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Exhibit 10.17
BUSINESS CENTER LEASE
(NNN)
1. BASIC LEASE TERMS
a. DATE OF LEASE: July 18, 1996
b. TENANT: Quality Care Solutions, Inc., an Arizona Corporation
Trade Name: Same
Address (Leased Premises): 5030 East Sunrise Drive, Phoenix,
AZ 85044
Building/Unit 12/ALL
Address (For Notices) Same as Leased Premises
c. LANDLORD: Principal Mutual Life Insurance Company and Petula
Associates, Ltd., both Iowa Corporations
Address (For Notices): 4620 North 16th Street, Suite E-113,
Phoenix, Arizona 85016 or to such other place as Landlord may
from time to time designate by notice to Tenant.
d. TENANT'S USE OF PREMISES: General office, development,
administration and sales of computer software
e. PREMISES AREA: 22,072 Rentable Square Feet
f. PROJECT AREA: 128,622 Square Feet
g. TERM OF LEASE: Commencement: September 1, 1996
Expiration: August 31, 2001
Number of Months: Sixty (60)
h. BASE MONTHLY RENT: $13,243.20 plus applicable sales taxes
i. RENT ADJUSTMENT (Initial One):
(1) [OMITTED FROM ORIGINAL]
(2) Step Increase. If this provision is initialed, the
step adjustment provisions of Section 4.b(2) apply as
follows:
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Effective Date of
Rent Increase New Base Monthly Rent
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September 1, 1996 $13,243.20
January 1, 1997 $14,346.80
May 1, 1997 $15,450.40
September 1, 1999 $16,554.00
September 1, 2000 $17,657.60
j. PREPAID RENT*: $13,660.36
k. SECURITY DEPOSIT*: $18,213.81
NON-REFUNDABLE CLEANING FEE*: $ 1,366.04
*includes 3.15% sales tax
l. BROKER(S):
Lee & Associates (Steve J. Farrell)
m. GUARANTOR(S):
None
n. ADDITIONAL SECTIONS
Additional Sections of this lease numbered 29 through 32 are
attached hereto and made a part hereof. If none, so state in
the following space
o. ADDITIONAL EXHIBITS
Additional exhibits lettered D through - are
attached hereto and made a part hereof. If none, so state in
the following space - none
2. PREMISES. Landlord leases to Tenant the premises described in section 1
and in Exhibit A (the "Premises"), located in this project described on
Exhibit B (the "Project"). By entry on the Premises, Tenant
acknowledges that it has examined the Premises and accepts the Premises
in their present condition, subject to any additional work Landlord has
agreed to do. Tenant represents and warrants that it agrees with the
square footage specified for the Premises in Section 1 and will not
hereafter challenge such determination and agreement.
3. TERM. The term of this lease is for the period set forth in Section 1,
commencing on the date in Section 1. If Landlord, for any reason,
cannot deliver possession of the Premises to Tenant upon commencement
of the term, this Lease shall not be void or voidable, nor shall
Landlord be liable to Tenant for any loss or damage resulting from such
delay. In that event, however, there shall be a rent abatement covering
the period between the commencement of the term and the time when
Landlord delivers possession to Tenant,
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and all other terms and conditions of this Lease shall remain in full
force and effect, provided, however, that if Landlord cannot deliver
possession of the Premises to Tenant, this Lease shall be void. If a
delay in possession is caused by Tenant's failure to perform any
obligation in accordance with this Lease, the term shall commence as
set forth in Section 1 and there shall be no reduction of rent between
the commencement of the term and the time Tenant takes possession.
4. RENT
a. BASE RENT. Tenant shall pay Landlord monthly base rent in the
initial amount in Section 1 which shall be payable monthly in
advance on the first day of each and every calendar month
("Base Monthly Rent") provided, however, the first month's
rent is due and payable upon execution of this Lease. If the
term of this Lease contains any rental abatement period,
Tenant hereby agrees that if Tenant breaches the Lease and/or
abandons the Premises before the end of the Lease term, or if
Tenant's right to possession is terminated by Landlord because
of Tenant's breach of the Lease, Landlord shall, at its
option, (1) void the rental abatement period; and (2) recover
from tenant, in addition to any damages due Landlord under the
terms and conditions of the Lease, rent prorated for the
entirety of the rental abatement period at a rental rate
equivalent to two (2) times the Base Monthly rent.
For purposes of Section 467 of the Internal Revenue Code, the
parties to this Lease hereby agree to allocate the stated
rents, provided herein, to the periods which correspond to the
actual rent payment as provided under the terms and conditions
of this agreement.
b. RENT ADJUSTMENT.
(1) COST OF LIVING ADJUSTMENT. If Section 1.i(1) is
initialed, the Base Monthly Rent shall be subject to
increase on each annual anniversary of the
commencement of the terms of this Lease. The base for
computing the increase is the Consumer Price Index
All Urban Consumers U.S. City Average (1982-84=100),
published by the United States Department of Labor,
Bureau of Labor Statistics ("Index"), which is in
effect on the ninetieth (90th) day preceding the date
of the commencement of the term ("Beginning Index").
The index published and in effect on the ninetieth
(90th) day preceding each anniversary of the
commencement of the term of this Lease ("Extension
Index") is to be used in determining the amount of
the increase from one year to the next. Beginning
with the rent due on and after the first anniversary
of the Commencement Date, the Base Monthly Rent due
with respect to the month immediately preceding such
anniversary date by a fraction. On the first
anniversary of the Commencement Date, the numerator
of the fraction will be the Extension Index and the
denominator will be the Beginning Index. On the
second
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and any subsequent anniversaries of the Commencement
Date, the numerator of the fraction will be the
current Extension Index and the denominator will be
the Extension Index used to calculate the previous
year's rental increase. If there is a decline from
one lease year to the next in the Extension Index,
the monthly rent due during the subsequent lease year
shall equal the monthly rent due during the then
present lease year.
If the Index is changed so that the base year differs
from that in effect when the term commences, the
Index shall be converted in accordance with the
conversion factor published by the United States
Department of Labor, Bureau of Labor Statistics. If
the Index is discontinued or revised during the term,
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 Index had not been discontinued or revised.
(2) STEP INCREASE. If Section 1.i.(2) is initialed, Base
Monthly Rent shall be increased periodically to the
amounts and at the times set forth in Section
1.i.(2).
c. EXPENSES. The purpose of this Section 4.c is to ensure that
Tenant bears a share of all Expenses related to the use,
maintenance, ownership, repair or replacement and insurance of
the Project. Accordingly, beginning on the date Tenant takes
possession of the Premises, Tenant shall pay to Landlord
Tenant's Share (as defined below) of Expenses related to the
Project.
(1) EXPENSES DEFINED. The term "Expenses" shall mean all
costs and expenses of the ownership, operation,
maintenance, repair or replacement, and insurance of
the Project, including without limitation, the
following costs:
(a) All supplies, materials, labor, equipment,
and utilities used in or related to the
operation and maintenance of the Project;
(b) All maintenance, management, janitorial,
legal, accounting, insurance, and service
agreement costs related to the Project;
(c) All maintenance, replacement and repair
costs relating to the areas within or around
the Project, including, without limitation,
air conditioning systems, sidewalks,
landscaping, service areas, driveways,
parking areas (including resurfacing and
restriping parking areas), walkways,
building exteriors (including painting),
signs and directories, repairing and
replacing roofs, walls, etc. These costs may
be included either based on actual
expenditures or the use of an accounting
reserve based on past cost experience for
the Project.
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(d) Amortization (along with reasonable
financing charges) of capital improvements
made to the Project which may be required by
any government authority or which will
improve the operating efficiency of the
Project (provided, however, that the amount
of such amortization for improvements not
mandated by government authority shall not
exceed in any year the amount of costs
reasonably determined by Landlord in its
sole discretion to have been saved by the
expenditure either through the reduction or
minimization of increases which would have
otherwise occurred).
(e) Real Property Taxes including all taxes,
assessments (general and special) and other
impositions or charges which may be taxed,
charged, levied, assessed or imposed upon
all or any portion of or in relation to the
Project or any portion thereof, any
leasehold estate in the Premises or measured
by rent from the Premises, including any
increase caused by the transfer, sale or
encumbrance of the Project or any portion
thereof. "Real Property Taxes" shall also
include any form of assessment, levy,
penalty, charge or tax (other than estate,
inheritance, net income, or franchise taxes)
imposed by any authority having a direct or
indirect power to tax or charge, including,
without limitation, any city, county, state
federal or any improvement or other
district, whether such tax is (1) determined
by the value of the Project or the rent or
other sums payable under this Lease; (2)
upon or with respect to any legal or
equitable interest of Landlord in the
Project or any part thereof; (3) upon this
transaction or any document to which Tenant
is a party creating a transfer in any
interest in the Project; (4) in lieu of or
as a direct substitute in whole or in part
of or in addition to any real property taxes
on the Project; (5) based on any parking
spaces or parking facilities provided in the
Project; or (6) in consideration for
services, such as police protection, fire
protection, street, sidewalk and roadway
maintenance, refuse removal or other
services that may be provided by any
governmental or quasi-governmental agency
from time to time which were formerly
provided without charge or with less charge
to property owners or occupants.
(f) All costs and expenses of improvements,
alterations, modifications, additions and
changes to the Project, or any portion
thereof, necessary to bring the Project into
full compliance with all federal, state or
local statutes, rules, regulations or
ordinances regarding handicapped
accessibility and use, now in existence or
arising in the future, including but not
limited to the provisions of the Americans
With Disabilities Act, 42 U.S.C.
Sections 12101, et. seq., as may be
amended from time to time.
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(2) ANNUAL ESTIMATE OF EXPENSES; TENANT'S SHARE. When
Tenant takes possession of the Premises, Landlord
shall estimate Tenant's share of Expenses for the
remainder of the calendar year, and at the
commencement of each calendar year thereafter,
Landlord shall estimate Tenant's Share of Expenses
for the coming year by multiplying the estimated per
square foot annual Project Expenses by the Premises
area.
(3) MONTHLY PAYMENT OF EXPENSES. Tenant shall pay to
Landlord, monthly in advance, as additional rent,
one-twelfth (1/12) of the Annual Estimate of Expenses
beginning on the date Tenant takes possession of the
Premises. As soon as practical following each
calendar year, Landlord shall prepare an accounting
of actual Expenses incurred during the prior calendar
year and such accounting shall reflect Tenant's Share
of Expenses. If the additional rent paid by Tenant
under this Section 4.c.3 during the preceding
calendar year was less than the actual amount of
Tenant's Share of Expenses, Landlord shall so notify
Tenant and Tenant shall pay such amount to Landlord
within 30 days of receipt of such notice. Such amount
shall be deemed to have accrued during the prior
calendar year and shall be due and payable from
Tenant even though the term of this Lease has expired
or this lease has been terminated prior to Tenant's
receipt of this notice. Tenant shall have thirty (30)
days from receipt of such notice to contest the
amount due; failure to so notify Landlord shall
represent final determination of Tenant's Share of
expenses. If Tenant's payments were greater than the
actual amount, then such overpayment shall be
credited by Landlord to all present rent due under
this Section 4.c.3.
d. RENT WITHOUT OFFSET AND LATE CHARGE. All rent shall be paid by
Tenant to Landlord monthly in advance on the first day of
every calendar month, at the address shown in Section 1, or
such other place as landlord may designate in writing from
time to time. All rent shall be paid without prior demand or
notice and without any deduction or offset whatsoever. All
rent shall be paid in lawful currency of the United States of
America. Proration of rent due for any partial month shall be
calculated by dividing the number of days in the month for
which rent is due by the actual number of days in that month
and multiplying by the applicable monthly rate. Tenant
acknowledges that late payment by Tenant to Landlord of any
rent or other sums due under this Lease will cause Landlord to
incur costs not contemplated by this Lease, the exact amount
of such cost being extremely difficult and impracticable to
ascertain. Such costs include, without limitation, processing
and accounting charges and late charges that may be imposed on
Landlord by the terms of any encumbrance or note secured by
the Premises. Therefore, if any rent or other sum due from
Tenant is not received when due, Tenant shall pay to Landlord
an additional sum equal to 10% of such overdue payment.
Landlord and Tenant hereby agree that such late charge
represents a fair and reasonable estimate of the costs that
Landlord will incur by
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reason of any such late payment and that the late charge is in
addition to any and all remedies available to the Landlord and
that the assessment and/or collection of the late charge shall
not be deemed a waiver of any other default. Additionally, all
such delinquent rent or other sums, plus this late charge,
shall bear interest at the rate of 18 percent per annum. If
the interest rate specified in this Lease is higher than the
rate permitted by law, the interest rate is hereby decreased
to the maximum legal interest rate permitted by law. Any
payments of any kind returned for insufficient funds will be
subject to an additional handling charge of $25.00, and
thereafter, Landlord may require Tenant to pay all future
payments of rent or other sums due by money order or cashier's
check.
5. PREPAID RENT. Upon the execution of this Lease, Tenant shall pay to
landlord the prepaid rent set forth in Section 1, and if Tenant is not
in default of any provisions of this Lease, such prepaid rent shall be
applied toward the rent due for the first month of the term. Landlord's
obligations with respect to the prepaid rent are those of a debtor and
not of a trustee, and Landlord can commingle the prepaid rent with
Landlord's general funds. Landlord shall not be required to pay Tenant
interest on the prepaid rent. Landlord shall be entitled to immediately
endorse and cash Tenant's prepaid rent; however, such endorsement and
cashing shall not constitute Landlord's acceptance of this Lease. In
the event Landlord does not accept this Lease, Landlord shall return
said prepaid rent.
6. DEPOSIT. Upon execution of this Lease, Tenant shall deposit a security
deposit and a cleaning fee as set forth in Section 1 with Landlord. If
Tenant is in default, Landlord can use the security deposit or any
portion of it to cure the default or to compensate Landlord for any
damages sustained by Landlord resulting from Tenant's default. Upon
demand, Tenant shall immediately pay to Landlord a sum equal to the
portion of the security deposit expended or applied by Landlord to
restore the security deposit to its full amount. In no event will
Tenant have the right to apply any part of the security deposit to any
rent or other sums due under this Lease. If Tenant is not in default at
the expiration or termination of this Lease, Landlord shall return the
security deposit to Tenant, and retain the cleaning fee, which shall
equal 10% of the first month's rent or $125, whichever is greater.
Landlord's obligations with respect to the deposit are those of a
debtor and not of a trustee, and Landlord can commingle the security
deposit with Landlord's general funds. Landlord shall not be required
to pay Tenant interest on the deposit. Landlord shall be entitled to
immediately endorse and cash Tenant's prepaid deposit, however, such
endorsement and cashing shall not constitute Landlord's acceptance of
this Lease. In the event Landlord does not accept this Lease, Landlord
shall return said prepaid deposit. Each time the Base Rent is
increased, Tenant shall deposit additional funds with Landlord
sufficient to increase the security to an amount which bears the same
relationship to the adjusted Base Rent as the initial security deposit
bore to the initial Base Rent.
7. USE OF PREMISES AND PROJECT FACILITIES. Tenant shall use the Premises
solely for the purposes set forth in Section 1 and for no other purpose
without obtaining the prior written consent of Landlord. Tenant
acknowledges that neither Landlord nor any agent of
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Landlord has made any representation or warranty with respect to the
Premises or with respect to the suitability of the Premises or the
Project for the conduct of Tenant's business, nor has Landlord agreed
to undertake any modification, alteration or improvement to the
Premises or the Project, except as provided in writing in this Lease.
Tenant acknowledges that Landlord may from time to time, at its sole
discretion, make such modifications, alterations, deletions or
improvements to the Project as Landlord may deem necessary or
desirable, without compensation or notice to Tenant. Tenant shall
promptly comply with all laws, ordinances, orders and regulations
affecting the Premises and the Project, including, without limitation,
any rules and regulations that may be attached to this Lease and to any
reasonable modifications to these rules and regulations as Landlord may
adopt from time to time. Tenant shall not do or permit anything to be
done in or about the Premises or bring or keep anything in the Premises
that will in any way increase the premiums paid by Landlord on its
insurance related to the Project or which will in any way increase the
premiums for fire or casualty insurance carried by other tenants in the
Project. Tenant will not perform any act or carry on any practices that
may injure the Premises or the Project; that may be a nuisance or
menace to other tenants in the Project; or that shall in any way
interfere with the quiet enjoyment of such other tenants. Tenant shall
not use the Premises for sleeping, washing clothes, cooking or the
preparation, manufacture or mixing of anything that might emit any
objectionable odor, noises, vibrations or lights onto such other
tenants. If sound insulation is required to muffle noise produced by
Tenant on the Premises, Tenant at its own cost shall provide all
necessary insulation. Tenant shall not do anything on the premises
which will overload any existing parking or service to the Premises.
Pets and/or animals of any type shall not be kept on the Premises.
8. EMISSION, USE AND DISPOSAL OF WASTE AND TOXIC MATERIALS.
a. EMISSIONS. Tenant shall not:
(1) Permit any vehicle on the premises to emit exhaust
which is in violation of any governmental law, rule,
regulation or requirement;
(2) Produce, or permit to be produced, any intense glare,
light or heat except within an enclosed or screened
area and then only in such manner that the glare,
light or heat shall not be discernible from outside
the Premises;
(3) Create, or permit to be created, any sound pressure
level which will interfere with the quiet enjoyment
of any real property outside the Premises, or which
will create a nuisance or violate any governmental
law, rule, regulation or requirement;
(4) Create, or permit to be created, any ground vibration
that is discernible outside the Premises;
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(5) Transmit, receive or permit to be transmitted or
received, any electromagnetic, microwave or other
radiation which is harmful or hazardous to any person
or property in, or about the Premises, or anywhere
else.
b. DISPOSAL OF WASTE
(1) Non-Toxic Refuse Disposal. Tenant shall not keep any
non-toxic trash, garbage waste or other refuse on the
Premises except in sanitary containers and shall
regularly and frequently remove same from the
Premises. Tenant shall keep all incinerators,
containers or other equipment used for storage or
disposal of such materials in a clean and sanitary
condition.
(2) Sewage Disposal. Tenant shall properly dispose of all
sanitary sewage and shall not use the sewage disposal
system (a) for the disposal of anything except
sanitary sewage or (b) excess of the lesser amount
(i) reasonably contemplated by the uses permitted
under this Lease or (ii) permitted by any
governmental entity. Tenant shall keep the sewage
disposal system free of all obstructions and in good
operating condition.
(3) Disposal of Other Non-Toxic Waste. Tenant shall
properly dispose of all other waste or other matter
delivered to, stored upon, located upon or within,
used on, or removed from, the Premises in such a
manner that it does not, and will not, adversely
affect the (a) health or safety of persons, wherever
located, whether on the Premises or elsewhere (b)
condition, use or enjoyment of the Premises or any
other real or personal property, wherever located,
whether on the Premises or anywhere else, or (c)
Premises or any of the improvements thereto or
thereon including buildings, foundations, pipes,
utility lines, landscaping or parking areas.
c. INFORMATION. If Landlord consents to Tenant's storage or use
of toxic materials on the Premises as set forth in Paragraph
8(d), Tenant shall provide Landlord with any and all
information regarding such hazardous or toxic materials
including copies of all filings and reports to governmental
entities at the time they are originated, and any other
information requested by Landlord. In the event of any
accident, spill or other incident involving hazardous or toxic
matter, Tenant shall immediately report the same to Landlord
and supply Landlord with all information and reports with
respect to the same. All information described herein shall be
provided to Landlord regardless of any claim by Tenant that it
is confidential or privileged.
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d. TOXIC MATERIALS.
(1) DEFINITIONS.
(a) As used in this Lease, the term "Hazardous
Material(s)" means any oil, flammable items,
explosives, radioactive materials, hazardous
or toxic substances, material or waste or
related materials including, without
limitation, any substances that pose a
hazard to the Premises or to persons on or
about the Premises and any substances
defined as or included in the definition of
"hazardous substance," "hazardous waste,"
"toxic substance," "extremely hazardous
waste," "restricted hazardous waste" or
words of similar import, now or subsequently
regulated under applicable federal, state or
local laws or regulations, including without
limitation, petroleum-based products,
paints, solvents, lead, cyanide, DDT,
printing inks, acids, pesticides, ammonia
compounds and other chemical products,
asbestos, PCBs, urea formaldehyde foam
insulation, transformers or other equipment
containing dielectric fluid, levels of
polychlorinated biphenyls, or radon gas, and
similar compounds, and including any
different products and materials which are
subsequently found to have adverse effects
on the environment or the health and safety
of persons.
(b) As used herein, the term "Environmental
Law(s)" means any one or all of the
following: the Comprehensive Environmental
Response, Compensation and Liability Act (42
U.S.C.Sections 9906 et. seq.), the
Resource Conservation and Recovery Act (42
U.S.C.Sections 6901 et. seq.), the Safe
Drinking Water Act (42
U.S.C.Sections 300f et. seq.), the
Clean Water Act (33 U.S.C.Sections
1251 et. seq.), the Clean Air Act (42
U.S.C.Sections 7401 et. seq.), the
Toxic Substances Control Act (15
U.S.C.Sections 136 et. seq.), the Solid
Waste Disposal Act (42 U.S.C.Sections
3251 et. seq.), and the Arizona
Environmental Quality Act, including
provisions on water quality control
(A.R.S.Sections 49-201 et. seq.), air
quality (A.R.S.Sections 49-401 et.
seq.), solid waste management
(A.R.S.Sections 49-701 et. seq.),
hazardous waste disposal
(A.R.S.Sections 49-901 et. seq.), and
underground storage tank regulation
(A.R.S.Sections 49-1001 et. seq.) and
regulations thereunder any other laws and
regulations now in effect or hereinafter
enacted that deal with the regulation or
protection of the environment, including the
soil, subsurface soil, ambient air, ground
water, surface water, and land use.
(2) Tenant shall not cause or permit any Hazardous
Material to be generated, manufactured, produced,
brought upon, used, stored, treated, released,
discharged, disposed of or transported in, on or
about the Premises by
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Tenant, its agents, employees, contractors,
assignees, sublessees or invitees, without the prior
written consent of Landlord. Landlord shall be
entitled to take into account such factors or facts
as Landlord may reasonably determine to be relevant
in determining whether to consent to Tenant's
proposed activity with respect to Hazardous
Materials, and Landlord may attach conditions to any
such consent if such conditions are reasonably
necessary to protect Landlord's interests in avoiding
potential liability to Landlord or damage to
Landlord's property arising from Tenant's activities
with respect to Hazardous Materials. In no event
shall Landlord be required to consent to the
installation or use of any storage tanks on the
Property.
(3) Tenant shall keep and maintain the Premises in
compliance with, and shall not cause or permit the
Premises to be in violation of any Environmental
Laws. All Tenant's activities at the Premises shall
be in accordance with all Environmental Laws.
Additionally, Tenant shall obtain any and all
necessary permits. Tenant's obligations and
liabilities under this Paragraph 8 shall continue so
long as Landlord bears any liability or
responsibility under the Environmental Laws for any
action that occurs on the Premises during the term of
this Lease.
(4) Tenant shall immediately notify Landlord of, and upon
Landlord's request shall provide Landlord with copies
of, the following:
(a) Any correspondence, communication, or
notice, oral or written, to or from any
governmental entity regarding the
application of Environmental Laws to the
Premises or Tenant's operations on the
Leased Premises including, without
limitation, notices of violation, notices to
comply, and citations;
(b) Any reports filed pursuant to any
Environmental Law or self-reporting
requirements;
(c) Any permits and permit applications; and
(d) Any change in Tenant's operations on the
Premises that will change or has the
potential to change Tenant's or Landlord's
obligations or liabilities under
Environmental Laws.
(5) Tenant shall protect, indemnify, and hold harmless
Landlord and its directors, offices, partners,
employees, agents, lenders, and ground lessees, if
any, and their respective successors and assigns for,
from, and against any and all losses, damages,
claims, costs, expenses, penalties and liabilities of
any kind (including, without limitation, the cost of
any investigation, remediation and cleanup, and
attorney's fees) which, in
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Landlord's opinion, are attributable to Tenant's
violation of this Paragraph. This indemnity shall
survive the termination of this Lease.
(6) In the event that any investigation, site monitoring,
containment, cleanup, removal, restoration, or other
remedial work of any kind or nature (the "Remedial
Work") is necessary due to or in connection with
Tenant's use or occupancy of the Premises, Tenant
shall, within thirty (30) days after written demand
for performance thereof by Landlord (or such shorter
period of time as may be required under any
applicable Environmental Law, order or agreement),
commence to perform, or cause to be commenced and
performed, and thereafter diligently prosecuted to
completion, all such Remedial Work. All Remedial Work
shall be performed by one or more contractors,
approved in advance in writing by Landlord. All costs
and expenses of such Remedial Work shall be paid by
Tenant including, without limitations, the charges of
such contractor(s), and the reasonable fees and costs
of the attorneys for Landlord incurred in connection
with monitoring or review of such Remedial Work.
(7) Landlord may elect, at Landlord's sole discretion, to
perform any Remedial Work. Landlord and Landlord's
agents shall have the right to enter the Premises at
all reasonable times to inspect, monitor and/or
perform Remedial Work. All expenses incurred by
Landlord in connection with performing Remedial Work
are payable by Tenant upon Landlord's demand, with
interest thereon at the rate of 12% per annum.
(8) Tenant's failure to abide by the terms of this
Paragraph 8 shall be restricted by injunction.
9. SIGNAGE. All signing shall comply with rules and regulations set forth
by Landlord as may be modified from time to time. Current rules and
regulations relating to signs are described on Exhibit C. Tenant shall
place no window covering (e.g. shades, blinds, curtains, drapes,
screens, or tinting materials), stickers, signs, lettering, banners or
advertising or display material on or near the exterior windows or
doors if such materials are visible from the exterior of the Premises,
without Landlord's prior written consent. Similarly, Tenant may not
install any alarm boxes, foil protection tape or other security
equipment on the Premises without Landlord's prior written consent. Any
material violating this provision may be destroyed by Landlord without
compensation to Tenant.
10. PERSONAL PROPERTY TAXES. Tenant shall pay before delinquency all taxes,
assessments, license fees and public charges levied, assessed or
imposed upon its business operations as well as upon all trade
fixtures, leasehold improvements, merchandise and other personal
property in or about the Premises.
11. PARKING. Landlord grants to Tenant and Tenant's customers, suppliers,
employees and invitees, an exclusive license to use the designated
parking areas at the Premises for the use of motor vehicles during the
term of this Lease. Landlord reserves the right at any
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time to promulgate rules and regulations relating to the use of such
parking areas, including reasonable restrictions on parking by tenants
and employees, to designate specific spaces for the use of any tenant,
to make changes in the parking layout from time to time, and to
establish reasonable time limits on parking. Overnight parking is
permitted by Landlord on an occasional basis only, and for a limited
number of cars. Tenant hereby assumes all responsibility arising out of
and in connection with such overnight parking, and waives its rights to
all claims from any loss or damage to any vehicle resulting from such
overnight use. Any vehicle violating this or any other vehicle
regulation adopted by Landlord is subject to removal at the owner's
expense.
12. UTILITIES. (Strike and initial clause which does not apply).
a. [OMITTED FROM ORIGINAL]
b. INDUSTRIAL SPACE. Tenant shall pay for all water, gas, heat,
light, power, sewer, electricity, telephone or other service,
metered, chargeable or provided to the Premises. Landlord
reserves the right to install separate meters for any such
utility and to charge Tenant for the cost of such
installation.
13. MAINTENANCE. Landlord shall maintain, in good condition, the structural
parts of the Premises, which shall include only the foundations,
bearing and exterior walls (excluding glass), subflooring and roof
(excluding skylights), the unexposed electrical, plumbing and sewerage
systems, including those portions of the systems lying outside the
Premises, gutters and downspouts on the Building and the heating,
ventilating and air conditioning system servicing the Premises;
provided, however, the cost of all such maintenance shall be considered
"Expenses" for purposes of Section 4.c. Except as provided above,
Tenant shall maintain and repair the Premises in good condition;
including, without limitation, maintaining and repairing all walls,
storefronts, floors, ceilings, interior and exterior doors, exterior
and interior windows and fixtures and interior plumbing as well as
damage caused by Tenant, its agents, employees or invitees. Upon
expiration or termination of this Lease, Tenant shall surrender the
Premises to landlord in the same condition as existed at the
commencement of the term, except for reasonable wear and tear or damage
caused by fire or other casualty for which Landlord has received all
funds necessary for restoration of the Premises from insurance
proceeds.
14. ALTERATIONS. Tenant shall not make any alterations to the Premises, or
to the Project, including any changes to the existing landscaping,
without Landlord's prior written consent. Landlord's approval of any
plans, specifications or working drawings shall not be construed as an
acceptance or approval of, and shall create no responsibility or
liability on the part of the Landlord for, the completeness, design or
compliance with any federal, state or local laws, rules and
regulations, including the Americans With Disabilities Act. If Landlord
gives its consent for such alterations, Landlord may post notices in
accordance with the laws of the state in which the premises are
located. Any alterations made shall remain on and be surrendered with
the Premises upon expiration or termination of this Lease, except that
Landlord may, within 30 days before or 30 days
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after expiration of the term, elect to require Tenant to remove any
alterations which Tenant may have made to the Premises. If Landlord so
elects, at its own cost Tenant shall restore the Premises to the
condition designated by Landlord in its election, before the last day
of the term or within 30 days after notice of its election is given,
whichever is later.
Should Landlord consent in writing to Tenant's alteration of the
Premises, Tenant shall contract with a contractor approved by Landlord
for the construction of such alterations, shall secure all appropriate
governmental approvals and permits, and shall complete such alterations
with due diligence in compliance with plans and specifications approved
by Landlord. All such construction shall be performed in a manner which
will not interfere with the quiet enjoyment of other tenants of the
Project. Tenant shall pay all costs for such construction and shall
keep the Premises and the Project free and clear of all mechanics'
liens which may result from construction by Tenant.
15. RELEASE AND INDEMNITY. As material consideration to Landlord, Tenant
agrees that Landlord shall not be liable to Tenant for any damage to
Tenant or tenant's property from any cause and Tenant waives all claims
against Landlord for damage to persons or property arising for any
reason, except for damage resulting directly from Landlord's breach of
its express obligations under this Lease which Landlord has not cured
within a reasonable time after receipt of written notice of such breach
from Tenant. Tenant shall indemnify and hold Landlord harmless from all
damages arising out of any damage to any person or property occurring
in, or about the Premises or Tenant's use of the Premises or Tenant's
breach of any term of this Lease.
16. INSURANCE. Tenant, at its cost, shall maintain public liability and
property damage insurance and products liability insurance with a
single combined liability limit of $1,000,000, insuring against all
liability of Tenant and its representatives, employees. invitees, and
agents arising out of or in connection with Tenant's use or occupancy
of the Premises. Public liability insurance, products liability
insurance and property damage insurance shall insure performance by
Tenant of the indemnity provisions of Section 15. Landlord and
Landlord's designated manager shall be named as additional insured and
the policy shall contain cross-liability endorsements. On all its
personal property, at its cost, Tenant shall maintain a policy of
standard fire and extended coverage insurance with vandalism and
malicious mischief endorsements and "all risk" coverage on all Tenant's
improvements and alterations, including without limitation, all items
of Tenant responsibility described in Section 13 or in or about the
Premises, to the extent of at least 90% of their full replacement
value. The proceeds from any such policy shall be used by Tenant for
the replacement of personal property and the restoration of Tenants
improvements or alterations. All insurance required to be provided by
Tenant under this Lease shall release Landlord from any claims for
damage to any person or the Premises and the Project, and to Tenant's
fixtures, personal property, improvements and alterations in or on the
Premises or the Project, caused by or resulting from risks insured
against under any insurance policy carried by Tenant in force at the
time of such damage. All insurance required to be provided by Tenant
under this Lease: (a) shall be issued by
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insurance companies authorized to do business in the state in which the
premises are located with a financial rating of at least an A+XII
status as rated in the most recent edition of Best's Insurance Reports;
(b) shall be issued as a primary policy; and (c) shall contain an
endorsement requiring at least 30 days prior written notice of
cancellation to Landlord and Landlord's lender, before cancellation or
change in coverage, scope or amount of any policy. Tenant shall deliver
a certificate or copy of such policy together with evidence of payment
of all current premiums to Landlord prior to the Commencement Date of
this Lease. Tenant's failure to provide evidence of such coverage to
Landlord may, in Landlord's sole discretion, constitute a default under
this Lease.
17. DESTRUCTION. If during the term, the Premises or Project are more than
10% destroyed from any cause, or rendered inaccessible or unusable from
any cause, Landlord may, in its sole discretion, terminate this Lease
by delivery of notice to Tenant within 30 days of such event without
compensation to Tenant. If in Landlord's estimation, the Premises
cannot be restored within 90 days following such destruction, the
Landlord shall notify Tenant and Tenant may terminate this Lease by
delivery of notice to Landlord within 30 days of receipt of Landlord's
notice. If Landlord does not terminate this Lease and if in Landlord's
estimation the Premises can be restored within 90 days, then Landlord
shall commence to restore the Premises in compliance with then existing
laws and shall complete such restoration with due diligence. In such
event, this Lease shall remain in full force and effect, but there
shall be an abatement of rent between the date of destruction and the
date of completion of restoration, based on the extent to which
destruction interferes with Tenant's use of the Premises.
18. CONDEMNATION.
a. DEFINITIONS. The following definitions shall apply: (1)
"Condemnation" means (a) the exercise of any governmental
power of eminent domain, whether by legal proceedings or
otherwise by condemnor and (b) the voluntary sale or transfer
by Landlord to any condemnor either under threat of
condemnation or while legal proceedings for condemnation are
proceeding; (2) "Date of Taking" mans the date the condemnor
has right to possession of the property being condemned; (3)
"Award" means all compensation, sums or anything of value
awarded, paid or received on a total or partial condemnation;
and (4) "Condemnor' means any public or quasi-public
authority, or private corporation or individual, having power
of condemnation.
b. OBLIGATIONS TO BE GOVERNED BY LEASE. If during the term of the
Lease there is any taking of all or any part of the Premises
or the Project, the rights and obligations of the parties
shall be determined pursuant to this Lease.
c. TOTAL OR PARTIAL TAKING. If the Premises are totally taken by
condemnation, this Lease shall terminate on the date of
taking. If any portion of the Premises is taken by
condemnation, this Lease shall remain in effect, except that
Tenant can elect to
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terminate this Lease if the remaining portion of the Premises
is rendered unsuitable for Tenant's continued use of Premises.
If Tenant elects to terminate this Lease, Tenant must exercise
its right to terminate by giving notice to Landlord within 30
days after the nature and extent of the taking have been
finally determined. If Tenant elects to terminate this Lease,
Tenant shall also notify Landlord of the date of termination,
which date shall not be earlier than 30 days nor later than 90
days after Tenant has notified Landlord of its election to
terminate; except that this Lease shall terminate on the date
of taking if the date of taking falls on a date before the
date of termination as designated by Tenant. If any portion of
the Premises is taken by condemnation and this Lease remains
in full force and effect, on the date of taking the rent shall
be reduced by an amount in the same ratio as the total number
of square feet in the Premises taken bears to the total number
of square feet in the Premises immediately before the date of
taking.
19. ASSIGNMENT OR SUBLEASE. Tenant shall not assign or encumber its
interest in this Lease or the Premises or sublease all or any part of
the Premises or allow any other person or entity (except Tenant's
authorized representatives, employees, invitees, or guests) to occupy
or use all or any part of the Premises without first obtaining
Landlord's reasonable consent which Landlord may withhold or condition
in its sole discretion. Any assignment, encumbrance or sublease without
Landlord's written consent shall be voidable and at Landlord's
election, shall constitute a default. If Tenant is a partnership, a
withdrawal or change, voluntary, involuntary or by operation of law of
any partner, or the dissolution of the partnership, shall be deemed a
voluntary assignment. If Tenant consists of more than one person, a
purported assignment, voluntary or involuntary or by operation of law
from one person to the other shall be deemed a voluntary assignment. If
Tenant is a corporation, any dissolution, merger, consolidation or
other reorganization of Tenant, or sale or other transfer of a
controlling percentage of the capital stock of Tenant, or the sale of
at least 50% of the value of the assets of Tenant shall be deemed a
voluntary assignment. The phrase "controlling percentage" means
ownership of and right to vote stock possessing at least 50% of the
total combined voting power of all classes of Tenant's capital stock
issued, outstanding and entitled to vote for election of directors.
This Section 19 shall not apply to corporations the stock of which is
traded through an exchange or over the counter. All rent received by
Tenant from its subtenants in excess of the rent payable by Tenant to
Landlord under this Lease shall be paid to Landlord, or any sums to be
paid by an assignee to Tenant in consideration of the assignment of
this Lease shall be paid to Landlord. If Tenant requests Landlord to
consent to a proposed assignment or subletting, Tenant shall pay to
Landlord, whether or not consent is ultimately given, $100 or
Landlord's reasonable attorney's fees incurred in connection with such
request, whichever is greater.
No interest of Tenant in this Lease shall be assignable by involuntary
assignment through operation of law (including without limitation the
transfer of this Lease by testacy or intestacy). Each of the following
acts shall be considered an involuntary assignment: (a) if Tenant is or
becomes bankrupt or insolvent, makes an assignment for the benefit of
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creditors, or institutes proceedings under the Bankruptcy Act in which
Tenant is the bankrupt; or it Tenant is a partnership or consists of
more than one person or entity, if any partner of the partnership or
other person or entity is or becomes bankrupt or insolvent, or makes an
assignment for the benefit of creditors; or (b) if a writ of attachment
or execution is levied on this Lease; or (c) if in any proceeding or
action to which Tenant is a party, a receiver is appointed with
authority to take possession of the Premises An involuntary assignment
shall constitute a default by Tenant and Landlord shall have the right
to elect to terminate this Lease, in which case this Lease shall not be
treated as an asset of Tenant.
20. DEFAULT. The following events shall constitute a default by Tenant
under this Lease:
a. a default by Tenant in the payment when due of any rent or
other sum payable hereunder,
b. a default by Tenant in the performance of any of the other
terms, covenants, agreements or conditions contained herein;
c. the bankruptcy or insolvency of Tenant, transfer by Tenant in
fraud of creditors, an assignment by Tenant for the benefit of
creditors, or the commencement of any proceedings of any kind
by or against Tenant under any provision of the Federal
Bankruptcy Act or under any other insolvency, bankruptcy or
reorganization act unless, in the event such proceedings are
involuntary, Tenant is discharged from same within sixty (60)
days thereafter,
d. the appointment of a receiver for a substantial part of the
assets of Tenant;
e. the abandonment of the Premises (failure to occupy and operate
the Premises for ten (10) consecutive days shall be deemed an
abandonment); and
f. the levy upon this Lease or any estate of Tenant hereunder by
any attachment or execution and the failure to have such
attachment or execution vacated within thirty (30) days
thereafter.
21. LANDLORD'S REMEDIES. Landlord shall have the following remedies if
Tenant is in default (These remedies are not exclusive; they are
cumulative and in addition to any remedies now or late allowed by law):
Landlord may terminate Tenant's right to possession of the Premises at
any time. No act by Landlord other than giving notice to Tenant shall
terminate this Lease. Acts of maintenance, efforts to relet the
Premises, or the appointment of a receiver on Landlord's initiative to
protect Landlord's interest under this Lease shall not constitute a
termination of Tenant's right to possession. Upon termination of
Tenant's right to possession, Landlord has the right to recover from
Tenant (1) the worth of the unpaid rent that had been earned at the
time of termination of Tenant's right to possession; (2) the worth of
the amount of the unpaid rent that would have been earned after the
date of termination of Tenant's right to possession; (3) any other
amount, including but not limited to, expenses incurred to relet the
premises, court,
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attorney and collection costs, necessary to compensate Landlord for all
detriment caused by Tenant's default. "The Worth," as used for Item
21(l) in this Paragraph 21 is to be computed by allowing interest at
the rate of 18 percent per annum. If the interest rate specified in
this Lease is higher than the rate permitted by law, the interest rate
is hereby decreased to the maximum legal interest rate permitted by
law. "The Worth" as used for Item 21(2) in this Paragraph 21 is to be
computed by discounting the amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of termination of Tenant's
right of possession.
In the event of any default by Tenant, Landlord shall also have the
right, with or without terminating this Lease, to reenter the Premises
and remove all persons, and property from the Premises. Such property
may be removed and stored in a public warehouse or elsewhere at the
cost of and for the account of Tenant. No reentry or taking possession
of the Premises by Landlord pursuant to this Paragraph 21 shall be
construed as an election to terminate this Lease unless a written
notice of such intention is given to Tenant or unless the termination
thereof is decreed by a court of competent jurisdiction.
In the event of the vacation or abandonment of the Premises by Tenant,
or in the event that Landlord shall elect to reenter as provided above
or shall take possession of the Premises pursuant to legal proceeding
or pursuant to any notice provided by law, then if Landlord does not
elect to terminate this Lease as provided above, Landlord may from time
to time, without terminating this Lease, either recover all rent as it
becomes due or relet the Premises or any part thereof for the term of
this Lease on terms and conditions as Landlord in its sole discretion
may deem advisable with the right to make alterations and repairs to
the Premises.
22. ENTRY ON PREMISES. Landlord and its authorized representatives shall
have the right to enter the Premises at all reasonable times for any of
the following purposes: (a) to determine whether the Premises are in
good condition and whether Tenant is complying with its obligations
under this Lease; (b) to do any necessary maintenance and to make any
restoration to the Premises or the Project that Landlord has the right
or obligation to perform; (c) to post "for sale" signs at any time
during the term, to post "for rent" or "for lease" signs during the
last 90 days of the term, or during any period while Tenant is in
default; (d) to show the Premises to prospective brokers, agents,
buyers, tenants or persons interested in leasing or purchasing the
Premises, at any time during the term; or (e) to repair, maintain or
improve the Project and to erect scaffolding and protective barricades
around and about the Premises but not so as to prevent entry to the
Premises and to do any other act or thing necessary for the safety or
preservation of the Premises or the Project. Landlord shall not be
liable in any manner for an any inconvenience, disturbance, loss of
business, nuisance or other damage arising out of Landlord's entry onto
the Premises as provided in this Section 22. Tenant shall not be
entitled to an abatement or reduction of rent if Landlord exercises any
rights reserved in this Section 22. Landlord shall conduct his
activities on the Premises as provided herein in a manner that will
cause the least inconvenience, annoyance or disturbance to Tenant. For
each of these purposes, Landlord shall at all times have and retain a
key with which to unlock all
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the doors, in, upon and about the Premises, excluding Tenant's vaults
and safes. Tenant shall not alter any lock or install a new or
additional lock or bolt on any door of the Premises without prior
written consent of Landlord. If Landlord gives its consent, Tenant
shall furnish Landlord with a key for any such lock.
23. SUBORDINATION. Without the necessity of any additional document being
executed by Tenant for the purpose of effecting a subordination, and at
the election of Landlord or any mortgagee or any beneficiary of a Deed
of Trust with a lien on the Project or any ground lessor with respect
to the Project, this Lease shall be subject and subordinate at all ties
to (a) all ground leases or underlying leases which may now exist or
hereafter be executed affecting the Project, and (b) the lien of any
mortgage or deed of trust which may now exist or hereafter be executed
in any amount for which the Project, ground leases or underlying
leases, or Landlord's interest or estate in any of said items is
specified as security. In the event that any ground lease or underlying
lease terminates for any reason or any mortgage or Deed of Trust is
foreclosed or a conveyance in lieu of foreclosure is made for any
reason, Tenant shall, notwithstanding any subordination, attorn to and
become the Tenant of the successor in interest to Landlord, at the
option of such successor in interest. Tenant covenants and agrees to
execute and delivery, upon demand by Landlord and in the form requested
by Landlord any additional documents evidencing the priority or
subordination of this Lease with respect to any such ground lease or
underlying leases or the lien of any such mortgage or Deed of Trust.
Tenant hereby irrevocably appoints Landlord as attorney-in-fact of
Tenant to execute, deliver and record any such document in the name and
on behalf of Tenant.
Tenant, within ten days from notice from Landlord shall execute and
deliver to Landlord in recordable form, certificates stating that this
Lease is not in default, is unmodified and in full force and effect, or
in full force and effect as modified, and stating the modifications.
This certificate should also state the amount of current monthly rent
that dates to which rent has been paid in advance, and the amount of
any security deposit and prepaid rent. Failure to deliver this
certificate to Landlord within ten days shall be conclusive upon Tenant
that this Lease is in full force and effect and has not been modified
except as may be represented by Landlord.
24. NOTICE. Any notice, demand, request, consent, approval or communication
desired by either party or required to be given, shall be in writing
and served either personally or sent by prepaid certified first class
mail, addressed as set forth in Section 1. Either party may change its
address by notification to the other party. Notice shall be deemed to
be communicated 48 hours from the time of mailing, or from the time of
service as provided in this Section 24.
25. WAIVER. No delay or omission in the exercise of any right or remedy by
Landlord shall impair such right or remedy or be construed as a waiver.
No act or conduct of Landlord, including without limitation, acceptance
of the keys to the Premises, shall constitute an acceptance of the
surrender of the Premises by Tenant before the expiration of the term.
Only written notice from Landlord to Tenant shall constitute acceptance
of the surrender
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of the Premises and accomplish termination of the Lease. Landlord's
consent to or approval of any act by Tenant requiring Landlord's
consent or approval shall not be deemed to waive or render unnecessary
Landlord's consent to or approval of any subsequent act by Tenant. Any
waiver by Landlord of any default must be in writing and shall not be a
waiver of any other default concerning the same or any other provision
of the Lease.
26. SURRENDER OF PROMISES; HOLDING OVER. Upon expiration of the term,
Tenant shall surrender to Landlord the Premises and all Tenant
improvements and alterations in good condition, except for ordinary
wear and tear and alterations Tenant has the right or is obligated to
remove under the provisions of Section 14 herein. Tenant shall remove
all personal property including, without limitation, all wallpaper,
paneling and other decorative improvements or fixtures and shall
perform all restoration made necessary by the removal of any
alterations or Tenant's personal property before the expiration of the
term, including for example, restoring all wall surfaces to their
condition prior to the commencement of this Lease. Landlord can elect
to retain or dispose of in any manner Tenants personal property not
removed from the Premises by Tenant prior to the expiration of the
term. Tenant waives all claims against Landlord for any damage to
Tenant resulting from Landlord's retention or disposition of Tenant's
personal property. Tenant shall be liable to Landlord for Landlord's
cost for storage, removal or disposal of Tenant's personal property.
If Tenant, with Landlord's consent, remains in possession of the
Premises after expiration or termination of the term, or after the date
in any notice given by Landlord to Tenant terminating this Lease, such
possession by Tenant shall be deemed to be a month-to-month tenancy
terminable on written 30-day notice at any time, by either party. All
provisions of this Lease, except those pertaining to term and rent,
shall apply to the month-to-month tenancy. Tenant shall pay monthly
rent in an amount equal to 125% of Rent for the last full calendar
month during the regular term plus 100% of said last month's estimate
of Tenant's share of Expenses pursuant to Section 4.c.3.
27. LIMITATION OF LIABILITY. In consideration of the benefits accruing
hereunder, Tenant agrees that, in the event of any actual or alleged
failure, breach or default of this Lease by Landlord: (a) the sole and
exclusive remedy shall be against Landlord's interest in the Project,
(b) no trustee, partner, beneficiary, shareholder, director, officer,
agent or representative of Landlord shall be sued or named as a party,
in any suit or action; (c) no service of process shall be made against
any trustee, partner, beneficiary, shareholder, director, officer,
agent or representative of Landlord; (d) no trustee, partner,
beneficiary, shareholder, director, officer, agent or representative of
Landlord shall be required to answer or otherwise plead to any service
of process; (e) no judgment will be taken against any trustee, partner,
beneficiary, shareholder, director, officer, agent or representative of
Landlord and any such judgment may be vacated and set aside at any time
nunc pro tunc; and (f) no writ of execution will ever be levied against
the assets of any trustee, partner, beneficiary, shareholder, director,
officer, agent, or representative of Landlord. The obligations of
Landlord under this Lease do not constitute personal obligations of the
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individual trustees, partners, beneficiaries, shareholders, directors,
officers, agents or representatives of Landlord, and Tenant shall not
seek recourse against any such parties or any of their personal assets
for satisfaction of any liability in respect to this Lease. The
covenants and agreements set forth in this Paragraph 27 are enforceable
both by Landlord and also by its trustees, partners, beneficiaries,
shareholders, directors, officers, agents and representatives.
28. ALTERATIONS FOR HANDICAPPED ACCESS. Subject to the following
conditions, Tenant shall at its own expense be required to make all
alterations to the Premises necessary to bring the Premises into full
compliance with all federal, state and local statutes, rules,
regulations, and ordinances regarding handicapped accessibility and
use, now in existence or arising in the future, including but not
limited to the provisions of the Americans With Disabilities Act, 42
U.S.C. Sections 12101 et. seq. as may be amended. All plans and
drawings for alterations under this Article shall be submitted to
Landlord in writing before commencement of any work, and shall bear the
statement of Tenant's architect or engineer that such plans and
drawings comply with federal, state, and local statutes, rules,
regulations, and ordinances regarding handicap accessibility. Under no
circumstances may Tenant make any alterations to the Premises without
the prior written approval of Landlord.
29. MISCELLANEOUS PROVISIONS.
a. TIME OF ESSENCE. Time is of the essence of each provision of
this Lease.
b. SUCCESSOR. This Lease shall be binding on and inure to the
benefit of the parties and their successors, except as
provided in Section 19 herein.
c. LANDLORD'S CONSENT. Any consent required by Landlord under
this Lease must be granted in writing and may be withheld or
conditioned by Landlord at it sole and absolute discretion.
d. COMMISSIONS. Each party represents that it has not had
dealings with any real estate broker, finder or other person
with respect to this Lease in any manner, except for the
broker identified in Section 1, who shall be compensated by
Landlord.
e. OTHER CHARGES. If Landlord becomes a, party to any litigation
concerning this Lease, the Premises or the Project, by reason
of any act or omission of Tenant or Tenant's authorized
representatives, Tenant shall be liable to Landlord for
reasonable attorney's fees and court costs incurred by
Landlord in the litigation. Should the court render a decision
which is thereafter appealed by any party thereto, Tenant
shall be liable to Landlord for reasonable attorneys' fees and
court costs incurred by Landlord in connection with such
appeal.
If either party commences any litigation against the other
party or files an appeal of a decision arising out of or in
connection with the Lease, the prevailing party
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shall be entitled to recover from the other party reasonable
attorney's fees and costs of suit. If Landlord employs a
collection agency to recover delinquent charges, Tenant agrees
to pay all collection agency and attorneys' fees charged to
Landlord in addition to rent, late charges, interest and other
sums payable under this Lease. Tenant shall pay a charge of
$75 to Landlord for preparation of a demand for delinquent
rent.
f. LANDLORD'S SUCCESSORS. In the event of a sale or conveyance by
Landlord of the Project, the same shall operate to release
Landlord from any liability under this Lease, and in such
event Landlord's successor in interest shall be solely
responsible for all obligations of Landlord under this Lease.
g. INTERPRETATION. This Lease shall be construed and interpreted
in accordance with the laws of the state in which the premises
are located. This Lease constitutes the entire agreement
between the parties with respect to the Premises and the
Project, except for such guarantees or modifications as may be
executed in writing by the parties from time to time. When
required by the context of this Lease, the singular shall
include the plural, and the masculine shall include the
feminine and/or neuter. "Party" shall mean Landlord or tenant.
If more than one person or entity constitutes Landlord or
Tenant, the obligations imposed upon that party shall be joint
and several. The enforceability, invalidity or illegality of
any provision shall not render the other provisions
unenforceable, invalid or illegal.
30. TENANT IMPROVEMENTS. Landlord shall steam clean carpeted areas.
Additionally, Landlord will touch up the paint in the existing office
areas in a building standard paint.
31. OPTION TO RENEW. Tenant shall have one three (3) year renewal option at
the then-prevailing market rate, provided tenant is not in violation,
breach or default of any provision of this Lease at the time of
exercise. Tenant must give Landlord written notice of its intent to
exercise this renewal option not more than 180 days or less than 90
days prior to the end of the initial lease term. This option shall be
exercisable only by Tenant, and not by any assignee or sublessee of
Tenant, either voluntary or otherwise.
32. EARLY OCCUPANCY. Upon full execution of this Lease by all parries,
Landlord grants to Tenant the right to enter the Premises prior to the
Commencement Date, for the purpose of installing Tenant's fixtures and
equipment. Such Early Occupancy shall be in accordance with all terms
and conditions of this Lease. Tenant must provide evidence of insurance
according to the terms of this Lease prior to any Early Occupancy by
Tenant.
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LANDLORD:
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY, PETULA ASSOCIATES LTD.,
an Iowa corporation an Iowa corporation
By: /s/ By: /s/
------------------------------------ --------------------------------------
Its: Its:
----------------------------------- -------------------------------------
Date: Date:
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TENANT:
QUALITY CARE SOLUTIONS, INC.
an Arizona corporation
By: /s/
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Its:
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Date:
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EXHIBIT "D"
SIGN CRITERIA
PHOENIX TECH CENTER I
PHOENIX, ARIZONA
This criteria is designed to establish and maintain guidelines, consistent with
the signage policies of the Landlord and the sign ordinances of the City of
Phoenix. Tenants, when applying for signs, are requested to conform with these
guidelines and conformance will be strictly enforced by Landlord.
GENERAL:
1. Sign and permit costs are the responsibility of the Tenant.
2. All sign copy and layouts are subject to approval by the Landlord or
their appointed agents.
FORMAT:
1. Tenant ID to be vinyl die cut letters.
2. Size of primary copy not to exceed 3" high and size of secondary copy
not to exceed 2" high. Total copy area not to exceed 180 square inches
(Gross Area).
3. Letter style is to be HELVETICA MEDIUM, all upper case.
Logos or custom letterstyles are subject to approval by the Landlord or
their appointed agent.
4. Copy color is White #3650 3M standard Scotchcal color.
INSTALLATION:
1. Print or type copy, as it will appear on the sign. (Unless otherwise
specified, Helvetica Medium copy style will be used.)
2. Stylized monograms, logos or specific layout requirements, whether
furnished by Tenant or designed by the sign company, must be submitted
in clear legible form in duplicate for approval before installation.
RESTRICTIONS/VIOLATIONS/DAMAGE:
1. No electric or audible signs are permitted.
2. No additional form of advertising on the sign, building, windows, or
grounds is permitted.
3. Signs in violation will be brought into conformity at the expense of
the Tenant.
4. Upon the removal of any sign, any damage to the building or property
will be repaired at the Tenant's expense.
5. Additional signage requests by Tenants, occupying multiple suites, will
be reviewed by the Landlord for consideration.
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The following diagram is to scale and may be used to illustrate the desired
wording and placement of the sign.
You may contact the individual below for the fabrication and installation of
your sign:
EXPRESS SIGN
Fran Locker
(602) 263-8258
4442 North 7th Avenue
Phoenix, Arizona 85013
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EXHIBIT "A"
THE PREMISES
5030 EAST SUNRISE DRIVE
BUILDING 12/ENTIRE BUILDING
PHOENIX, ARIZONA
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EXHIBIT "B"
THE PROJECT
5030 EAST SUNRISE DRIVE
BUILDING 12/ENTIRE BUILDING
PHOENIX, ARIZONA
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EXHIBIT "C"
SIGN CRITERIA
[DIAGRAM OMITTED]
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