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EXHIBIT 10.42
STANDARD COMMERCIAL LEASE
ARTICLE 1.00 BASIC LEASE TERMS
1.01 Parties. This lease agreement ("Lease") is entered into by and between
the following Lessor and Lessee:
XXXXXXXX PLACE ONE JOINT VENTURE ("Lessor")
DNA ENTERPRISES, INC. ("Lessee")
1.02 Leased Premises. In consideration of the rents, terms, provisions and
covenants of this Lease, Lessor hereby leases, lets and demises to Lessee the
following described premises ("leased premises"):
20,679 (Approximate square feet)
XXXXXXXX PLACE (Name of building or project)
0000 X. XXXXXXXX XXXX (Xxxxxx address/suite number)
XXXXXXXXXX, XX. 00000 (City, State, and Zip Code)
1.03 Term. Subject to and upon the conditions set forth herein, the term of
this Lease shall commence on ( FEBRUARY 1, 1997 the "commencement date") (the
"completion date", which Lessor shall use its best efforts to establish as
FEBRUARY 1, 1997 ), and shall terminate 84 months thereafter.
1.04 Base Rent and Security Deposit. Base rent is $ 16,371.00 per month.
Security deposit is $ 16,371.00 .
1.05 Addresses.
Lessor's Address: Lessee's Address
XXXXXXXX PLACE ONE JOINT VENTURE DNA ENTERPRISES, INC.
X.X. XXX 000000 0000 X. XXXXXXXX XXXX
XXXXXX, XX. 00000 XXXXXXXXXX, XX. 00000
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1.06 Permitted Use. GENERAL OFFICE AND STORAGE FOR TELECOMMUNICATIONS;
HARDWARE AND SOFTWARE TECHNOLOGY, SYSTEM ARCHITECTURE, AND SIGNAL PROCESSING
AND ANY OTHER GENERAL OFFICE AND STORAGE USE PERMISSIBLE BY LAW.
ARTICLE 2.00 RENT
2.01 Base Rent. Lessee agrees to pay monthly as base rent during the term of
this Lease the sum of money set forth in section 1.04 of this Lease which
amount shall be payable to Lessor at the address shown above or to such other
party or address as Lessor may from time to time designate. One monthly
installment of rent shall be due and payable on the date of execution of this
Lease by Lessee for the first month's rent and a like monthly installment shall
be due and payable on or before the first day of each calendar month succeeding
the commencement date or completion date during the term of this Lease;
provided, if the commencement date or the completion date should be a date
other than the first day of a calendar month, the monthly rental set forth
above shall be prorated to the end of that calendar month, and all succeeding
installments of rent shall be payable on or before the first day of each
succeeding calendar month during the term of this Lease. Lessee shall pay, as
additional rent, all other sums due under this Lease.
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2.02 Operating Expenses. In the event Lessor's operating expenses for the
building and/or project of which the leased premises are a part shall, in any
calendar year during the term of this Lease, exceed the sum of 1997 BASE YEAR
per square foot, Lessee agrees to pay as additional rent Lessee's pro rata
share of such excess operating expenses. However, notwithstanding any
provision to the contrary in this Lease, Lessee's prorata share of such
operating expenses other than taxes, insurance and utilities shall not increase
by more than seven percent (7%) per year over the base year during the term of
the Lease or any renewal thereof. Lessor may invoice Lessee monthly for
Lessee's pro rata share of the estimated operating expenses for each calendar
year, which amount shall be adjusted each year based upon anticipated operating
expenses. Within three months following the close of each calendar year,
Lessor shall provide Lessee an accounting showing in reasonable detail all
computations of additional rent due under this section. In the event the
accounting show that the total of the monthly payments made by Lessee exceeds
the amount of additional rent due by Lessee under this section, the accounting
shall be accompanied by a refund. In the event the accounting shows that the
total of the monthly payments made by Lessee is less than the amount of
additional rent due by Lessee under this section, the account shall be
accompanied by an invoice for the additional rent. Notwithstanding any other
provision in this Lease, during the year in which the Lease terminates, Lessor,
prior to the termination date, shall have the option to invoice Lessee for
Lessee's pro rata share of the excess operating expenses based upon the
previous year's operating expenses. If this Lease shall terminate on a day
other than the last day of a calendar year, the amount of any additional rent
payable by Lessee applicable to the year in which such termination shall occur
shall be prorated on the ratio that the number of days from the commencement of
the calendar year to and including their termination date bears to 365. Lessee
shall have the right at its own expense and during normal business hours, to
audit and photocopy Lessor's books relevant to the additional rent payable
under this section. Lessee agrees to pay any additional rent due under this
section within ten days following receipt of the invoice or accounting showing
additional rent due.
2.03 Definition of Operating Expenses. The term "operating expenses" includes
all expenses incurred by Lessor with respect to the maintenance and operation
of the building of which the leased premises are a part, including, but not
limited to, the following: maintenance, repair and replacement costs;
security; management fees, wages and benefits payable to employees of Lessor
whose duties are directly connected with the operation and maintenance of the
building; all services, utilities, supplies, repairs, replacements, or other
expenses for maintaining and operating the common parking and plaza areas; the
cost, including interest, amortized over its useful life, of
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any capital improvement made to the building by Lessor after the date of this
Lease which is required under any governmental law or regulation that was not
applicable to the building at the time it was constructed; the cost, including
interest, amortized over its useful life, of installation of any device or other
equipment which improves the operating efficiency of any system within the
leased premises and thereby reduces operating expenses; all other expenses which
would generally be regarded as operating and maintenance expenses which would
reasonably be amortized over a period not to exceed five years; all real
property taxes and installments of special assessments, including dues and
assessments by means of deed restrictions and/or owners' associations which
accrue against the building of which the leased premises are a part during
the term of this Lease; and all insurance premiums Lessor is required to pay or
deems necessary to pay, including public liability insurance, with respect to
the building. The term operating expenses does not include the following:
repairs, restoration or other work occasioned by fire, wind, the elements or
other casualty; income and franchise taxes of Lessor; expenses incurred in
leasing to or procuring of lessees, leasing commissions, advertising expenses
and expenses for the renovating of space for new lessees; interest or principal
payments on any mortgage or other indebtedness of Lessor; compensation paid to
any employee of Lessor above the grade of property manager; any depreciation
allowance or expense; or operating expenses assumed hereunder by Lessee.
2.04 Late Payment Charge. Other remedies for nonpayment of rent
notwithstanding, if the monthly rental payment is not received by Lessor on or
before the tenth day of the month for which the rent is due, or if any other
payment due Lessor by Lessee is not received by Lessor on or before the tenth
day of the month next following the month in which Lessee was invoiced, a late
payment charge of ten percent of such past due amount shall become due and
payable in addition to such amounts owed under this Lease.
2.05 Increase in Insurance Premiums. If an increase in any insurance premiums
paid by Lessor for the building is caused by Lessee's use of the leased
premises in a manner other than as set forth in section 1.06, or if Lessee
vacates the leased premises and causes an increase in such premiums, then
Lessee shall pay as additional rent the amount of such increase to Lessor.
2.06 Security Deposit. The security deposit set forth above shall be held by
Lessor for the performance of Lessee's covenants and obligations under this
Lease, it being expressly understood that the deposit shall not be considered
an advance payment of
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rental or a measure of Lessor's damage in case of default by Lessee. Upon the
occurrence of any event of default by Lessee or breach by Lessee of Lessee's
covenants under this Lease, Lessor may, from time to time, without prejudice to
any other remedy, use the security deposit to the extent necessary to make good
any arrears of rent, or to repair any damage or injury, or pay any expense or
liability incurred by Lessor as a result of the event of default or breach of
covenant, and any remaining balance of the security deposit shall be returned by
Lessor to Lessee upon termination of this Lease. If any portion of the security
deposit is so used or applied, Lessee shall upon ten days written notice from
Lessor, deposit with Lessor by cash or cashier's check an amount sufficient to
restore the security deposit to its original amount. Lessor shall not be
required to keep the security deposit separate from its other accounts and no
trust relationship is created with respect to the security deposit. No interest
shall be paid on the security deposit. Provided Lessee is not then in default,
the security deposit held by Lessor, if any, will be applied to the
thirty-sixth (36th) month of the lease term.
2.07 Holding Over. Lessee shall vacate the leased premises upon the
expiration of the Lease Term or earlier termination of this Lease. Lessee shall
reimburse Lessor for and indemnify Lessor against all reasonable damages
incurred by Lessor as a result of any delay by Lessee in vacating the leased
premises. If Lessee does not vacate the leased premises upon the expiration of
the Lease Term or earlier termination of the Lease, Lessee's occupancy of the
leased premises shall be a "month to month" tenancy, subject to all the terms of
Lease applicable to a month to month tenancy, except that Lessee shall pay
Lessor as Base Rent for the period of such holdover an amount equal to one and
one half times the Base Rent which would have been payable by Lessee had the
holdover period been a part of the original term of this Lease. No holding over
by Lessee, whether with or without the consent of Lessor shall operate to extend
the term of this Lease.
2.08 Good Funds Payments. If, for any reason whatsoever, any two or more
payments by check from Lessee to Lessor for rent are dishonored and returned
unpaid, thereafter, Lessor may, at Lessor's sole option, upon written notice to
Lessee, require that all future payments of rent for the remaining term of the
Lease shall be made by cash, cashier's check, or money order and that the
delivery of Lessee's personal or corporate check will no longer constitute
payment of rent as provided in this Lease. Any acceptance by Lessor of a
payment for rent by Lessee's personal check thereafter shall not be construed
as a waiver of Lessor's right to insist upon payment by good funds as set forth
in this section 2.08. Furthermore, if three consecutive monthly rental
payments or any five monthly rental payments during the
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Lease Term (or any renewal or extension thereof) are not received by Lessor on
or before the tenth day of the month for which such rent was due, the Base Rent
hereunder shall automatically become due and payable by Lessee in advance in
quarterly installments equal to three months' Base Rent each. The first of such
quarterly Base Rent payments shall be due an payable on the first day of the
next succeeding calendar month and on the first day of every third calendar
month thereafter. This remedy shall be cumulative of any other remedies of
Lessor under this Lease for non payment of Rent.
ARTICLE 3.00 OCCUPANCY AND USE
3.01 Use. Lessee warrants and represent to Lessor that the leased premises
shall be used and occupied only for the purpose as set forth in section 1.06.
Lessee shall occupy the leased premises, conduct its business and control its
agents, employees, invitees and visitors in such a manner as is lawful,
reputable and will not create a nuisance. Lessee shall not permit any
operation which emits any odor or matter which intrudes into other portions of
the building, use any apparatus or machine which makes undue noise or causes
vibration in any portion of the building or otherwise interfere with, annoy or
disturb any other lessee in its normal business operations or Lessor in its
management of the building. Lessee shall neither permit any waste on leased
premises nor allow the leased premises to be used in any way which would, in
the reasonable opinion of Lessor, be extra hazardous on account of fire or
which would in any way increase or render void the fire insurance on the
building. If at any time during the term of this Lease the State Board of
Insurance or other insurance authority disallows any of Lessor's sprinkler
credits or imposes an additional penalty or surcharge in Lessor's insurance
premiums because of Lessee's original or subsequent placement or use of storage
racks or bins, method of storage or nature of Lessee's inventory
or any other act of Lessee, Lessee agrees to pay as additional rent the
increase (between fire walls) in Lessor's insurance premiums.
3.02 Signs. (A) Lessee shall not, without Lessor's prior written consent (a)
make any changes to or paint the store front; or (b) install any exterior
lighting, decorations or paintings; or (c) erect or install any signs, window
or door lettering, placards, decorations or advertising media of any type which
can be viewed from the exterior of the Demised Premises. All signs,
decorations and advertising media shall conform in all material respects to the
sign criteria established by Lessor for the Building from time to time in the
exercise of its sole discretion, and shall be subject to the prior
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written approval of Lessor as to construction, method of attachment, size,
shape, height, color and general appearance, which approval shall not be
unreasonably withheld or delayed. All signs shall be kept in good condition at
all times. Lessor reserves the right to designate a uniform type of sign for the
Building to be installed and paid for by Lessee. Notwithstanding this provision
or any provision to the contrary contained in this paragraph or elsewhere in
this Lease, (i) all signs installed by Lessee may be the maximum size permitted
by local law or ordinance, (ii) any changes to the sign initially approved by
Lessor and that Lessor may require thereafter shall be at Lessor's expense and
shall not require that Lessee sign be smaller than the maximum size permitted by
local law or ordinance.
(B) Lessee agrees to have erected and/or installed within sixty (60) days
of the Commencement Date of this Lease all signs in accordance with Lessor's
sign criteria. The Lessee, upon vacation of the Demised Premises, or the
removal or alteration of its sign for any reason, shall be responsible for the
repair, painting, and/or replacement of the building fascia surface where signs
are attached.
3.03 Compliance with Laws, Rules, and Regulations. Lessee, at Lessee's sole
cost and expense, shall comply with all laws, ordinances, orders, rules, and
regulations of state, federal, municipal or other agencies or bodies having
jurisdiction over use, condition and occupancy of the leased premises.
Notwithstanding this provision or any provision to the contrary contained in
this paragraph or elsewhere in this Lease, Lessee shall not be responsible for
modifying the exterior of the premises to comply with the American with
Disabilities Act of 1990 ("ADA"). Lessee will comply with the rules and
regulations of the building adopted by Lessor which are set forth on a schedule
attached to this Lease. Lessor shall have the right at all times to change and
amend the rules and regulations in any reasonable manner as may be deemed
advisable for the safety, care, cleanliness, preservation of good order and
operation or use of the building or the leased premises but not in
contravention of Lessor's agreements under this Lease. All changes and
amendments to the rules and regulations of the building will be sent by Lessor
to Lessee in writing and shall thereafter be carried out and observed by
Lessee.
3.04 Warranty of Peaceful Possession. Lessor warrants that it has the right
and authority to execute this Lease, and Lessee, upon payment of the required
rents and subject to the terms, conditions, covenants and agreements contained
in this Lease, shall have peaceful possession of the leased premises during the
full term of this Lease as well as any extension
or renewal thereof. Lessor shall not be responsible for the acts or omissions
of any other lessee that may interfere with Lessee's use and enjoyment of the
leased premises.
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3.05 Inspection. Lessor or its authorized agents shall with prior notice,
except in the case of an emergency, have the right to enter the leased premises
to inspect the same while accompanied by a representative of the Lessee, to
supply janitorial service or any other service to be provided by Lessor, to
show the leased premises to prospective purchasers or lessees during the last
one hundred eighty (180) days of the term of the Lease or any renewal term, and
to alter, improve or repair the leased premises or any other portion of the
building. Lessee hereby waives any claim for damages for injury or
inconvenience to or interference with Lessee's business, any loss of occupancy
or use of the leased premises, and any other loss occasioned thereby. Lessor
shall at all times have and retain a key with which to unlock all of the doors
in, upon and about the leased premises. Lessee shall not change Lessor's lock
system without providing to Lessor a key or in any other manner prohibit Lessor
from entering the leased premises. Lessor shall have the right to use any and
all means which Lessor may deem proper to open any door in an emergency without
liability therefor.
3.06 Exemptions from Liability. Except for Lessor's gross negligence or
wilful misconduct, Lessor shall not be liable for any damage or injury to the
person, business (or any loss of income therefrom), goods, wares, merchandise
or other property of Lessee, Lessee's employees, invitees, customers or any
other person in or about the leased premises, whether such damage or injury is
caused by results from: (a) fire, steam, electricity, water, gas or rain; (b)
the breakage, leakage, obstruction or other defects of pipes, sprinklers,
wires, appliances, plumbing, air conditioning or lighting fixtures or any other
cause; (c) conditions arising on or about the leased premises or upon other
portions of any building of which the leased premises is a part, or from other
sources or places; or (d) any act or omission of any other tenant of any
building of which the leased premises is a part. Lessor shall not be liable
for any such damage or injury even though the cause of or the means of
repairing such damage or injury are not accessible to Lessee. Notwithstanding
Lessor's negligence or breach of this Lease, Lessor shall under no
circumstances be liable for injury to Lessee's business or for any loss of
income or profit therefrom.
ARTICLE 4.00 UTILITIES AND SERVICE
4.01 Building Services. Lessor shall provide the normal utility service
connections to the building. Lessee shall pay the cost of all utility
services, including, but not limited
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to, initial connection charges, all charges for gas, electricity, water,
sanitary and storm sewer service, and for all electric lights. However, in a
multi-occupancy building, Lessor may provide water to the leased premises, in
which case Lessee agrees to pay to Lessor its pro rate share of the actual cost
of such water. Lessee shall pay all costs caused by Lessee introducing
excessive pollutants or solids other than ordinary human waste into the sanitary
sewer system, including permits, fees and charges levied by any governmental
subdivision for any such pollutants or solids. Lessee shall be responsible for
the installation and maintenance of any dilution tanks, holding tanks, settling
tanks, sewer sampling devices, sand traps, grease traps or similar devices as
may be required by any governmental subdivision for Lessee's use of the sanitary
sewer system. If the leased premises are in a multi-occupancy building, Lessee
shall pay all surcharges levied due to Lessee's use of sanitary sewer or waste
removal services insofar as such surcharges affect Lessor or other lessees in
the building. Lessor shall not be required to pay for any utility services,
supplies or upkeep in connection with the leased premises .
4.02 Theft or Burglary. Except for Lessor's gross negligence or wilful
misconduct, Lessor shall not be liable to Lessee for losses to Lessee's
property or personal injury caused by criminal acts or entry by unauthorized
persons into the leased premises or the building.
ARTICLE 5.00 REPAIRS AND MAINTENANCE
5.01 Property Condition. Except as otherwise provided in this Lease, Lessee
acknowledges that it has carefully inspected the Premises and that each portion
thereof is in good condition and Lessee hereby accepts the premises in their
condition existing as of the Lease commencement date or the date that Lessee
takes possession of the Premises, whichever is earlier, subject to all
applicable zoning, municipal, county and state laws, ordinances and regulations
governing and regulating the use of the Premises, and any covenants or
restrictions of record and accepts this Lease subject thereto and to all
matters disclosed thereby and by any exhibits attached hereto. Lessee
acknowledges that neither Lessor nor Lessor's agent has made any representation
or warranty as to the present or future suitability of the Premises for the
conduct of Lessee's business.
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5.02 Lessor Repairs. Lessor shall not be required to make any improvements,
replacements or repairs of any kind or character to the leased premises or the
project during the term of this Lease except as are set forth in this section
or elsewhere in this Lease. Lessor shall maintain only the roof, foundation,
parking and common areas, and the structural soundness of the exterior walls
(excluding windows, windowglass, plate glass and doors). Lessor's costs of
maintaining the items set forth in this section are subject to the additional
rent provisions in section 2.02. Lessor shall not be liable to Lessee, except
as expressly provided in this Lease, for any damage or inconvenience, and
Lessee shall not be entitled to any abatement or reduction of rent by reason of
any repairs, alterations or additions made by Lessor under this Lease.
5.03 Lessee Repairs. Except for the Hvac systems, which are the
responsibility of Lessor to the extent set out in Paragraph 17.07 hereof,
Lessee shall, at its sole cost and expense, maintain, repair and replace all
other parts of the leased premises in good repair and condition, including, but
not limited to, heating, ventilating and air conditioning systems, down spouts,
fire sprinkler system, dock bumpers, lawn maintenance, pest control and
extermination, trash pick-up and removal, and painting the building and exterior
doors. Lessee shall repair and pay for any damage caused by any act or omission
of Lessee or Lessee's agents, employees, invitees, licensees or visitors. If
the leased premises are in a multi-occupancy building or project, Lessor
reserves the right to perform, on behalf of Lessee, lawn maintenance, painting,
trash pick-up and removal; Lessee agrees to pay Lessor, as additional rent,
Lessee's pro rata share of the actual cost of such services within ten days from
receipt of Lessor's invoice, or Lessor may by monthly invoice direct Lessee to
prepay the estimated costs for the current calendar year, and such amount shall
be adjusted annually. If the leased premises are served by rail, Lessee agrees,
if requested by the railroad, to enter into a joint maintenance agreement with
the railroad and bear its pro rata share of the cost of maintaining the railroad
spur. If Lessee fails to make the repairs or replacements promptly as required
herein, Lessor may, at its option, make the repairs and replacements and the
actual cost of such repairs and replacements shall be charged to Lessee as
additional rent and shall become due and payable by Lessee within ten days from
receipt of Lessor's invoice. Costs incurred under this section are the total
responsibility of Lessee and do not constitute operating expenses under section
2.02.
5.04 Request for Repairs. All requests for repairs or maintenance that are
the responsibility of Lessor pursuant to any provision to this Lease must be
made in writing to Lessor at the address in section 1.05. Lessor shall
undertake such repairs or maintenance promptly, diligently, and in good faith.
If Lessor fails to complete such repairs or maintenance within a reasonable
time for doing so, Lessee may as its sole
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option make such repairs and be entitled to reimbursement for the actual
reasonable cost thereof within ten (10) days of receipt of the invoice and all
lien waivers.
5.05 Lessee Damages. Lessee shall not allow any waste to be committed on any
portion of the leased premises or building, and at the termination of this
Lease, by lapse of time or otherwise, Lessee shall deliver the leased premises
to Lessor in as good condition as existed at the commencement date of this
Lease, ordinary wear and tear excepted. The reasonable cost and expense of any
repairs necessary to restore the condition of the leased premises (ordinary
wear and tear excepted) shall be borne by Lessee.
5.06 Maintenance Contract. Lessee shall, at its sole cost and expense, during
the term of this Lease maintain a regularly scheduled preventative
maintenance/service contract with a maintenance contractor for the servicing of
all hot water, heating and air conditioning systems and equipment within the
leased premises. The maintenance contractor and contract must be approved by
Lessor, which approval shall not be unreasonably withheld and must include
monthly servicing, replacement of filters, replacement or adjustment of drive
belts, periodic lubrication and oil change and any other services suggested by
the equipment manufacturer.
ARTICLE 6.00 ALTERATIONS AND IMPROVEMENTS
6.01 Lessor Improvements. INTENTIONALLY DELETED
6.02 Lessee Improvements. Lessee shall not make or allow to be made any
substantial alterations or physical additions in or to the leased premises and,
effecting the structure or exterior appearance of the building without first
obtaining the written consent of Lessor, which consent shall not be
unreasonably withheld or delayed. Any alterations, physical additions or
improvements of the leased premises made by Lessee shall at once become the
property of Lessor and shall be surrendered to Lessor upon the termination of
this Lease; provided, however, Lessor, at its option, may require Lessee to
remove any physical additions and/or repair any alterations in order to restore
the leased premises to the condition existing at the time Lessee took
possession other than the initial alterations agreed to by Lessor, all costs of
removal and/or alterations to be borne by Lessee. This clause shall not apply
to moveable equipment or furniture owned by Lessee, which may be removed by
Lessee at the end
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of the term of this Lease if Lessee is not then in default and if such equipment
and furniture are not then subject to any other rights, liens, and interest of
Lessor.
6.03 Mechanics Lien. Lessee will not permit any mechanic's or materialman's
lien(s) or other lien to be placed upon the leased premises or the building
without bonding around same during the pendency of any good faith attempt by
Lessee to contest the lien's validity and nothing in this Lease shall be deemed
or construed in any way as constituting the consent or request of Lessor,
express or implied, by inference or otherwise, to any person for the
performance of any labor or the furnishing of any materials to the leased
premises, or any part thereof, nor as giving Lessee any right, power, or
authority to contract for or permit the rendering of any services or the
furnishing of any materials that would give rise to any mechanic's,
materialman's or other lien against the leased premises. In the event any such
lien is attached to the leased premises, then, in addition to any other right
or remedy of Lessor, Lessor may, in the event that Lessee does not either bond
around such lien or remove it within sixty (60) days after its date of filing,
but shall not be obligated to, obtain the release of or otherwise discharge the
same. Any amount paid by Lessor for any of the aforesaid purposes shall be
paid by Lessee to Lessor on demand as additional rent.
ARTICLE 7.00 CASUALTY AND INSURANCE
7.01 Substantial Destruction. If the leased premises should be totally
destroyed by fire or other casualty, or if the leased premises should be
damaged so that rebuilding cannot reasonably be completed within one hundred
twenty days after the date of written notification by Lessee to Lessor of the
destruction, this Lease shall terminate and the rent shall be abated for the
unexpired portion of the Lease, effective as of the date of the casualty.
7.02 Partial Destruction. If the leased premises should be partially damaged
by fire or other casualty, and rebuilding or repairs can reasonably be
completed within one hundred twenty days from the date of written notification
by Lessee to Lessor of the destruction, this Lease shall not terminate, and
Lessor shall at its sole risk and expense proceed with reasonable diligence to
rebuild or repair the building or other improvements to substantially the same
condition in which they existed prior to the damage. If the leased premises
are to be rebuild or repaired and are untenantable in whole or in part
following the damage, and the damage or destruction was not caused
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or contributed to by act or negligence of Lessee, its agents, employees,
invitees, the rent payable under this Lease during the period for which the
leased premises are untenantable shall be adjusted to such an extent as may be
fair and reasonable under the circumstances. In the event that Lessor fails to
complete the necessary repairs or rebuilding within one hundred twenty days from
the date of written notification by Lessee to Lessor of the destruction, Lessee
may at its option terminate this Lease by delivering written notice of
termination to Lessor, whereupon all rights and obligations under this Lease
shall cease to exist.
7.03 Property Insurance. Lessor shall at all times during the term of this
Lease maintain a policy or policies of insurance, issued by and binding upon
some insurance company, insuring the building against all perils included
within the classification of fire and extended coverage and any other perils
which Lessor deems necessary in such amount as Lessor deems reasonable in
relation to the age, location, type of construction and physical condition of
the building and the availability of such insurance at reasonable rates;
provided, Lessor shall not be obligated in any way or manner to insure any
personal property (including, but not limited to, any furniture, machinery,
goods or supplies) of Lessee upon or within the leased premises, any fixtures
installed or paid for by Lessee upon or within the leased premises, or any
improvements which Lessee may construct on the leased premises. Lessee shall
have no right in or claim to the proceeds of any policy of insurance maintained
by Lessor even though the cost of such insurance is borne by Lessee as set
forth in Article 2.00. Lessee shall, at Lessee's expense, maintain such
primary or additional insurance on its inventory, fixtures, equipment, and
building improvements as Lessee deems necessary to protect its interest.
Lessee shall not do or permit to be done anything which invalidates any such
insurance policies.
7.04 Liability Insurance. Lessee, at its own expense, shall maintain during
the term of this Lease a policy or policies of comprehensive general liability
insurance, including personal injury and property damage, with contractual
liability endorsement, in the amount of One Million Dollars ($1,000,000.00) for
property damage and One Million Dollars ($1,000,000.00) per occurrence for
bodily injuries, personal injuries or deaths of person occurring in or about
the Premises. Said policies shall (i) name Lessor as an additional insured and
insure Lessor's contingent liability under this Lease, (ii) be issued by an
insurance company which is acceptable to Lessor, and (iii) provide that said
insurance shall not be cancelled unless thirty (30) days prior written notice
shall have been given to Lessor. Said policy or policies or certificates
thereof shall be delivered to Lessor by Lessee upon commencement of the term of
the Lease and upon each renewal of said insurance.
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7.05 Waiver of Subrogation. Anything in this Lease to the contrary
notwithstanding, Lessor and Lessee hereby waive and release each other of and
from any and all right of recovery, claim, action or cause of action, against
each other, their agents, officers, and employees, for any loss or damage that
may occur to the leased premises, improvements to the building of which the
leased premises are a part, or personal property within the building, by reason
of fire or the elements, regardless of cause or origin, including negligence of
Lessor or Lessee and their agents, officers and employees. Lessor and Lessee
agree immediately to give their respective insurance companies which have
issued policies of insurance covering all risk of direct physical loss, written
notice of the terms of the mutual waivers contained in this section, and to
have the insurance policies properly endorsed, if necessary, to prevent the
invalidation of the insurance coverages by reason of the mutual waivers.
7.06 Hold Harmless. Except for Lessor's gross negligence or wilful
misconduct, Lessor shall not be liable to Lessee or to Lessee's employees,
agents, invitees, licensees or visitors, or to any other person, for an injury
to person or damage to property on or about the leased premises caused by any
act or omission of Lessee, its agents, servants or employees, or of any other
person entering upon the leased premises under express or implied invitation by
Lessee, or caused by the improvements located on the leased premises becoming
out of repair, the failure or cessation of any service provided by Lessor
(including security service and devices), or caused by leakage of gas, oil,
water or steam or by electricity emanating from the leased premises. Lessee
agrees to indemnify and hold harmless Lessor of and from any loss, attorney's
fees, expenses or claims arising out of any such damage or injury except and to
the extent that such loss, attorney's fees, expenses, claims, damages or injury
arise in whole or in part from the gross negligence or wilful misconduct of
Lessor.
ARTICLE 8.00 CONDEMNATION
8.01 Substantial Taking. If all or substantial part of the leased premises
are taken for any public or quasi-public use under any governmental law,
ordinance or regulation, or by right of eminent domain or by purchase in lieu
thereof, and the taking would prevent or materially interfere with the use of
the leased premises for the purpose for which it is then being used, this Lease
shall terminate and the rent shall be abated during the unexpired portion of
this Lease effective on the date physical possession is
15
taken by the condemning authority. Lessee shall have no claim to the
condemnation award or proceeds in lieu thereof other than that portion of the
condemnation award or proceeds applicable to Lessee's trade fixtures.
8.02 Partial Taking. If a portion of the leased premises shall be taken for
any public or quasi-public use under any governmental law, ordinance or
regulation, or by right of eminent domain or by purchase in lieu thereof, and
this Lease is not terminated as provided in section 8.01 above, Lessor shall at
Lessor's sole risk and expense, restore and reconstruct the building and other
improvements on the leased premises to the extent necessary to make it
reasonably tenantable. The rent payable under this Lease during the unexpired
portion of the term shall be adjusted to such an extent as may be fair and
reasonable under the circumstances. Lessee shall have no claim to the
condemnation award or proceeds in lieu thereof other than that portion of the
condemnation award or proceeds applicable to Lessee's trade fixtures.
ARTICLE 9.00 ASSIGNMENT OR SUBLEASE
9.01 Lessor Assignment. Lessor shall have the right to sell, transfer or
assign, in whole or in part, its rights and obligations under this Lease and in
the building provided that such purchaser, transferee, or assignee agrees to
assume all duties and obligations of Lessor to Lessee under the terms,
covenants and conditions of Lease. Any such sale, transfer or assignment shall
operate to release Lessor from any and all liabilities under this Lease arising
after the date of such sale, assignment or transfer.
9.02 Lessee Assignment. Lessee shall not assign, in whole or in part, this
Lease, or allow it to be assigned, in whole or in part, by operation of law or
otherwise (including without limitation by transfer of a majority interest of
stock, merger, or dissolution, which transfer of majority interest of stock,
merger or dissolution shall be deemed an assignment) or mortgage or pledge the
same except to a bona fide third party lender providing financing of Lessee's
business or Lessee's inventory or personalty located on the premises, or sublet
the leased premises, in whole or in part, without the prior written consent of
Lessor which consent shall not be unreasonably withheld, and in no event shall
any such assignment or sublease ever release Lessee from any obligation or
liability hereunder. No assignee or sublessee of the leased
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premises or any portion thereof may assign or sublet the leased premises or any
portion thereof. Notwithstanding this provision, Lessee shall have the right to
assign or sublease to any parent, affiliate, subsidiary, or successor of Lessee,
whether by merger, consolidation, or otherwise, or to any person or entity that
purchases all of the assets of Lessee provided the net worth of the person or
entity to whom the Lease is assigned is equal to or greater than Lessee.
9.03 Conditions of Assignment. Except for an assignment or sublease not
requiring Lessor's prior approval as described in Paragraph 9.02 above, if
Lessee desires to assign or sublet all or any part of the leased premises, it
shall so notify Lessor at least thirty days in advance of the date on which
Lessee desires to make such assignment or sublease. Lessee shall provide
Lessor with a copy of the proposed assignment or sublease and such information
as Lessor might reasonably request concerning the proposed sublessee or
assignee to allow Lessor to make informed judgments as to the financial
condition, reputation, operations and general desirability of the proposed
sublessee or assignee. Within fifteen (15) days after Lessor's receipt of
Lessee's proposed assignment of sublease and all required information concerning
the proposed sublessee or assignee, Lessor shall have the following options: (1)
consent to the proposed assignment or sublease, and, if the rent due and payable
by any assignee or sublessee under any such permitted assignment or sublease (or
a combination of the rent payable under such assignment or sublease plus any
bonus or any other consideration or any payment incident thereto) exceeds the
rent payable under this Lease for such space, Lessee shall pay to Lessor all
such excess rent and other excess consideration within ten days following
receipt thereof by Lessee: or (2) refuse, in its sole and absolute discretion
and judgment, to consent to the proposed assignment or sublease, which refusal
shall be deemed to have been exercised unless Lessor gives Lessee written notice
providing otherwise. Upon the occurrence of an event of default, if all or any
part of the leased premises are then assigned or sublet, Lessor in addition to
any other remedies provided by this Lease or provided by law, may, at its
option, collect directly from the assignee or sublessee all rents becoming due
to Lessee by reason of the assignment or sublease, and Lessor shall have a
security interest in all properties on the leased premises to secure payment of
such sums. Any collection directly by Lessor from the assignee or sublessee
shall not be construed to constitute a novation or a release of Lessee or any
guarantor from the further performance of its obligations under this Lease.
9.04 Subordination. Lessee accepts this Lease subject and subordinate to any
recorded mortgage or deed of trust lien presently existing or hereafter created
upon the building or project and to all existing recorded restrictions,
covenants, easements and
17
agreements with respect to the building or project. Lessee agrees upon ten (10)
days following written demand to execute additional instruments subordinating
this Lease as Lessor may require. If the interests of Lessor under this Lease
shall be transferred by reason of foreclosure or other proceedings for
enforcement of any first mortgage or deed of trust lien on the leased premises,
Lessee shall be bound to the transferee (sometimes called the "Purchaser") at
the option of the Purchaser, under the terms, covenants and conditions of this
Lease for the balance of the term remaining, including any extensions or
renewals, with the same force and effect as if the Purchaser were Lessor under
this Lease, and, if requested by the Purchaser, Lessee agrees to attorn to the
Purchaser, including the first mortgage under any such mortgage if it be the
Purchaser, as its Lessor. Notwithstanding the foregoing, Lessor agrees to
provide Lessee with a non-disturbance agreement from mortgagee substantially in
the form of Exhibit B attached hereto and made a part hereof
9.05 Estoppel Certificates. Lessee agrees to furnish, from time to time,
within ten days after receipt of a written request from Lessor or Lessor's
mortgagee, a statement certifying, if true and applicable, the following:
Lessee is in possession of the leased premises; the Lease is in full force and
effect; the Lease in unmodified; Lessee claims no present charge, lien, or
claim of offset against rent; the rent is paid for the current month, but is
not prepaid for more than one month and will not be prepaid for more than one
month in advance; there is no existing default by reason of some act or
omission by Lessor; and such other matters as may be reasonably required by
Lessor or Lessor's mortgagee. Lessee's failure to deliver such statement,
shall be an event of default under this Lease. Lessor agrees, within ten (10)
days after receipt of a written request therefor, to provide a statement
certifying, if true and applicable, the name and address of the Building, the
location of the Premises, that the Lease is in full force and effect and
unmodified, that Lessee is not in default under the Lease, the term remaining in
the Lease and existence and term of any renewal options, and such other matters
as may reasonably be required by Lessee or Lessee's mortgagee. Lessor's failure
to deliver such statement shall be an event of default hereunder.
9.06 Lessee's Financial Condition. Within ten (10) days after written request
from Lessor, Lessee shall deliver to Lessor such financial statements as are
reasonably required by Lessor to verify the net worth of Lessee, or any
assignee, or guarantor of Lessee. In addition Lessor shall deliver to any
lender designated by Lessor any financial statements required by such lender to
facilitate the financing or refinancing of the leased premises. Lessee
represents and warrants to Lessor that each such financial statement is a true,
complete, and accurate statement as of the date of such statement. All
financial statements shall be confidential and shall be used only for the
18
purposes set forth herein. Notwithstanding the foregoing, Lessee shall not be
required to deliver financial statements to Lessor more than one time in any
calendar year.
ARTICLE 10.00 LIENS
10.01 Landlord's Lien. As security for payment of rent, damages and all other
payments required to be made by this Lease, Lessee hereby grants to Lessor a
lien upon all property of Lessee now or subsequently located upon the leased
premises. If Lessee abandons or vacates any substantial portion of the leased
premises or is in default in the payment of any rentals, damages or other
payments required to be made by this Lease or is in material default of any
other provision of this Lease ,taking into account any notice and cure
provisions in this Lease, Lessor may enter upon the leased premises, by picking
or changing locks if necessary, and take possession of all or any part of the
personal property, and may sell all or any part of the personal property at a
public or private sale, in one or successive sales, with notice, to the
highest bidder for cash, and, on behalf of Lessee, sell and convey all or part
of the personal property to the highest bidder, delivering to the highest
bidder all of Lessee's title and interest in the personal property sold. The
proceeds of the sale of the personal property shall be applied by Lessor toward
the reasonable costs and expenses of the sale, including reasonable attorney's
fees, and then toward the payment of all sums then due by Lessee to Lessor
under the terms of this Lease. Any excess remaining shall be paid to Lessee or
any other person entitled thereto by law.
10.02 Uniform Commercial Code. This Lease is intended as and constitutes a
security agreement within the meaning of the Uniform Commercial Code of the
state in which the leased premises are situated. Lessor, in addition to the
rights prescribed in this Lease, shall have all of the rights, titles, liens
and interests in and to Lessee's property, now or hereafter located upon the
leased premises, which may be granted a secured party, as that term is defined,
under the Uniform Commercial Code to secure to Lessor payment of all sums due
and the full performance of all Lessee's covenants under this Lease. Lessee
will on request execute and deliver to Lessor a financing statement for the
purpose of perfecting Lessor's security interest under this Lease or Lessor may
file this Lease a memorandum of as a financing statement. Unless otherwise
provided by law and for the purpose of exercising any right pursuant to this
section, Lessor and Lessee agree that reasonable notice shall be met if such
notice is
19
given by ten days written notice, certified mail, return receipt requested, to
Lessor or Lessee at the addresses specified herein.
ARTICLE 11.00 DEFAULT AND REMEDIES
11.01 Default by Lessee. The following shall be deemed to be events of
default by Lessee under this Lease; (1) Lessee shall fail to pay more than ten
(10) days after due any installment of rent or any other payment required
pursuant to this Lease; (2) Lessee shall fail to comply with any term,
provision or covenant of this Lease, other than the payment of rent, and the
failure is not cured within thirty (30) days after written notice to Lessee;
(3) Lessee shall file a petition or be adjudged bankrupt or insolvent under any
applicable federal or state bankruptcy or insolvency law or admit that it
cannot meet its financial obligations as they become due; or a receiver or
trustee shall be appointed for all or substantially all of the assets of
Lessee; or Lessee shall make a transfer in fraud of creditors or shall make an
assignment for the benefit of creditors; or (4) Lessee shall do or permit to
be done any act which results in a lien being filed against the leased premises
or the building and/or project of which the leased premises are a part and such
lien shall remain uncured or unbonded for a period of sixty (60) days after the
date of filing of such lien.
11.02 Remedies for Lessee's Default. Upon the occurrence of any event of
default set forth in this Lease, Lessor shall have the option to pursue any one
or more of the following remedies without any notice or demand whatsoever:
(a) Lessor may terminate this Lease. If Lessor elects to terminate this
Lease, then Lessee shall immediately surrender the leased premises to Lessor
and shall be liable for and shall pay to Lessor the sum of all rent and other
indebtedness accrued to the date of such termination plus, as damages, an
amount equal to the total of (i) the reasonable cost of recovering the leased
premises, (ii) the reasonable cost of removing and storing Lessee's and other
occupants' property located therein, (iii) the reasonable cost of reletting the
leased premises, or a portion thereof, whether or not accomplished in one or
more phases (including, without limitation, brokerage commissions), (iv) the
reasonable cost of repairs to the leased premises, (v) the reasonable
cost of collecting such amounts from Lessee hereunder, and (vi) any other
reasonable sums of money or damages that may be owed to Lessor as the result of
a default by Lessee or the exercise of Lessor's rights at law or in equity.
20
(b) Lessor may terminate Lessee's rights to occupy the leased premises
without terminating this Lease. If Lessor elects to terminate Lessee's right
to occupy the leased premises, Lessee shall remain liable for the payment of
the total rent due under this Lease for the remainder of the term of this
Lease. In addition, Lessee shall be liable for and shall pay to Lessor, on
demand, an amount equal to the costs described in subsection 11.02(a) above.
Lessor may file suit to recover any sums falling due under the terms hereof
from time to time, and unless otherwise agreed no delivery to or recovery by
Lessor of any portion of the sums due Lessor hereunder shall be a defense in any
action to recover any amount not theretofore reduced to judgment and/or
collected by Lessor. Lessor shall not be obligated to relet the leased premises
before leasing other portions of the building, it being the intent of the
parties that Lessee shall not be placed in a preferential position by reason of
Lessee's own default. Any sums received by Lessor through reletting shall
reduce the sums owing by Lessee hereunder, but in no event shall Lessee be
entitled to any excess of any sums obtained by reletting over and above the rent
to be paid by Lessee under this Lease. In the alternative, Lessor may elect
to immediately recover, as damages, a sum equal to the difference between (i)
the total rent due under this Lease for the remainder of the Lease term and (ii)
the then fair market rental value of the leased premises during such period,
discounted to present value at a commercially reasonable rate ("Discounted
Future Rent"). In such event, Lessor shall have no responsibility whatsoever to
attempt to relet the leased premises or to apply any rentals received by Lessor
as a result of any such reletting to Lessee's obligations hereunder; and the
aggregate amount of all damages due to Lessor, including the Discounted Future
Rent, shall be immediately due and payable to Lessor upon demand.
(c) Lessor may enter upon the leased premises and do whatever Lessee is
obligated to do under the terms of this Lease without terminating this Lease or
terminating Lessee's right to occupy the leased premises. In such event,
Lessee shall reimburse Lessor within ten (10) days after receipt of written
demand for any expenses which Lessor may incur in affecting compliance with
Lessee's obligations under this Lease, and Lessor shall not be liable for any
damages resulting to Lessee from such action other than and to the extent of
damages caused by the gross negligence or wilful misconduct of Lessor.
(d) Lessor may exercise all of the remedies available to Lessor at law
or in equity, including, without limitation, injunctive relief of all
varieties.
The provisions of this Section 11.02 shall be enforceable to the maximum
extent not prohibited by applicable law, and the unenforceability of any
portion thereof shall not thereby render unenforceable any other portion. No
act or thing done by Lessor or its agents during the Lease term shall be deemed
to be an acceptance of an
21
attempted surrender of the leased premises, and no agreement to accept the
surrender of the leased premises shall be valid unless made in writing and
signed by Lessor. No re-entry or taking possession of the leased premises by
Lessor (including a termination of Lessee's right to occupy the leased premises
or a reletting subsequent to such election) shall be construed as an election on
Lessor's part to terminate this Lease unless a written notice of such
termination is given to Lessee. The failure of Lessor to insist at any time
upon the strict performance of any covenant or agreement herein or to exercise
any option, right, power, or remedy contained in this Lease shall not be
construed as a waiver or a relinquishment thereof for the future. No payment by
Lessee or receipt by Lessor of a lesser amount than the amount then due under
this Lease shall be deemed to be other than on account of the earliest
obligation of Lessee due hereunder, nor shall endorsement or statement on any
check or any letter accompanying any check or payment be deemed an accord and
satisfaction. Lessor may accept any such check or payment without prejudice to
Lessor's right to recover the balance of such obligation of Lessee or pursue any
other remedy provided in this Lease. All rights, privileges, and remedies
afforded Lessor by this Lease or by law shall be deemed cumulative, and the
remedies shall not be deemed to be a waiver of any other right, privilege, or
exercise of any one of such rights, privileges, or remedy provided for herein or
granted by law or in equity, except as may otherwise be expressly provided
pursuant to the terms of this Lease. In the event Lessor elects to terminate
this Lease or terminate Lessee's right to occupy the leased premises after a
default by Lessee, Lessor may, without prejudice to any other remedy which
Lessor may have, expel or remove Lessee and any other person who may be
occupying the leased premises or any part thereof. In addition, Lessor may
change or alter the locks and other security devices on the doors to the leased
premises; and Lessee hereby waives, to the fullest extent allowed by law, any
requirement that notice be posted on the leased premises as to the location of a
key to such new locks and any right to obtain such a key. In addition, to all
of the remedies set forth herein, Lessor shall, if applicable, be entitled to
receive a cash payment from Lessee on demand in an amount equal to all
"Reimbursable Costs" (as defined below) which have not yet vested in Lessee and
to terminate any remaining Lease concessions which have not yet accrued under
this Lease. As used herein, the term "Reimbursable Costs" shall mean the
total of (i) the difference between the average rent payable by Lessee over
the entire term of this Lease and the rate of rent payable by Lessee from the
commencement date to the date of default and (ii) the aggregate dollar amount
which had been paid by Lessor in connection with this Lease, including, without
limitation, amounts reimbursed to Lessee or paid on behalf of Lessee under this
Lease and any brokerage commission paid or payable by Lessor in connection with
the execution of this Lease. Because the Reimbursable Costs were incurred by
Lessor in reliance upon Lessee's fully performing Lessee's obligations under
this Lease, Lessee hereby acknowledges that Lessor will be damaged, upon a
default by Lessee, in an amount equal to the
22
aggregate dollar value of the Reimbursable Costs which have not yet vested in
Lessee. Lessee shall vest as to Reimbursable Costs on a pro rata basis for
each calendar month during the Lease term for which Lessee has paid rent and is
not otherwise in default hereunder. No vesting shall occur with respect to any
month for which Lessee has not paid rent or for which Lessee is otherwise in
default hereunder.
11.03 Notice of Default. Lessee shall give written notice of any failure by
Lessor to perform any of its obligations under this Lease to Lessor and to any
ground lessor, mortgagee or beneficiary under any deed of trust encumbering the
Leased Premises whose name and address have been furnished to Lessee in
writing. Lessor shall not be in default under this Lease unless Lessor (or
such ground lessor, mortgagee or beneficiary) fails to cure such nonperformance
within thirty (30) days after receipt of Lessee's notice. However, if such
nonperformance reasonably requires more than thirty (30) days to cure, Lessor
shall not be in default if such cure is commenced within such 30-day period and
thereafter diligently pursued to completion.
ARTICLE 12.00 RELOCATION
INTENTIONALLY DELETED
ARTICLE 13.00 DEFINITIONS
13.01 Act of God or Force Majeure. An "act of God" or "force majeure" is
defined for purposes of this Lease as strikes, lockouts, sitdowns, material or
labor restrictions by any governmental authority, unusual transportation
delays, riots, floods, washouts, explosions, earthquakes, fire, storms, weather
(including wet grounds or inclement weather which prevents construction), acts
of public enemy, wars, insurrections and any other cause not reasonably within
the control of Lessor and which by the exercise of due diligence Lessor is
unable, wholly or in part, to prevent or overcome.
13.02 Building or Project. "Building" or "project" as used in this Lease
means the building and/or project described in section 1.02, including the
leased premises and the land upon which the building or project is situated.
23
13.03 Commencement Date. "Commencement date" shall be the date set forth in
section 1.03. The commencement date shall constitute the commencement of the
term of this Lease for all purposes, whether or not Lessee has actually taken
possession.
13.04 Square Feet. "Square feet" or "square foot" as used in this Lease
includes the area contained within the leased premises together with a common
area percentage factor of the leased premises proportionate to the total
building area. Lessee hereby acknowledges that it has carefully inspected the
leased premises in the building forming the subject of the Lease and agrees
that said leased premises comprise approximately the square footage in section
1.02. Should it ever be determined that the building is larger or smaller than
said square footage, neither party shall have
any right, claim or action against the other by reason of that fact.
ARTICLE 14.00 ENVIRONMENTAL REPRESENTATIONS AND INDEMNITY
14.01 Hazardous Materials.
A. Hazardous Material Upon Premises Prohibited.
Lessee shall not cause or permit any Hazardous Material (as defined in
Paragraph 14.01) to be released, brought upon, stored, produced, disposed or
used upon, about or beneath the Premises by Lessee, its agents, employees,
contractors or invitees.
B. Indemnification of Lessor for Environmental Damages.
Lessee shall indemnify, defend and hold Lessor harmless from and against
any and all Environmental Damages which arise from (1) the presence upon, about
or beneath the Premises of any "Hazardous Materials" (as defined in this Lease)
or of any chemical substance requiring remediation under any federal, state or
local statute, regulation, ordinance or policy to the extent, and only to the
extent, that such hazardous materials are placed upon the Premises by Lessee or
its employees, agents, or invitees; or (2) the breach of any of the provisions
of this Lease. For the purpose of this Lease, "Environmental Damages" shall
mean (a) All claims, judgments, damages,
24
penalties, fines, costs, liabilities and losses (including, without limitation,
diminutive in the value of the Premises, damages for the loss of or restriction
on use of rentable space or any amenity of the Premises and from any service
rentable or usable space or of any amenity of the Premises and from any adverse
impact on Lessor's marketing of space); (b) All sums paid for settlement of
claims, reasonable attorney's fees, reasonable consultant's fees and reasonable
expert's fees; and (c) All costs incurred by Lessor in connection with
investigation of Hazardous Material (as defined in this Lease) upon, about or
beneath the Premises, the preparation of any feasibility studies or reports and
the performance of any clean-up, remediation, removal or governmental agency or
political subdivision necessary for Lessor to make full economic use of the
Premises, or otherwise required under this Lease. Lessee's obligation under
this Section shall survive the expiration of this Lease. Lessor shall
indemnify and hold harmless Lessee from and against any and all environmental
damages to Lessee arising due to and only to the extent of the activities of
Lessor.
C. Obligation of Lessee to Remediate Premises.
Notwithstanding the obligation of Lessee to indemnify Lessor pursuant to
this Lease, Lessee shall, at its sole cost and expense, promptly take all
actions required by any federal, state or local governmental agency or
political subdivision or necessary for Lessor to make full economic use of the
Premises, which requirements or necessity arise from the presence upon, about
or beneath the Premises of any Hazardous Materials (as defined in this Lease),
provided that the introduction of such Hazardous Materials shall have
originated during the term of this Lease due to and only to the extent of the
activities of Lessee or its employees, agents, or invitees. Such actions shall
include, but not be limited to, the investigation of the environmental
condition of the Premises, the preparation of any feasibility studies or
reports and the performance of any clean-up, remedial, removal or restoration
work. Lessee shall take all actions necessary to restore the Premises to the
condition existing prior to the introduction of the Hazardous Material upon,
about or beneath the Premises, notwithstanding any lesser standard of
remediation allowable under applicable law or governmental policies. Lessee
shall nevertheless obtain Lessor's approval prior to undertaking any activities
required by this Section, which approval shall not be unreasonably withheld so
long as such actions would not potentially have a material adverse long-term or
short-term effect on the Premises. The obligations of Lessee pursuant to this
Section shall not apply to situations where Hazardous Materials are released,
brought upon, stored, produced, emitted, disposed of or used upon, about or
beneath the Premises at a time or times other than during the term of this
Lease or by persons other than Lessee or its employees, agents, or invitees
except where its agents, employees, contractors or invitees or as a result of
the acts or omissions of any agent,
25
employee, contractor or invitee of any permitted sublessee or assignee of
Lessee, Lessee's obligations under this Section shall survive the expiration of
this Lease.
D. "Hazardous Material" Defined.
"Hazardous Material" means any material or substance (1) defined as a
hazardous substance pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Section 9601 et seq.) and amendments
thereto ; (2) the Hazardous Materials Transportation Act (49 U.S.C. Section
1801 et seq.); (3) defined as a "hazardous waste" pursuant to the Federal
Resource Conservation and Recovery Act (42 U.S.C. Section 9601 et. seq.)
ARTICLE 15.00 MISCELLANEOUS
15.01 Waiver. Failure of Lessor to declare an event of default immediately
upon its occurrence, or delay in taking any action in connection with an event
of default, shall not constitute a waiver of the default, but Lessor shall have
the right to declare the default at any time and take such action as is lawful
or authorized under this Lease. Pursuit of any one or more of the remedies set
forth in Article 11.00 above shall not preclude pursuit of any one or more of
the other remedies provided elsewhere in this Lease or provided by law, nor
shall pursuit of any remedy constitute forfeiture or waiver of any rent damages
accruing to Lessor by reason of the violation of any of the terms, provisions
or covenants of this Lease. Failure by Lessor to enforce one or more of the
remedies provided upon an event of default shall not be deemed or construed to
constitute a waiver of the default or of any other violation or breach of any
of the terms, provisions and covenants contained in this Lease.
15.02 Act of God. Lessor shall not be required to perform any covenant or
obligation in this Lease, or be liable in damages to Lessee, so long as the
performance or non-performance of the covenant or obligation is delayed, caused
or prevented by an act of God, force majeure or by Lessee.
15.03 Attorney's Fees. In the event that either party defaults in the
performance of any of the terms, covenants, agreements or conditions contained
in this Lease and the
26
other party places in the hands of an attorney the enforcement of all or any
part of this Lease, the collection of any rent due or to become due or recovery
of the possession of the leased premises, the non-prevailing party agrees to pay
the prevailing party's reasonable costs of collection, including reasonable
attorney's fees for the services of the attorney, whether suit is actually filed
or not.
15.04 Successors. This Lease shall be binding upon and inure to the benefit
of Lessor and Lessee and their respective heirs, personal representatives,
successors and assigns to the extent that assignment is permitted hereunder.
It is hereby covenanted and agreed that should Lessor's interest in the leased
premises cease to exist for any reason during the term of this Lease, then
notwithstanding the happening of such event this Lease nevertheless shall remain
unimpaired and in full force and effect, and Lessee hereunder agrees to attorn
to the then owner of the leased premises contingent upon delivery to Lessee of a
non-disturbance agreement substantially in the form of Exhibit B attached hereto
and made a part hereof.
15.05 Rent Tax. If applicable in the jurisdiction where the leased premises
are situated, Lessee shall pay and be liable for all rental, sales and use
taxes or other similar taxes, if any, levied or imposed by any city, state,
county, or other governmental body having authority, such payments to be in
addition to all other payments required to be paid to Lessor by Lessee under
the terms of this Lease. Any such payment shall be paid concurrently with the
payment of the rent, additional rent, operating expenses or other charge upon
which the tax is based as set forth above.
15.06 Captions. The captions appearing in this Lease are inserted only as a
matter of convenience and in no way define, limit, construe or describe the
scope or intent of any section.
15.07 Notice. All rent and other payments required to be made by Lessee shall
be payable to Lessor at the address set forth in section 1.05. All payments
required to be made by Lessor to Lessee shall be payable to Lessee at the
address set forth in section 1.05, or at any other address within the United
States as Lessee may specify from time to time by written notice. Any notice
or document required or permitted under this Lease shall be in writing and
shall be personally delivered or shall be deemed to be delivered (whether or
not actually received) when deposited in the United States Mail, postage
prepaid, certified mail, return receipt requested, addressed to the parties at
the respective addresses set forth in section 1.05.
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15.08 Submission of Lease. Submission of this Lease to Lessee for signature
does not constitute a reservation of space or an option to lease. This Lease
is not effective until execution by and delivery to both Lessor and Lessee.
15.09 Corporate Authority. Lessee hereby represents and warrants that
Lessee is a duly authorized and existing corporation, that Lessee is qualified
to do business in the state in which the leased premises are located, that the
corporation has full right and authority to enter into this Lease, and that
each person signing on behalf of the corporation is authorized to do so.
Lessor hereby represents and warrants that it is a duly authorized and existing
joint venture and that the person signing for Lessor have all due authority to
execute and deliver the Lease.
15.10 Severability. If any provision of this Lease or the application thereof
to any person or circumstance shall be invalid or unenforceable to any extent,
the remainder of this Lease and the application of such provisions to other
persons or circumstances shall not be affected thereby and shall be enforced to
the greatest extent permitted by law.
15.11 Lessor's Liability. If Lessor shall be in default under this Lease and,
if as a consequence of such default, Lessee shall recover a money judgment
against Lessor, such judgment shall be satisfied only out of the right, title
and interest of Lessor in the building as the same may then be encumbered and
neither Lessor nor any person or entity comprising Lessor shall be liable for
any deficiency. In no event shall Lessee have the right to levy execution
against any property of Lessor nor any person or entity comprising Lessor other
than its interest in the building as herein expressly provided.
15.12 Indemnity. Lessor agrees to indemnify and hold harmless Lessee from and
against any liability or claim, whether meritorious or not, arising with
respect to any broker whose claim arises by, through or on behalf of Lessor.
Lessee agrees to indemnify and hold harmless Lessor from and against any
liability or claim, whether meritorious or not, arising with respect to any
broker whose claim arises by, through or on behalf of Lessee.
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15.13 The laws of the State of Texas shall govern this Lease.
ARTICLE 16.00 AMENDMENT AND LIMITATION OF WARRANTIES
16.01 Entire Agreement. IT IS EXPRESSLY AGREED BY LESSEE, AS A MATERIAL
CONSIDERATION FOR THE EXECUTION OF THIS LEASE, THAT THIS LEASE, WITH THE
SPECIFIC REFERENCES TO WRITTEN EXTRINSIC DOCUMENTS, IS THE ENTIRE AGREEMENT OF
THE PARTIES; THAT THERE ARE, AND WERE, NO VERBAL REPRESENTATIONS, WARRANTIES,
UNDERSTANDINGS, STIPULATIONS, AGREEMENTS OR PROMISES PERTAINING TO THIS LEASE
OR TO THE EXPRESSLY MENTIONED WRITTEN EXTRINSIC DOCUMENTS NOT INCORPORATED IN
WRITING IN THIS LEASE.
16.02 Amendment. THIS LEASE MAY NOT BE ALTERED, WAIVED, AMENDED OR EXTENDED
EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY LESSOR AND LESSEE.
16.03 Limitation of Warranties. LESSOR AND LESSEE EXPRESSLY AGREE THAT THERE
ARE AND SHALL BE NO IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE OR OF ANY OTHER KIND ARISING OUT OF THIS LEASE, AND THERE ARE
NO WARRANTIES WHICH EXTEND BEYOND THOSE EXPRESSLY SET FORTH IN THIS LEASE.
ARTICLE 17.00 OTHER PROVISIONS
17.01 Lessee shall be entitled to possession of the property on January 1,
1997 subject to all the terms and conditions in this lease other than the
payment of Base Rent for the period January 1, 1997 until January 31, 1997. In
addition, and notwithstanding any other provision in this Lease, in the event
that possession of all of the Premises is not delivered to Lessee on or before
February 28, 1997, Lessee shall have the right to
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terminate the Lease by delivery of notice to Lessor within ten (10) days of such
date, and the Lease shall terminate as of the date that such notice is deposited
in the manner for notice provided for hereunder.
17.02 Option to Extend Term: Lessor hereby grants to Lessee and the assignees
of Lessee permitted in Paragraph 9.02 hereof two (2) options ("Options") to
extend the Lease term for additional terms of five years (5) each
("Extensions"), on the same terms, conditions and covenants set forth in the
Lease Agreement, except as provided below. Each option shall be exercised only
by written notice delivered to the Lessor at least one hundred eighty (180) days
before the expiration of the Lease Term or the preceding Extension of the Lease
Term. If Lessee fails to deliver Lessor written notice of the exercise of an
Option within the prescribed time period, such Option and any succeeding Options
shall lapse, and there shall be no further right to extend the Lease Term. Each
Option shall be exercisable by Lessee on the express condition that at the time
of the exercise, and at all times prior to the commencement of such Extensions,
Lessee shall not be in default under any of the provisions of this Lease. The
foregoing Options are personal to Lessee and may not be exercised by any
assignee or subtenant.
A. Lessee shall have no further renewal options unless granted by Lessor in
writing: and
B. The rental for the first renewal term shall be $10.50 per square foot.
The rental for the second renewal term shall be based on the then prevailing
rental rates for properties of equivalent quality, size, utility and location,
with the length of the lease term, and credit standing of the Lessee herein, to
be taken into account. In no event shall the rental rate be less than the
rental rate payable for the month immediately preceding the date of any rent
adjustments.
17.03 Lessee will be permitted to post six (6) parking spaces at the front
entrance of its space for its exclusive use. All other parking spaces are
unreserved. Lessor will not enforce the exclusivity and Lessee cannot have
violator's cars towed or molested in any way. In addition to its reserved
parking spaces, Lessee shall provide 100 unreserved parking spaces, which shall
be available for Lessee's intended mixed office/storage use and sufficient to
comply with zoning law.
17.04 Leasehold Improvements.
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(A) Notwithstanding anything to the contrary in the Lease, except for the
HVAC systems, which are the responsibility of Lessor to the extent set out in
Paragraph 17.07 hereof, Lessee accepts the Leased Premises in their "AS IS"
condition. Lessee shall cause plans and specifications for the tenant
improvements to be prepared and submitted to Lessor for Lessor's approval, which
approval shall not be unreasonably withheld. All work shall be performed in
conformance with such approved plans and specifications and in a good and
workmanlike manner and in compliance with the American with Disabilities Act of
1990 ("ADA"). However, Lessee shall not be required to make any exterior
alterations in order to bring the Premises into compliance with the ADA. Any
changes or modifications to the approved plans and specifications shall be
signed by Lessor and Lessee constitute an amendment to this Lease. Lessor
agrees not to unreasonably withhold or delay its consent or approval to any such
requested change or modification to the approved plans specifications.
(B) Lessor agrees to provide Lessee with a leasehold improvements allowance
of $62,037.00 which amount is intended to include all costs associated with such
construction such as, permit fees, construction manager fees, architectural
fees, and all utility connections to the Leased Premises, (the "Allowance"). The
Allowance shall be paid to Lessee upon substantial completion of such
construction, as evidenced by a certification from Lessee's architect and upon
delivery of releases of liens from the contractor to Lessor. If any portion of
the allowance is unused, Lessee may use the remaining allowance towards moving
expenses or the unused amount will be applied towards rent.
(C) Lessee shall enter into a construction contract with a reputable general
contractor having at least five (5) years experience in tenant improvement
construction to perform the leasehold construction in accordance with the
approved plans and specifications.
17.05 Early Termination Election
Lessee may at Lessee's election terminate this Lease prior to the expiration of
the lease term set forth in Section 1.03, on January 31, 2002 ("Early
Termination Date") upon the terms and conditions set forth herein.
(i) Lessee shall give Lessor written notice of its election to terminate this
lease at least One Hundred Eighty (180) days prior to the Early Termination Date
upon which termination shall become effective.
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(ii) No material and uncured event of default by Lessee or no event that with
notice or the passage of time, or both, would constitute a material event of
default by Lessee shall have occurred on or before the Early Termination Date.
(iii) Concurrent with the giving of notice under Paragraph 17.05(i), Lessee
shall pay to Lessor in cash the sum of $ 98,226.00 (Ninety-eight thousand two
hundred twenty-six Dollars); and
(iv) Concurrent with the giving of notice under Paragraph 17.05(i), Lessee
shall pay to Lessor in cash the amount of the unamortized tenant improvements
and commissions using an interest factor of twelve percent (12%) per annum. By
way of example if the tenant improvements and commissions were $80,000 the
unamortized amount at January 31, 2002, would be $30,000.
17.06 Right of First Refusal.
I. Lessor and Lessee acknowledge that 0000 X. Xxxxxxxx Xxxx containing 20,
679 square feet is immediately adjacent to the Premises (hereinafter referred to
as "Adjacent Premises").
II. In the event that Lessor received a proposal from a third party to lease
the Adjacent Premises then Lessor shall, prior to preceding with negotiations or
concluding any lease, with such third party, will notify Lessee of the rent
which Lessor is willing to lease the Adjacent Premises which shall be the rent
being offered at the time ("Adjacent Premises Rent").
III. If Lessee within five (5) business days after receipt of Lessor's notice
as set forth in Paragraph 17.06 II above, indicates, in writing, its agreement
to lease the Adjacent Premises, then the Adjacent Premises shall be included
within the Premises and leased to Lessee at the Adjacent Premises Rent and
otherwise pursuant to the provisions of this lease without any obligations on
the part of the Lessor to make any alterations or repairs, and to afford any
rent abatement and without any contingency provisions. However, the rent
attributable to the Adjacent Premises shall be added to the rent payable under
this Lease. The parties shall immediately execute an amendment to this lease
stating the addition of the Adjacent Premises.
IV. If the Lessee does not deliver a notice, in writing, within five (5)
business days of receipt of Lessor's said notice, as set forth in Paragraph
17.06 II above, indicating its agreement to lease the Adjacent Premises, Lessor
thereafter shall have the right to lease
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the Adjacent Premises to any third party or parties and there shall be no
further obligation in the future to give Lessee any notice to lease or Right of
First Refusal.
17.07 Provided Lessee enters into a maintenance contract for the HVAC unit(s)
with a qualified HVAC contractor acceptable to Lessor, Lessor will warrant the
HVAC unit(s) for the first twelve (12) months of the Lease Agreement.
ARTICLE 18.00 SIGNATURES
Signed at DALLAS , this day of NOVEMBER , 1996.
LESSOR LESSEE
XXXXXXXX PLACE ONE JOINT VENTURE DNA ENTERPRISES, INC.
BY: BY:
XXX X. XXXXXXXXX,
(TYPED NAME AND TITLE) (TYPED NAME AND TITLE)
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RULES AND REGULATIONS
1. Lessor agrees to furnish Lessee two keys without charge. Additional keys
will be furnished at a nominal charge. Lessee shall not change locks or
install additional locks on doors without prior written consent of Lessor.
Lessee shall not make or cause to be made duplicates of keys procured from
Lessor without prior approval of Lessor. All keys to leased premises shall be
surrendered to Lessor upon termination of this Lease.
2. Lessee will refer all contractors, contractor's representatives and
installation technicians rendering any service on or to the leased premises for
Lessee to Lessor for Lessor's approval before performance of any contractual
service. Lessee's contractors and installation technicians shall comply with
Lessor's rules and regulations pertaining to construction and installation.
This provision shall apply to all work performed on or about the leased
premises or project, including installation of telephones, telegraph equipment,
electrical devices and attachments and installations of any nature affecting
floors, walls, woodwork, trim, windows, ceilings and equipment or any other
physical portion of the leased premises or project.
3. Lessee shall not at any time occupy any part of the leased premises or
project as sleeping or lodging quarters.
4. Lessee shall not place, install or operate on the leased premises or in
any part of the building any engine, stove or machinery, or conduct mechanical
operations or xxxx thereon or therein, or place or use in or about the leased
premises or project any explosives, gasoline, kerosene, oil, acids, caustics,
or any flammable, explosive or hazardous material without written consent of
Lessor.
5. Lessor will not be responsible for lost or stolen personal property,
equipment, money or jewelry from the leased premises or the project regardless
of whether such loss occurs when the area is locked against entry or not.
6. No dogs, cats, fowl, or other animals shall be brought into or kept in or
about the leased premises or project.
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7. Employees of Lessor shall not receive or carry messages for or to any
Lessee or other person or contract with or render free or paid services to any
Lessee or to any of Lessee's agents, employees, or invitees.
8. None of the parking, plaza, recreation or lawn areas, entries, passages,
doors, elevators, hallways or stairways shall be blocked or obstructed or any
rubbish, litter, trash, or material of any nature placed, emptied or thrown
into these areas or such area used by Lessee's agents, employees or invitees at
any time for purposes inconsistent with their designation by Lessor.
9. The water closets and other water fixtures shall not be used for any
purpose other than those for which they were constructed, and any damage
resulting to them from misuse or by the defacing or injury of any part of the
building shall be borne by the person who shall occasion it. No person shall
waste water by interfering with the faucets or otherwise.
10. No person shall disturb occupants of the building by the use of any
radios, record players, tape recorders, musical instruments, the making of
unseemly noises or any unreasonable use.
11. Nothing shall be thrown out of the windows of the building or down the
stairways or other passages.
12. Lessee and its employees, agents and invitees shall park their vehicles
only in those parking areas designated by Lessor. Lessee shall furnish Lessor
with state automobile license numbers of Lessee's vehicles and its employees'
vehicles within five days after taking possession of the leased premises and
shall notify Lessor of any changes within five days after such change occurs.
Lessee shall not leave any vehicle in a state of disrepair (including without
limitation, flat tires, out of date inspection stickers or license plates) on
the leased premises or project. If Lessee or its employees, agents or invitees
park their vehicles in areas other than the designated parking areas or leave
any vehicle in a state of disrepair, Lessor, after giving written notice to
Lessee of such violation, shall have the right to remove such vehicles at
Lessee's expense.
13. Parking in a parking garage or area shall be in compliance with all
parking rules and regulations including any sticker or other identification
system established by Lessor. Failure to observe the rules and regulations
shall terminate Lessee's right to use the parking garage or area and subject
the vehicle in violation of the parking rules and regulations to removal and
impoundment. No termination of parking privileges or removal of impoundment of
a vehicle shall create any liability on Lessor or be deemed to interfere with
Lessee's right to possession of its leased premises. Vehicles
35
must be parked entirely within the stall lines and all directional signs, arrows
and posted speed limits must be observed. Parking is prohibited in areas not
striped for parking, in aisles, where "No Parking" signs are posted, on ramps,
in cross hatched areas, and in other areas as may be designated by Lessor.
Parking stickers or other forms of identification supplied by Lessor shall
remain the property of Lessor and not the property of Lessee and are not
transferable. Every person is required to park and lock his vehicle. All
responsibility for damage to vehicles or persons is assumed by the owner of the
vehicle or its driver.
14. Movement in or out of the building of furniture or office supplies and
equipment, or dispatch or receipt by Lessee of any merchandise or materials
which requires use of elevators or stairways, or movement through the building
entrances or lobby, shall be restricted to hours designated by Lessor. All
such movement shall be under supervision of Lessor and carried out in the
manner agreed between Lessee and Lessor by prearrangement before performance.
Such prearrangements will include determination by Lessor of time, method, and
routing of movement and limitations imposed by safety or other concerns which
may prohibit any article, equipment or any other item from being brought into
the building. Lessee assumes, and shall indemnify Lessor against, all risks
and claims of damage to persons and properties arising in connection with any
said movement.
15. Lessor shall not be liable for any damages from the stoppage of elevators
for necessary or desirable repairs or improvements or delays of any sort or
duration in connection with the elevator service.
16. Lessee shall not lay floor covering within the leased premises without
written approval of the Lessor. The use of cement or other similar adhesive
materials not easily removed with water is expressly prohibited.
17. Lessee agrees to cooperate and assist Lessor in the prevention of
canvassing, soliciting and peddling within the building or project.
18. Lessor reserves the right to exclude from the building or project, between
the hours of 6:00p.m. and 7:00a.m. on weekdays and at all hours on Saturday,
Sunday and legal holidays, all persons who are not known to the building or
project security personnel and who do not present a pass to the building signed
by the Lessee. Each Lessee shall be responsible for all persons for whom he
supplies a pass.
19. It is Lessor's desire to maintain in the building or project the highest
standard of dignity and good taste consistent with comfort and convenience for
Lessees. Any action or condition not meeting this high standard should be
reported directly to
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Lessor. Your cooperation will be mutually beneficial and sincerely appreciated.
Lessor reserves the right to make such other and further reasonable rules and
regulations as in its judgment may from time to time be necessary, for the
safety, care and cleanliness of the leased premises and for the preservation of
good order therein.
