Exhibit 10.25
LEASE
between
SILVER OAKS, LLC,
a California limited liability company
and
XXXXXX AUTOMATION, INC.,
a Delaware corporation
00000 XXXXXX XXXXXXXXX
XXXXXX, XXXXXXXXXX
TABLE OF CONTENTS
Page
----
1. Parties .............................................................. 1
2. Premises ............................................................. 1
3. Term ................................................................. 1
3.1 Term ............................................................. 1
3.2 Delay in Possession .............................................. 1
3.3 Early Possession ................................................. 2
3.4 Tenant's Election to Complete .................................... 2
4. Rent ................................................................. 3
4.1 Base Rent ........................................................ 3
4.2 Certain Expenses ................................................. 3
4.3 Certain Capital Items ............................................ 4
4.4 Effect of Exercise of Option to Extend on Payment of Certain
Amounts Under Section 4.3 ...................................... 5
5. Security Deposit ..................................................... 6
6. Use .................................................................. 6
6.1 Use .............................................................. 6
6.2 Compliance with Law .............................................. 6
6.3 Condition of Premises ............................................ 7
7. Maintenance, Repairs and Alterations ................................. 8
7.1 Tenant's Obligations ............................................. 8
7.2 Surrender ........................................................ 9
7.3 Landlord's Rights ................................................ 9
7.4 Landlord's Obligations ........................................... 10
7.5 Alterations and Additions ........................................ 10
8. Insurance; Indemnity ................................................. 15
9. Damage or Destruction ................................................ 19
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9.1 Definitions.......................................................19
9.2 Partial Damage -- Insured Loss....................................19
9.3 Partial Damage -- Uninsured Loss..................................20
9.4 Total Destruction.................................................20
9.5 Damage Near End of Term...........................................21
9.6 Abatement of Rent; Tenant's Remedies..............................21
9.7 Termination -- Advance Payments...................................22
9.8 Waiver............................................................22
10. Real Property Taxes....................................................22
10.1 Definition of "Real Property Tax".................................22
10.2 Payment of Taxes..................................................23
10.3 Personal Property Taxes...........................................24
10.4 Additional Provisions Regarding Real Property Taxes...............24
11. Utilities..............................................................24
12. Assignment and Subletting..............................................25
12.1 Landlord's Consent Required.......................................25
12.2 Procedure.........................................................25
12.3 Tenants Other Than Individuals....................................26
12.4 Tenant Affiliate..................................................27
12.5 No Re
lease of Tenant..............................................27
12.6 Terms and Conditions Applicable to Subletting.....................27
12.7 Attorney's Fees...................................................29
13. Defaults; Remedies.....................................................29
13.1 Defaults..........................................................29
13.2 Remedies..........................................................30
13.3 Default by Landlord...............................................32
13.4 Late Charges......................................................32
14. Condemnation...........................................................33
15. Broker's Commissions...................................................34
16. Estoppel Certificate...................................................34
17. Landlord's Liability...................................................35
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18. Severability...................................................... 36
19. Interest on Past-due Obligations.................................. 36
20. Time of Essence................................................... 36
21. Additional Rent................................................... 36
22. Incorporation of Prior Agreements; Amendments..................... 36
23. Notices........................................................... 37
24. Waivers........................................................... 38
25. Recording......................................................... 38
26. Holding Over...................................................... 38
27. Cumulative Remedies............................................... 39
28. Covenants and Conditions.......................................... 39
29. Binding Effect; Choice of Law..................................... 39
30. Subordination; Attornment; Non-Disturbance........................ 39
30.1 Subordination................................................ 39
30.2 Attornment................................................... 39
30.3 Non-Disturbance.............................................. 39
30.4 Self-Executing............................................... 40
31. Attorney's Fees................................................... 40
32. Landlord's Access................................................. 41
33. Auctions.......................................................... 41
34. Signs............................................................. 41
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35. Merger................................................ 42
36. Consents.............................................. 42
37. [Intentionally Omitted]............................... 42
38. Quiet Possession...................................... 42
39. Options............................................... 42
39.1 Definition....................................... 42
39.2 Options Personal; Multiple Options............... 43
39.3 Effect of Default on Options..................... 43
39.4 First Option .................................... 43
39.5 Second Option ................................... 44
39.6 Fair Market Rent ................................ 45
40. [Intentionally Omitted] .............................. 47
41. Security Measures .................................... 47
42. Easements ............................................ 47
43. Performance Under Protest ............................ 48
44. Authority ............................................ 48
45. Cashier's Checks ..................................... 48
46. Amendments to
Lease .................................. 48
47. Storage Tanks ........................................ 48
48. Tenant's Covenants Regarding Hazardous Materials ..... 49
48.1 Landlord's Prior Consent ........................ 49
48.2 Compliance with Hazardous Materials Laws ........ 50
48.3 Hazardous Materials Removal ..................... 51
48.4 Notices ......................................... 51
48.5 Indemnification of Landlord ..................... 52
48.6 Preexisting Conditions .......................... 52
48.7 Studies .................................................. 52
49. [Intentionally Omitted] ....................................... 53
50. Easements and Restrictions of Record .......................... 53
51. Offer ......................................................... 53
52. Waiver of Trial by Jury ....................................... 53
53. ERISA ......................................................... 53
54. Parking ....................................................... 54
55. Landlord Shell Improvements ................................... 54
56. Tenant Improvements ........................................... 54
57. Additional Mezzanine Space .................................... 54
58. Self Help ..................................................... 54
Exhibit "A" Premises (Paragraph 2)
Exhibit "B" Work Letter
Exhibit "C" Location and Design of Above-Ground Tank
Exhibit "D" Description of Initial Plans
Exhibit "E" Form of Memorandum of
Lease
Exhibit "F" Form of Subordination Agreement
Exhibit "G" Certain Permitted Items
Exhibit "H" Assessment Allocation Mechanism
Exhibit "I" Certain CC&R Provisions
Exhibit "J" Hazardous Substance Reports
LEASE
1. Parties. This
Lease (the "
Lease"), dated, for reference purposes only; May
30, 2001, is made by and between SILVER OAKS LLC, a California limited liability
company (herein called "Landlord"), and XXXXXX AUTOMATION, INC., a Delaware
corporation (herein called "Tenant").
2. Premises. Landlord hereby
leases to Tenant and Tenant
leases from Landlord
for the term, at the rental, and upon all of the conditions set forth herein,
that certain real property situated in the County of Los Angeles, State of
California, commonly known as 00000 Xxxxxx Xxxxxxxxx, Xxxxxx, California,
consisting of the building (the "Building") on the property containing 60,096
square feet of area (which area is comprised of a 6,000 square foot mezzanine
area and a 54,096 square foot building footprint) and adjacent land and more
particularly delineated on Exhibit "A" attached hereto and by this reference
incorporated herein. Said real property including the land and all improvements
therein, is herein called the "Premises." The Premises may from time to time be
under common ownership or management with one or more adjacent properties.
3. Term.
3.1 Term. The term of this
Lease shall be for ten (10) years commencing on
October 1, 2001 (the "Commencement Date") and ending on September 30, 2011
unless extended or sooner terminated pursuant to any provision hereof.
3.2 Delay in Possession. Notwithstanding that Commencement Date, if for any
reason Landlord cannot deliver possession of the Premises to Tenant with
Landlord's Improvements (as defined below) substantially completed by September
15, 2001 (the "Out Date"), Landlord shall not be subject to any liability
therefor, nor shall such failure affect the validity of this Lease or the
obligations of Tenant hereunder, but in such case, Tenant shall not be obligated
to pay rent until possession of the Premises is tendered to Tenant and the
initial term shall be extended one (1) day for every day between the
Commencement Date and the date on which Landlord delivers the Premises to Tenant
with Landlord's Improvements substantially completed; provided, however, that if
Landlord shall not have delivered possession of the Premises within thirty (30)
days after the Out Date, Tenant may, at Tenant's option, by notice in writing to
Landlord within ten (10) business days thereafter, cancel this Lease, in which
event the parties shall be discharged from all obligations hereunder; provided
further, however, that if such written notice of Tenant is not received by
Landlord within said ten (10) business day period, Tenant's right to cancel this
Lease hereunder shall
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terminate and be of no further force or effect. In addition to the delay in
commencement of rent as provided in this Paragraph 3.2, in the event that
substantial completion of Landlord's Work does not occur by the Out Date, then
Tenant shall be entitled to a rent credit equal to one (1) day's Base Rent for
each one (1) full day from the period from the Out Date until the date upon
which Landlord delivers possession of the Premises to Tenant with Landlord's
Improvements substantially completed. The Out Date shall be extended by one (1)
day far every day Landlord is delayed in substantially completing the Landlord
Improvements due to (a) the acts or omissions of Tenant or its agents,
employees, or contractors, (b) inability to obtain, or delays in obtaining,
necessary permits and/or (c) any other one or more events beyond Landlord's
reasonable control.
3.3 Early Possession. If Tenant occupies the Premises prior to said commencement
date, such occupancy shall be subject to all provisions hereof, such occupancy
shall not advance the termination date. Landlord shall reasonably cooperate with
Tenant in Tenant's efforts to obtain any municipal approvals required for
Tenant's early occupancy. Tenant shall be permitted to enter the Premises on the
date that is the later of (i) the date upon which Tenant obtains permits for
construction of the Tenant Improvements described in the Space Plans (as defined
in Exhibit "B"), or (ii) the first business day after full execution and
delivery of this Lease, and prior to the Commencement Date without the
obligation for payment of rent for the purpose of constructing the Tenant
Improvement; provided that (a) Tenant will not unreasonably interfere with
Landlord's construction of the Landlord Improvements, (b) Tenant first provides
Landlord with all insurance required by the terms of this Lease, and (c) all
construction by Tenant shall be performed in accordance with the terms of this
Lease. Without limiting any other provision of this Lease, Landlord shall not be
responsible for damages or loss to any work performed by Tenant or to Tenant's
personal property or the personal property of Tenant's contractor's, employees
or agents which occurs during such period of early access.
3.4 Tenant's Election to Complete. In the event that Landlord's Improvements are
not substantially completed by the Out Date, and Tenant has not exercised its
cancellation option under Paragraph 3.2, Tenant may at any time thereafter give
Landlord and Landlord's Lender (as defined below) written notice of Tenant's
intent to take over construction of the Landlord Improvements ("Tenant's Take
Over Notice"). In the event that the Landlord Improvements are not substantially
completed within thirty (30) days after Tenant's Take Over Notice, Tenant shall
have the right to complete Landlord's Improvements subject to the following
limitations: (a) Tenant must complete the Landlord's Improvements in accordance
with the then existing plans and specifications approved by Landlord; (b) Tenant
must use qualified contractors and subcontractors; (c) the work by Tenant on the
Landlord's Improvements must be
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prosecuted in a workmanlike manner; and (d) the work on the Landlord's
Improvements must be completed lien free in accordance with the terms of this
Lease.
4. Rent.
4.1 Base Rent. Tenant shall pay to Landlord as base rent for the Premises,
monthly payments ("Base Rent"), in advance, on the first day of each month of
the term hereof in accordance with the following schedule:
Months Monthly Base Rent
------ -----------------
1-12 $37,860.48
13-24 39,002.30
25-36 40,144.13
37-48 41,346.05
49-60 42,608.06
61-72 43,870.08
73-84 45,192.19
85-96 46,574.40
97-108 47,956.61
109-120 49,398.91
Tenant shall deliver to Landlord upon the execution hereof $37,860.48 as Base
Rent for the first full month of the initial term. Rent for any period during
the term hereof which is for less than one month shall be a pro rata portion of
the monthly installment. Rent shall be payable in lawful money of the United
States to Landlord at the address stated herein or to such other persons or at
such other places as Landlord may designate in writing, without any offset or
deduction except as otherwise expressly set forth herein.
4.2 Certain Expenses. Tenant shall pay to Landlord during the term hereof,
in addition to the Base Rent and any additional rent and other amounts payable
by Tenant under this Lease all of the following costs and expenses within ten
(10) days after written demand from Landlord as additional rent:
(a) Any Assessments applicable to the Premises imposed or assessed
pursuant to the terms of that certain Amended and Restated Declaration of
Covenants, Conditions and Restrictions for Cascades Business Park, Los Angeles,
California, dated August 1, 2000 (the "CC&R's"). As used in this Section 4.2(a),
the term "Assessments" shall have the meaning given that term in the CC&R's. For
ease of
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reference, the definition of "Assessments," "Common Area," and "Common Expenses"
are reproduced in Exhibit "I" attached hereto. Any terms used in that Exhibit
but not otherwise defined shall have the meanings given those terms in the
CC&R's.
(b) A property management fee equal to 1.325% of the gross rentals
under this Lease.
Landlord agrees that no increase in the amount payable with respect to the
Premises under the CC&R's arising out of a modification or amendment of the
CC&R's shall be payable by Tenant under this Lease, except to the extent such
modification or amendment was approved by Tenant. Tenant agrees not to
unreasonably withhold, condition or delay any approval to a proposed amendment
to the CC&R's; provided that it shall not be deemed unreasonable for Tenant to
withhold its approval of a proposed amendment to the CC&R's if such amendment
shall result in an increase in the amount payable by Tenant under the CC&R's.
Landlord and Tenant agree that the methodology for determining the allocation of
costs under the CC&R's to the Premises shall be as outlined in Exhibit "H,"
attached hereto.
4.3 Certain Capital Items. As used herein, the term "Capital Item" means
an item, the cost of which under generally accepted accounting principles,
consistently applied, must be capitalized and not expensed. As used herein, the
term "Amortized Capital Cost" means a repair, maintenance, replacement,
alteration or improvement which (a) is a Capital Item, (b) either (i) costs
$15,000.00 or more with respect to a single Capital Item or (ii) has a cost that
when added to other Capital Items which are not Amortized Capital Costs would
cause the amount of costs for Capital Items that are not Amortized Capital Costs
and that are paid by Tenant to exceed $15,000.00 in any calendar year after the
fifth anniversary of the Commencement Date, (c) is undertaken after the fifth
anniversary of the Commencement Date, (d) is not related to or part of the
Tenant Improvements or any alterations by Tenant, (e) is not required due to
Tenant's particular use of the Premises, Tenant's breach of the Lease or any
alterations or other improvements to the Premises by Tenant, (f) is the
obligation of Tenant under this Lease, (g) has been approved by Landlord prior
to it having been incurred, and (f) is not a Landlord Structural Item (as
defined below). Landlord's approval under clause (g) of the previous sentence
shall not be unreasonably withheld consistent with the standards for making
capital improvements to comparable buildings of comparable age and design in Los
Angeles County, California. As used herein, the term "Useful Life" means the
useful life of the particular Capital Item determined under generally accepted
industry standards. As to each Capital Item that is a Amortized Capital Cost,
Tenant may give notice to Landlord of the proposed Capital Item, the amount of
the Amortized Capital Cost, Tenant's opinion of the Useful Life of the Capital
Item and that Tenant requires that Landlord reimburse Tenant for the entire
initial cost of the
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Amortized Capital Cost and agrees to repay Landlord on a monthly basis in a
monthly amount (the "Monthly Recovery Amount") which equals the monthly amount
that would fully amortize a loan having a principal balance equal to the
Amortized Capital Cost and an interest rate equal to the Amortization Interest
Rate (as defined below) in equal monthly payments over the number of months in
the Useful Life of the applicable Capital Item. After receipt of Tenant's
notice, Landlord may elect to perform the Capital Item constituting an Amortized
Capital Cost in lieu of reimbursing the Tenant for such Tenant Capital Cost. In
either event, commencing on the first day of the calendar month after the
calendar month in which the applicable Capital Item is completed and on the
first day of each month thereafter until the earlier of (A) the expiration of
the term of the Lease, or (B) the expiration of the number of months in the
item's Useful Life used to calculate the Monthly Recovery Amount, Tenant shall
pay Landlord as additional rent an amount equal to the Monthly Recovery Amount
as to each Amortized Capital Cost. As used herein, the term "Amortization
Interest Rate" means an interest rate equal to the LIBOR Rate plus 425 basis
points, where the "LIBOR Rate" means, for each month, the one (1) month LIBOR
(London Interbank Offered Rate) Rate published in The Wall Street Journal (the
"Reported Rate") on the first Publication Date (as defined below) of the
applicable month. If The Wall Street Journal (i) publishes more than one (1)
Reported Rate on any Publication Date, the average of such rates shall apply or
(ii) publishes a retraction or correction of any Reported Rate, the corrected
rate reported in such retraction or correction shall apply. If the Reported Rate
is no longer published at least monthly, the LIBOR Rate shall be deemed to be
such other London Interbank Offered Rate published in The Wall Street Journal as
most reasonably approximates the Reported Rate. As used herein, the term
"Publication Date" means any date on which the LIBOR Rate is published in The
Wall Street Journal. If Tenant makes the election under this paragraph 4-3, and
Landlord does not elect to perform the Capital Item constituting an Amortized
Capital Cost, Landlord shall reimburse Tenant for the entire cost of such
Capital Item within thirty (30) days after Tenant's notice to Landlord of
completion of the applicable Capital Item. As a condition to Landlord's
obligation to make the payments to Tenant described in this paragraph 4.3,
Tenant shall provide Landlord with reasonable evidence that the costs of such
Capital Item was paid and unconditional mechanic's lien releases in the form
required under California law from the contractor and subcontractors who
installed the Capital Item.
4.4 Effect of Exercise of Option to Extend on Payment of Certain Amounts
Under Section 4.3. In the event that Tenant exercises an option to extend
pursuant to paragraph 39, then with respect to Amortized Capital Costs under
paragraph 4.3 (other than Amortized Capital Costs with respect to the
replacement of the roof membrane), as to which it has not made a Monthly
Recovery Amount payment for the number of months in the Useful Life of the
applicable Capital Item, Tenant shall pay during the
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applicable Option Period a Monthly Recovery Amount until it has made monthly
payments for the number of months in the Useful Life of the applicable Capital
Item, taking into account all prior Monthly Recovery Amount payments made by
Tenant.
5. Security Deposit. Tenant shall deposit with Landlord upon execution hereof
$40,000.00 as security for Tenant's faithful performance of Tenant's obligations
hereunder (the "Security Deposit"). After the occurrence of an Event of Default,
Landlord may use, apply or retain all or any portion of the Security Deposit for
the payment of any rent or additional rent or for the payment of any other sum
to which Landlord may become obligated by reason of Tenant's default, or to
compensate Landlord for any loss or damage which Landlord may suffer thereby. If
Landlord so uses or applies all or any portion of the Security Deposit, Tenant
shall within ten (10) days after written demand therefor deposit cash with
Landlord in an amount sufficient to restore the Security Deposit to the full
amount thereof and Tenant's failure to do so shall be a material breach of this
Lease. Landlord shall not be required to keep the Security Deposit separate from
its general accounts. If Tenant performs all of Tenant's obligations hereunder,
the Security Deposit, or so much thereof as has not theretofore been applied by
Landlord, shall be returned, without payment of interest or other increment for
its use, to Tenant (or, at Landlord's option, to the last assignee, if any, of
Tenant's interest hereunder) within thirty (30) days after the later of (a) the
expiration of the term hereof, or (b) the date Tenant has vacated the Premises.
No trust relationship is created herein between Landlord and Tenant with respect
to said Security Deposit.
6. Use.
6.1 Use. The Premises shall be used and occupied for the manufacturing and
assembly of open and closed cassette wafer handling inspection and sorting tools
serving the semi-conductor industry, related office and engineering operations
and any other uses permitted by law and for no other purpose. Subject to
Tenant's obligations to comply with applicable law as provided in Section
6.2(b), Tenant shall have access to and may operate within the Premises seven
(7) days per week, twenty-four (24) hours per day, fifty-two (52) weeks per
year. Tenant shall be solely responsible for (a) determining if and to the
extent Tenant's use is permitted by applicable laws and regulations and (b)
obtaining and maintaining all permits and licenses required by applicable law
and regulations for such use.
6.2 Compliance with Law.
(a) Landlord warrants to Tenant to Landlord's actual knowledge that
the Premises, in the state existing on the date (the "Possession Date") that
Landlord
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tenders possession of the Premises to Tenant with the Landlord Improvements
substantially completed, but without regard to the Tenant Improvements construed
by Tenant pursuant to Exhibit "B," alterations by Tenant or to the use for which
Tenant will occupy the Premises, does not violate any covenants or restrictions
of record, or any applicable building code, law, rule, regulation, statute or
ordinance ("Applicable Law") in effect and enforceable against the Premises on
the Possession Date. In the event it is determined that this warranty has been
violated, then it shall be the obligation of the Landlord, after written notice
from Tenant, to promptly, at Landlord's sole cost and expense, rectify any such
violation. In the event Tenant does not give to Landlord written notice of the
violation of this warranty within one (1) year after the Possession Date, the
correction of same shall be the obligation of Tenant at Tenant's sole cost,
subject to Landlord's obligations under Paragraph 7.4(b) with respect to
Landlord's Structural Items.
(b) Except as provided in Paragraph 6.2(a), Tenant shall, at
Tenant's expense, comply promptly with all Applicable Laws, and requirements of
any fire insurance underwriters or rating bureaus, now in effect or which may
hereafter come into effect, whether or not they reflect a change in policy from
that now existing, during the term or any part of the term hereof, relating in
any manner to the Premises or the occupation and use by Tenant of the Premises.
Tenant shall not use nor permit the use of the Premises in any manner that will
tend to create waste or a nuisance.
6.3 Condition of Premises.
(a) Landlord shall deliver the Premises to Tenant clean and free of
debris, occupants, rodents, insects, and other pests on the Lease on the
Possession Date and Landlord warrants to Tenant to Landlord's actual knowledge
that the plumbing, lighting, air conditioning, heating, and loading docks and
doors in the Premises other than those portions constructed by Tenant shall be
in good operating condition on the Possession Date. In the event that it is
determined that this warranty has been violated, then it shall be the obligation
of Landlord, after receipt of written notice from Tenant setting forth with
specificity the nature of the violation, to promptly, at Landlord's sole cost,
rectify such violation. Tenant's failure to give such written notice to Landlord
within the Reporting Period (as defined below) shall cause the conclusive
presumption that Landlord has complied with all of Landlord's obligations
hereunder. As used in this Section 6.3(a), the term "Reporting Period" means the
period ending 30 days after the Commencement Date with respect to any violation
that is discoverable by a reasonable inspection of the Premises and the period
ending 90 days after the Commencement Date with respect to any other violation.
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(b) Except as otherwise provided in this Lease, Tenant hereby
accepts the Premises in their condition existing as of the Possession Date,
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 or easements of record, and accepts this Lease subject
thereto and to all matters disclosed thereby and by any exhibits attached
hereto. Tenant acknowledges that neither Landlord nor Landlord's agent has made
any representation or warranty as to the present or future suitability of the
Premises for the conduct of Tenant's business.
7. Maintenance, Repairs and Alterations.
7.1 Tenant's Obligations.
(a) Tenant shall keep in good order, condition and repair the
Premises and every structural or nonstructural part (other than the Landlord
Structural Items (as defined below)) thereof (whether or not such portion of the
Premises requiring repair, or the means of repairing the same are reasonably or
readily accessible to Tenant, and whether or not the need for such repairs
occurs as a result of Tenant's use, any prior use, the elements or the age of
such portion of the Premises) including, without limiting the generality of the
foregoing, all plumbing, heating and air conditioning (Tenant shall procure and
maintain, at Tenant's expense, an air conditioning system maintenance contract)
ventilating, electrical, lighting facilities and equipment within the Premises,
fixtures, walls (interior and exterior), ceilings, roofs (including without
limitation the composition roofing membrane), floors, windows, doors, plate
glass and skylights located within the Premises, and all driveways, parking
lots, fences and signs located on the Premises and sidewalks and parkways
adjacent to the Premises.
(b) Tenant shall maintain the Premises as provided in Paragraph
7.1(a) and in accordance with the requirements of the CC&R's; provided that a
copy of such covenants or restrictions are provided to Tenant in writing.
Tenant, in keeping the Premises in good order, condition and repair, shall
exercise and perform good maintenance practices and any damage or deterioration
shall not be deemed "ordinary wear and tear" if the same could have been
prevented by good maintenance practice. Tenant's obligations shall include
restorations, replacements or renewals when necessary and when determined not to
be due to ordinary wear and tear, in order to keep the Premises and all
improvements thereon or a part thereof in good order, condition and state of
repair. Notwithstanding anything contained in the Lease to the contrary, Tenant
shall make all repairs whatsoever on the Premises necessitated by the
negligence, misconduct or fault of Tenant, or its agents, licensees or agents.
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(c) If the term of this Lease, as the same may be extended or
renewed, exceeds five (5) years, Landlord shall have the right to require Tenant
to repaint the improvements every five (5) to seven (7) years, but not more
often than once every five (5) years, as reasonably necessary.
7.2 Surrender. On the last day of the term hereof, or on any sooner
termination, Tenant shall surrender the Premises to Landlord in the same
condition as when received, ordinary wear and tear and loss by casualty (to the
extent that Landlord is obligated to repair the same under this Lease) and
condemnation excepted, clean and free of debris; provided, however, that Tenant
may, but shall not be obligated to, remove any of the improvements described in
Exhibit "D" or any Alterations (as defined below) or Utility Installations (as
defined below) as to which Landlord has waived the obligation to remove such
items at the end of the term pursuant to Paragraph 7.5(a), below. Tenant shall
repair any damage to the Premises occasioned by the installation or removal of
Tenant's trade fixtures, furnishings and equipment. Notwithstanding anything to
the contrary otherwise stated in this Lease, upon the expiration of the term or
the earlier termination of this Lease, Tenant shall leave the air lines, power
panels, electrical distribution systems, mechanical systems, lighting fixtures,
air conditioning, plumbing, heating (including space heaters) and fencing on the
Premises in substantially the same condition and operating order as on the
Commencement Date, and Tenant shall within thirty (30) days after receipt of a
reasonably detailed invoice therefor pay to Landlord that portion of the cost to
restore such items to good condition and operating order as may be reasonably
allocable to Tenant's tenancy.
7.3 Landlord's Rights. Tenant shall provide to Landlord written reports
every six (6) months setting forth in reasonable detail the regularly scheduled
maintenance conducted by Tenant with respect to the Premises, which shall
include reasonable evidence of the actual performance and completion of such
scheduled maintenance. If Tenant fails to perform Tenant's obligations under
this Paragraph 7, or under any other paragraph of this Lease, Landlord may at
its option (but shall, not be required to) enter upon the Premises after ten
(10) days' prior written notice to Tenant (except in the case of an emergency,
in which case no notice shall be required), perform such obligations on Tenant's
behalf and put the same in good order, condition and repair, and the cost
thereof together with interest thereon at the Interest Rate (as defined below)
shall become due and payable as additional rental to Landlord together with
Tenant's next rental installment.
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7.4 Landlord's Obligations.
(a) Except for the obligations of Landlord under Paragraphs 6.2(a)
and 6.3(a) (relating to Landlord's warranty), Paragraph 9 (relating to
destruction of the Premises), under Paragraph 14 (relating to condemnation of
the Premises) Paragraph 7.4(b), it is intended by the parties hereto that
Landlord have no obligation, in any manner whatsoever, to repair and maintain
the Premises nor the Building located thereon nor the equipment therein, whether
structural or non structural, all of which obligations are intended to be that
of the Tenant under Paragraph 7.1 hereof. Tenant expressly waives the benefit of
any statute now or hereinafter in effect which would otherwise afford Tenant the
right to make repairs at Landlord's expense or to terminate this Lease because
of Landlord's failure to keep the Premises in good order, condition and repair.
(b) Landlord, at Landlord's sole cost and expense, and without
reimbursement as an Operating Expense, shall maintain, repair and replace the
structural elements of the foundations, exterior walls, roof structure and
improvements below grade (the "Landlord Structural Items"), subject to normal
wear and tear, provided however, if the need for such maintenance, repair or
replacement arises because of the negligence, misconduct or fault of Tenant, or
its agents, licensees or invitees, Tenant, subject to Paragraph 8.8 hereof,
shall reimburse Landlord for the cost thereof within thirty (30) days after
receipt of a reasonably detailed invoice therefor.
(c) In the event Landlord holds a warranty covering any work of
repair or maintenance Tenant is obligated to perform under this Lease, Landlord
shall, at Landlord's cost, assign such warranty to Tenant to the extent
necessary to allow Tenant to obtain the benefit of that warranty for that repair
or maintenance. Effective upon any termination of this Lease, any warranty to
the extent so assigned to Tenant is hereby reassigned by Tenant to Landlord. At
Tenant's request, Landlord will enforce such warranties against the applicable
parties making such warranties for the benefit of a Tenant.
7.5 Alterations and Additions.
(a) Tenant shall not, without Landlord's prior written consent,
which consent shall not be unreasonably withheld, conditioned or delayed, make
any Alterations (as defined below) or Utility Installations in, on or about the
Premises. Tenant may, however, make nonstructural Alterations or Utility
Installations to the interior of the Premises (excluding the roof) without such
consent but upon notice to Landlord, as long as they are not visible from the
outside, do not involve puncturing, relocating or removing the roof or any
existing walls and the cumulative costs thereof
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does not exceed $25,000.00 in each instance, and provided that this exception is
exercised in good faith by Tenant (i.e., Tenant does not artificially segregate
an Alteration or Utility Installation which by its nature is a single unit or
event into smaller increments for the purposes of avoiding the necessity of
obtaining Landlord's consent). Notwithstanding the foregoing, Landlord may
withhold its consent in its sole discretion with respect to any Alteration or
Utility Installation to the exterior of the Premises or the exterior of the
Building or which affects the structural elements of the Building. As used in
Paragraph 7.5, the term "Utility Installation" shall mean carpeting, window
coverings, air lines, power panels, electrical distribution systems, lighting
fixtures, space heaters, air conditioning, plumbing and fencing. As used in this
Paragraph 7.5, the term "Alteration" shall mean any modification of the
improvements on the Premises other than Utility Installations, whether by
addition or deletion. Subject to the following three sentences, Landlord may
require that Tenant remove any or all of said Alterations or Utility
Installations at the expiration or earlier termination of the term, and restore
the Premises to their prior condition. Prior to commencing any Alteration or
Utility Installation, Tenant may request that Landlord waive Tenant's obligation
to remove such Alteration or Utility Installation at the end of the term. Any
such waiver must be in writing and shall only apply to the Alteration or Utility
Installation described therein. Landlord hereby agrees that Tenant shall not be
obligated to remove the initial improvements described in Exhibit "D" upon the
expiration of the term. Landlord may require Tenant to provide Landlord, at
Tenant's sole cost and expense, a lien and completion bond in an amount equal to
one and one-half times the estimated cost of such improvements, to insure
Landlord against any liability for mechanic's and materialmen's liens and to
insure completion of the work; provided that Landlord agrees to waive the
requirement for such bond so long as the initially-named tenant or any Tenant
Affiliate (as defined below) is the Tenant under this Lease and in possession of
a portion of the Premises in which the work is being performed. Should Tenant
make any Alterations or Utility Installations as to which Landlord's consent is
required without the prior approval of Landlord, Landlord may, at any time
during the term of the Lease, require that Tenant remove any or all of the same.
(b) Any Alterations or Utility Installations made by Tenant during
the term of this Lease shall be done in a good and workmanlike manner and of
good and sufficient materials, and Tenant shall, within thirty (30) days after
completion of such Alteration or Utility Installation, provide Landlord with
as-built plans and specifications for same. Notwithstanding anything contained
in this Lease to the contrary, Paragraphs 7.5(d)(1)(ii) and (iii) shall apply to
Alterations or Utility Installations (other than racking, shelving and temporary
partitions) not requiring Landlord's consent under Paragraph 7.5(a).
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(c) Any Alterations or Utility Installations in, or about the
Premises that Tenant shall desire to make and which require the consent of the
Landlord shall be presented to Landlord in written form, with proposed detailed
plans. If Landlord shall give its consent, the consent shall be conditioned upon
Tenant acquiring a permit to perform such Alteration or Utility Installation
from appropriate governmental agencies, the furnishing of a copy thereof to
Landlord prior to the commencement of the work and the compliance by Tenant of
all conditions of said permit in a prompt and expeditious manner, and upon
satisfaction of all of the requirements set forth in Paragraph 7.5(d), below.
(d) For any Alterations or Utility Installations requiring
Landlord's prior written consent:
(1) Tenant shall:
(i) Request Landlord's approval in writing at least
thirty (30) days prior to proposed Alteration or Utility Installations.
(ii) Employ a California licensed architect, contractor
and structural engineer in connection with the proposed construction.
(iii) Be fully responsible for the acts of Tenant's
consultants, employees, contractors, subcontractors, invitees and agents,
and cause them to fully comply with any applicable terms of this Lease and
documents referred to by this Lease and all applicable laws, rules and
regulations.
(iv) Enter into written agreements with an architect and
general contractor. Copies of executed agreements will be forwarded to
Landlord within five (5) days of Landlord's request therefor.
(v) Cause to be obtained an applicable building permit
for any and all construction and modifications, and construct the
additions and alterations and perform the construction work in accordance
with all applicable laws, including without limitation the Americans With
Disabilities Act.
(2) Tenant's architect shall:
(i) Be licensed by the State of California.
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(ii) Incorporate the building standard details (if any)
supplied by Landlord onto the drawings.
(iii) Submit final plans for Landlord's written approval
prior to construction.
(iv) Be available for final inspection with Landlord at
job completion.
(v) Sign off on the as-built drawings as the Architect's
certification that the improvements have, in fact, been built as per the
Architect's design.
(3) Tenant's general contractor and/or subcontractors shall:
(i) Be licensed by the State of California.
(ii) Have substantial experience providing similar
quality and quantity of improvements.
(iii) Have a bonding capacity equal to or exceeding the
valuation of the job. Landlord may, at its sole option, require the job to
be bonded; provided that Landlord agrees to waive the requirement for such
bond so long as the initially-named tenant is the Tenant under this Lease
and in possession of a portion of the Premises in which the work is being
performed.
(iv) Maintain in full force and effect, throughout the
duration of its performance under the contract with the Tenant, a Worker's
Compensation insurance policy and a Commercial General Liability insurance
policy issued by an insurer satisfactory to Landlord with liability
coverage of not less than $1,000,000.00 for personal injury and
$500,000.00 to cover property damage. The Commercial General Liability
insurance policy shall include assumption of contractual liability.
Certificates of insurance containing a thirty (30) day cancellation clause
shall be furnished to Landlord prior to commencement of performance under
the construction contract naming Landlord and its managing agent as
additional insureds.
(v) Provide Landlord with as-built drawings of all
improvements.
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(e) All approvals by Landlord, as provided for in this
Paragraph 7.5, shall not be unreasonably withheld, conditioned or delayed. All
requests to be submitted to Landlord shall be submitted through Landlord's
managing agent. If Landlord shall give its consent, the consent shall be deemed
conditioned upon the compliance by Tenant in a prompt and expeditious manner of
all conditions of all permits obtained pursuant to Paragraph 7.5(d), above.
(f) Tenant shall pay, when due, all claims for labor or
materials furnished or alleged to have been furnished to or for Tenant at or for
use in the Premises, which claims are or may be secured by any mechanics' or
materialmen's lien against the Premises or any interest therein. Tenant shall
give Landlord not less than thirty (30) days' notice prior to the commencement
of any work in the Premises costing in excess of $5,000, and Landlord shall have
the right to post notices of non-responsibility in or on the Premises as
provided by law. If Tenant shall, in good faith, contest the validity of any
such lien, claim or demand, then Tenant shall, at its sole expense defend itself
and Landlord against the same and shall pay and satisfy any such adverse
judgment that may be rendered thereon before the enforcement thereof against the
Landlord or the Premises, upon the condition that if Landlord shall require,
Tenant shall furnish to Landlord a surety bond satisfactory to Landlord in an
amount equal to such contested lien claim or demand indemnifying Landlord
against liability for the same and holding the Premises free from the effect of
such lien or claim. In addition, Landlord may require Tenant to pay Landlord's
attorneys fees and costs in participating in such action if Landlord shall
decide it is in its best interest to do so.
(g) Unless otherwise agreed in writing pursuant to Paragraph
7.5(a) or otherwise, Landlord may require that any or all Alterations or Utility
Installations be removed by the expiration or earlier termination of this Lease,
notwithstanding their installation may have been consented to by Landlord, and
that the Premises be restored to their prior condition. Should Tenant make any
alterations, improvements, additions or Utility Installations without the prior
approval of Landlord, Landlord may require that Tenant remove any or all of the
same.
(h) Unless Landlord requires their removal, as set forth in
Paragraph 7.5(g), all Alterations and Utility Installations (whether or not such
Utility Installations constitute trade fixtures of Tenant), which may be made on
the Premises, shall become the property of Landlord and remain upon and be
surrendered with the Premises at the expiration or earlier termination of the
term. Notwithstanding the provisions of this Paragraph 7.5(h), Tenant's
machinery and equipment, other than that which is affixed to the Premises so
that it cannot be removed without material damage to the Premises, shall remain
the property of Tenant and may be removed by Tenant subject to the provisions of
Paragraph 7.2.
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8. Insurance; Indemnity
8.1 Tenant hereby agrees to indemnify, defend and hold harmless
Landlord, its successors, assigns, subsidiaries, directors, officers, agents and
employees from and against any and all damage, loss, liability or expense
including, but not limited to, attorney's fees and legal costs suffered by same
directly or by reason of any claim, suit or judgment brought by or in favor of
any person or persons for damage, loss or expense due to, but not limited to,
bodily injury, including death resulting anytime therefrom, and property damage
sustained by such person or persons which arises out of, is occasioned by or in
any way attributable to the use or occupancy of the Premises or other areas in
the Industrial Center by Tenant, the acts or omission of Tenant, its agents,
employees or any other contractors or invitees brought onto said Premises by
Tenant, or any breach or default in the performance of any obligation on
Tenant's part to be performed under the terms of this Lease, except to the
extent finally determined by a court of competent jurisdiction to have been
caused by the gross negligence or wilful misconduct of Landlord, its employees,
and agents. If any action or proceeding is brought against Landlord by reason of
any such claim, Tenant, upon notice from Landlord, shall defend same at Tenant's
expense by counsel satisfactory to Landlord. Such loss or damage shall include,
but not be limited to, any injury or damage to Landlord's personnel (including
death resulting anytime therefrom) on the Premises. Tenant agrees that the
obligations assumed herein shall survive the termination of this Lease.
8.2 Tenant hereby agrees to maintain in full force and effect at all
times during the term of this Lease, at Tenant's own expense, for the protection
of Tenant, Landlord and Landlord's property manager, as their interest may
appear, policies of insurance issued by a responsible carrier or carriers which
afford the following coverages:
(a) Workers' Compensation with statutory limits.
(b) Employers' Liability insurance with the following minimum
limits:
Bodily injury by disease per person $1,000,000
Bodily injury by accident policy limit $1,000,000
Bodily injury by disease policy limit $1,000,000
(c) Property insurance on a special causes of loss insurance
form covering any and all personal property of Tenant including but not limited
to improvements, betterments, furniture, fixtures, Utility Installations, and
equipment in
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an amount not less than their full replacement cost, with a deductible not to
exceed $10,000. This policy should contain a waiver of subrogation.
(d) Commercial General Liability Insurance including Broad
Form Property Damage and Contractual Liability with the following minimum
limits:
General Aggregate $2,000,000
Products/Completed Operations Aggregate $2,000,000
Each Occurrence $1,000,000
Personal & Advertising Injury $1,000,000
Medical Payments $5,000 per
person
(e) Umbrella/Excess Liability on a following form basis with
the following minimum limits:
General Aggregate $10,000,000
Each Occurrence $10,000,000
The limits of said insurance in this Paragraph 8(b)(i) shall
not however, limit the liability of Tenant hereunder.
8.3 Landlord shall, at all times during the term of this Lease,
maintain the following insurance:
(a) A policy or policies of all-risk property insurance,
issued by and binding upon some solvent insurance company, insuring for the full
replacement cost of the building on the Premises. Landlord shall not be
obligated to insure, and shall not assume any liability or risk of loss for, any
of Tenant's furniture, equipment, machinery, goods, supplies, utility
installations, improvements, or alterations upon the Premises. This policy shall
contain an agreed amount endorsement and be written with no coinsurance.
Landlord may, but shall not be obligated to, obtain earthquake and flood
insurance.
(b) Rent insurance on an all-risk basis in an amount equal to
all that is called for under Paragraph 4 of this Lease (Base Rent and any
additional rents payable under this Lease including tax and insurance costs) for
a period of at least twelve (12) months commencing with the date of loss.
(c) Boiler and Machinery insurance in an amount satisfactory
to Landlord on a comprehensive coverage form.
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(d) Commercial general liability insurance in addition to, and
not in lieu of, the commercial general liability insurance required to be
maintained by Tenant in an amount not less than $1 million per occurrence and $3
million general aggregate. Tenant shall not be named as an additional insured
therein.
Landlord may elect to have reasonable deductibles in connection with the
insurance specified in Paragraph 8.3, and Tenant shall be liable for such
deductible amount in the event of a claim thereunder.
8.4 The Tenant shall deliver to Landlord prior to the time such
insurance is first required to be carried by Tenant, and thereafter at least
thirty (30) days prior to expiration of such policy, certificates of insurance
evidencing the above coverage with limits not less than those specified above.
Insurance required hereunder shall be in companies holding a "General
Policyholders Rating" of at least A-VIII as set forth in the most current issue
of "A.M. Best's Insurance Guide". Such Certificates with the exception of
Worker's Compensation, shall name Landlord, its subsidiaries, directors, agents
and employees, and its property manager as additional insureds and shall
expressly provide that the interest of same herein shall not be affected by a
breach by Tenant of any insurance policy provision for which such Certificates
evidence coverage. Further, all Certificates shall expressly provide that no
less than thirty (30) days prior written notice shall be given to Landlord in
the event of material alteration to or cancellation of the coverage evidenced by
such Certificates.
8.5 Upon demand not more often than once in any calendar year, Tenant
shall provide Landlord, at Tenant's expense, with such increased amount of
existing insurance and such other insurance coverage in such limits as Landlord
may require in its reasonable judgment to afford Landlord adequate protection
consistent with the practices of institutional owners of comparable properties.
8.6 If, on account of the failure of Tenant to comply with the
foregoing provisions, Landlord is adjudged a co-insurer by the insurance
carrier, then any loss or damage Landlord shall sustain by reason thereof shall
be borne by Tenant and shall be immediately paid by Tenant upon receipt of xxxx
thereof and evidence of such loss.
8.7 Landlord makes no representation that the limits of liability
specified to be carried by Tenant under the term of this Lease are adequate to
protect Tenant against Tenant's undertaking under this Paragraph 8 and in the
event Tenant believes that any such insurance coverage called for under this
Lease is insufficient, Tenant shall provide, at its own expense, such additional
insurance as Tenant deems adequate.
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8.8 Anything in this Lease to the contrary notwithstanding, Landlord
and Tenant hereby waive and release each other of and from any and all rights of
recovery, claims, action or cause of action, against each other, their agents,
officers and employees, for any loss or damage that may occur to the Premises,
improvements to the building of which the Premises are a part, personal property
(building contents) within the building on the Premises, any furniture,
equipment, machinery, goods or supplies not covered by this Lease which Tenant
may bring or obtain upon the Premises or any additional improvements which
Tenant may construct on the Premises, by reason of fire, the elements or any
other cause which could be insured against under the terms of all risk property
insurance policies, regardless of cause or origin, including negligence of
Landlord or Tenant and their agents, officers and employees. Because this
Paragraph will preclude the assignment of any claim mentioned in it by way of
subrogation (or otherwise) to an insurance company (or any other person) each
party to this Lease agrees immediately to give to each insurance company,
written notice of the terms of the mutual waivers contained in this Paragraph,
and to have the insurance policies properly endorses if necessary to prevent the
invalidation of the insurance coverages by reason of the mutual waivers
contained in this Paragraph.
8.9 Tenant shall pay to Landlord during the term hereof, additional
rent in the amount of any premiums for the insurance obtained under Paragraphs
8.3(a), 8.3(b), 8.3(c) and 8.3(d) and any other insurance which Landlord or
Landlord's lender deems necessary for the Premises and the amount of any
deductibles paid by Landlord under such policies. If Landlord elects to
self-insure or includes the Premises under blanket insurance policies covering
multiple properties, then Tenant's reimbursement obligation hereunder shall
include the portion of the reasonable cost of such self-insurance or blanket
insurance that is allocated to the Premises. Tenant shall pay any such premiums
to Landlord within thirty (30) days after receipt by Tenant of a copy of the
premiums statement or other evidence of the amount due. If the insurance
policies maintained hereunder cover other improvements in addition to the
Premises, Landlord shall also deliver to Tenant a reasonably detailed statement
of the amount of such premiums attributable to the Premises and showing in
reasonable detail the manner in which such amount was computed. If the term of
this Lease shall not expire concurrently with the expiration of the period
covered by such insurance, Tenant's liability for premiums shall be prorated on
an annual basis.
8.10 All insurance to be carried by Tenant shall be primary to and not
contributory with any similar insurance carried by Landlord, whose insurance
shall be considered excess insurance only.
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8.11 Tenant hereby agrees that Landlord shall not be liable for injury
to Tenant's business or any loss of income therefrom or for damage to the goods,
wares, merchandise or other property of Tenant, Tenant's employees, invitees,
customers, or any other person in or about the Premises, nor shall Landlord be
liable for injury to the person of Tenant, Tenant's employees, agents or
contractors, whether such damage or injury is caused by or results from fire,
steam, electricity, gas, water or rain, from the breakage, leakage, obstruction
or other defects of pipes, sprinklers, wires, appliances, plumbing, air
conditioning, or lighting fixtures, or from any other cause, whether said damage
or injury results from conditions arising upon the Premises, or from other
sources or places and regardless of whether the cause of such damage or injury
or the means of repairing the same is inaccessible to Tenant. Notwithstanding
Landlord's negligence or breach of this Lease, Landlord shall under no
circumstances be liable for injury to Tenant's business or for any loss of
income or profit therefrom.
9. Damage or Destruction.
9.1 Definitions.
(a) "Premises Partial Damage" shall herein mean damage or
destruction to the Premises to the extent that the cost of repair is less than
50% of the then replacement cost of the Premises. "Premises Building Partial
Damage" shall herein mean damage or destruction to the building of which the
Premises are a part to the extent that the cost of repair is less than 50% of
the then replacement cost of such building as a whole.
(b) "Premises Total Destruction" shall herein mean damage or
destruction to the Premises to the extent that the cost of repair is 50% or more
of the then replacement cost of the Premises. "Premises Building Total
Destruction" shall herein mean damage or destruction to the building of which
the Premises are a part to the extent that the cost of repair is 50% or more of
the then replacement cost of such building as a whole.
(c) "Insured Loss" shall herein mean damage or destruction
which was caused by an event required to be covered by the insurance described
in Paragraph 8.
9.2 Partial Damage -- Insured Loss. Subject to the provisions of
Paragraphs 9.4, 9.5 and 9.6, if at any time during the term of this Lease there
is damage which is an Insured Loss and which falls into the classification of
Premises Partial Damage or Premises Building Partial Damage, then Landlord
shall, at Landlord's expense, repair such damage, but not Tenant's fixtures,
equipment or tenant
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improvements unless the same have become a part of the Premises pursuant to
Paragraph 7.5 hereof as soon as reasonably possible and this Lease shall
continue in full force and effect. Notwithstanding the above, if the insurance
proceeds received by Landlord are not sufficient to effect such repair, Landlord
shall give notice to Tenant of the amount required in addition to the insurance
proceeds to effect such repair. Tenant shall contribute the required amount to
Landlord within ten days after Tenant has received notice from Landlord of the
shortage in the insurance. When Tenant shall contribute such amount to Landlord,
Landlord shall make such repairs as soon as reasonably possible and this Lease
shall continue in full force and effect. Tenant shall in no event have any right
to reimbursement for any such amounts so contributed.
9.3 Partial Damage -- Uninsured Loss. Subject to the provisions of
Paragraphs 9.4, 9.5 and 9.6, if at any time during the term of this Lease there
is damage which is not an Insured Loss and which falls within the classification
of Premises Partial Damage or Premises Building Partial Damage, unless caused by
a negligent or willful act of Tenant or its agents, contractors or invitees (in
which event Tenant shall make the repairs at Tenant's expense), Landlord may at
Landlord's option either (i) repair such damage as soon as reasonably possible
at Landlord's expense, in which event this Lease shall continue in full force
and effect, or (ii) give written notice to Tenant within thirty (30) days after
the date of the occurrence of such damage of Landlord's intention to cancel and
terminate this Lease, as of the date of the occurrence of such damage. In the
event Landlord elects to give such notice of Landlord's intention to cancel and
terminate this Lease, Tenant shall have the right within ten (10) days after the
receipt of such notice to give written notice to Landlord of Tenant's intention
to repair such damage at Tenant's expense, without reimbursement from Landlord,
in which event this Lease shall continue in full force and effect, and Tenant
shall proceed to make such repairs as soon as reasonably possible. If Tenant
does not give such notice within such 10-day period this Lease shall be canceled
and terminated as of the date of the occurrence of such damage.
9.4 Total Destruction. If at any time during the term of this Lease
there is damage, whether or not an Insured Loss, (including destruction required
by any authorized public authority), which falls into the classification of
Premises Total Destruction or Premises Building Total Destruction, then Landlord
may at Landlord's option either (i) repair such damage or destruction, but not
Tenant's fixtures, equipment, tenant improvements or Utility Installations, as
soon as reasonably possible at Landlord's expense, and this Lease shall continue
in full force and effect, or (ii) give written notice to Tenant within thirty
(30) days after the date of occurrence of such damage of Landlord's intention to
cancel and terminate this Lease, in which case this Lease shall be canceled and
terminated as of the date of the occurrence of such damage.
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9.5 Damage Near End of Term.
(a) If at any time during the last six months of the term of
this Lease there is damage, whether or not an Insured Loss, which falls within
the classification of the Premises Partial Damage, Landlord may at Landlord's
option cancel and terminate this Lease as of the date of occurrence of such
damage by giving written notice to Tenant of Landlord's election to do so within
30 days after the date of occurrence of such damage.
(b) Notwithstanding Paragraph 9.5(a) in the event that Tenant
has an option to extend or renew this Lease, and the time within which said
option may be exercised has not yet expired, Tenant shall exercise such option,
if it is to be exercised at all, no later than 20 days after the occurrence of
an Insured Loss falling within the classification of Premises Partial Damage
during the last six months of the term of this Lease. If Tenant duly exercises
such option during said 20 day period, Landlord shall, at Landlord's expense,
repair such damage, but not Tenant's fixtures, equipment or tenant improvements,
as soon as reasonably possible and this Lease shall continue in full force and
effect, provided Tenant first deposits with Landlord any shortfall in necessary
funds. If Tenant fails to exercise such option during said 20 day period, then
Landlord may at Landlord's option terminate and cancel this Lease as of the
expiration of said 20 day period by giving written notice to Tenant of
Landlord's election to do so within 10 days after the expiration of said 20 day
period, notwithstanding any term or provision in the grant of option to the
contrary.
9.6 Abatement of Rent; Tenant's Remedies.
(a) In the event of damage described in Paragraphs 9.2, 9.3 or
9.5 and Landlord or Tenant repairs or restores the Premises pursuant to the
provisions of Paragraph 9, the rent payable hereunder for the period during
which such damage, repair or restoration continues shall be abated in proportion
to the degree to which Tenant's use of the Premises is impaired to the extent
Landlord receives proceeds from rent abatement insurance. Except for abatement
of rent, if any, Tenant shall have no claim against Landlord for any damage
suffered by reason of any such damage, destruction, repair or restoration.
(b) If Landlord shall be obligated to repair or restore the
Premises under the provisions of Paragraph 9 and shall not commence such repair
or restoration within 90 days after such obligations shall accrue, Tenant may at
Tenant's option cancel and terminate this Lease by giving Landlord written
notice of Tenant's election to do so at any time prior to the commencement of
such repair or restoration. In such
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event this Lease shall terminate as of the date of such notice. In the event
that Landlord shall be obligated to repair or restore the Premises pursuant to
Paragraph 9 of this Lease and shall not commence such repair or restoration
within ninety (90) days after such obligation shall accrue, the right of
Tenant to terminate this Lease pursuant to this Paragraph 9.6 (b) shall be the
sole right and remedy of Tenant against Landlord, and Landlord shall have no
other liability to Tenant, for damages, specific performance or otherwise, in
connection with any such failure.
9.7 Termination -- Advance Payments. Upon termination of this Lease
pursuant to Paragraph 9, an equitable adjustment shall be made concerning
advance rent and any advance payments made by Tenant to Landlord. Landlord
shall, in addition, return to Tenant so much of Tenant's security deposit as has
not theretofore been applied by Landlord.
9.8 Waiver. Landlord and Tenant waive the provisions of any statutes
which relate to termination of leases when leased property is destroyed and
agree that such event shall be governed by the terms of this Lease.
10. Real Property Taxes.
10.1 Definition of "Real Property Tax". As used herein, the term "real
property tax" shall include any form of real estate tax or assessment, general,
special, ordinary or extraordinary, and any license fee, commercial rental tax,
improvement bond or bonds, levy or tax imposed on the Premises by any authority
having the direct or indirect power to tax, including any city, state or federal
government, or any school, agricultural, sanitary, fire, street, drainage or
other improvement district thereof, as against any legal or equitable interest
of Landlord in the Premises or in the real property of which the Premises are a
part, as against Landlord's right to rent or other income therefrom, and as
against Landlord's business of leasing the Premises. The term "real property
tax" shall also include any tax, fee, levy, assessment or charge (a) in
substitution of, partially or totally, any tax, fee, levy, assessment or charge
hereinabove included within the definition of "real property tax," or (b) the
nature of which was hereinbefore included within the definition of "real
property tax," or (c) which is imposed for a service or right not charged prior
to June 1,1978, or, if previously charged, has been increased since June 1,1978,
or (d) which is imposed as a result of a transfer, either partial or total, of
Landlord's interest in the Premises or which is added to a tax or charge
hereinbefore included within the definition of real property tax by reason of
such transfer, or (e) which is imposed by reason of this transaction, any
modifications or changes hereto, or any transfers hereof. The term "real
property tax" shall also include fees payable to tax consultants and attorneys
for consultation and contesting real property taxes. Notwithstanding the
foregoing, the
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term "real property tax" shall exclude inheritance taxes, personal income taxes,
estate taxes, gift, excise, franchise, capital levy, state payroll, stamp or
profit taxes, however designated. If any real property tax to be paid by Tenant
shall cover any period of time prior to the Commencement Date, such real
property taxes shall be equitably prorated to cover only the period of time
within the applicable tax fiscal year this Lease is in effect.
10.2 Payment of Taxes.
(a) Tenant shall pay the real property tax applicable to the
Premises during the term of this Lease. Subject to Paragraph 10.2(b), all such
payments shall be made at least ten (10) days prior to any delinquency date.
Tenant shall promptly furnish Landlord with satisfactory evidence that such
taxes have been paid. If any such taxes shall cover any period of time prior to
or after the expiration or termination of this Lease, Tenant's share of such
taxes shall be prorated to cover only that portion of the tax xxxx applicable to
the period that this Lease is in effect, and Landlord shall reimburse Tenant for
any overpayment. If Tenant shall fail to pay any required real property tax,
Landlord shall have the right to pay the same and Tenant shall reimburse
Landlord therefor upon demand.
(b) Advance Payment. In the event Tenant incurs a late charge
on a Rent payment more than two times during the term of this Lease, Landlord
may, at Landlord's option, estimate the current real property taxes, and require
that such taxes be paid in advance to Landlord by Tenant, either (i) in a lump
sum amount equal to the installment due, at least twenty (20) days prior to the
applicable delinquency date, or (ii) monthly in advance with the payment of Base
Rent. If Landlord elects to require payment monthly in advance, the monthly
payment shall be an amount equal to the amount of the estimated installment of
taxes divided by the number of months remaining before the month in which such
installment becomes delinquent. When the actual amount of the applicable tax
xxxx is known, the amount of such equal monthly advance payments shall be
adjusted as required to provide the funds needs to pay the applicable taxes. If
the amount collected by Landlord is insufficient to pay such real property taxes
when due, Tenant shall pay Landlord, upon demand such additional sums as are
necessary to pay such obligations. All monies paid to Landlord under this
paragraph may be intermingled with other monies of Landlord and shall not bear
interest. In the event of an Event of Default by Tenant in the performance of
its obligations under this Lease, any balance of funds paid to Landlord under
the provisions of this paragraph may, at the option of Landlord, be treated as
an additional Security Deposit.
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10.3 Personal Property Taxes.
(a) Tenant shall pay prior to delinquency all taxes assessed
against and levied upon trade fixtures, furnishings, equipment and all other
personal property of Tenant contained in the Premises or elsewhere. When
possible, Tenant shall cause said trade fixtures, furnishings, equipment and all
other personal property to be assessed and billed separately from the real
property of Landlord.
(b) If any of Tenant's said personal property shall be
assessed with Landlord's real property, Tenant shall pay such taxes as part of
real property tax.
10.4 Additional Provisions Regarding Real Property Taxes. Landlord
shall have the sole right to contest or appeal any real property taxes or
assessments applicable to all or any portion of the Premises and to seek a
reduction in the assessed valuation of all or any portion of the Premises
(collectively, "Tax Contests"). Any refund of real property taxes resulting from
any such Tax Contest shall be applied first to reimburse Landlord for its costs
and expenses in connection with the Tax Contest (including, without limitation
attorneys' fees and the costs of consultants) and then, out of and to the extent
of the balance of such refund, Landlord shall reimburse to Tenant the portion of
such reduction attributable to the Premises and the term of this Lease, as and
to the extent previously paid by Tenant as part of Tenant's Share of Operating
Expenses. Fees payable to tax consultants and attorneys for consultation and
contesting real property taxes shall be an Operating Expense. In the event that
Landlord has not undertaken a Tax Contest with respect to the property taxes or
assessments for a tax fiscal year, Tenant may request that Landlord undertake
such a Tax Contest. In the event that Landlord does not commence such Tax
Contest within 90 days after receipt of Tenant's request or does not otherwise
agree to proceed with that Tax Protest, then Tenant may undertake a Tax Contest;
provided that no such Tax Contest by Tenant shall be made if the contested tax
or assessment may become a lien on the Building unless the contested amount is
paid prior to the Tax Contest by Tenant. Tenant shall indemnify and hold
Landlord harmless with respect to any increases in real property taxes or
assessments arising out of Tenant's conduct of a Tax Contest above the level
those real estate taxes or assessments would have been in the absence of such a
Tax Contest.
11. Utilities. Tenant shall pay for all water, gas, heat, light, power,
telephone and other utilities and services supplied to the Premises, together
with any taxes thereon. Landlord represents that the following utilities are
available stubbed up to the boundary of the Premises: natural gas, electrical,
water, and sewer.
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12. Assignment and Subletting.
12.1 Landlord's Consent Required. Tenant shall not voluntarily or by
operation of law assign, transfer, mortgage, sublet, or otherwise transfer or
encumber all or any part of Tenant's interest in this Lease or in the Premises,
without Landlord's prior written consent, which Landlord shall not unreasonably
withhold, condition or delay. Landlord shall respond to Tenant's request for
consent hereunder in a timely manner and any attempted assignment, transfer,
mortgage, encumbrance or subletting without such consent shall be void, and
shall constitute a noncurable breach of this Lease, without the need for notice
to Tenant under Paragraph 13.1.
12.2 Procedure. If at any time or from time to time during the term of
this Lease, Tenant desires to assign or sublet all or any part of Tenant's
interest in this Lease or in the Premises to an entity other than a Tenant
Affiliate (as defined below), Tenant shall give prior written notice to Landlord
setting forth the terms of the proposed assignment or subletting and the space
so proposed to be assigned or sublet. Such assignment or sublease shall be
subject to, without limitation, all the conditions in Paragraph 12 and the
following conditions:
(a) The assignment or sublease shall be substantially on the
terms set forth in the notice given to Landlord. Any subsequent changes or
modifications will require Landlord's prior written consent.
(b) Tenant acknowledges that Landlord's agreement to lease
these Premises to Tenant at the rent and terms stated herein is made in material
reliance upon Landlord's evaluation of this particular Tenant's background,
experience and ability, as well as the nature of the use of the Premises by this
Tenant as set forth in Paragraph 6. In the event that Tenant shall request
Landlord's written consent to assign or sublease the Premises as required in
Paragraphs 12.1 and 12.2 hereof, then each such request for consent shall be
accompanied by the following:
(i) Financial statements of the proposed assignee or
sublessee, or if financial statements are not available, other
information concerning the financial condition of the proposed assignee
or sublessee that reasonably discloses and represents that financial
condition;
(ii) A statement of the specific uses for which the
Premises will be utilized by the proposed assignee or sublessee; and
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(iii) Preliminary plans prepared by an architect or
civil engineer for all alterations to the Premises that are
contemplated to be made by Tenant, the proposed assignee or sublessee.
(c) No assignment or sublease shall be valid and no assignee
or sublessee shall take possession of the Premises assigned or subleased until
an executed counterpart of such assignment or sublease has been delivered to
Landlord.
(d) No sublessee or assignee shall have a right further to
sublet or assign without Landlord's prior written consent as provided in this
Paragraph 12.
(e) In the case of an assignment, 50% of any sums or other
economic consideration received by Tenant as a result of such assignment shall
be paid to Landlord after first deducting the unamortized cost of leasehold
improvements paid for by Tenant in connection with such assignment and the cost
of any real estate commissions incurred by Tenant in connection with such
assignment.
(f) In the case of a subletting, 50% of any sums or economic
consideration received by Tenant as a result of such subletting shall be paid to
Landlord after first deducting (i) the rent due hereunder prorated to reflect
only rent allocable to the sublet portion of the Premises, (ii) the cost of
tenant improvements made to the sublet portion of the Premises at Tenant's cost
in connection with such sublease, which shall be amortized over the term of the
applicable sublease and (iii) the cost of any real estate commissions incurred
by Tenant in connection with such subletting, amortized over the term of the
sublease.
12.3 Tenants Other Than Individuals. [The provisions of this paragraph
12.3 shall not apply so long as the original named Tenant is the Tenant under
this Lease.]
(a) If Tenant is a partnership, a transfer of any interest of
a general partner, a withdrawal of any general partner from the partnership, or
the dissolution of the partnership, shall be deemed to be an assignment of this
Lease.
(b) If Tenant is a corporation, unless Tenant is a public
corporation whose stock is regularly traded on a national stock exchange, or is
regularly traded in the over-the-counter market and quoted on NASDAQ, any sale
or other transfer of a percentage of capital stock of Tenant which results in a
change of controlling persons, or the sale or other transfer of substantially
all of the assets of Tenant, shall be deemed to be an assignment of this Lease.
(c) Notwithstanding anything to the contrary contained in this
Lease, the initial listing for sale of Tenant's stock on a public exchange or
the sale of any
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number of shares of Tenant's stock on a public exchange, shall not be deemed to
be an assignment or other transfer requiring Landlord's consent under this Lease
12.4 Tenant Affiliate. Notwithstanding the provisions of Paragraph 12.1
hereof, Tenant may assign or sublet the Premises, or any portion thereof,
without Landlord's consent, to any corporation which controls, is controlled by
or is under common control with Tenant, or to any corporation resulting from the
merger or consolidation with Tenant, or to any person or entity which acquires
all the assets of Tenant as a going concern of the business that is being
conducted on the Premises (any of the foregoing, a "Tenant Affiliate"), provided
that (a) the transferee has a net worth, after the assignment or sublet, which
is equal to or greater than the net worth of Tenant at the date of this Lease;
(b) the transferee assumes, in full, the obligations of Tenant under this Lease;
and (c) a copy of the document effecting the sublet and evidencing the
transferee's assumption of Tenant's obligations hereunder is promptly delivered
to Landlord. Any such assignment shall not, in any way, affect or limit the
liability of Tenant under the terms of this Lease even if after such assignment
or subletting the terms of this Lease are materially changed or altered without
the consent of Tenant, the consent of whom shall not be necessary.
12.5 No Release of Tenant. Regardless of Landlord's consent, any
subletting or assignment shall not (a) be effective without the express written
assumption by such assignee or sublessee of the obligations of Tenant under this
Lease, (b) release Tenant of any of Tenant's obligations hereunder or (c) alter
the primary liability of Tenant to pay the rent and to perform all other
obligations to be performed by Tenant hereunder. The acceptance of rent by
Landlord from any other person shall not be deemed to be a waiver by Landlord of
any provision hereof or any default by Tenant. Consent to one assignment or
subletting shall not be deemed consent to any subsequent assignment or
subletting. In the event of default by any assignee of Tenant or any successor
of Tenant, in the performance of any of the terms hereof, Landlord may proceed
directly against Tenant without the necessity of exhausting remedies against
said assignee. Landlord may consent to subsequent assignments or subletting of
this Lease or amendments or modifications to this Lease with assignees of
Tenant, without notifying Tenant, or any successor of Tenant, and without
obtaining its or their consent thereto and such action shall not relieve Tenant
of liability under this Lease; provided that Tenant shall not be liable for any
increase in the obligations under this Lease resulting from such an amendment or
modification of this Lease to which Tenant has not consented.
12.6 Terms and Conditions Applicable to Subletting. Regardless of
Landlord's consent, the following terms and conditions shall apply to any
subletting by tenant of all or any part of the Premises and shall be included in
subleases:
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(a) Tenant hereby assigns and transfers to Landlord all of
Tenant's interest in all rentals and income arising from any sublease heretofore
or hereafter made by Tenant, and Landlord may collect such rent and income and
apply same toward Tenant's obligations under this Lease; provided, however, that
until a default shall occur in the performance of Tenant's obligations under
this Lease, Tenant may, subject to paragraphs 12.2 (e) and (f) receive, collect
and enjoy the rents accruing under such sublease. Landlord shall not, by reason
of this or any other assignment of such sublease to Landlord nor by reason of
the collection of the rents from a sublessee, be deemed liable to the sublessee
for any failure of Tenant to perform and comply with any of Tenant's obligations
to such sublessee under such sublease. Tenant hereby irrevocably authorizes and
directs any such sublessee, upon receipt of a written notice from Landlord
stating that a default exists in the performance of Tenant's obligations under
this Lease, to pay to Landlord the rents due and to become due under the
sublease, Tenant agrees that such sublessee shall have the right to rely upon
any such statement and request from Landlord, and that such sublessee shall pay
such rents to Landlord without any obligation or right to inquire as to whether
such default exists and notwithstanding any notice from or claim from Tenant to
the contrary. Tenant shall have no right or claim against such sublessee or
Landlord for any such rents so paid by said sublessee to Landlord.
(b) No sublease entered into by Tenant to any entity other
than a Tenant Affiliate shall be effective unless and until it has been approved
in writing by Landlord. In entering into any sublease, Tenant shall use only
such form of sublease as is satisfactory to Landlord, and once approved by
Landlord, such sublease shall not be changed or modified without Landlord's
prior written consent, which shall not be unreasonably withheld, conditioned or
delayed. Any sublessee shall, by reason of entering into a sublease under this
Lease, be deemed, for the benefit of Landlord, to have assumed and agreed to
conform and comply with each and every obligation herein to be performed by
Tenant other than such obligations as are contrary to or inconsistent with
provisions contained in a sublease to which Landlord has expressly consented in
writing.
(c) The consent by Landlord to any subletting shall not
release Tenant from its obligations or alter the primary liability of Tenant to
pay the rent and perform and comply with all of the obligations of Tenant to be
performed under this Lease.
(d) The consent by Landlord to any subletting shall not
constitute a consent to any subsequent subletting by Tenant or to any assignment
or subletting by the sublessee. However, Landlord may consent to subsequent
sublettings and
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assignments of the sublease or any amendments or modifications thereto without
notifying Tenant or anyone else liable on the Lease or sublease and without
obtaining their consent and such action shall not relieve such persons from
liability.
(e) After the occurrence of an Event of Default, Landlord may
proceed directly against Tenant, any guarantors or any one else responsible for
the performance of this Lease, including the sublessee, without first exhausting
Landlord's remedies against any other person or entity responsible therefor to
Landlord, or any security held by Landlord or Tenant.
(f) In the event Tenant shall default in the performance of
its obligations under this Lease, Landlord, at its option and without any
obligation to do so, may require any sublessee to attorn to Landlord, in which
event Landlord shall undertake the obligations of Tenant under such sublease
from the time of the exercise of said option to the termination of such
sublease; provided, however, Landlord shall not be liable for any prepaid rents
or security deposit paid by such sublessee to Tenant or for any other prior
defaults of Tenant under such sublease.
(g) No sublessee shall further assign or sublet all or any
part of the Premises without Landlord's prior written consent.
(h) Landlord's written consent to any subletting of the
Premises by Tenant shall not constitute an acknowledgment that no default then
exists under this Lease of the obligations to be performed by Tenant nor shall
such consent be deemed a waiver of any then existing default, except as may be
otherwise stated by Landlord at the time.
12.7 Attorney's Fees. In the event Tenant shall assign or sublet the
Premises or request the consent of Landlord to any assignment or subletting or
if Tenant shall request the consent of Landlord for any act Tenant proposes to
do, then Tenant shall pay Landlord's reasonable attorneys' fees incurred in
connection therewith, such attorneys' fees not to exceed $350.00 for each such
request. Notwithstanding the foregoing, the parties agree that a payment of
$750.00 is a reasonable fee for Landlord's review of Tenant's request to assign
or sublease.
13. Defaults; Remedies.
13.1 Defaults. The occurrence of any one or more of the following
events shall constitute a material default and breach of this Lease (each, an
"Event of Default") by Tenant:
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(a) [INTENTIONALLY OMITTED]
(b) The failure by Tenant to make any payment of rent or any
other payment required to be made by Tenant hereunder, as and when due, where
such failure shall continue for a period of five (5) days after written notice
thereof from Landlord to Tenant. In the event that Landlord serves Tenant with a
Notice to Pay Rent or Quit pursuant to applicable Unlawful Detainer statutes,
such Notice to Pay Rent or Quit shall also constitute the notice required by
this subparagraph.
(c) The failure by Tenant to observe or perform any of the
covenants, conditions or provisions of this Lease to be observed or performed by
Tenant, other than described in paragraph (b) above, where such failure shall
continue for a period of 30 days after written notice thereof from Landlord to
Tenant; provided, however, that if the nature of Tenant's default is such that
more than 30 days are reasonably required for its cure, then Tenant shall not be
deemed to be in default if Tenant commenced such cure within said 30-day period
and thereafter diligently prosecutes such cure to completion. To the extent
permitted by law, said thirty (30) day nonce shall constitute the sole and
exclusive notice required to be given to Tenant under applicable unlawful
detainer statutes.
(d) (i) The making by Tenant of any general arrangement or
assignment for the benefit of creditors; (ii) Tenant becomes a "debtor" as
defined in 11 U.S. C. Section 101 or any successor statute thereto (unless, in
the case of a petition filed against Tenant, the same is dismissed within 60
days); (iii) the appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where possession is not restored to Tenant within 30
days; or (iv) the attachment, execution or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such seizure is not discharged within 30 days.
Provided, however, in the event that any provision of this Paragraph 13.1(d) is
contrary to any applicable law, such provision shall be of no force or effect.
(e) The discovery by Landlord that any financial statement
given to Landlord by Tenant, any assignee of Tenant, any sublessee of Tenant,
any successor in interest of Tenant or any guarantor of Tenant's obligations
hereunder, and any of them, was materially false.
13.2 Remedies. If Tenant fails to perform any affirmative duty or
obligation of Tenant under this Lease, within thirty (30) days after written
notice to Tenant (or in case of an emergency, without notice), Landlord may at
its option (but without obligation to do so), perform such duty or obligation on
Tenant's behalf including but
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not limited to the obtaining of reasonably required bonds, insurance policies,
or governmental licenses, permits or approvals. The costs and expenses of any
such performance by Landlord shall be due and payable by Tenant to Landlord
upon invoice therefor. Upon the occurrence of an Event of Default, with or
without further notice or demand, and without limiting Landlord in the exercise
of any right or remedy which Landlord may have by reason of such breach,
Landlord may:
(a) Terminate Tenant's right to possession of the Premises by
any lawful means, in which case this Lease and the term hereof shall terminate
and Tenant shall immediately surrender possession of the Premises to Landlord.
In such event Landlord shall be entitled to recover from Tenant: (i) the worth
at the time of the award of the unpaid rent which had been earned at the time of
termination; (ii) the worth at the time of award of the amount by which the
unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that the Tenant proves could have
been reasonably avoided; (iii) the worth at the time of award of the amount by
which the unpaid rent for the balance of the term after the time of award
exceeds the amount of such rental loss that the Tenant proves could be
reasonably avoided; and (iv) any other amount necessary to compensate Landlord
for all the detriment proximately caused by the Tenant's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom, including but not limited to the cost of recovering
possession of the Premises, expenses of reletting, including necessary
renovation and alteration of the Premises, reasonable attorneys' fees, and that
portion of the leasing commission paid by Landlord applicable to the unexpired
term of this Lease. The worth at the time of award of the amount referred to in
provisions (i) and (ii) of the prior sentence shall be calculated based on an
interest rate equal to the highest rate permitted by applicable law. The worth
at the time of award of the amount referred to in provision (iii) of the prior
sentence shall be computed by discounting such amount at the discount rate of
the Federal Reserve Bank of San Francisco at the time of award plus one percent.
Efforts by Landlord to mitigate damages caused by Tenant's breach of this Lease
shall not waive Landlord's right to recover damages under this Paragraph. If
termination of this Lease is obtained through the provisional remedy of unlawful
detainer, Landlord shall have the right to recover in such proceeding the unpaid
rent and damages as are recoverable therein, or Landlord may reserve therein the
right to recover all or any part thereof in a separate suit for such rent and/or
damages. If a notice and grace period required under Paragraphs 13.1(b), (c) or
(d) was not previously given, a notice to pay rent or quit, or to perform or
quit, as the case may be, given to Tenant under any statute authorizing the
forfeiture of leases for unlawful detainer shall also constitute the applicable
notice for grace period purposes required by subparagraphs 13.1(b), (c) or (d).
In such case, the applicable grace period under Paragraphs 13.1(b), (c) or (d)
and under the unlawful detainer statute shall run concurrently after the one
such
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statutory notice, and the failure of Tenant to cure the default within the
greater of the two such grace periods shall constitute both an unlawful detainer
and breach of this Lease entitling Landlord to the remedies provided for in this
Lease and/or by said statute.
(b) Continue the Lease and Tenant's right to possession in
effect (in California under California Civil Code Section 1951.4) after Tenant's
breach and abandonment and recover the rent as it becomes due, provided Tenant
has the right to sublet or assign, subject only to reasonable limitations. See
Paragraphs 12 and 36 for the limitations on assignment and subletting which
limitations Tenant and Landlord agree are reasonable. Acts of maintenance or
preservation, efforts to relet the Premises, or the appointment of a receiver to
protect the Landlord's interest under the Lease, shall not constitute a
termination of the Tenant's right to possession.
(c) Pursue any other remedy now or hereafter available to
Landlord under the laws or judicial decisions of the State of California. Unpaid
installments of rent and other unpaid monetary obligations of Tenant under the
terms of this Lease shall bear interest from the date due at the Interest Rate.
(d) The expiration or termination of this Lease and/or the
termination of Tenant's right to possession shall not relieve Tenant from
liability under any indemnity provisions of this Lease as to matters occurring
or accruing prior to such expiration or termination or by reason of Tenant's
occupancy of the Premises.
13.3 Default by Landlord. Landlord shall not be in default unless
Landlord fails to perform obligations required of Landlord within a reasonable
time, but in no event later than thirty (30) days after written notice by Tenant
to Landlord and to the holder of any first mortgage or deed of trust encumbering
the Premises whose name and address shall have theretofore been furnished to
Tenant in writing, specifying wherein Landlord has failed to perform such
obligation; provided, however, that if the nature of Landlord's obligation is
such that more than thirty (30) days are required for performance then Landlord
shall not be in default if Landlord commences performance within such 30-day
period and thereafter diligently prosecutes the same to completion. Any damages
or judgments arising out of Landlord's default of its obligations under this
Lease shall be satisfied only out of Landlord's interest and estate in the
Premises, and Landlord shall have no personal liability beyond such interest and
estate with respect to such damages or judgments.
13.4 Late Charges. Tenant hereby acknowledges that late payment by
Tenant to Landlord of rent and other sums due hereunder will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of which will be
extremely difficult
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to ascertain. Such costs include, but are not limited to, processing and
accounting charges, and late charges which may be imposed on Landlord by the
terms of any mortgage or trust deed encumbering the Premises. Accordingly, if
any installment of rent or any other sum due from Tenant shall not be received
by Landlord or Landlord's designee within ten (10) days after such amount shall
be due, then, without any requirement for notice to Tenant, Tenant shall pay to
Landlord a late charge equal to 5% of such overdue amount. The parties hereby
agree that such late charge represents a fair and reasonable estimate of the
costs Landlord will incur by reason of late payment by Tenant. Acceptance of
such late charge by Landlord shall in no event constitute a waiver of Tenant's
default with respect to such overdue amount, not prevent Landlord from
exercising any of the other rights and remedies granted hereunder.
Notwithstanding the foregoing provisions of Paragraph 13.4, the 5% late charge
described in this Paragraph 13.4 shall not be imposed with respect to the first
or second late payment in any calendar year unless the applicable payment due
from Tenant is not received by Landlord or Landlord's designee within ten (10)
days following written notice from Landlord that such payment was not received
when due. Following the second such written notice from Landlord in any calendar
year (and regardless of whether such payment is then received within such 10-day
period), a late charge will be imposed without notice for any subsequent payment
due from Tenant during such calendar year which is not received within ten (10)
days of its due date.
14. Condemnation. If the Premises or any portion thereof are taken under the
power of eminent domain, or sold under the threat of the exercise of said power
(all of which are herein called "condemnation"), this Lease shall terminate as
to the part so taken as of the date the condemning authority takes title or
possession, whichever first occurs. If more than 10% of the floor area of the
building on the Premises, or more than 25% of the land area of the Premises
which is not occupied by any building, is taken by condemnation, Tenant may, at
Tenant's option, to be exercised in writing only within ten (10) days after
Landlord shall have given Tenant written notice of such taking (or in the
absence of such notice, within ten (10) days after the condemning authority
shall have taken possession) terminate this Lease as of the date the condemning
authority takes such possession. If Tenant does not terminate this Lease in
accordance with the foregoing, this Lease shall remain in full force and effect
as to the portion of the Premises remaining, except that the rent shall be
reduced in the proportion that the floor area of the building taken bears to the
total floor area of the building situated on the Premises. No reduction of rent
shall occur if the only area taken is that which does not have a building
located thereon. Any award for the taking of all or any part of the Premises
under the power of eminent domain or any payment made under threat of the
exercise of such power shall be the property of Landlord, whether such award
shall be made as compensation for diminution in value of the leasehold or for
the taking of the fee, or as severance damages; provided, however, that
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Tenant shall be entitled to any award for loss of or damage to Tenant's trade
fixtures and removable personal property. In the event that this Lease is not
terminated by reason of such condemnation, Landlord shall to the extent of net
severance damages received by Landlord in connection with such condemnation,
over and above the legal and other expenses incurred by Landlord in the
condemnation matter, repair any damage to the Premises caused by such
condemnation except to the extent that Tenant has been reimbursed therefor by
the condemning authority. Tenant shall pay any amount in excess of such net
severance damages required to complete such repair.
15. Broker's Commissions. Tenant and Landlord each represent and
warrant to the other that neither has had any dealings with any person, firm,
broker or finder (other than those persons, if any, whose names are set forth in
this Paragraph 15) in connection with the negotiation of this Lease and/or the
consummation of the transaction contemplated hereby, and no other broker or
other person, firm or entity is entitled to any commission or finder's fee in
connection with said transaction and Tenant and Landlord do each hereby
indemnify and hold the other harmless from and against any costs, expenses,
attorneys' fees or liability for compensation, commission or charges which may
be claimed by any such unnamed broker, finder or other similar party by reason
of any dealings or actions of the indemnifying party. Named brokers:
Landlord's Broker: CB Xxxxxxx Xxxxx, Inc.
Tenant's Broker: CB Xxxxxxx Xxxxx, Inc.
Tenant's Consultant: CRESA Partners
The commission payable to Landlord's Broker with respect to this Lease shall be
pursuant to the terms of the separate commission agreement in effect between
Landlord and Landlord's Broker. Landlord's Broker shall pay a portion of its
commission to Tenant's Broker and Tenant's Consultant, pursuant to a separate
agreement between Landlord's Broker and Tenant's Broker and Tenant's Consultant.
Nothing in this Lease shall impose any obligation on Landlord to pay a
commission or fee (a) to any party other than Landlord's Broker or (b) to any
party with respect to (i) the exercise by Tenant of any option or right of first
refusal pursuant to this Lease, or (ii) any extension or renewal of this Lease.
16. Estoppel Certificate.
(a) Tenant shall at any time upon not less than ten (10) days'
prior written notice from Landlord execute, acknowledge and deliver to Landlord
a statement in writing (i) certifying that this Lease is unmodified and in full
force and
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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 date to
which the rent and other charges are paid in advance, if any, and (ii)
acknowledging that there are not, to Tenant's knowledge, any uncured defaults on
the part of Landlord hereunder, or specifying such defaults if any are claimed.
Any such statement may be conclusively relied upon by any prospective purchaser
or encumbrancer of the Premises.
(b) At Landlord's option, Tenant's failure to deliver such
statement within such time shall be conclusive upon Tenant (i) that this Lease
is in full force and effect, without modification except as may be represented
by Landlord, (ii) that there are no uncured defaults in Landlord's performance,
and (iii) that not more than one month's rent has been paid in advance or such
failure may be considered by Landlord as a default by Tenant under this Lease.
Anything to the contrary notwithstanding in this Paragraph 16(b), Tenant's
failure to deliver an estoppel certificate will not be deemed a default or
breach by Tenant of the Lease unless Tenant's failure continues uncured for five
days after an additional written notice to Tenant of such default.
(c) If Landlord desires to finance, refinance, or sell the
Premises, or any part thereof, Tenant hereby agrees to deliver to any lender or
purchaser designated by Landlord such financial statements of Tenant as may be
reasonably required by such lender or purchaser. Such statements shall include
the past three years' financial statements of Tenant. All such financial
statements shall be received by Landlord and such lender or purchaser in
confidence and shall be used only for the purposes herein set forth.
Notwithstanding the foregoing, so long as Tenant is a publicly traded company
and obligated to report its financial condition publicly in accordance with the
rules of the Securities and Exchange Commission, Tenant shall not be obligated
to provide any additional financial statements in addition to those reports
available to the general public by reason of such reporting requirements.
(d) Landlord shall at any time upon no less than 10 days'
prior written notice from Tenant referring to this Paragraph of the Lease
execute, acknowledge and deliver to Tenant a statement in writing (a) certifying
that the Lease is unmodified and to Landlord's actual knowledge in full force
and effect (or, if modified, stating the nature of such modification and
certifying that to Landlord's actual knowledge of this Lease, as so modified, it
is in full force and effect) and the date to which rent and other charges are
paid in advance, if any, and (b) acknowledging that it has not given Tenant
any written notices of default, or providing copies of such notices if any have
been given.
17. Landlord's Liability. The term "Landlord" as used herein shall
mean only the owner or owners at the time in question of the fee title or a
Tenant's interest in a
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ground lease of the Premises, and in the event of any transfer of such title or
interest, Landlord herein named (and in case of any subsequent transfers then
the grantor) shall be relieved from and after the date of such transfer of all
liability as respects. Landlord's obligations thereafter to be performed,
provided that any funds in the hands of Landlord or the then grantor at the time
of such transfer, in which Tenant has an interest, shall be delivered to the
grantee. The obligations contained in this Lease to be performed by Landlord
shall, subject as aforesaid, be binding on Landlord's successors and assigns,
only during their respective periods of ownership.
18. Severability. The invalidity of any provision of this Lease as
determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.
19. Interest on Past-due Obligations. Except as expressly herein provided, any
amount due to Landlord not paid when due shall bear interest at the Interest
Rate. Payment of such interest shall not excuse or cure any default by Tenant
under this Lease, provided, however, that interest shall not be payable on late
charges incurred by Tenant nor on any amounts upon which late charges are paid
by Tenant. As used herein, the term "Interest Rate" means the lesser of (a) a
floating annual interest rate equal to four percent (4%) over the prime rate
(for corporate loans at large United States money center commercial banks)
published in the Wall Street Journal on the first business day of each month, or
(b) the maximum rate permitted by applicable law. In the event that the Wall
Street Journal fails to publish such a prime rate, the "prime rate" shall be the
prime rate or reference rate quoted by a national bank having offices in
California selected by Landlord in its sole discretion.
20. Time of Essence. Time is of the essence with respect to the obligations to
be performed under this Lease.
21. Additional Rent. Any monetary obligations of Tenant to Landlord under the
terms of this Lease shall be deemed to be rent.
22. Incorporation of Prior Agreements; Amendments. This Lease contains all
agreements of the parties with respect to any matter mentioned herein. No prior
or contemporaneous agreement or understanding pertaining to any such matter
shall be effective. This Lease may be modified in writing only, signed by the
parties in interest at the time of the modification. Except as otherwise stated
in this Lease, Tenant hereby acknowledges that neither the real estate broker
listed in Paragraph 15 hereof nor any cooperating broker on this transaction nor
the Landlord or any employees or agents of any of said persons has made any oral
or written warranties or representations to Tenant relative to the condition or
use by Tenant of said Premises
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and Tenant acknowledges that Tenant assumes all responsibility regarding the
Occupational Safety Health Act, the legal use and adaptability of the Premises
and the compliance thereof with all applicable laws and regulations in effect
during the term of this Lease except as otherwise specifically stated in this
Lease.
23. Notices. Any notice given pursuant to this Lease shall be in writing,
shall be personally delivered, delivered by Federal Express or comparable
overnight courier, providing written evidence of delivery, or delivered by U.S.
registered or certified mail, return receipt requested, postage prepaid and sent
to Landlord and Tenant at the following addresses:
LANDLORD
Silver Oaks LLC
00000 Xxxxxx Xxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxx Xxxxx
With a copy by the same method to:
The Prudential Insurance Company of America
0 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Attn: PRISA Management
With a copy by the same method to:
Experience Property Solutions
0000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxxxxx
TENANT:
Xxxxxx Automation, Inc.,
00 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxxx
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or such other address as either party may from time to time designate as its
notice address by notifying the other party thereof. Notice so sent shall be
deemed given (a) when personally delivered, or (b) on the first business day
following deposit with Federal Express or a comparable overnight courier service
providing written evidence of delivery, or (c) five business days following
deposit in the United States mail, if notice is sent by registered or certified
mail, return receipt requested, postage prepaid. A copy of all notices required
or permitted to be given to Landlord hereunder shall be concurrently transmitted
to such party or parties at such addresses as Landlord may from time to time
hereafter designate by notice to Tenant.
24. Waivers. No waiver by either party of any provision hereof shall be deemed
a waiver of any other provision hereof or of any subsequent breach by the other
party of the same or any other provision. Landlord's consent to, or approval of,
any act shall not be deemed to render unnecessary the obtaining of Landlord's
consent to or approval of any subsequent act by Tenant. The acceptance of rent
hereunder by Landlord shall not be a waiver of any preceding breach by Tenant of
any provision hereof, other than the failure of Tenant to pay the particular
rent so accepted, regardless of Landlord's knowledge of such preceding breach at
the time of acceptance of such rent.
25. Recording. This Lease shall not be recorded, but the parties shall
execute, acknowledge before a notary public, and deliver, the memorandum of
lease attached to this Lease as Exhibit "E". The memorandum shall be recorded
with the Los Angeles County Recorder at Tenant's sole cost and expense.
Concurrently with the delivery of the memorandum of lease, Tenant shall execute
and deliver to Landlord a quitclaim deed to the Premises, in recordable form,
designating Landlord as transferee. Landlord agrees not to record that quitclaim
deed prior to the expiration or earlier termination of this Lease. In addition,
upon Landlord's request, Tenant shall immediately execute and deliver to
Landlord on expiration or termination of this Lease a quitclaim deed to the
Premises, in recordable form, designating Landlord or its successor as
transferee.
26. Holding Over. If Tenant, with Landlord's consent, remains in possession of
the Premises or any part thereof after the expiration of the term hereof, such
occupancy shall be a tenancy from month to month upon all the provisions of this
Lease pertaining to the obligations of Tenant, except that the monthly rent
shall be 150% of the rent payable in the last month of the Lease term, but all
options and rights of first refusal, if any, granted under the terms of this
Lease shall be deemed terminate and be of no further effect during said month to
month tenancy.
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27. Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.
28. Covenants and Conditions. Each provision of this Lease performable by
Tenant shall be deemed both a covenant and a condition.
29. Binding Effect; Choice of Law. Subject to any provisions hereof
restricting assignment or subletting by Tenant and subject to the provisions of
Paragraph 17, this Lease shall bind the parties, their personal representatives,
successors and assigns. This Lease shall be governed by the laws of the State
wherein the Premises are located.
30. Subordination, Attornment; Non-Disturbance.
30.1 Subordination. This Lease and any Option granted hereby shall be
subordinate to any ground lease, mortgage, deed of trust, or other hypothecation
or security device (collectively, "Security Device"), now or hereafter placed
upon the Premises, to any and all advances made on the security thereof, and to
all renewals, modifications, and extensions thereof. Tenant agrees that the
holders of any such Security Devices (in this Lease together referred to as
"Landlord's Lender") shall have no liability or obligation to perform any of the
obligations of Landlord under this Lease. Any Lender may elect to have this
Lease and/or any Option granted hereby superior to the lien of its Security
Device by giving written notice thereof to Tenant, whereupon this Lease and such
Options shall be deemed prior to such Security Device notwithstanding the
relative dates of the documentation or recordation thereof.
30.2 Attornment. Subject to the non-disturbance provisions of Paragraph
30.3, Tenant agrees to attorn to a Lender or another party who acquires
ownership of the Premises by reason of a foreclosure of a Security Device, and
that in the event of such foreclosure, such new owner shall not (i) be liable
for any act or omission of any prior Landlord or with respect to events
occurring prior to acquisition of ownership (provided that this clause (i) shall
not relieve the new owner from its ongoing maintenance obligations under this
Lease); (ii) be subject to any offsets or defenses which Tenant might have
against any prior Landlord; or (iii) be bound by prepayment of more than one (1)
month's rent.
30.3 Non-Disturbance. With respect to Security Devices entered into by
Landlord after the execution of this Lease, Tenant's subordination of this Lease
shall be subject to receiving a commercially reasonable non-disturbance
agreement (a "Non-Disturbance Agreement") from the Lender which Non-Disturbance
Agreement provides that Tenant's possession of the Premises, and this Lease,
including any
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options to extend the term hereof, will not be disturbed so long as Tenant is
not in breach hereof and attorns to the record owner of the Premises.
30.4 Self-Executing. The agreements contained in this Paragraph 30 shall
be effective without the execution of any further documents; provided, however,
that upon written request from Landlord or a Lender in connection with a sale,
financing or refinancing of the Premises, Tenant and Landlord shall execute such
further writings as may be reasonably required to separately document any
subordination, attornment and/or Non-Disturbance Agreement provided for herein.
Tenant's failure to execute such documents within 10 business days after written
demand shall constitute a material default by Tenant hereunder without further
notice to Tenant. Anything to the contrary notwithstanding in this Paragraph
30.4, Tenant's failure to deliver such documents will not be deemed Event of
Default by Tenant of the Lease unless Tenant's failure continues uncured for
five (5) days after an additional written notice to Tenant of such default.
30.5 Initial Subordination and Non-Disturbance Agreement. Landlord shall
provide Tenant with a Subordination, Non-Disturbance Agreement in the form of
Exhibit "F" attached hereto, from the Lender in place on the date of execution
of this Lease.
31. Attorney's Fees.
(a) If either party brings an action or proceeding to enforce the
terms hereof or declare rights hereunder, the prevailing party in any such
proceeding, action, or appeal thereon, shall be entitled to its reasonable
attorney's fees and such fees as may be awarded in the same suit or recovered in
a separate suit, whether or not such action or proceeding is pursued to decision
or judgment. The term, "prevailing party" shall include, without limitation, a
party who obtains legal counsel or brings an action against the other by reason
of the other's breach or default, or who defends such action, and substantially
obtains or defeats the relief sought, whether by compromise, settlement,
judgment, or abandonment of the claim or defense by the other party.
(b) The attorney's fee award shall not be computed in accordance
with any court fee schedule, but shall be such as to fully reimburse all
attorney's fees reasonably incurred in good faith.
(c) Landlord shall be entitled to attorney's fees, costs and
expenses incurred in the preparation and service of notices of default and
consultations in connection therewith, whether or not a legal action is
subsequently commenced in connection with such default. Landlord and Tenant
agree that $350.00 is a reasonable
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sum per occurrence for legal services and costs per preparation and service of a
notice of default and that Landlord may include $350.00 as additional rent due
in each such notice of default as an amount that must be paid to cure said
default.
32. Landlord's Access. Landlord and Landlord's agents shall have the right to
enter the Premises at reasonable times for the purpose of inspecting the same,
showing the same to prospective purchasers, lenders, or tenants (but as to
prospective tenants only, such entry shall be during the last six (6) months
during the term of this Lease or after an Event of Default only), and making
such alterations, repairs, improvements or additions to the Premises or to the
building of which they are a part as Landlord may deem necessary or desirable.
Landlord may at any time during the last 120 days of the term hereof place on or
about the Premises any ordinary "For Lease" signs, all without rebate of rent or
liability to Tenant. Notwithstanding anything to the contrary in this Paragraph
32, except in the case of emergency or during periods in which Tenant is in
default under this Lease, Landlord shall give Tenant notice at least two (2)
business days in advance of Landlord's intent to enter the Premises and such
entry shall be made during Tenant's business hours.
33. Auctions. Tenant shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises without first having
obtained Landlord's prior written consent. Notwithstanding anything to the
contrary in this Lease, Landlord shall not be obligated to exercise any standard
of reasonableness in determining whether to grant such consent.
34. Signs. Tenant shall not place any sign upon the Premises without
Landlord's prior written consent. Tenant shall have the right, at its sole cost
and expense, to install a sign on the exterior of the Building identifying its
name and logo. The graphics, materials, color, design, lettering, size, location
and specifications of Tenant's signage shall be subject to the prior written
approval of Landlord, which approval shall not be unreasonably withheld or
delayed, and the approval of the City of Los Angeles. The sign shall be
installed and maintained, at Tenant's sole cost and expense, pursuant to an
installation and maintenance program approved and supervised by Landlord. At the
expiration or earlier termination of this Lease, Landlord shall, at Tenant's
sole cost and expense, cause the sign to be removed and the exterior of the
Building affected by the sign to be restored to the condition existing prior to
the installation of the sign. Landlord may disapprove any signage that contains
a name which relates to an entity or individual which is of a character or
reputation, or is associated with a political orientation or faction, which is
materially inconsistent with the quality of the Building, or which would
otherwise reasonably offend the landlord of a comparable building. This signage
right is personal to the initially named Tenant and any assignee of the Lease
consented to by Landlord or as to which Landlord's
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consent is not required pursuant to Paragraph 12. In addition, so long as such
additional sign otherwise meets the requirements of this Paragraph 34, in the
event Tenant subleases a portion of the Premises in accordance with Paragraph
12, one subtenant of Tenant may have secondary "eyebrow" signage at one location
on the Building identifying that one subtenant.
35. Merger. The voluntary or other surrender of this Lease by Tenant, or a
mutual cancellation thereof, or a termination by Landlord, shall not work a
merger, and shall, at the option of Landlord, terminate all or any existing
subtenancies or may, at the option of Landlord, operate as an assignment to
Landlord of any or all of such subtenancies.
36. Consents. Except for Paragraphs 33, 34 and 47 hereof, wherever in this
Lease the consent of one party is required to an act of the other party, such
consent shall not be unreasonably withheld.
37. [Intentionally Omitted].
38. Quiet Possession. Upon Tenant paying the rent for the Premises and
observing and performing all of the covenants, conditions and provisions on
Tenant's part to be observed and performed hereunder, Tenant shall have quiet
possession of the Premises for the entire term hereof subject to all of the
provisions of this Lease, and all easements, covenants, conditions and
restrictions of record. The individuals executing this Lease on behalf of
Landlord represent and warrant to Tenant that they are fully authorized and
legally capable of executing this Lease on behalf of Landlord and that such
execution is binding upon all parties holding an ownership interest in the
Premises.
39. Options.
39.1 Definition. As used in this paragraph the word "Options" has the
following meaning: (a) the right or option to extend the term of this Lease or
to renew this Lease or to extend or renew any lease that Tenant has on other
property of Landlord; (b) the option or right of first refusal to lease the
Premises or the right of first offer to lease the Premises or the right of first
refusal to lease other property of Landlord or the right of first offer to lease
other property of Landlord; (c) the right or option to purchase the Premises, or
the right of first refusal to purchase the Premises, or the right of first offer
to purchase the Premises or the right or option to purchase other property of
Landlord, or the right of first refusal to purchase other property of Landlord
or the right of first offer to purchase other property of Landlord.
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39.2 Options Personal; Multiple Options. Each Option granted to Tenant in this
Lease is personal to Tenant and may not be exercised or be assigned, voluntarily
or involuntarily, by or to any person or entity other than Tenant, provided,
however, the Options may be exercised by or assigned to any Tenant Affiliate as
defined in Paragraph 12.4 of this Lease and assigned to any assignee of this
Lease permitted under Paragraph 12 of this Lease. The Options herein granted to
Tenant are not assignable separate and apart from this Lease. In the event that
Tenant has any multiple options to extend or renew this Lease a later option
cannot be exercised unless the prior option to extend or renew this Lease has
been so exercised.
39.3 Effect of Default on Options.
(a) Tenant shall have no right to exercise an Option,
notwithstanding any provision in the grant of Option to the contrary, if there
is an Event of Default at the time of Tenant's exercise thereof.
(b) All rights of Tenant under the provisions of an Option
shall terminate and be of no further force or effect, notwithstanding Tenant's
due and timely exercise of the Option, if, there is an Event of Default at the
time of the commencement of the applicable Option Period.
39.4 First Option. Landlord hereby grants to Tenant the option to
extend the term of this Lease for a five (5) year period commencing on the date
the prior term expires (the "First Option Period") upon each and all of the
following terms and conditions:
(a) Tenant gives to Landlord, and Landlord actually receives,
on a date which is prior to the date that the First Option Period would commence
(if exercised) by at least ten (10) and not more than thirteen (13) months, a
written notice of exercise of the option to extend this Lease for said
additional term, time being of the essence. Such notice shall be delivered in
accordance with Paragraph 23 hereof. If said notification of the exercise of
said option is not so given and received, this option shall automatically
expire;
(b) The provisions of Paragraph 39, including the provision
relating to default of Tenant set forth in Paragraph 39.3 of this Lease are
conditions of this option;
(c) All of the terms and conditions of this Lease except where
specifically modified by this option shall apply, except that Tenant shall have
no
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further option to extend the term of this Lease other than for the option
provided for in Paragraph 39.5;
(d) Any prior Tenant that has not been expressly released from
liability under this Lease, and any guarantor of the Tenant's performance
hereunder, expressly reaffirms in writing the extension of their liability for
the term of the option; and
(e) The monthly Base Rent for each month of the First Option
Period shall be the Fair Market Rent (as defined below) of the Premises as of
the commencement of the First Option Period, but in no event less than the
monthly Base Rent scheduled to be paid during the month prior to the
commencement of the First Option Period.
39.5 Second Option. Landlord hereby grants to Tenant the option to
extend the term of this Lease for a five (5) year period commencing on the date
the First Option Period expires (the "Second Option Period") upon each and all
of the following terms and conditions:
(a) Tenant gives to Landlord, and Landlord actually receives,
on a date which is prior to the date that the Second Option Period would
commence (if exercised) by at least ten (10) and not more than thirteen (13)
months, a written notice of exercise of the option to extend this Lease for said
additional term, time being of the essence. Such notice shall be delivered in
accordance with Paragraph 23 hereof. If said notification of the exercise of
said option is not so given and received, this option shall automatically
expire;
(b) The provisions of Paragraph 39, including the provision
relating to default of Tenant set forth in Paragraph 39.3 of this Lease are
conditions of this option;
(c) All of the terms and conditions of this Lease except where
specifically modified by this option shall apply; except that Tenant shall have
no further option to extend the term of this Lease;
(d) Any prior Tenant that has not been expressly released from
liability under this Lease, and any guarantor of the Tenant's performance
hereunder, expressly reaffirms in writing the extension of their liability for
the term of the option; and
(e) The monthly Base Rent for each month of the second option
period shall be the Fair Market Rent of the Premises as of the commencement of
the
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Second Option Period, but in no event less than the monthly Base Rent scheduled
to be paid during the month prior to the commencement of the Second Option
Period.
39.6 Fair Market Rent.
(a) The term "Fair Market Rent" as used in this lease is
defined to mean the rent, including all escalations, at which tenants are
leasing non-sublease, non-encumbered, non-equity space comparable in size and
quality to the Premises for the Option Period as to which Fair Market Rent is
being determined in the Cascades Business Park, Van Nuys, Valencia area, giving
appropriate consideration to the annual rental rates per square foot and the
standard of measurement by which the square footage is measured and the
remaining useful life of the roof existing on the comparable buildings used in
determining Fair Market Rent. In determining Fair Market Rent it shall be
assumed that:
(i) The Premises are in good condition and
repair and improved with only the Landlord Improvements and
6,000 square feet of office area and there shall be no
deduction for depreciation, obsolescence or deferred
maintenance (but less reasonable wear and tear as long as well
maintained by Tenant). In the determination of Fair Market
Rent, the value of improvements made by Tenant in the Premises
shall not be taken into consideration.
(ii) The Premises would be leased for the
period of the option being exercised by a tenant with the
credit standing of Tenant, as the same exists at that time.
(iii) The Premises would be leased on the
same terms of this Lease insofar as the obligations for
repair, maintenance, insurance and real estate taxes existed
as of the expiration of the original term of this Lease.
(iv) No deduction shall be given nor
consideration given to allowances for real estate brokerage
commissions or tenant improvement allowances.
(v) The Premises will be used for its
highest and best use.
(b) Determination By Landlord. Landlord shall initially
determine the Fair Market Rent in each instance, and shall give Tenant notice
(the "Market Rent Notice") of such determination and the basis on which such
determination was made on or before the date that is nine (9) months prior to
the date the applicable Option
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Period would commence. Tenant shall have the right by written notice to Landlord
no later than the fifteen (15) day after Landlord gives the Market Rent Notice
to withdraw its exercise of the applicable option, in which event (a) Tenant
shall have no further right or option to extend the term of this lease, and (b)
Tenant's exercise of the applicable option shall be null and void.
(c) Disputes re Fair Market Rent. In the event that Tenant
notifies Landlord in writing, on or before the 20th business day following any
Market Rent Notice, that Tenant disagrees with the applicable determination,
Landlord and Tenant shall negotiate in good faith to resolve such dispute within
10 business days thereafter (The 30th business day after any Market Rent Notice
is referred to herein as the "Outside Agreement Date.") If not resolved by the
Outside Agreement Date each party shall submit to the other its determination of
Fair Market Rent and the dispute shall be submitted to arbitration in accordance
with the following paragraph titled "Arbitration Procedures." Until any such
dispute is resolved, any applicable payments due under this Lease shall
correspond to Landlord's determination and, if Tenant's determination becomes
the final determination, Landlord shall refund any overpayments to Tenant,
within 5 business days following the final resolution of the dispute.
(d) Arbitration Procedures.
(i) Landlord and Tenant shall each appoint
one arbitrator who shall by profession be a real estate broker
who shall have been active over the 5-year period ending on
the date of such appointment in the leasing of properties
similar to the Premises in the surrounding area of Los Angeles
County. The determination of the arbitrators shall be limited
solely to the issue of whether Landlord's or Tenant's
submitted Fair Market Rent for the Premises is the closest to
the actual Fair Market Rent for the Premises as determined by
the arbitrators, taking into account the requirements of this
subparagraph regarding the same. Each such arbitrator shall be
appointed within 15 days after the Outside Agreement Date.
Landlord and Tenant may not consult with either such
arbitrator prior to resolution.
(ii) The two arbitrators so appointed shall
within 15 days of the date of the appointment of the last
appointed arbitrator, meet and attempt to reach a decision as
to whether the parties shall use Landlord's or Tenant's
submitted Fair Market Rent, and shall notify Landlord and
Tenant of their decision, if any.
(iii). If the two arbitrators are unable to
reach a decision, the two arbitrators shall, within 30 days of
the date of the appointment of the
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last appointed arbitrator, agree upon and appoint a 3rd arbitrator who shall be
a broker who shall be qualified under the same criteria set forth hereinabove
for qualification of the initial 2 arbitrators.
(iv) The 3 arbitrators shall, within 30 days
of the appointment of the 3rd arbitrator, reach a decision as
to whether the parties shall use Landlord's or Tenant's
submitted Fair Market Rent, and shall notify Landlord and
Tenant thereof.
(v) The decision of the majority of the 3
arbitrators shall be binding upon Landlord and Tenant.
(vi) If either Landlord or Tenant fails to
appoint an arbitrator within 15 days after the Outside
Agreement Date, the arbitrator appointed by one of them shall
reach a decision, notify Landlord and Tenant thereof, and such
arbitrator's decision shall be binding upon Landlord and
Tenant.
(vii) If the 2 arbitrators fail to agree
upon and to appoint a 3rd arbitrator, then the appointment of
the 3rd arbitrator shall be dismissed, and the matter to be
decided shall be forthwith submitted to arbitration under the
provisions of the American Arbitration Association, but
subject to the instructions set forth in this Lease.
(viii) The cost of arbitration shall be paid
by Landlord and Tenant equally.
40. [Intentionally Omitted].
41. Security Measures. Tenant hereby acknowledges that the rental payable to
Landlord hereunder does not include the cost of guard service or other security
measures, and that Landlord shall have no obligation whatsoever to provide same.
Tenant assumes all responsibility for the protection of Tenant, its agents and
invitees from acts of third parties.
42. Easements. Landlord reserves to itself the right, from time to time, to
grant such easements, rights and dedications that Landlord deems necessary or
desirable, and to cause the recordation of Parcel Maps and restrictions, so long
as such easements, rights, dedications, Maps and restrictions (a) do not
materially interfere with the use of the Premises by Tenant or the access to
the Premises or parking on the Premises, (b) will not result in a material
increase in the wear and tear on the Premises
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due to increased usage by third parties, and (c) do not result in an increase in
costs payable by Tenant under this Lease. Tenant shall sign any of the
aforementioned documents upon request of Landlord and failure to do so shall
constitute a material breach of this Lease by Tenant without the need for
further notice to Tenant.
43. Performance Under Protest. If at any time a dispute shall arise as to any
amount or sum of money to be paid by one party to the other under the provisions
hereof, the party against whom the obligation to pay the money is asserted shall
have the right to make payment "under protest" and such payment shall not be
regarded as a voluntary payment, and there shall survive the right on the part
of said party to institute suit for recovery of such sum. If it shall be
adjudged that there was no legal obligation on the part of said party to pay
such sum or any part thereof, said party shall be entitled to recover such sum
or so much thereof as it was not legally required to pay under the provisions of
this Lease.
44. Authority. If Tenant is a corporation, trust, or general or limited
partnership, each individual executing this Lease on behalf of such entity
represents and warrants that he or she is duly authorized to execute and deliver
this Lease on behalf of said entity. If Tenant is a corporation, trust or
partnership, Tenant shall, within thirty (30) days after execution of this
Lease, deliver to Landlord evidence of such authority satisfactory to Landlord.
45. Cashier's Checks.
(a) In the event that any check given to Landlord by Tenant
shall not be honored by the bank upon which it is drawn on two or more
occasions, then Landlord, at its option may require all future payments to be
made by Tenant under this Lease to be made by cashier's checks.
(b) Any payment made by Tenant pursuant to a written notice to
pay or be deemed in default under this Lease shall be made by cashier's check.
46. Amendments to Lease. Tenant agrees to make any reasonable non-monetary
modifications to this Lease that may be required by an institutional mortgagee
of Landlord that do not increase Tenant's obligations or decrease the benefits
under this Lease to Tenant.
47. Storage Tanks.
(a) Notwithstanding anything to the contrary in Paragraph 7.5
hereof, Tenant shall not install storage tanks of any size or shape in the
Premises, above or
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below ground, without the consent of the Landlord which can be withheld in
Landlord's sole discretion. If Landlord elects to grant its consent, Landlord
shall have the right to condition its consent upon Tenant agreeing to give to
Landlord such assurances that Landlord, in its sole discretion, deems necessary
to protect itself against potential problems concerning the installation, use,
removal and contamination of the Premises as a result of the installation and/or
use of such tank, including but not limited to the installation of a concrete
encasement for said tank. Tenant shall comply at its expense with all applicable
permit and/or registration requirements and repair any damage caused by the
installation, maintenance or removal of such tank. Upon termination of the
Lease, Tenant shall, at its sole cost and expense, remove any tank from the
Premises, remove and replace any contaminated soil or materials (and compact or
treat the same as then required by law) and repair any damage or change to the
Premises caused by said installation and/or removal. Nothing contained herein
shall be construed to diminish or reduce Tenant's obligations under Paragraph
48.
(b) Landlord shall have the right to employ experts and/or
consultants, at Tenant's expense, to advise Landlord with respect to the
installation, operation, monitoring, maintenance and removal and restoration of
any such tank.
(c) Landlord hereby consents to the Tenant's installation of
an above-ground diesel fuel storage tank of not to exceed 600 gallons having a
design and location as shown on Exhibit "C" solely for the purpose of serving a
diesel-operated emergency generator; provided that (i) such storage tank is
installed, maintained, operated and removed in accordance with the requirements
of this Lease and at Tenant's sole cost and expense, (ii) Landlord may require
the installation of a concrete encasement for such tank at Tenant's sole cost
and expense and (iii) Tenant removes such tank prior to expiration or earlier
termination of the term of this Lease. Tenant shall provide Landlord with copies
of all licenses and permits required by Applicable Law in connection with
Tenant's installation, operation, maintenance and removal of such tank.
48. Tenant's Covenants Regarding Hazardous Materials.
48.1 Landlord's Prior Consent. Notwithstanding anything contained in
this Lease to the contrary, Tenant has not caused or permitted, and shall not
cause or permit any "Hazardous Materials" (as defined in Paragraph 48.2, below)
to be brought upon, kept, stored, discharged, released or used in, under or
about the Premises by Tenant, its agents, employees, contractors,
subcontractors, licensees or invitees, unless (a) such Hazardous Materials are
reasonably necessary to Tenant's business and will be handled, used, kept,
stored and disposed of in a manner which complies with all "Hazardous Materials
Laws" (as defined in Paragraph 48.2, below); (b) Tenant will
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comply with such other rules or requirements as Landlord may from time to time
impose, including without limitation that (i) such materials are properly
labeled and contained, (ii) such materials are handled and disposed of in
accordance with prudent industry standards for safety, storage, use and
disposal, (iii) such materials are for use in the ordinary course of business,
(c) notice of and a copy of the current material safety data sheet is provided
to Landlord for each such Hazardous Material, and (d) Landlord shall have
granted its prior written consent to the use of such Hazardous Materials.
48.2 Compliance with Hazardous Materials Laws. As used herein, the term
"Hazardous Materials" means any (a) oil, petroleum, petroleum products,
flammable substances, explosives, radioactive materials, hazardous wastes or
substances, toxic wastes or substances or any other wastes, materials or
pollutants which (i) pose a hazard to the Premises or to persons on or about the
Premises or (ii) cause the Premises to be in violation of any Hazardous
Materials Laws (as hereinafter defined); (b) asbestos in any form, urea
formaldehyde foam insulation, transformers or other equipment which contain
dielectric fluid containing levels of polychlorinated biphenyls, or radon gas;
(c) chemical, material or substance defined as or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous materials," "extremely
hazardous waste," "restricted hazardous waste," or "toxic substances" or words
of similar import under any applicable local, state or federal law or under the
regulations adopted or publications promulgated pursuant thereto, including, but
not limited to, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq.; the
Resources Conservation Recovery Act, 42 U.S.C. Section 6901, et seq.; the
Hazardous Materials Transportation Act, as amended, 49 U.S.C. Section 1801, et
seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. Section
1251, et seq.; Sections 25115; 25117, 25122.7, 25140, 25249.8, 25281, 25316 and
25501 of the California Health and Safety Code; and Article 9 or Article 11 of
Title 22 of the California Code of Regulations, Division 4, Chapter 20; (d)
other chemical, material or substance, exposure to which is prohibited, limited
or regulated by any governmental authority or may or could pose a hazard to the
health and safety of the occupants of the Premises or the owners and/or
occupants of property adjacent to or surrounding the Premises, or any other
Person coming upon the Premises or adjacent property; and (e) other chemical,
materials or substance which may or could pose a hazard to the environment. As
used herein the term "Hazardous Materials Laws" means any federal, state or
local laws, ordinances, regulations or policies relating to the environment,
health and safety, and Hazardous Materials (including, without limitation, the
use, handling, transportation, production, disposal, discharge or storage
thereof) or to industrial hygiene or the environmental conditions on, under or
about the Premises, including, without limitation, soil, groundwater and
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indoor and ambient air conditions. Tenant shall at all times and in all
respects comply with all Hazardous Materials Laws.
48.3 Hazardous Materials Removal. Upon expiration or earlier
termination of this Lease, Tenant shall, at Tenant's sole cost and expense,
cause all Hazardous Materials brought on the Premises to be removed from the
Premises in compliance with all applicable Hazardous Materials Laws. If Tenant
or its employees, agents, or contractors violates the provisions of the
foregoing two paragraphs, or if Tenant's acts, negligence, or business
operations contaminate, or expand the scope of contamination of, the Premises
from such Hazardous Materials, then Tenant shall promptly, at Tenant's expense,
take all investigatory and/or remedial action (collectively, the "Remediation")
that is necessary in order to clean up, remove and dispose of such Hazardous
Materials causing the violation on the Premises or the underlying groundwater or
the properties adjacent to the Premises to the extent such contamination was
caused by Tenant, in compliance with all applicable Hazardous Materials Laws.
Tenant shall further repair any damage to the Premises caused by the Hazardous
Materials contamination. Tenant shall provide prior written notice to Landlord
of such Remediation, and Tenant shall commence such Remediation no later than
thirty (30) days after such notice to Landlord and diligently and continuously
complete such Remediation. Such written notice shall also include Tenant's
method, time and procedure for such Remediation and Landlord shall have the
right to require reasonable changes in such method, time or procedure of the
Remediation. Tenant shall not take any Remediation in response to the presence
of any Hazardous Materials in or about the Premises or enter into any settlement
agreement, consent decree or other compromise in respect to any claims relating
to any Hazardous Materials in any way connected with the Premises, without first
notifying Landlord of Tenant's intention to do so and affording Landlord ample
opportunity to appear, intervene or otherwise appropriately assert and protect
Landlord's interests with respect thereto.
48.4 Notices. Tenant shall immediately notify Landlord in writing of:
(a) any enforcement, cleanup, removal or other governmental or regulatory action
threatened, instituted, or completed pursuant to any Hazardous Materials Laws
with respect to the Premises; (b) any claim, demand, or complaint made or
threatened by any person against Tenant or the Premises relating to damage,
contribution, cost recovery compensation, loss or injury resulting from any
Hazardous Materials; and (c) any reports made to any governmental authority
arising out of any Hazardous Materials on or removed from the Premises. Landlord
shall have the right (but not the obligation) to join and participate, as a
party, in any legal proceedings or actions affecting the Premises initiated in
connection with any Hazardous Materials Laws.
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48.5 Indemnification of Landlord. Tenant shall indemnify, protect,
defend and forever hold Landlord harmless from any and all damages, losses,
expenses, liabilities, obligations and costs arising out of any failure of
Tenant to observe the foregoing covenants in Paragraphs 47 and 48. The
provisions of Paragraphs 47 and 48 shall survive the expiration or earlier
termination of the Lease.
48.6 Preexisting Conditions. Notwithstanding anything to the contrary
in this Lease, Tenant shall not be liable to Landlord under this Lease for any
cost associated with Hazardous Materials, if any, to the extent that the
Hazardous Materials existed on the Premises prior to the date of this Lease and
were not brought on to the Premises by Tenant, its agents, employees,
contractors, subcontractors, licensees or invitees (the "Preexisting
Conditions"). Without limiting any other provision of this Lease, Tenant shall
provide Landlord with the original of any notices or other documents received by
Tenant in connection with the Preexisting Conditions.
48.7 Studies. Tenant acknowledges receipt of a copy of the reports
described in Exhibit "J" attached hereto (collectively, "Hazardous Substance
Reports"). Landlord, except as provided in the following sentence of this
paragraph, makes no representations or warranties whatsoever to Tenant
regarding: (i) the Hazardous Substance Reports (including, without limitation,
the contents and/or accuracy thereof); or (ii) the presence or absence of toxic
or Hazardous Materials in, at, or under the Premises, the Building or any other
property. Landlord does acknowledge to Tenant that: (i) Landlord has not
authorized any other studies for hazardous or toxic materials at the Premises or
Building other than the Hazardous Substance Reports; and (ii) Landlord does not
know of any surveys for toxic or Hazardous Materials at the Premises or the
Building other than the Hazardous Substance Reports. Notwithstanding the
preceding sentence, Tenant: (a) shall not rely on and Tenant hereby represents
to Landlord that it has not relied on the Hazardous Substance Reports; and (b)
shall make such studies and investigations, conduct such tests and surveys, and
engage such specialists as Tenant deems appropriate to fairly evaluate the
Premises and any risks from hazardous or toxic materials. In connection with any
inspections or tests to be conducted by Tenant at the Premises or Building,
Tenant shall first notify Landlord of each proposed inspection or test and the
scope, impact, and intent thereof and obtain Landlord's written consent to
perform the same. Tenant shall restore the Premises and the property on which
the leased premises are located to the condition existing immediately prior to
any such test and/or inspection and will provide Landlord with true and complete
copies of any survey or report obtained by or for the benefit of Tenant in
connection with hazardous or toxic materials that concern the Building or the
Premises.
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48.8 Certain Permitted Items. Landlord hereby consents to the use of
limited quantities of standard office and janitorial supplies containing
chemicals categorized as Hazardous Materials and those items containing
Hazardous Materials described in Exhibit "G" attached hereto, provided that
Tenant shall use, store and dispose of all such Hazardous Materials in strict
compliance with all Hazardous Materials Laws and comply at all times during the
term of this Lease with all Hazardous Materials Laws.
49. [Intentionally Omitted].
50. Easements and Restrictions of Record
50.1 Tenant accept the Premises subject to the easements and
covenants or restrictions of record, including without limitation the CC&R's
and the Articles, Bylaws and Association Rules (as those terms are defined in
the CC&R's). Any failure of Tenant to comply with the terms of the foregoing
documents shall be a default under this Lease. Landlord has delivered to Tenant
copies of all the documents referred to the first sentence of this Paragraph
50.1 prior to the Commencement Date.
50.2 Landlord and Tenant agree to cooperate and use their best efforts
to participate in traffic management programs generally applicable to
businesses located in the area which includes the Industrial Center and,
initially, shall encourage and support van and car pooling by Tenant's
employees to the fullest extent permitted by the requirements of Tenant's
business. Neither this Paragraph nor any other provision in this Lease,
however, is intended to or shall create any rights or benefits in any other
person, firm, company, governmental entity or the public.
51. Offer. Preparation of this Lease by Landlord or Landlord's agent and
submission of same to Tenant shall not be deemed an offer to lease. This Lease
shall become binding upon Landlord and Tenant only when fully executed by
Landlord and Tenant.
52. Waiver of Trial by Jury. LANDLORD AND TENANT HEREBY WAIVE TRIAL BY JURY AND
CONSENT TO TRIAL WITHOUT A JURY IN THE EVENT OF ANY ACTION, PROCEEDING OR
COUNTERCLAIM BROUGHT BY EITHER LANDLORD OR TENANT AGAINST THE OTHER IN
CONNECTION WITH THIS LEASE.
53. ERISA. Tenant hereby represents and warrants to Landlord that (i) Tenant is
not a "party in interest" (within the meaning of Section 3(14) of the Employee
Retirement Income Security Act of 1974, as amended) or a "disqualified person"
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(within the meaning of Section 4975 of the Internal Revenue Code of 1986, as
amended) with respect to any retirement or pension plan of The Prudential
Insurance Company of America, and (ii) no portion of or interest in the Lease
will be treated as a "plan asset" within the meaning of Regulation 29 CFR
Section 2510.3-101 issued by the Department of Labor.
54. Parking. The Premises shall include at least 157 parking spaces in the areas
shown on Exhibit "A" for Tenant's exclusive use. Tenant by notice to Landlord
may request that Landlord inform Tenant as to whether Landlord has any excess
parking available in the Cascades Business Park then owned by Landlord. Within
ten (10) days after receipt of notice from Landlord identifying any available
parking spaces, Tenant may offer to lease such excess parking. Nothing in this
Paragraph 54 constitutes an assurance to Tenant that any such additional parking
spaces will be available or that Landlord and Tenant will reach agreement on the
terms of the leasing of such additional parking spaces.
55. Landlord Shell Improvements. Landlord, at Landlord's sole cost, has
constructed or shall construct the following improvements (collectively, the
"Landlord Improvements"):
55.1 Building and Lot Improvements as defined in Drawings A-1 through
P-3 (dated January 10, 2000) entitled Royal Xxxxx Development Company 60K Spec
Building and by the Project Manual related thereto (dated February 22, 2000)
entitled Cascades Building Park 106K 200K and 60K Buildings, Site and Shell
Building Improvements. The Landlord Improvements shall be inclusive of all
project management, development, architectural, engineering and permitting fees
therefor.
55.2 Landlord shall provide that the existing exterior walls, shared
shear wall and existing roof column will be delivered with footings designed to
support a future mezzanine of approximately 6,000 square feet.
56. Tenant Improvements. Tenant shall construct in the Premises certain Tenant
Improvements on the terms an conditions contained in Exhibit "B" attached
hereto.
57. Additional Mezzanine Space. Tenant shall have the right at Tenant's sole
cost and expense to build out additional mezzanine space in the Premises during
the term of this Lease. Such construction shall be undertaken in compliance with
the terms and conditions of this Lease, including without limitation Paragraph
7.5.
58. Self Help. If Tenant provides written notice to Landlord of an event or
circumstance which requires the action of Landlord with respect to repair and/or
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maintenance of Landlord Structural Items, and Landlord fails to provide such
action within thirty (30) days after receipt of such written notice, then Tenant
may proceed to take the required action upon delivery of an additional seven (7)
business days' written notice to Landlord specifying that Tenant is taking such
required action (provided, however, that neither of the notices shall be
required in the event of an emergency which threatens life or health or where
there is imminent danger to property), and if such action was required under the
terms of the Lease to be taken by Landlord, then Tenant shall be entitled to
prompt reimbursement by Landlord of Tenant's reasonable costs and expenses in
taking such action. In the event that Tenant takes such action, Tenant shall use
only those contractors used by Landlord in the Building for work on the Landlord
Structural Items unless such contractors are unwilling or unable to perform, or
timely perform, such work, in which event Tenant may utilize the services of any
other qualified contractor which normally and regularly performs similar work in
comparable buildings. Further, if Landlord does not pay the amount of Tenant's
invoice or deliver a written objection to Tenant within thirty (30) days after
receipt of an invoice by Tenant of its costs of taking action which Tenant
claims should have been taken by Landlord, and if such invoice from Tenant sets
forth a reasonably particularized breakdown of its costs and expenses in
connection with taking such action on behalf of Landlord, then Tenant shall be
entitled to deduct from Rent payable by Tenant under this Lease, the amount set
forth in such invoice. If, however, Landlord delivers to Tenant, within thirty
(30) days after receipt of Tenant's invoice, a written objection to the payment
of such invoice setting forth with reasonable particularity Landlord's reasons
for its claim that such action did not have to be taken by Landlord pursuant to
the terms of this Lease, or that the charges are excessive (in which case
Landlord shall pay the amount it contends would not have been excessive), then
Tenant shall not be entitled to such deduction from rent, but, as Tenant's sole
remedy, Tenant may proceed to claim a default by Landlord. If such claim results
in a final judgment in Tenant's favor, and Landlord does not pay that judgment
within 30 days after it becomes final, Tenant may offset such amounts as so
determined from Rent until fully paid to Tenant. Any work undertaken by Tenant
pursuant to this Paragraph 58 shall be subject to the following:
(a) All such work shall be diligently
pursued to completion.
(b) The work undertaken by the Tenant shall
be the minimum amount of work reasonably necessary for Tenant
to correct or cure the problem or failure of Landlord to act
addressed by Tenant's notices pursuant to this Paragraph 58.
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LANDLORD AND TENANT HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM
AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LANDLORD AND TENANT WITH RESPECT TO THE
PREMISES.
"LANDLORD":
SILVER OAKS LLC,
a California limited
liability company
By: Royal-Xxxxx Development Co.,
a Hawaii general partnership
Its: Managing Member
By: Royal Contracting Co., Ltd.,
a Hawaii corporation
Its: General Partner
By: /s/ Xxxxx Xxxxxxx
-------------------------
Xxxxx Xxxxxxx, President
By: SMA Development Corp.,
a Hawaii corporation
Its: General Partner
By: /s/ Xxxxxx X. Xxxxx
--------------------------
Xxxxxx X. Xxxxx, President
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"TENANT":
XXXXXX AUTOMATION, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------
Xxxxx X. Xxxxxxxxx
-------------------------------
[Printed Name and Title]
Senior Vice President,
Finance & Adm.,
Chief Financial Officer
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