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Exhibit 10.13
OFFICE LEASE
by and between
SEOC I LIMITED PARTNERSHIP,
an Arizona limited partnership
"Landlord"
and
ORTHOPAEDIC BIOSYSTEMS LTD., INC.,
an Arizona corporation
"Tenant"
May 6, 1997
EXECUTIVE OFFICE CENTER
Scottsdale Airpark
159990 North Greenway/Hayden Loop
Scottsdale, Arizona 85260
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TABLE OF CONTENTS
Page
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1. BASIC PROVISIONS..........................................................1
2. LEASED PREMISES; ADJUSTMENTS..............................................3
3. LEASE TERM; COMMENCEMENT DATE.............................................3
4. SECURITY DEPOSIT..........................................................4
5. RENT; RENT TAX; ADDITIONAL RENT...........................................5
6. OPERATING COSTS...........................................................6
7. CONDITION, REPAIRS AND ALTERATIONS........................................9
8. SERVICES.................................................................12
9. LIABILITY AND PROPERTY INSURANCE.........................................13
10. RECONSTRUCTION..........................................................16
11. WAIVER OF SUBROGATION...................................................18
12. LANDLORD'S RIGHT TO PERFORM TENANT OBLIGATIONS..........................18
13. DEFAULT AND REMEDIES....................................................19
14. LATE PAYMENTS...........................................................22
15. ABANDONMENT AND SURRENDER...............................................22
16. INDEMNIFICATION AND EXCULPATION.........................................23
17. ENTRY BY LANDLORD.......................................................24
18. SUBSTITUTE PREMISES.....................................................25
19. ASSIGNMENT AND SUBLETTING...............................................26
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20. USE OF LEASED PREMISES AND RUBBISH REMOVAL..............................28
21. SUBORDINATION AND ATTORNMENT............................................29
22. ESTOPPEL CERTIFICATE....................................................30
23. SIGNS .................................................................31
24. PARKING.................................................................31
25. LIENS .................................................................32
26. HOLDING OVER............................................................32
27. ATTORNEYS' FEES.........................................................32
28. RESERVED RIGHTS OF LANDLORD.............................................33
29. EMINENT DOMAIN..........................................................34
30. NOTICES.................................................................35
31. RULES AND REGULATIONS...................................................35
32. ACCORD AND SATISFACTION.................................................35
33. BANKRUPTCY OF TENANT....................................................36
34. HAZARDOUS MATERIALS.....................................................39
35. MISCELLANEOUS...........................................................41
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OFFICE LEASE
1. BASIC PROVISIONS
1.1 Date: May 6, 1997
1.2 Landlord: SEOC I Limited Partnership, an
Arizona limited partnership
1.3 Landlord's Address: c/o Cavan Investments, Ltd.
15880 North Greenway Hayden Loop,
Suite 700
Scottsdale, Arizona 85260
Attention: Mr. Steven E. Barger
1.4 Tenant: Orthopaedic Biosystems Ltd., Inc., an
Arizona corporation
1.5 Tenant's Address:
(a) Prior to Commencement 7320 East Butherus, Suite 206
Date: Scottsdale, Arizona 85260
Attention: D. Ronald Yagoda,
President
(b) Subsequent to 159990 North Greenway/Hayden Loop,
Commencement Date: Suite 200
Scottsdale, Arizona 85260
1.6 Project: The parcel of real estate commonly
known as Executive Office Center,
located in Scottsdale, Maricopa
County, Arizona, legally described on
Exhibit "A" attached hereto and
incorporated herein by this
reference, together with the office
buildings now or hereafter situated
thereon, the landscaping, parking
facilities and all other improvements
and appurtenances thereto.
1.7 Building: That certain office building known as
Executive Office Center located at
159990 North Greenway Hayden Loop,
Scottsdale Airpark, Scottsdale,
Maricopa County, Arizona 85260, and
situated on the Project.
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1.8 Leased Premises: Approximately 6,130 rentable square
feet of office space commonly known
as Suite 200, as outlined on the
Floor Plan attached hereto as Exhibit
"B".
1.9 Permitted Use: General office use.
1.10 Lease Term: Five (5) years.
1.11 Scheduled Commencement Date
and Expiration Date: July 1, 1997 until June 30, 2002.
1.12 Annual Basic Rent: Lease Years 1-3: $79,690 ($6,640.83
per month); based upon a rental rate
of $13.00 per rentable square foot.
Lease Year 4: $82,142 ($6,845.16 per
month); based upon a rental rate of
$13.40 per rentable square foot.
Lease Year 5: $84,594 ($7,049.50 per
month); based upon a rental rate of
$13.80 per rentable square foot.
1.13 Security Deposit: $20,290.29
1.14 Building Hours: 7:00 a.m. to 6:00 p.m., Monday
through Friday, and 8:00 a.m. to
12:00 p.m. on Saturday, excluding
recognized federal, state and local
holidays.
1.15 Parking Spaces: 20 total parking spaces, of which 5
are covered reserved and 15 are
uncovered unreserved.
1.16 Parking Charge: $25.00 per covered reserved space per
month.
1.17 Guarantors: None.
1.18 Broker: Grubb & Ellis Company
1.19 Exhibits: A = Legal Description of the Project
B = Floor Plan
C = Memorandum of Commencement Date
D = Reserved Covered Parking License
E = Intentionally Omitted
F = Unreserved parking License
G = Work Letter
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H = Building Rules and Regulations
I = Letter of Credit
1.20 Riders: Ride 1 = Option to Extend Term
2. LEASED PREMISES; ADJUSTMENTS
2.1 Leased Premises. Landlord hereby leases to Tenant, and Tenant
hereby leases and accepts from Landlord, the Leased Premises, upon the terms and
conditions set forth in this Lease and any modifications, supplements or addenda
hereto (the "Lease"), including the Basic Provisions of Article 1 which are
incorporated herein by this reference, together with the nonexclusive right to
use, in common with Landlord and others, the Building Common Areas (defined
below) and the Project Common Areas (defined below). For the purposes of this
Lease, the term "Building Common Areas" means common hallways, corridors,
walkways and footpaths, foyers and lobbies, bathrooms and janitorial closets,
electrical and telephone closets, landscaped areas, and such other areas within
or adjacent to the Building which are subject to or are designed or intended
solely for the common enjoyment, use and/or benefit of the tenants of the
Building. The term "Project Common Areas" means common walkways, footpaths,
driveways, parking areas, service areas, landscaped areas, and such other areas
within or adjacent to the Project which are subject to or are designed or
intended solely for the common enjoyment, use and/or benefit of the tenants of
the Project.
2.2 Adjustments. The Annual Basic Rent at the Commencement Date (as
hereinafter defined) as based on the Leased Premises containing the rentable
square footage set forth in Article 1.8 above. If the actual rentable square
footage of the Leased Premises is more or less than the square footage set forth
in Article 1.8 above (to be computed, at Landlord's option, after completion of
the Leased Premises, by an architect designated by Landlord and licensed to
practice in the State of Arizona), the Annual Basic Rent shall be increased or
decreased in accordance with the rental rate set forth in Article 1.12 above.
3. LEASE TERM; COMMENCEMENT DATE
3.1 Lease Term. The Lease Term shall begin on the Commencement Date
and shall be for the period set forth in Article 1.10 above, plus any period of
less than one (1) month between the Commencement Date and the first day of the
next succeeding calendar month, unless sooner terminated in accordance with the
further provisions of this Lease.
3.2 Commencement Date. The Commencement Date shall mean the earliest
of (a) the date on which Landlord tenders possession of he Leased Premises to
Tenant; (b) the date on which Landlord would have tendered possession of the
Leased Premises to Tenant but for any act or omission of Tenant, its agents,
contractors or employees, or (c) the date on which Tenant takes possession of
the Leased Premises.
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3.3 Memorandum of Commencement Date. Landlord and Tenant shall,
within ten (10) day after the Commencement Date, execute a declaration in the
form of Exhibit "C" attached hereto specifying the Commencement Date should the
Commencement Date be a date other than the Scheduled Commencement Date.
3.4 Delay in Commencement Date. In the event Landlord shall be
unable, for any reason, to deliver possession of the Leased Premises to Tenant
on the Scheduled Commencement Date, Landlord shall not be liable for any loss or
damage occasioned thereby, nor shall such inability affect the validity of this
Lease or the obligations of Tenant. In such event, Tenant shall not be obligated
to pay Annual Basic Rent or Additional Rent until the Commencement Date. In the
event Landlord shall not have delivered possession of the Leased Premises to
Tenant within thirty (30) days after the Scheduled Commencement Date, and if
such failure to deliver possession was (a) used solely by the fault or neglect
of Landlord, and (b) not caused by any fault or neglect of Tenant or due to
additional time required to plan for and install other work for Tenant beyond
the amount of time which would have been required if only building standard
improvements had been installed, then, as its sole and exclusive remedy for
Landlord's failure to deliver possession of the Leased Premises in a timely
manner, Tenant shall have the right to terminate this Lease by delivering
written notice of termination to Landlord at any time within thirty (30) days
after the expiration of such thirty (30) day period. Such termination shall be
effective thirty (30) days after receipt by Landlord of Tenant's notice of
termination unless Landlord shall, prior to the expiration of such thirty (30)
day period, deliver possession of the Leased Premises to Tenant. Upon a
termination of this Lease pursuant to the provisions of this Article 3.4, the
parties shall have no further obligations or liabilities to the other and
Landlord shall promptly return any monies previously deposited or paid by
Tenant.
3.5 Lease Year. Each "Lease Year" shall be a period of twelve (12)
consecutive calendar months, the first Lease Year beginning on the Commencement
Date or on the first day of the calendar month next succeeding the Commencement
Date if the Commencement Date is not on the first day of a calendar month. Each
Lease Year after the first Lease Year shall begin on the calendar day next
succeeding the expiration of the immediately preceding Lease Year.
4. SECURITY DEPOSIT
Tenant shall pay to Landlord, upon the execution of this Lease, the
Security Deposit set forth in Article 1.13 above as security for the performance
by Tenant of its obligations under this Lease, which amount shall be returned to
Tenant after the expiration or earlier termination of this Lease, provided that
Tenant shall have fully performed all of its obligations contained in this
Lease. The Security Deposit, at the election of Landlord, may be retained by
Landlord as and for its full damages or may be applied in reduction of any loss
and/or damage sustained by Landlord by reason of the occurrence of any breach,
nonperformance or default by Tenant under this Lease without the waiver of any
other right or remedy available to Landlord at law, in equity or under the terms
of this Lease If any portion of the Security Deposit is so sued or applied,
Tenant shall, within five (5) days after written notice from Landlord, deposit
with Landlord immediately available funds in an amount sufficient to restore the
Security Deposit to its original amount, and Tenant's failure to do so shall
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be a breach of this Lease. Tenant acknowledges and agrees that in the event
Tenant shall file a voluntary petition pursuant to the Bankruptcy Code or any
successor thereto, or if an involuntary petition is filed against Tenant
pursuant to the Bankruptcy Code or any successor thereto, then Landlord may
apply the Security Deposit toward those obligations of Tenant to Landlord which
accrued prior to the filing of such petition. Tenant acknowledges further that
the Security Deposit may be commingled with Landlord's other funds and that
Landlord shall be entitled to retain any interest earnings thereon. In the event
of termination of Landlord's interest in this Lease, Landlord shall transfer the
Security Deposit to Landlord's other funds and that Landlord shall be entitled
to retain any interest earnings thereon. In the event of termination of
Landlord's interest in this Lease, Landlord shall transfer the Security Deposit
to Landlord's successor in interest, whereupon Landlord shall be released from
liability by Tenant for the return of such deposit or the accounting therefore.
5. RENT; RENT TAX; ADDITIONAL RENT
5.1 Payment of Rent. Tenant shall pay to Landlord the Annual Basic
Rent set forth in Article 1.12 above, subject to adjustment as provided herein.
The Annual Basic Rent shall be paid in equal monthly installments, on or before
the first day of each and every calendar month during the Lease Term, in
advance, without notice or demand and without abatement, deduction or offset. If
the Commencement date is other than the first day of a calendar month, the
payment for the partial month following the Commencement Date shall be prorated
and shall be payable on the first day of the first full calendar month of the
Lease Term. The Annual Basic Rent for the first full month of the Lease Term
shall be paid upon the execution of this Lease. All payments requiring proration
shall be prorated on the basis of a thirty (30) day month. In addition, all
payments to be made under this Lease shall be paid in lawful money of the United
States of America to Landlord or its agent at the address set forth in Article
1.3 above, or to such other person or a such other place as Landlord may from
time to time designate in writing.
5.2 Rent Tax. In addition the Annual Basic Rent and Additional Rent,
Tenant shall pay to Landlord, together with the monthly installments of Annual
Basic Rent and payments of Additional Rent, an amount equal to any governmental
taxes, including, without limitation, any sales, rental, occupancy, excise, use
or transactional privilege taxes assessed or levied upon Landlord with respect
to the amounts paid by Tenant to Landlord hereunder, as well as all taxes
assessed or imposed upon Landlord's gross receipts or gross income from leasing
the Leased Premises to Tenant, including, without limitation, transaction
privilege taxes, education excise taxes, and tax now or hereafter imposed by the
City of Scottsdale, the State of Arizona, any other governmental body, and any
taxes assessed or imposed in lieu of or in substitution of any of the foregoing
taxes. Such taxes shall not, however, include any franchise, gift, estate,
inheritance, conveyance, transfer or net income tax assessed against Landlord.
5.3 Additional Rent. In addition to Annual Basic Rent, all other
amounts to be paid by Tenant to Landlord pursuant to this Lease (including
amounts to be paid by Tenant pursuant to Article 6 below and parking charges to
be paid by Tenant pursuant to Exhibits "D" and "F"), if any, shall be deemed to
be Additional Rent, whether or not designated as such, and shall be due and
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payable within five (5) days after receipt by Tenant of Landlord's statement or
together with the next succeeding installment of Annual Basic Rent, whichever
shall first occur. Landlord shall have the same remedies for the failure to pay
Additional Rent as for the nonpayment of Annual Basic Rent.
6. OPERATING COSTS
6.1 Tenant's Obligation. The Annual Basic Rent does not include
amounts attributable to Taxes (defined below) or amounts attributable to the
cost of the use, management, repair, service insurance, condition, operation and
maintenance of the Building and the Project. therefore, in order that the Annual
Basic Rent payable throughout the Lease Term shall reflect such amounts, Tenant
shall pay to Landlord, in accordance with the further provisions of this Article
6, an amount equal to the Operating Costs (as hereinafter defined) per rentable
square foot of the Leased Preemies.
6.2 Landlord's Estimate. Landlord shall furnish Tenant an estimate
of the Operating Costs per rentable square foot for each calendar year. In
addition, Landlord may, from time to time, furnish Tenant a revised estimate of
Operating Costs should Landlord anticipate any increase in Operating Costs from
that set forth in a prior estimate. Commencing with the first month to which an
estimate applies, Tenant shall pay, in addition to the monthly installments of
Annual Basic Rent, an amount equal to one-twelfth (1/12th) of the Operating
Expenses per rentable square foot of the Leased Premises; provided, however, if
less than ninety-five percent (95%) of the rentable area of the Building shall
be occupied by tenants during the period covered by such estimate, the estimated
Operating Costs for such period shall be, for the purposes of this Article 6,
increased to an amount reasonably determined by Landlord to be equivalent to the
Operating Costs that would be incurred if occupancy would be at least
ninety-five percent (95%) during the entire period. Within one hundred twenty
(120) days after the expiration of each calendar year of such longer period of
time as may be necessary to compile such statement, Landlord shall deliver to
Tenant a statement of the actual Operating Costs for such calendar year. If the
actual Operating Costs for such calendar year are more or less than the
estimated Operating Costs, a proper adjustment shall be made; provided, however,
if less than ninety-five percent (95%) of the rentable area of the Building
shall have been occupied by tenants at any time during such period, the actual
Operating Costs for such period shall be, for the purposes of this Article 6,
increased to an amount reasonably determined by Landlord to be equivalent to the
Operating Costs that would have been incurred had such occupancy been at least
ninety-five (95%) during the entire period. Any excess amounts paid by Tenant
shall be refunded to Tenant with such statement or, at Landlord's option, may be
applied to any amounts then payable by Tenant to Landlord or to the next
maturing monthly installment of annual Basic Rent or Additional Rent. Any
deficiency between the estimated and actual Operating Costs shall be paid by
Tenant to Landlord concurrently with the monthly installment of Annual Basic
Rent next due. Any amount owing for a fractional calendar year in the first or
final lease Years of the Lease Term shall be prorated.
6.3 Operating Costs - Defined. For the purposes of this Lease,
"Operating Costs" shall mean all costs and expenses accrued, paid or incurred by
Landlord, or on Landlord's behalf, in
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respect of the use, management, repair, service, insurance, condition, operation
and maintenance of the Project including, but not limited to the following:
(a) Salaries, wages and benefits of all persons who perform
duties in connection with landscaping, parking, janitorial and general cleaning
services for the Project Common Areas and Building Common Areas, security
services and any and all other employees engaged by or on behalf of Landlord;
(b) Payroll taxes, workmen's compensation, uniforms and related
expenses for such employees;
(c) The cost of all charges for oil, gas, electricity, any
alternate source of energy, heat, ventilation, air-conditioning, refrigeration,
water, sewer service, trash collection, termite and pest control and all other
utilities, together with any taxes on such utilities provided to the Project
Common Areas or the Building Common Areas;
(d) The cost of painting the Building Common Areas and Project
Common Areas;
(e) The cost of all charges for rent, casualty, liability,
fidelity and other insurance maintained by Landlord, including any deductible
amounts incurred with respect to an insured loss;
(f) The cost of all supplies (including cleaning supplies),
tools, materials, equipment and personal property, the rental thereof and sales,
transaction privilege, excise and other taxes thereon;
(g) Depreciation of hand tools and other moveable equipment;
(h) The cost of all charges for window and other cleaning,
janitorial, security, refuse and lot sweeping;
(i) The cost of charges for independent contractors;
(j) The cost of repairs and replacements made by Landlord at its
expense and the fees and other charges for maintenance and service agreements;
(k) The cost of exterior and interior landscaping;
(l) Costs relating to the operation and maintenance of all real
property and improvements appurtenant to the Project, including, without
limitation, all parking areas, service areas, walkways and landscaping;
(m) The cost of alterations and improvements made by reason of
the laws and requirements of any public authorities or the requirements of
insurance bodies;
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(n) All management fees and other charges for management
services and overhead costs (including travel and related expenses), whether
provided by an independent management company, Landlord or an affiliate of
Landlord, not to exceed, however, the then prevailing range of rates charges in
comparable office buildings in the Phoenix, Arizona metropolitan area;
(o) The cost of any capital improvements or additions which
improve the comfort or amenities available to tenants of the Project, provided,
however, that any such costs shall be amortized with interest over the useful
life of the improvement or addition;
(p) The cost of any capital improvements or additions which are
intended to enhance the safety of the Project or reduce (or avoid increases in)
Operating Costs, provided, however, that any such costs shall be amortized with
interest over the useful life of the improvement or addition;
(q) The cost of licenses and permits, inspection fees and
reasonable legal, accounting and other professional fees and expenses;
(r) Taxes (as hereinafter defined);
(s) Costs relating to the use, management, repair, service,
insurance, condition, operation and maintenance of the Project Common Areas in
an amount equal to a fraction;
(t) Costs of monitoring and maintaining good internal air
quality in the Building and regularly inspecting, monitoring, maintaining and
repairing the Building's air quality systems, hiring outside consultants to
investigate and identify the sources of any suspected internal air quality
problems that may be identified, remedying any such problems, modifying,
renovating or encapsulating any portion of the Building or systems or components
thereof reasonably required in order to continuously and efficiently maintain
reasonably acceptable internal air quality in the Building and comply with any
and all local, state and federal regulations, or real estate industry standards
relating to internal air quality; and
(u) All other charges properly allowable in the use, management,
repair, service, insurance, condition, operation and maintenance of the Project
in accordance with generally accepted accounting principles.
6.4 Operating Costs - Exclusions. Excluded from Operating Costs
shall be the following: (a) depreciation, except to the extent expressly
included pursuant to Article 6.3 above; (b) interest on and amortization of
debts, except to the extent expressly included pursuant to Article 6.3 above;
(c) leasehold improvements, including redecorating made for tenants of the
Building; (d) brokerage commissions and advertising expenses for procuring
tenants for the Building; (e) refinancing costs; (f) the cost of any repair,
replacement or addition which would be required to be capitalized under general
accepted accounting principles, except to the extent expressly included pursuant
to Article
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6.3 above; (g) the cost of any item included in Operating Costs under Article
6.3 above to the extent that such cost is reimbursed or paid directly by an
insurance company, condemnor, a tenant of the Project or any other party; and
(h) the cost of any item included in Operating Costs under Article 6.3 above to
the extent that such cost is attributable solely to the use, management, repair,
service, insurance, condition, operation or maintenance of the Project Common
Areas, to the extent such cost is paid by tenants of other office buildings in
the Project.
6.5 Taxes - Defined. For the purposes of this Lease, "Taxes" shall
mean and include all real property taxes and personal property taxes, general
and special assessments, foreseen as well as unforseen, which are levied or
assessed upon or with respect to the Project, any improvements, fixtures,
equipment and other property of Landlord, real or personal, located on the
Project and used in connection with the operation of all or any portion of the
Project, as well as any tax, surcharge or assessment which shall be levied or
assessed in addition to or in lieu of such real or personal property taxes and
assessments. Taxes shall also include any expenses incurred by Landlord in
contesting the amount or validity of any real or personal property taxes and
assessments. Taxes shall not, however, include any franchise, gift, estate,
inheritance, conveyance, transfer or income tax assessed against Landlord.
6.6 No Waiver. The failure by Landlord to furnish Tenant with a
statement of Operating Costs shall not constitute a wavier by Landlord of its
right to require Tenant to pay excess Operating Costs per rentable square foot.
6.7 Inspection Rights. Landlord shall, if requested by Tenant,
furnish Tenant any and all reasonable backup information and documentation
pertaining to any component of Operating Costs. Tenant or its authorized agent
shall have the right, within one (1) year after receipt of Landlord's itemized
statement of Operating Costs, upon ten (10) days prior written notice to
Landlord, to inspect, at Landlord's main accounting offices, Landlord's books
and records regarding Operating Costs. Landlord agrees to maintain is books and
records at its main accounting offices for a minimum of one (1) year following
the expiation of each accounting year to which such books and records pertain.
In the event Tenant's audit shall disclose that Landlord has overstated Tenant's
pro rata share of Operating Costs by Five percent (5%) or more during any one
(1) accounting year, then Landlord shall pay for the reasonable costs of the
audit. Any refund due Tenant shall be payable in any event within forty-five
(45) days of Tenant's notice to Landlord of the conclusion of the audit together
with reasonable substantiating evidence.
7. CONDITION, REPAIRS AND ALTERATIONS
7.1 Condition. The respective obligations of Landlord and Tenant
with respect to the condition of the Leased Premises are set forth on Exhibit G
to this Lease.
7.2 Alterations and Improvements. Tenant may place partitions and
fixtures and may make improvements and other alterations to the interior of the
Leased Premises at Tenant's expense, provided, however, that prior to commencing
any such work, Tenant shall first obtain the written
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consent of Landlord which consent shall not be unreasonably withheld, to the
proposed work, including the plans, specifications, the proposed architect
and/or contractor(s) for such alterations and/or improvements and the materials
used in connection with such alterations, including, without limitation, paint,
carpeting, wall or window coverings and the use of carpet glues and other
chemicals for installation of such materials. At least ten (10) days prior to
the commencement of any construction in the Leased Premises, Tenants shall
deliver to Landlord copies of the plans and specifications for the contemplated
work and shall identify the contractor(s) selected by Tenant to perform such
work. Landlord may require that he work be done by Landlord's employees, its
construction contractors, or under Landlord's direction, but at the expense of
Tenant, and Landlord may, as a condition to consenting to such work, require
that Tenant provide security adequate in Landlord's judgment so that the
improvements or other alterations to the Leased Premises will be completed in a
good, workmanlike and lien free manner. Landlord may also require that any work
done to the interior of the Leased Premises be subject to the supervision of
Landlord or its designee, and Tenant shall pay to Landlord, upon completion of
such work, a supervision fee in an amount equal to ten percent (10%) of the cost
of such work. All such improvements or alterations must conform to and be in
substantial accordance in quality and appearance with the quality and appearance
of the improvements in the remainder of the Building. All such improvements
shall be the property of Landlord. In the event Landlord consents to the use by
Tenant of its own architect and/or contractor for the installation of any such
alterations or improvements, prior to the commencement of such work, Tenant
shall provide Landlord with evidence that Tenant's contractor has procured
worker's compensation, liability and property damage insurance (naming Landlord
as an additional insured) in a form and in an amount approved by Landlord, and
evidence that Tenant's architect and/or contractor has procured the necessary
permits, certificates and approvals from the appropriate governmental
authorities. Tenant acknowledge and agree that any review by Landlord of
Tenant's plans and specifications and/or right of approval exercised by Landlord
with respect to Tenant's architect and/or contractor is for Landlord's benefit
only and Landlord shall not, by virtue of such review or right of approval, by
deemed to make any representation, warranty or acknowledgment to Tenant or to
any other person or entity as to the adequacy of Tenant's plans and
specifications or as to the ability, capability or reputation of Tenant's
architect and/or contractor.
7.3 Tenant's Obligations. Tenant shall, at Tenant's sole cost and
expense, repair, replace and maintain the Leased Premises in a clean, neat and
sanitary condition and shall keep the Leased Premises and every part thereof in
good condition and repair (except where the same is required to be done by
Landlord) including, without limitation, the utility meters, pipers and
conduits, all fixtures, and other equipment therein, all of Tenant's signs,
locks and closing devices, all window sachets, easements or frames, doors and
door frames, floor coverings, including carpeting, terrazzo or other special
floor covering, and all such items of repair, maintenance, alteration and
improvement or reconstruction as may at any time or from time to time be
required by a governmental authority having jurisdiction whether or not
presently in effect or anticipated, including, but not limited to, enforcement
of the Americans With Disabilities Act. Tenant hereby waives all rights to make
repairs at the expense of Landlord as provided by any law, statute or ordinance
now or hereafter in effect. All of Tenant's alterations and/or improvements are
the property of the Landlord, and Tenant shall, upon the expiration or earlier
termination of the Lease Term, surrender the Leased Premises,
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including tenant's alterations and/or improvements, to Landlord, janitorial
clean and in the same condition as when received, ordinary wear and tear
excepted. Except as set forth in Article 7.4 below, Landlord has no obligation
to construct, remodel, improve, repair, decorate or paint the Leased Premises
not required to be made by Landlord and shall be responsible for any
redecorating, remodeling, alterations and painting during the Lease Term as
Tenant deems necessary. Tenant shall pay for any repairs to the Leased Premises,
the Building and/or the Project made necessary by any negligence or carelessness
of Tenant, its employees or invitees.
7.4 Landlord's Obligations. Landlord shall (a) make all necessary
repairs to the exterior walls, exterior doors, windows and corridors of the
Building, (b) maintain, repair and replace all components of the heating,
ventilating and air conditioning equipment outside of the Leased remise, and (c)
keep the Building, the Building Common Areas and the Project Common Areas in a
clean, neat and attractive condition. Landlord, shall have the right, at
Landlord's sole option, to obtain and keep a heating ventilating, and air
conditioning service contract in force and in such event, Tenant's pro rata
share of the cost of such contract shall be included in the Operating Expense
and paid by Tenant in accordance with Article 6 hereof.
7.5 Removal of Alterations. Upon the expiration or earlier
termination of this Lease, Tenant shall remove from the Leased Premises all
movable trade fixture and other movable personal property, and shall promptly
repair any damage to the Leased Premises, the Building and/or the Project caused
by such removal. All such removal and repair shall be entirely at Tenant's sole
cost and expense. Landlord may require that Tenant remove from the Leased
Premises any alterations, additions, improvements, trade fixtures, equipment,
shelving, cabinet units or movable furniture (and other personal property)
designated by Landlord to be removed. In such event, Tenant shall, in accordance
with the provisions of Article 7.2 above, complete such removal (including the
repair of any damage caused thereby) entirely at its own expense and within
fifteen (15) days after notice from Landlord. All repairs, required of tenant
pursuant to the provisions of this Article 7.5 shall be performed in a manner
reasonably satisfactory to Landlord, and shall include, but no limited to,
repairing plumbing, electrical wiring and holes in walls, restoring damaged
floor and/or ceiling tiles, repairing any other cosmetic damage and cleaning the
Leased Premises.
7.6 No Abatement. Except as provided herein, Landlord shall have no
liability to Tenant, nor shall Tenant's covenants and obligations under this
Lease including without limitation, Tenant's obligation to pay Annual Basic Rent
and Additional Rent, to be reduced or abated in any manner whatsoever by reason
of any inconvenience, annoyance, interruption or injury to business arising from
Landlord's making any repairs or changes which Landlord is required or permitted
to make pursuant to the terms of this Lease or by any other tenant's Lease or
are required by law to be made in and to any portion of the Leased Premises, the
Building or the Project. Landlord shall, nevertheless, use reasonable efforts to
minimize any interference with Tenant's business in the Leased Premises.
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8. SERVICES
8.1 Climate Control. Landlord shall provide reasonable climate
control to the Building Common Areas during the Building Hours as is suitable,
in Landlord's judgment, for the comfortable use and occupation of the Building
Common Areas.
8.2 Janitorial Services. Landlord shall make janitorial and cleaning
services available to the Building Common Areas and the Project Common Areas.
Tenant shall be responsible and shall procure janitorial and cleaning services
for the Leased Premises.
8.3 Electricity. Electricity shall be separately metered and Tenant
shall be solely responsible for the cost of all electric current furnished to
the Leased Premises. Tenant's use of electric energy in the Leased Premises
shall not at any time exceed the capacity of any of the risers, piping,
electrical conductors and other equipment in or serving the Leased Premises. In
order to insure that such capacity is not exceeded and to avert any possible
adverse effect on the Building's electric system, Tenant shall not, without
Landlord's prior written consent in each instance, connect appliances, machines
using current in excess of 120 volts or heavy-duty equipment other than ordinary
office equipment to the Building's electric system or make any alterations or
additions to the Building's electric system. Should Landlord grant such consent,
all additional risers, piping and electrical conductors and other equipment
therefor shall be provided by Landlord and the cost thereof shall be paid by
Tenant within ten (10) days after receipt of Landlord's bill.
8.4 Water. Landlord shall furnish cold and heated water for drinking
and lavatory purposes to the Building Common Areas.
8.5 Heat Generating Equipment. Whenever heat generating machines or
equipment used in the Leased Premises affect the temperature otherwise
maintained by the climate control system, Landlord shall have the right to
install supplementary air-conditioning units in the Leased Premises and the cost
thereof, including the cost of installation, operation and maintenance shall be
paid by Tenant to Landlord within five (5) days after receipt by Tenant of
Landlord's statement.
8.6 Separate Meters. Landlord may install separate meters for the
Leased Premises to register the usage of all or any one of the utilities serving
the Leased Premises and in such event, Tenant shall pay for the cost of utility
usage as metered (a) during other than Building Hours, or (b) which is in excess
of that usage customary for general office use. Tenant shall reimburse Landlord
for the cost of installation of the meters. In addition, Landlord shall have the
right to require that Tenant reduce its consumption of utilities furnished to
the Leased Premise to a level not exceeding normal consumption for general
office use as determined by Landlord in its reasonable business judgment.
8.7 Additional Services. Tenant shall pay to Landlord, monthly as
billed, as Additional Rent, Landlord's charge for services furnished by Landlord
to Tenant in excess of that agreed to be furnished by Landlord pursuant to this
Article 8, including, but not limited to (a) any utility services
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utilized by Tenant during other than Building Hours or for computers, data
processing equipment or other electrical equipment in excess of the amounts of
electric current used for general office use in buildings comparable to the
Building, and (b) climate control in excess of that agreed to be furnished by
Landlord pursuant to Article 8.1 above or provided at times other than Building
Hours.
8.8 Interruptions in Service. Landlord does not warrant that any of
the foregoing services or any other services which Landlord may supply will be
free from interruption. Tenant acknowledges that any one or more of such
services may be suspended by reason of accident, repairs, inspections,
alterations or improvements necessary to be made, or by strikes or lockouts, or
by reason of operation of law, or by causes beyond the reasonable control of
Landlord. Landlord shall not be liable for and Tenant shall not be entitled to
any abatement or reduction of Annual Base Rent or Additional Rent by reason of
any disruption of the services to be provided by Landlord pursuant to this
Lease.
9. LIABILITY AND PROPERTY INSURANCE
9.1 Liability Insurance. Tenant shall, during the Lease Term, keep
in full force and effect, a policy or policies of commercial general liability
insurance for personal injury (including wrongful death) and damage to property
covering (a) any occurrence in the Leased Premises, (b) any act or omission by
Tenant, by any subtenant of Tenant, or by any of their respective invitees,
agents, servants or employees anywhere in the Leased Premises or the Project,
(c) the business operated by Tenant and by any subtenant of Tenant in the Leased
Premises, and (d) the contractual liability of Tenant to Landlord pursuant to
the indemnification provisions of Article 16.1 below, which coverage shall not
be less than One Million and No/100 Dollars ($1,000,000.00) per occurrence and
Two Million and No/100 dollars ($2,000,000.00) combined single limit. If
Landlord shall so request, Tenant shall increase the amount of such liability
insurance to the amount then customary for premises and uses similar to the
Leased Premises and Tenant's use thereof. The liability policy or policies shall
contain an endorsement naming Landlord, its partners and any persons, firms or
corporations designated by Landlord as additional insureds, and shall provide
that the insurance carrier shall have the duty to defend and/or settle any legal
proceeding filed against Landlord seeking damages based upon bodily injury or
property damage liability even if any of the allegations of such legal
proceedings are groundless, false or fraudulent.
9.2 Property Insurance. Tenant shall, during the Lease Term, keep in
full force and effect, a policy or policies of insurance with "Special Form
Coverage," including coverage for vandalism or malicious mischief, insuring the
Tenant Improvements as defined on Exhibit G hereto or Tenant's alterations
and/or improvements made pursuant to Article 7.2 above and Tenant's stock in
trade, furniture, personal property, fixtures, equipment and other items in the
Leased Premises, with coverage in an amount equal to the full replacement cost
thereof.
9.3 Worker's Compensation Insurance. Tenant shall, during the Lease
Term, keep in full force and effect, a policy or policies of worker's
compensation insurance with an insurance carrier and in amounts approved by the
Industrial Commission of the State of Arizona.
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9.4 Business Interruption Insurance. Tenant shall, during the Lease
Term, keep in full force and effect, a policy or policies of business
interruption insurance in an amount equal to twelve (12) monthly installments of
Annual Basic Rent and Additional Rent payable to Landlord, together with the
taxes thereon, insuring Tenant against losses sustained by Tenant as a result of
any cessation or interruption of Tenant's business in the Leased Premises for
any reason.
9.5 Insurance Requirements. Each insurance policy and certificate
thereof obtained by Tenant pursuant to this Lease shall contain a clause that
the insurer will provide Landlord, its partners and any persons, firms or
corporations designated by Landlord with at least thirty (30) days prior written
notice of any material change, non-renewal or cancellation of the policy. Each
such insurance policy shall be with an insurance company authorized to do
business in the State of Arizona and reasonably acceptable to Landlord.
Certified copies of all insurance policies evidencing the coverage under each
such policy, as well as a certified copy of the required additional insured
endorsement(s) shall be delivered to Landlord prior to commencement of the Lease
Term. Each such policy shall provide that any loss payable thereunder shall be
payable notwithstanding (a) any act, omission or neglect by Tenant or by any
subtenant of Tenant, or (b) any occupation or use of the Leased Premises or any
portion thereof by Tenant or by any subtenant of Tenant for purposes more
hazardous than permitted by the terms of such policy or policies, or (c) any
foreclosure or other action or proceeding taken by any mortgagee or trustee
pursuant to any provision of any mortgage or deed of rust covering the Leased
Premises, the Building or the Project, or (d) any change in title or ownership
of the Project. All insurance policies required pursuant to this Article 9 shall
be written as primary policies, not contributing with or in excess of any
coverage which Landlord may carry. Tenant shall procure and maintain all
policies entirely at its own expense and shall, at least twenty (20) days prior
to the expiration of such policies, furnish Landlord with certified copies of
replacement policies or renewal certificates for existing policies in
conformance with Accord Form No. 27 (March 1993). Tenant shall not do or permit
to be done anything which shall invalidate the insurance policies maintained by
Landlord or the insurance policies required pursuant to this Article 9 or the
coverage thereunder. If Tenant or any subtenant of Tenant does or permits to be
done anything which shall increase the cost of any insurance policies maintained
by Landlord, then Tenant shall reimburse Landlord for any additional premiums
attributable to any act or omission or operation of Tenant or any subtenant of
Tenant causing such increase in the cost of insurance. Any such amount shall be
payable as Additional Rent within five (5) days after receipt by Tenant of a
bill from Landlord. All policies of insurance shall name both Landlord and
Tenant (and/or such other party or parties as Landlord may require) as insureds
and shall be endorsed to indicate that the coverage provided shall not be
invalid due to any act or omission on he part of Landlord.
9.6 Co-Insurance. If on account of the failure of Tenant to comply
with the provisions of this Article 9, Landlord is deemed a co-insurer by its
insurance carrier, then any loss or damage which Landlord shall sustain by
reason thereof shall be borne by Tenant, and shall be paid by Tenant within five
(5) days after receipt of a bill therefore
9.7 Adequacy of Insurance. Landlord makes no representation or
warranty to Tenant that the amount of insurance to be carried by Tenant under
the terms of this Lease is adequate to fully
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protect Tenant's interests. If Tenant believes that the amount of any such
insurance is insufficient, Tenant is encouraged to obtain, at its sole cost and
expense, such additional insurance as Tenant may deem desirable or adequate.
Tenant acknowledges that Landlord shall not, by the fact of approving
disapproving, waiving, accepting, or obtaining any insurance, incur any
liability for or with respect to the amount of insurance carried, the form or
legal sufficiency of such insurance, the solvency of any insurance companies or
the payment or defense of any lawsuit in connection with such insurance
coverage, and Tenant hereby expressly assumes full responsibility therefor and
all liability, if any, with respect thereto.
9.8 Self-Insurance. Tenant shall have the right to self-insure for
the liability insurance, the property insurance and the business interruption
insurance required by Articles 9.1, 9.2 and 9.4, respectively, subject to the
requirements of this Article 9.8.
(a) For purposes of this Article 9.8, "self-insurance" shall
mean that Tenant is itself acting as though it were the insurance company
providing the insurance required under the provisions of this Article 9 and
Tenant shall pay any amounts due in lieu of insurance proceeds as required under
the provisions of this Lease, which amounts shall be treated as insurance
proceeds for all purposes under this Lease.
(b) All amounts which Tenant pays or is required to pay and all
losses or damages resulting from risks for which Tenant has elected to
self-insure shall be subject to the waiver of subrogation provisions in Article
11 below and shall not limit Tenant's indemnification obligations set forth in
Article 16.1 below.
(c) Tenant's right to self-insure and to continue to self-insure
is conditioned upon and subject to:
(i) The Tenant having a net worth, calculated in accordance
with generally accepted accounting principles, consistently applied,
of at least One Hundred Million Dollars ($100,000,000.00).
(ii) The Tenant providing an audited financial statement,
prepared in accordance with generally accepted accounting principles
consistently applied, to Landlord on or before the date which is
thirty (30) days prior to the upcoming annual anniversary of the
Commencement Date which establishes and confirms that Tenant has the
required net worth, unless events occur that make it apparent that
such net worth has diminished below the required level (such as the
bankruptcy of Tenant), in which event Tenant shall not be permitted
to continue to self-insure; and
(iii) The Tenant maintaining appropriate loss reserves which
are actuarially derived in accordance with accepted standards of the
insurance industry and accrued (i.e., charged against earnings) or
otherwise funded.
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(d) In the event that Tenant elects to self-insure and an event
or claim occurs for which a defense and/or coverage would have been available
from the insurance company Tenant shall:
(i) undertake the defense of any such claim, including a
defense of Landlord, at Tenant's sole cost and expense, and
(ii) use its own funds to pay any claim or replace any
property or otherwise provide the funding which would have been
available from insurance proceeds but for such election by Tenant to
self-insure.
(e) In the event Tenant has the right and elects that it will
not operate its business in the Leased Premises after the Leased Premises are
damaged or destroyed, Landlord shall have the right to determine that the
self-insurance proceeds either be paid to Landlord:
(i) for restoration of the Leased Premises in accordance
with Article 10 below and Tenant's liability and obligations under
this Lease shall continue in full force and effect, or
(ii) to terminate this Lease in accordance with the
provisions of Article 10 below.
(f) Tenant shall provide Landlord and Superior Mortgagee
(defined below) or Superior Lessor (defined below) with certificates of
self-insurance specifying the extent of self-insurance coverage hereunder and
containing a waiver of subrogation provision reasonably satisfactory to
Landlord. Any insurance coverage provided by Tenant shall be for the benefit of
Landlord, the superior Mortgagee and the Superior Lessor as their respective
interests may appear.
10. RECONSTRUCTION
10.1 Insured Damage. In the event the Leased Premises are damaged
during the Lease Term by fire or other perils covered by Landlord's insurance,
Landlord shall:
(a) Subject to Force Majeure, within a period of thirty (30)
days after receipt by Landlord of insurance proceeds and the adjustment of the
loss with the Superior Mortgagee and/or the Superior Lessor, as the case may be,
and its insurer, and provided there is not then in existence of an Event of
Default, commence repair, reconstruction and restoration of the Leased Premises
and prosecute the same diligently to completion, in which event this Lease shall
continue in full force and effect.
(b) In the event of a partial or total destruction of either
the Leased Premises, the Building or the Project during the last two (2) years
of the Lease Term, Landlord shall have the option to terminate this Lease upon
giving written notice to Tenant within sixty (60) days after such
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destruction. For purpose of this Article 10, "partial destruction" shall be
deemed destruction to an extent of at least thirty-three and one-third percent
(33.33%) of the then full replacement cost of the Leased Premises, the Building
or the Project as of the date of destruction.
(c) In the event that Superior Mortgagee shall require that
insurance proceeds be applied against the principal balance due on the Superior
Mortgage (defined below), then Landlord may, at Landlord's option and upon sixty
(60) days written notice to Tenant, elect to terminate this Lease.
10.2 Uninsured Damage. In the event the Leased Premises, the
Building or the Project shall be damaged as a result of any casualty not covered
by Landlord's insurance, to any extent whatsoever, Landlord may, subject to
Force Majeure, within sixty (60) days following the date of the casualty,
commence repair, reconstruction or restoration of the Leased Premises, in which
event this Lease shall continue in full force and effect, or within such sixty
(60) day period elect not to so repair, reconstruct or restore the Leased
Premises, the Building or the Project, as the case may be, in which event this
Lease shall cease and terminate. In either event, Landlord shall give Tenant
written notice of Landlord's intention within such one hundred eighty (180) day
period.
10.3 Reconstruction. In the event of any reconstruction of the
Leased Premises, the Building or the Project pursuant to this Article 10, such
reconstruction shall be in conformity with all city, county, state and federal
ordinances, rules and regulations then in existence, as the same may be
interpreted and enforced. Notwithstanding that all reconstruction work shall be
performed by Landlord's contractor unless Landlord shall otherwise agree in
writing, Landlord's obligation to reconstruct the Leased Premises shall be only
to the comparable condition of the Leased Premises immediately prior to the
Commencement Date. Landlord's obligation to repair and reconstruct the Leased
Premises shall be limited to the amount of net proceeds of insurance received by
Landlord, subject to reduction pursuant to Article 10.1(c) above. Any extra
expenses incurred by Landlord in the reconstruction of the Leased Premises, the
Building or any other portion of the Project as a result of the violation by
Tenant of the terms and conditions set forth in Article 34 below shall be borne
by Tenant. Tenant, at Tenant's sole cost and expense, shall be responsible for
the repair and restoration of all items of the Tenant Improvements or Tenant's
improvements and/or alterations installed pursuant to Article 7.2 and the
replacement of Tenant's stock in trade, trade fixtures, furniture, furnishings
and equipment. Tenant shall commence the installation of fixtures, equipment and
merchandise promptly upon delivery to Tenant of possession of the Leased
Premises and shall diligently prosecute such installation to completion.
10.4 Termination. Upon any termination of this Lease under any of
the provisions of this Article 10, Landlord and Tenant each shall be released
without further obligations to the other coincident with the surrender of
possession of the Leased Premises to Landlord, except for items which have
previously accrued and remain unpaid. In the event of termination, all proceeds
from Tenant's property insurance coverage and covering the Tenant Improvements
or Tenant's improvements and/or alterations installed pursuant to Article 7.2,
but excluding proceeds for trade
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fixtures, merchandise, signs and other removable personal property, shall be
disbursed and paid to Landlord.
10.5 Abatement. In the event of repair, reconstruction and
restoration of the Leased Premises, the Minimum Annual Rental and Additional
Rent shall be abated proportionately with the degree to which Tenant's use of
the Leased Premises is impaired commencing from the date of destruction and
continuing during the period of such repair, reconstruction or restoration.
Tenant shall continue the operation of Tenant's business at the Leased Premises
during any such period to the extent reasonably practicable from the standpoint
of prudent business management. Tenant shall not be entitled to any compensation
or damages from Landlord for loss of the use of the whole or any part of the
Leased Premises, or the building of which the Leased Premises are a part,
Tenant's personal property or for any inconvenience or annoyance occasioned by
such damage, repair, reconstruction or restoration.
10.6 Waiver. Tenant hereby waives any statutory and common law
rights or termination which may arise by reason of any partial or total
destruction of the Leased Premises which Landlord is obligated to restore or may
restore under any of the provisions of this Lease, including the provisions of
A.R.S. Section 33-343.
11. WAIVER OF SUBROGATION
Tenant hereby waives its rights and the subrogation rights of its
insurer against Landlord and any other tenants of space in the Building of the
Project, as well as their respective members, officers, employees, agents,
authorized representatives and invitees, with respect to any claims including,
but not limited to, claims for injury to any persons, and/or damage to the
Leased Premises and/or any fixtures, equipment, personal property, furniture,
improvements and/or alterations in or to the Leased Premises, which are caused
by or result from (a) risks or damages required to be insured against under this
Lease, or (b) risks and damages which are insured against by insurance policies
maintained by Tenant from time to time. Tenant shall obtain for Landlord from
its insurers under each policy required by this Lease a waiver of all rights of
subrogation which such insurers of Tenant might otherwise have against Landlord.
12. LANDLORD'S RIGHT TO PERFORM TENANT OBLIGATIONS
All covenants and agreements to be performed by Tenant under any of
the terms of this Lease shall be performed by Tenant at Tenant's sole cost and
expense and without any abatement of Annual Basic Rent or Additional Rent. If
Tenant shall fail to pay any sum of money, other than Annual Basic Rent,
required to be paid by it hereunder, or shall fail to perform any other act on
its part to be performed hereunder, and such failure shall continue for five (5)
days after notice thereof by Landlord (or such shorter period of time as may be
reasonable following oral notice to Tenant's personnel in the Leased Premises),
Landlord may (but shall not be obligated to do so) without waiving or releasing
Tenant from any of Tenant's obligations, make any such payment or perform any
such other act on behalf of Tenant. All sums so paid by Landlord and all
necessary incidental
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costs, together with interest thereon at the greater of (a) eighteen percent
(18%) per annum or (b) the rate of interest per annum publicly announced, quoted
or published, from time to time, by Bank of America, at its Phoenix, Arizona
office as its "reference rate" plus four (4) percentage points, from the date of
such payment by Landlord until reimbursement in full by Tenant (the "Default
Rate"), shall be payable to Landlord as Additional Rent with the next monthly
installment of Annual Basic Rent; provided, however, in no event shall the
Default Rate exceed the maximum rate (if any) permitted by applicable law.
13. DEFAULT AND REMEDIES
13.1 Event of Default. The occurrence of any one or more of the
following events will constitute an "Event of Default" on the part of Tenant:
(a) Failure to pay any installment of Annual Basic Rent, any
Additional Rent or any other sum required to be paid by Tenant under this Lease,
and such failure shall continue for five (5) days;
(b) Failure to perform any of the other covenants or conditions
which Tenant is required to observe and perform (except failure in the payment
of Annual Basic Rent, Additional Rent or any other monetary obligation contained
in this Lease) and such failure shall continue for fifteen (15) days (or such
shorter period of time as may be specified by Landlord in the event of an
emergency) after written notice thereof by Landlord to Tenant, provided that if
such default is other than the payment of money and cannot be cured within such
fifteen (15) day period, then an Event of Default shall not have occurred if
Tenant, within such fifteen (15) period, commences curing of such failure and
diligently in good faith prosecutes the same to completion and furnishes
evidence thereof to Landlord within thirty (30) days thereafter;
(c) If any warranty, representation or statement made by Tenant
to Landlord in connection with this Lease is or was materially false or
misleading when made or furnished;
(d) The occurrence of an Event of Default under any other
agreement between Landlord and Tenant;
(e) The levy of a writ of attachment or execution or other
judicial seizure of substantially all of Tenant's assets or its interest in this
Lease, such attachment, execution or other seizure remaining undismissed or
discharged for a period of thirty (30) days after the levy thereof;
(f) The filing of any petition by or against Tenant or any
Guarantor to declare Tenant or any Guarantor a bankrupt or to delay, reduce or
modify Tenant's or any Guarantor's debts or obligations, which petition is not
discharged within forty five (45) days after the date of filing;
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(g) The filing of any petition or other action taken to
reorganize or modify Tenant's or any Guarantor's capital structure, which
petition is not discharged within forty five (45) days after the date of filing;
(h) If Tenant or any Guarantor shall be declared insolvent
according to law;
(i) A general assignment by Tenant or any Guarantor for the
benefit of creditors;
(j) The appointment of a receiver or trustee for Tenant or any
Guarantor or all or any of their respective property, which appointment is not
discharged within forty five (45) days after the date of filing;
(k) The filing by Tenant or any Guarantor of a voluntary
petition pursuant to the Bankruptcy Code or any successor thereto or the filing
of an involuntary petition against Tenant or any Guarantor pursuant to the
Bankruptcy Code or any successor legislation, which petition is not discharged
within forty five (45) days after the date of filing; or
(l) The occurrence of an Event of Default under the other
provisions of this Lease.
13. Remedies. Upon the occurrence of an Event of Default under this
Lease by Tenant, Landlord may, without prejudice to any other rights and
remedies available to a landlord at law, in equity or by statute, Landlord may
exercise one or more of the following remedies, all of which shall be construed
and held to be cumulative and non-exclusive: (a) Terminate this Lease and
re-enter and take possession of the Leased Premises, in which event, Landlord is
authorized to make such repairs, redecorating, refurbishments or improvements to
the Leased Premises as may be necessary in the reasonably opinion of Landlord
acting in good faith for the purposes of reletting the Leased Premises and the
costs and expenses incurred in respect of such repairs, redecorating and
refurbishments and the expenses of such reletting (including brokerage
commissions) shall be paid by Tenant to Landlord within five (5) days after
receipt of Landlord's statement; or (b) without terminating this Lease, re-enter
and take possession of the Leased Premises; or (c) Without such re-entry,
recover possession of the Leased Premises in the manner prescribed by any
statute relating to summary process, and any demand for Annual Basic Rent,
re-entry for condition broken, and any and all notices to quit, or other
formalities of any nature to which Tenant may be entitled, are hereby
specifically waived to the extent permitted by law; or (d) Without terminating
this Lease, Landlord may relet the Leased Premises as Landlord may see fit
without thereby avoiding or terminating this Lease, and for the purposes of such
reletting, Landlord is authorized to make such repairs, redecorating,
refurbishments or improvements to the Leased Premises as may be necessary in the
reasonable opinion of Landlord acting in good faith for the purpose of such
reletting, and if a sufficient sum is not realized from such reletting (after
payment of all costs and expenses of such repairs, redecorating and
refurbishments and expenses of such reletting (including brokerage commissions)
and the collection of rent accruing therefrom) each month to equal the Annual
Basic Rent and Additional Rent payable hereunder, then Tenant shall pay such
deficiency each month
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within five (5) days after receipt of Landlord's statement; or (c) Landlord may
declare immediately due and payable all the remaining installments of Annual
Basic Rent and Additional Rent, and such amount, less the fair rental value of
the Leased Premises for the remainder of the Lease Term shall be paid by Tenant
within five (5) days after receipt of Landlord's statement. Landlord shall not
by re-entry or any other act, be deemed to have terminated this Lease, or the
liability of Tenant for the total Annual Basic Rent and Additional Rent reserved
hereunder or for any installment thereof then due or thereafter accruing, or for
damages, unless Landlord notifies Tenant in writing that Landlord has so elected
to terminate this Lease. After the occurrence of an Event of Default, the
acceptance of Annual Basic Rent or Additional Rent, or the failure to re-enter
by Landlord shall not be deemed to be a waiver of Landlord's right to thereafter
terminate this Lease and exercise any other rights and remedies available to it,
and Landlord may re-enter and take possession of the Leased Premises as if no
Annual Basic Rent or Additional Rent had been accepted after the occurrence of
an Event of Default. Upon an Event of Default, Tenant shall also pay to Landlord
all costs and expenses incurred by Landlord, including court costs and
reasonable attorneys' fees, in retaking or otherwise obtaining possession of the
Leased Premises, removing and storing all equipment, fixtures and personal
property on the Leased Premises and otherwise enforcing any of Landlord's
rights, remedies or recourses arising as a result of an Event of Default.
13.3 Additional Remedies. All of the remedies given to Landlord in
this Lease in the event tenant commits an Event of Default are in addition to
all other rights or remedies available to a landlord at law, in equity or by
statute, including, without limitation, the right to seizure and sell all goods,
equipment and personal property of Tenant located in the Leased Premises and
apply the proceeds thereof to all due and unpaid Annual Basic Rent, Additional
Rent and other amounts owing under the Lease. All rights, options and remedies
available to Landlord shall be construed and held to be cumulative, and no one
of them shall be exclusive of the other. Upon the occurrence of an Event of
Default, all rights, privileges and contingencies which may be exercised by
Tenant under the Lease, including, without limitation, options to renew, extend
and expand, as well as relocation rights, contraction rights and any other
rights which may be exercised by Tenant during the Lease Term, shall be
suspended until such Event of Default is cured; provided, however, if two (2) or
more Events of Default have occurred in any twelve (12) month period such
relocation rights, construction rights and any other rights which may be
executed by Tenant during the Lease Term shall be void and of no further force
and effect.
13.4 Interest on Past Due Amounts. In addition to the late charge
described in Article 14 below, if any installment of Annual Basic Rent or
Additional Rent is not paid promptly when due, it shall bear interest at the
Default Rate; provided, however, this provision shall not relieve Tenant from
any default in the making of any payment at the time and in the manner required
by this Lease; and provided, further, in no event shall the Default Rate exceed
the maximum rate (if any) permitted by applicable law.
13.5 Landlord Default. In the event Landlord should neglect or fail
to perform or observe any of the covenants, provisions or conditions contained
in this Lease on its part to be performed or observed, and such failure
continues for thirty (30) days after written notice of default (or if more
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than thirty (30) days shall be required because of the nature of the default, if
Landlord shall fail to commence the curing of such default within such thirty
(30) day period and proceed diligently thereafter), then Landlord shall be
responsible to Tenant for any actual damages sustained by Tenant as a result of
Landlord's breach, but not special or consequential damages. Should Tenant given
written notice to Landlord to correct any default, tenant shall give similar
notice to the holder of any mortgages or deed of trust against the Building or
the lessor of any ground lease, and prior to any cancellation of this Lease, the
holder of such mortgage or deed of trust and/or the lessor under such ground
lease shall be given a reasonable period of time to correct or remedy such
default. If and when such holder of such mortgage or deed of trust and/or the
lessor under any such ground lease has made performance on behalf of Landlord,
the default of Landlord shall be deemed cured. Notwithstanding any other
provisions in this Lease, any claim which Tenant may have against Landlord for
failure to perform or observe any of the covenants, provisions or conditions
contained in this Lease shall be deemed waived unless such claim is asserted by
written notice thereof to Landlord within ten (10) days of commencement of the
alleged default or of occurrence of the cause of action and unless suit be
brought thereon within six (6) months subsequent to the occurrence of such cause
of action. Tenant shall have no right to terminate this Lease, except as
expressly provided elsewhere in this Lease.
14. LATE PAYMENTS
Tenant hereby acknowledges that the late payment by Tenant to
Landlord of any monthly installment of Annual Basic Rent, any Additional Rent or
any other sums due hereunder will cause Landlord to incur costs not contemplated
by this Lease, the exact amount of which will be extremely difficult and
impracticable to ascertain. Such costs include but are not limited to
processing, administrative and accounting costs. Accordingly, if any monthly
installment of Annual Basic Rent, any Additional Rent or any other sum due from
Tenant shall not be received by Landlord within five (5) days after the date
when due, Tenant shall pay to Landlord a late charge equal to five percent (5%)
of such overdue amount or One Hundred and No/100 Dollars ($100.00), whichever is
greater. Tenant acknowledges that such late charge represents a fair and
reasonable estimate of the costs Landlord will incur by reason of late payments
by Tenant. Neither assessment nor acceptance of a late charge by Landlord shall
constitute a wavier of Tenant's default with respect to such overdue amount, nor
prevent Landlord from exercising any of the other rights and remedies available
to Landlord. Nothing contained in this Article 14 shall be deemed to condone,
authorize, sanction or grant to Tenant an option for the late payment of Annual
Basic Rent, Additional Rent or any other sum due hereunder.
15. ABANDONMENT AND SURRENDER
15.1 Abandonment. No act or thing done by Landlord or by any agent
or employee of Landlord during the Lease Term shall be deemed an acceptance of a
surrender of the Leased Premise unless such acceptance is expressed in writing
and duly executed by Landlord. Unless Landlord so agrees in writing, the
delivery of the Key to the Leased Premises to any employee or agent of Landlord
shall not operate as a termination of this Lease or as a surrender of the Leased
Premises.
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15.2 Surrender. Tenant shall, upon the expiration or earlier
termination of this Lease, peaceably surrender the Leased Premises, including
any [Tenant Improvements] or [Tenant's improvements and/or alterations installed
pursuant to Article 7.2], in a janitorial clean condition and otherwise in as
good condition as when Tenant took possession, except for (i) reasonable wear
and tear subsequent to the last repair, replacement, restoration, alteration or
renewal; (ii) loss by fire or other casualty, and (iii) loss by condemnation. If
Tenant shall abandon, vacate or surrender the Leased Premises, or be
dispossessed by process of law or otherwise, any personal property and fixtures
belonging to Tenant and left in the Leased Premises shall be deemed abandoned
and, at Landlord's option, title shall pass to Landlord under this Lease as by a
bill of sale. Landlord may, however, if it so elects, remove all or any part of
such personal property from the Leased Premises and the costs incurred by
Landlord in connection with such removal, including storage costs and the cost
of repairing any damage to the Leased Premises, the Building and/or the Project
caused by such removal shall be paid by Tenant within five (5) days after
receipt of Landlord's statement. Upon the expiration or earlier termination of
this Lease, Tenant shall surrender to Landlord all keys to the Leased Premises
and shall inform Landlord of the combination of any vaults, locks and safes left
on the Leased Premises. The obligations of Tenant under this Article 15.2 shall
survive the expiration or earlier termination of this Lease. Tenant shall
indemnify Landlord against any loss or liability resulting from delay by Tenant
in so surrendering the Premises, including, without limitation, any claims made
by any succeeding Tenant founded on such delay. Tenant shall given written
notice to Landlord at least thirty (30) days prior to vacating the Leased
Premises for the express purpose of arranging a meeting with Landlord for a
joint inspection of the Leased Premises. In the event of Tenant's failure to
give such notice or to participate in such joint inspection, Landlord's
inspection at or after Tenant's vacation of the Leased Premises shall be
conclusively deemed correct for purpose of determining Tenant's liabilities for
repairs and restoration hereunder.
16. INDEMNIFICATION AND EXCULPATION
16.1 Indemnification. Tenant shall indemnify, protect, defend and
hold Landlord harmless from and against, and shall be responsible for, all
claims, damages, losses, costs, liens, encumbrances, liabilities and expenses,
including reasonable attorneys', accountants' and investigators' fees and court
costs (collectively, the "Claims"), however caused (unless caused by Landlord's
gross negligence or willful misconduct), arising in whole or in part from
Tenant's use of all or any part of the Leased Premises, the Building and/or the
Project or the conduct of Tenant's business or from any activity, work or thing
done, permitted or suffered by Tenant or by any invitee, servant, agent,
employee or subtenant of Tenant in the Leased Premises, the Building and/or the
Project, and shall further indemnify, protect, defend and hold Landlord harmless
from and against, and shall be responsible for, all Claims arising in whole or
in part from any breach or default in the performance of any obligation on
Tenant's part to be performed under the terms of this Lease or arising in whole
or in part from any act, neglect, fault or omission by Tenant or by any invitee,
servant, agent, employee or subtenant of Tenant anywhere in the Leased Premises,
the Building and/or the Project. In the case any action or proceeding is brought
against Landlord to which this indemnification shall be applicable, Tenant shall
pay all Claims resulting therefrom and shall defend such action or proceeding,
if Landlord shall so request, at Tenant's sole cost and expense, by counsel
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reasonably satisfactory to Landlord. The obligations of Tenant under this
Article 16.1 shall survive the expiration or earlier termination of this lease.
16.2 Exculpation. Tenant, as a material par of the consideration to
Landlord, hereby assumes all risk of damage to property, injury and death to
persons and all claims of any other nature resulting from Tenant's use of all or
any part of the Leased Premises, the Building and/or the Project, and Tenant
hereby waives all claims in respect thereof against Landlord. Neither Landlord
nor its agents or employees shall be liable for any damaged property of Tenant
entrusted to any employee or agent of Landlord or for loss of or damage to any
property of Tenant by theft or otherwise. Landlord shall not be liable for any
injury or damage to persons or property resulting from any cause, including, but
not limited to, fire, explosion, falling plaster, steam, gas, electricity,
sewage, odor, noise, water or rain which may leak from any part of the Building
or from the pipes, appliances or plumbing works therein, or from the roof of any
structure on the Project, or from any streets or subsurfaces on or adjacent to
the Building or the Project, or from any other place or resulting from dampness
or any other causes whatsoever, unless caused by the gross negligence or willful
misconduct of Landlord. Neither Landlord nor its employees or agents shall be
liable for any defects in the Leased Premises, the Building and/or Project, nor
shall Landlord be liable for the negligence or misconduct, including, but not
limited to, criminal acts, by maintenance or other personnel or contractors
serving the Leased Premises, the Building and/or the Project, other tenants or
third parties, unless Landlord is grossly negligent or guilty of willful
misconduct. All property of Tenant kept or stored on the Project shall be so
kept or stored at the risk of Tenant only, and Tenant shall indemnify, defend
and hold Landlord harmless from and against, and shall be responsible for, any
Claims arising out of damage to the same, including subrogation claims by
Tenant's insurance carriers, unless such damage shall be caused by the willful
act or gross neglect of Landlord and through no fault of Tenant. None of the
events or conditions set forth in this Article 16 shall be deemed a constructive
or actual eviction or result in a termination of this Lease, nor shall Tenant be
entitled to any abatement or reduction of Annual Basic Rent or Additional Rent
by reason thereof. Tenant shall give prompt notice to Landlord with respect to
any defects, fires or accidents which Tenant observes in the Leased Premises,
the Building and/or the Project.
17. ENTRY BY LANDLORD
Landlord reserves and shall at any and all times have the right,
upon not less than 24 hours notice (except in emergencies), to enter the Leased
Premise, to inspect the same, to supply janitorial service and other services to
be provided by Landlord to Tenant hereunder, to submit the Leased Premises to
prospective purchasers or tenants, to post notices of non-responsibility, and to
alter, improve or repair the Leased Premises and any portion of the Building of
which the Leased Premises are a part, without abatement of Annual Basic Rent or
Additional Rent, and may for that purpose erect scaffolding and other necessary
structures where reasonably required by the character of the work to be
performed, always providing that access into the Leased Premises shall not be
blocked thereby, and further providing that the business of Tenant shall not be
interfered with unreasonably. Tenant hereby waives any claim for damages for any
injury or inconvenience to or interference with Tenant's business, any loss of
occupancy or quiet enjoyment of the Leased Premises or any loss
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occasioned thereby. For each of the aforesaid purposes, Landlord shall at all
times have and retain a key with which to unlock all the doors in, upon or about
the Leased Premises, excluding Tenant's vaults and safes, and Landlord shall
have the right to use any and all means which Landlord may deem proper to open
such doors in an emergency in order to obtain entry to the Leased Premises, and
any entry to the Leased Premises obtained by Landlord by any such means or
otherwise shall not under any circumstances be construed or deemed to be a
forcible or unlawful entry into, or a detainer of, the Leased Premises or an
eviction of Tenant from all or any portion of the Leased Premises. Nothing in
this Article 17 shall be construed as obligation Landlord to perform any
repairs, alterations or maintenance except as otherwise expressly required
elsewhere in this Lease.
18. SUBSTITUTE PREMISES
18.1 Relocation of Leased Premises. Landlord may, before or after
the Commencement Date, elect by notice to Tenant, to substitute for the Leased
Premises other office space in the Project (the "Substitute Premises")
designated by Landlord, provided that the Substitute Premises shall contain at
least the same useable area as the Leased Premises and have a configuration
substantially similar to the Leased Premises. Landlord's notice shall be
accompanied by a plan of the Substitute Premises. Tenant shall vacate and
surrender the Leased Premises and shall occupy the Substitute Premises promptly
(and, in any event, not later than fifteen (15) days) after Landlord has
substantially completed the work to be performed by Landlord in the Substitute
Premises pursuant to Article 18.2 below. Tenant shall pay the same Annual Basic
Rent and Additional Rent with respect to the Substitute Premises as was payable
with respect to the Leased Premises. This Lease shall remain in full force and
effect and the Substitute Premises shall thereafter be deemed to be the Leased
Premises.
18.2 Compensation to Tenant. In the event Landlord shall elect to
relocate Tenant to Substitute Premises, Tenant shall not be entitled to any
compensation for any inconvenience or interference with Tenant's business, nor
any abatement or reduction of Annual Basic Rent or Additional Rent, but Landlord
shall, at Landlord's expense perform the following:
(a) Furnish and install in the Substitute Premises fixtures,
equipment, improvements, appurtenances and leasehold improvements at least equal
in kind and quality to those contained or to be contained in the Leased Premises
at the time such notices of substitution is given by Landlord;
(b) Provide personnel to perform, under Tenant's direction, the
moving of Tenant's personal property and trade fixtures from the Leased Premises
to the Substitute Premises;
(c) Promptly reimburse Tenant for Tenant's actual and
reasonable out-of-pocket costs incurred in connection with the relocation of any
telephone or other communications equipment from the Leased Premises to the
Substitute Premises; and
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(d) Promptly reimburse Tenant for any other actual and
reasonable out-of-pocket costs incurred by Tenant in connection with Tenant's
move from Leased Premises to the Substitute Premises, provided such costs are
approved by Landlord in advance which approval shall not be unreasonably
withheld.
Tenant shall cooperate with Landlord so as to facilitate the performance by
Landlord of its obligations under this Article 18.2 and the prompt surrender by
Tenant of the Leased Premises. Without limiting the generality of the preceding
sentence, Tenant shall provide Landlord promptly any approvals or instructions
and any plans or specifications or any other information reasonably requested by
Landlord, and Tenant shall perform promptly in the Substitute Premises any work
to be performed therein by Tenant to prepare the same for Tenant's occupancy.
19. ASSIGNMENT AND SUBLETTING
19.1 Consent of Landlord Required. Tenant shall not transfer or
assign this Lease or any right or interest hereunder, or sublet the Leased
Premises or any part thereof, without first obtaining Landlord's prior written
consent, which consent Landlord may withhold in its reasonable discretion. No
transfer or assignment (whether voluntary or involuntary, by operation of law or
otherwise) or subletting shall be valid or effective without such prior written
consent. Should Tenant attempt to make or allow to be made any such transfer,
assignment or subletting, except as aforesaid, or should any of Tenant's rights
under this Lease be sold or otherwise transferred by or under court order or
legal process or otherwise, then, and in any of the foregoing events Landlord
may, at its option, treat such as an Event of Default by Tenant. Should Landlord
consent to a transfer, assignment or subletting, such restrictions or
prohibitions shall apply to each successive transfer, assignment or subletting
hereunder, if any.
19.2 Deemed Transfers. For the purposes of this Article 19, an
assignment shall be deemed to include the following: (a) if Tenant is a
partnership, a withdrawal or change (voluntary, involuntary, by operation of law
or otherwise) of any of the partners thereof, a purported assignment, transfer,
mortgage or encumbrances (voluntary, involuntary, by operation of law or
otherwise) by any partner thereof of such partner's interest in Tenant, or the
dissolution of the partnership; (b) if Tenant consists of more than one person,
a purported assignment, transfer, mortgage or encumbrance (voluntary,
involuntary, by operation of law or otherwise) from one person unto the other or
others; (c) if Tenant (or a constituent partner of Tenant) is a corporation, any
dissolution, merger, consolidation or reorganization of Tenant (or such
constituent partner), or any change in the ownership (voluntary, involuntary, by
operation of law, creation of new stock or otherwise) of twenty percent (20%) or
more of its capital stock from the ownership existing on the date set forth in
Article 1.1 above; (d) if Tenant is an unincorporated association, a purported
assignment, transfer, mortgage or encumbrance voluntary, involuntary, by
operation of law or otherwise) of any interest in such unincorporated
association; or (e) if Tenant is a limited liability company, a withdrawal or
change of any of the members thereof, a purported assignment, transfer, mortgage
or encumbrance (voluntary, involuntary, by operation of law or otherwise) by any
member of such member's interest
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in Tenant, or the dissolution of the limited liability company; or (f) the sale
of twenty percent (20%) or more in value of the assets of Tenant.
19.3 Delivery of Information. If Tenant wishes at any time to assign
this Lease or sublet the Leased Premises or any portion thereof, it shall first
notify Landlord of its desire to do so and shall submit in writing to Landlord:
(a) the name of the proposed subtenant or assignee; (b) the nature of the
proposed subtenant's or assignee's business to be carried on in the Leased
Premises; (c) the terms and the provisions of the proposed sublease or
assignment; and (d) such financial information as Landlord may reasonably
request concerning the proposed subtenant or assignee. Tenant's failure to
comply with the provisions of this Article 19.3 shall entitle Landlord to
withhold its consent to the proposed assignment or subletting.
19.4 Recapture. If Tenant proposes to assign its interest in this
Lease or sublet all or any part of the Leased Premises, Landlord may, at its
option, upon written notice to Tenant within ten (10) days after Landlord's
receipt of the information specified in Article 19.3 above, elect to recapture
all or any portion of the Leased Premises, and within sixty (60) days after
notice of such election has been given to Tenant, this Lease shall terminate as
to the portion of the Leased Premises recaptured. If all or a portion of the
Leased Premises is recaptured by Landlord pursuant to this Article 19.4, Tenant
shall promptly execute and deliver to Landlord a termination agreement setting
forth the termination date with respect to the Leased Premises or the recaptured
portion thereof, and prorating the Annual Basic Rent, Additional Rent and other
charges payable hereunder to such date. If Landlord does not elect to recapture
as set forth above, Tenant may thereafter enter into a valid assignment or
sublease with respect to the Leased Premises, provided that Landlord consents
thereto pursuant to this Article 19, and provided further, that (a) such
assignment or sublease is executed within ninety (90) days after Landlord has
given its consent, (b) Tenant pays all amounts then owed to Landlord under this
Lease, (c) there is not in existence an Event of Default as of the effective
date of the assignment or sublease, (d) there have been no material changes with
respect to the financial condition of the proposed subtenant or assignee or the
business such party intends to conduct in the Leased Premises, and (e) a fully
executed original of such assignment or sublease providing for an express
assumption by the assignee or subtenant of all of the terms, covenants and
conditions of this Lease is promptly delivered to Landlord.
19.5 Adjustment to Rental. In the event Tenant assigns its interest
in this Lease or sublets the Leased Premises, the Annual Basic Rent set forth in
Article 1.12 above, as adjusted, shall be increased effective as of the date of
such assignment or subletting to the rent and other consideration payable by any
such assignee or sublessee pursuant to such assignment or sublease if such
assignee or sublessee is paying rent in excess of the Annual Basic Rent as
adjusted. Notwithstanding the foregoing, in no event shall the Annual Basic Rent
after any such assignment or subletting be less than the Annual Basic Rent
specified in Article 1.12 above, as adjusted.
19.6 No Release from Liability. Landlord may collect Annual Basic
Rent and Additional Rent from the assignee, subtenant, occupant or other
transferee, and apply the amount so collected, first to the monthly installment
of Annual Basic Rent, then to any Additional Rent and other sums
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due and payable to Landlord, and the balance, if any, to Landlord, but no such
assignment, subletting, occupancy, transfer or collection shall be deemed a
waiver of Landlord's rights under this Article 19, or the acceptance of the
proposed assignee, subtenant, occupant or transferee. Notwithstanding any
assignment, sublease or other transfer (with or without the consent of
Landlord), Tenant shall remain primarily liable under this Lease and shall not
be released from performance of any of the terms, covenants and conditions of
this Lease.
19.7 Landlord's Expenses. If Landlord consent to an assignment,
sublease or other transfer by Tenant of all or any portion of Tenant's interest
under this Lease, Tenant shall pay or cause to be paid to Landlord, a transfer
fee to reimburse Landlord for administrative expenses and for legal, accounting
and other out of pocket expenses incurred by Landlord not to exceed Five Hundred
and No/100 Dollars ($500.00).
19.8 Assumption Agreement. If Landlord consents to an assignment,
sublease or other transfer by Tenant of all or any portion of Tenant's interest
under this Lease, Tenant shall execute and deliver to Landlord, and cause the
transferee to execute and deliver to Landlord, an instrument in the form and
substance acceptable to Landlord in which (a) the transferee adopts his Lease
and assumes and agrees to perform, jointly and severally with Tenant, all of the
obligations of Tenant hereunder, (b) Tenant acknowledges that it remains
primarily liable for the payment of Annual Basic Rent, Additional Rent and other
obligations under this Lease, (c) Tenant subordinates to Landlord's statutory
lien, contract lien and security interest, any liens, security interests or
other rights which Tenant may claim with respect to any property of transferee
and (d) the transferee agrees to us and occupy the Leased Premises solely for
the purpose specified in Article 20 and otherwise in strict accordance with this
Lease.
20. USE OF LEASED PREMISES AND RUBBISH REMOVAL
20.1 Use. The Leased Premises are leased to Tenant solely for the
Permitted Use set forth in Article 1.9 above and for no other purpose
whatsoever. Tenant shall not use or occupy or permit the Leased Premisses to be
used or occupied, nor shall Tenant do or permit anything to be done in or about
the Leased Premises nor bring or keep anything therein which will in any way
increase the existing rate of or affect any casualty or other insurance on the
Building, the Project or any of their respective contents, or make void or
voidable or cause a cancellation of any insurance policy covering the Building,
the Project or any part thereof or any of their respective contents. Tenant
shall not do or permit anything to be done in or about the Leased Premises, the
Building and/or the Project which will in any way obstruct or interfere with the
rights of other tenants or occupants of the Building or the Project or injure or
annoy them. Tenant shall not use or allow the Leased Premises to be used for any
improper, unlawful or unauthorized purpose, nor shall Tenant cause, maintain or
permit any nuisance in, or on about the Leased Premises, the Building and/or the
Project. In addition, Tenant shall not commit or suffer to be committed any
waste in or upon the Leased Premises, the Building and/or the Project. Tenant
shall not use the Leased Premises, the Building and/or the Project or permit
anything to be done in or about the Leased Premises, the Building and/or the
Project which will in any way conflict with any matters of record, or any law,
statute, ordinance
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or governmental rule or regulation now in force or which may hereafter be
enacted or promulgated, and shall, at its sole cost and expense, promptly comply
with all matters of record and all laws, statutes, ordinances and governmental
rules, regulations and requirements now in force or which may hereafter be in
force and with the requirements of any Board of Fire Underwriters or other
similar body now or hereafter constituted, foreseen or unforeseen, ordinary as
well as extraordinary, relating to or affecting the condition, use or occupancy
of the Project, excluding structural change not relating to or affected by
Tenant's improvements or acts. The judgment of any court of competent
jurisdiction or the admission by Tenant in any action against Tenant, whether
Landlord be a party thereto or not, that Tenant has violated any matters of
record or any law, statute, ordinance or governmental rule, regulation or
requirement, shall be conclusive of that fact between Landlord and Tenant. In
addition, Tenant shall not place a load upon any floor of the Leased Premises
which exceeds the load per square foot which the floor was designed to carry,
nor shall Tenant install business machines or other mechanical equipment in the
Leased Premises which cause noise or vibration that may be transmitted to the
structure of the Building.
20.2 Rubbish Removal. Tenant shall keep the Leased Premises clean.
Tenant shall not burn any materials or rubbish of any description upon the
Leased Premises. Tenant shall keep all accumulated rubbish in covered
containers. In the event Tenant fails to keep the Leased Premises in the proper
condition, Landlord may cause the same to be done for Tenant and Tenant shall
pay the expenses incurred by Landlord on demand, together with interest at the
Default Rate, as Additional Rent. Tenant shall, at its sole cost and expense,
comply with all present and future laws, orders and regulations of all state,
county, federal, municipal governments, departments, commissions and boards
regarding the collection, sorting, separation, and recycling of waste products,
garbage, refuse and trash. Tenant shall sort and separate such waste products
garbage, refuse and trash into such categories as provided by law. Each
separately sorted category of waste products, garbage, refuse and trash shall be
placed in separate receptacles reasonably approved by Landlord. Such separate
receptacles may, at Landlord's option, be removed from the Leased Premises in
accordance with a collection schedule prescribed by law. Landlord reserves the
right to refuse to collect or accept from Tenant any waste products, garbage,
refuse or trash that is not separated and sorted as required by law, and to
require Tenant to arrange for such collection at Tenant's sole cost and expense
using a contractor satisfactory to Landlord. Tenant shall pay all costs,
expenses, fines, penalties or damages that may be imposed on Landlord or Tenant
by reason of Tenant's failure to comply with the provisions of this Article
20.2, and, at Tenant's sole cost and expense, Tenant shall indemnify, defend and
hold Landlord and Landlord's agents and employees harmless (including legal fees
and expenses) from and against, and shall be responsible for, all actions,
claims, liabilities and suits arising from such noncompliance, utilizing counsel
reasonably satisfactory to Landlord.
21. SUBORDINATION AND ATTORNMENT
21.1 Subordination. This Lease and all rights of Tenant hereunder
shall be, at the option of Landlord, subordinate to (a) all matters of record,
(b) all ground leases, overriding leases and underlying leases (collectively
referred to as the "leases") of the Building or the Project now or
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hereafter existing, (c) all mortgages and deeds of trust (collectively referred
to as the "mortgages") which may now or hereafter encumber or affect the
Building or the Project, and (d) all renewals, modifications, amendments,
replacements and extensions of leases and mortgages and to spreaders and
consolidations of the mortgages, whether or not leases or mortgages shall also
cover other lands, buildings or leases. The provisions of this Article 21.1
shall be self-operative and no further instruments of subordination shall be
required. In confirmation of such subordination, Tenant shall promptly execute,
acknowledge and deliver any instrument that Landlord, the lessor under any lease
or the holder of any mortgage or any of their respective assigns or successors
in interest may reasonably request to evidence such subordination provided such
instrument contains nondisturbance language reasonably satisfactory to Tenant.
Any lease to which this Lease is subject and subordinate is called a "Superior
Lease" and the lessor under a Superior Lease or its assigns or successors in
interest is called a "Superior Lessor". Any mortgage to which this Lease is
subject and subordinate is called a "Superior Mortgage" and the holder of a
superior Mortgage is called a "Superior Mortgagee". If Landlord, a Superior
Lessor or a Superior Mortgagee requires that such instruments be executed by
Tenant, Tenant's failure to do so within ten (10) days after request therefor
shall be deemed an Event of Default under this Lease. Tenant waives any right to
terminate this Lease because of any foreclosure proceedings. Tenancy hereby
irrevocably constitute and appoints Landlord (and any successor Landlord) as
Tenant's attorney-in-fact, with full power of substitution coupled with an
interest, to execute and deliver to any Superior Lessor or Superior Mortgagee
any documents required to be executed by Tenant for and on behalf of Tenant if
Tenant shall have failed to do so within ten (10) days after request therefore.
21.2 Attornment. If any Superior Lessor or Superior Mortgagee (or
any purchaser at a foreclosure sale) succeeds to the rights of Landlord under
this Lease, whether through possession or foreclosure action, or the delivery of
a new lease or deed (a "Successor Landlord"), Tenant shall attorn to and
recognize such Successor Landlord as Tenant's landlord under this Lease and
shall promptly execute and deliver any instrument that such Successor Landlord
may reasonably request to evidence such attornment.
22. ESTOPPEL CERTIFICATE
Tenant shall, whenever requested by Landlord, within twenty (20)
days after written request by Landlord, execute, acknowledge and deliver to
Landlord a statement in writing certifying: (a) that this Lease is unmodified
and in full force and effect, (or, if modified, stating the nature of such
modification and certifying that this Lease, as so modified, is in full force
and effect); (b) the dates to which Annual Basic Rent, Additional Rent and other
charges are paid in advance, if any; (c) that there are not, to Tenant's
knowledge, any uncured defaults on the part of Landlord hereunder or specifying
such defaults if any are claimed; (d) that Tenant has paid Landlord the Security
Deposit, (e) the Commencement Date and the scheduled expiration date of the
Lease Term, (f) the rights (if any) of Tenant to extend or renew this Lease or
to expand the Leased Premises and (g) the amount of Annual Basic Rent,
Additional Rent and other charges currently payable under this Lease. In
addition, such statement shall provide such other information and facts Landlord
may reasonably require. Any such statement may be relied upon by any prospective
or existing purchaser, ground
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lessee or mortgagee of all or any portion of the Project, as well as by any
other assignee of Landlord's interest in this Lease. Tenant's failure to deliver
such statement within such time shall be conclusive upon Tenant (i) that this
Lease is in full force and effect, without modification except as may be
represented by Landlord; (ii) that there are no uncured defaults in Landlord's
performance hereunder; (iii) that Tenant has paid to Landlord the Security
Deposit; (iv) that not more than one month's installment of Annual Basic Rent or
Additional Rent has been paid in advance; (v) that the Commencement Date and the
scheduled expiration date of the Lease Term are as stated therein, (vi) that
Tenant has no rights to extend or renew this Lease or to expand the Leased
Premises, (vii) that the Annual Basic Rent, Additional Rent and other charges
are as set forth therein and (viii) that the other information and facts set
forth therein are true and correct.
23. SIGNS
Landlord shall retain absolute control over the exterior appearance
of the Building and the exterior appearance of the Leased Premises as viewed
from the public halls. Tenant shall not install, or permit to be installed, any
drapes, shutters, signs, lettering, advertising, or any items that will in any
way, in the sole opinion of Landlord, adversely alter the exterior appearance of
the Building or the exterior appearance of the Leased Premises as viewed from
the public halls or the exterior of the Building. Notwithstanding the foregoing,
Landlord shall install, at Tenant's sole cost and expense, letters or numerals
at or near the entryway to the Leased Premises provided Tenant obtains
Landlord's prior written consent as to size, color, design and location. All
such letters or numerals shall be in accordance with the criteria established by
Landlord for the Building.
24. PARKING
24.1 Parking Facility. Landlord shall provide, operate and maintain
parking accommodations (the "Parking Accommodations"), together with necessary
access, having a capacity adequate in Landlord's opinion to accommodate the
requirements of the Building and the Project. No storage of vehicles or parking
for more than twenty-four (24) hours shall be allowed without Landlord's prior
written consent. Tenant acknowledges and agrees that Landlord shall not be
liable for damage, loss or theft of property or injury to a person in, upon or
about the Parking Accommodations from any cause whatsoever. Landlord shall have
the right to establish, and from time to time change, alter and amend, and to
enforce against all users of the Parking Accommodations, such reasonable
requirements and restrictions as Landlord deems necessary and advisable for the
proper operation and maintenance of the Parking Accommodations, including,
without limitation, designation of particular areas for reserved, visitor and/or
employee parking, and establishment of a reasonable rental charge for the use of
the Parking Accommodations by tenants of the Building, the Project and/or the
general public, as a part of the Rules and Regulations of the Building
referenced in Article 31 hereof.
24.2 Parking Spaces. Tenant is hereby allocated the number of
reserved covered, reserved uncovered and unreserved parking spaces designated in
Article 1.15 hereof, entitling holders to park in either reserved covered,
reserved uncovered or unreserved parking spaces, as the case may be,
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located in the Parking Accommodations as designated by Landlord from time to
time for use by Tenant, its employees and licensees, and for which Tenant shall
pay the monthly charges set forth in Article 1.16 hereof. Landlord and Tenant
shall execute, prior to the Commencement Date a Reserved Covered Parking License
in the form attached hereto as Exhibit "D", and an Unreserved Parking License in
the form attached as Exhibit "F", as applicable. The unreserved parking spaces
shall be available to Tenant, its employees and licensees on a "first come,
first serve" basis. Holders of parking passes shall not be entitled to park in
visitor parking spaces so designated by Landlord, or in any other parking spaces
other than those designated by Landlord for use by holders of parking passes.
25. LIENS
Tenant shall keep the Leased Premises free and clear of all
mechanic's and materialmen's liens. If, because of any act or omission (or
alleged act or omission) of Tenant, any mechanics', materialmen's or other lien,
charge or order for the payment of money shall be filed or recorded against the
Leased Premises, the Project or the Building, or against any other property of
Landlord (whether or not such lien, charge or order is valid or enforceable as
such), Tenant shall, at its own expense, cause the same to be canceled or
discharged of record within thirty (30) days after Tenant shall have received
written notice of the filing thereof, or Tenant may, within such thirty (30) day
period, furnish to Landlord, a bond pursuant to A.R.S. Section 33-1004 (or any
successor statute) and satisfactory to Landlord and all superior Lessors and
Superior Mortgagees against the lien, charge or order, in which case Tenant
shall have the right to contest, in good faith, the validity or amount thereof.
26. HOLDING OVER
It is agreed that the date of termination of this Lease and the
right of Landlord to recover immediate possession of the Leased Premises
thereupon is an important and material matter affecting the parties hereto and
the rights of third parties, all of which have been specifically considered by
Landlord and Tenant. In the event of any continued occupancy or holding over of
the Leased Premises without the express written consent of Landlord beyond the
expiration or earlier termination of this Lease or of Tenants rights to occupy
the Leased Premises, whether in whole or in part, or by leaving property on the
Leased Premises or otherwise, this Lease shall be deemed a monthly tenancy and
Tenant shall pay two (2) times the Annual Basic Rent then in effect, in advance
at the beginning of the hold-over month(s), plus any Additional Rent or other
charges or payments contemplated in this Lease, and any other costs, expenses,
damages, liabilities and attorneys' fees incurred by Landlord on account of
Tenant's holding over.
27. ATTORNEYS' FEES
Tenant shall pay to Landlord all amounts for costs (including
reasonable attorneys' fees) incurred by Landlord in connection with any breach
or default by Tenant under this Lease or incurred in order to enforce or
interpret the terms or provisions of this Lease. Such amounts shall
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be payable within five (5) days after receipt by Tenant of Landlord's statement.
In addition, if any action shall be instituted by either of the parties hereto
for the enforcement or interpretation of any of their respective rights or
remedies in or under this Lease, the prevailing party shall be entitled to
recover from the losing party all costs incurred by the prevailing party in such
action and any appeal therefrom, including reasonable attorneys' fees to be
fixed by the court. Further, should Landlord be made a party to any litigation
between Tenant and any third party, then Tenant shall pay all costs and
attorneys' fees incurred by or imposed upon Landlord in connection with such
litigation.
28. RESERVED RIGHTS OF LANDLORD
Landlord reserves the following rights, exercisable without
liability to Tenant for damage or injury to property, persons or business and
without effecting an eviction, constructive or actual, or disturbance of
Tenant's use or possession or giving rise to any claim:
(a) To name the Building and the Project and to change the name or
street address of the Building or the Project;
(b) To install and maintain all signs on the exterior and interior
of the Building and the Project;
(c) To designate all sources furnishing sign painting and lettering;
(d) During the last ninety (90) days of the Lease Term, if Tenant
has vacated the Leased Premises, to decorate, remodel, repair, alter or
otherwise prepare the Leased Premises for re-occupancy, without affecting
Tenant's obligation to pay Annual Basic Rent;
(e) To have pass keys to the Leased Premises and all doors therein,
excluding Tenant's vaults and safes;
(f) On reasonable prior notice to Tenant, to exhibit the Leased
Premises to any prospective purchaser, mortgagee, or assignee or any mortgage on
the Building or the Project and to others having interest therein at any time
during the Lease Term, and to prospective Tenants during the last six (6) months
of the Lease Term;
(g) To take any and all measures, including entering the Leased
Premises, upon not less than twenty-four (24) hours notice (except in
emergencies), for the purposes of making inspections, repairs, alterations,
additions and improvements to the Leased Premises or to the Building (including,
for the purposes of checking, calibrating, adjusting and balancing controls and
other parts of the Building systems) as may be necessary or desirable for the
operation, improvement, safety, protection or preservation of the Leased
Premises or the Building, or in order to comply with all laws, orders and
requirements of governmental or other authorities, or as may otherwise be
permitted or required by this Lease; provided, however, that Landlord shall
endeavor (except in an emergency) to minimize interference with Tenant's
business in the Leased Premises;
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(h) To relocate various facilities within the Building and/or the
Project if Landlord shall determine such relocation to be in the best interest
of the development of the Building and/or the Project, provided that such
relocation shall not materially restrict access to the Leased Premises;
(i) To change the nature, extent, arrangement, use and location of
the Building Common Areas and the Project Common Areas;
(j) To make alterations or additions to and to build additional
stories on the Building and to build additional buildings or improvements on the
Project; and
(k) To install vending machines of all kinds in the Leased Premises
and the Building, and to receive all of the revenue derived therefrom, provided,
however, that no vending machines shall be installed by Landlord in the Leased
Premises unless Tenant so requests.
Landlord further reserves the right to the roof of the Building. No easement for
light, air, or view is included in the leasing of the Leased Premises to Tenant.
Accordingly, any diminution or shutting off of light, air or view by any
structure which may be erected on the Project or other properties n the vicinity
of the Building shall in no way affect this Lease or impose any liability upon
Landlord.
29. EMINENT DOMAIN
29.1 Taking. If the whole of the Building is lawfully and
permanently taken by condemnation or any other manner for any public or
quasi-public purpose, or by deed in lieu thereof, this Lease shall terminate as
of the date of vesting of title in such condemning authority and the Annual
Basic Rent and Additional Rent shall be pro rated to such date. If any part of
the Building or the Project is so taken, or if the whole of the Building is
taken, but not permanently, then this Lease shall be unaffected thereby, except
that (a) Landlord may terminate this Lease by notice to Tenant within ninety
(90) days after the date of vesting of title in the condemning authority, and
(b) if twenty percent (20%) or more of the Leased Premises shall be permanently
taken and the remaining portion of the Leased Premises shall not be reasonably
sufficient for Tenant to continue operation of its business, Tenant may
terminate this Lease by notice to Landlord within ninety (90) days after the
date of vesting of title in such condemning authority. This Lease shall
terminate on the thirtieth (30th) day after receipt by Landlord of such notice,
by which date Tenant shall vacate and surrender the Leased Premises to Landlord.
The Annual Basic Rent and Additional Rent shall be pro rated to the earlier of
the termination of this Lease or such date as Tenant is required to vacate the
Leased Premises by reason of the taking. If this Lease is not terminated as a
result of a partial taking of the Leased Premises, the Annual Basic Rent and
Additional Rent shall be equitably adjusted according to the rentable area of
the Leased Premise and Building remaining.
29.2 Award. In he event of a taking of all or any part of the
Building or the Project, all of the proceeds or the award, judgment, settlement
or damages payable by the condemning authority shall be and remain the sole and
exclusive property of Landlord, and Tenant hereby assigns all of its right,
title and interest in and to any such award, judgment, settlement or damages to
Landlord.
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Tenant shall, however, have the right, to the extent that the same shall not
reduce or prejudice amounts available to Landlord, to claim from the condemning
authority, but not from Landlord, such compensation as may be recoverable by
Tenant in its own right for relocation benefits, moving expenses, and damage to
Tenant's personal property and trade fixtures.
30. NOTICES
Any notice or communication given under the terms of this Lease
shall be in writing and shall be delivered in person, sent by any public or
private express delivery service or deposited with the United States Postal
Service or a successor agency, certified or registered mail, return receipt
requested, postage pre-paid, addressed as set forth in the Basic Provisions, or
at such other address as a party may from time to time designate by notice
hereunder. Notice shall be effective upon delivery. The inability to deliver a
notice because of a changed address of which no notice was given or a rejection
or other refusal to accept any notice shall be deemed to be the receipt of the
notice as of the date of such inability to deliver or rejection or refusal to
accept. Any notice to be given by Landlord may be given by the legal counsel
and/or the authorized agent of Landlord.
31. RULES AND REGULATIONS
Tenant shall abide by all rules and regulations (the "Rules and
Regulations") of the Building and the Project imposed by Landlord, as attached
hereto as Exhibit "H" or as may hereafter be issued by Landlord. Such Rules and
Regulations are imposed to enhance the cleanliness, appearance, maintenance,
order and use of the Leased Premises, the Building and the Project, and the
proper enjoyment of the Building and the Project by all tenants and their
clients, customers and employees. The Rules and Regulations may be changed from
time to time upon ten (10) days notice to Tenant. Breach of the Rules and
Regulations, by Tenant shall constitute an Event of Default if such breach is
not fully cured within ten (10) days after written notice to Tenant by Landlord.
Landlord shall not be responsible to Tenant for nonperformance by any other
tenant, occupant or invitee of the Building or the Project of any Rules or
Regulations.
32. ACCORD AND SATISFACTION
No payment by Tenant or receipt by Landlord of a lesser amount than
the monthly installment of Annual Base Rent and Additional Rent (jointly called
"Rent" in this Article 32), shall be deemed to be other than on account of the
earliest stipulated Rent due and not yet paid, nor shall any endorsement or
statement on any check or any letter accompanying any check or payment as Rent
be deemed an accord and satisfaction. Landlord may accept such check or payment
without prejudice to Landlord's right to recover the balance of such Rent or to
pursue any other remedy in this Lease. No receipt of money by Landlord from
Tenant after the termination of this Lease, after the service of any notice
relating to the termination of this Lease, after the commencement of any suit,
or after final judgment for possession of the Leased Premises, shall reinstate,
continue or extend the Lease Term or affect any such notice, demand, suit or
judgment.
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33. BANKRUPTCY OF TENANT
33.1 Chapter 7. If a petition is filed by, or an order for relief is
entered against Tenant under Chapter 7 of the Bankruptcy Code and the trustee of
Tenant elects to assume this Lease for the purpose of assigning it, the election
or assignment, or both, may be made only if all of the terms and conditions of
Articles 33.2 and 33.4 below are satisfied. If the trustee fails to elect to
assume this Lease for the purpose of assigning it within sixty (60) days after
appointment, this Lease will be deemed to have been rejected. To be effective,
an election to assume this Lease must be in writing and addressed to Landlord
ad, in Landlord's business judgment, all of the conditions hereinafter stated,
which Landlord and Tenant acknowledge to be commercially reasonable, must have
been satisfied. Landlord shall then immediately be entitled to possession of the
Premises without further obligation to Tenant or the trustee, and this Lease
will be terminated. Landlord's right to be compensated for damages in the
bankruptcy proceeding, however, shall survive.
33.2 Chapters 11 and 13. If Tenant files a petition for
reorganization under Chapters 11 or 13 of the Bankruptcy Code or a proceeding
that is filed by or against Tenant under any other chapter of the Bankruptcy
Code is converted to a Chapter 1 or 13 proceeding and Tenant's trustee or Tenant
as a debtor-in-possession fails to assume this Lease within sixty (60) days from
the date of the filing of the petition or the conversion, the trustee or the
debtor-in-possession will be deemed to have rejected this Lease. to be
effective, an election to assume this Lease must be in writing and addressed to
Landlord and, in Landlord's business judgment, all of the following conditions,
which Landlord and Tenant acknowledge to be commercially reasonable, must have
been satisfied:
(a) The trustee or the debtor-in-possession has cured or has
provided to Landlord adequate assurance, as defined in this Article 33.2, that;
(1) The trustee will cure all monetary defaults under this
Lease within ten (10) days from the date of the assumption; and
(2) The trustee will cure all non-monetary defaults under
this Lease within thirty (30) days from the date of the assumption.
(b) The trustee or the debtor-in-possession has compensated
Landlord, or has provided to Landlord adequate assurance, as defined in this
Article 33.2, that within ten (10) days from the date of the assumption Landlord
will be compensated for any pecuniary loss it incurred arising from the default
of Tenant, the trustee, or the debtor-in-possession as recited in Landlord's
written statement of pecuniary loss sent to the trustee or the
debtor-in-possession. For purposes of this Lease, pecuniary loss shall include
all attorneys' fees and court costs incurred by Landlord in connection with any
bankruptcy proceeding filed by or against Tenant.
(c) The trustee or the debtor-in-possession has provided
Landlord with adequate assurance of the future performance of each of Tenant's
obligations under the Lease; provided, however, that:
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(1) The trustee or debtor-in-possession will also deposit
with Landlord as security for the timely payment of Annual Basic Rent and
Additional Rent, an amount equal to three months Annual Basic Rent and
Additional Rent accruing under this Lease.
(2) If not otherwise required by the terms of this Lease,
the trustee or the debtor-in-possession will also pay in advance, on each day
that the Annual Basic Rent is payable, one-twelfth of Tenant's estimated annual
obligations under the Lease for the Additional Rent.
(3) From and after the date of the assumption of this
Lease, the trustee or the debtor-in-possession will pay the Annual Basic Rent
and Additional Rent as provided in Article 5 above.
(4) The obligations imposed upon the trustee or the
debtor-in-possession will continue for Tenant after the completion of bankruptcy
proceedings.
(d) Landlord has determined that the assumption of the Lease
will not:
(1) Breach any provisions in any other lease, mortgage,
financing agreement, or other agreement by which Landlord is bound relating to
the Project; or
(2) Disrupt, in Landlord's judgment, the tenant mix of the
Building or the Project or any other attempt by Landlord to provide a specific
variety of Tenants in the Building or the Project that, in Landlord's judgment,
would be most beneficial to all of the tenants of the Building and the Project
and would enhance the image, reputation, and profitability of the Building and
the Project.
(e) For purposes of this Article 33.2 "adequate assurance"
means that:
(1) Landlord will determine that the trustee or the
debtor-in-possession has, and will continue to have, sufficient unencumbered
assets after the payment of all secured obligations and administrative expenses
to assure Landlord that the trustee or the debtor-in-possession will have
sufficient funds to fulfill Tenant's obligations under this Lease and to keep
the Leased Premises properly staffed with sufficient employees to conduct a
fully operational, actively promoted business on the Leased Premise; and
(2) An order will have been entered segregating sufficient
cash payable to Landlord and/or a valid and perfected first lien and security
interest will have been granted in property of Tenant, trustee, or
debtor-in-possession that is acceptable for value and kind to Landlord, to
secure to Landlord the obligation of the trustee or debtor-in-possession to cure
the monetary or non-monetary defaults under this Lease within the time periods
set forth above.
33.3 Landlord's Right to Terminate. In the event that this Lease is
assumed by a trustee appointed for Tenant or by Tenant as debtor-in-possession
under the provisions of Article 33.2 above
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and, thereafter, Tenant is either adjudicated a bankrupt or files a subsequent
petition for arrangement under chapter 11 of the Bankruptcy Code, then Landlord
may terminate, at is option, this Lease and all Tenant's rights under it, by
giving written notice of Landlord's election to terminate.
33.4 Assignment by Trustee. If the trustee or the
debtor-in-possession has assumed the Lease, under the terms of Article 33.1 or
33.2 above, and elects to assign Tenant's interest under this Lease or the
estate created by that interest to any other person, that interest or estate may
be assigned only if Landlord acknowledges in writing that the intended assignee
has provided adequate assurance, as defined in this Article 33.4, of future
performance of all of the terms, covenants, and conditions of this Lease to be
performed by Tenant.
33.5 Adequate Assurance. For the purposes of this Article 33
"adequate assurance of future performance" means that Landlord has ascertained
that each of the following conditions has been satisfied:
(1) The assignee has submitted a current financial statement,
audited by a certified public accountant, that shows a net worth and working
capital in amounts determined by Landlord to be sufficient to assure the future
performance by the assignee of Tenant's obligations under this Lease;
(2) If requested by Landlord the assignee will obtain
guarantees, in form and substance satisfactory to Landlord from one or more
persons who satisfy Landlord's standards of creditworthiness;
(3) Landlord has obtained all consents or waivers from any
third party required under any lease, mortgage, financing arrangement or other
agreement by which Landlord is bound, to enable Landlord to permit the
assignment;
(4) When, pursuant to the Bankruptcy Code, the trustee or the
debtor-in-possession is obligated to pay reasonable use and occupancy charges
for the use of all or part of the Leased Premises, the charges will not be less
than the Annual Basic Rent and Additional Rent.
33.6 Consent of Landlord. Neither Tenant's interest in the Lease nor
any estate of Tenant created in the Lease will pass to any trustee, receiver,
assignee for the benefits of creditors, or any other person or entity, or
otherwise by operation of law under the laws of any state having jurisdiction of
the person or property of Tenant unless Landlord consents in writing to the
transfer. Landlord's acceptance of Annual Basic Rent or Additional Rent or any
other payments from any trustee, receiver, assignee, person, or other entity
will not be deemed to have waived, or waive, the need to obtain Landlord's
consent or Landlord's right to terminate this Lease for any transfer of Tenant's
interest under this Lease without that consent.
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34. HAZARDOUS MATERIALS
34.1 Hazardous Materials Laws. "Hazardous Materials Laws" means any
and all federal, state or local laws, ordinances, rules, decrees, orders,
regulations or court decisions (including the so-called "common-law") relating
to hazardous substances, hazardous materials, hazardous waste, toxic substances,
environmental conditions on, under or about the Premises, or soil and ground
water conditions, including, but not limited to, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 ("CERCLA"), as amended, 42
U.S.C. Section 9601, et seq., the Resource Conversation and Recovery Act
("RCRA"), 42 U.S.C. Section 6901, et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801, et seq., any amendments to the
foregoing, and any similar federal, state or local laws, ordinances, rules,
decrees, orders or regulations.
34.2 Hazardous Materials. "Hazardous Materials" means any chemical,
compound, material, substance or other matter that: (i) is a flammable
explosive, asbestos, radioactive material, nuclear medicine material, drug,
vaccine, bacteria, virus, hazardous waste, toxic substance, petroleum product,
or related injurious or potentially injurious material, whether injurious or
potentially injurious by itself or in combination with other materials; (ii) is
controlled, designated in or governed by any Hazardous Materials Law; (iii)
gives rise to any reporting, notice or publication requirements under any
Hazardous Materials Law; or (iv) gives rise to any liability, responsibility or
duty on the part of Tenant or Landlord with respect to any third person under
any Hazardous Materials Law.
34.3 Use. Tenant shall not allow any Hazardous Material to be used,
generated, released, stored or disposed of on, under or about, or transported
from, the Leased Premises, the Building or the Project, unless: (i) such use is
specifically disclosed to and approved by Landlord in writing prior to such use;
and (ii) such use is conducted in compliance with the provisions of this Article
34. Landlord may approve such use subject to reasonable conditions to protect
the Leased Premises, the Building or the Project, and Landlord's interests.
Landlord any withhold approval of Landlord determines that such proposed use
involves a material risk of a release or discharge of Hazardous Materials or a
violation of any Hazardous Materials Laws or that Tenant has not provided
reasonable assurances of its ability to remedy such a violation and fulfill its
obligations under this Article 34.
34.4 Compliance With Laws. Tenant shall strictly comply with, and
shall maintain the Leased Premises in compliance with, all Hazardous Materials
Laws. Tenant shall obtain and maintain in full force and effect all permits,
licenses and other governmental approvals required for Tenant's operations on
the Leased Premises under any Hazardous Materials Laws and shall comply with all
terms and conditions thereof. At Landlord's request, Tenant shall deliver copies
of, or allow Landlord to inspect, all such permits, licenses and approvals.
Tenant shall perform any monitoring, investigation, clean-up, removal and other
remedial work (collectively, "Remedial Work") required as a result of any
release or discharge of Hazardous Materials affecting the Leased Premises, the
Building or the Project, or any violation of Hazardous Materials Laws by Tenant
or any assignee or sublessee of Tenant or their respective agents, contractors,
employees, licensees, or invitees.
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Landlord shall have the right to intervene in any governmental action or
proceeding involving any Remedial Work, and to approve performance of the work,
in order to protect Landlord's interests.
34.5 Compliance With Insurance Requirements. Tenant shall comply
with the requirements of Landlord's and Tenant's respective insurers regarding
hazardous Materials and with such insurers' recommendations based upon prudent
industry practices regarding management of Hazardous Materials.
34.6 Notice; Reporting. Tenant shall notify Landlord, in writing,
within two (2) days after any of the following: (a) a release or discharge of
any Hazardous Material, whether or not the release or discharge is in quantities
that would otherwise be reportable to a public agency; (b) Tenant's receipt of
any order of a governmental agency requiring any Remedial Work pursuant to any
Hazardous Materials Laws; (c) Tenant's receipt of any warning, notice of
inspection, notice of violation or alleged violation, or Tenant's receipt of
notice or knowledge of any proceeding, investigation of enforcement action,
pursuant to any Hazardous Materials Laws; or (d) Tenant's receipt of notice or
knowledge of any claims made or threatened by any third party against Tenant or
the Leased Premises, the Building or the Project, relating to any loss or injury
resulting from Hazardous Materials. Tenant shall deliver to Landlord copies of
all test results, reports and business or management plans required to be filed
with any governmental agency pursuant to any Hazardous Materials Laws.
34.7 Termination; Expiration. Upon the termination or expiration of
this Lease, Tenant shall remove any equipment, improvements or storage
facilities utilized in connection with any Hazardous Materials and shall, clean
up, detoxify, repair and otherwise restore the Leased Premises to a condition
free of Hazardous Materials.
34.8 Indemnity. Tenant shall protect, indemnify, defend and hold
Landlord harmless from and against, and shall be responsible for, any and all
claims, costs, expenses, suits, judgments, actions, investigations, proceedings
and liabilities arising out of or in connection with any breach of any
provisions of this Article 34 or directly or indirectly arising out of the use,
generation, storage, release, disposal or transportation of Hazardous Materials
by Tenant or any sublessee or assignee of Tenant, or their respective agents,
contractors, employees, licensees, or invitees, on, under or about the Leased
Premises, the Building or the Project during the Lease Term or Tenant's
occupancy of the Leased Premises, including, but not limited to, all foreseeable
and unforeseeable consequential damages and the cost of any Remedial Work.
Neither the consent by Landlord to the use, generation, storage, release,
disposal or transportation of Hazardous Materials nor the strict compliance with
all Hazardous Material Laws shall excuse Tenant from Tenant's indemnification
obligations pursuant to this Article 34. The foregoing indemnity shall be in
addition to and not a limitation of the indemnification provisions of Article 16
of this Lease. Tenant's obligations pursuant to this Article 34 shall survive
the termination or expiration of this Lease.
34.9 Assignment; Subletting. If Landlord's consent is required for
an assignment of this Lease or a subletting of the Leased Premises, Landlord
shall have the right to refuse such consent
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if the possibility of a release of Hazardous Materials is materially increased
as a result of the assignment or sublease or if Landlord does not receive
reasonable assurances that the new tenant has the experience and the financial
ability to remedy a violation of the Hazardous Materials Laws and fulfill its
obligations under this Article 34.
34.10 Entry and Inspection; Cure. Landlord and its agents, employees
and contractors, shall have the right, but not the obligation, to enter the
Leased Premises at all reasonable times to inspect the Leased Premises and
Tenant's compliance with the term sand conditions of this Article 34, or to
conduct investigations and tests. No prior notice to Tenant shall be required in
the event of an emergency, or if Landlord has reasonable cause to believe that
violations of this Article 34 have occurred, or if Tenant consents at the time
of entry. In all other cases, Landlord shall give at least twenty-four (24)
hours prior notice to Tenant. Landlord shall have the right, but not the
obligation, to remedy any violation by Tenant of the provisions of this Article
34 or to perform any Remedial Work which is necessary or appropriate as a result
of any governmental order, investigation or proceeding. Tenant shall pay, upon
demand, as Additional Rent, all costs incurred by Landlord in remedying such
violations or performing all Remedial Work, plus interest thereon at the Default
Rate from the date of demand until the date received by Landlord.
34.11 Event of Default. The release or discharge of any Hazardous
Material or the violation of any Hazardous Materials Law shall constitute an
Event of Default by Tenant under this Lease. In addition to and not in lieu of
the remedies available under this Lease as a result of such Event of Default,
Landlord shall have the right, without terminating this Lease, to require Tenant
to suspend its operations and activities on the Leased Premises until Landlord
is satisfied that appropriate Remedial Work has been or is being adequately
performed and Landlord's election of this remedy shall not constitute a waiver
of Landlord's right thereafter to pursue the other remedies set forth in this
Lease.
35. MISCELLANEOUS
35.1 Entire Agreement, Amendments. This Lease and any Exhibits and
Riders attached hereto and forming a part hereof, set forth all of the
covenants, promises, agreements, conditions and understandings between Landlord
and Tenant concerning the Leased Premises and there are no covenants, promises,
agreements, representations, warranties, conditions or understandings either
oral or written between them other than as contained in this Lease. Except as
otherwise provided in this Lease, no subsequent alteration, amendment, change or
addition to this Lease shall be binding unless it is in writing and signed by
both Landlord and Tenant.
35.2 Time of the Essence. Time is of the essence of each and every
term, covenant and condition of this Lease.
35.3 Binding Effect. The covenants and conditions of this Lease
shall, subject to the restrictions on assignment and subletting, apply to and
bind the heirs, executors, administrators, personal representatives, successors
and assigns of the parties hereto.
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35.4 Recordation. Neither this Lease nor any memorandum hereof shall be
recorded by Tenant. At the sole option of Landlord, Tenant and Landlord shall
execute, and Landlord may record, a short form memorandum of this Lease in form
and substance satisfactory to Landlord.
35.5 Governing Law. This Lease and all the terms and conditions thereof
shall be governed by and construed in accordance with the laws of the State of
Arizona.
35.6 Defined Terms and Paragraph Headings. The words "Landlord" and
"Tenant" as used in this Lease shall include the plural as well as the singular.
Words used in masculine gender include the feminine and neuter. If there is more
than one Tenant, the obligations in this Lease imposed upon Tenant shall be
joint and several. The paragraph headings and titles to the paragraphs of this
Lease are not a part of this Lease and shall have no effect upon the
construction or interpretation of any part hereof.
35.7 Representations and Warranties of Tenant. Tenant represents and
warrants to Landlord as follows:
(a) Tenant has been duly organized, is validly existing, and
is in good standing under the laws of its state of [incorporation-organization-
formation] and is [qualified-registered] to transact business in Arizona. All
necessary action on the part of Tenant has been taken to authorize the
execution, delivery and performance of this Lease and of the other documents,
instruments and agreements, if any, provided for herein. The persons who have
executed this Lease on behalf of Tenant are duly authorized to do so;
(b) This Lease constitutes the legal, valid and binding
obligation of Tenant, enforceable against Tenant in accordance with its terms,
subject, however, to bankruptcy, insolvency, reorganization, arrangement,
moratorium or other similar laws relating to or affecting the rights of
creditors generally, general principles of equity, whether enforceability is
considered in a proceeding in equity or at law, and to the qualification that
certain waivers, procedures, remedies and other provisions of this Lease may be
unenforceable under or limited by applicable law, however, none of the foregoing
shall prevent the practical realization to Landlord of the benefits intended by
this Lease;
(c) To the best of its knowledge, there are no suits, actions,
proceedings or investigations pending, or to the best of its knowledge,
threatened against or involving Tenant before any court, arbitrator or
administrative or governmental body which might reasonably result in any
material adviser change in the contemplated business, condition or operations of
Tenant;
(d) to the best of its knowledge, Tenant is not, and the
execution, delivery and performance of this Lease and the documents, instruments
and agreements, if any, provided for herein will not result in any breach of or
default under any other document, instrument or agreement to which Tenant is a
party or by which Tenant is subject or bound;
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(e) To the best of its knowledge, Tenant has obtained all
required licenses and permits, both governmental and private, to use and operate
the Leased Premises in the manner intended by this Lease.
35.8 No Waiver. The failure of either party to insist in any one or
more instances upon the strict performance of any one or more of the obligations
of this Lease, or to exercise any election herein contained, shall not be
construed as a waiver or relinquishment for the future of the performance of
such one or more obligations of this Lease or the right to exercise such
election, but the same shall continue and remain in full force and effect with
respect to any subsequent breach, act or omission.
35.9 Severability. If any clause or provision of this Lease is or
becomes illegal or unenforceable because of any present or future law or
regulation of any governmental body or entity effective during the Lease Term,
the intention of the parties is that the remaining provisions of this Lease
shall not be affected thereby.
35.10 Exhibits. If any provision contained in an Exhibit, Rider or
Addenda to this Lease is inconsistent with any other provision of this Lease,
the provision contained in this Lease shall supersede the provisions contained
in such Exhibit, Rider or Addenda, unless otherwise provided.
35.11 Fair Meaning. The language of this Lease shall be construed to
its normal and usual meaning and not strictly for or against either Landlord or
Tenant. Landlord and Tenant acknowledge and agree that each party has reviewed
and revised this Lease and that any rule of construction to the effect that
ambiguities are to be resolved against the drafting party shall not apply to the
interpretation of this Lease, or any Exhibits, Riders or amendments hereto.
35.12 No Merger. The voluntary or other surrender of this Lease by
Tenant or a mutual cancellation of this Lease shall not work as a merger and
shall, at Landlord's option, either terminate any ro all existing subleases or
subtenancies, or operate as an assignment to Landlord of any or all of such
subleases or subtenancies.
35.13 Force Majeure. Any prevention, delay or stoppage due to strikes,
lockouts, labor disputes, acts of God, inability to obtain labor or materials
for reasonable substitutes therefor, governmental restrictions, regulations or
controls, judicial orders, enemy or hostile governmental actions, civil
commotion, fire or other casualty and other causes beyond the reasonable control
of Landlord shall excuse the Landlord's performance hereunder for the period of
any such prevention, delay, or stoppage.
35.14 Government Energy or Utility Controls. In the event of the
imposition of federal, state or local governmental controls, rules, regulations
or restrictions on the use or consumption of energy or other utilities during
the Lease Term, both Landlord and Tenant shall be bound thereby. In the event of
a difference in interpretation of any governmental control, rule, regulation or
restriction between Landlord and Tenant, the interpretation of Landlord shall
prevail, and Landlord
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shall have the right to enforce compliance, including the right of entry into
the Leased Premises to effect compliance.
35.15 Shoring. If any excavation or construction is made adjacent to,
upon or within the Building, or any part thereof, Tenant shall afford to any and
all persons causing or authorized to cause such excavation or construction
license to enter onto the Leased Premises for the purpose of doing such work as
such persons shall deem necessary to preserve the Building or any portion
thereof from injury or damage and to support the same by proper foundations,
braces and supports without any claim for damages, indemnity or abatement of
Annual Basic Rent or Additional Rent or for a constructive or actual eviction of
Tenant.
35.16 Transfer of Landlord's Interest. The term "Landlord" as used in
this Lease, insofar as the covenants or agreements on the part of the Landlord
are concerned, shall be limited to mean and include only the owner or owners of
Landlord's interest in this Lease at the time in question. Upon any transfer or
transfers of such interest, the Landlord herein named (and in the case of any
subsequent transfer, the then transferor) shall thereafter be relieved of all
liability for the performance of any covenants or agreements on the part of the
Landlord contained in this Lease.
35.17 Limitation on Landlord's Liability. If Landlord becomes obligated
to pay Tenant any judgment arising out of any failure by the Landlord to perform
or observe any of the terms, covenants, conditions or provisions to be performed
or observed by Landlord under this Lease, Tenant shall be limited in the
satisfaction of such judgment solely to Landlord's interest in the Building and
the Project or any proceeds arising from the sale thereof and no other property
or assets of Landlord or the individual partners, directors, officers or
shareholders of Landlord or its constituent partners shall be subject to levy,
execution or other enforcement procedure whatsoever for the satisfaction of any
such money judgment.
35.18 Brokerage Fees. Tenant warrants and represents that it has not
dealt with any realtor, broker or agent in connection with this Lease except the
Broker identified in Article 1.18 above. Tenant shall indemnify, defend and hold
Landlord harmless from and against, and shall be responsible for, any cost,
expense or liability (including the cost of suit and reasonable attorneys' fees)
for any compensation, commission or charges claimed by any other realtor, broker
or agent in connection with this Lease or by reason of any act of Tenant.
35.19 Letter of Credit. Concurrently with the execution of this Lease,
Tenant shall deliver to Landlord, a one (1) year irrevocable standby letter of
credit in the amount of Forty Thousand and No/100 Dollars ($40,000.00), issued
by a bank or other financial institution reasonably acceptable to Landlord, as
additional security for the performance by Tenant of its obligations under this
Lease in the form of Exhibit 1 hereto. At least thirty (30) days prior to the
expiration date of such letter of credit, Tenant shall deliver to Landlord a
renewal one (1) year irrevocable standby letter of credit. In substitution of
the existing letter of credit, failing which, Landlord shall be authorized to
draw upon the letter of credit in its possession. At the election of Landlord,
Landlord any draw upon the letter of credit as and for its full damages or may
draw upon the letter of credit and apply the
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proceeds thereof in reduction of any loss and/or damage sustained by Landlord by
reason of the occurrence of any breach, nonperformance or default by Tenant
under this Lease without the waiver of any other right or remedy available to
Landlord at law, and equity or under the terms of this Lease. Tenant
acknowledges and agrees that in event Tenant shall file a voluntary petition
pursuant to the Bankruptcy Code or any successor thereto, or if any involuntary
petition is filed against Tenant pursuant to the Bankruptcy Code or any
successor thereto, then Landlord may apply the proceeds of the letter of credit
towards those obligations of Tenant to Landlord which accrued prior to the
filing of such petition. Tenant's obligation to maintain the letter of credit
shall terminate after written notice from Landlord reflecting that Landlord has
reviewed Tenant's financial statements and has determined that Tenant has
eliminated its current "retained deficit." Tenant shall furnish to Landlord all
federal income tax returns within thirty (30) days of filing tax returns, and
annual and interim financial statements within thirty (30) days of preparation.
All such financial statements shall be certified by an officer of Tenant to be
true, correct and complete in all material respects.
35.20 Continuing Obligations. All obligations of Lessee hereunder not
fully performed as of the expiration or earlier termination of this Lease shall
survive the expiration or earlier termination of this Lease, including, without
limitation, all payment obligations with respect to Annual Basic Rent,
Additional Rent and all obligations concerning the condition of the Premises.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the date and year first above written.
LANDLORD
SEOC I Limited Partnership, an Arizona limited
partnership
By: Cavan Investments, Ltd., an Arizona
corporation, its General Partner
By: /s/ David V. Cavan
Name: David V. Cavan
Its: President
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TENANT:
ORTHOPAEDIC BIOSYSTEMS LTD., INC., an
Arizona corporation
By: /s/ D. Ronald Yagoda
Name: D. Ronald Yagoda
Its: President
Witness for purposes of
Power of Attorney:
By: /s/ Steven P. Davis
Witness Name: Steven P. Davis
Name: Its: Secretary
It Tenant is a CORPORATION, the authorized officers must sign on behalf of the
corporation and indicate the capacity in which they are signing. The Lease must
be executed by the president or vice-president and the secretary or assistance
secretary, unless the bylaws or a resolution of the board of directors shall
otherwise provide, in which event, the bylaws or a certified copy of the
resolution, as the case may be, must be attached to this Lease.
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RIDER "1"
Rider 1 to Lease dated May ___, 1997 between SEOC I LIMITED
PARTNERSHIP, an Arizona limited partnership ("Landlord"), and
ORTHOPAEDIC BIOSYSTEMS LTD., INC., an Arizona corporation ("Tenant").
1. Option to Extent. Provided that Tenant is not in breach or default
of any of the terms, conditions, covenants, obligations or provisions of the
Lease to which this Rider is attached, and that no event shall have occurred or
state of facts exists which if continued uncured will, with he lapse of time or
the delivery of notice, or both, constitute an Event of Default, then Tenant
shall have, and is hereby granted, the option to extend the Initial Term for one
(1) additional period of three (3) years. Except as set forth in Section 2 of
this Rider, Tenant's occupancy of the Leased Premises during the Renewal Term
shall be governed by all of the terms, conditions covenants and provisions of
the Lease to which this Rider is attached except that Tenant shall have no
further option to extend the Initial Term after the expiration of the Renewal
Term. If Tenant desires to exercise its option to extend the Initial Term, it
must give Landlord notice in writing ("Option Notice") of its intent to do so at
least twelve (12) months, but not more than twenty-four (24) months prior to the
expiration of the Initial Term. For the purposes of the Lease to which this
Rider is attached, the phrase "Lease Term" shall be deemed to refer to the
Initial Term and the Renewal Term to the extent applicable.
2. Amendment to Basic Provisions.
2.1 Lease Term. Article 1.11 of the Lease entitled "Lease
Term" is hereby deleted and replaced with the following:
1.10 Lease Term.
(a) Initial Term: Five (5) years;
(b) Renewal Term: Three (3) years.
2.2 Annual Basic Rent.
1.12 Annual Basic Rent for the Renewal Term.
(a) Landlord and Tenant shall have
fifteen (15) days after Landlord receives the Option Notice within which to
agree on the Annual Basic Rental for the Renewal Term based upon the "THEN FAIR
MARKET RENTAL VALUE OF THE PREMISES" as defined below. If the parties agree on
the Annual Basic Rental for the Renewal Term within fifteen (15) days, then
shall amend this Lease by stating the Annual Basic Rental for the Renewal Term.
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(b) If they are unable to agree on the
Annual Basic Rental for the Renewal Term within the fifteen (15) day period,
then the Annual Basic Rental shall be the "THEN FAIR MARKET RENTAL VALUE OF THE
PREMISES" as determined in accordance with this Rider.
(c) The "THEN FAIR MARKET RENTAL VALUE
OF THE PREMISES" means what a landlord under no compulsion to lease the Premises
and a tenant under no compulsion to lease the Premises, would determine as rent
for the Renewal Term, as of the commencement of the Renewal Term, taking into
consideration the use permitted under the Lease, the quality, size, shape,
design and location of the Premises within the Building. The then fair market
rental value of the Premises for the first year of the Renewal Term will not be
less than the Annual Basic Rental payable during the last year of the Initial
Term.
(d) Within seven (7) days after the
expiration of the fifteen (15) day period set forth in Subsection 1.13 above,
Landlord and Tenant shall each appoint a real estate appraiser with at least
five (5) full years full-time commercial appraisal experience in the area in
which the Premises are located to appraise the then fair market rental value of
the Premises. If either the Landlord or the Tenant does not appoint an appraiser
within ten (10) days after the other has given notice of the name of its
appraiser, the single appraiser appointed shall be the sole appraiser and shall
set the then fair market rental value of the Premises. If two (2) appraisers are
appointed pursuant to this paragraph, they shall meet promptly and attempt to
set the then fair market rental value of the Premises. If they are unable to
agree within the thirty (30) days after the second appraiser has been appointed,
they shall attempt to elect a third appraiser meeting the qualifications stated
in this paragraph within ten (10) days after the last day the two (2) appraisers
are given to set the then fair market rental value of the Premises. If they are
unable to agree on the third appraiser, either the Landlord or Tenant may
petition the presiding civil court judge of the Maricopa County Superior Court
for the selection of a third appraiser who meets the qualifications stated in
this paragraph. Tenant shall bear the cost of appointing the appraisers and of
paying the appraiser's fees.
Within thirty (30) days after the
selection of the third appraiser, a majority of the appraisers shall set the
then fair market rental value of the Premises. If a majority of the appraisers
are unable to set the then fair market rental value of the Premises within
thirty (30) days after selection of the third appraiser, the three (3)
appraisals shall be averaged and the average shall be the then fair market
rental value of the Premises.
The Parking Charge payable during
the Renewal Term as provided in Article 1.16 of the Lease may be increased
during each year of the Renewal Term in accordance with increases charged to
other tenants of the Project.
3. Definitions. Capitalized terms used in this Rider without definition
shall have the definition assigned to such terms in the Lease to which this
Rider is attached, unless the context requires otherwise.
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4. Full Force and Effect. Except as specifically modified by this
Rider, the Lease to which this Rider is attached remains in full force and
effect.
______________________________________ _____________________________
Landlord's Initials Tenant's Initials
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PARCEL NO. 1:
A portion of the North half of the Southeast quarter of Section 2, Township 3
North, Range 4 East of the Gila and Salt River Base and Meridian, Maricopa
County, Arizona, as shown on the Map of Dedication for SCOTTSDALE RESEARCH PARK,
recorded in Book 259 of Maps, Page 38, Maricopa County Records, more
particularly described as follows:
COMMENCING at the center of said Section 2;
thence South 89 degrees 39 minutes 41 seconds East along the North line of said
Southeast quarter 1077.16 feet to the centerline intersection of Paradise Lane
and 78th Street as shown on said Map of Dedication;
thence South 00 degrees 20 minutes 19 seconds West along said centerline of 78th
Street 365.70 feet;
thence South 89 degrees 39 minutes 41 seconds East departing said centerline
30.00 feet to the TRUE POINT OF BEGINNING, said point also being the Easterly
right of way line of said 78th Street;
thence South 89 degrees 39 minutes 41 seconds East 546.86 feet;
thence South 00 degrees 20 minutes 19 seconds West 281.74 feet to the beginning
of a curve concave Easterly and having a radius of 200.00 feet;
thence Southeasterly along the arc of said curve through a central angle of 40
degrees 44 minutes 47 seconds a distance of 142.23 feet to a point of tangency;
then South 40 degrees 24 minutes 28 seconds East 45.00 feet to a point on the
Northerly right of way line of Greenway Arterial as shown on said Map of
Dedication;
thence South 49 degrees 35 minutes 32 seconds West along said Northerly right of
way line 685.63 feet to the beginning of a curve concave Northwesterly and
having a radius of 20.00 feet;
thence Northwesterly along said Northerly right of way line and the arc of said
curve through a central angle of 93 degrees 16 minutes 32 seconds a distance of
32.56 feet to the beginning of a compound curve the radius of which bears North
52 degrees 52 minutes 04 seconds East 370.00 feet; said point also lying on said
Easterly right of way line 78th Street;
thence Northwesterly along said Easterly right of way line and the arc of said
curve through a central angle of 37 degrees 28 minutes 15 seconds a distance of
241.98 feet to a point of tangency;
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thence North 00 degrees 20 minutes 19 seconds East along said Easterly right of
way line 665.82 feet to the TRUE POINT OF BEGINNING.
EXHIBIT "A"
"LEGAL DESCRIPTION"
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PARCEL NO. 2:
A Non-exclusive perpetual easement for ingress and egress, drainage and public
utilities as created by instrument recorded May 21, 1996 in 96-352271, Official
Records over a portion of the North half of the southeast quarter of Section 2,
Township 3 North, Range 4 East of the Gila and Salt River Base and Meridian,
Maricopa County, Arizona, as shown on the Map of Dedication for SCOTTSDALE
RESEARCH PARK, recorded in Book 259 of Maps, Page 38, Maricopa County Records,
more particularly described as follows:
COMMENCING at the center of said Section 2;
thence South 89 degrees 39 minutes 41 seconds East along the North line of said
Southeast quarter 1077.16 feet to the centerline intersection of Paradise Lane
and 78th Street as shown on said Map of Dedication;
thence South 00 degrees 20 minutes 19 seconds West along said centerline of 78th
Street 365.70 feet;
thence South 89 degrees 39 minutes 41 seconds East leaving said centerline
576.86 feet to the TRUE POINT OF BEGINNING;
thence South 89 degrees 39 minutes 41 seconds East 15.00 feet;
thence South 00 degrees 20 minutes 19 seconds West 281.74 feet to the beginning
of a curve concave Northeasterly and having a radius of 185.00 feet;
thence Southeasterly along the arc of said curve through a central angle of 40
degrees 44 minutes 47 seconds a distance of 131.56 feet to a point of tangency;
thence South 40 degrees 24 minutes 28 seconds East 45.00 feet to a point on the
Northerly right of way line of Greenway Arterial as shown on said Map of
Dedication;
thence South 49 degrees 35 minutes 32 seconds West along said Northerly right of
way line 15.00 feet;
thence North 40 degrees 24 minutes 28 seconds West leaving said Northerly
right-of-way 45.00 feet to the beginning of a curve concave Northeasterly and
having a radius of 200.00 feet;
thence Northwesterly, along the arc of said curve through a central angle of 40
degrees 44 minutes 47 seconds, a distance of 142.23 feet to a point of tangency;
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thence North 00 degrees 20 minutes 19 seconds East 281.74 feet to the TRUE POINT
OF BEGINNING.
EXHIBIT "A"
"LEGAL DESCRIPTION"
PAGE 2 OF 2
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EXHIBIT "C"
MEMORANDUM OF COMMENCEMENT DATE
THIS MEMORANDUM OF COMMENCEMENT DATE is entered into this ____ day of
________________, 19____ by SEOC I LIMITED PARTNERSHIP, an Arizona limited
partnership ("Landlord"), and ORTHOPAEDIC BIOSYSTEMS LTD., INC., an Arizona
corporation ("Tenant").
RECITALS
A. Landlord and Tenant have previously executed that certain Office
Lease dated May _____, 1997 ("Lease"), pursuant to which Tenant has leased from
Landlord certain premises more particularly described therein.
B. Pursuant to the provisions of Article 3.4 of the Lease, Landlord and
Tenant have agreed to execute this Memorandum of Commencement Date to specify
the Commencement Date of the Lease Term.
NOW, THEREFORE, in consideration of the foregoing recitals, the
execution and delivery of the Lease and other good and valuable considerations,
the receipt, sufficiency and validity which is hereby acknowledged, landlord and
Tenant agree as follows:
1. Commencement Date. The Commencement Date is ______________________,
and the expiration date of the Lease is ___________________________.
2. Definitions. Capitalized terms used in this Memorandum of
Commencement Date without definition shall have the meanings assigned to such
terms in the Lease, unless the context requires otherwise.
3. Full Force and Effect. Except as specifically modified by this
Memorandum of Commencement Date, the Lease remains in full force and effect.
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IN WITNESS WHEREOF, Landlord and Tenant have executed this memorandum
of Commencement Date as of the date and year first above written.
TENANT: LANDLORD:
ORTHOPAEDIC BIOSYSTEMS LTD., INC., SEOC I LIMITED PARTNERSHIP, an
an Arizona corporation Arizona limited partnership
By: Cavan Investments, Ltd., an Arizona
corporation, its General Partner
By:
Name: By:
Its: Name:
Its:
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EXHIBIT "D"
RESERVED COVERED PARKING LICENSE
THIS RESERVED COVERED PARKING LICENSE (this "License") is made as of
the ____ day of May _______, 1997, between SEOC I LIMITED PARTNERSHIP, an
Arizona limited partnership ("Licensor"), and ORTHOPAEDIC BIOSYSTEM LTD., INC.,
an Arizona corporation ("Licensee"), whose address is 15990 North
Greenway/Hayden Loop, Suite 200, Scottsdale, Arizona 85260.
1. LICENSE. Licensor hereby grants Licensee a license to use five (5)
reserved covered parking spaces (the "Spaces") in the parking accommodations
(the "Parking Accommodations") of the project (the "Project") located at 15990
North Greenway/Hayden Loop, Scottsdale, Arizona 85260, as cross-hatched on the
site plan attached hereto as Exhibit "A", for a term the same as the term of the
Lease referred to in Paragraph 2 hereof. Each space shall be used solely for the
parking of one automobile therein by Licensee in accordance with the terms of
this License.
2. THE LEASE. Anything herein to the contrary notwithstanding, this
License shall terminate no later than the date of termination of the Lease (the
"Lease") between Licensor, as Landlord, and Licensee, as Tenant, for space in
the Project of even date herewith, whether such termination occurs at the end of
the scheduled Lease term or prior thereto. A breach of this License by Tenant
shall be deemed a breach of the Lease by Tenant and after notice given in
accordance with the terms of the Lease and the failure of Tenant to cure within
fifteen (15) days of such notice, Landlord shall have all remedies available
herein, under the Lease, and at law or in equity. In the event the term of the
Lease is extended, the term of this License shall also be extended to correspond
with the Lease Term.
3. MONTHLY FEE. Licensee agrees to pay as a monthly fee for this
License Licensor's current fee for each Space licensed, payable on or before the
first day of each month in advance. The monthly fee which Licensee shall pay is
$125.00.
4. DESIGNATION OF SPACES. This License is for five (5) reserved covered
parking Spaces in the area of the Parking Accommodations cross-hatched on
Exhibit "B" attached hereto, which area may be redesignated from time to time by
Licensor. The initial Spaces designated for Licensee are cross-hatched on
Exhibit "B" attached hereto.
5. DESIGNATION OF AUTOMOBILE. Only vehicles designated by Licensee to
Licensor may be parked or stored in the Spaces, provided, however, that Licensee
may change its automobile designations at any time upon written notice to
Licensor or for temporary use upon notification given to the garage attendant,
if any. No more than one (1) automobile per Space licensed hereunder shall be
parked or stored under Licensee's rights hereunder at any one time.
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6. NO ADDITIONAL SERVICES. This License is for self-service storage or
parking only and does not include the rights to any additional services, which
services may be made available by Licensor from time to time at an additional
charge.
7. INDEMNITY. Licensor and its agents and employees shall not be liable
for loss or damage to any vehicle parked or stored by Licensee or under
Licensee's rights herein and/or to the contents thereof caused by fire, theft,
vandalism, collision, explosion, freezing, earthquake, storms, natural
disasters, strikes, riots or by any other causes, unless caused by the gross
negligence or willful misconduct of Licensor, and Licensee (1) waives and agrees
to hold Licensor harmless from any claim against Licensor, its agents and
employees for and in respect thereto, and (2) hereby agrees to indemnify and
defend Licensor, its agents and employees against all claims for any loss or
damage to any such vehicle or its contents from any cause whatsoever, unless
caused by the gross negligence or willful misconduct of Licensor.
8. RELATIONSHIP OF PARTIES. The relationship between Licensor and
Licensee constitutes a license to use the Parking Accommodations subject to the
terms and conditions of this License only and neither such relationship nor the
storage or parking of any automobile thereunder shall constitute a bailment nor
create the relationship of bailor and bailee.
9. NOTICES. All notices hereunder shall be given in accordance with the
terms of the Lease.
10. SUBORDINATION AND ATTORNMENT. This License shall be subject and
subordinate to any mortgage, deed of trust or ground lease now or hereafter
placed on the Project, or any portion thereof, and to replacements, renewals and
extensions thereof, and Licensee, upon request by Licensor, shall execute
instruments (in form satisfactory to Licensor) acknowledging such subordination.
11. NO WASTE. Licensee covenants not to cause any waste or damage or
disfigurement or injury to the Project.
12. CLOSURE OF FACILITY. Licensor shall have the right to close any
portion of the Parking Accommodations and deny access thereto in connection with
any repairs or in an emergency, as it may require, without liability, cost or
abatement of fee.
13. RULES. Licensee shall perform, observe and comply with such rules
of the Project as may be reasonably adopted by Licensor in respect of the use
and operation of said Parking Accommodations.
14. REGULATIONS. Licensee shall, when using the Parking Accommodations,
observe and obey all signs regarding fire lanes and no parking zones, and when
parking always park between designated lines. Licensor reserves the right to tow
away, or otherwise impound, at the expense of the owner or operator, any vehicle
which is improperly parked or parked in a no parking zone. No
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overnight parking shall be allowed in the Parking Accommodations.
IN WITNESS WHEREOF, the parties have executed this agreement as of the
day and year first above written.
LICENSOR: LICENSEE:
SEOC I LIMITED PARTNERSHIP, an ORTHOPAEDIC BIOSYSTEMS LTD., INC.,
Arizona limited partnership an Arizona corporation
By: Cavan Investments, Ltd., an Arizona
corporation, its General Partner
By:
Name: D. Ronald Yagoda
By: Its: President
Name:
Its:
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EXHIBIT "E"
INTENTIONALLY OMITTED
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EXHIBIT "F"
UNRESERVED PARKING LICENSE
THIS UNRESERVED PARKING LICENSE (this "License") is made as of the ____
day of May, 1997, between SEOC I LIMITED PARTNERSHIP, an Arizona limited
partnership ("Licensor"), and ORTHOPAEDIC BIOSYSTEMS LTD., INC., an Arizona
corporation ("Licensee"), whose address is 15990 North Greenway/Hayden Loop,
Suite 200, Scottsdale, Arizona 85260.
1. LICENSE. Licensor hereby grants Licensee a license to use fifteen
(15) unreserved uncovered parking spaces (the "Spaces") in the parking
accommodations (the "Parking Accommodations") of the project (the "Project")
located at 15990 North Greenway/Hayden Loop, Scottsdale, Arizona 85260, as
cross-hatched on the site plan attached hereto as Exhibit "A", for a term the
same as the term of the Lease referred to in Paragraph 2 hereof. each Space
shall be used solely for the parking of one automobile therein by Licensee in
accordance with the terms of this License.
2. THE LEASE. Anything herein to the contrary notwithstanding, this
License shall terminate no later than the date of termination of the Lease (the
"Lease") between Licensor, as Landlord, and Licensee, as Tenant, for space in
the Project of even date herewith, whether such termination occurs at the end of
the scheduled Lease term or prior thereto. A breach of this License by Tenant
shall be deemed a breach of the Lease by Tenant and after notice given in
accordance with the terms of the Lease and the failure of Tenant to cure within
fifteen (15) days of such notice, Landlord shall have all remedies available
herein, under the Lease, and at law or in equity. In the event the term of the
Lease is extended, the term of this License shall also be extended to correspond
with the Lease Term.
3. MONTHLY FEE. No charge.
4. DESIGNATION OF SPACES. This License is for fifteen (15) unreserved
uncovered] parking Spaces in the area of the Parking Accommodations
cross-hatched on Exhibit "B" attached hereto, which area may be redesignated
from time to time by Licensor; provided, however, Licensor may designate
specific Spaces or otherwise require Licensee to park in another specific
location.
5. DESIGNATION OF AUTOMOBILE. Only vehicles designated by Licensee to
Licensor may be parked or stored in the Spaces, provided, however, that Licensee
may change its automobile designations at any time upon written notice to
Licensor or for temporary use upon notification given to the garage attendant,
if any. No more than one (1) automobile per space licensed hereunder shall be
parked or stored under Licensee's rights hereunder at any one time.
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6. NO ADDITIONAL SERVICES. This License is for self-service storage or
parking only and does not include the rights to any additional services, which
services may be made available by Licensor from time to time at an additional
charge.
7. INDEMNITY. Licensor and its agents and employees shall not be liable
for loss or damage to any vehicle parked or stored by Licensee or under
Licensee's rights herein and/or to the contents thereof caused by fire, theft,
vandalism, collision, explosion, freezing, earthquake, storms, natural
disasters, strikes, riots or by any other causes, unless caused by the gross
negligence or willful misconduct of Licensor, and Licensee (1) waives and agrees
to hold Licensor harmless from any claim against Licensor, its agents and
employees for and in respect thereto, and (2) hereby agrees to indemnify and
defend Licensor, its agents and employees against all claims for any loss or
damage to any such vehicle or its contents from any cause whatsoever, unless
caused by the gross negligence or willful misconduct of Licensor.
8. RELATIONSHIP OF PARTIES. The relationship between Licensor and
Licensee constitutes a license to use the Parking Accommodations subject to the
terms and conditions of this License only and neither such relationship nor the
storage or parking of any automobile thereunder shall constitute a bailment nor
create the relationship of bailor and bailee.
9. NOTICES. All notices hereunder shall be given in accordance with the
terms of the Lease.
10. SUBORDINATION AND ATTORNMENT. This License shall be subject and
subordinate to any mortgage, deed of trust or ground lease now or hereafter
placed on the Project, or any portion thereof, and to replacements, renewals and
extensions thereof, and Licensee, upon request by Licensor, shall execute
instruments (in form satisfactory to Licensor) acknowledging such subordination.
11. NO WASTE. Licensee covenants not to cause any waste or damage or
disfigurement or injury to the Project.
12. CLOSURE OF FACILITY. Licensor shall have the right to close any
portion of the Parking Accommodations and deny access thereto in connection with
any repairs or in an emergency, as it may require, without liability, cost or
abatement of fee.
13. RULES. Licensee shall perform, observe and comply with such rules
of the Project as may be reasonably adopted by Licensor in respect of the use
and operation of said Parking Accommodations.
14. REGULATIONS. Licensee shall, when using the Parking Accommodations,
observe and obey all signs regarding fire lanes and no parking zones, and when
parking always park between
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designated lines. Licensor reserves the right to tow away, or otherwise impound,
at the expense of the owner or operator, any vehicle which is improperly parked
or parked in a no parking zone. No overnight parking shall be allowed in the
Parking Accommodations.
IN WITNESS WHEREOF, the parties have executed this agreement as of the
day and year first above written.
LICENSOR: LICENSEE:
SEOC I LIMITED PARTNERSHIP, an ORTHOPAEDIC BIOSYSTEMS LTD., INC.,
Arizona limited partnership an Arizona corporation
By: Cavan Investments, Ltd., an Arizona
corporation, its General Partner
By:
Name: D. Ronald Yagoda
By: Its: President
Name:
Its:
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EXHIBIT "G"
WORK LETTER
In order to induce Tenant to enter into the Lease (which is
incorporated herein by reference to the extent that the provisions of this Work
Letter may apply thereto) and in consideration of the mutual covenants
hereinafter contained, Landlord and Tenant agree as follows:
1. COMPLETION SCHEDULE. Attached to this Work Letter is a schedule (the
"Work Schedule") setting forth the time table for the planning and completion of
the installation of the tenant improvements to be constructed in the Leased
Premises (the "Tenant Improvements"). The Work Schedule sets forth each of the
various items of work to be done in connection with the completion of the Tenant
Improvements and shall become the basis for completing the Tenant Improvements.
Landlord and Tenant acknowledge and agree that time is of the essence with
respect to their respective obligations as set forth in this Work Letter.
2. TENANT IMPROVEMENTS. The Tenant Improvements shall include the work
described on Annex I to this Exhibit "G", which work shall be done in the Leased
Premises pursuant to the Tenant Improvements Plans described in Paragraph 3
below.
3. TENANT IMPROVEMENT PLANS. Tenant shall meet with Landlord's
architect and/or space planner for the purposes of preparing a space plan for
the layout of the Premises. Based upon such space plan, Landlord's architect
shall prepare final working drawings and specifications for the Tenant
Improvements. Such final working drawings and specifications are referred to in
this Work Letter as the "Tenant Improvement Plans."
4. PREPARATION OF TENANT IMPROVEMENT PLANS AND FINAL PRICING. After the
preparation of the space plan and after Tenant's approval thereof in accordance
with the Work Schedule, Landlord shall cause its architect to prepare and submit
to Tenant the Tenant Improvement Plans. Promptly after the approval of the
Tenant Improvement Plans by Landlord and Tenant in accordance with the Work
Schedule, the Tenant Improvement Plans shall be submitted to the appropriate
governmental body for plan checking and building permits. Landlord, with
Tenant's cooperation, shall cause to be made such changes in the Tenant
Improvement Plans necessary to obtain required permits. Tenant acknowledges that
after final approval of the Tenant Improvement Plans, no further changes to the
Tenant Improvement Plans may be made without the prior written consent of
Landlord, which consent shall not be unreasonably withheld but may be
conditioned on the agreement by Tenant to pay all additional costs and expenses
resulting from such requested changes that exceed the Allowance (defined below).
5. CONSTRUCTION OF TENANT IMPROVEMENTS. After the Tenant Improvement
Plans have been prepared and approved, and building permits for the Tenant
Improvements have been issued, Landlord shall enter into a construction contract
with its contractor for the installation of the Tenant Improvements in
accordance with the Tenant Improvement Plans. The Tenant Improvements shall
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be constructed in a good, workmanlike and lien free manner, and in conformance
with applicable building codes. Landlord shall supervise the completion of the
Tenant Improvements and shall endeavor in good faith to secure the completion of
the Tenant Improvements in accordance with the Work Schedule. The cost of the
Tenant Improvements shall be paid as provided in Paragraph 6 below. Tenant shall
accept the Tenant Improvements upon substantial completion thereof, as
reasonably determined by Landlord's architect.
6. PAYMENT OF THE COST OF THE TENANT IMPROVEMENTS.
a. TENANT IMPROVEMENT ALLOWANCE. Landlord hereby grants to
Tenant a Tenant Improvement allowance (the "Allowance") based upon a calculation
of Sixteen and No/100 Dollars ($16.00) per usable square foot of the Leased
Premises. Landlord and Tenant agree that the usable square footage of the Leased
Premises is six thousand one hundred thirty (6,130) usable square fee subject to
adjustment as provided in Article 2.2 of the Lease. The Allowance shall be used
only for:
(i) Payment of the cost preparing the space plan
and the final working drawings and specifications, including mechanical,
electrical and structural drawings and of all other aspects of the Tenant
Improvement Plans, including the charges of Landlord's space planner and
Landlord's architect.
(ii) The payment of permit and license fees
relating to construction of the Tenant Improvements; and
(iii) Construction of the Tenant Improvements,
including without limitation the following:
(1) Installation within the Leased
Premises of all partitioning, doors, floor coverings, finishes, ceilings, wall
coverings and paintings, millwork and similar items;
(2) All electrical wiring, lighting
fixtures, outlets and switches, and other electrical work to be installed within
the Leased Premises;
(3) The furnishing and installation of
all duct work, terminal boxes, defusers and accessories required for the
completion of the heating, ventilation and air conditioning systems within the
Leased Premises.
(4) Any additional Tenant requirements
including, but not limited to odor control, special heating, ventilation and air
conditioning, noise or vibration control or other special system;
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(5) All fire and life safety control
systems such as fire walls, sprinklers, halon, fire alarms, including piping,
wiring and accessories installed within the Leased Premises; and
(6) All plumbing, fixtures, pipes and
accessories to be installed within the Leased Premises; and
(7) All monument and director signage.
b. ADDITIONAL COSTS. The cost of each of the items set forth
in Paragraph 6(a) above shall be charged against the Allowance. In the event the
anticipated cost of installing the Tenant Improvements, as established by
Landlord's final pricing schedule, shall exceed the Allowance, or in the event
any of the Tenant Improvements are not to be paid for from the Allowance, the
excess shall be paid by Tenant to Landlord prior to the commencement of
construction of the Tenant Improvements.
c. CHANGES TO TENANT IMPROVEMENT PLANS. In the event that
Tenant shall request any changes or substitutions to the Tenant Improvement
Plans, after the Tenant Improvement Plans have been prepared and the final
pricing established by Landlord, any additional costs attributable thereto shall
be paid by Tenant to Landlord prior to the commencement of the work represented
by such changes, unless covered under the Allowance.
d. UNUSED ALLOWANCE. Any unused part of the Allowance shall be
credited toward the first payments due from Tenant for the Annual Basic Rent and
Additional Rent.
7. EARLY ENTRY. Landlord shall permit Tenant and Tenant's agent to
enter the Leased Premises prior to the Commencement Date in order that Tenant
may do such work as may be required by Tenant to make the Leased Premises ready
for Tenant's use and occupancy. If Landlord permits such entry prior to the
Commencement Date, such permission is conditioned upon Tenant and its agents,
contractors, employees and invitees working in harmony and not interfering with
Landlord and its agents, contractors and employees in the installation of the
Tenant Improvements or in the performance of work for other tenants and
occupants of the Building. If at any time such entry shall cause or threaten to
cause disharmony or interference, Landlord shall have the right to withdraw such
permission upon twenty-four (24) hours notice to Tenant. Any entry into the
Leased Premises by Tenant prior to the Commencement Date shall be subject to all
of the terms, covenants, conditions and provisions of the Lease, other than with
respect to Tenant's obligation to pay Annual Basic Rent. Tenant acknowledges and
agrees that Landlord shall not be liable in any way for any injury, loss or
damage which may occur to Tenant, its agents, contractors and employees or to
Tenant's work and installations made in the Leased Premises or to property
placed therein prior to the Commencement Date, all of the same being at Tenant's
sole risk, provided, however, that Landlord shall be liable to Tenant for the
gross negligence of Landlord, its agents, contractors and employees.
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8. PUNCH LIST PROCEDURE. Not later than fourteen (14) days after the
Commencement Date, Tenant shall prepare a list (the "Punch List") of any
deficiencies or in completed work regarding any Tenant Improvements. Provided
that such items are Landlord's responsibility pursuant to the Tenant Improvement
Plans, Landlord shall correct such deficiencies or in completed work within a
reasonable period of time, but in no event later than sixty (60) days after
receipt of the Punch List, after which Landlord shall have no further obligation
to alter, change, decorate or improve the Leased Premises, whether to adapt the
same for the use for which it is leased or for any other purpose. The existence
of such deficiencies or in completed work shall not effect Tenant's obligation
to accept the Leased Premises as otherwise required hereunder.
9. ASSIGNMENT OF WARRANTIES. Landlord shall assign to Tenant the
non-exclusive right to enforce any and all warranties which Landlord may receive
from any contractor, supplier or other person or entity involved with
construction of the Tenant Improvements, which assignment shall continue until
the expiration or sooner termination of the Lease or the expiration of the
warranty, whichever occurs first.
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ANNEX I
TO
EXHIBIT "G"
TENANT IMPROVEMENTS
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EXHIBIT "H"
RULES AND REGULATIONS
1. Unless otherwise specifically defined herein, all capitalized terms
in these Rules and Regulations shall have the meaning set forth in the Lease to
which these Rules and Regulations are attached.
2. The sidewalks, driveways, entrances, passages, courts, elevators,
vestibules, stairways, corridors or halls of the Building and the Project shall
not be obstructed or encumbered or used for any purpose other than ingress and
egress to and from the premises demised to any tenant or occupant.
3. No awnings or other projection shall be attached to the outside
walls or windows of the Building. No curtains, blinds, shades, or screens shall
be attached to or hung in, or used in connection with, any window or door of the
premises demised to any tenant or occupant, without the prior written consent of
Landlord. All electrical fixtures hung in any premises demised to any tenant or
occupant must be of a type, quality, design, color, size and general appearance
approved by Landlord.
4. No tenant shall place objects against glass partitions, doors or
windows which would be in sight from the Building corridors or from the exterior
of the Building and such tenant will promptly remove any such objects when
requested to do so by Landlord.
5. The windows and doors that reflect or admit light and air into the
halls, passengeways or other public places in the Building shall not be covered
or obstructed, nor shall any bottles, parcels, or other articles be placed on
any window sills.
6. No show cases or other articles shall be put in front of or affixed
to any part of the exterior of the Building or the other buildings in the
Project, nor placed in the halls, corridors, walkways, landscaped areas,
vestibules or other public parts of the Building or the Project.
7. The water and wash closets and other plumbing fixtures shall not be
used for any purposes other than those for which they were constructed, and no
sweepings, rubbish, rags or other substances shall be thrown therein. No tenant
shall bring or keep, or permit to be brought or kept, any inflammable,
combustible, explosive or hazardous fluid, material, chemical or substance in or
about the premises demised to such tenant or the Project.
8. Except for artwork to be hung on the walls, no tenant or occupant
shall mark, paint, drill into, or in any way deface any part of the Project, the
Building or the premises demised to such tenant or occupant. No boring, cutting
or strings of wires shall be permitted, except with the prior consent of
Landlord, and as Landlord may direct. No tenant or occupant shall install any
resilient
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tile or similar floor covering in the premises demised to such tenant or
occupant except in a manner approved by Landlord.
9. Any carpeting cemented down by a tenant shall be installed with a
releasable adhesive. In the event of a violation of the foregoing by a tenant,
Landlord may charge the expense incurred in such removal to such tenant.
10. No vehicles or animals of any kind (except seeing eye dogs) shall
be brought into or kept in or about the premises demised to any tenant. No
cooking shall be done or permitted in the Building by any tenant without the
written approval of Landlord. No tenant shall cause or permit any unusual or
objectionable odors to emanate from the premises demised to such tenant.
11. No space in the Building or the Project shall be used for
manufacturing, for the storage or merchandise, or for the sale of merchandise,
goods or property of any kind at auction.
12. No tenant shall make, or permit to be made, any unseemly or
disturbing noises or vibrations or disturb or interfere with other tenants or
occupants of the Building, the Project or neighboring buildings or premises
whether by the use of any musical instrument, radio, television set broadcasting
equipment or other audio device, unmusical noise, whistling, singing, or in any
other way. Nothing shall be thrown out of any doors.
13. No additional locks or bolts of any kind shall be placed upon any
of the doors, nor shall any changes be made in locks or the mechanism thereof.
Each tenant must, upon the termination of its tenancy, return to Landlord all
keys of stores, offices and toilet rooms, either furnished to, or otherwise
procured by, such Tenant.
14. All removals from the Building, or the carrying in or out of the
Building or from the premised demised to any tenant, of any safes, freight,
furniture or bulky matter of any description must take place at such time and in
such manner as Landlord or its agents may determine, from time to time. Landlord
reserves the right to inspect all freight to be brought into the Building and to
exclude from the Building all freight which violates any of the Rules and
Regulations or the provisions of such tenant's lease.
15. No tenant or occupant shall engage or pay any employees in the
Building or the Project, except those actually working for such tenant or
occupant in the Building or the Project, nor advertise for day laborers giving
an address at the Building or the Project.
16. No tenant or occupant shall purchase lighting maintenance, cleaning
towels or other like service, from any company or person not approved in writing
by Landlord.
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17. Landlord shall have the right to prohibit any advertising by any
tenant or occupant which, in Landlord's opinion, tends to impair the reputation
of the Building or the Project or its desirability as a building for offices,
and upon notice from Landlord, such tenant or occupant shall refrain from or
discontinue such advertising.
18. Each tenant, before closing and leaving the premises demised to
such tenant at any time, shall see that all entrance doors are locked and all
electrical equipment and lighting fixtures are turned off. Corridor doors, when
not in use, shall be kept closed.
19. Each tenant shall, at its expense, provide artificial light in the
premises demised to such tenant for Landlord's agents, contractors and employees
while performing janitorial or other cleaning services and making repairs or
alterations in said premises.
20. No premises shall be used, or permitted to be used for lodging or
sleeping, or for any unauthorized or illegal purposes.
21. The requirements of tenants will be attended to only upon
application at the management office of Landlord. Building employees shall not
be required to perform, and shall not be requested by any tenant or occupant to
perform, and work outside of their regular duties, unless under specific
instructions from the office of Landlord.
22. Canvassing, soliciting and peddling in the Building or the Project
are prohibited and each tenant and occupant shall cooperate in seeking their
prevention.
23. There shall not be used in the Building, either by any tenant or
occupant or by their gents or contractors, in the delivery or receipt of
merchandise, freight or other matter, any hand trucks or other means of
conveyance except those equipped with rubber tires, rubber side guards and such
other safeguards as Landlord may require.
24. If the premises demised to any tenant become infested with vermin,
such tenant, at its sole cost and expense, shall cause its premises to be
exterminated, from time to time, to the satisfaction of Landlord, and shall
employ such exterminators therefor as shall be approved in writing by Landlord.
25. No premises shall be used, or permitted to be used, at any time, as
a store for the sale or display of goods, wares or merchandise of any kind, or
as a restaurant shop, booth, bootblack or other stand, or for the conduct of any
business or occupation which predominantly involves direct patronage of the
general public in the premises demised to such tenant, or for manufacturing or
for other similar purposes.
26. No tenant shall clean any window of the Building from the outside.
27. No tenant shall move, or permit to be moved, into or out of the
Building or the
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premises demised to such tenant, any heavy or bulky matter, without the specific
approval of Landlord. If any such matter requires special handling, only a
qualified person shall be employed to perform such special handling. No tenant
shall place or permit to be placed, on any part of the floor or floors of the
premises demised to such tenant, a load exceeding the floor load per square foot
which such floor was designed to carry and which is allowed by law. Landlord
reserves the right to prescribe the weight and position of safes and other heavy
objects, which must be placed so as to distribute the weight.
28. With respect to work being performed by a tenant in its premises
with the approval of Landlord, the tenant shall refer all contractors,
contractors' representatives and installation technicians to Landlord for its
supervision, approval and control prior to the performance of any work or
services. This provision shall apply to all work performed in the Building and
the Project including installation of telephones, telegraph equipment,
electrical devices and attachments, and installations of every nature affecting
floors, walls, woodwork, trim, ceilings, equipment and any other physical
portion of the Building and the Project.
29. Landlord shall not be responsible for lost or stolen personal
property, equipment, money, or jewelry from the premises of tenants or public
rooms whether or not such loss occurs when the Building or the premises are
locked against entry.
30. Landlord may permit entrance to the premises of tenants by use of
pass keys controlled by Landlord employees, contractors, or service personnel
directly supervised by Landlord and employees of the United States Postal
Service.
31. Each tenant and all of tenant's representatives, shall observe and
comply with the directional and parking signs on the property surrounding the
Building, and Landlord shall not be responsible for any damages to any vehicle
towed because of non-compliance with parking regulations.
32. No tenant shall install any radio, telephone, television, microwave
or satellite antenna, loudspeaker, music system or other device on the roof or
exterior walls of the Building or on common walls with adjacent tenants or in
the Project Common Areas.
33. Each tenant shall store all rash and garbage within its premises.
No material shall be placed in the trash boxes or receptacles in the Building or
the Project unless such material may be disposed of in the ordinary and
customary manner of removing and disposing of trash and garbage and will not
result in a violation of any law or ordinance governing such disposal. All
garbage and refuse disposal shall be made only through entryways and elevators
provided for such purposes and at such times as Landlord shall designate.
34. Each tenant shall give prompt notice to landlord of any accidents
to or defects in plumbing, electrical or heating apparatus so that same may be
attended to properly.
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35. No tenant shall bring onto the Project or into the Building any
pollutants, contaminants, inflammable, gasolines, kerosene or hazardous
substances (as now or later defined under State or Federal law).
36. Landlord reserves the right to restrict access to and from the
Building between the hours of 6:00 P.M. and 7:00 A.M. on business days, 12:00
P.M. to 8:00 A.M. on Saturdays, and at all hours on Sundays and holidays.
37. All tenant and Tenants; servants, employees, agents, visitors,
invitees and licensees shall observe faithfully and comply strictly with the
foregoing Rules and Regulations and such other and further appropriate Rules and
Regulations as Landlord or Landlord's agent from time to time adopt.
38. Landlord shall furnish each tenant, at Landlord's expense, with two
(2) keys to unlock the entry level doors and two (2) keys to unlock each
corridor door entry to each tenant's premises and, at such tenant's expense,
with such additional keys as such tenant may request. No tenant shall install or
permit to be installed any additional lock on any door into or inside of the
premises demised to that tenant or make or permit to be made any duplicate of
keys to the entry level doors or the doors to such premises. Landlord shall be
entitled at all times to possession of a duplicate of all keys to all doors into
or inside of the premises demised to tenants of the Building. All keys shall
remain the property of Landlord. Upon the expiration of the Lease Term, each
tenant shall surrender all such keys to Landlord and shall deliver to Landlord
the combination to all locks on all safes, cabinets and vaults which will remain
in the premises demised to that tenant. Landlord shall be entitled to install,
operate and maintain security systems in or about the Project which monitor, by
computer, close circuit television or otherwise, persons entering or leaving the
Project, the Building and/or the premises demised to any tenant. For the purpose
of this rule the term "keys" shall mean traditional metallic keys, plastic or
other key cards and other lock opening devices.
39. Each person using the Parking Accommodations or other areas
designated by Landlord where parking will be permitted shall comply with all
Rules and Regulations adopted by Landlord with respect to the Parking
accommodations or other areas, including any employee or visitor parking
restrictions, and any sticker or other identification system established by
Landlord. Landlord may refuse to permit any person who violates any parking rule
or regulation to park in the Parking Accommodations or other areas, and may
remove any vehicle which is parked in the Parking Accommodations or other areas
in violation of the parking Rules and Regulations. The Rules and Regulations
applicable to the Parking Accommodations and the outside parking areas are as
follows:
(a) The maximum speed limit within the Parking
Accommodations shall be 5 miles per hour, the maximum
speed limit in other parking areas shall be 15 miles
per hour.
(b) All directional signs and arrows must be strictly
observed.
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(c) All vehicles must be parked entirely within painted
stall lines.
(d) No vehicle may be parked (i) in an area not striped
for parking, (ii) in a space which has been reserved
for visitors or for another person or firm, (iii) in
an aisle or on a ramp, (iv) where a "no parking" sign
is posted or which has otherwise designated as a no
parking area, (v) in a cross hatched area, (vi) in an
area bearing a "handicapped parking only" or similar
designation unless the vehicle bears an appropriate
handicapped designation, (vii) in an area bearing a
"loading zone" or similar designation unless the
vehicle is then engaged in a loading or unloading
function and (viii) in an area with a posted height
limitation if the vehicle exceeds the limitation.
(e) Parking passes, stickers or other identification
devices that may be supplied by Landlord shall remain
the property of Landlord and shall not be
transferable. A replacement charge determined by
Landlord will be payable by each tenant for loss of
any magnetic parking card or parking pass or sticker.
(f) Garage managers or attendants shall not be authorized
to make or allow any exceptions to these Rules and
Regulations.
(g) Each operator shall be required to park and lock his
or her own vehicle, shall use the Parking Facilities
at his or her own risk and shall bear full
responsibility for all damage to or loss of his or
her vehicle, and for all injury to persons and damage
to property caused by his or her operation of the
vehicle.
(h) Landlord reserves the right to tow away, at the
expense of the owner, any vehicle which is
inappropriately parked or parked in violation of
these Rules and Regulations.
40. Landlord reserve the right at any time and from time to time to
rescind, alter or waive, in whole or in part, any of the Building Rules and
Regulations when it is deemed necessary desirable or proper, in Landlord's
judgment for its best interest or of the best of the tenants of the Project.
41. No smoking is permitted within the premises or in the Building
pursuant to Scottsdale Revised Code , Section 19-16, Smoking Pollution Control
Ordinance.
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Tenant hereby acknowledges receipt of the Building Rules and
Regulations.
TENANT:
ORTHOPAEDIC BIOSYSTEMS LTD., INC., an
Arizona corporation
By:
Name:
Its:
Date:
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