Exhibit 10.1
OFFICE LEASE
(Full Service Expense Stop Lease)
HAYDEN FERRY LAKESIDE
PHASE II
Between
HAYDEN FERRY LAKESIDE, LLC
and
RENEGY HOLDINGS, INC.
60 E. Rio Salado Parkway, Tempe, Arizona

 

 

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BASIC LEASE INFORMATION
I. LEASE DATE: January 17, 2008
II. LESSOR: Hayden Ferry Lakeside, LLC, an Arizona limited liability company

         
 
  Address:   c/o SunCor Development Company
 
      Attn: Property Manager and Corporate Counsel
 
      80 E. Rio Salado Parkway, Suite 410
 
      Tempe, Arizona 85281
 
      Phone: (480) 317-6800
 
      Fax:   (480) 317-6934

III. LESSEE: Renegy Holdings, Inc., a Delaware corporation

         
 
  Address:   Attn: Rob Zack, CFO
 
      301 West Warner, Suite 132
 
      Tempe, Arizona 85284
 
      Phone: (480) 556-5555
 
      Fax:   (480) 361-8341

IV. SECURITY:

         
 
  GUARANTORS:   Not required.
 
       
 
  LETTER OF CREDIT:   Optional $144,744.00 (See Section 5.4)

          V. PREMISES:   Suite Number: 1011, 10th Floor
 
       
 
      Rentable Area: 7,824
 
       
 
      Usable Area: 6,806
 
       
 
      See Section 1.2

VI. BUILDING: The Premises are within the Building known as Hayden Ferry
Lakeside — Phase II, with the street address noted below, located at the
northeast corner of Mill Avenue and Rio Salado Parkway, Tempe, Arizona.
VII. STREET ADDRESS OF THE BUILDING: 60 E. Rio Salado Parkway, Tempe, Arizona
VIII. RENTABLE AREA OF THE BUILDING: 294,911 rentable square feet (see
Section 1.2)
IX. LESSEE’S PRO-RATA SHARE: 2.653% Based on Rentable Area of the Premises (as
stated above) divided by the Rentable Area of the Building (as stated above).

 

 

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X. TERM (see Article 2):

             
 
  Lease Term:   65 months    
 
                Options:   One (1) five (5) year option (see Section 2.1.2)
 
                Projected Commencement Date:   July 1, 2008 (Lessor requires a
minimum of 150 days to complete tenant improvements from signed Lease and
approved space plan).*
 
                Projected Termination Date:   November 30, 2013*

*  
subject to adjustment; see Article 2

XI. BASE RENTAL:

                          Months of   Annual     Monthly     Rent Per Square  
Lease Term   Rental**     Rental**     Foot of Rental Area  
Months 1 - 12
  $ 266,016.00     $ 22,168.00     $ 34.00  
Months 13 - 24
  $ 273,840.00     $ 22,820.00     $ 35.00  
Months 25 - 36
  $ 281,664.00     $ 23,472.00     $ 36.00  
Months 37 - 48
  $ 289,488.00     $ 24,124.00     $ 37.00  
Months 49 - 65
  $ 297,312.00     $ 24,776.00     $ 38.00  

*  
See Section 3.5 for rent abatement for the first five (5) months of the Lease
Term and Section 5.3 for application of a portion of the Security Deposit to pay
Base Rental payable for months 13, 25, 37, 49, 61 and 65 of the Lease Term.
  **  
See Article XIV below and Exhibit “C” for possible increase in Base Rental
during months six (6) through sixty-five (65) of the Lease Term.

XII. EXPENSE STOP (YEARLY): $6.25 times the number of square feet of Rentable
Area in the Premises. (NOTE: certain tax abatement benefits applicable to the
Building and adjacent land are not included in the Expense Stop figure — see
Section 4.6).
XIII. PERMITTED USE: Lessee shall use the Premises, utilizing only the Permitted
Name, in a respectable and reputable manner for the offices of a real estate
construction, consultant and management company, and for no other purpose.
PERMITTED NAME: “Renegy Holdings, Inc.”, or such other reputable name suitable
for the Building and the Project as may be approved by Lessor, which approval
shall not be unreasonably withheld.

 

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XIV. TENANT’S IMPROVEMENT ALLOWANCE: $272,240.00 (total allowance for entire
Premises calculated as follows: $40.00 times 6,806, which is the number of
usable square feet selected by Lessor to calculate the Tenant Improvement
Allowance. See Exhibit “C” for Lessee’s right, in its discretion, to elect to
increase the Tenant Improvement Allowance up to Five Dollars ($5.00) per usable
square foot comprising the Premises, with such additional amount, plus interest
(at a rate per annum equal to ten percent (10%)), to be paid in the form of an
increase in Base Rental during months six (6) through sixty-five (65) of the
Lease Term, as more particularly set forth on Exhibit “C” attached hereto.
XV. PREPAYMENT OF ONE MONTH’S BASE RENTAL: $22,168.00 (payable by Lessee upon
execution of this Lease, and applied to the Base Rental for the sixth (6th)
month of the Lease Term).
XVI. SECURITY DEPOSIT: $144,744.00 (See Article 5).
XVII. REQUIRED INSURANCE: (see Article 14)

  (a)  
Fire Damage Liability Endorsement: Two Hundred Fifty Thousand Dollars
($250,000.00)
    (b)  
Commercial General Liability Insurance: Five Million Dollars-Combined Single
Limit ($5,000,000.00)
    (c)  
ISO Special Form Insurance on Lessee’s Property: See Section 14.1.2 for required
coverage
    (d)  
Business Interruption: See Section 14.1.3 for required coverage.

    (e)  
Worker’s compensation: See Section 14.1.4 for required coverage.

XVIII. PARKING SPACES AND PARKING RENTAL: (if none, state “NONE”)

                          Monthly   Total Rental Per Month Per Space   Type of
Parking   Number of Spaces   Rental (4)   (4)  
Executive parking (1)
  4   x $80/month   $ 320.00  
Reserved — covered (2)
  6   x $60/month   $ 360.00  
Unreserved — uncovered or covered (3)
  17   x $40/month   $ 680.00  
Total Monthly Parking Rental
          $ 1,360.00  

The above Parking Spaces are calculated based on the following ratios:
(i) executive parking spaces will be allocated based on 0.5 space per 1,000
square feet of usable area (rounded down for less than a full space; provided,
however, Lessor has agreed to grant to Lessee a minimum of four (4) executive
parking spaces as of the date of this Lease; provided further, however, the
foregoing ratio shall apply in the event the square footage of the Premises is
ever increased or decreased during the term hereof); (ii) covered reserved
parking spaces will be allocated based on 1.0 spaces per 1,000 square feet of
usable area (rounded down for less than a full space), and (iii) uncovered
unreserved parking spaces will be allocated based on 2.5 spaces per 1,000 square
feet of usable area (any number ending with .5 or less shall be rounded down,
and greater than .5 shall be rounded up).

 

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  (1)  
located below grade beneath the Building (see Article 25)

    (2)  
located in the P-l Parking Structure (See Article 25)
    (3)  
unreserved parking will be covered only if available, and Lessor shall have no
duty or obligation to provide or ensure the availability of covered unreserved
parking; uncovered parking spaces are located on the top floor of the P-1
Parking Structure.
    (4)  
NOTE: THESE RATES APPLY TO THE CURRENT CALENDAR YEAR AND MAY BE INCREASED DURING
THE LEASE TERM — SEE ARTICLE 25

XIX. BROKERS (see Section 31.17):

         
 
  Lessor’s Broker:   Lee & Associates
 
      3200 E. Camelback Road, Suite 100
 
      Phoenix, Arizona 85018
 
       
 
  Lessee’s Broker:   Dave Johnson
 
      Lee & Associates
 
      3200 East Camelback Road, Suite 100
 
      Phoenix, Arizona 85018

The foregoing Basic Lease Information is part of this Lease. Each reference in
this Lease to any of the Basic Lease Information shall mean the respective
information set forth above, and any terms used in this Lease that are
capitalized shall refer to the corresponding terms set forth above (e.g.,
“Lessor”, “Lessee”, “Tenant Improvement Allowance”, “Permitted Use”, etc.). In
the event of a conflict, this Lease shall prevail. Lessee acknowledges that it
has read and understands 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 Lessor and Lessee regarding the Premises.
     RZ               
Lessee’s Initials

 

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Table of Contents

              Page    
1 PREMISES, PROJECT, HAYDEN FERRY LAKESIDE DEVELOPMENT; OWNERS’ ASSOCIATION
    1  
 
       
1.1 Description of Premises; Agreement to Lease; Project
    1  
 
       
1.2 Rentable Area
    1  
 
       
1.3 Hayden Ferry Lakeside, Easements; Additional CC&R’s
    1  
 
       
1.4 Owners’ Association
    2  
 
       
1.5 Outdoor Balcony Area
    2  
 
       
2 TERM
    3  
 
       
2.1 Lease Term
    3  
 
       
2.2 Term Commencement
    4  
 
       
2.3 Delay in Tender of Possession
    4  
 
       
2.4 Confirmation of Commencement Date
    5  
 
       
2.5 Holding Over
    5  
 
       
3 RENTAL
    6  
 
       
3.1 Base Rental
    6  
 
       
3.2 Payment
    6  
 
       
3.3 Additional Rent
    6  
 
       
3.4 Rental Taxes
    6  
 
       
3.5 Abatement of Base Rental
    7  
 
       
3.6 Determination of Base Rental and Expense Stop for Renewal Option
    7  
 
       
4 OPERATING COSTS
    8  
 
       
4.1 Lessee’s Obligation to Pay
    8  
 
       
4.2 Monthly Impound
    9  
 
       
4.3 Definition of Operating Costs
    9  
 
       
4.4 Definition of Parking Facilities
    12  
 
       
4.5 Amounts Excluded from Operating Costs
    12  
 
       
4.6 Abatement of Real Estate Taxes
    13  
 
       
4.7 Lessee’s Pro-Rata Share
    13  
 
       
4.8 Verification of Operating Costs
    13  
 
       
4.9 Adjustment for Partial Vacancy
    14  
 
       

 

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Table of Contents
(continued)

              Page    
5 SECURITY DEPOSIT
    14  
 
       
5.1 Initial Security Deposit
    14  
 
       
5.2 Increased Security Deposit
    14  
 
       
5.3 Application of Security Deposit to Base Rental
    15  
 
       
5.4 Letter of Credit
    15  
 
       
6 USE OF PREMISES
    17  
 
       
6.1 Permitted Uses
    17  
 
       
6.2 Compliance with Insurance Requirements
    18  
 
       
6.3 Waste, Nuisance, Etc
    18  
 
       
6.4 Area Above Standard Finish Ceiling Line
    18  
 
       
6.5 Common Areas
    18  
 
       
6.6 Compliance with Laws
    18  
 
       
6.7 Rules and Regulations
    19  
 
       
6.8 Project Signs; Interior Signage
    19  
 
       
6.9 Hazardous Substances
    19  
 
       
6.10 No Access to Roof
    20  
 
       
6.11 Access
    20  
 
       
7 CONDITION OF PREMISES; CONSTRUCTION
    20  
 
       
7.1 Condition of Premises
    20  
 
       
7.2 Construction
    20  
 
       
8 BUILDING SERVICES
    21  
 
       
8.1 Services
    21  
 
       
8.2 Interruption of Services
    21  
 
       
8.3 Prohibitions; Excess Utilities
    22  
 
       
8.4 Utility Deregulation
    22  
 
       
8.5 District Cooling Services
    23  
 
       
8.6 Telecommunications Provider
    23  
 
       
8.7 Access
    25  
 
       
9 MAINTENANCE AND REPAIR
    25  
 
       
9.1 Lessor’s Obligations
    25  
 
       

 

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Table of Contents
(continued)

              Page    
9.2 Lessee’s Obligations
    25  
 
       
10 ALTERATIONS TO PREMISES
    26  
 
       
10.1 Lessor’s Prior Written Consent Required
    26  
 
       
10.2 Alterations Become Part of Premises
    26  
 
       
11 LIENS
    27  
 
       
12 LESSOR’S ENTRY
    27  
 
       
13 INDEMNITY
    28  
 
       
13.1 Lessee
    28  
 
       
13.2 Lessor
    28  
 
       
14 INSURANCE
    28  
 
       
14.1 Types of Insurance
    28  
 
       
14.2 Notice of Insurance
    29  
 
       
14.3 Waiver
    29  
 
       
15 DAMAGE OR DESTRUCTION
    30  
 
       
15.1 Termination
    30  
 
       
15.2 Repair
    30  
 
       
15.3 No Abatement of Rent
    31  
 
       
16 CONDEMNATION
    31  
 
       
16.1 Termination
    31  
 
       
16.2 Abatement of Rent
    31  
 
       
16.3 Award
    31  
 
       
16.4 Restoration
    31  
 
       
16.5 Date of Condemnation
    32  
 
       
17 QUIET ENJOYMENT
    32  
 
       
18 ESTOPPEL CERTIFICATE
    32  
 
       
19 MASTER LEASE, LENDER, SUBORDINATION
    32  
 
       
19.1 Master Lease
    32  
 
       
19.2 Lease Subordinate to Liens
    33  
 
       
20 ASSIGNMENT AND SUBLETTING
    33  
 
       
20.1 Lessor’s Consent Required
    33  
 
       

 

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Table of Contents
(continued)

              Page    
20.2 No Release of Lessee
    34  
 
       
20.3 Attorneys’ Fees
    34  
 
       
20.4 Corporations, Associations and Partnerships
    34  
 
       
20.5 No Merger
    34  
 
       
21 SUBSTITUTION OF PREMISES
    34  
 
       
22 ABANDONMENT OF PREMISES
    35  
 
       
23 LESSEE’S PROPERTY
    35  
 
       
23.1 Lessee’s Property
    35  
 
       
23.2 Removal
    35  
 
       
23.3 Taxes
    36  
 
       
24 SURRENDER
    36  
 
       
25 PARKING
    36  
 
       
25.1 Surface Parking
    36  
 
       
25.2 P-l Parking Structure; Underground Parking Facility
    37  
 
       
25.3 Parking Ratio
    39  
 
       
26 FORCE MAJEURE
    39  
 
       
27 RIGHTS RESERVED BY LESSOR
    39  
 
       
28 NOTICES
    39  
 
       
29 DEFAULTS, REMEDIES
    39  
 
       
29.1 Defaults
    39  
 
       
29.2 Remedies
    40  
 
       
29.3 Reletting the Premises
    42  
 
       
29.4 No Waiver
    42  
 
       
29.5 Late Charges
    42  
 
       
29.6 Interest
    42  
 
       
29.7 Attorneys’ Fees
    42  
 
       
30 LESSOR’S LIABILITY
    43  
 
       
30.1 Default by Lessor
    43  
 
       
30.2 Sale of Lessor’s Interest
    43  
 
       
30.3 No Liability for Loss, Theft, Etc
    43  
 
       

 

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Table of Contents
(continued)

              Page    
30.4 Lessor’s Liability
    44  
 
       
31 GENERAL
    44  
 
       
31.1 Captions
    44  
 
       
31.2 Time of the Essence
    44  
 
       
31.3 No Partnership, No Third Party Rights
    44  
 
       
31.4 Entire Agreement
    44  
 
       
31.5 Joint and Several Obligations
    44  
 
       
31.6 Authority to Execute
    45  
 
       
31.7 Arizona Law
    45  
 
       
31.8 Partial Invalidity
    45  
 
       
31.9 Incorporation of Exhibits
    45  
 
       
31.10 Waiver of Notice
    45  
 
       
31.11 Binding on Successors and Assigns
    45  
 
       
31.12 Impartial Interpretation
    45  
 
       
31.13 Not Binding Until Signed
    45  
 
       
31.14 No Recording
    45  
 
       
31.15 Calendar and Business Days
    46  
 
       
31.16 Lessee’s Financial Statements
    46  
 
       
31.17 Brokers
    46  
 
       
31.18 Intentionally Omitted
    46  
 
       
31.19 Airport Disclaimer
    46  
 
       
31.20 Consent of Lessor
    46  
 
       
31.21 Other Tenants
    46  
 
       
31.22 OFAC Certification
    47  
 
       

 

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OFFICE LEASE

1  
PREMISES, PROJECT, HAYDEN FERRY LAKESIDE DEVELOPMENT; OWNERS’ ASSOCIATION.

1.1 Description of Premises; Agreement to Lease; Project. On the terms and
conditions contained in this Lease, Lessor hereby leases to Lessee and Lessee
hereby leases from Lessor those premises referred to in the Basic Lease
Information and designated on the floor plan(s) attached hereto as Exhibit “A”
(the “Premises”). The Premises shall have an upper boundary of the underside of
the floor immediately above the Premises (subject to the use restriction
contained in Section 6.4), and a lower boundary of the unfinished surface of the
floor upon which the Premises are situated. The Building of which the Premises
are a part with the address set forth in the Basic Lease Information (the
“Building”) is a part of that portion of Hayden Ferry Lakeside (as hereafter
defined) designated for office, commercial, retail, and parking uses as
generally outlined on Exhibit “A-1” attached hereto (the “Project”).
1.2 Rentable Area. NOTWITHSTANDING ANY OTHER PROVISIONS OF THIS LEASE, THE
PARTIES AGREE THAT FOR PURPOSES OF CALCULATING BASE RENTAL AND LESSEE’S PRO-RATA
SHARE, (A) THE PREMISES WILL BE DEEMED TO CONTAIN A RENTABLE AREA AND USABLE
AREA COMPRISING THE NUMBER OF SQUARE FEET DESIGNATED IN THE BASIC LEASE
INFORMATION, AND (B) THE BUILDING WILL BE DEEMED TO CONTAIN A RENTABLE AREA
COMPRISING THE NUMBER OF SQUARE FEET DESIGNATED IN THE BASIC LEASE INFORMATION,
AND (C) SAID SQUARE FOOTAGE OF THE PREMISES AND THE BUILDING ARE STIPULATED
AMOUNTS BASED ON LESSOR’S METHOD OF DETERMINING SAID SQUARE FOOTAGE (INCLUDING A
LOAD FACTOR, THE GENERAL USE OF CERTAIN BOMA STANDARDS, AND OTHER
CONSIDERATIONS) AND MAY NOT REFLECT THE ACTUAL AMOUNT OF FLOOR SPACE AVAILABLE
FOR THE USE OF LESSEE OR OTHER TENANTS, AND WILL NOT BE ADJUSTED TO REFLECT
CHANGES DURING THE TERM OF THIS LEASE IN RENTABLE OR USABLE AREA AS TYPICALLY
CALCULATED USING BOMA STANDARDS.
1.3 Hayden Ferry Lakeside, Easements; Additional CC&R’s. Lessee acknowledges
that the Project is part of a master-planned area known as Hayden Ferry Lakeside
(“Hayden Ferry Lakeside”), which is or may be comprised of office, commercial,
retail, hotel, residential and other uses, together with a parking structure and
underground parking facilities. Lessee also acknowledges and agrees that this
Lease, Lessee’s use of the Premises, and the exercise of any rights set forth in
this Lease are subject and subordinate to any and all easements, covenants,
conditions, restrictions, and similar matters of record against the Project,
including, without limitation, the Master Declaration of Covenants, Conditions,
and Restrictions for Hayden Ferry Lakeside, and the Declaration of Covenants,
Conditions and Restrictions for Hayden Ferry Lakeside West (“Existing CC&R’s”).
In addition, Lessee agrees that (i) Lessor must reserve full flexibility and the
legal right to impose upon the Project such easements, rights, dedications,
plats and restrictions as Lessor

 

 

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deems necessary or desirable, in its discretion, to facilitate the development,
use and operation of Hayden Ferry Lakeside, and (ii) Lessor shall have the
right, from time to time, to grant and record such easements, rights,
dedications, plats and restrictions, including, without limitation,
modifications to the Existing CC&R’s, as Lessor deems necessary or desirable
with respect to the Building, the Project, and/or Hayden Ferry Lakeside, so long
as such easements, rights, dedications, plats and restrictions do not
unreasonably and materially interfere with the use of, or access to, the
Premises by Lessee (“Additional CC&R’s”). The Existing CC&R’s and the Additional
CC&R’s are hereafter collectively referred to as the “CC&R’s”. Lessee (and
Guarantor) shall not be required or permitted to sign any of the foregoing
documents, and Lessee agrees that this Lease shall be subordinate and subject to
all CC&R’s recorded by Lessor, including without limitation any amendments,
modifications or restatements of any such documents, whether or not of record
prior to the execution of this Lease.
1.4 Owners’ Association. One or more associations of property owners within all
or a portion of Hayden Ferry Lakeside and/or the Project has been or will be
hereafter formed pursuant to the CC&R’s to own and/or operate the Underground
Parking Facilities and/or the P-1 Parking Structure (as those terms are defined
in Article 25), and/or to manage, operate, maintain and replace all or portions
of the common areas and common facilities outside of the Building and other
buildings within the Project and/or all of Hayden Ferry Lakeside, together with
property adjacent to Hayden Ferry Lakeside that will be maintained and managed
for the benefit thereof or as may be required by the City of Tempe (each
referred to herein as an “Owners’ Association”). When an Owners’ Association is
formed, Lessor reserves the right, in its discretion, to assign to an Owners’
Association, on terms acceptable to Lessor, all or a certain portion of the
duties and obligations of Lessor with respect to the maintenance, repair,
operation and replacement of the Underground Parking Facilities, and/or the P-l
Parking Structure, and/or all or a portion of the common areas and common
facilities owned by Lessor within the Project located outside of the Building
(including those described in Section 4.3 with respect to Operating Costs, as
therein defined). Lessor will in turn pay assessments and other charges to each
Owners’ Association, and Lessor shall have the right to include the same in the
Operating Costs under this Lease. Upon assumption of such duties and obligations
by an Owners’ Association in writing, Lessor shall be permanently relieved of
any responsibility with respect thereto if the assignment is a permanent
assignment, or if the assignment is for a period of time, for the period of time
specified in the assignment document, provided that Lessor shall thereafter be
responsible for using reasonable efforts to cause the performance of such duties
and obligations by the Owners’ Association in compliance with the standards set
forth in this Lease.
1.5 Outdoor Balcony Area. Until this Lease, or Lessee’s right to occupy and use
the Premises, is terminated as permitted by the terms of this Lease, Lessee
shall have the right to use only the portion of the outdoor balcony area that is
directly contiguous to the applicable exterior wall of the Premises without cost
or rent to Lessee, the general location of such portion of said balcony area is
depicted on Exhibit “A” attached hereto (such portion of said balcony area shall
be referred to herein as the “Outdoor Balcony Area” and the remaining portion of
said balcony area shall be referred to herein as the “Remainder Balcony Area”),
subject to the following: (a) the Outdoor Balcony Area shall be used in a quiet
and orderly manner that does not unreasonably disturb any other tenants of the
Building or unreasonably interfere with the use and enjoyment of the Building or
other balcony areas by other tenants or invitees, and in no event will any sound
system, outdoor speakers or outside entertainment be permitted except with the
prior written consent of Lessor, which it may withhold in its sole discretion,
(b) no outdoor furniture, tables, chairs, umbrellas, equipment, plants, lighting
or other items will be allowed except with the prior written approval of Lessor
(which approval shall not be unreasonably

 

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withheld, conditioned or delayed), and any such items must be commercial grade
and a matched set, but in no event shall any awnings nor any signs, logos or any
advertising materials be placed in or on the Outdoor Balcony Area or on any
items located thereon (as may be approved by Lessor as herein provided),
(c) Lessee shall, at its sole cost, otherwise comply with all applicable state,
municipal or local laws, regulations, rules or ordinances with respect to its
use of the Outdoor Balcony Area, (d) Lessee shall at all times, at its sole
expense, maintain the Outdoor Balcony Area in a clean, neat and attractive
fashion suitable for a first class development such as the Project, and shall be
responsible for the safe use thereof by Lessee, its employees, agents,
contractors and invitees, and shall prevent any user of the Outdoor Balcony Area
from scaling the fence or other barrier now or hereafter surrounding the Outdoor
Balcony Area, (e) Lessee acknowledges and agrees that Lessor will require access
to the Outdoor Balcony Area from time to time to use existing equipment to wash,
repair and replace windows and otherwise gain access to exterior portions of the
Building to perform maintenance, repairs and other work, (f) Lessee shall not
alter the Outdoor Balcony Area in any way and shall repair any damage to the
Outdoor Balcony Area or the Building to the extent caused by Lessee, its
employees, agents, contractors, or invitees, (g) no smoking shall be allowed on
the Outdoor Balcony Area, (h) Lessee acknowledges and agrees that Lessor may
access the Outdoor Balcony Area through the Premises at any time to erect a
barrier (the composition and dimensions of such barrier to be in Lessor’s
discretion) dividing the Outdoor Balcony Area and the Remainder Balcony Area,
(i) Lessee acknowledges and agrees that nothing herein shall grant Lessee any
present or future rights to access or otherwise utilize the Remainder Balcony
Area, whether or not Lessor has erected the barrier contemplated in clause
(h) above, (j) Lessee shall be obligated (whether or not Lessor has erected the
barrier contemplated in clause (h) above), at Lessee’s sole cost and expense, to
repair any damage to, or remove any debris or property from, the Remainder
Balcony Area caused or placed thereon by Lessee or its agents, contractors or
employees; and (k) Lessee shall (whether or not Lessor has erected the barrier
contemplated in clause (h) above) indemnify, defend and hold harmless Lessor
for, from and against any and all claims, losses, damages, actions and causes of
action arising from any such entry onto the Remainder Balcony Area by Lessee, or
its agents, contractors or employees.

2 TERM.

2.1 Lease Term.
2.1.1 Initial Term. Except as provided herein, the initial term of this Lease
shall be for the period set forth in the Basic Lease Information, subject to
early commencement as provided in Section 2.2 or later commencement as provided
in Section 2.3 (“Initial Term”).
2.1.2 Extension of Initial Term. Lessee shall have the right and option to
extend the Initial Term of this Lease for the renewal option period set forth in
the Basic Lease Information (“Renewal Option”) upon all the terms, covenants and
conditions set forth in this Lease, except that Base Rental and the Expense Stop
shall be established as set forth in Section 3.6 below. The Renewal Option may
be exercised only if (i) Lessee expressly and unconditionally exercises the
Renewal Option by providing written notice thereof to Lessor at least six
(6) months prior to expiration of the Initial Term, and (ii) Lessee is not in
default under this Lease beyond any applicable cure periods at the time of
Lessee’s exercise of the Renewal Option set forth herein and on the date the
Renewal Option period commences. If Lessee does not satisfy the requirements of
subsections (i) and (ii), the Renewal Option set forth in this Section 2.1.2
shall automatically be deemed null and void.

 

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2.1.3 “Lease Term” Defined. For purposes of this Lease, “Lease Term” shall refer
to the Initial Term and the Renewal Option period if the Renewal Option is
properly exercised pursuant to Section 2.1.2.
2.2 Term Commencement. Subject to the following, the Lease Term shall commence
on the earlier of (i) the date a certificate of occupancy has been issued for
the Premises and Lessor delivers to Lessee and Lessee takes from Lessor
possession of all or a portion thereof in accordance with Section 2.3 below, or
(ii) 12:01 a.m. on the Projected Commencement Date (as may be extended pursuant
to Section 2.3 below) (the “Commencement Date”); provided, however, if the
Commencement Date does not occur on the first day of a calendar month, the Lease
Term shall begin on the first day of the next succeeding calendar month;
provided, however, Lessee’s obligation to pay Rent (as defined in Section 3.3)
and other charges hereunder shall commence in accordance with Section 3.1 and
4.1. This Lease shall terminate at 11:59 p.m. on the last day of the calendar
month that the Projected Termination Date set forth in the Basic Lease
Information occurs (as may be extended pursuant to Section 2.3 below) (the
“Termination Date”). Lessee will not occupy the Premises prior to the
commencement of the Lease Term without Lessor’s prior written consent, which
consent Lessor may grant, withhold or condition in its sole and absolute
discretion. Notwithstanding the previous sentence, upon the date that is ten
(10) business days prior to the anticipated Commencement Date (as determined by
Lessor), until the Commencement Date, Lessee shall have the right, prior to and
without triggering the Commencement Date, to enter upon the Premises for
purposes of installing any furniture, equipment and trade fixtures that are
approved by Lessor (such approval not to be unreasonably withheld or delayed);
provided in any such event that: (a) Lessor shall incur no expense in connection
with such early entry by Lessee and shall have no liability to Lessee or its
agents, employees or contractors for damage to any property stored in the
Premises by Lessee; (b) Lessee shall not unreasonably interfere with Lessor’s
construction of any Lessor’s Work in the Premises; (c) Lessee shall provide
Lessor, prior to such entry, certificates of insurance as required by this Lease
naming Lessor as an additional insured; and (d) without limiting any of Lessee’s
indemnification obligations set forth elsewhere in this Lease, Lessee shall
indemnify, defend and hold harmless Lessor from any and all claims, losses,
damages, actions and causes of action arising from any such entry onto the
Premises by Lessee or its agents, employees or contractors. If Lessee enters
onto the Premises prior to the Commencement Date, Lessee also shall comply with
and observe all terms and conditions of this Lease (other than Lessee’s
obligation to pay any rental under this Lease).
2.3 Delay in Tender of Possession.
2.3.1 Delay in Tender of Possession. If Lessor is unable to Substantially
Complete Lessor’s Work to the extent required in Exhibit “C” (i.e., to the
extent required to allow Lessee to commence Lessee’s Work while Lessor continues
to complete Lessor’s Work) and tender possession of the Premises to Lessee for
performance of Lessee’s Work on or before the Projected Commencement Date set
forth in the Basic Lease Information, for any reason whatsoever, including,
without limitation, Lessor’s inability to complete any required construction, or
Delays Caused by Lessee (as that term is defined in Exhibit “C” attached
hereto), Lessor shall not be liable to Lessee for any costs, damages, losses,
fees or penalties resulting therefrom and this Lease shall continue in full
force and effect, except that:

 

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2.3.1.1 Delays Not Caused by Lessee. If the delay in tender of possession does
not result from Delays Caused by Lessee, then (i) the Lease Term and Lessee’s
obligation to pay Base Rental or other rental pursuant hereto shall commence
when Lessor Substantially Completes Lessor’s Work for the Premises and tenders
possession thereof to Lessee (regardless of whether Lessee actually takes
possession), and (ii) the Projected Commencement Date and the Projected
Termination Date each shall be advanced by the number of days that commencement
of the term hereof was so delayed. If Lessor, however, is unable to tender
possession of the Premises to Lessee on or before one hundred eighty (180) days
after the Projected Commencement Date set forth in the Basic Lease Information
for reasons other than Delays Caused by Lessee (in which event Section 2.3.1.2
below shall apply) and/or force majeure events described in Article 26 (in which
event said Article shall apply with respect to such delay), then Lessor shall
not be in breach of this Lease, but Lessee shall be entitled to, as its sole and
exclusive remedy, (a) terminate this Lease by written notice to Lessor given
within ten (10) days after the expiration of said 180-day period; (b) a return
of the Security Deposit and any prepayment of Base Rental pursuant to Article XV
of the Basic Lease Information; and (c) reimbursement by Lessor of Lessee’s
actual out-of-pocket expenses directly incurred by Lessor’s failure to deliver
the Premises, which expenses shall be evidenced by documentation reasonably
acceptable to Lessor and in no event shall exceed Twenty-Thousand and No/100
Dollars ($20,000.00).
2.3.1.2 Delays Caused by Lessee. If delay in tender of possession is the result
of Delays Caused by Lessee, then Base Rental and other rental due hereunder
shall commence as of the Projected Commencement Date set forth in the Basic
Lease Information.
2.4 Confirmation of Commencement Date. If the Lease Term commences as herein
provided on other than the Projected Commencement Date set forth in the Basic
Lease Information, then the parties shall confirm in writing the date the Lease
Term commences and any adjustment to the Termination Date, which confirmation
shall be attached hereto and made a part hereof.
2.5 Holding Over.
2.5.1 With Lessor’s Consent. If Lessee remains in possession of the Premises
after the expiration or termination of this Lease with Lessor’s express written
consent, and no other lease is executed, Lessee shall be deemed a tenant on a
month-to-month basis on the terms and conditions herein, but shall pay an amount
equal to one hundred fifty percent (150%) of the monthly Base Rental in effect
prior to the date of such expiration or termination, together with Lessee’s
Pro-Rata Share of Excess Operating Costs (as defined in Section 4.2) and all
other Rent owing hereunder. Either Lessor or Lessee may terminate such
month-to-month tenancy effective thirty (30) days after giving written notice to
the other party.

 

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2.5.2 Without Lessor’s Consent. If Lessee remains in possession of the Premises
after the expiration or termination of this Lease without Lessor’s express
written consent and without a new lease in effect, then Lessee shall be a tenant
at sufferance, Lessor shall be entitled to immediate possession, and Lessor
shall be entitled to collect from Lessee for each day of such possession (as
Base Rental hereunder and not as liquidated damages) an amount equal to two
hundred percent (200%) of the daily Base Rental in effect prior to the date of
such expiration or termination, together with Lessee’s Pro-Rata Share of Excess
Operating Costs and all other Rent owing hereunder, and Lessee shall indemnify,
defend and hold Lessor harmless for, from, and against any losses, damages,
liabilities, obligations, expenses, fees and costs (including reasonable
attorneys’ fees and costs) resulting from such holding over. Lessor’s right to
collect such Base Rental and other Rent shall be in addition to and shall not
preclude concurrent, alternative or successive exercise of any other rights or
remedies available to Lessor.
3 RENTAL.
3.1 Base Rental. Throughout the Lease Term, commencing on the Commencement Date,
Lessee shall pay to Lessor as rental hereunder that sum identified as the
monthly Base Rental for the Premises in the Basic Lease Information, as may be
increased from time to time as may be provided in the Basic Lease Information,
in Sections 2.5 and 3.6 of this Lease. Base Rental shall be paid in advance on
the first day of each calendar month of the Lease Term. If the Commencement Date
and/or Termination Date occurs on other than the first day (with respect to the
Commencement Date) or the last day (with respect to the Termination Date) of a
calendar month (as determined in accordance with Section 2.2), then the Base
Rental for said partial month shall be prorated on a per diem basis (based on a
30-day month), and shall be paid in full on the Commencement Date or the first
day of such partial month in which the Lease Term terminates (as applicable).
3.2 Payment. Base Rental and all other Rent and other sums payable pursuant to
this Lease shall be paid, without deduction, offset, prior notice or demand, to
Lessor at the address set forth in the Basic Lease Information, or at such other
place or to such other person as Lessor may from time to time designate by
notice hereunder. All payments shall be made in lawful money of the United
States of America.
3.3 Additional Rent. All sums due from Lessee to Lessor under this Lease,
including Base Rental, Lessee’s Pro-Rata share of Excess Operating Costs,
parking rental due to Lessor or its manager for any Parking Spaces (as defined
in Article 25) leased to Lessee, and all other sums due from Lessee under this
Lease shall constitute rent due to Lessor and may be referred to herein
collectively from time to time as “Rent”.
3.4 Rental Taxes. Together with, and in addition to, any payment of rental or
any other sums payable to or for the benefit of Lessor pursuant to this Lease,
Lessee shall pay to Lessor any excise, sales, occupancy, franchise, privilege,
rental or transaction privilege tax levied by any governmental authority upon
Lessor (except Lessor’s income tax) and/or the Premises as a result and to the
extent of such payments hereunder or as a result of Lessee’s use or occupancy of
the Premises, and any taxes assessed or imposed in lieu of or in substitution
for any of the foregoing taxes whether now existing or hereafter enacted.

 

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3.5 Abatement of Base Rental. Notwithstanding any other provisions in this Lease
to the contrary, so long as Lessee is not in default under this Lease beyond
applicable cure periods as set forth in Section 29.1 below (otherwise, Base
Rental and all other sums due shall be due in full as set forth in the Basic
Lease Information at the monthly amount otherwise due for the applicable month
of the Lease Term), Lessee shall be entitled to an abatement of the monthly Base
Rental due for the first five (5) months of the Lease Term; provided, however,
that all other sums due under this Lease shall be due and payable during said
abatement period, and that if this Lease is terminated pursuant to the terms
hereof before the benefit of the abatement is fully realized by Lessee, Lessee’s
right to receive an abatement as herein provided, or the value thereof in lieu
of an abatement, shall likewise terminate for all purposes.
3.6 Determination of Base Rental and Expense Stop for Renewal Option. If Lessee
properly and timely exercises its right with respect to the Renewal Option as
provided in Section 2.1.2, then the Base Rental due and payable for the Premises
during the Renewal Option period shall be one hundred percent (100%) of the Fair
Market Rental Rate per rentable square foot within the Premises (as set forth in
the Basic Lease Information) established and determined as hereafter provided,
and the Expense Stop for the Renewal Option shall be equal to the amount used to
establish the Fair Market Rental Rate as hereafter provided.
3.6.1 Within forty-five (45) days after Lessee timely and properly exercises its
option rights as herein provided, Lessor shall submit to Lessee in writing
Lessor’s proposed base rental for the Premises, the proposed expense stop (if
Lessor elects to increase the same beyond the Expense Stop set forth in the
Basic Lease Information), and any economic benefits Lessor may elect to provide
to Lessee, in Lessor’s sole discretion, such as a tenant improvement allowance
to refurbish or upgrade the Premises (“Lessor’s Economic Terms for the
Premises”).
3.6.2 If Lessee does not submit its written objection to Lessor’s Economic Terms
for the Premises within thirty (30) days after receipt thereof, then the Base
Rental and Expense Stop included therein shall constitute the “Fair Market
Rental Rate” for purposes of this Section, provided that all other terms
constituting Lessor’s Economic Terms for the Premises shall also apply. If
Lessee delivers its written objection to Lessor’s Economic Terms for the
Premises within said 30-day period, then the Fair Market Rental Rate shall be
established pursuant to Section 3.6.3 below, provided that Lessor’s Economic
Terms for the Premises (excluding Lessor’s proposed base rental) shall be used
to determine the same as therein provided.
3.6.3 If Lessor and Lessee cannot agree upon the Fair Market Rental Rate
pursuant to Section 3.6.2 above within the time period set forth therein for
Lessee’s acceptance or rejection of Lessor’s proposed Fair Market Rental Rate
(“Rent Determination Period”), then the Fair Market Rental Rate shall be
established as follows:
3.6.3.1 Within fifteen (15) days after the expiration of the Rent Determination
Period, Lessor and Lessee shall each appoint a qualified, independent MAI
appraiser of its choice with at least five (5) years of experience in appraising
prevailing market rates for properties similar to the Building (“Qualified
Appraiser”). The two appraisers selected by Lessor and Lessee shall then appoint
a third Qualified Appraiser, and the third Qualified Appraiser shall constitute
the “Appraiser” for purposes of this Section. If either party fails to appoint a
Qualified Appraiser within said 15-day period, then the Qualified Appraiser
timely appointed by the other party shall constitute the “Appraiser” for
purposes of this Section.

 

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3.6.3.2 Lessor and Lessee shall direct the Appraiser to make an independent
determination of the prevailing market rate for the Premises based on Lessor’s
Economic Terms for the Premises (including, without limitation, the expense stop
selected by Lessor), the quality of the space, existing improvements and
amenities, and the then prevailing market rate per square foot of rentable area
for office space comparable to the Premises, the Building, and the Project in
quality, appearance, location, amenities and design in the Phoenix metropolitan
area, and such other standards as may be customarily utilized by MAI appraisers.
The Appraiser shall be required to submit its determination within forty-five
(45) days after the Rent Determination Period, and the same shall constitute the
Fair Market Rental Rate per square foot of rentable area to be used for purposes
of this Section.
3.6.3.3 If the Fair Market Rental Rate established pursuant to this
Section 3.6.3 is equal to or greater than the base rental per rentable square
foot offered by Lessor in Lessor’s Economic Terms for the Premises, then Lessee
shall bear the full expense of the Appraiser. If the Fair Market Rental Rate
determined pursuant to this Section 3.6.3 is less than the base rental so
established by Lessor, then Lessor shall bear the full expense of the Appraiser.
3.6.4 When the Fair Market Rental Rate is determined as set forth above, Lessor
and Lessee shall, acting reasonably and in good faith, within thirty (30) days
thereafter, execute and deliver an amendment to this Lease that acknowledges the
extension of the Lease Term, establishes the Base Rental (at 100% of the Fair
Market Rental Rate so determined), and establishes the expense stop used to
calculate the Fair Market Rental Rate for the Premises; provided, however, that
execution of said amendment shall not be a condition precedent to the Base
Rental due for the Renewal Option.
3.6.5 Any other provision in this Section notwithstanding, in no event shall the
Base Rental to be paid for the Premises during the Renewal Option period be less
than the Base Rental applicable to the Initial Term.

4 OPERATING COSTS.

4.1 Lessee’s Obligation to Pay. In addition to the Base Rental and all other
sums payable pursuant to this Lease, Lessee shall pay to Lessor, commencing on
the Commencement Date, and continuing thereafter during the entire Lease Term,
as additional rental hereunder, Lessee’s Pro-Rata Share (as set forth in the
Basic Lease Information and Section 4.7) of that amount by which the Operating
Costs (as defined in Section 4.3 below) for each calendar year during the term
hereof exceeds the Expense Stop (as set forth in the Basic Lease Information).
If the Commencement Date and/or Termination Date occurs on other than the first
day (with respect to the Commencement Date) or the last day (with respect to the
Termination Date) of a calendar month (as determined in accordance with
Section 2.2.), then Lessees Pro Rata Share of Excess Operating Costs, if any,
for said partial month shall be pro rated on a per diem basis (based on a 30-day
month), and shall be paid in full on the Commencement Date or first day of the
month in which the Lease Term terminates (as applicable).

 

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4.2 Monthly Impound. Prior to the Commencement Date, and prior to January 1 of
each calendar year thereafter during the Lease Term, Lessor shall prepare or
cause to be prepared in good faith an estimate of the total Operating Costs for
the upcoming calendar year (or the remaining portion thereof) for the Building
and those Operating Costs for the entire Project allocated to Lessor’s portion
of the Project. As of the Commencement Date, if Lessee’s Pro-Rata Share of this
estimated amount exceeds the Expense Stop (such excess shall hereinafter be
referred to as “Excess Operating Costs”), Lessee shall pay, concurrently with
the monthly Base Rental payments, an amount equal to one-twelfth (1/12) of the
estimated amount of Lessee’s Pro-Rata Share of such Excess Operating Costs.
Within three (3) months after the expiration of such calendar year, Lessor shall
furnish Lessee with a statement setting forth in reasonable detail the Operating
Costs for such calendar year, determined on a cash basis, as of December 31. If
the estimated amount paid by Lessee towards Excess Operating Costs for such
calendar year as provided for above is greater than Lessee’s Pro-Rata Share of
the actual excess as set forth in the statement delivered by Lessor to Lessee
for such calendar year, then Lessor shall credit the additional amount paid by
Lessee toward the next installments of Base Rental, or, if at the end of the
Lease Term, reimburse said amount to Lessee within thirty (30) days after
receiving a written request for reimbursement from Lessee. If the estimated
amount paid by Lessee is less than the actual amount of Lessee’s Pro-Rata Share
of the Excess Operating Costs, then Lessee shall pay the additional amount to
Lessor on or before thirty (30) days after receipt by Lessee of said statement.
If the term of this Lease terminates on other than the last day of a calendar
year, Lessee’s Pro-Rata Share of Excess Operating Costs for the year in which
this Lease terminates shall be prorated on a per diem basis (based on a 365-day
year). If Lessor’s statement for said final year of this Lease discloses that
Lessee has underpaid or overpaid Lessee’s Pro-Rata Share, then Lessor or Lessee,
as the case may be, shall remit the difference to the other party on or before
fifteen (15) days after Lessee’s receipt of said statement (or Lessor may apply
the same against any past due amounts Lessee may owe to Lessor). The provisions
of this Section shall survive the expiration or termination of this Lease.
4.3 Definition of Operating Costs. The term “Operating Costs” for purposes of
this Lease means all costs, expenses, assessments, and fees now or hereafter
incurred by Lessor, an Owners’ Association or the property managers thereof, in
managing, maintaining, repairing, replacing (except as limited by Section 4.5)
and operating the Building, the Project and all Parking Facilities (as defined
in Section 4.4), and certain areas which are adjacent to and benefit the Project
(whether or not presently incurred with respect to the Project and whether or
not now customary or in the contemplation of the parties), including, but not
limited to, the following:
4.3.1 Subject to Section 4.6, real property taxes and assessments and any other
taxes imposed or levied by any governmental entity upon the Project and/or the
Parking Facilities and all improvements (including, without limitation, personal
property taxes on equipment, fixtures and other property of Lessor used in
connection with the operation, repair and maintenance thereof), and costs,
expenses and fees (including reasonable attorneys’ fees and property tax
consultants’ fees) incurred by Lessor in contesting any of said taxes.
4.3.2 Fees and charges for property management (consistent with other Class A
office buildings in the Phoenix metropolitan area), building superintendents,
telecommunications managers, monitoring personnel and other services of
independent contractors (including, without limitation, alarm and monitoring
services, maintenance of surface parking and loading areas and other exterior
portions of the common areas, window cleaning and replacement (except as limited
by Section 4.5), landscaping maintenance and replacement, elevator maintenance,
telecommunications riser and roof management/maintenance services,

 

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lobby maintenance, maintenance of fountains and other water features and
maintenance of decorative items and artwork); and wages, charges, taxes, fringe
benefits or other labor costs for all onsite agents or employees engaged in the
operation, maintenance, cleaning, repairing, decoration, monitoring and
management of the Project, including without limitation (i) a facilities
coordinator that will coordinate the use of loading areas, trash removal and
other facilities benefiting the Project, a portion of which will be located in
the P-1 Parking Structure, and (ii) a telecommunications manager to manage,
oversee and operate all telecommunications facilities within or otherwise
serving the Building and/or the Project, including the use thereof and access
thereto by the telecommunications providers for Lessee and other tenants,
provided that Lessor shall have the option, but not the duty, to hire a
facilities coordinator and/or a telecommunications manager in Lessor’s sole
discretion.
4.3.3 Equipment, supplies and materials (new or replacement) used in connection
with the operation, maintenance, decoration, repairing and cleaning of the
Project and the Parking Facilities; the cost of water, sewer service, gas,
electricity, condenser water service provided for the Condenser Water System (as
defined in Section 8.5), and other utilities and services for the Project and
the Parking Facilities (except telephone service for lessees, which shall be the
obligation of each lessee, and any utilities to be paid by Lessee pursuant to
the terms of this Lease); the cost of refuse, garbage and trash removal,
collection and disposal; and the cost of vermin and pest control.
4.3.4 The cost of janitorial service for, and cleaning and other care of, the
Project and the Parking Facilities;
4.3.5 The cost and expense of use, upkeep, maintenance and repair (including
restoration and/or replacement of components, component parts, equipment,
systems, and other items necessary for the use, upkeep, updating increased
efficiency, compliance with applicable laws, operation and maintenance),
management and protection of all interior, exterior and below grade portions of
the Building and Project, including without limitation (i) the roof membrane,
structural elements of the roof, and screening structures and improvements on
the roof of the Building; (ii) entryways; (iii) windows and doors;
(iv) elevators and related equipment; (v) signs and signage support structures;
(vi) plumbing, electrical, fire systems and sprinklers; (vii) heating,
ventilating and air conditioning systems, including the Condenser Water System;
(viii) canopies, shading devices, parapets and support columns and cables;
(ix) retaining walls; (x) storage and equipment rooms and similar areas;
(xi) lighting facilities; (xii) utility lines outside of the premises of a
lessee; (xiii) hallways, stairways, lobby areas, service corridors, benches,
toilets and other interior common facilities; (xiv) drainage systems and
retention areas for the Project; (xv) landscape maintenance, repair and
replacement (including irrigation and sprinkler systems); (xvi) all surface
parking, parking meters and loading areas, (xvii) public sidewalks, walkways and
other public areas adjacent to the Project if Lessor believes removal of trash
and debris or other maintenance or repair work would be beneficial to the
Project, (xviii) telecommunications riser space, conduits and similar areas,
(xix) sidewalks, bike paths, pedestrian ways, roads, curbs, and other paved or
improved surfaces, including without limitation, access roads and facilities for
fire protection and to accommodate the needs of the Maricopa County Flood
Control District, (xx) all benches, bike racks, traffic control signs and
devices, and directional and identification signs, (xxi) misting systems, and
(xxii) monitoring systems.

 

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4.3.6 The cost and expense of use, upkeep, maintenance and repair (including
restoration and/or replacement of components, component parts, equipment,
systems, and other items necessary for the use, upkeep, updating increased
efficiency, compliance with applicable laws, operation and maintenance),
management and protection of all interior, exterior and below grade portions of
the Parking Facilities, including without limitation (i) entryways, ramps,
driveways and parking areas; (ii) windows and doors; (iii) elevators and related
equipment; (iv) signs and signage support structures; (v) plumbing, electrical,
fire systems and sprinklers; (vi) heating, ventilating and air conditioning
systems, including the Condenser Water System; (vii) canopies, shading devices,
and support columns and cables; (viii) storage and equipment rooms and similar
areas; (ix) lighting facilities; (x) utility lines; (xi) curbs, sidewalks,
hallways, stairways, and other common facilities; (xii) booths for parking fee
collection, entryway gates, card systems and other improvements regulating
access to and from the Parking Facilities; (xiii) office areas for personnel
operating and maintaining the Parking Facilities; (xiv) all loading areas, trash
removal areas and facilities, and transformer rooms; (xv) janitorial and storage
rooms; (xvi) curbs, bumpers and other protective devices, (xvii) the cost of
painting, re-striping and other traffic control markings, signs and devices with
respect to parking spaces, ramps, entryways and other portions of the Parking
Facilities, and (xviii) monitoring systems. Any other provisions in this Lease
to the contrary notwithstanding, Lessor reserves the right to allocate those
Operating Costs relating to Underground Parking Facilities based on the number
of Parking Spaces located under the Building compared to all Parking Spaces in
the Underground Parking Facilities.
4.3.7 The cost of fire insurance with extended and/or “all risk” coverage, flood
insurance, general public liability insurance, business interruption, loss
rental income, worker’s compensation and all other insurance obtained from time
to time with respect to Lessor’s portion of the Project.
4.3.8 Capital improvements made to the Project or the Parking Facilities after
the year in which the same are Substantially Completed, which improvements are
required to comply with applicable laws, rules and regulations or were
undertaken with a reasonable expectation that they would result in more
efficient operation if Lessor reasonably determines that the cost to be incurred
is justified in comparison with the savings to be achieved during the useful
life of such improvements; provided that the cost of each such capital
improvement, together with any financing charges incurred in connection
therewith, shall be amortized over the useful life thereof and only that portion
attributable to each calendar year of the Lease Term shall be included herein
for such calendar year of the Lease Term.
4.3.9 All assessments, fees and charges due from Lessor with respect to its
portion of Hayden Ferry Lakeside under any CC&R’s, including assessments, fees
and charges due to an Owners’ Association responsible for common facilities
maintained, operated, repaired and replaced for the benefit of property Owners
in Hayden Ferry Lakeside.
4.3.10 Any costs and expenses shared by the Project or Lessor’s portion thereof
with other portions of Hayden Ferry Lakeside (whether Lessor is the owner and/or
manager thereof), if the nature of such costs and expenses are otherwise
includable as Operating Costs as herein described, and if such allocation is
made on a reasonable and consistent basis that fairly reflects the share of such
costs actually attributable to the Building and the Project.

 

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4.3.11 Any assessments, fees and charges due from Lessor to an Owners’
Association with respect to (i) those portions of the common areas and common
facilities within or adjacent to the Project outside of the Building or other
buildings and the P-1 Parking Structure, including without limitation, the
master drainage system and master utility system for Hayden Ferry Lakeside, and
access roads and facilities for fire protection and to accommodate the needs of
the Maricopa County Flood Control District, and/or (ii) the Parking Facilities,
if the responsibility for maintaining the same is assigned by Lessor to the
Owners’ Association as provided in Section 1.4 above, as may be set forth in a
separate agreement between Lessor and the Owners’ Association and/or in the
CC&R’s.
4.3.12 Assessments, taxes and fees levied, assessed or imposed on the Project
and/or the Building in connection with the development of Tempe Town Lake,
adjacent park areas, the Rio Salado Parkway and similar improvements, including
without limitation assessments, taxes, and/or fees due with respect to (i) the
Community Facilities District (both for payment of the bonds related to the
initial development of the Tempe Town Lake and adjacent park facilities and
related improvements, and for the ongoing operation, maintenance and replacement
of the same), (ii) the Rio Salado Parkway Improvement District and the costs
incurred to place major electric lines underground and to develop the Rio Salado
Parkway, and (iii) payments due to Downtown Tempe Community, Inc.
4.3.13 All costs and expenses incurred by Lessor or owed by Lessor to another
person or entity with respect to the maintenance, repair, operation and
replacement of those portions of the P-l Parking Structure dedicated for trash
removal, loading and unloading areas, and utility, transformer and
telecommunication rooms serving the Building and other buildings within the
Project, but only that portion of such costs and expenses reasonably allocated
to the Building based on the benefits received by the Building compared to other
buildings within the Project, as reasonably determined by Lessor.
4.4 Definition of Parking Facilities. The term “Parking Facilities” for purposes
of this Lease means all surface parking within the Project and the Underground
Parking Facilities, but shall not include the P-l Parking Structure (except for
the costs and expenses referred to in subsection 4.3.13 above) unless and until
Lessor elects to convey the P-l Parking Structure to an Owners’ Association,
and/or to assign to an Owners’ Association all or a portion of Lessor’s duties
with respect to repair, maintenance, operation and replacement (except as
limited by Section 4.5) of the P-l Parking Structure, in which event the term
“Parking Facilities” will thereafter be deemed to include the P-l Parking
Structure for purposes of this Lease.
4.5 Amounts Excluded from Operating Costs. “Operating Costs” will not include
any of the following: (i) costs of capital improvements or capital repairs
unless the same are amortized over a period of five (5) or more years on a
straight-line basis, with ten percent (10%) interest; provided, however, that
only the amortized portion may be included in the Operating Costs for each year,
(ii) costs of improvements, repairs or replacements reimbursed by third parties,
(iii) repairs (including replacement or rebuilding) caused or occasioned by
insured casualty or as a result of condemnation, (iv) the cost of repairing
design or construction defects, (v) costs and expenses related to investigation,
removal and/or clean-up of hazardous substances (as defined in Section 6.9),
(vi) real estate commissions paid in connection with the leasing of space within
the Project; (vii) depreciation of the Building for tax purposes;
(viii) payments of principal and interest on any mortgages, deeds of trust or
other financing instruments relating to the financing of the Project (except as
described in subsection 4.3.8 above); (ix) costs directly related to improving
tenant space for leasing within the Building; and (x) items subject to
reimbursement by, or chargebacks to, tenants in the Building pursuant to any
tenant lease. In addition, if major capital replacement or repair projects are
paid from a reasonable reserve fund, the cost of which Lessor may include in the
Operating Costs, it will not be necessary for Lessor to amortize and collect the
cost thereof on an amortized basis as provided in subsection (i) above.

 

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4.6 Abatement of Real Estate Taxes. LESSEE IS HEREBY ADVISED THAT THE MASTER
LEASE (AS DEFINED IN SECTION 19.1) HAS BEEN EXECUTED BY LESSOR FOR THE BUILDING
IN WHICH THE PREMISES ARE LOCATED IN ORDER FOR LESSOR TO OBTAIN THE BENEFITS OF
TAX ABATEMENT UNDER APPLICABLE ARIZONA LAW. ACCORDINGLY, THE ABATED TAXES ARE
NOT INCLUDED WITHIN THE EXPENSE STOP SET FORTH IN THE BASIC LEASE INFORMATION.
LESSEE ALSO ACKNOWLEDGES AND AGREES THAT OPERATING COSTS WILL INCREASE
SIGNIFICANTLY WHEN THE TAX ABATEMENT IS NO LONGER IN EFFECT AND TAXES FOR REAL
AND PERSONAL PROPERTY ARE PAID AND COLLECTED AS PART OF OPERATING COSTS. THE
ABATEMENT PERIOD COMMENCED FEBRUARY, 2007; THEREFORE, UNDER CURRENT LAW, THE TAX
ABATEMENT SHALL BE EFFECTIVE THROUGH JANUARY, 2015.
4.7 Lessee’s Pro-Rata Share. Lessee’s Pro-Rata Share shall be the percentage set
forth in the Basic Lease Information.
4.8 Verification of Operating Costs. Lessor shall keep books, records and
accounts of the Operating Costs for each calendar year. Lessee shall have the
right, exercisable after it pays to Lessor in full Lessee’s Pro-Rata Share of
Excess Operating Costs, but in any event within sixty (60) days after receipt by
Lessee of the statement of Operating Costs for the preceding year, during the
regular business hours of Lessor, to examine and inspect such books, records and
accounts. Lessee may, within said 60-day period, cause an audit of the Operating
Costs by a qualified, independent certified public accounting firm with national
or regional standing that is not being compensated on a contingency fee basis.
If the statement of Operating Costs previously submitted to Lessee is more than
the amount of Operating Costs shown by such audit, and such audit has been
accurately prepared, Lessor shall credit Lessee’s Pro-Rata Share of such amount
to the next monthly installment of rental due from Lessee, or, if at the end of
the Lease Term, reimburse said amount to Lessee within thirty (30) days after
receiving a written request for reimbursement from Lessee. Additionally, if said
statement of Lessee’s Pro-Rata Share of Operating Costs shall be determined by
an accurate audit to be at least five percent (5%) more than the amount of
Lessee’s Pro-Rata Share Operating Costs shown by such audit, Lessor shall credit
an amount equal to the reasonable cost of such audit (not to exceed $1,000.00)
to the next monthly installment of rental due from Lessee. Otherwise, Lessee
shall bear the cost of such audit. Notwithstanding the foregoing, if the
Operating Costs of any calendar year are audited by another tenant or occupant
of the Building or the Project, Lessee shall have no right to cause a subsequent
audit of the Operating Costs for the same calendar year, and such audit by the
other tenant, if not contested by Lessor, shall be binding on Lessee.

 

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4.9 Adjustment for Partial Vacancy. For any calendar year during which less than
one hundred percent (100%) of the Rentable Area of the Building is occupied, the
calculation of estimated and actual Operating Costs for such year shall be
adjusted to equal the estimated and actual Operating Costs which Lessor projects
would have been incurred had one hundred percent (100%) of the Rentable Area of
the Building been occupied during such year.
5 SECURITY DEPOSIT.
5.1 Initial Security Deposit. Subject to Section 5.4, Lessee shall deliver to
Lessor upon execution of this Lease the amount set forth in Article XVI of the
Basic Lease Information as security for the full performance by Lessee of its
obligations hereunder (“Security Deposit”). If Lessee defaults under any
provision hereof, Lessor shall be entitled, at its option, to immediately apply
and retain all or any part of the Security Deposit for the payment of any Rent
or other sum in default or any other amount which Lessor may spend or become
obligated to spend because of Lessee’s default, or to compensate Lessor for any
other loss or damage which Lessor has suffered because of Lessee’s default. If
any portion of the Security Deposit is so used or applied, Lessee shall, within
five (5) business days after written demand, deposit cash with Lessor in an
amount sufficient to restore the Security Deposit to the amount required in said
Article XVI of the Basic Lease Information (subject to Section 5.4), and
Lessee’s failure to do so shall be a material breach of this Lease. Lessor shall
not be required to keep any cash comprising the Security Deposit separate from
its general funds, and Lessee shall not be entitled to interest on the Security
Deposit. If Lessee fully performs every provision of this Lease to be performed
by it, the Security Deposit or any balance thereof shall be returned to Lessee
within thirty (30) days after the expiration of the Lease Term or any period of
holding over with the written consent of Lessor. Lessor’s rights with respect to
the Security Deposit shall be in addition to and shall not preclude concurrent,
alternative or successive exercise of any other rights or remedies available to
Lessor.
5.2 Increased Security Deposit. If Lessee is in default under this Lease more
than two (2) times within any twelve (12) month period, irrespective of whether
or not such default is cured, then, without limiting Lessor’s other rights and
remedies provided for in this Lease or at law or in equity, (i) the Security
Deposit shall automatically be increased by Twenty Two Thousand One Hundred
Sixty Eight and No/100 Dollars ($22,168.00) if Lessee has previously delivered
to Lessor and Lessor then still holds the Security Deposit in cash (i.e., Lessee
has not elected to replace the cash Security Deposit with the Letter of Credit
(as defined in Section 5.4) in accordance with Section 5.4 below), or
(ii) Lessee shall deliver to Lessor in cash the amount of Forty Four Thousand
Three Hundred Thirty Six and No/100 Dollars ($44,336.00) if Lessee has elected
to replace the Security Deposit with the Letter of Credit, which amount shall be
held and/or applied by Lessor in accordance with Section 5.1 above. Lessee
shall, within five (5) business days after written demand, deposit cash with
Lessor in the amount necessary to satisfy Security Deposit requirements set
forth in the immediately preceding sentence.

 

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5.3 Application of Security Deposit to Base Rental. Notwithstanding any other
provisions in this Lease to the contrary, so long as (i) Lessee has delivered
the Security Deposit in cash to Lessor and the same is then held by Lessor
(i.e., Lessee has not elected to exercise its rights under Section 5.4 below to
replace the cash Security Deposit with the Letter of Credit), and (ii) on each
Application Date (as hereinafter defined), Lessee is not then, and has not at
any time prior thereto been, in default under this Lease beyond applicable cure
periods set forth in Section 29.1 below (otherwise, Base Rental and all other
sums due shall be due in full as set forth in the Basic Lease Information at the
monthly amount otherwise due for the applicable month of the Lease Term and the
Security Deposit shall not be reduced as set forth herein), a portion of the
Security Deposit then held by Lessor shall be applied against the Base Rental
payable by Lessee for months 13, 25, 37, 49, 61 and 65 of the Lease Term, such
application to occur on the first (1st) day of each of the foregoing months of
the Lease Term (each an “Application Date”), in strict accordance with the
following:

                  Portion of Security Deposit   Remaining Security Deposit Month
  Applied   After Application * 13   $22,820.00   $ 121,924.00   25   $23,472.00
  $ 98,452.00   37   $24,124.00   $ 74,328.00   49   $24,776.00   $ 49,552.00  
61   $24,776.00   $ 24,776.00   65   $24,776.00   $ 0.00  

*  
Subject to Section 5.2.

Notwithstanding the foregoing, all other sums due under this Lease shall remain
due and payable during the foregoing months of the Lease Term. Furthermore, if
this Lease is terminated pursuant to the terms hereof before the benefit of this
Section 5.3 is fully realized by Lessee, Lessee’s right to receive the benefit
herein provided, or the value thereof in lieu of such benefit, shall likewise
terminate for all purposes.
5.4 Letter of Credit. At Lessee’s option, Lessee shall have a one (1) time right
to replace the cash Security Deposit with an “Irrevocable Standby Letter of
Credit”, with an initial face value of One Hundred Forty-Four Thousand Seven
Hundred Forty-Four and No/100 Dollars ($144,744.00) (the “Letter of Credit”),
subject to the following terms and conditions:
5.4.1 The Letter of Credit shall be in favor of Lessor, and its successors and
assigns, and shall be issued by a bank acceptable to Lessor with a Standard &
Poors rating of “A” or better, shall comply with all of the terms and conditions
of this Section 5.4 and shall otherwise be in form acceptable to Lessor. The
initial Letter of Credit shall have an expiration date of no earlier than twelve
(12) months after the date issued.
5.4.2 The Letter of Credit or any replacement Letter of Credit shall be
irrevocable for the term thereof and shall automatically renew on a year to year
basis until a period ending no earlier than two (2) months after expiration of
the Initial Term (the “LOC Expiration Date”) without any action whatsoever on
the part of Lessor; provided that the issuing bank shall have the right not to
renew the Letter of Credit by giving written notice to Lessor not less than
sixty (60) days prior to the expiration of the then current term of the Letter
of Credit that it does not intend to renew the Letter of Credit. Lessee
understands that the election by the issuing bank not to renew the Letter of
Credit shall not, in any event, diminish the obligation of Lessee to deposit the
Security Deposit or, in the alternative, maintain such an irrevocable Letter of
Credit in favor of Lessor through the LOC Expiration Date.

 

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5.4.3 Lessor shall have the right from time to time to make one or more draws on
the Letter of Credit at any time that Lessor has the right to use all or a part
of the Security Deposit pursuant to this Lease, and the proceeds may be applied
as permitted under this Lease.
5.4.4 Lessee acknowledges and agrees (and the Letter of Credit shall so state)
that the Letter of Credit shall be honored by the issuing bank, without inquiry,
upon presentation by Lessor and regardless of whether Lessee disputes Lessor’s
claim to such funds.
5.4.5 So long as Lessee is not in default under this Lease beyond applicable
cure periods set forth in Section 29.1 below (in which event the Letter of
Credit shall not be reduced as otherwise provided for herein), the Letter of
Credit shall be reduced by the amounts set forth below on the corresponding
first day of each month of the Lease Term set forth below (except that for month
65 of the Lease Term, the reduction shall be effective as of the last day of
said month):

                      Remaining Face Value After Month of Lease Term   Letter of
Credit Reduction   Reduction 13   $24,000.00   $ 120,744.00   25   $24,000.00  
$ 96,744.00   37   $24,000.00   $ 72,744.00   49   $24,000.00   $ 48,744.00   61
  $24,000.00   $ 24,744.00   65   $24,744.00   $ 0.00  

5.4.6 In the event of a transfer of Lessor’s interest in the Premises, Lessor
shall have the right to transfer the Letter of Credit to the transferee and
Lessee shall take whatever action necessary to effectuate such transfer and
thereupon the Lessor shall, without any further agreement between the parties,
be released by Lessee from all liability therefor, and it is agreed that the
provisions hereof shall apply to every transfer or assignment of said Letter of
Credit to a new landlord.
Without limiting the generality of the foregoing, if the Letter of Credit
expires earlier than the LOC Expiration Date, or the issuing bank notifies
Lessor that it shall not renew the Letter of Credit, Lessor shall accept a
renewal thereof or substitute letter of credit (such renewal or substitute
Letter of Credit to be in effect not later than thirty (30) days prior to the
expiration of the initial Letter of Credit), irrevocable and automatically
renewable through the LOC Expiration Date upon the same terms as the expiring
Letter of Credit or upon such other terms as may be acceptable to Lessor. If,
however, (x) the Letter of Credit is not timely renewed, or (y) a substitute
Letter of Credit, complying with all of the terms and conditions of this
Section 5.4 is

 

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not timely received, Lessor may present such Letter of Credit to the issuing
bank, and the entire sum so obtained shall be paid to Lessor and shall be held
by Lessor in accordance with Section 5.1 above, and thereafter Lessee shall no
longer have the right throughout the Lease Term to replace said cash security
with another Letter of Credit. Furthermore, Lessor shall be entitled to prompt
reimbursement by Lessee of any attorneys’ fees incurred by Lessor in connection
with the review of any proposed substitute Letter of Credit. Notwithstanding
anything to the contrary in this Section 5, in no event shall Lessee be entitled
to satisfy its security obligations hereunder by combining both cash and the
Letter of Credit, except as provided in Section 5.2 (i.e., Lessee must either
deliver to Lessor the entire Security Deposit in cash or, in the alternative,
deliver to Lessor the Letter of Credit, it being the express intent of the
parties that Lessee may not, for example purposes only, deliver to Lessor fifty
percent (50%) of the Security Deposit in cash and a Letter of Credit with a
$100,000.00 initial face value).
6 USE OF PREMISES.
6.1 Permitted Uses. Lessee shall not use or permit the use of the Premises for
any purpose, except the purpose set forth in the Basic Lease Information,
without the prior written consent of Lessor. However, Lessee is in any event
prohibited from engaging in any of the following uses unless (i) specifically
allowed in the Basic Lease Information as a Permitted Use (e.g., a reference to
“reputable general office uses” or similar references do not qualify as
specifically allowing such uses), or (ii) specifically consented to in writing
by Lessor in an Amendment to this Lease (although Lessor may allow other tenants
to engage in such uses): any retail or wholesale sales activities; gift shops;
newsstands; food, tobacco or alcoholic or nonalcoholic beverage sales or
services (including, without limitation, restaurants, snack shops, ice cream or
frozen yogurt shops, fruit juice or fruit drink shops, coffee shops or smoke
shops or lounges); bail bond operations; public stenographer or typist;
secretarial service or messenger service; schools, classrooms or training
activities; employment agencies; telemarketing or telephone solicitation
activities; hair salon, barber shop or manicure shop; or for the marketing
and/or sale or leasing of residential homes, units, apartments, or other
properties used for residential purposes. In no event shall the Premises be used
for the operation of (i) a real property title insurance and escrow services
provider, or (ii) an executive office suite business (with or without the
ancillary services typically provided by such businesses). For purposes of this
Lease, the term “executive office suite business” shall mean the operation of a
flexible workplace center consisting of executive office suites used by clients,
licensees, and occupants paying for the benefit of using shared office
workplaces, with on-site or off-site personnel whose responsibilities include
the management of the flexible workplace center, and offering, at any time,
services of the type that are customarily offered by executive office suite
businesses, which may or may not include, without limitation, conference and
meeting facilities and services, administrative support or word processing,
secretarial support, teleconferencing capabilities, high speed broadband
connectivity and use, furniture, office equipment and supplies and other
services and facilities. Lessee acknowledges that Lessor has granted an
exclusive use right within the Building in favor of other tenants who operate or
will operate the foregoing businesses, and that the foregoing use restrictions
shall be strictly enforced by Lessor.

 

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6.2 Compliance with Insurance Requirements. Lessee shall not engage in or permit
any activity which will cause the cancellation or increase the existing premium
rate of fire, liability or other insurance on or relating to the Premises or the
Project. Lessee shall not sell or permit to remain in or about the Premises or
the Outdoor Balcony Area any article that may be prohibited by standard “ISO
Special Form” (“All Risk”) fire and extended coverage insurance policies to be
maintained pursuant to this Lease. Lessee shall comply with all requirements
pertaining to the use of the Premises or the Outdoor Balcony Area necessary for
maintenance of such fire and public liability insurance as Lessor may from time
to time obtain for the Premises or the Project.
6.3 Waste, Nuisance, Etc. Lessee shall not commit or permit any waste on the
Premises or the Outdoor Balcony Area, nor in any manner deface or injure the
Premises, the Outdoor Balcony Area, the Building, the Underground Parking
Facilities, the P-l Parking Structure or the Project. Lessee shall not use or
permit the use of the Premises or the Outdoor Balcony Area for the sale,
preparation, or distribution of pornographic materials or for other offensive or
immoral purposes (in the sole judgment of Lessor), or commit or permit on the
Premises or the Outdoor Balcony Area any offensive, noisy or dangerous activity
or other nuisance, activity or thing, or generate or permit any noxious, putrid
or foul odor, which may disturb the quiet enjoyment or peaceable possession of
any other tenant or occupant of the Project. Lessee shall not overload the floor
of the Premises or the Outdoor Balcony Area beyond the load limit therefor
established by Lessor. Lessee shall not employ any device in or about the
Premises that emits any sound, frequency, radio waves or radiation that are
audible or detectable outside the Premises, except fire and burglar alarms,
cellular telephones and customary and usual office equipment.
6.4 Area Above Standard Finish Ceiling Line. Lessee shall have no right to use,
enter into or cause to be entered into that portion of the Premises above the
standard ceiling line (as established by Lessor) without the prior written
consent of Lessor.
6.5 Common Areas. Subject to the CC&R’s and any rules and regulations adopted
and enforced pursuant thereto, the rules and regulations referred to in
Section 6.7, the rights reserved by Lessor in Article 27 below, and the
provisions of Article 25, Lessee shall be entitled to the non-exclusive use in
common with Lessor, other tenants and occupants of the Building and the Project,
and other parties authorized by Lessor, their respective employees, agents,
contractors, customers and invitees, of such entryways, sidewalks, hallways,
stairways, toilets, elevators, lobby areas, and other common areas and
facilities in the Building or within the Project as Lessor may from time to time
designate for common use, provided such designation does not materially and
adversely affect Lessee’s access to the Premises. The foregoing notwithstanding,
Lessor reserves the right to grant exclusive use of designated parking spaces
and other portions of the common areas and facilities to other tenants or
occupants and their employees and invitees.
6.6 Compliance with Laws. Lessee shall comply, at its expense, with all laws,
ordinances, rules and regulations of any public authority at any time now or
hereafter applicable to the Premises and/or the Outdoor Balcony Area or any
activity therein or use thereof, and shall, at its expense, construct and
install any improvements which may be required from time to time by applicable
laws, ordinances, rules and regulations as a result of the use or occupancy of
the Premises and/or the Outdoor Balcony Area; including, without limitation,
reasonable accommodations to be made for Lessee’s employees, customers, or
invitees under the American’s With Disabilities Act, as amended (“ADA”).
Notwithstanding the foregoing, Lessor shall be responsible for complying with
laws, ordinances, rules and regulations, including the ADA, that apply, as of
the date Lessor tenders possession of the Premises to Lessee, to Lessor’s Work
performed pursuant to Section 7.2 and Exhibit “C” attached hereto. Lessee
further represents and warrants that all improvements installed or constructed
in the Premises by, or at the direction of, Lessee, together with all
alterations or additions thereto, shall comply with all applicable laws,
statutes, codes, and regulations, including, but not limited to, the ADA.

 

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6.7 Rules and Regulations. Lessee shall comply, and shall cause its subtenants
and occupants and their respective employees, agents, contractors, customers and
invitees to comply, with the rules and regulations for the Project, the
Underground Parking Facilities and the P-l Parking Structure (and adjacent
areas, if any, over which Lessor and Lessor’s tenants may be granted
non-exclusive use rights from time to time in the discretion of Lessor),
including those attached to this Lease as Exhibit “B” and with such
modifications and additions thereto as Lessor, in its reasonable discretion, may
hereafter make for the Building, the Project and adjacent areas, provided such
modifications or additions do not materially and adversely affect Lessee’s use
and occupancy of, and access to, the Premises. Any violation of such rules and
regulations by Lessee, its employees, agents, contractors, customers and
invitees, shall constitute a breach of this Lease. All amounts due from Lessee
to Lessor pursuant to such rules and regulations shall be paid within five
(5) business days after demand therefor by Lessor, and shall constitute
additional rental due under this Lease.
6.8 Project Signs; Interior Signage. Except as specifically set forth in this
Section 6.8, Lessee shall have no right to use the signs for the Project or to
use any interior or exterior surfaces of the Building or other portions of the
Project to identify Lessee’s business (including the interior or exterior
surfaces of plate glass):
6.8.1 Interior Signage. Subject to Lessee’s compliance with Lessor’s sign
criteria, (a) Lessee shall be permitted to list its name and suite number within
the Building (i) on the main interior directory in the lobby of the Building
(which shall be a “touch screen” type of directory), and (ii) on a directory in
the elevator area on the floor on which the Premises are located, and (b) Lessee
may install Building-standard suite entry signage at the entrance to the
Premises. The cost of all such signage for the Premises inside of the Building
shall be covered by, and included within, the Tenant Improvement Allowance;
provided that any subsequent changes to the information initially listed on
inside directories or to the signage (if necessitated by Lessee) shall be at the
expense of Lessee.
6.8.2 Intentionally Omitted.
6.9 Hazardous Substances. Lessee agrees that it will not use or allow the
Premises or the Outdoor Balcony Area to be used for the storage, use, discharge,
production, release, treatment or disposal of any “hazardous substance”, as that
term is defined under either the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C. 9601, et. seq., as amended
from time to time) or any other federal, state or local environmental law, rule,
regulation, order or directive now or hereafter existing (the “Environmental
Laws”) in violation of any Environmental Laws. Lessee shall otherwise comply at
all times with all Environmental Laws. Lessee shall immediately notify Lessor of
any hazardous substance on or about the Premises or the Outdoor Balcony Area,
any investigation by any governmental authority regarding the violation of any
Environmental Law, and any claims by third parties against Lessee relating to
the violation of any Environmental Law regarding the Premises or the Outdoor
Balcony Area. Lessee shall, at its expense, promptly remediate the same in
accordance with applicable Environmental Laws. Lessee shall otherwise comply at
all times with all Environmental Laws, and shall be responsible for all
liabilities, costs, and expenses arising from the foregoing or otherwise arising
from the business operations of Lessee or the acts or omissions of Lessee, its
agents, employees, or contractors.

 

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6.10 No Access to Roof. Lessee shall have no right of access to, or use of, the
roof of the Building.
6.11 Access. Lessee shall have reasonable access (subject to Exhibit “C” with
respect to phasing in elevator service) to the Premises 24 hours per day, seven
days per week, subject to Sections 8.1 and 8.2 regarding Building services,
Article 15 regarding damage and destruction, and the right of Lessor to impose
reasonable controls and security measures with respect to the Building.
7 CONDITION OF PREMISES; CONSTRUCTION.
7.1 Condition of Premises. Lessee acknowledges, represents and agrees to the
following: (i) Lessee shall be responsible for making its own inspection and
investigation of the Premises, the Building and other portions of the Project,
(ii) Lessee shall be responsible for investigating and establishing the
suitability of the Premises for Lessee’s intended use thereof, and all zoning
and regulatory matters pertinent thereto, (iii) Lessee is leasing the Premises
“AS IS” based on its own inspection and investigation and not in reliance on any
statement, representation, inducement or agreement of Lessor or its agents,
employees or representatives, except as expressly set forth in Section 7.2 below
or elsewhere in this Lease, (iv) the Premises, upon the earliest of Lessee’s
possession or Lessee’s entry therein to construct or install improvements, was
in good order and satisfactory condition, and (v) the Premises and Lessee’s
rights thereto under this Lease include only the interior space within the
Premises. Lessee’s rights do not include and Lessee has no rights to or
expectations of any improvements below floor level, above ceiling level, or
rights to any particular view or view corridor, any particular angle or degree
of sun or light exposure, or any particular air rights or corridor above or
around the Premises.
7.2 Construction. Subject to Section 2.3 and Article 26, Lessor shall, in the
exercise of reasonable diligence, perform the construction and/or installation
work provided for on Exhibit “C” attached hereto, if any. For purposes of this
Lease, possession of the Premises shall be deemed delivered or tendered to
Lessee upon Substantial Completion (as defined in Exhibit “C”) of Lessor’s Work
with respect thereto as set forth in Exhibit “C”, and Lessor has given Lessee
written notice thereof. Upon receipt of such written notice or upon any earlier
date Lessor and Lessee may agree upon (or as otherwise may be set forth in
Exhibit “C”), Lessee shall, in the exercise of reasonable diligence, perform the
installation work designated as “Lessee’s Work” in Exhibit “C”, subject to all
of the provisions of this Lease. The expense of all work specified in
Exhibit “C”, whether performed by Lessor or Lessee, shall be allocated between
the parties as specified on Exhibit “C”. In no event will (i) Lessor’s
obligations with respect to Lessor’s Work exceed the Tenant Improvement
Allowance set forth in the Basic Lease Information, or (ii) Lessor be
responsible for performing any other work or installing any other improvements
except for Lessor’s Work.

 

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8 BUILDING SERVICES.
8.1 Services. Subject to the rules and regulations attached to this Lease,
Lessor agrees to furnish to the Premises, during normal business hours (as
hereafter defined), janitorial service and elevator service, water and
electricity suitable for the intended use of the Premises, and heat and air
conditioning required in Lessor’s reasonable judgment for the comfortable use
and occupancy of the Premises. Lessor will furnish such utilities to the
Premises, upon reasonable prior notice from Lessee (as hereafter defined),
beyond normal business hours provided that Lessee shall pay an additional charge
(to be established by Lessor from time to time based on the number and size of
heat pumps and HVAC zones in the Premises and Lessor’s cost to operate its
energy management system and provide such after-hours service) within five
(5) business days after receipt of an invoice from Lessor. As used in this
Section, “normal business hours” shall mean 7:00 a.m. to 6:00 p.m., Monday
through Friday (except legal holidays), and 8:00 a.m. to noon on Saturday
(except legal holidays); and “reasonable prior notice from Lessee” shall mean
notice to Lessor by 1:00 p.m. on weekdays for service beyond normal business
hours for the next weekday, by 1:00 p.m. on Friday for such service on Saturday
or Sunday, or by 1:00 p.m. on the first business day immediately preceding a
holiday for such service on a holiday.
8.2 Interruption of Services. Lessor shall not be liable for, nor shall Lessee
be entitled to, any abatement or reduction of Rent or other amounts due
hereunder by reason of interruption in services to the Premises to the extent
caused by the acts of Lessee or other tenants of the Building or by any causes
beyond the reasonable control of Lessor, including without limitation the
following: (i) disruption for any cause or reason of electrical, water,
condensor water, sewer or telecommunication services, (ii) weather, casualty,
accidents, or breakage, (iii) installing or remodeling improvements, or making
repairs, (iv) strikes, lockouts or other labor disturbances or disputes of any
character, (v) as a consequence of the voluntary or mandatory compliance by
Lessor with any governmental or independent service operator orders, regulations
or directives to reduce electrical consumption, or (vi) by any other cause,
similar or dissimilar. It is expressly understood and agreed that except only
for Lessor’s reckless and intentional misconduct, Lessor shall have no liability
or responsibility under any circumstances for loss or damage, however occurring,
arising out of or incurred in connection with any failure of or interruption in
or failure to provide any services or utilities which Lessor is to provide
hereunder. Wherever heat generating machines or equipment are used in the
Premises which affect the temperature otherwise maintained by the air
conditioning system, Lessor reserves the right to install supplementary air
conditioning units in the Premises. The cost of such supplementary units,
including the cost of installation, operation and maintenance, shall be paid by
Lessee to Lessor within five (5) business days after demand by Lessor.

 

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8.3 Prohibitions; Excess Utilities. Lessee will not, without the prior written
consent of Lessor (which Lessor may withhold in its discretion), (i) use any
apparatus or device in the Premises which will increase the amount of water,
electricity (e.g. if expressly provided under this Lease, dedicated air
conditioning for computer server room during and after business hours),
condenser water for the Condenser Water System or other utilities otherwise
furnished or supplied for use of the Premises as general office space,
including, without limitation, computers and machines using current in excess of
110 volts; (ii) install any 220 volt outlets in the Premises (unless otherwise
specifically permitted by the provisions of Exhibit “C”), nor (iii) connect into
the electric current or the water supply except through existing electrical
outlets or existing water taps in the Premises. Lessor may cause water,
electric, condenser water or other utility measuring devices to be installed in
the Premises for the purpose of measuring the amount of water, electric current,
condenser water for the Condenser Water System or other utilities consumed for
any such purpose. The cost of any such meters and the installation, maintenance
and repair thereof shall be paid for by Lessee, and Lessee agrees to pay Lessor,
within five (5) business days after demand, for the cost of all water, electric
current, condenser water for the Condenser Water System or other utilities
consumed, as shown by said meters, at the rates charged for such services by the
suppliers thereof. If separate meters cannot be installed, Lessor shall have the
right to estimate the additional cost of the utilities utilized by Lessee and
charge the same directly to Lessee, who shall pay the same to Lessor within five
(5) business days after demand by Lessor.
8.4 Utility Deregulation.
8.4.1 Lessor Controls Selection of Power Provider. Lessor hereby advises Lessee
that presently APS (“Electric Service Provider”) is the utility company selected
by Lessor to provide electricity service for the Project. Notwithstanding the
foregoing, if permitted by law, Lessor shall have the right at any time and from
time to time during the Lease Term to either contract for service from a
different company or companies providing electricity service (each such company
shall hereinafter be referred to as an “Alternative Service Provider”) or
continue to contract for service from the Electric Service Provider.
8.4.2 Lessee Shall Give Lessor Access. Lessee shall cooperate with Lessor, the
Electric Service Provider, and any Alternative Service Provider at all times
and, as reasonably necessary, shall allow Lessor, Electric Service Provider, and
any Alternative Service Provider reasonable access to the electric lines,
feeders, risers, wiring, and any other machinery within the Premises; provided,
however, that Lessor shall endeavor to cause the Electric Service Provider or
Alternative Service Provider to minimize, to the extent reasonably possible
given the circumstances, its interference with electricity service to the
Premises and Lessee’s access to or permitted use of the Premises.
8.4.3 Lessor Not Responsible for Interruption of Utilities. It is expressly
understood and agreed that Lessor does not warrant or promise that any services
or utilities or any service or utility provider will be free from shortages,
failures, loss of availability, variations, changes in quality, character or
quantity, disruptions, defects, poor service, interference or interruptions
caused by or related to governmental requirements or requests, inability to
obtain services, so-called brown-outs, rolling black-outs, accidents, repairs,
maintenance, strikes, lockouts, labor controversies, replacements, alterations,
construction delays or interruptions, changes of or in service, or other causes;
or that such services or utilities will be suitable for Lessee’s requirements,
provided that Lessor shall at all times use commercially reasonable efforts (in
accordance with normal business practices) to ensure that there is no
interruption of such services or utilities to the Premises. Lessor shall have no
liability or responsibility for any loss, damage, cost or expense (however
incurred) sustained or incurred by Lessee or those

 

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claiming by, through or under Lessee, incidental to or arising out of any of the
foregoing unless caused by or due to Lessor’s reckless and intentional
misconduct. Lessor shall in no way be liable or responsible for any loss,
damage, or expense that Lessee may sustain or incur as a consequence of the
voluntary or mandatory compliance by Lessor with any governmental or independent
service operator orders, regulations, or directives to reduce electrical
consumption. Under no circumstances shall any of the foregoing be deemed an
actual or constructive eviction of Lessee or a disturbance of Lessee’s
possession, use or occupancy of any or all of the Premises, or entitle Lessee to
an abatement or diminution of rent or relieve Lessee from its obligations under
this Lease.
8.5 District Cooling Services. Lessor hereby advises Lessee that Lessor has or
may enter into an agreement with Northwind Rio Salado, LLC, or one or more other
companies (“Condenser Water Provider”) who will operate one or more district
cooling plants and other facilities to provide condenser water to the Project,
other portions of Hayden Ferry Lakeside and other areas. Lessor reserves the
right to tap into such condenser water lines for the benefit of the Building to
provide condenser water for the Building’s air conditioning system designed for
such purposes (“Condenser Water Systems”), and to pay any reasonable fees,
assessments or charges due to the Condenser Water Provider, and shall have the
right to include the same within the Operating Costs pursuant to Section 4.3
above.
8.6 Telecommunications Provider.
8.6.1 Any and all television, radio, telecommunications and voice and data
technology equipment, cabling, wiring, panels and other facilities required for
Lessee’s requirements (“Telecommunications Equipment”) shall be located solely
in the Premises, other than and except for any cabling and wiring (which shall
be Limited Combustible Cable) that provides connectivity from the Premises to
one or more intermediate demarcation points for telecommunication service
providers (the “IDF”) located in the Building and to the main telecommunications
demarcation point for the Project (the “MPOE”), which may be located in the
Building or elsewhere within the Project. Lessee shall only be permitted to
access the IDF and the MPOE with the prior consent of Lessor (and only in
accordance with such access control procedures implemented from time to time by
Lessor), for the limited purpose of confirming interconnection with the
facilities and equipment of the telecommunications service provider (“TSP”) that
provides services to the Premises. The number and type of lines allocated to
Lessee at the IDF and/or the MPOE shall be designated by Lessor, and shall not
be increased or added to without the prior written consent of Lessor. By its
acceptance of possession of the Premises, Lessee shall be deemed to have agreed
that the allocated number and type of lines serving the Premises are adequate
for Lessee’s occupancy.
8.6.2 Lessor, in its sole discretion, must approve any and all of Lessee’s
installers, contractors and vendors prior to commencement of installation and/or
connection of telecommunications lines from the MPOE and/or the IDF to the
Premises, and any such work shall be done at Lessee’s expense. Lessee shall
reimburse Lessor, within ten (10) days after written request, for the reasonable
cost of Lessor’s designated telecommunications manager with respect to
monitoring any installation work performed for Lessee requiring access to the
IDF and/or MPOE. None of the Telecommunications Equipment, wherever located,
shall interfere with the telecommunications equipment of any other tenant or
occupant of the Building or of any

 

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telecommunications service provider granted a right of access to the Building by
Lessor, and Lessee shall at all times during the term of this Lease cause its
Telecommunications Equipment to be operated within the technical and frequency
transmission and reception parameters specified by the equipment manufacturer
and any governmental license. If Lessee, its employees, agents or contractors,
should cause any measurable interference with any Building systems or equipment,
or the systems or equipment of any of the other tenants or occupants of the
Project, or of any telecommunications service provider that, with the permission
of Lessor, has installed equipment in the Building (collectively, “Approved
Telecommunications Facilities”), Lessor shall have the right, upon twenty-four
(24) hours verbal notice to Lessee, to disconnect any equipment or wiring
located outside the Premises until Lessee resolves the interference issues in a
manner satisfactory to Lessor. Lessee shall be liable to Lessor for, and shall
indemnify, defend and hold harmless Lessor from and against, any loss, claim,
damage, liability, fine, penalty, fee, cost and expense, including Lessor’s
reasonable attorneys’ fees and costs, incurred in connection with or arising
from any damage to or interference with any Approved Telecommunications
Facilities, and any riser infrastructure in the Building due to the act or
omission (negligent or otherwise) of Lessee, or any employee, agent or
contractor of Lessee.
8.6.3 Lessor reserves the right to limit the number of local exchange carriers
and competitive alternative telecommunications providers (collectively, “TSPs”)
having access to the Building’s riser system and infrastructure, and Lessor
reserves the right to charge TSPs for access to and use of the Building’s
telecommunications riser system and infrastructure, and to require, as a
condition to any such access or use, that the TSPs enter into a written
agreement with Lessor governing the terms and conditions of such access. Lessor
has the sole right to designate the risers and other vertical and horizontal
pathways to be utilized by TSPs and/or Lessee for access and connectivity to and
from the Premises, the IDF and the MPOE.
8.6.4 Lessee hereby waives any claim against Lessor for any claims, losses,
damages, liabilities, costs, fees, or expenses attributable to or resulting from
(i) any interruption of service, damage or interference with or to any of the
Telecommunications Equipment, except to the extent caused by the reckless and
intentional misconduct of Lessor, its agents or employees; provided, however, in
no event shall any such interruption, damage or interference entitle Lessee to
any consequential damages (including damages for loss of business), constitute
an actual or constructive eviction, in whole or in part, or relieve Lessee of
any of its obligations under this Lease, (ii) electromagnetic fields, or
(iii) the consequences of the operations of Lessee’s Telecommunication Service
Provider or other Telecommunication Service Providers.
8.6.5 Upon the expiration or earlier termination of this Lease, Lessee shall
remove, at its sole cost and expense (and by installers approved by Lessor as
hereinabove provided), all Telecommunications Equipment in the Premises and/or
exclusively serving the Premises, whether located at the IDF and/or along any
path of travel to the MPOE.
8.6.6 Lessee may install a wireless Internet communications network (also known
as “Wi-Fi”) within the Premises for the use of Lessee and its employees, but
Lessee shall at all times thereafter, at its expense, install “firewall”
protection and implement and utilize other commercially reasonable measures and
protocols designed to prevent its Wi-Fi system and usage from interfering with
the Wi-Fi systems of other tenants, occupants, or telecommunications service
providers within the Building.

 

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8.7 Access. Lessee will have access to the Premises and the Building as provided
in Section 6.11, subject to such security card or other monitoring system or
procedures for the Building as Lessor may establish from time to time in its
discretion. However, Lessor will not provide a security card access system for
the Premises; Lessee may do so, at its expense, if reasonably approved by Lessor
and if compatible with Lessor’s system for the Building.
9 MAINTENANCE AND REPAIR.
9.1 Lessor’s Obligations. Subject to the terms and conditions of this Lease and
to compliance by Lessee with its obligations hereunder, as a part of Operating
Costs, Lessor shall: (a) clean, maintain, repair, and replace subject to
reasonable wear and tear, (i) the common areas of the Building as described in
Section 6.5; (ii) the roof and structural elements of the Building (excluding
the Outdoor Balcony Area); (iii) building-standard plumbing and electrical
wiring and heating, ventilating and air conditioning systems and equipment; and
(iv) the exterior of the Building (except for Lessee’s signs, if any exterior
signs are specifically provided for in Section 6.8), including periodic cleaning
of exterior surfaces of windows (approximately four times per year); and
(b) provide Building-standard janitorial service for and in the common areas and
the Premises. “Building-standard” shall mean and include: (i) those items or
services provided by or through Lessor, with Lessor’s prior written approval and
in compliance with Lessor’s standard specifications for such items or services;
and (ii) those items installed by Lessor or by Lessee (with the prior written
approval and under the express direction of Lessor) in compliance with Lessor’s
standard specifications therefor, but shall not include any items installed by
Lessor or Lessee pursuant to Exhibit “C” attached hereto unless the same are
specifically designated therein by Lessor as Building-standard items. Lessor
shall have the right to recover, under Article 4 above, the cost of performing
its obligations under this Section 9.1. In no event shall Lessee be entitled to
undertake any such maintenance or repairs, whether at the expense of Lessee or
Lessor, and Lessee hereby waives the benefits of any law now or hereafter in
effect which would otherwise provide Lessee with such right.
9.2 Lessee’s Obligations. Unless such maintenance or repairs are specifically
designated as the obligation of Lessor under Section 9.1 above, and in addition
to Lessee’s obligations in Section 6.8 (with respect to exterior signs, if any
are specifically allowed pursuant to Section 6.8.2), Lessee shall, at its
expense, maintain or cause to be maintained the Premises and the Outdoor Balcony
Area in a safe and clean condition and in good order and repair, reasonable wear
and tear excluded, including, without limitation, the interior of the Premises,
all partitions and other interior improvements, all walls (including any
non-Building-standard exteriors of any walls or entryways of the Premises
adjacent to a lobby or hallway), all floor coverings (excluding vacuuming of
Building-standard floor coverings), Lessee’s Property, including Lessee’s
Telecommunications Equipment, all other telephone and other communication
systems, Lessee’s signs located in or on the Premises or the Building (whether
interior or exterior, if exterior signs are permitted in this Lease), all of
Lessee’s equipment and fixtures, and all related improvements and facilities,
and all of the following that are not Building-standard items: doors, trim,
molding, and other woodwork, lighting, draperies, wall coverings, window
coverings, ceilings and tiles, plumbing, doors, glass, cabinet work and

 

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shelving. Lessee shall also perform promptly, subject to Section 6.4, at its
expense, all maintenance or repairs with respect to the Premises and the Project
required because of any negligent or intentional acts or omissions of Lessee,
its agents, employees, contractors, customers or invitees, including without
limitation Lessee’s telecommunications provider. Lessee shall maintain, repair,
replace and remove, or shall cause its Telecommunications Provider to maintain,
repair, replace or remove, Lessee’s Telecommunications Equipment within the
Building or areas adjacent thereto in which Lessee has elected to install to
provide the telecommunications services it requires with respect to the Premises
in accordance with Section 8.6. Lessee shall perform its obligations under this
Section regardless of whether or not: (i) such portions of the Premises
requiring repair are reasonably or readily accessible, (ii) the means of making
the required repairs are convenient or reasonable, or (iii) the need for such
repairs occurs as a result of Lessee’s use, the elements or the age of such
portions of the Premises. Lessee’s obligations under this Section shall be
performed only by persons or contractors approved by Lessor.
10 ALTERATIONS TO PREMISES.
10.1 Lessor’s Prior Written Consent Required. Except as provided for on
Exhibit “C”, Lessee shall not make any alteration, addition or improvement to
the Premises or the Outdoor Balcony Area or to any fixture, wiring, plumbing,
lighting, heating, air conditioning or other equipment therein, or to any of
Lessee’s Telecommunications Equipment after installation in accordance with
Section 8.6, without the prior written consent of Lessor in each instance.
Lessor shall be entitled to impose any condition to such consent as it may deem
necessary or desirable (including, without limitation, the posting of bonds or
use of a contractor designated or approved by Lessor). Any alteration, addition
or improvement to which Lessor consents or which is required by law shall be
completed free of liens in a good and workmanlike manner in accordance with
plans, specifications and drawings approved in writing by Lessor, and in
compliance with all applicable laws, regulations and codes. Lessee shall timely
pay all costs and fees incurred by Lessee in connection with all alterations,
additions and improvements permitted or required hereunder. Notwithstanding the
foregoing, Lessee shall be entitled to make installations, alterations,
additions, or improvements within the Premises that are not visible outside the
Premises and cost less than Ten Thousand Dollars ($10,000.00) to complete for
the entire project (hard and soft costs), but only if they do not affect in any
way the structure of the Building and/or the mechanical, HVAC, plumbing,
electrical, or other systems of the Building, without obtaining the prior
written consent of Lessor, but Lessee shall provide written notice thereof to
Lessor with a description of the work at least ten (10) business days prior to
commencement of the proposed work so that Lessor can evaluate whether or not its
consent is required.
10.2 Alterations Become Part of Premises. Unless Lessor requires the removal
thereof upon the termination of this Lease, all such alterations, additions or
improvements to the Premises by Lessee (including, without limitation,
demolition of earlier improvements, construction or remodeling of interior
walls, doors, ceilings, built-in cabinetwork and shelving, lunchroom facilities,
and installation, remodeling or replacement of lighting, heating and air
conditioning equipment, electrical and telephone circuits, draperies, carpets
and other floor coverings, wall coverings, and interior glasswork) shall become
part of the Premises and the property of Lessor immediately upon installation
thereof. The foregoing shall not apply to

 

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Lessee’s Property, except that certain wires and cables constituting a part of
Lessee’s Telecommunications Equipment shall not be removed unless Lessee is
directed to do so by Lessor in a written notice to Lessee. Any alteration,
addition or improvement which Lessee is required or permitted to remove
hereunder (including Lessee’s Property) shall be removed at Lessee’s expense
immediately prior to the termination of this Lease, and Lessee shall promptly
repair any damage to the Premises or the Building (including without limitation
any damage to the Telecommunications Facilities or the telecommunications
equipment, wires and cables of other tenants and occupants of the Building to
the extent damaged or altered by the removal of Lessee’s Telecommunications
Equipment) caused by installation or removal of such alteration, addition or
improvement.
11 LIENS. Lessee shall keep the Premises, the Building and the Project free of
any liens arising out of any work performed, materials furnished or obligations
incurred by or on behalf of Lessee (or on behalf of Lessor if the same arise as
a result of Lessor’s performing an obligation of Lessee hereunder and Lessee
fails to reimburse Lessor immediately for the cost thereof). If any such lien is
filed, Lessee shall, within ten (10) days thereafter, cause the lien to be fully
discharged by either paying the obligation secured thereby or obtaining and
recording a payment bond in accordance with the provisions of Section 33-1004,
Arizona Revised Statutes. Lessee is not authorized to act for or on behalf of
Lessor as its agent, or otherwise, for the purpose of constructing any
improvements to the Premises, and neither Lessor nor Lessor’s interest in the
Premises shall be subject to any obligations incurred by Lessee. Lessor shall be
entitled to post on the Premises during the course of any construction by Lessee
such notices of non-responsibility as Lessor deems appropriate for its
protection. If Lessee fails to discharge fully any such lien within said 10-day
period, Lessor may (but without obligation) pay the entire claim secured by such
lien, and the amount so paid, together with reasonable attorneys’ fees and costs
incurred, shall be immediately due to Lessor, and Lessee shall pay the same to
Lessor with interest at the rate provided in Section 29.6 from the dates of
Lessor’s payments.
12 LESSOR’S ENTRY. In addition to any right of entry provided for in this Lease,
Lessor, its employees, agents and contractors, shall be entitled to enter the
Premises and/or the Outdoor Balcony Area at any reasonable time during normal
business hours for the purposes of (a) conducting any inspections thereof,
posting non-responsibility notices, making repairs, additions or alterations
thereto or to the Building, (b) showing the Premises to any prospective
purchaser, lessee, mortgagee or insurer, and (c) taking necessary action in the
event of any emergency. In connection with such entry, Lessor shall be entitled
to erect such scaffolding and other necessary structures or equipment as
reasonably required by the character of the work to be performed, provided that
Lessor shall not unreasonably interfere with the conduct of Lessee’s business or
materially interfere with the use of, or access to, the Premises. No entry by
Lessor hereunder shall entitle Lessee to terminate this Lease or to a reduction
or abatement of rental or other amounts owed by Lessee hereunder nor to any
claims for damages. Lessor shall have the right to retain at all times keys to
all doors within and into the Premises. No lock shall be changed without the
prior written consent of Lessor. Lessor shall be entitled to use in good faith
any means to gain entry to the Premises in the event of an emergency and shall
not be liable for any damages resulting therefrom.

 

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13 INDEMNITY.
13.1 Lessee. Subject to the provisions of Section 14.3 hereof, Lessee shall
indemnify, defend, and hold Lessor, its current and former members, or any of
the current or former directors, officers, employees, members, or partners of
Lessor or its current and former members, harmless against any and all claims,
liabilities, costs, attorneys’ fees, expenses, penalties or demands of any
nature arising from (i) Lessee’s use of the Premises, or from the conduct of
Lessee’s business thereon or from any activity, work or things done, permitted
or suffered by Lessee or any subtenant, or their respective agents, employees or
contractors in or about the Premises, the Outdoor Balcony Area, the Building, or
the Project, including without limitation, any work performed by and/or the acts
and omissions of the Telecommunications Provider in the Premises or the
Telecommunications Facilities or other portions of the Building or the Project,
and/or (ii) any breach or default in the performance of any obligation or
covenant on Lessee’s part to be performed under the terms of this Lease
(including without limitation Lessee’s obligations under Section 6.9), or
(iii) any negligence or willful misconduct of Lessee, or any of Lessee’s
subtenants, or their respective agents, contractors, employees, licensees,
occupants, customers or invitees; and from and against all costs, attorneys’
fees, environmental consultants’ fees, expenses and liabilities incurred in the
defense of any such claim or any action or proceeding brought thereon. If any
claim, action or proceeding is threatened or commenced against Lessor which is
or may be covered by the foregoing indemnity, Lessee, upon notice from Lessor,
shall defend the same at Lessee’s expense utilizing counsel reasonably
acceptable to Lessor.
13.2 Lessor. Subject to the provisions of Section 14.3 hereof, Lessor shall
indemnify, defend, and hold Lessee harmless against any and all claims,
liabilities, costs, attorneys’ fees, expenses, penalties or demands of any
nature arising from or relating to Lessor’s or its agents, contractors, or
employees’ reckless and intentional misconduct, except to the extent arising
from the negligence or willful misconduct of Lessee, its agents, employees or
contractors. If any claim, action or proceeding is threatened or commenced
against Lessee which is or may be covered by the foregoing indemnity, Lessor,
upon notice from Lessee, shall defend the same at Lessor’s expense.
14 INSURANCE.
14.1 Types of Insurance. Lessee, at its sole cost and expense, shall procure and
maintain during the Lease Term hereof in the amounts set forth in Article XVII
of the Basic Lease Information:
14.1.1 Commercial general liability insurance with a fire legal liability
endorsement providing coverage against claims for bodily injury, death, property
damage, or fire damage liability occurring in, on or about the Premises, the
Outdoor Balcony Area, the elevators, the adjoining sidewalks and passageways, or
any of the Parking Facilities or resulting from Lessee’s use, occupancy or
maintenance thereof, which policy shall name Lessor (and any first mortgagee or
first beneficiary under a deed of trust of record against the Building or the
Project) as additional insured parties. Such insurance shall be primary with
respect to Lessor and shall be in the amount stated in the Basic Lease
Information (which amount may be increased to commercially reasonably higher
levels by Lessor from time to time after the first thirty-six (36) months of the
Lease Term). Any commercial general liability insurance carried by Lessor shall
apply in excess of the primary coverage required herein to be carried by Lessee.

 

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14.1.2 Insurance on an “ISO Special Form” basis providing coverage against
damage and destruction to Lessee’s Property (as defined in Section 23.1),
including Lessee’s Telecommunications Equipment (and all related facilities and
lines), and any improvements, additions and other alterations to the Premises
which Lessee installs or constructs in the amount of full replacement value. If
such items are damaged or destroyed, Lessee shall bear all risk of loss with
respect thereto. Lessee hereby waives as against Lessor any and all claims or
demands whatsoever pertaining to damage, loss or injury caused by or resulting
from fire or other perils, events or occurrences which are or could have been
covered by insurance.
14.1.3 Business interruption insurance in amounts adequate to cover, in addition
to Lessee’s other business expenses, payment of Base Rental and Lessee’s
Pro-Rata Share of Operating Costs for a 12-month period.
14.1.4 Worker’s compensation coverage in the amounts required by law.
14.2 Notice of Insurance. All insurance provided for in this Article shall be
effected under valid and enforceable policies issued by insurance companies
rated not lower than “A” and in the Class XII Financial Size category in Best’s
Insurance Reports (current edition) and authorized to do business in the State
of Arizona. Such policies shall be endorsed to indicate that Lessee’s coverage
shall not be invalid due to any act or omission by Lessor. The policies shall
further be endorsed to indicate that such policies shall cover Lessee’s
obligations pursuant to Article 13 up to the limits of such policies. The
insurance companies issuing such insurance shall agree to notify Lessor in
writing of any cancellation, reduction in coverage, changing types of coverage,
or non-renewal of said insurance at least thirty (30) days prior thereto. Lessee
shall deliver to Lessor, within fifteen (15) days after execution of this Lease,
or prior to entering the Premises for any purpose, whichever is first to occur,
certificates evidencing the insurance coverage required herein and confirming
that the premiums therefor have been paid in full. Said certificates shall also
include a footnote referring to this Lease and certifying that the policy or
policies issued to Lessee comply with all of the provisions of this Article 14.
If Lessee fails to obtain the insurance required herein and deliver said
certificates to Lessor as provided above, Lessor shall be entitled, but without
obligation, to obtain said policies at Lessee’s expense.
14.3 Waiver. Notwithstanding any other provisions in this Lease, Lessee and
Lessor hereby waive any and all rights of recovery against the other, or against
the officers, employees, agents and representatives of the other, for loss of,
or damage to, the waiving party or its property or the property of others under
its control to the extent that such loss or damage arises out of a cause against
which Lessor or Lessee does maintain or is required to maintain insurance
pursuant to this Lease. Lessee shall, upon obtaining the policies of insurance
required hereunder, give notice to the insurance carrier or carriers of the
waiver of subrogation set forth in this Lease and shall obtain, at Lessee’s
expense, an appropriate waiver of subrogation endorsement from the insurer. If
the Premises, the Outdoor Balcony Area, the Building, the Project, or Lessee’s
Property are damaged or destroyed by fire or any other cause against which
Lessee is required to maintain insurance pursuant to this Lease, Lessor shall
not be liable to Lessee for any such damage or destruction.

 

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15 DAMAGE OR DESTRUCTION.
15.1 Termination. If the Premises or any portion thereof are damaged or
destroyed by any cause, Lessor shall reasonably determine, within forty-five
(45) days after such casualty, whether it would take more than one hundred
twenty (120) days from the date of such damage or destruction to repair the
same. If Lessor determines that greater than one hundred twenty (120) days would
be required to repair such damage or destruction, then Lessor shall be entitled
to terminate this Lease by written notice to Lessee within said 45-day period,
which termination shall be effective ten (10) days after receipt. The foregoing
notwithstanding, if all or part of the Premises and/or the Building are damaged
or destroyed and Lessor, upon inspection, reasonably determines that (i) the
cost of repairing the Premises will exceed ten percent (10%) of the replacement
cost of the Premises and such damage is not covered by insurance maintained by
or payable to Lessor, or (ii) the cost of repairing the Premises or the Building
will exceed twenty-five (25%) of the respective replacement cost thereof and
such damage occurs within the last twenty-four (24) months of the Lease Term, or
(iii) the Building is damaged to an extent greater than twenty-five percent
(25%) of its replacement value (whether or not the Premises are damaged or
destroyed), then Lessor shall be entitled to terminate this Lease by written
notice to Lessee given on or before sixty (60) days after the occurrence of such
casualty, which termination shall be effective ten (10) days after receipt.
15.2 Repair. If this Lease is not terminated as provided above, the damage to
the Premises shall be repaired as follows:
15.2.1 Lessee shall promptly repair, at its expense, any damage to Lessee’s
Property and any improvements, additions and other alterations installed or
constructed by Lessee.
15.2.2 Lessor shall have the option of repairing any damage caused by any act or
neglect of Lessee or its employees, agents, contractors, or invitees and shall
charge to Lessee all costs and expenses incurred in connection therewith
(including a service fee for Lessor equal to fifteen percent (15%) of all sums
expended by Lessor in performing or supervising the repairs). Lessee shall pay
the same within five (5) days after presentment of a statement to Lessee
indicating the amount thereof If Lessor elects not to repair the damage, Lessee
shall promptly repair the damage at its expense.
15.2.3 Lessor shall repair with reasonable diligence, at its expense, the damage
not specified in subsections 15.2.1 and 15.2.2 above.
All repairs performed pursuant to this Section shall be performed in a good and
workmanlike manner, in accordance with plans and specifications approved by
Lessor, and in compliance with applicable laws, regulations and building codes.
Lessor shall have the right to designate or approve the contractors performing
repairs required to be made by Lessee and shall have the right to require Lessee
to post such bonds as Lessor deems necessary, including furnishing to Lessor
evidence of compliance with Section 33-1003, Arizona Revised Statutes, or such
successor statute as may then be in effect.

 

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15.3 No Abatement of Rent. Upon any damage or destruction that Lessor is
required hereunder to repair, reconstruct or restore, Base Rental shall be
proportionately abated until the completion of such repairs, reconstruction or
restoration in an amount equal to the proportion of which the number of square
feet of Rentable Area in the Premises rendered untenantable bears to the
Rentable Area of the Premises immediately prior to such damage and destruction.
Notwithstanding the foregoing, (i) such abatement shall only be to the extent
Lessee does not receive payment under its business interruption insurance policy
required under Section 14.1.3 of this Lease, and (ii) Base Rental shall not
abate if such damage or destruction was caused by the negligent or intentional
act or omission of Lessee, its agents, employees, customers, contractors,
invitees or licensees, or if Lessee shall not have been open for business with
the public for the ten (10) day period prior to such casualty. Except as
expressly set forth herein, Lessee shall not be entitled to terminate this Lease
or to receive a reduction or abatement of any rental or other sums payable
hereunder in the event of any damage or destruction from any cause whatsoever.
16 CONDEMNATION.
16.1 Termination. If the Premises or any portion thereof are taken under power
of eminent domain or conveyed by Lessor under the threat thereof (a
“Condemnation”), this Lease shall automatically terminate as to the part so
taken as of the date of Condemnation. If a portion of the floor area of the
Premises, or all or a substantial portion of the parking area within the Project
(including the P-l Parking Structure and the Underground Parking Facilities), is
taken by Condemnation, and Lessor reasonably determines that it would not be
economically feasible for Lessee to utilize the Premises for the purposes for
which the same were being used at the time of said taking, then Lessor may
terminate this Lease as of the date of condemnation by giving written notice
thereof to Lessee on or before twenty (20) days after said date. If more than
twenty-five percent (25%) of the floor area of the Building and/or more than
twenty-five percent (25%) of the land area of the entire Project is taken by
Condemnation (regardless of whether or not any portion of the Premises is
taken), then Lessor shall be entitled to terminate this Lease as of the date of
Condemnation by written notice to Lessee on or before twenty (20) days after
said date.
16.2 Abatement of Rent. In the event of Condemnation of only a portion of the
Premises, Base Rental, Lessee’s Pro-Rata Share of Operating Costs, and Lessee’s
parking obligation and rights shall also be reduced in proportion to the amount
of Rentable Area taken.
16.3 Award. Lessor shall be entitled to the entire Condemnation award for any
partial or entire taking of the Premises, the Building, or the Project,
including any award for the leasehold estate created hereby, and Lessee hereby
waives any claim with respect thereto; provided that Lessee may seek a separate
award from the taking authority (and not from Lessor), in Lessee’s own name, for
any damages to Lessee’s business (excluding the loss of its leasehold estate)
and any costs incurred by Lessee in removing Lessee’s Property.
16.4 Restoration. If only a part of the Premises is condemned and this Lease is
not terminated pursuant hereto, then Lessor shall, in the exercise of reasonable
diligence and its own cost, restore the Premises to its previous condition as
nearly as is reasonable under the circumstances. In no event, however, shall
Lessor be obligated to commence such restoration until it has received the
entire Condemnation award and in no event shall Lessor be obligated to incur
restoration expenses in an amount greater than such award, less costs, expenses
and fees (including attorneys’ fees and costs) incurred by Lessor in collecting
such award.

 

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16.5 Date of Condemnation. The date of Condemnation, for the purposes hereof, is
the earlier of the date (i) possession of the property subject to Condemnation
is delivered to the taking authority, or (ii) title is vested in the taking
authority.
17 QUIET ENJOYMENT. If Lessee pays all Rent and other sums payable hereunder and
performs all of its other obligations hereunder, Lessor shall take no action to
disturb Lessee’s peaceable and quiet possession of the Premises during the term
hereof. This covenant is a covenant as to title only and shall not extend to,
and Lessor shall not be liable for, any disturbance, act, condition or damage
caused by any other tenant or occupant in the Project or anyone not otherwise
claiming by or through Lessor, nor to any disturbance, act or condition
permitted to be taken by or on behalf of Lessor under this Lease.
18 ESTOPPEL CERTIFICATE. Upon receipt of a written request from Lessor, Lessee
shall, from time to time, and within ten (10) business days after receipt of
such request, execute, acknowledge and deliver to Lessor a statement in writing
(a) certifying that this Lease is unmodified and in full force and effect (or,
if modified, stating the nature of such modification and certifying that this
Lease, as so modified, is in full force and effect) and the dates to which the
Rent and other charges are paid in advance, if any, (b) acknowledging that there
are no uncured defaults on the part of Lessor, or specifying such defaults if
any are claimed, and (c) certifying or acknowledging any other matters that
Lessor and/or its prospective purchaser or lender may reasonably request for
certification or acknowledgment. Any such statements may be relied upon by
Lessor and any prospective purchaser or encumbrancer of all or any portion of
the Premises, the Building, or the Project. Lessee’s failure to deliver such
statement within such time period shall be conclusive against Lessee that
(i) this Lease is in full force and effect, without modification except as may
be represented by Lessor, (ii) there are no uncured defaults in Lessor’s
performance, and (iii) not more than one month’s rent has been paid in advance;
and/or Lessor may elect to declare Lessee in default as provided in
Section 29.1.6.
19 MASTER LEASE, LENDER, SUBORDINATION.
19.1 Master Lease. Pursuant to all of the terms and conditions of that Lease
executed by the City of Tempe, an Arizona municipal corporation (“City”), as
lessor, and Hayden Ferry Lakeside LLC, an Arizona limited liability company, as
lessee, as may be amended from time to time (“Master Lease”) for purposes of
providing tax abatement benefits to Lessor for the Building, fee title to the
Building and certain land area has been conveyed to the City and leased back to
Lessor. Lessor warrants, covenants and agrees that the Master Lease grants
Lessor full right and authority to lease the Premises to Lessee as provided in
this Lease, and Lessee’s right to occupy and use the Premises will be subject to
the covenant of quiet enjoyment in its favor set forth in Article 17 of this
Lease. When title to the Building is transferred to the City, this Lease shall
constitute a sublease. Lessee, at the request of the City, shall deliver to the
City an agreement, in form and substance satisfactory to the City, whereby
Lessee shall agree that (i) no action taken by the City to enforce the Master
Lease, including without limitation any termination thereof, shall terminate
this Lease or invalidate any of the terms hereof and, (ii) upon termination of
the Master Lease after default by Lessor, Lessee will recognize the City as
Lessor hereunder for the balance of the Lease Term, provided that the City also
agrees that Lessee’s possession will not be disturbed by the City as long as
Lessee pays the Rent and other sums payable hereunder and performs all of the
other covenants of Lessee to be performed hereunder.

 

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19.2 Lease Subordinate to Liens. This Lease and the rights of Lessee hereunder
shall be, at the option of Lessor to be exercised from time to time, either
subject and subordinate to, or superior to, the lien of any mortgages, deeds of
trust, security agreements or other security instruments now or hereafter placed
on or against the land and/or the Building and/or other improvements comprising
the Project (and all extensions, modifications, renewals and refinancings
thereof) without the necessity of executing and delivering any other or further
instruments on the part of Lessee to effectuate such subordination; provided,
however, that Lessor shall, upon Lessee’s written request with respect to each
and any such mortgages, deeds of trust, security agreements or other security
instruments, exercise commercially reasonable efforts to cause the mortgagee,
deed of trust beneficiary or secured party (“Mortgagee”) to deliver to Lessee a
subordination, non-disturbance and/or attornment agreement in a form generally
used by such Mortgagee for such purposes. Lessee hereby agrees, at the written
request of the purchaser of the Lessor’s interest pursuant to such foreclosure
or other proceedings (or a conveyance in lieu thereof), to attorn to such
purchaser or, at such purchaser’s option, to enter into a new lease for the
balance of the term hereof upon the same terms and provisions as are contained
in this Lease. Notwithstanding the foregoing, Lessee shall execute and deliver
such instrument or instruments evidencing such subordination of this Lease to
the lien of any such mortgages, deeds of trust or other security instruments as
may be requested by Lessor within ten (10) business days after Lessee’s receipt
of such request. If Lessee fails, neglects or refuses to execute and deliver any
such instruments within ten (10) business days after receipt of written notice
to do so together with the instruments to be executed by it, Lessee hereby
irrevocably appoints Lessor, its successors and assigns, as the attorney in fact
of Lessee to execute and deliver any and all such instruments for and on behalf
of Lessee, and/or Lessor may declare Lessee in default as provided in
Section 29.1.6. The power of attorney granted herein is a power coupled with an
interest.
20 ASSIGNMENT AND SUBLETTING.
20.1 Lessor’s Consent Required. Lessee shall not convey, transfer, sublease,
assign, hypothecate, encumber, or otherwise dispose of this Lease or any right,
title or interest therein (including without limitation with respect to Parking
Spaces), whether voluntarily or by operation of law (“Transfer”), and without
the prior written consent of Lessor, which may be withheld in Lessor’s sole
discretion. Any such Transfer shall be void and/or shall terminate this Lease at
the option of Lessor. In no event (i) shall Lessee be entitled to sublease the
Premises or assign this Lease so that the Premises are occupied by more than one
(1) tenant, nor (ii) shall Lessee be entitled to sublease the Premises or assign
this Lease to any other tenant in the Building. If Lessor consents to any
Transfer, Lessor may impose on Lessee or the transferee such conditions as
Lessor, in its sole and absolute discretion, deems appropriate. Lessee’s request
for consent to a Transfer must describe in reasonable detail the parties
involved, the financial condition of the proposed transferee, the proposed use
of the Premises, the consideration to be paid by the proposed transferee, and
other terms and conditions of the proposed Transfer, and Lessee upon written
request from Lessor, shall provide to Lessor any additional information Lessor
deems reasonably necessary to evaluate and consider the proposed

 

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Transfer or proposed transferee. Lessor shall also have the option, in its sole
and absolute discretion, to elect to terminate this Lease and recapture the
Premises by giving Lessee written notice of Lessor’s election to terminate
within fifteen (15) business days after Lessor receives Lessee’s written request
for approval of the proposed Transfer (or, at the option of Lessor, within
fifteen (15) business days after Lessor receives all information to be provided
as set forth in the preceding sentence). The consent by Lessor to any Transfer
shall not be construed as a consent to any other Transfer. If Lessor approves
any Transfer by Lessee, it is hereby agreed by Lessor and Lessee that Lessee
shall not realize any financial gain resulting from any increase in the rental
value of the Premises. Therefore, as a condition of any Transfer, it is agreed
by the parties that Lessor shall receive all net consideration due or to become
due to Lessee from any assignee, sublessee or transferee with respect to such
Transfer, including, without limitation, the full and complete rental payments
and other compensation paid by such assignee, sublessee, or transferee in excess
of Lessee’s financial obligations set forth in this Lease, measured on a square
foot basis with respect to the Rentable Area involved.
20.2 No Release of Lessee. Regardless of whether Lessor’s consent is granted, no
Transfer shall release Lessee or Guarantor, of Lessee’s obligations hereunder or
alter the primary liability of Lessee to pay the Rent and to perform all other
obligations to be performed by Lessee hereunder. The acceptance of Rent by
Lessor from any other person shall not be deemed to be a waiver by Lessor of any
provision hereof. Upon a default by any assignee or successor of Lessee in the
performance of any of the terms hereof, Lessor may proceed directly against
Lessee without the necessity of commencing or exhausting remedies against said
assignee or successor.
20.3 Attorneys’ Fees. If Lessor is asked to consent to a Transfer under
Section 20.1 hereof, Lessee shall reimburse Lessor for reasonable attorneys’
fees incurred by Lessor in connection with considering whether to give such
consent, including for the review, negotiation, and preparation of all related
documents, and payment thereof to Lessor shall be due whether or not consent is
granted, and receipt of payment in full by Lessor shall be a condition precedent
to the effectiveness of Lessor’s consent, if granted.
20.4 Corporations, Associations and Partnerships. If Lessee is a corporation, a
limited liability company (“LLC”), an unincorporated association, or a
partnership, the transfer, assignment, or hypothecation of any stock membership
or other interest in such corporation, LLC, association or partnership in the
aggregate in excess of twenty-five (25%) shall be deemed a Transfer within the
meaning of this Article 20.
20.5 No Merger. The voluntary or other surrender of this Lease by Lessee, a
mutual cancellation of this Lease, or the termination of this Lease by Lessor
pursuant to any provision contained herein, shall not work a merger, but, at
Lessor’s option, shall either terminate any or all existing assignments or
subleases hereunder, or operate as an assignment to Lessor of any such
assignments or subleases.
21 SUBSTITUTION OF PREMISES. Lessor may, at its election, upon at least thirty
(30) days written notice to Lessee, substitute other premises (the “Substituted
Premises”) within the Building for the Premises hereinabove described, subject
to the following terms and conditions:

 

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21.1 The Substituted Premises shall contain approximately the same square
footage and comparable tenant improvements as the original Premises;
21.2 Lessor shall reimburse Lessee for all reasonable out-of-pocket moving
expenses actually incurred by Lessee as a direct result of Lessee’s move to the
Substituted Premises;
21.3 Upon the date specified by Lessor, which shall be at least thirty (30) days
after Lessee receives notice of the substitution, the Substituted Premises shall
become the Premises subject to this Lease for all uses and purposes, and this
Lease shall no longer apply to or affect the original Premises, except for
obligations and liabilities accrued as of said date;
21.4 Lessee shall fully and completely cooperate with Lessor in exercising
Lessor’s rights hereunder and shall comply with all reasonable requests
submitted by Lessor in an effort to minimize disruptions during such transition;
and
21.5 Prior to the substitution as provided for in this Article, but in any event
within the 30-day period referred to above, Lessee shall execute an amendment to
this Lease stating that such substitution will occur and that all terms and
provisions of this Lease will be fully applicable with regard to the Substituted
Premises.
22 ABANDONMENT OF PREMISES. If Lessee abandons, vacates or surrenders the
Premises or is dispossessed by process of law or otherwise, Lessee’s Property
remaining on the Premises shall be deemed abandoned and, at the option of
Lessor, may be kept or disposed of by Lessor as provided in Section 23.2 hereof.
Except where the Premises is closed for business for no longer than thirty
(30) days due to repair, maintenance, construction, remodeling or other similar
work being carried out in the Premises as provided and/or permitted in this
Lease, the failure of Lessee to be open for business in the Premises for a
period of ten (10) consecutive business days or longer shall constitute an
abandonment of the Premises.
23 LESSEE’S PROPERTY.
23.1 Lessee’s Property. The term “Lessee’s Property,” as used in this Lease, is
defined as those items specifically designated as Lessee’s Property on
Exhibit “D” attached hereto, Lessee’s Telecommunication Equipment, and related
facilities, and any furniture, trade fixtures, equipment and personal property
installed in, on or about the Premises or the Outdoor Balcony Area by Lessee at
Lessee’s expense, such as freestanding cabinetwork and casework, metal storage
units, signs, office machines, data processing equipment, monitoring devices and
chests, kitchen appliances (if permitted by this Lease), office supplies and
other items of personal property which are not attached or built in. In no event
shall Lessee be entitled to use any part of the Tenant Improvement Allowance to
acquire and/or install Lessee’s Property.
23.2 Removal. Unless Lessee is in default hereunder, Lessee may remove any of
Lessee’s Property (except cables and wires designated by Lessor pursuant to
Section 10.2) immediately upon the expiration or termination of this Lease, and
shall immediately repair all damage to the Premises, the Outdoor Balcony Area,
the Building, or the Project in any way resulting from such removal. However,
any of such Lessee’s Property remaining on the Premises or the Outdoor Balcony
Area upon such expiration or termination shall, at Lessor’s option, become the
property of Lessor, or Lessor may dispose of the same, as attorney in fact for
and at the expense of Lessee, and as Lessor may deem appropriate in its
discretion and retain the proceeds therefrom. The power of attorney granted
herein is a power coupled with an interest. Lessee shall promptly repair, in a
good and workmanlike manner, at its own expense, any damage to the Premises or
the Building caused by the installation or removal of Lessee’s Property.

 

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23.3 Taxes. Lessee shall pay, prior to delinquency, all taxes assessed against
or levied upon Lessee’s Property. Lessee shall cause Lessee’s Property to be
assessed and billed separately from the real property of which the Premises are
a part. If any or all of Lessee’s Property is assessed and taxed with said real
property, Lessee shall pay to Lessor its share of such taxes, as determined by
Maricopa County Assessor, within ten (10) days after delivery to Lessee of a
statement in writing setting forth the amount due together with a copy of the
tax bill or other reasonable documentation supporting the claim.
24 SURRENDER. Upon the expiration or termination of this Lease for any reason,
Lessee shall immediately and peaceably surrender the Premises and the Outdoor
Balcony Area to Lessor in a safe and clean condition and in good order and
repair, normal wear and tear excepted. If Lessee fails to surrender the Premises
and the Outdoor Balcony Area upon the expiration or termination of this Lease,
then, in addition to the rights of Lessor in Section 2.5, Lessor shall have the
immediate right to re-enter the Premises and the Outdoor Balcony Area and act in
accordance with Section 29.2.1 hereof. No act or conduct of Lessor, whether
consisting of the acceptance of the keys to the Premises, or otherwise, shall be
deemed to be or constitute an acceptance by Lessor of the surrender of the
Premises by Lessee prior to the expiration of the Lease Term unless Lessor
provides Lessee with a written acknowledgment of acceptance of surrender signed
by Lessor.
25 PARKING.
25.1 Surface Parking. Lessee acknowledges that limited surface parking is
available within the Project and that Lessee’s invitees will be entitled to use
the same on a nonexclusive basis for loading and unloading passengers and for
short term parking for periods of time designated by Lessor, provided that
(i) Lessor may grant or permit exclusive use of portions of such surface parking
area (not to exceed fifty percent (50%) of the available spaces) for the benefit
of other tenants or occupants within or adjacent to the Project, and may install
or permit the installation of parking meters for some or all of such surface
parking area, and (ii) Lessee shall in any event cause its employees to park
outside of the Project or in the Underground Parking Facilities or the P-l
Parking Structure (as those terms are hereinafter defined) pursuant to a parking
agreement with the owner or manager thereof, and (iii) the surface parking areas
shall be used only for the parking of automobiles and small trucks but in no
event shall recreational vehicles, boats or trailers be allowed while doing
business at the Project or otherwise, and no parking beyond the time limits
posted by Lessor with respect thereto shall be allowed.

 

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25.2 P-l Parking Structure; Underground Parking Facility. Lessor has developed a
multi-floor parking structure designated “P-l” on Exhibit “A-1” attached hereto
to the south and east of the Building (“P-1 Parking Structure”), and an
underground parking area below the Building and other portions of the Project
(“Underground Parking Facilities”), which will be owned by Lessor, an Owners’
Association, or another entity (and the owner of each parking facility will be
referred to herein as a “Parking Facility Owner”). As used in this Lease, the
term “Parking Spaces” refers to parking spaces existing from time to time in the
P-l Parking Structure or the Underground Parking Facilities. If Parking Spaces
for the P-l Parking Structure and/or the Underground Parking Facilities are
allocated to Lessee in the Basic Lease Information, then the number stated
therein are hereby granted to Lessee as therein provided at the monthly rental
per space set forth in the Basic Lease Information, and Lessee shall be entitled
to use such Parking Spaces unless and until it fails to pay the monthly rental
for such Parking Spaces when due, which shall constitute a default under this
Lease, and such use rights shall be immediately suspended until all such monthly
rental is paid in full and shall permanently terminate if such monthly rental is
not paid within the grace period set forth in Section 29.1.2. In addition,
Lessee’s right to use the Parking Spaces allocated to Lessee in the Basic Lease
Information shall be expressly subject to the following:
25.2.1 Effective January 1, 2009, and each January 1 of each year thereafter,
Lessor or other Parking Facility Owner (or their respective managers) shall have
the right to increase from time to time the monthly rental for the Parking
Spaces designated in the Basic Lease Information at a rate not to exceed the
greater of (i) four percent (4%) per annum (compounded annually), or (ii) the
increase over the course of the previous calendar year(s), if any, in the
Consumer Price Index for all urban consumers, U.S. City Average, published by
the United States Department of Commerce (base year 1982-1984 = 100) or any
successor index thereto as hereinafter provided (“CPI”). If publication of the
CPI is discontinued, or if the basis of calculating the CPI is materially
changed, then Lessor shall substitute for the CPI comparable statistics as
computed by an agency of the United States Government or, if none, by a
substantial and responsible periodical or publication of recognized authority
most closely approximating the result which would have been achieved by the CPI,
and any reference in this Lease to “CPI” shall be deemed to refer thereto. If
Lessor elects in its discretion not to increase parking rates for any given
calendar year of the Lease Term, Lessor does not waive its right to do so in
later years at a rate that equals the total increase in the CPI for all
preceding calendar years, or four percent (4%) per annum compounded, as the case
may be.
25.2.2 If the Parking Facility Owner for all or a portion of the Parking Spaces
is at any time not Lessor, Lessee shall, within thirty (30) days after written
direction from Lessor to do so, enter into a separate parking agreement with the
Parking Facility Owner, or its manager, providing for the number of Parking
Spaces at the monthly rental set forth in the Basic Lease Information, which
shall be subject to increase from time to time as provided in Section 25.2.1,
and such other terms reasonably required by the Parking Facility Owner or its
manager. Upon execution of such separate agreement, Lessor shall be relieved of
all further responsibility under this Lease with respect to the Parking Spaces
covered by said agreement.
25.2.3 Intentionally Omitted.
25.2.4 The P-1 Parking Structure and Underground Parking Facilities shall only
be used for the parking of automobiles and small trucks (but in no event shall
recreational vehicles, boats or trailers be allowed) and shall be subject to
size limitations established from time to time by each Parking Facility Owner.

 

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25.2.5 The Parking Spaces in the P-1 Parking Structure as designated in the
Basic Lease Information shall be available for use during “normal business
hours” of the Building, which shall mean 7:00 a.m. to 6:00 p.m., Monday through
Friday (except legal holidays), and 8:00 a.m. to noon on Saturday (except legal
holidays). Parking access cards for the Parking Spaces allocated to Lessee will
entitle the holder to obtain access to the P-1 Parking Structure and/or the
Underground Parking Facilities during and after normal business hours, but
reserved Parking Spaces in the P-1 Parking Structure will only be available
during normal business hours Monday through Friday (except legal holidays).
After such normal business hours, holders of parking access cards will be
allowed to use the parking access cards to obtain access to the P-1 Parking
Structure, but will not be guaranteed the use of the Parking Spaces therein,
including reserved Parking Spaces. Lessee is hereby advised that the P-1 Parking
Structure will be available for public use both during and after normal business
hours and that sporting events or other activities in the vicinity of Hayden
Ferry Lakeside may create a significant demand for spaces within the P-1 Parking
Structure.
25.2.6 The Parking Spaces in the Underground Parking Facilities will not be
available to the public during or after normal business hours or on legal
holidays.
25.2.7 Lessee will not park, or permit its employees or contractors to park, in
any areas designated by a Parking Facility Owner or its manager for parking by
visitors to the Project or for the exclusive use of other tenants or occupants
of the Project.
25.2.8 Any parking access cards, parking stickers or other devices or forms of
identification supplied by a Parking Facility Owner as a condition to using its
parking facilities shall remain the property of the Parking Facility Owner, and
the same must be displayed as requested and not mutilated or obstructed in any
manner. Parking access cards, stickers and other devices are not transferable,
and any parking sticker or other device found in the possession of an
unauthorized holder will be void. Each Parking Facility Owner may charge a fee
for parking access cards, parking stickers or other parking control devices
supplied or replaced by the Parking Facility Owner.
25.2.9 No overnight or extended term parking or storage of vehicles shall be
permitted. Parking is prohibited on or in (i) drive lanes and other areas not
striped for parking, (ii) aisles, (iii) areas where “no parking” signs are
posted or marked on the parking surface, (iv) any ramps, entries or exits,
(v) any cross-hatched areas, (vi) any designated loading areas, or (vii) such
other areas as may be designated from time to time by the Parking Facility Owner
for maintenance, repair or other purposes.
25.2.10 All responsibility for damage to or loss or theft of any vehicles or any
contents thereof are expressly assumed by Lessee or other persons parking their
vehicle in the Underground Parking Facilities or P-l Parking Structure.
25.2.11 Lessor reserves the right to require Lessee, as a condition to using its
allocated Parking Spaces, to enter into a parking agreement providing for
additional regulations, restrictions, and requirements with respect to use of
its allocated Parking Spaces as long as the terms and conditions thereof are not
materially inconsistent with this Lease or the rules and regulations referred to
in Section 6.7 of this Lease.

 

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25.2.12 Lessor, on its behalf and on behalf of any other Parking Facility Owner,
reserves the right to refuse parking identification devices and/or parking
rights to Lessee or any other person who fails to comply with the covenants in
this Section 25.2, or in any separate parking agreement provided for in this
Section 25.2, or in any of the rules and regulations provided for in
Section 6.7; and any violation thereof shall subject the vehicle of the
offending person to be removed or immobilized at such person’s expense.
25.3 Parking Ratio. The surface parking within the Project, the P-l Parking
Structure, and the Underground Parking Facilities (including areas designated
for visitor parking) will together offer parking to tenants and tenants’
visitors of the Building at a ratio of approximately four (4) parking spaces for
each 1,000 square feet of usable area within the Building, subject to
Section 25.1 with respect to surface parking, and subject to the rights granted
by the respective Parking Facility Owner to tenants, occupants, and members of
the public with respect to the Parking Spaces.
26 FORCE MAJEURE. If Lessor or Lessee is delayed or prevented from the
performance of any act required hereunder by reason of acts of God, strikes,
lockouts, labor troubles, civil disorder, terrorism, acts of war, severe
weather, inability to procure materials, restrictive governmental laws or
regulations, or other cause without fault and beyond the reasonable control of
Lessor or Lessee (financial inability excepted), performance of such act shall
be excused for the period of delay.
27 RIGHTS RESERVED BY LESSOR. The rights set forth on Exhibit “E” are hereby
reserved by Lessor and are exercisable without notice to Lessee or liability for
any inconvenience suffered by Lessee as a result thereof (including, without
limitation, any diminution of light, air or view), and Lessee shall not be
entitled by reason thereof to terminate this Lease or receive any abatement or
reduction of Rent or other sums.
28 NOTICES. No notice, consent, approval or other communication given in
connection herewith shall be validly given, made, delivered or served unless in
writing and hand-delivered or sent by facsimile transmission or by registered or
certified United States mail, postage prepaid, to Lessor (or the Managing Agent
if Lessor so designates in the Basic Lease Information) or Lessee, as the case
may be, at the respective addresses or fax numbers set forth in the Basic Lease
Information, or to such other addresses or fax numbers as either party hereto
may from time to time designate in writing and deliver in accordance herewith to
the other party. Notices, consents, approval or communications shall be deemed
given or received 24 hours after deposit in the mail as hereinabove provided, or
immediately if hand-delivered or sent by facsimile transmission.
29 DEFAULTS, REMEDIES.
29.1 Defaults. The occurrence of anyone or more of the following events shall
constitute a default and breach of this Lease by Lessee:
29.1.1 Lessee abandons the Premises, or fails to surrender the Premises as
provided in Article 24 above.

 

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29.1.2 Lessee fails to make any payment of Base Rental or any other Rent or
other sum due under this Lease, together with interest thereon as herein
provided, as and when due, where such failure shall continue for a period of
five (5) business days after written notice thereof from Lessor to Lessee.
29.1.3 Lessee fails to observe or perform any of the covenants, conditions or
provisions of this Lease to be observed or performed by Lessee, other than as
described in Sections 29.1.1, 29.1.2, 29.1.4, 29.1.5, or 29.1.6, where such
failure shall continue for a period of fifteen (15) business days after written
notice thereof to Lessee; provided, however, that if the nature of Lessee’s
failure is such that more time is reasonably necessary in order to cure Lessee’s
failure, then Lessee shall not be in default under this Lease if Lessee
diligently commences to cure within the foregoing period, exercises its
consistent and best efforts to cure such failure, keeps Lessor reasonably
advised of its efforts and progress to cure, and completes such cure within not
more than forty-five (45) days after the written notice provided for above.
29.1.4 To the extent that a declaration of default is not prohibited by law,
(i) the making by Lessee of any general assignment, or general arrangement for
the benefit of creditors; (ii) the filing by or against Lessee of a proceeding
under state or federal insolvency and/or bankruptcy laws (unless, in the case of
a petition filed against Lessee, the same is dismissed within thirty (30) days);
(iii) the appointment of a trustee or receiver to take possession of
substantially all of Lessee’s assets located at the Premises or of Lessee’s
interest in this Lease, where possession is not restored to Lessee within thirty
(30) days; or (iv) the attachment, execution or other judicial seizure of
substantially all of Lessee’s assets located at the Premises or of Lessee’s
interest in this Lease.
29.1.5 An assignment or subletting of the Premises without the written consent
of Lessor if such consent is required as provided in Article 20.
29.1.6 Lessee’s failure to deliver when due the documents required in Article 18
or Section 19.2.
29.2 Remedies. Upon any such default or breach by Lessee and the expiration of
any applicable cure periods, Lessor shall be entitled to exercise the following
rights and remedies at any time thereafter, with or without notice or demand,
and without limiting Lessor in the exercise of any right or remedy which Lessor
may have by reason of such default or breach (and Lessor shall be entitled to
recover from Lessee all reasonable attorneys’ fees and costs incurred by Lessor
in enforcing its rights and remedies, regardless of whether legal proceedings
are commenced):
29.2.1 Lessor shall have the immediate right of re-entry and may remove all
persons and property from the Premises, without liability for damages sustained
by reason of such removal. Such property may be removed and stored in a public
warehouse or elsewhere at the cost of and for the account of Lessee. Should
Lessor elect to re-enter as herein provided, or should it take possession
pursuant to legal proceedings or pursuant to any notice provided by law, it may
either terminate this Lease to the same extent and with all the legal incidents
as if the term hereof had expired by lapse of time, or it may from time to time,
without termination of this Lease, relet the Premises or any part thereof in
accordance with Section 29.3 below. No such re-

 

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entry or taking possession of the Premises by Lessor shall be construed as an
election on its part to terminate this Lease unless a written notice of such
intention is given to Lessee. Notwithstanding any such reletting without
termination, Lessor may, at any time thereafter, elect to terminate this Lease
for such previous breach. Regardless of whether or not this Lease is terminated
as provided above, Lessor shall be entitled to terminate all of the rights of
Lessee and/or its employees or other Persons with respect to all Parking Spaces,
and to recover from Lessee all damages incurred by Lessor as a result of
Lessee’s default, including without limitation (i) the worth at the time of
Lessee’s default of all unpaid Base Rental, Operating Costs and other Rent and
sums due from Lessee under this Lease through the date Lessor elects to re-enter
the Premises and/or terminate this Lease, and all Base Rental (and upon Lessee’s
default, all Base Rental abated pursuant to Section 3.5 shall become immediately
due and payable and shall be deemed unpaid Rent for purposes of this provision),
Operating Costs, and other Rent and sums due under this Lease after re-entry
and/or termination through the end of the Lease Term, and (ii) all other amounts
necessary to compensate Lessor for all detriment caused by Lessee’s default.
Lessor shall be entitled to receive a judgment for the full amount of such
damages as may be reduced by any amounts received and applied by Lessor as
provided in Section 29.3. In determining worth at the time of Lessee’s default,
a discount rate equal to one percent (1%) above the discount rate then in effect
at the Federal Reserve Bank serving Phoenix shall be used.
29.2.2 Lessor shall have the right, but not the obligation, to render the
performance required to cure such default or breach and to charge to Lessee all
costs and expenses incurred in connection therewith (including a service fee
equal to fifteen percent (15%) of all sums expended by Lessor to cure the
default or breach), together with interest thereon from the date incurred by
Lessor at the rate provided below, and Lessee shall immediately pay the same
upon presentment of a statement to Lessee.
29.2.3 No remedy herein conferred upon Lessor shall be considered exclusive of
any other remedy, but the same shall be cumulative and shall be in addition to
every other remedy given hereunder, or now or hereafter existing at law or in
equity or by statute, including, but not limited to, the right to maintain an
action to recover all amounts due hereunder. Lessor may exercise its rights and
remedies at anytime, in any order, to any extent, and as often as Lessor deems
advisable.
29.2.4 In addition, to every other remedy available to Lessor, Lessor may, in
the event of default as defined in this Article, obtain the appointment of a
receiver in any court of competent jurisdiction, and the receiver may enter the
Premises and take possession of Lessee’s Property and any other personal
property belonging to the Lessee and used in the conduct of Lessee’s business in
the Premises. Such entry or possession by said receiver shall not constitute an
eviction of Lessee from the Premises or any portion thereof, and Lessee shall
indemnify, defend and hold Lessor harmless from any claim by any person arising
out of or in anyway connected with the entry by said receiver in taking
possession of the Premises and/or said personal property. Neither the
application for the appointment of such receiver, nor the appointment of such
receiver, shall be construed as an election on Lessor’s part to terminate this
Lease unless a written notice of such intention is given to Lessee.

 

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29.3 Reletting the Premises. Lessor, in the exercise of its rights under
Section 29.2.1, shall have the right to relet the Premises or any portion
thereof, and to grant the use of all or a portion of the Parking Spaces made
available to Lessee pursuant to this Lease, for such term or terms (which may be
for a term extending beyond the term of this Lease) and at such rental and upon
such other terms and conditions as Lessor, in its sole discretion, may deem
advisable. Lessor shall also have the right to make such alterations and repairs
to the Premises as Lessor may deem advisable, in its sole discretion. Upon such
reletting, the rents received by Lessor for the Premises (but not for any
Parking Spaces which will be retained by Lessor or other Parking Facility Owner)
shall be applied first to the payment of any indebtedness other than rent due
hereunder from Lessee to Lessor; second, to the payment of all reasonable costs
and expenses of such reletting (including leasing commissions) and of such
alterations and repairs; third, to the payment of rent due and unpaid hereunder;
and the residue, if any, shall be held by Lessor and applied to payment of
future rent as the same may become due and payable hereunder. If the rents for
the Premises received from such reletting during any month are less than that to
be paid during that month by Lessee hereunder, Lessee shall immediately pay any
such deficiency to Lessor. Such deficiency shall be calculated and paid monthly.
29.4 No Waiver. No delay or omission of Lessor to exercise any right or power
arising from any default shall impair any such right or power, and shall not be
construed to be a waiver of any such default or an acquiescence therein. No
waiver of a default shall be effective unless it is in writing. No written
waiver by Lessor of any provision of this Lease or any breach by Lessee
hereunder shall be deemed to be a waiver of any other provision hereof, or of
any subsequent breach by Lessee of the same or any other provision. Lessor’s
consent to or approval of any act by Lessee requiring Lessor’s consent or
approval shall not be deemed to render unnecessary the procurement of Lessor’s
consent to or approval of any subsequent act of Lessee, whether or not similar
to the act so consented to or approved.
29.5 Late Charges. Lessee hereby acknowledges that late payment by Lessee of
Rent and other sums due hereunder will cause Lessor to incur costs not
contemplated by this Lease, the exact amount of which will be difficult to
ascertain. Such costs include, but are not limited to, processing and accounting
charges, and charges that may be incurred by Lessor pursuant to its financing
for the Building. Accordingly, if any monthly Base Rental payment or other
amount due to Lessor hereunder shall not be received by Lessor within ten
(10) days after the due date therefor, Lessee shall pay to Lessor a late charge
equal to ten percent (10%) of such amount. The parties agree that such late
charge represents a fair and reasonable estimate of the costs Lessor will incur
by reason of late payment by Lessee, and shall be in addition to any interest
which may accrue thereon pursuant to Section 29.6 below. Lessor shall have the
right to require Lessee to pay all past-due obligations, including late charges
and interest, in the form of a cashier’s check.
29.6 Interest. Any amount due to Lessor which is not paid when due shall bear
interest, not to exceed the maximum rate allowed by law, from the date due until
paid at a rate equal to the greater of (i) eighteen percent (18%) per annum, or
(ii) a rate per annum equal to five percent (5%) in excess of the “Prime Rate”
designated by US Bank (or its successor(s)) from time to time as its prime
commercial lending rate during the period said amounts are owed by Lessee or
Lessor. Payment of such interest shall not excuse or cure any default under this
Lease.
29.7 Attorneys’ Fees. If either party resorts to judicial proceedings to enforce
any right under this Lease or to obtain relief for any default by the other
party, the party prevailing in such proceedings shall be entitled to recover
from the non-prevailing party the costs thereof, including reasonable attorneys’
fees (as determined by the court).

 

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30 LESSOR’S LIABILITY.
30.1 Default by Lessor. Lessor shall not be considered in default or breach of
this Lease for the non-performance of any obligation imposed herein unless
Lessee provides Lessor with written notice of said non-performance and:
30.1.1 If the same relates solely to the non-payment of money, Lessor fails to
perform within thirty (30) days after receipt of said written notice, or
30.1.2 If the same does not relate solely to the non-payment of money, Lessor
fails to commence performance within said 30-day period and to diligently
continue such performance until the obligation is fulfilled.
If Lessor grants a security interest in this Lease to any person or entity and
if Lessee has been notified in writing of the name and address of said
lienholder, then Lessee shall simultaneously upon giving any notice of
non-performance to Lessor deliver a copy of same to each such lienholder, by
personal delivery or certified or registered United States mail, postage prepaid
(notices sent by mail shall be deemed delivered upon receipt). Each such
lienholder shall be entitled to perform such obligation within forty-five
(45) days after the expiration of any period of time within which Lessor is
entitled to perform such obligation.
30.2 Sale of Lessor’s Interest. Upon any sale or conveyance of Lessor’s interest
in this Lease (excluding a transfer of title to the Building and adjacent land
to the City of Tempe pursuant to Section 19.1 above, but including Lessor’s
assignment of its interest as lessee under the Master Lease and Lessor under
this Lease to another person or entity), Lessor shall be entirely relieved of
all liability for Lessor’s obligations under this Lease accruing thereafter, and
the assignee or purchaser shall be deemed without any further agreement between
the parties or their successors in interest to have assumed all of the
obligations of Lessor under this Lease accruing after such conveyance. This
Lease shall not be affected by any such sale or conveyance and Lessee agrees to
attorn to such successor in interest. The Security Deposit made by Lessee
hereunder may be transferred by Lessor to such successor in interest and
thereupon Lessor shall be discharged from any further liability in reference
thereto.
30.3 No Liability for Loss, Theft, Etc. Except for the reckless and intentional
misconduct of Lessor, Lessor and its employees and agents shall not be liable to
Lessee for any damage to property entrusted to Lessor’s employees, agents or
contractors, nor for loss of or damage to any property by theft, disappearance
or otherwise, nor for any injury or damage to persons or property resulting from
any cause whatsoever, including without limitation fire, explosion, falling
ceiling material or wall board, steam, gas, electricity, any act or omission of
co-tenants or other occupants of the Building or of adjoining or contiguous
property or buildings, water or rain which may leak from any part of the
Premises or the Building or from the pipes, tanks, appliances or plumbing works
therein, or from the roof, street or subsurface, or from any other place. Lessee
shall bear the risk of loss (and the responsibility to insure) with respect to
all of the foregoing. Lessor and its employees and agents shall not be liable to
Lessee for interference with the natural light, nor for any latent defect in the
Premises or in the Project. Lessee shall give prompt notice to Lessor of any
fire, accident or defect discovered within the Premises or the Project.

 

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30.4 Lessor’s Liability. Notwithstanding anything to the contrary contained in
this Lease, it is expressly understood and agreed by and between the parties
hereto that: (i) the recourse of Lessee, or its successors or assigns, against
Lessor with respect to any alleged breach by or on the part of Lessor of any
representation, warranty, covenant, undertaking or agreement contained in this
Lease or otherwise arising out of Lessee’s use of the Premises or the Project
(collectively “Lessor’s Lease Obligations”) shall extend only to Lessor’s
interest in the Building of which the Premises are a part (“Lessor’s Real
Estate”) and the rents derived therefrom, and not to any other real property,
personal property or other assets of Lessor or its former or current members, or
any of the current or former directors, officers, employees, agents, members, or
partners thereof; and (ii) except to the extent of Lessor’s interest in Lessor’s
Real Estate, no personal liability or personal responsibility of any sort with
respect to any of Lessor’s Lease Obligations or any alleged breach thereof is
assumed by, or shall be asserted or enforceable against, Lessor or any current
or former members thereof, or any of Lessor’s or such member’s current or former
directors, officers, employees, agents, members, or partners.
31 GENERAL.
31.1 Captions. The headings of the Articles and the Sections hereof are inserted
for convenience only and shall not affect the construction of any of the
provisions hereof
31.2 Time of the Essence. Time is of the essence with respect to this Lease.
31.3 No Partnership, No Third Party Rights. Nothing contained in this Lease
shall create any partnership, joint venture or other arrangement between Lessor
and Lessee. Except as expressly provided herein, no provision of this Lease is
intended to benefit, and shall not benefit, any person not a part hereto and no
such other person shall have any right or cause or action hereunder.
31.4 Entire Agreement. This Lease constitutes the entire agreement between the
parties hereto pertaining to the subject matter hereof, and shall not be changed
or added to except in writing signed by all parties hereto. All prior and
contemporaneous agreements, representations, statements and understandings of
the parties, oral or written, that modify, amend or vary any of the terms of
this Lease, are hereby superseded and merged herein.
31.5 Joint and Several Obligations. If Lessee comprises two or more persons,
corporations, LLC’s, or other entities, all agreements, covenants,
representations and warranties of Lessee herein are the joint and several
obligations of the persons or entities comprising Lessee. If Lessee is husband
and wife, the obligations hereunder shall extend individually to the sole and
separate property of each as well as to their community property. Notice given
to anyone of the persons or entities constituting Lessee shall be deemed as
having been given to all such entities, and any decision, action, or election
made under this Lease or any Exhibits by one person or entity comprising Lessee
shall bind all persons and entities comprising Lessee.

 

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31.6 Authority to Execute. Any individual executing this Lease on behalf of or
as representative for a corporation, LLC, partnership or other entity represents
and warrants that he or she is duly authorized to execute and deliver this Lease
on behalf thereof and that this Lease is binding thereon in accordance with its
terms. If Lessee is a corporation or LLC, Lessee shall deliver to Lessor within
fifteen (15) days after the execution hereof a certified copy of a resolution of
the Board of Directors of said corporation, or a member resolution of said LLC,
authorizing or ratifying the execution and delivery of this Lease by the
individuals executing and delivering same.
31.7 Arizona Law. This Lease shall be governed by and interpreted in accordance
with the laws of Arizona. The parties hereby consent to the exclusive
jurisdiction and venue of the federal and state courts in Maricopa County,
Arizona, with respect to any controversy arising out of this Lease.
31.8 Partial Invalidity. If any provision of this Lease is held by a court to be
invalid, void or unenforceable, the remainder of this Lease shall remain in full
force and effect and shall in no way be affected or invalidated.
31.9 Incorporation of Exhibits. All exhibits attached hereto shall be deemed a
part of this Lease.
31.10 Waiver of Notice. Unless Lessor is otherwise specifically obligated to do
so by the terms of this Lease, Lessee hereby expressly waives the service of any
notice of intention to terminate this Lease or to re-enter the Premises and
waives the service of any demand for payment of rent or for possession and
waives the service of any other notice or demand prescribed by any statute or
other law.
31.11 Binding on Successors and Assigns. Each of the provisions of this Lease
shall bind, extend to, and inure to the benefit of the respective heirs, legal
representatives, and successors and assigns of both Lessor and Lessee; provided,
however, that this clause shall not permit any assignment contrary to the
provisions of Article 20.
31.12 Impartial Interpretation. This Lease is the result of negotiations between
Lessor and Lessee. The language in this Lease shall be construed as a whole
according to its fair meaning and not strictly for or against either party.
31.13 Not Binding Until Signed. Submission of this instrument for examination
and/or the submissions of drafts, revisions, comments, etc. shall not bind
Lessor or Lessee in any manner, nor create any duties, liabilities, commitments,
or obligations of any kind or nature, nor any claims of detrimental reliance nor
any other rights or remedies (at law or in equity). No lease or obligation shall
arise until this instrument is executed and delivered by Lessor and Lessee, and
until such execution and delivery, either Lessee or Lessor may terminate
negotiations at any time for any reason.
31.14 No Recording. Lessee shall not record this Lease nor a memorandum of this
Lease.

 

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31.15 Calendar and Business Days. Whenever in this Lease references made to
“days” (for example, when payment or other performances due within a specified
number of days), the reference shall refer to calendar days unless reference is
specifically made to “business days”. As used in this Lease, the term “business
days” shall mean Monday through Friday except legal holidays, and the term
“legal holidays” shall mean holidays recognized by the State of Arizona.
31.16 Lessee’s Financial Statements. Within fifteen (15) days after request
therefor, Lessee shall deliver to Lessor a copy of Lessee’s financial statements
(including, but not limited to, an audited balance sheet, if available, and an
income statement) for the prior fiscal year (and year-to-date if available)
certified by an executive officer of Lessee.
31.17 Brokers. Lessor and Lessee represent and agree that they have dealt
directly with and only with Lessor’s Broker and Lessee’s Broker (“Brokers”) in
connection with this Lease and that insofar as either party knows, no other
broker, agent or finder negotiated or participated in this transaction or the
negotiation of this Lease or submitted or showed the Premises or is entitled to
any commission or finder’s fee in connection therewith, and that each party
shall be solely responsible with respect to any dealings of such party with any
such other real estate broker, agent, finder or other person, and Lessor and
Lessee each shall protect and indemnify, hold harmless, and defend the other
from any liabilities, costs, fees, and expenses (including, without limitation,
reasonable attorneys’ fees) incurred by the indemnified party with respect
thereto. Lessor shall pay a commission to Lessor’s Broker and to Lessee’s Broker
to the extent provided in a separate agreement signed by Lessor. Lessor and
Lessee agree that no broker (including the Brokers) shall be entitled to any
commission in connection with any extension of the Initial Term or any expansion
of the Premises.
31.18 Intentionally Omitted.
31.19 Airport Disclaimer. Lessee acknowledges that the Project is within the
flight path for flights arriving at and departing from Sky Harbor International
Airport (“Sky Harbor”), and agrees that Lessor shall not be liable to Lessee
for, and Lessee hereby releases Lessor with respect to, any claims, liabilities,
losses, causes of action, fees and expenses in any way relating thereto,
including, without limitation, to noise or vibration caused by aircraft or other
vehicles approaching or leaving Sky Harbor, or to any other adverse effects
caused by or resulting from the location of the Building and the Premises in the
flight path of Sky Harbor.
31.20 Consent of Lessor. With regard to any provision in this Lease, including
exhibits, requiring Lessor’s consent or approval, Lessor shall be entitled to
withhold such consent or approval for any reason in its sole and absolute
discretion, unless the applicable provision in this Lease expressly states
Lessor’s consent or approval will not be unreasonably withheld. Lessor’s consent
to, or approval of, any matter requiring Lessor’s consent or approval shall not
be deemed a waiver of the requirement to obtain Lessor’s consent to or approval
of any similar matter.
31.21 Other Tenants. Lessor reserves the absolute right to allow such other
tenants and occupants in the Project as Lessor, in the exercise of its business
judgment, shall determine will best promote the interests of the Project. Lessee
does not rely on the fact, nor does Lessor in any way represent that any
specific tenant or number of tenants shall, during the term of this Lease,
occupy any space in the Project.

 

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31.22 OFAC Certification. Lessee certifies that (i) it is not acting directly or
indirectly for or on behalf of any person, group, entity, or nation named by any
Executive Order or the United States Treasury Department, through its Office of
Foreign Assets Control (“OFAC”) or otherwise, as a terrorist, “Specially
Designated National”, “Blocked Person”, or other banned or blocked person,
entity, nation, or transaction pursuant to any law, order, rule, or regulation
that is enforced or administered by OFAC or another department of the United
States government, and (ii) Lessee is not engaged in this transaction (directly
or indirectly) on behalf of, or instigating or facilitating this transaction
(directly or indirectly) on behalf of, any such person, group, entity, or
nation. Lessee shall indemnify, defend, and hold harmless Lessor from and
against any claims, damages, losses, risks, liabilities, and expenses (including
reasonable attorneys’ fees and costs) arising from or related to any breach of
the foregoing certification.
[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Lease the day and year
hereinabove written.

                  LESSOR:
 
                HAYDEN FERRY LAKESIDE, LLC, an Arizona
limited liability company
 
                BY:   SunCor Development Company, an Arizona
corporation, its Managing Member
 
           
 
      By:   /s/ M. Randall Levin
 
           
 
          M. Randall Levin, Vice President
 
                    Date: January 17, 2008
 
                LESSEE:
 
                RENEGY HOLDINGS, INC., a Delaware corporation
 
                By:   /s/ Robert Zack               Printed Name: Robert Zack  
  Its: Chief Finanical Officer       Date: January 16, 2008

 

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EXHIBIT LIST

     
EXHIBIT “A”
  Floor Plan with Premises and Outdoor Balcony Area Designated
 
   
EXHIBIT “A-1”
  Diagram of Entire Hayden Ferry Lakeside Development with Project (Entire
Office and Commercial Development Designated)
 
   
EXHIBIT “B”
  Rules and Regulations
 
   
EXHIBIT “C”
  Construction Obligations of Lessor and Lessee
 
   
EXHIBIT “D”
  Description of Lessee’s Property
 
   
EXHIBIT “E”
  Rights Reserved by Lessor

 

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EXHIBIT “A”
FLOOR PLAN OF PREMISES AND OUTDOOR BALCONY AREA DESIGNATED

 

 

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EXHIBIT “A-1”
DIAGRAM OF ENTIRE HAYDEN FERRY LAKESIDE DEVELOPMENT WITH
PROJECT (ENTIRE OFFICE AND COMMERCIAL DEVELOPMENT)
(MAP) [c72120c7212001.gif]

 

 

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EXHIBIT “B”
PROJECT RULES AND REGULATIONS
Lessee shall comply, and shall cause its subtenants and their respective
employees, agents, contractors, customers, and invitees to comply, with the
following rules and regulations for the Project:
1. Except as specifically provided in Section 6.8 of the Lease, no sign
(including, without limitation, neon signs), placard, picture, advertisement,
name, notice or other information of any kind shall be inscribed, displayed,
printed, or affixed on or to any part of the outside or inside of the Building,
the Premises (unless inside the Premises but not visible from outside the
Premises), the Project or the surrounding area without the prior written consent
of Lessor. If such consent is given by Lessor, Lessor may regulate the manner of
display. Lessor shall have the right to remove any such item which has not been
approved by Lessor or is being displayed in a non-approved manner without notice
to and at the expense of Lessee. All approved signs or lettering on doors shall
be printed, painted, affixed or inscribed at the expense of Lessee in the manner
and by a person approved by Lessor. Lessee shall not place anything or allow
anything to be placed near any window or any glass door, partition or wall which
may appear unsightly, in Lessor’s sole discretion, from outside the Premises.
Lessee shall not display or exhibit any products, goods, wares, or merchandise
and shall not distribute advertising materials outside of the Premises. Lessee
shall not install exterior lighting on or decorate, paint or otherwise alter or
improve the exterior of the Project or the Premises, and Lessee shall not
install any antenna or other structure or object on the roof or any other
portion of the Project (except as may otherwise be specifically provided in the
Lease). Lessee shall not store products, containers or merchandise on the
Project in areas outside of the Premises except for such short periods of time
as may be necessary for loading or unloading delivery vehicles, which shall only
occur in areas specifically designated for such purposes by Lessor from time to
time within the P-1 Parking Structure and shall be regulated by Lessor’s
facilities coordinator (if Lessor elects to designate a facilities coordinator).
2. Except as specifically provided in Section 6.8 of the Lease, the directory
for the Building will be provided exclusively for the display of the name and
location of the lessees only. Lessor reserves the right to exclude any other
names therefrom and to charge a reasonable fee for each entry, other than
Lessee’s name, placed upon such directory at the request of Lessee; and any
changes thereto.
3. The sidewalks, parking areas, halls, lobby areas, toilets, stairways,
passages, exits, entrances, elevators, driveways, loading areas and trash
pick-up areas shall not be obstructed by Lessee, its customers, invitees,
licensees and guests, or used for any purpose other than for ingress to and
egress from the Premises. The halls, lobby areas, passages, exits, entrances,
sidewalks, parking areas, elevators, stairways, toilets, balconies and roof are
not for the use of the general public and Lessor shall in all cases retain the
right to control the same and prevent access thereto by all persons whose
presence in the judgment of the Lessor shall be prejudicial to the safety,
character, reputation and interests of the Project or its lessees. Neither
Lessee nor the employees, contractors or invitees of Lessee shall go upon the
roof of the Building. The sashes, sash doors, skylights, windows and doors that
reflect or admit light and air into halls, passageways or other public places in
the Building shall not be covered or obstructed.

 

 

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4. The toilets, urinals, sinks, drains and other apparatus shall not be used for
any purpose other than that for which they were constructed and no foreign
substance of any kind whatsoever shall be thrown therein. The expense of any
breakage, stoppage or damage resulting from a violation of this rule shall be
borne by Lessee if Lessee or its agents, contractors, employees or invitees
caused the same.
5. Lessor shall have the right to prescribe the weight, size, and position of
all safes and other heavy equipment brought into the Building and also the times
and manner of moving the same in and out of the Building. Safes or other heavy
objects shall, if considered necessary by Lessor, stand on wood strips of such
thickness as may be necessary to properly distribute the weight. Lessor will not
be responsible for loss of or damage to any such safe or property from any cause
and all damage done to the Building by moving or maintaining any such safe or
other property shall be repaired at the expense of Lessee. There shall not be
used in the Premises or the Building any hand trucks except those equipped with
rubber tires and side guards.
6. Lessor shall have the right to designate and control any service in or to the
Building and its lessees. Lessee shall not employ any person other than the
janitor of Lessor for the purpose of cleaning the Premises unless otherwise
agreed by Lessor in writing. Lessor will require any janitorial service to
maintain commercially reasonable levels of insurance coverage insuring its
activities. Except with the written consent of Lessor, no person or persons
other than those approved by Lessor shall be permitted to enter the Building for
the purpose of cleaning the same. Lessee shall not cause any unnecessary labor
by reason of Lessee’s carelessness or indifference in the preservation of good
order and cleanliness. Lessor shall not be responsible to Lessee for any theft
or loss of property on the Premises, however occurring, or for any damage done
to the effects of Lessee, by or as a result of the acts of the janitor, any
other employee or contractor of Lessor, or any other person. Lessor’s janitor
service shall not include cleaning of non-standard Building draperies or moving
of furniture and other special services. Janitor service will not be furnished
in any room occupied at the time the janitor attempts to clean such room. Window
cleaning shall be done only by Lessor at intervals it deems appropriate
(approximately quarterly).
7. Lessee shall not use, keep, or permit to be used or kept, except as
specifically allowed in this Paragraph, any noxious gas or substance in the
Premises or the Outdoor Balcony Area, nor permit the Premises or the Outdoor
Balcony Area to be occupied or used in a manner offensive or objectionable to
Lessor and other occupants of the Building by reason of odors and/or vibrations,
or interfere in any way with other lessees or occupants conducting business in
the Building. However, any lessees who are specifically allowed to operate a
restaurant by Lessor, may generate cooking odors which may be allowed by Lessor
if, in Lessor’s sole and absolute discretion, the same are not noxious, putrid,
foul or offensive. No bicycles, skateboards, roller blades, roller skates,
scooters, or similar equipment shall be allowed in the Building, and no animals
(except seeing eye dogs), reptiles, insects or birds shall be brought or kept in
or about the Premises, the Outdoor Balcony Area or the Building. No Lessee shall
make or permit to be made any disturbing noises or disturb or interfere with
occupants of the Project or neighboring property, or with those having business
with such occupants, by the use of any equipment,

 

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machinery, tool, implement, appliance, apparatus, musical instrument, radio,
phonograph, electronic device, or other devices. No cooking of any kind shall be
done or permitted by Lessee in the Premises or the Outdoor Balcony Area, except
the preparation of microwave items including, without limitation, popcorn, soup,
and frozen food items, and of coffee, tea, hot chocolate, and similar items.
However, all of the foregoing allowed in the Premises must be prepared only for
incidental consumption by Lessee, its employees, clients and guests, and not for
retail or commercial purposes of any kind.
8. The Premises shall not be used for manufacturing or assembly, or for the
storage of merchandise except as such storage may be incidental to the use of
the Premises for the purposes permitted by the Lease, but all storage shall be
within the Premises in an area not visible from outside the Premises. Lessee
shall not conduct any auction or permit any fire sale or bankruptcy sale to be
held on the Premises. The Premises shall not be used for lodging or for illegal
purposes.
9. Lessee shall not use any method of heating or air conditioning other than
that supplied by Lessor, and shall not use or keep in the Premises, the
Building, or the Project any kerosene, gasoline, naphtha, benzene or other
explosive or inflammable fluid or material, except for customary and usual
office and cleaning supplies provided that such use, presence or storage does
not result in the violation of any Environmental Laws.
10. Lessee shall not allow the installation of telephone wires or electrical or
computer wires or circuits, except with Lessor’s prior written approval. The
location of telephones and other office equipment affixed to the Premises shall
be subject to the approval of Lessor, but the installation of same shall be at
the expense of Lessee.
11. All keys to the Building, offices, rooms and toilets, and all parking cards
for the Parking Spaces, shall be obtained from Lessor. Should Lessee require any
duplicate keys or parking cards, Lessee shall request the same from Lessor, who
shall provide such keys or parking cards at a reasonable charge. Lessee, upon
termination of its tenancy, shall deliver to Lessor all keys and parking cards
which shall have been furnished, pay Lessor the cost of replacing any parking
card or lost key, or changing any lock which can be opened by such lost key if
Lessor deems it necessary to make such change, and disclose to Lessor the
combination of any safes, cabinets or vaults left in the Premises. Lessee shall
not alter or replace any lock or install any additional locks or any bolts on
any door of the Premises without the prior written consent of Lessor, which
consent shall not unreasonable be withheld.
12. Lessee shall not lay linoleum, tile, carpet or other similar floor coverings
in any manner except as approved by Lessor. The expense of repairing any damage
resulting from a violation of this rule or removal of any floor covering shall
be borne by Lessee.
13. On Saturdays, Sundays, and legal holidays, and on other days during which
the Building may be closed after normal business hours, access to the Building
or to the halls, corridors, or stairways in the Building, or to the Premises may
be controlled through the use of monitoring personnel and/or monitoring systems
and devices. Such personnel will have the right to demand of any and all persons
seeking access to the Building proper identification to determine if they have
right of access to the Premises. Lessor shall in no case be liable for damages
for any error with regard to the admission to or exclusion from the Building of
any person. In case of invasion, mob, riot, public excitement, or other
commotion, Lessor reserves the right to prevent access to the Building by
closing the doors or otherwise. The foregoing notwithstanding, Lessor shall have
no duty to anyone to provide monitoring protection for the Building at any time
or to monitor access thereto.

 

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14. Lessee shall see that the doors of the Premises are kept closed at all times
except for entry and exit purposes, and that the same are not kept open by a
chair or other device. Lessee shall also cause all doors of the Premises and the
Outdoor Balcony Area to be closed and securely locked before leaving the
Building, and shall cause all water faucets and water apparatus to be shut off
before Lessee or its employees leave the Building. Lessee shall be responsible
for any damage to the Building or to other lessees caused by a failure to comply
with this rule.
15. Lessor reserves the right to exclude or expel from the Building or the
Project any person who, in the judgment of Lessor, is intoxicated or under the
influence of liquor or drugs, or who shall in any manner do any act in violation
of any of the rules and regulations of the Building.
16. Employees, contractors, or agents of Lessor shall not be requested to
perform any work or do anything outside of their regular duties unless under
special instructions from Lessor.
17. No vending machine shall be installed, maintained, or operated in the
Premises without the written consent of Lessor, which consent shall not be
unreasonably withheld, provided that the same must be available only for use by
Lessee and its employees and must not be visible from outside the Premises. In
addition, Lessee covenants and agrees that it will not install, maintain, or
operate or cause to be installed, maintained or operated, any vending machines
outside of the Premises or in the Project without the prior written consent of
Lessor.
18. Lessee agrees that it shall comply with all fire regulations that may be
issued from time to time by Lessor and/or fire authorities, and Lessee shall
also provide Lessor with the names of a designated responsible employee to
represent Lessee in all matters pertaining to fire regulations.
19. Lessor reserves the right to rescind, alter or waive any rule or regulation
at any time prescribed for the Building or the Project when, in Lessor’s
judgment, it is necessary, desirable or proper for the best interest of the
Building or the Project or one or more of its tenants or occupants.
20. Lessee and its employees and contractors shall not disturb, solicit, or
canvass any occupant of the Building or the Project and shall cooperate to
prevent the same. Lessee and its employees and contractors shall not exhibit,
sell or offer to sell, use, rent or exchange any item or service in or from the
Premises unless ordinarily embraced within Lessee’s use of the Premises
specified in the Lease, and all activities with respect thereto are conducted
within the Premises.
21. Without the written consent of Lessor, in Lessor’s sole discretion, Lessee
shall not use the name or logo of the Project in connection with or in promoting
or advertising the business of Lessee, except as Lessee’s address.

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22. All interior window coverings must be approved by Lessor, and Lessee may not
install any awnings or other exterior window shades or coverings. Lessor has
designed the Building’s standard internal ceiling lighting system to provide for
uniform ceiling lighting throughout the Building. Accordingly, Lessor shall have
the right to control all internal lighting that may be visible from the exterior
of the Building. Lessor’s control shall not extend to recessed down lights,
track lighting, torchiers, table, desk, or task lights within the Premises.
23. Lessee and its employees shall not park in driveways or loading areas or in
reserved parking spaces of other tenants or occupants. Lessor or its agents
shall have the right to immobilize or cause to be removed any car of Lessee, its
employees, agents, contractors, customers and invitees, that is parked in
unauthorized areas, and Lessee agrees to indemnify, defend, and hold harmless
Lessor, its agents and employees, from any and all claims, losses, damages and
demands arising or asserted in connection with the removal of any such vehicle
and for all expenses (including attorneys’ fees and costs) incurred by Lessor in
connection with such removal. Lessee will, from time to time, upon request of
Lessor, supply Lessor with a list of license plate numbers or vehicles owned or
operated by its employees and agents.
24. Lessee shall not waste electricity, water, heating or cooling and agrees to
cooperate fully with Lessor to assure the most effective operation of the
Building’s heating and air conditioning equipment and shall refrain from
adjusting or attempting to adjust any controls.
25. Lessee assumes full responsibility for protecting, at all times, the
Premises, the Outdoor Balcony Area and all personal effects of Lessee, its
employees, agents and invitees, from theft, robbery and pilferage, which
includes keeping doors locked and other means of entry to the Premises closed
and secured, and Lessor shall have no liability with respect thereto.
26. Lessee shall not install or operate machinery, equipment or any mechanical
or electrical device of a nature not directly related to Lessee’s ordinary use
of the Premises, without the written permission of Lessor.
27. Lessee shall not be entitled, solely by virtue of this Lease, to use or
patronize any service, business or facility in the Building (excluding common
and parking areas to the extent provided in the Lease), but may become entitled
to use or patronize the same by satisfactory arrangements with the operator of
such business or facility.
28. Lessee shall place all refuse or trash in receptacles provided for the
Project by Lessor. If Lessee creates an unusual amount of trash in the
reasonable opinion of Lessor and Lessor so requests in writing, Lessee shall
provide, at its own cost, for its own trash disposal and pickup at such
intervals as Lessor may deem reasonably necessary so that no refuse or trash is
visible on the Premises or the Outdoor Balcony Area.
29. Lessor shall have the right to designate and/or approve, prior to
installation on the Premises, all types of window shades, blinds, drapes,
awnings, window ventilators and other similar window coverings and equipment.

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By executing a copy of these Project Rules and Regulations, Lessee agrees that
it has read and understands the same, and will comply with all of the provisions
contained herein, as may be amended by Lessor from time to time.

              LESSEE:
 
            RENEGY HOLDINGS, INC., a Delaware corporation
 
       
 
  By:   /s/ Robert Zack
 
       
 
  Its:   Chief Finanical Officer
 
            Date: January 16, 2008

 

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EXHIBIT “C”
CONSTRUCTION OBLIGATIONS OF LESSOR AND LESSEE
This Exhibit “C” sets forth the respective obligations of, and the procedures to
be followed by, Lessor and Lessee in the design and construction of the Premises
described in the Lease to which this Exhibit is attached, and the payment of
design and construction costs. Capitalized terms used herein that are not
otherwise defined shall have the meanings set forth in the Lease.
1. Lessor’s Obligations. The only improvements to be constructed by Lessor
within the Premises (to which the Tenant Improvement Allowance shall apply as
provided in Article XIV of the Basic Lease Information) shall be the
improvements of the type generally described on Schedule “1” attached hereto in
the quantities (and subject to the modifications and qualifications) set forth
in the Final TI Plans (as hereafter defined) for the Premises (collectively
referred to hereafter as “Lessor’s Work”); provided that (i) Lessor will provide
at its expense the Building shell improvements listed on Schedule “2” attached
hereto, and (ii) the specifications listed on Schedule “1” attached hereto may
be hereafter modified from time to time by Lessor in a commercially reasonable
manner. Subject to the performance by Lessee of all of its obligations set forth
in this Exhibit, Lessor will obtain a certificate of completion or occupancy
required by the local building department or governmental agency with respect to
the Premises. The foregoing notwithstanding, Lessor shall not be obligated to
incur any costs or expenses for Lessor’s Work for the Premises in excess of the
Tenant Improvement Allowance, and Lessee shall be responsible for paying all
costs and expenses incurred by Lessor in designing, performing, and getting
permits for Lessor’s Work in excess of the Tenant Improvement Allowance as set
forth in the Basic Lease Information, subject to the terms and conditions set
forth in this Exhibit and the Lease. The Tenant Improvement Allowance will be
applied to all hard and soft costs necessary or appropriate to complete Lessor’s
Work, including without limitation, all costs of labor and materials, fees for
architectural, engineering design, and construction drawings (including a space
plan for the Premises), and other professional fees and permitting fees, subject
to the terms and conditions set forth in this Exhibit and the Lease. If the
actual Cost of the TI Work (as defined in Section 3.3) exceeds the Tenant
Improvement Allowance, then Lessee shall reimburse Lessor for the Excess Cost of
the TI Work (as defined in Section 3.6) in the manner provided in Section 6
below. The foregoing notwithstanding, Lessor’s Work and the obligation of Lessor
to pay for the cost thereof shall not include the cost of repairing any damage
or injury resulting from the acts or omissions of Lessee or its subtenants and
their respective employees, agents, or contractors (“Lessee Caused Damage”). All
Lessee Caused Damage shall be promptly repaired by Lessee at its expense.
2. Lessee’s Obligations.
2.1 Lessor’s obligation to construct or improve the Premises shall be strictly
limited to Lessor’s Work. All other work and improvements required for the
operation of Lessee’s business at the Premises, including without limitation
installation and delivery of Lessee’s Telecommunications Equipment, furniture,
fixtures and equipment, and other property constituting Lessee’s Property, and
all Lessee Caused Damage to the Premises, the Building, or any other
improvements (collectively, “Lessee’s Work”), shall be performed, completed, and
installed by Lessee at its expense (subject to Lessor’s approval rights as
provided in the Lease

 

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and this Exhibit “C”). Within ten (10) business days prior to the date Lessor
and Lessee determine in good faith will be the date Lessor will have
Substantially Completed Lessor’s Work in the Premises, and subject to the
conditions set forth in Section 2.2 of the Lease, Lessee shall be allowed to
enter upon the Premises to perform Lessee’s Work with respect thereto; provided,
however, that Lessee, its agents, employees and contractors, shall not
unreasonably interfere with the performance of Lessor’s Work in the Premises,
and shall be responsible for repairing, at Lessee’s expense, all Lessee Caused
Damage.
2.2 All of Lessee’s Work shall be performed (i) through the services of a
licensed, bonded and insured contractor approved in writing by Lessor (such
approval shall not be unreasonably withheld, (ii) in a good and workmanlike
manner, (iii) in compliance with Article 11 of the Lease, (iv) in accordance
with Lessee’s Plans and Specifications (as hereafter defined in this Section),
if any are reasonably required by Lessor given the nature and scope of Lessee’s
Work, and (v) in compliance with the Lease and all applicable statutes,
ordinances, rules, regulations and building codes of any governmental authority
having jurisdiction over the Premises. Lessor agrees not to unreasonably
withhold its approval of each set of preliminary plans and specifications
submitted to it by Lessee for Lessee’s Work (if any are required by Lessor as
herein provided); provided, however, that the parties agree it shall be
reasonable for Lessor to withhold its approval of Lessee’s Work, and/or plans
and specifications for Lessor’s Work (pursuant to Sections 4 and 5 below), if
the work, materials, and/or improvements contemplated thereby:
(a) exceed or adversely affect the structural integrity of the Building or any
portion thereof, or any material part of the heating, ventilation, air
conditioning, plumbing, mechanical, electrical, communication, elevators, or
other systems of the Building or Lessor’s Parcel without appropriate
supplemental measures being taken by Lessee;
(b) would not be approved by a prudent owner of property similar to the
Building, or its lenders;
(c) will reduce the market value of the Premises or the Building in the
reasonable opinion of Lessor;
(d) do not conform to applicable codes, ordinances, and other governmental
requirements or is not approved by any governmental authority with jurisdiction
over the Building;
(e) in Lessor’s reasonable determination, do not conform to the standards set
forth on Schedule “1” attached hereto;
(f) would detrimentally affect the exterior appearance and design of the
Building and Lessor’s Parcel; and/or
(g) in Lessor’s reasonable determination, are unacceptable for any other
material reason not set forth herein.

 

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If any plans and specifications are required by Lessor as provided above, then
Lessee shall submit professionally prepared preliminary plans and specifications
for Lessee’s Work, and Lessor shall issue its written approval or disapproval
(giving general reasons in the case of disapproval) within ten (10) business
days of its receipt of each set of such preliminary plans and specifications. If
Lessor fails to respond within said 10-business day period, Lessor’s approval
shall be deemed given. If Lessor disapproves of any such preliminary plans and
specifications for Lessee’s Work, Lessee shall revise the same to address the
areas of disapproval and re-submit the same hereunder until Lessor approves
thereof. Upon approval by Lessee, the same shall be deemed “Lessee’s Plans and
Specifications” referred to herein.
2.3 Before entering the Premises, Lessee’s Contractor (in addition to the
insurance requirements applicable to Lessee in the Lease) must provide proof of
insurance (including builder’s risk, worker’s compensation and liability
insurance) in commercially reasonable amounts and with commercially reasonable
coverages reasonably required by Lessor, with each policy naming Lessor as an
additional insured, as applicable. All subcontractors shall also be duly
licensed, bonded and insured in a commercially reasonable manner.
2.4 Lessee shall provide a complete list of all contractors and subcontractors
entering the Building and all contractors and subcontractors shall abide by the
rules and hours established by Lessor from time to time.
2.5 In no event shall Lessee, as part of Lessee’s Work, be entitled to connect
to, alter, and/or modify in any way, the structure of the Building, and/or
plumbing, mechanical, HVAC, energy management systems, fire sprinkler and fire
alarm systems and other systems and equipment comprising the Building.
2.6 Lessee, its contractors, agents, employees and invitees, shall have no right
of access to, or use of, the roof of the Building.
2.7 During the course of Lessee’s Work, Lessor may enter upon the Premises at
all reasonable times for the purpose of inspecting Lessee’s Work. If Lessor
finds any workmanship inferior, defective or not in accordance with Lessee’s
Plans and Specifications, the Lease or this Exhibit “C”, Lessee shall promptly
correct the same. Lessor’s authority to act under this subsection shall not give
rise to a duty of Lessor to make inspections or otherwise enforce Lessee’s
compliance with the terms of the Lease, this Exhibit “C”, or Lessee’s Plans and
Specifications. Lessee’s failure to comply with the terms of this Exhibit “C” or
the Lease shall constitute a default under the Lease.
2.8 All work performed by Lessee, or any fixtures or personal property moved
onto and/or installed in the Premises during the completion of Lessee’s Work,
shall be at Lessee’s own risk; Lessee bears the risk of loss with respect
thereto and shall be responsible for insuring the same. Neither Lessor nor its
employees, agents, or contractors shall be responsible to Lessee for damage to,
or the loss or destruction of Lessee’s Work or property, except for their
respective reckless and intentional misconduct and, subject to the foregoing,
any damage, cost or expense incurred by Lessor or its other tenants as a result
of Lessee’s construction shall be the sole responsibility of Lessee. In no event
shall Lessor be responsible for providing security or monitoring services to
prevent any loss or theft of Lessee’s furniture, fixtures, equipment, tools,
materials, supplies or personal property.

 

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3. Definitions. As used herein, the following terms shall have the following
meanings:
3.1 “Approved Space Plan” shall mean the space plan and specifications for
Lessor’s Work for the Premises approved by Lessor and Lessee pursuant to
Section 4 of this Exhibit.
3.2 “Construction Drawings” shall mean the full and detailed architectural and
engineering plans and specifications covering Lessor’s Work for the Premises
(including, without limitation, architectural, mechanical and electrical working
drawings for Lessor’s Work). Each set of Construction Drawings shall be based on
the Approved Space Plan for the Premises.
3.3 “Cost of the TI Work” shall mean and include any and all costs and expenses
of Lessor’s Work for the Premises, including, without limitation, the following
applicable thereto: fees and costs of the TI Architect and engineers for the
preparation and printing of each set of the preliminary plans and
specifications, Approved Space Plan, Construction Drawings and Final TI Plans,
permit fees and the costs of all labor (including overtime), supplies and
materials associated with the improvements to the Premises, including any wall
treatments, floor coverings and/or other improvements included within the scope
of Lessor’s Work.
3.4 “Cost Statement” shall mean a written statement of the total Cost of the TI
Work for the Premises; each Cost Statement will be determined in accordance with
the process described in Section 7 of this Exhibit, and approved by Lessee and
Lessor to the extent provided in Section 7. Each Cost Statement shall indicate a
calculation of the Excess Cost of the TI Work for the Premises.
3.5 “Delays Caused by Lessee” shall mean delays in the completion of any portion
of Lessor’s Work caused by Lessee or its agents, employees, contractors,
architects, or engineers, arising from the following: (i) the performance or
completion of any work in the Premises by Lessee, its agents, employees,
contractors, architects, or engineers that damages, alters, or otherwise
adversely affects any portion of Lessor’s Work, (ii) Lessee’s failure to comply
with any codes, regulations, or other legal requirements relating to Lessee’s
Work that results in any portion of Lessor’s Work being delayed, halted, or
shut-down, (iii) Lessee’s breach of the terms of this Exhibit or other
provisions of the Lease relating to Lessee’s Work, (iv) any error in the Final
TI Plans or other related construction documents caused by Lessee, its
employees, agents, contractors, architects, space planners, or engineers, and/or
(v) the negligence or willful misconduct of Lessee, its employees, agents,
contractors, architects or engineers.
3.6 “Excess Cost of the Work “ shall mean the amount, if any, set forth in each
Cost Statement by which the Cost of the Work for the Premises exceeds the Tenant
Improvement Allowance applicable to the Premises.
3.7 “Final TI Plans” shall mean, with respect to the Premises, the Approved
Space Plan, and the approved Construction Drawings therefor, as the same may be
revised or modified in accordance with the terms and conditions set forth
herein.
3.8 “Lessor’s Work” shall have the meaning set forth in Section 1.1 of this
Exhibit and, in addition, shall include all design and engineering work, space
planning, permits, labor, supervision, materials, fixtures, special facilities,
equipment, tools, supplies, taxes, occupancy permits and related inspections,
and services necessary to timely and properly produce all work, provide
necessary materials, and complete the construction required by, or reasonably
inferable from, the Final TI Plans for the Premises, and all work, services and
materials necessary to produce fully connected, complete, operational, and
functional systems and finishes in the Premises.

 

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3.9 “Substantial Completion,” “Substantially Complete,” “Substantially
Completed” or similar capitalized terms shall mean the stage in the progress of
Lessor’s Work when the last of the following have occurred with respect to the
Premises: (i) Lessor’s Work is sufficiently complete in accordance with the
Final TI Plans so that Lessee may occupy the Premises and utilize the same for
its permitted business, subject to the completion of any minor punchlist items
that do not unreasonably interfere with Lessee’s occupancy and use of the
Premises; and (ii) a certificate of occupancy or its equivalent (unless the same
cannot be issued due to the incompletion of Lessee’s Work) permitting the use
and occupation of the Premises shall have been issued by the City.
3.10 “TI Architect” shall mean Phoenix Design One, Inc.
4. Approved Space Plan. Within five (5) business days after execution of this
Lease, with respect to the Premises, the parties will cause the TI Architect to
prepare and provide to Lessor preliminary plans and specifications for
improvements to be made to the Premises which are acceptable to Lessee, in its
reasonable, good faith judgment. Such preliminary plans and specifications shall
be subject to Lessor’s review and approval. Lessor agrees not to unreasonably
withhold, condition or delay its approval of each set of such preliminary plans
and specifications, subject to the criteria in Section 2.2 above. Lessor shall
issue its written approval or disapproval (giving general reasons in the case of
disapproval) within ten (10) business days of its receipt of the respective
preliminary plans and specifications. If Lessor fails to respond within said
10-business day period, Lessor shall be deemed to have disapproved the same. If
Lessor disapproves of any such preliminary plans and specifications, then the TI
Architect, in consultation with Lessor and after having obtained Lessor’s
approval, in its reasonable discretion, will revise and re-submit the same
hereunder until Lessor approves thereof.
5. Final TI Plans. If necessary for the performance of Lessor’s Work and to the
extent not included as part of the Approved Space Plan applicable to such
portion of Lessor’s Work, TI Architect will prepare the Construction Drawings
therefore, based on and consistent with the applicable Approved Space Plan,
within twenty-five (25) business days following Lessor’s written approval of the
Approved Space Plan. The Construction Drawings shall also be subject to Lessor’s
reasonable approval and the approval of all local governmental authorities who
need to approve the work and/or the Construction Drawings. Lessor shall give its
approval or disapproval (giving general reasons in case of disapproval) of the
Construction Drawings in writing within ten (10) business days after their
delivery. Lessor and Lessee each agree not to unreasonably withhold, condition
or delay its approval of the Construction Drawings (subject to the criteria in
Section 2.2 applicable to Lessor’s approval). If Lessor notifies Lessee that
changes are required to the Construction Drawings so submitted (such changes to
be reasonable and not inconsistent with the Approved Space Plan), the TI
Architect shall, within ten (10) business days thereafter, submit to Lessor for
its approval, such Construction Drawings amended in accordance with the changes
so required. The Construction Drawings shall also be revised, and Lessor’s Work
as shown thereon shall be changed, to incorporate any work required in the
Premises by any local governmental field inspector (the cost of which shall be
included in the respective Cost of the TI Work.

 

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6. Cost of the TI Work. Lessor shall pay all of the Cost of the TI Work,
including, but not limited to, design, architectural, engineering and permit
fees (including, without limitation, all fees of the TI Architect), up to the
amount of the Tenant Improvement Allowance. Lessee shall be responsible for the
Excess Cost of the TI Work, as determined in accordance with Sections 1 and 3.6
hereof, and shall reimburse Lessor for the Excess Cost of the TI Work within
fifteen (15) days after Lessor commences Lessor’s Work; provided, however, that
Lessee may elect (in Lessee’s discretion), by written notice to Lessor within
said 15-day period, to amortize the Excess TI Cost, up to an amount not to
exceed Five Dollars ($5.00) per usable square foot in the Premises (i.e., the
maximum amount would be 6,806 usf x $5.00 = $34,030.00), over months six
(6) through sixty-five (65) of the Lease Term at a rate per annum equal to ten
percent (10%) and the resulting monthly amount so amortized will be added to the
Base Rental due for the Premises during said portion of the Lease Term.
7. Bidding Process. Following the approval of the Construction Drawings by
Lessor and Lessee, Lessor shall release the same to Lessor’s preferred general
contractor who shall reasonably solicit bids from at least two
(2) subcontractors for those applicable trades in which at least two
(2) qualified subcontractors are reasonably available. Lessor’s preferred
general contractor shall be required to provide a bid by no later than fifteen
(15) business days after receipt of the approved Constructing Drawings. If the
total Cost of the TI Work (based on the bid, as may be amended based on approved
change orders, plus the cost of the permit fees that Lessor will pay directly
and not as part of the construction contract) exceeds the Tenant Improvement
Allowance, then Lessor and Lessee shall, within thirty (30) business days after
receipt by Lessor and Lessee of such bids, make such revisions to the Final TI
Plans as are necessary to cause the total Cost of the TI Work to be equal to or
less than the Tenant Improvement Allowance (but subject to Lessor’s reasonable
approval and the criteria in Section 2.2 above); provided that if such revisions
require the City’s approval, any delay resulting therefrom that delays Lessor’s
Work will constitute a Delay Caused by Lessee. Upon approval of such revisions
to the Final TI Plans by Lessor, Lessee, and the City, Lessor shall (i) prepare,
and prior to commencing Lessor’s Work, submit to Lessee the revised Cost
Statement and (ii) enter into a contract with Lessor’s preferred general
contractor for Lessor’s Work on a lump sum contract basis, subject to only the
cost of change orders requested by Lessee in accordance with the terms and
conditions of this Exhibit, and setting forth a date on which construction shall
be completed pursuant to the aforementioned mutually agreeable schedule. Lessor
shall not be paid a construction management fee.
8. Performance of Lessor’s Work. Following the procedures described in Section 7
above, and subject to Section 2.3 of the Lease, Lessor shall cause Lessor’s Work
to be performed in a good and workmanlike manner and in accordance with the
Final TI Plans.
9. Progress Reports. Lessor shall consult with Lessee from time to time
concerning the scheduling and progress of Lessor’s Work to keep Lessee informed
of the progress and the estimated completion date of Lessor’s Work. Lessor will
notify Lessee as soon as reasonably possible after the occurrence of an event
that results in any material changes in Lessor’s construction schedule.

 

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10. Modifications to the Plans. Changes to the Final TI Plans shall be made as
part of the Cost of the TI Work, including changes made for the purpose of
complying with any applicable legal requirements, and the Cost Statement will be
adjusted accordingly. It is further agreed that Lessee shall otherwise be
entitled to make changes in the Final TI Plans only as hereinafter set forth.
Lessee shall be entitled to change the Final TI Plans only with respect to work
that has not yet been completed to an extent that material changes to existing
work will be required. Within five (5) business days after Lessee requests such
permitted changes by written notice to Lessor (“Lessee’s Change Order Notice”),
Lessor shall submit to Lessee a statement of the estimated cost of such changes,
if any, based on a price quote from Lessor’s contractor pursuant to the change
order pricing provisions in the construction contract for Lessor’s Work. Lessee
shall notify Lessor within two (2) business days after Lessor’s statement is
delivered to Lessor, whether or not Lessee desires Lessor to proceed with such
changes. If Lessee fails to so notify Lessor, then Lessee’s Change Order Notice
shall be deemed withdrawn. Otherwise, the Cost Statement will be adjusted
accordingly. The foregoing notwithstanding, any change order requested by Lessee
pursuant hereto (whether Lessee elects to implement them or not) and related
pricing and other negotiations and additional work that delays Lessor’s Work
will constitute a Delay Caused by Lessee.
11. Substantial Completion; Punchlist. Lessor will provide Lessee with written
notice of Lessor’s estimated Substantial Completion date for the Premises
approximately fifteen (15) days prior to said estimated date. Thereafter, Lessor
shall give Lessee written notice of the date on which Lessor has actually
reached Substantial Completion for the Premises. Within five (5) business days
after receipt of said written notice, Lessee shall cause the Premises to be
inspected and give Lessor written notice specifying in good faith any punchlist
items Lessor needs to address. Within three (3) business days following Lessor’s
receipt of Lessee’s proposed punchlist, the parties shall jointly inspect
Lessor’s Work and agree in good faith on a final written list of the actual
unfinished portions of Lessor’s Work (the “final punchlist”). Lessor shall
repair, replace, and/or complete any such items on the final punchlist within
thirty (30) days thereafter.

 

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SCHEDULE “1”
[to Exhibit “C”]
LESSOR’S WORK — BUILDING STANDARDS

     
Demising & Corridor
Partitioning
 

Full-height demising partition with 5/8" Type-X gypsum wallboard attached to
both sides of 3 5/8" 20-gauge metal studs at 24" on center. Demising partition
to extend to underside of floor deck and to have smooth finish and eggshell
paint on the Lessee side.
 
   
 
 
One-hour-rated corridor partition to have the same construction as the demising
partition, with fire taping and caulking as required by code, R-11 insulation,
gypsum board, and sound caulking at floor. Corridor side of the partition wall
to be finished with wall covering and 61/2" hardwood base (stained to match
Architect’s sample); Lessee side of the partition to be finished as specified in
Lessee’s drawings.
 
   
Lessee Partitioning
 
21/2" 25-gauge metal studs at 24" on center with one layer of 5/8" gypsum
wallboard on both sides. Partitions to extend from floor to underside of ceiling
grid or 6" above ceiling, at Lessor’s option, with smooth finish, eggshell
paint, and base on both sides.
 
   
Lessee Entry
Doors/Frames
 

Recessed 3'-0" x 7'-10" x 13/4" solid-core, quarter-sliced, medium-figured
cherry veneer doors (stained to match Architect’s sample) with mortised lever
lockset and Western Integrated door frame with 302 trim and clear-anodized
finish. Entry doors to have a single light in door panel, fire rated as required
by code. A secondary entry/exit door (without sidelight) shall be provided, if
required by code. Entire door assembly to have a 20-minute fire rating.
 
   
Lessee Interior
Doors/Frames
 

3'-0" x 7'-10" x 13/4" solid-core, quarter-sliced, medium-figured cherry veneer
door (stained to match Architect’s sample). Western Integrated door frame, 302
trim, with clear-anodized finish.

 

Schedule 1 to Exhibit C - Page 1

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Lessee Entry Hardware
 
Schlage mortised lever lockset with 07 lever, finish to be US26D satin chrome.
LCN closer 4040 series. 2 pair Hager ball bearing butt hinges, 41/2" x 41/2",
with wide throw capacity, finish to be US26D. Trimco wall stop, finish to be
US26D. Keying hardware to coordinate with Building and floor master.
 
   
Lessee Interior Hardware
 
Schlage cylindrical lever latch set with 07 lever, finish to be US26D satin
chrome. 2 pair Hager butt hinges, 41/2" x 41/2", with wide throw capacity,
finish to be US26D. Trimco wall stop, finish to be US26D. If required, LCN
closer 4040 series.
 
   
Acoustical Ceiling
 
Suspended white 2' x 2' Armstrong Ultima 1912 ceilings with DuraBrite
acoustically transparent membrane; NRC .70; LRV .89; square tegular in 9/16"
grid.
 
   
Floor Covering
 
Carpet: Shaw, 24 - 30 oz. weight and 1/18 - 1/10-gauge broadloom carpet with
“Action Bac”.
 
   
 
 
Vinyl composition tile (ACT): Armstrong “Imperial Texture, Standard Excel on” or
equal, 12" x 12", 1/8"-gauge.
 
   
Base
 
Rope or equal, 4" rubber base. Base to be 4"-high coved rubber base throughout,
or as noted otherwise in Lessee’s drawings.
 
   
Paint
 
Dunn Edwards “Supreme,” Fraise “Lo Go,” or equal, eggshell paint on smooth
finish.
 
   
Window Coverings
 
1" mini-blinds with dust guard at all exterior windows, Leveler or equal,
provided by Building owner. Mini-blinds must be either fully raised in lock-up
position or fully lowered.
 
   
Fire Extinguisher Cabinet
 
Larsen’s architectural series 2, semi-recessed, 1/2" rolled edge with brushed
stainless finish, or equal.
 
   
Fire Protection Sprinkler
System
 

Semi-recessed white sprinkler head with white escutcheon, centered in ceiling
tile. Necessary sprinkler drops to meet City codes. Fully concealed white
sprinkler head on drywall ceilings/soffits/headers at Lessor’s option.

 

Schedule 1 to Exhibit C - Page 2

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HVAC
 
2' x 2' 4-way white diffuser and perforated return-air grille, thermostat
installation, flexible duct and air devices. All thermostats to be coordinated
with light switches, per Architect. Alternative upgrades: Titus, Omni (see
Schedule 3).
 
   
Lessee Light Fixtures
 
Suspended linear ambient uplight. Peerlite, Cerra 7, 7CRM7-1 or equal, with
single T5 (3500ºK) lamp, minimum 54 watts, available in lengths of 4', 8', and
12'. Bottom of fixture mounted at 8'-0" above finished floor. Coordinate with
Building owner for orientation of fixtures.
 
   
Light Switches
  Single-pole rocker switch, cover plate white.
 
   
Exit Lights
 
Provided as required by City codes. Lithonia “Precise Collection” “LRP” exit
lights. LED lamps, red letters on clear mirrored background.
 
   
Electrical Convenience
Outlet
 
Duplex wall outlet, cover plate white.
 
   
Data/Telephone Outlet
 
Rough-in box with mud ring and pull string. Lessee will coordinate with its
communications equipment company to obtain detailed requirements for inclusion
in construction plans and schedule.
 
   
Telephone Mounting Board
 
One 4' x 8' x 3/4" ACX fire-rated plywood mounting board, plywood painted to
match adjacent walls. (Smaller lessees may require only a 4' x 4' mounting
board).

 

Schedule 1 to Exhibit C - Page 3

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SCHEDULE “2”
[to Exhibit “C”]
ADDITIONAL ITEMS TO BE PROVIDED BY LESSOR AT ITS COST

     
Window Coverings
  1" mini-blinds with dust guard at all exterior windows, Levelor or equal,
provided by Building owner. Mini-blinds must be either fully raised in lock-up
position or fully lowered.
 
   
Fire Protection Sprinkler
System
 
The main high-pressure primary distribution loop around core area of the
Premises will be provided by Lessor at its expense; however, all extension lines
from the primary loop, drops, sprinkler heads, and similar equipment required by
code for the Premises will be part of the Cost of the TI Work.
 
   
HVAC
  Condenser water available for primary high pressure distribution loop for the
HVAC system around core area of the Premises will be provided by Lessor at its
expense; however, all ductwork distribution, VAV boxes, heat pumps, vents,
thermostats, supplemental units and similar equipment for the Premises will be
part of the Cost of the TI Work.

 

Schedule 2 to Exhibit C - Page 1

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EXHIBIT “D”
DESCRIPTION OF LESSEE’S PROPERTY
None.

 

 

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EXHIBIT “E”
RIGHTS RESERVED BY LESSOR
Notwithstanding any other provisions in the Lease, Lessor reserves the following
rights:
1. Lessor shall have the right to use the parking areas and other areas outside
of the buildings within the Project for the promotion and marketing of space
within the Project, or within property adjacent to or near the Project which may
be developed by Lessor or a member, affiliate or subsidiary of Lessor, including
without limitation, the right to maintain signs and other promotional devices on
the Project.
2. Lessor shall have the right to construct additional improvements within the
Project to improve and enhance the same, including without limitation,
additional landscaping and other common facilities.
3. Lessor, or any member, affiliate or subsidiary of Lessor, or an entity
related to a member of Lessor, may construct additional phases similar to or
compatible with the Project, including office, retail, restaurant, hotel and
residential uses, and may connect the same to the parking facilities and other
common areas of the Project to provide access upon and across the parking areas,
driveways, and other paved surfaces of the Project for vehicular and pedestrian
ingress and egress to and from such additional phases.
4. Lessor further reserves the right to grant temporary or permanent easements
from time to time for construction, access, utilities, drainage and/or other
purposes for the development of property within or adjacent to the Project,
provided that such easements shall not materially and adversely impair the use
of the parking areas, driveways, and other paved surfaces within the Project.
5. Lessor reserves the right to name or rename the Project or the Building or to
change the name and/or street address of the Project or Building, which may
constitute or include the name of another tenant or occupant in the Building or
the Project.
6. The right to grant to anyone the exclusive right to conduct any business upon
and/or render any service to the Project, provided such exclusive right shall
not operate to exclude Lessee from using the Premises for the purposes
specifically set forth in the Basic Lease Information.
7. The right to designate and/or control any service in or to the Building and
its tenants or occupants.
8. The right not to enforce a particular rule or regulation against a particular
tenant in Lessor’s sole discretion; provided, however, that Lessor agrees the
rules and regulations will, to the extent reasonably practicable, be enforced in
a non-discriminatory manner against all similarly situated tenants or occupants
of the Project.

 

 

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9. The right to allow portions of the common areas within or outside the
Building to be used (i) exclusively by certain tenants or occupants of the
Project (including without limitation for outdoor seating for restaurants and
bars), and/or (ii) for kiosks, displays, carts or stands, and/or (iii) for ATM
machines, mailboxes, overnight courier dropboxes, or other equipment or
concessions.
The foregoing rights in favor of Lessor shall not in any way be construed as
creating any obligation on the part of Lessor to exercise any such rights or to
perform any of the activities, construct any improvements, develop any property,
or grant any easements referred to in this Exhibit “E”. The foregoing rights are
exercisable without notice to Lessee or liability for any inconvenience suffered
by Lessee as a result thereof (including without limitation any diminution of
light, air or view), and Lessee shall not be entitled by reason thereof to
terminate this Lease or to receive an abatement or reduction of any rental
provided for under this Lease.

 

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