for
Scottsdale Technology Center
14455, 14555, 14505 North Hayden Road
Scottsdale, Arizona 85260
IDS LIFE INSURANCE COMPANY
A MINNESOTA CORPORATION
GO DADDY SOFTWARE, INC.
A ARIZONA CORPORATION
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PAGE
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BASIC LEASE
INFORMATION
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3
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AGREEMENT
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4
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TERM.
DELIVERY & ACCEPTANCE OF PREMISES
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4
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MONTHLY
RENT. RENTAL ADJUSTMENT & CONVERSION
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5
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OPERATING
EXPENSES
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5
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INSURANCE
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7
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USE
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8
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REQUIREMENTS
OF LAW: FIRE INSURANCE
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8
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ASSIGNMENTS
AND SUBLETTING
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8
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RULES AND
REGULATIONS
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11
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COMMON
AREAS
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11
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LANDLORD’S SERVICES
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11
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TENANTS CARE
OF THE PREMISES
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12
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ELECTRICAL
SERVICES
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12
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ALTERATIONS
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12
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MECHANICS’ LIEN
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13
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END OF
TERM
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13
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EMINENT
DOMAIN
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13
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DAMAGE AND
DESTRUCTION
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13
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SUBORDINATION
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14
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ENTRY BY
LANDLORD
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14
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INDEMNIFICATION. WAIVER AND
RELEASE
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15
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SECURITY
DEPOSIT
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15
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QUIET
ENJOYMENT
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16
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EFFECT OF
SALE
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16
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DEFAULT
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16
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PARKING
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17
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MISCELLANEOUS
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18
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Landlord’s Initials
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Tenant’s Initials
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/s/ [ILLEGIBLE]
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2
THIS OFFICE
LEASE (the “Lease”) is entered into by Landlord and
Tenant as described in the following Basic Lease Information as of
the Date which is set forth for reference only in the following
Basic Lease Information.
Landlord and
Tenant agree:
ARTICLE 1.
BASIC LEASE INFORMATION
THE FOLLOWING
BASIC LEASE INFORMATION IS A PART OF THIS LEASE, BUT DOES NOT
CONSTITUTE THE ENTIRE LEASE. TENANT ACKNOWLEDGES THAT IT HAS READ
ALL OF THE PROVISIONS CONTAINED IN THE ENTIRE LEASE AND ALL
EXHIBITS WHICH ARE A PART THEREOF AND AGREES THAT THIS LEASE,
INCLUDING THE BASIC LEASE INFORMATION AND ALL EXHIBITS, REFLECTS
THE ENTIRE UNDERSTANDING AND REASONABLE EXPECTATIONS OF LANDLORD
AND TENANT REGARDING THE PREMISES. TENANT ALSO ACKNOWLEDGES THAT IT
HAS HAD THE OPPORTUNITY TO REVIEW THIS LEASE PRIOR TO EXECUTION
WITH LEGAL COUNSEL AND SUCH OTHER ADVISORS AS TENANT DEEMS
APPROPRIATE.
In addition to the
terms which are defined elsewhere in this Lease, the following
defined terms are used in this Lease:
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(a)
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Date :
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December 26, 2001
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(b)
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Landlord :
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IDS Life
Insurance Company, a Minnesota Corporation
c/o FarrMont Realty Group, Inc., 320 East McDowell Road,
Suite 200
Phoenix, Arizona 85004
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(c)
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Tenant :
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Go Daddy
Software, Inc., a Arizona corporation
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(d)
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Building
Address :
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14455 North
Hayden Road
Scottsdale, Arizona 85260
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(e)
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Premises :
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Suites 219 and
226
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(f)
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Parking
Charge :
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N/A
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(g)
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Parking
Spaces :
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N/A
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(h)
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Term :
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Thirty-nine(39)
months, beginning on the Commencement Date and expiring on the
Expiration Date.
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(i)
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Commencement
Date
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January 1,
2002, or as extended pursuant to Section 3.3,
below.
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(j)
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Expiration
Date :
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March 30,
2005, or as extended pursuant to Section 3.3,
below.
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(k)
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Monthly Base
Rent :
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January 1,
2002 — March 30, 2002
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$7,401.88 plus
all applicable taxes
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April 1,
2002 — March 30, 2003
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$19,818.50 plus
all applicable taxes
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April 1,
2003 — March 30, 2004
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$20,326.67 plus
all applicable taxes
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April 1,
2004 — March 30, 2005
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$20,834.83 plus
all applicable taxes
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Note: Tenant
will begin paying rent for Suite 226 three (3) months after
completion of construction pursuant to Article 3.2, below.
Landlord and Tenant will execute a Declaration of Commencement
setting forth the commencement date and expiration date of the
Lease pursuant to Article 3.3, below.
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(i)
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The
Monthly Rent is subject to adjustment pursuant to Article 4.2 and
4.3 below.
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(ii)
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The
Monthly Rent is subject to adjustment pursuant to Article 5
below.
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(iii)
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Rent: The monthly rent and
additional rent.
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Additional
Rent :
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Increased
expenses over Base Year: Base Year of 2001
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Additional
Rent — Taxes :
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Any amounts
which this Lease requires Tenant to pay in addition to Monthly Base
Rent, including without limitation all state and local transaction
privilege taxes imposed on Landlord or Tenant as a result of
amounts payable hereunder.
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Rentable
Area of the Premises:
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Approximately
twelve thousand one hundred ninety-six square feet
(12,196)
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Rentable
Area of the Office Building :
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151,490 square
feet.
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Security
Deposit :
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Twenty Thousand
Eight Hundred Thirty-four and 83/100($20,834.83) and a Letter of
Credit equal to Twenty-nine Thousand One Hundred
Sixty-two
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Landlord’s Initials
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Tenant’s Initials
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/s/ [ILLEGIBLE]
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3
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and 52/100
Dollars ($29,162.52) which shall be held by Landlord and may be
applied by Landlord to any Tenant default under the terms of this
Lease until February 29, 2004.
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Broker :
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Lee B. Farris,
FarrMont Realty Group, Inc.
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Prepaid
Rent :
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$0.00
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Office
Building :
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Scottsdale
Technology Center consisting of three (3) office
buildings.
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Land :
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The land on
which the Office Building is located and which is more particularly
described on Exhibit “B” to this Lease.
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Project :
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The development
consisting of the Land and all improvements built on the Land
including without limitation the Building, parking lot, parking
structure, if any, walkways, driveways, fences, and
landscaping.
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Landlord’s Address :
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IDS Life
Insurance Company,
a Minnesota Corporation
c/o FarrMont Realty Group, Inc.
320 East McDowell Road, Suite 200
Phoenix, Arizona 85004
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Tenant’s Address :
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Scottsdale
Technology Center
14455 North Hayden Road, Suite 219
Scottsdale, Arizona 85260
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Prime
Rate :
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The rate of
interest from time to time announced by Bank One, or any successor
to it, as its prime rate. If Bank One or any successor to it ceases
to announce its prime rate, the Prime Rate will be a comparable
interest rate designated by Landlord which replaces the Prime
Rate.
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If any other
provision of this Lease contradicts any definition of this Article,
the other provision will prevail.
The following
exhibits are attached to this Lease and are made parts of this
Lease:
EXHIBIT
“A” — The Premises
EXHIBIT “B” — Legal Description of the Land
EXHIBIT “C” — Work Letter
EXHIBIT “D” — Rules and Regulations
Landlord leases
the Premises to Tenant, and Tenant leases the Premises from
Landlord, according to this Lease.
ARTICLE 3.
TERM, DELIVERY AND ACCEPTANCE OF PREMISES
3.1
General . The duration of this Lease will be the Term. The
Term will commence on the Commencement Date and will expire on the
Expiration Date.
3.2 Delivery
of Possession . Landlord will construct or install in the
Premises the improvements to be constructed or installed by
Landlord according to the Work Letter attached to this Lease as
Exhibit “C” (the “Work Letter”). Landlord
will be deemed to have delivered possession of the Premises to
Tenant when Landlord has given Tenant notice that the improvements
will be substantially completed within ten (10) days of the
date of such notice, subject to only the completion of
Landlord’s “punch list” items which do not
materially interfere with Tenant’s use and enjoyment of the
Premises.
3.3 Failure
to Deliver Possession . If, for any reason, Landlord cannot
deliver possession of the Premises to Tenant on the Commencement
Date:
(a) This
Lease will not be void or voidable; and
(b) Landlord
will not be liable to Tenant for any resultant loss or damage;
and
(c) If
delivery of possession of the Premises to Tenant on the
Commencement Date is delayed by Landlord, (i) Rent will be
waived for the period between the original Commencement Date and
the date on which Landlord delivers possession of the Premises to
Tenant, (ii) the original Commencement Date and Expiration
Date will be extended automatically one day for each day of delay
after the original Commencement Date and before delivery of
possession, and (iii) Landlord and Tenant will execute a
certificate of the new Commencement Date and Expiration Date
promptly after delivery of possession.
3.4 Early
Entry . If Tenant is permitted entry to the Premises prior to
the Commencement Date for the purpose of installing fixtures or any
other purpose permitted by Landlord, such early entry will be at
Tenant’s sole risk and subject to all the terms and
provisions of this Lease as though the Commencement Date had
occurred, except for the payment of Monthly Rent which will
commence on the Commencement Date. Tenant, its agents or employees,
will not interfere with or delay Landlord completion
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Landlord’s Initials
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Tenant’s Initials
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/s/ [ILLEGIBLE]
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4
of construction
of the improvements. All rights of Tenant under this
Section 3.4 will be subject to the requirements of all
applicable building codes and zoning requirements so as not to
interfere with Landlord’s obtaining a certificate of
occupancy for the Premises. Landlord has the right to impose such
additional conditions on Tenant’s early entry as Landlord, in
its sole discretion, deems appropriate, and will further have the
right to require that Tenant execute an early entry agreement
containing such conditions prior to Tenant’s early
entry.
3.5
Condition of the Premises . Prior to the Commencement Date,
Tenant will conduct a walk-through inspection of the Premises with
Landlord and prepare a punch-list of items needing additional work
by Landlord. Other than the items specified in the punch-list, by
taking possession of the Premises, Tenant will be deemed to have
accepted the Premises in their condition on the date of delivery of
possession. The punch-list will not include any damage to the
Premises caused by Tenant’s move-in or early access, if
permitted. Damage caused by Tenant will be repaired or corrected by
Landlord, at Tenant’s expense. Tenant acknowledges that
neither Landlord nor its agents or employees have made any
representations or warranties as to the suitability or fitness of
the Premises for the conduct of Tenant’s business or for any
other purpose, nor has Landlord or its agents or employees agreed
to undertake any alterations or construct any Tenant improvements
to the Premises except as expressly provided in this Lease and the
Work Letter. If Tenant fails to submit a punch-list to Landlord
prior to the Commencement Date, it will be deemed that there are no
items needing additional work or repair. Landlord’s
contractor will complete all reasonable punch-list items within
thirty (30) days after the walk-through.
3.6
Adjustments Upon Completion . As soon as practicable, upon
completion of the improvements in accordance with the Work Letter,
Landlord will notify Tenant of the Rentable Area of the Premises,
the Rentable Area of the Building, Monthly Rent, and Tenant’s
Share, if such information was not previously determinable by
Landlord. At Landlord’s request, Tenant will promptly execute
a certificate confirming such information.
ARTICLE
4. MONTHLY RENT,
RENTAL ADJUSTMENT AND CONVERSION
4.1 Monthly
Rent . Throughout the Term of this Lease, Tenant will pay
Monthly Rent to Landlord as rent for the Premises. Monthly Rent
will be paid in advance, on or before the first day of each
calendar month of the Term. If the Term commences on a day other
than the first day of a calendar month, the Monthly Rent will be
appropriately prorated by Landlord for such month. If the Term
commences on a day other than the first day of a calendar month,
then prorated Monthly Rent for such month will be paid on or before
the first day of the Term. Monthly Rent will be paid to Landlord,
without notice or demand, and without deduction or offset, in
lawful money of the United States of America at Landlord’s
Address, or to such other person or at any other place as Landlord
may from time to time designate in writing.
4.2
Rental Adjustment : Commencing with the second lease year
and each lease year thereafter, and continuing throughout the term
or any extension thereof, the monthly guaranteed rental shall be
adjusted upward in accordance with the formula set forth below in
applying the formula, the following definitions shall
prevail.
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(a)
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“Bureau” means the
Federal Bureau of Labor Statistics or any successor agency that
shall issue the- indices or any data referred to in subparagraph
“e”.
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(b)
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“Price Index” means the
Consumers’ Price Index, “All Items, An Urban Consumers,
U.S. City Average (1967—100)” issued from time to time
by the Bureau.
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(c)
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“Adjustment Index” is
the Indices issued for the third month prior to the adjustment
date.
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(d)
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“Base Index” is the
Indices issued by the Bureau for the third month prior to the first
day of the- calender month in which the term of this Lease
commences.
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(e)
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The “issue” of Price
Index means the release to the public of the Price Index, and the
date of issue shall be the date it is so released whether or not
the issued Index is for the current month or period in which the
release occurs or for a prior month or period.
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If the
Average Price Index for any such lease year is greater than the
Base index, then the monthly rental, beginning with the first day
of such lease year, shall be increased in the same proportion that
the increase in the Average Price Index bears to the Base Index. If
an increase shall become effective by application of the rule
stated in the preceding sentence and the Average Price Index for
any subsequent lease year decreases, then the monthly rental
beginning with such subsequent lease year shall not be decreased
but shall remain equal to the highest increased monthly rental
applicable to any such prior lease year.
4.3 CPI
Conversion . If the base period presently employed in
calculating and determining the CPI should hereafter be changed and
a new base period adopted by the Bureau of Labor Statistics of the
United States Department of Labor, the base index figure as set
forth herein shall be converted so as to conform with the new index
figure and the new index figure as converted shall be used. In the
event that the Bureau of Labor Statistics discontinues the issuance
of the CPI, then, in that event, Tenant and Landlord agree to use
any other nationally recognised cost of living index issued by the
United States Department of Labor or any other branch or department
of the United States Department of Labor or any other branch of
department of the Federal government and the index so used shall be
converted in accordance with good accounting practices as a
substitute basis for determining such adjustments to the minimum
annual rent.
ARTICLE 5.
OPERATING EXPENSES
5.1
General : This Lease shall be deemed a modified full service
lease and Tenant shall do all acts and make all payments pro-rata,
connected with or arising out of any increase of operating expenses
for Scottsdale Technology Center over Tenant’s expense base,
in addition to Tenant’s base rent. This includes, without
limitation, all taxes and assessments, and any increases
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Landlord’s Initials
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Tenant’s Initials
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5
in all taxes
and assessments, whether now or hereafter existing, levied or
imposed on Landlord or Tenant, and whether foreseen or unforeseen.
In addition to Monthly Rent, Tenant will pay Tenant’s Monthly
Share of the Increased Current Operating Expenses of Scottsdale
Technology Center. Landlord agrees to cap the annual increases
of the “Controllable Expenses (“Controllable
Expenses” shall be defined as every expense set forth below
except for all utilities, all insurance and all taxes which shall
be excluded) at five percent (5.0%) per year on a cumulative
basis.
As used in this
Lease, the term “Operating Expenses”
includes:
(a) all
reasonable costs of management, operation and maintenance of the
Project, including without limitation, real and personal property
taxes and assessments (and any tax levied in whole or in part in
lieu of or in addition to real property taxes), wages, salaries and
compensation of employees, consulting, accounting, legal and
janitorial, maintenance, guard and other services, management fees
(charged by Landlord, any affiliate of Landlord, or any other
entity managing the Project), reasonable reserves for Operating
Expenses, that part of office rent or rental value of space in the
Project used by Landlord to manage, operate and maintain the
Project or furnished by Landlord to enhance the management,
operation or maintenance of the Project, power, water, waste
disposal and other utilities, materials and supplies, maintenance
and repairs, insurance obtained with respect to the Project,
depreciation on personal property and equipment (which is or should
be capitalized on the books of Landlord), and any other costs,
charges, and expenses which under generally accepted accounting
principles, would be regarded as management, maintenance and
operating expenses; and
(b) the
cost (amortized over such period as Landlord will reasonably
determine) together with interest at the greater of (i) the
Prime Rate prevailing plus two percent (2%) or
(ii) Landlord’s borrowing rate for such capital
improvements plus two percent (2%), on the unamortized balance of
any capital improvements which are made to the Project by Landlord
(A) for the purposes of reducing Operating Expenses, or
(B) after the Date and which were required under any
governmental law or regulation that was not applicable to the
Project at the time it was constructed and which are not a result
of the nature of Tenant’s use of the Premises.
The Operating
Expenses will not include: (1) depreciation on the Project
(other than depreciation on personal property, equipment, window
coverings on exterior windows provided by Landlord and carpeting in
public corridors and common areas); (2) costs of improvements
made for tenants of the Project; (3) finders fees and real
estate brokers’ commission; (4) mortgage principal or
interest; and (5) capital items other than those referred to
in clause (b), above.
Tenant
acknowledges that Landlord has not made any representation or given
Tenant any assurances that the Operating Expenses will equal or
approximate any actual amount per square foot of Rentable Area of
the Premises, for any calendar year during the Term.
5.2
Estimated Payments : In addition to Monthly Rent, Tenant
will pay to Landlord on the first day of each month during the Term
one-twelfth (1/12) of Landlord’s estimate of the Additional
Rent payable by Tenant pursuant to Section 5.1, above, during
the subject calendar year or partial calendar year (the
“Additional Rent”). The Additional Rent is subject to
revision according to the further provisions of this
Section 5.2 and Section 5.3, below. During December of
each calendar year, or as soon after December as practicable,
Landlord will give Tenant written notice of Additional Rent for the
ensuing calendar year. On or before the first day of each month
during the ensuing calendar year, Tenant will pay to Landlord
one-twelfth (1/12) of the Additional Rent; however, if such notice
is not given in December, Tenant will continue to pay on the basis
of the prior year’s Additional Rent until the month after
such notice is given. In the month Tenant first pays
Landlord’s new Additional Rent, Tenant will pay to Landlord
the difference between the new Additional Rent estimate and the
amount payable to Landlord for the prior year’s Additional
Rent, for each month which has elapsed since December. If, at any
time or times it reasonably appears to Landlord that the amount
payable under Section 5.1 above, for the current calendar year
will vary from the Additional Rent, Landlord may, by written notice
to Tenant, revise the Estimate Operating Expenses for such year,
and subsequent payments by Tenant for such year will be based upon
Landlord’s reasonably revised estimate.
5.3 Annual
Settlement . Within one hundred twenty (120) days after
the end of each calendar year or as soon after such one hundred
twenty (120) day period as practicable, Landlord will deliver
to Tenanta statement of amounts payable under Section 5.1,
above, for such calendar year prepared and certified by Landlord.
Such certified statement will be final and binding upon Landlord
within thirty (30) days after it is given to Tenant. If such
statement shows an amount owing by Tenant that is less than the
estimated payments previously made by Tenant for such calendar
year, the excess will be held by Landlord and credited against the
next payment of Rent; however, if the Term has ended and Tenant was
not in default at its end, Landlord will refund the excess payment
previously made by Tenant for such calendar year, if such statement
shows a balance due from Tenant, Tenant will pay the deficiency to
Landlord within thirty (30) days after the delivery of such
statement. Tenant may review Landlord’s records of the
Operating Expenses, at Tenant’s sole cost and expense, at the
place Landlord normally maintains such records during
Landlord’s normal business hours.
5.4 Final
Proration . If this Lease ends on a day other than the last day
of a calendar year, the amount of increase (if any) in the
Operating Expenses payable by Tenant applicable to the calendar
year in which this Lease ends will be calculated on the basis of
the number of days of the Term falling within such calendar year
and Tenant’s obligation to pay the amount so determined will
survive the end of this Lease.
5.5 Other
Taxes . Tenant will reimburse Landlord upon demand for any and
all taxes payable by Landlord (other than net income taxes) whether
or not now customary or within the contemplation of Landlord and
Tenant:
(a) upon,
measured by or reasonably attributable to the cost or value of
Tenant’s equipment, furniture, fixtures and other personal
property located in the Premises or by the cost or value of any
leasehold improvements made in or to the Premises by or for Tenant,
regardless of whether title to such improvements
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is in Tenant or
Landlord;
(b) upon
or measured by Rent, including without limitation, any gross income
tax or excise tax levied by the Federal government or any other
governmental body with respect to the receipt of Rent;
(c) upon
or with respect to the possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy by Tenant of the
Premises or any portion of the Premises; and
(d) upon
this transaction or any document to which Tenant is a party
creating or transferring an interest or an estate in the
Premises.
If it is not
lawful for Tenant to reimburse Landlord, the Rent payable to
Landlord under this Lease will be revised to yield to Landlord the
same net rental after the imposition of any such tax upon Landlord
as would have been payable to Landlord prior to the imposition of
any such tax.
Tenant will pay
promptly when due all personal property taxes on Tenant’s
personal property in the Premises and any other taxes payable by
Tenant, the non-payment of which might give rise to a lien on the
Premises or Tenant’s interest in the Premises.
5.6 Rent
Payable . Amounts payable by Tenant as provided herein, will be
payable as Rent without deduction or offset. If Tenant fails to pay
any amounts due, Landlord will have all the rights and remedies
available to it on account of Tenant’s failure to pay
Rent.
6.1
Landlord’s Insurance . At all times during the Term,
Landlord will carry and maintain:
(a) fire
and extended coverage insurance covering the Project, parking
structure(if any), the Building’s equipment and common area
furnishings, and leasehold improvements in the Premises to the
extent of the Tenant Finish Allowance (as that term is defined in
the Work Letter); and
(b) public
liability and property damage insurance; and
(c) such
other insurance as Landlord determines from time to
time.
The insurance
coverages and amounts in this Section 6.1 will be determined
by Landlord.
6.2
Tenant’s Insurance . At all times during the Term,
Tenant will carry and maintain, at Tenant’s expense, the
following insurance, in the amounts specified below or such other
amounts as Landlord may from time to time reasonably request, with
insurance companies and on forms satisfactory to
Landlord:
(a) public
liability and property damage liability insurance, with a combined
single occurrence limit of not less than $3,000,000.00. All such
insurance will specifically include without limitation, contractual
liability coverage for the performance by Tenant of the indemnity
agreements set forth in Article 21 of this Lease, below;
and
(b) insurance covering all of
Tenant’s equipment, trade fixtures, appliances, furniture,
furnishings and personal property from time to time in, on or upon
the Premises, and any leasehold improvements to the Premises in
excess of the Tenant Finish Allowance, in an amount not less than
the full replacement cost without deduction for depreciation from
time to time during the term of this Lease, providing protection
against all perils included within the classification of fire,
extended coverage, vandalism, malicious mischief, special extended
peril (all risk), boiler, flood, glass breakage and sprinkler
leakage. All policy proceeds will be used for the repair or
replacement of the property damaged or destroyed, however, if this
Lease ceased under the provisions of Article 18 below, Tenant
will be entitled to any proceeds resulting from damage to
Tenant’s equipment, trade fixtures, appliances, furniture,
furnishings, and personal property, and Landlord will be entitled
to all other proceeds; and
(c) workmen’s compensation insurance
insuring against and satisfying Tenant’s obligations and
liabilities under the workmen’s compensation law of the state
in which the Premises are located.
6.3 Forms of
the Policies . All policies of insurance which Tenant is
obligated to maintain according to this Lease (other than any
policy of workmen’s compensation insurance) will name
Landlord and such other persons or firms as Landlord specifies from
time to time as additional insured. Original or copies of original
policies (together with copies of the endorsements naming Landlord,
and any others specified by Landlord as additional insured) and
evidence of the payment of all premiums of such policies will be
delivered to Landlord prior to Tenant’s occupancy of the
Premises and from time to time at least thirty (30) days prior
to the expiration of the term of each such policy. All public
liability and property damage liability insurance policies
maintained by Tenant will contain a provision that Landlord and any
other additional insured will be entitled to recover under such
policies for any loss sustained by them, their agents and employees
as a result of the acts or omissions of Tenant. All such policies
maintained by Tenant will provide that they may not be terminated
or amended except after thirty (30) days’ prior written
notice to Landlord. All public liability, property damage,
liability and casualty policies maintained by Tenant will be
written as primary policies, not contributing with and not
supplemental to the coverage that Landlord may carry. Insurance
required to be maintained by Tenant by this Article 6 may be
subject to a deductible of up to $1,000.00.
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6.4 Waiver
of Subrogation . Except as otherwise provided herein, Landlord
and Tenant each waive any and all rights to recover against the
other or against any other Tenant or occupant of the Project, or
against the officers, directors, shareholders, partners, joint
venturers, employees, agents, customers, invitees or business
visitors of such other party or of such other Tenant or occupancy
of the Project, for any loss or damage to such waiving party
arising from any cause covered by any insurance required by such
party pursuant to this Article 6 or any other insurance actually
carried by such party to the extent of the limits of such policy.
Landlord and Tenant, from time to time, will cause their respective
insurers to issue appropriate waiver of subrogation rights
endorsements to all policies of insurance carried in connection
with the Projector the Premises claiming by, under or through
Tenant to execute and deliver to Landlord such a waiver of claims
and to obtain such waiver of subrogation rights
endorsements.
6.5 Adequacy
of Coverage . Landlord, its agents and employees, make no
representation that the limits of liability specified to be carried
by Tenant pursuant to this Article 6 are adequate to protect
Tenant. If Tenant believes that any of such insurance coverage is
inadequate, Tenant will obtain such additional insurance coverage
as Tenant deems adequate, at Tenant’s sole
expense.
The premises
will be used only for general office purposes. Tenant will not: do
or permit to be done in or about the premises, or bring to, keep or
permit to be brought or kept in the Premises, anything which is
prohibited by or will in any way conflict with any law, statute,
ordinance or governmental rule or regulation which is now in force
or which may be enacted or promulgated after the Date, do or permit
anything to be done in or about the Premises which will in any way
obstruct or interfere with the rights of other tenants of the
Building or Project, or injure or annoy them; use or allow the
Premises to be used for any improper, immoral, unlawful or
objectionable purpose; cause, maintain or permit any nuisance in,
on or about the Premises or commit or allow to be committed any
waste in, on or about the Premises; construct, excavate, trench,
dig, or improve any portion of the common areas of the
Project.
ARTICLE
8. REQUIREMENTS OF
LAW: FIRE INSURANCE AND HAZARDOUS MATERIALS
8.1
General . At its sole cost and expense Tenant will promptly
comply with all laws, statutes, ordinances and governmental rules,
regulations or requirements now in force or in force after the
Date, with the requirements of any board of free underwriters or
other similar body constituted now or after the Date, with any
direction or occupancy certificate issued pursuant to any law by
any public officer or officers, as well as the provisions of all
recorded documents affecting the Premises, insofar as they relate
to the condition, use or occupancy of the Premises, excluding
requirements of structuralchanges or changes outside the Premises
unless related to (a) Tenant’s acts, (b) Tenant’s
business, (c) Tenant’s use of the Premises, or
(d) improvements made by or for Tenant.
8.2
Hazardous Materials . Tenant will not generate, manufacture,
receive, transport from, store, use or dispose of any Hazardous
Material in, on or about the Premises or the Project. For the
purpose of this Section 8.2, Hazardous Materials shall include
but not be limited to substances defined as “hazardous
substances,” “hazardous materials,” or
“toxic substances,” in the Comprehensive Environmental
Response, Compensation and Liability Act of Materials
Transportation Act, 49 U.S.C. Section 1901, et seq.; the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et
seq.; and those substances defined as “hazardous
wastes” in the Arizona Revised Statues
Section 36-3501(16). Tenant will be solely responsible for and
will defend, indemnify and hold Landlord, its agents and employees
harmless from and against all claims, costs and liabilities,
including attorneys’ fees and costs, arising out of or in
connection with Tenant’s breach of its obligations under this
Section 8.2. Tenant will be solely responsible for and will
defend, indemnify and hold Landlord, its agents and employees
harmless from and against any and all claims, costs, liabilities
and damage, including attorneys’ fees and costs, arising out
of or in connection with the removal, cleanup, remediation and
restoration work and materials necessary to return the Premises and
any other property of whatever nature located on the Project to
their condition existing prior to the appearance of Tenant’s
Hazardous Materials on the premises. Tenant will pay to Landlord
upon demand an amount equal to any permanent damage to the real
property or buildings. Tenant is liable for all damages under the
Law.
(a) If Tenant
shall become aware of or receive notice or other communication
concerning any actual, alleged, suspected or threatened violation
of any applicable present and future statutes, regulations, rules,
ordinances, codes, licenses, permits, orders, approvals, plans,
authorizations, concessions, and similar items, of all governmental
agencies, departments, commissions, boards, bureaus or
instrumentalities of the United States, states and political
subdivisions thereof relating to the protection of human health or
the environment (collectively, “Environmental Laws”);
or if Tenant should become aware of or receive notice or other
communication concerning any factual, alleged, suspected
communication concerning any factual, alleged, suspected or
threatened liability for a violation of the Environmental Laws in
connection with the Property or the past or present activities of
any person thereon, including but not limited to notice or other
communication concerning any actual or threatened investigation,
inquiry, lawsuit, claim, citation, directive, summons, proceedings,
complaint, notice, order, writ or injunction, then Tenant shall
deliver to Landlord, within ten (10) days of the receipt of
such notice or communication by Tenant, a written description of
said violation, liability, or actual or threatened event or
condition, together with copies of any documents evidencing same.
Receipt of such notice shall not be deemed to create any obligation
on the part of Landlord to defend or otherwise respond to any such
notification.
(b) Tenant
shall not initiate communications with or provide information to
any party other than Landlord regarding any hazardous materials
without Landlord’s prior written approval, unless required by
law or imminent emergency posing a substantial endangerment to
human health, in which event Tenant shall provide notice of such
communication or disclosure to Landlord as soon as reasonably
possible.
8.3 Certain
Insurance Risks . Tenant will not do or permit to be done any
act or things upon the Premises or the Project which would
(a) jeopardize or be in conflict with fire insurance policies
covering the Project and fixtures and property in the Project, or
(b) increase the rate of fire insurance applicable to the
Project to an amount higher than it otherwise would be for general
office
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8
use of the
Project, or (c) subject Landlord to any liability or
responsibility for injury to any person or persons or to property
by reason of any business or operation being carried on upon the
Premises.
ARTICLE 9.
ASSIGNMENTS AND SUBLETTING
9.1
General . Tenant, for itself, its heirs, distributees,
executors, administrators, legal representatives, successors and
assigns, covenants that it will not assign, mortgage or encumber
this Lease, nor sublease, nor permit the Premises or any part of
the Premises to be used or occupied by others, without the prior
written consent of Landlord in each instance. Any assignment or
sublease in violation of this Article 9 will be void. If this
Lease is assigned, or if the Premises or any part of the Premises
are subleased or occupied by anyone other than Tenant, Landlord
may, after default by Tenant, collect rent from the assignee,
subtenant or occupant, and apply the new amount collected to Rent.
No assignment, sublease, occupancy or collection will be deemed a
waiver of the provisions of this Section 9.1, and acceptance
by Landlord of the assignee, subtenant or occupant as Tenant, shall
not release Tenant from the further performance by Tenant of
covenants on the part of Tenant contained in this Lease. The
consent by Landlord to an assignment or sublease will not be
construed to relieve Tenant from obtaining Landlord’s prior
written consent in each instance.
9.2
Landlord’s Right to Recapture . If Tenant desires to
assign all or part of this Lease or to sublease all or any portion
of the Premises, Tenant will first submit to Landlord the documents
described in Section 9.3, below, and will offer in writing,
(a) with respect to a prospective assignment, to assign this
Lease to Landlord without any payment of money or other
consideration for such assignment, or (b) with respect to a
prospective sublease, to sublease to Landlord the portion of the
Premises involved (“Leaseback Area”) for the term
specified by Tenant in its offer and at the lower of
(i) Tenant’s proposed sub-rental or (i) the rate of
Monthly Rent and Additional Rent then in effect according to this
Lease, and on the same terms, covenants and conditions contained
under Lease and applicable to the Leaseback Area. The offer will
specify the date when the Leaseback Area will be made available to
Landlord. That date will not be earlier than thirty (30) days
nor later than one hundred eighty (180) days after the date of
Landlord’s acceptance of the offer. If an offer of sublease
is made, it will also specify the term of the proposed sublease
except that if the proposed sublease will result in all or
substantially all of the Premises being subleased, then Landlord
will have the option to extend the term of the proposed sublease
for the balance of the Term of this Lease less one
(1) day.
Landlord will have
thirty (30) days from the receipt of the offer either to
accept or reject it. If Landlord accepts the offer, Tenant will
then execute and deliver to Landlord, or to anyone designated or
named by Landlord, an assignment or sublease, as the case may be,
in either case in a form reasonably satisfactory to
Landlord’s counsel.
If such a sublease
is made to Landlord or its designee, such sublease will
expressly:
(a) permit
Landlord to make further subleases of all or any part of the
Leaseback Area and to make and authorize any and all changes,
alterations, installations and improvements in such space as
Landlord deems necessary for such subletting, at Landlord’s
expense;
(b) provide
that Tenant will permit reasonably appropriate means of ingress to
and egress from the Leaseback Area at all times;
(c) negate any
intention that the estate created under such sublease be merged
with any other estate held by Landlord or Tenant;
(d) provide
that Landlord will accept the Leaseback Area “as is”
except that Landlord, at Tenant’s expense, will perform all
such work and make all such alterations as may be required
physically to separate the Leaseback Area from the remainder of the
Premises and to permit lawful occupancy; and
(e) provide
that at the expiration of the term of such sublease, Tenant will
accept the Leaseback Area as may be reasonably necessary to
preserve the Leaseback Area in good order and condition, ordinary
wear and tear excepted.
Performance by
Landlord, or its designee, under a sublease of the Leaseback Area
will be deemed performance by Tenant of any similar obligation
under this Lease. Tenant will not be liable for any default under
this Lease or deemed to be in default under this Lease if such
default is occasioned by or arises from any act or omission of any
occupant holding under or pursuant to any such sublease.
9.3
Submission of Information . If Tenant requests
Landlord’s consent to a specific assignment or subletting,
Tenant will submit in writing to Landlord (a) the name and
address of the proposed assignee or subtenant, (b) a
counterpart of the proposed agreement of assignment or sublease,
(c) reasonably satisfactory information as to the nature and
character of the business of the proposed assignee or subtenant,
and as to the nature of its proposed use of the space, and (d)
banking, financial or other credit information reasonably
sufficient to enable Landlord to determine the financial
responsibility and character of the proposed assignee or
subtenant.
9.4 Consent
Not to be Unreasonably Withheld . If Landlord does not accept
Tenant’s offer within thirty (30) days after receipt of
it, as provided in Section 9.2, above, then Landlord will not
unreasonably withhold or delay its consent to Tenant’s
request for consent to such specific assignment or sublease if the
conditions in Section 9.3, above, and all of the following
conditions are satisfied:
(a) The proposed
transferee is at least as credit worthy as Tenant when Tenant
entered into this Lease, and satisfied Landlord’s
then-current credit standards for tenants of the Building, and in
Landlord’s opinion has the financial strength and stability
to perform all obligations under this Lease to be performed by
Tenant as and when they fall due.
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9
(b) The
proposed transferee will make use of the Premises which in
Landlord’s opinion (i) is lawful, (ii) is
consistent with the permitted use of the Premises under this Lease,
(iii) is consistent with the general character of business
carried on by tenants of a first class office building,
(iv) does not conflict with any exclusive rights or covenants
not to compete in favor of any other Tenant or proposed Tenant in
the Project, (v) will not increase the likelihood of damage or
destruction, (vi) will not increase the rate of wear and tear
to the Premises, Building common facilities, or Project,
(vii) will not likely cause an increase in insurance premiums
for insurance policies applicable to the Project, and (viii) will
not require Tenant improvements incompatible with then existing
Building or Project systems and components.
(c) Tenant pays
Landlord’s reasonable attorneys’ fees and costs
incurred in connection with negotiation, review and processing of
the transfer, plus a processing fee not to exceed $500,00 for each
such request.
(d) Landlord is
paid any increase in the Security Deposit required by Landlord and
permitted by law.
(e) The
proposed transferee has demonstrated to the reasonable satisfaction
of Landlord that it has good character, moral stability and good
reputation in the general business community.
(f) At the time
of the proposed transfer, there is no Event of Default under this
Lease.
(g) The
proposed transferee is not a tax-exempt entity as defined in the
Internal Revenue Code of 1986, as amended.
(h) At least
75% of the Rentable Area of the Building is leased to paying
tenants.
(i) The
transfer will not otherwise have or cause a material adverse impact
on Landlord’s interests, the Building, the Premises or the
Project.
(j) If Landlord
consents to the proposed assignment or sublease, Tenant complies
with the further provisions of Sections 9.5 and 9.6,
below.
Tenant shall
have the burden of demonstrating that each of the foregoing
conditions is satisfied.
9.5 Form of
Assignment or Sublease . If Landlord consents to a proposed
assignment or sublease, Landlord will give Tenant’s form of
assignment or sublease, as the case may be, which is acceptable to
Landlord and will provide, among other things, that Tenant will
remain liable under this Lease. Any sublease will provide, among
other things, that the subtenant will comply with all applicable
terms and conditions of this Lease. Any assignment will contain,
among other things, an assumption by the assignee of all of the
terms, covenants and conditions which this Lease requires Tenant to
perform. Landlord’s consent will not be effective unless and
until Tenant (a) delivers to Landlord an original duly
executed assignment or sublease, as the case may be, in the form
provided by Landlord, and (b) pays Landlord the amounts
required under Section 9.4(c), above.
9.6 Payments
to Landlord . If Landlord consents to a proposed assignment or
sublease, then Landlord will have the right to require Tenant to
pay to Landlord a sum equal to: (a) any rent or other
consideration paid to Tenant by any proposed transferee which
(after deducting the costs of Tenant, if any, in effecting the
assignment or sublease, including reasonable alteration costs,
commissions and legal fees) is in excess of the Rent allocable to
the transferred space which is then being paid by Tenant to
Landlord pursuant to this Lease; and (b) any other profit or
gain (after deducting any necessary expenses incurred) realized by
Tenant from any such sublease or assignment. All such sums payable
will be payable to Landlord at the time the next payment of Monthly
Rent is due.
9.7
Prohibited Transfers.
(a) Tenant
will not offer to assign the Lease or sublet the Premises at a rate
of Rent lower than that which is then being paid by Tenant to
Landlord.
(b) The
transfer of a majority of the issued and outstanding capital stock
of any corporate Tenant or subtenant of this Lease or a majority of
the total interest in any partnership Tenant or subtenant, however
accomplished, and whether in a single transaction or in a series of
related or unrelated transactions, will be deemed an assignment of
this Lease or of such sublease requiring Landlord’s consent
in each instance. For purposes of this Article 9, the transfer
of outstanding capital stock of any corporate Tenant will not
include any sale of such stock by persons (other than those deemed
“insiders” within the meaning of the Securities
Exchange Act of 1934, as amended) effected through
“over-the-counter-market” or through any recognized
stock exchange.
9.8
Permitted Transfer. Subject to Sections 9.5, 9.6 and
9.10, Landlord consents to an assignment of this Lease, or sublease
of all or part of the Premises, to a wholly-owned subsidiary of
Tenant or the parent of Tenant or to any corporation into or with
which Tenant may be merged or consolidated.
9.9
Limitation on Remedies. Tenant will not be entitled to make,
nor will Tenant make, any claim, and Tenant by this
Section 9.9 waives any claim, for money damages (nor will
Tenant claim any money damages by way of set-off, counterclaim or
defense) based upon any claim or assertion by Tenant that Landlord
has unreasonably withheld or unreasonably delayed its consent or
approval to a proposed assignment or subletting as provided for in
this Section. Tenant’s sole remedy will be an action or
proceeding to enforce any such provision, or for specific
performance, injunction, or declaratory judgment.
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9.10 Consent
of Mortgage. Any transfer for which consent is required of any
party having a mortgage, deed of trust or other encumbrance on, or
of any lessor under any ground or underlying lease of, all or any
part of the Project shall not be effective unless and until such
consent is given.
ARTICLE 10.
RULES AND REGULATIONS .
Tenant and its
employees, agents, licensees and visitors will at all times observe
faithfully, and comply strictly with, the rules and regulations set
forth on Exhibit “D”. Landlord may from time to time
reasonably amend, delete or modify existing rules and regulations,
or adopt reasonable new rules and regulations for the use, safety,
cleanliness and care of the Premises, the Building, and the
Project, and the comfort, quiet enjoyment and convenience of
occupants of the Project. Modifications or additions to the rules
and regulations will be effective upon notice to Tenant from
Landlord. In the event of any breach of any rules or regulations or
any amendments or additions to such rules and regulations, Landlord
will have all remedies which this Lease provides for default by
Tenant, and will, is addition, have any remedies available at law
or in equity, including the right to enjoin any breach of such
rules and regulations. Landlord will not be liable to Tenant for
violations such rules and regulations by any other Tenant, its
employees, agents, visitors or licensees or any other person. In
the event of any conflict between the provisions of this Lease and
the rules and regulations, the provisions of this Lease will
govern.
As used in this
Lease, the term “common areas” means, without
limitation, the hallways, entryways, parking areas, driveways,
walkways, terraces, loading areas, trash facilities and all other
areas and facilities in the Project which are provided and
designated from time to time by Landlord for the general
nonexclusive use and convenience of Tenant with Landlord and other
tenants of the Project and their respective employees, invitees,
licensees or other visitors. Landlord grants Tenant, its employees,
invitees, licensees and other visitors a nonexclusive license for
the Term to use the common areas in common with others entitled to
use the common areas, subject to the terms and conditions of this
Lease. Without advance notice to Tenant (except with respect to
matters covered by Subsection (a) below) and without any
liability to Tenant in any respect, Landlord will have the right
to:
(a) establish
and enforce reasonable rules and regulations concerning the
maintenance, management, use and operation of the common
areas;
(b) close off
any of the common areas to whatever extent required in the opinion
of Landlord and its counsel to prevent a dedication of any of the
common areas or the accrual of any rights by any person or the
public to the common areas, provided such closure does not deprive
Tenant of the substantial benefit and enjoyment of the
Premises;
(c) temporarily
close any of the common areas for maintenance, alteration or
improvement purposes;
(d) select,
appoint or contract with any person for the purpose of operating
and maintaining the common areas, on such terms and conditions as
Landlord deems reasonable;
(e) change
the size, use, shape or nature of any such common areas, provided
such change does not deprive Tenant of the substantial benefit and
enjoyment of the Premises. So long as Tenant is not thus deprived
of the substantial use and benefit of the Premises, Landlord will
also have the right at any time to change the arrangement or
location of, or both, or to regulate or eliminate the use of any
concourse, parking spaces, toilets or other public conveniences in
the Project, without incurring any liability to Tenant or entitling
Tenant to any abatement of rent and such action will not constitute
an actual or constructive eviction of Tenant; and
(f) erect one
or more additional building on the common areas, expand the
existing Building or other buildings to cover a portion of the
common areas, convert common areas to a portion of the Building
(excluding the Premises) or other buildings to common areas. Upon
erection of any additional buildings or change in common areas, the
portion of the Project upon which buildings or structures have been
erected will no longer be deemed to be a part of the common areas.
In the event of any such changes in the size or use of the Building
or common areas of the Building or Project, Landlord may make an
appropriate adjustment in the Rentable Area of the Building or the
Building’s pro rata share of exterior common areas of the
Project, as appropriate, and a corresponding adjustment to
Tenant’s Share of the Operating Expenses payable pursuant to
Article 5 of this Lease, above.
ARTICLE 12.
LANDLORD’S SERVICES
12.1
Landlord’s Repair and Maintenance . Landlord will
maintain, repair and restore the common areas of the Project,
including lobbies, corridors and restrooms, the windows in the
Building, the mechanical, plumbing and electrical equipment serving
the Building, and the structure of the Building in reasonably good
order and condition.
12.2
Landlord’s Services . Landlord will furnish the
Premises with: (i) heat and air conditioning equipment in good
condition with sufficient capacity required for the comfortable
occupation of the Premises; (ii) lighting replacement (for
building standard lights) during Business Hours;
(iii) restroom supplies; (iv) window washing with
reasonable frequency; and (v) daily cleaning service on weekdays,
in the manner that such services are customarily furnished in
comparable office buildings. Landlord may provide, but will not be
obligated to provide, any such services on Holidays and
weekends.
Landlord will not
be in default under this Lease or be liable for any damages
directly or indirectly resulting from, nor will the Rent be abated
by reason of (1) the installation, use or interruption of use
of any equipment in connection with the furnishing of any of such
services, (2) failure to furnish or delay in furnishing any such
services when such failure or delay is caused by accident or any
condition beyond the reasonable control for Landlord or by the
making of necessary repairs or improvements to the Premises, the
Building, or the Project, (3) the limitation, curtailment,
rationing or restrictions or use of water,
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electricity,
gas or other form of energy serving the Premises, the Building, or
the Project. Landlord will use reasonable efforts to remedy
diligently any interruption in the furnishing of such
services.
The term
“Business Hours” means 7:00 a.m. to 6:00 p.m. on Monday
through Friday, except Holidays (as that termis defined below), and
8:00 a.m. to 12:00 noon on Saturdays, except Holidays. The term
“Holidays” means New Year’s Day; Martin Luther
King, Jr. Day; Memorial Day; Independence Day; Labor Day;
Thanksgiving Day; Christmas Day and such other national holidays as
may be established after the Date by the United States
Government.
12.3
Tenant’s Costs. Whenever equipment or lighting (other
than building standard lights) is used in the Premises by Tenant
and such equipment or lighting affects the temperature otherwise
normally maintained by the design of the air conditioning system.
Landlord will have the right, after notice to Tenant, to install
supplementary air conditioning facilities in the Premises or
otherwise modify the ventilating and air conditioning system
serving the Premises, and the cost of such facilities and
modifications will be borne by Tenant. Tenant will also pay as
Additional Rent the cost of providing all cooling energy to the
Premises in excess of that required for normal office use or during
hours requested by Tenant when air conditioning is not otherwise
furnished by Landlord. Tenant will bear the cost of replacement
bulbs or tubes for all non-building standard light
fixtures.
12.4
Limitation on Liability. Landlord will not be liable to
Tenant or any other person, for direct or consequential damage, or
otherwise, for any failure to supply any heat, air conditioning,
cleaning, lighting, security, surges or interruptions of
electricity, or other service Landlord has agreed to supply during
any period when Landlord uses reasonable diligence to supply such
services. Landlord reserves the right temporarily to discontinue
such services, or any of them, at such times as may be necessary by
reason of accident, repairs, alterations or improvements, strikes,
lockouts, riots, acts of God, governmental preemption in connection
with a national or local emergency, any rule, order or regulation
of any governmental agency, conditions of supply and demand which
make any product unavailable. Landlord’s compliance with any
mandatory governmental energy conservation or environmental
protection program, or any voluntary governmental energy
conservation program at the request of or with consent or
acquiescence of Tenant, or any other happening beyond the control
of Landlord. Landlord will not be liable to Tenant or any other
person or entity for direct or consequential damages resulting from
the admission to or exclusion from the Building or Project of any
person. In the event of invasion, mob, riot, public excitement or
other circumstances rendering such action advisable in
Landlord’s sole opinion, Landlord will have the right to
prevent access to the Building or Project during he continuance of
the same by such means as Landlord, in its sole discretion, may
deem appropriate, including, without limitation, locking doors and
closing parking areas and other common areas. Landlord will not be
liable for damages to person or property or for injury to, or
interruption of, business for any discontinuance permitted under
this Article 12, nor will such discontinuance in any way be
construed as an eviction of Tenant or cause an abatement of Rent or
operate to release Tenant from any of Tenant’s obligations
under this Lease.
ARTICLE 13.
TENANT’S CARE OF THE PREMISES
Tenant will
maintain the Premises (including Tenant’s equipment, personal
property and trade fixtures located in the Premises) in their
condition at the time they were delivered to Tenant, reasonable
wear and tear excluded. Tenant will immediately advise Landlord of
any material damage to the Premises or the Project. All damage or
injury to the Premises, or the Project, or the fixtures,
appurtenances and equipment in the Premises or the Project which is
caused by Tenant, its agents employees, or invitees, may be
repaired, restored or replaced by Landlord, at the expense of
Tenant and such expense (plus fifteen percent (15%) of such expense
for Landlord’s overhead) will be collectible as Additional
Rent and will be paid by Tenant within ten (10) days after
delivery of a statement for such expense.
ARTICLE 14.
ELECTRICAL SERVICES
Tenant
acknowledges and agrees that this Lease is intended to be
“full service” and that it shall be Landlord’s
responsibility to secure electrical services for the premises and
to pay all costs associated therewith, including deposits, hook up
charges and ongoing service charges. All costs involved in
providing electrical service shall be included in the operating
expenses pursuant Article 5 above and is an uncontrollable
expense.
ARTICLE 15.
ALTERATIONS .
15.1
General. During the Term, Tenant will not make or allow to
be made any material alterations, additions or improvements to or
of the Premises or any part of the Premises, or attach any fixtures
or equipment to the Premises, without first obtaining
Landlord’s written consent. All such alterations, additions
and improvements consented to by Landlord, and capital improvements
which are required to be made to the Project as a result of the
nature of Tenant’s use of the Premises, which consent shall
not be un reasonably withheld:
(a) Will be
performed by contractors and subject to conditions specified by
Landlord (which may include requiring the posting of a
mechanic’s or material man’s lien bond); and
(b) At
Landlord’s option, will be made by Landlord for
Tenant’s account, and Tenant will reimburse Landlord for
their costs (including fifteen percent (15%) for Landlord’s
overhead) within ten (10) days after receipt of a statement of
such cost. Subject to Tenant’s rights in Article 17,
below, all alterations, additions, fixtures and improvements,
whether temporary or permanent in character, made in or upon the
Premises either by Tenant or Landlord will immediately become
Landlord’s property, and at the end of the Term will remain
on the Premises without compensation to Tenant.
15.2
Free-Standing Partitions. Tenant will have the right to
install free-standing work station partitions, without
Landlord’s prior written consent, so long as no building or
other governmental permit is required for their installation or
relocation; however, if a permit is required Landlord will not
unreasonably withhold its consent to such relocation or
installation. The free-standing work station partitions for which
Tenant pays will be part of Tenant’s trade fixtures for all
purposes under this Lease.
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15.3 Other
Charges . Tenant acknowledges that any alterations, additions
and improvements to the Premises (including without limitation
installation or relocation of partitions) may affect the heating,
cooling, power, lighting and other systems in the Project and any
increased cost attributable to such changes will be payable by
Tenant to Landlord as Additional Rent.
15.4
Removal . By notice given to Tenant no less than thirty
(30) days prior to the Expiration Date, Landlord may
either:
(a) require
that Tenant remove any or all alterations, additions, fixtures and
improvements which are made in or upon the Premises pursuant to
this Article 15. In that event, prior to the Expiration Date,
Tenant will remove such alterations, additions, fixtures and
improvements at Tenant’s sole cost and will restore the
Premises to the condition in which they were before such
alterations, additions, fixtures, improvements and additions were
made, reasonable wear and tear excepted; or
(b) enter the
Premises (without any liability for an actual or constructive,
partial or total, eviction or any other claim or offset) remove any
or all alterations, additions, fixtures and improvements made
pursuant to this Article 15 at Tenant’s expense;
however, Landlord will not enter the Premises in order to effect
such removal more than thirty (30) days before the Expiration
Date.
If Landlord
does not so notify Tenant, Landlord may remove such alterations,
fixtures, additions, and improvements after the end of the Term at
Tenant’s cost.
ARTICLE 16.
MECHANICS’ LIENS
Tenant will pay or
cause to be paid all costs and charges for work (a) done by
Tenant or caused to be done by Tenant, in or to the Premises, and
(b) for all materials furnished for or in connection with such
work. Tenant will indemnify Landlord against and hold Landlord, the
Premises; and the Project free, clear and harmless of and from all
mechanic’s liens and claims of liens, and all other
liabilities, liens, claims and demands on account of such work by
or on behalf of Tenant. If any such lien, at any time, is filed
against the Premises, or any part of the Project, Tenant will cause
such lien to be discharged of record within ten (10) days
after the filing of such lien, except that if Tenant desires to
contest such lien, it will furnish Landlord, within such ten (10)
day period, security reasonably satisfactory to Landlord of at
least 150% of the amount of the claim, plus estimated costs and
interest. If a final judgment establishing the validity or
existence of a lien for any amount is entered, Tenant will pay and
satisfy the same at once. If Tenant fails to pay any charge for
which a mechanics’ lien has been filed, and has not given
Landlord security as described above, Landlord may, at its option,
pay such charge and related costs and interest, and the amount so
paid, together with reasonable attorneys’ fees incurred in
connection with such lien, will be immediately due from Tenant to
Landlord as Additional Rent. Nothing contained in this Lease will
be deemed the consent or agreement of Landlord subject
Landlord’s interest in the Project to liability under any
mechanics’ or other lien law. If Tenant received notice that
a lien has been or is about to be filed against the Premises or the
Project or any action affecting title to the Project has been
commenced on account of work done by or for or materials furnished
to or for Tenant, it will immediately give Landlord written notice
of such notice. At least fifteen (15) days prior to the
commencement of any work (including but not limited to, any
material maintenance, repairs, alterations, additions, improvements
or installations) in or to the premises, by or for Tenant, Tenant
will give Landlord written notice of the proposed work and the
names and addresses of the persons supplying labor and materials
for the proposed work. Landlord will have the right to post notices
of non-responsibility or similar notices on the Premises in order
to protect the Premises against any such liens.
At the end of this
Lease, Tenant will promptly quit and surrender the Premises
broom-clean, in good order and repair, ordinary wear and tear
excepted. If Tenant is not then in default, Tenant may remove from
the Premises any trade fixtures, equipment and movable furniture
placed in the Premises by Tenant, whether or not such trade
fixtures or equipment are fastened to the Building; Tenant will not
remove any trade fixtures or equipment without Landlord’s
prior written consent if such fixtures or equipment are used in the
operation of the Building, or if the removal of such fixture or
equipment will result in impairing the structural strength of the
Building. Whether or not Tenant is in default, Tenant will remove
such alterations, additions, improvements, trade fixtures,
equipment and furniture as Landlord has requested in accordance
with Article 15. above, Tenant will fully repair any damage
occasioned by the removal of any trade fixtures, equipment,
furniture, alterations, additions and improvements. All trade
fixtures, equipment, furniture inventory, effects, alterations,
additions, and improvements on the Premises after the end of the
Term will be deemed conclusively to have been abandoned and may be
appropriated, sold, stored, destroyed or otherwise disposed of by
Landlord without notice to Tenant or any other person and without
obligation to account for them; and Tenant will pay Landlord for
all expenses incurred in connection with the removal of such
property, including, but not limited to, the cost of repairing any
damage to the Building or Premises caused by the removal of such
property. Tenant’s obligation to observe and perform this
covenant will survive the expiration or other termination of this
Lease.
ARTICLE 18.
EMINENT DOMAIN
If all the
Premises are taken by exercise of the power of eminent domain (or
conveyed by Landlord in lieu of such exercise) this Lease will
terminate on a date (the “termination date”) which is
the earlier of the date upon which the condemning authority takes
possession of the Premises or the date on which title to the
Premises is vested in the condemning authority. If more than
twenty-five percent (25%) of the Rentable Area of the Premises is
so taken, or if the Tenant does not cancel this Lease according to
the preceding sentence, the Monthly Rent will be abated in the
proportion of the Rentable Area of the Premises so taken to the
Rentable Area of the Premises immediately before such taking, and
Tenant’s Share will be appropriately recalculated. If all or
substantially all of the Building or the Project is so taken,
Landlord may cancel this Lease by written notice to Tenant given
thirty (30) days after the termination date. In the event of
any such taking, the entire award will be paid to Landlord and
Tenant will have no right or claim to any part of such award;
however, Tenant will have the right to assert a claim against the
condemning authority in a separate action and so long as
Landlord’s award is not reduced by such claim: for
(i) Tenant’s moving expenses; (ii) leasehold
improvements owned by Tenant; (iii) any other award
established solely for the benefit of Tenant.
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ARTICLE 19.
DAMAGE AND DESTRUCTION
If the Premises or
the Building are damaged by fire or other insured casualty,
Landlord will give Tenant notice of the time which will be needed
to repair such damage, as determined by Landlord in its sole
discretion, and the election (if any) which Landlord has made
according to this Article 19. Such notice will be given before
the forty-fifth (45th) day (the “Notice Date”) after
the fire or other insured casualty. If more than 25% of the
rentable area is damaged as to be unrentable, then Tenant may
cancel Lease.
(a) If the
Premises or the Building are damaged by fire or other insured
casualty to an extent which may be repaired within ninety
(90) days after the commencement of repair, as determined by
Landlord, Landlord will begin to repair the damage within ninety
(90) days after the notice date and will diligently pursue the
completion of such repair. In such event, this Lease will continue
in full force and effect except that Monthly Rent will be abated on
a pro rata basis from the date of the fire or other insured
casualty until the date of the completion of such repairs (the
“repair period”) based on the Rentable Area of the
portion of the Premises the use of which Tenant is deprived of
during the repair period.
(b) If the
Premises or the Building are damaged by fire or other insured
casualty to an extent which may not be repaired within ninety
(90) days after the commencement of repair, but may be
repaired within one hundred eighty (180) days after the
commencement of repair, as determined by Landlord, then, at
Landlord’s option, Landlord will diligently pursue to repair
such damage within one hundred eight (180) days after the
notice date. If Landlord elects to repair such damage, Monthly Rent
will be abated on a pro rata basis during the repair period based
on the Rentable Area of the portion of the Premises the use of
which Tenant is deprived during the repair period. If Landlord does
not elect to repair such damage, this Lease will terminate on the
notice date.
(c) If the
Premises or the Building are damaged by fire or other insured
casualty to an extent which may not be repaired within one hundred
eighty (180) days after the commencement of repair, as
determined by Landlord, then (i) Landlord may cancel this
Lease as of the date of such damage by written notice given to
Tenant on or before the notice date or (ii) Tenant may cancel
this Lease as of the date of such damage by written notice given to
Landlord within ten (10) days after Landlord’s delivery
of a notice that the repairs cannot be made within such one hundred
eighty (180) day period. If neither Landlord nor Tenant so
elects to cancel this Lease, Landlord will repair the Building and
Premises and Monthly Rent will be abated on a pro rata basis during
the repair period based on the Rentable Area of the portion of the
Premises the use of which Tenant is deprived during the repair
period.
(d) If the
proceeds of insurance are insufficient to pay for the repair of any
damage to the Premises or the Building, Landlord will have the
option to repair such damage or cancel this Lease as of the date of
such casualty by written notice to Tenant on or before the notice
date. If any such damage by fire or other casualty is the result of
the willful conduct or negligence or failure to act of Tenant, its
agent, contractors, employees, or invitees, there will be no
abatement of Monthly Rent as otherwise provided for in this
Article 19.
Tenant waives
any rights conferred by statute or otherwise on account of any
damage to the Premises, the Building, or the Project, to the extent
that those rights are inconsistent with Tenant’s rights under
this Article 19.
ARTICLE 20.
SUBORDINATION AND ATTORNMENT
20.1
General . This Lease and Tenant’s rights under this
Lease are subject and subordinate to any ground or underlying
lease, first mortgage, indenture, first deed of trust or other
first lien encumbrance, together with any renewals, extensions,
modifications, consolidations and replacements of such first lien
encumbrance, now or after the Date affecting or placed, charged or
enforced against the Land, the Building, or all or any portion of
the Project or any interest of Landlord in them or Landlord’s
interest in this Lease and the leasehold estate created by this
Lease (except to the extent any such instrument will expressly
provide that this Lease is superior to such instrument). This
provision will be self-operative and no further instrument of
subordination will be required in order to effect it. Nevertheless,
Tenant will execute, acknowledge and deliver to Landlord, at any
time and from time to time, upon demand by Landlord, such documents
as may be requested by Landlord, any ground or underlying lessor or
any mortgagee, to confirm or effect any such subordination. If
Tenant fails or refuses to execute, acknowledge and deliver any
such document within twenty (20) days after written demand,
Landlord, its successors and assigns will be entitled to execute,
acknowledge and deliver any and all such documents for and on
behalf of Tenant as attorney-in-fact for Tenant. Tenant by this
Section 20.1 constitutes and irrevocably appoints Landlord,
its successors and assigns as Tenant’s attorney-in-fact to
execute,acknowledge and deliver any and all documents described in
this Section 20.1 for and on behalf of Tenant, as provided in
this Section 20.1.
20.2
Attornment . Tenant agrees that in the event that any holder
of any ground or underlying lease, mortgage, deed of trust, or
other encumbrance encumbering any part of the Project succeeds to
landlord’s interest in the Premises, Tenant will pay to such
holder all rents subsequently payable under this Lease. Further,
Tenant agrees that in the event of the enforcement by the trustee
or the beneficiary under or holder or owner of any such mortgage,
deed of trust, land or ground lease, Tenant will, upon request of
any person or party succeeding to the interest of Landlord as a
result of such enforcement, automatically become the Tenant of and
attorn to such successor in interest without change in the term or
provisions of this Lease. Such successor in interest will not be
bound by (i) any payment of Monthly Rent or Rent for more than
one month in advance except prepayments in the nature of security
for the performance by Tenant of its obligations under this Lease,
or (ii) any amendment or modification of this Lease made
without the written consent or such trustee, beneficiary, holder or
owner or such successor in interest. Upon request by such successor
in interest and without cost to Landlord or such successor in
interest Tenant will execute, acknowledge and deliver an instrument
or instruments confirming the attornment. If Tenant fails or
refuses to execute, acknowledge and deliver any such document
within twenty (20) days after written demand, such successor
in interest will be entitled to execute, acknowledge and deliver
any and all such documents for and on behalf of Tenant as
attorney-in-fact for Tenant, and in such event, Tenant by this
Section 20.2 constitutes and irrevocably appoints such
successor in interest as Tenant’s attorney-in-fact to
execute, acknowledge and deliver any and all documents described in
this Section 20.2 for and on behalf of Tenant, as provided in
this Section 20.2.
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ARTICLE 21.
ENTRY BY LANDLORD
Landlord, its
agents, employees, and contractors may enter the Premises at any
time in response to an emergency or at reasonable hours
to:
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(a)
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inspect the Premises;
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(b)
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exhibit the same to prospective
purchasers, lenders or tenants;
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(c)
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determine whether Tenant is
complying with all its obligations in this Lease;
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(d)
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supply cleaning service and any
other service to be provided by Landlord to Tenant according to
this Lease;
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(e)
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post notices of non-responsibility
or similar notices; or
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(f)
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make repairs required of Landlord
under the terms of this Lease or repairs to any adjoining space or
utility services or make repairs, alterations or improvements to
any other portion of the Building; however, all such work will be
done as promptly as reasonably possible and so to cause as little
interference to Tenant as reasonably possible.
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Tenant, by this
Article 21, waives any claim against Landlord, its agents,
employees or contractors for damages for any injury or
inconvenience to or interference with Tenant’s business, any
loss of occupancy or quiet enjoyment of the Premises or any other
loss occasioned by such entry. Landlord will at all times have and
retain a key with which to unlock all of the doors in, on or about
the Premises (excluding Tenant’s vaults, safes and similar
areas designated in writing by Tenant in advance). Landlord will
have the right to use any and all means which Landlord may deem
proper to open doors in and to the Premises in an emergency in
order to obtain entry to the Premises. Any en
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