EXHIBIT 10.22
STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE- MODIFIED NET
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
1. Basic Provisions ("Basic Provisions").
1.1 Parties: This Lease ("Lease"), dated for reference purposes only,
January 30, 1999, is made by and between LIVERMORE AIRWAY BUSINESS PARK, a
limited partnership ("Lessor") and INTEK INFORMATION, INC., a Delaware
corporation ("Lessee"), (collectively the "Parties," or individually a "Party").
1.2(a) Premises: REFER TO ADDENDUM, SECTION 1.2(a).
In addition to Lessee's rights to use and occupy the Premised as hereinafter
specified, Lessee shall have non-exclusive rights to the Common Areas (as
defined in Paragraph 2.7 below) as hereinafter specified, but shall not have any
rights to the roof, exterior walls or utility raceways of the Building or to any
other buildings in the Industrial Center. The Premises, the Building, the Common
Areas, the land upon which they are located, along with all other buildings and
improvements thereon, are herein collectively referred to as "Industrial
Center." (Also see Paragraph 2.)
1.2(b) Parking: 130 unreserved vehicle parking spaces ("Unreserved
Parking Spaces"); and zero (0) reserved vehicle parking spaces ("Reserved
Parking Spaces"). (Also see Paragraph 2.6.) (Also see Addendum Section 1.3(f).)
1.3 Term: 8 years and 0 months ("Original Term") commencing REFER TO
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ADDENDUM SECTION 1.3.
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1.4 Early Possession: None ("Early Possession Date"). (Also see
Paragraphs 3.2 and 3.3.)
1.5 Base Rent: *REFER TO ADDENDUM SECTION 1.5 (Also see Paragraph 4.)
[xx] If this box is checked, this Lease provides for the Base Rent to be
adjusted per Addendum 1.5, attached hereto.
1.6(a) Base Rent Paid Upon Execution: $25,930 as Base Rent for the
first month of the Lease term.
1.6(b) Lessee's Share of Common Area Operating Expenses: fifty percent
(50%) ("Lessee's Share") as determined by [X] prorata square footage of the
Premises as compared to the Total square footage of the Building or [ ] other
criteria as described in Addendum ____.
1.7 Security Deposit: $25,000.00 ("Security Deposit"). (Also see
Paragraph 5.)
1.4 Permitted Use: An office teleservicing center ("Permitted Use")
(Also see paragraph 6.)
1.5 Insuring Party. Lessor is the "Insuring Party." (Also see
Paragraph 8.)
1.10(a) Real Estate Brokers. The following real estate broker(s)
(collectively, the "Brokers") and brokerage relationships exist in this
transaction and are consented to by the Parties (check applicable boxes):
[ ] N/A represents Lessor exclusively ("Lessor's Broker");
[xx] COLLIERS INTERNATIONAL, AND GRANITE REALTY ADVISORS represents
Lessee exclusively ("Lessee's Broker);
[ ] N/A represents both Lessor and Lessee ("Dual Agency"). (Also see
Paragraph 15.)
1.10(b) Payment to Brokers. Lessor shall pay to said Broker(s) jointly,
or in such separate shares as they may mutually designate in writing, a fee as
set forth in a separate written agreement between Lessor and said Broker(s)
(or in the event there is no separate written agreement between Lessor and said
Broker(s), the sum of $ N/A for brokerage services rendered by said Broker(s) in
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connection with this transaction.
1.11 Guarantor. The obligations of the Lessee under this Lease
are to be guaranteed by N/A. ('Guarantor").
1.12 Addenda and Exhibits. Attached hereto is an Addendum or Addenda
consisting of Paragraphs 1.2(a), 1.3, 1.3(f), 1.5, 12.1, 12.2(e), 12.2(i), 13.4
and 34, and Exhibits A through E, all of which constitute a part of this Lease.
2. Premises, Parking and Common Areas.
2.1 Letting. Lessor hereby leases to Lessee, and Lessee hereby leases
from Lessor, the Premises, for the term, at the rental, and upon all of the
terms, covenants and conditions set forth in the Lease. Unless otherwise
provided herein, any statement of square footage set forth in the Lease, or that
may have been used in calculating rental and/or Common Area Operating Expenses,
is an approximation which Lessor and Lessee agree is reasonable and the rental
and lessee's Share (as defined in Paragraph 1.6(b) based thereon is not subject
to revision whether or not the actual square footage is more or less.
2.2 Condition. Lessor shall deliver the Premises to Lessee clean and
free of debris on the Commencement Date and warrants to Lessee that the existing
plumbing, electrical systems, fire sprinkler system, lighting, air conditioning
and heating systems and loading doors, if any, in the Premises, other than those
constructed by Lessee, shall be in good operating condition on the Commencement
Date. If a non-compliance with said warranty exists as of the Commencement Date,
Lessor shall, except as otherwise provided in this Lease, promptly after receipt
of written notice from Lessee setting forth with specificity the nature and
extent of such non-compliance, rectify same at lessor's expense. If Lessee does
not give Lessor written notice of a non-compliance with this warranty within
thirty (30) days after the Commencement Date, correction of that non-compliance
shall be the obligation of Lessee at Lessee's sole cost and expense.
2.3 Compliance with Covenants, Restrictions and Building Code. Lessor
warrants that any improvements (other than those constructed by Lessee or at
Lessee's direction) on or in the Premises which have been constructed or
installed by Lessor or with Lessor's consent or at Lessor's direction shall
comply with all applicable covenants or restrictions of record and applicable
building codes, regulations and ordinances in effect on the Commencement Date.
Lessor further warrants to Lessee that Lessor has no actual knowledge of any
claim having been made by any governmental agency that a violation or violations
of applicable building codes, regulations, or ordinances exist with regard to
the Premises as of the Commencement Date. Said warranties shall not apply to any
Alterations or Utility Installations (defined in Paragraph 7.3(a)) made or to be
made by Lessee. If the Premises do not comply with said warranties, Lessor
shall, except as otherwise provided in this Lease, promptly after receipt of
written notice from Lessee given within six (6) months following the
Commencement Date and setting forth with specificity the nature and extent of
such non-compliance, take such action, at Lessor's expense, as may be
reasonable or appropriate to rectify the non-compliance. Lessor makes no
warranty that the Permitted Use in Paragraph 1.8 is permitted for the Premises
under Applicable Laws (as defined in paragraph 2.4).
2.4 Acceptance of Premises. Lessee hereby acknowledges: (a) that it has
been advised by the Broker(s) to satisfy itself with respect to the condition of
the Premises (including but not limited to the electrical and fire sprinkler
systems, security, environmental aspects, seismic and earthquake requirements,
and compliance with the Americans with Disabilities Act and applicable zoning,
municipal, county, state and federal laws, ordinances and regulations and nay
covenants or restrictions of record (collectively, "Applicable Laws") and the
present and future suitability of the Premises for Lessee's intended use; (b)
that Lessee has made such investigation as it deems necessary with reference to
such matters, is satisfied with reference thereto, and assumes all
responsibility therefore as the same relate to Lessee's occupancy of the
Premises and/or the terms of this Lease; and (c) that neither Lessor, nor any of
Lessor's agents, has made any oral or written representations or warranties
with respect to said matters other than as set forth in this Lease.
2.5 Lessee as Prior Owner/Occupant. The warranties made by Lessor in
this Paragraph 2 shall be of no force or effect if immediately prior to the date
set forth in Paragraph 1.1 Lessee was the owner or occupant of the Premises. In
such event, Lessee shall, at Lessee's sole cost and expense, correct any non-
compliance of the Premises with said warranties.
2.6 Vehicle Parking. Lessee shall be entitled to use the
number of Unreserved Parking Spaces and Reserved Parking Spaces
specified in Paragraph 1.2(b) on those portions of the Common Areas
designated from time to time by Lessor
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for parking. Lessee shall not use more parking spaces than said number. Said
parking spaces shall be used for parking by vehicles no larger than full-size
passenger automobiles or pick-up trucks, herein called "Permitted Size
Vehicles." Vehicles other than Permitted Size Vehicles shall be parked and
loaded or unloaded as directed by Lessor in the rules and Regulations (as
defined in Paragraph 40) issued by Lessor. (Also see Paragraph 2.9.)
(a) Lessee shall not permit or allow any vehicles that belong to
or are controlled by Lessee or Lessee's employees, suppliers, shippers,
customers, contractors or invitees to be loaded, unloaded, or parked in areas
other than those designated by Lessor for such activities.
(b) If Lessee permits or allows the parking of inoperative vehicles
or any of the prohibited activities described in this Paragraph 2.6, the Lessor
shall have the right, without notice, in addition to such other rights and
remedies that it may have, to remove or tow away the vehicle involved and charge
the cost to Lessee, which cost shall be immediately payable upon demand by
Lessor.
(c) Lessor shall at the Commencement Date of this Lease, provide the
parking facilities required by Applicable Law.
2.7 Common Areas - Definition. The term "Common Areas" is defined as all
areas and facilities outside the Premises and within the exterior boundary line
of the Industrial Center and interior utility raceways within the Premises that
are provided and designated by the Lessor from time to time for the non-
exclusive use of Lessor, Lessee and other lessees of the Industrial Center and
their respective employees, suppliers, shippers, customers, contractors and
invitees, including parking areas, loading and unloading areas, trash areas,
roadways, sidewalks, walkways, parkways, driveways and landscaped areas.
2.8 Common Areas - Lessee's Rights. Lessor hereby grants to Lessee, for
the benefit of Lessee and its employees, suppliers, shippers, contractors,
customers and invitees, during the term of this Lease, the non-exclusive right
to use, in common with others entitled to such use, the Common Areas as they
exist from time to time, subject to any rights. powers, and privileges reserved
by Lessor under the terms hereof or under the terms of any rules and regulations
or restrictions governing the use of the Industrial Center. Under no
circumstances shall the right herein granted to use the Common Areas be deemed
to include the right to store any property, temporarily or permanently, in the
Common Areas. Any such storage shall be permitted only by the prior written
consent of Lessor or Lessor's designated agent, which consent may be revoked at
any time. In the event that any unauthorized storage shall occur then Lessor
shall have the right, without notice, in addition to such other rights and
remedies that it may have, to remove the property and charge the cost to Lessee,
which cost shall be immediately payable upon demand by Lessor.
2.9 Common Areas - Rules and Regulations. Lessor or such other person(s)
as Lessor may appoint shall have the right, from time to time, to establish,
modify, amend and enforce reasonable Rules and Regulations with respect thereto
in accordance with Paragraph 40. Lessee agrees to abide by and conform to all
such Rules and Regulations, and to cause its employees, suppliers, customers,
contractors and invitees to so abide find conform. Lessor shall not be
responsible to Lessee for the noncompliance with said rules and regulations by
other lessees of the Industrial Center.
2.10 Common Areas - Changes. Lessor shall have the right, in Lessor's sole
discretion, from time to time:
(a) To make changes to the Common Areas, including, without
limitations, changes in the location, size, shape and number of driveways,
entrances, parking spaces, parking areas, loading and unloading areas, ingress,
egress, direction of traffic, landscaped areas, walkways and utility raceways;
(b) To close temporarily any of the Common Areas for maintenance
purposes so tong as reasonable access to the Premises remains available;
(c) To designate other land outside the boundaries of the
Industrial Center to be a part of the Common Areas;
(d) To add additional buildings and improvements to the Common
Areas;
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(e) To use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Industrial Center, or any portion
thereof; and
(f) To do and perform such other acts and make such other changes
in, to or with respect to the Common Areas and Industrial Center as Lessor may,
in the exercise of sound business judgment, deem to be appropriate.
3. Term.
3.1 Term. The Commencement Date, Expiration Date and Original Term of this
Lease are as specified In Paragraph 1.3.
3.2 Early Possession. If an Early Possession Date is specified in
Paragraph 1.4 and if Lessee Totally or partially occupies the Premises after the
Early Possession Date but prior to the Commencement Date, the obligation to pay
Base Rent shall be abated for the period of such early occupancy. All other
terms of this Lease, however, (including but not limited to the obligations to
pay Lessee's Share of Common Area Operating Expenses and to carry the insurance
required by Paragraph 8) shall be in effect during such period. Any such early
possession shall not affect nor advance the Expiration Date of the Original
Term.
3.3 Delay In Possession. If for any reason Lessor cannot deliver
possession of the Premises to Lessee by the Early Possession Date, if one is
specified in Paragraph 1.4, or if no Early Possession Date is specified, by the
Commencement Date, Lessor shall not be subject to any liability therefor, nor
shall such failure affect the validity of this Lease, or the obligations of
Lessee hereunder, or extend the term hereof, but in such case, Lessee shall not,
except as otherwise provided herein, be obligated to pay rent or perform any
other obligation or Lessee under the terms of this Lease until Lessor delivers
possession of the Premises to Lessee. If possession of the Premises is not
delivered to Lessee within sixty (60) days after the Commencement Date, Lessee
may, at its option, by notice in writing to Lessor within ten (10) days after
the end of said sixty (60) day period, cancel this Lease, in which event the
parties shall be discharged from all obligations hereunder; provided further,
however, that if such written notice of Lessee is not received by Lessor within
said ten (10) day period, Lessee's right to cancel this Lease hereunder shall
terminate and be of no further force or effect. Except as may be otherwise
provided, and regardless of when the Original Term commences, if possession is
not tendered to Lessee when required by this Lease and Lessee does not terminate
this Lease, as aforesaid, the period free of the obligation to pay Base Rent, if
any, that Lessor would otherwise have enjoyed shall run from the date of
delivery of possession and continue for a period equal to the period during
which the Lessee would have otherwise enjoyed under the terms hereof, but minus
any days of delay caused by the acts, changes or omissions of Lessee.
4. Rent.
4.1 Base Rent. Lessee shall pay Base Rent and other rent or charges, as
the same may be adjusted from time to time, to Lessor in lawful money of the
States, without offset or deduction, on or before the day on which it is due
under the terms of this Lease. Base Rent and all other rent and charges for any
period during the term hereof which is for less than one full month shall be
prorated based upon the actual number of days of the month involved. Payment of
Base Rent and other charges shall be made to Lessor at its address slated herein
or to such other persons or at such other addresses as Lessor may from time to
time designate in writing to Lessee.
4.2 Common Area Operating Expenses. Lessor shall pay to Lessor during the
term hereof, in addition to the Base Rent, Lessee's Share (as specified in
Paragraph 1.6(b)) of all Common Area Operating Expenses, as hereinafter defined,
during each calendar year of the term of this Lease, in accordance with the
following provisions:
(a) "Common Area Operating Expenses" are defined, for purposes of
this Lease, as all costs incurred by Lessor relating to the ownership and
operation of the Industrial Center, including, but not limited to, the
following:
(i) The operation, repair and maintenance, in neat,
clean, good order and condition, of the following:
(aa) The Common Areas, including parking areas,
loading and unloading areas, trash areas, roadways, sidewalks, walkways,
driveways, landscaped areas, striping, bumpers, irrigation systems, Common Area
lighting facilities, fences and gates, elevators and roof.
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(bb) Exterior signs and any tenant directories.
(cc) Fire detection and sprinkler systems.
(ii) The cost of water, gas, electricity and telephone to
service the Common Areas, including pest control and window washing services.
(iii) Trash disposal, property management and security
services and the costs of any environmental inspections.
(iv) Reserves set aside for maintenance and repair of Common
Areas.
(v) Real Property Taxes (as defined in paragraph 10.2) to
be paid by Lessor for the Building and the Common Areas under paragraph 10
hereof, and any property association dues and expenses levied against the
Industrial Center.
(vi) The cost of premiums for the insurance policies
maintained by Lessor under Paragraph 8 hereof.
(vii) Any deductible portion of an insured loss concerning
the Building or the Common Areas.
(b) Any Common Area Operating Expenses and Real Property Taxes
that are specifically attributable to the Building or to any other building in
the Industrial Center or the operation, repair and maintenance thereof, shall be
allocated entirely to the Building or to such other building. However, any
Common Area Operating Expenses and Real Property Taxes that are not specifically
attributable to the Building or to any other building or to the operation,
repair and maintenance thereof, shall be equitably allocated by Lessor to all
buildings in the Industrial Center.
(c) The inclusion of the improvements, facilities and services set
forth in Subparagraph 4.2(a) shall not be deemed to impose an obligation upon
Lessor to either have said improvements or facilities or to provide those
services unless the Industrial Center already has the same, Lessor already
provides the services, or Lessor has agreed elsewhere in this Lease to provide
the same or some of them.
(d) Lessee's Share of Common Area Operating Expenses shall be
payable by Lessee within ten (10) days after a reasonably detailed statement of
actual expenses is presented to Lessee by Lessor. At Lessee's option, however,
an amount may be estimated by Lessor from time to time of Lessee's Share of
annual Common Area Operating Expenses and the same shall be payable monthly or
quarterly, as Lessor shall designate, during each 12-month period of the Lease
term, on the same day as the Base Rent is due hereunder. Lessor shall deliver to
Lessee within sixty (60) days after the expiration of each calendar year a
reasonably detailed statement showing Lessee's Share of the actual Common Area
Operating Expenses incurred during the preceding year. If Lessee's payments
under this Paragraph 4.2(d) during said preceding year exceed Lessee's Share as
indicated on said statement, Lessor shall be credited the amount of such
overpayment against Lessee's Share of Common Area Operating Expenses next
becoming due. If Lessee's payments under this Paragraph 4.2(d) during said
preceding year were less than Lessee's Share as indicated on said statement,
Lessee shall pay to Lessor the amount of the deficiency within ten (10) days
after delivery by Lessor to Lessee of said statement.
5. Security Deposit. Lessee shall deposit with Lessor upon Lessee's execution
hereof of the Security Deposit set forth in Paragraph 1.7 as security for
Lessee's faithful performance of Lessee's obligations under this Lease. If
Lessee falls to pay Base Rent or other rent or charges due hereunder, or
otherwise Defaults under this Lease (as defined in Paragraph 13.1), Lessor may
use, apply or retain all or any portion of said Security Deposit for the payment
of any amount due Lessor or to reimburse or compensate Lessor for any liability,
cost, expense, loss or damage (including attorneys' fees) which Lessor may
suffer or incur by reason thereof. If Lessor uses or applies all or any portion
of said Security Deposit, Lessee shall, within ten (10) days after written
request therefore deposit monies with Lessor sufficient to restore said Security
Deposit to the full amount required by this Lease. Any time the Base Rent
increases during the term of this Lease, Lessee shall, upon written request from
Lessor, deposit additional monies with Lessor as an addition to the Security
Deposit so that the Total amount of the Security Deposit shall at all times bear
the same proportion to the then current Base Rent as the Initial Security
Deposit bears in the initial Base Rent set forth in Paragraph 1.5. Lessor shall
not be required to keep all or any part of its Security
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Deposit separate from its general accounts. Lessor shall, at the expiration or
earlier termination of the term hereof and after Lessee has vacated the
Premises, return to Lessee (or, at Lessor's option, to the last assignee, if
any, of Lessee's Interest herein), that portion of the Security Deposit not used
or applied by Lessor. Unless otherwise expressly agreed in writing by Lessor, no
part of the Security Deposit shall be considered to be held in trust, to bear
interest or other increment for its use, or to be prepayment for any monies to
be paid by Lessee under this Lease.
6. Use.
6.1 Permitted Use.
(a) Lessee shall use and occupy the Premises only for the
Permitted Use set forth In Paragraph 1,8, or any other legal use which is
reasonably comparable thereto, and for no other purpose. Lessee shall not use or
permit the use of the Premises in a manner that is unlawful, creates waste or a
nuisance, or that disturbs owners and/or occupants of, or causes damage to the
Premises or neighboring Premises or properties.
(b) DELETE PARAGRAPH 6.1(b).
6.2 Hazardous Substances.
(a) Reportable Uses Require Consent. The term "Hazardous
Substance" as used in this Lease shall mean any product, substance, chemical,
material or waste whose presence, nature, quantity and/or intensity of
existence, use, manufacture, disposal, transportation, spill, release or effect,
either by itself or in combination with other materials expected to be on the
Premises, is either: (i) potentially injurious to the public health, safety or
welfare, the environment, or the Premises; (ii) regulated or monitored by any
governmental authority; or (iii) a basis for potential liability of Lessor to
any governmental agency or third party under any applicable statute or common
law theory. Hazardous Substance shall include, but not be limited to,
hydrocarbons, petroleum, gasoline, crude oil or any products or by-products
thereof. Lessee shall not engage in any activity in or about the Premises which
constitutes a Reportable Use (as hereinafter defined) of Hazardous Substances
without the express prior written consent of Lessor and compliance in a timely
manner (at Lessee's sole cost and expense) with all Applicable Requirements (as
defined in Paragraph 6.3). "Reportable Use" shall mean (i) the installation or
use of any above or below ground storage tank, (ii) the generation, possession,
storage, use, transportation, or disposal of a Hazardous Substance that requires
a permit from, or with respect to which a report, notice, registration or
business plan is required to be filed with, any governmental authority, and
(iii) its presence in, on or about the Premises of a Hazardous Substance with
respect to which any Applicable Laws require that a notice be given to persons
entering or occupying the Premises or neighboring properties. Notwithstanding
the foregoing, Lessee may, without Lessor's prior consent, but upon notice to
Lessor and in compliance with all Applicable Requirements, use any ordinary and
customary materials reasonably required to be used by Lessee in the normal
course of the Permitted Use, so long as such use is not a Reportable Use and
does not expose the Premises or neighboring properties to any meaningful risk of
contamination or damage or expose Lessor to any liability therefor. In addition,
Lessor may (but without any obligation to do so) condition its consent to any
Reportable Use of any Hazardous Substance by Lessee upon Lessee's giving Lessor
such additional assurances as Lessor, in its reasonable discretion, deems
necessary to protect itself, the public, the Premises and the environment
against damage, contamination or injury and/or liability therefor, including but
not limited to the installation (and, at Lessee's option, removal on or Lease
expiration or earlier termination) of reasonably necessary protective
modifications to the Premises (such as concrete encasements) and/or the deposit
of an additional Security Deposit under Paragraph 5 hereof.
(b) Duty to Inform Lessor. If Lessee knows, or has
reasonable cause to believe, that a Hazardous Substance has come to be located
in, on, under or about the Premises or the Building, other than as previously
consented to by Lessor, Lessee shall immediately give Lessor written notice
thereof, together with a copy of any statement, report, notice, registration,
application, permit, business plan, license, claim, action, or proceeding given
to, or received from, any governmental authority or private party concerning the
presence, spill, release, discharge of, or exposure to, such Hazardous
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Substance including but not limited to all such documents as may be involved in
any Reportable Use involving the Premises. Lessee shall not cause or permit any
Hazardous Substance to be spilled or released in, on, under or about the
Premises (including, without limitation, through the plumbing or sanitary sewer
system).
(c) Indemnification. Lessee shall indemnify, protect, defend
and hold Lessor, its agents. employees, lenders and ground lessor, if any, and
the Premises, harmless from and against any and all damages, liabilities,
judgments, costs, claims, liens, expenses, penalties, loss of permits and
attorneys' and consultants' fees arising out of or involving any Hazardous
Substance brought onto the Premises by or for Lessee or by anyone under Lessee's
control. Lessee's obligations under this Paragraph 6.2(c) shall include, but
not be limited to, the effects of any contamination or injury to person,
property or the environment created or suffered by Lessee, and the cost of
investigation (including consultants' and attorneys' fees and testing), removal,
remediation, restoration and/or abatement thereof, or of any contamination
therein involved, and shall survive the expiration or earlier termination of
this Lease. No termination, cancellation or release agreement entered into by
Lessor and Lessee shall release Lessee from its obligations under this Lease
with respect to Hazardous Substances, unless specifically so agreed by Lessor in
writing at the time of such agreement.
6.3 Lessee's Compliance with Requirement. Lessee shall, at Lessee's
sole cost and expense, fully, diligently and in a timely manner, comply with all
"Applicable Requirements," which term is used in this Lease to mean all laws,
rules, regulations, ordinances, directives, covenants, easements and
restrictions of record, permits, the requirements of any applicable fire
insurance underwriter or rating bureau, and the recommendations of Lessor's
engineers and/or consultants, relating in any manner to the Premises (including
but not limited to matters pertaining to (i) industrial hygiene, (ii)
environmental conditions on, in, under or about the Premises, including soil and
groundwater conditions, and (iii) the use, generation, manufacture, production,
installation, maintenance, removal, transportation, storage, spill, or release
of any Hazardous Substance), now in effect or which may hereafter come into
effect.. Lessee shall, within five (5) days after receipt of Lessor's written
request, provide Lessor with copies of all documents and information, including
but not limited to permits, registrations, manifests, applications, reports and
certificates, evidencing Lessee's compliance with any Applicable Requirements
specified by Lessor, and shall immediately upon receipt, notify Lessor in
writing (with copies of any documents involved) of any threatened or actual
claim, notice, warning, citation, complaint or report pertaining to or involving
failure by Lessee or the Premises to comply with any Applicable Requirements.
6.4 Inspection; Compliance With Law. Lessor, Lessor's agents,
employees, contractors and designated representatives, and the holders of any
mortgages, deeds of trust or ground leases on the Premises ("Lenders") shall
have the right to enter the Premises at any time in the case of an emergency,
and otherwise at reasonable times, for the purpose of inspecting the condition
of the Premises and for verifying compliance by Lessor with this Lease and all
Applicable Requirements (as defined in Paragraph 6.3), and Lessor shall be
entitled to employ experts and/or consultants in connection therewith to advise
Lessor with respect to Lessee's activities, including but not limited to
Lessee's installation, operation, use, monitoring, maintenance, or removal of
any Hazardous Substance on or from the Premises. The costs and expenses of any
such inspections shall be paid by the party requesting same, unless a Default or
Breach of this Lease by Lessee or a violation of Applicable Requirements or a
contamination, caused or materially contributed to by Lessee, is found to exist
or to be imminent, or unless the inspection is requested or ordered by a
governmental authority as the result of any such existing or imminent violation
or contamination. In such case, Lessee shall upon request reimburse Lessor or
Lessor's Lender, as the case may be, for the costs and expenses of such
inspections.
7. Maintenance, Repairs, Utility Installations, Trade Fixtures and
Alterations.
7.1 Lessee's Obligations.
(a) Subject to the provisions of Paragraphs 2.2 (Condition), 2.3
(Compliance with Covenants, Restrictions and Building Code), 7.2 (Lessee's
Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Lessee shall, at
Lessee's sole cost and expense and at all times, keep the Premises and every
part thereof in good order, condition and repair (whether or not such portion of
the Premises requiring repair, or the means of repairing the same, are
reasonably or readily accessible to Lessee, and whether or not the not for such
repairs occurs as a result of Lessee'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 equipment or facilities specifically serving the Premises,
such as plumbing, heating, air conditioning, ventilating, electrical, lighting
facilities, boilers, fired or unfired pressure vessels, fire hose connections if
within the Premises, fixtures, interior walls, interior surfaces of exterior
walls, ceilings, floors, windows, doors, plate glass, and skylights, but
excluding any items which are the responsibility of Lessor pursuant to paragraph
7.2 below. Lessee, in keeping the Premises in good order, condition and
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repair, shall exercise and perform good maintenance practices. Lessee's
obligations shall include restorations, replacements or renewals when necessary
to keep the Premises and all improvements thereon or a part thereof in good
order, condition and state of repair.
(b) Lessor shall procure and maintain the contract for the heating, air
conditioning and ventilating systems and if Lessor so elects, Lessee shall
reimburse Lessor, upon demand, for the cost thereof.
(c) If Lessee fails to perform Lessee's obligations under this
Paragraph 7.1, Lessor may enter upon the Premises after ten (10) days' prior
written notice to Lessee (except in the case of an emergency, in which case no
notice shall be required), perform such obligations on Lessee's behalf, and put
the Premises in good order, condition and repair, in accordance with Paragraph
13.2 below.
7.2 Lessor's Obligations. Subject to the provisions of Paragraphs 2.2
(Condition), 2.3 (Compliance with Covenants, Restrictions and Building Code),
4.2 (Common Area Operating Expenses), 6 (Use), 7.1 (Lessee's Obligations), 9
(Damage or Destruction) and 14 (Condemnation), Lessor, subject to reimbursement
pursuant to Paragraph 4.2, shall keep in good order, condition and repair the
foundations, exterior walls, structural condition of interior walls, exterior
roof, fire sprinkler and/or standpipe and hose (if located in the Common Areas)
or other automatic fire extinguishing system including fire alarm and/or smoke
detection systems and equipment, fire hydrants, parking lots, walkways,
parkways, driveways, landscaping, fences, signs and utility systems serving the
Common Areas and all parts thereof, as well as providing the services for which
there is a Common Area Operating Expense pursuant to Paragraph 4.2. Lessor shall
not be obligated to paint the interior surfaces or exterior walls nor shall
Lessor be obligated to maintain, repair or replace windows, doors, or plate
glass of the Premises. Lessee expressly waives the benefit of any statute now or
hereafter in effect which would otherwise afford Lessee the right to make
repairs at Lessor's expense or to terminate this Lease because of Lessee's
failure to keep the Building, Industrial Center or Common Areas in good order,
condition and repair.
7.3 Utility Installations, Trade Fixtures, Alterations.
(a) Definitions; Consent Required. The term "Utility
Installation" is used in this Lease to refer to all air lines, power panels,
electrical distribution, security, fire protection systems, communications
systems, lighting fixtures, heating, ventilating and air conditioning equipment,
plumbing, and fencing in, on or about the Premises. The term "Trade Fixtures"
shall mean Lessee's machinery and equipment which can be removed without doing
material damage to the Premises. The term 'Alterations" shall mean any
modification of the improvements on the Premises which are provided by Lessor
under the terms of this Lease, other than Utility Installations or Trade
Fixtures. "Lessee-Owned" Alterations and/or Utility Installations' are defined
as Alterations and/or Utility Installations made by Lessee that are not yet
owned by Lessor pursuant to Paragraph 7.4(a). Lessee shall not make nor cause to
be made any Alternations or Utility Installations in, on under or about the
Premises without Lessor's prior written consent. Lessee may, however, make non-
structural Utility Installations to the interior of the Premises (excluding the
roof) without Lessor's consent but upon notice to Lessor, so long as they are
not visible from the outside of the Premises, do not involve puncturing,
relocating or removing the roof or any existing walls, or changing or
interfering with the fire sprinkler or detection systems and the cumulative cost
thereof during the term of this Lease as extended does not exceed $5,000.00.
(b) Consent. Any Alterations or Utility Installations that Lessee
shall desire to make and which require the consent of the Lessor shall be
presented to Lessor in written form with detailed plans. All consents given by
Lessor, whether by virtue of Paragraph 7.3(a) or by subsequent specific consent,
shall be deemed conditioned upon: (i) Lessee's acquiring all applicable permits
required by governmental authorities; (ii) the furnishing of copies of such
permits together with a copy of the plans and specifications for the Alteration
or Utility Installations to Lessor prior to commencement of the work thereon;
and (iii) the compliance by Lessee with all conditions of said permits in a
prompt and expeditious manner. Any Alterations or Utility Installations by
lessee during the term of this Lease shall be done in a good and workmanlike
manner, with good and sufficient materials, and be in compliance with all
Applicable Requirements. Lessee shall promptly upon completion thereof furnish
Lessor with as built plans and specifications therefor. Lessor may, (but without
obligation to do so) condition its consent to any requested Alteration or
Utility Installation that costs $5,000.00 or more upon Lessee's providing
Lessor with a lien and completion bond in an amount equal to one and one-half
times the estimated cost of such Alteration or Utility Installation.
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(c) Lien Protection. Lessee shall pay when due all claims for
labor or materials furnished or alleged to have been furnished to or for Lessee
at or for use on the Premises, which claims are or may be secured by any
mechanic's or materialmen's lien against the Premised or any interest therein.
Lessee shall give Lessor not less than ten (10) days notice prior to the
commencement of any work in, on, or about the Premises, and Lessor shall have
the right to post notices of no responsibility in or on the Premises as proved
by law. If Lessee shall, in good faith, contest the validity of any such lien,
claim or demand, then Lessee shall, at its sole expense, defend and protect
itself, Lessor and the Premises against the same and shall pay and satisfy any
such adverse judgment that may be rendered thereon before the enforcement
thereof against the Lessor or the Premises. If Lessor shall require, Lessee
shall furnish to Lessor a surety bond satisfactory to Lessor in an amount equal
to one and one-half times the amount of such contested lien claim or demand,
indemnifying Lessor against liability for the same, as required by law for the
holding of the Premises free from the effect of such lien or claim. In addition,
Lessor may require Lessee to pay Lessor's attorneys' fees and costs in
participating in such action if Lessor shall decide it is to its best interest
to do so.
7.4 Ownership, Removal, Surrender, and Restoration. (See also Addendum
Section 7.4(c).)
(a) Ownership. Subject to Lessor's right to require their
removal and to cause Lessee to become the owner thereof as hereinafter provided
in this Paragraph 7.4, all Alterations and Utility Installations made to the
Premises by Less shall be the property of and owned by Lessee, but considered a
part of the premises. Lessor may, at any time and at its option, elect in
writing to Lessee to be the owner of all or any specified part of the Lessee-
Owned Alterations and Utility Installations. Unless otherwise instructed per
Subparagraph 7.4(b) hereof, all Lessee-Owned Alterations and utility
Installations shall, at the expiration or earlier termination of this Lease,
become the property of Lessor and remain upon the Premises and be surrendered
with the Premises by Lessee.
(b) Removal. Unless otherwise agreed in writing, Lessor may
require that any or all Lessee-Owned Alterations or Utility Installations be
removed by the expiration or earlier termination of this Lease, notwithstanding
that their installation may have been consented to by Lessor. Lessor may require
the removal at any time of all or any part of any Alterations or Utility
Installations made without the required consent of Lessor.
(c) Surrender/Restoration. Lessee shall surrender the Premises by
the end of the last day of the Lease term or any earlier termination date, clean
and free of debris and in good operating order, condition and state of repair,
ordinary wear and tear excepted. Ordinary wear and tear shall not include any
damage or deterioration that would have been prevented by good maintenance
practice or by Lessee performing all of its obligations under this Lease. Except
as otherwise agreed or specified herein, the Premises, as surrendered, shall
include the Alterations and Utility Installations. The obligation of Lessee
shall include the repair of any damage occasioned by the installation,
maintenance or removal of Lessee's Trade Fixtures, furnishings, equipment, and
Lessee-Owned Alterations and Utility Installations, as well as the removal of
any storage tank installed by or for Lessee, and the removal, replacement, or
remediation of any soil, material or ground water contaminated by Lessee, all as
may be then required by Applicable Requirements and/or good practice. Lessee's
Trade Fixtures shall remain the property of Lessee and shall be removed by
Lessee subject to its obligation to repair and restore the Premises per this
Lease.
8. Insurance; Indemnity.
8.1 Payment of Premiums. The cost of the premiums for the Insurance
policies maintained by Lessor under this Paragraph 8 shall be a Common Area
Operating Expense pursuant to Paragraph 4.2 hereof. Premiums for policy periods
commencing prior to, or extending beyond, the term of this Lease shall be rated
to coincide with the corresponding Commencement Date or Expiration Date.
8.2 Liability Insurance.
(a) Carried by Lessee. Lessee shall obtain and keep in force
during its term of this lease a Commercial General Liability policy of insurance
protecting Lessee, Lessor and any Lender(s) whose names have been provided to
Lessee in writing (as additional Insureds) against claims for bodily injury and
property damage based upon, involving or arising out of its ownership, use,
occupancy or maintenance of the Premises and all areas appurtenant thereto. Such
insurance shall be on an occurrence basis providing single limit coverage in an
amount not less than $2,000,000 per occurrence with an "Additional Insurance
Managers or Lessors of Premises" endorsement and contain the "Amendment of
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the Pollution Exclusion" endorsement for damage caused by heat, smoke or fumes
from a hostile fire. The policy shall not contain any intra-insured exclusions
as between insured persons or organizations, but shall include coverage for
liability assumed under this Lease as an "Insured contract" for the performance
of Lessee's indemnity obligations under this Lease. The limits of said
insurance required by this Lease or as carried by Lessee shall not, however,
limit the liability of Lessee nor relieve Lessee of any obligation hereunder.
All insurance to be carried by Lessee shall be primary to and not contributory
with any similar insurance carried by Lessor, whose insurance shall be
considered excess insurance only.
(b) Carried by Lessor. Lessor shall also maintain liability
insurance described in Paragraph 8.2(a) above, in addition to and not in lieu
of, the insurance required to be maintained by Lessee. Lessee shall not be named
as an additional insured therein.
8.3 Property lnsurance-Building, Improvements and Rental Value.
(a) Building and Improvements. Lessor shall obtain and keep in
force during the term of this Lease a policy or policies in the name of Lessor,
with loss payable to Lessor and to any Lender(s), insuring against loss or
damage to the Premises. Such insurance shall be for full replacement cost, as
the same shall exist from time to time, or the amount required by any Lender(s),
but in no event more than the commercially reasonable and available insurance
value thereof , if, by reason of the unique nature or age of the improvements
involved, such latter amount is less than the replacement cost. Lessee-Owned
Alterations and Utility Installations, Trade Fixtures and Lessee's personal
property shall be insured by Lessee pursuant to Paragraph 8.4. If the coverage
is available and commercially appropriate, Lessor's policy or policies shall
insure against all risks of direct physical loss or damage (except the perils of
flood and/or earthquake unless required by Lessor or a Lender), including
coverage for any additional costs resulting from debris removal and reasonable
amounts of coverage for the enforcement of any ordinance or law regulating the
reconstruction or replacement of any undamaged sections of the Building required
to be demolished or removed by reason of its enforcement of any building,
zoning, safety or land use laws as the result of a covered loss, but not
including plate glass insurance. Said policy or policies should also contain an
agreed valuation provision in lieu of any co-insurance clause, waiver of
subrogation, and inflation guard protection causing an increase in the annual
property insurance coverage amount by a factor of not loss than the adjusted
U.S. Department of Labor Consumer Price Index for All Urban Consumers for the
city nearest to where the Premises are located.
(b) Rental Value. Lessor shall also obtain and keep in force
during the term of this Lease a policy or policies in the name of Lessor,
payable to Lessor and any Lender(s), insuring the loss of the full rental and
other charges payable by all lessees of the Building to Lessor for one year
(including all Real Property Taxes, insurance costs, all Common Area Operating
Expenses and any scheduled rental increases). Said insurance may provide that in
the in event the Lease is terminated by reason of an insured loss, the period of
indemnity for such coverage shall be extended beyond the date of the completion
of repairs or replacement of the Premises, to provide for one full year's loss
of rental revenues from the date of any such loss. Said insurance shall contain
an agreed valuation provision in lieu of any co-insurance clause, and the amount
of coverage shall be adjusted annually to collect the projected rental income,
Real Property Taxes, insurance premium costs and other expenses, if any,
otherwise payable, for the next 12-month period. Common Area Operating Expenses
shall include any deductible amount in the event of such loss.
(c) Adjacent Premises. Lessee shall pay for any increase in the
premiums for the property insurance of the Building and for the Common Areas or
other buildings in the Industrial Center if said increase is caused by Lessee's
acts, omissions, use or occupancy of the Premises.
(d) Lessee's Improvements. Since Lessor is the insuring Xxxxx.,
Lessor shall not be required to insure Lessee-Owned Alterations and Utility
Installations unless the item in question has become the property of Lessor
under the terms of this Lease.
8.4 Lessee's Property Insurance. Subject to the requirements of
Paragraph 8.5, Lessee at its cost shall either by separate policy or, at
Lessor's option, by endorsement to a policy already carried, maintain insurance
coverage on all of Lessee's personal property, Trade Fixtures and Lessee-Owned
Alterations and Utility Installations in, on, or about the Premises similar in
coverage to that carried by Lessor as the Insuring Party under Paragraph 8.3(a).
Such insurance shall be full replacement cost coverage with a deductible not to
exceed $1,000 per occurrence. The proceeds from any such insurance shall be used
by Lessor for the replacement of personal property and the restoration of Trade
Fixtures and Lessee-Owned
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Alterations and Utility Installations. Upon request from Lessor, Lessee shall
provide Lessor with written evidence that such insurance is in force.
8.5 Insurance Policies. Insurance required hereunder shall be in
companies duly licensed to transact business in the state where the Premises are
located, and maintaining during the policy term a "General Policyholders Rating"
of at least B+, V, or such other rating as may be required by a Lender, as set
forth in the most current issue of "Best's Insurance Guide." Lessee shall not do
or permit to be done anything which shall invalidate the insurance policies
referred to in this Paragraph 8. Lessee shall cause to be delivered to Lessor,
within seven (7) days after the earlier of the Early Possession Date or the
Commencement Date, certified copies of, or certificates evidencing the existence
and amounts of, the insurance required under Paragraph 8.2(a) and 8.4. No such
policy shall be cancelable or subject to modification except after thirty (30)
days' prior written notice to Lessor. Lessee shall at least thirty (30) days
prior to the expiration of such policies furnish Lessor with evidence of
renewals or "insurance binders" evidencing renewal thereof, or Lessor may order
such insurance and charge the cost thereof to Lessee, which amount shall be
payable by Lessee to Lessor upon demand.
8.6 Waiver of Subrogation. Without affecting any other rights or
remedies, Lessee and Lessor each hereby release and relieve the other, and waive
their entire right to recover damages (whether in contract or in tort) against
the other, for loss or damage to their property arising out of or incident to
the perils required to be insured against under Paragraph 8. The effect of such
releases and waivers of the right to recover damages shall not be limited by the
amount of insurance carried or required, or by any deductibles applicable
thereto. Lessor and Lessee agree to have their respective insurance companies
issuing property damage insurance waive any tight to subrogation that such
companies may have against Lessor or Lessee, as the case may be, so long as the
insurance is not invalidated thereby.
8.7 Indemnity. Except for Lessor's negligence and/or breach of express
warranties, Lessee shall indemnify, protect, defend and hold harmless the
Premises, Lessor and its agents, Lessor's master or ground lessor, partners and
Lenders, from and against any and all claims, loss of rents and/or damages,
costs, liens, judgments, penalties, loss of permits, attorneys' and consultants'
fees, expenses and/or liabilities arising out of, involving, or in connection
with, the occupancy of the Premises by Lessee, the conduct of Lessee's business,
any act, omission or neglect of Lessee, its agents, contractors, employees or
invitees, and out of any Default or Breach by Lessee in the performance in a
timely manner of nay obligation on Lessee's part to be performed under this
Lease. The foregoing shall include, but not be limited to, the defense or
pursuit of any claim or any action or proceeding involved therein, and whether
or not (in the case of claims made against Lessor) litigated and/or reduced to
judgment. In case any action or proceeding be brought against Lessor by reason
of any of the foregoing matters, Lessee upon notice from Lessor shall defend the
same at Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor
shall cooperate with Lessee in such defense. Lessor need not have first paid any
such claim in order to be so indemnified.
8.8 Exemption of Lessor from Liability. Lessor shall not be liable for
injury or damage to the person or goods, wares, merchandise or other property of
Lessee, Lessee's employees, contractors, invitees, customers, or any other
person in or about the Premises, whether such damage or injury is caused by or
results from fire, steam, electricity, gas, water or rain, or from the breakage,
leakage, obstruction or other defects of pipes, fire sprinklers, wires,
appliances, plumbing, air conditioning or lighting fixtures, or from any other
cause, whether said injury or damage results from conditions arising upon the
Premises or upon other portions of the Building of which the Premises are a
part, from other sources or places, and regardless of whether the cause of such
damage or injury or the means of repairing the same is accessible or not. Lessor
shall not be liable for any damages arising from any act or neglect of any other
lessee of Lessor nor from the failure by Lessor to enforce the provisions of any
other Lease in the Industrial Center. Notwithstanding Lessor's negligence or
breach of this Lease, Lessor shall under no circumstances be liable for injury
to Lessee's business or for any loss of income or profit therefrom.
9. Damage or Destruction.
9.1 Definitions.
(a) "Premises Partial Damage" shall mean damage or destruction to
the Premises, other than Lessee-Owned Alterations and Utility Installations, the
repair cost of which damage or destruction is less than fifty percent (50%) of
the then Replacement Cost (as defined in Paragraph 9.1(d)) of the Premises
(excluding Lessee-Owned Alterations and Utility Installations and Trade
Fixtures) immediately prior to such damage or destruction.
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(b) "Premises Total Destruction" shall mean damage or destruction to
the Premises, other than Lessee-Owned Alterations and Utility Installations, the
repair cost of which damage or destruction is fifty percent (50%) or more of the
then Replacement Cost of the Premises (excluding Lessee-Owned Alterations and
Utility Installations and Trade Fixtures) immediately prior to such damage or
destruction. In addition, damage or destruction to the Building, other than
Lessee-Owned Alterations and Utility Installations and Trade Fixtures of any
lessees of the Building, the cost of which damage or destruction is fifty
percent (50%) or more of the then Replacement Cost (excluding Lessee-Owned
Alterations and Utility Installations and Trade Fixtures of any lessees of the
Building) of the Building shall, at the option of Lessor, be deemed to be
Premises Total Destruction.
(c) "Insured Loss" shall mean damage or destruction to the Premises,
other than Lessee-Owned Alterations and Utility Installations and Trade
Fixtures, which was caused by an event required to be covered by the insurance
described In Paragraph 8.3(a) irrespective of any deductible amounts or coverage
limits involved.
(d) "Replacement Cost" shall mean the cost to repair or rebuild the
improvements owned by Lessor at the time of the occurrence to their conditions
existing immediately prior thereto, including demolition, debris removal and
upgrading required by the operation of applicable building codes, of ordinances
or laws, and without deduction for depreciation.
(e) "Hazardous Substance Condition" shall mean the occurrence or
discovery of a condition involving the presence of, or a contamination by, a
Hazardous Substance as defined in Paragraph 6.29a), in, on or under the
Premises.
9.2 Premises Partial Damage - Insured Loss. If Premises Partial Damage
that is an Insured Loss occurs, then Lessor shall, at Lessor's expense, repair
such damage (but not Lessee's Trade Fixtures or Lessee-Owned Alterations and
Utility Installations) as soon as reasonably possible and this Lease shall
continue in full force and effect. In the event, however, that there is a
shortage of insurance proceeds and such shortage is due to the fact that, by
reason of the unique nature of the improvements in the Premises, full
replacement cost insurance coverage was not commercially reasonable and
available, Lessor shall have no obligation to pay to for the shortage in
insurance proceeds or to fully restore the unique aspects of the Premises unless
Lessee provides Lessor with the funds to cover same, or adequate assurance
thereof, within ten (10) days following receipt of written notice of such
shortage and request therefor. If Lessor waives said funds or adequate assurance
thereof within said ten (10) day period, Lessor shall complete them as soon as
reasonably possible and this Lease shall remain in full force and effect. If
Lessor does not receive such funds or assurance within said period, Lessor may
nevertheless elect by written notice to Lessee within ten (10) days thereafter
to make such restoration and repair as is commercially reasonable with Lessor
paying any shortage in proceeds, in which case this Lease shall remain in full
force and effect. If Lessor does not receive such funds or assurance within such
ten (10) day period, and if Lessor does not so elect to restore and repair, then
this Lease shall terminate sixty (60) days following the occurrence of the
damage or destruction. Unless otherwise agreed, Lessee shall in no event have
any right to reimbursement from Lessor for any funds contributed by Lessor to
repair any such damage or destruction. Premises Partial Damage due to flood or
earthquake shall be subject to Paragraph 9.3 rather than Paragraph 9.2,
notwithstanding that there may be some insurance coverage, but the not proceeds
of any such insurance shall be made available for the repairs if made by either
Party.
9.3 Partial Damage - Uninsured Loss. If Premises Partial Damage that is
not an Insured Loss occurs, unless caused by a negligent or willful act of
Lessee (in which event Lessee shall make the repairs at Lessee's expense and
this Lease shall continue in full force and effect), Lessor may at Lessor's
option, either (i) repair such damage as soon as reasonably possible at Lessor's
expense, in which event this Lease shall continue in full force and effect, or
(ii) give written notice to Lessee within thirty (30) days after receipt by
Lessor of knowledge of the occurrence of such damage of Lessor's desire to
terminate this Lease as of the date sixty (60) days following the date of such
notice. In the event Lessor elects to give such notice of Lessor's intention to
terminate this Lease, Lessee shall have the right within ten (10) days after
receipt of such notice to give written notice Lessor of Lessee's commitment to
pay for the repair of such damage totally at Lessee's expense and without
reimbursement from Lessor. Lessee shall provide Lessor with the required funds
or satisfactory assurance thereof within thirty (30) days following such
commitment from Lessee. In such event this Lease shall continue in full force
and effect, and Lessor shall proceed to make such repairs as soon as reasonably
possible after the required funds are available. If Lessee does not give such
notice and provide the funds or assurance thereof within the times specified
above, this Lease shall terminate as of the date specified in Lessor's notice
of termination.
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9.4 Total Destruction. Notwithstanding any other provision hereof, if
Premises Total Destruction occurs (including any destruction required by any
authorized public authority), this Lease shall terminate sixty (60) days
following the date of such Premises Total Destruction, whether or not the damage
or destruction is an Insured Loss or was caused by a negligent or willful act of
Lessee. In the event, however, that the damage or destruction was caused by
Lessee, Lessor shall have the right to recover Lessor's damages from Lessee
except as released and waived In Paragraph 9.7.
9.5 Damage Near End of Term. If at any time during the last six (6)
months of the term of this Lease there is damage for which the cost to repair
exceeds one month's Base Rent, whether or not an Insured Loss, Lessor may, at
Lessor's option, terminate this Lease effective sixty (60) days following the
date of occurrence of such damage giving written notice to Lessee of Lessor's
election to do so within thirty (30) days after the date of occurrence of such
damage. Provided, however, if Lessee at that time has an exercisable option to
extend this Lease or to purchase the Premises, then Lessee may preserve this
Lease by (a) exercising such option, and (b) providing Lessor with any shortage
in insurance proceeds (or adequate assurance thereof) needed to make the repairs
on or before the earlier of (i) the date which is ten (10) days after Lessee's
receipt of Lessor's written notice purporting to terminate this Lease, or (ii)
the day prior to the date upon which such option expires. If Lessee duly
exercises such option during such period and provides Lessor with funds (or
adequate assurance thereof) to cover any shortage in insurance proceeds, Lessor
shall, at Lessor's expense repair such damage as soon as reasonably possible and
this Lease shall continue in full force and effect. If Lessee fails to exercise
such option and provide such funds or assurance during such period, then this
Lease shall terminate as of the date set forth in the first sentence of this
Paragraph 9.5.
9.6 Abatement of Rent; Lessee's Remedies.
(a) In the event of (i) Premises Partial Damage or (ii) Hazardous
Substance Condition for which Lessee is not legally responsible, the Base Rent,
Common Area Operating Expenses and other charges, if any, payable by Lessee
hereunder for the period during which such damage or condition, its repair,
remediation or restoration continues, shall be abated in proportion to the
degree to wh ich Lessee's use of the Premises is impaired, but not in excess of
proceeds from insurance required to be carried under Paragraph 8.3(b). Except
for abatement of Base Rent, Common Area Operating Expenses and other charges, if
any, as aforesaid, all other obligations of Lessee hereunder shall be performed
by Lessee, and Lessee shall have no claim against Lessor for any damage suffered
by reason of any such damage, destruction, repair, remediation or restoration.
(b) If Lessor shall be obligated to repair or restore the Premises
under the provisions of this Paragraph 9 and shall not commence, in a
substantial and meaningful way, the repair or restoration of the Premises within
ninety (90) days after such obligation shall arise, Lessee may, at any time
prior to the commencement of such repair or restoration, give written notice to
Lessor and to any Lenders of which Lessee has actual notice of Lessee's election
to terminate this Lease on a date not less than sixty (60) days following the
giving of such notice. If Lessee gives such notice to Lessor and such Lenders
and such repair or restoration is not commenced within thirty (30) days after
receipt of such notice, this Lease shall terminate as of the date specified in
said notice. If Lessor or a Lender commences the repair or restoration of the
Premises within thirty (30) clays after the receipt of such notice, this Lease
shall continue in full force and effect. "Commence" as used in this Paragraph
9.6 shall mean either the unconditional authorization of the preparation of the
required plans, or the beginning of the actual work on the Premises, whichever
occurs first.
9.7 Hazardous Substance Conditions. If a Hazardous Substance Condition
occurs, unless Lessee is legally responsible therefor (in which case Lessee
shall make the investigation and remediation thereof required by Applicable
Requirements and this Lease shall continue in full force and effect, but subject
to Lessor's rights under Paragraph 6.2(c) and Paragraph 13), Lessor may at
Lessor's option either (i) investigate and remediate such Hazardous Substance
Condition, if required, as soon as reasonably possible at Lessor's expense, in
which event this Lease shall continue in full force and effect, or (ii) if the
estimated cost to investigate and remediate such condition exceeds twelve (12)
times the then monthly Base Rent or $100,000 whichever is greater, give written
notice to Lessee within thirty (30) days after receipt by Lessor of knowledge of
the occurrence of such Hazardous Substance Condition of Lessor's desire to
terminate this Lease as of the date sixty (60) days following the date of such
notice. In the event Lessor elects to give such notice of Lessor's intention to
terminate this Lease, Lessor shall leave the right within ten (10) days after
the receipt of such notice to give written notice to Lessor of Lessee's
commitment to pay for the excess costs of (a) investigation and remediation of
such Hazardous Substance Condition to the extent required by Applicable
Requirements, over (b) an amount equal to twelve (12) times the then monthly
Base Rent or $100,000, whichever is greater. Lessee shall provide Lessor with
the funds required of Lessee or satisfactory assurance thereof within thirty
(30) days following said commitment by Lessee. In such event this Lease shall
continue in
13
full force and effect, and Lessor shall proceed to make such investigation and
remediation as soon as reasonably possible after the required funds are
available. If Lessee does not give such notice and provide the required funds or
assurance thereof within the time period specified above, this Lease shall
terminate as of the date specified in Lessor's notice of termination.
9.8 Termination - Advance Payments. Upon termination of this Lease
pursuant to this Paragraph 9, Lessor shall return to Lessee any advance payment
made by Lessee to Lessor and so much of Lessee's Security Deposit as has not
been, or is not then required to be, used by Lessor under the terms of this
Lease.
9.9 Waiver of Statutes. Lessor and Lessee agree that the terms of this
Lease shall govern the effect of any damage to or destruction of the Premises
and the Building with respect to the termination of this Lease and hereby waive
the provisions of any present or future statute to the extent it is inconsistent
herewith.
10. Real Property Taxes.
10.1 Payment of Taxes. Lessor shall pay the Real Property Taxes, as defined
in Paragraph 10.2, applicable to the Industrial Center, and except as otherwise
provided in Paragraph 10.3, any such amounts shall be included in the
calculation of Common Area Operating Expenses in accordance with the provisions
of Paragraph 4.2.
10.2 Real Property Tax Definition. As used herein, the term "Real Property
Taxes" 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 (other than inheritance, personal income
or estate taxes) imposed upon the Industrial Center 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, levied against any legal or equitable
interests of Lessor in the Industrial Center or any portion thereof, Lessor's
right to rent or other income therefrom, and/or Lessor's business of leasing the
Premises. The term "Real Property Taxes" shall also include any tax, fee, levy,
assessment or charge, or any increase therein, imposed by reason of events
occurring, or changes in Applicable Law taking effect, during the term of this
Lease, including but not limited to a change in the ownership of the Industrial
Center or in the improvements thereon, the execution of this Lease, or any
modification, amendment or transfer thereof, and whether or not contemplated by
the Parties. In calculating Real Property Taxes for any calendar year, the Real
Property Taxes for any real estate tax year shall be included in the calculation
of Real Property Taxes for such calendar year based upon the number of days
which such calendar year and tax year have in common.
10.3 Additional Improvements. Common Area Operating Expenses shall not
include Real Property Taxes specified in the tax assessor's records and work
sheets as being caused by additional improvements placed upon the Industrial
Center by other lessees or by Lessor for the exclusive enjoyment of such other
lessees. Notwithstanding Paragraph 10.1 hereof, Lessee shall, however, pay to
Lessor at the time Common Area Operating Expenses are payable under Paragraph
4.2, the entirety of any increase in Real Property Taxes if assessed solely by
reason of Alterations, Trade Fixtures or Utility Installations placed upon the
Premises by Lessee or at Lessee's request.
10.4 Joint Assessment. If the Building is not separately assessed, Real
Property Taxes allocated to the Building shall be an equitable proportion of the
Real Property Taxes for all of the land and improvements included within the tax
parcel assessed, such proportion to be determined by Lessor from the respective
valuations assigned in the assessor's work sheets or such other information as
may be reasonably available. Lessor's reasonable determination thereof, in good
faith, shall be conclusive.
10.5 Lessee's Property Taxes. Lessee shall pay prior to delinquency all
taxes assessed against and levied upon Lessee-Owned Alterations and Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property
of Lessee contained in the Premises or stored within the Industrial Center. When
possible, Lessee shall cause its Lessee-Owned Alterations and Utility
Installations, Trade Fixtures, furnishings, equipment and all other personal
property to be assessed and billed separately from the real property of Lessor.
If any of Lessee's said property shall he assessed with Lessor's real property,
Lessee shall pay Lessor the taxes attributable to Lessee's property within ten
(10) days after receipt of a written statement setting forth the taxes
applicable to Lessee's property.
11. Utilities. Lessee shall pay directly for all utilities and services
supplied to the Premises, including, but not limited to electricity, telephone,
security, gas and cleaning of the Premises, together with any taxes thereon. If
any such utilities or services are not separately metered to the Premises or
separately billed to the Premises, Lessee shall pay to Lessor a
14
reasonable proportion to be determined by Lessor of all such charges jointly
metered or billed with other premises in the Building, in the manner and within
the time periods set forth in Paragraph 4.2(d).
12. Assignment and Subletting. (Also see Addendum Section 12.1.)
12.1 Lessor's Consent Required.
(a) Lessee shall not voluntarily or by operation of law assign,
transfer, mortgage or otherwise transfer or encumber (collectively, "assign") or
sublet all or any part of Lessee's interest in this Lease or in the Premises
without Lessor's prior written consent given under and subject to the terms of
Paragraph 36.
(b) A change in the control of Lessee shall constitute an assignment
requiring Lessor's consent. The transfer, on a cumulative basis, of twenty-five
percent (25%) or more of the voting control of Lessee shall constitute a change
in control for this purpose.
(c) The involvement of Lessee or its assets in any transaction, or
series of transactions (by way of merger, sale, acquisition, financing,
refinancing, transfer, leveraged buy-out or otherwise), whether or not a formal
assignment or hypothecation of this Lease or Lessee's assets occurs, which
results or will result in a reduction of the Net Worth of Lessee, as hereinafter
defined, by an amount equal to or greater than twenty-five percent (25%) of such
Net Worth of Lessee as it was represented to Lessor at the time of full
execution and delivery of this Lease or at the time of the most recent
assignment to which Lessor has consented, or as it exists immediately prior to
said transaction or transactions constituting such reduction, at whichever time
said Net Worth of Lessee was or is greater, shall be considered an assignment of
this Lease by Lessee to which Lessor may reasonably withhold its consent. "Net
Worth of Lessee" for purposes of this Lease shall be the net worth of Lessee
(excluding any Guarantors) established under generally accepted accounting
principles consistently applied.
(d) An assignment or subletting of Lessee's interest in this Lease
without Lessor's specific prior written consent shall, at Lessor's option, be a
Default curable after notice per Paragraph 13.1, or a non-curable Breach without
the necessity of any notice and grace period. If Lessor elects to treat such
unconsented to assignment or subletting as a non-curable Breach, Lessor shall
have the right to either; (i) terminate this Lease, or (ii) upon thirty (30)
days' written notice ("Lessor's Notice"), increase the monthly Base Rent for the
Premises to the greater of the then fair market rental value of the Premises, as
reasonably determined by Lessor, or one hundred ten percent (110%) of the Base
Rent then in effect. Pending determination of the new fair market rental value,
if disputed by Lessee, Lessee shall pay the amount set forth in Lessor's
Notice, with any overpayment credited against the next installment(s) of Base
Rent coming due, and any underpayment for the period retroactively to the
effective date of the adjustment being due and payable immediately upon the
determination thereof. Further, in the event of such Breach and rental
adjustment, (i) the purchase price of any option to purchase the Premises held
by Lessee shall be subject to similar adjustment to the then fair market value
as reasonably determined by Lessor (without the Lease being considered an
encumbrance or any deduction for depreciation or obsolescence, and considering
the Premises at its highest and best use and in good condition) or one hundred
ten percent (110%) of the price previously in effect, (ii) any index-oriented
rental or price adjustment formulas contained in this Lease shall be adjusted to
require that the base index be determined with reference to the index applicable
to the time of such adjustment, and (iii) any fixed rental adjustments scheduled
during the remainder of the Lease term shall be increased in the same ratio as
the new rental bears to the Base Rent in effect immediately prior to the
adjustment specified in Lessor's Notice.
(e) Lessee's remedy for any breach of this Paragraph 12.1 by Lessor
shall be limited to compensatory damages and/or injunctive relief.
12.2 Terms and Conditions Applicable to Assignment and Subletting.
(a) Regardless of Lessor's consent, any assignment or
subletting shall not (i) be effective without the express written assumption by
such assignee or sublessee of the obligations of Lessee under this Lease, (ii)
release Lessee of any obligations hereunder, nor (iii) alter the primary
liability of Lessee for the payment of Base Rent and other sums due Lessor
hereunder or for the performance of any other obligations to be performed by
Lessee under this Lease.
(b) Lessor may accept any rent or performance of Lessee's
obligations from any person other than Lessee pending approval or disapproval of
an assignment. Neither a delay in the approval or disapproval of such assignment
15
nor the acceptance of any rent for performance shall constitute a waiver or
estoppel of Lessor's right to exercise its remedies for the Default or Breach
by Lessee of any of the terms, covenants or conditions of this Lease.
(c) The consent of Lessor to any assignment or subletting
shall not constitute a consent to any subsequent assignment or subletting by
Lessee or to any subsequent or successive assignment or subletting by the
assignee or subleasee. However, Lessor may consent to subsequent sublettings and
assignments of the sublease or any amendments or modifications thereto without
notifying Lessee or anyone else liable under this Lease or the sublease and
without obtaining their consent, and such action shall not relieve such persons
from liability under this Lease or the sublease.
(d) In the event of any Default or Breach of Lessee's
obligation under this Lease, Lessor may proceed directly against Lessee, any
Guarantors or anyone else responsible for the performance of the Lessee's
obligations under this Lease, including any sublessee, without first exhausting
Lessor's remedies against any other person or entity responsible therefor to
Lessor, or any security held by Lessor.
(Also see Addendum Section 12.2(e).)
(f) Any assignee of, or sublessee under, this Lease shall, by
reason of accepting such assignment or entering into such sublease, be deemed,
for the benefit of Lessor, to have assumed and agreed to conform and comply with
each and every term, covenant, condition and obligation herein to be observed or
performed by Lessee during the term of said assignment or sublease, other than
such obligations as are contrary to or inconsistent with provisions of an
assignment or sublease to which Lessor has specifically consented in writing.
(g) The occurrence of a transaction described in Paragraph
12.2(c) shall give Lessor the right (but not the obligation) to require that the
Security Deposit be increased by an amount equal to six (6) times the then
monthly Base Rent, and Lessor may make the actual receipt by Lessor of the
Security Deposit increase a condition to Lessor's consent to such transaction.
(Also see Addendum Section 12.2(i).)
12.3 Additional Terms and Conditions Applicable to Subletting. The
following terms and conditions shall apply to any subletting by Lessee of all
any part of the Premises and shall be deemed included in all subleases under
this Lease whether or not expressly incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all of
Lessee's interest in all rentals and income arising from any sublease of all or
a portion of the Premises heretofore or hereafter made by Lessee, and Lessor may
collect such rent and income and apply same toward Lessee's obligations under
this Lease; provided, however, that until a Breach (as defined in Paragraph
13.1) shall occur in the performance of Lessee's obligations under this Lease,
Lessor may, except as otherwise provided in this Lease, receive, collect and
enjoy the rents accruing under such sublease. Lessor shall not, by reason of the
foregoing provision or any other assignment of such sublease to Lessor, nor by
reason of the collection of the rents from a sublessee, be deemed liable to the
sublessee for any failure of Lessor to perform and comply with any of Lessee's
obligations to such subleases under such Sublease. Lessee hereby irrevocably
authorizes and directs any such subleases, upon receipt of a written notice from
Lessor stating that a Breach exists in the performance of Lessee's obligations
under this Lease, to pay to Lessor the rents and other charges due and to become
due under the sublease. Sublessee shall rely upon any such statement and request
from Lessor and shall pay such rents and other charges to Lessor without any
obligation or right to inquire as to whether such Breach exists and
notwithstanding any notice from or claim from Lessee to the contrary.
16
Lessee shall have no right or claim against such sublessee, or, until the Breach
has been cured, against Lessor, for any such rents and other charges so paid by
said sublessee to Lessor.
(b) In the event of a Breach by Lessee In the performance of its
obligations under this Lease, Lessor, at its option and without any obligation
to do so, may require any subleases to attorn to Lessor, in which event Lessor
shall undertake the obligations of the sublessor under such sublease from the
time of the exercise of said option to the expiration of such sublease;
provided. however, Lessor shall not be liable for any prepaid rents or security
deposit paid by such sublessee to such sublessor or (or any other prior defaults
or breaches of such sublessor under such sublease.
(c) Any matter or thing requiring the consent of the sublessor
under a sublease shall also require the consent of Lessor herein.
(d) No sublessee under a sublease approved by Lessor shall
further assign or sublet all or any part of the Premises without Lessor's prior
written consent.
[DELETE PARAGRAPH 12.3(e).
13. Default; Breach; Remedies.
13.1 Default; Breach. Lessor and Lessor agree that if an attorney is
consulted by Lessor in connection with a Lessee Default or Breach (as
hereinafter defined), $350.00 is a reasonable minimum sum per such occurrence
for legal services and costs in the preparation and service of a notice of
Default, and that Lessor may include the cost of such services and costs in said
notice as rent due and payable to cure said default. A "Default" by Lessee is
defined as a failure by Lessee to observe, comply with or perform any of the
terms, covenants, conditions or rules applicable to Lessee under this Lease. A
"Breach" by Lessee is defined as the occurrence of any one or more of the
following Defaults, and, where a grace period for cure after notice is specified
herein, the failure by Lessee to cure such Default prior to the expiration of
the applicable grace period, and shall entitle Lessor to pursue the remedies set
forth in Paragraphs 13.2 and/or 13.3:
(a) The vacating of the Premises without the intention to
reoccupy same, or the abandonment of the Premises.
(b) Except as expressly otherwise provided in this Lease, the
failure by Lessee to make any payment of Base Rent, Lessee's Share of Common
Area Operating Expenses, or any other monetary payment required to be made by
Lessor hereunder as and when due, the failure by Lessor to provide Lessor with
reasonable evidence of insurance or surety bond required under this Lease, or
the failure of Lessee to fulfill any obligation under this Lease which endangers
or threatens life or property, where such failure continues for a period of
three (3) days following written notice thereof by or on behalf of Lessor to
Lessee.
(c) Except as expressly otherwise provided in this Lease, the
failure by Lessee to provide Lessor with reasonable written evidence (in duly
executed original form, if applicable) of (i) compliance with Applicable
Requirements per Paragraph 6.3. (ii) the inspection, maintenance and service
contracts required under Paragraphs 7.1(b), (iii) the rescission of an
unauthorized assignment or subletting per Paragraph 12.1, (iv) a Tenancy
Statement per Paragraphs 16 or 37, (v) the subordination or non-subordination of
this Lease per Paragraph 30, (vi) its guaranty of the performance of Lessee's
obligations under this Lease if required under Paragraphs 1.11 and 37, (vii) the
execution of any document requested under Paragraph 42 (easements), or (viii)
any other documentation or information which Lessor may reasonably require of
Lessee under the terms of this lease, where any such failure continues for a
period of ten (10) days following written notice by or on behalf of Lessor to
Lessee.
(d) A Default by Lessee as to the terms, covenants, conditions
or provisions of this Lease, or of the rules adopted under Paragraph 40 hereof
that are to be observed, complied with or performed by Lessee, other than those
described in Subparagraphs 13.1 (a), (b) or (c), above, where such Default
continues for a period of thirty (30) days after written notice thereof by or on
behalf of Lessor to Lessee, provided, however, that if the nature of Lessee's
Default is such that more than thirty (30) days are reasonably required for its
cure, then it shall not be deemed to be a Breach of this Lease by
17
Lessee if Lessee commences such cure within said thirty (30) day period and
thereafter diligently prosecutes such cure to completion.
(e) The occurrence of any of the following events: (i) the making by
Lessee of any general arrangement or assignment for the benefit of creditors;
(ii) Lessee's becoming a "debtor" as defined in 11 U.S. Code Section 101 of any
successor statute thereto (unless, in the case of a petition filed against
Lessee, the same is dismissed within sixty (60) days); (iii) the appointment of
a trustee or receiver to take possession of substantially all of Lessee's assets
located at the Premises or of Lessee's interest in this Lease, where possession
is not restored to Lessee within thirty (30) days; or (iv) the attachment,
execution or other judicial seizure of substantially all of Lessee's assets
located at the Premises or of Lessee's interest in this Lease, where such
seizure is not discharged within thirty (30) days; provided, however, in the
event that any provision of this Subparagraph 13.1(e) is contrary to any
applicable law, such provision shall be of no force or effect, and shall not
affect the validity of the remaining provisions.
(f) The discovery by Lessor that any financial statement of Lessee
or of any Guarantor, given to Lessor by Lessee or any Guarantor, was materially
false.
(g) If the performance of Lessee's obligations under this Lease is
guaranteed: (i) the death of a Guarantor, (ii) the termination of a Guarantor's
liability with respect to this Lease other than in accordance with the terms of
such guaranty, (iii) a Guarantor's becoming insolvent or the subject of a
bankruptcy filing, or (iv) a Guarantor's refusal to honor the guaranty, or (v) a
Guarantor's breach of its guaranty obligation on an anticipatory breach basis,
and Lessee's failure, within sixty (60) days renewing written notice by or on
behalf of Lessor to Lessee of any such event, to provide Lessor with written
alternative assurances of security, which, when coupled with the then existing
resources of Lessee, equals or exceeds the combined financial resources of
Lessee and the Guarantors that existed at the time of execution of this Lease.
13 2 Remedies. If Lessee fails to perform any affirmative duty or
obligation of Lessee under this Lease, within ten (10) days after written notice
to Lessee (or in case of an emergency, without notice), Lessor may at its option
(but without obligation to do so), perform such duty or obligation on Lessee's
behalf, including but 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 Lessor shall be due and payable by
Lessee to Lessor upon invoice therefor. If any check given to Lessor by Lessee
shall not be honored by the bank upon which it is drawn, Lessor, at its own
option, may require all future payments to be made under this Lease by Lessor to
be made only by cashier's check. In the event of a Breach of this Lease by
Lessee (as defined In Paragraph 13.1), with or without further notice or demand,
and without limiting Lessor in its exercise of any right or remedy which Lessor
may have by reason of such Breach, Lessor may:
(a) Terminate Lessee's right to possession of the Premises by any
lawful means, in which case this Lease and the term hereof shall terminate and
Lessee shall immediately surrender possession of the Premises to Lessor. In such
event Lessor shall be entitled to recover from Lessee: (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 Lessee 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 Lessee proves could be
reasonably avoided; and (iv) any other amount necessary to compensate Lessor for
all the detriment proximately caused by the Lessee'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 any leasing commission paid by Lessor in connection with this Lease
applicable to the unexpired term of this Lease. The worth at the time of award
of the amount referred to in provision (iii) of the immediately preceding
sentence shall be computed by discounting such amount at the discount rate of
the Federal Reserve Bank of San Francisco or the Federal Reserve Bank District
in which the Premises are located at the time of award plus one percent (1%).
Efforts by Lessor to mitigate damages caused by Lessee's Default or Breach of
this Lease shall not waive Lessor's right to recover damages under this
Paragraph 13.2. If termination of this Lease is obtained through the provisional
remedy of unlawful detainer, Lessor shall have the right to recover in such
proceeding the unpaid rent and damages as are recoverable therein, or Lessor may
reserve 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 Subparagraph
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 Lessee under any statute
authorizing the forfeiture of leases for unlawful detainer shall also constitute
the
18
applicable notice for grace period purposes required by Subparagraph 13.1 (b),
(c) or (d). In such case, the applicable grace period under the unlawful
detainer status shall run concurrently after the one such statutory notice. and
the failure of Lessee to cure the Default within the greater of the two (2) such
grace periods shall constitute both an unlawful detainer and a Breach of this
Lease entitling Lessor to the remedies provided for in this Lease and/or by said
statute.
(b) Continue the Lease and Lessee's right to possession in effect (in
California under California Civil Code Section 1951.4) after Lessee's Breach and
recover the rent as it becomes due, provided Lessee has the right to sublet or
assign, subject only to reasonable limitations. Lessor and Lessee agree that the
limitations on assignment and subletting in this Lease are reasonable. Acts of
maintenance or preservation, efforts to relet the Premises, or the appointment
of a receiver to protect the Lessor's interest under this Lease, shall not
constitute a termination of the Lessee's right to possession.
(c) Pursue any other remedy now or hereafter available to Lessor under the
laws or judicial decisions of the state wherein the Premises are located.
(d) The expiration of termination of this Lease and/or the termination of
Lessee's right to possession shall not relieve Lessee from liability under any
Indemnify provisions of this Lease as to matters occurring or accruing during
the term hereof for by reason of Lessee's occupancy of the Premises.
13.3 Inducement Recapture in Event of Breach. Any agreement by Lessor for
free or abated rent or other charges applicable to the Premises, or for the
giving or paying by Lessor to or for Lessee of any cash or other bonus,
inducement or consideration for Lessee's entering into this Lease, all of which
concessions are hereinafter referred to as "Inducement Provisions" shall be
deemed conditioned upon Lessee's full and faithful performance of all of the
terms, covenants and conditions of this Lease to be performed or observed by
Lessee during the term hereof as the same may be extended. Upon the occurrence
of a Breach (as defined in Paragraph 13.1) of this Lease by Lessee, any such
Inducement Provision shall automatically be deemed deleted from this Lease and
of no further force or effect, and any rent, other charge, bonus, inducement or
consideration theretofore abated, given or paid by Lessor under such an
Inducement Provision shall be immediately due and payable by Lessee to Lessor,
and recoverable by Lessor, as additional rent due under this Lease,
notwithstanding any subsequent cure of said Breach by Lessee. The acceptance by
Lessor of rent or the cure of the Breach which initiated the operation of this
Paragraph 13.3 shall not be deemed a waiver by Lessor of the provisions of this
Paragraph 13.3 unless specifically so stated in writing by Lessor at the time of
such acceptance.
13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee
to Lessor of rent and other sums due hereunder will cause Lessor to incur costs
not contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to, processing
and accounting charges, and late charges which may be imposed upon Lessor by the
terms of any ground lease, mortgage or deed of trust covering the Premises.
Accordingly, if any installment of rent or other sum due from Lessee shall not
be received by Lessor or Lessor's designee within ten (10) days after such
amount shall be due, then, without any requirement for notice to Lessee, Lessee
shall pay to Lessor a late charge equal to six percent(6%) of such overdue
amount. The parties hereby agree that such late charge represents a fair and
reasonable estimate of the costs Lessor will incur by reason of late payment by
Lessee. Acceptance of such late charge by Lessor shall in no event constitute a
waiver of Lessee's Default or Breach with respect to such overdue amount, nor
prevent Lessor from exercising any of their rights and remedies granted
hereunder. In the event that a late charge is payable hereunder, whether or not
collected, for three (3) consecutive installments of Base Rent, the
notwithstanding Paragraph 4.1 or any other provision of this Lease to the
contrary, Base Rent shall, at Lessor's option, become due and payable quarterly
in advance. (Also see Addendum Section 13.4)
13.5 Breach by Lessor. Lessor shall not be deemed in breach of this Lease
unless Lessor fails within a reasonable time to perform an obligation required
to be performed by Lessor. For purposes of this Paragraph 13.5, a reasonable
time shall in no event be less than thirty (30) days after receipt by Lessor,
and by any Lender(s) whose name and address shall have been furnished to Lessee
in writing for such purpose, of written notice specifying wherein such
obligation of Lessor has not been performed; provided, however, that if the
nature of Lessor's obligation is such that more than thirty (30) days after
such notice are reasonably required for its performance, then Lessor shall not
be in breach of this Lease if performance is commenced within such thirty (30)
day period and thereafter diligently pursued to completion.
.
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 ten
19
percent (10%) of the floor area of the Premises, or more than twenty-five-
percent (25%) of the portion of the Common Areas designated for Lessee's
parking, is taken by condemnation, Lessee may, at Lessee's option, to be
exercised in writing within ten (10) days after Lessor shall have given Lessee
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 Lessee
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 Base Rent shall be reduced in the same proportion as the
rentable floor area of the Premises taken bears to the total rentable floor area
of the Premises. No reduction of Base Rent shall occur if the condemnation does
not apply to any portion of the Premises. 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 Lessor, whether
such award shall be made as compensation for diminution of value of the
leasehold or for the taking of the fee, or as severance damages; provided,
however, that Lessee shall be entitled to any compensation, separately awarded
to Lessee for Lessee's relocation expenses and/or loss of Lessee's Trade
Fixtures. In the event that this Lease is not terminated by reason of such
condemnation, Lessor shall to the extent of its net severance damages received,
over and above Lessee's Share of the legal and other expenses incurred by
Lessor in the condemnation matter, repair any damage to the Premise caused by
such condemnation authority. Lessee shall be responsible for the payment of any
amount in excess of such net severance damages required to complete such repair.
15. Brokers' Fees.
15.1 Procuring Cause. The Broker(s) named in Paragraph 1.10 is/are the
procuring cause of this Lease.
DELETE PARAGRAPH 15.2 ABOVE.
DELETE PARAGRAPH 15.3 ABOVE.
15.4 Representations and Warranties. Lessee and Lessor each represent and
warrant to the other that it has had no dealings with any person, firm, broker
or finder other than as named in Paragraph 1.10(a) in connection with the
negotiation of this Lease and/or the consummation of the transaction
contemplated hereby, and that no broker or other person, firm or entity other
than said named Broker(s) is entitled to any commission or finder's fee in
connection with said transaction. Lessee and Lessor do each hereby agree to
indemnify, protect, defend and hold the other harmless from and against
liability for compensation 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, including any costs, expenses, and/or attorneys' fees
reasonably incurred with respect thereto.
16. Tenancy and Financial Statements.
16.1 Tenancy Statement. Each Party (as "Responding Party") shall within
ten (10) days after written notice from the other Party (the "Requesting Party")
execute, acknowledge and deliver to the Requesting Party a statement in writing
in a form similar to the then most current "Tenancy Statement" form published by
the American Industrial Real Estate Association (ALSO REFER TO ATTACHED
EXHIBIT E), plus such additional information, confirmation and/or statements as
may be reasonably requested by the Requesting Party.
16.2 Financial Statement. If Lessor desires to finance, refinance, or sell
the Premises or the Building, or any part thereof, Lessee and all Guarantors
shall deliver to any potential lender or purchaser designated by Lessor such
financial
20
statements of Lessee and such Guarantors as may be reasonably required by such
lender or purchaser, including but not limited to Lessee's financial statements
for the past three (3) years. All such financial statements shall be received by
Lessor and such lender or purchaser in confidence and shall be used only for the
purposes herein set forth.
17. Lessor's Liability. The term oLessoro as used herein shall mean the owner
or owners at the time in question of the fee title to the Premises. In the event
of a transfer of Lessor's title or interest in the Premises or in this Lease,
Lessor shall deliver to the transferee or assignee (in cash or by credit) any
unused Security Deposit held by Lessor at the time of such transfer or
assignment. Except as provided in Paragraph 15.3, upon such transfer or
assignment and delivery of the Security Deposit, as aforesaid, the prior Lessor
shall be relieved of all liability with respect to the obligations and/or
covenants under this Lease thereafter to be performed by the Lessor. Subject to
the foregoing, the obligations and/or covenants in this Lease to be performed by
the Lessor shall be binding only upon the Lessor as hereinabove defined.
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 there.
19. Interest on Past-Due Obligations. Any monetary payment due Lessor
hereunder, other than late charges, not received by Lessor within ten (10) days
following the date on which it was due, shall bear interest from the date due at
the prime rate charged by the largest state chartered bank in the state in which
the Premises are located plus four percent (4%) per annum, but not exceeding the
maximum rate allowed by law, in addition to the potential late charge provided
for in Paragraph 13.4.
20. Time of Essence. Time is of the essence with respect to the performance of
all obligations to be performed or observed by the Parties under this Lease.
21. Rent Defined. All monetary obligations of Lessee to Lessor under the terms
of this Lease are deemed to be rent.
22. No Prior or other Agreements; Broker Disclaimer. This Lease contains all
agreements between the Parties with respect to any matter mentioned herein, and
no other prior or contemporaneous agreement or understanding shall be effective.
Lessor and Lessee each represents and warrants to the Brokers that it has made,
and is relying solely upon, its own investigation as to the nature, quality,
character and financial responsibility of the other Party to this Lease and as
to the nature, quality and character of the Premises. Brokers have no
responsibility with respect thereto or with respect to any default or breach
hereof by either Party. Each Broker shall be an intended third party beneficiary
of the provisions of this Paragraph 22.
23. Notices.
23.1 Notice Requirements. All notices required or permitted by this Lease
shall be in writing and may be delivered in person (by hand or by messenger or
courier service) or may be sent by regular, certified or registered mail or U.S.
Postal Service Express Mail, with postage prepaid, or by facsimile transmission
during normal business hours, and shall be deemed sufficiently given if served
in a manner specified in this Paragraph 23. The addresses noted adjacent to a
Party's signature on this Lease shall be that Party's address for delivery or
mailing of notice purposes. Either Party may by written notice to the other
specify a different address for notice purposes, except that upon Lessee's
taking possession of the Premises, the Premises shall constitute Lessee's
address for the purpose of mailing or delivering notices to Lessee. A copy of
all notices required or permitted to be given to Lessor hereunder shall be
concurrently transmitted to such party or parties at such addresses as Lessor
may from time to time hereafter designate by written notice to Lessee.
23.2 Date of Notice. Any notice sent by registered or certified mail,
return receipt requested, shall be deemed given on the date of delivery shown on
the receipt card, or if no delivery date is shown, the postmark thereon. If sent
by regular mail, the notice shall be deemed given forty-eight (48) hours after
the same is addressed as required herein and mailed with postage prepaid.
Notices delivered by United States Express Mail or overnight courier that
guarantees next day delivery shall be deemed given twenty-four (24) hours after
delivery of the same to the Untied States Postal Service or courier. If any
notice is transmitted by facsimile transmission or similar means, the same shall
be deemed served or delivered upon telephone or facsimile confirmation of
receipt of the transmission thereof, provided a copy is also delivered via
delivery or mail. If notice is received on a Saturday or a Sunday or a legal
holiday, it shall be deemed received on the next business day.
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24. Waivers. No waiver by Lessor of the Default or Breach of any term, covenant
or condition hereof by Lessee, shall be deemed a waiver of any other term,
covenant or condition hereof, or of any subsequent Default or Breach by Lessee
of the same or any other term, covenant or condition hereof. Lessor's consent
to, or approval of, any such act shall not be deemed to render unnecessary the
obtaining of Lessor's consent to, or approval of, any subsequent or similar act
by Lessee, or be construed as the basis of an estoppel to enforce the provision
or provisions of this Lease requiring such consent. Regardless of Lessor's
knowledge of a Default or Breach at the time of accepting rent, the acceptance
of rent by Lessor shall not be a waiver of any Default or Breach by Lessee of
any provision hereof. Any payment given Lessor by Lessee may be accepted by
Lessor on account of moneys or damages due Lessor notwithstanding any qualifying
statements or conditions made by Lessee in connection therewith, which such
statements and/or conditions shall be of no force or effect whatsoever unless
specifically agreed to in writing by Lessor at or before the time of deposit of
such payment.
25. Recording. Either Lessor or Lessee shall, upon request of the other,
execute, acknowledge and deliver to the other a short form memorandum of this
Lease for recording purposes. The Party requesting recordation shall be
responsible for payment of any fees or taxes applicable thereto.
26. No Right To Holdover. Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or earlier termination of
this Lease. In the event that Lessee holds over in violation of this Paragraph
26 then the Base Rent payable from and after the time of the expiration or
earlier termination of this Lease shall be increased to two hundred percent
(200%) of the Base Rent applicable during the month immediately preceding such
expiration or earlier termination. Nothing contained herein shall be construed
as a consent by Lessor to any holding over by Lessee.
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. All provisions of this Lease to be observed or
performed by Lessee are both covenants and conditions.
29. Binding Effect; Choice of Law. This Lease shall be binding upon the
Parties, their personal representatives, successors and assigns and be governed
by the laws of the State in which the Premises are located. Any litigation
between the Parties hereto concerning this Lease shall be initiated in the
county in which the Premises are located.
30. Subordination; Attornment; Non-Disturbance.
30.1 Subordination. This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or other
hypothecation or security device (collectively, "Security Device"), now or
hereafter placed by Lessor upon the real property of which the Premises are a
part, to any and all advances made on the security thereof, and to all renewals,
modifications, consolidations, replacements and extensions thereof. Lessee
agrees that the Lenders holding any such Security Device shall have no duty,
liability or obligation to perform any of the obligations of Lessor under this
Lease, but that in the event of Lessor's default with respect to any such
obligation, Lessee will give any Lender whose name and address have been
furnished Lessee in writing for such purpose notice of Lessor's default
pursuant to Paragraph 13.5. If any Lender shall elect to have this Lease and/or
any Option granted hereby superior to the lien of its Security Device and shall
give written notice thereof to Lessee, 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, Lessee agrees to attorn to a Lender or any other 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 lessor or with respect to events occurring
prior to acquisition of ownership, (ii) be subject to any offsets or defenses
which Lessee might have against any prior lessor, or (iii) be bound by
prepayment of more than one month's rent.
30.3 Non-Disturbance. With respect to Security Devices entered into by
Lessor after the execution of this lease, Lessee's subordination of this Lease
shall be subject to receiving assurance (a "non-disturbance agreement") from the
Lender that Lessee's possession and this Lease, including any options to extend
the term hereof, will not be disturbed so long as Lessee is not in Breach hereof
and attorns to the record owner of the Premises.
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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 Lessor or a Lender in connection with a sale,
financing or refinancing of Premises, Lessee and Lessor shall execute such
further writings as may be reasonably required to separately document any such
subordination or non-subordination, attornment and/or non-disturbance agreement
as is provided for herein.
31. Attorneys' Fees. If any Party or Broker brings an action or proceeding to
enforce the terms hereof or declare rights hereunder, the Prevailing Party (as
hereafter defined) in any such proceeding, action, or appeal thereon, shall be
entitled to reasonable attorneys' fees. Such fees 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 or Broker who substantially obtains or defeats the
relief sought, as the case may be, whether by compromise, settlement, judgment,
or the abandonment by the other Party or Broker of its claim or defense. The
attorneys' fee award shall not be computed in accordance with any court fee
schedule, but shall be such as to fully reimburse all attorneys' fees
reasonably incurred. Lessor shall be entitled to attorneys' fees, costs and
expenses incurred in 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 or resulting Breach.
Broker(s) shall be intended third party beneficiaries of this Paragraph 31.
32. Lessor's Access; Showing Premises; Repairs. Lessor and Lessor's agents
shall have the right to enter the Premises at any time, in the case of an
emergency, and otherwise at reasonable times for the purpose of showing the same
to prospective purchasers, lenders, or lessees, and making such alterations,
repairs, improvements or additions to the Premises or to the Building, as Lessor
may reasonably deem necessary. Lessor may at any time place on or about the
Premises or Building any ordinary "For Sale" signs and Lessor may at any time
during the last two hundred seventy (270) days of the term hereof place on or
about the Premises any ordinary "For Lease" signs. All such activities of Lessor
shall be without abatement of rent or liability to Lessee.
33. Auctions. Lessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises without first having
obtained Lessor's prior written consent. Notwithstanding anything to the
contrary in this Lease, Lessor shall not be obligated to exercise any standard
of reasonableness in determining whether to grant such consent.
34. Signs. Lessee shall not place any sign upon the exterior of the Premises or
the Building, except that Lessee may, with Lessor's prior written consent,
install (but not on the roof) such signs as are reasonably required to advertise
Lessee's own business so long as such signs are in a location designated by
Lessor and comply with Applicable Requirements and the signage criteria
established for the Industrial Center by Lessor. The installation of any sing on
the Premises by or for Lessee shall be subject to the provisions of Paragraph 7
(Maintenance, Repairs, Utility Installations, Trade Fixtures and Alterations).
Unless otherwise expressly agreed herein, Lessor reserves all rights to the use
of the roof of the Building, and the right to install advertising signs on the
Building, including the roof, which do not unreasonably interfere with the
conduct of Lessee's business; Lessor shall be entitled to all revenues from
such advertising signs. (ALSO SEE ADDENDUM SECTION 34.)
35. Termination; Merger. Unless specifically stated otherwise in writing by
Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach
by Lessee, shall automatically terminate any sublease or lesser estate in the
Premises; provided, however, Lessor shall, in the event of any such surrender,
termination or cancellation, have the option to continue any one or all of any
existing subtenancies. Lessor's failure within ten (10) days following any such
event to make a written election to the contrary by written notice to the holder
of any such lesser interest, shall constitute Lessor's election to have such
event constitute the termination of such interest.
36. Consents.
(a) Except for Paragraph 33 hereof (Auctions) or as otherwise provided
herein, wherever in this Lease the consent of a Party is required to an act by
or for the other Party, such consent shall not be unreasonably withheld or
delayed. Lessor's actual reasonable costs and expenses (including but not
limited to architects', attorneys', engineers' and other consultants' fees)
incurred in the consideration of, or response to, a request by Lessee for any
Lessor consent pertaining to this Lease or the Premises, including but not
limited to consents to an assignment a subletting or the presence or use of a
Hazardous Substance, shall be paid by Lessee to Lessor upon receipt of an
invoice and supporting documentation therefor. In addition to the deposit
described in Paragraph 12.2(e), Lessor may, as a condition to considering any
such request by
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Lessee, require that Lessee deposit with Lessor an amount of money (in addition
to the Security Deposit held under Paragraph 5) reasonably calculated by Lessor
to represent the cost Lessor will incur in considering and responding to
Lessee's request. Any unused portion of said deposit shall be refunded to
Lessee without interest. Lessor's consent to any act, assignment of this Lease
or subletting of the Premises by Lessee shall not constitute an acknowledgment
that no Default or Breach by Lessee of this Lease exists, nor shall such consent
be deemed a waiver of any then existing Default or Breach, except as may be
otherwise specifically stated in writing by Lessor at the time of such consent.
(b) All conditions to Lessor's consent authorized by this Lease are
acknowledged by Lessee as being reasonable. The failure to specify herein any
particular condition to Lessor's consent shall not preclude the impositions by
Lessor at the time of consent of such further or other conditions as are then
reasonable with reference to the particular matter for which consent is being
given.
37. Guarantor.
37.1 Form of Guaranty. If there are to be any Guarantors of this Lease per
Paragraph 1.11, the form of the guaranty to be executed by each such
Guarantor shall be in the form most recently published by the American
Industrial Real Estate Association, and each such Guarantor shall have the
same obligations as Lessee under this lease, including but not limited to
the obligation to provide the Tenancy Statement and information required in
Paragraph 16.
37.2 Additional Obligations of Guarantor. It shall constitute a Default of
the Lessee under this Lease if any such Guarantor fails or refuses, upon
reasonable request by Lessor to give: (a) evidence of the due execution of
the guaranty called for by this Lease, including the authority of the
Guarantor (and of the party signing on Guarantor's behalf) to obligate
such Guarantor on said guaranty, and resolution of its board of directors
authorizing the making of such guaranty, together with a certificate of
incumbency showing the signatures of the persons authorized to sign on its
behalf, (b) current financial statements of Guarantor as may from time to
time be requested by Lessor, (c) a Tenancy Statement, or (d) written
confirmation that the guaranty is still in effect.
38. Quiet Possession. Upon payment by Lessee of the rent for the Premises and
the performance of all of the covenants, conditions and provisions on Lessee's
part to be observed and performed under this Lease, Lessee shall have quiet
possession of the Premises for the entire term hereof subject to all of the
provisions of this Lease.
39. Options.
39.1 Definition. As used in this Lease, the word "Option" has the
following meaning: (a) the right to extend the term of this Lease or to renew
this Lease or to extend or renew any lease that Lessee has on other property of
Lessor; (b) the 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 Lessor or the right of first offer to lease other property of
Lessor; (c) the right 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 to purchase other property of Lessor, or the right of first refusal to
purchase other property of Lessor, or the right of first offer to purchase other
property of Lessor.
39.2 Options Personal to Original Lessee. Each Option granted to Lessee in
this Lease is personal to the original Lessee named in Paragraph 1.1 hereof, and
cannot be voluntarily or involuntarily assigned or exercised by any person or
entity other than said original Lessee while the original Lessee is in full and
actual possession of the Premises and without the intention of thereafter
assigning or subletting. The Options, if any, herein granted to Lessee are not
assignable, either as a part of an assignment of this Lease or separately or
apart therefrom, and no Option may be separated from this Lease in any manner,
by reservation or otherwise.
39.3 Multiple Options. In the event that Lessee has any multiple Options
to extend or renew this Lease, a later option cannot be exercised unless the
prior Options to extend or renew this Lease have been validly exercised.
39.4 Effect of Default on Options.
(a) Lessee shall have no right to exercise an Option,
notwithstanding any provision in the grant of Option to the contrary: (i) during
the period commencing with the giving of any notice of Default under Paragraph
13.1 and
24
continuing until the noticed Default is cured, or (ii) during the period of time
any monetary obligation due Lessor from Lessee is unpaid (without regard to
whether notice thereof is given Lessee), or (iii) during the time Lessee is in
Breach of this Lease, or (iv) in the event that Lessor has given to Lessor three
(3) or more notices of separate Defaults under Paragraph 13.1 the twelve (12)
months period immediately preceding the exercise of the Option, whether or not
the Defaults are cured.
(b) The period of time within which an Option may be exercised shall
not be extended or enlarged by reason of Lessee's inability to exercise an
Option because of the provisions of Paragraph 39.4(a).
(c) All rights of Lessee under the provisions of an Option shall
terminate and be of no further force or effect, notwithstanding Lessee's due and
timely exercise of the Option, if, after such exercise and during the term of
this Lease, (i) Lessor fails to pay to Lessor a monetary obligation of Lessee
for a period of thirty (30) days after such obligation becomes due (without any
necessity at Lessor to give notice thereof to Lessee), or (ii) Lessor gives to
Lessee three (3) or more notices of separate Defaults under Paragraph 13.1
during any twelve (12) month period, whether or not the Defaults are cured, or
(iii) it Lessee commits a Breach of this Lease.
40. Rules and Regulations. Lessee agrees that it will abide by, and keep and
observe all reasonable rules and regulations ("Rules and Regulations") which
Lessor may make from time to time for the management, safety, care, and
cleanliness of the grounds, the parking and unloading of vehicles and the
preservation of good order, as well as for the convenience of other occupants or
tenants of the Building and the Industrial Center and their invitees.
41. Security Measures. Lessor hereby acknowledges that the rental payable to
Lessor hereunder does not include the cost of guard service or other security
measures, and that Lessor shall have no obligation whatsoever to provide same.
Lessee assumes all responsibility for the protection of the Premises, Lessee,
its agents and invitees and their property from the acts of third parties.
42. Reservations. Lessor reserves the right, from time to time, to grant,
without the consent or joinder of Lessee, such easements, rights of way, utility
raceways, and dedications that Lessor deems necessary, and to cause the
recordation of parcel maps and restrictions, so long as such easements, right of
ways, utility raceways, dedications, maps and restrictions do not reasonably
interfere with the use of the Premises by Lessee. Lessee agrees to sign any
documents reasonably requested by Lessor to effectuate any such easement rights,
dedication, map or restrictions.
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 either Party hereto 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 its behalf. If Lessor is a corporation, trust or
partnership, Lessee shall, within thirty (30) days after request by Lessor,
deliver to Lessor evidence satisfactory to Lessor of such authority.
45. Conflict. Any conflict between the printed provisions of this Lease and the
typewritten or handwritten provisions shall be controlled by the typewritten or
handwritten provisions.
46. Offer. Preparation of this Lease by either Lessee or Lessor or Lessor's
agent or Lessee's agent and submission of same to Lessee or Lessor shall not be
deemed an offer to lease. This Lease is not intended to be binding until
executed and delivered by all Parties hereto.
47. Amendments. This Lease may be modified only in writing, signed by the
parties in interest at the time of the modification. The Parties shall amend
this Lease from time to time to reflect any adjustments that are made to the
Base Rent or other rent payable under this Lease. As long as they do not
materially change Lessee's obligations hereunder, Lessee agrees to make such
reasonable non-monetary modifications to this Lease as may be reasonably
required by an institutional insurance company or pension plan Lender in
connection with the obtaining of normal financing or refinancing of the property
of which the Premises are a part.
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10. Multiple Parties. Except as otherwise expressly provided herein, if more
than one person or entity is named herein as either Lessor or Lessee, the
obligations of such multiple parties shall be the joint and several
responsibility of all persons or entities named herein as such Lessor or
Lessee.
49. NO PETS. Lessee shall not keep or permit to be kept any pets within the
-------
Premises, Common Areas, or Industrial Center at any time.
(THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.)
26
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN, AND BY THE 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 LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.
IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN PREPARED FOR YOUR
ATTORNEY'S REVIEW AND APPROVAL. FURTHER, EXPERTS SHOULD BE CONSULTED
TO EVALUATE THE CONDITION OF THE PROPERTY FOR THE POSSIBLE PRESENCE OF
ASBESTOS, UNDERGROUND STORAGE TANKS OR HAZARDOUS SUBSTANCES. NO
REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL
REAL ESTATE ASSOCIATION OR BY THE REAL ESTATE BROKERS OR THEIR
CONTRACTORS, AGENTS OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL
EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH
IT RELATES; THE PARTIES SHALL RELY SOLELY UPON THE ADVICE OF THEIR OWN
COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE. IF THE
SUBJECT PROPERTY IS IN A STATE OTHER THAN CALIFORNIA, AN ATTORNEY FROM
THE STATE WHERE THE PROPERTY IS LOCATED SHOULD BE CONSULTED.
The parties hereto have executed this Lease at the place and on the
date specified above their respective signatures.
Executed at: LESSOR'S OFFICE Executed at:
on: on:
By LESSOR: By LESSEE:
Livermore Airway Business Park Intek Information, Inc.,
a California limited partnership a Delaware corporation
By: /s/ Xxxxxxxx X. Xxxx By: /s/ Xxxxx Xxxxxxxx
Xxxxxxxx X. Xxxx, General Partner Xxxxx Xxxxxxxx
Title: General Partner Title: Chief Operating Officer
By: By:
Name Printed: Name Printed:
Title: Title:
Address: 0000 Xxxxx Xxxx., #000
Xxxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
PROPERTY MANAGEMENT OFFICE: 0000 Xxxxx Xxxx Xx., Tax I.D.#
Xxxxx 000, Xxxxxxxxx, XX 00000
Tel: (000) 000-0000 Fax: (000) 000-0000
BROKER: BROKER:
Executed at: Executed at:
on: on:
By: By:
Name Printed: Name Printed:
Title: Title:
Address: Address:
Telephone: ( ) Telephone: ( )
Facsimile: ( ) Facsimile: ( )
NOTE: These forms are often modified to meet changing requirements of law and
needs of the industry. Always write or call to make sure you are utilizing the
most current form: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 345 so.
Xxxxxxxx St., M-`1, Xxx Xxxxxxx, XX 00000. (000) 000-0000.
27
Addendum To That Certain Standard Industrial/Commercial Multi-Tenant Lease-
Modified Net Dated January 30, 1999, By And Between Livermore Airway Business
Park, L.P., A California Limited Partnership, As Lessor, And Intek Information,
Inc., A Delaware Corporation, As Lessee
1.2(a) Premises. That certain portion of the Building (defined below),
--------
including all Tenant Improvements (defined below) to be constructed therein by
Lessor under the terms of this Lease, commonly known by the street address of
___________ Xxxxxxxxx Xxxxxx, Xxxxx 000, located in the City of Livermore,
County of Alameda, State of California, with the zip code 94550, as outlined on
Exhibit A attached hereto ("Premises"). For purposes of this Lease, the
following terms shall have the meanings set forth below:
(i) "Building" shall mean that certain building shell consisting
of approximately forty-two thousand five hundred eight (42,508) rentable square
feet, to be constructed by Lessor on that certain real property located on
Xxxxxxxxx Street, as more particularly described on Exhibit B attached hereto,
in the approximate location shown on the site plan attached hereto as Exhibit C
("Site Plan").
(ii) "Tenant Improvements" shall mean the leasehold improvements
to be constructed by Lessor in the Premises in accordance with the Improvement
Agreement attached hereto as Exhibit D.
---------
(iii) "Common Areas" shall mean, in addition to the items
described in Paragraph 2.7 of the Lease, the site improvements to be constructed
by Lessor outside the exterior of the Building, consisting of approximately two
hundred twenty (220) parking spaces, sidewalks, access driveways, landscaping
and other site improvements shown on the Site Plan or as otherwise shown on the
Final Building Plans referred to in the Improvement Agreement.
The Premises is comprised of approximately twenty-one thousand
two hundred fifty-four (21,254) rentable square feet on the first floor of the
Building.
1.3 Term.
----
(a) Original Term. The term of this Lease ("Original Term") shall be
-------------
for eight (8) years, commencing on the Commencement Date (defined in Section
1.3(b) below) and ending eight years thereafter ("Expiration Date"), unless
sooner terminated or extended pursuant to any provision hereof.
(b) Commencement Date. As used in this Lease, the term "Commencement
-----------------
Date" shall mean the date when all of the following have occurred:
(i) The construction of the Building and the Tenant Improvements
have been substantially completed in accordance with the Final Building Plans
and Final Tenant Improvement Plans (defined in the Improvement Agreement) and
the Improvement Agreement (except for punch list items which do not
substantially interfere with Lessee's access to or use of the Premises), and
Lessor has delivered to Lessee written notice of such substantial completion;
(ii) A certificate of occupancy or its equivalent has been issued
by the applicable agency of the City of Livermore to the extent required to
permit occupancy of the Premises; and
(iii) Lessor has tendered possession of the Premises to Lessee.
The preceding to the contrary notwithstanding, in the event that
Lessor is delayed in substantially completing construction of the Tenant
Improvements due to the fault or neglect of Lessee, acts of Lessee or Lessee's
agents (including, without limitation, delays caused by work done on the
Premises or any part thereof by Lessee or Lessee's agents or by acts of Lessee's
contractors or subcontractors) or delays caused by change orders requested by
Lessee or because Lessor cannot complete construction of the Tenant Improvements
until Lessee performs necessary portions of construction work it has elected or
is required to perform (collectively, "Lessee Delays"), then, provided in each
such instance Lessee has been given written notice of such applicable Lessee
Delay within ten (10) days after the date such Lessee Delay first occurs, the
Premises shall be deemed completed on the date the same would have been
completed had Lessor not incurred such Lessee Delays.
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(c) Failure to Deliver Timely Possession of Premises. Lessor makes no
-------------------------------------------------
representation or warranty as to the date by which the Premises will be
substantially completed. Except as hereinafter provided, Lessor shall not be
liable for any damage or loss incurred by Lessee for Lessor's failure for
whatever cause to deliver possession of the Premises by a particular date, nor
shall this Lease be void or voidable on account of such failure to deliver
possession of the Premises. Lessor agrees to use diligent efforts to procure all
necessary approvals and permits for construction of the Building and the
Premises. Lessor also agrees to use diligent efforts to deliver possession of
the Premises to Lessee, with all work substantially completed (subject to
punchlist items that do not substantially interfere with Lessee's access to or
use of the Premises) by the date that is eight (8) months after the date that
Lessor has received all necessary approvals and permits for the Building (the
"Estimated Delivery Date"); and Lessor agrees to apprise Lessee of any delays
which might cause the Estimated Delivery Date to occur after the Estimated
Delivery Date. The Estimated Delivery Date shall be extended by one day for each
day that Lessor is delayed in completing the Building and/or Premises, due to a
Lessee Delay or a Force Majeure Delay (defined below). For purposes of this
Lease, the term "Force Majeure Delay" shall mean any delay in the completion of
the Building and/or Premises which is caused by strikes, lockouts, labor
disputes, inability after due diligence to obtain materials, governmental
restrictions or regulations, moratorium, civil commotion, inclement weather,
fire or other acts of God or other causes beyond the reasonable control of
Lessor.
(d) Option to Extend Lease Term. Lessor hereby grants to Lessee one
----------------------------
(1) option to extend the Original Term for a period of five (5) years (the
"Extended Term"), on the following terms and conditions:
(i) Lessee shall give Lessor written notice of its exercise of
the applicable option to extend the Lease term no later than two hundred seventy
(270) days before expiration of the Original Term. Time is of the essence.
(ii) Lessee may not extend the Original Term pursuant to this
Section 1.3(d) if a Breach by Lessee (defined in Paragraph 13.1 of the Lease)
exists as of the date of Lessee's notice of exercise of the option to extend, or
if Lessee shall have assigned or sublet any of the aggregate square footage of
the Premises or otherwise transferred its interest in this Lease and/or the
Premises, whether or not Lessor's consent to such assignment or transfer has
been given. If a Breach by Lessee exists on the date that the Extended Term is
to commence, then Lessor may elect to terminate this Lease, notwithstanding any
notice given by Lessee of an exercise of its option to extend and such exercise
of Lessee's option to extend the Original Term shall be void and of no force or
effect.
(iii) All terms and conditions of this Lease shall apply during
the Extended Term, except that the Base Rent for the Extended Term shall be
determined in accordance with Section 1.5(b) of this Addendum; Lessee shall have
no further option to extend the Lease term beyond the Extended Term described in
this Section 1.3(d), and Lessor shall have no obligation to construct or install
any building shell improvements, leasehold improvements or site improvements or
provide any allowance with respect to any such improvements.
(iv) Once Lessee delivers notice of its exercise of the option to
extend the Original Term, Lessee may not withdraw such exercise and, subject to
the provisions of this Section 1.3(d), such notice shall operate to extend the
Original Term. Upon the extension of the Original Term pursuant to this Section
1.3(d), the term "Expiration Date" as used in this Lease shall thereafter mean
the expiration date of the Extended Term unless sooner terminated pursuant to
the terms hereof.
(e) Early Termination Right. Subject to the terms and conditions
-----------------------
contained in this Section 1.3(e), Lessee shall have the right to terminate this
Lease ("Termination Right") at the end of the eighty-fourth (84th) month of the
Lease term ("Early Termination Date"). Lessee may exercise the Termination Right
by giving Lessor written notice of such termination not later than the last day
of the seventy-fourth (74th) month of the Lease term. Lessee's failure to timely
exercise the Termination Right shall be deemed Lessee's waiver of the
Termination Right. If Lessee timely exercises the Termination Right, this Lease
shall terminate on the Early Termination Date, and Lessee shall surrender and
vacate the Premises in accordance with Section 7.4(c) of the Lease prior to such
date. If a Breach by Lessee exists on the date of delivery of Lessee's notice of
exercise of the Termination Right to Lessor or at any time after Lessee delivers
such notice, then Lessor may, in its sole discretion, elect either (i) to have
Lessee's exercise of the Termination Right be of no force and effect, and this
Lease shall continue and expire at the end of the Original Term, or (ii) to
treat the Lease as terminated, in which case Lessor's rights and remedies under
the Lease with respect to the Breach by Lessee shall survive the termination of
the Lease.
29
(f) Offsite Parking Condition. Lessee's obligations under this Lease
-------------------------
shall be subject to the condition that Lessee secure not less than eighty-five
(85) offsite parking spaces use by Lessee's employees and invitees on terms
satisfactory to Lessee on or before April 30, 1999 ("Offsite Parking
Condition"). Lessee shall secure such offsite parking spaces from one or more of
the following sources: (i) the Mektec Corporation facility located on Lindbergh
Avenue, (ii) the Ashmes Shriners facility on Lindbergh Avenue; and/or (iii)
street parking with the approval of the City of Livermore. Lessee shall use
diligent efforts to satisfy the Offsite Parking Condition on or before April 30,
1999. The Offsite Parking Condition shall be deemed satisfied if Lessee is able
to secure not less than eighty-five (85) offsite parking spaces at a cost not in
excess of Two Thousand Five Hundred Dollars ($2,500) per month on or before
April 30, 1999. If the Offsite Parking Condition has not been satisfied on or
before April 30, 1999, Lessee may terminate this Lease by giving written notice
to Lessor on or before April 30, 1999. If Lessee gives timely written notice of
such termination, this Lease shall terminate as of the date of Lessor's receipt
of Lessee's termination notice, the Security Deposit and first month's Base Rent
shall be returned to Lessee, and neither party shall have any further obligation
hereunder except for obligations which have accrued prior to such termination
and expressly survive the Lease.
1.5 Base Rent.
---------
(a) Base Rent. Lessee shall pay to Lessor as Base Rent for the
---------
Premises the monthly amount specified below:
Lease Month Amount Per Month
----------- ----------------
1 - 12 $25,930
13 - 24 $26,440
25 - 36 $26,971
37 - 48 $28,055
49 - 60 $29,182
61 - 72 $30,351
73 - 84 $31,753
85 - 96 $31,881
The Base Rent set forth above shall be subject to adjustment in accordance
with Section 12(B) of the Improvement Agreement.
(b) Time of Payment. Lessee shall pay the Base Rent to Lessor each
---------------
month in advance on the first day of each calendar month, without deduction or
offset, prior notice or demand, commencing on the Commencement Date and
continuing through the term of this Lease, together with such other sums
(including Lessee's Share of Common Area Operating Expenses (defined in
Paragraph 1.6(b) of the Lease)) as are payable by Lessee to Lessor under the
terms of this Lease. Base Rent for any period during the Lease term which period
is less than one (1) full month shall be a prorata portion of the monthly Base
Rent on the actual number of days in such month.
(c) Place of Payment. Rent shall be payable in lawful money of the
----------------
United States of America to Lessor at 0000 Xxxxx Xxxxxxxxx, Xxxxx 000, Xxxxx
Xxxxx, Xxxxxxxxxx 00000, or to such other person(s) or at such other place(s) as
Lessor may designate in writing.
(d) Base Rent During Extended Term. If Lessee elects to extend the
------------------------------
Lease term pursuant to Section 1.3(d) of this Addendum, the Base Rent payable by
Lessee for the Extended Term shall be in an amount equal to the fair market
rental value of the Premises in relation to market conditions at the time of the
commencement of the Extended Term (including, but not limited to, rental rates
for comparable space within a six mile radius of the Premises with comparable
tenant improvements and taking into consideration any adjustments to rent based
upon direct costs (operating expenses) and taxes, load factors, and/or cost of
living or other rental adjustments, the relative strength of the tenants; the
size of the space; rental concessions and tenant improvement allowances then
being offered for other space (Lessee hereby acknowledging that Lessor is not
obligated to provide an improvement allowance for the Extended Term), and any
other factors which affect market rental values at the time of the commencement
of the Extended Term, but without taking into consideration to the value of any
leasehold improvements installed in the Premises by Lessee at Lessee's sole
cost); however, the Base Rent payable during the Extended Term shall in no event
be lower than the Base Rent payable during the month immediately prior to the
commencement of the Extended Term.
30
(i) Mutual Agreement. After timely receipt by Lessor of Lessee's
-----------------
notice of exercise of the option to extend the Lease term, Lessor and Lessee
shall have a period of fifteen (15) days in which to agree on the Base Rent for
the Extended Term. If Lessor and Lessee agree on said Base Rent during such
fifteen (15) day period, they shall immediately execute an amendment to this
Lease stating the Base Rent for the Extended Term. If Lessor and Lessee are
unable to agree on the Base Rent for the Extended Term as aforesaid, then the
provisions of Section 1.5(d)(ii) below shall apply.
(ii) Appraisal. Not earlier than six (6) months prior to the
---------
commencement of the Extended Term, each party at its cost and by giving notice
to the other party, shall appoint an M.A.I. real estate appraiser, with at least
five (5) years full-time commercial appraisal experience in Alameda County, to
appraise and set the fair market rental value of the Premises. If a party does
not appoint an appraiser within ten (10) days after the other party has given
notice of the name of its appraiser, the single appraiser appointed shall be the
sole appraiser and shall set the fair market rental value. The cost of such sole
appraiser shall be borne equally by the parties. If two (2) appraisers are
appointed by the parties as provided in this Section 1.5(d)(ii), the two (2)
appraisers shall meet promptly in an attempt to set the fair market rental
value. If they are unable to agree within twenty (20) days after the last
appraiser has been appointed, then the two (2) appraisers shall attempt to
select a third appraiser meeting the qualifications stated in this Section
1.5(d)(ii) within ten (10) days after the last day the two (2) appraisers are
given to set the fair market rental value. If they are unable to agree on the
third appraiser, either of the parties to this Lease, by giving ten (10) days
notice to the other party, may apply to the presiding judge of the Superior
Court of Alameda County for the selection of a third appraiser who meets the
qualifications stated above. Each of the parties shall bear one-half (1/2) of
the cost of appointing the third appraiser and of paying the third appraiser's
fee. The third appraiser, however selected, shall be a person who has not
previously acted in any capacity for either party. Within twenty (20) days after
the selection of the third appraiser, the majority of the appraisers shall set
the fair market rental value. If the majority of the appraisers are unable to
set the fair market rental value within said twenty (20) day period, the three
(3) appraisals shall be added together and the Total divided by three (3); the
resulting quotient shall be the fair market rental value and shall be deemed
incorporated herein; provided, however, that if any appraisal differs from the
median appraisal by an amount equal to more than ten percent (10%) of such
median appraisal, that appraisal shall be disregarded, and the average of the
remaining appraisals (or the remaining appraisal) shall be the fair market
rental value. In establishing the fair market rental value, the appraiser or
appraisers shall consider the factors referred to in Section 1.5(d)(i) above and
the appraiser or appraiser may include periodic adjustments to the Base Rent
payable during the Extended Term.
12.1 Permitted Transfer. Notwithstanding anything contained in
------------------
Paragraphs 12.1(b) and (c) of the Lease, a change in control of Lessee through
an initial public offering or the subsequent sale of shares of Lessee on a
public exchange shall not constitute an assignment requiring Lessor's consent.
In addition, Lessee may assign or transfer this Lease without Lessor's consent
to any entity resulting from a merger or consolidation with Lessee, or to any
person or entity which acquires all or substantially all of the assets of
Lessee's business as a going concern, provided that (i) Lessee gives Lessor at
least thirty (30) days' prior written notice of such transfer identifying the
surviving entity of such merger or consolidation or the person or entity
acquiring all of the assets of Lessee, (ii) such entity has a Net Worth
immediately after such merger, consolidation or acquisition of not less than the
greater of Lessee's Net Worth as of the date of this Lease or Lessee's Net Worth
as of the date of such merger, consolidation or acquisition; (iii) Lessee
provides Lessor with such financial information as Lessor reasonably requires to
verify the Net Worth requirements set forth above; and (iv) in the case of an
acquisition of all of the assets of Lessee, the acquiring entity promptly
executes and delivers to Lessor an assumption of the Lessee's obligations under
this Lease. Notwithstanding any permitted assignment of the Lease pursuant to
this Paragraph 12.1, all of the terms of the Lease shall remain in full force
and effect and Lessee shall not be released from its obligations and liabilities
under this Lease.
12.2(e) Request for Consent. Each request for consent to an assignment or
-------------------
subletting shall be in writing, accompanied by information relevant to Lessor's
determination as the financial and operational responsibility and
appropriateness of the proposed assignee or sublessee, including but not limited
to the intended use and/or required modification of the Premises, if any. If
Lessor determines in its reasonable discretion that it is necessary to engage
legal counsel to advise Lessor, review assignment or sublease documents or
prepare consent documents, Lessee shall reimburse Lessor for all attorney's fees
and costs incurred by Lessor with respect to Lessee's request for consent to
such assignment or subletting.
12.2(i) Bonus Rent. Upon Lessor's consent to any assignment or subletting,
----------
Lessee shall pay and continue to pay as additional rent over the term of such
assignment or subletting, on a monthly basis, concurrently with payment of Base
31
Rent, fifty percent (50%) of any rent or other economic consideration received
by Lessee as a result of such assignment or subletting, whether denominated
rentals or otherwise which exceeds (a) the cost of interior improvements made by
Lessee for such assignee (or sublessee, as applicable), (b) the amount of
brokerage fees actually paid by Lessee in connection with such assignment or
subletting (the amounts set forth in items (a) and (b) above shall be amortized
over the term of the assignment (or sublease, as applicable), and (c) the sums
which Lessee is obligated to Lessor under the Lease (prorated to reflect
obligations allocable to the portion of the Premises subject to such assignment
or subletting).
13.4 Late Charges. The ten (10) day time period for payment of rent or
------------
other sums due shall end at 4:00 PM Pacific Time on the tenth (10th) calendar
day. If the ten (10) day time period for delivery of rent and other sums due
ends on a Saturday, Sunday, or legal holiday, then such date for delivery shall
be accelerated to 4:00 p.m. Pacific Time of the preceding day which is not a
Saturday, Sunday, or legal holiday.
34. Signage. The provisions of Paragraph 34 of the Lease notwithstanding,
-------
subject to all necessary governmental approvals, and subject to Lessor's
approval (which shall not be unreasonably withheld), Lessee shall have the right
to place identifying signs on the exterior of the Building and on a sign
monument, if applicable, in the Common Areas at the main driveway entrance for
the Building.
IN WITNESS WHEREOF, the parties have executed this Addendum to Standard
Industrial/Commercial Multi-Tenant Lease on the dates set forth below.
LESSOR: LESSEE:
Livermore Airway Business Park, L.P., Intek Information, Inc.,
a California limited partnership a Delaware corporation
By: /s/ Xxxxxxxx X. Xxxx By: /s/ Xxxxx Xxxxxxxx
--------------------- -------------------
Xxxxxxxx X. Xxxx, General Partner
Date: 1 April 99 Name: Xxxxx Xxxxxxxx
Its: Chief Operating Officer
Date: 3/26/99
32
EXHIBIT D
IMPROVEMENT AGREEMENT
This Improvement Agreement is made part of that Standard
Industrial/Commercial Multi-Tenant Lease -- Modified Net dated January 30, 1999
(the "Lease"), by and between LIVERMORE AIRWAY BUSINESS PARK, L.P., a California
limited partnership ("Lessor") and INTEK INFORMATION, INC., a Delaware
corporation ("Lessee").
1. Purpose of Improvement Agreement. The purpose of this Improvement
--------------------------------
Agreement is to set forth the rights and obligations of Lessor and Lessee with
respect to the construction of Tenant Improvements in the Premises. The rights
and obligations of the parties under this Agreement constitute rights and
obligations of the parties under the Lease, and upon any default under the terms
of this Agreement, the default and remedy provisions of the Lease shall apply.
2. Definitions. As used in this Improvement Agreement, the following
-----------
terms shall have the following meanings, and initially capitalized terms which
are not defined below, but which are defined in the Lease and which are used in
this Improvement Agreement, shall have the meanings ascribed to them by the
Lease:
(a) Amortization Amount. "Amortization Amount" shall mean an
-------------------
additional tenant improvement allowance in excess of the TI Allowance in an
amount not to exceed the amount determined by multiplying Three Dollars ($3.00)
by the number of usable square feet comprising the Premises as shown on the
Final Building Plans.
(b) Building Improvements. "Building Improvements" shall mean all
---------------------
work and improvements required to be performed by Lessor in connection with
construction of the Building.
(c) City. "City" shall mean the City of Livermore, California, and
----
any other governmental agencies issuing permits and approvals for construction
of the Building and the Tenant Improvements.
(d) Cost Estimate. "Cost Estimate" shall mean an estimate of the TI
-------------
Costs, as submitted by Lessor to Lessee pursuant to Paragraph 9 below.
(e) Excess TI Costs. "Excess TI Costs" shall mean all TI Costs in
---------------
excess of the TI Allowance and the Amortization Amount.
(f) Final Building Plans. "Final Building Plans" shall mean those
--------------------
final plans, specifications and working drawings for the Building Improvements
to be constructed by Lessor.
(g) Final Tenant Improvement Plans. "Final Tenant Improvement Plans"
------------------------------
shall mean those plans, specifications and working drawings for the Tenant
Improvements to be constructed by Lessor, as approved by Lessor and Lessee
pursuant to Paragraph 5 below.
(h) Preliminary Tenant Improvement Plans. "Preliminary Tenant
------------------------------------
Improvement Plans" means the preliminary plans for the Tenant Improvements
described in Paragraph 5 below.
(i) Substantial Completion and Substantially Complete. "Substantial
-------------------------------------------------
Completion" and "Substantially Complete" shall each mean the date when all of
the following have occurred with respect to the Tenant Improvements: (i) the
construction of the Tenant Improvements has been completed in accordance with
the Final Tenant Improvement Plans and this Improvement Agreement (except for
punch list items which do not substantially interfere with Lessee's access to or
use of the Premises), and (ii) the City has issued a certificate of occupancy or
its equivalent to the extent required to permit occupancy of the Premises. In
the event Lessor is delayed in completing construction of any of the Tenant
Improvements due to the fault or neglect of Lessee, acts of Lessee or Lessee's
agents) or delays caused by change orders requested by Lessee, then, provided in
each such instance Lessee has been given written notice of such applicable
Lessee Delay (as defined in the Lease) within ten (10) days after the date such
Lessee Delay first occurs, the Tenant Improvements shall be deemed completed on
the date the same would have been completed had Lessor not incurred such delays.
33
(j) Tenant Improvements. "Tenant Improvements" shall mean the tenant
-------------------
improvements to be constructed by Lessor in accordance with the Final Tenant
Improvement Plans.
(k) TI Allowance. "TI Allowance" shall mean a sum equal to Thirty
------------
Dollars ($30.00) multiplied by the number of usable square feet comprising the
Premises as shown on the Final Building Plans.
(1) TI Costs. "TI Costs" shall mean and include all costs and
--------
expenses paid or incurred by Lessor in connection with the design, development
and construction of the Tenant Improvements including, without limitation, (i)
all design, architectural and engineering fees and costs, (ii) all building
permit fees and taxes, governmental agency plan check fees, and other
governmental fees and taxes required for the construction and occupancy of the
Tenant Improvements, and (iii) all "hard" construction costs for the
construction of the Tenant Improvements according to the Final Tenant
Improvement Plans and all approved changes thereto, including without
limitation, (1) all labor, supervision, and benefit costs therefor; (2) costs of
all materials; (3) value of all tools and equipment consumed on the job and
rental of all equipment used in the construction; (4) contract price for all
construction work undertaken by Lessor's general contractor and subcontractors;
(5) the cost of all equipment and fixtures, including the cost of installation;
(6) the costs of machinery and equipment rented for the construction of the
Tenant Improvements; (7) costs of reasonable transportation and travel expenses
incurred in connection with the construction of the Tenant Improvements; (8)
cost of minor repairs and replacements and costs of removal of debris; (9) costs
of telephone calls, postage and delivery charges and reasonable xxxxx cash
expenses at the construction site office applicable to the construction of the
Tenant Improvements; (10) costs of construction insurance maintained by Lessor
or the general contractor with respect to the Tenant Improvements; (11) sales,
use or similar taxes related to the construction of the Tenant Improvements and
for which Lessor is liable or responsible; (12) costs of preventing damage or
loss in the event of an emergency (provided the emergency is not caused by the
negligence of the general contractor); (13) such other costs as reasonably may
be incurred by the Lessor in connection with the construction of the Tenant
Improvements.
3. Lessor's Obligation to Construct the Building and Improve the Land. As
------------------------------------------------------------------
of the effective date of the Lease, the land upon which the Building is to be
located is unimproved. Lessor shall improve said land in accordance with the
Final Building Plans and the site improvements shown on the Site Plan attached
to the Lease as Exhibit C.
---------
The Building shall be constructed substantially in accordance with the
Site Plan and the Final Building Plans, all of the foregoing subject to the
approval of, and any changes required by, any appropriate governmental
authority. Construction of the Building shall also be undertaken in accordance
with applicable laws and building code requirements and in a good and
workmanlike manner. The Building shall be constructed in accordance with the
following:
(a) The Building will be constructed according to the Final Building
Plans prepared by Lessor. The Building shall be approximately forty-two thousand
five hundred eight (42,508) rentable square feet as designated by Lessor, in its
sole and absolute discretion, and as permitted by the appropriate governmental
authorities.
(b) As soon as practicable following the execution of the Lease,
Lessor shall complete and deliver to Lessee the Final Building Plans for
Lessee's information in connection with the preparation of plans for the Tenant
Improvements. The Final Building Plans shall substantially conform to or
represent logical developments from the Site Plan.
4. Lessor's Obligation to Construct the Tenant Improvements. Upon
--------------------------------------------------------
completion of the Building Shell, Lessor shall construct the Tenant Improvements
in accordance with the Final Tenant Improvement Plans developed and approved in
accordance with this Improvement Agreement.
5. Final Tenant Improvement Plans. Prior to the effective date of the
------------------------------
Lease, Lessor caused to be prepared and delivered to Lessee preliminary tenant
improvement plans dated February 2, 1999 prepared by Xxxxxxx X. Xxxx, A.I.A.
("Preliminary Tenant Improvement Plans") which show the floor plan, layout, and
architectural design of the Tenant Improvements to be constructed by Lessor in
the Premises. By execution of this Lease, Lessee shall be deemed to have
approved the Preliminary Tenant Improvement Plans.
34
As soon as practicable following the execution of the Lease, Lessor
shall complete and deliver to Lessee final plans, specifications and working
drawings for the Tenant Improvements, which shall be subject to Lessee's
approval. Such final plans, specifications and working drawings shall
substantially conform to or represent logical developments from the Preliminary
Tenant Improvement Plans. Within five (5) days following receipt of such plans
specifications and working drawings, Lessee shall deliver to Lessor either: (i)
written approval of such plans, specifications and working drawings which shall
not be unreasonably withheld, or (ii) specify in writing its objections to such
final plans, specifications and working drawings and all changes that must be
made to the same to satisfy such objections; provided however, Lessee may only
object to such final plans, specifications and working drawings on the basis
that they do not substantially conform to or do not represent a logical
development of the Preliminary Tenant Improvement Plans approved by Lessee. If
Lessee does not deliver written objections to the plans, specifications and
working drawings within the specified time period, Lessee shall be deemed to
have approved the same. If Lessee delivers written objections within such time
period, the parties shall promptly confer and use their best efforts to develop
Final Tenant Improvement Plans that are acceptable to both Lessor and Lessee
within ten (10) days thereafter. When Lessor and Lessee agree upon the final
plans, specifications and working drawings for the Tenant Improvements, Lessor
shall submit the same to all appropriate governmental agencies for approval.
Immediately after all such governmental approvals have been obtained, and after
such Final Tenant Improvement Plans have been approved by Lessor's Lender, if
any, providing financing for construction of the Building and the Tenant
Improvements, or financing for a portion of the cost of such Tenant
Improvements, then such Final Tenant Improvement Plans shall be initialed and
dated by Lessor and Lessee or a representative of Lessor or Lessee. The final
plans, specifications and working drawings for the Tenant Improvements so
approved by Lessor and Lessee (or their designated representatives) are referred
to herein as the "Final Tenant Improvement Plans".
6. Substitutions. In developing the Final Tenant Improvement Plans,
-------------
Lessee shall, whenever feasible, designate and select material and equipment
which can be obtained within normal lead times. If at any time during the plan
development process or the course of construction, it becomes apparent that a
particular material or item of equipment is not or will not be obtainable within
a reasonable period of time, the parties shall meet and confer to find an
acceptable substitute therefor.
7. Changes to Final Tenant Improvement Plans. Once the Final Tenant
-----------------------------------------
Improvement Plans have been approved by Lessor and Lessee, Lessee shall have no
right to order extra work or change orders with respect to the construction of
the Tenant Improvements without the prior written consent of Lessor, which
consent shall not be unreasonably withheld or delayed, provided there is a
reasonable basis for such change. The foregoing notwithstanding, all changes
required by the City in connection with the issuing permits and approvals for
construction of the Tenant Improvements shall be made. All extra work or change
orders requested by Lessee shall be made in writing, shall spec ify the amount
of delay or the time saved resulting therefrom, shall specify any added or
reduced cost and/or construction time resulting therefrom, and shall become
effective and a part of the Final Tenant Improvement Plans once approved in
writing by both parties. Consistent with the foregoing, prior to effecting any
change that will result in a delay in the completion of construction of the
Tenant Improvements, Lessor shall notify Lessee of the estimated amount of added
construction time to effect or implement a change and obtain Lessee's consent
thereto prior to such change being implemented. If a change order requested by
Lessee results in a net increase in the TI Costs which causes the Total TI Costs
to exceed the TI Allowance but not the Amortization Amount, such TI Cost shall
be amortized over the term of the Lease and added to the Base Rent in accordance
with Section 12.B(2) of this Improvement Agreement. If a change order requested
by Lessee results in a net increase in the TI Costs which causes the Total TI
Costs to exceed the TI Allowance and the Amortization Amount, such TI Cost shall
be paid by Lessee to Lessor in cash prior to commencement of work on such change
order.
8. Cost Estimate for Tenant Improvements.
-------------------------------------
(a) Preliminary Cost Estimate. Promptly following the mutual
-------------------------
execution of the Lease, Lessor shall prepare and submit to Lessee a preliminary
Cost Estimate for the Tenant Improvements which shall be subject to Lessee's
approval. Lessee acknowledges that such preliminary Cost Estimate is only
Lessor's good faith estimate of the TI Costs, and is not a representation or
warranty by Lessor that the TI Costs will be equal to or approximately the
amount of the preliminary Cost Estimate. Lessor shall have no liability
hereunder if the actual TI Costs are greater or substantially greater than the
amount of the preliminary Cost Estimate. Within ten (10) days after receipt of
the preliminary Cost Estimate, Lessee shall notify Lessor in writing of either
(i) Lessee's approval of the preliminary Cost Estimate, or (ii) disapproval
thereof and specific instructions to Lessor to cause the project architect to
modify the plans and/or reduce the scope of the Tenant Improvements in a manner
that will reduce the TI Costs to an amount less than or equal to the TI
Allowance (or the Amortization Amount). Notwithstanding the foregoing, the
parties hereto acknowledge that they or their designated
35
representatives shall meet and confer periodically to try to refine the
Preliminary Tenant Improvement Plans and attempt to obtain more accurate Cost
Estimates for the Tenant Improvements.
(b) Updated Cost Estimate. On or before the date Lessor submits the
---------------------
Final Tenant Improvement Plans to the City for approval (or promptly
thereafter), Lessor provide Lessee with an updated Cost Estimate based on the
Final Tenant Improvement Plans. Within seven (7) days after receipt of the
updated Cost Estimate, Lessee shall notify Lessor in writing of either (i)
Lessee's approval of the updated Cost Estimate, or (ii) disapproval thereof and
specific instructions to Lessor to modify the plans and/or reduce the scope of
the Tenant Improvements in a manner that will reduce the TI Costs to an amount
less than or equal to the TI Allowance (or the Amortization Amount). If Lessee
disapproves the updated Cost Estimate and instructs Lessor to modify the plans
or reduce the scope of the Tenant Improvements, then Lessor shall cause the
Final Lessee Improvement Plans to be revised in a manner reasonably requested by
Lessee and shall deliver a revised Cost Estimate to Lessee for approval in the
same manner as described above. Lessee acknowledges and agrees that if the
amount of time incurred to modify the Preliminary or Final Tenant Improvement
Plans and/or reduce the scope of the Tenant Improvements as directed by Lessee
as stated above, results in a delay in the Substantial Completion of the
Improvements, then such delay shall constitute a Lessee Delay.
9. Construction of Tenant Improvements. Lessor shall, at the expense of
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Lessor and Lessee as specified in Paragraph 12.B below, construct the Tenant
Improvements, in accordance with the following:
(a) Building Permit. As soon as the Final Tenant Improvement Plans
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have been approved by Lessor and Lessee, Lessor shall apply for a building
permit (and all other required governmental permits and approvals) for the
Tenant Improvements, and shall diligently pursue the obtaining of such permits
and approvals.
(b) Commencement of Construction of Tenant Improvements. Final Tenant
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Improvement Plans have been approved by Lessor, Lessor's lender, if any, Lessee
and the City, and the governmental permits and approvals for the Tenant
Improvements have been issued, and Lessor has completed so much of the Building
as to permit Lessor to commence construction of the Tenant Improvements, Lessor
shall commence construction of the Tenant Improvements and shall diligently
prosecute such construction to completion.
10. Construction Period Insurance.
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(a) From the commencement of construction of the Tenant Improvements
until Substantial Completion, Lessor shall obtain and maintain, or shall cause
to be obtained and maintained, the following insurance:
(i) Commercial general liability insurance, on an occurrence
basis, insuring against bodily injury and property damage. with a liability
limit of at least $2,000,000 insuring Lessor and naming Lessee as an additional
insured;
(ii) Worker's compensation insurance, in amounts required by law;
and
(iii) "All risk" builder's risk insurance, including, but not
limited to, coverage against loss of damage by fire, vandalism and malicious
mischief, covering improvements in place and all material and equipment at the
job site or stored off-site (to the extent owned by Lessor) furnished in
connection with the construction of the Tenant Improvements (but excluding
equipment or other personal property of the contractor or any subcontractors) in
an amount equal to one hundred percent (100%) of the contract price. Such
insurance shall: (i) insure Lessor and Lessor's Lender (if required by such
lender), as their interests may appear; (ii) name Lessor or Lessor's Lender (if
required by such under) as the loss payee, and (iii) provide for severability of
interests or include a cross-liability endorsement, such that an act or omission
of an insured shall not reduce or avoid coverage of other insureds.
(b) The cost of such insurance attributable to the Tenant
Improvements (as equitably determined by Lessor) shall be part of the TI Costs.
11. Delivery of Possession, Punch List and Acceptance Agreement.
(a) As soon as the Tenant Improvements are Substantially Completed,
Lessor and Lessee shall together walk through the Premises and inspect the
Tenant Improvements so completed, using reasonable efforts to discover all
uncompleted or defective construction. Unless any uncompleted or defective
construction would materially affect
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Lessee's ability to conduct its business, then when such inspection has been
completed, Lessee shall sign an acceptance agreement which shall (i) include a
list of all "punchlist" items which the parties agree are to be corrected by
Lessor and (ii) state the Commencement Date. Lessor shall use diligent and
reasonable efforts to complete and/or repair all "punch list" items within
thirty (30) days after receiving the acceptance agreement and punchlist.
12. Payment of Costs; Adjustment to Base Rent.
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(a) Building and Site Improvements. Lessor shall complete all
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Building and site improvements at Lessor's sole cost and expense.
(b) Tenant Improvements. The TI Costs for the Tenant Improvements
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shall be paid by Lessor and Lessee as follows:
(i) Lessor shall pay all TI Costs up to the TI Allowance.
(ii) The Base Rent specified in Section 1.5 of the Addendum to
Lease was computed based on the Total TI Costs not exceeding the TI Allowance.
In the event the TI Costs exceed the TI Allowance, then (i) Lessor shall pay all
TI Costs in excess of the TI Allowance and up to the Amortization Amount, and
(ii) the Base Rent specified in said Section 1.5 shall be increased by at the
rate of Two Cents ($0.02) per rentable square foot for each One Dollar ($1.00)
per usable square foot in TI Costs in excess of the TI Allowance (but in no
event more than the maximum Amortization Amount of Three Dollars ($3.00) per
usable square foot).
(c) Lessee shall pay all Excess TI Costs. Excess TI Costs shall be
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paid by Lessee to Lessor prior to the commencement of construction of the Tenant
Improvements. In the event any change order requested by Lessee after the
commencement of construction results in Excess TI Costs, Lessee shall pay the
Excess TI Costs to Lessor prior to commencement of work in such change order.
13. Effect of Agreement. In the event of any inconsistency between this
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Improvement Agreement and the Lease, the terms of this Improvement Agreement
shall prevail.
14. Time of the Essence. Lessor and Lessee agree that time and strict
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punctual performance are of the essence with respect to this Improvement
Agreement.
15. Condition Precedent. If Lessor has not received all governmental
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permits and approvals for the construction of the Building and the Tenant
Improvements by September 1, 1999, then Lessor may terminate the Lease and this
Improvement Agreement by written notice to Lessee given within fifteen (15)
business days thereafter. In the event of such termination, Lessor shall return
the Security Deposit and first month's Base Rent to Lessee concurrently with its
notice of termination of the Lease.
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