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Exhibit 10.6
MAINSPRING CAPITAL, L.L.C.
COMMERCIAL LEASE
BEL DE MAR, L.L.C, an Arizona limited liability company
"Landlord"
AND
LIMELIGHT MAINSTREET TEMPE, LLC.
"Tenant"
SUMMARY OF LEASE TERMS*
Date:
November 18, 2002
Lease Number:
________________________________________
Project:
Airway Corporate Center
Square Footage:
13,341 (approximately)
Address:
2220 W. 14th Street Tempe, AZ
Term:
Three Years
Base Rental Schedule:
________________________________________
Current Rental Tax Rate:
2.3%
Current Estimated Operating Expenses: $.18 per square foot per
month
Other Items:
OPTIONS TO EXTEND: Tenant has one (1)
three (3)-year options to extend the
term of the lease subject to the terms
of paragraph 28, "Options".
TENANT IMPROVEMENT ALLOWANCE: Landlord
agrees provide Tenant with a tenant
improvement allowance of forty-thousand
dollars ($45,000) subject to the terms
outlined in paragraph 29, "Tenant
Improvement Allowance."
*NOTE: This summary is provided for the Tenant's convenience only.
It is not to
be
construed as a part of the above referenced Lease Agreement. In
the
event that there is a conflict between this summary of lease terms
and
the
Lease Agreement, the language in the Lease Agreement shall
prevail.
<PAGE>
STANDARD LEASE AGREEMENT
PHXINDNII
DATE: NOVEMBER 18, 2002
LEASE AGREEMENT
THIS LEASE AGREEMENT, made and entered into by and between Bel de
Mar, L.L.C.,
an Arizona limited liability company, hereinafter referred to as
"Landlord",
and Limelight Mainstreet Tempe, LLC, hereinafter referred to as
"Tenant";
WITNESSETH:
1. PREMISES AND TERM. In consideration of the mutual obligations of
Landlord and
Tenant set forth herein. Landlord leases to Tenant, and Tenant
hereby takes from
Landlord the Premises situated within the County of Maricopa, State
of Arizona,
more particularly described on Exhibit "A" attached hereto and
incorporated
herein by reference, (the "Premises"), together with all rights,
privileges,
easements, appurtenances, and amenities belonging to or in any way
pertaining to
the Premises, to have and to hold, subject to the terms, covenants
and
conditions of this Lease. The term of this Lease shall commence on
the
commencement date hereinafter set forth and shall end on NOVEMBER
18, 2005. If
this Lease is executed before the Premises become vacant or
otherwise available
and ready for occupancy, or if any present Tenant or occupant of
the Premises
holds over, and Landlord cannot acquire possession of the Premises
prior to the
date recited as the commencement date of this Lease, Landlord shall
not be
deemed in default hereunder, and Tenant agrees to accept possession
of the
Premises at such time as Landlord is able to tender the same, which
date shall
thenceforth be deemed the "commencement date", and Landlord hereby
waives
payment of rent covering any period prior to the tendering of
possession to
Tenant hereunder.
A.
EXISTING BUILDING. The commencement date shall be NOVEMBER 18,
2002.
Tenant acknowledges that, (i) it has inspected and accepts the
Premises, (ii)
the buildings and improvements comprising the same are suitable for
the purpose
for which the Premises are leased, (iii) the Premises are in good
and
satisfactory condition, and (iv) no representations as to the
repair of the
Premises, nor promises to alter, remodel or improve the Premises
have been made
by Landlord (unless otherwise set forth in the Lease). In no event
shall any
existing defects in the Premises or any limitation on its use be
considered a
breach by Landlord under this lease or a failure to any conditions
to Tenant's
obligations hereunder. Upon request by Landlord, Tenant shall
execute and
deliver to Landlord a Letter of Acceptance of delivery of the
Premises.
B.
BUILDING TO BE CONSTRUCTED OR SHELL SPACE. If the Premises or
part
thereof are to be constructed, the commencement date shall be
deemed to be the
sooner of the date upon which the Premises and other improvements
to be erected
in accordance with the plans and specifications described on
Exhibit "C"
attached hereto and incorporated herein by reference (the "Plans")
have been
substantially completed or the date upon which the Tenant takes
occupancy. As
used herein, the term "substantially completed" shall mean, that in
the opinion
of the architect or space planner that prepared the Plans, such
improvements
have been completed in accordance with the Plans and the Premises
are in good
and satisfactory condition, subject only to completion of minor
punch list
items. As soon as such improvements have been substantially
completed, Landlord
shall notify Tenant in writing that the commencement date has
occurred. Within
ten (10) days thereafter, Tenant shall submit to Landlord in
writing a punch
list of items needing completion or correction. Landlord shall use
reasonable
efforts to complete such items within thirty (30) days after the
receipt of such
notice. In the event Tenant, its employees, agents or contractors
cause
construction of such improvements to be delayed, the commencement
date shall be
deemed to be the date that, in the opinion of the architect or
space planner
that prepared the Plans, substantial completion would have occurred
if such
delays had not taken place. The taking of possession by Tenant
shall be deemed
to conclusively establish that the buildings and other improvements
had been
completed in accordance with the Plans, that the Premises are in
good and
satisfactory condition as of when possession was taken, and that
Tenant has
accepted such buildings and other improvements without
representation or
warranty from Landlord. Upon Landlord's request, Tenant shall
execute and
deliver to Landlord a Letter of Acceptance of delivery of the
Premises.
2. BASE RENT, SECURITY DEPOSIT AND OPERATING EXPENSE PAYMENTS.
A.
BASE RENT. Tenant agrees to pay Landlord base rent ("Base Rent")
for the
Premises, in advance, without demand, deduction or set off, at the
rate of six
thousand and three dollars ($6,003)* per month during months 1-12
of the initial
lease term, seven thousand and three and 50/100's dollars
($7,003.50)* per month
during months 13-24 of the initial lease term, and eight thousand
and four
($8.004)* per month for months 25-36 of the initial lease term. One
(1) such
monthly installment, plus the other monthly charges set forth in
Paragraph 2.C
below for such one (1) month, shall be due and payable on the date
hereof, and
thereafter, one such monthly installment shall be due and payable
on or before
the first day of each succeeding calendar month following the
commencement date,
except that all payments due hereunder for any fractional calendar
month shall
be prorated. The obligation of Tenant to pay Base Rent and other
sums to
Landlord and the obligations of Landlord under
* plus
current rental tax
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this Lease are independent obligations. Tenant shall have no right
at any time
to abate, reduce, or set-off any rent due hereunder except where
expressly
provided in this Lease. Tenant waives and releases all statutory
liens and
off-set rights as to rent.
B. SECURITY DEPOSIT. In addition, Tenant agrees to deposit with
Landlord on the date hereof the sum of Fifteen thousand and 00/100
Dollars
($15,000.00) and also agrees to deposit with Landlord an additional
Fifteen
thousand and 00/100 Dollars ($15,000.00) six (6) months from the
commencement
date, which shall be held by Landlord, without obligation for
interest, as
security for the performance of Tenant's obligations under the
Lease, it being
expressly understood and agreed that this deposit is not an advance
rental
deposit or a measure of Landlord's damages in case of Tenant's
default. Upon
each occurrence of an event of default, Landlord may use all or
part of the
deposit to pay rent or other payments due Landlord under this
Lease, and the
cost of any other damage, injury, expense or liability caused by
such event of
default without prejudice to any other remedy provided herein or
provided by
law. On demand, Tenant shall pay Landlord the amount that will
restore the
security deposit to its original amount. The security deposit shall
be deemed
the property of Landlord, but any remaining balance of such deposit
shall be
returned by. Landlord to Tenant within thirty (30) days from the
time Tenant's
obligations under this Lease have been fulfilled, less a
refurbishment fee equal
to fifteen percent of the total deposit
C.
OPERATING EXPENSE PAYMENTS. During each month of the Lease Term, on
the
same date that Base Rent is due, Tenant agrees to pay to Landlord
as additional
rent an amount equal to one-twelfth of the amount, as estimated by
Landlord, of
Tenant's Proportionate Share (hereinafter defined) of Operating
Expenses for the
Project. Payments thereof for any fractional calendar month shall
be prorated.
The term "Operating Expenses" means all costs and expenses incurred
by Landlord
with respect to the ownership, maintenance, and operation of the
Project
including, but not limited to costs of Taxes (hereinafter defined)
and fees
payable to tax consultants and attorneys for consultation and
contesting taxes;
insurance; utilities (subject to the other provisions of this Lease
regarding
utilities) maintenance, repair and replacement of all portions of
the Project,
including without limitation, paving and parking areas, roads,
roofs, alleys,
and driveways, mowing, landscaping, exterior painting, utility
lines, mechanical
systems, and amounts paid to contractors and subcontractors for
work or services
performed in connection with any of the foregoing; charges or
assessments of any
association of which the Project is subject; property management
fees payable to
a property manager, including any affiliate of Landlord, or if
there is no
property manager, an administration fee of fifteen percent (15%) of
Operating
Expenses payable to Landlord; security services, if any; trash
collection,
sweeping and removal; and additions, alterations or replacements
made by
Landlord at Landlord's sole discretion to the Project in order to
comply with
applicable laws or codes as amended from time to time or that are
appropriate to
the continued operation of the Project, provided that the cost of
such
additions, alterations, or replacements that are required to be
capitalized for
federal income tax purposes shall be amortized on a straight line
basis over a
period equal to the lesser of the useful life thereof for federal
income tax
purposes or ten (10) years. Operating Expenses do not include debt
service under
mortgages or ground rent under ground leases, costs of restoration
to the extent
of net insurance proceeds received by Landlord with respect
thereto, leasing
commissions, renovating of space for tenants, or depreciation or
amortization
except as provided above.
The monthly estimated Operating Expense payments may be increased
or decreased
by Landlord from time to time to reflect the projected actual cost
of all such
items. If the Tenant's total payments for any year are less that
Tenant's
Proportionate Share of actual operating costs for such year, Tenant
shall pay
the difference to Landlord within thirty (30) days after demand. If
the total
payments of Tenant for any year are more than Tenant's
Proportionate Share of
actual operating costs for such year, Landlord shall retain such
excess and
credit it against Tenant's next payments. For purposes of
calculating Tenant's
Proportionate Share of Operating Expenses, a year shall mean a
calendar year
except the first year, which shall begin on the Commencement Date,
and the last
year, which shall end on the expiration of this Lease.
The Tenant's "Proportionate Share" shall be a fraction, having as
its numerator
the floor area of the Premises and its denominator the total floor
area of the
Project, all as determined by Landlord. Landlord may equitably
increase Tenant's
Proportionate Share for any item of the Project that includes the
Premises.
3. TAXES.
A.
Subject to Tenant's reimbursement obligation and Landlord's right
to
contest, Landlord agrees to pay all taxes, assessments and
governmental charges
of any kind and nature (collectively referred to herein as "Taxes")
that accrue
against the Premises, and/or the land and/or improvements of which
the Premises
are a part. Landlord shall have the right to contest by appropriate
legal
proceedings the amount, validity, or application of any Taxes or
liens thereof.
The Landlord shall have the right to employ a tax consulting firm
and legal
counsel to attempt to assure a fair tax burden on the building and
grounds
within the applicable taxing jurisdiction. Tenant agrees to pay
its
proportionate share of the cost of such consultant and legal
counsel.
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B.
Tenant shall be liable for all taxes levied or assessed against
any
personal property or fixtures placed in the Premises. If any such
taxes are
levied or assessed against Landlord or Landlord's property and (i)
Landlord pays
the same or (ii) the assessed value of Landlord's property is
increased by
inclusion of such personal property and fixtures and Landlord pays
the increased
taxes, then, upon demand Tenant shall pay to Landlord such
taxes.
C.
If at any time during the term of this Lease, there shall be
levied,
assessed or imposed on Landlord a capital levy or other tax
directly or
indirectly upon the rents received therefrom and/or a franchise
tax, any excise,
transaction, sales or privilege tax, assessment, levy or charge
measured by or
based, in whole or in part, upon such rents from the Premises
and/or the land
improvements of which the Premises are a part, then all such taxes,
assessments,
levies or charges, or the part thereof so measured or based, shall
be payable to
Landlord, monthly or upon demand, at the option of the Landlord, as
additional
rent.
4. LANDLORD'S REPAIRS.
A.
Landlord, at its own expense, shall maintain only the
structural
soundness of the roof, foundation and exterior walls of the
Premises in good
repair, reasonable wear and tear and casualty losses and damages
caused by
Tenant excluded. The term "walls" as used herein shall not include
windows,
glass or plate glass, doors and overhead doors, special store
fronts, dock
bumpers, dock plates or levelers, or office entries Tenant shall
immediately
give Landlord written notice of defect or need for repairs, after
which Landlord
shall have reasonable opportunity to repair same or cure such
defect. Landlord's
obligation to maintain the aforementioned items shall be limited
solely to the
cost of such repairs or maintenance or the curing of any defect in
the same.
B.
Landlord reserves the right to perform the paving maintenance,
common
area and landscape replacement and maintenance, exterior painting,
common water
and sewage line plumbing and any other items that are otherwise
Tenant's
obligations under Paragraph 5.A, all of which are sometimes
referred to herein
as common area charges, and Tenant shall be liable for its
proportionate share
of the cost and expense of such repair, replacement, maintenance
and other such
items.
C.
Tenant agrees to pay its proportionate share of the cost of (i)
maintenance and/or landscaping of any property that is a part of
the building
and/or project of which the Premises are a part, (ii) maintenance
and/or
landscaping of any property that is maintained or landscaped by any
property
owner or community owner association that is named in the
restrictive covenants
or deed restrictions to which the Premises are subject, and (iii)
operating and
maintaining any property, facilities or services provided for the
common use of
Tenant and other tenants of any project or building of which the
Premises are a
part.
D.
Landlord reserves the right to alter or modify the building of
which the
premises are a part and/or common areas associated therewith, when
such
alterations or modifications are required by governmental laws,
codes,
ordinances, regulations, or any other applicable authorities,
including, without
limitation, the Americans with Disabilities Act of 1990 (the
"ADA"), in which
event Tenant shall be liable for its proportionate share of such
cost. If such
modification is a capital modification for the general benefit of
the project,
and is required regardless of Tenant's particular use of the
Premises, then the
cost shall be an operating expense allocated over the lesser of
five (5) years
or the useful life of the modification. Notwithstanding the
foregoing, if such
modification is predicated by Tenant's particular use of the
Premises or is
principally for the benefit of Tenant (and not other Tenants of the
building)
the cost shall be borne entirely by Tenant and Tenant shall
reimburse Landlord
for same promptly upon demand.
E.
Tenant may audit Landlord's books relevant to the operating
expenses
upon reasonable notice to Landlord; provided, however, Tenant
agrees to pay all
costs associated with or resulting from such audit, including
reimbursement to
Landlord and Landlord's agents for time or costs incurred.
5. TENANT'S REPAIRS.
A.
Landlord reserves the prior right, exercisable at any time and in
its
sole discretion, to coordinate, perform, or to contract of the
performance of
Tenant's repair, maintenance and replacement obligations under this
Paragraph 5.
Tenant shall reimburse Landlord upon demand for the costs of any
such services
or repairs incurred by Landlord. Except only those repairs for
which Landlord is
responsible under Paragraph 4.A, Tenant, at Tenant's sole cost and
expense
shall: (i) maintain all parts of the Premises, landscape and
grounds surrounding
the Premises and the building at which the Premises are a part, in
good
condition, (ii) promptly make all necessary repairs and
replacements, (iii) keep
the parking areas, driveways and alleys surrounding the Premises in
a clean and
sanitary condition, and maintain any spur track servicing the
Premises.
B.
Tenant, at its own cost and expense, shall enter into and deliver
to
Landlord a regularly scheduled preventative maintenance service
contract with a
maintenance contractor approved by Landlord for servicing all hot
water, heating
and air-conditioning systems and other equipment within the
Premises. The
service contract must include all services required by the Landlord
and must
become effective within thirty (30) days of the date Tenant takes
possession of
the Premises. In the event Tenant does not deliver said contract to
Landlord
within thirty (30) days of the commencement date, the Landlord has
the right to
contract a third-party professional contractor for said service
without notice
to Tenant, and Tenant shall upon demand reimburse Landlord for the
full cost
thereof. Additionally Landlord, at any time and in its sole
discretion, reserves
the right
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upon ninety (90) days written notice to Tenant to enter into a
regularly
scheduled preventative maintenance service contract covering the
service, repair
and/or replacement of any or all such items for the entire
building(s) of which
the Premises are a part, in which event Tenant shall be liable for
its
proportionate share of the cost and expense of said preventative
maintenance
service contract in accordance with Paragraph 4 above.
C.
Subject to the provisions of Paragraph 10, Tenant shall repair and
pay
for any damage to the Premises or the Project caused by Tenant or
Tenant's
employees, agents or invitees, or caused by Tenant's default
hereunder. Access
to the roof or the exterior walls of the Premises or Project for
purposes of
repairs or otherwise by the Tenant shall be subject to Landlord's
prior approval
and to such conditions as Landlord may require.
6. ALTERATIONS. Tenant shall not make any alterations, additions,
partitions, or
other improvements to the Premises without the prior written
consent of
Landlord. Tenant, at its own cost and expense, may erect shelves,
bins,
machinery and trade fixtures as it desires as well as alterations,
additions,
partitions, communication towers or other improvements which have
been
specifically consented to in writing by Landlord, provided that (i)
such items
do not alter the basic character of the Premises or the building
and/or
improvements of which the Premises are a part, (ii) such items do
not overload
or damage the same, (iii) such items may be removed without injury
to the
Premises, and (iv) the construction, erection or installation
thereof complies
with all applicable governmental laws, codes, ordinances,
regulations, or any
other applicable authorities, including, without limitation, the
Americans with
Disabilities Act of 1990 (the "ADA"), and with Landlord's
details,
specifications and other requirements, (v) any architectural,
engineering,
construction management, permits, inspections or other cost or fee
required to
assure compliance with conditions set forth in this Paragraph 6
shall be paid by
Tenant promptly upon demand. All alterations, additions,
partitions, or other
improvements erected by Tenant shall be and remain the property of
Tenant during
the term of this Lease; provided however, at the termination of
this Lease,
Landlord shall have the option, exercisable in Landlord's sole
discretion, to
require Tenant either to remove, at Tenant's sole cost and expense,
all or part
of each alterations, additions, partitions, or other improvements,
at which time
Tenant shall promptly restore the Premises to its original
condition, or to keep
in place the same at which time such alterations, additions,
improvements, and
partitions shall become the property of Landlord. If requested by
Tenant at any
time prior to termination of this Lease, Landlord shall, in its
sole discretion,
give or withhold its consent to the future removal by Tenant of any
particular
alteration, addition, partition or other improvement then existing
or planned by
Tenant; provided, however, Landlord shall not unreasonably withhold
its consent
to Tenant's future removal of any specialized equipment installed
in the
Premises by Tenant Such consent must be in writing to be binding
upon Landlord.
Landlord hereby consents to Tenant's removal of those items listed
on Exhibit D
attached hereto and incorporated herein by this reference. (Note:
The requesting
and granting of such consent shall not preclude Tenant from
subsequently
electing to leave any such items in place or, under such
circumstances, Landlord
from requiring that such items be removed.) (Note: Tenant's
obligation to
restore the Premises to its original condition shall apply
following the removal
of a particular alteration, addition, partition or other
improvement pursuant to
Landlord's consent.) All shelves, bins, machinery and trade
fixtures installed
by Tenant shall be removed on or before the earlier to occur of the
date of
termination of this Lease or vacating the Premises, at which time
Tenant shall
restore the Premises to their original condition. All
alterations,
installations, removals and restoration shall be performed in a
good and
workmanlike manner so as not to damage or alter the primary
structure or
structural qualities of the buildings and other improvements
situated on the
Premises or of which the Premises are a part.
7. SIGNS. Any signage Tenant desires for the Premises shall be
subject to
Landlord's written approval. Tenant shall repair, paint and/or
replace the
building facia surface to which its signs are attached upon
vacation of the
Premises, or the removal or alteration of the signage. Tenant shall
not (i) make
any changes to the exterior of the Premises, (ii) install any
exterior lights,
decorations, balloons, flags, pennants, banners or painting, or
(iii) erect or
install any signs, windows, or door lettering, placards,
decorations or
advertising media of any type which can be viewed from the exterior
of the
Premises, without Landlord's prior written consent. Tenant, at its
sole cost,
shall obtain all applicable governmental permits and approvals for
signage and
exterior treatments. All signs, decorations, advertising media,
blinds,
draperies and other window treatment or bars or other security
installations
visible from outside the Premises shall conform in all respects to
the criteria
established by Landlord and any applicable governmental laws,
ordinances,
regulations, or other requirements.
8. PARKING. Tenant shall be entitled to park in common with other
tenants of the
Project in those areas designed for non-reserved parking. Tenant
agrees not to
burden the parking facilities and agrees to cooperate with Landlord
and other
tenants in the use of the parking facilities. Landlord reserves the
right, in
its absolute discretion, to determine whether parking facilities
are becoming
crowded and, in such event, to allocate parking spaces among Tenant
and other
tenants,. Landlord shall not be responsible for enforcing Tenant's
parking
rights against any third parties. No vehicle storage of any nature
shall be
allowed or permitted in any parking area without Landlord's prior
written
consent.
9. UTILITIES.
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A.
Landlord agrees to provide normal water and electricity connection
to
the Premises as determined by Landlord's sole, reasonable
discretion. Subject to
the following qualifications, Tenant shall have the right to
increase the
electrical capacity of the Premises by installing additional, or
upgrading
existing, electrical system components in or serving the Premises.
All such
installations and/or upgrades shall be at Tenant's sole cost and
expense and
shall be performed only after obtaining Landlord's written consent,
which
consent shall not be unreasonably withheld or delayed. Tenant shall
provide
Landlord with such detail as Landlord shall request regarding such
installations
and/or upgrades. If any installation or upgrade requires work to be
performed
outside of the Premises, then Landlord may further reasonably
condition its
consent thereto on a case-by-case basis. All such installations
and/or upgrades
are further subject to the provisions of Paragraph 6. Tenant shall
pay for all
water, gas, heat, light, power, telephone, sewer, sprinkler
services, refuse and
trash collection, and other utilities and services used on or at
the Premises
and any maintenance or inspection charges for utilities, together
with any
taxes, penalties, surcharges or the like pertaining to the Tenant's
use of the
Premises. Landlord shall have the right to cause any of said
services to be
separately metered or charged to Tenant by provider, at Tenant's
expense. Tenant
shall pay its share of all charges for jointly metered utilities,
based on
consumption as reasonably determined by Landlord. Landlord shall
not be liable
for any interruption or failure of utility service on the
Premises.
B.
In the event water is not separately metered to Tenant, Tenant
agrees
that it will not use water for uses other than normal domestic
restroom and
kitchen usage; and, Tenant does further agree to reimburse Landlord
for the
entire amount of common water costs as additional rental if, in
fact, Tenant
uses water for uses other than normal domestic restroom and kitchen
uses without
first obtaining Landlord's written permission. Furthermore, Tenant
agrees in
such event to install at its own expense, a submeter to determine
Tenant's
usage.
C.
Tenant agrees it will not use sewer capacity for any use other
than
normal domestic restroom and kitchen use. Tenant further agrees to
notify
Landlord of any other sewer use ("excess sewer use") and also
agrees to
reimburse Landlord for the costs and expenses related to Tenant's
excess sewer
use, which shall include, but is expressly herein not limited to,
the cost of
acquiring additional sewer capacity to service Tenant's Lease.
10. INSURANCE.
A.
Subject to Tenant's reimbursement obligation, Landlord shall
maintain
such fire and extended coverage insurance covering the building
situated on the
Premises or of which the Premises are a part as Landlord deems
appropriate. Such
insurance may provide for a commercially reasonable deductible.
Landlord may,
but is not obligated to, maintain such other insurance and
additional coverage
as it may deem necessary, including but not limited to,
comprehensive general
liability insurance, loss of rental insurance for up to 12 months
rental, and
such additional insurance and coverage shall be reimbursable by
Tenant as
provided herein. The Project may be included in a blanket policy
(in which case
the cost of such insurance allocable to the Project will be
determined by
Landlord based upon insurer's cost calculations).
B.
Tenant, at its own expense, shall maintain during the term of this
Lease
a policy or policies of worker's compensation and comprehensive
general
liability insurance, including personal injury and property damage,
with
contractual liability endorsement, in the amount of $1,000,000 for
property
damage and $2,000,000 per occurrence for personal injuries or
deaths of persons
occurring in or about the Premises. Tenant, at its own expense,
also shall
maintain during the term of this Lease fire and extended coverage
insurance
covering the replacement cost of (i) all alterations, additions,
partitions and
Tenant's persona] property contained within the Premises by Tenant
or by
Landlord on behalf of Tenant and (ii) all of Tenant's personal
property
contained within the Premises. Said policies shall (i) name
Landlord as an
additional insured and insure Landlord's contingent liability under
this Lease
(except for the worker's compensation policy, which instead shall
include waiver
of subrogation endorsement in favor of Landlord), (ii) be issued by
an insurance
company which is acceptable to Landlord, (iii) provide that said
insurance shall
not be canceled unless thirty (30) days written notice shall be
given to
Landlord, and (iv) provide primary coverage to Landlord, when any
policy issued
to Landlord provides duplicate or if similar coverage, Landlord's
policy will be
excess over Tenant's policies. Said policies or certificates
thereof shall be
delivered to Landlord by Tenant within ten (10) written days of the
commencement
of the term of the Lease and upon each renewal of said
insurance.
C.
Tenant will not permit the Premises to be used for any purpose or
in any
manner that would (i) void the insurance thereon, (ii) increase the
insurance
risk, or (iii) cause the disallowance of any sprinkler credits,
including
without limitation, use of the Premises for the receipt, storage or
handling of
any product, material or merchandise that is explosive or highly
flammable. If
any increase in the cost of any insurance of the Premises or the
building of
which the Premises are a part is caused by Tenant's use of the
Premises, or
because Tenant vacates the Premises, then Tenant shall pay the
amount of such
increase to Landlord.
11. FIRE AND CASUALTY DAMAGE.
A.
If the Premises or the building of which the Premises are a part
should
be damaged or destroyed by fire or other peril, Tenant immediately
shall give
written notice to Landlord. If the buildings situated on the
Premises or of
which the Premises are a part should be totally destroyed by any
peril covered
by insurance to be provided by Landlord under Paragraph
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10. A above, or if they should be so damaged thereby that, in the
Landlord's
estimation, rebuilding or repairs cannot be completed within one
hundred and
twenty ninety (90) days after the date of such damage, this Lease
shall
terminate and rent shall be abated during the unexpired portion of
this Lease,
effective upon the date of the occurrence of such damage, provided
Tenant has
paid to Landlord the deductible or applicable portion of the
deductible, as the
case may be, under the Landlord's insurance policy.
B.
If the buildings situated upon the Premises or of which the
Premises are
a part, should be damaged by any peril covered by the insurance to
be provided
by Landlord under Paragraph 10.A above, and in Landlord's
estimation, rebuilding
or repairs can be substantially completed within one hundred and
twenty ninety
(90) days after the date of such damage, this Lease shall not
terminate, and
Landlord shall restore the Premises to substantially its previous
condition,
except that Landlord shall not be required to rebuild, repair or
replace any
part of the partitions, fixtures, additions and other improvements
that may have
been constructed, erected or installed in, or about the Premises or
for the
benefit of, or by or for the Tenant. Tenant shall pay to Landlord
the amount of
the deductible under Landlord's insurance policy within thirty (30)
days after
receipt of Landlord's invoice therefor. If the damage covered by
the insurance
also involves portions of the building or buildings other than the
Premises,
Tenant shall pay only a portion of the deductible, based on the
ratio of the
cost of repairing the damage in the Premises to the total of
repairing all
damage in the building or buildings. If such repairs and rebuilding
have not
been substantially completed within one hundred fifty (150) days
after the date
of such damage, Tenant, at Tenant's exclusive remedy, may, upon
payment of
insurance policy, terminate this Lease by delivering written notice
of
termination to Landlord in which event the rights and obligations
hereunder
shall cease and terminate.
C.
Notwithstanding anything herein to the contrary, in the event the
holder
of any indebtedness secured by a mortgage or deed of trust covering
the Premises
requires that the insurance proceeds be applied to such
indebtedness, then
Landlord shall have the right to terminate this Lease by delivering
written
notice of termination to Tenant within fifteen (15) days after such
requirements
is made known by any such holder, whereupon all rights and
obligations hereunder
shall cease and terminate.
D.
Anything in this Lease to the contrary notwithstanding, Landlord
and
Tenant hereby waive and release each other of and from any and all
rights of
recovery, claim, action or cause of action, against each other,
their agents,
officers and employees, for any loss or damage that may occur to
the Premises,
improvements to the building of which the Premises are a part, or
personal
property (building contents) within the building and /or Premises,
for any
reason regardless of cause or origin. Each party of this Lease
agrees
immediately after execution of this Lease to give each insurance
company, which
has issued to its policies of fire and extended coverage insurance,
written
notice of the terms of the mutual waivers contained in this
subparagraph, and if
necessary, to have the insurance policies properly endorsed.
12. LIABILITY AND INDEMNIFICATION. Except for any claims, rights of
recovery and
causes of action that Tenant has released, Landlord shall hold
Tenant harmless
and defend Tenant against any and all claims or liability for any
injury or
damage to any person in, on or about the Premises or any part
thereof and/or the
building of which the Premises are a part, when such injury shall
be caused by
the act, neglect, negligence, fault of, or omission of any duty
with respect to
the same by Landlord, its agents, servants and employees. Except
for any claims,
rights of recovery and causes of action that Landlord has released,
Tenant shall
hold Landlord harmless from and defend Landlord against any and all
claims or
liability for any injury or damage to any person or property
whatsoever
occurring in, on or about the Premises or any part thereof and/or
of the
building of which the Premises are a part, including without
limitation
elevators, stairways, passageways or hallways, the use of which
Tenant may have
in accordance with this Lease, when such injury or damage shall (i)
be caused by
the act, neglect, negligence, fault of, or omission of any duty
with respect to
the same by Tenant, its agents, servants, employees, or invitees,
(ii) arise
from the conduct of management of any work done by the Tenant in or
about the
Premises, (iii) arise from transactions of the Tenant, or (iv)
arise from
Tenant's breach of any covenant contained in this Lease, including
but not
limited to Tenant's failure to comply with any of the matters set
forth relating
to environmental requirements as defined and described in Paragraph
23 and
incorporated herein by reference, along with all reasonable costs,
counsel fees,
expenses and liabilities incurred in connection with any such claim
or action or
proceeding brought thereon. The provisions of this Paragraph 12
shall survive
the expiration or termination of this Lease with respect to any
claims or
liability occurring prior to such expiration or termination.
13. USE. The Premises shall be used only for the purpose of data
center,
co-location, and general offices and for such other lawful purposes
as may be
incidental thereto. Outside storage, including without limitation,
storage of
trucks and other vehicles and the washing thereof at any time is
prohibited
without Landlord's prior written consent. Tenant shall, at its own
cost and
expense, obtain any and all licenses and permits necessary for such
use, shall
at all times maintain the Premises in a clean, healthful and safe
condition and
comply with all governmental laws, codes, ordinances, regulations
or any other
applicable authorities with regard to the use, condition or
occupancy of the
Premises including, without limitation, the ADA. Tenant shall be
responsible, at
Tenant's sole cost and expense, for the correction, prevention, and
abatement of
nuisances in or upon, or connected with, the Premises. Tenant shall
not permit
any objectionable or unpleasant odors, smoke, dust, gas, noise,
vibrations, pest
infestations to emanate from the Premises, nor take any other
action that would
constitute a nuisance or would disturb,
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unreasonably interfere with, or endanger Landlord or any other
tenants of the
building or project of which the Premises are a part. Tenant's use
of the
Premises shall at all times comply with the insurance provisions in
Paragraph 10
hereof.
14. INSPECTION. Landlord and its agents and representatives shall
have the right
to enter the Premises at any reasonable time during business hours
to inspect
the Premises and to make such repairs as may be required or
permitted pursuant
to this Lease. During the period that is six (6) months prior to
the end of the
Lease term upon telephonic notice to Tenant, Landlord and
Landlord's
representative may enter the Premises during business hours for the
purpose of
showing the Premises. In addition, Landlord shall have the right to
erect a
suitable sign on the Premises stating the Premises are available.
Tenant shall
notify Landlord in writing at least thirty (30) days prior to
vacating the
Premises and shall arrange to meet with Landlord for a joint
inspection of the
Premises prior to vacating. If Tenant fails to give such notice or
to arrange
for such inspection, then Landlord's inspection of the Premises
shall be deemed
correct for the purpose of determining Tenant's responsibility for
repairs and
restoration of the Premise.
15. ASSIGNMENT AND SUBLETTING.
A.
Tenant shall not have the right to assign, sublet, transfer or
encumber
this Lease, or any interest therein, without the prior written
consent of
Landlord, or without such consent as provided for in this Section
of the Lease.
Any attempted assignment, subletting, transfer or encumbrance by
Tenant in
violation of the terms and covenants of this Paragraph shall be
void.
Notwithstanding the foregoing, Tenant shall have the right to
assign this Lease
to any affiliate provided that such assignment is in form
satisfactory to
Landlord. Any assignee, Sub-Tenant or transferee of Tenant's
interest in this
Lease (all such assignees, Sub-Tenant and transferees being
hereinafter referred
to as "Transferees"), by assuming Tenant's obligations hereunder,
shall assume
liability to Landlord for all amounts paid to persons other than
Landlord by
such Transferees is contravention of this Paragraph. No assignment,
subletting
or other transfer, whether consented to by Landlord or not
permitted hereunder
shall relieve Tenant of its Liability hereunder. If an event of
default occurs
while the Premises or any part thereof are assigned or sublet, then
Landlord, in
addition to any other remedies herein provided, or provided by law,
may collect
directly from such Transferee all rents payable to the Tenant and
apply such
rent against any sums due Landlord hereunder. No such collection
shall be
construed to constitute a novation or a release of Tenant from the
further
performance of Tenant's obligations hereunder.
B.
The Tenant's principal operating business as defined herein shall
be
deemed approved by the Landlord with respect to the Tenant's rights
under this
or any other applicable Section of the Lease. The Tenant's
principal business is
in operating data center co-location facilities, i.e. providing a
facility with
certain attributes, amenities and services that are desirable for
housing and
operating computer equipment for the Tenant's customers
("Customers"). Customers
may enter into agreements with