammable items, explosives, radioactive materials, paints,
solvents, lead, cyanide, DDT, printing inks, acids, ammonia compounds and other
chemical products, PCBs and similar compounds, and any other products or
materials which may have adverse effects on the environment or the health and
safety of persons, and any and all other substances, wastes, pollutants,
contaminants and materials regulated or controlled in any manner by any
Environmental Law.
(c) Tenant shall not cause or permit any Hazardous
Substance to be generated, produced, brought upon, transported to or from, used,
stored, recycled, treated or disposed of in or about the Premises by Tenant, its
agents, employees, contractors, sublessees or invitees without the prior written
consent of Landlord, except for reasonable amounts of standard office products
(e.g., toner) and cleaning materials used in the ordinary course by Tenant, in
all events in full compliance with applicable Environmental Laws. Landlord shall
be entitled to take into account such factors as Landlord may reasonably
determine to be relevant in determining whether to grant or withhold consent to
Tenant's proposed activity with respect to Hazardous Substances, and to require
appropriate safeguards and other protection. Landlord shall not unreasonably
withhold its written consent to Tenant's use of substances which may qualify as
Hazardous Substances but which are incidental to Tenant's use of the Premises
and which can be used safely without risk to the environment and which shall be
used in full compliance with applicable Environmental Laws. Notwithstanding any
provision herein to the contrary, Tenant may use and operate the emergency
generator referred to in paragraph 3.2(d) and the associated diesel engine and
diesel tank so long as such use and operation are in full compliance with any
applicable Environmental Laws. In no event, however, shall Landlord be required
to consent to the installation or use of any storage tanks or containers on the
Premises, or to any use, activity, or practice which may pose an environmental
risk to, and/or result in the release, spill, discharge, or disposal of
Hazardous Substances in, upon, under, or about the Premises, or adjacent
property (including but not limited to the air or the ground water). Tenant
shall not, and Tenant shall
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ensure that Tenant's agents, employees, contractors, sublessees and invitees
shall not, release, spill, discharge, or dispose of any Hazardous Substance in,
upon, under, or about the Premises, or adjacent property (including but not
limited to the air or the ground water). Tenant shall not install nor permit to
be installed on or in the Premises any substance containing asbestos and
determined to be hazardous by any governmental authority or any friable
asbestos. If any such substance or any friable asbestos is determined to be in
or on the Premises as a result of the actions of Tenant, Tenant shall promptly
comply with any applicable Environmental Laws (which may or may not require
removal of the material), at Tenant's expense, and Landlord shall have the same
obligation if asbestos is in or on the Premises as a result of the actions of
Landlord including without limitation construction of the Improvements.
(d) Tenant shall fully comply with, and cause its
agents, employees, contractors, sublessees, and invitees to fully comply with
all Environmental Laws with respect to their use of the Premises. Tenant shall
obtain, comply with, and provide Landlord with copies of all permits required in
connection with Tenant's use of the Premises or by any Environmental Law, if
any.
(e) Landlord or its agents may enter the Premises at
all reasonable times upon not less than forty-eight (48) hours advance notice to
inspect and conduct tests in order to monitor Tenant's compliance with all
applicable Environmental Laws and the provisions of this paragraph 8.3. In the
absence of an emergency Landlord and its agents shall schedule any inspection or
testing of the Premises in a way to minimize interference with Tenant's
operations on the Premises.
(f) Tenant shall promptly notify Landlord of any of
the following:
(i) Any emission, spill, release, or
discharge into the environment of any Hazardous Substances.
(ii) Any correspondence or communication to
Tenant or its agents from any governmental agency or board regarding the
presence or suspected presence of Hazardous Substances on the Premises or
regarding the application of the Environmental Laws to the Premises or Tenant's
activities on the Premises.
(iii) Tenant's knowledge of any circumstances
reasonably likely to give rise to a claim that Tenant, Landlord, or the Premises
may be in violation of the Environmental Laws.
(iv) Any change in Tenant's activities on the
Premises that will change or is reasonably likely to change Tenant's or
Landlord's obligations or liabilities under the Environmental Laws.
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(g) Tenant shall indemnify, defend and hold Landlord
and Landlord's shareholders, directors, officers, partners, members, agents,
employees, and affiliates, and their respective successors and assigns,
harmless, through counsel reasonably acceptable to Landlord, for, from, and
against all costs, expenses, claims (including, without limitation, toxic-tort
or third-party claims), damages, actions, liabilities, suits, investigations,
judgments, impositions, clean-up and remediation costs (including without
limitation, costs of removing transformers or other equipment which contain
polychlorinated biphenyls, underground storage tanks and asbestos or
asbestos-containing materials and the costs of cleaning any contaminated
drywells), "super priority" liens, fines (civil or criminal) and penalties of
every nature, whatsoever, including without limitation, related attorneys' fees
and expenses incurred by Landlord and Landlord's shareholders, directors,
officers, partners, members, agents, employees, and affiliates, and their
respective successors and assigns, directly or indirectly, by reason of Tenant's
breach of any provision of this paragraph 8.3, or by reason of any violation of,
or noncompliance with, or the application of, any Environmental Law, by, or by
reason of the acts or omissions of, Tenant or its agents, employees,
contractors, sublessees, or invitees, or the use and occupation of the Premises
by any of them (but excluding the acts and omissions of Landlord or its agents,
employees, contractors, sublessees, or invitees) in, upon, about, or under the
Premises, including but not limited to a release, spill, discharge or disposal
of a Hazardous Substance. This indemnification by Tenant shall include, without
limitation, all costs of any investigation, monitoring, removal, restoration,
abatement, repair, clean up, detoxification or other ameliorative work required
by any governmental agency or Environmental Law. The provisions of this
paragraph 8.3 shall survive the expiration or termination of this Lease,
termination of Tenant's occupancy of the Premises, or Tenant's abandonment or
vacation of the Premises.
(h) Landlord shall indemnify, defend and hold Tenant
and Tenant's shareholders, directors, officers, partners, members, agents,
employees, and affiliates, and their respective successors and assigns,
harmless, through counsel reasonably acceptable to Tenant, for, from, and
against all costs, expenses, claims (including, without limitation, toxic-tort
or third-party claims), damages, actions, liabilities, suits, investigations,
judgments, impositions, clean-up and remediation costs (including without
limitation, costs of removing transformers or other equipment which contain
polychlorinated biphenyls, underground storage tanks and asbestos or
asbestos-containing materials and the costs of cleaning any contaminated
drywells), "super priority" liens, fines (civil or criminal) and penalties of
every nature, whatsoever, including without limitation, related attorneys' fees
and expenses incurred by Tenant and Tenant's shareholders, directors, officers,
partners, members, agents, employees, and affiliates, and their respective
successors and assigns, directly or indirectly, by reason of a release, spill,
discharge, or disposal of a Hazardous Substance by Landlord or its agents,
employees, subcontractors, or invitees, in, upon, about, or under the Premises
which occurs prior to the Commencement Date, or by reason of Landlord's own
storage or treatment of a Hazardous Substance in, upon, about, or under the
Premises or violation of, or noncompliance with, any Environmental Law, but
excluding the acts and omissions of Tenant or its agents, employees,
contractors, sublessees, or invitees including, without limitation, any release,
spill, discharge or disposal of a Hazardous Substance by Tenant or
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its agents, employees, contractors, sublessees, or invitees. This
indemnification by Landlord shall include, without limitation, all costs of any
investigation, monitoring, removal, restoration, abatement, repair, clean up,
detoxification or other ameliorative work required by any governmental agency or
Environmental Law. The provisions of this paragraph 8.3(h) shall survive the
expiration or termination of this Lease.
(i) Landlord is currently updating a Phase One
Environmental Site Assessment on the Premises and will deliver a copy of the
updated assessment to Tenant once the assessment is available.
8.4. CONDITION OF PREMISES.
(a) Landlord shall deliver the Premises to Tenant
clean and free of debris on the Commencement Date (subject to any damage caused
by Tenant during any early entry under paragraph 3.5) and Landlord further
warrants to Tenant that the plumbing, lighting, electrical, mechanical and life
safety systems, air conditioning, heating and loading doors in the Premises
shall be in good operating condition on the Commencement Date. In the event that
it is determined that this warranty has been violated, unless Tenant has caused
the problem, then it shall be the obligation of Landlord, after receipt of
written notice from Tenant setting forth with specificity the nature of the
violation, which Landlord must receive within one (1) year after the
Commencement Date, to promptly, at Landlord's sole cost, rectify such violation.
Tenant's failure to give such written notice to Landlord within such one-year
period shall cause the conclusive presumption that Landlord has complied with
all of Landlord's obligations hereunder.
(b) Except as otherwise provided in this Lease, Tenant
hereby accepts the Premises in the condition existing as of the Commencement
Date subject to all applicable zoning, municipal, county and state laws,
ordinances and regulations governing and regulating the use of the Premises and
any CC&R's, and accepts this Lease subject thereto and to all matters disclosed
thereby. Tenant acknowledges that neither Landlord nor Landlord's agent has made
any representation or warranty or other promise as to the suitability of the
Premises for the conduct of Tenant's business other than as set forth in the
express provisions of this Lease.
(c) Notwithstanding any provision in this Lease to the
contrary, all punchlist items will be rectified by Landlord within thirty (30)
days after Tenant takes possession of the particular sub-phase or phase in
question, provided that if Landlord requires additional time to rectify any item
that cannot be rectified within thirty (30) days, notwithstanding Landlord's
reasonable diligence, Landlord shall have a reasonable period of time thereafter
to rectify such item. Notwithstanding any provision in this Lease to the
contrary, Tenant will not be liable for material structural latent defects,
which will remain the obligation of Landlord at Landlord's expense during the
Term.
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9. MAINTENANCE, REPAIRS AND ALTERATIONS.
9.1. TENANT'S OBLIGATIONS. Excepting only Landlord's
obligations under paragraph 9.4, Tenant shall maintain, replace, and keep in
good order, condition and repair, the interior and exterior of the Premises, and
every part thereof, (whether or not the need for such repairs occurs as a result
of Tenant's use, the elements or the age of such portion of the Premises)
including, without limiting the generality of the foregoing, the maintenance,
repair and replacement of all plumbing, heating, air conditioning, ventilating,
electrical, lighting facilities and equipment within the Premises, fixtures,
walls (interior), ceilings, floors, windows, doors, plate glass and skylights
located within the Premises, and all loading docks and areas, landscaping,
driveways and parking lots (including periodic resurfacing), fences and signs
located on the Premises. Tenant shall also be responsible for regular painting
of the exterior and the interior of the Improvements. Tenant shall, at all times
throughout the Term, including all renewals and extensions, and at its sole
expense, subject to paragraph 9.4 below and the second paragraph of paragraph 5
above, keep and maintain the interior and the exterior of the Premises in a
clean, safe, orderly, sanitary and first class condition in compliance with all
applicable laws, codes, ordinances, rules and regulations, free of any
accumulation of dirt and rubbish, and Tenant shall arrange its own trash
removal. Tenant shall also be responsible for the routine and ordinary service
and maintenance of the roof (including reasonable preventive care, but excluding
capital repairs/replacements). Tenant is free to use its own professional
management or facilities management in its maintenance of the Premises so long
as the quality thereof is in keeping with Tenant's obligations to Landlord under
this Lease.
9.2. SURRENDER. On the last day of the Term hereof, or on any
sooner termination, Tenant shall surrender the Premises to Landlord in the same
condition as when received, ordinary wear and tear, nonstructural alterations,
approved structural alterations and damage which is Landlord's obligation to
repair excepted, clean and free of damage or debris. Tenant shall repair any
damage to the Premises occasioned by the installation or removal of Tenant's
trade fixtures, furnishings and equipment. Notwithstanding anything to the
contrary otherwise stated in this Lease, Tenant shall leave the air lines, power
panels, electrical distribution systems, lighting fixtures, space heaters, air
conditioning, plumbing, loading doors and fencing on the Premises in good
operating condition.
9.3. LANDLORD'S RIGHTS. If Tenant fails to perform Tenant's
obligations under this paragraph, or under any other paragraph of this Lease,
Landlord may at its option (but shall not be required to) enter upon the
Premises or take other appropriate action after fifteen (15) days prior written
notice to Tenant and Tenant's failure to cure (except in the case of urgency, in
which case no notice shall be required), perform such obligations on Tenant's
behalf and put the same in good order, condition and repair, or take other
appropriate action, and the cost thereof, together with interest thereon at two
points over the Bank of America prime rate announced from time to time, shall
become due and payable on demand as additional rental to Landlord.
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9.4. LANDLORD'S OBLIGATIONS. Notwithstanding paragraph 9.1,
Landlord shall, at its sole cost and expense, repair and maintain only the roof
structure, the structural floor and foundations, and the exterior structural
walls (excluding painting) in good order and repair, except that Tenant shall
repair and pay for any damage thereto caused by Tenant or Tenant's employees,
agents or invitees, or by Tenant's default hereunder. Tenant shall immediately
give Landlord written notice of any defect or need of repair after which
Landlord shall have reasonable opportunity to repair same or cure such defect.
Landlord's liability hereunder shall be limited to the cost of such repairs or
curing such defect. Landlord shall not be liable for damage to Tenant's
improvements, fixtures, inventory and equipment within the Premises. In the
event of failure by Landlord to perform its covenants and obligations to repair
and maintain the Premises under this paragraph 9.4, Tenant may, at its option,
after ten (10) days written notice, or in an emergency, any other notice (verbal
or written) that is reasonable under the circumstances, proceed to make such
repairs or perform such maintenance and be reimbursed by Landlord ten (10) days
after demand by Tenant. If Landlord fails to pay Tenant when due any sum owing
hereunder interest at two points over the Bank of America prime rate announced
from time to time shall accrue on such sum.
Except for the obligations, if any, of Landlord under
paragraph 8.2(a), paragraph 8.3(h) and 8.4(a) (relating to Landlord's warranty),
this paragraph 9.4 and paragraph 11 (relating to destruction of the Premises),
Landlord shall have no obligation, in any manner whatsoever, to repair, replace
and maintain the Premises or the Improvements located thereon or the equipment
therein, whether structural or nonstructural, all of which obligations are
intended to be that of the Tenant under paragraph 9.1 hereof. Tenant expressly
waives the benefit of any statute or law now or hereinafter in effect which
would otherwise afford Tenant the right to make repairs at Landlord's expense or
to terminate this Lease because of Landlord's failure to keep the Premises in
good order, condition and repair, but Tenant's waiver shall not relieve Landlord
of any express contractual repair obligations placed on Landlord by this Lease.
Notwithstanding the foregoing, should Landlord receive any warranties or
guaranties of any materials, equipment or workmanship and such warranty or
guaranty is applicable to portions of the Premises for which Tenant is liable to
repair and maintain as required hereunder, Landlord shall enforce such
warranties to the fullest possible extent.
9.5. ALTERATIONS AND ADDITIONS.
(a) Tenant shall not, without Landlord's prior written
consent, which shall not unreasonably be withheld or delayed, make any
alterations, improvements, additions or Utility Installations in, on or about
the Premises, except for nonstructural alterations not exceeding $50,000 per
alteration and $250,000 in cumulative costs during each year of the Term of this
Lease. In any event, Tenant shall make no change or alteration to the exterior
of the Premises (including without limitation expansion of the building) or to
the structural or mechanical elements of the Premises or add a mezzanine or
increase the useable floor area in the Premises without Landlord's prior written
consent. Such alterations and additions shall not decrease the value of the
Premises, or impair the structural integrity of the Premises. As used in this
paragraph 9.5
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the term "Utility Installation" shall mean air lines, power panels, electrical
distribution systems, space heaters, air conditioning and plumbing. Landlord may
require that Tenant remove any or all of said alterations, improvements,
additions or Utility Installations at the expiration of the Term, and restore
the Premises to their prior condition or, at Landlord's election, reimburse
Landlord for the cost of such restoration. Landlord may require Tenant to
provide Landlord, at Tenant's sole cost and expense, a lien and completion bond
in an amount equal to one and one-half times the estimated cost of any
improvements having a projected cost of $250,000 or more, to insure Landlord
against any liability for mechanic's and materialmen's liens and to insure
completion of the work. Landlord may impose reasonable conditions from time to
time with respect to the improvements to which Landlord may consent, including
without limitation, compliance with all laws, rules, Environmental Laws,
regulations, ordinances and requirements of governments or governmental
agencies, and the time and manner in which such work shall be accomplished.
Should Tenant make any alterations, improvements, additions or Utility
Installations without the prior approval of Landlord, Landlord may require that
Tenant remove any or all of the same. Landlord shall have the right, when
Landlord's consent is required, to approve Tenant's contractor(s), which
approval shall not be unreasonably withheld or delayed. Notwithstanding the
foregoing, Tenant may relocate cubicles within the Improvements without
Landlord's prior consent.
Notwithstanding the foregoing, Tenant may add Tenant's
communications equipment to the roof of the Premises so long as all roof-mounted
equipment strictly complies with applicable CC&R's, laws and building codes.
Tenant will be solely responsible for all structural and non-structural
modifications required to install or remove its roof-mounted equipment. All work
will be done at Tenant's expense in strict compliance with the provisions of
this paragraph 9.5. Landlord shall have the right to have a representative of
Landlord present at all times during such installation or removal. Landlord will
have no responsibility whatsoever for the safety or well being of Tenant's
roof-mounted equipment. Tenant will repair immediately any damage caused to the
roof or other parts of the Premises by virtue of Tenant's installation,
maintenance or removal of its roof-mounted equipment, or Tenant's other acts.
Prior to the commencement of any alterations,
improvements, additions or Utility Installations on the Premises, Tenant shall
inquire of Landlord whether Landlord will require Tenant to remove such
alterations, improvements, additions or Utility Installations at the end of the
Term. Landlord shall promptly advise Tenant whether or not Landlord will require
removal, and if Landlord's advice to Tenant is affirmative, then Tenant shall
remove the alterations, improvements, additions or Utility Installations in
question at the end of the Term at Tenant's sole expense in a manner that does
not damage or destroy the Premises, or if reasonable damage to the Premises is
inevitable, Tenant will take all practicable steps to minimize the damage and,
in any event, will restore the Premises to the condition they were in prior to
removal to the degree feasible.
(b) Any alterations, improvements, additions, or
Utility Installations in, or about the Premises that Tenant shall desire to make
and which requires the consent of the Landlord shall be presented to Landlord in
written form, with proposed
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detailed plans. Landlord shall have thirty (30) days to review the proposed
alterations, improvements, additions or Utility Installations and related
detailed plans. If Landlord shall give its consent, the consent shall be deemed
conditioned upon Tenant acquiring a permit to do so from appropriate
governmental agencies (if legally required), the furnishing of a copy thereof to
Landlord prior to the commencement of the work and the compliance by Tenant of
all conditions of the permit in a prompt and expeditious manner and compliance
by Tenant with all laws, rules, regulations, recommendations and/or requirements
of any government or governmental agency. In no event shall Tenant cause the
Premises to fall out of compliance with such laws, rules, regulations,
recommendations or requirements by virtue of Tenant's alterations, improvements,
additions or Utility Installations.
(c) Tenant shall pay, when due, all claims for labor,
professional services and materials furnished to or for Tenant at or for use in
the Premises, which claims are or may be secured by any mechanic's or
materialmen's lien against the Premises or any interest therein. Tenant shall
give Landlord not less than ten (10) days' notice prior to the commencement of
any work in the Premises, and Landlord shall have the right to post notices of
non-responsibility in or on the Premises as provided by law. If Tenant shall, in
good faith, contest the validity of any such lien, claim or demand, then Tenant
shall, at its sole expense defend itself and Landlord against the same and shall
pay and satisfy any such adverse judgment that may be rendered thereon before
the enforcement thereof against Landlord or the Premises, upon the condition
that if Landlord shall require (but only for disputed claims in excess of
$100,000), Tenant shall furnish to Landlord a surety bond satisfactory to
Landlord in an amount equal to one hundred fifty percent (150%) of such
contested lien claim or demand indemnifying Landlord against liability for the
same and holding the Premises free from the effect of such lien or claim.
(d) Unless Landlord requires their removal, as set
forth in paragraph 9.5(a), all alterations, improvements, additions and Utility
Installations (whether or not such Utility Installations constitute trade
fixtures of Tenant), which may be made on the Premises, shall become the
property of Landlord and remain upon and be surrendered with the Premises at the
expiration of the Term. Notwithstanding the provisions of this paragraph 9.5
(d), Tenant's machinery and equipment, other than that which is affixed to the
Premises so that it cannot be removed without material damage to the Premises,
shall remain the property of Tenant and may be removed by Tenant subject to the
provisions of paragraph 9.2, and subject to Landlord's statutory landlord's lien
rights in the event of Tenant's uncured default under this Lease.
10. INSURANCE AND INDEMNITY.
10.1. LIABILITY INSURANCE.
(a) Tenant shall, at Tenant's expense, obtain and keep
in force during the Term of this Lease and during Tenant's occupancy of the
Premises a policy of comprehensive (broad form) general liability insurance with
a $3,000,000 combined single limit for bodily injury, including death, and
property damage, including but not limited to, contractual liability under this
Lease and personal injury, covering the
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Premises and Tenant's use and occupancy thereof against all claims on account of
bodily injury or death and property damage occurring upon, in or about the
Premises or in connection with the ownership, maintenance use and/or occupancy
of the Premises and all appurtenant areas. Landlord and at Landlord's option any
mortgagee of Landlord shall be named as additional insureds under the policy.
The policy shall insure performance by Tenant of its indemnity provisions
contained in this Lease. The limits of said insurance shall not, however, limit
the liability of Tenant hereunder. Tenant shall comply with all rules, orders,
directions, regulations, requirements and recommendations of the Insurance
Services Office or any similar bodies and shall not do or permit anything to be
done in or upon the Premises or bring upon or keep anything therein which shall
increase the rates of any insurance on the Premises.
(b) Landlord shall, at Landlord's expense, obtain and
keep in force during the Term of this Lease and during Tenant's occupancy of the
Premises a policy of general liability insurance tailored to "lessor's risk" in
such form as may be underwritten in the Tucson-Arizona area with a $3,000,000
combined single limit for bodily injury, including death, and property damage.
10.2. PROPERTY INSURANCE.
(a) Landlord shall obtain and keep in force during the
Term of this Lease a policy or policies of insurance covering loss or damage to
the Premises (including the Tenant Improvements) in the amount of the full
replacement value thereof, excluding foundation, grading and excavation costs,
as the same may exist from time to time, against all perils included within the
classification of fire, extended coverage, vandalism, malicious mischief, flood
(in the event same is required by a lender having a lien on the Premises), and
special extended coverage ("all risk"), but expressly excluding earthquake
coverage. Said insurance shall provide for payment of loss thereunder to
Landlord or to the holders of mortgages or deeds of trust on the Premises.
Landlord shall, in addition, obtain and keep in force during the Term of this
Lease a policy of rental value insurance covering all of Tenant's rent and
additional rent obligations under this Lease for a period of one year, with loss
payable to Landlord. A stipulated value or agreed amount endorsement deleting
the coinsurance provision of the policy shall be procured with said insurance.
If such insurance coverage has a deductible clause, Tenant shall be liable for
such deductible amount up to a maximum of $10,000. Tenant shall pay to Landlord,
as additional rent, Tenant's Proportionate Share of the costs of all insurance
and/or deductible required hereunder within thirty (30) days after demand by
Landlord. Alternatively, Tenant shall have the option of maintaining the "all
risk" insurance described in this paragraph, at Tenant's sole expense, provided
all requirements in this paragraph are met. Tenant shall give Landlord at least
thirty (30) days notice of its intention to do so.
(b) Landlord shall provide Tenant on request, with a
certificate of the property insurance coverages. If Tenant carries the insurance
as permitted under paragraph (a) above, Tenant shall provide certificates of
insurance to Landlord on an annual basis.
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(c) Landlord will not insure Tenant's fixtures or
equipment, or insure Tenant's alterations or improvements and other property
unless such alterations or improvements have become a part of the Premises under
paragraph 9 hereof. Subject to the foregoing, Tenant shall insure its own
fixtures, equipment, alterations and improvements and other property.
10.3. INSURANCE POLICIES. Insurance required hereunder shall be
in companies holding a "General Policyholders Rating" of at least A-, or such
other rating as may reasonably be required by a lender having a lien on the
Premises, as set forth in the most current issue of "Best's Key Rating Guide".
Tenant shall provide to Landlord copies of insurance certificates evidencing the
existence and the amounts of insurance required in paragraph 10.1 upon Tenant's
execution of this Lease. Landlord shall provide to Tenant copies of insurance
certificates evidencing the existence and the amounts of insurance required in
paragraph 10.1.(b) upon Landlord's execution of this Lease and thereafter
provide Tenant with renewal certificates at least thirty (30) days prior to the
expiration of such policy. Landlord shall not do or permit to be done anything
which shall invalidate such insurance policy. No such policy shall be cancelable
or subject to reduction of coverage or scope of coverage except after sixty (60)
days prior written notice to Landlord (or such other amount of notice as shall
be required from time to time by applicable law). Tenant shall, at least thirty
(30) days prior to the expiration of such policies, furnish Landlord and any
mortgagee of Landlord named as an insured with renewal certificates, or Landlord
may, in such event, or in any other event when Tenant has failed to provide
insurance coverage as required hereunder after three (3) business days' notice
thereof to Tenant, at its option, order such insurance and charge the cost
thereof to Tenant, which amount shall be payable by Tenant upon demand. Tenant
shall not do or permit to be done anything which shall invalidate the insurance
policies referred to in this paragraph 10. If Tenant does or permits to be
done anything which shall increase the costs of the insurance policies referred
to in paragraph 10.2, then Tenant shall forthwith upon Landlord's demand
reimburse Landlord for any additional premiums attributable to any act or
omission or operation of Tenant causing such increase in the cost of insurance.
Any insurance maintained by Tenant under this Lease shall be primary and
non-contributory with any insurance coverage separately maintained by Landlord.
Any of Tenant's policies required hereunder may be in
the nature of a "blanket policy" which specifically provides that the amount of
insurance shall not be prejudiced by other losses covered by the policy.
Notwithstanding the provisions of this paragraph 10,
Tenant may elect to self-insure against the types of losses which are required
to be insured against hereunder, excepting the property insurance under
paragraph 10.2.(a); provided that, during any period of such self-insurance
Tenant shall, at all times, maintain a net worth of no less than One Hundred
Million Dollars ($100,000,000). Tenant shall provide Landlord, as well as any
lender, with written notice of Tenant's election to self-insure no less than
sixty (60) days prior to terminating Tenant's third-party insurance and
commencing self-insurance, together with its most recent annual and/or quarterly
report(s), showing that Tenant satisfies the financial threshold set forth in
the preceding sentence,
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and certified by Tenant's chief financial officer (or other officer with
equivalent knowledge and authority) to be a materially accurate reflection of
Tenant's net worth and financial condition as of the date of presentation of
such report(s) to Landlord.
10.4. WAIVER OF SUBROGATION. Tenant and Landlord each hereby
release and relieve the other, and waive their entire right of recovery against
the other for loss or damage arising out of or incident to the perils insured
against under paragraph 10 which perils occur in, on or about the Premises,
whether due to the negligence of Landlord or Tenant or their agents, employees,
contractors and/or invitees but only to the extent that insurance policies then
in effect permit such waiver without impairing coverage and only to the extent
of the coverage provided by such insurance policies. Tenant and Landlord shall,
upon obtaining the policies of insurance required hereunder, give notice to the
insurance carrier or carriers that the foregoing mutual waiver of subrogation is
contained in this Lease.
10.5. TENANT'S INDEMNITY OF LANDLORD. Tenant shall indemnify,
defend, and hold harmless Landlord for, from and against any and all claims
arising from Tenant's or Tenant's sublessee's or assignee's (or their respective
agents, servants, employees or contractors) use or occupancy of the Premises,
or from the conduct of Tenant's business or from any activity, work or things
done, permitted or suffered by Tenant or Tenant's sublessee or assignee (or
their respective agents, servants, employees or contractors) in or about the
Premises unless caused by Landlord's negligence or intentional wrongs or
Landlord's breach of this Lease, and shall further indemnify, defend and hold
harmless Landlord for, from and against any and all claims arising from any
breach or default in the performance of any obligation on Tenant's part to be
performed under the terms of this Lease, including, without limitation, the
provisions of paragraph 8.2, or arising from any negligence of Tenant, or any of
Tenant's agents, contractors or employees, and from and against all costs,
attorneys' fees, expenses and liabilities incurred in the defense of any such
claim or any action or proceeding brought thereon; and in case any action or
proceeding be brought against Landlord by reason of such claim, Tenant upon
notice from Landlord shall defend the same at Tenant's expense by counsel
reasonably satisfactory to Landlord. Tenant, as a material part of the
consideration to Landlord, hereby assumes all risk of damage to property or
injury to persons in, upon or about the Premises arising from any cause,
excepting Landlord's negligence or intentional wrongs, or Landlord's breach of
this Lease, and Tenant hereby waives all claims in respect thereof against
Landlord. Tenant's obligations and liabilities under this paragraph 10.5 shall
survive the expiration or earlier termination of this Lease or termination of
Tenant's occupancy of the Premises. Notwithstanding the foregoing, Tenant shall
have no liability hereunder on account of defects in the Premises not caused by
Tenant or the agents, employees, contractors or invitees of Tenant.
10.6. EXEMPTION OF LANDLORD LIABILITY. Except as expressly
provided to the contrary in Paragraph 10.7, and excepting loss or damage caused
by the negligence of Landlord, Landlord's intentional acts, or Landlord's breach
of this Lease, Tenant hereby agrees that Landlord shall not be liable for injury
to Tenant's business or for any loss of income therefrom or for damage to the
goods, wares, merchandise or other
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property of Tenant, Tenant's employees, invitees, customers or any other person
in or about the Premises; nor shall Landlord be liable for injury to the person
of Tenant, Tenant's employees, agents or contractors, whether such damage or
injury is caused by or results from fire, steam, electricity, gas, water or
rain, or from the breakage, leakage, obstruction or other defects of pipes,
sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures,
or from any other cause, whether damage or injury results from conditions
arising upon the Premises, or from other sources or places.
10.7. LANDLORD'S INDEMNITY OF TENANT. Landlord shall
indemnify, defend, and hold harmless Tenant for, from and against any and all
claims arising from the conduct of Landlord's business or from any activity,
work or things done, permitted or suffered by Landlord (or Landlord's agents,
servants, employees or contractors) in or about the Premises and shall further
indemnify, defend and hold harmless Tenant for, from and against any and all
claims arising from any breach or default in the performance of any obligation
on Landlord's part to be performed under the terms of this Lease, or arising
from any negligence of the Landlord, or any of Landlord's agents, contractors or
employees, and from and against all costs, attorneys' fees, expenses and
liabilities incurred in the defense of any such claim or any action or
proceeding brought thereon; and in case any action or proceeding be brought
against Tenant by reason of such claim, Landlord upon notice from Tenant shall
defend the same at Landlord's expense by counsel reasonably satisfactory to
Tenant. Landlord's obligations and liabilities under this paragraph 10.7 shall
survive the termination of this Lease. Notwithstanding the foregoing, Landlord
shall have no liability hereunder on account of defects in the Premises not
caused by Landlord or the agents, employees, contractors or invitees of
Landlord.
11. DAMAGE OR DESTRUCTION.
11.1. DEFINITIONS.
(a) "Premises Partial Damage" shall mean damage or
destruction to one of the buildings constituting the Improvements to the extent
that the cost of repair is less than 33% of the then replacement cost of such
building.
(b) "Premises Total Destruction" shall herein mean
damage or destruction to one of the buildings constituting the Improvements to
the extent that the cost of repair is 33% or more of the then replacement cost
of such building.
(c) "Insured Loss" shall herein mean damage or
destruction which was caused by an event required to be covered by the insurance
described in paragraph 10, and sufficient insurance proceeds are available for
repairs and restoration free of any claim of the holder of a mortgage or deed of
trust on the Premises.
11.2. PARTIAL DAMAGE - INSURED LOSS. Subject to the provisions
of paragraphs 11.4, 11.5 and 11.6, if at any time during the Term of this Lease
there is damage which is an Insured Loss and which falls into the classification
of Premises Partial Damage, then Landlord shall, unless Landlord's mortgagee or
lender requires otherwise,
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at Landlord's expense, repair such damage (but not Tenant's fixtures, equipment,
alterations or improvements unless the same have become a part of the Premises
pursuant to paragraph 9.5 and Landlord has not advised Tenant that Landlord will
require the removal thereof at the end of the Term) as soon as reasonably
possible and this Lease shall continue in full force and effect. If the
insurance proceeds received by Landlord are not sufficient to effect such
repair, Landlord shall contribute the short-fall and shall make such repairs as
soon as reasonably possible and this Lease shall continue in full force and
effect.
11.3. PARTIAL DAMAGE - UNINSURED LOSS. Subject to the
provisions of paragraphs 11.4, 11.5, and 11.6, if at any time during the Term of
this Lease there is damage which is not an Insured Loss and which falls within
the classification of Premises Partial Damage, unless caused by Tenant's breach
of this Lease or by any other act of Tenant (in which event Tenant shall make
the repairs at Tenant's expense), Landlord may at Landlord's option either (i)
repair such damage as soon as reasonably possible at Landlord's expense, in
which event this Lease shall continue in full force and effect, or (ii) give
written notice to Tenant within thirty (30) days after the date of the
occurrence of such damage of Landlord's intention to cancel and terminate this
Lease, as of the date of the occurrence of such damage. In the event Landlord
elects to give such notice of Landlord's intention to cancel and terminate this
Lease, Tenant shall have the right within ten (10) days after the receipt of
such notice to give written notice to Landlord of Tenant's intention to repair
such damage at Tenant's expense, without reimbursement from Landlord, in which
event this Lease shall continue in full force and effect, and Tenant shall
proceed to make such repairs as soon as reasonably possible. If Tenant does not
give such notice within such ten (10) day period, this Lease shall be canceled
and terminated as of the date of the occurrence of such damage.
11.4. TOTAL DESTRUCTION. If at any time during the Term of
this Lease there is damage, whether or not an Insured Loss (including
destruction required by any authorized public authority), which falls into the
classification of Premises Total Destruction, this Lease shall automatically
terminate as of the date of such total destruction as follows: if the Premises
Total Destruction involves both buildings, this Lease shall terminate entirely;
if the Premises Total Destruction involves only one of the buildings, this Lease
shall terminate only as to the destroyed building and not as to both, in which
event Rent will be reduced in proportion to the square footages of the two
buildings.
11.5. DAMAGE NEAR END OF TERM. If at any time during the last
nine (9) months of the Term of this Lease there is damage, whether or not an
Insured Loss, which falls within the classification of Premises Partial Damage,
Landlord or Tenant may terminate this Lease as of the date of occurrence of such
damage by giving written notice to the other party of the first party's election
to do so within thirty (30) days after the date of occurrence of such damage.
11.6. RECONSTRUCTION. Whether Landlord is required or elects
to repair the damage, Landlord will move as expeditiously as possible to settle
the insurance loss, re-design the damaged Improvements, obtain required permits
and complete the
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repairs. In the event of non-structural damage to the Tenant Improvements,
Landlord shall, within forty-five (45) days after the damage, give Tenant a
tentative schedule of the time required to repair the damaged Improvements and,
within one hundred sixty (160) days after the damage, subject only to Force
Majeure or to Tenant Delay, complete the repairs and deliver the repaired
Improvements to Tenant Ready for Occupancy. In the event of damage to the roof
or structural damage to any of the Improvements, Landlord shall, within
seventy-five (75) days after the damage, give Tenant a tentative schedule of the
time required to repair the damaged Improvements and, within two hundred forty
(240) days after the damage, subject only to Force Majeure or to Tenant Delay,
complete the repairs and deliver the repaired Improvements to Tenant Ready for
Occupancy. Tenant's sole and exclusive remedy, given Landlord's failure to
complete repairs within such time periods, will be termination of this Lease as
to the damaged building in question but not as to the other undamaged (if
applicable) building.
11.7. ABATEMENT OF RENT; TENANT'S REMEDIES.
(a) In the event of damage described in paragraphs
11.2 or 11.3, and Landlord or Tenant repairs or restores the Premises pursuant
to the provisions of this paragraph 11, Rent payable hereunder for the period
during which such damage, repair or restoration continues shall be equitably
abated on the damaged building in proportion to the degree to which Tenant's use
of the building is prevented, except that if seventy-five percent (75%) or more
of a building is damaged, Rent on the entire building shall be abated unless
Tenant elects, in its sole and absolute discretion, to continue to use the
building, in which event Rent shall be equitably abated as otherwise provided
herein. Except for abatement of Rent, if any, Tenant shall have no claim against
Landlord for any loss or damage (unless intentionally caused by Landlord)
including, without limitation, loss of business suffered by reason of any such
damage, destruction, repair or restoration.
(b) If Landlord shall be obligated, or otherwise
elects, to repair or restore the Premises under the provisions of this paragraph
11 and shall not commence such repair or restoration within a reasonable period
of time after the casualty, with due consideration given to adjustment of loss,
plans and governmental approvals, subject to reasonable extension for Tenant
Delay or Force Majeure, or because it is otherwise impracticable for Landlord to
commence repairs within such time period, Tenant may at Tenant's option cancel
and terminate this Lease (but only as to the damaged building at issue) by
giving Landlord written notice of Tenant's election to do so at any time prior
to the commencement of such repair or restoration. In such event this Lease
shall partially terminate as of the date of such notice.
11.8. TERMINATION - ADVANCE PAYMENTS. Upon termination of this
Lease pursuant to this paragraph 11, an equitable adjustment shall be made
concerning advance Rent and any advance payments made by Tenant to Landlord.
11.9. WAIVER. Tenant waives the provisions of any statutes
which relate to termination of leases when leased property is damaged, injured
or destroyed and agrees that such event shall be governed by the terms of this
Lease.
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12. UTILITIES. Tenant shall pay for all water, sewer, gas, heat, light,
power, electricity, telecommunications including telephone and other utilities
and services supplied to the Premises, together with any taxes thereon. If any
such services are not separately metered to Tenant, Tenant shall pay a
reasonable proportion to be determined by Landlord in its reasonable discretion
of all charges jointly metered with other premises. Tenant is solely responsible
for all service deposits required by utilities and providers and if Landlord has
advanced any service deposit (with no obligation to do so) on behalf of Tenant,
Tenant will reimburse Landlord on demand.
13. ASSIGNMENT AND SUBLETTING.
13.1. LANDLORD'S CONSENT REQUIRED. Tenant shall not
voluntarily or by operation of law assign, transfer, mortgage, sublet or
otherwise transfer or encumber all or any part of Tenant's interest in this
Lease or in the Premises, without Landlord's prior written consent, which shall
not be unreasonably withheld or delayed. Landlord and Tenant agree that the
following factors may be considered by Landlord in any reasonable determination
of the appropriateness of Tenant's request to assign or sublet the Premises:
(a) The financial strength of the proposed
subtenant/assignee must demonstrate an ability on the part of the
subtenant/assignee to discharge the Tenant's obligations under this Lease;
(b) The business reputation of the proposed
subtenant/assignee shall not be detrimental to Landlord's development;
(c) The use of the Premises by the proposed
subtenant/assignee must be expressly authorized under paragraph 8 and will not
be more environmentally sensitive than the use thereof by the existing Tenant.
Landlord shall respond to Tenant's request for consent hereunder within ten (10)
days of Tenant's request therefor, and any attempted assignment, transfer,
mortgage, encumbrance or subletting without such consent shall be void, and
shall constitute a breach of this Lease. Any assignee or sublessee (including
without limitation an assignee or surviving entity under the following
subparagraph) must assume and agree to comply with and be bound by all of the
obligations of Tenant under this Lease and under any other written agreement now
or hereafter existing between Landlord and Tenant, such assumption to be in a
form reasonably satisfactory to Landlord. Landlord agrees that it shall not
intentionally and advertently release from liability any assignee or sublessee
who has assumed and agreed to comply with and be bound by all of the provisions
of this Lease.
Notwithstanding the foregoing, Tenant may assign its rights
under this Lease to an affiliate or to an entity into which Tenant may merge,
without Landlord's consent, so long as either (i) Tenant remains liable to
Landlord under this Lease or (ii) the creditworthiness of the affiliate or the
surviving entity, as applicable, is at least equal to that of Tenant in
Landlord's reasonable judgment. An "affiliate" is an entity that controls, is
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controlled by or is under common control with Tenant. Landlord shall have the
right to approve the creditworthiness of the affiliate or the surviving entity,
as applicable, as a condition to any release of Tenant from liability to
Landlord under this Lease, Landlord's approval not to be unreasonably withheld.
Any release of Tenant will be prospective only and will not relieve Tenant from
any liability to Landlord for acts or omissions occurring prior to the date on
which Tenant qualifies for release.
13.2. NO RELEASE OF TENANT. Regardless of Landlord's consent,
no subletting or assignment shall release Tenant from Tenant's obligations past,
present or future, or alter the primary liability of Tenant to pay Rent and to
perform all other obligations to be performed by Tenant hereunder unless Tenant
has expressly been released by Landlord under the terms of paragraph 13.1. The
acceptance of Rent by Landlord from any other person shall not be deemed to be a
waiver by Landlord of any provision hereof. Consent to one assignment or
subletting shall not be deemed consent to any subsequent assignment or
subletting. In the event of default by any assignee of Tenant or any successor
of Tenant, in the performance of any of the terms hereof, Landlord may proceed
directly against Tenant without the necessity of exhausting remedies against
said assignee. Landlord may consent to subsequent assignments or subletting of
this Lease or amendments or modifications to this Lease with assignees of
Tenant, without notifying Tenant, or any successor of Tenant, and without
obtaining its or their consent thereto and such action shall not relieve Tenant
of liability under this Lease, provided, however, that no such amendment or
modification to this Lease shall increase the Rent or other monetary obligations
required hereunder without the prior written consent of Tenant.
13.3. PROFITS. In the event Landlord consents to any such
assignment or subletting, and as a condition thereto, Tenant shall pay to
Landlord fifty percent (50%) of all net profit derived by Tenant from such
assignment or subletting, after first deducting Tenant's reasonable subleasing
expenses including without limitation brokerage commission and alteration
expenses necessary for the assignee's or sublessee's occupancy. For purposes of
the foregoing, profit shall be deemed to include, but shall not be limited to,
the amount of all rent and additional rent payable by such assignee or subtenant
in excess of the Rent set forth in this Lease, and rent adjustments, payable by
Tenant under this Lease. If a part of the consideration for such assignment or
subletting shall be payable other than in cash, the payment to Landlord shall be
in cash or its share of any non-cash consideration based upon the fair market
value thereof. Tenant shall and hereby agrees that it will furnish to Landlord
upon request from Landlord a complete statement, certified by Tenant, setting
forth in detail the computation of all profit derived and to be derived from
such assignment or subletting, such computation to be made in accordance with
generally accepted accounting principles. Tenant agrees that Landlord or its
authorized representatives shall be given access at all reasonable times and
upon not less than two (2) business days' notice to the books, records and
papers of Tenant relating to any such assignment or subletting, and Landlord
shall have the right to make copies thereof. The percentage of Tenant's profit
due Landlord hereunder shall be paid to Landlord within five (5) days of receipt
by Tenant of all payments made from time
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to time by such assignee or subtenant to Tenant. This paragraph 13.3 shall not
apply to assignments or subleases to affiliates.
13.4. ATTORNEY'S FEES. In the event Tenant shall assign or
sublet the Premises or request the consent of Landlord to any assignment or
subletting, then Tenant shall pay Landlord's reasonable attorneys' fees incurred
in connection therewith.
13.5. RECAPTURE. Notwithstanding the foregoing, if Tenant
proposes to assign the Lease or sublet one (1) entire building, Landlord shall
have the right, to be exercised by giving written notice to Tenant within ten
(10) days after receipt of Tenant's request to assign or sublet all or part of
the Premises, to recapture the space described in Tenant's request and such
recapture notice shall, if given, terminate this Lease with respect to the space
described as of the date stated in Tenant's request. Tenant's request shall
state the name and address of the proposed assignee or subtenant and a true and
complete copy of the proposed assignment or sublease shall be delivered to
Landlord with Tenant's request. This paragraph 13.5 shall not apply to
assignments or subleases to affiliates. Rent shall be pro rated if Landlord
recaptures only a portion of the Premises.
14. DEFAULTS; REMEDIES.
14.1. DEFAULTS. The occurrence of any one or more of the
following events shall constitute a material default and breach of this Lease
(an "Event of Default") by Tenant:
(a) The failure by Tenant to make any payment of Rent
or any other payment required to be made by Tenant hereunder, as and when due,
where such failure shall continue for a period of ten (10) days after Tenant's
receipt of written notice of Tenant's failure to make such payment.
(b) The failure by Tenant to observe or perform any
of the covenants, conditions or provisions of this Lease to be observed or
performed by Tenant, other than described in paragraph (a) above or in
paragraphs (c) through (e) below, where such failure shall continue for a period
of thirty (30) days after written notice thereof from Landlord to Tenant;
provided, however, that if the nature of Tenant's default is such that more than
thirty (30) days are reasonably required for its cure, then Tenant shall not be
deemed to be in default if Tenant commenced such cure within said thirty (30)
day period and thereafter diligently prosecutes such cure to completion.
(c) (i) The making by Tenant of any general
arrangement or assignment for the benefit of creditors; (ii) Tenant becomes a
"debtor" as defined in 11 U.S.C. Paragraph 101 or any successor statute thereto
(unless, in the case of a petition filed against Tenant, the same is dismissed
within sixty (60) days); (iii) the appointment of a trustee or receiver to take
possession of substantially all of Tenant's assets located at the Premises or of
Tenant's interest in this Lease, where possession is not restored to Tenant
within sixty (60) days; or (iv) the attachment, execution or other judicial
seizure of
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substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such seizure is not discharged within sixty (60)
days; provided, however, in the event that any provision of this paragraph
14.1(d) is contrary to any applicable law, such provision shall be enforceable
only to the fullest extent permitted by law.
(d) The discovery by Landlord that any financial
statement or other financial information given to Landlord by Tenant, any
assignee of Tenant, any successor in interest of Tenant (including without
limitation an entity surviving a merger with Tenant) or any guarantor of
Tenant's obligation hereunder, and any of them, was materially false or
materially misrepresented any item or condition.
(e) Tenant shall do or permit anything to be done
which creates a lien upon the Premises which is not paid, discharged or bonded
around within thirty (30) days after such lien is created or recorded.
14.2. REMEDIES. In the event of any such Event of Default by
Tenant, Landlord may at any time thereafter, with or without further notice or
demand or termination of this Lease, and without waiving or limiting Landlord in
the exercise of any right or remedy which Landlord may have under this Lease or
otherwise at law or in equity by reason of such Event of Default exercise any
one or more of the following remedies:
(a) Re-enter the Premises and eject all persons
therefrom. Retain or take possession of any property belonging to Tenant upon
the Premises pursuant to Landlord's statutory landlord lien rights. Such
property may be removed and stored in a public warehouse or elsewhere at the
cost of and for the account of Tenant, and Landlord shall (unless negligent) in
no event be liable for any damage or loss thereto; or
(b) Lock the doors to and otherwise secure the
Premises and exclude Tenant and all other persons therefrom (except those
authorized by Landlord in its sole and absolute discretion); or
(c) Institute suit against Tenant to collect each
installment of rent or other sum as it becomes due or to enforce any other
obligation under this Lease; or
(d) With or without terminating the Lease, terminate
Tenant's right to possession of the Premises by any lawful means, judicially or
nonjudicially, in which case Tenant shall immediately surrender possession of
the Premises to Landlord and Landlord shall have the right to reenter the
Premises and remove all persons and property therefrom using all force
reasonably necessary for this purpose. In such event, or in the event of
Landlord's pursuit of its other rights and remedies, Landlord shall be entitled
to recover from Tenant all damages incurred by Landlord by reason of Tenant's
default including, but not limited to, the cost of recovering possession of the
Premises; the cost to Landlord of designing, engineering and constructing for
Tenant any tenant improvements or other features of the Improvements
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that are of a specialized or non-general nature not ordinarily included in a
general-use building; expenses of reletting, including necessary renovation and
alteration of the Premises and the removal of special improvements made for
Tenant, reasonable attorney's fees, advertising expenses, the costs of
protecting and caring for the Premises while vacant, the cost of removing and
storing Tenant's property; any real estate commission actually paid; the worth
at the time of award by the court having jurisdiction thereof of the amount by
which the unpaid Rent for the balance of the Term after the time of such award
exceeds the amount of such rental loss for the same period that Tenant proves
could be reasonably avoided; and that portion of any leasing commission paid by
Landlord pursuant to paragraph 16 applicable to the unexpired Term of this
Lease. The foregoing amounts shall be and become immediately due and payable
from Tenant to Landlord upon the occurrence of an Event of Default, at
Landlord's election, which may be exercised, upon two (2) business days notice
to Tenant, but this sentence shall not operate to relieve Landlord from the
giving of any notice required under paragraph 14.1.
(e) Maintain Tenant's right to possession in which
case this Lease shall continue in effect whether or not Tenant shall have
abandoned the Premises. In such event Landlord shall be entitled to enforce all
of Landlord's rights and remedies under this Lease, including, without
limitation, the right to recover Rent as it becomes due hereunder and any other
damages incurred by Landlord from time to time. Notwithstanding that Landlord
shall have maintained Tenant's right to possession or shall not have terminated
the Lease for an Event of Default, Landlord may at any time thereafter, upon
notice to Tenant, terminate the Lease and/or Tenant's right to possession for
such prior Event of Default.
(f) Pursue any other remedy now or hereafter
available to Landlord under the laws or judicial decisions of the state wherein
the Premises are located. Unpaid installments of Rent and other unpaid monetary
obligations of Tenant under the terms of this Lease shall bear interest from the
date due at the rate of two (2) points over the announced prime rate of Bank of
America in existence from time to time.
(g) No such re-entry or taking of possession or other
remedial action by Landlord shall be construed as an election on Landlord's part
to terminate or surrender this Lease unless a written notice of such intention
is then or thereafter served on Tenant.
(h) No failure by Landlord to insist upon the strict
performance of any covenant, agreement, term or condition of this Lease or to
exercise any right or remedy consequent upon a breach thereof, and no acceptance
of full or partial Rent during the continuance of any such breach, shall
constitute a waiver of any such breach or of such covenant, agreement, term or
condition. No covenant, agreement, term or condition of this Lease to be
performed or complied with by Tenant, and no breach thereof, shall be waived,
altered, modified or terminated except by written instrument executed by
Landlord. No waiver of any breach shall affect or alter this Lease, but each and
every covenant, agreement, term and condition of this Lease shall continue in
full force and effect with respect to any other then existing or subsequent
breach thereof.
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(i) If Tenant breaches any of the covenants,
agreements, terms or conditions contained in this Lease, Landlord shall be
entitled to enjoin such breach or threatened breach, and to invoke any right and
remedy allowed at law or in equity or by statute or otherwise as though
re-entry, summary proceedings and other remedies were not provided for in this
Lease.
14.3. DEFAULT BY LANDLORD.
(a) Landlord shall not be in default under this Lease
unless Landlord fails to perform obligations required of Landlord within a
reasonable time, but in no event later than thirty (30) days after written
notice by Tenant to Landlord and to the holder of any first mortgage or deed of
trust covering the Premises whose name and address shall have theretofore been
furnished to Tenant in writing, specifying wherein Landlord has failed to
perform such obligation; provided, however, that if the nature of Landlord's
obligation is such that more than thirty (30) days are required for performance
then Landlord shall not be in default if Landlord commences performance within
such thirty (30) day period and thereafter diligently prosecutes the same to
completion. Subject to Tenant's rights under paragraph 9.4, which shall be
unaffected by the terms of this paragraph 14.3, Tenant shall have the right as
its sole and exclusive remedy to seek specific performance of this Lease and sue
for any direct out-of-pocket expenses it incurs as a result of Landlord's
material default in the event Landlord and the holder of any first mortgage or
deed of trust covering the Premises fail to cure within the grace periods
allotted hereunder a material default of Landlord under this Lease.
(b) LANDLORD AND TENANT, EACH BEING FULLY INFORMED BY
THEIR RESPECTIVE COUNSEL OF THE LEGAL CONSEQUENCES, WAIVE THE RIGHT TO TRIAL BY
JURY.
14.4. LATE CHARGES. Tenant hereby acknowledges that late
payment by Tenant to Landlord of Rent and other sums due hereunder will cause
Landlord to incur costs not contemplated by this Lease, the exact amount of
which will be extremely difficult to ascertain. Such costs include, but are not
limited to, processing and accounting charges, and late charges which may be
imposed on Landlord by the terms of any mortgage or trust deed covering the
Premises. Accordingly, if any installment of Rent or any other sum due from
Tenant shall not be received by Landlord or Landlord's designee within fifteen
(15) days after such amount shall be due, then, without any requirement for
notice to Tenant, Tenant shall pay to Landlord a late charge equal to five
percent (5%) of such overdue amount. The parties hereby agree that such late
charge represents a fair and reasonable estimate of the costs Landlord will
incur by reason of late payment by Tenant. Acceptance of such late charge by
Landlord shall in no event constitute a waiver of Tenant's default with respect
to such overdue amount, nor prevent Landlord from exercising any of the other
rights and remedies granted hereunder. In the event that a late charge is
payable hereunder, whether or not collected, for three (3) consecutive
installments of Rent, then Rent shall automatically become due and payable
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quarterly in advance, rather than monthly, notwithstanding paragraph 4 or any
other provision of this Lease to the contrary.
Notwithstanding the foregoing, no late charge will be
assessed against Tenant the first three times any payment is late so long as the
payments are received by Landlord within five (5) business days after Landlord's
notice to Tenant of Tenant's late payment(s).
14.6. IMPOUNDS. In the event that a late charge is payable
hereunder, whether or not collected, three or more times during a given twelve
(12) month period under the terms of this Lease, Tenant shall pay to Landlord,
if Landlord shall so request, in addition to any other payments required under
this Lease, a monthly advance installment, payable at the same time as the
monthly Rent, as estimated by Landlord, for Real Property Tax and insurance
expenses on the Premises which are payable by Tenant under the terms of this
Lease. Such fund shall be established to insure payment when due, before
delinquency, of any or all such Real Property Taxes and insurance premiums. If
the amount paid to Landlord by Tenant under the provisions of this paragraph are
insufficient to discharge the obligations of Tenant to pay such Real Property
Taxes and insurance premiums as the same become due, Tenant shall pay to
Landlord, upon Landlord's demand, such additional sums necessary to pay such
obligations. All moneys paid to Landlord under this paragraph may be
intermingled with other moneys of Landlord and shall not bear interest. In the
event of a default in the obligations of Tenant to perform under this Lease,
then any balance remaining from funds paid to Landlord under the provisions of
this paragraph may, at the option of Landlord, be applied to the payment of any
monetary default of Tenant in lieu of being applied to the payment of Real
Property Tax and insurance premiums and Tenant shall still be liable for and pay
promptly upon demand the Real Property Tax and insurance premiums required under
this Lease.
14.6. DISPUTE RESOLUTION. Any dispute, controversy or claim
arising out of or relating to this Lease, or the breach thereof, including, but
not limited to, any action sounding in tort or breach of any duty or obligation,
but excluding any claim or remedy for equitable relief and excluding any claim
or remedy for Rent or additional rent or other monetary sums owed, will be
resolved by arbitration. The arbitration will be conducted under the auspices of
the American Arbitration Association in accordance with the Federal Arbitration
Act (9 U.S.C. Section 1 et seq.). The arbitrators will conduct the hearing and
determine the matter in accordance with the Commercial Rules of the American
Arbitration Association. Any controversy in interpretation or enforcement, or
whether an issue is arbitrable, must be determined by the arbitrators. Each
party is entitled to present evidence and argument to the arbitrators, and to be
represented by counsel. Anything in this Section to the contrary
notwithstanding, the arbitrators have the right only to interpret and apply the
terms, covenants, agreements, provisions, conditions or limitations of this
Lease, and may not change any such terms, covenants, agreements, provisions,
conditions or limitations or deprive any party to this Lease of any right or
remedy expressly or impliedly provided in this Lease or by law or equity.
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15. CONDEMNATION. If the Premises or any portion is taken under the
power of eminent domain, or sold under the threat of the exercise of said power
(all of which are herein called "condemnation"), this Lease shall terminate as
to the part so taken as of the date the condemning authority takes title or
possession, whichever first occurs. If only one of the buildings is taken by
condemnation, this Lease shall terminate only as to the building taken and not
as to both, in which event Rent will be reduced in proportion to the square
footages of the two buildings. If 33% or more of the floor area of either
building is taken by condemnation, either Landlord or Tenant shall have the
right to terminate this Lease as to such building but not as to the other as of
the date the condemning authority takes title or possession, whichever first
occurs, upon giving written notice of such election within ten (10) days after
Landlord shall have given Tenant written notice of such taking (or in the
absence of such notice, within ten (10) days after the condemning authority
shall have taken title or possession, whichever first occurs). In the event of a
termination resulting from such a taking, both Landlord and Tenant shall be
released from further liability under the Lease as to the building involved. If
Landlord or Tenant do not terminate this Lease in accordance with the foregoing,
this Lease shall remain in full force and effect as to the portion of the
building remaining, except that Rent shall be reduced in the proportion that the
floor area taken bears to the total floor area of the building in question. If
the nature, location or extent of any proposed taking or appropriation affecting
the Premises is such that Landlord elects in good faith to demolish all or
substantially all of either building, then Landlord shall have the right to
terminate this Lease as to the affected building upon giving notice of
termination to Tenant at any time after such condemnation. In the event of such
termination, both Landlord and Tenant shall be released from any further
liability under this Lease as to the building or buildings, as applicable, that
is (are) terminated.
Any award for the condemnation of all or any part of the
Premises (including all Tenant Improvements) shall be the property of Landlord,
whether such award shall be made as compensation for diminution in value of the
leasehold or for the taking of the fee, or as severance damages; provided,
however, that Tenant shall be entitled to pursue against the condemning
authority but not against Landlord any award to which Tenant may be entitled
from such condemning authority for loss of or damage to Tenant's trade fixtures,
removable personal property and alterations and improvements paid for by Tenant.
If this Lease is terminated, an equitable adjustment shall be made within a
reasonable period of time concerning advance rent and any advance payments made
by Tenant to Landlord. In the event that this Lease is not terminated by reason
of such condemnation, Landlord shall to the extent of severance damages received
by Landlord, free of any claim of the holder of a mortgage or deed of trust on
the Premises, in connection with such condemnation, repair any damage to the
Premises caused by such condemnation except to the extent that Tenant has been
reimbursed therefor by the condemning authority. Tenant hereby waives any
statutory rights of termination which may arise by reason of any partial taking
of the Premises by condemnation.
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16. BROKER'S FEE.
(a) DMI Estate Properties, Inc. ("DMI"), a licensed real
estate broker in the State of Arizona, represents Landlord with respect to this
Lease transaction. DMI, on behalf of Landlord, will enter (or has entered) into
a commission agreement with PICOR and CB Commercial. Landlord shall pay to PICOR
and to CB Commercial a real estate brokerage fee per the terms of such
commission agreement. Neither the broker named above nor any other real estate
agent, salesperson, finder or broker shall be deemed or considered as a third
party beneficiary of this paragraph. Landlord and Tenant may alter, amend or
modify this Lease or any related document without the consent of any such
broker, salesperson, agent or finder. Excepting Landlord's obligation to PICOR
and to CB Commercial, Landlord and Tenant each hereby agree to indemnify and
defend the other from and against any claim for commission or brokerage or
finders fees from any party claiming all or part of same arising out of a
relationship with or through the indemnifying party and the indemnifying party
shall defend any claim or action for a commission or fee by counsel acceptable
to the indemnified party promptly upon notice from the indemnified party.
17. ESTOPPEL CERTIFICATE; COOPERATION WITH LANDLORD'S LENDERS;
FINANCIAL INFORMATION.
(a) Tenant shall at any time upon not less than fifteen (15)
days prior written notice from Landlord execute, acknowledge and deliver to
Landlord a statement in writing (i) certifying, if true, that this Lease is
unmodified and in full force and effect (or, if modified, stating the nature of
such modifications and certifying that this Lease, as so modified, is in full
force and effect) and the date to which Rent and other charges are paid in
advance, if any; (ii) acknowledging that there are not, to Tenant's knowledge,
any uncured defaults on the part of Landlord hereunder, or specifying such
defaults if any are claimed; (iii) acknowledging that the Premises are in the
condition called for in the Lease and the Improvements have been satisfactorily
completed, or if not, then specifying why they are not; (iv) acknowledging that
Tenant has unconditionally accepted the Premises, is in possession thereof, and
no defense to the Lease enforcement exists, or if such is not the case, then
specifying why; and (v) agreeing to provide any Landlord mortgagee or lender
with reasonable opportunity to cure defaults by the Landlord, Any such statement
may be conclusively relied upon by any prospective purchaser or encumbrancer of
the Premises, who, at Landlord's request, shall be co-addressees of the
statement.
(b) At Landlord's option, Tenant's failure to deliver such
statement within such time shall be a material breach of this Lease or shall be
conclusive upon Tenant (i) that this Lease is in full force and effect, without
modification except as may be represented by Landlord, (ii) that there are no
uncured defaults in Landlord's performance, (iii) that not more than one month's
rent has been paid in advance; (iv) that the Premises have been satisfactorily
completed by Landlord and that Tenant is in possession thereof; (v) that no
defenses exist to the enforcement of the Lease; and (vi) that Tenant agrees to
be bound by provision (v) in paragraph 17(a) above.
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(c) if Landlord desires to finance, refinance or sell the
Premises, or any part thereof, or if Landlord's lender requires financial
information on Tenant, Tenant hereby agrees to deliver to any lender or
purchaser designated by Landlord such financial statements of Tenant as may be
reasonably required by such lender or purchaser. Such statements shall be
limited to Tenants past three (3) year's annual reports and/or any quarterly
reports (unaudited) issued during such period. All such financial statements
shall be received by Landlord and such lender or purchaser in confidence and
shall be used only for the purposes herein set forth.
(d) Tenant hereby represents and warrants to Landlord that all
balance sheets, statements of profit and loss and other financial data furnished
by Tenant and any guarantor to Landlord (the "Financial Information") prior to
the execution of this Lease fairly present the financial condition of Tenant and
such guarantor as of the dates thereof, and the results of its operations for
the periods for which the same are furnished; and there has been no change in
the assets, liabilities or financial condition of Tenant and such guarantor from
that set forth in the Financial Information, other than changes in the ordinary
course of business, none of which changes has been materially adverse to Tenant
and such guarantor. The foregoing representations and warranties shall apply
equally to all financial information furnished by Tenant and any guarantor to
Landlord after the execution of this Lease.
Tenant hereby acknowledges that the Financial Information is a
material inducement to Landlord's entering into this Lease with Tenant.
18. LANDLORD'S LIABILITY. The term "Landlord" as used herein shall mean
only the owner or owners at the time in question of the fee title or a Tenant's
interest in a ground lease of the Premises. In the event of any transfer of such
title or interest, Landlord herein named (and in case of any subsequent
transfers then the grantor) shall be relieved from and after the date of such
transfer of all liability as respects Landlord's obligations thereafter to be
performed, provided that any funds in the hands of Landlord or the then grantor
at the time of such transfer, in which Tenant has an interest, shall be
delivered to the grantee. The obligations contained in this Lease to be
performed by Landlord shall, subject as aforesaid, be binding on Landlord's
successors and assigns only during their respective periods of ownership.
Tenant agrees to look solely to Landlord's interest in the
Premises and the proceeds thereof for the recovery of any judgment from Landlord
or the payment of any obligation, liability or claim under, arising out of or
relating to this Lease, it being hereby agreed that except to the extent of
Landlord's interest in the Premises and the proceeds thereof, Landlord, any
assets of Landlord, or if Landlord is a partnership, its partners whether
general or limited, or if Landlord is a corporation, Landlord, its directors,
officers or shareholders, or if Landlord is a limited liability company,
Landlord and its members shall never be liable for any judgments, claims,
obligations or liabilities under, arising out of, or relating to this Lease.
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19. SEVERABILITY. The invalidity of any provision of this Lease as
determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.
20. INTEREST ON PAST-DUE OBLIGATIONS. Except as expressly herein
provided, any amount due to Landlord not paid when due shall bear interest from
the date due at the rate of two points over the prime rate of Bank of America
announced from time to time. Payment of such interest shall not excuse or cure
any default by Tenant under this Lease, provided, however, that interest shall
not be payable on late charges incurred by Tenant nor on any amounts upon which
late charges are paid by Tenant. If Tenant's default is subject to late charge,
Landlord may charge interest or impose the late charge as it sees fit, but may
not impose both on the same defaulted obligation. The reciprocal is true: Any
amount Landlord owes to Tenant if not paid when due shall bear interest from the
date due at the rate of two points over the prime rate of Bank of America
announced from time to time.
21. TIME OF ESSENCE. Time is of the essence of each and every
obligation and duty under this Lease.
22. ADDITIONAL RENT. Any monetary obligation of Tenant to Landlord
under the terms of this Lease shall be deemed to be additional rent and shall be
collectible as such.
23. INCORPORATION OF PRIOR AGREEMENTS; DISCLAIMER OF REPRESENTATIONS
AND WARRANTIES; AMENDMENTS. This Lease contains all agreements of the parties
with respect to the Premises. No prior agreement, representation or
understanding, whether oral or written, pertaining to any such matter shall be
effective. Landlord hereby disclaims all representations and warranties, express
or implied, and all covenants, promises, and understandings, concerning the
condition, suitability, or habitability of the Premises, excepting only those
which are set forth in this Lease explicitly. This Lease may be modified in
writing only, signed by the parties in interest at the time of modification.
Tenant hereby acknowledges that no real estate broker or agent or any agent or
employee of Landlord made any oral or written warranties or representations to
Tenant relative to the condition or use by Tenant of the Premises.
24. NOTICES. Any notice or demand required or permitted to be given
hereunder shall be in writing and may be given by personal delivery (which may
include overnight courier, and facsimile transmission followed by a mailed copy)
or by certified mail, postage prepaid, return receipt requested, and if given
personally or by mail, shall be deemed sufficiently given if addressed to Tenant
or to Landlord at the address noted below the signature of the respective
parties, as the case may be. Either party may by notice to the other specify a
different address for notice purposes. Any notice shall be deemed received upon
personal delivery or three (3) days after deposit into U.S. Mail.
25. WAIVERS. No waiver by Landlord of any provision hereof shall be
deemed a waiver of any other provision hereof or of any subsequent breach by
Tenant of
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the same or any other provision. Landlord's consent to, or approval of, any act
shall not be deemed to render unnecessary the obtaining of Landlord's consent to
or approval of any subsequent act by Tenant. The acceptance of rent hereunder by
Landlord shall not be a waiver of any preceding breach by Tenant of any
provision hereof, other than the failure of Tenant to pay the particular rent so
accepted, regardless of Landlord's knowledge of such preceding breach at the
time of acceptance of such rent. The reciprocal is true: No waiver by Tenant of
any provision hereof shall be deemed a waiver of any other provision hereof or
of any subsequent breach by Landlord of the same or any other provision.
26. RECORDING; CONFIDENTIALITY. If Tenant requests, the parties shall
execute a short-form memorandum of lease in recordable form setting forth the
date of the Lease, the names of the parties, a description of the premises, the
length of the term (and any renewal provisions), but in no event shall such
short-form memorandum of lease set forth the rental rate or any other
"Proprietary" information belonging to Landlord.
Landlord and Tenant agree to maintain to the greatest degree
practicable the confidentiality of this transaction. Tenant shall control the
communication process relative to communications to the community and the press
including press releases. Tenant will coordinate these communications with
Landlord.
27. HOLDING OVER. If Tenant, with Landlord's consent, remains in
possession of the Premises or any part thereof after the expiration of the Term
hereof and without executing a new lease therefor, such occupancy shall be a
tenancy from month to month at a rental in the amount of 125% of the rent paid
or payable during the last month of the Term of this Lease plus all other
charges payable hereunder and upon all the other provisions of this Lease
pertaining to the obligations of Tenant, but all options and rights of first
refusal, if any, granted under the terms of this Lease shall be deemed
terminated and be of no further effect during such month-to-month tenancy. If
Tenant, without Landlord's express written consent, remains in possession of the
Premises or any part thereof after expiration of the Term hereof, Landlord may
re-enter and take possession of the Premises and have all other remedies set
forth in Paragraph 14.2, provided that in addition to such remedies (and not in
lieu thereof), Tenant shall pay for each day of occupancy after expiration of
the Term hereof a sum equal to 150% of the monthly rent for the last month of
the Term prorated on a daily basis based upon a thirty day month.
Notwithstanding the foregoing, if Landlord and Tenant are
involved after the end of the Term in good faith negotiations that ultimately
result in an extension of the Term, the Rent payable during the period of
negotiation shall be at the rate payable during the last month of the Term
without increase during the period of good faith negotiation.
28. CUMULATIVE REMEDIES. No remedy or election hereunder shall be
deemed exclusive but shall, wherever possible, be cumulative with all other
remedies hereunder or at law or in equity.
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29. COVENANTS AND CONDITIONS. Each provision of this Lease performable
by Tenant shall be deemed both a covenant and a condition.
30. BINDING EFFECT; CHOICE OF LAW. Subject to any provisions hereof
restricting assignment or subletting by Tenant and subject to the provisions of
paragraph 18, this Lease shall bind the parties, their personal representatives,
successors and assigns. This Lease shall be governed by the laws of the State of
Arizona.
31. SUBORDINATION.
(a) This Lease, at Landlord's option, shall be subordinate to
any ground lease, mortgage, deed of trust, or any other hypothecation or
security hereafter placed upon the Premises and to any and all advances made on
the security thereof and to all renewals, modifications, consolidations,
replacements and extensions thereof. If any mortgagee, deed of trust beneficiary
or trustee, or ground lessor shall elect to have this Lease prior to the lien of
its mortgage, deed of trust or ground lease, and shall give written notice
thereof to Tenant, this Lease shall be deemed prior to such mortgage, deed of
trust, or ground lease, whether this Lease is dated prior or subsequent to the
date of said mortgage, deed of trust or ground lease or the date of recording
thereof.
(b) Tenant agrees to execute any documents reasonably required
to effectuate an attornment, a subordination or to make this Lease prior to the
lien of any mortgage or deed of trust covering the Premises, provided that
Tenant shall concurrently receive a nondisturbance agreement from such lender in
form reasonably acceptable to Tenant. Tenant's failure to execute such documents
within fifteen (15) days after written demand shall constitute an Event of
Default by Tenant hereunder.
32. ATTORNEY'S FEES. If either party named herein brings an action to
enforce the terms hereof or declare rights hereunder, the prevailing party in
such action, on trial or appeal, shall be entitled to its reasonable attorneys'
fees to be paid by the losing party as fixed by the court.
33. LANDLORD'S ACCESS. Landlord and Landlord's agents shall have the
right to enter the Premises at all reasonable times and (unless an emergency)
upon not less than forty-eight (48) hours' notice and from time to time for the
purpose of inspecting the same, showing the same to prospective purchasers,
lenders, or tenants (only during the last one hundred eighty (180) days of the
Term), and making such alterations, repairs, improvements or additions to the
Premises as Landlord may deem necessary or desirable. Landlord may at any time
place on or about the Premises any ordinary "For Sale" signs and Landlord may at
any time during the last one hundred eighty (180) days of the Term hereof place
on or about the Premises any ordinary "For Lease" signs, all without rebate of
rent or liability to Tenant. If Landlord is placing "For Sale" signs on or about
the Premises, Landlord will consult with Tenant in good faith to find a
reasonable way to avoid giving the impression that Tenant is selling its
business or going out of business.
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34. AUCTIONS. Tenant shall not conduct, nor permit to be conducted,
either voluntarily or involuntarily, any auction upon the Premises without first
having obtained Landlord's prior written consent.
35. SIGNS. Tenant shall not place any sign upon the exterior of the
Premises without Landlord's prior written consent, which shall not be
unreasonably withheld or delayed. Tenant's signs must comply with applicable
CC&R's and sign regulations. Entry monumentation will be constructed along
Tucson Boulevard providing Tenant with identification. It is expected that
Country Club Commerce Center will also provide Tenant with signage on the entry
monument. Tenant will also be provided additional signage at the entry to the
Premises off the planned private roadway that will connect the Premises with
Tucson Boulevard. All signage and monumentation shall comply with applicable
CC&R's and sign regulations.
36. MERGER. The voluntary or other surrender of this Lease by Tenant,
or a mutual cancellation thereof, or a termination by Landlord, shall not work a
merger, and shall, at the option of Landlord, terminate all or any existing
subtenancies or may, at the option of Landlord, operate as an assignment to
Landlord of any or all of such subtenancies.
37. INTENTIONAL DELETION
38. QUIET POSSESSION. Upon Tenant paying Rent for the Premises and
observing and performing all of the covenants, conditions and provisions on
Tenant's part to be observed and performed hereunder, Tenant shall have quiet
possession of the Premises for the entire Term hereof against the acts of
Landlord, subject to all of the provisions of this Lease. The individuals
executing this Lease on behalf of Landlord represent and warrant to Tenant
that they are fully authorized and legally capable of executing this Lease on
behalf of Landlord and that such execution is binding upon all parties holding
an ownership interest in the Premises.
39. OPTIONS.
39.1. DEFINITION. If Landlord has granted Tenant any option or
right of first refusal in the Addendum, as used in this paragraph the word
"Option(s)" shall have the meanings set forth in the Addendum.
39.2. OPTIONS PERSONAL. Each Option granted to Tenant in this
Lease is personal to Tenant and any affiliate of Tenant (as defined in paragraph
13.1) and any entity into which Tenant may merge, and may not be exercised or be
assigned, voluntarily or involuntarily, by or to any other person or entity. No
assignee or sublessee of Tenant's rights under this Lease shall have the right
to exercise any Option granted under this Lease. The Options granted to Tenant
are not assignable separate and apart from this Lease. Options granted to
Tenant, if any, shall be granted only in the Addendum. Notwithstanding anything
in paragraph 39 to the contrary, nothing in paragraph 39 is intended to or shall
be deemed to grant to Tenant any Options.
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39.3. MULTIPLE OPTIONS. In the event that Tenant has any
multiple options to extend or renew this Lease a later Option cannot be
exercised unless the prior Option to extend or renew this Lease has been so
exercised.
39.4. EFFECT OF DEFAULT ON OPTIONS.
(a) Tenant shall have no right to exercise an
Option, notwithstanding any provision in the grant of Option to the contrary,
(i) during the time commencing from the date Landlord gives to Tenant a notice
of default pursuant to paragraph 14.1 and continuing until the default alleged
in such notice of default is cured, or (ii) at any time after any other Event of
Default described in paragraph 14.1, or (iii) in the event that Landlord has
given to Tenant three or more notices of default under paragraph 14.1, or Tenant
has committed an Event of Default three or more times under paragraph 14.1,
whether or not the Events of Default are cured, in each case during the twelve
(12) month period prior to the time that Tenant intends to exercise the Option.
(b) The period of time within which an Option may be
exercised shall not be extended or enlarged by reason of Tenant's inability to
exercise an Option because of the provisions of the foregoing paragraph. An
Option and all rights of Tenant thereunder shall terminate upon the termination
or expiration of this Lease or upon the termination of Tenant's right of
occupancy under this Lease.
(c) All rights of Tenant under the provisions of an
Option shall terminate and be of no further force or effect, notwithstanding
Tenant's due and timely exercise of the Option, if, after such exercise and
during the Term of this Lease, Tenant commits an Event of Default which has not
been cured or an Event of Default which by its nature cannot be cured under
paragraph 14.1.
40. SECURITY MEASURES. Tenant hereby acknowledges that Rent payable to
Landlord hereunder does not include the cost of guard service or other security
measures and that Landlord shall have no obligation whatsoever to provide same.
Tenant assumes all responsibility for the protection of Tenant, its agents, its
employees and servants, its invitees and its property from acts of third
parties.
41. EASEMENTS; RULES AND REGULATIONS; ETC. Landlord reserves to itself
the right, from time to time, to grant such easements, rights, dedications,
plats and replats that Landlord reasonably deems necessary or desirable, and to
cause the recordation of same, so long as such do not unreasonably interfere
with the use of or access to the Premises by Tenant. Tenant shall sign any of
the aforementioned documents upon request of Landlord.
Landlord may establish from time to time reasonable rules and
regulations applicable to the Premises for the benefit, care, management and
operation of the Premises. Landlord shall provide Tenant with reasonable notice
of all rules and
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regulations. Tenant agrees to faithfully observe and comply with all such
reasonable rules and regulations.
42. FORCE MAJEURE. Neither party shall be responsible for any delay or
failure in the observance or performance of any term or condition of this Lease
to be observed or performed by it other than payment of Rent, payment of any
other monetary obligation or discharge of an insurance obligation to the extent
that such delay or failure results from action, omission, or order of, or
failure or refusal to grant approvals by, governmental authorities; unexpected
or uncommon delays in the issuance of building or other permits; civil
commotions; strikes, fires, acts of God or the public enemy; inability to
procure labor, material, fuel, electricity, or other forms of energy; any
weather-caused delay or any other cause beyond the reasonable control of a
party, whether or not similar to the matters herein specifically enumerated.
Notwithstanding the foregoing, Force Majeure shall not include Landlord's
failure to satisfy any applicable zoning conditions to the development or use of
the Premises. Any such delay or failure shall extend by like time any period of
performance by Landlord or Tenant and shall not be deemed a breach of or failure
to perform this Lease or any provisions hereof, and the foregoing provision
shall take precedence over any other provision in this Lease to the contrary.
43. AUTHORITY. If Tenant is a corporation, trust, general or limited
partnership, or limited liability company, each individual executing this Lease
on behalf of such entity represents and warrants that he or she is duly
authorized to execute and deliver this Lease on behalf of said entity.
44. CONFLICT. Any conflict between the printed provisions of this Lease
and any typewritten or handwritten provisions shall be controlled by the
typewritten or handwritten provisions. The Addendum shall be controlling over
the foregoing provisions of this Lease.
45. ADDENDUM. Attached hereto is the Addendum which constitutes an
integral part of this Lease.
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The parties hereto have executed this Lease on the dates specified
immediately next to their respective signatures.
LANDLORD: TENANT:
TACC INVESTORS, LLC INTUIT INC., a Delaware corporation
By: DIAMOND VENTURES, Inc.
Its: Manager
By /s/ [SIG] By /s/ [SIG]
------------------------- --------------------------------------
Its President Its Chief Financial Officer & Vice
President of Finance & Corporate
Services
----------------------------------
Executed on: 4/22/98 Executed on: April 15, 1998
------------------- ----------------------------
Address: Address:
2200 East River Road Intuit Inc.
Tucson, AZ 85718 ________ Tucson Blvd.
Attn: Diamond Ventures, Inc., Tucson, Arizona _________
Manager Attn: Real Estate Manager
Fax: 520-299-5602
With a copy to:
Intuit Inc.
2550 Garcia Avenue, 2nd Floor
Mountain View, CA 94043
Attn: Vice President of Finance
And Corporate Services
Fax: 650-944-5499
And with a copy to:
Intuit Inc.
2550 Garcia Avenue, 2nd Floor
Mountain View, CA 94043
Attn: General Counsel
Fax: 650-944-6622
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EXHIBIT A
MAP OF
Intuit Teleservice Center
Tucson Airport Commerce Center
46
ADDENDUM TO BUILD TO SUIT LEASE
Dated APRIL 8, 1998
between TACC INVESTORS, LLC and
INTUIT INC.
THIS ADDENDUM TO BUILD TO SUIT LEASE ("Addendum") is attached to and
made a part of the attached Build to Suit Lease between TACC Investors, LLC,
an Arizona limited liability company, as Landlord, and Intuit Inc., a Delaware
corporation, as Tenant. In the event of any conflict between the terms of this
Addendum and the terms of the attached Build to Suit Lease, the terms of this
Addendum shall govern. This Addendum and the attached Build to Suit Lease are
collectively called the "Lease".
46. OPTIONS TO EXTEND. Subject to the terms and conditions of
paragraph 39, Tenant shall have the right to extend the Term of this Lease for
two (2) successive periods of five (5) years each (the "Renewal Terms"), by
giving written notice of exercise of these options to Landlord at least six (6)
months before expiration of the Initial Term and the First Renewal Term, as
applicable. Each Renewal Term shall be on the same terms and conditions of this
Lease (unless patently inapplicable) except that Rent payable by Tenant to
Landlord during each of the Renewal Terms shall be calculated as follows:
(a) The monthly Rent rate per square foot for each Renewal Term
shall be increased (but not decreased) by a factor equal to the cumulative
percentage increases in the Consumer Price Index occurring since the last
preceding adjustment in Rent, such increase not to be less than one percent
(1%) nor to exceed four percent (4%), per year. Such increase shall be
effective as of the first day of the First Renewal Term and the first day of
the Second Renewal Term, respectively.
(b) During each Renewal Term the monthly Rent rate shall be
further increased (but not decreased) every other year based on the cumulative
percentage increase in the Consumer Price Index during the preceding year, not
to be less than one percent (1%) nor to exceed four percent (4%), per year.
(c) Whenever this Lease requires an adjustment of the Rent
payable by Tenant to Landlord based on Consumer Price Index Increases, the
final Consumer Price Index published nearest the adjustment date shall apply.
If the Consumer Price Index is changed so that the "base year" differs from
that used herein, the Consumer Price index shall be converted in accordance
with the conversion factor published by the United States Department of Labor,
Bureau of Labor Statistics. If the Consumer Price Index is discontinued or
revised during the Term of this Lease, such other government index or
computation with which it is replaced shall be used in order to obtain
substantially the same result as would be obtained if the Consumer Price Index
had not been discontinued or revised. On any adjustment of Rent based on the
Consumer Price Index (or its replacement) Landlord and Tenant shall immediately
execute an amendment to this Lease reflecting the new Rent.
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47. EXPANSION. Landlord and Tenant have identified the eight-acre
vacant parcel of land (the "Expansion Area") situated adjacent to and west of
the Premises, as shown on Exhibit A, as a site suitable for Tenant's future
expansion plans (the "Expansion"). (Within thirty (30) days after the date of
this Lease Landlord will provide in the form of Exhibit D, which shall be
attached to this Lease, an accurate legal description of the Expansion Area
prepared by a reputable and licensed civil engineer or surveyor.) Two Expansion
scenarios are possible. Scenario One would involve an expansion of the
then-existing Improvements to add a minimum of an additional thirty thousand
(30,000) square feet and a maximum of an additional one hundred thousand
(100,000) square feet of building space and a proportionate amount of additional
parking spaces. Scenario One may or may not involve the Expansion Area. Scenario
Two would involve development of an entirely new building or buildings on the
Expansion Area. Any expansion under Scenario One or Scenario Two must move in an
east-to-west direction and not west-to-east.
Accordingly, if Landlord desires to sell, lease, or otherwise use
all or any part of the Expansion Area for a purpose inconsistent with Tenant's
Expansion ("Landlord's Alternate Use"), Landlord shall promptly give Tenant
written notice of Landlord's proposed Alternate Use, whereupon Tenant shall have
fifteen (15) days following Tenant's receipt of Landlord's notice to advise
Landlord of Tenant's election to negotiate with Landlord for an Expansion. If
Tenant does not so elect, or if after good faith negotiations Landlord and
Tenant fail for any reason to sign an agreement for Tenant's Expansion within
thirty (30) days after Landlord's receipt of Tenant's reply (either event being
considered a "Waiver"), Landlord may thereafter proceed with the Alternate Use
free of any right or claim of Tenant. If the Alternate Use involves only a
portion of the Expansion Area, Tenant's rights under this paragraph will
continue in the remainder of the Expansion Area, except that Tenant's right to
expand into the Expansion Area will cease should the Expansion Area be fewer
than two (2) acres in size due to previous Waiver(s) or for any other reason,
and no expansion in the Expansion Area shall leave Landlord with fewer than
two (2) undeveloped acres. Tenant shall be deemed to have exercised its rights
hereunder when Tenant shall have advised Landlord of Tenant's election to
negotiate with Landlord for an Expansion.
If Tenant has exercised its rights hereunder, the following terms
and conditions will apply:
(a) Scenario One. All terms and conditions of an Expansion
under Scenario One including, without limitation, shell Base Building, Tenant
Improvements, time for buildout, Tenant improvement allowance and all other
economic factors will be the product of good faith negotiation between the
parties since these terms and conditions are not inferable from the terms of
this Lease due to the nature of development and changing economic conditions,
except for the following terms and conditions, and no agreement regarding an
Expansion under Scenario One shall be binding upon either party until a
mutually acceptable amendment to this Lease has been executed by Landlord and
Tenant with the approval of their respective counsel:
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(i) The Term of this Lease for the entire Premises, including
the Expansion, will be adjusted and extended for a term of ten (10) years
commencing on the date the Expansion Area is Ready for Occupancy, subject to
further extension(s) under paragraph 46, except that the total Term of this
Lease shall in no event exceed thirty (30) years, which shall end no later than
twenty (20) years after the end of the initial Term calculated under paragraph
3.1.
(ii) The rental rate setting the Rent for the new square footage
in the Expansion (the "New Space") (but not the original Premises) shall be
based initially on the then-prevailing Market Rental Rate for a comparable
building improvement in the vicinity of the Premises as reasonably determined by
Landlord and Tenant. If Landlord and Tenant are unable to agree on the Market
Rental Rate, Landlord and Tenant shall select a highly qualified and reputable
real estate professional with at least ten (10) years of experience in the
relevant leasing market (the "Arbiter") to determine the Market Rental Rate. If
Landlord and Tenant are unable to agree on the Arbiter, the resident manager of
the largest commercial real estate brokerage firm in Tucson will select the
Arbiter from a major brokerage firm other than the resident manager's own firm.
The term "largest" means the brokerage firm with the largest sales volume in
the preceding calendar year. The term "major" means a brokerage firm ranking in
the top four in sales volume in Tucson. the terms "largest" and "major" shall
exclude (1) CB Commercial; (2) Picor; and (3) DMI Estate Properties, Inc.
The initial rental rate setting the Rent for the New Space
will be periodically adjusted based on the formulas in paragraphs 4.1 and 46
that determine the Rent for the original Premises.
(b) Scenario Two. All terms and conditions of an Expansion under
Scenario Two including, without limitation, shell Base Building, Tenant
Improvements, time for buildout, Tenant Improvement allowance, rental rate and
all other economic factors will also be the product of good faith negotiation
between the parties since these terms and conditions are not inferable from the
terms of this Lease due to the nature of development and changing economic
conditions, and no agreement regarding an Expansion under Scenario Two shall be
binding upon either party until a mutually acceptable final lease agreement has
been executed by Landlord and Tenant with the approval of their respective
counsel.
(c) Development of any Expansion shall be in strict compliance with
applicable law and regulations, CC&R's and, to the extent applicable, the
provisions of this Lease.
(d) If any dispute should arise under this paragraph 47, either party
shall have the right to resolve the dispute through an action for declaratory
judgment or for specific performance, but neither party shall have, and hereby
waives, the right to terminate this Lease over such dispute.
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(e) The obligations of Landlord under this paragraph 47 shall be
binding on any successor of Landlord, except any institutional lender entity who
is the successor to Landlord as the result of foreclosure of a mortgage or deed
of trust, exercise of the trustee's power of sale under a deed of trust
encumbering any such interest of Landlord, or any conveyance in lieu of
foreclosure ("Successor Through Foreclosure"). If any Successor Through
Foreclosure does not elect in its sole and absolute discretion to undertake the
Expansion pursuant to this paragraph 47, Tenant may do so itself through a
licensed contractor in strict compliance with the terms and conditions of
paragraph 9.5, except that the cost limitations therein shall not apply to the
Expansion. If the Expansion is built by Tenant under this paragraph, a condition
precedent thereto shall be Tenant's purchase of the Expansion Area at its then
fair market value. If Tenant and the then fee owner of the Expansion Area are
unable to agree on the fair market value of the Expansion Area, fair market
value shall be determined by the same procedure that determines the Market
Rental Rate under this paragraph 47.
48. Day Care Center. Landlord acknowledges Tenant's desire to
incorporate a day care center into Tenant's "Campus" at Country Club Commerce
Center. Landlord is prepared to establish a "pad" for the desired day care
center and to explore with Tenant and operators of day care centers a center at
Country Club Commerce Center that would serve the needs of Tenant's employees
and the employees of other employers and residents in the Tucson International
Airport area. Neither party is required to establish a day care center at
Country Club Commerce Center but if either party desires to pursue discussions,
the other party will participate in the discussions in good faith. If any
dispute should arise under this paragraph 48, either party shall have the right
to resolve the dispute through an action for declaratory judgment or for
specific performance, but neither party shall have, and hereby waives, the right
to terminate this Lease over such dispute.
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